<PAGE>
[PHOTO]
THE STRONG
MUNICIPAL INCOME
FUNDS
- --------------------------------------------------------------------------------
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
SEMI-ANNUAL REPORT - FEBRUARY 29, 2000
<PAGE>
THE STRONG
MUNICIPAL INCOME
FUNDS
-------------------
SEMI-ANNUAL REPORT - FEBRUARY 29, 2000
TABLE OF CONTENTS
<TABLE>
<S> <C>
INVESTMENT REVIEWS
The Strong High-Yield Municipal Bond Fund.............................2
The Strong Municipal Bond Fund........................................4
The Strong Short-Term High Yield Municipal Fund.......................6
The Strong Short-Term Municipal Bond Fund.............................8
BOND GLOSSARY.............................................................10
FINANCIAL INFORMATION
Schedules of Investments in Securities
The Strong High-Yield Municipal Bond Fund.......................11
The Strong Municipal Bond Fund..................................14
The Strong Short-Term High Yield Municipal Fund.................17
The Strong Short-Term Municipal Bond Fund.......................21
Statements of Assets and Liabilities.................................25
Statements of Operations.............................................26
Statements of Changes in Net Assets..................................27
Notes to Financial Statements........................................29
FINANCIAL HIGHLIGHTS......................................................32
</TABLE>
<PAGE>
THE STRONG HIGH-YIELD MUNICIPAL BOND FUND
-----------------------------------------
PERSPECTIVES
FROM THE MANAGER
/s/ Mary-Kay H. Bourbulas
Mary-Kay H. Bourbulas
Portfolio Manager
- -------------------------------------------------------------------------------
The lack of liquidity in the municipal market has made trading difficult,
particularly at the end of 1999 when illiquidity virtually seized the market.
Lower-rated and non-rated securities have been hurt the most. With mutual funds
posting outflows, the best bids came from the retail market, so we have
concentrated our selling efforts in this market. Although the retail market is
fragmented and, as a result, transactions in it are somewhat small in scale,
selling in these small proportions has helped us rebuild the Fund's cash
holdings after the massive outflows experienced at the end of 1999.
We have continued to hold duration close to its benchmark; the figure currently
stands at 9.2 years. Overall, the Fund's average credit quality remains stable
at BB.
We continue to believe that the widening yield spreads (reflecting declining
prices) in the healthcare sector are overdone--and represent value. Despite the
turmoil in this sector and its impact on our performance, the credit quality in
the issues we held remained steady. The healthcare sector has gone through ups
and downs before, and we are confident that the current difficulties represent a
storm that will pass. With new-issue volume down, we continue to build cash
levels in anticipation of a pick-up in volume later in the year.
Looking forward, we anticipate that the relative performance of municipals
should improve in
- -------------------------------------------------------------------------------
LOOKING FORWARD, WE ANTICIPATE THAT THE RELATIVE PERFORMANCE OF MUNICIPALS
SHOULD IMPROVE IN 2000.
- -------------------------------------------------------------------------------
[SIDENOTE]
FUND
HIGHLIGHTS
- - The Fund returned -5.99% for the six months ended February 29, 2000, while
the High-Yield Municipal Bond Index returned -2.87%. The Fund's 30-day
annualized yield was 6.72%. For investors in the 36% tax bracket, that
translates into a 10.50% taxable equivalent yield.
- - Municipal funds experienced significant cash outflows, driven by tax-loss
selling and Y2K uncertainty. We anticipated redemptions, but the selling
pressure was massive, reaching levels last seen in 1995.
- - Bids on municipal bonds were not indicative of a bond's worth--rather, bids
on muni bonds were whatever the cash buyer was willing to offer. To meet
liquidity needs, we first sold long, lower-coupon securities, which allowed
the duration of the Fund to remain fairly stable.
- -------------------------------------------------------------------------------
[SIDENOTE]
AVERAGE ANNUAL
TOTAL RETURNS(1)
AS OF 2-29-00
1-year -7.93%
3-year 2.95%
5-year 5.33%
Since Inception 4.89%
(10-1-93)
- -------------------------------------------------------------------------------
[SIDENOTE]
PORTFOLIO
STATISTICS
AS OF 2-29-00
30-day annualized yield(2) 6.72%
Average maturity(3) 16.5 years
Average quality rating(4) BB
- -------------------------------------------------------------------------------
From time to time, the Fund's advisor has waived its management fee and/or
absorbed Fund expenses, which has resulted in higher returns.
(1) Average annual total return and total return measure change in the value of
an investment in the Fund, assuming reinvestment of all dividends and
capital gains. Average annual total return reflects annualized change while
total return reflects aggregate change and is not annualized.
(2) Yield is annualized for the 30 days ended 2-29-00, is historical, and will
vary.
(3) The Fund's average maturity includes the effect of futures.
(4) For purposes of this average rating, the Fund's short-term debt obligations
have been assigned long-term ratings by the Advisor.
2
<PAGE>
2000. It's our belief that most of the damage of higher ratios (versus taxable
bonds) and duration extension have already been absorbed in 1999. The Federal
Reserve has indicated it will raise rates in the future to stay ahead of
inflation. In light of this, we reduced the Fund's exposure to lower-coupon
securities, which typically are most affected by rate hikes.
On the positive side, state and local governments are in perhaps the best
financial shape ever, and bond market efficiencies are improving. As we
mentioned earlier, lower new-issue volume is another cause for optimism; for the
first two months of 2000, new-issue supply was down 40% over the previous year's
level. Other positives at play in the market include munis' high yields relative
to those of taxable securities and increased yields in lower-rated debt. It
appears the worst is over in the municipal market and that 2000 may offer a
better investment climate for municipal buyers.
We appreciate your continued trust in the Strong High-Yield Municipal Bond Fund.
We look forward to working with you to pursue your important financial goals as
the events of the year continue to unfold.
GROWTH OF AN ASSUMED $10,000 INVESTMENT
FROM 10-1-93 TO 2-29-00
[GRAPH]
<TABLE>
<CAPTION>
Strong HY Muni HY Muni Lipper HY Muni
Bond Fund (N) Bond Index Debt Fund
<S> <C> <C> <C>
Sep 93 10000 10000 10000
Dec 93 10266.39 10164.39 10141.30
Dec 94 10165.05 9608.50 9636.81
Dec 95 11650.85 11361.62 11245.45
Dec 96 12247.84 11867.21 11674.19
Dec 97 13949.37 13164.76 12815.73
Dec 98 14684.76 13982.20 13528.53
Dec 99 13879.00 13730.13 13034.72
Feb 00 13583.86 13697.83 13002.14
</TABLE>
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 High-Yield Municipal Bond Index and the Lipper High Yield Municipal Debt
Funds Index. Results include the reinvestment of all dividends and capital
gain 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.
- -------------------------------------------------------------------------------
[SIDENOTE]
YOUR FUND'S
APPROACH
THE STRONG HIGH-YIELD MUNICIPAL BOND FUND SEEKS TOTAL RETURN BY INVESTING
FOR A HIGH LEVEL OF FEDERALLY TAX-EXEMPT CURRENT INCOME. THE 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 ISSUERS THAT
COMPLEMENT CURRENT INVESTMENT THEMES, SUCH AS THE "AGING OF AMERICA." THE
MANAGER ALSO TAKES THE OVERALL INTEREST RATE ENVIRONMENT INTO CONSIDERATION. THE
FUND TYPICALLY MAINTAINS AN AVERAGE MATURITY BETWEEN 15 AND 25 YEARS.
- -------------------------------------------------------------------------------
[SIDENOTE]
MARKET
HIGHLIGHTS
- - Yields on healthcare and healthcare-related securities continued to rise as
reimbursement cuts translated into lower bottom-line operating results. The
significant lack of liquidity in this sector saw BBB-rated hospital bonds
offered at an 8% tax-free yield.
- - The rise in rates and lack of liquidity were also prompted by the Federal
Reserve's efforts to stay ahead of inflation. The Fed raised short-term
interest rates twice over the past six months.
- - On a historical basis, long-term municipals continue to trade at attractive
levels versus taxable alternatives. The strong equity market has, however,
diminished investor interest in municipal securities.
- - Municipal funds experienced net outflows of almost $7 billion over the past
six months. The selling pressure accelerated toward the end of 1999, as
tax-conscious investors looked to book municipal losses to offset stock
gains.
- -------------------------------------------------------------------------------
* The High-Yield Municipal Bond Index is comprised of the Lehman Brothers Baa
Municipal Bond Index from inception through December 31, 1995, and the
Lehman Brothers High-Yield Municipal Bond Index from January 1, 1996, to
present. The Lehman Brothers Baa Municipal Bond Index is an unmanaged index
generally representative of municipal bonds rated Baa. The Lehman Brothers
High-Yield Municipal Bond Index, which was instituted on January 1, 1996, is
an unmanaged index generally representative of municipal bonds rated below
Baa. The Lipper High Yield Municipal Debt Funds Index is an equally-weighted
performance index of the largest qualifying funds in this Lipper category.
Source of the High-Yield Index data is Lehman Brothers. Source of the Lipper
index data is Lipper Inc.
3
<PAGE>
THE STRONG MUNICIPAL BOND FUND
-------------------------
PERSPECTIVES
FROM THE MANAGER
/s/ Steven D. Harrop
Steven D. Harrop
Portfolio Manager
- -------------------------------------------------------------------------------
1999 was among the worst bear markets for fixed-income securities in history.
The second half of the year was tougher than the first, and the troubles have
continued into early 2000--meaning that the past six months have presented this
Fund with a particularly difficult environment in which to operate.
To be perfectly honest, we had anticipated something quite different. In a year
with continued low inflation, a sizeable federal budget surplus, and positive
sentiment encouraged by a healthy economy, we and many other observers believed
signs pointed to a bond rally. We had therefore positioned the Fund
aggressively. When the rally we anticipated became instead the bear market few
could have predicted, this Fund's performance lagged.
Magnifying the Fund's difficulties is the fact that municipal issues, which
investors traditionally treated as safe investments, represented the
worst-performing sector of the fixed-income market. This is despite the fact
that the strong economy has strengthened many municipal credits, with upgrades
outnumbering downgrades seven to one.
After such a serious bruising, it's a natural instinct to change course.
However, we believe strongly that to change our approach now would be the wrong
course to take, locking in our losses while cutting the Fund off from the very
investments that have the power to help it recover.
- -------------------------------------------------------------------------------
THE TURMOIL [IN THE MARKET] HAS LEFT BEHIND REMARKABLE VALUE IN THE MUNICIPAL
SECTOR, WITH MANY BEATEN-UP BONDS NOW EXHIBITING POTENTIAL FOR SIGNIFICANT
PRICE APPRECIATION.
- -------------------------------------------------------------------------------
[SIDENOTE]
FUND
HIGHLIGHTS
- - For the six months ended February 29, 2000, the Fund returned -5.20%, while
the Lehman Brothers Municipal Bond Index returned -0.02%. The Fund's 30-day
annualized yield was 5.91%. For investors in the 36% tax bracket, that
translates into a taxable equivalent yield of 9.23%.
- - The Fund's average maturity is 19.1 years--toward the longer end of its
range. The Fund has maintained an average credit quality of A. Issues rated
AAA and AA account for about 36% of assets.
- - Securities subject to the Alternative Minimum Tax comprise approximately 28%
of assets.
- -------------------------------------------------------------------------------
[SIDENOTE]
AVERAGE ANNUAL
TOTAL RETURNS(1)
AS OF 2-29-00
1-year -8.36%
3-year 2.98%
5-year 3.76%
10-year 6.00%
Since Inception 5.53%
(10-23-86)
- -------------------------------------------------------------------------------
[SIDENOTE]
PORTFOLIO STATISTICS
AS OF 2-29-00
30-day annualized yield(2) 5.91%
Average maturity(3) 19.1 years
Average quality rating(4) A
- -------------------------------------------------------------------------------
From time to time, the Fund's advisor has waived its management fee and/or
absorbed Fund expenses, which has resulted in higher returns.
(1) Average annual total return and total return measure change in the value of
an investment in the Fund, assuming reinvestment of all dividends and
capital gains. Average annual total return reflects annualized change, while
total return reflects aggregate change, and is not annualized.
(2) Yield is annualized for the 30 days ended 2-29-00, is historical, and will
vary.
(3) The Fund's average maturity includes the effect of when-issued securities.
4
<PAGE>
The turmoil has left behind remarkable value in the municipal sector, with many
beaten-up bonds now exhibiting potential for significant price appreciation. In
the meantime, they are selling at tax-free yields that rival, and even outstrip,
the taxable yields comparable-maturity Treasuries pay. The Bond Buyer 40
Municipal Index yield as of February 29 stood at 6.38%, while the yield on the
30-year Treasury was 6.14%. Only once have we seen this skewed relationship
between muni and taxable yields--and that was this past autumn.
The bear market has largely been driven by the Fed's efforts to slow the rapid
pace of economic growth. And so far, the market has focused only on the rising
interest rates, neglecting to consider what might happen should the Fed attain
its goals. It's our belief that the bond market would rally, and probably do so
before the actual impact of the slowdown would be felt. In such a scenario, this
sector of the fixed-income market would be poised to do particularly well, given
the sharp yield disparity against Treasuries.
We appreciate your investment and continued confidence in the Strong Municipal
Bond Fund in these challenging months.
GROWTH OF AN ASSUMED $10,000 INVESTMENT
FROM 10-23-86 TO 2-29-00
[GRAPH]
<TABLE>
<CAPTION>
Municipal Bond LB Muni Bond/ Lip GenMunDebt/
Fund (N) Muni Bd (P) Funds (P)
<S> <C> <C> <C>
Sep 86 10000 10000 10000
Dec 86 10129.08 10216.09 10252.63
Dec 88 10705.10 11423.56 11370.02
Dec 90 11995.31 13578.25 13252.50
Dec 92 15256.57 16569.20 16170.13
Dec 94 16275.43 17642.91 17082.99
Dec 96 18569.80 21640.17 20757.37
Dec 98 22211.05 25160.46 23986.81
Feb 00 20511.51 24820.87 23148.46
</TABLE>
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 Bond Index and the Lipper General Municipal Debt Funds
Index. Results include the reinvestment of all dividends and capital gain
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. To equalize the time periods, the indexes' performances
were prorated for the month of October 1986.
- -------------------------------------------------------------------------------
[SIDENOTE]
YOUR FUND'S APPROACH
THE STRONG MUNICIPAL BOND FUND SEEKS TOTAL RETURN BY INVESTING FOR
A HIGH LEVEL OF FEDERALLY TAX-EXEMPT CURRENT INCOME WITH A MODERATE DEGREE OF
SHARE-PRICE FLUCTUATION. THE FUND INVESTS PRIMARILY IN LONG-TERM, HIGHER- AND
MEDIUM-QUALITY MUNICIPAL BONDS. THE FUND'S MANAGER CONDUCTS INTENSIVE RESEARCH
ON INDIVIDUAL ISSUERS TO UNCOVER SOLID INVESTMENT OPPORTUNITIES, ESPECIALLY
LOOKING FOR BONDS WHOSE QUALITY MAY BE IMPROVING. THE FUND TYPICALLY MAINTAINS
AN AVERAGE MATURITY BETWEEN 10 AND 20 YEARS.
- -------------------------------------------------------------------------------
[SIDENOTE]
MARKET HIGHLIGHTS
- - The past six months marked a continuation of perhaps the most severe bear
market for bonds ever recorded. The second half of 1999 proved even more
challenging than the first.
- - The Federal Reserve raised rates twice over the past six months. These
hikes--and fears of more to come--were a driving force behind the bear
market.
- - The yields on tax-free municipal issues remain very attractive compared with
those offered by comparable taxable bonds.
- -------------------------------------------------------------------------------
(4) For purposes of this average rating, the Fund's short-term debt obligations
have been assigned long-term ratings by the Advisor.
* The Lehman Brothers Municipal Bond Index is an unmanaged index generally
representative of investment-grade, tax-exempt bonds. The Lipper General
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 Standard & Poor's Micropal. Source of the Lipper index data is
Lipper Inc.
5
<PAGE>
THE STRONG SHORT-TERM HIGH YIELD MUNICIPAL FUND
-----------------------------------------------
PERSPECTIVES
FROM THE MANAGER
/s/ Mary-Kay H. Bourbulas
Mary-Kay H. Bourbulas
Portfolio Manager
- -------------------------------------------------------------------------------
The end of 1999 was a difficult period for all municipal funds. We were far from
unique in having to sell securities to meet shareholder redemptions, which far
exceeded our expectations and were the worst by far this asset class has seen
since 1995. Rather than reflecting a bond's worth, bids simply indicated
whatever price a cash buyer was willing to offer. Thus, the Fund was forced to
sell securities at distressed levels to keep up with the outflows.
In this difficult environment, it was natural that our allocation to the
corporate-backed sector (IDR) decreased to 16% from 23% of assets. These issues,
backed by such familiar names as American Airlines and United Airlines, were
more liquid, and thus attracted buyers more readily as we sold to meet
redemptions. Our position in the utilities sector decreased for the same
reasons, falling to 1.1% from 6% of assets.
Selling pressure also contributed to the decline in the Fund's average coupon to
6.03% from 6.25%. However, the portfolio's average credit quality remained
stable at BB.
A significant portion of traditional municipal financing is done in the
healthcare sector. Continued earnings declines in this sector added to the
strain in the municipal market. For the long term, however, we continue to
believe that healthcare is essential, and continue to seek investment
opportunities in providers who face little or no competition in their
- -------------------------------------------------------------------------------
WE BELIEVE THAT 2000 SHOULD OFFER A BETTER INVESTMENT CLIMATE FOR MUNICIPAL
FUNDS.
- -------------------------------------------------------------------------------
[SIDENOTE]
FUND
HIGHLIGHTS
- - The Fund returned -1.11% for the six months ended February 29, 2000, while
the Lehman Brothers 1-3 Year Non-Investment Grade Municipal Bond Index
returned 1.78%. The Fund's 30-day annualized yield was 5.64%. For investors
in the 36% tax bracket, that translates into a taxable equivalent yield of
8.81%.
- - Outflows for the Fund for the fourth quarter of 1999 totaled $43
million--well ahead of expectations. Short-duration, high-yield municipal
securities were difficult to sell, but all redemptions were met without
compromising the Fund's overall credit quality.
- -------------------------------------------------------------------------------
[SIDENOTE]
AVERAGE ANNUAL
TOTAL RETURN(1)
AS OF 2-29-00
1-year -0.06%
Since Inception 3.32%
(11-30-97)
- -------------------------------------------------------------------------------
[SIDENOTE]
PORTFOLIO
STATISTICS
AS OF 2-29-00
30-day annualized yield(2) 5.64%
Average maturity(3) 2.7 years
Average quality rating(4) BB
- -------------------------------------------------------------------------------
(1) Average annual total return and total return measure change in the value
of an investment in the Fund, assuming reinvestment of all dividends and
capital gains. Average annual total return reflects annualized change,
while total return reflects aggregate change and is not annualized.
(2) Yield is annualized for the 30 days ended 2-29-00, is historical, and will
vary. The Fund's Advisor has waived its management fee of 0.11%. Otherwise,
the current yield would have been 5.53% and returns would have been lower.
(3) The Fund's average maturity includes the effect of futures.
6
<PAGE>
service area. That said, the slight increase in the Fund's allocation to this
sector (to 24% from 22%) reflects our belief that it was advantageous to reduce
our holdings in other sectors while we waited for the healthcare sector to
rebound.
We have raised cash levels in the Fund, but are holding back on reinvesting in
the market. Although new-issue volume is currently low, it is expected to rise
by mid-year. With the Federal Reserve signaling possible further interest-rate
hikes, prospects for reinvesting current cash and Fund cash flow (from maturing
bonds and bond income) look good. We believe the relative performance of
municipals should improve, as most of the damage of the higher ratios (versus
Treasury securities) has already been absorbed. From a fiscal perspective, state
and local governments are in great shape, and bond market efficiencies are
improving. Therefore, we believe that 2000 should offer a better investment
climate for municipal funds.
We appreciate your continued confidence in the Strong Short-Term High Yield
Municipal Fund.
GROWTH OF AN ASSUMED $10,000 INVESTMENT
FROM 11-30-97 TO 2-29-00
[GRAPH]
<TABLE>
<CAPTION>
ST HY Muni LB 1-3yr Non-Inv Lipper HY Muni
Bond Fund (N) Muni Bd Debt Fund
<S> <C> <C> <C>
Nov 97 10000 10000 10000
Jun 98 10458.34 10326.05 10463.07
Dec 98 10699.52 10599.76 10724.82
Jun 99 10849.19 10818.62 10691.44
Dec 99 10783.36 10987.83 10333.35
Feb 00 10763.21 11066.72 10307.52
</TABLE>
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with a similar investment in
the Lehman Brothers 1-3 Year Non-Investment Grade Municipal Bond Index and
the Lipper High Yield 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 will vary, and you may have a gain or loss when you sell
shares.
- -------------------------------------------------------------------------------
[SIDENOTE]
YOUR FUND'S
APPROACH
The Strong Short-Term High Yield Municipal Fund seeks total return by investing
for a high level of federally tax-exempt current income with a moderate degree
of share-price fluctuation. The Fund invests primarily in short- and
intermediate-term, medium- and lower-quality municipal bonds. The Fund's manager
emphasizes bonds whose credit quality may be improving and issuers that
complement current investment themes, such as the "aging of America." The
manager also takes the overall interest rate environment into consideration. The
Fund typically maintains an average maturity between one and three years.
- -------------------------------------------------------------------------------
[SIDENOTE]
MARKET HIGHLIGHTS
- - Non-investment grade municipal debt continued to decline in price as
investors shunned lower-rated debt. The Federal Reserve's interest rate
hikes also added to concerns, with many investors waiting on the sidelines
in hopes of higher yields ahead.
- - Municipal funds experienced net outflows of almost $7 billion over the past
six months. The selling pressure accelerated toward the end of 1999, as
tax-conscious investors looked to book municipal losses to offset stock
gains.
- - Tax-loss selling has abated and fund flows have started to improve in the
first two months of 2000. Supply so far this year is off 40% from 1999's
level, helping stabilize the market and reduce secondary supply.
- -------------------------------------------------------------------------------
(4) For the purposes of this average rating, the Fund's short-term debt
obligations have been assigned long-term ratings by the Advisor.
* The Lehman Brothers 1-3 Year Non-Investment Grade Municipal Bond Index is an
unmanaged index generally representative of municipal bonds rated below Baa
with maturities of one to three years. The Lipper High Yield 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
Lehman Brothers. Source of the Lipper index data is Lipper Inc.
7
<PAGE>
THE STRONG SHORT-TERM MUNICIPAL BOND FUND
-----------------------------------------
PERSPECTIVES
FROM THE MANAGER
/s/ Steven D. Harrop
Steven D. Harrop
Portfolio Manager
- -------------------------------------------------------------------------------
1999 shaped up as one of the worst bear markets for bonds, with the second half
of the year proving more harsh than the first. As these difficulties continued
into the early months of 2000, this Fund has had to struggle with an extremely
challenging environment over the past six months.
With the Federal Reserve still demonstrably uncomfortable with the pace of U.S.
economic growth, it continued its efforts to put on the brakes by raising rates
by a total of 50 basis points over the period. These hikes, as well as the
anticipation that the Fed is not done with its tightening maneuvers, were the
primary force driving the bear bond market.
Over the past six months, we have continued to position the Fund relatively
aggressively. That stance is designed to help the Fund perform well if rates
make a move downward, but the Fund has also been able to perform reasonably even
as rates have risen. Our positioning at the longer end of the maturity range
boosts the Fund's yield.
Quality remains an important consideration in our management of this Fund. We've
kept a high percentage of the Fund's assets in AAA and AA paper, and have
maintained the Fund's average credit quality at A. About one-third of the Fund's
assets are in holdings backed by some form of a third-party guarantee, such as
a letter of credit, insurance, or collateralization.
Our sector allocations continue to be a byproduct of our individual security
selections,
- -------------------------------------------------------------------------------
QUALITY REMAINS AN IMPORTANT CONSIDERATION IN OUR MANAGEMENT OF THIS FUND.
- -------------------------------------------------------------------------------
[SIDENOTE]
FUND
HIGHLIGHTS
- - The Fund returned 0.49% for the six months ended February 29, 2000, while
the Lehman Brothers Municipal 3 Year Bond Index returned 1.17%. The Fund's
30-day annualized yield was 4.82%. For investors in the 36% tax bracket,
that translates into a taxable equivalent yield of 7.53%.
- - The Fund's average portfolio maturity, at 2.95 years, is near the maximum
level permitted. The Fund's average credit quality remains a solid A.
Roughly 40% of the Fund's assets are invested in securities from the top two
credit levels, AAA and AA.
- - Securities subject to the Alternative Minimum Tax comprise approximately 35%
of the portfolio.
- -------------------------------------------------------------------------------
[SIDENOTE]
AVERAGE ANNUAL
TOTAL RETURNS(1)
AS OF 2-29-00
1-year 0.38%
3-year 4.21%
5-year 4.46%
Since Inception 4.42%
(12-31-91)
- -------------------------------------------------------------------------------
[SIDENOTE]
PORTFOLIO
STATISTICS
AS OF 2-29-00
30-day annualized yield(2) 4.82%
Average maturity 2.95 years
Average quality rating(3) A
- -------------------------------------------------------------------------------
From time to time, the Fund's advisor has waived its management fee and/or
absorbed Fund expenses, which has resulted in higher returns.
(1) Average annual total return and total return measure change in the value of
an investment in the Fund, assuming reinvestment of all dividends and
capital gains. Average annual total return reflects annualized change, while
total return reflects aggregate change, and is not annualized.
(2) Yield is annualized for the 30 days ended 2-29-00, is historical, and will
vary.
(3) For the purposes of this average rating, the Fund's short-term debt
obligations have been assigned long-term ratings by the Advisor.
8
<PAGE>
rather than a deliberate attempt to favor one sector over another for purely
macroeconomic reasons. Multifamily housing is the Fund's leading sector, with
17% of assets, while education, retirement, and nursing homes each consume about
11.5%.
Although the bond market has been very difficult, we see some cause to be
hopeful. With the low rate of inflation that now prevails, if the economy shows
any sign of slowing down, we believe that bonds could enjoy a significant rally.
In the meantime, the strong domestic economy has helped bolster most municipal
credits, with upgrades outnumbering downgrades seven to one.
We thank you for your investment in the Strong Short-Term Municipal Bond Fund.
We look forward to continuing to work with you toward your important financial
goals.
GROWTH OF AN ASSUMED $10,000 INVESTMENT
FROM 12-31-91 TO 2-29-00
[GRAPH]
<TABLE>
<CAPTION>
Lipper Short ST Muni LB Muni Index
Muni Debt Ave Bond Fund (N) 3 Year TR
<S> <C> <C> <C>
Dec 91 10000 10000 10000
Dec 92 10578.04 10716.02 10643.36
Dec 93 11130.60 11440.59 11305.30
Dec 94 11167.13 11255.98 11382.13
Dec 95 11966.86 11860.69 12391.93
Dec 96 12421.77 12438.64 12941.57
Dec 97 12999.65 13300.92 13650.79
Dec 98 13589.77 14039.27 14361.70
Dec 99 13819.45 14202.80 14643.70
Feb 00 13878.90 14236.06 14716.31
</TABLE>
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with a similar investment in
the Lehman Brothers Municipal 3 Year Bond Index and the Lipper Short
Municipal Debt Funds Average. Results include the reinvestment of all
dividends and capital gain 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.
- -------------------------------------------------------------------------------
[SIDENOTE]
YOUR FUND'S
APPROACH
The Strong Short-Term Municipal Bond Fund seeks total return by investing for a
high level of federally tax-exempt current income with a low degree of
share-price fluctuation. The Fund invests primarily in short- and
intermediate-term, higher- and medium-quality municipal bonds. The Fund's
manager conducts intensive research on individual issuers to uncover solid
investment opportunities, especially looking for bonds whose quality may be
improving. The Fund typically maintains an average maturity of three years or
less.
- -------------------------------------------------------------------------------
[SIDENOTE]
MARKET
HIGHLIGHTS
- - Over the past six months, the severe bear market for bonds--one of the worst
in market history--continued. The second half of 1999 proved to be even more
difficult than the first had been.
- - The Federal Reserve raised rates twice over the past six months, bringing
the Federal Funds target rate to 5.75% in February.
- -------------------------------------------------------------------------------
* The Lehman Brothers Municipal 3 Year Bond Index is an unmanaged index
generally representative of three-year, tax-exempt bonds. The Lipper Short
Municipal Debt Funds Average represents funds that invest in municipal debt
issues with dollar-weighted average maturities of less than three years.
Source of the Lehman index data is Standard & Poor's Micropal. Source of the
Lipper index data is Lipper Inc.
9
<PAGE>
BOND
GLOSSARY
BOND QUALITY RATINGS--There are services that analyze the financial condition of
a bond's issuer and then assign it a rating. The best-known rating agencies are
Standard and Poors and Moody's. The highest-quality bonds are rated AAA (S&P) or
Aaa (Moody's). The scale descends to AA, A, then BBB, and so on, down to D.
Bonds with a rating of BBB or higher are considered investment grade. Bonds
rated BB and below are considered "junk bonds." Typically, the lower a bond's
rating, the higher yield it must pay in order to compensate the bondholder for
the added risk.
MATURITY--Like a loan, a bond must be paid off on a certain date. A bond's
maturity is the time remaining until it is paid off. Bonds typically mature in a
range from overnight to 30 years from now. Typically, bonds with longer
maturities will have higher yields and larger price changes in reaction to
interest rate changes. In rare situations, shorter-term bonds will have higher
yields; this is known as an inverted yield curve (see definition on this page).
DURATION--Duration is similar to maturity, but also accounts for the semi-annual
interest payments made by most bonds. Duration is a useful tool for determining
a bond's or a bond fund's sensitivity to interest rate changes. The higher the
duration, the more a bond's price will fluctuate when interest rates change.
TREASURY SPREAD--The Treasury spread is the difference in yield between a
Treasury bond (issued by the federal government) and a bond with an equal
maturity, but from another category, such as a corporate bond. This calculation
is used to measure the prices of corporate bonds, mortgage-backed securities,
and other non-government issues relative to Treasuries. Higher spreads occur in
uncertain times when investors buy Treasuries for their safety and sell other
types of bonds.
YIELD--Yield is the income your investment is generating. It is calculated by
taking the income paid by a bond in a given period of time (often 30 days),
annualizing it, and stating it as a percentage of the money invested.
YIELD CURVE--The yield curve is a graph that plots the yields of Treasury bonds
against their maturities. Under normal circumstances, this line will slope
upward, reflecting longer-maturity bonds having higher yields. In rare
circumstances, such as in a time of deflation, the yield curve may slope
downward, or "invert." The steepness of the yield curve shifts depending on
economic trends and outlooks. Properly positioned, a bond investor can profit
from these shifts.
10
<PAGE>
<TABLE>
<CAPTION>
SCHEDULES OF INVESTMENTS IN SECURITIES February 29, 2000 (Unaudited)
- ------------------------------------------------------------------------------------------
STRONG HIGH-YIELD MUNICIPAL BOND FUND
- ------------------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS 94.5%
ALABAMA 0.7%
West Jefferson, Alabama Amusement and
Public Park Authority First Mortgage
Revenue - Visionland Alabama Project,
6.00%, Due 2/01/08 $3,445,000 $ 3,100,500
ALASKA 1.5%
Juneau, Alaska City and Borough Nonrecourse
Revenue - St. Ann's Care Center Project,
6.875%, Due 12/01/25 4,000,000 3,575,000
Seward, Alaska Revenue - Alaska Sealife Center
Project, 7.65%, Due 10/01/16 3,500,000 3,495,625
------------
7,070,625
ARIZONA 2.7%
Maricopa County, Arizona IDA Senior Living
Facilities Revenue - Christian Care Mesa, Inc.
Project, 7.875%, Due 4/01/27 1,745,000 1,734,094
Navajo County, Arizona IDA IDR - Stone
Container Corporation Project:
7.20%, Due 6/01/27 5,675,000 5,455,094
7.40%, Due 4/01/26 5,500,000 5,410,625
------------
12,599,813
ARKANSAS 0.4%
Little Rock, Arkansas Hotel and Restaurant Gross
Receipts Tax Revenue, 7.375%, Due 8/01/15 1,500,000 1,693,125
CALIFORNIA 3.6%
Millbrae, California Residential Facilities
Revenue - Magnolia of Millbrae Project,
7.375%, Due 9/01/27 6,000,000 5,895,000
San Francisco, California Redevelopment Agency
Residential Facilities Revenue - Coventry Park
Project, 8.50%, Due 12/01/26 5,000,000 5,031,250
San Joaquin Hills, California Transportation
Corridor Agency Toll Road Revenue Refunding,
Zero %, Due 1/15/21 (Rate Reset Effective
1/15/07) 9,750,000 5,910,938
------------
16,837,188
COLORADO 1.2%
Colorado Health Facilities Authority Hospital
Revenue - Steamboat Springs Health Care
Association Project, 5.75%, Due 9/15/22 5,000,000 3,962,500
Colorado Health Facilities Authority Revenue -
Rocky Mountain Adventist Project, 6.625%,
Due 2/01/13 1,550,000 1,373,687
------------
5,336,187
CONNECTICUT 1.2%
Connecticut Health and EFA Revenue - New
Opportunities for Waterbury, Inc. Project,
6.75%, Due 7/01/28 3,895,000 3,719,725
Mashantucket Western Pequot Tribe
Subordinated Special Revenue Bonds:
Zero %, Due 9/01/15 2,000,000 715,000
Zero %, Due 9/01/16 2,000,000 660,000
Zero %, Due 9/01/18 1,100,000 313,500
------------
5,408,225
FLORIDA 5.5%
Arbor Greene Community Development
District Special Assessment Revenue,
7.00%, Due 5/01/03 245,000 245,306
Cory Lakes, Florida Community Development
District Special Assessment Revenue,
8.375%, Due 5/01/17 3,090,000 3,202,013
Florida Housing Finance Agency MFHR
Refunding - Lake Side Villas and Golf Villas at
Sabal Palm Project:
6.75%, Due 12/01/10 $1,000,000 $ 918,750
7.00%, Due 12/01/16 2,600,000 2,333,500
7.25%, Due 12/01/25 (c) 4,400,000 3,883,000
Grand Haven Community Development District
Special Assessment Revenue, 6.90%,
Due 5/01/19 1,000,000 1,000,000
Largo, Florida Sun Coast Health System Revenue -
Sun Coast Hospital Issue, 6.30%, Due 3/01/20 8,045,000 6,848,306
Palm Beach County, Florida Solid Waste IDR -
Okeelanta Power LP Project:
6.375%, Due 2/15/07 (Purchased in Default
on 1/28/98) 1,300,000 780,000
6.70%, Due 2/15/15 (Purchased in Default
on 2/04/98) 500,000 300,000
Palm Beach County, Florida Solid Waste IDR -
Osceola Power LP Project, 6.85%, Due 1/01/14
(Purchased in Default on 1/13/98 - 2/04/98) 450,000 270,000
Pinellas County, Florida EFA Revenue -
College Harbor Project, 8.50%, Due 12/01/28 4,685,000 4,690,856
Polk County, Florida HFA Subordinated Revenue -
Lake Wales Gardens Project, Zero %,
Due 4/01/20 4,715,000 807,444
------------
25,279,175
GEORGIA 5.8%
Atlanta, Georgia Urban Residential Finance
Authority MFHR - Evergreen Village Estates
Project, 6.625%, Due 5/01/28 605,000 579,288
Atlanta, Georgia Urban Residential Finance
Authority MFHR - Park Place Apartments
Project, 6.75%, Due 3/01/31 6,000,000 5,437,500
Dekalb County, Georgia Residential Care
Facilities for the Elderly Authority First Lien
Revenue - King's Bridge Retirement
Center, Inc. Project:
8.00%, Due 7/01/06 650,000 684,125
8.15%, Due 7/01/16 2,380,000 2,516,850
8.25%, Due 7/01/26 5,250,000 5,505,937
Fulton County, Georgia Housing Authority
MFHR - Washington Court Project:
6.40%, Due 2/01/19 775,000 692,656
6.50%, Due 2/01/28 1,750,000 1,535,625
Fulton County, Georgia Residential Care Facilities
Revenue - Residential Housing Authority
Assisted Living Project:
6.90%, Due 7/01/19 1,640,000 1,471,900
7.00%, Due 7/01/29 5,360,000 4,736,900
Savannah, Georgia EDA IDR - Stone Container
Corporation Project, 7.40%, Due 4/01/26 3,500,000 3,443,125
------------
26,603,906
ILLINOIS 5.9%
Godfrey, Illinois Revenue - United Methodist
Village Project, 5.875%, Due 11/15/29 5,000,000 3,850,000
Illinois DFA Hospital Revenue - Adventist Health
System/Sunbelt Obligation Project, 5.50%,
Due 11/15/20 1,750,000 1,389,062
Illinois HDA MFHR, 5.00%, Due 7/01/25 (c) 3,750,000 2,896,875
Metropolitan Pier and Exposition Authority
Hospitality Facilities Revenue - McCormick
Place Convention Project, 7.00%, Due 7/01/26 3,000,000 3,367,500
Riverdale, Illinois Environmental Improvement
Revenue - Acme Metals, Inc. Project:
7.90%, Due 4/01/24 (Defaulted Effective 9/29/98) 2,500,000 2,250,000
7.95%, Due 4/01/25 (Defaulted Effective 9/29/98) 5,000,000 4,500,000
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) February 29, 2000 (Unaudited)
- ------------------------------------------------------------------------------------------
STRONG HIGH-YIELD MUNICIPAL BOND FUND (Continued)
- ------------------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Robbins, Illinois Resource Recovery Revenue -
Restructuring Project:
Zero %, Due 10/15/09 $ 857,812 $ 797,945
7.25%, Due 10/15/09 850,426 844,473
7.25%, Due 10/15/24 3,676,918 3,533,812
Series A, 8.375%, Due 10/15/16 (Currently
Accruing at 2.4%) 5,480,468 2,877,246
Series B, 8.375%, Due 10/15/16 (Currently
Accruing at 2.4%) 2,144,531 1,125,879
------------
27,432,792
INDIANA 5.6%
Indiana Health Facility Financing Authority
Revenue - Hamilton Communities, Inc. Project,
6.50%, Due 1/01/30 18,200,000 15,310,750
Indianapolis, Indiana EDR MFHR - Post Pointe
Apartments Project:
8.30%, Due 3/01/06 480,000 472,800
8.40%, Due 3/01/11 710,000 694,025
8.75%, Due 3/01/27 6,540,000 6,351,975
St. Joseph County, Indiana EDR - Hamilton
Communities Obligation Group Project,
7.15%, Due 7/01/29 3,155,000 3,013,025
------------
25,842,575
IOWA 4.6%
Asbury, Iowa Elderly Care and Retirement
Facilities Revenue - Stonehill Project,
6.00%, Due 9/01/28 1,000,000 808,750
Cedar Rapids, Iowa First Mortgage Revenue -
Cottage Grove Place Project:
5.875%, Due 7/01/28 (c) 7,635,000 6,031,650
9.00%, Due 7/01/25 (Pre-Refunding at $102 on
7/01/05) 6,000,000 7,140,000
Iowa Finance Authority Elder Care Facility First
Mortgage Revenue - Amity Fellowserve-Iowa,
Inc. Project, 6.00%, Due 10/01/28 8,820,000 7,309,575
------------
21,289,975
KENTUCKY 2.6%
Kuttawa, Kentucky First Mortgage Revenue -
GF/Kentucky, Inc. Project, 6.75%, Due 3/01/29 2,900,000 2,479,500
Morgantown, Kentucky Solid Waste Disposal
Facilities Revenue - IMCO Recycling, Inc. Project:
6.00%, Due 5/01/23 4,100,000 3,556,750
7.65%, Due 5/01/16 5,740,000 5,940,900
------------
11,977,150
LOUISIANA 1.9%
Iberia Parish, Louisiana Hospital Service District
Number 1 Revenue, 8.00%, Due 5/26/16 2,100,000 1,947,750
Louisiana Health and Education Authority
Revenue Refunding - Lambeth House, Inc.
Project:
6.00%, Due 1/01/14 500,000 431,250
6.15%, Due 1/01/18 1,885,000 1,599,894
6.20%, Due 1/01/28 2,250,000 1,836,562
Louisiana Public Facilities Authority Revenue -
Progressive Healthcare Providers, Inc.
Developmental Centers Project, 6.375%,
Due 10/01/28 3,350,000 2,868,438
------------
8,683,894
MASSACHUSETTS 2.8%
Massachusetts Development Finance Agency
Revenue Health Care Facility Alliance, 7.10%,
Due 7/01/32 2,000,000 1,820,000
Massachusetts Health and EFA Revenue - Saints
Memorial Medical Center Project, 5.75%,
Due 10/01/06 1,885,000 1,705,925
Massachusetts Industrial Finance Agency Assisted
Living Facility Revenue - TNG Marina Bay LLC
Project, 7.50%, Due 12/01/27 4,220,000 4,125,050
Massachusetts Industrial Finance Agency Health
Care Facility Revenue - Metro Health
Foundation of Massachusetts, Inc. Project,
6.75%, Due 12/01/27 $ 3,000,000 $ 2,670,000
Massachusetts Industrial Finance Agency
Revenue - Institute for Developmental
Disabilities Project, 9.25%, Due 6/01/09 2,810,000 2,817,025
------------
13,138,000
MICHIGAN 1.8%
Michigan Strategic Fund Resource Recovery
Limited Obligation Revenue - Central Wayne
Energy Recovery LP Project:
6.90%, Due 7/01/19 2,200,000 1,996,500
7.00%, Due 7/01/27 6,800,000 6,086,000
------------
8,082,500
MINNESOTA 3.1%
Rochester, Minnesota MFHR - Wedum Shorewood
Campus Project, 6.60%, Due 6/01/36 5,350,000 4,962,125
St. Paul, Minnesota Housing and Redevelopment
Authority Hospital Facility Revenue - HealthEast
Project:
5.50%, Due 11/01/09 1,580,000 1,368,675
Series A, 6.625%, Due 11/01/17 3,790,000 3,363,625
Series B, 6.625%, Due 11/01/17 3,320,000 2,946,500
Washington County, Minnesota Housing and
Redevelopment Authority Hospital Facility
Revenue - HealthEast Project, 5.375%,
Due 11/15/18 2,500,000 1,881,250
------------
14,522,175
MISSOURI 1.7%
Saline County, Missouri IDA Health Facilities
Revenue - John Fitzgibbon Memorial Hospital,
Inc. Project, 6.50%, Due 12/01/28 5,465,000 4,406,156
Springfield, Missouri Land Clearance
Redevelopment Authority Industrial Revenue
Refunding - University Plaza Redevelopment
Corporation Project, 6.90%, Due 10/01/16 3,440,000 3,237,900
------------
7,644,056
MONTANA 0.2%
Crow Finance Authority Tribal Purpose Revenue,
5.70%, Due 10/01/27 1,000,000 936,250
NEW HAMPSHIRE 0.5%
New Hampshire Business Finance Authority
Revenue Air Cargo Facility - Pease LLC Project,
6.75%, Due 4/01/24 2,500,000 2,256,250
NEW JERSEY 4.5%
Camden County, New Jersey Improvement
Authority Lease Revenue - Kaighn Port Marine
Terminal A Project, 8.00%, Due 6/01/27 4,890,000 5,103,938
New Jersey EDA Assisted Living Revenue -
Meridian Assisted Living Project, 6.75%,
Due 8/01/30 5,000,000 4,287,500
New Jersey EDA EDR - Kapkowski Road Landfill
Reclamation Improvement District Project:
Zero %, Due 4/01/04 160,000 121,800
Zero %, Due 4/01/05 310,000 219,713
Zero %, Due 4/01/06 1,020,000 673,200
Zero %, Due 4/01/07 1,025,000 629,094
Zero %, Due 4/01/09 1,020,000 540,600
6.375%, Due 4/01/31 10,000,000 9,325,000
------------
20,900,845
NEW YORK 0.4%
Rockland County, New York Industrial
Development Agency Civic Facility Revenue -
Dominican College Project, 6.25%, Due
5/01/28 2,275,000 1,993,469
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) February 29, 2000 (Unaudited)
- ------------------------------------------------------------------------------------------
STRONG HIGH-YIELD MUNICIPAL BOND FUND (Continued)
- ------------------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------------------
<S> <C> <C>
NORTH CAROLINA 3.6%
Fletcher, North Carolina First Mortgage Housing
Revenue - Avery's View Retirement Facilities,
Inc. Project, 7.00%, Due 3/01/28 (Rate Reset
Effective 3/01/05) $ 15,000,000 $ 13,481,250
Macon County, North Carolina HFC Revenue -
Chestnut Hill Highlands Project, 8.50%,
Due 7/01/27 (Defaulted Effective 8/09/99) 8,145,000 3,176,550
------------
16,657,800
OHIO 3.8%
Akron, Ohio COP - Akron Municipal Baseball
Stadium Project, Zero %, Due 12/01/16 (Rate
Reset Effective 12/01/01) 1,500,000 1,438,125
Cleveland, Ohio Airport Special Revenue
Refunding - Continental Airlines, Inc. Project:
5.50%, Due 12/01/08 4,045,000 3,726,456
5.70%, Due 12/01/19 7,000,000 5,932,500
Cuyahoga County, Ohio MFHR - The Park Lane
Apartments Project:
7.80%, Due 7/01/07 470,000 456,487
7.90%, Due 7/01/12 680,000 652,800
8.25%, Due 7/01/28 1,930,000 1,823,850
Medina County, Ohio EDR MFHR - Camelot
Place, Ltd. Project, 8.375%, Due 10/01/23 400,000 374,500
Pike County, Ohio Hospital Facilities Revenue -
Pike Health Services, Inc. Project, 6.75%,
Due 7/01/17 3,660,000 3,380,925
------------
17,785,643
PENNSYLVANIA 8.3%
Bucks County, Pennsylvania IDA CDR - Attleboro
Associates, Ltd. Nursing Facility Project:
8.00%, Due 12/01/05 605,000 627,688
8.25%, Due 6/01/11 3,110,000 3,246,062
Delaware County, Pennsylvania Authority Health
Care Facility First Mortgage Revenue -
GF/Longwood Care, Inc. Project:
8.50%, Due 4/15/10 530,000 514,762
9.00%, Due 4/15/25 5,860,000 5,625,600
Horsham, Pennsylvania IDA CDA Health Care
Facilities Revenue - GF/Pennsylvania Properties,
Inc. Project:
7.375%, Due 9/01/08 440,000 418,550
8.375%, Due 9/01/24 6,000,000 5,902,500
Montgomery County, Pennsylvania IDA
Revenue - Wordsworth Academy Project,
8.00%, Due 9/01/24 6,840,000 6,737,400
Pennsylvania EDFA Exempt Facilities Revenue -
National Gypsum Company Project, 6.25%,
Due 11/01/27 1,500,000 1,331,250
Pennsylvania EDFA Qualified Residential Rent
Project Revenue - RSI Properties/Butler LLC
Project, 8.00%, Due 9/01/27 (Defaulted
Effective 9/01/99) 3,000,000 2,400,000
Pennsylvania EDFA Qualified Residential Rent
Project Revenue - RSI Properties/Greensburg
LLC Project, 8.00%, Due 9/01/27 (Defaulted
Effective 9/01/99) 3,000,000 2,400,000
Philadelphia, Pennsylvania Hospitals and Higher
EFA Revenue - Temple University Children's
Medical Center Project, 5.75%, Due 6/15/29 7,105,000 5,479,731
Scranton-Lackawanna, Pennsylvania Health and
Welfare Authority Hospital Revenue - Marian
Community Hospital Project, 7.125%, Due
1/15/13 1,000,000 987,500
Wilkinsburg, Pennsylvania Municipal Authority
Health Facilities Revenue - Monroeville
Christian Project, 8.25%, Due 3/01/27 3,000,000 2,917,500
------------
38,588,543
SOUTH CAROLINA 6.2%
Connector 2000 Association, Inc. Subordinate
Capital Appreciation Toll Road Revenue -
Greenville, South Carolina Southern Connector
Project:
Zero %, Due 1/01/15 $ 4,400,000 $ 1,320,000
Zero %, Due 1/01/16 4,600,000 1,270,750
Zero %, Due 1/01/17 5,600,000 1,428,000
Zero %, Due 1/01/18 5,800,000 1,363,000
Zero %, Due 1/01/19 5,900,000 1,275,875
Zero %, Due 1/01/23 7,400,000 1,137,750
Zero %, Due 1/01/24 7,500,000 1,059,375
Zero %, Due 1/01/25 8,700,000 1,131,000
Zero %, Due 1/01/26 9,000,000 1,080,000
Zero %, Due 1/01/27 9,100,000 1,001,000
Zero %, Due 1/01/28 9,300,000 941,625
Zero %, Due 1/01/29 10,500,000 984,375
Zero %, Due 1/01/30 10,800,000 931,500
Zero %, Due 1/01/31 11,000,000 866,250
Zero %, Due 1/01/32 11,200,000 812,000
Zero %, Due 1/01/33 11,500,000 776,250
Zero %, Due 1/01/34 11,700,000 731,250
Zero %, Due 1/01/35 12,000,000 690,000
Zero %, Due 1/01/36 12,200,000 640,500
Zero %, Due 1/01/37 12,400,000 604,500
Zero %, Due 1/01/38 17,200,000 774,000
Florence County, South Carolina IDR -
Stone Container Corporation Project,
7.375%, Due 2/01/07 2,120,000 2,175,650
Loris, South Carolina Community Hospital
District Hospital Revenue, 5.625%, Due 1/01/29 2,450,000 1,892,625
South Carolina Jobs - EDA Solid Waste Recycling
Facilities Revenue - Santee River Rubber Project,
8.00%, Due 12/01/14 4,000,000 3,650,000
------------
28,537,275
SOUTH DAKOTA 0.3%
Mobridge, South Dakota Health Care Facilities
Revenue - Mobridge Regional Hospital Project,
6.50%, Due 12/01/22 1,860,000 1,587,975
TENNESSEE 0.2%
Shelby County, Tennessee Health, Educational
and Housing Facility Board Health Care
Facilities Revenue - Kirby Pines Retirement
Community Project, 6.375%, Due 11/15/25 850,000 753,313
TEXAS 2.7%
DeSoto, Texas IDA IDR - Wintergreen Commercial
Partnership Project, 7.00%, Due 1/01/17 3,665,243 3,550,704
Hidalgo County, Texas Health Services
Corporation Hospital Revenue - Mission
Hospital, Inc. Project, 6.75%, Due 8/15/16 3,000,000 2,850,000
Jefferson County, Texas Health Facilities
Development Corporation Hospital Revenue -
Baptist Health Care System Project, 8.30%,
Due 10/01/14 4,630,000 4,727,878
North Central Texas Health Facility Development
Corporation Revenue - Northwest Senior
Housing Retirement Facility Project, 7.50%,
Due 11/15/29 1,500,000 1,402,500
------------
12,531,082
VIRGINIA 5.2%
Alexandria, Virginia Redevelopment and Housing
Authority MFHR Refunding - Park Center
Apartments Project, 6.375%, Due 4/01/34 (c) 14,400,000 12,330,000
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) February 29, 2000 (Unaudited)
- ------------------------------------------------------------------------------------------
STRONG HIGH-YIELD MUNICIPAL BOND FUND (Continued)
- ------------------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Penninsula Ports Authority of Virginia Port
Facility Revenue Refunding - Ziegler Coal
Project, 6.90%, Due 5/02/22 $ 12,000,000 $ 10,245,000
Virginia Small Business Financing Authority
IDR - Albion Enterprises LLC Project, 6.40%,
Due 1/01/14 1,750,000 1,599,063
------------
24,174,063
WISCONSIN 5.6%
Brookfield, Wisconsin IDR Refunding - Midway
Motor Lodge Project, 8.40%, Due 4/01/12 4,950,000 5,271,750
Wisconsin Health and EFA Revenue - Divine
Savior Hospital, Inc. Project, 5.70%,
Due 6/01/28 3,000,000 2,313,750
Wisconsin Health and EFA Revenue - FH
Healthcare Development, Inc. Project, 6.25%,
Due 11/15/28 3,000,000 2,475,000
Wisconsin Health and EFA Revenue -
Heartland-Edgerton Group Project, 9.00%,
Due 11/15/25 2,435,000 2,343,687
Wisconsin Health and EFA Revenue - National
Regency of New Berlin, Inc. Project:
7.75%, Due 8/15/15 4,850,000 4,989,438
8.00%, Due 8/15/25 6,470,000 6,680,275
Wisconsin Health and EFA Revenue - Richland
Hospital, Inc. Project, 5.375%, Due 6/01/28 2,250,000 1,951,875
------------
26,025,775
WYOMING 0.4%
Teton County, Wyoming Hospital District
Hospital Revenue Refunding and Improvement,
5.80%, Due 12/01/17 2,200,000 1,834,250
- -----------------------------------------------------------------------------------------
Total Municipal Bonds (Cost $494,476,713) 437,104,394
- -----------------------------------------------------------------------------------------
TAXABLE MUNICIPAL BONDS 0.2%
Iowa
Iowa Finance Authority Elder Care Facility First
Mortgage Revenue - Amity Fellowserve-Iowa,
Inc. Project, 7.00%, Due 10/01/06 860,000 798,725
- -----------------------------------------------------------------------------------------
Total Taxable Municipal Bonds (Cost $860,000) 798,725
- -----------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (A) 3.7%
Municipal Money Market Funds
Multiple States
Strong Municipal Money Market Fund (d) 17,200,000 17,200,000
- -----------------------------------------------------------------------------------------
Total Short-Term Investments (Cost $17,200,000) 17,200,000
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Total Investments in Securities (Cost $512,536,713) 98.4% 455,103,119
Other Assets and Liabilites, Net 1.6% 7,246,511
- -----------------------------------------------------------------------------------------
Net Assets 100.0% $462,349,630
=========================================================================================
<CAPTION>
FUTURES
- -----------------------------------------------------------------------------------------
Underlying
Face Amount Unrealized
Expiration Date at Value Depreciation
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Sold:
205 Municipal Bond Futures 6/00 $18,956,094 $237,031
<CAPTION>
- -----------------------------------------------------------------------------------------
STRONG MUNICIPAL BOND FUND
- ------------------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS 99.6%
Alabama 0.6%
Troy, Alabama IDB Solid Waste Revenue -
Alabama Protein Recycling LLC Project,
7.75%, Due 5/01/19 $ 2,000,000 $ 1,662,500
ALASKA 0.5%
Alaska HFC Capital Appreciation Mortgage
Revenue, Zero %, Due 12/01/27 8,500,000 1,413,125
ARIZONA 0.3%
Phoenix, Arizona IDA Mortgage Revenue
Refunding - Christian Care Retirement
Apartments, Inc. Project, 6.25%, Due 1/01/16 1,000,000 892,500
ARKANSAS 0.6%
Arkansas DFA MFHR - Spring Valley
Apartments Project, 5.50%, Due 4/01/29 2,000,000 1,790,000
CALIFORNIA 1.0%
Foothill/Eastern Transportation Corridor
Agency Toll Road Revenue:
Zero %, Due 1/01/28 12,060,000 2,216,025
Zero %, Due 1/01/30 4,110,000 662,738
------------
2,878,763
COLORADO 8.3%
Castle Rock Ranch, Colorado Public
Improvements Authority Public
Facilities Revenue:
6.25%, Due 12/01/17 9,820,000 9,881,375
6.30%, Due 12/01/07 3,115,000 3,301,900
6.375%, Due 12/01/11 2,000,000 2,122,500
6.40%, Due 12/01/08 3,310,000 3,537,562
6.50%, Due 12/01/09 3,525,000 3,771,750
Colorado Health Facilities Authority
Retirement Housing Revenue - Liberty
Heights Project, Zero %, Due 7/15/20 2,900,000 772,125
------------
23,387,212
DELAWARE 0.7%
Delaware EDA Revenue, 6.30%, Due 5/01/22 2,250,000 2,025,000
FLORIDA 1.0%
Leon County, Florida EFA Revenue
Refunding - Southgate Residence Hall
Project, 6.75%, Due 9/01/28 1,000,000 912,500
Manatee County, Florida HFA SFMR, 7.45%,
Due 5/01/27 900,000 967,500
Pinellas County, Florida EFA Revenue -
College Harbor Project, 6.50%, Due 12/01/20 1,020,000 935,850
------------
2,815,850
GEORGIA 9.1%
Atlanta, Georgia Urban Residential Finance
Authority MFHR - Evergreen Village
Estates Project:
5.875%, Due 5/01/07 740,000 752,950
6.375%, Due 5/01/17 1,675,000 1,687,563
6.50%, Due 5/01/27 2,965,000 2,998,356
Colquitt County, Georgia Development
Authority Revenue - Southern Care
Corporation Facility Project, Zero %,
Due 12/01/21 7,270,000 1,644,837
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) February 29, 2000 (Unaudited)
- ------------------------------------------------------------------------------------------
STRONG MUNICIPAL BOND FUND (continued)
- ------------------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Houston County, Georgia MFHR - Emerald
Coast Housing II, Inc. Corder Crossing
Apartments Project, 7.00%, Due 8/01/28 $ 7,000,000 $ 6,203,750
Richmond County, Georgia Development
Authority First Mortgage Revenue,
Zero %, Due 12/01/21 20,000,000 4,425,000
Washington, Georgia Wilkes Payroll
Development Authority Subordinated
Revenue - Southern Care Corporation
Facility Project, Zero %, Due 12/01/21:
Series A 8,125,000 1,868,750
Series C 25,595,000 5,886,850
------------
25,468,056
IDAHO 0.7%
Idaho Housing Agency SFMR, 6.45%,
Due 7/01/27 1,935,000 1,956,769
ILLINOIS 10.8%
Illinois DFA Hospital Revenue - Adventist
Health System/Sunbelt Obligation
Project, 5.50%, Due 11/15/29 8,255,000 6,315,075
Illinois DFA Retirement Housing Revenue -
Regency Park at Lincolnwood Project:
Zero %, Due 7/15/23 30,000,000 6,037,500
Zero %, Due 7/15/25 15,400,000 2,695,000
Illinois Health Facilities Authority
Refunding Revenue - Lutheran Social
Services of Illinois, 6.125%, Due 8/15/20 9,160,000 7,625,700
Kane, Cook and DuPage Counties, Illinois
School District Number U-46 Capital
Appreciation School Building:
Zero %, Due 1/01/11 1,800,000 974,250
Zero %, Due 1/01/13 2,500,000 1,184,375
Metropolitan Pier and Exposition Authority
Capital Appreciation - McCormick Place
Expansion Project, Zero %, Due 6/15/16 1,250,000 468,750
Metropolitan Pier and Exposition Authority
Hospitality Facilities Revenue - McCormick
Place Convention Project, 7.00%, Due 7/01/26 1,500,000 1,683,750
Silvis, Rock Island County, Illinois Special
Service Area GO, 5.65%, Due 1/01/18 1,105,000 1,017,981
Zion, Illinois Park District GO Revenue,
6.50%, Due 12/30/17 2,485,000 2,348,325
------------
30,350,706
INDIANA 3.2%
Petersburg, Indiana PCR Refunding -
Indianapolis Power & Light Company
Project, 5.50%, Due 10/01/23 4,425,000 4,109,719
St. Joseph County, Indiana Hospital Authority
Health System Revenue - Madison Center,
Inc. Project, 5.80%, Due 2/15/24 6,300,000 4,984,875
------------
9,094,594
LOUISIANA 8.2%
Claiborne Parish, Louisiana Law Enforcement
District Revenue - Claiborne Correctional
Facilities Project, 6.25%, Due 3/01/19 7,500,000 6,787,500
Iberia Parish, Louisiana IDB IDR - Acadia
Board Company, Ltd. Project, 7.50%,
Due 8/01/22 2,180,000 1,940,200
New Orleans, Louisiana Regional Transit
Authority Tax-Exempt Lease-Purchase
Agreements, 6.125%, Due 5/01/10:
Lease M98147 13,736,428 13,135,459
Lease M98159 1,292,101 1,235,572
------------
23,098,731
MASSACHUSETTS 2.2%
Massachusetts IFA IDR - Welch Foods, Inc.
Project, 5.60%, Due 12/01/17 $ 1,700,000 $ 1,555,500
Massachusetts State Housing Finance Agency
Housing Revenue, 5.50%, Due 7/01/13 (b) 4,770,000 4,525,538
------------
6,081,038
MICHIGAN 0.8%
Michigan Hospital Finance Authority Hospital
Revenue Refunding - Pontiac Osteopathic
Hospital Project, 6.00%, Due 2/01/14 2,500,000 2,159,375
MINNESOTA 2.2%
St. Paul, Minnesota Housing and
Redevelopment Authority Lease Revenue -
Community of Peace Academy Project,
6.10%, Due 11/01/29 3,570,000 3,154,987
Woodbury, Minnesota IDR Refunding - Harvey
Vogel Manufacturing Company Project,
5.80%, Due 12/01/28 3,465,000 3,118,500
------------
6,273,487
MISSISSIPPI 1.3%
Jackson, Mississippi Housing Authority
MFHR - Elton Park Apartments Project,
5.40%, Due 4/01/39 4,000,000 3,645,000
MISSOURI 0.9%
Springfield, Missouri Land Clearance
Redevelopment Authority Industrial
Revenue Refunding - University Plaza Project,
6.60%, Due 10/01/11 2,465,000 2,455,756
MONTANA 1.0%
Crow Finance Authority Tribal Purpose
Revenue, 5.70%, Due 10/01/27 1,500,000 1,404,375
Miles City, Montana MFHR - Birchwood
Properties LP Project, 6.75%, Due 5/01/29 1,655,000 1,460,538
------------
2,864,913
NEW MEXICO 1.6%
Albuquerque, New Mexico IDR - MCT
Industries, Inc. Project, 6.50%, Due 4/01/17 4,330,000 4,481,550
NEW YORK 0.5%
New York Urban Development Corporation
Revenue, 5.50%, Due 4/01/19 1,500,000 1,411,875
NORTH DAKOTA 2.6%
North Dakota Housing Finance Agency - Home
Mortgage Finance Program, 6.40%,
Due 1/01/28 1,235,000 1,242,719
Richland County, North Dakota MFHR -
Birchwood Properties LP Project, 6.75%,
Due 5/01/29 5,165,000 4,558,112
Three Affiliated Tribes of the Fort Berthold
Reservation GO, 6.30%, Due 11/15/10 1,515,000 1,443,037
------------
7,243,868
OHIO 5.7%
Medina County, Ohio EDR MFHR - Camelot
Place, Ltd. Project, 8.375%, Due 10/01/23 3,800,000 3,557,750
Montgomery County, Ohio Health Care
Facilities Revenue Refunding - Friendship
Village of Dayton Project, 6.25%, Due 2/01/22 1,250,000 1,032,813
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) February 29, 2000 (Unaudited)
- ------------------------------------------------------------------------------------------
STRONG MUNICIPAL BOND FUND (continued)
- ------------------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Ohio Housing Finance Agency Residential
Mortgage Revenue, 5.95%, Due 9/01/27 $ 1,935,000 $ 1,867,275
Toledo, Ohio Housing Improvement -
Commodore Perry Apartments Project,
5.45%, Due 12/01/28 2,680,000 2,418,700
Toledo, Ohio MFMR - Commodore Perry
Apartments Project, 7.00%, Due 12/01/28 7,495,000 7,017,194
------------
15,893,732
OKLAHOMA 4.6%
Oklahoma County, Oklahoma Finance
Authority MFHR First Mortgage - Multiple
Apartments Project, 7.125%, Due 4/01/28 10,170,000 8,428,388
Oklahoma Ordinance Works Authority PCR
Refunding - Ralston Purina Company
Project, 6.30%, Due 9/01/15 1,500,000 1,528,125
Shawnee, Oklahoma Hospital Authority
Revenue - MidAmerica HealthCare, Inc.
Project, 8.00%, Due 4/01/04 1,925,000 1,955,300
Washington County, Oklahoma Medical
Authority Revenue - Bartlesville Jane Phillips
Episcopal Hospital Project, 6.125%,
Due 11/01/14 1,000,000 1,016,250
------------
12,928,063
OREGON 0.4%
Washington County, Oregon MFHR - Bethany
Meadows Project, 6.25%, Due 8/01/10 1,000,000 1,006,080
PENNSYLVANIA 7.4%
Allegheny County, Pennsylvania Hospital
Development Authority Revenue - Saint
Francis Medical Center Project:
5.75%, Due 5/15/17 1,660,000 1,384,025
5.75%, Due 5/15/27 3,965,000 3,132,350
Montgomery County, Pennsylvania IDA First
Mortgage Revenue Refunding - The
Meadowood Corporation Project, 6.25%,
Due 12/01/17 1,500,000 1,318,125
Pennsylvania EDA Qualified Residential Rent
Project Revenue - RSI Properties/Butler
LLC Project, 8.00%, Due 9/01/27
(Defaulted Effective 9/01/99) 2,360,000 1,888,000
Pennsylvania EDA Qualified Residential Rent
Project Revenue - RSI Properties/
Greensburg LLC Project, 8.00%, Due 9/01/27
(Defaulted Effective 9/01/99) 2,655,000 2,124,000
Philadelphia, Pennsylvania Hospitals and
Higher EFA Hospital Revenue - Temple
University Hospital Project, 6.50%,
Due 11/15/08 3,700,000 3,593,625
Philadelphia, Pennsylvania Hospitals and
Higher EFA Revenue - Temple University
Children's Medical Center Project, 5.75%,
Due 6/15/29 3,000,000 2,313,750
Scranton-Lackawanna, Pennsylvania Health
and Welfare Authority Hospital Revenue -
Marian Community Hospital Project, 6.50%,
Due 1/15/07 1,500,000 1,447,500
Scranton-Lackawanna, Pennsylvania Health
and Welfare Authority Hospital Revenue -
Moses Taylor Hospital Project, 6.25%,
Due 7/01/20 4,200,000 3,580,500
------------
20,781,875
RHODE ISLAND 0.5%
Rhode Island Health and Education Building
Corporation Hospital Financing Revenue -
South County Hospital Project, 6.00%,
Due 11/15/17 $ 1,630,000 $ 1,505,712
SOUTH CAROLINA 4.5%
Connector 2000 Association, Inc. Senior
Capital Appreciation Toll Road Revenue -
Greenville, South Carolina Southern
Connector Project:
Zero %, Due 1/01/12 3,900,000 1,613,625
Zero %, Due 1/01/14 4,560,000 1,607,400
Zero %, Due 1/01/15 1,000,000 322,500
Zero %, Due 1/01/26 10,000,000 1,350,000
Zero %, Due 1/01/32 12,100,000 1,028,500
Connector 2000 Association, Inc. Senior
Current Interest Toll Road Revenue -
Greenville, South Carolina Southern
Connector Project, 5.25%, Due 1/01/23 8,800,000 6,556,000
------------
12,478,025
SOUTH DAKOTA 2.3%
Education Loans, Inc. Student Loan Revenue
Subordinated Asset-Backed Bonds, 5.60%,
Due 6/01/20 3,000,000 2,756,250
Sisseton-Wahpeton Sioux Tribe of the Lake
Traverse Reservation GO:
7.00%, Due 11/01/13 815,000 795,644
7.00%, Due 11/01/23 1,290,000 1,202,925
South Dakota EDFA EDR Pooled Loan
Program - Midstates Printing, Inc. Project,
5.50%, Due 4/01/18 685,000 619,925
South Dakota HDA Homeownership Mortgage,
6.40%, Due 5/01/16 995,000 1,008,681
------------
6,383,425
TENNESSEE 0.6%
Shelby County, Tennessee Health, Educational
and Housing Facilities Board Revenue - Ave
Maria Assisted Living Project, 5.50%,
Due 12/01/31 2,000,000 1,722,500
TEXAS 10.0%
Dallas County, Texas Utility and Reclamation
District GO Refunding, 6.70%,
Due 2/15/25 (b) 5,000,000 4,862,500
El Paso, Texas Property Finance Authority,
Inc. SFMR - GNMA Mortgage-Backed
Securities Program, 8.70%, Due 12/01/18 365,000 381,881
Grape Creek-Pulliam, Texas Independent
School District Public Facility Corporation
School Facility Lease Revenue:
7.00%, Due 5/15/10 1,000,000 1,052,500
7.25%, Due 5/15/21 1,300,000 1,365,000
Lufkin, Texas Health Facilities Development
Corporation Health System Revenue
Refunding - Memorial Health System of
East Texas Project, 6.875%, Due 2/15/26 8,015,000 7,423,894
Port Arthur, Texas HFC Mortgage Revenue
Refunding - FHA Insured Mortgage Loans -
Port Arthur UDAG Projects, 6.40%,
Due 1/01/28 3,565,000 3,609,562
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
STRONG MUNICIPAL BOND FUND (continued)
- ------------------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Ranger, Texas Housing Corporation MFMR
Refunding - FHA Insured Mortgage Loans -
Ranger Apartments Project, 8.80%,
Due 3/01/24 $ 1,160,000 $ 1,286,150
Texas Department of Housing and Community
Affairs Residential Mortgage Revenue,
5.50%, Due 1/01/21 4,915,000 4,503,369
Texas Department of Housing and Community
Affairs SFMR, 6.00%, Due 9/01/17 1,240,000 1,243,100
Woodville, Texas HFC MFHR - Dogwood
Terrace Apartments Project, 7.50%,
Due 10/01/29 2,450,000 2,189,688
------------
27,917,644
UTAH 0.9%
Eagle Mountain, Utah Special Assessment Bonds,
5.90%, Due 12/15/07 1,263,000 1,259,842
Salt Lake County, Utah Housing Authority
MFHR - Millcreek Pines Apartments Project,
6.80%, Due 9/01/17 1,390,000 1,344,825
------------
2,604,667
VIRGINIA 0.6%
Pocahontas Parkway Association Route 895
Connector Toll Road Revenue, Zero %,
Due 8/15/17 5,000,000 1,662,500
WASHINGTON 1.9%
Spokane, Washington Downtown Foundation
Parking Revenue - River Park Square Project,
5.60%, Due 8/01/19 3,350,000 3,115,500
Washington EDFA Nonrecourse Revenue -
Lindal Cedar Homes, Inc. Project, 5.80%,
Due 11/01/17 2,175,000 2,058,094
------------
5,173,594
WISCONSIN 2.1%
Wisconsin Health and EFA Revenue - St. John's
Home of Milwaukee and Sunrise Care Center,
Inc. Obligated Group Project, 5.625%,
Due 12/15/22 5,450,000 4,312,312
Wisconsin Housing and EDA Home Ownership
Revenue, 6.20%, Due 3/01/27 1,480,000 1,461,500
------------
5,773,812
- -----------------------------------------------------------------------------------------
Total Municipal Bonds (Cost $308,880,600) 279,282,297
- -----------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 2.9%
MUNICIPAL MONEY MARKET FUNDS
MULTIPLE STATES
Strong Municipal Money Market Fund (d) 8,200,000 8,200,000
- -----------------------------------------------------------------------------------------
Total Short-Term Investments (Cost $8,200,000) 8,200,000
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Total Investments in Securities (Cost $317,080,600) 102.5% 287,482,297
Other Assets and Liabilities, Net (2.5%) (7,066,456)
- -----------------------------------------------------------------------------------------
Net Assets 100.0% $280,415,841
=========================================================================================
<CAPTION>
- ------------------------------------------------------------------------------------------
STRONG SHORT-TERM HIGH YIELD MUNICIPAL FUND
- ------------------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS 83.4%
ALABAMA 4.8%
West Jefferson, Alabama Amusement and Public
Park Authority First Mortgage Revenue -
Visionland Alabama Project, 5.875%,
Due 2/01/06 $ 6,510,000 $ 5,859,000
ALASKA 1.1%
Juneau, Alaska City and Borough Nonrecourse
Revenue - St. Ann's Care Center Project,
5.875%, Due 12/01/04 1,350,000 1,294,313
ARIZONA 0.6%
Winslow, Arizona IDA Hospital Revenue -
Winslow Memorial Hospital Project, 4.95%,
Due 6/01/03 745,000 711,475
CALIFORNIA 0.1%
Los Angeles, California Regional Airports
Improvement Corporation Lease Revenue
Facilities - Continental Airlines, 9.25%,
Due 8/01/24 85,000 95,412
COLORADO 3.6%
Black Hawk, Colorado Business Improvement
District Special Assessment Special
Improvement District:
6.00%, Due 12/01/09 1,120,000 1,058,400
6.25%, Due 12/01/11 2,000,000 1,842,500
Colorado Health Facilities Authority Hospital
Revenue - Steamboat Springs Health Care
Association Project:
4.30%, Due 9/15/01 115,000 112,844
4.40%, Due 9/15/02 380,000 368,600
4.70%, Due 9/15/05 85,000 79,794
4.80%, Due 9/15/01 245,000 240,712
4.80%, Due 9/15/06 455,000 424,856
4.90%, Due 9/15/02 230,000 222,813
4.90%, Due 9/15/07 20,000 18,500
---------
4,369,019
CONNECTICUT 1.0%
Connecticut Health and EFA Revenue - New
Opportunities for Waterbury, Inc. Project,
6.75%, Due 7/01/13 1,205,000 1,205,205
DISTRICT OF COLUMBIA 1.2%
District of Columbia Revenue - American
Geophysical Union Project, 5.50%, Due 9/01/03 585,000 576,956
District of Columbia Revenue - Methodist Home
Issue, 4.80%, Due 1/01/05 985,000 927,131
---------
1,504,087
FLORIDA 6.7%
Arbor Greene Community Development District
Special Assessment Revenue, 7.00%,
Due 5/01/03 190,000 190,238
Broward County, Florida IDR - Beverly
Enterprises-Florida, Inc. Project, 9.80%,
Due 11/01/10 1,000,000 1,065,560
Grand Haven Community Development District
Special Assessment Revenue, 6.30%,
Due 5/01/02 2,600,000 2,600,000
Leon County, Florida IDR - Beverly Enterprises -
Florida, Inc. Project, 9.80%, Due 6/01/11 825,000 855,063
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) February 29, 2000 (Unaudited)
- ------------------------------------------------------------------------------------------
STRONG SHORT-TERM HIGH YIELD MUNICIPAL FUND (continued)
- ------------------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Orlando and Orange County, Florida Expressway
Authority Expressway Revenue Refunding,
5.95%, Due 7/01/23 $ 10,000 $ 9,725
Tarpon Springs, Florida Health Facilities
Authority Hospital Revenue Refunding -
Tarpon Springs Hospital Foundation Project,
8.75%, Due 5/01/12 3,420,000 3,490,520
---------
8,211,106
GEORGIA 0.8%
Atlanta, Georgia Urban Residential Finance
Authority MFHR - Park Place Apartments
Project, 6.00%, Due 9/01/06 1,060,000 1,000,375
HAWAII 0.0%
Hawaii Department of Transportation Special
Facility Revenue - Continental Airlines, Inc.
Project, 9.60%, Due 6/01/08 50,000 51,421
IDAHO 0.0%
Idaho Student Loan Fund Marketing
Association, Inc. Student Loan Revenue,
5.10%, Due 10/01/02 10,000 9,800
ILLINOIS 8.2%
Carol Stream, Illinois First Mortgage Revenue -
Windsor Park Manor Project, 6.25%,
Due 12/01/01 250,000 249,063
Chicago, Illinois O'Hare International Airport
Special Facilities Revenue - American
Airlines, Inc. Project, 7.875%, Due 11/01/25 165,000 169,749
Granite City, Illinois Hospital Revenue
Refunding - St. Elizabeth Medical Center
Project, 8.125%, Due 6/01/08 860,000 819,150
Hoopeston, Illinois Hospital Capital
Improvement Revenue Refunding -
Hoopeston Community Memorial Hospital
Project, 5.25%, Due 11/15/03 490,000 469,788
Illinois DFA IDR Refunding - Great Plains
Hotel Corporation of Illinois Project,
7.50%, Due 4/01/16 495,000 496,143
Illinois DFA MFHR - Town and Garden
Apartments Project, 7.20%, Due 9/01/08 (c) 2,250,000 2,297,813
Illinois DFA Revenue - Community
Rehabilitation Providers Project, 5.00%,
Due 7/01/04 1,235,000 1,165,531
Illinois Health Facilities Authority Revenue
Refunding - Bohemian-Tabor Hills Project,
5.90%, Due 11/15/21 1,700,000 1,510,875
Illinois Health Facilities Authority Revenue
Refunding - Lifelink Corporation Obligated
Group Project, 5.95%, Due 2/15/21 2,000,000 1,677,500
Southwestern Illinois Development Authority
Revenue - Anderson Hospital Project:
5.25%, Due 8/15/01 390,000 386,100
5.25%, Due 8/15/03 435,000 421,406
5.25%, Due 8/15/04 460,000 439,875
---------
10,102,993
INDIANA 4.5%
Anderson, Indiana EDR Refunding and
Improvement - Anderson University Project,
5.05%, Due 10/01/03 2,930,000 2,867,737
Indiana Health Facility Financing Authority
Revenue - Hamilton Communities, Inc.
Project, 6.00%, Due 1/01/10 2,800,000 2,530,500
Indianapolis, Indiana EDR MFHR - Post Pointe
Apartments Project, 8.20%, Due 3/01/01 $ 145,000 $ 144,565
---------
5,542,802
IOWA 1.8%
Harlan, Iowa Revenue - American Baptist
Homes of the Midwest - Baptist Memorial
Home Project, 5.875%, Due 5/15/23 920,000 745,200
Ottumwa, Iowa Hospital Facility Revenue
Refunding and Improvement - Ottumwa
Regional Health Center, Inc. Project, 6.00%,
Due 10/01/18 25,000 21,938
Ottumwa, Iowa Revenue Refunding - Regional
Retirement Living Project, 5.90%, Due 2/15/24 1,740,000 1,463,775
---------
2,230,913
KANSAS 1.7%
Topeka, Kansas Industrial Revenue Refunding -
Reser's Fine Foods, Inc. Project:
5.00%, Due 4/01/01 300,000 296,532
5.20%, Due 4/01/03 300,000 291,375
5.30%, Due 4/01/04 300,000 289,125
Wathena, Kansas IDR - Skyjack Equipment,
Inc. Project:
5.00%, Due 5/01/01 85,000 84,044
5.15%, Due 5/01/02 390,000 382,200
5.25%, Due 5/01/03 130,000 126,425
5.40%, Due 5/01/04 345,000 333,356
5.50%, Due 5/01/05 335,000 321,600
---------
2,124,657
KENTUCKY 1.3%
Jefferson County, Kentucky Health Facilities
Revenue Refunding - Beverly Enterprises, Inc.
Project, 5.40%, Due 5/01/03 430,000 414,412
Kenton County, Kentucky Airport Board Special
Facilities Revenue - Mesaba Aviation, Inc.
Project, 6.00%, Due 7/01/05 985,000 962,838
Kentucky EDFA Hospital System Refunding and
Improvement Revenue - Appalachian Regional
Healthcare, Inc. Project, 5.10%, Due 10/01/03 250,000 238,438
---------
1,615,688
LOUISIANA 1.2%
Hodge, Louisiana Utility Revenue - Stone
Container Corporation Project, 9.00%,
Due 3/01/10 100,000 103,154
West Feliciana Parish, Louisiana PCR - Gulf
States Utilities Company III Project, 7.70%,
Due 12/01/14 1,250,000 1,321,875
---------
1,425,029
MARYLAND 0.8%
Baltimore County, Maryland IDR -
Barre-National, Inc. Equipment Project,
6.875%, Due 7/01/09 1,200,000 1,015,500
MASSACHUSETTS 4.6%
Massachusetts Development Finance Agency
Revenue Health Care Facility Alliance,
6.50%, Due 7/01/03 1,000,000 970,000
Massachusetts Health and EFA Revenue -
Saints Memorial Medical Center Project,
5.50%, Due 10/01/02 2,680,000 2,599,600
Massachusetts Industrial Finance Agency
Health Care Facility Revenue - Metro
Health Foundation of Massachusetts, Inc.
Project, 6.25%, Due 12/01/03 1,420,000 1,364,975
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
STRONG SHORT-TERM HIGH YIELD MUNICIPAL FUND (continued)
- ------------------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Massachusetts Industrial Finance Agency
Revenue - Institute for Developmental
Disabilities Project, 9.25%, Due 6/01/09 $ 725,000 $ 726,812
---------
5,661,387
MINNESOTA 3.6%
Burnsville, Minnesota CDR Refunding -
Holiday Inn Project, 5.875%, Due 4/01/08 1,430,000 1,404,975
Maplewood, Minnesota Health Care Facility
Revenue - HealthEast Project:
5.70%, Due 11/15/02 1,000,000 970,000
5.80%, Due 11/15/03 1,400,000 1,344,000
St. Paul, Minnesota Housing and Redevelopment
Authority Hospital Revenue - HealthEast
Project, 4.75%, Due 11/01/01 750,000 720,938
---------
4,439,913
MISSOURI 1.8%
Columbia, Missouri IDR - American Air Filter
Company, Inc. Project, 7.45%, Due 7/01/04 1,105,000 1,105,630
Ellisville, Missouri IDA IDR Refunding -
Gambrill Gardens Project:
4.80%, Due 6/01/02 110,000 106,700
5.10%, Due 6/01/05 125,000 117,031
5.20%, Due 6/01/06 135,000 125,212
Saline County, Missouri IDA Health Facilities
Revenue - John Fitzgibbon Memorial
Hospital, Inc. Project, 5.75%, Due 12/01/03 840,000 795,900
---------
2,250,473
NEBRASKA 0.2%
Scottsbluff, Nebraska CDR - WSL-RBJ, A
Minnesota LP Project, 8.75%, Due 11/01/06 275,000 268,125
NEW HAMPSHIRE 0.8%
New Hampshire Higher Educational and
Health Facilities Authority Revenue -
New England College Project, 5.375%,
Due 3/01/05 1,000,000 956,250
NEW MEXICO 1.3%
Santa Fe County, New Mexico Project
Revenue - El Castillo Retirement Residences
Project, 5.80%, Due 5/15/18 (c) 1,835,000 1,550,575
NEW YORK 1.7%
Monroe County, New York IDR Agency -
Empire Sports Project, 6.50%, Due 3/01/08 1,105,000 1,058,038
Rockland County, New York Industrial
Development Agency Civic Facility
Revenue - Dominican College Project,
5.50%, Due 5/01/02 570,000 558,600
Tompkins County, New York IDR Agency
Life Care Community - Kendal at
Ithaca, Inc. Project:
7.25%, Due 6/01/03 90,000 90,337
7.625%, Due 6/01/09 445,000 442,219
---------
2,149,194
NORTH CAROLINA 1.0%
Fletcher, North Carolina First Mortgage
Housing Revenue - Avery's View Retirement
Facilities, Inc. Project, 8.00%, Due 3/01/10 1,000,000 1,020,000
North Carolina Medical Care Commission
Health Care Facilities First Mortgage
Revenue - DePaul Community Facilities
Project, 5.75%, Due 1/01/03 210,000 202,125
---------
1,222,125
OHIO 5.7%
Cleveland, Ohio Airport Special Revenue
Refunding - Continental Airlines, Inc.
Project, 5.25%, Due 12/01/02 (c) $ 6,475,000 $ 6,313,125
Cuyahoga County, Ohio MFHR - The Park
Lane Apartments Project, 7.70%, Due 7/01/02 210,000 207,637
Dayton, Ohio Special Facilities Revenue -
AFCO Cargo Day LLC Project, 5.875%,
Due 4/01/04 500,000 481,875
---------
7,002,637
OKLAHOMA 0.6%
Leflore County, Oklahoma Hospital Authority
Hospital Revenue:
5.05%, 6/01/01 205,000 201,413
5.25%, 6/01/02 235,000 227,950
5.45%, 6/01/03 260,000 248,950
---------
678,313
PENNSYLVANIA 6.1%
Bucks County, Pennsylvania IDA CDR - Attleboro
Associates, Ltd. Nursing Facility Project, 8.00%,
Due 12/01/05 1,135,000 1,177,563
Clarion County, Pennsylvania IDA Health
Facilities Revenue Refunding - Beverly
Enterprises, Inc. Project, 5.50%, Due 5/01/03 595,000 574,919
Dauphin County, Pennsylvania Subordinated
Office and Parking Revenue - River Front
Office Center Project, 5.35%, Due 1/01/02 395,000 388,087
Harrisburg, Pennsylvania Authority Office and
Parking Revenue, 5.25%, Due 5/01/02 820,000 804,625
Pennsylvania EDFA Qualified Residential Rent
Project Revenue - RSI Properties/Butler
LLC Project, 7.00%, Due 9/01/02 (Defaulted
Effective 9/01/99) 300,000 240,000
Pennsylvania EDFA Qualified Residential Rent
Project Revenue - RSI Properties/Greensburg
LLC Project, 7.00%, Due 9/01/02 (Defaulted
Effective 9/01/99) 300,000 240,000
Philadelphia, Pennsylvania Hospitals and
Higher EFA Revenue - Chestnut Hill Hospital
Project, 6.50%, Due 11/15/22 1,500,000 1,338,750
Philadelphia, Pennsylvania Hospitals and Higher
EFA Revenue - Temple University Children's
Medical Center Project:
4.40%, Due 6/15/01 200,000 195,500
4.55%, Due 6/15/02 470,000 452,375
4.65%, Due 6/15/03 490,000 464,275
Westmoreland County, Pennsylvania IDA
Health Care Facilities Revenue Refunding -
Redstone Presbyterian Senior Care Obligated
Group Project, 5.90%, Due 11/15/21 1,915,000 1,615,781
---------
7,491,875
SOUTH DAKOTA 0.3%
Lincoln County, South Dakota Revenue
Refunding - American Baptist Homes of the
Midwest-Trail Ridge Project, 5.875%,
Due 11/15/21 445,000 373,244
TEXAS 7.4%
DeSoto, Texas IDA IDR - Wintergreen
Commercial Partnership Project, 7.00%,
Due 1/01/17 1,378,873 1,335,783
Jefferson County, Texas Health Facilities
Development Corporation Hospital
Revenue - Baptist Health Care System Project,
8.875%, Due 6/01/21 5,745,000 5,745,000
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) February 29, 2000 (Unaudited)
- ------------------------------------------------------------------------------------------
STRONG SHORT-TERM HIGH YIELD MUNICIPAL FUND (continued)
- ------------------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Lubbock, Texas Health Facilities Development
Corporation First Mortgage Revenue -
Carillon, Inc. Project, 5.75%, Due 7/01/29 (c) $ 2,000,000 $ 1,945,000
---------
9,025,783
VERMONT 2.0%
Vermont Educational and Health Buildings
Financing Agency Revenue - Vermont Council
of Developmental and Mental Health Project,
6.20%, Due 12/15/05 1,885,000 1,804,887
Vermont Educational and Health Buildings
Financing Agency Revenue Health Care
Facility - Copley Manor Project, 5.40%,
Due 4/01/06 710,000 659,413
---------
2,464,300
VIRGINIA 1.2%
Hampton, Virginia Redevelopment and
Housing Authority First Mortgage Revenue
Refunding - Olde Hampton Project, 6.00%,
Due 7/01/03 1,210,000 1,176,725
Virginia Small Business Financing Authority
IDR - Albion Enterprises LLC Project, 6.00%,
Due 1/01/02 250,000 245,937
---------
1,422,662
WEST VIRGINIA 0.1%
Harrison County, West Virginia CDR
Refunding - Kmart Corporation Project,
7.625%, Due 12/01/04 80,000 82,400
WISCONSIN 4.6%
Madison, Wisconsin IDR - McCaughey
Development Association Project, 5.875%,
Due 4/01/10 1,010,000 926,675
Wisconsin Health and EFA Revenue - Attic
Angel Obligation Group Project, 6.00%,
Due 11/15/28 1,000,000 812,500
Wisconsin Health and EFA Revenue - Divine
Savior Hospital, Inc. Project:
4.15%, Due 6/01/01 210,000 206,062
4.30%, Due 6/01/02 220,000 212,575
4.45%, Due 6/01/03 225,000 214,594
4.60%, Due 6/01/04 240,000 225,900
Wisconsin Health and EFA Revenue - FH
Healthcare Development, Inc. Project,
5.00%, Due 11/15/02 1,360,000 1,307,300
Wisconsin Health and EFA Revenue - Kenosha
Hospital and Medical Center Project,
4.50%, Due 5/15/02 560,000 548,800
Wisconsin Health and EFA Revenue - Lutheran
Home Project, 7.00%, Due 9/01/25 30,000 30,000
Wisconsin Health and EFA Revenue - Oakwood
Project, 5.90%, Due 8/15/28 1,565,000 1,214,831
---------
5,699,237
WYOMING 1.0%
Teton County, Wyoming Hospital District
Hospital Revenue Refunding and
Improvement, 4.85%, Due 12/01/02 1,265,000 1,215,981
- ------------------------------------------------------------------------------------------
Total Municipal Bonds (Cost $108,199,155) 102,323,269
- ------------------------------------------------------------------------------------------
VARIABLE RATE PUT BONDS 7.4%
FLORIDA 1.6%
St. John's County, Florida IDA IDR Refunding -
Vicar's Landing Project, 5.125%, Due 2/15/17
(Putable at $100 and Rate Reset
Effective 2/15/04) 2,000,000 1,900,000
NEW JERSEY 2.3%
New Jersey EDA Senior Mortgage Revenue
Refunding EXTRAS - Arbor Glen of
Bridgewater Project, 5.375%, Due 5/15/32
(Putable at $100 and Rate Reset Effective
5/15/04) $ 3,000,000 $ 2,868,750
TENNESSEE 1.9%
Shelby County, Tennessee Health, Educational
and Housing Facility Board Health Care
Facilities Revenue EXTRAS - Kirby Pines
Retirement Community Project, 5.50%,
Due 11/15/27 (Putable at $100 and Rate
Reset Effective 11/15/02) 2,450,000 2,382,625
TEXAS 1.6%
Abilene, Texas Health Facilities Development
Corporation Retirement Facilities Revenue
EXTRAS - Sears Methodist Retirement
System Obligated Group Project, 5.25%,
Due 11/15/28 (Putable at $100 and Rate
Reset Effective 11/15/03) 2,025,000 1,931,344
- ---------------------------------------------------------------------------------------------------------------------------
Total Variable Rate Put Bonds (Cost $9,475,000) 9,082,719
- ---------------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (A) 6.2%
MUNICIPAL BONDS 1.4%
KANSAS 0.4%
Lawrence, Kansas CDR Refunding - Holiday
Inn Project, 7.00%, Due 7/01/00 190,000 190,300
Manhattan, Kansas CDR Refunding - Holiday
Inn Project, 7.00%, Due 7/01/00 190,000 190,300
Topeka, Kansas Industrial Revenue Refunding -
Reser's Fine Foods, Inc. Project, 4.75%,
Due 4/01/00 100,000 99,945
---------
480,545
MARYLAND 0.1%
Howard County, Maryland IDR Refunding -
Keebler Company Project, 5.95%, Due 3/01/00 65,000 65,000
MINNESOTA 0.4%
St. Paul, Minnesota Housing and Redevelopment
Authority Hospital Revenue - HealthEast
Project, 4.60%, Due 11/01/00 500,000 492,085
MISSOURI 0.1%
Ellisville, Missouri IDA IDR Refunding -
Gambrill Gardens Project, 4.50%, Due 6/01/00 100,000 99,637
MONTANA 0.1%
Crow Finance Authority Tribal Purpose
Revenue, 4.75%, Due 10/01/00 150,000 150,419
OKLAHOMA 0.1%
Leflore County, Oklahoma Hospital Authority
Hospital Revenue, 4.90%, 6/01/00 185,000 184,319
WISCONSIN 0.2%
Wisconsin Health and EFA Revenue - Divine
Savior Hospital, Inc. Project, 3.90%,
Due 6/01/00 200,000 199,196
---------
Total Municipal Bonds 1,671,201
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
STRONG SHORT-TERM HIGH YIELD MUNICIPAL FUND (continued)
- ---------------------------------------------------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
VARIABLE RATE PUT BONDS 2.4%
ARIZONA
Maricopa County, Arizona IDA IDR - Borden,
Inc. Project, 4.39%, Due 10/01/12 (Putable
at $100 and Rate Reset Effective 10/01/00) $3,000,000 $ 2,968,500
MUNICIPAL MONEY MARKET FUNDS 2.4%
MULTIPLE STATES
Strong Municipal Money Market Fund (d) 3,000,000 3,000,000
- ---------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments(Cost $7,621,528) 7,639,701
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Total Investments in Securities (Cost $125,295,683) 97.0% 119,045,689
Other Assets and Liabilities, Net 3.0% 3,703,553
- ---------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $122,749,242
===========================================================================================================================
<CAPTION>
FUTURES
- ---------------------------------------------------------------------------------------------------------------------------
Underlying
Expiration Face Amount Unrealized
Date at Value Depreciation
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Sold:
95 Municipal Bond Futures 6/00 $8,784,531 $109,844
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
STRONG SHORT-TERM MUNICIPAL BOND FUND
Shares or
Principal Value
Amount (Note 2)
- ---------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS 73.5%
ALABAMA 1.1%
Birmingham, Alabama Airport Authority
Airport Revenue Refunding, 5.25%, Due
7/01/03 $3,070,000 $3,089,187
ARIZONA 0.3%
Maricopa County, Arizona IDA MFHR -
Mercy Bond Properties Arizona I-A, 5.20%,
Due 1/01/04 700,000 696,500
CALIFORNIA 0.5%
Los Angeles, California Community College
COP, 6.00%, Due 8/15/20 1,455,000 1,465,912
COLORADO 2.5%
Arapahoe County, Colorado E-470 Public
Highway Authority Capital Improvement
Trust Fund Highway Revenue, Zero %,
Due 8/31/03 500,000 418,750
Castle Rock Ranch, Colorado Public
Improvements Authority Public
Facilities Revenue:
5.70%, Due 12/01/06 1,000,000 1,023,750
5.90%, Due 12/01/03 1,475,000 1,517,406
6.10%, Due 12/01/05 2,780,000 2,894,675
Eaglebend, Colorado Affordable Housing
Corporation MFHR Refunding, 5.45%,
Due 7/01/02 695,000 686,313
Miners Mesa, Colorado Commercial
Metropolitan District GO, 6.75%,
Due 12/01/02 335,000 331,231
-------------
6,872,125
CONNECTICUT 0.5%
Connecticut IDA - The Olympic Hotel
Corporation Project, 7.125%, Due 8/01/03 1,339,260 1,312,475
DISTRICT OF COLUMBIA 1.1%
District of Columbia Hospital Revenue
Refunding - Medlantic Healthcare Group,
Inc. Project, 6.50%, Due 8/15/02 $2,925,000 $ 3,031,031
FLORIDA 3.5%
Capital Projects Finance Authority Solid
Waste Disposal Revenue Capital Projects
Loan Program - Peerless Dade, Inc. Project,
7.50%, Due 11/01/18 3,000,000 2,775,000
Duval County, Florida School District GO
Refunding, 6.00%, Due 8/01/03 1,000,000 1,037,500
Florida Housing Finance Agency MFMR -
Hammocks Place Project, 6.25%,
Due 12/01/06 2,000,000 2,044,660
Miami Beach, Florida Redevelopment Agency
Incremental Tax Revenue, 9.125%,
Due 12/01/04 3,390,000 3,627,300
--------------
9,484,460
GEORGIA 2.8%
Athens-Clarke County, Georgia Residential Care
Facilities for the Elderly Authority Revenue -
Wesley Woods of Athens, Inc. Project,
5.30%, Due 10/01/01 1,000,000 983,750
Columbus, Georgia Development Authority
Revenue Refunding - Jordan Company
Project, 5.50%, Due 9/01/09 (Mandatory
Put at $100 on 9/01/01) 1,205,000 1,205,807
George L. Smith II Georgia World Congress
Center Authority Revenue Refunding - Domed
Stadium Project, 7.875%, Due 7/01/20
(Pre-Refunding at $102 on 7/01/00) 5,225,000 5,389,222
--------------
7,578,779
ILLINOIS 1.7%
Illinois EFA Revenue - Lewis University
Project, 5.30%, Due 10/01/04 1,390,000 1,379,575
Illinois Health Facilities Authority Revenue -
Covenant Retirement Communities Project,
7.60%, Due 12/01/12 750,000 791,250
Naperville, DuPage County and Will County,
Illinois EDR Refunding - Illinois Hospital
and Health Systems Association Project,
5.70%, Due 5/01/04 2,275,000 2,280,688
--------------
4,451,513
KENTUCKY 5.8%
Mount Sterling, Kentucky League of Cities
Funding Trust Lease Program Revenue,
5.625%, Due 3/01/03 3,250,000 3,310,937
Pendleton County, Kentucky Multi-County
Lease Revenue - Kentucky Association of
Counties Leasing Trust Program, 6.50%,
Due 3/01/19 5,000,000 5,118,750
Trimble County, Kentucky PCR, 7.625%,
Due 11/01/20 7,000,000 7,265,440
--------------
15,695,127
LOUISIANA 1.9%
St. Charles Parish, Louisiana PCR - Union
Carbide, Inc. Project, 7.35%, Due 11/01/22 5,000,000 5,143,750
MAINE 2.1%
Maine Educational Loan Marketing
Corporation Student Loan Revenue
Refunding, 6.90%, Due 11/01/03 2,445,000 2,490,844
</TABLE>
21
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
STRONG SHORT-TERM MUNICIPAL BOND FUND (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Value
Amount (Note 2)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Maine Finance Authority Electric Rate
Stabilization Revenue Refunding -
Penobscot Energy Recovery Company
LP Project, 5.20%, Due 7/01/18 $3,335,000 $ 3,214,106
--------------
5,704,950
MARYLAND 1.9%
Baltimore, Maryland COP Refunding - Board
of Education Administrative Headquarters/
Municipal Capital Projects:
4.55%, Due 4/01/01 1,000,000 1,002,050
4.65%, Due 4/01/02 1,975,000 1,972,531
4.75%, Due 4/01/03 2,065,000 2,062,419
--------------
5,037,000
MASSACHUSETTS 5.4%
Massachusetts Education Loan Authority
Education Loan Revenue, 7.45%, Due 1/01/02 955,000 969,841
Massachusetts Health and EFA Competitive
Lease Program - Whitehead Institute for
Biomedical Research Project, 4.595%,
Due 10/15/03 6,765,394 6,790,765
Massachusetts Industrial Finance Agency
Refunding Revenue - Emerson College
Issue, 8.50%, Due 1/01/03 2,500,000 2,640,625
Massachusetts Industrial Finance Agency
Water Treatment Revenue - Massachusetts-
American Hingham Project, 6.25%,
Due 12/01/10 4,190,000 4,273,800
--------------
14,675,031
MICHIGAN 1.8%
Flint, Michigan Hospital Building Authority
Revenue Refunding - Hurley Medical
Center Project:
5.75%, Due 7/01/03 2,355,000 2,310,844
6.00%, Due 7/01/04 1,005,000 986,156
6.00%, Due 7/01/05 510,000 496,612
Flint, Michigan Hospital Building Authority
Revenue Rental - Hurley Medical Center
Project, 5.00%, Due 7/01/03 1,050,000 1,004,062
--------------
4,797,674
MINNESOTA 4.0%
Maplewood, Minnesota Health Care Facility
Revenue - HealthEast Project, 5.70%,
Due 11/15/02 1,740,000 1,687,800
St. Paul, Minnesota Housing and Redevelopment
Authority Hospital Revenue Refunding -
HealthEast Project, 6.625%, Due 11/01/17 6,250,000 5,546,875
Woodbury, Minnesota Lease Revenue -
Minnesota Math and Science Academy
Project, 5.50%, Due 11/01/28 (Putable at
$100 and Rate Reset Effective 5/01/02) 3,555,000 3,488,344
--------------
10,723,019
MISSISSIPPI 1.7%
Mississippi Higher Education Assistance
Corporation Student Loan Revenue:
5.60%, Due 9/01/04 2,505,000 2,533,181
5.80%, Due 9/01/06 2,050,000 2,073,062
--------------
4,606,243
MISSOURI 0.7%
Springfield, Missouri Land Clearance
Redevelopment Authority Industrial Revenue
Refunding - University Plaza Project, 6.30%,
Due 10/01/06 1,790,000 1,783,288
NEVADA 0.5%
Nevada Housing Division SFMR, 5.20%,
Due 4/01/30 1,500,000 1,477,500
NEW HAMPSHIRE 0.1%
New Hampshire IDA Industrial Facilities
Revenue - Permattach Tool Project, 7.70%,
Due 12/01/01 $ 225,000 $ 229,707
NEW JERSEY 0.3%
New Jersey Health Care Facilities Finance
Authority Revenue - Southern Ocean County
Hospital Project, 5.75%, Due 7/01/01 700,000 698,250
NEW YORK 2.7%
Albany, New York Housing Authority Tax
Credit - Lark Drive Associates LP Project,
5.25%, Due 6/01/01 3,300,000 3,316,500
New Rochelle, New York Municipal Housing
Authority Mortgage Revenue, 4.70%,
Due 12/01/03 1,315,000 1,288,700
New York Environmental Facilities Corporation
State Water Revolving Fund PCR - Pilgrim
State Sewage Treatment Project, 5.625%,
Due 3/15/04 1,000,000 1,025,000
New York, New York GO, 5.875%, Due 8/01/03 1,500,000 1,541,250
--------------
7,171,450
NORTH CAROLINA 1.3%
North Carolina Housing Finance Agency
Home Ownership Revenue, 4.55%,
Due 1/01/24 3,605,000 3,514,875
OHIO 4.1%
Akron, Ohio COP - Akron Municipal Baseball
Stadium Project:
Zero %, Due 12/01/01 1,000,000 916,250
Zero %, Due 12/01/02 (Rate Reset
Effective 12/01/01) 1,240,000 1,133,050
Cleveland, Ohio City School District Energy
Conservation Improvement GO:
6.53%, Due 3/15/01 690,000 703,276
6.53%, Due 9/15/01 715,000 732,875
6.53%, Due 3/15/02 740,000 761,275
6.53%, Due 9/15/02 760,000 787,550
6.53%, Due 3/15/03 785,000 815,419
6.53%, Due 9/15/03 815,000 850,656
6.53%, Due 3/15/04 840,000 877,800
6.53%, Due 9/15/04 865,000 908,250
Montgomery County, Ohio Health Care
Facilities Revenue Refunding - Friendship
Village of Dayton Project, 5.15%, Due 2/01/03 1,370,000 1,323,762
Montgomery County, Ohio Health Care
Facilities Revenue Refunding EXTRAS -
Friendship Village of Dayton Project, 5.375%,
Due 2/01/22 (Putable at $100 on 2/01/03) 1,050,000 1,018,500
Wood County, Ohio IDR - Abbey Etna Machine
Company Project, 7.625%, Due 7/01/01 285,000 287,138
--------------
11,115,801
PENNSYLVANIA 12.1%
Horizon Hospital System Authority Hospital
Revenue, 5.40%, Due 5/15/01 1,150,000 1,142,812
Pennsylvania Housing Finance Agency SFMR:
4.50%, Due 4/01/28 7,000,000 6,772,500
4.80%, Due 10/01/22 5,300,000 5,180,750
6.875%, Due 10/01/24 6,000,000 6,165,000
Philadelphia, Pennsylvania Hospitals and
Higher EFA Revenue - Chestnut Hill Hospital
Project, 6.50%, Due 11/15/22 2,250,000 2,008,125
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
STRONG SHORT-TERM MUNICIPAL BOND FUND (continued)
- ---------------------------------------------------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Southern Chester County, Pennsylvania
Health and Higher Education Authority
Mortgage Revenue - Jenner's Pond
Retirement Community Project, 5.15%,
Due 11/01/03:
Series 1998 $7,500,000 $ 7,115,625
Series 1999 4,500,000 4,269,375
--------------
32,654,187
PUERTO RICO 1.0%
Commonwealth of Puerto Rico Tax-Exempt
Lease Certificates, 5.10%, Due 4/01/04 2,572,380 2,559,518
SOUTH DAKOTA 0.5%
South Dakota EDFA EDR Refunding Pooled
Loan Program - Technical Ordinance Project,
5.75%, Due 4/01/07 1,370,000 1,405,963
TENNESSEE 2.0%
Memphis, Tennessee Health, Educational and
MFHR Facility Board Mortgage Refunding -
Edgewater Terrace Apartments Project,
7.375%, Due 1/20/27 3,960,000 4,202,550
Tennessee Housing Development Agency -
Homeownership Program Project, Zero %,
Due 7/01/05 1,585,000 1,186,769
--------------
5,389,319
TEXAS 6.6%
Brazos, Texas Higher Education Authority,
Inc. Student Loan Revenue Refunding, 5.95%,
Due 6/01/02 3,005,000 3,076,369
Falcons Lair, Texas Utility and Reclamation
District COP, 7.10%, Due 10/15/06 5,855,000 5,591,525
Farmers Branch, Texas IDC IDR - Thermalloy,
Inc. Project, 6.475%, Due 4/24/01:
Series A 235,000 235,588
Series B 235,000 235,588
Harris County, Texas HFC MFHR - Bryant
Development Project, 6.5625%, Due 9/01/05 504,629 510,306
Hidalgo County, Texas Health Services
Corporation Hospital Revenue - Mission
Hospital, Inc. Project, 5.75%, Due 8/15/01 930,000 925,350
Lancaster, Texas HFC MFHR - Intervest-
Lancaster Project:
6.30%, Due 6/15/04 2,925,000 2,935,969
6.956%, Due 6/15/04 377,812 379,229
Odessa, Texas Housing Authority MFMR -
Section 8 Assisted Project:
5.875%, Due 10/01/03 975,000 949,406
6.375%, Due 10/01/11 2,735,000 2,560,644
Robstown, Texas Combination Tax and Limited
Pledge Revenue COP, 7.75%, Due 10/01/12
(Pre-Refunding at $100 on 10/01/02) 490,000 524,300
--------------
17,924,274
UTAH 1.8%
Eagle Mountain, Utah Water and Sewer
Revenue BAN, 5.375%, Due 9/01/01 4,910,000 4,854,762
WASHINGTON 0.5%
Walla Walla, Washington Housing Authority
Revenue - Wilbur Manor Project, 6.25%,
Due 12/01/11 1,365,000 1,293,337
WISCONSIN 0.7%
Wisconsin Housing and EDA Home Ownership
Revenue, 5.30%, Due 9/01/20 2,000,000 1,985,000
- -------------------------------------------------------------------------------
Total Municipal Bonds (Cost $201,357,294) 198,422,007
- -------------------------------------------------------------------------------
VARIABLE RATE PUT BONDS 14.2%
ARIZONA 2.2%
Scottsdale, Arizona IDA First Mortgage
Revenue Refunding - Westminster Village,
Inc. Project:
5.25%, Due 6/01/16 (Mandatory Put at $100
on 6/01/04) $3,300,000 $ 3,300,330
6.00%, Due 6/01/17 (Putable at $100 and Rate
Reset Effective 12/01/04) 2,700,000 2,700,000
---------------
6,000,330
CALIFORNIA 0.7%
Sacramento County, California MFHR
Refunding - Fairways II Apartments Project,
5.35%, Due 8/01/25 (Mandatory Put at $100
on 8/01/05) 1,895,000 1,909,213
GEORGIA 2.1%
Atlanta, Georgia Urban Residential Finance
Authority MFHR Refunding - Ford Factory
Square Apartments Project, 6.00%, Due
12/01/30 (Mandatory Put at $100 on 12/01/02) 5,655,000 5,584,312
MASSACHUSETTS 1.2%
Massachusetts Development Finance Agency
First Mortgage Revenue - LaSell Village
Project, 5.625%, Due 12/01/28 (Putable at
$100 and Rate Reset Effective 12/01/03) 3,500,000 3,342,500
MISSOURI 0.5%
St. Louis County, Missouri IDA MFHR
Refunding - Heatherbrook Gardens Project,
5.10%, Due 3/01/05 (Mandatory Put at $100
on 3/01/02) 1,280,000 1,273,600
NEW HAMPSHIRE 1.1%
New Hampshire Business Finance Authority
PCR Refunding - United Illuminating
Company Project, 4.55%, Due 7/01/27
(Mandatory Put at $100 on 2/01/04) 3,000,000 2,943,750
SOUTH CAROLINA 0.9%
South Carolina Jobs - EDA EDR Refunding
EXTRAS - Westminster Presbyterian Center,
Inc. Project, 5.20%, Due 11/15/28 (Putable at
$100 and Rate Reset Effective 11/15/03) 2,455,000 2,344,525
TEXAS 4.4%
Bexar County, Texas HFC MFHR - Park Ridge
Apartments Project, 5.50%, Due 5/01/35
(Mandatory Put at $100 on 5/01/03) 4,775,000 4,637,719
Northwest Trails Apartment Trust Pass-Thru
Certificates, 5.25%, Due 4/01/13 (Mandatory
Put at $100 on 10/01/01) 7,425,000 7,350,750
--------------
11,988,469
VIRGINIA 1.1%
James City County, Virginia IDA Residential
Care Facility First Mortgage Revenue -
Williamsburg Landing, Inc. Project, 5.75%,
Due 3/01/26 (Putable at $100 and Rate Reset
Effective 9/01/01) 3,000,000 2,992,500
- -------------------------------------------------------------------------------
Total Variable Rate Put Bonds (Cost $38,780,750) 38,379,199
- -------------------------------------------------------------------------------
</TABLE>
23
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
STRONG SHORT-TERM MUNICIPAL BOND FUND (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENTS (a) 10.9%
MUNICIPAL BONDS 3.1%
CALIFORNIA 0.9%
California Health Facilities Financing
Authority Hospital Revenue - Downey
Community Hospital Project, 4.90%,
Due 5/15/00 $2,325,000 $2,329,580
ILLINOIS 0.2%
Illinois DFA Solid Waste Disposal Revenue -
Waste Management, Inc. Project, 7.125%,
Due 1/01/01 640,000 645,606
IOWA 0.2%
Iowa Finance Authority Mortgage Revenue
Refunding - Friendship Village Project,
4.95%, Due 11/01/00 650,000 647,329
OHIO 0.5%
Cleveland, Ohio City School District Energy
Conservation Improvement GO:
6.53%, Due 3/15/00 650,000 650,429
6.53%, Due 9/15/00 670,000 677,249
-------------
1,327,678
OREGON 0.8%
Hillsboro, Oregon Hospital Facility Authority
Revenue and Advance Refunding - Tuality
Healthcare Project, 4.80%, Due 10/01/00 2,020,000 2,022,202
TEXAS 0.1%
Farmers Branch, Texas IDC IDR - Thermalloy,
Inc. Project, Series A, 6.475%, Due 4/24/00 215,000 215,538
WASHINGTON 0.4%
Washington Health Care Facilities Authority
Revenue - Sisters of Providence Project,
5.375%, Due 10/01/00 1,200,000 1,207,920
---------
Total Municipal Bonds 8,395,853
---------
VARIABLE RATE PUT BONDS 0.5%
MICHIGAN
Michigan HDA Limited Obligation Revenue -
River Place Plaza Apartments Project, 5.50%,
Due 6/01/18 (Mandatory Put at $100
on 6/01/00) 1,315,000 1,313,790
ANNUAL VARIABLE RATE PUT BONDS 2.8%
Illinois 1.4%
Peoria County, Illinois Congregate Care
Revenue - St. Francis Woods Project, 5.625%,
Due 4/01/00 3,770,000 3,766,456
MISSOURI 1.4%
Jackson County, Missouri IDA MFHR - Pine
Valley Apartments Project, 5.625%,
Due 3/01/00 3,800,000 3,800,000
--------------
Total Annual Variable Rate Put Bonds 7,566,456
DAILY VARIABLE RATE PUT BONDS 1.9%
DISTRICT OF COLUMBIA
District of Columbia Revenue - Medlantic
Project, 4.95%, Due 3/01/00 5,000,000 5,000,000
MUNICIPAL MONEY MARKET FUNDS 2.6%
MULTIPLE STATES
Strong Municipal Money Market Fund (d) $7,150,000 $ 7,150,000
- -------------------------------------------------------------------------------
Total Short-Term Investments (Cost $29,420,636) 29,426,099
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Total Investments in Securities (Cost $269,558,680) 98.6% 266,227,305
Other Assets and Liabilities, Net 1.4% 3,730,036
- -------------------------------------------------------------------------------
Net Assets 100.0% $269,957,341
===============================================================================
</TABLE>
LEGEND
- -------------------------------------------------------------------------------
(a)Short-term investments include any security which has a remaining maturity
of less than one year.
(b)All or a portion of security is when-issued.
(c)All or a portion of security is pledged to cover margin requirements for
futures contracts.
(d)Affiliated issuer (see Note 7 of Notes to Financial Statements).
Maturity date represents actual maturity or the longer of the next put date or
interest adjustment date
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:
<TABLE>
<CAPTION>
<S> <C>
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
EXTRAS -- Extendable Rate Adjustable Securities
GO -- General Obligation
HDA -- Housing Development Authority
HDC -- Housing Development Corporation
HFA -- Housing Finance Authority
HFC -- Housing Finance Corporation
IBA -- Industrial Building Authority
IBR -- Industrial Building Revenue
IDA -- Industrial Development Authority
IDB -- Industrial Development Board
IDC -- Industrial Development Corporation
IDFA -- Industrial Development Finance Authority
IDR -- Industrial Development Revenue
IFA -- Investment Finance Authority
MFHR -- Multi-Family Housing Revenue
MFMR -- Multi-Family Mortgage Revenue
PCR -- Pollution Control Revenue
RAN -- Revenue Anticipation Notes
SFHR -- Single Family Housing Revenue
SFMR -- Single Family Mortgage Revenue
TAN -- Tax Anticipation Notes
TRAN -- Tax and Revenue Anticipation Notes
</TABLE>
24
See Notes to Financial Statements.
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
February 29, 2000 (Unaudited)
<TABLE>
<CAPTION>
(In Thousands, Except Per Share Amounts)
STRONG HIGH-YIELD STRONG STRONG SHORT-TERM STRONG SHORT-TERM
MUNICIPAL BOND MUNICIPAL HIGH YIELD MUNICIPAL BOND
FUND BOND FUND MUNICIPAL FUND FUND
<S> --------------- ------------ ----------------- ----------------
ASSETS: <C> <C> <C> <C>
Investments in Securities, at Value
Unaffiliated Issuers (Cost of $495,337, $308,881,
$122,296 and $262,409, respectively) $437,903 $279,282 $116,046 $259,077
Affiliated Issuers (Cost of $17,200, $8,200,
$3,000 and $7,150, respectively) 17,200 8,200 3,000 7,150
Receivable for Securities Sold 245 3,818 -- --
Receivable for Fund Shares Sold 10 -- 2,025 88
Interest and Dividends Receivable 9,308 4,271 1,975 4,727
Other Assets 163 80 222 50
-------- -------- -------- ---------
Total Assets 464,829 295,651 123,268 271,092
LIABILITIES:
Payable for Securities Purchased -- 13,749 -- --
Payable for Fund Shares Redeemed 62 116 -- 42
Dividends Payable 2,354 1,260 503 1,014
Accrued Operating Expenses and Other Liabilities 63 110 16 79
-------- -------- -------- --------
Total Liabilities 2,479 15,235 519 1,135
-------- -------- -------- --------
NET ASSETS $462,350 $280,416 $122,749 $269,957
======== ======== ======== ========
NET ASSETS CONSIST OF:
Capital Stock (par value and paid-in capital) $532,950 $341,887 $130,999 $288,804
Accumulated Net Realized Loss (12,930) (31,873) (1,890) (15,516)
Net Unrealized Depreciation (57,670) (29,598) (6,360) (3,331)
-------- -------- -------- --------
Net Assets $462,350 $280,416 $122,749 $269,957
======== ======== ======== ========
Capital Shares Outstanding (Unlimited Number Authorized) 51,848 32,452 12,742 28,184
NET ASSET VALUE PER SHARE $8.92 $8.64 $9.63 $9.58
======== ======== ======== ========
</TABLE>
25
See Notes to Financial Statements.
<PAGE>
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
For the Six Months Ended February 29, 2000 (Unaudited)
<TABLE>
<CAPTION>
(In Thousands)
STRONG HIGH-YIELD STRONG STRONG SHORT-TERM STRONG SHORT-TERM
MUNICIPAL BOND MUNICIPAL BOND HIGH YIELD MUNICIPAL BOND
FUND FUND MUNICIPAL FUND FUND
---------------- -------------- ----------------- -----------------
<S> <C> <C> <C> <C>
INCOME:
Interest $18,828 $10,240 $4,274 $7,856
Dividends - Unaffiliated Issuers -- 6 -- --
Dividends - Affiliated Issuers 234 95 80 217
------- ------- ------ ------
Total Income 19,062 10,341 4,354 8,073
EXPENSES:
Investment Advisory Fees 1,611 973 446 729
Custodian Fees 14 7 4 7
Shareholder Servicing Costs 224 174 35 99
Other 113 95 43 64
------- ------- ------- -------
Total Expenses before Waivers, Absorptions and
Fees Paid Indirectly by Advisor 1,962 1,249 528 899
Voluntary Expense Waivers and Absorptions by Advisor -- -- (84) --
Fees Paid Indirectly by Advisor (Note 3) (3) (3) -- --
------- ------- ------- -------
Expenses, Net 1,959 1,246 444 899
------- ------- ------- -------
NET INVESTMENT INCOME 17,103 9,095 3,910 7,174
REALIZED AND UNREALIZED GAIN (LOSS):
Net Realized Gain (Loss) on:
Investments (8,589) (4,273) (2,199) (352)
Futures Contracts 1,184 -- 465 21
------- ------- ------- -------
Net Realized Loss (7,405) (4,273) (1,734) (331)
Net Change in Unrealized Appreciation/Depreciation on:
Investments (44,197) (22,921) (3,842) (5,418)
Futures Contracts 193 -- 59 --
------- ------- ------- -------
Net Change in Unrealized Appreciation/Depreciation (44,004) (22,921) (3,783) (5,418)
------- ------- ------- -------
NET LOSS ON INVESTMENTS (51,409) (27,194) (5,517) (5,749)
------- ------- ------- -------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($34,306) ($18,099) ($1,607) $1,425
======= ======= ====== ======
</TABLE>
26
See Notes to Financial Statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(In Thousands)
STRONG HIGH-YIELD MUNICIPAL
BOND FUND STRONG MUNICIPAL BOND FUND
--------------------------------- ----------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
Feb. 29, 2000 Aug. 31, 1999 Feb. 29, 2000 Aug. 31, 1999
---------------- -------------- ---------------- --------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
OPERATIONS:
Net Investment Income $ 17,103 $ 38,005 $ 9,095 $ 19,010
Net Realized Gain (Loss) (7,405) (3,099) (4,273) 1,016
Net Change in Unrealized Appreciation/Depreciation (44,004) (42,223) (22,921) (25,676)
-------- -------- -------- --------
Net Decrease in Net Assets Resulting from Operations (34,306) (7,317) (18,099) (5,650)
DISTRIBUTIONS:
From Net Investment Income (17,103) (38,005) (9,095) (19,010)
From Net Realized Gains -- (3,100) -- --
-------- -------- -------- --------
Total Distributions (17,103) (41,105) (9,095) (19,010)
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 125,097 502,307 60,662 275,238
Proceeds from Reinvestment of Distributions 13,656 31,469 7,576 14,881
Payment for Shares Redeemed (260,372) (517,242) (130,840) (182,161)
-------- -------- -------- --------
Net Increase (Decrease) in Net Assets from
Capital Share Transactions (121,619) 16,534 (62,602) 107,958
-------- -------- -------- --------
TOTAL INCREASE (DECREASE) IN NET ASSETS (173,028) (31,888) (89,796) 83,298
NET ASSETS:
Beginning of Period 635,378 667,266 370,212 286,914
-------- -------- -------- --------
End of Period $462,350 $635,378 $280,416 $370,212
======== ======== ======== ========
TRANSACTIONS IN SHARES OF THE FUND:
Sold 13,421 48,707 6,749 27,799
Issued in Reinvestment of Distributions 1,450 3,057 839 1,507
Redeemed (27,911) (50,294) (14,667) (18,591)
-------- -------- -------- --------
Net Increase (Decrease) in Shares of the Fund (13,040) 1,470 (7,079) 10,715
======== ======== ======== ========
</TABLE>
27
See Notes to Financial Statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(In Thousands)
STRONG SHORT-TERM HIGH YIELD STRONG SHORT-TERM MUNICIPAL
MUNICIPAL FUND BOND FUND
---------------------------------- --------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
Feb. 29, 2000 Aug. 31, 1999 Feb. 29, 2000 Aug. 31, 1999
---------------- -------------- ---------------- -------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
OPERATIONS:
Net Investment Income $ 3,910 $ 7,483 $ 7,174 $ 13,391
Net Realized Loss (1,734) (73) (331) (2,632)
Net Change in Unrealized
Appreciation/Depreciation (3,783) (3,120) (5,418) (4,117)
-------- -------- -------- --------
Net Increase (Decrease) in Net Assets
Resulting from Operations (1,607) 4,290 1,425 6,642
DISTRIBUTIONS FROM NET INVESTMENT INCOME (3,910) ( 7,483) (7,176) (13,391)
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 53,637 210,900 69,346 277,898
Proceeds from Reinvestment of Distributions 3,392 5,751 6,388 11,311
Payment for Shares Redeemed (110,460) (132,398) (124,765) (168,516)
-------- -------- -------- --------
Net Increase (Decrease) in Net Assets from
Capital Share Transactions (53,431) 84,253 (49,031) 120,693
-------- -------- -------- --------
TOTAL INCREASE (DECREASE) IN NET ASSETS (58,948) 81,060 (54,782) 113,944
NET ASSETS:
Beginning of Period 181,697 100,637 324,739 210,795
-------- -------- -------- --------
End of Period $122,749 $181,697 $269,957 $324,739
======== ======== ======== ========
TRANSACTIONS IN SHARES OF THE FUND:
Sold 5,466 20,836 7,178 27,952
Issued in Reinvestment of Distributions 344 568 660 1,137
Redeemed (11,259) (13,107) (12,932) (17,005)
-------- -------- -------- --------
Net Increase (Decrease) in Shares of the Fund (5,449) 8,297 (5,094) 12,084
======== ======== ======== ========
</TABLE>
28
See Notes to Financial Statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
February 29, 2000 (Unaudited)
1. ORGANIZATION
The accompanying financial statements represent the Strong Municipal Income
Funds (the "Funds"), which include the following funds, each with its own
investment objectives and policies:
- Strong High-Yield Municipal Bond Fund, Inc. (1)
- Strong Municipal Bond Fund, Inc. (1)
- Strong Short-Term High Yield Municipal Fund (a series of Strong
Municipal Funds, Inc.(1))
- Strong Short-Term Municipal Bond Fund, Inc. (1)
(1) A diversified, open-end management investment company registered under
the Investment Company Act of 1940, as amended.
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 Funds are valued at fair value
through valuations obtained by a commercial pricing service or the
mean of the bid and asked prices when no last sales price is
available. Securities for which market quotations are not readily
available are valued at fair value as determined in good faith under
consistently applied procedures established by and under the general
supervision of the Board of Directors. Securities which are purchased
within 60 days of their stated maturity are valued at amortized cost,
which approximates fair value.
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. The Funds held no restricted securities at
February 29, 2000.
(B) Federal Income and Excise Taxes and Distributions to Shareholders --
The Funds intend 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.
Net investment income or net realized gains for financial statement
purposes may differ from the characterization for federal income tax
purposes due to differences in the recognition of income and expense
items for financial statement and tax purposes. Where appropriate,
reclassifications between net asset accounts are made for such
differences that are permanent in nature.
Each Fund generally pays dividends from net investment income monthly
and distributes any net capital gains that it realizes annually.
Dividends are declared on each day the net asset value is calculated
except bank holidays.
(C) Realized Gains and Losses on Investment Transactions -- Investment
security transactions are recorded as of the trade date. Gains or
losses realized on investment transactions are determined by comparing
the identified cost of the security lot sold with the net sales
proceeds.
(D) Certain Investment Risks -- The Funds may utilize derivative
instruments including options, futures and other instruments with
similar characteristics to the extent that they are consistent with
the Funds' 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.
(E) 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. Additional securities held by the
Funds may be designated as collateral on open futures contracts. 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.
(F) Use of Estimates -- The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts in these financial statements. Actual results could differ from
those estimates.
(G) Other -- Dividend income and distributions to shareholders are recorded
on the ex-dividend date. Interest income is recorded on the accrual
basis and includes amortization of premiums and discounts.
29
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
February 29, 2000 (Unaudited)
(H) Expense Offset Arrangements -- Certain Funds pay a portion of their
custodian fees indirectly through expense offset arrangements.
Custodian fees are reduced for Funds that maintain compensating
balances in non-interest bearing accounts. The Funds could have
invested the assets used to pay for the custodian fees, had the assets
not been used in the expense offset arrangements. During the six
months ended February 29, 2000, there were no amounts paid through
expense offset arrangements for the Funds.
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 average daily
net assets: Strong Short-Term Municipal Bond Fund 0.50%, Strong Municipal
Bond Fund, Strong High-Yield Municipal Bond Fund and Strong Short-Term High
Yield Municipal Fund 0.60%. Based on the terms of the Advisory Agreements,
advisory fees and other expenses will be waived or absorbed by the Advisor
if the Fund's operating expenses exceed 2% of the average daily net assets
of the Fund. In addition, the Fund's Advisor may voluntarily waive or
absorb certain expenses at its discretion. Shareholder recordkeeping and
related service fees are based on contractually established rates for each
open and closed shareholder account. The Advisor also allocates to each
Fund certain charges or credits resulting from transfer agency banking
activities based on each Fund's level of subscription and redemption
activity. Charges allocated to the Funds by the Advisor are included in
Other Expenses in the Fund's Statement of Operations. Credits allocated by
the Advisor serve to reduce the shareholder servicing expenses incurred by
the Funds and are reported as Fees Paid Indirectly by Advisor in the Funds'
Statement of Operations. The Advisor is also compensated for certain other
services related to costs incurred for reports to shareholders.
The Funds may invest cash in money market funds sponsored and managed by
the Advisor, 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, advisory fees of each Fund are reduced
by an amount equal to advisory fees paid to the Advisor under its
investment advisory agreement with the money market funds.
Certain information regarding related party transactions, excluding the
effect of waivers and absorptions, for the six months ended February 29,
2000, is as follows:
<TABLE>
<CAPTION>
Shareholder Servicing Transfer Agency Unaffiliated
Payable to Advisor at and Other Expenses Banking Directors'
February 29, 2000 Paid to Advisor Charges/(Credits) Fees
---------------------- ----------------------- ------------------- --------------
<S> <C> <C> <C> <C>
STRONG HIGH-YIELD MUNICIPAL BOND FUND $16,457 $223,967 ($2,625) $9,593
STRONG MUNICIPAL BOND FUND 5,613 173,865 (2,556) 6,169
STRONG SHORT-TERM HIGH YIELD MUNICIPAL FUND 6,328 34,716 1,341 2,726
STRONG SHORT-TERM MUNICIPAL BOND FUND 6,356 98,665 6,156 5,525
</TABLE>
4. LINE OF CREDIT
The Strong Funds have established a line of credit agreement ("LOC") with
certain financial institutions to be used for temporary or emergency
purposes, primarily for financing redemption payments. Combined borrowings
among all participating Strong Funds are subject to a $350 million cap on
the total LOC. For individual Funds, borrowings under the LOC are limited
to either the lesser of 15% of the market value of the Fund's total assets
or any explicit borrowing limits in the Fund's prospectus. Principal and
interest of each borrowing on the LOC are due not more than 60 days after
the date of the borrowing. Borrowings under the LOC bear interest based on
prevailing market rates as defined in the LOC. A commitment fee of 0.08%
per annum is incurred on the unused portion of the LOC and is allocated to
all participating Strong Funds. At February 29, 2000, there were no
borrowings by the Funds outstanding under the LOC.
5. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of long-term securities, other than
government securities, for the six months ended February 29, 2000, were as
follows:
<TABLE>
<CAPTION>
Purchases Sales
------------- ----------------
<S> <C> <C>
STRONG HIGH-YIELD MUNICIPAL BOND FUND $42,391,219 $158,257,152
STRONG MUNICIPAL BOND FUND -- 69,716,915
STRONG SHORT-TERM HIGH YIELD MUNICIPAL FUND 1,000,000 53,888,916
STRONG SHORT-TERM MUNICIPAL BOND FUND 2,699,900 65,896,316
</TABLE>
There were no purchases or sales of long-term government securities during
the six months ended February 29, 2000.
30
<PAGE>
- --------------------------------------------------------------------------------
6. INCOME TAX INFORMATION
At February 29, 2000, the investment cost, gross unrealized appreciation
and depreciation on investments and capital loss carryovers (expiring in
varying amounts through 2007) for federal income tax purposes were as
follows:
<TABLE>
<CAPTION>
at February 29, 2000 at August 31, 1999
--------------------------------------------------------------- ------------------
Federal Tax Unrealized Unrealized Net Capital Loss
Cost Appreciation Depreciation Depreciation Carryovers
------------- -------------- -------------- ---------------- --------------
<S> <C> <C> <C> <C> <C>
STRONG HIGH-YIELD MUNICIPAL BOND FUND $512,559,818 $4,599,586 $62,056,285 $57,456,699 $ --
STRONG MUNICIPAL BOND FUND 317,080,600 1,544,413 31,142,716 29,598,303 27,596,278
STRONG SHORT-TERM HIGH YIELD MUNICIPAL FUND 125,295,683 113,936 6,363,930 6,249,994 324,695
STRONG SHORT-TERM MUNICIPAL BOND FUND 269,580,485 1,103,122 4,456,302 3,353,180 15,184,074
</TABLE>
7. INVESTMENTS IN AFFILIATES
Affiliated issuers, as defined under the Investment Company Act of 1940,
include those in which the Fund's holdings of an issuer represent 5% or
more of the outstanding voting securities of the issuer and any other
Strong Fund. A summary of transactions in the securities of these issuers
during the six months ended February 29, 2000 is as follows:
<TABLE>
<CAPTION>
Balance of Balance of Dividend
Shares Gross Gross Sales Shares Value Income
Held Purchases and Held Feb. 29, Sept. 1, 1999 -
Sept. 1, 1999 and Additions Reductions Feb. 29, 2000 2000 Feb. 29, 2000
------------- ------------- ----------- ------------- -------- ---------------
<S> <C> <C> <C> <C> <C> <C>
STRONG HIGH-YIELD MUNICIPAL BOND FUND
-------------------------------------
Strong Municipal Money Market Fund 39,100,000 91,500,000 113,400,000 17,200,000 $17,200,000 $233,916
STRONG MUNICIPAL BOND FUND
--------------------------
Strong Municipal Money Market Fund 6,500,000 55,500,000 53,800,000 8,200,000 8,200,000 95,253
STRONG SHORT-TERM HIGH YIELD MUNICIPAL FUND
-------------------------------------------
Strong Municipal Money Market Fund 9,500,000 41,000,000 47,500,000 3,000,000 3,000,000 79,767
STRONG SHORT-TERM MUNICIPAL BOND FUND
-------------------------------------
Strong Municipal Money Market Fund 10,000,000 52,800,000 55,650,000 7,150,000 7,150,000 217,185
</TABLE>
31
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
STRONG HIGH-YIELD MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Period Ended
------------------------------------------------------------------
Feb. 29, Aug. 31, Aug. 31, Aug. 31, Aug. 31, Dec. 31, Dec. 31,
Selected Per-Share Data(a) 2000(c) 1999 1998 1997 1996(d) 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 9.79 $ 10.52 $ 10.09 $ 9.45 $ 9.91 $ 9.29 $ 10.10
Income From Investment Operations:
Net Investment Income 0.29 0.58 0.59 0.61 0.44 0.69 0.71
Net Realized and Unrealized Gains (Losses) on Investments (0.87) (0.68) 0.45 0.64 (0.46) 0.62 (0.81)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (0.58) (0.10) 1.04 1.25 (0.02) 1.31 (0.10)
Less Distributions:
From Net Investment Income(b) (0.29) (0.58) (0.59) (0.61) (0.44) (0.69) (0.71)
From Net Realized Gains -- (0.05) (0.02) -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.29) (0.63) (0.61) (0.61) (0.44) (0.69) (0.71)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 8.92 $ 9.79 $ 10.52 $ 10.09 $ 9.45 $ 9.91 $ 9.29
====================================================================================================================================
Ratios and Supplemental Data
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return -6.0% -1.1% +10.5% +13.6% -0.1% +14.6% -1.0%
Net Assets, End of Period (In Millions) $ 462 $ 635 $ 667 $ 361 $ 238 $ 267 $ 108
Ratio of Expenses to Average Net Assets Without Waivers,
Absorptions and Fees Paid Indirectly by Advisor 0.7%* 0.7% 0.7% 0.7% 0.7%* 0.8% 0.8%
Ratio of Expenses to Average Net Assets 0.7%* 0.7% 0.7% 0.7% 0.7%* 0.4% 0.0%
Ratio of Net Investment Income to Average Net Assets 6.2%* 5.7% 5.7% 6.2% 6.9%* 7.1% 7.5%
Portfolio Turnover Rate 8.0% 52.5% 66.5% 92.1% 106.8% 113.8% 198.1%
</TABLE>
STRONG MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Period Ended
------------------------------------------------------------------
Feb. 29, Aug. 31, Aug. 31, Aug. 31, Aug. 31, Dec. 31, Dec. 31,
Selected Per-Share Data(a) 2000(c) 1999 1998 1997 1996(d) 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 9.37 $ 9.96 $ 9.52 $ 8.99 $ 9.52 $ 9.23 $ 10.25
Income From Investment Operations:
Net Investment Income 0.25 0.51 0.51 0.50 0.33 0.52 0.56
Net Realized and Unrealized Gains (Losses) on Investments (0.73) (0.59) 0.44 0.53 (0.53) 0.51 (1.02)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (0.48) (0.08) 0.95 1.03 (0.20) 1.03 (0.46)
Less Distributions:
From Net Investment Income(b) (0.25) (0.51) (0.51) (0.50) (0.33) (0.54) (0.56)
In Excess of Net Investment Income -- -- -- -- -- (0.20) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.25) (0.51) (0.51) (0.50) (0.33) (0.74) (0.56)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 8.64 $ 9.37 $ 9.96 $ 9.52 $ 8.99 $ 9.52 $ 9.23
====================================================================================================================================
Ratios and Supplemental Data
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return -5.2% -1.0% +10.1% +11.8% -2.1% +11.4% -4.6%
Net Assets, End of Period (In Millions) $ 280 $ 370 $ 287 $ 232 $ 247 $ 247 $ 280
Ratio of Expenses to Average Net Assets without Fees Paid
Indirectly by Advisor 0.8%* 0.7% 0.7% 0.8% 0.8%* 0.8% 0.8%
Ratio of Expenses to Average Net Assets 0.8%* 0.7% 0.7% 0.8% 0.8%* 0.8% 0.8%
Ratio of Net Investment Income to Average Net Assets 5.5%* 5.1% 5.2% 5.4% 5.4%* 5.4% 5.8%
Portfolio Turnover Rate 0.0% 22.4% 58.5% 85.0% 172.9% 513.8% 311.0%
</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) Tax-exempt for regular federal income tax purposes.
(c) For the six months ended February 29, 2000 (unaudited).
(d) In 1996, the Fund changed its fiscal year-end from December to August.
32
See Notes to Financial Statements.
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
- --------------------------------------------------------------------------------
STRONG SHORT-TERM HIGH YIELD MUNICIPAL FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Period Ended
---------------------------------
Feb. 29, Aug. 31, Aug. 31,
Selected Per-Share Data (a) 2000 (c) 1999 1998 (d)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 9.99 $ 10.17 $ 10.00
Income From Investment Operations:
Net Investment Income 0.25 0.50 0.37
Net Realized and Unrealized Gains (Losses) on Investments (0.36) (0.18) 0.17
- ---------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (0.11) 0.32 0.54
Less Distributions:
From Net Investment Income (b) (0.25) (0.50) (0.37)
- ---------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.25) (0.50) (0.37)
Net Asset Value, End of Period $ 9.63 $ 9.99 $ 10.17
===========================================================================================================================
Ratios and Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------------
Total Return -1.1% +3.2% +5.5%
Net Assets, End of Period (In Millions) $123 $182 $101
Ratio of Expenses to Average Net Assets Without Waivers and Absorptions 0.7%* 0.7% 1.0%*
Ratio of Expenses to Average Net Assets 0.6%* 0.4% 0.4%*
Ratio of Net Investment Income to Average Net Assets 5.1%* 4.9% 5.0%*
Portfolio Turnover Rate 0.7% 22.7% 8.1%
</TABLE>
STRONG SHORT-TERM MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Period Ended
----------------------------------------------------------------------
Feb. 29, Aug. 31, Aug. 31, Aug. 31, Aug. 31, Dec. 31, Dec. 31,
Selected Per-Share Data (a) 2000(c) 1999 1998 1997 1996(e) 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $9.76 $9.95 $9.82 $9.67 $9.77 $9.73 $10.36
Income From Investment Operations:
Net Investment Income 0.23 0.47 0.48 0.49 0.33 0.47 0.45
Net Realized and Unrealized Gains (Losses) on Investments (0.18) (0.19) 0.13 0.15 (0.10) 0.04 (0.62)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.05 0.28 0.61 0.64 0.23 0.51 (0.17)
Less Distributions:
From Net Investment Income (b) (0.23) (0.47) (0.48) (0.49) (0.33) (0.47) (0.45)
From Net Realized Gains -- -- -- -- -- -- (0.01)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.23) (0.47) (0.48) (0.49) (0.33) (0.47) (0.46)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $9.58 $9.76 $9.95 $9.82 $9.67 $9.77 $ 9.73
====================================================================================================================================
Ratios and Supplemental Data
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return +0.5% +2.8% +6.3% +6.7% +2.4% +5.4% -1.6%
Net Assets, End of Period (In Millions) $270 $325 $211 $165 $136 $133 $161
Ratio of Expenses to Average Net Assets 0.6%* 0.6% 0.6% 0.7% 0.7%* 0.8% 0.7%
Ratio of Net Investment Income to Average Net Assets 4.7%* 4.7% 4.8% 5.0% 5.1%* 4.8% 4.5%
Portfolio Turnover Rate 1.0% 22.7% 15.7% 26.2% 38.0% 226.8% 273.2%
</TABLE>
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund
outstanding for the entire period.
(b) Tax-exempt for regular federal income
tax purposes.
(c) For the six months ended February 29, 2000 (unaudited).
(d) For the period from November 30, 1997 (inception) to August 31, 1998.
(e) In 1996, the Fund changed its fiscal year-end from December to August.
33
See Notes to Financial Statements.
<PAGE>
NOTES
- --------------------------------------------------------------------------------
34
<PAGE>
NOTES
- --------------------------------------------------------------------------------
35
<PAGE>
NOTES
- --------------------------------------------------------------------------------
36
<PAGE>
DIRECTORS
Richard S. Strong
Marvin E. Nevins
William F. Vogt
Willie D. Davis
Stanley Kritzik
Neal Malicky
OFFICERS
Richard S. Strong, CHAIRMAN OF THE BOARD
Thomas M. Zoeller, VICE PRESIDENT
Dennis A. Wallestad, VICE PRESIDENT
Stephen J. Shenkenberg, VICE PRESIDENT AND SECRETARY
John S. Weitzer, VICE PRESIDENT
John W. Widmer, TREASURER
Rhonda K. Haight, ASSISTANT TREASURER
INVESTMENT ADVISOR
Strong Capital Management, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
DISTRIBUTOR
Strong Investments, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
CUSTODIAN
Firstar Bank Milwaukee, N.A.
P.O. Box 701, Milwaukee, Wisconsin 53201
TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT
Strong Capital Management, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
100 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.
Strong Investments Inc., RT2375-0300
To order a free prospectus kit, call
1-800-368-1030
To learn more about our funds, discuss an existing account, or conduct a
transaction, call
1-800-368-3863
If you are a Financial Professional, call
1-800-368-1683
Visit our web site at
www.eStrong.com
[LOGO]
STRONG INVESTMENTS
P.O. Box 2936
Milwaukee, Wisconsin 53201
SMUNI
