<PAGE> 1
SEMIANNUAL REPORT
JUNE 30, 1995
THE STRONG
MUNICIPAL INCOME FUNDS
[Photo of Man and Woman]
THE STRONG MUNICIPAL MONEY MARKET FUND
THE STRONG SHORT-TERM MUNICIPAL BOND FUND
THE STRONG INSURED MUNICIPAL BOND FUND
THE STRONG MUNICIPAL BOND FUND
THE STRONG HIGH-YIELD MUNICIPAL BOND FUND
[STRONG FUNDS LOGO]
<PAGE> 2
EIGHT BASIC PRINCIPLES FOR
SUCCESSFUL MUTUAL FUND INVESTING
These common sense rules are followed by many successful
investors. They make sense for beginners, too. If you have a question
on these principles, or would like to discuss them with us, please contact
us at 1-800-368-3863. We're here 24 hours a day, seven days a
week to take your call.
1. Have a plan. Even a simple plan can help you take control of your
financial future. Review your plan once a year, or if your
circumstances change.
2. Start investing as soon as possible. Make time a valuable ally. Let it
put the power of compounding to work for you, while helping to reduce
your potential investment risk.
3. Diversify your portfolio. By investing in different asset classes -
stocks, bonds, and cash - you help protect against poor performance
in one type of investment while including investments most likely
to help you achieve your important goals.
4. Invest regularly. Investing is a process, not a one-time event. Make
a habit of investing. And make it easy for yourself with an "automatic
investment plan." This popular strategy not only helps you manage
investment risk, it also ensures you "pay yourself first" on a regular
basis.
5. Maintain a long-term perspective. For most individuals, the best
discipline is staying invested as market conditions change. Reactive,
emotional investment decisions are all too often a source of regret -
and of principal loss.
6. Consider stocks to help achieve major long-term goals. Over time,
stocks have provided the more powerful returns needed to help the
value of your investments stay well ahead of inflation.
7. Keep a comfortable amount of cash in your portfolio. To meet
current needs, including emergencies, use a money market fund or
a bank account - not your long-term investment assets.
8. Know what you're buying. Make sure you understand the potential
risks and rewards associated with each of your investments. Ask
questions...request information...make up your own mind. And
choose a fund company that helps you make informed investment
decisions.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
Investment Reviews
The Strong Municipal Money Market Fund............................................... 2
The Strong Short-Term Municipal Bond Fund............................................ 4
The Strong Insured Municipal Bond Fund............................................... 6
The Strong Municipal Bond Fund....................................................... 6
The Strong High-Yield Municipal Bond Fund............................................ 6
Financial Information
Schedules of Investments in Securities
The Strong Municipal Money Market Fund............................................. 10
The Strong Short-Term Municipal Bond Fund ........................................ 18
The Strong Insured Municipal Bond Fund ............................................ 19
The Strong Municipal Bond Fund .................................................... 20
The Strong High-Yield Municipal Bond Fund.......................................... 23
Statements of Operations ............................................................ 26
Statements of Assets and Liabilities................................................. 27
Statements of Changes in Net Assets.................................................. 28
Notes to Financial Statements........................................................ 30
FINANCIAL HIGHLIGHTS.......................................................................... 38
</TABLE>
<PAGE> 4
The Strong Municipal Money Market Fund
As of 6/30/95
7-DAY
CURRENT
YIELD(2)
4.12%
7-DAY
EFFECTIVE
YIELD(2)
4.20%
The Strong Municipal Money Market Fund seeks federally tax-exempt current
income, a stable share price, and daily liquidity.(1) The Fund invests solely in
high-quality, short-term municipal obligations that present minimal credit
risk.
A CONSISTENT RECORD
OF EXCELLENCE
So far in 1995, the Fund has continued its record of providing its
shareholders with consistently superior returns. Based on total return
through June 30, 1995, the Fund ranked in the top 2% of all tax-exempt money
market funds tracked by Lipper Analytical Services for each of the time
periods below.
Lipper Rankings
Period Ended 6/30/95 Ranking
---------------------------------------
Year-to-Date #2 of 128 funds
---------------------------------------
One-Year #1 of 123 funds
---------------------------------------
Five-Year #1 of 88 funds
---------------------------------------
Since Inception #1 of 60 funds
on 10/23/86
Please note that all rankings are historical and do not
represent future results.
At mid-year, the Municipal Money Market Fund's 7-day current yield was 4.12%,
and its 7-day effective yield--which reflects compounding--was 4.20%.(2) The
following table shows the Fund's equivalent taxable yield for each of 1995's
federal income tax brackets.
[Photo of girls with dog]
Equivalent Taxable Yields(3)
as of 6/30/95
<TABLE>
<CAPTION>
Your tax-exempt
effective yield of
4.20%
Marginal is equivalent to a
Joint Return Single Return Tax Rate taxable yield of:
------------------------------------------------------------------------------
<S> <C> <C> <C>
$39,000 $23,350
& under & under 15% 4.94%
------------------------------------------------------------------------------
$39,001- $23,351-
94,250 56,550 28% 5.83%
------------------------------------------------------------------------------
$94,251- $56,551-
143,600 117,950 31% 6.09%
------------------------------------------------------------------------------
$143,601- $117,951-
256,500 256,500 36% 6.56%
------------------------------------------------------------------------------
over over
$256,500 $256,500 39.6% 6.95%
------------------------------------------------------------------------------
</TABLE>
INTEREST RATES TREND LOWER
In seven separate steps last year, the Federal Reserve raised its key
credit-tightening tool, the federal funds target rate, by three full
percentage points--or 300 basis points. While long-term rates were less affected
by the Fed's actions, short-term market interest rates nearly doubled right
along with the target rate.
Since December, the market consensus seems to have been that the growth rate of
the economy is slowing sufficiently and that the threat of significant inflation
is minimal. Short-term interest rates appear to have peaked in mid-December,
with the yield on the benchmark one-year Treasury Bill topping out at 7.32%
several weeks before the Fed finished tightening. By mid-year, those same
T-Bills were yielding 5.62%.(4)
As we look to the balance of 1995, we expect short-term interest rates will
continue to decline, though at a slower pace than occurred in the first half
of the year. At this point, we believe the Federal Reserve is likely to lower
the discount rate at least once or twice before the end of 1995.
2
<PAGE> 5
IN RESPONSE,
LONGER MATURITIES
Responding to this changing interest-rate environment--and in anticipation of
even lower rates--we have increased the Fund's average maturity to lock in
higher rates. Although money funds, by law, may maintain an average maturity
of as high as 90 days, we've settled in the 60- to 70-day range, a level well
above the average for the industry, but short enough to avoid significant
downside exposure should signs of inflation or rising rates suddenly appear.
Given the euphoria surrounding both the stock market and the long-term bond
market this year, many professional market-watchers are growing skeptical
about the near-term prospects for additional appreciation in financial
assets. Should these markets top out, we wouldn't be surprised
to see accelerated cash flows coming into money market funds later this year.
A CONSERVATIVE PORTFOLIO
The Strong Municipal Money Market Fund invests only in short-term securities
with minimal credit risk. All of the Fund's holdings are rated within the top
two short-term rating categories or are of comparable quality.
Furthermore, we have not invested in the types of derivatives identified by
the Securities and Exchange Commission as unsuitable for money market funds.
We restrict our derivative use to those instruments that either increase
liquidity--such as demand options and put bonds--or that increase quality--such
as collateral, insurance, or institutional support agreements.
ENHANCING LIQUIDITY,
QUALITY, AND VALUE
To provide the Fund with a greater cushion of liquidity, at mid-year
approximately 53% of the portfolio carried a weekly or daily demand feature,
which means those securities can be sold in seven days or less at their
contractual par value.
Approximately 90% of the portfolio carried some type of credit enhancement,
with the remaining 10% composed primarily of unenhanced general-obligation
debt, which typically carries a pledge of unlimited tax support. Since Orange
County, California's troubles late last year, many investors have shied away
from any security that's not guaranteed or enhanced somehow. Their
skittishness has created opportunities for those investors, like us, who are
willing to do their homework on individual credits. We continue to believe
that our commitment to extensive credit research is one way we truly add
value for our shareholders.
THANK YOU FOR
YOUR INVESTMENT
As always, whatever the economic environment, we remain committed to
preserving the integrity of your investment and providing you with
top-quality investment results. We appreciate the opportunity to serve your
investment needs, and we look forward to doing so for many years to come.
Sincerely,
/s/ Steven D. Harrop
Steven D. Harrop
Portfolio Manager
[Photo of Steven D. Harrop]
(1) An investment in the Fund is neither insured nor guaranteed by
the U.S. government, and there can be no assurance that the Fund will be
able to maintain a stable share price of $1.00.
(2) Yields are annualized for the 7 days ended 6/30/95, are historical, and
will vary.
(3) Effective yield assumes reinvested income. The chart reflects 1995
marginal federal tax rates before limitations and phase-outs. Individuals
with adjusted gross income in excess of $114,700 should consult their tax
advisor to determine their actual 1995 marginal tax rate. The Fund's income
may be subject to state and local taxes and, depending on your tax status,
the Alternative Minimum Tax.
(4) Source: Bloomberg.
3
<PAGE> 6
The Strong Short-Term
Municipal Bond Fund
As of 6/30/95
30-DAY
ANNUALIZED
YIELD(1)
4.53%
AVERAGE
MATURITY
1.6 years
AVERAGE
QUALITY
A
The Strong Short-Term Municipal Bond Fund seeks total return by investing for
a high level of federally tax-exempt current income with a low degree of
share-price fluctuation. The Fund invests primarily in short- and
intermediate-term, investment-grade municipal obligations and maintains an
average portfolio maturity of three years or less.
As of June 30, 1995, the Strong Short-Term Municipal Bond Fund's annualized
30-day yield was 4.53%.(1) The table below shows the Fund's equivalent taxable
yields for each of 1995's federal income tax brackets.
Equivalent Taxable Yields(1)
as of 6/30/95
<TABLE>
<CAPTION>
Your tax-exempt
yield of
4.53%
Marginal is equivalent to a
Joint Return Single Return Tax Rate taxable yield of:
----------------------------------------------------------------------------------
<S> <C> <C> <C>
$39,000 $23,350
& under & under 15% 5.33%
----------------------------------------------------------------------------------
$39,001- $23,351-
94,250 56,550 28% 6.29%
----------------------------------------------------------------------------------
$94,251- $56,551-
143,600 117,950 31% 6.57%
----------------------------------------------------------------------------------
$143,601- $117,951-
256,500 256,500 36% 7.08%
----------------------------------------------------------------------------------
over over
$256,500 $256,500 39.6% 7.50%
----------------------------------------------------------------------------------
</TABLE>
The Fund's income may be subject to state and local taxes and, depending on
your tax status, the Alternative Minimum Tax. The chart reflects 1995 marginal
federal tax rates before limitations and phase-outs. Individuals with adjusted
gross income in excess of $114,700 should consult their tax advisor to
determine their actual 1995 marginal tax rate.
At mid-year, the Fund was diversified across 42 different issuers and across 22
states. The largest holding, Hillsboro, Oregon Hospital Facility Authority,
accounted for 7.5% of the portfolio's net assets, and Michigan, totaling 11.8%
of the portfolio, was the largest state.
MUNI MARKET REBOUNDS
After one of the toughest years for bonds in decades, municipal bond prices
rebounded sharply in early 1995. Although we had been expecting prices to
rally this year--and though we had the Fund well-positioned for the move--the
market rose so high so quickly that in March we began taking a more defensive
stance. While our caution limited the Fund's participation in some of this
year's upside market moves, we continue to see a number of additional risk
factors that may affect the municipal bond market.
INFLATIONARY PRESSURES. We believe the recent surges in grain and other
commodity prices are likely to surface later this year at the consumer level.
In addition, both new mortgage applications and new-construction work orders
have been on the rise lately. As a result, we expect housing starts, often
considered a leading indicator of inflation, to increase in the coming
months.
POLITICAL MANEUVERING. Since the elections in November, Republicans have
focused national debate on a number of controversial issues, not the least of
which is income-tax reform. Several of the proposed plans would, if enacted,
affect the tax-exempt status of interest earned from municipal securities. We
believe this has had--and, until the various proposals shake out, will
continue to have--a negative effect on the demand for municipal bonds.
PORTFOLIO STRATEGY
Last year, in an attempt to maximize the Fund's yield and take advantage of a
fairly steep municipal yield curve, the Fund had been positioned with what's
called a "barbell approach." It used relatively long-term, medium-grade and
lower-rated securities with higher coupons, and balanced out those longer
maturities--and their accompanying higher interest-rate exposure--with a
combination of liquid, high-grade, short-term securities.
4
<PAGE> 7
Another dimension of our strategy involved hedging a portion of the portfolio
against interest-rate risk with a mix of exchange-traded municipal and treasury
futures.
Although we continue to believe the longer bonds in the Fund provide significant
investment merit, many of them were initially brought to market by
smaller, regional issuers. As a result, they are less frequently traded, and
they typically lag in a rising bond market, such as the one we've experienced so
far this year. However, we believe those bonds are likely to outperform the
general market over the balance of the interest-rate cycle, and we expect to
hold them to maturity.
Going forward, we intend to "unwind" a substantial portion of the barbell
position. As the longer-term securities mature, we plan to opportunistically
replace them with shorter-term issues, while we simultaneously reduce the
corresponding treasury and municipal futures hedge.
We appreciate the opportunity to serve you, and we thank you for your
investment with us.
Sincerely,
/s/ Thomas J. Conlin
Thomas J. Conlin
Portfolio Manager
/s/ Greg D. Winston
Greg D. Winston
Portfolio Manager
[Photo of Thomas J. Conlin and Greg D. Winston]
Growth of an assumed $10,000 investment
from 12/31/91 to 6/30/95
The Strong Short-Term Municipal Bond Fund
12/91 10000
6/92 10345
12/92 10716
6/93 11118
12/93 11441
6/94 11322
12/94 11256
6/95 11429
Lehman Brothers 3-Year Municipal Bond Index
12/91 10000
6/92 10309
12/92 10643
6/93 11022
12/93 11305
6/94 11276
12/94 11383
6/95 11952
Average annual total returns
through 6/30/95
Since inception 3.89%
on 12/31/91
3-year 3.38%
1-year 0.94%
This graph, prepared in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with a similar investment in the
Lehman Brothers 3-Year Municipal Bond Index, an unmanaged, total-return
performance benchmark for the 3-year, tax-exempt bond market. 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 Fund shares.
(1) Yields are annualized for the 30 days ended 6/30/95, are historical, and
will vary.
5
<PAGE> 8
The Strong Insured Municipal Bond Fund
The Strong Municipal Bond Fund
The Strong High-Yield Municipal Bond Fund
MARKET OVERVIEW
MUNICIPALS RALLY IN 1995
On the heels of a tough year for bonds, we began 1995 expecting municipal
bonds to rally. Municipal bond prices did indeed rise as long-term interest
rates declined from their late-1994 peak.
By late February, the prices for long-term municipals had increased by an
average of nearly 8% since the end of November. To us, that seemed a steep,
swift move--one that, given the factors below, compelled us to lock in some of
the gains and begin to adopt a more defensive stance in all three of our
longer-term funds.
As the muni market continued to drive upward during the following months, a
number of what we believe to be cautionary signals began to surface.
LATENT INFLATIONARY PRESSURES
HOUSING. Many economists have recently pointed to the slowdown in housing
starts as evidence that inflation appears to be under control. We believe
those numbers are only temporarily lower, partly because of the flooding that
plagued much of the midwest early this spring. And since both new mortgage
applications and new-construction work orders have picked up dramatically, we
expect to see stronger housing numbers in the next few months.
COMMODITIES. In addition, prices for a number of industrial and agricultural
commodities have had sustained run-ups that are not yet reflected at the
consumer level. For instance, immediate-delivery copper, which is used
heavily in construction and manufacturing, recently hit a six-year high. Corn
and wheat futures have also skyrocketed recently, which is likely to
translate into higher food prices later this year.
We believe these are signs that the economy is perhaps stronger than the
markets seem to think and that the latent threat of inflation should not be
ignored.
MUNI MARKET UNCERTAINTIES
TAX-REFORM INITIATIVES. In 1993, during the political turmoil surrounding
health-care reform, the stock prices of most drug and other health-related
companies were extremely volatile, even though nothing substantial was ever
passed into law. We believe a similar situation exists today with long-term
municipal bonds. For better or worse, a number of prominent politicians appear
determined to overhaul the country's tax code. Several of the current plans, if
enacted, would in some way affect the deductibility of interest earned from
municipal securities.
ORANGE COUNTY. Orange County voters, by failing to pass June's referendum to
raise their sales tax by one-half cent, have sent a troublesome message to
investors in all types of general-obligation municipal bonds. G.O. bonds are
backed by the taxing authority of their issuers--and one of the wealthiest
counties in the country has, in essence, said it's not going to use that
authority to make good on its debts. Although we believe the Orange County
situation is an isolated incident, we also believe the massive press coverage is
bound to take its toll on investors' confidence in the muni market.
In general, we continue to believe municipal bonds are a solid long-term
investment, but until the risks we've outlined dissipate, we are leery of
most very long-term bonds, and we believe a defensive posture is warranted.
In all our portfolios, credit research is the driving factor behind our security
selection. We strive to keep a long-term perspective; we don't attempt to
time the market with short-term plays that are dependent, to a large degree, on
market psychology. That said, we have made a number of significant moves this
year in an effort to reduce the Funds'
6
<PAGE> 9
sensitivity to interest-rate changes without sacrificing their ability to
generate tax-free income--and without sacrificing their overall credit
quality.
STRONG INSURED
MUNICIPAL BOND FUND
In the Insured Fund, we have greatly reduced our positions in long-term,
discounted securities. While discounted bonds often show greater potential
for price appreciation, they also tend to be among the hardest hit when
markets decline. As of June 30, 1995, the Fund held the securities of 27
different issuers, with no more than 21.2% of its assets concentrated in any
single state.
STRONG MUNICIPAL BOND FUND
We have also attempted to reduce the Municipal Bond Fund's sensitivity to
interest-rate changes as the market has continued to rally this year, primarily
by moving from deeply discounted bonds with long durations to premium coupon
bonds with short durations. This strategy boosts current income to the Fund
while reducing its exposure to the potential risks we see in the market. As
always, we are committed to maintaining a diversified, well-researched
portfolio. At mid-year, the Fund held the securities of 72 distinct issuers, and
the single largest state, Illinois, accounted for 11.4% of assets.
<TABLE>
<CAPTION>
EQUIVALENT TAXABLE YIELDS
Insured Municipal High-Yield
Municipal Bond Fund Municipal
Bond Fund Bond Fund
Taxable Income Your tax-exempt Your tax-exempt Your tax-exempt
Marginal yield of 4.90% is yield of 5.26% is yield of 7.57% is
Joint Single Tax equivalent to a equivalent to a equivalent to a
Return Return Rate taxable yield of: taxable yield of: taxable yield of:
<S> <C> <C> <C> <C> <C>
$39,000 $23,350
& under & under 15% 5.76% 6.19% 8.91%
-----------------------------------------------------------------------------------------------------------
$39,001- $23,350-
94,250 56,550 28% 6.81% 7.31% 10.51%
-----------------------------------------------------------------------------------------------------------
$94,251- $56,551-
143,600 117,950 31% 7.10% 7.62% 10.97%
-----------------------------------------------------------------------------------------------------------
$143,601- $117,951-
256,500 256,500 36% 7.66% 8.22% 11.83%
-----------------------------------------------------------------------------------------------------------
over over
$256,500 $256,500 39.6% 8.11% 8.71% 12.53%
</TABLE>
Yields are annualized for the 30 days ended 6/30/95, are historical, and will
vary. Each Fund's income may be subject to state and local taxes and, depending
on your tax status, the Alternative Minimum Tax. The chart reflects 1995
marginal federal tax rates before limitations and phase-outs. Individuals with
adjusted gross income in excess of $114,700 should consult their tax advisor to
determine their actual 1995 marginal tax rate.
7
<PAGE> 10
STRONG HIGH-YIELD
MUNICIPAL BOND FUND
The Fund consists primarily of non-rated or lower-rated securities, which
usually trade relatively infrequently. As a result, there's not much bandwagon
effect when bond prices are rising rapidly, so their prices often lag the
market. Nevertheless, we believe that, over the course of an economic cycle, the
above-market yield offered by most of these securities will fully offset any
delay in price appreciation. At the end of June, the Fund held securities from
50 different issuers, the largest holding was Montgomery County, PA Higher
Education & Health Authority (6.7% of net assets), and the largest state
represented was Pennsylvania (36.1% of net assets).
WE CONTINUE TO BE CAUTIOUS
We are--and always have been--contrarian investors. This strategy served our
shareholders well in 1994's difficult markets, as all three of our Funds
outperformed their respective market and category averages. We must admit,
however, that we are disappointed to have underperformed the averages so far
in 1995. But with record highs in both the stock and the bond markets, and
with many investors seemingly caught up in the euphoria, we see ample reasons
to be cautious.
We are, of course, constantly monitoring the situation, and should we begin to
see signs that lead us to believe the market risks are fading, we'll shift to a
more aggressive strategy. Until then, though, we believe the prudent course is
to remain fully invested but to minimize downside price risk by focusing on
short- and intermediate-term issues with solid income streams.
We are grateful you've chosen us to manage a portion of your investment
portfolio. Thank you for your confidence.
Sincerely,
/s/ Thomas J. Conlin
Thomas J. Conlin
Portfolio Manager
/s/ Mary-Kay H. Bourbulas
Mary-Kay H. Bourbulas
Portfolio Manager
[Photo of Thomas J. Conlin and Mary-Kay H. Bourbulas]
<TABLE>
<CAPTION>
PORTFOLIO STATISTICS
as of 6/30/95
30-DAY AVERAGE AVERAGE QUALITY
ANNUALIZED YIELD MATURITY RATING
<S> <C> <C> <C>
Insured Municipal Bond Fund 4.90% 21.3 years AAA
---------------------------------------------------------------------------------------------------------------------------
Municipal Bond Fund 5.26% 20.1 years AA
---------------------------------------------------------------------------------------------------------------------------
High-Yield Municipal Bond Fund 7.57% 16.2 years BBB
</TABLE>
When-issued securities are reflected in the Funds' average maturities. The
advisor is currently waiving fees of .60% and absorbing expenses of .21% for
the High-Yield Municipal Bond Fund. Otherwise, the current yield would have
been 6.76%.
8
<PAGE> 11
GROWTH OF AN ASSUMED $10,000 INVESTMENT
The charts below, provided in accordance with SEC regulations, compare a
$10,000 investment in each Fund, made at its inception, with a similar
investment in a relevant, unmanaged, total-return performance benchmark.
Results include the reinvestment of all dividends and capital gains.
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.
Growth of an assumed $10,000 investment
from 11/25/91 to 6/30/95
The Strong Insured Municipal Bond Fund
11/91 10000
12/91 10335
6/92 11082
12/92 11685
6/93 12621
12/93 13186
6/94 12361
12/94 12333
6/95 13073
Lehman Brothers Insured Municipal Bond Index
11/91 10000
12/91 10230
6/92 10658
12/92 11184
6/93 12038
12/93 12641
6/94 11995
12/94 11885
6/95 13096
Average annual total returns
through 6/30/95
Since inception
on 11/25/91 7.73%
3-year 5.66%
1-year 5.76%
Growth of an assumed $10,000 investment
from 10/23/86 to 6/30/95
The Strong Municipal Bond Fund
10/86 10000
12/86 10129
12/87 9949
12/88 10705
12/89 11463
12/90 11995
12/91 13598
12/92 15256
12/93 17052
12/94 16275
6/95 17134
Lehman Brothers Municipal Bond Index
10/86 10000
12/86 10216
12/87 10370
12/88 11423
12/89 12656
12/90 13578
12/91 15227
12/92 16568
12/93 18602
12/94 17640
6/95 19344
Average annual total returns
through 6/30/95
Since inception 6.39%
on 10/23/86
5-year 8.29%
3-year 5.70%
1-year 5.15%
Growth of an assumed $10,000 investment
from 10/1/93 to 6/30/95
The Strong High-Yield Municipal Bond Fund
10/93 10000
12/93 10266
3/94 10007
6/94 10169
9/94 10288
12/94 10165
3/95 10639
6/95 10979
Lehman Brothers Baa Municipal Bond Index
10/93 10000
12/93 10164
3/94 9627
6/94 9757
9/94 9803
12/94 9609
3/95 10232
6/95 10530
Average annual total returns
through 6/30/95
Since inception 5.48%
on 10/1/93
1-year 7.97%
9
<PAGE> 12
SCHEDULE OF INVESTMENTS IN SECURITIES June 30, 1995 (Unaudited)
STRONG MUNICIPAL MONEY MARKET FUND
<TABLE>
<CAPTION>
PRINCIPAL YIELD TO MATURITY AMORTIZED
AMOUNT MATURITY DATE+ COST (NOTE 2)
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL BONDS 43.4%*
ARIZONA 1.1%*
$13,515,000 Maricopa County, Arizona 9.25% IDA Samaritan Health Service
Hospital System Revenue Refunding (Putable @ 102.00) 4.87% 12/01/95 $ 14,023,836
CALIFORNIA 4.8%*
5,000,000 California 4.60% Housing Finance Agency Home Mortgage Revenue 4.60 02/01/96 5,000,000
5,000,000 Contra Costa County, California 4.25% TRAN 5.16 07/07/95 4,999,187
3,855,000 Contra Costa County, California** COP -- Concord Healthcare
Center, Inc. Project 4.55 06/01/96 3,855,000
9,425,000 Huntington Beach, California 4.10% Public Financing Authority TAN 4.80 10/01/95 9,408,730
12,000,000 North Orange County, California 4.75% Community College District
TRAN 4.40 07/01/96 12,039,960
10,000,000 Riverside County, California 4.75% School Financing Authority
RAN -- School Districts Financing Program (w) 4.26 07/18/96 10,049,600
4,000,000 Sacramento County, California 4.50% TRAN 4.59 09/29/95 3,999,160
7,000,000 San Bernardino County, California 4.50% TRAN 4.73 07/31/95 6,998,670
5,000,000 Stanislaus County, California 4.25% Office of Education TRAN 3.80 07/10/95 5,000,601
----------
61,350,908
FLORIDA 1.5%*
4,000,000 Florida** Housing Finance Agency MFHR Refunding -- Monterey
Lake Project 5.07 10/01/95 4,013,031
3,750,000 Florida** Housing Finance Agency MFHR -- Wood Forest II Project 4.99 12/01/95 3,750,137
2,675,000 Florida** Housing Finance Agency Residential Mortgage Revenue 4.25 06/15/96 2,675,000
9,000,000 Orange County, Florida** HFA MFHR -- Oakwood Project 4.70 10/01/95 9,000,000
----------
19,438,168
GEORGIA 0.9%*
7,600,000 Athens-Clarke County, Georgia** IDA IDR -- Rhone Merimeux,
Inc. Project 5.15 07/25/95 7,600,000
4,000,000 Georgia** Residential Finance Authority Home Ownership Mortgage
-- FHA Insured Mortgage 4.05 12/01/95 4,000,000
----------
11,600,000
ILLINOIS 10.7%*
7,000,000 Cook County, Illinois 3.50% GO 5.32 11/15/95 6,953,637
Illinois** DFA IDR:
4,420,000 Deerfield Executive Center Project 4.50 09/01/95 4,420,000
2,340,000 216 South Jefferson Project 5.36 12/01/95 2,338,944
Lakemoor, Illinois** MFHR Mortgage -- Lakemoor Apartments Project:
50,000,000 Series B 6.00 12/01/95 50,000,000
10,000,000 Series C 5.25 03/01/96 10,000,000
41,820,000 Oakbrook Terrace, Illinois** MFHR -- Renaissance Project 5.25 03/01/96 41,820,000
15,000,000 Oakbrook Terrace, Illinois** MFHR -- Renaissance Project (w) 4.75 04/01/96 15,000,000
5,820,000 Palatine, Illinois** MFHR -- Clover Ridge Apartments Project 5.85 12/15/95 5,820,000
-----------
136,352,581
IOWA 0.3%*
4,000,000 Iowa 4.25% School Corporations Warrant Certificates --
Participating School Corporations of the Iowa School Cash
Anticipation Program 3.72 07/17/95 4,000,961
KANSAS 0.3%*
3,800,000 Manhattan, Kansas** CDR Refunding -- Kan/Del Hotel Investment
Partners, L.P. Project 5.00 08/01/95 3,800,000
LOUISIANA 2.7%*
19,500,000 DeSoto Parish, Louisiana 5.50% Environmental Improvement
Revenue -- International Paper Company Project 5.08 08/24/95 19,512,168
15,400,000 Louisiana** Housing Finance Agency GNMA Collateralized SFMR
Municipal Exempt Receipts -- Liquidity Optional Tender 4.38 11/01/95 15,400,000
----------
34,912,168
MARYLAND 0.8%*
9,760,000 Maryland** Community Development Administration Department of
Housing and Community Development -- Single Family Program 5.38 11/29/95 9,760,000
MASSACHUSETTS 1.8%*
22,375,000 Lynn, Massachusetts 5.50% Water and Sewer Commission BAN 4.70 10/13/95 22,425,147
</TABLE>
See notes to financial statements.
10
<PAGE> 13
SCHEDULE OF INVESTMENTS IN SECURITIES (continued) June 30, 1995 (Unaudited)
STRONG MUNICIPAL MONEY MARKET FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL YIELD TO MATURITY AMORTIZED
AMOUNT MATURITY DATE+ COST (NOTE 2)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MINNESOTA 1.2%*
$ 8,500,000 Bass Brook, Minnesota** Customized Purchase PCR Refunding -- Minnesota
Power & Light Company Project 5.50% 07/12/95 $ 8,500,000
2,450,000 Cloquet, Minnesota** Customized Purchase IDR Refunding -- Minnesota
Power & Light Company Project 5.50 07/12/95 2,450,000
1,695,000 Coleraine, Minnesota** Customized Purchase IDR Refunding -- Minnesota
Power & Light Company Project 5.50 07/12/95 1,695,000
2,000,000 Hoyt Lakes, Minnesota** Customized Purchase PCR Refunding -- Minnesota
Power & Light Company Project 5.50 07/12/95 2,000,000
----------
14,645,000
MISSISSIPPI 0.2%*
1,145,000 Certified Development Company of Mississippi, Inc.** IDR -- Chris-Craft
Enterprises, Inc. Project 5.00 01/01/95 1,145,000
1,100,000 Rankin County, Mississippi** Industrial Revenue -- Trilogy Communications,
Inc. Project 5.25 03/01/96 1,100,000
---------
2,245,000
MONTANA 0.1%*
1,915,000 Montana** Board of Investments Municipal Finance Consolidataion
Act -- INTERCAP Revolving Program 4.90 03/01/96 1,915,000
NEW HAMPSHIRE 0.5%*
6,000,000 New Hampshire** HFA SFMR 4.55 04/01/96 6,000,000
NEW JERSEY 2.9%*
4,870,000 Eastern States** Tax-Exempt Mortgage Bond Trust 5.19 03/01/96 4,870,000
31,804,000 Essex County, New Jersey 5.50% BAN 5.19 12/12/95 31,846,502
----------
36,716,502
NEW MEXICO 0.3%*
New Mexico** Mortgage Finance Authority SFMR :
1,210,000 Series A 5.20 03/01/96 1,210,000
2,025,000 Series B 5.20 03/01/96 2,025,000
----------
3,235,000
NEW YORK 2.2%*
3,685,000 New York** Mortgage Agency Homeowner Mortgage Revenue 4.60 10/01/95 3,685,000
9,010,000 New York** Mortgage Agency Homeowner Mortgage Revenue 4.60 10/01/95 9,010,000
4,157,000 Oneida County, New York 5.00% BAN 4.56 05/10/96 4,172,244
11,000,000 Oneida County, New York 5.00% RAN 4.56 03/29/96 11,035,125
----------
27,902,369
NORTH CAROLINA 0.1%*
1,500,000 Vance County, North Carolina** Industrial Facilities and Pollution
Control Financing Authority -- Southern Quilters -- Carolina
Comforters, Inc. Project 5.25 09/01/95 1,500,000
OHIO 0.1%*
1,000,000 Sharonville, Ohio** IDR -- Ralston Purina Company Project 4.70 12/01/95 1,000,000
PENNSYLVANIA 2.0%*
3,025,000 Allegheny County, Pennsylvania 4.00% Residential Finance Authority
SFMR -- GNMA Mortgage-Backed Securities Program 4.60 06/01/96 3,025,000
5,000,000 Northampton County, Pennsylvania 10.50% IDA PCR -- Metropolitan Edison
Company Project 5.32 09/01/95 5,043,610
4,935,000 Pennsylvania** Housing Finance Agency SFMR 4.88 04/01/96 4,935,000
12,275,000 Philadelphia, Pennsylvania** IDA CDR -- Suite Hotel Project 4.25 06/01/96 12,275,000
----------
25,278,610
RHODE ISLAND 1.3%*
2,825,000 Rhode Island** Housing and Mortgage Finance Corporation
Homeownership Opportunity 4.60 10/01/95 2,825,000
14,000,000 Rhode Island 4.75% Solid Waste Management Corporation
Landfill Lease Notes 4.75 08/01/95 14,000,000
----------
16,825,000
TENNESSEE 0.2%*
2,760,000 Knox County, Tennessee** IDB Industrial Revenue -- ETB Development,
Inc. Project 5.00 04/01/96 2,760,000
</TABLE>
See notes to financial statements.
11
<PAGE> 14
SCHEDULE OF INVESTMENTS IN SECURITIES (continued) June 30, 1995 (Unaudited)
STRONG MUNICIPAL MONEY MARKET FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL YIELD TO MATURITY AMORTIZED
AMOUNT MATURITY DATE+ COST (NOTE 2)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
TEXAS 0.6%*
$ 3,340,000 Brushy Creek, Texas 5.50% Municipal Utility District 5.19% 11/13/95 $ 3,343,692
4,375,000 Tarrant County, Texas HFC MFHR -- Lincoln Meadows Project 5.00 12/01/95 4,375,000
---------
7,718,692
UTAH 3.2%*
19,990,000 Tooele County, Utah** Hazardous Waste Treatment Revenue -- Union Pacific
Corporation/USPCI, Inc. Project 3.75 07/05/95 19,990,000
13,200,000 Tooele County, Utah** Hazardous Waste Treatment Revenue -- Union Pacific
Corporation/USPCI, Inc. Project 4.10 08/15/95 13,200,000
3,000,000 Tooele County, Utah** Hazardous Waste Treatment Revenue -- Union Pacific
Corporation/USPCI, Inc. Project 4.40 08/15/95 3,000,000
4,030,000 Utah** Housing Finance Agency SFMR Senior (w) 4.25 01/01/96 4,030,000
----------
40,220,000
VIRGINIA 0.2%*
3,000,000 Oyster Point, Virginia** Development Corporation MFHR -- Jefferson Point
Development Project 4.55 07/06/95 3,000,000
WASHINGTON 1.1%*
Washington** State Housing Finance Commission SFMR Refunding:
2,455,000 Series S-1A 5.00 09/01/95 2,455,000
1,875,000 Series S-1B 4.90 09/01/95 1,875,000
725,000 Series S-2B 4.90 09/01/95 725,000
1,700,000 Series S-7B 5.00 07/01/95 1,700,000
1,200,000 Series S-8B 5.00 07/01/95 1,200,000
3,000,000 Series S-9B 5.00 07/01/95 3,000,000
2,100,000 Series S-10B 5.00 07/01/95 2,100,000
500,000 Series S-12B 5.00 07/01/95 500,000
305,000 Series S-13B 5.00 07/01/95 305,000
----------
13,860,000
WISCONSIN 2.3%*
3,300,000 Milwaukee, Wisconsin 5.85% Redevelopment Authority Revenue -- Dynapro
Thin Film Products, Inc. Project 5.85 08/07/95 3,300,000
2,390,000 Milwaukee, Wisconsin** Redevelopment Authority Development Revenue
Refunding -- Washington Square Phase I Project 5.75 08/01/95 2,390,000
18,500,000 Milwaukee, Wisconsin** Redevelopment Authority MFHR -- City Hall
Square Apartments Project 5.81 12/01/95 18,500,000
5,490,000 Wisconsin** HDA EDA Home Ownership Revenue 4.85 09/01/95 5,490,000
----------
29,680,000
-----------
Total Municipal Bonds 552,164,942
MONTHLY VARIABLE RATE PUT BONDS 3.9%*
CALIFORNIA 0.2%*
2,220,000 Tri-City, California Housing Finance Agency SFMR -- FNMA and GNMA
Mortgage-Backed Securities Program 4.75 08/01/95 2,220,000
COLORADO 0.2%*
2,420,000 Jefferson County, Colorado IDR -- Anthony A. Petrarca/Cedarwood
Construction Company, Inc. Project 5.00 08/01/95 2,420,000
ILLINOIS 0.3%*
4,000,000 Green Leaf Ventures, Inc. Tax Exempt Bond Grantor Trust 4.85 08/01/95 4,000,000
MINNESOTA 1.3%*
15,847,000 Dakota County, Washington County and the City of Anoka, Minnesota
Housing and Redevelopment Authority SFMR 4.88 08/01/95 15,847,000
NORTH CAROLINA 0.2%*
2,580,543 Carolina Freight Tax Exempt Bond Grantor Trust 4.55 08/01/95 2,580,543
</TABLE>
See notes to financial statements.
12
<PAGE> 15
SCHEDULE OF INVESTMENTS IN SECURITIES (continued) June 30, 1995 (Unaudited)
STRONG MUNICIPAL MONEY MARKET FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL YIELD TO MATURITY AMORTIZED
AMOUNT MATURITY DATE+ COST (NOTE 2)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OHIO 0.2%*
$ 2,625,000 Summit County, Ohio Insured IDR -- Anthony A. Petrarca/Cedarwood
Construction Company, Inc. Project 5.00% 08/01/95 $ 2,625,000
TENNESSEE 0.3%*
4,300,000 GAF Corporation Tax Exempt Bond Grantor Trust 4.25 08/01/95 4,300,000
WISCONSIN 1.2%*
2,685,000 Johnson Controls, Inc. Tax Exempt Bond Grantor Trust 4.30 08/01/95 2,685,000
12,815,000 Wisconsin HDA EDA Home Ownership Revenue 5.00 08/01/95 12,815,000
----------
15,500,000
----------
Total Monthly Variable Rate Put Bonds 49,492,543
WEEKLY VARIABLE RATE PUT BONDS 51.5%*
ALABAMA 3.3%*
Alabama IDA IDR:
3,775,000 Decatur Aluminum Corporation Project 4.40 07/07/95 3,775,000
3,560,000 Research Genetics, Inc. Project 4.75 07/07/95 3,560,000
3,000,000 Well Built Cabinet, Inc. 4.40 07/07/95 3,000,000
5,000,000 Whitesell Project 4.75 07/07/95 5,000,000
1,630,000 Arab, Alabama IDB IDR -- Syncro Corporation Project 4.75 07/07/95 1,630,000
12,270,000 Birmingham, Alabama Baptist Medical Center -- Special Care Facilities
Financing Authority Revenue -- Methodist Home for the Aging Project 4.75 07/07/95 12,270,000
3,100,000 Haleyville, Alabama IDB IDR -- Cusseta Wood Products, Inc. Project 4.40 07/07/95 3,100,000
3,681,000 Irondale, Alabama IDB IDR -- Fixed Collateral Mortgage Project 4.60 07/07/95 3,681,000
Madison County, Alabama MFHR Refunding:
3,065,000 Autumn Wood Project 4.50 07/07/95 3,065,000
1,285,000 Pinehurst Project 4.50 07/07/95 1,285,000
1,500,000 Montgomery, Alabama IDB IDR -- Asphalt Contractors, Inc. Project 4.75 07/07/95 1,500,000
----------
41,866,000
ARIZONA 2.7%*
6,857,000 Chandler, Arizona IDA MFHR -- Greentree Place Apartments Project 6.30 07/07/95 6,857,000
25,500,000 Maricopa County, Arizona PCR -- El Paso Electric Company Palo Verde Project 4.90 07/07/95 25,500,000
2,000,000 Phoenix, Arizona IDA MFHR -- Rincon Vista Apartments Project 4.10 07/07/95 2,000,000
----------
34,357,000
ARKANSAS 0.9%*
3,000,000 Faulkner County, Arkansas IDR -- Spirit Homes, Inc. Project 4.60 07/07/95 3,000,000
4,055,000 Magnolia, Arkansas IDR -- American Fuel Cell and Coated Fabrics
Company Project 4.80 07/07/95 4,055,000
2,800,000 Searcy, Arkansas IDR -- Yarnell Ice Cream Company, Inc. Project 4.60 07/07/95 2,800,000
2,000,000 Trumann, Arkansas IDR -- Roach Manufacturing Corporation Project 4.60 07/07/95 2,000,000
----------
11,855,000
CALIFORNIA 5.8%*
7,000,000 Agoura Hills, California MFHR Refunding -- Oakridge Apartments Project 4.45 07/07/95 7,000,000
3,125,000 Los Angeles County, California IDA IDR -- Goldberg & Solovy Foods, Inc. Project 5.40 07/07/95 3,125,000
3,500,000 Ontario, California IDA IDR -- P & S Development Project 4.65 07/07/95 3,500,000
5,000,000 Orange County, California Apartment Development Revenue Refunding -- Pointe
Niguel Project 4.55 07/07/95 5,000,000
7,500,000 San Bernardino, California MFHR -- Sandlewood Project 4.65 07/07/95 7,500,000
1,800,000 San Bernardino County, California COP -- 1992 Justice Center/Airport
Improvements Refunding Project 4.65 07/07/95 1,800,000
10,800,000 San Bernardino County, California -- Mercury Savings and Loan
Association/Sandalwood Park Apartments Project 4.25 07/07/95 10,800,000
23,275,000 San Francisco, California City and County Redevelopment Agency Multi-Family
Collateralized Housing Revenue -- Cathedral Hill Plaza West Project 4.50 07/07/95 23,275,000
7,500,000 San Marcos, California Redevelopment Agency MFHR -- San Marcos Retirement
Village Project 4.48 07/07/95 7,500,000
4,000,000 Santa Fe Springs, California IDA -- Tri-West Project 4.45 07/07/95 4,000,000
----------
73,500,000
</TABLE>
See notes to financial statements.
13
<PAGE> 16
SCHEDULE OF INVESTMENTS IN SECURITIES (continued) June 30, 1995 (unaudited)
STRONG MUNICIPAL MONEY MARKET FUND (continued)
<TABLE>
<CAPTION>
AMORTIZED
PRINCIPAL YIELD TO MATURITY COST
AMOUNT MATURITY DATE+ (NOTE 2)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COLORADO 0.8%*
$ 3,430,000 Aurora, Colorado IDR -- Optima Batteries, Inc. Project 4.45% 07/07/95 $ 3,430,000
1,595,000 Lakewood, Colorado Jefferson County IDR -- Verden Associates -- Holiday Inn Project 4.90 07/07/95 1,595,000
5,000,000 Westminster, Colorado IDR -- Lifecare International Project 4.55 07/07/95 5,000,000
-----------
10,025,000
FLORIDA 2.8%*
3,540,000 Brevard County, Florida IDR -- U. S. Space Camp Foundation Project 4.75 07/07/95 3,540,000
5,000,000 Broward County, Florida HFA MFHR -- Sawgrass Pines Apartments Project 4.60 07/07/95 5,000,000
6,500,000 Dade County, Florida IDA IDR -- Engelhard/ICC Project 4.60 07/07/95 6,500,000
5,300,000 Florida HFA MFHR Refunding -- Beville-Oxford Project 4.65 07/07/95 5,300,000
Marion County, Florida HFA MFHR:
3,800,000 Belvedere Apartments Project 4.65 07/07/95 3,800,000
4,300,000 Oakhurst Apartments Project 4.65 07/07/95 4,300,000
3,000,000 Paddock Place Project 4.65 07/07/95 3,000,000
4,200,000 Summer Trace Project 4.65 07/07/95 4,200,000
-----------
35,640,000
GEORGIA 2.4%*
2,850,000 Cobb County, Georgia Development Authority IDR -- Datagraphic, Inc. Project 4.50 07/07/95 2,850,000
4,000,000 Fulton County, Georgia Development Authority IDR -- STO Corporation Project 4.55 07/07/95 4,000,000
23,575,000 Roswell, Georgia Housing Authority MFHR Refunding -- Roswell-Oxford Project 4.65 07/07/95 23,575,000
-----------
30,425,000
ILLINOIS 4.1%*
705,000 East Hazelcrest, Illinois EDR Refunding -- Columbia Sussex Corporation Project 5.00 07/07/95 705,000
3,070,000 Evanston, Illinois IDR -- Fountain Square Project 4.40 07/07/95 3,070,000
4,000,000 Illinois DFA EDR -- Korex Corporation Project 4.65 07/07/95 4,000,000
Illinois DFA IDR:
2,000,000 Associated Plastic Fabricators, Inc. Project 4.65 07/07/95 2,000,000
5,635,000 Fleetwood Systems, Inc. Project 4.50 07/07/95 5,635,000
7,700,000 Homak Manufacturing Company, Inc. Project 4.45 07/07/95 7,700,000
4,750,000 Home Run Inn Frozen Foods Corporation Project 4.50 07/07/95 4,750,000
3,250,000 Icon Metalcraft, Inc. Project 4.35 07/07/95 3,250,000
2,800,000 SMF, Inc. Project 4.50 07/07/95 2,800,000
2,835,000 Lombard, Illinois IDR -- Chicago Roll Company, Inc. Project 5.00 07/07/95 2,835,000
Merrionette Park, Illinois Industrial Project Revenue:
6,495,000 Southwick & Weglarz Project 4.80 07/07/95 6,495,000
2,637,500 Weglarz & Taxman Project 4.80 07/07/95 2,637,500
1,886,000 Weglarz Project 4.80 07/07/95 1,886,000
4,300,000 Springfield, Illinois Airport Authority -- Allied-Signal, Inc. Project 4.90 07/07/95 4,300,000
-----------
52,063,500
IOWA 0.9%*
1,455,000 Cedar Rapids, Iowa IDR Refunding MMars First Program -- Columbus McKinnon
Corporation Project 4.55 07/07/95 1,455,000
3,800,000 Iowa Falls, Iowa IDR Refunding -- GENPAK Corporation Project 4.48 07/07/95 3,800,000
6,700,000 West Des Moines, Iowa Revenue -- Woodgrain Millwork, Inc. Project 4.45 07/07/95 6,700,000
-----------
11,955,000
KANSAS 0.3%*
4,340,000 Lawrence, Kansas** CDR Bonds -- Kan/Del Hotel Investment Partners, L.P. Project 4.75 07/07/95 4,340,000
KENTUCKY 2.3%
7,200,000 Jeffersontown, Kentucky IDR -- Columbia Sussex Corporation Facility 5.00 07/07/95 7,200,000
Kentucky DFA IDR:
5,800,000 Hesco Project 4.40 07/07/95 5,800,000
1,500,000 Shelby Industries Project 4.40 07/07/95 1,500,000
4,500,000 Richmond, Kentucky IBR -- Mikron Project 4.55 07/07/95 4,500,000
10,000,000 Somerset, Kentucky IBR -- Tibbals Flooring Company Project 4.75 07/07/95 10,000,000
-----------
29,000,000
</TABLE>
See notes to financial statements.
14
<PAGE> 17
STRONG MUNICIPAL MONEY MARKET FUND (continued) June 30, 1995 (unaudited)
<TABLE>
<CAPTION>
PRINCIPAL YIELD TO MATURITY AMORTIZED
AMOUNT MATURITY DATE+ COST (NOTE 2)
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MAINE 0.2%*
$ 2,025,000 Orrington, Maine Resource Recovery Revenue -- Penobscot Energy
Recovery Company Project 5.13% 07/07/95 $ 2,025,000
MARYLAND 1.0%*
4,300,000 Charles County, Maryland Revenue -- Chopp and Company, Inc. Facility 4.50 07/07/95 4,300,000
3,270,000 Maryland CDA Department of Housing and Community Development
Multi-Family Development Revenue -- Middle Branch Manor Project 4.40 07/07/95 3,270,000
5,100,000 Washington County, Maryland EDR -- Tandy Project 4.80 07/07/95 5,100,000
----------
12,670,000
MASSACHUSETTS 1.2%*
2,410,000 Massachusetts Health and Educational Facilities Authority Revenue --
Community Health Center Capital Fund Issue 4.50 07/07/95 2,410,000
Massachusetts Industrial Finance Agency IDR:
4,400,000 Lightolier, Inc. Project 4.55 07/07/95 4,400,000
2,600,000 Portland Causeway Realty Trust 4.48 07/07/95 2,600,000
6,500,000 Salem, Massachusetts IDFA IDR -- Applied Extrusion Technologies, Inc.
Project 4.48 07/07/95 6,500,000
----------
15,910,000
MICHIGAN 0.3%*
1,400,000 Lansing, Michigan Limited Obligation EDC IDR -- Ashland Oil, Inc.
Project 5.76 07/07/95 1,400,000
1,300,000 Livonia, Michigan EDC -- Limited Obligation Revenue -- Livonia Luxury
Suites, Ltd. Project 4.65 07/07/95 1,300,000
1,740,000 Michigan Job Development Authority IDR -- Anthony A.
Petrarca/Cedarwood Construction Company, Inc. Project 5.00 07/07/95 1,740,000
----------
4,440,000
MINNESOTA 1.6%*
5,265,000 Mahtomedi, Minnesota Rental Housing Revenue -- Briarcliff of
Mahtomedi Project 5.67 07/07/95 5,265,000
8,240,000 Maplewood, Minnesota Rental Housing Revenue -- Carefree Cottages
of Maplewood III Project 5.67 07/07/95 8,240,000
2,000,000 Princeton, Minnesota IDR -- Plastic Products Company, Inc. Project 4.55 07/07/95 2,000,000
5,410,000 Vadnais Heights, Minnesota Rental Housing Revenue -- Cottages of
Vadnais Heights Project 5.67 07/07/95 5,410,000
----------
20,915,000
MISSISSIPPI 1.1%*
4,800,000 Mississippi Business Finance Corporation IDR -- Intex Plastics
Corporation Project 4.40 07/07/95 4,800,000
Prentiss County, Mississippi IDR -- Heidelberg Eastern Project:
2,500,000 Series A 4.30 07/07/95 2,500,000
6,650,000 Series B 4.40 07/07/95 6,650,000
----------
13,950,000
MISSOURI 2.4%*
4,900,000 Kansas City, Missouri IDA IDR -- Century Avenue Association Project 4.00 07/07/95 4,900,000
25,000,000 St. Charles County, Missouri IDA IDR Refunding -- Country Club
Apartments Project 4.70 07/07/95 25,000,000
1,300,000 St. Louis County, Missouri IDA -- Hampton Inn Westport Associates
Project 4.40 07/07/95 1,300,000
----------
31,200,000
NEBRASKA 0.5%*
6,005,000 Nebraska Investment Finance Authority Revenue Refunding -- Redick
Tower Project 5.05 07/07/95 6,005,000
NEVADA 0.4%*
4,650,000 Nevada State Department of Commerce IDR -- Dura-Bond Project 4.40 07/07/95 4,650,000
NEW HAMPSHIRE 1.4%*
13,100,000 New Hampshire HFA MFHR -- P. R. A. Properties Limited Partnership --
Pheasant Run Project 4.85 07/07/95 13,100,000
5,000,000 New Hampshire IDA Industrial Facility Revenue -- Ferrofluidics
Corporation -- Nashua Series Project 5.00 07/07/95 5,000,000
----------
18,100,000
NEW JERSEY 0.6%*
2,150,000 New Jersey EDA EDR -- Hickory Industries, Inc. Project 4.80 07/07/95 2,150,000
4,900,000 New Jersey EDA IDR -- Union Avenue Associates Project 4.05 07/07/95 4,900,000
----------
7,050,000
</TABLE>
See notes to financial statements.
15
<PAGE> 18
SCHEDULE OF INVESTMENTS IN SECURITIES (continued) June 30, 1995 (Unaudited)
STRONG MUNICIPAL MONEY MARKET FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL YIELD TO MATURITY AMORTIZED
AMOUNT MATURITY DATE+ COST (NOTE 2)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NEW YORK 0.2%*
$ 2,500,000 Albany, New York IDA IDR -- Historic Redevelopment Associates Project 4.75% 07/07/95 $ 2,500,000
NORTH CAROLINA 0.3%*
4,500,000 Gaston County, North Carolina Industrial Facilities and Pollution Control
Financing Authority IDR -- Spring-Ford Knitting Company, Inc. Project 4.50 07/07/95 4,500,000
OHIO 0.9%*
4,000,000 Cuyahoga County, Ohio IDR -- Motch Corporation Project 4.55 07/07/95 4,000,000
3,500,000 Gallia County, Ohio IDR -- Harsco Corporation Project 4.45 07/07/95 3,500,000
4,000,000 Kent, Ohio IDR -- Ravens Metal Products, Inc. Project 4.65 07/07/95 4,000,000
----------
11,500,000
OREGON 0.5%*
6,400,000 Oregon EDR -- Eagle-Picher Industries, Inc. Project 4.85 07/07/95 6,400,000
PENNSYLVANIA 2.2%*
2,445,000 Bucks County, Pennsylvania IDA -- Double H Plastics, Inc. Project 4.65 07/07/95 2,445,000
16,000,000 Elk County, Pennsylvania IDA Solid Waste Disposal Revenue -- Willamette
Industries, Inc. Project 4.60 07/07/95 16,000,000
4,000,000 Lycoming County, Pennsylvania IDA Manufacturing Facilities Revenue -- Coastal
Aluminum Rolling Mills, Inc. Project 4.65 07/07/95 4,000,000
5,000,000 Montgomery County, Pennsylvania IDA IDR Refunding -- Spring City Limited
Partnership Project 4.80 07/07/95 5,000,000
----------
27,445,000
SOUTH CAROLINA 1.6%*
1,000,000 Charleston County, South Carolina Industrial Revenue -- Tandy Corporation Project 5.40 07/07/95 1,000,000
1,400,000 Richland County, South Carolina IDR -- Ashland Oil Project 5.76 07/07/95 1,400,000
7,500,000 Rock Hill, South Carolina Industrial Revenue -- Willamette Industries, Inc. Project 4.65 07/07/95 7,500,000
5,000,000 South Carolina Jobs EDA IDR -- Roller Bearing Company of America, Inc. Project 4.60 07/07/95 5,000,000
6,000,000 York County, South Carolina IDR -- Sediver, Inc. Project 4.40 07/07/95 6,000,000
----------
20,900,000
SOUTH DAKOTA 0.3%*
430,000 Aberdeen, South Dakota IDR -- Lomar Development Company Project 4.90 07/07/95 430,000
2,200,000 Brookings, South Dakota IDR -- Lomar Development Company Project 4.70 07/07/95 2,200,000
775,000 Brookings, South Dakota IDR Refunding -- Lomar Development Company Project 4.80 07/07/95 775,000
----------
3,405,000
TEXAS 4.9%*
5,000,000 Austin County, Texas IDC IDR -- Gulf States Toyota, Inc. Project 4.92 07/07/95 5,000,000
3,000,000 Azle, Texas IDA IDR -- Tandy Corporation Project 4.77 07/07/95 3,000,000
4,700,000 Deer Park, Texas Port Development Corporation IDR 5.76 07/07/95 4,700,000
9,160,351 Fairfax Coutny, Virginia LaSalle National Bank LeaseTOPS Trust 4.60 07/07/95 9,160,351
2,800,000 Longview, Texas Industrial Corporation IDR -- Longview Guest Inn Project 4.60 07/07/95 2,800,000
17,400,000 Midlothian, Texas IDC PCR -- Box-Crow Cement Company Project 4.85 07/07/95 17,400,000
5,015,000 NCNB Pooled Tax-Exempt Trust COP -- Texas 4.50 07/07/95 5,015,000
2,000,000 Robstown, Texas IDC IDR -- Concrete Pipe and Products Company, Inc. Project 4.65 07/07/95 2,000,000
8,690,000 Texas Department of Housing and Community Affairs MFHR -- Colorado Club Development 4.75 07/07/95 8,690,000
4,090,000 Texas Small Business IDC IDR -- Moulding Products, Inc. Project 4.95 07/07/95 4,090,000
----------
61,855,351
WASHINGTON 1.1%*
3,000,000 King County, Washington Economic Enterprise Corporation Revenue -- Mackie
Holdings, L.L.C. Project 4.45 07/07/95 3,000,000
2,800,000 Pierce County, Washington EDC -- Brown & Haley Project 5.36 07/07/95 2,800,000
4,200,000 Port Moses Lake, Washington Public Corporation Industrial Revenue -- Basic
American Foods Project 4.35 07/07/95 4,200,000
3,600,000 Yakima County, Washington Public Corporation Revenue -- Printing Press Project 4.55 07/07/95 3,600,000
----------
13,600,000
</TABLE>
See notes to financial statements.
16
<PAGE> 19
STRONG MUNICIPAL MONEY MARKET FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL YIELD TO MATURITY AMORTIZED
AMOUNT MATURITY DATE+ COST (NOTE 2)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
WISCONSIN 2.1%*
$ 2,300,000 Amery, Wisconsin IDR -- Plastech Corporation Project 4.62% 07/07/95 $ 2,300,000
2,380,000 Ashwaubenon, Wisconsin IDR -- Pioneer Metal Finishing, Inc. Project 4.70 07/07/95 2,380,000
2,000,000 Columbus, Wisconsin IDR -- Maysteel Corporation Project 4.75 07/07/95 2,000,000
8,320,000 Madison, Wisconsin IDR -- Manchester Place Project 4.80 07/07/95 8,320,000
3,000,000 Menomonee Falls, Wisconsin IDR -- Maysteel Corporation Project 4.75 07/07/95 3,000,000
8,495,000 Milwaukee, Wisconsin Redevelopment Authority Development Revenue -- Washington
Square Phase III Project 4.70 07/07/95 8,495,000
--------------
26,495,000
WYOMING 0.4%*
1,900,000 Lincoln County, Wyoming PCR -- Champlin Petroleum Company Project 4.05 07/07/95 1,900,000
2,790,000 Uinta County, Wyoming PCR -- Champlin Petroleum Company Project 4.05 07/07/95 2,790,000
--------------
4,690,000
--------------
Total Weekly Variable Rate Put Bonds 655,231,851
DAILY VARIABLE RATE PUT BONDS 1.9%*
CALIFORNIA 0.6%*
4,600,000 Irvine, California Apartment Development Revenue -- San Rafael Apartments Project 5.00 07/03/95 4,600,000
3,500,000 Orange County, California Sanitation Districts COP -- Capital Improvements Program 4.50 07/03/95 3,500,000
--------------
8,100,000
GEORGIA 0.7%*
9,350,000 Peachtree City, Georgia Development Authority Revenue -- FORMTEC, Inc. Project 4.80 07/03/95 9,350,000
OKLAHOMA 0.6%*
6,985,000 Oklahoma Housing Finance Agency GNMA Collateralized SFMR 4.60 07/03/95 6,985,000
--------------
Total Daily Variable Rate Put Bonds 24,435,000
--------------
TOTAL INVESTMENTS IN SECURITIES 100.7%* 1,281,324,336
Other Assets and Liabilities, Net (0.7%*) (8,445,116)
--------------
NET ASSETS 100.0%* $1,272,879,220
==============
</TABLE>
See notes to financial statements.
17
<PAGE> 20
SCHEDULE OF INVESTMENTS IN SECURITIES (continued) June 30, 1995 (Unaudited)
STRONG SHORT-TERM MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 2)
--------------------------------------------------------------------------------
<S> <C>
MUNICIPAL BONDS 96.4%*
ALABAMA 1.5%*
$1,000,000 Eufaula, Alabama IDB IDR -- Aladan Corporation
Project, 5.25%, Due 9/01/98+ $ 976,250
1,190,000 Loxley, Alabama IDB IDR -- Alabama Gin
Company Project, 5.00%, Due 6/01/02 1,170,662
-----------
2,146,912
ALASKA 0.7%*
1,000,000 Alaska Student Loan Corporation Student Loan
Revenue, 6.00%, Due 7/01/07 997,500
ARIZONA 2.6%*
Mohave County, Arizona IDA Hospital System
Revenue Refunding -- Medical Environments, Inc.
and Phoenix Baptist Hospital Medical Center, Inc.:
1,470,000 5.20%, Due 7/01/97 1,468,162
1,595,000 5.50%, Due 7/01/98 1,589,019
675,000 Phoenix, Arizona IDA Hospital Revenue -- John C.
Lincoln Hospital and Health Center Project,
4.65%, Due 12/01/99 658,125
-----------
3,715,306
CALIFORNIA 10.4%*
1,000,000 Madera, California Public Financing Authority --
Madera Municipal Golf Course Refinancing
Project, 4.30%, Due 8/01/96+ 986,250
Orange County, California Refunding Recovery:
1,500,000 5.60%, Due 6/01/07 1,460,325
6,750,000 5.75%, Due 6/01/15 6,269,063
6,000,000 Orange County, California Special Financing
Authority -- Teeter Plan Revenue, 6.15%,
Due 11/01/99+ 5,977,500
-----------
14,693,138
COLORADO 8.7%*
7,000,000 Colorado Student Obligation Bond Authority
Student Loan Asset-Backed Senior
Subordinated, 6.20%, Due 12/01/08 6,921,250
5,145,000 Denver, Colorado City and County Airport
System Revenue, 6.55%, Due 11/15/03 5,280,056
-----------
12,201,306
DISTRICT OF COLUMBIA 7.3%*
6,315,000 District of Columbia GO Refunding, 5.30%,
Due 6/01/04 6,228,169
2,925,000 District of Columbia Hospital Revenue
Refunding -- Medlantic Healthcare Group, Inc.,
6.50%, Due 8/15/02 2,921,344
1,100,000 District of Columbia Hospital Revenue Refunding --
Washington Hospital Center, 6.50%, Due 8/15/96 1,108,250
-----------
10,257,763
GUAM 7.3%*
4,000,000 Guam Airport Authority General Revenue, 6.40%,
Due 10/01/05 4,045,000
6,270,000 Guam Government GO, 5.70%, Due 9/01/03 6,183,787
-----------
10,228,787
ILLINOIS 5.1%*
$ 945,000 Collinsville, Illinois Madison County IDR
Refunding, Drury Inn -- Collinsville Project,
5.25%, Due 11/01/98 $ 935,550
1,000,000 Cook County, Illinois Community College
District No. 508 COP, 8.75%, Due 1/01/06 1,252,500
Illinois Educational Facilities Authority Revenue --
Lewis University Project:
1,100,000 4.50%, Due 10/01/99 1,068,375
1,390,000 5.30%, Due 10/01/04 1,323,975
1,000,000 Illinois Health Facilities Authority Revenue --
Fairview Obligated Group Project, 8.25%,
Due 10/01/99 1,032,500
1,400,000 Peoria, Illinois Peoria County IDR Refunding --
Pere Marquette Hotel Associates Project, 5.375%,
Due 12/01/98 1,424,500
215,000 Quincy, Illinois Adams County SFMR Refunding,
4.25%, Due 9/01/99 214,731
-----------
7,252,131
INDIANA 0.8%*
1,000,000 Fort Wayne, Indiana Hospital Authority Revenue --
Parkview Memorial Hospital, Inc. Project, 7.50%,
Due 11/15/11 1,081,250
IOWA 2.0%*
2,865,000 Iowa Finance Authority Mortgage Revenue
Refunding -- Friendship Village Project, 4.95%,
Due 11/01/00 2,811,281
LOUISIANA 3.3%*
1,400,000 Louisiana Public Facilities Authority Revenue --
Louisiana Association of Independent Colleges
and Universities Facilities Loan Program, 5.20%,
Due 12/01/97 1,387,750
525,000 Louisiana Public Facilities Authority Student Loan
Revenue, 6.75%, Due 9/01/06 551,250
2,500,000 New Orleans, Louisiana Public Improvement,
8.125%, Due 10/01/03 2,765,625
-----------
4,704,625
MICHIGAN 9.6%*
Detroit, Michigan Self-Insurance Limited Tax GO:
3,790,000 5.70%, Due 5/01/02 3,747,363
1,085,000 5.75%, Due 5/01/03 1,066,012
Greater Detroit, Michigan Resource Recovery
Authority Resource Recovery Revenue:
1,300,000 Series C, 9.25%, Due 12/13/08 1,355,250
6,750,000 Series D, 9.25%, Due 12/13/08 7,036,875
250,000 Series G, 9.25%, Due 12/13/08 260,625
-----------
13,466,125
MISSISSIPPI 0.7%*
995,000 Prentiss County, Mississippi Hospital Revenue,
5.40%, Due 12/01/97 1,001,219
MISSOURI 0.7%*
1,000,000 St. Louis, Missouri Regional Convention and Sports
Complex Authority Convention and Sports Facility
Project and Refunding, 5.50%, Due 8/15/07 948,750
</TABLE>
See notes to financial statements.
18
<PAGE> 21
STRONG SHORT-TERM MUNICIPAL BOND FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 2)
--------------------------------------------------------------------------------
<S> <C>
NEBRASKA 2.7%*
$ 3,810,000 Nebraska IFA Multi-family Loan Revenue --
Park Drive Apartments Project, 4.75%,
Due 6/01/97+ $ 3,800,475
NEW JERSEY 1.5%*
New Jersey Health Care Facilities Financing
Authority Health System Revenue -- St. Mary
Hospital Issue:
1,030,000 4.125%, Due 7/01/96 1,024,850
1,120,000 4.625%, Due 7/01/98 1,100,400
------------
2,125,250
NEW YORK 3.1%*
4,335,000 Westchester, New York Industrial Development
Agency Transportation Revenue Refunding --
AGR Realty Company Project, 5.75%,
Due 1/01/02 4,373,842
OREGON 7.5%*
10,780,000 Hillsboro, Oregon Hospital Facility Authority
Revenue and Advance Refunding -- Tuality
Healthcare Project, 4.80%, Due 10/01/00 10,564,400
PENNSYLVANIA 3.2%*
Delaware County, Pennsylvania Health Facilities
Authority Revenue -- Mercy Health Corporation
of Southeastern Pennsylvania Obligated Group:
2,000,000 4.875%, Due 11/15/97 1,967,500
2,000,000 5.125%, Due 11/15/98 1,967,500
640,000 Philadelphia, Pennsylvania Hospitals and Higher
Education Facilities Authority Revenue --
Graduate Health System Obligated Group,
5.75%, Due 7/01/02 620,800
------------
4,555,800
TENNESSEE 1.3%*
1,860,000 Shelby County, Tennessee Health, Educational
and Housing Facility Board First Mortgage
Revenue Refunding -- Northlake Apartments
Project, 5.30%, Due 1/01/04 1,840,024
TEXAS 2.4%*
500,000 Austin, Texas Airport System Prior Lien Revenue,
7.35%, Due 11/15/20 524,375
2,145,000 Austin, Texas Water, Sewer and Electric
Refunding Revenue, 14.00%, Due 11/15/01 2,909,156
------------
3,433,531
UTAH 7.8%*
7,744,000 Carbon County, Utah Solid Waste Disposal
Refunding Revenue -- East Carbon Landfill
Project, 6.04%, Due 5/01/97 7,792,400
3,025,000 Utah School District Finance Cooperative
Revenue -- Capital Improvements Financing
Pool, 8.375%, Due 2/15/98+ 3,232,969
------------
11,025,369
VIRGINIA 1.5%*
2,000,000 Virginia Education Loan Authority Student Loan
Program Revenue, 6.625%, Due 9/01/03 2,065,000
WASHINGTON 4.7%*
$ 6,500,000 Washington Health Care Facilities Authority
Revenue -- Sisters of Providence, 5.375%,
Due 10/01/00 $ 6,646,250
------------
Total Municipal Bonds (Cost $136,328,881) 135,936,034
CASH EQUIVALENTS 2.9%*
SHORT-TERM MUNICIPAL BOND 2.2%*
MICHIGAN 2.2%*
3,000,000 Detroit, Michigan Distributable State Aid
GO -- 1992 Fiscal Stabilization Series, 5.375%,
Due 5/01/96 3,018,750
DAILY VARIABLE RATE PUT BOND 0.7%*
CALIFORNIA 0.7%*
1,000,000 Irvine Ranch, California Orange County Water
District COP -- Capital Improvements Project 1,000,000
------------
Total Cash Equivalents (Cost $3,968,140) 4,018,750
------------
TOTAL INVESTMENTS IN SECURITIES
(COST $140,297,021) 99.3%* 139,954,784
Other Assets and Liabilities, Net 0.7%* 1,006,101
------------
NET ASSETS 100.0%* $140,960,885
============
<CAPTION>
--------------------------------------------------------------------------------
STRONG INSURED MUNICIPAL BOND FUND
PRINCIPAL VALUE
AMOUNT (NOTE 2)
--------------------------------------------------------------------------------
MUNICIPAL BONDS 89.7%*
ALABAMA 4.8%*
$2,000,000 Birmingham, Alabama Special Care Facilities
Financing Authority, Baptist Medical Centers
Revenue -- Baptist Health Systems, Inc., 6.00%,
Due 11/15/24 $ 1,962,500
CALIFORNIA 6.7%*
1,345,000 California Health Facilities Financing Authority
Insured Hospital Revenue -- Scripps Health,
4.625%, Due 10/01/13 1,097,856
1,500,000 Contra Costa County, California MFHR, GNMA
Collateralized -- Crescent Park Apartments
Project, 7.80%, Due 6/20/34 1,648,125
------------
2,745,981
DISTRICT OF COLUMBIA 3.3%*
1,250,000 District of Columbia Hospital Revenue, National
Rehabilitation Hospital, Inc. -- Medlantic
Healthcare Group, 7.125%, Due 11/01/19 1,354,687
ILLINOIS 21.2%*
2,500,000 Chicago, Illinois GO, 5.125%, Due 1/01/22 2,175,000
2,000,000 Chicago, Illinois O'Hare International Airport
General Airport Second Lien Revenue
Refunding, 5.00%, Due 1/01/18 1,745,000
1,000,000 Cook County, Illinois Community College
District No. 508 COP, 8.75%, Due 1/01/06 1,252,500
1,500,000 Illinois Health Facilities Authority Revenue --
Northern Illinois Medical Center, 7.875%,
Due 9/01/14 1,608,750
2,000,000 Illinois State Toll Highway Authority Toll
Highway Priority Revenue, 5.75%, Due 1/01/17 1,900,000
------------
8,681,250
</TABLE>
See notes to financial statements.
19
<PAGE> 22
SCHEDULE OF INVESTMENTS IN SECURITIES (continued) June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
STRONG INSURED MUNICIPAL BOND FUND (continued)
PRINCIPAL VALUE
AMOUNT (NOTE 2)
------------------------------------------------------------------------------------
<S> <C>
INDIANA 7.4%*
$1,000,000 Fort Wayne, Indiana Hospital Authority
Revenue -- Parkview Memorial Hospital, Inc.
Project, 7.50%, Due 11/15/11 $ 1,081,250
1,500,000 St. Joseph County, Indiana Hospital Authority
Hospital Facility Revenue -- Memorial Hospital
of South Bend, 9.40%, Due 6/01/10 1,931,250
----------
3,012,500
IOWA 4.8%*
2,100,000 Iowa Finance Authority Hospital Facility
Revenue -- Allen Memorial Hospital, 5.60%,
Due 2/15/20 1,966,125
MASSACHUSETTS 14.0%*
4,750,000 Massachusetts Housing Finance Agency Housing
Project Revenue, 6.15%, Due 10/01/15 4,666,875
1,000,000 University of Massachusetts Building Authority
Project Revenue, 5.60%, Due 5/01/14 1,076,250
----------
5,743,125
MONTANA 2.6%*
1,000,000 Forsyth, Montana Rosebud County PCR
Refunding -- Puget Sound Power & Light
Company Colstrip Project, 7.25%, Due 8/01/21 1,085,000
NEVADA 4.2%*
2,000,000 Henderson, Nevada Insured Health Facility
Refunding Revenue -- Catholic Healthcare
West Project, 5.00%, Due 7/01/20 1,705,000
PENNSYLVANIA 9.2%*
2,000,000 Monroeville, Pennsylvania Allegheny County
Hospital Authority Hospital Revenue -- Forbes
Health System, 7.35%, Due 10/01/15 2,080,000
2,000,000 Pittsburgh, Pennsylvania Water and Sewer
Authority Water and Sewer System Revenue
Refunding, 4.75%, Due 9/01/16 1,687,500
----------
3,767,500
TEXAS 3.2%*
1,180,000 Corpus Christi, Texas Utility System Revenue,
5.20%, Due 7/15/15(w) 1,066,425
220,000 El Paso, Texas Property Finance Authority, Inc.
SFMR -- GNMA Mortgage-Backed, 8.70%,
Due 12/01/18 237,600
100,000 Southeast Texas HFC SFMR, Zero %, Due 9/01/11 19,000
----------
1,323,025
WASHINGTON 8.3%*
1,500,000 Municipality of Metropolitan Seattle, Washington
Sewer Refunding Revenue, 6.20%, Due 1/01/32 1,509,375
2,000,000 Washington Public Power Supply System
Nuclear Project No. 1 Refunding Revenue,
5.60%, Due 7/01/15 1,880,000
----------
3,389,375
----------
Total Municipal Bonds (Cost $36,483,053) 36,736,068
CASH EQUIVALENTS 8.0%*
SHORT-TERM MUNICIPAL BOND 0.2%*
TEXAS 0.2%*
$ 90,000 Austin, Texas HFC SFMR, Zero %, Due 12/01/95 $ 87,413
DAILY VARIABLE RATE PUT BONDS 7.8%*
LOUISIANA 2.7%*
1,100,000 Louisiana Recovery District Sales Tax 1,100,000
NEW YORK 2.4%*
1,000,000 New York, New York Municipal Water Finance
Authority Water and Sewer System Revenue 1,000,000
UTAH 2.7%*
1,100,000 Emery County, Utah PCR Refunding -- PacifiCorp
Projects 1,100,000
----------
Total Daily Variable Rate Put Bonds 3,200,000
----------
Total Cash Equivalents (Cost $3,287,310) 3,287,413
----------
TOTAL INVESTMENTS IN SECURITIES
(COST $39,770,363) 97.7%* 40,023,481
Other Assets and Liabilities, Net 2.3%* 948,802
----------
Net Assets 100.0%* $40,972,283
==========
STRONG MUNICIPAL BOND FUND
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 2)
------------------------------------------------------------------------------------
<S> <C>
MUNICIPAL BONDS 92.3%*
ALABAMA 1.0%*
$ 2,000,000 Birmingham, Alabama Special Care Facilities
Financing Authority -- Baptist Medical Centers
Revenue -- Baptist Health Systems, Inc., 6.00%,
Due 11/15/24 $ 1,962,500
1,085,000 Boaz, Alabama Elderly Housing Corporation
Mortgage Revenue Refunding -- FHA Insured
Mortgage Loan -- Meadowood Apartments
Section 8 Assisted Project, 6.60%, Due 7/01/23 1,093,137
---------
3,055,637
ALASKA 0.7%*
2,100,000 Alaska HFC Housing Development -- Stephens
Park Project, 7.00%, Due 12/01/21 2,147,250
CALIFORNIA 7.4%*
1,750,000 Anaheim, California Community Center
Authority, COP -- 1992 Convention Center
Financing Project, 5.50%, Due 8/01/14 1,601,215
4,000,000 California Housing Finance Agency Home
Mortgage Revenue, Zero %, Due 8/01/20 565,000
3,500,000 Contra Costa County, California MFHR, GNMA
Collateralized -- Crescent Park Apartments
Project, 7.80%, Due 6/20/34 3,845,625
10,000,000 Los Angeles, California Senior MFHR Refunding,
5.75%, Due 1/01/24 9,262,500
Orange County, California Refunding Recovery:
2,000,000 5.60%, Due 6/01/07 1,947,500
2,600,000 5.75%, Due 6/01/15 2,414,750
2,000,000 Orange County, California Special Financing
Authority, 6.15%, Due 11/01/99+ 1,992,500
---------
21,629,090
</TABLE>
See notes to financial statements.
20
<PAGE> 23
STRONG MUNICIPAL BOND FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 2)
<S> <C>
COLORADO 0.4%*
$ 1,000,000 Colorado Health Facilities Authority Hospital
Revenue -- PSL Healthcare System Project,
8.25%, Due 2/15/06 $ 1,036,250
DELAWARE 2.3%*
Delaware EDA Hospital Revenue -- Osteopathic
Hospital Association of Delaware/Riverside
Hospital:
1,915,000 6.00%, Due 1/01/03 1,812,069
2,695,000 6.50%, Due 1/01/08 2,486,137
2,760,000 6.75%, Due 1/01/13 2,539,200
-----------
6,837,406
DISTRICT OF COLUMBIA 7.3%*
District of Columbia Hospital Revenue --
National Rehabilitation Hospital, Inc. --
Medlantic Healthcare Group:
10,730,000 7.00%, Due 8/15/05 10,944,600
5,000,000 7.125%, Due 11/01/19 5,418,750
4,815,000 District of Columbia University Revenue -- The
Howard University Issue, 7.25%, Due 10/01/20 5,121,956
-----------
21,485,306
FLORIDA 1.1%*
1,675,000 Broward County, Florida Resource Recovery
Revenue -- Broward Waste Energy Company,
L.P. North Project, 7.95%, Due 12/01/08 1,825,750
1,365,000 Leon County, Florida HFA SFMR -- Multi-County
Program, 6.35%, Due 1/01/28 1,341,112
-----------
3,166,862
GEORGIA 2.7%*
Fulton County, Georgia Housing Authority
SFMR -- GNMA Mortgage-Backed Securities
Program:
2,000,000 6.55%, Due 3/01/18 1,995,000
2,100,000 6.60%, Due 3/01/28 2,102,625
4,000,000 Gainsville and Hall County, Georgia Revenue
Anticipation Certificates -- Northeast Georgia
Healthcare Project, 5.75%, Due 10/01/17 3,900,000
-----------
7,997,625
ILLINOIS 7.1%*
1,000,000 Chicago, Illinois GO, 5.25%, Due 1/01/18 888,750
1,500,000 Chicago, Illinois O'Hare International Airport
General Airport Second Lien Revenue
Refunding, 5.00%, Due 1/01/18 1,308,750
1,000,000 Cook County, Illinois Community College District
No. 508 COP, 8.75%, Due 1/01/06 1,252,500
6,000,000 Granite City, Illinois Hospital Revenue Refunding --
Saint Elizabeth Medical Center, 8.125%,
Due 6/01/08 6,172,500
700,000 Illinois Health Facilities Authority Revenue --
Community Hospital of Ottawa Project, 6.75%,
Due 8/15/14 686,000
3,000,000 Illinois Health Facilities Authority Revenue --
Fairview Obligated Group Project, 8.25%,
Due 10/01/99 3,097,500
$ 4,000,000 Illinois Health Facilities Authority Revenue --
Northern Illinois Medical Center, 7.875%,
Due 9/01/14 $ 4,290,000
2,500,000 Illinois Health Facilities Authority Revenue --
Rush-Presbyterian-St. Luke's Medical Center
Obligated Group, 5.25%, Due 11/15/13 2,253,125
1,000,000 Spring Creek, Illinois, HDC Mortgage Revenue
Refunding -- FHA Insured Mortgage Loan --
Spring Creek Towers Section 8 Assisted
Project, 6.45%, Due 7/01/22 1,001,250
-----------
20,950,375
INDIANA 3.8%*
Indiana Health Facility Financing Authority
Hospital Revenue -- Jackson County Schneck
Memorial Hospital Project:
1,000,000 7.50%, Due 2/15/12 1,020,000
7,790,000 7.50%, Due 2/15/22 7,897,112
1,690,000 St. Joseph County, Indiana Hospital Authority
Hospital Facility Revenue -- Memorial Hospital
of South Bend, 9.40%, Due 6/01/10 2,175,875
-----------
11,092,987
IOWA 3.5%*
1,750,000 Iowa Finance Authority MFHR Refunding --
GNMA Collateralized -- Windsor on the
River Project, 6.50%, Due 6/20/30 1,752,188
Ottumwa, Iowa Hospital Facility Revenue
Refunding and Improvement -- Ottumwa
Regional Health Center, Inc.:
5,855,000 6.00%, Due 10/01/10 5,298,775
3,580,000 6.00%, Due 10/01/18 3,128,025
-----------
10,178,988
LOUISIANA 1.2%*
1,868,763 Louisiana Public Facilities Authority SFMR,
8.45%, Due 12/01/12 1,992,569
1,565,000 Stone Vista, Louisiana Housing Corporation
Mortgage Revenue Refunding -- FHA Insured
Mortgage Loan -- Stone Vista Apartments
Section 8 Assisted Project, 6.05%, Due 1/01/22 1,504,356
-----------
3,496,925
MARYLAND 0.7%*
2,000,000 Frederick County, Maryland Economic
Development Mortgage Revenue Refunding --
FHA Insured Mortgage Loan -- Northhampton
Manor Issue, 6.65%, Due 8/01/24 2,007,500
MASSACHUSETTS 5.7%*
4,000,000 Massachusetts Health and Educational
Facilities Authority Revenue -- Saints Memorial
Medical Center, 5.50%, Due 10/01/02 3,540,000
9,100,000 Massachusetts Housing Finance Agency
Residential Development, 6.25%, Due 11/15/12 9,145,500
3,915,000 Massachusetts Industrial Finance Agency First
Mortgage Revenue -- Reeds Landing Project,
7.75%, Due 10/01/00 3,905,213
-----------
16,590,713
</TABLE>
See notes to financial statements.
21
<PAGE> 24
SCHEDULE OF INVESTMENTS IN SECURITIES (continued) June 30, 1995 (Unaudited)
STRONG MUNICIPAL BOND FUND (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 2)
--------------------------------------------------------------------------------
<S> <C>
MICHIGAN 0.7%*
$ 1,000,000 Greater Detroit, Michigan Resource Recovery
Authority, 9.25%, Due 12/13/08 $ 1,042,500
1,000,000 Michigan Hospital Finance Authority Hospital
Revenue Refunding -- Community Memorial
Hospital, Cheboygan, Michigan, 6.25%,
Due 4/01/10 916,250
------------
1,958,750
MISSISSIPPI 3.5%*
10,000,000 Jackson County, Mississippi PCR Refunding --
Gulf Power Company Project, 7.125%,
Due 4/01/21 10,325,000
NEVADA 0.7%*
2,000,000 Washoe County, Nevada Gas and Water Facilities
Refunding Revenue -- Sierra Pacific Power
Company Project, 5.90%, Due 6/01/23 1,945,000
NEW MEXICO 1.3%*
3,420,000 New Mexico Mortgage Finance Authority Single
Family Mortgage Program, 6.20%, Due 7/01/26 3,364,425
492,880 Santa Fe, New Mexico SFMR, 8.45%,
Due 12/01/11 526,766
------------
3,891,191
NORTH CAROLINA 4.1%*
1,740,000 North Carolina Eastern Municipal Power Agency
Power System Revenue Refunding, 7.25%,
Due 1/01/21 1,800,900
10,000,000 Raleigh-Durham, North Carolina Airport
Authority Special Facility Revenue -- American
Airlines, Inc. Project, 9.625%, Due 11/01/15 10,312,500
------------
12,113,400
OHIO 4.0%*
2,000,000 Cuyahoga County, Ohio Mortgage Revenue
Refunding -- GNMA Collateralized -- Harbor
Court Limited Partnership Project, 6.10%,
Due 11/20/16 1,945,000
1,925,000 Franklin County, Ohio Mortgage Revenue --
FHA Insured Mortgage Loan -- New Lincoln
Lodge Retirement Residence Project, 6.85%,
Due 2/01/35 1,970,719
2,000,000 Lorain County, Ohio Hospital Facilities Revenue
Refunding -- EMH Regional Medical Center
Project, 7.75%, Due 11/01/13 2,302,500
3,800,000 Medina County, Ohio Economic Development
MFHR -- Camelot Place, Ltd. Project, 8.375%,
Due 10/01/23 3,686,000
Springdale, Ohio Hospital Facilities First
Mortgage Revenue -- Southwestern Ohio
Seniors' Services, Inc.:
1,700,000 6.00%, Due 11/01/18 1,534,250
450,000 6.00%, Due 11/01/23 397,687
------------
11,836,156
OKLAHOMA 2.5%*
$ 3,905,000 Ponca City, Oklahoma Utility Authority Utility
System Revenue, 5.75%, Due 7/01/20 $ 3,690,225
3,295,000 Shawnee, Oklahoma Hospital Authority
Revenue -- MidAmerica HealthCare, Inc.,
8.00%, Due 4/01/04 3,566,838
------------
7,257,063
PENNSYLVANIA 2.7%*
6,000,000 Blair County, Pennsylvania Hospital Authority
First Mortgage Revenue, Mercy Hospital
Sublessee, 8.125%, Due 2/01/14 6,330,000
1,400,000 Monroeville Hospital Authority, Allegheny
County, Pennsylvania Hospital Revenue --
Forbes Health System, 7.35%, Due 10/01/15 1,456,000
------------
7,786,000
SOUTH CAROLINA 0.9%*
1,435,000 Kershaw County, South Carolina Hospital
Facilities Revenue Refunding -- Kershaw County
Memorial Hospital Project, 8.00%, Due 9/15/17 1,504,956
1,110,000 Piedmont, South Carolina Municipal Power
Agency Electric Revenue Refunding, 7.25%,
Due 1/01/22 1,143,300
------------
2,648,256
SOUTH DAKOTA 2.6%*
7,100,000 South Dakota Building Authority COP -- South
Dakota Building Authority Project, 7.50%,
Due 12/01/16 7,472,750
TEXAS 7.9%*
565,000 El Paso, Texas Property Finance Authority, Inc.
SFMR -- GNMA Mortgage-Backed,
8.70%, Due 12/01/18 610,200
Galveston County, Texas HFC MFMR
Refunding -- FHA Insured Mortgage Loan --
Friendswood Retirement Living Center Project:
2,280,000 6.20%, Due 10/01/21(w) 2,203,050
3,605,000 6.25%, Due 4/01/29(w) 3,474,319
5,000,000 Houston, Texas Senior Lien Hotel Occupancy Tax
Revenue Refunding, 5.50%, Due 7/01/15 4,668,750
10,000,000 North Central Texas Health Facilities
Development Corporation -- Tri-City Health
Centre, Inc. Project, 9.50%, Due 5/01/21 10,900,000
1,160,000 Ranger, Texas Housing Corporation MFMR
Refunding -- FHA Insured Mortgage Loan --
Ranger Apartments Project, 8.80%,
Due 3/01/24 1,286,150
------------
23,142,469
WASHINGTON 5.7%*
5,000,000 Washington Health Care Facilities Authority
Revenue -- Sisters of Providence, 6.25%,
Due 10/01/13 4,987,500
15,105,000 Washington Housing Finance Commission
SFMR -- GNMA and FNMA Mortgage-Backed
Securities Program, Zero %, Due 1/01/25 1,793,719
9,260,000 Washington Public Power Supply System
Nuclear Project No. 1 Refunding Revenue,
7.50%, Due 7/01/15 10,000,800
------------
16,782,019
</TABLE>
See notes to financial statements.
22
<PAGE> 25
STRONG MUNICIPAL BOND FUND (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 2)
--------------------------------------------------------------------------------
<S> <C>
WISCONSIN 7.0%*
Wisconsin HDA EDA Home Ownership Revenue:
$ 1,500,000 6.15%, Due 9/01/17 $ 1,466,250
19,705,000 6.30%, Due 3/01/26 19,187,744
-------------
20,653,994
WYOMING 3.8%*
Wyoming Community Development Authority
Housing Revenue:
2,000,000 6.10%, Due 12/01/14(w) 1,990,000
1,630,000 6.15%, Due 6/01/17(w) 1,621,850
5,000,000 6.30%, Due 12/01/26(w) 4,975,000
2,520,000 Wyoming Community Development Authority
SFMR, 6.10%, Due 6/01/33 2,409,750
-------------
10,996,600
-------------
Total Municipal Bonds (Cost $271,522,344) 270,481,562
CASH EQUIVALENTS 9.9%*
DAILY VARIABLE RATE PUT BONDS
ALASKA 1.0%*
3,000,000 Valdez, Alaska Marine Terminal Revenue --
Exxon Pipeline Company Project 3,000,000
COLORADO 0.0%*
5,000 Denver, Colorado City and County MFHR --
Ogden Residences Project 5,000
DISTRICT OF COLUMBIA 1.1%*
3,100,000 District of Columbia GO Refunding 3,100,000
ILLINOIS 4.3%*
12,600,000 Chicago, Illinois O'Hare International Airport
Special Facility Revenue -- American
Airlines, Inc. Project 12,600,000
NEW YORK 0.8%*
2,400,000 New York, New York GO 2,400,000
TEXAS 0.3%*
1,000,000 Southwest Higher Education Authority, Inc.
Higher Education Revenue Refunding --
Southern Methodist University Project 1,000,000
UTAH 2.4%*
6,900,000 Emery County, Utah PCR Refunding --
PacifiCorp Projects 6,900,000
-------------
Total Daily Variable Rate Put Bonds
(Cost $29,005,000) 29,005,000
-------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $300,527,344) 102.2%* 299,486,562
Other Assets and Liabilities, Net (2.2%*) (6,374,593)
-------------
NET ASSETS 100.0%* $293,111,969
=============
STRONG HIGH YIELD MUNICIPAL BOND FUND
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 2)
--------------------------------------------------------------------------------
<S> <C>
MUNICIPAL BONDS 91.1%*
ARKANSAS 0.5%*
$1,000,000 Saline County, Arkansas Hospital Revenue
Refunding, 6.00%, Due 9/01/19(w) $ 977,500
DELAWARE 0.2%*
435,000 Delaware EDA Hospital Revenue -- Osteopathic
Hospital Association of Delaware/Riverside
Hospital, 6.75%, Due 1/01/13 400,200
FLORIDA 6.4%* Brevard County, Florida Health Facilities
Authority Revenue Refunding -- Courtenay
Springs Village Project:
2,000,000 7.375%, Due 11/15/04 1,982,500
1,065,000 7.75%, Due 11/15/17 1,065,000
Hialeah Gardens, Florida IDR Refunding --
Waterford Convalescent Center Project:
1,000,000 7.875%, Due 12/01/07 990,000
1,000,000 8.25%, Due 12/01/14 1,008,750
725,000 Highlands County, Florida IDA First Mortgage
Health Care Revenue -- Church of All Faiths,
Inc. Project, 9.375%, Due 10/01/21 507,500
1,275,000 Homestead, Florida Industrial Revenue --
Community Rehabilitation Providers Program,
7.95%, Due 11/01/18 1,246,312
5,000,000 Orange County, Florida Health Facilities Authority
First Mortgage Revenue -- RHA/Princeton
Hospital, Inc. Project, 9.00%, Due 7/01/21 4,037,500
7,585,000 Polk County, Florida HFA Subordinated
Revenue -- Lake Wales Gardens Project,
Zero %, Due 4/01/20 900,719
-------------
11,738,281
GEORGIA 4.0%*
4,840,000 Atlanta, Georgia Urban Residential Finance
Authority MFHR -- Franciscan Club Apartments
Projects, 7.75%, Due 4/01/22 4,870,250
2,500,000 Atlanta, Georgia Urban Residential Finance
Authority Revenue -- Landrum Arms Project,
8.00%, Due 7/01/24 2,450,000
-------------
7,320,250
ILLINOIS 9.0%*
1,030,000 Granite City, Illinois Hospital Revenue
Refunding -- Saint Elizabeth Medical Center,
8.125%, Due 6/01/08 1,059,612
Illinois DFA Community Rehabilitation Providers
Facilities Acquisition Program Revenue:
1,095,000 7.25%, Due 3/01/04 1,070,362
3,070,000 7.50%, Due 3/01/14 2,954,875
9,460,000 Illinois DFA MFHR -- Town and Garden
Apartments Project, 7.20%, Due 9/01/08 9,341,750
1,880,000 Illinois HDA Residential Mortgage Revenue,
6.90%, Due 12/01/26 1,917,600
-------------
16,344,199
</TABLE>
See notes to financial statements.
23
<PAGE> 26
SCHEDULE OF INVESTMENTS IN SECURITIES (continued) June 30, 1995 (Unaudited)
STRONG HIGH-YIELD MUNICIPAL BOND FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 2)
-------------------------------------------------------------------------------
<S> <C>
INDIANA 0.9%*
$1,500,000 Wells County, Indiana Hospital Authority
Hospital Facility Revenue Refunding --
Caylor-Nickel Medical Center, Inc. Project,
8.75%, Due 4/15/12 $1,576,875
LOUISIANA 3.1%*
5,885,000 Louisiana Public Facilities Authority Senior
Lien Revenue -- Progressive Healthcare
Providers, Inc. Developmental Centers,
8.00%, Due 1/01/13 5,664,313
MASSACHUSETTS 5.5%*
Massachusetts Health and Educational Facilities
Authority Revenue -- Saints Memorial Medical
Center:
2,885,000 5.75%, Due 10/01/06 2,390,944
7,000,000 6.00%, Due 10/01/23 5,267,500
2,285,000 Massachusetts Industrial Finance Agency First
Mortgage Revenue -- Evanswood Bethzatha
Corporation Project, 7.875%, Due 1/15/20 2,319,275
----------
9,977,719
MICHIGAN 1.0%*
1,805,000 Michigan Hospital Finance Authority Hospital
Revenue and Refunding -- Detroit Osteopathic
Hospital Corporation, 7.50%, Due 11/01/10 1,766,644
NEW HAMPSHIRE 3.1%*
New Hampshire Higher Educational and Health
Facilities Authority First Mortgage Revenue --
Rivermead at Peterborough Project:
4,000,000 7.375%, Due 7/01/00 4,025,000
1,610,000 8.50%, Due 7/01/24 1,640,188
----------
5,665,188
NEW JERSEY 5.2%*
6,000,000 Mercer County, New Jersey Improvement
Authority Solid Waste Revenue -- Resource
Recovery Project, 6.80%, Due 4/01/05 5,925,000
3,375,000 New Jersey EDA First Mortgage Revenue --
Fellowship Village Project, 9.25%, Due 1/01/25 3,497,344
----------
9,422,344
NEW YORK 1.7%*
3,000,000 Orange County, New York Industrial Development
Agency Life Care Community Revenue -- The
Glen Arden, Inc. Project, 8.25%, Due 1/01/02 3,075,000
OHIO 1.7%*
1,595,000 East Liverpool, Ohio Hospital Improvement
Revenue -- East Liverpool City Hospital Project,
8.00%, Due 10/01/21 1,664,781
400,000 Medina County, Ohio Economic Development
MFHR -- Camelot Place, Ltd. Project, 8.375%,
Due 10/01/23 388,000
Springdale, Ohio Hospital Facilities First
Mortgage Revenue -- Southwestern Ohio
Seniors' Services, Inc.:
600,000 6.00%, Due 11/01/18 541,500
550,000 6.00%, Due 11/01/23 486,063
----------
3,080,344
OKLAHOMA 1.1%*
$2,055,000 Jackson County, Oklahoma Memorial Hospital
Authority Hospital Revenue Refunding --
Jackson County Memorial Hospital Project,
5.875%, Due 8/01/97 $2,003,625
PENNSYLVANIA 36.1%*
4,500,000 Beaver County, Pennsylvania IDA Collateralized
PCR -- The Cleveland Electric Illuminating
Company Beaver Valley Project, 10.50%,
Due 9/01/15 4,612,500
1,000,000 Beaver County, Pennsylvania IDA PCR -- The
Toledo Edison Company Beaver Valley Project,
10.75%, Due 11/15/15 1,032,500
Bucks County, Pennsylvania IDA CDR --
Attleboro Associates, Ltd. Nursing Facility
Project:
2,210,000 8.00%, Due 12/01/05 2,254,200
3,730,000 8.25%, Due 6/01/11 3,827,912
Delaware County, Pennsylvania Authority Health
Care Facility First Mortgage Revenue --
GF/Longwood Care, Inc. Project:
530,000 8.50%, Due 4/15/10 532,650
5,860,000 9.00%, Due 4/15/25 5,889,300
Delaware County, Pennsylvania IDA Revenue --
Martins Run Project:
1,000,000 5.40%, Due 12/15/01 972,500
1,500,000 6.00%, Due 12/15/06 1,449,375
800,000 Greenville Hospital Authority Mercer County,
Pennsylvania Hospital Gross Revenue, 6.375%,
Due 9/01/04 755,000
Horsham, Pennsylvania IDA CDA Health Care
Facilities Revenue -- GF/Pennsylvania
Properties, Inc. Project:
440,000 7.375%, Due 9/01/08 422,400
6,000,000 8.375%, Due 9/01/24 5,992,500
Montgomery County, Pennsylvania Higher
Education and Health Authority Hospital
Revenue -- United Hospitals, Inc. --
St. Christopher's Hospital for Children Project:
350,000 7.50%, Due 11/01/13 342,562
230,000 8.50%, Due 11/01/17 238,050
Montgomery County, Pennsylvania Higher
Education and Health Authority Hospital
Revenue -- United Hospitals, Inc. Project:
7,635,000 Series 1989A, 8.375%, Due 11/01/11 7,940,400
3,525,000 Series 1989B, 8.375%, Due 11/01/11 3,666,000
1,600,000 Montgomery County, Pennsylvania IDA Health
Care Facility First Mortgage Revenue --
AHF/Ambler, Inc. Project, 8.50%, Due 12/01/23 1,536,000
Montgomery County, Pennsylvania IDA
Retirement Community Revenue Refunding --
G. D. L. Farms Corporation Project:
2,000,000 6.30%, Due 1/01/13 1,725,000
4,660,000 6.50%, Due 1/01/20 3,984,300
6,840,000 Montgomery County, Pennsylvania IDA
Revenue -- Wordsworth Academy Project,
8.00%, Due 9/01/24 6,711,750
</TABLE>
See notes to financial statements.
24
<PAGE> 27
STRONG HIGH-YIELD MUNICIPAL BOND FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 2)
----------------------------------------------------------------------------------
<S> <C>
$2,260,000 Philadelphia, Pennsylvania Hospitals and Higher
Education Facilities Authority Hospital
Revenue -- Methodist Hospital Project, 9.00%,
Due 7/01/10 $ 2,341,925
Philadelphia, Pennsylvania Hospitals and Higher
Education Facilities Authority Hospital
Revenue -- Nazareth Hospital Project:
1,125,000 9.375%, Due 7/01/05 1,147,658
2,220,000 9.375%, Due 7/01/15 2,264,711
500,000 Ridley Park, Pennsylvania Hospital Authority of
Delaware County Hospital Revenue -- Taylor
Hospital, 6.125%, Due 12/01/20 416,250
5,655,000 Shenango Valley, Mercer County, Pennsylvania
Osteopathic Hospital Authority Hospital Gross
Revenue Refunding -- Shenango Valley
Medical Center Project, 7.875%, Due 4/01/10 5,704,481
------------
65,759,924
TEXAS 6.1%*
4,805,843 DeSoto, Texas IDA IDR -- Wintergreen
Commercial Partnership Project, 7.00%,
Due 1/01/17 4,523,500
Jefferson County, Texas Health Facilities
Development Corporation Hospital Revenue --
Baptist Health Care System Project:
4,000,000 8.30%, Due 10/01/14 4,055,000
2,435,000 8.875%, Due 6/01/21 2,544,575
------------
11,123,075
VIRGINIA 1.9%*
Norfolk, Virginia IDA IDR Mortgage Refunding --
Comfort Inn -- Norfolk Naval Station Project:
625,000 6.75%, Due 12/01/08 589,844
1,675,000 7.00%, Due 12/01/16 1,559,844
1,250,000 Virginia Education Loan Authority Student Loan
Program Revenue Refunding, 7.70%,
Due 3/01/99 1,310,937
------------
3,460,625
WASHINGTON 0.3%*
500,000 Washington Public Power Supply System
Nuclear Project No. 1 Refunding Revenue,
6.875%, Due 7/01/17 521,875
WISCONSIN 3.3%*
5,555,000 Brookfield, Wisconsin IDR Refunding -- Midway
Motor Lodge Project, 8.40%, Due 4/01/12 5,971,625
------------
Total Municipal Bonds (Cost $163,494,194) 165,849,606
CASH EQUIVALENTS 5.9%*
DAILY VARIABLE RATE PUT BONDS
NEW MEXICO 0.5%*
1,000,000 Farmington, New Mexico PCR -- Arizona Public
Service Company Four Corners Project 1,000,000
TEXAS 1.3%*
$ 2,300,000 Gulf Coast, Texas IDA Marine Terminal
Revenue -- Amoco Oil Company Project $ 2,300,000
VIRGINIA 3.6%*
King George County, Virginia IDA Exempt
Facility Revenue -- Birchwood Power
Partners, L.P. Project:
3,000,000 Series A 3,000,000
3,500,000 Series B 3,500,000
------------
6,500,000
WASHINGTON 0.5%*
1,000,000 Washington State Housing Finance Commission
MFMR -- Canyon Lakes II Project 1,000,000
------------
Total Daily Variable Rate Put Bonds
(Cost $10,800,000) 10,800,000
------------
Total Investments in Securities
(Cost $174,294,194) 97.0%* 176,649,606
Other Assets and Liabilities, Net 3.0%* 5,382,857
------------
Net Assets 100.0%* $182,032,463
============
</TABLE>
* Percentages are calculated as a percentage of net assets.
** Variable rate bonds.
+ Maturity date represents actual maturity, earliest put date
or pre-refunding date.
(w) When-Issued Security.
See notes to financial statements.
25
<PAGE> 28
STATEMENTS OF OPERATIONS
For the Six Months Ended June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
(In Thousands)
STRONG MUNICIPAL STRONG SHORT-TERM
MONEY MARKET FUND MUNICIPAL BOND FUND
----------------- -------------------
<S> <C> <C>
INTEREST INCOME $28,913 $4,206
EXPENSES:
Investment Advisory Fees 3,107 381
Custodian Fees 68 17
Shareholder Servicing Costs 436 97
Professional Fees 26 16
Reports to Shareholders 333 36
Federal and State Registration Fees 56 38
Other 42 18
------- ------
Total Expenses 4,068 603
------- ------
NET INVESTMENT INCOME 24,845 3,603
REALIZED AND UNREALIZED GAIN (LOSS):
Net Realized Gain (Loss) on:
Investments -- 1,691
Futures Contracts -- (3,216)
Change in Unrealized Appreciation/Depreciation on:
Investments -- 2,953
Futures Contracts -- (2,531)
------- ------
NET LOSS -- (1,103)
------- ------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $24,845 $2,500
======= ======
</TABLE>
<TABLE>
<CAPTION>
STRONG INSURED STRONG STRONG HIGH-YIELD
MUNICIPAL BOND FUND MUNICIPAL BOND FUND MUNICIPAL BOND FUND
------------------- ------------------- -------------------
<S> <C> <C> <C>
INTEREST INCOME $1,260 $ 9,386 $ 5,787
EXPENSES:
Investment Advisory Fees 110 900 452
Custodian Fees 5 20 9
Shareholder Servicing Costs 41 218 63
Professional Fees 11 20 9
Reports to Shareholders 14 70 22
Federal and State Registration Fees 20 32 48
Other 17 13 6
------ ------- -------
Total Expenses before Waivers and Absorptions by Advisor 218 1,273 609
Voluntary Expense Waivers and Absorptions by Advisor -- -- (609)
------ ------- -------
Expenses, Net 218 1,273 --
------ ------- -------
NET INVESTMENT INCOME 1,042 8,113 5,787
REALIZED AND UNREALIZED GAIN (LOSS):
Net Realized Gain (Loss) on:
Investments 2,479 15,123 703
Futures Contracts and Options (523) (6,028) (2,314)
Change in Unrealized Appreciation/Depreciation on:
Investments 116 727 7,234
Futures Contracts and Options (375) (2,496) (48)
------ ------- -------
NET GAIN 1,697 7,326 5,575
------ ------- -------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $2,739 $15,439 $11,362
====== ======= =======
</TABLE>
See notes to financial statements.
26
<PAGE> 29
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
(In Thousands, Except Per Share Amounts)
STRONG MUNICIPAL STRONG SHORT-TERM
MONEY MARKET FUND MUNICIPAL BOND FUND
------------------ -------------------
<S> <C> <C>
ASSETS:
Investments in Securities, at Value
(Cost of $1,281,324 and $140,297, respectively) $ 1,281,324 $ 139,955
Receivable from Brokers for Securities Sold 32,501 16,977
Interest Receivable 11,303 1,634
Other 510 97
----------- -----------
Total Assets 1,325,638 158,663
LIABILITIES:
Payable to Brokers for Securities Purchased 47,531 16,960
Dividends Payable 4,479 594
Accrued Operating Expenses and Other Liabilities 749 148
----------- -----------
Total Liabilities 52,759 17,702
----------- -----------
NET ASSETS $ 1,272,879 $ 140,961
=========== ===========
Capital Shares
Authorized 10,000,000 10,000,000
Outstanding 1,272,879 14,611
NET ASSET VALUE PER SHARE
$ 1.00 $ 9.65
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
STRONG INSURED STRONG STRONG HIGH-YIELD
MUNICIPAL BOND FUND MUNICIPAL BOND FUND MUNICIPAL BOND FUND
------------------- ------------------- -------------------
<S> <C> <C> <C>
ASSETS:
Investments in Securities, at Value
(Cost of $39,770, $300,527 and $174,294, respectively) $ 40,023 $299,487 $ 176,650
Receivable from Brokers for Securities Sold 3,931 10,005 3,228
Interest Receivable 746 4,557 4,115
Other 287 114 242
----------- -------- ----------
Total Assets 44,987 314,163 184,235
LIABILITIES:
Payable to Brokers for Securities Purchased 3,742 19,436 999
Dividends Payable 178 1,387 1,175
Accrued Operating Expenses and Other Liabilities 95 228 29
----------- -------- ----------
Total Liabilities 4,015 21,051 2,203
----------- -------- ----------
NET ASSETS $ 40,972 $293,112 $ 182,032
=========== ======== ==========
Capital Shares
Authorized 10,000,000 100,000 1,000,000
Outstanding 3,885 30,982 18,854
NET ASSET VALUE PER SHARE $ 10.55 $ 9.46 $ 9.66
=========== ======== ==========
</TABLE>
See notes to financial statements.
27
<PAGE> 30
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended June 30, 1995 (Unaudited) and the Year Ended
December 31, 1994
<TABLE>
<CAPTION>
(In Thousands)
STRONG MUNICIPAL STRONG SHORT-TERM
MONEY MARKET FUND MUNICIPAL BOND FUND
------------------------------ ------------------------------
JUNE 30, 1995 DEC. 31, 1994 JUNE 30, 1995 DEC. 31, 1994
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net Investment Income $ 24,845 $ 38,535 $ 3,603 $ 8,985
Net Realized Loss -- -- (1,525) (6,513)
Change in Unrealized Appreciation/Depreciation -- -- 422 (6,339)
---------- ---------- -------- --------
Increase (Decrease) in Net Assets Resulting from Operations 24,845 38,535 2,500 (3,867)
CAPITAL SHARE TRANSACTIONS 12,262 88,057 (19,179) (41,777)
DIVIDENDS PAID FROM:
Net Investment Income (24,845) (38,535) (3,603) (8,985)
Net Realized Gain on Investments -- -- -- (308)
---------- ---------- -------- --------
TOTAL INCREASE (DECREASE) IN NET ASSETS 12,262 88,057 (20,282) (54,937)
NET ASSETS:
Beginning of Period 1,260,617 1,172,560 161,243 216,180
---------- ---------- -------- --------
End of Period $1,272,879 $1,260,617 $140,961 $161,243
========== ========== ======== ========
</TABLE>
See notes to financial statements.
28
<PAGE> 31
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended June 30, 1995 (Unaudited) and the Year Ended
December 31, 1994
<TABLE>
<CAPTION>
(In Thousands)
STRONG INSURED STRONG
MUNICIPAL BOND FUND MUNICIPAL BOND FUND
------------------------------- ------------------------------
JUNE 30, 1995 DEC. 31, 1994 JUNE 30, 1995 DEC. 31, 1994
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net Investment Income $ 1,042 $ 2,529 $ 8,113 $ 19,953
Net Realized Gain (Loss) 1,956 (3,993) 9,095 (23,725)
Change in Unrealized Appreciation/Depreciation (259) (2,405) (1,769) (14,892)
------- -------- -------- --------
Increase (Decrease) in Net Assets Resulting from Operations 2,739 (3,869) 15,439 (18,664)
CAPITAL SHARE TRANSACTIONS (11,749) (3,791) 5,978 (80,486)
DIVIDENDS PAID FROM NET INVESTMENT INCOME (1,042) (2,529) (8,113) (19,953)
------- -------- -------- --------
TOTAL INCREASE (DECREASE) IN NET ASSETS (10,052) (10,189) 13,304 (119,103)
NET ASSETS:
Beginning of Period 51,024 61,213 279,808 398,911
------- -------- -------- --------
End of Period $40,972 $ 51,024 $293,112 $279,808
======= ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
STRONG HIGH-YIELD
MUNICIPAL BOND FUND
-------------------------------
JUNE 30, 1995 DEC. 31, 1994
------------- -------------
<S> <C> <C>
OPERATIONS:
Net Investment Income $ 5,787 $ 5,945
Net Realized Loss (1,611) (1,961)
Change in Unrealized Appreciation/Depreciation 7,186 (4,978)
-------- --------
Increase (Decrease) in Net Assets Resulting from Operations 11,362 (994)
CAPITAL SHARE TRANSACTIONS 68,902 93,661
DIVIDENDS PAID FROM:
Net Investment Income (5,787) (5,945)
Net Realized Gain on Investments -- (7)
-------- --------
TOTAL INCREASE IN NET ASSETS 74,477 86,715
NET ASSETS:
Beginning of Period 107,555 20,840
-------- --------
End of Period $182,032 $107,555
======== ========
</TABLE>
See notes to financial statements.
29
<PAGE> 32
NOTES TO FINANCIAL STATEMENTS
June 30, 1995 (Unaudited)
1. ORGANIZATION
The Strong Municipal Income Funds consist of Strong Municipal Money
Market Fund, Inc., Strong Short-Term Municipal Bond Fund, Inc., Strong
Insured Municipal Bond Fund, Inc., Strong Municipal Bond Fund, Inc. and
Strong High-Yield Municipal Bond Fund, Inc. The Funds are separately
incorporated, diversified, open-end management investment companies
registered with the Securities and Exchange Commission under the Investment
Company Act of 1940.
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 -- Investments in securities for which market
quotations are readily available are valued at fair value as determined
by a pricing service on the basis of the average of the most recent bid
and asked prices in the principal market (closing sales prices if the
principal market is an exchange) in which such securities are normally
traded as well as such factors as market transactions among
institutional investors and dealer quotations for similar securities.
Securities for which 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
Directors of the Funds. Debt securities which are purchased within 60
days of their stated maturity are valued at amortized cost, which
approximates current value.
Investments in Strong Municipal Money Market Fund are valued using the
amortized cost method (which approximates current value) whereby
investments purchased at a discount or premium are valued by amortizing
the difference between the original purchase price and maturity value of
the issue over the period to maturity.
(B) Federal Income and Excise Taxes and Distributions to Shareholders --
It is the Funds' policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to
distribute substantially all of their taxable income to their
shareholders in a manner which results in no tax cost to the Funds.
Therefore, no Federal income or excise tax provision is required.
(C) Realized Gains and Losses On Investment Transactions -- The Funds
determine the gain or loss realized on investment transactions by
comparing the identified cost of the security lot sold with the net
sales proceeds.
(D) Futures -- The Funds, except for Strong Municipal Money Market Fund,
may enter into futures contracts for any lawful purpose, including
hedging, risk management, or enhancing returns, but not for speculation.
Upon entering into a futures contract, the Funds deposit cash, U.S.
government securities or other liquid, high-grade debt obligations in a
segregated account with their custodians, in the name of the futures
broker through whom the transaction was effected, equal to the minimum
"initial margin" requirements of the applicable futures exchange.
Additionally, the Funds 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
by the Funds as unrealized gains or losses. When the contract is closed,
the Funds record a realized 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.
The use of futures contracts may involve, to varying degrees, elements
of market risk in excess of the amount recognized in the statement of
assets and liabilities. The successful use of futures contracts by the
Funds is dependent upon the ability of Strong Capital Management, Inc.
(the "Advisor") to correctly anticipate trends in the underlying assets
of the futures contracts. To the extent that the Funds are engaging in
futures contracts other than for hedging purposes, the Funds' successful
use of such transactions is more dependent upon the Advisor's ability to
correctly anticipate such trends, since losses in these transactions may
not be offset in gains in the Funds' portfolio or in lower purchase
prices for assets it intends to acquire. The Advisor's prediction of
trends in underlying assets may prove to be inaccurate, which could
result in substantial losses to the Funds. Hedging transactions are also
subject to risks. If the Advisor incorrectly anticipates trends in the
underlying asset, the Funds may be in a worse position than if no
hedging had occurred. In addition, there may be imperfect correlation
between the Fund's use of futures contracts and the assets being hedged.
Futures contracts open at June 30, 1995 were as follows:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACT VALUE DEPRECIATION
FUND COLLATERAL (PAR VALUE) CONTRACTS (IN THOUSANDS) EXPIRATION (IN THOUSANDS)
---- ---------------------- --------- -------------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Strong Short-Term Austin, Texas Airport System Prior Lien 350 U.S. Treasury ($39,736) Sept. 1995 ($2,853)
Municipal Bond Fund Revenue, 7.35% Bonds (Short)
$500,000 Due 11/15/20
Austin, Texas Water, Sewer and Electric
Refunding Revenue, 14.00%
$2,145,000 Due 11/15/01
Cook County, Illinois Community College
District No. 508 COP, 8.75%
$1,000,000 Due 1/01/06
</TABLE>
30
<PAGE> 33
<TABLE>
<CAPTION>
NOTES TO FINANCIAL STATEMENTS
June 30, 1995 (Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
UNREALIZED
CONTRACT VALUE DEPRECIATION
FUND COLLATERAL (PAR VALUE) CONTRACTS (IN THOUSANDS) EXPIRATION (IN THOUSANDS)
---- ---------------------- --------- -------------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Strong Insured University of Massachusetts Building 100 U.S. Treasury ($11,353) Sept. 1995 ($ 375)
Municipal Bond Fund Authority Project Revenue, 5.60% Bonds (Short)
$1,000,000 Due 5/01/14
Strong Municipal Chicago, Illinois GO, 5.25% 675 U.S. Treasury (76,634) Sept. 1995 (2,497)
Bond Fund $1,000,000 Due 1/01/18 Bonds (Short)
Strong High-Yield New Hampshire Higher Educational and 400 U.S. Treasury (45,413) Sept. 1995 (34)
Municipal Bond Fund Health Facilities Authority First Bonds (Short)
Mortgage
Revenue - Rivermead at Peterborough
Project, 8.50%
$1,610,000 Due 7/01/24
New Jersey EDA First Mortgage
Revenue - Fellowship Village
Project, 9.25%
$3,375,000 Due 1/01/25
</TABLE>
(E) Options -- The Funds, except for Strong Municipal Money Market
Fund, may engage in options transactions for any lawful purpose,
including hedging, risk management, or enhancing returns, but not for
speculation. The Funds, except for Strong Municipal Money Market Fund,
may purchase or write put and call options on securities, futures
contracts, indices, and foreign currency, and enter into closing
transactions with respect to such options to terminate an existing
position.
Premiums received by the Funds upon writing put or call options are
recorded in the Fund's statement of assets and liabilities as an asset
with a corresponding liability which is subsequently adjusted to the
current market value of the option. When an option that is written by the
Funds 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. The use of
written option contracts may involve elements of market risk in excess of
the amount recognized in the statement of assets and liabilities. The
contract value represents the Fund's involvement in these financial
transactions. When required by SEC guidelines, the Fund will set aside
permissible liquid assets in a segregated account to secure its potential
obligations under its written options positions.
The successful use of option contracts by the Funds is dependent upon
the ability of the Advisor to correctly anticipate trends in the
underlying assets of the option contracts. To the extent that the Funds
are engaging in option contracts other than for hedging purposes, the
Funds' successful use of such transactions is more dependent upon the
Advisor's ability to correctly anticipate such trends, since losses in
these transactions may not be offset in gains in the Funds' portfolio or
in lower purchase prices for assets it intends to acquire. The Advisor's
prediction of trends in underlying assets may prove to be inaccurate,
which could result in substantial losses to the Funds. Hedging
transactions are also subject to risks. If the Advisor incorrectly
anticipates trends in the underlying asset, the Funds may be in a worse
position than if no hedging had occurred. In addition, there may be
imperfect correlation between the Funds' use of option contracts and the
assets being hedged.
(F) When-Issued Securities -- The Funds may purchase securities on a
when-issued or delayed delivery basis. Although the payment and interest
terms of these securities are established at the time the purchaser
enters into the agreement, these securities may be delivered and paid for
at a future date, generally within 45 days. The Funds record purchases of
when-issued securities and reflect the values of such securities in
determining net asset value in the same manner as other portfolio
securities. The Funds segregate and maintain at all times permissible
liquid assets in an amount at least equal to the amount of outstanding
commitments for when-issued securities.
(G) Average Years to Maturity -- A Fund's average maturity is generally
based on the actual stated maturity date of a security. However, the
maturity date of a variable rate security is the next interest rate
adjustment date and for a debt security with a put or demand feature, the
next put or demand exercise date is considered its maturity. The maturity
of a mortgage-backed security is determined on an "expected life" basis.
Notwithstanding the foregoing, the use of futures contracts may impact
the effective maturity of a portfolio security and accordingly, the
calculated average years to maturity of a Fund's portfolio.
(H) Deferred Organizational Costs -- Costs incurred by Strong Short-Term
Municipal Bond Fund, Strong Insured Municipal Bond Fund and Strong
High-Yield Municipal Bond Fund in connection with their organization and
initial registration and public offering of shares have been deferred and
are being amortized to expense over a sixty-month period. These costs
were advanced by the Advisor and will be reimbursed by the Funds over a
period of not more than sixty months.
(I) Other -- Portfolio transactions are recorded on the trade date. Dividend
income and distributions to shareholders are recorded on the ex-dividend
date. Interest income is recorded on the accrual basis.
31
<PAGE> 34
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 1995 (Unaudited)
3. NET ASSETS
Net assets as of June 30, 1995 were as follows (in thousands):
<TABLE>
<CAPTION>
STRONG MUNICIPAL STRONG SHORT-TERM STRONG INSURED
MONEY MARKET FUND MUNICIPAL BOND FUND MUNICIPAL BOND FUND
----------------- ------------------- -------------------
<S> <C> <C> <C>
Capital Stock $1,272,879 $152,193 $43,208
Undistributed Net Realized Loss -- (8,037) (2,114)
Net Unrealized Depreciation -- (3,195) (122)
---------- -------- -------
Net Assets $1,272,879 $140,961 $40,972
========== ======== =======
</TABLE>
<TABLE>
<CAPTION>
STRONG STRONG HIGH-YIELD
MUNICIPAL BOND FUND MUNICIPAL BOND FUND
------------------- -------------------
<S> <C> <C>
Capital Stock $ 311,550 $183,282
Undistributed Net Realized Loss (14,901) (3,572)
Net Unrealized Appreciation (Depreciation) (3,537) 2,322
--------- --------
Net Assets $ 293,112 $182,032
========= ========
</TABLE>
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Funds for the six months ended June 30,
1995 and the year ended December 31, 1994 were as follows (in thousands):
<TABLE>
<CAPTION>
JUNE 30, 1995 DECEMBER 31, 1994
------------------- ----------------------
SHARES DOLLARS SHARES DOLLARS
------ ------- ------ -------
<S> <C> <C> <C> <C>
STRONG MUNICIPAL MONEY MARKET FUND
Shares Sold 1,347,717 $1,347,717 2,652,872 $2,652,872
Shares Issued in Reinvestment of Dividends 23,584 23,584 34,513 34,513
Shares Redeemed (1,359,039) (1,359,039) (2,599,328) (2,599,328)
---------- ---------- ---------- ----------
Net Increase 12,262 $ 12,262 88,057 $ 88,057
========== ========== ========== ==========
STRONG SHORT-TERM MUNICIPAL BOND FUND
Shares Sold 2,661 $ 26,037 14,809 $ 150,226
Shares Issued in Reinvestment of Dividends 324 3,166 799 8,049
Shares Redeemed (4,951) (48,382) (19,907) (200,052)
---------- ---------- ---------- ----------
Net Decrease (1,966) ($ 19,179) (4,299) ($ 41,777)
========== ========== ========== ==========
STRONG INSURED MUNICIPAL BOND FUND
Shares Sold 695 $ 7,329 3,835 $ 40,236
Shares Issued in Reinvestment of Dividends 73 765 179 1,922
Shares Redeemed (1,892) (19,843) (4,347) (45,949)
---------- ---------- ---------- ----------
Net Decrease (1,124) ($ 11,749) (333) ($ 3,791)
========== ========== ========== ==========
STRONG MUNICIPAL BOND FUND
Shares Sold 7,255 $ 68,836 17,346 $ 168,663
Shares Issued in Reinvestment of Dividends 672 6,379 1,675 16,211
Shares Redeemed (7,274) (69,237) (27,598) (265,360)
---------- ---------- ---------- ----------
Net Increase (Decrease) 653 $ 5,978 (8,577) ($ 80,486)
========== ========== ========== ==========
STRONG HIGH-YIELD MUNICIPAL BOND FUND
Shares Sold 12,801 $ 121,530 21,216 $ 205,563
Shares Issued in Reinvestment of Dividends 417 3,954 400 3,848
Shares Redeemed (5,936) (56,582) (12,107) (115,750)
---------- ---------- ---------- ----------
Net Increase 7,282 $ 68,902 9,509 $ 93,661
========== ========== ========== ==========
</TABLE>
32
<PAGE> 35
5. RELATED PARTY TRANSACTIONS
Strong Capital Management, Inc. (the "Advisor"), with whom certain
officers and directors of the Funds are affiliated, provides investment
advisory services and shareholder recordkeeping and related services to the
Funds. Investment advisory fees, which are established by terms of the
Advisory Agreements, are based on annualized rates of .50% of the average
daily net assets of the Strong Municipal Money Market Fund, Strong
Short-Term Municipal Bond Fund and Strong Insured Municipal Bond Fund, and
.60% of the average daily net assets of the Strong Municipal Bond Fund and
Strong High-Yield Municipal Bond Fund. Advisory fees are subject to
reimbursement by the Advisor if the Funds' operating expenses exceed
certain levels. Shareholder recordkeeping and related service fees are
based on contractually established rates for each open and closed
shareholder account. In addition, the Advisor is compensated for certain
other services related to costs incurred for reports to shareholders.
Certain information regarding these transactions, excluding the effects
of waivers and reimbursements for the six months ended June 30, 1995 is as
follows (in thousands):
<TABLE>
<CAPTION>
STRONG MUNICIPAL STRONG SHORT-TERM STRONG INSURED
MONEY MARKET FUND MUNICIPAL BOND FUND MUNICIPAL BOND FUND
----------------- ------------------- ------------------
<S> <C> <C> <C>
Payable to Advisor at June 30, 1995 $581 $106 $77
Other Shareholder Servicing Expenses Paid to Advisor 16 2 1
Unaffiliated Directors' Fees 12 2 1
</TABLE>
<TABLE>
<CAPTION>
STRONG STRONG HIGH-YIELD
MUNICIPAL BOND FUND MUNICIPAL BOND FUND
------------------- -------------------
<S> <C> <C>
Payable to Advisor at June 30, 1995 $162 $ 30
Other Shareholder Servicing Expenses Paid to Advisor 5 1
Unaffiliated Directors' Fees 3 2
</TABLE>
6. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of long-term securities during the six
months ended June 30, 1995 were as follows (in thousands):
<TABLE>
<CAPTION>
STRONG SHORT-TERM STRONG INSURED
MUNICIPAL BOND FUND MUNICIPAL BOND FUND
------------------- -------------------
<S> <C> <C>
Purchases $164,438 $ 90,479
Sales 189,756 95,655
</TABLE>
<TABLE>
<CAPTION>
STRONG STRONG HIGH-YIELD
MUNICIPAL BOND FUND MUNICIPAL BOND FUND
------------------- -------------------
<S> <C> <C>
Purchases $444,837 $134,150
Sales 419,103 78,391
</TABLE>
7. INCOME TAX INFORMATION
At June 30, 1995, the investment cost and gross unrealized appreciation
and depreciation on investments for Federal income tax purposes were as
follows (in thousands):
<TABLE>
<CAPTION>
STRONG SHORT-TERM STRONG INSURED
MUNICIPAL BOND FUND MUNICIPAL BOND FUND
------------------- -------------------
<S> <C> <C>
Aggregate Investment Cost $140,299 $ 39,770
Aggregate Unrealized:
Appreciation 623 331
Depreciation (967) (77)
--------- --------
($ 344) $ 254
========= ========
</TABLE>
<TABLE>
<CAPTION>
STRONG STRONG HIGH-YIELD
MUNICIPAL BOND FUND MUNICIPAL BOND FUND
------------------- -------------------
<S> <C> <C>
Aggregate Investment Cost $300,589 $174,330
Aggregate Unrealized:
Appreciation 2,344 3,271
Depreciation (3,447) (951)
--------- --------
($ 1,103) $ 2,320
========= ========
</TABLE>
33
<PAGE> 36
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 1995 (Unaudited)
8. ABBREVIATIONS
The following is a list of abbreviations that may be used in the Schedules
of Investments in Securities:
BAN -- Bond Anticipation Notes
CDA -- Commercial Development Authority
CDR -- Commercial Development Revenue
COP -- Certificates of Participation
DFA -- Development Finance Authority
EDA -- Economic Development Authority
EDC -- Economic Development Corporation
EDR -- Economic Development Revenue
GO -- General Obligation
HDA -- Housing Development Authority
HDC -- Housing Development Corporation
HFA -- Housing Finance Authority
HFC -- Housing Finance Corporation
IBA -- Industrial Building Authority
IBR -- Industrial Building Revenue
IDA -- Industrial Development Authority
IDB -- Industrial Development Board
IDC -- Industrial Development Corporation
IDR -- Industrial Development Revenue
IFA -- Investment Finance Authority
MFHR -- Multi-Family Housing Revenue
MFMR -- Multi-Family Mortgage Revenue
PCR -- Pollution Control Revenue
RAN -- Revenue Anticipation Notes
SFHR -- Single Family Housing Revenue
SFMR -- Single Family Mortgage Revenue
TAN -- Tax Anticipation Notes
TRAN -- Tax and Revenue Anticipation Notes
34
<PAGE> 37
9. ANNUAL MEETING
A shareholder meeting was held on April 13, 1995 in Milwaukee, Wisconsin.
Results of the shareholder vote, calculated as a percentage of the total shares
voted, are as follows:
<TABLE>
<CAPTION>
STRONG MUNICIPAL MONEY MARKET FUND STRONG SHORT-TERM MUNICIPAL BOND FUND
SHARES VOTED 748,300,293.860 SHARES VOTED 9,861,870.351
------------------------------------ ----------------------------------------
PROPOSALS AFFIRMATIVE WITHHOLD AFFIRMATIVE WITHHOLD
--------- ----------- -------- ----------- --------
<S> <C> <C> <C> <C>
1 Election of Directors
Richard S. Strong 95.15% 4.85% 96.51% 3.49%
John Dragisic 94.61 5.39 96.28 3.72
Marvin E. Nevins 94.85 5.15 96.42 3.58
Willie D. Davis 94.21 5.79 94.53 5.47
William F. Vogt 94.49 5.51 96.37 3.63
Stanley Kritzik 94.06 5.94 95.96 4.04
<CAPTION>
AFFIRMATIVE AGAINST ABSTAIN AFFIRMATIVE AGAINST ABSTAIN
----------- ------- ------- ----------- ------- -------
S><D <C> <C> <C> <C> <C> <C>
2 Ratify Selection of Auditors 93.37% 3.27% 3.36% 91.52% 3.67% 4.81%
3 Adopt Advisory Agreement 85.53 8.10 6.37 86.73 7.56 5.71
4 Adopt Revised Articles 84.05 10.07 5.88 85.86 8.81 5.33
5 Amend Investment Objective 82.24 11.97 5.79 84.71 9.62 5.67
6 Amend or Adopt a Fundamental
Investment Limitation Concerning:
6A Diversification 83.58 7.41 9.01 84.06 8.80 7.14
6B Concentration 84.45 6.50 9.05 84.69 8.17 7.14
6C Lending 81.45 9.55 9.00 83.13 9.72 7.15
6D Purchasing or Selling Real Estate 79.96 11.06 8.98 82.92 9.94 7.14
6E Borrowing 80.79 10.21 9.00 82.75 10.06 7.19
6F Underwriting Securities 82.62 8.41 8.97 83.84 9.09 7.07
6G Purchasing or Selling Financial
Commodities 78.59 12.43 8.98 80.19 12.67 7.14
6H Issuing Senior Securities 83.10 7.87 9.03 84.02 8.80 7.18
6I Municipal Structures N/A N/A N/A 85.06 7.85 7.09
6J Pooled Fund Structures 82.08 8.88 9.04 82.99 9.87 7.14
7 Eliminate a Fundamental Investment
Limitation Concerning:
7A Short Sales of Securities 77.98 9.88 12.14 78.79 11.93 9.28
7B Use of Margin 76.58 11.35 12.07 78.21 12.46 9.33
7C Illiquid and Restricted Securities 76.29 11.53 12.18 78.80 11.91 9.29
7D Purchase of Investment
Company Securities 79.54 8.32 12.14 79.98 9.34 10.68
7E Purchasing Securities of
Newly-Formed Issuers 79.45 8.40 12.15 80.70 8.57 10.73
7F Investing in Oil and Gas Interests 78.29 9.50 12.21 78.89 10.39 10.72
7G Pledging Assets 75.89 11.97 12.14 78.22 11.05 10.73
7H Securities Investments of
Directors and Officers 75.33 12.47 12.20 78.88 10.47 10.65
7I Warrants N/A N/A N/A N/A N/A N/A
7J Fund Portfolio Transactions
with Directors and Officers 74.52 13.29 12.19 78.34 10.94 10.72
7K Investing in Securities for the
Purpose of Management
or Control 76.07 11.70 12.23 79.67 9.65 10.68
7L Participating on a Joint Basis
in Any Trading Account 76.91 10.86 12.23 80.06 9.15 10.79
7M Option Transactions 75.59 12.28 12.13 N/A N/A N/A
7N Types of Investments that the
Money Fund May Purchase 76.18 11.74 12.08 N/A N/A N/A
7O When-Issued Securities 77.58 10.20 12.22 N/A N/A N/A
</TABLE>
35
<PAGE> 38
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 1995 (Unaudited)
9. ANNUAL MEETING (continued)
<TABLE>
<CAPTION>
STRONG INSURED MUNICIPAL BOND FUND STRONG MUNICIPAL BOND FUND
SHARES VOTED 2,421,486.063 SHARES VOTED 17,950,662.630
---------------------------------- ---------------------------
PROPOSALS AFFIRMATIVE WITHHOLD AFFIRMATIVE WITHHOLD
--------- ----------- -------- ----------- --------
<S> <C> <C> <C> <C>
1 Election of Directors
Richard S. Strong 96.32% 3.68% 97.78% 2.22%
John Dragisic 95.99 4.01 97.71 2.29
Marvin E. Nevins 95.68 4.32 97.12 2.88
Willie D. Davis 94.21 5.79 96.89 3.11
William F. Vogt 95.53 4.47 97.50 2.50
Stanley Kritzik 95.82 4.18 97.31 2.69
<CAPTION>
AFFIRMATIVE AGAINST ABSTAIN AFFIRMATIVE AGAINST ABSTAIN
---------- ------- ------- ----------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
2 Ratiffy Selection of Auditors 96.81% 0.72% 2.47% 96.20% 0.97% 2.83%
3 Adopt Advisory Agreement 89.08 5.03 5.89 91.95 3.34 4.71
4 Adopt Revised Articles 88.38 5.69 5.93 91.00 4.35 4.65
5 Amend Investment Objective 86.77 7.89 5.34 90.33 4.76 4.91
6 Amend or Adopt a Fundamental
Investment Limitation Concerning:
6A Diversification 88.42 4.03 7.55 88.92 4.05 7.03
6B Concentration 88.90 3.67 7.43 89.28 3.70 7.02
6C Lending 85.23 7.13 7.64 87.80 5.22 6.98
6D Purchasing or Selling Real Estate 85.40 7.25 7.35 86.03 7.03 6.94
6E Borrowing 84.70 7.88 7.42 87.02 6.02 6.96
6F Underwriting Securities 86.00 6.25 7.75 88.11 4.89 7.00
6G Purchasing or Selling Financial
Commodities 83.33 9.42 7.25 84.96 8.07 6.97
6H Issuing Senior Securities 87.36 5.24 7.40 88.80 4.22 6.98
6I Municipal Structures 87.83 4.42 7.75 N/A N/A N/A
6J Pooled Fund Structures 86.59 6.06 7.35 88.07 4.95 6.98
7 Eliminate a Fundamental Investment
Limitation Concerning:
7A Short Sales of Securities 83.00 7.36 9.64 83.87 5.74 10.39
7B Use of Margin 82.32 8.09 9.59 82.99 6.70 10.31
7C Illiquid and Restricted Securities 81.77 8.64 9.59 81.24 8.38 10.38
7D Purchase of Investment
Company Securities 84.25 6.02 9.73 83.50 6.08 10.42
7E Purchasing Securities of
Newly-Formed Issuers 84.59 5.72 9.69 84.95 4.64 10.41
7F Investing in Oil and Gas Interests 83.73 6.68 9.59 82.95 6.66 10.39
7G Pledging Assets 81.23 9.18 9.59 83.41 6.27 10.32
7H Securities Investments of
Directors and Officers 83.19 7.09 9.72 82.85 6.77 10.38
7I Warrants N/A N/A N/A 85.12 4.48 10.40
7J Fund Portfolio Transactions
with Directors and Officers 82.74 7.54 9.72 81.92 7.73 10.35
7K Investing in Securities for the
Purpose of Management
or Control 83.31 6.96 9.73 83.59 6.04 10.37
7L Participating on a Joint Basis
in Any Trading Account 84.29 5.98 9.73 83.84 5.77 10.39
</TABLE>
36
<PAGE> 39
9. ANNUAL MEETING (continued)
<TABLE>
<CAPTION>
STRONG HIGH-YIELD MUNICIPAL BOND FUND
SHARES VOTED 9,453,469.520
---------------------------------------------
PROPOSALS AFFIRMATIVE WITHHOLD
--------- ----------- --------
<S> <C> <C>
1 Election of Directors
Richard S. Strong 98.04% 1.96%
John Dragisic 97.99 2.01
Marvin E. Nevins 98.11 1.89
Willie D. Davis 96.98 3.02
William F. Vogt 97.71 2.29
Stanley Kritzik 97.53 2.47
<CAPTION>
AFFIRMATIVE AGAINST ABSTAIN
----------- ------- -------
<S> <C> <C> <C>
2 Ratify Selection of Auditors 93.51% 1.57% 4.92%
3 Adopt Advisory Agreement 89.47 3.55 6.98
4 Adopt Revised Articles 87.52 4.77 7.71
5 Amend Investment Objective 87.56 4.69 7.75
6 Amend or Adopt a Fundamental
Investment Limitation Concerning:
6A Diversification 86.13 5.20 8.67
6B Concentration 86.85 4.50 8.65
6C Lending 85.10 6.28 8.62
6D Purchasing or Selling Real Estate 83.82 7.76 8.42
6E Borrowing 84.17 7.14 8.69
6F Underwriting Securities 85.01 6.35 8.64
6G Purchasing or Selling Financial
Commodities 82.46 8.98 8.56
6H Issuing Senior Securities 84.71 6.66 8.63
6I Municipal Securities 87.28 4.07 8.65
6J Pooled Fund Structures 85.24 6.05 8.71
7 Eliminate a Fundamental Investment
Limitation Concerning:
7A Short Sales of Securities 82.09 8.94 8.97
7B Use of Margin 82.34 8.72 8.94
7C Illiquid and Restricted Securities N/A N/A N/A
7D Purchase of Investment
Company Securities 84.47 6.52 9.01
7E Purchasing Securities of
Newly-Formed Issuers N/A N/A N/A
7F Investing in Oil and Gas Interests N/A N/A N/A
7G Pledging Assets 81.62 9.41 8.97
7H Securities Investments of
Directors and Officers N/A N/A N/A
7I Futures and Options N/A N/A N/A
7J Fund Portfolio Transactions
with Directors and Officers 80.50 10.57 8.93
7K Investing in Securities for the
Purpose of Management
or Control N/A N/A N/A
7L Participating on a Joint Basis
in Any Trading Account 83.65 7.46 8.89
</TABLE>
37
<PAGE> 40
FINANCIAL HIGHLIGHTS
The following presents information relating to a share of capital stock of
each of the Funds, outstanding for the entire period.
STRONG MUNICIPAL MONEY MARKET FUND
<TABLE>
<CAPTION>
1995**** 1994 1993 1992 1991
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net Investment Income 0.02 0.03 0.02 0.03 0.05
Dividends from Net Investment Income*** (0.02) (0.03) (0.02) (0.03) (0.05)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Return +2.0% +2.9% +2.5% +3.4% +5.2%
Net Assets, End of Period (In Thousands) $1,272,879 $1,260,617 $1,172,560 $1,105,491 $ 782,482
Ratio of Expenses to Average Net Assets 0.7%* 0.6% 0.7% 0.7% 0.7%
Ratio of Expenses to Average Net Assets
Without Waivers 0.7%* 0.6% 0.7% 0.7% 0.7%
Ratio of Net Investment Income to
Average Net Assets 4.0%* 2.9% 2.5% 3.3% 5.0%
1990 1989 1988 1987 1986**
----------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net Investment Income 0.06 0.06 0.05 0.05 0.01
Dividends from Net Investment Income*** (0.06) (0.06) (0.05) (0.05) (0.01)
----------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== ========== ========== ========== ==========
Total Return +6.1% +6.1% +5.2% +4.7% +0.7%
Net Assets, End of Period (In Thousands) $ 218,205 $ 73,802 $ 77,465 $ 59,085 $ 2,401
Ratio of Expenses to Average Net Assets 0.8% 0.9% 0.8% 0.6% 0.5%*
Ratio of Expenses to Average Net Assets
Without Waivers 0.8% 0.9% 0.8% 1.0% 0.5%*
Ratio of Net Investment Income to
Average Net Assets 6.0% 5.9% 5.0% 4.7% 3.7%*
STRONG SHORT-TERM MUNICIPAL BOND FUND
1995**** 1994 1993 1992
--------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.73 $ 10.36 $ 10.20 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.23 0.45 0.44 0.48
Net Realized and Unrealized Gains
(Losses) on Investments (0.08) (0.62) 0.23 0.22
----------- ---------- ---------- -----------
TOTAL FROM INVESTMENT OPERATIONS 0.15 (0.17) 0.67 0.70
LESS DISTRIBUTIONS
Dividends From Net Investment Income*** (0.23) (0.45) (0.44) (0.48)
Distributions From Net Realized Gains -- (0.01) (0.07) (0.02)
----------- ---------- ---------- -----------
TOTAL DISTRIBUTIONS (0.23) (0.46) (0.51) (0.50)
----------- ---------- ---------- -----------
NET ASSET VALUE, END OF PERIOD $ 9.65 $ 9.73 $ 10.36 $ 10.20
=========== ========== ========== ===========
Total Return +1.5% -1.6% +6.8% +7.2%
Net Assets, End of Period (In Thousands) $ 140,961 $ 161,243 $ 216,180 $ 110,816
Ratio of Expenses to Average Net Assets 0.8%* 0.7% 0.6% 0.2%
Ratio of Expenses to Average Net Assets
Without Waivers and Absorptions 0.8%* 0.7% 0.7% 0.8%
Ratio of Net Investment Income to
Average Net Assets 4.7%* 4.5% 4.2% 4.9%
Portfolio Turnover Rate 121.1% 273.2% 141.5% 139.9%
</TABLE>
* Calculated on an annualized basis.
** Inception date is October 23, 1986 for Strong Municipal Money
Market Fund. Total return is not annualized.
*** Tax-exempt for regular Federal income tax purposes.
**** For the period ended June 30, 1995 (Unaudited). Total return and
portfolio turnover rate are not annualized.
38
<PAGE> 41
FINANCIAL HIGHLIGHTS (continued)
STRONG INSURED MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
1995**** 1994 1993 1992 1991**
-------- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.19 $ 11.46 $ 10.82 $ 10.28 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.25 0.54 0.56 0.62 0.06
Net Realized and Unrealized Gains
(Losses) on Investments 0.36 (1.27) 0.80 0.68 0.28
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 0.61 (0.73) 1.36 1.30 0.34
LESS DISTRIBUTIONS
Dividends From Net Investment Income*** (0.25) (0.54) (0.56) (0.62) (0.06)
Distributions From Net Realized Gains -- -- (0.16) (0.14) --
-------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (0.25) (0.54) (0.72) (0.76) (0.06)
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 10.55 $ 10.19 $ 11.46 $ 10.82 $ 10.28
======== ======== ======== ======== ========
Total Return +6.0% -6.5% +12.8% +13.1% +3.4%
Net Assets, End of Period (In Thousands) $ 40,972 $ 51,024 $ 61,213 $ 21,367 $ 1,308
Ratio of Expenses to Average Net Assets 1.0%* 1.0% 0.6% 0.2% 0.5%*
Ratio of Expenses to Average Net Assets
Without Waivers and Absorptions 1.0%* 1.0% 0.9% 1.1% 1.0%*
Ratio of Net Investment Income to
Average Net Assets 4.7%* 5.0% 4.9% 5.8% 5.6%*
Portfolio Turnover Rate 251.3% 411.1% 110.7% 289.6% 238.9%*
</TABLE>
<TABLE>
<CAPTION>
STRONG MUNICIPAL BOND FUND
1995**** 1994 1993 1992 1991
-------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.23 $ 10.25 $ 10.00 $ 9.76 $ 9.22
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.26 0.56 0.58 0.65 0.65
Net Realized and Unrealized Gains
(Losses) on Investments 0.23 (1.02) 0.57 0.50 0.54
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 0.49 (0.46) 1.15 1.15 1.19
LESS DISTRIBUTIONS
Dividends From Net
Investment Income*** (0.26) (0.56) (0.58) (0.65) (0.65)
Distributions From Net Realized Gains -- -- (0.32) (0.26) --
--------- --------- -------- --------- --------
TOTAL DISTRIBUTIONS (0.26) (0.56) (0.90) (0.91) (0.65)
--------- --------- -------- --------- --------
NET ASSET VALUE, END OF PERIOD $ 9.46 $ 9.23 $ 10.25 $ 10.00 $ 9.76
========= ========= ======== ========= =======
Total Return +5.3% -4.6% +11.8% +12.2% +13.4%
Net Assets, End of Period (In Thousands) $ 293,112 $ 279,808 $398,911 $ 289,751 $115,230
Ratio of Expenses to Average Net Assets 0.9%* 0.8% 0.7% 0.1% 0.1%
Ratio of Expenses to Average Net Assets
Without Waivers and Absorptions 0.9%* 0.8% 0.8% 0.9% 1.1%
Ratio of Net Investment Income to
Average Net Assets 5.4%* 5.8% 5.6% 6.4% 6.9%
Portfolio Turnover Rate 170.0% 311.0% 156.7% 324.0% 465.2%
<CAPTION>
1990 1989 1988 1987 1986**
------ ---- ---- ---- -------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.47 $ 9.35 $ 9.16 $ 10.01 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.66 0.52 0.49 0.67 0.12
Net Realized and Unrealized Gains
(Losses) on Investments (0.25) 0.12 0.19 (0.85) 0.01
-------- -------- -------- --------- --------
TOTAL FROM INVESTMENT OPERATIONS 0.41 0.64 0.68 (0.18) 0.13
LESS DISTRIBUTIONS
Dividends From Net
Investment Income*** (0.66) (0.52) (0.49) (0.67) (0.12)
Distributions From Net Realized Gains -- -- -- -- --
-------- -------- -------- --------- --------
TOTAL DISTRIBUTIONS (0.66) (0.52) (0.49) (0.67) (0.12)
-------- -------- -------- --------- --------
NET ASSET VALUE, END OF PERIOD $ 9.22 $ 9.47 $ 9.35 $ 9.16 $ 10.01
======== ======== ======== ========= ========
Total Return +4.6% +7.1% +7.6% -1.8% +1.3%
Net Assets, End of Period (In Thousands) $31,560 $ 18,735 $ 18,275 $ 19,070 $ 2,212
Ratio of Expenses to Average Net Assets 0.3% 1.7% 1.3% 1.0% 0.4%*
Ratio of Expenses to Average Net Assets
Without Waivers and Absorptions 1.5% 1.8% 1.4% 1.3% 1.0%*
Ratio of Net Investment Income to
Average Net Assets 7.2% 5.6% 5.3% 7.0% 6.4%*
Portfolio Turnover Rate 586.0% 243.3% 343.6% 284.0% 116.1%
</TABLE>
* Calculated on an annualized basis.
** Respective inception dates are November 25, 1991 for Strong Insured
Municipal Bond Fund and October 23, 1986 for Strong Municipal Bond Fund.
Total return is not annualized.
*** Tax-exempt for regular Federal income tax purposes.
**** For the period ended June 30, 1995 (Unaudited). Total return and
portfolio turnover rate are not annualized.
39
<PAGE> 42
FINANCIAL HIGHLIGHTS (continued)
STRONG HIGH-YIELD MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
1995**** 1994 1993**
-------- ---- ------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.29 $ 10.10 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.36 0.71 0.16
Net Realized and Unrealized Gains
(Losses) on Investments 0.37 (0.81) 0.10
-------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 0.73 (0.10) 0.26
LESS DISTRIBUTIONS
Dividends From Net Investment Income*** (0.36) (0.71) (0.16)
-------- -------- --------
TOTAL DISTRIBUTIONS (0.36) (0.71) (0.16)
-------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 9.66 $ 9.29 $ 10.10
======== ======== ========
Total Return +8.0% -1.0% +2.7%
Net Assets, End of Period (In Thousands) $182,032 $107,555 $ 20,840
Ratio of Expenses to Average Net Assets 0.0%* 0.0% 0.0%*
Ratio of Expenses to Average Net Assets
Without Waivers and Absorptions 0.8%* 0.8% 1.1%*
Ratio of Net Investment Income to
Average Net Assets 7.7%* 7.5% 6.8%*
Portfolio Turnover Rate 55.9% 198.1% 111.1%*
</TABLE>
* Calculated on an annualized basis.
** Inception date is October 1, 1993. Total return is not annualized.
*** Tax-exempt for regular Federal income tax purposes.
**** For the period ended June 30, 1995 (Unaudited). Total return and
portfolio turnover rate are not annualized.
40
<PAGE> 43
SHAREHOLDER PRIVILEGES*
TELEPHONE PURCHASE
Make additional investments into any Strong Fund by calling us toll-free at
1-800-368-3863.
TELEPHONE EXCHANGE
If your financial goals change, you can exchange your investments between any
of the Strong Funds.
TELEPHONE REDEMPTION
You can call toll-free to redeem your mutual fund shares at any time. Your
shares will be redeemed no later than the close of the next business day.
AUTOMATIC INVESTMENT PLAN
This plan allows you to set up regular transfers from your bank checking or NOW
account to your Strong Funds account.
PAYROLL DIRECT DEPOSIT PLAN
You can automatically transfer all or a portion of your net pay at each pay
period. This eliminates the delay of depositing paychecks to your bank and then
sending a check through the mail to Strong Funds.
AUTOMATIC EXCHANGE PLAN
This plan allows you to exchange money from one Strong Fund to another. For
example, you may want to set up automatic exchanges from a money market fund to
an equity fund.
For more information about these privileges, call us at 1-800-368-3863.
To reduce the volume of mail you receive, only one copy of certain materials,
such as prospectuses and shareholder reports, is mailed to your household.
Please call 1-800-368-3863 if you wish to receive additional copies, free of
charge.
*Each Fund reserves the right to terminate or modify any of these privileges.
<PAGE> 44
FOR LITERATURE AND INFORMATION REQUESTS.
CALL 1-800-368-1030.
TO DISCUSS AN EXISTING ACCOUNT OR
CONDUCT A TRANSACTION,
CALL 1-800-368-3863.
This report must be preceded or accompanied by the prospectus for
the Strong Municipal Income Funds.
[STRONG FUNDS LOGO]
STRONG FUNDS DISTRIBUTORS, INC.
P.O. Box 2936
Milwaukee, Wisconsin 53201
