<PAGE>
- --------------------------------------------------------------------------------
THE STRONG
CASH MANAGEMENT FUNDS
SEMI-ANNUAL REPORT o AUGUST 31, 1997
[PHOTO OF CHILDREN LAUGHING]
THE STRONG HERTIAGE MONEY FUND
--------------------------------------
THE STRONG MUNICIPAL MONEY MARKET FUND
--------------------------------------
THE STRONG MUNICIPAL ADVANTAGE FUND
--------------------------------------
THE STRONG ADVANTAGE FUND
[STRONG LOGO]
STRONG FUNDS
<PAGE>
8
EIGHT BASIC PRINCIPLES FOR SUCCESSFUL MUTUAL FUND INVESTING
These common-sense rules are followed by many successful investors. They make
sense for beginners, too. If you have a question on these principles, or would
like to discuss them with us, please contact us at 1-800-368-3863. We're here 24
hours a day, seven days a week to take your call.
- --------------------------------------------------------------------------------
[PICTURE OF FOLDER LABELED INVESTMENTS]
1. HAVE A PLAN. Even a simple plan can help you take control of your financial
future. Review your plan once a year, or if your circumstances change.
- --------------------------------------------------------------------------------
[PICTURE OF CLOCK]
2. START INVESTING AS SOON AS POSSIBLE. Make time a valuable ally. Let it put
the power of compounding to work for you, while helping to reduce your potential
investment risk.
- --------------------------------------------------------------------------------
[PICTURE OF PIE CHART OF ASSET DIVERSIFICATION]
3. DIVERSIFY YOUR PORTFOLIO. By investing in different asset classes - stocks,
bonds, and cash - you help protect against poor performance in one type of
investment while including investments most likely to help you achieve your
important goals.
- --------------------------------------------------------------------------------
[PICTURE OF MEMO REMINDER TO INVEST]
4. INVEST REGULARLY. Investing is a process, not a one-time event. By investing
regularly over the long term, you reduce the impact of short-term market
gyrations, and you attend to your long-term plan before you're tempted to spend
those assets on short-term needs.
- --------------------------------------------------------------------------------
[PICTURE OF GRAPH SLOPING UPWARD]
5. MAINTAIN A LONG-TERM PERSPECTIVE. For most individuals, the best discipline
is staying invested as market conditions change. Reactive, emotional investment
decisions are all too often a source of regret - and of principal loss.
- --------------------------------------------------------------------------------
[PICTURE OF PIE CHART OF ASSET DIVERSIFICATION EMPHASIZING STOCKS]
6. CONSIDER STOCKS TO HELP ACHIEVE MAJOR LONG-TERM GOALS. Over time, stocks have
provided the more powerful returns needed to help the value of your investments
stay well ahead of inflation.
- --------------------------------------------------------------------------------
[PICTURE OF DOLLAR SIGN]
7. KEEP A COMFORTABLE AMOUNT OF CASH IN YOUR PORTFOLIO. To meet current needs,
including emergencies, use a money market fund or a bank account - not your
long-term investment assets.
- --------------------------------------------------------------------------------
[PICTURE OF MAGNIFYING GLASS]
8. KNOW WHAT YOU'RE BUYING. Make sure you understand the potential risks and
rewards associated with each of your investments. Ask questions...request
information...make up your own mind. And choose a fund company that helps you
make informed investment decisions.
<PAGE>
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THE STRONG
CASH MANAGEMENT FUNDS
SEMI-ANNUAL REPORT o AUGUST 31, 1997
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 ..........................14
The Strong Municipal Advantage Fund .............................22
The Strong Advantage Fund .......................................27
Statements of Assets and Liabilities ................................32
Statements of Operations ............................................33
Statements of Changes in Net Assets .................................34
Notes to Financial Statements .......................................35
FINANCIAL HIGHLIGHTS .....................................................38
<PAGE>
THE STRONG HERITAGE MONEY FUND
OUR PRIMARY MEANS OF ADDING VALUE OVER THE PAST SIX MONTHS HAS BEEN THROUGH
SECURITY SELECTION.
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.(1)
The Strong Heritage Money Fund continued to perform very well over the past six
months. Through August 31, 1997, Lipper Analytical Services, Inc. ranked the
Fund in the top 1% of money funds for the 6-month, 1-year, and since-inception
periods, out of 308, 294, and 267 money market funds, respectively, based on
total returns.(2)
================================
YIELD SUMMARY(2)
As of 8-29-97
================================
7-DAY CURRENT YIELD 5.40%
7-DAY EFFECTIVE YIELD 5.55%
AVERAGE MATURITY 42 DAYS
================================
At the beginning of the Fund's fiscal year in March, money market yields rose in
anticipation of an interest-rate hike from the Federal Reserve. The Fed obliged
in late March by raising its target rate for Federal Funds by 25 basis points to
5.50%. Following the Fed's move, short-term rates stabilized. Commercial paper
yields ended the six-month period higher, exactly reflecting the amount of the
Fed's rate hike.
The relative stability of short-term interest rates can be attributed to a
consistently benign economic environment. While Gross Domestic Product growth
has remained firm, no signs of a significant risk of higher inflation have
emerged. The absence of inflationary pressure, in turn, has kept the Federal
Reserve on the sidelines since the rate increase in March. With no realistic
threat of a change in monetary policy, money market rates have had little reason
to vary.
The very low degree of volatility in short-term rates has kept us from using
duration management to add value to the Fund for most of 1997. Because our
analysis has indicated that the Federal Reserve has had no reason to either
raise or lower its rate targets, we have maintained a neutral average maturity.
Similarly, the shape of the money market yield curve has remained fairly stable,
particularly over the past three months, preventing us from making strategic
plays to benefit from any shifts in it.
Therefore, our primary means of adding value over the past six months has been
through security selection. Certain issues of asset-backed commercial paper in
particular have offered us the opportunity to pick up a few extra basis points
of yield.
2
<PAGE>
OUTLOOK
We don't see too many clouds on the horizon at present. The most likely scenario
we envision is that the U.S. economy will continue to generate decent growth
with little inflationary pressure.
Even with both labor and industrial production running near capacity, the
tendency for consumer and producer prices to move upward has yet to
appear in this economic cycle. With inflation tame, employment high, and growth
satisfactory, the Federal Reserve is likely to leave monetary policy on hold for
the next quarter or two. Consequently, short-term interest rates should continue
to be fairly stable. Thus we intend to keep our portfolio approach unchanged.
[PHOTO OF JAY N. MUELLER]
As always, we thank you for your confidence. We remain committed to meeting your
investment needs in the future.
Sincerely,
/s/Jay N. Mueller
Jay N. Mueller
Portfolio Manager
================================================================================
3-MONTH TREASURY BILL YIELDS
Through 8-31-97
================================================================================
[GRAPH]
8-96 5.28%
9-96 5.03%
10-96 5.14%
11-96 5.12%
12-96 5.17%
1-97 5.14%
2-97 5.21%
3-97 5.32%
4-97 5.23%
5-97 4.93%
6-97 5.16%
7-97 5.23%
8-97 5.21%
Source: Bloomberg
================================================================================
1 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.
2 Yields are annualized for the 7-day period ended 8-29-97. Effective yields
reflect the compounding of income. Yields and rankings are historical and
do not represent future results. Yields will fluctuate. The Fund's Advisor
temporarily waived 0.20% in management fees and absorbed 0.09% in expenses
for the Fund. Otherwise, the Fund's current yield would have been 5.11%,
and its effective yield would have been 5.24%.
3
<PAGE>
THE STRONG MUNICIPAL MONEY MARKET FUND
THROUGHOUT THIS PERIOD, WE KEPT THE FUND'S MATURITY CONSIDERABLY LONGER THAN
MARKET LEVELS.
The Strong Municipal Money Market Fund seeks federally tax-exempt current
income, a stable share price, and daily liquidity. The Fund invests in
high-quality, short-term municipal obligations that present minimal credit
risk.(1)
Our goal is to provide a steady stream of tax-exempt income, consistent with our
objective of a stable share price and daily liquidity. This Fund can offer a
conservative shelter for a portion of an investor's assets while still making a
contribution to the returns of a balanced portfolio.
================================
YIELD SUMMARY(3)
As of 8-29-97
================================
7-DAY CURRENT YIELD 3.37%
7-DAY EFFECTIVE YIELD 3.42%
AVERAGE MATURITY 53 DAYS
================================
ADDING TO A RECORD OF OUTSTANDING PERFORMANCE
For the six months ended August 31, 1997, the Strong Municipal Money Market Fund
earned a #1 ranking among 138 tax-exempt money market funds tracked by Lipper
Analytical Services, Inc., based on total return. This builds on a record that
includes #1 Lipper rankings for the one-, three-, five-, and ten-year periods,
and since inception, out of 136, 119, 97, 58, and 57 funds, respectively.(2)
As of August 29, 1997, the Municipal Money Market Fund's 7-day current yield was
3.37%. Its 7-day effective yield--which reflects compounding-- was 3.42%.(3) For
investors in the 36% tax bracket, the taxable equivalent yield was 5.34%.
A LOOK AT THE MARKETS
For the first months of this fiscal year, interest rates for both short- and
long-term bonds moved upward. From a starting point of 5.67%, yields on one-year
T-bills rose to as high as 6.06% by the end of April. From that time through
July, rates trended generally downward, landing as low as 5.42%. In August, the
market entered a period of consolidation, with rates settling into a tight range
just below 5.60%.
Throughout this period, we kept the Fund's maturity considerably longer than
market levels. This positioning--while well within traditional money-market
range--helped us to maintain a competitive yield for the Fund. This remains a
very conservative Fund, but we do seek out appropriate opportunities to add to
the tax-exempt yield we deliver to shareholders.
OUR APPROACH
Another way we have sought to improve our yield while preserving safety is
working with smaller, regional brokerages, in addition to large, leading Wall
Street firms. These specialized brokerages don't have the instant name
recognition enjoyed by some of their larger industry peers, so the issues they
sponsor often offer slightly higher yields to attract attention.
Also, we include some securities whose income may be subject to the Alternative
Minimum Tax. While we are very conscious of the tax implications of these issues
for those shareholders who are subject to this tax, we believe that simply to
reject AMT paper completely would be to cut the Fund off from some of the
market's more attractive issues. Overall, our relationships with smaller
brokerages and our willingness to consider AMT issues brings to the Fund a
larger field of investments than would otherwise be available.
4
<PAGE>
PRESERVING LIQUIDITY
To help ensure that the Fund remains extremely liquid even as we explore a
broader range of municipal money-market instruments, we keep about 65% of assets
in daily and weekly issues--those that can be most readily converted to cash.
Because daily issues are relatively low-yielding, we limit that position to an
amount ample to meet daily demands. Weekly issues are almost as liquid, but
deliver slightly higher yield to the Fund and its shareholders. Also enhancing
the Fund's liquidity and stability of principal is our continuing emphasis on
quality in the issues we buy.
LOOKING FORWARD
We're not anticipating any significant change to our approach over the remainder
of the fiscal year. Absent any significant volatility in interest rates, we will
likely keep our average maturity longer than market levels. We'll also continue
to explore issues from regional brokerages as well as AMT paper to identify what
we believe are the municipal money market securities that will best serve our
shareholders.
We'd like to welcome our many new shareholders, and also express gratitude to
those who've been with us for a while. Thank you for investing in the Strong
Municipal Money Market Fund. We look forward to continuing to help you pursue
your important financial goals.
[PHOTO OF STEVEN D. HARROP]
Sincerely,
/s/Steven D. Harrop
Steven D. Harrop
Portfolio Manager
================================================================================
EQUIVALENT TAXABLE YIELDS(3)
As of 8-29-97
================================================================================
YOUR TAX-EXEMPT EFFECTIVE
MARGINAL YIELD OF 3.42% IS EQUIVALENT
JOINT RETURN SINGLE RETURN TAX RATE TO A TAXABLE YIELD OF:
- --------------------------------------------------------------------------------
$41,201-99,600 $24,651-59,750 28.0% 4.75%
................................................................................
$99,601-151,750 $59,751-124,650 31.0% 4.96%
................................................................................
$151,751-271,050 $124,651-271,050 36.0% 5.34%
................................................................................
Over $271,050 Over $271,050 39.6% 5.66%
................................................................................
The chart reflects 1997 marginal federal tax rates before limitations and
phase-outs. Individuals with adjusted gross income in excess of $121,200
should consult their tax advisor to determine their actual 1997 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
8-29-97 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. Source: Lipper Analytical Services, Inc.
3 Yields are annualized for the 7 days ended 8-29-97, are historical, and
will vary. Effective yield assumes reinvested income.
5
<PAGE>
THE STRONG MUNICIPAL ADVANTAGE FUND
WHILE PURSUING SUPERIOR RESULTS, WE NONETHELESS STRIVE TO KEEP THE FUND VERY
LIQUID.
The Strong Municipal Advantage 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. It normally maintains
an average effective maturity of one year or less.
========================================
PORTFOLIO STATISTICS
As of 8-29-97
========================================
30-DAY ANNUALIZED YIELD(2) 4.12%
AVERAGE EFFECTIVE MATURITY(3) 0.9 YEARS
AVERAGE QUALITY RATING(4) A
========================================
The Strong Municipal Advantage Fund is the first mutual fund to combine the
benefits of ultra-short bonds with the tax advantages of municipal investing.
Unlike money funds, which seek to maintain a $1.00 share price, the Fund does
allow for a small degree of share-price fluctuation. This allows it to pursue
higher yields and returns than tax-free money funds.
BUILDING ON A SOLID START
For the year-to-date period ended August 31, 1997, the Fund ranked #5 out of 29
short-term municipal bond funds based on total return, according to Lipper
Analytical Services, Inc.(1)
A large component of the Fund's strong return was its yield. As of August 29,
the Fund's 30-day current yield stood at 4.12%.(2) For investors in the 36% tax
bracket, the taxable equivalent yield was 6.44%.
We've been able to deliver those results while keeping the Fund's NAV in a
narrow range. The Fund has posted yields that exceed money market yields by 50
basis points and more. That's an attractive premium for investors who don't
require absolute stability of principal.
While pursuing superior results, we nonetheless strive to keep the Fund very
liquid, mindful that many of our investors use this investment to meet
shorter-term needs. To that end, we keep about one third of assets in daily and
weekly issues, which can be readily converted to cash. We anticipate maintaining
this positioning going forward. It serves as a steadying force and helps to keep
NAV fluctuation low despite gyrations in the market.
A LOOK AT THE MARKETS AND OUR APPROACH
For roughly the first three months of this fiscal year, interest rates for both
short- and long-term bonds moved upward. From a starting point of 5.67%, yields
on one year T-bills rose to as high as 6.06% by the end of April. From that time
through July, rates trended generally downward, landing as low as 5.42%. In
August, the market entered a period of consolidation, with rates settling into a
tight range just below 5.60%.
One way we have sought to enhance yield is by working with smaller, regional
brokerages, in addition to large, well-established Wall Street firms. These
specialized brokerages don't have the instant name recognition enjoyed by some
of their larger industry peers, so the issues they sponsor often offer slightly
higher yields to attract attention.
We also include some securities whose income may be subject to the Alternative
Minimum Tax. While we are conscious of the tax implications of these issues for
some shareholders, we believe that to reject AMT paper completely would be to
cut the Fund off from many of the market's more attractive issues.
================================================================================
EQUIVALENT TAXABLE YIELDS(2)
As of 8-29-97
================================================================================
YOUR TAX-EXEMPT EFFECTIVE
MARGINAL YIELD OF 4.12% IS EQUIVALENT
JOINT RETURN SINGLE RETURN TAX RATE TO A TAXABLE YIELD OF:
- --------------------------------------------------------------------------------
$41,201-99,600 $24,651-59,750 28.0% 5.72%
................................................................................
$99,601-151,750 $59,751-124,650 31.0% 5.97%
................................................................................
$151,751-271,050 $124,651-271,050 36.0% 6.44%
................................................................................
Over $271,050 Over $271,050 39.6% 6.82%
................................................................................
The chart reflects 1997 marginal federal tax rates before limitations and
phase-outs. Individuals with adjusted gross income in excess of $121,200
should consult their tax advisor to determine their actual 1997 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.
================================================================================
Overall, our relationships with smaller brokerages and our willingness to
consider AMT issues brings to the Fund a larger field of investments than would
otherwise be available.
6
<PAGE>
Finally, we have also taken a small position in non-investment-grade paper. The
prospectus limits us to 10% of assets in these issues, and our own investment
philosophy at this time has kept it lower than that. We are still very conscious
of preserving the overall quality of the Fund, and this position allows us to
strive to improve the yield without undercutting that profile.
LOOKING AHEAD
Looking forward, we intend to keep with the strategy that has worked well over
the past six months.
The Fund continues to enjoy strong cash inflows, with assets under management
now reaching $870 million. Finding enough municipal securities that together
will keep the Fund's maturity in the ultra-short range, deliver yield, and
maintain a strong quality profile is clearly a challenge. We are dedicated to
canvassing the market to find the issues that will keep these objectives
aligned.
[PHOTO OF STEVEN D. HARROP]
We appreciate the confidence our shareholders have shown us in just a short
period of operation. We thank you for the opportunity to serve your investment
needs, and look forward to helping you pursue your financial goals for years to
come.
Sincerely,
/s/Steven D. Harrop
Steven D. Harrop
Portfolio Manager
================================================================================
GROWTH OF AN ASSUMED $10,000 INVESTMENT
From 11-30-95 to 8-31-97
================================================================================
[GRAPH]
Lehman Brothers Lipper Short
THE STRONG MUNICIPAL Municipal 1-Year Municipal Debt
ADVANTAGE FUND Bond Index* Funds Index*
11-95 10,000 10,000 10,000
12-95 10,086 10,038 10,041
3-96 10,145 10,127 10,100
6-96 10,272 10,226 10,159
9-96 10,443 10,336 10,269
12-96 10,577 10,474 10,386
3-97 10,681 10,563 10,445
6-97 10,831 10,701 10,595
8-97 10,913 10,780 10,671
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with similar investments in the
Lehman Brothers Municipal 1 Year Bond Index and the Lipper Short Municipal Debt
Funds Index. Results include the reinvestment of all dividends and capital gains
distributions. Performance is historical and does not represent future results.
Investment returns and principal value vary, and you may have a gain or loss
when you sell shares.
================================================================================
===========================
AVERAGE ANNUAL
TOTAL RETURNS(1)
As of 8-31-97
===========================
1-YEAR 5.11%
SINCE INCEPTION 5.12%
(on 11-30-95)
===========================
- --------------------------------------------------------------------------------
* The Lehman Brothers Municipal 1 Year Bond Index is an unmanaged index
generally representative of one-year, tax-exempt bonds. The Lipper Short
Municipal Debt Funds Index is an equally-weighted performance index of the
largest qualifying funds in this Lipper category. Source of the Lehman
index data is Micropal. Source of the Lipper index data is Lipper
Analytical Services, Inc.
1 Average annual total return and total return measure change in the value of
an investment in the Fund, assuming reinvestment off all dividends and
capital gains. Average annual total return reflects annualized change,
while total return reflects aggregate change.
2 Yield is annualized for the 30 days ended 8-29-97, is historical, and will
vary. The Fund's Advisor has waived its management fee of 0.10% and
absorbed expenses of 0.08%. Otherwise, current yield would have been 3.94%
and returns would have been lower.
3 The Fund's average effective maturity includes the effect of when-issued
securities.
4 For purposes of this average rating, the Fund's short-term debt obligations
have been assigned a long-term rating by the Advisor.
7
<PAGE>
THE STRONG ADVANTAGE FUND
THE FUND'S ULTRA-SHORT MATURITY HELPED PROTECT IT FROM MUCH OF THE MARKET'S
SKITTISHNESS.
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 maturity will
normally be one year or less.
=========================================
PORTFOLIO STATISTICS
As of 8-29-97
=========================================
30-DAY ANNUALIZED YIELD(2) 6.52%
AVERAGE EFFECTIVE MATURITY(3) 0.82 YEARS
AVERAGE QUALITY RATING(4) A
=========================================
SOLID PERFORMANCE CONTINUED
The Strong Advantage Fund continued to demonstrate strong performance for the
six-month period ended August 31, 1997, providing attractive yields versus both
its ultra-short competition and versus money market funds. (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.)
Within its ultra-short obligation Lipper category, the Fund ranked #3 of 28
funds for the 1-year period ended August 31, and #1 for the 5-year and
since-inception periods out of 10 and 6 funds, respectively.(1) For the
six-month period, the Fund's total return was 3.32%, topping the 2.79% total
return posted by the Lipper Ultra-Short Obligation Average.*
THE PAST SIX MONTHS
At the beginning of the Fund's fiscal year in March, the market was anticipating
a hike in short-term interest rates from the Federal Reserve in its effort to
head off potential inflation. The Fed did raise rates in late March, creating an
uncertain environment as analysts looked for additional hikes. The pre-emptive
move proved to be sufficient, however, to keep growth at sustainable levels and
inflation in check. Although occasional fears of inflation re-emerged throughout
the six months, sparking some interest-rate fluctuation, rates ended the
six-month period close to where they began.
LITTLE CHANGE TO A SUCCESSFUL STRATEGY
The Fund's ultra-short maturity helped protect it from much of the market's
skittishness. As the economy remained strong, with many companies posting
continued solid earnings, we maintained up to 25% of the Fund's holdings--the
maximum allowed by prospectus--in BB rated bonds. Because these issues'
performance is strongly tied to their underlying companies' health and to
overall market confidence, their prices have remained relatively stable despite
interest-rate fluctuation.
Throughout the summer, we continued to purchase attractive cushion bonds--which
are corporate bonds that are likely to be called back and repaid by the company
in advance of maturity. They offer fairly attractive yields and tend to show
relatively low price fluctuation. They're often overlooked by analysts, so our
security-by-security analysis allows us to uncover some good values.
One change we made during this period was to extend duration slightly in May, to
its current level of 0.6. We believe this slight lengthening keeps us near a
neutral stance (0.5), and positions the Fund well for the current interest-rate
environment.
================================================
ASSET ALLOCATION
Based on net assets as of 8-31-97
================================================
[PIE CHART]
Corporate Bonds 70.4%
Non-Agency Mortgage &
Asset-Backed Securities 23.3%
U.S. Government & Agency
Issues 3.9%
Short-Term Investments 1.3%
Preferred Stocks 1.1%
================================================
This allocation does not reflect any futures
positions held by the Fund.
8
<PAGE>
PREPARING FOR A CHANGING MARKET
We expect the economy's growth to continue at a reasonable, sustainable level.
There may, however, be another small rate hike by the Federal Reserve--perhaps
toward the end of the year. This is not necessarily bad for bonds, as long as
the market interprets the hike as a preventative measure that keeps the economy
growing at its current moderate level.
We also plan to continue to take advantage of strength we're finding in the
corporate and mortgage bond sectors. These areas tend to perform well when the
market exhibits low volatility.
We're excited to announce that Lyle Fitterer joined the Fund as portfolio
co-manager in March. He has been with Strong Funds since 1989, and has
co-managed the Short-Term Bond Fund since January, 1996. This experience will
benefit the Fund and its shareholders.
[PHOTO OF JEFFREY A. KOCH AND LYLE J. FITTERER]
Thank you for your investment in the Strong Advantage Fund. We appreciate your
continued confidence.
Sincerely,
/s/Jeffrey A. Koch
Jeffrey A. Koch
/s/Lyle J. Fitterer
Lyle J. Fitterer
Portfolio Co-Managers
================================================================================
GROWTH OF AN ASSUMED $10,000 INVESTMENT
From 11-25-88 to 8-31-97
================================================================================
[GRAPH]
Lipper Ultra
THE STRONG 1-Year Short Obligation
ADVANTAGE FUND Treasury Bill* Average*
10-88 10,000 10,000 10,000
12-88 10,103 10,039 10,072
12-89 11,052 11,050 11,004
12-90 11,784 12,036 11,884
12-91 13,036 13,088 12,745
12-92 14,135 13,720 13,264
12-93 15,250 14,245 13,796
12-94 15,793 14,621 14,203
12-95 16,978 15,804 15,144
12-96 18,112 16,698 15,944
8-97 18,942 17,383 16,532
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with similar investments in the
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 indexes' performance was prorated for the
month of November 1988.
================================================================================
=================================
AVERAGE ANNUAL
TOTAL RETURNS(1)
As of 8-31-97
=================================
1-YEAR 7.35%
3-YEAR 6.75%
5-YEAR 6.37%
SINCE INCEPTION 7.56%
(on 11-25-88)
=================================
- --------------------------------------------------------------------------------
* The Salomon Brothers 1-Year Treasury Benchmark-on-the-Run Index ("1-Year
Treasury Bill") is an unmanaged index generally representative of the
average yield on One-Year Treasury Bills. The Lipper Ultra Short Obligation
Average represents funds that invest at least 65% of their assets in
investment-grade debt issues, or better, and maintain a portfolio
dollar-weighted average maturity between 91 days and 365 days. Source of
the Salomon index data is Micropal. Source of the Lipper index data is
Lipper Analytical Services, Inc.
1 Average annual total return and total return measure change in the value of
an investment in the Fund, assuming reinvestment off all dividends and
capital gains. Average annual total return reflects annualized change,
while total return reflects aggregate change.
2 Yield is annualized for the 30 days ended 8-29-97, is historical, and will
vary.
3 The Fund's average effective maturity includes the effect of futures,
options, and when-issued securities.
4 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, 1997 (Unaudited)
- ----------------------------------------------------------------------------------------------------------------------------------
STRONG HERITAGE MONEY FUND
<CAPTION>
PRINCIPAL YIELD TO MATURITY AMORTIZED
AMOUNT MATURITY DATE (d) COST (NOTE 2)
- ----------------------------------------------------------------------------------------------------------------------------------
BANKERS' ACCEPTANCES 0.1%
<S> <C> <C> <C> <C>
LaSalle National Bank $ 2,000,000 5.55% 9/10/97 $ 1,997,533
CERTIFICATES OF DEPOSIT 4.9%
Deutsche Bank AG New York, 6.18% 23,000,000 6.20 4/03/98 22,997,436
Huntington National Bank, 6.25% 23,000,000 6.28 4/24/98 22,995,783
National Bank of Canada, 5.87% 12,600,000 5.87 9/29/97 12,600,000
Societe Generale:
6.08% 14,000,000 6.11 3/27/98 13,997,737
6.34% 11,000,000 6.38 4/16/98 10,997,405
----------
TOTAL CERTIFICATES OF DEPOSIT 83,588,361
COMMERCIAL PAPER 81.2%
AESOP Funding Corporation:
(Acquired 7/24/97; Cost $12,616,265) (b) 12,700,000 5.52 9/05/97 12,694,158
(Acquired 8/13/97; Cost $9,949,125) (b) 10,000,000 5.55 9/15/97 9,979,958
Aetna Services, Inc. 11,000,000 5.54 9/18/97 10,972,916
Alamo Funding LP (Acquired 7/30/97; Cost $23,403,530) (b) 23,600,000 5.55 9/22/97 23,527,233
Alpine Securitization Corporation:
(Acquired 8/12/97; Cost $9,956,911) (b) 10,000,000 5.54 9/09/97 9,989,228
(Acquired 8/01/97; Cost $9,936,792) (b) 10,000,000 5.55 9/11/97 9,986,125
(Acquired 8/27/97; Cost $4,619,964) (b) 4,625,000 5.60 9/03/97 4,624,281
American Family Financial Services, Inc. 66,600 5.20 Upon Demand 66,600
American Honda Finance Corporation 11,500,000 5.53 9/12/97 11,482,335
4,000,000 5.56 10/31/97 3,963,551
Anaheim, California Electric System 18,000,000 5.60 9/02/97 18,000,000
Aon Corporation 15,000,000 5.55 10/21/97 14,886,688
7,269,000 5.56 9/22/97 7,246,547
Aristar, Inc. 4,959,000 5.58 9/26/97 4,940,553
500,000 5.60 9/03/97 499,922
Astro Capital Corporation (Acquired 8/18/97; Cost $10,023,290) (b) 10,100,000 5.58 10/06/97 10,046,773
Avon Capital Corporation:
(Acquired 6/24/97; Cost $5,204,180) (b) 5,275,000 5.62 9/18/97 5,261,824
(Acquired 6/25/97; Cost $2,960,121) (b) 3,000,000 5.63 9/18/97 2,992,494
(Acquired 6/30/97; Cost $4,636,563) (b) 4,700,000 5.65 9/24/97 4,683,772
B.A.T. Capital Corporation 13,750,000 5.56 9/18/97 13,716,022
Banner Receivables Corporation:
(Acquired 8/19/97; Cost $10,053,547) (b) 10,146,000 5.56 10/17/97 10,075,485
(Acquried 8/01/97; Cost $4,670,912) (b) 4,700,000 5.57 9/10/97 4,694,182
Barnett Banks, Inc. 14,000,000 5.51 9/19/97 13,963,573
Barton Capital Corporation (Acquired 7/28/97; Cost $9,427,035) (b) 9,500,000 5.53 9/16/97 9,479,570
Brazos River Authority, Texas PCR 13,000,000 5.54 9/12/97 13,000,000
7,895,000 5.58 9/12/97 7,895,000
Broadway Capital Corporation (Acquired 8/04/97; Cost $14,930,375) (b) 15,000,000 5.57 9/03/97 14,997,679
Budget Funding Corporation 8,500,000 5.53 10/10/97 8,450,384
15,000,000 5.55 10/01/97 14,932,938
Calcasieu Parish, Louisiana 15,000,000 5.55 9/09/97 15,000,000
Calcot, Ltd. 2,000,000 5.60 9/16/97 1,995,644
5,000,000 5.60 9/22/97 4,984,444
4,000,000 5.70 9/30/97 3,982,267
Cigna Corporation 15,000,000 5.58 9/23/97 14,951,175
10,000,000 5.60 9/25/97 9,964,222
Countrywide Home Loans, Inc. 5,000,000 5.52 9/15/97 4,990,033
8,000,000 5.52 10/02/97 7,963,200
CSC Enterprises 10,000,000 5.54 11/17/97 9,883,044
10,800,000 5.55 9/04/97 10,796,670
4,000,000 5.55 9/08/97 3,996,300
Duke Capital Corporation:
(Acquired 8/25/97; Cost $7,774,333) (b) 7,825,000 5.55 9/12/97 7,783,984
(Acquired 8/26/97; Cost $16,892,352) (b) 17,000,000 5.56 9/12/97 16,910,731
Equitable of Iowa Companies 3,000,000 5.56 10/02/97 2,986,100
12,200,000 5.60 9/05/97 12,194,307
9,000,000 5.62 9/17/97 8,978,925
FP Funding Corporation (Acquired 8/05/97; Cost $24,876,222) (b) 25,000,000 5.57 9/08/97 24,976,792
Finova Capital Corporation 10,000,000 5.54 9/11/97 9,986,150
8,000,000 5.55 10/08/97 7,955,600
Franklin Resources, Inc. (Acquired 8/11/97; Cost $5,479,760) (b) 5,500,000 5.52 9/04/97 5,498,313
Frigate Funding Corporation (Acquired 8/04/97; Cost $10,027,648) (b) 10,093,000 5.55 9/15/97 10,072,772
10
See notes to financial statements.
<PAGE>
- ----------------------------------------------------------------------------------------------------------------------------------
STRONG HERITAGE MONEY FUND (continued)
PRINCIPAL YIELD TO MATURITY AMORTIZED
AMOUNT MATURITY DATE (d) COST (NOTE 2)
- ----------------------------------------------------------------------------------------------------------------------------------
Fundex Corporation $ 9,000,000 5.58% 9/10/97 $ 8,988,840
General Electric Capital Corporation 11,000,000 5.53 1/14/98 10,773,577
Goldman Sachs Group LP 20,575,000 5.53 9/09/97 20,552,876
Gotham Funding Corporation:
(Acquired 8/14/97; Cost $7,955,200) (b) 8,000,000 5.60 9/19/97 7,978,844
(Acquired 8/26/97; Cost $14,878,667) (b) 15,000,000 5.60 10/17/97 14,895,000
Green Tree Financial Corporation 11,300,000 5.69 9/03/97 11,298,214
7,000,000 5.71 9/19/97 6,981,125
Greenwich Funding Corporation (Acquired 8/28/97; Cost $17,941,620) (b) 18,000,000 5.56 9/19/97 17,952,740
GTE Corporation 9,000,000 5.50 9/16/97 8,980,750
6,300,000 5.53 9/05/97 6,297,097
5,000,000 5.54 9/26/97 4,981,533
5,000,000 5.55 10/23/97 4,960,687
Gulf Coast Waste Disposal Authority, Texas Solid Waste Disposal Revenue 5,723,000 5.68 9/02/97 5,723,000
Harley-Davidson Dealer Funding Corporation 4,000,000 5.55 9/25/97 3,985,817
Harris County, Texas IDC Solid Waste Disposal Revenue:
(Acquired 8/18/97; Cost $5,000,000) (b) 5,000,000 5.58 9/08/97 5,000,000
(Acquired 8/21/97; Cost $9,000,000) (b) 9,000,000 5.60 10/08/97 9,000,000
(Acquired 8/20/97; Cost $10,600,000) (b) 10,600,000 5.60 10/15/97 10,600,000
Heller Financial, Inc. 5,000,000 5.57 9/30/97 4,978,339
20,000,000 5.65 9/17/97 19,952,917
Household International, Inc. (Acquired 7/23/97; Cost $13,909,840) (b) 14,000,000 5.52 9/03/97 13,997,853
Industrial Funding Corporation 9,182,000 5.58 9/02/97 9,182,000
15,000,000 5.60 10/06/97 14,920,667
Johnson Controls, Inc. 165,300 5.22 Upon Demand 165,300
Kamehameha Schools - Bishop Estate (Acquired 7/18/97; Cost $9,037,150) (b) 9,150,000 5.55 10/06/97 9,102,039
Knight-Ridder, Inc. 3,000,000 5.57 10/08/97 2,983,290
9,000,000 5.58 9/05/97 8,995,815
12,000,000 5.58 10/07/97 11,934,900
Korea Development Bank 10,000,000 5.75 9/22/97 9,968,056
Lehman Brothers Holdings, Inc. 12,000,000 5.57 9/08/97 11,988,860
Lexington Parker Capital Corporation:
(Acquired 8/13/97; Cost $4,978,417) (b) 5,000,000 5.55 9/10/97 4,993,833
(Acquired 8/15/97; Cost $6,969,783) (b) 7,000,000 5.55 9/12/97 6,989,208
MEPC Finance, Inc. (Acquired 8/01/97; Cost $20,863,290) (b) 21,000,000 5.58 9/12/97 20,967,450
Market Street Funding Corporation (Acquired 8/14/97; Cost $5,961,150) (b) 6,000,000 5.55 9/25/97 5,978,725
Martin Marietta Materials, Inc.:
(Acquired 8/28/97; Cost $7,950,400) (b) 8,000,000 5.58 10/07/97 7,956,600
(Acquired 7/07/97; Cost $9,907,731) (b) 10,000,000 5.63 9/04/97 9,996,872
(Acquired 7/03/97; Cost $6,932,866) (b) 7,000,000 5.66 9/02/97 7,000,000
Merrill Lynch & Company, Inc. 24,175,000 5.52 9/10/97 24,145,345
Mitsubishi Motors Credit America, Inc. 7,250,000 5.57 9/17/97 7,233,174
National Fleet Funding Corporation 12,500,000 5.55 9/24/97 12,457,604
12,500,000 5.55 9/26/97 12,453,750
National Fuel Gas Company 10,000,000 5.52 9/08/97 9,990,800
New Hampshire State IDA 10,000,000 5.58 9/19/97 10,000,000
New York GO 13,000,000 5.73 11/19/97 13,000,000
Newell Company:
(Acquired 8/21/97; Cost $6,243,248) (b) 6,275,000 5.52 9/23/97 6,254,795
(Acquired 8/15/97; Cost $15,916,133) (b) 16,000,000 5.55 9/18/97 15,960,533
(Acquired 8/29/97; Cost $2,984,737) (b) 3,000,000 5.55 10/01/97 2,986,588
Nordbanken NA, Inc. 13,500,000 5.57 2/20/98 13,142,824
8,000,000 5.57 2/24/98 7,783,389
Nynex Corporation 2,201,000 5.60 9/02/97 2,201,000
Oakland-Alameda County, California Coliseum Authority 15,000,000 5.58 10/08/97 15,000,000
5,000,000 5.59 9/17/97 5,000,000
Oklahoma State IFA 4,720,000 5.65 11/03/97 4,720,000
Old Line Funding Corporation:
(Acquired 8/18/97; Cost $9,603,441) (b) 9,645,000 5.54 9/15/97 9,625,705
(Acquired 7/28/97; Cost $7,955,600) (b) 8,000,000 5.55 9/02/97 8,000,000
(Acquired 8/11/97; Cost $6,968,704) (b) 7,000,000 5.55 9/09/97 6,992,446
Peacock Funding Corporation:
(Acquired 8/07/97; Cost $6,882,222) (b) 6,926,000 5.55 9/17/97 6,909,984
(Acquired 8/29/97; Cost $2,972,250) (b) 3,000,000 5.55 10/28/97 2,974,100
(Acquired 8/26/97; Cost $5,718,394) (b) 5,762,000 5.56 10/14/97 5,724,624
PepsiCo, Inc. 14,000,000 5.53 10/06/97 13,926,881
PHH Corporation 10,000,000 5.59 9/03/97 9,998,447
See notes to financial statements.
11
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) August 31, 1997 (Unaudited)
- ----------------------------------------------------------------------------------------------------------------------------------
STRONG HERITAGE MONEY FUND (continued)
PRINCIPAL YIELD TO MATURITY AMORTIZED
AMOUNT MATURITY DATE (d) COST (NOTE 2)
- ----------------------------------------------------------------------------------------------------------------------------------
Reliastar Mortgage Corporation $ 4,000,000 5.52% 10/08/97$ 3,977,920
4,300,000 5.53 9/16/97 4,290,753
4,000,000 5.53 9/19/97 3,989,554
4,300,000 5.53 10/01/97 4,280,845
SRD Finance, Inc. 10,000,000 5.57 9/04/97 9,996,906
12,000,000 5.60 10/02/97 11,944,000
SAFECO Credit Company, Inc. 22,100,000 5.57 9/10/97 22,072,645
Salomon, Inc. 1,000,000 5.61 9/02/97 1,000,000
9,400,000 5.62 9/15/97 9,380,923
San Diego, California IDR - San Diego Gas & Electric Company (Acquired 7/30/97;
Cost $10,815,000) (b) 10,815,000 5.60 9/16/97 10,815,000
Sanwa Business Credit Corporation 4,050,000 5.58 9/05/97 4,048,117
16,000,000 5.60 9/11/97 15,977,600
Seiko Corporation of America 5,000,000 5.60 9/12/97 4,992,222
5,000,000 5.62 10/14/97 4,967,217
9,000,000 5.63 10/09/97 8,947,923
Sigma Finance, Inc. (Acquired 7/18/97; Cost $12,444,600) (b) 12,600,000 5.55 10/06/97 12,533,955
Smith Barney Holdings, Inc. 11,000,000 5.52 10/03/97 10,947,713
Society of the New York Hospital Fund, Inc. 3,930,000 5.53 9/10/97 3,925,170
15,000,000 5.53 9/11/97 14,979,263
Sotheby's, Inc. 9,000,000 5.55 10/07/97 8,951,438
South Western Electricity PLC (Acquired 8/28/97; Cost $9,956,289) (b) 10,000,000 5.62 9/25/97 9,964,094
Strait Capital Corporation 1,000,000 5.60 10/15/97 993,311
2,997,000 5.60 10/20/97 2,974,622
Strategic Asset Funding Corporation (Acquired 8/08/97; Cost $6,865,776) (b) 6,900,000 5.58 9/09/97 6,892,514
Torchmark Corporation 2,550,000 5.55 9/05/97 2,548,821
2,800,000 5.55 9/18/97 2,793,093
5,000,000 5.56 10/14/97 4,967,567
Towson Town Center, Inc. 13,000,000 5.58 9/05/97 12,993,955
Tri-Lateral Capital, Inc.:
(Acquired 8/20/97; Cost $3,979,577) (b) 4,000,000 5.57 9/22/97 3,987,622
(Acquired 7/17/97; Cost $6,908,207) (b) 7,000,000 5.62 10/09/97 6,959,567
Tribune Company:
(Acquired 8/28/97; Cost $9,927,542) (b) 10,000,000 5.55 10/14/97 9,935,250
(Acquired 8/26/97; Cost $13,889,925) (b) 14,000,000 5.55 10/16/97 13,905,033
Triple-A One Funding Corporation:
(Acquired 8/19/97; Cost $2,396,297) (b) 2,407,000 5.52 9/17/97 2,401,464
(Acquired 8/11/97; Cost $7,747,428) (b) 7,793,000 5.54 9/18/97 7,773,812
(Acquired 8/14/97; Cost $6,977,337) (b) 7,000,000 5.55 9/04/97 6,997,842
UNIfunding, Inc. 16,600,000 5.70 11/12/97 16,413,388
Variable Funding Capital Corporation:
(Acquired 8/22/97; Cost $5,961,290) (b) 6,000,000 5.53 10/03/97 5,971,428
(Acquired 8/05/97; Cost $3,774,446) (b) 3,799,000 5.54 9/16/97 3,790,815
(Acquired 8/05/97; Cost $3,594,932) (b) 3,620,000 5.54 9/19/97 3,610,530
(Acquired 7/17/97; Cost $11,900,100) (b) 12,000,000 5.55 9/09/97 11,987,050
West Baton Rouge Parish, Louisiana:
(Acquired 8/06/97; Cost $11,000,000) (b) 11,000,000 5.58 9/11/97 11,000,000
(Acquired 8/26/97; Cost $5,000,000) (b) 5,000,000 5.60 10/15/97 5,000,000
Wisconsin Electric Power Company 159,400 5.24 Upon Demand 159,400
Wood Street Funding Corporation:
(Acquired 7/28/97; Cost $2,734,342) (b) 2,750,000 5.54 9/03/97 2,749,577
(Acquired 7/28/97; Cost $2,976,917) (b) 3,000,000 5.54 9/16/97 2,993,537
-------------
TOTAL COMMERCIAL PAPER 1,372,168,733
CORPORATE OBLIGATIONS 4.1%
American Honda Finance Corporation Floating Rate Medium Term Notes (Acquired 7/22/97;
Cost $6,000,000) (b) 6,000,000 5.72 10/27/97 6,000,000
General Motors Acceptance Corporation Medium Term Notes:
Tranche #148, 6.125% 10,000,000 6.33 4/23/98 9,987,405
Tranche #162, 6.15% 5,000,000 6.36 5/22/98 4,992,673
Tranche #598, 7.50% 5,150,000 5.85 11/04/97 5,164,628
International Business Machines Corporation Medium Term Notes, Tranche #7,
5.65% 30,000,000 5.75 1/22/98 29,988,795
Johnson Controls, Inc. Medium Term Notes, Tranche #8, 7.18% 12,000,000 6.04 10/03/97 12,011,832
----------
TOTAL CORPORATE OBLIGATIONS 68,145,333
TAXABLE VARIABLE RATE PUT BONDS 4.7%
Aurora, Kane & DuPage Counties, Illinois IDR 3,000,000 5.80 9/04/97 3,000,000
Bel Aire, LLC 4,510,000 5.70 9/04/97 4,510,000
See notes to financial statements.
12
<PAGE>
- ----------------------------------------------------------------------------------------------------------------------------------
STRONG HERITAGE MONEY FUND (continued)
PRINCIPAL YIELD TO MATURITY AMORTIZED
AMOUNT MATURITY DATE (d) COST (NOTE 2)
- ----------------------------------------------------------------------------------------------------------------------------------
Botsford General Hospital Revenue $ 2,500,000 5.70% 9/02/97$ 2,500,000
Galliano Marine Services, Inc. 5,460,000 5.70 9/04/97 5,460,000
Gardena, California First-Time Homebuyer Refunding Program 5,185,000 5.85 9/03/97 5,185,000
KinderCare Learning Centers, Inc. 4,500,000 5.74 9/03/97 4,500,000
Maine Regional Waste System, Inc. Solid Waste Resource Recovery Revenue 2,200,000 5.65 9/03/97 2,200,000
Med-Map, LLC 5,000,000 5.65 9/03/97 5,000,000
Montgomery County, Pennsylvania IDA Revenue 630,000 5.75 9/03/97 630,000
New Jersey EDA Economic Development Revenue - MSNBC/CNBC 9,900,000 5.63 9/02/97 9,900,000
New Jersey Sports & Exposition Authority Sports Complex Subordinated
Refunding Revenue 2,000,000 5.73 9/02/97 2,000,000
Nufunding, Inc. Adjustable Rate Health Care Revenue 5,000,000 5.73 9/03/97 5,000,000
Passaic County, New Jersey GO Refunding 13,900,000 5.60 9/03/97 13,900,000
Thayer Properties, LLC 3,130,000 5.70 9/04/97 3,130,000
Tifton Mall, Inc. 3,020,000 5.70 9/04/97 3,020,000
WLB, LLC 10,000,000 5.70 9/04/97 10,000,000
----------
TOTAL TAXABLE VARIABLE RATE PUT BONDS 79,935,000
UNITED STATES GOVERNMENT AND AGENCY ISSUES 5.1%
Federal Home Loan Banks Consolidated Bonds, 5.78% 10,000,000 5.78 1/28/98 10,000,000
Federal National Mortgage Association Medium Term Notes, 5.51% 25,000,000 5.59 2/24/98 24,990,771
United States Treasury Notes, 8.75% 50,000,000 5.54 10/15/97 50,190,388
-------------
TOTAL UNITED STATES GOVERNMENT AND AGENCY ISSUES 85,181,159
-------------
TOTAL INVESTMENTS IN SECURITIES 100.1% 1,691,016,119
Other Assets and Liabilities, Net (0.1%) (2,053,441)
-------------
NET ASSETS 100.0% $1,688,962,678
=============
</TABLE>
PERCENTAGE OF
INDUSTRY DIVERSIFICATION NET ASSETS
- -------------------------------------------------------------------------
Non-Agency Asset-Backed ........................................ 19.6%
Bank - Super Regional .......................................... 5.7
Brokerage & Investment Management .............................. 4.9
Real Estate .................................................... 4.8
Personal & Commercial Lending .................................. 4.6
Finance - Miscellaneous ........................................ 4.2
General Obligation ............................................. 3.8
Pollution Control Revenue ...................................... 3.8
Insurance - Diversified ........................................ 3.4
Industrial Development Revenue ................................. 3.2
Bank - Regional ................................................ 3.0
U.S. Government ................................................ 3.0
Automobile ..................................................... 2.9
Media - Publishing ............................................. 2.8
Mortgage & Related Service ..................................... 2.8
Electric Power ................................................. 2.1
Insurance - Life ............................................... 2.0
Computer - Mainframe ........................................... 1.8
Hospital Revenue ............................................... 1.6
Telephone ...................................................... 1.6
Computer Service ............................................... 1.5
FNMA ........................................................... 1.5
Household Appliances & Furnishings ............................. 1.5
Metals & Mining ................................................ 1.5
Insurance - Property & Casualty ................................ 1.3
Other Revenue .................................................. 1.2
Consumer - Miscellaneous ....................................... 1.1
Commercial Service ............................................. 0.9
Beverage - Soft Drink .......................................... 0.8
Cosmetic & Personal Care ....................................... 0.8
Tobacco ........................................................ 0.8
Diversified Operations ......................................... 0.7
Agricultural Operations ........................................ 0.6
Electrical Equipment ........................................... 0.6
FHLMC .......................................................... 0.6
Natural Gas Distribution ....................................... 0.6
Single Family Mortgage Revenue ................................. 0.6
Utility Revenue ................................................ 0.6
See notes to financial statements.
13
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) August 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
STRONG HERITAGE MONEY FUND (continued)
- --------------------------------------------------------------------------------
PERCENTAGE OF
INDUSTRY DIVERSIFICATION (Continued) NET ASSETS
- -----------------------------------------------------------------------
Retail - Specialty ............................................. 0.5%
Healthcare - Patient Care ...................................... 0.3
Savings & Loan ................................................. 0.3
Auto & Truck Parts ............................................. 0.2
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)
- ----------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS 23.4%
CALIFORNIA 1.6%
California Rural Home Mortgage Finance Authority SFMR - Mortgage-Backed
<S> <C> <C> <C> <C>
Securities Program (e) $ 5,900,000 4.00% 9/01/97 $ 5,900,000
Montebello, California 4.05% TRAN 4,500,000 4.00 6/30/98 4,501,749
Vallejo, California Unified School District 4.15% TRAN 9,500,000 4.10 12/09/97 9,501,183
West Contra Costa, California Unified School District 4.25% TRAN 9,000,000 4.16 12/11/97 9,002,176
----------
28,905,108
COLORADO 0.6%
Highlands Ranch Metropolitan District Number 4, Douglas County, Colorado:
5.45% GO 1,700,000 4.44 12/01/97 1,704,192
5.55% GO 2,000,000 4.45 12/01/97 2,005,412
Jefferson County, Colorado IDR 4.60% Refunding - Dayton Hudson Corporation
Project 2,800,000 4.02 12/01/97 2,803,963
Stonegate Village, Colorado Metropolitan District Refunding and Improvement (e) 3,930,000 4.43 12/01/97 3,939,836
----------
10,453,403
DISTRICT OF COLUMBIA 0.5%
District of Columbia Housing Finance Agency SFMR (e) 10,000,000 4.15 7/01/98 10,000,000
ILLINOIS 6.4%
Lakemoor, Illinois MFHR Mortgage - Lakemoor Apartments Project:
Series B (e) 50,000,000 5.00 9/04/97 50,000,000
Series C (e) 10,000,000 4.75 9/04/97 10,000,000
Oakbrook Terrace, Illinois MFHR:
Renaissance II Project (e) 15,000,000 4.90 11/03/97 15,000,000
Renaissance III Project (e) 41,820,000 4.90 11/03/97 41,820,000
-----------
116,820,000
INDIANA 0.9%
Indianapolis, Indiana Local Public Improvement Bond Bank Zero % Capital
Appreciation 30,000,000 3.95 2/01/98 5,643,474
Lawrence, Indiana EDR - Charleston Bay Project (e) 10,000,000 4.40 10/01/97 10,000,000
----------
15,643,474
KANSAS 0.5%
Johnson County, Kansas Unified School District Number 232 4.10% GO 10,000,000 4.10 6/01/98 10,000,000
KENTUCKY 4.3%
Kentucky Association of Counties Advance Revenue/Cash Flow Borrowing
4.30% TRAN 69,886,040 4.15 6/30/98 69,968,680
Kentucky Association of Counties Advance Revenue/Cash Flow Borrowing
4.30% TRAN 10,000,000 4.15 6/30/98 10,011,825
----------
79,980,505
MISSOURI 2.6%
Missouri Health and Educational Facilities Authority School District 4.50%
Advance Funding Program 47,000,000 4.18 9/08/97 47,002,965
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)
- ----------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY 4.5%
Bayonne, New Jersey:
3.90% BAN $ 1,445,000 4.51% 9/12/97 $ 1,444,746
4.25% BAN 4,800,000 4.49 9/12/97 4,799,667
4.80% BAN 4,000,000 4.26 9/12/97 4,000,640
4.49% TAN 8,500,000 4.03 9/22/97 8,502,232
East Orange, New Jersey 4.90% BAN 11,000,000 4.10 8/28/98 11,083,380
Jersey City, New Jersey:
4.50% GO 8,100,000 4.20 7/02/98 8,119,298
4.75% GO BAN 20,630,000 4.09 9/26/97 20,639,113
4.50% GO Refunding 14,900,000 4.05 1/16/98 14,924,606
North Bergen Township, Hudson County, New Jersey 4.25% Refunding 9,250,000 4.21 4/24/98 9,252,660
----------
82,766,342
NEW MEXICO 0.7%
Bernalillo County, New Mexico MFHR - Westwood Villas Project (e) 13,660,000 4.25 12/31/97 13,660,000
NEW YORK 0.6%
Oneida County, New York 4.50% GO BAN 11,752,000 4.08 5/01/98 11,783,469
WISCONSIN 0.2%
Menomonie, Wisconsin Area School District 4.25% TRAN 4,500,000 4.05 9/04/98 4,508,640
-----------
TOTAL MUNICIPAL BONDS 431,523,906
MUNICIPAL COMMERCIAL PAPER 0.2%
COLORADO
Denver, Colorado City and County Airport Revenue 3,500,000 3.75 9/03/97 3,500,000
ANNUAL VARIABLE RATE PUT BONDS 6.5%
CALIFORNIA 1.4%
California Higher Education Loan Authority, Inc. Student Loan Revenue 14,450,000 4.16 7/01/98 14,426,154
Orange County, California Apartment Development Revenue:
Villa La Paz Project 3,500,000 4.35 8/15/98 3,500,000
Villas Aliento Project 8,590,000 4.35 8/15/98 8,590,000
----------
26,516,154
COLORADO 0.3%
Dove Valley, Colorado Metropolitan District GO Refunding 4,975,000 4.15 11/01/97 4,975,000
FLORIDA 1.4%
Florida Housing Finance Agency MFHR:
Iona Lakes Project 17,155,000 4.10 4/01/98 17,155,000
Wood Forest II Project 8,600,000 4.13 12/01/97 8,600,000
----------
25,755,000
ILLINOIS 0.4%
Lombard, Illinois MFHR - Clover Creek Apartments Project 6,685,000 3.93 12/15/97 6,682,574
KANSAS 0.2%
Sedgwick County and Shawnee County, Kansas SFMR 3,135,000 4.60 6/01/98 3,135,000
LOUISIANA 1.4%
Louisiana Municipal Securities Trust Class A Certificates:
Series 1997-9 8,995,000 4.15 5/20/98 8,995,000
Series 1997-10A 11,505,000 4.10 6/02/98 11,505,000
Series 1997-10B 5,730,000 4.10 6/02/98 5,730,000
----------
26,230,000
MAINE 0.3%
Jay, Maine Solid Waste Disposal Revenue - International Paper Company Project 6,500,000 4.20 6/01/98 6,500,000
TENNESSEE 0.4%
Brownsville, Tennessee IDB IDR - Dynametal Technologies, Inc. Project 7,000,000 4.20 6/01/98 7,000,000
TEXAS 0.5%
Greater Texas Student Loan Corporation Revenue Refunding 4,250,000 4.05 6/01/98 4,250,000
Tarrant County, Texas HFC MFHR - Lincoln Meadows Project 4,375,000 4.11 12/01/97 4,374,881
----------
8,624,881
MULTIPLE STATES 0.2%
Eastern States Tax-Exempt Mortgage Bond Trust 4,740,000 5.19 3/01/98 4,740,000
-----------
TOTAL ANNUAL VARIABLE RATE PUT BONDS 120,158,609
See notes to financial statements.
15
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) August 31, 1997 (Unaudited)
- ---------------------------------------------------------------------------------------------------------------------------------
STRONG MUNICIPAL MONEY MARKET FUND (continued)
PRINCIPAL YIELD TO MATURITY AMORTIZED
AMOUNT MATURITY DATE (d) COST (NOTE 2)
- ----------------------------------------------------------------------------------------------------------------------------------
SEMI-ANNUAL VARIABLE RATE PUT BONDS 0.2%
NEVADA
Nevada Housing Division Single Family Program - Federally Insured or Guaranteed
Mortgage Loans $ 3,210,000 4.20% 10/01/97 $ 3,210,000
QUARTERLY VARIABLE RATE PUT BONDS 1.9%
LOUISIANA 0.7%
Louisiana Housing Finance Agency GNMA Collateralized SFMR MERLOT 12,160,000 4.10 11/01/97 12,160,000
MINNESOTA 0.8%
Dakota County, Washington County, and Anoka, Minnesota Housing and Redevelopment
Authorities SFMR - GNMA Mortgage-Backed Securities Program MERLOT 15,680,000 4.15 12/01/97 15,680,000
PENNSYLVANIA 0.2%
Pennsylvania Housing Finance Agency SFMR 3,200,000 4.13 10/01/97 3,200,000
WISCONSIN 0.2%
Wisconsin HDA EDA Home Ownership Revenue - MERLOT 3,200,000 4.15 12/01/97 3,200,000
----------
TOTAL QUARTERLY VARIABLE RATE PUT BONDS 34,240,000
MONTHLY VARIABLE RATE PUT BONDS 1.3%
COLORADO 0.1%
Jefferson County, Colorado IDR - Anthony A. Petrarca/Cedarwood Construction
Company, Inc. Project 2,420,000 4.75 10/01/97 2,420,000
ILLINOIS 0.1%
Green Leaf Ventures, Inc. Tax Exempt Bond Grantor Trust 2,000,000 4.65 10/01/97 2,000,000
MARYLAND 0.4%
Prince George's County, Maryland EDR Refunding - Capital View II LP Facility 6,380,000 4.35 10/01/97 6,380,000
MICHIGAN 0.1%
Michigan Job Development Authority IDR - Anthony A. Petrarca/Cedarwood Construction
Company, Inc. Project 1,740,000 4.75 10/01/97 1,740,000
OHIO 0.2%
Blue Bell Tax-Exempt Bond Grantor Trust 1,832,937 4.35 10/01/97 1,832,937
Summit County, Ohio Insured IDR - Anthony A. Petrarca/Cedarwood Construction
Company, Inc. Project 2,625,000 4.75 10/01/97 2,625,000
---------
4,457,937
MULTIPLE STATES 0.4%
Carolina Freight Tax Exempt Bond Grantor Trust 694,161 4.40 10/01/97 694,161
GAF Corporation Tax Exempt Bond Grantor Trust 4,300,000 4.25 10/01/97 4,300,000
Johnson Controls, Inc. Tax Exempt Bond Grantor Trust 2,345,000 4.35 10/01/97 2,345,000
----------
7,339,161
----------
TOTAL MONTHLY VARIABLE RATE PUT BONDS 24,337,098
WEEKLY VARIABLE RATE PUT BONDS 65.5%
ALABAMA 2.3%
Alabama IDA IDR:
Research Genetics, Inc. Project 3,345,000 3.90 9/09/97 3,345,000
Scientific Utilization, Inc. Project 3,500,000 3.70 9/09/97 3,500,000
Whitesell Project 5,000,000 3.90 9/09/97 5,000,000
Birmingham, Alabama Baptist Medical Center - Special Care Facilities
Financing Authority Revenue - Methodist Home for the Aging Project 11,885,000 3.95 9/09/97 11,885,000
Bridgeport, Alabama IDB IDR - Beaulieu Nylon, Inc. Project 10,000,000 3.80 9/09/97 10,000,000
Grove Hill, Alabama IDB IDR - Hamilton Woods Veneer Project 2,900,000 3.70 9/09/97 2,900,000
Madison County, Alabama MFHR Refunding:
Autumn Wood Project 2,920,000 3.85 9/09/97 2,920,000
Pinehurst Project 1,225,000 3.85 9/09/97 1,225,000
Montgomery, Alabama IDB IDR - Asphalt Contractors, Inc. Project 1,300,000 3.90 9/09/97 1,300,000
----------
42,075,000
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)
- ----------------------------------------------------------------------------------------------------------------------------------
ARIZONA 0.7%
Chandler, Arizona IDA MFHR - Greentree Place Apartments Project $ 6,593,000 5.78% 9/09/97 $ 6,593,000
Phoenix, Arizona IDA Airport Facility Revenue - America West Airlines, Inc.
Project 5,000,000 3.70 9/09/97 5,000,000
Tempe, Arizona IDA IDR - Schreiber Foods, Inc. Project 1,900,000 3.85 9/09/97 1,900,000
----------
13,493,000
ARKANSAS 0.9%
Conway County, Arkansas IDR - Cadron Creek Fibre Corporation Project 8,300,000 3.60 9/09/97 8,300,000
Magnolia, Arkansas IDR - American Fuel Cell and Coated Fabrics Company Project 3,655,000 3.85 9/09/97 3,655,000
Searcy, Arkansas IDR - Yarnell Ice Cream Company, Inc. Project 2,800,000 3.95 9/09/97 2,800,000
Trumann, Arkansas IDR - Roach Manufacturing Corporation Project 2,000,000 3.95 9/09/97 2,000,000
----------
16,755,000
CALIFORNIA 4.6%
California GO 10,840,000 3.50 9/09/97 10,840,000
California Statewide CDA MFHR - The Terraces at Park Marino Project 7,655,000 3.75 9/09/97 7,655,000
Los Angeles, California MFHR - Channel Gateway Apartments 32,700,000 3.90 9/09/97 32,700,000
Los Angeles County, California IDA IDR - Goldberg & Solovy Foods, Inc. Project 2,975,000 5.10 9/09/97 2,975,000
Ontario, California IDA IDR - P & S Development Project 2,500,000 3.95 9/09/97 2,500,000
Orange County, California Apartment Development Revenue - WLCO LF Partners
Project:
Series 1 5,000,000 3.90 9/09/97 5,000,000
Series 3 9,700,000 3.90 9/09/97 9,700,000
Paramount, California Housing Authority MFHR Refunding - Century Place
Apartments Project 4,250,000 3.94 9/09/97 4,250,000
San Bernardino County, California COP - 1992 Justice Center/Airport Improvements
Refunding Project 1,960,000 4.00 9/09/97 1,960,000
San Marcos, California Redevelopment Agency MFHR - San Marcos Retirement
Village Project 6,800,000 4.33 9/09/97 6,800,000
----------
84,380,000
COLORADO 1.1%
Aurora, Colorado IDR - Optima Batteries, Inc. Project 3,430,000 3.65 9/09/97 3,430,000
Jefferson County, Colorado IDR - Accutronics, Inc. Project 3,075,000 3.85 9/09/97 3,075,000
Lakewood, Colorado Jefferson County IDR - Verden Associates - Holiday
Inn Project 1,445,000 4.45 9/09/97 1,445,000
Westminster, Colorado IDR - Lifecare International Project 4,720,000 3.75 9/09/97 4,720,000
Westminster, Colorado MFHR - Lakeview Apartments Project 7,110,000 3.80 9/09/97 7,110,000
----------
19,780,000
FLORIDA 6.2%
Bay County, Florida Revenue - Methodist Homes Project 4,000,000 3.95 9/09/97 4,000,000
Brevard County, Florida IDR - U. S. Space Camp Foundation Project 3,540,000 3.95 9/09/97 3,540,000
Broward County, Florida HFA MFHR - Sawgrass Pines Apartments Project 11,000,000 4.15 9/09/97 11,000,000
Clipper Tax-Exempt Certificate Trusts 76,973,682 3.61 9/09/97 76,973,682
Dade County, Florida IDA IDR - Engelhard/ICC Project 8,000,000 3.65 9/09/97 8,000,000
Ithaka Partners II Trust Certificates 4,599,623 3.75 9/09/97 4,599,623
Orange County, Florida Health Facilities Authority Municipal Securities Trust
Receipts 6,835,000 3.55 9/09/97 6,835,000
-----------
114,948,305
GEORGIA 1.8%
Athens-Clarke County, Georgia IDA Industrial Revenue - Nakanishi Manufacturing
Corporation Project 2,000,000 3.73 9/09/97 2,000,000
Fulton County, Georgia Development Authority IDR - STO Corporation Project 3,600,000 3.90 9/09/97 3,600,000
Georgia Municipal Electric Authority Power Revenue Municipal Securities Trust
Receipts:
Series 1996 SAK 14 8,000,000 3.55 9/09/97 8,000,000
Series 1996 SAK 15 5,040,000 3.55 9/09/97 5,040,000
Lee County, Georgia Development Authority Revenue - Woodgrain Millwork, Inc.
Project 6,000,000 3.85 9/09/97 6,000,000
Newton County, Georgia IDA IDR - Komatsu Forklift USA, Inc. Project 7,500,000 3.75 9/09/97 7,500,000
Savannah, Georgia EDA IDR - Savannah Steel & Metal Company Project 1,635,000 3.90 9/09/97 1,635,000
----------
33,775,000
ILLINOIS 4.4%
Arlington Heights, Illinois MFHR Refunding - Dunton Tower Apartments Project 5,640,000 3.90 9/09/97 5,640,000
Carol Stream, Illinois IDR - MI Enterprises Project 2,850,000 3.65 9/09/97 2,850,000
Cicero, Cook County, Illinois IDR - Harris Steel Company Project 3,370,000 3.59 9/09/97 3,370,000
Evanston, Illinois IDR - Fountain Square Project 1,675,000 4.20 9/09/97 1,675,000
Hazel Crest, Illinois Retirement Center Revenue - Waterford Estates Project 895,000 3.80 9/09/97 895,000
Hazel Crest, Illinois Retirement Center Revenue - Waterford Estates Project 2,890,000 3.80 9/09/97 2,890,000
Illinois DFA EDR - Korex Corporation Project 4,000,000 3.86 9/09/97 4,000,000
Illinois DFA IDR:
Alcan-Toyo America Project 5,505,000 3.55 9/09/97 5,505,000
Associated Plastic Fabricators, Inc. Project 1,800,000 3.80 9/09/97 1,800,000
Fleetwood Systems, Inc. Project 4,885,000 3.55 9/09/97 4,885,000
Homak Manufacturing Company, Inc. Project 6,670,000 3.65 9/09/97 6,670,000
Icon Metalcraft, Inc. Project 2,830,000 3.65 9/09/97 2,830,000
Jefferson Partners LP - 216 South Jefferson Project 2,115,000 4.60 9/09/97 2,115,000
U.G.N., Inc. Project 3,000,000 3.65 9/09/97 3,000,000
See notes to financial statements.
17
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) August 31, 1997 (Unaudited)
- ----------------------------------------------------------------------------------------------------------------------------------
STRONG MUNICIPAL MONEY MARKET FUND (continued)
PRINCIPAL YIELD TO MATURITY AMORTIZED
AMOUNT MATURITY DATE (d) COST (NOTE 2)
- ----------------------------------------------------------------------------------------------------------------------------------
Merrionette Park, Illinois Industrial Project Revenue - Southwick & Weglarz
Project $ 6,225,000 4.00% 9/09/97 $ 6,225,000
Southwestern Illinois Development Authority Revenue - AEL Industries, Inc.
Project 5,840,000 3.75 9/09/97 5,840,000
Woodridge, DuPage and Will Counties, Illinois MFHR Refunding - Hinsdale Lake
Terrace Apartments Project 20,760,000 3.80 9/09/97 20,760,000
----------
80,950,000
INDIANA 0.6%
Columbus, Indiana EDR - ONKYO Manufacturing, Inc. Project 5,600,000 3.50 9/09/97 5,600,000
Frankfort, Indiana EDR - General Seating of America, Inc. Project 4,300,000 3.85 9/09/97 4,300,000
Greencastle, Indiana EDR - H. A. Parts Products of Indiana Company Project 2,000,000 3.80 9/09/97 2,000,000
----------
11,900,000
IOWA 1.5%
Cedar Rapids, Iowa IDR Refunding First Program - Columbus McKinnon Corporation
Project 1,035,000 4.00 9/09/97 1,035,000
Iowa Falls, Iowa IDR Refunding - GENPAK Corporation Project 3,800,000 4.33 9/09/97 3,800,000
Iowa Finance Authority Private School Facility Revenue - Xavier High School
Project 15,760,000 3.70 9/09/97 15,760,000
West Des Moines, Iowa Revenue - Woodgrain Millwork, Inc. Project 6,700,000 3.85 9/09/97 6,700,000
----------
27,295,000
KANSAS 0.7%
Kansas City, Kansas Private Activity Revenue - Ex-L-Tube of Kansas, Inc.
Project 5,811,000 3.75 9/09/97 5,811,000
Kansas DFA MFHR - First Kansas State Partnership, LP Project 3,000,000 3.85 9/09/97 3,000,000
Osage City, Kansas Industrial Revenue - Marley Continental Homes of Kansas
Project 4,800,000 3.73 9/09/97 4,800,000
----------
13,611,000
KENTUCKY 4.8%
Berea, Kentucky IDR - Tokico Manufacturing Corporation Project 6,000,000 3.95 9/09/97 6,000,000
Bowling Green, Kentucky IBR - Bando Manufacturing of America, Inc. Project 3,645,000 3.65 9/09/97 3,645,000
Daviess County, Kentucky MFHR Refunding - Park Regency Apartments Project 4,155,000 3.80 9/09/97 4,155,000
Jeffersontown, Kentucky IDR - Columbia Sussex Corporation Facility 5,995,000 5.00 9/09/97 5,995,000
Kentucky DFA IDR - Hesco Project 5,800,000 3.65 9/09/97 5,800,000
Ohio County, Kentucky PCR - Big Rivers Electric Corporation Project 25,300,000 3.95 9/09/97 25,300,000
Ohio County, Kentucky PCR - Big Rivers Electric Corporation Project 23,200,000 3.95 9/09/97 23,200,000
Somerset, Kentucky IBR - Tibbals Flooring Company Project 10,000,000 3.90 9/09/97 10,000,000
Walton, Kentucky IDR - Dynamec, Inc., a/k/a NAMCO, Inc. Project 3,500,000 3.65 9/09/97 3,500,000
----------
87,595,000
LOUISIANA 1.5%
Louisiana Housing Finance Agency SFMR - CDC Municipal Products, Inc. 5,955,000 3.50 9/09/97 5,955,000
New Orleans, Louisiana Aviation Board Revenue - Passenger Facility Charge
Project 17,560,000 3.55 9/09/97 17,560,000
Ouachita Parish, Louisiana IDB IDR - Epco Carbon Dioxide Products Project 3,200,000 3.80 9/09/97 3,200,000
----------
26,715,000
MARYLAND 0.5%
Charles County, Maryland Revenue - Chopp and Company, Inc. Facility 3,800,000 4.05 9/09/97 3,800,000
Washington County, Maryland EDR - Tandy Project 5,100,000 4.55 9/09/97 5,100,000
---------
8,900,000
MASSACHUSETTS 1.0%
Massachusetts Industrial Finance Agency IDR:
Lightolier, Inc. Project 4,400,000 3.85 9/09/97 4,400,000
Portland Causeway Realty Trust 2,600,000 4.33 9/09/97 2,600,000
U. S. Tsubaki, Inc. Project 4,700,000 4.05 9/09/97 4,700,000
Salem, Massachusetts IDFA IDR - Applied Extrusion Technologies, Inc. Project 6,500,000 4.33 9/09/97 6,500,000
----------
18,200,000
MICHIGAN 0.9%
Lansing, Michigan Limited Obligation EDC IDR - Ashland Oil, Inc. Project 1,400,000 5.44 9/09/97 1,400,000
Michigan Strategic Fund Limited Obligation Revenue - Coil Center Corporation
Project 8,850,000 4.35 9/09/97 8,850,000
Saline, Michigan EDC Limited Obligation Revenue - Associated Spring Project 7,000,000 4.00 9/09/97 7,000,000
----------
17,250,000
MINNESOTA 0.6%
Farmington, Minnesota IDR - WFW Ventures, LLC Project 2,000,000 3.69 9/09/97 2,000,000
New Brighton, Minnesota IDR - Donatelle Holdings Project 3,500,000 3.75 9/09/97 3,500,000
Princeton, Minnesota IDR - Plastic Products Company, Inc. Project 1,600,000 3.75 9/09/97 1,600,000
St. Louis Park, Minnesota IDR - Unicare Home, Inc. Project 4,800,000 4.10 9/09/97 4,800,000
----------
11,900,000
MISSISSIPPI 0.6%
Mississippi Business Finance Corporation IDR - Barclay Furniture Company
Project 1,500,000 3.75 9/09/97 1,500,000
Prentiss County, Mississippi IDR - Heidelberg Eastern Project:
Series A 2,500,000 4.40 9/09/97 2,500,000
Series B 6,650,000 4.50 9/09/97 6,650,000
----------
10,650,000
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)
- ----------------------------------------------------------------------------------------------------------------------------------
MISSOURI 2.3%
Berkeley, Missouri IDA Exempt Facility Revenue - St. Louis Air Cargo
Services, Inc. Project $ 7,675,000 3.60% 9/09/97 $ 7,675,000
St. Charles County, Missouri IDA IDR Refunding - Country Club Apartments
Project 25,000,000 3.81 9/09/97 25,000,000
St. Louis County, Missouri IDA MFHR - Whispering Lakes Apartments Project 8,000,000 3.70 9/09/97 8,000,000
St. Louis County, Missouri IDA Revenue - Allied Ring Project 2,500,000 3.75 9/09/97 2,500,000
-------------
43,175,000
NEBRASKA 0.8%
Douglas County, Nebraska IDR - QO Chemicals, Inc. Project 3,500,000 4.00 9/09/97 3,500,000
Nebraska IFA SFHR MERLOT 11,545,000 3.60 9/09/97 11,545,000
-------------
15,045,000
NEVADA 0.5%
Nevada Department of Commerce IDR - Master-Halco, Inc. Project 4,300,000 4.45 9/09/97 4,300,000
Nevada Housing Division Multi-Unit Housing Revenue - Oakmont at Reno Project 4,450,000 3.65 9/09/97 4,450,000
-------------
8,750,000
NEW HAMPSHIRE 1.4%
New Hampshire HFA SFMR 9,900,000 3.60 9/09/97 9,900,000
New Hampshire IDA Industrial Facility Revenue - Ferrofluidics Corporation -
Nashua Series Project 5,000,000 4.10 9/09/97 5,000,000
New Hampshire Turnpike System Revenue MERLOT 11,000,000 3.50 9/09/97 11,000,000
-------------
25,900,000
NEW JERSEY 0.1%
New Jersey EDA EDR - Hickory Industries, Inc. Project 1,850,000 4.05 9/09/97 1,850,000
NEW YORK 2.0%
Niagara County, New York IDA Solid Waste Disposal Facility Revenue -
American Refunding-Fuel Company of Niagara, LP Facility 24,505,000 3.50 9/09/97 24,505,000
Puttable Floating Option Tax-Exempt Receipts, Series PPT-5 12,760,000 3.50 9/09/97 12,760,000
-------------
37,265,000
NORTH CAROLINA 1.9%
Alleghany County, North Carolina Industrial Facilities and PCFA IDR -
Spring-Ford Knitting Company, Inc. Project 2,250,000 3.65 9/09/97 2,250,000
Craven County, North Carolina Industrial Facilities and PCFA IDR - Wheatstone
Corporation Project 3,800,000 3.85 9/09/97 3,800,000
Gaston County, North Carolina Industrial Facilities and PCFA IDR - Spring-Ford
Knitting Company, Inc. Project 4,330,000 3.65 9/09/97 4,330,000
Guilford County, North Carolina Industrial Facilities and PCFA IDR - Bonset
America Corporation Project 4,000,000 3.75 9/09/97 4,000,000
Hoke County, North Carolina Industrial Facilities and PCFA IDR - Triangle
Building Supply, Inc. Project 2,500,000 3.85 9/09/97 2,500,000
Mecklenburg County, North Carolina Industrial Facilities and PCFA Industrial
Revenue - Murata Wiedemann, Inc. Project 5,300,000 3.75 9/09/97 5,300,000
North Carolina Agricultural Finance Authority Agricultural Development -
J.E. Jones Lumber Company Project 2,000,000 3.85 9/09/97 2,000,000
North Carolina Ports Authority Exempt Facility Revenue - Jordan Lumber &
Supply, Inc. Project 5,080,000 3.80 9/09/97 5,080,000
Robeson County, North Carolina Industrial Facilities and PCFA IDR - Core
Industries, Inc. Project 5,000,000 3.60 9/09/97 5,000,000
-------------
34,260,000
NORTH DAKOTA 0.2%
Mercer County, North Dakota PCR - Minnesota Power & Light Company Project 3,160,000 3.95 9/09/97 3,160,000
OHIO 0.6%
Cuyahoga County, Ohio IDR:
Edge Seal Technologies, Inc. and One Industry Drive, Inc. Project 2,720,000 3.95 9/09/97 2,720,000
Motch Corporation Project 4,000,000 3.90 9/09/97 4,000,000
Gallia County, Ohio IDR - Harsco Corporation Project 3,500,000 3.90 9/09/97 3,500,000
-------------
10,220,000
OREGON 1.3%
Metropolitan Service District, Oregon Waste Disposal Project Revenue - Riedel
Oregon Compost Company, Inc. Project 3,900,000 3.70 9/09/97 3,900,000
Oregon EDR:
Behlen Manufacturing Company Project 5,500,000 3.60 9/09/97 5,500,000
JAE Oregon, Inc. Project 5,500,000 3.73 9/09/97 5,500,000
Kyotaru Oregon, Inc. Project 3,600,000 3.73 9/09/97 3,600,000
Toyo Tanso USA, Inc. Project 6,000,000 3.73 9/09/97 6,000,000
-------------
24,500,000
PENNSYLVANIA 2.6%
Bucks County, Pennsylvania IDA - Double H Plastics, Inc. Project 2,230,000 3.65 9/09/97 2,230,000
Cliff House Certificates Trust COP 11,000,000 4.95 9/09/97 10,996,920
See notes to financial statements.
19
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) August 31, 1997 (Unaudited)
- ----------------------------------------------------------------------------------------------------------------------------------
STRONG MUNICIPAL MONEY MARKET FUND (continued)
PRINCIPAL YIELD TO MATURITY AMORTIZED
AMOUNT MATURITY DATE (d) COST (NOTE 2)
- ----------------------------------------------------------------------------------------------------------------------------------
Lycoming County, Pennsylvania IDA Manufacturing Facilities Revenue - Coastal
Aluminum Rolling Mills, Inc. Project $ 4,000,000 3.65% 9/09/97 $ 4,000,000
Mercer County, Pennsylvania IDA IDR - Penntecq, Inc. Project 4,000,000 3.65 9/09/97 4,000,000
Montgomery County, Pennsylvania IDA IDR Refunding - Spring City LP Project 5,000,000 3.99 9/09/97 5,000,000
Montgomery County, Pennsylvania IDA - Laneko Engineering Company Project 2,245,000 3.65 9/09/97 2,245,000
Pennsylvania COP Municipal Securities Trust Receipts 6,165,000 3.55 9/09/97 6,165,000
Philadelphia, Pennsylvania IDA Revenue - 30th Street Station Project 13,100,000 4.15 9/09/97 13,100,000
-------------
47,736,920
SOUTH CAROLINA 1.1%
Charleston County, South Carolina Industrial Revenue - Tandy Corporation
Project 1,000,000 5.10 9/09/97 1,000,000
Richland County, South Carolina IDR - Ashland Oil Project 1,400,000 5.44 9/09/97 1,400,000
South Carolina Jobs EDA EDR:
Galvstar LLC Project 2,650,000 3.90 9/09/97 2,650,000
Glo-Tex Chemicals, Inc. Project 3,000,000 3.90 9/09/97 3,000,000
South Carolina Jobs EDA IDR:
Quoizel, Inc. Project 8,000,000 3.90 9/09/97 8,000,000
Roller Bearing Company of America, Inc. Project 5,000,000 4.11 9/09/97 5,000,000
-------------
21,050,000
SOUTH DAKOTA 1.2%
Aberdeen, South Dakota IDR - Lomar Development Company Project 290,000 4.10 9/09/97 290,000
Brookings, South Dakota IDR - Lomar Development Company Project 475,000 3.95 9/09/97 475,000
Brookings, South Dakota IDR - Lomar Development Company Project 2,120,000 4.10 9/09/97 2,120,000
South Dakota HDA Homeownership Mortgage 19,000,000 3.60 9/09/97 19,000,000
-------------
21,885,000
TENNESSEE 2.5%
Blount County, Tennessee IDB IDR - Advanced Crystal Technology, Inc. Project 3,300,000 3.65 9/09/97 3,300,000
Carter County, Tennessee IDB MFHR Refunding - Willow Run Apartments Project 6,675,000 3.80 9/09/97 6,675,000
Coffee County, Tennessee Industrial Board Revenue - M-Tek Project 2,700,000 4.60 9/09/97 2,700,000
Hamilton County, Tennessee IDB MFHR - The Waterford Place Apartments Project 10,100,000 3.71 9/09/97 10,100,000
Knox County, Tennessee Health, Education and Housing Facilities Board Revenue -
Holston Long Term Care Project 4,300,000 4.00 9/09/97 4,300,000
Memphis-Shelby County, Tennessee IDB IDR - Techno Steel Corporation Project 4,000,000 3.70 9/09/97 4,000,000
Memphis-Shelby County, Tennessee IDB PCR - Birmingham Steel Corporation Project 9,000,000 3.60 9/09/97 9,000,000
Roane County, Tennessee IDB Solid Waste Disposal Revenue - Horsehead Residential
Development Project 5,000,000 4.15 9/09/97 5,000,000
-------------
45,075,000
TEXAS 2.2%
ABIA Development Corporation Airport Facilities Revenue - Austin Airport
Infrastructure Project Puttable Floating Option Tax-Exempt Receipts,
Series PT-117 7,400,000 3.55 9/09/97 7,400,000
Austin County, Texas IDC IDR - Gulf States Toyota, Inc. Project 4,500,000 4.15 9/09/97 4,500,000
Azle, Texas IDA IDR - Tandy Corporation Project 3,000,000 4.55 9/09/97 3,000,000
Comal County, Texas IDA IDR - The Simpson Companies Project 3,000,000 3.60 9/09/97 3,000,000
Deer Park, Texas Port Development Corporation IDR - Ashland Oil, Inc. Project 4,700,000 5.44 9/09/97 4,700,000
Grand Prairie, Texas IDA IDR - Precision/API Ketema Project 3,800,000 3.70 9/09/97 3,800,000
Harris County, Texas IDC IDR - Chusei USA, Inc. Project 1,400,000 3.85 9/09/97 1,400,000
Longview, Texas Industrial Corporation IDR - Longview Guest Inn Project 2,400,000 3.75 9/09/97 2,400,000
Montgomery County, Texas IDC IDR - Porous Media, Ltd. Project 3,500,000 3.85 9/09/97 3,500,000
Robertson County, Texas IDC IDR - CR/PL Project 2,470,000 3.85 9/09/97 2,470,000
Robstown, Texas IDC IDR - Concrete Pipe and Products Company, Inc. Project 2,000,000 3.85 9/09/97 2,000,000
Tarrant County, Texas IDC IDR - Al-Ko Southwest, Inc. Project 1,500,000 4.05 9/09/97 1,500,000
-------------
39,670,000
UTAH 0.6%
Utah Housing Finance Agency SFMR 11,130,000 3.60 9/09/97 11,130,000
VIRGINIA 0.5%
Fairfax County, Virginia LaSalle National Bank LeaseTOPS Trust 4,221,541 3.65 9/09/97 4,221,541
Oyster Point, Virginia Development Corporation MFHR - Jefferson Point
Development Project 5,200,000 3.75 9/09/97 5,200,000
-------------
9,421,541
WASHINGTON 1.4%
Pierce County, Washington EDC - Brown & Haley Project 1,895,000 4.70 9/09/97 1,895,000
Pierce County, Washington EDC Pooled Bond Program Industrial Revenue -
America Nichirel Foods Project 4,500,000 4.35 9/09/97 4,500,000
Pilchuck, Washington Development Public Corporation Industrial Revenue -
Kohkoku USA, Inc. Project 4,000,000 3.73 9/09/97 4,000,000
Port Moses Lake, Washington Public Corporation Industrial Revenue - Basic
American Foods Project 4,200,000 3.95 9/09/97 4,200,000
See notes to financial statements.
20
<PAGE>
- ----------------------------------------------------------------------------------------------------------------------------------
STRONG MUNICIPAL MONEY MARKET FUND (continued)
PRINCIPAL YIELD TO MATURITY AMORTIZED
AMOUNT MATURITY DATE (d) COST (NOTE 2)
- ----------------------------------------------------------------------------------------------------------------------------------
Port of Vancouver, Washington Special Revenue - United Grain Corporation of
Oregon Project $ 9,500,000 3.75% 9/09/97 $ 9,500,000
Washington Community Economic Revitalization Board Economic Revenue 2,005,000 3.75 9/09/97 2,005,000
-------------
26,100,000
WISCONSIN 1.9%
Ashwaubenon, Wisconsin IDR - Pioneer Metal Finishing, Inc. Project 1,700,000 3.90 9/09/97 1,700,000
Columbus, Wisconsin IDR - Maysteel Corporation Project 2,000,000 3.90 9/09/97 2,000,000
De Pere, Wisconsin IDR - Cleaning Systems, Inc. Project 4,000,000 3.65 9/09/97 4,000,000
Madison, Wisconsin IDR - Manchester Place Project 7,925,000 3.75 9/09/97 7,925,000
Manitowoc, Wisconsin IDR - HTH Enterprises, LLC/Zenith Sintered Products, Inc.
Project 6,000,000 3.60 9/09/97 6,000,000
Milwaukee, Wisconsin Redevelopment Authority Development Revenue -
Washington Square Phase III Project 8,495,000 4.10 9/09/97 8,495,000
New London, Wisconsin IDR - Steel King Industries, Inc. Project 3,950,000 3.75 9/09/97 3,950,000
-------------
34,070,000
WYOMING 1.3%
Campbell County, Wyoming IDR - Powder Basin Properties Project 5,470,000 3.75 9/09/97 5,470,000
Green River, Wyoming Solid Waste Disposal Revenue - OCI Wyoming LP Project 8,600,000 3.65 9/09/97 8,600,000
Lincoln County, Wyoming PCR - Champlin Petroleum Company Project 2,525,000 4.30 9/09/97 2,525,000
Uinta County, Wyoming PCR - Champlin Petroleum Company Project 7,775,000 4.30 9/09/97 7,775,000
-------------
24,370,000
MULTIPLE STATES 4.4%
Capital Realty Investments Tax Exempt Fund, Ltd. Floating Rate Certificates:
Series 1996-2 30,750,000 3.60 9/09/97 30,750,000
Series 1996-4 30,520,000 3.65 9/09/97 30,520,000
NCNB Pooled Tax-Exempt Trust COP 2,175,000 4.25 9/09/97 2,175,000
Puttable Floating Option Tax-Exempt Receipts, Series PA-154 17,000,000 3.60 9/09/97 17,000,000
-------------
80,445,000
-------------
TOTAL WEEKLY VARIABLE RATE PUT BONDS 1,205,250,766
DAILY VARIABLE RATE PUT BONDS 1.4%
SOUTH CAROLINA 0.1%
Charleston County, South Carolina Industrial Revenue - Zeigler Coal Holdings 2,700,000 3.80 9/02/97 2,700,000
VIRGINIA 1.1%
Richmond, Virginia IDA Revenue - Cogentrix of Richmond, Inc. Project 20,200,000 4.10 9/02/97 20,200,000
WYOMING 0.2%
Lincoln County, Wyoming Environmental Improvement Revenue - PacifiCorp Project 3,000,000 4.00 9/02/97 3,000,000
-------------
TOTAL DAILY VARIABLE RATE PUT BONDS 25,900,000
-------------
TOTAL INVESTMENTS IN SECURITIES 100.4% 1,848,120,379
Other Assets and Liabilities, Net (0.4%) (7,757,056)
-------------
NET ASSETS 100.0% $1,840,363,323
==============
See notes to financial statements.
21
</TABLE>
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) August 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
STRONG MUNICIPAL ADVANTAGE FUND
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- --------------------------------------------------------------------------------
MUNICIPAL BONDS 37.5%
ARIZONA 0.4%
Gila County, Arizona IDA PCR Refunding -
ASARCO, Inc. Project, 8.90%, Due 7/01/06 $ 3,000,000 $ 3,105,000
ARKANSAS 1.0%
Fayetteville, Arkansas Public Facilities Board
Refunding and Improvement Revenue -
Butterfield Trail Village Project, 9.50%,
Due 9/01/14 (Pre-Refunding at 102 on 9/01/99) 3,385,000 3,795,431
Little Rock, Arkansas Collateralized IDR -
Lexicon, Inc. Project, 6.48%, Due 7/01/06 4,575,000 4,615,031
-----------
8,410,462
CALIFORNIA 2.1%
California Hospital Revenue - Valley Health System
Refunding and Improvement Project, 5.50%,
Due 5/15/00 740,000 744,625
Long Beach, California Harbor Revenue, 7.25%,
Due 5/15/19 3,550,000 3,680,001
Los Angeles, California Department of Water and
Power Water Works Revenue Refunding, 7.00%,
Due 2/15/22 (Crossover Refunding at 100 on
11/01/97) 4,550,000 4,794,562
Santa Ana, California Community Redevelopment
Refunding, 7.50%, Due 9/01/16 2,000,000 2,090,000
Vallejo, California BAN - Water Improvement
Project, 4.75%, Due 7/15/99 6,675,000 6,658,313
-----------
17,967,501
COLORADO 0.5%
Central City, Gilpin County, Colorado Excise Tax
Refunding, 5.40%, Due 12/01/00 4,400,000 4,466,000
CONNECTICUT 2.4%
Connecticut Development Authority Airport
Facilities Revenue - Roncari Associates, Inc.
Project, 7.25%, Due 12/01/99 2,116,192 2,139,999
Connecticut Resources Recovery Authority Revenue -
American REF-FUEL Company of Southeastern
Connecticut Project, 8.00%, Due 11/15/15 15,785,000 16,830,756
Norwich, Connecticut Tax-Exempt Equipment
Lease, 6.35%, Due 8/01/01 1,812,289 1,866,658
-----------
20,837,413
FLORIDA 3.0%
Hillsborough County, Florida EFA Revenue - The
University of Tampa Project, 6.70%,
Due 12/01/16 15,500,000 16,081,250
Pasco County, Florida Solid Waste Disposal and
Resource Recovery System Revenue, 5.00%,
Due 4/01/99 (f) 4,200,000 4,231,500
Tampa, Florida Capital Improvement Program
Revenue, 8.375%, Due 10/01/18 5,275,000 5,479,512
-----------
25,792,262
IDAHO 0.6%
Boise, Idaho Housing Authority Revenue - Hobbler
Place Project, 5.25%, Due 2/01/02 5,000,000 5,012,500
ILLINOIS 2.6%
Alton, Illinois Hospital Facilities Revenue &
Refunding - St. Anthony's Health Center:
4.65%, Due 9/01/98 1,350,000 1,349,595
4.95%, Due 9/01/99 1,400,000 1,401,750
5.00%. Due 9/01/01 850,000 844,688
5.15%, Due 9/01/00 1,355,000 1,360,081
Hodgkins, Illinois GO Tax Allocation, 9.50%,
Due 12/01/09 (Pre-Refunding at 104 on
12/01/01) 2,600,000 3,178,500
Illinois Health Facilities Authority Revenue
Refunding - Westlake Community Hospital
Project:
7.625%, Due 1/01/99 1,525,000 1,572,656
7.875%, Due 1/01/13 4,450,000 4,672,500
Kane, McHenry, Cook and DeKalb Counties,
Illinois Community Unit School District Number
300 GO Lease Secured COP - School Building
Project, 6.90%, Due 12/01/04 3,685,000 3,938,344
Romeoville, Will County, Illinois COP:
7.30%, Due 12/01/99 2,250,000 2,309,062
7.30%, Due 12/01/00 2,000,000 2,072,500
-----------
22,699,676
INDIANA 1.0%
East Chicago, Indiana School City COP, 5.50%,
Due 7/15/02 3,265,000 3,326,219
Fishers, Indiana First Mortgage EDR - United
Student Aid Funds, Inc. Project, 8.375%,
Due 9/01/14 3,250,000 3,377,465
Huntington, Indiana EDR Refunding - Quanex
Corporation Project, 6.50%, Due 8/01/10 1,665,000 1,716,782
-----------
8,420,466
IOWA 0.6%
Cedar Rapids, Iowa First Mortgage Revenue -
Cottage Grove Place Project, 7.25%,
Due 7/01/02 5,000,000 5,162,200
KANSAS 0.1%
Kansas City, Kansas Residual Revenue Capital
Appreciation, Zero %, Due 5/01/12 1,805,000 561,806
LOUISIANA 0.9%
Louisiana Public Facilities Authority Hospital
Revenue and Refunding - Pendleton Memorial
Methodist Hospital Project, 6.75%, Due 6/01/10 4,060,000 4,237,625
Ouachita Parish, Louisiana IDB, Inc. Revenue
Refunding - Physicians and Surgeons Medical
Complex Project, 4.80%, Due 8/01/02 4,000,000 4,005,000
-----------
8,242,625
MASSACHUSETTS 0.9%
Commonwealth of Massachusetts Department of
Revenue Tax-Exempt Master Equipment Lease:
5.40%, Due 9/30/99 4,646,037 4,698,304
5.62%, Due 10/01/01 2,493,814 2,543,690
Massachusetts Industrial Finance Agency
Industrial Revenue - John T. Spinelli Project,
7.00%, Due 11/01/00 919,267 919,267
-----------
8,161,261
MICHIGAN 0.4%
Detroit, Michigan EDC Resource Recovery
Revenue, 7.00%, Due 5/01/01 2,950,000 3,152,812
Pontiac, Michigan Hospital Financing Authority
Hospital Revenue - NOMC Obligation Group,
5.60%, Due 8/01/99 200,000 201,500
-----------
3,354,312
MINNESOTA 4.2%
St. Paul, Minnesota Housing and Redevelopment
Authority Hospital Facility Revenue - HealthEast
Project, 9.75%, Due 11/01/17 (Crossover
Refunding at 100 on 11/01/97)
Series A 21,925,000 22,549,106
Series D 13,500,000 13,884,210
-----------
36,433,316
MISSOURI 0.1%
Springfield, Missouri Land Clearance
Redevelopment Authority Industrial Revenue -
University Plaza Project, 5.90%, Due 10/01/01 1,210,000 1,217,563
See notes to financial statements.
22
<PAGE>
- --------------------------------------------------------------------------------
STRONG MUNICIPAL ADVANTAGE FUND (continued)
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- --------------------------------------------------------------------------------
NEBRASKA 0.7%
Omaha Tribe of Nebraska Public Improvements
Authority Omaha Tribe of Nebraska GO
Guaranty, 7.50%, Due 12/01/02 $ 6,300,000 $ 6,394,500
NEVADA 0.8%
Clark County, Nevada Airport Improvement
Revenue Airport System Improvements, 8.25%,
Due 7/01/15 5,000,000 5,242,700
Henderson, Nevada Local Improvement Districts
Number T-4, 6.00%, Due 11/01/01 475,000 480,344
Reno-Sparks, Nevada Convention and Visitors
Authority Limited Obligation Refunding, 6.25%,
Due 11/01/01 1,540,000 1,578,500
-----------
7,301,544
NEW JERSEY 2.3%
New Jersey EDA Senior Mortgage Revenue - Arbor
Glen of Bridgewater Project:
6.00%, Due 5/15/26 1,750,000 1,753,238
7.00%, Due 5/15/06 11,525,000 11,683,469
South Amboy, New Jersey Housing Authority
Housing Revenue - Shore Gate Village Grand
Project, 6.00%, Due 8/15/99 6,500,000 6,502,665
-----------
19,939,372
NEW YORK 0.7%
New York Medical Care Facilities Finance Agency
Revenue Hospital and Nursing Home Mortgage,
8.00%, Due 2/15/27 5,700,000 5,828,250
OHIO 1.4%
Cleveland, Ohio City School District Energy
Conservation Improvement GO:
6.53%, Due 9/15/98 590,000 603,352
6.53%, Due 3/15/99 610,000 626,012
6.53%, Due 9/15/99 630,000 652,050
Lucas County, Ohio Hospital Revenue Refunding -
Riverside Hospital Project, 7.625%,
Due 6/01/15 2,400,000 2,453,928
Ohio Department of Transportation COP -
Rickenbacker Port Project, 6.125%,
Due 4/15/15 1,150,000 1,194,562
Ohio Township, Allegheny County, Pennsylvania
GO, 5.15%, Due 11/15/00 1,785,000 1,827,394
Youngstown, Ohio City School District Energy
Conservation Measures, 6.80%, Due 3/15/05 4,745,000 4,976,319
-----------
12,333,617
OREGON 1.0%
Clackamas County, Oregon Hospital Facility
Authority Revenue and Refunding - Willamette
View, Inc. Project, 5.40%, Due 11/01/02 1,830,000 1,862,025
Portland, Oregon Housing Authority Tax Credit
Notes - Yards at Union Station Project, 5.00%,
Due 7/15/99 2,265,000 2,270,663
Portland, Oregon MFHR - Civic Stadium Housing
Project, 4.60%, Due 8/01/99 2,000,000 2,005,000
Washington County, Oregon Housing Authority
Tax Credit - Bethany Meadows Project, 5.00%,
Due 9/30/98 2,260,000 2,273,266
-----------
8,410,954
PENNSYLVANIA 4.8%
Delaware County, Pennsylvania IDA Refunding
Revenue - Resource Recovery Facility, 5.50%,
Due 1/01/99 2,940,000 2,980,425
Lancaster County, Pennsylvania Solid Waste
Management Authority Resource Recovery
System Revenue, 8.50%, Due 12/15/10 7,460,000 7,798,236
Philadelphia, Pennsylvania Airport Revenue
Refunding - Philadelphia Airport System Project,
5.50%, Due 6/15/01 (f) 2,000,000 2,057,500
Philadelphia, Pennsylvania Hospitals and Higher
Education Facilities Authority Revenue, 8.375%,
Due 6/01/04 1,665,000 1,804,444
Philadelphia, Pennsylvania Municipal Authority
Equipment Revenue, 5.297%, Due 10/01/04 18,000,000 18,607,500
Scranton, Lackawanna County, Pennsylvania
Health and Welfare Authority Hospital
Revenue - Moses Taylor Hospital Project,
5.25%, Due 7/01/02 4,750,000 4,785,625
Titusville, Crawford County, Pennsylvania GO,
5.00%, Due 4/15/99 3,500,000 3,548,125
-----------
41,581,855
SOUTH CAROLINA 1.1%
Charleston County, South Carolina First Mortgage
Health Facilities Revenue - The Episcopal
Church Home Project, 5.40%, Due 4/01/04 (f) 8,100,000 8,110,125
Charleston County, South Carolina Industrial
Revenue Refunding - Coburg Dairy, Inc. Project,
6.875%, Due 10/01/06 1,400,000 1,430,044
-----------
9,540,169
TEXAS 1.4%
Dallas-Fort Worth, Texas International Airport
Facilities Improvement Corporation Revenue -
American Airlines, Inc. Project, 7.50%,
Due 11/01/25 3,450,000 3,743,250
Houston, Texas Airport System Subordinate Lien
Revenue Refunding:
5.25%, Due 7/01/00 (f) 2,230,000 2,257,875
5.25%, Due 7/01/01 (f) 2,350,000 2,385,250
Texas Turnpike Authority Dallas North Tollway
Revenue, 7.125%, Due 1/01/15 3,675,000 3,783,192
-----------
12,169,567
UTAH 0.5%
Salt Lake City, Utah Redevelopment Agency
Central Business District Neighborhood
Redevelopment Tax Increment Revenue
Refunding, 4.75%, Due 10/01/02 4,200,000 4,189,500
WASHINGTON 1.6%
Clark County, Washington Industrial Revenue Bond
Public Corporation Solid Waste Disposal Project
Revenue - Camas Power Boiler LP Project, 4.65%,
Due 8/01/07 9,355,000 9,296,531
Lynnwood, Snohomish County, Washington Local
Improvement District Number 93-1 BAN, 4.60%,
Due 10/01/99 5,000,000 5,009,650
-----------
14,306,181
WEST VIRGINIA 0.2%
Kanawha County, West Virginia County
Commission IDR - Union Carbide Chemicals
and Plastics Company, Inc. Project, 8.00%,
Due 8/01/20 1,930,000 2,106,112
WISCONSIN 0.2%
Manawa, Wisconsin School District TRAN,
4.33%, Due 9/09/98 2,200,000 2,201,716
-----------
TOTAL MUNICIPAL BONDS (COST $323,129,539) 326,147,700
VARIABLE RATE PUT BONDS 7.4%
CALIFORNIA 0.9%
Santa Rosa, California Housing Authority MFHR -
Dutton Partners Project, 4.85%, Due 9/01/07
(Putable at $100 and Rate Reset
Effective 9/01/02) (f) 3,000,000 3,000,000
See notes to financial statements.
23
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) August 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
STRONG MUNICIPAL ADVANTAGE FUND (continued)
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- --------------------------------------------------------------------------------
Vallejo, California Housing Authority MFMR -
Highlands Apartments Project, 5.00%,
Due 6/01/07 (Putable at $100 and Rate Reset
Effective 6/01/99) $ 4,640,000 $ 4,645,568
-----------
7,645,568
COLORADO 0.3%
Colorado Health Facilities Authority Extendable
Rate Adjustable Securities - Baptist Home
Association of the Rocky Mountains, Inc.,
5.75%, Due 8/15/27 (Putable at $100 and Rate
Reset Effective 8/15/02) 3,000,000 3,007,500
FLORIDA 2.4%
Escambia County, Florida Escambia Housing
Corporation Housing Revenue:
Royal Arms Project, 7.00%, Due 7/01/17
(Putable at $100 and Rate Reset Effective
7/01/99) 9,360,000 9,406,800
Wellington Arms Project, 7.375%, Due 9/01/16
(Putable at $100 and Rate Reset Effective
9/01/99) 10,650,000 10,796,438
Florida Housing Finance Agency MFHR - Cypress
Lake Apartment Project, 5.75%, Due 12/01/07
(Putable at $100 and Rate Reset Effective
12/01/02) 200,000 204,250
-----------
20,407,488
GEORGIA 0.4%
Decatur County, Georgia Bainbridge IDA IDR -
John B. Sanfilippo & Son, Inc. Project, 5.375%,
Due 6/01/17 (Putable at $100 and Rate Reset
Effective 6/01/02) 3,000,000 3,026,250
ILLINOIS 0.4%
Chicago, Illinois MFHR - Chicago Beach
Apartments Project, 5.50%, Due 2/01/17
(Putable at $100 and Rate Reset Effective
2/01/02) 3,065,000 3,077,873
MAINE 0.7%
Maine Finance Authority MFHR - Back Bay Tower
Project, 5.25%, Due 9/01/18 (Putable at $100
and Rate Reset Effective 9/01/99) 6,000,000 6,052,500
OHIO 0.1%
Lorain County, Ohio IDR - Gilford Instrument
Laboratories, Inc. Project, 5.25%, Due 7/01/14
(Putable at $100 and Rate Reset Effective
7/01/99) 1,000,000 1,018,750
PENNSYLVANIA 0.3%
Chester County, Pennsylvania Health and Education
Facilities Authority Revenue - Barclay Friends
Project, 4.90%, Due 8/01/25 (Putable at $100 and
Rate Reset Effective 8/01/99) 2,500,000 2,531,250
SOUTH CAROLINA 0.3%
Charleston County, South Carolina First Mortgage
Health Facilities Revenue - The Episcopal Church
Home Project, 5.30%, Due 4/01/27 (Putable at
$100 and Rate Reset Effective 10/01/02) (f) 3,000,000 3,007,500
SOUTH DAKOTA 0.9%
Sioux Falls, South Dakota EDR Refunding - City
Centre Hotel Corporation Project, 7.00%,
Due 11/01/16 (Putable at $100 and Rate
Reset Effective 11/01/99) 8,176,783 8,176,783
TEXAS 0.7%
Bell County, Texas Health Facilities Development
Corporation Revenue Refunding - Central Texas
Pooled Health Care Loan Program, 4.75%,
Due 10/01/23 (Putable at $100 and Rate Reset
Effective on 10/01/98) 5,330,000 5,363,632
Trinity River Authority Refunding - Texas
Industries, Inc. Project, 6.375%, Due 9/01/07 440,000 446,050
Trinity River Authority Refunding - Texas
Industries, Inc. Project, Series A, 6.375%,
Due 9/01/07 270,000 273,712
6,083,394
-----------
TOTAL VARIABLE RATE PUT BONDS
(COST $63,589,370) 64,034,856
SHORT-TERM INVESTMENTS (a) 54.8%
MUNICIPAL BONDS 12.5%
CALIFORNIA 0.4%
Orange County, California Airport Revenue
Refunding, 5.00%, Due 7/01/98 3,000,000 3,025,140
FLORIDA 0.9%
Bayside, Florida Community Improvement
Development District BAN, 5.75%, Due 6/01/98 7,870,000 7,960,584
ILLINOIS 2.9%
Kane, McHenry, Cook and DeKalb Counties, Illinois
Community Unit School District Number 300 GO
Lease Secured COP - School Building Project,
5.00%, Due 12/01/97 470,000 470,700
Winnebago and Boone Counties, Illinois School
District Number 205 Tax Anticipation Warrants,
5.25%, Due 10/30/97 25,000,000 25,028,500
-----------
25,499,200
INDIANA 0.5%
Crawfordsville, Indiana Redevelopment District
BAN, 5.00%, Due 2/16/98 1,555,000 1,561,826
Jefferson County, Indiana Hospital Authority
Hospital Revenue Refunding - King's Daughters'
Hospital Project, 8.50%, Due 8/15/13
(Pre-Refunding at 102 on 8/15/98) 3,000,000 3,184,830
-----------
4,746,656
MASSACHUSETTS 0.5%
Mohawk Trail Regional School District BAN,
4.15%, Due 12/05/97 4,662,033 4,661,007
MICHIGAN 0.1%
Pontiac, Michigan Hospital Financing Authority
Hospital Revenue - NOMC Obligation Group,
5.40%, Due 8/01/98 840,000 843,940
MISSOURI 3.4%
Branson, Missouri BAN - Water Treatment Plant
Project, 5.30%, Due 5/30/98 13,145,000 13,267,906
Cass County, Missouri Tax and Revenue
Anticipation Warrants, 4.625%, Due 6/01/98 2,000,000 2,003,160
St. Charles County, Missouri Francis Howell
School District TRAN, 4.97%, Due 6/30/98 14,000,000 14,068,460
-----------
29,339,526
NEW JERSEY 2.5%
East Orange, Essex County, New Jersey TAN,
4.98%, Due 5/29/98 6,500,000 6,528,925
Irvington Township, New Jersey BAN, 5.125%,
Due 6/09/98 8,369,000 8,439,885
New Jersey Health Care Facilities Financing
Authority Revenue - Kimball Medical Center
Issue, 8.00%, Due 7/01/98 1,620,000 1,659,010
Orange Township, Essex County, New Jersey
TAN, 4.48%, Due 10/28/97 5,260,700 5,266,381
-----------
21,894,201
NEW YORK 0.7%
Babylon, Suffolk County, New York BAN, 4.75%,
Due 3/31/98 5,856,500 5,887,481
See notes to financial statements.
24
<PAGE>
- --------------------------------------------------------------------------------
STRONG MUNICIPAL ADVANTAGE FUND (continued)
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- --------------------------------------------------------------------------------
OHIO 0.1%
Cleveland, Ohio City School District Energy
Conservation Improvement GO:
6.53%, Due 9/15/97 $ 555,000 $ 555,350
6.53%, Due 3/15/98 570,000 576,943
-----------
1,132,293
WEST VIRGINIA 0.1%
Lewis County, West Virginia IDR Refunding - Gulf
Energy Gathering and Processing Corporation
Project, 7.60%, Due 10/15/97 1,000,000 1,004,190
WISCONSIN 0.4%
Bonduel, Wisconsin School District TRAN,
4.25%, Due 8/24/98 2,000,000 2,004,340
Neillsville, Wisconsin School District TRAN,
4.40%, Due 8/21/98 1,250,000 1,253,262
-----------
3,257,602
-----------
Total Municipal Bonds 109,251,820
VARIABLE RATE PUT BONDS 10.0%
ALABAMA 0.3%
Auburn, Alabama Non-Profit HDC MFHR -
Lakeside Apartments Project, 8.25%,
Due 12/01/17 (Putable at $100 and Rate Reset
Effective 12/01/97) 2,500,000 2,525,275
INDIANA 2.1%
Indianapolis, Indiana MFHR:
Broad Ripple Lakes LP Project, 4.30%,
Due 3/01/32 (Putable at $100 and Rate Reset
Effective 10/01/97) 7,950,000 7,950,000
Kingsmill Venture LP Project, 5.276%,
Due 7/01/29 (Putable at $100 and Rate Reset
Effective 10/01/97) 10,000,000 10,000,000
-----------
17,950,000
KANSAS 0.1%
Sedgwick and Shawnee Counties, Kansas SFHR,
4.50%, Due 3/01/20 (Putable at $100 and Rate
Reset Effective 6/01/98) 1,055,000 1,059,526
LOUISIANA 1.2%
Louisiana Public Facilities Authority MFHR -
Southfork Village Apartments Project, 8.00%,
Due 11/01/05 (Putable at $100 and Rate Reset
Effective 10/15/97) 10,500,000 10,535,010
MINNESOTA 0.9%
St. Paul, Minnesota Port Authority CDR
Refunding - Battle Creek Hotel Project, 4.95%,
Due 7/01/12 (Putable at $100 and Rate Reset
Effective on 4/01/98) 7,420,000 7,448,938
PENNSYLVANIA 2.4%
Pennsylvania COP Short Term Auction Rate Securities:
4.50%, Due 7/01/06 (Putable at $100 and Rate
Reset Effective 1/02/98) 13,100,000 13,100,000
4.50%, Due 7/01/07 (Putable at $100 and Rate
Reset Effective 1/02/98) 7,850,000 7,850,000
-----------
20,950,000
WISCONSIN 0.9%
Germantown, Wisconsin IDR - Moldmakers
Leasing and Investments LLP Project, 5.50%,
Due 12/01/12 (Putable at $100 and Rate Reset
Effective 12/03/97) 4,000,000 4,013,640
Lac Courte Oreilles, Wisconsin Band of Lake
Superior Chippewa Indians Public Purpose
Infrastructure Revenue, 6.25%, Due 8/01/01
(Putable at $100 and Rate Reset
Effective 8/01/98) 3,470,000 3,485,198
-----------
7,498,838
WYOMING 2.1%
Wyoming Student Loan Corporation Student Loan
Revenue, 4.00%, Due 2/01/32 (Putable at $100
and Rate Reset Effective 9/17/97) 10,850,000 10,850,000
Wyoming Student Loan Corporation Student Loan
Revenue Refunding, 4.00%, Due 12/01/05
(Putable at $100 and Rate Reset Effective
9/17/97) 7,800,000 7,800,000
-----------
18,650,000
-----------
Total Variable Rate Put Bonds 86,617,587
ANNUAL PUT BONDS 5.8%
CALIFORNIA 5.1%
Inland Valley, California Development Agency
Tax Allocation Bonds (e) 44,485,000 44,539,717
OHIO 0.1%
Sharonville, Ohio IDR - Ralston Purina
Company Project (e) 1,000,000 1,000,180
PENNSYLVANIA 0.2%
Pennsylvania Housing Finance Agency SFMR (e) 1,000,000 1,004,050
Pennsylvania Housing Finance Agency SFMR (e) 1,080,000 1,084,374
-----------
2,088,424
TENNESSEE 0.4%
Knox County, Tennessee 7.50% IDB IDR -
Spartan Food Systems, Inc. Project 1,500,000 1,503,750
Maryville, Tennessee 7.50% IDB IDR -
Spartan Food Systems, Inc. Project 1,500,000 1,503,750
-----------
3,007,500
-----------
Total Annual Put Bonds 50,635,821
QUARTERLY VARIABLE RATE PUT BONDS 0.7%
WASHINGTON
Washington Housing Finance Commission
SFMR Refunding:
Series S-1A 380,000 380,000
Series S-1B 4,275,000 4,275,000
Series S-2B 1,095,000 1,095,000
Series S-3A 350,000 350,000
Series S-4A 305,000 305,000
- -----------
Total Quarterly Variable Rate Put Bonds 6,405,000
WEEKLY VARIABLE RATE PUT BONDS 18.8%
ALABAMA 1.7%
Birmingham, Alabama IDB IDR - Home Baking
Company, Inc. Project 3,565,000 3,565,000
Birmingham, Alabama IDB IDR - Home Baking
Company, Inc. Project 1,385,000 1,385,000
Huntsville, Alabama Educational Building
Authority Revenue - Faulkner University
Project 1,150,000 1,150,000
Livingston, Alabama IDB IDR Refunding -
Toin Corporation U.S.A. Project 1,100,000 1,100,000
Montgomery, Alabama Educational Building
Authority Facilities Revenue - Faulkner
University Project 7,585,000 7,585,000
-----------
14,785,000
CALIFORNIA 3.7%
Glendora, California Foothill Nursing Home 940,000 940,000
Los Angeles, California Community Redevelopment
Agency Housing Revenue - Ithaka Partners III 1,780,000 1,780,000
See notes to financial statements.
25
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) August 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
STRONG MUNICIPAL ADVANTAGE FUND (continued)
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- --------------------------------------------------------------------------------
Los Angeles, California MFHR - Channel Gateway
Apartments $12,200,000 $12,200,000
Los Angeles County, California IDA IDR -
Fruitland Associates Project 3,100,000 3,100,000
Orange County, California Apartment Development
Revenue - WLCO LF Partners Project - Series 2 5,300,000 5,300,000
Pasadena, California Community Development
Commission COP:
Kings Plaza Project 885,000 885,000
Lake/Washington Neighborhood Shopping Center 2,545,000 2,545,000
Riverside, California MFHR - Spruce Grove
Project 3,680,000 3,680,000
Riverside County, California IDA IDR - Medical
Design Concepts IV Project 1,500,000 1,500,000
-----------
31,930,000
COLORADO 0.3%
Arapahoe County, Colorado IDR - Denver
JetCenter, Inc. Project 1,600,000 1,600,000
Grand Junction, Colorado IDR - Sundstrand
Corporation Project 1,000,000 1,000,000
-----------
2,600,000
FLORIDA 0.1%
Broward County, Florida HFA MFHR - Sawgrass
Pines Apartments Project 1,000,000 1,000,000
ILLINOIS 0.8%
Illinois DFA IDA - Toyomenka (America), Inc.
Project 2,200,000 2,200,000
Illinois DFA IDR - Sumitomo Machinery
Corporation Project 2,000,000 2,000,000
Salem, Illinois IDR - Americana Building
Products Project 2,565,000 2,565,000
-----------
6,765,000
INDIANA 1.1%
Madison, Indiana EDR - Arvin Sango, Inc. Project 9,600,000 9,600,000
IOWA 0.9%
Creston, Iowa IDR - CF Processing, LC Project 3,190,000 3,190,000
Creston, Iowa IDR - CF Processing, LC Project 4,810,000 4,810,000
-----------
8,000,000
MINNESOTA 0.2%
Delano, Minnesota IDR - Solar Plastics, Inc.
Project 2,015,000 2,015,000
MISSOURI 0.2%
Jefferson County, Missouri IDA Industrial Revenue
Refunding - Festus Manor Nursing Home Project 1,575,000 1,575,000
NEVADA 0.0%
Nevada Department of Commerce IDR -
Master-Halco, Inc. Project 300,000 300,000
NEW YORK 0.6%
Wayne County, New York IDA IDR - Seneca Foods
Corporation Project 5,060,000 5,060,000
NORTH CAROLINA 0.3%
Moore County, North Carolina Industrial Facilities
and PCFA Industrial Revenue - Cotton Creek Chip
Company Project 1,900,000 1,900,000
New Hanover County, North Carolina Industrial
Facilities Revenue - Wilmington Machinery, Inc.
Project 1,015,000 1,015,000
-----------
2,915,000
OHIO 0.7%
Ohio Housing Finance Agency Refunding -
10 Wilmington Place Project 5,910,000 5,910,000
PENNSYLVANIA 1.7%
Berks County, Pennsylvania IDA Manufacturing
Facilities Revenue:
Berks Products Corporation Project 2,750,000 2,750,000
Grafika Commercial Printing, Inc. Project 1,885,000 1,885,000
Philadelphia, Pennsylvania IDA Revenue -
30th Street Station Project 10,000,000 10,000,000
-----------
14,635,000
SOUTH CAROLINA 1.3%
Rock Hill, South Carolina Industrial Revenue -
Willamette Industries, Inc. Project 7,500,000 7,500,000
South Carolina Jobs EDA EDR -
B.F. Shaw, Inc. Project 4,000,000 4,000,000
-----------
11,500,000
TENNESSEE 0.6%
Anderson County, Tennessee IDB Revenue -
Becromal of America, Inc. Project 2,000,000 2,000,000
Dover, Tennessee IDB Revenue - Nashville Wire
Products Manufacturing Company Project 3,000,000 3,000,000
-----------
5,000,000
TEXAS 2.2%
San Antonio, Texas Airport Lease Revenue -
Hedrick Beechcraft, Inc. Project 4,100,000 4,100,000
San Antonio, Texas Electric and Gas Systems
Municipal Securities Trust Receipts 14,920,000 14,920,000
-----------
19,020,000
VIRGINIA 0.2%
Buena Vista, Virginia IDA IDR Refunding -
Everbrite, Inc. Project 2,045,000 2,045,000
WASHINGTON 0.4%
Pierce County, Washington EDC Pooled Bond
Program Industrial Revenue - America
Nichirel Foods Project 2,000,000 2,000,000
Washington Community Economic Revitalization
Board Umbrella Bond Program EDR 1,020,000 1,020,000
-----------
3,020,000
WISCONSIN 0.5%
Combined Locks, Wisconsin IDR - Appleton
Papers, Inc. Project 4,300,000 4,300,000
MULTIPLE STATES 1.3%
Port Authority of New York and New Jersey
Special Obligation Revenue 11,100,000 11,100,000
-----------
Total Weekly Variable Rate Put Bonds 163,075,000
DAILY VARIABLE RATE PUT BONDS 7.0%
ILLINOIS 0.2%
Will County, Illinois Solid Waste Disposal
Revenue - BASF Corporation Project 2,000,000 2,000,000
LOUISIANA 2.0%
Ascension Parish, Louisiana Revenue -
BASF Corporation Project 2,000,000 2,000,000
West Baton Rouge Parish, Louisiana Industrial
District Number 3 Revenue - The Dow
Chemical Company Project 15,200,000 15,200,000
-----------
17,200,000
NEW YORK 1.2%
New York State Tollway Authority General
Revenue Floating Rate Receipts 10,500,000 10,500,000
SOUTH CAROLINA 0.6%
Florence County, South Carolina Solid Waste
Disposal and Wastewater Treatment Facilities
Revenue - Roche Carolina, Inc. Project 5,000,000 5,000,000
See notes to financial statements.
26
<PAGE>
- --------------------------------------------------------------------------------
STRONG MUNICIPAL ADVANTAGE FUND (CONTINUED)
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- --------------------------------------------------------------------------------
TEXAS 1.5%
Brazos River Texas Harbor Navigation District
Harbor Revenue - Dow Chemical Company
Project $9,000,000 $ 9,000,000
Harris County, Texas IDC Solid Waste Disposal
Revenue - Deer Park Refining LP 3,900,000 3,900,000
-----------
12,900,000
WYOMING 0.6%
Sweetwater County, Wyoming Environmental
Improvement Revenue - Pacificorp Project 5,000,000 5,000,000
MULTIPLE STATES 0.9%
Puttable Floating Option Tax-Exempt Receipts,
Series PPT-6 8,420,000 8,420,000
-----------
Total Daily Variable Rate Put Bonds 61,020,000
TOTAL SHORT-TERM INVESTMENTS
(COST $476,425,904) 477,005,228
-----------
TOTAL INVESTMENTS IN SECURITIES
(COST $863,144,813) 99.7% 867,187,784
Other Assets and Liabilities, Net 0.3% 2,445,326
------------
NET ASSETS 100.0% $869,633,110
============
- --------------------------------------------------------------------------------
STRONG ADVANTAGE FUND
SHARES OR
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- --------------------------------------------------------------------------------
CORPORATE BONDS 70.3%
AMR Corporation Delaware Debentures, 10.00%,
Due 4/15/21 $ 6,223,000 $ 7,783,878
Advance Bank Australia Floating Rate
Subordinated Notes, 6.5625%, Due 3/14/06 15,000,000 15,157,500
Atlas Air, Inc. Pass-Thru Trusts, Pass-Thru
Certificates, 12.25%, Due 12/01/02 6,800,000 7,602,400
Bank of Boston Capital Trust III Floating Rate
Capital Securities, 6.5625%, Due 6/15/27 10,000,000 9,899,670
Bank of Ireland Perpetual Floating Rate Junior
Subordinated Notes, 6.8125%, Due 9/29/49 5,000,000 5,000,000
Bank of Scotland Variable Rate Subordinated
Notes, 6.75%, Due 8/29/49 34,000,000 34,000,000
Bell & Howell Operating Company Senior Notes,
9.25%, Due 7/15/00 1,175,000 1,210,250
Bell Cablemedia PLC Senior Discount Notes,
Zero %, Due 7/15/04 (Rate Reset
Effective 7/15/99) 10,000,000 9,350,000
Building Materials Corporation Senior Deferred
Coupon Notes, Series B, Zero %, Due 7/01/04
(Rate Reset Effective 7/01/99) 7,000,000 6,492,500
Cablevision Systems Corporation Debentures,
8.125%, Due 8/15/09 (Acquired 8/21/97;
Cost $19,925,400) (b) 20,000,000 19,950,000
Caesars World, Inc. Senior Subordinated
Debentures, 8.875%, Due 8/15/02 1,700,000 1,760,775
California Federal Bank Linked Restructured
Asset Certificates with Enhanced Returns,
Series 1997-C-5-5, 8.50%, Due 4/01/99
(Acquired 5/05/97; Cost $14,225,000) (b) 14,225,000 14,171,656
California Hotel Finance Corporation Guaranteed
Senior Subordinated Notes, 11.00%,
Due 12/01/02 2,282,000 2,418,920
Chase Manhattan Corporation Floating Rate
Notes, 5.9375%, Due 12/30/09 30,930,000 30,125,820
Citicorp Floating Rate Notes:
6.50%, Due 5/01/04 7,166,000 7,232,988
Series W, 5.8125%, Due 11/27/35 10,000,000 9,400,000
Series X, 5.725%, Due 11/27/35 10,000,000 9,375,000
Cleveland Electric Linked Restructured Asset
Certificates with Enhanced Returns, Series
1997-C-X, 7.2125%, Due 6/01/01
(Acquired 7/14/97; Cost $18,000,000) (b) 18,000,000 17,955,000
Cole National Group, Inc. Senior Notes, 11.25%,
Due 10/01/01 12,645,000 14,035,950
Contifinancial Corporation Senior Notes, 7.50%,
Due 3/15/02 14,220,000 14,176,487
Corestates Capital II Floating Rate Subordinated
Capital Income Securities, 6.40%, Due 1/15/27
(Acquired 5/14/97; Cost $9,852,500) (b) 10,000,000 9,864,920
Cort Furniture Rental Corporation Senior Notes,
12.00%, Due 9/01/00 15,275,000 16,726,125
Credit Lyonnais Floating Rate Notes, 6.8125%,
Due 9/19/49 20,000,000 19,870,000
Delta Air Lines, Inc. Pass-Thru Trust Pass-Thru
Certificates, Series 1993-A2, 10.50%,
Due 4/30/16 10,000,000 12,865,730
Dime Bancorp, Inc. Senior Notes, 10.50%,
Due 11/15/05 12,270,000 13,312,950
Ferrellgas LP/Ferrellgas Financial Corporation
Senior Notes, 10.00%, Due 8/01/01 5,000,000 5,250,000
First Bank System, Inc. Subordinated Floating
Rate Notes, 5.875%, Due 11/30/10
(Putable at $100 on 11/30/00) 6,980,000 7,039,839
First Empire Capital Trust II Capital Securities,
8.277%, Due 6/01/27 8,000,000 8,295,064
First Maryland Capital I Variable Rate
Subordinated Capital Income Securities,
6.75%, Due 1/15/27 19,500,000 19,821,165
Fort Howard Corporation Pass-Thru Trust
Pass-Thru Certificates, Series 1991, 11.00%,
Due 1/02/02 6,649,651 7,040,318
HSB Capital I Floating Rate Securities, Series A,
6.66%, Due 7/15/27 (Acquired 7/10/97;
Cost $8,906,850) (b) 9,000,000 9,009,945
Harrahs Operating, Inc. Guaranteed Senior
Subordinated Notes, 8.75%, Due 3/15/00 9,600,000 9,864,000
Health & Retirement Properties Trust Reset
Notes, 6.20%, Due 7/09/07 20,000,000 19,850,000
Healthsouth Corporation Senior Subordinated
Notes, 9.50%, Due 4/01/01 19,385,000 20,451,175
Heritage Media Services, Inc. Senior Secured
Notes, 11.00%, Due 6/15/02 5,305,000 5,623,300
Huntington Capital I Variable Rate Capital Income
Securities, 6.4188%, Due 2/01/27 (Acquired
1/23/97 - 4/16/97; Cost $27,841,415) (b) 28,500,000 27,688,519
Huntsman Polymers Corporation Senior Notes,
11.75%, Due 12/01/04 3,796,000 4,336,930
Imperial Capital Trust I Guaranteed Capital
Securities, 9.98%, Due 12/31/26 5,300,000 5,625,669
Indspec Chemical Corporation Senior
Subordinated Discount Notes, Series B, Zero %,
Due 12/01/03 (Rate Reset Effective 12/01/98) 38,571,000 37,221,015
JP Morgan & Company, Inc. Subordinated Notes,
8.00%, Due 5/30/05 1,400,000 1,423,201
K-III Communications Corporation Senior Notes,
10.25%, Due 6/01/04 5,000,000 5,400,000
LIBOR Indexed Trust Certificates,
Series 1997-C-5-1, 7.0625%, Due 6/15/00
(Acquired 4/24/97; Cost $20,000,000) (b) 20,000,000 19,990,000
Long Island Lighting Company Debentures,
8.90%, Due 7/15/19 22,000,000 23,433,784
Long Island Lighting Company General and
Refunding Bonds, 8.625%, Due 4/15/04 10,000,000 10,162,470
Marine Midland Bank Floating Rate Notes,
6.00%, Due 12/31//09 21,460,000 21,003,975
See notes to financial statements.
27
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) August 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
STRONG ADVANTAGE FUND (continued)
SHARES OR
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- --------------------------------------------------------------------------------
Maxus Energy Corporation Notes, 9.875%,
Due 10/15/02 $33,045,000 $ 34,697,250
Mercantile Capital Trust I Floating Rate
Pass-Thru Securities, 6.5688%, Due 2/01/27 10,000,000 9,939,360
Mohegan Tribal Gaming Authority Connecticut
Senior Secured Notes, Series B, 13.50%,
Due 11/15/02 10,425,000 13,708,875
NBD Bancorp, Inc. Subordinated Floating Rate
Notes, 5.9375%, Due 12/18/05 18,530,000 18,497,832
NTC Capital Trust II Floating Rate Capital
Securities, 6.34%, Due 4/15/27 23,805,000 23,595,944
NWCG Holdings Corporation Senior Secured
Discount Notes, Series B, Zero %, Due 6/15/99 27,000,000 24,232,500
National Commerce Capital Trust Floating Rate
Pass-Thru Securities, 6.7613%, Due 4/01/27 15,000,000 15,013,695
National Westminster Bank Floating Rate Notes,
6.54%, Due 9/29/49 34,500,000 34,500,000
Newscorp Overseas Limited Floating Rate Debt
Unit with Swap Agreement (Structured
Enhanced Return Trusts 1995, Series R-27),
6.6813%, Due 6/30/99 (Acquired 6/12/95;
Cost $27,120,000) (b) 28,250,000 25,425,000
North Fork Bancorp Capital Trust Pass-Thru
Securities, 8.70%, Due 12/15/26 8,500,000 8,680,625
Northwest Airlines, Inc. Guaranteed Senior Notes,
12.0916%, Due 12/31/00 260,051 266,553
Okobank Subordinated Step-Up Perpetual Floating
Rate Notes, 7.075%, Due 10/29/49 550,000 560,312
Old Kent Capital Trust I Subordinated Floating
Rate Capital Income Securities, 6.5188%,
Due 2/01/27 16,000,000 15,960,208
Republic of Panama Floating Rate Notes,
7.0313%, Due 5/14/02 2,307,720 2,293,297
Panamsat LP/ Panamsat Capital Corporation
Senior Secured Notes, 9.75%, Due 8/01/00 65,605,000 69,541,300
Panamsat LP/Panamsat Capital Corporation
Senior Subordinated Discount Notes, Zero %,
Due 8/01/03 (Rate Reset Effective 8/01/98) 10,000,000 9,793,700
Paramount Communications, Inc. Notes, 7.50%,
Due 1/15/02 20,000,000 20,146,740
Pinto Totta International Finance, Ltd.
Non-Cumulative Guaranteed Preference Shares,
Series A, 7.77%, Due 8/01/49 (Acquired 7/24/97;
Cost $5,000,000) (b) 5,000,000 4,958,500
Repap New Brunswick, Inc. First Priority Senior
Secured Floating Rate Notes, 8.875%,
Due 7/15/00 23,600,000 23,305,000
Residential Reinsurance, Ltd. Floating Rate Notes,
11.6523%, Due 12/15/98 (Acquired 6/10/97;
Cost $1,000,000) (b) 1,000,000 1,003,500
Rowan Companies, Inc. Senior Notes, 11.875%,
Due 12/01/01 4,687,000 4,956,502
Salomon, Inc. Senior Consumer Price Index-Linked
Bonds, 3.65%, Due 2/14/02 14,875,000 14,523,578
Santa Fe Energy Resources, Inc. Senior
Subordinated Debentures, 11.00%, Due 5/15/04 15,920,000 17,352,800
Socgen Real Estate LLC Bonds, 7.64%,
Due 12/29/49 (Rate Reset Effective 10/01/07)
(Acquired 8/21/97; Cost $5,750,000) (b) 5,750,000 5,763,840
Star Capital Trust I Floating Rate Securities,
6.5775%, Due 6/15/27 (Acquired 6/05/97;
Cost $14,855,400) (b) 15,000,000 14,931,120
Stop & Shop Companies, Inc. Senior Subordinated
Notes, 9.75%, Due 2/01/02 5,000,000 5,541,105
Suntrust Capital I Trust Floating Rate Preferred
Securities, 6.42%, Due 5/15/27 6,000,000 5,985,336
Suntrust Capital II Trust Floating Rate Pass-Thru
Securities, 7.90%, Due 6/15/27 1,330,000 1,351,263
Swedbank Floating Rate Debt Unit (Medium Term
Structured Enhanced Return Trusts 1996):
Series R-34, 6.6188%, Due 11/10/02
(Acquired 5/23/96; Cost $25,000,000)(b) 25,000,000 25,000,000
Series R-35, 6.5688%, Due 11/10/02
(Acquired 10/16/96; Cost $20,000,000)(b) 20,000,000 20,000,000
System Energy Resources, Inc. First Mortgage
Bonds, 11.375%, Due 9/01/16 790,000 841,500
TCI Communications, Inc. Remarketed Floating
Rate Reset Notes, 6.4625%, Due 9/15/03 5,000,000 5,010,645
Tele Communications, Inc. Variable Rate Medium
Term Notes:
Tranche #58, 6.5313%, Due 12/20/00 10,000,000 10,009,820
Tranche #59, 6.5313%, Due 12/20/00 5,000,000 5,005,160
Tenet Healthcare Corporation Senior Notes,
7.875%, Due 1/15/03 25,000,000 25,500,000
Time Warner Pass-Thru Asset Trust Securities,
Series 1997-1, 6.10%, Due 12/30/01
(Acquired 1/08/97; Cost $22,896,000)(b) 24,000,000 23,203,200
Triangle Pacific Corporation Senior Notes,
10.50%, Due 8/01/03 8,210,000 8,825,750
Trident NGL, Inc. Subordinated Notes, 10.25%,
Due 4/15/03 2,500,000 2,684,375
Triton Energy Ltd./Triton Energy Corporation
Senior Notes, 8.75%, Due 4/15/02 12,000,000 12,498,768
UCAR Global Enterprises, Inc. Senior
Subordinated Notes, 12.00%, Due 1/15/05 2,000,000 2,277,500
Union Bank of Norway Dual Basis Floating Rate
Notes (Medium Term Structured Enhanced
Return Trusts 1995, Series R-31), 7.25%,
Due 10/25/00 (Acquired 11/06/95;
Cost $15,000,000) (b) 15,000,000 15,225,000
Union Planters Capital Trust A Capital Securities,
8.20%, Due 12/15/26 15,000,000 15,334,320
Van Kampen Merritt Companies, Inc. Senior
Secured Notes, 9.75%, Due 2/15/03 11,550,000 12,115,950
Viacom International, Inc. Notes, 9.125%,
Due 8/15/99 27,658,000 28,360,873
Viacom International, Inc. Reset Notes, 8.75%,
Due 5/15/01 (Rate Reset Effective 5/15/98) 24,815,000 25,332,219
Videotron Holdings PLC Senior Discount Notes,
Zero %, Due 7/01/04 (Rate Reset Effective
7/01/99) 28,000,000 26,075,000
Wachovia Capital Trust V Capital Securities,
7.965%, Due 6/01/27 (Acquired 6/03/97;
Cost $15,000,000) (b) 15,000,000 15,194,625
Westpoint Stevens, Inc. Senior Notes, 8.75%,
Due 12/15/01 27,805,000 28,847,688
Worldcom, Inc. Senior Notes, 9.375%, Due 1/15/04 8,716,000 9,293,435
Wyman Gordon Company Senior Notes, 10.75%,
Due 3/15/03 1,820,000 1,945,125
-------------
TOTAL CORPORATE BONDS
(COST $1,316,591,325) 1,323,375,576
NON-AGENCY MORTGAGE & ASSET-BACKED
SECURITIES 23.3%
AFC Mortgage Loan Trust Variable Rate
Asset-Backed Certificates, Series 1994-1,
Class 2A-1, 7.7571%, Due 5/25/25 2,607,169 2,652,377
California Federal Bank, A Federal Savings Bank
of Los Angeles, Variable Rate Mortgage
Pass-Thru Certificates, Series 1988 PAL-1,
Class A, 7.6598%, Due 2/25/18 2,256,591 2,253,071
Chase Mortgage Finance Corporation Mortgage
Pass-Thru Certificates, Series 1990-G,
Class A-Z1, 9.50%, Due 12/25/21 2,099,537 2,153,348
See notes to financial statements.
28
<PAGE>
- --------------------------------------------------------------------------------
STRONG ADVANTAGE FUND (continued)
SHARES OR
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- --------------------------------------------------------------------------------
Citicorp Mortgage Securities, Inc. Adjustable Rate
Real Estate Mortgage Investment Conduit
Pass-Thru Certificates, Series 1992-7, Class 10,
7.329%, Due 3/25/22 $ 6,266,013 $ 6,425,609
Collateralized Mortgage Obligation Trust,
Series 14, Class Z, 8.00%, Due 1/01/17 1,903,067 1,923,339
DLJ Mortgage Acceptance Corporation Variable
Rate Mortgage Pass-Thru Certificates:
Series 1990-2, Class A, 7.5743%, Due 1/25/22 8,958,496 9,148,864
Series 1991-3, Class A1, 7.4974%, Due 2/20/21 1,196,605 1,217,546
Series 1992-Q7, Class A2, 7.2033%, Due
9/25/22 14,236,312 14,456,548
Series 1994-Q16, Class 1A1, 8.9144%,
Due 1/01/25 14,096,365 14,468,650
DLJ Mortgage Acceptance Corporation Variable
Rate Multifamily Mortgage Pass-Thru
Certificates, Series 1992-MF10, Class A-1,
7.5313%, Due 12/22/02 5,836,597 5,894,963
Equipment Pass-Thru Investment Certificates
Trust Floating Rate Senior Certificates,
Series 1996-1:
Class A, 6.875%, Due 9/25/09 (Acquired 6/14/96;
Cost $4,900,000) (b) 4,900,000 4,930,625
Class B, 7.625%, Due 9/25/09 (Acquired 7/01/96;
Cost $5,390,000) (b) 5,390,000 5,416,950
Class C, 10.875%, Due 9/25/03
(Acquired 6/28/97; Cost $4,798,274) (b) 4,727,364 4,963,732
The Equitable Life Assurance Society of the
United States Collateralized Floating Rate Notes,
Series D-2, 6.7023%, Due 5/15/03 (Acquired
5/23/96 - 8/08/96; Cost $11,521,094) (b) 11,500,000 11,496,435
First Boston Mortgage Securities Corporation
Variable Rate Mortgage Pass-Thru Certificates,
Series 1994-MHC1:
Class C, 6.7484%, Due 4/25/11 9,600,000 9,636,000
Class D, 7.3484%, Due 4/25/11 5,200,000 5,252,000
First USA Bank Credit Card Master Trust Asset
Backed Certificates, Series 1997-8, Class A,
5.775%, Due 5/17/10 15,000,000 15,000,000
Franchise Finance Corporation of America
Floating Rate Notes, Series 1997-1:
Class D2, 6.7875%, Due 7/18/13
(Acquired 6/04/97; Cost $5,726,000) (b) 5,726,000 5,726,000
Class E2, 7.0375%, Due 1/18/14
(Acquired 6/04/97; Cost $2,290,000) (b) 2,290,000 2,290,000
Fund America Investors Corporation Variable
Rate Senior Pass-Thru Certificates, Series
1993-A, Class A-1, 7.6672%, Due 6/25/23 17,546,516 18,204,510
Glendale Federal Bank Variable Rate Mortgage
Pass-Thru Certificates, Series 1990-3,
Class A-1, 7.6818%, Due 3/01/30 3,331,980 3,419,445
Glendale Federal Bank Variable Rate Senior
Pass-Thru Mortgage Securities, Series 1990-1,
Class A, 7.4171%, Due 10/25/29 1,978,201 2,002,928
Greenwich Capital Acceptance, Inc. Variable Rate
Mortgage Pass-Thru Certificates, Series 1991-1,
Class A, 7.4057%, Due 2/25/21 (Acquired
4/18/97 - 6/23/97; Cost $27,343,340)(b) 26,752,914 27,388,296
Greenwich Capital Trust I, Class A, 7.3557%,
Due 2/15/21 (Acquired 3/04/97; Cost
$9,299,991) (b) 8,936,928 9,294,405
Homart Pooled Asset Financial Trust Floating
Rate Collateral Trust Certificates:
Class A-3, 7.5313%, Due 12/29/01
(Acquired 12/21/93; Cost $10,000,000)(b) 10,000,000 10,025,000
Class A-4, 8.2813%, Due 12/29/01 (Acquired
2/09/95; Cost $9,987,500)(b) 10,000,000 10,025,000
Kmart CMBS Financing, Inc. Floating Rate
Commercial Mortgage Pass-Thru Certificates,
Series 1997-1, Class D, 6.725%, Due 3/01/07
(Acquired 2/21/97 - 3/10/97;
Cost $15,020,625) (b) 15,000,000 15,028,200
Malan Mortgage Securities Trust Floating Rate
Commercial Mortgage Pass-Thru Certificates,
Series 1995-1, Class A2A, 6.4367%, Due 8/15/05
(Acquired 2/21/97; Cost $4,010,000) (b) 4,000,000 4,005,000
Merrill Lynch Credit Corporation Floating Rate
Pass-Thru Asset-Backed Mortgage Loans,
Series 1996-C, Class B, 6.9375%, Due 12/15/21
(Acquired 5/09/97; Cost $1,159,032) (b) 1,350,165 1,152,919
Merrill Lynch Home Equity Acceptance, Inc.
Subordinated Variable Rate Mortgage-Backed
Certificates, Series 1994-A, Class A-1, 6.625%,
Due 8/17/23 11,202,690 11,111,724
Merrill Lynch Mortgage Investors, Inc. Senior
Subordinated Variable Rate Pass-Thru
Certificates, Series 1994-A, Class M, 6.6875%,
Due 11/15/23 11,000,000 11,098,010
Morgan Stanley Mortgage Trust Variable Rate
Collateralized Mortgage Obligation, Series 35,
Class 35-2, Interest Only, 7,042.25%, Due
4/20/21 33,129 596,321
Perpetual Savings Bank Variable Rate Mortgage
Pass-Thru Certificates, Series 1991-1, Class B1,
7.7279%, Due 6/25/19 (Acquired 9/17/96;
Cost $1,298,588) (b) 1,285,135 1,299,592
Prudential Home Mortgage Securities Company
Variable Rate Mortgage Pass-Thru Certificates,
Series 1988-1, Class A, 7.7997%, Due 4/25/18 1,707,477 1,743,761
Prudential Home Thirty-Year Mortgage Trust
Subordinated Mortgage Securities, Series 1992-A,
Class 1B1, 7.20%, Due 4/28/22 (Acquired
12/12/96; Cost $1,052,722)(b) 1,052,722 1,045,153
RTC Adjustable Rate Mortgage Loan Pass-Thru
Certificates, Series 1991-1, Class A-1, 7.3713%,
Due 4/26/21 17,179,535 17,448,051
RTC Mortgage Pass-Thru Securities, Inc.
Commercial Certificates, Series 1992-C7,
Class C, 9.25%, Due 6/25/23 1,197,132 1,212,647
RTC Mortgage Pass-Thru Securities, Inc.
Manufactured Housing Certificates, Series
1992-MH1, Class A-1, 7.00%, Due 2/15/19 79,520 79,796
RTC Mortgage Pass-Thru Securities, Inc., Series
1995-2, Class A-1A, 6.70%, Due 5/25/29 930,434 923,167
RTC Variable Rate Mortgage Pass-Thru
Securities, Inc.:
Series 1992-4, Class B-2, 7.5795%, Due
7/25/28 4,376,187 4,518,413
Series 1992-6, Class A-3, 7.7972%, Due
1/25/26 10,787,568 10,976,350
Series 1992-6, Class B-9, 6.485%, Due
11/25/26 3,034,334 3,051,418
Series 1992-15, Class B-7, 7.0175%, Due
7/25/27 1,000,000 1,005,630
Series 1992-C1, Class B, 7.625%, Due 8/25/23 1,000,372 1,010,376
Series 1995-1, Class B-5, 6.8345%, Due
10/25/28 20,336,805 20,540,173
Series 1995-1, Class B-11, 7.225%, Due
10/25/28 3,843,035 3,887,460
RTC Variable Rate Mortgage Pass-Thru Securities,
Inc. Commercial Pass-Thru Certificates,
Series 1994-C2, Class E, 8.00%, Due 4/25/25 12,542,530 12,882,934
Residential Funding Mortgage Securities II, Inc.
Variable Rate Interest Only Home Equity Loan
Pass-Thru Certificates, Series 1996-HS2,
Class A, 1.70%, Due 9/25/12 45,353,894 1,247,232
Ryland Mortgage Securities Corporation III
Collateralized Mortgage Bonds, Series 1992-C,
Class 3-A, 7.65%, Due 11/25/30 11,037,436 11,099,577
Ryland Mortgage Securities Corporation IV
Variable Rate Collateralized Mortgage Bonds,
Series 2, Class 3-A, 11.9918%, Due 6/25/23 894,726 932,474
See notes to financial statements.
29
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) August 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
STRONG ADVANTAGE FUND (continued)
SHARES OR
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- --------------------------------------------------------------------------------
Ryland Mortgage Securities Corporation Senior
Mortgage Partnership Variable Rate Securities,
89-1, Class 1A, Perpetual Savings Bank,
7.8807%, Due 9/25/19 $ 936,378 $ 935,704
Ryland Mortgage Securities Corporation Variable
Rate Mortgage Participation Securities:
Series 1990-C1, Class A, 6.261%, Due
10/25/20 20,729,988 20,522,688
Series 1992-3, Class A-2, 7.5836%, Due
6/25/20 15,482,289 15,656,464
SML Commercial Mortgage Trust Variable Rate
Pass-Thru Certificates, Series 1994-C1,
Class A-1, 6.625%, Due 9/18/99 22,499,500 22,526,499
Santa Barbara Savings & Loan Association
California Real Estate Mortgage Investment
Conduit Participation Certificates, Series
1988-A, Class 2, Principal Only, Due 9/01/18 1,073,429 801,218
Sears Mortgage Securities Corporation Variable
Rate Pass-Thru Certificates, Series 1992-23,
Class A-4, 6.7699%, Due 10/25/22 2,223,181 2,227,783
Structured Asset Securities Corporation
1997-N1 LLC:
Class A-2, Floating Rate Notes, 5.805%,
Due 9/25/28 8,000,000 7,997,520
Class B, Floating Rate Notes, 5.955%,
Due 9/25/28 8,689,000 8,686,306
Structured Asset Securities Corporation Variable
Rate Multiclass Pass-Thru Certificates,
Series 1996-C1:
Class D, 6.625%, Due 10/25/10 (Acquired
9/27/96; Cost $5,969,040) (b) 6,000,000 6,000,000
Class E, 6.875%, Due 10/25/10 (Acquired
9/27/96; Cost $2,742,273) (b) 2,764,388 2,764,388
U-Haul Self-Storage Corporation Commercial
Mortgage Asset Trust Variable Rate Pass-Thru
Certificates, Series 1993-1, Class A1, 7.0875%,
Due 12/01/20 (Acquired 12/02/93;
Cost $1,048,888) (b) 1,048,888 1,048,888
Western Federal Savings & Loan Association
Marina Del Rey California Variable Rate
Mortgage Pass-Thru Certificates, Series 1991-4,
Class A, 7.093%, Due 7/01/21 6,586,751 6,714,402
-------------
TOTAL NON-AGENCY MORTGAGE & ASSET-BACKED
SECURITIES (COST $436,134,250) 439,443,879
UNITED STATES GOVERNMENT & AGENCY
ISSUES 3.9%
FHLMC Participation Certificates:
9.00% Due 1/01/05 thru 9/15/20 43,269,908 46,275,665
10.75%, Due 10/01/00 72,529 76,202
11.00%, Due 10/01/00 thru 9/01/20 1,708,816 1,892,010
11.75%, Due 5/01/11 thru 6/01/11 1,458,233 1,637,044
12.00%, Due 9/01/11 thru 2/01/15 541,675 614,390
12.25%, Due 7/01/15 1,011,168 1,145,745
12.50%, Due 2/01/15 171,199 196,179
FNMA Guaranteed Real Estate Mortgage
Investment Conduit Pass-Thru Certificates:
9.00%, Due 5/01/17 thru 3/25/20 14,830,050 15,735,582
13.50%, Due 9/01/14 17,316 20,583
FNMA Guaranteed Real Estate Mortgage
Investment Conduit Variable Rate Pass-Thru
Certificates, 7.852%, Due 12/01/17 4,590,501 4,779,859
GNMA Guaranteed Pass-Thru Certificates:
13.50%, Due 8/15/14 thru 11/15/14 121,956 147,178
15.00%, Due 8/15/11 thru 9/15/12 45,725 56,819
-------------
TOTAL UNITED STATES GOVERNMENT & AGENCY
ISSUES (COST $71,897,711) 72,577,256
OPTIONS 0.1%
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.) (Cost $1,512,573) 32,666,667 2,188,667
PREFERRED STOCKS 1.1%
Banco Central Hispanoamericano, SA Eurocap,
7.8469% 600,000 15,480,000
California Federal Bank, A Federal Savings Bank,
Los Angeles, Series B 10.625% 10,000 1,103,750
NB Capital Corporation 8.35% Exchangeable
(Acquired 8/22/97; Cost $5,000,000) (b) 5,000 5,000,000
-------------
TOTAL PREFERRED STOCKS (COST $21,392,500) 21,583,750
SHORT-TERM INVESTMENTS (a) 2.6%
COMMERCIAL PAPER 0.1%
INTEREST BEARING, DUE UPON DEMAND
American Family Financial Services, Inc., 5.20% 20,100 20,100
Johnson Controls, Inc., 5.22% 719,700 719,700
Wisconsin Electric Power Company, 5.24% 124,000 124,000
-------------
863,800
CORPORATE BONDS 0.9%
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 $4,997,500) (b) 5,000,000 5,450,000
Rogers Communications, Inc. Floating Rate Debt
Unit with Premium Call (Medium Term
Structured Enhanced Return Trusts 1995,
Series R-25), 8.725%, Due 6/21/98
(Acquired 5/15/95; Cost $12,000,000) (b) 12,000,000 12,084,000
-------------
17,534,000
REPURCHASE AGREEMENT 1.4%
Cantor Fitzgerald & Company, Inc. (Dated 8/29/97),
5.47%, Due 9/02/97 (Repurchase proceeds
$26,716,228); Collateralized by $26,700,000
United States Treasury Notes, 6.25%, Due
5/31/99 (Market Value $27,234,000)(g) 26,700,000 26,700,000
UNITED STATES GOVERNMENT ISSUES 0.2%
United States Treasury Bills, Due 9/04/97 thru
11/28/97 (c) 3,685,000 3,670,190
-------------
TOTAL SHORT-TERM INVESTMENTS
(COST $48,231,406) 48,767,990
-------------
TOTAL INVESTMENTS IN SECURITIES
(COST $1,895,759,765) 101.3% 1,907,937,118
Other Assets and Liabilities, Net (1.3%) (24,531,242)
--------------
NET ASSETS 100.0% $1,883,405,876
==============
FUTURES
- -------
UNDERLYING
EXPIRATION FACE AMOUNT UNREALIZED
DATE AT VALUE DEPRECIATION
- --------------------------------------------------------------------------------
Purchased:
9 Ten-Year U.S. Treasury Notes 12/97 $ 978,188 ($ 2,880)
Sold:
347 Two-Year U.S. Treasury Notes 12/97 71,590,438 (18,868)
1,734 Five-Year U.S. Treasury Notes 12/97 184,562,626 (11,887)
390 Ten-Year U.S. Treasury Notes 12/97 42,388,125 (43,425)
730 Thiry-Year U.S. Treasury Bonds 12/97 82,307,500 (410,714)
See notes to financial statements.
30
<PAGE>
- --------------------------------------------------------------------------------
STRONG ADVANTAGE FUND (continued)
- --------------------------------------------------------------------------------
PERCENTAGE OF
INDUSTRY DIVERSIFICATION NET ASSETS
- ----------------------------------------------------------------
Bank - Money Center ................................. 14.3%
Non-Agency Single Family ............................ 11.9
Bank - Regional ..................................... 10.2
Media - Radio/TV .................................... 8.6
Non-Agency Asset-Backed ............................. 5.3
Non-Agency Commercial ............................... 5.2
Media - Publishing .................................. 4.2
Telecommunication Service ........................... 4.2
Household Appliances & Furnishings .................. 2.9
FHLMC ............................................... 2.8
Bank - Super Regional ............................... 2.4
Healthcare - Patient Care ........................... 2.4
Energy - Alternate Source ........................... 2.3
Chemical ............................................ 2.0
Electric Power ...................................... 1.8
Oil - International Integrated ...................... 1.8
Oil - North American Exploration & Production ....... 1.6
Paper & Forest Products ............................. 1.6
U.S. Government ..................................... 1.6
Airline ............................................. 1.5
Leisure Service ..................................... 1.5
Savings & Loan ...................................... 1.5
Brokerage & Investment Management ................... 1.4
Real Estate ......................................... 1.4
FNMA ................................................ 1.1
Non-Agency Manufactured Housing ..................... 0.9
Mortgage & Related Service .......................... 0.8
Retail - Specialty .................................. 0.8
Insurance - Property & Casualty ..................... 0.5
Telecommunication Equipment ......................... 0.5
Automobile .......................................... 0.3
Commercial Service .................................. 0.3
Engineering & Construction .......................... 0.3
Oil Well Equipment & Service ........................ 0.3
Retail - Food Chain ................................. 0.3
Chemical - Specialty ................................ 0.2
Aerospace & Defense ................................. 0.1
Computer Service .................................... 0.1
Finance - Miscellaneous ............................. 0.1
Foreign Government .................................. 0.1
Natural Gas Distribution ............................ 0.1
Steel ............................................... 0.1
Other Assets and Liabilities, Net ................... (1.3)
-----
Total 100.0%
=====
PERCENTAGE OF
COUNTRY DIVERSIFICATION NET ASSETS
- ----------------------------------------------------------------
United States ...................................... 86.7%
United Kingdom ..................................... 6.1%
Sweden ............................................. 2.4%
Canada ............................................. 1.9%
France ............................................. 1.1%
Australia .......................................... 0.8%
Norway ............................................. 0.8%
Spain .............................................. 0.8%
Ireland ............................................ 0.3%
Portugal ........................................... 0.3%
Panama ............................................. 0.1%
Other Assets and Liabilities, Net .................. (1.3%)
-----
Total 100.0%
=====
LEGEND
- ------
(a) Short-term investments include 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.
(f) When-issued security.
(g) The funds may engage in repurchase agreements where the underlying
collateral consists of U.S. Government securities which are maintained in a
segregated account with a custodian. The market value of the collateral
must exceed the principal amount by at least two percent on a daily basis.
Percentages are stated as a percent of net assets.
ABBREVIATIONS
- -------------
The following is a list of abbreviations that may be used in the Schedules of
Investments in Securities:
BAN -- Bond Anticipation Notes
CDA -- Commercial Development Authority
CDR -- Commercial Development Revenue
COP -- Certificates of Participation
DFA -- Development Finance Authority
EDA -- Economic Development Authority
EDC -- Economic Development Corporation
EDFA -- Economic Development Finance Authority
EDR -- Economic Development Revenue
EFA -- Educational Facilities Authority
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
MERLOT -- Municipal Exempt Receipt - Liquidity Optional Tender
MFHR -- Multi-Family Housing Revenue
MFMR -- Multi-Family Mortgage Revenue
PCR -- Pollution Control Revenue
PCFA -- Pollution Control Financing Authority
RAN -- Revenue Anticipation Notes
SFHR -- Single Family Housing Revenue
SFMR -- Single Family Mortgage Revenue
TAN -- Tax Anticipation Notes
TRAN -- Tax and Revenue Anticipation Notes
See notes to financial statements.
31
<PAGE>
<TABLE>
STATEMENTS OF ASSETS AND LIABILITIES
- ---------------------------------------------------------------------------------------------------------------------------
August 31, 1997 (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 $1,691,016 $1,848,120
Receivable from Brokers for Securities Sold -- 18,881
Interest Receivable 6,094 13,124
Other Assets 67 533
---------- ----------
Total Assets 1,697,177 1,880,658
LIABILITIES:
Payable to Brokers for Securities Purchased -- 34,478
Dividends Payable 8,055 5,547
Accrued Operating Expenses and Other Liabilities 159 270
---------- ----------
Total Liabilities 8,214 40,295
---------- ----------
NET ASSETS $1,688,963 $1,840,363
========== ==========
NET ASSETS CONSIST OF:
Capital (par value and paid-in surplus) $1,688,963 $1,840,363
========== ==========
Capital Shares Outstanding (Unlimited Number Authorized) 1,688,963 1,840,363
NET ASSET VALUE PER SHARE $1.00 $1.00
===== =====
STRONG MUNICIPAL STRONG
ADVANTAGE FUND ADVANTAGE FUND
---------------- --------------
ASSETS:
Investments in Securities, at Value (Cost of $863,145 and
$1,895,760, respectively) $867,188 $1,907,937
Receivable from Brokers for Securities and Forward Foreign
Currency Contracts Sold 35,956 5,197
Receivable for Fund Shares Sold 1,210 3,768
Interest Receivable 11,270 22,502
Other Assets 280 956
-------- ---------
Total Assets 915,904 1,940,360
LIABILITIES:
Payable to Brokers for Securities and Forward Foreign
Currency Contracts Purchased 42,973 45,811
Payable for Fund Shares Redeemed 90 1,247
Dividends Payable 3,144 9,642
Accrued Operating Expenses and Other Liabilities 64 254
-------- ----------
Total Liabilities 46,271 56,954
-------- ----------
NET ASSETS $869,633 $1,883,406
======== ==========
NET ASSETS CONSIST OF:
Capital (par value and paid-in surplus) $868,389 $1,875,205
Undistributed Net Realized Loss (2,799) (3,489)
Net Unrealized Appreciation 4,043 11,690
-------- ----------
Net Assets $869,633 $1,883,406
======== ==========
Capital Shares Outstanding (Unlimited Number Authorized) 173,531 186,335
NET ASSET VALUE PER SHARE $5.01 $10.11
===== ======
See notes to financial statements.
</TABLE>
32
<PAGE>
<TABLE>
STATEMENTS OF OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------
For the Six Months Ended August 31, 1997 (Unaudited)
(In Thousands)
<CAPTION>
STRONG HERITAGE STRONG MUNICIPAL
MONEY FUND MONEY MARKET FUND
--------------- -----------------
<S> <C> <C>
INTEREST INCOME $54,836 $38,778
EXPENSES:
Investment Advisory Fees 4,835 4,670
Custodian Fees 37 26
Shareholder Servicing Costs 428 755
Other 270 176
------- -------
Total Expenses before Waivers and Absorptions 5,570 5,627
Voluntary Expense Waivers and Absorptions by Advisor (3,577) --
------- -------
Expenses, Net 1,993 5,627
------- -------
NET INVESTMENT INCOME $52,843 $33,151
======= =======
STRONG MUNICIPAL STRONG
ADVANTAGE FUND ADVANTAGE FUND
---------------- --------------
INCOME:
Dividends $ -- $ 890
Interest 18,197 57,385
------- -------
Total Income 18,197 58,275
EXPENSES:
Investment Advisory Fees 2,196 5,018
Custodian Fees 16 34
Shareholder Servicing Costs 160 1,210
Federal and State Registration Fees 74 142
Other 54 189
------- -------
Total Expenses before Waivers and Absorptions 2,500 6,593
Voluntary Expense Waivers and Absorptions by Advisor (1,212) --
------- -------
Expenses, Net 1,288 6,593
------- -------
NET INVESTMENT INCOME 16,909 51,682
REALIZED AND UNREALIZED GAIN (LOSS):
Net Realized Gain (Loss) on:
Investments (701) 3,476
Futures Contracts, Options and Forward Foreign
Currency Contracts (474) (3,765)
------- -------
Net Realized Loss (1,175) (289)
Change in Unrealized Appreciation/Depreciation on:
Investments 1,537 4,980
Futures Contracts, Options and Forward Foreign
Currency Contracts -- (884)
------- -------
Net Change in Unrealized Appreciation/Depreciation 1,537 4,096
------- -------
NET GAIN 362 3,807
------- -------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $17,271 $55,489
======= =======
See notes to financial statements.
33
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------------
(In Thousands)
<CAPTION>
STRONG HERITAGE STRONG MUNICIPAL
MONEY FUND MONEY MARKET FUND
-------------------------------- ---------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
AUG. 31, 1997 FEB. 28, 1997 AUG. 31, 1997 FEB. 28, 1997
---------------- ------------- ---------------- -------------
(UNAUDITED) (UNAUDITED)
OPERATIONS:
<S> <C> <C> <C> <C>
Net Investment Income $ 52,843 $ 84,722 $ 33,151 $ 60,309
Net Realized Loss -- (13,448) -- --
--------- ---------- ---------- ----------
Increase in Net Assets Resulting from Operations 52,843 71,274 33,151 60,309
DISTRIBUTIONS:
From Net Investment Income (52,843) (84,722) (33,151) (60,309)
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 1,160,024 3,030,732 1,586,471 3,223,480
Proceeds from Reinvestment of Dividends 49,967 75,780 30,431 56,751
Payment for Shares Redeemed (1,521,186) (2,048,407) (1,671,436) (2,994,239)
---------- ---------- ---------- ----------
Increase (Decrease) in Net Assets from Capital
Share Transactions (311,195) 1,058,105 (54,534) 285,992
CAPITAL CONTRIBUTION (NOTE 6) -- 13,448 -- --
- ---------- ---------- ---------- ----------
TOTAL INCREASE (DECREASE) IN NET ASSETS (311,195) 1,058,105 (54,534) 285,992
NET ASSETS:
Beginning of Period 2,000,158 942,053 1,894,897 1,608,905
---------- ---------- ---------- ----------
End of Period $1,688,963 $2,000,158 $1,840,363 $1,894,897
========== ========== ========== ==========
TRANSACTIONS IN SHARES OF THE FUND:
Sold 1,160,024 3,030,732 1,586,471 3,223,480
Issued in Reinvestment of Dividends 49,967 75,780 30,431 56,751
Redeemed (1,521,186) (2,048,407) (1,671,436) (2,994,239)
---------- ---------- ---------- ----------
Net Increase (Decrease) in Shares of the Fund (311,195) 1,058,105 (54,534) 285,992
========== ========== ========== ==========
STRONG MUNICIPAL STRONG
ADVANTAGE FUND ADVANTAGE FUND
-------------------------------- ---------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
AUGUST 31, 1997 FEB. 28, 1997 AUGUST 31, 1997 FEB. 28, 1997
---------------- ------------- ---------------- -------------
(UNAUDITED) (UNAUDITED)
OPERATIONS:
Net Investment Income $ 16,909 $ 19,356 $ 51,682 $ 76,093
Net Realized Gain (Loss) (1,175) (1,624) (289) 4,004
Change in Unrealized Appreciation (Depreciation) 1,537 2,656 4,096 4,042
-------- -------- ---------- ----------
Increase in Net Assets Resulting from Operations 17,271 20,388 55,489 84,139
DISTRIBUTIONS:
From Net Investment Income (16,909) (19,356) (51,682) (75,751)
From Net Realized Gains -- (1) -- --
-------- -------- ---------- ----------
Total Distributions (16,909) (19,357) (51,682) (75,751)
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 585,824 863,029 1,043,843 1,362,671
Proceeds from Reinvestment of Dividends 13,959 15,060 44,934 65,491
Payment for Shares Redeemed (374,775) (367,350) (728,872) (916,636)
-------- -------- ---------- ----------
Increase in Net Assets from Capital Share Transactions 225,008 510,739 359,905 511,526
-------- -------- ---------- ----------
TOTAL INCREASE IN NET ASSETS 225,370 511,770 363,712 519,914
NET ASSETS:
Beginning of Period 644,263 132,493 1,519,694 999,780
-------- -------- ---------- ----------
End of Period $869,633 $644,263 $1,883,406 $1,519,694
======== ======== ========== ==========
TRANSACTIONS IN SHARES OF THE FUND:
Sold 117,053 172,620 103,544 135,808
Issued in Reinvestment of Dividends 2,789 3,010 4,458 6,528
Redeemed (74,915) (73,479) (72,320) (91,328)
------- ------- ------- -------
Net Increase in Shares of the Fund 44,927 102,151 35,682 51,008
======= ======= ======= =======
See notes to financial statements.
</TABLE>
34
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
August 31, 1997 (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.
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, when held by
the Funds, 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, 1997
were as follows:
AGGREGATE AGGREGATE PERCENT OF
COST FAIR VALUE NET ASSETS
--------- ---------- ----------
Strong Heritage Money Fund $559,419,773 $561,382,383 33.2%*
Strong Advantage Fund 415,927,432 415,769,408 22.1%**
*Of these securities which are restricted as to resale, 100% are
Section 4(2) commercial paper or are eligible for resale pursuant to
Rule 144A under the Securities Act of 1933 and also have been
determined to be liquid by the Advisor based upon guidelines
established by the Fund's Board of Directors.
**Of these securities which are restricted as to resale, 71.9% 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.
35
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
August 31, 1997 (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 Risks -- The Funds may utilize derivative
instruments including options, futures, foreign denominated assets,
and other instruments with similar characteristics to the extent that
they are consistent with the Fund's investment objectives and
limitations. The Funds intend to use such derivative instruments
primarily to hedge or protect from adverse movements in securities
prices or interest rates. The use of these instruments may involve
risks such as the possibility of illiquid markets or imperfect
correlation between the value of the instruments and the underlying
securities, or that the counterparty will fail to perform its
obligations.
(I) Use of Estimates -- The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements, and the
reported amounts of increases and decreases in net assets from
operations during the reporting period. Actual results could differ
from those estimates.
(J) Other -- Investment security transactions are recorded as of the trade
date. Dividend income and distributions to shareholders are recorded
on the ex-dividend date. Interest income is recorded on the accrual
basis and includes amortization of premium and discounts.
3. RELATED PARTY TRANSACTIONS
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.
Strong Municipal Advantage Fund and Strong Advantage Fund may invest cash
reserves in money market funds sponsored and managed by Strong Capital
Management, Inc., subject to certain limitations. The terms of such
transactions are identical to those of non-related entities except that, to
avoid duplicate investment advisory fees, the Advisor remits to each Fund
an amount equal to all fees otherwise due to them under their investment
advisory agreement for the assets invested in such money market funds.
Certain information regarding related party transactions for the six months
ended August 31, 1997, excluding the effect of waivers and absorptions, is
as follows:
<TABLE>
<CAPTION>
PAYABLE TO OTHER SHAREHOLDER UNAFFILIATED
ADVISOR AT SERVICING EXPENSES DIRECTORS'
AUGUST 31, 1997 PAID TO ADVISOR FEES
--------------- ------------------ ------------
<S> <C> <C> <C>
Strong Heritage Money Fund $158,774 $3,327 $12,269
Strong Municipal Money Market Fund 40,771 7,191 11,947
Strong Municipal Advantage Fund 57,464 1,579 4,584
Strong Advantage Fund 112,454 7,626 10,706
</TABLE>
36
<PAGE>
- --------------------------------------------------------------------------------
4. CAPITAL CONTRIBUTION
On January 31, 1997, the Advisor purchased a security from the Strong
Heritage Money Fund for $13,448,000 in excess of the security's fair value.
The Fund recorded a realized loss on the sale and a capital contribution of
an equal amount from the Advisor. The Advisor received no shares of Strong
Heritage Money Fund or other consideration in exchange for such
contribution. For tax purposes, these capital contributions reduced the
realized losses for the year ended February 28, 1997.
5. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of long-term securities for the six
months ended August 31, 1997 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
-------------------------------- -------------------------------
U.S. GOVERNMENT U.S. GOVERNMENT
AND AGENCY OTHER AND AGENCY OTHER
--------------- -------------- --------------- ------------
<S> <C> <C> <C> <C>
Strong Heritage Money Fund $ __ $ __ $ __ $ __
Strong Municipal Money Market Fund __ __ __ __
Strong Municipal Advantage Fund __ 212,984,380 __ 93,736,887
Strong Advantage Fund 116,372,738 1,284,018,232 55,256,519 927,234,250
</TABLE>
6. INCOME TAX INFORMATION
The investment cost, gross unrealized appreciation and depreciation on
investments and capital loss carryovers (expiring in varying amounts
through 2005) for federal income tax purposes were as follows:
<TABLE>
<CAPTION>
AT AUGUST 31, 1997 AT FEBRUARY 28, 1997
------------------------------------------------------------------- --------------------
FEDERAL TAX UNREALIZED UNREALIZED NET NET CAPITAL LOSS
COST APPRECIATION DEPRECIATION APPRECIATION CARRYOVERS
-------------- ------------- ------------ ------------ ----------------
<S> <C> <C> <C> <C> <C>
Strong Heritage Money Fund $1,691,016,199 $ __ $ __ $ __ $ __
Strong Municipal Money Market Fund 1,848,120,379 __ __ __ __
Strong Municipal Advantage Fund 863,156,625 4,130,874 (99,715) 4,031,159 1,611,490
Strong Advantage Fund 1,895,840,086 16,858,694 (4,761,662) 12,097,032 2,408,327
</TABLE>
37
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------------------------------------------
STRONG HERITAGE MONEY FUND
- --------------------------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA (a)
--------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
----------------------------------------------- ------------------------
<CAPTION>
Net Asset Net Realized Total Net Asset
Value, Net Losses from From Net Capital Value,
Beginning Investment on Investment Investment Total Contribution End of
of Period Income Investments Operations Income Distributions (Note 4) Period
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aug. 31, 1997 (b) $1.00 $0.03 __ $0.03 ($0.03) ($0.03) __ $1.00
Feb. 28, 1997 1.00 0.06 ($0.01) 0.05 (0.06) (0.06) $0.01 1.00
Feb. 29, 1996 (c) 1.00 0.04 __ 0.04 (0.04) (0.04) __ 1.00
</TABLE>
<TABLE>
STRONG HERITAGE MONEY FUND (Continued)
- --------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
-------------------------------------------------------------------
<CAPTION>
Net Ratio of Expenses Ratio of Net
Assets, Ratio of to Average Net Investment
End of Expenses Assets Without Income
Total Period (In to Average Waivers and to Average
Return Millions) Net Assets Absorptions Net Assets
<S> <C> <C> <C> <C> <C>
Aug. 31, 1997 (b) +2.8% $1,689 0.2%* 0.6%* 5.4%*
Feb. 28, 1997 +5.7%(d) 2,000 0.1% 0.6% 5.6%
Feb. 29, 1996 (c) +4.1% 942 0.0%* 0.6%* 5.9%*
</TABLE>
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund
outstanding for the entire period.
(b) For the six months ended August 31, 1997 (Unaudited). Total return is not
annualized.
(c) For the period from June 29, 1995 (inception) to February 29, 1996. Total
return is not annualized.
(d) Had the Advisor not made the capital contribution as described in the notes
to the financial statements, the adjusted total return would have been 5.0%
for the fiscal year ended February 28, 1997.
<TABLE>
STRONG MUNICIPAL MONEY MARKET FUND
- ------------------------------------------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA (a)
- ---------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS (d) RATIOS AND SUPPLEMENTAL DATA
---------------------------------- ------------------------ -------------------------------------------
<CAPTION>
Net Ratio of Net
Net Asset Total Net Asset Assets, Ratio of Investment
Value, Net from From Net Value, End of Expenses Income
Beginning Investment Investment Investment Total End of Total Period (In to Average to Average
of Period Income Operations Income Distributions Period Return Millions) Net Assets Net Assets
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Aug. 31, 1997 (b) $1.00 $0.02 $0.02 ($0.02) ($0.02) $1.00 +1.8% $1,840 0.6%* 3.5%*
Feb. 28, 1997 1.00 0.03 0.03 (0.03) (0.03) 1.00 +3.5% 1,895 0.6% 3.5%
Feb. 29, 1996 (c) 1.00 0.01 0.01 (0.01) (0.01) 1.00 +0.6% 1,609 0.6%* 3.6%*
Dec. 31, 1995 1.00 0.04 0.04 (0.04) (0.04) 1.00 +4.1% 1,416 0.6% 4.0%
Dec. 31, 1994 1.00 0.03 0.03 (0.03) (0.03) 1.00 +2.9% 1,261 0.6% 2.9%
Dec. 31, 1993 1.00 0.02 0.02 (0.02) (0.02) 1.00 +2.5% 1,173 0.7% 2.5%
Dec. 31, 1992 1.00 0.03 0.03 (0.03) (0.03) 1.00 +3.4% 1,105 0.7% 3.3%
</TABLE>
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund
outstanding for the entire period.
(b) For the six months ended August 31, 1997 (Unaudited). 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.
<TABLE>
STRONG MUNICIPAL ADVANTAGE FUND
- -------------------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA(a)
- -------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
-------------------------------------------------- -------------------------
<CAPTION>
Net Asset Net Realized Total Net Asset
Value, Net and Unrealized from From Net Value,
Beginning Investment Gains on Investment Investment Total End of
of Period Income Investments Operations Income Distributions Period
<S> <C> <C> <C> <C> <C> <C> <C>
Aug. 31, 1997(b) $5.01 $0.12 __ $0.12 ($0.12) ($0.12) $5.01
Feb. 28, 1997 5.01 0.25 __ 0.25 (0.25) (0.25) 5.01
Feb. 29, 1996(c) 5.00 0.06 $0.01 0.07 (0.06) (0.06) 5.01
</TABLE>
<TABLE>
STRONG MUNICIPAL ADVANTAGE FUND (Continued)
- ----------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
--------------------------------------------------------------------------
<CAPTION>
Net Ratio of Expenses Ratio of Net
Assets, Ratio of to Average Net Investment
End of Expenses Assets Without Income Portfolio
Total Period (In to Average Waivers and to Average Turnover
Return Millions Net Assets Absorptions Net Assets Rate
<S> <C> <C> <C> <C> <C> <C>
Aug. 31, 1997(b) +2.3% $870 0.4%* 0.7%* 4.6%* 26.2%
Feb. 28, 1997 +5.1% 644 0.0% 0.7% 5.0% 40.8%
Feb. 29, 1996(c) +1.4% 132 0.0%* 0.7%* 4.9%* 17.1%
</TABLE>
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund
outstanding for the entire period.
(b) For the six months ended August 31, 1997 (Unaudited). Total return and
portfolio turnover rate are not annualized.
(c) For the period from November 30, 1995 (inception) to February 29, 1996.
Total return and portfolio turnover rate are not annualized.
38
<PAGE>
<TABLE>
STRONG ADVANTAGE FUND
- --------------------------------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA(a)
---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
------------------------------------------------- --------------------------------------
<CAPTION>
Net Realized
Net Asset and Unrealized Total In Excess Net Asset
Value, Net Gains from From Net of Net Value,
Beginning Investment (Losses)on Investment Investment Realized Total End of
of Period Income Investments Operations Income Gains Distributions Period
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aug. 31, 1997(b) $10.09 $0.31 $0.02 $0.33 ($0.31) __ ($0.31) $10.11
Feb. 28, 1997 10.03 0.62 0.06 0.68 (0.62) __ (0.62) 10.09
Feb. 29, 1996(c) 10.04 0.10 (0.01) 0.09 (0.10) __ (0.10) 10.03
Dec. 31, 1995 9.98 0.67 0.06 0.73 (0.67) __ (0.67) 10.04
Dec. 31, 1994 10.19 0.55 (0.19) 0.36 (0.55) ($0.02) (0.57) 9.98
Dec. 31, 1993 10.01 0.59 0.18 0.77 (0.59) __ (0.59) 10.19
Dec. 31, 1992 9.90 0.70 0.11 0.81 (0.70) __ (0.70) 10.01
</TABLE>
STRONG ADVANTAGE FUND (Continued)
- --------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
-------------------------------------------------------------
Net Ratio of Net
Assets, Ratio of Investment
End of Expenses Income Portfolio
Total Period (In to Average to Average Turnover
Return Millions) Net Assets Net Assets Rate
Aug. 31, 1997(b) +3.3% $1,883 0.8%* 6.1%* 59.9%
Feb. 28, 1997 +7.0% 1,520 0.8% 6.2% 154.9%
Feb. 29, 1996(c) +0.9% 1,000 0.8%* 6.3%* 17.2%
Dec. 31, 1995 +7.5% 990 0.8% 6.6% 183.7%
Dec. 31, 1994 +3.6% 911 0.8% 5.6% 221.0%
Dec. 31, 1993 +7.9% 415 0.9% 5.8% 304.8%
Dec. 31, 1992 +8.4% 272 1.0% 7.0% 316.1%
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund
outstanding for the entire period.
(b) For the six months ended August 31, 1997 (Unaudited). 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.
39
<PAGE>
NOTES
- --------------------------------------------------------------------------------
40
<PAGE>
DIRECTORS
Richard S. Strong
Willie D. Davis
Stanley Kritzik
Marvin E. Nevins
William F. Vogt
OFFICERS
Richard S. Strong, Chairman of the Board
Lawrence A. Totsky, Vice President
Thomas P. Lemke, Vice President
John S. Weitzer, Vice President
Stephen J. Shenkenberg, Vice President and Secretary
John A. Flanagan, Treasurer
INVESTMENT ADVISOR
Strong Capital Management, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
CUSTODIAN
Firstar Trust Company
P.O. Box 701, Milwaukee, Wisconsin 53201
AUDITOR
Coopers & Lybrand L.L.P.
411 East Wisconsin Avenue, Milwaukee, Wisconsin 53202
LEGAL COUNSEL
Godfrey & Kahn, S.C.
780 North Water Street, Milwaukee, Wisconsin 53202
<PAGE>
For a prospectus containing more complete information, including management fees
and expenses, please call 1-800-368-1030. Please read it carefully before
investing or sending money. This report does not constitute an offer for the
sale of securities. Strong Funds are offered for sale by prospectus only.
[PICTURE OF TELEPHONE]
To order a free prospectus kit,
CALL 1-800-368-1030.
To learn more about our funds,
discuss an existing account,
or conduct a transaction,
CALL 1-800-368-3863.
--------------------
If you are a
Financial Professional,
CALL 1-800-368-1683
[PICTURE OF STRONG WEB SITE ON COMPUTER]
Strong On-line
www.strong-funds.com
[STRONG LOGO]
STRONG FUNDS
P.O. Box 2936 o Milwaukee, Wisconsin 53201
Strong Funds Distributors, Inc. 6032H97 97SCSH
