N-30D 1 a2040162zn-30d.txt N-30D | Dresdner RCM Global Funds | Annual Report | December 31, 2000| Own the World. [ARTWORK WITH GLOBE, IN THE BACKGROUND] Domestic Funds DRESDNER RCM LARGE CAP GROWTH FUND DRESDNER RCM TAX MANAGED GROWTH FUND DRESDNER RCM MIDCAP FUND DRESDNER RCM SMALL CAP FUND DRESDNER RCM BIOTECHNOLOGY FUND DRESDNER RCM BALANCED FUND Global Funds DRESDNER RCM GLOBAL EQUITY FUND DRESDNER RCM GLOBAL SMALL CAP FUND DRESDNER RCM GLOBAL TECHNOLOGY FUND DRESDNER RCM GLOBAL HEALTH CARE FUND International Funds DRESDNER RCM INTERNATIONAL GROWTH EQUITY FUND DRESDNER RCM EMERGING MARKETS FUND DRESDNER RCM EUROPE FUND DRESDNER RCM STRATEGIC INCOME FUND [DRESDNER RCM GLOBAL FUNDS LOGO] Dresdner RCM Global Funds TABLE OF CONTENTS Shareholder's Letter 1 Performance and Portfolios of Investments: Dresdner RCM Large Cap Growth Fund 2 Dresdner RCM Tax Managed Growth Fund 9 Dresdner RCM MidCap Fund 16 Dresdner RCM Small Cap Fund 24 Dresdner RCM Biotechnology Fund 32 Dresdner RCM Balanced Fund 38 Dresdner RCM Global Equity Fund 50 Dresdner RCM Global Small Cap Fund 59 Dresdner RCM Global Technology Fund 69 Dresdner RCM Global Health Care Fund 76 Dresdner RCM International Growth Equity Fund 82 Dresdner RCM Emerging Markets Fund 91 Dresdner RCM Europe Fund 98 Dresdner RCM Strategic Income Fund 106 Statements of Assets and Liabilities 112 Operations 116 Changes in Net Assets 120 Financial Highlights 131 Notes to Financial Highlights 138 Notes to Financial Statements 139
February 12, 2001 Dear Shareholder: We are pleased to present the Dresdner RCM Global Funds' Annual Shareholder Report for the twelve months ended December 31, 2000. Once again, technology was the year's major investment story, except that the news was quite different in 2000. Instead of 1999's 86% surge, the Nasdaq fell 39% in 2000, its worst year ever. Slower economic growth and disappointing corporate profits caused the change in fortunes, as investors shifted to defensive areas such as consumer staples, financial services, health care and utilities. Because technology has become an increasingly large part of the overall stock market, the broader indices fell as well. For the year, the Standard & Poor's 500 Index was down more than 9%, its worst performance in a decade. Global markets followed suit, with few bright spots around the world. Japan was quite weak, as its long-awaited economic rebound turned out to be a false alarm. Latin America and much of technology-dominated Asia were skittish as investors turned risk-averse. Europe was also difficult due in part to its weak currency, although the last few weeks brought hopeful signs as the Euro rallied. In contrast, fixed-income markets generated mostly positive results. In the face of rising interest rates, U.S. Treasury securities rallied in the first half of 2000 after the government announced an aggressive buyback program in response to the federal budget surplus. By the second half of the year, the Federal Reserve Board shifted away from a tightening stance as the U.S. economy abruptly decelerated, inflation worries ebbed and intermediate and long-term interest rates declined. Once again, Treasury notes and bonds performed very well. Corporate bonds lagged Treasury and mortgage-backed securities, while high-yield debt underperformed as investors became very sensitive to credit quality concerns. By the end of the year, yield spreads on high-yield bonds were more than 8 percentage points, their highest levels since the last recession a decade ago. Investment-grade corporate bond yields offered 2 percentage points more than Treasury securities of comparable maturity. It is likely that the first half of 2001 will be a good period for bonds as the Fed continues its efforts to jumpstart the economy. The stock market's performance, particularly in the technology area, will depend in large measure on the Fed's effectiveness in keeping the economy out of recession. Still, it is unlikely that investors will abandon their interest in companies with solid profits and sound business models. Regardless of the environment, Dresdner RCM will continue to focus on a bottom-up approach to stock selection. In identifying possible investments, Dresdner RCM, in cooperation with its worldwide affiliates, draws on the expertise of nearly 200 investment professionals, primarily securities analysts and portfolio managers. In addition to having traditional finance credentials, many also have advanced degrees or industry experience in the areas of the market that they cover such as engineering or medicine. The Funds also draw from Grassroots-SM- Research, an innovative adjunct to traditional research efforts, which uncovers and confirms marketplace demand for key products and services. Inside, you will find discussions on each mutual fund provided by Dresdner RCM Global Fund portfolio managers. These discussions review relevant market conditions, the factors affecting performance, the investment strategies employed in response to last year's economic and market conditions and each fund's outlook for 2001. The reports also include performance summaries, lists of holdings and portfolio weightings as of December 31, 2000. Despite the challenge of a difficult market environment, we are proud of the performance of our mutual funds this past year, and thank you for your continued confidence in the Dresdner RCM Global Funds. If you would like more information on a specific fund, or you have any questions about the material in this report, please call us at 1-800-726-7240 or visit us at www.DRCMFunds.com. Sincerely, /s/ DeWitt F. Bowman /s/ Theodore J. Coburn DeWitt F. Bowman Theodore J. Coburn Chairman Chairman Dresdner RCM Global Funds, Inc. Dresdner RCM Investment Funds Inc.
Page 1 Dresdner RCM Large Cap Growth Fund Management's Performance Review Despite the backdrop of a quickly contracting economy and a volatile equity market throughout the year, the Dresdner RCM Large Cap Growth Fund was able to end the year outperforming its S&P 500 Index benchmark. The steps taken to reposition the Fund's portfolio securities helped protect some of the Fund's relative performance. For the 12 months ended December 31, 2000, the Dresdner RCM Large Cap Growth Fund produced total returns of -8.37% and -8.71% for the Class I and Class N shares, respectively. In comparison, the S&P 500 Index, the Fund's primary benchmark, returned -9.10%. For the fourth quarter of 2000, the Fund produced total returns of -11.07% and -11.10% for the Class I and Class N shares, respectively. In comparison, the Index returned -7.82%. MARKET REVIEW With the tremendous momentum of 1999 continuing into 2000, the first quarter of the year was strong for growth investors, particularly in the technology sector. However, as the year progressed, the economic landscape changed. Real growth, as represented by the U.S. Gross Domestic Product, went from a torrid 5.4% in the first quarter and 5.6% in the second quarter, to 2.2% by the third quarter, with the data as of this writing indicating further decline. As a result of the economic deceleration and in the hope of bringing the economy to a "soft landing," the Federal Reserve changed its stance in December from favoring a tightening monetary policy to a bias towards easing. Engineering a soft landing may prove more difficult given the global environment that unfolded by the third quarter. The world economy as a whole softened in the wake of the Euro crisis. Moreover, oil prices were substantially higher over the period. Technology stocks caught the brunt of the economic changes, proving to be more interest-sensitive than the market thought previously. Throughout the year, the technology sector was extremely volatile, with investors moving from New to Old Economy stocks. By the end of March, the tech-heavy Nasdaq had experienced four corrections of 10% or more. In the following two months, the index dropped precipitously -- nearly 40% -- though it rebounded in June. The weakness in technology continued through the second half of 2000 with stocks in that sector continuing to feel the effects of higher interest rates and a slowing economy. By the fourth quarter, not only technology but also companies across a broad spectrum of industries continued to announce less-than-expected revenues and earnings growth. They lowered forecasts for the quarter-end and for 2001 causing stock prices to weaken. With extended valuations and lowered expectations, technology stocks suffered one of the worst years in their history. In the fourth quarter, the Nasdaq fell 32.73%, closing the year down 39.29%. Some of the sectors previously hurt by macroeconomic factors and lowered expectations during the first three quarters of 2000 began to recover by year-end. Investors anticipated a better operating environment in the wake of probable interest rate cuts by the Fed and improving the performance of retail and cyclical stocks. Defensive sectors, including utilities, financials, and energy stocks posted solid returns after the first quarter and through the end of the year, though with more moderate gains in the final quarter of the year. These stocks appeared to have benefited from investment rotation out of technology. Pharmaceutical stocks also did well, overcoming concerns of regulation in this election year. FACTORS AFFECTING PERFORMANCE As the fundamental economic environment was changing, slowing dramatically, Dresdner RCM Global Investors LLC ("Dresdner RCM"), the Fund's investment manager, repositioned the Fund more defensively to protect the relative performance advantage. The first quarter was strong for technology stocks. However, they weakened throughout the rest of the year, with most industries within that sector posting large, double-digit losses for the period. In 2000, Dresdner RCM reduced the technology position in the Fund from an overweight to an underweight by year-end, reducing holdings in communications equipment by trimming Nortel Networks and eliminating shares of JDS Uniphase and Lucent entirely. Funds were redeployed into the purchase of Juniper Networks, a high end router manufacturer, thus broadening the Fund's exposure to networking. The purchase of SDL Inc. and Corning increased exposure to the optics area. Stock selection in this group was a large contributor to the relative performance for the year and for the fourth quarter. Page 2 Dresdner RCM Large Cap Growth Fund Management's Performance Review Semiconductor stocks plunged during the year on uncertainty related to the growth cycle. The Fund was underweight in this sector, which positively impacted performance for the year. In the fourth quarter, shares of Texas Instruments were eliminated and the holdings of Xilinx were reduced. The proceeds bought software including Siebel Systems and VERITAS Software. These companies have continued to demonstrate the ability to grow revenues and earnings. The Fund's overweight in pharmaceuticals helped performance, but it was offset somewhat by weak stock selection. Dresdner RCM increased the Fund's exposure to pharmaceuticals throughout the year, adding Pharmacia and Schering-Plough in the fourth quarter. Strong stock picking in the biotech sector aided performance for the year. Positions in Waters Corp. and MedImmune were initiated. The underweight in interest-sensitive stocks, including banks, financials and utilities hurt the Fund's performance, given investors' choice to move to those sectors and out of technology. OUTLOOK As the economy slows, it is likely that investors will continue to be concerned about the potential of a hard economic landing and the associated impact on corporate profits. This may add to the already high level of volatility of share prices. Though Dresdner RCM remains cautious with respect to stocks in the short-term, a number of companies appear to possess outstanding fundamentals and attractive stock prices. The Fund cut exposure in technology companies because, in many cases, the valuations did not allow for any cyclical slowdown in earnings. The technology companies that remain are those Dresdner RCM feels have compelling long-term growth opportunities and are clear leaders in their markets. The Fund plans to continue to be underweight in credit sensitive and cyclical sectors of the market, focusing on companies and sectors where earnings growth is expected to continue. Dresdner RCM remains bullish on health care and selective technology stocks, as they appear to offer outstanding long-term upside potential, despite the higher valuations and recent volatility. Page 3 Dresdner RCM Large Cap Growth Fund Total Return Index Comparison(b) EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC $10,000 Investment (12/31/96 - 12/31/00)(c)(d)(f)
CLASS I SHARES(C) S&P 500 INDEX(A) 12/96 $10,000 $10,000 1/97 $10,640 $10,625 2/97 $10,570 $10,708 3/97 $9,920 $10,268 4/97 $10,490 $10,881 5/97 $11,300 $11,544 6/97 $11,880 $12,061 7/97 $13,020 $13,021 8/97 $12,210 $12,292 9/97 $13,230 $12,965 10/97 $12,930 $12,532 11/97 $13,140 $13,113 12/97 $13,199 $13,338 1/98 $13,599 $13,486 2/98 $14,647 $14,458 3/98 $15,337 $15,199 4/98 $15,737 $15,352 5/98 $15,263 $15,088 6/98 $16,190 $15,701 7/98 $16,232 $15,533 8/98 $13,515 $13,287 9/98 $14,716 $14,139 10/98 $15,737 $15,288 11/98 $16,864 $16,215 12/98 $19,020 $17,148 1/99 $20,470 $17,865 2/99 $19,728 $17,310 3/99 $21,460 $18,002 4/99 $21,118 $18,699 5/99 $20,305 $18,257 6/99 $21,837 $19,271 7/99 $21,330 $18,670 8/99 $21,613 $18,577 9/99 $21,425 $18,068 10/99 $22,850 $19,211 11/99 $24,265 $19,601 12/99 $27,549 $20,756 1/00 $27,000 $19,714 2/00 $27,549 $19,341 3/00 $29,528 $21,233 4/00 $28,040 $20,594 5/00 $26,812 $20,171 6/00 $28,575 $20,668 7/00 $28,199 $20,345 8/00 $29,875 $21,609 9/00 $28,387 $20,468 10/00 $27,838 $20,382 11/00 $25,281 $18,776 12/00 $25,243 $18,867
PERFORMANCE(b) DECEMBER 31, 2000
CUMULATIVE SINCE SINCE LARGE CAP GROWTH FUND 1 YEAR 3 YEARS INCEPTION INCEPTION Class I Average Annual Total Return(c)(d) -8.37% 24.13% 26.05% 152.43% Class N Average Annual Total Return(e)(f) -8.71% 23.81% 25.73% 149.87% S&P 500 Index Average Annual Total Return(a) -9.10% 12.26% 17.20% 88.67%
The data above represents past performance of the Fund and may not indicate future performance. The investment return and principal value of an investment in the Fund will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. -------------------------------- (a) The Standard & Poor's 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. (b) Returns assume reinvestment of all dividends and capital gains distributions at net asset value. (c) The Class I shares commenced operations on December 31, 1996. (d) Returns from January 1, 1998 through December 31, 1998 reflect the deduction of Rule 12b-1 fees. On December 31, 1998, all Fund shares were redesignated as Class I shares, which do not pay Rule 12b-1 fees. Performance results for periods after December 31, 1998 do not reflect the deduction of Rule 12b-1 fees. (e) Class N shares were first issued on March 2, 1999, and pay Rule 12b-1 fees. Class N returns through March 2, 1999 are based on Class I returns and reflect the deduction of Rule 12b-1 fees applicable to Class N shares. (f) The value of a $10,000 investment for Class N is $24,987 for the period from December 31, 1996 to December 31, 2000. The performance of the Class N shares is lower than Class I shares due to the effects of 12b-1 fees. Page 4 Dresdner RCM Large Cap Growth Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) --------------------------------------------------------------------------------- EQUITY INVESTMENTS COMMERCIAL GOODS & SERVICES SECTOR 12.0% CAPITAL GOODS 9.2% 12,000 US General Dynamics Corp. $ 936,000 56,000 US General Electric Co. 2,684,500 41,500 BH Tyco International Ltd. 2,303,250 ----------- 5,923,750 ----------- COMMERCIAL SERVICES & SUPPLIES 2.4% 19,000 US Enron Corp. 1,579,375 ----------- TRANSPORTATION 0.4% 4,000 US United Parcel Service Inc. (Class B) 235,250 ----------- CONSUMER DISCRETIONARY SECTOR 8.4% CONSUMER DURABLES & APPAREL 1.6% 19,000 US Nike Inc. (Class B) 1,060,438 ----------- MEDIA 2.7% 12,000 US Clear Channel Communications Inc. * 581,250 9,000 US The Walt Disney Co. 260,437 17,000 US Time Warner Inc. 888,080 ----------- 1,729,767 ----------- RETAILING 4.1% 15,000 US Home Depot Inc. 685,312 17,000 US Target Corp. 548,250 26,000 US Wal-Mart Stores Inc. 1,381,250 ----------- 2,614,812 ----------- CONSUMER STAPLES SECTOR 9.1% FOOD & DRUG RETAILING 2.6% 9,000 US Safeway Inc. * 562,500 25,000 US SYSCO Corp. 750,000 9,000 US Walgreen Co. 376,312 ----------- 1,688,812 ----------- FOOD, BEVERAGE & TOBACCO 3.3% 32,000 US Anheuser-Busch Cos. Inc. 1,456,000 10,500 US Coca Cola Co. 639,844 ----------- 2,095,844 ----------- HOUSEHOLD & PERSONAL PRODUCTS 3.2% 8,000 US Avon Products Inc. 383,000
The accompanying notes are an integral part of the financial statements. Page 5 Dresdner RCM Large Cap Growth Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) --------------------------------------------------------------------------------- EQUITY INVESTMENTS (CONTINUED) HOUSEHOLD & PERSONAL PRODUCTS (CONTINUED) 17,000 US Colgate-Palmolive Co. $ 1,097,350 7,500 US Procter & Gamble Co. 588,281 ----------- 2,068,631 ----------- ENERGY SECTOR 1.9% ENERGY 1.9% 15,500 US Schlumberger Ltd. 1,239,031 ----------- FINANCIAL SECTOR 13.3% BANKS 5.4% 19,000 US Bank of New York Inc. 1,048,562 38,000 US Citigroup Inc. 1,940,375 9,000 US Wells Fargo & Co. 501,188 ----------- 3,490,125 ----------- DIVERSIFIED FINANCIALS 1.9% 14,000 US Federal National Mortgage Association 1,214,500 ----------- INSURANCE 6.0% 15,000 BH ACE Ltd. 636,563 26,000 US American International Group Inc. 2,562,625 6,100 US Marsh & McLennan Cos. Inc. 713,700 ----------- 3,912,888 ----------- HEALTH CARE SECTOR 25.4% HEALTH CARE EQUIPMENT & SUPPLIES 2.2% 10,000 US Applera Corp. - Applied Biosystems Group * 940,625 5,500 US Waters Corp. * 459,250 ----------- 1,399,875 ----------- PHARMACEUTICALS & BIOTECHNOLOGY 23.2% 33,000 US Amgen Inc. * 2,109,937 4,200 US Bristol-Myers Squibb Co. 310,538 11,000 US Eli Lilly & Co. 1,023,687 8,000 US Genentech Inc. * 652,000 15,000 UK GlaxoSmithKline PLC (ADR) 840,000 8,500 US Human Genome Sciences Inc. * 589,156 9,500 US Johnson & Johnson 998,094 6,500 US MedImmune Inc. * 309,969 14,000 US Merck & Co. Inc. 1,310,750 10,500 US Millennium Pharmaceuticals Inc. * 649,688 90,000 US Pfizer Inc. 4,140,000
The accompanying notes are an integral part of the financial statements. Page 6 Dresdner RCM Large Cap Growth Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) --------------------------------------------------------------------------------- EQUITY INVESTMENTS (CONTINUED) PHARMACEUTICALS & BIOTECHNOLOGY (CONTINUED) 25,500 US Pharmacia Corp. $ 1,555,500 8,500 US Schering-Plough Corp. 482,375 ----------- 14,971,694 ----------- TECHNOLOGY SECTOR 20.8% COMMUNICATIONS EQUIPMENT 9.1% 53,000 US Cisco Systems Inc. * 2,027,250 9,000 US Corning Inc. 475,313 2,700 US Juniper Networks Inc. * 340,369 37,000 FI Nokia Oyj (ADR) 1,609,500 8,500 CA Nortel Networks Corp. 272,531 7,500 US QUALCOMM Inc. * 616,406 3,500 US SDL Inc. * 518,656 ----------- 5,860,025 ----------- COMPUTERS & PERIPHERALS 4.8% 27,000 US EMC Corp. * 1,795,500 7,500 US Hewlett-Packard Co. 236,719 5,500 US International Business Machines Corp. 467,500 22,000 US Sun Microsystems Inc. * 613,250 ----------- 3,112,969 ----------- INTERNET SOFTWARE & SERVICES 0.5% 9,000 US America Online Inc. * 313,200 ----------- SEMICONDUCTORS & INSTRUMENTS 1.3% 28,000 US Intel Corp. 847,000 ----------- SOFTWARE 5.1% 5,000 IS Check Point Software Technologies Ltd. * 667,812 30,000 US Microsoft Corp. * 1,301,250 18,000 US Oracle Corp. * 523,125 6,700 US Siebel Systems Inc. * 453,088 4,000 US VERITAS Software Corp. * 350,000 ----------- 3,295,275 ----------- TELECOMMUNICATION SERVICES SECTOR 6.9% TELECOMMUNICATION SERVICES 6.9% 22,000 US Nextel Communications Inc. (Class A) * 544,500 33,000 US Qwest Communications International Inc. * 1,353,000 23,000 US SBC Communications Inc. 1,098,250 8,500 BH TyCom Ltd. * 190,188
The accompanying notes are an integral part of the financial statements. Page 7 Dresdner RCM Large Cap Growth Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) --------------------------------------------------------------------------------- EQUITY INVESTMENTS (CONTINUED) TELECOMMUNICATION SERVICES (CONTINUED) 17,000 UK Vodafone Group PLC (ADR) $ 608,812 47,000 US WorldCom Inc. 658,000 ----------- 4,452,750 ----------- TOTAL EQUITY INVESTMENTS (COST $66,048,668) 97.8% 63,106,011 ----------- SHORT-TERM INVESTMENTS MONEY MARKET FUNDS 3.8% 1,238,462 US SSgA Money Market Fund 1,238,462 1,238,462 US SSgA U.S. Government Money Market Fund 1,238,462 ----------- TOTAL SHORT-TERM INVESTMENTS (COST $2,476,924) 3.8% 2,476,924 ----------- TOTAL INVESTMENTS (COST $68,525,592)** 101.6% 65,582,935 OTHER ASSETS LESS LIABILITIES (1.6)% (1,059,610) ----------- NET ASSETS 100.0% $64,523,325 ===========
-------------------------------- * Non-income producing security ADR American Depositary Receipt Tax Information: ** For Federal income tax purposes, cost is $68,822,339 and gross aggregate unrealized appreciation (depreciation) for all securities is as follows: Unrealized appreciation $4,368,224 Unrealized depreciation (7,607,628) ---------- Net unrealized depreciation $(3,239,404) ==========
-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- The Fund's investments in securities at December 31, 2000 categorized by country (unaudited):
% OF NET ASSETS ------------------------------- COUNTRY SHORT-TERM COUNTRY CODE EQUITIES AND OTHER TOTAL ------------------------------------------------------------------------ Bermuda BH 4.9% 4.9% Canada CA 0.4% 0.4% Finland FI 2.5% 2.5% Israel IS 1.0% 1.0% United Kingdom UK 2.2% 2.2% United States US 86.8% 2.2% 89.0% ------ ------ ----- Total 97.8% 2.2% 100.0% ====== ====== =====
The accompanying notes are an integral part of the financial statements. Page 8 Dresdner RCM Tax Managed Growth Fund Management's Performance Review The economy's reversal during the third quarter and the volatile equity market throughout the year provided the backdrop for the Dresdner RCM Tax Managed Growth Fund. For the 12 months ended December 31, 2000, the Fund produced total returns of -8.07% and -8.09% for the Class I and Class N shares, respectively. In comparison, the S&P 500 Index, the Fund's benchmark, returned -9.10%. For the fourth quarter of 2000, the Fund produced total returns of -11.38% and -11.30% for the Class I and Class N shares, respectively. In comparison, the Index returned -7.82%. MARKET REVIEW With the tremendous momentum of 1999 continuing into 2000, the first quarter of the year was strong for growth investors, particularly in the technology sector. However, as the year progressed, the economic landscape changed. Real growth, as represented by the U.S. Gross Domestic Product, went from a torrid 5.4% in the first quarter and 5.6% in the second quarter, to 2.2% in the third quarter, with data indicating further decline. As a result of the economic deceleration and in the hope of bringing the economy to a "soft landing," the Federal Reserve changed its stance in December from favoring tightening monetary policy to a bias towards easing. Engineering a soft landing may prove more difficult given the global environment that unfolded by third quarter. The world economy as a whole softened in the wake of the Euro crisis. Moreover, oil prices were substantially higher over the period, creating the threat of inflation. Technology stocks caught the brunt of the economic changes, proving to be more interest-sensitive than the market thought previously. Throughout the year, the technology sector was extremely volatile, with investors moving from New to Old Economy stocks. By the end of March, the tech-heavy Nasdaq had experienced four corrections of 10% or more. In the following two months, the index dropped precipitously -- nearly 40%, though it rebounded in June. The weakness in technology continued through the second half of 2000 with stocks in that sector continuing to feel the effects of higher interest rates and a slowing economy. By the fourth quarter, not only technology, but also companies across a broad spectrum of industries announced less-than-expected revenues and earnings growth. Companies lowered forecasts for the quarter and for 2001, causing stock prices to weaken. With extended valuations and lowered expectations, technology stocks suffered one of the worst years in their history. In fourth quarter, the Nasdaq fell 32.73%, closing the year down 39.29%. Some of the sectors previously hurt by macroeconomic factors and negatively revised earnings forecasts during the first three-quarters, began to recover by year-end. Investors anticipated a better operating environment in the wake of probable interest rate cuts by the Fed and improving performance of retail and cyclical stocks. Defensive sectors, including utilities, financials, and energy stocks posted solid returns after the first quarter and through the end of the year, though with more moderate gains in the fourth quarter. These stocks appeared to have benefited from investment rotation out of technology. Pharmaceutical stocks also did well, overcoming concerns of regulation in this election year. FACTORS AFFECTING PERFORMANCE As the fundamental economic environment was changing, slowing dramatically, Dresdner RCM Global Investors LLC ("Dresdner RCM"), the investment manager of the Fund, repositioned the Fund more defensively to protect its relative performance advantage. The first quarter was strong for technology stocks and Dresdner RCM continued to pursue technology as an investment theme, specifically the demand for bandwidth and capacity in the telecommunications and networking end-markets. Investments in Cisco Systems and JDS Uniphase performed extremely well in the first quarter, and gave the Fund exposure to the demand for telecommunications infrastructure and the build-out of the next generation of networks for the Internet. Positions in certain technology stocks that showed dramatic appreciation were trimmed; the funds were deployed into more neglected sectors that were perceived to have additional growth potential. As the year progressed, technology stocks weakened, with most industries within that sector posting large, double-digit losses for the period. Throughout 2000, Dresdner RCM reduced the Fund's technology Page 9 Dresdner RCM Tax Managed Growth Fund Management's Performance Review position; however, the Fund did continue to own stocks that had growth characteristics, dominant franchises and leadership positions in their respective markets. Stock selection in this group was a large contributor to the relative performance for the fourth quarter and for the year. Semiconductor and computer industry stocks were especially weak during the year, falling precipitously based upon uncertainty about the duration of the growth cycle. The Fund's overweight in pharmaceuticals helped performance in the fourth quarter and year-to-date. Dresdner RCM increased the Fund's exposure to pharmaceuticals throughout the year. Similarly, the biotech sector stocks exhibited outstanding performance during the year but were down somewhat in the fourth quarter. Superior stock selection in this area added value and aided performance with certain biotechnology holdings appreciating more than 50% in May and June. During the second half of the year, concern about the deterioration of lower quality consumer finance companies and regional banks was the rationale behind the underweight in interest-sensitive sectors such as banks, financials and utilities. This hurt the Fund's performance. Investors chose to move out of technology and into those sectors causing an unexpected rebound. Consumer staple stocks posted mixed results for the fourth quarter and the year. The Fund added to positions in Walgreens, and in Sysco, the dominant player in the fragmented U.S. food service distribution business. OUTLOOK It appears that consumer spending, in general, and capital expenditures on technology and telecommunications equipment have been strong drivers of economic growth during the current cycle. With the rapid deceleration that appears to be occurring in these sectors, the risk of a hard landing or outright recession is increasing. The recent economic expansion has been driven in part by unprecedented private sector deficit spending and a corollary buildup of corporate and consumer debt. Adding to the recession risk is the possible drop in spending resulting from having to service this debt in a slower environment. As of the time of this writing, the Federal Reserve has taken the extraordinary step of lowering the Fed Funds target by 0.50% prior to the January meeting, and signaled its willingness to lower rates again if necessary. As the economy slows, it is likely that investors will continue to be concerned about the potential of a hard economic landing and the associated impact on corporate profits. This may add to the already-high level of volatility of share prices. Though Dresdner RCM remains cautious with respect to stocks in the short-term there are a number of companies who appear to posses outstanding fundamentals and attractive stock prices. The Fund cut exposure in technology companies because in many cases, the valuations did not allow for any cyclical slowdown in earnings. The technology companies that remain are those Dresdner RCM feels have compelling long-term growth opportunities and are clear leaders in their markets. The Fund continues to be underweight in credit sensitive and cyclical sectors of the market, focusing on companies and sectors where earnings growth is expected to continue. Dresdner RCM remains bullish on health care and selective technology stocks, as they appear to offer outstanding long-term upside potential, despite the higher valuations and recent volatility. Page 10 Dresdner RCM Tax Managed Growth Fund Total Return Index Comparison(b) EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC $10,000 Investment (12/30/98 - 12/31/00)(c)(e)
S&P 500 CLASS I SHARES INDEX(A) 12/98 $10,000 $10,000 1/99 $10,790 $10,418 2/99 $10,510 $10,094 3/99 $11,610 $10,498 4/99 $11,500 $10,904 5/99 $11,130 $10,647 6/99 $12,130 $11,238 7/99 $11,780 $10,887 8/99 $11,860 $10,833 9/99 $11,550 $10,536 10/99 $12,240 $11,203 11/99 $13,070 $11,430 12/99 $15,244 $12,104 1/00 $14,898 $11,496 2/00 $15,468 $11,279 3/00 $16,576 $12,382 4/00 $15,376 $12,009 5/00 $14,705 $11,763 6/00 $15,824 $12,052 7/00 $15,417 $11,864 8/00 $16,576 $12,601 9/00 $15,814 $11,936 10/00 $15,631 $11,885 11/00 $13,831 $10,949 12/00 $14,014 $11,003
PERFORMANCE(b) DECEMBER 31, 2000
CUMULATIVE SINCE SINCE TAX MANAGED GROWTH FUND 1 YEAR INCEPTION INCEPTION Class I Average Annual Total Return(c) -8.07% 18.38% 40.14% Class N Average Annual Total Return(d)(e) -8.09% 18.19% 39.70% S&P 500 Index Average Annual Total Return(a) -9.10% 4.89% 10.03%
The data above represents past performance of the Fund and may not indicate future performance. The investment return and principal value of an investment in the Fund will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. -------------------------------- (a) The Standard & Poor's 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. (b) Returns assume reinvestment of all dividends and capital gains distributions at net asset value. (c) Class I shares commenced operations on December 30, 1998. (d) Class N shares were first issued on February 12, 1999, and pay Rule 12b-1 fees. Class N returns through February 12, 1999 are based on Class I returns and reflect the deduction of Rule 12b-1 fees applicable to Class N shares. (e) The value of a $10,000 investment for Class N is $13,970 for the period from December 30, 1998 to December 31, 2000. The performance of the Class N shares is lower than Class I shares due to the effects of 12b-1 fees. Page 11 Dresdner RCM Tax Managed Growth Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) ---------------------------------------------------------------------------------- EQUITY INVESTMENTS COMMERCIAL GOODS & SERVICES SECTOR 9.4% CAPITAL GOODS 6.2% 30,000 US General Electric Co. $ 1,438,125 9,300 BH Tyco International Ltd. 516,150 ----------- 1,954,275 ----------- COMMERCIAL SERVICES & SUPPLIES 3.2% 12,400 US Enron Corp. 1,030,750 ----------- CONSUMER DISCRETIONARY SECTOR 7.1% CONSUMER DURABLES & APPAREL 2.2% 17,550 US Harley-Davidson Inc. 697,612 ----------- MEDIA 3.1% 9,700 US Clear Channel Communications Inc. * 469,844 10,350 US Time Warner Inc. 540,684 ----------- 1,010,528 ----------- RETAILING 1.8% 14,200 US Costco Wholesale Corp. * 567,113 ----------- CONSUMER STAPLES SECTOR 11.0% FOOD & DRUG RETAILING 5.9% 28,000 US SYSCO Corp. 840,000 24,600 US Walgreen Co. 1,028,588 ----------- 1,868,588 ----------- FOOD, BEVERAGE & TOBACCO 2.1% 15,000 US Anheuser-Busch Cos. Inc. 682,500 ----------- HOUSEHOLD & PERSONAL PRODUCTS 3.0% 21,600 US Estee Lauder Cos. Inc. (Class A) 946,350 ----------- ENERGY SECTOR 3.7% ENERGY 3.7% 24,750 US Weatherford International Inc. 1,169,438 ----------- FINANCIAL SECTOR 6.9% INSURANCE 6.9% 11,700 US American International Group Inc. 1,153,181 8,900 US Marsh & McLennan Cos. Inc. 1,041,300 ----------- 2,194,481 -----------
The accompanying notes are an integral part of the financial statements. Page 12 Dresdner RCM Tax Managed Growth Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) ---------------------------------------------------------------------------------- EQUITY INVESTMENTS (CONTINUED) HEALTH CARE SECTOR 24.8% HEALTH CARE EQUIPMENT & SUPPLIES 1.9% 12,050 US Inhale Therapeutic Systems Inc. * $ 608,525 ----------- PHARMACEUTICALS & BIOTECHNOLOGY 22.9% 17,650 US Amgen Inc. * 1,128,497 9,550 US Bristol-Myers Squibb Co. 706,103 7,100 US Genentech Inc. * 578,650 15,100 UK GlaxoSmithKline PLC (ADR) 845,600 11,500 US Merck & Co. Inc. 1,076,687 9,600 US Millennium Pharmaceuticals Inc. * 594,000 32,500 US Pfizer Inc. 1,495,000 13,900 US Pharmacia Corp. 847,900 ----------- 7,272,437 ----------- TECHNOLOGY SECTOR 23.1% COMMUNICATIONS EQUIPMENT 9.2% 28,500 US Cisco Systems Inc. * 1,090,125 2,650 US Juniper Networks Inc. * 334,066 15,300 FI Nokia Oyj (ADR) 665,550 6,000 US QUALCOMM Inc. * 493,125 2,300 US SDL Inc. * 340,831 ----------- 2,923,697 ----------- COMPUTERS & PERIPHERALS 2.8% 10,000 US EMC Corp. * 665,000 8,000 US Sun Microsystems Inc. * 223,000 ----------- 888,000 ----------- SEMICONDUCTORS & INSTRUMENTS 1.9% 19,500 US Intel Corp. 589,875 ----------- SOFTWARE 9.2% 26,200 US AvantGo Inc. * 163,750 7,300 IS Check Point Software Technologies Ltd. * 975,006 17,900 US Microsoft Corp. * 776,412 12,700 US Oracle Corp. * 369,094 7,550 US VERITAS Software Corp. * 660,625 ----------- 2,944,887 ----------- TELECOMMUNICATION SERVICES SECTOR 8.9% TELECOMMUNICATION SERVICES 8.9% 26,900 US Qwest Communications International Inc. * 1,102,900 8,750 US SBC Communications Inc. 417,813
The accompanying notes are an integral part of the financial statements. Page 13 Dresdner RCM Tax Managed Growth Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) ---------------------------------------------------------------------------------- EQUITY INVESTMENTS (CONTINUED) TELECOMMUNICATION SERVICES (CONTINUED) 25,400 BH TyCom Ltd. * $ 568,325 21,000 UK Vodafone Group PLC (ADR) 752,062 ----------- 2,841,100 ----------- TOTAL EQUITY INVESTMENTS (COST $30,979,306) 94.9% 30,190,156 ----------- FACE AMOUNT ---------- SHORT-TERM INVESTMENTS COMMERCIAL PAPER 3.8% $1,000,000 US Ford Motor Credit Co., 6.510%, maturing 01/19/01 996,745 200,000 US Ford Motor Credit Co., 6.540%, maturing 01/02/01 199,963 ----------- 1,196,708 ----------- SHARES ---------- MONEY MARKET FUNDS 3.4% 545,839 US SSgA Money Market Fund 545,839 554,627 US SSgA U.S. Government Money Market Fund 554,627 ----------- 1,100,466 ----------- TOTAL SHORT-TERM INVESTMENTS (COST $2,297,174) 7.2% 2,297,174 ----------- TOTAL INVESTMENTS (COST $33,276,480)** 102.1% 32,487,330 OTHER ASSETS LESS LIABILITIES (2.1)% (660,932) ----------- NET ASSETS 100.0% $31,826,398 ===========
-------------------------------- * Non-income producing security ADR American Depositary Receipt Tax Information: ** For Federal income tax purposes, cost is $33,794,356 and gross aggregate unrealized appreciation (depreciation) for all securities is as follows:
Unrealized appreciation $3,513,881 Unrealized depreciation (4,820,907) ---------- Net unrealized depreciation $(1,307,026) ==========
The accompanying notes are an integral part of the financial statements. Page 14 Dresdner RCM Tax Managed Growth Fund Portfolio of Investments December 31, 2000 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- The Fund's investments in securities at December 31, 2000 categorized by country (unaudited):
% OF NET ASSETS ------------------------------- COUNTRY SHORT-TERM COUNTRY CODE EQUITIES AND OTHER TOTAL ------------------------------------------------------------------------ Bermuda BH 3.4% 3.4% Finland FI 2.1% 2.1% Israel IS 3.1% 3.1% United Kingdom UK 5.0% 5.0% United States US 81.3% 5.1% 86.4% ------ ------ ----- Total 94.9% 5.1% 100.0% ====== ====== =====
The accompanying notes are an integral part of the financial statements. Page 15 Dresdner RCM MidCap Fund Management's Performance Review Despite the backdrop of a quickly contracting economy and a volatile equity market throughout the year, the Dresdner RCM MidCap Fund was able to end the year on a positive note. For the 12 months ended December 31, 2000, the Dresdner RCM MidCap Fund produced a total return of 1.25% for Class I shares. In comparison, the Russell MidCap Growth Index fell 11.75%. For the fourth quarter of 2000, the Fund produced a total return of -25.02%. In comparison, the Russell MidCap Growth Index declined 23.25%. On December 18, 2000, shareholders of the Fund approved its reorganization from a series of Dresdner RCM Capital Funds, Inc. to a newly created series of Dresdner RCM Global Funds, Inc. Effective December 29, 2000 all Fund shares were redesignated as Class I shares and new Class N shares were created. MARKET REVIEW Equity markets rewarded momentum strategies during most of 1999 and into the first quarter of 2000. However, as the year progressed, the economic landscape changed. The economy definitively decelerated, and the slowed economy had an effect on companies both large and small. Real growth, as represented by the U.S. Gross Domestic Product, went from a torrid 5.4% in the first quarter and 5.6% in the second quarter, to 2.2% by the third quarter, with current data during indicating further decline. As a result of the economic slowdown and in the hope of bringing the economy to a "soft landing," the Federal Reserve changed its stance in December from favoring tightening monetary policy to a bias towards easing. The uncertainties surrounding the economy as a whole led investors to seek the relative safety of stocks whose price to earnings multiples were less dependent upon high growth assumptions. As a result, value stocks in virtually every market cap segment posted first in 2000, ahead of growth stocks, which had not occurred since 1997. The value subset of the Russell Mid Cap index beat its growth counterpart by just under 31% in 2000, with most of the gain in the fourth quarter. Technology stocks caught the brunt of the economic changes. Throughout the year, the technology sector was extremely volatile, with investors moving from New to Old Economy stocks. By the end of March 2000, the tech-heavy Nasdaq had experienced four corrections of 10% or more. In the following two months, that index dropped precipitously -- nearly 40% -- though it rebounded in June. The weakness in technology continued through the second half of 2000 with stocks in that sector continuing to feel the effects of higher interest rates and a slowing economy. By the fourth quarter, not only technology, but also companies across a broad spectrum of industries continued to announce less-than-expected revenues and earnings growth. They lowered forecasts for the quarter and for 2001, causing stock prices to weaken. With extended valuations and lowered expectations, technology stocks suffered one of the worst years in their history. In the fourth quarter, the Nasdaq fell 32.73%, closing the year down 39.29%. FACTORS AFFECTING PERFORMANCE In the midst of the change in equity market sentiment, Dresdner RCM Global Investors LLC ("Dresdner RCM"), the Fund's investment manager, noted that during volatile trading periods, many profitable companies with strong balance sheets, access to capital, and sound growth prospects sold off nearly as heavily as less sound companies. Seizing these opportunities, the Fund created positions in the highest quality growth companies in each industry in the Fund's investment universe. The first quarter of 2000 was strong for technology stocks. At the beginning of 2000, Dresdner RCM pursued two important investment themes in technology: 1) the cyclical semiconductor cycle and 2) the strong demand for bandwidth and capacity in the telecommunications and networking end-markets. Investment in companies such as Juniper Networks and Ciena were direct plays on the demand for telecommunication infrastructure and the build-out of next generation networks for the Internet. Secondly, with crude oil and natural gas prices near historic highs, and OPEC determined to keep supply in check, the Fund overweighted the energy sector, specifically oil services companies. Finally, Page 16 Dresdner RCM MidCap Fund Management's Performance Review Dresdner RCM identified an emerging trend in healthcare, the mapping of the human genome, and invested in the companies that supply the equipment critical to DNA sequencing. These themes continued to produce excellent results through the second quarter, despite the April and May downdrafts in New Economy stocks, especially those related to the Internet. Superior stock selection in both telecommunications and energy was a key performance driver in that period. Telecommunications and networking end-market stocks such as Redback Networks and SDL particularly added value, as did Weatherford International and BJ Services in the energy sector. Dresdner RCM's adherence to its valuation discipline kept the Fund from plunging along with the Nasdaq in the quarter. Positions in technology were trimmed and the Fund's portfolio managers increased exposure to health care and energy. Despite economic uncertainty and extreme market volatility, outstanding stock selection and industry strategy produced a strong third quarter for the Mid Cap Fund in 2000. A large relative position in health care equipment and supplies contributed positively, with the group continuing to benefit from higher spending in the genomics field. With fundamentals improving, the decision to overweight energy paid off and positions in technology sector stocks, such as Applied Micro Circuits, Mercury Interactive, helped performance as well. Though the Fund finished the year ahead of its benchmark, the Russell MidCap Growth Index, it did lose some ground in the fourth quarter. The under performance was due in part to industry strategy and the overweight positions in software and in media firms. Additionally, positions in communications equipment and in computers and peripherals also detracted from performance. Industry strategy continued to work well with overweight positions in energy and insurance. Excellent stock selection within healthcare and software sectors aided performance. OUTLOOK As the economy slows, it is likely that investors will continue to be concerned about the potential of a hard economic landing and the associated impact on corporate profits. This may add to the already-high level of volatility of share prices. At this juncture, it is difficult to tell how weak the economy may become. Returns could suffer if the U.S. economy does experience a full-blown recession. Given the debate and the range of possible outcomes, Dresdner RCM is less concerned with predicting the exact economic scenario than with being prepared to navigate through changing environments, taking advantage of dynamic market conditions. Dresdner RCM believes that the outlook for U.S. Mid Cap growth stocks is promising. Many of the companies in this market segment appear able to grow their revenues faster than the U.S. equity market as a whole. The Mid Cap growth area has several leaders in the emerging growth industries, and many of these companies have solid balance sheets, quality earnings, and good franchises. There are attractive valuations in these segments, even some in the highly publicized technology sector, as it appears that the market has priced in a substantial risk premium. In January 2001, the Federal Reserve surprised the markets with a 50 basis point cut in its key Fed Funds rate, down to 6%. With this aggressive move, the Fed has shown that it is willing to do what it perceives is necessary to prevent the U.S. economy from slowing too rapidly. The impact of the Fed's monetary stimulus could bode well for this market segment. It appears that the economy is at the beginning of a meaningful easing cycle, and while the past is never a sure guide to the future, history suggests that mid cap stocks tend to do well over the course of an easing cycle. Page 17 Dresdner RCM MidCap Fund Total Return Index Comparison(c) EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC $10,000 investment (11/6/79 - 12/31/00)(d)(g)
CLASS I SHARES RUSSELL MIDCAP INDEX(B) 11/79 $10,000 $10,000 12/79 $10,719 $11,158 1/80 $11,210 $11,777 2/80 $10,792 $11,516 3/80 $9,599 $9,996 4/80 $10,028 $10,641 5/80 $10,856 $11,467 6/80 $11,315 $12,024 7/80 $12,980 $13,034 8/80 $13,656 $13,375 9/80 $14,396 $13,821 10/80 $14,878 $13,966 11/80 $15,935 $15,074 12/80 $15,665 $14,784 1/81 $15,304 $14,439 2/81 $15,725 $14,694 3/81 $17,588 $15,843 4/81 $18,134 $15,918 5/81 $19,279 $16,306 6/81 $18,560 $16,008 7/81 $18,247 $15,809 8/81 $17,371 $14,908 9/81 $16,587 $13,951 10/81 $18,157 $14,914 11/81 $18,503 $15,518 12/81 $18,211 $15,139 1/82 $17,929 $14,583 2/82 $17,527 $13,964 3/82 $17,476 $13,825 4/82 $18,682 $14,486 5/82 $18,511 $13,970 6/82 $18,441 $13,595 7/82 $18,512 $13,274 8/82 $20,047 $14,871 9/82 $20,666 $15,293 10/82 $23,233 $17,338 11/82 $25,235 $18,395 12/82 $25,710 $18,660 1/83 $27,172 $19,319 2/83 $28,967 $19,987 3/83 $30,108 $20,691 4/83 $32,700 $21,984 5/83 $34,645 $22,903 6/83 $36,064 $23,737 7/83 $34,391 $22,991 8/83 $33,610 $22,846 9/83 $34,935 $23,486 10/83 $33,413 $22,575 11/83 $34,930 $23,541 12/83 $34,348 $23,105 1/84 $32,764 $22,449 2/84 $31,089 $21,235 3/84 $31,709 $21,587 4/84 $31,839 $21,350 5/84 $30,674 $20,146 6/84 $32,051 $20,774 7/84 $31,196 $20,166 8/84 $34,191 $22,684 9/84 $33,648 $22,791 10/84 $33,611 $22,880 11/84 $32,993 $22,784 12/84 $33,496 $23,435 1/85 $37,254 $25,659 2/85 $38,042 $26,119 3/85 $37,399 $25,970 4/85 $36,747 $25,894 5/85 $39,165 $27,365 6/85 $39,965 $28,030 7/85 $40,928 $27,994 8/85 $40,385 $27,876 9/85 $38,429 $26,510 10/85 $40,118 $27,883 11/85 $42,578 $29,810 12/85 $44,235 $30,937 1/86 $45,046 $31,633 2/86 $48,307 $34,205 3/86 $49,783 $36,003 4/86 $50,541 $35,845 5/86 $52,554 $37,701 6/86 $51,571 $38,216 7/86 $47,374 $35,687 8/86 $49,140 $38,219 9/86 $45,601 $35,511 10/86 $48,335 $37,364 11/86 $48,946 $37,640 12/86 $48,361 $36,569 1/87 $54,951 $41,072 2/87 $59,189 $43,530 3/87 $60,968 $43,942 4/87 $60,390 $42,842 5/87 $62,092 $42,989 6/87 $64,592 $44,737 7/87 $67,740 $46,653 8/87 $70,486 $48,302 9/87 $68,483 $47,379 10/87 $49,455 $35,710 11/87 $47,006 $33,727 12/87 $53,665 $36,652 1/88 $53,930 $38,355 2/88 $58,780 $41,072 3/88 $60,415 $41,126 4/88 $61,386 $41,380 5/88 $60,234 $41,283 6/88 $64,720 $44,110 7/88 $63,335 $43,225 8/88 $61,789 $42,264 9/88 $64,192 $43,702 10/88 $63,486 $43,889 11/88 $62,127 $42,836 12/88 $64,859 $43,910 1/89 $68,192 $46,537 2/89 $67,612 $46,427 3/89 $68,994 $47,190 4/89 $73,125 $49,465 5/89 $77,254 $51,695 6/89 $74,440 $51,503 7/89 $79,915 $55,093 8/89 $83,387 $56,935 9/89 $83,428 $56,413 10/89 $79,787 $53,752 11/89 $80,873 $54,489 12/89 $82,292 $55,446 1/90 $75,120 $50,999 2/90 $77,825 $52,033 3/90 $80,029 $53,300 4/90 $78,163 $51,011 5/90 $86,194 $55,632 6/90 $87,034 $55,271 7/90 $84,425 $53,628 8/90 $75,868 $47,860 9/90 $71,033 $44,312 10/90 $69,568 $42,913 11/90 $75,112 $47,046 12/90 $78,902 $49,072 1/91 $85,003 $52,398 2/91 $92,631 $56,764 3/91 $97,028 $59,119 4/91 $96,459 $59,474 5/91 $101,948 $62,298 6/91 $96,909 $59,427 7/91 $102,335 $62,340 8/91 $105,602 $64,204 9/91 $105,329 $63,830 10/91 $108,557 $65,138 11/91 $104,724 $62,445 12/91 $116,960 $69,442 1/92 $119,326 $70,748 2/92 $120,948 $72,373 3/92 $115,847 $70,524 4/92 $113,545 $71,075 5/92 $114,312 $71,534 6/92 $108,991 $70,374 7/92 $112,618 $73,316 8/92 $110,272 $71,628 9/92 $113,146 $73,113 10/92 $117,301 $74,902 11/92 $122,190 $78,677 12/92 $125,186 $80,789 1/93 $125,594 $82,405 2/93 $121,886 $82,496 3/93 $124,822 $85,179 4/93 $121,150 $82,922 5/93 $126,171 $85,555 6/93 $126,630 $86,522 7/93 $125,543 $86,939 8/93 $131,747 $90,806 9/93 $134,398 $91,153 10/93 $135,795 $91,229 11/93 $131,931 $89,113 12/93 $138,604 $92,341 1/94 $143,687 $94,889 2/94 $142,568 $93,598 3/94 $134,622 $89,611 4/94 $135,889 $90,226 5/94 $134,603 $90,349 6/94 $130,975 $87,673 7/94 $132,730 $90,682 8/94 $141,423 $94,981 9/94 $140,120 $92,660 10/94 $142,420 $93,369 11/94 $137,052 $89,250 12/94 $139,650 $90,409 1/95 $140,145 $92,266 2/95 $146,023 $97,042 3/95 $151,805 $99,819 4/95 $152,385 $101,324 5/95 $155,053 $104,654 6/95 $162,810 $108,171 7/95 $174,821 $113,423 8/95 $177,454 $115,160 9/95 $183,158 $117,762 10/95 $179,789 $115,128 11/95 $185,416 $120,853 12/95 $187,880 $121,558 1/96 $190,835 $124,137 2/96 $200,326 $127,052 3/96 $203,882 $128,890 4/96 $212,394 $132,542 5/96 $215,917 $134,544 6/96 $206,821 $132,526 7/96 $188,917 $124,324 8/96 $198,795 $130,243 9/96 $211,760 $136,676 10/96 $211,966 $137,772 11/96 $222,461 $146,165 12/96 $223,710 $144,673 1/97 $229,653 $150,085 2/97 $218,817 $149,858 3/97 $204,835 $143,388 4/97 $209,029 $147,059 5/97 $236,993 $157,788 6/97 $243,285 $162,951 7/97 $260,762 $176,549 8/97 $257,966 $174,642 9/97 $275,443 $184,614 10/97 $259,015 $177,433 11/97 $257,966 $181,656 12/97 $262,848 $186,669 1/98 $259,895 $183,160 2/98 $287,741 $197,483 3/98 $303,773 $206,843 4/98 $309,680 $207,360 5/98 $291,960 $200,953 6/98 $302,508 $203,746 7/98 $285,210 $194,028 8/98 $224,033 $162,983 9/98 $233,315 $173,528 10/98 $256,520 $185,363 11/98 $273,396 $194,149 12/98 $302,435 $205,546 1/99 $309,133 $205,196 2/99 $293,161 $198,363 3/99 $314,801 $204,572 4/99 $331,803 $219,690 5/99 $328,711 $219,053 6/99 $352,451 $226,785 7/99 $346,744 $220,549 8/99 $341,591 $214,836 9/99 $340,561 $207,274 10/99 $372,505 $217,099 11/99 $409,601 $223,351 12/99 $484,429 $242,941 1/00 $491,863 $234,963 2/00 $642,068 $253,031 3/00 $632,219 $267,530 4/00 $566,966 $254,876 5/00 $531,261 $248,122 6/00 $613,751 $255,466 7/00 $573,120 $252,605 8/00 $680,234 $276,804 9/00 $666,690 $272,846 10/00 $599,590 $268,644 11/00 $454,310 $244,466 12/00 $499,862 $263,009
PERFORMANCE(c) December 31, 2000
CUMULATIVE SINCE SINCE MIDCAP FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION INCEPTION Class I Average Annual Total Return(d) 1.25% 23.11% 21.16% 20.05% 20.30% 4,898.62% Class N Average Annual Total Return(f)(g) 0.99% 22.81% 20.86% 19.75% 20.00% 4,644.32% Russell Midcap Growth Index Average Annual Total Return(a)(e) -11.75% 16.32% 17.77% 18.10% N/A N/A Russell Midcap Index Average Annual Total Return(b) 8.26% 12.11% 16.69% 18.28% 16.70% 2,530.09%
The data above represents past performance of the Fund and may not indicate future performance. The investment return and principal value of an investment in the Fund will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. -------------------------------- (a) The Russell Midcap Growth Index is composed of the securities in the Russell 1000 Index with highest price-to-book ratios and highest forecasted growth values. The Russell 1000 Index is made up of the 1,000 largest companies in the Russell 3000 Index, which is composed of the 3,000 largest U.S. companies based on market capitalization and represents approximately 98% of the investable U.S. equity market. The Russell Midcap Growth Index began on December 31, 1985. (b) The Russell Midcap Index is composed of the 800 smallest securities in the Russell 1000 Index. The Russell 1000 Index is made up of the 1,000 largest companies in the Russell 3000 Index, which is composed of the 3,000 largest U.S. companies based on market capitalization and represents approximately 98% of the investable U.S. equity market. (c) Returns assume reinvestment of all dividends and capital gains distributions at net asset value. (d) The Class I shares began operations on November 6, 1979. (e) Effective December 21, 1999, the Fund's performance benchmark changed from the Russell Midcap Index to the Russell Midcap Growth Index. (f) Class N shares were first issued on December 29, 2000 and pay Rule 12b-1 fees. Class N returns through December 29, 2000 are based on Class I returns, and reflect the deduction of Rule 12b-1 fees applicable to Class N shares. (g) The value of a $10,000 investment for Class N is $474,432 for the period from November 6, 1979 to December 31, 2000. The performance of the Class N shares is lower than Class I shares due to the effects of 12b-1 fees. Page 18 Dresdner RCM MidCap Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) ------------------------------------------------------------------------------------ EQUITY INVESTMENTS COMMERCIAL GOODS & SERVICES SECTOR 6.3% CAPITAL GOODS 2.0% 162,500 US General Dynamics Corp. $ 12,675,000 30,000 US L-3 Communications Holdings Inc. * 2,310,000 88,400 US Raytheon Co. (Class B) 2,745,925 ------------ 17,730,925 ------------ COMMERCIAL SERVICES & SUPPLIES 4.3% 688,700 US Calpine Corp. * 31,034,544 67,500 US Paychex Inc. 3,282,187 76,200 US TMP Worldwide Inc. * (a) 4,191,000 ------------ 38,507,731 ------------ CONSUMER DISCRETIONARY SECTOR 5.6% CONSUMER DURABLES & APPAREL 1.8% 155,100 US Electronic Arts Inc. * 6,611,137 68,700 US Harley-Davidson Inc. 2,730,825 122,700 US Nike Inc. (Class B) 6,848,194 ------------ 16,190,156 ------------ HOTELS, RESTAURANTS & LEISURE 1.6% 176,600 US Starbucks Corp. * 7,814,550 164,800 US Starwood Hotels & Resorts Worldwide Inc. (Class B) 5,809,200 ------------ 13,623,750 ------------ RETAILING 2.2% 140,000 US Abercrombie & Fitch Co. (Class A) * 2,800,000 380,400 US Bed Bath & Beyond Inc. * 8,511,450 170,700 US BJ' s Wholesale Club Inc. * 6,550,613 71,000 US TJX Cos. Inc. 1,970,250 ------------ 19,832,313 ------------ CONSUMER STAPLES SECTOR 0.6% FOOD, BEVERAGE & TOBACCO 0.3% 28,000 US The Quaker Oats Co. 2,726,500 ------------ HOUSEHOLD & PERSONAL PRODUCTS 0.3% 65,000 US Estee Lauder Cos. Inc. (Class A) (a) 2,847,813 ------------ ENERGY SECTOR 11.2% ENERGY 11.2% 311,500 US BJ Services Co. * 21,454,563 112,400 FR Coflexip S.A. (ADR) (a) 7,067,150
The accompanying notes are an integral part of the financial statements. Page 19 Dresdner RCM MidCap Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) ------------------------------------------------------------------------------------ EQUITY INVESTMENTS (CONTINUED) ENERGY (CONTINUED) 181,700 US Noble Drilling Corp. * $ 7,892,594 345,400 US Smith International Inc. * 25,753,887 209,700 US Transocean Sedco Forex Inc. (a) 9,646,200 586,400 US Weatherford International Inc. 27,707,400 ------------ 99,521,794 ------------ FINANCIAL SECTOR 8.6% DIVERSIFIED FINANCIALS 4.5% 284,200 US BISYS Group Inc. * 14,813,925 170,400 US Capital One Financial Corp. 11,214,450 168,500 US Federated Investors Inc. (Class B) 4,907,562 56,600 US Fiserv Inc. * 2,684,963 114,500 US Providian Financial Corp. 6,583,750 ------------ 40,204,650 ------------ INSURANCE 4.1% 443,200 BH ACE Ltd. 18,808,300 71,300 BH Everest Re Group Ltd. 5,106,862 144,800 BH XL Capital Ltd. (Class A) 12,651,900 ------------ 36,567,062 ------------ HEALTH CARE SECTOR 23.0% HEALTH CARE EQUIPMENT & SUPPLIES 8.9% 144,900 US Applera Corp. - Applied Biosystems Group * 13,629,656 273,400 US Cytyc Corp. * 17,104,588 55,100 US St. Jude Medical Inc. * 3,385,206 181,800 US Stryker Corp. 9,197,262 433,500 US Waters Corp. * 36,197,250 ------------ 79,513,962 ------------ HEALTH CARE PROVIDERS & SERVICES 2.6% 50,500 US Health Management Associates Inc. (Class A) * 1,047,875 453,200 US IMS Health Inc. 12,236,400 87,900 US Wellpoint Health Networks Inc. * 10,130,475 ------------ 23,414,750 ------------ PHARMACEUTICALS & BIOTECHNOLOGY 11.5% 55,700 US Abgenix Inc. * 3,289,781 25,600 US Alkermes Inc. * (a) 803,200 71,000 US Allergan Inc. 6,873,687 284,300 US ALZA Corp. * 12,082,750 141,400 US Andrx Group * 8,183,525 75,000 US Biogen Inc. * 4,504,688
The accompanying notes are an integral part of the financial statements. Page 20 Dresdner RCM MidCap Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) ------------------------------------------------------------------------------------ EQUITY INVESTMENTS (CONTINUED) PHARMACEUTICALS & BIOTECHNOLOGY (CONTINUED) 69,100 US Cephalon Inc. * $ 4,374,894 129,200 US Human Genome Sciences Inc. * 8,955,175 96,400 US ICOS Corp. * 5,006,775 46,000 US IDEC Pharmaceuticals Corp. * 8,719,875 65,000 US King Pharmaceuticals Inc. * 3,359,688 135,900 US Medarex Inc. * 5,537,925 360,700 US MedImmune Inc. * 17,200,881 177,500 US Millennium Pharmaceuticals Inc. * (a) 10,982,812 28,100 US Protein Design Labs Inc. * (a) 2,441,188 ------------ 102,316,844 ------------ MATERIALS SECTOR 0.6% MATERIALS 0.6% 208,600 US Monsanto Co. * 5,645,237 ------------ TECHNOLOGY SECTOR 33.3% COMMUNICATIONS EQUIPMENT 7.7% 180,400 US Brocade Communications Systems Inc. * (a) 16,562,975 175,500 US Comverse Technology Inc. * 19,063,770 148,600 US Emulex Corp. * 11,878,713 58,200 US Extreme Networks Inc. * 2,277,075 479,000 US Palm Inc. * 13,561,687 40,100 US Redback Networks Inc. * (a) 1,644,100 14,700 US SDL Inc. * 2,178,356 22,500 US Sycamore Networks Inc. * (a) 838,125 ------------ 68,004,801 ------------ COMPUTERS & PERIPHERALS 2.8% 327,000 SG Flextronics International Ltd. * (a) 9,319,500 340,100 US Jabil Circuit Inc. * (a) 8,630,037 68,800 US Lexmark International Inc. (Class A) * 3,048,700 54,100 US Sanmina Corp. * 4,145,413 ------------ 25,143,650 ------------ INFORMATION TECHNOLOGY CONSULTING & SERVICES 0.5% 102,900 US Concord EFS Inc. * 4,521,169 ------------ SEMICONDUCTORS & INSTRUMENTS 8.1% 267,122 US Applied Micro Circuits Corp. * 20,046,877 107,800 US Integrated Device Technology Inc. * 3,570,875 141,000 US KLA-Tencor Corp. * 4,749,937 93,000 US Maxim Integrated Products Inc. * 4,446,562
The accompanying notes are an integral part of the financial statements. Page 21 Dresdner RCM MidCap Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) ------------------------------------------------------------------------------------ EQUITY INVESTMENTS (CONTINUED) SEMICONDUCTORS & INSTRUMENTS (CONTINUED) 216,900 US Micrel Inc. * $ 7,306,819 256,625 US Microchip Technology Inc. * 5,629,711 69,400 US Micron Technology Inc. * 2,463,700 159,600 US MIPS Technologies Inc. (Class A) * (a) 4,259,325 26,700 CA PMC-Sierra Inc. * 2,099,288 101,500 US QLogic Corp. * 7,815,500 101,500 US Sawtek Inc. * 4,688,031 53,600 US Semtech Corp. * 1,182,550 7,200 US Transmeta Corp. * 169,200 79,100 US Xilinx Inc. * 3,648,488 ------------ 72,076,863 ------------ SOFTWARE 14.2% 236,300 US Agile Software Corp. * (a) 11,667,312 248,550 UK Amdocs Ltd. * 16,466,437 21,800 US Ariba Inc. * 1,169,025 46,800 US Art Technology Group Inc. * 1,430,325 169,100 US BEA Systems Inc. * 11,382,544 178,800 IS Check Point Software Technologies Ltd. * 23,880,975 99,800 US Commerce One Inc. * (a) 2,526,188 232,600 US Critical Path Inc. * 7,152,450 103,600 US I2 Technologies Inc. * 5,633,250 91,000 US Interwoven Inc. * (a) 6,000,312 128,400 US Mercury Interactive Corp. * 11,588,100 150,600 US Micromuse Inc. * 9,090,122 494,500 US PeopleSoft Inc. * 18,389,219 ------------ 126,376,259 ------------ TELECOMMUNICATION SERVICES SECTOR 6.0% TELECOMMUNICATION SERVICES 6.0% 214,400 US American Tower Corp. (Class A) * 8,120,400 1,154,800 US McLeodUSA Inc. (Class A) * 16,311,550 738,200 US Nextel Partners Inc. (Class A) * 12,410,987 262,200 US Western Wireless Corp. (Class A) * 10,274,962 124,600 US WinStar Communications Inc. * 1,456,263 275,000 US XO Communications Inc. (Class A) * (a) 4,898,438 ------------ 53,472,600 ------------ TOTAL EQUITY INVESTMENTS (COST $839,752,559) 95.2% 848,238,829 ------------
The accompanying notes are an integral part of the financial statements. Page 22 Dresdner RCM MidCap Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) ------------------------------------------------------------------------------------ SHORT-TERM INVESTMENTS MONEY MARKET FUNDS 3.4% 14,443,392 US SSgA Money Market Fund $ 14,443,392 15,420,385 US SSgA U.S. Government Money Market Fund 15,420,385 ------------ TOTAL SHORT-TERM INVESTMENTS (COST $29,863,777) 3.4% 29,863,777 ------------ TOTAL INVESTMENTS (COST $869,616,336)** 98.6% 878,102,606 OTHER ASSETS LESS LIABILITIES 1.4% 12,830,568 ------------ NET ASSETS 100.0% $890,933,174 ============
-------------------------------- * Non-income producing security ADR American Depositary Receipt (a) All or a portion of this security is out on loan. The market value of the securities out on loan at December 31, 2000 was 12,957,355. Tax Information: ** For Federal income tax purposes, cost is $888,734,214 and gross aggregate unrealized appreciation (depreciation) for all securities is as follows: Unrealized appreciation $93,188,176 Unrealized depreciation (103,819,783) ----------- Net unrealized depreciation $(10,631,607) ===========
-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- The Fund's investments in securities at December 31, 2000 categorized by country (unaudited):
% OF NET ASSETS ------------------------------ COUNTRY SHORT-TERM COUNTRY CODE EQUITIES AND OTHER TOTAL ----------------------------------------------------------------------- Bermuda BH 4.1% 4.1% Canada CA 0.2% 0.2% France FR 0.8% 0.8% Israel IS 2.7% 2.7% Singapore SG 1.0% 1.0% United Kingdom UK 1.9% 1.9% United States US 84.5% 4.8% 89.3% ------ ------- ----- Total 95.2% 4.8% 100.0% ====== ======= =====
The accompanying notes are an integral part of the financial statements. Page 23 Dresdner RCM Small Cap Fund Management's Performance Review Industry strategy, hurt most by telecommunication services and commercial services, caused the Dresdner RCM Small Cap Fund to underperform its primary index for the year. As of December 31, 2000, the Fund ended the year down 17.87% versus the Russell 2000 Index benchmark that lost 3.03% for the period. For the fourth quarter, the Fund fell 23.27% versus the Russell 2000 Index benchmark that lost 6.91%. On December 18, 2000, shareholders of the Fund approved its reorganization from a series of Dresdner RCM Capital Funds, Inc. to a newly created series of Dresdner RCM Global Funds, Inc. Effective December 29, 2000 all Fund shares were redesignated as Class I shares and new Class N shares were created. The Fund's Class N shares are not currently offered for sale. MARKET REVIEW During most of 1999 and into 2000, the equity markets rewarded momentum strategies. However, as the year progressed and the economic landscape changed, the slowdown affected companies both large and small. Real growth, as represented by the U.S. Gross Domestic Product, went from a torrid 5.4% in the first quarter and 5.6% in the second quarter, to 2.2% by the third quarter, with current data indicating further decline. As a result of the economic deceleration and in the hope of bringing the economy to a "soft landing," the Federal Reserve changed its stance in December from favoring tightening monetary policy to a bias towards easing. The uncertainties surrounding the economy as a whole led investors to seek the relative safety of stocks whose price-to-earnings multiples were less dependent upon high growth assumptions. As a result, value stocks in virtually every market cap posted first in 2000, ahead of growth stocks, which has not occurred since 1997. The value subset of the Russell 2000 Index beat its growth counterpart by just over 45% in 2000, with most of the gain in the fourth quarter. Technology stocks caught the brunt of the economic reversal. Throughout the year, the technology sector was extremely volatile, with investors moving from New to Old Economy stocks. By the end of March, the tech-heavy Nasdaq had experienced four corrections of 10% or more. In the following two months, that index dropped precipitously -- nearly 40% -- though it rebounded in June. The weakness in technology continued through the second half of 2000 with stocks in that sector continuing to feel the effects of higher interest rates and a slowing economy. By the fourth quarter, not only technology, but also companies across a broad spectrum of industries continued to announce less-than-expected revenues and earnings growth. Companies lowered forecasts for the quarter and for 2001, causing stock prices to weaken. With extended valuations and lowered expectations, technology stocks suffered one of the worst years in their history. In the fourth quarter, the Nasdaq fell 32.73%, closing the year down 39.29%. FACTORS AFFECTING PERFORMANCE The Russell 2000 Index posted only four positive months in 2000: February, June, August, and December. The Small Cap Fund outperformed in each of these months by an average of around 970 basis points. The majority of the fourth quarter and full year under-performance occurred during the two difficult months of October and November. The Fund's year-to-date lead over the Index as of September 30th was eroded during this correction, which coincided with the broader equity market upheaval. In the midst of the change in equity market sentiment, Dresdner RCM Global Investors LLC ("Dresdner RCM"), the investment manager of the Fund, noted that during volatile trading periods, many profitable companies with strong balance sheets, access to capital, and sound growth prospects sold off nearly as heavily as less sound companies. A flight to larger, more liquid names left small cap valuations very attractive, allowing the Fund's portfolio managers to evaluate a wider range of companies and upgrade portfolio holdings into higher quality names. These included some companies that were previously mid cap stocks. Seizing these opportunities, the Fund created positions in the highest quality growth companies in each industry in the Fund's investment universe. The strategy to overweight energy that began in the fall of 1999 worked throughout 2000. With crude oil and natural gas prices near historic highs, and OPEC determined to keep supply in check, the Fund overweighted the energy sector, specifically those oil services companies that Dresdner RCM felt would be increasing their exploration and production spending. This Page 24 Dresdner RCM Small Cap Fund Management's Performance Review strategy was particularly rewarded late in the fourth quarter via holdings in Patterson Energy, Grant Prideco, National Oilwell, and Superior Energy Services. A second emerging trend that Dresdner RCM identified was biotech/medical devices. The Fund was underweight at the beginning of the year, but moved to an overweight position as that sector dove into a trough during the second quarter. This tactic worked well; companies that added to performance during the year included Cell Genesys, and Inhale Therapeutics. In the first quarter, Dresdner RCM pursued the technology investment theme through positions in semiconductor, telecommunications and software stocks. This strategy drove performance during the period. Technology continued as an investment theme through the second quarter, despite the volatility in the sector. Even during the negative market environment, the fundamentals for certain stocks in the technology sector presented a strong backdrop and worked well, specifically software companies that build the Internet infrastructure and telecommunications equipment firms. During the second quarter, holding positions in software companies such as Actuate, WatchGuard Technologies, and Critical Path added to performance as did Centillium and Audiocodes in the telecommunications sector. Volatility continued unabated in the third quarter, and technology across the spectrum of market capitalizations was driven down because of well-publicized earnings shortfalls. The Fund's holdings, specifically software and computer peripherals, negatively impacted the Fund's performance in the third quarter. The overweight in healthcare, the best performing sector that quarter, along with biotechnology, positively impacted returns. Superior stock selection, including companies such as Charles River Labs International and Agile Software added to performance. By the fourth quarter, the market's aversion to semiconductors, software and communications equipment punished many of the Fund's holdings in these industries, as small cap technology issues were sold more heavily than their large cap counterparts. In addition, a slight overweight in telecommunications services hurt performance. OUTLOOK From 1994 to 1998, large cap stocks outperformed small caps, but beginning in 1999, the reverse was true. There are numerous factors that could have an impact on whether this cycle will continue. As the economy slows, it is likely that investors will continue to be concerned about the potential of a hard economic landing and the associated impact on corporate profits. This may add to the already-high level of volatility of share prices. Returns could suffer if the U.S. economy does experience a full-blown recession. Given the debate among economists and the range of possible outcomes, Dresdner RCM is less concerned with predicting the exact economic scenario than with being prepared to navigate through changing environments, and taking advantage of dynamic market conditions. In January of 2001, the Federal Reserve surprised the markets with a 50 basis point cut in its key Fed Funds rate, down to 6%. With this aggressive move, the Fed has shown that it is willing to do what it perceives is necessary to avoid a recession. The impact of the Fed's monetary stimulus to prevent the U.S. economy from slowing too rapidly could bode well for the small cap market segment. It appears that the economy is at the beginning of a meaningful easing cycle, and while the past is never a sure guide to the future, history suggests that small cap stocks tend to do well over the course of an easing cycle. Going forward, the Fund will likely continue to be overweight in energy and some areas of technology, overweight slightly in healthcare and underweight in those areas that may be vulnerable to a slowing economy, including consumer discretionary and consumer staples. Financial services stocks, particularly those that we perceive to be susceptible to credit quality problems, will likely also be underweighted. Given the apparent strong fundamentals, appealing valuations and reasonable prospects for a return to more stable economic conditions in 2001, small cap stocks continue to play a constructive role in a well-diversified equity portfolio. Page 25 Dresdner RCM Small Cap Fund Total Return Index Comparison(b) EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC $10,000 Investment (1/3/92 - 12/31/00)(c)
CLASS I SHARES RUSSELL 2000 INDEX (A) 1/92 $10,000 $10,000 1/92 $10,786 $10,811 2/92 $11,118 $11,127 3/92 $10,850 $10,751 4/92 $10,613 $10,373 5/92 $10,703 $10,511 6/92 $10,165 $10,017 7/92 $10,530 $10,366 8/92 $10,336 $10,072 9/92 $10,603 $10,304 10/92 $11,002 $10,630 11/92 $11,807 $11,444 12/92 $12,214 $11,842 1/93 $12,212 $12,242 2/93 $11,792 $11,960 3/93 $12,082 $12,348 4/93 $11,636 $12,008 5/93 $12,102 $12,539 6/93 $12,134 $12,617 7/93 $12,126 $12,791 8/93 $12,580 $13,344 9/93 $13,037 $13,720 10/93 $13,186 $14,074 11/93 $12,728 $13,615 12/93 $13,337 $14,080 1/94 $13,592 $14,522 2/94 $13,431 $14,469 3/94 $12,712 $13,707 4/94 $12,637 $13,788 5/94 $12,411 $13,633 6/94 $11,990 $13,173 7/94 $12,173 $13,390 8/94 $13,095 $14,136 9/94 $13,073 $14,088 10/94 $13,240 $14,031 11/94 $12,765 $13,464 12/94 $13,049 $13,824 1/95 $12,958 $13,649 2/95 $13,392 $14,217 3/95 $13,900 $14,461 4/95 $14,064 $14,782 5/95 $14,030 $15,037 6/95 $14,728 $15,817 7/95 $15,706 $16,728 8/95 $16,245 $17,074 9/95 $16,900 $17,380 10/95 $16,330 $16,602 11/95 $16,882 $17,300 12/95 $17,496 $17,756 1/96 $17,973 $17,737 2/96 $18,914 $18,290 3/96 $19,374 $18,662 4/96 $20,684 $19,660 5/96 $21,660 $20,435 6/96 $20,993 $19,596 7/96 $18,958 $17,884 8/96 $20,592 $18,923 9/96 $22,457 $19,662 10/96 $22,226 $19,359 11/96 $22,488 $20,157 12/96 $23,514 $20,685 1/97 $23,754 $21,098 2/97 $22,335 $20,587 3/97 $20,877 $19,615 4/97 $20,357 $19,670 5/97 $23,953 $21,858 6/97 $25,312 $22,795 7/97 $26,750 $23,856 8/97 $27,350 $24,403 9/97 $29,867 $26,189 10/97 $28,508 $25,039 11/97 $28,329 $24,877 12/97 $28,098 $25,312 1/98 $27,929 $24,912 2/98 $30,435 $26,753 3/98 $31,520 $27,855 4/98 $31,496 $28,009 5/98 $29,688 $26,499 6/98 $30,700 $26,555 7/98 $28,339 $24,404 8/98 $20,989 $19,664 9/98 $22,531 $21,204 10/98 $24,290 $22,069 11/98 $26,483 $23,226 12/98 $28,411 $24,663 1/99 $27,925 $24,991 2/99 $24,283 $22,967 3/99 $24,010 $23,325 4/99 $24,738 $25,415 5/99 $25,861 $25,786 6/99 $27,197 $26,952 7/99 $27,318 $26,214 8/99 $25,770 $25,244 9/99 $25,133 $25,249 10/99 $24,010 $25,352 11/99 $28,229 $26,866 12/99 $31,934 $29,912 1/00 $31,372 $29,425 2/00 $38,208 $34,284 3/00 $37,116 $32,024 4/00 $31,185 $30,096 5/00 $26,846 $28,342 6/00 $35,992 $30,813 7/00 $31,965 $29,821 8/00 $36,117 $32,096 9/00 $34,181 $31,153 10/00 $29,280 $29,763 11/00 $23,568 $26,707 12/00 $26,228 $29,006
PERFORMANCE(b) December 31, 2000
CUMULATIVE SINCE SINCE SMALL CAP FUND 1 YEAR 3 YEARS 5 YEARS INCEPTION INCEPTION Class I Average Annual Total Return(c) -17.87% -2.27% 8.43% 11.31% 162.28% Russell 2000 Index Average Annual Total Return(a) -3.03% 4.65% 10.31% 12.56% 190.06%
The data above represents past performance of the Fund and may not indicate future performance. The investment return and principal value of an investment in the Fund will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. -------------------------------- (a) The Russell 2000 Index is composed of the 2,000 smallest securities in the Russell 3000 Index, which is composed of the 3,000 largest U.S. companies based on market capitalization and represents approximately 98% of the investable U.S. equity market. (b) Returns assume reinvestment of all dividends and capital gains distributions at net asset value. (c) Class I shares began operations on January 3, 1992. Page 26 Dresdner RCM Small Cap Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) --------------------------------------------------------------------------------- EQUITY INVESTMENTS COMMERCIAL GOODS & SERVICES SECTOR 5.8% COMMERCIAL SERVICES & SUPPLIES 4.3% 174,500 US Insight Enterprises Inc. * $ 3,130,094 112,636 US kforce.com Inc. * 344,948 59,800 US Modis Professional Services Inc. * 246,675 170,700 US Personnel Group of America Inc. * 288,056 6,500 US Resources Connection Inc. * (a) 123,500 13,300 US School Specialty Inc. * 266,831 54,100 US Waste Connections Inc. * 1,788,681 63,500 US Watson Wyatt & Co. Holdings * 1,492,250 ------------ 7,681,035 ------------ TRANSPORTATION 1.5% 108,300 US EGL Inc. * 2,592,431 ------------ CONSUMER DISCRETIONARY SECTOR 5.8% CONSUMER DURABLES & APPAREL 2.4% 145,900 US THQ Inc. * 3,556,312 42,500 US Vans Inc. * 719,844 ------------ 4,276,156 ------------ MEDIA 0.7% 10,900 US DeVry Inc. * 411,475 140,800 US Wink Communications Inc. * 844,800 ------------ 1,256,275 ------------ RETAILING 2.7% 101,100 US Abercrombie & Fitch Co. (Class A) * 2,022,000 231,100 CA InterTAN Inc. * 2,686,538 ------------ 4,708,538 ------------ CONSUMER STAPLES SECTOR 0.6% FOOD, BEVERAGE & TOBACCO 0.6% 30,200 US Hain Celestial Group Inc. * 981,500 ------------ ENERGY SECTOR 20.0% ENERGY 20.0% 174,100 US Cal Dive International Inc. * 4,635,412 188,600 NL Core Laboratories N.V. * 5,151,137 195,800 US Grant Prideco Inc. * 4,295,363 206,000 US National-Oilwell Inc. * 7,969,625 157,000 US Patterson Energy Inc. * 5,848,250
The accompanying notes are an integral part of the financial statements. Page 27 Dresdner RCM Small Cap Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) --------------------------------------------------------------------------------- EQUITY INVESTMENTS (CONTINUED) ENERGY (CONTINUED) 407,600 US Superior Energy Services Inc. * $ 4,687,400 86,600 US Veritas DGC Inc. * 2,797,180 ------------ 35,384,367 ------------ FINANCIAL SECTOR 10.8% BANKS 0.6% 31,300 US Silicon Valley Bancshares * 1,081,806 ------------ DIVERSIFIED FINANCIALS 7.8% 118,000 US Boston Private Financial Holdings Inc. 2,345,250 57,100 US Choicepoint Inc. * 3,743,619 150,700 US IndyMac Bancorp Inc. 4,445,650 79,800 US Investment Technology Group Inc. * 3,331,650 ------------ 13,866,169 ------------ INSURANCE 2.4% 9,800 US Arthur J. Gallagher & Co. 623,525 15,300 BH Everest Re Group Ltd. 1,095,863 66,900 BH Mutual Risk Management Ltd. 1,016,044 19,000 BH RenaissanceRe Holdings Ltd. 1,487,937 ------------ 4,223,369 ------------ HEALTH CARE SECTOR 17.0% HEALTH CARE EQUIPMENT & SUPPLIES 6.4% 52,200 US Charles River Laboratories International Inc. * 1,428,975 55,200 US Cytyc Corp. * 3,453,450 38,200 US Inhale Therapeutic Systems Inc. * (a) 1,929,100 51,100 US Invitrogen Corp. * 4,413,762 ------------ 11,225,287 ------------ HEALTH CARE PROVIDERS & SERVICES 1.0% 36,700 US First Health Group Corp. * 1,708,844 25,200 US Per-Se Technologies Inc. * 87,806 ------------ 1,796,650 ------------ PHARMACEUTICALS & BIOTECHNOLOGY 9.6% 49,100 US 3 Dimensional Pharmaceuticals Inc. * (a) 727,294 51,100 US Applied Molecular Evolution * (a) 871,894 156,700 US AVANT Immunotherapeutics Inc. * 1,077,313 137,700 US Cell Genesys Inc. * 3,141,281 13,800 US Cell Therapeutics Inc. * 621,862 21,000 US Cephalon Inc. * 1,329,562 40,500 US CuraGen Corp. * 1,106,156
The accompanying notes are an integral part of the financial statements. Page 28 Dresdner RCM Small Cap Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) --------------------------------------------------------------------------------- EQUITY INVESTMENTS (CONTINUED) PHARMACEUTICALS & BIOTECHNOLOGY (CONTINUED) 131,300 US Deltagen Inc. * $ 1,370,443 35,150 US ICOS Corp. * 1,825,604 47,900 US ImmunoGen Inc. * 1,026,857 20,300 US Immunomedics Inc. * 436,450 58,600 US Medarex Inc. * 2,387,950 27,800 US NeoPharm Inc. * 1,052,925 ------------ 16,975,591 ------------ MATERIALS SECTOR 1.1% MATERIALS 1.1% 200,000 US NS Group Inc. * 1,890,000 ------------ TECHNOLOGY SECTOR 32.0% COMMUNICATIONS EQUIPMENT 3.8% 92,100 US Ditech Communications Corp. * (a) 1,479,356 96,000 IS Floware Wireless Systems Ltd. * 1,134,000 102,300 US Netro Corp. * 709,706 108,200 US WatchGuard Technologies Inc. * 3,421,825 ------------ 6,744,887 ------------ COMPUTERS & PERIPHERALS 2.3% 69,400 US Benchmark Electronics Inc. * 1,565,837 24,600 US DDi Corp. * (a) 670,350 224,300 US Manufacturers' Services Ltd. * 1,485,988 51,400 US Pemstar Inc. * (a) 452,963 ------------ 4,175,138 ------------ INTERNET SOFTWARE & SERVICES 0.2% 58,600 US Virage Inc. * 314,975 ------------ INFORMATION TECHNOLOGY CONSULTING & SERVICES 0.6% 26,800 US InterCept Group Inc. * 715,225 99,000 US Mainspring Inc. * 309,375 ------------ 1,024,600 ------------ SEMICONDUCTORS & INSTRUMENTS 10.3% 13,200 US Advanced Energy Industries Inc. * 297,000 157,800 US Centillium Communications Inc. * (a) 3,511,050 138,800 US Cirrus Logic Inc. * 2,602,500 97,000 US Integrated Circuit Systems Inc. * (a) 1,606,562 74,800 US Microchip Technology Inc. * 1,640,925 80,300 US MIPS Technologies Inc. (Class A) * (a) 2,143,006
The accompanying notes are an integral part of the financial statements. Page 29 Dresdner RCM Small Cap Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) --------------------------------------------------------------------------------- EQUITY INVESTMENTS (CONTINUED) SEMICONDUCTORS & INSTRUMENTS (CONTINUED) 35,500 US MIPS Technologies Inc. (Class B) * $ 904,696 92,900 US Pixelworks Inc. * (a) 2,078,637 34,300 US Sawtek Inc. * 1,584,231 24,500 US Silicon Laboratories Inc. * (a) 352,188 145,300 US Virata Corp. * (a) 1,580,138 ------------ 18,300,933 ------------ SOFTWARE 14.8% 190,100 US Actuate Corp. * 3,635,662 36,200 US Agile Software Corp. * 1,787,375 242,000 US Allaire Corp. * (a) 1,217,563 50,600 US Art Technology Group Inc. * 1,546,462 158,500 US AvantGo Inc. * (a) 990,625 95,200 US BindView Development Corp. * 895,475 61,400 US Blue Martini Software Inc. * (a) 813,550 130,500 US Critical Path Inc. * 4,012,875 54,600 US Documentum Inc. * 2,712,937 45,400 US Evolve Software Inc. * (a) 221,325 67,400 US FileNET Corp. * 1,836,650 49,900 US Metasolv Software Inc. * 455,338 8,800 US Micromuse Inc. * 531,163 20,300 US NetIQ Corp. * 1,773,712 86,200 US ONYX Software Corp. * 948,200 46,100 IS Precise Software Solutions Ltd. * 1,140,975 100,100 US Vastera Inc. * 1,601,600 ------------ 26,121,487 ------------ TELECOMMUNICATION SERVICES SECTOR 3.7% TELECOMMUNICATION SERVICES 3.7% 54,600 US AirGate PCS Inc. * 1,938,300 25,500 US Metro One Telecommunications Inc. * 637,500 71,300 US Net2000 Communications Inc. * 122,547 61,300 US Network Plus Corp. * (a) 153,250 19,100 US Nextel Partners Inc. (Class A) * 321,119 57,500 US Universal Access Inc. * (a) 460,000 46,900 US Western Wireless Corp. (Class A) * 1,837,893 94,900 US WinStar Communications Inc. * 1,109,144 ------------ 6,579,753 ------------ UTILITIES SECTOR 0.7% UTILITIES 0.7% 52,700 US Orion Power Holdings Inc. * 1,297,738 ------------ TOTAL EQUITY INVESTMENTS (COST $191,474,372) 97.5% 172,498,685 ------------
The accompanying notes are an integral part of the financial statements. Page 30 Dresdner RCM Small Cap Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) --------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS MONEY MARKET FUNDS 2.2% 1,873,970 US SSgA Money Market Fund $ 1,873,970 1,890,538 US SSgA U.S. Government Money Market Fund 1,890,538 ------------ TOTAL SHORT-TERM INVESTMENTS (COST $3,764,508) 2.2% 3,764,508 ------------ TOTAL INVESTMENTS (COST $195,238,880)** 99.7% 176,263,193 OTHER ASSETS LESS LIABILITIES 0.3% 616,009 ------------ NET ASSETS 100.0% $176,879,202 ============
-------------------------------- * Non-income producing security ADR American Depositary Receipt (a) All or a portion of this security is out on loan. The market value of the securities out on loan at December 31, 2000 was $74,465,091. Tax Information: ** For Federal income tax purposes, cost is $197,146,883 and gross aggregate unrealized appreciation (depreciation) for all securities is as follows: Unrealized appreciation $19,138,030 Unrealized depreciation (40,021,720) ----------- Net unrealized depreciation $(20,883,690) ===========
-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- The Fund's investments in securities at December 31, 2000 categorized by country (unaudited):
% OF NET ASSETS ------------------------------- COUNTRY SHORT-TERM COUNTRY CODE EQUITIES AND OTHER TOTAL ------------------------------------------------------------------------ Bermuda BH 2.1% 2.1% Canada CA 1.5% 1.5% Israel IS 1.3% 1.3% Netherlands NL 2.9% 2.9% United States US 89.7% 2.5% 92.2% ------ ------ ----- Total 97.5% 2.5% 100.0% ====== ====== =====
The accompanying notes are an integral part of the financial statements. Page 31 Dresdner RCM Biotechnology Fund Management's Performance Review The Dresdner RCM Biotechnology Fund significantly outperformed its benchmarks in 2000, a year in which biotechnology was one of the strongest sectors in the market. For the 12 months ended December 31, 2000, the Fund achieved a total return of 81.93%, compared to the AMEX Biotechnology Index which returned 62.05%; the Nasdaq Biotechnology Index which returned 23.00% and the Russell 2000 Index which returned -3.03%. Profit taking and a lack of major industry news led to a pullback in biotechnology in the final quarter of 2000. For the fourth quarter of 2000, the Fund returned -17.30%, compared to -17.59% for the AMEX Biotechnology Index; -17.54% for the Nasdaq Biotechnology Index; and -6.91% for the Russell 2000 Index. MARKET REVIEW Although biotechnology stocks enjoyed a strong year overall, they were somewhat inconsistent performers from one quarter to the next. During the first and third quarters, the news was dominated by the mapping of the human genome, which benefited virtually all biotechnology companies. By the fourth quarter, the news flow was very company-specific, and it was overshadowed by investor concerns over the stock market in general and technology in particular. A good portion of the larger biotech companies with established products and earnings tended to outperform in the fourth quarter while smaller companies with business models not fully understood by investors tended to sell off. Investors were also concerned about the expiration of IPO lock-ups, the period in which insiders must hold shares. The large number of IPOs in early 2000, coupled with the potential supply glut, put downward pressure on the group in the fourth quarter. To some extent, a de-coupling between biotechnology and general technology took place in 2000, particularly in the second half of the year. For example, in the fourth quarter, the Nasdaq Composite Index was down about 33% while the biotechnology indexes were down about 17%. In addition, the biotechnology sector significantly outperformed the overall Nasdaq Composite Index in the third quarter. FACTORS AFFECTING PERFORMANCE Generally, the Fund strives to purchase smaller cutting-edge biotechnology stocks when the market appears ready to rally. Dresdner RCM Global Investors LLC ("Dresdner RCM"), the investment manager of the Fund, will just as quickly sell these stocks when it appears that investors are about to take profits, moving into more conservative and established companies such as Amgen and Genentech. In times of market uncertainty when the more speculative stocks are hit hard, these old-line companies tend to act as safe havens for biotechnology investors. Over the past year, the Fund also emphasized suppliers that tend to depend less on scientific discovery and more on the level of research funding. An example is Waters Corp., a company that supplies the biotechnology industry with analytical instruments. At the beginning of 2000, the company was generating 20-25% growth in earnings; meanwhile, the stock was selling at a "PEG" ratio of 1, meaning that its price-earnings multiple equaled its growth rate. Although the Fund took some profits mid-way through the year due to concerns about the impact of a weak Euro, Dresdner RCM believes that the company's analytical instrument products have clear advantages in the marketplace. Some of the most exciting stocks producing some of the greatest returns in 2000 were also some of the most speculative and volatile. Examples in the Fund include Protein Design Labs, which has licensed rights to its human antibody product -- Zenapax to Hoffman-La Roche. Zenapax aids in the prevention of kidney transplant rejection. The company also has eight other human antibody products in development for autoimmune and inflammatory conditions, transplantation and cancer. Similarly, Cell Therapeutics, which announced in September 2000, that the FDA had accepted its new drug application for TRISENOX-TM- (Arsenic TriOxide), performed extremely well during 2000. TRISENOX-TM-, which treats a form of acute leukemia, is one of many novel cancer drugs that the company has under development. Page 32 Dresdner RCM Biotechnology Fund Management's Performance Review Another company with volatile but exceptional returns in 2000 was IDEC Pharmaceuticals, which develops drugs for cancer, autoimmune and inflammatory diseases. IDEC saw revenues increase beyond expectations because more and more oncologists are using its anti-cancer antibody to treat their patients. One of the Fund's strongest performers in 2000 was OSI Pharmaceuticals. This company, which collaborates with many large-cap drug companies, caught investors' attention when it received a special windfall. The company essentially received all development and marketing rights to one of its important anti-cancer products developed in an alliance with Pfizer after the latter's acquisition of Warner-Lambert. The one major problem area for the Fund was its brief foray into the e-health area, in such companies as MedicaLogic, SciQuest.com and Ventro. These stocks did well early in the year and then essentially collapsed along with the rest of the dotcoms. During the year, Dresdner RCM's Grassroots-SM- Research effort helped the Fund avoid investing in companies with questionable business models. For example, Grassroots-SM- reaffirmed Dresdner RCM's belief that Wall Street was overestimating the demand for a drug that treats age-related blindness. The Fund avoided losses by not purchasing that company's stock, which declined over 60% during the fourth quarter alone. The Fund also continued to benefit from the exceptional qualifications of its portfolio management team, who all hold medical degrees, a rarity in the investment management field. This often gives the portfolio managers the "upper-hand" when identifying promising companies ahead of the rest of Wall Street. OUTLOOK Dresdner RCM believes that the outlook for the biotechnology sector is strong. Many new product approvals are expected in 2001, suggesting that the business models for most biotechnology companies remain intact. In addition, biotechnology is not generally subject to macroeconomic influences such as a slowing U.S. economy. Nor should the sector be compared to Internet stocks because most biotechnology companies have met the challenge of developing new products in well-defined markets. Still, by its nature, biotechnology remains a volatile area and is only appropriate for long-term investors. Page 33 Dresdner RCM Biotechnology Fund Total Return Index Comparison(d) EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC $10,000 Investment (12/30/97 - 12/31/00)(e)
NASDAQ BIOTECH RUSSELL 2000 AMEX BIOTECH CLASS N SHARES INDEX (A) INDEX (B) INDEX (C) 12/97 $10,000 $10,175 $10,071 $10,042 1/98 $10,260 $10,140 $9,912 $9,734 2/98 $10,490 $10,572 $10,644 $9,936 3/98 $10,590 $11,363 $11,083 $10,793 4/98 $10,470 $11,107 $11,144 $10,830 5/98 $10,350 $10,719 $10,543 $9,971 6/98 $10,030 $10,649 $10,565 $9,079 7/98 $10,110 $10,971 $9,710 $8,531 8/98 $7,930 $8,560 $7,824 $6,462 9/98 $9,110 $10,692 $8,437 $8,618 10/98 $9,880 $11,585 $8,781 $10,146 11/98 $10,560 $11,987 $9,241 $10,116 12/98 $11,776 $14,681 $9,813 $11,446 1/99 $12,383 $16,183 $9,943 $12,147 2/99 $11,776 $15,235 $9,138 $10,931 3/99 $11,518 $16,728 $9,281 $11,558 4/99 $11,261 $15,261 $10,112 $11,817 5/99 $11,436 $16,436 $10,260 $12,434 6/99 $12,795 $17,029 $10,724 $13,252 7/99 $13,289 $19,230 $10,430 $15,487 8/99 $15,049 $21,097 $10,044 $16,619 9/99 $15,049 $19,789 $10,046 $15,626 10/99 $15,605 $20,125 $10,087 $16,245 11/99 $17,416 $22,730 $10,689 $17,812 12/99 $24,893 $29,607 $11,899 $24,202 1/00 $30,090 $34,108 $11,708 $26,796 2/00 $50,656 $49,572 $13,641 $43,370 3/00 $33,957 $36,807 $12,742 $30,910 4/00 $32,527 $31,989 $11,975 $30,131 5/00 $30,401 $31,097 $11,276 $28,995 6/00 $43,233 $40,855 $12,260 $39,833 7/00 $41,877 $37,725 $11,865 $36,571 8/00 $51,737 $45,765 $12,770 $47,816 9/00 $54,759 $44,158 $12,395 $47,596 10/00 $49,624 $40,564 $11,842 $45,397 11/00 $41,156 $35,213 $10,626 $35,891 12/00 $45,288 $36,420 $11,824 $39,211
PERFORMANCE(d) DECEMBER 31, 2000
CUMULATIVE SINCE SINCE BIOTECHNOLOGY FUND 1 YEAR 3 YEARS INCEPTION INCEPTION Class N Average Annual Total Return(e) 81.93% 65.45% 65.37% 352.88% Nasdaq Biotechnology Index Average Annual Total Return(a) 23.00% 52.97% 53.80% 264.20% Russell 2000 Index Average Annual Total Return(b) -3.03% 4.65% 5.74% 18.24% AMEX Biotechnology Index Average Annual Total Return(c) 62.05% 57.48% 57.63% 292.11%
The recent strong equity market performance has been especially favorable to biotechnology and has helped the Fund. This performance may not be sustainable and as a result, the Fund may not continue achieving the same level of performance as in the past. In addition, market volatility can dramatically affect the Fund's short-term returns and pursuing these levels of return involves accepting increased risk of volatility of return. The data above represents past performance of the Fund and may not indicate future performance. The investment return and principal value of an investment in the Fund will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. -------------------------------- (a) The Nasdaq Biotechnology Index is a capitalization-weighted index that attempts to measure the performance of all Nasdaq stocks in the biotechnology sector. This Index was developed with a base value of 200 stocks, as of November 1, 1993. (b) The Russell 2000 Index is composed of the 2,000 smallest securities in the Russell 3,000 Index, which is composed of the 3,000 largest U.S. companies based on market capitalization and represents approximately 98% of the investable U.S. equity market. (c) The American Stock Exchange Biotechnology Index is an equal dollar-weighted index designed to measure the performance of a cross section of companies in the biotechnology industry that are primarily involved in the use of biological processes to develop products or provide services. The index was developed with a base level of 200 stocks, as of October 18, 1991. (d) Returns assume reinvestment of all dividends and capital gains distributions at net asset value. (e) The Class N shares commenced operations on December 30, 1997. Page 34 Dresdner RCM Biotechnology Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) --------------------------------------------------------------------------------- EQUITY INVESTMENTS HEALTH CARE SECTOR 97.4% HEALTH CARE EQUIPMENT & SUPPLIES 16.7% 280,000 US Applera Corp. - Applied Biosystems Group * $ 26,337,500 85,000 US Caliper Technologies Corp. * 3,995,000 705,660 US Charles River Laboratories International Inc. * 19,317,443 70,000 US Cytyc Corp. * 4,379,375 413,000 US Inhale Therapeutic Systems Inc. * 20,856,500 287,000 US Invitrogen Corp. * 24,789,625 395,300 NL QIAGEN N.V. * 13,674,909 96,700 US St. Jude Medical Inc. * 5,941,006 382,500 US Waters Corp. * 31,938,750 ------------ 151,230,108 ------------ PHARMACEUTICALS & BIOTECHNOLOGY 80.7% 900,000 US 3 Dimensional Pharmaceuticals Inc. * 13,331,250 296,000 US Abgenix Inc. * 17,482,500 235,000 US Adolor Corp. * 5,170,000 556,500 US Alkermes Inc. * 17,460,187 202,000 US ALZA Corp. * 8,585,000 545,000 US Amgen Inc. * 34,845,937 315,000 US Andrx Group * 18,230,625 260,000 US Applera Corp. - Celera Genomics Group * 9,343,750 958,000 US Applied Molecular Evolution * 16,345,875 1,274,154 US AVANT Immunotherapeutics Inc. * 8,492,293 213,000 US Biogen Inc. * 12,793,313 332,300 UK Cambridge Antibody Technology Group PLC * 18,862,801 306,800 US Cell Genesys Inc. * 6,998,875 424,400 US Cell Therapeutics Inc. * 19,124,525 1,050,000 UK Celltech Group PLC * 18,555,227 263,800 US Cephalon Inc. * 16,701,837 375,000 US COR Therapeutics Inc. * 13,195,313 527,500 US Corvas International Inc. * 7,582,813 473,300 US CuraGen Corp. * 12,927,006 1,300,000 US Deltagen Inc. * 13,568,750 408,688 US Genentech Inc. * 33,308,072 150,000 UK GlaxoSmithKline PLC (ADR) 8,400,000 367,500 US Human Genome Sciences Inc. * 25,472,344 380,800 US ICOS Corp. * 19,777,800 129,700 US IDEC Pharmaceuticals Corp. * 24,586,256 292,300 US ImmunoGen Inc. * 6,266,181 896,500 US Immunomedics Inc. * 19,274,750 185,100 US Informax Inc. * 1,920,413 335,000 US Intermune Pharmaceuticals Inc. * 14,949,375 137,000 US Johnson & Johnson 14,393,563 254,700 US La Jolla Pharmaceutical Co. * 1,201,866 573,000 US Medarex Inc. * 23,349,750 660,000 US MedImmune Inc. * 31,473,750 498,200 US Millennium Pharmaceuticals Inc. * 30,826,125
The accompanying notes are an integral part of the financial statements. Page 35 Dresdner RCM Biotechnology Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) --------------------------------------------------------------------------------- EQUITY INVESTMENTS (CONTINUED) PHARMACEUTICALS & BIOTECHNOLOGY (CONTINUED) 489,500 US NeoPharm Inc. * $ 18,539,812 209,900 US OSI Pharmaceuticals Inc. * 16,818,237 465,000 US Pfizer Inc. 21,390,000 250,000 US Pharmacia Corp. 15,250,000 745,000 US PRAECIS Pharmaceuticals Inc. * 21,791,250 150,000 US Progenics Pharmaceuticals Inc. * 2,587,500 253,800 US Protein Design Labs Inc. * 22,048,875 732,900 US Rosetta Inpharmatics Inc. * 11,726,400 300,000 US Schering-Plough Corp. 17,025,000 750,000 CH Serono S.A. (ADR) * 17,953,125 125,000 IS Teva Pharmaceutical Industries Ltd. (ADR) 9,156,250 324,700 US Titan Pharmaceuticals Inc. * 11,484,639 271,200 US Virologic Inc. * 2,474,700 ------------ 733,043,910 ------------ TOTAL EQUITY INVESTMENTS (COST $880,043,885) 97.4% 884,274,018 ------------ SHORT-TERM INVESTMENTS MONEY MARKET FUNDS 0.8% 3,747,226 US SSgA Money Market Fund 3,747,226 3,747,181 US SSgA U.S. Government Money Market Fund 3,747,181 ------------ TOTAL SHORT-TERM INVESTMENTS (COST $7,494,407) 0.8% 7,494,407 ------------ TOTAL INVESTMENTS (COST $887,538,292)** 98.2% 891,768,425 OTHER ASSETS LESS LIABILITIES 1.8% 16,632,905 ------------ NET ASSETS 100.0% $908,401,330 ============
-------------------------------- * Non-income producing security ADR American Depositary Receipt The accompanying notes are an integral part of the financial statements. Page 36 Dresdner RCM Biotechnology Fund Portfolio of Investments December 31, 2000 Tax Information: ** For Federal income tax purposes, cost is $897,781,850 and gross aggregate unrealized appreciation (depreciation) for all securities is as follows: Unrealized appreciation $61,777,260 Unrealized depreciation (67,790,685) ----------- Net unrealized depreciation $(6,013,425) ===========
-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- The Fund's investments in securities at December 31, 2000 categorized by country (unaudited):
% OF NET ASSETS ------------------------------- COUNTRY SHORT-TERM COUNTRY CODE EQUITIES AND OTHER TOTAL ------------------------------------------------------------------------ Israel IS 1.0% 1.0% Netherlands NL 1.5% 1.5% Switzerland CH 2.0% 2.0% United Kingdom UK 5.1% 5.1% United States US 87.8% 2.6% 90.4% ------ ------ ----- Total 97.4% 2.6% 100.0% ====== ====== =====
The accompanying notes are an integral part of the financial statements. Page 37 Dresdner RCM Balanced Fund Management's Performance Review The "balanced" nature of the Dresdner RCM Balanced Fund showed its true advantage in 2000, as bonds performed well while stocks performed poorly. As a result, the Fund produced a return that belied the extreme results of its two components. For the year 2000, the Fund produced a total return of -2.64%. In comparison, the unmanaged benchmark, a 60%/40% blend of the Standard & Poor's 500 Index and the Lehman Brothers Aggregate Bond Index, returned -0.99%. For the fourth quarter ended December 31, 2000, the Fund returned -5.37% vs. its benchmark which returned -3.07%. MARKET REVIEW After raising short-term interest rates seven times between June 1999 and May 2000, the Federal Reserve Board shifted its bias towards easing rates as the economy was clearly slowing. Evidence of a weaker environment had materialized in many interest-sensitive sectors in the second half of 2000, including retail, autos and manufacturing. Third quarter 2000 U.S. GDP growth of 2.2% was considerably lower than the second quarter's growth of 5.6%, and more recent data pointed towards a further deceleration in the fourth quarter. In addition, by the end of the year, a dramatic downward shift in technology and telecommunications spending further exacerbated the slowdown. Companies across a broad spectrum of industries continued to announce less-than-expected revenues and earnings growth and lowered forecasts for both the quarter and 2001. Analysts slashed estimates for individual companies' growth, with the negative earnings revisions accelerating to a pace seldom seen before. As a result, stock prices weakened generally and a number of specific sectors were hit hard. The re-calibration of expectations in the technology sector was probably the most pronounced, creating unprecedented uncertainty and volatility. Stock prices, which reached extremely high levels in many industries within technology, peaked towards the end of the first quarter and began a bruising downward spiral through the end of the year. With the high expectations and rich valuations that had been placed on many stocks, investors became more nervous about the tech sector's sensitivity to broader economic conditions. Conversely, some of the groups previously hurt by macroeconomic factors and lowered expectations during the first three quarters began to recover by year-end. Investors anticipated a better operating environment in the wake of probable interest rate cuts by the Fed. Performance of retail and cyclical stocks improved, despite the eroding operating environment. Consumer products companies regained their status as a safe haven, as investors overlooked companies' operational miscues from earlier in the year. Defensive sectors, including utilities, financials, and energy stocks, posted solid returns after the first quarter and through the end of the year, albeit with more moderate performance in the fourth quarter. Pharmaceutical stocks also performed well, overcoming concerns about potential price regulation during the election period. Unlike most broad market averages, defensive groups posted positive returns for the fourth quarter as well as for the year, and were beneficiaries from the rotation out of technology. FACTORS AFFECTING PERFORMANCE As the fundamental backdrop was changing, the Fund's equity portfolio was positioned more defensively to protect against the slowing environment. In 2000, the technology position shifted from a significant overweight to an underweight by year-end. Semiconductor stocks were especially weak during 2000, falling precipitously as uncertainty about the duration of their growth cycle emerged. Reducing the Fund's exposure to this group had a positive impact on relative performance for the quarter and the year. Pharmaceutical stocks were strong for the year especially the fourth quarter. Although weak in the fourth quarter, many biotech stocks exhibited stronger performance for the year. An underweight in interest sensitive stocks, including banks, financials and utilities hurt performance as investors rotated out of tech stocks and into these sectors. The best performing fixed-income sector was the U.S. Treasury market, which benefited from two developments during the year. First, the federal budget surplus led the government to announce buybacks of Page 38 Dresdner RCM Balanced Fund Management's Performance Review Treasury notes and bonds, thus reducing supply. Second, the slowing economy created a flight to quality, more so in the latter part of 2000. The Fund's emphasis on non-Treasury sectors such as corporate bonds hurt performance, particularly in the first quarter. However, its emphasis on Treasury securities in the fourth quarter made up for some of that shortfall. For much of the year, the Fund was also overweighted in asset-backed securities, which offered attractive yields without the credit concerns; these securities are backed by credit card receivables, home equity loans and commercial mortgages that have been securitized. Some mortgage-backed securities began to underperform late in the fourth quarter as interest rates declined. The Fund also holds Treasury Inflation Protected Securities (TIPs). First issued by the U.S. Treasury in early 1997, TIPS offer a fixed interest rate and a principal amount that is adjusted for inflation. In a falling interest rate environment in which inflation isn't declining, TIPs offer a dual benefit. OUTLOOK With the rapid deceleration that appears to be occurring in technology and consumer spending, the risk of a hard economic landing or outright recession is increasing. The Federal Reserve has taken the extraordinary step of lowering the Fed Funds target by 0.50% prior to its January meeting, signaling its willingness to lower rates again if necessary. As the economy slows, it is likely that investors will continue to be concerned about the potential of a hard landing and the impact on corporate profits. This will likely add to the already high level of volatility of stock prices. If actions taken by the Federal Government help boost the economy, the portfolio may become more aggressive in the future. Page 39 Dresdner RCM Balanced Fund Total Return Index Comparison(d) EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC $10,000 Investment (12/15/99 - 06/30/00)(e)
BLENDED S&P 500 LEHMAN /LEHMAN BROTHERS BROTHERS CLASS I S&P 500 AGGREGATE BOND AGGREGATE SHARES INDEX(A) INDEX(B) BOND INDEX(C) 12/99 $10,000 $10,000 $10,000 $10,000 12/99 $10,650 $10,400 $9,938 $10,215 1/00 $10,500 $9,878 $9,905 $9,894 2/00 $10,670 $9,691 $10,025 $9,829 3/00 $11,240 $10,639 $10,157 $10,458 4/00 $10,875 $10,318 $10,128 $10,257 5/00 $10,584 $10,107 $10,123 $10,129 6/00 $10,945 $10,356 $10,333 $10,363 7/00 $10,886 $10,194 $10,427 $10,304 8/00 $11,339 $10,827 $10,579 $10,747 9/00 $10,957 $10,256 $10,645 $10,434 10/00 $10,886 $10,213 $10,716 $10,435 11/00 $10,239 $9,408 $10,891 $10,010 12/00 $10,369 $9,454 $11,094 $10,114
PERFORMANCE(d) DECEMBER 31, 2000
CUMULATIVE SINCE SINCE BALANCED FUND 1 YEAR INCEPTION INCEPTION Class I Average Annual Total Return(e) -2.64% 3.55% 3.69% S&P 500 Index Average Annual Total Return(a) -9.10% -5.26% -5.46% Lehman Brothers Aggregate Bond Index Average Annual Total Return(b) 11.63% 10.49% 10.94% Blended S&P 500 Index/Lehman Brothers Aggregate Bond Index Average Annual Total Return(c) -0.99% 1.09% 1.14%
The data above represents past performance of the Fund and may not indicate future performance. The investment return and principal value of an investment in the Fund will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. -------------------------------- (a) The Standard & Poor's 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. (b) The Lehman Brothers Aggregate Bond Index, which is a market value weighted performance benchmark for investment-grade fixed-rate debt issues, including government, corporate, asset-backed, and mortgage-backed securities, with maturities of at least one year. (c) The Blended S&P 500/Lehman Brothers Aggregate Bond Index is a blended index comprised of the performance of the two indexes weighted 60% S&P 500 Index and 40% Lehman Brothers Aggregate Bond Index. (d) Returns assume reinvestment of all dividends and capital gains distributions at net asset value. (e) Class I shares commenced operations on December 15, 1999. Page 40 Dresdner RCM Balanced Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) ---------------------------------------------------------------------------------- EQUITY INVESTMENTS COMMERCIAL GOODS & SERVICES SECTOR 6.2% CAPITAL GOODS 4.5% 900 US General Dynamics Corp. $ 70,200 23,600 US General Electric Co. 1,131,325 11,450 BH Tyco International Ltd. 635,475 ----------- 1,837,000 ----------- COMMERCIAL SERVICES & SUPPLIES 1.5% 7,100 US Enron Corp. 590,187 ----------- TRANSPORTATION 0.2% 1,000 US United Parcel Service Inc. (Class B) 58,812 ----------- CONSUMER DISCRETIONARY SECTOR 4.5% CONSUMER DURABLES & APPAREL 0.5% 3,500 US Nike Inc. (Class B) 195,344 ----------- MEDIA 1.3% 4,500 US Clear Channel Communications Inc. * 217,968 6,350 US Time Warner Inc. 331,724 ----------- 549,692 ----------- RETAILING 2.7% 9,000 US Costco Wholesale Corp. * 359,437 3,400 US Home Depot Inc. 155,338 7,500 US Target Corp. 241,875 6,000 US Wal-Mart Stores Inc. 318,750 ----------- 1,075,400 ----------- CONSUMER STAPLES SECTOR 4.3% FOOD & DRUG RETAILING 2.2% 15,000 US SYSCO Corp. 450,000 10,000 US Walgreen Co. 418,125 ----------- 868,125 ----------- FOOD, BEVERAGE & TOBACCO 0.7% 4,000 US Anheuser-Busch Cos. Inc. 182,000 1,800 US Coca Cola Co. 109,688 ----------- 291,688 ----------- HOUSEHOLD & PERSONAL PRODUCTS 1.4% 2,500 US Colgate-Palmolive Co. 161,375
The accompanying notes are an integral part of the financial statements. Page 41 Dresdner RCM Balanced Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) ---------------------------------------------------------------------------------- EQUITY INVESTMENTS (CONTINUED) HOUSEHOLD & PERSONAL PRODUCTS (CONTINUED) 5,500 US Estee Lauder Cos. Inc. (Class A) $ 240,968 2,100 US Procter & Gamble Co. 164,719 ----------- 567,062 ----------- ENERGY SECTOR 2.0% ENERGY 2.0% 800 US Chevron Corp. 67,550 3,600 US Schlumberger Ltd. 287,775 10,000 US Weatherford International Inc. 472,500 ----------- 827,825 ----------- FINANCIAL SECTOR 5.1% BANKS 1.0% 2,000 US Bank of New York Inc. 110,375 6,000 US Citigroup Inc. 306,375 ----------- 416,750 ----------- DIVERSIFIED FINANCIALS 0.4% 1,900 US Federal National Mortgage Association 164,825 ----------- INSURANCE 3.7% 3,600 BH ACE Ltd. 152,775 8,200 US American International Group Inc. 808,212 4,500 US Marsh & McLennan Cos. Inc. 526,500 ----------- 1,487,487 ----------- HEALTH CARE SECTOR 16.2% HEALTH CARE EQUIPMENT & SUPPLIES 1.7% 3,100 US Applera Corp. - Applied Biosystems Group * 291,594 4,500 US Inhale Therapeutic Systems Inc. * 227,250 1,900 US Waters Corp. * 158,650 ----------- 677,494 ----------- PHARMACEUTICALS & BIOTECHNOLOGY 14.5% 12,000 US Amgen Inc. * 767,250 5,000 US Bristol-Myers Squibb Co. 369,687 3,000 US Eli Lilly & Co. 279,188 5,200 US Genentech Inc. * 423,800 8,000 UK GlaxoSmithKline PLC (ADR) 448,000 1,600 US Human Genome Sciences Inc. * 110,900 900 US Johnson & Johnson 94,556
The accompanying notes are an integral part of the financial statements. Page 42 Dresdner RCM Balanced Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) ---------------------------------------------------------------------------------- EQUITY INVESTMENTS (CONTINUED) PHARMACEUTICALS & BIOTECHNOLOGY (CONTINUED) 2,300 US MedImmune Inc. * $ 109,681 5,500 US Merck & Co. Inc. 514,937 6,700 US Millennium Pharmaceuticals Inc. * 414,563 31,000 US Pfizer Inc. 1,426,000 10,100 US Pharmacia Corp. 616,100 5,000 US Schering-Plough Corp. 283,750 ----------- 5,858,412 ----------- TECHNOLOGY SECTOR 12.2% COMMUNICATIONS EQUIPMENT 5.5% 18,000 US Cisco Systems Inc. * 688,500 3,000 US Corning Inc. 158,438 775 US Juniper Networks Inc. * 97,698 15,250 FI Nokia Oyj (ADR) 663,375 4,600 US QUALCOMM Inc. * 378,062 1,500 US SDL Inc. * 222,281 ----------- 2,208,354 ----------- COMPUTERS & PERIPHERALS 2.5% 8,200 US EMC Corp. * 545,300 5,500 US Hewlett-Packard Co. 173,594 1,300 US International Business Machines Corp. 110,500 6,600 US Sun Microsystems Inc. * 183,975 ----------- 1,013,369 ----------- INTERNET SOFTWARE & SERVICES 0.7% 5,500 US America Online Inc. * 191,400 3,200 US Yahoo Inc. * 96,550 ----------- 287,950 ----------- SEMICONDUCTORS & INSTRUMENTS 0.8% 11,000 US Intel Corp. 332,750 ----------- SOFTWARE 2.7% 10,900 US Microsoft Corp. * 472,787 12,000 US Oracle Corp. * 348,750
The accompanying notes are an integral part of the financial statements. Page 43 Dresdner RCM Balanced Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) ---------------------------------------------------------------------------------- EQUITY INVESTMENTS (CONTINUED) SOFTWARE (CONTINUED) 1,300 US Siebel Systems Inc. * $ 87,913 2,200 US VERITAS Software Corp. * 192,500 ----------- 1,101,950 ----------- TELECOMMUNICATION SERVICES SECTOR 4.9% TELECOMMUNICATION SERVICES 4.9% 6,000 US Nextel Communications Inc. (Class A) * 148,500 16,400 US Qwest Communications International Inc. * 672,400 8,800 US SBC Communications Inc. 420,200 6,500 BH TyCom Ltd. * 145,438 10,500 UK Vodafone Group PLC (ADR) 376,031 15,100 US WorldCom Inc. 211,400 ----------- 1,973,969 ----------- TOTAL EQUITY INVESTMENTS (COST $24,527,989) 55.4% 22,384,445 ----------- FACE AMOUNT ---------- DEBT INVESTMENTS ASSET-BACKED SECURITIES 1.4% $ 80,000 US Asset Securitization Corp., Series 1997-MD7, Class A1B, 7.410%, maturing 01/13/30 82,475 15,000 US Carco Auto Loan Master Trust, Series 1999-4, Class A, 6.430%, maturing 11/15/04 15,149 100,000 US Citibank Credit Card Master Trust I, Series 1999-5, Class A, 6.100%, maturing 05/15/08 99,924 165,000 US Discover Card Master Trust I, Series 1999-6, Class A, 6.850%, maturing 07/17/07 165,708 100,000 US Ford Credit Auto Owner Trust, Series 2000-C, Class B, 7.500%, maturing 10/15/04 102,392 40,000 US Green Tree Financial Corp., Series 1998-6, Class A6, 6.270%, maturing 07/01/21 38,837 15,000 US Green Tree Home Equity Loan Trust, Series 1999-A, Class A5, 6.130%, maturing 02/15/19 14,586 60,000 US MBNA Master Credit Card Trust, Series 1996-D, Class A, 6.860%, maturing 09/15/03 60,034 ----------- 579,105 ----------- COLLATERALIZED MORTGAGE OBLIGATIONS 2.3% 55,000 US Chase Commercial Mortgage Securities Corp., Series 1999-2, Class A2, 7.198%, maturing 11/15/09 57,687
The accompanying notes are an integral part of the financial statements. Page 44 Dresdner RCM Balanced Fund Portfolio of Investments December 31, 2000
FACE % OF MARKET VALUE AMOUNT COUNTRY NET ASSETS (NOTE 1) ---------------------------------------------------------------------------------- DEBT INVESTMENTS (CONTINUED) COLLATERALIZED MORTGAGE OBLIGATIONS (CONTINUED) $ 95,000 US Chase Commercial Mortgage Securities Corp., Series 2000-2, Class A2, 7.631%, maturing 06/15/10 $ 101,793 100,000 US Commercial Mortgage Asset Trust, Series 1999-C2, Class A2, 7.546%, maturing 12/17/09 106,169 165,000 US Commercial Mortgage Asset Trust, Series 1999-C1, Class A3, 6.640%, maturing 09/17/10 164,477 65,000 US Credit Suisse First Boston Mortgage Securities Corp., Series 1999-C1, Class A2, 7.290%, maturing 09/15/09 68,371 150,000 US DLJ Commercial Mortgage Corp., Series 1999-CG2, Class A1B, 7.300%, maturing 06/10/09 156,886 25,000 US Green Tree Financial Corp., Series 1998-2, Class A5, 6.240%, maturing 11/01/16 25,052 150,000 US LB Commercial Conduit Mortgage Trust, Series 1998-C1, Class A3, 6.480%, maturing 01/18/08 150,743 65,000 US Nomura Asset Securities Corp., Series 1998-D6, Class A1B, 6.590%, maturing 03/17/28 65,566 14,879 US Oakwood Mortgage Investors Inc., Series 1998-B, Class A3, 6.200%, maturing 01/15/15 14,854 ----------- 911,598 ----------- CORPORATE BONDS 5.1% 105,000 BH Tyco International Group S.A., 6.875%, maturing 01/15/29 97,195 70,000 CA Hydro-Quebec, 8.050%, maturing 07/07/24 80,359 105,000 CA Quebec Province, 8.625%, maturing 01/19/05 113,525 40,000 DE Deutsche Telekom International Finance BV, 8.000%, maturing 06/15/10 40,794 110,000 FR Axa S.A., 8.600%, maturing 12/15/30 113,581 35,000 UK Barclays Bank PLC (144A), 8.550%, maturing 06/15/11 36,770 35,000 UK British Telecommunications PLC, 8.625%, maturing 12/15/30 34,858 40,000 UK HSBC Capital Funding LP (144A), 10.176%, maturing 12/31/49 45,929 105,000 US American General Finance Corp., 6.750%, maturing 11/15/04 105,993
The accompanying notes are an integral part of the financial statements. Page 45 Dresdner RCM Balanced Fund Portfolio of Investments December 31, 2000
FACE % OF MARKET VALUE AMOUNT COUNTRY NET ASSETS (NOTE 1) ---------------------------------------------------------------------------------- DEBT INVESTMENTS (CONTINUED) CORPORATE BONDS (CONTINUED) $ 65,000 US Boeing Co., 6.625%, maturing 02/15/38 $ 61,883 140,000 US Burlington Northern Santa Fe Corp., 7.125%, maturing 12/15/10 142,313 47,710 US Continental Airlines Inc., 7.256%, maturing 03/15/20 48,397 110,000 US Delta Air Lines Inc., 7.570%, maturing 11/18/10 115,504 150,000 US El Paso Energy Corp., 6.950%, maturing 12/15/07 150,573 45,000 US General Electric Global Insurance Corp., 7.000%, maturing 02/15/26 44,026 90,000 US GTE Corp., 6.940%, maturing 04/15/28 83,893 45,000 US International Business Machines Corp., 8.375%, maturing 11/01/19 51,059 25,000 US Liberty Media Corp., 8.500%, maturing 07/15/29 23,512 55,000 US MGM Mirage Inc., 8.500%, maturing 09/15/10 56,699 110,000 US Morgan Stanley Dean Witter & Co., 7.125%, maturing 01/15/03 111,946 65,000 US Tennessee Gas Pipeline Co., 7.000%, maturing 10/15/28 60,566 50,000 US Time Warner Inc., 10.150%, maturing 05/01/12 61,812 40,000 US TransAmerica Capital III, 7.625%, maturing 11/15/37 36,431 40,000 US United Technologies Corp., 7.500%, maturing 09/15/29 41,336 50,000 US Waste Management Inc., 6.875%, maturing 05/15/09 47,010 85,000 US Wells Fargo & Co., 7.250%, maturing 08/24/05 88,160 180,000 US Xcel Energy Inc., 7.000%, maturing 12/01/10 178,804 ----------- 2,072,928 ----------- U.S. GOVERNMENT AND AGENCY BONDS 32.1% 964 US Federal Home Loan Mortgage Corp., 10.250%, maturing 06/01/09 1,016 1,110,000 US Federal Home Loan Mortgage Corp., 6.875%, maturing 09/15/10 1,181,972 451 US Federal Home Loan Mortgage Corp., 10.750%, maturing 10/01/10 482
The accompanying notes are an integral part of the financial statements. Page 46 Dresdner RCM Balanced Fund Portfolio of Investments December 31, 2000
FACE % OF MARKET VALUE AMOUNT COUNTRY NET ASSETS (NOTE 1) ---------------------------------------------------------------------------------- DEBT INVESTMENTS (CONTINUED) U.S. GOVERNMENT AND AGENCY BONDS (CONTINUED) $1,000,000 US Federal Home Loan Mortgage Corp., ** 8.000%, 30 Year, TBA $ 1,025,310 240,000 US Federal National Mortgage Association, 6.000%, maturing 05/15/08 240,900 115,000 US Federal National Mortgage Association, 7.250%, maturing 01/15/10 124,883 398,382 US Federal National Mortgage Association, 7.000%, maturing 08/01/15 402,613 65,000 US Federal National Mortgage Association, 7.125%, maturing 01/15/30 72,759 111,061 US Federal National Mortgage Association, 7.500%, maturing 05/01/30 112,691 125,000 US Federal National Mortgage Association, 7.250%, maturing 05/15/30 142,265 1,205,000 US Federal National Mortgage Association, ** 7.000%, 30 Year, TBA 1,206,880 2,035,000 US Federal National Mortgage Association, ** 7.500%, 30 Year, TBA 2,064,874 315,000 US Federal National Mortgage Association, ** 8.000%, 30 Year, TBA 322,774 235,866 US Government National Mortgage Association, 7.500%, maturing 11/15/29 239,918 178,996 US Government National Mortgage Association, 8.000%, maturing 04/15/30 183,695 325,000 US United States Treasury Bonds *** 6.250%, maturing 08/15/23 351,507 255,000 US United States Treasury Bonds 6.625%, maturing 02/15/27 291,259 349,265 US United States Treasury Bonds 3.875%, maturing 04/15/29 357,997 1,280,000 US United States Treasury Notes 6.375%, maturing 06/30/02 1,298,803 30,000 US United States Treasury Notes 6.000%, maturing 08/15/04 30,848 1,250,000 US United States Treasury Notes 6.750%, maturing 05/15/05 1,331,638 1,900,000 US United States Treasury Notes 5.750%, maturing 08/15/10 1,991,884 ----------- 12,976,968 ----------- TOTAL DEBT INVESTMENTS (COST $16,185,344) 40.9% 16,540,599 ----------- SHORT-TERM INVESTMENTS COMMERCIAL PAPER 10.4% 310,000 US American Express Credit Corp., 6.500%, maturing 01/12/01 309,384
The accompanying notes are an integral part of the financial statements. Page 47 Dresdner RCM Balanced Fund Portfolio of Investments December 31, 2000
FACE % OF MARKET VALUE AMOUNT COUNTRY NET ASSETS (NOTE 1) ---------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS (CONTINUED) COMMERCIAL PAPER (CONTINUED) $ 500,000 US American General Finance Corp., 6.540%, maturing 01/12/01 $ 499,001 605,000 US Associates Corp. of North America, 6.540%, maturing 01/09/01 604,121 180,000 US Citicorp., 6.520%, maturing 01/12/01 179,641 600,000 US Citigroup Inc., 6.500%, maturing 01/11/01 598,917 275,000 US Coca Cola Co., 6.500%, maturing 01/16/01 274,255 130,000 US Ford Motor Credit Co., 6.540%, maturing 01/12/01 129,740 310,000 US General Electric Co., 6.520%, maturing 01/12/01 309,383 605,000 US IBM Credit Corp., 6.500%, maturing 01/11/01 603,908 108,000 US Prudential Funding Corp., 6.530%, maturing 01/03/01 107,961 585,000 US Prudential Funding Corp., 6.420%, maturing 01/12/01 583,852 ----------- 4,200,163 ----------- SHARES ---------- MONEY MARKET FUNDS 2.0% 409,768 US SSgA Money Market Fund *** 409,768 408,921 US SSgA U.S. Government Money Market Fund *** 408,921 ----------- 818,689 ----------- TOTAL SHORT-TERM INVESTMENTS (COST $5,018,852) 12.4% 5,018,852 ----------- TOTAL INVESTMENTS (COST $45,732,185)**** 108.7% 43,943,896 OTHER ASSETS LESS LIABILITIES (8.7)% (3,522,777) ----------- NET ASSETS 100.0% $40,421,119 ===========
-------------------------------- * Non-income producing security ADR American Depositary Receipt 144A Security is purchased pursuant to Rule 144A of the Securities Act of 1933 and may be resold only to qualified institutional buyers. ** Settlement of mortgage backed securities is on a delayed delivery basis with the final maturity to be announced (TBA) in the future. At December 31, 2000, the cost of the Fund's forward commitment purchased was $4,565,830. *** A portion of this security and cash have been segregated to cover the forward commitment purchase. The accompanying notes are an integral part of the financial statements. Page 48 Dresdner RCM Balanced Fund Portfolio of Investments December 31, 2000 Tax Information: **** For Federal income tax purposes, cost is $45,737,611 and gross aggregate unrealized appreciation (depreciation) for all securities is as follows:
Unrealized appreciation $1,482,633 Unrealized depreciation (3,276,348) ---------- Net unrealized depreciation $(1,793,715) ==========
-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- The Fund's investments in securities at December 31, 2000 categorized by country (unaudited):
% OF NET ASSETS --------------------------------------- COUNTRY SHORT-TERM COUNTRY CODE EQUITIES DEBT AND OTHER TOTAL --------------------------------------------------------------------------- Bermuda BH 2.3% 0.3% 2.6% Canada CA 0.5% 0.5% Finland FI 1.7% 1.7% France FR 0.3% 0.3% Germany DE 0.1% 0.1% United Kingdom UK 2.0% 0.3% 2.3% United States US 49.4% 39.4% 3.7% 92.5% ------ ---- ------ ----- Total 55.4% 40.9% 3.7% 100.0% ====== ==== ====== =====
The accompanying notes are an integral part of the financial statements. Page 49 Dresdner RCM Global Equity Fund Management's Performance Review Despite the slower than expected global economic growth, the Dresdner RCM Global Equity Fund outperformed its primary benchmark in 2000 by 315 basis points. For the year ended December 31, 2000, the Fund declined 10.80% while the Fund's primary benchmark, the MSCI All Country World Free Index ("ACWI"), returned -13.95% and its secondary benchmark, the S&P 500 Index returned -9.10%. For the fourth quarter, the Fund returned -9.31% while the MSCI ACWI Index fell 6.50% and the S&P 500 Index returned -7.82%. MARKET REVIEW The contrast between the first and final quarters of 2000 was marked. The year began with continued strength and momentum in the New Economy sectors. Technology, telecommunications and media were up 9.9%, 4.4% and 13.4% respectively, in the first quarter. Conversely, by year-end, the global equity markets experienced a violent sector reversal as investors rotated out of these formerly stellar sectors. Technology plummeted to -30.2% and telecommunications lost -14.9%. By the fourth quarter, investors favored the more defensive sectors such as consumer staples, up 15.6% and health care, up 8.4%. Overall, the market euphoria of 1999 was quelled by tighter monetary policy throughout the United States and Europe. Even Japan, which had historically high unemployment figures and maintained a benign monetary policy during the first half of 2000, raised interest rates in the third quarter, a first since 1990. Whether the increase in rates was to control inflation (a result of higher oil prices and a weak Euro) as it was with the European Central Bank, or like the Bank of Japan, intended to sustain a rebound in the economy, the outcome was the same -- a weaker global economy with growth stocks underperforming as a result. The economic slowdown was apparent in each of the major regions: U.S. third-quarter gross domestic product (GDP) growth of 2.2% represented a four-year low; European GDP growth slowed to a 2.8% annualized rate in the third quarter; and Japanese economic growth decreased to a 1.0% annualized rate after beginning the year with a remarkable 10% recovery in GDP. FACTORS AFFECTING PERFORMANCE Early in 2000, Dresdner RCM Global Investors LLC ("Dresdner RCM"), the investment manager of the Fund, made the decision to overweight the New Economy sectors, sectors that offered extraordinary growth potential, specifically technology and telecommunications. During the first quarter, this decision and favorable stock selection within the U.S. and Germany, positively impacted the Fund's performance. Rather than attempt to time a sector rotation, Dresdner RCM did not alter this strategy in the second quarter, taking into consideration that many companies in these sectors outside the U.S., lagged their counterparts here. This decision hurt performance as monetary policy continued to tighten worldwide and these sectors lost favor to Old Economy stocks. Superior stock selections within the communications equipment industry (SDL, Corning and CIENA in the U.S.) helped mitigate much of the underperformance from exposure to the Japanese brokerage companies and select Internet stocks for the second quarter. Offsetting the negative impact of the market's reverse that favored the New Economy high growth stocks, was the Fund's overweight in pharmaceuticals and biotechnology. This strategy added value both in the second and the third quarters. During the third quarter, despite the overweight in telecommunications services and communications equipment dampening performance, Dresdner RCM's conviction to maintain telecommunications holdings strengthened. The race of service providers to offer faster data and Internet communications over mobile phones was in progress. Dresdner RCM believes that manufacturers of this technology are poised to gain from an investment boom on behalf of the service providers, and this should translate into both higher infrastructure spending and increased demand for more sophisticated cellular handsets. This theme has yet to fully play out, however. In the fourth quarter, technology stock selection, Nokia, in particular, positively impacted the Fund's performance. Page 50 Dresdner RCM Global Equity Fund Management's Performance Review After the first half of 2000, defensive-oriented sectors such as utilities and finance rebounded and excelled. By the third quarter, the Fund began increasing the size of its European financial position, based upon a possible plateau of U.S. and European interest rates, a growing equity culture in these countries, as well as the prospect of significant pension reform in this region. Policymakers are introducing tax-advantaged savings plans similar to 401(k) plans in the U.S. Firms with asset management capabilities will be the greatest beneficiaries of this expected boom in savings. Furthermore, those banks with asset management should be able to leverage their distribution channels for growth in this area (UBS in Switzerland, Deutsche Bank in Germany and UniCredito Italiano in Italy). By year-end, superior stock selection in financials (i.e., XL Capital, Freddie Mac, and Ace Limited in the U.S., Swiss Re in Switzerland) helped to offset the negative effects of the market shift away from the growth style. OUTLOOK Dresdner RCM expects the market environment to remain relatively negative in the short-term as the prospects for a hard global economic landing continue to mount. Central banks may begin to ease monetary policy in the new year. As of the time of this writing, in a surprise move, the United States Federal Reserve took the extraordinary step of lowering the Fed Funds target rate 50 basis points prior to the scheduled January meeting. However, a move toward easing globally may not be enough to avert a major economic slowdown. It would not be surprising, therefore, to see companies continue to pre-announce lower than expected earnings growth figures. Within that context, Dresdner RCM will likely continue to stress the quality aspect of the stocks in the Fund. Quality can be viewed within the context of visible earnings growth and a strong balance sheet, such that a company is not dependent upon capital markets for financing. Based upon this strategy, the Fund ended the year and moved into 2001 overweighted in the health care and financials sectors and underweighted in the cyclically sensitive sectors (i.e., commercial goods and services, consumer discretionary, and materials). Page 51 Dresdner RCM Global Equity Fund Total Return Index Comparison(c) EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC $10,000 Investment (12/30/98 - 12/31/00)(d)
CLASS I SHARES S&P 500 INDEX(A) MSCI-ACWI FREE(B) 12/98 $10,000 $10,000 $10,000 1/99 $10,300 $10,418 $10,204 2/99 $9,940 $10,094 $9,948 3/99 $10,430 $10,498 $10,396 4/99 $10,520 $10,904 $10,845 5/99 $10,160 $10,647 $10,462 6/99 $11,000 $11,238 $10,983 7/99 $11,130 $10,887 $10,938 8/99 $11,320 $10,833 $10,925 9/99 $11,380 $10,536 $10,807 10/99 $12,260 $11,203 $11,353 11/99 $13,850 $11,430 $11,707 12/99 $16,220 $12,104 $12,682 1/00 $15,759 $11,496 $11,998 2/00 $17,266 $11,279 $12,039 3/00 $17,266 $12,382 $12,830 4/00 $15,934 $12,009 $12,254 5/00 $14,919 $11,763 $11,935 6/00 $16,292 $12,052 $12,246 7/00 $15,852 $11,864 $11,886 8/00 $17,009 $12,601 $12,255 9/00 $15,954 $11,936 $11,582 10/00 $15,493 $11,885 $11,355 11/00 $13,997 $10,949 $10,651 12/00 $14,469 $11,003 $10,913
PERFORMANCE(c) DECEMBER 31, 2000
CUMULATIVE SINCE SINCE GLOBAL EQUITY FUND 1 YEAR INCEPTION INCEPTION Class I Average Annual Total Return(d) -10.80% 20.29% 44.69% S&P 500 Stock Index Average Annual Total Return(a) -9.10% 4.89% 10.03% MSCI-ASWI Free Average Annual Total Return(b) -13.95% 4.46% 9.13%
The data above represents past performance of the Fund and may not indicate future performance. The investment return and principal value of an investment in the Fund will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. -------------------------------- (a) The Standard & Poor's 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. (b) The MSCI All Country World Free Index ("ACWI") is a market capitalization-weighted index composed of companies representative of the market structure of 47 developed and emerging market countries in the Americas, Europe/Middle East, and Asia/Pacific regions. The Index is calculated without dividends or with gross dividends reinvested, in both U.S. Dollars and local currencies. The MSCI ACWI Free Index excludes closed markets and those shares in otherwise free markets, which are not purchasable by foreigners. (c) Returns assume reinvestment of all dividends and capital gains distributions at net asset value. (d) Class I shares commenced operations on December 30, 1998. Page 52 Dresdner RCM Global Equity Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) --------------------------------------------------------------------------------- EQUITY INVESTMENTS COMMERCIAL GOODS & SERVICES SECTOR 6.0% CAPITAL GOODS 4.2% 100 US General Dynamics Corp. $ 7,800 530 US General Electric Co. 25,407 175 NL Koninklijke (Royal) Philips Electronics N.V. * 6,411 1,000 JP Mitsubishi Electric Corp. 6,156 225 BH Tyco International Ltd. 12,487 ---------- 58,261 ---------- COMMERCIAL SERVICES & SUPPLIES 1.8% 295 US Enron Corp. 24,522 ---------- CONSUMER DISCRETIONARY SECTOR 11.7% AUTOMOBILES & COMPONENTS 0.7% 300 JP Toyota Motor Corp. 9,588 ---------- CONSUMER DURABLES & APPAREL 3.4% 190 US Electronic Arts Inc. * 8,099 950 JP Matsushita Electric Industrial Co. Ltd. (ADR) 22,206 600 JP Sanyo Electric Co. Ltd. 4,991 150 JP Sony Corp. (ADR) 10,463 ---------- 45,759 ---------- HOTELS, RESTAURANTS & LEISURE 2.7% 1,650 UK Granada Compass PLC 17,956 240 US McDonald's Corp. 8,160 245 US Starbucks Corp. * 10,841 ---------- 36,957 ---------- MEDIA 2.5% 180 US Comcast Corp. (Class A) * 7,515 160 US Gemstar-TV Guide International Inc. * 7,380 185 US Time Warner Inc. 9,665 150 FR Vivendi Universal S.A. * 9,872 ---------- 34,432 ---------- RETAILING 2.4% 165 US Home Depot Inc. 7,538
The accompanying notes are an integral part of the financial statements. Page 53 Dresdner RCM Global Equity Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) --------------------------------------------------------------------------------- EQUITY INVESTMENTS (CONTINUED) RETAILING (CONTINUED) 420 US Target Corp. $ 13,545 230 US Wal-Mart Stores Inc. 12,219 ---------- 33,302 ---------- CONSUMER STAPLES SECTOR 9.2% FOOD & DRUG RETAILING 2.3% 170 US Safeway Inc. * 10,625 5,324 UK Tesco PLC 21,692 ---------- 32,317 ---------- FOOD, BEVERAGE & TOBACCO 5.0% 400 BR Companhia de Bebidas das Americas (ADR) 10,300 200 MX Fomento Economico Mexicano S.A. de C.V. (ADR) 5,975 400 BE Interbrew * 13,940 11 CH Nestle S.A. 25,659 125 US The Quaker Oats Co. 12,172 ---------- 68,046 ---------- HOUSEHOLD & PERSONAL PRODUCTS 1.9% 270 US Avon Products Inc. 12,926 170 US Estee Lauder Cos. Inc. (Class A) 7,448 400 UK Reckitt Benckiser PLC 5,509 ---------- 25,883 ---------- ENERGY SECTOR 7.2% ENERGY 7.2% 200 CA Alberta Energy Co. Ltd. 9,561 800 UK BP Amoco PLC 6,453 1,200 IT ENI S.p.A. 7,661 175 US Exxon Mobil Corp. 15,214 2,320 UK Shell Transport & Trading Co. 19,026 260 US Tosco Corp. 8,824 110 FR Total Fina Elf S.A. 16,358 350 US Transocean Sedco Forex Inc. 16,100 ---------- 99,197 ---------- FINANCIAL SECTOR 26.0% BANKS 6.0% 145 US Bank of New York Inc. 8,002 140 US Citigroup Inc. 7,149 700 AU Commonwealth Bank of Australia 12,020 85 DE Deutsche Bank AG 7,143
The accompanying notes are an integral part of the financial statements. Page 54 Dresdner RCM Global Equity Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) --------------------------------------------------------------------------------- EQUITY INVESTMENTS (CONTINUED) BANKS (CONTINUED) 680 UK Royal Bank of Scotland Group PLC $ 16,070 1,000 JP Sumitomo Bank Ltd. 10,271 85 CH UBS AG 13,874 1,450 IT UniCredito Italiano S.p.A. 7,583 ---------- 82,112 ---------- DIVERSIFIED FINANCIALS 9.2% 310 US Federal Home Loan Mortgage Corp. 21,351 399 NL Fortis (NL) N.V. 12,961 425 US Golden State Bancorp Inc. 13,361 800 UK HSBC Holdings PLC 11,898 1,000 JP Nikko Securities Co. Ltd. 7,749 1,000 JP Nomura Securities Co. Ltd. 17,995 600 JP Sumitomo Trust & Banking Co. Ltd. 4,082 275 US USA Education Inc. 18,700 350 US Washington Mutual Inc. 18,572 ---------- 126,669 ---------- INSURANCE 9.9% 590 BH ACE Ltd. 25,038 40 DE Allianz AG 14,969 160 US American International Group Inc. 15,770 420 US John Hancock Financial Services Inc. 15,803 42 DE Muenchener Rueckversicherungs-Gesellschaft AG 15,026 450 UK Prudential Corp. PLC 7,240 6 CH Swiss Re 14,384 310 BH XL Capital Ltd. (Class A) 27,086 ---------- 135,316 ---------- REAL ESTATE 0.9% 1,000 HK Cheung Kong (Holdings) Ltd. (ADR) 12,700 ---------- HEALTH CARE SECTOR 16.5% HEALTH CARE EQUIPMENT & SUPPLIES 2.9% 90 US Applera Corp. - Applied Biosystems Group * 8,466 270 US Cytyc Corp. * 16,892 175 US Waters Corp. * 14,612 ---------- 39,970 ---------- HEALTH CARE PROVIDERS & SERVICES 0.8% 400 US IMS Health Inc. 10,800 ---------- PHARMACEUTICALS & BIOTECHNOLOGY 12.8% 225 US Amgen Inc. * 14,386
The accompanying notes are an integral part of the financial statements. Page 55 Dresdner RCM Global Equity Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) --------------------------------------------------------------------------------- EQUITY INVESTMENTS (CONTINUED) PHARMACEUTICALS & BIOTECHNOLOGY (CONTINUED) 100 US Genentech Inc. * $ 8,150 900 UK GlaxoSmithKline PLC * 25,410 215 US Johnson & Johnson 22,588 150 US MedImmune Inc. * 7,153 160 US Merck & Co. Inc. 14,980 8 CH Novartis AG 14,144 675 US Pfizer Inc. 31,157 400 US Pharmacia Corp. 24,400 130 US Schering-Plough Corp. 7,378 220 CH Serono S.A. (ADR) * 5,266 ---------- 175,012 ---------- TECHNOLOGY SECTOR 15.2% COMMUNICATIONS EQUIPMENT 7.9% 640 US Cisco Systems Inc. * 24,480 135 US Comverse Technology Inc. * 14,664 65 US Juniper Networks Inc. * 8,194 675 US Motorola Inc. 13,669 650 FI Nokia Oyj 28,987 90 US QUALCOMM Inc. * 7,397 900 SE Telefonaktiebolaget LM Ericsson AB (B Shares) * 10,254 ---------- 107,645 ---------- COMPUTERS & PERIPHERALS 1.9% 185 US EMC Corp. * 12,302 165 US International Business Machines Corp. 14,025 ---------- 26,327 ---------- SEMICONDUCTORS & INSTRUMENTS 1.1% 80 DE Epcos AG * 6,947 275 US Intel Corp. 8,319 ---------- 15,266 ---------- SOFTWARE 4.3% 300 UK Amdocs Ltd. * 19,875 65 IS Check Point Software Technologies Ltd. * 8,682 425 US Microsoft Corp. * 18,434
The accompanying notes are an integral part of the financial statements. Page 56 Dresdner RCM Global Equity Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) --------------------------------------------------------------------------------- EQUITY INVESTMENTS (CONTINUED) SOFTWARE (CONTINUED) 110 US Siebel Systems Inc. * $ 7,439 60 US VeriSign Inc. * 4,451 ---------- 58,881 ---------- TELECOMMUNICATION SERVICES SECTOR 7.3% TELECOMMUNICATION SERVICES 7.3% 270 US American Tower Corp. (Class A) * 10,226 175 US BellSouth Corp. 7,164 200 US Crown Castle International Corp. * 5,413 250 US Nextel Communications Inc. (Class A) * 6,188 1 JP NTT DoCoMo Inc. 17,250 275 US Qwest Communications International Inc. * 11,275 600 ES Telefonica S.A. * 9,914 6,657 UK Vodafone Group PLC 24,413 75 US VoiceStream Wireless Corp. * 7,547 ---------- 99,390 ---------- UTILITIES SECTOR 3.4% UTILITIES 3.4% 215 US AES Corp. * 11,905 5,100 UK Centrica PLC 19,751 800 UK National Grid Group PLC 7,272 175 US Reliant Energy Inc. 7,580 ---------- 46,508 ---------- TOTAL EQUITY INVESTMENTS (COST $1,364,007) 102.5% 1,404,860 ---------- SHORT-TERM INVESTMENTS MONEY MARKET FUNDS 1.3% 9,118 US SSgA Money Market Fund 9,118 9,326 US SSgA U.S. Government Money Market Fund 9,326 ---------- TOTAL SHORT-TERM INVESTMENTS (COST $18,444) 1.3% 18,444 ---------- TOTAL INVESTMENTS (COST $1,382,451)** 103.8% 1,423,304 OTHER ASSETS LESS LIABILITIES (3.8)% (52,619) ---------- NET ASSETS 100.0% $1,370,685 ==========
-------------------------------- * Non-income producing security ADR American Depositary Receipt The accompanying notes are an integral part of the financial statements. Page 57 Dresdner RCM Global Equity Fund Portfolio of Investments December 31, 2000 Tax Information: ** For Federal income tax purposes, cost is $1,388,372 and gross aggregate unrealized appreciation (depreciation) for all securities is as follows: Unrealized appreciation $165,991 Unrealized depreciation (131,059) -------- Net unrealized appreciation $ 34,932 ========
-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- The Fund's investments in securities at December 31, 2000 categorized by country (unaudited):
% OF NET ASSETS ------------------------------ COUNTRY SHORT-TERM COUNTRY CODE EQUITIES AND OTHER TOTAL ----------------------------------------------------------------------- Australia AU 0.9% 0.9% Bermuda BH 4.7% 4.7% Belgium BE 1.0% 1.0% Brazil BR 0.8% 0.8% Canada CA 0.7% 0.7% Finland FI 2.1% 2.1% France FR 1.9% 1.9% Germany DE 3.2% 3.2% Hong Kong HK 0.9% 0.9% Israel IS 0.6% 0.6% Italy IT 1.1% 1.1% Japan JP 8.1% 8.1% Mexico MX 0.4% 0.4% Netherlands NL 1.4% 1.4% Spain ES 0.7% 0.7% Sweden SE 0.8% 0.8% Switzerland CH 5.4% 5.4% United Kingdom UK 14.8% 14.8% United States US 53.0% (2.5)% 50.5% ------ ------- ----- Total 102.5% (2.5)% 100.0% ====== ======= =====
The accompanying notes are an integral part of the financial statements. Page 58 Dresdner RCM Global Small Cap Fund Management's Performance Review A continuing emphasis in the technology sector as well as a very challenging investment environment for global small cap growth investors led the Dresdner RCM Global Small Cap Fund to underperform its benchmark during 2000. For the 12-month period ended December 31, 2000, the Dresdner RCM Global Small Cap Fund returned -13.88% and -13.84% for the Class I and Class N shares, respectively. In comparison, the MSCI Small Cap World Index produced a return of -1.60%. Much of the shortfall took place in the fourth quarter, when the Dresdner RCM Global Small Cap Fund returned -21.50% and -21.54% for the Class I and Class N shares, respectively. In comparison, the MSCI Small Cap World Index produced a return of -6.12%. MARKET REVIEW A bear market took hold of the U.S. technology markets in 2000, causing the Nasdaq Composite to decline 39%, the worst year in its 30-year history. Technology investing largely dominates U.S. small cap growth, but even non-technology areas were adversely impacted by the sudden deceleration in U.S. economic growth. At the same time, the U.S. dollar began to weaken against the Euro in December, which benefited Europe. Meanwhile, Japan's stock market remained weak because an economic recovery that appeared on track earlier in 2000 started to slip. As a result, the Japanese market for small caps, which did so well in 1999, gave back some of its gains in 2000. Emerging markets such as Latin America where liquidity was in short supply tended to move in line with the Nasdaq. While technology and communications were poor performers, health care, energy and financial services companies performed better throughout the world. Health care, particularly the pharmaceutical area, regained its status as a growth sector. Energy benefited from rising oil and natural gas prices and financial services stocks appreciated. Regardless of industry or geography, however, investors placed an increasing emphasis on profitability. FACTORS AFFECTING PERFORMANCE Dresdner RCM Global Investors LLC ("Dresdner RCM"), the investment manager of the Fund, generally searches for high-quality companies where profits are growing at least 15% per year. In addition to profitability, financial strength, market share and a strong management with stock ownership are other critical factors. Because of the Fund's global investment focus, companies must be reasonably valued not just within its geographical location, but also in comparison to other companies in the same industry throughout the world. Finally, it is very important for a company's management to communicate with the investment community, particularly in this challenging market environment. In a period of declining economic momentum, the Fund was very careful to avoid valuation risk. For example, a company expecting 50% growth in earnings that was valued at 75 times earnings was not as attractive in the most recent period as a company offering 20% growth selling at 30 times earnings. The reason: the risk of disappointing news was magnified during 2000. The Fund took advantage of its ability to shift to more promising markets, reducing its U.S. weighting from about 44% at mid-year to around 36% at year-end, ending with an underweight in Japan and an overweight in Europe. In doing so, the Fund also reduced its dependence on technology by lowering the sector's overall allocation in the Fund. Still, these asset allocations are residuals from a bottom-up stock process. The Fund continued to hold shares in Japan, despite the poor sentiment there. For example, Otsuka Kagu, a specialty furniture retailer, benefited from the continuing phase-out of large department stores in Japan. Furniture sales, which had been in decline for a decade, appear to have bottomed and Otsuka Kagu seems well positioned to benefit from a recovery. Another stock held during the year was Kose, a cosmetic and skin care company with a large Asia ex-Japan customer base. At year-end, technology represented about 11% of the Fund's investment in Japan. MORITEX, a manufacturer of fiber optic equipment and Star Micronics, the world's dominant supplier to Nokia for the mechanism that makes cell phones ring, both continued to perform relatively well during the fourth quarter considering the weak environment for technology and telecommunications stocks. Page 59 Dresdner RCM Global Small Cap Fund Management's Performance Review In Europe, the Fund's more successful performers during the year included Kaba, a Swiss manufacturer of security systems, H Lundbeck, a Danish drug company, and NH Hoteles, a Spanish chain of mid-priced hotels that is well-positioned for that country's business and tourism market in 2001. In North America, the portfolio was helped by its biotechnology investments including OSI Pharmaceuticals and Cell Therapeutics as well as energy investments such as Canadian-based Methanex, a beneficiary of higher natural gas prices. OUTLOOK Stocks that perform well in high-growth markets are likely to remain weak until there is a recovery. In the short run, Japan's market may stabilize temporarily as the country approaches its March 31 fiscal year end, but a major recovery, particular in small caps, is unlikely. As a result, the Fund will likely remain underweight in Japan. Europe will continue to benefit from a stronger Euro and the relative weakness of the U.S. economy, which is why Europe will likely receive an increasing proportion of the Fund's portfolio. In the current environment, it is especially important to rely on portfolio managers that have the breadth of resources and experience and the flexibility to invest anywhere opportunity presents itself. The Dresdner RCM portfolio management team is being very prudent when it comes to valuation risk. Unlike 1999 when a rising tide lifted all boats, the market in the year 2000 has made it clear that stocks can and will go down even when fundamentals remain strong. Regardless of the macroeconomic environment, Dresdner RCM believes that the Fund is well positioned to capitalize on the firm's research strength, which is to search out quality companies around the world. Page 60 Dresdner RCM Global Small Cap Fund Total Return Index Comparison(d) EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC $10,000 Investment (12/31/96 - 12/31/00)(f)(g)
MSCI WORLD SMALL CLASS I SHARES SALOMON EMI INDEX(A) CAP INDEX(B) 12/96 $10,000 $10,000 $10,000 1/97 $10,290 $10,021 $10,061 2/97 $10,010 $10,005 $10,043 3/97 $9,410 $9,665 $9,608 4/97 $9,320 $9,620 $9,402 5/97 $10,730 $10,370 $10,309 6/97 $11,750 $10,689 $10,627 7/97 $12,280 $10,978 $10,768 8/97 $12,320 $10,846 $10,491 9/97 $13,260 $11,313 $10,757 10/97 $12,440 $10,838 $10,193 11/97 $12,410 $10,645 $9,723 12/97 $12,548 $10,647 $9,431 1/98 $12,446 $10,711 $9,613 2/98 $13,827 $11,501 $10,449 3/98 $15,071 $11,980 $10,739 4/98 $15,705 $12,039 $10,810 5/98 $15,388 $11,799 $10,536 6/98 $15,784 $11,645 $10,270 7/98 $15,524 $11,152 $9,784 8/98 $12,197 $9,366 $8,160 9/98 $12,096 $9,589 $8,143 10/98 $12,707 $10,162 $8,717 11/98 $14,144 $10,599 $9,183 12/98 $14,968 $11,084 $9,376 1/99 $15,101 $11,023 $9,383 2/99 $14,049 $10,528 $8,960 3/99 $14,375 $10,756 $9,284 4/99 $15,065 $11,461 $9,990 5/99 $15,065 $11,393 $9,869 6/99 $17,134 $11,854 $10,413 7/99 $17,461 $11,868 $10,664 8/99 $18,018 $11,724 $10,704 9/99 $18,586 $11,553 $10,673 10/99 $19,736 $11,692 $10,538 11/99 $25,471 $12,212 $10,986 12/99 $30,630 $13,000 $11,756 1/00 $31,992 $12,725 $11,847 2/00 $39,014 $13,965 $13,278 3/00 $37,547 $13,956 $12,784 4/00 $32,752 $13,095 $11,867 5/00 $29,451 $12,687 $11,639 6/00 $35,281 $13,491 $12,495 7/00 $31,363 $13,087 $11,920 8/00 $34,848 $13,970 $12,737 9/00 $33,604 $13,431 $12,319 10/00 $29,411 $12,821 $11,728 11/00 $24,695 $11,788 $11,152 12/00 $26,379 $12,521 $11,564
PERFORMANCE(d) DECEMBER 31, 2000
CUMULATIVE SINCE SINCE GLOBAL SMALL CAP FUND 1 YEAR 3 YEARS INCEPTION INCEPTION Class I Average Annual Total Return(f) -13.88% 28.10% 27.44% 163.79% Class N Average Annual Total Return(e)(g) -13.84% 27.98% 27.28% 162.41% Salomon EMI Average Annual Total Return(a) -3.69% 5.55% 5.78% 25.21% MSCI World Small Cap Index Average Annual Total Return(b)(c) -1.60% 7.04% 3.70% 15.64%
The data above represents past performance of the Fund and may not indicate future performance. The investment return and principal value of an investment in the Fund will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. -------------------------------- (a) The Salomon Brothers Extended Market Index ("EMI") is a component of the Salomon Brothers Broad Market Index ("BMI") which includes listed shares of over 7,000 companies with a combined market capitalization currently in excess of $25 trillion. The BMI consists of two components: The Primary Market Index ("PMI") is the large capitalization stock component and the EMI is the small capitalization stock component. The PMI universe is defined as those stocks falling within the top 80% of the cumulative available capital level in each country. The EMI includes the bottom 20% of the cumulative available capital level in each country. (b) The Morgan Stanley Capital International (MSCI) World Small Cap Index is a market capitalization-weighted index composed of companies representative of the market structure of 22 developed market countries in North America, Europe, and the Asia/ Pacific Region. The Index is created by selecting companies within the market capitalization range of $200 - $800 million. The Index aims to represent 40% of the Small Cap universe within each country by capturing 40% of each industry. The Index is calculated without dividends, with net or with gross dividends reinvested, in both US dollars and local currencies. Page 61 Dresdner RCM Global Small Cap Fund Total Return Index Comparison (c) Effective May 1, 2000 the Fund's performance benchmark was changed from the Salomon EMI Index to the MSCI World Small Cap Index. The Fund's Board of Directors believes that the composition of the MSCI World Small Cap Index more accurately reflects the global small cap focus of the Fund and the market capitalization ranges of securities in which the Fund is most likely to invest. (d) Returns assume reinvestment of all dividends and capital gains distributions at net asset value. (e) Class N shares were first issued on March 10, 1999, and pay Rule 12b-1 fees. Class N returns through March 10, 1999 are based on Class I returns and reflect the deduction of Rule 12b-1 fees applicable to Class N shares. (f) Returns from January 1, 1998 through December 31, 1998 reflect the deduction of Rule 12b-1 fees. On December 31, 1998, all Fund shares were redesignated as Class I shares, which do not pay Rule 12b-1 fees. Performance results for periods after December 31, 1998 do not reflect the deduction of Rule 12b-1 fees. (g) The value of a $10,000 investment for Class N is $26,241 for the period from December 31, 1996 to December 31, 2000. The performance of the Class N shares is lower than Class I shares due to the effects of 12b-1 fees. Page 62 Dresdner RCM Global Small Cap Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) --------------------------------------------------------------------------------- EQUITY INVESTMENTS COMMERCIAL GOODS & SERVICES SECTOR 9.5% CAPITAL GOODS 6.2% 620 CH Kaba Holding AG (B Shares) $ 902,932 13,500 DK NEG Micon A/S * 798,121 6,700 DE Singulus Technologies AG 226,450 13,000 CA Stantec Inc. * 134,154 ----------- 2,061,657 ----------- COMMERCIAL SERVICES & SUPPLIES 3.3% 13,000 JP Pasona Softbank Inc. 136,602 13,800 SE Proffice AB (B Shares) 393,428 31,233 NL Vedior N.V. 376,801 6,500 US Waste Connections Inc. * 214,906 ----------- 1,121,737 ----------- CONSUMER DISCRETIONARY SECTOR 16.8% CONSUMER DURABLES & APPAREL 6.0% 40,000 FI Eimo Oyj 202,415 39,400 NL Head N.V. (NY Registered Shares) * 228,520 18,000 JP Star Micronics Co. Ltd. 200,175 32,000 US THQ Inc. * 780,000 15,400 US Vans Inc. * 260,838 20,000 JP Yokowo Co. Ltd. 322,242 ----------- 1,994,190 ----------- HOTELS, RESTAURANTS & LEISURE 4.0% 34,700 HU Danubius Hotel and Spa Rt. 537,694 65,000 ES NH Hoteles S.A. 799,428 ----------- 1,337,122 ----------- MEDIA 2.1% 34,000 JP Aoi Advertising Promotion Inc. 297,723 31,200 PT Impresa SGPS S.A. * 188,641 23,183 FR Studio Canal * 226,359 ----------- 712,723 ----------- RETAILING 4.7% 4,500 JP Aucnet Inc. 128,065 17,000 JP Belluna Co. Ltd. 442,863 2,800 CH Charles Voegele Holding AG 414,687 6,300 JP Homac Corp. 49,595
The accompanying notes are an integral part of the financial statements. Page 63 Dresdner RCM Global Small Cap Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) --------------------------------------------------------------------------------- EQUITY INVESTMENTS (CONTINUED) RETAILING (CONTINUED) 6,400 JP Otsuka Kagu Ltd. $ 375,482 2,000 JP Yamada Denki Co. Ltd. 163,047 ----------- 1,573,739 ----------- CONSUMER STAPLES SECTOR 4.1% FOOD, BEVERAGE & TOBACCO 3.2% 13,390 SK Hite Brewery Co. Ltd. 381,059 12,000 JP Medical Support Co. 140,805 12,694 FR Remy Cointreau S.A. 536,298 ----------- 1,058,162 ----------- HOUSEHOLD & PERSONAL PRODUCTS 0.9% 9,100 JP KOSE Corp. 305,193 ----------- ENERGY SECTOR 9.9% ENERGY 9.9% 24,500 NL Core Laboratories N.V. * 669,156 5,700 ES Grupo Auxiliar Metalurgico S.A. (Gamesa) * 136,997 5,600 NL IHC Caland N.V. 262,877 14,300 US Patterson Energy Inc. * 532,675 37,100 US Superior Energy Services Inc. * 426,650 42,500 NO TGS Nopec Geophysical Co. ASA * 506,037 14,200 US UTI Energy Corp. * 466,825 9,800 US Veritas DGC Inc. * 316,540 ----------- 3,317,757 ----------- FINANCIAL SECTOR 10.4% BANKS 1.1% 114 CH Bank Sarasin & Cie (B Shares) 365,814 ----------- DIVERSIFIED FINANCIALS 6.7% 5,400 US Choicepoint Inc. * 354,037 27,900 US IndyMac Bancorp Inc. 823,050 11,600 US Investment Technology Group Inc. * 484,300 6,600 NL Van der Moolen Holding N.V. 565,111 ----------- 2,226,498 -----------
The accompanying notes are an integral part of the financial statements. Page 64 Dresdner RCM Global Small Cap Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) --------------------------------------------------------------------------------- INSURANCE 2.6% 29,000 ES Corporacion Mapfre, Compania Internacional de Reaseguros, S.A. $ 552,699 4,500 BH Everest Re Group Ltd. 322,313 ----------- 875,012 ----------- HEALTH CARE SECTOR 11.9% HEALTH CARE EQUIPMENT & SUPPLIES 4.1% 2,600 US Charles River Laboratories International Inc. * 71,175 4,400 US Inhale Therapeutic Systems Inc. * 222,200 5,700 US Invitrogen Corp. * 492,337 3,500 JP Japan Medical Dynamic Marketing Inc. 98,074 6,700 US ORATEC Interventions Inc. * 31,825 23,400 SE Q-Med AB * 476,157 ----------- 1,391,768 ----------- PHARMACEUTICALS & BIOTECHNOLOGY 7.8% 19,700 US AVANT Immunotherapeutics Inc. * 135,438 5,200 UK Cambridge Antibody Technology Group PLC * 295,175 13,600 US Cell Genesys Inc. * 310,250 18,200 US Deltagen Inc. * 189,962 3,900 DK H Lundbeck A/S 382,645 10,000 US ICOS Corp. * 519,375 7,500 US ImmunoGen Inc. * 160,781 30,000 SE PyroSequencing AB (144A) * 308,409 8,400 US Titan Pharmaceuticals Inc. * 297,108 ----------- 2,599,143 ----------- MATERIALS SECTOR 5.2% MATERIALS 5.2% 107,000 CA Methanex Corp. * 688,813 40,800 US NS Group Inc. * 385,560 31,900 SE SAPA AB 466,555 4,800 JP Taiyo Ink Manufacturing Co. Ltd. 189,982 ----------- 1,730,910 ----------- TECHNOLOGY SECTOR 29.9% COMMUNICATIONS EQUIPMENT 6.0% 14,300 US Computer Network Technology Corp. * 412,019 9,500 US Ditech Communications Corp. * 152,594 6,700 FI Elcoteq Network (Class A) 210,724 10,500 IS Floware Wireless Systems Ltd. * 124,031 4,100 JP Moritex Corp. 175,201 13,500 FI Perlos Oyj 278,838
The accompanying notes are an integral part of the financial statements. Page 65 Dresdner RCM Global Small Cap Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) --------------------------------------------------------------------------------- EQUITY INVESTMENTS (CONTINUED) COMMUNICATIONS EQUIPMENT (CONTINUED) 12,600 DE Suess MicroTec AG * $ 363,756 9,300 US WatchGuard Technologies Inc. * 294,113 ----------- 2,011,276 ----------- COMPUTERS & PERIPHERALS 3.3% 2,400 CH Logitech International S.A. * 607,221 58,800 US Manufacturers' Services Ltd. * 389,550 12,000 JP Woodland Corp. 102,031 ----------- 1,098,802 ----------- INTERNET SOFTWARE & SERVICES 1.4% 50,100 IS MIND C.T.I. Ltd. * 335,044 3,300 AT Yline Internet Business Services AG * 123,928 ----------- 458,972 ----------- INFORMATION TECHNOLOGY CONSULTING & SERVICES 4.7% 4,600 JP ARGOTECHNOS 21 Corp. 84,588 45,700 IS BackWeb Technologies Ltd. * 308,475 20,417 NL Computer Services Solutions Holding N.V. 421,706 11,200 US InterCept Group Inc. * 298,900 47,085 NL Magnus Holding N.V. 274,075 73,000 AU Securenet Ltd. * 194,982 ----------- 1,582,726 ----------- SEMICONDUCTORS & INSTRUMENTS 7.5% 1,200 DE Aixtron AG 130,462 16,500 US Centillium Communications Inc. * 367,125 20,200 DE ELMOS Semiconductor AG (144A) 483,600 11,800 US Microchip Technology Inc. * 258,863 14,400 US Pixelworks Inc. * 322,200 12,400 FR Riber S.A. * 227,013 1,100 US Silicon Laboratories Inc. * 15,813 21,000 IS Tower Semiconductor Ltd. * 221,813 17,500 CA Tundra Semiconductor Corp. Ltd. * 495,170 ----------- 2,522,059 ----------- SOFTWARE 7.0% 29,000 US Actuate Corp. * 554,625 19,000 US AremisSoft Corp. * 811,063 6,800 US Art Technology Group Inc. * 207,825 21,000 US AvantGo Inc. * 131,250 35,900 US BindView Development Corp. * 337,684
The accompanying notes are an integral part of the financial statements. Page 66 Dresdner RCM Global Small Cap Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) --------------------------------------------------------------------------------- EQUITY INVESTMENTS (CONTINUED) SOFTWARE (CONTINUED) 5,600 US Documentum Inc. * $ 278,250 2,600 US Evolve Software Inc. * 12,675 ----------- 2,333,372 ----------- TELECOMMUNICATION SERVICES SECTOR 3.8% TELECOMMUNICATION SERVICES 3.8% 9,300 US AirGate PCS Inc. * 330,150 36,700 US Allied Riser Communications Corp. * 74,547 27,500 RU Mobile Telesystems (ADR) * 660,000 48,000 FI Tecnomen Oyj (144A) * 211,804 ----------- 1,276,501 ----------- TOTAL EQUITY INVESTMENTS (COST $37,923,857) 101.5% 33,955,133 ----------- TOTAL INVESTMENTS (COST $37,923,857)** 101.5% 33,955,133 OTHER ASSETS LESS LIABILITIES (1.5)% (511,212) ----------- NET ASSETS 100.0% $33,443,921 ===========
-------------------------------- * Non-income producing security ADR American Depositary Receipt 144A Security is purchased pursuant to Rule 144A of the Securities Act of 1933 and may be resold only to qualified institututional layers. Tax Information: ** For Federal income tax purposes, cost is $38,384,441 and gross aggregate unrealized appreciation (depreciation) for all securities is as follows: Unrealized appreciation $4,328,516 Unrealized depreciation (8,757,824) ---------- Net unrealized depreciation $(4,429,308) ==========
The accompanying notes are an integral part of the financial statements. Page 67 Dresdner RCM Global Small Cap Fund Portfolio of Investments December 31, 2000 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- The Fund's investments in securities at December 31, 2000 categorized by country (unaudited):
% OF NET ASSETS ------------------------------ COUNTRY SHORT-TERM COUNTRY CODE EQUITIES AND OTHER TOTAL ----------------------------------------------------------------------- Austria AT 0.4% 0.4% Australia AU 0.6% 0.6% Bermuda BH 1.0% 1.0% Canada CA 3.9% 3.9% Denmark DK 3.5% 3.5% Finland FI 2.7% 2.7% France FR 3.0% 3.0% Germany DE 3.6% 3.6% Hungary HU 1.6% 1.6% Israel IS 3.0% 3.0% Japan JP 9.6% 9.6% Netherlands NL 8.4% 8.4% Norway NO 1.5% 1.5% Portugal PT 0.6% 0.6% Russia RU 2.0% 2.0% South Korea SK 1.1% 1.1% Spain ES 4.4% 4.4% Sweden SE 4.9% 4.9% Switzerland CH 6.8% 6.8% United Kingdom UK 0.9% 0.9% United States US 38.0% (1.5)% 36.5% ------ ------ ----- Total 101.5% (1.5)% 100.0% ====== ====== =====
The accompanying notes are an integral part of the financial statements. Page 68 Dresdner RCM Global Technology Fund Management's Performance Review A bear market gripped the technology markets in 2000, causing the Nasdaq to decline 39.29%, the worst year in its history. The Dresdner RCM Global Technology Fund was able to limit losses by making decisive shifts from aggressive to conservative holdings. For the 12 months ended December 31, 2000, the Dresdner RCM Global Technology Fund returned -14.33% and -14.60% for the Class I and Class N shares, respectively. By comparison, the Lipper Science & Technology Fund Index returned -30.27% while the broad-based Standard & Poor's 500 Index returned -9.10%. Much of the year's damage took place in the fourth quarter, as the forecast for economic growth weakened and investor sentiment darkened. For the fourth quarter of 2000, the Dresdner RCM Global Technology Fund returned -34.45% and -34.54% for the Class I and Class N shares, respectively. By comparison, the Lipper Science & Technology Index returned -34.62% while the S&P 500 Index returned -7.82%. MARKET REVIEW Technology as a sector outperformed dramatically in 1998, 1999 and early 2000 in part because investors believed that the Internet ushered in a new era of unlimited growth. At its peak, the technology sector was valued at nearly three times the average company in the S&P 500 Index as a result of these grand investor expectations. However, the reality was that exponential growth rates were not sustainable, and the group was not impervious to external factors, such as the Federal Reserve Board's tightening monetary policy and ultimately, the slowing U.S. economy. Suddenly, companies without earnings lost their allure. Meanwhile, the glut of initial public offerings and disarray in the high yield debt market that financed many companies exacerbated the decline. The most notable collapse took place in the dotcom arena, where earnings expectations for many companies declined substantially; by mid-2000, it became clear that perhaps only a handful of viable Internet companies remained. Investors underestimated the ability of traditional Old Economy companies to ramp up their Internet expertise-and overestimated the ability of the new companies to establish a significant profitable business. For example, many retailers, after some false starts, finally put up adequate sites and the Internet became one of many sales channels for them. But companies that just had the Internet did not generate enough revenue to survive. Another bear market in technology took place in the late 1980s, when the personal computer industry consolidated down into just a few survivors. However, that took place over a period of 5-7 years, not a matter of months. In addition, technology was not as large a percentage of the economy or the stock market as it is today. The 1990s economic boom was led by capital spending, and technology was a disproportionate beneficiary. In today's slowdown, technology stocks are suffering a proportionate decline. FACTORS AFFECTING PERFORMANCE The primary reason why the Fund was able to limit losses and outperform the Lipper Science & Technology Fund Index throughout the year 2000 was a shift from aggressive to defensive stock picking and vice versa. The Fund began the year investing with a "pedal-to-the-metal" attitude in aggressive stocks with high growth rates that perform the best during rallies. By mid-March, the portfolio shifted to a defensive stance when the focus was on companies with lower growth and stable earnings. This lasted until early June, when the portfolio went on the offensive again until mid-August. For the balance of the year, the portfolio alternated between ultra-conservative and moderately aggressive. Dresdner RCM Global Investors LLC ("Dresdner RCM"), the investment manager of the Fund, was greatly aided in this effort by Grassroots-SM- Research. For example, the Fund de-emphasized the semiconductor sector in the fourth quarter because a Grassroots-SM- study indicated that semiconductor supply was stronger than previously thought. Throughout these shifts, two stocks consistently remained substantial holdings in the Fund -- Check Point Software Technologies and Tyco International. Check Point Software, which markets and supports Internet security, continued to advance its growth rate and Page 69 Dresdner RCM Global Technology Fund Management's Performance Review achieve a higher valuation. Tyco International, a conglomerate with holdings in electrical components, medical supplies and flow control products, proved to have a strong cash flow during its fiscal year 2000 and reported record earnings ending September 30, 2000. Both Check Point Software and Tyco International provided strong contributions to the Fund's performance during 2000. Other stocks that did relatively well include Applied Micro Circuits (integrated circuits for fiber optic networks), Siebel Systems (customer relations management software), BEA Systems (application servers) and Juniper Networks (high-end routers). At the end of 2000, Dresdner RCM became more positive on such stocks as eBay and Amdocs Limited. eBay, a leading Web-based, person-to-person trading community, in which buyers and sellers are brought together in an auction format, is an example of an Internet company that actually posts profits. Dresdner RCM believes that eBay is not vulnerable to competition from traditional retailers and now sells at a reasonable valuation. Dresdner RCM believes that Amdocs, which provides billing systems to telecommunications companies, is likely to increase revenues as telecom providers outsource their billing work to cut costs. OUTLOOK Although a slower U.S. economy will likely put pressure on technology stocks over the next quarter or two, Dresdner RCM believes that technology could resume its role as the leading growth sector by late 2001, once economic growth resumes. Including 2000, the Dresdner RCM Global Technology Fund Class I's average annualized returns over the past three and five years are 57.46% and 44.37%, respectively. The volatile experience of 2000 should remind investors that it is important to approach technology investing over a multi-year time horizon. Page 70 Dresdner RCM Global Technology Fund Total Return Index Comparison(c) EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC $10,000 Investment (12/27/95-12/31/00) (d)(f)
LIPPER SCIENCE S&P 500 & TECHNOLOGY CLASS I SHARES INDEX(A) FUND INDEX(B) 12/95 $10,000 $10,000 $10,000 12/95 $10,040 $9,952 $10,023 1/96 $10,370 $9,897 $10,364 2/96 $10,660 $10,314 $10,460 3/96 $10,620 $9,857 $10,561 4/96 $11,580 $10,840 $10,717 5/96 $11,930 $11,098 $10,993 6/96 $11,380 $10,332 $11,035 7/96 $10,270 $9,565 $10,547 8/96 $10,770 $10,055 $10,770 9/96 $11,870 $10,987 $11,376 10/96 $11,700 $10,822 $11,690 11/96 $12,770 $11,837 $12,573 12/96 $12,692 $11,626 $12,324 1/97 $13,689 $12,542 $13,095 2/97 $12,359 $11,408 $13,197 3/97 $11,564 $10,549 $12,654 4/97 $11,715 $11,007 $13,410 5/97 $13,447 $12,317 $14,226 6/97 $13,860 $12,432 $14,864 7/97 $15,694 $14,157 $16,047 8/97 $15,764 $14,245 $15,148 9/97 $17,094 $14,849 $15,978 10/97 $15,986 $13,279 $15,445 11/97 $15,754 $13,166 $16,160 12/97 $16,129 $12,537 $12,578 1/98 $15,976 $12,759 $12,801 2/98 $17,837 $14,277 $14,324 3/98 $18,838 $14,394 $14,442 4/98 $20,452 $15,012 $15,061 5/98 $19,227 $13,911 $13,957 6/98 $21,065 $14,727 $14,775 7/98 $20,441 $14,588 $14,636 8/98 $17,095 $11,850 $11,889 9/98 $17,790 $13,248 $13,292 10/98 $19,463 $14,259 $14,306 11/98 $22,055 $15,858 $15,910 12/98 $25,891 $18,423 $18,484 1/99 $29,859 $22,018 $20,877 2/99 $26,956 $21,333 $18,698 3/99 $30,210 $22,186 $20,603 4/99 $31,807 $23,045 $20,861 5/99 $30,634 $22,501 $20,831 6/99 $34,166 $23,750 $23,538 7/99 $34,765 $23,009 $23,530 8/99 $37,103 $22,894 $24,825 9/99 $40,043 $22,267 $25,162 10/99 $46,141 $23,676 $27,812 11/99 $56,565 $24,157 $31,936 12/99 $73,499 $25,580 $39,408 1/00 $74,939 $24,296 $38,994 2/00 $103,453 $23,836 $49,499 3/00 $93,187 $26,168 $47,994 4/00 $82,896 $25,380 $42,393 5/00 $74,766 $24,860 $37,277 6/00 $86,670 $25,470 $43,068 7/00 $84,870 $25,074 $40,657 8/00 $101,926 $26,631 $46,824 9/00 $96,055 $25,225 $42,025 10/00 $84,249 $25,119 $37,415 11/00 $69,167 $23,140 $27,769 12/00 $62,966 $23,251 $27,568
PERFORMANCE(c) DECEMBER 31, 2000
CUMULATIVE SINCE SINCE GLOBAL TECHNOLOGY FUND 1 YEAR 3 YEARS 5 YEARS INCEPTION INCEPTION Class I Average Annual Total Return(d) -14.33% 57.46% 44.37% 44.37% 529.66% Class N Average Annual Total Return(e)(f) -14.60% 57.09% 44.02% 43.70% 515.04% Lipper Science & Technology Fund Index Average Annual Total Return(b) -30.27% 29.90% 22.54% 22.43% 175.68% S&P 500 Index Average Annual Total Return(a) -9.10% 12.26% 18.33% 18.34% 132.51%
The recent strong equity market performance has been especially favorable to technology and technology-related stocks and has helped the Fund. This performance may not be sustainable and as a result, the Fund may not continue achieving the same level of performance as in the past. In addition, market volatility can dramatically affect the Fund's short-term returns and pursuing these levels of return involves accepting increased risk of volatility of return. The data above represents past performance of the Fund and may not indicate future performance. The investment return and principal value of an investment in the Fund will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. -------------------------------- (a) The Standard & Poor's 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing major industries. (b) The Lipper Science & Technology Fund Index is an equally weighted index of the 30 largest U.S. science and technology mutual funds. (c) Returns assume reinvestment of all dividends and capital gains distributions at net asset value. (d) Class I shares commenced operations on December 27, 1995. (e) Class N shares were first issued on January 30, 1999, and pay Rule 12b-1 fees. Class N returns through January 30, 1999 are based on Class I returns and reflect the deduction of Rule 12b-1 fees applicable to Class N shares. (f) The value of a $10,000 investment for Class N is $61,504 for the period from December 27, 1995 to December 31, 2000. The performance of the Class N shares is lower than Class I shares due to the effects of 12b-1 fees. Page 71 Dresdner RCM Global Technology Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) ----------------------------------------------------------------------------------- EQUITY INVESTMENTS COMMERCIAL GOODS & SERVICES SECTOR 4.0% CAPITAL GOODS 4.0% 440,000 US Lockheed Martin Corp. $ 14,938,000 271,000 BH Tyco International Ltd. 15,040,500 ------------ 29,978,500 ------------ CONSUMER DISCRETIONARY SECTOR 1.1% CONSUMER DURABLES & APPAREL 1.1% 190,000 US Electronic Arts Inc. * 8,098,750 ------------ HEALTH CARE SECTOR 3.7% HEALTH CARE EQUIPMENT & SUPPLIES 0.7% 60,000 US Waters Corp. * 5,010,000 ------------ PHARMACEUTICALS & BIOTECHNOLOGY 3.0% 491,000 US Pfizer Inc. * 22,586,000 ------------ TECHNOLOGY SECTOR 66.5% COMMUNICATIONS EQUIPMENT 17.4% 92,500 US Avici Systems Inc. * 2,277,813 80,000 US Brocade Communications Systems Inc. * 7,345,000 143,000 US CIENA Corp. * 11,636,625 80,000 US Comverse Technology Inc. * 8,690,000 6,400 US Cosine Communications Inc. * 88,800 112,000 US Extreme Networks Inc. * 4,382,000 213,500 JP Furukawa Electric Co. Ltd. 3,729,706 105,000 US Juniper Networks Inc. * 13,236,562 590,000 FI Nokia Oyj (ADR) 25,665,000 179,100 US Palm Inc. * 5,070,769 197,700 US Polycom Inc. * 6,363,469 243,000 US QUALCOMM Inc. * 19,971,562 97,500 US SDL Inc. * 14,448,281 186,000 US Sycamore Networks Inc. * 6,928,500 ------------ 129,834,087 ------------ COMPUTERS & PERIPHERALS 6.0% 700,000 US Compaq Computer Corp. 10,535,000 217,000 US EMC Corp. * 14,430,500 225,000 US Lexmark International Inc. (Class A) * 9,970,313 150,000 US Network Appliance Inc. * 9,635,156 ------------ 44,570,969 ------------
The accompanying notes are an integral part of the financial statements. Page 72 Dresdner RCM Global Technology Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) ----------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES 4.6% 168,100 US Amazon.com Inc. * $ 2,616,056 205,000 US America Online Inc. * 7,134,000 735,000 US eBay Inc. * 24,255,000 ------------ 34,005,056 ------------ INFORMATION TECHNOLOGY CONSULTING & SERVICES 0.7% 27,000 JP Itochu Techno-Science Corp. 5,009,894 ------------ SEMICONDUCTORS & INSTRUMENTS 7.8% 172,000 US Applied Micro Circuits Corp. * 12,908,062 180,800 US Maxim Integrated Products Inc. * 8,644,500 210,500 US Micron Technology Inc. * 7,472,750 28,200 US MIPS Technologies Inc. (Class A) * 752,588 86,000 US QLogic Corp. * 6,622,000 172,000 FR STMicroelectronics N.V. (N.Y. Registered Shares) 7,363,750 307,000 US Xilinx Inc. * 14,160,375 ------------ 57,924,025 ------------ SOFTWARE 30.0% 419,200 UK Amdocs Ltd. * 27,772,000 177,000 US BEA Systems Inc. * 11,914,312 259,000 IS Check Point Software Technologies Ltd. * 34,592,687 500,000 US Commerce One Inc. * 12,656,250 133,000 US Documentum Inc. * 6,608,438 2,314,500 FR Gemplus International S.A. * 20,643,139 275,000 US I2 Technologies Inc. * 14,953,125 64,200 IN Infosys Technologies Ltd. (ADR) 5,922,450 541,000 US Intuit * 21,335,687 93,700 US Micromuse Inc. * 5,655,673 420,000 US Siebel Systems Inc. * 28,402,500 98,200 US TIBCO Software Inc. * 4,707,463 228,250 US VERITAS Software Corp. * 19,971,875 95,000 US webMethods Inc. * 8,449,063 ------------ 223,584,662 ------------ TELECOMMUNICATION SERVICES SECTOR 1.4% TELECOMMUNICATION SERVICES 1.4% 435,000 US AT&T Wireless Group * 7,530,937 188,800 BH Global Crossing Ltd. * 2,702,200 25,500 BH TyCom Ltd. * 570,563 ------------ 10,803,700 ------------ TOTAL EQUITY INVESTMENTS (COST $542,142,893) 76.7% 571,405,643 ------------
The accompanying notes are an integral part of the financial statements. Page 73 Dresdner RCM Global Technology Fund Portfolio of Investments December 31, 2000
FACE % OF MARKET VALUE AMOUNT COUNTRY NET ASSETS (NOTE 1) ----------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS COMMERCIAL PAPER 9.5% $30,000,000 US American General Finance Corp., 6.540%, maturing 01/02/01 $ 29,994,550 11,000,000 US Ford Motor Credit Co., 6.540%, maturing 01/02/01 10,998,002 30,000,000 US Prudential Funding Corp., 6.350%, maturing 01/02/01 29,994,708 ------------ 70,987,260 ------------ SHARES ----------- MONEY MARKET FUNDS 7.7% 27,271,873 US SSgA Money Market Fund 27,271,873 29,588,930 US SSgA U.S. Government Money Market Fund 29,588,930 ------------ 56,860,803 ------------ TOTAL SHORT-TERM INVESTMENTS (COST $127,848,063) 17.2% 127,848,063 ------------ TOTAL INVESTMENTS (COST $669,990,956)** 93.9% 699,253,706 OTHER ASSETS LESS LIABILITIES 6.1% 45,141,860 ------------ NET ASSETS 100.0% $744,395,566 ============
-------------------------------- * Non-income producing security ADR American Depositary Receipt Tax Information: ** For Federal income tax purposes, cost is $718,511,113 and gross aggregate unrealized appreciation (depreciation) for all securities is as follows:
Unrealized appreciation $ 7,890,422 Unrealized depreciation (27,147,829) ----------- Net unrealized depreciation $(19,257,407) ===========
NUMBER OF MARKET CONTRACTS COUNTRY VALUE --------------------------------------------------------------------------- WRITTEN CALL OPTION (PREMIUM RECEIVED $644,050) Pfizer Inc., Strike price $45, 2,945 US Expiration date 01/20/01 $(36,981) ========
The accompanying notes are an integral part of the financial statements. Page 74 Dresdner RCM Global Technology Fund Portfolio of Investments December 31, 2000 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- The Fund's investments in securities at December 31, 2000 categorized by country (unaudited):
% OF NET ASSETS ------------------------------ COUNTRY SHORT-TERM COUNTRY CODE EQUITIES AND OTHER TOTAL ----------------------------------------------------------------------- Bermuda BH 2.5% 2.5% Finland FI 3.4% 3.4% France FR 3.8% 3.8% India IN 0.8% 0.8% Israel IS 4.6% 4.6% Japan JP 1.2% 1.2% United Kingdom UK 3.7% 3.7% United States US 56.7% 23.3% 80.0% ------ ------- ----- Total 76.7% 23.3% 100.0% ====== ======= =====
The accompanying notes are an integral part of the financial statements. Page 75 Dresdner RCM Global Health Care Fund Management's Performance Review The health care sector was one of the few bright spots in an otherwise dreary stock market environment in 2000. Particularly strong were pharmaceuticals, hospital management and biotechnology stocks, propelling the Dresdner RCM Global Health Care Fund to perform significantly above its benchmarks. For the 12 months ended December 31, 2000, the Fund achieved a total return of 73.37%, compared to the Russell Midcap-Healthcare Index which returned 27.40% and the Standard & Poor's 500 Index which returned -9.10%. For the fourth quarter, the Fund returned -5.49%, compared to -0.55% for the Russell Midcap-Healthcare Index and -7.82% for the S&P 500. MARKET REVIEW Because 2000 was an election year, the large-cap pharmaceutical stocks were heavily influenced by politics. When it appeared that the Democrats would be gaining congressional seats, earnings for pharmaceutical companies, such as Intermune Pharmaceuticals, declined because of the view that the Democratic legislative agenda included stringent price controls on the industry. However, with probability of a Democratic sweep of Congress and the presidency diminishing by early October, such pharmaceutical stocks rebounded and performed very well for the year. In the midst of a record federal budget surplus in 2000, the environment surrounding Medicare reimbursement and hospital management companies seemed to become more relaxed. Macroeconomic trends were less germane to medical equipment companies, whose stocks performed in line with individual results. Meanwhile, a groundbreaking announcement by Celera Genomics and the National Institute of Health's Human Genome Project mentioned they had deciphered the genetic code for human life, propelling the biotechnology sector. Driven by positive news flow, biotech stocks, such as Cell Therapeutics and Genentech Inc., generally surged in the first and third quarters, but pulled back in the second and fourth quarters as investors took profits and reassessed risks. The general swoon in technology stocks was also a factor in shifting investment funds toward health care. However, investor interest in e-health companies waned along with the rest of the dotcom industry. FACTORS AFFECTING PERFORMANCE After a difficult 1999, pharmaceutical stocks performed very well in 2000, buoyed by an improving political climate and the sell-off in technology. In addition, the bear market in technology made the pharmaceutical industry comparatively attractive as a defensive investment. As a result, the Fund aggressively shifted into these stocks and was amply rewarded. In addition to these external factors, companies such as Pharmacia (up 70%), Merck (up 40%), Pfizer (up 40%) and Schering-Plough (up 34%) also demonstrated strong fundamentals during 2000. Pharmacia, in addition to having many new products in its pipeline, generated strong investor expectations due to its recent acquisition of Monsanto and related restructuring. Although Merck was out of favor on Wall Street early in 2000, Dresdner RCM Global Investors LLC ("Dresdner RCM"), the investment manager of the Fund, believed that the company was going to deliver good earnings growth in subsequent quarters -- and it did. Pfizer and Schering-Plough also outperformed profit forecasts. In addition, the Fund searched for stocks selling at compelling valuations. An example is Waters Corp., a company which supplies the biotechnology industry with analytical instruments. At the beginning of 2000, the company was generating 20-25% growth in earnings; meanwhile, the stock was selling at a "PEG" ratio of 1, meaning that its price-earnings multiple equaled its growth rate. Although the Fund took some profits on Waters Corp. mid-way through the year due to concerns about the impact of the weak Euro, Dresdner RCM believes that the company's analytical instrument products have clear advantages in the marketplace. The strategy in medical products is less focused on environmental factors and more on individual stock selection. For example, CYTYC Corp., a diagnostic company, and Stryker, a large orthopedic product manufacturer, posted decent earnings at year-end. Dresdner RCM's Grassroots-SM- Research was instrumental in the Page 76 Dresdner RCM Global Health Care Fund Management's Performance Review Fund's successful investment in CYTYC, which produces a test for cervical cancer. The stock fell in price on the perception that laboratories were converting to a cheaper but lower quality test. However, Grassroots-SM- polled a large number of labs and did not find one major lab that was actually making the switch. As a result, the Fund held its ground in CYTYC, and the stock ultimately rebounded. In hospital management, the Fund purchased WellPoint Health Networks, a managed health care company, late in the fourth quarter, and the stock has performed well. In retrospect, the portfolio management team's decision to underweight the health care services area was a mistake that is in the process of being rectified. The one major problem area for the Fund was its brief foray into the e-health area in such companies as MedicaLogic Inc., SciQuest.com and Ventro Corp. These stocks did well early in the year and then essentially collapsed along with the rest of the dotcoms. Even given the difficult year for the stock market as a whole, the portfolio management team still strongly believes that it is important to manage the Fund with an eye towards tax efficiency and that shareholders receive minimal taxable distributions. OUTLOOK With the inverse correlation between the performance of technology and large-cap pharmaceuticals demonstrated in 2000, the Fund's weighting in drug stocks will likely be reduced once there is a turnaround in economic factors that favor technology. However, the outlook for the pharmaceutical industry would be enhanced significantly if the Republicans could quickly pass Medicare legislation early in the 107th Congress. The Republican proposal limits benefits to those under the poverty level, whereas the Democratic proposal provides Medicare drug benefits to all seniors without a means test. The investment community generally believes that the latter would restrict pricing flexibility of the pharmaceutical companies. Meanwhile, the outlook for biotechnology remains strong. Many new product approvals are expected in 2001, suggesting that the business model for most biotechnology companies remains intact. In addition, biotechnology is not generally subject to macroeconomic influences such as a slowing U.S. economy. Similarly, hospital management and medical equipment companies tend not to be cyclical. The Fund continues to benefit from the dual qualifications of its portfolio management team who both hold medical degrees. This often gives the portfolio managers the "upper-hand" when identifying promising companies ahead of the rest of Wall Street. Page 77 Dresdner RCM Global Health Care Fund Total Return Index Comparison(c) EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC $10,000 Investment (12/31/96-12/31/00) (d)
RUSSELL MIDCAP CLASS N SHARES S&P 500 INDEX(A) HEALTH CARE INDEX(B) 12/96 $10,000 $10,000 $10,000 1/97 $10,700 $10,625 $10,353 2/97 $10,650 $10,708 $10,552 3/97 $9,910 $10,268 $9,637 4/97 $10,050 $10,881 $9,786 5/97 $11,140 $11,544 $10,712 6/97 $11,660 $12,061 $11,201 7/97 $11,990 $13,021 $11,904 8/97 $11,790 $12,292 $11,739 9/97 $13,110 $12,965 $12,373 10/97 $12,910 $12,532 $11,644 11/97 $13,110 $13,113 $11,886 12/97 $13,000 $13,338 $11,920 1/98 $13,189 $13,486 $11,938 2/98 $14,060 $14,458 $13,012 3/98 $14,584 $15,199 $13,725 4/98 $14,897 $15,352 $14,044 5/98 $14,261 $15,088 $13,805 6/98 $14,295 $15,701 $14,337 7/98 $14,216 $15,533 $13,961 8/98 $12,241 $13,287 $11,459 9/98 $13,659 $14,139 $13,170 10/98 $14,004 $15,288 $13,869 11/98 $15,109 $16,215 $14,571 12/98 $16,324 $17,148 $15,903 1/99 $16,482 $17,865 $15,117 2/99 $16,056 $17,310 $14,398 3/99 $15,813 $18,002 $14,287 4/99 $15,059 $18,699 $13,244 5/99 $14,937 $18,257 $13,466 6/99 $15,874 $19,271 $13,772 7/99 $15,777 $18,670 $13,446 8/99 $16,117 $18,577 $13,300 9/99 $15,071 $18,068 $11,845 10/99 $16,056 $19,211 $11,925 11/99 $17,334 $19,601 $12,625 12/99 $21,013 $20,756 $14,185 1/00 $24,184 $19,714 $14,290 2/00 $34,536 $19,341 $14,395 3/00 $26,042 $21,233 $14,071 4/00 $25,614 $20,594 $13,903 5/00 $25,231 $20,171 $14,171 6/00 $32,442 $20,668 $16,124 7/00 $31,911 $20,345 $15,438 8/00 $36,807 $21,609 $17,558 9/00 $38,547 $20,468 $18,173 10/00 $36,409 $20,382 $18,204 11/00 $33,902 $18,776 $17,244 12/00 $36,431 $18,867 $17,529
PERFORMANCE(c) DECEMBER 31, 2000
CUMULATIVE SINCE SINCE GLOBAL HEALTH CARE FUND 1 YEAR 3 YEARS INCEPTION INCEPTION Class N Average Annual Total Return(d) 73.37% 40.99% 38.16% 264.31% S&P 500 Index Average Annual Total Return(a) -9.10% 12.26% 17.20% 88.67% Russell Midcap Health Care Index Average Annual Total Return(b) 27.40% 13.72% 15.06% 75.29%
The data above represents past performance of the Fund and may not indicate future performance. The investment return and principal value of an investment in the Fund will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. -------------------------------- (a) The Standard & Poor's 500 Index is a capitalization-weighted index of 500 stocks that attempts to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing major industries. (b) The Russell Midcap Health Care Index is composed of all medium and medium/small health care companies in the Russell 1000 Index. The Russell 1000 Index measures the performance of the 1,000 largest companies in the Russell 3000 Index, which represents approximately 90% of the total market capitalization of the Russell 3000 Index. (c) Returns assume reinvestment of all dividends and capital gains distributions at net asset value. (d) Class N shares commenced operations on December 31, 1996. Page 78 Dresdner RCM Global Health Care Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) ------------------------------------------------------------------------------ EQUITY INVESTMENTS COMMERCIAL GOODS & SERVICES SECTOR 2.2% CAPITAL GOODS 2.2% 99,841 BH Tyco International Ltd. $ 5,541,201 ------------ HEALTH CARE SECTOR 90.4% HEALTH CARE EQUIPMENT & SUPPLIES 18.2% 85,000 US Applera Corp. - Applied Biosystems Group * 7,995,312 104,700 US Charles River Laboratories International Inc. * 2,866,163 116,000 US Ciphergen Biosystems Inc. * 1,537,000 81,000 US Cytyc Corp. * 5,067,562 2 DE Fresenius Medical Care AG (ADR) 32 36,666 DE Fresenius Medical Care AG (Non-Voting Preferred Shares) 1,755,612 70,000 US Inhale Therapeutic Systems Inc. * 3,535,000 50,000 US Invitrogen Corp. * 4,318,750 45,000 US Molecular Devices Corp. * 3,079,688 14,500 US ORATEC Interventions Inc. * 72,700 195,900 US Rita Medical Systems Inc. * 1,665,150 65,800 US St. Jude Medical Inc. * 4,042,588 40,000 US Stryker Corp. 2,023,600 105,500 US Waters Corp. * 8,809,250 ------------ 46,768,407 ------------ HEALTH CARE PROVIDERS & SERVICES 6.2% 65,200 US E.Medsoft.com * 31,948 55,000 US HCA-The Healthcare Co. 2,420,550 97,800 US Health Management Associates Inc. (Class A) * 2,029,350 155,000 US IMS Health Inc. 4,185,000 105,000 US McKesson HBOC Inc. 3,768,450 31,000 US Wellpoint Health Networks Inc. * 3,572,750 ------------ 16,008,048 ------------ PHARMACEUTICALS & BIOTECHNOLOGY 66.0% 104,100 US 3 Dimensional Pharmaceuticals Inc. * 1,541,981 101,000 US Abbott Laboratories 4,892,187 117,300 US Adolor Corp. * 2,580,600 146,000 US Alkermes Inc. * 4,580,750 123,000 US ALZA Corp. * 5,227,500 85,000 US American Home Products Corp. 5,401,750 96,000 US Amgen Inc. * 6,138,000 64,700 US Andrx Group * 3,744,512 175,000 US Applied Molecular Evolution * 2,985,938 69,500 UK AstraZeneca Group PLC (ADR) 3,579,250 200,000 US AVANT Immunotherapeutics Inc. * 1,375,000 38,800 US Biogen Inc. * 2,330,425 32,500 UK Cambridge Antibody Technology Group PLC * 1,844,842 55,000 US Cell Therapeutics Inc. * 2,478,438 80,000 UK Celltech Group PLC * 1,413,732
The accompanying notes are an integral part of the financial statements. Page 79 Dresdner RCM Global Health Care Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) ------------------------------------------------------------------------------ EQUITY INVESTMENTS (CONTINUED) PHARMACEUTICALS & BIOTECHNOLOGY (CONTINUED) 86,300 US Cephalon Inc. * $ 5,463,869 95,000 US COR Therapeutics Inc. * 3,342,813 126,100 US Deltagen Inc. * 1,316,169 43,800 US Eli Lilly & Co. 4,076,137 47,500 US Genentech Inc. * 3,871,250 136,000 UK GlaxoSmithKline PLC (ADR) 7,616,000 42,300 US Human Genome Sciences Inc. * 2,931,919 104,500 US ICOS Corp. * 5,427,469 19,000 US IDEC Pharmaceuticals Corp. * 3,601,687 117,700 US Immunomedics Inc. * 2,530,550 43,000 US Intermune Pharmaceuticals Inc. * 1,918,875 68,500 US Johnson & Johnson 7,196,781 68,000 US King Pharmaceuticals Inc. * 3,514,750 72,700 US Medarex Inc. * 2,962,525 100,000 US MedImmune Inc. * 4,768,750 74,000 US Merck & Co. Inc. 6,928,250 55,300 US Millennium Pharmaceuticals Inc. * 3,421,687 38,000 US NeoPharm Inc. * 1,439,250 188,600 US Pain Therapeutics Inc. * 2,805,425 250,000 US Pfizer Inc. 11,500,000 115,000 US Pharmacia Corp. 7,015,000 75,000 US PRAECIS Pharmaceuticals Inc. * 2,193,750 27,000 US Protein Design Labs Inc. * 2,345,625 159,700 SE PyroSequencing AB (144A) * 1,641,762 150,600 US Rosetta Inpharmatics Inc. * 2,409,600 128,500 US Schering-Plough Corp. 7,292,375 215,500 CH Serono S.A. (ADR) * 5,158,531 38,700 IS Teva Pharmaceutical Industries Ltd. (ADR) 2,834,775 53,000 US Titan Pharmaceuticals Inc. * 1,874,610 ------------ 169,515,089 ------------ TOTAL EQUITY INVESTMENTS (COST $225,705,676) 92.6% 237,832,745 ------------
The accompanying notes are an integral part of the financial statements. Page 80 Dresdner RCM Global Health Care Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) ------------------------------------------------------------------------------ SHORT-TERM INVESTMENTS MONEY MARKET FUNDS 5.2% 7,590,119 US SSgA Money Market Fund $ 7,590,119 5,811,451 US SSgA U.S. Government Money Market Fund 5,811,451 ------------ TOTAL SHORT-TERM INVESTMENTS (COST $13,401,570) 5.2% 13,401,570 ------------ TOTAL INVESTMENTS (COST $239,107,246)** 97.8% 251,234,315 OTHER ASSETS LESS LIABILITIES 2.2% 5,674,316 ------------ NET ASSETS 100.0% $256,908,631 ============
------------------------------------ * Non-income producing security ADR American Depositary Receipt 144A Security is purchased pursuant to Rule 144A of the Securities Act of 1933 and may be resold only to qualified institutional buyers. Tax Information: ** For Federal income tax purposes, cost is $240,127,533 and gross aggregate unrealized appreciation (depreciation) for all securities is as follows: Unrealized appreciation $ 21,730,365 Unrealized depreciation (10,623,583) ------------ Net unrealized appreciation $ 11,106,782 ============
-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- The Fund's investments in securities at December 31, 2000 categorized by country (unaudited):
% OF NET ASSETS --------------------------------- COUNTRY SHORT-TERM COUNTRY CODE EQUITIES AND OTHER TOTAL -------------------------------------------------------------------------- Bermuda BH 2.2% 2.2% Germany DE 0.7% 0.7% Israel IS 1.1% 1.1% Sweden SE 0.6% 0.6% Switzerland CH 2.0% 2.0% United Kingdom UK 5.6% 5.6% United States US 80.4% 7.4% 87.8% ------- ------- ------ Total 92.6% 7.4% 100.0% ======= ======= ======
The accompanying notes are an integral part of the financial statements. Page 81 Dresdner RCM International Growth Equity Fund Management's Performance Review As the global economy softened throughout 2000, the growth-oriented style of Dresdner RCM's International Growth Equity Fund lost favor, with slowing growth hammering the types of stocks in which the Fund invests. As a result, the Dresdner RCM International Growth Equity Fund underperformed its benchmarks. For the 12 months ended December 31, 2000, the Dresdner RCM International Growth Equity Fund produced total returns of -26.76% and -26.95% for the Class I and Class N shares, respectively. In comparison, the Morgan Stanley Capital International ("MSCI") Europe Australasia Far East ("EAFE") Index, the Fund's primary benchmark, returned -13.95% and the MSCI All Country World Free Ex-U.S. Index ("ACWI") returned -15.09%. For the fourth quarter of 2000, the Fund produced total returns of -6.08% and -6.17% for the Class I and Class N shares, respectively. In comparison, the MSCI EAFE Index returned -2.62% and the MSCI ACWI returned -4.36%. On December 18, 2000, shareholders of the Fund approved its reorganization from a series of Dresdner RCM Capital Funds, Inc. to a newly created series of Dresdner RCM Global Funds, Inc. The reorganization transaction became effective on December 29, 2000. MARKET REVIEW During the first quarter 2000, the international equity markets oscillated, with investors continuing to fuel New Economy stocks. However, volatility picked up in the second quarter 2000 and continued throughout the year, as investors rotated out of high growth New Economy stocks and into less vulnerable stocks in the Old Economy, thus causing severe downward pressure on the growth style overall. The contrast between the first and final quarters of 2000 was marked. The year began with continued strength and momentum in the New Economy sectors. Technology, telecommunications and media were up 6.0%, 8.8% and 25.8% respectively, in the first quarter. Conversely, by year-end, the international equity markets experienced a violent sector reversal as investors rotated out of these formerly stellar sectors. Technology plummeted by 20.1% and telecommunications lost 12.1%. By the fourth quarter, investors favored the more defensive sectors such as consumer staples, up 9.9% and utilities, up 8.1%. The market euphoria of 1999 was quelled by tighter monetary policy of the European Central Bank. Even Japan, which had historically high unemployment figures and maintained a benign monetary policy during the first half of 2000, raised interest rates in the third quarter, a first since 1990. Whether the increase in rates was to control inflation (a result of higher oil prices and a weak Euro) as it was with the European Central Bank, or like the Bank of Japan, intended to sustain a rebound in the economy, the outcome was the same -- a weaker global economy with growth stocks under-performing as a result. The economic slowdown was apparent in the major regions: European GDP growth slowed to a 2.8% annualized rate in the third quarter; Japanese economic growth decreased to a 1% annualized rate, after beginning the year with a remarkable 10% recovery in GDP. By the third quarter, the crisis in the Euro hurt that region's returns, with the Euro depreciating 7.9% against the U.S. dollar for the period. FACTORS AFFECTING PERFORMANCE In the first quarter 2000, Dresdner RCM Global Investors LLC ("Dresdner RCM"), the investment manager of the Fund, continued to overweight the technology and telecommunications sectors based upon the convictions of the Fund's portfolio managers that those sectors offered superior growth characteristics. Dresdner RCM trimmed technology positions throughout the first quarter as those stocks had appreciated, and the portfolio managers did not want to increase the Fund's total exposure to that sector. As market sentiment toward high growth technology stocks changed, rather than attempt to time a sector rotation, Dresdner RCM did not alter this strategy in the second quarter. This decision took into consideration that many companies in sectors outside the U.S. lagged their counterparts here. With tightening monetary policy continuing worldwide, these sectors lost favor to Old Economy stocks and that strategy hurt performance. Page 82 Dresdner RCM International Growth Equity Fund Management's Performance Review An effective plan of overweighting the communications equipment industry and underweighting the automotive industry offset this sub-optimal sector selection in the second quarter. However, positions in the telecommunication services and internet software and service and IT consulting along with the underweights to the pharmaceutical and biotechnology industries negatively impacted the Fund's portfolio during the same period; these sectors felt the effects of rising interest rates. During the second quarter, Dresdner RCM increased the Fund's weight to the consumer staples sector. The rationale was based upon Dresdner RCM's belief that these companies should grow as they become more efficient. Furthermore, in the volatile equity market environment, the visible earnings of consumer staples make them attractive. During the third quarter, despite the overweight in telecommunications services and communications equipment dampening performance, Dresdner RCM's conviction in maintaining telecommunications holdings strengthened. The race for service providers to offer faster data and Internet communications over mobile phones was in progress. Dresdner RCM believed that manufacturers of this technology were poised to gain from an investment boom on behalf of service providers, and this would translate into both higher infrastructure spending and increased demand for more sophisticated cellular handsets. This theme has yet to fully play out. In the fourth quarter, Nokia and Vodafone, in particular, positively impacted the Fund's performance. After the first half of 2000, defensive-oriented sectors such as utilities and finance rebounded and excelled. In the fourth quarter, the Fund began increasing the size of its European financial position, based upon a possible plateau of European interest rates, a growing equity culture in many of these countries, as well as the prospect of significant pension reform in the region. Policymakers are introducing tax-advantaged savings plans similar to 401(k) plans in the U.S. Firms with asset management capabilities will be the greatest beneficiaries of this expected boom in savings. Furthermore, those banks with asset management capabilities should be able to leverage their distribution channels for growth in this area (UBS in Switzerland, Deutsche Bank in Germany and UniCredito Italiano in Italy). By year-end, the Fund's overweight in financials along with the underweight in the telecommunications sector helped to offset the negative effects of the market shift away from the growth style, the Fund's philosophy. OUTLOOK Dresdner RCM expects the market environment to remain relatively negative in the short-term as the prospects for a hard global economic landing continue to mount. Central banks may begin to ease monetary policy in the new year. However, a move toward easing globally may not be enough to avert a major economic slowdown. It would not be surprising, therefore, to see companies continue to pre-announce lower than expected earnings growth figures. Within that context, Dresdner RCM will continue to stress the quality aspect of the stocks in the Fund. Quality can be viewed within the context of visible earnings growth and a strong balance sheet, such that a company is not dependent upon capital markets for financing. Based upon this strategy, the Fund ended the year and moved into 2001 overweighted in the health care and consumer staples sectors and underweighted in the cyclically sensitive sectors (i.e., commercial goods and services and materials). Page 83 Dresdner RCM International Growth Equity Fund Total Return Index Comparison(c) EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC PERFORMANCE FROM COMMENCEMENT OF OPERATIONS $10,000 Investment (12/28/94 - 12/31/00)(d)(f)
CLASS I SHARES MSCI-EAFE INDEX(A) MSCI-ACWI FREE(B) 12/94 $10,000 $10,000 $10,000 1/95 $9,555 $9,616 $9,617 2/95 $9,577 $9,591 $9,592 3/95 $10,054 $10,192 $10,193 4/95 $10,492 $10,579 $10,579 5/95 $10,564 $10,455 $10,455 6/95 $10,847 $10,274 $10,275 7/95 $11,570 $10,916 $10,917 8/95 $11,420 $10,502 $10,503 9/95 $11,665 $10,710 $10,711 10/95 $11,489 $10,426 $10,426 11/95 $11,522 $10,719 $10,719 12/95 $11,799 $11,153 $11,153 1/96 $12,126 $11,201 $11,201 2/96 $12,271 $11,241 $11,241 3/96 $12,648 $11,483 $11,483 4/96 $13,096 $11,819 $11,820 5/96 $13,263 $11,604 $11,604 6/96 $13,353 $11,672 $11,673 7/96 $12,822 $11,334 $11,334 8/96 $13,108 $11,361 $11,362 9/96 $13,404 $11,666 $11,666 10/96 $13,302 $11,549 $11,549 11/96 $13,864 $12,011 $12,011 12/96 $14,078 $11,859 $11,860 1/97 $14,355 $11,447 $11,447 2/97 $14,477 $11,637 $11,637 3/97 $14,410 $11,682 $11,683 4/97 $14,654 $11,746 $11,747 5/97 $15,606 $12,513 $12,514 6/97 $16,502 $13,207 $13,207 7/97 $17,509 $13,423 $13,424 8/97 $16,292 $12,423 $12,424 9/97 $17,620 $13,121 $13,122 10/97 $16,458 $12,116 $12,117 11/97 $16,414 $11,995 $11,996 12/97 $16,603 $12,103 $12,071 1/98 $17,063 $12,660 $12,432 2/98 $17,924 $13,475 $13,261 3/98 $18,602 $13,893 $13,720 4/98 $18,954 $14,005 $13,818 5/98 $19,063 $13,941 $13,568 6/98 $19,123 $14,050 $13,517 7/98 $19,754 $14,196 $13,645 8/98 $17,063 $12,440 $11,721 9/98 $16,033 $12,062 $11,474 10/98 $16,869 $13,322 $12,675 11/98 $17,730 $14,008 $13,356 12/98 $18,895 $14,564 $13,816 1/99 $19,223 $14,525 $13,801 2/99 $18,429 $14,182 $13,492 3/99 $18,832 $14,778 $14,144 4/99 $19,160 $15,379 $14,851 5/99 $18,290 $14,590 $14,153 6/99 $19,804 $15,162 $14,804 7/99 $20,836 $15,617 $15,152 8/99 $21,050 $15,678 $15,205 9/99 $21,479 $15,840 $15,308 10/99 $23,232 $16,437 $15,878 11/99 $26,524 $17,012 $16,513 12/99 $30,357 $18,541 $18,088 1/00 $28,998 $17,366 $17,106 2/00 $31,077 $17,837 $17,568 3/00 $30,330 $18,532 $18,229 4/00 $27,639 $17,561 $17,211 5/00 $25,126 $17,136 $16,748 6/00 $26,321 $17,810 $17,485 7/00 $25,153 $17,067 $16,794 8/00 $25,615 $17,219 $17,003 9/00 $23,672 $16,384 $16,059 10/00 $22,720 $16,001 $15,548 11/00 $21,280 $15,404 $14,850 12/00 $22,230 $15,955 $15,358
PERFORMANCE FROM FIRST PUBLIC OFFERING $10,000 Investment (5/22/95 - 12/31/00)(d)(f)
CLASS I SHARES MSCI-EAFE INDEX(A) MSCI-ACWI FREE(B) 5/95 $10,000 $10,000 $10,000 5/95 $10,233 $9,984 $10,222 6/95 $10,508 $9,811 $10,081 7/95 $11,208 $10,424 $10,654 8/95 $11,063 $10,029 $10,284 9/95 $11,300 $10,228 $10,460 10/95 $11,130 $9,956 $10,180 11/95 $11,161 $10,236 $10,420 12/95 $11,430 $10,650 $10,831 1/96 $11,747 $10,696 $10,980 2/96 $11,887 $10,735 $10,980 3/96 $12,254 $10,965 $11,184 4/96 $12,686 $11,287 $11,523 5/96 $12,848 $11,081 $11,350 6/96 $12,935 $11,147 $11,408 7/96 $12,421 $10,823 $11,029 8/96 $12,698 $10,849 $11,094 9/96 $12,985 $11,140 $11,369 10/96 $12,886 $11,029 $11,256 11/96 $13,430 $11,470 $11,690 12/96 $13,638 $11,325 $11,554 1/97 $13,906 $10,931 $11,342 2/97 $14,024 $11,113 $11,549 3/97 $13,959 $11,156 $11,525 4/97 $14,195 $11,217 $11,622 5/97 $15,117 $11,950 $12,340 6/97 $15,986 $12,612 $13,021 7/97 $16,961 $12,819 $13,284 8/97 $15,782 $11,864 $12,239 9/97 $17,069 $12,530 $12,901 10/97 $15,943 $11,571 $11,803 11/97 $15,900 $11,455 $11,656 12/97 $16,083 $11,558 $11,790 1/98 $16,529 $12,090 $12,142 2/98 $17,363 $12,868 $12,952 3/98 $18,020 $13,267 $13,400 4/98 $18,361 $13,375 $13,497 5/98 $18,466 $13,313 $13,252 6/98 $18,525 $13,417 $13,202 7/98 $19,136 $13,556 $13,327 8/98 $16,529 $11,879 $11,448 9/98 $15,532 $11,518 $11,207 10/98 $16,342 $12,722 $12,380 11/98 $17,175 $13,377 $13,045 12/98 $18,304 $13,908 $13,495 1/99 $18,622 $13,871 $13,480 2/99 $17,852 $13,543 $13,178 3/99 $18,243 $14,112 $13,815 4/99 $18,561 $14,687 $14,580 5/99 $17,718 $13,933 $13,790 6/99 $19,184 $14,479 $14,459 7/99 $20,186 $14,914 $14,799 8/99 $20,394 $14,972 $14,851 9/99 $20,809 $15,126 $14,952 10/99 $22,508 $15,696 $15,508 11/99 $25,697 $16,246 $16,129 12/99 $29,407 $17,706 $17,667 1/00 $28,091 $16,584 $16,708 2/00 $30,105 $17,033 $17,159 3/00 $29,381 $17,697 $17,804 4/00 $26,775 $16,770 $16,811 5/00 $24,339 $16,364 $16,358 6/00 $25,498 $17,010 $17,018 7/00 $24,366 $16,301 $16,346 8/00 $24,813 $16,446 $16,548 9/00 $22,931 $15,648 $15,630 10/00 $22,009 $15,282 $15,133 11/00 $20,614 $14,712 $14,454 12/00 $21,537 $15,082 $14,610
PERFORMANCE(c) DECEMBER 31, 2000
INTERNATIONAL LIFE OF FUND LIFE OF FUND GROWTH EQUITY ANNUALIZED SINCE CUMULATIVE SINCE FUND 1 YEAR 3 YEARS 5 YEARS 12/28/94(D) 05/25/95(D) 12/28/94(D) 05/25/95(D) Class I Average Annual Total Return(d) -26.76% 10.22% 13.51% 14.22% 14.66% 122.30% 115.37% Class N Average Annual Total Return(e)(f) -26.95% 9.95% 13.23% 13.94% 14.38% 119.03% 112.40% MSCI-EAFE Index Average Annual Total Return(a) -13.95% 9.65% 7.43% 8.09% 7.60% 59.55% 50.82% MSCI-ACWI Ex-U.S. Free Average Annual Total Return(b) -15.09% 8.36% 6.73% 7.40% 7.00% 53.58% 46.10%
The data above represents past performance of the Fund and may not indicate future performance. The investment return and principal value of an investment in the Fund will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. -------------------------------- (a) The MSCI-EAFE Index is arithmetic, market value-weighted average of the performance of over 900 securities listed on the stock exchanges of countries in Europe, Australia, and the Far East. The index is calculated on a total return basis, which includes reinvestment of gross dividends before deduction of withholding taxes. (b) The MSCI All Country World Free Ex-U.S. Index ("ACWI") is a market capitalization-weighted index composed of companies representative of the market structure of 47 developed and emerging market countries excluding the United States. Stock selection excludes securities which are not purchasable by foreigners. The Index is calculated on a total return basis, which includes reinvestment of gross dividends before deduction of withholding taxes. (c) Returns assume reinvestment of all dividends and capital gains distributions at net asset value. Page 84 Dresdner RCM International Growth Equity Fund Total Return Index Comparison (d) The Class I shares were registered for offer and sale under the Securities Act of 1933 on May 22, 1995. In accordance with SEC regulations, performance information is provided for the period beginning on May 22, 1995 ("Registration"). For the convenience of our long-term shareholders, performance information is also provided for the period beginning on December 28, 1994 ("Commencement of Operations"). (e) Class N shares were first issued on March 10, 1999, and pay Rule 12b-1 fees. Class N returns through March 10, 1999 are based on Class I returns and reflect the deduction of Rule 12b-1 fees applicable to Class N shares. (f) The value of a $10,000 investment for Class N is $21,903 and $21,240 for the Fund from December 28, 1994 to December 31, 2000 and from May 22, 1995 to December 31, 2000, respectively. The performance of the Class N shares is lower than Class I shares due to the effects of 12b-1 fees. Page 85 Dresdner RCM International Growth Equity Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) ---------------------------------------------------------------------------------- EQUITY INVESTMENTS COMMERCIAL GOODS & SERVICES SECTOR 2.7% CAPITAL GOODS 2.7% 207,900 UK Bae Systems PLC $ 1,186,343 62,160 NL Koninklijke (Royal) Philips Electronics N.V. * 2,277,158 283,000 JP Mitsubishi Electric Corp. 1,742,110 21,050 DK Vestas Wind Systems A/S * 1,138,564 ------------ 6,344,175 ------------ CONSUMER DISCRETIONARY SECTOR 12.0% AUTOMOBILES & COMPONENTS 1.6% 199,000 JP Nissan Motor Co. Ltd. * 1,146,602 83,100 JP Toyota Motor Corp. 2,655,998 ------------ 3,802,600 ------------ CONSUMER DURABLES & APPAREL 3.9% 18,500 FR LVMH (Louis Vuitton Moet Hennessy) 1,224,491 148,000 JP Matsushita Electric Industries 3,538,003 172,000 JP Sanyo Electric Co. Ltd. 1,430,823 41,800 JP Sony Corp. 2,891,593 ------------ 9,084,910 ------------ HOTELS, RESTAURANTS & LEISURE 1.2% 245,680 UK Granada Compass PLC 2,673,570 ------------ MEDIA 4.6% 41,670 FR Publicis Groupe * 1,407,993 76,000 SG Singapore Press Holdings Ltd. 1,122,008 37,040 FR Societe Television Francaise * 1,999,557 56,800 FR Vivendi Universal S.A. * 3,738,189 47,300 NL VNU N.V. 2,324,731 ------------ 10,592,478 ------------ RETAILING 0.7% 8,000 JP Fast Retailing Co. Ltd. 1,567,775 ------------ CONSUMER STAPLES SECTOR 9.5% FOOD & DRUG RETAILING 3.3% 34,400 CA Loblaw Cos. Ltd. 1,156,585 24,700 UK Safeway PLC 110,322 1,556,955 UK Tesco PLC 6,343,560 ------------ 7,610,467 ------------ FOOD, BEVERAGE & TOBACCO 5.2% 64,400 BR Companhia de Bebidas das Americas (ADR) 1,658,300 28,250 MX Fomento Economico Mexicano S.A. de C.V. (ADR) 843,969 20 JP Hokuto Corp. 695
The accompanying notes are an integral part of the financial statements. Page 86 Dresdner RCM International Growth Equity Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) ---------------------------------------------------------------------------------- EQUITY INVESTMENTS (CONTINUED) FOOD, BEVERAGE & TOBACCO (CONTINUED) 122,200 BE Interbrew * $ 4,258,671 2,275 CH Nestle S.A. 5,306,702 ------------ 12,068,337 ------------ HOUSEHOLD & PERSONAL PRODUCTS 1.0% 163,500 UK Reckitt Benckiser PLC 2,251,857 ------------ ENERGY SECTOR 7.7% ENERGY 7.7% 40,175 CA Alberta Energy Co. Ltd. 1,920,472 289,700 UK BP Amoco PLC 2,336,870 447,500 IT ENI S.p.A. 2,856,912 680,280 UK Shell Transport & Trading Co. 5,578,948 33,840 FR Total Fina Elf S.A. 5,032,462 ------------ 17,725,664 ------------ FINANCIAL SECTOR 26.1% BANKS 8.3% 153,200 AU Commonwealth Bank of Australia 2,630,705 35,000 DE Deutsche Bank AG 2,941,268 226 CH Julius Baer Holding Ltd. (B Shares) 1,237,039 161,170 UK Lloyds TSB Group PLC 1,704,550 155,280 UK Royal Bank of Scotland Group PLC 3,669,562 149,000 JP Sumitomo Bank Ltd. 1,530,446 17,310 CH UBS AG 2,825,363 474,000 IT UniCredito Italiano S.p.A. 2,478,726 ------------ 19,017,659 ------------ DIVERSIFIED FINANCIALS 5.4% 111,090 NL Fortis (NL) N.V. 3,608,660 272,210 UK HSBC Holdings PLC 4,048,300 208,000 JP Nikko Securities Co. Ltd. 1,611,909 91,000 JP Nomura Securities Co. Ltd. 1,637,522 230,900 JP Sumitomo Trust & Banking Co. Ltd. 1,571,009 ------------ 12,477,400 ------------ INSURANCE 11.1% 15,900 DE Allianz AG 5,950,170 25,300 FR Assurances Generales de France 1,757,710 12,150 FR Axa S.A. 1,756,677 8,990 DE Ergo Versicherungs Gruppe AG 1,519,243 20,400 DE Muenchener Rueckversicherungs-Gesellschaft AG 7,298,245 76,770 UK Prudential Corp. PLC 1,235,092 1,987 CH Swiss Re 4,763,656 2,200 CH Zurich Financial Services AG * 1,326,382 ------------ 25,607,175 ------------
The accompanying notes are an integral part of the financial statements. Page 87 Dresdner RCM International Growth Equity Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) ---------------------------------------------------------------------------------- REAL ESTATE 1.3% 135,000 HK Cheung Kong (Holdings) Ltd. $ 1,726,463 132,000 HK Sun Hung Kai Properties Ltd. 1,315,785 ------------ 3,042,248 ------------ HEALTH CARE SECTOR 16.0% HEALTH CARE EQUIPMENT & SUPPLIES 1.0% 21,900 DE Fresenius Medical Care AG (Non-Voting Preferred Shares) 1,048,599 33,860 NL QIAGEN N.V. * 1,205,093 ------------ 2,253,692 ------------ PHARMACEUTICALS & BIOTECHNOLOGY 15.0% 73,000 FR Aventis S.A. 6,408,102 8,300 UK Cambridge Antibody Technology Group PLC * 471,144 58,690 UK Celltech Group PLC * 1,037,149 70,000 JP Fujisawa Pharmaceutical Co. Ltd. 2,316,987 231,760 UK GlaxoSmithKline PLC * 6,543,235 2,665 CH Novartis AG 4,711,653 9,960 DK Novo Nordisk A/S (B Shares) * 1,785,300 460 CH Roche Holdings AG 4,686,584 45,360 CH Serono S.A. (ADR) * 1,085,805 1,060 CH Serono S.A. (B Shares) * 1,020,427 75,900 JP Takeda Chemical Industries Ltd. 4,492,854 ------------ 34,559,240 ------------ MATERIALS SECTOR 0.0% MATERIALS 0.0% 575 CH Syngenta AG * 30,870 ------------ TECHNOLOGY SECTOR 11.4% COMMUNICATIONS EQUIPMENT 7.1% 11,400 JP Matsushita Communications Industrial Co. 1,432,487 226,700 FI Nokia Oyj 10,109,742 41,810 CA Nortel Networks Corp. 1,340,533 314,800 SE Telefonaktiebolaget LM Ericsson AB (B Shares) * 3,586,548 ------------ 16,469,310 ------------ COMPUTERS & PERIPHERALS 0.8% 95,000 JP Ricoh Co. Ltd. 1,755,253 ------------ SEMICONDUCTORS & INSTRUMENTS 2.6% 13,050 DE Epcos AG * 1,133,306 8,700 JP Murata Manufacturing Co. Ltd. 1,020,840 83,000 JP NEC Corp. 1,519,002 51,600 FR STMicroelectronics N.V. (NY Registered Shares) 2,209,125 ------------ 5,882,273 ------------
The accompanying notes are an integral part of the financial statements. Page 88 Dresdner RCM International Growth Equity Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) ---------------------------------------------------------------------------------- SOFTWARE 0.9% 15,760 IS Check Point Software Technologies Ltd. * $ 2,104,945 ------------ TELECOMMUNICATION SERVICES SECTOR 10.3% TELECOMMUNICATION SERVICES 10.3% 176,000 HK China Mobile (Hong Kong) Ltd. * 961,242 86 JP NTT DoCoMo Inc. 1,483,537 249,200 PT Portugal Telecom S.A. 2,278,778 139,600 FI Sonera Oyj 2,529,518 194,100 IT Telecom Italia S.p.A. 2,146,672 171,300 ES Telefonica S.A. * 2,830,512 794,100 AU Telstra Corp. Ltd. 2,834,078 2,345,600 UK Vodafone Group PLC 8,601,965 ------------ 23,666,302 ------------ UTILITIES SECTOR 3.2% UTILITIES 3.2% 903,240 UK Centrica PLC 3,497,954 43,800 DE E. On AG 2,664,674 121,920 UK National Grid Group PLC 1,108,225 ------------ 7,270,853 ------------ TOTAL EQUITY INVESTMENTS (COST $234,275,837) 98.9% 227,859,053 ------------ FACE AMOUNT ---------- SHORT-TERM INVESTMENTS COMMERCIAL PAPER 3.5% $8,000,000 US American Express Credit Corp., 6.380%, maturing 01/02/01 7,998,582 ------------ SHARES ---------- MONEY MARKET FUNDS 6.2% 5,981,651 US SSgA Money Market Fund 5,981,651 8,354,692 US SSgA U.S. Government Money Market Fund 8,354,692 ------------ 14,336,343 ------------ TOTAL SHORT-TERM INVESTMENTS (COST $22,334,925) 9.7% 22,334,925 ------------ TOTAL INVESTMENTS (COST $256,610,762)** 108.6% 250,193,978 OTHER ASSETS LESS LIABILITIES (8.6)% (19,791,695) ------------ NET ASSETS 100.0% $230,402,283 ============
-------------------------------- * Non-income producing security ADR American Depositary Receipt The accompanying notes are an integral part of the financial statements. Page 89 Dresdner RCM International Growth Equity Fund Portfolio of Investments December 31, 2000 Tax Information: ** For Federal income tax purposes, cost is $260,778,256 and gross aggregate unrealized appreciation (depreciation) for all securities is as follows:
Unrealized appreciation $11,939,399 Unrealized depreciation (22,523,677) ----------- Net unrealized depreciation $(10,584,278) ===========
-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- The Fund's investments in securities at December 31, 2000 categorized by country (unaudited):
% OF NET ASSETS ------------------------------- COUNTRY SHORT-TERM COUNTRY CODE EQUITIES AND OTHER TOTAL ------------------------------------------------------------------------ Australia AU 2.4% 2.4% Belgium BE 1.9% 1.9% Brazil BR 0.7% 0.7% Canada CA 1.9% 1.9% Denmark DK 1.3% 1.3% Finland FI 5.5% 5.5% France FR 11.1% 11.1% Germany DE 9.8% 9.8% Hong Kong HK 1.7% 1.7% Israel IS 0.9% 0.9% Italy IT 3.2% 3.2% Japan JP 15.3% 15.3% Mexico MX 0.4% 0.4% Netherlands NL 4.1% 4.1% Portugal PT 1.0% 1.0% Singapore SG 0.5% 0.5% Spain ES 1.2% 1.2% Sweden SE 1.6% 1.6% Switzerland CH 11.7% 11.7% United Kingdom UK 22.7% 22.7% United States US 0.0% 1.1% 1.1% ------ ------ ----- Total 98.9% 1.1% 100.0% ====== ====== =====
The accompanying notes are an integral part of the financial statements. Page 90 Dresdner RCM Emerging Markets Fund Management's Performance Review An aggressive sell-off in technology and telecommunications stocks continued to drive emerging markets downward, as investors were extremely bearish and risk-averse during the year. Although absolute results were negative, a higher than normal cash position allowed the Dresdner RCM Emerging Markets Fund to outperform its primary benchmark for the year and for the fourth quarter. For the 12 months ended December 31, 2000, the Fund produced total returns of -25.24% and -25.29% for the Class I and Class N shares, respectively. In comparison, the MSCI Emerging Markets Free Index ("EMF"), the Fund's benchmark, returned -30.60% and the S&P Emerging Markets Index returned -30.42%. For the fourth quarter of 2000, the Fund produced total returns of -11.86% and -11.95% for the Class I and Class N shares, respectively. In comparison, the MSCI-EMF Index returned -13.32% and the S&P Emerging Markets Index returned -11.94%. MARKET REVIEW During the year, economic growth and corporate earnings expectations were reduced throughout much of the world. Despite growing expectations of an easing monetary policy by the U.S. Federal Reserve Board as the year drew to a close, the policy remained tight for most of the year. Emerging markets remained generally correlated with Nasdaq, as investors who are cautious about risk pulled back across similar asset classes. With that said, Dresdner RCM Global Investors LLC ("Dresdner RCM"), the investment manager of the Fund, believes that emerging market performance held its own during the year, considering the poor performance elsewhere. Because of declining interest rates and continuing weakness in technology shares, industries such as financial services and consumer durables appeared to be more attractive investment themes as investors searched elsewhere for growth; this tumultuous market was reflected in the Fund's industry strategy and stock selection. Meanwhile, slower economic growth prospects had adverse consequences for economically cyclical stocks such as basic materials and chemicals. Consumer staples such as food and beverage stocks served as defensive safe havens. In Latin America, growth continued to accelerate in Brazil while expectations of a slowdown in Mexico continued to build in light of a slowing U.S. economy. In Asia, Hong Kong and China were doing well, but Taiwan and Korea were bogged down by technology. In Eastern Europe, Russia outperformed until late in the year, as oil prices declined. Overall, investors seem encouraged by Vladimir Putin's leadership, which marked a one-year anniversary on December 31, 2000. FACTORS AFFECTING PERFORMANCE Throughout this difficult year, Dresdner RCM continued to employ rigorous fundamental research to uncover companies throughout the world that have both superior earnings growth and reasonable valuations. The Fund was early in its underweight in certain areas of technology, partly because of the work of Dresdner RCM's Grassroots(SM) Research, which indicated a developing weakness in orders that suggested that the Fund trim some stocks in Taiwan. The Fund was able to anticipate disappointing results for one Taiwanese company that manufactures chip sets for Intel. Meanwhile, the Fund's management team also had concerns about political and financial instability in Taiwan. Still, there were pockets of good results during the period. Israel-based Check Point Software Technologies, a global leader in Internet security, continued its strong performance amidst the difficult technology environment. Management has done an excellent job of executing its growth strategy, offering software that is sufficiently inexpensive to fit within its customers' information technology budgets in lean times. Within commodities and metals, the portfolio focused on platinum plays such as Impala Platinum in South Africa. Platinum stocks benefited from a supply demand imbalance and strong demand from the auto and jewelry industries. The Fund benefited from investments in Brazilian banks, such as Banco Itau, as a combination of lower interest rates and a strengthening economy has caused loan growth to resume. In addition, the privatization process within the banking industry has been beneficial to stock price performance there, as banks offer an increasingly wide range of services including asset management, credit cards and insurance. The leading soft drink and beer company in Brazil, Companhia de Bebidas, also performed well during the year on news that it had Page 91 Dresdner RCM Emerging Markets Fund Management's Performance Review acquired its chief Uruguayan competitor. However, Argentina was the cloud hanging over Latin America, as the country threatened to default on its foreign debt. In Eastern Europe, Bank Polska Kasa Opieki, a Polish financial institution, performed well as interest rates in Poland peaked in the third quarter. The bank's management is very strong and it recently cut costs and added new services. Although Asia ex-Japan generally performed poorly during the quarter, selected real estate developers performed very well as easing monetary policy in China boosted real estate values in the region. Indeed, Dresdner RCM's Grassroots(SM) Research found that office rent in China had risen significantly. In Hong Kong, Sung Hung Kai Properties, a property development company, has benefited from a mortgage lending war in which rates were actually below the prime lending rate due to the strong economy in China and Hong Kong and low unemployment. OUTLOOK Currently, expectations for emerging markets are modest by historical standards. Once lower market returns become the norm in the U.S. and other developed markets, Dresdner RCM believes that emerging markets will once again appear relatively attractive. Longer-term trends, such as privatization, the globalization of finance and the spread of Internet commerce remain positive factors. In addition, institutional investors who focus on non-U.S. equities continue to under-invest in emerging markets. In the meantime, emerging market valuations are quite reasonable. If U.S. investors conclude that higher annual returns may no longer be achievable, they may begin looking to other markets for growth opportunities. The Fund's strategy will continue its emphasis on high-quality, highly liquid stocks of companies with strong management and clear business strategies. Page 92 Dresdner RCM Emerging Markets Fund Total Return Index Comparison(c) EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC $10,000 Investment (12/30/97 - 12/31/00)(d)(f)
MSCI-EMF S&P EMERGING CLASS I SHARES INDEX(A) MARKETS INDEX(B) 12/97 $9,990 $10,024 $10,015 1/98 $9,720 $9,238 $9,358 2/98 $10,530 $10,203 $10,314 3/98 $10,950 $10,645 $10,718 4/98 $11,120 $10,529 $10,747 5/98 $9,920 $9,087 $9,406 6/98 $9,170 $8,134 $8,441 7/98 $9,590 $8,391 $8,778 8/98 $7,660 $5,965 $6,311 9/98 $7,810 $6,344 $6,614 10/98 $8,660 $7,012 $7,374 11/98 $8,910 $7,595 $7,928 12/98 $9,151 $7,485 $7,810 1/99 $8,879 $7,364 $7,630 2/99 $8,839 $7,436 $7,765 3/99 $9,696 $8,416 $8,661 4/99 $10,715 $9,457 $9,843 5/99 $10,493 $9,402 $9,667 6/99 $11,644 $10,469 $10,719 7/99 $11,472 $10,184 $10,564 8/99 $11,855 $10,277 $10,680 9/99 $11,482 $9,930 $10,383 10/99 $12,098 $10,141 $10,563 11/99 $14,378 $11,051 $11,513 12/99 $17,562 $12,457 $13,056 1/00 $17,083 $12,531 $13,053 2/00 $20,050 $12,697 $13,040 3/00 $19,186 $12,759 $13,230 4/00 $16,635 $11,549 $11,861 5/00 $15,959 $11,072 $11,526 6/00 $16,927 $11,462 $11,851 7/00 $16,000 $10,873 $11,280 8/00 $16,417 $10,926 $11,323 9/00 $14,897 $9,972 $10,315 10/00 $13,648 $9,249 $9,472 11/00 $12,326 $8,441 $8,827 12/00 $13,129 $8,643 $9,084
PERFORMANCE(c) DECEMBER 31, 2000
CUMULATIVE SINCE SINCE EMERGING MARKETS FUND 1 YEAR 3 YEARS INCEPTION INCEPTION Class I Average Annual Total Return(d) -25.24% 9.50% 9.49% 31.29% Class N Average Annual Total Return(e)(f) -25.29% 9.30% 9.30% 30.59% MSCI-EMF Index Average Annual Total Return(a) -30.60% -4.82% -4.74% -13.57% S&P Emerging Markets Index Average Annual Total Return(b) -30.42% -3.20% -3.15% -9.16%
The data above represents past performance of the Fund and may not indicate future performance. The investment return and principal value of an investment in the Fund will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. -------------------------------- (a) The MSCI Emerging Markets Free ("EMF") Index is a market capitalization-weighted index composed of 981 companies in 26 emerging market countries. The average market capitalization size of the listed companies is $800 million. (b) The S&P Emerging Markets Index (formerly IFC Emerging Markets Index) represents the IFC Investable ("IFCI") regional total return composite. The term investable indicates that the stocks and the weights in the IFCI Index represent the amount that foreign institutional investors might buy by virtue of the applicable foreign institutional restrictions (either at the national level or by the individual company's corporate statute) plus factoring in minimum market capitalization and liquidity screens. (c) Returns assume reinvestment of all dividends and capital gains distributions at net asset value. (d) The Class I shares began operations on December 30, 1997. (e) Class N shares were first issued on March 10, 1999, and pay Rule 12b-1 fees. Class N returns through March 10, 1999 are based on Class I returns, and reflect the deduction of Rule 12b-1 fees applicable to Class N Shares. (f) The value of a $10,000 investment for Class N is $13,059 for the period from December 30, 1997 to December 31, 2000. The performance of the Class N shares is lower than Class I shares due to the effects of 12b-1 fees. Page 93 Dresdner RCM Emerging Markets Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) ---------------------------------------------------------------------------------- EQUITY INVESTMENTS COMMERCIAL GOODS & SERVICES SECTOR 4.8% CAPITAL GOODS 2.3% 672,000 TR Enka Holding Yatirim A.S. $ 72,183 7,000 MX Tubos de Acero de Mexico S.A. (Sponsored ADR) 100,100 ---------- 172,283 ---------- TRANSPORTATION 2.5% 105,000 HK MTR Corp. Ltd. 184,425 ---------- CONSUMER DISCRETIONARY SECTOR 3.1% MEDIA 2.0% 13,600 ZA Johnnic Holdings Ltd. 147,318 ---------- RETAILING 1.1% 39,500 MX Walmart de Mexico SA de C.V., Series V * 78,519 ---------- CONSUMER STAPLES SECTOR 11.4% FOOD & DRUG RETAILING 1.2% 1,400 BR Companhia Brasileria de Distribuicao Grupo Pao de Acucar (Sponsored ADR) 51,100 20,000 HK Li & Fung Ltd. 36,283 ---------- 87,383 ---------- FOOD, BEVERAGE & TOBACCO 8.4% 11,000 BR Companhia de Bebidas das Americas (ADR) * 283,250 3,500 MX Fomento Economico Mexicano, S.A. de C.V. (Sponsored ADR) 104,563 47,500 MX Grupo Modelo S.A. de C.V., Series C 126,060 4,069 HU Pick Szeged Rt. 104,269 ---------- 618,142 ---------- HOUSEHOLD & PERSONAL PRODUCTS 1.8% 30,000 IN Hindustan Lever Ltd. (Demat Shares) 132,615 ---------- ENERGY SECTOR 4.7% ENERGY 4.7% 900 RU Lukoil Holding (Sponsored ADR) 33,300 9,100 RU Lukoil Holding (Sponsored ADR) Pfd. 161,980 3,800 BR Petroleo Brasileiro S.A. 94,513 2,520 BR Petroleo Brasileiro S.A. (Petrobras) Pfd. 59,162 ---------- 348,955 ---------- FINANCIALS SECTOR 13.0% BANKS 9.6% 1,800 GR Alpha Bank A.E. 62,241
The accompanying notes are an integral part of the financial statements. Page 94 Dresdner RCM Emerging Markets Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) ---------------------------------------------------------------------------------- EQUITY INVESTMENTS (CONTINUED) BANKS (CONTINUED) 1,290,000 BR Banco Itau S.A. Pfd. $ 122,385 8,100 PL Bank Polska Kasa Opieki S.A. * 122,505 48,500 MX Grupo Financiero Banamex Accival, S.A. de CV 79,752 6,821 ZA Nedcor Ltd. 154,081 28,300 ZA Standard Bank Investment Corp., Ltd. 114,022 9,897 TR Yapi Ve Kredi Bankasi (Sponsored GDR) * 50,227 ---------- 705,213 ---------- REAL ESTATE 3.4% 9,000 HK Cheung Kong Holdings Ltd. 115,097 20,000 HK Hongkong Land Holdings Ltd. 44,400 9,000 HK Sung Hung Kai Properties Ltd. 89,713 ---------- 249,210 ---------- HEALTH CARE SECTOR 6.9% PHARMACEUTICALS & BIOTECHNOLOGY 6.9% 3,500 IN Dr. Reddy's Laboratories Ltd. 95,425 2,200 HU Gedeon Richter Rt. 129,893 10,200 HR Pliva d.d. (GDR REG S) 119,850 3,600 IN Ranbaxy Laboratories Ltd. 51,841 1,550 IS Teva Pharmaceutical Industries Ltd. (Sponsored ADR) 113,537 ---------- 510,546 ---------- MATERIALS SECTOR 9.2% RAW/BASIC MATERIALS 9.2% 4,800 ZA Anglo American Platinum Corp., Ltd. 223,958 6,300 PO CIA Minas Buenaventura S.A. (Sponsored ADR) 91,350 2,500 BR Companhia Vale do Rio Doce Pfd. 60,872 4,770 ZA Impala Platinum Holdings Ltd. 242,974 20,000 MX Nuevo Grupo Mexico S.A. 60,363 ---------- 679,517 ---------- TECHNOLOGY SECTOR 15.2% COMMUNICATIONS EQUIPMENT 1.5% 990 US Comverse Technology Inc. * 107,539 ---------- COMPUTERS & PERIPHERALS 2.5% 56,000 HK Computer & Technologies Holdings Ltd. 30,334 20,000 TW Hon Hai Precision Industry Co., Ltd. 101,566 90,000 HK Legend Holdings Ltd. 56,539 ---------- 188,439 ----------
The accompanying notes are an integral part of the financial statements. Page 95 Dresdner RCM Emerging Markets Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) ---------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS 2.5%:(Continued) EQUITY INVESTMENTS (CONTINUED) INFORMATION TECHNOLOGIES CONSULTING & SERVICES 1.3% 13,500 IN Satyam Computer Services Ltd. (Demat Shares)* $ 93,485 ---------- SEMICONDUCTORS & INSTRUMENTS 4.5% 1,000 KR Samsung Electronics Co. 124,900 32,600 TW Taiwan Semiconductor Manufacturing Co., Ltd. * 78,342 47,600 TW United Microelectronics Corp. 69,209 3,000 TW United Microelectronics Corp. (ADR) * 24,750 6,000 TW Via Technologies Inc. 32,465 ---------- 329,666 ---------- SOFTWARE 5.4% 2,010 IS Check Point Software Technologies * 268,460 1,050 IN Infosys Technologies Ltd. 128,338 ---------- 396,798 ---------- TELECOMMUNICATION SERVICES SECTOR 17.0% TELECOMMUNICATIONS SERVICES 17.0% 8,200 HK China Mobile Hong Kong Ltd. (Sponsored ADR) * 222,425 8,625 BR Embratel Participacoes S.A. (ADR) 135,305 600 KR Korea Telecom Corp. 31,779 1,100 KR Korea Telecom Corp. (ADR) 34,100 5,500 RU Mobile Telesystems (Sponsored ADR) 132,000 350 KR SK Telecom Co., Ltd. 70,000 3,200 KR SK Telecom Co., Ltd. (ADR) 75,400 2,900 BR Tele Celular Sul Participacoes S.A. (ADR) 75,763 9,500 BR Tele Centro Oeste Celular Participacoes S.A. (ADR) 92,031 3,700 BR Tele Norte Leste Participacoes S.A. (ADR) 84,406 4,250 MX Telefonos de Mexico (ADR) 191,781 4,000 PL Telekomunikacja Polska S.A. 26,715 1,400 BR Telemig Celular Participacoes S.A. (ADR) 83,300 ---------- 1,255,005 ---------- UTILITIES SECTOR 1.8% UTILITIES 1.8% 1,600 KR Korea Electric Power Corp. 29,850 10,000 KR Korea Electric Power Corp. (Sponsored ADR) 102,500 ---------- 132,350 ---------- TOTAL EQUITY INVESTMENTS (COST $7,053,054) 87.1% 6,417,408 ----------
The accompanying notes are an integral part of the financial statements. Page 96 Dresdner RCM Emerging Markets Fund Portfolio of Investments December 31, 2000
FACE % OF MARKET VALUE AMOUNT COUNTRY NET ASSETS (NOTE 1) ---------------------------------------------------------------------------------- SHORT-TERM INVESTMENT 10.0% TIME DEPOSIT $ 733,000 US Brown Brothers Harriman & Co. Time Deposit 5.00%, Maturing 1/2/01 $ 733,000 ---------- 733,000 TOTAL SHORT-TERM INVESTMENT (COST $733,000) ---------- TOTAL INVESTMENTS (COST $7,786,054)** 97.1% 7,150,408 OTHER ASSETS LESS LIABILITIES 2.9% 213,639 ---------- NET ASSETS 100.0% $7,364,047 ==========
-------------------------------- * Non-income producing security ADR American Depositary Receipt GDR Global Depositary Receipt Pfd. Preferred Stock Tax information: ** For Federal income tax purposes, cost is $7,174,032 and the gross aggregate unrealized appreciation (depreciation) for all securities is as follows:
Unrealized appreciation $ 683,502 Unrealized depreciation (707,126) ---------- Net unrealized depreciation $ (23,624) ==========
-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- The Fund's investments in securities at December 31, 2000 categorized by country (unaudited):
% OF NET ASSETS ------------------------------ COUNTRY SHORT-TERM COUNTRY CODE EQUITIES AND OTHER TOTAL ----------------------------------------------------------------------- Brazil BR 11.7% 11.7% Croatia HR 1.6% 1.6% Greece GR 0.8% 0.8% Hong Kong HK 10.6% 10.6% Hungary HU 3.2% 3.2% India IN 6.8% 6.8% Israel IS 5.2% 5.2% Korea KR 6.4% 6.4% Mexico MX 10.1% 10.1% Peru PO 1.2% 1.2% Poland PL 2.0% 2.0% Russia RU 4.4% 4.4% South Africa ZA 12.0% 12.0% Taiwan TW 4.1% 4.1% Turkey TR 1.7% 1.7% United States US 5.3% 12.9% 18.2% ------ ------- ----- Total 87.1% 12.9% 100.0% ====== ======= =====
The accompanying notes are an integral part of the financial statements. Page 97 Dresdner RCM Europe Fund Management's Performance Review A decelerating economy and a weakening currency negatively impacted the European equity markets during 2000, although the fourth quarter saw hopeful signs as the euro rallied. For the 12 months ended December 31, 2000, the Dresdner RCM Europe Fund produced total returns of -11.64% and -11.39% for the Class I and Class N shares, respectively. In comparison, the MSCI Europe Index, the Fund's primary benchmark, returned -8.14%. For the fourth quarter of 2000, the Fund produced total returns of -6.48% and -6.15% for the Class I and Class N shares, respectively. In comparison, the Index returned 2.04%. On January 29, 2001, the Fund received proxies representing a majority of the Fund's outstanding shares authorizing votes in favor of its reorganization from a series of Dresdner RCM Investment Funds Inc. to a newly created series of Dresdner RCM Global Funds, Inc. The reorganization transaction is expected to close shortly. MARKET REVIEW The fourth quarter of 2000 capped a difficult year for the European equity markets, as investors became concerned about the impact of the U.S. economic slowdown on European corporate profits. Growth stocks came under pressure, as tight monetary conditions continued on both sides of the Atlantic Ocean. Although the U.S. Federal Reserve Board ended its campaign to boost short-term interest rates in May, further rate increases took place in Europe, in part to prop up the sagging Euro. The actions were successful. For the year, the Euro fell from $1.02 to a low of $0.82, before rallying to $0.94 by year-end. Intervention by the European Central Bank along with a rapidly decelerating U.S. economy stemmed the decline of the Euro, which the Fund's portfolio management team believed had become undervalued. However, rising energy prices negatively impacted companies throughout almost every industry -- costs that couldn't be passed on to customers in the form of higher prices. Meanwhile, telecommunication shares continued to underperform because of several concerns relating to the higher-than-anticipated cost of third- generation wireless licenses as well as the build-out of infrastructure. Many of these companies must come back to the market to finance their expansion plans, which suggests a potential oversupply of securities that is currently depressing prices. On a positive note, Germany, the world's third largest economy, enacted sweeping tax reform during the summer of 2000. Led by Chancellor Gerhard Schroeder, enactment of the new law reduced personal and business tax rates while removing impediments to corporate mergers. One provision is the elimination of the tax on profits levied on companies that sell shares in other companies. Prior to its abolition, companies had to pay up to 53% on its investments profits. The tax reform is likely to spur restructuring activity and boost economic growth, while putting pressure on other European nations to lower their tax rates. FACTORS AFFECTING PERFORMANCE The Fund's continued shift away from telecommunications, particularly the big incumbent service providers, was helpful to results. These are the companies that need to spend money on equipment and to build out infrastructure. In addition, their cost structures rose due to soaring licensing fees. While growth stocks languished, defensive areas such as health care, insurance and consumer staples received more attention from investors. Healthcare and biotechnology companies produced strong results during the quarter, including H. Lundbeck, a Danish pharmaceutical company that manufactures drugs that work on the central nervous system. Another example is Altana, a German company that produces drugs for respiratory, stomach and cardiovascular disorders. At a time when technology and telecommunications remained volatile, investors appreciated the stable and sustainable profit growth rates available in this sector. Dresdner RCM Global Investors LLC ("Dresdner RCM"), the investment manager of the Fund, increased holdings in certain financial services companies, reflecting the liberalization of European pension laws, and the fact that the percentage of the population over the age of 65 is expanding. Insurance stocks did particularly well, reflecting the increased popularity of a variety of Page 98 Dresdner RCM Europe Fund Management's Performance Review life insurance products. However, the Fund de-emphasized commercial and investment banking companies, which are likely to do poorly in an environment of fewer financings and lower trading activity. While consumer staples such as food and beverage companies were among the Fund's top performers for the quarter, overweights in media/advertising companies hurt the Fund. Energy shares gave back some gains made during the first nine months of 2000 as oil prices eased. While technology was lightened, the portfolio continued its exposure to high-end semiconductors. A study done by Dresdner RCM's Grassroots(SM) Research confirmed the vast market opportunity for gallium arsenide semiconductor chips, which use less power and are faster and more efficient. One such equipment manufacturer in the portfolio is Aixtron, which produces technology for semiconductors that are used for cellular telephones. Although the stock performed well during the first three quarters, it gave back significant profits during the fourth-quarter tech sell-off. OUTLOOK Dresdner RCM believes that although the market environment remains difficult, Europe could outperform the U.S. markets in 2001. The strengthening Euro along with Europe's more stable growth outlook should attract foreign money. Non-export oriented companies are likely to perform well in the stronger Euro environment. Meanwhile, broader trends, such as corporate restructuring, an increasing equity culture, improved focus on shareholder value and a more benign tax environment, remain intact. Page 99 Dresdner RCM Europe Fund Total Return Index Comparison(d) EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC $10,000 Investment (4/5/90 - 12/31/00)(a)(e)(g)
CLASS N SHARES MSCI-EUROPE INDEX(B) DAX 100 INDEX(C) 4/90 $10,000 $10,000 $10,000 4/90 $9,150 $9,738 $9,346 5/90 $9,117 $10,535 $9,432 6/90 $9,400 $10,909 $9,862 7/90 $9,708 $11,372 $10,643 8/90 $8,617 $10,249 $9,117 9/90 $7,358 $9,046 $7,545 10/90 $8,250 $9,814 $8,450 11/90 $8,283 $9,917 $8,575 12/90 $8,000 $9,778 $8,318 1/91 $7,898 $10,111 $8,425 2/91 $8,289 $11,000 $8,858 3/91 $7,319 $10,266 $7,848 4/91 $7,600 $10,163 $8,194 5/91 $7,847 $10,466 $8,514 6/91 $7,311 $9,591 $7,813 7/91 $7,591 $10,260 $8,075 8/91 $7,694 $10,451 $8,216 9/91 $7,770 $10,769 $8,390 10/91 $7,481 $10,547 $8,239 11/91 $7,387 $10,303 $8,293 12/91 $7,739 $11,113 $8,872 1/92 $7,835 $11,114 $8,965 2/92 $8,071 $11,162 $9,123 3/92 $7,879 $10,776 $8,953 4/92 $7,853 $11,375 $8,974 5/92 $8,263 $12,026 $9,534 6/92 $8,202 $11,806 $9,712 7/92 $7,792 $11,390 $9,259 8/92 $7,818 $11,358 $9,266 9/92 $7,346 $11,175 $8,761 10/92 $6,883 $10,399 $8,171 11/92 $6,735 $10,398 $8,146 12/92 $6,602 $10,642 $7,980 1/93 $6,806 $10,664 $8,163 2/93 $7,134 $10,790 $8,580 3/93 $7,293 $11,349 $8,829 4/93 $7,249 $11,603 $8,691 5/93 $7,320 $11,732 $8,720 6/93 $6,992 $11,564 $8,369 7/93 $7,329 $11,607 $8,746 8/93 $8,002 $12,629 $9,740 9/93 $8,091 $12,594 $9,824 10/93 $8,490 $13,123 $10,290 11/93 $8,259 $12,843 $10,096 12/93 $8,792 $13,812 $10,880 1/94 $8,559 $14,519 $10,598 2/94 $8,541 $14,009 $10,397 3/94 $8,775 $13,617 $10,768 4/94 $9,142 $14,185 $11,477 5/94 $8,730 $13,586 $10,922 6/94 $8,541 $13,448 $10,871 7/94 $8,792 $14,156 $11,458 8/94 $9,026 $14,609 $11,854 9/94 $8,299 $14,035 $11,103 10/94 $8,550 $14,651 $11,682 11/94 $8,182 $14,095 $11,082 12/94 $8,364 $14,179 $11,508 1/95 $8,064 $14,073 $11,191 2/95 $8,500 $14,397 $12,166 3/95 $8,073 $15,070 $11,812 4/95 $8,300 $15,559 $12,295 5/95 $8,527 $15,882 $12,628 6/95 $8,664 $16,038 $12,958 7/95 $9,009 $16,880 $13,702 8/95 $8,500 $16,233 $12,947 9/95 $8,482 $16,730 $13,049 10/95 $8,436 $16,656 $12,974 11/95 $8,273 $16,781 $12,902 12/95 $8,364 $17,318 $13,188 1/96 $8,682 $17,438 $13,838 2/96 $8,836 $17,762 $13,942 3/96 $8,682 $17,981 $13,913 4/96 $8,355 $18,117 $13,414 5/96 $8,618 $18,264 $13,784 6/96 $8,964 $18,470 $14,119 7/96 $8,846 $18,245 $14,090 8/96 $9,073 $18,792 $14,367 9/96 $9,136 $19,195 $14,513 10/96 $9,164 $19,646 $14,611 11/96 $9,591 $20,648 $15,204 12/96 $9,709 $21,054 $15,299 1/97 $9,600 $21,118 $15,334 2/97 $9,883 $21,403 $15,951 3/97 $10,493 $22,100 $16,918 4/97 $10,210 $21,997 $16,409 5/97 $10,584 $22,942 $17,202 6/97 $11,149 $24,096 $17,926 7/97 $12,278 $25,231 $19,555 8/97 $11,285 $23,796 $17,670 9/97 $12,214 $26,109 $19,204 10/97 $11,522 $24,832 $17,692 11/97 $11,786 $25,219 $18,150 12/97 $12,182 $26,147 $19,048 1/98 $12,724 $27,243 $19,476 2/98 $13,430 $29,379 $20,801 3/98 $14,746 $31,479 $22,112 4/98 $15,558 $32,096 $22,846 5/98 $16,250 $32,754 $24,902 6/98 $17,268 $33,121 $25,822 7/98 $18,775 $33,784 $26,116 8/98 $15,346 $29,540 $21,849 9/98 $14,608 $28,368 $21,326 10/98 $15,676 $30,645 $22,438 11/98 $16,386 $32,285 $23,431 12/98 $16,738 $33,706 $23,515 1/99 $17,253 $33,497 $23,442 2/99 $16,088 $32,656 $21,825 3/99 $15,611 $33,022 $21,288 4/99 $15,973 $34,012 $22,781 5/99 $15,463 $32,386 $21,302 6/99 $16,138 $32,940 $22,233 7/99 $16,342 $33,253 $22,097 8/99 $15,909 $33,599 $22,517 9/99 $15,871 $33,347 $22,214 10/99 $17,095 $34,581 $23,276 11/99 $19,950 $35,521 $23,637 12/99 $24,034 $39,170 $27,457 1/00 $24,332 $36,388 $26,169 2/00 $29,177 $38,295 $28,982 3/00 $26,538 $39,230 $28,551 4/00 $25,047 $37,507 $26,311 5/00 $23,631 $37,207 $25,987 6/00 $24,406 $38,013 $25,865 7/00 $24,272 $37,412 $26,266 8/00 $25,018 $36,982 $25,262 9/00 $22,692 $35,259 $23,934 10/00 $21,827 $34,998 $23,826 11/00 $19,770 $33,650 $22,172 12/00 $21,296 $35,979 $24,102
PERFORMANCE(a)(d) DECEMBER 31, 2000
CUMULATIVE SINCE SINCE EUROPE FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION INCEPTION Class I Average Annual Total Return(f)(g) -11.64% 20.35% 20.49% 10.26% 7.29% 112.36% Class N Average Annual Total Return(e) -11.39% 20.46% 20.55% 10.29% 7.29% 112.96% MSCI-Europe Index Average Annual Total Return(b) -8.14% 11.23% 15.75% 13.91% 12.65% 259.79% DAX 100 Index Average Annual Total Return(c) -12.22% 8.16% 12.82% 11.23% 8.54% 141.02%
The data above represents past performance of the Fund and may not indicate future performance. The investment return and principal value of an investment in the Fund will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. -------------------------------- (a) Returns through February 2, 1999 reflect the performance of the Fund as a closed-end investment company that invested primarily in equity securities of German companies. Returns through May 3, 1999, reflect the performance of the Fund as a closed-end investment company. Beginning on February 9, 1999, the Fund's objective was expanded to permit investments in European companies. On May 3, 1999 the Fund converted from a closed-end to an open-end investment company. The expenses of the Fund as an open-end investment company may be higher than as a closed-end investment company due to additional fees, such as Rule 12b-1 fees. Since February 9, 1999, when the Fund's mandate was expanded, the Fund has been comparing its performance to the MSCI Europe Index. Before February 9, 1999, when the Fund invested primarily in equity securities of German companies, the Fund compared its performance to the DAX 100 Index, a German focused Index. (b) The MSCI Europe Index is a market capitalization-weighted index composed of companies representative of the market structure of 15 developed countries. The index is calculated on a total return basis, which includes reinvestment of gross dividends before deduction of withholding taxes. Page 100 Dresdner RCM Europe Fund Total Return Index Comparison (c) The DAX 100 Index is a total return index of the 100 most highly capitalized stocks traded on the Frankfurt Stock Exchange. The Index was developed with a base value of 500 stocks as of December 30, 1987. The underlying stock prices are from XETRA. (d) Returns assume reinvestment of all dividends and capital gains distributions at net asset value. (e) Returns through May 3, 1999 do not reflect Rule 12b-1 fees. Class N returns through May 3, 1999 would be lower if Rule 12b-1 fees had been paid. (f) Class I shares were first issued on March 3, 2000, which do not pay Rule 12b-1 fees. Class I returns through March 3, 2000 are based on Class N returns and for the period from May 3, 1999 to March 3, 2000, reflect the deduction of Rule 12b-1 fees. Returns for periods after March 3, 2000 do not reflect the deduction of Rule 12b-1 fees. (g) The value of a $10,000 investment for Class I is $21,236 for the period from April 5, 1990 to December 31, 2000. The performance of the Class N shares is lower than Class I shares due to the effects of 12b-1 fees. Page 101 Dresdner RCM Europe Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) ---------------------------------------------------------------------------------- EQUITY INVESTMENTS COMMERCIAL GOODS & SERVICES SECTOR 7.4% CAPITAL GOODS 6.3% 18,500 NL Koninklijke (Royal) Philips Electronics N.V. * $ 677,726 20,600 DE Singulus Technologies AG 696,250 81,400 NO Tomra Systems ASA * 1,578,428 17,300 DK Vestas Wind Systems A/S * 935,732 ----------- 3,888,136 ----------- COMMERCIAL SERVICES & SUPPLIES 1.1% 22,500 SE Proffice AB (B Shares) 641,458 ----------- CONSUMER DISCRETIONARY SECTOR 3.2% MEDIA 1.6% 15,200 FR Vivendi Universal S.A. * 1,000,361 ----------- RETAILING 1.6% 77,000 IT Bulgari S.p.A. 947,015 ----------- CONSUMER STAPLES SECTOR 7.7% FOOD & DRUG RETAILING 3.5% 526,211 UK Tesco PLC 2,143,961 ----------- FOOD, BEVERAGE & TOBACCO 4.2% 31,000 BE Interbrew * 1,080,350 655 CH Nestle S.A. 1,527,864 ----------- 2,608,214 ----------- ENERGY SECTOR 6.2% ENERGY 6.2% 16,600 ES Grupo Auxiliar Metalurgico S.A. (Gamesa) * 398,973 144,000 UK Shell Transport & Trading Co. 1,180,938 15,000 FR Total Fina Elf S.A. 2,230,701 ----------- 3,810,612 ----------- FINANCIAL SECTOR 30.0% BANKS 11.2% 60,000 IT Banca Popolare di Verona 695,686 19,200 DE Deutsche Bank AG 1,613,496 47,500 UK HSBC Holdings PLC * 698,911 280 CH Julius Baer Holding Ltd. (B Shares) 1,532,615
The accompanying notes are an integral part of the financial statements. Page 102 Dresdner RCM Europe Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) ---------------------------------------------------------------------------------- EQUITY INVESTMENTS (CONTINUED) BANKS (CONTINUED) 61,500 UK Royal Bank of Scotland Group PLC $ 1,453,362 175,000 IT UniCredito Italiano S.p.A. 915,141 ----------- 6,909,211 ----------- DIVERSIFIED FINANCIALS 3.1% 34,500 NL Fortis (NL) N.V. 1,120,702 9,000 NL Van der Moolen Holding N.V. 770,606 ----------- 1,891,308 ----------- INSURANCE 15.7% 4,500 DE Allianz AG 1,684,010 15,000 FR Assurances Generales de France 1,042,120 7,900 DE Ergo Versicherungs Gruppe AG 1,335,041 11,000 DE Marschollek, Lautenschlaeger und Partner AG (Non-Voting Preferred Shares) 1,218,624 7,400 DE Muenchener Rueckversicherungs-Gesellschaft AG 2,647,403 720 CH Swiss Re 1,726,136 ----------- 9,653,334 ----------- HEALTH CARE SECTOR 23.0% HEALTH CARE EQUIPMENT & SUPPLIES 5.7% 3,500 FR Essilor International S.A. 1,141,873 2 DE Fresenius Medical Care AG (ADR) 32 20,666 DE Fresenius Medical Care AG (Non-Voting Preferred Shares) 989,513 38,000 NL QIAGEN N.V. * 1,380,669 ----------- 3,512,087 ----------- PHARMACEUTICALS & BIOTECHNOLOGY 17.3% 6,000 DE Altana AG 935,092 17,500 FR Aventis S.A. 1,536,189 11,700 UK Cambridge Antibody Technology Group PLC * 664,143 47,300 UK Celltech Group PLC * 835,869 25,800 UK GlaxoSmithKline PLC (ADR) 1,444,800 14,300 DK H Lundbeck A/S 1,403,032 10,000 DK Novo Nordisk A/S (B Shares) * 1,792,470 125 CH Roche Holdings AG 1,273,528 31,000 CH Serono S.A. (ADR) * 742,062 ----------- 10,627,185 -----------
The accompanying notes are an integral part of the financial statements. Page 103 Dresdner RCM Europe Fund Portfolio of Investments December 31, 2000
% OF MARKET VALUE SHARES COUNTRY NET ASSETS (NOTE 1) ---------------------------------------------------------------------------------- EQUITY INVESTMENTS (CONTINUED) TECHNOLOGY SECTOR 14.6% COMMUNICATIONS EQUIPMENT 8.4% 13,900 DE ADVA AG Optical Networking $ 802,574 100,800 FI Nokia Oyj (ADR) 4,384,800 ----------- 5,187,374 ----------- COMPUTERS & PERIPHERALS 1.4% 3,300 CH Logitech International S.A. * 834,928 ----------- SEMICONDUCTORS & INSTRUMENTS 4.1% 6,300 DE Aixtron AG 684,927 11,300 DE Epcos AG (ADR) * 954,850 21,400 FR STMicroelectronics N.V. (N.Y. Registered Shares) 916,187 ----------- 2,555,964 ----------- SOFTWARE 0.7% 47,000 FR Gemplus International S.A. * 419,195 ----------- TELECOMMUNICATION SERVICES SECTOR 10.8% TELECOMMUNICATION SERVICES 10.8% 40,000 RU Mobile Telesystems (ADR) * 960,000 81,000 PT Portugal Telecom, SGPS, S.A. 740,694 52,000 FI Sonera Oyj 942,227 39,940 ES Telefonica S.A. * 659,957 910,000 UK Vodafone Group PLC 3,337,222 ----------- 6,640,100 ----------- TOTAL EQUITY INVESTMENTS (COST $58,368,850) 102.9% 63,270,443 ----------- SHORT-TERM INVESTMENT TIME DEPOSIT 2.8% 1,727,000 US State Street Cayman Islands, Time Deposit, 4.500%, maturing 01/02/01 1,727,000 ----------- TOTAL SHORT-TERM INVESTMENT (COST $1,727,000) 2.8% 1,727,000 ----------- TOTAL INVESTMENTS (COST $60,095,850)** 105.7% 64,997,443 OTHER ASSETS LESS LIABILITIES (5.7)% (3,491,852) ----------- NET ASSETS 100.0% $61,505,591 ===========
-------------------------------- * Non-income producing security ADR American Depositary Receipt The accompanying notes are an integral part of the financial statements. Page 104 Dresdner RCM Europe Fund Portfolio of Investments December 31, 2000 Tax Information: ** For Federal income tax purposes, cost is $60,447,873 and gross aggregate unrealized appreciation (depreciation) for all securities is as follows: Unrealized appreciation $7,431,634 Unrealized depreciation (2,882,064) ---------- Net unrealized appreciation $4,549,570 ==========
-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- The Fund's investments in securities at December 31, 2000 categorized by country (unaudited):
% OF NET ASSETS ------------------------------ COUNTRY SHORT-TERM COUNTRY CODE EQUITIES AND OTHER TOTAL ----------------------------------------------------------------------- Belgium BE 1.8% 1.8% Denmark DK 6.7% 6.7% Finland FI 8.7% 8.7% France FR 13.5% 13.5% Germany DE 22.0% 22.0% Italy IT 4.2% 4.2% Netherlands NL 6.4% 6.4% Norway NO 2.6% 2.6% Portugal PT 1.2% 1.2% Russia RU 1.6% 1.6% Spain ES 1.7% 1.7% Sweden SE 1.0% 1.0% Switzerland CH 12.4% 12.4% United Kingdom UK 19.1% 19.1% United States US 0.0% (2.9)% (2.9)% ------ ------- ----- Total 102.9% (2.9)% 100.0% ====== ======= =====
The accompanying notes are an integral part of the financial statements. Page 105 Dresdner RCM Strategic Income Fund Management's Performance Review Avoiding high risk was the key to the Dresdner RCM Strategic Income Fund's good relative performance during the year 2000. For the year ended December 31, 2000, the Fund returned 11.63% while the Lehman Brothers U.S. Universal Index, the Fund's benchmark, returned 10.83%. For the fourth quarter of 2000, the Fund returned 1.51% while the Index returned 3.71%. MARKET REVIEW For bonds as an asset class, the environment in 2000 was generally favorable. Despite rising energy prices, disinflationary pressures emanating from higher productivity, technology and global competition were still in place. Economic growth began to slow in the second half of the year, and while a recession was not imminent, the downshift from strong to weak growth was more significant than anticipated. The importance of the national elections was diminished by the closeness of the outcome, as a 50/50 Republican/Democrat U.S. Senate created low expectations for policy changes. The U.S. Treasury bond was the best-performing fixed-income sector during 2000. Early in the year, the Federal Government announced that it would retire U.S. Treasury debt in response to a budget surplus that was larger than expected. The projected shortage of Treasury securities drove prices higher relative to other fixed income instruments. Meanwhile, the Federal Reserve Board raised short-term interest rates 1.75 percentage points between June 1999 and May 2000 in an effort to slow the economy. As a result, the economy began to slow and inflation expectations diminished, causing long-term interest rates to decline in the second half of the year. Concerns about a slowing economy and the plunging Nasdaq caused investors to shy away from credit-sensitive bonds. Once again, U.S. Treasury bonds benefited from this flight to quality. High-yield and emerging market debt sold off sharply, while mortgage-backed securities produced good results until late in the year, when refinancing concerns emerged amidst falling interest rates. By the fourth quarter, investors began to expect a Fed easing, which in fact took place on January 3, 2001. Meanwhile, the two-year U.S. Treasury note yield fell from 5.97% to 5.09% during the quarter. FACTORS AFFECTING PERFORMANCE During 2000, the Fund made two dramatic and effective asset allocation decisions that drove its superior performance for the year. The first was to temporarily eliminate high-yield debt at the end of the first quarter. The second was to likewise eliminate emerging market bonds on a tactical basis in the fourth quarter. At the beginning of 2000, more than half of the Fund was allocated to those two sectors. The remainder was distributed across mortgages, corporate and Yankee bonds and other non-U.S. securities. Early in the year, the portfolio management team decided to remove its exposure to high yield bonds. Dual concerns of diminished supply of U.S. Treasuries and increased concerns of high yield credit assessments drove Dresdner RCM Global Investors LLC ("Dresdner RCM"), the investment manager of the Fund, to this decision. Although it was unusual for the Fund not to own high-yield bonds, the view was that emerging market debt offered similar yields and better fundamental value. Underlying global dynamics were very attractive, as Asia had recovered from the crisis in 1998, Latin America was benefiting from rising oil prices while Eastern Europe was stabilizing. By the end of the first quarter of 2000, the Fund's exposure to emerging market bonds reached 49%, from about 25% at the beginning of the year. Meanwhile, the high-yield allocation went from 32% on January 1, 2000 to zero. At the beginning of the fourth quarter, Dresdner RCM became concerned about the risk of a more generalized global recession. In light of an intensifying fall in the Nasdaq, concerns grew regarding a potential reverse wealth effect that could unwind 10 years of growth. Whether a hard or soft landing was coming, any transition would feel "hard", for which Dresdner RCM felt the market was not ready. As a result, a second dramatic asset allocation decision was made -- a shift out of emerging market bonds. Therefore, the Fund owned no high-income products in the fourth quarter. OUTLOOK Riskier assets are starting to perform better, and the Fund's management team is assessing whether there should be a reallocation to high-yield and emerging Page 106 Dresdner RCM Strategic Income Fund Management's Performance Review market bonds. Still, the bulk of the Fund's assets are invested in positions such as short-duration mortgage-backed securities that are less likely to undergo refinancing if interest rates continue to decline. Because of the Federal Reserve Board's actions in early 2001, Dresdner RCM believes that market conditions will improve, perhaps as soon as the second half of 2001. However, caution is still the watchword and there is as of yet no hurry to adopt a more aggressive risk posture for the Fund. Page 107 Dresdner RCM Strategic Income Fund Total Return Index Comparison(b) EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC $10,000 Investment (12/30/98 - 12/30/00)(c)
LEHMAN BROTHERS U.S. CLASS I SHARES UNIVERSAL INDEX(A) 12/98 $10,000 $10,000 1/99 $10,040 $10,067 2/99 $9,840 $9,905 3/99 $10,020 $9,984 4/99 $10,336 $10,043 5/99 $10,057 $9,942 6/99 $10,060 $9,924 7/99 $10,011 $9,883 8/99 $9,942 $9,872 9/99 $10,005 $9,979 10/99 $10,052 $10,021 11/99 $10,126 $10,037 12/99 $10,267 $10,018 1/00 $10,148 $9,971 2/00 $10,417 $10,098 3/00 $10,590 $10,216 4/00 $10,537 $10,184 5/00 $10,363 $10,166 6/00 $10,725 $10,401 7/00 $10,946 $10,485 8/00 $11,290 $10,638 9/00 $11,290 $10,692 10/00 $11,380 $10,735 11/00 $11,459 $10,880 12/00 $11,460 $11,106
PERFORMANCE(b) DECEMBER 31, 2000
CUMULATIVE SINCE SINCE STRATEGIC INCOME FUND 1 YEAR INCEPTION INCEPTION Class I Average Annual Total Return(c) 11.63% 7.05% 14.60% Lehman Brothers U.S. Universal Index Average Annual Total Return(a) 10.83% 5.39% 11.06%
The data above represents past performance of the Fund and may not indicate future performance. The investment return and principal value of an investment in the Fund will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. -------------------------------- (a) The Lehman Brothers U.S. Univeral Index is an unmanged market value weighted index that represents the broadest measure of the U.S. dollar denominated securities market. The Index combines the Lehman Brothers Aggregate Index, which is concentrated in AAA-rated and government quality issues, with the following sub-sectors: High Yield, Emerging Markets, Rule 144a and Eurobond Dollar. (b) Returns assume reinvestment of all dividends and capital gains distributions at net asset value. (c) Class I shares commenced operations on December 30, 1998. Page 108 Dresdner RCM Strategic Income Fund Portfolio of Investments December 31, 2000
FACE % OF MARKET VALUE AMOUNT CURRENCY NET ASSETS (NOTE 1) --------------------------------------------------------------------------------- DEBT INVESTMENTS UNITED STATES 52.5% $ 15,000 USD American General Institutional Capital (144A), 7.570%, maturing 12/01/45 $ 13,596 40,000 USD Federal National Mortgage Association, 7.125%, maturing 01/15/30 44,775 269,977 USD Federal National Mortgage Association, 8.000%, maturing 04/01/30 276,640 38,071 USD Federal National Mortgage Association, 8.000%, maturing 06/01/30 39,010 20,000 USD Lehman Brothers Holdings Inc., 7.000%, maturing 05/15/03 20,169 60,000 USD Waste Management Inc., 6.875%, maturing 05/15/09 56,453 -------- 450,643 -------- TOTAL DEBT INVESTMENTS (COST $441,037) 52.5% 450,643 -------- SHORT-TERM INVESTMENTS U.S. GOVERNMENT SECURITIES 30.2% 260,000 USD United States Treasury Bills, 5.963%, maturing 01/11/01 259,569 -------- SHARES -------- MONEY MARKET FUNDS 9.0% 38,608 USD SSgA Money Market Fund 38,608 38,608 USD SSgA U.S. Government Money Market Fund 38,608 -------- 77,216 -------- TOTAL SHORT-TERM INVESTMENTS (COST $336,785) 39.2% 336,785 -------- TOTAL INVESTMENTS (COST $777,822)** 91.7% 787,428 OTHER ASSETS LESS LIABILITIES 8.3% 71,019 -------- NET ASSETS 100.0% $858,447 ========
-------------------------------- 144A Security is 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. Page 109 Dresdner RCM Strategic Income Fund Portfolio of Investments December 31, 2000 Tax Information: ** For Federal income tax purposes, cost is $777,822 and gross aggregate unrealized appreciation (depreciation) for all securities is as follows:
Unrealized appreciation $12,725 Unrealized depreciation (3,119) ------ Net unrealized appreciation $9,606 ======
-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- The Fund's investments in securities at December 31, 2000 categorized by country (unaudited):
% OF NET ASSETS --------------------------- COUNTRY SHORT-TERM COUNTRY CODE DEBT AND OTHER TOTAL -------------------------------------------------------------------- United States US 52.5% 47.5% 100.0% ---- ------- ----- Total 52.5% 47.5% 100.0% ==== ======= =====
The accompanying notes are an integral part of the financial statements. Page 110 (THIS PAGE INTENTIONALLY LEFT BLANK) Page 111 Dresdner RCM Global Funds Statements of Assets and Liabilities December 31, 2000 (All numbers in thousands except net asset values per share)
LARGE CAP TAX MANAGED GROWTH GROWTH MIDCAP FUND FUND FUND --------- ----------- --------- ASSETS: Investments at cost $66,049 $30,979 $839,753 ======= ======= ======== Foreign currency at cost $ -- $ -- $ -- ======= ======= ======== Short-term investments at cost $ 2,477 $ 2,297 $ 29,864 ======= ======= ======== Investments at value $63,106 $30,190 $848,239 Foreign currency at value -- -- -- Cash -- -- -- Short-term investments at value 2,477 2,297 29,864 Receivables: Investments sold 125 199 15,032 Fund shares sold 124 249 18,477 Dividends, net of withholding taxes 35 20 118 Interest 13 15 320 Investment Manager -- -- -- Prepaid expenses -- -- -- Organizational costs -- -- -- Collateral for securities on loan -- -- 75,954 Miscellaneous assets -- -- -- ------- ------- -------- Total Assets 65,880 32,970 988,004 ------- ------- -------- LIABILITIES: Payables: Options written, at value -- -- -- Investments purchased 1,160 985 20,337 Delayed delivery investments purchased -- -- -- Fund shares repurchased 7 -- 135 Forward foreign currency contracts -- -- -- Collateral for securities on loan -- -- 75,954 Accrued Expenses: Management fees 79 51 599 Distribution fees 5 2 -- Directors' fees 32 24 -- Other 74 82 46 ------- ------- -------- Total Liabilities 1,357 1,144 97,071 ------- ------- -------- NET ASSETS $64,523 $31,826 $890,933 ======= ======= ======== NET ASSETS CONSIST OF: Paid-in capital $69,166 $35,971 $963,516 Accumulated net investment income (loss) -- -- -- Accumulated net realized gain (loss) on investments, options written, short sales and foreign currency transactions (1,700) (3,356) (81,069) Net unrealized appreciation (depreciation) on investments and options written (2,943) (789) 8,486 Net unrealized appreciation (depreciation) on foreign currency translations -- -- -- ------- ------- -------- NET ASSETS $64,523 $31,826 $890,933 ======= ======= ======== CLASS I NET ASSETS $41,741 $25,774 $890,883 ======= ======= ======== CLASS I SHARES OUTSTANDING 2,471 1,870 267,182 ======= ======= ======== CLASS I NET ASSET VALUE PER SHARE, OFFERING AND REDEMPTION PRICE PER SHARE $ 16.89 $ 13.78 $ 3.33 ======= ======= ======== CLASS N NET ASSETS $22,782 $ 6,052 $ 50 ======= ======= ======== CLASS N SHARES OUTSTANDING 1,358 440 15 ======= ======= ======== CLASS N NET ASSET VALUE PER SHARE, OFFERING AND REDEMPTION PRICE PER SHARE $ 16.77 $ 13.75 $ 3.33 ======= ======= ========
------------------------------------ (a) Amount represents less than 1,000 shares. The accompanying notes are an integral part of the financial statements. Page 112 Dresdner RCM Global Funds Statements of Assets and Liabilities December 31, 2000 (All numbers in thousands except net asset values per share)
GLOBAL GLOBAL GLOBAL SMALL CAP BIOTECHNOLOGY BALANCED EQUITY SMALL CAP TECHNOLOGY FUND FUND FUND FUND FUND FUND --------- ------------- -------- ------ --------- ---------- ASSETS: Investments at cost $191,474 $880,044 $40,713 $1,364 $37,924 $542,143 ======== ======== ======= ====== ======= ======== Foreign currency at cost $ -- $ 1 $ -- $ 3 $ 41 $ 341 ======== ======== ======= ====== ======= ======== Short-term investments at cost $ 3,765 $ 7,494 $ 5,019 $ 18 $ -- $127,848 ======== ======== ======= ====== ======= ======== Investments at value $172,498 $884,274 $38,925 $1,405 $33,955 $571,406 Foreign currency at value -- 1 -- 3 41 353 Cash -- -- -- -- 1,973 -- Short-term investments at value 3,765 7,494 5,019 18 -- 127,848 Receivables: Investments sold 5,202 12,344 1,984 18 444 133,880 Fund shares sold 107 13,147 769 -- 722 15,792 Dividends, net of withholding taxes 2 113 16 1 10 136 Interest 122 90 201 -- -- 262 Investment Manager -- -- 1 11 -- -- Prepaid expenses -- -- -- -- -- 2 Organizational costs -- -- -- -- -- -- Collateral for securities on loan 13,216 -- -- -- -- -- Miscellaneous assets -- 3 -- -- -- 5 -------- -------- ------- ------ ------- -------- Total Assets 194,912 917,466 46,915 1,456 37,145 849,684 -------- -------- ------- ------ ------- -------- LIABILITIES: Payables: Options written, at value -- -- -- -- -- 37 Investments purchased 4,618 3,213 -- 16 928 92,852 Delayed delivery investments purchased -- -- 6,421 -- -- -- Fund shares repurchased 1 4,345 -- -- 2,549 10,967 Forward foreign currency contracts -- -- -- -- -- -- Collateral for securities on loan 13,216 -- -- -- -- -- Accrued Expenses: Management fees 180 583 -- -- 97 641 Distribution fees -- 184 -- -- 3 86 Directors' fees -- 32 17 23 33 32 Other 18 708 56 46 91 673 -------- -------- ------- ------ ------- -------- Total Liabilities 18,033 9,065 6,494 85 3,701 105,288 -------- -------- ------- ------ ------- -------- NET ASSETS $176,879 $908,401 $40,421 $1,371 $33,444 $744,396 ======== ======== ======= ====== ======= ======== NET ASSETS CONSIST OF: Paid-in capital $235,268 $914,428 $42,425 $1,362 $41,086 $908,483 Accumulated net investment income (loss) -- (13) 5 1 1 (2,802) Accumulated net realized gain (loss) on investments, options written, short sales and foreign currency transactions (39,413) (10,244) (221) (33) (3,674) (190,525) Net unrealized appreciation (depreciation) on investments and options written (18,976) 4,230 (1,788) 41 (3,969) 29,226 Net unrealized appreciation (depreciation) on foreign currency translations -- -- -- -- -- 14 -------- -------- ------- ------ ------- -------- NET ASSETS $176,879 $908,401 $40,421 $1,371 $33,444 $744,396 ======== ======== ======= ====== ======= ======== CLASS I NET ASSETS $176,879 $ -- $40,421 $1,371 $17,804 $366,353 ======== ======== ======= ====== ======= ======== CLASS I SHARES OUTSTANDING 27,487 -- 3,981 136 956 7,279 ======== ======== ======= ====== ======= ======== CLASS I NET ASSET VALUE PER SHARE, OFFERING AND REDEMPTION PRICE PER SHARE $ 6.43 $ -- $ 10.15 $10.10 $ 18.63 $ 50.33 ======== ======== ======= ====== ======= ======== CLASS N NET ASSETS $ -- $908,401 $ -- $ -- $15,640 $378,043 ======== ======== ======= ====== ======= ======== CLASS N SHARES OUTSTANDING -- 24,960 -- -- 841 7,548 ======== ======== ======= ====== ======= ======== CLASS N NET ASSET VALUE PER SHARE, OFFERING AND REDEMPTION PRICE PER SHARE $ -- $ 36.39 $ -- $ -- $ 18.59 $ 50.09 ======== ======== ======= ====== ======= ======== GLOBAL INTERNATIONAL HEALTH CARE GROWTH EQUITY FUND FUND ----------- ------------- ASSETS: Investments at cost $225,706 $234,276 ======== ======== Foreign currency at cost $ -- $ 745 ======== ======== Short-term investments at cost $ 13,402 $ 22,335 ======== ======== Investments at value $237,833 $227,859 Foreign currency at value -- 744 Cash -- -- Short-term investments at value 13,402 22,335 Receivables: Investments sold 2,667 1,016 Fund shares sold 7,136 6,509 Dividends, net of withholding taxes 130 307 Interest 53 23 Investment Manager -- -- Prepaid expenses 2 -- Organizational costs -- -- Collateral for securities on loan -- -- Miscellaneous assets -- 1 -------- -------- Total Assets 261,223 258,794 -------- -------- LIABILITIES: Payables: Options written, at value -- -- Investments purchased 3,031 15,992 Delayed delivery investments purchased -- -- Fund shares repurchased 569 11,970 Forward foreign currency contracts -- -- Collateral for securities on loan -- -- Accrued Expenses: Management fees 483 146 Distribution fees 49 1 Directors' fees 32 109 Other 150 174 -------- -------- Total Liabilities 4,314 28,392 -------- -------- NET ASSETS $256,909 $230,402 ======== ======== NET ASSETS CONSIST OF: Paid-in capital $238,677 $252,360 Accumulated net investment income (loss) -- 228 Accumulated net realized gain (loss) on investments, options written, short sales and foreign currency transactions 6,105 (15,768) Net unrealized appreciation (depreciation) on investments and options written 12,127 (6,417) Net unrealized appreciation (depreciation) on foreign currency translations -- (1) -------- -------- NET ASSETS $256,909 $230,402 ======== ======== CLASS I NET ASSETS $ -- $225,278 ======== ======== CLASS I SHARES OUTSTANDING -- 16,274 ======== ======== CLASS I NET ASSET VALUE PER SHARE, OFFERING AND REDEMPTION PRICE PER SHARE $ -- $ 13.84 ======== ======== CLASS N NET ASSETS $256,909 $ 5,124 ======== ======== CLASS N SHARES OUTSTANDING 10,445 371 ======== ======== CLASS N NET ASSET VALUE PER SHARE, OFFERING AND REDEMPTION PRICE PER SHARE $ 24.60 $ 13.82 ======== ========
------------------------------------ (a) Amount represents less than 1,000 shares. The accompanying notes are an integral part of the financial statements. Page 113 Dresdner RCM Global Funds Statements of Assets and Liabilities December 31, 2000 (All numbers in thousands except net asset values per share)
EMERGING STRATEGIC MARKETS EUROPE INCOME FUND FUND FUND -------- ------- --------- ASSETS: Investments at cost $7,053 $58,369 $ 441 ====== ======= ====== Foreign currency at cost $ 235 $ 2,882 $ -- ====== ======= ====== Short-term investments at cost $ 733 $ 1,727 $ 337 ====== ======= ====== Investments at value $6,417 $63,270 $ 451 Foreign currency at value 235 2,941 -- Cash 5 -- 124 Short-term investments at value 733 1,727 337 Receivables: Investments sold -- 138 -- Fund shares sold 369 302 -- Dividends, net of withholding taxes 12 102 -- Interest -- 9 5 Investment Manager 93 21 18 Prepaid expenses -- 5 -- Organizational costs 8 -- -- Collateral for securities on loan -- -- -- Miscellaneous assets -- 19 -- ------ ------- ------ Total Assets 7,872 68,534 935 ------ ------- ------ LIABILITIES: Payables: Options written, at value -- -- -- Investments purchased 45 3,653 -- Delayed delivery investments purchased -- -- -- Fund shares repurchased 321 3,246 -- Forward foreign currency contracts -- -- 10 Collateral for securities on loan -- -- -- Accrued Expenses: Management fees 19 -- -- Distribution fees 1 11 -- Directors' fees 33 2 25 Other 89 116 42 ------ ------- ------ Total Liabilities 508 7,028 77 ------ ------- ------ NET ASSETS $7,364 $61,506 $ 858 ====== ======= ====== NET ASSETS CONSIST OF: Paid-in capital $8,633 $58,053 $1,000 Accumulated net investment income (loss) (45) -- (3) Accumulated net realized gain (loss) on investments, options written, short sales and foreign currency transactions (588) (1,453) (139) Net unrealized appreciation (depreciation) on investments and options written (636) 4,901 10 Net unrealized appreciation (depreciation) on foreign currency translations -- 5 (10) ------ ------- ------ NET ASSETS $7,364 $61,506 $ 858 ====== ======= ====== CLASS I NET ASSETS $5,194 $ 4 $ 858 ====== ======= ====== CLASS I SHARES OUTSTANDING 431 --(a) 89 ====== ======= ====== CLASS I NET ASSET VALUE PER SHARE, OFFERING AND REDEMPTION PRICE PER SHARE $12.06 $ 11.87 $ 9.62 ====== ======= ====== CLASS N NET ASSETS $2,170 $61,502 $ -- ====== ======= ====== CLASS N SHARES OUTSTANDING 180 5,182 -- ====== ======= ====== CLASS N NET ASSET VALUE PER SHARE, OFFERING AND REDEMPTION PRICE PER SHARE $12.03 $ 11.87 $ -- ====== ======= ======
------------------------------------ (a) Amount represents less than 1,000 shares. The accompanying notes are an integral part of the financial statements. Page 114 (THIS PAGE INTENTIONALLY LEFT BLANK) Page 115 Dresdner RCM Global Funds Statements of Operations For the Year Ended December 31, 2000 (All numbers in thousands)
LARGE CAP TAX MANAGED GROWTH GROWTH MIDCAP FUND FUND FUND --------- ----------- ---------- INVESTMENT INCOME (NOTE 1): Income: Dividends $ 226 $ 107 $ 1,594 Interest 54 68 1,202 Securities lending income -- -- 1,825 Foreign tax withheld (2) (1) (12) ------- ------- --------- Total investment income 278 174 4,609 ------- ------- --------- Expenses: Investment management fees 256 192 9,917 Administration fees 67 67 -- Shareholder servicing fee, Class I 14 17 -- Shareholder servicing fee, Class N 22 18 -- Registration and filing, Class I 27 33 -- Registration and filing, Class N 19 28 -- Reports to shareholders 15 13 -- Accounting expense 39 31 -- Audit fees 20 20 -- Directors' fees and expenses 7 6 -- Legal fees 13 14 -- Custodian fees 10 7 131 Distribution fees 24 9 -- Amortization of organization costs -- -- -- Reimbursement of expenses previously assumed by Investment Manager -- 1 -- Miscellaneous expenses 4 2 -- ------- ------- --------- Total expenses before waivers and reimbursements 537 458 10,048 Less: Expenses waived and reimbursed by Investment Manager (196) (129) -- ------- ------- --------- Total net expenses before interest expense 341 329 10,048 Interest expense -- -- -- ------- ------- --------- Total net expenses 341 329 10,048 ------- ------- --------- Net investment income (loss) (63) (155) (5,439) ------- ------- --------- NET REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) on investments 157 (3,344) 469,880 Net realized gain (loss) on options written -- -- -- Net realized gain (loss) on short sales -- -- -- Net realized gain (loss) on foreign currency transactions -- -- -- ------- ------- --------- Net realized gain (loss) 157 (3,344) 469,880 ------- ------- --------- Net change in unrealized appreciation (depreciation) on investments and options written (7,220) (1,404) (401,584) Net change in unrealized appreciation (depreciation) on foreign currency translations -- -- -- ------- ------- --------- Net unrealized appreciation (depreciation) (7,220) (1,404) (401,584) ------- ------- --------- Net realized and unrealized gain (loss) (7,063) (4,748) 68,296 ------- ------- --------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $(7,126) $(4,903) $ 62,857 ======= ======= =========
The accompanying notes are an integral part of the financial statements. Page 116 Dresdner RCM Global Funds Statements of Operations For the Year Ended December 31, 2000 (All numbers in thousands)
GLOBAL GLOBAL GLOBAL SMALL CAP BIOTECHNOLOGY BALANCED EQUITY SMALL CAP TECHNOLOGY FUND FUND FUND FUND FUND FUND ---------- ------------- -------- ------ --------- ---------- INVESTMENT INCOME (NOTE 1): Income: Dividends $ 295 $ 890 $ 64 $ 11 $ 217 $ 1,324 Interest 604 1,362 392 1 96 5,766 Securities lending income 675 -- -- -- -- -- Foreign tax withheld -- (29) (1) (1) (19) (36) --------- -------- ------- ----- -------- --------- Total investment income 1,574 2,223 455 11 294 7,054 --------- -------- ------- ----- -------- --------- Expenses: Investment management fees 3,521 4,940 99 12 437 7,458 Administration fees -- 67 67 67 67 67 Shareholder servicing fee, Class I -- -- 22 -- 15 91 Shareholder servicing fee, Class N -- 652 -- -- 37 505 Registration and filing, Class I -- -- 37 -- 29 142 Registration and filing, Class N -- 213 -- 6 25 149 Reports to shareholders -- 215 22 6 23 197 Accounting expense -- 31 18 19 51 31 Audit fees -- 26 27 22 22 34 Directors' fees and expenses -- 7 18 6 9 7 Legal fees -- 14 19 14 14 14 Custodian fees 58 57 12 20 49 130 Distribution fees -- 1,252 -- -- 38 927 Amortization of organization costs -- -- -- -- -- 15 Reimbursement of expenses previously assumed by Investment Manager -- 171 -- -- 1 323 Miscellaneous expenses 2 3 1 2 4 5 --------- -------- ------- ----- -------- --------- Total expenses before waivers and reimbursements 3,581 7,648 342 174 821 10,095 Less: Expenses waived and reimbursed by Investment Manager -- (136) (205) (155) (127) -- --------- -------- ------- ----- -------- --------- Total net expenses before interest expense 3,581 7,512 137 19 694 10,095 Interest expense -- -- -- -- -- -- --------- -------- ------- ----- -------- --------- Total net expenses 3,581 7,512 137 19 694 10,095 --------- -------- ------- ----- -------- --------- Net investment income (loss) (2,007) (5,289) 318 (8) (400) (3,041) --------- -------- ------- ----- -------- --------- NET REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) on investments 39,966 (9,818) (30) 279 (55) (183,888) Net realized gain (loss) on options written -- -- -- -- -- (2,611) Net realized gain (loss) on short sales -- -- -- -- -- (710) Net realized gain (loss) on foreign currency transactions -- (83) -- (2) (1,022) (2,341) --------- -------- ------- ----- -------- --------- Net realized gain (loss) 39,966 (9,901) (30) 277 (1,077) (189,550) --------- -------- ------- ----- -------- --------- Net change in unrealized appreciation (depreciation) on investments and options written (102,013) 305 (1,844) (441) (10,344) (77,359) Net change in unrealized appreciation (depreciation) on foreign currency translations -- -- -- -- (2) (27) --------- -------- ------- ----- -------- --------- Net unrealized appreciation (depreciation) (102,013) 305 (1,844) (441) (10,346) (77,386) --------- -------- ------- ----- -------- --------- Net realized and unrealized gain (loss) (62,047) (9,596) (1,874) (164) (11,423) (266,936) --------- -------- ------- ----- -------- --------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (64,054) $(14,885) $(1,556) $(172) $(11,823) $(269,977) ========= ======== ======= ===== ======== ========= GLOBAL INTERNATIONAL HEALTH CARE GROWTH EQUITY FUND FUND ----------- ------------- INVESTMENT INCOME (NOTE 1): Income: Dividends $ 391 $ 2,781 Interest 416 490 Securities lending income -- -- Foreign tax withheld (13) (338) ------- -------- Total investment income 794 2,933 ------- -------- Expenses: Investment management fees 964 2,286 Administration fees 67 67 Shareholder servicing fee, Class I -- 37 Shareholder servicing fee, Class N 120 22 Registration and filing, Class I -- 36 Registration and filing, Class N 47 31 Reports to shareholders 48 21 Accounting expense 30 48 Audit fees 20 47 Directors' fees and expenses 7 45 Legal fees 14 17 Custodian fees 20 335 Distribution fees 241 11 Amortization of organization costs -- -- Reimbursement of expenses previously assumed by Investment Manager -- 99 Miscellaneous expenses 3 8 ------- -------- Total expenses before waivers and reimbursements 1,581 3,110 Less: Expenses waived and reimbursed by Investment Manager (135) (50) ------- -------- Total net expenses before interest expense 1,446 3,060 Interest expense -- -- ------- -------- Total net expenses 1,446 3,060 ------- -------- Net investment income (loss) (652) (127) ------- -------- NET REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) on investments 7,324 27,154 Net realized gain (loss) on options written (180) -- Net realized gain (loss) on short sales -- -- Net realized gain (loss) on foreign currency transactions 10 (19,780) ------- -------- Net realized gain (loss) 7,154 7,374 ------- -------- Net change in unrealized appreciation (depreciation) on investments and options written 10,967 (97,400) Net change in unrealized appreciation (depreciation) on foreign currency translations -- 4 ------- -------- Net unrealized appreciation (depreciation) 10,967 (97,396) ------- -------- Net realized and unrealized gain (loss) 18,121 (90,022) ------- -------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $17,469 $(90,149) ======= ========
The accompanying notes are an integral part of the financial statements. Page 117 Dresdner RCM Global Funds Statements of Operations For the Year Ended December 31, 2000 (All numbers in thousands)
EMERGING STRATEGIC MARKETS EUROPE INCOME FUND FUND FUND -------- -------- --------- INVESTMENT INCOME (NOTE 1): Income: Dividends $ 90 $ 397 $ 2 Interest 50 38 81 Securities lending income -- -- -- Foreign tax withheld (12) (67) -- ------- -------- ----- Total investment income 128 368 83 ------- -------- ----- Expenses: Investment management fees 84 777 8 Administration fees 30 67 67 Shareholder servicing fee, Class I 14 10 -- Shareholder servicing fee, Class N 20 116 -- Registration and filing, Class I 26 29 9 Registration and filing, Class N 2 42 -- Reports to shareholders 16 33 6 Accounting expense 35 48 15 Audit fees 29 44 27 Directors' fees and expenses 16 179 8 Legal fees 13 70 14 Custodian fees 138 34 3 Distribution fees 5 192 -- Amortization of organization costs 4 -- -- Reimbursement of expenses previously assumed by Investment Manager -- 30 -- Miscellaneous expenses 3 3 5 ------- -------- ----- Total expenses before waivers and reimbursements 435 1,674 162 Less: Expenses waived and reimbursed by Investment Manager (303) (434) (149) ------- -------- ----- Total net expenses before interest expense 132 1,240 13 Interest expense -- 19 -- ------- -------- ----- Total net expenses 132 1,259 13 ------- -------- ----- Net investment income (loss) (4) (891) 70 ------- -------- ----- NET REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) on investments (583) 14,904 (69) Net realized gain (loss) on options written -- -- -- Net realized gain (loss) on short sales -- -- -- Net realized gain (loss) on foreign currency transactions (39) (5,806) 29 ------- -------- ----- Net realized gain (loss) (622) 9,098 (40) ------- -------- ----- Net change in unrealized appreciation (depreciation) on investments and options written (2,468) (18,866) 68 Net change in unrealized appreciation (depreciation) on foreign currency translations -- 17 (16) ------- -------- ----- Net unrealized appreciation (depreciation) (2,468) (18,849) 52 ------- -------- ----- Net realized and unrealized gain (loss) (3,090) (9,751) 12 ------- -------- ----- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $(3,094) $(10,642) $ 82 ======= ======== =====
The accompanying notes are an integral part of the financial statements. Page 118 (THIS PAGE INTENTIONALLY LEFT BLANK) Page 119 Dresdner RCM Global Funds Statements of Changes in Net Assets (All numbers in thousands)
LARGE CAP GROWTH FUND TAX MANAGED GROWTH FUND ---------------------------- ---------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DEC. 31, 2000 DEC. 31, 1999 DEC. 31, 2000 DEC. 31, 1999 ------------- ------------- ------------- ------------- OPERATIONS: Net investment income (loss) $ (63) $ (32) $ (155) $ (10) Net realized gain (loss) on investments, options written, short sales and foreign currency transactions 157 2,485 (3,344) 27 Net change in unrealized appreciation (depreciation) on investments, options written and foreign currency translations (7,220) 2,205 (1,404) 615 ------- ------- ------- ------ Net increase (decrease) in net assets resulting from operations (7,126) 4,658 (4,903) 632 DISTRIBUTIONS TO SHAREHOLDERS FROM: Class I shares: Net investment income -- -- -- -- In excess of net investment income -- -- -- -- Net realized gain on investments (315) (2,517) -- (21) In excess of net realized gain on investments (1,045) -- -- (2) ------- ------- ------- ------ Total distributions, Class I (1,360) (2,517) -- (23) ------- ------- ------- ------ Class N shares: Net investment income -- -- -- -- In excess of net investment income -- -- -- -- Net realized gain on investments (181) (46) -- (6) In excess of net realized gain on investments (603) -- -- -- ------- ------- ------- ------ Total distributions, Class N (784) (46) -- (6) ------- ------- ------- ------ Total distributions to shareholders (2,144) (2,563) -- (29) NET INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS* 57,969 5,794 34,423 655 Redemption fees -- -- 48 -- ------- ------- ------- ------ TOTAL INCREASE (DECREASE) IN NET ASSETS 48,699 7,889 29,568 1,258 NET ASSETS: Beginning of period 15,824 7,935 2,258 1,000 ------- ------- ------- ------ End of period $64,523 $15,824 $31,826 $2,258 ======= ======= ======= ======
------------------------------------ * For detail on capital share transactions by class, see Statements of Changes in Net Assets Capital Stock Activity on pages 126 - 130. ** Period from December 15, 1999 (commencement of operations) to December 31, 1999. The accompanying notes are an integral part of the financial statements. Page 120 Dresdner RCM Global Funds Statements of Changes in Net Assets (All numbers in thousands)
MIDCAP FUND SMALL CAP FUND ---------------------------- ---------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DEC. 31, 2000 DEC. 31, 1999 DEC. 31, 2000 DEC. 31, 1999 ------------- ------------- ------------- ------------- OPERATIONS: Net investment income (loss) $ (5,439) $ (2,203) $ (2,007) $ (3,072) Net realized gain (loss) on investments, options written, short sales and foreign currency transactions 469,880 234,002 39,966 (32,599) Net change in unrealized appreciation (depreciation) on investments, options written and foreign currency translations (401,584) 277,202 (102,013) 58,242 ---------- ---------- --------- --------- Net increase (decrease) in net assets resulting from operations 62,857 509,001 (64,054) 22,571 DISTRIBUTIONS TO SHAREHOLDERS FROM: Class I shares: Net investment income -- -- -- -- In excess of net investment income -- -- -- -- Net realized gain on investments (528,797) (180,650) (39,966) -- In excess of net realized gain on investments (62,531) -- (16,869) (10,485) ---------- ---------- --------- --------- Total distributions, Class I (591,328) (180,650) (56,835) (10,485) ---------- ---------- --------- --------- Class N shares: Net investment income -- -- -- -- In excess of net investment income -- -- -- -- Net realized gain on investments -- -- -- -- In excess of net realized gain on investments -- -- -- -- ---------- ---------- --------- --------- Total distributions, Class N -- -- -- -- ---------- ---------- --------- --------- Total distributions to shareholders (591,328) (180,650) (56,835) (10,485) NET INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS* 61,915 53,875 (106,925) (165,358) Redemption fees -- -- -- -- ---------- ---------- --------- --------- TOTAL INCREASE (DECREASE) IN NET ASSETS (466,556) 382,226 (227,814) (153,272) NET ASSETS: Beginning of period 1,357,489 975,263 404,693 557,965 ---------- ---------- --------- --------- End of period $ 890,933 $1,357,489 $ 176,879 $ 404,693 ========== ========== ========= ========= BIOTECHNOLOGY FUND BALANCED FUND ---------------------------- ------------------------------ YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED DEC. 31, 2000 DEC. 31, 1999 DEC. 31, 2000 DEC. 31, 1999** ------------- ------------- ------------- --------------- OPERATIONS: Net investment income (loss) $ (5,289) $ (63) $ 318 $ 1 Net realized gain (loss) on investments, options written, short sales and foreign currency transactions (9,901) 2,820 (30) 5 Net change in unrealized appreciation (depreciation) on investments, options written and foreign currency translations 305 3,516 (1,844) 56 -------- ------- ------- ------ Net increase (decrease) in net assets resulting from operations (14,885) 6,273 (1,556) 62 DISTRIBUTIONS TO SHAREHOLDERS FROM: Class I shares: Net investment income -- -- (315) -- In excess of net investment income -- -- -- -- Net realized gain on investments -- -- (74) -- In excess of net realized gain on investments -- -- (187) -- -------- ------- ------- ------ Total distributions, Class I -- -- (576) -- -------- ------- ------- ------ Class N shares: Net investment income -- -- -- -- In excess of net investment income -- -- -- -- Net realized gain on investments (1,032) (1,875) -- -- In excess of net realized gain on investments -- -- -- -- -------- ------- ------- ------ Total distributions, Class N (1,032) (1,875) -- -- -------- ------- ------- ------ Total distributions to shareholders (1,032) (1,875) (576) -- NET INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS* 909,448 6,561 41,544 947 Redemption fees -- -- -- -- -------- ------- ------- ------ TOTAL INCREASE (DECREASE) IN NET ASSETS 893,531 10,959 39,412 1,009 NET ASSETS: Beginning of period 14,870 3,911 1,009 -- -------- ------- ------- ------ End of period $908,401 $14,870 $40,421 $1,009 ======== ======= ======= ======
------------------------------------ * For detail on capital share transactions by class, see Statements of Changes in Net Assets Capital Stock Activity on pages 126 - 130. ** Period from December 15, 1999 (commencement of operations) to December 31, 1999. The accompanying notes are an integral part of the financial statements. Page 121 Dresdner RCM Global Funds Statements of Changes in Net Assets (All numbers in thousands)
GLOBAL EQUITY FUND GLOBAL SMALL CAP FUND ---------------------------- ---------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DEC. 31, 2000 DEC. 31, 1999 DEC. 31, 2000 DEC. 31, 1999 ------------- ------------- ------------- ------------- OPERATIONS: Net investment income (loss) $ (8) $ (3) $ (400) $ (82) Net realized gain (loss) on investments, options written, short sales and foreign currency transactions 277 140 (1,077) 1,566 Net change in unrealized appreciation (depreciation) on investments, options written and foreign currency translations (441) 482 (10,346) 5,654 ------ ------ -------- ------- Net increase (decrease) in net assets resulting from operations (172) 619 (11,823) 7,138 DISTRIBUTIONS TO SHAREHOLDERS FROM: Class I shares: Net investment income (1) -- -- -- In excess of net investment income -- (6) -- -- Net realized gain on investments (383) (29) (458) (868) In excess of net realized gain on investments (19) -- (1,212) -- ------ ------ -------- ------- Total distributions, Class I (403) (35) (1,670) (868) ------ ------ -------- ------- Class N shares: Net investment income -- -- -- -- In excess of net investment income -- -- -- -- Net realized gain on investments -- -- (334) (86) In excess of net realized gain on investments -- -- (885) -- ------ ------ -------- ------- Total distributions, Class N -- -- (1,219) (86) ------ ------ -------- ------- Total distributions to shareholders (403) (35) (2,889) (954) NET INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS* 362 -- 22,653 13,840 Redemption fees -- -- -- -- ------ ------ -------- ------- TOTAL INCREASE (DECREASE) IN NET ASSETS (213) 584 7,941 20,024 NET ASSETS: Beginning of period 1,584 1,000 25,503 5,479 ------ ------ -------- ------- End of period $1,371 $1,584 $ 33,444 $25,503 ====== ====== ======== =======
------------------------------------ * For detail on capital share transactions by class, see Statements of Changes in Net Assets Capital Stock Activity on pages 126 - 130. ** Period from December 15, 1999 (commencement of operations) to December 31, 1999. The accompanying notes are an integral part of the financial statements. Page 122 Dresdner RCM Global Funds Statements of Changes in Net Assets (All numbers in thousands)
GLOBAL TECHNOLOGY FUND GLOBAL HEALTH CARE FUND ---------------------------- ---------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DEC. 31, 2000 DEC. 31, 1999 DEC. 31, 2000 DEC. 31, 1999 ------------- ------------- ------------- ------------- OPERATIONS: Net investment income (loss) $ (3,041) $ (741) $ (652) $ (44) Net realized gain (loss) on investments, options written, short sales and foreign currency transactions (189,550) 10,634 7,154 1,311 Net change in unrealized appreciation (depreciation) on investments, options written and foreign currency translations (77,386) 101,302 10,967 206 --------- -------- -------- ------- Net increase (decrease) in net assets resulting from operations (269,977) 111,195 17,469 1,473 DISTRIBUTIONS TO SHAREHOLDERS FROM: Class I shares: Net investment income -- -- -- -- In excess of net investment income -- -- -- -- Net realized gain on investments (2,803) (4,100) (980) -- In excess of net realized gain on investments -- -- -- -- --------- -------- -------- ------- Total distributions, Class I (2,803) (4,100) (980) -- --------- -------- -------- ------- Class N shares: Net investment income -- -- -- -- In excess of net investment income -- -- -- -- Net realized gain on investments (3,267) (1,490) -- (1,103) In excess of net realized gain on investments -- -- -- -- --------- -------- -------- ------- Total distributions, Class N (3,267) (1,490) -- (1,103) --------- -------- -------- ------- Total distributions to shareholders (6,070) (5,590) (980) (1,103) NET INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS* 740,216 156,064 234,136 427 Redemption fees -- -- -- -- --------- -------- -------- ------- TOTAL INCREASE (DECREASE) IN NET ASSETS 464,169 261,669 250,625 797 NET ASSETS: Beginning of period 280,227 18,558 6,284 5,487 --------- -------- -------- ------- End of period $ 744,396 $280,227 $256,909 $ 6,284 ========= ======== ======== ======= INTERNATIONAL GROWTH EQUITY FUND EMERGING MARKETS FUND ---------------------------- ---------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DEC. 31, 2000 DEC. 31, 1999 DEC. 31, 2000 DEC. 31, 1999 ------------- ------------- ------------- ------------- OPERATIONS: Net investment income (loss) $ (127) $ 196 $ (4) $ (5) Net realized gain (loss) on investments, options written, short sales and foreign currency transactions 7,374 36,900 (622) 930 Net change in unrealized appreciation (depreciation) on investments, options written and foreign currency translations (97,396) 65,058 (2,468) 1,662 -------- -------- ------- ------ Net increase (decrease) in net assets resulting from operations (90,149) 102,154 (3,094) 2,587 DISTRIBUTIONS TO SHAREHOLDERS FROM: Class I shares: Net investment income -- (854) -- -- In excess of net investment income (4,137) (1,135) -- -- Net realized gain on investments (21,041) (16,421) (236) (144) In excess of net realized gain on investments (9,154) -- -- -- -------- -------- ------- ------ Total distributions, Class I (34,332) (18,410) (236) (144) -------- -------- ------- ------ Class N shares: Net investment income -- (4) -- -- In excess of net investment income (71) (6) -- -- Net realized gain on investments (421) (92) (94) (5) In excess of net realized gain on investments (183) -- -- -- -------- -------- ------- ------ Total distributions, Class N (675) (102) (94) (5) -------- -------- ------- ------ Total distributions to shareholders (35,007) (18,512) (330) (149) NET INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS* 68,259 81,682 5,335 281 Redemption fees -- -- -- -- -------- -------- ------- ------ TOTAL INCREASE (DECREASE) IN NET ASSETS (56,897) 165,324 1,911 2,719 NET ASSETS: Beginning of period 287,299 121,975 5,453 2,734 -------- -------- ------- ------ End of period $230,402 $287,299 $ 7,364 $5,453 ======== ======== ======= ======
------------------------------------ * For detail on capital share transactions by class, see Statements of Changes in Net Assets Capital Stock Activity on pages 126 - 130. ** Period from December 15, 1999 (commencement of operations) to December 31, 1999. The accompanying notes are an integral part of the financial statements. Page 123 Dresdner RCM Global Funds Statements of Changes in Net Assets (All numbers in thousands)
EUROPE FUND STRATEGIC INCOME FUND ---------------------------- ---------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DEC. 31, 2000 DEC. 31, 1999 DEC. 31, 2000 DEC. 31, 1999 ------------- ------------- ------------- ------------- OPERATIONS: Net investment income (loss) $ (891) $ (110) $ 70 $ 159 Net realized gain (loss) on investments, options written, short sales and foreign currency transactions 9,098 34,049 (40) (28) Net change in unrealized appreciation (depreciation) on investments, options written and foreign currency translations (18,849) (21,415) 52 (52) -------- --------- ------- ------ Net increase (decrease) in net assets resulting from operations (10,642) 12,524 82 79 DISTRIBUTIONS TO SHAREHOLDERS FROM: Class I shares: Net investment income -- -- (90) (159) In excess of net investment income -- -- -- (54) Net realized gain on investments (406) -- -- -- In excess of net realized gain on investments -- -- -- -- -------- --------- ------- ------ Total distributions, Class I (406) -- (90) (213) -------- --------- ------- ------ Class N shares: Net investment income -- -- -- -- In excess of net investment income -- (336) -- -- Net realized gain on investments (10,827) (16,858) -- -- In excess of net realized gain on investments -- -- -- -- -------- --------- ------- ------ Total distributions, Class N (10,827) (17,194) -- -- -------- --------- ------- ------ Total distributions to shareholders (11,233) (17,194) (90) (213) NET INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS* 15,471 (119,298) (2,000) -- Redemption fees -- 540 -- -- -------- --------- ------- ------ TOTAL INCREASE (DECREASE) IN NET ASSETS (6,404) (123,428) (2,008) (134) NET ASSETS: Beginning of period 67,910 191,338 2,866 3,000 -------- --------- ------- ------ End of period $ 61,506 $ 67,910 $ 858 $2,866 ======== ========= ======= ======
------------------------------------ * For detail on capital share transactions by class, see Statements of Changes in Net Assets Capital Stock Activity on pages 126 - 130. ** Period from December 15, 1999 (commencement of operations) to December 31, 1999. The accompanying notes are an integral part of the financial statements. Page 124 (THIS PAGE INTENTIONALLY LEFT BLANK) Page 125 Dresdner RCM Global Funds Statements of Changes in Net Assets Capital Stock Activity (All numbers in thousands)
LARGE CAP GROWTH FUND TAX MANAGED GROWTH FUND ---------------------------- ---------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DEC. 31, 2000 DEC. 31, 1999 DEC. 31, 2000 DEC. 31, 1999 ------------- ------------- ------------- ------------- FUND SHARE TRANSACTIONS DOLLAR AMOUNTS: Class I: Sold $33,213 $ 7,126 $31,546 $ -- Issued to shareholders in reinvestment of distributions 1,307 2,468 -- -- Repurchased (1,866) (4,708) (3,095) -- ------- ------- ------- ------ Net increase (decrease), Class I $32,654 $ 4,886 $28,451 $ -- ======= ======= ======= ====== Class N: Sold $29,425 $ 875 $ 8,196 $ 649 Issued to shareholders in reinvestment of distributions 771 40 -- 6 Repurchased (4,881) (7) (2,224) -- ------- ------- ------- ------ Net increase (decrease), Class N $25,315 $ 908 $ 5,972 $ 655 ======= ======= ======= ====== SHARE AMOUNTS: Class I: Sold 1,712 414 1,973 -- Issued to shareholders in reinvestment of distributions 75 140 -- -- Repurchased (97) (265) (203) -- ------- ------- ------- ------ Net increase (decrease), Class I 1,690 289 1,770 -- ======= ======= ======= ====== Class N: Sold 1,519 47 542 51 Issued to shareholders in reinvestment of distributions 44 2 -- --(a) Repurchased (254) --(a) (153) -- ------- ------- ------- ------ Net increase (decrease), Class N 1,309 49 389 51 ======= ======= ======= ====== PURCHASES AND SALES OF INVESTMENT SECURITIES: (EXCLUDING SHORT-TERM SECURITIES) Purchases of securities $69,695 $17,147 $52,527 $2,141 Proceeds from sales of securities 14,971 12,789 19,775 593 Purchases of long-term U.S. Government obligations 929 -- -- -- Proceeds from sales of long-term U.S. Government obligations 213 -- -- --
------------------------------------ * Period from December 15, 1999 (commencement of operations) to December 31, 1999. ** Classs I commenced operations on March 3, 2000. (a) Amount represents less than 1,000 shares. The accompanying notes are an integral part of the financial statements. Page 126 Dresdner RCM Global Funds Statements of Changes in Net Assets Capital Stock Activity (All numbers in thousands)
MIDCAP FUND SMALL CAP FUND ---------------------------- ---------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DEC. 31, 2000 DEC. 31, 1999 DEC. 31, 2000 DEC. 31, 1999 ------------- ------------- ------------- ------------- FUND SHARE TRANSACTIONS DOLLAR AMOUNTS: Class I: Sold $ 63,373 $ 155,687 $ 19,404 $ 48,161 Issued to shareholders in reinvestment of distributions 590,884 180,435 56,741 10,459 Repurchased (592,392) (282,247) (183,070) (223,978) ---------- ---------- --------- --------- Net increase (decrease), Class I $ 61,865 $ 53,875 $(106,925) $(165,358) ========== ========== ========= ========= Class N: Sold $ 50 $ -- $ -- $ -- Issued to shareholders in reinvestment of distributions -- -- -- -- Repurchased -- -- -- -- ---------- ---------- --------- --------- Net increase (decrease), Class N $ 50 $ -- $ -- $ -- ========== ========== ========= ========= SHARE AMOUNTS: Class I: Sold 12,303 23,371 1,787 5,583 Issued to shareholders in reinvestment of distributions 175,337 24,616 8,964 1,108 Repurchased (89,735) (44,732) (22,823) (26,739) ---------- ---------- --------- --------- Net increase (decrease), Class I 97,905 3,255 (12,072) (20,048) ========== ========== ========= ========= Class N: Sold 15 -- -- -- Issued to shareholders in reinvestment of distributions -- -- -- -- Repurchased -- -- -- -- ---------- ---------- --------- --------- Net increase (decrease), Class N 15 -- -- -- ========== ========== ========= ========= PURCHASES AND SALES OF INVESTMENT SECURITIES: (EXCLUDING SHORT-TERM SECURITIES) Purchases of securities $2,467,579 $1,910,060 $ 690,326 $ 486,026 Proceeds from sales of securities 2,902,001 1,997,527 794,883 619,777 Purchases of long-term U.S. Government obligations -- -- -- -- Proceeds from sales of long-term U.S. Government obligations -- -- -- -- BIOTECHNOLOGY FUND BALANCED FUND ---------------------------- ----------------------------- YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED DEC. 31, 2000 DEC. 31, 1999 DEC. 31, 2000 DEC. 31, 1999* ------------- ------------- ------------- -------------- FUND SHARE TRANSACTIONS DOLLAR AMOUNTS: Class I: Sold $ -- $ -- $46,202 $ 947 Issued to shareholders in reinvestment of distributions -- -- 572 -- Repurchased -- -- (5,230) -- ---------- ------- ------- ------ Net increase (decrease), Class I $ -- $ -- $41,544 $ 947 ========== ======= ======= ====== Class N: Sold $1,551,887 $ 6,483 $ -- $ -- Issued to shareholders in reinvestment of distributions 965 872 -- -- Repurchased (643,404) (794) -- -- ---------- ------- ------- ------ Net increase (decrease), Class N $ 909,448 $ 6,561 $ -- $ -- ========== ======= ======= ====== SHARE AMOUNTS: Class I: Sold -- -- 4,324 95 Issued to shareholders in reinvestment of distributions -- -- 54 -- Repurchased -- -- (492) -- ---------- ------- ------- ------ Net increase (decrease), Class I -- -- 3,886 95 ========== ======= ======= ====== Class N: Sold 42,768 401 -- -- Issued to shareholders in reinvestment of distributions 28 55 -- -- Repurchased (18,579) (55) -- -- ---------- ------- ------- ------ Net increase (decrease), Class N 24,217 401 -- -- ========== ======= ======= ====== PURCHASES AND SALES OF INVESTMENT SECURITIES: (EXCLUDING SHORT-TERM SECURITIES) Purchases of securities $2,066,241 $27,104 $27,005 $1,475 Proceeds from sales of securities 1,184,943 24,690 16,622 551 Purchases of long-term U.S. Government obligations -- -- 15,736 -- Proceeds from sales of long-term U.S. Government obligations -- -- 21,200 --
------------------------------------ * Period from December 15, 1999 (commencement of operations) to December 31, 1999. ** Classs I commenced operations on March 3, 2000. (a) Amount represents less than 1,000 shares. The accompanying notes are an integral part of the financial statements. Page 127 Dresdner RCM Global Funds Statements of Changes in Net Assets Capital Stock Activity (All numbers in thousands)
GLOBAL EQUITY FUND GLOBAL SMALL CAP FUND ---------------------------- ---------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DEC. 31, 2000 DEC. 31, 1999 DEC. 31, 2000 DEC. 31, 1999 ------------- ------------- ------------- ------------- FUND SHARE TRANSACTIONS DOLLAR AMOUNTS: Class I: Sold $ -- $ -- $ 52,883 $13,423 Issued to shareholders in reinvestment of distributions 362 -- 1,629 154 Repurchased -- -- (53,896) (920) ------ ------ -------- ------- Net increase (decrease), Class I $ 362 $ -- $ 616 $12,657 ====== ====== ======== ======= Class N: Sold $ -- $ -- $ 74,031 $ 1,118 Issued to shareholders in reinvestment of distributions -- -- 1,195 85 Repurchased -- -- (53,189) (20) ------ ------ -------- ------- Net increase (decrease), Class N $ -- $ -- $ 22,037 $ 1,183 ====== ====== ======== ======= SHARE AMOUNTS: Class I: Sold -- -- 2,138 636 Issued to shareholders in reinvestment of distributions 36 -- 87 7 Repurchased -- -- (2,299) (56) ------ ------ -------- ------- Net increase (decrease), Class I 36 -- (74) 587 ====== ====== ======== ======= Class N: Sold -- -- 2,947 58 Issued to shareholders in reinvestment of distributions -- -- 64 4 Repurchased -- -- (2,231) (1) ------ ------ -------- ------- Net increase (decrease), Class N -- -- 780 61 ====== ====== ======== ======= PURCHASES AND SALES OF INVESTMENT SECURITIES: (EXCLUDING SHORT-TERM SECURITIES) Purchases of securities $2,556 $2,077 $101,869 $24,604 Proceeds from sales of securities 2,564 1,617 80,987 12,387 Purchases of long-term U.S. Government obligations -- -- -- -- Proceeds from sales of long-term U.S. Government obligations -- -- -- --
------------------------------------ * Period from December 15, 1999 (commencement of operations) to December 31, 1999. ** Classs I commenced operations on March 3, 2000. (a) Amount represents less than 1,000 shares. The accompanying notes are an integral part of the financial statements. Page 128 Dresdner RCM Global Funds Statements of Changes in Net Assets Capital Stock Activity (All numbers in thousands)
GLOBAL TECHNOLOGY FUND GLOBAL HEALTH CARE FUND ---------------------------- ---------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DEC. 31, 2000 DEC. 31, 1999 DEC. 31, 2000 DEC. 31, 1999 ------------- ------------- ------------- ------------- FUND SHARE TRANSACTIONS DOLLAR AMOUNTS: Class I: Sold $ 605,901 $125,712 $ -- $ -- Issued to shareholders in reinvestment of distributions 2,606 4,025 -- -- Repurchased (332,880) (31,266) -- -- ---------- -------- --------- ------- Net increase (decrease), Class I $ 275,627 $ 98,471 $ -- $ -- ========== ======== ========= ======= Class N: Sold $ 778,255 $ 64,142 $ 376,591 $ 748 Issued to shareholders in reinvestment of distributions 3,156 1,438 879 67 Repurchased (316,822) (7,987) (143,334) (388) ---------- -------- --------- ------- Net increase (decrease), Class N $ 464,589 $ 57,593 $ 234,136 $ 427 ========== ======== ========= ======= SHARE AMOUNTS: Class I: Sold 8,821 3,164 -- -- Issued to shareholders in reinvestment of distributions 48 76 -- -- Repurchased (4,932) (765) -- -- ---------- -------- --------- ------- Net increase (decrease), Class I 3,937 2,475 -- -- ========== ======== ========= ======= Class N: Sold 10,874 1,564 16,477 56 Issued to shareholders in reinvestment of distributions 59 27 37 5 Repurchased (4,777) (199) (6,510) (29) ---------- -------- --------- ------- Net increase (decrease), Class N 6,156 1,392 10,004 32 ========== ======== ========= ======= PURCHASES AND SALES OF INVESTMENT SECURITIES: (EXCLUDING SHORT-TERM SECURITIES) Purchases of securities $3,336,766 $211,880 $ 415,481 $21,409 Proceeds from sales of securities 2,774,892 80,869 202,026 22,322 Purchases of long-term U.S. Government obligations -- -- -- -- Proceeds from sales of long-term U.S. Government obligations -- -- -- -- INTERNATIONAL GROWTH EQUITY FUND EMERGING MARKETS FUND ---------------------------- ---------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DEC. 31, 2000 DEC. 31, 1999 DEC. 31, 2000 DEC. 31, 1999 ------------- ------------- ------------- ------------- FUND SHARE TRANSACTIONS DOLLAR AMOUNTS: Class I: Sold $ 684,800 $ 182,299 $ 3,992 $ 56 Issued to shareholders in reinvestment of distributions 30,981 17,745 69 2 Repurchased (652,812) (119,912) (1,500) (17) --------- --------- ------- ------ Net increase (decrease), Class I $ 62,969 $ 80,132 $ 2,561 $ 41 ========= ========= ======= ====== Class N: Sold $ 60,527 $ 2,341 $ 5,961 $ 253 Issued to shareholders in reinvestment of distributions 628 61 79 5 Repurchased (55,865) (852) (3,266) (18) --------- --------- ------- ------ Net increase (decrease), Class N $ 5,290 $ 1,550 $ 2,774 $ 240 ========= ========= ======= ====== SHARE AMOUNTS: Class I: Sold 37,003 10,871 211 5 Issued to shareholders in reinvestment of distributions 2,261 872 6 --(a) Repurchased (35,773) (7,103) (92) (1) --------- --------- ------- ------ Net increase (decrease), Class I 3,491 4,640 125 4 ========= ========= ======= ====== Class N: Sold 3,448 130 380 19 Issued to shareholders in reinvestment of distributions 45 3 7 --(a) Repurchased (3,200) (55) (224) (1) --------- --------- ------- ------ Net increase (decrease), Class N 293 78 163 18 ========= ========= ======= ====== PURCHASES AND SALES OF INVESTMENT SECURITIES: (EXCLUDING SHORT-TERM SECURITIES) Purchases of securities $ 509,065 $ 280,952 $16,324 $7,324 Proceeds from sales of securities 469,693 224,692 12,061 7,103 Purchases of long-term U.S. Government obligations -- -- -- -- Proceeds from sales of long-term U.S. Government obligations -- -- -- --
------------------------------------ * Period from December 15, 1999 (commencement of operations) to December 31, 1999. ** Classs I commenced operations on March 3, 2000. (a) Amount represents less than 1,000 shares. The accompanying notes are an integral part of the financial statements. Page 129 Dresdner RCM Global Funds Statements of Changes in Net Assets Capital Stock Activity (All numbers in thousands)
EUROPE FUND STRATEGIC INCOME FUND ------------------------------ ---------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DEC. 31, 2000** DEC. 31, 1999 DEC. 31, 2000 DEC. 31, 1999 --------------- ------------- ------------- ------------- FUND SHARE TRANSACTIONS DOLLAR AMOUNTS: Class I: Sold $ 2,996 $ -- $ -- $ -- Issued to shareholders in reinvestment of distributions 406 -- -- -- Repurchased (2,623) -- (2,000) -- --------- --------- ------- ------- Net increase (decrease), Class I $ 779 $ -- $(2,000) $ -- ========= ========= ======= ======= Class N: Sold $ 260,463 $ 10,001 $ -- $ -- Issued to shareholders in reinvestment of distributions 7,606 8,465 -- -- Repurchased (253,377) (137,764) -- -- --------- --------- ------- ------- Net increase (decrease), Class N $ 14,692 $(119,298) $ -- $ -- ========= ========= ======= ======= SHARE AMOUNTS: Class I: Sold 186 -- -- -- Issued to shareholders in reinvestment of distributions 35 -- -- -- Repurchased (221) -- (211) -- --------- --------- ------- ------- Net increase (decrease), Class I --(a) -- (211) -- ========= ========= ======= ======= Class N: Sold 16,086 583 -- -- Issued to shareholders in reinvestment of distributions 660 535 -- -- Repurchased (15,776) (10,914) -- -- --------- --------- ------- ------- Net increase (decrease), Class N 970 (9,796) -- -- ========= ========= ======= ======= PURCHASES AND SALES OF INVESTMENT SECURITIES: (EXCLUDING SHORT-TERM SECURITIES) Purchases of securities $ 132,020 $ 202,304 $ 193 $11,635 Proceeds from sales of securities 127,079 362,350 2,040 8,896 Purchases of long-term U.S. Government obligations -- -- 1,124 -- Proceeds from sales of long-term U.S. Government obligations -- -- 1,328 --
------------------------------------ * Period from December 15, 1999 (commencement of operations) to December 31, 1999. ** Classs I commenced operations on March 3, 2000. (a) Amount represents less than 1,000 shares. The accompanying notes are an integral part of the financial statements. Page 130 Dresdner RCM Global Funds Financial Highlights For a share outstanding throughout each fiscal year or period ended:
LARGE CAP GROWTH FUND ------------------------------------------------------------------------------------- CLASS I CLASS N ----------------------------------------------------------- --------------------- DECEMBER 31, ------------------------------------------------------------------------------------- 2000 1999 1998 1997 1996(4) 2000 1999(10) ------- -------- -------- -------- -------- -------- -------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 19.07 $ 16.14 $12.53 $10.00 $10.00 $ 19.00 $16.60 ------- ------- ------ ------ ------ ------- ------ Income from investment operations: Net investment income (loss) (1) (0.02) (0.05) (0.02) 0.01 -- (0.05) (0.08) Net realized and unrealized gain (loss) on investments (1.55) 6.95 5.51 3.17 -- (1.57) 6.45 ------- ------- ------ ------ ------ ------- ------ Total from investment operations (1.57) 6.90 5.49 3.18 -- (1.62) 6.37 Less distributions: From net investment income -- -- (0.01) (0.01) -- -- -- In excess of net investment income -- -- -- -- -- -- -- From net realized gain on investments (0.14) (3.97) (1.87) (0.64) -- (0.14) (3.97) In excess of net realized gain on investments (0.47) -- -- -- -- (0.47) -- ------- ------- ------ ------ ------ ------- ------ Total distributions (0.61) (3.97) (1.88) (0.65) -- (0.61) (3.97) ------- ------- ------ ------ ------ ------- ------ NET ASSET VALUE, END OF PERIOD $ 16.89 $ 19.07 $16.14 $12.53 $10.00 $ 16.77 $19.00 ------- ------- ------ ------ ------ ------- ------ ------- ------- ------ ------ ------ ------- ------ TOTAL RETURN (8) (8.37)% 44.84% 44.11% 31.99% 0.00% (8.71)% 40.48% ------- ------- ------ ------ ------ ------- ------ ------- ------- ------ ------ ------ ------- ------ RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in 000's) $41,741 $14,898 $7,935 $5,025 $4,000 $22,782 $ 926 ------- ------- ------ ------ ------ ------- ------ ------- ------- ------ ------ ------ ------- ------ Ratio of expenses to average net assets: With waiver and reimbursement (16) 0.88% 0.95% 0.95% 0.95% 0.00%(9) 1.08% 1.20% ------- ------- ------ ------ ------ ------- ------ ------- ------- ------ ------ ------ ------- ------ Without waiver and reimbursement (16) 1.37% 2.45% 3.04% 2.63% --% 1.74% 60.04% ------- ------- ------ ------ ------ ------- ------ ------- ------- ------ ------ ------ ------- ------ Ratio of net investment income to average net assets (16) (0.13)% (0.26)% (0.11)% 0.10% 0.00%(9) (0.29)% (0.55)% ------- ------- ------ ------ ------ ------- ------ ------- ------- ------ ------ ------ ------- ------ Portfolio turnover 41.67% 109.29% 99.58% 119.87% 0.00% 41.67% 109.29% ------- ------- ------ ------ ------ ------- ------ ------- ------- ------ ------ ------ ------- ------
------------------------------------ For Footnote References, see "Notes to Financial Highlights."
TAX MANAGED GROWTH FUND ----------------------------------------------------------- CLASS I CLASS N --------------------------------- --------------------- DECEMBER 31, ----------------------------------------------------------- 2000 1999 1998(6) 2000 1999(11) ------- -------- -------- -------- -------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 14.99 $10.00 $10.00 $14.95 $10.34 ------- ------ ------ ------ ------ Income from investment operations: Net investment income (loss) (1) (0.09) (0.06) -- (0.11) (0.29) Net realized and unrealized gain (loss) on investments (1.12) 5.28 -- (1.09) 5.13 ------- ------ ------ ------ ------ Total from investment operations (1.21) 5.22 -- (1.20) 4.84 Less distributions: From net realized gain on investments -- (0.21) -- -- (0.21) In excess of net realized gain on investments -- (0.02) -- -- (0.02) ------- ------ ------ ------ ------ Total distributions -- (0.23) -- -- (0.23) ------- ------ ------ ------ ------ Redemption fees --# -- -- --# -- ------- ------ ------ ------ ------ NET ASSET VALUE, END OF PERIOD $ 13.78 $14.99 $10.00 $13.75 $14.95 ------- ------ ------ ------ ------ ------- ------ ------ ------ ------ TOTAL RETURN (8) (8.07)% 52.44% 0.00% (8.09)% 47.07% ------- ------ ------ ------ ------ ------- ------ ------ ------ ------ RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in 000's) $25,774 $1,499 $1,000 $6,052 $ 759 ------- ------ ------ ------ ------ ------- ------ ------ ------ ------ Ratio of expenses to average net assets: With waiver and reimbursement (16) 1.25% 1.25% 0.00%(9) 1.50% 1.50% ------- ------ ------ ------ ------ ------- ------ ------ ------ ------ Without waiver and reimbursement (16) 1.58% 14.36% --% 3.03% 35.08% ------- ------ ------ ------ ------ ------- ------ ------ ------ ------ Ratio of net investment income to average net assets (16) (0.58)% (0.47)% 0.00%(9) (0.75)% (2.66)% ------- ------ ------ ------ ------ ------- ------ ------ ------ ------ Portfolio turnover 85.18% 43.35% 0.00% 85.18% 43.35% ------- ------ ------ ------ ------ ------- ------ ------ ------ ------
------------------------------------ For Footnote References, see "Notes to Financial Highlights." Page 131 Dresdner RCM Global Funds Financial Highlights For a share outstanding throughout each fiscal year or period ended:
MIDCAP FUND ----------------------------------------------------------------------- CLASS I CLASS N ---------------------------------------------------------- -------- DECEMBER 31, ----------------------------------------------------------------------- 2000 1999 1998 1997 1996(2) 2000(19) ------ -------- -------- -------- -------- -------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 8.02 $ 5.87 $ 6.23 $ 6.40 $ 9.13 $ 3.33 ------ ------ ------ ------ ------ ------ Income from investment operations: Net investment income (loss) (1) (0.04) (0.01) -- (0.01) (0.01) -- Net realized and unrealized gain on investments 0.20 3.42 0.81 1.08 1.59 -- ------ ------ ------ ------ ------ ------ Total from investment operations 0.16 3.41 0.81 1.07 1.58 -- Less distributions: From net realized gain on investments (4.34) (1.26) (1.17) (1.24) (4.31) -- In excess of net realized gain on investments (0.51) -- -- -- -- -- ------ ------ ------ ------ ------ ------ Total distributions (4.85) (1.26) (1.17) (1.24) (4.31) -- ------ ------ ------ ------ ------ ------ NET ASSET VALUE, END OF PERIOD $ 3.33 $ 8.02 $ 5.87 $ 6.23 $ 6.40 $ 3.33 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ TOTAL RETURN (8) 1.25% 60.18% 15.06% 17.50% 19.07% 0.00% ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in 000's) $ 891 $1,357 $ 975 $ 961 $ 896 $ 50 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Ratio of expenses to average net assets 0.76% 0.77% 0.76% 0.76% 0.84% 0.00% ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Ratio of net investment income to average net assets (0.41)% (0.22)% (0.01)% (0.17)% (0.12)% 0.00% ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Portfolio turnover 192.99% 198.17% 168.24% 155.10% 115.89% 192.99% ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
------------------------------------ For Footnote References, see "Notes to Financial Highlights."
SMALL CAP FUND ------------------------------------------------------------ CLASS I ------------------------------------------------------------ DECEMBER 31, ------------------------------------------------------------ 2000 1999 1998 1997 1996(3) -------- -------- -------- -------- -------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 10.23 $ 9.36 $11.66 $11.77 $11.35 -------- ------ ------ ------ ------ Income from investment operations: Net investment loss (1) (0.06) (0.06) (0.07) (0.08) (0.08) Net realized and unrealized gain (loss) on investments (1.81) 1.20 --(17) 2.29 3.82 -------- ------ ------ ------ ------ Total from investment operations (1.87) 1.14 (0.07) 2.21 3.74 Less distributions: From net investment income -- -- -- -- -- In excess of net investment income -- (0.27) -- -- -- From net realized gain on investments (1.36) -- (2.23) (2.32) (3.32) In excess of net realized gain on investments (0.57) -- -- -- -- -------- ------ ------ ------ ------ Total distributions (1.93) (0.27) (2.23) (2.32) (3.32) -------- ------ ------ ------ ------ NET ASSET VALUE, END OF PERIOD $ 6.43 $10.23 $ 9.36 $11.66 $11.77 -------- ------ ------ ------ ------ -------- ------ ------ ------ ------ TOTAL RETURN (8) (17.87)% 12.40% 1.11% 19.49% 34.39% -------- ------ ------ ------ ------ -------- ------ ------ ------ ------ RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in 000's) $176,879 $ 405 $ 558 $ 661 $ 569 -------- ------ ------ ------ ------ -------- ------ ------ ------ ------ Ratio of expenses to average net assets 1.02% 1.02% 1.01% 1.02% 1.00% -------- ------ ------ ------ ------ -------- ------ ------ ------ ------ Ratio of net investment income to average net assets (0.57)% (0.71)% (0.61)% (0.68)% (0.58)% -------- ------ ------ ------ ------ -------- ------ ------ ------ ------ Portfolio turnover 206.80% 116.42% 131.85% 117.64% 117.00% -------- ------ ------ ------ ------ -------- ------ ------ ------ ------
------------------------------------ For Footnote References, see "Notes to Financial Highlights." Page 132 Dresdner RCM Global Funds Financial Highlights For a share outstanding throughout each fiscal year or period ended:
BIOTECHNOLOGY FUND ----------------------------------------------- CLASS N ----------------------------------------------- DECEMBER 31, ----------------------------------------------- 2000 1999 1998 1997(5) -------- -------- -------- -------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 20.02 $ 11.44 $10.00 $10.00 -------- ------- ------ ------ Income from investment operations: Net investment income (loss) (1) (0.37) (0.15) (0.10) -- Net realized and unrealized gain on investments 16.78(17) 12.03 1.86 -- -------- ------- ------ ------ Total from investment operations 16.41 11.88 1.76 -- Less distributions: From net investment income -- -- -- -- In excess of net investment income -- -- -- -- From net realized gain on investments (0.04) (3.30) (0.32) -- -------- ------- ------ ------ Total distributions (0.04) (3.30) (0.32) -- -------- ------- ------ ------ NET ASSET VALUE, END OF PERIOD $ 36.39 $ 20.02 $11.44 $10.00 -------- ------- ------ ------ -------- ------- ------ ------ TOTAL RETURN (8) 81.93% 111.39% 17.76% 0.00%(9) -------- ------- ------ ------ -------- ------- ------ ------ RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in 000's) $908,401 $14,870 $3,911 $3,000 -------- ------- ------ ------ -------- ------- ------ ------ Ratio of expenses to average net assets: With waiver and reimbursement (16) 1.50% 1.50% 1.50% 0.01%(9) -------- ------- ------ ------ -------- ------- ------ ------ Without waiver and reimbursement (16) 1.53% 4.53% 4.87% --% -------- ------- ------ ------ -------- ------- ------ ------ Ratio of net investment income to average net assets (16) (1.06)% (1.09)% (0.95)% 0.01%(9) -------- ------- ------ ------ -------- ------- ------ ------ Portfolio turnover 250.28% 431.27% 127.21% 0.00% -------- ------- ------ ------ -------- ------- ------ ------
------------------------------------ For Footnote References, see "Notes to Financial Highlights."
BALANCED FUND -------------------- CLASS I -------------------- DECEMBER 31, -------------------- 2000 1999(14) ------- -------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 10.65 $10.00 ------- ------ Income from investment operations: Net investment income(1) 0.22 0.01 Net realized and unrealized gain (loss) on investments (0.49) 0.64 ------- ------ Total from investment operations (0.27) 0.65 Less distributions: From net investment income (0.16) -- In excess of net investment income -- -- From net realized gain on investments (0.02) -- In excess of net realized gain on investments (0.05) -- ------- ------ Total distributions (0.23) -- ------- ------ NET ASSET VALUE, END OF PERIOD $ 10.15 $10.65 ------- ------ ------- ------ TOTAL RETURN (8) (2.64)% 6.50% ------- ------ ------- ------ RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in 000's) $40,421 $1,009 ------- ------ ------- ------ Ratio of expenses to average net assets: With waiver and reimbursement (16) 0.90% 0.90% ------- ------ ------- ------ Without waiver and reimbursement (16) 2.25% 41.29% ------- ------ ------- ------ Ratio of net investment income to average net assets (16) 2.09% 1.41% ------- ------ ------- ------ Portfolio turnover 131.94% 59.94% ------- ------ ------- ------
------------------------------------ For Footnote References, see "Notes to Financial Highlights." Page 133 Dresdner RCM Global Funds Financial Highlights For a share outstanding throughout each fiscal year or period ended:
GLOBAL EQUITY FUND -------------------------------- CLASS I -------------------------------- DECEMBER 31, -------------------------------- 2000 1999 1998(6) ------ -------- -------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $15.84 $10.00 $10.00 ------ ------ ------ Income from investment operations: Net investment income (loss) (1) (0.08) (0.03) -- Net realized and unrealized gain (loss) on investments (1.62) 6.22 -- ------ ------ ------ Total from investment operations (1.70) 6.19 -- Less distributions: From net investment income (0.02) -- -- In excess of net investment income -- (0.06) -- From net realized gain on investments (3.83) (0.29) -- In excess of net realized gain of investments (0.19) -- -- ------ ------ ------ Total distributions (4.04) (0.35) -- ------ ------ ------ NET ASSET VALUE, END OF PERIOD $10.10 $15.84 $10.00 ------ ------ ------ ------ ------ ------ TOTAL RETURN (8) (10.80)% 62.20% 0.00% ------ ------ ------ ------ ------ ------ RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in 000's) $1,371 $1,584 $1,000 ------ ------ ------ ------ ------ ------ Ratio of expenses to average net assets: With waiver and reimbursement (16) 1.25% 1.25% 0.00%(9) ------ ------ ------ ------ ------ ------ Without waiver and reimbursement (16) 11.25% 14.59% --% ------ ------ ------ ------ ------ ------ Ratio of net investment income to average net assets (16) (0.53)% (0.27)% 0.00%(9) ------ ------ ------ ------ ------ ------ Portfolio turnover 164.71% 149.96% 0.00% ------ ------ ------ ------ ------ ------
------------------------------------ For Footnote References, see "Notes to Financial Highlights."
GLOBAL SMALL CAP FUND ------------------------------------------------------------------------------------- CLASS I CLASS N ----------------------------------------------------------- --------------------- DECEMBER 31, ------------------------------------------------------------------------------------- 2000 1999 1998 1997 1996(4) 2000 1999(12) ------- -------- -------- -------- -------- -------- -------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 23.38 $ 12.37 $11.09 $10.00 $10.00 $ 23.31 $11.63 ------- ------- ------ ------ ------ ------- ------ Income from investment operations: Net investment income (loss) (1) (0.21) (0.17) (0.13) (0.13) -- (0.26) (0.21) Net realized and unrealized gain (loss) on investments (3.04) 12.96 2.23 2.64 -- (2.96) 13.67 ------- ------- ------ ------ ------ ------- ------ Total from investment operations (3.25) 12.79 2.10 2.51 -- (3.22) 13.46 Less distributions: From net investment income -- -- -- -- -- -- -- In excess of net investment income -- -- -- -- -- -- -- From net realized gain on investments (0.41) (1.78) (0.82) (1.42) -- (0.41) (1.78) In excess of net realized gain on investments (1.09) -- -- -- -- (1.09) -- ------- ------- ------ ------ ------ ------- ------ Total distributions (1.50) (1.78) (0.82) (1.42) -- (1.50) (1.78) ------- ------- ------ ------ ------ ------- ------ NET ASSET VALUE, END OF PERIOD $ 18.63 $ 23.38 $12.37 $11.09 $10.00 $ 18.59 $23.31 ------- ------- ------ ------ ------ ------- ------ ------- ------- ------ ------ ------ ------- ------ TOTAL RETURN (8) (13.88)% 104.63% 19.29% 25.48% 0.00% (13.84)% 116.97% ------- ------- ------ ------ ------ ------- ------ ------- ------- ------ ------ ------ ------- ------ RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in 000's) $17,804 $24,073 $5,479 $4,456 $4,000 $15,640 $1,430 ------- ------- ------ ------ ------ ------- ------ ------- ------- ------ ------ ------ ------- ------ Ratio of expenses to average net assets: With waiver and reimbursement (16) 1.50% 1.50% 1.75% 1.75% 0.00%(9) 1.75% 1.75% ------- ------- ------ ------ ------ ------- ------ ------- ------- ------ ------ ------ ------- ------ Without waiver and reimbursement (16) 1.70% 4.10% 3.86% 3.09% --% 2.20% 16.71% ------- ------- ------ ------ ------ ------- ------ ------- ------- ------ ------ ------ ------- ------ Ratio of net investment income to average net assets (16) (0.84)% (1.13)% (1.03)% (1.14)% 0.00%(9) (1.06)% (1.49)% ------- ------- ------ ------ ------ ------- ------ ------- ------- ------ ------ ------ ------- ------ Portfolio turnover 201.54% 161.61% 184.38% 153.49% 0.00% 201.54% 161.61% ------- ------- ------ ------ ------ ------- ------ ------- ------- ------ ------ ------ ------- ------
------------------------------------ For Footnote References, see "Notes to Financial Highlights." Page 134 Dresdner RCM Global Funds Financial Highlights For a share outstanding throughout each fiscal year or period ended:
GLOBAL TECHNOLOGY FUND ---------------------------------------------------------------------------------------- CLASS I CLASS N ------------------------------------------------------------- ---------------------- DECEMBER 31, ---------------------------------------------------------------------------------------- 2000 1999 1998 1997 1996 2000 1999(13) -------- --------- -------- -------- -------- --------- -------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 59.21 $ 21.40 $ 13.69 $12.60 $10.04 $ 59.13 $ 24.01 -------- -------- ------- ------ ------ -------- ------- Income from investment operations: Net investment loss (1) (0.18) (0.35) (0.16) (0.16) (0.15) (0.38) (0.49) Net realized and unrealized gain (loss) on investments (8.27) 39.54 8.44 3.46 2.80 (8.23) 36.99 -------- -------- ------- ------ ------ -------- ------- Total from investment operations (8.45) 39.19 8.28 3.30 2.65 (8.61) 36.50 Less distributions: From net investment income -- -- -- -- -- -- -- In excess of net investment income -- -- -- -- -- -- -- From net realized gain on investments (0.43) (1.38) (0.57) (2.21) (0.09) (0.43) (1.38) -------- -------- ------- ------ ------ -------- ------- Total distributions (0.43) (1.38) (0.57) (2.21) (0.09) (0.43) (1.38) -------- -------- ------- ------ ------ -------- ------- NET ASSET VALUE, END OF PERIOD $ 50.33 $ 59.21 $ 21.40 $13.69 $12.60 $ 50.09 $ 59.13 -------- -------- ------- ------ ------ -------- ------- -------- -------- ------- ------ ------ -------- ------- TOTAL RETURN (8) (14.33)% 182.95% 60.53% 27.08% 26.41% (14.60)% 152.69% -------- -------- ------- ------ ------ -------- ------- -------- -------- ------- ------ ------ -------- ------- RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in 000's) $366,353 $197,897 $18,558 $6,950 $5,117 $378,043 $82,330 -------- -------- ------- ------ ------ -------- ------- -------- -------- ------- ------ ------ -------- ------- Ratio of expenses to average net assets: With waiver and reimbursement (16) 1.21% 1.50% 1.75% 1.75% 1.73% 1.50% 1.75% -------- -------- ------- ------ ------ -------- ------- -------- -------- ------- ------ ------ -------- ------- Without waiver and reimbursement (16) 1.21% 1.50% 2.49% 2.45% 7.75% 1.50% 1.99% -------- -------- ------- ------ ------ -------- ------- -------- -------- ------- ------ ------ -------- ------- Ratio of net investment income to average net assets (16) (0.26)% (1.02)% (0.99)% (1.15)% (1.34)% (0.55)% (1.32)% -------- -------- ------- ------ ------ -------- ------- -------- -------- ------- ------ ------ -------- ------- Portfolio turnover 450.84% 119.32% 265.99% 189.41% 155.58% 450.84% 119.32% -------- -------- ------- ------ ------ -------- ------- -------- -------- ------- ------ ------ -------- -------
------------------------------------ For Footnote References, see "Notes to Financial Highlights."
GLOBAL HEALTH CARE FUND ------------------------------------------------------------ CLASS N ------------------------------------------------------------ DECEMBER 31, ------------------------------------------------------------ 2000 1999 1998 1997 1996(4) -------- -------- -------- -------- -------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 14.25 $13.42 $11.65 $10.00 $10.00 -------- ------ ------ ------ ------ Income from investment operations: Net investment income (loss) (1) (0.16) (0.11) (0.09) (0.06) -- Net realized and unrealized gain on investments 10.61 3.53 3.02 3.03 -- -------- ------ ------ ------ ------ Total from investment operations 10.45 3.42 2.93 2.97 -- Less distributions: From net investment income -- -- -- -- -- In excess of net investment income -- -- -- -- -- From net realized gain on investments (0.10) (2.59) (1.16) (1.32) -- -------- ------ ------ ------ ------ Total distributions (0.10) (2.59) (1.16) (1.32) -- -------- ------ ------ ------ ------ NET ASSET VALUE, END OF PERIOD $ 24.60 $14.25 $13.42 $11.65 $10.00 -------- ------ ------ ------ ------ -------- ------ ------ ------ ------ TOTAL RETURN (8) 73.37% 28.74% 25.57% 30.00% 0.00% -------- ------ ------ ------ ------ -------- ------ ------ ------ ------ RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in 000's) $256,909 $6,284 $5,487 $4,671 $4,000 -------- ------ ------ ------ ------ -------- ------ ------ ------ ------ Ratio of expenses to average net assets: With waiver and reimbursement (16) 1.50% 1.50% 1.50% 1.50% 0.00%(9) -------- ------ ------ ------ ------ -------- ------ ------ ------ ------ Without waiver and reimbursement (16) 1.64% 4.85% 3.65% 2.93% --% -------- ------ ------ ------ ------ -------- ------ ------ ------ ------ Ratio of net investment income to average net assets (16) (0.68)% (0.81)% (0.69)% (0.55)% 0.00%(9) -------- ------ ------ ------ ------ -------- ------ ------ ------ ------ Portfolio turnover 216.09% 393.83% 153.92% 157.65% 0.00% -------- ------ ------ ------ ------ -------- ------ ------ ------ ------
------------------------------------ For Footnote References, see "Notes to Financial Highlights." Page 135 Dresdner RCM Global Funds Financial Highlights For a share outstanding throughout each fiscal year or period ended:
INTERNATIONAL GROWTH EQUITY FUND ------------------------------------------------------------------------------------------ CLASS I CLASS N --------------------------------------------------------------- ---------------------- DECEMBER 31, ------------------------------------------------------------------------------------------ 2000 1999 1998 1997 1996(7) 2000 1999 (12) -------- --------- --------- --------- -------- -------- --------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 22.34 $ 14.98 $ 13.70 $ 12.72 $ 11.56 $22.31 $14.78 -------- -------- -------- -------- ------- ------ ------ Income from investment operations: Net investment income (loss) (1) (0.01) 0.02 0.06 0.06 0.04 (0.05) 0.01 Net realized and unrealized gain (loss) on investments (6.00) 8.91 1.80 2.22 2.16 (5.99) 9.08 -------- -------- -------- -------- ------- ------ ------ Total from investment operations (6.01) 8.93 1.86 2.28 2.20 (6.04) 9.09 Less distributions: From net investment income -- (0.07) (0.23) (0.14) (0.16) -- (0.07) In excess of net investment income (0.30) (0.10) -- -- -- (0.26) (0.09) From net realized gain on investments (1.52) (1.40) (0.35) (1.16) (0.88) (1.52) (1.40) In excess of net realized gain on investments (0.67) -- -- -- -- (0.67) -- -------- -------- -------- -------- ------- ------ ------ Total distributions (2.49) (1.57) (0.58) (1.30) (1.04) (2.45) (1.56) -------- -------- -------- -------- ------- ------ ------ NET ASSET VALUE, END OF PERIOD $ 13.84 $ 22.34 $ 14.98 $ 13.70 $ 12.72 $13.82 $22.31 -------- -------- -------- -------- ------- ------ ------ -------- -------- -------- -------- ------- ------ ------ TOTAL RETURN (8) (26.76)% 60.66% 13.81% 17.93% 19.31% (26.95)% 62.48% -------- -------- -------- -------- ------- ------ ------ -------- -------- -------- -------- ------- ------ ------ RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in 000's) $225,278 $285,561 $121,975 $ 98,443 $52,605 $5,124 $1,738 -------- -------- -------- -------- ------- ------ ------ -------- -------- -------- -------- ------- ------ ------ Ratio of expenses to average net assets: With waiver and reimbursement (16) 1.00% 1.00% 1.00% 1.00% 0.99% 1.25% 1.25% -------- -------- -------- -------- ------- ------ ------ -------- -------- -------- -------- ------- ------ ------ Without waiver and reimbursement (16) 1.00% 1.06% 1.06% 1.06% 1.25% 2.36% 10.89% -------- -------- -------- -------- ------- ------ ------ -------- -------- -------- -------- ------- ------ ------ Ratio of net investment income to average net assets (16) (0.04)% 0.12% 0.37% 0.41% 0.32% (0.29)% 0.07% -------- -------- -------- -------- ------- ------ ------ -------- -------- -------- -------- ------- ------ ------ Portfolio turnover 161.71% 139.69% 84.49% 122.43% 119.09% 161.71% 139.69% -------- -------- -------- -------- ------- ------ ------ -------- -------- -------- -------- ------- ------ ------
------------------------------------ For Footnote References, see "Notes to Financial Highlights."
EMERGING MARKETS FUND ------------------------------------------------------------------------ CLASS I CLASS N --------------------------------------------- ---------------------- DECEMBER 31, ------------------------------------------------------------------------ 2000 1999 1998 1997(5) 2000 1999 (12) ------ -------- -------- -------- -------- --------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $16.87 $ 9.06 $ 9.99 $10.00 $16.84 $ 9.13 ------ ------ ------ ------ ------ ------ Income from investment operations: Net investment income (loss) (1) --# (0.01) 0.12 --# (0.04) (0.06) Net realized and unrealized gain (loss) on investments (4.26) 8.29 (0.97) (0.01) (4.22) 8.24 ------ ------ ------ ------ ------ ------ Total from investment operations (4.26) 8.28 (0.85) (0.01) (4.26) 8.18 Less distributions: From net investment income -- -- (0.08) -- -- -- In excess of net investment income -- -- -- -- -- -- From net realized gain on investments (0.55) (0.47) -- -- (0.55) (0.47) ------ ------ ------ ------ ------ ------ Total distributions (0.55) (0.47) (0.08) -- (0.55) (0.47) ------ ------ ------ ------ ------ ------ NET ASSET VALUE, END OF PERIOD $12.06 $16.87 $ 9.06 $ 9.99 $12.03 $16.84 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ TOTAL RETURN (8) (25.24)% 92.12% (8.50)% --% (25.29)% 90.31% ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in 000's) $5,194 $5,154 $2,734 $2,996 $2,170 $ 299 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Ratio of expenses to average net assets: With waiver and reimbursement (16) 1.50% 1.50% 1.50% 0.01%(9) 1.75% 1.75% ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Without waiver and reimbursement (16) 4.93% 9.33% 8.29% --% 5.88% 79.18% ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Ratio of net investment income to average net assets (16) 0.03% (0.13)% 1.23% --% (0.29)% (0.68)% ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Portfolio turnover 162.14% 215.64% 279.25% --%(9) 162.14% 215.64% ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
------------------------------------ For Footnote References, see "Notes to Financial Highlights." Page 136 Dresdner RCM Global Funds Financial Highlights For a share outstanding throughout each fiscal year or period ended:
EUROPE FUND ---------------------------------------------------------------------------- CLASS I CLASS N -------- --------------------------------------------------------------- DECEMBER 31, ---------------------------------------------------------------------------- 2000(15) 2000 1999 1998 1997 1996 -------- -------- -------- --------- --------- --------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $20.58 $ 16.12 $ 13.66 $ 12.59 $ 10.66 $ 9.20 ------ ------- ------- -------- -------- -------- Income from investment operations: Net investment income (loss) (1) (0.11) (0.18) (0.01) (0.05) 0.01 0.03 Net realized and unrealized gain (loss) on investments (6.26) (1.73) 5.66 4.60 2.70 1.45 ------ ------- ------- -------- -------- -------- Total from investment operations (6.37) (1.91) 5.65 4.55 2.71 1.48 Less distributions: From net investment income -- -- -- (0.17) (0.06) (0.02) In excess of net investment income -- -- (0.02) -- -- -- From net realized gain on investments (2.34) (2.34) (3.17) (3.31) (0.72) -- ------ ------- ------- -------- -------- -------- Total distributions (2.34) (2.34) (3.19) (3.48) (0.78) (0.02) ------ ------- ------- -------- -------- -------- Redemption fees -- -- --# -- -- -- ------ ------- ------- -------- -------- -------- NET ASSET VALUE, END OF PERIOD $11.87 $ 11.87 $ 16.12 $ 13.66 $ 12.59 $ 10.66 ------ ------- ------- -------- -------- -------- ------ ------- ------- -------- -------- -------- TOTAL RETURN (8) (30.61)% (11.39)% 43.59% 37.23% 25.70% 15.87% ------ ------- ------- -------- -------- -------- ------ ------- ------- -------- -------- -------- RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in 000's) $ 4 $61,502 $67,910 $191,338 $176,414 $149,299 ------ ------- ------- -------- -------- -------- ------ ------- ------- -------- -------- -------- Ratio of expenses to average net assets (18): With waiver and reimbursement (16) 1.35% 1.60% 1.03% --% --% --% ------ ------- ------- -------- -------- -------- ------ ------- ------- -------- -------- -------- Without waiver and reimbursement (16) 9.67% 2.07% 2.01% 1.97% 1.30% 1.42% ------ ------- ------- -------- -------- -------- ------ ------- ------- -------- -------- -------- Ratio of net investment income to average net assets (16) (0.83)% (1.12)% (0.11)% --% --% --% ------ ------- ------- -------- -------- -------- ------ ------- ------- -------- -------- -------- Portfolio turnover 173.06% 173.06% 202.90% 114.00% 85.00% 51.00% ------ ------- ------- -------- -------- -------- ------ ------- ------- -------- -------- --------
------------------------------------ For Footnote References, see "Notes to Financial Highlights."
STRATEGIC INCOME FUND -------------------------------- CLASS I -------------------------------- DECEMBER 31, -------------------------------- 2000 1999 1998(6) ------ -------- -------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 9.55 $10.00 $10.00 ------ ------ ------ Income from investment operations: Net investment income(1) 0.66 0.53 -- Net realized and unrealized gain (loss) on investments 0.42 (0.27) -- ------ ------ ------ Total from investment operations 1.08 0.26 -- Less distributions: From net investment income (1.01) (0.53) -- In excess of net investment income -- (0.18) -- ------ ------ ------ Total distributions (1.01) (0.71) -- ------ ------ ------ NET ASSET VALUE, END OF PERIOD $ 9.62 $ 9.55 $10.00 ------ ------ ------ ------ ------ ------ TOTAL RETURN (8) 11.63% 2.67% 0.00% ------ ------ ------ ------ ------ ------ RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (in 000's) $ 858 $2,866 $3,000 ------ ------ ------ ------ ------ ------ Ratio of expenses to average net assets: With waiver and reimbursement (16) 1.25% 1.25% 0.00%(9) ------ ------ ------ ------ ------ ------ Without waiver and reimbursement (16) 15.49% 5.31% --% ------ ------ ------ ------ ------ ------ Ratio of net investment income to average net assets (16) 6.75% 5.38% 0.00%(9) ------ ------ ------ ------ ------ ------ Portfolio turnover 151.66% 346.34% 0.00% ------ ------ ------ ------ ------ ------
------------------------------------ For Footnote References, see "Notes to Financial Highlights." Page 137 Dresdner RCM Global Funds Notes to Financial Highlights December 31, 2000 The following notes are being used as reference items in the Financial Highlights of the Funds. (1) Calculated using the average share method. (2) Stock split 25:1 at close of business on June 17, 1996. All share amounts were restated to reflect the stock split. (3) Stock split 12:1 at close of business on June 17, 1996. All share amounts were restated to reflect the stock split. (4) Commencement of operations, for the Large Cap Growth Fund, Class I shares, the Global Small Cap Fund, Class I shares and the Global Health Care Fund, Class N shares, was December 31, 1996. (5) Commencement of operations for the Biotechnology Fund, Class N shares and the Emerging Markets Fund, Class I shares, was December 30, 1997. (6) Commencement of operations for the Tax Managed Growth Fund, Class I shares, the Global Equity Fund, Class I shares and the Strategic Income Fund, Class I shares, was December 30, 1998. (7) Stock split 10:1 at close of business on June 17, 1996. All per share amounts were restated to reflect the stock split. (8) Total return measures the change in value of an investment over the period indicated. For periods less than one year, the total return is not annualized. (9) Not annualized. Fund was in operation for less than five days. (10) Commencement of operations for the Large Cap Growth Fund, Class N shares, was March 2, 1999. (11) Commencement of operations for the Tax Managed Growth Fund, Class N shares, was February 12, 1999. (12) Commencement of operations for the Global Small Cap Fund, Class N shares, the International Growth Equity Fund, Class N shares and the Emerging Markets Fund, Class N shares, was March 9, 1999. (13) Commencement of operations for the Global Technology Fund, Class N shares, was January 20, 1999. (14) Commencement of operations for the Balanced Fund, Class I shares, was December 15, 1999. (15) Commencement of operations for the Europe Fund, Class N shares, was March 3, 2000. (16) Annualized for periods less than one year. (17) The amount shown for a share outstanding does not correspond with the aggregate net gain on investments for the period due to timing of sales and repurchases of Fund shares in relation to fluctuating market values of the investment of the Fund. (18) The operating expenses for the Dresdner RCM Europe Fund include certain non-recurring legal expenses of 0.46% and 0.32% of average net assets for the years ended December 31, 1998 and 1999, respectively, for which the insurance carrier has reimbursed the Fund 0.78% ($800,000) of the average net assets for the year ended December 31, 1999. (19) Commencement of operations for the MidCap Fund, Class N shares, was December 29, 2000. # Amount represents less than $0.01 per share. Page 138 Dresdner RCM Global Funds Notes to Financial Statements December 31, 2000 1. SIGNIFICANT ACCOUNTING POLICIES Dresdner RCM Global Funds, Inc. (the "Global Company"), and Dresdner RCM Investment Funds Inc. (the "Investment Company") are organized as Maryland corporations and are registered as open-end management investment companies under the Investment Company Act of 1940 (the "1940 Act"), as amended. The Global Company currently consists of thirteen no-load series: NON-DIVERSIFIED FUNDS Dresdner RCM Global Technology Fund (the "Global Technology Fund") Dresdner RCM Global Health Care Fund (the "Global Health Care Fund") Dresdner RCM Biotechnology Fund (the "Biotechnology Fund") Dresdner RCM International Growth Equity Fund (the "International Equity Fund") DIVERSIFIED FUNDS Dresdner RCM Large Cap Growth Fund (the "Large Cap Growth Fund") Dresdner RCM Tax Managed Growth Fund (the "Tax Managed Growth Fund") Dresdner RCM MidCap Fund (the "MidCap Fund") Dresdner RCM Small Cap Fund (the "Small Cap Fund") Dresdner RCM Balanced Fund (the "Balanced Fund") Dresdner RCM Global Equity Fund (the "Global Equity Fund") Dresdner RCM Global Small Cap Fund (the "Global Small Cap Fund") Dresdner RCM Emerging Markets Fund (the "Emerging Markets Fund") Dresdner RCM Strategic Income Fund (the "Strategic Income Fund") The Dresdner RCM Europe Fund (the "Europe Fund") is a non-diversified, no load series of the Investment Company. These fourteen series are collectively referred to as the "Funds". Effective December 29, 2000, the Board of Directors of the Dresdner RCM Capital Funds, Inc. (consisting of the MidCap Fund, Small Cap Fund and International Growth Equity Fund) (the "Capital Company") unanimously approved an Agreement and Plan of Reorganization (the "Agreement") between the Capital Company and the Global Company. The Agreement provided for the transfer of all of the assets and the assumption of all of the liabilities of each series of the Capital Company to a corresponding, newly created series of the Global Company (the "Company") in a tax free exchange for shares of the relevant series of the Company. The Funds, with the exception of the Biotechnology Fund, the Balanced Fund and the Global Health Care Fund, are presently authorized to issue two classes of shares -- Institutional shares (Class I) and Non-institutional shares (Class N). The Biotechnology Fund and the Global Health Care Fund are presently authorized to issue Class N shares, and the Balanced Fund is authorized to issue Class I shares. As of December 31, 2000, the Large Cap Growth Fund, Tax Managed Growth Fund, MidCap Fund, Global Small Cap Fund, Global Technology Fund, International Equity Fund, Emerging Markets Fund and Europe Fund have both Class I and Class N shares operational; the Small Cap Fund, Global Equity Fund, and Strategic Income Fund have only Class I shares operational. Page 139 Dresdner RCM Global Funds Notes to Financial Statements December 31, 2000 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Each class has equal pro rata interest in the assets of the relevant fund and general voting privileges. Class I and Class N shares differ with respect to distributions and certain other class-specific expenses and expense reductions. The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements. The policies are in conformity with generally accepted accounting principles in the United States of America, which require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates. A. PORTFOLIO VALUATIONS: Investment securities are stated at market value. Equity securities traded on stock exchanges are valued at the last sale price on the exchange or in the principal over-the-counter market in which such securities are traded as of the close of business on the day the securities are being valued. If there has been no sale on such day, then the security is valued at the closing bid price on such day. If no bid price is quoted on such day, then the security is valued by such method as the Board of Directors of the appropriate Company or a duly constituted committee of the Board of Directors of the appropriate Company shall determine in good faith to reflect its fair value. Readily marketable securities traded only in the over-the-counter market that are not listed on Nasdaq or similar foreign reporting service are valued at the mean bid price, or using such other comparable sources as the Board of Directors of the appropriate Company in good faith deems appropriate to reflect their fair value. Other portfolio securities held by the Funds are valued at current market value, if current market quotations are readily available for such securities. To the extent that market quotations are not readily available, such securities will be valued by whatever means the Board of Directors of the appropriate Company or a duly constituted committee of the Board of Directors of the appropriate Company in good faith deems appropriate to reflect their fair value. Short-term investments with maturities of 60 days or less are valued at amortized cost, which approximates value. B. SECURITY TRANSACTIONS, RELATED INVESTMENT INCOME AND EXPENSES: Security transactions are recorded as of the date of purchase, sale or maturity. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis and includes accretion of discount. Realized gains and losses on security transactions are determined on the identified cost basis for both financial statement and federal income tax purposes. Each Fund bears expenses incurred specifically on its behalf as well as a portion of any general expenses of the appropriate Company. Investment income, realized and unrealized gains and losses, and the common expenses of the Funds are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Funds. Each class of shares differs in its respective distribution and certain other class specific fees and expense reductions. It has been the policy of the Funds not to amortize market premiums on bonds for financial reporting purposes. In November 2000, a revised AICPA Audit and Accounting Guide, Audits of Investment Companies (the "Guide"), was issued and is effective for fiscal years beginning after December 15, 2000. The revised Guide will require the Funds to amortize premium and discount on all fixed-income securities. Upon initial adoption, each Fund will be required to adjust the cost of its fixed-income securities by the cumulative amount of amortization that would have been recognized had amortization been in effect from the purchase date of each holding. Adopting this accounting principle will not affect the Page 140 Dresdner RCM Global Funds Notes to Financial Statements December 31, 2000 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund's net asset value, but will change the classification of certain amounts between interest income and realized and unrealized gain/loss in the Statement of Operations. The Funds expect that the impact of the adoption of this principle will not be material to the financial statements. C. FOREIGN CURRENCY TRANSLATIONS AND FOREIGN INVESTMENTS: The books and records of each of the Funds are maintained in U.S. dollars. The value of securities, currencies, and other assets and liabilities denominated in currencies other than U.S. dollars are translated into U.S. dollars based upon foreign exchange rates prevailing at the end of the period. Purchases and sales of investments are translated at the contracted currency exchange rates established at the time of the trade. Income and expenses are translated at the prevailing exchange rates on the respective dates of such transactions. Net realized currency gains and losses include foreign currency gains and losses between trade date and settlement date and foreign currency translations and the difference between the amount of net investment income accrued and the U.S. dollar amount actually received. The Funds do not isolate that portion of foreign currency exchange fluctuation on investments from unrealized appreciation and depreciation, which arises from changes in market prices. Such fluctuations are included with the net unrealized appreciation or depreciation on investments. Investing in securities of foreign companies and foreign governments involves special risks and considerations not typically associated with investing in U.S. companies and securities of the U.S. Government. These risks include revaluation of currencies and the risk of appropriation. Moreover, the markets for securities of many foreign companies and foreign governments may be less liquid and the prices of such securities may be more volatile than those of comparable U.S. companies and the U.S. Government. D. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS: A forward foreign currency exchange contract ("forward contract") is an agreement between two parties to buy and sell a currency at a set price on a future date. A 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 market value of the forward contract fluctuates with changes in currency exchange rates. The forward contract is marked-to-market daily and the change in market value is recorded by the Fund as unrealized appreciation or depreciation on foreign currency translations on the Fund's Statement of Assets and Liabilities. When the forward contract is closed, the Fund records a realized gain or loss on foreign currency transactions in the Fund's Statement of Operations equal to the difference between the value at the time the forward contract was opened and the value at the time it was closed. A Fund could be exposed to risk of loss if the counter-party is unable to meet the terms of the forward contract or if the value of the currency changes unfavorably. E. OPTION ACCOUNTING PRINCIPLES: A Fund may purchase or write put and call options on stocks and stock indices as a hedge against changes in market conditions that may result in changes in the value of the Fund's portfolio securities. When a Fund writes a call or put option, an amount equal to the premium received is included in the Fund's Statement of Assets and Liabilities as an asset and an equivalent liability. The amount of the liability is subsequently marked-to-market to reflect the current market value of the option. An option listed on a traded exchange is valued at its last sale price. If there has been no sale on such Page 141 Dresdner RCM Global Funds Notes to Financial Statements December 31, 2000 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) day, then the option will be valued at the closing bid price on such day. If a written option expires on its stipulated expiration date or if the Fund enters into a closing purchase transaction, a gain or loss is realized without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is extinguished. If a written call option is exercised, a gain or loss is realized from the sale of the underlying security and the proceeds of the sale are increased by the premium originally received. If a written put option is exercised, the cost of the underlying security purchased is decreased by the premium originally received. The premium paid by a Fund for the purchase of a call or put option is included in the Fund's Statement of Assets and Liabilities as an investment and subsequently marked-to-market to reflect the current market value of the option. If an option, which the Fund has purchased, expires on the stipulated expiration date, the Fund realizes a loss in the amount of the cost of the option. If the Fund enters into a closing sale transaction, the Fund realizes a gain or loss, depending on whether proceeds from the closing sale transaction are greater or less than the cost of the option. If the Fund exercises a call option, the cost of the securities acquired by exercising the call is increased by the premium paid to buy the call. If the Fund exercises a put option, it realizes a gain or loss from the sale of the underlying security, and the proceeds from such sale are decreased by the premium originally paid. F. SHORT SALES: Each Fund, except the MidCap Fund and Small Cap Fund, may engage in short sale transactions, which obligate the Funds to replace securities borrowed by purchasing the securities at current market value sometime in the future. The Fund will incur a loss if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund will realize a gain if the price of the security declines between those dates. Until the Fund replaces the borrowed security, the Fund will maintain a segregated account with cash and/or U.S. Government securities sufficient to cover its short position on a daily basis. Proceeds from the Funds' short sales are posted as collateral with securities lenders. This collateral earns interest and the interest is used to pay each lender a fee for borrowed securities, to compensate the broker for its services, and to provide a rebate to the borrower (the Fund) for posting the collateral. The net proceeds from these transactions are shown as interest income on the Statement of Operations. As of December 31, 2000, there were no outstanding short sale transactions. G. DOLLAR ROLL TRANSACTIONS: The Balanced Fund and the Strategic Income Fund may engage in dollar roll transactions. A dollar roll transaction involves a sale by a Fund of securities that it holds with an agreement by the Fund to repurchase similar securities at an agreed upon price and date. The securities repurchased will bear the same interest as those sold and matured, but generally will be collateralized at time of delivery by different pools of mortgages with different prepayment histories than those securities sold. The Fund is paid a fee for entering into a dollar roll transaction that is accrued as income over the life of the dollar roll contract. During the period of sale and repurchase, the Fund will not be entitled to receive interest and principal payments on the securities sold. Dollar rolls enhance the Fund's yield by earning a spread between the yield on the underlying mortgage securities and short-term interest rates. Management anticipates that the proceeds of the sale will be invested in additional instruments for the Fund, and the income from these investments, together with any additional fee income received on the dollar roll transaction will generate income for the Fund exceeding the interest that would have been earned on the securities sold thereby increasing or changing the Funds Page 142 Dresdner RCM Global Funds Notes to Financial Statements December 31, 2000 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) yield. Dollar roll transactions involve the risk that the market value of the securities sold by the Fund may decline below the repurchase price of those similar securities, which the Fund is obligated to purchase or that the return earned by the Fund with the proceeds of a dollar roll may not exceed transaction costs. For the year ended December 31, 2000, the Balanced Fund earned fee income of $15,086 on dollar roll transactions and there were $6,420,649 in dollar roll commitments on liquid mortgage pass-throughs outstanding. H. FEDERAL INCOME TAXES: Each Fund is a separate entity for federal income tax purposes. Each Fund intends to comply with the requirements for qualification as a "regulated investment company" under the Internal Revenue Code of 1986, as amended (the "Code"). It is also the intention of each Fund to make distributions sufficient to avoid imposition of any excise tax under Section 4982 of the Code. Therefore, no provision has been made for Federal income or excise taxes on income and capital gains. As of December 31, 2000, the following Funds had available for federal income tax purposes unused capital losses as follows:
FUND NAME EXPIRING 2007 EXPIRING 2008 ---------------------------------------- ------------- ------------- Tax Managed Growth Fund -- $ 2,126,868 Global Technology Fund -- 19,031,079 Emerging Markets Fund -- 167,839 Strategic Income Fund $85,407 53,023
I. DISTRIBUTIONS: The Strategic Income Fund declares and distributes income dividends to shareholders monthly. The Balanced Fund declares and distributes income dividends to shareholders quarterly. All of the other Funds declare and distribute income dividends to shareholders annually. Capital gain distributions (if any) are declared and distributed to shareholders annually. Distributions to shareholders are recorded by the Funds on the ex-dividend date. Income dividends and capital gain distributions are determined in accordance with Federal income tax regulations, which may differ from generally accepted accounting principles in the United States of America, and only distributions in excess of tax basis earnings and profits are reported in the financial statements as a return of capital. Differences in the recognition or classification of income between the financial statements and tax earnings and profits which result in temporary over-distributions for financial statement purposes are classified as distributions in excess of net investment income or in excess of net realized gain on investments. These differences are primarily due to differing treatments for losses as a result of wash sales, foreign currency transactions and/or investments in passive foreign investment companies. J. SECURITIES LENDING: Effective October 31, 1999, the MidCap Fund and the Small Cap Fund entered into a Securities Lending Agreement with Morgan Stanley & Co. Incorporated ("Morgan"). The Funds receive cash collateral equal to at least 102% of the current market value of the loaned securities. The Funds invest the cash collateral in repurchase agreements through State Street Bank & Trust Company pursuant to guidelines approved by the Fund's Board of Directors. Income Page 143 Dresdner RCM Global Funds Notes to Financial Statements December 31, 2000 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) earned on the collateral is paid to Morgan monthly. The Funds receive a fee, payable monthly, negotiated by the Funds and Morgan, based on the number and duration of the lending transactions. For the year ended December 31, 2000, net securities lending income was $1,824,995 and $675,000 for the MidCap Fund and the Small Cap Fund, respectively. At December 31, 2000, securities with a market value of $74,465,091 and $12,957,355 were on loan to brokers for the MidCap Fund and the Small Cap Fund, respectively. The loans were collateralized by cash of $75,954,371 and $13,216,498 for the MidCap Fund and the Small Cap Fund, respectively. As with other extensions of credit, the Fund may bear the risk of delay in the recovery of the loaned securities or in the event of foreclosure on collateral. For the month of January 2000, the Europe Fund had a Securities Lending Agreement with State Street Global Advisors ("SSgA"). Effective February 1, 2000, the Europe Fund terminated its lending agreement with SSgA. For the year ended December 31, 2000, no securities lending income was earned for the Europe Fund. K. REDEMPTION FEES: The Tax Managed Growth Fund charges a 1.00% redemption fee to shareholders of both the I Class and the N Class who redeem shares held for less than twelve consecutive months. The redemption fee for the Tax Managed Growth Fund will remain in effect indefinitely. For the year ended December 31, 2000, the redemption fee for the Fund amounted to $47,895, which is included in the Statement of Changes in Net Assets. For the period of May 1, 1999 through October 31, 1999, the Europe Fund charged a 1.00% redemption fee to shareholders who redeemed shares held for less than twelve consecutive months. For the period from May 1, 1999 to October 31, 1999, the redemption fees for the Fund amounted to $540,588, which is included in the Statement of Changes in Net Assets. L. DELAYED DELIVERY TRANSACTIONS: Each Fund may purchase or sell securities on a delayed delivery basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. The market values of the securities purchased on a delayed delivery basis are identified as such in each applicable Fund's schedule of investments. Each Fund may receive compensation for interest forgone in the purchase of a delayed delivery security. With respect to purchase commitments, each Fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the market value of the underlying securities or if the counterpart does not perform under the contract. 2. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES Dresdner RCM Global Investors LLC ("Dresdner RCM") serves as the Funds' investment manager, subject to the authority of the Boards of Directors. The Funds pay the investment management fees to Dresdner RCM monthly. The fees are based on each Fund's average daily net assets as listed in the following table. Dresdner RCM has voluntarily agreed, until at least December 31, 2000, to pay each Fund (except the MidCap Fund, Small Cap Fund and Europe Fund) the amount, if any, by which ordinary operating expenses of the Fund for each Page 144 Dresdner RCM Global Funds Notes to Financial Statements December 31, 2000 2. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES (CONTINUED) quarter (except interest, taxes, and extraordinary expenses) exceed its annualized total expense ratio noted in the following table as a percentage of its average daily net assets. In subsequent years, each Fund will reimburse Dresdner RCM for any such payments during a five-year period to the extent that operating expenses are otherwise below the expense cap. The MidCap Fund and Small Cap Fund are each responsible for the payment of certain of their operating expenses, including brokerage and commission expenses; taxes levied on the Funds; interest charges on borrowings (if any); charges and expenses of the custodian; and payment of investment management fees due to Dresdner RCM. Dresdner RCM is responsible for all other expenses incurred by the MidCap Fund and the Small Cap Fund. Effective December 31, 2000, Dresdner RCM has voluntarily agreed, until at least June 30, 2003, to waive a portion of its fee and to pay the MidCap Fund and Small Cap Fund, on a quarterly basis, the amount, if any, by which the ordinary operating expenses of the MidCap Fund and Small Cap Fund (except taxes, interest, and extraordinary expenses) exceed its annualized total expense ratio noted in the following table as a percentage of its average daily net assets. In subsequent years, the MidCap and Small Cap Funds will reimburse Dresdner RCM, for such payments for a period of up to five years after they are made, to the extent that the Fund's ordinary operating expenses are less than the expense limit. As part of the reorganization, the MidCap, Small Cap and International Funds entered into new investment management agreements with Dresdner RCM. Each new management agreement provides that the MidCap, Small Cap and International Funds pay all their own expenses, including all of their ordinary operating expenses. Dresdner RCM has voluntarily agreed, until at least December 31, 2002, to waive a portion of its fee and to pay the Europe Fund on a quarterly basis the amount, if any, by which the ordinary operating expenses of the Fund (except taxes, interest, and extraordinary expenses) exceed an annual expense ratio of 1.60% (Class N) and 1.35% (Class I). In subsequent years, the Europe Fund will reimburse Dresdner RCM, for such payments during a five-year period, to the extent that the operating expenses are otherwise below the expense cap. For the year ended December 31, 2000, Dresdner RCM reimbursed the Funds for operating expenses that exceeded their stated expense limits. Page 145 Dresdner RCM Global Funds Notes to Financial Statements December 31, 2000 2. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES (CONTINUED) MANAGEMENT FEES, EXPENSE CAPS AND EXPENSE REIMBURSEMENTS FISCAL YEAR ENDED DECEMBER 31, 2000
ANNUAL MANAGEMENT FEE PERCENTAGES EXPENSES ----------------------------------------- ----------------------- FIRST $500 NEXT $500 ABOVE $1 EXPENSE FUND NAME FLAT RAT MILLION MILLION BILLION CAPS REIMBURSEMENTS ------------------------- -------- ---------- --------- -------- ------- -------------- Large Cap Growth Fund--I -- 0.70% 0.65% 0.60% 0.75%* $132,994 Large Cap Growth Fund--N -- 0.70% 0.65% 0.60% 1.00%* 63,240 Tax Managed Growth Fund--I -- 0.75% 0.70% 0.65% 1.25% 73,513 Tax Managed Growth Fund--N -- 0.75% 0.70% 0.65% 1.50% 55,381 MidCap Fund--I 0.75% -- -- -- 0.77% -- MidCap Fund--N 0.75% -- -- -- 1.02% -- Small Cap Fund--I 1.00% -- -- -- 1.02% -- Small Cap Fund--N 1.00% -- -- -- 1.27% -- Biotechnology Fund--N -- 1.00% 0.95% 0.90% 1.50% -- Balanced Fund--I -- 0.65% 0.60% 0.55% 0.90% 205,243 Global Equity Fund--I 0.75% -- -- -- 1.25% 155,245 Global Equity Fund--N 0.75% -- -- -- 1.50% -- Global Small Cap Fund--I -- 1.00% 0.95% 0.90% 1.50% 58,296 Global Small Cap Fund--N -- 1.00% 0.95% 0.90% 1.75% 68,717 Global Technology Fund--I 1.00% -- -- -- 1.50% -- Global Technology Fund--N 1.00% -- -- -- 1.75% -- Global Health Care Fund--N -- 1.00% 0.95% 0.90% 1.50% 135,413 International Equity Fund--I 0.75% -- -- -- 1.00% -- International Equity Fund--N 0.75% -- -- -- 1.25% 50,668 Emerging Markets Fund--I 1.00% -- -- -- 1.50% 222,447 Emerging Markets Fund--N 1.00% -- -- -- 1.75% 80,289 Europe Fund--I 1.00% ** -- -- -- 1.35% 42,165 Europe Fund--N 1.00% ** -- -- -- 1.60% 361,631 Strategic Income Fund--I 0.75% -- -- -- 1.25% 148,816 Strategic Income Fund--N 0.75% -- -- -- 1.50% --
* Prior to October 1, 2000, the expense cap for the Large Cap Growth Fund Class I and Class N were 0.95% and 1.20%, respectively. ** The Europe Fund pays management fees at 1.00% annually for assets under $100 million and 0.80% for assets above $100 million. For the year ended December 31, 2000, the Biotechnology Fund, Class N, the Global Technology Fund, Class I and Class N, and the International Equity Fund, Class I reimbursed Dresdner RCM $34,764, $305,346, $17,406 and $99,451, respectively, under the above Reimbursement Agreement. Page 146 Dresdner RCM Global Funds Notes to Financial Statements December 31, 2000 2. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES (CONTINUED) The following is a list of the Funds' remaining contingent liability and respective dates of expiration:
REMAINING CONTINGENT EXPIRES EXPIRES EXPIRES EXPIRES EXPIRES FUND NAME LIABILITY 2001 2002 2003 2004 2005 ------------------------- ---------- -------- ------- -------- -------- -------- Large Cap Growth Fund--I $516,244 $ -- $77,699 $122,447 $183,104 $132,994 Large Cap Growth Fund--N 98,603 -- -- -- 35,363 63,240 Tax Managed Growth Fund--I 226,199 -- -- -- 152,686 73,513 Tax Managed Growth Fund--N 112,078 -- -- -- 56,697 55,381 Biotechnology Fund--N 245,648 -- -- -- 109,312 136,336 Balanced Fund--I 222,331 -- -- -- 17,088 205,243 Global Equity Fund--I 305,493 -- -- -- 150,248 155,245 Global Small Cap Fund--I 408,805 -- 57,768 110,415 182,326 58,296 Global Small Cap Fund--N 101,132 -- -- -- 32,415 68,717 Global Health Care Fund--N 494,188 -- 65,966 109,088 183,721 135,413 International Equity Fund--I 222,062 6,291 52,016 70,445 93,310 -- International Equity Fund--N 89,715 -- -- -- 39,047 50,668 Emerging Markets Fund--I 683,277 -- -- 193,127 267,703 222,447 Emerging Markets Fund--N 120,891 -- -- -- 40,602 80,289 Europe Fund--I 42,165 -- -- -- -- 42,165 Europe Fund--N 560,727 -- -- -- 199,096 361,631 Strategic Income Fund--I 268,482 -- -- -- 119,666 148,816
The Global Technology Fund, Class I and Class N have no remaining contingent liability. Dresdner RCM serves as the Transfer Agent for the Global Equity and Strategic Income Funds. For the year ended December 31, 2000 no fees were charged to the Funds. These Funds are currently not offered to the public. On December 31, 2000, the Dresdner RCM Profit Sharing Plan, participation in which is limited to employees of Dresdner RCM, owned 2,132,319 shares, 298,427 shares, 314,444 shares and 383,838 shares of the total 267,197,428, 27,487,175, 14,827,122 and 16,644,910 outstanding shares of the MidCap Fund, Small Cap Fund, Global Technology Fund and the International Equity Fund, respectively. As of December 31, 2000, clients of Dresdner Bank AG/Investment Management/Institutional Asset Management Division owned the following shares of the Funds:
FUND NAME SHARES OWNED OUTSTANDING SHARES ---------------------------------------- ------------ ------------------ Tax Managed Growth Fund 100,000 2,310,074 Global Equity Fund 135,748 135,748 Emerging Markets Fund 300,000 611,021 Strategic Income Fund 89,252 89,252
Page 147 Dresdner RCM Global Funds Notes to Financial Statements December 31, 2000 2. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES (CONTINUED) At December 31, 2000, the following Funds had shareholders which each held more than 5% of the Fund's Net Assets:
FUND NUMBER OF SHAREHOLDERS PERCENTAGE OF AGGREGATE OWNERSHIP ---------------------------------------- ---------------------- --------------------------------- Large Cap Growth Fund 7 71.80% Tax Managed Growth Fund 3 78.78% MidCap Fund 6 58.60% Small Cap Fund 5 39.06% Biotechnology Fund 3 70.32% Balanced Fund 2 92.83% Global Equity Fund 1 100.00% Global Small Cap Fund 5 74.98% Global Technology Fund 4 54.29% Global Health Care Fund 4 76.94% International Equity Fund 4 29.52% Emerging Markets Fund 4 82.73% Europe Fund 4 45.54% Strategic Income Fund 1 100.00%
3. DISTRIBUTOR Funds Distributor, Inc. (the "Distributor") acts as distributor of shares of the Funds. For the period January 1, 2000 through December 30, 2000, the Global Company and the Capital Company adopted a distribution and service plan (the "Global Plan" and the "Capital Plan") and the Investment Company adopted a distribution plan (the "Investment Plan") pursuant to Rule 12b-1 under the 1940 Act. Under the Global Plan and the Capital Plan, for the Global Company and the Capital Company, each Fund pays the Distributor an annual fee of up to 0.25% of the average daily net assets of its Class N shares as reimbursement for certain expenses incurred by the Distributor in providing distribution and shareholder support services to such shares. Class I shares of the Global Company and Capital Company are not subject to 12b-1 fees. Under the Investment Plan, the Fund pays the Distributor on a monthly basis for all costs incurred by it in distributing Class N shares at an annual rate not to exceed 0.25% of the Fund's Class N shares' average daily net assets. Effective December 29, 2000, the Company pays the distributor an annual fee of up to 0.25% of the average daily net assets of its Class N shares, as reimbursement for certain expenses incurred by the Distributor in providing distribution and shareholder support services to such shares. Class I shares of the Company are not subject to 12b-1 fees. Page 148 Dresdner RCM Global Funds Notes to Financial Statements December 31, 2000 4. CAPITAL SHARES At December 31, 2000, the Global Company (all Funds except the Europe Fund) has 3,250,000,000 authorized shares of common stock at $0.0001 par value. The Investment Company (the Europe Fund) has 1,000,000,000 authorized shares of common stock at $0.001 par value, designated as follows:
FUND NAME CLASS I CLASS N ---------------------------------------- ------------ -------------- GLOBAL COMPANY Large Cap Growth Fund 25,000,000 25,000,000 Tax Managed Growth Fund 25,000,000 25,000,000 MidCap Fund 400,000,000 200,000,000 Small Cap Fund 100,000,000 50,000,000 Biotechnology Fund -- 50,000,000 Balanced Fund 25,000,000 -- Global Equity Fund 25,000,000 25,000,000 Global Small Cap Fund 25,000,000 25,000,000 Global Technology Fund 25,000,000 25,000,000 Global Health Care Fund -- 50,000,000 International Equity Fund 50,000,000 50,000,000 Emerging Markets Fund 25,000,000 25,000,000 Europe Fund 100,000,000 100,000,000 Strategic Income Fund 25,000,000 25,000,000 Unclassified* 1,725,000,000 INVESTMENT COMPANY Europe Fund 100,000,000 100,000,000 Unclassified* 800,000,000
* Shares designated as unclassified are available to any Fund. 5. DEFERRED ORGANIZATION COSTS Costs incurred by the Funds in connection with their organization are being amortized on a straight-line basis over a five-year period beginning at the commencement of each Fund's operations. At December 31, 2000, the unamortized balance of such expenses amounted to $8,065 for the Emerging Markets Fund. Organization costs on all other Funds were fully amortized at December 31, 2000. Page 149 Dresdner RCM Global Funds Notes to Financial Statements December 31, 2000 6. WRITTEN OPTIONS AND FORWARD FOREIGN CURRENCY CONTRACTS Transactions in written put and call options for the year ended December 31, 2000 for the Global Technology Fund were as follows:
AMOUNT OF NUMBER OF PREMIUMS CONTRACTS ------------ --------- GLOBAL TECHNOLOGY FUND: Options outstanding at December 31, 1999 $ -- -- Options sold 26,049,881 117,354 Options cancelled in closing purchase transactions (20,678,959) (39,630) Options expired prior to exercise (2,705,739) (68,700) Options exercised (2,021,133) (6,079) ------------ ------- Options outstanding at December 31, 2000 (value $(36,981)) $ 644,050 2,945 ============ =======
Forward foreign currency contracts outstanding at December 31, 2000 are as follows:
IN CONTRACTS EXCHANGE SETTLEMENT NET UNREALIZED FUND SALES TO DELIVER FOR DATE VALUE DEPRECIATION ------------------------- ------ ---------- -------- ---------- -------- -------------- Strategic Income Fund EU$ 135,000 $117,713 03/28/01 $127,241 $9,528 ======== ======== ======
7. DIRECTORS' FEES Each Director who is not an interested person (as defined in the 1940 Act) of the Global Company receives from the Global Company an annual retainer of $1,000 (the retainer is evenly prorated among each series of the Global Company), plus $500 per series for each Board meeting attended, and $250 per series for each committee meeting attended. Each Director who is not an interested person (as defined in the 1940 Act) of the Capital Company receives from the Capital Company an annual retainer of $9,000, plus $1,500 per series for each Board meeting attended, and $500 per series for each committee meeting attended. Each Director who is not an interested person (as defined in the 1940 Act) of the Investment Company receives from the Investment Company an annual retainer of $9,000, plus $1,500 per series for each Board meeting attended. The Europe Fund also pays each member of the strategic planning and communications subcommittee $1,500 for each meeting attended. Each Director of the Global Company who is not an interested person of the Global Company may elect to defer receipt of all or a portion of his or her fees for service as a director in accordance with the terms of a Deferred Compensation Plan for Non-Interested Directors ("Directors' Plan"). Under the Directors' Plan, an eligible Director may elect to have his/her deferred fees deemed invested either in 90-day U.S. Treasury bills, or shares of the common stock of Page 150 Dresdner RCM Global Funds Notes to Financial Statements December 31, 2000 7. DIRECTORS' FEES (CONTINUED) the Global Company, or a combination of these options. The amount of deferred fees payable to such Director under the Directors' Plan will be determined by reference to the return on such deemed investments. Generally, the deferred fees (reflecting any earnings, gains or losses thereon) become payable upon the Director's retirement or disability. 8. LINE OF CREDIT The Europe Fund has an uncommitted Line of Credit arrangement ("LOC") with State Street Bank and Trust Company, primarily to temporarily finance the repurchase of capital shares. The Fund's borrowings cannot exceed 33 1/3% of the Fund's net assets and cannot exceed the $7 million limit on the LOC. Interest is charged to the Fund based on its borrowings at the prevailing market rates as defined in the LOC. The average daily loan balance was $259,913 at a weighted average interest rate of 7.15%. The maximum loan outstanding during the year ended December 31, 2000 was $4,116,376. Interest expense of $19,327 was recorded during the year and is included in the Statement of Operations. At December 31, 2000, there were no such borrowings outstanding. 9. IN-KIND TRANSACTIONS During the year ended December 31, 2000, the Midcap Fund and Small Cap Fund incurred realized gains (losses) of $6,827,477 and $(18,806,124), respectively, on securities associated with an in-kind redemption on December 14, 2000. 10. SUBSEQUENT EVENT On January 29, 2001, Dresdner RCM Europe Fund received proxies representing a majority of the Fund's outstanding shares authorizing votes in favor of its reorganization from a series of Dresdner RCM Investment Funds Inc. to a newly created series of Dresdner RCM Global Funds, Inc. in a tax free exchange for shares of the relevant series of the Global Company. Page 151 Report of Independent Accountants TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF THE DRESDNER RCM GLOBAL FUNDS, INC., AND THE DRESDNER RCM INVESTMENT FUNDS INC.: In our opinion, the accompanying statements of assets and liabilities, including the portfolios of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the Dresdner RCM Global Funds, Inc. (consisting of the Dresdner RCM Large Cap Growth Fund, Dresdner RCM Tax Managed Growth Fund, Dresdner RCM MidCap Fund, Dresdner RCM Small Cap Fund, Dresdner RCM Biotechnology Fund, Dresdner RCM Balanced Fund, Dresdner RCM Global Equity Fund, Dresdner RCM Global Small Cap Fund, Dresdner RCM Global Technology Fund, Dresdner RCM Health Care Fund, Dresdner RCM International Growth Equity Fund, Dresdner RCM Emerging Markets Fund and the Dresdner RCM Strategic Income Fund), and the Dresdner RCM Investment Funds Inc. (consisting of the Dresdner RCM Europe Fund), hereafter referred to as the "Funds" at December 31, 2000, and the results of each of their operations for the year then ended, the changes in each of their net assets and the financial highlights for the periods indicated therein, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Funds' management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2000 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP Boston, Massachusetts February 16, 2001 Page 152 TAX INFORMATION (UNAUDITED) On December 18, 2000, distributions were paid from investment operations for the Funds. The dividends were recorded on December 14, 2000 to shareholders of record on December 13, 2000.
ORDINARY LONG-TERM TOTAL FUND NAME INCOME CAPITAL GAIN DISTRIBUTION ----------------------------------- ------------ ------------ ------------ Large Cap Growth Fund--Class I Per Share $ 0.05854 $ 0.54736 $ 0.60590 Amount $ 131,361 $ 1,228,248 $ 1,359,609 Large Cap Growth Fund--Class N Per Share $ 0.05854 $ 0.54736 $ 0.60590 Amount $ 75,773 $ 708,491 $ 784,264 Tax Managed Growth Fund--Class I Per Share -- -- -- Amount -- -- -- Tax Managed Growth Fund--Class N Per Share -- -- -- Amount -- -- -- MidCap Fund--Class I Per Share $ 3.59261 $ 1.25285 $ 4.84546 Amount $438,433,854 $152,894,710 $591,328,564 Small Cap Fund--Class I Per Share $ 1.92947 -- $ 1.92947 Amount $ 56,834,947 -- $ 56,834,947 Biotechnology Fund--Class N Per Share $ 0.04174 -- $ 0.04174 Amount $ 1,032,108 -- $ 1,032,108 Balanced Fund--Class I Per Share $ 0.10645 $ 0.00390 $ 0.11035 Amount $ 419,501 $ 15,374 $ 434,875 Global Equity Fund--Class I Per Share $ 2.73756 $ 1.29789 $ 4.03545 Amount $ 273,756 $ 129,789 $ 403,545 Global Small Cap Fund--Class I Per Share $ 0.58830 $ 0.91350 $ 1.50180 Amount $ 654,278 $ 1,015,950 $ 1,670,228 Global Small Cap Fund--Class N Per Share $ 0.58830 $ 0.91350 $ 1.50180 Amount $ 477,361 $ 741,236 $ 1,218,597 Global Technology Fund--Class I Per Share $ 0.41528 $ 0.01765 $ 0.43293 Amount $ 2,688,403 $ 114,241 $ 2,802,644 Global Technology Fund--Class N Per Share $ 0.41528 $ 0.01765 $ 0.43293 Amount $ 3,134,045 $ 133,178 $ 3,267,223 Global Health Care Fund--Class N Per Share $ 0.10067 -- $ 0.10067 Amount $ 980,694 -- $ 980,694 International Equity Fund--Class I Per Share $ 0.92681 $ 1.56766 $ 2.49447 Amount $ 12,756,024 $21,576,265 $ 34,332,289
Page 153 TAX INFORMATION (CONTINUED)
ORDINARY LONG-TERM TOTAL FUND NAME INCOME CAPITAL GAIN DISTRIBUTION ----------------------------------- ------------ ------------ ------------ International Equity Fund--Class N Per Share $ 0.88363 $ 1.56766 $ 2.45129 Amount $ 243,281 $ 431,610 $ 674,891 Emerging Markets Fund--Class I Per Share $ 0.55481 -- $ 0.55481 Amount $ 235,791 -- $ 235,791 Emerging Markets Fund--Class N Per Share $ 0.55481 -- $ 0.55481 Amount $ 94,477 -- $ 94,477 Europe Fund--Class I Per Share $ 1.09751 $ 1.24566 $ 2.34317 Amount $ 190,216 $ 215,893 $ 406,109 Europe Fund--Class N Per Share $ 1.09751 $ 1.24566 $ 2.34317 Amount $ 5,071,044 $ 5,755,574 $ 10,826,618 Strategic Income Fund--Class I Per Share $ 0.51383 -- $ 0.51383 Amount $ 45,860 -- $ 45,860
During the taxable year ended December 31, 2000, the following Funds paid foreign taxes and recognized foreign source income as detailed in the following table:
FOREIGN FUND NAME TAXES FOREIGN SOURCE INCOME ---------------------------------------- -------- --------------------- Global Small Cap Fund $ 18,624 $ 969,512 International Equity Fund $337,891 $3,271,463 Emerging Markets Fund $ 6,229 $ 87,051 Europe Fund $ 67,489 $ 283,332
Page 154 MEETING OF SHAREHOLDERS (UNAUDITED) The following matters were submitted to a vote of stockholders at the Dresdner RCM Global Funds, Inc. (the "Company") Annual Meeting held on December 18, 2000: 1. TO ELECT NINE MEMBERS OF THE COMPANY'S BOARD OF DIRECTORS.
NOMINEES FOR WITHHELD ---------------------------------------- ----------- -------- Robert J. Birnbaum 31,165,954 250,154 DeWitt F. Bowman 31,152,951 263,157 Theodore J. Coburn 31,191,175 224,933 Pamela A. Farr 31,188,206 227,902 Alfred W. Fiore 31,182,709 233,399 George B. James 31,188,229 227,879 John A. Kriewall 31,191,557 224,551 George G.C. Parker 31,197,073 219,035 Kenneth E. Scott 31,165,880 250,228
2. TO RATIFY THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2000. At the meeting, 31,065,170 votes were cast in favor of the proposal and 120,146 votes were cast against. In addition, there were 230,794 abstentions with respect to the proposal. The following matters were submitted to a vote of stockholders at the Dresdner RCM Capital Funds, Inc. Special Meeting held on December 18, 2000: 1. FOR THE STOCKHOLDERS OF THE VARIOUS PORTFOLIOS OF THE CAPITAL COMPANY -- DRESDNER RCM INTERNATIONAL GROWTH EQUITY FUND, DRESDNER RCM MIDCAP FUND AND DRESDNER RCM SMALL CAP FUND TO CONSIDER AND VOTE ON A PROPOSED REORGANIZATION INTO SUBSTANTIALLY SIMILAR NEWLY CREATED PORTFOLIOS OF DRESDNER RCM GLOBAL FUNDS, INC. AND THE SUBSEQUENT DISSOLUTION OF THE CAPITAL COMPANY.
FOR AGAINST ABSTAIN ---------- --------- ------- MidCap Fund 71,654,772 187,711 0 Small Cap Fund 22,433,195 94,167 0 International Growth Equity Fund 11,630,650 1,214,392 21,303
Page 155 INVESTMENT MANAGER Dresdner RCM Global Investors LLC Four Embarcadero Center San Francisco, California 94111 TRANSFER AND REDEMPTION AGENT State Street Bank and Trust Company 225 Franklin Street Boston, Massachusetts 02110 DISTRIBUTOR Funds Distributor, Inc. 60 State Street, Suite 1300 Boston, Massachusetts 02109 CUSTODIAN State Street Bank and Trust Company 225 Franklin Street Boston, Massachusetts 02110 (Dresdner RCM Emerging Markets Fund Only) Brown Brothers Harriman & Company 40 Water Street Boston, Massachusetts 02109 LEGAL COUNSEL Paul, Hastings, Janofsky & Walker LLP 555 South Flower Street Los Angeles, California 90071 (Dresdner RCM Europe Fund Only) Shaw Pittman 2300 N Street, N.W. Washington, DC 20037 INDEPENDENT ACCOUNTANTS PricewaterhouseCoopers LLP 160 Federal Street Boston, Massachusetts 02110 Shareholders may obtain portfolio holdings by calling 1-800-726-7240. Additional information is available on our website at www.DRCMFunds.com. Page 156 This report is not authorized for distribution to prospective investors unless preceded or accompanied by a Dresdner RCM Global Funds prospectus, which contains complete information about the Funds, including expenses. Investors should read the prospectus carefully before they invest or send money, as it explains certain risks associated with investing in these Funds, including investments in international and emerging markets. These risks include social, economic and political instability, market illiquidity, and currency volatility. There are also special risks associated with investing in stocks of small companies, which tend to be more volatile and less liquid than stocks of large companies. There are additional risks associated with investing in Funds that lack industry diversification. Portfolio holdings are subject to change and should not be considered as a recommendation to purchase. Grassroots-SM- Research is a division of Dresdner RCM Global Investors LLC ("Dresdner RCM"). The information and opinions expressed represent the judgement of Dresdner RCM. Dresdner RCM and its affiliates, officers, employees or clients may effect or have effected transactions for their own account(s) in the securities mentioned here or in any related investments. Accordingly, information may be available to Dresdner RCM that is not reflected at this time. The information and opinions have been compiled or arrived at from sources believed to be reliable and in good faith, but no representation or warranty, express or implied, is made as to their accuracy, completeness or correctness. Dresdner RCM accepts no liability whatsoever for any direct or consequential loss or damage arising from your use of this information. Research data used by Grassroots-SM- to generate Grassroots-SM- Research recommendations, is received from reporters who work as independent contractors for broker-dealers who supply research to Dresdner RCM in connection with broker services. DISTRIBUTOR: DRESDNER RCM DISTRIBUTORS, A DIVISION OF FUNDS DISTRIBUTOR INC.