<PAGE>
THE STRONG
----------
GROWTH
FUNDS
==================================
SEMI-ANNUAL REPORT o JUNE 30, 1998
==================================
THE STRONG COMMON STOCK FUND
THE STRONG DISCOVERY FUND
THE STRONG GROWTH FUND
THE STRONG GROWTH 20 FUND
THE STRONG MID CAP FUND
THE STRONG OPPORTUNITY FUND
THE STRONG SMALL CAP FUND
THE STRONG SMALL CAP VALUE FUND
[PHOTO OF STRONG FUNDS BUILDING]
[STRONG LOGO]
STRONG FUNDS
<PAGE>
8
EIGHT BASIC PRINCIPLES FOR SUCCESSFUL MUTUAL FUND INVESTING
These common-sense rules are followed by many successful investors. They make
sense for beginners, too. If you have a question on these principles, or would
like to discuss them with us, please contact us at 1-800-368-3863. We're here
24 hours a day, seven days a week to take your call.
- -------------------------------------------------------------------------------
[PICTURE OF FOLDER LABELED INVESTMENTS]
1. HAVE A PLAN. Even a simple plan can help you take control of your financial
future. Review your plan once a year, or if your circumstances change.
- -------------------------------------------------------------------------------
[PICTURE OF CLOCK]
2. START INVESTING AS SOON AS POSSIBLE. Make time a valuable ally. Let it put
the power of compounding to work for you, while helping to reduce your
potential investment risk.
- -------------------------------------------------------------------------------
[PICTURE OF PIE CHART OF ASSET DIVERSIFICATION]
3. DIVERSIFY YOUR PORTFOLIO. By investing in different asset classes - stocks,
bonds, and cash - you help protect against poor performance in one type of
investment while including investments most likely to help you achieve your
important goals.
- -------------------------------------------------------------------------------
[PICTURE OF MEMO REMINDER TO INVEST]
4. INVEST REGULARLY. Investing is a process, not a one-time event. By
investing regularly over the long term, you reduce the impact of short-term
market gyrations, and you attend to your long-term plan before you're tempted
to spend those assets on short-term needs.
- -------------------------------------------------------------------------------
[PICTURE OF GRAPH SLOPING UPWARD]
5. MAINTAIN A LONG-TERM PERSPECTIVE. For most individuals, the best discipline
is staying invested as market conditions change. Reactive, emotional investment
decisions are all too often a source of regret - and of principal loss.
- -------------------------------------------------------------------------------
[PICTURE OF PIE CHART OF ASSET DIVERSIFICATION EMPHASIZING STOCKS]
6. CONSIDER STOCKS TO HELP ACHIEVE MAJOR LONG-TERM GOALS. Over time, stocks
have provided the more powerful returns needed to help the value of your
investments stay well ahead of inflation.
- -------------------------------------------------------------------------------
[PICTURE OF DOLLAR SIGN]
7. KEEP A COMFORTABLE AMOUNT OF CASH IN YOUR PORTFOLIO. To meet current needs,
including emergencies, use a money market fund or a bank account - not your
long-term investment assets.
- -------------------------------------------------------------------------------
[PICTURE OF MAGNIFYING GLASS]
8. KNOW WHAT YOU'RE BUYING. Make sure you understand the potential risks and
rewards associated with each of your investments. Ask questions...request
information...make up your own mind. And choose a fund company that helps you
make informed investment decisions.
<PAGE>
THE STRONG
----------
GROWTH
FUNDS
==================================
SEMI-ANNUAL REPORT o JUNE 30, 1998
==================================
TABLE OF CONTENTS
INVESTMENT REVIEWS
The Strong Common Stock Fund.............................................2
The Strong Discovery Fund................................................4
The Strong Growth Fund...................................................6
The Strong Growth 20 Fund................................................8
The Strong Mid Cap Fund.................................................10
The Strong Opportunity Fund.............................................12
The Strong Small Cap Fund...............................................14
The Strong Small Cap Value Fund.........................................16
FINANCIAL INFORMATION
Schedules of Investments in Securities
The Strong Common Stock Fund........................................18
The Strong Discovery Fund...........................................20
The Strong Growth Fund..............................................22
The Strong Growth 20 Fund...........................................24
The Strong Mid Cap Fund.............................................25
The Strong Opportunity Fund.........................................26
The Strong Small Cap Fund...........................................28
The Strong Small Cap Value Fund.....................................29
Statements of Assets and Liabilities....................................32
Statements of Operations................................................34
Statements of Changes in Net Assets.....................................36
Notes to Financial Statements...........................................38
FINANCIAL HIGHLIGHTS.........................................................42
<PAGE>
============================
THE STRONG COMMON STOCK FUND
============================
IN AN ENVIRONMENT THAT WAS TOUGH FOR SMALL-CAP STOCKS, THE FUND WAS ABLE TO BEAT
ITS RUSSELL 2000 BENCHMARK BY A HEALTHY MARGIN.
The Strong Common Stock Fund seeks capital growth by investing at least 80% of
its assets in equity securities. The Fund has an emphasis on small companies
that the Fund's managers believe are under-researched and attractively valued.
==================================
ASSET ALLOCATION
==================================
Based on net assets as of 6-30-98
[PIE CHART]
Stocks 88.7%
Short-Term Investments 9.7%
Corporate Bonds 0.8%
Convertible Securities 0.8%
The Fund's asset allocation does
not reflect any futures or options
positions held by the Fund.
==================================
For the first half of 1998, due to the re-emergence of the economic crisis in
Southeast Asia, investors continued to favor larger-cap stocks as they
perceived the earnings of these companies to be more predictable. The gap in
performance between larger stocks and small stocks has grown to near-historic
proportions in the second quarter. For the six months ended June 30, the S&P 500
Stock Index returned 17.71%, while the Russell 2000(reg.tm) Stock Index
returned just 4.93%. Given an environment that was tough for small-cap stocks,
the Fund was able to register a return of 8.26%, which bettered its Russell 2000
benchmark by a healthy margin.*(1)
========================================
TOP FIVE SECTORS
========================================
As of 6-30-98
SECTOR % OF NET ASSETS
------------------------------------
Technology 25.2%
....................................
Energy 12.4%
....................................
Financial 12.0%
....................................
Consumer Cyclical 11.7%
....................................
Capital Equipment 8.9%
....................................
Please see the Schedule of Investments
in Securities for a complete listing
of the Fund's portfolio.
========================================
ASIA-THE SECOND WAVE
In the first quarter, investors downplayed the economic crisis in Southeast Asia
as a mere bump in the road. The result was strong performance for both large-cap
and small-cap stocks in those months. As investors gained more confidence in the
world economies and subsequently the U.S. stock market, large-stock liquidity
seemed to be of less interest. Given this, investors focused on the fundamental
valuation of small companies as well as large companies.
The second quarter of 1998, however, mirrored the fourth quarter of 1997. The
Asian crisis reared its head again, with the original six Southeast Asian
markets reaching new lows. The potential of severe financial distress in Japan
was a newer, more ominous concern. The Asian outlook began to affect the U.S.
market in late April, followed up by negative corporate earnings revisions in
June.
The overall impact on the U.S. markets was mixed. Investors rotated out of most
stocks and into a narrow band of S&P 500 large-cap growth stocks. The result was
a 4.66% decline in the Russell 2000(reg.tm) Index and a 3.30% increase in the
S&P 500. The narrowness of the S&P 500 was evident in that more than half of the
index's money gain was attributable to only 10 stocks. For the moment, investors
are now focused on large-cap stocks with strong earnings momentum and sufficient
liquidity to trade out of in the event of an earnings shortfall.
This type of momentum-driven narrow market is not consistent with our
disciplined investment style. We believe our strength lies in a commitment to
our private value approach to stock selection. We evaluate a company as though
we were considering buying the entire firm, and compare the price we'd be
willing to pay with the current stock price. If the cost of the stock doesn't
reflect this private value - often because the stock is being ignored by
analysts - we will consider adding it to the portfolio.
RESEARCH UNCOVERED OPPORTUNITIES
During the first half of the year, we identified a number of areas where private
value was not being reflected in companies' stock prices. As a result, the Fund
was able to log significant gains in such stocks as Cable and Wireless,
Tele-Communications, Inc., Musicland, and WellPoint.
The performance of the Fund continued to benefit from outperformance by many
media holdings, which were overweighted in the portfolio. Continued
===============================================================================
FIVE LARGEST STOCK HOLDINGS
===============================================================================
As of 6-30-98
% OF NET
SECURITY INDUSTRY ASSETS
--------------------------------------------------------------------------
MediaOne Group, Inc. Telecommunication 1.9%
Service
..........................................................................
Cox Communications, Inc. Media - Radio/TV 1.8%
..........................................................................
Sterling Software, Inc. Computer Software 1.7%
..........................................................................
Tele-Communications, Inc. Media - Radio/TV 1.6%
..........................................................................
Eagle Hardware & Garden, Inc. Retail - Specialty 1.6%
..........................................................................
Please see the Schedule of Investments in Securities for a complete listing
of the Fund's portfolio.
===============================================================================
2
<PAGE>
consolidation activity also led to attractive returns in cable and cellular
stocks. The Fund's position in the health-care sector was another factor in our
strong performance, as investors looked to such companies for sustainable
earnings growth.
LOOKING AHEAD TO THE SECOND HALF OF 1998
We believe that the second half of the year should lead to improved relative
performance for many small-cap companies. While the Asian economic crisis
continues to add stress to world economies, a stronger U.S. dollar has
historically been the catalyst for improved relative performance for small-cap
stocks, as earnings of large multinational stocks come under pressure. In the
coming months, we are optimistic that investors will focus on companies that are
more dependent on the U.S. economy, thus creating a greater interest in smaller
companies.
Two sectors that appear to have been beaten down to unsustainably low relative
valuation levels are energy and technology. Energy, in particular, has suffered
unduly from lower oil prices. We anticipate a rebound in these stocks in the
second half of the year as expectations of a more normal winter lead to
inventory reductions.
Many technology stocks have also been severely depressed and may more fully
reflect the negative impact of Asia on profits than the rest of the market.
Consequently, we think these stocks may offer less downside risk than the market
as a whole, and are starting to increase our underweighted position.
Thank you for your investment in the Strong Common Stock Fund. We appreciate
your confidence in our investment approach.
[PHOTO OF RICHARD T. WEISS AND MARINA CARLSON]
Sincerely,
/s/ Richard Trent Weiss
Richard T. Weiss
/s/ Marina Carlson
Marina Carlson
Portfolio Co-managers
===============================================================================
GROWTH OF AN ASSUMED $10,000 INVESTMENT
===============================================================================
From 12-29-89 to 6-30-98
[GRAPH]
THE STRONG Lipper
COMMON STOCK S&P 500 Growth Funds
FUND Stock Index* Index*
12-89 10,000 10,000 10,000
12-90 10,100 9,690 9,459
12-91 15,864 12,642 12,895
12-92 19,161 13,605 13,879
12-93 23,988 14,976 15,541
12-94 23,872 15,174 15,297
12-95 31,609 20,876 20,292
12-96 38,078 25,669 23,850
12-97 47,223 34,233 30,536
6-98 51,125 40,296 35,291
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 Funds
Index. Results include the reinvestment of all dividends and capital gains
distributions. Performance is historical and does not represent future results.
Investment returns and principal value will vary, and you may have a gain or
loss when you sell shares.
=================================
AVERAGE ANNUAL
TOTAL RETURNS(1)
=================================
As of 6-30-98
1-YEAR 16.82%
3-YEAR 22.27%
5-YEAR 19.14%
SINCE INCEPTION 21.16%
(on 12-29-89)
==================================
- -------------------------------------------------------------------------------
* The S&P 500 is an unmanaged index generally representative of the U.S. stock
market, without regard to company size. The Russell 2000(reg.tm) Index is an
unmanaged index generally representative of the U.S. market for small cap
stocks. The Lipper Growth Funds Index is an equally-weighted performance index
of the largest qualifying funds in this Lipper category. Source of the S&P and
the Russell index data is Standard & Poor's Micropal. Source of the Lipper
index data is Lipper Analytical Services, Inc.
1 Average annual total return and total return measure change in the value of
an investment in the Fund, assuming reinvestment of all dividends and capital
gains. Average annual total return reflects annualized change, while total
return reflects aggregate change.
3
<PAGE>
=========================
THE STRONG DISCOVERY FUND
=========================
OUR INVESTMENT APPROACH IS NOT BASED ON CHASING MARKET EUPHORIA OR FADS.
The Strong Discovery Fund seeks to provide investors with capital growth, a goal
we pursue by investing in a diversified portfolio of small-, medium-, and
larger-size companies. Our investment approach combines number-crunching
analysis with direct research, including on-site visits. Through frequent
discussions with management, suppliers, customers, and competitors, we believe
we can identify vital aspects of companies that are not reflected in their
historical financial statements or their stock prices.
=================================
ASSET ALLOCATION
=================================
Based on net assets as of 6-30-98
[PIE CHART]
Common Stocks 92.0%
Short-Term Investments 7.9%
Convertible Securities 0.1%
The Fund's asset allocation does
not reflect any futures positions
held by the Fund.
=================================
PROFITABLE COMPANIES
In the past six months, your portfolio managers have personally met with the
management of more than 200 companies. That figure includes more than 75% of
the companies in which the Discovery Fund currently has an investment. Our trips
into the field "to kick the tires" have confirmed the Fund is invested in
growing companies that are doing well. With few exceptions, these companies have
been meeting or exceeding their profit targets.
While we are pleased and encouraged by the positive underlying financial
performance of the companies in the portfolio, we are disappointed that this
strength has not yet been fully reflected in the companies' stock prices.
Specifically, the Fund's 1998 first half return of 7.76% did not keep pace with
the 22% average annual earnings growth we expect the companies in the portfolio
to achieve. Ironically, the S&P 500 Index enjoyed much greater gains even though
the profitability of many of the large companies that make up the index is
suffering from weak global markets and foreign currency devaluations. The S&P
reported a return of 17.71% for the first half of the year.*(1)
Relative to the broader market, however, the Fund's performance compared better.
The Russell 2000(reg.tm) Index, which measures the performance of 2000
companies and specifically excludes the performance of the few huge companies
that dominate the S&P 500 Index, gained just 4.93% in 1998's first half.*
A TREND CONTINUES
The pattern of returns in the first half of 1998 marks the continuation of a
trend that has been running since the summer of 1996. During this two-year
period, the market has favored the largest companies and in many cases has
ignored smaller, faster-growing ones. This point is brought into focus when
looking at valuations. Note that the Discovery Fund's valuation, as measured by
its price/earnings multiple, is lower than that of the S&P 500. This discrepancy
persists, even though the Fund's holdings are increasing their profits more than
three times as fast as the S&P's average.
P/E RATIO ESTIMATED
FUND (1999 EARNINGS) EARNINGS GROWTH(2)
- ------------------------------------------------------------------------------
Strong Discovery Fund 19.5x 22.0%
S&P 500 Index 22.4x 7.0%
An article in the June 24, 1998 issue of the New York Times further underlines
the attractiveness of smaller-company stocks. The article notes that since 1979,
small stocks have only been cheaper than they are now (relative to the S&P 500)
at two times: in the aftermath of the October 1987 market crash, and during the
1990 recession.
OUR INVESTMENT PHILOSOPHY
Given these recent trends, we believe it is instructive to review the investment
philosophy and strategy we employ when investing your money. Our investment
approach is not based on chasing market euphoria or fads. Rather, we look for
well-managed companies that are in good businesses and offer superior growth
4
<PAGE>
potential - and that can be purchased at attractive prices. We also focus on
companies with products that are used and replaced every day, such as razor
blades and toothpaste. By investing in companies with "razor blade"
characteristics, we attempt to insulate the portfolio from the profit
disappointments that typically accompany economic slowdowns.
At the present time, we believe the portfolio is positioned well relative to
these attributes. It has been our experience that stock prices eventually
track earnings growth, but there is precedent for this relationship to lapse
from time to time. When this happens, as we believe it currently has, the
ignored stocks with good earnings tend to catch up quickly when the market
changes direction. The most recent example of this was in 1991, when the
Discovery Fund gained 67.61% compared with a 30.47% gain by the S&P 500.
Going forward, we will make adjustments to the portfolio, where appropriate, as
part of our continuous effort to upgrade the quality of the Fund's holdings.
Successful investing requires confidence and patience. Yours is appreciated.
Thank you for your investment in the Strong Discovery Fund.
[PHOTO OF RICHARD S. STRONG AND CHARLES A. PAQUELET]
Sincerely,
/s/ Richard S. Strong
Richard S. Strong
/s/ Chip Paquelet
Charles A. Paquelet
Portfolio Co-managers
===============================================================================
GROWTH OF AN ASSUMED $10,000 INVESTMENT
===============================================================================
From 12-31-87 to 6-30-98
[GRAPH]
THE STRONG Lipper Capital
DISCOVERY S&P 500 Appreciation
FUND Stock Index* Funds Index*
12-87 10,000 10,000 10,000
12-89 15,428 15,356 14,479
12-91 25,151 19,412 18,366
12-93 31,333 22,996 22,865
12-95 39,885 32,056 29,350
12-97 44,825 52,566 40,477
6-98 48,306 61,877 46,423
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 Funds Index. Results include the reinvestment of all dividends and
capital gains distributions. Performance is historical and does not represent
future results. Investment returns and principal value will vary, and you may
have a gain or loss when you sell shares.
==================================
AVERAGE ANNUAL
TOTAL RETURNS(1)
==================================
As of 6-30-98
1-YEAR 14.85%
3-YEAR 11.90%
5-YEAR 12.62%
10-YEAR 14.60%
SINCE INCEPTION 16.18%
(on 12-31-87)
==================================
- -------------------------------------------------------------------------------
* The S&P 500 is an unmanaged index generally representative of the U.S. stock
market, without regard to company size. The Russell 2000(reg.tm) Index is an
unmanaged index generally representative of the U.S. market for small cap
stocks. The Lipper Capital Appreciation Funds Index is an equally-weighted
performance index of the largest qualifying funds in this Lipper category.
Source of the S&P and the Russell index data is Standard & Poor's Micropal.
Source of the Lipper index data is Lipper Analytical Services, Inc.
1 Average annual total return and total return measure change in the value of
an investment in the Fund, assuming reinvestment of all dividends and capital
gains. Average annual total return reflects annualized change, while total
return reflects aggregate change.
2 Earnings growth has been estimated on an annual basis for a projected
five-year period. The Discovery Fund's earnings growth estimate has been
generated from our own analysis of the portfolio's individual securities as of
June 30, 1998. The earnings growth projection for the S&P 500 has been based
on a consensus of earnings estimates from six Wall Street investment firms as
shown by Bloomberg dated June 30, 1998.
5
<PAGE>
======================
THE STRONG GROWTH FUND
======================
DURING THE PERIOD, WE FOCUSED THE FUND'S HOLDINGS ON COMPANIES WITH LIMITED
ASIAN EXPOSURE.
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. The Fund is able to invest in any company regardless of size.
=================================
ASSET ALLOCATION
=================================
Based on net assets as of 6-30-98
[PIE CHART]
Stocks 97.2%
Short-Term Investments 2.8%
=================================
For the six months ended June 30, 1998, the Strong Growth Fund generated a
positive total return of 16.33% by maintaining a primarily mid-to-large cap
portfolio of growth stocks.(1)
==============================================
TOP FIVE SECTORS
==============================================
As of 6-30-98
SECTOR % OF NET ASSETS
-----------------------------------------
Technology 31.1%
.........................................
Retail 20.6%
.........................................
Healthcare 13.3%
.........................................
Capital Equipment 11.9%
.........................................
Financial 10.6%
.........................................
Please see the Schedule of Investments in
Securities for a complete listing of the
Fund's portfolio.
==============================================
LOOKING BACK
Over the past six months the market for U.S. equities continued to rise, led by
the largest blue-chip stocks within the Standard & Poor's 500 Stock Index (S&P
500). By contrast, the Russell 2000(reg.tm) Index (composed of smaller cap
stocks) rose only 4.93% vs. 17.71% for the S&P 500 during the six months ended
June 30.*
Asian economic turmoil continued to dominate investor focus as analysts
struggled to determine its impact on earnings of companies which compete within
this region. During the period, we focused the Fund's holdings on companies
with limited Asian exposure. Some areas that we favored include:
o retailers Kohl's, Lowe's, Dollar Tree, and Walgreen.
o selected technology companies in areas such as networking (Cisco Systems),
software (Microsoft and America Online), and telecommunications (Lucent
Technologies and Tellabs).
o healthcare companies Warner-Lambert, McKesson, and Medtronic.
o service firms such as Robert Half International and Outdoor Systems.
We have done most of our recent buying in the mid- and small-cap area, where
many great growth companies became exceptional bargains.
WHERE WE ARE
The U.S. economy is in good condition and the consumer is benefiting. Real
disposable income has been growing at above trend-line and consumer confidence
is high. This is a great job market and Americans are employed at record levels.
For the first time since 1969, the United States has a budget surplus. Inflation
is low and corporations generally have a lack of pricing power. As a result,
companies still strive to increase productivity as a means to increase margins
and earnings.
We have a liquidity-driven market caused by foreign investment in the United
States, corporate share repurchases, corporate mergers and acquisitions, and
retirement plan contributions. This liquidity is the key reason that the big-cap
indices - the Dow Jones Industrial Average and the S&P 500 - are performing
so well. Slowing corporate revenue and earnings growth is being offset by low
inflation and interest rates, and the strong U.S. dollar, which makes stocks
preferable over cash. Some of the best growth stocks, especially in the mid- and
large-cap areas, are where we have kept most of our weighting in the portfolio.
==============================================================================
FIVE LARGEST HOLDINGS
==============================================================================
As of 6-30-98
% OF NET
SECURITY INDUSTRY ASSETS
--------------------------------------------------------------------------
Kohl's Corporation Retail - Department Store 3.8%
..........................................................................
Microsoft Corporation Computer Software 2.6%
..........................................................................
General Electric Company Electrical Equipment 2.4%
..........................................................................
Cisco Systems, Inc. Computer Software 2.3%
..........................................................................
Lowe's Companies, Inc. Retail - Specialty 2.3%
..........................................................................
Please see the Schedule of Investments in Securities for a complete listing
of the Fund's portfolio.
===============================================================================
6
<PAGE>
OUR OUTLOOK
Absent a rise in inflation and interest rates, the stock market can continue to
rise over the long term, but short-term corrections can come at any time as
valuations become too full or economic news makes investors nervous. While there
is the risk that the Federal Reserve could tighten, given the Asian crisis, low
inflation, and the higher dollar, the probability is that the Fed will remain on
the sidelines. This is a time to really focus on companies with the best
fundamentals, and solid earnings growth coupled with the best valuations.
Presently, the most attractive valuations are with the mid-to-small cap stocks
which have lagged the large-cap stocks. As always, it is our belief that
outstanding companies with superior earnings and revenue growth will outperform
the market over time, and our ability to buy the stocks of companies of all
sizes allows us to move to the most attractive areas.
Thank you for your investment in the Strong Growth Fund. We appreciate the
opportunity to serve you, and look forward to helping you pursue your important
financial goals in the years ahead.
[PHOTO OF RONALD C. OGNAR]
Sincerely,
/s/ Ronald C. Ognar
Ronald C. Ognar
Portfolio Manager
===============================================================================
GROWTH OF AN ASSUMED $10,000 INVESTMENT
===============================================================================
From 12-31-93 to 6-30-98
[GRAPH]
THE STRONG S&P 500 Lipper Growth
GROWTH FUND Stock Index* Funds Index*
12-93 10,000 10,000 10,000
12-94 11,727 10,132 9,843
12-95 16,535 13,940 13,057
12-96 19,763 17,140 15,346
12-97 23,528 22,859 19,648
6-98 27,370 26,907 22,707
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 Funds
Index. Results include the reinvestment of all dividends and capital gains
distributions. Performance is historical and does not represent future results.
Investment returns and principal value vary, and you may have a gain or loss
when you sell shares.
=================================
AVERAGE ANNUAL
TOTAL RETURNS(1)
=================================
As of 6-30-98
1-YEAR 26.30%
3-YEAR 25.07%
SINCE INCEPTION 25.08%
(on 12-31-93)
=================================
- -------------------------------------------------------------------------------
* The S&P 500 is an unmanaged index generally representative of the U.S. stock
market, without regard to company size. The Russell 2000(reg.tm) Index is an
unmanaged index generally representative of the U.S. market for small cap
stocks. The Lipper Growth Funds Index is an equally-weighted performance index
of the largest qualifying funds in this Lipper category. Source of the S&P and
the Russell index data is Standard & Poor's Micropal. Source of the Lipper
index data is Lipper Analytical Services, Inc.
1 Average annual total return and total return measure change in the value of
an investment in the Fund, assuming reinvestment of all dividends and capital
gains. Average annual total return reflects annualized change, while total
return reflects aggregate change.
7
<PAGE>
=========================
THE STRONG GROWTH 20 FUND
=========================
OVER THE LAST SIX MONTHS, THE MARKETS WERE VERY UNCERTAIN AND CHOPPY, BUT WE
BELIEVE THAT QUALITY GROWTH STOCKS ARE POISED TO BENEFIT FROM THE CURRENT
ENVIRONMENT...
The Strong Growth 20 Fund seeks capital growth by investing in 20 to 30 common
stocks.
=================================
ASSET ALLOCATION
=================================
Based on net assets as of 6-30-98
[PIE CHART]
Stocks 95.9%
Short-Term Investments 4.1%
The Fund's asset allocation does
not reflect any options positions
held by the Fund.
=================================
STRONG PERFORMANCE IN A CHOPPY MARKET
For the six months ended June 30, 1998, the Strong Growth 20 Fund had a return
of 15.30% versus the 17.71% S&P 500 return. The Fund's one-year (since
inception) return of 31.29% is ahead of the S&P 500 return of 30.16% for the
same period.(1)* Overall, the Fund had a solid first year despite trying times
with Southeast Asia, slowing earnings outlooks for many companies, and the
ever-present threat of the Federal Reserve raising interest rates. Sector
rotation and the flight to the highly liquid blue-chip stocks (represented by
the S&P 500) were the main characteristics of this nervous market. Performing
ahead of the S&P 500 for our first year - when most funds underperformed - was
gratifying.
=========================================
TOP FIVE SECTORS
=========================================
As of 6-30-98
SECTOR % OF NET ASSETS
------------------------------------
Technology 36.4%
....................................
Retail 22.8%
....................................
Capital Equipment 15.2%
....................................
Healthcare 11.6%
....................................
Financial 5.2%
....................................
Please see the Schedule of Investments
in Securities for a complete listing
of the Fund's portfolio.
=========================================
Over the last six months, the markets were very uncertain and choppy, but we
believe that quality growth stocks are poised to benefit from the current
environment - as long as prices don't get too high and no slowdowns in earnings
take place. This market is unforgiving if a company presents a negative
surprise to the investor.
CORE HOLDINGS DROVE PERFORMANCE
Certain stocks were winners in 1997 but turned down during the first half of
1998. The Fund was adversely affected by holdings in financial and oil service
stocks that saw earnings growth rates decline. The Fund deleted these holdings,
and moved on to increase weightings in technology (telecommunications
equipment, networking, and software), retail, and healthcare. After a slow first
quarter relative to the S&P 500, the second quarter of 1998 saw the Fund outpace
the S&P 500 and other equity indices.
Let's review what stocks worked well for us, and why we consider them strong
core holdings of the Fund.
Kohl's Corporation operates specialty department stores offering national-brand
merchandise at moderate prices. Kohl's has excellent management that executes
well. It delivers value and desirable products when the consumer wants to buy
them. We believe that the company can grow its store base 20% per year for at
least 10 years, after successfully moving from its midwest base to many large
cities in the east.
Lowe's Companies ranks as the second-largest building supply/home center company
(second to Home Depot). In late 1996, new management changed the company's store
size and layout to improve the appearance, mix of merchandise, and returns on
invested capital per store. It also redesigned the stores to appeal to women
shoppers. These changes are working. Lowe's has come right into some Home Depot
markets and successfully competed. Both companies perform well, while the less
efficient competing operators lose market share. Combined, the two leaders have
less than 10% of a growing market and a lot of room to add new stores.
Cisco Systems, Inc. is the leading networking company that executes when the
others stumble. The networking market continues to grow rapidly. Cisco is in the
center of the fast-paced convergence of computing and data transmission in the
telecommunication markets. The company is excellent at developing and marketing
its products and services to major buyers worldwide. When it needs to make
strategic alliances and acquisitions to move into new technologies that
===============================================================================
FIVE LARGEST HOLDINGS
===============================================================================
As of 6-30-98
% OF NET
SECURITY INDUSTRY ASSETS
---------------------------------------------------------------------------
Kohl's Corporation Retail - Department Store 7.7%
...........................................................................
Dollar Tree Stores, Inc. Retail - Discount & Variety 5.4%
...........................................................................
Romac International, Inc. Commercial Service 5.2%
...........................................................................
Safeway, Inc. Retail - Food Chain 5.1%
...........................................................................
Ascend Communications, Inc. Computer Software 5.0%
...........................................................................
Please see the Schedule of Investments in Securities for a complete listing
of the Fund's portfolio.
===============================================================================
8
<PAGE>
complement its products, Cisco has continuously performed while others fall
behind.
McKesson Corporation is the largest wholesale distributor of drugs and
healthcare products in the United States. Management has successfully moved the
company into a leadership position, and has recently signed several major
contracts with health-care providers and drug-store chains. McKesson is a
consistent and non-economically sensitive play on strong growth in the
healthcare needs of the aging population.
The Strong Growth 20 Fund tries to select a concentrated portfolio of stocks
from our growth stock universe. As a non-diversified Fund, its concentration of
assets may produce higher returns, but the shareholder should expect a more
volatile performance quarter-to-quarter than is typical with a diversified fund.
OUR OUTLOOK
Absent a rise in inflation and interest rates, the stock market can continue to
rise over the long term, but short-term corrections can come at any time as
valuations become too full or economic news makes investors nervous. While there
is the risk that the Federal Reserve could tighten, given the Asian crisis, low
inflation, and the higher dollar, the probability is that the Fed will remain on
the sidelines. This is a time to really focus on companies with the best
fundamentals, and solid earnings growth coupled with the best valuations. As
always, it is our belief that outstanding companies with superior earnings and
revenue growth will out-perform the market over time, and our ability to buy the
stocks of companies of all sizes allows us to move to the most attractive areas
Thank you for your investment in the Strong Growth 20 Fund. We appreciate your
confidence in us and hope this is the first of many successful investment years
ahead of us as we strive to help you meet your financial goals.
[PHOTO OF RONALD C. OGNAR]
Sincerely,
/s/ Ronald C. Ognar
Ronald C. Ognar
Portfolio Manager
===============================================================================
GROWTH OF AN ASSUMED $10,000 INVESTMENT
===============================================================================
From 6-30-97 to 6-30-98
[GRAPH]
THE STRONG Lipper Capital
GROWTH 20 S&P 500 Appreciation
FUND Stock Index* Funds Index*
6-97 10,000 10,000 10,000
8-97 11,280 10,191 10,524
10-97 11,453 10,390 10,711
12-97 11,387 11,058 10,890
2-98 11,809 11,180 11,732
4-98 12,122 12,727 12,399
6-98 13,129 13,016 12,490
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 Funds Index. Results include the reinvestment of all dividends and
capital gains distributions. Performance is historical and does not represent
future results. Investment returns and principal value vary, and you may have a
gain or loss when you sell shares.
================================
AVERAGE ANNUAL
TOTAL RETURN(1)
================================
As of 6-30-98
SINCE INCEPTION 31.29%
(on 6-30-97)
================================
- -------------------------------------------------------------------------------
* The S&P 500 is an unmanaged index generally representative of the U.S.
stock market, without regard to company size. The Lipper Capital Appreciation
Funds Index is an equally-weighted performance index of the largest qualifying
funds in this Lipper category. Source of the S&P index data is Standard &
Poor's Micropal. Source of the Lipper index data is Lipper Analytical
Services, Inc.
1 Average annual total return and total return measure change in the value of
an investment in the Fund, assuming reinvestment of all dividends and capital
gains. Average annual total return reflects annualized change, while total
return reflects aggregate change.
9
<PAGE>
=======================
THE STRONG MID CAP FUND
=======================
IN THIS TRANSITIONAL PERIOD, THE FUND HAS EXPERIENCED MORE TURNOVER THAN WILL BE
THE NORM ONCE OUR RESTRUCTURING IS COMPLETE.
The Strong Mid Cap Fund seeks capital growth and invests primarily in stocks of
companies that have mid-size market capitalizations. These stocks can be
volatile over short time periods, but have the potential to amply reward
investors over time.
=================================
ASSET ALLOCATION
=================================
Based on net assets as of 6-30-98
[PIE CHART]
Stocks 90.5%
Short-Term Investments 9.5%
=================================
In general, the Fund invests in companies that we believe have favorable
long-term growth prospects, rather than being invested in value stocks. In
particular, the Fund seeks companies having talented managements, strong
financial characteristics, and long-term sales and earnings growth
opportunities. Additionally, although we do not look for pure value stocks, we
do seek companies that we believe are priced at a reasonable level relative to
their growth potential.
==========================================
TOP FIVE SECTORS
==========================================
As of 6-30-98
SECTOR % OF NET ASSETS
-------------------------------------
Technology 35.8%
.....................................
Healthcare 14.8%
.....................................
Retail 14.2%
.....................................
Financial 7.6%
.....................................
Consumer Cyclical 5.0%
.....................................
Please see the Schedule of Investments
in Securities for a complete listing
of the Fund's portfolio.
==========================================
MID-CAP STOCKS OFF TO GOOD START IN 1998
The market continued to primarily favor large-cap stocks, but mid-caps were able
to post reasonable returns as well. The S&P MidCap 400 Index returned 8.64%
during the first six months of 1998 - a level that is approximately equal to the
earnings-growth rate projected for the companies that compose this index. In
general, it's appropriate for there to be correlation between earnings growth
and stock price appreciation.*
Although mid-caps had an appealing return during this period, they continued to
lag the large-company S&P 500 Index by a wide margin. The S&P 500 gained 17.71%
for the same period, an indication that investors are still willing to pay
premium prices for large, well-known companies. One reason for this may be the
"safe haven" psychology that prevails in the market today. Concerns about
turmoil in Asia and Eastern Europe, as well as high stock prices and price
multiples appear to have driven investors to seek large, liquid blue-chip
stocks.*
The Mid Cap Fund had a good first half of 1998, returning 15.91% through June
30, compared with an 8.64% return by its benchmark, the S&P MidCap 400 Index.
The Fund did well through April, declined sharply in May, and rebounded in June.
The Fund's outperformance is attributable to its overweighted positions in
consumer, health care, and technology holdings. In particular, retailers,
pharmaceutical companies, medical device providers, and software firms boosted
performance.(1)
NEW MANAGEMENT BRINGS CHANGES TO THE PORTFOLIO
After assuming management of the Fund at the end of May, my team began to
restructure the portfolio in accordance with our management style. We believe
in a more concentrated approach toward long-term growth, emphasizing companies
that offer their growth at reasonable prices. We believe that over time, this
approach should help to generate good "up market" returns while lessening the
impact of down markets on the portfolio. Additionally, it can dampen the
portfolio's volatility and reduce transaction costs.
Some of the specific changes included reducing the number of holdings in the
portfolio, selling most cyclical holdings, and focusing on companies offering
long-term growth opportunities. Larger commitments were also made to the
attractive holdings in the portfolio.
Most of the initial changes have been completed, but there is still more work
10
<PAGE>
to come. In this transitional period, the Fund has experienced more turnover
than will be the norm once our restructuring is complete. Because our goal is to
identify long-term holdings, turnover for the Fund should moderate.
LOOKING FORWARD TO THE YEAR'S SECOND HALF
Asian difficulties continue to be of concern. Through-out corporate America,
growth forecasts are being modified downward, particularly for those firms with
significant Far Eastern exposure. It's entirely possible that this downward
pressure could continue for the remainder of the year. On the positive side, it
appears that the U.S. will remain in a low-interest-rate, low-inflation
environment for the foreseeable future. Fortunately, in a scenario of uncertain
economic growth and low interest rates, companies that can demonstrate
profitable growth - particularly profitable unit sales growth - should be able
to generate attractive returns for shareholders. We believe we have invested in
companies that can demonstrate such growth.
Regardless of the market outlook, the Fund will seek to invest in well-managed
companies that have favorable long-term outlooks. Markets will fluctuate, but
our efforts to identify good companies and grow with them will remain constant.
Thank you for your support.
[PHOTO OF SCOTT SINDELAR]
Sincerely,
/s/ Scott Sindelar
Scott Sindelar
Portfolio Manager
===============================================================================
GROWTH OF AN ASSUMED $10,000 INVESTMENT
===============================================================================
From 12-31-96 to 6-30-98
[GRAPH]
STRONG Lipper
MID CAP S&P 500 Mid Cap
FUND Stock Index* Funds Index*
12-96 10,000 10,000 10,000
3-97 8,964 10,268 9,330
6-97 10,104 12,061 10,808
9-97 12,115 12,964 12,347
12-97 11,385 13,336 11,746
3-98 13,136 15,197 13,233
6-98 13,196 15,698 13,180
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
S&P 500 Stock Index and the Lipper Mid Cap Funds Index. Results include the
reinvestment of all dividends and capital gains distributions. Performance is
historical and does not represent future results. Investment returns and
principal value vary, and you may have a gain or loss when you sell shares.
=================================
AVERAGE ANNUAL
TOTAL RETURNS(1)
=================================
As of 6-30-98
1-YEAR 30.59%
SINCE INCEPTION 20.31%
(on 12-31-96)
=================================
- -------------------------------------------------------------------------------
* The S&P 500 Stock Index is an unmanaged index generally representative of the
U.S. stock market, without regard to company size. The S&P MidCap 400 Stock
Index is an unmanaged index generally representative of the U.S. stock market
for medium cap stocks. The Lipper Mid Cap Funds Index is an equally-weighted
performance index of the largest qualifying funds in this Lipper category.
Source of the S&P index data is Standard & Poor's Micropal. Source of the
Lipper index data is Lipper Analytical Services, Inc.
1 Average annual total return and total return measure change in the value of
an investment in the Fund, assuming reinvestment of all dividends and capital
gains. Average annual total return reflects annualized change, while total
return reflects aggregate change.
11
<PAGE>
===========================
THE STRONG OPPORTUNITY FUND
===========================
THE MARKET'S GAINS WERE EVEN MORE NARROWLY CONCENTRATED THAN THE S&P 500; JUST
10 STOCKS ACCOUNTED FOR MORE THAN HALF THE INDEX'S RETURNS.
The Strong Opportunity Fund seeks capital growth by investing at least 70% of
its assets in equity securities. The Fund has an emphasis on medium-size
companies that the Fund's advisor believes are under-researched and attractively
valued.
=================================
ASSET ALLOCATION
=================================
Based on net assets as of 6-30-98
[PIE CHART]
Stocks 87.5%
Short-Term Investments 11.7%
Bonds 0.8%
The Fund's asset allocation does
not reflect any options positions
held by the Fund.
=================================
ASIA-THE SECOND WAVE
In the first quarter, investors downplayed the economic crisis in Southeast
Asia as a mere bump in the road resulting in strong performance for both
large-cap and small-cap stocks. Interestingly, as investors gained more
confidence in the world economies and subsequently the U.S. stock market, large
stock liquidity seemed to play a lesser role. Investors were attracted to the
fundamental valuation of small companies as well as large companies.
=======================================
TOP FIVE SECTORS
=======================================
As of 6-30-98
SECTOR % OF NET ASSETS
----------------------------------
Technology 21.1%
..................................
Consumer Cyclical 15.4%
..................................
Financial 15.0%
..................................
Energy 10.8%
..................................
Retail 8.5%
..................................
Please see the Schedule of Investments
in Securities for a complete listing
of the Fund's portfolio.
=======================================
The second quarter of 1998 mirrored the fourth quarter of 1997. The Asian crisis
reared its head with the original six Southeast Asian markets making new lows
while the world focus shifted to a more ominous factor, the potential of severe
financial distress in Japan. Concern with the overall Asian outlook began to
impact the U.S. market in late April and was followed up by tangible negative
effects on actual corporate earnings as a number of companies pre-announced bad
earnings in June. The overall impact on the U.S. markets was mixed. Investors
rotated out of most stocks into a narrow band of large cap growth stocks
represented in the S&P 500. The result was a 4.66% decline in the Russell
2000(reg.tm) and a 3.30% increase in the S&P 500.*
A NARROW MARKET
In response to these heightened fears, investors rotated out of most stocks,
heading for the perceived stability of the largest companies in the S&P 500. As
a result, the gap in performance between large stocks and small stocks that has
been notable in recent years grew to near-historic proportions, reaching 9
percentage points in the second quarter. For the six months ended June 30, 1998,
the S&P 500 Stock Index returned 17.71%, while the Fund's benchmark, the S&P
MidCap 400 Stock Index, went up a more subtle 8.64%. Despite this yawning gap,
the Fund was able to register a return of 14.39% for the period, bettering its
benchmark by a healthy margin.(1)*
The market's gains were even more narrowly concentrated than the S&P 500; just
10 stocks accounted for more than half the index's returns. Given the
uncertainty surrounding the world's leading regions, investors preferred to
stick with some of the very largest stocks with strong earnings momentum. This
narrow investment style is not consistent with the way we manage this Fund.
CONTINUING OUR FOCUS ON RESEARCH
Rather than chase this current trend, we believe our strength lies in a
commitment to our private value approach to stock selection. We evaluate a
company as though we were considering buying the entire firm, and compare the
price we'd be willing to pay with the stock price. If the cost of the company's
stock reflects a lower price than this private value, we will consider adding it
to the portfolio.
To be successful with our investment approach, we apply an intensive research
process, of which direct company visits are vital. During the first half of the
year, the Fund identified a number of areas where private value was not being
reflected in companies' stock prices.
===============================================================================
FIVE LARGEST STOCK HOLDINGS
===============================================================================
As of 6-30-98
% OF NET
SECURITY INDUSTRY ASSETS
---------------------------------------------------------------------------
Tele-Communications, Inc. Media - Radio/TV 3.6%
...........................................................................
MediaOne Group, Inc. Telecommunication Service 1.9%
...........................................................................
Cox Communications, Inc. Media - Radio/TV 1.7%
...........................................................................
Comcast Corporation Media - Radio/TV 1.7%
...........................................................................
NIPSCO Industries, Inc. Electric Power 1.7%
...........................................................................
Please see the Schedule of Investments in Securities for a complete listing of
the Fund's portfolio.
===============================================================================
12
<PAGE>
In particular, the Fund continued to benefit from outperformance by many of its
holdings in media - a sector we overweighted in the portfolio. Cable and
cellular stocks benefited from further consolidation in those industries. Among
our strong-performing stocks in this area were Cable and Wireless,
Tele-Communications, Inc., and MediaOne Group.
LOOKING AHEAD
We are optimistic that the second half of the year should lead to improved
relative performance for many mid-cap companies. Although the economic crisis in
Southeast Asia is far from a positive force, it has helped to bolster the U.S.
dollar. Historically, a stronger dollar has helped small companies' relative
performance by putting pressure on the earnings of large multinational companies
that make much of their profits overseas. In the coming months, we believe
investors will focus on smaller companies, which typically derive more of their
earnings at home.
Two sectors that appear to have been beaten down to unsustainably low relative
valuations are energy and technology. Energy, in particular, has suffered unduly
from lower oil prices. We anticipate a rebound in these stocks in the second
half of the year.
Many technology stocks have also been severely depressed and may more fully than
the rest of the market reflect the negative impact of Asia on profits.
Consequently, we think the downside for these stocks may be lower than for the
market as a whole and are starting to increase our underweighted position.
Thank you for your investment in the Strong Opportunity Fund. We appreciate your
confidence in our investment approach.
[PHOTO OF RICHARD T. WEISS AND MARINA CARLSON]
Sincerely,
/s/ Richard Trent Weiss
Richard T. Weiss
/s/ Marina Carlson
Marina Carlson
Portfolio Co-managers
===============================================================================
GROWTH OF AN ASSUMED $10,000 INVESTMENT
===============================================================================
From 12-31-85 to 6-30-98
[GRAPH]
THE STRONG Lipper
OPPORTUNITY S&P 500 Growth Funds
FUND Stock Index* Index*
12-85 10,000 10,000 10,000
12-87 17,894 12,490 11,935
12-89 24,694 19,179 17,364
12-91 28,845 24,245 22,391
12-93 41,022 28,721 26,986
12-95 53,868 40,036 35,236
12-97 78,558 65,653 53,023
6-98 89,866 77,281 61,279
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 Funds
Index. Results include the reinvestment of all dividends and capital gains
distributions. Performance is historical and does not represent future results.
Investment returns and principal value vary, and you may have a gain or loss
when you sell shares.
==================================
AVERAGE ANNUAL
TOTAL RETURNS(1)
==================================
As of 6-30-98
1-YEAR 28.85%
5-YEAR 19.34%
10-YEAR 16.10%
SINCE INCEPTION 19.20%
(on 12-31-85)
==================================
- -------------------------------------------------------------------------------
* The S&P 500 is an unmanaged index generally representative of the U.S. stock
market, without regard to company size. The S&P Mid Cap 400 Stock Index is an
unmanaged index generally representative of the U.S. market for medium cap
stocks. The Lipper Growth Funds Index is an equally-weighted performance
index of the largest qualifying funds in this Lipper category. The Russell
2000(reg.tm) Index is an unmanaged index generally representative of the U.S.
market for small cap stocks. Source of the S&P and Russell index data is
Standard & Poor's Micropal. Source of the Lipper index data is Lipper
Analytical Services, Inc.
1 Average annual total return and total return measure change in the value of
an investment in the Fund, assuming reinvestment of all dividends and capital
gains. Average annual total return reflects annualized change, while total
return reflects aggregate change.
13
<PAGE>
=========================
THE STRONG SMALL CAP FUND
=========================
WHEN MY TEAM ASSUMED MANAGEMENT OF THE PORTFOLIO AT THE END OF MAY, WE ADJUSTED
THE PORTFOLIO IN TUNE WITH OUR MANAGEMENT STYLE.
=================================
ASSET ALLOCATION
=================================
Based on net assets as of 6-30-98
[PIE CHART]
Stocks 84.8%
Short-Term Investments 15.2%
=================================
The Strong Small Cap Fund seeks capital growth and invests primarily in stocks
of companies that have small market capitalizations. In general, the Fund is
invested in companies that we believe have favorable long-term growth outlooks,
rather than investing in value stocks. In particular, the Fund seeks growth
companies having talented managements, strong financial characteristics, and
long-term sales and earnings growth opportunities. Additionally, the Fund seeks
companies that we believe are priced at reasonable values, relative to their
growth potential.
=======================================
TOP FIVE SECTORS
=======================================
As of 6-30-98
SECTOR % OF NET ASSETS
----------------------------------
Technology 31.4%
..................................
Capital Equipment 14.4%
..................................
Retail 11.2%
..................................
Financial 10.2%
..................................
Healthcare 8.2%
..................................
Please see the Schedule of Investments
in Securities for a complete listing
of the Fund's portfolio.
=======================================
SMALL STOCKS CONTINUE TO LAG
For the first six months of 1998, large companies, as represented by the S&P
500, continued to perform better than small companies. While the S&P 500
returned 17.71% for the six months, the smaller-cap Russell 2000(reg.tm) Index
returned just 4.93%.* This divergence has been taking place for more than two
years. Additionally, the stocks that have driven the performance of most major
equity benchmarks have been the larger companies within their respective
indices.
Factors that may be responsible for this trend are the perceived safety and
liquidity investors associate with large, household-name companies. As investors
become increasingly concerned about world events - most recently, the Asian
economic crisis - they often view blue-chip stocks as good investments. That is
clearly the case now, which has made small-cap investing a less rewarding place
in recent years than large-cap investing.
NAVIGATING IN A VOLATILE MARKET
Volatility continued as the Russell 2000, which had returned more than 10% from
January through April, gave back half of those returns in May. There's no single
specific event responsible for this sharp drop, but it was likely accelerated by
the effect the slowdown in Asia had on certain technology hardware companies.
The Small Cap Fund posted a return of 7.96% for the first six months of 1998,
ahead of the benchmark Russell 2000's return of 4.93%.(1) The Fund's performance
over the period charted the same course as the market overall - that is, it was
positive (except for a small decline in January) during the first four months of
the year, and fell sharply in May. The Fund's outperformance against its
benchmark is the result of its overweightings in both the consumer and
technology sectors. Specifically, retail and software companies performed well.
CHANGES TO THE PORTFOLIO
When my team assumed management of the portfolio at the end of May, we adjusted
the portfolio in tune with our management style. We concentrated the holdings
somewhat, and moved toward a "growth-oriented but value-aware" style to help
dampen some of the Fund's volatility. We anticipate that this will allow the
portfolio to participate in up markets, yet provide some level of protection in
downturns. Specific initial changes made were to reduce the number of holdings
in the portfolio, replace the bulk of the cyclical holdings with companies that
should exhibit steady growth for the second half of 1998, and reorient the
portfolio toward those companies that have a longer favorable time horizon
associated with them. This work has been generally completed.
14
<PAGE>
OUTLOOK IS MUDDY
The economic backdrop continues to be clouded by Asia's difficulties, but
helped by low inflation and interest rates. Much of corporate America is
facing declining earnings-growth forecasts, particularly for those companies
with significant Far Eastern exposure.
This downward pressure may continue for the remainder of the year. Fortunately,
under a scenario of uncertain economic growth and low interest rates, companies
that can demonstrate profitable growth, particularly profitable growth in unit
sales, should generate attractive returns to shareholders.
SEEKING TO MERGE FUND
As you have been notified, the Fund's Advisor, Strong Capital Management, Inc.,
has proposed to merge this Fund into the Strong Growth Fund later this year. In
the near term, we do not plan to make any changes to the Fund's current
strategies. We believe the Fund is invested in companies that have good
management, favorable growth prospects, and reasonable valuations. For the
longer term, we are confident that the Strong Growth Fund with its experienced,
hard-working management team, can serve investors well.
Thank you for your support.
[PHOTO OF SCOTT SINDELAR]
Sincerely,
/s/ Scott Sindelar
Scott Sindelar
Portfolio Manager
===============================================================================
GROWTH OF AN ASSUMED $10,000 INVESTMENT
===============================================================================
From 12-29-95 to 6-30-98
[GRAPH]
THE STRONG Lipper
SMALL CAP S&P 500 Small Cap
FUND Stock Index* Funds Index*
12-95 10,000 10,000 10,000
6-96 12,469 11,010 11,403
12-96 12,270 12,296 11,437
6-97 11,183 14,830 12,121
12-97 11,721 16,399 13,154
6-98 12,653 19,303 14,002
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 Cap Funds
Index. Results include the reinvestment of all dividends and capital gains
distributions. Performance is historical and does not represent future results.
Investment returns and principal value vary, and you may have a gain or loss
when you sell shares.
=================================
AVERAGE ANNUAL
TOTAL RETURNS(1)
=================================
As of 6-30-98
1-YEAR 13.14%
SINCE INCEPTION 9.87%
(on 12-29-95)
=================================
- -------------------------------------------------------------------------------
* The S&P 500 is an unmanaged index generally representative of the U.S. stock
market, without regard to company size. The Russell 2000(reg.tm) Index is an
unmanaged index generally representative of the U.S. market for small cap
stocks. The Lipper Small Cap Funds Index is an equally-weighted performance
index of the largest qualifying funds in this Lipper category. Source of the
S&P and the Russell index data is Standard & Poor's Micropal. Source of the
Lipper index data is Lipper Analytical Services, Inc.
1 Average annual total return and total return measure change in the value of
an investment in the Fund, assuming reinvestment of all dividends and capital
gains. Average annual total return reflects annualized change, while total
return reflects aggregate change.
15
<PAGE>
===============================
THE STRONG SMALL CAP VALUE FUND
===============================
GIVEN THE FUND'S SMALL-CAP FOCUS, WE WERE ESPECIALLY PLEASED THAT IT MANAGED TO
POST RESULTS SO CLOSE TO THE S&P 500'S FOR THE FIRST HALF OF THE YEAR.
The Strong Small Cap Value Fund seeks capital growth by investing in
fundamentally undervalued small companies with attractive long-term growth
potential.
=================================
ASSET ALLOCATION
=================================
Based on net assets as of 6-30-98
[PIE CHART]
Stocks 97.1%
Short-Term Investments 2.9%
The Fund's asset allocation does
not reflect any options positions
held by the Fund.
=================================
THE FUND'S FIRST SIX MONTHS
For the six months ended June 30, 1998, the Fund returned 17.30%, compared with
a 4.93% return for the Russell 2000(reg.tm) Index over the same period. The
Russell 2000, which primarily measures the performance of smaller companies'
stocks, is the Fund's benchmark.(1)*
========================================
TOP FIVE SECTORS
========================================
As of 6-30-98
SECTOR % OF NET ASSETS
-----------------------------------
Energy 19.4%
...................................
Technology 15.0%
...................................
Capital Equipment 14.5%
...................................
Retail 10.6%
...................................
Basic Material 8.4%
...................................
Please see the Schedule of Investments
in Securities for a complete listing
of the Fund's portfolio.
========================================
The first four months of the year were good ones for the equity markets. Small
company stocks underperformed large company stocks during the first four months,
but during May and June they fell even further behind. As a result, in the
second quarter, the Russell 2000 declined by almost 5%, while the S&P 500
increased by 3.3%, buoyed by the strength in the large-cap sector. The S&P 500
returned 17.71% for the first half of the year.*
Given the Fund's small-cap focus, we were especially pleased that it managed to
post results so close to the S&P 500's for the first half of the year. The
Fund's results for the first three months were very strong, with our holdings in
retail and steel stocks among the best performers. Technology and health-care
holdings also bolstered the Fund's first-half performance.
It was difficult to add value during the second quarter, eleven out of the
twelve industry sectors that make up the Russell 2000 declined. Also,
performance in individual sectors varied dramatically. An example is
energy-related companies, an area we have emphasized in the Fund. This was the
top-performing sector in April, but by June it was the poorest performer among
the Russell 2000 sectors. In fact, its performance in May and June was so weak
that it affected performance for the entire second quarter.
OUR INVESTMENT PROCESS
The Fund is still relatively new, having only been in operation for six months.
At the end of June, the Fund held positions in 47 stocks and had net assets of
$22.2 million. As the assets grow, we anticipate building up to a portfolio of
approximately 80 to 100 companies or more. We will tend to be fully invested in
equities at all times, but will implement our strategy gradually with
securities that meet our investment criteria. Value drives our approach to stock
selection. We try to find quality businesses selling at low prices, based on
various measures of value.
In our analysis, we seek a positive dynamic of change that may trigger investor
interest in a stock. Examples of this might include new management, new
products, industry consolidation, restructuring, regulatory change, or simply
the right time in the business cycle for a particular company.
We try to control risk by maintaining a well-diversified portfolio, employing a
high degree of rigor in monitoring changes in companies' valuations and
fundamental qualities, and executing disciplined sell decisions.
OUTLOOK
The second half of the year is likely to draw the financial market's attention
to international events. Attention could turn more to European countries as
monetary unity nears. Asian economies will continue to be a source of
uncertainty, as the financial crisis there either widens or bottoms. We have
16
<PAGE>
moderately reduced our exposure to the energy sector by cutting our stakes in
companies that seem most susceptible to short-term difficulties. We are still
overweighted in the sector, however. We believe this is appropriate because of
the sector's low valuations, as well as the potential for tightening in supply
later in the year as producers curtail production.
As companies increasingly pre-announce earnings disappointments, we notice that
their causes appear to fall in two categories: Asia-related difficulties, or
the challenges presented by the tight labor market at home. We are likely to
avoid increased exposure to companies that do a substantial portion of their
business in Asia, as well as those domestic-oriented firms in labor intensive
industries.
In the current environment, we will be looking for value-priced stocks of
companies with the ability to show strong revenue growth. Two factors drive
this focus. First, the world economies are slowing. Second, it will be hard for
companies to show earnings growth by cutting costs further, following a period
of rampant restructuring and already-low commodity and raw material costs.
Consequently, we believe that premiums will be paid for those companies that
can demonstrate top line growth, as it will be harder to find going forward.
Thank you for your investment in the Strong Small Cap Value Fund.
[PHOTO OF I. CHARLES RINALDI]
Sincerely,
/s/ I. Charles Rinaldi
I. Charles Rinaldi
Portfolio Manager
===============================================================================
GROWTH OF AN ASSUMED $10,000 INVESTMENT
===============================================================================
From 12-31-97 to 6-30-98
[GRAPH]
THE STRONG Lipper Small
SMALL CAP S&P 500 Cap Funds
VALUE FUND Stock Index* Index*
12-97 10,000 10,000 10,000
1-98 10,510 10,111 9,808
2-98 11,350 10,840 10,599
3-98 12,430 11,395 11,072
4-98 13,000 11,510 11,118
5-98 12,340 11,312 10,505
6-98 11,730 11,771 10,645
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 Cap Funds
Index. Results include the reinvestment of all dividends and capital gains
distributions. Performance is historical and does not represent future results.
Investment returns and principal value vary, and you may have a gain or loss
when you sell shares.
================================
TOTAL RETURN(1)
================================
As of 6-30-98
SINCE INCEPTION 17.30%
(on 12-31-97)
================================
- -------------------------------------------------------------------------------
* The S&P 500 is an unmanaged index generally representative of the U.S. stock
market, without regard to company size. The Russell 2000(reg.tm) Index is an
unmanaged index generally representative of the U.S. market for small cap
stocks. The Lipper Small Cap Funds Index is an equally-weighted performance
index of the largest qualifying funds in this Lipper category. Source of the
S&P and the Russell index data is Standard & Poor's Micropal. Source of the
Lipper index data is Lipper Analytical Services, Inc.
1 Total return is not annualized and measures aggregate change in the value
of an investment in the Fund, assuming reinvestment of dividends.
17
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES JUNE 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
===============================================================================
STRONG COMMON STOCK FUND
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
COMMON STOCKS 88.2%
AIRLINE 0.1%
Air New Zealand, Ltd. Class B 2,000,000 $ 2,146,176
BANK - MONEY CENTER 0.4%
Banca di Roma (b) 990,000 1,997,232
Banque Nationale de Paris 10,000 815,047
Nordbanken Holding AB 300,000 2,195,534
UBS AG - Registered Shares (b) 3,000 1,113,158
------------
6,120,971
BANK - REGIONAL 2.0%
City National Corporation 397,000 14,664,187
Old Kent Financial Corporation 509,250 18,317,086
------------
32,981,273
BANK - SUPER REGIONAL 4.0%
Banc One Corporation 390,000 21,766,875
BankBoston Corporation 430,000 23,918,750
Norwest Corporation 565,000 21,116,875
------------
66,802,500
CHEMICAL 0.3%
Rhodia SA (b) 183,000 5,090,546
CLOSED-END FUND 0.0%
Morgan Stanley Emerging Markets Fund, Inc. 84,000 787,500
COMMERCIAL SERVICE 3.7%
Pittston Company Brinks Group 560,000 20,650,000
Rollins Truck Leasing Corporation 1,882,500 23,295,938
Sensormatic Electronics Corporation (b) 1,265,000 17,710,000
------------
61,655,938
COMPUTER - PERIPHERAL EQUIPMENT 1.2%
Microchip Technology, Inc. (b) 760,000 19,855,000
COMPUTER - PERSONAL & WORKSTATION 0.9%
Data General Corporation (b) 975,000 14,564,063
COMPUTER SOFTWARE 3.9%
Sterling Software, Inc. (b) 959,700 28,371,131
Sybase, Inc. (b) 1,550,000 10,801,563
Synopsys, Inc. (b) 545,000 24,933,750
------------
64,106,444
DIVERSIFIED OPERATIONS 1.2%
Johnson Controls, Inc. 360,000 20,587,500
ELECTRICAL EQUIPMENT 1.2%
Molex, Inc. Class A 850,000 19,868,750
ELECTRONIC PARTS DISTRIBUTION 0.8%
Marshall Industries (b) 500,000 13,625,000
ELECTRONIC PRODUCTS - MISCELLANEOUS 2.5%
General Motors Corporation Class H 475,000 22,384,375
Raychem Corporation 630,000 18,624,375
------------
41,008,750
ELECTRONICS - SEMICONDUCTOR/COMPONENT 4.9%
Cypress Semiconductor, Inc. (b) 1,800,000 14,962,500
Dallas Semiconductor Corporation 680,000 21,080,000
Novellus Systems, Inc. (b) 565,000 20,163,438
Xilinx, Inc. (b) 740,000 25,160,000
------------
81,365,938
ENGINEERING & CONSTRUCTION 1.3%
Jacobs Engineering Group, Inc. (b) 650,000 20,881,250
FOOD 2.5%
Dole Food Company, Inc. 460,000 22,856,250
Kellogg Company 510,000 19,156,875
------------
42,013,125
HEALTHCARE - BIOMEDICAL/GENETIC 1.3%
Centocor, Inc. (b) 600,000 21,750,000
HEALTHCARE - PATIENT CARE 3.3%
PhyCor, Inc. (b) 704,200 11,663,313
Tenet Healthcare Corporation (b) 636,900 19,903,125
WellPoint Health Networks, Inc. (b) 320,000 23,680,000
------------
55,246,438
HOUSING RELATED 1.4%
RPM, Inc. 1,400,000 23,800,000
INSURANCE - LIFE 1.0%
Reliastar Financial Corporation 330,000 15,840,000
INSURANCE - MULTI-LINE 0.1%
Skandia Forsakrings AB 140,000 1,996,622
INSURANCE - PROPERTY & CASUALTY 1.5%
Mid Ocean, Ltd. 300,000 23,550,000
Scor 27,000 1,708,381
------------
25,258,381
MACHINERY - MISCELLANEOUS 1.4%
Hussmann International, Inc. 1,275,000 23,667,188
MEDIA - PUBLISHING 1.9%
News Corporation, Ltd. Sponsored ADR 820,000 26,342,500
Torstar Corporation Class B 151,200 4,816,763
------------
31,159,263
MEDIA - RADIO/TV 7.1%
Cable & Wireless Communications PLC (b) 405,000 4,098,561
Cable & Wireless Communications PLC
Sponsored ADR (b) 465,000 23,250,000
Cox Communications, Inc. Class A (b) 613,500 29,716,406
Flextech PLC (b) 1,000,000 9,236,288
Tele-Communications, Inc. TCI Group Series A (b) 695,000 26,714,062
Tele-Communications International, Inc. Class A (b) 1,220,000 24,514,375
------------
117,529,692
OIL - INTERNATIONAL INTEGRATED 0.3%
Elf Aquitaine SA Sponsored ADR 70,000 4,970,000
OIL - NORTH AMERICAN EXPLORATION & PRODUCTION 6.7%
Devon Energy Corporation 550,000 19,215,625
EEX Corporation (b) 2,500,000 23,437,500
Forcenergy, Inc. (b) 937,800 16,704,562
Harken Energy Corporation (b) 2,150,000 10,346,875
Noble Affiliates, Inc. 525,000 19,950,000
Pioneer Natural Resources Company 875,000 20,890,625
------------
110,545,187
OIL - NORTH AMERICAN INTEGRATED 1.2%
Valero Energy Corporation 600,000 19,950,000
OIL WELL EQUIPMENT & SERVICE 4.3%
Global Industries, Ltd. (b) 1,040,000 17,550,000
Nabors Industries, Inc. (b) 950,000 18,821,875
Offshore Logistics, Inc. (b) 942,500 16,729,375
R&B Falcon Corporation (b) 767,000 17,353,375
------------
70,454,625
PRECIOUS METAL/GEM/STONE 0.9%
Barrick Gold Corporation 745,000 14,294,688
18
<PAGE>
- ------------------------------------------------------------------------------
==============================================================================
STRONG COMMON STOCK FUND (CONTINUED)
==============================================================================
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------
REAL ESTATE 3.0%
Apartment Investment & Management Company
Class A 505,000 $ 19,947,500
CarrAmerica Realty Corporation 360,000 10,215,000
Castellum AB 176,000 2,069,682
Security Capital Group, Inc. Class B (b) 650,000 17,306,250
Shortland Properties, Ltd. 851,000 286,753
--------------
49,825,185
RETAIL - FOOD CHAIN 1.2%
American Stores Company 850,000 20,559,375
RETAIL - RESTAURANT 2.3%
IHOP Corporation (b) (f) 470,000 19,446,250
Outback Steakhouse, Inc. (b) 465,000 18,135,000
--------------
37,581,250
RETAIL - SPECIALTY 4.9%
AutoZone, Inc. (b) 700,000 22,356,250
Cortefiel SA 35,000 764,142
Eagle Hardware & Garden, Inc. (b) 1,153,000 26,663,125
The Gymboree Corporation (b) 921,000 13,958,906
Musicland Stores Corporation (b) (f) 1,215,000 17,010,000
--------------
80,752,423
SHOE & APPAREL MANUFACTURING 1.2%
Warnaco Group, Inc. Class A 485,000 20,582,188
SOAP & CLEANING PREPARATION 1.2%
Ecolab, Inc. 635,000 19,685,000
TELECOMMUNICATION EQUIPMENT 0.9%
Belden, Inc. 464,200 14,216,125
TELECOMMUNICATION SERVICE 10.2%
Aerial Communications, Inc. (b) 1,850,000 11,562,500
AirTouch Communications, Inc. (b) 415,000 24,251,563
MediaOne Group, Inc. (b) 715,000 31,415,312
NTL, Inc. (b) 475,000 25,412,500
Omnipoint Corporation (b) 860,000 19,726,250
Paging Network, Inc. (b) 1,500,000 21,000,000
Tele-Communications, Inc. - TCI Ventures Group
Series A (b) 796,300 15,975,768
United States Cellular Corporation (b) 645,000 19,833,750
--------------
169,177,643
- ------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $1,170,535,690) 1,462,301,997
- ------------------------------------------------------------------------------
PREFERRED STOCKS 0.5%
Henkel KGaA-Vorzug 63,000 6,219,512
Telecom Italia Spa 320,000 1,554,004
- ------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS (COST $4,724,646) 7,773,516
- ------------------------------------------------------------------------------
CORPORATE BONDS 0.8%
Musicland Group, Inc. Senior Subordinated Notes,
9.00%, Due 6/15/03 $ 1,000,000 967,500
Niagara Mohawk Power Corporation Senior Notes,
Series B, 7.00%, Due 10/01/00 12,950,000 13,014,750
- ------------------------------------------------------------------------------
TOTAL CORPORATE BONDS (COST $13,658,930) 13,982,250
- ------------------------------------------------------------------------------
CONVERTIBLE BONDS 0.8%
Conxus Communications, Inc. Senior Subordinated
Notes, 9.00%, Due 5/15/01 (Rate
Reset Effective 5/15/99) (Acquired 5/22/98;
Cost $13,000,000) (d) 13,000,000 13,000,000
- ------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS (COST $13,000,000) 13,000,000
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 9.8%
COMMERCIAL PAPER 0.1%
INTEREST BEARING, DUE UPON DEMAND
General Mills, Inc., 5.26% 227,500 227,500
Johnson Controls, Inc., 5.26% 1,010,000 1,010,000
Pitney Bowes Credit Corporation, 5.26% 21,600 21,600
--------------
1,259,100
REPURCHASE AGREEMENTS 9.5%
ABN-AMRO Chicago Corporation (Dated 6/30/98),
5.75%, Due 7/01/98 (Repurchase proceeds
$149,523,878); Collateralized by: $350,000,000
Resolution Funding Corporation Principal Strips,
Due 7/15/20 (Market Value $77,143,500) and
$50,000,000 United States Treasury Bond
Principal Strips, 8.75%, Due 8/15/20 (Market
Value $14,057,500) and $115,061,000 United
States Treasury Strips, Zero %, Due 2/15/17 -
5/15/20 (Market Value $33,665,243) and
$100,000,000 United States Treasury Strips,
8.75%, Due 8/15/20 (Market Value $28,115,000) (e) 149,500,000 149,500,000
BZW Securities, Inc. (Dated 6/30/98), 5.50%,
Due 7/01/98 (Repurchase proceeds $6,801,039);
Collateralized by: $6,775,000 United States
Treasury Notes, 8.875%, Due 11/05/98 (Market
Value $6,936,482) (e) 6,800,000 6,800,000
--------------
156,300,000
UNITED STATES GOVERNMENT ISSUES 0.2%
United States Treasury Bills:
Due 7/09/99 (c) 2,000,000 1,997,942
Due 8/13/98 1,300,000 1,292,422
--------------
3,290,364
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS (COST $160,849,161) 160,849,464
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES (COST $1,362,768,427) 100.1% 1,657,907,227
Other Assets and Liabilities, Net (0.1%) (1,338,643)
- ------------------------------------------------------------------------------
NET ASSETS 100.0% $1,656,568,584
==============================================================================
FUTURES
- -------------------------------------------------------------------------------
Underlying
Expiration Face Amount Unrealized
Date at Value Depreciation
- -------------------------------------------------------------------------------
Sold:
256 S&P 500 9/98 ($73,152,000) $1,020,550
WRITTEN OPTIONS ACTIVITY
- -------------------------------------------------------------------------------
Contracts Premiums
- -------------------------------------------------------------------------------
Options outstanding at beginning of period -- $ --
Options written during the period 11,250 5,909,118
Options closed (2,675) (1,422,332)
Options expired -- --
Options exercised -- --
------ ----------
Options outstanding at end of period 8,575 $4,486,786
====== ==========
Closed options resulted in a capital gain of $1,333,818.
19
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) JUNE 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
===============================================================================
STRONG COMMON STOCK FUND (CONTINUED)
===============================================================================
- -------------------------------------------------------------------------------
WRITTEN OPTIONS DETAIL
- -------------------------------------------------------------------------------
Value
Contracts (Note 2)
- -------------------------------------------------------------------------------
AirTouch Communications, Inc.
(Strike Price is $45.00. Expiration date is 10/16/98.
Premium Received $2,056,431.) 2,000 ($2,862,500)
(Strike Price is $50.00. Expiration date is 10/16/98.
Premium Received $885,945.) 1,550 (1,550,000)
(Strike Price is $55.00. Expiration date is 10/16/98.
Premium Received $253,192.) 600 (375,000)
MediaOne Group, Inc. (Strike Price is $40.00. Expiration
date is 8/21/98. Premium Received $108,321.) 350 (168,437)
Reliastar Financial Corporation
(Strike Price is $40.00. Expiration date is 10/16/98.
Premium Received $273,491.) 500 (443,750)
(Strike Price is $45.00. Expiration date is 10/16/98.
Premium Received $684,082.) 2,800 (1,312,500)
Tele-Communications, Inc. Class A (Strike Price is
$35.00. Expiration date is 10/16/98. Premium Received
$225,324.) 775 (392,344)
===============================================================================
STRONG DISCOVERY FUND
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
COMMON STOCKS 92.0%
BANK - MONEY CENTER 0.7%
Citicorp 16,700 $ 2,492,475
BROKERAGE & INVESTMENT MANAGEMENT 1.0%
Kansas City Southern Industries, Inc. 24,200 1,200,925
Waddell & Reed Financial, Inc. 100,000 2,393,750
-----------
3,594,675
COMMERCIAL SERVICE 15.3%
Accustaff, Inc. (b) 71,400 2,231,250
Avis Rent A Car, Inc. (b) 22,575 558,731
Coinmach Laundry Corporation (b) 485,800 11,477,025
Consolidated Graphics, Inc. (b) 70,000 4,130,000
Corrections Corporation America (b) 263,300 6,187,550
Edutrek International, Inc. (Acquired 4/17/98;
Cost $3,487,212) (b) (d) 129,156 3,164,322
H & R Block, Inc. 33,900 1,428,037
ITT Educational Services, Inc. (b) 150,000 4,837,500
Lamar Advertising Company (b) 136,800 4,907,700
Lason Holdings, Inc. (b) 47,600 2,594,200
Outdoor Systems, Inc. (b) 140,000 3,920,000
Pittston Company Brinks Group 100,000 3,687,500
The Profit Recovery Group International, Inc. (b) 121,700 3,399,994
Rollins Truck Leasing Corporation 83,250 1,030,219
The ServiceMaster Company 105,000 3,996,563
Transcrypt International, Inc. (b) 121,700 425,950
-----------
57,976,541
COMPUTER - MAINFRAME 1.4%
International Business Machines Corporation 47,000 5,396,187
COMPUTER - PERIPHERAL EQUIPMENT 2.0%
Lexmark International Group, Inc. Class A (b) 60,000 3,660,000
Storage Technology Corporation (b) 89,400 3,877,725
-----------
7,537,725
COMPUTER SERVICE 1.3%
Pierce Leahy Corporation (b) 145,100 3,373,575
Sykes Enterprises, Inc. (b) 70,000 1,404,375
-----------
4,777,950
COMPUTER SOFTWARE 1.0%
America Online, Inc. (b) 20,100 2,130,600
Computer Associates International, Inc. 30,050 1,669,653
-----------
3,800,253
CONSUMER - MISCELLANEOUS 2.7%
Equity Corporation International (b) 331,800 7,963,200
Service Corporation International 52,600 2,255,225
-----------
10,218,425
ELECTRICAL EQUIPMENT 2.1%
Berg Electronics Corporation (b) 399,000 7,805,437
ELECTRONIC PRODUCTS - MISCELLANEOUS 1.3%
Rayovac Corporation (b) 208,375 4,727,507
FINANCE - MISCELLANEOUS 0.9%
American Express Company 21,000 2,394,000
NOVA Corporation (b) 26,600 950,950
-----------
3,344,950
HEALTHCARE - DRUG/DIVERSIFIED 0.9%
Halsey Drug Company, Inc. (b) (f) 535,650 1,272,169
Halsey Drug Company, Inc. (Acquired 10/01/96;
Cost $9,165) (b) (d) (f) 2,820 6,034
Jones Medical Industries, Inc. 35,000 1,159,375
Pfizer, Inc. 10,000 1,086,875
-----------
3,524,453
HEALTHCARE - INSTRUMENTATION 1.2%
Arterial Vascular Engineering, Inc. (b) 49,000 1,751,750
Datascope Corporation (b) 35,000 929,688
Medtronic, Inc. 30,000 1,912,500
-----------
4,593,938
HEALTHCARE - MEDICAL SUPPLY 6.2%
Cohr, Inc. (b) (f) 512,700 2,627,587
McKesson Corporation 23,000 1,868,750
PSS World Medical, Inc. (b) 230,000 3,363,750
Henry Schein, Inc. (b) 92,150 4,250,419
Steris Corporation (b) 12,400 788,563
Sybron International Corporation (b) 411,300 10,385,325
-----------
23,284,394
HEALTHCARE - PATIENT CARE 1.8%
Compdent Corporation (b) 150,300 2,348,437
Kendle International, Inc. (b) 70,700 2,138,675
United Dental Care, Inc. (b) 125,500 2,419,797
-----------
6,906,909
HEALTHCARE - PRODUCT 1.1%
Cytyc Corporation (b) 128,200 2,091,263
Sabratek Corporation (b) 98,800 2,247,700
-----------
4,338,963
INSURANCE - LIFE 0.2%
Torchmark Corporation 20,000 915,000
INSURANCE - PROPERTY & CASUALTY 2.0%
MGIC Investment Corporation 135,400 7,726,262
LEISURE PRODUCT 3.4%
Action Performance Companies, Inc. (b) 175,000 5,632,812
Harley-Davidson, Inc. 118,000 4,572,500
SCP Pool Corporation (b) 105,900 2,594,550
-----------
12,799,862
20
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
STRONG DISCOVERY FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
LEISURE SERVICE 3.1%
American Skiing Company (b) 170,100 $ 2,211,300
Bally Total Fitness Holding Corporation (b) 150,000 5,400,000
Candlewood Hotel Company, Inc. (b) 20,900 156,750
International Game Technology 103,800 2,517,150
Promus Hotel Corporation (b) 37,582 1,446,907
------------
11,732,107
MACHINE TOOL 0.8%
Applied Power, Inc. 84,000 2,887,500
MACHINERY - TRANSPORTATION EQUIPMENT & PARTS 0.2%
Dana Corporation 13,200 706,200
MEDIA - PUBLISHING 0.4%
Harcourt General, Inc. 16,100 957,950
School Specialty, Inc. (b) 45,200 740,150
------------
1,698,100
MEDIA - RADIO/TV 3.5%
Chancellor Media Corporation (b) 84,000 4,171,125
Clear Channel Communications, Inc. (b) 65,150 7,109,494
Viacom International, Inc. (b) 33,000 1,922,250
------------
13,202,869
OFFICE AUTOMATION 1.6%
Global Imaging Systems, Inc. (b) 176,000 2,464,000
Xerox Corporation 34,900 3,546,713
------------
6,010,713
OIL - NORTH AMERICAN EXPLORATION & PRODUCTION 2.5%
Ocean Energy, Inc. (b) 205,104 4,012,347
Union Pacific Resources Group, Inc. 314,000 5,514,625
------------
9,526,972
OIL - NORTH AMERICAN INTEGRATED 0.7%
Transmontaigne Oil Company (b) 172,200 2,561,475
OIL WELL EQUIPMENT & SERVICE 1.7%
ENSCO International, Inc. 51,100 887,863
Marine Drilling Companies, Inc. (b) 153,100 2,449,600
Noble Drilling Corporation (b) 135,000 3,248,437
------------
6,585,900
PERSONAL & COMMERCIAL LENDING 7.4%
Associates First Capital Corporation 182,400 14,022,000
Beneficial Corporation 90,700 13,894,106
------------
27,916,106
POLLUTION CONTROL 3.1%
Superior Services, Inc. (b) 145,800 4,383,113
Waste Management, Inc. 205,000 7,175,000
------------
11,558,113
RAILROAD 1.3%
Burlington Northern Santa Fe Corporation 50,600 4,968,287
REAL ESTATE 1.7%
Sunstone Hotel Investors, Inc. 484,850 6,454,566
RETAIL - DRUG STORE 0.7%
Rite Aid Corporation 66,400 2,494,150
RETAIL - FOOD CHAIN 0.3%
US Foodservice (b) 27,900 978,244
RETAIL - RESTAURANT 2.1%
PJ America, Inc. (b) 100,600 1,835,950
Papa John's International, Inc. (b) 31,100 1,226,506
Rainforest Cafe, Inc. (b) 347,250 4,818,094
------------
7,880,550
RETAIL - SPECIALTY 10.5%
Black Box Corporation (b) 134,000 4,447,125
Central Garden & Pet Company (b) 283,000 8,808,375
Fastenal Company 7,400 343,638
MSC Industrial Direct Company, Inc. Class A (b) 122,400 3,488,400
Movie Gallery, Inc. (b) 619,825 4,493,731
Pier 1 Imports, Inc. 56,300 1,344,163
Regis Corporation 65,600 1,939,300
Renters Choice, Inc. (b) 183,100 5,195,462
Staples, Inc. (b) 95,000 2,749,062
United Stationers, Inc. (b) 17,800 1,152,550
Wilmar Industries, Inc. (b) 192,400 4,906,200
Zale Corporation (b) 20,000 636,250
------------
39,504,256
SAVINGS & LOAN 0.9%
TCF Financial Corporation 109,775 3,238,363
SHOE & APPAREL MANUFACTURING 0.1%
Rocky Shoes & Boots, Inc. (b) 26,200 373,350
TELECOMMUNICATION SERVICE 1.3%
Davel Communications Group, Inc. (b) 59,300 1,445,437
MediaOne Group, Inc. (b) 17,000 746,938
WorldCom, Inc. (b) 52,400 2,538,125
------------
4,730,500
TOBACCO 0.6%
800-JR CIGAR, Inc. (b) 63,800 1,260,050
Philip Morris Companies, Inc. 30,000 1,181,250
------------
2,441,300
TRANSPORTATION SERVICE 1.0%
Hub Group, Inc. Class A (b) 169,900 3,589,138
- ------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $310,876,775) 346,800,665
- ------------------------------------------------------------------------------
WARRANTS 0.0%
Halsey Drug Company, Inc. Warrants, Expire
12/26/01 (Acquired 7/21/97; Cost $0) (b) (d) (f) 21,429 12,215
- ------------------------------------------------------------------------------
TOTAL WARRANTS (COST $0) 12,215
- ------------------------------------------------------------------------------
CONVERTIBLE BONDS 0.1%
Halsey Drug Company, Inc. Subordinated
Debentures, 10.00%, Due 8/06/01
(Acquired 8/05/96; Cost $587,550) (d) (f) $ 600,000 394,614
- ------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS (COST $591,544) 394,614
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 7.8%
COMMERCIAL PAPER 0.2%
INTEREST BEARING, DUE UPON DEMAND
American Family Financial Services, Inc., 5.25% 100 100
General Mills, Inc., 5.26% 422,100 422,100
Johnson Controls, Inc., 5.26% 371,800 371,800
------------
794,000
REPURCHASE AGREEMENTS 7.3%
Barclays Capital, Inc., (Dated 6/30/98), 5.50%, Due
7/01/98 (Repurchase proceeds $27,604,217);
Collateralized by: $27,500,000 United States
Treasury Notes, 8.875%, Due 11/15/98 (Market
Value $28,155,460) (e) 27,600,000 27,600,000
21
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) JUNE 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
===============================================================================
STRONG DISCOVERY FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
UNITED STATES GOVERNMENT ISSUES 0.3%
United States Treasury Bills:
Due 9/10/98 (c) $840,000 $ 831,882
Due 10/15/98 335,000 330,088
------------
1,161,970
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS (COST $29,555,818) 29,555,970
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES (COST $341,024,137) 99.9% 376,763,464
Other Assets and Liabilities, Net 0.1% 230,089
- ------------------------------------------------------------------------------
NET ASSETS 100.0% $376,993,553
==============================================================================
FUTURES
- -------------------------------------------------------------------------------
Underlying
Expiration Face Amount Unrealized
Date at Value Depreciation
- -------------------------------------------------------------------------------
Purchased:
105 S&P 500 9/98 $30,003,750 $34,715
===============================================================================
STRONG GROWTH FUND
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
COMMON STOCKS 97.2%
AIRLINE 1.1%
Midwest Express Holdings, Inc. (b) 525,000 $ 18,998,438
BANK - REGIONAL 0.9%
Northern Trust Company 125,000 9,531,250
US Bancorp 125,000 5,375,000
------------
14,906,250
BEVERAGE - SOFT DRINK 1.1%
The Coca-Cola Company 225,000 19,237,500
BROKERAGE & INVESTMENT MANAGEMENT 1.5%
Lehman Brothers Holdings, Inc. 100,000 7,756,250
Morgan Stanley, Dean Witter & Company 200,000 18,275,000
------------
26,031,250
COMMERCIAL SERVICE 7.8%
Accustaff, Inc. (b) 350,000 10,937,500
Lamar Advertising Company (b) 265,000 9,506,875
Lason Holdings, Inc. (b) 39,500 2,152,750
Outdoor Systems, Inc. (b) 900,000 25,200,000
Paychex, Inc. 575,000 23,395,312
Robert Half International, Inc. (b) 600,000 33,525,000
Romac International, Inc. (b) 726,000 22,052,250
Snyder Communications, Inc. (b) 110,000 4,840,000
------------
131,609,687
COMPUTER - PERSONAL & WORKSTATION 1.0%
Dell Computer Corporation (b) 175,000 16,242,188
COMPUTER SERVICE 2.3%
Cambridge Technology Partners, Inc. (b) 250,000 13,656,250
Envoy Corporation (b) 100,000 4,737,500
Fiserv, Inc. (b) 300,000 12,740,625
Information Management Resources, Inc. (b) 100,000 3,381,250
Sykes Enterprises, Inc. (b) 265,000 5,316,562
------------
39,832,187
COMPUTER SOFTWARE 18.5%
America Online, Inc. (b) 250,000 26,500,000
Ascend Communications, Inc. (b) 550,000 27,259,375
BMC Software, Inc. (b) 175,000 9,089,063
CBT Group PLC Sponsored ADR (b) 475,000 25,412,500
Cisco Systems, Inc. (b) 425,000 39,126,562
Citrix Systems, Inc. (b) 225,000 15,384,375
Compuware Corporation (b) 275,000 14,059,375
J.D. Edwards & Company (b) 125,000 5,367,187
FORE Systems, Inc. (b) 350,000 9,275,000
HBO & Company 900,000 31,725,000
Keane, Inc. (b) 74,100 4,149,600
Legato Systems, Inc. (b) 225,000 8,775,000
Microsoft Corporation (b) 400,000 43,350,000
Network Associates, Inc. (b) 200,000 9,575,000
PeopleSoft, Inc. (b) 225,000 10,575,000
Saville Systems PLC Sponsored ADR (b) 325,000 16,290,625
Visio Corporation (b) 375,000 17,906,250
------------
313,819,912
DIVERSIFIED OPERATIONS 1.7%
Monsanto Company 275,000 15,365,625
Tyco International, Ltd. 225,000 14,175,000
------------
29,540,625
ELECTRICAL EQUIPMENT 2.4%
General Electric Company 450,000 40,950,000
ELECTRONICS - SEMICONDUCTOR/COMPONENT 1.8%
Uniphase Corporation (b) 375,000 23,542,969
Vitesse Semiconductor Corporation (b) 250,000 7,718,750
------------
31,261,719
FINANCE - MISCELLANEOUS 1.2%
American Express Company 175,000 19,950,000
FOOD 0.3%
American Italian Pasta Company (b) 150,000 5,587,500
HEALTHCARE - DRUG/DIVERSIFIED 7.0%
Bristol-Myers Squibb Company 150,000 17,240,625
Elan Corporation PLC ADR (b) 300,000 19,293,750
Pfizer, Inc. 320,000 34,780,000
Schering-Plough Corporation 275,000 25,196,875
Warner-Lambert Company 255,000 17,690,625
Watson Pharmaceuticals, Inc. (b) 100,000 4,668,750
------------
118,870,625
HEALTHCARE - INSTRUMENTATION 1.2%
Medtronic, Inc. 325,000 20,718,750
HEALTHCARE - MEDICAL SUPPLY 3.5%
Cardinal Health, Inc. 200,000 18,750,000
McKesson Corporation 400,000 32,500,000
Sybron International Corporation (b) 300,000 7,575,000
------------
58,825,000
HEALTHCARE - PATIENT CARE 1.2%
Boron, LePore & Associates, Inc. (b) 150,000 5,700,000
Parexel International Corporation (b) 100,000 3,637,500
Quintiles Transnational Corporation (b) 125,000 6,148,438
Total Renal Care Holdings, Inc. (b) 150,000 5,175,000
------------
20,660,938
HEALTHCARE - PRODUCT 0.4%
Guidant Corporation 100,000 7,131,250
INSURANCE - DIVERSIFIED 1.6%
Travelers Group, Inc. 450,000 27,281,250
22
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
STRONG GROWTH FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
INSURANCE - PROPERTY & CASUALTY 1.0%
American International Group, Inc. 75,000 $ 10,950,000
MGIC Investment Corporation 100,000 5,706,250
--------------
16,656,250
LEISURE SERVICE 1.1%
Carnival Corporation 450,000 17,831,250
MEDIA - PUBLISHING 1.0%
Time Warner, Inc. 200,000 17,087,500
MEDIA - RADIO/TV 3.8%
Chancellor Media Corporation (b) 175,000 8,689,844
Clear Channel Communications, Inc. (b) 200,000 21,825,000
Heftel Broadcasting Corporation Class A (b) 200,000 8,950,000
Jacor Communications, Inc. (b) 100,000 5,900,000
Tele-Communications, Inc. Liberty Media Group
Series A (b) 350,000 13,584,375
Viacom International, Inc. (b) 100,000 5,825,000
--------------
64,774,219
MORTGAGE & RELATED SERVICE 1.4%
Federal Home Loan Mortgage Corporation 300,000 14,118,750
Federal National Mortgage Association 150,000 9,112,500
--------------
23,231,250
OIL WELL EQUIPMENT & SERVICE 0.5%
Camco International, Inc. 110,000 8,566,250
PERSONAL & COMMERCIAL LENDING 1.9%
Associates First Capital Corporation 175,000 13,453,125
Beneficial Corporation 25,000 3,829,687
Household International, Inc. 300,000 14,925,000
--------------
32,207,812
REAL ESTATE 0.4%
Patriot American Hospitality, Inc. 250,000 5,984,375
RETAIL - DEPARTMENT STORE 4.1%
Kohl's Corporation (b) 1,250,000 64,843,750
Fred Meyer, Inc. (b) 100,000 4,250,000
--------------
69,093,750
RETAIL - DISCOUNT & VARIETY 2.1%
Dollar Tree Stores, Inc. (b) 825,000 33,515,625
99 Cents Only Stores (b) 39,000 1,618,500
--------------
35,134,125
RETAIL - DRUG STORE 2.0%
CVS Corporation 420,000 16,353,750
Walgreen Company 445,000 18,384,062
--------------
34,737,812
RETAIL - FOOD CHAIN 1.3%
Safeway, Inc. (b) 525,000 21,360,938
RETAIL - MAJOR CHAIN 2.6%
Dayton Hudson Corporation 330,000 16,005,000
Wal-Mart Stores, Inc. 450,000 27,337,500
--------------
43,342,500
RETAIL - RESTAURANT 1.6%
Outback Steakhouse, Inc. (b) 225,000 8,775,000
Starbucks Corporation (b) 350,000 18,703,125
--------------
27,478,125
RETAIL - SPECIALTY 7.0%
Best Buy Company, Inc. (b) 200,000 7,225,000
Gap, Inc. 220,000 13,557,500
The Home Depot, Inc. 225,000 18,689,063
Lowe's Companies, Inc. 950,000 38,534,375
Michaels Stores, Inc. (b) 100,000 3,528,125
Office Depot, Inc. (b) 225,000 7,101,562
Stage Stores, Inc. (b) 350,000 15,837,500
Staples, Inc. (b) 500,000 14,468,750
--------------
118,941,875
SAVINGS & LOAN 0.8%
TCF Financial Corporation 300,000 8,850,000
Washington Mutual, Inc. 125,000 5,429,688
--------------
14,279,688
SOAP & CLEANING PREPARATION 0.7%
The Procter & Gamble Company 125,000 11,382,813
TELECOMMUNICATION EQUIPMENT 5.4%
Advanced Fibre Communications, Inc. (b) 325,000 13,020,312
CIENA Corporation (b) 185,000 12,880,625
Lucent Technologies, Inc. 380,000 31,611,250
RELTEC Corporation (b) 225,000 10,125,000
Tellabs, Inc. (b) 325,000 23,278,125
--------------
90,915,312
TELECOMMUNICATION SERVICE 2.0%
Intermedia Communications, Inc. (b) 200,000 8,387,500
WorldCom, Inc. (b) 540,000 26,156,250
--------------
34,543,750
- ------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $1,169,321,841) 1,649,004,663
- ------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS 0.0%
Crystal Dynamics, Inc. Series D (Acquired 7/07/95;
Cost $1,000,005) (b) (d) 133,334 400,002
- ------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS (COST $1,000,005) 400,002
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 3.6%
COMMERCIAL PAPER 0.0%
INTEREST BEARING, DUE UPON DEMAND
General Mills, Inc., 5.26% $ 100 100
REPURCHASE AGREEMENTS 3.5%
Cantor Fitzgerald & Company, Inc. (Dated 6/30/98),
5.68%, Due 7/01/98 (Repurchase proceeds
$59,509,388); Collateralized by: $29,185,000
United States Treasury Bonds, 5.875%, Due
3/31/99 (Market Value $29,659,256) and
$23,963,000 United States Treasury Bonds,
8.00%, Due 11/15/21 (Market Value $31,032,085) 59,500,000 59,500,000
UNITED STATES GOVERNMENT ISSUES 0.1%
United States Treasury Bills, Due 8/06/98 1,492,575 1,492,695
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS (COST $60,992,675) 60,992,795
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES (COST $1,231,314,527) 100.8% 1,710,397,460
Other Assets and Liabilities, Net (0.8%) (14,380,225)
- ------------------------------------------------------------------------------
NET ASSETS 100.0% $1,696,017,235
==============================================================================
23
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) JUNE 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
===============================================================================
STRONG GROWTH FUND (CONTINUED)
===============================================================================
- -------------------------------------------------------------------------------
WRITTEN OPTIONS ACTIVITY
- -------------------------------------------------------------------------------
Contracts Premiums
- -------------------------------------------------------------------------------
Options outstanding at beginning of period -- $ --
Options written during the period 7,250 3,797,028
Options closed (6,600) (3,010,879)
Options expired -- --
Options exercised -- --
----- ----------
Options outstanding at end of period 650 $ 786,149
===== ==========
Closed options resulted in a capital loss of $338,161.
WRITTEN OPTIONS DETAIL
- -------------------------------------------------------------------------------
Value
Contracts (Note 2)
- -------------------------------------------------------------------------------
Pfizer, Inc. (Strike Price is $100.00. Expiration
date is 8/21/98. Premiums Received $786,149.) 650 ($715,000)
===============================================================================
STRONG GROWTH 20 FUND
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
COMMON STOCKS 95.9%
COMMERCIAL SERVICE 13.0%
Paychex, Inc. 40,000 $ 1,627,500
Robert Half International, Inc. (b) 50,000 2,793,750
Romac International, Inc. (b) 95,000 2,885,625
-----------
7,306,875
COMPUTER - PERSONAL & WORKSTATION 2.0%
Dell Computer Corporation (b) 12,000 1,113,750
COMPUTER SOFTWARE 23.8%
America Online, Inc. (b) 15,000 1,590,000
Ascend Communications, Inc. (b) 57,000 2,825,062
CBT Group PLC Sponsored ADR (b) 35,000 1,872,500
Cisco Systems, Inc. (b) 25,000 2,301,563
Citrix Systems, Inc. (b) 25,000 1,709,375
HBO & Company 50,000 1,762,500
Saville Systems PLC Sponsored ADR (b) 25,000 1,253,125
-----------
13,314,125
DIVERSIFIED OPERATIONS 2.2%
Monsanto Company 22,000 1,229,250
FINANCE - MISCELLANEOUS 3.1%
Metris Companies, Inc. 27,000 1,721,250
FOOD 4.6%
American Italian Pasta Company (b) 69,000 2,570,250
HEALTHCARE - DRUG/DIVERSIFIED 6.8%
Pfizer, Inc. 20,000 2,173,750
Warner-Lambert Company 24,000 1,665,000
-----------
3,838,750
HEALTHCARE - MEDICAL SUPPLY 4.8%
McKesson Corporation 33,000 2,681,250
INSURANCE - DIVERSIFIED 2.2%
Travelers Group, Inc. 20,000 1,212,500
RETAIL - DEPARTMENT STORE 7.7%
Kohl's Corporation (b) 83,000 4,305,625
RETAIL - DISCOUNT & VARIETY 5.4%
Dollar Tree Stores, Inc. (b) 75,000 3,046,875
RETAIL - FOOD CHAIN 5.1%
Safeway, Inc. (b) 70,000 2,848,125
RETAIL - SPECIALTY 4.6%
Lowe's Companies, Inc. 64,000 2,596,000
TELECOMMUNICATION EQUIPMENT 7.8%
Advanced Fibre Communications, Inc. (b) 30,000 1,201,875
RELTEC Corporation (b) 30,000 1,350,000
Tellabs, Inc. (b) 25,000 1,790,625
-----------
4,342,500
TELECOMMUNICATION SERVICE 2.8%
WorldCom, Inc. (b) 33,000 1,598,438
- ------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $44,647,556) 53,725,563
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 4.3%
COMMERCIAL PAPER 0.4%
INTEREST BEARING, DUE UPON DEMAND
Johnson Controls, Inc., 5.26% $ 230,600 230,600
Warner-Lambert Company, 5.25% 100 100
-----------
230,700
REPURCHASE AGREEMENTS 3.7%
Barclays Capital, Inc. (Dated 6/30/98), 8.875%,
Due 7/01/98 (Repurchase proceeds $2,100,321);
Collateralized by: $2,095,000 United States
Treasury Notes, Due 11/15/98 (Market Value
$2,150,053) (e) 2,100,000 2,100,000
UNITED STATES GOVERNMENT ISSUES 0.2%
United States Treasury Bills, Due 8/06/98 99,505 99,513
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS (COST $2,430,205) 2,430,213
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES (COST $47,077,761) 100.2% 56,155,776
Other Assets and Liabilities, Net (0.2%) (128,512)
- ------------------------------------------------------------------------------
NET ASSETS 100.0% $56,027,264
==============================================================================
WRITTEN OPTIONS ACTIVITY
- -------------------------------------------------------------------------------
Contracts Premiums
- -------------------------------------------------------------------------------
Options outstanding at beginning of period -- $ --
Options written during the period 1,530 883,260
Options closed (1,480) (822,787)
Options expired -- --
Options exercised -- --
----- --------
Options outstanding at end of period 50 $ 60,473
===== ========
Closed options resulted in a capital gain of $70,642.
WRITTEN OPTIONS DETAIL
- -------------------------------------------------------------------------------
Value
Contracts (Note 2)
- -------------------------------------------------------------------------------
Pfizer, Inc. (Strike Price is $100.00. Expiration
date is 8/21/98. Premiums Received $60,473.) 50 ($55,000)
24
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
STRONG MID CAP FUND
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
COMMON STOCKS 90.5%
AEROSPACE & DEFENSE 1.7%
Kellstrom Industries, Inc. (b) 13,500 $ 391,078
COMMERCIAL SERVICE 1.6%
Outdoor Systems, Inc. (b) 8,925 249,900
RemedyTemp, Inc. Class A (b) 3,700 107,531
----------
357,431
COMPUTER - PERIPHERAL EQUIPMENT 1.1%
Storage Technology Corporation (b) 5,800 251,575
COMPUTER SERVICE 6.4%
American Management Systems, Inc. (b) 7,500 224,531
Fiserv, Inc. (b) 5,250 222,961
National Data Corporation 5,300 231,875
Shared Medical Systems Corporation 7,000 514,063
Systems & Computer Technology Corporation (b) 8,800 237,600
----------
1,431,030
COMPUTER SOFTWARE 14.2%
America Online, Inc. (b) 3,300 349,800
Ascend Communications, Inc. (b) 5,400 267,638
CBT Group PLC Sponsored ADR (b) 5,600 299,600
Cadence Design Systems, Inc. (b) 4,300 134,375
Citrix Systems, Inc. (b) 3,300 225,638
Compuware Corporation (b) 8,400 429,450
J.D. Edwards & Company (b) 6,300 270,506
FORE Systems, Inc. (b) 10,300 272,950
IDX Systems Corporation (b) 5,200 239,525
Platinum Technology, Inc. (b) 12,000 342,750
Saville Systems PLC Sponsored ADR (b) 1,900 95,237
Veritas Software Corporation (b) 6,600 273,075
----------
3,200,544
COMPUTER SYSTEMS 1.0%
Policy Management Systems Corporation (b) 5,600 219,800
COSMETIC & PERSONAL CARE 2.8%
General Nutrition Companies, Inc. (b) 9,400 292,575
Rexall Sundown, Inc. (b) 9,600 338,400
----------
630,975
ELECTRONICS - SEMICONDUCTOR/COMPONENT 4.6%
Celestica, Inc. (b) 1,000 18,750
PMC-Sierra, Inc. (b) 5,100 239,062
Sanmina Corporation (b) 3,400 147,475
Uniphase Corporation (b) 5,500 345,297
Vitesse Semiconductor Corporation (b) 9,400 290,225
----------
1,040,809
FINANCE - MISCELLANEOUS 1.1%
Heller Financial, Inc. (b) 8,600 258,000
FOOD 1.7%
International Home Foods, Inc. (b) 7,900 179,725
Suiza Foods Corporation (b) 3,200 191,000
----------
370,725
HEALTHCARE - BIOMEDICAL/GENETIC 2.4%
Biogen, Inc. (b) 5,300 259,700
Medimmune, Inc. (b) 4,600 286,925
----------
546,625
HEALTHCARE - DRUG/DIVERSIFIED 2.3%
Elan Corporation PLC ADR (b) 3,800 244,387
Mylan Laboratories, Inc. 9,000 270,563
----------
514,950
HEALTHCARE - INSTRUMENTATION 1.9%
Arterial Vascular Engineering, Inc. (b) 4,900 175,175
IDEXX Laboratories, Inc. (b) 10,200 253,725
----------
428,900
HEALTHCARE - MEDICAL SUPPLY 3.5%
Becton, Dickinson & Company 3,500 271,688
Safeskin Corporation (b) 5,800 238,525
Steris Corporation (b) 4,300 273,453
----------
783,666
HEALTHCARE - PATIENT CARE 4.7%
Covance, Inc. (b) 15,000 337,500
Renal Care Group, Inc. (b) 3,900 171,844
Total Renal Care Holdings, Inc. (b) 4,400 151,800
United Healthcare Corporation (b) 3,400 215,900
Universal Health Services, Inc. Class B (b) 2,900 169,287
----------
1,046,331
HOUSEHOLD APPLIANCES & FURNISHINGS 1.1%
Pillowtex Corporation 6,200 248,775
INSURANCE - PROPERTY & CASUALTY 0.7%
AMBAC, Inc. 2,600 152,100
LEISURE SERVICE 1.5%
Royal Caribbean Cruises, Ltd. 4,200 333,900
MEDIA - RADIO/TV 2.4%
Heftel Broadcasting Corporation Class A (b) 5,700 255,075
Sinclair Broadcast Group, Inc. Class A (b) 9,600 276,000
----------
531,075
OFFICE AUTOMATION 1.7%
Global Imaging Systems, Inc. (b) 27,000 378,000
OIL - NORTH AMERICAN EXPLORATION & PRODUCTION 3.1%
Cross Timber Oil Company 25,000 476,563
EEX Corporation (b) 23,900 224,062
----------
700,625
OIL WELL EQUIPMENT & SERVICE 0.7%
Global Industries, Ltd. (b) 9,900 167,063
PERSONAL & COMMERCIAL LENDING 1.3%
Franchise Mortgage Acceptance Company (b) 11,300 294,506
POLLUTION CONTROL 1.6%
Allied Waste Industries, Inc. (b) 8,500 204,000
Newpark Resources, Inc. (b) 13,300 147,963
----------
351,963
REAL ESTATE 4.4%
Apartment Investment & Management Company
Class A 10,000 395,000
Highwoods Properties, Inc. 12,000 387,750
Trammell Crow Company (b) 6,300 210,656
----------
993,406
RETAIL - DEPARTMENT STORE 2.4%
Family Dollar Stores, Inc. 16,500 305,250
Proffitts, Inc. (b) 5,600 226,100
----------
531,350
RETAIL - DISCOUNT & VARIETY 1.6%
Dollar Tree Stores, Inc. (b) 8,925 362,578
RETAIL - FOOD CHAIN 0.6%
Whole Foods Marketing, Inc. (b) 2,300 139,150
25
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) JUNE 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
===============================================================================
STRONG MID CAP FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
RETAIL - SPECIALTY 9.6%
Abercrombie & Fitch Company Class A (b) 5,900 $ 259,600
Barnes & Noble, Inc. (b) 6,200 232,112
Borders Group, Inc. (b) 3,200 118,400
Brylane, Inc. (b) 6,300 289,800
Ethan Allen Corporation 4,900 244,694
Fingerhut Companies, Inc. 8,100 267,300
Furniture Brands International, Inc. (b) 5,800 162,762
The Men's Wearhouse, Inc. (b) 5,850 193,050
Stage Stores, Inc. (b) 5,800 262,450
Williams-Sonoma, Inc. (b) 3,800 120,887
-----------
2,151,055
TELECOMMUNICATION EQUIPMENT 3.1%
Advanced Fibre Communications, Inc. (b) 6,100 244,381
Comverse Technology, Inc. (b) 4,500 233,438
Tekelec (b) 5,000 223,750
-----------
701,569
TELECOMMUNICATION SERVICE 3.7%
IDT Corporation (b) 3,000 90,188
NEXTLINK Communications, Inc. (b) 4,800 181,800
RSL Communications, Ltd. Class A (b) 8,200 246,000
SkyTel Communications, Inc. (b) 13,300 311,303
-----------
829,291
- ------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $16,669,055) 20,338,845
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 9.9%
COMMERCIAL PAPER 4.1%
INTEREST BEARING, DUE UPON DEMAND
American Family Financial Services, Inc., 5.25% $ 100 100
General Mills, Inc., 5.26% 151,100 151,100
Johnson Controls, Inc., 5.26% 507,700 507,700
Pitney Bowes Credit Corporation, 5.26% 258,300 258,300
-----------
917,200
REPURCHASE AGREEMENTS 5.8%
Barclays Capital, Inc. (Dated 6/30/98), 5.50%,
Due 7/01/98 (Repurchase proceeds $1,300,199);
Collateralized by: $1,300,000 United States
Treasury Notes, 8.875%, Due 11/15/98 (Market
Value $1,330,984) (e) 1,300,000 1,300,000
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS (COST $2,217,200) 2,217,200
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES (COST $18,886,255) 100.4% 22,556,045
Other Assets and Liabilities, Net (0.4%) (81,501)
- ------------------------------------------------------------------------------
NET ASSETS 100.0% $22,474,544
==============================================================================
===============================================================================
STRONG OPPORTUNITY FUND
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
COMMON STOCKS 87.1%
AIRLINE 0.1%
Air New Zealand, Ltd. Class B 2,358,000 $ 2,530,342
AUTO & TRUCK PARTS 1.6%
The Goodyear Tire & Rubber Company 167,700 10,806,169
Magna International, Inc. Class A 361,000 24,773,625
-----------
35,579,794
BANK - MONEY CENTER 4.2%
Banca di Roma (b) 1,225,000 2,471,322
BankAmerica Corporation 325,000 28,092,188
Banque Nationale de Paris 13,000 1,059,561
Chase Manhattan Corporation 400,000 30,200,000
Nordbanken Holding AB 380,000 2,781,009
Toronto-Dominion Bank 600,000 27,270,869
-----------
91,874,949
BANK - SUPER REGIONAL 1.8%
Mellon Bank Corporation 195,000 13,576,875
Norwest Corporation 700,000 26,162,500
-----------
39,739,375
CHEMICAL - SPECIALTY 2.4%
Praxair, Inc. 554,000 25,934,125
Solutia, Inc. 935,000 26,822,813
-----------
52,756,938
COMPUTER - PERIPHERAL EQUIPMENT 3.1%
American Power Conversion Corporation (b) 975,000 29,250,000
Quantum Corporation (b) 1,185,000 24,588,750
Seagate Technology, Inc. (b) 543,000 12,930,188
-----------
66,768,938
COMPUTER - PERSONAL & WORKSTATION 2.6%
Hewlett-Packard Company 400,000 23,950,000
Sun Microsystems, Inc. (b) 765,000 33,229,688
-----------
57,179,688
COMPUTER SOFTWARE 0.6%
Sybase, Inc. (b) 1,850,000 12,892,188
DIVERSIFIED OPERATIONS 1.5%
Whitman Corporation 1,440,000 33,030,000
ELECTRIC POWER 1.7%
NIPSCO Industries, Inc. 1,298,000 36,344,000
ELECTRONIC PARTS DISTRIBUTION 1.3%
Arrow Electronics, Inc. (b) 850,000 18,487,500
Marshall Industries (b) 371,300 10,117,925
-----------
28,605,425
ELECTRONIC PRODUCTS - MISCELLANEOUS 2.4%
AVX Corporation 1,274,000 20,463,625
General Motors Corporation Class H 685,000 32,280,625
-----------
52,744,250
ELECTRONICS - SEMICONDUCTOR/COMPONENT 3.9%
KLA-Tencor Corporation (b) 1,000,000 27,687,500
Solectron Corporation (b) 680,000 28,602,500
Texas Instruments, Inc. 500,000 29,156,250
-----------
85,446,250
FOOD 4.6%
ConAgra, Inc. 990,000 31,370,625
Nestle SA Sponsored ADR 290,000 31,030,000
Unilever NV 460,000 36,311,250
-----------
98,711,875
HEALTHCARE - MEDICAL SUPPLY 1.1%
Sybron International Corporation (b) 925,000 23,356,250
HEALTHCARE - PATIENT CARE 1.2%
United Healthcare Corporation (b) 415,000 26,352,500
HOUSEHOLD APPLIANCES & FURNISHINGS 2.0%
Premark International, Inc. 700,000 22,575,000
Rubbermaid, Inc. 620,000 20,576,250
-----------
43,151,250
HOUSING RELATED 1.3%
U.S. Industries, Inc. 1,095,000 27,101,250
26
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
STRONG OPPORTUNITY FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
INSURANCE - DIVERSIFIED 1.4%
CIGNA Corporation 435,000 $ 30,015,000
INSURANCE - MULTI-LINE 0.1%
Skandia Forsakrings AB 170,000 2,424,470
INSURANCE - PROPERTY & CASUALTY 4.1%
ACE, Ltd. 745,000 29,055,000
American International Group, Inc. 205,000 29,930,000
Hartford Financial Services Group, Inc. 250,000 28,593,750
Scor 35,000 2,214,569
--------------
89,793,319
LEISURE SERVICE 0.5%
Gaylord Entertainment Company 349,000 11,255,250
MEDIA - PUBLISHING 1.3%
The E.W. Scripps Company Class A 528,000 28,941,000
MEDIA - RADIO/TV 8.6%
Cable & Wireless Communications PLC (b) 511,000 5,171,271
Cable & Wireless Communications PLC
Sponsored ADR (b) 600,000 30,000,000
Comcast Corporation Class A 925,000 37,549,219
Cox Communications, Inc. Class A (b) 779,300 37,747,344
Tele-Communications, Inc. Liberty Media Group
Series A (b) 1,050,000 40,753,125
Tele-Communications, Inc. TCI Group Series A (b) 949,999 36,515,586
--------------
187,736,545
NATURAL GAS DISTRIBUTION 2.9%
Columbia Gas Systems, Inc. 495,000 27,534,375
Enron Corporation 670,000 36,221,875
--------------
63,756,250
OIL - NORTH AMERICAN EXPLORATION & PRODUCTION 5.0%
Apache Corporation 780,000 24,570,000
Barrett Resources Corporation (b) 670,000 25,083,125
Devon Energy Corporation 660,000 23,058,750
Ocean Energy, Inc. (b) 724,200 14,167,162
Union Pacific Resources Group, Inc. 1,230,000 21,601,875
--------------
108,480,912
OIL - NORTH AMERICAN INTEGRATED 1.2%
USX-Marathon Group 729,000 25,013,812
OIL WELL EQUIPMENT & SERVICE 4.7%
Camco International, Inc. 400,000 31,150,000
Cooper Cameron Corporation (b) 472,800 24,112,800
EVI Weatherford, Inc. (b) 660,800 24,532,200
R&B Falcon Corporation (b) 946,000 21,403,250
--------------
101,198,250
PERSONAL & COMMERCIAL LENDING 1.5%
Household International, Inc. 630,000 31,342,500
PRECIOUS METAL/GEM/STONE 0.9%
Barrick Gold Corporation 1,009,000 19,360,187
REAL ESTATE 1.8%
Ayala Land, Inc. 2,348,400 679,055
CarrAmerica Realty Corporation 360,000 10,215,000
Prologis Trust 1,121,000 28,025,000
Shortland Properties, Ltd. 2,513,625 846,991
--------------
39,766,046
RETAIL - DEPARTMENT STORE 2.7%
Federated Department Stores, Inc. (b) 555,000 29,865,937
May Department Stores Company 420,000 27,510,000
--------------
57,375,937
RETAIL - FOOD CHAIN 1.2%
The Kroger Company (b) 630,000 27,011,250
RETAIL - MAJOR CHAIN 3.1%
Kmart Corporation (b) 1,550,000 29,837,500
Sears Canada, Inc. 536,000 9,989,506
Toys 'R' Us, Inc. (b) 1,145,000 26,979,062
--------------
66,806,068
RETAIL - SPECIALTY 1.6%
Cortefiel SA 45,000 982,469
Office Depot, Inc. (b) 1,060,000 33,456,250
--------------
34,438,719
TELECOMMUNICATION SERVICE 7.1%
AirTouch Communications, Inc. (b) 560,000 32,725,000
MediaOne Group, Inc. (b) 950,000 41,740,625
Omnipoint Corporation (b) 1,250,000 28,671,875
Paging Network, Inc. (b) 2,040,000 28,560,000
United States Cellular Corporation (b) 736,000 22,632,000
--------------
154,329,500
- ------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $1,402,923,554) 1,893,210,277
- ------------------------------------------------------------------------------
PREFERRED STOCKS 0.4%
Henkel KGaA-Vorzug 63,000 6,219,512
Telecom Italia Spa 330,000 1,602,566
- ------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS (COST $4,798,195) 7,822,078
- ------------------------------------------------------------------------------
CORPORATE BONDS 0.8%
Niagara Mohawk Power Corporation Senior
Notes, Series B, 7.00%, Due 10/01/00 $ 17,450,000 17,537,250
- ------------------------------------------------------------------------------
TOTAL CORPORATE BONDS (COST $17,418,765) 17,537,250
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 11.5%
COMMERCIAL PAPER 0.0%
INTEREST BEARING, DUE UPON DEMAND
General Mills, Inc., 5.26% 421,100 421,100
Johnson Controls, Inc., 5.26% 793,900 793,900
Pitney Bowes Credit Corporation, 5.26% 52,400 52,400
--------------
1,267,400
REPURCHASE AGREEMENTS 11.5%
ABN-AMRO Chicago Corporation (Dated 6/30/98),
5.75%, Due 7/01/98 (Repurchase proceeds
$249,439,835); Collateralized by: $343,000,000
United States Treasury Strips, Zero %, Due
5/15/16 - 2/15/18 (Market Value $119,049,840)
and $431,282,000 United States Treasury Strips,
8.75%, Due 5/15/17 - 8/15/20 (Market Value
$135,447,814) (e) 249,400,000 249,400,000
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS (COST $250,667,400) 250,667,400
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES (COST $1,675,807,914) 99.8% 2,169,237,005
Other Assets and Liabilities, Net 0.2% 4,130,971
- ------------------------------------------------------------------------------
NET ASSETS 100.0% $2,173,367,976
==============================================================================
27
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) JUNE 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
===============================================================================
STRONG OPPORTUNITY FUND (CONTINUED)
===============================================================================
- -------------------------------------------------------------------------------
WRITTEN OPTIONS ACTIVITY
- -------------------------------------------------------------------------------
Contracts Premiums
- -------------------------------------------------------------------------------
Options outstanding at beginning of period -- $ --
Options written during the period 7,070 3,501,693
Options closed (1,500) (916,063)
Options expired -- --
Options exercised -- --
----- ----------
Options outstanding at end of period 5,570 $2,585,630
===== ==========
Closed options resulted in a capital gain of $429,608.
WRITTEN OPTIONS DETAIL
- -------------------------------------------------------------------------------
Value
Contracts (Note 2)
- -------------------------------------------------------------------------------
AirTouch Communications, Inc. (Strike Price is $50.00.
Expiration date is 10/16/98. Premium Received $966,114.) 1,650 ($1,650,000)
Comcast Corporation Class A (Strike Price is $32.50.
Expiration date is 10/16/98. Premium Received $362,451.) 950 (1,045,000)
Mellon Bank Corporation (Strike Price is $70.00.
Expiration date is 9/18/98. Premium Received $960,510.) 1,950 (1,035,938)
Tele-Communications, Inc. Class A (Strike Price is $35.00.
Expiration date is 10/16/98. Premium Received $296,555.) 1,020 (516,375)
===============================================================================
STRONG SMALL CAP FUND
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
COMMON STOCKS 84.8%
AEROSPACE & DEFENSE 1.9%
Kellstrom Industries, Inc. (b) 90,000 $ 2,607,188
COMMERCIAL SERVICE 10.0%
Abacus Direct Corporation (b) 28,000 1,454,250
Administaff, Inc. (b) 20,900 964,013
Bright Horizons, Inc. (b) 44,700 1,251,600
Cotelligent Group, Inc. (b) 36,000 841,500
First Consulting Group, Inc. (b) 71,400 1,874,250
Lamar Advertising Company (b) 37,050 1,329,169
Medical Manager Corporation (b) 48,400 1,337,050
MemberWorks, Inc. (b) 40,000 1,290,000
The Metzler Group, Inc. (b) 41,300 1,512,612
RemedyTemp, Inc. Class A (b) 66,300 1,926,844
-----------
13,781,288
COMPUTER SERVICE 8.3%
American Management Systems, Inc. (b) 42,700 1,278,331
CSG Systems International, Inc. (b) 22,700 1,064,062
Envoy Corporation (b) 26,500 1,255,438
Harbinger Corporation (b) 49,950 1,208,165
International Integration, Inc. (b) 15,000 258,750
International Network Services (b) 15,800 647,800
Shared Medical Systems Corporation 35,000 2,570,312
Systems & Computer Technology Corporation (b) 49,700 1,341,900
Tier Technologies, Inc. Class B (b) 100,000 1,781,250
-----------
11,406,008
COMPUTER SOFTWARE 13.7%
Advantage Learning Systems, Inc. (b) 30,100 823,988
Best Software, Inc. (b) 56,600 1,195,675
Datastream Systems, Inc. (b) 64,100 1,221,906
Dendrite International, Inc. (b) 45,700 1,719,462
Documentum, Inc. (b) 11,100 532,800
FileNet Corporation (b) 21,400 617,925
IDX Systems Corporation (b) 12,600 580,387
Legato Systems, Inc. (b) 48,600 1,895,400
Mercury Interactive Corporation (b) 32,500 1,450,312
Platinum Technology, Inc. (b) 80,000 2,285,000
QuadraMed Corporation (b) 80,000 2,185,000
Sapient Corporation (b) 25,800 1,360,950
Sterling Software, Inc. (b) 60,000 1,773,750
Zebra Technologies Corporation (b) 30,000 1,282,500
-----------
18,925,055
ELECTRICAL EQUIPMENT 0.7%
Level One Communications, Inc. (b) 38,800 911,800
ELECTRONICS - SEMICONDUCTOR/COMPONENT 3.5%
EFTC Corporation (b) 135,000 1,755,000
PMC-Sierra, Inc. (b) 32,900 1,542,187
Uniphase Corporation (b) 15,700 985,666
Veeco Instruments, Inc. (b) 21,800 542,275
-----------
4,825,128
FINANCE - MISCELLANEOUS 3.1%
BA Merchant Services, Inc. Class A (b) 150,000 3,028,125
Metris Companies, Inc. 20,000 1,275,000
-----------
4,303,125
FOOD 0.7%
American Italian Pasta Company (b) 25,800 961,050
HEALTHCARE - DRUG/DIVERSIFIED 0.7%
Schein Pharmaceutical, Inc. (b) 35,100 934,537
HEALTHCARE - INSTRUMENTATION 1.2%
IDEXX Laboratories, Inc. (b) 38,500 957,688
Ventana Medical Systems, Inc. (b) 24,400 683,200
-----------
1,640,888
HEALTHCARE - MEDICAL SUPPLY 1.3%
Wesley Jessen VisionCare, Inc. (b) 80,000 1,850,000
HEALTHCARE - PATIENT CARE 4.5%
Advance Paradigm, Inc. (b) 24,100 885,675
Boron, LePore & Associates, Inc. (b) 30,800 1,170,400
Covance, Inc. (b) 52,600 1,183,500
Coventry Health Care, Inc. (b) 36,200 538,475
Province Healthcare Company (b) 59,700 1,652,944
Renal Care Group, Inc. (b) 16,900 744,656
-----------
6,175,650
HEALTHCARE - PRODUCT 0.5%
Hemocleanse, Inc. (Acquired 5/14/96;
Cost $465,000) (b) (d) 155,000 310,000
Horizon Medical Products, Inc. (b) 47,800 451,113
-----------
761,113
HOUSING 1.3%
American Homestar Corporation (b) 75,000 1,795,313
INSURANCE - PROPERTY & CASUALTY 1.6%
LandAmerica Financial Group, Inc. 38,500 2,204,125
LEISURE SERVICE 0.6%
Travel Services International, Inc. (b) 25,400 835,025
28
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
STRONG SMALL CAP FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
MEDIA - RADIO/TV 0.3%
Big City Radio, Inc. Class A (b) 45,800 $ 372,125
OFFICE AUTOMATION 1.5%
Global Imaging Systems, Inc. (b) 147,100 2,059,400
OIL - NORTH AMERICAN EXPLORATION & PRODUCTION 2.8%
Cross Timber Oil Company 120,000 2,287,500
The Houston Exploration Company (b) 67,600 1,550,575
------------
3,838,075
OIL WELL EQUIPMENT & SERVICE 2.3%
Core Laboratories NV (b) 75,000 1,621,875
Gulf Island Fabrication, Inc. (b) 81,900 1,535,625
------------
3,157,500
PERSONAL & COMMERCIAL LENDING 0.8%
Sirrom Capital Corporation 44,800 1,164,800
POLLUTION CONTROL 1.8%
American Disposal Services, Inc. (b) 32,400 1,518,750
Eastern Environmental Services, Inc. (b) 30,300 1,030,200
------------
2,548,950
REAL ESTATE 4.7%
Apartment Investment & Management Company
Class A 60,000 2,370,000
Camden Property Trust 75,000 2,231,250
Highwoods Properties, Inc. 57,600 1,861,200
------------
6,462,450
RETAIL - DISCOUNT & VARIETY 0.5%
Party City Corporation (b) 26,400 775,500
RETAIL - DRUG STORE 0.7%
Duane Reade, Inc. (b) 31,000 930,000
RETAIL - RESTAURANT 2.5%
CEC Entertainment, Inc. (b) 43,000 1,733,438
Rare Hospitality International, Inc. (b) 120,000 1,762,500
------------
3,495,938
RETAIL - SPECIALTY 7.4%
American Eagle Outfitters, Inc. (b) 33,400 1,287,987
Brylane, Inc. (b) 45,000 2,070,000
CSK Auto Corporation (b) 44,900 1,133,725
The Finish Line, Inc. Class A (b) 36,300 1,020,938
Goody's Family Clothing, Inc. (b) 20,100 1,102,988
Linens 'N Things, Inc. (b) 50,400 1,540,350
The Men's Wearhouse, Inc. (b) 17,850 589,050
Michaels Stores, Inc. (b) 43,000 1,517,094
------------
10,262,132
SHOE & APPAREL MANUFACTURING 1.4%
Ashworth, Inc. (b) 90,000 1,248,750
Maxwell Shoe Company, Inc. Class A (b) 33,200 659,850
------------
1,908,600
TELECOMMUNICATION EQUIPMENT 1.9%
Tekelec (b) 13,900 622,025
World Access, Inc. (b) 67,000 2,010,000
------------
2,632,025
TELECOMMUNICATION SERVICE 2.6%
IDT Corporation (b) 37,400 1,124,338
SkyTel Communications, Inc. (b) 38,300 896,459
STAR Telecommunications, Inc. (b) 39,005 872,737
US LEC Corporation Class A (b) 33,300 695,137
------------
3,588,671
- ------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $100,756,445) 117,113,459
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 13.9%
COMMERCIAL PAPER 0.0%
INTEREST BEARING, DUE UPON DEMAND
General Mills, Inc., 5.26% $ 34,900 34,900
Warner Lambert Company, 5.25% 100 100
------------
35,000
REPURCHASE AGREEMENTS 13.9%
Cantor Fitzgerald & Company, Inc. (Dated 6/30/98),
5.68%, Due 7/01/98 (Repurchase proceeds
$19,203,029); Collateralized by: $10,000,000 United
States Treasury Bonds, 7.50%, Due 11/15/16
(Market Value $12,062,500) and $5,350,000 United
States Treasury Bonds, 8.875%, Due 2/15/19
(Market Value $7,523,437) (e) 19,200,000 19,200,000
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS (COST $19,235,000) 19,235,000
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES (COST $119,991,445) 98.7% 136,348,459
Other Assets and Liabilities, Net 1.3% 1,789,222
- ------------------------------------------------------------------------------
NET ASSETS 100.0% $138,137,681
==============================================================================
==============================================================================
STRONG SMALL CAP VALUE FUND
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
COMMON STOCKS 97.1%
AIRLINE 1.3%
Linea Aerea Nacional Chile Sponsored ADR 35,000 $ 284,375
BROKERAGE & INVESTMENT MANAGEMENT 1.5%
Japan OTC Equity Fund, Inc. 60,000 326,250
CHEMICAL - SPECIALTY 1.0%
Lawter International, Inc. 20,000 217,500
COMMERCIAL SERVICE 1.8%
Vallen Corporation (b) 20,000 397,500
COMPUTER SOFTWARE 6.6%
Award Software International, Inc. (b) 40,000 435,000
Optika Imaging Systems, Inc. (b) 219,000 725,438
STB Systems, Inc. (b) 25,000 312,500
----------
1,472,938
ELECTRONICS - SEMICONDUCTOR/COMPONENT 3.0%
Celestica (b) 1,000 18,750
Silicon Valley Group, Inc. (b) 40,000 642,500
----------
661,250
ENGINEERING & CONSTRUCTION 3.5%
Chicago Bridge & Iron Company NV 50,000 775,000
HEALTHCARE - INSTRUMENTATION 2.0%
Acuson Corporation (b) 25,000 454,688
HEALTHCARE - PRODUCT 6.2%
Maxxim Medical, Inc. (b) 35,000 1,015,000
Meridian Diagnostics, Inc. 30,000 371,250
----------
1,386,250
HOUSEHOLD APPLIANCES & FURNISHINGS 3.6%
Nimbus CD International, Inc. (b) 70,000 796,250
29
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) JUNE 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
===============================================================================
STRONG SMALL CAP VALUE FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
HOUSING 3.7%
Newmark Homes Corporation (b) 80,000 $ 830,000
LEISURE PRODUCT 0.9%
Galoob Toys, Inc. (b) 20,000 200,000
MACHINERY - MISCELLANEOUS 1.6%
Global Industrial Technologies, Inc. (b) 24,000 345,000
MACHINERY - TRANSPORTATION EQUIP & PARTS 4.7%
Halter Marine Group, Inc. (b) 45,000 677,813
Stewart & Stevenson Services, Inc. 20,000 360,000
-----------
1,037,813
METAL PRODUCTS & FABRICATION 3.0%
Maverick Tube Corporation (b) 20,000 232,500
Olympic Steel, Inc. (b) 35,000 437,500
-----------
670,000
MORTGAGE & RELATED SERVICE 1.2%
United Panam Financial Corporation (b) 25,700 263,424
OIL - NORTH AMERICAN EXPLORATION & PRODUCTS 5.2%
Lomak Petroleum, Inc. 55,000 574,063
Patina Oil & Gas Corporation 82,200 575,400
-----------
1,149,463
OIL WELL EQUIPMENT & SERVICE 14.2%
Lufkin Industries, Inc. 15,000 495,000
Matrix Service Company (b) 105,400 764,150
Nabors Industries, Inc. (b) 21,500 425,969
Oceaneering International, Inc. (b) 35,000 621,250
Pride International, Inc. (b) 50,000 846,875
-----------
3,153,244
PAPER & FOREST PRODUCTS 2.6%
Schweitzer-Mauduit International, Inc. 4,000 116,000
Wausau-Mosinee Paper Corporation 20,000 457,500
-----------
573,500
PERSONAL & COMMERCIAL LENDING 3.7%
World Acceptance Corporation (b) 145,000 824,688
PRECIOUS METAL/GEM/STONE 2.8%
Cambior, Inc. 30,000 176,250
Getchell Gold Corporation (b) 30,000 450,000
-----------
626,250
REAL ESTATE 1.5%
Chicago Title Corporation (b) 7,000 323,312
RETAIL - RESTAURANT 0.7%
Ryan's Family Steak Houses, Inc. (b) 15,000 153,750
RETAIL - SPECIALTY 9.9%
Barbeques Galore Limited Spons ADR (b) 85,000 680,000
Boise Cascade Office Products Corporation (b) 30,000 465,000
Friedman's, Inc. Class A (b) 14,500 240,156
Heilig-Meyers Company 10,000 123,125
TBC Corporation (b) 70,000 463,750
Trend-Lines, Inc. Class A (b) 50,000 231,250
-----------
2,203,281
STEEL 2.0%
Bethlehem Steel Corporation (b) 35,000 435,312
TELECOMMUNICATION EQUIPMENT 5.3%
Teltrend, Inc. (b) 18,000 309,375
Tollgrade Communications, Inc. (b) 34,000 875,500
-----------
1,184,875
TRUCKING 3.6%
Boyd Brothers Transportation, Inc. (b) 12,500 112,500
Covenant Transport, Inc. Class A (b) 35,000 682,500
-----------
795,000
- ------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $22,467,984) 21,540,913
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 1.2%
COMMERCIAL PAPER 1.2%
INTEREST BEARING, DUE UPON DEMAND
General Mills, Inc., 5.26% $141,200 141,200
Johnson Controls, Inc., 5.26% 84,100 84,100
Pitney Bowes Credit Corporation, 5.26% 46,700 46,700
Warner Lambert Company, 5.25% 100 100
-----------
272,100
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS (COST $272,100) 272,100
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES (COST $22,740,084) 98.3% 21,813,013
Other Assets and Liabilities, Net 1.7% 376,339
- ------------------------------------------------------------------------------
NET ASSETS 100.0% $22,189,352
==============================================================================
WRITTEN OPTIONS ACTIVITY
- -------------------------------------------------------------------------------
Contracts Premiums
- -------------------------------------------------------------------------------
Options outstanding at beginning of period -- $ --
Options written during the period 5,882 1,004,944
Options closed (3,390) (574,709)
Options expired (170) (33,888)
Options exercised (33) (5,394)
----- ----------
Options outstanding at end of period 2,289 $ 390,953
===== ==========
Closed, exercised and expired options resulted in a capital gain of $266,923.
WRITTEN OPTIONS DETAIL
- -------------------------------------------------------------------------------
Value
Contracts (Note 2)
- -------------------------------------------------------------------------------
Acuson Corporation
(Strike Price is $17.50. Expiration date is 7/17/98.
Premium Received $27,362.) 150 ($16,875)
(Strike Price is $20.00. Expiration date is 7/17/98.
Premium Received $4,275.) 50 (938)
(Strike Price is $20.00. Expiration date is 10/16/98.
Premium Received $7,350.) 50 (5,312)
Bethlehem Steel Corporation (Strike Price is $12.50.
Expiration date is 7/17/98. Premium Received $7,037.) 50 (2,344)
Boise Cascade Office Products Corporation
(Strike Price is $20.00. Expiration date is 8/21/98.
Premium Received $3,987.) 25 (625)
(Strike Price is $17.50. Expiration date is 11/20/98.
Premium Received $16,074.) 100 (6,875)
Galoob Toys, Inc. (Strike Price is $12.50. Expiration
date is 8/21/98. Premium Received $18,299.) 150 (4,688)
Getchell Gold Corporation (Strike Price is $30.00.
Expiration date is 9/18/98. Premium Received $4,612.) 25 (625)
30
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
STRONG SMALL CAP VALUE FUND (CONTINUED)
===============================================================================
- -------------------------------------------------------------------------------
WRITTEN OPTIONS DETAIL (CONTINUED)
- -------------------------------------------------------------------------------
Value
Contracts (Note 2)
- -------------------------------------------------------------------------------
Halter Marine Group, Inc. (Strike Price is $17.50.
Expiration date is 9/18/98. Premium Received $20,867.) 75 ($ 5,625)
Maverick Tube Corporation (Strike Price is $17.50.
Expiration date is 7/17/98. Premium Received $5,351.) 29 (363)
Maxxim Medical, Inc.
(Strike Price is $25.00. Expiration date is 9/18/98.
Premium Received $30,324.) 100 (46,875)
(Strike Price is $30.00. Expiration date is 9/18/98.
Premium Received $13,862.) 100 (13,750)
Meridian Diagnostics, Inc. (Strike Price is $15.00.
Expiration date is 9/18/98. Premium Received $25,637.) 150 (8,438)
Nabors Industries, Inc.
(Strike Price is $20.00. Expiration date is 7/17/98.
Premium Received $4,300.) 25 (1,875)
(Strike Price is $22.50. Expiration date is 7/17/98.
Premium Received $3,675.) 25 (469)
(Strike Price is $20.00. Expiration date is 9/18/98.
Premium Received $14,430.) 65 (12,594)
(Strike Price is $22.50. Expiration date is 9/18/98.
Premium Received $14,075.) 100 (10,000)
Oceaneering International, Inc.
(Strike Price is $15.00. Expiration date is 7/17/98.
Premium Received $4,769.) 25 (7,031)
(Strike Price is $17.50. Expiration date is 7/17/98.
Premium Received $8,706.) 75 (5,625)
(Strike Price is $20.00. Expiration date is 7/17/98.
Premium Received $20,712.) 75 (1,406)
(Strike Price is $20.00. Expiration date is 10/16/98.
Premium Received $7,112.) 25 (2,188)
Olympic Steel, Inc. (Strike Price is $15.00. Expiration
date is 11/20/98. Premium Received $5,787.) 50 (2,032)
Pride International, Inc.
(Strike Price is $20.00. Expiration date is 7/17/98.
Premium Received $3,700.) 50 (625)
(Strike Price is $17.50. Expiration date is 10/16/98.
Premium Received $21,291.) 90 (17,438)
(Strike Price is $20.00. Expiration date is 10/16/98.
Premium Received $13,212.) 75 (8,438)
(Strike Price is $22.50. Expiration date is 10/16/98.
Premium Received $8,287.) 50 (2,813)
STB Systems, Inc. (Strike Price is $12.50. Expiration
date is 7/17/98. Premium Received $3,620.) 40 (3,125)
Silicon Valley Group, Inc.
(Strike Price is $17.50. Expiration date is 7/17/98.
Premium Received $11,575.) 100 (1,875)
(Strike Price is $17.50. Expiration date is 9/18/98.
Premium Received $15,012.) 100 (10,625)
(Strike Price is $20.00. Expiration date is 9/18/98.
Premium Received $19,179.) 65 (2,844)
Wausau-Mosinee Paper Corporation
(Strike Price is $20.00. Expiration date is 11/20/98.
Premium Received $17,824.) 100 (25,625)
(Strike Price is $22.50. Expiration date is 11/20/98.
Premium Received $8,650.) 100 (15,000)
- -------------------------------------------------------------------------------
LEGEND
- -------------------------------------------------------------------------------
(a) Short-term investments include any security which has a maturity of
less than one year.
(b) Non-income producing security.
(c) All or a portion of security pledged to cover margin requirements for
futures contracts.
(d) Restricted security.
(e) See note 2(H) of notes to financial statements.
(f) Affiliated issuer. (See note 6 of notes to financial statements.)
Percentages are stated as a percent of net assets.
See notes to financial statements.
31
<PAGE>
<TABLE>
STATEMENTS OF ASSETS AND LIABILITIES
- -------------------------------------------------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
(In Thousands, Except Per Share Amounts)
<CAPTION>
STRONG COMMON STRONG STRONG STRONG GROWTH
STOCK FUND DISCOVERY FUND GROWTH FUND 20 FUND
------------- -------------- ----------- -------------
ASSETS:
<S> <C> <C> <C> <C>
Investments in Securities, at Value
Unaffiliated Issuers (Cost of $1,346,454, $330,476,
$1,231,315 and $47,078, respectively) $1,621,451 $372,450 $1,710,397 $56,156
Affiliated Issuers (Cost of $16,314, $10,548, $0
and $0, respectively) 36,456 4,313 -- --
Receivable for Securities Sold 7,982 6,459 -- --
Receivable for Fund Shares Sold 11 1 1,989 50
Dividends and Interest Receivable 807 101 369 8
Other Assets 686 -- -- 14
---------- -------- ---------- -------
Total Assets 1,667,393 383,324 1,712,755 56,228
LIABILITIES:
Payable for Securities Purchased 3,565 5,918 15,108 135
Written Options, at Value (Premiums Received of
$4,487, $0, $786 and $60, respectively) 7,104 -- 715 55
Payable for Fund Shares Redeemed 68 192 169 --
Accrued Operating Expenses and Other Liabilities 87 220 746 11
---------- -------- ---------- -------
Total Liabilities 10,824 6,330 16,738 201
---------- -------- ---------- -------
NET ASSETS $1,656,569 $376,994 $1,696,017 $56,027
========== ======== ========== =======
NET ASSETS CONSIST OF:
Capital Stock (par value and paid-in capital) $1,263,765 $343,818 $1,224,122 $47,326
Accumulated Net Investment Loss (117) (1,048) (5,032) (210)
Undistributed Net Realized Gain (Loss) 101,421 (1,481) (2,227) (172)
Net Unrealized Appreciation 291,500 35,705 479,154 9,083
---------- -------- ---------- -------
Net Assets $1,656,569 $376,994 $1,696,017 $56,027
========== ======== ========== =======
Capital Shares Outstanding (Unlimited Number Authorized) 73,066 20,577 79,627 4,296
NET ASSET VALUE PER SHARE $22.67 $18.32 $21.30 $13.04
====== ====== ====== ======
32
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
- -----------------------------------------------------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
(In Thousands, Except Per Share Amounts)
<CAPTION>
STRONG MID STRONG STRONG SMALL STRONG SMALL CAP
CAP FUND OPPORTUNITY FUND CAP FUND VALUE FUND
---------- ---------------- ------------ ----------------
ASSETS:
<S> <C> <C> <C> <C>
Investments in Securities, at Value
(Cost of $18,886, $1,675,808, $119,991 and
$22,740, respectively) $22,556 $2,169,237 $136,348 $21,813
Receivable for Securities Sold 519 13,493 4,729 534
Receivable for Fund Shares Sold -- 191 15 112
Dividends and Interest Receivable 7 1,169 48 --
Other Assets 50 159 46 30
------- ---------- -------- -------
Total Assets 23,132 2,184,249 141,186 22,489
LIABILITIES:
Payable for Securities Purchased 522 6,384 2,974 21
Written Options, at Value (Premiums Received of
$0, $2,586, $0 and $391, respectively) -- 4,247 -- 245
Payable for Fund Shares Redeemed 91 89 32 --
Accrued Operating Expenses and Other Liabilities 44 161 42 34
------- ---------- -------- -------
Total Liabilities 657 10,881 3,048 300
------- ---------- -------- -------
NET ASSETS $22,475 $2,173,368 $138,138 $22,189
======= ========== ======== =======
NET ASSETS CONSIST OF:
Capital Stock (par value and paid-in capital) $18,430 $1,522,639 $132,841 $22,585
Undistributed Net Investment Income (Loss) (198) 516 (855) (51)
Undistributed Net Realized Gain (Loss) 573 158,446 (10,205) 436
Net Unrealized Appreciation (Depreciation) 3,670 491,767 16,357 (781)
------- ---------- -------- -------
Net Assets $22,475 $2,173,368 $138,138 $22,189
======= ========== ======== =======
Capital Shares Outstanding (Unlimited Number Authorized) 1,704 52,219 11,173 1,891
NET ASSET VALUE PER SHARE $13.19 $41.62 $12.36 $11.73
====== ====== ====== ======
33
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------
For the Six Months Ended June 30, 1998 (Unaudited)
(In Thousands)
<CAPTION>
STRONG COMMON STRONG STRONG STRONG GROWTH
STOCK FUND DISCOVERY FUND GROWTH FUND 20 FUND
------------- -------------- ----------- -------------
INCOME:
<S> <C> <C> <C> <C>
Dividends - Unaffiliated Issuers $ 5,569 $ 750 $ 3,106 $ 79
Dividends - Affiliated Issuers 558 -- -- --
Interest 3,158 738 1,891 158
-------- ------- -------- ------
Total Income 9,285 1,488 4,997 237
EXPENSES:
Investment Advisory Fees 8,135 1,839 7,889 286
Custodian Fees 63 28 38 4
Shareholder Servicing Costs 922 398 1,574 83
Federal and State Registration Fees 77 16 79 51
Other 205 98 450 22
-------- ------- -------- ------
Total Expenses 9,402 2,379 10,030 446
-------- ------- -------- ------
NET INVESTMENT INCOME (LOSS) (117) (891) (5,033) (209)
REALIZED AND UNREALIZED GAIN (LOSS):
Net Realized Gain (Loss) on:
Investments in Unaffiliated Issuers 109,765 29,544 66,890 3,017
Investments in Affiliated Issuers 503 (616) -- --
Futures Contracts, Options and Forward Foreign
Currency Contracts (2,776) (489) (984) 75
Foreign Currencies (2) -- -- --
-------- ------- -------- ------
Net Realized Gain 107,490 28,439 65,906 3,092
Change in Unrealized Appreciation/Depreciation on:
Investments 24,931 1,783 182,110 5,501
Futures Contracts, Options and Forward Foreign
Currency Contracts (3,638) (229) 71 5
Foreign Currencies 396 -- -- --
-------- ------- -------- ------
Net Change in Unrealized Appreciation/Depreciation 21,689 1,554 182,181 5,506
-------- ------- -------- ------
NET GAIN 129,179 29,993 248,087 8,598
-------- ------- -------- ------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $129,062 $29,102 $243,054 $8,389
======== ======= ======== ======
34
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF OPERATIONS (CONTINUED)
- -----------------------------------------------------------------------------------------------------------------------------
For the Six Months Ended June 30, 1998 (Unaudited)
(In Thousands)
<CAPTION>
STRONG MID STRONG STRONG SMALL STRONG SMALL CAP
CAP FUND OPPORTUNITY FUND CAP FUND VALUE FUND
---------- ---------------- ------------ ----------------
(NOTE 1)
INCOME:
<S> <C> <C> <C> <C>
Dividends - Unaffiliated Issuers $ 17 $ 7,148 $ 75 $ 36
Dividends - Affiliated Issuers -- 504 -- --
Interest 31 5,123 193 41
------ -------- ------- ----
Total Income 48 12,775 268 77
EXPENSES:
Investment Advisory Fees 99 10,232 813 69
Custodian Fees 5 73 15 10
Shareholder Servicing Costs 29 1,576 219 19
Federal and State Registration Fees 11 39 12 20
Other 12 339 64 10
------ -------- ------- ----
Total Expenses 156 12,259 1,123 128
------ -------- ------- ----
NET INVESTMENT INCOME (LOSS) (108) 516 (855) (51)
REALIZED AND UNREALIZED GAIN (LOSS):
Net Realized Gain (Loss) on:
Investments 1,074 162,093 10,694 181
Futures Contracts, Options and Forward Foreign
Currency Contracts -- 421 -- 255
Foreign Currencies -- (6) -- --
------ -------- ------- ----
Net Realized Gain 1,074 162,508 10,694 436
Change in Unrealized Appreciation/Depreciation on:
Investments 1,520 110,961 3,163 (927)
Futures Contracts, Options and Forward Foreign
Currency Contracts -- (1,662) -- 146
Foreign Currencies -- 425 -- --
------ -------- ------- ----
Net Change in Unrealized Appreciation/Depreciation 1,520 109,724 3,163 (781)
------ -------- ------- ----
NET GAIN (LOSS) 2,594 272,232 13,857 (345)
------ -------- ------- ----
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $2,486 $272,748 $13,002 ($396)
====== ======== ======= ====
35
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------------
(In Thousands)
STRONG COMMON STOCK FUND STRONG DISCOVERY FUND
------------------------------- -------------------------------
<CAPTION>
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DEC. 31, 1997 JUNE 30, 1998 DEC. 31, 1997
---------------- ------------- ---------------- -------------
(UNAUDITED) (UNAUDITED)
OPERATIONS:
<S> <C> <C> <C> <C>
Net Investment Income (Loss) ($ 117) $ 556 ($ 891) ($ 3,494)
Net Realized Gain 107,490 222,693 28,439 36,232
Net Change in Unrealized Appreciation/Depreciation 21,689 73,870 1,554 7,034
---------- ---------- -------- --------
Net Increase in Net Assets Resulting from Operations 129,062 297,119 29,102 39,772
DISTRIBUTIONS:
From Net Investment Income -- (556) -- --
In Excess of Net Investment Income -- (1,918) -- --
From Net Realized Gains (6,608) (246,268) -- (36,232)
In Excess of Net Realized Gains -- -- -- (7,422)
---------- ---------- -------- --------
Total Distributions (6,608) (248,742) -- (43,654)
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 156,457 294,151 154,686 300,976
Proceeds from Reinvestment of Distributions 6,442 242,397 -- 42,767
Payment for Shares Redeemed (193,611) (263,744) (189,805) (470,643)
---------- ---------- -------- --------
Increase (Decrease) in Net Assets from Capital
Share Transactions (30,712) 272,804 (35,119) (126,900)
---------- ---------- -------- --------
TOTAL INCREASE (DECREASE) IN NET ASSETS 91,742 321,181 (6,017) (130,782)
NET ASSETS:
Beginning of Period 1,564,827 1,243,646 383,011 513,793
---------- ---------- -------- --------
End of Period $1,656,569 $1,564,827 $376,994 $383,011
========== ========== ======== ========
TRANSACTIONS IN SHARES OF THE FUND:
Sold 7,037 13,002 8,578 16,361
Issued in Reinvestment of Distributions 276 11,819 -- 2,569
Redeemed (8,703) (11,814) (10,531) (25,839)
----- ------ ------ ------
Net Increase (Decrease) in Shares of the Fund (1,390) 13,007 (1,953) (6,909)
===== ====== ===== =====
STRONG GROWTH FUND STRONG GROWTH 20 FUND
------------------------------- -------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED PERIOD ENDED
JUNE 30, 1998 DEC. 31, 1997 JUNE 30, 1998 DEC. 31, 1997
---------------- ------------- ---------------- -------------
(UNAUDITED) (UNAUDITED) (NOTE 1)
OPERATIONS:
Net Investment Loss ($ 5,033) ($ 7,215) ($ 209) ($ 68)
Net Realized Gain (Loss) 65,906 184,678 3,092 (2,826)
Net Change in Unrealized Appreciation/Depreciation 182,181 80,535 5,506 3,577
---------- ---------- ------- -------
Net Increase in Net Assets Resulting from Operations 243,054 257,998 8,389 683
DISTRIBUTIONS:
From Net Investment Income -- (92) (1) (370)
From Net Realized Gains -- (201,884) -- --
In Excess of Net Realized Gains -- (60,918) -- --
---------- ---------- ------- -------
Total Distributions -- (262,894) (1) (370)
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 189,096 568,912 19,546 77,081
Proceeds from Reinvestment of Distributions -- 257,296 1 364
Payment for Shares Redeemed (333,257) (532,345) (31,586) (18,080)
---------- ---------- ------- -------
Increase (Decrease) in Net Assets from Capital Share
Transactions (144,161) 293,863 (12,039) 59,365
---------- ---------- ------- -------
TOTAL INCREASE (DECREASE) IN NET ASSETS 98,893 288,967 (3,651) 59,678
NET ASSETS:
Beginning of Period 1,597,124 1,308,157 59,678 --
---------- ---------- ------- -------
End of Period $1,696,017 $1,597,124 $56,027 $59,678
========== ========== ======= =======
TRANSACTIONS IN SHARES OF THE FUND:
Sold 9,748 29,336 1,681 6,862
Issued in Reinvestment of Distributions -- 14,529 -- 33
Redeemed (17,341) (27,349) (2,662) (1,618)
------ ------ ----- -----
Net Increase (Decrease) in Shares of the Fund (7,593) 16,516 (981) 5,277
====== ====== ===== =====
36
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- -----------------------------------------------------------------------------------------------------------------------------
(In Thousands)
STRONG MID CAP FUND STRONG OPPORTUNITY FUND
------------------------------- -------------------------------
<CAPTION>
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED PERIOD ENDED
JUNE 30, 1998 DEC. 31, 1997 JUNE 30, 1998 DEC. 31, 1997
---------------- ------------- ---------------- -------------
(UNAUDITED) (Note 1) (UNAUDITED)
OPERATIONS:
<S> <C> <C> <C> <C>
Net Investment Income (Loss) ($ 108) ($ 125) $ 516 $ 4,721
Net Realized Gain (Loss) 1,074 (466) 162,508 288,375
Net Change in Unrealized Appreciation/Depreciation 1,520 2,149 109,724 83,844
------- ------- ---------- ----------
Net Increase in Net Assets Resulting from Operations 2,486 1,558 272,748 376,940
DISTRIBUTIONS:
From Net Investment Income -- -- (53) (4,721)
In Excess of Net Investment Income -- (6) -- (93)
From Net Realized Gains -- -- (59,367) (261,981)
------- ------- ---------- ----------
Total Distributions -- (6) (59,420) (266,795)
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 17,336 32,746 208,078 337,611
Proceeds from Reinvestment of Distributions -- 6 58,121 260,936
Payment for Shares Redeemed (13,012) (18,639) (231,045) (553,376)
------- ------- ---------- ----------
Increase in Net Assets from Capital Share Transactions 4,324 14,113 35,154 45,171
------- ------- ---------- ----------
TOTAL INCREASE IN NET ASSETS 6,810 15,665 248,482 155,316
NET ASSETS:
Beginning of Period 15,665 -- 1,924,886 1,769,570
------- ------- ---------- ----------
End of Period $22,475 $15,665 $2,173,368 $1,924,886
======= ======= ========== ==========
TRANSACTIONS IN SHARES OF THE FUND:
Sold 1,360 3,136 5,153 8,874
Issued in Reinvestment of Distributions -- 1 1,402 7,155
Redeemed (1,032) (1,760) (5,786) (14,759)
----- ----- ----- ------
Net Increase in Shares of the Fund 328 1,377 769 1,270
===== ===== ===== ======
</TABLE>
<TABLE>
STRONG SMALL CAP FUND STRONG SMALL CAP VALUE FUND
------------------------------- ---------------------------
<CAPTION>
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED
JUNE 30, 1998 DEC. 31, 1997 JUNE 30, 1998
---------------- ------------- ------------------
(UNAUDITED) (UNAUDITED)(NOTE 1)
OPERATIONS:
<S> <C> <C> <C>
Net Investment Loss ($ 855) ($ 1,990) ($ 51)
Net Realized Gain (Loss) 10,694 (4,614) 436
Net Change in Unrealized Appreciation/Depreciation 3,163 1,065 (781)
-------- -------- -------
Net Increase (Decrease) in Net Assets Resulting from
Operations 13,002 (5,539) (396)
DISTRIBUTIONS:
From Net Investment Income (13) -- --
In Excess of Net Investment Income -- (1,721) --
-------- -------- -------
Total Distributions (13) (1,721) --
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 38,152 211,720 38,461
Proceeds from Reinvestment of Distributions 13 1,646 --
Payment for Shares Redeemed (94,874) (181,307) (15,876)
-------- -------- -------
Increase (Decrease) in Net Assets from Capital Share
Transactions (56,709) 32,059 22,585
-------- -------- -------
TOTAL INCREASE (DECREASE) IN NET ASSETS (43,720) 24,799 22,189
NET ASSETS:
Beginning of Period 181,858 157,059 --
-------- -------- -------
End of Period $138,138 $181,858 $22,189
======== ======== =======
TRANSACTIONS IN SHARES OF THE FUND:
Sold 3,072 18,622 3,191
Issued in Reinvestment of Distributions 1 128 --
Redeemed (7,784) (15,868) (1,300)
----- ------ -----
Net Increase (Decrease) in Shares of the Fund (4,711) 2,882 1,891
===== ====== =====
37
See notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
June 30, 1998 (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 Common Stock Fund, Inc.
- Strong Discovery Fund, Inc.
- Strong Growth Fund (a series of Strong Equity Funds, Inc.)
- Strong Growth 20 Fund (a series of Strong Equity Funds, Inc.)
- Strong Mid Cap Fund (a series of Strong Equity Funds, Inc.)
- Strong Opportunity Fund, Inc.
- Strong Small Cap Fund (a series of Strong Equity Funds, Inc.)
- Strong Small Cap Value Fund (a series of Strong Equity Funds, Inc.)
Strong Mid Cap Fund commenced operations on January 2, 1997. The inception
date for Strong Growth 20 Fund is June 30, 1997. Strong Small Cap Value Fund
commenced operations on January 2, 1998.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements.
(A) Security Valuation -- Portfolio securities traded primarily on a
principal securities exchange are valued at the last reported sales price
or the mean of the latest bid and asked prices 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, 1998 were as follows:
AGGREGATE AGGREGATE PERCENT OF
COST FAIR VALUE NET ASSETS
----------- ----------- ----------
Strong Common Stock Fund $13,000,000 $13,000,000 0.8%
Strong Discovery Fund 4,083,927 3,577,185 1.0%
Strong Growth Fund 1,000,005 400,002 0.0%
Strong Small Cap Fund 465,000 310,000 0.2%
(B) Federal Income and Excise Taxes and Distributions to Shareholders -- It
is the Funds' policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to
distribute substantially all of their taxable income to their
shareholders in a manner which results in no tax cost to the Funds.
Therefore, no federal income or excise tax provision is required.
The character of distributions made during the year from net investment
income or net realized gains may differ from the characterization for
federal income tax purposes due to differences in the recognition of
income and expense items for financial statement and tax purposes. Where
appropriate, reclassifications between net asset accounts are made for
such differences that are permanent in nature.
(C) Realized Gains and Losses on Investment Transactions -- Gains or losses
realized on investment transactions are determined by comparing the
identified cost of the security lot sold with the net sales proceeds.
(D) Futures -- Upon entering into a futures contract, the Funds pledge to the
broker cash or other investments equal to the minimum "initial margin"
requirements of the exchange. The Funds also receive from or pay to the
broker an amount of cash equal to the daily fluctuation in the value of
the contract. Such receipts or payments are known as "variation margin"
and are recorded as unrealized gains or losses. When the futures contract
is closed, a realized gain or loss is recorded equal to the difference
between the value of the contract at the time it was opened and the value
at the time it was closed.
38
<PAGE>
- --------------------------------------------------------------------------------
(E) Options -- The Funds may write put or call 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.
(F) Foreign Currency Translation -- Investment securities and other assets
and liabilities initially expressed in foreign currencies are converted
to U.S. dollars based upon current exchange rates. Purchases and sales of
foreign investment securities and income are converted to U.S. dollars
based upon currency exchange rates prevailing on the respective dates of
such transactions. The effect of changes in foreign exchange rates on
realized and unrealized security gains or losses is reflected as a
component of such gains or losses.
(G) Forward Foreign Currency Exchange Contracts -- Forward foreign currency
exchange contracts are valued at the forward rate and are marked-to-
market daily. The change in market value is recorded as an unrealized
gain or loss. When the contract is closed, the Funds record an exchange
gain or loss equal to the difference between the value of the contract at
the time it was opened and the value at the time it was closed.
(H) Repurchase Agreements -- The Funds may enter into repurchase agreements
with institutions that the Funds' investment advisor, Strong Capital
Management, Inc. ("the Advisor") has determined are creditworthy pursuant
to criteria adopted by the Board of Directors. Each repurchase agreement
is recorded at cost. The Funds require that the collateral, represented
by securities (primarily U.S. Government securities), purchased in a
repurchase transaction be maintained in a segregated account with a
custodian in a manner sufficient to enable the Funds to obtain those
securities in the event of a default of the issuer of the repurchase
agreement. On a daily basis, the Advisor monitors the value of the
collateral transferred under each repurchase agreement to ensure the
value of the collateral exceeds the amount owed to the Funds under each
repurchase agreement by at least 2%.
(I) Additional Investment Risks -- The Funds may utilize derivative
instruments including options, futures and other instruments with similar
characteristics to the extent that they are consistent with the Funds'
investment objectives and limitations. The Funds intend to use such
derivative instruments primarily to hedge or protect from adverse
movements in securities prices or interest rates. The use of these
instruments may involve risks such as the possibility of illiquid markets
or imperfect correlation between the value of the instruments and the
underlying securities, or that the counterparty will fail to perform its
obligations.
Foreign denominated assets and forward currency contracts may involve
greater risks than domestic transactions, including currency, political
and economic, regulatory and market risks.
(J) Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements, and the reported amounts of increases
and decreases in net assets from operations during the reporting period.
Actual results could differ from those estimates.
(K) Other -- Investment security transactions are recorded as of the trade
date. Dividend income and distributions to shareholders are recorded on
the ex-dividend date. Interest income is recorded on the accrual basis
and includes amortization of premium and discounts.
3. RELATED PARTY TRANSACTIONS
The Advisor, with whom certain officers and directors of the Funds are
affiliated, provides investment advisory services and shareholder
recordkeeping and related services to the Funds. Investment advisory fees,
which are established by terms of the Advisory Agreements, are based on
annualized rates of 1.00% of the average daily net assets of the Funds.
Advisory fees are subject to reimbursement by the Advisor if a Fund's
operating expenses exceed certain levels. Shareholder recordkeeping and
related service fees are based on contractually established rates for each
open and closed shareholder account. In addition, the Advisor is compensated
for certain other services related to costs incurred for reports to
shareholders.
39
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
The Funds may invest cash reserves in money market funds sponsored and
managed by the Advisor, subject to certain limitations. The terms of such
transactions are identical to those of non-related entities except that, to
avoid duplicate investment advisory fees, advisory fees of each Fund
invested in such money market funds are reduced by an amount equal to
advisory fees paid to the Advisor under its investment advisory agreement
with the money market funds.
Certain information regarding related party transactions for the six months
ended June 30, 1998, is as follows:
PAYABLE TO OTHER SHAREHOLDER UNAFFILIATED
ADVISOR AT SERVICING EXPENSES DIRECTORS'
JUNE 30, 1998 PAID TO ADVISOR FEES
------------- ------------------ ------------
Strong Common Stock Fund $ 44,823 $10,274 $ 8,343
Strong Discovery Fund 30,462 8,720 2,609
Strong Growth Fund 68,132 18,876 8,500
Strong Growth 20 Fund 5,275 1,084 750
Strong Mid Cap Fund 35,824 774 750
Strong Opportunity Fund 114,532 18,200 10,090
Strong Small Cap Fund 26,645 3,647 1,632
Strong Small Cap Value Fund 11,841 424 750
4. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of long-term securities during the six
months ended June 30, 1998, were as follows:
PURCHASES SALES
-------------- --------------
Strong Common Stock Fund $ 839,269,795 $ 917,930,898
Strong Discovery Fund 349,793,408 375,420,308
Strong Growth Fund 1,832,209,173 1,865,348,923
Strong Growth 20 Fund 135,674,241 142,802,330
Strong Mid Cap Fund 23,747,481 21,128,081
Strong Opportunity Fund 888,186,616 968,026,739
Strong Small Cap Fund 196,701,277 271,684,072
Strong Small Cap Value Fund 29,317,765 7,030,820
5. INCOME TAX INFORMATION
The investment cost, gross unrealized appreciation and depreciation on
investments and capital loss carryovers (expiring in varying amounts through
2005) for federal income tax purposes were as follows:
<TABLE>
AT JUNE 30, 1998 AT DECEMBER 31, 1997
---------------------------------------------------------------- --------------------
<CAPTION>
NET
FEDERAL TAX UNREALIZED UNREALIZED APPRECIATION/ NET CAPITAL LOSS
COST APPRECIATION DEPRECIATION DEPRECIATION CARRYOVERS
-------------- ------------ ------------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
Strong Common Stock Fund $1,366,033,510 $386,664,251 ($94,790,534) $291,873,717 $ --
Strong Discovery Fund 342,949,691 60,654,852 (26,841,080) 33,813,772 --
Strong Growth Fund 1,240,733,545 473,471,106 (3,807,191) 469,663,915 --
Strong Growth 20 Fund 47,259,573 8,994,558 (98,355) 8,896,203 2,519,430
Strong Mid Cap Fund 18,887,743 3,931,258 (262,955) 3,668,303 470,793
Strong Opportunity Fund 1,677,556,430 575,547,035 (83,866,460) 491,680,575 --
Strong Small Cap Fund 120,109,424 18,786,912 (2,547,877) 16,239,035 20,126,715
Strong Small Cap Value Fund 22,829,204 1,171,500 (2,187,691) (1,016,191) --
</TABLE>
Under current tax law, the Strong Growth Fund had capital losses of
$38,879,433 which were realized during November and December 1997 and are
being deferred and treated as occurring on the first day of the following
fiscal year.
40
<PAGE>
- --------------------------------------------------------------------------------
6. INVESTMENTS IN AFFILIATES
Affiliated issuers, as defined under the Investment Company Act of 1940,
include those in which the Fund's holdings of an issuer represent 5% or more
of the outstanding voting securities of the issuer, and any other Strong
Fund. A summary of transactions in the securities of these issuers during
the six months ended June 30, 1998 is as follows:
<TABLE>
<CAPTION>
BALANCE OF BALANCE OF DIVIDEND
SHARES OR PAR GROSS GROSS SALES SHARES OR PAR VALUE INCOME
VALUE HELD PURCHASES AND VALUE HELD JUNE 30, JAN. 1 - JUNE 30,
JAN. 1, 1998 AND ADDITIONS REDUCTIONS JUNE 30, 1998 1998 1998
------------- ------------- ----------- ------------- ----------- -----------------
Strong Common Stock Fund
------------------------
<S> <C> <C> <C> <C> <C> <C>
IHOP Corporation 492,000 -- (22,000) 470,000 $19,446,250 $ --
Musicland Stores Corporation 1,900,000 -- (685,000) 1,215,000 17,010,000 --
Strong Institutional Money Fund 36,000,000 -- (36,000,000) -- -- 549,784
Strong Step 1 Money Fund -- 1,000,000 (1,000,000) -- -- 7,931
Strong Discovery Fund
---------------------
Cohr, Inc. 183,100 329,600 -- 512,700 2,627,587 --
Halsey Drug Company, Inc. - Common
Stock 694,220 9,230 (167,800) 535,650 1,272,169 --
Halsey Drug Company, Inc. -
Convertible Bonds $600,000 -- -- $600,000 394,614 --
Halsey Drug Company, Inc. -
Restricted Common Stock 2,820 -- -- 2,820 6,034 --
Halsey Drug Company, Inc. - Warrants 21,429 -- -- 21,429 12,215 --
Strong Opportunity Fund
-----------------------
Strong Institutional Money Fund 30,600,000 -- (30,600,000) -- -- 497,917
Strong Step 1 Money Fund -- 1,000,000 (1,000,000) -- -- 5,721
</TABLE>
41
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
- -----------------------------------------------------------------------------------------------------------------------------
STRONG COMMON STOCK FUND
- -----------------------------------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA(a)
------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
------------------------------------- -----------------------------------------------
<CAPTION>
Net Realized
Net Asset and Unrealized Total In Excess Net Asset
Value, Net Gains from From Net of Net From Net Value,
Beginning Investment (Losses) on Investment Investment Investment Realized Total End of
Period Ended of Period Income Investments Operations Income Income Gains Distributions Period
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
June 30, 1998(c) $21.02 -- $1.74 $1.74 -- -- ($0.09) ($0.09) $22.67
Dec. 31, 1997 20.24 $0.01 4.67 4.68 ($0.01) ($0.03) (3.86) (3.90) 21.02
Dec. 31, 1996 19.77 0.06 3.87 3.93 (0.06) (0.05) (3.35) (3.46) 20.24
Dec. 31, 1995 16.74 0.11 5.25 5.36 (0.10) (0.02) (2.21) (2.33) 19.77
Dec. 31, 1994 17.94 0.04 (0.13) (0.09) (0.04) -- (1.07) (1.11) 16.74
Dec. 31, 1993 15.07 0.04 3.74 3.78 (0.04) -- (0.87) (0.91) 17.94
</TABLE>
<TABLE>
RATIOS AND SUPPLEMENTAL DATA
------------------------------------------------------------------
<CAPTION>
Net Ratio of Net
Assets, Ratio of Investment Average
End of Expenses Income Portfolio Commission
Total Period (In to Average to Average Turnover Rate
Period Ended Return Millions) Net Assets Net Assets Rate Paid(b)
<S> <C> <C> <C> <C> <C> <C>
June 30, 1998(c) +8.3% $1,657 1.1%* 0.0%* 54.5% $0.0588
Dec. 31, 1997 +24.0% 1,565 1.2% 0.0% 117.3% 0.0560
Dec. 31, 1996 +20.5% 1,244 1.2% 0.3% 90.9% 0.0456
Dec. 31, 1995 +32.4% 1,061 1.2% 0.5% 91.5%
Dec. 31, 1994 -0.5% 790 1.3% 0.3% 83.0%
Dec. 31, 1993 +25.2% 762 1.4% 0.2% 80.9%
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund outstanding for the entire period.
(b) Disclosure required, effective for reporting periods beginning after September 1, 1995.
(c) For the six months ended June 30, 1998 (Unaudited). Total return and portfolio turnover rate are not annualized.
</TABLE>
<TABLE>
STRONG DISCOVERY FUND
- ----------------------------------------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA (a)
-----------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
------------------------------------ -------------------------------------------------------
<CAPTION>
Net Realized
Net Asset Net and Unrealized Total In Excess In Excess Net Asset
Value, Investment Gains from From Net of Net From Net of Net Value,
Beginning Income (Losses) on Investment Investment Investment Realized Realized Total End of
Period Ended of Period (Loss) Investments Operations Income Income Gains Gains Distributions Period
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
June 30, 1998(c) $17.00 ($0.04) $1.36 $1.32 -- -- -- -- -- $18.32
Dec. 31, 1997 17.45 (0.16) 2.00 1.84 -- -- ($1.90) ($0.39) ($2.29) 17.00
Dec. 31, 1996 18.96 (0.15) 0.35 0.20 -- ($1.12) (0.59) -- (1.71) 17.45
Dec. 31, 1995 15.67 (0.05) 5.48 5.43 -- (0.10) (2.04) -- (2.14) 18.96
Dec. 31, 1994 18.05 0.16 (1.17) (1.01) ($0.11) (0.58) (0.68) -- (1.37) 15.67
Dec. 31, 1993 16.01 (0.01) 3.48 3.47 -- (0.45) (0.98) -- (1.43) 18.05
</TABLE>
<TABLE>
RATIOS AND SUPPLEMENTAL DATA
--------------------------------------------------------------------
<CAPTION>
Net Ratio of Net
Assets, Ratio of Investment Average
End of Expenses Income Portfolio Commission
Total Period (In to Average to Average Turnover Rate
Period Ended Return Millions) Net Assets Net Assets Rate Paid(b)
<S> <C> <C> <C> <C> <C> <C>
June 30, 1998(c) +7.8% $377 1.3%* (0.5%)* 101.3% $0.0625
Dec. 31, 1997 +10.9% 383 1.4% (0.9%) 169.9% 0.0600
Dec. 31, 1996 +1.5% 514 1.4% (0.3%) 792.8% 0.0339
Dec. 31, 1995 +34.8% 599 1.4% (0.4%) 516.0%
Dec. 31, 1994 -5.7% 388 1.5% 0.7% 606.1%
Dec. 31, 1993 +22.2% 302 1.5% (0.2%) 668.2%
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund outstanding for the entire period.
(b) Disclosure required, effective for reporting periods beginning after September 1, 1995.
(c) For the six months ended June 30, 1998 (Unaudited). Total return and portfolio turnover rate are not annualized.
</TABLE>
<TABLE>
STRONG GROWTH FUND
- -----------------------------------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA(a)
------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
------------------------------------- -----------------------------------------------
<CAPTION>
Net Asset Net Net Realized Total In Excess In Excess Net Asset
Value, Investment and Unrealized from of Net From Net of Net Value,
Beginning Income Gains on Investment Investment Realized Realized Total End of
Period Ended of Period (Loss) Investments Operations Income Gains Gains Distributions Period
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
June 30, 1998(c) $18.31 ($0.07) $3.06 $2.99 -- -- -- -- $21.30
Dec. 31, 1997 18.50 (0.08) 3.41 3.33 -- ($2.70) ($0.82) ($3.52) 18.31
Dec. 31, 1996 15.88 (0.03) 3.13 3.10 ($0.02) (0.46) -- (0.48) 18.50
Dec. 31, 1995 11.61 (0.04) 4.79 4.75 (0.03) (0.16) (0.29) (0.48) 15.88
Dec. 31, 1994 10.00 -- 1.72 1.72 (0.11) -- -- (0.11) 11.61
</TABLE>
<TABLE>
RATIOS AND SUPPLEMENTAL DATA
--------------------------------------------------------------------
<CAPTION>
Net Ratio of Net
Assets, Ratio of Investment Average
End of Expenses Income Portfolio Commission
Total Period (In to Average to Average Turnover Rate
Period Ended Return Millions) Net Assets Net Assets Rate Paid(b)
<S> <C> <C> <C> <C> <C> <C>
June 30, 1998(c) +16.3% $1,696 1.3%* (0.6%)* 120.0% $0.0689
Dec. 31, 1997 +19.1% 1,597 1.3% (0.5%) 295.7% 0.0680
Dec. 31, 1996 +19.5% 1,308 1.3% (0.2%) 294.9% 0.0478
Dec. 31, 1995 +41.0% 643 1.4% (0.5%) 321.2%
Dec. 31, 1994 +17.3% 106 1.6% (0.1%) 385.8%
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund outstanding for the entire period.
(b) Disclosure required, effective for reporting periods beginning after September 1, 1995.
(c) For the six months ended June 30, 1998 (Unaudited). Total return and portfolio turnover rate are not annualized.
</TABLE>
42
<PAGE>
<TABLE>
- --------------------------------------------------------------------------------------------------------------------
STRONG GROWTH 20 FUND
- --------------------------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA(a)
-----------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
-------------------------------------- -------------------------------------
<CAPTION>
Net Asset Net Realized Total In Excess Net Asset
Value, Net and Unrealized from From Net of Net Value,
Beginning Investment Gains on Investment Investment Investment Total End of
Period Ended of Period Loss Investments Operations Income Income Distributions Period
<S> <C> <C> <C> <C> <C> <C> <C> <C>
June 30, 1998(b) $11.31 ($0.05) $1.78 $1.73 ($0.00)(d) -- ($0.00)(d) $13.04
Dec. 31, 1997(c) 10.00 (0.01) 1.40 1.39 -- ($0.08) ($0.08) 11.31
</TABLE>
<TABLE>
RATIOS AND SUPPLEMENTAL DATA
--------------------------------------------------------------------
<CAPTION>
Net Ratio of Net
Assets, Ratio of Investment Average
End of Expenses Income Portfolio Commission
Total Period (In to Average to Average Turnover Rate
Period Ended Return Millions) Net Assets Net Assets Rate Paid
<S> <C> <C> <C> <C> <C> <C>
June 30, 1998(b) +15.3% $56 1.6%* (0.7%)* 258.8% $0.0681
Dec. 31, 1997(c) +13.9% 60 1.4%* (0.3%)* 250.1% 0.0474
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund outstanding for the entire period.
(b) For the six months ended June 30, 1998 (Unaudited). Total return and portfolio turnover rate are not annualized.
(c) For the period from June 30, 1997 (inception) to December 31, 1997. Total return and portfolio turnover rate are
not annualized.
(d) Amount calculated is less than $0.01.
</TABLE>
<TABLE>
STRONG MID CAP FUND
- ---------------------------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA(a)
---------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
-------------------------------------- -------------------------
<CAPTION>
Net Asset Net Realized Total In Excess Net Asset
Value, Net and Unrealized from of Net Value,
Beginning Investment Gain on Investment Investment Total End of
Period Ended of Period Loss Investments Operations Income Distributions Period
<S> <C> <C> <C> <C> <C> <C> <C>
June 30, 1998(b) $11.38 ($0.12) $1.93 $1.81 ($0.00) ($0.00) $13.19
Dec. 31, 1997 10.00 (0.09) 1.47 1.38 (0.00) (0.00) 11.38
</TABLE>
<TABLE>
RATIOS AND SUPPLEMENTAL DATA
--------------------------------------------------------------------
<CAPTION>
Net Ratio of Net
Assets, Ratio of Investment Average
End of Expenses Income Portfolio Commission
Total Period (In to Average to Average Turnover Rate
Period Ended Return Millions) Net Assets Net Assets Rate Paid
<S> <C> <C> <C> <C> <C> <C>
June 30, 1998(b) +15.9% $22 1.6%* (1.1%)* 112.8% $0.0630
Dec. 31, 1997 +13.9% 16 1.6% (0.9%) 305.2% 0.0597
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund outstanding for the entire period.
(b) For the six months ended June 30, 1998 (Unaudited). Total return and portfolio turnover rate are not annualized.
</TABLE>
<TABLE>
STRONG OPPORTUNITY FUND
- ------------------------------------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA(a)
-------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
-------------------------------------- -----------------------------------------------
<CAPTION>
Net Asset Net Realized Total In Excess Net Asset
Value, Net and Unrealized from From Net of Net From Net Value,
Beginning Investment Gains on Investment Investment Investment Realized Total End of
Period Ended of Period Income Investments Operations Income Income Gains Distributions Period
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
June 30, 1998(c) $37.41 $0.01 $5.37 $5.38 ($0.00)(d) -- ($1.17) ($1.17) $41.62
Dec. 31, 1997 35.26 0.10 7.90 8.00 (0.10) -- (5.75) (5.85) 37.41
Dec. 31, 1996 33.35 0.20 5.78 5.98 (0.20) ($0.05) (3.82) (4.07) 35.26
Dec. 31, 1995 27.71 0.20 7.28 7.48 (0.20) (0.01) (1.63) (1.84) 33.35
Dec. 31, 1994 28.23 0.13 0.76 0.89 (0.13) -- (1.28) (1.41) 27.71
Dec. 31, 1993 24.70 0.06 5.10 5.16 (0.06) -- (1.57) (1.63) 28.23
</TABLE>
<TABLE>
RATIOS AND SUPPLEMENTAL DATA
--------------------------------------------------------------------
<CAPTION>
Net Ratio of Net
Assets, Ratio of Investment Average
End of Expenses Income Portfolio Commission
Total Period (In to Average to Average Turnover Rate
Period Ended Return Millions) Net Assets Net Assets Rate Paid(b)
<S> <C> <C> <C> <C> <C> <C>
June 30, 1998(c) +14.4% $2,173 1.2%* 0.1%* 47.3% $0.0589
Dec. 31, 1997 +23.5% 1,925 1.2% 0.3% 93.7% 0.0519
Dec. 31, 1996 +18.1% 1,770 1.3% 0.6% 103.3% 0.0503
Dec. 31, 1995 +27.3% 1,328 1.3% 0.7% 92.5%
Dec. 31, 1994 +3.2% 806 1.4% 0.5% 59.2%
Dec. 31, 1993 +21.2% 444 1.4% 0.2% 109.1%
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund outstanding for the entire period.
(b) Disclosure required, effective for reporting periods beginning after September 1, 1995.
(c) For the six months ended June 30, 1998 (Unaudited). Total return and portfolio turnover rate are not annualized.
(d) Amount calculated is less than $0.01.
43
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- -------------------------------------------------------------------------------------------------------------------------
STRONG SMALL CAP FUND
- -------------------------------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA(a)
--------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
-------------------------------------- -------------------------------------
<CAPTION>
Net Asset Net Realized Total In Excess Net Asset
Value, Net and Unrealized from From Net of Net Value,
Beginning Investment Gains on Investment Investment Investment Total End of
Period Ended of Period Loss Investments Operations Income Income Distributions Period
<S> <C> <C> <C> <C> <C> <C> <C> <C>
June 30, 1998(b) $11.45 ($0.08) $0.99 $0.91 ($0.00)(c) -- ($0.00)(c) $12.36
Dec. 31, 1997 12.08 (0.13) (0.40) (0.53) -- ($0.10) (0.10) 11.45
Dec. 31, 1996 10.00 (0.01) 2.28 2.27 -- (0.19) (0.19) 12.08
</TABLE>
<TABLE>
RATIOS AND SUPPLEMENTAL DATA
--------------------------------------------------------------------
<CAPTION>
Net Ratio of Net
Assets, Ratio of Investment Average
End of Expenses Income Portfolio Commission
Total Period (In to Average to Average Turnover Rate
Period Ended Return Millions) Net Assets Net Assets Rate Paid
<S> <C> <C> <C> <C> <C> <C>
June 30, 1998 (b) +8.0% $138 1.4%* (1.0%)* 128.3% $0.0624
Dec. 31, 1997 -4.5% 182 1.4% (1.1%) 592.9% 0.0375
Dec. 31, 1996 +22.7% 157 1.5% (0.7%) 419.8% 0.0372
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund outstanding for the entire period.
(b) For the six months ended June 30, 1998 (Unaudited). Total return and portfolio turnover rate are not annualized.
(c) Amount calculated is less than $0.01.
</TABLE>
<TABLE>
STRONG SMALL CAP VALUE FUND
- -------------------------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA(a)
--------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
-------------------------------------- -------------------------------------
<CAPTION>
Net Asset Net Realized Total Net Asset
Value, Net and Unrealized from From Net From Net Value,
Beginning Investment Gains on Investment Investment Realized Total End of
Period Ended of Period Loss Investments Operations Income Gains Distributions Period
<S> <C> <C> <C> <C> <C> <C> <C> <C>
June 30, 1998 (b) $10.00 ($0.03) $1.76 $1.73 -- -- -- $11.73
</TABLE>
<TABLE>
RATIOS AND SUPPLEMENTAL DATA
--------------------------------------------------------------------
<CAPTION>
Net Ratio of Net
Assets, Ratio of Investment Average
End of Expenses Income Portfolio Commission
Total Period (In to Average to Average Turnover Rate
Period Ended Return Millions) Net Assets Net Assets Rate Paid
<S> <C> <C> <C> <C> <C> <C>
June 30, 1998 (b) +17.3% $22 1.8%* (0.7%)* 47.1% $0.0549
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund outstanding for the entire period.
(b) For the six months ended June 30, 1998 (Unaudited). Total return and portfolio turnover rate are not annualized.
</TABLE>
44
<PAGE>
DIRECTORS
Richard S. Strong
Willie D. Davis
Stanley Kritzik
Marvin E. Nevins
William F. Vogt
OFFICERS
Richard S. Strong, Chairman of the Board
Mary F. Hoppa, Vice President
Thomas P. Lemke, Vice President
John S. Weitzer, Vice President
Stephen J. Shenkenberg, Vice President and Secretary
John A. Flanagan, Treasurer
INVESTMENT ADVISOR
Strong Capital Management, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
DISTRIBUTOR
Strong Funds Distributors, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
CUSTODIAN
Firstar Trust Company
P.O. Box 701, Milwaukee, Wisconsin 53201
TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT
Strong Capital Management, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
AUDITOR
Pricewaterhouse Coopers
411 East Wisconsin Avenue, Milwaukee, Wisconsin 53202
LEGAL COUNSEL
Godfrey & Kahn, S.C.
780 North Water Street, Milwaukee, Wisconsin 53202
<PAGE>
For a prospectus containing more complete information, including management
fees and expenses, please call 1-800-368-1030. Please read it carefully before
investing or sending money. This report does not constitute an offer for the
sale of securities. Strong Funds are offered for sale by prospectus only.
[PICTURE OF TELEPHONE]
To order a free prospectus kit,
CALL 1-800-368-1030
To learn more about our funds,
discuss an existing account,
or conduct a transaction,
CALL 1-800-368-3863
-------------------
If you are a
Financial Professional,
CALL 1-800-368-1683
[PICTURE OF STRONG WEB SITE ON COMPUTER]
Strong On-line
www.strong-funds.com
[STRONG LOGO]
STRONG FUNDS
P.O. Box 2936 o Milwaukee, Wisconsin 53201
Strong Funds Distributors, Inc. 8503H98 98SGRO
