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THE STRONG
CASH
MANAGEMENT Funds
SEMI-ANNUAL REPORT o AUGUST 31, 1996
[PHOTO OF CHILDREN]
[PIE CHART]
[BAR GRAPH]
Money Market Funds
THE STRONG HERITAGE MONEY FUND
THE STRONG MUNICIPAL MONEY MARKET FUND
Ultra-Short Bond Funds
THE STRONG MUNICIPAL ADVANTAGE FUND
THE STRONG ADVANTAGE FUND
[STRONG FUNDS LOGO]
STRONG FUNDS
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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.
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Have a plan.
[PICTURE OF FOLDER LABELED INVESTMENTS]
Even a simple plan can help you take control of your financial future. Review
your plan once a year, or if your circumstances change.
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Start investing as soon as possible.
[PICTURE OF CLOCK]
Make time a valuable ally. Let it put the power of compounding to work for you,
while helping to reduce your potential investment risk.
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Diversify your portfolio.
[PICTURE OF PIE CHART OF ASSET DIVERSIFICATION]
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.
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Invest regularly.
[PICTURE OF MEMO REMINDER TO INVEST]
Investing is a process, not a one-time event. By investing regularly over the
long term, you reduce the impact of short-term market gyrations, and you attend
to your long-term plan before you're tempted to spend those assets on short-term
needs.
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Maintain a long-term perspective.
[PICTURE OF GRAPH SLOPING UPWARD]
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.
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Consider stocks to help achieve major long-term goals.
[PICTURE OF PIE CHART OF ASSET DIVERSIFICATION EMPASIZING STOCKS]
Over time, stocks have provided the more powerful returns needed to help the
value of your investments stay well ahead of inflation.
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Keep a comfortable amount of cash in your portfolio.
[PICTURE OF DOLLAR SIGN]
To meet current needs, including emergencies, use a money market fund or a bank
account - not your long-term investment assets.
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Know what you're buying.
[PICTURE OF MAGNIFYING GLASS]
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.
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THE STRONG
CASH
MANAGEMENT Funds
SEMI-ANNUAL REPORT o AUGUST 31, 1996
Table of Contents
INVESTMENT REVIEWS
The Strong Heritage Money Fund................................2
The Strong Municipal Money Market Fund........................4
The Strong Municipal Advantage Fund...........................6
The Strong Advantage Fund.....................................8
FINANCIAL INFORMATION
Schedules of Investments in Securities
The Strong Heritage Money Fund..........................10
The Strong Municipal Money Market Fund..................13
The Strong Municipal Advantage Fund.....................21
The Strong Advantage Fund...............................24
Statements of Operations.....................................29
Statements of Assets and Liabilities.........................30
Statements of Changes in Net Assets..........................31
Notes to Financial Statements................................32
FINANCIAL HIGHLIGHTS................................................35
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The Strong HERITAGE MONEY Fund
================================================================================
The Strong Heritage Money Fund seeks current income, a stable share price, and
daily liquidity. The Fund invests in corporate, bank, and government instruments
that present minimal credit risk.
In addition, the Strong Heritage Money Fund is designed to provide a higher
yield over time than typical money funds. It seeks to do so by keeping costs
low. Investors must maintain higher account balances, enabling the Fund to
reduce costs through economies of scale. And, with certain exceptions, investors
are charged a fee on transactions that is paid back to the Fund, helping to
further defray costs.
YIELD SUMMARY(1)
as of 9-10-96
7-DAY CURRENT YIELD
5.61%
7-DAY EFFECTIVE YIELD
5.76%
AVERAGE MATURITY
as of 8-31-96
57 days
[PHOTO OF STATUE]
IMPRESSIVE PERFORMANCE CONTINUED
The Strong Heritage Money Fund continued to perform exceptionally well. For the
periods ended 8-31-96, the Fund ranked #1 since inception (6-30-95) and #2 for
the 1-year period, out of 281 and 287 money funds, respectively, by Lipper
Analytical Services, Inc., based on total return. The Fund was also ranked #1
for yield among the 223 general purpose money funds tracked by IBC's Money Fund
Report(TM), a service of IBC Financial Data Inc., for the 7 days ended
9-10-96.(1)
INTEREST RATES TAKE OFF
As 1996 began, the consensus economic view was for weak growth in the U.S.
economy. Gross domestic product estimates were being revised downward, and some
economists even projected a recession beginning in the first half of the year.
However, an unexpectedly strong employment report--indicating that a much larger
than anticipated number of jobs were created in February--shattered this
pessimistic view of the economy, and subsequent economic data tended to support
the idea that the economy was strengthening rather than weakening. As the
accompanying chart illustrates, the result was that interest rates--and
therefore yields--staged an abrupt reversal and headed
3-MONTH TREASURY BILL YIELDS HEADED HIGHER
3 Month T-bill Yields through 8-30-96
Source: Bloomberg
2-96 5.03%
3-96 5.14%
4-96 5.15%
5-96 5.18%
6-96 5.16%
7-96 5.31%
8-96 5.28%
2
<PAGE>
higher. Short-term rates (as measured by 3-month T-Bills) moved from 5.03% at
the end of February to 5.28% by the end of August, and this move was modest
compared to that of longer maturities.
OUR STRATEGY: TRIM THE SAILS SLIGHTLY
Although the market's view of the economy changed a great deal during the last
six months, our view changed little over this period. We never expected a
recession to occur this year, while the market swung from fear of a recession to
an equal fear of too-rapid growth. Thus, we needed to make only slight
calibrations, rather than major shifts, to keep the Fund performing well.
As March began, the Fund was positioned somewhat aggressively, with an average
maturity of 76 days. This enabled the Fund to lock in attractive yields for a
longer period of time as interest rates trended down through the first two
months of 1996. When interest rates reversed course in March, we began to
gradually shorten the Fund's maturity to a more neutral maturity (between 50 and
60 days, generally). Shortening the Fund's maturity helped to reduce the
negative impact of rising rates. We maintained this neutral maturity through the
end of August.
RATES MAY MOVE SLIGHTLY HIGHER NEAR-TERM
During recent months, the economy has continued to show sustained strength,
particularly in the form of lower unemployment and hints of accelerating wage
growth. As a result, there is a reasonable chance that the Federal Reserve will
raise short-term rates by 0.25%-0.50% before the year is out. In fact, the
market appears to have already priced in such a tightening by ratcheting up
short-term rates during July.
That said, from this point it is difficult to justify a sustained move in rates
in either direction, at least for the near term. In our view, the underlying
fundamentals of the U.S. bond market remain positive. We expect to see growth in
the gross domestic product near 2.5% this year, which we believe should pose no
threat to the current subdued level of inflation.
As always, we thank you for your confidence and remain committed to meeting your
investment needs in the future.
Cordially,
/s/ Jay N. Mueller
Jay N. Mueller
Portfolio Manager
[PHOTO OF JAY N. MUELLER]
1 Yields are annualized for the 7-day period ended 9-10-96. Due to an
accounting adjustment, the yields reported for the 7-day period ended
8-30-96 were less than the yield actually produced by the Fund. The yields
for the 7-day period ended 9-10-96 are a more accurate representation of
the Fund's true yield. Effective yields reflect the compounding of income.
Investments in the Fund are neither insured nor guaranteed by the U.S.
government. There can be no assurance that the Fund will be able to
maintain its stable net asset value of $1.00 per share. Yields and rankings
are historical and do not represent future results. Yields will fluctuate.
The Fund's Advisor temporarily waived 0.50% in management fees and absorbed
0.08% in expenses for the Fund. Otherwise, the Fund's current yield would
have been 5.03%, and its effective yield would have been 5.16%.
3
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The Strong MUNICIPAL MONEY MARKET Fund
================================================================================
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.
LIPPER RANKINGS
Based on total return through
the period ending 8-31-96(2)
................................................................................
1-year #1 of 133
................................................................................
3-year #1 of 108
................................................................................
5-year #1 of 91
................................................................................
Since inception #1 of 57
................................................................................
Please note that all rankings are historical
and do not represent future results.
THE TOP FUND IN ITS CATEGORY
The Fund has continued to provide shareholders with outstanding performance.
Based on total return through August 31, 1996, the Fund ranked #1 of all
tax-exempt money market funds tracked by Lipper Analytical Services, Inc. for
the 1-year, 3-year, 5-year, and since inception periods.(2)
The Fund also continues to provide investors with an attractive yield. As of
August 30, 1996, the Municipal Money Market Fund's 7-day current yield was 3.43%
and its 7-day effective yield--which reflects compounding--was 3.49%.(3) The
accompanying table shows the Fund's equivalent taxable yield for each of 1996's
federal income tax brackets.
ECONOMIC STRENGTH PROMPTS A RISE IN RATES
Most market watchers were caught off guard by rising interest rates during the
first quarter of 1996. The economic consensus coming into the year had been for
continued weak economic growth and low inflation. But, when data was released
(following a government shutdown), the economy appeared to be experiencing
stronger-than-expected growth. The announcement that a surprisingly large number
of new jobs were created in February added fuel to the forecasts for renewed
economic strength. In response, long-term rates moved up sharply; short-term
rates also rose, but not nearly as much.
Even though inflation remained under control, the market pushed yields higher
through the second quarter on fear that the Federal
Reserve Board would boost short-term interest rates in an effort to put a damper
on economic growth. While the market seemed to settle down in August, interest
rates remained significantly higher than they were at the beginning of the year.
OUR STRATEGY: AVOID THE "TEETER-TOTTER" EFFECT
If there was one factor that accounted for the Fund's solid performance during
the six-month period ended August 31, it was our waiting out the "teeter-totter"
effect. Often, when long-term interest rates rise, as they did in the first half
of 1996, investors seek a safe haven from falling long-term bond prices and a
volatile stock market. Of course, there are few safer havens than money market
funds. So assets will typically pour into money funds, which forces short-term
yields down due to strong demand for money market-type instruments. As a result,
you get a "teeter-totter" effect: long rates rise while short rates fall. It's
an illogical state of affairs, but also a predictable one.
This is what happened during the first half of the year. Our response was simply
to stop buying longer issues when yields fell below a certain level ("longer"
for us meaning 6-12 months). Our conviction was that, at some point, the
relationship between long-term rates and short-term rates would re-establish
itself,
YIELD SUMMARY(3)
as of 8-30-96
7-DAY CURRENT YIELD
3.43%
7-DAY EFFECTIVE YIELD
3.49%
AVERAGE MATURITY
59 days
4
<PAGE>
and short-rates would pop back up. This happened in late spring/early summer. As
a result, we weren't stuck with a substantial amount of low-yielding, 6-12 month
paper, and the Fund was able to maintain an attractive yield despite the
market's gyrations.
RATES LIKELY TO STAY IN A RANGE
Currently, there appears to be a growing consensus that the present rate of
economic growth is unsustainable, particularly if the Federal Reserve raises
short-term rates before year-end, as most market watchers expect. In fact, the
market has already priced in at least one Fed tightening. So from this point,
there seems little evidence to build a case that rates will move substantially
in one direction or another.
We continue to believe the environment for short-term municipals is very good,
and that the Fund will remain very competitive. Assets under management in the
Fund at the end of August were at an all-time high of $1.7 billion, which we
take as a vote of confidence by more and more shareholders.
We appreciate the opportunity to serve your investment needs, and we look
forward to helping you pursue your financial goals in the years to come.
Sincerely,
/s/ Steven D. Harrop
Steven D. Harrop
Portfolio Manager
[PHOTO OF STEVEN D. HARROP]
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EQUIVALENT TAXABLE YIELDS(3)
as of 8-30-96
YOUR TAX-EXEMPT
EFFECTIVE YIELD OF
3.43%
MARGINAL IS EQUIVALENT TO A
JOINT RETURN SINGLE RETURN TAX RATE TAXABLE YIELD OF:
================================================================================
$40,101- $24,001-
96,900 58,150 28% 4.76%
========================================================================
$96,901- $58,151-
147,700 121,300 31% 4.97%
========================================================================
$147,701- $121,301-
263,750 263,750 36% 5.36%
========================================================================
over over
$263,750 $263,750 39.6% 5.68%
========================================================================
The chart reflects 1996 marginal federal tax rates before limitations and
phase-outs. Individuals with adjusted gross income in excess of $117,950 should
consult their tax advisor to determine their actual 1996 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.
- --------------------------------------------------------------------------------
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 The since-inception ranking is based on performance from 10-31-86 to
8-30-96 for tax-exempt money market funds tracked by Lipper. From time to
time, the Fund's advisor has waived its management fee, which has resulted
in higher returns.
3 Yields are annualized for the 7 days ended 8-30-96, are historical, and
will vary. Effective yield assumes reinvested income.
5
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The Strong MUNICIPAL ADVANTAGE Fund
================================================================================
The Fund seeks federally tax-exempt current income with a very low degree of
share price fluctuation. The fund invests primarily in ultra short-term,
investment-grade municipal obligations, and maintains an average effective
portfolio maturity of one year or less.
AS OF 8-30-96
30-Day Yield(1)
4.93%
AVERAGE EFFECTIVE MATURITY(2)
0.8 year
AVERAGE CREDIT QUALITY(3)
AA
AMERICA'S FIRST
The Strong Municipal Advantage Fund is America's first ultra-short municipal
bond fund - the first to combine the benefits of ultra-short and municipal
investing. Because the Fund permits a low degree of share price fluctuation, it
can pursue higher returns than money funds, which seek to maintain a stable
share price. At the same time, it provides the added benefit of income exempt
from federal income taxes.
The Fund continues to provide investors with an attractive yield. As of August
30, 1996, the Strong Municipal Advantage Fund's 30-day current yield was
4.93%.(1) The following table shows the Fund's equivalent taxable yield for each
of 1996's federal income tax brackets.
A STRENGTHENING ECONOMY PROMPTS HIGHER RATES
Coming into the year, many investors and analysts had expected the slowing
economic growth that marked 1995 to continue into 1996. Some analysts even
predicted a recession beginning in the first half of the year, and the Federal
Reserve Board cut its discount rate to 5.00% in January, a continuation of the
easing trend it began the prior year.
The expectation for slow growth reversed course abruptly in February, however,
as news of stronger growth in the economy--in particular, an unexpectedly large
number of new jobs--led many to believe that the economy was entering a
sustained period of accelerating growth.
Consequently, interest rates rose--the yield on the 30-year U.S. Treasury bond
increased to 7.12% from 6.47% six months earlier, while the three-year Treasury
note increased 0.97% to close August at 6.51%. Short-term rates also rose,
though less dramatically. The yield on the one-year Treasury bill climbed 0.68%,
from 5.22% to 5.90%, over the same period.
THE MARKET'S TURBULENCE HELPED THE FUND GROW RAPIDLY
The gyrations that the market underwent from February through August drew
attention to the Municipal Advantage Fund. In such conditions, investors tend to
move from volatile long-term bond investments and fluctuating stocks into
shorter, less-volatile instruments. As a result, the Fund experienced strong
asset growth, rising from $138 million on March 1, 1996, to nearly $400 million
at the end of August.
- --------------------------------------------------------------------------------
EQUIVALENT TAXABLE YIELDS(1)
as of 8-30-96
YOUR TAX-EXEMPT
EFFECTIVE YIELD OF 4.93%
MARGINAL IS EQUIVALENT TO A
JOINT RETURN SINGLE RETURN TAX RATE TAXABLE YIELD OF:
================================================================================
$40,101- $24,001-
96,900 58,150 28% 6.85%
================================================================================
$96,901- $58,151-
147,700 121,300 31% 7.14%
================================================================================
$147,701- $121,301-
263,750 263,750 36% 7.70%
================================================================================
over over
$263,750 $263,750 39.6% 8.16%
- --------------------------------------------------------------------------------
The chart reflects 1996 marginal federal tax rates before limitations and
phase-outs. Individuals with adjusted gross income in excess of $117,950 should
consult their tax advisor to determine their actual 1996 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.
6
<PAGE>
Also benefiting the Fund was a decline in money fund yields, which was
precipitated by an onslaught of demand as investors migrated to "safe harbors."
As money fund yields declined, many investors looked for a way to help support
their income without taking on significantly more risk. The Strong Municipal
Advantage Fund provided them with such an option.
Our strategy during this time was to alter the fund from a "barbell"
strategy--i.e., concentrating assets in both very short-term and fairly
long-term instruments--to a "laddered" strategy of spreading assets more evenly
among varying maturities. This change enabled us to "fill in the barbell" with
intermediate-term securities (for us, "intermediate" meaning 1-3 years) that we
believed offered attractive value in the wake of investors' flight to safety.
FUNDAMENTALS IN THE MARKET APPEAR POSITIVE
Despite indications of stronger economic growth, inflation has remained subdued.
Moreover, we would expect any lingering worries of higher inflation to subside
if the Federal Reserve boosts the federal funds rate before year end, as most
market watchers expect. In fact, the market appears to have already priced in
such an event. Therefore, while rates may fluctuate in the near term, we don't
believe the fundamentals in the U.S. bond market presage a dramatic change.
Thank you for your investment in the Strong Municipal Advantage Fund. We
appreciate the opportunity to serve your investment needs, and remain committed
to providing you with top-quality investment results.
Sincerely,
/s/Steven D. Harrop
Steven D. Harrop
Portfolio Manager
[PHOTO OF STEVEN D. HARROP]
- --------------------------------------------------------------------------------
GROWTH OF AN ASSUMED $10,000 INVESTMENT TOTAL RETURN(4)
11-30-95 through 8-31-96 11-30-95 through 8-31-96
3.82%
The Strong Municipal Lehman Brothers
Advantage Fund 1-year Municipal Bond Index*
11-95 10,000 10,000
12-95 10,085 10,038
1-96 10,124 10,095
2-96 10,143 10,119
3-96 10,145 10,126
4-96 10,166 10,150
5-96 10,233 10,176
6-96 10,271 10,226
7-96 10,355 10,269
8-96 10,382 10,290
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 1-Year Municipal Bond Index. Results include the reinvestment of
all dividends and capital gains distributions. Performance is historical and
does not represent future results. Investment returns and principal value vary,
and you may have a gain or loss when you sell shares.
- --------------------------------------------------------------------------------
* The Lehman Brothers 1-year Municipal Bond Index is an unmanaged index
generally representative of the 1-year tax-exempt bond market. Source of
the index data is Micropal.
1 Yield is annualized for the 30 days ended 8-30-96, is historical, and will
vary. Since the Fund's inception, the Fund's advisor has waived its
management fee of 0.60% and absorbed Fund expenses of 0.11%. Otherwise,
current yield would have been 4.22% and returns would have been lower.
2 The Fund's average effective maturity includes the effects of futures
contracts, and anticipated calls.
3 For purposes of this average rating, the Fund's short-term debt obligations
have been assigned a long-term rating by the advisor.
4 Total return measures aggregate change in the value of an investment in the
Fund assuming reinvestment of dividends. Total return is not annualized.
7
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The Strong ADVANTAGE Fund
================================================================================
The Strong Advantage Fund seeks current income with a very low degree of
share-price fluctuation. The Fund invests primarily in ultra short-term,
investment-grade debt obligations, and its average effective portfolio maturity
will normally be one year or less.
THE FUND'S STRONG PERFORMANCE CONTINUED
The Strong Advantage Fund turned in solid performance for the six-month period
ended August 31, providing attractive returns versus both its ultra-short
competition and versus money market funds. Compared to its ultra short
obligation category, the Fund placed in the top quarter for the 1-year period,
and ranks #1 for the 5-year and since inception periods, ended August 31, 1996.
The Fund's total return for the six-month period was 2.97%, which compares
favorably with the 2.24% total return achieved by the average money market fund
as tracked by the Lipper Money Market Funds Index.(1) (Of course, unlike a money
fund, the Advantage Fund's share price will vary. The Fund also has a slightly
longer maturity and may invest in lower quality bonds than can money funds.)
[PHOTO OF ANCIENT RELICS]
LIPPER RANKINGS
Based on total return through
the period ending 8-31-96(2)
...........................................
1-year #5 of 26
...........................................
5-year #1 of 9
...........................................
Since inception #1 of 6
...........................................
Please note that all rankings are historical
and do not represent future results.
AS OF 8-30-96
ANNUALIZED 30-DAY YIELD(3)
6.31%
AVERAGE EFFECTIVE MATURITY(4)
0.40 years
AVERAGE CREDIT QUALITY(5)
A
RATES UP ON STRONGER ECONOMIC DATA
The six-month period ended August 31, 1996, was characterized by rising interest
rates, but less so at ultra-short maturities (6-12 months) than at longer
maturities. Going into February 1996, bond prices were riding high, reflecting
expectations for tepid economic growth, and optimistic projections for
everything from a balanced budget agreement to meaningful progress on a
potential "flat tax" package.
This euphoria abruptly reversed when February's employment report was
dramatically stronger than expected, indicating that the economy might be
growing faster than consensus expectations. This report, and subsequent data
which also suggested that the economy was strengthening, prompted investors to
anticipate rising interest rates, resulting in a sharp price correction,
particularly on longer-term bonds. This correction continued, in fits and
starts, through August.
OUR STRATEGY: STAY THE COURSE
The Fund's ultra-short maturity helped shield the Fund from the majority of the
market turbulence that followed in the wake of the first quarter's surprising
economic data. Also helpful was our emphasis on income generation, as
high-yielding, lower-quality bonds are typically less affected by interest rate
changes than their higher-quality counterparts.
As rates rose we were able to buy several corporate bonds from good companies
whose yields had been pushed up to fairly attractive levels.
ASSET ALLOCATION
Based on net assets as of 8-31-96
Corporate Bonds 63.1%
Non-Agency Mortgage & Asset-
Backed Securities 26.1%
U.S. Government &
Agency Issues 3.3%
Preferred Stock 1.3%
Short-Term Investments 6.2%
This allocation does not reflect any futures positions held by the Fund.
These purchases included what we like to call "cushion bonds," which are simply
bonds that are likely to be called back by the issuer in the near future.
Because they are actually long-maturity bonds, they offer fairly attractive
yields. But the fact that they will likely be paid off soon means they generally
trade like short-maturity bonds, which lowers their potential risk. Also, they
tend to be less closely followed than money market-type instruments, so you can
find some good values if you do your homework. This has started to become
particularly true lately, because of an increase in supply of these types of
bonds--many issued in 1991 with a 5-year call date are now coming onto the
market. Previously, these bonds had been in short supply, because few were
issued during the high-yield bond market's '89-'90 correction.
WE EXPECT RATES TO STAY IN A RANGE
While economic indicators continue to suggest modest economic growth, there
appears to be little evidence of pent-up demand or a ground swell of underlying
strength that could lead to higher inflation long-term. Therefore, we expect the
market to continue to focus on short-term data, leading to sharp ups and downs
within a fairly confined range.
8
<PAGE>
For us, such a choppy rate environment would likely prompt us to maintain a
neutral duration, and to look for value on an individual bond basis, focusing on
those bonds that offer an incremental yield advantage.
Regardless, the short-term nature of this Fund means it is less affected by rate
moves and economic trends than longer-term investments. In the ultra-short
market, it's active management and careful research that produce attractive
results. We believe our investment performance illustrates that we've been adept
at both.
Thank you for your investment in the Strong Advantage Fund. We appreciate your
continued confidence.
Sincerely,
/s/ Jeffrey A. Koch
Jeffrey A. Koch
Portfolio Manager
[PHOTO OF JEFFREY A. KOCH]
================================================================================
GROWTH OF AN ASSUMED $10,000 INVESTMENT AVERAGE ANNUAL
from 11-25-88 to 8-31-96 TOTAL RETURNS(1)
as of 8-31-96
Lipper Ultra
The Strong 1-Year Short Obligation 1-YEAR
Advantage Fund Treasury Bill* "Average"* 6.23%
11-88 10,026 10,003 10,008
12-89 11,052 11,049 11,003 3-YEAR
12-90 11,783 12,035 11,890 5.81%
12-91 13,036 13,087 12,776
12-92 14,134 13,720 13,306 5-YEAR
12-93 15,250 14,244 13,844 7.10%
12-94 15,792 14,620 14,285
12-95 16,978 15,803 15,225 SINCE INCEPTION
8-96 17,645 16,323 15,708 (on 11-25-88)
7.59%
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with a similar investment in the
Salomon Brothers 1-Year Treasury Benchmark-on-the-Run Index ("1-Year Treasury
Bill") and the Lipper Ultra Short Obligation "Average." Results include the
reinvestment of all dividends and capital gains distributions. Performance is
historical and does not represent future results. Investment returns and
principal value will vary, and you may have a gain or loss when you sell shares.
To equalize the time periods, the indices' performance was prorated for the
month of November, 1988.
================================================================================
* The Salomon Brothers 1-Year Treasury Benchmark-on-the-Run Index ("1-Year
Treasury Bill") is an unmanaged index generally representative of the
performance of a Treasury security with approximately one year to maturity.
The Lipper Ultra Short Obligation "Average" represents funds that invest at
least 65% of assets in investment grade debt issues, or better, and
maintains a portfolio dollar-weighted average maturity between 91 days and
365 days. Source of the Salomon index data is Micropal. Source of the
Lipper data is Lipper Analytical Services, Inc.
1 Average annual total return and total return measure change in the value of
an investment in the Fund, assuming reinvestment of all dividends. Average
annual total return reflects annualized change, while total return reflects
aggregate change. The Lipper Money Market Funds Index is an
equally-weighted performance index, adjusted for capital gains and
distributions and income dividends of the largest qualifying funds in this
Lipper category.
2 The since inception ranking is based on performance from 11-30-88 to
8-31-96 for ultra short obligation funds tracked by Lipper. From time to
time, the Fund's advisor has waived its management fee, which has resulted
in higher returns.
3 Yield is annualized for the 30 days ended 8-30-96, is historical and will
vary.
4 The Fund's average effective maturity includes the effect of futures and
options contracts, and anticipated calls.
5 For purposes of this average rating, the Fund's short-term debt obligations
have been assigned a long-term rating by the Advisor.
9
<PAGE>
<TABLE>
SCHEDULES OF INVESTMENTS IN SECURITIES August 31, 1996 (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
STRONG HERITAGE MONEY FUND
<CAPTION>
PRINCIPAL YIELD TO MATURITY AMORTIZED
AMOUNT MATURITY DATE (d) COST (NOTE 2)
(In Thousands)
- ------------------------------------------------------------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT 1.5%
<S> <C> <C> <C> <C>
Advanta National Bank $15,000 5.18% 2/07/97 $15,070
7,000 5.88 4/04/97 7,000
------
TOTAL CERTIFICATES OF DEPOSIT 22,070
COMMERCIAL PAPER 83.0%
Aetna Life & Casualty Company 43,700 5.50 9/05/96 43,687
25,000 5.53 10/02/96 24,889
Albion Capital Corporation:
(Acquired 6/27/96; Cost $14,787) (b) 15,000 5.55 10/01/96 14,935
(Acquired 7/11/96; Cost $19,713) (b) 20,000 5.61 10/11/96 19,881
American Honda Finance Corporation 16,000 5.50 9/19/96 15,961
16,200 5.40 9/26/96 16,144
Anaheim, California Electric System 11,000 5.61 11/01/96 11,000
Anchor Funding Corporation (Acquired 7/19/96; Cost $28,629) (b) 28,900 5.45 9/19/96 28,830
Asset Backed Capital Financial:
(Acquired 8/22/96; Cost $3,362) (b) 3,400 5.35 11/06/96 3,368
(Acquired 8/14/96; Cost $4,424) (b) 4,500 5.40 12/04/96 4,438
Atlas Funding Corporation 9,200 5.43 9/30/96 9,163
Avon Capital Corporation 6,800 5.46 9/19/96 6,784
Brazos River Authority, Texas PCR 9,425 5.55 9/17/96 9,425
Broadway Capital Corporation (Acquired 7/11/96; Cost $3,220) (b) 3,265 5.58 10/07/96 3,248
CSC Enterprises 26,500 5.50 9/06/96 26,488
8,000 5.48 10/17/96 7,947
Calcasieu Parish, Louisiana 15,000 5.50 10/23/96 15,000
Calcot, Ltd. 4,000 5.47 9/06/96 3,998
Cigna Corporation 9,800 5.45 11/04/96 9,708
14,000 5.41 11/22/96 13,832
Coca-Cola Enterprises, Inc. 13,500 5.36 11/14/96 13,355
Creative Capital Corporation:
(Acquired 8/27/96; Cost $7,314) (b) 7,400 5.45 11/12/96 7,322
(Acquired 8/16/96 - 8/20/96; Cost $11,129) (b) 11,280 5.44 11/14/96 11,157
Diamond Asset Funding Corporation 8,200 5.40 10/31/96 8,129
Dynamic Funding Corporation 7,000 5.63 9/13/96 6,989
2,000 5.49 9/18/96 1,995
5,500 5.60 9/25/96 5,481
10,512 5.60 9/30/96 10,468
4,000 5.60 10/07/96 3,979
11,500 5.50 10/15/96 11,426
10,000 5.61 10/31/96 9,910
6,435 5.44 11/07/96 6,372
8,500 5.45 12/11/96 8,373
EG & G, Inc. 5,000 5.38 9/17/96 4,990
Embarcadero Center-Venture Four 3,600 5.45 10/04/96 3,583
Finova Capital Corporation 3,000 5.42 9/03/96 3,000
27,300 5.50 9/12/96 27,262
10,000 5.44 9/19/96 9,976
15,000 5.55 9/23/96 14,954
5,000 5.51 10/09/96 4,972
7,000 5.40 10/16/96 6,955
3,000 5.37 11/20/96 2,965
First Data Corporation 15,000 5.53 10/08/96 14,919
10,825 5.50 10/16/96 10,754
8,100 5.50 10/18/96 8,044
GTE Finance Corporation 2,500 5.44 9/05/96 2,499
General Motors Acceptance Corporation 10,000 5.53 10/21/96 9,926
Gotham Funding Corporation (Acquired 8/15/96; Cost $15,687) (b) 15,800 5.40 10/02/96 15,731
Green Tree Financial Corporation 21,000 5.40 9/17/96 20,956
Heller Financial, Inc. 20,000 5.58 9/10/96 19,978
16,000 5.58 9/11/96 15,980
7,000 5.45 11/13/96 6,925
22,400 5.45 11/21/96 22,132
Heller International Corporation 5,000 5.52 11/20/96 4,940
5,000 5.55 11/25/96 4,936
Household International, Inc. 25,000 5.37 12/02/96 24,664
Iris Partners L.P. 4,265 5.60 10/21/96 4,233
Jet Funding Corporation 13,000 5.45 10/31/96 12,886
Johnson Controls, Inc. 202 5.05 Upon Demand 202
See notes to financial statements.
10
<PAGE>
- ------------------------------------------------------------------------------------------------------------------------------------
STRONG HERITAGE MONEY FUND (continued)
PRINCIPAL YIELD TO MATURITY AMORTIZED
AMOUNT MATURITY DATE (d) COST (NOTE 2)
(In Thousands)
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc. $17,000 5.55% 9/09/96 $ 16,984
25,000 5.53 10/01/96 24,892
8,600 5.54 10/10/96 8,551
Locap, Inc. (Acquired 7/12/96; Cost $6,560) (b) 6,623 5.50 9/12/96 6,614
Mercury Finance Corporation 2,000 5.63 9/06/96 1,999
16,000 5.56 9/10/96 15,983
16,500 5.52 9/12/96 16,477
11,000 5.55 9/24/96 10,964
6,000 5.56 10/03/96 5,972
3,000 5.47 10/08/96 2,984
5,000 5.47 10/15/96 4,968
6,000 5.48 11/18/96 5,931
6,000 5.48 11/19/96 5,930
4,000 5.45 11/25/96 3,950
Mitsubishi Motors Credit of America, Inc. 1,700 5.40 10/17/96 1,689
National Fuel Gas Company 5,000 5.42 12/06/96 4,929
New Hampshire State Business Finance Authority (Acquired 7/30/96; Cost $4,000) (b)4,000 5.48 10/04/96 4,000
New York GO 6,500 5.52 10/15/96 6,500
New York State Dormitory Authority 2,000 5.56 9/17/96 2,000
New York State Job Development Authority 7,700 5.55 11/05/96 7,700
12,990 5.51 11/19/96 12,990
6,675 5.55 11/20/96 6,675
15,980 5.51 11/21/96 15,980
Oakland-Alameda County, California Coliseum Authority 9,860 5.55 9/18/96 9,860
10,100 5.55 9/25/96 10,100
Oklahoma State IFA 3,000 5.70 11/01/96 3,000
Progress Funding Corporation 3,989 5.63 9/03/96 3,989
13,700 5.57 9/18/96 13,668
4,300 5.57 9/23/96 4,287
4,900 5.63 10/10/96 4,872
5,000 5.60 10/15/96 4,967
10,400 5.42 10/25/96 10,319
3,600 5.62 10/31/96 3,567
Ruby Asset Funding Corporation 5,000 5.50 10/11/96 4,971
Salomon, Inc. 25,000 5.52 9/11/96 24,969
2,400 5.46 11/18/96 2,372
8,600 5.48 11/19/96 8,499
13,000 5.50 11/26/96 12,833
San Diego, California IDR - San Diego Gas & Electric Company (Acquired 8/09/96 - 8/14/96;
Cost $10,915) (b) 10,915 5.50 11/08/96 10,915
Seiko Corporation of America 9,000 5.48 9/20/96 8,977
Society of the New York Hospital Fund, Inc. 9,724 5.48 9/17/96 9,703
1,100 5.48 10/24/96 1,091
Sotheby's, Inc. 5,000 5.38 9/09/96 4,996
7,000 5.38 9/23/96 6,979
Spintab AB 25,000 5.42 10/16/96 24,838
20,500 5.37 11/20/96 20,261
Stellar Capital Corporation:
(Acquired 7/17/96; Cost $11,090) (b) 11,195 5.51 9/16/96 11,173
(Acquired 8/19/96; Cost $12,178) (b) 12,300 5.40 10/24/96 12,206
Strategic Asset Funding Corporation 26,750 5.55 9/30/96 26,639
7,400 5.48 12/30/96 7,267
Sumitomo Bank Capital Markets, Inc. 20,000 5.55 9/13/96 19,969
10,000 5.47 10/07/96 9,948
10,000 5.63 10/29/96 9,912
Sumitomo Corporation of America 5,600 5.52 9/18/96 5,587
Sunshine State Governmental Finance 11,230 5.48 9/20/96 11,201
7,800 5.42 11/05/96 7,726
8,623 5.42 11/06/96 8,540
US WEST Capital Funding, Inc. 10,000 5.58 9/09/96 9,991
10,000 5.47 9/18/96 9,977
10,000 5.45 9/19/96 9,976
10,000 5.50 10/17/96 9,933
Union Pacific Resources Group, Inc. (Acquired 7/11/96; Cost $22,003) (b) 22,230 5.50 9/16/96 22,186
---------
TOTAL COMMERCIAL PAPER 1,268,970
See notes to financial statements.
11
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) August 31, 1996 (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
STRONG HERITAGE MONEY FUND (continued)
PRINCIPAL YIELD TO MATURITY AMORTIZED
AMOUNT MATURITY DATE (d) COST (NOTE 2)
(In Thousands)
- ------------------------------------------------------------------------------------------------------------------------------------
CORPORATE OBLIGATIONS 12.4%
AT&T Capital Corporation Medium Term Notes:
Tranche #473, 8.03% $ 2,500 5.29% 12/30/96 $ 2,522
Tranche #483, 7.72% 13,000 5.28 1/31/97 13,127
Advanta National Bank Senior Notes, 5.87% 25,000 5.88 11/21/96 25,000
Banponce Financial Corporation Medium Term Notes, Tranche #59, 8.32% 5,000 6.03 1/30/97 5,046
Chrysler Financial Corporation Medium Term Notes:
Tranche #181, 7.61% 7,920 5.96 10/30/96 7,940
Tranche #241, 7.81% 4,000 5.40 2/18/97 4,044
Tranche #243, 7.63% 3,600 5.69 2/24/97 3,633
Tranche #280, 7.30% 1,125 5.84 3/18/97 1,134
Cooper Industries, Inc. Medium Term Notes, 7.60% 3,000 6.06 10/15/96 3,005
Discover Credit Corporation Corporate Depositary Trust Transferrable Medium Term Notes,
Series II, 7.81% 5,000 5.79 3/18/97 5,053
First Interstate Bancorp Subordinated Notes, 12.75% 4,200 5.94 5/01/97 4,383
General Motors Acceptance Corporation Medium Term Notes:
7.50% 3,000 5.83 3/03/97 3,024
7.90% 4,850 5.74 3/12/97 4,903
Tranche #23, 5.00% 3,300 5.17 1/27/97 3,298
Tranche #59, 7.60% 8,500 5.76 1/09/97 8,554
Tranche #71, 5.05% 8,500 5.61 2/11/97 8,479
Tranche #90, 7.75% 1,110 5.37 1/17/97 1,120
Tranche #105, 7.70% 1,500 5.24 1/24/97 1,514
Tranche #123, 7.65% 1,000 5.74 2/04/97 1,008
Tranche #167, 6.00% 2,400 5.81 3/24/97 2,402
Tranche #187, 7.85% 1,000 5.83 3/05/97 1,010
Tranche #728, 8.375% 2,000 7.26 9/04/96 2,000
Tranche #757, 8.15% 2,000 5.53 9/17/96 2,002
Tranche #868, 5.20% 8,000 5.05 12/13/96 8,003
Tranche #883, 7.80% 3,675 6.08 11/15/96 3,688
General Motors Acceptance Corporation Notes:
7.75% 13,498 5.90 4/15/97 13,648
8.00% 1,000 6.18 10/01/96 1,001
MGM Grand Hotel Finance Corporation First Mortgage Floating Rate Notes, 12.00% 32,200 6.72 5/01/97 34,927
Philip Morris Companies, Inc. Notes, 9.75% 10,000 6.10 5/01/97 10,234
Washington Gas Light Company Bonds, 7.875% 2,500 7.88 9/01/96 2,500
Waste Management, Inc. Liquid Yield Option Notes, Zero % 4,550 5.86 6/30/97 1,809
----------
TOTAL CORPORATE OBLIGATIONS 190,011
TAXABLE MUNICIPAL VARIABLE RATE PUT BONDS 3.2%
Aurora, Kane & DuPage Counties, Illinois IDR 3,300 5.65 9/05/96 3,300
Bel Aire, LLC 4,585 5.60 9/05/96 4,585
Galliano Marine Services, Inc. 5,880 5.60 9/05/96 5,880
Gardena, California First-Time Homebuyer Refunding Program 5,250 5.75 9/04/96 5,250
Kinder-Care Learning Centers, Inc. Industrial Refunding - Kinder-Care
Learning Centers, Inc. Projects 4,500 5.53 9/04/96 4,500
Maine Regional Waste System, Inc.- Solid Waste Resource Recovery Revenue 2,200 5.60 9/04/96 2,200
Montgomery County, Pennsylvania IDA Revenue 730 5.55 9/05/96 730
New Jersey Sports & Exposition Authority Sports Complex
Subordinated Refunding Revenue 2,000 5.57 9/01/96 2,000
Passaic County, New Jersey GO Refunding 13,900 5.50 9/04/96 13,900
Thayer Properties, LLC 3,175 5.60 9/05/96 3,175
Tifton Mall, Inc. 3,100 5.60 9/05/96 3,100
----------
TOTAL TAXABLE MUNICIPAL VARIABLE RATE PUT BONDS 48,620
----------
TOTAL INVESTMENTS IN SECURITIES 100.1% 1,529,671
Other Assets and Liabilities, Net (0.1%) (1,187)
----------
NET ASSETS 100.0% $1,528,484
==========
</TABLE>
See notes to financial statements.
12
<PAGE>
- --------------------------------------------------------------------------------
STRONG HERITAGE MONEY FUND (continued)
- --------------------------------------------------------------------------------
PERCENTAGE OF
INDUSTRY DIVERSIFICATION NET ASSETS
- --------------------------------------------------------------------------------
Non-Agency Asset Backed ................................... 17.1%
Personal & Commercial Lending ............................. 17.0
Automobile ................................................ 8.2
Brokerage & Investment Management ......................... 6.8
General Obligation ........................................ 5.9
Insurance - Life .......................................... 4.5
Bank - Regional ........................................... 3.7
Industrial Development Revenue ............................ 3.7
Finance - Miscellaneous ................................... 3.3
Foreign Corporate ......................................... 3.0
Telecommunication Service ................................. 2.6
Yankee Corporate .......................................... 2.6
Computer Software ......................................... 2.3
Leisure Service ........................................... 2.3
Computer Service .......................................... 2.2
Insurance - Multi-Line .................................... 1.5
Oil - North American Exploration & Production ............. 1.5
Consumer - Miscellaneous .................................. 1.4
Mortgage & Related Service ................................ 1.4
Municipal Bonds ........................................... 1.4
Beverage - Soft Drink ..................................... 0.9
Pollution Control Revenue ................................. 0.9
Diversified Operations .................................... 0.7
Hospital Revenue .......................................... 0.7
Oil - North American Integrated ........................... 0.7
Single Family Mortgage Revenue ............................ 0.6
Commercial Service ........................................ 0.5
Cosmetic & Personal Care .................................. 0.4
Metals & Mining ........................................... 0.4
Aerospace & Defense ....................................... 0.3
Agricultural Operations ................................... 0.3
Real Estate ............................................... 0.3
Water & Sewer Revenue ..................................... 0.3
Machinery - Miscellaneous ................................. 0.2
Natural Gas Distribution .................................. 0.2
Telecommunication ......................................... 0.2
University Revenue ........................................ 0.1
Other Assets and Liabilities, Net ......................... (0.1)
------
Total 100.0%
======
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
STRONG MUNICIPAL MONEY MARKET FUND
<CAPTION>
PRINCIPAL YIELD TO MATURITY AMORTIZED
AMOUNT MATURITY DATE (d) COST (NOTE 2)
(In Thousands)
- ------------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS 21.2%
ARIZONA 0.4%
<S> <C> <C> <C> <C>
Maricopa County, Arizona Pollution Control Corporation 7.75% PCR - Public
Service Company of New Mexico Palo Verde Project $ 7,165 4.10% 11/01/96 $ 7,421
CALIFORNIA 4.0%
Contra Costa County, California 5.00% TRAN - West Contra
Costa Unified School District 16,000 4.76 1/24/97 16,015
Gardena, California 3.95% TRAN 4,715 4.05 6/30/97 4,711
Los Angeles, California MFHR - Earthquake Rehabilitation Project (e) 9,800 4.75 12/01/96 9,800
North County, California Schools Financing Authority 4.75% TRAN 4,200 4.16 7/01/97 4,220
Orange County, California 4.25% Recovery COP 11,095 4.10 7/01/97 11,108
Riverside County, California School Financing Authority 4.625%
RAN School Districts Financing Program 6,000 4.06 7/17/97 6,029
South Coast, California Local Education Agencies Pooled 4.75% TRAN
Program Note Participations 6,500 4.08 6/30/97 6,535
Tuolumne County, California Board of Education 4.19% TRAN 9,065 4.15 6/30/97 9,068
------
67,486
COLORADO 0.7%
Aurora, Colorado 5.35% MFHR - Aurora Meadows Apartments Project 11,750 5.35 9/01/96 11,750
See notes to financial statements.
13
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) August 31, 1996 (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
STRONG MUNICIPAL MONEY MARKET FUND (continued)
PRINCIPAL YIELD TO MATURITY AMORTIZED
AMOUNT MATURITY DATE (d) COST (NOTE 2)
(In Thousands)
- ------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS 6.8%
Lakemoor, Illinois MFHR Mortgage - Lakemoor Apartments Project (e):
Series B $50,000 4.63% 10/15/96 $ 50,000
Series C 10,000 4.20 9/05/96 10,000
Oakbrook Terrace, Illinois MFHR - Renaissance Project (e) 15,000 4.45 11/01/96 15,000
Oakbrook Terrace, Illinois MFHR - Renaissance Project (e) 41,820 4.25 11/01/96 41,820
--------
116,820
INDIANA 0.6%
Lawrence, Indiana EDR - Charleston Bay Project (e) 10,000 4.10 4/01/97 10,000
KENTUCKY 0.8%
Kentucky School Districts 4.18% TRAN COP 14,165 4.15 6/30/97 14,168
MICHIGAN 0.2%
Detroit, Michigan 5.80% GO Refunding 4,120 4.13 9/16/96 4,168
MINNESOTA 0.9%
Anoka, Dakota County and Washington County, Minnesota Housing and Redevelopment
Authorities SFMR - GNMA Mortgage-Backed Securities Program - Municipal Exempt
Receipts-Liquidity Optional Tender (e) 15,680 4.15 12/01/96 15,680
MISSOURI 2.8%
Missouri Health and Educational Facilities Authority School District 4.50%
Advance Funding Program 47,000 4.11 9/08/97 47,183
NEW MEXICO 1.2%
Bernalillo County, New Mexico MFHR - Westwood Villas Project (e) 6,830 4.25 7/01/97 6,830
New Mexico Mortgage Finance Authority SFMR (e) 13,000 4.05 8/29/97 13,000
--------
19,830
NEW YORK 0.1%
Syracuse, New York Industrial Development Agency 4.20% Pilot Revenue Refunding 1,000 4.20 10/15/96 1,000
OHIO 1.7%
Cleveland, Ohio School District 5.85% TRAN 16,250 4.06 12/31/96 16,343
Ohio Housing Finance Agency Residential Mortgage Revenue - Mortgage-Backed
Securities Program (e) 13,000 4.00 8/13/97 13,000
--------
29,343
RHODE ISLAND 0.2%
Rhode Island Solid Waste Management Corporation 4.50% Landfill Lease 3,500 4.16 8/01/97 3,510
SOUTH DAKOTA 0.3%
South Dakota HDA Homeownership Mortgage (e) 5,000 4.05 10/24/96 5,000
WISCONSIN 0.5%
Wisconsin HDA EDA Home Ownership Revenue - MERLOTS (e) 8,700 4.20 3/01/97 8,700
--------
TOTAL MUNICIPAL BONDS 362,059
MUNICIPAL COMMERCIAL PAPER 1.1%
UTAH
Tooele County, Utah Hazardous Waste Treatment Revenue - Union Pacific
Corporation/USPCI, Inc. Project 6,290 4.15 11/06/96 6,290
Tooele County, Utah Hazardous Waste Treatment Revenue - Union Pacific
Corporation/USPCI, Inc. Project 13,000 4.15 11/07/96 13,000
--------
TOTAL MUNICIPAL COMMERCIAL PAPER 19,290
ANNUAL PUT BONDS 5.8%
ALABAMA 0.3%
Mobile, Alabama IDB Annual Tender PCR - International Paper Company Project (e) 5,100 4.25 11/15/96 5,100
ARKANSAS 0.2%
Camden, Arkansas PCR - International Paper Company Project (e) 2,785 4.25 11/15/96 2,785
DISTRICT OF COLUMBIA 0.5%
District of Columbia Supplemental Student Loan Revenue -
The Consern Loan Program (e) 9,000 4.05 7/01/97 9,020
FLORIDA 0.5%
Florida Housing Finance Agency MFHR - Wood Forest II Project (e) 8,550 4.50 12/01/96 8,550
ILLINOIS 0.3%
Palatine, Illinois MFHR - Clover Ridge Apartments Project (e) 5,720 4.40 12/15/96 5,720
See notes to financial statements.
14
<PAGE>
- ------------------------------------------------------------------------------------------------------------------------------------
STRONG MUNICIPAL MONEY MARKET FUND (continued)
PRINCIPAL YIELD TO MATURITY AMORTIZED
AMOUNT MATURITY DATE (d) COST (NOTE 2)
(In Thousands)
- ------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY 0.9%
Pendleton County, Kentucky Self-Insurance Funding Revenue - Kentucky
Association of Counties All Lines Fund (e) $15,000 4.25% 7/01/97 $15,000
MINNESOTA 0.8%
Bass Brook, Minnesota Customized Purchase PCR Refunding - Minnesota
Power & Light Company Project (e) 8,400 4.70 6/02/97 8,400
Cloquet, Minnesota Customized Purchase IDR Refunding - Minnesota Power & Light
Company Project (e) 2,450 4.70 6/02/97 2,450
Coleraine, Minnesota Customized Purchase IDR Refunding - Minnesota
Power & Light Company Project (e) 1,695 4.70 6/02/97 1,695
Long Prairie, Minnesota IDR Refunding - Minnesota Power & Light
Company Project (e) 1,090 4.70 6/02/97 1,090
-------
13,635
NEW JERSEY 0.3%
Eastern States Tax-Exempt Mortgage Bond Trust (e) 4,855 5.19 3/01/97 4,855
PENNSYLVANIA 0.7%
Allegheny County, Pennsylvania Residential Finance Authority SFMR - GNMA
Mortgage-Backed Securities Program (e) 2,110 4.25 6/01/97 2,110
Westmoreland County, Pennsylvania IDA Revenue - National Waste and Energy
Corporation; Valley Landfill Expansion Project (e) 9,900 4.38 5/01/97 9,900
-------
12,010
TENNESSEE 0.5%
Knox County, Tennessee 7.50% IDB IDR - Spartan Food Systems, Inc. Project 1,300 7.50 12/01/96 1,300
Maryville, Tennessee 7.50% IDB IDR - Spartan Food Systems, Inc. Project 1,300 7.50 12/01/96 1,300
Shelby County, Tennessee Health, Educational and Housing Facility Board Hospital
Revenue - Methodist Health Systems, Inc. Project (e) 6,700 4.05 8/01/97 6,700
-------
9,300
TEXAS 0.8%
Tarrant County, Texas HFC MFHR - Lincoln Meadows Project (e) 4,375 4.30 12/01/96 4,375
Texas Department of Housing and Community Affairs MFMR Refunding - Folsom III
Development Project (e) 8,480 4.25 12/01/96 8,480
-------
12,855
-------
TOTAL ANNUAL PUT BONDS 98,830
SEMIANNUAL VARIABLE RATE PUT BONDS 3.2%
FLORIDA 0.4%
Lee County, Florida HFA SFMR - Multi-County Program 6,260 3.85 2/15/97 6,260
LOUISIANA 0.8%
Louisiana Housing Finance Agency GNMA Collateralized SFMR Municipal Exempt
Receipts - Liquidity Optional Tender 13,680 4.20 11/01/96 13,680
NEVADA 0.2%
Nevada Housing Division Single Family Program - Federally Insured or
Guaranteed Mortgage Loans 3,380 4.00 10/01/96 3,380
NEW YORK 0.4%
New York Mortgage Agency Homeowner Mortgage Revenue 7,610 3.75 10/01/96 7,610
RHODE ISLAND 0.4%
Rhode Island Housing and Mortgage Finance Corporation Homeownership Opportunity 6,605 3.75 10/01/96 6,605
TEXAS 0.3%
Matagorda County, Texas Hospital District Hospital Revenue 4,800 4.10 2/01/97 4,800
UTAH 0.2%
Utah Housing Finance Agency SFMR 2,805 4.13 1/01/97 2,805
WISCONSIN 0.5%
Milwaukee, Wisconsin Redevelopment Authority MFHR - City Hall
Square Apartments Project 9,000 5.09 1/01/97 9,000
-------
TOTAL SEMIANNUAL VARIABLE RATE PUT BONDS 54,140
MONTHLY VARIABLE RATE PUT BONDS 1.7%
COLORADO 0.1%
Jefferson County, Colorado IDR - Anthony A. Petrarca/Cedarwood Construction
Company, Inc. Project 2,420 4.65 10/01/96 2,420
See notes to financial statements.
15
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) August 31, 1996 (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
STRONG MUNICIPAL MONEY MARKET FUND (continued)
PRINCIPAL YIELD TO MATURITY AMORTIZED
AMOUNT MATURITY DATE (d) COST (NOTE 2)
(In Thousands)
- ------------------------------------------------------------------------------------------------------------------------------------
MARYLAND 0.4%
Prince George's County, Maryland EDR Refunding - Capital
View II Limited Partnership Facility $ 6,380 4.20% 10/01/96 $ 6,380
MICHIGAN 0.1%
Michigan Job Development Authority IDR - Anthony A. Petrarca/Cedarwood
Construction Company, Inc. Project 1,740 4.65 10/01/96 1,740
OHIO 0.2%
Summit County, Ohio Insured IDR - Anthony A. Petrarca/Cedarwood Construction
Company, Inc. Project 2,625 4.65 10/01/96 2,625
PENNSYLVANIA 0.2%
Pennsylvania Housing Finance Agency SFMR 4,090 4.13 10/01/96 4,090
MULTIPLE STATES 0.7%
Carolina Freight Tax Exempt Bond Grantor Trust 1,447 4.25 10/01/96 1,447
GAF Corporation Tax Exempt Bond Grantor Trust 4,300 4.10 10/01/96 4,300
Green Leaf Ventures, Inc. Tax Exempt Bond Grantor Trust 4,000 4.50 10/01/96 4,000
Johnson Controls, Inc. Tax Exempt Bond Grantor Trust 2,515 4.20 10/01/96 2,515
-------
12,262
-------
TOTAL MONTHLY VARIABLE RATE PUT BONDS 29,517
WEEKLY VARIABLE RATE PUT BONDS 63.0%
ALABAMA 3.2%
Alabama IDA IDR:
Decatur Aluminum Corporation Project 3,755 3.75 9/10/96 3,755
Research Genetics, Inc. Project 3,560 4.00 9/10/96 3,560
Scientific Utilization, Inc. Project 3,500 3.85 9/10/96 3,500
Whitesell Project 5,000 4.00 9/10/96 5,000
Arab, Alabama IDB IDR - Syncro Corporation Project 1,325 3.85 9/10/96 1,325
Birmingham, Alabama Baptist Medical Center - Special Care Facilities
Financing Authority Revenue - Methodist Home for the Aging Project 12,085 3.85 9/10/96 12,085
Birmingham, Alabama Medical Clinic Board - Baptist Medical Centers
Medical Clinic Revenue - Western Medical Systems, Inc. Project 6,700 3.80 9/10/96 6,700
Bridgeport, Alabama IDB IDR - Beaulieu Nylon, Inc. Project 10,000 4.00 9/10/96 10,000
Grove Hill, Alabama IDB IDR - Hamilton Woods Veneer Project 2,900 3.85 9/10/96 2,900
Madison County, Alabama MFHR Refunding:
Autumn Wood Project 2,995 3.80 9/10/96 2,995
Pinehurst Project 1,255 3.80 9/10/96 1,255
Montgomery, Alabama IDB IDR - Asphalt Contractors, Inc. Project 1,400 4.00 9/10/96 1,400
-------
54,475
ARIZONA 1.4%
Chandler, Arizona IDA MFHR - Greentree Place Apartments Project 6,722 5.78 9/10/96 6,722
Phoenix, Arizona IDA Airport Facility Revenue - America West
Airlines, Inc. Project 10,300 3.85 9/10/96 10,300
Tucson, Arizona IDA MFHR Refunding - Lincoln Garden Tucson Limited
Partnership Project 6,700 3.80 9/10/96 6,700
-------
23,722
ARKANSAS 1.0%
Conway County, Arkansas IDR - Cadron Creek Fibre Corporation Project 8,300 4.65 9/10/96 8,300
Magnolia, Arkansas IDR - American Fuel Cell and Coated Fabrics Company Project 3,855 3.90 9/10/96 3,855
Searcy, Arkansas IDR - Yarnell Ice Cream Company, Inc. Project 2,800 4.00 9/10/96 2,800
Trumann, Arkansas IDR - Roach Manufacturing Corporation Project 2,000 4.10 9/10/96 2,000
-------
16,955
CALIFORNIA 7.4%
Fairfield, California IDA IDR - Medical Design Concepts Project 1,000 4.25 9/10/96 1,000
Lancaster, California MFHR - Gangi Building Project 2,200 4.45 9/10/96 2,200
Los Angeles, California MFHR - Channel Gateway Apartments 44,500 3.80 9/10/96 44,500
Los Angeles County, California IDA IDR - Goldberg & Solovy Foods, Inc. Project 3,050 4.95 9/10/96 3,050
Ontario, California IDA IDR - P & S Development Project 3,500 4.05 9/10/96 3,500
Orange County, California Apartment Development Revenue - WLCO LF Partners
Project 5,600 4.15 9/10/96 5,600
Orange County, California Special Financing Authority Teeter Plan Revenue 7,500 4.36 9/10/96 7,500
Paramount, California Housing Authority MFHR Refunding - Century Place
Apartments Project 4,250 4.22 9/10/96 4,250
Riverside County, California IDA IDR - Medical Design Concepts IV Project 1,000 4.25 9/10/96 1,000
San Bernardino, California MFHR - Sandlewood Project 7,500 4.05 9/10/96 7,500
San Bernardino County, California COP - 1992 Justice Center/Airport Improvements
Refunding Project 1,960 4.10 9/10/96 1,960
San Bernardino County, California Housing Authority MFHR
Refunding - Brookside Meadows Project 18,000 4.75 9/10/96 18,000
See notes to financial statements.
16
<PAGE>
- ------------------------------------------------------------------------------------------------------------------------------------
STRONG MUNICIPAL MONEY MARKET FUND (continued)
PRINCIPAL YIELD TO MATURITY AMORTIZED
AMOUNT MATURITY DATE (d) COST (NOTE 2)
(In Thousands)
- ------------------------------------------------------------------------------------------------------------------------------------
San Diego, California Housing Authority MFHR - Nobel Court Apartments Project $11,910 4.70% 9/10/96 $ 11,910
San Marcos, California Redevelopment Agency MFHR - San Marcos Retirement
Village Project 7,100 4.29 9/10/96 7,100
Santa Fe Springs, California IDA - Tri-West Project 4,000 4.10 9/10/96 4,000
Upland, California Apartment Development Revenue - Mountain Springs Project 3,900 4.15 9/10/96 3,900
--------
126,970
COLORADO 1.1%
Aurora, Colorado IDR - Optima Batteries, Inc. Project 3,430 3.80 9/10/96 3,430
Jefferson County, Colorado IDR - Accutronics, Inc. Project 2,500 4.00 9/10/96 2,500
Lakewood, Colorado Jefferson County IDR - Verden Associates -
Holiday Inn Project 1,505 4.25 9/10/96 1,505
Westminster, Colorado IDR - Lifecare International Project 4,800 3.95 9/10/96 4,800
Westminster, Colorado MFHR - Lakeview Apartments Project 7,150 4.20 9/10/96 7,150
--------
19,385
FLORIDA 5.5%
Brevard County, Florida IDR - U. S. Space Camp Foundation Project 3,540 3.85 9/10/96 3,540
Broward County, Florida HFA MFHR - Sawgrass Pines Apartments Project 11,000 4.60 9/10/96 11,000
Dade County, Florida IDA IDR - Engelhard/ICC Project 8,000 4.10 9/10/96 8,000
Dade County, Florida Solid Waste IDR - Montenay-Dade, Ltd. Project:
Series 1988 36,240 3.75 9/10/96 36,240
Series 1989 7,120 3.75 9/10/96 7,120
Series 1990A 24,700 3.75 9/10/96 24,700
Palm Beach County, Florida IDR - QO Chemicals, Inc. Project 4,000 4.40 9/10/96 4,000
--------
94,600
GEORGIA 0.8%
Cobb County, Georgia Development Authority IDR - Datagraphic, Inc. Project 2,655 3.85 9/10/96 2,655
Fulton County, Georgia Development Authority IDR - STO Corporation Project 3,800 4.00 9/10/96 3,800
Lee County, Georgia Development Authority Revenue -
Woodgrain Millwork, Inc. Project 6,000 4.00 9/10/96 6,000
Savannah, Georgia EDA IDR - Savannah Steel & Metal Company Project 1,750 4.00 9/10/96 1,750
--------
14,205
ILLINOIS 7.1%
Cicero, Cook County, Illinois IDR - Harris Steel Company Project 3,370 3.74 9/10/96 3,370
East Hazelcrest, Illinois EDR Refunding - Columbia Sussex Corporation Project 490 5.00 9/10/96 490
Evanston, Illinois IDR - Fountain Square Project 1,740 4.10 9/10/96 1,740
Hazel Crest, Illinois Retirement Center Revenue - Waterford Estates Project 965 4.20 9/10/96 965
Hazel Crest, Illinois Retirement Center Revenue - Waterford Estates Project 2,890 4.20 9/10/96 2,890
Illinois DFA EDR - Korex Corporation Project 4,000 4.01 9/10/96 4,000
Illinois DFA IDR:
Associated Plastic Fabricators, Inc. Project 1,900 4.00 9/10/96 1,900
Fleetwood Systems, Inc. Project 5,260 3.75 9/10/96 5,260
Homak Manufacturing Company, Inc. Project 7,185 3.85 9/10/96 7,185
Jefferson Partners Limited Partnership - 216 South Jefferson Project 2,230 4.75 12/01/96 2,230
SMF, Inc. Project 4,315 3.80 9/10/96 4,315
U.G.N., Inc. Project 3,000 4.15 9/10/96 3,000
Merrionette Park, Illinois Industrial Project Revenue:
Southwick & Weglarz Project 6,365 4.15 9/10/96 6,365
Weglarz & Taxman Project 2,588 4.15 9/10/96 2,588
Puttable Tax-Exempt Receipts, Series PL-2B 45,000 3.90 9/10/96 45,000
Southwestern Illinois Development Authority Revenue - AEL
Industries, Inc. Project 5,765 3.90 9/10/96 5,765
Springfield, Illinois Airport Authority - Allied-Signal, Inc. Project 4,300 4.15 9/10/96 4,300
Woodridge, DuPage and Will Counties, Illinois MFHR Refunding - Hinsdale
Lake Terrace Apartments Project 20,760 4.35 9/10/96 20,760
--------
122,123
INDIANA 0.3%
Greencastle, Indiana EDR - H. A. Parts Products of Indiana Company Project 3,000 3.90 9/10/96 3,000
North Vernon, Indiana EDR - Oak Meadows Apartments Project 2,780 3.80 9/10/96 2,780
--------
5,780
IOWA 0.9%
Cedar Rapids, Iowa IDR Refunding First Program - Columbus McKinnon
Corporation Project 1,245 4.15 9/10/96 1,245
Chillicothe, Iowa PCR Refunding - Iowa Southern Utilities Company Project:
Series A 2,400 4.00 9/10/96 2,400
Series B 1,000 4.00 9/10/96 1,000
Iowa Falls, Iowa IDR Refunding - GENPAK Corporation Project 3,800 4.29 9/10/96 3,800
West Des Moines, Iowa Revenue - Woodgrain Millwork, Inc. Project 6,700 4.00 9/10/96 6,700
--------
15,145
KANSAS 0.8%
Kansas DFA MFHR - First Kansas State Partnership, L. P. Project 3,000 3.95 9/10/96 3,000
Kansas City, Kansas Private Activity Revenue - Ex-L-Tube of Kansas, Inc. Project 6,456 3.95 9/10/96 6,456
Osage City, Kansas Industrial Revenue - Marley Continental Homes
of Kansas Project 4,800 3.78 9/10/96 4,800
--------
14,256
See notes to financial statements.
17
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) August 31, 1996 (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
STRONG MUNICIPAL MONEY MARKET FUND (continued)
PRINCIPAL YIELD TO MATURITY AMORTIZED
AMOUNT MATURITY DATE (d) COST (NOTE 2)
(In Thousands)
- ------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY 4.5%
Berea, Kentucky IDR - Tokico Manufacturing Corporation Project $ 6,000 3.85% 9/10/96 $ 6,000
Bowling Green, Kentucky IBR - Bando Manufacturing of America, Inc. Project 3,645 4.15 9/10/96 3,645
Daviess County, Kentucky MFHR Refunding - Park Regency Apartments Project 4,155 4.20 9/10/96 4,155
Jeffersontown, Kentucky IDR - Columbia Sussex Corporation Facility 6,430 5.00 9/10/96 6,430
Kentucky DFA IDR - Hesco Project 5,800 3.95 9/10/96 5,800
Ohio County, Kentucky PCR - Big Rivers Electric Corporation Project 25,000 3.85 9/10/96 25,000
Ohio County, Kentucky PCR - Big Rivers Electric Corporation Project 11,600 3.80 9/10/96 11,600
Somerset, Kentucky IBR - Tibbals Flooring Company Project 10,000 4.00 9/10/96 10,000
Walton, Kentucky IDR - Dynamec, Inc., a/k/a NAMCO, Inc. Project 3,500 4.15 9/10/96 3,500
-------
76,130
LOUISIANA 1.2%
Lincoln Parish, Louisiana Facilities Revenue - Willamette
Industries, Inc. Project 15,000 4.05 9/10/96 15,000
New Orleans, Louisiana Aviation Board Revenue - Passenger
Facility Charge Project 4,620 4.15 9/10/96 4,620
-------
19,620
MARYLAND 0.5%
Charles County, Maryland Revenue - Chopp and Company, Inc. Facility 4,100 4.00 9/10/96 4,100
Washington County, Maryland EDR - Tandy Project 5,100 4.70 9/10/96 5,100
-------
9,200
MASSACHUSETTS 1.1%
Massachusetts Industrial Finance Agency IDR:
Lightolier, Inc. Project 4,400 4.00 9/10/96 4,400
Portland Causeway Realty Trust 2,600 4.29 9/10/96 2,600
U. S. Tsubaki, Inc. Project 4,700 4.50 9/10/96 4,700
Salem, Massachusetts IDFA IDR - Applied Extrusion Technologies, Inc. Project 6,500 4.29 9/10/96 6,500
-------
18,200
MICHIGAN 1.0%
Lansing, Michigan Limited Obligation EDC IDR - Ashland Oil, Inc. Project 1,400 5.28 9/10/96 1,400
Michigan Strategic Fund Limited Obligation Revenue - Coil Center
Corporation Project 8,850 4.40 9/10/96 8,850
Saline, Michigan EDC Limited Obligation Revenue - Associated Spring Project 7,000 4.30 9/10/96 7,000
-------
17,250
MINNESOTA 0.1%
Princeton, Minnesota IDR - Plastic Products Company, Inc. Project 1,800 3.95 9/10/96 1,800
MISSISSIPPI 0.7%
Panola County, Mississippi - Moog Automotive, Inc. Project 3,500 3.85 9/10/96 3,500
Prentiss County, Mississippi IDR - Heidelberg Eastern Project:
Series A 2,500 4.30 9/10/96 2,500
Series B 6,650 4.40 9/10/96 6,650
-------
12,650
MISSOURI 2.6%
Berkeley, Missouri IDA Exempt Facility Revenue - St. Louis Air
Cargo Services, Inc. Project 7,775 3.75 9/10/96 7,775
St. Charles County, Missouri IDA IDR Refunding - Country Club
Apartments Project 25,000 3.96 9/10/96 25,000
St. Louis County, Missouri IDA - Hampton Inn Westport Associates Project 3,600 4.40 9/10/96 3,600
St. Louis County, Missouri IDA MFHR - Whispering Lakes Apartments Project 8,000 3.85 9/10/96 8,000
-------
44,375
NEBRASKA 0.6%
Douglas County, Nebraska IDR - QO Chemicals, Inc. Project 3,500 4.40 9/10/96 3,500
Nebraska IFA Revenue Refunding - Redick Tower Project 6,005 4.45 9/10/96 6,005
-------
9,505
NEVADA 0.3%
Nevada Department of Commerce IDR - Master-Halco, Inc. Project 4,300 5.00 9/10/96 4,300
NEW HAMPSHIRE 0.3%
New Hampshire IDA Industrial Facility Revenue - Ferrofluidics
Corporation - Nashua Series Project 5,000 4.25 9/10/96 5,000
NEW JERSEY 0.3%
New Jersey EDA - Center for the Aging 3,800 3.95 9/10/96 3,800
New Jersey EDA EDR - Hickory Industries, Inc. Project 2,000 4.10 9/10/96 2,000
-------
5,800
NORTH CAROLINA 1.0%
Alleghany County, North Carolina Industrial Facilities and Pollution
Control Financing Authority IDR - Spring-Ford Knitting Company, Inc. Project 2,500 3.70 9/10/96 2,500
Gaston County, North Carolina Industrial Facilities and Pollution
Control Financing Authority IDR - Spring-Ford Knitting Company, Inc. Project 4,500 3.70 9/10/96 4,500
See notes to financial statements.
18
<PAGE>
- ------------------------------------------------------------------------------------------------------------------------------------
STRONG MUNICIPAL MONEY MARKET FUND (continued)
PRINCIPAL YIELD TO MATURITY AMORTIZED
AMOUNT MATURITY DATE (d) COST (NOTE 2)
(In Thousands)
- ------------------------------------------------------------------------------------------------------------------------------------
North Carolina State Ports Authority Exempt Facility Revenue - Jordan & Lumber
Supply, Inc. Project $ 5,080 4.00% 9/10/96 $ 5,080
Robeson County, North Carolina Industrial Facilities and Pollution Control
Financing Authority IDR - Core Industries, Inc. Project 5,000 3.80 9/10/96 5,000
-------
17,080
NORTH DAKOTA 0.2%
Mercer County, North Dakota PCR - Minnesota Power & Light Company Project 3,160 4.10 9/15/96 3,160
OHIO 0.6%
Cuyahoga County, Ohio IDR:
Edge Seal Technologies, Inc. and One Industry Drive, Inc. Project 2,960 4.10 9/10/96 2,960
Motch Corporation Project 4,000 4.00 9/10/96 4,000
Gallia County, Ohio IDR - Harsco Corporation Project 3,500 4.05 9/10/96 3,500
-------
10,460
OREGON 1.3%
Oregon EDR:
Eagle-Picher Industries, Inc. Project 6,400 3.80 9/10/96 6,400
JAE Oregon, Inc. Project 5,500 3.78 9/10/96 5,500
Kyotaru Oregon, Inc. Project 3,600 3.78 9/10/96 3,600
Toyo Tanso USA, Inc. Project 6,000 3.78 9/10/96 6,000
-------
21,500
PENNSYLVANIA 4.5%
Bucks County, Pennsylvania IDA - Double H Plastics, Inc. Project 2,445 3.95 9/10/96 2,445
Harrisburg, Pennsylvania Authority Pooled Financing Revenue - Pennsylvania
Pool Financing Fund 50,000 3.80 9/10/96 50,000
Lycoming County, Pennsylvania IDA Manufacturing Facilities
Revenue - Coastal Aluminum Rolling Mills, Inc. Project 4,000 3.95 9/10/96 4,000
Mercer County, Pennsylvania IDA IDR - Penntecq, Inc. Project 4,000 3.70 9/10/96 4,000
Montgomery County, Pennsylvania IDA - Laneko Engineering Company Project 2,595 3.95 9/10/96 2,595
Montgomery County, Pennsylvania IDA IDR Refunding - Spring City Limited
Partnership Project 5,000 4.50 9/10/96 5,000
Philadelphia, Pennsylvania IDA Revenue - 30th Street Station Project 8,100 4.15 9/10/96 8,100
-------
76,140
RHODE ISLAND 0.2%
Rhode Island Industrial Facilities Corporation IDR - Lenox, Inc. Project 3,060 3.70 9/10/96 3,060
SOUTH CAROLINA 1.5%
Charleston County, South Carolina Industrial Revenue - Tandy Corporation Project 1,000 4.95 9/10/96 1,000
Richland County, South Carolina IDR - Ashland Oil Project 1,400 5.28 9/10/96 1,400
Rock Hill, South Carolina Industrial Revenue - Willamette
Industries, Inc. Project 7,500 4.10 9/10/96 7,500
South Carolina Jobs EDA EDR - Glo-Tex Chemicals, Inc. Project 3,000 4.00 9/10/96 3,000
South Carolina Jobs EDA IDR:
Quoizel, Inc. Project 8,000 4.00 9/10/96 8,000
Roller Bearing Company of America, Inc. Project 5,000 4.36 9/10/96 5,000
-------
25,900
SOUTH DAKOTA 0.2%
Aberdeen, South Dakota IDR - Lomar Development Company Project 360 4.30 9/10/96 360
Brookings, South Dakota IDR - Lomar Development Company Project 2,160 4.20 9/10/96 2,160
Brookings, South Dakota IDR Refunding - Lomar Development Company Project 600 4.25 9/10/96 600
-------
3,120
TENNESSEE 1.2%
Blount County, Tennessee IDB IDR - Advanced Crystal Technology, Inc. Project 3,300 4.15 9/10/96 3,300
Carter County, Tennessee IDB MFHR Refunding - Willow Run Apartments Project 6,675 4.20 9/10/96 6,675
Coffee County, Tennessee Industrial Board Revenue - M-Tek Project 2,700 4.65 9/10/96 2,700
Knox County, Tennessee Health, Educational and Housing Facilities
Board Revenue - Holston Long Term Care Project 4,500 4.10 9/10/96 4,500
Memphis and Shelby County, Tennessee IDB IDR - Techno Steel Corporation Project 4,000 3.80 9/10/96 4,000
-------
21,175
TEXAS 3.0%
Austin County, Texas IDC IDR - Gulf States Toyota, Inc. Project 4,750 4.38 9/10/96 4,750
Azle, Texas IDA IDR - Tandy Corporation Project 3,000 4.66 9/10/96 3,000
Deer Park, Texas Port Development Corporation IDR - Ashland Oil, Inc. Project 4,700 5.28 9/10/96 4,700
Grand Prairie, Texas IDA IDR - Precision/API Ketema Project 4,000 3.85 9/10/96 4,000
Longview, Texas Industrial Corporation IDR - Longview Guest Inn Project 2,600 3.95 9/10/96 2,600
Midlothian, Texas IDC PCR - Box-Crow Cement Company Project 18,800 3.80 9/10/96 18,800
Montgomery County, Texas IDC IDR - Porous Media, Ltd. Project 3,600 4.00 9/10/96 3,600
NCNB Pooled Tax-Exempt Trust COP 2,975 4.13 9/10/96 2,975
See notes to financial statements.
19
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) August 31, 1996 (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
STRONG MUNICIPAL MONEY MARKET FUND (continued)
PRINCIPAL YIELD TO MATURITY AMORTIZED
AMOUNT MATURITY DATE (d) COST (NOTE 2)
(In Thousands)
- ------------------------------------------------------------------------------------------------------------------------------------
Robstown, Texas IDC IDR - Concrete Pipe and Products Company, Inc. Project $ 2,000 4.00% 9/10/96 $ 2,000
Tarrant County, Texas IDC IDR - Al-Ko Southwest, Inc. Project 2,000 4.15 9/10/96 2,000
Texas Small Business IDC IDR - Moulding Products, Inc. Project 3,465 3.85 9/10/96 3,465
----------
51,890
VIRGINIA 2.7%
Bedford County, Virginia IDA IDR - Nekoosa Packaging Corporation Project 20,300 4.10 9/10/96 20,300
Fairfax County, Virginia LaSalle National Bank LeaseTOPS Trust 7,177 3.90 9/10/96 7,177
Oyster Point, Virginia Development Corporation MFHR - Jefferson Point
Development Project 5,200 3.90 9/10/96 5,200
Richmond, Virginia Redevelopment and Housing Authority Tobacco Row Revenue:
Series B-4 7,000 3.70 9/10/96 7,000
Series B-10 7,000 3.70 9/10/96 7,000
----------
46,677
WASHINGTON 1.2%
Pierce County, Washington EDC - Brown & Haley Project 2,215 4.82 9/10/96 2,215
Pierce County, Washington EDC Pooled Bond Program Industrial Revenue - America
Nichirel Foods Project 4,500 4.40 9/10/96 4,500
Pilchuck, Washington Development Public Corporation Industrial Revenue - Kohkoku
USA, Inc. Project 4,000 3.78 9/10/96 4,000
Port of Douglas County, Washington Development Corporation Revenue -
Van Doren Sales Project 5,000 3.70 9/10/96 5,000
Port Moses Lake, Washington Public Corporation Industrial Revenue - Basic
American Foods Project 4,200 3.90 9/10/96 4,200
----------
19,915
WISCONSIN 1.8%
Amery, Wisconsin IDR - Plastech Corporation Project 2,200 4.00 9/10/96 2,200
Ashwaubenon, Wisconsin IDR - Pioneer Metal Finishing, Inc. Project 2,040 4.00 9/10/96 2,040
Columbus, Wisconsin IDR - Maysteel Corporation Project 2,000 4.00 9/10/96 2,000
Madison, Wisconsin IDR - Manchester Place Project 8,130 4.10 9/10/96 8,130
Menomonee Falls, Wisconsin IDR - Maysteel Corporation Project 3,000 4.00 9/10/96 3,000
Milwaukee, Wisconsin Redevelopment Authority Development Revenue - Washington
Square Phase III Project 8,495 4.50 9/10/96 8,495
New London, Wisconsin IDR - Steel King Industries, Inc. Project 4,390 3.95 9/10/96 4,390
----------
30,255
WYOMING 0.9%
Campbell County, Wyoming IDR - Powder Basin Properties Project 6,170 3.90 9/10/96 6,170
Lincoln County, Wyoming PCR - Champlin Petroleum Company Project 1,750 4.75 9/10/96 1,750
Uinta County, Wyoming PCR - Champlin Petroleum Company Project 7,775 4.75 9/10/96 7,775
----------
15,695
----------
TOTAL WEEKLY VARIABLE RATE PUT BONDS 1,077,473
DAILY VARIABLE RATE PUT BONDS 2.9%
DELAWARE 0.5%
Delaware EDA Solid Waste Disposal and Sewage Facilities Revenue - Ciba-Geigy
Corporation Project 9,000 3.85 9/03/96 9,000
LOUISIANA 0.2%
West Baton Rouge, Louisiana Industrial District No. 3 Revenue - The Dow Chemical
Company Project 2,600 4.00 9/03/96 2,600
MISSOURI 0.4%
Jackson County, Missouri Industrial Sewer Facilities Revenue -
Chevron USA Project 6,300 3.95 9/03/96 6,300
NEVADA 0.4%
Washoe County, Nevada Water Facilities Revenue - Sierra Pacific Power
Company Project 6,500 3.95 9/03/96 6,500
TEXAS 0.7%
Harris County, Texas IDC PCR - Exxon Project 4,400 3.90 9/03/96 4,400
Sabine River Authority, Texas PCR - Texas Utilities Electric Company Project 8,300 3.85 9/03/96 8,300
----------
12,700
MULTIPLE STATES 0.7%
Puttable Tax-Exempt Receipts, Series PPT-6 11,830 3.95 9/03/96 11,830
----------
TOTAL DAILY VARIABLE RATE PUT BONDS 48,930
----------
TOTAL INVESTMENTS IN SECURITIES 98.9% 1,690,239
Other Assets and Liabilities, Net 1.1% 18,288
----------
NET ASSETS 100.0% $1,708,527
==========
</TABLE>
See notes to financial statements.
20
<PAGE>
- --------------------------------------------------------------------------------
STRONG MUNICIPAL ADVANTAGE FUND
PRINCIPAL VALUE
AMOUNT (NOTE 2)
(In Thousands)
- --------------------------------------------------------------------------------
MUNICIPAL BONDS 42.7%
ARKANSAS 2.6%
Fayetteville, Arkansas Public Facilities Board
Refunding and Improvement Revenue
- Butterfield Trail Village Project:
8.25%, Due 9/01/00 $ 1,400 $ 1,402
9.50%, Due 9/01/14 3,635 3,962
Little Rock, Arkansas Collateralized IDR -
Lexicon, Inc. Project, 6.48%, Due 7/01/06 4,575 4,575
-------
9,939
CALIFORNIA 5.1%
California Hospital Revenue - Valley Health
System Refunding and Improvement Project,
5.50%, Due 5/15/00 740 733
Long Beach, California Harbor Revenue, 7.25%,
Due 5/15/19 3,550 3,736
Los Angeles, California Unified School District
Partnership - Multiple Properties Project, 5.40%,
Due 11/01/09 (c) 1,000 964
Los Angeles, California Unified School District
Refunding COP - Multiple Properties Project,
5.625%, Due 11/01/13 6,420 6,316
Santa Ana, California Community Redevelopment
Refunding, 7.50%, Due 9/01/16 3,000 3,083
Vallejo, California Housing Authority MFMR -
Highlands Apartments Project, 5.00%,
Due 6/01/99 4,690 4,702
-------
19,534
COLORADO 1.1%
Central City, Gilpin County, Colorado Excise Tax
Refunding, 5.40%, Due 12/01/00 4,400 4,400
CONNECTICUT 3.0%
Connecticut Resources Recovery Authority
Revenue - American REF-FUEL Company of
Southeastern Connecticut Project, 8.00%,
Due 11/15/15 10,800 11,678
FLORIDA 2.6%
Escambia County, Florida Escambia Housing
Corporation Housing Revenue - Royal Arms
Project, 7.00%, Due 7/01/99 9,360 9,793
Florida Housing Finance Agency MFHR - Cypress
Lake Apartment Project, 5.75%, Due 12/01/07 200 200
-------
9,993
ILLINOIS 6.2%
Alton, Illinois Hospital Facilities Revenue &
Refunding - St. Anthony's Health Center Project:
4.65%, Due 9/01/98 1,350 1,338
4.95%, Due 9/01/99 1,400 1,383
5.00%. Due 9/01/01 850 823
5.125%, Due 9/01/02 1,320 1,272
5.15%, Due 9/01/00 1,355 1,335
Hodgkins, Illinois GO Tax Allocation, 9.50%,
Due 12/01/09 2,600 3,234
Illinois Health Facilities Authority Revenue
Refunding - Carle Foundation,
6.00%, Due 1/01/15 2,500 2,534
Illinois Health Facilities Authority Revenue
Refunding - Westlake Community Hospital,
7.875%, Due 1/01/13 4,450 4,706
Romeoville, Will County, Illinois COP:
7.30%, Due 12/01/99 2,250 2,306
7.30%, Due 12/01/00 2,000 2,055
Sauget, St. Clair County, Illinois GO, 7.25%,
Due 2/01/01 3,000 3,041
-------
24,027
INDIANA 0.4%
Huntington, Indiana EDR Refunding - Quanex
Corporation Project, 6.50%, Due 2/01/10 1,665 1,586
KANSAS 0.1%
Kansas City, Kansas Residual Revenue Capital
Appreciation, Zero %, Due 5/01/12 1,805 517
LOUISIANA 2.3%
Orleans, Louisiana Levee District Levee
Improvement Refunding:
8.25%, Due 11/01/14 7,600 7,783
8.25%, Due 11/01/15 1,000 1,024
-------
8,807
MASSACHUSETTS 0.3%
Massachusetts Industrial Finance Agency
Industrial Revenue - John T. Spinelli Project,
7.00%, Due 11/01/00 978 978
MICHIGAN 1.1%
Detroit, Michigan EDC Taxable Resource
Recovery Revenue, 7.00%, Due 5/01/01 2,950 3,145
Pontiac, Michigan Hospital Financing Authority
Hospital Revenue - NOMC Obligation Group:
5.40%, Due 8/01/98 840 841
5.60%, Due 8/01/99 200 200
-------
4,186
MISSISSIPPI 0.6%
Stone County, Mississippi Urban Renewal
Revenue - Phase III Redevelopment Project,
5.00%, Due 4/16/19 2,500 2,494
NEVADA 0.1%
Henderson, Nevada Local Improvement Districts
Number T-4, 6.00%, Due 11/01/01 505 499
NEW JERSEY 3.7%
New Jersey EDA Senior Mortgage Revenue -
Arbor Glen of Bridgewater Project:
6.00%, Due 5/15/26 1,750 1,730
7.00%, Due 5/15/06 9,675 9,433
New Jersey Health Care Facilities Financing
Authority Revenue - Zurbrugg Memorial
Hospital, 8.50%, Due 7/01/12 3,165 3,297
-------
14,460
NEW YORK 0.6%
Battery Park, New York City Authority Housing
Revenue - FHA Insured Mortgage Loan, 5.75%,
Due 6/01/23 2,500 2,428
OHIO 2.0%
Cleveland, Ohio Energy Conservation
Improvement GO:
6.53%, Due 9/15/97 555 566
6.53%, Due 3/15/98 570 585
6.53%, Due 9/15/98 590 610
6.53%, Due 3/15/99 610 631
6.53%, Due 9/15/99 630 654
Lorain County, Ohio IDR - Gilford Instrument
Laboratories, Inc. Project, 5.25%, Due 7/01/14 1,000 1,013
Lucas County, Ohio Hospital Revenue Refunding -
Riverside Hospital Project, 7.625%, Due 6/01/15 2,400 2,460
Ohio Department of Transportation COP -
Rickenbacker Port, 6.125%, Due 4/15/15 1,150 1,170
-------
7,689
See notes to financial statements.
21
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) August 31, 1996 (Unaudited)
- -------------------------------------------------------------------------------
STRONG MUNICIPAL ADVANTAGE FUND (continued)
PRINCIPAL VALUE
AMOUNT (NOTE 2)
(In Thousands)
- --------------------------------------------------------------------------------
OREGON 0.6%
Washington County, Oregon Housing Authority
Tax Credit - Bethany Meadows Project, 5.00%,
Due 9/30/98 $2,260 $ 2,271
PENNSYLVANIA 2.7%
Lancaster County, Pennsylvania Solid Waste
Management Authority Resource Recovery
System Revenue, 8.50%, Due 12/15/10 3,980 4,214
Philadelphia, Pennsylvania Hospitals and
Higher Education Facilities Authority
Revenue Refunding:
5.50%, Due 7/01/00 4,165 4,175
8.375%, Due 6/01/04 1,840 1,990
--------
10,379
TEXAS 3.7%
Bell County, Texas Health Facilities Development
Corporation Revenue Refunding - Central Texas
Pooled Health Care Loan Program, 4.75%,
Due 10/01/98 5,000 4,994
Texas State Lease COP, 6.35%, Due 12/01/13 4,793 4,799
Texas Turnpike Authority Dallas North Tollway
Revenue, 7.125%, Due 1/01/15 3,675 3,882
Trinity River Authority Refunding - Texas
Industries, Inc. Project, 6.1875%, Due 9/01/07 500 496
Trinity River Authority Refunding - Texas
Industries, Inc. Project, Series A, 6.1875%,
Due 9/01/07 305 303
--------
14,474
UTAH 2.0%
Utah Associated Municipal Power Systems
Revenue Refunding - Hunter Project, 5.50%,
Due 7/01/12 8,000 7,760
WEST VIRGINIA 0.8%
Harrison County, West Virginia First Mortgage
Medical Facilities Revenue Refunding - Salem
Health Care Corporation Project, 9.875%,
Due 6/01/10 1,005 1,033
Kanawha County, West Virginia County
Commission IDR - Union Carbide Chemicals
and Plastics Company, Inc. Project, 8.00%,
Due 8/01/20 1,930 2,089
--------
3,122
WISCONSIN 1.1%
Lac Courte Oreilles, Wisconsin Band of Lake
Superior Chippewa Indians Public Purpose
Infrastructure Revenue, 6.25%, Due 8/01/01 4,220 4,220
--------
TOTAL MUNICIPAL BONDS (COST $165,417) 165,441
PUT BONDS 2.1%
MINNESOTA
St. Paul, Minnesota Port Authority CDR
Refunding - Battle Creek Hotel Project, 4.95%,
Due 7/01/12 (Putable at 100 and Rate Reset
Effective 4/01/98) (e) (COST $7,970) 7,970 7,970
SHORT-TERM INVESTMENTS (a) 53.7%
MUNICIPAL BONDS 7.6%
CALIFORNIA 0.5%
Contra Costa County, California TRAN - West
Contra Costa Unified School District, 5.00%,
Due 1/24/97 2,000 2,000
CONNECTICUT 1.9%
Waterbury, Connecticut BAN, 4.65%, Due 2/19/97 3,250 3,264
Waterbury, Connecticut RAN, 4.95%, Due 9/24/96 4,000 4,002
--------
7,266
IDAHO 1.9%
Boise City, Idaho Housing Authority RAN -
Hudgins Place Project, 5.25%, Due 2/28/97 7,350 7,402
ILLINOIS 1.2%
DuPage County, Illinois MFHR - Myerstown,
LLC Project, 4.95%, Due 11/01/96 4,530 4,537
MICHIGAN 0.1%
Pontiac, Michigan Hospital Financing Authority
Hospital Revenue - NOMC Obligation Group,
5.20%, Due 8/01/97 600 600
MISSOURI 1.6%
Branson, Missouri BAN - Water Treatment Plant
Project, 5.25%, Due 5/31/97 6,230 6,287
NEW YORK 0.1%
Orleans County, New York IDA IDR - Anchor
Savings Bank FSB Project, 7.50%, Due 12/01/96 200 200
OHIO 0.3%
Cleveland, Ohio Energy Conservation
Improvement GO:
6.53%, Due 9/15/96 520 520
6.53%, Due 3/15/97 535 541
--------
1,061
--------
Total Municipal Bonds 29,353
MUNICIPAL COMMERCIAL PAPER 5.7%
UTAH
Tooele County, Utah Hazardous Waste Treatment
Revenue - Union Pacific Corporation/
USPCI, Inc. Project 5,300 5,300
Tooele County, Utah Hazardous Waste Treatment
Revenue - Union Pacific Corporation/
USPCI, Inc. Project 16,600 16,600
--------
Total Municipal Commercial Paper 21,900
PUT BONDS 6.9%
INDIANA 2.2%
Indianapolis, Indiana MFHR - Crossing Partners,
L.P. Project, 4.50%, Due 3/01/31 (Putable at 100
and Rate Reset Effective 10/01/96) (e) 8,700 8,700
LOUISIANA 2.7%
Louisiana Public Facilities Authority MFHR -
Southfork Village Apartments Project, 8.00%,
Due 11/01/05 (Putable at 100 and Rate Reset
Effective 10/31/96) (e) 10,500 10,544
PUERTO RICO 1.1%
Puerto Rico Highway and Transportation
Authority Highway Revenue, 4.06%,
Due 7/01/10 (Putable at 100 and Rate Reset
Effective 9/24/96) (e) 4,100 4,100
See notes to financial statements.
22
<PAGE>
- -------------------------------------------------------------------------------
STRONG MUNICIPAL ADVANTAGE FUND (continued)
PRINCIPAL VALUE
AMOUNT (NOTE 2)
(In Thousands)
- --------------------------------------------------------------------------------
WISCONSIN 0.9%
Milwaukee, Wisconsin Redevelopment Authority
Revenue - Dynapro Thin Film Products, Inc.
Project, 5.10%, Due 12/01/20 (Putable at 100
and Rate Reset Effective 10/01/96) (e) $ 3,300 $ 3,300
-------
Total Put Bonds 26,644
ANNUAL PUT BONDS 0.6%
COLORADO 0.1%
Thornton, Colorado MFHR - Thornhill
Farms Project (e) 500 502
ILLINOIS 0.4%
Illinois DFA Solid Waste Disposal Revenue -
Horsehead Resource Development Company, Inc.
Project (e) 1,500 1,502
OHIO 0.0%
Sharonville, Ohio IDR - Ralston Purina Company
Project (e) 100 100
TENNESSEE 0.1%
Knox County, Tennessee 7.50% IDB IDR - Spartan
Food Systems, Inc. Project 200 200
Maryville, Tennessee 7.50% IDB IDR - Spartan
Food Systems, Inc. Project 200 201
-------
401
-------
Total Annual Put Bonds 2,505
QUARTERLY VARIABLE RATE PUT BONDS 0.5%
WASHINGTON
Washington State Housing Finance Commission
SFMR Refunding:
Series S-1A 835 835
Series S-2B 335 335
Series S-3A 760 760
-------
Total Quarterly Variable Rate Put Bonds 1,930
WEEKLY VARIABLE RATE PUT BONDS 27.2%
ALABAMA 1.0%
Birmingham, Alabama IDB IDR - Home Baking
Company, Inc. Project 3,890 3,890
CALIFORNIA 2.5%
Los Angeles County, California MFMR 3,000 3,000
Pasadena, California Community Development
Commission COP - Kings Plaza Project 895 895
Pasadena, California Community Development
Commission COP - Lake/Washington
Neighborhood Shopping Center 2,575 2,575
Riverside, California MFHR - Spruce Grove Project 3,360 3,360
-------
9,830
FLORIDA 6.3%
Broward County, Florida HFA MFHR - Sawgrass
Pines Apartments Project 1,000 1,000
Dade County, Florida Solid Waste IDR - Montenay-
Dade, Ltd. Project 18,657 18,657
Marion County, Florida HFA MFHR - Belvedere
Apartments Project 1,700 1,700
Marion County, Florida HFA MFHR - Oakhurst
Apartments Project 3,000 3,000
-------
24,357
ILLINOIS 1.1%
Illinois DFA IDA - Toyomenka (America),
Inc. Project 2,200 2,200
Illinois DFA IDR - Sumitomo Machinery
Corporation Project 2,000 2,000
-------
4,200
IOWA 0.8%
Creston, Iowa IDR - CF Processing, L.C. Project 3,190 3,190
MINNESOTA 2.1%
Maplewood, Minnesota Rental Housing Revenue -
Carefree Cottages of Maplewood III Project 340 340
Plymouth, Minnesota MFHR - At The Lake
Apartments Project 7,685 7,685
Vadnais Heights, Minnesota Rental Housing
Revenue - Cottages of Vadnais Heights Project 210 210
-------
8,235
MISSOURI 0.4%
Jefferson County, Missouri IDA Industrial Revenue
Refunding - Festus Manor Nursing Home Project 1,620 1,620
NEVADA 0.1%
Nevada Department of Commerce IDR -
Master-Halco, Inc. Project 300 300
OHIO 1.5%
Ohio Housing Finance Agency Refunding -
10 Wilmington Place Project 5,910 5,910
OREGON 0.6%
Oregon EDR - Georgia-Pacific Corporation Project 2,200 2,200
PENNSYLVANIA 4.7%
Elk County, Pennsylvania IDA Solid Waste Disposal
Revenue - Willamette Industries, Inc. Project 3,000 3,000
Philadelphia, Pennsylvania IDA Revenue - 30th
Street Station Project 15,000 15,000
-------
18,000
SOUTH CAROLINA 1.8%
Abbeville County, South Carolina IDR - The Bibb
Company Project 3,000 3,000
Marlboro County, South Carolina Solid Waste
Disposal Facilities - Willamette Industries, Inc.
Project 3,800 3,800
-------
6,800
TENNESSEE 1.4%
Anderson County, Tennessee IDB Revenue -
Becromal of America, Inc. Project 2,000 2,000
Nashville and Davidson Counties, Tennessee IDB
IDR Refunding - Perimeter Two, Ltd. Project 3,445 3,445
-------
5,445
WASHINGTON 0.5%
Pierce County, Washington EDC Pooled Bond
Program Industrial Revenue - America Nichirel
Foods Project 2,000 2,000
WISCONSIN 0.6%
Pleasant Prairie, Wisconsin IDR - Chicago Lock
Company Project 1,000 1,000
Rhinelander, Wisconsin Industrial Revenue - Lake
Shore, Inc. Project 1,500 1,500
-------
2,500
See notes to financial statements.
23
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) August 31, 1996 (Unaudited)
- -------------------------------------------------------------------------------
STRONG MUNICIPAL ADVANTAGE FUND (continued)
PRINCIPAL VALUE
AMOUNT (NOTE 2)
(In Thousands)
- --------------------------------------------------------------------------------
WYOMING 0.2%
Lincoln County, Wyoming PCR - Champlin
Petroleum Company Project $ 570 $ 570
MULTIPLE STATES 1.6%
Pooled Puttable Tax-Exempt Receipts - Series PP4 6,045 6,045
--------
Total Weekly Variable Rate Put Bonds 105,092
DAILY VARIABLE RATE PUT BONDS 5.2%
ALABAMA 0.1%
Alabama IDA IDR - Sunshine Homes Project 220 220
CALIFORNIA 1.2%
San Diego, California Housing Authority MFHR -
Oro Vista Apartments Project 4,600 4,600
GEORGIA 0.2%
Peachtree City, Georgia Development Authority
Revenue - FORMTEC, Inc. Project 1,000 1,000
ILLINOIS 0.4%
Southwestern Illinois Development Authority Solid
Waste Revenue - Shell Oil Company Wood
River Project 1,600 1,600
NEW YORK 0.8%
New York Energy Research and Development
Authority PCR - Niagara Mohawk Power
Company Project 3,000 3,000
TEXAS 0.6%
Gulf Coast, Texas Waste Disposal Authority -
Amoco Oil Company Project 2,400 2,400
MULTIPLE STATES 1.9%
Puttable Tax-Exempt Receipts, Series PPT-6 7,510 7,510
--------
Total Daily Variable Rate Put Bonds 20,330
--------
TOTAL SHORT-TERM INVESTMENTS
(COST $207,634) 207,754
--------
TOTAL INVESTMENTS IN SECURITIES
(COST $381,021) 98.5% 381,165
Other Assets and Liabilities, Net 1.5% 5,752
--------
NET ASSETS 100.0% $386,917
========
FUTURES
- -------
UNDERLYING
FACE AMOUNT UNREALIZED
EXPIRATION AT VALUE DEPRECIATION
DATE (In Thousands) (In Thousands)
- --------------------------------------------------------------------------------
Sold:
139 Municipal Bond Index Futures 9/96 ($15,798) ($168)
- --------------------------------------------------------------------------------
STRONG ADVANTAGE FUND
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
- --------------------------------------------------------------------------------
CORPORATE BONDS 63.0%
American Reinsurance Corporation Senior
Subordinated Debentures, 10.875%, Due 9/15/04 $ 4,915 $ 5,337
American Standard, Inc. Senior Debentures,
11.375%, Due 5/15/04 23,680 25,841
Auxiliare Credit Foncier Floating Rate Notes,
5.4375%, Due 10/22/02 3,000 2,887
Banesto Finance Limited Subordinated Floating
Rate Notes, 6.5625%, Due 10/29/49 10,000 9,750
Bank of Boston Corporation Subordinated
Floating Rate Notes, 5.6875%, Due 2/28/01 22,700 22,522
Bank of Scotland Variable Rate Subordinated
Notes, 6.5625%, Due 8/29/49 14,960 14,866
Boyd Gaming Corporation Senior Subordinated
Notes, Series B, 10.75%, Due 9/01/03 23,952 24,970
CMS Energy Corporation Senior Deferred Coupon
Notes, Series A, 9.50%, Due 10/01/97 6,000 6,140
Cablevision Industries Corporation Senior Notes,
10.75%, Due 1/30/02 37,605 40,331
Caesars World, Inc. Senior Subordinated
Debentures, 8.875%, Due 8/15/02 1,700 1,794
Chase Manhattan Corporation Floating Rate Notes,
5.7188%, Due 12/30/09 30,930 30,157
Citicorp Floating Rate Notes:
5.625%, Due 11/27/35 10,000 9,262
6.50%, Due 5/01/04 14,022 14,080
Coltec Industries, Inc. Debentures, 11.25%,
Due 12/01/15 415 434
Contifinancial Corporation Senior Notes, 8.375%,
Due 8/15/03 2,500 2,481
Domtar, Inc. Debentures, 11.25%, Due 9/15/17 2,900 3,081
First Bank System, Inc. Floating Rate
Subordinated Notes, 5.6875%, Due 11/30/10
(Putable at 100 on 11/30/00) 6,980 7,008
Ford Motor Credit Debt Unit with Premium Call
(Structured Enhanced Return Trusts 1995,
Series R-20), 9.75%, Due 2/03/98 (Acquired
2/08/95; Cost $4,998) (b) 5,000 5,275
Genfinance Luxembourg Floating Rate
Perpetual Eurobond:
6.125%, Due 5/29/49 9,000 9,000
6.25%, Due 12/29/49 5,000 5,000
Global Marine, Inc. Senior Secured Notes, 12.75%,
Due 12/15/99 2,975 3,232
Harrahs Operating, Inc. Guaranteed Senior
Subordinated Notes, 10.875%, Due 4/15/02 31,835 34,063
Health & Retirement Properties Trust Senior
Floating Rate Notes, Series B, 6.4075%,
Due 7/13/99 30,000 29,622
Hook-SupeRx, Inc. Senior Notes, 10.125%,
Due 6/01/02 12,670 13,451
Lear Seating Corporation Senior Subordinated
Notes, 11.25%, Due 7/15/00 9,900 10,247
MGM Grand Hotel Finance Corporation First
Mortgage Notes:
11.75%, Due 5/01/99 4,000 4,205
12.00%, Due 5/01/02 13,580 14,853
Magma Copper Company Senior Subordinated
Notes, 12.00%, Due 12/15/01 16,505 17,739
Marine Midland Banks, Inc. Floating Rate
Subordinated Notes:
5.6875%, Due 12/20/00 12,500 12,398
5.75%, Due 12/31/09 21,460 20,602
McDermott International, Inc. Senior Notes,
12.875%, Due 7/15/02 11,000 12,265
See notes to financial statements.
24
<PAGE>
- --------------------------------------------------------------------------------
STRONG ADVANTAGE FUND (continued)
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
- --------------------------------------------------------------------------------
NBD Bancorp, Inc. Subordinated Floating Rate
Notes, 5.75%, Due 12/18/05 $23,505 $ 23,365
National Westminster Bank Floating Rate Notes,
6.4875%, Due 9/29/49 20,000 19,785
New American Capital, Inc. Notes, 9.60%,
Due 1/12/99 (Acquired 3/22/96; Cost $10,604)(b) 10,000 10,580
New American Capital, Inc. Floating Rate Notes,
Series C, 7.0625%, Due 4/12/00
(Acquired 3/16/95; Cost $10,000)(b) 10,000 10,050
Newscorp Overseas Limited Floating Rate Debt
Unit with Swap Agreement (Structured
Enhanced Return Trusts 1995, Series R-27),
6.482%, Due 6/30/99 (Acquired 6/12/95;
Cost $27,120)(b) 28,250 25,425
Northwest Airlines, Inc. Guaranteed Senior Notes,
12.091%, Due 12/31/00 553 568
Nuevo Energy Company Senior Subordinated
Notes, 12.50%, Due 6/15/02 1,000 1,075
Okobank Subordinated Step-Up Perpetual
Floating Rate Notes, 7.1375%, Due 10/29/49 550 561
Purity Supreme, Inc. Senior Secured Notes,
Series B, 11.75%, Due 8/01/99 15,980 17,126
Rogers Cantel Mobile, Inc., Guaranteed Senior
Subordinated Notes, 11.125%, Due 7/15/02 15,000 15,844
Rogers Communications, Inc. Floating Rate Debt
Unit with Premium Call (Medium Term
Structured Enhanced Return Trusts 1995,
Series R-25), 8.5297%, Due 6/21/98
(Acquired 5/15/95; Cost $12,000)(b) 12,000 11,940
Rowan Companies, Inc. Senior Notes, 11.875%,
Due 12/01/01 6,250 6,734
Royal Caribbean Cruises, Ltd. Senior Subordinated
Notes, 11.375%, Due 5/15/02 7,000 7,516
SCI Television, Inc. First Secured Loan Facility
Variable Rate Notes, 8.50%, Due 6/30/98 12,000 12,060
SCI Television, Inc. Senior Secured Notes, 11.00%,
Due 6/30/05 14,000 14,980
Santa Fe Pacific Gold Corporation Senior
Debentures, 8.375%, Due 7/01/05 9,000 8,843
Savannah Emerging Markets CBO
Limited/Savannah Emerging Markets CBO
Corporation Senior Secured Floating Rate
Notes, 6.7477%, Due 7/25/09 (Acquired 7/12/96;
Cost $9,940)(b) 10,000 9,950
Swedbank Floating Rate Debt Unit (Medium Term
Structured Enhanced Return Trusts 1996,
Series R-34), 6.4391%, Due 11/10/02
(Acquired 5/23/96; Cost $25,000)(b) 25,000 25,000
System Energy Resources, Inc. First Mortgage
Bonds, 11.375%, Due 9/01/16 3,530 3,770
Tele Communications, Inc., Medium Term Notes:
Tranche #58, 6.332%, Due 12/20/00 10,000 9,922
Tranche #59, 6.332%, Due 12/20/00 4,975 4,938
Triton Energy Corporation Senior Subordinated
Discount Notes, Zero %, Due 11/01/97 32,700 30,043
UCAR Global Enterprises, Inc. Floating Rate Term
Loan, Tranche B, 7.625%, Due 11/17/02
(Acquired 11/17/95; Cost $4,062)(b) 4,042 4,052
Union Bank of Norway Dual Basis Notes (Medium
Term Structured Enhanced Return Trusts 1995,
Series R-31) 6.6875%, Due 10/25/00 (Acquired
11/06/95; Cost $15,000)(b) 15,000 15,210
Van Kampen Merritt Companies, Inc. Senior
Secured Notes, 9.75%, Due 2/15/03 9,900 10,618
Varity Corporation Senior Notes, 11.375%,
Due 11/15/98 6,040 6,099
Viacom International, Inc. Notes, 9.125%,
Due 8/15/99 27,219 27,868
Viacom International, Inc. Reset Notes, 8.75%,
Due 5/15/01 (Rate Reset Effective 5/15/98) 750 772
Wolverine Tube, Inc. Senior Subordinated Notes,
10.125%, Due 9/01/02 13,476 14,217
--------
TOTAL CORPORATE BONDS (COST $752,708) 761,804
NON-AGENCY MORTGAGE &
ASSET-BACKED SECURITIES 26.1%
AFC Mortgage Loan Trust Variable Rate
Asset-Backed Certificates, Series 1994-1,
Class 2A-1, 7.4705%, Due 5/25/25 3,979 4,059
Bellaire Finance, Inc. Commercial Mortgage
Pass-Thru Trust Certificates, Class B, 9.32%,
Due 2/20/08 (Acquired 3/01/96; Cost $6,090)(b) 5,800 6,032
California Federal Bank, A Federal Savings Bank
of Los Angeles, Variable Rate Mortgage
Pass-Thru Certificates, Series 1988 PAL-1,
Class A, 7.3294%, Due 2/25/18 2,379 2,376
Chase Mortgage Finance Corporation Mortgage
Pass-Thru Certificates, Series 1990-G,
Class A-Z1, 9.50%, Due 12/25/21 2,715 2,708
DLJ Mortgage Acceptance Corporation Variable
Rate Multifamily Mortgage Pass-Thru
Certificates, Series 1992-MF10, Class A-1,
7.375%, Due 12/22/02 5,954 6,036
Equipment Pass-Thru Investment Certificates Trust
Floating Rate Senior Certificates, Series 1996-1:
Class A, 6.4688%, Due 9/25/09 (Acquired
6/14/96; Cost $5,000)(b) 5,000 5,000
Class B, 7.2188%, Due 9/25/09 (Acquired
7/01/96; Cost $5,500)(b) 5,500 5,500
Class C, 10.4688%, Due 9/25/03 (Acquired
6/28/96; Cost $5,075)(b) 5,000 5,075
The Equitable Life Assurance Society of the
United States Collateralized Floating Rate
Notes, Series D-2, 6.4719%, Due 5/15/03
(Acquired 5/23/96-8/08/96; Cost $11,521)(b) 11,500 11,539
First Boston Mortgage Securities Corporation
Variable Rate Mortgage Pass-Thru Certificates,
Series 1994-MHC1:
Class C, 6.5375%, Due 4/25/11 9,600 9,624
Class D, 7.1375%, Due 4/25/11 5,200 5,206
Fund America Investors Corporation Variable
Rate Senior Pass-Thru Certificates, Series
1993-A, Class A-1, 7.4397%, Due 6/25/23 20,871 21,367
Glendale Federal Bank Variable Rate Senior
Pass-Thru Mortgage Securities, Series 1990-1,
Class A, 6.9993%, Due 10/25/29 2,387 2,396
Greenwich Capital Acceptance, Inc. Variable Rate
Mortgage Pass-Thru Certificates, Series 1991-1,
Class A, 7.1403%, Due 2/25/21 (Acquired
4/18/96; Cost $23,092)(b) 22,639 23,092
Homart Pooled Asset Financial Trust Floating
Rate Collateral Trust Certificates:
Class A-3, 7.3477%, Due 12/29/01 (Acquired
12/21/93; Cost $10,000)(b) 10,000 9,988
Class A-4, 8.0977%, Due 12/29/01 (Acquired
2/09/95; Cost $9,988)(b) 10,000 9,988
Merrill Lynch Home Equity Acceptance, Inc.
Subordinated Variable Rate Mortgage-Backed
Certificates, Series 1994-A, Class A-1, 6.50%,
Due 8/17/23 13,292 13,174
Merrill Lynch Mortgage Investors, Inc. Senior
Subordinated Pass-Thru Certificates,
Series 1988-H, Class A, 9.70%, Due 6/15/08 277 281
See notes to financial statements.
25
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) August 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
STRONG ADVANTAGE FUND (continued)
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
- --------------------------------------------------------------------------------
Merrill Lynch Mortgage Investors, Inc. Senior
Subordinated Variable Rate
Pass-Thru Certificates:
Series 1993-G, Class B, 5.40%, Due 12/15/13 $ 373 $ 370
Series 1994-F, Class M, 6.50%, Due 4/15/19 16,497 15,932
Series 1994-H, Class M, 6.50%, Due 6/15/19 5,000 4,870
Money Store Trust Variable Rate Asset-Backed
Certificates, Series 1996-B, Class A-10, 5.7419%,
Due 10/15/27 487 487
Morgan Stanley Capital I, Inc. Collateralized
Mortgage Obligation, Series 86-C,
Class C-4, 9.00%, Due 5/01/16 878 897
Morgan Stanley Mortgage Trust Variable Rate
Collateralized Mortgage Obligation, Series 35:
Class 35-1, 6.025%, Due 4/20/21 6,291 6,330
Class 35-2, Interest Only, 7,417.25%, Due 4/20/21 4 581
NYCTL 1996-1 Trust Tax Lien Collateralized
Bonds, Series 1996-1:
Class B, 6.91%, Due 5/25/05 (Acquired 6/05/96;
Cost $7,457)(b) 7,457 7,438
Class C, 7.11%, Due 5/25/05 (Acquired 6/05/96;
Cost $21)(b) 21 20
Prudential Home Mortgage Securities Company
Mortgage Pass-Thru Certificates, Series 1995-2,
Class A-3, 8.50%, Due 6/25/25 15,843 15,865
Prudential Home Mortgage Securities Company
Variable Rate Mortgage Pass-Thru Certificates,
Series 1988-1, Class A, 7.6426%, Due 4/25/18 2,020 2,056
RTC Mortgage Pass-Thru Securities, Inc., Series
1995-2, Class A-1A, 6.70%, Due 5/25/29 2,270 2,265
RTC Multifamily Variable Rate Mortgage
Certificates, Series 1992-M2, Class B-1, 6.5875%,
Due 3/25/20 5,017 4,976
RTC Variable Rate Mortgage Pass-Thru
Certificates, Series 1992-6, Class A-3, 7.6143%,
Due 1/25/26 13,366 13,549
RTC Variable Rate Mortgage Pass-Thru
Securities, Inc.:
Series 1992-6, Class B-9, 6.485%, Due 11/25/26 2,003 2,010
Series 1995-1, Class B-5, 6.7627%, Due 10/25/28 23,730 23,493
RTC Variable Rate Mortgage Pass-Thru Securities,
Inc. Manufactured Housing Certificates:
Series 1992-MH1, Class A-1, 7.00%, Due 2/15/19 509 510
Series 1992-MH1, Class B2, 5.8375%,
Due 8/15/19 (Acquired 4/21/95; Cost $6,930)(b) 7,039 6,916
Series 1992-MH2, Class A-1, 7.00%, Due 2/15/04 411 412
Ryland Acceptance Corporation IV Collateralized
Mortgage Bonds, Series 53, Class 53-E, 10.00%,
Due 10/25/18 2,859 2,987
Ryland Mortgage Securities Corporation Variable
Rate Mortgage Participation Securities,
Series 1992-3, Class A-2, 7.328%, Due 6/25/20 19,156 19,300
Ryland Mortgage Securities Corporation III
Variable Rate Collateralized Mortgage Bonds,
Series 1992-C, Class 3-A, 7.65%, Due 11/25/30 18,834 18,811
Ryland Mortgage Securities Corporation IV
Variable Rate Collateralized Mortgage Bonds,
Series 2, Class 3-A, 12.0191%, Due 6/25/23 1,204 1,258
SML Commercial Mortgage Trust Variable Rate
Pass-Thru Certificates, Series 1994-C1, Class A-1,
6.4688%, Due 9/18/99 8,000 8,009
Santa Barbara Savings & Loan Association
California Real Estate Mortgage Investment
Conduit Participation Certificates, Series 1988-A,
Class 2, Principal Only, Due 9/01/18 1,364 989
Suncoast Collateralized Mortgage Obligation
Trust III, Class C, 8.75%, Due 2/27/18 1,715 1,709
U-Haul Self-Storage Corporation Commercial
Mortgage Asset Trust Pass-Thru Certificates,
Series 1993-1, Class A1, 6.90%, Due 12/01/20
(Acquired 12/02/93; Cost $2,370)(b) 2,370 2,376
Western Federal Savings & Loan Association
Marina Del Rey California Variable Rate
Mortgage Pass-Thru Certificates, Series 1991-4,
Class A, 6.843%, Due 7/01/21 7,392 7,429
--------
TOTAL NON-AGENCY MORTGAGE &
ASSET-BACKED SECURITIES (COST $323,708) 315,286
UNITED STATES GOVERNMENT
AND AGENCY ISSUES 3.3%
FHLMC Participation Certificates:
7.342%, Due 7/01/24 17,833 18,240
9.00%, Due 1/01/05 491 511
9.50%, Due 8/01/19 2,065 2,203
10.75%, Due 10/01/00 98 103
11.00%, Due 10/01/00 thru 9/01/20 2,028 2,246
11.75%, Due 5/01/11 thru 6/01/11 1,817 2,052
12.00%, Due 9/01/11 thru 2/01/15 704 800
12.25%, Due 7/01/15 1,211 1,375
12.50%, Due 2/01/15 217 249
FNMA Guaranteed Real Estate Mortgage
Investment Conduit Pass-Thru Certificates,
13.50%, Due 9/01/14 58 67
FNMA Guaranteed Real Estate Mortgage
Investment Conduit Variable Rate Pass-Thru
Certificates, 7.53%, Due 12/01/17 5,363 5,525
GNMA Guaranteed Pass-Thru Certificates:
13.50%, Due 6/15/10 thru 11/15/14 167 195
15.00%, Due 8/15/11 thru 9/15/12 51 60
United States Treasury Notes, 6.25%, Due 7/31/98 5,745 5,738
--------
TOTAL UNITED STATES GOVERNMENT AND
AGENCY ISSUES (COST $38,659) 39,364
OPTIONS 0.1%
Merrill Lynch Capital Services, Inc. Swaption
(The agreement to receive a fixed payment rate
in exchange for the counterparty's right to sell
New American Capital, Inc. 17.25% Cumulative
Redeemable Preferred Stock at par to the
investor; exercisable on 8/01/97.) 32,000 124
Merrill Lynch Swaption (The option to receive a
fixed interest rate of 7.75%; exercisable at a
strike price of 100 beginning 4/09/04 and
expiring 4/09/25.) 32,667 1,503
-------
TOTAL OPTIONS (COST $1,513) 1,627
PREFERRED STOCKS 1.3%
Banco Central Hispanoamericano, SA Eurocap
Preferred, 7.8391% (COST $15,270) 600,000 15,270
SHORT-TERM INVESTMENTS (a) 5.0%
COMMERCIAL PAPER 1.6%
DISCOUNTED 1.5%
Boston Edison Company, Due 9/03/96 $9,000 9,000
Polysindo EKA Perkasa PT:
Due 9/03/96 3,000,000 IDR 1,281
Due 11/20/96 6,000,000 IDR 2,459
PT Texmaco Jaya, Due 11/20/96 13,000,000 IDR 5,326
-------
18,066
See notes to financial statements.
26
<PAGE>
- --------------------------------------------------------------------------------
STRONG ADVANTAGE FUND (continued)
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
- --------------------------------------------------------------------------------
INTEREST BEARING, DUE UPON DEMAND 0.1%
American Family Financial Services, Inc., 5.03% $ 283 $ 283
Johnson Controls, Inc., 5.05% 510 510
----------
793
----------
Total Commercial Paper 18,859
TIME DEPOSITS 0.8%
Citibank Nassau Time Deposit, 6.60%, Due 1/27/97 10,000 10,057
CORPORATE BONDS 2.5%
Arkla, Inc. Notes, 9.875%, Due 4/15/97 3,000 3,067
Tenet Healthcare Corporation Guaranteed
Euro-Dollar Bonds, Zero %, Due 8/12/97 2,500 2,334
Texas New Mexico Power Company First
Mortgage Bonds, Series T, 11.25%, Due 1/15/97 13,134 13,352
Tosco Corporation First Mortgage Bonds,
Series A, 9.00%, Due 3/15/97 8,000 8,118
USG Corporation Senior Notes, 8.00%,
Due 12/15/96 3,980 4,005
----------
Total Corporate Bonds 30,876
UNITED STATES GOVERNMENT ISSUES 0.1%
United States Treasury Bills:
Due 9/05/96 (c) 290 290
Due 9/12/96 (c) 20 20
Due 10/17/96 (c) 85 84
Due 10/24/96 (c) 35 35
Due 10/31/96 (c) 95 94
Due 11/14/96 (c) 30 30
Due 11/21/96 (c) 165 163
Due 11/29/96 (c) 30 30
----------
746
----------
TOTAL SHORT-TERM INVESTMENTS
(COST $60,479) 60,538
----------
TOTAL INVESTMENTS IN SECURITIES
(COST $1,192,337) 98.8% 1,193,889
Other Assets and Liabilities, Net 1.2% 14,584
----------
NET ASSETS 100.0% $1,208,473
==========
FUTURES
- -------
UNDERLYING
FACE AMOUNT UNREALIZED
EXPIRATION AT VALUE APPRECIATION
DATE (In Thousands) (In Thousands)
- --------------------------------------------------------------------------------
Sold:
550 Five-Year U.S. Treasury Notes 12/96 ($57,372) $470
116 Ten-Year U.S. Treasury Notes 12/96 (12,242) 4
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
- -------------------------------------------
VALUE UNREALIZED
SETTLEMENT IN USD DEPRECIATION
DATE (In Thousands) (In Thousands)
- --------------------------------------------------------------------------------
Sold:
3,000,000,000 IDR 9/04/96 ($1,280) ($ 11)
19,000,000,000 IDR 11/21/96 (7,952) (127)
PERCENTAGE OF
INDUSTRY DIVERSIFICATION NET ASSETS
- --------------------------------------------------------------------------------
Non-Agency Single Family ............................ 14.7%
Bank - Money Center ................................. 13.6
Media - Radio/TV .................................... 10.2
Non-Agency Asset-Backed ............................. 7.7
Leisure Service ..................................... 7.2
Bank - Super Regional ............................... 5.9
U.S. Government and Agency .......................... 3.3
Electric Utility .................................... 2.7
Non-Agency Commercial ............................... 2.6
Oil - North American Exploration & Production ....... 2.6
Real Estate ......................................... 2.5
Diversified Operations .............................. 2.2
Media - Publishing .................................. 2.1
Bank - Regional ..................................... 1.8
Savings & Loan ...................................... 1.7
Metals & Mining ..................................... 1.5
Retail - Food Chain ................................. 1.4
Auto and Truck Parts ................................ 1.4
Non-Agency Manufactured Housing ..................... 1.3
Telecommunication Service ........................... 1.3
Metal Products & Fabrication ........................ 1.2
Retail - Drug Store ................................. 1.1
Brokerage & Investment Management ................... 1.1
Energy - Alternate Source ........................... 1.0
Oil - North American Integrated ..................... 0.9
Yankee Corporate .................................... 0.8
Shoe & Apparel Manufacturing ........................ 0.8
Precious Metal/Gem/Stone ............................ 0.7
Non-Agency Multi Family ............................. 0.6
Oil Well Equipment & Service ........................ 0.6
Insurance - Property & Casualty ..................... 0.4
Automobile .......................................... 0.4
Steel ............................................... 0.3
Housing Related ..................................... 0.3
Paper & Forest Products ............................. 0.3
Natural Gas Distribution ............................ 0.3
Healthcare - Patient Care ........................... 0.2
Finance - Miscellaneous ............................. 0.1
Other Assets and Liabilities, Net ................... 1.2
-----
Total 100.0%
=====
PERCENTAGE OF
COUNTRY DIVERSIFICATION NET ASSETS
- --------------------------------------------------------------------------------
United States ....................................... 83.2%
United Kingdom ...................................... 5.6
Spain ............................................... 2.1
Sweden .............................................. 2.1
Canada .............................................. 1.6
Norway .............................................. 1.3
Luxembourg .......................................... 1.1
Chile ............................................... 0.8
Indonesia ........................................... 0.8
France .............................................. 0.2
Other Assets and Liabilities, Net ................... 1.2
-----
Total 100.0%
=====
See notes to financial statements.
27
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) August 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LEGEND
- ------
(a) Cash equivalents includes any security which has a maturity of less than
one year.
(b) Restricted security.
(c) All or a portion of security pledged to cover margin requirements for
futures contracts.
(d) Maturity date represents actual maturity or the longer of the next put date
or interest adjustment date. For U.S. Government Agency Securities,
maturity date represents actual maturity or the next interest adjustment
date.
(e) Variable rate security.
All principal amounts and costs are stated in thousands.
Percentages are stated as a percent of net assets.
ABBREVIATIONS
- -------------
The following is a list of abbreviations which 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
EDFA -- Economic Development Finance Authority
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
IDFA -- Industrial Development Finance Authority
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
CURRENCY ABBREVIATIONS
- ----------------------
IDR Indonesian Rupiah
USD United States Dollar
See notes to financial statements.
28
<PAGE>
STATEMENTS OF OPERATIONS
<TABLE>
- ---------------------------------------------------------------------------------------------------------------------------
For the Six Months Ended August 31, 1996 (Unaudited)
(In Thousands)
<CAPTION>
STRONG HERITAGE STRONG MUNICIPAL
MONEY FUND MONEY MARKET FUND
---------- -----------------
<S> <C> <C>
INTEREST INCOME $35,617 $35,672
EXPENSES:
Investment Advisory Fees 3,157 4,325
Custodian Fees 43 38
Shareholder Servicing Costs 141 466
Reports to Shareholders 252 416
Federal and State Registration Fees 288 84
Other 49 65
------- -------
Total Expenses before Waivers and Absorptions 3,930 5,394
Voluntary Expense Waivers and Absorptions by Advisor (3,733) --
------- -------
Expenses, Net 197 5,394
------- -------
NET INVESTMENT INCOME $35,420 $30,278
======= =======
STRONG MUNICIPAL STRONG
ADVANTAGE FUND ADVANTAGE FUND
-------------- --------------
INTEREST INCOME $ 6,863 $38,249
EXPENSES:
Investment Advisory Fees 823 3,273
Custodian Fees 11 51
Shareholder Servicing Costs 51 827
Reports to Shareholders 44 234
Federal and State Registration Fees 65 97
Other 15 46
------- -------
Total Expenses before Waivers and Absorptions 1,009 4,528
Voluntary Expense Waivers and Absorptions by Advisor (1,009) --
------- -------
Expenses, Net -- 4,528
------- -------
NET INVESTMENT INCOME 6,863 33,721
REALIZED AND UNREALIZED GAIN (LOSS):
Net Realized Gain (Loss) on:
Investments (28) (997)
Futures Contracts, Options and Forward Currency Contracts (204) 22
Change in Unrealized Appreciation/Depreciation on:
Investments 294 (2,116)
Futures Contracts, Options and Forward Currency Contracts (168) 451
------- -------
NET LOSS (106) (2,640)
------- -------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 6,757 $31,081
======= =======
29
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
STATEMENTS OF ASSETS AND LIABILITIES
- ----------------------------------------------------------------------------------------------------------------------------------
August 31, 1996 (Unaudited)
(In Thousands, Except Per Share Amounts)
<CAPTION>
STRONG HERITAGE STRONG MUNICIPAL
MONEY FUND MONEY MARKET FUND
--------------- -----------------
ASSETS:
<S> <C> <C>
Investments in Securities, at Amortized Cost $1,529,671 $1,690,239
Receivable from Brokers for Securities Sold -- 48,665
Interest Receivable 6,178 12,171
Other Assets 63 229
---------- ----------
Total Assets 1,535,912 1,751,304
LIABILITIES:
Payable to Brokers for Securities Purchased -- 37,380
Dividends Payable 7,346 5,340
Accrued Operating Expenses and Other Liabilities 82 57
---------- ----------
Total Liabilities 7,428 42,777
---------- ----------
NET ASSETS $1,528,484 $1,708,527
========== ==========
Capital Shares Outstanding (Unlimited Number Authorized) 1,528,484 1,708,527
NET ASSET VALUE PER SHARE $1.00 $1.00
===== =====
STRONG MUNICIPAL STRONG
ADVANTAGE FUND ADVANTAGE FUND
---------------- --------------
ASSETS:
Investments in Securities, at Value (Cost of $381,021 and $1,192,337, respectively) $ 381,165 $1,193,889
Receivable from Brokers for Securities and
Forward Foreign Currency Contracts Sold 11,736 13,714
Interest Receivable 4,347 17,746
Other Assets 113 1,495
---------- ----------
Total Assets 397,361 1,226,844
LIABILITIES:
Payable to Brokers for Securities Purchased 8,700 11,731
Dividends Payable 1,668 6,499
Accrued Operating Expenses and Other Liabilities 76 141
---------- ----------
Total Liabilities 10,444 18,371
---------- ----------
NET ASSETS $ 386,917 $1,208,473
========== ==========
Capital Shares Outstanding (Unlimited Number Authorized) 77,435 120,767
NET ASSET VALUE PER SHARE $5.00 $10.01
===== ======
</TABLE>
See notes to financial statements.
30
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------------
(In Thousands)
STRONG HERITAGE STRONG MUNICIPAL
MONEY FUND MONEY MARKET FUND
-------------------------------- ------------------------------------------------
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED SIX MONTHS ENDED PERIOD ENDED YEAR ENDED
AUG. 31, 1996 FEB. 29, 1996 AUG. 31, 1996 FEB. 29, 1996 DEC. 31, 1995
------------- ------------- ------------- ------------- -------------
(UNAUDITED) (NOTE 1) (UNAUDITED) (NOTE 1)
OPERATIONS:
<S> <C> <C> <C> <C> <C>
Net Investment Income $ 35,420 $ 18,955 $ 30,278 $ 9,039 $ 52,328
CAPITAL SHARE TRANSACTIONS 586,431 941,953 99,622 192,463 155,825
DISTRIBUTIONS:
From Net Investment Income (35,420) (18,955) (30,278) (9,039) (52,328)
---------- -------- ---------- ---------- ----------
TOTAL INCREASE IN NET ASSETS 586,431 941,953 99,622 192,463 155,825
NET ASSETS:
Beginning of Period 942,053 100 1,608,905 1,416,442 1,260,617
---------- -------- ---------- ---------- ----------
End of Period $1,528,484 $942,053 $1,708,527 $1,608,905 $1,416,442
========== ======== ========== ========== ==========
STRONG MUNICIPAL STRONG
ADVANTAGE FUND ADVANTAGE FUND
--------------------------------- --------------------------------------------------
SIX MONTHS ENDED PERIOD ENDED SIX MONTHS ENDED PERIOD ENDED YEAR ENDED
AUG. 31, 1996 FEB. 29, 1996 AUG. 31, 1996 FEB. 29, 1996 DEC. 31, 1995
------------- ------------- ------------- ------------- -------------
(UNAUDITED) (NOTE 1) (UNAUDITED) (NOTE 1)
OPERATIONS:
Net Investment Income $ 6,863 $ 531 $ 33,721 $ 10,186 $ 59,697
Net Realized Gain (Loss) (232) 1 (975) 702 (5,847)
Change in Unrealized Appreciation/
Depreciation 126 (150) (1,665) (1,464) 10,677
---------- --------- ---------- ---------- ----------
Increase in Net Assets Resulting
from Operations 6,757 382 31,081 9,424 64,527
CAPITAL SHARE TRANSACTIONS 254,530 132,642 211,326 10,812 74,507
DISTRIBUTIONS:
From Net Investment Income (6,863) (531) (33,714) (10,157) (59,697)
In Excess of Net Investment Income -- -- -- -- (144)
---------- -------- --------- ---------- ----------
TOTAL INCREASE IN NET ASSETS 254,424 132,493 208,693 10,079 79,193
NET ASSETS:
Beginning of Period 132,493 -- 999,780 989,701 910,508
---------- -------- ---------- ---------- ----------
End of Period $ 386,917 $132,493 $1,208,473 $ 999,780 $ 989,701
========== ======== ========== ========== ==========
31
</TABLE>
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
August 31, 1996 (Unaudited)
1. ORGANIZATION
The accompanying financial statements represent the Strong Cash Management
Funds, which include the following diversified, open-end management
investment companies registered under the Investment Company Act of 1940:
_ Strong Heritage Money Fund (a series of Strong Heritage Reserve Series,
Inc.)
_ Strong Municipal Money Market Fund (a series of Strong Municipal Funds,
Inc.)
_ Strong Municipal Advantage Fund (a series of Strong Municipal Funds,
Inc.)
_ Strong Advantage Fund, Inc.
The Board of Directors approved changing the Strong Municipal Money Market
Fund and the Strong Advantage Fund, Inc. fiscal year-ends from December 31
to February 29 in 1995. Inception dates for the Strong Heritage Money Fund
and the Strong Municipal Advantage Fund were June 29, 1995 and November 30,
1995, respectively.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Funds in the preparation of their financial statements.
(A) Security Valuation-- Securities of the Strong Municipal Advantage Fund
and the Strong Advantage Fund, Inc. are valued at fair value through
valuations obtained by a commercial pricing service or the mean of the
bid and asked prices when no last sales price is available. Securities
for which market quotations are not readily available are valued at
fair value as determined in good faith under consistently applied
procedures established by and under the general supervision of the
Board of Directors. Securities which are purchased within 60 days of
their stated maturity and all investments in the Strong Heritage Money
Fund and the Strong Municipal Money Market Fund are valued at
amortized cost, which approximates current value. Amortized cost for
Federal income tax and financial reporting purposes is the same.
The Funds may own certain investment securities which are restricted
as to resale. These securities are valued after giving due
consideration to pertinent factors, including recent private sales,
market conditions and the issuer's financial performance. The Funds
generally bear the costs, if any, associated with the disposition of
restricted securities. Aggregate cost and fair value of these
restricted securities held at August 31, 1996 were as follows (in
thousands):
STRONG HERITAGE STRONG
MONEY FUND ADVANTAGE FUND
---------- --------------
Aggregate Fair Value $176,004 $210,446
Aggregate Cost 175,011 211,768
Percent of Net Assets 11.5%* 17.4%**
*Of these securities which are restricted to resale, 100% are eligible
for resale pursuant to Rule 144A under the Securities Act of 1933 and
also have been determined to be liquid by the Advisor based upon
guidelines established by the Fund's Board of Directors.
**Of these securities which are restricted to resale, 51.2% are
eligible for resale pursuant to Rule 144A under the Securities Act of
1933 and also have been determined to be liquid by the Advisor based
upon guidelines established by the Fund's Board of Directors.
(B) Federal Income and Excise Taxes and Distributions to Shareholders --
It is the Funds' policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and
to distribute substantially all of their taxable income to their
shareholders in a manner which results in no tax cost to the Funds.
Therefore, no Federal income or excise tax provision is required.
The character of distributions made during the year from net
investment income or net realized gains may differ from the
characterization for Federal income tax purposes due to differences in
the recognition of income and expense items for financial statement
and tax purposes. Where appropriate, reclassifications between net
asset accounts are made for such differences that are permanent in
nature.
(C) Realized Gains and Losses on Investment Transactions -- Gains or
losses realized on investment transactions are determined by comparing
the identified cost of the security lot sold with the net sales
proceeds.
(D) Futures -- Upon entering into a futures contract, the Funds pledge to
the broker cash or other investments equal to the minimum "initial
margin" requirements of the exchange. The Funds also receive from or
pay to the broker an amount of cash equal to the daily fluctuation in
the value of the contract. Such receipts or payments are known as
"variation margin," and are recorded as unrealized gains or losses.
When the futures contract is closed, a realized gain or loss is
recorded equal to the difference between the value of the contract at
the time it was opened and the value at the time it was closed.
(E) Options -- Premiums received by the Funds upon writing put or call
options are recorded as an asset with a corresponding liability which
is subsequently adjusted to the current market value of the option.
When an option expires, is exercised, or is closed, the Funds realize
a gain or loss, and the liability is eliminated. The Funds continue to
bear the risk of adverse movements in the price of the underlying
asset during the period of the option, although any potential loss
during the period would be reduced by the amount of the option premium
received.
32
<PAGE>
- --------------------------------------------------------------------------------
August 31, 1996 (Unaudited)
(F) Foreign Currency Translation -- Investment securities and other assets
and liabilities initially expressed in foreign currencies are
converted to U.S. dollars based upon current exchange rates. Purchases
and sales of foreign investment securities and income are converted to
U.S. dollars based upon currency exchange rates prevailing on the
respective dates of such transactions. The effect of changes in
foreign exchange rates on realized and unrealized security gains or
losses is reflected as a component of such gains or losses.
(G) Forward Foreign Currency Exchange Contracts -- Forward foreign
currency exchange contracts are valued at the forward rate and are
marked-to-market daily. The change in market value is recorded as an
unrealized gain or loss. When the contract is closed, the Funds record
an exchange gain or loss equal to the difference between the value of
the contract at the time it was opened and the value at the time it
was closed.
(H) Additional Investment Risk -- The use of futures contracts, options,
foreign denominated assets, forward foreign currency exchange
contracts and other similar instruments for purposes of hedging the
Funds' investment portfolios involves, to varying degrees, elements of
market risk in excess of the amount recognized in the statement of
assets and liabilities. The predominant risk with futures contracts is
an imperfect correlation between the value of the contracts and the
underlying securities. Foreign denominated assets and forward foreign
currency exchange contracts may involve greater risks than domestic
transactions, including currency, political and economic, regulatory
and market risks.
(I) Other -- Investment security transactions are recorded as of the trade
date. Dividend income and distributions to shareholders are recorded
on the ex-dividend date. Interest income is recorded on the accrual
basis and includes amortization of premium and discounts.
3. NET ASSETS
Net assets as of August 31, 1996 were as follows (in thousands):
<TABLE>
<CAPTION>
STRONG HERITAGE STRONG MUNICIPAL STRONG MUNICIPAL STRONG
MONEY FUND MONEY MARKET FUND ADVANTAGE FUND ADVANTAGE FUND
---------- ----------------- -------------- --------------
<S> <C> <C> <C> <C>
Capital Stock $1,528,484 $1,708,527 $387,172 $1,215,100
Undistributed Net Investment Income -- -- -- 6
Undistributed Net Realized Loss -- -- (231) (8,521)
Net Unrealized Appreciation (Depreciation) -- -- (24) 1,888
---------- ---------- --------- ----------
$1,528,484 $1,708,527 $386,917 $1,208,473
========== ========== ======== ==========
</TABLE>
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Funds for the six months ended August 31,
1996, the period ended February 29, 1996 and the year ended December 31,
1995 were as follows (in thousands):
<TABLE>
AUGUST 31, 1996 FEBRUARY 29, 1996 DECEMBER 31, 1995
--------------- ----------------- -----------------
<CAPTION>
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS
------ ------- ------ ------- ------ -------
STRONG HERITAGE MONEY FUND
<S> <C> <C> <C> <C>
Shares Sold 1,445,353 $1,445,353 1,417,145 $1,417,145
Dividends Reinvested 29,816 29,816 13,892 13,892
Shares Redeemed (888,738) (888,738) (489,084) (489,084)
--------- ---------- --------- ----------
586,431 $ 586,431 941,953 $ 941,953
========= ========== ========= ==========
STRONG MUNICIPAL MONEY MARKET FUND
Shares Sold 1,480,207 $1,480,207 700,050 $ 700,050 2,581,413 $2,581,413
Dividends Reinvested 28,062 28,062 9,703 9,703 48,824 48,824
Shares Redeemed (1,408,647) (1,408,647) (517,290) (517,290) (2,474,412)(2,474,412)
---------- ---------- -------- -------- ---------- ----------
99,622 $ 99,622 192,463 $ 192,463 155,825 $ 155,825
========== ========== ======= ========== ========== ==========
STRONG MUNICIPAL ADVANTAGE FUND
Shares Sold 76,414 $ 381,339 28,453 $ 142,671
Dividends Reinvested 957 4,778 26 131
Shares Redeemed (26,389) (131,587) (2,026) (10,160)
------- -------- ------ -------
50,982 $ 254,530 26,453 $ 132,642
====== ========== ====== ==========
STRONG ADVANTAGE FUND
Shares Sold 54,975 $ 550,099 15,171 $ 152,433 79,688 $ 797,729
Dividends Reinvested 2,820 28,225 938 9,418 5,253 52,563
Shares Redeemed (36,673) (366,998) (15,034) (151,039) (77,565) (775,785)
------- -------- ------- -------- ------- --------
21,122 $ 211,326 1,075 $ 10,812 7,376 $ 74,507
======= ========== ======= ========== ======= ==========
33
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
August 31, 1996 (Unaudited)
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 the following annualized rates of the average
daily net assets: Strong Heritage Money Fund and Strong Municipal Money
Market Fund .50%, Strong Municipal Advantage Fund and Strong Advantage Fund
.60%. Advisory fees are subject to reimbursement by the Advisor if the
Funds' operating expenses exceed certain levels. Shareholder recordkeeping
and related service fees are based on contractually established rates for
each open and closed shareholder account. In addition, the Advisor is
compensated for certain other services related to costs incurred for
reports to shareholders. Certain information regarding related party
transactions for the period ended August 31, 1996, excluding the effect of
waivers and absorptions, is as follows (in thousands):
<TABLE>
<CAPTION>
STRONG HERITAGE STRONG MUNICIPAL STRONG MUNICIPAL STRONG
MONEY FUND MONEY MARKET FUND ADVANTAGE FUND ADVANTAGE FUND
---------- ----------------- -------------- --------------
<S> <C> <C> <C> <C>
Payable to Advisor at August 31, 1996 $95 $15 $76 $87
Other Shareholder Servicing Expenses
Paid to Advisor 4 12 1 12
Unaffiliated Directors' Fees 6 12 1 9
</TABLE>
6. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of long-term securities for the period
ended August 31, 1996 were as follows (in thousands):
STRONG MUNICIPAL STRONG
ADVANTAGE FUND ADVANTAGE FUND
-------------- --------------
Purchases:
U.S. Government and Agency $ -- $ 37,556
Other 150,073 791,127
Sales:
U.S. Government and Agency -- 60,298
Other 50,412 590,113
7. INCOME TAX INFORMATION
At August 31, 1996, the investment cost and gross unrealized appreciation
and depreciation on investments for Federal income tax purposes were as
follows (in thousands):
STRONG MUNICIPAL STRONG
ADVANTAGE FUND ADVANTAGE FUND
-------------- --------------
Aggregate Investment Cost $381,033 $1,192,345
======== ==========
Aggregate Unrealized
Appreciation $ 1,020 $ 6,815
Depreciation (888) (5,271)
-------- ----------
$ 132 $ 1,544
======== ==========
34
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS PERIOD ENDED
ENDED AUG. 31 FEB. 29
STRONG HERITAGE MONEY FUND 1996(a) 1996(b)
------- -------
(UNAUDITED) (NOTE 1)
SELECTED PER-SHARE DATA
- -----------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
Net Investment Income 0.03 0.04
Distributions from Net Investment Income (0.03) (0.04)
--------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
========== =========
TOTAL RETURN +2.8% +4.1%
RATIOS AND SUPPLEMENTAL DATA
- ----------------------------
Net Assets, End of Period (In Thousands) $1,528,484 $ 942,053
Ratio of Expenses to Average Net Assets 0.0%* 0.0%*
Ratio of Expenses to Average Net Assets
Without Waivers and Absorptions 0.6%* 0.6%*
Ratio of Net Investment Income to Average Net Assets 5.6%* 5.9%*
<TABLE>
<CAPTION>
SIX MONTHS PERIOD ENDED
ENDED AUG.31 FEB. 29
STRONG MUNICIPAL MONEY MARKET FUND 1996(a) 1996(c) 1995 1994 1993 1992
------- ------- ---- ---- ---- ----
(UNAUDITED) (NOTE 1)
SELECTED PER-SHARE DATA
- -----------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net Investment Income 0.02 0.01 0.04 0.03 0.02 0.03
Distributions from Net Investment Income(d) (0.02) (0.01) (0.04) (0.03) (0.02) (0.03)
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ========== ==========
TOTAL RETURN +1.8% +0.6% +4.1% +2.9% +2.5% +3.4%
RATIOS AND SUPPLEMENTAL DATA
- ----------------------------
Net Assets, End of Period (In Thousands) $1,708,527 $1,608,905 $1,416,442 $1,260,617 $1,172,560 $1,105,491
Ratio of Expenses to Average Net Assets 0.6%* 0.6%* 0.6% 0.6% 0.7% 0.7%
Ratio of Expenses to Average Net Assets
Without Waivers 0.6%* 0.6%* 0.6% 0.6% 0.7% 0.7%
Ratio of Net Investment Income to Average Net Assets 3.5%* 3.6%* 4.0% 2.9% 2.5% 3.3%
STRONG MUNICIPAL MONEY MARKET FUND 1991 1990 1989 1988 1987
---- ---- ---- ---- ----
SELECTED PER-SHARE DATA
- -----------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net Investment Income 0.05 0.06 0.06 0.05 0.05
Distributions from Net Investment Income(d) (0.05) (0.06) (0.06) (0.05) (0.05)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ========= ======== ======== ========
TOTAL RETURN +5.2% +6.1% +6.1% +5.2% +4.7%
RATIOS AND SUPPLEMENTAL DATA
- ----------------------------
Net Assets, End of Period (In Thousands) $782,482 $ 218,205 $ 73,802 $ 77,465 $ 59,085
Ratio of Expenses to Average Net Assets 0.7% 0.8% 0.9% 0.8% 0.6%
Ratio of Expenses to Average Net Assets
Without Waivers 0.7% 0.8% 0.9% 0.8% 1.0%
Ratio of Net Investment Income to Average Net Assets 5.0% 6.0% 5.9% 5.0% 4.7%
</TABLE>
* Calculated on an annualized basis.
(a) Total return is not annualized.
(b) For the period from June 29, 1995 (inception) to February 29, 1996. Total
return is not annualized.
(c) For the two month period ended February 29, 1996. Total return is not
annualized.
(d) Tax-exempt for regular Federal income tax purposes.
35
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
- --------------------------------------------------------------------------------
SIX MONTHS PERIOD ENDED
ENDED AUG. 31 FEB. 29
STRONG MUNICIPAL ADVANTAGE FUND 1996(a) 1996(b)
---------- -------
(UNAUDITED) (NOTE 1)
SELECTED PER-SHARE DATA
- -----------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 5.01 $ 5.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income 0.13 0.06
Net Realized and Unrealized Gains
(Losses) on Investments (0.01) 0.01
----- ----
Total from Investment Operations 0.12 0.07
LESS DISTRIBUTIONS:
From Net Investment Income (0.13) (0.06)
----- -----
Total Distributions (0.13) (0.06)
----- -----
NET ASSET VALUE, END OF PERIOD $ 5.00 $ 5.01
========== ========
TOTAL RETURN +2.4% +1.4%
RATIOS AND SUPPLEMENTAL DATA
- ----------------------------
Net Assets, End of Period (In Thousands) $ 386,917 $132,493
Ratio of Expenses to Average Net Assets 0.0%* 0.0%*
Ratio of Expenses to Average Net Assets
Without Waivers and Absorptions 0.7%* 0.7%*
Ratio of Net Investment Income to Average Net Assets 5.0%* 4.9%*
Portfolio Turnover Rate 40.6% 17.1%
<TABLE>
<CAPTION>
SIX MONTHS PERIOD ENDED
ENDED AUG. 31 FEB. 29
STRONG ADVANTAGE FUND 1996(a) 1996(c) 1995 1994 1993 1992
------------- ------------ ---- ---- ---- ----
(UNAUDITED) (NOTE 1)
SELECTED PER-SHARE DATA
- -----------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.03 $ 10.04 $ 9.98 $ 10.19 $ 10.01 $ 9.90
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income 0.31 0.10 0.67 0.55 0.59 0.70
Net Realized and Unrealized Gains
(Losses) on Investments (0.02) (0.01) 0.06 (0.19) 0.18 0.11
----- ----- ---- ----- ---- ----
Total from Investment Operations 0.29 0.09 0.73 0.36 0.77 0.81
LESS DISTRIBUTIONS:
From Net Investment Income (0.31) (0.10) (0.67) (0.55) (0.59) (0.70)
In Excess of Net Realized Gains -- -- -- (0.02) -- --
----- ----- ----- ----- ----- -----
Total Distributions (0.31) (0.10) (0.67) (0.57) (0.59) (0.70)
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 10.01 $ 10.03 $ 10.04 $ 9.98 $ 10.19 $ 10.01
========== ========= ========= ========= ========= =========
TOTAL RETURN +3.0% +0.9% +7.5% +3.6% +7.9% +8.4%
RATIOS AND SUPPLEMENTAL DATA
- ----------------------------
Net Assets, End of Period (In Thousands) $1,208,473 $999,780 $989,701 $910,508 $415,465 $272,348
Ratio of Expenses to Average Net Assets 0.8%* 0.8%* 0.8% 0.8% 0.9% 1.0%
Ratio of Expenses to Average Net Assets
Without Waivers 0.8%* 0.8%* 0.8% 0.8% 0.9% 1.0%
Ratio of Net Investment Income to Average Net Assets 6.2%* 6.3%* 6.6% 5.6% 5.8% 7.0%
Portfolio Turnover Rate 61.8% 17.2% 183.7% 221.0% 304.8% 316.1%
STRONG ADVANTAGE FUND 1991 1990 1989 1988(d)
---- ---- ---- -------
SELECTED PER-SHARE DATA
- -----------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.67 $ 9.87 $ 10.00 $ 9.99
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income 0.76 0.83 1.03 0.09
Net Realized and Unrealized Gains
(Losses) on Investments 0.23 (0.20) (0.13) 0.01
---- ----- ----- ----
Total from Investment Operations 0.99 0.63 0.90 0.10
LESS DISTRIBUTIONS:
From Net Investment Income (0.76) (0.83) (1.03) (0.09)
In Excess of Net Realized Gains -- -- -- --
----- ----- ----- -----
Total Distributions (0.76) (0.83) (1.03) (0.09)
----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 9.90 $ 9.67 $ 9.87 $ 10.00
======== ======== ======== =========
TOTAL RETURN +10.6% +6.6% +9.4% +1.0%
RATIOS AND SUPPLEMENTAL DATA
- ----------------------------
Net Assets, End of Period (In Thousands) $143,215 $119,189 $142,807 $ 7,544
Ratio of Expenses to Average Net Assets 1.2% 1.2% 1.1% 1.1%*
Ratio of Expenses to Average Net Assets
Without Waivers 1.2% 1.2% 1.2% 1.7%*
Ratio of Net Investment Income to Average Net Assets 7.8% 8.5% 10.0% 11.1%*
Portfolio Turnover Rate 503.0% 274.1% 211.3% 22.9%
</TABLE>
* Calculated on an annualized basis.
(a) Total return and portfolio turnover rate are not annualized.
(b) For the period from November 30, 1995 (inception) to February 29, 1996.
Total return and portfolio turnover rate are not annualized.
(c) For the two month period ended February 29, 1996. Total return and
portfolio turnover rate are not annualized.
(d) Inception date is November 25, 1988. Total return and portfolio turnover
rate are not annualized.
36
<PAGE>
SHAREHOLDER PRIVILIGES*
STRONG FUNDS
[PICTURE OF TELEPHONE]
24-HOUR SERVICE
TELEPHONE PURCHASE
Make additional investments into any Strong Fund by calling us toll-free at
1-800-368-3863.
TELEPHONE EXCHANGE
If your financial goals change, you can exchange your investments between any of
the Strong Funds.
TELEPHONE REDEMPTION
You can call toll-free to redeem your mutual fund shares at any time. Your
shares will be redeemed no later than the close of the next business day.
STRONG FUNDS
[PICTURE OF DOLLAR SIGN]
AUTOMATIC EXCHANGE
AUTOMATIC INVESTMENT PLAN
This plan allows you to set up regular transfers from your bank checking or NOW
account to your Strong Funds account.
PAYROLL DIRECT DEPOSIT PLAN
You can automatically transfer all or a portion of your net pay at each pay
period. This eliminates the delay of depositing paychecks to your bank and then
sending a check through the mail to Strong Funds.
AUTOMATIC EXCHANGE PLAN
This plan allows you to exchange money from one Strong Fund to another. For
example, you may want to set up automatic exchanges from a money market fund to
an equity fund.
For more information about these privileges, call us at 1-800-368-3863.
To reduce the volume of mail you receive, only one copy of certain materials,
such as prospectuses and shareholder reports, is mailed to your household.
Please call 1-800-368-3863 if you wish to receive additional copies, free of
charge.
* Each Fund reserves the right to terminate or modify any of these privileges.
<PAGE>
Bulk Rate
U.S. Postage
PAID
Milwaukee, WI
Permit No. 2652
FOR LITERATURE AND INFORMATION REQUESTS,
CALL 1-800-368-1030.
TO DISCUSS AN EXISTING ACCOUNT OR
CONDUCT A TRANSACTION,
CALL 1-800-368-3863.
For a prospectus containing more complete information, including management fees
and expenses, please call 1-800-368-1030. Please read it carefully before
investing or sending money. This annual report does not constitute an offer for
the sale of securities. Strong Funds are offered for sale by prospectus only.
[Strong Funds Logo]
STRONG FUNDS DISTRIBUTORS, INC.
P.O. Box 2936
Milwaukee, Wisconsin 53201
http://www.strong-funds.com
3615I96O
