<PAGE>
[PHOTO OF WOMAN WITH 3 KIDS] [LOGO]
SEMI-ANNUAL REPORT
THE STRONG
SCHAFER VALUE
FUND
SEMI-ANNUAL REPORT - MARCH 31, 2000
<PAGE>
THE STRONG
SCHAFER VALUE
FUND
----------
SEMI-ANNUAL REPORT - MARCH 31, 2000
Table of Contents
<TABLE>
<S> <C>
INVESTMENT REVIEW
The Strong Schafer Value Fund....................................... 2
FINANCIAL INFORMATION
Schedule of Investments in Securities............................... 5
Statement of Assets and Liabilities................................. 7
Statement of Operations ............................................ 8
Statements of Changes in Net Assets ................................ 9
Notes to Financial Statements....................................... 10
</TABLE>
FINANCIAL HIGHLIGHTS .................................................... 12
<PAGE>
THE STRONG SCHAFER VALUE FUND
-----------------------------
PERSPECTIVES FROM THE MANAGER
/s/ David K. Schafer
Portfolio Manager
-------------------------------------------------------------------------------
Over the past six months, we made a few significant changes to the Fund's
portfolio. We increased our weighting in pharmaceutical stocks to nearly 20% of
assets. To make room for these new investments, we lightened up the financial
area. We also sold our two defense stocks, Lockheed Martin and Raytheon, as both
continued to post subpar quarterly earnings.
The Fund rose 12.16% in the last month in this period as the stock market
broadened briefly, but this is still far from the standard we set for ourselves.
We are beginning to see some signs that the massive liquidation of value-style
stocks by individuals and institutions that has afflicted the market over the
past few years may be coming to an end.
This observation comes from examining the portfolios of value funds. Two trends
come to light: First, the definition of "value" has been thoroughly liberalized
over the past few years, leading investors to liquidate traditional value stocks
in favor of higher-returning "new value" stocks. Second, value-style mutual
funds have seen their asset bases fall to a small fraction of their former size.
Poor investment results have played a role in this decline, but the largest
factor by far has been shareholder redemptions of their value fund investments.
The Strong Schafer Value Fund has not participated in the first trend--for
better or worse, we have stuck to our traditional
-------------------------------------------------------------------------------
IN TIME, WE BELIEVE VALUE STOCKS WILL PULL OUT OF THIS DIFFICULT PART OF THE
CYCLE AND THEN MAY PERFORM RELATIVELY WELL OVER THE YEARS TO COME.
-------------------------------------------------------------------------------
(Sidebar)
-------------------------------------------------------------------------------
FUND HIGHLIGHTS
- For the six months ended March 31, 2000, the Strong Schafer Value Fund
returned 8.17%, while the S&P 500 Stock Index (S&P 500) returned 17.51%.*
- A narrow market driven by technology stocks prevailed for most of this
period, which led this fund to trail the S&P 500.
- We increased our weighting in high quality pharmaceutical companies as
their stock prices declined to attractive buying levels. The group
benefited our investment performance, especially in March.
-------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS(1)
AS OF 3-31-00
<TABLE>
<S> <C>
1-year -3.63%
3-year 0.26%
5-year 9.08%
10-year 11.94%
Since Inception 12.12%
(10-22-85)
</TABLE>
-------------------------------------------------------------------------------
FIVE LARGEST STOCK HOLDINGS
AS OF 3-31-00
<TABLE>
<CAPTION>
SECURITY % OF NET ASSETS
<S> <C>
Omnicare, Inc. 4.9%
Chubb Corporation 4.2%
PartnerRE, Ltd. 4.2%
Family Dollar Stores, Inc. 4.1%
Office Depot, Inc. 4.0%
</TABLE>
Please see the Schedule of Investments in Securities for a complete listing of
the Fund's portfolio
-------------------------------------------------------------------------------
(1) Average annual total return and total return measure change in the value of
an investment in the Fund, assuming reinvestment of all dividends and
capital gains. Average annual total return reflects annualized change while
total return reflects aggregate change, and is not annualized.
-------------------------------------------------------------------------------
2
<PAGE>
definition of value--but we have certainly been part of the second, as our asset
base is now about 80% off its peak level.
Considering that this fund is only one of the many value funds that has
experienced major redemptions, it's not hard to see why there has been a
significant decline in the prices of most value stocks. In the final analysis,
the supply of value stocks has greatly outweighed the demand for them during the
past three years.
It is in the aftermath of such an extended, difficult period that we form the
basis of our cautious optimism. It would appear that the only investors who
still hold value stocks are those who, like us, are dedicated to the style and
to the opportunities it presents. This should, at least somewhat, relieve the
downward selling pressure on value stocks, helping valuations to regain their
footing. In time, we believe value stocks will pull out of this difficult part
of the cycle and then may perform relatively well over the years to come.
We thank you for your continued patience and investments in the Strong Schafer
Value Fund.
GROWTH OF AN ASSUMED $10,000 INVESTMENT
From 3-31-90 to 3-31-00
[GRAPH]
GROWTH OF $10,000
10 YEAR PERIOD BEGINNING 3/90
LIPPER
SCHAFER VALUE S&P MULTI-CAP
FUND 500* VAL*
Mar 90 $10,000 $10,000 $10,000
Mar 91 $11,363.74 $11,441.23 $10,882.06
Mar 92 $13,507.46 $12,704.46 $12,287.57
Mar 93 $16,647.23 $14,639.01 $14,352.17
Mar 94 $18,748.17 $14,854.73 $15,068.90
Mar 95 $19,996.61 $17,167.42 $16,759.35
Mar 96 $25,676.40 $22,678.25 $21,502.56
Mar 97 $30,639.66 $27,174.17 $25,004.22
Mar 98 $43,203.14 $40,217.39 $34,772.37
Mar 99 $32,043.64 $47,641.35 $33,483.58
Mar 00 $30,882.02 $56,190.17 $35,299.53
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund with the performance of the Standard & Poor's 500 Stock
Index ("S&P 500") and the Lipper Multi-Cap Value Funds Index during the last 10
fiscal years. We are replacing the Lipper Growth & Income Funds Index with the
Lipper Multi-Cap Value Funds Index as we believe the Lipper Multi-Cap Value
Funds Index more accurately reflects the Fund's investment program. Results
include the reinvestment of all dividends and capital gains distributions.
Performance is historical and does not represent future results. Investment
returns and principal value vary, and you may have a gain or loss when you sell
shares.
-------------------------------------------------------------------------------
* The S&P 500 Stock Index is an unmanaged index generally representative of the
U.S. stock market. 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.
(Sidebar)
-------------------------------------------------------------------------------
YOUR FUND'S APPROACH
THE STRONG SCHAFER VALUE FUND SEEKS LONG-TERM CAPITAL GROWTH. CURRENT INCOME IS
A SECONDARY OBJECTIVE. THE FUND INVESTS PRIMARILY IN COMMON STOCKS OF MEDIUM-
AND LARGE-CAPITALIZATION COMPANIES. THE PORTFOLIO MANAGER GENERALLY SELECTS
STOCKS OF COMPANIES THAT HAVE A BELOW-AVERAGE PRICE/EARNINGS RATIO AS COMPARED
TO THAT OF THE S&P 500 STOCK INDEX AND ABOVE-AVERAGE PROJECTED EARNINGS GROWTH.
THE FUND GENERALLY INVESTS SUBSTANTIALLY ALL OF ITS ASSETS IN STOCKS. THE FUND
INVESTS ROUGHLY SIMILAR AMOUNTS OF ITS ASSETS IN EACH STOCK IN THE PORTFOLIO.
-------------------------------------------------------------------------------
MARKET HIGHLIGHTS
- The U.S. economy continued to show steady growth with few signs of
inflation. On the international side, foreign economies, most notably those
in Asia, began to recover significantly. A global economic climate such as
this generally bodes well for stock markets around the world.
- In contrast to these positive conditions, the two-tiered market in the U.S.
has continued to attract the Federal Reserve's attention. Should the Fed
seek to curb the excesses in the superheated Nasdaq stocks further, the
result could be still-higher interest rates and/or an increase in margin
requirements for investors. Neither condition would be positive for stocks
in the near term.
-------------------------------------------------------------------------------
3
<PAGE>
-------------------------------------------------------------------------------
PORTFOLIO HOLDINGS, EARNINGS PER SHARE ESTIMATES, AND PRICE/EARNINGS
RATIOS AS OF 3-31-00 (UNAUDITED)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EARNINGS PER SHARE PRICE/EARNINGS RATIO
SECURITY UNIT PRICE 2000E 2001E 2000E 2001E
<S> <C> <C> <C> <C> <C>
Alltel Corporation $ 63.25 2.72 3.31 23.28 19.13
----------------------------------------------------------------------------------------------------------------------------------
Alza Corporation 37.56 1.57 1.92 23.97 19.56
----------------------------------------------------------------------------------------------------------------------------------
American Home Products Corporation 53.75 1.91 2.19 28.21 24.53
----------------------------------------------------------------------------------------------------------------------------------
Arrow Electronics, Inc. 35.25 2.80 3.38 12.60 10.42
----------------------------------------------------------------------------------------------------------------------------------
Avnet, Inc. 63.00 3.95 4.17 15.95 15.11
----------------------------------------------------------------------------------------------------------------------------------
Borg-Warner Automotive, Inc. 39.37 5.75 6.36 6.84 6.19
----------------------------------------------------------------------------------------------------------------------------------
Cadence Design Systems, Inc. 20.62 0.84 1.15 24.55 17.93
----------------------------------------------------------------------------------------------------------------------------------
Canadian National Railway Company 26.69 2.94 3.33 9.08 8.02
----------------------------------------------------------------------------------------------------------------------------------
The Chase Manhattan Corporation 87.19 6.24 6.90 13.98 12.63
----------------------------------------------------------------------------------------------------------------------------------
Chubb Corporation 67.56 4.02 4.66 16.79 14.51
----------------------------------------------------------------------------------------------------------------------------------
Dana Corporation 28.19 4.27 4.50 6.60 6.27
----------------------------------------------------------------------------------------------------------------------------------
ECI Telecom, Ltd. 31.37 1.80 2.16 17.43 14.52
----------------------------------------------------------------------------------------------------------------------------------
Family Dollar Stores, Inc. 20.81 1.02 1.23 20.44 16.97
----------------------------------------------------------------------------------------------------------------------------------
FedEx Corporation 38.81 2.27 2.59 17.12 14.97
----------------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Association 56.56 4.26 4.85 13.27 11.67
----------------------------------------------------------------------------------------------------------------------------------
Franklin Resources, Inc. 33.44 2.29 2.54 14.61 13.15
----------------------------------------------------------------------------------------------------------------------------------
General Motors Corporation 82.81 9.75 11.02 8.49 7.51
----------------------------------------------------------------------------------------------------------------------------------
ICN Pharmaceuticals, Inc. 27.25 1.81 2.20 15.06 12.39
----------------------------------------------------------------------------------------------------------------------------------
Lafarge Corporation 23.75 4.14 4.39 5.74 5.41
----------------------------------------------------------------------------------------------------------------------------------
May Department Stores Company 28.50 2.31 2.86 12.35 9.95
----------------------------------------------------------------------------------------------------------------------------------
Maytag Corporation 33.12 3.81 4.28 8.70 7.75
----------------------------------------------------------------------------------------------------------------------------------
Mellon Financial Corporation 29.75 2.03 2.28 14.63 13.07
----------------------------------------------------------------------------------------------------------------------------------
Mylan Laboratories, Inc. 27.50 1.48 1.77 18.52 15.55
----------------------------------------------------------------------------------------------------------------------------------
Office Depot, Inc. 11.56 1.00 1.25 11.56 9.25
----------------------------------------------------------------------------------------------------------------------------------
Omnicare, Inc. 12.06 1.00 1.25 12.06 9.65
----------------------------------------------------------------------------------------------------------------------------------
PartnerRe, Ltd. 36.81 4.58 5.01 8.04 7.35
----------------------------------------------------------------------------------------------------------------------------------
Schering-Plough Corporation 37.12 1.64 1.91 22.58 19.45
----------------------------------------------------------------------------------------------------------------------------------
UCAR International, Inc. 13.19 1.65 2.60 7.99 5.07
----------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Company 40.75 2.56 2.93 15.94 13.90
----------------------------------------------------------------------------------------------------------------------------------
STRONG SCHAFER VALUE FUND PORTFOLIO AVERAGES 14.70 12.48
S&P 500 STOCK INDEX 500 STOCKS 1,498.58 49.40 55.98 30.34 26.77
</TABLE>
E = ESTIMATE
4
<PAGE>
SCHEDULE OF INVESTMENTS IN SECURITIES MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
STRONG SCHAFER VALUE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or Unit
Principal Average Market Market
Security Amount Unit Cost Value % Change Value
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
COMMON STOCKS 98.6%
AIR TRANSPORT 2.9%
FedEx Corporation (b) 335,000 $16.50 $39.00 136.40% $13,065,000
AUTO PARTS 7.5%
Borg-Warner Automotive, Inc. 445,600 34.27 39.38 14.90% 17,545,500
Dana Corporation 577,000 39.35 28.19 -28.36% 16,264,188
----------
33,809,688
AUTOMOBILE 3.0%
General Motors Corporation 163,000 61.20 82.81 35.31% 13,498,437
BANKS 9.0%
The Chase Manhattan Corporation 155,000 35.45 87.19 145.91% 13,514,062
Mellon Financial Corporation 434,000 9.87 29.50 198.82% 12,803,000
Wells Fargo Company 342,000 36.79 40.94 11.26% 14,000,625
----------
40,317,687
CEMENT 3.2%
Lafarge Corporation 609,000 19.90 23.75 19.33% 14,463,750
COMPUTER SOFTWARE 2.7%
Cadence Design Systems, Inc. (b) 584,000 20.50 20.75 1.24% 12,118,000
ELECTRONIC EQUIPMENT & DISTRIBUTION 7.5%
Arrow Electronics, Inc. (b) 501,000 24.47 35.25 44.06% 17,660,250
Avnet, Inc. 256,000 45.00 63.00 40.01% 16,128,000
----------
33,788,250
FINANCIAL SERVICES 3.6%
Franklin Resources, Inc. 479,000 35.60 33.44 -6.06% 16,016,563
HEALTHCARE 4.9%
Omnicare, Inc. 1,814,100 19.21 12.06 -37.22% 21,882,581
HOUSEHOLD APPLIANCES 3.3%
Maytag Corporation 447,000 51.33 33.13 -35.47% 14,806,875
INSURANCE 8.3%
Chubb Corporation 276,000 62.22 67.56 8.59% 18,647,250
PartnerRE, Ltd. 506,500 38.08 36.81 -3.33% 18,645,531
----------
37,292,781
MORTGAGE & RELATED SERVICE 3.1%
Federal National Mortgage Association 249,000 71.83 56.44 -21.43% 14,052,937
PHARMACEUTICALS 17.2%
Alza Corporation (b) 475,000 32.17 37.56 16.76% 17,842,188
American Home Products Corporation 286,000 44.76 53.63 19.79% 15,336,750
ICN Pharmaceuticals, Inc. 571,000 30.18 27.25 -9.71% 15,559,750
Mylan Laboratories, Inc. 540,000 26.35 27.50 4.36% 14,850,000
Schering-Plough Corporation 366,000 37.58 36.75 -2.22% 13,450,500
----------
77,039,188
RAILROAD 3.0%
Canadian National Railway Company 495,000 27.78 26.69 -3.92% 13,210,313
RETAIL 11.0%
Family Dollar Stores, Inc. 887,100 17.24 20.81 20.74% 18,462,769
May Department Stores Company 458,000 27.11 28.50 5.14% 13,053,000
Office Depot, Inc. (b) 1,560,000 11.65 11.56 -0.78% 18,037,500
----------
49,553,269
</TABLE>
5
<PAGE>
SCHEDULE OF INVESTMENTS IN SECURITIES (CONTINUED) MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
STRONG SCHAFER VALUE FUND (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or Unit
Principal Average Market Market
Security Amount Unit Cost Value % Change Value
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
STEEL 2.7%
UCAR International, Inc. (b) 905,300 $ 23.30 $ 13.19 -43.39% $ 11,938,644
TELECOMMUNICATIONS & EQUIPMENT 5.7%
Alltel Corporation 195,000 67.44 63.06 -6.49% 12,297,187
ECI Telecom, Ltd. 417,000 36.91 31.38 -15.01% 13,083,375
----------
25,380,562
-----------------------------------------------------------------------------------------------------------------------------------
Total Common Stocks (Cost $435,478,636) 442,234,525
-----------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (A) 1.4%
COMMERCIAL PAPER
INTEREST BEARING, DUE UPON DEMAND
Sara Lee Corporation, 5.73% $5,034,865 100.00 100.00 0.00% 5,034,865
Wisconsin Electric Power Company, 5.77% 1,306,232 100.00 100.00 0.00% 1,306,232
-----------------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (Cost $6,341,097) 6,341,097
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
Total Investments in Securities (Cost $441,819,733) 100.0% 448,575,622
Other Assets and Liabilities, Net 0.0% (127,575)
-----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS 100.0% $448,448,047
===================================================================================================================================
</TABLE>
LEGEND
-------------------------------------------------------------------------------
(a) Short-term investments include any security which has a remaining maturity
of less than one year.
(b) Non-income producing security.
Percentages are stated as a percent of net assets.
6
See Notes to Financial Statements.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
-------------------------------------------------------------------------------
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Strong Schafer
Value Fund
--------------
<S> <C>
ASSETS:
Investments in Securities, at Market Value
(Cost of $441,819,733) $448,575,622
Dividends and Interest Receivable 389,247
Other Assets 63,201
------------
Total Assets 449,028,070
LIABILITIES:
Payable for Fund Shares Redeemed 159,510
Accrued Operating Expenses and Other Liabilities 420,513
------------
Total Liabilities 580,023
------------
NET ASSETS $448,448,047
============
NET ASSETS CONSIST OF:
Capital Stock (250,000,000 shares authorized, $.10 par value) $ 908,719
Paid-in Capital 573,965,072
Accumulated Net Investment Loss (1,061,228)
Accumulated Net Realized Loss (132,120,405)
Net Unrealized Appreciation 6,755,889
------------
Net Assets $448,448,047
============
Capital Shares Outstanding 9,087,188
NET ASSET VALUE PER SHARE $49.35
======
</TABLE>
7
See Notes to Financial Statements.
<PAGE>
STATEMENT OF OPERATIONS
-------------------------------------------------------------------------------
For the Six Months Ended March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Strong Schafer
Value Fund
--------------
<S> <C>
INCOME:
Dividends (net of foreign withholding taxes of $131,370) $ 4,043,278
Interest 148,398
------------
Total Income 4,191,676
EXPENSES:
Investment Advisory Fees 2,756,096
Custodian Fees 7,939
Shareholder Servicing Costs 1,209,483
Reports to Shareholders 227,529
Other 134,716
------------
Total Expenses before Fees Paid Indirectly by Strong 4,335,763
Fees Paid Indirectly by Strong (22,563)
------------
Expenses, Net 4,313,200
------------
NET INVESTMENT LOSS (121,524)
REALIZED AND UNREALIZED GAIN (LOSS):
Net Realized Loss on Investments (27,656,617)
Net Change in Unrealized Appreciation/Depreciation on Investments 69,064,943
------------
NET GAIN ON INVESTMENTS 41,408,326
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 41,286,802
============
</TABLE>
8
See Notes to Financial Statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Strong Schafer Value Fund
--------------------------------
Six Months Ended Year Ended
March 31, 2000 Sept. 30, 1999
---------------- --------------
(Unaudited)
<S> <C> <C>
OPERATIONS:
Net Investment Income (Loss) ($ 121,524) $6,749,105
Net Realized Loss (27,656,617) (101,955,383)
Net Change in Unrealized Appreciation/Depreciation 69,064,943 111,839,764
------------ ---------------
Net Increase in Net Assets Resulting from Operations 41,286,802 16,633,486
DISTRIBUTIONS FROM NET INVESTMENT INCOME (5,737,017) (9,533,194)
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 43,319,295 233,245,091
Proceeds from Reinvestment of Distributions 5,560,120 9,181,919
Payment for Shares Redeemed (295,287,251) (1,017,952,730)
------------ ---------------
Net Decrease in Net Assets from Capital Share Transactions (246,407,836) (775,525,720)
------------ ---------------
TOTAL DECREASE IN NET ASSETS (210,858,051) (768,425,428)
NET ASSETS:
Beginning of Period 659,306,098 1,427,731,526
------------ ---------------
End of Period $448,448,047 $ 659,306,098
============ ===============
TRANSACTIONS IN SHARES OF THE FUND:
Sold 919,034 4,260,881
Issued in Reinvestment of Distributions 115,713 159,187
Redeemed (6,250,681) (18,755,755)
--------- ----------
Net Decrease in Shares of the Fund (5,215,934) (14,335,687)
========= ==========
</TABLE>
9
See Notes to Financial Statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
March 31, 2000 (Unaudited)
1. ORGANIZATION
Strong Schafer Value Fund, Inc. (the "Fund") was incorporated under the
laws of the State of Maryland on August 12, 1985, and is registered under
the Investment Company Act of 1940, as amended, as an open-end, diversified
management investment company.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements.
(A) SECURITY VALUATION -- Securities of the Fund 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.
(B) FEDERAL INCOME AND EXCISE TAXES AND DISTRIBUTIONS TO SHAREHOLDERS--
The Fund intends to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders
in a manner which results in no tax cost to the Fund. 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.
The 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) ADDITIONAL INVESTMENT RISK -- The Fund has short-term investments
which are unsecured nonnegotiable instruments. These instruments are
rated at least A1 by Standard & Poor's. However, the Fund may be
susceptible to credit risk with respect to these securities to the
extent the issuer defaults on its payment obligation. The Fund's
policy is to monitor the creditworthiness of the issuer and the Fund
does not anticipate nonperformance by these counterparties.
Investments in foreign denominated assets may involve greater risks
than domestic investments due to currency, political, economic,
regulatory and market risks.
(E) FOREIGN CURRENCY TRANSLATION -- Investment securities and other assets
and liabilities initially expressed in foreign currencies are
converted to U.S. dollars based upon current exchange rates. Purchases
and sales of foreign investment securities and income are converted
daily 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.
(F) 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.
(G) 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
Strong Schafer Capital Management LLC (the "LLC") provides management and
investment advisory services to the Fund. The Investment Advisory Agreement
(the "Advisory Agreement") provides that, subject to the direction of the
Fund's Board of Directors, the LLC is responsible for the management of the
Fund's portfolio. The LLC is obligated to perform certain administrative
and management services for the Fund, except to the extent these services
are provided by any custodian, transfer agent, registrar or administrator
hired by the Fund, and is obligated to provide all of the office space,
facilities, equipment and personnel necessary to perform its duties under
the Advisory Agreement. The Advisory Agreement provides for a monthly fee
computed at an annual rate of 1.0% of the Fund's average daily net assets.
Investment advisory fees payable to the LLC at March 31, 2000 were $2,574.
Unaffiliated directors' fees paid during the six months ended March 31,
2000 were $11,250.
10
<PAGE>
In September, 1997, Schafer Capital Management, Inc. ("Schafer") and Strong
Capital Management, Inc. ("Strong") entered into a Limited Liability
Company Agreement (the "LLC Agreement") forming the LLC. The LLC Agreement
provides that Schafer and Strong shall be members of the LLC, with Schafer
as the managing member, and grants to Strong an option to purchase
Schafer's interest in the LLC. This option is first exercisable on January
10, 2001, or earlier in the event of certain other circumstances, subject
to obtaining necessary regulatory approvals, including approval of the
Fund's shareholders. As managing member of the LLC, Schafer will provide
ongoing management and investment advisory services to the Fund and will
perform all obligations of the LLC under the investment advisory agreement
between the Fund and the LLC.
Strong provides fund accounting services and shareholder recordkeeping and
related services to the Fund. Fund accounting service fees are
contractually established based upon the net assets of the Fund. Fund
accounting service fees paid to Strong for the six months ended March 31,
2000 were $24,601. Shareholder recordkeeping and related service fees are
based upon contractually established rates for each open and closed
shareholder account. Shareholder recordkeeping and related service fees
payable to Strong at March 31, 2000 were $303,819. Also allocated to the
Fund are certain charges or credits resulting from transfer agency banking
activities based on the Fund's level of subscription and redemption
activity. Credits serve to reduce the shareholder servicing expenses
incurred by the Fund and are reported as Fees Paid Indirectly by Strong in
the Fund's Statement of Operations. In addition, Strong is compensated for
certain other services related to costs incurred for reports to
shareholders. Other shareholder servicing expenses paid to Strong for the
six months ended March 31, 2000 were $1,212,439.
Pursuant to a distribution agreement, Strong Investments, Inc., an indirect
subsidiary of Strong, has agreed to act at the request of the Fund and the
LLC as the Fund's agent to effect the distribution of the Fund's shares. No
expenses are incurred by the Fund with respect to this agreement.
4. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of long-term securities, other than
government securities, for the six months ended March 31, 2000 were
$108,286,349 and $357,587,147, respectively. There were no purchases or
sales of long-term government securities during the six months ended March
31, 2000.
5. INCOME TAX INFORMATION
At March 31, 2000, the cost of investments in securities for federal income
tax purposes was $442,441,371. Net unrealized appreciation of securities
was $6,134,251, consisting of gross unrealized appreciation and
depreciation of $61,659,282 and $55,525,031, respectively. The Fund had a
capital loss carryover of $103,907,288 which expires in 2007.
11
<PAGE>
FINANCIAL HIGHLIGHTS
-------------------------------------------------------------------------------
STRONG SCHAFER VALUE FUND
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Period Ended
------------------------------------------------------------------
March 31, Sept. 30, Sept. 30, Sept. 30, Sept. 30, Sept. 30,
Selected Per-Share Data(a) 2000(b) 1999 1998 1997 1996 1995
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $46.10 $49.85 $67.29 $47.28 $43.46 $36.54
Income From Investment Operations:
Net Investment Income 0.05 0.44 0.40 0.39 0.47 0.36
Net Realized and Unrealized Gains (Losses) on Investments 3.70 (3.83) (15.81) 21.48 5.00 8.53
---------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 3.75 (3.39) (15.41) 21.87 5.47 8.89
Less Distributions:
From Net Investment Income (0.50) (0.36) (0.59) (0.43) (0.38) (0.33)
From Net Realized Gains -- -- (1.44) (1.43) (1.27) (1.64)
---------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.50) (0.36) (2.03) (1.86) (1.65) (1.97)
---------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $49.35 $46.10 $49.85 $67.29 $47.28 $43.46
=================================================================================================================================
Ratios and Supplemental Data
---------------------------------------------------------------------------------------------------------------------------------
Total Return +8.2% -6.9% -23.5% +47.5% +13.0% +26.0%
Net Assets, End of Period (In Millions) $448 $659 $1,428 $1,318 $389 $163
Ratio of Expenses to Average Net Assets Without Fees
Paid Indirectly by Strong 1.6%* 1.4% 1.2% 1.2% 1.3% 1.3%
Ratio of Expenses to Average Net Assets 1.6%* 1.4% 1.2% 1.2% 1.3% 1.3%
Ratio of Net Investment Income to Average Net Assets 0.0%*(c) 0.6% 0.7% 0.8% 1.2% 1.2%
Portfolio Turnover Rate 20.1% 67.1% 39.0% 22.5% 17.8% 33.2%
</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 six months ended March 31, 2000 (unaudited).
(c) Amount Calculated is less than 0.1%
12
See Notes to Financial Statements.
<PAGE>
Directors
David K. Schafer
Timothy C. Collins
Mary P. English
Phillip P. Young
Officers
David K. Schafer, PRESIDENT
James P. Cullen, VICE PRESIDENT
Brendan J. Spillane, SECRETARY AND TREASURER
John S. Weitzer, ASSISTANT SECRETARY
Investment Advisor
Strong Schafer Capital Management, LLC
P.O. Box 2936, Milwaukee, Wisconsin 53201
Distributor
Strong Investments, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
Custodian
Firstar Bank, 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
Independant Accountants
PricewaterhouseCoopers LLP
100 East Wisconsin Avenue, Milwaukee, Wisconsin 53202
Legal Counsel
Sidley & Austin
1 First National Plaza, Chicago, IL 60603
<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 propsectus
only. Strong Investments, Inc. RT 3479-0400
---------------------------------------------------------------
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
[GRAPHIC] STRONG INVESTMENTS
P.O. Box 2936
Milwaukee, Wisconsin 53201
