<PAGE>
THE STRONG
----------
CONSERVATIVE
EQUITY FUNDS
===================================
SEMI-ANNUAL REPORT o APRIL 30, 1998
===================================
THE STRONG AMERICAN UTILITIES FUND
THE STRONG ASSET ALLOCATION FUND
THE STRONG BLUE CHIP 100 FUND
THE STRONG EQUITY INCOME FUND
THE STRONG GROWTH AND INCOME FUND
THE STRONG LIMITED RESOURCES FUND
THE STRONG TOTAL RETURN FUND
[PHOTO OF STRONG CAPITAL MANAGEMENT, INC.]
[STRONG LOGO]
STRONG FUNDS
<PAGE>
8
EIGHT BASIC PRINCIPLES FOR SUCCESSFUL MUTUAL FUND INVESTING
These common-sense rules are followed by many successful investors. They make
sense for beginners, too. If you have a question on these principles, or would
like to discuss them with us, please contact us at 1-800-368-3863. We're here
24 hours a day, seven days a week to take your call.
- -------------------------------------------------------------------------------
[PICTURE OF FOLDER LABELED INVESTMENTS]
1. HAVE A PLAN. Even a simple plan can help you take control of your financial
future. Review your plan once a year, or if your circumstances change.
- -------------------------------------------------------------------------------
[PICTURE OF CLOCK]
2. START INVESTING AS SOON AS POSSIBLE. Make time a valuable ally. Let it put
the power of compounding to work for you, while helping to reduce your
potential investment risk.
- -------------------------------------------------------------------------------
[PICTURE OF PIE CHART OF ASSET DIVERSIFICATION]
3. DIVERSIFY YOUR PORTFOLIO. By investing in different asset classes - stocks,
bonds, and cash - you help protect against poor performance in one type of
investment while including investments most likely to help you achieve your
important goals.
- -------------------------------------------------------------------------------
[PICTURE OF MEMO REMINDER TO INVEST]
4. INVEST REGULARLY. Investing is a process, not a one-time event. By
investing regularly over the long term, you reduce the impact of short-term
market gyrations, and you attend to your long-term plan before you're tempted
to spend those assets on short-term needs.
- -------------------------------------------------------------------------------
[PICTURE OF GRAPH SLOPING UPWARD]
5. MAINTAIN A LONG-TERM PERSPECTIVE. For most individuals, the best discipline
is staying invested as market conditions change. Reactive, emotional investment
decisions are all too often a source of regret - and of principal loss.
- -------------------------------------------------------------------------------
[PICTURE OF PIE CHART OF ASSET DIVERSIFICATION EMPHASIZING STOCKS]
6. CONSIDER STOCKS TO HELP ACHIEVE MAJOR LONG-TERM GOALS. Over time, stocks
have provided the more powerful returns needed to help the value of your
investments stay well ahead of inflation.
- -------------------------------------------------------------------------------
[PICTURE OF DOLLAR SIGN]
7. KEEP A COMFORTABLE AMOUNT OF CASH IN YOUR PORTFOLIO. To meet current needs,
including emergencies, use a money market fund or a bank account - not your
long-term investment assets.
- -------------------------------------------------------------------------------
[PICTURE OF MAGNIFYING GLASS]
8. KNOW WHAT YOU'RE BUYING. Make sure you understand the potential risks and
rewards associated with each of your investments. Ask questions...request
information...make up your own mind. And choose a fund company that helps you
make informed investment decisions.
<PAGE>
THE STRONG
----------
CONSERVATIVE
EQUITY FUNDS
===================================
SEMI-ANNUAL REPORT o APRIL 30, 1998
===================================
TABLE OF CONTENTS
INVESTMENT REVIEWS
The Strong American Utilities Fund...................................... 2
The Strong Asset Allocation Fund.........................................4
The Strong Blue Chip 100 Fund............................................6
The Strong Equity Income Fund............................................8
The Strong Growth and Income Fund.......................................10
The Strong Limited Resources Fund.......................................12
The Strong Total Return Fund............................................14
FINANCIAL INFORMATION
Schedules of Investments in Securities
The Strong American Utilities Fund..................................16
The Strong Asset Allocation Fund....................................16
The Strong Blue Chip 100 Fund.......................................20
The Strong Equity Income Fund.......................................21
The Strong Growth and Income Fund...................................24
The Strong Limited Resources Fund...................................26
The Strong Total Return Fund........................................27
Statements of Assets and Liabilities....................................30
Statements of Operations................................................31
Statements of Changes in Net Assets.....................................32
Notes to Financial Statements...........................................34
FINANCIAL HIGHLIGHTS.........................................................37
<PAGE>
==================================
THE STRONG AMERICAN UTILITIES FUND
==================================
OUR EMPHASIS ON TELEPHONES WAS REWARDED WITH SIGNIFICANT PRICE APPRECIATION
EXPERIENCED BY EACH OF THE FUND'S TELEPHONE HOLDINGS.
The Strong American Utilities Fund seeks overall total return by investing for
both income and capital growth. The Fund invests primarily in the equity
securities of public utility companies headquartered in the United States.(1)
A STABLE INTEREST RATE ENVIRONMENT
The Fund's fiscal year began with the 30-year Treasury Bond yielding 6.15%. A
generally favorable interest rate climate prevailed throughout the six-month
period ended April 30, with the yield on the 30-year Treasury Bond declining to
5.95%. Within this environment, the Fund delivered a total return of 17.89%
for the six-month period.(3)
===================================
ASSET ALLOCATION
===================================
Based on net assets as of 4-30-98
[PIE CHART]
Common Stocks 95.7%
Short-Term Investments 4.3%
===================================
The Asian financial crisis reinforced disinflationary trends and reduced
expectations for growth of corporate earnings and the nation's economy. The
accompanying currency devaluations and potential for bankruptcies of Asian
companies combined with greater economic uncertainty to make the relatively
predictable earnings and dividends of utility companies, without material
exposure to foreign investment risks, more attractive. In addition, a large
rise in stock market valuation during the last six months prompted some
cautious investors to seek safer havens in our sector, and the Fund's portfolio
experienced meaningful price appreciation.
==============================================================================
FIVE LARGEST HOLDINGS
==============================================================================
Based on net assets as of 4-30-98
% OF NET
SECURITY INDUSTRY ASSETS
--------------------------------------------------------------------------
SBC Communications, Inc. Telecommunication 11.1%
..........................................................................
Ameritech Corporation Telecommunication 9.7%
..........................................................................
Bell Atlantic Corporation Telecommunication 7.2%
..........................................................................
Firstenergy Corporation Electric Utility 5.0%
..........................................................................
BellSouth Corporation Telecommunication 5.0%
..........................................................................
Please see the Schedule of Investments in Securities for a complete
listing of the Fund's portfolio.
==============================================================================
==================================
YIELD SUMMARY(2)
==================================
As of 4-30-98
30-DAY ANNUALIZED YIELD 2.39%
==================================
Oil prices declined precipitously as production exceeded world daily
consumption by as much as two million barrels per day, prior to the signing of
an output reduction agreement by three major oil producers. In anticipation of
oil price weakness affecting energy common stock prices, we reduced the Fund's
energy-related investments early in the fiscal year.
TELEPHONE, ELECTRIC SECTORS SHOW PROMISE
Telecommunications remained the Fund's largest sector holding at 37.4% of the
portfolio. Our emphasis on telephones was rewarded with significant price
appreciation experienced by each of the Fund's telephone holdings.
We increased the Fund's electric utilities holdings during the period. A trend
of stable to declining interest rates has prevailed in the market, increasing
the relative attractiveness of the dividends from electric and telephone
utilities. For electrics, we believe that improving investor sentiment with
respect to earnings prospects for selected companies and decreasing concern
about adverse regulation should contribute to good investment performance.
OUR OUTLOOK
To date, the economy has been characterized by good growth, declining
inflation, and 30-year Treasury Bond yields fluctuating around 6%. This is a
favorable economic climate for utility stocks, and one that could improve if
the growth of industrial companies' profits moderates as expected by some
observers.
Entry into the long-distance market offers the prospect of significant revenue
growth for the regional telephone companies. A major holding of the Fund, Bell
Atlantic, anticipates receiving permission to enter the long-distance business
late this year. Our view is that entry into long distance for one of the
telephone companies would impact sentiment favorably for all the regional
telephone companies.
Looking ahead, we expect strong earnings growth from our telephone holdings.
Earnings growth rates could exceed those for the companies in the S&P
2
<PAGE>
Industrial Index, yet the telephone companies' price/ earning ratios are
substantially less than those of the S&P Industrials. Above-market dividend
yields, and free cash flow from operations over and above capital expenditures
and dividend requirements, further enhance the investment merit of telephone
stocks.
As the telephone companies continue to grow earnings at anticipated double
digit rates, and investors become more confident regarding their ability to
continue compounding earnings at a high rate, the potential exists for the
market to place a higher valuation on these companies' earnings.
Selected electric utilities appear to be in the early stages of regaining favor
with investors. Relative price performance began to improve at the end of 1997
We believe this sector is under-researched and under-weighted in institutional
portfolios, and earnings are priced at a substantial discount to large
industrial companies.
Currently, there is very little difference between the valuation of companies
with superior investment prospects and those with ordinary prospects. We
believe the combination of factors set out above make it an excellent time to
invest in utilities.
Thank you for your investment in the Strong American Utilities Fund. We
appreciate your continued confidence in our investment management.
Sincerely,
/s/ William H. Reaves
William H. Reaves
Portfolio Manager
[PHOTO OF WILLIAM H. REAVES]
===============================================================================
GROWTH OF AN ASSUMED $10,000 INVESTMENT
===============================================================================
From 7-1-93 to 4-30-98
[GRAPH]
THE STRONG
AMERICAN UTILITIES S&P 500 Lipper Utility
FUND Index Funds Index
6-93 10,000 10,000 10,000
12-93 10,450 10,496 10,167
12-94 10,178 10,635 9,223
12-95 13,939 14,631 11,724
12-96 15,106 17,991 12,809
12-97 19,270 23,993 16,115
4-98 20,259 27,615 17,334
This graph, prepared in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with a similar investment in the
Standard & Poor' s 500 Stock Index ("S&P 500") and the Lipper Utility Funds
Index. Results include the reinvestment of all dividends and capital gains
distributions. Performance is historical and does not represent future results.
Investment returns and principal value vary, and you may have a gain or loss
when you sell shares.
- -------------------------------------------------------------------------------
===================================
AVERAGE ANNUAL
TOTAL RETURNS(3)
===================================
As of 4-30-98
1-YEAR 33.49%
2-YEAR 21.00%
3-YEAR 22.04%
SINCE INCEPTION 15.73%
(on 7-1-93)
===================================
* The S&P 500 Index is an unmanaged index generally representative of the U.S.
stock market without regard to company size. The Lipper Utility Funds Index
is an equally-weighted performance index of the largest qualifying funds in
this Lipper category. Source of the S&P index data is Standard & Poor's
Micropal. Source of the Lipper index data is Lipper Analytical Services, Inc.
1 The American Utilities Fund is a non-diversified sector fund. As such, it may
concentrate its assets in fewer individual holdings than a diversified fund
may, and it may concentrate its investments in the utilities sector.
Therefore, the Fund is more exposed to individual stock volatility and
negative market pressures in the utilities sector.
2 Yields are historical and do not represent future yields, which will
fluctuate.
3 Average annual total return and total return measure change in the value of
an investment in the Fund, assuming reinvestment of all dividends and capital
gains. Average annual total return reflects annualized change, while total
return reflects aggregate change.
3
<PAGE>
================================
THE STRONG ASSET ALLOCATION FUND
================================
THE FUND WAS POSITIONED TO BENEFIT FROM A LOW INFLATIONARY ENVIRONMENT, STRONG
CONSUMER AND STRONG DOMESTIC ECONOMIC ACTIVITY.
The Strong Asset Allocation Fund seeks high total return consistent with
reasonable risk over the long term. The Fund allocates its assets among a
diversified portfolio of equity securities, bonds, and short-term fixed-income
securities.
For the semi-annual period ended April 30, 1998, the Fund posted a total return
of 13.60%.(1) That's below the 14.46% return from the 60/35/5 Balanced Index-
the benchmark for our Fund, and above the 12.32% return of our peer group of
funds, the Lipper Flexible Portfolio Average, for the same period. As of April
30, 1998, the Fund's total net assets were $297.6 million.*
A POSITIVE INVESTMENT MARKET
The first half of the fiscal year was again quite positive for the stock
market. As we entered the year, the market had taken on a decidedly defensive
posture. The focus of the financial markets was on the Asian turmoil, with
market participants shying away from any industry whose growth was stimulated
through exposure to this afflicted region. Investors had turned their focus to
those companies whose financial performance was influenced by the strong
domestic economy. This led to declining interest rates and strong domestic
growth.
====================================
ASSET ALLOCATION
====================================
Based on net assets as of 4-30-98
[PIE CHART]
Stocks 70.0%
Bonds 24.3%
Short-Term Investments 5.7%
The Fund's asset allocation does not
reflect any futures positions held
by the Fund.
====================================
As the new calendar year began, market participants were happy to put the last
few months behind them and start anew. Typically, the beginning of a new
calendar year is one of the strongest periods of the year, influenced by strong
cash flows as contributions are made for retirement and savings. There were two
important factors that may have had a large influence on the market's move to
new highs. First, fears of a severe negative impact from the Asian financial
crisis lessened as companies reported their latest financial results and
generally met expectations. Secondly, due to a flight to quality and low levels
of inflation, interest rates had declined which supported higher valuations on
the stock market. In addition, market participants began buying back the same
issues that had been sold as the Asia effect was not as evident as originally
thought.
The period ended with the economy growing at a surprisingly strong pace despite
the expected dampening effect from the Asian crisis and growing ambiguity over
future Federal Reserve action on interest rates.
TAKING ADVANTAGE OF OPPORTUNITIES
The Fund benefited from its move to a maximum 70% weighting in equities during
this period. In addition, its bias towards large capitalization stocks
continued to benefit performance. During the period several adjustments were
made to exposures in response to the impact of the Asian crisis. We began the
fiscal year with a more domestically oriented position of the Fund's assets for
two reasons. One was to avoid exposure to the most afflicted areas of the Asian
region. The other was to leverage our exposure to the strong domestic economic
backdrop.
With that in mind, the Fund benefited by lowering its exposure to energy, as
the Asian region represented a large source of incremental demand that now was
constrained. Secondly, exposure to the technology sector was maintained on a
selective basis as again this region of the world lessened demand and created
oversupply in certain sectors of the industry.
The Fund was positioned to benefit from a low inflationary environment, strong
consumer and strong domestic economic activity. This led us to increase our
exposure to such areas as healthcare, financials and retail.
The Fund also benefited from merger announcements that took place in the
financial sector in that the Fund owned many of the companies that participated
in these transactions.
As earnings began to be announced and the much anticipated impact of the Asian
crisis dissipated, we began to rebuild positions in energy and technology.
These areas experienced a sharp snap back as investors bought back oversold
sectors and were willing to look past the potential negative impacts of the
global conditions, counting on a strong re-emergence of strength later in the
year.
4
<PAGE>
The fixed income portion of the Asset Allocation Fund remains largely invested
in intermediate-term notes and bonds offering an attractive income level and a
fair degree of price stability. We have generally favored corporate bonds over
Treasuries and mortgages as we see a continuation of the positive credit trends
which have characterized this business expansion.
OUR OUTLOOK
We remain cautiously optimistic on the stock market and economy. At present,
the economy remains in a position of strength with few signs of strain. We have
a strong economy with high employment levels and low inflation. This
combination makes for quite a positive backdrop for financial assets.
Going forward the financial markets will have to deal with a number of issues:
corporate earnings growth, inflation, Federal Reserve interest rate policy,
Asia, and valuations. Despite these concerns, the stock market has continued to
climb a wall of worry as it historically has. At the current time, the positive
backdrop for financial assets could not be better.
Thank you for your investment in the Strong Asset Allocation Fund. We look
forward to earning your continued confidence.
Sincerely,
/s/ Rimas Milaitis
Rimas Milaitis
/s/ Jeffrey A. Koch
Jeff Koch
/s/ Bradley C. Tank
Brad Tank
Portfolio Co-managers
[PHOTO OF RIMAS MILAITIS, JEFF KOCH, AND BRAD TANK]
===============================================================================
GROWTH OF AN ASSUMED $10,000 INVESTMENT
===============================================================================
From 12-30-81 to 4-30-98
[GRAPH]
THE STRONG
ASSET ALLOCATION S&P 500 Lipper Flexible
FUND Index Portfolio Average
12-81 10,000 10,000 10,000
12-83 19,344 14,896 15,136
12-85 25,346 20,853 19,966
12-87 29,734 26,044 24,681
12-89 36,104 39,993 31,892
12-91 44,393 50,557 39,757
12-93 52,469 59,892 47,975
12-95 63,028 83,487 58,655
12-97 81,219 136,906 78,764
4-98 89,596 157,572 86,185
This graph, prepared in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at the Fund's inception, with a similar investment
in the Standard & Poor's 500 Stock Index ("S&P 500") and the Lipper Flexible
Portfolio Average. Results include the reinvestment of all dividends and
capital gains distributions. Performance is historical and does not represent
future results. Investment returns and principal value vary, and you may have a
gain or loss when you sell shares.
- -------------------------------------------------------------------------------
==================================
AVERAGE ANNUAL
TOTAL RETURNS(1)
==================================
As of 4-30-98
1-YEAR 27.53%
3-YEAR 17.99%
5-YEAR 13.26%
10-YEAR 11.31%
SINCE INCEPTION 14.37%
(on 12-30-81)
==================================
* The 60/35/5 Balanced Index is comprised of 60% S&P 500 Stock Index, 35%
Lehman Brothers Intermediate Government/Corporate Bond Index, and 5% Salomon
Brothers 3-Month Treasury Bill Index. The S&P 500 Stock Index is an unmanaged
index generally representative of the U.S. stock market, without regard to
company size. The Lehman Brothers Intermediate Government/Corporate Bond
Index is an unmanaged index generally representative of government and
investment-grade corporate securities with maturities of 1-10 years. The
Salomon Brothers 3-Month Treasury Bill Index is an unmanaged index generally
representative of the average yield of Three-Month Treasury Bills. The Lipper
Flexible Portfolio Average represents funds that allocate their investments
across various asset classes, including domestic common stocks, bonds and
money market instruments with a focus on total return. Source of the 60/35/5
Balanced Index and the S&P index data is Standard & Poor's Micropal. Source
of the Lipper index data is Lipper Analytical Services, Inc.
1 Average annual total return and total return measure change in the value of
an investment in the Fund, assuming reinvestment of all dividends and capital
gains. Average annual total return reflects annualized change, while total
return reflects aggregate change.
5
<PAGE>
=============================
THE STRONG BLUE CHIP 100 FUND
=============================
WE REDUCED OUR TECHNOLOGY INVESTMENTS SOMEWHAT, AND ADDED TO HOLDINGS IN LARGE,
MULTINATIONAL COMPANIES THAT HAVE LIMITED ASIAN EXPOSURE.
The Strong Blue Chip 100 Fund seeks high total return by investing for capital
growth and income. Under normal market conditions, the Fund intends to be fully
invested in a diversified portfolio of common stocks of the 100 largest market
capitalization or "blue chip" companies traded in the U.S. Half of the Fund is
an index of these stocks weighted by market capitalization. The remaining 50%
of the Fund is actively managed, with investments in selected stocks that
appear to have the most attractive growth prospects in the existing market
environment. Generally, a maximum of 5% of the Fund's assets will be invested
in any one of the 100 companies.
For the six-month period ended April 30, 1998, the Fund posted a return of
21.34%--about in line with the 22.49% return of the S&P 500 Index.(1)
SUCCEEDING IN A CHOPPY MARKET
Early in the fourth quarter of 1997, the financial crisis of Asia adversely
affected U.S. stock prices in general. At that time, the Fund's results were
hurt by the decline in the value of its investments in the technology and
energy sectors. The uncertainty as to the impact of the Asian crisis on the U.S.
economy continued to weigh on the market through the end of the year.
===================================
ASSET ALLOCATION
===================================
Based on net assets as of 4-30-98
[PIE CHART]
Common Stocks 99.5%
Short-Term Investments 0.5%
===================================
It was late in January before stock prices began the rise that has continued
through the date of this report. Growing investor confidence was triggered by
increasing evidence that the U.S. economy was still healthy, with solid
consumer fundamentals, and low inflation and interest rates. The aftereffects
of the Asian turmoil were investor preference for liquidity, and companies with
domestic-only revenues or those with limited exposure to Asia.
We addressed these conditions with the 50% of the Fund that is actively
managed. We reduced our technology investments somewhat, and added to holdings
in large, multinational companies that have limited Asian exposure. Sectors
that we favored were communication services, consumer staples (consumer
products or services purchased for personal or household use), consumer
cyclicals (consumer goods expected to last three or more years), and
financials. These were constructive changes for the Fund, and have resulted in
improved investment results so far in 1998.
To allow the actively managed portion of the Fund to make a meaningful impact
on performance, we continue to limit these holdings to about 30 companies.
LOOKING AHEAD
While we believe that growth may be slowing in 1998, the U.S. economy appears
to be in good balance. The underlying consumer fundamentals--jobs, income
growth, rising stock prices, mortgage refinancing, lower interest costs and
disinflation--should allow consumer spending to keep any negative impacts on
6
<PAGE>
the U.S. economy from the Asian crisis fairly modest. We expect inflation and
interest rates to remain moderate. In my opinion, this is a good environment
for equity markets, and the stocks of companies with global franchises, pricing
flexibility, and the ability to maintain high returns on their capital should
do well. We plan to continue monitoring economic events and the level of
interest rates, and will alter the Fund's investment mix if and when it seems
appropriate.
Thank you for your confidence in the Strong Blue Chip 100 Fund. We appreciate
your investing with us.
Sincerely,
/s/ Karen E. McGrath
Karen E. McGrath
Portfolio Manager
[PHOTO OF KAREN E. MCGRATH]
===============================================================================
GROWTH OF AN ASSUMED $10,000 INVESTMENT
From 6-30-97 to 4-30-98
===============================================================================
[GRAPH]
THE STRONG Lipper Growth
BLUE CHIP S&P 500 and Income
100 FUND Index Funds Index
6-97 10,000 10,000 10,000
9-97 10,750 10,749 10,837
12-97 10,872 11,058 10,951
3-98 12,406 12,600 12,200
4-98 12,607 12,727 12,265
This graph, prepared in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at the Fund's inception, with a similar investment
in the Standard & Poor's 500 Stock Index ("S&P 500") and the Lipper Growth and
Income Funds Index. Results include the reinvestment of all dividends and
capital gains distributions. Performance is historical and does not represent
future results. Investment returns and principal value vary, and you may have a
gain or loss when you sell shares.
- -------------------------------------------------------------------------------
===============================
TOTAL RETURN(1)
===============================
As of 4-30-98
SINCE INCEPTION 26.07%
(on 6-30-97)
===============================
* The S&P 500 is an unmanaged index generally representative of the U.S. stock
market, without regard to company size. The Lipper Growth and Income Funds
Index is an equally-weighted performance index of the largest qualifying
funds in this Lipper category. Source of the S&P index data is Standard &
Poor's Micropal. Source of Lipper index data is Lipper Analytical Services,
Inc.
1 Total return is not annualized and measures aggregate change in the value of
an investment in the Fund, assuming reinvestment of dividends.
7
<PAGE>
=============================
THE STRONG EQUITY INCOME FUND
=============================
THE FUND WAS POSITIONED TO BENEFIT FROM A LOW INFLATIONARY ENVIRONMENT, STRONG
CONSUMER AND STRONG DOMESTIC ECONOMIC ACTIVITY.
The Strong Equity Income Fund seeks total return by investing for both income
and capital growth. The Fund invests primarily in companies that pay current
dividends and offer potential growth of earnings.
For the semi-annual period ended April 30, 1998, the Fund posted a total return
of 16.77%(1). Our return compares favorably to the 16.34% gain posted by our
peer group of funds, the Lipper Equity Income Funds Index.
The Fund's focus remains on the stocks of large, well-established, dividend-
paying companies. These companies typically have a long history against which
to benchmark current performance as we move through an economic cycle. In
addition, these stocks tend to offer a stream of dividends and market liquidity
that may offer the potential for greater stability and capital growth.
===================================
ASSET ALLOCATION
===================================
Based on net assets as of 4-30-98
[PIE CHART]
Common Stocks 95.3%
Convertible Securities 4.4%
Short-Term Investments 0.3%
===================================
A CHANGING MARKET
The first half of the fiscal year was again quite positive for the stock market
though it was not without its moments of severe pessimism about corporate
earnings, negative impact from the Asian financial crises, and inflation. As we
entered the year, the market had taken on a decidedly defensive posture. The
focus of the financial markets was on the Asian turmoil, with market
participants shying away from any industry whose growth was stimulated through
exposure to this afflicted region. In light of these fears, investors favored
stocks of those companies whose financial performance was influenced by the
strong domestic economy. This also led to a flight to quality in the bond
market causing interest rates to decline and, in turn, stimulating domestic
economic activity.
==============================================================================
FIVE LARGEST HOLDINGS
==============================================================================
Based on net assets as of 4-30-98
% OF NET
SECURITY INDUSTRY ASSETS
--------------------------------------------------------------------------
General Electric Company Electrical Equipment 3.4%
..........................................................................
Pfizer, Inc. Healthcare-Drug/Diversified 1.9%
..........................................................................
Merck & Company, Inc. Healthcare-Drug/Diversified 1.6%
..........................................................................
Citicorp Bank-Money Center 1.6%
..........................................................................
Xerox Corporation Office Automation 1.5%
..........................................................................
Please see the Schedule of Investments in Securities for a complete listing of
the Fund's portfolio.
===============================================================================
As the new calendar year began, market participants were happy to put the last
few volatile months behind them and start anew. The stock market began with
typical seasonal strength as investors came out of their shells.
The period ended with the economy growing at a surprisingly strong pace. It is
debatable as to whether there will be any slowing in the rate of economic
growth here. This ambiguity has stimulated public commentary from Federal
Reserve members as to the direction of future action on interest rates,
triggering a corrective phase in the stock market as it adjusts to the
possibility of higher interest rates.
NAVIGATING A CHALLENGING MARKET
The Fund continued to benefit from its bias towards large capitalization
stocks. During the period several adjustments were made to exposures in
response to the impact of the Asian crisis. We began the fiscal year with a
more domestically oriented position of the Fund's assets for two reasons. One
was to avoid exposure to the most afflicted areas of the Asian region. The
other was to leverage our exposure to the strong domestic economic backdrop.
With that in mind, the Fund benefited by lowering its exposure to energy as the
Asian region represented a large source of incremental demand that now was
constrained. Secondly, our strategy of minimal exposure to the technology
sector due to this sector's low dividend yield and high volatility paid off, as
investors scrambled to get out.
The Fund was positioned to benefit from a low inflationary environment, strong
consumer and strong domestic economic activity. This led us to increase our
exposure to such areas as healthcare, financials and retail. The Fund also
benefited from merger announcements that took place in the financial sector in
that the
8
<PAGE>
Fund owned many of the companies that participated in these transactions.
As earnings began to be announced and the much anticipated impact of the Asian
crisis lessened, we began to rebuild positions in energy. This area experienced
a sharp snap back as investors bought back oversold sectors and were willing to
look past the potential negative impacts of the global conditions, counting on
a strong re-emergence of strength later in the year.
OUTLOOK
We remain cautiously optimistic on the stock market and economy. At present,
the economy remains in a position of strength with few signs of strain. We have
a strong economy with high employment levels and low inflation. This
combination makes for quite a positive backdrop for financial assets.
Going forward the financial markets will have to deal with a number of issues:
corporate earnings growth, inflation, Federal Reserve interest rate policy,
Asia, and valuations. Despite these concerns, the stock market has continued to
climb a wall of worry as it historically has. At the current time, the backdrop
for financial assets is very positive.
Thank you for your investment in the Strong Equity Income Fund. We look forward
to earning your continued confidence.
Sincerely,
/s/ Rimas Milaitis
Rimas Milaitis
[PHOTO OF RIMAS MILAITIS]
===============================================================================
GROWTH OF AN ASSUMED $10,000 INVESTMENT
===============================================================================
From 12-29-95 to 4-30-98
[GRAPH]
THE STRONG Lipper Equity
EQUITY INCOME S&P 500 Income Funds
FUND Index Index
12-95 10,000 10,000 10,000
6-96 11,296 11,010 10,700
12-96 12,810 12,296 11,789
6-97 15,126 14,830 13,605
12-97 16,822 16,398 15,032
4-98 18,854 18,874 16,540
This graph, prepared in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with a similar investment in the
Standard & Poor' s 500 Stock Index ("S&P 500") and the Lipper Equity Income
Funds Index. Results include the reinvestment of all dividends and capital
gains distributions. Performance is historical and does not represent future
results. Investment returns and principal value vary, and you may have a gain
or loss when you sell shares.
- -------------------------------------------------------------------------------
=================================
AVERAGE ANNUAL
TOTAL RETURNS(1)
=================================
As of 4-30-98
1-YEAR 37.10%
SINCE INCEPTION 31.23%
(on 12-29-95)
=================================
* The S&P 500 is an unmanaged index generally representative of the U.S. stock
market, without regard to company size. The Lipper Equity Income Funds Index
is an equally-weighted performance index of the largest qualifying funds in
this Lipper category. Source of the S&P 500 index data is Standard & Poor's
Micropal. Source of the Lipper index data is Lipper Analytical Services, Inc.
1 Average annual total return and total return measure change in the value of
an investment in the Fund, assuming reinvestment of all dividends and capital
gains. Average annual total return reflects annualized change, while total
return reflects aggregate change.
9
<PAGE>
=================================
THE STRONG GROWTH AND INCOME FUND
=================================
AS EARNINGS BEGAN TO BE ANNOUNCED AND THE MUCH ANTICIPATED IMPACT OF THE ASIAN
CRISIS LESSENED, WE BEGAN TO REBUILD POSITIONS IN ENERGY AND TECHNOLOGY.
The Strong Growth & Income Fund seeks high total return by investing for both
capital growth and income. The Fund invests primarily in companies that pay
current dividends and offer potential growth of earnings.
For the semi-annual period ended April 30, 1998, the Fund posted a total return
of 18.71%(1). Our return compares favorably to the 17.07% gain posted by our
peer group of funds, the Lipper Growth and Income Funds Index.
====================================
ASSET ALLOCATION
====================================
Based on net assets as of 4-30-98
[PIE CHART]
Common Stocks 99.6%
Convertible Securities 0.3%
Short-Term Investments 0.1%
====================================
The Fund's focus is on the stocks of large, well-established, dividend-paying
companies. These companies typically have a long history against which to
benchmark current performance as we move through an economic cycle. In
addition, these stocks tend to offer a stream of dividends and market liquidity
that have the potential for greater stability and capital growth.
===============================================================================
FIVE LARGEST HOLDINGS
===============================================================================
Based on net assets as of 4-30-98
% OF NET
SECURITY INDUSTRY ASSETS
---------------------------------------------------------------------------
General Electric Company Electrical Equipment 3.4%
...........................................................................
Microsoft Corporation Computer Software 2.2%
...........................................................................
Pfizer, Inc. Healthcare-Drug/Diversified 1.8%
...........................................................................
The Coca-Cola Company Beverage-Soft Drink 1.6%
...........................................................................
Citicorp Bank-Money Center 1.5%
...........................................................................
Please see the Schedule of Investments in Securities for a complete listing
of the Fund's portfolio.
===============================================================================
A CHANGING MARKET
The first half of the fiscal year was again quite positive for the stock market
though it was not without its moments of severe pessimism about corporate
earnings, negative impact from the Asian financial crises, and inflation. As we
entered the year, the market had taken on a decidedly defensive posture. The
focus of the financial markets was on the Asian turmoil, with market
participants shying away from any industry whose growth was stimulated through
exposure to this afflicted region. In light of these fears, investors favored
stocks of those companies whose financial performance was influenced by the
current strong domestic economy. Interest rates declined as investors sought
safety in the U.S. Treasury market.
As the new calendar year began, market participants were happy to put the last
few months behind them and start anew. As the dust began to settle around the
Asian market crisis, and interest rates declined--supporting higher stock
valuations--investors began to broaden the scope of their investments from
solely large cap securities to include small and medium capitalization stocks
as well.
The period ended with the economy growing at a surprisingly strong pace. It is
debatable as to whether there will be any slowing in the rate of economic
growth here. This ambiguity has stimulated public commentary from Federal
Reserve members as to the direction of future action on interest rates,
triggering a corrective phase in the stock market as it adjusts to the
possibility of higher interest rates.
NAVIGATING A CHALLENGING MARKET
The Fund continued to benefit from its bias towards large capitalization
stocks. During the period several adjustments were made to exposures in
response to the impact of the Asian crisis. We began the fiscal year with a
more domestically oriented position of the Fund's assets for two reasons. One
was to avoid exposure to the most afflicted areas of the Asian region. The
other was to leverage our exposure to the strong domestic economic backdrop.
With that in mind, the Fund benefited by lowering its exposure to energy, as
the Asian region represented a large source of incremental demand that now was
constrained. Secondly, exposure to the technology sector was maintained on a
selective basis as again this region of the world lessened demand and created
oversupply in certain sectors of the industry.
The Fund was positioned to benefit from a low inflationary environment, strong
consumer and domestic economic activity. This led us to increase our exposure
to such areas as healthcare, financials and retail. The
10
<PAGE>
Fund also benefited from merger announcements that took place in the financial
sector in that the Fund owned many of the companies that participated in these
transactions.
As earnings began to be announced and the much anticipated impact of the Asian
crisis lessened, we began to rebuild positions in energy and technology. This
area experienced a sharp snap back as investors bought back oversold sectors
and were willing to look past the potential negative impacts of the global
conditions, counting on a strong re-emergence of strength later in the year.
OUTLOOK
We remain cautiously optimistic on the stock market and economy. At present,
the economy remains in a position of strength with few signs of strain. We have
a strong economy with high employment levels and low inflation.
Going forward the financial markets will continue to deal with a number of
issues: corporate earnings growth, inflation, Federal Reserve interest rate
policy, Asia, and valuations. Despite these concerns, the stock market has
continued to climb a wall of worry as it historically has. At the current time,
the backdrop for financial assets is quite positive.
Thank you for your investment in the Strong Growth & Income Fund. We look
forward to earning your continued confidence.
Sincerely,
/s/ Rimas Milaitis
Rimas Milaitis
[PHOTO OF RIMAS MILAITIS]
===============================================================================
GROWTH OF AN ASSUMED $10,000 INVESTMENT
===============================================================================
From 12-29-95 to 4-30-98
[GRAPH]
THE STRONG Lipper Growth
GROWTH AND S&P 500 and Income
INCOME FUND Index Funds Index
12-95 10,000 10,000 10,000
6-96 11,556 11,010 10,846
12-96 13,191 12,296 12,069
6-97 15,469 14,830 13,992
12-97 17,199 16,398 15,323
4-98 19,593 18,874 17,161
This graph, prepared in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with a similar investment in the
Standard & Poor's 500 Stock Index ("S&P 500") and the Lipper Growth and Income
Funds Index. Results include the reinvestment of all dividends and capital
gains distributions. Performance is historical and does not represent future
results. Investment returns and principal value vary, and you may have a gain
or loss when you sell shares.
- -------------------------------------------------------------------------------
==================================
AVERAGE ANNUAL
TOTAL RETURNS(1)
==================================
As of 4-30-98
1-YEAR 39.74%
SINCE INCEPTION 33.41%
(on 12-29-95)
==================================
* The S&P 500 is an unmanaged index generally representative of the U.S. stock
market, without regard to company size. The Lipper Growth and Income Funds
Index is an equally-weighted performance index of the largest qualifying
funds in this Lipper category. Source of the S&P index data is Standard &
Poor's Micropal. Source of the Lipper index data is Lipper Analytical
Services, Inc.
1 Average annual total return and total return measure change in the value of
an investment in the Fund, assuming reinvestment of all dividends and capital
gains. Average annual total return reflects annualized change, while total
return reflects aggregate change.
11
<PAGE>
=================================
THE STRONG LIMITED RESOURCES FUND
=================================
WE STRONGLY BELIEVE THAT ENERGY AND OTHER RESOURCES CONSUMED IN THE CREATION OF
ECONOMIC GROWTH WILL BECOME AN AREA OF INVESTMENT ATTRACTION FOR AT LEAST THE
NEXT FEW YEARS.
The Strong Limited Resources Fund seeks capital growth and income by investing
in energy and other natural resources industries. The Fund offers investors an
opportunity to diversify their overall portfolio by investing in a specialized
market segment that tends to act somewhat independently of overall market
activity. This low market sensitivity may help investors reduce the market
sensitivity of their overall portfolio. Additionally, natural resources stocks
often show above-market dividend yields and consistent dividend growth that can
provide investors with a cushion in market downturns.
==================================
ASSET ALLOCATION
==================================
Based on net assets as of 4-30-98
[PIE CHART]
Common Stocks 96.3%
Short-Term Investments 3.7%
==================================
A CHALLENGING MARKET
The first few months of 1998 have seen a recovery in the areas of energy and
natural resources, after a turbulent autumn of 1997. The reverberations from
the Asian financial crisis had a longer and harder impact on natural resources
than the overall stock market, as our area was directly impacted by a sudden
drop in Asian demand for oil, forest products, and chemicals. Today, we can
observe that the world economies are continuing to grow and that the
consumption of natural resources is growing as well.
===============================================================================
FIVE LARGEST HOLDINGS
===============================================================================
Based on net assets as of 4-30-98
% OF NET
SECURITY INDUSTRY ASSETS
- -------------------------------------------------------------------------------
Ocean Energy, Inc. Oil-North American 4.9%
Exploration and Production
............................................................................
Enron Oil & Gas Company Oil-North American 4.8%
Exploration and Production
............................................................................
Chevron Corporation Oil-International Integrated 4.7%
............................................................................
Noble Affiliates, Inc. Oil-North American 4.7%
Exploration and Production
............................................................................
KN Energy, Inc. Natural Gas Distribution 4.5%
............................................................................
Please see the Schedule of Investments in Securities for a complete listing of
the Fund's portfolio.
===============================================================================
The Fund and the natural resources area also have been impacted by a much
warmer than normal winter, caused by the weather effects of El Nino, as well as
a short-term over-supply of crude oil. The prices of both oil and natural gas--
industries that the Fund is heavily committed to--fell sharply from October
1997 until very recently. Despite the fact that these factors negatively
impacted energy stocks, the Strong Limited Resources Fund appreciated 2.06% in
this six-month period--largely due to the Fund's diversification.(1)
OUR INVESTMENT STRATEGY
The Strong Limited Resources Fund has continued to invest in those areas of the
natural resources spectrum that we committed the Fund to when it was created
seven months ago. We strongly believe that energy and other resources consumed
in the creation of economic growth will become an area of investment attraction
for at least the next few years.
The Fund is 80% invested in energy stocks, particularly oil and gas exploration
and production companies, oil service stocks, and natural gas utilities. We
believe that the United States and the rest of the world is operating at
virtual full capacity utilization of oil and gas supplies. With an expected
increase in demand for energy resources of 2.5-3% annually, and reasonable
selling prices for oil and gas, there is a compelling need for expanding
development of these fuels. The areas of greatest concentration in our Fund are
as follows:
o Oil and gas exploration and production companies (32% of assets)--These are
the finders and producers of oil and gas. We expect these companies to
benefit from growing production, higher selling prices and continued takeover
activity.
o Oil service and equipment companies (15%)--These companies provide the goods
and services to aid the oil companies in their pursuit of new reserves and
production. After suffering a 15-year period of consolidation, the oil
service industry is poised for rapid growth.
o Natural Gas Utilities (15%)--Companies in this area are benefiting from the
continued growth in demand for natural gas in the United States, as well as
the ongoing consolidation occurring between electric and gas utilities.
o Other resource areas (17% )--We expect a more attractive investment climate
for steel, aluminum, forest products, most chemicals, and at some point,
copper as well, as these industries continue to experience tight capacity
utilization and further takeovers and restructurings.
12
<PAGE>
LOOKING AHEAD
We expect the second half of 1998 to show a much stronger performance for our
areas of investment. As crude oil prices recover--as a result of continued
growth in consumption and reduced supply potential from OPEC--and natural gas
prices remain firm, investor interest will return to energy. Just as
importantly, we anticipate an increased level of mergers, acquisitions,
restructurings, etc. in all our resource areas. The stocks are selling at the
bottom end of their absolute and relative valuations, and are of increasing
interest to acquirers.
We are very excited about the Strong Limited Resources Fund and its prospects
for the long-term. Thank you for your investment in the Fund. We look forward
to earning your further confidence.
Sincerely,
/s/ Mark A. Baskir
Mark Baskir
Portfolio Manager
[PHOTO OF MARK BASKIR]
===============================================================================
GROWTH OF AN ASSUMED $10,000 INVESTMENT
===============================================================================
From 9-30-97 to 4-30-98
[GRAPH]
THE STRONG
LIMITED RESOURCES S&P 500 Lipper Natural
FUND Index Resources Average
9-97 10,000 10,000 10,000
10-97 9,510 9,666 9,400
11-97 9,190 10,113 8,542
12-97 9,306 10,287 8,470
1-98 8,666 10,401 8,122
2-98 9,196 11,151 8,459
3-98 9,516 11,722 8,765
4-98 9,706 11,840 9,033
This graph, prepared in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with a similar investment in the
Standard & Poor's 500 Stock Index ("S&P 500") and the Lipper Natural Resources
Average. Results include the reinvestment of all dividends and capital gains
distributions. Performance is historical and does not represent future results.
Investment returns and principal value vary, and you may have a gain or loss
when you sell shares.
===============================================================================
===============================
TOTAL RETURN(1)
===============================
As of 4-30-98
SINCE INCEPTION -2.94%
(on 9-30-97)
===============================
* The S& P 500 is an unmanaged index generally representative of the U.S. stock
market, without regard to company size. The Lipper Natural Resources Average
represents funds that invest more than 65% of its equity commitment in
natural resource stocks. Source of the S&P index data is Standard & Poor's
Micropal. Source of the Lipper Natural Resources Average is Lipper
Analytical Services, Inc.
1 Total return is not annualized and measures aggregate change in the value of
an investment in the Fund, assuming reinvestment of dividends.
13
<PAGE>
============================
THE STRONG TOTAL RETURN FUND
============================
NEW MONEY FLOWS INTO U.S. EQUITIES DURING THE PAST SIX MONTHS HAVE CREATED A
LIQUIDITY-DRIVEN MARKET, AND IS THE KEY REASON THAT THE BIG-CAP INDICES ARE
PERFORMING SO WELL.
The Strong Total Return Fund seeks high total return by investing for capital
growth and income. The Fund emphasizes investment in large-to-medium-size
companies with steady to growing dividends.
LOOKING BACK
Asia was the principal concern of the U.S. stock market as investors analyzed
the impact on earnings of companies which conduct business within this region.
For U.S. manufacturers, the extent of Asian economic woes is only beginning to
be better understood. We expect that this region will continue to influence the
stock market, and the glass will be half empty or half full depending on the
outlook of the moment. On the positive side, an increase of low-cost goods from
Asia may become a contributing factor in holding down inflation. Southeast Asia
will remain an important issue to watch.
==================================
ASSET ALLOCATION
==================================
Based on net assets as of 4-30-98
[PIE CHART]
Common Stocks 91.7%
Convertible Securities 6.0%
Short-Term Investments 2.3%
==================================
As these Asian problems unfolded, the stock market stopped its upward trend and
trading remained in a consistent price range from August until mid-January.
During this period we sold or reduced positions in multinational companies
which would experience lower sales into Asia or higher competition from
low-price Asian imports. Additionally, we reduced holdings in international
oils, oil services, and technology. The proceeds were reinvested in companies
which had a lower exposure to Asia, principally U.S. financials, retailers,
regional Bell telephone companies, and consumer staple companies. In this
environment, the Fund returned 14.59% for the six-month period ended April 30,
1998.(1)
WHERE WE ARE
The consumer is in good shape to benefit from the growth in the U.S. economy.
Consumer confidence is at high levels, and real disposable income for the
American worker has been growing above trend-line. This is a great job market,
with Americans employed at record levels. For the first time since 1959, the
Federal budget may have a surplus as tax receipts have been above expectations.
Capacity levels are high, which results in a general lack of pricing power for
corporations. Companies still strive to increase productivity as a means to
increase margins and profits. Corporate merger and takeover activity is strong,
which is normal for this point of the economic cycle, and large companies are
buying shares of their own stocks.
New money flows into U.S. equities during the past six months have created a
liquidity-driven market, and is the key reason that the big-cap indices--the
Dow Jones Industrial Average and the S&P 500--are performing so well. The
slowing corporate revenue and earnings growth is being offset by low inflation,
low interest rates and the strong U.S. dollar, which makes stocks preferable
over cash for investors. Foreign investors have invested in U.S. stocks in
recent months, and they tend to buy large, well-known companies.
OUR OUTLOOK
With no rise in inflation and interest rates, the stock market can continue to
rise over the long term, but short-term corrections could come at any time as
valuations become too full or economic news makes investors nervous. There is
the risk that the Federal Reserve could tighten, but with a low level of
inflation and a higher dollar the probability is that the Fed may
===============================================================================
FIVE LARGEST HOLDINGS
===============================================================================
Based on net assets as of 4-30-98
% OF NET
SECURITY INDUSTRY ASSETS
- -------------------------------------------------------------------------------
General Electric Company Electrical Equipment 3.2%
............................................................................
Pfizer, Inc. Healthcare-Drug/Diversified 3.0%
............................................................................
Kohl's Corporation Retail-Department Store 2.2%
............................................................................
Microsoft Corporation Computer Software 2.2%
............................................................................
Lucent Technologies, Inc. Telecommunication Equipment 1.8%
............................................................................
Please see the Schedule of Investments in Securities for a complete listing of
the Fund's portfolio.
===============================================================================
14
<PAGE>
continue to remain on the sideline and limit itself to jawboning. The Fed's
continued inaction, however, is not a sure thing. The months ahead will be an
especially important period to really focus on stocks with the best
fundamentals and the best valuations. We will continue to focus on
high-quality, predictable, growing companies and we look to add companies as
valuations become attractive. We have maintained our exposure to
consumer-related stocks because of the strength of the consumer. In the
financial area, we have reduced our exposure in selected issues where
valuations became stretched. We added several energy stocks because of very
attractive valuations. It is possible to have a correction in the near term,
but we believe the long-term outlook for the stock market remains favorable.
Thank you for your investment in the Strong Total Return Fund.
Sincerely,
/s/ Ronald C. Ognar
Ronald C. Ognar
/s/ Ian J. Rogers
Ian J. Rogers
Portfolio Co-managers
[PHOTO OF RON C. OGNAR AND IAN J. ROGERS]
===============================================================================
GROWTH OF AN ASSUMED $10,000 INVESTMENT
===============================================================================
From 12-30-81 to 4-30-98
[GRAPH]
THE STRONG Lipper Growth
TOTAL RETURN S&P 500 and Income
FUND Index Funds Index
12-81 10,000 10,000 10,000
12-83 18,720 14,896 15,243
12-85 25,936 20,853 20,436
12-87 33,002 26,044 24,673
12-89 39,140 39,993 36,132
12-91 48,578 50,557 43,393
12-93 59,851 59,892 54,528
12-95 74,963 83,487 71,211
12-97 106,181 136,906 109,113
4-98 118,027 157,572 122,206
This graph, prepared in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with a similar investment in the
Standard & Poor's 500 Stock Index ("S&P 500") and the Lipper Growth and Income
Funds Index. Results include the reinvestment of all dividends and capital
gains distributions. Performance is historical and does not represent future
results. Investment returns and principal value vary, and you may have a gain
or loss when you sell shares.
- -------------------------------------------------------------------------------
==================================
AVERAGE ANNUAL
TOTAL RETURNS(1)
==================================
As of 4-30-98
1-YEAR 34.58%
3-YEAR 22.33%
5-YEAR 17.84%
10-YEAR 12.78%
SINCE INCEPTION 16.31%
(on 12-30-81)
==================================
* The S&P 500 is an unmanaged index generally representative of the U.S. stock
market, without regard to company size. The Lipper Growth and Income Funds
Index is an equally-weighted performance index of the largest qualifying
funds in this Lipper category. Source of the S&P index data is Standard &
Poor's Micropal. Source of the Lipper index data is Lipper Analytical
Services, Inc.
1 Average annual total return and total return measure change in the value of
an investment in the Fund, assuming reinvestment of all dividends and capital
gains. Average annual total return reflects annualized change, while total
return reflects aggregate change.
15
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
===============================================================================
STRONG AMERICAN UTILITIES FUND
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
COMMON STOCKS 95.7%
ELECTRIC UTILITY 36.1%
Ameren Corporation 232,000 $ 9,193,000
American Electric Power Company, Inc. 190,000 9,072,500
CMS Energy Corporation 187,000 8,169,563
Duke Energy Company 143,000 8,276,125
Firstenergy Corporation 335,000 10,133,750
NIPSCO Industries, Inc. 355,000 9,518,437
SCANA Corporation 76,600 2,288,425
The Southern Company 277,000 7,340,500
TECO Energy 316,000 8,413,500
TNP Enterprises, Inc. 35,400 1,141,650
------------
73,547,450
ENERGY RELATED 12.8%
Amoco Corporation 65,000 2,876,250
Apache Corporation 2,000 70,750
Atlantic Richfield Company 2,000 156,000
Baker Hughes, Inc. 42,600 1,725,300
British Petroleum PLC ADR 3,000 283,500
Chevron Corporation 500 41,343
Diamond Offshore Drilling, Inc. 6,100 308,813
Dresser Industries, Inc. 25,600 1,353,600
Exxon Corporation 89,800 6,549,787
FMC Corporation (b) 11,500 891,969
Imperial Oil, Ltd. 17,700 979,031
Kerr McGee Corporation 1,000 66,000
Mobil Corporation 16,500 1,303,500
Petroleum Geo-Services Sponsored ADR (b) 13,500 887,625
Royal Dutch Petroleum Company-New York
Registry Shares 104,200 5,893,812
Schlumberger, Ltd. 19,100 1,582,912
Texaco, Inc. 1,000 61,500
Tosco Corporation 6,300 224,438
USX-Marathon Group 25,200 902,475
------------
26,158,605
GAS UTILITY 8.8%
Burlington Resources, Inc. 12,200 573,400
Enron Corporation 138,000 6,787,875
MCN Energy Group, Inc. 222,000 8,380,500
National Fuel Gas Company 11,000 506,000
Questar Corporation 33,500 1,453,063
Washington Gas Light Company 12,000 326,250
------------
18,027,088
OTHER UTILITY 0.6%
American Water Works Company, Inc. 20,000 598,750
Elf Aquitaine SA Sponsored ADR (b) 4,000 259,750
PG&E Corporation 10,000 323,750
------------
1,182,250
TELECOMMUNICATION 37.4%
Alltel Corporation 110,500 4,723,875
Ameritech Corporation 466,000 19,834,125
Bell Atlantic Corporation 157,000 14,689,313
BellSouth Corporation 157,500 10,109,531
GTE Corporation 38,000 2,220,625
SBC Communications, Inc. 547,200 22,674,600
360 Communications Company (b) 65,000 1,986,563
------------
76,238,632
- ------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $152,760,388) 195,154,025
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 3.7%
COMMERCIAL PAPER 2.9%
INTEREST BEARING, DUE UPON DEMAND
American Family Financial Services, Inc., 5.23% $ 406,100 406,100
General Mills, Inc., 5.26% 665,900 665,900
Johnson Controls, Inc., 5.26% 1,249,500 1,249,500
Pitney Bowes Credit Corporation, 5.26% 595,800 595,800
Sara Lee Corporation, 5.26% 242,100 242,100
Warner Lambert Company, 5.23% 2,649,600 2,649,600
------------
5,809,000
REPURCHASE AGREEMENT 0.8%
Goldman, Sachs & Company (Dated 4/30/98),
5.45%, Due 5/01/98 (Repurchase Proceeds
$1,700,257); Collateralized by: $1,065,000 United
States Treasury Bonds, 13.25%, Due 5/15/14
(Market Value $1,742,340) (e) 1,700,000 1,700,000
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS (COST $7,509,000) 7,509,000
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES (COST $160,269,388) 99.4% 202,663,025
Other Assets and Liabilities, Net 0.6% 1,330,979
- ------------------------------------------------------------------------------
NET ASSETS 100.0% $203,994,004
==============================================================================
===============================================================================
STRONG ASSET ALLOCATION FUND
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
COMMON STOCKS 68.0%
AEROSPACE & DEFENSE 0.4%
United Technologies Corporation 13,300 $ 1,309,219
AUTO & TRUCK PARTS 0.3%
The Goodyear Tire & Rubber Company 14,400 1,008,000
AUTOMOBILE 0.2%
Ford Motor Company 14,700 673,444
BANK - MONEY CENTER 3.9%
BankAmerica Corporation 21,500 1,827,500
Chase Manhattan Corporation 19,200 2,660,400
Citicorp 21,500 3,235,750
First Union Corporation 16,500 996,188
NationsBank Corporation 39,100 2,961,825
-----------
11,681,663
BANK - REGIONAL 0.7%
Republic New York Corporation 3,600 481,500
US Bancorp (b) 12,080 1,534,160
-----------
2,015,660
BANK - SUPER REGIONAL 3.3%
Banc One Corporation 30,250 1,779,078
The Bank of New York Company, Inc. 22,700 1,340,719
Comerica, Inc. 26,550 1,777,191
First Chicago NBD Corporation 16,800 1,560,300
Fleet Financial Group, Inc. 9,200 794,650
Mellon Bank Corporation 26,100 1,879,200
Norwest Corporation 15,600 619,125
-----------
9,750,263
BEVERAGE - SOFT DRINK 1.6%
The Coca-Cola Company 38,800 2,943,950
PepsiCo, Inc. 48,300 1,916,906
-----------
4,860,856
BROKERAGE & INVESTMENT MANAGEMENT 0.3%
Merrill Lynch & Company, Inc. 11,300 991,575
COMPUTER - MAINFRAME 0.5%
International Business Machines Corporation 13,800 1,599,075
16
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
STRONG ASSET ALLOCATION FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
COMPUTER - PERSONAL & WORKSTATION 1.2%
Dell Computer Corporation (b) 24,400 $ 1,970,300
Hewlett-Packard Company 16,400 1,235,125
Sun Microsystems, Inc. (b) 7,900 325,381
-----------
3,530,806
COMPUTER SOFTWARE 3.5%
America Online, Inc. (b) 14,800 1,184,000
BMC Software, Inc. (b) 16,500 1,543,781
Cisco Systems, Inc. (b) 36,650 2,684,613
Microsoft Corporation (b) 52,200 4,704,525
Oracle Systems Corporation (b) 16,200 419,175
-----------
10,536,094
CONTAINER 0.3%
Sealed Air Corporation (b) 13,600 852,550
COSMETIC & PERSONAL CARE 0.5%
The Gillette Company 13,600 1,569,950
DIVERSIFIED OPERATIONS 3.3%
Allied Signal, Inc. 33,500 1,467,719
E.I. Du Pont de Nemours & Company 21,700 1,580,031
Johnson Controls, Inc. 16,500 979,688
Minnesota Mining & Manufacturing Company 6,100 575,687
Monsanto Company 12,500 660,937
Textron, Inc. 24,500 1,917,125
Tyco International, Ltd. 50,566 2,755,847
-----------
9,937,034
ELECTRICAL EQUIPMENT 2.6%
Emerson Electric Company 14,000 890,750
General Electric Company 81,300 6,920,663
-----------
7,811,413
ELECTRONIC PRODUCTS - MISCELLANEOUS 0.2%
General Motors Corporation Class H 13,100 723,775
ELECTRONICS - SEMICONDUCTOR/COMPONENT 1.2%
Altera Corporation (b) 13,800 558,900
Intel Corporation 30,000 2,424,375
Texas Instruments, Inc. 7,800 499,688
-----------
3,482,963
FINANCE - MISCELLANEOUS 1.1%
American Express Company 21,800 2,223,600
SunAmerica, Inc. 22,400 1,118,600
-----------
3,342,200
FOOD 1.3%
Bestfoods 21,800 1,196,275
Sara Lee Corporation 22,300 1,328,244
Unilever NV 18,300 1,365,637
-----------
3,890,156
HEALTHCARE - DRUG/DIVERSIFIED 5.7%
Alza Corporation (b) 9,300 445,819
American Home Products Corporation 7,300 679,813
Bristol-Myers Squibb Company 22,200 2,350,425
Johnson & Johnson 21,700 1,548,837
Merck & Company, Inc. 25,900 3,120,950
Pfizer, Inc. 34,500 3,926,531
Schering-Plough Corporation 14,800 1,185,850
Smithkline Beecham PLC Sponsored ADR 19,500 1,161,469
Warner-Lambert Company 13,500 2,554,031
-----------
16,973,725
HEALTHCARE - INSTRUMENTATION 0.2%
Medtronic, Inc. 10,800 568,350
HEALTHCARE - MEDICAL SUPPLY 1.0%
Becton, Dickinson & Company 17,500 1,218,438
McKesson Corporation 22,700 1,604,606
-----------
2,823,044
HEALTHCARE - PATIENT CARE 0.2%
United Healthcare Corporation 6,300 442,575
HOUSING RELATED 0.6%
Masco Corporation 29,700 1,722,600
INSURANCE - ACCIDENT & HEALTH 0.4%
UNUM Corporation 21,700 1,166,375
INSURANCE - DIVERSIFIED 1.1%
Marsh & McLennan Companies, Inc. 12,000 1,093,500
Travelers Group, Inc. 34,400 2,104,850
-----------
3,198,350
INSURANCE - LIFE 0.3%
Lincoln National Corporation 11,500 1,021,344
INSURANCE - PROPERTY & CASUALTY 2.2%
The Allstate Corporation 17,300 1,665,125
American International Group, Inc. 15,300 2,012,906
Chubb Corporation 20,000 1,578,750
The PMI Group, Inc. 15,500 1,259,375
-----------
6,516,156
LEISURE SERVICE 0.6%
The Walt Disney Company 13,200 1,640,925
MACHINERY - MISCELLANEOUS 0.5%
Cooper Industries, Inc. 9,900 662,063
Ingersoll-Rand Company 17,350 799,184
-----------
1,461,247
MACHINERY - TRANSPORTATION EQUIPMENT & PARTS 0.5%
Dana Corporation 22,700 1,342,137
MEDIA - PUBLISHING 2.1%
Gannett Company, Inc. 16,200 1,100,588
McGraw-Hill, Inc. 19,000 1,471,312
News Corporation, Ltd. Sponsored ADR 43,600 1,190,825
Time Warner, Inc. 32,900 2,582,650
-----------
6,345,375
MEDIA - RADIO/TV 2.0%
CBS Corporation 54,500 1,941,562
Clear Channel Communications, Inc. (b) 20,500 1,932,125
Cox Communications, Inc. Class A (b) 22,000 981,750
Tele-Communications, Inc. Liberty Media
Group Series A (b) 28,350 940,866
-----------
5,796,303
METALS & MINING 0.3%
Southdown, Inc. 13,900 983,425
MORTGAGE & RELATED SERVICE 1.3%
Federal Home Loan Mortgage Corporation 34,300 1,588,519
Federal National Mortgage Association 37,000 2,215,375
-----------
3,803,894
OFFICE AUTOMATION 1.5%
Pitney Bowes, Inc. 30,800 1,478,400
Xerox Corporation 26,400 2,996,400
-----------
4,474,800
OIL - INTERNATIONAL INTEGRATED 2.5%
British Petroleum PLC ADR 10,800 1,020,600
Chevron Corporation 11,500 950,906
Exxon Corporation 29,700 2,166,244
17
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
===============================================================================
STRONG ASSET ALLOCATION FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
Mobil Corporation 16,000 $ 1,264,000
Royal Dutch Petroleum Company - New York
Registry Shares 17,700 1,001,156
Texaco, Inc. 15,700 965,550
------------
7,368,456
OIL - NORTH AMERICAN EXPLORATION & PRODUCTION 0.2%
Burlington Resources, Inc. 10,700 502,900
OIL - NORTH AMERICAN INTEGRATED 0.6%
Ashland, Inc. 17,500 925,312
USX-Marathon Group 25,500 913,219
------------
1,838,531
OIL WELL EQUIPMENT & SERVICE 0.4%
Cooper Cameron Corporation (b) 17,500 1,162,656
PAPER & FOREST PRODUCTS 0.3%
Fort James Corporation 15,500 769,187
PERSONAL & COMMERCIAL LENDING 1.5%
Associates First Capital Corporation 24,652 1,842,737
Beneficial Corporation 11,300 1,473,237
Household International, Inc. 8,600 1,130,363
------------
4,446,337
RAILROAD 0.2%
Burlington Northern Santa Fe Corporation 6,500 643,500
RETAIL - DEPARTMENT STORE 0.4%
J.C. Penney Company, Inc. 9,000 639,562
Sears, Roebuck & Company 10,700 634,644
------------
1,274,206
RETAIL - DRUG STORE 1.6%
CVS Corporation 19,000 1,401,250
Rite Aid Corporation 59,200 1,901,800
Walgreen Company 38,900 1,342,050
------------
4,645,100
RETAIL - FOOD CHAIN 0.5%
Safeway, Inc. (b) 41,500 1,587,375
RETAIL - MAJOR CHAIN 1.2%
Dayton Hudson Corporation 17,900 1,562,894
Wal-Mart Stores, Inc. 41,400 2,093,287
------------
3,656,181
RETAIL - RESTAURANT 0.3%
McDonald's Corporation 12,000 742,500
RETAIL - SPECIALTY 2.1%
Gap, Inc. 13,700 704,694
The Home Depot, Inc. 28,800 2,005,200
Lowe's Companies, Inc. 18,500 1,293,844
Office Depot, Inc. (b) 32,000 1,060,000
Tandy Corporation 22,500 1,119,375
------------
6,183,113
SAVINGS & LOAN 0.3%
Washington Mutual, Inc. 13,000 910,812
SOAP & CLEANING PREPARATION 1.6%
Clorox Company 24,900 2,088,488
The Procter & Gamble Company 33,000 2,712,187
------------
4,800,675
TELECOMMUNICATION EQUIPMENT 2.7%
Alcatel Alsthom Sponsored ADR 31,300 1,134,625
Ericsson (LM) Telephone Company ADR Class B 13,200 678,975
Lucent Technologies, Inc. 38,000 2,892,750
Northern Telecom, Ltd. 18,600 1,132,275
Tellabs, Inc. (b) 32,000 2,268,000
------------
8,106,625
TELECOMMUNICATION SERVICE 3.2%
AT&T Corporation 41,700 2,504,606
Bell Atlantic Corporation 18,800 1,758,975
MCI Communications Corporation 43,000 2,163,438
Sprint Corporation 33,500 2,288,469
Tele-Communications, Inc. - TCI Ventures Group
Series A (b) 16,370 267,050
US West, Inc. Media Group (b) 17,000 641,750
------------
9,624,288
TELEPHONE 1.2%
Ameritech Corporation 11,200 476,700
BellSouth Corporation 13,500 866,531
SBC Communications, Inc. 51,800 2,146,463
------------
3,489,694
TOBACCO 0.3%
Philip Morris Companies, Inc. 21,000 783,562
- ------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $161,799,659) 202,383,019
- ------------------------------------------------------------------------------
WARRANTS 0.4%
American Telecasting, Inc. Warrants, Expire 8/10/00 350 0
Concentric Network Warrants, Expire 12/15/07
(Acquired 12/15/97; Cost $6,980) (d) 2,000 18,000
e. spire Communications, Inc. Warrants, Expire
11/01/05 (Acquired 3/22/96; Cost $107,188) (d) 1,750 245,000
News Corporation Exchange Trust Warrants, Expire
11/12/16 (Acquired 11/04/96; Cost $1,831,250) (d) 50,000 837,500
- ------------------------------------------------------------------------------
TOTAL WARRANTS (COST $1,954,168) 1,100,500
- ------------------------------------------------------------------------------
PREFERRED STOCKS 1.6%
California Federal Bank 10.625% Series B 18,300 1,992,984
Nextlink Communications, Inc. 14.00% Senior
Exchangeable 46,310 2,801,755
- ------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS (COST $4,259,738) 4,794,739
- ------------------------------------------------------------------------------
CONVERTIBLE BONDS 0.6%
Metamor Worldwide, Inc. Subordinated Notes,
2.94%, Due 8/15/04 $ 725,000 759,438
Hexcel Corporation Subordinated Notes, 7.00%,
Due 8/01/03 500,000 933,125
- ------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS (COST $1,185,909) 1,692,563
- ------------------------------------------------------------------------------
CORPORATE BONDS 20.2%
Republic of Argentina Yankee Notes, 9.50%,
Due 11/30/02 2,000,000 1,977,500
Atlas Air, Inc. Senior Notes, 9.25%, Due 4/15/08
(Acquired 4/07/98; Cost $1,997,340) (d) 2,000,000 2,005,000
BF Saul Real Estate Investment Trust Senior
Secured Notes, 9.75%, Due 4/01/08 (Acquired
3/19/98; Cost $4,500,000) (d) 4,500,000 4,522,500
Chesapeake Energy Corporation Senior Notes,
9.125%, Due 4/15/06 2,000,000 1,985,000
Concentric Network Corporation Senior Notes,
12.75%, Due 12/15/07 (Acquired 12/15/97;
Cost $1,993,020) (d) 2,000,000 2,200,000
Convergent Communications, Inc. Units, 13.00%,
Due 4/01/08 (Acquired 3/26/98; Cost $2,000,000) (d) 2,000,000 1,980,000
Diamond Brands, Inc. Discount Debentures,
Zero %, Due 4/15/09 (Rate Reset Effective 4/15/03)
(Acquired 4/16/98; Cost $1,095,000) (d) 2,000,000 1,087,500
18
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
STRONG ASSET ALLOCATION FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
Diva Systems Corporation Units, 12.625%, Due
3/01/08 (Acquired 4/14/98; Cost $3,850,000) (d) $ 7,000,000 $ 3,832,500
First Palm Beach Bancorp, Inc. Senior Debentures,
10.35%, Due 6/30/02 1,000,000 1,065,000
Firstworld Communication Units, 13.00%, Due
4/15/08 (Acquired 4/06/98; Cost $1,597,050) (d) 3,000,000 1,530,000
Grupo Imsa SA de CV Senior Yankee Notes,
8.93%, Due 9/30/04 2,000,000 2,010,000
Intermedia Communications, Inc. Senior Notes,
Series B, 13.50%, Due 6/01/05 241,000 290,405
Intermedia Communications, Inc. Senior Notes,
8.875%, Due 11/01/07 3,000,000 3,120,000
Iron Mountain, Inc. Senior Subordinated Notes,
8.75%, Due 9/30/09 1,500,000 1,537,500
Jones Intercable, Inc. Senior Notes, 7.625%,
Due 4/15/08 4,000,000 3,920,000
Earle M. Jorgensen Company Senior Notes, 9.50%,
Due 4/01/05 (Acquired 3/19/98; Cost $2,500,000) (d) 2,500,000 2,512,500
Lin Television Corporation Senior Subordinated
Notes, 8.375%, Due 3/01/08 (Acquired 2/18/98;
Cost $1,995,320) (d) 2,000,000 2,005,000
North Fork Bancorp Capital Trust Pass-Thru
Securities, 8.70%, Due 12/15/26 4,000,000 4,283,904
NS Group, Inc. Senior Notes, 13.50%, Due 7/15/03 1,000,000 1,152,500
Paragon Corporation Holdings Senior Notes,
9.625%, Due 4/01/08 (Acquired 3/27/98;
Cost $2,000,000) (d) 2,000,000 1,980,000
Plitt Theatres, Inc. Senior Subordinated Yankee
Notes, 10.875%, Due 6/15/04 3,000,000 3,262,500
Qwest Communications International, Inc. Senior
Notes, Series B, 10.875%, Due 4/01/07 1,500,000 1,732,500
Qwest Communications International, Inc. Senior
Discount Notes, Zero %, Due 2/01/08 (Rate Reset
Effective 2/01/03) (Acquired 1/22/98;
Cost $1,331,840) (d) 2,000,000 1,380,000
RSL Communications PLC Senior Notes, 9.125%,
Due 3/01/08 (Acquired 2/24/98; Cost $2,000,000) (d) 2,000,000 1,990,000
SD Warren Company Senior Subordinated Notes,
Series B, 12.00%, Due 12/15/04 150,000 167,250
Star Markets Company Senior Subordinated Notes,
13.00%, Due 11/01/04 500,000 563,750
21st Century Telecom Group, Inc. Senior Discount
Notes, Zero %, Due 2/15/08 (Rate Reset Effective
2/15/03) (Acquired 2/26/98; Cost $265,000) (d) 500,000 285,000
United Artists Theatre Senior Subordinated Notes,
10.063%, Due 10/15/07 (Acquired 4/15/98;
Cost $3,000,000) (d) 3,000,000 3,000,000
US Air, Inc. Guaranteed Senior Notes, 10.00%,
Due 7/01/03 305,000 322,008
US Air, Inc. Pass-Thru Trust Certificates,
Series 1993-A2, 9.625%, Due 9/01/03 1,675,000 1,825,465
US Air, Inc. Senior Notes, 9.625%, Due 2/01/01 540,000 566,329
- ------------------------------------------------------------------------------
TOTAL CORPORATE BONDS (COST $59,115,234) 60,091,611
- ------------------------------------------------------------------------------
NON-AGENCY MORTGAGE & ASSET-BACKED SECURITIES 0.9%
Chase Mortgage Finance Corporation Mortgage
Pass-Thru Certificates, Series 1990-G, Class A-Z1,
9.50%, Due 12/25/21 646,357 661,708
First Boston Mortgage Securities Corporation
Mortgage Pass-Thru Certificates, Series 1993-2,
Class A-3, 7.50%, Due 3/25/33 947 964
MDC Asset Investors Trust V Collateralized
Mortgage Obligation, Class V-2, 9.325%,
Due 12/01/17 11,801 11,765
RTC Variable Rate Mortgage Pass-Thru
Securities, Inc., Series 1992-7, Class A-3, 7.4139%,
Due 3/25/22 1,633,016 1,629,129
Ryland Mortgage Securities Corporation III Variable
Rate Collateralized Mortgage Bonds, Series
1992-C, Class 3-A, 11.7220%, Due 11/25/30 273,378 286,107
- ------------------------------------------------------------------------------
TOTAL NON-AGENCY MORTGAGE & ASSET-BACKED SECURITIES(COST $2,574,199) 2,589,673
- ------------------------------------------------------------------------------
UNITED STATES GOVERNMENT & AGENCY ISSUES 2.3%
FHLMC Adjustable Rate Mortgage Participation
Certificates, 8.233%, Due 8/01/25 2,703,457 2,794,698
FHLMC Guaranteed Multiclass Mortgage
Participation Certificates, Series 1181, Class
1181-G, 7.50%, Due 8/15/05 74,841 74,968
FHLMC Guaranteed Pass-Thru Certificates:
9.50%, Due 1/01/06 102,187 106,256
10.25%, Due 3/01/15 107,123 115,981
10.50%, Due 1/01/16 22,417 24,651
FNMA Guaranteed Real Estate Mortgage
Investment Conduit Pass-Thru Certificates:
11.00%, Due 10/01/00 - 11/01/00 94,873 99,978
Series 1992-137, Class BA, 3.50%, Due 1/25/17 171,083 169,297
FNMA Guaranteed Real Estate Mortgage
Investment Conduit Variable Rate Pass-Thru
Certificates, Series G92-61, Class FJ, 6.068%,
Due 10/25/22 561,092 555,407
GNMA Guaranteed Pass-Thru Certificates, 7.50%,
Due 12/15/07 1,784,704 1,854,236
Small Business Administration Guaranteed Loan
Pool #440019, Interest Only Custodial Receipts,
Series 1993-1A, 2.531%, Due 2/15/18 13,442,719 1,209,845
- ------------------------------------------------------------------------------
TOTAL UNITED STATES GOVERNMENT & AGENCY ISSUES (COST $7,641,446) 7,005,317
- ------------------------------------------------------------------------------
OPTIONS 0.3%
Merrill Lynch Swaption (The option to receive a
fixed interest rate of 7.75%; exercisable at a
strike price of $100 beginning 4/09/04 and
expiring 4/09/25.) 9,500,000 1,005,100
- ------------------------------------------------------------------------------
TOTAL OPTIONS (COST $439,881) 1,005,100
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 4.7%
COMMERCIAL PAPER 0.3%
INTEREST BEARING, DUE UPON DEMAND
Johnson Controls, Inc., 5.26% $ 530,900 530,900
Pitney Bowes Credit Corporation, 5.26% 392,500 392,500
Wisconsin Electric Power Company, 5.24% 100 100
------------
923,500
REPURCHASE AGREEMENTS 4.3%
Goldman, Sachs & Company, Inc. (Dated 4/30/98),
5.45%, Due 5/01/98 (Repurchase Proceeds
$12,801,938); Collateralized by: $10,580,000 United
States Treasury Notes, 9.375%, Due 2/15/06
(Market Value $13,066,300) (e) 12,800,000 12,800,000
UNITED STATES GOVERNMENT & AGENCY ISSUES 0.1%
GNMA Guaranteed Pass-Thru Certificates,
10.25%, Due 10/15/98 404 406
United States Treasury Bills, Due 5/14/98 -
7/16/98 (c) 160,000 158,535
------------
158,941
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS (COST $13,882,402) 13,882,441
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES (COST $252,852,636) 99.0% 294,544,963
Other Assets and Liabilities, Net 1.0% 3,038,911
- ------------------------------------------------------------------------------
NET ASSETS 100.0% $297,583,874
==============================================================================
19
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
===============================================================================
STRONG ASSET ALLOCATION FUND (CONTINUED)
===============================================================================
- -------------------------------------------------------------------------------
FUTURES
- --------------------------------------------------------------------------
Underlying
Expiration Face Amount Unrealized
Date at Value Appreciation
- --------------------------------------------------------------------------
Purchased:
20 Two-Year U.S. Treasury Notes 6/98 $7,622,344 $19,880
70 Five-Year U.S. Treasury Notes 6/98 4,159,062 1,225
===============================================================================
STRONG BLUE CHIP 100 FUND
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
COMMON STOCKS 99.5%
AEROSPACE & DEFENSE 1.5%
The Boeing Company 11,800 $ 590,737
Lockheed Martin Corporation 700 77,963
----------
668,700
AUTOMOBILE 1.1%
Chrysler Corporation 2,500 100,469
Ford Motor Company 4,600 210,737
General Motors Corporation 2,700 181,913
----------
493,119
BANK - MONEY CENTER 7.8%
BankAmerica Corporation 2,700 229,500
Chase Manhattan Corporation 9,800 1,357,913
Citicorp 6,300 948,150
First Union Corporation 2,500 150,937
J. P. Morgan & Company, Inc. 700 91,875
NationsBank Corporation 9,600 727,200
----------
3,505,575
BANK - REGIONAL 0.3%
US Bancorp (b) 900 114,300
BANK - SUPER REGIONAL 3.7%
Banc One Corporation 2,500 147,031
The Bank of New York Company, Inc. 18,250 1,077,891
First Chicago NBD Corporation 1,100 102,162
Fleet Financial Group, Inc. 1,100 95,013
Norwest Corporation 2,900 115,094
Wells Fargo & Company 300 110,550
----------
1,647,741
BEVERAGE - ALCOHOLIC 0.2%
Anheuser-Busch Companies, Inc. 1,900 87,044
BEVERAGE - SOFT DRINK 2.7%
The Coca-Cola Company 12,700 963,613
PepsiCo, Inc. 5,900 234,156
----------
1,197,769
BROKERAGE & INVESTMENT MANAGEMENT 1.1%
Merrill Lynch & Company, Inc. 3,525 309,319
Morgan Stanley, Dean Witter & Company 2,300 181,412
----------
490,731
CHEMICAL 0.2%
The Dow Chemical Company 900 87,019
COMPUTER - MAINFRAME 0.9%
International Business Machines Corporation 3,700 428,737
COMPUTER - PERSONAL & WORKSTATION 4.9%
Compaq Computer Corporation 5,800 162,763
Dell Computer Corporation (b) 17,180 1,387,285
Hewlett-Packard Company 8,500 640,156
----------
2,190,204
COMPUTER SOFTWARE 6.1%
Cisco Systems, Inc. (b) 12,400 908,300
Computer Associates International, Inc. 2,100 122,981
Microsoft Corporation (b) 18,200 1,640,275
Oracle Systems Corporation (b) 3,800 98,325
----------
2,769,881
COSMETIC & PERSONAL CARE 2.2%
The Gillette Company 8,700 1,004,306
DIVERSIFIED OPERATIONS 1.8%
Allied Signal, Inc. 2,200 96,388
E.I. du Pont de Nemours & Company 4,400 320,375
Minnesota Mining & Manufacturing Company 1,600 151,000
Monsanto Company 2,300 121,612
Tyco International, Ltd. 2,200 119,900
----------
809,275
ELECTRIC POWER 0.2%
Duke Energy Company 1,400 81,025
ELECTRICAL EQUIPMENT 3.9%
Emerson Electric Company 1,700 108,163
General Electric Company 19,625 1,670,578
----------
1,778,741
ELECTRONICS - SEMICONDUCTOR/COMPONENT 2.3%
Intel Corporation 9,800 791,963
Motorola, Inc. 2,300 127,937
Texas Instruments, Inc. 1,500 96,094
----------
1,015,994
FINANCE - MISCELLANEOUS 0.7%
American Express Company 3,040 310,080
FOOD 1.2%
Campbell Soup Company 1,800 92,363
H.J. Heinz Company 1,400 76,300
Kellogg Company 1,600 66,000
Sara Lee Corporation 1,800 107,212
Unilever NV 2,500 186,562
----------
528,437
HEALTHCARE - DRUG/DIVERSIFIED 14.3%
Abbott Laboratories 2,900 212,063
American Home Products Corporation 2,500 232,812
Bristol-Myers Squibb Company 3,800 402,325
Johnson & Johnson 5,200 371,150
Eli Lilly & Company 4,300 299,119
Merck & Company, Inc. 4,600 554,300
Pfizer, Inc. 12,690 1,444,281
Pharmacia & Upjohn, Inc. 2,000 84,125
Schering-Plough Corporation 17,000 1,362,125
Warner-Lambert Company 7,800 1,475,662
----------
6,437,962
HEALTHCARE - INSTRUMENTATION 0.2%
Medtronic, Inc. 1,800 94,725
INSURANCE - DIVERSIFIED 1.1%
Travelers Group, Inc. 8,310 508,468
INSURANCE - PROPERTY & CASUALTY 3.2%
The Allstate Corporation 1,700 163,625
American International Group, Inc. 9,735 1,280,761
----------
1,444,386
LEISURE PRODUCT 0.2%
Eastman Kodak Company 1,300 93,844
20
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
STRONG BLUE CHIP 100 FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
LEISURE SERVICE 0.7%
The Walt Disney Company 2,600 $ 323,212
MEDIA - PUBLISHING 2.7%
Time Warner, Inc. 15,400 1,208,900
MEDIA - RADIO/TV 2.3%
CBS Corporation 28,700 1,022,437
MORTGAGE & RELATED SERVICE 0.8%
Federal Home Loan Mortgage Corporation 2,700 125,044
Federal National Mortgage Association 4,100 245,487
-----------
370,531
OFFICE AUTOMATION 2.3%
Xerox Corporation 9,200 1,044,200
OIL - INTERNATIONAL INTEGRATED 3.8%
Chevron Corporation 2,500 206,719
Exxon Corporation 9,500 692,906
Mobil Corporation 3,000 237,000
Royal Dutch Petroleum Company - New York
Registry Shares 8,300 469,469
Texaco, Inc. 2,100 129,150
-----------
1,735,244
OIL - NORTH AMERICAN INTEGRATED 0.6%
Amoco Corporation 3,800 168,150
Atlantic Richfield Company 1,200 93,600
-----------
261,750
OIL WELL EQUIPMENT & SERVICE 3.1%
Schlumberger, Ltd. 16,900 1,400,587
PAPER & FOREST PRODUCTS 0.2%
Kimberly-Clark Corporation 2,200 111,650
PERSONAL & COMMERCIAL LENDING 1.1%
Associates First Capital Corporation 6,760 505,310
RETAIL - MAJOR CHAIN 3.0%
Wal-Mart Stores, Inc. 27,120 1,371,255
RETAIL - RESTAURANT 0.4%
McDonald's Corporation 2,600 160,875
RETAIL - SPECIALTY 2.8%
The Home Depot, Inc. 18,305 1,274,486
SOAP & CLEANING PREPARATION 3.0%
Colgate Palmolive Company 4,100 367,719
The Procter & Gamble Company 12,200 1,002,687
-----------
1,370,406
TELECOMMUNICATION EQUIPMENT 1.1%
Lucent Technologies, Inc. 5,000 380,625
Northern Telecom, Ltd. 2,000 121,750
-----------
502,375
TELECOMMUNICATION SERVICE 6.7%
AT&T Corporation 6,300 378,394
AirTouch Communications, Inc. 2,200 116,875
Bell Atlantic Corporation 3,000 280,687
MCI Communications Corporation 2,700 135,844
Sprint Corporation 14,700 1,004,194
WorldCom, Inc. 25,400 1,086,644
-----------
3,002,638
TELEPHONE 2.3%
Ameritech Corporation 4,200 178,763
BellSouth Corporation 3,800 243,912
GTE Corporation 3,700 216,219
SBC Communications, Inc. 7,100 294,206
US WEST Communications, Inc. 1,900 100,225
-----------
1,033,325
TOBACCO 0.8%
Philip Morris Companies, Inc. 9,300 347,006
- ------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $42,183,454) 44,834,250
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 1.8%
COMMERCIAL PAPER
INTEREST BEARING, DUE UPON DEMAND
General Mills, Inc., 5.26% $ 28,400 28,400
Johnson Controls, Inc., 5.26% 191,000 191,000
Pitney Bowes Credit Corporation, 5.26% 83,000 83,000
Sara Lee Corporation, 5.26% 21,800 21,800
Warner Lambert Company, 5.23% 502,300 502,300
Wisconsin Electric Power Company, 5.24% 100 100
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS (COST $826,600) 826,600
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES (COST $43,010,054) 101.3% 45,660,850
Other Assets & Liabilities, Net (1.3%) (596,611)
- ------------------------------------------------------------------------------
NET ASSETS 100.0% $45,064,239
==============================================================================
===============================================================================
STRONG EQUITY INCOME FUND
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
COMMON STOCKS 95.3%
AEROSPACE & DEFENSE 1.7%
Raytheon Company Class B 13,500 $ 765,281
Thiokol Corporation 21,200 1,142,150
United Technologies Corporation 11,000 1,082,813
----------
2,990,244
AIRLINE 0.3%
AMR Corporation (b) 3,100 472,363
AUTO & TRUCK PARTS 0.5%
The Goodyear Tire & Rubber Company 12,600 882,000
AUTOMOBILE 0.6%
Ford Motor Company 22,000 1,007,875
BANK - MONEY CENTER 5.5%
BankAmerica Corporation 15,200 1,292,000
Chase Manhattan Corporation 16,500 2,286,281
Citicorp 18,400 2,769,200
First Union Corporation 13,000 784,875
NationsBank Corporation 34,100 2,583,075
----------
9,715,431
BANK - REGIONAL 0.9%
Republic New York Corporation 3,300 441,375
US Bancorp (b) 9,200 1,168,400
----------
1,609,775
BANK - SUPER REGIONAL 4.8%
Banc One Corporation 23,540 1,384,446
The Bank of New York Company, Inc. 19,400 1,145,813
21
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
===============================================================================
STRONG EQUITY INCOME FUND (continued)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
Comerica, Inc. 24,300 $ 1,626,581
First Chicago NBD Corporation 14,500 1,346,687
Mellon Bank Corporation 26,100 1,879,200
Norwest Corporation 11,300 448,469
Wells Fargo & Company 2,000 737,000
-----------
8,568,196
BEVERAGE - SOFT DRINK 1.5%
The Coca-Cola Company 13,500 1,024,313
PepsiCo, Inc. 41,400 1,643,062
-----------
2,667,375
BROKERAGE & INVESTMENT MANAGEMENT 0.6%
Merrill Lynch & Company, Inc. 12,600 1,105,650
COMMERCIAL SERVICE 1.6%
Avery Dennison Corporation 16,800 879,900
The Interpublic Group of Companies, Inc. 30,900 1,973,738
-----------
2,853,638
COMPUTER - MAINFRAME 1.3%
International Business Machines Corporation 20,400 2,363,850
COMPUTER - PERSONAL & WORKSTATION 0.8%
Hewlett-Packard Company 18,000 1,355,625
COMPUTER SOFTWARE 0.5%
BMC Software, Inc. (b) 8,600 804,638
CONTAINER 0.3%
Sealed Air Corporation 9,400 589,263
COSMETIC & PERSONAL CARE 0.7%
The Gillette Company 10,900 1,258,269
DIVERSIFIED OPERATIONS 4.5%
Allied Signal, Inc. 26,400 1,156,650
E.I. Du Pont de Nemours & Company 18,300 1,332,469
Harsco Corporation 13,500 621,000
Johnson Controls, Inc. 16,000 950,000
Minnesota Mining & Manufacturing Company 5,300 500,187
Textron, Inc. 21,900 1,713,675
Tyco International, Ltd. 31,200 1,700,400
-----------
7,974,381
ELECTRIC POWER 0.7%
Duke Energy Company 14,500 839,188
UNICOM Corporation 10,000 347,500
-----------
1,186,688
ELECTRICAL EQUIPMENT 4.0%
Emerson Electric Company 17,000 1,081,625
General Electric Company 70,000 5,958,750
-----------
7,040,375
ELECTRONIC PRODUCTS - MISCELLANEOUS 0.4%
General Motors Corporation Class H 13,200 729,300
FINANCE - MISCELLANEOUS 2.2%
American Express Company 18,400 1,876,800
Morgan Stanley, Dean Witter & Company 14,500 1,143,688
SunAmerica, Inc. 17,500 873,906
-----------
3,894,394
FOOD 2.3%
Bestfoods 16,000 878,000
Dean Foods Company 21,400 1,003,125
Hershey Foods Corporation 2,000 146,500
Sara Lee Corporation 18,000 1,072,125
Unilever NV 12,800 955,200
-----------
4,054,950
HEALTHCARE - DRUG/DIVERSIFIED 9.2%
American Home Products Corporation 6,000 558,750
Bristol-Myers Squibb Company 22,000 2,329,250
Johnson & Johnson 18,700 1,334,712
Eli Lilly & Company 26,900 1,871,232
Merck & Company, Inc. 23,800 2,867,900
Pfizer, Inc. 29,900 3,402,994
Schering-Plough Corporation 23,700 1,898,963
Smithkline Beecham PLC Sponsored ADR 8,000 476,500
Warner-Lambert Company 8,400 1,589,175
-----------
16,329,476
HEALTHCARE - MEDICAL SUPPLY 1.4%
Becton, Dickinson & Company 16,900 1,176,663
McKesson Corporation 18,000 1,272,375
-----------
2,449,038
HEALTHCARE - PATIENT CARE 0.8%
Integrated Health Services, Inc. 17,100 659,419
United Healthcare Corporation 10,100 709,525
-----------
1,368,944
HOUSING RELATED 1.5%
Masco Corporation 28,300 1,641,400
Sherwin Williams Company 11,600 413,250
Snap-On, Inc. 14,700 621,993
-----------
2,676,643
INSURANCE - ACCIDENT & HEALTH 0.6%
UNUM Corporation 18,500 994,375
INSURANCE - DIVERSIFIED 1.5%
Marsh & McLennan Companies, Inc. 9,900 902,138
Travelers Group, Inc. 29,699 1,817,207
-----------
2,719,345
INSURANCE - LIFE 0.8%
Lincoln National Corporation 9,500 843,719
Reliastar Financial Corporation 12,400 565,750
-----------
1,409,469
INSURANCE - PROPERTY & CASUALTY 3.0%
The Allstate Corporation 14,700 1,414,875
American International Group, Inc. 11,550 1,519,547
Chubb Corporation 15,800 1,247,212
The PMI Group, Inc. 13,400 1,088,750
-----------
5,270,384
LEISURE SERVICE 1.0%
The Walt Disney Company 14,600 1,814,963
MACHINERY - MISCELLANEOUS 1.0%
Cooper Industries, Inc. 7,800 521,625
Ingersoll-Rand Company 25,200 1,160,775
-----------
1,682,400
MACHINERY - TRANSPORTATION EQUIPMENT & PARTS 0.5%
Dana Corporation 15,500 916,437
MEDIA - PUBLISHING 3.2%
Gannett Company, Inc. 17,000 1,154,938
McGraw-Hill, Inc. 17,100 1,324,181
News Corporation, Ltd. Sponsored ADR 37,500 1,024,219
Time Warner, Inc. 26,500 2,080,250
-----------
5,583,588
MEDIA - RADIO/TV 1.3%
CBS Corporation 42,500 1,514,063
Tele-Communications, Inc. Liberty Media Group
Series A (b) 22,800 756,675
-----------
2,270,738
METAL PRODUCTS & FABRICATION 0.5%
Illinois Tool Works, Inc. 12,600 888,300
22
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
STRONG EQUITY INCOME FUND (continued)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
METALS & MINING 0.5%
Southdown, Inc. 12,800 $ 905,600
MORTGAGE & RELATED SERVICE 1.8%
Federal Home Loan Mortgage Corporation 29,000 1,343,062
Federal National Mortgage Association 30,000 1,796,250
------------
3,139,312
NATURAL GAS DISTRIBUTION 0.8%
MCN Energy Group, Inc. 36,500 1,377,875
OFFICE AUTOMATION 2.4%
Pitney Bowes, Inc. 34,800 1,670,400
Xerox Corporation 23,000 2,610,500
------------
4,280,900
OIL - INTERNATIONAL INTEGRATED 4.0%
Chevron Corporation 14,100 1,165,894
Exxon Corporation 25,300 1,845,318
Mobil Corporation 16,000 1,264,000
Royal Dutch Petroleum Company - New York
Registry Shares 36,800 2,081,500
Texaco, Inc. 12,100 744,150
------------
7,100,862
OIL - NORTH AMERICAN EXPLORATION & PRODUCTION 0.2%
Burlington Resources, Inc. 9,300 437,100
OIL - NORTH AMERICAN INTEGRATED 1.1%
Ashland, Inc. 16,700 883,013
USX-Marathon Group 28,900 1,034,981
------------
1,917,994
OIL WELL EQUIPMENT & SERVICE 0.6%
Cooper Cameron Corporation (b) 14,600 969,987
PAPER & FOREST PRODUCTS 1.2%
Fort James Corporation 12,500 620,312
International Paper Company 10,200 532,312
The Mead Corporation 26,800 927,950
------------
2,080,574
PERSONAL & COMMERCIAL LENDING 2.1%
Associates First Capital Corporation 19,261 1,439,760
Beneficial Corporation 9,500 1,238,562
Household International, Inc. 8,400 1,104,075
------------
3,782,397
RAILROAD 0.5%
Burlington Northern Santa Fe Corporation 5,400 534,600
CSX Corporation 8,200 430,500
------------
965,100
REAL ESTATE 0.8%
Bradley Real Estate, Inc. 28,100 584,831
Duke Realty Investments, Inc. 13,400 319,087
Spieker Properties, Inc. 12,700 503,237
------------
1,407,155
RETAIL - DEPARTMENT STORE 0.6%
J.C. Penney Company, Inc. 7,500 532,969
Sears, Roebuck & Company 9,100 539,744
------------
1,072,713
RETAIL - DRUG STORE 1.6%
Rite Aid Corporation 46,600 1,497,025
Walgreen Company 36,000 1,242,000
------------
2,739,025
RETAIL - FOOD CHAIN 0.6%
American Stores Company 47,500 1,140,000
RETAIL - MAJOR CHAIN 1.9%
Dayton Hudson Corporation 15,500 1,353,344
Wal-Mart Stores, Inc. 40,200 2,032,612
------------
3,385,956
RETAIL - RESTAURANT 0.3%
McDonald's Corporation 9,600 594,000
RETAIL - SPECIALTY 2.9%
Gap, Inc. 11,700 601,819
The Home Depot, Inc. 25,550 1,778,919
Lowe's Companies, Inc. 14,400 1,007,100
Office Depot, Inc. (b) 12,900 427,312
Tandy Corporation 24,400 1,213,900
------------
5,029,050
SOAP & CLEANING PREPARATION 2.3%
Clorox Company 19,400 1,627,175
The Procter & Gamble Company 30,300 2,490,281
------------
4,117,456
TELECOMMUNICATION SERVICE 4.5%
AT&T Corporation 36,600 2,198,288
AirTouch Communications, Inc. (b) 10,800 573,750
Bell Atlantic Corporation 15,000 1,403,437
MCI Communications Corporation 37,100 1,866,594
Sprint Corporation 28,900 1,974,231
------------
8,016,300
TELEPHONE 1.9%
Ameritech Corporation 10,600 451,162
BellSouth Corporation 21,800 1,399,287
SBC Communications, Inc. 38,000 1,574,625
------------
3,425,074
TOBACCO 0.7%
Philip Morris Companies, Inc. 32,700 1,220,119
- ------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $133,170,137) 168,602,929
- ------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS 2.8%
Cendant Corporation 7.50% 25,000 1,029,687
Corning LP 6.00% Monthly Income Securities 9,300 587,063
Houston Industries, Inc. 7.00% Automatic Common
Exchange Securities 30,000 2,081,250
Merrill Lynch & Company, Inc. Structured Yield
Product, 6.50%, Due 8/15/98 5,800 609,000
Ralston Purina Company 7.00% Stock Appreciation
Income Linked Securities 10,000 608,750
- ------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS (COST $4,125,679) 4,915,750
- ------------------------------------------------------------------------------
CONVERTIBLE BONDS 1.6%
Altera Corporation Subordinated Notes, 5.75%,
Due 6/15/02 $ 155,000 245,481
Federated Department Stores, Inc. Subordinated
Notes, 5.00%, Due 10/01/03 200,000 297,000
Hexcel Corporation Subordinated Notes, 7.00%,
Due 8/01/03 410,000 765,163
Loews Corporation Exchangeable Subordinated
Notes, 3.125%, Due 9/15/07 (Exchangeable into
Diamond Offshore Drilling, Inc. Common Stock) 500,000 506,875
World Color Press, Inc. Senior Subordinated Notes,
6.00%, Due 10/10/07 1,000,000 1,070,000
- ------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS (COST $2,402,169) 2,884,519
- ------------------------------------------------------------------------------
23
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
===============================================================================
STRONG EQUITY INCOME FUND (continued)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 0.2%
COMMERCIAL PAPER
INTEREST-BEARING, DUE UPON DEMAND
General Mills, Inc., 5.26% $ 14,300 $ 14,300
Pitney Bowes Credit Corporation, 5.26% 379,000 379,000
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS (COST $393,300) 393,300
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES (COST $140,091,285) 99.9% 176,796,498
Other Assets and Liabilities, Net 0.1% 180,321
- ------------------------------------------------------------------------------
NET ASSETS 100.0% $176,976,819
==============================================================================
===============================================================================
STRONG GROWTH AND INCOME FUND
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
COMMON STOCKS 99.6%
AEROSPACE & DEFENSE 0.6%
United Technologies Corporation 18,800 $ 1,850,625
AIRLINE 0.3%
AMR Corporation (b) 5,600 853,300
AUTO & TRUCK PARTS 0.5%
The Goodyear Tire & Rubber Company 23,000 1,610,000
AUTOMOBILE 0.5%
Ford Motor Company 39,500 1,809,594
BANK - MONEY CENTER 5.3%
BankAmerica Corporation 33,100 2,813,500
Chase Manhattan Corporation 28,900 4,004,456
Citicorp 32,100 4,831,050
First Union Corporation 22,000 1,328,250
NationsBank Corporation 58,900 4,461,675
-----------
17,438,931
BANK - REGIONAL 0.8%
Republic New York Corporation 5,600 749,000
US Bancorp (b) 15,600 1,981,200
-----------
2,730,200
BANK - SUPER REGIONAL 4.8%
Banc One Corporation 39,490 2,322,506
The Bank of New York Company, Inc. 33,200 1,960,875
Comerica, Inc. 39,450 2,640,684
First Chicago NBD Corporation 25,800 2,396,175
Fleet Financial Group, Inc. 14,300 1,235,163
Mellon Bank Corporation 42,100 3,031,200
Norwest Corporation 21,400 849,312
Wells Fargo & Company 3,600 1,326,600
-----------
15,762,515
BEVERAGE - SOFT DRINK 2.5%
The Coca-Cola Company 70,500 5,349,187
PepsiCo, Inc. 74,500 2,956,719
-----------
8,305,906
BROKERAGE & INVESTMENT MANAGEMENT 0.6%
Merrill Lynch & Company, Inc. 22,700 1,991,925
COMMERCIAL SERVICE 0.7%
The Interpublic Group of Companies, Inc. 36,950 2,360,181
COMPUTER - MAINFRAME 1.3%
International Business Machines Corporation 36,100 4,183,087
COMPUTER - PERSONAL & WORKSTATION 1.7%
Dell Computer Corporation (b) 33,200 2,680,900
Hewlett-Packard Company 32,100 2,417,531
Sun Microsystems, Inc. (b) 11,700 481,894
-----------
5,580,325
COMPUTER SOFTWARE 5.6%
America Online, Inc. (b) 20,400 1,632,000
BMC Software, Inc. (b) 25,700 2,404,556
Cisco Systems, Inc. (b) 52,550 3,849,288
Computer Associates International, Inc. 19,000 1,112,688
Compuware Corporation (b) 17,500 855,313
HBO & Company 13,200 789,525
Microsoft Corporation (b) 79,200 7,137,900
Oracle Systems Corporation (b) 25,000 646,875
-----------
18,428,145
CONTAINER 0.3%
Sealed Air Corporation (b) 16,500 1,034,344
COSMETIC & PERSONAL CARE 0.6%
The Gillette Company 18,700 2,158,681
DIVERSIFIED OPERATIONS 4.7%
Allied Signal, Inc. 47,600 2,085,475
E.I. Du Pont de Nemours & Company 31,200 2,271,750
Johnson Controls, Inc. 28,200 1,674,375
Minnesota Mining & Manufacturing Company 9,000 849,375
Monsanto Company 16,600 877,725
Textron, Inc. 37,200 2,910,900
Tyco International, Ltd. 84,752 4,618,984
-----------
15,288,584
ELECTRICAL EQUIPMENT 3.9%
Emerson Electric Company 28,000 1,781,500
General Electric Company 131,300 11,176,913
-----------
12,958,413
ELECTRONIC PRODUCTS - MISCELLANEOUS 0.4%
General Motors Corporation Class H 22,000 1,215,500
ELECTRONICS - SEMICONDUCTOR/COMPONENT 1.8%
Altera Corporation (b) 20,600 834,300
Intel Corporation 52,900 4,274,981
Texas Instruments, Inc. 10,500 672,656
-----------
5,781,937
FINANCE - MISCELLANEOUS 1.9%
American Express Company 31,400 3,202,800
Morgan Stanley, Dean Witter & Company 18,500 1,459,187
SunAmerica, Inc. 29,300 1,463,169
-----------
6,125,156
FOOD 1.7%
Bestfoods 27,200 1,492,600
Sara Lee Corporation 30,600 1,822,613
Unilever NV 31,300 2,335,763
-----------
5,650,976
HEALTHCARE - DRUG/DIVERSIFIED 8.6%
Alza Corporation (b) 15,700 752,619
American Home Products Corporation 10,000 931,250
Bristol-Myers Squibb Company 35,900 3,800,912
Johnson & Johnson 32,300 2,305,413
Eli Lilly & Company 48,600 3,380,737
Merck & Company, Inc. 35,900 4,325,950
Pfizer, Inc. 51,700 5,884,106
24
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
STRONG GROWTH AND INCOME FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
Schering-Plough Corporation 41,300 $ 3,309,163
Warner-Lambert Company 18,400 3,481,050
-----------
28,171,200
HEALTHCARE - INSTRUMENTATION 0.3%
Medtronic, Inc. 16,000 842,000
HEALTHCARE - MEDICAL SUPPLY 1.3%
Becton, Dickinson & Company 30,000 2,088,750
McKesson Corporation 30,800 2,177,175
-----------
4,265,925
HEALTHCARE - PATIENT CARE 0.4%
United Healthcare Corporation 18,100 1,271,525
HOUSING RELATED 0.8%
Masco Corporation 46,100 2,673,800
INSURANCE - ACCIDENT & HEALTH 0.5%
UNUM Corporation 31,200 1,677,000
INSURANCE - DIVERSIFIED 1.4%
Marsh & McLennan Companies, Inc. 16,600 1,512,675
Travelers Group, Inc. 52,800 3,230,700
-----------
4,743,375
INSURANCE - LIFE 0.7%
Lincoln National Corporation 15,900 1,412,119
Reliastar Financial Corporation 19,000 866,875
-----------
2,278,994
INSURANCE - PROPERTY & CASUALTY 2.8%
The Allstate Corporation 25,000 2,406,250
American International Group, Inc. 22,000 2,894,375
Chubb Corporation 27,200 2,147,100
The PMI Group, Inc. 23,200 1,885,000
-----------
9,332,725
LEISURE SERVICE 1.1%
The Walt Disney Company 29,000 3,605,062
MACHINERY - MISCELLANEOUS 0.8%
Cooper Industries, Inc. 13,200 882,750
Ingersoll-Rand Company 39,900 1,837,894
-----------
2,720,644
MACHINERY - TRANSPORTATION EQUIPMENT & PARTS 0.5%
Dana Corporation 27,000 1,596,375
MEDIA - PUBLISHING 2.7%
Gannett Company, Inc. 21,300 1,447,069
McGraw-Hill, Inc. 26,900 2,083,069
News Corporation, Ltd. Sponsored ADR 65,000 1,775,313
Time Warner, Inc. 45,200 3,548,200
-----------
8,853,651
MEDIA - RADIO/TV 2.4%
CBS Corporation 70,800 2,522,250
Clear Channel Communications, Inc. (b) 28,200 2,657,850
Cox Communications, Inc. Class A (b) 29,900 1,334,287
Tele-Communications, Inc. Liberty Media Group
Series A (b) 38,400 1,274,400
-----------
7,788,787
METAL PRODUCTS & FABRICATION 0.6%
Illinois Tool Works, Inc. 25,600 1,804,800
METALS & MINING 0.4%
Southdown, Inc. 20,300 1,436,225
MORTGAGE & RELATED SERVICE 1.6%
Federal Home Loan Mortgage Corporation 49,500 2,292,469
Federal National Mortgage Association 50,700 3,035,662
-----------
5,328,131
NATURAL GAS DISTRIBUTION 0.2%
El Paso Natural Gas Company 21,100 779,381
OFFICE AUTOMATION 2.2%
Pitney Bowes, Inc. 58,000 2,784,000
Xerox Corporation 39,100 4,437,850
-----------
7,221,850
OIL - INTERNATIONAL INTEGRATED 4.2%
British Petroleum PLC ADR 14,300 1,351,350
Chevron Corporation 24,400 2,017,575
Exxon Corporation 43,600 3,180,075
Mobil Corporation 29,000 2,291,000
Royal Dutch Petroleum Company - New York
Registry Shares 64,420 3,643,756
Texaco, Inc. 20,200 1,242,300
-----------
13,726,056
OIL - NORTH AMERICAN EXPLORATION & PRODUCTION 0.4%
Burlington Resources, Inc. 26,200 1,231,400
OIL - NORTH AMERICAN INTEGRATED 0.8%
Ashland, Inc. 26,000 1,374,750
USX-Marathon Group 32,600 1,167,488
-----------
2,542,238
OIL WELL EQUIPMENT & SERVICE 0.5%
Cooper Cameron Corporation (b) 25,300 1,680,868
PAPER & FOREST PRODUCTS 0.6%
Fort James Corporation 21,500 1,066,938
International Paper Company 19,000 991,562
-----------
2,058,500
PERSONAL & COMMERCIAL LENDING 1.9%
Associates First Capital Corporation 32,305 2,414,799
Beneficial Corporation 16,500 2,151,187
Household International, Inc. 12,500 1,642,968
-----------
6,208,954
RAILROAD 0.3%
Burlington Northern Santa Fe Corporation 9,100 900,900
RETAIL - DEPARTMENT STORE 0.8%
Fred Meyer, Inc. (b) 17,500 785,313
J.C. Penney Company, Inc. 12,500 888,281
Sears, Roebuck & Company 15,500 919,344
-----------
2,592,938
RETAIL - DRUG STORE 1.8%
CVS Corporation 24,000 1,770,000
Rite Aid Corporation 78,600 2,525,025
Walgreen Company 51,400 1,773,300
-----------
6,068,325
RETAIL - FOOD CHAIN 0.8%
Safeway, Inc. (b) 68,000 2,601,000
RETAIL - MAJOR CHAIN 1.7%
Dayton Hudson Corporation 26,800 2,339,975
Wal-Mart Stores, Inc. 61,300 3,099,481
-----------
5,439,456
RETAIL - RESTAURANT 0.4%
McDonald's Corporation 22,900 1,416,937
25
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
===============================================================================
STRONG GROWTH AND INCOME FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
RETAIL - SPECIALTY 2.9%
Gap, Inc. 20,000 $ 1,028,750
The Home Depot, Inc. 43,900 3,056,537
Lowe's Companies, Inc. 24,200 1,692,488
Office Depot, Inc. (b) 46,900 1,553,562
Tandy Corporation 42,700 2,124,325
------------
9,455,662
SAVINGS & LOAN 0.4%
Washington Mutual, Inc. 17,000 1,191,062
SOAP & CLEANING PREPARATION 2.1%
Clorox Company 32,200 2,700,775
The Procter & Gamble Company 51,800 4,257,312
------------
6,958,087
TELECOMMUNICATION EQUIPMENT 4.2%
Alcatel Alsthom Sponsored ADR 68,000 2,465,000
Ericsson (LM) Telephone Company ADR Class B 30,400 1,563,700
Lucent Technologies, Inc. 60,000 4,567,500
Northern Telecom, Ltd. 27,700 1,686,238
Tellabs, Inc. (b) 48,000 3,402,000
------------
13,684,438
TELECOMMUNICATION SERVICE 4.5%
AT&T Corporation 61,600 3,699,850
AirTouch Communications, Inc. (b) 18,500 982,812
Bell Atlantic Corporation 25,500 2,385,844
MCI Communications Corporation 65,000 3,270,313
Sprint Corporation 50,700 3,463,444
US WEST, Inc. Media Group (b) 27,000 1,019,250
------------
14,821,513
TELEPHONE 1.1%
Ameritech Corporation 18,200 774,638
SBC Communications, Inc. 65,000 2,693,438
------------
3,468,076
TOBACCO 0.4%
Philip Morris Companies, Inc. 32,000 1,194,000
- ------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $264,291,026) 326,750,185
- ------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS 0.3%
Merrill Lynch & Company, Inc. Structured Yield
Product, 6.50%, Due 8/15/98 8,800 924,000
- ------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS (COST $551,704) 924,000
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 0.6%
COMMERCIAL PAPER
INTEREST BEARING, DUE UPON DEMAND
General Mills, Inc., 5.26% $709,400 709,400
Johnson Controls, Inc., 5.26% 574,400 574,400
Pitney Bowes Credit Corporation, 5.26% 579,300 579,300
Sara Lee Corporation, 5.26% 9,700 9,700
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS (COST $1,872,800) 1,872,800
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES (COST $266,715,530) 100.5% 329,546,985
Other Assets and Liabilities, Net (0.5%) (1,438,836)
- ------------------------------------------------------------------------------
NET ASSETS 100.0% $328,108,149
==============================================================================
- -------------------------------------------------------------------------------
===============================================================================
STRONG LIMITED RESOURCES FUND
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
COMMON STOCKS 96.3%
CHEMICAL - SPECIALTY 4.0%
OM Group, Inc. 3,000 $ 132,938
Praxair, Inc. 2,500 125,781
----------
258,719
DIVERSIFIED OPERATIONS 3.4%
E.I. Du Pont de Nemours & Company 3,000 218,438
NATURAL GAS DISTRIBUTION 15.3%
Coastal Corporation 3,200 228,600
Enron Corporation 4,700 231,181
KN Energy, Inc. 5,000 293,438
Questar Corporation 5,400 234,225
----------
987,444
OIL - INTERNATIONAL INTEGRATED 8.7%
Chevron Corporation 3,700 305,944
YPF Sociedad Anonima ADR 7,400 258,075
----------
564,019
OIL - NORTH AMERICAN EXPLORATION & PRODUCTION 32.0%
Anadarko Petroleum Corporation 2,000 146,500
Burlington Resources, Inc. 4,600 216,200
Enron Oil & Gas Company 13,400 313,225
Gulf Canada Resources, Ltd. ADR (b) 50,000 265,625
Mitchell Energy & Development Corporation 7,000 176,750
Noble Affiliates, Inc. 7,000 301,875
Ocean Energy, Inc. (b) 12,870 315,315
Seagull Energy Corporation (b) 7,000 119,437
Snyder Oil Corporation 10,000 213,125
----------
2,068,052
OIL - NORTH AMERICAN INTEGRATED 9.0%
Amerada Hess Corporation 3,500 201,250
Transmontaigne Oil Company (b) 15,000 219,375
Ultramar Diamond Shamrock Corporation 5,000 161,562
----------
582,187
OIL WELL EQUIPMENT & SERVICE 14.8%
Cooper Cameron Corporation (b) 4,000 265,750
ENSCO International, Inc. 5,000 141,250
Nabors Industries, Inc. (b) 5,000 125,938
Schlumberger, Ltd. 2,300 190,612
Smith International, Inc. (b) 4,000 235,000
----------
958,550
PAPER & FOREST PRODUCTS 6.9%
Kimberly-Clark Corporation 4,100 208,075
Willamette Industries, Inc. 6,200 240,637
----------
448,712
STEEL 2.2%
Ispat International NV-New York Registry Shares 5,000 140,000
- ------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $6,131,721) 6,226,121
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 3.6%
COMMERCIAL PAPER
INTEREST BEARING, DUE UPON DEMAND
Johnson Controls, Inc., 5.26% $213,600 213,600
Pitney Bowes Credit Corporation, 5.26% 18,900 18,900
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS (COST $232,500) 232,500
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES (COST $6,364,221) 99.9% 6,458,621
Other Assets and Liabilities, Net 0.1% 7,522
- ------------------------------------------------------------------------------
NET ASSETS 100.0% $6,466,143
==============================================================================
26
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
STRONG TOTAL RETURN FUND
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
COMMON STOCKS 91.7%
AEROSPACE & DEFENSE 0.6%
B.F. Goodrich & Company 40,000 $ 2,152,500
United Technologies Corporation 30,000 2,953,125
-----------
5,105,625
AUTO & TRUCK PARTS 0.4%
The Goodyear Tire & Rubber Company 50,000 3,500,000
AUTOMOBILE 0.4%
Ford Motor Company 75,000 3,435,938
BANK - MONEY CENTER 2.5%
BankAmerica Corporation 75,000 6,375,000
Chase Manhattan Corporation 15,000 2,078,437
Citicorp 45,000 6,772,500
NationsBank Corporation 100,000 7,575,000
-----------
22,800,937
BANK - REGIONAL 2.6%
Northern Trust Company 165,000 12,045,000
US Bancorp (b) 90,000 11,430,000
-----------
23,475,000
BANK - SUPER REGIONAL 1.9%
Banc One Corporation 33,000 1,940,812
The Bank of New York Company, Inc. 50,000 2,953,125
Norwest Corporation 245,000 9,723,438
Wells Fargo & Company 7,000 2,579,500
-----------
17,196,875
BEVERAGE - SOFT DRINK 1.6%
The Coca-Cola Company 195,000 14,795,625
BROKERAGE & INVESTMENT MANAGEMENT 1.6%
Kansas City Southern Industries, Inc. 60,000 2,711,250
Merrill Lynch & Company, Inc. 55,000 4,826,250
Morgan Stanley, Dean Witter & Company 90,000 7,098,750
-----------
14,636,250
COMMERCIAL SERVICE 0.8%
GATX Corporation 90,000 7,458,750
COMPUTER - MAINFRAME 0.9%
International Business Machines Corporation 70,000 8,111,250
COMPUTER - PERSONAL & WORKSTATION 0.9%
Dell Computer Corporation (b) 100,000 8,075,000
COMPUTER SOFTWARE 7.7%
Ascend Communications, Inc. (b) 260,000 11,326,250
Cisco Systems, Inc. (b) 150,000 10,987,500
Computer Associates International, Inc. 60,000 3,513,750
HBO & Company 210,000 12,560,625
Microsoft Corporation (b) 220,000 19,827,500
Network Associates, Inc. (b) 40,000 2,740,000
Oracle Systems Corporation (b) 85,000 2,199,375
PeopleSoft, Inc. (b) 145,000 6,742,500
-----------
69,897,500
COSMETIC & PERSONAL CARE 0.8%
The Gillette Company 62,000 7,157,125
DIVERSIFIED OPERATIONS 3.5%
E.I. Du Pont de Nemours & Company 85,000 6,189,062
Monsanto Company 230,000 12,161,250
Textron, Inc. 48,000 3,756,000
Tyco International, Ltd. 170,000 9,265,000
-----------
31,371,312
ELECTRICAL EQUIPMENT 3.6%
Emerson Electric Company 55,000 3,499,375
General Electric Company 340,000 28,942,500
-----------
32,441,875
ELECTRONICS - SEMICONDUCTOR/COMPONENT 1.0%
Intel Corporation 110,000 8,889,375
FINANCE - MISCELLANEOUS 1.1%
American Express Company 95,000 9,690,000
HEALTHCARE - DRUG/DIVERSIFIED 9.3%
Abbott Laboratories 80,000 5,850,000
American Home Products Corporation 25,000 2,328,125
Bristol-Myers Squibb Company 110,000 11,646,250
Johnson & Johnson 60,000 4,282,500
Eli Lilly & Company 64,900 4,514,606
Merck & Company, Inc. 105,000 12,652,500
Pfizer, Inc. 240,000 27,315,000
Schering-Plough Corporation 140,000 11,217,500
Warner-Lambert Company 23,000 4,351,313
-----------
84,157,794
HEALTHCARE - INSTRUMENTATION 0.9%
Medtronic, Inc. 160,000 8,420,000
HEALTHCARE - MEDICAL SUPPLY 2.2%
Cardinal Health, Inc. 80,000 7,700,000
McKesson Corporation 175,000 12,370,312
-----------
20,070,312
HEALTHCARE - PATIENT CARE 0.7%
United Healthcare Corporation 70,000 4,917,500
WellPoint Health Networks, Inc. (b) 20,000 1,442,500
-----------
6,360,000
HOUSEHOLD APPLIANCES & FURNISHINGS 0.8%
Maytag Corporation 150,000 7,725,000
HOUSING RELATED 0.1%
Owens Corning 16,300 677,469
INSURANCE - DIVERSIFIED 1.3%
Travelers Group, Inc. 190,000 11,625,625
INSURANCE - PROPERTY & CASUALTY 2.2%
American International Group, Inc. 55,000 7,235,937
EXEL, Ltd. 60,000 4,481,250
MGIC Investment Corporation 125,000 7,875,000
-----------
19,592,187
LEISURE SERVICE 1.2%
The Walt Disney Company 85,000 10,566,563
MEDIA - PUBLISHING 2.8%
Gannett Company, Inc. 90,000 6,114,375
News Corporation, Ltd. Sponsored ADR 125,000 3,414,062
Time Warner, Inc. 200,000 15,700,000
-----------
25,228,437
MEDIA - RADIO/TV 1.4%
CBS Corporation 150,000 5,343,750
Cox Communications, Inc. Class A (b) 80,000 3,570,000
Viacom International, Inc. 70,000 4,060,000
-----------
12,973,750
METALS & MINING 0.4%
Alcan Aluminum, Ltd. 25,000 812,500
Inco, Ltd. 50,000 878,125
Phelps Dodge Corporation 25,000 1,678,125
-----------
3,368,750
27
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
===============================================================================
STRONG TOTAL RETURN FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
MORTGAGE & RELATED SERVICE 1.2%
Federal Home Loan Mortgage Corporation 90,000 $ 4,168,125
Federal National Mortgage Association 120,000 7,185,000
------------
11,353,125
NATURAL GAS DISTRIBUTION 0.9%
Enron Corporation 30,000 1,475,625
The Williams Companies, Inc. 200,000 6,325,000
------------
7,800,625
OFFICE AUTOMATION 1.7%
Xerox Corporation 135,000 15,322,500
OIL - INTERNATIONAL INTEGRATED 5.1%
British Petroleum PLC ADR 10,000 945,000
Chevron Corporation 105,000 8,682,188
Exxon Corporation 180,000 13,128,750
Mobil Corporation 110,000 8,690,000
Royal Dutch Petroleum Company-New York
Registry Shares 175,000 9,898,437
Texaco, Inc. 80,000 4,920,000
------------
46,264,375
OIL WELL EQUIPMENT & SERVICE 1.4%
Cooper Cameron Corporation (b) 40,000 2,657,500
Halliburton Company 85,000 4,675,000
Schlumberger, Ltd. 40,000 3,315,000
Smith International, Inc. (b) 40,000 2,350,000
------------
12,997,500
PAPER & FOREST PRODUCTS 1.4%
Fort James Corporation 130,000 6,451,250
Kimberly-Clark Corporation 45,000 2,283,750
The Mead Corporation 60,000 2,077,500
Weyerhaeuser Company 40,000 2,305,000
------------
13,117,500
PERSONAL & COMMERCIAL LENDING 1.4%
Associates First Capital Corporation 79,656 5,954,286
Beneficial Corporation 20,000 2,607,500
Household International, Inc. 30,000 3,943,125
------------
12,504,911
POLLUTION CONTROL 0.3%
USA Waste Services, Inc. (b) 60,000 2,943,750
REAL ESTATE 1.0%
LASER Mortgage Management, Inc. 272,500 4,087,500
Patriot American Hospitality, Inc. 110,000 2,777,500
Starwood Hotels & Resorts 40,000 2,007,500
------------
8,872,500
RETAIL - DEPARTMENT STORE 2.2%
Kohl's Corporation (b) 490,000 20,243,125
RETAIL - DRUG STORE 2.1%
CVS Corporation 145,000 10,693,750
Walgreen Company 255,000 8,797,500
------------
19,491,250
RETAIL - FOOD CHAIN 1.6%
Safeway, Inc. (b) 380,000 14,535,000
RETAIL - MAJOR CHAIN 2.2%
Dayton Hudson Corporation 75,000 6,548,437
Kmart Corporation 50,000 871,875
Wal-Mart Stores, Inc. 240,000 12,135,000
------------
19,555,312
RETAIL - RESTAURANT 0.6%
McDonald's Corporation 85,000 5,259,375
RETAIL - SPECIALTY 2.2%
Cendant Corporation (b) 255,000 6,375,000
Gap, Inc. 100,000 5,143,750
The Home Depot, Inc. 75,000 5,221,875
Lowe's Companies, Inc. 40,000 2,797,500
------------
19,538,125
SAVINGS & LOAN 1.2%
TCF Financial Corporation 260,000 8,466,250
Washington Mutual, Inc. 40,000 2,802,500
------------
11,268,750
SOAP & CLEANING PREPARATION 1.4%
Clorox Company 10,000 838,750
The Procter & Gamble Company 140,000 11,506,250
------------
12,345,000
TELECOMMUNICATION EQUIPMENT 3.4%
Alcatel Alsthom Sponsored ADR 30,000 1,087,500
DSC Communications Corporation (b) 50,000 900,000
Lucent Technologies, Inc. 215,000 16,366,875
Tellabs, Inc. (b) 180,000 12,757,500
------------
31,111,875
TELECOMMUNICATION SERVICE 3.6%
AT&T Corporation 155,000 9,309,688
Bell Atlantic Corporation 70,000 6,549,375
MCI Communications Corporation 50,000 2,515,625
Sprint Corporation 110,000 7,514,375
WorldCom, Inc. (b) 160,000 6,845,000
------------
32,734,063
TELEPHONE 1.6%
Ameritech Corporation 120,000 5,107,500
BellSouth Corporation 115,000 7,381,563
SBC Communications, Inc. 50,000 2,071,875
------------
14,560,938
- ------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $679,462,272) 830,623,923
- ------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS 3.9%
Automatic Common Exchange Securities
Trust II 6.50% 50,000 1,300,000
Chancellor Media Corporation 6.00% (Acquired
6/11/97; Cost $3,000,000) (d) 60,000 5,880,000
Houston Industries, Inc. 7.00% Automatic Common
Exchange Securities 150,000 10,406,250
IXC Communications, Inc. 6.75% (Acquired 3/25/98;
Cost $750,000) (d) 15,000 742,500
McKesson Financing Trust 5.00% (Acquired 2/13/97;
Cost $2,500,000) (d) 50,000 4,893,750
Merrill Lynch & Company, Inc. 6.00% 125,000 4,671,875
Snyder Trust Structured Yield Product
(Exchangeable for Snyder Communications, Inc.
Common Stock), 6.50%, Due 11/15/00 125,000 4,812,500
Worldcom, Inc. 8.00% 20,000 2,963,750
- ------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS (COST $25,351,380) 35,670,625
- ------------------------------------------------------------------------------
CONVERTIBLE BONDS 2.1%
The Home Depot, Inc. Subordinated Notes, 3.25%,
Due 10/01/01 $2,000,000 3,120,000
Metamor Worldwide, Inc. Subordinated Notes,
2.94%, Due 8/15/04 3,950,000 4,137,625
Network Associates, Inc. Subordinated Debentures,
Zero %, Due 2/13/18 (Acquired 2/10/98;
Cost $2,932,950) (d) 7,500,000 3,496,875
Rite Aid Corporation Subordinated Notes, 5.25%,
Due 9/15/02 (Acquired 10/29/97; Cost $2,122,500)(d) 2,000,000 2,260,000
28
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
STRONG TOTAL RETURN FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
Staples, Inc. Subordinated Debentures, 4.50%,
Due 10/01/00 (Acquired 9/12/95 - 10/07/97;
Cost $3,814,375) (d) $ 3,500,000 $ 5,928,125
- ------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS (COST $14,579,752) 18,942,625
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 2.0%
COMMERCIAL PAPER 0.3%
INTEREST BEARING, DUE UPON DEMAND
American Family Financial Services, Inc., 5.24% 667,900 667,900
General Mills, Inc., 5.26% 96,000 96,000
Johnson Controls, Inc., 5.26% 1,301,800 1,301,800
Pitney Bowes Credit Corporation, 5.26% 466,600 466,600
Sara Lee Corporation, 5.26% 240,000 240,000
------------
2,772,300
REPURCHASE AGREEMENT 1.7%
Goldman, Sachs & Company (Dated 4/30/98), 5.45%,
Due 5/01/98 (Repurchase proceeds $14,902,256);
Collateralized by: $13,185,000 United States
Treasury Bonds, 7.25%, Due 5/16/16 (Market
Value $15,215,490) (e) 14,900,000 14,900,000
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS (COST $17,672,300) 17,672,300
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES (COST $737,065,704) 99.7% 902,909,473
Other Assets and Liabilities, Net 0.3% 2,649,088
- ------------------------------------------------------------------------------
NET ASSETS 100.0% $905,558,561
==============================================================================
LEGEND
- ----------------------------------------------------------------------------
(a) Short-term investments include any security which has a maturity of
less than one year.
(b) Non-income producing security.
(c) All or a portion of security pledged to cover margin requirements for
futures contracts.
(d) Restricted security.
(e) See Note 2(H) of notes to financial statements.
Percentages are stated as a percent of net assets.
See notes to financial statements.
29
<PAGE>
<TABLE>
STATEMENTS OF ASSETS AND LIABILITIES
- ----------------------------------------------------------------------------------------------------------------------------
April 30, 1998 (Unaudited)
(In Thousands, Except Per Share Amounts)
<CAPTION>
STRONG AMERICAN STRONG ASSET STRONG BLUE STRONG EQUITY
UTILITIES FUND ALLOCATION FUND CHIP 100 FUND INCOME FUND
--------------- --------------- ------------- -------------
ASSETS:
<S> <C> <C> <C> <C>
Investments in Securities, at Value (Cost of $160,269,
$252,852, $43,010 and $140,091, respectively) $202,663 $294,545 $45,661 $176,796
Receivable for Securities Sold 1,176 8,924 137 --
Receivable for Fund Shares Sold 41 -- -- 3
Dividends and Interest Receivable 833 1,354 32 208
Other Assets 15 86 13 45
-------- -------- ------- --------
Total Assets 204,728 304,909 45,843 177,052
LIABILITIES:
Payable for Securities Purchased 653 7,277 765 --
Payable for Fund Shares Redeemed 52 3 1 36
Accrued Operating Expenses and Other Liabilities 29 45 13 39
-------- -------- ------- --------
Total Liabilities 734 7,325 779 75
-------- -------- ------- --------
NET ASSETS $203,994 $297,584 $45,064 $176,977
======== ======== ======= ========
NET ASSETS CONSIST OF:
Capital Stock (par value and paid-in capital) $159,737 $246,763 $42,821 $137,036
Undistributed Net Investment Income 662 635 48 62
Undistributed Net Realized Gain (Loss) 1,201 8,472 (456) 3,174
Net Unrealized Appreciation 42,394 41,714 2,651 36,705
-------- -------- ------- --------
Net Assets $203,994 $297,584 $45,064 $176,977
======== ======== ======= ========
Capital Shares Outstanding (Unlimited Number Authorized) 13,157 13,675 3,593 10,034
NET ASSET VALUE PER SHARE $15.50 $21.76 $12.54 $17.64
====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
STRONG GROWTH AND STRONG LIMITED STRONG TOTAL
INCOME FUND RESOURCES FUND RETURN FUND
----------------- -------------- ------------
ASSETS:
<S> <C> <C> <C>
Investments in Securities, at Value
(Cost of $266,716, $6,364 and $737,065, respectively) $329,547 $6,459 $902,909
Receivable for Securities Sold 310 -- 7,010
Receivable for Fund Shares Sold 3 -- --
Dividends and Interest Receivable 294 -- 763
Other Assets 47 21 111
-------- ------ --------
Total Assets 330,201 6,480 910,793
LIABILITIES:
Payable for Securities Purchased 2,048 -- 5,134
Payable for Fund Shares Redeemed -- -- 20
Accrued Operating Expenses and Other Liabilities 45 14 80
-------- ------ --------
Total Liabilities 2,093 14 5,234
-------- ------ --------
NET ASSETS $328,108 $6,466 $905,559
======== ====== ========
NET ASSETS CONSIST OF:
Capital Stock (par value and paid-in capital) $259,544 $6,603 $733,104
Undistributed Net Investment Income (Loss) 140 (14) 149
Undistributed Net Realized Gain (Loss) 5,593 (218) 6,462
Net Unrealized Appreciation 62,831 95 165,844
-------- ------ --------
Net Assets $328,108 $6,466 $905,559
======== ====== ========
Capital Shares Outstanding (Unlimited Number Authorized) 17,662 667 30,822
NET ASSET VALUE PER SHARE $18.58 $9.70 $29.38
====== ===== ======
30
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------------
For the Six Months Ended April 30, 1998 (Unaudited)
(In Thousands)
<CAPTION>
STRONG STRONG STRONG STRONG STRONG STRONG STRONG
AMERICAN ASSET BLUE CHIP EQUITY GROWTH LIMITED TOTAL
UTILITIES ALLOCATION 100 INCOME AND INCOME RESOURCES RETURN
FUND FUND FUND FUND FUND FUND FUND
--------- ---------- --------- ------ ---------- --------- ------
INCOME:
<S> <C> <C> <C> <C> <C> <C> <C>
Dividends $ 2,842 $ 1,540 $ 98 $ 1,215 $ 1,749 $ 36 $ 5,813
Interest 268 3,298 25 204 77 6 1,080
------- ------- ------ ------- ------- ---- --------
Total Income 3,110 4,838 123 1,419 1,826 42 6,893
EXPENSES:
Investment Advisory Fees 689 1,125 59 614 1,056 28 3,372
Custodian Fees 11 7 21 7 11 2 28
Shareholder Servicing Costs 160 234 42 135 283 5 675
Professional Fees 7 12 34 5 7 8 18
Federal and State Registration Fees 28 19 66 19 27 21 20
Other 35 45 15 36 74 5 154
------- ------- ------ ------- ------- ---- --------
Total Expenses before Waivers and
Absorptions 930 1,442 237 816 1,458 69 4,267
Voluntary and Involuntary Expense Waivers
and Absorptions by Advisor -- -- (237) -- -- (13) --
------- ------- ------ ------- ------- ---- --------
Expenses, Net 930 1,442 -- 816 1,458 56 4,267
------- ------- ------ ------- ------- ---- --------
NET INVESTMENT INCOME (LOSS) 2,180 3,396 123 603 368 (14) 2,626
REALIZED AND UNREALIZED
GAIN (LOSS):
Net Realized Gain (Loss) on:
Investments 1,807 9,361 (425) 3,609 6,390 (218) 12,358
Futures Contracts, Options and Forward
Foreign Currency Contracts -- 189 -- -- -- -- (95)
------- ------- ------ ------- ------- ---- --------
Net Realized Gain (Loss) 1,807 9,550 (425) 3,609 6,390 (218) 12,263
Change in Unrealized Appreciation/
Depreciation on:
Investments 23,795 23,422 2,684 20,332 40,190 370 103,321
Futures Contracts, Options and Forward
Foreign Currency Contracts -- (39) -- -- -- -- --
------- ------- ------ ------- ------- ---- --------
Net Change in Unrealized
Appreciation/Depreciation 23,795 23,383 2,684 20,332 40,190 370 103,321
------- ------- ------ ------- ------- ---- --------
NET GAIN 25,602 32,933 2,259 23,941 46,580 152 115,584
------- ------- ------ ------- ------- ---- --------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $27,782 $36,329 $2,382 $24,544 $46,948 $138 $118,210
======= ======= ====== ======= ======= ==== ========
See notes to financial statements.
31
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------------
(In Thousands)
STRONG AMERICAN STRONG ASSET
UTILITIES FUND ALLOCATION FUND
----------------------------- -----------------------------
<CAPTION>
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCT. 31, 1997 APRIL 30, 1998 OCT. 31, 1997
---------------- ------------- ---------------- -------------
(UNAUDITED) (UNAUDITED)
OPERATIONS:
<S> <C> <C> <C> <C>
Net Investment Income $ 2,180 $ 3,898 $ 3,396 $ 8,891
Net Realized Gain 1,807 8,697 9,550 27,725
Net Change in Unrealized Appreciation/Depreciation 23,795 9,980 23,383 12,017
-------- -------- -------- --------
Increase in Net Assets Resulting from Operations 27,782 22,575 36,329 48,633
DISTRIBUTIONS:
From Net Investment Income (2,052) (3,740) (3,545) (8,891)
In Excess of Net Investment Income -- -- -- (1,239)
From Net Realized Gains (8,984) (6,816) (26,176) (19,794)
-------- -------- -------- --------
Total Distributions (11,036) (10,556) (29,721) (29,924)
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 110,514 65,936 17,893 30,437
Proceeds from Reinvestment of Distributions 10,518 9,984 28,603 28,934
Payment for Shares Redeemed (68,579) (75,630) (32,278) (64,492)
-------- -------- -------- --------
Increase (Decrease) in Net Assets from Capital Share Transactions 52,453 290 14,218 (5,121)
-------- -------- -------- --------
TOTAL INCREASE IN NET ASSETS 69,199 12,309 20,826 13,588
NET ASSETS:
Beginning of Period 134,795 122,486 276,758 263,170
-------- -------- -------- --------
End of Period $203,994 $134,795 $297,584 $276,758
======== ======== ======== ========
TRANSACTIONS IN SHARES OF THE FUND:
Sold 7,358 5,000 846 1,500
Issued in Reinvestment of Distributions 708 776 1,458 1,472
Redeemed (4,558) (5,817) (1,538) (3,143)
----- ----- ----- -----
Net Increase (Decrease) in Shares of the Fund 3,508 (41) 766 (171)
===== ===== ===== =====
</TABLE>
<TABLE>
STRONG BLUE STRONG EQUITY
CHIP 100 FUND INCOME FUND
------------------------------ ------------------------------
<CAPTION>
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCT. 31, 1997 APRIL 30, 1998 OCT. 31, 1997
---------------- ------------- ---------------- -------------
(UNAUDITED) (NOTE 1) (UNAUDITED)
OPERATIONS:
<S> <C> <C> <C> <C>
Net Investment Income $ 123 $ 6 $ 603 $ 786
Net Realized Gain (Loss) (425) (31) 3,609 5,862
Net Change in Unrealized Appreciation/Depreciation 2,684 (33) 20,332 14,009
------- ------ -------- --------
Increase (Decrease) in Net Assets Resulting from Operations 2,382 (58) 24,544 20,657
DISTRIBUTIONS:
From Net Investment Income (81) -- (614) (742)
From Net Realized Gains -- -- (6,052) --
------- ------ -------- --------
Total Distributions (81) -- (6,666) (742)
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 43,227 7,694 52,480 134,486
Proceeds from Reinvestment of Distributions 80 -- 6,366 709
Payment for Shares Redeemed (5,697) (2,483) (34,233) (49,347)
------- ------ -------- --------
Increase in Net Assets from Capital Share Transactions 37,610 5,211 24,613 85,848
------- ------ -------- --------
TOTAL INCREASE IN NET ASSETS 39,911 5,153 42,491 105,763
NET ASSETS:
Beginning of Period 5,153 -- 134,486 28,723
------- ------ -------- --------
End of Period $45,064 $5,153 $176,977 $134,486
======= ====== ======== ========
TRANSACTIONS IN SHARES OF THE FUND:
Sold 3,584 730 3,203 9,463
Issued in Reinvestment of Distributions 7 -- 410 48
Redeemed (495) (234) (2,072) (3,407)
----- --- ----- -----
Net Increase in Shares of the Fund 3,096 496 1,541 6,104
===== === ===== =====
32
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- ----------------------------------------------------------------------------------------------------------------------------
(In Thousands)
STRONG GROWTH STRONG LIMITED
AND INCOME FUND RESOURCES FUND
------------------------------ ------------------------------
<CAPTION>
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCT. 31, 1997 APRIL 30, 1998 OCT. 31, 1997
---------------- ------------- ---------------- -------------
(UNAUDITED) (UNAUDITED) (NOTE 1)
OPERATIONS:
<S> <C> <C> <C> <C>
Net Investment Income (Loss) $ 368 $ 675 ($ 14) $ --
Net Realized Gain (Loss) 6,390 9,170 (218) 3
Net Change in Unrealized Appreciation/Depreciation 40,190 21,494 370 (276)
-------- -------- ------ ------
Increase (Decrease) in Net Assets Resulting from Operations 46,948 31,339 138 (273)
DISTRIBUTIONS:
From Net Investment Income (285) (627) (1) --
From Net Realized Gains (9,938) (56) (2) --
-------- -------- ------ ------
Total Distributions (10,223) (683) (3) --
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 103,596 240,930 3,347 5,885
Proceeds from Reinvestment of Distributions 9,927 663 3 --
Payment for Shares Redeemed (49,140) (63,239) (2,364) (267)
-------- -------- ------ ------
Increase in Net Assets from Capital Share Transactions 64,383 178,354 986 5,618
-------- -------- ------ ------
TOTAL INCREASE IN NET ASSETS 101,108 209,010 1,121 5,345
NET ASSETS:
Beginning of Period 227,000 17,990 5,345 --
-------- -------- ------ ------
End of Period $328,108 $227,000 $6,466 $5,345
======== ======== ====== ======
TRANSACTIONS IN SHARES OF THE FUND:
Sold 6,025 16,654 359 590
Issued in Reinvestment of Distributions 622 44 -- --
Redeemed (2,868) (4,267) (255) (28)
----- ------ --- ---
Net Increase in Shares of the Fund 3,779 12,431 104 562
===== ====== === ===
</TABLE>
<TABLE>
STRONG TOTAL
RETURN FUND
-------------------------------
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCT. 31, 1997
---------------- -------------
(UNAUDITED)
OPERATIONS:
<S> <C> <C>
Net Investment Income $ 2,626 $ 4,704
Net Realized Gain 12,263 173,269
Net Change in Unrealized Appreciation/Depreciation 103,321 (12,034)
-------- --------
Increase in Net Assets Resulting from Operations 118,210 165,939
DISTRIBUTIONS:
From Net Investment Income (2,744) (4,704)
In Excess of Net Investment Income -- (4,072)
From Net Realized Gains (175,269) (111,146)
-------- --------
Total Distributions (178,013) (119,922)
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 90,404 199,390
Proceeds from Reinvestment of Distributions 173,322 117,046
Payment for Shares Redeemed (129,948) (291,089)
-------- --------
Increase in Net Assets from Capital Share Transactions 133,778 25,347
-------- --------
TOTAL INCREASE IN NET ASSETS 73,975 71,364
-------- --------
NET ASSETS:
Beginning of Period 831,584 760,220
-------- --------
End of Period $905,559 $831,584
======== ========
TRANSACTIONS IN SHARES OF THE FUND:
Sold 3,169 6,598
Issued in Reinvestment of Distributions 6,683 4,226
Redeemed (4,488) (9,605)
----- -----
Net Increase in Shares of the Fund 5,364 1,219
===== =====
33
See notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
April 30, 1998 (Unaudited)
1. ORGANIZATION
The accompanying financial statements represent the Strong Conservative
Equity Funds, which include the following diversified and non-diversified,
open-end management investment companies registered under the Investment
Company Act of 1940:
- Strong American Utilities Fund (a series of Strong Conservative Equity
Funds, Inc.)**
- Strong Asset Allocation Fund, Inc.*
- Strong Blue Chip 100 Fund (a series of Strong Conservative Equity Funds,
Inc.)*
- Strong Equity Income Fund (a series of Strong Conservative Equity Funds,
Inc.)*
- Strong Growth and Income Fund (a series of Strong Conservative Equity
Funds, Inc.)*
- Strong Limited Resources Fund (a series of Strong Conservative Equity
Funds, Inc.)*
- Strong Total Return Fund, Inc.*
* Diversified fund
** Non-diversified fund
The inception date for Strong Blue Chip 100 Fund is June 30, 1997. The
inception date for Strong Limited Resources Fund is September 30, 1997.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Funds in the preparation of their financial statements.
(A) Security Valuation -- Portfolio securities traded primarily on a
principal securities exchange are valued at the last reported sales
price or the mean of the latest bid and asked prices when no last sales
price is available. Securities traded over-the-counter are valued at
the mean of the latest bid and asked prices or the last reported sales
price. Debt securities not traded on a principal securities exchange
are valued through valuations obtained from a commercial pricing
service, otherwise sale or bid prices are used. Securities for which
market quotations are not readily available are valued at fair value as
determined in good faith under consistently applied procedures
established by and under the general supervision of the Board of
Directors. Securities which are purchased within 60 days of their
stated maturity are valued at amortized cost, which approximates current
value.
The Funds may own certain investment securities which are restricted as
to resale. These securities are valued after giving due consideration to
pertinent factors, including recent private sales, market conditions and
the issuer's financial performance. The Funds generally bear the costs,
if any, associated with the disposition of restricted securities.
Aggregate acquisition cost and fair value of these restricted securities
held at April 30, 1998 were as follows:
AGGREGATE AGGREGATE PERCENT OF
COST FAIR VALUE NET ASSETS LIQUID*
--------- ---------- ---------- -------
Strong Asset Allocation Fund $32,069,988 $31,410,500 10.6% 99.2%
Strong Total Return Fund 15,119,825 23,201,250 2.6% 100.0%
*Percentage is either Section 4(2) commercial paper or is eligible for
resale pursuant to Rule 144A under the Securities Act of 1933 and also
has been determined to be liquid by the Advisor based upon guidelines
established by the Fund's Board of Directors.
(B) Federal Income and Excise Taxes and Distributions to Shareholders -- It
is the Funds' policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to
distribute substantially all of their taxable income to their
shareholders in a manner which results in no tax cost to the Funds.
Therefore, no federal income or excise tax provision is required.
The character of distributions made during the year from net investment
income or net realized gains may differ from the characterization for
federal income tax purposes due to differences in the recognition of
income and expense items for financial statement and tax purposes.
Where appropriate, reclassifications between net asset accounts are made
for such differences that are permanent in nature.
(C) Realized Gains and Losses on Investment Transactions -- Gains or losses
realized on investment transactions are determined by comparing the
identified cost of the security lot sold with the net sales proceeds.
(D) Futures -- Upon entering into a futures contract, the Funds pledge to
the broker cash or other investments equal to the minimum "initial
margin" requirements of the exchange. The Funds also receive from or
pay to the broker an amount of cash equal to the daily fluctuation in
the value of the contract. Such receipts or payments are known as
"variation margin," and are recorded as unrealized gains or losses.
When the futures contract is closed, a realized gain or loss is recorded
equal to the difference between the value of the contract at the time it
was opened and the value at the time it was closed.
34
<PAGE>
- -------------------------------------------------------------------------------
(E) Options -- The Funds may write put or call options (none were written
during the period). Premiums received by the Funds upon writing put or
call options are recorded as an asset with a corresponding liability
which is subsequently adjusted to the current market value of the
option. When an option expires, is exercised, or is closed, the Funds
realize a gain or loss, and the liability is eliminated. The Funds
continue to bear the risk of adverse movements in the price of the
underlying asset during the period of the option, although any potential
loss during the period would be reduced by the amount of the option
premium received.
(F) Foreign Currency Translation -- Investment securities and other assets
and liabilities initially expressed in foreign currencies are converted
to U.S. dollars based upon current exchange rates. Purchases and sales
of foreign investment securities and income are converted to U.S.
dollars based upon currency exchange rates prevailing on the respective
dates of such transactions. The effect of changes in foreign exchange
rates on realized and unrealized security gains or losses is reflected
as a component of such gains or losses.
(G) Forward Foreign Currency Exchange Contracts -- Forward foreign currency
exchange contracts are valued at the forward rate and are marked-to-
market daily. The change in market value is recorded as an unrealized
gain or loss. When the contract is closed, the Funds record an exchange
gain or loss equal to the difference between the value of the contract
at the time it was opened and the value at the time it was closed.
(H) Repurchase Agreements -- The Funds may enter into repurchase agreements
with institutions that the Funds' investment advisor, Strong Capital
Management, Inc. ("the Advisor") has determined are creditworthy
pursuant to criteria adopted by the Board of Directors. Each repurchase
agreement is recorded at cost. The Funds require that the collateral,
represented by securities (primarily U.S. Government securities),
purchased in a repurchase transaction be maintained in a segregated
account with a custodian in a manner sufficient to enable the Funds to
obtain those securities in the event of a default of the repurchase
agreement. On a daily basis, the Advisor monitors the value of the
collateral transferred under each repurchase agreement to ensure the
value of the collateral exceeds the amounts owed to the Funds under each
repurchase agreement by at least 2%.
(I) Additional Investment Risks -- The Funds may utilize derivative
instruments including options, futures and other instruments with
similar characteristics to the extent that they are consistent with the
Fund's investment objectives and limitations. The Funds intend to use
such derivative instruments primarily to hedge or protect from adverse
movements in securities prices or interest rates. The use of these
instruments may involve risks such as the possibility of illiquid
markets or imperfect correlation between the value of the instruments
and the underlying securities, or that the counterparty will fail to
perform its obligations.
Foreign denominated assets and forward currency contracts may involve
greater risks than domestic transactions, including currency, political
and economic, regulatory and market risks.
(J) Use of Estimates -- The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements, and the
reported amounts of increases and decreases in net assets from
operations during the reporting period. Actual results could differ
from those estimates.
(K) Other -- Investment security transactions are recorded as of the trade
date. Dividend income and distributions to shareholders are recorded on
the ex-dividend date. Interest income is recorded on the accrual basis
and includes amortization of premiums and discounts.
3. RELATED PARTY TRANSACTIONS
The Advisor, with whom certain officers and directors of the Funds are
affiliated, provides investment advisory services and shareholder
recordkeeping and related services to the Funds. Investment advisory fees,
which are established by terms of the Advisory Agreements, are based on the
following annualized rates of the average daily net assets: Strong American
Utilities Fund and Strong Blue Chip 100 Fund 0.75%, Strong Equity Income
Fund and Strong Growth and Income Fund 0.80%, Strong Asset Allocation Fund
and Strong Total Return Fund 0.85% of the first $35 million and 0.80%
thereafter, and Strong Limited Resources Fund 1.00%. Advisory fees are
subject to reimbursement by the Advisor if a Fund's operating expenses
exceed certain levels. Shareholder recordkeeping and related service fees
are based on contractually established rates for each open and closed
shareholder account. In addition, the Advisor is compensated for certain
other services related to costs incurred for reports to shareholders.
35
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------------------------------
April 30, 1998 (Unaudited)
W. H. Reaves & Co., Inc. ("Reaves") manages the investments of Strong
American Utilities Fund under an agreement with the Advisor. Reaves is
compensated by the Advisor (not the Fund) and bears all of its own expenses
in providing subadvisory services. In addition, Reaves directly effects
purchases and sales of securities for the Fund. In conjunction therewith,
brokerage commissions paid by the Fund for the six months ended April 30,
1998 totaled $194,832.
Scarborough Investment Advisors LLC ("Scarborough") manages the investments
of Strong Limited Resources Fund under an agreement with the Advisor.
Scarborough is compensated by the Advisor (not the Fund) and bears all of
its own expenses in providing subadvisory services.
The Funds may invest cash reserves in money market funds sponsored and
managed by the Advisor, subject to certain limitations. The terms of such
transactions are identical to those of non-related entities except that, to
avoid duplicate investment advisory fees, advisory fees of each Fund
invested in such money market funds are reduced by an amount equal to
advisory fees paid to the Advisor under its investment advisory agreements
with the money market funds.
Certain information regarding related party transactions, excluding the
effects of waivers and reimbursements, for the six months ended April 30,
1998 is as follows:
PAYABLE TO OTHER SHAREHOLDER
(RECEIVABLE FROM) SERVICING UNAFFILIATED
ADVISOR AT EXPENSES PAID DIRECTORS'
APRIL 30, 1998 TO ADVISOR FEES
----------------- ---------------- ------------
Strong American Utilities Fund $15,934 $ 1,638 $1,587
Strong Asset Allocation Fund 4,377 3,485 2,196
Strong Blue Chip 100 Fund 1,877 -- 775
Strong Equity Income Fund 26,779 1,740 1,104
Strong Growth and Income Fund 26,253 4,195 1,347
Strong Limited Resources Fund 6,035 30 375
Strong Total Return Fund (2,229) 19,121 4,954
4. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of long-term securities for the six months
ended April 30, 1998 were as follows:
<TABLE>
PURCHASES SALES
---------------------------- ----------------------------
<CAPTION>
U.S. GOVERNMENT U.S. GOVERNMENT
AND AGENCY OTHER AND AGENCY OTHER
--------------- ------------ --------------- ------------
<S> <C> <C> <C> <C>
Strong American Utilities Fund $ -- $ 91,852 $ -- $ 47,648
Strong Asset Allocation Fund 10,885,037 310,359,317 13,398,434 321,310,215
Strong Blue Chip 100 Fund -- 44,104 -- 6,588
Strong Equity Income Fund -- 113,992 -- 88,821
Strong Growth and Income Fund -- 280,207 -- 221,254
Strong Limited Resources Fund -- 2,684 -- 1,441
Strong Total Return Fund -- 1,064,887 -- 1,031,563
</TABLE>
5. INCOME TAX INFORMATION
The investment cost, gross unrealized appreciation and depreciation on
investments and capital loss carryovers (expiring in varying amounts through
2005) for federal income tax purposes were as follows:
<TABLE>
AT APRIL 30, 1998 AT OCTOBER 31, 1997
----------------------------------------------------- -------------------
<CAPTION>
FEDERAL TAX UNREALIZED UNREALIZED NET CAPITAL LOSS
COST APPRECIATION DEPRECIATION APPRECIATION CARRYOVERS
----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Strong American Utilities Fund $160,729,050 $ 42,416,846 $ 482,871 $ 41,933,975 $ --
Strong Asset Allocation Fund 253,109,236 43,948,818 2,513,090 41,435,728 --
Strong Blue Chip 100 Fund 43,046,996 3,327,989 714,135 2,613,854 12,561
Strong Equity Income Fund 140,217,478 37,563,622 984,602 36,579,020 --
Strong Growth and Income Fund 266,864,365 63,969,141 1,286,521 62,682,620 --
Strong Limited Resources Fund 6,364,221 428,383 333,983 94,400 --
Strong Total Return Fund 738,770,773 168,793,585 4,654,884 164,138,701 --
</TABLE>
36
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------------------------------------
STRONG AMERICAN UTILITIES FUND
- -------------------------------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA (a)
--------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
------------------------------------ ---------------------------------------------
<CAPTION>
Net Realized
Net Asset and Unrealized Total In Excess Net Asset
Value, Net Gains from From Net From Net of Net Value,
Beginning Investment (Losses) on Investment Investment Realized Realized Total End of
of Period Income Investments Operations Income Gains Gains Distributions Period
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
April 30, 1998(c) $13.97 $0.16 $2.29 $2.45 ($0.16) ($0.76) -- ($0.92) $15.50
Oct. 31, 1997 12.64 0.40 1.98 2.38 (0.38) (0.67) -- (1.05) 13.97
Oct. 31, 1996 11.73 0.40 0.90 1.30 (0.39) -- -- (0.39) 12.64
Oct. 31, 1995(d) 9.46 0.27 2.25 2.52 (0.25) -- -- (0.25) 11.73
Dec. 31, 1994 10.19 0.46 (0.73) (0.27) (0.46) -- -- (0.46) 9.46
Dec. 31, 1993(e) 10.00 0.18 0.27 0.45 (0.18) (0.05) ($0.03) (0.26) 10.19
</TABLE>
<TABLE>
RATIOS AND SUPPLEMENTAL DATA
-------------------------------------------------------------------------------------
<CAPTION>
Net Ratio of Expenses Ratio of Net
Assets, Ratio of to Average Net Investment Average
End of Expenses Assets Without Income Portfolio Commission
Total Period (In to Average Waivers and to Average Turnover Rate
Return Millions) Net Assets Absorptions Net Assets Rate Paid(b)
<S> <C> <C> <C> <C> <C> <C> <C>
April 30, 1998(c) +17.9% $204 1.0%* 1.0%* 2.4%* 27.3% $0.0597
Oct. 31, 1997 +19.7% 135 1.1% 1.1% 3.0% 61.9% 0.0598
Oct. 31, 1996 +11.2% 122 1.2% 1.2% 3.2% 84.0% 0.0599
Oct. 31, 1995(d) +26.9% 92 1.2%* 1.2%* 3.4%* 56.4%
Dec. 31, 1994 -2.6% 38 0.5% 1.6% 4.8% 105.4%
Dec. 31, 1993(e) +4.5% 32 0.0% 1.4%* 5.6%* 89.3%
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund outstanding for the entire period.
(b) Disclosure required, effective for reporting periods beginning after September 1, 1995.
(c) For the six months ended April 30, 1998 (Unaudited). Total return and portfolio turnover rate are not annualized.
(d) In 1995, the Fund changed its fiscal year end from December to October. Total return and portfolio turnover rate
are not annualized.
(e) Inception date is July 1, 1993. Total return and portfolio turnover rate are not annualized.
</TABLE>
<TABLE>
STRONG ASSET ALLOCATION FUND
- ---------------------------------------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA(a)
---------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
----------------------------------- ------------------------------------------------------
<CAPTION>
Net Realized
Net Asset and Unrealized Total In Excess In Excess Net Asset
Value, Net Gains from From Net of Net From Net of Net Value,
Beginning Investment (Losses) on Investment Investment Investment Realized Realized Total End of
of Period Income Investments Operations Income Income Gains Gains Distributions Period
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
April 30, 1998(c) $21.44 $0.26 $2.39 $2.65 ($0.27) -- ($2.06) -- ($2.33) $21.76
Oct. 31, 1997 20.12 0.67 2.96 3.63 (0.67) ($0.10) (1.54) -- (2.31) 21.44
Oct. 31, 1996 20.31 0.78 1.05 1.83 (0.84) -- (1.18) -- (2.02) 20.12
Oct. 31, 1995(d) 17.91 0.66 2.32 2.98 (0.58) -- -- -- (0.58) 20.31
Dec. 31, 1994 19.06 0.70 (0.99) (0.29) (0.70) -- -- ($0.16) (0.86) 17.91
Dec. 31, 1993 18.49 0.82 1.81 2.63 (0.82) -- (1.24) -- (2.06) 19.06
Dec. 31, 1992 19.68 0.87 (0.25) 0.62 (0.87) -- (0.94) -- (1.81) 18.49
</TABLE>
<TABLE>
RATIOS AND SUPPLEMENTAL DATA
------------------------------------------------------------------
Net Ratio of Net
Assets, Ratio of Investment Average
End of Expenses Income Portfolio Commission
Total Period (In to Average to Average Turnover Rate
Return Millions) Net Assets Net Assets Rate Paid(b)
<S> <C> <C> <C> <C> <C> <C>
April 30, 1998(c) +13.6% $298 1.0%* 2.4%* 117.7% $0.0696
Oct. 31, 1997 +19.3% 277 1.1% 3.2% 276.5% 0.0443
Oct. 31, 1996 +9.5% 263 1.1% 3.9% 446.7% 0.0469
Oct. 31, 1995(d) +16.8% 261 1.2%* 4.1%* 326.8%
Dec. 31, 1994 -1.5% 249 1.2% 3.8% 359.7%
Dec. 31, 1993 +14.5% 254 1.2% 4.2% 348.3%
Dec. 31, 1992 +3.2% 208 1.2% 4.4% 320.4%
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund outstanding for the entire period.
(b) Disclosure required, effective for reporting periods beginning after September 1, 1995.
(c) For the six months ended April 30, 1998 (Unaudited). Total return and portfolio turnover rate are not annualized.
(d) In 1995, the Fund changed its fiscal year end from December to October. Total return and portfolio turnover rate are not
annualized.
</TABLE>
<TABLE>
STRONG BLUE CHIP 100 FUND
- ----------------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA(a)
---------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
-------------------------------------- -------------------------
<CAPTION>
Net Asset Net Realized Total Net Asset
Value, Net and Unrealized from From Net Value,
Beginning Investment Gains on Investment Investment Total End of
of Period Income Investments Operations Income Distributions Period
<S> <C> <C> <C> <C> <C> <C> <C>
April 30, 1998(b) $10.39 $0.07 $2.14 $2.21 ($0.06) ($0.06) $12.54
Oct. 31, 1997(c) 10.00 0.01 0.38 0.39 -- -- 10.39
</TABLE>
<TABLE>
RATIOS AND SUPPLEMENTAL DATA
-------------------------------------------------------------------------------------
<CAPTION>
Net Ratio of Expenses Ratio of Net
Assets, Ratio of to Average Net Investment Average
End of Expenses Assets Without Income Portfolio Commission
Total Period (In to Average Waivers and to Average Turnover Rate
Return Millions) Net Assets Absorptions Net Assets Rate Paid
<S> <C> <C> <C> <C> <C> <C> <C>
April 30, 1998(b) +21.3% $45 0.0% 1.8%* 0.9%* 39.4% $0.0204
Oct. 31, 1997(c) +3.9% 5 1.0%* 2.0%* 0.6%* 21.5% 0.0209
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund outstanding for the entire period.
(b) For the six months ended April 30, 1998 (Unaudited). Total return and portfolio turnover rate are not annualized.
(c) Inception date is June 30, 1997. Total return and portfolio turnover rate are not annualized.
37
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- -------------------------------------------------------------------------------------------------------------------------
STRONG EQUITY INCOME FUND
- -------------------------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA (a)
------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
------------------------------------- -----------------------------------
<CAPTION>
Net Asset Net Realized Total Net Asset
Value, Net and Unrealized from From Net From Net Value,
Beginning Investment Gains on Investment Investment Realized Total End of
of Period Income Investments Operations Income Gains Distributions Period
<S> <C> <C> <C> <C> <C> <C> <C> <C>
April 30, 1998(b) $15.84 $0.06 $2.50 $2.56 ($0.07) ($0.69) ($0.76) $17.64
Oct. 31, 1997 12.03 0.13 3.81 3.94 (0.13) -- (0.13) 15.84
Oct. 31, 1996(c) 10.00 0.12 2.02 2.14 (0.11) -- (0.11) 12.03
</TABLE>
<TABLE>
RATIOS AND SUPPLEMENTAL DATA
------------------------------------------------------------------
<CAPTION>
Net Ratio of Net
Assets, Ratio of Investment Average
End of Expenses Income Portfolio Commission
Total Period (In to Average to Average Turnover Rate
Return Millions) Net Assets Net Assets Rate Paid
<S> <C> <C> <C> <C> <C> <C>
April 30, 1998(b) +16.8% $177 1.1%* 0.8%* 58.9% $0.0694
Oct. 31, 1997 +32.9% 134 1.1% 0.9% 152.6% 0.0689
Oct. 31, 1996(c) +21.5% 29 1.3%* 1.6%* 158.3% 0.0633
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund outstanding for the entire period.
(b) For the six months ended April 30, 1998 (Unaudited). Total return and portfolio turnover rate are not annualized.
(c) Inception date is December 29, 1995. Total return and portfolio turnover rate are not annualized.
</TABLE>
<TABLE>
STRONG GROWTH AND INCOME FUND
- -----------------------------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA (a)
-----------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
------------------------------------- -----------------------------------
<CAPTION>
Net Asset Net Realized Total Net Asset
Value, Net and Unrealized from From Net From Net Value,
Beginning Investment Gains on Investment Investment Realized Total End of
of Period Income Investments Operations Income Gains Distributions Period
<S> <C> <C> <C> <C> <C> <C> <C> <C>
April 30, 1998(b) $16.35 $0.02 $2.92 $2.94 ($0.02) ($0.69) ($0.71) $18.58
Oct. 31, 1997 12.38 0.07 3.99 4.06 (0.07) (0.02) (0.09) 16.35
Oct. 31, 1996(c) 10.00 0.04 2.38 2.42 (0.04) -- (0.04) 12.38
</TABLE>
<TABLE>
RATIOS AND SUPPLEMENTAL DATA
------------------------------------------------------------------
<CAPTION>
Net Ratio of Net
Assets, Ratio of Investment Average
End of Expenses Income Portfolio Commission
Total Period (In to Average to Average Turnover Rate
Return Millions) Net Assets Net Assets Rate Paid
<S> <C> <C> <C> <C> <C> <C>
April 30, 1998(b) +18.7% $328 1.1%* 0.3%* 82.7% $0.0694
Oct. 31, 1997 +32.9% 227 1.2% 0.5% 237.8% 0.0687
Oct. 31, 1996(c) +24.2% 18 1.9%* 0.6%* 174.1% 0.0667
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund outstanding for the entire period.
(b) For the six months ended April 30, 1998 (Unaudited). Total return and portfolio turnover rate are not annualized.
(c) Inception date is December 29, 1995. Total return and portfolio turnover rate are not annualized.
</TABLE>
<TABLE>
STRONG LIMITED RESOURCES FUND
- ------------------------------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA(a)
---------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
-------------------------------------- -------------------------
<CAPTION>
Net Realized
Net Asset and Unrealized Total Net Asset
Value, Net Gains from From Net Value,
Beginning Investment (Losses) on Investment Investment Total End of
of Period Income Investments Operations Income Distributions Period
<S> <C> <C> <C> <C> <C> <C> <C>
April 30, 1998(b) $ 9.51 ($0.02) $0.21 $0.19 -- -- $9.70
Oct. 31, 1997(c) 10.00 -- (0.49) (0.49) -- -- 9.51
</TABLE>
<TABLE>
RATIOS AND SUPPLEMENTAL DATA
------------------------------------------------------------------
<CAPTION>
Net Ratio of Net
Assets, Ratio of Investment Average
End of Expenses Income Portfolio Commission
Total Period (In to Average to Average Turnover Rate
Return Millions) Net Assets Net Assets Rate Paid
<S> <C> <C> <C> <C> <C> <C>
April 30, 1998(b) +2.1% $6 1.7%* -0.4%* 26.8% $0.0597
Oct. 31, 1997(c) -4.9% 5 2.0%* 0.0%*(d) 1.2% 0.0586
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund outstanding for the entire period.
(b) For the six months ended April 30, 1998 (Unaudited). Total return and portfolio turnover rate are not annualized.
(c) Inception date is September 30, 1997. Total return and portfolio turnover rate are not annualized.
(d) Amount calculated is less than $0.01 or 0.1%.
</TABLE>
38
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------------------------------------------------------------
STRONG TOTAL RETURN FUND
- ---------------------------------------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA(a)
---------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
----------------------------------- ------------------------------------------------------
<CAPTION>
Net Realized
Net Asset and Unrealized Total In Excess In Excess Net Asset
Value, Net Gains from From Net of Net From Net of Net Value,
Beginning Investment (Losses) on Investment Investment Investment Realized Realized Total End of
of Period Income Investments Operations Income Income Gains Gains Distributions Period
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
April 30, 1998(c) $32.66 $0.10 $3.71 $3.81 ($0.10) -- ($6.99) -- ($7.09) $29.38
Oct. 31, 1997 31.36 0.19 6.21 6.40 (0.19) ($0.17) (4.74) -- (5.10) 32.66
Oct. 31, 1996 28.02 0.24 4.65 4.89 (0.24) (0.06) (1.25) -- (1.55) 31.36
Oct. 31, 1995(d) 23.62 0.26 4.41 4.67 (0.26) (0.01) -- -- (0.27) 28.02
Dec. 31, 1994 24.30 0.25 (0.59) (0.34) (0.26) (0.08) -- -- (0.34) 23.62
Dec. 31, 1993 20.17 0.33 4.18 4.51 (0.33) -- -- ($0.05) (0.38) 24.30
Dec. 31, 1992 20.24 0.18 (0.08) 0.10 (0.17) -- -- -- (0.17) 20.17
</TABLE>
<TABLE>
RATIOS AND SUPPLEMENTAL DATA
------------------------------------------------------------------
Net Ratio of Net
Assets, Ratio of Investment Average
End of Expenses Income Portfolio Commission
Total Period (In to Average to Average Turnover Rate
Return Millions) Net Assets Net Assets Rate Paid(b)
<S> <C> <C> <C> <C> <C> <C>
April 30, 1998(c) +14.6% $906 1.0%* 0.6%* 126.0% $0.0695
Oct. 31, 1997 +23.4% 832 1.1% 0.6% 404.6% 0.0696
Oct. 31, 1996 +18.0% 760 1.1% 0.8% 502.4% 0.0584
Oct. 31, 1995(d) +19.8% 671 1.1%* 1.2%* 298.8%
Dec. 31, 1994 -1.4% 607 1.2% 1.1% 290.4%
Dec. 31, 1993 +22.5% 630 1.2% 1.4% 271.3%
Dec. 31, 1992 +0.6% 588 1.3% 0.9% 371.8%
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund outstanding for the entire period.
(b) Disclosure required, effective for reporting periods beginning after September 1, 1995.
(c) For the six months ended April 30, 1998 (Unaudited). Total return and portfolio turnover rate are not annualized.
(d) In 1995, the Fund changed its fiscal year end from December to October. Total return and portfolio turnover rate are
not annualized.
39
</TABLE>
<PAGE>
NOTES
- -------------------------------------------------------------------------------
40
<PAGE>
DIRECTORS
Richard S. Strong
Willie D. Davis
Stanley Kritzik
Marvin E. Nevins
William F. Vogt
OFFICERS
Richard S. Strong, Chairman of the Board
Mary F. Hoppa, Vice President
Thomas P. Lemke, Vice President
John S. Weitzer, Vice President
Stephen J. Shenkenberg, Vice President and Secretary
John A. Flanagan, Treasurer
INVESTMENT ADVISOR
Strong Capital Management, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
DISTRIBUTOR
Strong Funds Distributors, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
CUSTODIAN
Firstar Trust Company
P.O. Box 701, Milwaukee, Wisconsin 53201
TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT
Strong Capital Management, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
AUDITOR
Coopers & Lybrand L.L.P.
411 East Wisconsin Avenue, Milwaukee, Wisconsin 53202
LEGAL COUNSEL
Godfrey & Kahn, S.C.
780 North Water Street, Milwaukee, Wisconsin 53202
<PAGE>
For a prospectus containing more complete information, including management
fees and expenses, please call 1-800-368-1030. Please read it carefully before
investing or sending money. This report does not constitute an offer for the
sale of securities. Strong Funds are offered for sale by prospectus only.
[PICTURE OF TELEPHONE]
To order a free prospectus kit,
CALL 1-800-368-1030
To learn more about our funds,
discuss an existing account,
or conduct a transaction,
CALL 1-800-368-3863
-------------------
If you are a
Financial Professional,
CALL 1-800-368-1683
[PICTURE OF STRONG WEB SITE ON COMPUTER]
Strong On-line
www.strong-funds.com
[STRONG LOGO]
STRONG FUNDS
P.O. Box 2936 o Milwaukee, Wisconsin 53201
Strong Funds Distributors, Inc. 7769E98 98SCEQ
