[STRONG LOGO AND PICTURE OF MAN AND 2 CHILDREN FISHING]
PROSPECTUS
THE STRONG
ADVANTAGE FUND ADVISOR CLASS
AUGUST 31, 1999,
as supplemented on January 21, 2000
THE SECURITIES AND EXCHANGE COMMISSION (SEC) HAS NOT APPROVED OR DISAPPROVED OF
THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
1
<PAGE>
TABLE OF CONTENTS
Your Investment.................................................................
Key Information.................................................................
What are the fund's goals?.....................................................1
What are the fund's principal investment strategies?...........................1
What are the main risks of investing in the fund?..............................2
What are the fund's fees and expenses?.........................................5
Who are the fund's investment advisor and portfolio managers?..................6
Other Important Information You Should Know.....................................
A Word About Credit Quality....................................................7
Financial Highlights...........................................................9
Your Account....................................................................
Distribution Fees.............................................................11
Share Price...................................................................11
Buying Shares.................................................................12
Selling Shares................................................................14
Additional Policies...........................................................16
Distributions.................................................................16
Taxes.........................................................................17
Reserved Rights...............................................................18
For More Information..................................................Back Cover
IN THIS PROSPECTUS, "WE" REFERS TO STRONG CAPITAL MANAGEMENT, INC., THE
INVESTMENT ADVISOR, ADMINISTRATOR, AND TRANSFER AGENT FOR THE STRONG FUNDS.
2
<PAGE>
YOUR INVESTMENT
KEY INFORMATION
WHAT ARE THE FUND'S GOALS?
The STRONG ADVANTAGE FUND seeks current income with a very low degree of
share-price fluctuation.
WHAT ARE THE FUND'S PRINCIPAL INVESTMENT STRATEGIES?
The ADVANTAGE FUND invests primarily in very short-term, corporate, and
mortgage- and asset-backed bonds. The fund invests primarily in higher- and
medium-quality bonds. To enhance its return potential, the fund also invests a
portion of its assets in bonds that have longer maturities or are of
lower-quality (high-yield or junk bonds), though it may not invest in bonds
rated below BB. The managers focus upon high-yield bonds rated BB with
positive or improving credit fundamentals. To help limit changes in share
price, the fund's average maturity is usually one year or less.
The managers may sell a holding if its value becomes unattractive. Also, the
managers may invest any amount in cash or cash-type securities as a temporary
defensive position to avoid losses during adverse market conditions. This
could reduce the benefit to the fund if the market goes up. In this case, the
fund may not achieve its investment goal. The fund was designed for investors
who seek higher yields than those generally offered by money market funds and
who are willing to accept some modest share-price fluctuation to achieve that
objective.
WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
BOND RISKS: The major risks of the fund are those of investing in the bond
market. A bond's market value is affected significantly by changes in interest
rates-generally, when interest rates rise, the bond's market value declines and
when interest rates decline, its market value rises (interest-rate risk).
Generally, the longer a bond's maturity, the greater the risk and the higher
its yield. Conversely, the shorter a bond's maturity, the lower the risk and
the lower its yield (maturity risk). A bond's value can also be affected by
changes in the bond's credit-quality rating or its issuer's financial condition
(credit-quality risk). Because bond values fluctuate, the fund's share price
fluctuates. So, when you sell your investment, you may receive more or less
money than you originally invested.
HIGH-YIELD BONDS: The fund invests a limited portion of its assets in medium-
and lower-quality bonds, including high-yield bonds (commonly referred to as
junk bonds). Lower-quality bonds involve greater interest-rate and
credit-quality risks than higher- and medium-quality bonds. High-yield bonds
possess an increased possibility that the bond's issuer may not be able to make
its payments of interest and principal. If that happens, the fund's share price
would decrease and its income distributions would be reduced. An economic
downturn or period of rising interest rates could adversely affect the
high-yield bond market and reduce the fund's ability to sell its high-yield
bonds (liquidity risk). A lack of a liquid market for these bonds could
decrease the fund's share price.
FOREIGN SECURITIES: The fund may invest up to 25% of its assets in foreign
securities. Foreign investments involve additional risks including
currency-rate fluctuations, political and economic instability, differences in
financial reporting standards, and less-strict regulation of securities
markets.
MORTGAGE- AND ASSET-BACKED SECURITIES: The fund invests in mortgage-backed and
asset-backed securities. These securities are subject to prepayment risk,
which is the risk that the borrower will prepay some or all of the principal
owed to the issuer. If that happens, the fund may have to replace the security
by investing the proceeds in a less attractive security. This could reduce the
fund's share price and its income distributions.
The share price of the fund will vary. The fund is not appropriate for
investors concerned primarily with principal stability.
3
<PAGE>
FUND STRUCTURE
The fund offers multiple classes of shares: Investor Class shares,
Institutional Class shares, and Advisor Class shares. Only the Advisor Class
shares are offered in this prospectus. The principal difference between each
of the classes of shares is that the Advisor Class shares are subject to
distribution fees and expenses under a 12b-1 plan and that each class of shares
is subject to different administrative and transfer agency fees and expenses.
FUND PERFORMANCE
The return information on the next page illustrates how the performance of the
fund's Advisor Class shares can vary, which is one indication of the risks of
investing in the fund. Performance results for Advisor Class shares, which were
first offered on August 31, 1999, are based on the historical performance of
the Investor Class shares from the inception of the fund up to August 30, 1999,
recalculated to reflect the higher annual expense ratio applicable to the
Advisor Class shares. The Investor Class shares are not offered by this
prospectus. The returns for the Advisor Class are substantially similar to
those of the Investor Class shares since each are invested in the same
portfolio of securities and the only differences relate to the differences in
the fees and expenses of each class of shares. Please keep in mind that the
past performance of the fund's Advisor Class shares does not represent how it
will perform in the future. The information assumes that you reinvested all
dividends and distributions.
CALENDAR YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C>
Year Advantage
- ----- ---------
1989 9.0%
- ----- ---------
1990 6.3%
- ----- ---------
1991 10.2%
- ----- ---------
1992 8.1%
- ----- ---------
1993 7.5%
- ----- ---------
1994 3.2%
- ----- ---------
1995 7.1%
- ----- ---------
1996 6.3%
- ----- ---------
1997 6.1%
- ----- ---------
1998 4.4%
- ----- ---------
</TABLE>
The fund's year-to-date return through June 30, 1999 is 2.5%.
BEST AND WORST QUARTERLY PERFORMANCE
(During the periods shown above)
<TABLE>
<CAPTION>
<S> <C>
BEST QUARTER RETURN WORST QUARTER RETURN
- --------------------- ---------------------
2.9% (1st Q 1989) 0.3% (2nd Q 1994)
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS
AS OF 12-31-98
FUND/INDEX 1-YEAR 5-YEAR 10-YEAR SINCE INCEPTION
ADVANTAGE 4.39% 5.43% 6.81% 6.84% (11-25-88)
Salomon Smith Barney 1-Year
Treasury Bill Index 5.89% 5.66% 6.46% 6.43%
THE SALOMON SMITH BARNEY 1-YEAR TREASURY BENCHMARK-ON-THE-RUN INDEX IS AN
UNMANAGED INDEX GENERALLY REPRESENTATIVE OF THE AVERAGE YIELD ON ONE-YEAR
TREASURY BILLS.
For current yield information on the fund, call 1-800-368-3863.
WHAT ARE THE FUND'S FEES AND EXPENSES?
4
<PAGE>
This section describes the fees and expenses that you may pay if you buy and
hold shares of the fund.
SHAREHOLDER FEES
(fees paid directly from your investment)
All of the Strong Funds are 100% no-load, so you pay no sales charges (loads)
to buy or sell shares.
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from fund assets)
The costs of operating the fund is deducted from fund assets, which means you
pay them indirectly. These costs are deducted before computing the daily share
price or making distributions. As a result, they don't appear on your account
statement, but instead reduce the total return you receive from your fund
investment.
ANNUAL FUND OPERATING EXPENSES (AS A PERCENT OF AVERAGE NET ASSETS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
MANAGEMENT TOTAL ANNUAL FUND
FUND FEES 12B-1 FEES OTHER EXPENSES OPERATING EXPENSES
- ---------- ------------- ------------ -------------- ------------------
Advantage 0.35% 0.25% 0.49% 1.09%
</TABLE>
EXAMPLE: This example is intended to help you compare the cost of investing in
the fund, before fee waivers and expense absorptions, with the cost of
investing in other mutual funds. The example assumes that you invest $10,000 in
the fund for the time periods indicated, and then redeem all of your shares at
the end of those periods. The example also assumes that your investment has a
5% return each year and that the fund's operating expenses remain the same.
Although your actual costs may be higher or lower, based on these assumptions,
your costs would be:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------- ------ ------- ------- --------
Advantage $111 $347 $601 $1,329
</TABLE>
WHO ARE THE FUND'S INVESTMENT ADVISOR AND PORTFOLIO MANAGERS?
Strong Capital Management, Inc. (Strong) is the investment advisor for the
fund. Strong provides investment management services for mutual funds and other
investment portfolios representing assets of over $36 billion. Strong began
conducting business in 1974. Since then, its principal business has been
providing investment advice for individuals and institutional accounts, such as
pension and profit-sharing plans, as well as mutual funds, several of which are
available through variable insurance products. Strong's address is P.O. Box
2936, Milwaukee, WI 53201.
The following are the fund's portfolio managers.
JEFFREY A. KOCH co-manages the fund. He has over 10 years of investment
experience and is a Chartered Financial Analyst. He has been a portfolio
manager since January 1990. He joined Strong as a securities analyst in June
1989. He has managed or co-managed the fund since July 1991. Prior to joining
Strong, Mr. Koch was employed by Fossett Corporation, a clearing firm, as a
market maker clerk. Mr. Koch received his bachelors degree in Economics from
the University of Minnesota in 1987 and his Masters of Business Administration
in Finance from Washington University in 1989.
THOMAS A. SONTAG co-manages the fund. He has over 15 years of industry
experience. He joined Strong in November 1998 as a co-portfolio manager of the
fund. For 12 years prior to joining Strong, Mr. Sontag worked at Bear Stearns &
Co., most recently serving as a Managing Director of the Fixed Income
Department from 1990 to November 1998. From September 1982 until December 1985,
Mr. Sontag was employed in the Fixed Income Department at Goldman Sachs & Co.
Mr. Sontag received his bachelors degree in Economics/Finance from the
University of Wisconsin in 1981 and his Masters of Business Administration in
Finance from the University of Wisconsin in 1982.
((Side Box))
YEAR 2000 ISSUES
5
<PAGE>
Your investment could be adversely affected if the computer systems used by the
fund, Strong, and the fund's service providers do not properly process and
calculate date-related information before, on, and after January 1, 2000. Year
2000-related computer problems could have a negative impact on your fund and
the fund's investments, however, we are working to avoid these problems and to
obtain assurances from our service providers that they are taking similar
steps. Please note that Year 2000-related computer problems may have a greater
negative impact on foreign capital markets and foreign investments, especially
in emerging markets.
OTHER IMPORTANT INFORMATION YOU SHOULD KNOW
A WORD ABOUT CREDIT QUALITY
CREDIT QUALITY measures the issuer's expected ability to pay interest and
principal payments on time. Credit quality can be "higher-quality",
"medium-quality", "lower-quality", or "in default".
HIGHER-QUALITY means bonds that are in any of the three highest rating
categories. For example, bonds rated AAA to A by Standard & Poor's Ratings
Group (S&P)*.
MEDIUM-QUALITY means bonds that are in the fourth-highest rating category. For
example, bonds rated BBB by S&P*.
LOWER-QUALITY means bonds that are below the fourth-highest rating category.
They are also known as non-investment, high-risk, high-yield, or "junk bonds".
For example, bonds rated BB to C by S&P*.
IN DEFAULT means the bond's issuer has not paid principal or interest on time.
* OR THOSE RATED IN THIS CATEGORY BY ANY NATIONALLY RECOGNIZED STATISTICAL
RATING ORGANIZATION. S&P IS ONLY ONE EXAMPLE OF A NATIONALLY RECOGNIZED
STATISTICAL RATING ORGANIZATION.
This chart shows S&P's definition and ratings group for credit quality. Other
rating organizations use similar definitions.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CREDIT S&P'S DEFINITION S&P'S RATINGS GROUP RATING CATEGORY
QUALITY
- ------------ ------------------- ------------------- ------------------
Higher Highest quality AAA First highest
High quality AA Second highest
Upper medium grade A Third highest
- ------------ ------------------- ------------------- ------------------
Medium Medium grade BBB Fourth highest
- ------------ ------------------- ------------------- ------------------
Lower Low grade BB
Speculative B
Submarginal CCC, CC, C
- ------------ ------------------- -------------------
In default Probably in default D
- ------------ ------------------- -------------------
</TABLE>
We determine a bond's credit quality rating at the time of investment by
conducting credit research and analysis and by relying on credit ratings of
several nationally recognized statistical rating organizations. These
organizations are called NRSROs. When we determine if a bond is in a specific
category, we may use the highest rating assigned to it by any NRSRO. If a bond
is not rated, we rely on our credit research and analysis to rate the bond. If
a bond's credit-quality rating is downgraded after our investment, we monitor
the situation to decide if we need to take any action such as selling the bond.
Also, investments in lower-quality bonds (junk bonds) will be more dependent on
our credit analysis than would be higher-quality bonds because, while
lower-quality bonds generally offer higher yields than higher-quality bonds
with similar maturities, lower-quality bonds involve greater risks. These
include the possibility of default or bankruptcy because the issuer's capacity
to pay interest and repay principal is considered predominantly speculative.
Also, lower-quality bonds are less liquid, meaning that they may be harder to
sell than bonds of higher quality
6
<PAGE>
because the demand for them may be lower and there are fewer potential buyers.
This lack of liquidity may lower the value of the fund and your investment.
7
<PAGE>
FINANCIAL HIGHLIGHTS
This information describes investment performance of the Investor Class shares
of the fund for the periods shown. Certain information reflects financial
results for a single Investor Class share. "Total Return" shows how much an
investment in the Investor Class shares of the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. The Advisor Class shares of the fund were first offered on
August 31, 1999. These figures for the fund have been audited by
PricewaterhouseCoopers LLP, whose report, along with the fund's financial
statements, is included in the fund's annual report.
Strong Advantage Fund- Investor Class
Selected Per-Share Feb. 28, Feb. 28, Feb. 28, Feb. 29, Dec. 31, Dec. 31,
Data(a) 1999 1998 1997 1996(b) 1995 1994
Net Asset Value,
Beginning of Period $10.08 $10.09 $10.03 $10.04 $9.98 $10.19
Income From
Investment Operations
Net Investment Income 0.59 0.62 0.62 0.10 0.67 0.55
Net Realized and
Unrealized Gains(Losses)
on Investments (0.13) (0.01) 0.06 (0.01) 0.06 (0.19)
Total from Investment
Operations 0.46 0.61 0.68 0.09 0.73 0.36
Less Distributions
From Net Investment
Income (0.59) (0.62) (0.62) (0.10) (0.67) (0.55)
In Excess Of Net
Realized Gains -- -- -- -- -- (0.02)
Total Distributions (0.59) (0.62) (0.62) (0.10) (0.67) (0.57)
Net Asset Value,
End of Period $9.95 $10.08 $10.09 $10.03 $10.04 $9.98
Ratios and Supplemental Data
Total Return +4.6% +6.3% +7.0% +0.9% +7.5% +3.6%
Net Assets, End of Period
(In Millions) $2,766 $2,164 $1,520 $1,000 $990 $911
Ratio of Expenses to
Average Net Assets 0.7% 0.8% 0.8% 0.8%* 0.8% 0.8%
Ratio of Net Investment
Income to Average
Net Assets 5.8% 6.2% 6.2% 6.3%* 6.6% 5.6%
Portfolio Turnover
Rate 79.3% 109.6% 154.9% 17.2% 183.7% 221.0%
*Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the fund
outstanding for the entire period.
(b) In 1996, the Fund changed its fiscal year-end from December to February.
8
<PAGE>
YOUR ACCOUNT
All of the Strong Funds are 100% no-load. This means that you may purchase,
redeem, or exchange shares directly at their net asset value without paying a
sales charge.
DISTRIBUTION FEES
The Strong Funds have adopted a Rule 12b-1 distribution plan for the Advisor
Class shares of the fund. Under the distribution plan, the fund may make
monthly payments to the funds' distributor at the annual rate of 1.00% of the
average daily net assets of the fund attributable to its Advisor Class shares.
However, under the Distribution Agreement for the Advisor Class shares,
payments to the fund's distributor under the distribution plan are currently
limited to payment at an annual rate equal to 0.25% of average daily net assets
attributable to Advisor Class shares. Such payments may be made for
distribution related services and other services which are primarily intended
to result in the sale of Advisor Class shares of the fund. Because Rule 12b-1
fees are on-going, over time they will increase the cost of an investment in
the Advisor Class shares of the fund and may cost more than other types of
sales charges.
SHARE PRICE
Your transaction price for buying, selling, or exchanging Advisor Class shares
is the net asset value per share (NAV) of that class of shares. NAV is
generally calculated as of the close of trading on the New York Stock Exchange
(usually 3:00 p.m. Central Time) every day the NYSE is open. If the NYSE
closes at any other time, or if an emergency exists, NAV may be calculated at a
different time. Your share price will be the next NAV calculated after we
accept your order.
NAV is based on the market value of the securities in a fund's portfolio. If
market prices are not available, NAV is based on a security's fair value as
determined in good faith by us under the supervision of the Board of Directors
of the Strong Funds.
FOREIGN SECURITIES
Some of the fund's portfolio securities may be listed on foreign exchanges that
trade on days when we do not calculate an NAV. As a result, the fund's NAV may
change on days when you will not be able to purchase or redeem shares. In
addition, a foreign exchange may not value its listed securities at the same
time that we calculate the fund's NAV. Events affecting the values of
portfolio securities that occur between the time a foreign exchange assigns a
price to the portfolio securities and the time when we calculate the fund's NAV
generally will not be reflected in the fund's NAV. These events will be
reflected in the fund's NAV when we, under the supervision of the Board of
Directors of the Strong Funds, determine that they would have a material effect
on the fund's NAV.
((Side Box))
<TABLE>
<CAPTION>
<S> <C>
We determine the share price or NAV of a class of
shares by dividing net assets attributable to the
class of shares (the value of the fund's
investments, cash, and other assets attributable to
the class of shares minus the fund's liabilities
attributable to the class of shares) by the number
of shares in the class outstanding.
- ---------------------------------------------------
</TABLE>
9
<PAGE>
BUYING SHARES
INVESTMENT MINIMUMS: When buying shares, you must meet the following investment
minimum requirements.
<TABLE>
<CAPTION>
<S> <C> <C>
INITIAL INVESTMENT MINIMUM ADDITIONAL INVESTMENT MINIMUM
- ------------------------- ------------------------------------- -------------------------------------
Regular accounts $2,500 $50
- ------------------------- -------------------------------------
Education IRA accounts $500 $50
------------------------------------- -------------------------------------
Other IRAs and $250 $50
UGMA/UTMA accounts
- ------------------------- ------------------------------------- -------------------------------------
SIMPLE IRA, SEP-IRA, the lesser of $250 or $25 per month $50
403(b)(7), Keogh, Pension
Plan, and Profit Sharing
Plan accounts*
- ------------------------- -------------------------------------
</TABLE>
* If you open a qualified retirement plan account where we or one of our
alliance partners provides administrative services, there is no initial
investment minimum.
The fund has adopted a multiple class plan which currently permits it to offer
three classes of shares: Investor Class shares, Institutional Class shares,
and Advisor Class shares. Each class is offered at its net asset value without
the imposition of any sales load, however, each class of shares is subject to
fees and expenses which may differ. The principal difference between each of
the classes of shares is that the Advisor Class shares are subject to
distribution fees and expenses under a 12b-1 plan and that each class of shares
is subject to different administrative and transfer agency fees and expenses.
BUYING INSTRUCTIONS
You can buy shares in several ways.
MAIL
You can open or add to an account by mail with a check or money order made
payable to Strong Funds. Send it to the address listed on the back of this
prospectus, along with your account application (for a new account) or an
Additional Investment Form (for an existing account).
EXCHANGE OPTION
Sign up for the exchange option when you open your account. You may exchange
your shares of the fund for shares of another Strong Fund. You may make an
exchange by calling Strong Institutional Client Services at 1-800-368-1683 or
by sending a facsimile to 1-414-359-3535. Please obtain and read the
appropriate prospectus before investing in any of the Strong Funds. Remember,
an exchange of shares of one Strong Fund for those of another Strong Fund, is
considered a sale and a purchase of fund shares for tax purposes and may
result in a capital gain or loss. Some Strong Funds that you may want to
exchange into may charge a redemption fee of 0.50% to 1.00% on the sale of
shares held for less than six months. Purchases by exchange are subject to
the investment requirements and other criteria of the fund purchased.
WIRE
Call 1-800-368-1683 for instructions before wiring funds either to open or add
to an account. This helps to ensure that your account will be credited
promptly and correctly.
BROKER-DEALER
You may purchase shares through a broker-dealer or other intermediary who may
charge you a fee.
PLEASE REMEMBER . . .
- - Make checks or money orders payable to Strong Funds.
10
<PAGE>
- - We do not accept cash, third-party checks (checks payable to you written by
another party), credit card convenience checks, or checks drawn on banks
outside the U.S.
- - You will be charged $20 for every check, money order, wire, or Electronic
Funds Transfer returned unpaid.
SELLING SHARES
You can access the money in your account by selling (also called redeeming)
some or all of your shares by one of the methods below. After your redemption
request is accepted, we normally send you the proceeds on the next business
day.
SELLING INSTRUCTIONS
You can sell shares in several ways.
MAIL
Write a letter of instruction. It should specify your account number, the
dollar amount or number of shares you wish to redeem, the names and signatures
of the owners (or other authorized persons), and your mailing address. Then,
mail it to the address listed on the back of this prospectus.
REDEMPTION OPTION
Sign up for the redemption option when you open your account. With this
option, you may sell shares by phone and receive the proceeds in one of three
ways:
(1) We can mail a check to your account's address. Checks will not be
forwarded by the Postal Service, so please notify us if your address has
changed.
(2) We can transmit the proceeds by Electronic Funds Transfer to a
properly pre-authorized bank account. The proceeds usually will arrive at your
bank two banking days after we process your redemption.
(3) For a $10 fee, we can transmit the proceeds by wire to a properly
pre-authorized bank account. The proceeds usually will arrive at your bank the
first banking day after we process your redemption.
BROKER-DEALER
You may sell shares through a broker-dealer or other intermediary who may
charge you a fee.
PLEASE REMEMBER ...
- - If you recently purchased shares, a redemption request on those shares will
not be honored until 10 days after we receive the purchase check or
electronic transaction.
- - Some transactions and requests require a signature guarantee.
- - With an IRA (or other retirement account), you will be charged (1) a $10
annual account maintenance fee for each account up to a maximum of $30 and
(2) a $10 fee for transferring assets to another custodian or for closing an
account.
- - If you sell shares out of a non-IRA retirement account and you are eligible
to roll the sale proceeds into another retirement plan, we will withhold for
federal income tax purposes a portion of the sale proceeds unless you
transfer all of the proceeds to an eligible retirement plan.
11
<PAGE>
((Side Box))
<TABLE>
<CAPTION>
<S> <C>
SIGNATURE GUARANTEES help ensure that major
transactions or changes to your account are in fact
authorized by you. For example, we require a
signature guarantee on written redemption requests
for more than $50,000. You can obtain a signature
guarantee for a nominal fee from most banks,
brokerage firms, and other financial institutions.
A notary public stamp or seal cannot be substituted
for a signature guarantee.
- ---------------------------------------------------
</TABLE>
ADDITIONAL POLICIES
TELEPHONE TRANSACTIONS
Once you place a telephone transaction request, it cannot be canceled or
modified. We use reasonable procedures to confirm that telephone transaction
requests are genuine. We may be responsible if we do not follow these
procedures. You are responsible for losses resulting from fraudulent or
unauthorized instructions received over the telephone, provided we reasonably
believe the instructions were genuine. During times of unusual market
activity, our phones may be busy and you may experience a delay placing a
telephone request.
DISTRIBUTIONS
DISTRIBUTION POLICY
The fund generally pays you dividends from net investment income monthly and
distributes any net capital gains that it realizes annually. Dividends are
declared on each day NAV is calculated, except for bank holidays. Dividends
earned on weekends, holidays, and days when the fund's NAV is not calculated
are declared on the first day preceding these days that the fund's NAV is
calculated. Your investment generally earns dividends from the first business
day after we accept your purchase order.
REINVESTMENT OF DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
Your dividends and capital gain distributions will be automatically reinvested
in additional shares, unless you choose otherwise. Your other options are to
receive checks for these payments, have them automatically invested in another
Strong Fund, or have them deposited into your bank account. To change the
current option for payment of dividends and capital gains distributions,
please call 1-800-368-1683.
TAXES
TAXABLE DISTRIBUTIONS
Any net investment income and net short-term capital gain distributions you
receive are taxable as ordinary dividend income at your income tax rate.
Distributions of net capital gains are generally taxable as long-term capital
gains. This is generally true no matter how long you have owned your shares
and whether you reinvest your distributions or take them in cash. You may also
have to pay taxes when you exchange or sell shares if your shares have
increased in value since you bought them.
RETURN OF CAPITAL
If your fund's (1) income distributions exceed its net investment income and
net short-term capital gains or (2) capital gain distributions exceed its net
capital gains in any year, all or a portion of those distributions may be
treated as a return of capital to you. Although a return of capital is not
taxed, it will reduce the cost basis of your shares.
YEAR-END STATEMENT
To assist you in tax preparation, after the end of each calendar year, we send
you a statement of your fund's ordinary dividends and net capital gain
distributions (Form 1099).
BACKUP WITHHOLDING
12
<PAGE>
By law, we must withhold 31% of your distributions and proceeds if (1) you are
subject to backup withholding or (2) you have not provided us with complete
and correct taxpayer information such as your Social Security Number (SSN) or
Tax Identification Number (TIN).
((Side Box))
<TABLE>
<CAPTION>
<S> <C>
COST BASIS is the amount that you paid for the
shares. When you sell shares, you subtract the cost
basis from the sale proceeds to determine whether
you realized an investment gain or loss. For
example, if you bought a share of the fund at $10
and you sold it two years later at $11, your cost
basis on the share is $10 and your gain is $1.
- ---------------------------------------------------
</TABLE>
Because everyone's tax situation is unique, you should consult your tax
professional for assistance.
RESERVED RIGHTS
We reserve the right to:
- - Refuse, change, discontinue, or temporarily suspend account services,
including purchase, exchange, or telephone redemption privileges, for any
reason.
- - Reject any purchase request for any reason including exchanges from other
Strong Funds. Generally, we do this if the purchase or exchange is
disruptive to the efficient management of the fund (due to the timing of the
investment or an investor's history of excessive trading).
- - Change the minimum or maximum investment amounts.
- - Delay sending out redemption proceeds for up to seven days (this generally
only applies to very large redemptions without notice, excessive trading, or
during unusual market conditions).
- - Suspend redemptions or postpone payments when the NYSE is closed for any
reason other than its usual weekend or holiday closings, when trading is
restricted by the SEC, or under any emergency circumstances.
- - Make a redemption-in-kind (a payment in portfolio securities rather than
cash) if the amount you are redeeming is in excess of the lesser of (1)
$250,000 or (2) 1% of the fund's assets. Generally, redemption-in-kind is
used when large redemption requests may cause harm to the fund and its
shareholders. This includes redemptions made by checkwriting.
- - Close any account that does not meet minimum investment requirements. We
will give you notice and 60 days to begin an automatic investment program or
to increase your balance to the required minimum.
- - Reject any purchase or redemption request that does not contain all required
documentation.
13
<PAGE>
FOR MORE INFORMATION
More information is available upon request at no charge, including:
SHAREHOLDER REPORTS: Additional information is available in the annual and
semi-annual report to shareholders. These reports contain a letter from
management, discuss recent market conditions, economic trends and investment
strategies that significantly affected your investment's performance during the
last fiscal year, and list portfolio holdings.
STATEMENT OF ADDITIONAL INFORMATION (SAI): The SAI contains more details about
investment policies and techniques. A current SAI is on file with the SEC and
is incorporated into this prospectus by reference. This means that the SAI is
legally considered a part of this prospectus even though it is not physically
contained within this prospectus.
To request information or to ask questions:
BY TELEPHONE BY OVERNIGHT DELIVERY
(800) 368-1683 Strong Institutional Client Services
100 Heritage Reserve
BY MAIL Menomonee Falls, Wisconsin 53051
Strong Institutional Client Services
P.O. Box 2936 ON THE INTERNET
Milwaukee, Wisconsin 53201-2936 View online or download documents:
SEC*: www.sec.gov
This prospectus is not an offer to sell securities in any place where it would
be illegal to do so.
*YOU CAN ALSO OBTAIN COPIES BY VISITING THE SEC'S PUBLIC REFERENCE ROOM IN
WASHINGTON, D.C. OR BY SENDING YOUR REQUEST AND A DUPLICATING FEE TO THE
SECURITIES AND EXCHANGE COMMISSION'S PUBLIC REFERENCE SECTION, WASHINGTON, D.C.
20549-6009. YOU CAN CALL 1-800-SEC-0330 FOR INFORMATION ON THE OPERATION OF THE
PUBLIC REFERENCE ROOM.
Strong Advantage Fund, a series of Strong Advantage Fund, Inc., SEC file
number: 811-5667
14
<PAGE>
