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THE STRONG
GROWTH
Funds
SEMI-ANNUAL REPORT o JUNE 30, 1996
[PHOTO OF FAMILY]
[pie chart]
[bar graph]
THE STRONG VALUE FUND
THE STRONG OPPORTUNITY FUND
THE STRONG GROWTH FUND
THE STRONG COMMON STOCK FUND
THE STRONG SMALL CAP FUND
THE STRONG DISCOVERY FUND
[STRONG FUNDS LOGO]
STRONG FUNDS
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NEW PORTFOLIO MANAGERS FOR TWO STRONG GROWTH FUNDS
STRONG SMALL CAP FUND
Strong Funds is pleased to announce that Mary Lisanti was named portfolio
manager of the Strong Small Cap Fund, effective August 31, 1996.
Ms. Lisanti, 39, has been a managing director at Bankers Trust in New York,
where she was head of the small/mid-cap equity team and portfolio manager of the
BT Small Cap and Capital Appreciation Funds. At Bankers Trust, she led a team
responsible for managing over $2 billion in assets.
Ms. Lisanti has more than 18 years of experience investing in small and
medium-sized companies, both as an analyst and as a portfolio manager. She
applies a disciplined approach to small- and mid-cap stock investing, which
includes a thematic process to identify broad, long-term trends in society, and
rigorous fundamental analysis to find the companies that she believes will
ultimately benefit from these trends.
STRONG DISCOVERY FUND
Ms. Lisanti replaced Charles Paquelet, who was named portfolio co-manager of the
Strong Discovery Fund, also effective August 31. A securities analyst with
Strong Funds since 1988, Mr. Paquelet also managed the Strong Small Cap Fund
since its inception in December of 1995. He joins Richard S. Strong as portfolio
co-manager of the Strong Discovery Fund.
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THE STRONG
GROWTH
Funds
SEMI-ANNUAL REPORT o JUNE 30, 1996
Table of Contents
INVESTMENT REVIEWS
The Strong Value Fund..........................................2
The Strong Opportunity Fund....................................4
The Strong Growth Fund.........................................6
The Strong Common Stock Fund...................................8
The Strong Small Cap Fund.....................................10
The Strong Discovery Fund.....................................12
FINANCIAL INFORMATION
Schedules of Investments in Securities
The Strong Value Fund....................................14
The Strong Opportunity Fund..............................15
The Strong Growth Fund...................................17
The Strong Common Stock Fund.............................19
The Strong Small Cap Fund................................22
The Strong Discovery Fund................................23
Statements of Operations......................................27
Statements of Assets and Liabilities..........................28
Statements of Changes in Net Assets...........................29
Notes to Financial Statements.................................30
FINANCIAL HIGHLIGHTS.................................................34
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The Strong VALUE Fund
================================================================================
OUR APPROACH TO VALUE INVESTING
As the Fund completes its first semiannual reporting period, we'd like to take
this opportunity to welcome all our new shareholders and to reiterate our
approach to value investing.
Our investment approach is to seek companies that represent value in relation to
their assets, earnings power, or cash- generating ability. In choosing
securities, we focus on catalysts--including management changes, corporate
restructurings, cyclical turnarounds, and secular trends--that we believe will
help draw out value in companies.
The portfolio is constructed through patient and disciplined investing in mid-
to large-capitalization companies, and we generally avoid technology stocks and
foreign securities because of the excess volatility in these sectors. Regardless
of market levels, we adhere to a discipline of selling stocks which have reached
the upper end of their valuations, and purchasing stocks at the low end of their
valuations.
Total Returns(1)
for the 6 month period ended 6-30-96
Strong Value Fund 10.73%
S & P 500 Stock Index* 10.10%
Russell 1000(R) Value Index* 7.48%
THE FUND DEBUTS WITH STRONG PERFORMANCE
The U.S. stock market continued its upward climb over the first half of the
year, although it pulled back somewhat in June. Heavy cash flows into mutual
funds, combined with a net reduction in equity supply through mergers,
acquisitions, and stock buybacks, helped to support stocks.
The Strong Value Fund participated fully in this market and posted a total
return of 10.73% for the six-month period ended June 30.(1) Value stocks in
general, as measured by the Russell 1000(R) Value Index, gained 7.48% over the
six months ended 6-30-96, while the S&P 500, a measure of the broader market,
gained 10.10%.*
Cash flows into the Fund have been steady. Assets under management grew to over
$33 million at the end of June.
SEVERAL FACTORS CONTRIBUTED TO THE FUND'S GOOD PERFORMANCE
Restructuring, one of the major catalysts we have identified, is an important
theme in the Fund. Several companies undergoing restructuring were among the
Fund's top performers during this reporting period, and we expect positive
developments in others. Several will be spinning off divisions or moving ahead
with merger plans in the third quarter. We expect restructuring to continue as a
major theme in the Fund.
It is also evident that corporate America is speeding up its response to
competitive pressures, and that corporate downsizing will persist as companies
turn more and more to outsourcing certain business functions. We have added
several companies to the Fund to take advantage of this trend, and we believe
opportunities in this area will continue.
Our discipline of avoiding the technology sector was another factor benefiting
the Fund during this period, as technology stocks--which started the year
strong--retreated sharply later in the second quarter.
While the focus of the Fund is on mid- to large-capitalization companies, we
made opportunistic purchases of small companies during this period, which also
added value to the Fund.
FIVE LARGEST STOCK HOLDINGS
as of 6-30-96
% OF NET
SECURITY INDUSTRY CATALYST ASSETS
- --------------------------------------------------------------------------------
Federated Department Retail - Restructuring 2.7%
Stores, Inc. Department Store
................................................................................
AT&T Corporation Telecommunication Restructuring 2.7%
Service
................................................................................
Comsat Corporation Telecommunication Restructuring 2.7%
Service
................................................................................
FMC Corporation Chemical Restructuring 2.4%
................................................................................
Rite Aid Corporation Retail - Drug Store Secular Trend 2.4%
................................................................................
Please see the Schedule of Investments in Securities for a complete listing of
the Fund's portfolio.
2
<PAGE>
ASSET ALLOCATION
Based on net assets as of 6-30-96
Stocks 70.3%
Short-Term Investments 29.7%
OUR OUTLOOK IS CAUTIOUS
The economy has been a mixed bag through the first half of this year. Low
inflation created a good environment for stocks as the year began, but
stronger-than-expected growth in the economy, including higher-than-expected job
creation, rattled the bond market, which carried over into the stock market.
Stock price volatility, particularly in smaller companies, has been severe. The
corrective action in June is a positive step for equities, and we expect it to
continue as stocks react sharply to news--either good or bad. Volatility gives
us an opportunity to trim stocks that spike upward, and to buy securities that
have been hit hard. Regardless of market levels, we will continue to seek
companies that represent value in relation to companies' assets, earnings power,
or cash-generating ability.
We would like to take this opportunity to thank you for your investment in the
Fund.
Sincerely,
/s/Laura J. Sloate
Laura J. Sloate
Portfolio Manager
/s/ Jeffrey B. Cohen
Jeffrey B. Cohen
Portfolio Manager
[Photo of Laura J. Sloate & Jeffrey B. Cohen]
- --------------------------------------------------------------------------------
GROWTH OF AN ASSUMED $10,000 INVESTMENT TOTAL RETURN(1)
from 12-29-95 to 6-30-96 as of 6-30-96
The Strong S & P 500 Lipper Growth SINCE INCEPTION
Value Fund Stock Index* Fund Index* (on 12-29-95)
12-95 10,000 10,000 10,000
1-96 10,300 10,340 10,241 10.73%
2-96 10,550 10,436 10,402
3-96 10,869 10,536 10,450
4-96 11,139 10,692 10,712
5-96 11,159 10,967 10,905
6-96 11,073 11,010 10,799
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with similar investments in the
Standard & Poor's 500 Stock Index ("S&P 500") and the Lipper Growth Fund Index.
Results include the reinvestment of 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.
- --------------------------------------------------------------------------------
* The Russell 1000(R) Value Index is an unmanaged index that contains
securities from the Russell 1000(R) with a less-than-average growth
orientation. The S&P 500 Stock index is an unmanaged index generally
representative of the U.S. stock market. The Lipper Growth Fund Index is an
equally-weighted performance index, adjusted for capital gains
distributions and income dividends, of the largest qualifying funds in this
Lipper category. Source of the Russell index data and the S&P index data is
Micropal. Source of the Lipper index data is Lipper Analytical Services,
Inc.
1 Total return measures aggregate change in the value of an investment in the
Fund assuming reinvestment of dividend and capital gains.
3
<PAGE>
The Strong OPPORTUNITY Fund
================================================================================
In pursuit of capital growth, the Strong Opportunity Fund invests at least 70%
of its total assets in equity securities. It currently emphasizes medium-sized
companies that the Fund's advisor believes are under-researched and attractively
valued.
TOTAL RETURNS(1)
for the 6 month period ended 6-30-96
Strong Opportunity Fund 7.59%
S & P 500 Index* 10.10%
S & P MidCap 400 Stock Index* 9.21%
FIVE LARGEST STOCK HOLDINGS
as of 6-30-96
% OF NET
SECURITY INDUSTRY ASSETS
- --------------------------------------------------------------------------------
Thrifty Payless Holdings, Inc Retail - Drug Store 1.6%
Class B
................................................................................
Barrett Resources Corp. Oil-North American 1.5%
Exploration & Production
................................................................................
Intel Corporation Electronics- 1.5%
Semiconductor/Component
................................................................................
Halliburton Company Oil Well Equipment 1.4%
& Service
................................................................................
Apache Corporation Oil-North American 1.4%
Exploration & Production
................................................................................
Please see the Schedule of Investments in Securities for a complete listing of
the Fund's portfolio.
STOCKS CONTINUED TO CLIMB . . .
Despite a difficult June, the stock market turned in a good performance over the
first half of the year. The broad market, as measured by the S&P 500 Index,
gained 10.10% for the six months ended June 30, while the S&P MidCap 400 Stock
Index posted a slightly lower gain of 9.21%.* The Opportunity Fund posted a
total return of 7.59% for the same period.(1)
WHILE THE ECONOMY HEATED UP
A slow-growing economy early in the year prompted the Federal Reserve Board to
lower short-term interest rates in January, but the announcement of February's
unexpectedly large increase in jobs set the slow-growth scenario on its head.
Other signs of renewed growth followed--including price increases in several key
commodities--and prompted some economists to predict the return of higher
inflation. The Fed, however, declined subsequent opportunities to increase rates
further, and signs of renewed inflation have been elusive.
Given this scenario, we entered the second quarter with a slightly more
defensive portfolio. Consequently, the Fund did not realize the gains that many
higher priced growth stocks produced in April and May--when small- and mid-cap
stocks produced some very impressive gains. However, our defensive stance
protected the Fund from some of the sharp price declines experienced in June.
The Fund also benefited from an overweighted position in the energy sector, as
many oil service and oil and gas exploration and production companies performed
well during this period.
ASSET ALLOCATION
Based on net assets as of 6-30-96
Stocks 86.9%
Convertible Bonds 0.3%
Short-Term Investments 12.8%
This allocation does not reflect any options or futures positions held by the
Fund.
OUR INVESTMENT APPROACH REMAINED UNCHANGED
We believe that much of this market's increase has been momentum-driven,
stimulated by a surge of cash into mutual funds. Despite the momentum, we remain
committed to a consistent investment approach and will continue to evaluate
existing and prospective holdings by analyzing their "private value." That
simply means that we evaluate companies as if we were private
buyers--determining how much we would be willing to pay to own the entire
company. In doing so, we have a disciplined way to view the company's inherent
value and impartially evaluate potential winners and losers.
We look at underfollowed stocks--those with low institutional ownership and low
analyst coverage--because we believe they tend to be undervalued by the market.
We look at unpopular, or "quiet," sectors because we think that, in a market
increasingly dominated by institutions, unpopular sectors can yield superior
returns. And now, more than ever--given higher stock valuations--we believe it
is essential to thoroughly understand the dynamics of each individual stock.
4
<PAGE>
OUR OUTLOOK IS MIXED
We are somewhat cautious going into the second half of the year as the general
market appears to be fairly valued, and we don't expect to see stock valuations
rise across the board. We look for corporate profit margins to begin to shrink,
and believe that only the best management teams will be rewarded with higher
stock prices.
Consequently, the quality of management will be increasingly important to a
company's ability to perform well during the second half of the year. We intend
to focus on individual stock selection, and to place emphasis on underfollowed,
growing firms selling at significant discounts to their private- market values.
Thank you for your continued confidence,
/s/ Richard T. Weiss
Richard T. Weiss
Portfolio Manager
/s/ Marina T. Carlson
Marina T. Carlson
Portfolio Manager
[Photo of Richard T. Weiss & Marina T. Carlson]
- --------------------------------------------------------------------------------
GROWTH OF AN ASSUMED $10,000 INVESTMENT AVERAGE ANNUAL
from 12-31-85 to 6-30-96 TOTAL RETURNS(1)
as of 6-30-96
The Strong S & P 500 Lipper Growth
Opportunity Fund Stock Index* Fund Index* 1-YEAR
12-85 10,000 10,000 10,000 19.70%
12-86 15,990 11,620 11,558
12-87 17,893 11,383 11,935 5-YEAR
12-88 20,840 13,761 13,621 18.50%
12-89 24,694 18,649 17,364
12-90 21,903 17,692 16,423 10-YEAR
12-91 28,845 26,556 22,390 12.44%
12-92 33,850 29,719 24,099
12-93 41,022 33,866 26,986 SINCE INCEPTION
12-94 42,325 32,652 26,562 (on 12-31-85)
12-95 53,868 42,755 35,235 18.22%
6-96 57,958 46,695 38,050
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with similar investments in the
Standard & Poor's 500 Stock Index ("S&P 500") and the Lipper Growth Fund Index.
Results for both indices reflect 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.
- --------------------------------------------------------------------------------
* The S&P MidCap 400 Stock Index is an unmanaged index generally
representative of the market for the stocks of mid-sized U.S. companies.
The S&P 500 is an unmanaged index generally representative of the U.S.
stock market, without regard to company size. The Lipper Growth Fund Index
is an equally-weighted performance index adjusted for capital gains and
income dividends, of the largest qualifying funds in this Lipper category.
Source of the S&P index data is 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 GROWTH Fund
================================================================================
The Strong Growth Fund seeks capital growth. The Fund invests primarily in
equity securities that the Fund's Advisor believes have above-average growth
prospects.
CUMULATIVE
TOTAL RETURNS(1)
from the Fund's inception on 12-31-93 through 6-30-96
Strong Growth Fund 94.33%
S & P 500 Stock Index* 53.47%
Lipper Growth Fund Index* 41.00%
THE FUND'S STRONG PERFORMANCE CONTINUED
By sticking to the things we do best, we were able to outpace the market and our
competition during the volatile first six months of 1996. The Fund posted a
17.52%(1) gain, versus 10.10% for the S&P 500, and a 7.99% return for the Lipper
Growth Fund Index.*
In addition, the Fund was ranked #1 of the 436 growth funds tracked by Lipper
Analytical Services, Inc. based on total return since the Fund's inception on
December 31, 1993 through June 30, 1996. For the 1-year period ended June 30,
the Fund was ranked #15 of 619 funds.
A DECEPTIVELY SMOOTH MARKET
Although it isn't immediately apparent in the broad market averages, 1996 has
been a difficult year for equity managers so far. The S&P 500's 10.10% gain for
the period belied a market characterized by rotating corrections between
different areas: big stocks versus small stocks, growth stocks versus value
stocks, and mini-bear markets striking individual sectors.
This volatile market was created by a string of surprising economic reports.
Investors, who had been anticipating lower interest rates and a slumping
economy, suddenly found themselves faced with unexpectedly strong employment
reports, suggesting stronger economic growth. As a result, money managers were
forced to switch gears, leading to sell-offs in some parts of the market and
run-ups in others. Small company stocks and technology stocks were particularly
vulnerable in June after rallying earlier in the year.
While such markets can be painful for fund managers and investors alike, they
aren't all bad news; rolling corrections also create opportunities for managers
to sift through the stocks of quality companies that have been beaten down, and
pick out the ones that have become better bargains, which was our strategy.
LOOKING FOR GROWTH AT A GOOD PRICE
As growth stock managers, we look at companies that can consistently increase
earnings - quality companies with strong sales, a dominant market position, and
capable, visionary management. Obviously, these types of companies are in demand
by investors. Therefore, our primary approach to growth stock investing is to
buy the stocks of these companies when they are attractively priced. This
approach drove our buying and selling during the first six months of 1996.
Early in the year, small company stocks dipped and larger, blue-chip companies
surged as economic news suggested weakness. During this time, we continued to
buy mid- cap and small companies because we believed they had the best
fundamentals and valuations. After the big price moves experienced by these
stocks during the spring, our emphasis turned to owning larger, high-quality
companies which had, in turn, become attractively valued.
Meanwhile, our secular strategy remained unchanged. Many of our moves were
directed by the themes that we believe will remain in place for years to come:
health care providers poised to capitalize as our population ages... technology
firms that can help business become more competitive by enhancing
productivity...companies in consolidating industries with the resources to take
out the competition.
ASSET ALLOCATION
Based on net assets as of 6-30-96
Stocks 89.0%
Convertible Bonds 0.3%
Short-Term Investments 10.7%
6
<PAGE>
OUTLOOK: FAVORABLE WITH OCCASIONAL TURBULENCE
There's no question that the market is currently skittish and uncertain. But at
the risk of stating the obvious, stock investors must always have realistic
expectations and maintain a long-term perspective. Corrections are normal market
occurrences. The thing that's important for investors to remember is that the
long-term outlook is favorable. The economy is growing well enough to keep
corporate profits healthy, but not so much as to trigger significantly higher
interest rates or rampant inflation. And the Federal Reserve has demonstrated
over the past several years that it is determined to maintain this balance.
At the same time, well-run companies are operating with comparatively little
debt and with an eye toward staying competitive.
So, while we are somewhat cautious near-term, we are certainly not bearish. We
will look to buy good-quality companies when their prices are attractive, with
the goal being attractive long-term growth for our shareholders.
Thank you for investing in the Strong Growth Fund. We appreciate your
confidence, and we look forward to serving your investment needs in the years to
come.
Sincerely,
/s/ Ronald C. Ognar
Ronald C. Ognar
Portfolio Manager
[Photo of Ronald C. Ognar]
- --------------------------------------------------------------------------------
GROWTH OF AN ASSUMED $10,000 INVESTMENT AVERAGE ANNUAL
from 12-31-93 to 6-30-96 TOTAL RETURNS(1)
as of 6-30-96
The Strong S & P 500 Lipper Growth
Growth Fund Stock Index* Fund Index* 1-YEAR
12-93 10,000 10,000 10,000 38.91%
12-94 11,726 10,132 9,842
12-95 16,535 13,939 13,056 2-YEAR
6-96 19,433 15,347 14,100 35.17%
SINCE INCEPTION
(on 12-31-93)
30.44%
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 Fund Index.
Results for both indices 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.
- --------------------------------------------------------------------------------
* The S&P 500 is an unmanaged index generally representative of the U.S.
stock market. The Lipper Growth Fund Index is an equally-weighted
performance index of the largest qualifying funds in this Lipper category.
Source of the S&P index data is 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.
7
<PAGE>
The Strong COMMON STOCK Fund
================================================================================
The Strong Common Stock Fund seeks capital growth. The Fund invests at least 80%
of its total assets in equity securities. It currently emphasizes small
companies that the Fund's Advisor believes are under-researched and attractively
valued. The Fund remains closed to new investors, an action taken in March 1993
to limit its asset growth and allow it to continue focusing on small company
stocks.(1)
TOTAL RETURNS(2)
for the 6 month period ended 6-30-96
Strong Common Stock Fund 8.01%
Russell 2000(R) Index* 10.36%
S & P 500 Stock Index* 10.10%
ASSET ALLOCATION
Based on net assets as of 6-30-96
Stocks 90.7%
Convertible Bonds 0.1%
Short-Term Investments 9.2%
SMALL-CAP STOCKS HIGHER . . .
The stock market performed well over the first six months of the year, as
evidenced by the 10.10% total return in the broad-based S&P 500 Index.
Small-capitalization stocks-- which posted exceptional returns through May--gave
back some of their gains in June, but still posted a healthy gain of 10.36% for
the six months ended June 30, as measured by the Russell 2000(R) Index. *
We positioned the Fund slightly more defensively coming into the second quarter,
given the degree of indecision over the direction of the economy. Consequently
the Fund did not realize the kind of gains that many higher priced growth stocks
produced in April and May--when small- and mid-cap stocks produced some very
impressive results. However, our defensive stance protected the Fund from some
of the sharp price declines experienced in June. Over the six-month period, the
Common Stock Fund posted a total return of 8.01%.(2)
. . . DESPITE A SETBACK IN JUNE
The stock market was surprisingly buoyant during this period, despite the
economic indecisiveness. The year began with a general consensus of continued
slow economic growth, and the Federal Reserve Board cut short-term interest
rates in January. But the announcement of an unexpectedly high number of jobs
created in February called the slow-growth scenario into question and ignited
talk of renewed inflation.
The stock market took the prospect of higher inflation--generally a negative for
stocks--in stride, and continued its upward climb. However, in June all segments
of the market slowed considerably or reversed course. Small-cap stocks were hit
particularly hard, resulting in a loss of 4.11% for the month, as measured by
the Russell 2000(R) Index. We took a slightly more defensive posture in the Fund
earlier this year, and this proved valuable in June, as losses in the Fund were
held to 3.00% for the month.
Late in 1995 and earlier this year we added technology exposure to the Fund,
taking advantage of the significant correction in that sector. The retailing
group--which had been fairly depressed--also provided opportunities to add names
on a selective basis. In addition, the Fund benefited from an overweighting in
the energy sector, as many oil service and oil and gas exploration and
production companies performed well during this period.
FIVE LARGEST STOCK HOLDINGS
as of 6-30-96
% OF NET
SECURITY INDUSTRY ASSETS
- --------------------------------------------------------------------------------
Tempest Reinsurance Insurance - Diversified 1.5%
Company, Ltd.
................................................................................
Intel Corporation Electronics - 1.5%
Semiconductor/Component
................................................................................
Enron Oil & Gas Oil - North American 1.5%
Company Exploration & Production
................................................................................
Astra AB A Shares Healthcare - 1.4%
Drug/Diversified
................................................................................
Libbey, Inc. Household Appliance 1.4%
& Furnishings
................................................................................
Please see the Schedule of Investments in Securities for a complete listing of
the Fund's portfolio.
A CONSISTENT INVESTMENT PHILOSOPHY
We believe that we have been in a momentum-driven market, one that has been
stimulated by a surge of cash into mutual funds. Despite this momentum, we
remain committed to a consistent investment approach by continuing to evaluate
existing and prospective holdings through an analysis of their "private value."
That simply means that we evaluate companies as if we were private
buyers--determining how much we would be willing to pay to own the entire
company. In doing so, we have a disciplined way to view the company's inherent
value and impartially evaluate potential winners and losers.
8
<PAGE>
Another facet of our investment approach is to look at underfollowed
stocks--those with low institutional ownership and low analyst coverage--because
we believe they tend to be undervalued by the market. We look at unpopular, or
"quiet" sectors because we think that, in a market increasingly dominated by
institutions, unpopular sectors can yield superior returns.
THE OUTLOOK IS MIXED
Our outlook at this juncture is somewhat mixed. We believe that speculation in
the stock market has been high and that small-cap stocks are reasonably valued
relative to larger capitalization stocks. We anticipate corporate profit margins
will begin to shrink going into the second half of the year and, consequently,
finding value in the market will be highly dependent on individual stock
selection for the remainder of 1996.
On the positive side, we believe this is the kind of market in which discerning
stock-pickers can reap rewards. We will continue to focus on the quality of
management, because we believe superior management will be increasingly
important to a company's ability to perform well in the second half of the year,
and that only the best management teams will be rewarded with higher stock
prices.
Thank you for your continued confidence,
/s/ Richard T. Weiss
Richard T. Weiss
Portfolio Manager
/s/ Marina T. Carlson
Marina T. Carlson
Portfolio Manager
[Photo of Richard T. Weiss & Marina T. Carlson]
- --------------------------------------------------------------------------------
GROWTH OF AN ASSUMED $10,000 INVESTMENT AVERAGE ANNUAL
from 12-28-89 to 6-30-96 TOTAL RETURNS(2)
as of 6-30-96
The Strong S & P 500 Lipper Growth
Common Stock Fund Stock Index* Fund Index* 1-YEAR
12-89 10,000 10,000 10,000 22.06%
12-90 10,100 9,689 9,458
12-91 15,864 12,641 12,894 3-YEAR
12-92 19,160 13,604 13,879 17.03%
12-93 23,987 14,975 15,541
12-94 23,871 15,173 15,297 5-YEAR
12-95 31,609 20,875 20,292 21.51%
6-96 34,142 22,983 21,913
SINCE INCEPTION
(on 12-29-89)
20.79%
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with similar investments in the
Standard & Poor's 500 Stock Index ("S&P 500"), and the Lipper Growth Fund Index.
Results for both indices reflect the reinvestment of all dividends and capital
gains distributions. Performance is historical and does not represent future
results. Investment returns and principal value will vary, and you may have a
gain or loss when you sell Fund shares.
- --------------------------------------------------------------------------------
* The S&P 500 is an unmanaged index generally representative of the U.S.
stock market, without regard to company size. The Russell 2000(R) Index is
an unmanaged index generally representative of the U.S. market for small
domestic stocks. The Lipper Growth Fund Index is an equally weighted
performance index, adjusted for capital gains distributions and income
dividends, of the largest qualifying funds in this Lipper category. Source
of the S&P index data and the Russell index data is Micropal. Source of the
Lipper index data is Lipper Analytical Services, Inc.
1 The Common Stock Fund is closed to new investors, except that the Fund will
continue to offer shares to current investors and through qualified
retirement plans for which Strong Retirement Services provides
record-keeping and administrative services.
2 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 SMALL CAP Fund
================================================================================
The Strong Small Cap Fund seeks capital growth. The Fund invests primarily in
equity securities of companies that have small market capitalizations.
OFF TO A GOOD START
During a fairly erratic period for the stock market, the Small Cap Fund provided
investors with a total return of 24.69% in the six months since its inception on
December 29, 1995 through June 30.(1)
Part of the Fund's gain can be attributed to a strong rally staged by
small-capitalization stocks earlier this year. Although the rally reversed
course in the last few weeks of June, small-cap stocks--as measured by the
Russell 2000(R) Index--gained 10.36% during the period.* Individual stock
selection was another key factor in the Fund's strong investment performance,
and the main reason the Fund outperformed the market by such a wide margin.
TOTAL RETURNS(1)
for the 6 month period ended 6-30-96
Strong Small Cap Fund 24.69%
Russell 2000(R) Index* 10.36%
STOCK SELECTION AND DIVERSIFICATION ARE KEY
The Small Cap Fund invests in companies that satisfy three important criteria:
We look for well-managed companies that are in good businesses which trade at
attractive valuations. In the universe of smaller companies, where the market
tends to price securities less efficiently, we believe it is possible to find
stocks meeting all three criteria. By mid-year, the Fund held a diversified
portfolio of securities which we believe meet these standards.
Funds that invest primarily in small-capitalization stocks carry certain
inherent risks. Small-cap stocks tend to be those of less well-developed
companies, which are more dependent on single customers or markets, and often
have managers with shorter track records. To manage these risks, we rely
primarily on a broad diversification of investments. At mid-year, the Fund held
129 individual stocks spread across 44 industries.
ASSET ALLOCATION
Based on net assets as of 6-30-96
Stocks 89.6%
Short-Term Investments 10.4%
FIVE LARGEST STOCK HOLDINGS
as of 6-30-96
% OF NET
SECURITY INDUSTRY ASSETS
- --------------------------------------------------------------------------------
Nu - Kote Holding, Inc. Office Automation 3.4%
Class A
................................................................................
Cohr, Inc. Healthcare - 2.3%
Medical Supply
................................................................................
Halsey Drug Healthcare - 2.1%
Company, Inc. Drug/Diversified
................................................................................
Rainforest Cafe, Inc. Retail - Restaurant 2.0%
................................................................................
Boca Research, Inc. Computer - 1.8%
Peripheral Equipment
................................................................................
Please see the Schedule of Investments in Securities for a complete listing of
the Fund's portfolio.
10
<PAGE>
OUTLOOK FOR SMALL-CAP STOCKS
Our near-term outlook for the stock market is somewhat mixed. On the positive
side, we believe the long-term fundamental underpinnings in the stock market
remain excellent. We expect solid economic growth and low inflation to continue,
and we look for the national savings rate to increase as saving for retirement
by baby-boomers picks up. This increase in savings should provide large cash
inflows into stocks for the remainder of the decade.
This upbeat outlook has not gone unnoticed by the market, however, and much of
it has been reflected in stock prices. Higher interest rates and the threat of
renewed inflation could have a dampening effect on the stock market, as higher
interest rates may eventually entice assets from the stock market into bonds,
putting further pressure on stock prices.
Given the current outlook, we will take a more moderate risk profile over the
near-term than would be typical for this Fund. We believe that the same factors
responsible for the Fund's outperformance since its inception--attention to
individual stock selection and broad diversification--will continue to serve our
investors well.
Thank you for your investment in the Strong Small Cap Fund. We look forward to
serving your investment needs in the future.
Sincerely,
/s/Chip Paquelet
Charles "Chip" A. Paquelet
Portfolio Manager
[Photo of Chip A. Paquelet]
- --------------------------------------------------------------------------------
GROWTH OF AN ASSUMED $10,000 INVESTMENT TOTAL RETURN(1)
from 12-29-95 to 6-30-96 as of 6-30-96
The Strong S & P 500 Lipper Small Company SINCE INCEPTION
Small Cap Fund Stock Index* Growth Fund Index* (on 12-29-95)
12-95 10,000 10,000 10,000
1-96 10,710 10,340 9,953 24.69%
2-96 11,370 10,436 10,352
3-96 11,728 10,536 10,563
4-96 12,568 10,692 11,406
5-96 13,089 10,967 11,900
6-96 12,469 11,010 11,421
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with similar investments in the
Standard & Poor's 500 Stock Index ("S&P 500"), and the Lipper Small Company
Growth Fund 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.
- --------------------------------------------------------------------------------
* The Russell 2000(R) Index is an unmanaged index generally representative of
the U.S. market for small domestic stocks. The S&P 500 is an unmanaged
index generally representative of the U.S. stock market, without regard to
company size. The Lipper Small Company Growth Fund Index is an
equally-weighted performance index, adjusted for capital gains
distributions and income dividends, of the largest qualifying funds in this
Lipper category. Source of the Russell index data and the S&P index data is
Micropal. Source of the Lipper index data is Lipper Analytical Services,
Inc.
1 Total return measures aggregate change in the value of an investment in the
Fund, assuming reinvestment of dividends and capital gains.
11
<PAGE>
The Strong DISCOVERY Fund
================================================================================
In managing the Strong Discovery Fund, we strive to provide our investors with
long-term capital growth. We pursue our goal by investing primarily in the
stocks of well-managed, small- and mid-cap growth companies, with a core
commitment to large, established companies to provide stability and
diversification. To identify attractive investments, we employ a thorough
research process that includes on-site visits to the companies in which we
invest, and frequent discussions with management, suppliers, customers and
competitors.
As our long-term track record indicates, over time we've been successful at
adding value for our shareholders, compared to both the market and our
competition. In addition, we've helped investors overcome the eroding effects of
inflation.
On a personal level, I try to add value by drawing on over 30 years of
investment experience. Through the course of my career, I've seen just about
every type of financial market behavior, from euphoria to utter negativity and
back again. At times, emotion can feed on emotion, driving market cycles beyond
the highs and lows dictated by fundamental value. Historically, when it appears
the market has gotten ahead of itself, we've taken defensive positions to help
protect capital. The six-month period ended June 30, 1996, was one of those
times.
CUMULATIVE
TOTAL RETURNS(1)
from the Fund's inception on 12-31-87 through 6-30-96
Strong Discovery Fund 290.82%
S & P 500 Stock Index* 252.92%
Lipper Capital Appreciation Fund Index* 223.64%
Inflation* 35.79%
THE MARKET SWITCHES GEARS
The year began with investors basking in the glow of a great 1995. The S&P 500
had gained over 37%, fueled by declining long-term interest rates and
skyrocketing corporate profits.*
Late in 1995, however, it appeared to us that the economy was slowing,
increasing the likelihood that corporate earnings would come under pressure, and
that interest rates would trend still lower. These factors suggested that bonds
were becoming more attractive relative to stocks, and therefore we began to
increase our bond exposure, culminating in a 40% allocation to long-term
Treasury bonds by the end of January.
In February and March, however, surprisingly strong economic indicators
suggested that the economy's growth might be accelerating rather than slowing.
At that point, bonds began losing ground while stocks pushed higher. In
response, we reallocated assets back to the stock market, but as a result of the
prior misallocation and our reduced exposure to common stocks during the
market's rally, the Fund posted a disappointing return of -1.92% for the first
six months of the year, versus the broader market's gain of 10.10% as measured
by the S&P 500.(1)
THE IMPORTANCE OF FOCUS...
The Discovery Fund's charter gives us the flexibility to allocate assets away
from stocks when we believe it is appropriate. That said, our true strength has
always been stock selection. We are stock pickers through and through - it's who
we are and what we do - and we believe our highly-developed stock selection
process is the primary reason why we've achieved attractive long-term investment
results.
While market conditions may occasionally prompt us to adopt a defensive
position, we intend to focus on our stock selection process, honing the skills
that have proven their value over time. That means...
o VISITING HUNDREDS OF COMPANIES A YEAR, using our ability to judge character in
talks with each firm's management, suppliers and competitors as we separate
those who succeed from those who merely try.
o EMPHASIZING SOLID FIRMS that offer what we call a "razor relationship," in
that their products are used by consumers on a regular basis, resulting in a
predictable pattern of growth and earnings.
o MAINTAINING A BROADLY DIVERSIFIED PORTFOLIO that offers the powerful growth
potential of small- and mid-sized companies, but is built on a bedrock of
large, established firms.
We believe that, by diligently applying this time-tested approach, we'll
continue to offer our investors attractive returns over the long term.
...AND THE IMPORTANCE OF PERSPECTIVE
Earlier this year, the emotions of the market drove prices to unreasonably high
levels. Now, with interest rates having moved up, investors are trying to
evaluate the ability of corporate America to sustain earnings. As a result,
emotion may drive prices down to unreasonably low levels. To guard against this,
nearly 10% of the portfolio was positioned in cash and equivalent instruments at
the end of June.
12
<PAGE>
ASSET ALLOCATION
Based on net assets as of 6-30-96
Common Stocks 90.5%
Convertible Bonds 0.4%
Short-Term Investments 9.1%
These near-term concerns aside, we encourage you to keep the market's volatility
in perspective. Stocks have always had their cycles, and they always will. What
matters most is the overall economic picture, which appears positive for stocks.
The Federal Reserve seems determined to maintain a balance of growth with low
inflation regardless of who is in the White House.
Moreover, we expect the nation's savings rate to increase as baby boomers begin
saving for retirement, which should provide a solid flow of capital into the
stock market for years to come. And, when we factor in the growth of capitalism
and free market economies around the world, and the likelihood that global
competition will keep inflation subdued, we are encouraged by the prospects for
growth stocks over the next several years.
For our part, we will continue to use our disciplined investment process and our
vigorous research to add long-term value for our shareholders. Thank you for
your continued confidence in the Strong Discovery Fund.
Sincerely,
/s/ Richard S. Strong
Richard S. Strong
Portfolio Manager
[Photo of Richard S. Strong]
- --------------------------------------------------------------------------------
GROWTH OF AN ASSUMED $10,000 INVESTMENT AVERAGE ANNUAL
TOTAL RETURNS(1)
The Strong S & P 500 Lipper Capital as of 6-30-96
Discovery Fund Stock Index* Appreciation Fund Index*
12-87 10,000 10,000 10,000 1-YEAR
12-88 12,445 11,660 11,284 13.36%
12-89 15,427 15,355 14,478
12-90 15,005 14,878 13,351 3-YEAR
12-91 25,150 19,411 18,366 13.59%
12-92 25,638 20,890 19,754
12-93 31,332 22,996 22,865 5-YEAR
12-94 29,552 23,300 22,303 16.06%
12-95 39,884 32,055 29,350
6-96 39,082 35,292 32,364 SINCE INCEPTION
(on 12-31-87)
17.39%
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 Capital
Appreciation Fund 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 will vary, and you may
have a gain or loss when you sell shares.
* The S&P 500 is an unmanaged index generally representative of the U.S.
stock market. The Lipper Capital Appreciation Fund Index is an equally-
weighted performance index, adjusted for capital gains distributions and
income dividends, of the largest qualifying funds in this investment
objective. Inflation is represented by the Consumer Price Index ("CPI").
Source of the S&P 500 and CPI index data is Micropal.
1 Average annual total return and total return measure change in the value of
an investment, assuming reinvestment of all dividends and capital gains.
Average annual total return reflects annualized change, while total return
reflects aggregate change.
13
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
STRONG VALUE FUND
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
- --------------------------------------------------------------------------------
COMMON STOCKS 69.3%
AEROSPACE & DEFENSE 0.9%
Northrop Grumman Corporation 4,200 $ 286
AIRLINE 0.7%
Delta Air Lines, Inc. 3,000 249
AUTOMOBILE 1.9%
Ford Motor Company 20,000 648
BANK - MONEY CENTER 1.1%
Chase Manhattan Corporation 5,000 353
BROKERAGE & INVESTMENT MANAGEMENT 1.5%
National Golf Properties, Inc. Real Estate
Investment Trust 20,000 485
CHEMICAL 3.4%
FMC Corporation (b) 12,100 790
Monsanto Company 10,500 341
-----
1,131
CHEMICAL - SPECIALTY 3.3%
Georgia Gulf Corporation 8,000 234
W.R. Grace & Company 8,500 603
Wellman, Inc. 10,700 250
-----
1,087
COMMERCIAL SERVICE 2.7%
AT & T Capital Corporation 3,000 131
Diebold, Inc. 1,350 65
Dun & Bradstreet Corporation 4,500 281
Manpower, Inc. 8,600 338
True North Communications, Inc. 4,000 89
----
904
COMPUTER SERVICE 0.6%
Electronic Data Systems Corporation 3,500 188
CONTAINER 0.7%
Crown Cork & Seal Company, Inc. 5,300 239
DIVERSIFIED OPERATIONS 0.8%
Corning, Inc. 7,200 276
ELECTRICAL EQUIPMENT 2.1%
Honeywell, Inc. 13,000 708
ELECTRONIC PRODUCTS - MISCELLANEOUS 0.6%
Raychem Corporation 3,000 216
FINANCE - MISCELLANEOUS 1.7%
American Express Company 12,700 567
FOOD 5.6%
CPC International, Inc. 1,000 72
ConAgra, Inc. 6,000 272
General Mills, Inc. 13,400 730
IBP, Inc. 18,700 517
Quaker Oats Company 7,500 256
-----
1,847
HEALTHCARE - DRUG/DIVERSIFIED 1.3%
Merck & Company, Inc. 3,000 194
Pharmacia & Upjohn, Inc. 6,000 266
---
460
HEALTHCARE - MEDICAL SUPPLY 1.2%
Laboratory Corporation of America Holdings (b) 51,500 386
HEALTHCARE - PATIENT CARE 2.5%
United Healthcare Corporation 6,800 343
Vencor, Inc. (b) 13,500 412
WellPoint Health Networks, Inc. Class A (b) 2,467 77
---
832
INSURANCE - PROPERTY & CASUALTY 1.6%
ITT Hartford Group, Inc. 9,800 522
LEISURE PRODUCT 2.3%
Eastman Kodak Company 3,700 288
Hasbro, Inc. 13,300 475
---
763
LEISURE SERVICE 4.8%
Circus Circus Enterprises, Inc. (b) 10,000 410
Gaylord Entertainment Company 12,350 349
Harrahs Entertainment, Inc. (b) 13,200 373
International Game Technology 25,100 424
Penske Motorsports, Inc. (b) 1,300 34
-----
1,590
MEDIA - RADIO/TV 1.6%
Cox Communications, Inc. Class A (b) 13,500 292
Viacom International, Inc. (b) 5,900 229
---
521
NATURAL GAS DISTRIBUTION 2.4%
Columbia Gas Systems, Inc. 12,000 625
PanEnergy Corporation 5,400 178
---
803
OIL - NORTH AMERICAN EXPLORATION &
PRODUCTION 1.1%
Union Pacific Resources Group, Inc. 13,300 356
OIL - NORTH AMERICAN INTEGRATED 1.8%
Unocal Corporation 17,600 594
PAPER & FOREST PRODUCTS 2.4%
Bowater, Inc. 8,000 301
Kimberly-Clark Corporation 6,500 502
---
803
PERSONAL & COMMERCIAL LENDING 2.0%
Associates First Capital Corporation (b) 17,500 658
POLLUTION CONTROL 0.5%
Browning-Ferris Industries, Inc. 6,000 174
PRECIOUS METAL/GEM/STONE 0.9%
Barrick Gold Corporation 11,300 307
RAILROAD 0.9%
Union Pacific Corporation 4,400 307
RETAIL - DEPARTMENT STORE 2.7%
Federated Department Stores, Inc. (b) 26,500 904
RETAIL - DRUG STORE 2.4%
Rite Aid Corporation 26,400 785
RETAIL - MAJOR CHAIN 1.1%
Sears, Roebuck & Company 5,500 268
Toys `R' Us, Inc. (b) 3,700 105
---
373
RETAIL - RESTAURANT 0.4%
Darden Restaurants, Inc. 13,100 141
RETAIL - SPECIALTY 1.0%
Talbots, Inc. 10,000 324
TELECOMMUNICATION EQUIPMENT 0.1%
Lucent Technologies, Inc. 1,000 38
TELECOMMUNICATION SERVICE 6.7%
AT&T Corporation 14,500 899
AirTouch Communications (b) 15,000 424
Comsat Corporation 34,400 894
-----
2,217
------
TOTAL COMMON STOCKS (COST $22,543) 23,042
CONVERTIBLE PREFERRED STOCK 1.0%
Kmart Financing I Trust 7.75% Convertible
Preferred Securities (COST $323) 6,200 336
SHORT-TERM INVESTMENTS (a) 41.6%
COMMERCIAL PAPER 1.3%
INTEREST BEARING, DUE UPON DEMAND
General Mills, Inc., 5.14% $ 27 27
Johnson Controls, Inc., 5.17% 290 290
Wisconsin Electric Power Company, 5.19% 116 116
---
433
14
See notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
STRONG VALUE FUND(continued)
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT 40.3%
Cantor Fitzgerald & Company, Inc. (Collateralized by:
$3,859 United States Treasury Notes, 8.75%,
Due 5/15/20; $4,076 United States Treasury Bills,
4.64%, Due 2/06/97; $3,058 United States Treasury
Notes, 8.50%, Due 7/15/97; and $1,877 United
States Treasury Notes, 6.25%, Due 8/15/23) 5.34%,
Due 7/01/96 (e) $ 13,400 $ 13,400
--------
TOTAL SHORT-TERM INVESTMENTS
(COST $13,832) 13,833
--------
TOTAL INVESTMENTS IN SECURITIES
(COST $36,698) 111.9% 37,211
Other Assets and Liabilities, Net (11.9%) (3,983)
--------
NET ASSETS 100.0% $33,228
=======
- --------------------------------------------------------------------------------
STRONG OPPORTUNITY FUND
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
- --------------------------------------------------------------------------------
COMMON STOCKS 86.2%
AEROSPACE & DEFENSE 1.1%
Litton Industries, Inc. (b) 425,000 $ 18,486
AIRLINE 1.3%
AMR Corporation (b) 190,000 17,290
Air New Zealand, Ltd. Class B 1,221,000 3,823
------
21,113
AUTO & TRUCK PARTS 0.3%
Magna International, Inc. Class A 116,150 5,343
BANK - MONEY CENTER 1.2%
The Bank of Tokyo - Mitsubishi 450 10
Hong Leong Finance, Ltd. (Fgn Reg) 408,000 1,428
Toronto - Dominion Bank 950,000 16,759
United Overseas Bank, Ltd. 176,000 1,684
------
19,881
BANK - REGIONAL 2.0%
Mercantile Bancorporation, Inc. 410,000 18,245
Old Kent Financial Corporation 387,975 15,179
------
33,424
BANK - SUPER REGIONAL 1.1%
Barnett Banks, Inc. 301,900 18,416
BEVERAGE - ALCOHOLIC 0.2%
Molson Companies, Ltd. Class A 241,000 3,916
BEVERAGE - SOFT DRINK 0.1%
Coca-Cola Amatil, Ltd. 203,000 2,258
BROKERAGE & INVESTMENT MANAGEMENT 1.5%
Equity Residential Properties Trust 225,000 7,397
Kay Hian James Capel Holdings, Ltd. 750,000 792
Liberty Property Trust 562,100 11,172
Spieker Properties, Inc. 209,200 5,701
------
25,062
CLOSED - END FUND 0.1%
The Central European Growth Fund PLC 1,134,000 1,144
Five Arrows Chile Investment Trust, Ltd. 115,000 336
Jardine Fleming Fund (b) 1,469,000 505
------
1,985
COMMERCIAL SERVICE 1.6%
Reuters Holdings PLC ADR 268,000 19,430
Rollins Truck Leasing Corporation 665,000 6,899
------
26,329
COMPUTER - PERIPHERAL EQUIPMENT 1.0%
Seagate Technology, Inc. (b) 368,000 16,560
COMPUTER - PERSONAL & WORKSTATION 1.1%
Sun Microsystems, Inc. (b) 300,000 17,662
COMPUTER SOFTWARE 1.7%
Cabletron Systems, Inc. (b) 310,000 21,274
Microsoft Corporation (b) 51,800 6,222
------
27,496
COMPUTER SYSTEMS 1.0%
Policy Management Systems Corporation (b) 336,000 16,800
CONGLOMERATE 0.3%
Guinness Peat Group PLC 1,331,000 683
Inchcape PLC 368,000 1,673
Lonrho PLC 866,000 2,486
------
4,842
COSMETIC & PERSONAL CARE 0.0%
Shinseido Company, Ltd. 47,000 600
DIVERSIFIED OPERATIONS 3.3%
ITT Industries, Inc. 635,000 15,954
Tyco International, Ltd. 400,200 16,308
Whitman Corporation 897,300 21,647
------
53,909
ELECTRIC POWER 1.3%
NIPSCO Industries, Inc. 524,700 21,119
ELECTRONIC PARTS DISTRIBUTION 2.0%
Arrow Electronics, Inc. (b) 440,000 18,975
Marshall Industries (b) 488,000 13,664
------
32,639
ELECTRONIC PRODUCTS - MISCELLANEOUS 2.1%
AVX Corporation 900,000 16,650
Hubbell, Inc. Class B 249,700 16,543
Sony Corporation 23,000 1,512
------
34,705
ELECTRONICS - SEMICONDUCTOR/
COMPONENT 5.0%
Altera Corporation (b) 460,000 17,480
Dallas Semiconductor Corporation 550,500 9,978
Intel Corporation 330,000 24,234
KLA Instruments Corporation (b) 800,000 18,600
LSI Logic Corporation (b) 455,000 11,830
------
82,122
ENGINEERING & CONSTRUCTION 0.3%
Ishikawajima Harima Heavy Industries
Company, Ltd. 131,000 639
Italian-Thai Development PCL 164,000 1,524
Ohmoto Gumi Company, Ltd. 51,100 1,034
The Siam Cement PCL (Fgn Reg) 32,000 1,570
Walker Corporation 1,000,000 350
------
5,117
FINANCE - MISCELLANEOUS 0.1%
TA Enterprise BHD 980,000 1,532
FOOD 4.1%
CPC International, Inc. 302,000 21,744
Hershey Foods Corporation 279,000 20,472
Lion Nathan, Ltd. 1,930,000 5,032
Nestle SA Sponsored ADR 359,100 20,469
------
67,717
HEALTHCARE - DRUG/DIVERSIFIED 3.6%
Mallinckrodt Group, Inc. 479,000 18,621
Pharmacia & Upjohn, Inc. 468,500 20,790
Rhone Poulenc Rorer, Inc. 297,500 19,970
------
59,381
HEALTHCARE - MEDICAL SUPPLY 2.4%
McKesson Corporation 405,000 19,288
Sybron International Corporation (b) 770,000 19,250
------
38,538
HEALTHCARE - PATIENT CARE 0.8%
Apria Healthcare Group, Inc. (b) 443,000 13,899
HOUSING RELATED 0.0%
Nichiha 22,800 462
See notes to financial statements.
15
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES(continued) June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
STRONG OPPORTUNITY FUND(continued)
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
- --------------------------------------------------------------------------------
INSURANCE - PROPERTY & CASUALTY 2.3%
ACE, Ltd. 367,400 $ 17,268
American International Group, Inc. 211,000 20,810
------
38,078
LEISURE PRODUCT 1.1%
De Rigo Spa ADR (b) 22,860 523
Eastman Kodak Company 220,000 17,105
------
17,628
LEISURE SERVICE 1.2%
Gaylord Entertainment Company 704,970 19,915
MEDIA - PUBLISHING 3.2%
Arnoldo Mondadori Editore Spa 47,000 355
News Corporation, Ltd. 1,580,000 8,969
News Corporation, Ltd. ADR 383,000 9,001
The E.W. Scripps Company 480,000 22,380
Time Warner, Inc. 296,400 11,634
------
52,339
MEDIA - RADIO/TV 5.9%
Bell Cablemedia PLC ADR (b) 1,015,000 17,001
Comcast Corporation Class A 1,089,400 20,154
Cox Communications, Inc. Class A (b) 1,014,000 21,928
Tele-Communications, Inc. Class A (b) 1,020,000 18,488
Tele-Communications, Inc.
Liberty Media Group Series A (b) 724,000 19,186
------
96,757
METALS & MINING 1.3%
Freeport-McMoRan Copper & Gold, Inc. Class A 640,100 19,123
Minsur SA - Trabajo (b) 190,000 1,699
------
20,822
OIL - NORTH AMERICAN EXPLORATION
& PRODUCTION 5.5%
Apache Corporation 693,000 22,782
Barrett Resources Corporation (b) 822,200 24,460
Devon Energy Corporation 869,200 21,295
Enron Oil & Gas Company 760,000 21,185
------
89,722
OIL - NORTH AMERICAN INTEGRATED 1.1%
Phillips Petroleum Company 443,000 18,551
OIL WELL EQUIPMENT & SERVICE 3.8%
Camco International, Inc. 580,000 19,648
Halliburton Company 422,000 23,421
Petroleum Geo-Services A/S ADR (b) 692,500 19,650
------
62,719
PAPER & FOREST PRODUCTS 2.4%
Fletcher Challenge, Ltd. Forestry Division 3,104,996 3,846
The Mead Corporation 330,000 17,119
Willamette Industries, Inc. 315,000 18,743
------
39,708
PRECIOUS METAL/GEM/STONE 2.4%
De Beers Consolidated Mines, Ltd. ADR 594,700 20,071
Newmont Mining Company 348,700 17,217
Western Deep Levels, Ltd. ADR 77,000 2,791
------
40,079
RAILROAD 0.5%
Canadian National Railway Company First
Installment Receipt 360,000 6,615
REAL ESTATE 0.2%
Land & House PCL (Fgn Reg) 109,900 1,385
Shortland Properties, Ltd. 724,500 409
TOC Company, Ltd. 83,000 984
------
2,778
RETAIL - DEPARTMENT STORE 0.9%
May Department Stores Company 355,000 15,531
RETAIL - DRUG STORE 1.6%
Thrifty Payless Holdings, Inc. Class B (b) 1,485,000 25,616
RETAIL - FOOD CHAIN 2.3%
Albertson's, Inc. 425,000 17,584
FamilyMart 20,000 890
The Kroger Company (b) 481,000 19,000
------
37,474
RETAIL - MAJOR CHAIN 1.6%
Coles Myer, Ltd. 397,000 1,444
Sears CDA, Inc. 473,300 2,812
Toys `R' Us, Inc. (b) 750,000 21,375
------
25,631
RETAIL - RESTAURANT 1.0%
Darden Restaurants, Inc. 1,500,000 16,125
RETAIL - SPECIALTY 1.2%
Cortefiel, SA 22,000 503
The Limited, Inc. 643,400 13,833
Ross Stores, Inc. 130,000 4,518
------
18,854
SHIPPING 0.0%
Cosco Investments, Ltd. (b) 188,000 195
STEEL 0.1%
Companhia Vale do Rio Doce Sponsored ADR 80,000 1,610
TELECOMMUNICATION SERVICE 6.0%
AirTouch Communications (b) 555,000 15,679
MCI Communications Corporation 675,000 17,297
Mobilemedia Corporation (b) 599,900 7,274
Paging Network, Inc. (b) 835,000 20,040
Portugal Telecom SA Sponsored ADR 37,000 971
U.S. West, Inc. Media Group (b) 1,080,000 19,710
United States Cellular Corporation (b) 540,000 16,740
------
97,711
------
TOTAL COMMON STOCKS (COST $1,163,942) 1,415,771
CONVERTIBLE PREFERRED STOCK 0.6%
Kmart Financing I Trust 7.75% Convertible
Preferred Securities (COST $8,544) 170,000 9,223
PREFERRED STOCK 0.1%
Thai Prime Fund, Ltd. (COST $1,468) 83,000 1,461
CONVERTIBLE BONDS 0.3%
LSI Logic Corporation Subordinated Notes, 5.50%,
Due 3/15/01 (Acquired 3/16/94-7/06/96; Original
Cost $2,194) (AMORTIZED COST $2,188) (d) $ 2,185 4,741
OPTIONS 0.0%
Apria Healthcare Group, Inc. Call Options (Strike
Price is $35.00. Expiration date is 9/20/96.)
(COST $(170)) (b) 130,000 (57)
SHORT-TERM INVESTMENTS (a) 11.8%
COMMERCIAL PAPER 11.6%
DISCOUNTED 11.6%
Baxter International, Inc., Due 7/15/96 $ 8,910 8,891
Cole Taylor Finance Company:
Due 7/12/96 5,300 5,291
Due 7/26/96 12,400 12,351
Conagra, Inc.:
Due 7/11/96 7,800 7,789
Due 7/16/96 11,000 10,975
GATX Capital Corporation, Due 7/12/96 21,031 20,995
Lockheed Martin Corporation, Due 7/11/96 27,000 26,958
PSE & G Fuel Corporation, Due 7/30/96 13,425 13,365
Salomon, Inc.:
Due 7/01/96 3,122 3,122
Due 7/11/96 26,000 25,961
Sundstrand Corporation, Due 7/09/96 18,000 17,978
Travelers Aetna Property, Due 7/01/96 10,000 10,000
See notes to financial statements.
16
<PAGE>
- --------------------------------------------------------------------------------
STRONG OPPORTUNITY FUND(continued)
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
- --------------------------------------------------------------------------------
Tupperware Corporation:
Due 7/11/96 $ 15,500 $ 15,476
Due 7/18/96 10,980 10,951
---------
190,103
INTEREST BEARING, DUE UPON DEMAND 0.0%
General Mills, Inc., 5.14% 210 210
Wisconsin Electric Power Company, 5.19% 50 50
---------
260
---------
Total Commercial Paper 190,363
UNITED STATES GOVERNMENT ISSUES 0.2%
United States Treasury Bills:
Due 8/01/96(c) 250 249
Due 8/08/96 1,300 1,293
Due 9/19/96(c) 1,200 1,186
Due 9/26/96(c) 600 593
---------
3,321
---------
TOTAL SHORT-TERM INVESTMENTS
(COST $193,683) 193,684
---------
TOTAL INVESTMENTS IN SECURITIES
(COST $1,369,655) 99.0% 1,624,823
Other Assets and Liabilities, Net 1.0% 17,032
---------
NET ASSETS 100.0% $1,641,855
==========
FUTURES
- -------
UNDERLYING
FACE AMOUNT UNREALIZED
EXPIRATION AT VALUE DEPRECIATION
DATE (In Thousands) (In Thousands)
- --------------------------------------------------------------------------------
Purchased:
100 S&P 500 Futures 9/96 $33,840 ($45)
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
- -------------------------------------------
VALUE UNREALIZED
SETTLEMENT IN USD APPRECIATION
DATE (In Thousands) (In Thousands)
- --------------------------------------------------------------------------------
Sold:
686,276,000 JPY 11/07/96 ($6,378) $305
OPTIONS
- -------
PREMIUMS
NUMBER (In Thousands)
- --------------------------------------------------------------------------------
Options outstanding at Beginning of Period -- $--
Options written during the period 3,085 604
Options expired (1,185) (173)
Options exercised (600) (261)
---- ----
Options outstanding at End of Period 1,300 $170
===== ====
Expired options resulted in a capital gain (in thousands) of $173.
PERCENTAGE OF
COUNTRY DIVERSIFICATION NET ASSETS
- --------------------------------------------------------------------------------
United States .................................. 85.9%
United Kingdom ................................. 2.5
Canada ......................................... 2.1
Australia ...................................... 1.3
Norway ......................................... 1.2
South Africa ................................... 1.2
Switzerland .................................... 1.2
Bermuda ........................................ 1.0
New Zealand .................................... 0.8
Japan .......................................... 0.4
Thailand ....................................... 0.4
Hong Kong ...................................... 0.2
Singapore ...................................... 0.2
Brazil ......................................... 0.1
Italy .......................................... 0.1
Malaysia ....................................... 0.1
Peru ........................................... 0.1
Portugal ....................................... 0.1
Russia ......................................... 0.1
Other Assets and Liabilities, Net .............. 1.0
-----
Total 100.0%
=====
- --------------------------------------------------------------------------------
STRONG GROWTH FUND
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
- --------------------------------------------------------------------------------
COMMON STOCKS 88.9%
AIRLINE 0.6%
Midwest Express Holdings, Inc. (b) 200,000 $ 6,425
BANK - MONEY CENTER 0.6%
Citicorp 75,000 6,197
BANK - REGIONAL 0.6%
First Bank System, Inc. 110,000 6,380
BEVERAGE - SOFT DRINK 0.5%
PepsiCo, Inc. 150,000 5,306
CHEMICAL 1.1%
Monsanto Company 380,000 12,350
COMMERCIAL SERVICE 9.4%
ABR Information Services, Inc. (b) 170,000 8,542
Accustaff, Inc. (b) 1,000,000 27,250
Alternative Resources Corporation (b) 50,000 1,838
Career Horizons, Inc. (b) 280,000 9,800
Checkpoint Systems, Inc. (b) 240,000 8,250
Corestaff, Inc. (b) 550,000 24,613
Robert Half International, Inc. (b) 250,000 6,969
ICT Group, Inc. (b) 129,000 2,483
On Assignment, Inc. (b) 100,000 3,725
PIA Merchandising Services, Inc. (b) 59,800 867
Physician Resource Group, Inc. (b) 200,000 6,675
Sitel Corporation (b) 100,000 4,200
--------
105,212
COMPUTER - PERIPHERAL EQUIPMENT 2.5%
U.S. Robotics, Inc. (b) 330,000 28,215
COMPUTER - PERSONAL & WORKSTATION 0.3%
Dell Computer Corporation (b) 75,000 3,815
COMPUTER SERVICE 3.7%
Computer Horizons Corporation (b) 100,000 3,950
HBO & Company 270,000 18,293
Quality Systems, Inc. (b) 140,000 2,555
Sykes Enterprises, Inc. (b) 325,000 16,006
TechForce Corporation (b) 90,000 540
--------
41,344
COMPUTER SOFTWARE 9.3%
Baan Company NV (b) 120,000 4,080
CBT Group PLC ADR (b) 350,000 16,187
Cambridge Technology Partners, Inc. (b) 150,000 4,575
Cisco Systems, Inc. (b) 280,000 15,855
HNC Software, Inc. (b) 250,000 11,563
Integrated Systems, Inc. (b) 100,000 4,006
McAfee Associates, Inc. (b) 275,000 13,475
Microsoft Corporation (b) 75,000 9,009
Planning Sciences International PLC (b) 145,000 3,263
Segue Software, Inc. (b) 150,000 4,463
Transaction Systems Architects, Inc. (b) 100,000 6,700
Visio Corporation (b) 300,000 10,800
--------
103,976
See notes to financial statements.
17
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES(continued) June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
STRONG GROWTH FUND(continued)
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
- --------------------------------------------------------------------------------
CONSUMER - MISCELLANEOUS 1.2%
Service Corporation International 225,000 $ 12,937
DIVERSIFIED OPERATIONS 0.8%
Alco Standard Corporation 200,000 9,050
ELECTRONICS - SEMICONDUCTOR/
COMPONENT 3.4%
Computer Products, Inc. (b) 300,000 5,137
Intel Corporation 150,000 11,015
Sipex Corporation (b) 250,000 5,344
Uniphase Corporation (b) 455,000 16,153
-------
37,649
FINANCE - MISCELLANEOUS 1.3%
Capital One Financial Corporation 130,000 3,705
First USA Paymentech, Inc. (b) 65,200 2,608
Medaphis Corporation (b) 100,000 3,975
PMT Services, Inc. (b) 150,000 4,294
-------
14,582
HEALTHCARE - DRUG/DIVERSIFIED 5.5%
Biovail Corporation International (b) 100,000 3,125
Dura Pharmaceuticals, Inc. (b) 200,000 11,200
Elan Corporation PLC ADR (b) 150,000 8,569
Johnson & Johnson 100,000 4,950
Eli Lilly and Company 230,000 14,950
Merck & Company, Inc. 50,000 3,231
Pfizer, Inc. 150,000 10,706
Pharmacia & Upjohn, Inc. 100,000 4,438
-------
61,169
HEALTHCARE - INSTRUMENTATION 1.2%
Biopsys Medical, Inc. (b) 75,000 1,500
ESC Medical Systems, Ltd. (b) 235,000 6,639
Intelligent Medical Imaging, Inc. (b) 150,000 2,213
Physio-Control International Corporation (b) 175,000 3,084
-------
13,436
HEALTHCARE - MEDICAL SUPPLY 2.9%
Amerisource Distribution Corporation Class A (b) 235,000 7,814
Cardinal Health, Inc. 130,000 9,376
Orthodontic Centers of America, Inc. (b) 200,000 5,300
Physician Sales & Service, Inc. (b) 125,000 3,031
Quest Medical, Inc. (b) 375,000 2,625
Sola International, Inc. (b) 150,000 4,313
-------
32,459
HEALTHCARE - PATIENT CARE 0.8%
Healthsouth Corporation (b) 250,000 9,000
HEALTHCARE - PRODUCT 2.7%
Aksys, Ltd. (b) 200,000 3,050
Guidant Corporation 220,000 10,835
Meridian Diagnostics, Inc. 150,000 2,297
Parexel International Corporation (b) 216,000 10,422
Quintiles Transnational Corporation (b) 50,000 3,287
-------
29,891
HOUSING RELATED 0.4%
Watsco, Inc. 225,000 4,725
LEISURE PRODUCT 1.3%
Harley-Davidson, Inc. 190,000 7,814
West Marine, Inc. (b) 100,000 7,150
-------
14,964
LEISURE SERVICE 7.0%
Carnival Corporation Class A 200,000 5,775
Circus Circus Enterprises, Inc. (b) 100,000 4,100
HFS, Inc. (b) 500,000 35,000
Promus Hotel Corporation (b) 332,000 9,836
Regal Cinemas, Inc. (b) 280,000 12,810
Studio Plus Hotels, Inc. (b) 150,000 4,950
Wyndham Hotel Corporation (b) 258,500 5,396
-------
77,867
MACHINERY - TRANSPORTATION EQUIPMENT
& PARTS 0.8%
Miller Industries, Inc. (b) 320,000 9,160
MEDIA - RADIO/TV 0.9%
Clear Channel Communications, Inc. (b) 125,000 10,297
METAL PRODUCTS & FABRICATION 0.4%
NN Ball & Roller, Inc. 215,000 4,461
MORTGAGE & RELATED SERVICE 0.6%
Aames Financial Corporation 175,000 6,278
OFFICE AUTOMATION 1.4%
Danka Business Systems PLC Sponsored ADR 550,000 16,088
OIL - NORTH AMERICAN EXPLORATION
& PRODUCTION 1.5%
Chesapeake Energy Corporation (b) 90,000 8,089
Gulf Canada Resources, Ltd. (b) 950,000 4,808
Gulf Canada Resources, Ltd. ADR (b) 800,000 4,100
-------
16,997
OIL WELL EQUIPMENT & SERVICE 0.5%
Pride Petroleum Services, Inc. (b) 350,000 4,988
RETAIL - DEPARTMENT STORE 0.7%
Kohl's Corporation (b) 200,000 7,325
RETAIL - DISCOUNT & VARIETY 3.1%
Consolidated Stores Corporation (b) 320,000 11,760
Dollar Tree Stores, Inc. (b) 368,300 11,693
Garden Ridge Corporation (b) 210,000 10,605
-------
34,058
RETAIL - RESTAURANT 1.6%
Apple South, Inc. 150,000 4,012
Planet Hollywood International, Inc. Class A (b) 50,000 1,350
Rainforest Cafe, Inc. (b) 200,000 10,000
Starbucks Corporation (b) 100,000 2,825
-------
18,187
RETAIL - SPECIALTY 8.5%
BT Office Products International, Inc. (b) 350,000 6,256
CUC International, Inc. (b) 350,000 12,425
Corporate Express, Inc. (b) 500,000 20,000
Cost Plus, Inc. (b) 135,000 3,746
Gadzooks, Inc. (b) 150,000 4,837
Garden Botanika, Inc. (b) 200,000 4,400
Gucci Group NV (b) 80,000 5,160
Just For Feet, Inc. (b) 220,000 11,633
Staples, Inc. (b) 350,000 6,825
U.S. Office Products Company (b) 100,000 4,200
Viking Office Products, Inc. (b) 480,000 15,060
-------
94,542
SHOE & APPAREL MANUFACTURING 2.6%
Nautica Enterprises, Inc. (b) 550,000 15,813
NIKE, Inc. Class B 100,000 10,275
Tommy Hilfiger Corporation (b) 50,000 2,681
-------
28,769
SOAP & CLEANING PREPARATION 0.9%
USA Detergents, Inc. (b) 250,000 9,969
TELECOMMUNICATION EQUIPMENT 5.4%
Adtran, Inc. (b) 50,000 3,543
Andrew Corporation (b) 200,000 10,750
Cascade Communications Corporation (b) 220,000 14,960
Coherent Communications Systems Corporation (b) 89,400 1,900
Newbridge Networks Corporation (b) 100,000 6,550
StrataCom, Inc. (b) 100,000 5,625
Tellabs, Inc. (b) 250,000 16,719
-------
60,047
TELECOMMUNICATION SERVICE 1.5%
Intermedia Communications, Inc. (b) 100,000 3,225
McLeod, Inc. (b) 150,000 3,600
See notes to financial statements.
18
<PAGE>
- --------------------------------------------------------------------------------
STRONG GROWTH FUND(continued)
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
- --------------------------------------------------------------------------------
TESSCO Technologies, Inc. (b) 100,000 $ 3,650
U. S. Long Distance Corporation (b) 175,000 6,212
-------
16,687
TELEPHONE 0.8%
Cincinnati Bell, Inc. 175,000 9,122
TOBACCO 0.6%
Philip Morris Companies, Inc. 65,000 6,760
-------
TOTAL COMMON STOCKS (COST $779,855) 990,684
CONVERTIBLE PREFERRED STOCK 0.1%
Crystal Dynamics, Inc. Series D (Acquired
7/07/95; COST $1,000) (b) (d) 133,334 1,000
CONVERTIBLE BONDS 0.3%
Danka Business Systems PLC Subordinated Notes,
6.75%, Due 4/01/02 $ 2,000 2,375
First Financial Management Corporation
Debentures, 5.00%, Due 12/15/99 250 472
-------
TOTAL CONVERTIBLE BONDS (COST $2,826) 2,847
SHORT-TERM INVESTMENTS (a) 14.3%
COMMERCIAL PAPER 14.2%
DISCOUNTED 14.2%
Cole Taylor Finance Company:
Due 7/01/96 4,652 4,652
Due 7/12/96 1,000 998
Due 7/17/96 3,504 3,496
Due 7/19/96 2,830 2,822
Conagra, Inc.:
Due 7/11/96 1,400 1,398
Due 7/16/96 8,800 8,780
Detroit Edison Company, Due 7/01/96 25,000 25,000
FMC Corporation, Due 7/09/96 25,000 24,969
Lehman Brothers Holdings, Inc., Due 7/09/96 23,600 23,571
Newell Company, Due 7/01/96 13,700 13,700
Potomac Capital Investment Corporation,
Due 7/08/96 2,760 2,757
Salomon, Inc., Due 7/01/96 13,100 13,100
SUPERVALU, Inc.:
Due 7/01/96 15,000 15,000
Due 7/08/96 18,441 18,421
-------
158,664
INTEREST BEARING, DUE UPON DEMAND 0.0%
Johnson Controls, Inc., 5.17% 293 293
Wisconsin Electric Power Company, 5.19% 33 33
-------
326
UNITED STATES GOVERNMENT ISSUES 0.1%
United States Treasury Bills:
Due 8/08/96 200 199
Due 9/19/96 905 895
-------
1,094
TOTAL SHORT-TERM INVESTMENTS
(COST $160,084) 160,084
-------
TOTAL INVESTMENTS IN SECURITIES
(COST $943,765) 103.6% 1,154,615
Other Assets and Liabilities, Net (3.6%) (40,450)
----------
NET ASSETS 100.0% $1,114,165
==========
TRANSACTIONS WITH AFFILIATED COMPANIES
- --------------------------------------
Realized Dividend
Gain/Loss Income Market Value
Affiliate (In Thousands)(In Thousands) (In Thousands)
- --------------------------------------------------------------------------------
Norland Medical Systems Inc. $3,305 -- $ --
Quest Medical, Inc. (56) -- 2,625
PERCENTAGE OF
COUNTRY DIVERSIFICATION NET ASSETS
- --------------------------------------------------------------------------------
United States ................................. 97.7%
Ireland ....................................... 2.2
United Kingdom ................................ 1.9
Canada ........................................ 0.9
Italy ......................................... 0.5
Netherlands ................................... 0.4
Other Assets and Liabilities, Net ............. (3.6)
-----
Total 100.0%
=====
- --------------------------------------------------------------------------------
STRONG COMMON STOCK FUND
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
- --------------------------------------------------------------------------------
COMMON STOCKS 90.7%
AIRLINE 0.2%
Singapore Airlines, Ltd. (Fgn Reg) 156,000 $ 1,647
AUTO & TRUCK PARTS 1.3%
Borg-Warner Automotive, Inc. 372,000 14,694
BANK - MONEY CENTER 0.1%
The Bank of Tokyo - Mitsubishi 300 7
Hong Leong Finance, Ltd. (Fgn Reg) 298,000 1,043
-------
1,050
BANK - REGIONAL 2.3%
City National Corporation 795,200 12,524
Old Kent Financial Corporation 345,750 13,528
-------
26,052
BANK - SUPER REGIONAL 1.2%
Bank of Boston Corporation 275,000 13,612
BROKERAGE & INVESTMENT MANAGEMENT 1.4%
Apartment Investment & Management
Company Class A 650,000 12,188
Kay Hian James Capel Holdings, Ltd. 825,000 871
Midland Walwyn, Inc. 434,300 2,787
-------
15,846
CHEMICAL 0.1%
Yizheng Chemical Fibre Company, Ltd. 4,050,000 895
CLOSED-END FUND 0.3%
Jardine Fleming Fund (b) 1,224,000 421
ROC Taiwan Fund (b) 211,000 2,400
-------
2,821
COMMERCIAL SERVICE 3.4%
ADT, Ltd. (b) 785,000 14,817
Ecolab, Inc. 375,000 12,375
Rollins Truck Leasing Corporation 1,179,400 12,236
-------
39,428
COMPUTER - PERIPHERAL EQUIPMENT 1.9%
Read-Rite Corporation (b) 725,000 10,241
Seagate Technology, Inc. (b) 265,000 11,925
-------
22,166
COMPUTER - PERSONAL & WORKSTATION 1.2%
Data General Corporation (b) 1,015,000 13,195
COMPUTER SOFTWARE 2.1%
Autodesk, Inc. 370,000 11,053
Wang Labs, Inc. (b) 700,000 13,213
-------
24,266
CONGLOMERATE 0.2%
Benpres Holdings Corporation Sponsored GDR (b) 146,000 1,187
Inchcape PLC 245,000 1,114
-------
2,301
DIVERSIFIED OPERATIONS 0.3%
Canadian Pacific, Ltd. 175,000 3,850
See notes to financial statements.
19
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES(continued) June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
STRONG COMMON STOCK FUND(continued)
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT 2.2%
Amphenol Corporation (b) 525,000 $ 12,075
Molex, Inc. Class A (b) 451,000 13,248
------
25,323
ELECTRONIC PARTS DISTRIBUTION 1.0%
Marshall Industries (b) 400,000 11,200
ELECTRONIC PRODUCTS - MISCELLANEOUS 0.2%
Nichols Research Corporation (b) 32,000 1,000
Sony Corporation 16,000 1,052
------
2,052
ELECTRONICS - SEMICONDUCTOR/
COMPONENT 4.6%
Ibiden Company, Ltd. 112,000 1,082
Intel Corporation 230,000 16,891
KLA Instruments Corporation (b) 560,000 13,020
Kemet Corporation (b) 300,000 6,000
Littelfuse, Inc. (b) 78,200 2,932
SGS-Thomson Microelectronics (b) 370,000 13,274
------
53,199
ENGINEERING & CONSTRUCTION 0.3%
Ishikawajima Harima Heavy Industries
Company, Ltd. 118,000 576
Italian-Thai Development PCL 120,000 1,115
Ohmoto Gumi Company, Ltd. 44,400 899
The Siam Cement PCL (Fgn Reg) 23,000 1,129
------
3,719
FINANCE - MISCELLANEOUS 0.2%
Lend Lease Corporation, Ltd. 58,000 890
TA Enterprise BHD 715,000 1,118
------
2,008
FOOD 1.6%
Allied Domecq PLC 127,000 891
Lion Nathan, Ltd. 1,443,000 3,762
Nabisco Holdings Corporation 400,000 14,150
------
18,803
HEALTHCARE - BIOMEDICAL/GENETIC 1.1%
Centocor, Inc. (b) 435,000 12,995
HEALTHCARE - DRUG/DIVERSIFIED 1.4%
Astra AB A Shares 365,000 16,099
HEALTHCARE - INSTRUMENTATION 1.3%
Beckman Instruments, Inc. 390,000 14,820
HEALTHCARE - MEDICAL SUPPLY 1.2%
Sybron International Corporation (b) 540,000 13,500
HEALTHCARE - PATIENT CARE 1.2%
Tenet Healthcare Corporation (b) 655,000 14,000
HEALTHCARE - PRODUCT 1.0%
Allergan, Inc. 300,000 11,775
HOUSEHOLD-APPLIANCES & FURNISHINGS 2.6%
Libbey, Inc. 575,000 15,956
Premark International, Inc. 775,000 14,338
------
30,294
HOUSING RELATED 0.1%
Nichiha 27,400 555
INSURANCE - DIVERSIFIED 1.5%
Tempest Reinsurance Company, Ltd. (Acquired
9/15/93; Cost $11,500) (b) (d) 115,000 17,142
INSURANCE - MULTI-LINE 1.3%
Horace Mann Educators Corporation 460,000 14,605
LEISURE PRODUCT 0.0%
De Rigo Spa ADR (b) 18,580 425
LEISURE SERVICE 0.2%
AAPC, Ltd. 3,200,000 2,016
Tourism Asset Holdings, Ltd. (b) 256,000 189
------
2,205
MEDIA - PUBLISHING 0.2%
Torstar Corporation - Class B 149,500 2,780
MEDIA - RADIO/TV 9.2%
Bell Cablemedia PLC ADR (b) 770,700 12,909
A.H. Belo Corporation Series A 375,900 14,002
Cox Communications, Inc. Class A (b) 686,000 14,835
International Family Entertainment, Inc.
Class B (b) 575,000 10,638
LIN Television Corporation (b) 430,000 15,480
Tele-Communications, Inc. Class A (b) 750,000 13,594
Tele-Communications International, Inc.
Class A (b) 760,000 13,395
Turner Broadcasting System, Inc. Class B 410,001 11,275
-------
106,128
METALS & MINING 0.1%
Minsur SA - Trabajo (b) 139,000 1,243
NATURAL GAS DISTRIBUTION 1.1%
ENSERCH Corporation 600,000 13,050
OIL - NORTH AMERICAN EXPLORATION &
PRODUCTION 5.3%
Devon Energy Corporation 618,000 15,141
Enron Oil & Gas Company 600,000 16,725
Enserch Exploration, Inc. (b) 350,000 3,763
H S Resources, Inc. (b) 630,000 7,324
Harken Energy Corporation (b) 1,500,000 4,031
Noble Affiliates, Inc. 370,000 13,967
------
60,951
OIL - NORTH AMERICAN INTEGRATED 1.1%
Unocal Corporation 365,000 12,319
OIL WELL EQUIPMENT & SERVICE 2.4%
ENSCO International, Inc. (b) 460,000 14,950
Offshore Logistics, Inc. (b) 940,000 13,042
------
27,992
PAPER & FOREST PRODUCTS 1.2%
Carter Holt Harvey, Ltd. 75,000 171
Consolidated Papers, Inc. 262,500 13,650
------
13,821
POLLUTION CONTROL 0.4%
Laidlaw, Inc. Class B 450,000 4,556
PRECIOUS METAL/GEM/STONE 3.3%
Battle Mountain Gold Company 1,375,000 9,969
De Beers Consolidated Mines, Ltd. ADR 430,000 14,513
Newmont Mining Company 265,000 13,084
------
37,566
REAL ESTATE 0.9%
Castle & Cooke, Inc. (b) 480,001 7,680
Land & House PCL (Fgn Reg) 80,300 1,012
TOC Company, Ltd. 105,000 1,245
------
9,937
RETAIL - DEPARTMENT STORE 2.3%
Dillard Department Stores, Inc. Class A 350,000 12,775
Federated Department Stores, Inc. (b) 405,000 13,821
------
26,596
RETAIL - FOOD CHAIN 3.7%
American Stores Company 355,000 14,644
The Kroger Company (b) 365,000 14,417
The Vons Companies, Inc. (b) 350,000 13,081
------
42,142
RETAIL - MAJOR CHAIN 1.2%
Coles Myer, Ltd. 290,000 1,055
Toys `R' Us, Inc. (b) 460,000 13,110
------
14,165
RETAIL - RESTAURANT 2.4%
IHOP Corporation (b) 500,000 13,500
Sbarro, Inc. 565,000 14,196
------
27,696
See notes to financial statements.
20
<PAGE>
- --------------------------------------------------------------------------------
STRONG COMMON STOCK FUND(continued)
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
- --------------------------------------------------------------------------------
RETAIL - SPECIALTY 2.4%
Best Denki Company, Ltd. 39,000 $ 583
Cambridge Shopping Centers, Ltd. 500,000 3,668
Cortefiel, SA 44,000 1,005
Musicland Stores Corporation (b) 1,481,000 4,813
Nordstrom, Inc. 260,000 11,570
Software Spectrum, Inc. (b) 270,000 6,278
------
27,917
SAVINGS & LOAN 1.9%
H.F. Ahmanson & Company 500,000 13,500
Washington Federal Savings & Loan Association 417,200 8,553
------
22,053
SHOE & APPAREL MANUFACTURING 1.2%
Unifi, Inc. 500,000 14,062
STEEL 0.1%
Companhia Vale do Rio Doce Sponsored ADR 60,000 1,207
TELECOMMUNICATION EQUIPMENT 2.6%
Belden, Inc. 470,600 14,118
Nokia Corporation ADR 430,000 15,910
------
30,028
TELECOMMUNICATION SERVICE 8.7%
AirTouch Communications (b) 410,000 11,583
American Portable Telecom, Inc. (b) 1,100,000 11,825
International CableTel, Inc. (b) 450,000 13,275
Nextel Communications, Inc. Class A (b) 675,000 12,867
Paging Network, Inc. (b) 621,900 14,926
PanAmSat Corporation (b) 334,600 9,703
U.S. West, Inc. Media Group (b) 780,000 14,235
United States Cellular Corporation (b) 380,000 11,780
-------
100,194
---------
TOTAL COMMON STOCKS (COST $875,752) 1,042,945
CONVERTIBLE BONDS 0.1%
Musicland Group, Inc. Senior Subordinated Notes,
9.00%, Due 06/15/03 (COST $673) $ 1,000 685
SHORT-TERM INVESTMENTS (a) 9.9%
COMMERCIAL PAPER 9.7%
DISCOUNTED 9.5%
Cole Taylor Finance Company:
Due 7/05/96 12,571 12,563
Due 7/12/96 10,882 10,864
Due 7/26/96 2,600 2,590
Conagra, Inc., Due 7/11/96 35,600 35,545
FMC Corporation, Due 7/08/96 12,429 12,416
Lockheed Martin Corporation, Due 7/11/96 6,500 6,490
Potomac Capital Investment Corporation,
Due 7/09/96 4,125 4,120
Salomon, Inc.:
Due 7/02/96 19,500 19,470
Due 7/11/96 5,335 5,334
-------
109,392
INTEREST BEARING, DUE UPON DEMAND 0.2%
American Family Financial Services, Inc., 5.15% 344 344
General Mills, Inc., 5.14% 503 503
Johnson Controls, Inc., 5.17% 513 513
Pitney Bowes Credit Corporation, 5.14% 308 308
Southwestern Bell Telephone Company, 5.12% 171 171
Warner Lambert Company, 5.12% 492 492
Wisconsin Electric Power Company, 5.19% 289 289
------
2,620
UNITED STATES GOVERNMENT ISSUES 0.2%
United States Treasury Bills:
Due 7/25/96 230 229
Due 8/08/96 1,250 1,244
Due 9/26/96 750 741
------
2,214
------
TOTAL SHORT-TERM INVESTMENTS
(COST $114,226) 114,226
-------
TOTAL INVESTMENTS IN SECURITIES
(COST $990,651) 100.7% 1,157,856
Other Assets and Liabilities, Net (0.7%) (7,736)
----------
NET ASSETS 100.0% $1,150,120
==========
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
- -------------------------------------------
VALUE UNREALIZED
SETTLEMENT IN USD APPRECIATION
DATE (In Thousands) (In Thousands)
- --------------------------------------------------------------------------------
Sold:
3,212,000 DEM 8/12/96 ($2,113) $ 97
773,571,000 JPY 11/07/96 (7,189) 344
TRANSACTIONS WITH AFFILIATED COMPANIES
- --------------------------------------
REALIZED DIVIDEND
GAIN/LOSS INCOME MARKET VALUE
AFFILIATE (In Thousands) (In Thousands) (In Thousands)
- --------------------------------------------------------------------------------
Apartment Investment &
Management Company $-- $553 $12,188
H S Resources, Inc. (108) -- 7,324
IHOP Corporation -- -- 13,500
Software Spectrum, Inc. 4 -- 6,278
PERCENTAGE OF
COUNTRY DIVERSIFICATION NET ASSETS
- --------------------------------------------------------------------------------
United States ....................................... 88.9%
Bermuda ............................................. 1.5
Finland ............................................. 1.4
Sweden .............................................. 1.4
South Africa ........................................ 1.3
United Kingdom ...................................... 1.3
France .............................................. 1.2
Canada .............................................. 1.1
Japan ............................................... 0.5
Australia ........................................... 0.4
New Zealand ......................................... 0.3
Singapore ........................................... 0.3
Thailand ............................................ 0.3
Taiwan .............................................. 0.2
Brazil .............................................. 0.1
China ............................................... 0.1
Malaysia ............................................ 0.1
Peru ................................................ 0.1
Philippines ......................................... 0.1
Spain ............................................... 0.1
Other Assets and Liabilities, Net ................... (0.7)
------
Total 100.0%
=====
21
See notes to financial statements.
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES(continued) June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
STRONG SMALL CAP FUND
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
- --------------------------------------------------------------------------------
COMMON STOCKS 89.6%
AGRICULTURAL OPERATIONS 0.1%
Delta Dollar Pine Company, Ltd. 2,000 $ 84
AUTO & TRUCK PARTS 2.6%
Gentex Corporation (b) 4,000 78
Mark IV Industries, Inc. 30,000 679
Sinter Metals, Inc. Class A (b) 3,000 53
Strattec Security Corporation (b) 70,000 1,243
------
2,053
BEVERAGE - ALCOHOLIC 0.5%
Canandaigua Wine Company, Inc. (b) 14,100 423
BROKERAGE & INVESTMENT MANAGEMENT 1.8%
CWM Mortgage Holdings, Inc. 30,000 510
Liberty Property Trust 11,000 219
Sunstone Hotel Investors, Inc. 60,000 653
------
1,382
COMMERCIAL SERVICE 6.8%
Amresco, Inc. 54,500 933
Career Horizons, Inc. (b) 40,500 1,417
Consolidated Graphics, Inc. (b) 50,000 1,087
FYI, Inc. (b) 3,800 70
Iron Mountain, Inc. (b) 15,000 315
Pittston Company Brinks Group 20,000 583
Right Management Consultants, Inc. (b) 8,000 292
Rollins Truck Leasing Corporation 28,500 296
Romac International, Inc. (b) 5,000 128
Sensormatic Electronics Corporation 10,000 164
------
5,285
COMPUTER - PERIPHERAL EQUIPMENT 4.4%
Boca Research, Inc. (b) 78,625 1,435
DH Technology, Inc. (b) 25,000 600
Encad, Inc. (b) 32,000 544
ImageMatrix Corporation Units (b) 16,000 92
Micros Systems, Inc. (b) 6,000 167
Zitel Corporation (b) 45,000 619
------
3,457
COMPUTER SERVICE 0.3%
Fiserv, Inc. (b) 7,000 210
Sungard Data Systems, Inc. (b) 400 16
------
226
COMPUTER SOFTWARE 2.7%
Catalyst International, Inc. (b) 60,000 690
McAfee Associates, Inc. (b) 10,000 490
Tecnomatix Technologies, Ltd. (b) 21,000 399
Zebra Technologies Corporation (b) 30,000 533
------
2,112
COMPUTER SYSTEMS 0.7%
Cognex Corporation (b) 33,000 532
Policy Management Systems Corporation (b) 1,000 50
------
582
CONSUMER - MISCELLANEOUS 0.9%
Ideon Group, Inc. 53,000 715
COSMETIC & PERSONAL CARE 1.2%
Parlux Fragrances, Inc. (b) 89,000 901
ELECTRICAL EQUIPMENT 1.4%
Perceptron, Inc. (b) 29,000 1,058
ELECTRONIC PARTS DISTRIBUTION 3.3%
Kent Electronics Corporation (b) 42,400 1,325
Marshall Industries (b) 44,000 1,232
------
2,557
ELECTRONIC PRODUCTS - MISCELLANEOUS 0.6%
Universal Electronics, Inc. (b) 40,000 465
ELECTRONICS - SEMICONDUCTOR/
COMPONENT 0.8%
C P Clare Corporation (b) 15,000 386
Dallas Semiconductor Corporation 5,000 91
FSI International, Inc. (b) 11,000 139
Vishay Intertechnology, Inc. (b) 2,000 47
------
663
HEALTHCARE - DRUG/DIVERSIFIED 2.1%
Halsey Drug Company, Inc. (b) 280,000 1,610
HEALTHCARE - INSTRUMENTATION 1.6%
Applied Biometrics, Inc. (b) 60,000 952
Biomet, Inc. (b) 13,000 187
Spine-Tech, Inc. (b) 3,500 102
------
1,241
HEALTHCARE - MEDICAL SUPPLY 6.4%
CNS, Inc. (b) 25,000 606
Cohr, Inc. (b) 77,000 1,829
Dentsply International, Inc. 4,000 170
Orthodontic Centers of America, Inc. (b) 4,000 106
Steris Corporation (b) 35,000 1,120
Sybron International Corporation (b) 28,000 700
Vitalink Pharmacy Services, Inc. (b) 20,300 472
------
5,003
HEALTHCARE - PATIENT CARE 3.9%
Compdent Corporation (b) 7,000 325
Lincare Holdings, Inc. (b) 20,000 785
Ornda Healthcorp (b) 15,000 360
Raytel Medical Group (b) 25,000 319
United Dental Care, Inc. (b) 30,000 1,268
------
3,057
HEALTHCARE - PRODUCT 0.6%
Hemocleanse, Inc. (Acquired 5/14/96;
Cost $465) (b) (d) 155,000 465
HOUSEHOLD APPLIANCE & FURNISHINGS 1.7%
Fedders Corporation Class A 40,000 235
Harman International Industries, Inc. 23,000 1,133
------
1,368
HOUSING 0.3%
Monaco Coach Corporation (b) 17,000 212
HOUSING RELATED 1.1%
LSI Industries, Inc. 50,000 862
INSURANCE - PROPERTY & CASUALTY 0.6%
CMAC Investment Corporation 8,000 460
LEISURE PRODUCT 1.8%
Custom Chrome, Inc. (b) 20,000 537
SCP Pool Corporation (b) 50,000 900
------
1,437
LEISURE SERVICE 4.6%
Bally Entertainment Corporation (b) 15,000 412
Grand Casinos, Inc. (b) 20,000 515
Premier Parks, Inc. (b) 10,000 218
Promus Hotel Corporation (b) 22,200 658
Red Roof Inns, Inc. (b) 68,000 961
Sholodge, Inc. (b) 16,125 202
Stratosphere Corporation (b) 91,000 546
WMS Industries, Inc. (b) 3,000 74
------
3,586
MACHINE TOOL 4.0%
Applied Power, Inc. 46,000 1,288
Computational Systems, Inc. (b) 60,000 1,297
PPT Vision, Inc. (b) 12,500 155
Strategic Distribution, Inc. (b) 50,000 394
------
3,134
MACHINERY - AGRICULTURE 0.2%
Lindsay Manufacturing Company 3,000 121
MACHINERY - MISCELLANEOUS 0.7%
Duriron, Inc. 16,000 384
Graco, Inc. 10,000 202
------
586
22
See notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
STRONG SMALL CAP FUND (continued)
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
- --------------------------------------------------------------------------------
MACHINERY - TRANSPORTATION EQUIPMENT &
PARTS 0.3%
Trinity Industries, Inc. 7,000 $ 238
MEDIA - RADIO/TV 1.6%
American Radio Systems Corporation Class A (b) 3,000 129
Children's Broadcasting Corporation (b) 82,000 574
SFX Broadcasting, Inc. Class A (b) 15,000 585
------
1,288
OFFICE AUTOMATION 4.2%
Danka Business Systems PLC Sponsored ADR 5,000 146
Hon Industries, Inc. 20,000 570
Nu-Kote Holding, Inc. Class A (b) 158,000 2,627
------
3,343
OIL - NORTH AMERICAN EXPLORATION &
PRODUCTION 0.6%
Comstock Resources, Inc. (b) 29,500 301
Unit Corporation (b) 20,000 133
------
434
OIL WELL EQUIPMENT & SERVICE 5.1%
Diamond Offshore Drilling, Inc. (b) 5,000 286
Falcon Drilling Company, Inc. (b) 8,000 217
Marine Drilling Companies, Inc. (b) 115,000 1,164
Noble Drilling Corporation (b) 37,000 513
Petroleum Geo-Services A/S ADR (b) 23,500 667
Rowan Companies, Inc. (b) 34,000 502
Smith International, Inc. (b) 10,000 301
3-D Geophysical, Inc. (b) 4,400 47
UTI Energy Corporation (b) 8,700 101
Varco International, Inc. (b) 10,000 181
------
3,979
PAPER & FOREST PRODUCTS 0.7%
Buckeye Cellulose Corporation (b) 20,000 552
PERSONAL & COMMERCIAL LENDING 1.9%
Americredit Corporation (b) 35,000 547
Mercury Finance Company 50,000 637
Sirrom Capital Corporation 10,000 273
------
1,457
POLLUTION CONTROL 0.9%
Allied Waste Industries, Inc. (b) 35,000 311
Donaldson, Inc. 15,000 386
------
697
RAILROAD 2.1%
Kansas City Southern Industries, Inc. 18,000 772
Railtex, Inc. (b) 20,000 515
Wisconsin Central Transportation Corporation (b) 12,000 390
------
1,677
RETAIL - DISCOUNT & VARIETY 1.1%
Consolidated Stores Corporation (b) 23,000 845
RETAIL - RESTAURANT 2.9%
Apple South, Inc. 3,500 94
Casa Ole Restaurants, Inc. (b) 40,000 547
Rainforest Cafe, Inc. (b) 32,000 1,600
------
2,241
RETAIL - SPECIALTY 5.6%
Black Box Corporation (b) 10,000 237
CHS Electronics, Inc. (b) 27,500 371
Central Garden & Pet Company (b) 70,000 1,260
Corporate Express, Inc. (b) 7,000 280
Goody's Family Clothing, Inc. (b) 6,900 71
Hollywood Entertainment Corporation (b) 50,000 775
Just For Feet, Inc. (b) 2,000 106
Movie Gallery, Inc. (b) 53,000 1,113
Wilmar Industries, Inc. (b) 7,000 182
------
4,395
SAVINGS & LOAN 0.5%
California Federal Bancorp, Inc. (b) 10,000 183
First Colorado Bancorp, Inc. 17,000 225
------
408
TELECOMMUNICATION EQUIPMENT 2.8%
Belden, Inc. 45,000 1,350
Communications Central, Inc. (b) 80,000 620
Digital Systems International, Inc. (b) 15,000 227
------
2,197
TRANSPORTATION SERVICE 1.6%
Hub Group, Inc. Class A (b) 60,000 1,222
------
TOTAL COMMON STOCKS (COST $68,634) 70,078
SHORT-TERM INVESTMENTS (a) 10.2%
COMMERCIAL PAPER 0.3%
INTEREST BEARING, DUE UPON DEMAND
American Family Financial Services, Inc., 5.15% $ 3 3
General Mills, Inc., 5.14% 15 15
Johnson Controls, Inc., 5.17% 222 222
Wisconsin Electric Power Company, 5.19% 25 25
------
265
REPURCHASE AGREEMENT 9.9%
Cantor Fitzgerald & Company, Inc.,
5.34%, Due 7/01/96 7,700 7,700
------
TOTAL SHORT-TERM INVESTMENTS (COST $7,965) 7,965
------
TOTAL INVESTMENTS IN SECURITIES
(COST $76,599) 99.8% 78,043
Other Assets and Liabilities, Net 0.2% 188
------
NET ASSETS 100.0% $78,231
=======
PERCENTAGE OF
COUNTRY DIVERSIFICATION NET ASSETS
- --------------------------------------------------------------------------------
United States ...................................... 98.2%
United Kingdom ..................................... 1.0
Israel ............................................. 0.6
Other Assets and Liabilities, Net .................. 0.2
------
Total 100.0%
======
- --------------------------------------------------------------------------------
STRONG DISCOVERY FUND
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
- --------------------------------------------------------------------------------
COMMON STOCKS 90.5%
AEROSPACE & DEFENSE 1.0%
Greenwich Air Services, Inc. (b) 106,900 $ 2,084
Northrop Grumman Corporation 49,300 3,359
Sundstrand Corporation 8,000 293
------
5,736
AIRLINE 0.5%
America West Airlines, Inc. Class B (b) 40,350 888
Midwest Express Holdings, Inc. (b) 43,600 1,401
UAL Corporation (b) 10,200 548
------
2,837
AUTO & TRUCK PARTS 0.3%
Keystone Automotive Industries, Inc. (b) 29,100 302
Strattec Security Corporation (b) 15,400 273
Thompson PBE, Inc. (b) 112,750 1,353
------
1,928
AUTOMOBILE 0.0%
Daihatsu Motor Company, Ltd. 15,000 98
23
See notes to financial statements.
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES(continued) June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
STRONG DISCOVERY FUND (continued)
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
- --------------------------------------------------------------------------------
BANK - MONEY CENTER 2.2%
The Bank of Tokyo - Mitsubishi 365,700 $ 8,470
Chase Manhattan Corporation 5,628 397
Citicorp 21,600 1,785
Dai-Ichi Kangyo Bank, Ltd. Japan 76,000 1,414
Long-Term Credit Bank of Japan 77,000 596
------
12,662
BROKERAGE & INVESTMENT MANAGEMENT 1.0%
CWM Mortgage Holdings, Inc. 90,000 1,530
Nomura Securities Company, Ltd. 155,000 3,024
The Quick & Reilly Group, Inc. 39,900 1,297
------
5,851
CHEMICAL 0.8%
FMC Corporation (b) 69,000 4,502
CHEMICAL - SPECIALTY 1.5%
W.R. Grace & Company 108,050 7,658
Great Lakes Chemical Corporation 3,800 237
Praxair, Inc. 15,600 659
------
8,554
COMMERCIAL SERVICE 9.5%
Accustaff, Inc. (b) 503,850 13,730
Amresco, Inc. 30,000 514
Bacou U.S.A., Inc. (b) 224,600 3,987
Career Horizons, Inc. (b) 300,300 10,510
Consolidated Graphics, Inc. (b) 212,500 4,622
Corestaff, Inc. (b) 75,700 3,388
Corrections Corporation America (b) 10,000 700
HealthPlan Services Corporation (b) 24,900 573
Iron Mountain, Inc. (b) 170,000 3,570
Manpower, Inc. 129,050 5,065
PIA Merchandising Services, Inc. (b) 115,300 1,672
Romac International, Inc. (b) 40,600 1,035
Sensormatic Electronics Corporation 26,100 427
Sheridan Healthcare, Inc. (b) 322,500 3,064
Sitel Corporation (b) 9,700 407
Ultrak, Inc. (b) 75,200 1,288
Vallen Corporation (b) 53,000 927
------
55,479
COMPUTER - MAINFRAME 0.7%
International Business Machines Corporation 39,000 3,861
COMPUTER - PERIPHERAL EQUIPMENT 1.2%
Cerion Technologies, Inc. (b) 143,425 1,399
Micros Systems, Inc. (b) 148,200 4,131
Security Dynamics Technologies, Inc. (b) 5,400 444
U.S. Robotics, Inc. (b) 3,300 282
VideoServer, Inc. (b) 11,850 462
------
6,718
COMPUTER SERVICE 2.8%
America Online, Inc. (b) 84,950 3,717
Electronic Data Systems Corporation 94,800 5,095
Fiserv, Inc. (b) 57,800 1,734
Shared Medical Systems Corporation 4,600 295
Sykes Enterprises, Inc. (b) 107,000 5,270
------
16,111
COMPUTER SOFTWARE 6.0%
BMC Software, Inc. (b) 97,100 5,802
CBT Group PLC ADR (b) 21,300 985
Citrix Systems, Inc. (b) 17,000 646
Cognos, Inc. (b) 48,425 1,114
Computer Associates International, Inc. 21,400 1,525
Comshare, Inc. (b) 10,900 338
Cybercash, Inc. (b) 40,200 2,201
Electronic Arts, Inc. (b) 61,000 1,632
Enterprise Systems, Inc. (b) 3,800 104
Excite, Inc. (b) 98,900 828
Gemstar International Group, Ltd. (b) 150,100 4,503
Intuit, Inc. (b) 5,600 265
McAfee Associates, Inc. (b) 84,812 4,156
Mechanical Dynamics, Inc. (b) 16,600 251
National Instruments Corporation (b) 61,700 1,388
Netscape Communications Corporation (b) 9,500 591
Platinum Technology, Inc. (b) 51,900 785
Powercerv Corporation (b) 35,300 432
Saville Systems PLC Sponsored ADR (b) 24,000 663
Tecnomatix Technologies, Ltd. (b) 130,775 2,485
Vantive Corporation (b) 12,600 422
Visio Corporation (b) 14,600 526
Xylan Corporation (b) 28,200 1,311
Zebra Technologies Corporation (b) 99,000 1,757
------
34,710
COMPUTER SYSTEMS 2.4%
Imnet Systems, Inc. (b) 107,600 3,282
LanVision Systems, Inc. (b) 1,000 12
Oracle Systems Corporation (b) 26,600 1,049
System Software Associates, Inc. 501,387 8,523
Verifone, Inc. (b) 31,900 1,348
------
14,214
CONSUMER - MISCELLANEOUS 0.6%
Canon, Inc. 96,000 1,996
Service Corporation International 21,500 1,236
------
3,232
COSMETIC & PERSONAL CARE 1.4%
Jenny Craig, Inc. (b) 24,350 435
Parlux Fragrances, Inc. (b) 770,275 7,799
------
8,234
DIVERSIFIED OPERATIONS 0.0%
Allied Products Corporation 4,500 128
ELECTRICAL EQUIPMENT 0.6%
Methode Electronics, Inc. Class A 119,100 2,025
Toshiba Corporation 37,000 263
Westinghouse Electric Corporation 60,600 1,136
------
3,424
ELECTRONIC PARTS DISTRIBUTION 0.8%
Anixter International, Inc. (b) 32,500 484
Kent Electronics Corporation (b) 39,500 1,234
Marshall Industries (b) 93,275 2,612
Richey Electronics, Inc. (b) 12,200 143
------
4,473
ELECTRONIC PRODUCTS - MISCELLANEOUS 0.3%
General Motors Corporation Class H 10,200 613
Hitachi, Ltd. 38,000 354
Universal Electronics, Inc. (b) 44,800 521
------
1,488
ELECTRONICS - SEMICONDUCTOR/COMPONENT 0.6%
Computer Products, Inc. (b) 28,500 488
Intel Corporation 15,800 1,160
Motorola, Inc. 5,000 314
Transwitch Corporation (b) 75,075 995
Uniphase Corporation (b) 20,700 735
------
3,692
FINANCE - MISCELLANEOUS 1.5%
American Express Company 7,600 339
Checkfree Corporation (b) 26,450 526
Medaphis Corporation (b) 202,400 8,045
------
8,910
HEALTHCARE - BIOMEDICAL/GENETIC 0.3%
Curative Technologies, Inc. (b) 4,800 126
Neurocrine Biosciences, Inc. (b) 204,600 1,816
------
1,942
24
See notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
STRONG DISCOVERY FUND (continued)
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
- --------------------------------------------------------------------------------
HEALTHCARE - DRUG/DIVERSIFIED 3.9%
Dura Pharmaceuticals, Inc. (b) 173,175 $ 9,698
Halsey Drug Company, Inc. (b) 412,600 2,372
Pharmacia & Upjohn, Inc. 219,125 9,724
Teva Pharmaceutical Industries, Ltd. ADR 19,200 727
------
22,521
HEALTHCARE - INSTRUMENTATION 1.4%
Biopsys Medical, Inc. (b) 67,400 1,348
Datascope Corporation (b) 170,700 3,030
FemRx, Inc. (b) 277,300 2,998
St. Jude Medical, Inc. (b) 19,900 667
------
8,043
HEALTHCARE - MEDICAL SUPPLY 6.0%
Cardinal Health, Inc. 37,100 2,676
Cohr, Inc. (b) 3,400 81
Dentsply International, Inc. 54,700 2,325
Gulf South Medical Supply, Inc. (b) 41,600 1,622
Laboratory Corporation of America Holdings
Warrants, Expire 4/28/00 (b) 30,414 15
McKesson Corporation 136,600 6,506
Omnicare, Inc. 240,000 6,360
Patterson Dental Company (b) 7,000 254
Henry Schein, Inc. (b) 125,100 4,785
Steris Corporation (b) 110,500 3,536
Sybron International Corporation (b) 262,100 6,552
------
34,712
HEALTHCARE - PATIENT CARE 2.8%
Healthsource, Inc. (b) 111,700 1,955
Humana, Inc. (b) 313,600 5,606
Medpartners/Mullikin, Inc. (b) 194,250 4,055
Ornda Healthcorp (b) 133,500 3,204
Raytel Medical Group (b) 27,100 345
United Dental Care, Inc. (b) 30,600 1,293
------
16,458
HEALTHCARE - PRODUCT 1.3%
Cytyc Corporation (b) 147,300 3,811
Nellcor Puritan Bennett, Inc. (b) 62,300 3,022
Pall Corporation 27,000 651
------
7,484
HOUSEHOLD - APPLIANCES & FURNISHINGS 1.1%
Fedders Corporation Class A 597,500 3,510
Matsushita-Kotobuki Electronics Industries, Ltd. 12,000 313
Tupperware Corporation (b) 67,700 2,861
------
6,684
HOUSING 0.1%
Southern Energy Homes, Inc. (b) 35,600 765
INSURANCE - PROPERTY & CASUALTY 0.4%
Risk Capital Holdings, Inc. (b) 128,325 2,518
LEISURE PRODUCT 2.6%
Custom Chrome, Inc. (b) 249,550 6,707
Harley-Davidson, Inc. 189,800 7,805
Hasbro, Inc. 12,275 439
------
14,951
LEISURE SERVICE 2.9%
Carmike Cinemas, Inc. (b) 4,050 109
Casino Data Systems (b) 37,800 572
The Walt Disney Company 121,725 7,653
Grand Casinos, Inc. (b) 28,000 721
Harrahs Entertainment, Inc. (b) 33,350 942
MGM Grand, Inc. (b) 77,400 3,086
Premier Parks, Inc. (b) 6,400 139
Promus Hotel Corporation (b) 12,575 373
Sholodge, Inc. (b) 81,400 1,018
Stratosphere Corporation (b) 366,100 2,197
------
16,810
MACHINE TOOL 0.3%
Applied Power, Inc. 62,775 1,758
MEDIA - PUBLISHING 0.2%
Scholastic Corporation (b) 22,700 1,407
MEDIA - RADIO/TV 1.1%
Children's Broadcasting Corporation (b) 215,000 1,505
Clear Channel Communications, Inc. (b) 39,300 3,237
Evergreen Media Corporation Class A (b) 29,600 1,266
SFX Broadcasting, Inc. Class A (b) 3,000 117
Sinclair Broadcast Group, Inc. Class A (b) 1,100 48
------
6,173
NATURAL GAS DISTRIBUTION 0.2%
WICOR, Inc. 32,500 1,227
OFFICE AUTOMATION 3.8%
Danka Business Systems PLC Sponsored ADR 294,200 8,605
Nu-Kote Holding, Inc. Class A (b) 694,500 11,546
Xerox Corporation 40,400 2,162
------
22,313
OIL - NORTH AMERICAN EXPLORATION &
PRODUCTION 4.7%
Cairn Energy USA, Inc. (b) 9,900 142
Flores & Rucks, Inc. (b) 385,600 13,303
Nuevo Energy Company (b) 10,200 329
Triton Energy, Ltd. (b) 149,225 7,256
Union Pacific Resources Group, Inc. 90,000 2,408
United Meridian Corporation (b) 101,300 3,647
------
27,085
OIL WELL EQUIPMENT & SERVICE 0.1%
Global Marine, Inc. (b) 51,400 713
Pride Petroleum Services, Inc. (b) 10,450 149
------
862
PAPER & FOREST PRODUCTS 0.3%
Fort Howard Corporation (b) 103,210 2,051
PERSONAL & COMMERCIAL LENDING 1.3%
Associates First Capital Corporation (b) 152,800 5,749
Mercury Finance Company 79,150 1,009
National Auto Credit, Inc. (b) 81,600 929
------
7,687
POLLUTION CONTROL 0.3%
Allied Waste Industries, Inc. (b) 208,800 1,853
United Waste Systems, Inc. (b) 5,900 190
------
2,043
RAILROAD 0.1%
Burlington Northern Santa Fe Corporation 10,717 867
RETAIL - DEPARTMENT STORE 1.1%
Federated Department Stores, Inc. (b) 195,050 6,656
RETAIL - DISCOUNT & VARIETY 1.1%
Consolidated Stores Corporation (b) 169,250 6,220
RETAIL - DRUG STORE 1.2%
Rite Aid Corporation 236,200 7,027
RETAIL - FOOD CHAIN 0.1%
Whole Foods Marketing, Inc. (b) 12,600 334
RETAIL - RESTAURANT 1.4%
Casa Ole Restaurants, Inc. (b) 82,300 1,126
Longhorn Steaks, Inc. (b) 57,200 1,430
Outback Steakhouse, Inc. (b) 45,400 1,566
Quality Dining, Inc. (b) 83,200 2,725
Rainforest Cafe, Inc. (b) 28,400 1,420
------
8,267
RETAIL - SPECIALTY 8.9%
CUC International, Inc. (b) 863,075 30,639
Casey's General Stores, Inc. 26,400 525
Central Garden and Pet Company (b) 380,200 6,843
Claire's Stores, Inc. 59,700 1,649
Corporate Express, Inc. (b) 126,675 5,067
Global Directmail Corporation (b) 40,100 1,584
Goody's Family Clothing, Inc. (b) 28,600 293
25
See notes to financial statements.
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES(continued) June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
STRONG DISCOVERY FUND (continued)
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
- --------------------------------------------------------------------------------
MSC Industrial Direct Company A (b) 38,200 $ 1,232
Marks Brothers Jewelers, Inc. (b) 30,900 703
Movie Gallery, Inc. (b) 121,900 2,560
Office Depot, Inc. (b) 5,200 106
Staples, Inc. (b) 18,750 366
------
51,567
SHOE & APPAREL MANUFACTURING 0.1%
Sankyo Seiki Manufacturing (b) 42,000 347
TELECOMMUNICATION EQUIPMENT 1.3%
Belden, Inc. 112,050 3,361
InterVoice, Inc. (b) 5,600 111
Loral Space & Communications (b) 197,200 2,687
Nokia Corporation ADR 44,800 1,658
------
7,817
TELECOMMUNICATION SERVICE 3.6%
Comsat Corporation 411,400 10,696
IDT Corporation (b) 30,300 292
Intermedia Communications, Inc. (b) 6,650 215
LCI International, Inc. (b) 21,400 671
McLeod, Inc. (b) 6,100 146
Mobile Telecommunication Technologies
Corporation (b) 49,350 722
Paging Network, Inc. (b) 77,300 1,855
Premiere Technologies, Inc. (b) 192,500 6,064
------
20,661
TRANSPORTATION SERVICE 0.8%
Coach USA, Inc. (b) 109,100 2,427
Fritz Companies, Inc. (b) 31,400 1,013
Hub Group, Inc. Class A (b) 61,300 1,249
------
4,689
-------
TOTAL COMMON STOCKS (COST $518,457) 526,788
CONVERTIBLE BONDS 0.4%
Bangkok Bank PCL Subordinated Notes, 3.25%,
Due 3/03/04 (Acquired 5/30/96; Cost $1,231) (d) $ 1,013 1,157
Corporate Express, Inc. Subordinated Notes, 4.50%,
Due 7/01/00 (Acquired 6/19/96; Cost $940) (d) 940 930
------
TOTAL CONVERTIBLE BONDS (COST $2,169) 2,087
SHORT-TERM INVESTMENTS (a) 5.0%
COMMERCIAL PAPER 4.8%
DISCOUNTED 4.7%
Newell Company, Due 7/01/96 27,300 27,300
INTEREST BEARING, DUE UPON DEMAND 0.1%
General Mills, Inc., 5.14% 185 185
Johnson Controls, Inc., 5.17% 276 276
Wisconsin Electric Power Company, 5.19% 23 23
------
484
------
Total Commercial Paper 27,784
UNITED STATES GOVERNMENT ISSUES 0.2%
United States Treasury Bills:
Due 9/19/96 500 494
Due 9/26/96 850 840
------
1,334
------
TOTAL SHORT-TERM INVESTMENTS
(COST $29,118) 29,118
------
TOTAL INVESTMENTS IN SECURITIES
(COST $549,744) 95.9% 557,993
Other Assets and Liabilities, Net 4.1% 23,917
-------
NET ASSETS 100.0% $581,910
========
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
- -------------------------------------------
VALUE UNREALIZED
SETTLEMENT IN USD APPRECIATION
DATE (In Thousands) (In Thousands)
- --------------------------------------------------------------------------------
Sold:
1,888,678,000 JPY 8/13/96 ($17,338) $875
TRANSACTIONS WITH AFFILIATED COMPANIES
- --------------------------------------
REALIZED DIVIDEND
GAIN/LOSS INCOME MARKET VALUE
AFFILIATE (In Thousands) (In Thousands) (In Thousands)
- --------------------------------------------------------------------------------
Parlux Fragrances, Inc. $ -- -- $7,799
Sheridan Healthcare, Inc. (141) -- 3,064
PERCENTAGE OF
COUNTRY DIVERSIFICATION NET ASSETS
- --------------------------------------------------------------------------------
United States ....................................... 89.4%
Japan ............................................... 2.9
United Kingdom ...................................... 1.5
Hong Kong ........................................... 1.0
Israel .............................................. 0.6
Finland ............................................. 0.3
Ireland ............................................. 0.2
Other Assets and Liabilities, Net ................... 4.1
---
Total 100.0%
=====
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) The Funds may engage in repurchase agreements where the underlying
collateral consists of U.S. Government securities which are maintained in a
segregated account with a custodian. The market value of the collateral
must exceed the principal amount by at least two percent on a daily basis.
All principal amounts and costs are stated in thousands.
Percentages are stated as a percent of net assets.
CURRENCY ABBREVIATIONS
- ----------------------
DEM German Deutschemark
JPY Japanese Yen
26
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------------
For the Six Months Ended June 30, 1996 (Unaudited) (Note 1) (In Thousands)
STRONG STRONG STRONG
VALUE FUND OPPORTUNITY FUND GROWTH FUND
---------- ---------------- -----------
<S> <C> <C> <C>
INCOME:
Dividends $ 107 $ 9,291 $ 858
Interest 142 5,269 1,494
--- ----- -----
Total Income 249 14,560 2,352
EXPENSES:
Investment Advisory Fees 73 7,441 4,218
Custodian Fees 3 120 54
Shareholder Servicing Costs 18 1,416 961
Reports to Shareholders 21 355 277
Other 7 140 73
- --- --
Total Expenses 122 9,472 5,583
--- ----- -----
NET INVESTMENT INCOME (LOSS) 127 5,088 (3,231)
REALIZED AND UNREALIZED GAIN (LOSS):
Net Realized Gain (Loss) on:
Investments 148 87,042 49,674
Futures Contracts, Options and Forward Foreign Currency Contracts -- (6,334) (756)
Foreign Currencies -- 1 --
Change in Unrealized Appreciation/Depreciation on:
Investments 513 19,274 81,879
Futures Contracts, Options and Forward Foreign Currency Contracts -- (227) (2)
Foreign Currencies -- (11) --
--- ----- -----
NET GAIN 661 99,745 130,795
--- ------ -------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 788 $104,833 $127,564
======= ======== ========
STRONG COMMON STRONG SMALL STRONG
STOCK FUND CAP FUND DISCOVERY FUND
---------- -------- --------------
<S> <C> <C> <C>
INCOME:
Dividends $ 5,156 $ 64 $ 434
Interest 3,405 163 2,533
----- --- -----
Total Income 8,561 227 2,967
EXPENSES:
Investment Advisory Fees 5,595 167 2,903
Custodian Fees 105 16 126
Shareholder Servicing Costs 700 32 688
Reports to Shareholders 341 46 204
Other 89 12 143
-- -- ---
Total Expenses 6,830 273 4,064
----- --- -----
NET INVESTMENT INCOME (LOSS) 1,731 (46) (1,097)
REALIZED AND UNREALIZED GAIN (LOSS):
Net Realized Gain (Loss) on:
Investments 74,142 661 30,540
Futures Contracts, Options and Forward Foreign Currency Contracts (4,884) -- (13,925)
Foreign Currencies 2 -- --
Change in Unrealized Appreciation/Depreciation on:
Investments 14,747 1,444 (22,939)
Futures Contracts, Options and Forward Foreign Currency Contracts (108) -- (2,572)
Foreign Currencies (9) -- (4)
-- ----- --
NET GAIN (LOSS) 83,890 2,105 (8,900)
------ ----- ------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $85,621 $ 2,059 ($ 9,997)
======= ======== =========
27
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES
- ---------------------------------------------------------------------------------------------------------------------------
June 30, 1996 (Unaudited) (In Thousands, Except Per Share Amounts)
STRONG STRONG STRONG
VALUE FUND OPPORTUNITY FUND GROWTH FUND
---------- ---------------- -----------
<S> <C> <C> <C>
ASSETS:
Investments in Securities, at Value (Cost of $36,698,
$1,369,655 and $943,765, respectively) $ 37,211 $1,624,823 $1,154,615
Receivable from Brokers for Securities and
Forward Foreign Currency Contracts Sold -- 18,109 8,485
Dividends and Interest Receivable 30 1,692 103
Other Assets 51 -- 396
-- ---- ---
Total Assets 37,292 1,644,624 1,163,599
LIABILITIES:
Payable to Brokers for Securities Purchased 3,997 1,257 48,451
Accrued Operating Expenses and Other Liabilities 67 1,512 983
-- ----- ---
Total Liabilities 4,064 2,769 49,434
----- ----- ------
NET ASSETS $ 33,228 $1,641,855 $1,114,165
========== ========== ==========
Capital Shares
Authorized 300,000 100,000 300,000
Outstanding 3,014 46,402 59,709
NET ASSET VALUE PER SHARE $ 11.02 $ 35.38 $ 18.66
======== ========= =========
STRONG COMMON STRONG SMALL STRONG
STOCK FUND CAP FUND DISCOVERY FUND
---------- -------- --------------
<S> <C> <C> <C>
ASSETS:
Investments in Securities, at Value (Cost of $990,651,
76,599 and $549,744, respectively) $1,157,856 $ 78,043 $ 557,993
Receivable from Brokers for Securities and
Forward Foreign Currency Contracts Sold 8,026 949 34,580
Dividends and Interest Receivable 538 13 3,198
Other Assets 487 436 80
--- --- --
Total Assets 1,166,907 79,441 595,851
LIABILITIES:
Payable to Brokers for Securities Purchased 15,521 1,074 13,338
Accrued Operating Expenses and Other Liabilities 1,266 136 603
----- --- ---
Total Liabilities 16,787 1,210 13,941
------ ----- ------
NET ASSETS $1,150,120 $ 78,231 $ 581,910
========== ========== ==========
Capital Shares
Authorized 300,000 300,000 1,000,000
Outstanding 56,060 6,277 34,013
NET ASSET VALUE PER SHARE $ 20.52 $ 12.46 $ 17.11
========= ========= =========
28
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------------
For the Six Months Ended June 30, 1996 (Unaudited) and the Year Ended December 31, 1995 (Note 1)
(In Thousands)
STRONG
VALUE FUND STRONG OPPORTUNITY FUND STRONG GROWTH FUND
---------- ----------------------- ------------------
JUNE 30, 1996 JUNE 30, 1996 DEC. 31, 1995 JUNE 30, 1996 DEC. 31, 1995
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net Investment Income (Loss) $ 127 $ 5,088 $ 7,106 ($ 3,231) ($ 1,860)
Net Realized Gain 148 80,709 67,590 48,918 8,083
Change in Unrealized Appreciation 513 19,036 186,713 81,877 122,479
--- ------ ------- ------ -------
Increase in Net Assets
Resulting from Operations 788 104,833 261,409 127,564 128,702
CAPITAL SHARE TRANSACTIONS 32,564 230,346 329,001 343,895 426,979
DISTRIBUTIONS:
From Net Investment Income (124) (7,578) (7,106) (79) --
In Excess of Net Investment Income -- -- (420) -- (1,160)
From Net Realized Gains -- (13,406) (60,924) (37) (6,171)
In Excess of Net Realized Gains -- -- -- -- (11,537)
------ ------- ------- ------- --------
TOTAL INCREASE IN NET ASSETS 33,228 314,195 521,960 471,343 536,813
NET ASSETS:
Beginning of Period -- 1,327,660 805,700 642,822 106,009
------- --------- ------- ------- -------
End of Period $33,228 $1,641,855 $1,327,660 $1,114,165 $642,822
======= ========== ========== ========== ========
STRONG SMALL
STRONG COMMON STOCK FUND CAP FUND STRONG DISCOVERY FUND
------------------------ -------- ---------------------
JUNE 30, 1996 DEC. 31, 1995 JUNE 30, 1996 JUNE 30, 1996 DEC. 31, 1995
------------- ------------- ------------- ------------- -------------
OPERATIONS:
Net Investment Income (Loss) $ 1,731 $ 4,919 ($ 46) ($ 1,097) ($ 1,909)
Net Realized Gain 69,260 142,556 661 16,615 96,222
Change in Unrealized
Appreciation/Depreciation 14,630 106,914 1,444 (25,515) 44,159
------ ------- ----- ------- ------
Increase in Net Assets
Resulting from Operations 85,621 254,389 2,059 (9,997) 138,472
CAPITAL SHARE TRANSACTIONS 47,967 129,341 76,192 39,382 133,177
DISTRIBUTIONS:
From Net Investment Income (4,223) (4,919) (20) (10,272) --
In Excess of Net Investment Income -- (729) -- (17,605) (2,868)
From Net Realized Gains (40,255) (107,197) -- (18,658) (58,131)
------- -------- ------ ------- -------
TOTAL INCREASE (DECREASE) IN NET ASSETS 89,110 270,885 78,231 (17,150) 210,650
NET ASSETS:
Beginning of Period 1,061,010 790,125 -- 599,060 388,410
--------- ------- ---------- ------- -------
End of Period $1,150,120 $1,061,010 $ 78,231 $ 581,910 $599,060
========== ========== ========== ========== ========
29
</TABLE>
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
June 30, 1996 (Unaudited)
1. ORGANIZATION
The accompanying financial statements represent the Strong Growth Funds,
which include the following diversified, open-end management investment
companies registered under the Investment Company Act of 1940:
- Strong Value Fund (a series of Strong Equity Funds, Inc.)
- Strong Opportunity Fund, Inc.
- Strong Growth Fund (a series of Strong Equity Funds, Inc.)
- Strong Common Stock Fund, Inc.
- Strong Small Cap Fund (a series of Strong Equity Funds, Inc.)
- Strong Discovery Fund, Inc.
The inception date for the Strong Value Fund and the Strong Small Cap Fund
was December 29, 1995.
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 between the latest bid and asked prices where 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 cost and fair value of these
restricted securities held at June 30, 1996 were as follows (in
thousands):
<TABLE>
<CAPTION>
<S> <C> <C>
STRONG STRONG
OPPORTUNITY FUND GROWTH FUND
---------------- -----------
Aggregate Cost $2,194 $1,000
Aggregate Fair Value 4,741 1,000
Percent of Net Assets 0.3% 0.1%
</TABLE>
<TABLE>
<CAPTION>
STRONG COMMON STRONG SMALL STRONG
STOCK FUND CAP FUND DISCOVERY FUND
---------- -------- --------------
<S> <C> <C> <C>
Aggregate Cost $11,500 $465 $2,171
Aggregate Fair Value 17,142 465 2,087
Percent of Net Assets 1.5% 0.6% 0.4%
</TABLE>
(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, U.S. government securities or other liquid,
high-grade debt obligations 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.
(E) Options -- 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.
30
<PAGE>
- --------------------------------------------------------------------------------
(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) Additional Investment Risk -- The use of futures contracts, options,
foreign denominated assets and forward foreign currency exchange
contracts for purposes of hedging the Funds' investment portfolios
involves, to varying degrees, elements of market risk in excess of the
amount recognized in the statement of assets and liabilities. The
predominant risk with futures contracts is an imperfect correlation
between the value of the contracts and the underlying securities.
Foreign denominated assets and forward foreign currency exchange
contracts may involve greater risks than domestic transactions,
including currency, political and economic, regulatory and market
risks.
(I) 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 premium and discounts.
3. NET ASSETS
Net assets as of June 30, 1996 were as follows (in thousands):
<TABLE>
<CAPTION>
STRONG STRONG STRONG
VALUE FUND OPPORTUNITY FUND GROWTH FUND
---------- ---------------- -----------
<S> <C> <C> <C>
Capital Stock $ 32,564 $1,308,733 $ 872,301
Undistributed Net Investment Income (Loss) 3 (1,427) (3,239)
Undistributed Net Realized Gain 148 79,132 34,253
Net Unrealized Appreciation 513 255,417 210,850
--- ------- -------
$ 33,228 $1,641,855 $1,114,165
========== ========== ==========
STRONG COMMON STRONG SMALL STRONG
STOCK FUND CAP FUND DISCOVERY FUND
---------- -------- --------------
<S> <C> <C> <C>
Capital Stock $ 914,125 $ 76,192 $ 581,873
Undistributed Net Investment Loss (1,821) (66) (8,719)
Undistributed Net Realized Gain (Loss) 70,180 661 (364)
Net Unrealized Appreciation 167,636 1,444 9,120
------- ----- -----
$1,150,120 $ 78,231 $ 581,910
========== ========== ==========
</TABLE>
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Funds for the six months ended June 30, 1996
and the year ended December 31, 1995 were as follows (in thousands):
1996 1995
---- ----
SHARES DOLLARS SHARES DOLLARS
------ ------- ------ -------
STRONG VALUE FUND
Shares Sold 3,166 $ 34,233
Dividends Reinvested 11 120
Shares Redeemed (163) (1,789)
---- ------
3,014 $ 32,564
===== ========
STRONG OPPORTUNITY FUND
Shares Sold 12,364 $430,827 18,368 $563,647
Dividends Reinvested 585 20,282 2,037 66,138
Shares Redeemed (6,351) (220,763) (9,679) (300,784)
------ -------- ------ --------
6,598 $230,346 10,726 $329,001
===== ======== ====== ========
STRONG GROWTH FUND
Shares Sold 29,059 $512,156 41,849 $575,998
Dividends Reinvested 7 113 1,180 18,423
Shares Redeemed (9,836) (168,374) (11,681) (167,442)
------ -------- ------- --------
19,230 $343,895 31,348 $426,979
====== ======== ====== ========
31
<PAGE>
NOTES TO FINANCIAL STATEMENTS(continued)
- --------------------------------------------------------------------------------
June 30, 1996 (Unaudited)
4. CAPITAL SHARE TRANSACTIONS (CONTINUED)
1996 1995
---- ----
SHARES DOLLARS SHARES DOLLARS
------ ------- ------ -------
STRONG COMMON STOCK FUND
Shares Sold 5,638 $115,215 9,453 $182,025
Dividends Reinvested 2,144 43,490 5,653 110,159
Shares Redeemed (5,401) (110,738) (8,613) (162,843)
------ -------- ------ --------
2,381 $ 47,967 6,493 $129,341
===== ======== ===== ========
STRONG SMALL CAP FUND
Shares Sold 7,716 $ 94,135
Dividends Reinvested 2 19
Shares Redeemed (1,441) (17,962)
------ -------
6,277 $ 76,192
===== ========
STRONG DISCOVERY FUND
Shares Sold 13,376 $242,503 21,180 $394,018
Dividends Reinvested 2,678 45,448 3,156 59,230
Shares Redeemed (13,637) (248,569) (17,524) (320,071)
------- -------- ------- --------
2,417 $ 39,382 6,812 $133,177
===== ======== ===== ========
5. RELATED PARTY TRANSACTIONS
Strong Capital Management, Inc. (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 annualized rates of 1.00% of the average daily net
assets of the Funds. Advisory fees are subject to reimbursement by the
Advisor if the Funds' 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.
Certain information regarding related party transactions for the six months
ended June 30, 1996 is as follows (in thousands):
<TABLE>
<CAPTION>
STRONG STRONG STRONG
VALUE FUND OPPORTUNITY FUND GROWTH FUND
---------- ---------------- -----------
<S> <C> <C> <C>
Payable to Advisor at June 30, 1996 $46 $1,317 $948
Other Shareholder Servicing
Expenses Paid to Advisor -- 26 23
Unaffiliated Directors' Fees -- 11 6
STRONG COMMON STRONG SMALL STRONG
STOCK FUND CAP FUND DISCOVERY FUND
---------- -------- --------------
Payable to Advisor at June 30, 1996 $897 $88 $465
Other Shareholder Servicing
Expenses Paid to Advisor 17 1 15
Unaffiliated Directors' Fees 9 -- 6
</TABLE>
6. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of long-term securities during the six
months ended June 30, 1996 were as follows (in thousands):
<TABLE>
<CAPTION>
STRONG STRONG STRONG
VALUE FUND OPPORTUNITY FUND GROWTH FUND
---------- ---------------- -----------
<S> <C> <C> <C>
Purchases:
U.S. Government and Agency $ -- $ -- $ --
Other 26,103 823,390 1,224,596
Sales:
U.S. Government and Agency -- -- --
Other 3,708 657,419 957,898
STRONG COMMON STRONG SMALL STRONG
STOCK FUND CAP FUND DISCOVERY FUND
---------- -------- --------------
Purchases:
U.S. Government and Agency $ -- $ 3,514 $ 684,659
Other 452,556 89,126 2,122,463
Sales:
U.S. Government and Agency -- 3,243 793,674
Other 434,798 21,440 2,050,576
</TABLE>
32
<PAGE>
- --------------------------------------------------------------------------------
7. INCOME TAX INFORMATION
At June 30, 1996, the investment cost and gross unrealized appreciation and
depreciation on investments and for Federal income tax purposes were as
follows (in thousands):
<TABLE>
<CAPTION>
STRONG STRONG STRONG
VALUE FUND OPPORTUNITY FUND GROWTH FUND
---------- ---------------- -----------
<S> <C> <C> <C>
Aggregate Investment Cost $ 36,699 $1,370,920 $950,019
======== ========== ========
Aggregate Unrealized:
Appreciation $ 1,001 $ 283,688 $226,738
Depreciation (489) (29,728) (22,142)
---- ------- -------
$ 512 $ 253,960 $204,596
======== ========== ========
STRONG COMMON STRONG SMALL STRONG
STOCK FUND CAP FUND DISCOVERY FUND
---------- -------- --------------
Aggregate Investment Cost $992,188 $ 76,781 $551,853
======== ========== ========
Aggregate Unrealized:
Appreciation $204,367 $ 5,335 $ 44,413
Depreciation (38,699) (4,073) (38,273)
------- ------ -------
$165,668 $ 1,262 $ 6,140
======== ========== ========
33
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following presents information relating to a share of capital stock of each
of the Funds, outstanding for the entire period.
STRONG VALUE FUND 1996(a)
-------
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net Investment Income 0.06
Net Realized and Unrealized Gains
on Investments 1.01
----
TOTAL FROM INVESTMENT OPERATIONS 1.07
LESS DISTRIBUTIONS
- ------------------
From Net Investment Income (0.05)
-----
TOTAL DISTRIBUTIONS (0.05)
-----
NET ASSET VALUE, END OF PERIOD $ 11.02
=========
Total Return +10.7%
Net Assets, End of Period (In Thousands) $ 33,228
Ratio of Expenses to Average Net Assets 1.6%*
Ratio of Net Investment Income to Average Net Assets 1.7%*
Portfolio Turnover Rate 29.9%
Average Commission Rate Paid(b) $ 0.0507
<TABLE>
<CAPTION>
STRONG OPPORTUNITY FUND 1996(c) 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 33.35 $ 27.71 $ 28.23 $ 24.70 $ 21.24 $ 16.29
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net Investment Income 0.12 0.20 0.13 0.06 0.06 0.21
Net Realized and Unrealized Gains
(Losses) on Investments 2.40 7.28 0.76 5.10 3.62 4.93
---- ---- ---- ---- ---- ----
TOTAL FROM INVESTMENT OPERATIONS 2.52 7.48 0.89 5.16 3.68 5.14
LESS DISTRIBUTIONS
- ------------------
From Net Investment Income (0.17) (0.20) (0.13) (0.06) (0.06) (0.19)
In Excess of Net Investment Income -- (0.01) -- -- -- --
From Net Realized Gains (0.32) (1.63) (1.28) (1.57) (0.16) --
Return of Capital -- -- -- -- -- --
---- ---- ---- ---- ---- ----
TOTAL DISTRIBUTIONS (0.49) (1.84) (1.41) (1.63) (0.22) (0.19)
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 35.38 $ 33.35 $ 27.71 $ 28.23 $ 24.70 $ 21.24
========= ========= ========= ========= ========= =========
Total Return +7.6% +27.3% +3.2% +21.2% +17.4% +31.7%
Net Assets, End of Period (In Thousands) $1,641,855 $1,327,660 $ 805,700 $ 443,503 $ 193,208 $ 159,667
Ratio of Expenses to Average Net Assets 1.3%* 1.3% 1.4% 1.4% 1.5% 1.7%
Ratio of Net Investment Income to Average Net Assets 0.7%* 0.7% 0.5% 0.2% 0.3% 1.1%
Portfolio Turnover Rate 50.0% 92.5% 59.2% 109.1% 138.5% 270.5%
Average Commission Rate Paid(b) $ 0.0495
<CAPTION>
1990 1989 1988 1987
---- ---- ---- ----
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 19.21 $ 16.90 $ 15.87 $ 15.99
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net Investment Income 0.63 0.84 1.35 0.27
Net Realized and Unrealized Gains
(Losses) on Investments (2.77) 2.31 1.23 1.65
----- ---- ---- ----
TOTAL FROM INVESTMENT OPERATIONS (2.14) 3.15 2.58 1.92
LESS DISTRIBUTIONS
- ------------------
From Net Investment Income (0.74) (0.68) (1.37) (0.24)
In Excess of Net Investment Income -- -- -- --
From Net Realized Gains (0.04) (0.16) -- (1.80)
Return of Capital -- -- (0.18) --
----- ---- ---- ----
TOTAL DISTRIBUTIONS (0.78) (0.84) (1.55) (2.04)
----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 16.29 $ 19.21 $ 16.90 $ 15.87
========= ========= ========= =========
Total Return - 11.3% +18.5% +16.5% +11.9%
Net Assets, End of Period (In Thousands) $ 131,919 $ 205,043 $ 157,353 $ 153,573
Ratio of Expenses to Average Net Assets 1.7% 1.6% 1.6% 1.5%
Ratio of Net Investment Income to Average Net Assets 3.3% 4.3% 7.4% 1.7%
Portfolio Turnover Rate 275.0% 305.6% 352.4% 371.2%
Average Commission Rate Paid(b)
</TABLE>
* Calculated on an annualized basis.
(a) For the six months ended June 30, 1996 (Unaudited). Inception date is
December 29, 1995. Total return and portfolio turnover rate are not
annualized.
(b) Disclosure required, effective for reporting periods beginning after
September 1, 1995.
(c) For the six months ended June 30, 1996 (Unaudited). Total return and
portfolio turnover rate are not annualized.
34
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (continued)
- ---------------------------------------------------------------------------------------------------------------------------
STRONG GROWTH FUND 1996(a) 1995 1994
------- ---- ----
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.88 $ 11.61 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net Investment Loss (0.05) (0.04) --
Net Realized and Unrealized Gains
on Investments 2.83 4.79 1.72
---- ---- ----
TOTAL FROM INVESTMENT OPERATIONS 2.78 4.75 1.72
LESS DISTRIBUTIONS
- ------------------
In Excess of Net Investment Income -- (0.03) (0.11)
From Net Realized Gains -- (0.16) --
In Excess of Net Realized Gains -- (0.29) --
---- ---- ----
TOTAL DISTRIBUTIONS 0.00 (0.48) (0.11)
---- ----- -----
NET ASSET VALUE, END OF PERIOD $ 18.66 $ 15.88 $ 11.61
========= ========= =========
Total Return +17.5% +41.0% +17.3%
Net Assets, End of Period (In Thousands) $1,114,165 $ 642,822 $ 106,009
Ratio of Expenses to Average Net Assets 1.3%* 1.4% 1.6%
Ratio of Net Investment Income to Average Net Assets (0.8%)* (0.5%) (0.1%)
Portfolio Turnover Rate 119.2% 321.2% 385.8%
Average Commission Rate Paid(b) $ 0.0669
</TABLE>
<TABLE>
<CAPTION>
STRONG COMMON STOCK FUND 1996(a) 1995 1994 1993 1992 1991
------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 19.77 $ 16.74 $ 17.94 $ 15.07 $ 12.84 $ 10.02
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net Investment Income (Loss) 0.03 0.11 0.04 0.04 0.03 (0.02)
Net Realized and Unrealized Gains
(Losses) on Investments 1.55 5.25 (0.13) 3.74 2.59 5.42
---- ---- ----- ---- ---- ----
TOTAL FROM INVESTMENT OPERATIONS 1.58 5.36 (0.09) 3.78 2.62 5.40
LESS DISTRIBUTIONS
- ------------------
From Net Investment Income (0.08) (0.10) (0.04) (0.04) (0.01) --
In Excess of Net Investment Income -- (0.02) -- -- -- --
From Net Realized Gains (0.75) (2.21) (1.07) (0.87) (0.38)(c) (2.58)(d)
----- ----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (0.83) (2.33) (1.11) (0.91) (0.39) (2.58)
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 20.52 $ 19.77 $ 16.74 $ 17.94 $ 15.07 $ 12.84
========== ========= ========= ========= ========= =========
Total Return +8.0% +32.4% -0.5% +25.2% +20.8% +57.1%
Net Assets, End of Period (In Thousands) $1,150,120 $1,061,010 $ 790,125 $ 762,086 $ 179,113 $ 48,549
Ratio of Expenses to Average Net Assets 1.2%* 1.2% 1.3% 1.4% 1.4% 2.0%
Ratio of Net Investment Income to Average Net Assets 0.3%* 0.5% 0.3% 0.2% 0.1% (0.5%)
Portfolio Turnover Rate 43.1% 91.5% 83.0% 80.9% 291.7% 2,460.7%
Average Commission Rate Paid(b) $ 0.0439
</TABLE>
1990
----
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net Investment Income (Loss) 0.07
Net Realized and Unrealized Gains
(Losses) on Investments 0.03
----
TOTAL FROM INVESTMENT OPERATIONS 0.10
LESS DISTRIBUTIONS
- ------------------
From Net Investment Income (0.08)
In Excess of Net Investment Income --
From Net Realized Gains --
TOTAL DISTRIBUTIONS (0.08)
-----
NET ASSET VALUE, END OF PERIOD $ 10.02
=========
Total Return +1.0%
Net Assets, End of Period (In Thousands) $ 2,432
Ratio of Expenses to Average Net Assets 2.0%
Ratio of Net Investment Income to Average Net Assets 0.9%
Portfolio Turnover Rate 291.2%
Average Commission Rate Paid(b)
* Calculated on an annualized basis.
(a) For the six months ended June 30, 1996 (Unaudited). Total return and
portfolio turnover rate are not annualized.
(b) Disclosure required, effective for reporting periods beginning after
September 1, 1995.
(c) Includes $0.22 ordinary income distribution for tax purposes.
(d) Ordinary income distribution for tax purposes.
35
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
- --------------------------------------------------------------------------------
STRONG SMALL CAP FUND 1996(a)
------
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net Investment Income 0.02
Net Realized and Unrealized Gains
on Investments 2.45
----
TOTAL FROM INVESTMENT OPERATIONS 2.47
LESS DISTRIBUTIONS
- ------------------
From Net Investment Income (0.01)
-----
TOTAL DISTRIBUTIONS (0.01)
-----
NET ASSET VALUE, END OF PERIOD $ 12.46
========
Total Return +24.7%
Net Assets, End of Period (In Thousands) $ 78,231
Ratio of Expenses to Average Net Assets 1.6%*
Ratio of Net Investment Income to Average Net Assets (0.3%)*
Portfolio Turnover Rate 69.5%
Average Commission Rate Paid(b) $ 0.0555
<TABLE>
<CAPTION>
STRONG DISCOVERY FUND 1996(c) 1995 1994 1993 1992 1991
------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 18.96 $ 15.67 $ 18.05 $ 16.01 $ 17.49 $ 12.51
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net Investment Income (Loss) 0.02 (0.05) 0.16 (0.01) (0.06) --
Net Realized and Unrealized Gains
(Losses) on Investments (0.41) 5.48 (1.17) 3.48 0.23 8.41
----- ---- ----- ---- ---- ----
TOTAL FROM INVESTMENT OPERATIONS (0.39) 5.43 (1.01) 3.47 0.17 8.41
LESS DISTRIBUTIONS
- ------------------
From Net Investment Income (0.32) -- (0.11) -- -- --
In Excess of Net Investment Income (0.55) (0.10) (0.58) (0.45) -- --
From Net Realized Gains (0.59) (2.04) (0.68) (0.98) (1.65)(d) (3.43)(e)
----- ----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (1.46) (2.14) (1.37) (1.43) (1.65) (3.43)
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 17.11 $ 18.96 $ 15.67 $ 18.05 $ 16.01 $ 17.49
======== ======== ======== ======== ======== ========
Total Return -1.9% +34.8% -5.7% +22.2% +1.9% +67.6%
Net Assets, End of Period (In Thousands) $581,910 $599,060 $388,410 $301,789 $193,276 $162,499
Ratio of Expenses to Average Net Assets 1.4%* 1.4% 1.5% 1.5% 1.5% 1.6%
Ratio of Net Investment Income to Average Net Assets (0.4%)* (0.4%) 0.7% (0.2%) (0.4%) 0.0%
Portfolio Turnover Rate 527.2% 516.0% 606.1% 668.2% 1,258.6% 1,059.9%
Average Commission Rate Paid(b) $ 0.0318
<CAPTION>
STRONG DISCOVERY FUND 1990 1989 1988
---- ---- ----
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.18 $ 11.44 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net Investment Income (Loss) 0.27 0.30 0.95
Net Realized and Unrealized Gains
(Losses) on Investments (0.63) 2.43 1.49
----- ---- ----
TOTAL FROM INVESTMENT OPERATIONS (0.36) 2.73 2.44
LESS DISTRIBUTIONS
- ------------------
From Net Investment Income (0.31) (0.28) (0.97)
In Excess of Net Investment Income -- -- --
From Net Realized Gains -- (0.71) (0.03)
----- ----- -----
TOTAL DISTRIBUTIONS (0.31) (0.99) (1.00)
----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 12.51 $ 13.18 $ 11.44
======== ======== ========
Total Return -2.7% +24.0% +24.5%
Net Assets, End of Period (In Thousands) $ 56,260 $ 57,914 $ 13,648
Ratio of Expenses to Average Net Assets 1.9% 1.9% 2.0%
Ratio of Net Investment Income to Average Net Assets 2.1% 2.4% 11.9%
Portfolio Turnover Rate 493.9% 549.6% 441.6%
Average Commission Rate Paid(b)
</TABLE>
* Calculated on an annualized basis.
(a) For the six months ended June 30, 1996 (Unaudited). Inception date is
December 29, 1995. Total return and portfolio turnover rate are not
annualized.
(b) Disclosure required, effective for reporting periods beginning after
September 1, 1995.
(c) For the six months ended June 30, 1996 (Unaudited). Total return and
portfolio turnover rate are not annualized.
(d) Includes $1.50 ordinary income distribution for tax purposes.
(e) Includes $0.83 ordinary income distribution for tax purposes.
36
<PAGE>
SHAREHOLDER PRIVILIGES*
STRONG FUNDS
[PICTURE OF TELEPHONE]
24-HOUR SERVICE
TELEPHONE PURCHASE
Make additional investments into any Strong Fund by calling us toll-free at
1-800-368-3863.
TELEPHONE EXCHANGE
If your financial goals change, you can exchange your investments between any of
the Strong Funds.
TELEPHONE REDEMPTION
You can call toll-free to redeem your mutual fund shares at any time. Your
shares will be redeemed no later than the close of the next business day.
STRONG FUNDS
[PICTURE OF DOLLAR SIGN]
AUTOMATIC EXCHANGE
AUTOMATIC INVESTMENT PLAN
This plan allows you to set up regular transfers from your bank checking or NOW
account to your Strong Funds account.
PAYROLL DIRECT DEPOSIT PLAN
You can automatically transfer all or a portion of your net pay at each pay
period. This eliminates the delay of depositing paychecks to your bank and then
sending a check through the mail to Strong Funds.
AUTOMATIC EXCHANGE PLAN
This plan allows you to exchange money from one Strong Fund to another. For
example, you may want to set up automatic exchanges from a money market fund to
an equity fund.
For more information about these privileges, call us at 1-800-368-3863.
To reduce the volume of mail you receive, only one copy of certain materials,
such as prospectuses and shareholder reports, is mailed to your household.
Please call 1-800-368-3863 if you wish to receive additional copies, free of
charge.
* Each Fund reserves the right to terminate or modify any of these privileges.
<PAGE>
Bulk Rate
U.S. Postage
PAID
Mailed from
Zip Code 94545
Permit No. 23
FOR LITERATURE AND INFORMATION REQUESTS,
CALL 1-800-368-1030.
TO DISCUSS AN EXISTING ACCOUNT OR
CONDUCT A TRANSACTION,
CALL 1-800-368-3863.
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 annual report does not constitute an offer for
the sale of securities. Strong Funds are offered for sale by prospectus only.
[Strong Funds Logo]
STRONG FUNDS DISTRIBUTORS, INC.
P.O. Box 2936
Milwaukee, Wisconsin 53201
http://www.strong-funds.com
3240F96O
