<PAGE> PAGE 1
000 B000000 05/31/99
000 C000000 0001041927
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 3.0.a
000 J000000 A
001 A000000 ISI STRATEGY FUND, INC.
001 B000000 811-8291
001 C000000 4108953761
002 A000000 1 SOUTH STREET
002 B000000 BALTIMORE
002 C000000 MD
002 D010000 21202
003 000000 N
004 000000 N
005 000000 N
006 000000 N
007 A000000 N
007 B000000 0
007 C010100 1
007 C010200 2
007 C010300 3
007 C010400 4
007 C010500 5
007 C010600 6
007 C010700 7
007 C010800 8
007 C010900 9
007 C011000 10
008 A000001 INTERNATIONAL STRATEGY & INVESTMENT INC.
008 B000001 A
008 C000001 801-38408
008 D010001 NEW YORK
008 D020001 NY
008 D030001 10022
008 A000002 WILSHIRE ASSOCIATES INCORPORATED
008 B000002 S
008 C000002 801-36233
008 D010002 SANTA MONICA
008 D020002 CA
008 D030002 90401
010 A000001 INVESTMENT COMPANY CAPITAL CORP.
010 B000001 84-5477
010 C010001 BALTIMORE
010 C020001 MD
010 C030001 21202
011 A000001 ISI GROUP, INC.
011 B000001 8-43515
<PAGE> PAGE 2
011 C010001 NEW YORK
011 C020001 NY
011 C030001 10022
012 A000001 INVESTMENT COMPANY CAPITAL CORP
012 B000001 84-5477
012 C010001 BALTIMORE
012 C020001 MD
012 C030001 21202
013 A000001 DELOITT & TOUCHE, LLP
013 B010001 PRINCETON
013 B020001 NJ
013 B030001 08540
015 A000001 BANKERS TRUST COMPANY
015 B000001 C
015 C010001 NEW YORK
015 C020001 NY
015 C030001 10006
015 E010001 X
018 000000 Y
019 A000000 Y
019 B000000 13
019 C000000 FLAGINVEST
020 A000001 INVESTMENT MANAGEMENT & RESEARCH, INC.
020 B000001 59-1531281
020 C000001 7
020 A000002 INSTINET CORPORATION
020 B000002 13-3443395
020 C000002 1
020 C000003 0
020 C000004 0
020 C000005 0
020 C000006 0
020 C000007 0
020 C000008 0
020 C000009 0
020 C000010 0
021 000000 4
022 A000001 GOLDMAN, SACHS & CO.
022 B000001 13-5108880
022 C000001 501568
022 D000001 4450
022 A000002 DEUTSCHE MORGAN GRENFELL/C.J.LAWRENCE, INC.
022 B000002 13-2730828
022 C000002 986
022 D000002 1473
022 A000003 SMITH BARNEY INC.
022 B000003 13-1912900
022 C000003 1183
022 D000003 566
022 A000004 CREDIT SWISS FIRST BOSTON CORP.
022 B000004 13-5659485
<PAGE> PAGE 3
022 C000004 688
022 D000004 642
022 A000005 CANADIAN IMPERIAL BANK OF COMMERCE
022 C000005 337
022 D000005 0
022 A000006 INVESTMENT TECHNOLOGY GROUP
022 B000006 95-3282828
022 C000006 171
022 D000006 0
022 A000007 CANTOR FITZGERALD & CO.
022 B000007 13-3680184
022 C000007 62
022 D000007 0
022 C000008 0
022 D000008 0
022 C000009 0
022 D000009 0
022 C000010 0
022 D000010 0
023 C000000 504995
023 D000000 7271
024 000000 N
025 D000001 0
025 D000002 0
025 D000003 0
025 D000004 0
025 D000005 0
025 D000006 0
025 D000007 0
025 D000008 0
026 A000000 N
026 B000000 Y
026 C000000 N
026 D000000 Y
026 E000000 N
026 F000000 N
026 G010000 N
026 G020000 N
026 H000000 N
027 000000 Y
028 A010000 5858
028 A020000 116
028 A030000 0
028 A040000 171
028 B010000 2095
028 B020000 0
028 B030000 0
028 B040000 261
028 C010000 1750
028 C020000 0
028 C030000 0
<PAGE> PAGE 4
028 C040000 285
028 D010000 1313
028 D020000 0
028 D030000 0
028 D040000 99
028 E010000 892
028 E020000 105
028 E030000 0
028 E040000 324
028 F010000 776
028 F020000 0
028 F030000 0
028 F040000 485
028 G010000 12684
028 G020000 221
028 G030000 0
028 G040000 1625
028 H000000 11766
029 000000 Y
030 A000000 181
030 B000000 4.45
030 C000000 0.00
031 A000000 0
031 B000000 0
032 000000 129
033 000000 52
034 000000 Y
035 000000 3
036 A000000 Y
036 B000000 0
037 000000 N
038 000000 0
039 000000 N
040 000000 Y
041 000000 Y
042 A000000 0
042 B000000 0
042 C000000 100
042 D000000 0
042 E000000 0
042 F000000 0
042 G000000 0
042 H000000 0
043 000000 65
044 000000 0
045 000000 Y
046 000000 N
047 000000 Y
048 000000 0.400
048 A010000 0
048 A020000 0.000
<PAGE> PAGE 5
048 B010000 0
048 B020000 0.000
048 C010000 0
048 C020000 0.000
048 D010000 0
048 D020000 0.000
048 E010000 0
048 E020000 0.000
048 F010000 0
048 F020000 0.000
048 G010000 0
048 G020000 0.000
048 H010000 0
048 H020000 0.000
048 I010000 0
048 I020000 0.000
048 J010000 0
048 J020000 0.000
048 K010000 0
048 K020000 0.000
049 000000 N
050 000000 N
051 000000 N
052 000000 N
053 A000000 Y
053 B000000 Y
053 C000000 N
054 A000000 Y
054 B000000 N
054 C000000 N
054 D000000 N
054 E000000 N
054 F000000 N
054 G000000 N
054 H000000 Y
054 I000000 N
054 J000000 Y
054 K000000 N
054 L000000 N
054 M000000 Y
054 N000000 N
054 O000000 N
055 A000000 N
055 B000000 N
056 000000 N
057 000000 N
058 A000000 N
059 000000 Y
060 A000000 Y
060 B000000 Y
061 000000 5000
<PAGE> PAGE 6
062 A000000 N
062 B000000 0.0
062 C000000 0.0
062 D000000 0.0
062 E000000 0.0
062 F000000 0.0
062 G000000 0.0
062 H000000 0.0
062 I000000 0.0
062 J000000 0.0
062 K000000 0.0
062 L000000 0.0
062 M000000 0.0
062 N000000 0.0
062 O000000 0.0
062 P000000 0.0
062 Q000000 0.0
062 R000000 0.0
063 A000000 0
063 B000000 0.0
066 A000000 Y
066 E000000 Y
067 000000 N
068 A000000 N
068 B000000 N
069 000000 N
070 A010000 Y
070 A020000 Y
070 B010000 N
070 B020000 N
070 C010000 N
070 C020000 N
070 D010000 N
070 D020000 N
070 E010000 N
070 E020000 N
070 F010000 Y
070 F020000 N
070 G010000 N
070 G020000 N
070 H010000 Y
070 H020000 N
070 I010000 N
070 I020000 N
070 J010000 N
070 J020000 N
070 K010000 Y
070 K020000 N
070 L010000 N
070 L020000 N
070 M010000 N
<PAGE> PAGE 7
070 M020000 N
070 N010000 Y
070 N020000 N
070 O010000 Y
070 O020000 N
070 P010000 N
070 P020000 N
070 Q010000 N
070 Q020000 N
070 R010000 N
070 R020000 N
071 A000000 21500
071 B000000 7649
071 C000000 23952
071 D000000 32
072 A000000 12
072 B000000 519
072 C000000 219
072 D000000 0
072 E000000 0
072 F000000 105
072 G000000 31
072 H000000 0
072 I000000 12
072 J000000 0
072 K000000 4
072 L000000 13
072 M000000 0
072 N000000 57
072 O000000 0
072 P000000 0
072 Q000000 28
072 R000000 40
072 S000000 73
072 T000000 65
072 U000000 0
072 V000000 0
072 W000000 15
072 X000000 443
072 Y000000 183
072 Z000000 478
072AA000000 173
072BB000000 0
072CC010000 2352
072CC020000 0
072DD010000 441
072DD020000 0
072EE000000 370
073 A010000 0.2100
073 A020000 0.0000
073 B000000 0.1900
<PAGE> PAGE 8
073 C000000 0.0000
074 A000000 0
074 B000000 2048
074 C000000 0
074 D000000 9350
074 E000000 0
074 F000000 23875
074 G000000 0
074 H000000 0
074 I000000 0
074 J000000 121
074 K000000 0
074 L000000 325
074 M000000 70
074 N000000 35789
074 O000000 0
074 P000000 0
074 Q000000 0
074 R010000 0
074 R020000 0
074 R030000 0
074 R040000 55
074 S000000 0
074 T000000 35734
074 U010000 3001
074 U020000 0
074 V010000 11.91
074 V020000 0.00
074 W000000 0.0000
074 X000000 641
074 Y000000 0
075 A000000 0
075 B000000 26144
076 000000 0.00
077 A000000 Y
077 B000000 Y
077 Q010000 Y
078 000000 N
080 A000000 ICI MUTUAL
080 C000000 10000
081 A000000 Y
081 B000000 13
082 A000000 Y
082 B000000 25
083 A000000 N
083 B000000 0
084 A000000 N
084 B000000 0
085 A000000 N
086 A010000 0
086 A020000 0
<PAGE> PAGE 9
086 B010000 0
086 B020000 0
086 C010000 0
086 C020000 0
086 D010000 0
086 D020000 0
086 E010000 0
086 E020000 0
086 F010000 0
086 F020000 0
SIGNATURE EDWARD J. VEILLEUX
TITLE VICE PRESIDENT
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0001041927
<NAME> ISI STRATEGY FUND CLASS A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAY-31-1999
<PERIOD-END> MAY-31-1999
<INVESTMENTS-AT-COST> 32,036,892
<INVESTMENTS-AT-VALUE> 35,272,994
<RECEIVABLES> 446,568
<ASSETS-OTHER> 69,600
<OTHER-ITEMS-ASSETS> 35,789,162
<TOTAL-ASSETS> 1,991
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 52,936
<TOTAL-LIABILITIES> 54,927
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 32,397,446
<SHARES-COMMON-STOCK> 3,001,292
<SHARES-COMMON-PRIOR> 1,656,826
<ACCUMULATED-NII-CURRENT> 99,187
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,500
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,236,102
<NET-ASSETS> 35,734,235
<DIVIDEND-INCOME> 219,414
<INTEREST-INCOME> 518,835
<OTHER-INCOME> 0
<EXPENSES-NET> 259,818
<NET-INVESTMENT-INCOME> 478,431
<REALIZED-GAINS-CURRENT> 173,372
<APPREC-INCREASE-CURRENT> 2,351,825
<NET-CHANGE-FROM-OPS> 3,003,628
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 440,554
<DISTRIBUTIONS-OF-GAINS> 369,934
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,491,211
<NUMBER-OF-SHARES-REDEEMED> 210,438
<SHARES-REINVESTED> 63,693
<NET-CHANGE-IN-ASSETS> 17,514,496
<ACCUMULATED-NII-PRIOR> 61,310
<ACCUMULATED-GAINS-PRIOR> 198,062
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 104,709
<GROSS-EXPENSE> 443,404
<AVERAGE-NET-ASSETS> 26,143,901
<PER-SHARE-NAV-BEGIN> 11.00
<PER-SHARE-NII> 0.21
<PER-SHARE-GAIN-APPREC> 1.10
<PER-SHARE-DIVIDEND> (0.21)
<PER-SHARE-DISTRIBUTIONS> (0.19)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.91
<EXPENSE-RATIO> 1.00
</TABLE>
INDEPENDENT AUDITORS' REPORT
The Audit Committee of the Board of Directors,
The ISI Strategy Fund, Inc.
In planning and performing our audit of the financial statements of ISI Strategy
Fund, Inc. (the Fund) for the year ended May 31, 1999 (on which we have issued
our report dated July 2, 1999), we considered its internal control, including
control activities for safeguarding securities, in order to determine our
auditing procedures for the purpose of expressing our opinion on the financial
statements and to comply with the requirements of Form N-SAR, and not to provide
assurance on the Fund's internal control.
The management of the Fund is responsible for establishing and maintaining
internal control. In fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and related costs of
controls. Generally, controls that are relevant to an audit pertain to the
entity's objective of preparing financial statements for external purposes that
are fairly presented in conformity with generally accepted accounting
principles. Those controls include the safeguarding of assets against
unauthorized acquisition, use or disposition.
Because of inherent limitations in any internal control, errors or fraud may
occur and not be detected. Also, projections of any evaluation of internal
control to future periods are subject to the risk that the internal control may
become inadequate because of changes in conditions or that the degree of
compliance with policies or procedures may deteriorate.
Our consideration of the Fund's internal control would not necessarily disclose
all matters in internal control that might be material weaknesses under
standards established by the American Institute of Certified Public Accountants.
A material weakness is a condition in which the design or operation of one or
more of the internal control components does not reduce to a relatively low
level the risk that errors or fraud in amounts that would be material in
relation to the financial statements being audited may occur and not be detected
within a timely period by employees in the normal course of performing their
assigned functions. However, we noted no matters involving the Fund's internal
control and its operation, including controls for safeguarding securities, that
we consider to be material weaknesses as defined above as of May 31, 1999.
This report is intended solely for the information and use of management, the
Audit Committee of the Board of Directors and the Securities and Exchange
Commission, and is not intended to be and should not be used by anyone other
than these specified parties.
DELOITTE & TOUCHE LLP
July 2, 1999