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[PHOTO OF WOMAN WITH THREE KIDS]
[LOGO]
THE STRONG
GROWTH
FUNDS
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The Strong Common Stock Fund
The Strong Discovery Fund
The Strong Growth Fund
The Strong Mid Cap Disciplined Fund
The Strong Mid Cap Growth Fund
The Strong Opportunity Fund
The Strong Strategic Growth Fund
ANNUAL REPORT - DECEMBER 31, 1999
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LETTER FROM THE CHAIRMAN
Dear Strong Investor,
As an apprentice investment analyst in the 1960s, I observed and experienced
powerful economic and stock market growth. The explosive stock market was very
profitable for investors, and I always planned for the time when I'd be able to
position our investors to take advantage of that kind of growth again. The
dramatic market move of the late 1990s reminded me of those days in the 1960s
and provided an excellent opportunity.
In our strategic planning effort, what Strong saw coming in the 1990s was a
powerful wave of innovation and technological change that was going to affect
the way we all lived our daily lives. We knew the successful companies of the
future would be those that moved quickly to embrace this new way of thinking. It
was Strong's responsibility to ensure that our shareholders benefited from this
change and capitalized on the opportunity.
How did Strong position our investors to take advantage of the coming growth?
First, we expanded our fund lineup to offer quality choices in every asset
class. We then put technology to work in a number of ways--all intended to
provide our customers and portfolio managers with state-of-the-art tools for
better decision making, and to enhance the customer experience in every
interaction with Strong. And as we made these improvements, we always stayed
true to our commitment to developing a one-on-one relationship with each of our
investors.
When it comes right down to it, it's our job to make you money. And many of you
benefited in 1999, the most exceptional performance year in Strong's history.
Many major financial publications have also recently recognized Strong.
What can you expect from Strong in the future? We'll continue working to improve
our investment management expertise to try to deliver market-beating results
year after year. And we'll continue to innovate and develop practical technology
solutions aimed at helping you make better investment decisions. And you can be
assured that we will continue to work to deliver the "across-the-kitchen-table"
customer experience you've come to expect from STRONG.
/s/ Dick
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THE STRONG
GROWTH FUNDS
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ANNUAL REPORT - DECEMBER 31, 1999
TABLE OF CONTENTS
INVESTMENT REVIEWS
The Strong Common Stock Fund ..............................................2
The Strong Discovery Fund .................................................4
The Strong Growth Fund ....................................................6
The Strong Mid Cap Disciplined Fund .......................................8
The Strong Mid Cap Growth Fund ...........................................10
The Strong Opportunity Fund ..............................................12
The Strong Strategic Growth Fund .........................................14
FINANCIAL INFORMATION
Schedules of Investments in Securities
The Strong Common Stock Fund ........................................16
The Strong Discovery Fund ...........................................17
The Strong Growth Fund ..............................................19
The Strong Mid Cap Disciplined Fund .................................21
The Strong Mid Cap Growth Fund ......................................22
The Strong Opportunity Fund .........................................24
The Strong Strategic Growth Fund ....................................25
Statements of Assets and Liabilities ....................................27
Statements of Operations ................................................28
Statements of Changes in Net Assets .....................................29
Notes to Financial Statements ...........................................33
FINANCIAL HIGHLIGHTS .........................................................37
REPORT OF INDEPENDENT ACCOUNTANTS ............................................40
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THE STRONG COMMON STOCK FUND
----------------------------
PERSPECTIVES
FROM THE MANAGER
/s/ Richard Trent Weiss
Richard Trent Weiss
Portfolio Manager
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During the year, the Fund benefited from its holdings in stocks positioned to
take advantage of the new economy. Specific companies that benefited from
information technology infrastructure upgrades by traditional companies include
I2 Technologies, Informix, and Sybase. While valuations in this sector have gone
up tremendously, we continue to look for companies that will benefit from this
secular shift.
The Fund benefited from our media and communication stock picks during the year.
Internet advertising companies, such as DoubleClick and TMP Worldwide, showed
great strength from the growth in web sites. Wireless communication stocks such
as U.S. Cellular and Aerial Communications benefited from continued penetration
of wireless communications in the U.S., as well as from industry consolidation.
Aerial, for example, continued to be a strong performer after VoiceStream
Wireless announced it was acquiring the company to help form a national wireless
communications operation.
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CONTINUED VALUATION DISCREPANCIES AMONG THE LARGEST 50 STOCKS AND THE REST OF
THE STOCK MARKET THAT DEFY HISTORICAL AVERAGES ARE UNLIKELY TO BE SUSTAINED.
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Two sectors that lagged somewhat were retail and financials. Financials
continued to underperform as the fear of continued Federal Reserve Board
tightening kept investors out of the sector. As a result, many financial
companies now feature valuations that we find increasingly attractive. These
reasonable prices, combined with the opportunities presented by the passage of
the Financial Services Modernization Act (repealing many industry restrictions),
prompted us to look for opportunities to add well-managed, strongly positioned
financial companies to the portfolio.
Retail stocks also struggled, hurt by fears over the impact of rising interest
rates on consumer
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[SIDENOTE]
FUND
HIGHLIGHTS
- For the year ended December 31, 1999, the Strong Common Stock Fund returned
40.35% while the Russell 2500-TM- Index returned 24.14%.*
- Media and communication stocks continued to be strong performers for the
Fund. New media stocks rose thanks to greater opportunities to exploit the
Internet. Accelerating consolidation in the communication industry helped
many of the stocks in the portfolio.
- Technology stocks continued their strong price appreciation, as emerging
technologies designed to help businesses take advantage of the Internet's
growth enjoyed continued strong demand. Areas of specific strength included
software and semiconductors.
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[SIDENOTE]
AVERAGE ANNUAL
TOTAL RETURNS
AS OF 12-31-99
1-year 40.35%
3-year 22.88%
5-year 24.24%
Since Inception 21.59%
(on 12-29-89)
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[SIDENOTE]
FIVE LARGEST
STOCK HOLDINGS
AS OF 12-31-99
SECURITY % OF NET ASSETS
I2 Technologies, Inc. 2.3%
AT&T Corporation--
Liberty Media Group Class A 2.2%
TMP Worldwide, Inc. 2.0%
DoubleClick, Inc. 1.9%
Aerial Communications, Inc. 1.8%
Please see the Schedule of Investments in Securities for a complete listing of
the Fund's portfolio.
2
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spending coupled with the uncertainty of what challenges the Internet will
present to traditional retailers.
Looking ahead, we believe that a few select technology stocks could represent
good value. Many stocks have rebounded dramatically, as fears about technology
spending slowdowns related to Y2K have abated. However, the rebound in
technology stocks was primarily focused on a select number of large-cap names
such as Microsoft and Cisco, as well as unseasoned (but rapidly growing) stocks
related to the Internet. We will continue to look for good stocks the market has
left behind.
For 2000, we believe that the world economic situation will continue to improve,
though it may be tempered by continued interest rate hikes around the globe.
This outlook leads us to favor the energy sector and select cyclicals. We also
believe that 1999 represented a transition year from the poor performance of
small-cap stocks in 1998 to what we believe will be a multi-year period of
outperformance. In this regard, we note that the Russell 2000 outperformed the
S&P 500 in 1999. Continued valuation discrepancies among the largest 50 stocks
and the rest of the stock market that defy historical averages are unlikely to
be sustained.
We thank you for investing in the Strong Common Stock Fund and look forward to
continuing to help you achieve your financial goals.
GROWTH OF AN ASSUMED $10,000 INVESTMENT
FROM 12-29-89 TO 12-31-99
[GRAPH]
<TABLE>
<CAPTION>
THE STRONG COMMON Russell 2000-Registered Trademark- Lipper Mid-Cap
STOCK FUND Index* Value Funds Index*
----------------- ---------------------------------- ------------------
<C> <C> <C>
12-89 $10,000 $10,000 $10,000
12-91 $15,864 $11,760 $11,998
12-93 $23,988 $16,554 $15,431
12-95 $31,609 $20,876 $18,834
12-97 $47,223 $29,758 $27,703
12-99 $70,653 $35,164 $30,476
</TABLE>
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with the performance of the
Russell 2000-Registered Trademark-Index and the Lipper Mid-Cap Value 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.
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[SIDENOTE]
YOUR FUND'S
APPROACH
THE STRONG COMMON STOCK FUND INVESTS IN SMALL-CAP STOCKS THAT APPEAR UNDERVALUED
OR NEGLECTED BY WALL STREET ANALYSTS, BUT POSSESS SUPERIOR LONG-TERM GROWTH
POTENTIAL. AT THE CORE OF THE MANAGER'S INVESTMENT PHILOSOPHY IS THE "PRIVATE
MARKET METHODOLOGY." THIS APPROACH ALLOWS HIM TO DETERMINE WHAT HE BELIEVES TO
BE THE TRUE ECONOMIC VALUE OF A COMPANY--OR THE PRICE A BUYER WOULD PLACE ON THE
WHOLE COMPANY. BY ANALYZING THE COMPETITIVE ADVANTAGES OF A COMPANY AND BY
JUDGING THE ABILITY OF MANAGEMENT TO EFFECTIVELY CARRY OUT ITS CORPORATE VISION,
THE MANAGER IS ABLE TO DETERMINE THE TRUE ECONOMIC VALUE OF THE FIRM AND
QUANTIFY THE RISK/REWARD CHARACTERISTICS OF INDIVIDUAL STOCKS.
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[SIDENOTE]
MARKET
HIGHLIGHTS
- - Stocks in the technology sector dominated the market in 1999. Focusing on the
penetration of the Internet, investors flocked to stocks with strong growth
opportunities while disregarding valuation.
- - The Federal Reserve Board's continued concern about the strong U.S. economy
kept most cyclical and interest-rate sensitive stocks under pressure.
- - For the year, the Russell 2000-Registered Trademark-Index of small-cap
stocks gained 21.26% versus 21.04% for the S&P 500 Index.* This rebound
followed a long period of underperformance in small-caps from mid-1996
through the end of 1998.
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* The Russell 2000-Registered Trademark-Index is an unmanaged index generally
representative of the U.S. market for small capitalization stocks. The Lipper
Mid-Cap Value Funds Index is an equally-weighted performance index of the
largest qualifying funds in this Lipper category. The Russell 2500-TM- Index
is an unmanaged index generally representative of the U.S. market for small to
medium-small capitalization stocks. Source of the Russell index data is
Standard & Poor's Micropal. Source of the Lipper index data is Lipper Inc.
3
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THE STRONG DISCOVERY FUND
-------------------------
PERSPECTIVES
FROM THE MANAGERS
/s/ Richard S. Strong /s/ Chip Paquelet
Richard S. Strong Chip Paquelet
Portfolio Co-Manager Portfolio Co-Manager
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In our mid-year report, we reviewed the reasons behind the Strong Discovery
Fund's poor first-half return. We also outlined a course of action to improve
the Fund's performance. We are pleased to report that the changes we made--most
of which were implemented by October--have provided encouraging results.
For example, the Strong Discovery Fund gained 25.78% in the fourth quarter. This
compared favorably with the Russell 2000 Index benchmark, which rose 18.44% for
the same period.
The key adjustment to the portfolio we outlined last summer was to increase the
Fund's exposure to the most rapidly growing companies and sectors of the
economy--which meant increasing our exposure to technology. It became obvious to
us that our valuation disciplines needed to be updated to adapt to the rapid and
ever-changing growth this part of the market offers. Previously, we had allowed
our valuation work to disqualify too many of the promising technology
investments we researched for the Fund. While we haven't abandoned our
disciplines by any means, we have revised them to allow us to mine the
opportunities this sector offers to investors.
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THE STRONG DISCOVERY FUND POSTED A RETURN OF 5.28% FOR 1999. THIS PERFORMANCE
REFLECTS A POOR START TO THE YEAR, FOLLOWED BY A STRONG FINISH.
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At the close of the year, 48.2% of the Fund was invested in technology, up from
23.1% at mid-year. While the technology sector's
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[SIDENOTE]
FUND
HIGHLIGHTS
- - The Strong Discovery Fund returned 5.28% in 1999, while the Russell
2000-Registered Trademark-Index returned 21.26%.*
- - As of December 31, 1999, the Fund was invested in companies with an expected
earnings growth rate of 24.3%.(1)
- - Technology stocks have grown to 48.2% of the portfolio, up from 23.1% as of
June 30, 1999.
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[SIDENOTE]
AVERAGE ANNUAL
TOTAL RETURNS
AS OF 12-31-99
1-year 5.28%
3-year 7.70%
5-year 11.32%
10-year 12.59%
Since Inception 14.45%
(on 12-31-87)
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[SIDENOTE]
FIVE LARGEST
STOCK HOLDINGS
AS OF 12-31-99
SECURITY % OF NET ASSETS
Pinnacle Holdings, Inc. 3.3%
Oracle Systems Corporation 3.0%
Central Garden &
Pet Company 2.8%
AMFM Incorporated 2.5%
Microsoft Corporation 2.4%
Please see the Schedule of Investments in Securities for a complete listing of
the Fund's portfolio.
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(1) 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 December 31, 1999. The earnings growth projection for the S&P 500
has been on a consensus of earnings estimates from six Wall Street
investment firms as shown by Bloomberg dated December 31, 1999.
4
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performance may not always be sustainable, this reallocation was the main reason
behind the Fund's improved performance.
While we are encouraged by our recent results, we are acutely aware that more
needs to be done to restore Discovery's performance to the high standards our
shareholders expect and deserve. We will keep you posted.
GROWTH OF AN ASSUMED $10,000 INVESTMENT
FROM 12-31-87 TO 12-31-99
[GRAPH]
<TABLE>
<CAPTION>
THE STRONG Russell 2000-Registered Trademark- Lipper Mid-Cap
DISCOVERY FUND Index* Value Funds Index*
----------------- ---------------------------------- ------------------
<C> <C> <C>
12-87 $10,000 $10,000 $10,000
12-89 $15,428 $14,535 $14,999
12-91 $25,151 $17,093 $17,995
12-93 $31,333 $24,061 $23,145
12-95 $39,845 $30,343 $28,250
12-97 $44,825 $43,252 $41,552
12-99 $50,516 $51,111 $45,712
</TABLE>
This graph, prepared in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with the performance of the
Russell 2000-Registered Trademark-Index and the Lipper Mid-Cap Value 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.
- --------------------------------------------------------------------------------
[SIDENOTE]
YOUR FUND'S
APPROACH
THE STRONG DISCOVERY FUND SEEKS TO PROVIDE INVESTORS WITH CAPITAL GROWTH, A GOAL
THE MANAGERS PURSUE BY INVESTING PRIMARILY IN SMALLER- AND MEDIUM-SIZE
COMPANIES. THEIR INVESTMENT APPROACH COMBINES NUMBER-CRUNCHING ANALYSIS WITH
DIRECT RESEARCH, INCLUDING ON-SITE VISITS. THROUGH FREQUENT DISCUSSIONS WITH
MANAGEMENT, SUPPLIERS, CUSTOMERS, AND COMPETITORS, THE MANAGERS BELIEVE THEY CAN
IDENTIFY VITAL ASPECTS OF COMPANIES THAT ARE NOT REFLECTED IN A COMPUTER
DATABASE OR HISTORICAL FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
MARKET
HIGHLIGHTS
- - Technology stocks posted spectacular returns in 1999, while most other sectors
of the market produced flat, or even negative, returns.
- - Large-cap and technology valuations are at historically high levels, while
small-cap valuations remain reasonable.
- - The U.S. economy remains remarkably healthy in spite of higher interest rates
and tight labor conditions.
- --------------------------------------------------------------------------------
* The Russell 2000-Registered Trademark-Index is an unmanaged index generally
representative of the U.S. market for small-capitalization stocks. The Lipper
Mid-Cap Value Funds Index is an equally-weighted performance index of the
largest qualifying funds in this Lipper category. Source of the Russell index
data is Standard & Poor's Micropal. Source of the Lipper index data is
Lipper Inc.
5
<PAGE>
THE STRONG GROWTH FUND
----------------------
PERSPECTIVES
FROM THE MANAGER
/s/ Ronald C. Ognar
Ronald C. Ognar
Portfolio Manager
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In 1999, the Strong Growth Fund's portfolio continued to invest in companies
exhibiting superior revenue growth led by high-quality management teams in
industries with dynamic growth potential.
The Fund's emphasis on what we believe are high-quality growth companies has
resulted in an increase in our technology exposure. While we certainly can't
guarantee future performance in this sector, the Fund has capitalized well on
technology companies' growth. We've focused our investments on the direct
beneficiaries of the networked economy. The companies with the fastest growth
rates are leading this technological revolution with its drive to enhance
productivity and communications around the globe.
The growth of the Internet and its acceptance as an important source of
competitive advantage should continue to enhance the prospects of companies
engaged in business-to-business commerce, wireless connectivity, Internet
content, bandwidth expansion, the building of new brands, and a host of other
applications. The successful implementation of technology remains a key source
of global competitiveness, with the principal results being superior returns on
capital and market-share gains.
- --------------------------------------------------------------------------------
THE SUCCESSFUL IMPLEMENTATION OF TECHNOLOGY REMAINS A KEY SOURCE OF GLOBAL
COMPETITIVENESS.
- --------------------------------------------------------------------------------
During the next several months, we expect the U.S. economy to continue to grow,
but at a more moderate pace. We expect the Federal
- --------------------------------------------------------------------------------
[SIDENOTE]
FUND
HIGHLIGHTS
- The Strong Growth Fund completed its best year of investment results since
its inception with a 75.06% return. This compares favorably with the S&P 500
Stock Index's return of 21.04%.*
- This marks the sixth straight year of double-digit returns for the Fund and
its shareholders. The average annual total return of the Fund since
inception is 31.75%, versus 23.55% for the S&P 500 Stock Index over the same
period.
- Technology, telecommunications, media, retail, and biotechnology holdings
provided strong relative results for the Fund. Exposure to interest-rate
sensitive issues was a negative factor.
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[SIDENOTE]
AVERAGE ANNUAL
TOTAL RETURNS
AS OF 12-31-99
1-year 75.06%
3-year 38.32%
5-year 34.86%
Since Inception 31.75%
(on 12-31-93)
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[SIDENOTE]
FIVE LARGEST
STOCK HOLDINGS
AS OF 12-31-99
SECURITY % OF NET ASSETS
JDS Uniphase Corporation 5.8%
Cisco Systems, Inc. 5.0%
VeriSign, Inc. 3.4%
Veritas Software Corporation 3.0%
Qualcomm, Inc. 2.6%
Please see the Schedule of Investments in Securities for a complete listing of
the Fund's portfolio.
6
<PAGE>
Reserve to remain vigilant, poised to nudge interest rates higher to preempt
signs of inflationary pressure. In our view, companies that are able to generate
unit growth will continue to be the big winners (absent price increases, unit
growth supports the higher revenue run rates needed to offset cost pressures) in
this environment. For this reason, we believe growth stocks continue to offer
attractive return potential.
Our preference is for pure plays in dynamic niche markets, new product cycles,
or innovative new services. As growth investors, we are constantly on the
lookout for investments that exhibit the potential for sustainable fundamental
improvement, regardless of market capitalization or industry. Our efforts are
aimed at consistently outperforming the broader market averages.
We thank you for your interest in the Strong Growth Fund and look forward to
continuing to help you meet your financial goals.
GROWTH OF AN ASSUMED $10,000 INVESTMENT
FROM 12-31-93 TO 12-31-99
[GRAPH]
<TABLE>
<CAPTION>
THE STRONG S&P 500 Lipper Multi-Cap
GROWTH FUND Stock Index* Growth Funds Index*
----------------- ------------ ------------------
<C> <C> <C>
12-93 $10,000 $10,000 $10,000
12-94 $11,727 $10,132 $ 9,718
12-95 $16,535 $13,940 $12,994
12-96 $19,763 $17,140 $15,314
12-97 $23,528 $22,859 $18,828
12-98 $29,877 $29,391 $23,497
12-99 $52,302 $35,576 $34,389
</TABLE>
This graph, prepared in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with the performance of the
Standard & Poor's 500 Stock Index ("S&P 500") and the Lipper Multi-Cap 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.
- --------------------------------------------------------------------------------
[SIDENOTE]
YOUR FUND'S
APPROACH
THE STRONG GROWTH FUND SEEKS CAPITAL GROWTH BY FOCUSING ON COMPANIES WITH
FAVORABLE GROWTH PROSPECTS AND WITH REASONABLE PRICES BASED ON EARNINGS, CASH
FLOW, AND ASSET VALUE. THE MANAGER MAY BUY STOCKS OF ANY SIZE COMPANY.
- --------------------------------------------------------------------------------
[SIDENOTE]
MARKET
HIGHLIGHTS
- Although the stock market's advance was very narrow, companies generating
superior revenue growth performed extremely well throughout the period.
- The Federal Reserve's decision to raise short-term interest rates resulted
in a volatile market. It appears likely that further rate hikes lie ahead if
inflationary pressures manifest themselves or foreign economies continue to
recover.
- Corporate earnings growth has begun to reaccelerate. Fears of a significant
slowdown in corporate profits have proven unfounded, and prospects for a
broad-based global economic recovery have continued to improve.
- --------------------------------------------------------------------------------
* The S&P 500 is an unmanaged index generally representative of the U.S. stock
market. The Lipper Multi-Cap Growth 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 Inc.
7
<PAGE>
THE STRONG MID CAP DISCIPLINED FUND
-----------------------------------
PERSPECTIVES
FROM THE MANAGER
/s/ Dean DuMonthier
Dean DuMonthier
Portfolio Manager
- --------------------------------------------------------------------------------
The Fund performed well for the year, given the market environment and our bias
toward risk management. Much of the performance in the year was concentrated in
relatively few sectors and specific companies within those sectors. Our
technology and telecommunications holdings performed well, while our cyclical
and financial holdings had a difficult year amid market concerns surrounding the
direction of the economy, inflation, and interest rates. We recognize, however,
that any market condition can shift in the long run.
As is obvious, 1999 was the year of the Internet. Many of the best-performing
stocks were involved with the proliferation of the Internet in some fashion. Due
to its relatively smaller size, the Fund substantially benefited from its
purchases of stocks within Internet-related industries and the initial public
offering market where the best-positioned companies had outstanding performance.
Telecommunications companies that get paid to transport Internet traffic over
their networks performed well. Also, software companies that help businesses to
facilitate interaction between themselves and their customers, as well as
interactions between themselves and their business suppliers, generally had a
good year. Another area that benefited from the Internet's growth was
communications equipment companies, which sell equipment to create data
networks.
- --------------------------------------------------------------------------------
WE BELIEVE THAT TECHNOLOGY WILL CONTINUE TO ALLOW THE ECONOMY TO GROW AT A
REASONABLE RATE WITHOUT IGNITING DESTRUCTIVE INFLATION.
- --------------------------------------------------------------------------------
Because stocks are forward-looking mechanisms, the market spent the year
incorporating the significant future opportunities for these companies into
their daily stock prices. In the case of some of the best-positioned companies,
- --------------------------------------------------------------------------------
[SIDENOTE]
FUND
HIGHLIGHTS
- For the year ended December 31, 1999, the Strong Mid Cap Disciplined Fund
returned 35.20%. For the same period, the S&P MidCap 400 Index returned
14.72% and the S&P/Barra MidCap 400 Value Index returned 2.32%.*
- The Fund benefited from a number of telecommunications holdings, some
software investments, and a recovery in the energy sector.
- The Fund performed well in the latter part of the year after we increased
its relative exposure to the technology and telecommunications sectors. The
Fund's energy holdings performed well early in the year as well as at the
end of the year.
- --------------------------------------------------------------------------------
[SIDENOTE]
AVERAGE ANNUAL
TOTAL RETURN
AS OF 12-31-99
Since Inception 35.20%
(on 12-31-98)
- --------------------------------------------------------------------------------
[SIDENOTE]
FIVE LARGEST
STOCK HOLDINGS
AS OF 12-31-99
SECURITY % OF NET ASSETS
AmeriSource Health Corp. Class A 3.1%
Playtex Products, Inc. 2.9%
Flowers Industries, Inc. 2.3%
CNF Transportation, Inc. 2.3%
Ziff-Davis, Inc. 2.2%
Please see the Schedule of Investments in Securities for a complete listing of
the Fund's portfolio.
8
<PAGE>
the market bid them up beyond our assessment of their reasonable near-term
intrinsic value. Overall, however, there are still relative values to be
found--companies that will benefit from long-term trends but haven't yet reached
such high valuations. We will continue to seek out and capitalize on these
opportunities.
In addition to the trends in software and telecommunications, we will be
watching wireless developments closely, particularly the emerging trend of
accessing the Internet over wireless devices. This could pose opportunities for
many companies--opportunities that may not be currently reflected in their stock
prices.
We are optimistic with regard to the broad performance of mid-cap stocks in the
coming year. We believe that technology will continue to allow the economy to
grow at a reasonable rate without igniting destructive inflation.
As always, we will continue to do our best to identify the investment
opportunities presented by good companies that are increasing their returns on
invested capital and whose current stock prices are sufficiently below their
intrinsic values.
We thank you for your investment and offer our best wishes to you and your
family for the year 2000!
GROWTH OF AN ASSUMED $10,000 INVESTMENT
FROM 12-31-98 TO 12-31-99
[GRAPH]
<TABLE>
<CAPTION>
THE STRONG MID CAP S&P Mid Cap 400 Lipper Mid-Cap
DISCIPLINED FUND Stock Index* Value Funds Index*
------------------ --------------- ------------------
<C> <C> <C>
12-98 $10,000 $10,000 $10,000
02-99 $10,140 $ 9,107 $ 9,416
04-99 $12,640 $10,100 $10,345
06-99 $12,880 $10,687 $10,836
08-99 $11,670 $10,102 $10,275
10-99 $11,640 $10,289 $10,137
12-99 $13,520 $11,472 $11,194
</TABLE>
This graph, prepared in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with the performance of the
Standard & Poor's MidCap 400 Stock Index ("S&P MidCap 400") and the Lipper
Mid-Cap Value 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.
- --------------------------------------------------------------------------------
[SIDENOTE]
YOUR FUND'S
APPROACH
THE STRONG MID CAP DISCIPLINED FUND SEEKS CAPITAL GROWTH BY INVESTING PRIMARILY
IN MID-SIZE COMPANIES THAT THE MANAGER BELIEVES OFFER ATTRACTIVE OPPORTUNITIES,
BUT HAVE NOT BEEN WIDELY RECOGNIZED BY INVESTMENT ANALYSTS OR THE FINANCIAL
PRESS. "MEDIUM-CAPITALIZATION COMPANIES" ARE THOSE WITH A MARKET CAPITALIZATION
SUBSTANTIALLY SIMILAR TO THAT OF COMPANIES IN THE S&P MIDCAP 400 INDEX AT THE
TIME OF INVESTMENT. THE MANAGER USES IN-DEPTH, FIRST-HAND RESEARCH--OFTEN BY
CONDUCTING ON-SITE VISITS--TO SELECT THE FUND'S HOLDINGS.
------------------------------------------------------------------
[SIDENOTE]
MARKET
HIGHLIGHTS
- The technology sector dominated the market's performance. Outside of that
sector, the market's performance was generally lackluster.
- The domestic economy remains very strong. In addition, the worldwide economy
continues to show steady recovery. However, fears of inflation led the
Federal Reserve to raise interest rates throughout the year, which could
potentially serve to slow economic growth.
- Traditional value-oriented stocks generally performed poorly. The market's
interest was drawn instead to the significant opportunities in Internet
companies and many well-positioned wireless firms.
- --------------------------------------------------------------------------------
* The S&P MidCap 400 is an unmanaged index generally representative of the U.S.
market for medium-capitalization stocks. The Lipper Mid-Cap Value Funds Index
is an equally-weighted performance index of the largest qualifying funds in
this Lipper category. The S&P/Barra MidCap 400 Value Index is an unmanaged
index generally representative of the U.S. market for medium-capitalization
value stocks. Source of the S&P index data is Standard & Poor's Micropal.
Source of the Lipper index data is Lipper Inc.
9
<PAGE>
THE STRONG MID CAP GROWTH FUND
------------------------------
PERSPECTIVES
FROM THE MANAGERS
/s/ Ronald C. Ognar /s/ Derek Felske
Ronald C. Ognar Derek Felske
Portfolio Co-Manager Portfolio Co-Manager
- --------------------------------------------------------------------------------
Upon assuming management of the Strong Mid Cap Growth Fund, we substantially
altered the Fund's portfolio by selecting companies exhibiting superior revenue
growth led by high-quality management teams in industries with dynamic growth
potential.
The Fund's renewed emphasis on what we believe are high-quality mid-cap growth
companies has resulted in a significant increase in our technology exposure. We
focused our investments on the direct beneficiaries of the networked economy.
Within the mid-cap universe, the fastest growth rates continued to be produced
by leading technology companies enjoying the positive benefits of new product
cycles, buttressed by the need for corporations to enhance productivity to
compete in a global economy. While we certainly cannot forecast the future, the
Fund benefited from this sector's performance and to a lesser degree, from our
investments in the initial public offering market. The growth of the Internet
and its growing role as an important source of competitive advantage should
continue to enhance the prospects of companies engaged in business-to-business
commerce, wireless connectivity, Internet content, bandwidth expansion, and a
host of other applications.
- --------------------------------------------------------------------------------
... WE BELIEVE MID-CAP GROWTH STOCKS CONTINUE TO OFFER ATTRACTIVE RETURN
POTENTIAL.
- --------------------------------------------------------------------------------
We continued to maintain a positive stance on energy service companies. In 1998,
the deflationary impact of the Asian economic crises, coupled with an unusually
mild winter, led to sharply lower oil prices. With relative valuations extremely
attractive
- --------------------------------------------------------------------------------
[SIDENOTE]
FUND
HIGHLIGHTS
- Ronald Ognar and Derek Felske assumed portfolio management responsibility
of the Fund on January 31, 1999. Reflecting the managers' investment
philosophy, the Fund's technology exposure was increased during the year.
- The Fund returned 92.02% in 1999. This compared very favorably with the
Lipper Mid-Cap Growth Funds Index return of 73.72% and the 14.72% return
of the S&P MidCap 400 Stock Index.*
- Technology, energy services, and consumer cyclical holdings provided
strong relative performance results for the Fund. Exposure to
interest-rate sensitive issues was a negative contributor.
- --------------------------------------------------------------------------------
[SIDENOTE]
AVERAGE ANNUAL
TOTAL RETURNS
AS OF 12-31-99
1-year 92.02%
Since Inception 35.78%
(on 12-31-96)
- --------------------------------------------------------------------------------
[SIDENOTE]
FIVE LARGEST
STOCK HOLDINGS
AS OF 12-31-99
SECURITY % OF NET ASSETS
USinternetworking, Inc. 2.5%
E-Tek Dynamics, Inc. 2.4%
Sapient Corp. 2.2%
Veritas Software Corp. 2.0%
Internet Capital Group, Inc. 2.0%
PLEASE SEE THE SCHEDULE OF INVESTMENTS IN SECURITIES FOR A COMPLETE LISTING OF
THE FUND'S PORTFOLIO.
10
<PAGE>
amid signs of rebounding prices and increased drilling activity, we made
an investment in the sector. Thus far, the underlying fundamentals appear to be
improving: OPEC members are substantially complying with announced production
quotas, and economic conditions in Asia (an important source of incremental
demand) appear to have stabilized.
During the coming months, we expect the U.S. economy to continue to grow, though
we expect the growth to be more moderate than in the recent months. We also
expect the Federal Reserve to remain ready to nudge interest rates higher should
signs of inflationary pressure emerge. This environment, in our view, strongly
favors companies that are able to generate unit growth. This is because without
the ability to raise prices easily, it takes unit growth to support the higher
revenue run rates needed to offset cost pressures. For this reason, we believe
mid-cap growth stocks continue to offer attractive return potential. Unlike
their larger-cap brethren, mid-cap growth stocks often offer pure exposure to
dynamic niche markets, new product cycles, or innovative new services. As growth
investors, our investment team is constantly on the lookout for companies
exhibiting sustainable fundamental improvement.
We thank you for your interest in the Strong Mid Cap Growth Fund and look
forward to continuing to help you pursue your vital financial goals.
GROWTH OF AN ASSUMED $10,000 INVESTMENT
FROM 12-31-96 TO 12-31-99
[GRAPH]
<TABLE>
<CAPTION>
THE STRONG MID CAP S&P Mid Cap 400 Lipper Mid-Cap
GROWTH FUND Stock Index* Growth Funds Index*
------------------ --------------- ------------------
<C> <C> <C>
12-96 $10,000 $10,000 $10,000
06-97 $10,104 $11,299 $10,329
12-97 $11,385 $13,225 $11,134
06-98 $13,196 $14,367 $12,332
12-98 $13,036 $15,753 $12,558
06-99 $16,577 $16,836 $14,590
12-99 $25,031 $18,072 $21,816
</TABLE>
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with the performance of the
Standard & Poor's MidCap 400 Stock Index ("S&P MidCap 400") and the Lipper
Mid-Cap 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.
- --------------------------------------------------------------------------------
[SIDENOTE]
YOUR FUND'S
APPROACH
THE STRONG MID CAP GROWTH FUND SEEKS CAPITAL GROWTH BY INVESTING
IN MEDIUM-CAPITALIZATION COMPANIES THAT THE MANAGERS BELIEVE HAVE FAVORABLE
PROSPECTS FOR ACCELERATING GROWTH OF EARNINGS BUT ARE SELLING AT REASONABLE
PRICES BASED ON EARNINGS, CASH FLOW, OR ASSET VALUE. "MEDIUM-CAPITALIZATION
COMPANIES" ARE THOSE WITH A MARKET CAPITALIZATION SUBSTANTIALLY SIMILAR TO THAT
OF COMPANIES IN THE S&P MIDCAP 400 INDEX AT THE TIME OF INVESTMENT.
- --------------------------------------------------------------------------------
[SIDENOTE]
MARKET
HIGHTLIGHTS
- Although the stock market's advance was very narrow, companies generating
superior revenue growth performed extremely well throughout the period.
- The Federal Reserve hiked short-term interest rates in response to a
strong domestic economy and signs of economic strength overseas. This
helped fuel market volatility. Further hikes appear likely if inflationary
pressures increase or foreign economies heat up.
- Corporate earnings growth has begun to reaccelerate, belying earlier fears
of a significant slowdown in corporate profits. Given this improvement, as
well as improving prospects for a broad-based global economic recovery,
many analysts have ratcheted up their earnings estimates for cyclical
sectors such as technology.
- --------------------------------------------------------------------------------
*The S&P MidCap 400 is an unmanaged index generally representative of the U.S.
stock market for medium-capitalization stocks. The Lipper Mid-Cap Growth 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 Inc.
11
<PAGE>
THE STRONG OPPORTUNITY FUND
---------------------------
PERSPECTIVES
FROM THE MANAGER
/s/ Richard Trent Weiss
Richard Trent Weiss
Portfolio Manager
- --------------------------------------------------------------------------------
The Fund's performance was most influenced during this period by our positions
in technology and media stocks. The strongest performers included technology
companies strategically positioned to take advantage of the increase in
technology spending related to the growth of the Internet. Specifically, Sun
Microsystems and Parametric Technology were some of the Fund's biggest
contributors. Communications stocks also continued to help the Fund, including
Corning, Omnipoint, U.S. Cellular, Hughes Electronics, and Liberty Media Group.
- --------------------------------------------------------------------------------
WE BELIEVE A CONTINUED RECOVERY OF THE GLOBAL ECONOMY WILL HELP SUSTAIN STRONG
PERFORMANCE FOR SMALL- AND MID-CAP STOCKS GOING FORWARD.
- --------------------------------------------------------------------------------
In light of the rate increases from the Federal Reserve, stocks exposed to
consumer spending retreated. Cyclical stocks, for example, weakened in the
third and fourth quarter as investors waited for more signs of the economy's
growth prospects. We selectively added to these positions at their lower
valuations. In energy, the market took a wait-and-see attitude following the
huge rise in oil prices in the first half of the year. We therefore held our
energy positions at that time. We continue to believe that the supply and
demand characteristics for energy stocks remain positive for 2000 and are
looking for companies that can take advantage of that environment. Stocks in
the financial services sector were also weak in the face of rising interest
rates and continued weakness in pricing in industries such as
property-casualty insurance. However, we continue to look for names to add
selectively as valuations have continued to become more attractive.
- --------------------------------------------------------------------------------
[SIDENOTE]
FUND
HIGHLIGHTS
- For the year ended December 31, 1999, the Strong Opportunity Fund returned
33.39% while the S&P MidCap 400 Stock Index returned 14.72%.*
- The Fund's performance was driven mostly by positions in cable/media and
technology stocks. Companies in the software, enterprise server, and
technology infrastructure sectors were strong performers in the third and
fourth quarter.
- The Fund benefited from an underweighting in financials, as these stocks
performed poorly in response to fears that the Federal Reserve Board would
continue to raise interest rates.
- --------------------------------------------------------------------------------
[SIDENOTE]
AVERAGE ANNUAL
TOTAL RETURNS
AS OF 12-31-99
1-year 33.39%
3-year 23.89%
5-year 23.38%
10-year 17.23%
Since Inception 19.49%
(on 12-31-85)
- --------------------------------------------------------------------------------
[SIDENOTE]
FIVE LARGEST
STOCK HOLDINGS
AS OF 12-31-99
SECURITY % OF NET ASSETS
Omnipoint Corporation 2.9%
Corning, Inc. 2.4%
AT&T Corporation--
Liberty Media Group Class A 2.2%
Seagate Technology, Inc. 2.0%
MediaOne Group, Inc. 1.9%
Please see the Schedule of Investments in Securities for a complete listing of
the Fund's portfolio.
12
<PAGE>
Looking out over the next several months, we are optimistic that we have
reached a turning point where smaller-cap stocks will perform well versus
larger-capitalization stocks. In the fourth quarter, the Russell
2000-Registered Trademark-Index of small-cap stocks gained 21.26% versus
21.04% for the S&P 500 Stock Index. This outperformance came as welcome
relief after an extended period during which larger-cap stocks outperformed
small- and mid-caps. We believe a continued recovery of the global economy
will help sustain strong performance for small-and mid-cap stocks going
forward.
Even though energy and cyclical stocks had mixed results in the second half
of the year, we believe those sectors should benefit as the world economies
strengthen. Additionally, after the recent massive outperformance among a small,
select group of technology stocks, we believe that the market will begin to
broaden out. This should benefit other forgotten sectors with improving
fundamentals. In technology, we continue to look for select stocks that are
positioned to take advantage of continued strong demand, though the run-up of
many of these stocks over the past year severely limits opportunities in this
area.
We thank you for investing in the Strong Opportunity Fund and look forward to
continuing to help you achieve your financial goals.
GROWTH OF AN ASSUMED $10,000 INVESTMENT
FROM 12-31-85 TO 12-31-99
[GRAPH]
<TABLE>
<CAPTION>
THE STRONG S&P Mid Cap 400 Lipper Multi-Cap
OPPORTUNITY FUND Stock Index* Value Funds Index*
------------------ --------------- ------------------
<C> <C> <C>
12-85 $ 10,000 $10,000 $10,000
12-87 $ 17,894 $11,383 $12,268
12-89 $ 24,694 $18,649 $17,566
12-91 $ 28,845 $26,556 $20,790
12-93 $ 41,022 $33,866 $26,308
12-95 $ 53,868 $42,758 $34,504
12-97 $ 78,558 $67,407 $52,980
12-99 $121,017 $92,111 $59,788
</TABLE>
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with the performance of the
Standard & Poor's MidCap 400 Stock Index ("S&P MidCap 400") and the Lipper
Multi-Cap Value 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.
- --------------------------------------------------------------------------------
[SIDENOTE]
YOUR FUND'S
APPROACH
THE STRONG OPPORTUNITY FUND FOCUSES ON STOCKS OF MEDIUM-SIZE COMPANIES THAT
OFFER STRONG GROWTH POTENTIAL, BUT ARE UNDERPRICED. RATHER THAN RELY ON
TRADITIONAL WALL STREET RESEARCH, THE MANAGER SELECTS STOCKS USING THE FUND'S
PROPRIETARY PRIVATE MARKET VALUE APPROACH. HE FIRST CONSIDERS COMPANIES (AND
INDUSTRIES) THAT ARE OUT OF FAVOR. THEN HE DETERMINES THE PRICE HE BELIEVES AN
INVESTOR WOULD BE WILLING TO PAY FOR AN ENTIRE COMPANY--ITS PRIVATE MARKET
VALUE. A COMPANY WHOSE STOCK PRICE IS LOWER THAN ITS PRIVATE MARKET VALUE MAY BE
ADDED TO THE PORTFOLIO.
- --------------------------------------------------------------------------------
[SIDENOTE]
MARKET
HIGHLIGHTS
- The U.S. economy remained healthy throughout the year, but fears of rising
inflation helped increase interest rates as the year wore on. Investors
remained cautious on the outlook for continued economic growth and stayed
out of areas of slowing growth.
- The tremendous growth opportunities afforded technology companies from the
growth of the Internet and diminishing fears over Y2K problems fueled a
massive rise in technology stocks. The market bought a small number of
companies in specific sectors that could benefit from the evolving new
economy almost without regard to valuation.
- --------------------------------------------------------------------------------
* The S&P MidCap 400 is an unmanaged index generally representative of the
U.S. market for medium-capitalization stocks. The Lipper Multi-Cap Value
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 Inc.
13
<PAGE>
THE STRONG STRATEGIC GROWTH FUND
--------------------------------
PERSPECTIVES
FROM THE MANAGER
/s/ Scott Sindelar
Scott Sindelar
Portfolio Manager
- --------------------------------------------------------------------------------
The past year was a good one for the stock market and for Strong Strategic
Growth Fund shareholders. It was also an unusual year in that the majority of
the market's returns came from a relatively small number of stocks, despite a
generally strong economy. Technology stocks were the overall star performers,
but were joined by some healthcare and consumer holdings.
Several stock purchases in 1999 helped to increase the Fund's return during the
year. Consumer stalwarts Home Depot and Wal-Mart provided handsome returns.
Biogen and Jones Medical Industries had stellar returns in a difficult
pharmaceutical environment. Purchases within the initial public offering market
provided meaningful returns as well due to the relatively smaller size of the
Fund. The Fund's technology holdings that had particularly notable performance
included software companies Citrix Systems, Oracle, and Ardent Software;
communications companies Nortel Networks and Telcom Semiconductor; and
Internet-related companies Cisco Systems and Sun Microsystems.
Technology stocks rose so rapidly that there may be concern about continuing
to own such stocks. One downside typically associated with technology stocks is
that most seem to have short lives before companies with newer, better
technologies replace them and therefore returns may not be consistently
maintained. This has historically made technology investing a risky and volatile
pursuit, though a potentially rewarding one, as is also the case with the
initial public offering market. Clearly, 1999 was a rewarding year, but what
about 2000? We have two comments regarding this concern.
- --------------------------------------------------------------------------------
...THE COMPANIES SELECTED FOR THE STRONG STRATEGIC GROWTH FUND ARE
WELL-DIVERSIFIED AND APPEAR TO BE POSITIONED TO GENERATE SOLID RESULTS OVER THE
FORESEEABLE FUTURE.
- --------------------------------------------------------------------------------
First, the Fund holds a diversified portfolio of technology stocks. Holdings
include large- and small-cap companies in the software, communications,
semiconductor, and tech-
- --------------------------------------------------------------------------------
[SIDENOTE]
FUND
HIGHLIGHTS
- - The return for the Strong Strategic Growth Fund was 29.36% for the year
ended December 31, 1999, compared with the S&P 500 Stock Index return of
21.04%.*
- - Technology stocks were the primary contributors to the Fund's results for
1999, aided by select healthcare and consumer holdings.
- - Software holdings had particularly strong performances toward year-end, as
investors' fears of Y2K-related difficulties diminished.
- - During mid-1999, the Fund's holdings were broadened in an effort to reduce
its company-specific risk.
- --------------------------------------------------------------------------------
[SIDENOTE]
AVERAGE ANNUAL
TOTAL RETURNS
AS OF 12-31-99
1-year 29.36%
Since Inception 28.42%
(on 6-30-98)
- --------------------------------------------------------------------------------
[SIDENOTE]
FIVE LARGEST
STOCK HOLDINGS
AS OF 12-31-99
SECURITY % OF NET ASSETS
Microsoft Corporation 3.6%
Sykes Enterprises, Inc. 3.1%
Nortel Networks Corporation 2.7%
Cisco Systems, Inc. 2.6%
Citigroup, Inc. 2.6%
- --------------------------------------------------------------------------------
Please see the Schedule of Investments in Securities for a complete listing of
the Fund's portfolio.
14
<PAGE>
services sectors. Although an individual holding may be quite volatile, as a
whole, the group should be less so. Additionally, there are no "pure Internet"
companies in the portfolio, as their current valuations are very difficult to
understand. Investing in a variety of firms that provide the building blocks of
the Internet is an attractive alternate way to latch on to its potential.
Second, technology companies are currently seeing broad-based, robust demand for
their products. This is a departure from the previous pattern of demand coming
from one source at a time: mainframe computers, then personal computers, then
better PCs, then consumer products (e.g., video games), then portable phones,
and so on. Today, demand for technology is coming from multiple sources
simultaneously, including the Internet, telecommunications, consumer products,
cable, and satellite companies. This may give tech stocks more strength for a
longer time than "normal." Thus, the Fund will continue to participate in
technology stocks during 2000 in a diversified, risk-conscious method.
Looking forward, the economy appears to be healthy, corporate profits should
continue to show growth, and the Far East economies may be improving. If
interest rates continue to climb in 2000, however, they could slow down the
stock market. Healthcare stocks may have a difficult time in the coming election
year, due to campaign rhetoric about government's involvement in the industry.
On a more specific note, the companies selected for the Strong Strategic Growth
Fund are well-diversified and appear to be positioned to generate solid results
over the foreseeable future.
Thank you for your faith in the Strong Strategic Growth Fund. We hope to reward
you with good results in 2000.
GROWTH OF AN ASSUMED $10,000 INVESTMENT
FROM 6-30-98 TO 12-31-99
[GRAPH]
<TABLE>
<CAPTION>
THE STRONG STRATEGIC S&P 500 Lipper Mid-Cap
GROWTH FUND Stock Index* Core Funds Index*
-------------------- ------------ ------------------
<C> <C> <C>
06-98 $10,000 $10,000 $10,000
09-98 $ 9,020 $ 9,005 $ 8,163
12-98 $11,250 $10,923 $ 9,933
03-99 $11,100 $11,467 $ 9,457
06-99 $12,750 $12,276 $10,670
09-99 $12,170 $11,509 $ 9,983
12-99 $14,553 $13,222 $12,734
</TABLE>
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with the performance of the
Standard & Poor's 500 Stock Index ("S&P 500") and the Lipper Mid-Cap Core 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.
- ------------------------------------------------------------------------------
[SIDENOTE]
YOUR FUND'S
APPROACH
THE STRONG STRATEGIC GROWTH FUND SEEKS CAPITAL GROWTH BY INVESTING PRIMARILY IN
MEDIUM- AND LARGE-CAPITALIZATION COMPANIES WITH LONGER-TERM GROWTH POTENTIAL.
THROUGH FUNDAMENTAL ANALYSIS, THE MANAGER SEEKS WELL-MANAGED COMPANIES THAT
PRODUCE NEEDED OR PROVEN PRODUCTS AND THAT ARE MARKET LEADERS IN GROWING
INDUSTRIES.
- ------------------------------------------------------------------------------
[SIDENOTE]
MARKET
HIGHLIGHTS
- - Technology stocks generated superb returns. Demand came from numerous
sources, including the Internet, telecommunications, and consumer markets.
This multi-pronged demand may help companies in this sector continue to post
strong results.
- - Small-cap stocks kept pace with large-cap stocks for the first time in a
number of years.
- - Interest rates rose meaningfully during the year, but this did not appear to
have great impact on the economy or the stock market. However, higher rates
may be one reason for investors to trim their stock market expectations for
2000.
*The S&P 500 is an unmanaged index generally representative of the U.S. stock
market. The Lipper Mid-Cap Core 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 Inc.
15
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES December 31, 1999
- ------------------------------------------------------------------------------
STRONG COMMON STOCK FUND
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS 91.8%
AIRLINE 1.4%
Air New Zealand, Ltd. Class B $2,138,800 $ 3,133,256
Continental Airlines, Inc. Class B (b) 457,500 20,301,563
------------
23,434,819
BANK - MONEY CENTER 0.3%
Bank of Tokyo - Mitsubishi 121,000 1,685,784
Sakura Bank, Ltd. 274,000 1,587,007
Sanwa Bank, Ltd. 140,000 1,702,573
------------
4,975,364
BANK - REGIONAL 2.2%
City National Corporation 590,000 19,433,125
Old Kent Financial Corporation 530,000 18,748,750
------------
38,181,875
BANK - SUPER REGIONAL 2.1%
FleetBoston Financial Corporation 535,000 18,624,688
SunTrust Banks, Inc. 261,000 17,960,062
------------
36,584,750
CHEMICAL 1.5%
IMC Global, Inc. 622,100 10,186,888
Rohm and Haas Company 380,000 15,461,250
------------
25,648,138
CHEMICAL - SPECIALTY 2.5%
CK Witco Corporation 1,810,000 24,208,750
Cytec Industries, Inc. (b) 800,000 18,500,000
------------
42,708,750
COMMERCIAL SERVICE 4.2%
Pittston Company Brinks Group 870,000 19,140,000
Rollins Truck Leasing Corporation 1,639,000 19,565,563
TMP Worldwide, Inc. (b) 241,000 34,222,000
------------
72,927,563
COMPUTER - PERIPHERAL EQUIPMENT 1.2%
Microchip Technology, Inc. (b) 299,600 20,503,875
COMPUTER SOFTWARE 10.7%
Autodesk, Inc. 800,000 27,000,000
J.D. Edwards & Company (b) 405,000 12,099,375
I2 Technologies, Inc. (b) 205,000 39,975,000
Informix Corporation (b) 2,600,000 29,575,000
Sterling Software, Inc. (b) 950,000 29,925,000
Sybase, Inc. (b) 1,250,000 21,250,000
Symbol Technologies, Inc. 405,000 25,742,813
------------
185,567,188
CONGLOMERATE 0.1%
Marubeni Corporation 445,000 1,867,772
CONSUMER - MISCELLANEOUS 1.1%
Canon, Inc. 71,000 2,820,272
Hillenbrand Industries, Inc. 500,000 15,843,750
------------
18,664,022
DIVERSIFIED OPERATIONS 1.9%
Carlisle Companies, Inc. 630,000 22,680,000
Invensys PLC 1,509,000 8,226,030
Itochu Corporation (b) 470,000 2,340,573
------------
33,246,603
ELECTRONIC INSTRUMENTATION 1.1%
Thermo Electron Corporation (b) 1,230,000 18,450,000
ELECTRONIC PARTS DISTRIBUTION 1.1%
Avnet, Inc. 310,000 18,755,000
ELECTRONIC PRODUCTS - MISCELLANEOUS 1.8%
General Motors Corporation Class H (b) 285,000 27,360,000
Hitachi, Ltd. 230,000 3,690,441
------------
31,050,441
ELECTRONICS - SEMICONDUCTOR MANUFACTURING 2.5%
Dallas Semiconductor Corporation 348,200 $22,437,138
Xilinx, Inc. (b) 462,000 21,006,562
------------
43,443,700
ENGINEERING & CONSTRUCTION 1.1%
Jacobs Engineering Group, Inc. (b) 600,000 19,500,000
FOOD 1.1%
Nabisco Holdings Corporation 630,000 19,923,750
HEALTHCARE - BIOMEDICAL/GENETIC 1.0%
Chiron Corporation (b) 410,000 17,373,750
HEALTHCARE - INSTRUMENTATION 1.2%
Beckman Coulter, Inc. 423,300 21,535,387
HEALTHCARE - PATIENT CARE 2.6%
Omnicare, Inc. 1,940,000 23,280,000
PhyCor, Inc. (b) 1,130,800 2,120,250
WellPoint Health Networks, Inc. (b) 296,000 19,517,500
------------
44,917,750
INSURANCE - ACCIDENT & HEALTH 1.2%
CIGNA Corporation 257,500 20,744,844
INSURANCE - LIFE 1.3%
Canada Life Financial Corporation (b) (d) 105,000 1,624,611
Protective Life Corporation 665,000 21,155,312
------------
22,779,923
INSURANCE - PROPERTY & CASUALTY 1.2%
XL Capital, Ltd. Class A 400,000 20,750,000
INTERNET - E*COMMERCE 3.2%
DoubleClick, Inc. (b) 131,000 33,151,188
Sterling Commerce, Inc. (b) 630,000 21,459,375
------------
54,610,563
INTERNET - INTERNET SERVICE PROVIDER/CONTENT 0.1%
KPNQwest NV (b) 28,000 1,785,000
MACHINERY - MISCELLANEOUS 1.1%
Hussmann International, Inc. 1,250,000 18,828,125
MACHINERY - TRANSPORTATION EQUIPMENT & PARTS 1.2%
Trinity Industries, Inc. 710,000 20,190,625
MEDIA - CABLE TV 3.7%
Cox Communications, Inc. Class A (b) (c) 560,000 28,840,000
Flextech PLC (b) 599,200 11,146,558
NTL, Inc. (b) 200,000 24,950,000
------------
64,936,558
MEDIA - PUBLISHING 2.3%
News Corporation, Ltd. Sponsored ADR 470,000 17,977,500
Readers Digest Association, Inc. Class A 720,000 21,060,000
------------
39,037,500
MEDIA - RADIO/TV 2.2%
AT&T Corporation-Liberty
Media Group Class A (b) 670,000 38,022,500
METALS & MINING 1.2%
Phelps Dodge Corporation 300,000 20,137,500
OIL - NORTH AMERICAN EXPLORATION & PRODUCTION 4.5%
Anadarko Petroleum Corporation 618,600 21,109,725
Apache Corporation 540,000 19,946,250
Devon Energy Corporation 580,000 19,067,500
EOG Resources, Inc. 920,000 16,157,500
Harken Energy Corporation (b) 2,609,500 1,957,125
------------
78,238,100
16
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES December 31, 1999
- ------------------------------------------------------------------------------
STRONG COMMON STOCK FUND (CONTINUED)
- ------------------------------------------------------------------------------
<CAPTION>
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------
<S> <C> <C>
OIL WELL EQUIPMENT & SERVICE 4.5%
Nabors Industries, Inc. (b) 950,000 $ 29,390,625
Offshore Logistics, Inc. (b) 534,500 5,010,937
Smith International, Inc. (b) 525,000 26,085,938
Tidewater, Inc. 490,000 17,640,000
------------
78,127,500
POLLUTION CONTROL 1.4%
Republic Services, Inc. (b) 1,725,000 24,796,875
REAL ESTATE 2.2%
Apartment Investment & Management
Company Class A 490,000 19,508,125
Security Capital Group, Inc.
Class B (b) 1,150,000 14,375,000
Ventas, Inc. 870,000 3,643,125
------------
37,526,250
RETAIL - MAJOR CHAIN 0.1%
The Daiei, Inc. (b) 400,000 1,584,972
RETAIL - RESTAURANT 0.7%
IHOP Corporation (b) (f) 750,000 12,515,625
RETAIL - SPECIALTY 4.0%
Barnes & Noble, Inc. (b) 980,000 20,212,500
Ingram Micro, Inc. Class A (b) 1,470,000 19,293,750
Ross Stores, Inc. 880,000 15,785,000
TJX Companies, Inc. 725,000 14,817,188
------------
70,108,438
SHOE & APPAREL MANUFACTURING 2.4%
Liz Claiborne, Inc. 579,900 21,818,738
Unifi, Inc. (b) 1,675,000 20,623,437
------------
42,442,175
TELECOMMUNICATION EQUIPMENT 1.1%
Newbridge Networks Corporation (b) 850,000 19,178,125
TELECOMMUNICATIONS - CELLULAR 4.7%
Aerial Communications, Inc. (b) 515,000 31,350,625
United States Cellular Corporation (b) 275,000 27,757,812
Vodafone AirTouch PLC Sponsored ADR 434,000 21,483,000
------------
80,591,437
TELECOMMUNICATIONS - SERVICES 3.4%
Intermedia Communications, Inc. (b) 670,000 26,004,375
MediaOne Group, Inc. (b) 362,000 27,806,125
Nippon Telegraph & Telephone Corporation 345 5,906,956
------------
59,717,456
TELEPHONE 1.4%
Broadwing, Inc. 680,000 25,075,000
- ------------------------------------------------------------------------------
Total Common Stocks (Cost $1,142,140,141) 1,590,985,588
- ------------------------------------------------------------------------------
CORPORATE BONDS 0.6%
Omnipoint Corporation Senior Notes,
11.625%, Due 8/15/06 $8,500,000 9,052,500
Omnipoint Corporation Senior Notes,
Series A, 11.625%, Due 8/15/06 1,500,000 1,597,500
- ------------------------------------------------------------------------------
Total Corporate Bonds (Cost $6,308,077) 10,650,000
- ------------------------------------------------------------------------------
CONVERTIBLE BONDS 0.0%
Capital Properties New Zealand, Ltd. Capital Notes,
8.50%, Due 4/15/05 279,720 NZD 133,178
- ------------------------------------------------------------------------------
Total Convertible Bonds (Cost $253,064) 133,178
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 8.3%
COMMERCIAL PAPER 0.1%
INTEREST BEARING, DUE UPON DEMAND
Pitney Bowes Credit Corporation,
6.10% $924,500 924,500
Warner Lambert Company, 6.08% 460,000 460,000
Wisconsin Electric Power Company,
6.04% 596,000 596,000
---------
1,980,500
REPURCHASE AGREEMENTS 8.1%
ABN-AMRO Inc. (Dated 12/31/99), 2.75%,
Due 1/03/00 (Repurchase proceeds
$140,032,083); Collateralized by:
U.S. Government & Agency
Issues (e) $140,000,000 $ 140,000,000
UNITED STATES GOVERNMENT ISSUES 0.1%
United States Treasury Bills,
Due 2/03/00 (c) 1,000,000 995,694
- ------------------------------------------------------------------------------
Total Short-Term Investments (Cost $142,976,246) 142,976,194
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Total Investments in Securities
(Cost $1,291,677,528) 100.7% 1,744,744,960
Other Assets and Liabilities, Net (0.7%) (11,663,810)
- ------------------------------------------------------------------------------
NET ASSETS 100.0% $1,733,081,150
==============================================================================
</TABLE>
<TABLE>
<CAPTION>
FUTURES
- ------------------------------------------------------------------------------
Underlying
Expiration Face Amount Unrealized
Date at Value Depreciation
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Sold:
15 S&P 500 3/00 $5,565,750 $166,500
WRITTEN OPTIONS ACTIVITY
- ------------------------------------------------------------------------------
Contracts Premiums
- ------------------------------------------------------------------------------
Options outstanding at beginning of year -- $ --
Options written during the year 80 17,759
Options closed -- --
Options expired -- --
Options exercised (80) (17,759)
-------- --------
Options outstanding at end of year -- $ --
======== ========
</TABLE>
- ------------------------------------------------------------------------------
STRONG DISCOVERY FUND
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS 92.1%
BANK - MONEY CENTER 0.9%
Citigroup, Inc. 30,800 $1,711,325
BROKERAGE & INVESTMENT MANAGEMENT 0.6%
Waddell & Reed Financial, Inc. Class A 44,000 1,193,500
COMMERCIAL SERVICE 4.8%
Coinmach Laundry Corporation (b) 402,000 4,271,250
The Hertz Corporation 28,250 1,416,031
ITT Educational Services, Inc. (b) 136,700 2,110,306
Lamar Advertising Company (b) 7,000 423,937
Valassis Communications, Inc. (b) 19,300 815,425
---------
9,036,949
COMPUTER - MAINFRAME 3.0%
Dell Computer Corporation (b) 26,400 1,346,400
Hewlett-Packard Company 16,300 1,857,181
International Business Machines
Corporation 22,000 2,376,000
---------
5,579,581
COMPUTER - PERIPHERAL EQUIPMENT 3.8%
EMC Communications Corporation (b) 28,100 3,069,925
Lexmark International Group, Inc.
Class A (b) 14,900 1,348,450
Microchip Technology, Inc. (b) 22,000 1,505,625
Network Appliance, Inc. (b) 4,200 348,863
SanDisk Corporation (b) 9,600 924,000
---------
7,196,863
17
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) December 31, 1999
- ------------------------------------------------------------------------------
STRONG DISCOVERY FUND (continued)
- ------------------------------------------------------------------------------
<CAPTION>
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------
<S> <C> <C>
COMPUTER SERVICE 0.9%
CSG Systems International, Inc. (b) 7,800 $ 311,025
Pierce Leahy Corporation (b) 31,700 1,371,025
---------
1,682,050
COMPUTER SOFTWARE 8.8%
Business Objects SA Sponsored ADR (b) 3,700 494,412
Cabletron Systems, Inc. (b) 40,400 1,050,400
Cisco Systems, Inc. (b) 41,300 4,424,262
Microsoft Corporation (b) 39,300 4,588,275
Oracle Systems Corporation (b) 49,500 5,547,094
TIBCO Software, Inc. (b) 2,600 397,800
---------
16,502,243
COMPUTER SYSTEMS 0.8%
Psion PLC 34,200 1,493,692
CONSUMER - MISCELLANEOUS 0.0%
Carriage Services, Inc. Class A (b) 2,300 13,656
DIVERSIFIED OPERATIONS 0.4%
Agilent Technologies, Inc. (b) 9,300 719,006
ELECTRICAL EQUIPMENT 0.6%
Methode Electronics, Inc. Class A 33,600 1,079,400
ELECTRONIC PARTS DISTRIBUTION 0.6%
Kent Electronics Corporation (b) 48,400 1,101,100
ELECTRONIC PRODUCTS - MISCELLANEOUS 0.6%
Rayovac Corporation (b) 55,900 1,055,113
ELECTRONICS - MISCELLANEOUS COMPONENTS 0.5%
Vishay Intertechnology, Inc. (b) 30,900 977,213
ELECTRONICS - SEMICONDUCTOR EQUIPMENT 0.4%
Applied Materials, Inc. (b) 5,500 696,781
ELECTRONICS - SEMICONDUCTOR MANUFACTURING 3.3%
Atmel Corporation (b) 35,300 1,043,556
Intel Corporation 23,700 1,950,806
Rambus, Inc. (b) 7,000 472,063
SDL, Inc. (b) 7,800 1,700,400
Texas Instruments, Inc. 11,200 1,085,000
---------
6,251,825
FINANCE - MISCELLANEOUS 0.3%
NOVA Corporation (b) 15,400 486,063
HEALTHCARE - BIOMEDICAL/GENETIC 1.6%
Abgenix, Inc. (b) 3,000 397,500
Medimmune, Inc. (b) 4,000 663,500
Neurocrine Biosciences, Inc. (b) 82,000 2,029,500
---------
3,090,500
HEALTHCARE - DRUG/DIVERSIFIED 0.4%
Halsey Drug Company, Inc. (Acquired
5/20/98 - 4/01/99; Cost $41,044) (b) (d) (f) 18,460 13,845
Jones Medical Industries, Inc. 16,400 712,375
---------
726,220
HEALTHCARE - MEDICAL SUPPLY 1.5%
Priority Healthcare Corporation Class B (b) 18,575 537,514
Sybron International Corporation (b) 92,900 2,293,469
---------
2,830,983
INSURANCE - LIFE 0.6%
Protective Life Corporation 35,100 1,116,619
INTERNET - E*COMMERCE 3.4%
Amazon.com, Inc. (b) 6,300 479,587
DoubleClick, Inc. (b) 17,000 4,302,062
Internet Capital Group, Inc. (b) 4,300 731,000
Stamps.com, Inc. (b) 22,250 926,156
---------
6,438,805
INTERNET - INTERNET SERVICE PROVIDER/CONTENT 5.4%
Alloy Online, Inc.(b) 95,800 1,508,850
America Online, Inc. (b) 43,400 3,273,987
USinternetworking, Inc. (b) 37,150 2,595,856
Yahoo! Inc. (b) 6,295 2,723,768
---------
10,102,461
INTERNET - NETWORK SECURITY/SOLUTIONS 0.3%
Juniper Networks, Inc. (b) 1,600 544,000
INTERNET - SOFTWARE 2.1%
Ariba, Inc. (b) 8,000 1,419,000
Vignette Corporation (b) 15,500 2,526,500
---------
3,945,500
LEISURE PRODUCT 0.5%
SCP Pool Corporation (b) 39,300 1,019,344
LEISURE SERVICE 1.2%
Bally Total Fitness Holding Corporation (b) 40,800 1,088,850
Park Place Entertainment Corporation (b) 95,400 1,192,500
---------
2,281,350
MACHINE TOOL 0.5%
Applied Power, Inc. 27,900 1,025,325
MACHINERY - CONSTRUCTION & MINING 1.1%
Oshkosh Truck Corporation 70,700 2,072,394
MEDIA - CABLE TV 0.3%
Adelphia Communications Corporation Class A (b) 7,600 498,750
MEDIA - RADIO/TV 10.1%
AMFM, Inc. (b) 61,000 4,773,250
CBS Corporation (b) 8,800 562,650
Clear Channel Communications, Inc. (b) 35,400 3,159,450
Emmis Broadcasting Corporation Class A (b) 18,575 2,315,200
Infinity Broadcasting Corporation Class A (b) 123,050 4,452,872
Viacom International, Inc. (b) 61,600 3,722,950
---------
18,986,372
OIL - NORTH AMERICAN EXPLORATION & PRODUCTION 2.8%
Devon Energy Corporation 31,500 1,035,562
Ocean Energy, Inc. (b) 331,100 2,566,025
Union Pacific Resources Group, Inc. 132,250 1,686,188
---------
5,287,775
OIL WELL EQUIPMENT & SERVICE 4.0%
BJ Services Company (b) 44,000 1,839,750
Cooper Cameron Corporation (b) 19,100 934,706
Marine Drilling Companies, Inc. (b) 35,900 805,506
Nabors Industries, Inc. (b) 70,800 2,190,375
Noble Drilling Corporation (b) 52,800 1,729,200
---------
7,499,537
PERSONAL & COMMERCIAL LENDING 0.1%
Household International, Inc. 6,900 257,025
RAILROAD 0.2%
Wisconsin Central Transportation Corporation (b) 26,500 356,094
REAL ESTATE 3.3%
Pinnacle Holdings, Inc. (b) 143,900 6,097,763
RETAIL - SPECIALTY 6.5%
Central Garden & Pet Company (b) 501,925 5,207,472
Insight Enterprises, Inc. (b) 27,700 1,125,312
Movie Gallery, Inc. (b) 184,100 793,931
Regis Corporation 91,800 1,732,725
Rent-A-Center, Inc. (b) 28,900 572,581
Sunglass Hut International, Inc. (b) 245,500 2,761,875
---------
12,193,896
SAVINGS & LOAN 1.3%
TCF Financial Corporation 94,800 2,358,150
18
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) December 31, 1999
- ------------------------------------------------------------------------------
STRONG DISCOVERY FUND (CONTINUED)
- ------------------------------------------------------------------------------
<CAPTION>
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------
<S> <C> <C>
TELECOMMUNICATION EQUIPMENT 4.4%
CIENA Corporation (b) 2,600 $ 149,500
Ericsson (LM) Telephone Company ADR Class B 16,000 1,051,000
JDS Uniphase Corporation (b) 4,400 709,775
Lucent Technologies, Inc. 22,400 1,675,800
Motorola, Inc. 6,100 898,225
Nokia Corporation Sponsored ADR 17,100 3,249,000
Tut Systems, Inc. (b) 11,300 605,963
----------
8,339,263
TELECOMMUNICATIONS - CELLULAR 6.2%
Microcell Telecommunications, Inc. (b) 126,250 4,150,469
Millicom International Cellular SA (b) 67,400 4,204,075
NTT Mobile Communication Network, Inc. 23 884,356
Powertel, Inc. (b) 5,575 559,591
Vodafone AirTouch PLC Sponsored ADR 34,900 1,727,550
----------
11,526,041
TELECOMMUNICATIONS - SERVICES 3.7%
Globalstar Telecommunications, Ltd. (b) 7,275 320,100
MediaOne Group, Inc. (b) 25,400 1,951,037
Nextel Communications, Inc. Class A (b) 4,900 505,312
Sonera Corporation Sponsored ADR (b) 35,600 2,465,300
Sonera Oyj 23,800 1,629,308
----------
6,871,057
TELEPHONE 0.3%
Broadwing, Inc. 13,400 494,125
- ------------------------------------------------------------------------------
Total Common Stocks (Cost $125,501,230) 172,735,709
- ------------------------------------------------------------------------------
WARRANTS 0.0%
Halsey Drug Company, Inc. Warrants, Expire
12/26/01 (Acquired 7/21/97; Cost $0) (b) (d) (f) 21,429 4,822
- ------------------------------------------------------------------------------
Total Warrants (Cost $0) 4,822
- ------------------------------------------------------------------------------
CONVERTIBLE BONDS 0.1%
Halsey Drug Company, Inc. Subordinated
Debentures, 10.00%, Due 8/06/01
(Acquired 8/05/96; Cost $587,550) (b) (d) (f) $600,000 138,462
- ------------------------------------------------------------------------------
Total Convertible Bonds (Amortized Cost $595,321) 138,462
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 0.2%
COMMERCIAL PAPER 0.0%
INTEREST BEARING, DUE UPON DEMAND
Warner Lambert Company, 6.08% 34,700 34,700
UNITED STATES GOVERNMENT ISSUES 0.2%
United States Treasury Bills, Due 2/10/00 260,000 258,647
- ------------------------------------------------------------------------------
Total Short-Term Investments (Cost $293,303) 293,347
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Total Investments in Securities (Cost $126,389,854) 92.4% 173,172,340
Other Assets and Liabilities, Net 7.6% 14,273,264
- ------------------------------------------------------------------------------
NET ASSETS 100.0% $187,445,604
==============================================================================
WRITTEN OPTIONS ACTIVITY
- ------------------------------------------------------------------------------
Contracts Premiums
- ------------------------------------------------------------------------------
Options outstanding at beginning of year -- $ --
Options written during the year 2,339 918,677
Options closed (2,292) (857,801)
Options expired -- --
Options exercised (47) (60,876)
--------- ---------
Options outstanding at end of year -- $ --
========= =========
Closed and exercised options resulted in a capital loss of $1,108,528.
- ------------------------------------------------------------------------------
STRONG GROWTH FUND
- ------------------------------------------------------------------------------
<CAPTION>
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS 94.6%
BANK - MONEY CENTER 0.3%
Citigroup, Inc. 200,000 $11,112,500
BANK - SUPER REGIONAL 0.6%
Northern Trust Company 150,000 7,950,000
UnionBanCal Corporation 300,000 11,831,250
-----------
19,781,250
BROKERAGE & INVESTMENT MANAGEMENT 0.5%
Webs Index Fund, Inc. - Japan Webs
Index Series 1,000,000 16,312,500
COMMERCIAL SERVICE 2.9%
Infinity Broadcasting Corporation Class A (b) 750,000 27,140,625
Omnicom Group, Inc. 275,000 27,500,000
Paychex, Inc. 700,000 28,000,000
Young & Rubicam, Inc. 200,000 14,150,000
-----------
96,790,625
COMPUTER - MANUFACTURERS 0.8%
Sun Microsystems, Inc. (b) 325,000 25,167,188
COMPUTER SOFTWARE 17.3%
Business Objects SA Sponsored ADR (b) 348,900 46,621,762
Check Point Software Technologies, Ltd. (b) 100,000 19,875,000
Cisco Systems, Inc. (b) (c) 1,550,000 166,043,750
Citrix Systems, Inc. (b) 200,000 24,600,000
I2 Technologies, Inc. (b) 212,400 41,418,000
Legato Systems, Inc. (b) 250,000 17,203,125
Mercury Interactive Corporation (b) 160,000 17,270,000
Microsoft Corporation (b) 200,000 23,350,000
Oracle Systems Corporation (b) 350,000 39,221,875
Parametric Technology Corporation (b) 155,000 4,194,688
Peregrine Systems, Inc. (b) 300,000 24,787,500
Siebel Systems, Inc. (b) 300,000 25,200,000
TIBCO Software, Inc. (b) 100,000 15,300,000
Veritas Software Corporation (b) 700,000 100,187,500
Viador, Inc. (b) 175,000 7,415,625
Visual Networks, Inc. (b) 100,000 7,925,000
-----------
580,613,825
DIVERSIFIED OPERATIONS 0.9%
Agilent Technologies, Inc. (b) 400,000 30,925,000
ELECTRONIC INSTRUMENTATION 1.4%
PE Corporation-PE Biosystems Group 400,000 48,125,000
ELECTRONIC PRODUCTS - MISCELLANEOUS 0.5%
Celestica, Inc. (b) 100,000 5,550,000
Flextronics International, Ltd. (b) 150,000 6,900,000
Jabil Circuit, Inc. (b) 75,000 5,475,000
-----------
17,925,000
ELECTRONICS - MISCELLANEOUS COMPONENTS 0.3%
RadiSys Corporation (b) 225,000 11,475,000
ELECTRONICS - SEMICONDUCTOR EQUIPMENT 1.4%
ASM Lithography Holding NV (b) 52,700 5,994,625
Credence Systems Corporation (b) 100,000 8,650,000
Kulicke & Soffa Industries, Inc. (b) 100,000 4,256,250
Orbotech, Ltd. (b) 201,000 15,577,500
Teradyne, Inc. (b) 175,000 11,550,000
-----------
46,028,375
ELECTRONICS - SEMICONDUCTOR MANUFACTURING 4.6%
Applied Micro Circuits Corporation (b) 350,000 44,537,500
Broadcom Corporation (b) 75,000 20,428,125
PMC-Sierra, Inc. (b) 200,000 32,062,500
SDL, Inc. (b) 175,000 38,150,000
Xilinx, Inc. (b) 400,000 18,187,500
-----------
153,365,625
19
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) December 31, 1999
- ------------------------------------------------------------------------------
STRONG GROWTH FUND (CONTINUED)
- ------------------------------------------------------------------------------
<CAPTION>
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------
<S> <C> <C>
HEALTHCARE - BIOMEDICAL/GENETIC 7.5%
Amgen, Inc. (b) 200,000 $ 12,012,500
Chiron Corporation (b) 600,000 25,425,000
Genentech, Inc. (b) 350,000 47,075,000
Human Genome Sciences, Inc. (b) 350,000 53,418,750
Immunex Corporation (b) 125,000 13,687,500
Medimmune, Inc. (b) 400,000 66,350,000
Millennium Pharmaceuticals, Inc. (b) 200,000 24,400,000
Qiagen NV (b) 121,100 9,143,050
-----------
251,511,800
HEALTHCARE - MEDICAL SUPPLY 0.1%
Advanced Neuromodulation Systems, Inc. (b) 300,000 2,812,500
HEALTHCARE - PRODUCT 0.7%
Sepracor, Inc. (b) 225,000 22,317,188
INTERNET - E*COMMERCE 1.4%
DoubleClick, Inc. (b) 100,000 25,306,250
Getty Images, Inc. (b) 275,000 13,440,625
Scient Corporation (b) 97,200 8,401,725
-----------
47,148,600
INTERNET - INTERNET SERVICE PROVIDER/CONTENT 3.0%
Akamai Technologies, Inc. (b) 75,000 24,571,875
America Online, Inc. (b) 150,000 11,315,625
InfoSpace.com, Inc. (b) 125,000 26,750,000
VerticalNet, Inc. (b) 100,000 16,400,000
Yahoo! Inc. (b) 50,000 21,634,375
-----------
100,671,875
INTERNET - NETWORK SECURITY/SOLUTIONS 8.4%
Exodus Communications, Inc. (b) 450,000 39,965,625
Juniper Networks, Inc. (b) 220,000 74,800,000
Redback Networks, Inc. (b) 161,000 28,577,500
Sapient Corporation (b) 150,000 21,140,625
VeriSign, Inc. (b) 600,000 114,562,500
Viant Corporation (b) 29,000 2,871,000
-----------
281,917,250
INTERNET - SOFTWARE 9.4%
Agile Software Corporation (b) 100,000 21,723,437
Ariba, Inc. (b) 275,000 48,778,125
BEA Systems, Inc. (b) 550,000 38,465,625
BroadVision, Inc. (b) 500,000 85,031,250
CMGI, Inc. (b) 100,000 27,687,500
Liberate Technologies (b) 77,000 19,789,000
Portal Software, Inc. (b) 125,000 12,859,375
Proxicom, Inc. (b) 100,000 12,431,250
Vignette Corporation (b) 300,000 48,900,000
-----------
315,665,562
MEDIA - CABLE TV 0.5%
Comcast Corporation Class A 350,000 17,587,500
MEDIA - RADIO/TV 4.4%
Clear Channel Communications, Inc. (b) 175,000 15,618,750
Emmis Broadcasting Corporation Class A (b) 450,000 56,088,281
Entercom Communications Corporation (b) 300,000 19,800,000
Radio One, Inc. (b) 150,000 13,800,000
Univision Communications, Inc. (b) 400,000 40,875,000
-----------
146,182,031
OIL - NORTH AMERICAN EXPLORATION & PRODUCTION 0.3%
Murphy Oil Corporation 200,000 11,475,000
OIL - NORTH AMERICAN INTEGRATED 0.6%
Kerr McGee Corporation 300,000 18,600,000
OIL WELL EQUIPMENT & SERVICE 2.1%
BJ Services Company (b) 750,000 31,359,375
Cooper Cameron Corporation (b) 300,000 14,681,250
ENSCO International, Inc. 775,000 17,728,125
R&B Falcon Corporation (b) 500,000 6,625,000
-----------
70,393,750
<CAPTION>
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------
<S> <C> <C>
RETAIL - DEPARTMENT STORE 1.9%
Kohl's Corporation (b) (c) 900,000 $ 64,968,750
RETAIL - DISCOUNT & VARIETY 0.6%
Dollar Tree Stores, Inc. (b) 400,000 19,375,000
RETAIL - SPECIALTY 3.6%
The Home Depot, Inc. 1,050,000 71,990,625
Lowe's Companies, Inc. 450,000 26,887,500
Pacific Sunwear of California (b) 450,000 14,484,375
Tiffany & Company 100,000 8,925,000
-----------
122,287,500
TELECOMMUNICATION EQUIPMENT 15.4%
C-Cor Electronics, Inc. (b) 150,000 11,493,750
Comverse Technology, Inc. (b) 150,000 21,712,500
E-Tek Dynamics, Inc. (b) 475,000 63,946,875
General Instrument Corporation (b) 150,000 12,750,000
JDS Uniphase Corporation (b) 1,200,000 193,575,000
Lucent Technologies, Inc. 250,000 18,703,125
Next Level Communications, Inc. (b) 700 52,412
Nokia Corporation Sponsored ADR 219,500 41,705,000
Nortel Networks Corporation 250,000 25,250,000
Polycom, Inc. (b) 125,000 7,960,938
Qualcomm, Inc. (b) 500,000 88,125,000
Sycamore Networks, Inc. (b) 100,000 30,800,000
-----------
516,074,600
TELECOMMUNICATIONS - CELLULAR 2.1%
Sprint Corporation - PCS Group (b) 200,000 20,500,000
VoiceStream Wireless Corporation (b) 350,000 49,809,375
-----------
70,309,375
TELEPHONE 1.1%
Broadwing, Inc. 500,000 18,437,500
Telephone & Data Systems, Inc. 150,000 18,900,000
-----------
37,337,500
- ------------------------------------------------------------------------------
Total Common Stocks (Cost $1,625,796,385) 3,174,257,669
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 6.0%
COMMERCIAL PAPER 0.0%
INTEREST BEARING, DUE UPON DEMAND
Pitney Bowes Credit Corporation, 6.10% $ 500,000 500,000
Warner Lambert Company, 6.08% 463,600 463,600
-----------
963,600
REPURCHASE AGREEMENTS 6.0%
ABN-AMRO Inc. (Dated 12/31/99), 2.75%,
Due 1/03/00 (Repurchase proceeds
$199,545,719); Collateralized by:
U.S. Government & Agency Issues (e) 199,500,000 199,500,000
- ------------------------------------------------------------------------------
Total Short-Term Investments (Cost $200,463,600) 200,463,600
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Total Investments in Securities
(Cost $1,826,259,985) 100.6% 3,374,721,269
Other Assets and Liabilities, Net (0.6%) (21,039,550)
- ------------------------------------------------------------------------------
Net Assets 100.0% $3,353,681,719
==============================================================================
</TABLE>
20
<PAGE>
- ------------------------------------------------------------------------------
STRONG GROWTH FUND (CONTINUED)
- ------------------------------------------------------------------------------
FUTURES
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Underlying
Expiration Face Amount Unrealized
Date at Value Appreciation
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Sold:
280 NASDAQ 100 Index 3/00 $105,117,600 $89,992
</TABLE>
WRITTEN OPTIONS ACTIVITY
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Contracts Premiums
- ------------------------------------------------------------------------------
<S> <C> <C>
Options outstanding at beginning of year -- $ --
Options written during year 65,265 121,435,816
Options closed (65,263) (121,435,143)
Options expired -- --
Options exercised (2) (673)
------- -------------
Options outstanding at end of year -- $ --
======= =============
</TABLE>
Closed options resulted in a capital loss of $34,829,080.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
STRONG MID CAP DISCIPLINED FUND
- ------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS 97.4%
AGRICULTURAL OPERATIONS 1.3%
Fresh Del Monte Produce, Inc. (b) 8,600 $ 77,400
BANK - REGIONAL 1.9%
CCB Financial Corporation 2,600 113,262
BEVERAGE - SOFT DRINK 1.7%
The Pepsi Bottling Group, Inc. 5,950 98,547
COMMERCIAL SERVICE 4.4%
MedQuist, Inc. (b) 2,300 59,369
True North Communications, Inc. 2,300 102,781
Valassis Communications, Inc. (b) 2,400 101,400
---------
263,550
COMPUTER - PERIPHERAL EQUIPMENT 1.6%
American Power Conversion Corporation (b) 3,600 94,950
COMPUTER SERVICE 4.6%
Acxiom Corporation (b) 4,200 100,800
American Management Systems, Inc. (b) 3,000 94,125
Shared Medical Systems Corporation 1,500 76,406
---------
271,331
COMPUTER SOFTWARE 5.8%
Parametric Technology Corporation (b) 2,800 75,775
Rational Software Corporation (b) 1,500 73,687
Sterling Software, Inc. (b) 3,825 120,488
Symbol Technologies, Inc. 1,200 76,275
---------
346,225
COSMETIC & PERSONAL CARE 2.9%
Playtex Products, Inc. (b) 11,190 172,046
ELECTRONICS - SEMICONDUCTOR EQUIPMENT 1.5%
Etec Systems, Inc. (b) 2,000 89,750
ELECTRONICS - SEMICONDUCTOR MANUFACTURING 2.3%
Galileo Technology, Ltd. (b) 2,200 53,075
International Rectifier Corporation (b) 3,200 83,200
---------
136,275
<CAPTION>
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------
<S> <C> <C>
FINANCE - MISCELLANEOUS 2.6%
CompuCredit Corporation (b) 2,300 $ 88,550
Heller Financial, Inc. 3,400 68,212
---------
156,762
FOOD 2.3%
Flowers Industries, Inc. 8,585 136,823
HEALTHCARE - MEDICAL SUPPLY 4.1%
AmeriSource Health Corporation Class A (b) 12,075 183,389
Cardinal Health, Inc. 1,200 57,450
---------
240,839
HEALTHCARE - PATIENT CARE 3.3%
Omnicare, Inc. 4,500 54,000
Renal Care Group, Inc. (b) 2,900 67,787
Universal Health Services, Inc.
Class B (b) 2,000 72,000
---------
193,787
INSURANCE - LIFE 1.9%
Protective Life Corporation 3,525 112,139
INSURANCE - PROPERTY & CASUALTY 1.2%
Ace, Ltd. 4,100 68,419
INTERNET - E*COMMERCE 1.3%
Sterling Commerce, Inc. (b) 2,300 78,344
MEDIA - CABLE TV 0.5%
Classic Communications, Inc. Class A (b) 900 32,906
MEDIA - PUBLISHING 3.2%
Houghton Mifflin Company 1,400 59,062
Ziff-Davis, Inc. (b) 8,300 131,244
---------
190,306
MEDIA - RADIO/TV 2.7%
AMFM, Inc. (b) 1,575 123,244
Entercom Communications Corporation (b) 700 46,200
---------
169,444
NATURAL GAS DISTRIBUTION 1.4%
El Paso Energy Corporation 2,200 85,388
OIL - NORTH AMERICAN EXPLORATION & PRODUCTION 1.2%
Devon Energy Corporation 2,100 69,038
OIL - NORTH AMERICAN INTEGRATED 0.8%
USX-Marathon Group 1,900 46,906
OIL WELL EQUIPMENT & SERVICE 6.8%
ENSCO International, Inc. 2,700 61,762
Nabors Industries, Inc. (b) 2,450 75,797
Precision Drilling Corporation (b) 2,600 66,787
Pride International, Inc. (b) 4,400 64,350
Smith International, Inc. (b) 1,400 69,563
Weatherford International, Inc. (b) 1,700 67,894
---------
406,153
PAPER & FOREST PRODUCTS 1.4%
Bowater, Inc. 1,500 81,469
POLLUTION CONTROL 3.6%
Newpark Resources, Inc. (b) 115,000 91,875
Republic Services, Inc. (b) 8,600 123,625
---------
215,500
RETAIL - DEPARTMENT STORE 3.8%
Ames Department Stores, Inc. (b) 3,900 112,369
Family Dollar Stores, Inc. 6,800 110,925
---------
223,294
RETAIL - FOOD CHAIN 2.1%
SUPERVALU, Inc. 6,300 126,000
</TABLE>
21
<PAGE>
- ------------------------------------------------------------------------------
STRONG MID CAP DISCIPLINED FUND (continued)
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------
<S> <C> <C>
RETAIL - RESTAURANT 1.3%
Outback Steakhouse, Inc. (b) 2,900 $ 75,219
SAVINGS & LOAN 1.6%
Charter One Financial, Inc. 4,947 94,611
SHOE & APPAREL MANUFACTURING 3.4%
Jones Apparel Group, Inc. (b) 2,600 70,525
Polo Ralph Lauren Corporation (b) 4,200 71,663
WestPoint Stevens, Inc. 3,400 59,500
---------
201,688
TELECOMMUNICATION EQUIPMENT 7.0%
Adaptive Broadband Corporation (b) 1,100 81,194
CIENA Corporation (b) 1,400 80,500
Digital Microwave Corporation (b) 4,000 93,750
ECI Telecom, Ltd. 2,400 75,900
Tekelec (b) 3,900 87,750
---------
419,094
TELECOMMUNICATIONS - CELLULAR 1.5%
United States Cellular Corporation (b) 900 90,844
TELECOMMUNICATIONS - SERVICES 8.1%
Broadwing, Inc. 3,000 110,625
Clearnet Communications, Inc. Class A (b) 2,700 92,812
ITC/DeltaCom, Inc. (b) 4,300 118,788
Intermedia Communications, Inc. (b) 2,300 89,269
MediaOne Group, Inc. (b) 890 68,363
---------
479,857
TRUCKING 2.3%
CNF Transportation, Inc. 3,900 134,550
-----------------------------------------------------------------------------
Total Common Stocks (Cost $5,206,722) 5,792,716
-----------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 6.9%
COMMERCIAL PAPER
INTEREST BEARING, DUE UPON DEMAND
Pitney Bowes Credit Corporation, 6.10% $283,200 283,200
Warner Lambert Company, 6.08% 126,300 126,300
-----------------------------------------------------------------------------
Total Short-Term Investments (Cost $409,500) 409,500
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Total Investments in Securities
(Cost $5,616,222) 104.3% 6,202,216
Other Assets and Liabilities,
Net (4.3%) (257,604)
-----------------------------------------------------------------------------
Net Assets 100.0% $5,944,612
=============================================================================
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
STRONG MID CAP GROWTH FUND
------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS 101.4%
BROKERAGE & INVESTMENT MANAGEMENT 4.5%
Donaldson, Lufkin & Jenrette, Inc. 12,500 $ 604,688
Kansas City Southern Industries, Inc. 9,500 708,938
Knight/Trimark Group, Inc. Class A (b) 14,000 644,000
Lehman Brothers Holdings, Inc. 11,500 973,906
---------
2,931,532
COMPUTER - PERIPHERAL EQUIPMENT 1.9%
Network Appliance, Inc. (b) 5,000 415,313
SanDisk Corporation (b) 8,500 818,125
---------
1,233,438
COMPUTER SOFTWARE 20.5%
Aspect Development, Inc. (b) 11,500 787,750
Brocade Communications Systems, Inc. (b) 6,000 1,062,000
Business Objects SA Sponsored ADR (b) 2,600 347,425
Check Point Software Technologies, Ltd (b) 6,000 1,192,500
---------
Citrix Systems, Inc. (b) 5,000 615,000
J.D. Edwards & Company (b) 23,800 711,025
<CAPTION>
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------
<S> <C> <C>
Electronic Arts, Inc. (b) 5,500 $ 462,000
Entrust Technologies, Inc. (b) 12,000 719,250
Extreme Networks, Inc. (b) 7,500 626,250
Finisar Corporation (b) 7,500 674,062
Foundry Networks, Inc. (b) 2,500 754,219
Intuit, Inc. (b) 9,000 539,438
MicroStrategy, Inc. (b) 4,000 840,000
Parametric Technology Corporation (b) 10,000 270,625
PeopleSoft, Inc. (b) 28,500 607,407
SCM Microsystems, Inc. (b) 6,100 390,019
Siebel Systems, Inc. (b) 4,800 403,200
Sybase, Inc. (b) 19,000 323,000
Veritas Software Corporation (b) 9,300 1,331,063
Verity, Inc. (b) 18,500 787,407
---------
13,443,640
COMPUTER SYSTEMS 1.1%
VA Linux Systems, Inc. (b) 3,500 723,188
ELECTRONIC INSTRUMENTATION 1.7%
PE Corporation-PE Biosystems Group 9,400 1,130,938
ELECTRONICS - SEMICONDUCTOR EQUIPMENT 3.1%
ASM Lithography Holding NV (b) 5,500 625,625
Credence Systems Corporation (b) (g) 9,500 821,750
Lam Research Corporation (b) (g) 5,000 557,812
---------
2,005,187
ELECTRONICS - SEMICONDUCTOR MANUFACTURING 7.4%
Applied Micro Circuits Corporation (b) 5,600 712,600
Conexant Systems, Inc. (b) 9,500 630,562
Genesis Microchip, Inc. (b) 33,000 697,125
HI/FN, Inc. (b) 13,000 503,750
PMC-Sierra, Inc. (b) (g) 3,100 496,969
Triquint Semiconductor, Inc. (b) 7,000 778,750
Vitesse Semiconductor Corporation (b) 19,500 1,022,531
---------
4,842,287
HEALTHCARE - BIOMEDICAL/GENETIC 3.8%
Genzyme Corporation (b) 11,500 517,500
Immunex Corporation (b) 4,500 492,750
Medimmune, Inc. (b) (g) 6,500 1,078,187
Millennium Pharmaceuticals, Inc. (b) 3,000 366,000
---------
2,454,437
HEALTHCARE - INSTRUMENTATION 1.7%
Affymetrix, Inc. (b) (g) 6,600 1,119,937
HEALTHCARE - PATIENT CARE 2.6%
Health Management Associates, Inc.
Class A (b) 40,000 535,000
Omnicare, Inc. 44,000 528,000
Tenet Healthcare Corporation (b) 28,000 658,000
---------
1,721,000
HEALTHCARE - PRODUCT 1.4%
Sepracor, Inc. (b) 9,500 942,281
INTERNET - E*COMMERCE 3.7%
DoubleClick, Inc. (b) 2,500 632,656
Internet Capital Group, Inc. (b) (g) 7,800 1,326,000
PurchasePro.com, Inc. (b) 3,500 481,250
---------
2,439,906
INTERNET - INTERNET SERVICE PROVIDER/CONTENT 6.8%
Akamai Technologies, Inc. (b) 2,000 655,250
CNET, Inc. (b) 10,500 595,875
MP3.com, Inc. (b) 20,500 649,594
USinternetworking, Inc. (b) 23,250 1,624,593
VerticalNet, Inc. (b) 5,700 934,800
---------
4,460,112
INTERNET - NETWORK SECURITY/SOLUTIONS 12.3%
CacheFlow, Inc. (b) 4,300 561,956
Exodus Communications, Inc. (b) 13,000 1,154,562
Juniper Networks, Inc. (b) (g) 3,700 1,258,000
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
STRONG MID CAP GROWTH FUND (continued)
- ------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------
<S> <C> <C>
Open Market, Inc. (b) 15,000 $ 676,875
Redback Networks, Inc. (b) (g) 6,000 1,065,000
Sapient Corporation (b) (g) 10,000 1,409,375
VeriSign, Inc. (b) (g) 6,000 1,145,625
Viant Corporation (b) 7,700 762,300
-----------
8,033,693
INTERNET - SOFTWARE 11.1%
Ariba, Inc. (b) (g) 3,200 567,600
BEA Systems, Inc. (b) 5,500 384,656
CMGI, Inc. (b) (g) 3,700 1,024,437
F5 Networks, Inc. (b) 5,000 570,000
FreeMarkets, Inc. (b) 1,900 648,493
Media Metrix, Inc. (b) 21,500 768,625
Portal Software, Inc. (b) 7,000 720,125
Proxicom, Inc. (b) 7,500 932,344
Vignette Corporation (b) 6,000 978,000
WebTrends Corporation (b) 7,500 607,500
-----------
7,201,780
LEISURE PRODUCT 1.0%
Harley-Davidson, Inc. 10,000 640,625
MEDIA - RADIO/TV 1.0%
Westwood One, Inc. (b) (g) 9,000 684,000
OIL WELL EQUIPMENT & SERVICE 7.5%
BJ Services Company (b) 19,000 794,437
Cooper Cameron Corporation (b) 16,500 807,469
ENSCO International, Inc. 42,000 960,750
Noble Drilling Corporation (b) 39,000 1,277,250
Smith International, Inc. (b) 21,500 1,068,281
-----------
4,908,187
PRECIOUS METAL/GEM/STONE 0.8%
Newmont Mining Company 22,500 551,250
RETAIL - SPECIALTY 0.6%
Tiffany & Company 4,500 401,625
TELECOMMUNICATION EQUIPMENT 6.9%
E-Tek Dynamics, Inc. (b) (g) 11,500 1,548,187
General Instrument Corporation (b) 11,000 935,000
Harmonic, Inc. (b) 6,500 617,094
JDS Uniphase Corporation (b) (g) 5,900 951,744
Next Level Communications, Inc. (b) 6,000 449,250
-----------
4,501,275
- ------------------------------------------------------------------------------
Total Common Stocks (Cost $42,714,673) 66,370,318
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 7.3%
COMMERCIAL PAPER 4.1%
INTEREST BEARING, DUE UPON DEMAND
Pitney Bowes Credit Corporation, 6.10% $ 507,700 507,700
Warner Lambert Company, 6.08% 2,188,900 2,188,900
-----------
2,696,600
REPURCHASE AGREEMENTS 3.2%
Barclays Capital, Inc. (Dated 12/31/99),
2.85%, Due 1/03/00 (Repurchase proceeds
$2,100,499); Collateralized by:
United States Treasury Bonds (e) 2,100,000 2,100,000
- ------------------------------------------------------------------------------
Total Short-Term Investments (Cost $4,796,600) 4,796,600
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Total Investments in Securities
(Cost $47,511,273) 108.7% 71,166,918
Other Assets and Liabilities, Net (8.7%) (5,736,382)
- ------------------------------------------------------------------------------
Net Assets 100.0% $65,430,536
==============================================================================
</TABLE>
<TABLE>
<CAPTION>
WRITTEN OPTIONS ACTIVITY
- ------------------------------------------------------------------------------
Contracts Premiums
- ------------------------------------------------------------------------------
<S> <C> <C>
Options outstanding at beginning of year -- $ --
Options written during the year 10,206 19,333,965
Options closed (9,446) (17,059,261)
Options expired -- --
Options exercised (12) (56,447)
----------- -----------
-- --
Options outstanding at end of year 748 $ 2,218,257
=========== ===========
</TABLE>
Closed and exercised options resulted in a capital loss of $5,749,306.
<TABLE>
<CAPTION>
WRITTEN OPTIONS DETAIL
- -----------------------------------------------------------------------------
Contracts
(100 shares Value
per contract) (Note 2)
- -----------------------------------------------------------------------------
<S> <C> <C>
Affymetrix, Inc.
Calls: (Strike price is $140. Expiration Date is
1/21/00. Premium received $290,192.) 66 ($ 245,850)
Ariba, Inc.
Calls: (Strike price is $150. Expiration Date is
1/21/00. Premium received $81,187.) 20 (75,500)
CMGI, Inc.
Calls: (Strike price is $240. Expiration Date is
1/21/00. Premium received $172,883.) 37 (181,300)
Credence Systems Corporation
Calls: (Strike price is $70. Expiration Date is
1/21/00. Premium received $67,363.) 45 (77,062)
E-Tek Dynamics, Inc.
Calls: (Strike price is $90. Expiration Date is
1/21/00. Premium received $227,015.) 55 (259,875)
Calls: (Strike price is $100. Expiration Date is
1/21/00. Premium received $197,063.) 60 (228,000)
Internet Capital Group, Inc.
Calls: (Strike price is $140. Expiration Date is
1/21/00. Premium received $127,376.) 40 (150,500)
JDS Uniphase Corporation
Calls: (Strike price is $145. Expiration Date is
1/21/00. Premium received $50,587.) 29 (65,250)
Juniper Networks, Inc.
Calls: (Strike price is $280. Expiration Date is
1/21/00. Premium received $134,186.) 20 (151,750)
Lam Research Corporation
Calls: (Strike price is $95. Expiration Date is
1/21/00. Premium received $79,222.) 50 (90,000)
Medimmune, Inc.
Calls: (Strike price is $145. Expiration Date is
1/21/00. Premium received $79,080.) 35 (81,813)
PMC-Sierra, Inc.
Calls: (Strike price is $140. Expiration Date is
1/21/00. Premium received $77,404.) 31 (78,275)
Redback Networks, Inc.
Calls: (Strike price is $160. Expiration Date is
1/21/00. Premium received $161,315.) 60 (146,250)
Sapient Corporation
Calls: (Strike price is $110. Expiration Date is
1/21/00. Premium received $121,096.) 50 (164,375)
VeriSign, Inc.
Calls: (Strike price is $160. Expiration Date is
1/21/00. Premium received $233,312.) 60 (234,750)
Westwood One, Inc.
Calls: (Strike price is $60. Expiration Date iS
1/21/00. Premium received $118,976.) 90 (145,125)
--- -----------
748 ($2,375,675)
=== ===========
</TABLE>
23
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) December 31, 1999
- ------------------------------------------------------------------------------
STRONG OPPORTUNITY FUND
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS 89.2%
AEROSPACE & DEFENSE 0.8%
Northrop Grumman Corporation 361,000 $ 19,516,563
AIRLINE 0.2%
Air New Zealand, Ltd. Class B 2,892,000 4,236,664
AUTOMOBILE 1.2%
Ford Motor Company 548,100 29,289,094
BANK - MONEY CENTER 1.5%
Bank of America Corporation 600,000 30,112,500
The Bank of Tokyo - Mitsubishi 185,000 2,577,439
Sakura Bank, Ltd. 432,000 2,502,143
Sanwa Bank, Ltd. 220,000 2,675,472
-----------
37,867,554
BANK - SUPER REGIONAL 2.4%
Mellon Financial Corporation 810,000 27,590,625
Wells Fargo Company 850,000 34,371,875
-----------
61,962,500
BEVERAGE - SOFT DRINK 2.2%
The Pepsi Bottling Group, Inc. 1,670,700 27,670,969
Whitman Corporation 2,050,000 27,546,875
-----------
55,217,844
CHEMICAL - SPECIALTY 2.2%
Air Products & Chemicals, Inc. 110,200 3,698,588
Praxair, Inc. 453,000 22,791,562
Solutia, Inc. 1,870,000 28,868,125
-----------
55,358,275
COMPUTER - MANUFACTURERS 2.6%
Compaq Computer Corporation 960,000 25,980,000
Sun Microsystems, Inc. (b) 510,000 39,493,125
-----------
65,473,125
COMPUTER - PERIPHERAL EQUIPMENT 4.4%
American Power Conversion
Corporation (b) 1,788,500 47,171,688
Quantum Corporation - DLT & Storage
Systems (b) 1,025,000 15,503,125
Seagate Technology, Inc. (b) 1,063,000 49,495,937
-----------
112,170,750
COMPUTER SOFTWARE 5.7%
Cadence Design Systems, Inc. (b) 1,495,000 35,880,000
Keane, Inc. (b) 1,215,000 38,576,250
Oracle Systems Corporation (b) 357,000 40,006,312
Parametric Technology Corporation (b) 1,109,000 30,012,313
-----------
144,474,875
CONGLOMERATE 0.1%
Marubeni Corporation 650,000 2,728,207
CONSUMER - MISCELLANEOUS 0.2%
Canon, Inc. 106,000 4,210,547
DIVERSIFIED OPERATIONS 0.6%
Invensys PLC 2,230,000 12,156,426
Itochu Corporation (b) 720,000 3,585,559
-----------
15,741,985
ELECTRIC POWER 1.1%
NiSource, Inc. 1,501,100 26,832,162
ELECTRICAL EQUIPMENT 2.7%
W.W. Grainger, Inc. 730,000 34,903,125
Parker-Hannifin Corporation 655,000 33,609,688
-----------
68,512,813
ELECTRONIC PARTS DISTRIBUTION 1.6%
Avnet, Inc. 680,000 41,140,000
ELECTRONIC PRODUCTS - MISCELLANEOUS 3.6%
AVX Corporation 802,000 $40,049,875
General Motors Corporation Class H (b) 470,000 45,120,000
Hitachi, Ltd. 360,000 5,776,343
-----------
90,946,218
ELECTRONICS - SEMICONDUCTOR MANUFACTURING 2.5%
Micron Technology, Inc. (b) (g) 460,000 35,765,000
Texas Instruments, Inc. 295,000 28,578,125
-----------
64,343,125
FOOD 1.2%
H.J. Heinz Company 785,000 31,252,812
HEALTHCARE - DRUG/DIVERSIFIED 1.2%
Alza Corporation (b) 830,200 28,745,675
Watson Pharmaceuticals, Inc. (b) 16,100 576,581
-----------
29,322,256
HEALTHCARE - MEDICAL SUPPLY 1.2%
Sybron International Corporation (b) 1,230,000 30,365,625
HEALTHCARE - PATIENT CARE 3.0%
Columbia/HCA Healthcare Corporation 1,010,000 29,605,625
HEALTHSOUTH Corporation (b) 3,395,200 18,249,200
United Healthcare Corporation 540,000 28,687,500
-----------
76,542,325
HOUSEHOLD APPLIANCES & FURNISHINGS 2.5%
Illinois Tool Works, Inc. 580,000 39,186,250
Leggett & Platt, Inc. 1,132,000 24,267,250
-----------
63,453,500
INSURANCE - ACCIDENT & HEALTH 1.2%
CIGNA Corporation 385,000 31,016,562
INSURANCE - PROPERTY & CASUALTY 3.5%
Ace, Ltd. 1,150,000 19,190,625
The Allstate Corporation 1,165,000 27,960,000
American International Group, Inc. 381,250 41,222,656
-----------
88,373,281
INTERNET - INTERNET SERVICE PROVIDER/CONTENT 2.6%
CNET, Inc. (b) 200,000 11,350,000
go.com (b) 1,301,200 30,984,825
Lycos, Inc. (b) 187,400 14,910,012
NBC Internet, Inc. (b) 128,200 9,903,450
-----------
67,148,287
LEISURE SERVICE 2.0%
The Walt Disney Company 1,150,000 33,637,500
Gaylord Entertainment Company 590,800 17,687,075
-----------
51,324,575
MEDIA - CABLE TV 3.0%
Comcast Corporation Class A 745,200 37,446,300
Cox Communications, Inc. Class A (b) 790,000 40,685,000
-----------
78,131,300
MEDIA - PUBLISHING 1.2%
The E.W. Scripps Company Class A 660,200 29,585,212
MEDIA - RADIO/TV 2.1%
AT&T Corporation-Liberty Media Group
Class A (b) 970,000 55,047,500
NATURAL GAS DISTRIBUTION 1.5%
Enron Corporation 845,000 37,496,875
OIL - NORTH AMERICAN EXPLORATION & PRODUCTION 3.1%
Apache Corporation 800,000 29,550,000
Barrett Resources Corporation (b) 770,000 22,666,875
Devon Energy Corporation 870,000 28,601,250
-----------
80,818,125
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
STRONG OPPORTUNITY FUND (continued)
- ------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------
<S> <C> <C>
OIL - NORTH AMERICAN INTEGRATED 1.2%
Unocal Corporation 940,000 $ 31,548,750
OIL WELL EQUIPMENT & SERVICE 4.2%
Baker Hughes, Inc. 1,481,300 31,199,881
Cooper Cameron Corporation (b) 695,000 34,011,562
Weatherford International, Inc. (b) 1,013,600 40,480,650
-----------
105,692,093
PAPER & FOREST PRODUCTS 1.4%
The Mead Corporation 805,000 34,967,188
REAL ESTATE 1.1%
ProLogis Trust 1,450,000 27,912,500
RETAIL - FOOD CHAIN 1.3%
Albertson's, Inc. 1,020,000 32,895,000
RETAIL - MAJOR CHAIN 0.9%
The Daiei, Inc. (b) 575,000 2,278,397
Kmart Corporation (b) 1,635,000 16,452,188
Sears Canada, Inc. 141,900 3,929,387
-----------
22,659,972
RETAIL - SPECIALTY 1.8%
Nordstrom, Inc. 1,422,800 37,259,575
Office Depot, Inc. (b) 732,500 8,011,719
-----------
45,271,294
TELECOMMUNICATION EQUIPMENT 2.4%
Corning, Inc. 465,000 59,955,938
TELECOMMUNICATIONS - CELLULAR 5.9%
Omnipoint Corporation (b) 600,000 72,375,000
United States Cellular Corporation (b) 440,000 44,412,500
Vodafone AirTouch PLC Sponsored ADR 670,500 33,189,750
-----------
149,977,250
TELECOMMUNICATIONS - SERVICES 4.1%
AT&T Corporation 243,100 12,337,325
Global TeleSystems Group, Inc. (b) 835,400 28,925,725
Infonet Services Corporation (b) 120,500 3,163,125
MediaOne Group, Inc. (b) 640,000 49,160,000
Nippon Telegraph & Telephone Corporation 540 9,245,671
-----------
102,831,846
- ------------------------------------------------------------------------------
Total Common Stocks (Cost $1,526,682,505) 2,263,612,367
- ------------------------------------------------------------------------------
CONVERTIBLE BONDS 0.0%
Capital Properties New Zealand, Ltd.
Capital Notes, 8.50%, Due 4/15/05 866,303 NZD 412,457
- ------------------------------------------------------------------------------
Total Convertible Bonds (Cost $770,394) 412,457
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 10.9%
COMMERCIAL PAPER 0.1%
INTEREST BEARING, DUE UPON DEMAND
Pitney Bowes Credit Corporation, 6.10% $463,000 463,000
Warner Lambert Company, 6.08% 460,000 460,000
Wisconsin Electric Power Company, 6.04% 486,500 486,500
-----------
1,409,500
REPURCHASE AGREEMENTS 10.8%
ABN-AMRO Inc. (Dated 12/31/99), 2.75%,
Due 1/03/00 (Repurchase proceeds
$274,062,792); Collateralized by:
U.S. Government & Agency Issues (e) 274,000,000 274,000,000
UNITED STATES GOVERNMENT ISSUES 0.0%
United States Treasury Bills,
Due 2/03/00 995,746 995,694
- ------------------------------------------------------------------------------
Total Short-Term Investments
(Cost $276,405,246) 276,405,194
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Total Investments in Securities
(Cost $1,803,858,145) 100.1% 2,540,430,018
Other Assets and Liabilities, Net (0.1%) (3,278,873)
- ------------------------------------------------------------------------------
NET ASSETS 100.0% 2,537,151,145
==============================================================================
WRITTEN OPTIONS ACTIVITY
- -------------------------------------------------------------------------------
Contracts Premiums
- ------------------------------------------------------------------------------
Options outstanding at beginning of year -- --
Options written during the year 480 550,492
Options closed -- --
Options expired -- --
Options exercised (100) (22,199)
--- --------
Options outstanding at end of year 380 $528,293
=== ========
WRITTEN OPTIONS DETAIL
- ------------------------------------------------------------------------------
Contracts
(100 shares per Value
contract) (Note 2)
- ------------------------------------------------------------------------------
Micron Technology, Inc.
Calls: (Strike price is $75.
Expiration date is
1/21/00. Premium received is $528,293.) 380 ($242,250)
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
STRONG STRATEGIC GROWTH FUND
- ------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS 92.1%
AEROSPACE & DEFENSE 1.6%
United Technologies Corporation 1,200 $ 78,000
BANK - MONEY CENTER 2.6%
Citigroup, Inc. 2,300 127,794
BANK - SUPER REGIONAL 1.5%
The Bank of New York Company, Inc. 1,800 72,000
BEVERAGE - ALCOHOLIC 1.2%
Anheuser-Busch Companies, Inc. 800 56,700
COMMERCIAL SERVICE 3.9%
MedQuist, Inc. (b) 1,400 36,137
Sykes Enterprises, Inc. (b) 3,440 150,930
-----------
187,067
COMPUTER - MAINFRAME 2.2%
Sun Microsystems, Inc. (b) 1,400 108,412
COMPUTER - PERIPHERAL EQUIPMENT 2.4%
Lexmark International Group, Inc. Class A (b) 700 63,350
Zebra Technologies Corporation (b) 900 52,650
-----------
116,000
COMPUTER SERVICE 1.7%
Automatic Data Processing, Inc. 1,500 80,813
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
STRONG STRATEGIC GROWTH FUND (continued)
- ------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------
<S> <C> <C>
COMPUTER SOFTWARE 16.1%
Ardent Software, Inc. (b) 1,800 $ 70,200
BMC Software, Inc. (b) 1,500 119,906
Cisco Systems, Inc. (b) 1,200 128,550
Citrix Systems, Inc. (b) 500 61,500
Microsoft Corporation (b) 1,500 175,125
Oracle Systems Corporation (b) 900 100,856
SERENA Software, Inc. (b) 2,300 71,156
Symantec Corporation (b) 900 52,763
-----------
780,056
ELECTRICAL EQUIPMENT 2.8%
Emerson Electric Company 1,400 80,325
Honeywell International, Inc. 937 54,053
-----------
134,378
ELECTRONICS - SEMICONDUCTOR
Manufacturing 5.4%
Intel Corporation 900 74,081
Telcom Semiconductor, Inc. (b) 4,400 92,400
Texas Instruments, Inc. 1,000 96,875
-----------
263,356
FINANCE - MISCELLANEOUS 1.7%
American Express Company 500 83,125
HEALTHCARE - BIOMEDICAL/GENETIC 1.2%
Biogen, Inc. (b) 700 59,150
HEALTHCARE - DRUG/DIVERSIFIED 6.8%
Johnson & Johnson 800 74,500
Jones Medical Industries, Inc. 1,500 65,156
Merck & Company, Inc. 1,100 73,769
Warner-Lambert Company 1,400 114,712
-----------
328,137
HEALTHCARE - MEDICAL SUPPLY 1.0%
Wesley Jessen VisionCare, Inc. (b) 1,300 49,238
INSURANCE - PROPERTY & CASUALTY 1.9%
American International Group, Inc. 875 94,609
MEDIA - CABLE TV 2.0%
Adelphia Communications Corporation
Class A (b) 1,500 98,438
MEDIA - RADIO/TV 1.8%
Clear Channel Communications, Inc. (b) 1,000 89,250
METALS & MINING 1.5%
Alcoa, Inc. 900 74,700
MORTGAGE & RELATED SERVICE 1.0%
Federal National Mortgage Association 800 49,950
NATURAL GAS DISTRIBUTION 1.5%
Enron Corporation 1,600 71,000
OIL - INTERNATIONAL INTEGRATED 1.7%
Exxon Mobil Corporation 1,000 80,563
OIL - NORTH AMERICAN EXPLORATION &
PRODUCTION 0.6%
Devon Energy Corporation 1,000 32,875
OIL WELL EQUIPMENT & SERVICE 1.7%
Schlumberger, Ltd. 1,300 73,125
Transocean Sedco Forex, Inc. 251 8,456
-----------
81,581
PAPER & FOREST PRODUCTS 1.3%
International Paper Company 1,100 62,081
PERSONAL & COMMERCIAL LENDING 1.1%
The CIT Group, Inc. Class A 2,485 52,496
POLLUTION CONTROL 1.4%
Republic Services, Inc. (b) 4,600 $ 66,125
RETAIL - DRUG STORE 1.2%
CVS Corporation 1,500 59,906
RETAIL - FOOD CHAIN 3.5%
Safeway, Inc. (b) 3,400 120,912
U.S. Foodservice (b) 2,800 46,900
-----------
167,812
RETAIL - MAJOR CHAIN 3.2%
Dayton Hudson Corporation 900 66,094
Wal-Mart Stores, Inc. 1,300 89,862
-----------
155,956
RETAIL - SPECIALTY 3.1%
Global Imaging Systems, Inc. (b) 4,700 57,575
The Home Depot, Inc. 1,350 92,559
-----------
150,134
SOAP & CLEANING PREPARATION 1.5%
Colgate Palmolive Company 1,100 71,500
TELECOMMUNICATION EQUIPMENT 4.2%
Motorola, Inc. 500 73,625
Nortel Networks Corporation 1,300 131,300
-----------
204,925
TELECOMMUNICATIONS - SERVICES 4.9%
Bell Atlantic Corporation 1,100 67,719
MCI WorldCom, Inc. (b) 1,050 55,716
MediaOne Group, Inc. (b) 1,500 115,219
-----------
238,654
TRANSPORTATION SERVICE 0.9%
C.H. Robinson Worldwide, Inc. 1,100 43,725
- ------------------------------------------------------------------------------
Total Common Stocks (Cost $3,438,935) 4,470,506
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 7.3%
COMMERCIAL PAPER
INTEREST BEARING, DUE DUE UPON DEMAND
Pitney Bowes Credit Corporation, 6.10% $211,200 211,200
Warner Lambert Company, 6.08% 139,700 139,700
Wisconsin Electric Power Company, 6.04% 900 900
- ------------------------------------------------------------------------------
Total Short-Term Investments
(Cost $351,800) 351,800
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Total Investments in Securities
(Cost $3,790,735) 99.4% 4,822,306
Other Assets and Liabilities, Net 0.6% 29,636
- ------------------------------------------------------------------------------
NET ASSETS 100.0% $4,851,942
==============================================================================
</TABLE>
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(I) of Notes to Financial Statements.
(f) Affiliated issuer. (See Note 7 of Notes to Financial Statements.)
(g) All or a portion of these securities are held in conjunction with open
written option contracts.
Percentages are stated as a percent of net assets.
CURRENCY ABBREVIATIONS
- --------------------------------------------------------------
NZD New Zealand Dollar
26
See Notes to Financial Statements.
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
December 31, 1999
(In Thousands, Except Per Share Amounts)
Strong Strong
Common Strong Strong Mid Cap
Stock Fund Discovery Fund Growth Fund Disciplined Fund
---------- -------------- ----------- ----------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in Securities, at Value
Unaffiliated Issuers (Cost of $1,283,852, $120,547,
$1,826,260 and $5,616, respectively) $1,732,229 $167,807 $3,374,721 $6,202
Affiliated Issuers (Cost of $7,826, $5,843, $0 and $0,
respectively) 12,516 5,365 -- --
Receivable for Securities Sold 4,606 20,512 24,596 60
Receivable for Fund Shares Sold 73 2 637 --
Dividends and Interest Receivable 1,108 40 258 4
Other Assets 61 19 209 9
---------- -------- ---------- ------
Total Assets 1,750,593 193,745 3,400,421 6,275
LIABILITIES:
Payable for Securities Purchased 17,320 213 46,028 322
Short-Term Borrowings on Line of Credit -- 6,000 -- --
Payable for Fund Shares Redeemed 20 39 433 --
Accrued Operating Expenses and Other Liabilities 172 47 278 8
---------- -------- ---------- ------
Total Liabilities 17,512 6,299 46,739 330
---------- -------- ---------- ------
NET ASSETS $1,733,081 $187,446 $3,353,682 $5,945
========== ======== ========== ======
NET ASSETS CONSIST OF:
Capital Stock (par value and paid-in capital) $1,199,873 $170,640 $1,688,704 $5,000
Accumulated Net Investment Loss -- (182) -- --
Accumulated Net Realized Gain (Loss) 80,305 (29,794) 116,427 359
Net Unrealized Appreciation 452,903 46,782 1,548,551 586
---------- -------- ---------- ------
Net Assets $1,733,081 $187,446 $3,353,682 $5,945
========== ======== ========== ======
Capital Shares Outstanding (Unlimited Number Authorized) 68,748 10,057 94,050 440
NET ASSET VALUE PER SHARE $25.21 $18.64 $35.66 $13.52
========== ======== ========== ======
<PAGE>
<CAPTION>
Strong Strong Strong
Mid Cap Opportunity Strategic
Growth Fund Fund Growth Fund
----------- ---- -----------
<S> <C> <C> <C>
ASSETS:
Investments in Securities, at Value
(Including Repurchase Agreements of
$2,100, $274,000 and $0, respectively)
(Cost of $47,511, $1,803,858 and $3,791, respectively) $71,167 $2,540,430 $4,822
Receivable for Securities Sold 950 9,483 398
Receivable for Fund Shares Sold 97 810 1
Dividends and Interest Receivable 11 1,634 3
Other Assets 25 90 7
------- ---------- -------
Total Assets 72,250 2,552,447 5,231
LIABILITIES:
Payable for Securities Purchased 4,407 14,718 372
Written Options, at Value
(Premiums Received of $2,218, $528 and $0, respectively) 2,376 242 --
Payable for Fund Shares Redeemed -- 96 --
Accrued Operating Expenses and Other Liabilities 37 240 7
------- ---------- -------
Total Liabilities 6,820 15,296 379
------- ---------- -------
NET ASSETS $65,430 $2,537,151 $4,852
======= ========== =======
NET ASSETS CONSIST OF:
Capital Stock (par value and paid-in capital) $40,711 $1,731,416 $3,756
Undistributed Net Investment Income -- 154 --
Undistributed Net Realized Gain 1,221 68,720 64
Net Unrealized Appreciation 23,498 736,861 1,032
------- ---------- -------
Net Assets $65,430 $2,537,151 $4,852
======= ========== =======
Capital Shares Outstanding (Unlimited Number Authorized) 2,814 56,775 350
NET ASSET VALUE PER SHARE $23.25 $44.69 $13.85
======= ========== =======
</TABLE>
27
See Notes to Financial Statements.
<PAGE>
STATEMENTS OF OPERATIONS
- -------------------------------------------------------------------------------
For the Year Ended December 31, 1999
<TABLE>
<CAPTION> (In Thousands)
Strong Strong Strong Strong Mid Cap Strong Strong Strong
Common Discovery Growth Disciplined Mid Cap Opportunity Strategic
Stock Fund Fund Fund Fund Growth Fund Fund Growth Fund
---------- ---- ---- ---- ----------- ---- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME:
Dividends (net of foreign
withholding taxes of $34, $7,
$0, $0, $0, $28 and $0,
respectively) $ 9,026 $ 1,228 $ 3,300 $ 33 $ 54 $ 19,347 $ 21
Interest 7,162 369 7,102 19 107 11,043 13
---------- -------- --------- ------ --------- -------- ------
Total Income 16,188 1,597 10,402 52 161 30,390 34
---------- -------- --------- ------ --------- -------- ------
EXPENSES:
Investment Advisory Fees 14,472 2,300 21,857 48 323 21,886 37
Custodian Fees 109 44 100 14 21 123 3
Shareholder Servicing Costs 2,011 664 4,131 12 85 3,304 15
Professional Fees 53 37 97 10 15 58 12
Reports to Shareholders 312 142 640 11 18 584 3
Federal and State Registration
Fees 32 31 41 35 29 58 17
Other 66 43 168 4 14 91 3
---------- -------- --------- ------ --------- -------- ------
Total Expenses before Waivers,
Absorptions and Fees Paid
Indirectly by Advisor 17,055 3,261 27,034 134 505 26,104 90
Involuntary Expense Waivers
and Absorptions by Advisor -- -- -- (38) -- -- (16)
Fees Paid Indirectly by Advisor
(Note 3) (83) (18) -- -- -- (43) --
---------- -------- --------- ------ --------- -------- ------
Expenses, Net 16,972 3,243 27,034 96 505 26,061 74
---------- -------- --------- ------ --------- -------- ------
NET INVESTMENT INCOME (LOSS) (784) (1,646) (16,632) (44) (344) 4,329 (40)
REALIZED AND UNREALIZED
GAIN (LOSS):
Net Realized Gain (Loss) on:
Investments 290,206 (10,227) 522,871 404 12,277 344,219 428
Futures Contracts and Options (4,670) (8,683) (35,463) (1) (5,776) (2,664) --
Foreign Currencies -- -- -- -- -- 3 --
---------- -------- --------- ------ --------- -------- ------
Net Realized Gain (Loss) 285,536 (18,910) 487,408 403 6,501 341,558 428
Net Change in Unrealized
Appreciation/Depreciation on:
Investments 223,123 17,006 953,255 586 19,519 293,806 633
Futures Contracts and Options 19 (438) 90 -- (158) (262) --
Foreign Currencies (1) -- -- -- -- (1) --
---------- -------- --------- ------ --------- -------- ------
Net Change in Unrealized
Appreciation/Depreciation 223,141 16,568 953,345 586 19,361 293,543 633
---------- -------- --------- ------ --------- -------- ------
NET GAIN (LOSS) ON INVESTMENTS 508,677 (2,342) 1,440,753 989 25,862 635,101 1,061
---------- -------- --------- ------ --------- -------- ------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING
FROM OPERATIONS $507,893 ($ 3,988) $1,424,121 $945 $25,518 $639,430 $1,021
========== ======== ========= ====== ========= ======== ======
</TABLE>
28
See Notes to Financial Statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(In Thousands)
STRONG COMMON STOCK FUND STRONG DISCOVERY FUND
------------------------ ---------------------
Year Ended Year Ended Year Ended Year Ended
Dec. 31, 1999 Dec. 31, 1998 Dec. 31, 1999 Dec. 31, 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net Investment Income (Loss) ($ 784) $ 180 ($ 1,646) ($ 1,317)
Net Realized Gain (Loss) 285,536 128,303 (18,910) 27,775
Net Change in Unrealized Appreciation/Depreciation 223,141 (40,049) 16,568 (3,936)
------------- ------------- ------------- -------------
Net Increase (Decrease) in Net Assets
Resulting from Operations 507,893 88,434 (3,988) 22,522
DISTRIBUTIONS FROM NET REALIZED GAINS (246,480) (86,285) (3,366) (4,244)
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 160,180 254,809 71,369 247,185
Proceeds from Reinvestment of Distributions 238,483 83,552 3,297 4,134
Payment for Shares Redeemed (366,896) (465,436) (201,861) (330,613)
------------- ------------- ------------- -------------
Net Increase (Decrease) in Net Assets from
Capital Share Transactions 31,767 (127,075) (127,195) (79,294)
------------- ------------- ------------- -------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 293,180 (124,926) (134,549) (61,016)
NET ASSETS:
Beginning of Year 1,439,901 1,564,827 321,995 383,011
------------- ------------- ------------- -------------
End of Year $1,733,081 $1,439,901 $187,446 $321,995
============= ============= ============= =============
TRANSACTIONS IN SHARES OF THE FUND:
Sold 6,937 11,860 4,340 14,251
Issued in Reinvestment of Distributions 9,925 4,039 212 235
Redeemed (16,480) (21,988) (12,436) (19,075)
------------- ------------- ------------- -------------
Net Increase (Decrease) in Shares of the Fund 382 (6,089) (7,884) (4,589)
============= ============= ============= =============
</TABLE>
29
See Notes to Financial Statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(In Thousands)
STRONG MID CAP
STRONG GROWTH FUND DISCIPLINED FUND
---------------------------- ----------------
Year Ended Year Ended Year Ended
Dec. 31, 1999 Dec. 31, 1998 Dec. 31, 1999
------------- ------------- -------------
(Note 1)
OPERATIONS:
<S> <C> <C> <C>
Net Investment Loss ($ 16,632) ($ 10,416) ($ 44)
Net Realized Gain 487,408 104,907 403
Net Change in Unrealized Appreciation/Depreciation 953,345 304,272 586
----------- ------------- ---------
Net Increase in Net Assets Resulting from Operations 1,424,121 398,763 945
DISTRIBUTIONS FROM NET REALIZED GAINS (378,323) (37) --
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 596,220 379,839 11,963
Proceeds from Reinvestment of Distributions 369,783 36 --
Payment for Shares Redeemed (492,794) (602,747) (6,963)
Net Proceeds from Acquisition (Note 8) -- 61,697 --
----------- ------------- ---------
Net Increase (Decrease) in Net Assets from
Capital Share Transactions 473,209 (161,175) 5,000
----------- ------------- ---------
TOTAL INCREASE IN NET ASSETS 1,519,007 237,551 5,945
NET ASSETS:
Beginning of Year 1,834,675 1,597,124 --
----------- ------------- ---------
End of Year $3,353,682 $1,834,675 $ 5,945
=========== ============= =========
TRANSACTIONS IN SHARES OF THE FUND:
Sold 22,686 19,329 1,015
Issued in Reinvestment of Distributions 11,311 2 --
Redeemed (18,873) (30,918) (575)
Issued to Effect Acquisition (Note 8) -- 3,292 --
----------- ------------- ---------
Net Increase (Decrease) in Shares of the Fund 15,124 (8,295) 440
=========== ============= =========
</TABLE>
30
See Notes to Financial Statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(In Thousands)
STRONG MID CAP STRONG
GROWTH FUND OPPORTUNITY FUND
---------------------------- ----------------------------
Year Ended Year Ended Year Ended Year Ended
Dec. 31, 1999 Dec. 31, 1998 Dec. 31, 1999 Dec. 31, 1998
------------- ------------- ------------- -------------
OPERATIONS:
<S> <C> <C> <C> <C>
Net Investment Income (Loss) ($ 344) ($ 172) $ 4,329 $ 3,089
Net Realized Gain 6,501 22 341,558 213,971
Net Change in Unrealized Appreciation/Depreciation 19,361 1,987 293,543 61,275
--------- -------- ------------ ------------
Net Increase in Net Assets Resulting from Operations 25,518 1,837 639,430 278,335
DISTRIBUTIONS:
From Net Investment Income -- -- (4,180) (2,486)
From Net Realized Gains (4,464) -- (322,446) (220,319)
--------- -------- ------------ ------------
Total Distributions (4,464) -- (326,626) (222,805)
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 54,321 23,567 448,588 348,997
Proceeds from Reinvestment of Distributions 4,339 -- 317,277 217,297
Payment for Shares Redeemed (33,581) (21,772) (579,445) (508,783)
--------- -------- ------------ ------------
Net Increase in Net Assets from
Capital Share Transactions 25,079 1,795 186,420 57,511
--------- -------- ------------ ------------
TOTAL INCREASE IN NET ASSETS 46,133 3,632 499,224 113,041
NET ASSETS:
Beginning of Year 19,297 15,665 2,037,927 1,924,886
--------- -------- ------------ ------------
End of Year $65,430 $19,297 $2,537,151 $2,037,927
========= ======== ============ ============
TRANSACTIONS IN SHARES OF THE FUND:
Sold 3,157 1,888 10,392 8,778
Issued in Reinvestment of Distributions 190 -- 7,354 5,578
Redeemed (2,015) (1,784) (13,743) (13,034)
--------- -------- ------------ ------------
Net Increase in Shares of the Fund 1,332 104 4,003 1,322
========= ======== ============ ============
</TABLE>
<PAGE>
31
See Notes to Financial Statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STRONG STRATEGIC GROWTH FUND
-----------------------------
Year Ended Year Ended
Dec. 31, 1999 Dec. 31, 1998
------------- -------------
(Note 1)
OPERATIONS:
<S> <C> <C>
Net Investment Loss ($ 40) ($ 9)
Net Realized Gain (Loss) 428 (91)
Net Change in Unrealized Appreciation/Depreciation 633 399
-------- --------
Net Increase in Net Assets Resulting from Operations 1,021 299
DISTRIBUTIONS FROM NET REALIZED GAINS (232) --
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 2,607 5,323
Proceeds from Reinvestment of Distributions 219 --
Payment for Shares Redeemed (2,229) (2,156)
-------- --------
Net Increase in Net Assets from Capital Share Transactions 597 3,167
-------- --------
TOTAL INCREASE IN NET ASSETS 1,386 3,466
NET ASSETS:
Beginning of Year 3,466 --
-------- --------
End of Year $4,852 $3,466
======== ========
TRANSACTIONS IN SHARES OF THE FUND:
Sold 218 528
Issued in Reinvestment of Distributions 16 --
Redeemed (192) (220)
-------- --------
Net Increase in Shares of the Fund 42 308
======== ========
</TABLE>
32
See Notes to Financial Statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
December 31, 1999
1. ORGANIZATION
The accompanying financial statements represent the Strong Growth Funds
(the "Funds"), which include the following funds, each with its own
investment objectives and policies:
- Strong Common Stock Fund, Inc.(1)
- Strong Discovery Fund, Inc.(1)
- Strong Growth Fund (a series of Strong Equity Funds, Inc.(1))
- Strong Mid Cap Disciplined Fund (a series of Strong Equity Funds,
Inc.(1))
- Strong Mid Cap Growth Fund (formally known as Strong Mid Cap Fund) (a
series of Strong Equity Funds, Inc.(1))
- Strong Opportunity Fund, Inc.(1)
- Strong Strategic Growth Fund (a series of Strong Equity Funds, Inc.(1))
(1) A diversified, open-end management investment company registered under
the Investment Company Act of 1940, as amended.
Strong Strategic Growth Fund commenced operations on July 1, 1998. Strong
Mid Cap Disciplined Fund commenced operations on January 4, 1999.
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 -- Securities of the Funds are valued at fair value
through valuations obtained by a commercial pricing service or the mean of
the bid and asked prices when no last sales price is available. 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 fair 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. All of
the restricted securities held by Strong Common Stock Fund are either
section 4(2) commercial paper or are eligible for resale pursuant to Rule
144A under the Securities Act of 1933 and also have been determined to be
liquid by the Advisor based upon guidelines established by the Fund's Board
of Directors. Aggregate acquisition cost and fair value of other restricted
securities held at December 31, 1999 were as follows:
<TABLE>
<CAPTION>
Aggregate Aggregate Percent of
Cost Fair Value Net Assets
--------- ---------- ----------
<S> <C> <C> <C>
Strong Discovery Fund 628,594 157,129 0.1%
</TABLE>
(B) FEDERAL INCOME AND EXCISE TAXES AND DISTRIBUTIONS TO SHAREHOLDERS -- The
Funds intend 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.
Net investment income or net realized gains for financial statement
purposes 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.
Each Fund generally pays dividends from net investment income and
distributes any net capital gains that it realizes annually.
(C) REALIZED GAINS AND LOSSES ON INVESTMENT TRANSACTIONS -- Investment security
transactions are recorded as of the trade date. 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) CERTAIN 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.
Investments in foreign denominated assets or forward currency contracts may
involve greater risks than domestic investments, due to currency,
political, economic, regulatory and market risks.
33
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
- -------------------------------------------------------------------------------
December 31, 1999
(E) 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. Additional securities held by
the Fund may be designated as collateral on open futures contracts.
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.
(F) 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. Changes between the initial
premiums received and the current market value of the option are
recorded as unrealized gains or losses. 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.
Additional securities held by the Funds may be designated as
collateral on written options.
(G) FOREIGN CURRENCY TRANSLATION -- Investment securities and other assets
and liabilities initially expressed in foreign currencies are
converted daily 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.
(H) 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.
(I) 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), in a repurchase transaction be maintained in a segregated
account with a custodian bank in a manner sufficient to enable the
Funds to obtain those securities in the event of a default of the
repurchase agreement. On a daily basis, the Advisor monitors the value
of the collateral, including accrued interest, to ensure it is at
least equal to the amounts owed to the Funds under each repurchase
agreement.
(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 in these financial statements. Actual results could differ
from those estimates.
(K) OTHER -- Dividend income and distributions to shareholders are
recorded on the ex-dividend date. Interest income is recorded on
the accrual basis and includes amortization of premiums and discounts.
3. RELATED PARTY TRANSACTIONS
The Advisor, with whom certain officers and directors of the Funds are
affiliated, provides investment advisory services and shareholder
recordkeeping and related services to the Funds. Investment advisory fees,
which are established by terms of the Advisory Agreements, are based on
annualized rates of 1.00% of the average daily net assets of the Funds.
Based on the terms of the Advisory Agreements, advisory fees and other
expenses will be waived or absorbed by the Advisor if the Fund's operating
expenses exceed 2% of the average daily net assets of the Fund. In
addition, the Fund's Advisor may voluntarily waive or absorb certain
expenses at its discretion. Shareholder recordkeeping and related service
fees are based on contractually established rates for each open and closed
shareholder account. The Advisor also allocates to each Fund certain
charges or credits resulting from transfer agency banking activities based
on each Fund's level of subscription and redemption activity. Charges
allocated to the Funds by the Advisor are included in Other Expenses in the
Fund's Statement of Operations. Credits allocated by the Advisor serve to
reduce the shareholder servicing expenses incurred by the Funds and are
reported as Fees Paid Indirectly by the Advisor in the Funds' Statement of
Operations. The Advisor is also compensated for certain other services
related to costs incurred for reports to shareholders.
The Funds may invest cash 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 are reduced
by an amount equal to advisory fees paid to the Advisor under its
investment advisory agreement with the money market funds.
34
<PAGE>
- -------------------------------------------------------------------------------
Certain information regarding related party transactions, excluding the
effects of waivers and absorptions, if any, for the year ended December 31,
1999, is as follows:
<TABLE>
<CAPTION>
Payable to Shareholder Servicing Transfer Agency Unaffiliated
Advisor at and Other Expenses Banking Directors'
December 31, 1999 Paid to Advisor Charges/(Credits) Fees
----------------- --------------------- ----------------- ------------
<S> <C> <C> <C> <C>
Strong Common Stock Fund $ 90,999 $2,020,488 ($82,696) $13,265
Strong Discovery Fund 12,521 667,515 (17,501) 4,133
Strong Growth Fund 143,476 4,153,696 86,873 16,553
Strong Mid Cap Disciplined Fund 234 12,362 1,084 1,500
Strong Mid Cap Growth Fund 23,481 85,160 457 1,500
Strong Opportunity Fund 127,934 3,320,766 (43,028) 18,243
Strong Strategic Growth Fund 439 15,135 488 1,500
</TABLE>
4. LINE OF CREDIT
The Strong Funds have established a line of credit agreement ("LOC") with
certain financial institutions to be used for temporary or emergency
purposes, primarily for financing redemption payments. Combined borrowings
among all participating Strong Funds are subject to a $350 million cap on
the total LOC. For an individual Fund, borrowings under the LOC are limited
to either the lesser of 15% of the market value of the Funds total assets
or any explicit borrowing limits in the Funds' prospectus. Principal and
interest of each borrowing on the LOC are due not more than 60 days after
the date of the borrowing. Borrowings under the LOC bear interest based on
prevailing market rates as defined in the LOC (6.0625% for borrowings
outstanding as of December 31, 1999). A commitment fee of .08% per annum is
incurred on the unused portion of the LOC and is allocated to all
participating Strong Funds. During the year ended December 31, 1999, Strong
Discovery Fund had an outstanding average daily balance of $44,658 under
the LOC. The maximum amount outstanding during that period was $6,000,000.
Interest expense amounted to $2,761 for the year ended December 31, 1999.
At December 31, 1999, the Fund had a loan payable balance of $6,000,000.
5. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of long-term securities, other than
government securities, during the year ended December 31, 1999, were as
follows:
<TABLE>
<CAPTION>
Purchases Sales
--------- -----
<S> <C> <C>
Strong Common Stock Fund $1,078,067,381 $1,284,622,041
Strong Discovery Fund 485,801,119 607,394,152
Strong Growth Fund 6,719,541,285 6,713,858,994
Strong Mid Cap Disciplined Fund 16,115,248 11,311,783
Strong Mid Cap Growth Fund 233,421,220 217,166,620
Strong Opportunity Fund 1,579,202,675 1,660,018,454
Strong Strategic Growth Fund 6,365,486 6,222,482
</TABLE>
There were no purchases or sales of long-term government securities for the
year ended December 31, 1999.
6. INCOME TAX INFORMATION
At December 31, 1999, the investment cost, gross unrealized appreciation
and depreciation on investments and capital loss carryovers (expiring in
varying amounts through 2007) for federal income tax purposes were as
follows:
<TABLE>
<CAPTION>
Federal Tax Unrealized Unrealized Net Capital Loss
Cost Appreciation Depreciation Net Appreciation Carryovers
----------- ------------ ------------ ---------------- ----------------
<S> <C> <C> <C> <C> <C>
Strong Common Stock Fund $1,295,812,061 $ 544,972,747 $ 96,039,848 $ 448,932,899 $ --
Strong Discovery Fund 129,426,610 53,330,448 9,584,718 43,745,730 32,893,623
Strong Growth Fund 1,855,809,955 1,528,211,384 9,300,070 1,518,911,314 11,425,098
Strong Mid Cap Disciplined Fund 5,638,007 917,582 353,373 564,209 --
Strong Mid Cap Growth Fund 47,838,449 23,612,775 284,306 23,328,469 --
Strong Opportunity Fund 1,815,471,670 839,166,190 114,207,842 724,958,348 --
Strong Strategic Growth Fund 3,790,735 1,082,064 50,493 1,031,571 --
</TABLE>
During the year ended December 31, 1999, the Funds paid capital gains
distributions (taxable as long-term capital gains at 20%) to shareholders
as follows (unaudited): Strong Common Stock Fund $133,491,445, Strong
Discovery Fund $1,088,932, Strong Growth Fund $250,997,981, Strong Mid Cap
Disciplined Fund $0, Strong Mid Cap Growth Fund $1,910,326, Strong
Opportunity Fund $217,874,366, and Strong Strategic Growth Fund $28,043.
The Strong Growth Fund, Strong Mid Cap Growth Fund and Strong Strategic
Growth Fund utilized $3,749,880, $517,673 and $68,378 of their capital loss
carryovers respectively during the year ended December 31, 1999. The Strong
Strategic Growth Fund had post-October losses of $7,632 during 1999.
35
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
- -------------------------------------------------------------------------------
December 31, 1999
For corporate shareholders in the Funds, the percentages of dividend income
distributed for the year ended December 31, 1999 which is designated as
qualifying for the dividends-received deduction are as follows (unaudited):
Strong Common Stock Fund 0.0%, Strong Discovery Fund 0.0%, Strong Growth
Fund 0.0%, Strong Mid Cap Disciplined Fund 0.0%, Strong Mid Cap Growth Fund
0.0%, Strong Opportunity Fund 100.0%, and Strong Strategic Growth Fund
0.0%.
7. 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 year ended December 31, 1999 is as follows:
<TABLE>
<CAPTION>
Dividend/
Balance of Gross Balance of Interest
Shares or Par Purchases Gross Sales Shares or Par Value Income Realized
Value Held and and Value Held Dec. 31, Jan. 1 - Gain/(Loss)
Jan. 1, 1999 Additions Reductions Dec. 31, 1999 1999 Dec. 31, 1999 on Sale
------------ --------- ---------- ------------- ------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Strong Common Stock Fund
------------------------
IHOP Corporation 470,000 375,000 (95,000) 750,000 $12,515,625 -- $1,501,267
Strong Discovery Fund
---------------------
Central Garden & Pet Company 1,071,625 319,025 (888,725) 501,925 5,207,472 -- (7,395,208)
Halsey Drug Company, Inc. Common Stock 398,055 13,845 (411,900) -- -- -- (1,238,070)
Halsey Drug Company, Inc.
Restricted Common Stock 13,845 18,460 (13,845) 18,460 13,845 -- --
Halsey Drug Company, Inc.
Convertible Bonds $600,000 -- -- $600,000 138,462 -- --
Halsey Drug Company, Inc. Warrants 21,429 -- -- 21,429 4,822 -- --
</TABLE>
8. ACQUISITION INFORMATION
Effective October 30, 1998, the Strong Growth Fund acquired, through a
non-taxable exchange, substantially all the net assets of Strong Small Cap
Fund. Strong Growth Fund issued 3,292,272 shares (valued at $61,697,184)
for the 6,353,984 shares of Strong Small Cap Fund outstanding at October
30, 1998. The net assets of $61,697,184 of Strong Small Cap Fund included
net unrealized depreciation on investments of $6,038,997, undistributed net
investment losses of $1,076,450, accumulated realized net losses of
$12,771,247 and capital loss carryovers of $15,711,933 which were combined
with those of Strong Growth Fund. The Strong Growth Fund utilized $536,954
of these capital loss carryforwards in 1998. The Strong Growth Fund
Statement of Changes in Net Assets for the year ended December 31, 1998
does not include the preacquisition activity of Strong Small Cap Fund.
36
<PAGE>
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
STRONG COMMON STOCK FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
-------------------------------------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
Selected Per-Share Data(a) 1999 1998 1997 1996 1995
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $21.06 $21.02 $20.24 $19.77 $16.74
Income From Investment Operations:
Net Investment Income (Loss) (0.01) 0.00(b) 0.01 0.06 0.11
Net Realized and Unrealized Gains on Investments 8.19 1.36 4.67 3.87 5.25
- -------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 8.18 1.36 4.68 3.93 5.36
Less Distributions:
From Net Investment Income -- -- (0.01) (0.06) (0.10)
In Excess of Net Investment Income -- -- (0.03) (0.05) (0.02)
From Net Realized Gains (4.03) (1.32) (3.86) (3.35) (2.21)
- -------------------------------------------------------------------------------------------------------------------
Total Distributions (4.03) (1.32) (3.90) (3.46) (2.33)
- -------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $25.21 $21.06 $21.02 $20.24 $19.77
===================================================================================================================
Ratios and Supplemental Data
- -------------------------------------------------------------------------------------------------------------------
Total Return +40.4% +6.6% +24.0% +20.5% +32.4%
Net Assets, End of Period (In Millions) $1,733 $1,440 $1,565 $1,244 $1,061
Ratio of Expenses to Average Net Assets 1.2% 1.2% 1.2% 1.2% 1.2%
Ratio of Net Investment Income (Loss) to Average Net Assets (0.1%) 0.0%(b) 0.0%(b) 0.3% 0.5%
Portfolio Turnover Rate 80.1% 102.6% 117.3% 90.9% 91.5%
</TABLE>
STRONG DISCOVERY FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
- -------------------------------------------------------------------------------------------------------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
Selected Per-Share Data(a) 1999 1998 1997 1996 1995
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $17.95 $17.00 $17.45 $18.96 $15.67
Income From Investment Operations:
Net Investment Loss (0.17) (0.07) (0.16) (0.15) (0.05)
Net Realized and Unrealized Gains on Investments 1.08 1.26 2.00 0.35 5.48
- -------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.91 1.19 1.84 0.20 5.43
Less Distributions:
In Excess of Net Investment Income -- -- -- (1.12) (0.10)
From Net Realized Gains (0.22) (0.24) (1.90) (0.59) (2.04)
In Excess of Net Realized Gains -- -- (0.39) -- --
- -------------------------------------------------------------------------------------------------------------------
Total Distributions (0.22) (0.24) (2.29) (1.71) (2.14)
- -------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $18.64 $17.95 $17.00 $17.45 $18.96
===================================================================================================================
Ratios and Supplemental Data
- -------------------------------------------------------------------------------------------------------------------
Total Return +5.3% +7.0% +10.9% +1.5% +34.8%
Net Assets, End of Period (In Millions) $187 $322 $383 $514 $599
Ratio of Expenses to Average Net Assets 1.4% 1.3% 1.4% 1.4% 1.4%
Ratio of Net Investment Loss to Average Net Assets (0.7%) (0.4%) (0.9%) (0.3%) (0.4%)
Portfolio Turnover Rate 214.0% 185.9% 169.9% 792.8% 516.0%
</TABLE>
(a) Information presented relates to a share of capital stock of the Fund
outstanding for the entire period.
(b) Amount calculated is less than $0.01 or 0.1%.
See Notes to Financial Statements.
37
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
- -------------------------------------------------------------------------------
STRONG GROWTH FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
------------------------------------------------
Dec.31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
Selected Per-Share Data(a) 1999 1998 1997 1996 1995
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $23.25 $18.31 $18.50 $15.88 $11.61
Income From Investment Operations:
Net Investment Loss (0.18) (0.13) (0.08) (0.03) (0.04)
Net Realized and Unrealized Gains on Investments 17.08 5.07 3.41 3.13 4.79
- -------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 16.90 4.94 3.33 3.10 4.75
Less Distributions:
In Excess of Net Investment Income -- -- -- (0.02) (0.03)
From Net Realized Gains (4.49) (0.00)(b) (2.70) (0.46) (0.16)
In Excess of Net Realized Gains -- -- (0.82) -- (0.29)
- -------------------------------------------------------------------------------------------------------------------
Total Distributions (4.49) (0.00)(b) (3.52) (0.48) (0.48)
- -------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $35.66 $23.25 $18.31 $18.50 $15.88
===================================================================================================================
Ratios and Supplemental Data
- -------------------------------------------------------------------------------------------------------------------
Total Return +75.1% +27.0% +19.1% +19.5% +41.0%
Net Assets, End of Period (In Millions) $3,354 $1,835 $1,597 $1,308 $643
Ratio of Expenses to Average Net Assets 1.2% 1.3% 1.3% 1.3% 1.4%
Ratio of Net Investment Loss to Average Net Assets (0.8%) (0.7%) (0.5%) (0.2%) (0.5%)
Portfolio Turnover Rate 324.0% 248.6% 295.7% 294.9% 321.2%
</TABLE>
STRONG MID CAP DISCIPLINED FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
----------------
Dec. 31,
Selected Per-Share Data(a) 1999
- ------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period $10.00
Income From Investment Operations:
Net Investment Loss (0.10)
Net Realized and Unrealized Gains on Investments 3.62
- -------------------------------------------------------------------------------
Total from Investment Operations 3.52
Less Distributions:
From Net Investment Income --
- -------------------------------------------------------------------------------
Total Distributions --
- -------------------------------------------------------------------------------
Net Asset Value, End of Period $13.52
===============================================================================
Ratios and Supplemental Data
- -------------------------------------------------------------------------------
Total Return +35.2%
Net Assets, End of Period (In Millions) $6
Ratio of Expenses to Average Net Assets 2.0%
Ratio of Net Investment Loss to Average Net Assets (0.9%)
Portfolio Turnover Rate 245.7%
</TABLE>
(a) Information presented relates to a share of capital stock of the Fund
outstanding for the entire period.
(b) Amount calculated is less than $0.01.
See Notes to Financial Statements.
38
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
- -------------------------------------------------------------------------------
STRONG MID CAP GROWTH FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
- -----------------------------------------------------------------------------------------------
Dec. 31, Dec. 31, Dec. 31,
Selected Per-Share Data(a) 1999 1998 1997
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $13.03 $11.38 $10.00
Income From Investment Operations:
Net Investment Loss (0.12) (0.12) (0.09)
Net Realized and Unrealized Gains on Investments 12.08 1.77 1.47
- -----------------------------------------------------------------------------------------------
Total from Investment Operations 11.96 1.65 1.38
Less Distributions:
From Net Realized Gains (1.74) -- --
- -----------------------------------------------------------------------------------------------
Total Distributions (1.74) -- --
- -----------------------------------------------------------------------------------------------
Net Asset Value, End of Period $23.25 $13.03 $11.38
===============================================================================================
Ratios and Supplemental Data
- -----------------------------------------------------------------------------------------------
Total Return +92.0% +14.5% +13.9%
Net Assets, End of Period (In Millions) $65 $19 $16
Ratio of Expenses to Average Net Assets 1.6% 1.7% 1.6%
Ratio of Net Investment Loss to Average Net Assets (1.1%) (0.9%) (0.9%)
Portfolio Turnover Rate 681.0% 206.9% 305.2%
</TABLE>
STRONG OPPORTUNITY FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
---------------------------------------------------
Dec. 31, Dec. 31, Dec.31, Dec. 31, Dec. 31,
Selected Per-Share Data(a) 1999 1998 1997 1996 1995
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $38.62 $37.41 $35.26 $33.35 $27.71
Income From Investment Operations:
Net Investment Income 0.08 0.05 0.10 0.20 0.20
Net Realized and Unrealized Gains on Investments 12.42 5.68 7.90 5.78 7.28
- -------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 12.50 5.73 8.00 5.98 7.48
Less Distributions:
From Net Investment Income (0.08) (0.05) (0.10) (0.20) (0.20)
In Excess of Net Investment Income -- -- -- (0.05) (0.01)
From Net Realized Gains (6.35) (4.47) (5.75) (3.82) (1.63)
- -------------------------------------------------------------------------------------------------------------------
Total Distributions (6.43) (4.52) (5.85) (4.07) (1.84)
- -------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $44.69 $38.62 $37.41 $35.26 $33.35
===================================================================================================================
Ratios and Supplemental Data
- -------------------------------------------------------------------------------------------------------------------
Total Return +33.4% +15.5% +23.5% +18.1% +27.3%
Net Assets, End of Period (In Millions) $2,537 $2,038 $1,925 $1,770 $1,328
Ratio of Expenses to Average Net Assets 1.2% 1.2% 1.2% 1.3% 1.3%
Ratio of Net Investment Income to Average Net Assets 0.2% 0.2% 0.3% 0.6% 0.7%
Portfolio Turnover Rate 80.8% 86.0% 93.7% 103.3% 92.5%
</TABLE>
(a) Information presented relates to a share of capital stock of the Fund
outstanding for the entire period.
See Notes to Financial Statements.
39
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
- -------------------------------------------------------------------------------
STRONG STRATEGIC GROWTH FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
- --------------------------------------------------------------------------------------
Dec. 31, Dec. 31,
Selected Per-Share Data(a) 1999 1998(b)
- --------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period $11.25 $10.00
Income From Investment Operations:
Net Investment Loss (0.11) (0.03)
Net Realized and Unrealized Gains on Investments 3.41 1.28
- --------------------------------------------------------------------------------------
Total from Investment Operations 3.30 1.25
Less Distributions:
From Net Realized Gains (0.70) --
- --------------------------------------------------------------------------------------
Total Distributions (0.70) --
- --------------------------------------------------------------------------------------
Net Asset Value, End of Period $13.85 $11.25
======================================================================================
Ratios and Supplemental Data
- --------------------------------------------------------------------------------------
Total Return +29.4% +12.5%
Net Assets, End of Period (In Millions) $5 $3
Ratio of Expenses to Average Net Assets 2.0% 2.0%*
Ratio of Net Investment Loss to Average Net Assets (1.1%) (0.5%)*
Portfolio Turnover Rate 178.4% 59.7%
</TABLE>
* 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 period from June 30, 1998 (inception) to December 31, 1998.
See Notes to Financial Statements.
REPORT OF INDEPENDENT ACCOUNTANTS
- -------------------------------------------------------------------------------
To the Shareholders and Board of Directors of
Strong Growth Funds
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments in securities, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of Strong Growth Fund,
Strong Mid Cap Disciplined Fund, Strong Mid Cap Growth Fund, Strong Strategic
Growth Fund (four of the portfolios constituting Strong Equity Funds, Inc.),
Strong Common Stock Fund, Inc., Strong Discovery Fund, Inc., and Strong
Opportunity Fund, Inc. (herein referred to as the "Strong Growth Funds") at
December 31, 1999, the results of each of their operations, the changes in each
of their net assets and the financial highlights for the periods indicated, in
conformity with accounting principles generally accepted in the United States.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Strong Growth Funds'
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted in the
United States which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 1999 by
correspondence with the custodians and brokers and the application of
alternative auditing procedures where broker confirmations were not received,
provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Milwaukee, Wisconsin
February 7, 2000
40
<PAGE>
DIRECTORS
Richard S. Strong
Marvin E. Nevins
William F. Vogt
Willie D. Davis
Stanley Kritzik
Neal Malicky
OFFICERS
Richard S. Strong, CHAIRMAN OF THE BOARD
Thomas M. Zoeller, VICE PRESIDENT
Dennis A. Wallestad, VICE PRESIDENT
Stephen J. Shenkenberg, VICE PRESIDENT AND SECRETARY
John S. Weitzer, VICE PRESIDENT
John W. Widmer, TREASURER
Rhonda K. Haight, ASSISTANT TREASURER
INVESTMENT ADVISOR
Strong Capital Management, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
DISTRIBUTOR
Strong Investments, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
CUSTODIAN
Firstar Bank Milwaukee, N.A.
P.O. Box 701, Milwaukee, Wisconsin 53201
TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT
Strong Capital Management, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
100 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. To
reduce the volume of mail you receive, only one copy of financial reports,
prospectuses, and other regulatory materials is mailed to your household. You
can call us at 1-800-368-1030, or write to us at the address listed below, to
request (1) additional copies free of charge, or (2) that we discontinue our
practice of householding regulatory materials.
Strong Investments, Inc. RT0945-0200
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
Visit our web site at
www.eStrong.com
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STRONG FUNDS(Registered Trademark)
P.O. Box 2936
Milwaukee, Wisconsin 53201
