[PIE CHART WITH BONDS EMPHASIS]
FUND PROFILE
July 15, 1998
THE STRONG HIGH-YIELD MUNICIPAL BOND FUND
THE STRONG MUNICIPAL BOND FUND
THE STRONG SHORT-TERM HIGH YIELD MUNICIPAL FUND
THE STRONG SHORT-TERM MUNICIPAL BOND FUND
This profile summarizes key information about the Funds that is included in the
Funds' prospectus. The Funds' prospectus includes additional information about
the Funds, including a more detailed description of the risks associated with
investing in the Funds that you may want to consider before you invest. You may
obtain the prospectus and other information about the Funds at no cost by
calling 1-800-368-3863 or visiting our web site at www.strong-funds.com.
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STRONG FUNDS
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WHAT ARE THE FUNDS' GOALS?
The STRONG HIGH-YIELD MUNICIPAL BOND FUND seeks total return by investing for a
high level of federally tax-exempt current income.
The STRONG MUNICIPAL BOND FUND and the STRONG SHORT-TERM HIGH YIELD MUNICIPAL
FUND seek total return by investing for a high level of federally tax-exempt
current income with a moderate degree of share-price fluctuation.
The STRONG SHORT-TERM MUNICIPAL BOND FUND seeks total return by investing for a
high level of federally tax-exempt current income with a low degree of
share-price fluctuation.
WHAT ARE THE FUNDS' INVESTMENT STRATEGIES?
The HIGH-YIELD MUNICIPAL BOND FUND invests primarily in long-term, medium- and
lower-quality municipal bonds. The Fund's manager emphasizes bonds whose credit
quality may be improving, and sectors that complement current investment
themes. She also takes the overall interest rate environment into
consideration. The Fund typically maintains an average maturity between 15 and
25 years.
The MUNICIPAL BOND FUND invests primarily in long-term, higher-quality
municipal bonds. The Fund's manager conducts intensive research on individual
issuers to uncover solid investment opportunities, especially in improving
credits. The Fund typically maintains an average maturity between 10 and 20
years.
The SHORT-TERM HIGH YIELD MUNICIPAL FUND follows a similar investment style to
the HIGH-YIELD MUNICIPAL BOND FUND, but invests primarily in short- and
intermediate-term, medium- and lower-quality municipal bonds. To help manage
risk, the Fund maintains an average maturity between one and three years.
The SHORT-TERM MUNICIPAL BOND FUND invests primarily in short- and
intermediate-term, higher-quality municipal bonds, following the style of the
MUNICIPAL BOND FUND. The Fund maintains an average maturity of three years or
less.
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For all of the Funds, the managers may sell a holding if its fundamental
qualities deteriorate, or to take advantage of more attractive yield
opportunities.
Additional information about the Funds' investments is available in the Funds'
annual and semiannual reports to shareholders. These reports discuss the market
conditions and investment strategies that significantly affected the Funds'
performance during the past fiscal year. You may obtain these reports at no
cost by calling 1-800-368-3863.
WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUNDS?
BOND RISKS: The Funds' major risks are those of investing in the bond market.
The value of an investment in these Funds can be affected by movements in
interest rates, economic developments, or changes in the credit ratings of the
companies or government authorities that issue bonds. Because bond values
fluctuate, when you sell your investment you may receive more or less money
than you originally invested.
HIGH-YIELD BONDS: The HIGH-YIELD MUNICIPAL BOND and SHORT-TERM HIGH YIELD
MUNICIPAL FUNDS principally invest in medium- and lower-quality, high-yield
securities. These non-investment-grade bonds involve greater risks, including
the possibility that the issuer of the bond may not be able to make its
payments of interest and principal.
CONCENTRATED PORTFOLIO: The Funds may concentrate their assets in the bonds of
issuers in the same state. They may also concentrate their assets in bonds that
are related in such a way that an economic, business or political development
or change affecting one security could affect the other securities. For both
reasons, the Funds' shares are likely to fluctuate more than those of a fund
investing in a broader range of securities.
These Funds are appropriate for investors whose financial goals are at least
several years away, and who are comfortable with the risks described here. They
are not appropriate for investors concerned primarily with principal stability.
Continued..
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MAIN RISKS OF INVESTING IN THE FUNDS, CONTINUED..
The return information provided illustrates how the Funds' performance can
vary, which is one indication of the risks of investing in the Funds. Please
keep in mind that the Funds' past performance does not represent how they will
perform in the future. Only Funds with at least one calendar year's performance
appear below.
CALENDER YEAR TOTAL RETURNS
[BAR GRAPH]
Year High-Yield Municipal Short-Term
Municipal Bond Municipal
Bond Fund Fund Bond Fund
- ---------------------------------------------
1988 - 7.6% -
- ---------------------------------------------
1989 - 7.1% -
- ---------------------------------------------
1990 - 4.6% -
- ---------------------------------------------
1991 - 13.4% -
- ---------------------------------------------
1992 - 12.2% 7.2%
- ---------------------------------------------
1993 - 11.8% 6.8%
- ---------------------------------------------
1994 -1.0% -4.5% -1.6%
- ---------------------------------------------
1995 14.6% 11.4% 5.4%
- ---------------------------------------------
1996 5.1% 2.4% 4.9%
- ---------------------------------------------
1997 13.9% 12.1% 6.9%
FOR THE FIRST QUARTER OF 1998, THE FUNDS' RETURNS WERE: HIGH-YIELD MUNICIPAL
BOND, 1.5%; MUNICIPAL BOND, 1.5%; AND SHORT-TERM MUNICIPAL BOND, 1.2%.
BEST AND WORST QUARTERLY PERFORMANCE
FUND NAME BEST QUARTER RETURN WORST QUARTER RETURN
- -------------------------- ----------------------- -----------------------
High-Yield Municipal Bond 4.7% (1st Q 1995) -2.9% (1st Q 1996)
- -------------------------- ----------------------- -----------------------
Municipal Bond 5.8% (2nd Q 1992) -5.1% (1st Q 1994)
- -------------------------- ----------------------- -----------------------
Short-Term Municipal Bond 2.4% (3rd Q 1995) -1.8% (1st Q 1994)
- -------------------------- ----------------------- -----------------------
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AVERAGE ANNUAL TOTAL RETURNS
As of 3-31-98
FUND/INDEX 1-YEAR 5-YEAR 10-YEAR
- --------------------------------------------------------
High-Yield Municipal 14.47% - -
Bond
- --------------------------------------------------------
HIGH-YIELD MUNICIPAL 12.40% - -
BOND INDEX
- --------------------------------------------------------
Municipal Bond 13.81% 5.93% 7.56%
- --------------------------------------------------------
LEHMAN BROS. 10.72% 6.82% 8.34%
MUNICIPAL BOND INDEX
- --------------------------------------------------------
Short-Term Municipal 7.36% 4.30%
Bond
- --------------------------------------------------------
LEHMAN BROS. 6.14% 4.90%
MUNICIPAL 3 YEAR
BOND INDEX
- --------------------------------------------------------
THE HIGH-YIELD MUNICIPAL BOND INDEX IS COMPRISED OF TWO UNMANAGED INDICES
GENERALLY REPRESENTATIVE OF HIGH-YIELD, TAX-EXEMPT BONDS (THE LEHMAN BROTHERS
BAA MUNICIPAL BOND INDEX FROM INCEPTION THROUGH 12/31/95 AND THE LEHMAN
BROTHERS HIGH-YIELD MUNICIPAL BOND INDEX FROM 1/1/96 TO PRESENT). THE LEHMAN
BROTHERS MUNICIPAL BOND INDEX IS AN UNMANAGED INDEX GENERALLY REPRESENTATIVE OF
INVESTMENT-GRADE, TAX-EXEMPT BONDS. THE LEHMAN BROTHERS MUNICIPAL 3 YEAR BOND
INDEX IS AN UNMANAGED INDEX GENERALLY REPRESENTATIVE OF THREE-YEAR, TAX-EXEMPT
BONDS.
As of March 31, 1998, the 30-day yields for the Funds were as follows:
HIGH-YIELD MUNICIPAL BOND, 5.4%; MUNICIPAL BOND, 4.7%; SHORT-TERM HIGH YIELD
MUNICIPAL, 5.1%; and SHORT-TERM MUNICIPAL BOND, 4.3%. For investors in the 36%
tax bracket, these translate into taxable equivalent yields of 8.4%, 7.4%,
8.0%, and 6.7%, respectively. Without fee waivers and absorptions, the
SHORT-TERM HIGH YIELD MUNICIPAL FUND'S yields would have been 4.4% and 6.9%,
respectively. For current yield information on these Funds, call
1-800-368-3863.
WHAT ARE THE FUNDS' FEES AND EXPENSES?
This section describes the fees and expenses that you may pay if you buy and
hold shares of the Funds.
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
The Funds are 100% no-load, so you pay no fees to buy or sell shares. There
also are no 12b-1 marketing fees.
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
You do pay the costs of operating each Fund, which are deducted from Fund
assets. These costs are deducted before computing the daily share price or
making distributions. As a result, they don't appear on your account statement,
but instead reduce the amount of total return you receive. Because the
SHORT-TERM
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HIGH YIELD MUNICIPAL FUND did not begin operations until November
30, 1997, the expenses other than management fees have been estimated in the
chart below.
ANNUAL FUND OPERATING EXPENSES (AS A PERCENT OF AVERAGE NET ASSETS)
FUND MANAGEMENT FEES OTHER EXPENSES TOTAL EXPENSES
- ---------------- --------------- --------------- ---------------
High-Yield 0.60% 0.15% 0.75%
Municipal Bond
- ---------------- --------------- --------------- ---------------
Municipal Bond 0.60% 0.21% 0.81%
- ---------------- --------------- --------------- ---------------
Short-Term High 0.60% 0.49% 1.09%
Yield Municipal
- ---------------- --------------- --------------- ---------------
Short-Term 0.50% 0.16% 0.66%
Municipal Bond
- ---------------- --------------- --------------- ---------------
EXAMPLE: This example is intended to help you compare the cost of investing in
the Funds with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the Funds for the time periods indicated, and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year and that the Funds' operating
expenses remain the same. Although your actual costs may be higher or lower,
based on these assumptions your costs would be:
FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------- --------- --------- --------- ---------
High-Yield $77 $240 $417 $930
Municipal Bond
- --------------- --------- --------- --------- ---------
Municipal Bond $83 $259 $450 $1,002
- --------------- --------- --------- --------- ---------
Short-Term $111 $347 $601 $1,329
High Yield
Municipal
- --------------- --------- --------- --------- ---------
Short-Term $67 $211 $368 $822
Municipal Bond
- --------------- --------- --------- --------- ---------
WHO ARE THE FUNDS' INVESTMENT ADVISOR AND PORTFOLIO MANAGERS?
Strong Capital Management serves as the investment advisor for the Funds.
Mary-Kay Bourbulas manages the HIGH-YIELD MUNICIPAL BOND FUND and the
SHORT-TERM HIGH YIELD MUNICIPAL FUND. She joined Strong as a portfolio manager
in October 1991, and has nine years of investment experience.
Steven Harrop manages the MUNICIPAL BOND FUND and the SHORT-TERM MUNICIPAL BOND
FUND. He joined Strong as a portfolio manager in March 1991, and has more than
25 years of investment experience.
HOW CAN I BUY FUND SHARES?
There are several ways you can open a new account.
- - BY MAIL: Complete and sign the application. Make your check or money order
payable to Strong Funds. Mail it to Strong Funds, P.O. Box 2936, Milwaukee,
WI 53201.
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- - BY PHONE OR BY INTERNET: If you are a current Strong Funds shareholder and
choose exchange privileges, you can exchange shares from one Strong account
to open another.
You can also open an account in person or through a broker-dealer.
The minimum initial investment is $2,500 for a regular account and $250 for a
transfer or gift to minor account. If you establish an Automatic Investment
Plan of $50 or more per month, these minimums are waived. In all cases, the
minimum for subsequent investments is $50.
HOW CAN I SELL FUND SHARES?
There are several ways you can redeem (sell) shares from the Fund.
- - BY MAIL: You can write a letter of instruction, including your account
number, the dollar amount or number of shares you wish to redeem, each
owner's name, your street address, and the signature of each owner. Mail it
to Strong Funds, P.O. Box 2936, Milwaukee, WI 53201.
- - BY PHONE OR BY INTERNET: If you choose redemption privileges, you can sell
shares by phone or through our web site.
You can also redeem shares in person, through a systematic withdrawal plan or
through a broker-dealer.
DO THE FUNDS PAY OUT DIVIDENDS OR CAPITAL GAINS? HOW ARE THEY TAXED?
The Funds may pay income from interest on the bonds in their portfolios, and
may realize capital gains from appreciation on those holdings. The Funds
declare income each business day and distribute it monthly, and declare and
distribute capital gains annually.
Unless you elect otherwise, distributions of income and capital gains will be
automatically reinvested in the Fund that paid them.
The income from the Funds is generally exempt from federal income taxes, but
may be subject to state tax. In addition, investors who are subject to the
Alternative Minimum Tax (AMT) may have to pay tax on a portion of their
CONTINUED ON BACK..
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income from these Funds. Capital-gains distributions are taxed at rates based
on how long the assets were held by the Fund. After the end of each calendar
year, Strong sends shareholders a statement of the Funds' income and capital
gains distributions to assist in tax preparation.
WHAT SERVICES DOES STRONG FUNDS PROVIDE?
Strong offers you a variety of ways to get information, monitor your
investments, and buy and sell shares.
- - Personal service 24 hours a day, 7 days a week
- - Automated telephone service
- - Online transaction services
- - Automatic Investment Plans
- - Payroll direct deposit
- - Automatic exchange services
- - Systematic withdrawal plans
- - Fund recommendation service
Strong representatives can tell you more about each of these services, and can
also give you further information about buying and selling shares. Just call
1-800-368-3863 anytime, day or night.
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[STRONG LOGO]
STRONG FUNDS
P.O. Box 2936 Milwaukee, Wisconsin 53201
Strong Funds Distributors, Inc. 7900E98 MU798P