<PAGE> 1
THE STRONG INTERNATIONAL FUNDS
ANNUAL REPORT - OCTOBER 31, 1995
THE STRONG SHORT-TERM GLOBAL BOND FUND
THE STRONG INTERNATIONAL BOND FUND
THE STRONG INTERNATIONAL STOCK FUND
THE STRONG ASIA PACIFIC FUND
[STRONG FUNDS LOGO]
STRONG FUNDS
<PAGE> 2
THE STRONG INTERNATIONAL FUNDS
ANNUAL REPORT - OCTOBER 31, 1995
Dear shareholder: As the Strong Family of Funds continues to grow, so too have
our reporting responsibilities to you. To help ensure that we can continue to
produce shareholder reports and other information on a timely basis, we have
changed the fiscal year-end of the Strong International Funds from December 31
to October 31, beginning with this annual report. By staggering the Funds'
fiscal-year periods, and thereby their reporting schedules, we avoid a
potential "log-jam" at year-end. Please note that this change has no effect on
how the Funds are managed. It simply alters the reporting period of your
shareholder reports. If you have a question regarding the new schedule, please
don't hesitate to call us at 1-800-368-3863.
Table of Contents
<TABLE>
<S> <C>
INVESTMENT REVIEWS
The Strong Short-Term Global Bond Fund . . . . . . . . . . . . . . 2
The Strong International Bond Fund . . . . . . . . . . . . . . . . 4
The Strong International Stock Fund . . . . . . . . . . . . . . . 6
The Strong Asia Pacific Fund . . . . . . . . . . . . . . . . . . . 8
FINANCIAL INFORMATION
Schedules of Investments in Securities
The Strong Short-Term Global Bond Fund . . . . . . . . . . 10
The Strong International Bond Fund . . . . . . . . . . . . 11
The Strong International Stock Fund . . . . . . . . . . . 13
The Strong Asia Pacific Fund . . . . . . . . . . . . . . . 16
Statements of Operations . . . . . . . . . . . . . . . . . . . . . 19
Statements of Assets and Liabilities . . . . . . . . . . . . . . . 21
Statements of Changes in Net Assets . . . . . . . . . . . . . . . 22
Notes to Financial Statements . . . . . . . . . . . . . . . . . . 23
FINANCIAL HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
REPORT OF INDEPENDENT ACCOUNTANTS . . . . . . . . . . . . . . . . . . . . . 28
</TABLE>
<PAGE> 3
The Strong SHORT-TERM GLOBAL BOND Fund
As of 10-31-95
30-DAY ANNUALIZED YIELD
8.39% (1)
AVERAGE CREDIT QUALITY
A
AVERAGE EFFECTIVE MATURITY
2.3 YEARS(2)
Assets by
Credit-Quality Rating
(based on net assets as of 10-31-95)
[PIE CHART]
less than 1 year 18.1%
AAA 35.5%
AA 9.3%
A 11.8%
BBB 9.0%
BB 14.3%
B 2.0%
Please see the Schedule of Investments in Securities for a complete listing of
the Fund's portfolio.
Top Five Countries (5)
(based on net assets as of 10-31-95)
<TABLE>
<CAPTION>
Country % of assets
<S> <C>
United States 48.3%
Germany 9.4%
Chile 7.1%
Brazil 6.1%
Mexico 4.0%
</TABLE>
Please see the Schedule of Investments in Securities for a complete listing of
the Fund's portfolio.
The Strong Short-Term Global Bond Fund seeks total return by investing for a
high level of income with a low degree of share-price fluctuation. The Fund
invests primarily in investment-grade debt obligations of U.S. and foreign
issuers. It normally will pay dividends quarterly and have an average effective
portfolio maturity of three years or less.
FUND CONTINUED TO PERFORM WELL
After a volatile start to the year, the global bond markets performed
reasonably well over the first ten months. Total return for the Fund was 8.51%
for the period ending 10-31-95, which ranked the Fund in the top 21% of the
short world multi-market funds tracked by Lipper Analytical Services for the
ten months.(3) By the end of October, most short-term global bond markets had
rebounded strongly, reflected in the overall 9.26% total return as measured by
the Salomon Brothers 1-3 Year World Government Bond Index (Currency Hedged).(4)
A comparison of the Fund to the Index for the year-to-date, 1-year, and
since-inception periods follows on page 3.
[PHOTO OF MAP]
The volatility experienced in the global bond markets earlier this year now
appears to have subsided, and most emerging bond markets have bounced back from
their low levels in March. Global bond prices have rebounded from the downturn
that was spurred by the U.S. Federal Reserve's interest-rate hikes in 1994 and
early 1995.
U.S. bond prices were buoyed in the first and second quarters by the
anticipated easing of interest rates by the Federal Reserve, which cut its
federal funds rate by 0.25% in July after 17 months of tightening. The U.S.
market put in a strong performance: the 30-year U.S. Treasury bond's yield fell
from 7.88% on the first of the year to 6.33% at the end of October, and the
2-year U.S. Treasury note's yield fell from 7.69% to 5.61% during that same
period.
Interest rates worldwide eased considerably early in the year, but after
trading in a wide range during the third quarter, rates in most countries ended
the third quarter unchanged or slightly lower. In August, the U.S. dollar
strengthened against most foreign currencies, particularly the Japanese yen,
which fell by approximately 15%. This rebound in the dollar reversed most of
the decline that had occurred through July.
AN OPPORTUNISTIC STRATEGY
By taking advantage of the value we saw in the bond market in late 1994
and early 1995, holdings in the Fund now have a longer average duration than at
the beginning of the year, making the Fund more sensitive to interest-rate
changes. This strategy benefited the Fund as the U.S., Japanese, and German
central banks subsequently lowered interest rates. Currently, the Fund's
average duration is approximately 1.9, and we expect to maintain the average
duration between 1.75 and 2.25 over the next three to six months.
Earlier in the year, we also reduced our exposure to below-investment-grade
bonds and increased the Fund's overall credit quality. Holdings in the Fund now
average a solid A credit rating, which will most likely remain unchanged over
the next three to six months. Over the same time period, we expect to reduce
the Fund's exposure in dollar-denominated, short-term instruments in
below-investment-grade countries to a range of 10%-15% of holdings, as compared
to 20%-30% at the beginning of 1995.
The Strong International Funds Annual Report - October 31, 1995
<PAGE> 4
STAYING THE COURSE
Over the near term, we expect interest rates in the U.S. and Europe may fall
slightly but remain in a narrow trading range. We also expect Japanese interest
rates to remain low.
Since January, we have emphasized European and North American holdings while
de-emphasizing Japan, and we expect to hold that course over the next three to
six months. We also expect to take advantage of any significant sell-off in the
bond market by increasing duration as long as economic fundamentals justify it.
We appreciate your investment in the Strong Short-Term Global Bond Fund, and we
look forward to earning your continued confidence.
[PHOTO OF SHIRISH T. MALEKAR]
Sincerely,
/s/ Shirish T. Malekar
Shirish T. Malekar
Portfolio Manager
Average Annual Total Returns as of 10-31-95
<TABLE>
<CAPTION>
Time Period Strong Short-Term Salomon Brothers 1-3 Year World
Global Bond Fund Government Bond Index (Currency Hedged)
<S> <C> <C>
Year-to-date 8.51% 9.26%
1-year 8.80% 9.68%
Since inception (on 3-31-94) 8.67% 6.77%
</TABLE>
<TABLE>
<CAPTION>
Growth of an assumed $10,000 investment
invested at the Fund's inception
The Strong Salomon Brothers 1-3 Year
Short-Term World Government Bond Index
Global Bond Fund (Currency Hedged)
<S> <C> <C>
3/94 10,000 10,000
6/94 10,180 9,995
9/94 10,404 10,075
12/94 10,513 10,153
3/95 10,641 10,457
6/95 11,042 10,771
9/95 11,309 11,006
10/95 11,407 11,093
</TABLE>
Average Annual Total Returns
through 10/31/95
Since inception 8.67%
on 3/31/94
1-year 8.80%
Year to date 8.51%
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with a similar investment in the
Salomon Brothers 1-3 Year World Government Bond Index (Currency Hedged), an
unmanaged, market-capitalization weighted index of short-term, global
fixed-income government securities. Results include the reinvestment of all
dividends and capital gains distributions. Performance is historical and does
not represent future results. Investment returns and principal value vary, and
you may have a gain or loss when you sell shares. Source for the index data is
Salomon Brothers.
(1) As of October 31, 1995, the advisor was temporarily waiving all fees and
expenses. Without these waivers, the Fund's yield would have been 6.49% and
its total return would have been lower.
(2) The Fund's average maturity includes the effect of futures contracts.
(3) Lipper Analytical Services calculations are based upon changes in net asset
value with dividends reinvested. For the 1-year and since-inception periods
ended 10-31-95, the Fund was ranked #6 of 44 funds and #3 of 39 funds,
respectively. Rankings are historical and do not represent future results.
(4) Source: Salomon Brothers.
(5) The Fund's allocation reflects options and futures positions held by the
Fund.
The Strong International Funds Annual Report - October 31, 1995
<PAGE> 5
The Strong INTERNATIONAL BOND Fund
As of 10-31-95
30-Day Annualized Yield
8.34% (1)
Average Credit Quality
AA
Average Effective Maturity
4.8 years (2)
Assets by
Credit-Quality Rating
(based on net assets as of 10-31-95)
[PIE CHART]
<TABLE>
<S> <C>
B 2.4%
BB 11.2%
BBB 8.1%
A 2.5%
AA 8.5%
AAA 44.5%
Less than one year 22.8%
</TABLE>
Please see the Schedule of Investments in Securities for a complete listing of
the Fund's portfolio.
<TABLE>
<CAPTION>
Top Five Countries (4)
(based on net assets as of 10-31-95)
Country % of assets
<S> <C>
Japan 27.8%
United States 10.5%
Chile 6.7%
Brazil 6.4%
France 5.6%
</TABLE>
Please see the Schedule of Investments in Securities for a complete listing of
the Fund's portfolio.
The Strong International Bond Fund seeks high total return by investing for
both income and capital appreciation. The Fund invests primarily in
non-dollar-denominated, investment-grade debt obligations of foreign issuers.
Normally its average effective maturity will range from four to nine years.
HIGHLY RANKED PERFORMANCE
The Fund performed exceptionally well during the first ten months of 1995. Its
year-to-date total return of 17.29% earned it the #26 ranking of the 138
general world income funds tracked by Lipper Analytical Services for the period
ended 10-31-95.(3)
Worldwide interest rates fell substantially as global bond prices rebounded
during the first half of the year. Although global interest rates, as measured
by benchmark 10-year bonds in fifteen industrialized countries, fell, on
average, 1% to 1.8% over the first six months of the year, their downward
trend has slowed in recent months.
OUR CAUTION WAS REWARDED
We began the year cautiously, expecting the U.S. economy to slow and interest
rates to decline. Capitalizing on that view early in 1995, we lengthened the
portfolio's average duration in order to take advantage of falling rates.
The currency crisis in Mexico -- combined with overall deceleration of
economic growth in emerging countries -- also made us generally wary of
below-investment-grade countries. In response, we gradually increased the
Fund's overall credit quality throughout the year. At the end of October, the
average quality rating of the holdings in the Fund was AA.
The Fund also benefited early in the year from our underweighted positions in
the non-core European countries, such as Spain, Italy and Sweden. Recently, we
reduced our Japanese position, and we expected to remain underweighted there
for the next three to six months.
OUTLOOK REMAINS NEUTRAL
Earlier this year the Fund benefited from the appreciation of foreign
currencies against the U.S. dollar. Going forward, however, we believe the
dollar is undervalued and may even reverse some of the decline it has
experienced in recent years. Given that scenario, we intend to look for
opportunities to hedge 10%-25% of the non-dollar currency exposure. For the
near term, we expect to maintain the Fund's neutral stance, selling on rallies
and buying on weakness in an effort to add value over time.
A NOTE ON EXPECTATIONS AND RISKS
The Fund's relative returns may be better understood when compared to the
Salomon Brothers Non-U.S. World Government Bond Index (Currency Unhedged) which
posted a total return of 17.49% for the period ended 10-31-95. The Lipper
category includes emerging markets funds, single-country funds, and both
currency-hedged and currency-unhedged international funds, and is therefore
less representative of the Fund.
Please be aware that investments in overseas markets often pose more risk than
U.S. investments, and the Fund's share price is expected to be more volatile
than that of a U.S.-only fund. Sometimes this volatility works for you, as it
did during most of 1995. It would be unwise, though, to expect such a return on
more than an occasional basis. A falling U.S. dollar, coupled with falling
interest rates, have resulted in exceptional returns from foreign bonds over
the past decade. In the event the dollar begins to reverse its decline, we
would actively seek to hedge part of the currency risk.
The Strong International Funds Annual Report - October 31, 1995
4
<PAGE> 6
The Fund's returns will fluctuate with changes in bond market conditions,
currency values, interest rates, foreign government regulations, and economic
and political conditions in countries in which the Fund invests. For long-term
investors, however, we believe these risks are outweighed by the benefits of
global investing -- namely, higher return potential and lower overall portfolio
risk through diversification.
We appreciate your investment in the Strong International Bond Fund, and we
look forward to earning your continued confidence.
[PHOTO OF SHIRISH T. MALEKAR]
Sincerely,
/s/ Shirish T. Malekar
Shirish T. Malekar
Portfolio Manager
Average Annual Total Returns as of 10-31-95
<TABLE>
<CAPTION>
Time Period Strong International Salomon Brothers Non-U.S. World
Bond Fund Government Bond Index (Currency Unhedged)
<S> <C> <C>
Year-to-date 17.29% 17.49%
1-year 14.86% 15.19%
Since inception (on 3-31-94) 16.55% 13.47%
</TABLE>
Growth of an assumed $10,000 invested at the Fund's inception
<TABLE>
The Strong Salomon Borthers Non-U.S.
International World Governmental Bond Index
Bond Fund (Currency Unhedged)
<S> <C> <C>
3/94 10,000 10,000
6/94 10,560 10,169
9/94 10,810 10,337
12/94 10,866 10,396
3/95 12,295 11,897
6/95 12,879 12,478
9/95 12,611 12,176
10/95 12,744 12,215
</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
Salomon Brothers Non-U.S. World Government Bond Index (Currency Unhedged), an
unmanaged, market-capitalization weighted index of liquid, non-U.S.
fixed-income government securities. Results include the reinvestment of all
dividends and capital gains distributions. Performance is historical and does
not represent future results. Investment returns and principal value vary, and
you may have a gain or loss when you sell shares. Source for the index data is
Micropal.
(1) As of October 31, 1995, the advisor was temporarily waiving all fees and
expenses. Without these waivers, the Fund's yield would have been 6.34% and
the total return would have been lower.
(2) The Fund's average maturity includes the effect of futures contracts.
(3) Lipper Analytical Services calculations are based upon changes in net asset
value with dividends and capital gains reinvested. For the 1-year and
since-inception periods ended 10-31-95, the Fund was ranked #35 of 131 funds
and #2 of 107 funds, respectively. Rankings are historical and do not
represent future results.
(4) The Fund's allocation reflects options and futures positions held by the
Fund.
The Strong International Funds Annual Report - October 31, 1995
5
<PAGE> 7
The Strong INTERNATIONAL STOCK Fund
Top Five Countries
(based on net assets as of 10-31-95)
<TABLE>
<CAPTION>
Country % of assets
<S> <C>
Japan 19.40%
New Zealand 7.32%
United States 6.41%
Singapore 6.01%
Australia 5.51%
</TABLE>
Please see the Schedule of Investments in Securities for a complete listing of
the Fund's portfolio.
Top Five Holdings
(based on net assets as of 10-31-95)
<TABLE>
<CAPTION>
Holding % of assets
<S> <C>
Nomura Securities Co., Ltd. 1.71%
Government of New Zealand 1.38%
CDL Hotels International, Ltd. 1.33%
SensoNor AS 1.31%
Keppel Corporation, Ltd. 1.13%
</TABLE>
Please see the Schedule of Investments in Securities for a complete listing of
the Fund's portfolio.
By investing primarily in the stocks of companies based outside the United
States, the Strong International Stock Fund pursues capital growth. The Fund
provides convenient access to growth opportunities worldwide, and may increase
return potential compared to a U.S.-only portfolio.
INTERNATIONAL MARKETS
Following a turbulent first quarter, the international stock markets returned
to less volatile behaviors through the end of October. The effects of the
Mexican peso devaluation subsided, while the dollar basically turned the
corner, strengthening most substantially against the Japanese yen.
The Japanese market also bounced back quite significantly, driven by renewed
foreign buying as steps taken by the government stimulated the country's
economy and weakened the yen. The Fund was rewarded on two fronts as we
increased our Japanese holdings from 16% to 19% of net assets, while
simultaneously hedging the yen in order to benefit from its weakness. These
efforts contributed to the Fund's year-to-date total return of 3.61% through
10-31-95. The global markets as a whole, as measured by the MSCI EAFE(TM) Index,
saw a gain of 4.01% for the same period.
DOWNPLAYING EUROPE, HIGHLIGHTING ASIA
Although a number of the Fund's best holdings are European stocks, including
Bulgari, an Italian manufacturer of fine watches and jewelry, and Financiere
Richemont, a Swiss manufacturer of luxury goods, we continued to underweight
European holdings relative to other funds. The continent's difficult
macro-economic environment and continuing struggle toward a unified currency,
coupled with decisions by the Chirac administration in France -- exemplified by
its ill-received nuclear-testing policy -- all contributed to flat performance
in the European markets.
[PHOTO OF GLOBES]
We continued to weight the Fund more heavily toward Asia, where we see better
long-term opportunities created by strong growth and moderate inflation. Many
Pacific Basin countries boast fast-growing economies and feature markets with
valuations between 15 and 20 times earnings. New Zealand, with its solid
economic growth and under-control inflation, remains particularly attractive.
This year the Fund continued to tap emerging markets, within reason, by
diversifying into Latin America, Eastern Europe, India, Indonesia, Thailand,
New Zealand and Africa. At the end of October, 33.3% of the Fund was invested
in these emerging markets. As always, however, we retained our "bottom-up"
approach by attending to country weightings only after first identifying value
in individual companies.
The Strong International Funds Annual Report - October 31, 1995
6
<PAGE> 8
CYCLE MAY BENEFIT LONG-TERM INVESTORS
We remain very optimistic about the international markets, especially in light
of Wall Street's maturing bull market. Attention could return to the global
markets in 1996 as investors who previously have kept their funds invested
solely in U.S. stocks may be more inclined to plug into the faster growth rates
in international and emerging markets.
Shareholders should keep in mind, however, that the Fund is likely to be more
volatile than a U.S.-only fund, owing to changes in stock market conditions,
currency values, interest rates, local regulations and economic and political
conditions. But given the value currently available in international markets,
we believe foreign equities offer long-term investors an attractive
opportunity.
We thank you for your support and look forward to earning your continued
confidence.
[PHOTO OF ANTHONY L.T. CRAGG]
Sincerely,
/s/ Anthony L.T. Cragg
Anthony L.T. Cragg
Portfolio Manager
Growth of an assumed $10,000 invested at the Fund's inception
<TABLE>
<CAPTION>
The Strong International Morgan Stanley Capital International S&P 500 Stock Index
Stock Fund EAFE(R) Index
<S> <C> <C> <C>
3/92 10,000 10,000 10,000
6/92 10,190 9,718 10,067
12/92 9,819 9,484 10,907
6/93 11,176 11,689 11,439
12/93 14,508 12,572 12,006
6/94 14,435 13,676 11,600
12/94 14,282 13,550 12,165
3/95 13,690 13,802 13,349
6/95 14,230 13,903 14,624
9/95 15,115 14,482 15,786
10/95 14,797 14,093 15,729
</TABLE>
Average Annual Total Returns
through 10-31-95
1-year
-1.58%
3-year
16.66%
Since inception
on 3/4/92
11.31%
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
Standard & Poor's 500 Stock Index ("S&P 500") and the Morgan Stanley Capital
International Europe, Australasia, and Far East Index ("MSCI EAFE(TM)").
Results include the reinvestment of all dividends and capital gains
distributions. The S&P 500 is an unmanaged index generally representative of
the U.S. stock market. The MSCI EAFE(TM) is an unmanaged, market-capitalization
weighted index generally representative of major overseas stock markets. MSCI
EAFE(TM) data are dollar-adjusted. 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. Source for the index data is
Micropal.
The Strong International Funds Annual Report - October 31, 1995
<PAGE> 9
The Strong ASIA PACIFIC Fund
Top Five Countries
(based on net assets as of 10-31-95)
<TABLE>
<CAPTION>
Country % of assets
<S> <C>
Japan 23.45%
New Zealand 11.47%
Singapore 10.27%
Indonesia 8.89%
Australia 8.01%
</TABLE>
Please see the Schedule of Investments in Securities for a complete listing of
the Fund's portfolio.
Top Five Holdings
(based on net assets as of 10-31-95)
<TABLE>
<CAPTION>
Holding % of assets
<S> <C>
Nomura Securities Co., Ltd. 2.28%
Government of New Zealand 1.56%
Guinness Peat Group PLC 1.53%
Sky City, Ltd. 1.52%
CDL Hotels International, Ltd. 1.31%
</TABLE>
Please see the Schedule of Investments in Securities for a complete listing of
the Fund's portfolio.
The Strong Asia Pacific Fund seeks capital growth by investing primarily in the
equity securities of issuers located in Asia or the Pacific Basin. While it may
invest in companies of any size, its current strategy is to emphasize small and
mid-sized companies, holding about 100 stocks spread broadly across industries
and sectors, but concentrated in selected countries.
ASIAN MARKETS CONTINUED TO RETRENCH
Asian markets continued to retrench throughout the first ten months of the year
as U.S. investors were satisfied to remain invested at home while the
record-breaking bull market on Wall Street continued. That lack of interest in
Asian markets contributed to the negative returns or modest gains seen in most
Asian stock funds. The Fund gained 2.63% in total return for the year to date,
while Asian markets, as a whole, posted a return of 4.78% for the same period,
as measured by the Morgan Stanley AC (Combined) Far East Free ex Japan Index.
FUND FINDS VALUE IN PACIFIC BASIN
Although the international markets have put in a lackluster performance for the
year to date, we continued to find value in the Pacific Basin markets, where
stocks with valuations of 15-20 times earnings are typical. This compares very
favorably to more mature markets such as the United States, whose economy is
growing at just 2%-3%, but whose stock market is trading in a similar range
relative to earnings.
New Zealand remained particularly attractive, as the country experienced solid
economic growth and brought its inflation under control. There is now room for
high real interest rates to come down, which is stimulating the stock and bond
markets there. As of October 31, New Zealand remained one of the largest
weightings in the Fund, with companies such as Air New Zealand and Sky City,
Ltd. performing extremely well.
[PHOTO OF DRAGON]
We also saw investment opportunities in Japan as that country's market bounced
back quite significantly through October. Consequently, we increased our
Japanese holdings to represent 23% of the Fund at the end of October.
Indonesia, with its huge population, tremendous resources, and rapidly
improving standard of living, is one of the most exciting of the world's
emerging markets. We therefore continued to overweight Indonesia quite
significantly, with 8.89% of the Fund's holdings invested there at the end of
October.
While generally cautious about investing in Hong Kong because of continued
uncertainty surrounding the country's relationship with China, we were able to
identify several companies, including Great Eagle, a property company, that we
believe warranted investment. Our weighting in Hong Kong has subsequently
increased since our last report, from 3% to 4% of net assets.
The Strong International Funds Annual Report - October 31, 1995
<PAGE> 10
WE REMAIN OPTIMISTIC
For investors seeking capital growth over the long term, the fundamental
reasons for investing in Pacific Rim markets remain unchanged--and our outlook
remains optimistic. The fast-growing economies of the area offer an attractive
alternative to more mature markets, especially in light of Wall Street's
maturing bull market. We expect American pension funds to provide an important
source of capital for Asian markets as the domestic arena offers fewer
opportunities for growth. We believe that Japanese pension funds are due to
follow suit, and, in that event, Asian economies would be the primary
beneficiaries.
Shareholders should keep in mind, however, that the Fund is likely to be more
volatile than a U.S.-only fund, owing to changes in stock market conditions,
currency values, interest rates, local regulations and economic and political
conditions. But given the value currently available in international markets,
we believe foreign equities offer long-term investors an attractive
opportunity.
Thank you for your investment, and we look forward to earning your continued
confidence.
[PHOTO OF ANTHONY L.T. CRAGG]
Sincerely,
/s/ Anthony L.T. Cragg
Anthony L.T. Cragg
Portfolio Manager
<TABLE>
<CAPTION>
Growth of an assumed $10,000
invested at the Fund's inception
Morgan Stanley Morgan Stanley Capital
The Strong Asia Capital International International Combined
Pacific Fund EAFE(R) Index Far East Ex-Japan Free Index
<S> <C> <C> <C>
12/93 10,000 10,000 10,000
3/94 9,630 10,350 7,827
6/94 9,840 10,878 8,165
9/94 10,116 10,889 9,173
12/94 9,473 10,778 8,252
3/95 9,088 10,979 8,150
6/95 9,469 11,058 8,920
9/95 9,925 11,519 8,780
10/95 9,721 11,210 8,646
</TABLE>
Average Annual Total Returns
through 10-31-95
1-year
-4.37%
Since inception
on 12-31-93
-1.53%
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at the Fund's inception, with similar investments
in the Morgan Stanley Capital International Europe, Australasia, and Far East
Index ("MSCI EAFE(TM)"), and the Morgan Stanley Capital International AC
(Combined) Far East Free ex Japan Index ("MSCI CFE(TM)"). Results include the
reinvestment of all dividends and capital gains distributions. The MSCI
EAFE(TM) is an unmanaged, market-capitalization weighted index generally
representative of major overseas stock markets. Source for the MSCI EAFE(TM)
Index is Micropal. The MSCI CFE(TM) is an unmanaged, market-capitalization
weighted index generally representative of developed and emerging markets in
the Asia/Pacific region, excluding Japan. Source for the MSCI CFE(TM) Index is
Morgan Stanley. Indices are dollar adjusted. Performance is historical and does
not represent future results. Investment returns and principal value vary, and
you may have a gain or loss when you sell shares.
The Strong International Funds Annual Report - October 31, 1995
<PAGE> 11
<TABLE>
<CAPTION>
SCHEDULES OF INVESTMENTS IN SECURITIES October 31, 1995
STRONG SHORT-TERM GLOBAL BOND FUND
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
--------- --------------
<S> <C> <C>
BONDS 39.7%
BRAZIL 6.1%
Banco Bamerindus Do Brasil Sociedad
Anonima Notes:
10.50%, Due 6/23/97 400 USD $380
10.50%, Due 6/23/97 (Acquired 6/12/95; Cost
$700) (d) 700 USD 665
Petroleo Brasileiro S.A. Eurodollar, 8.75%,
Due 12/09/96 500 USD 501
-----
1,546
DENMARK 2.4%
Kingdom of Denmark Notes, 9.00%,
Due 11/15/00 3,000 DKK 594
GERMANY 4.8%
Republic of Germany Debentures, Series 90,
8.875%, Due 12/20/00 1,500 DEM 1,215
INDIA 4.0%
Reliance Industries, Ltd. Notes, 8.125%,
Due 9/27/05 (Acquired 9/22/95;
Cost $998) (d) 1,000 USD 1,006
IRELAND 3.9%
Government of Ireland Debentures, 8.00%,
Due 10/18/00 600 IEP 985
MEXICO 4.0%
Banco Nacional de Comercio Exterior Floating
Rate Notes, 10.875%, Due 6/23/97 (Acquired
6/15/95; Cost $500) (d) 500 USD 506
Mexico-United Mexican States Floating Rate
Notes, 11.1875%, Due 7/21/97 (Acquired
7/12/95; Cost $500) (d) 500 USD 504
-----
1,010
NEW ZEALAND 2.7%
Government of New Zealand Notes, 8.00%,
Due 7/15/98 1,000 NZD 673
NORWAY 3.7%
Kingdom of Norway Debentures, 9.50%,
Due 10/31/02 5,000 NOK 926
UNITED KINGDOM 1.6%
Government of the United Kingdom Notes:
10.50%, Due 2/21/97 200 GBP 331
8.75%, Due 9/01/97 50 GBP 82
------
413
UNITED STATES 6.5%
Bank of Boston Corporation Subordinated
Floating Rate Notes, 6.00%, Due 2/28/01 $100 100
Harrahs Operating, Inc. Senior Subordinated
Notes, 10.875%, Due 4/15/02 500 549
MGM Grand Hotel Finance Corporation First
Mortgage Notes, 11.75%, Due 5/01/99 500 526
Viacom International, Inc. Reset Notes, 8.75%,
Due 5/15/01 (Rate Reset Effective 5/15/98) 450 471
------
1,646
------
TOTAL BONDS (Cost $9,757) 10,014
NON-AGENCY MORTGAGE AND ASSET-BACKED
SECURITIES 34.4%
Bear Stearns Mortgage Securities, Inc. Mortgage
Pass-Thru Certificates, Series 1993-12,
Class 1-A, 6.50%, Due 1/25/34 101 101
CMC Securities Corporation III Collateralized
Mortgage Obligation, Series 1994-F, Class A-1,
6.25%, Due 5/25/14 523 517
Citicorp Mortgage Securities, Inc. Real Estate
Mortgage Investment Conduit Pass-Thru
Certificates:
Series 1988-3, Class A-2, 9.00%, Due 4/01/18 $373 $386
Series 1990-17, Class M, 9.50%, Due 11/25/20 467 485
First Boston Mortgage Securities Corporation
Variable Rate Mortgage Pass-Thru
Certificates, Series 1994-MHC1, Class C,
7.0375%, Due 4/25/11 500 499
GE Capital Mortgage Services, Inc., Series
1994-11, Class A-3, 6.50%, Due 3/25/24 370 368
GS Trust 3 Floating Rate Collateralized
Mortgage Obligation, Series C, Class C-2,
6.8375%, Due 7/07/15 56 56
Green Tree Financial Corporation Home
Improvement Loan Certificates, Series 1995-E,
Class A, 6.80%, Due 8/15/20 (c) 967 968
Green Tree Securitized Net Interest Margin
Trust Certificates:
Series 1994-A, 6.90%, Due 2/15/04 423 423
Series 1994-B, 7.85%, Due 7/15/04 654 659
Merrill Lynch Home Equity Acceptance, Inc.
Subordinated Variable Rate Mortgage-Backed
Certificates, Series 1994-A, Class A-1, 6.875%,
Due 8/17/23 74 70
Merrill Lynch Mortgage Investors, Inc.
Manufactured Housing Contract Pass-Thru
Certificates, Series 1992-E, Class B, 5.85%,
Due 8/15/12 177 176
Merrill Lynch Mortgage Investors, Inc. Senior
Subordinated Variable Rate Pass-Thru
Certificates:
Series 1993-B, Class B,6.9375%, Due 11/15/17 1,000 940
Series 1994-H, Class M, 6.875%, Due 6/15/19 120 110
Mortgage Obligation Structured Trust Pass-Thru
Certificates, Series 1993-1, Class A-1, 6.35%,
Due 10/25/18 (c) 957 947
RTC Variable Rate Mortgage Pass-Thru
Securities, Inc. Manufactured Housing
Certificates, Series 1992-MH1, Class B-2,
6.3375%, Due 8/15/19 (Acquired 4/21/95;
Cost $951) (d) 967 954
RTC Variable Rate Mortgage Pass-Thru
Securities, Inc.:
Series 1992-16, Class A-4, 7.7410%, Due 8/25/22 48 48
Series 1995-1, Class B-5, 7.2199%, Due 10/25/28 484 474
Series 1995-1, Class M-5, 7.2199%, Due 10/25/28 470 474
------
8,655
TOTAL NON-AGENCY MORTGAGE AND
ASSET-BACKED SECURITIES (COST $8,592)
UNITED STATES GOVERNMENT AGENCY
ISSUES 7.7%
FNMA Guaranteed Real Estate Mortgage
Investment Conduit Pass-Thru Certificates:
Series 1989-11, Class 11-C, Principal Only,
Due 1/25/14 515 503
Series 1989-73, Class A, Principal Only, Due
8/25/14 42 39
FNMA Guaranteed Real Estate Mortgage
Investment Conduit Pass-Thru Certificates,
10.50%, Due 8/01/20 722 791
GMAC #12 FHA Project Loan, 7.31%, Due 5/01/21 84 88
United States Treasury Notes, 6.50%, Due 4/30/99 500 511
TOTAL UNITED STATES GOVERNMENT AGENCY ------
ISSUES (COST $1,910) 1,932
</TABLE>
See notes to financial statements.
10
<PAGE> 12
<TABLE>
<CAPTION>
STRONG SHORT-TERM GLOBAL BOND FUND (continued)
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
--------- --------------
<S> <C> <C>
CASH EQUIVALENTS (A) 19.4%
BONDS 2.0%
CANADA 1.2%
Government of Canada Debentures, Series
H76, 10.25%, Due 3/01/96 400 CAD $ 302
FRANCE 0.3%
Government of France Debentures, 9.00%,
Due 2/12/96 300 FRF 62
GERMANY 0.5%
Republic of Germany Debentures, 8.875%,
Due 1/22/96 170 DEM 122
-------
486
COMMERCIAL PAPER 10.2%
DISCOUNTED COMMERCIAL PAPER 6.5%
INDONESIA 3.4%
Bakrie and Brothers PT, Due 1/12/96 1,000,000 IDR 425
Polysindo EKA Perkasa PT Senior Notes,
Due 11/20/95 1,000,000 IDR 437
-------
862
THAILAND 3.1%
Thai Oil Company, Limited Bills of Exchange,
Due 11/24/95 20,000 THB 790
-------
1,652
INTEREST BEARING, DUE UPON DEMAND 3.7%
United States Cayman Eurodollar Call
Deposit, 4.75% 935 USD 935
-------
Total Commercial Paper 2,587
TIME DEPOSITS 7.1%
CHILE
Citibank Nassau Time Deposit, 6.8203%,
Due 11/03/95 1,000 USD 1,000
Citibank Time Deposit (with Chilean
Peso indexation and interest based on the
Chilean denominated deposit), 12.40%,
Due 11/06/95 800 USD 777
-------
1,777
UNITED STATES GOVERNMENT ISSUE 0.1%
United States Treasury Bills, Due 11/24/95 (c) $25 25
-------
Total Cash Equivalents (Cost $4,861) 4,875
-------
TOTAL INVESTMENTS IN SECURITIES
(COST $25,120) 101.2% 25,476
Other Assets and Liabilities, Net (1.2%) (305)
-------
NET ASSETS 100.0% $25,171
=======
</TABLE>
<TABLE>
<CAPTION>
FUTURES UNDERLYING UNREALIZED
AMOUNT AT APPRECIATION
EXPIRATION VALUE (DEPRECIATION)
DATE (In Thousands) (In Thousands)
---------- -------------- --------------
<S> <C> <C> <C>
Purchased:
5 Five-Year U.S. Treasury Notes 12/95 $ 542 $ 6
6 Ten-Year German Bonds 12/95 1,029 28
Sold:
2 Ten-Year U.S. Treasury Notes 12/95 (223) (1)
</TABLE>
<TABLE>
<CAPTION>
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
UNREALIZED
VALUE IN APPRECIATION
SETTLEMENT USD (DEPRECIATION)
DATE (In Thousands) (In Thousands)
---------- -------------- ---------------
<S> <C> <C> <C> <C>
Purchased:
769,285 DEM 11/13/95 $ 547 $ (3)
3,289,720 FIM 12/13/95 776 13
1,000,000,000 IDR 11/20/95 438 4
49,391,500 JPY 11/13/95 484 (11)
Sold:
405,275 CAD 12/13/95 303 (1)
3,223,845 DEM 11/13/95 2,293 (97)
3,200,250 DKK 1/17/96 587 (9)
3,289,720 FIM 12/13/95 776 (25)
819,860 GBP 11/13/95 1,296 (29)
2,000,000,000 IDR 11/20/95 876 (5)
1,000,000,000 IDR 1/12/96 432 1
49,391,500 JPY 11/13/95 484 16
5,522,808 NOK 11/13/95 888 (28)
1,000,000 NZD 11/16/95 660 --
20,000,000 THB 11/24/95 793 (2)
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY DIVERSIFICATION NET ASSETS
-------------
<S> <C>
Foreign Government........................................ 30.1%
Non-Agency Single Family.................................. 14.9
Non-Agency Manufactured Housing........................... 12.6
Bank - Super Regional..................................... 6.6
U.S. Government........................................... 5.8
FNMA...................................................... 5.6
Oil - International Integrated ........................... 5.1
Leisure Service........................................... 4.3
Chemical.................................................. 4.0
Non-Agency Multi Family................................... 3.8
Non-Agency Asset- Backed.................................. 3.1
Media - Radio/TV.......................................... 1.9
Chemical Specialty........................................ 1.7
Conglomerate.............................................. 1.7
Other Assets and Liabilities.............................. (1.2)
------
Net Assets................................................ 100.0%
======
</TABLE>
<TABLE>
<CAPTION>
STRONG INTERNATIONAL BOND FUND
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
--------- --------------
<S> <C> <C>
BONDS 52.7%
BRAZIL 6.4%
Banco Bamerindus Do Brasil Sociedad
Anonima Notes:
10.50%, Due 6/23/97 600 USD $ 570
10.50%, Due 6/23/97 (Acquired 6/12/95;
Cost $300) (d) 300 USD 285
Petroleo Brasileiro S.A. Eurodollar, 8.75%,
Due 12/09/96 500 USD 501
------
1,356
CANADA 0.9%
Mobil Oil of Canada Corporation Senior
Unsubordinated Notes, 9.00%,
Due 5/02/97 (c) 250 CAD 191
DENMARK 5.7%
Kingdom of Denmark Notes:
8.00%, Due 3/15/06 (c) 4,500 DKK 829
9.00%, Due 11/15/00 2,000 DKK 396
------
1,225
FRANCE 5.6%
Government of France Debentures, 8.50%,
Due 11/25/02 5,400 FRF 1,198
</TABLE>
See notes to financial statements.
11
<PAGE> 13
<TABLE>
<CAPTION>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) October 31, 1995
STRONG INTERNATIONAL BOND FUND (continued)
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
--------- --------------
<S> <C> <C>
GERMANY 13.5%
Republic of Germany Debentures, Series 94,
7.50%, Due 11/11/04 (c) 3,800 DEM $ 2,886
INDIA 4.7%
Reliance Industries, Ltd. Notes, 8.125%,
Due 9/27/05 (Acquired 9/22/95;
Cost $998) (d) 1,000 USD 1,006
IRELAND 3.1%
Government of Ireland Debentures, 8.00%,
Due 10/18/00 400 IEP 657
MEXICO 2.4%
Mexico-United Mexican States Floating Rate
Notes, 11.1875%, Due 7/21/97 (Acquired
7/12/95; Cost $500) (d) 500 USD 504
NEW ZEALAND 7.7%
Government of New Zealand Notes:
6.50%, Due 2/15/00 (c) 1,700 NZD 1,095
8.00%, Due 7/15/98 800 NZD 538
-------
1,633
UNITED STATES 2.7%
Bank of Boston Corporation Subordinated
Floating Rate Notes, 6.00%, Due 2/28/01 $ 50 50
MGM Grand Hotel Finance Corporation
First Mortgage Notes, 11.75%, Due 5/01/99 500 526
-------
576
-------
TOTAL BONDS (COST $10,909) 11,232
NON-AGENCY MORTGAGE AND
ASSET-BACKED SECURITIES 22.0%
Citicorp Mortgage Securities, Inc. Real Estate
Mortgage Investment Conduit Pass-Thru
Certificates, Series 1990-17, Class-M, 9.50%,
Due 11/25/20 (c) 467 485
First Boston Mortgage Securities Corporation
Mortgage Pass-Thru Certificates, Series 1992-4,
Class A-5, Interest Only, 0.625%,
Due 10/25/22 (c) 38,798 291
GE Capital Mortgage Services, Inc.:
Series 1993-13, Class B-3, 6.00%, Due 10/25/08
(Acquired 9/26/95; Cost $507) (c) (d) 620 513
Series 1994-11, Class A-3, 6.50%, Due 3/25/24 370 368
Green Tree Securitized Net Interest Margin
Trust Certificates:
Series 1994-A, 6.90%, Due 2/15/04 156 156
Series 1994-B, 7.85%, Due 7/15/04 132 133
Series 1995-A, 7.25%, Due 7/15/05 278 280
Guaranteed Mortgage Corporation III,
Series M, Class M1, 8.50%, Due 4/01/03 (c) 774 777
Merrill Lynch Home Equity Acceptance, Inc.
Subordinated Variable Rate Mortgage-
Backed Certificates, Series 1994-A, Class A-1,
6.875%, Due 8/17/23 111 105
Merrill Lynch Mortgage Investors, Inc.
Senior Subordinated Variable Rate
Pass-Thru Certificates, Series 1994-H, Class M,
6.875%, Due 6/15/19 75 69
Premier Auto Trust Asset-Backed Certificates,
Series 1992-5, Class I, Interest Only, 2.85%,
Due 3/15/98 12,334 42
RTC Variable Rate Mortgage Pass-Thru
Securities, Inc.:
Series 1995-1, Class B-5, 7.2199%, Due 10/25/28 484 474
Series 1995-1, Class M-5, 7.2199%,
Due 10/25/28 (c) 470 474
Ryland Mortgage Securities Corporation
Collaterized Mortgage Bonds, Series 1992-2,
Class B, 8.00%, Due 1/25/19 (c) $539 $ 541
-------
TOTAL NON-AGENCY MORTGAGE AND ASSET-
BACKED SECURITIES (COST $4,633) 4,708
UNITED STATES GOVERNMENT AGENCY
ISSUES 2.5%
FNMA Guaranteed Real Estate Mortgage
Investment Conduit Pass-Thru Certificates:
Series 1989-11, Class 11-C, Principal Only,
Due 1/25/14 (c) 515 503
Series 1989-73, Class A, Principal Only,
Due 8/25/14 28 26
-------
TOTAL UNITED STATES GOVERNMENT AGENCY ISSUES
(COST $523) 529
CASH EQUIVALENTS (A) 20.3%
COMMERCIAL PAPER 8.2%
DISCOUNTED 7.7%
INDONESIA 4.0%
Bakrie and Brothers PT, Due 1/26/96 1,000,000 IDR 425
Polysindo EKA Perkasa PT Senior Notes,
Due 11/20/95 1,000,000 IDR 437
-------
862
THAILAND 3.7%
Thai Oil Company, Ltd. Bills of
Exchange, Due 11/24/95 20,000 THB 789
INTEREST BEARING, DUE UPON
DEMAND 0.5%
United States Cayman Eurodollar Call
Deposit, 4.75% 100 USD 100
-------
Total Commercial Paper 1,751
TIME DEPOSITS 6.7%
CHILE
Citibank Nassau Time Deposit, 6.8203%,
Due 11/03/95 1,000 USD 1,000
Citibank Time Deposit (with Chilean
Peso indexation and interest based on the
Chilean denominated deposit), 12.40%,
Due 11/06/95 444 USD 432
-------
1,432
UNITED STATES GOVERNMENT ISSUES 5.4%
United States Treasury Bills
Due 11/16/95 $1,000 999
Due 11/24/95 (c) 155 155
-------
1,154
-------
Total Cash Equivalents (Cost $4,357) 4,337
-------
TOTAL INVESTMENTS IN SECURITIES (COST $20,422) 97.5% 20,806
Other Assets and Liabilities, Net 2.5% 529
-------
NET ASSETS 100.0% $21,335
=======
</TABLE>
See notes to financial statements.
12
<PAGE> 14
STRONG INTERNATIONAL BOND FUND (continued)
<TABLE>
<CAPTION>
UNDERLYING UNREALIZED
FUTURES AMOUNT AT APPRECIATION
EXPIRATION VALUE (DEPRECIATION)
DATE (In Thousands) (In Thousands)
---------- -------------- --------------
<S> <C> <C> <C>
Purchased:
6 Ten-Year German
Government Bonds 12/95 $1,029 $ 18
5 Ten-Year Japanese
Government Bonds 12/95 5,934 67
8 Ten-Year Italian
Government Bonds 12/95 1,025 (2)
10 Ten-Year United Kingdom
Government Bonds 12/95 843 7
Sold:
10 Ten-Year U.S. Treasury Notes 12/95 1,115 (15)
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
<CAPTION>
UNREALIZED
VALUE IN APPRECIATION
SETTLEMENT USD (DEPRECIATION)
DATE (In Thoudands) (In Thoudands)
---------- -------------- --------------
<S> <C> <C> <C> <C>
Purchased:
151,986 CHF 12/13/95 $ 134 $ 7
11,853,322 DEM 11/13/95 8,428 229
3,037,880 DEM 12/13/95 2,164 25
2,093,000 FIM 11/13/95 494 8
364,218 GBP 11/13/95 575 12
1,000,000,000 IDR 11/20/95 438 4
3,383,790,280 ITL 11/13/95 2,120 21
858,710,100 JPY 11/13/95 8,411 (216)
Sold:
46,605,843 BEF 12/13/95 1,615 (20)
212,725 CAD 12/13/95 159 (1)
151,986 CHF 12/13/95 134 (1)
3,471,000 DEM 11/13/95 2,469 (70)
4,218,500 DEM 12/13/95 3,005 (5)
1,478,300 DKK 12/13/95 271 (11)
2,133,500 DKK 1/17/96 391 (6)
2,093,000 FIM 11/13/95 494 (16)
2,000,000,000 IDR 11/20/95 876 (5)
1,000,000,000 IDR 1/12/96 432 1
200,597,500 JPY 11/13/95 1,966 34
2,500,000 NZD 11/16/95 1,650 --
20,000,000 THB 11/24/95 793 (2)
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS
-------------
INDUSTRY DIVERSIFICATION
<S> <C>
Foreign Government 44.7%
Non-Agency Single Family 14.5%
Oil - International Integrated 6.0%
U.S. Government 5.9%
Non-Agency Asset Backed 4.9%
Chemical 4.7%
Bank - Super Regional 4.2%
Non-Agency Manufactured Housing 2.7%
FNMA 2.5%
Leisure Service 2.5%
Chemical Specialty 2.0%
Conglomerate 2.0%
Oil - North American Integrated 0.9%
Other Assets and Liabilities 2.5%
-----
Net Assets 100.0%
=====
STRONG INTERNATIONAL STOCK FUND
<CAPTION>
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
--------- --------------
<S> <C> <C>
COMMON STOCKS 88.0%
ARGENTINA 1.1%
Buenos Aires Embotelladora S.A. ADR 34,500 $ 789
YPF Sociedad Anonima ADR 90,000 1,541
-------
2,330
AUSTRALIA 4.8%
AAPC, Ltd. 2,372,519 1,374
Burns, Philp & Company, Ltd. 237,646 532
Coca-Cola Amatil, Ltd. 184,914 1,431
ERG Australia, Ltd. 190,000 230
Foster's Brewing Group, Ltd. 858,000 817
John Fairfax Holdings, Ltd. 850,000 1,748
Lend Lease Corporation, Ltd. 30,376 423
MIM Holdings, Ltd. 535,691 722
The News Corporation, Ltd. 44 --
Normandy Mining, Ltd. 953,101 1,125
Novus Petroleum, Ltd. (b) 1,031,000 1,233
Woodside Petroleum, Ltd. 85,000 407
-------
10,042
AUSTRIA 0.5%
Flughafen Wien AG 16,000 1,028
BRAZIL 0.8%
Cia Vale Do Rio Doce Sponsored ADR 25,000 1,006
Telecommunicacoes Brasileiras S.A. ADR 14,370 578
-------
1,584
CHILE 0.6%
Five Arrows Chile Investment Trust, Ltd. (b) 490,000 1,317
CHINA 1.1%
China Tire Holdings, Ltd. 60,000 495
Ek Chor China Motorcycle Company, Ltd. 65,000 910
Inner Mongolia Erdos Cashmere 'B' (b) 2,080,000 936
-------
2,341
COLOMBIA 0.3%
Banco Industrial Colombiano ADR 38,000 518
DENMARK 0.3%
Scandinavian Mobility International (b) (c) 24,000 571
FINLAND 0.1%
Kymmene Corporation 7,500 205
FRANCE 4.4%
Alcatel Alsthom 4,000 342
Alcatel Cable 23,000 1,340
Bazar de L'Hotel de Ville S.A. (b) 1,600 134
Chargeurs 6,877 1,414
Compagnie Generale des Eaux 12,312 1,144
Lagardere Groupe 62,500 1,167
Salomon S.A. 1,680 969
Skis Rossignol 2,700 720
Usinor Sacilor (b) 32,534 486
Zodiac S.A. 11,000 1,518
-------
9,234
GHANA 0.8%
Ashanti Goldfields Company, Ltd. (Acquired
9/22/94 - 11/15/94; Cost $1,007) (d) 49,000 864
Ashanti Goldfields Company, Ltd. GDR 43,600 768
-------
1,632
HONG KONG 4.2%
Amoy Properties, Ltd. 1,582,000 1,524
CDL Hotels International, Ltd. 6,223,620 2,817
Great Eagle Holdings, Ltd. 138,000 378
Hang Lung Development Company, Ltd. 706,000 1,173
Hysan Development Company, Ltd. 394,000 1,004
Peregrine Investments Holdings, Ltd. 1,491,000 1,899
-------
8,795
</TABLE>
See notes to financial statements.
13
<PAGE> 15
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) October 31,1995
STRONG INTERNATIONAL STOCK FUND (continued)
<TABLE>
<CAPTION>
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
--------- --------------
<S> <C> <C>
INDIA 1.6%
The Great Eastern Shipping Company, Ltd.
GDR (b) 49,400 $ 432
The India Gateway Fund, Ltd. (b) 125,000 744
The India Gateway Fund Warrants,
Expire 5/31/97 (b) 25,000 --
Larsen & Toubro, Ltd. GDR (b) 10,000 183
Larsen & Toubro, Ltd. GDR (Acquired
12/14/94 - 2/07/95; Cost $658) (b) (d) 45,000 821
Peregrine Indian Smaller Companies Fund (b) 7,100 544
Tata Engineering and Locomotive Company
(Acquired 7/15/94; Cost $364) (d) 26,000 702
------
3,426
INDONESIA 4.1%
Astra International PT (Fgn Reg) 755,000 1,513
Bank Bali PT (Fgn Reg) 418,950 978
Bank Bali Warrants, Expire 8/29/00 (Fgn Reg) (b) 75,400 45
Bank Danamon PT (Fgn Reg) 256,000 372
Bank International Indonesia PT (Fgn Reg) 68,000 238
Bank Tiara Asia PT (Fgn Reg) 560,000 653
Bukaka Teknik Utama PT IDR (b) 782,000 1,188
Duta Anggada PT (Fgn Reg) 1,162,000 729
Indocement Tunggal PT (Fgn Reg) 95,000 351
Komatsu Indonesia (Fgn Reg) (b) 636,500 561
Matahari Putra Prima PT (Fgn Reg) 644,000 1,347
Semen Cibinong PT (Fgn Reg) 266,000 697
------
8,672
IRELAND 0.4%
Allied Irish Banks PLC 180,600 919
ISRAEL 0.8%
Ampal-American Israel Corporation of South
Africa Class A (b) 125,300 705
Gilat Satellite Networks, Ltd. (b) 48,000 1,068
------
1,773
ITALY 3.3%
Bulgari Spa (b) 138,000 1,200
Costa Crociere Spa 403,000 865
De Rigo Spa ADR (b) 31,400 648
Filatura del Brembo Spa 5,500 69
Gucci Group NV (b) 20,000 600
Olivetti Spa 934,000 698
Pininfarina Spa 177,600 1,606
STET - Societa' Finanziaria Telefonica P.A. 205,000 581
Telecom Italia Mobile Spa (b) 220,000 369
Telecom Italia Spa 220,000 334
------
6,970
JAPAN 18.4%
Alpine Electronics, Inc. 74,000 1,028
Best Denki Warrants, Expire 5/14/97 (b) 1,400 595
Canon, Inc. 61,000 1,044
Charle Company 23,000 333
Chubu Steel Plate Company, Ltd. 171,000 853
Citizen Watch Company, Ltd. Warrants, Expire
10/22/96 (b) 4,550 455
DDI Corporation 200 1,622
East Japan Railway Company 225 1,063
Enplas Corporation 50,000 1,086
Fuji Photo Film Company, Ltd. 40,000 990
HIS Company, Ltd. 27,500 1,062
Heiwa Corporation 35,000 931
Hitachi, Ltd. 180,000 1,849
Ishikawajima Harima Heavy Industries
Company, Ltd. 385,000 1,551
Ito-Yokado, Ltd. 22,000 1,203
Komori Corporation 73,000 1,728
Kumagai Gumi Company, Ltd. 232,000 889
Marubeni Corporation 394,000 1,919
Mitsubishi Corporation 97,000 1,072
Mitsui Fudosan 101,000 1,156
Mitsui Trust & Banking Company, Ltd. 110,000 880
Morgan Stanley Group, Inc. Nikkei 225 Index
Call Warrants (b) 146,800 $ 789
Mori Seiki Company, Ltd. 83,000 1,640
Nippon Telegraph & Telephone Corporation 281 2,306
Nomura Securities Company, Ltd. 198,000 3,621
Ohmoto Gumi Company, Ltd. 70,000 1,575
Olympus Optical Company, Ltd. Warrants,
Expire 12/03/96 (b) 4,895 857
Renown, Inc. (b) 23,000 63
Sharp Corporation 40,000 556
Sony Corporation 12,000 540
TOC Company, Ltd. 183,000 1,706
Toho Company 9,110 1,283
Yodogawa Steel Work Warrants, Expire 12/10/97 (b) 550 591
------
38,836
MALAYSIA 2.4%
ACP Industries BHD 270,000 1,084
Arab-Malaysian Corporation 206,000 693
Batu Kawan BHD 222,000 494
Cycle & Carriage Bintang BHD 103,000 426
IJM Corporation BHD 'A' 340,000 559
Kuala Lumpur Kepong BHD 230,000 620
Road Builder Holdings BHD 362,000 1,118
------
4,994
NETHERLANDS 0.4%
Philips Electronics N.V. ADR 24,000 927
NEW ZEALAND 5.9%
Air New Zealand, Ltd. Class B 573,000 1,974
Brierley Investments, Ltd. 350,114 273
CDL Hotels New Zealand, Ltd. (b) 1,206,000 509
Carter Holt Harvey, Ltd. 471,321 1,126
Fernz Corporation, Ltd. 416,320 1,231
Fletcher Challenge, Ltd. Forestry Division 941,031 1,298
Fletcher Challenge, Ltd. Ordinary Division 189,000 500
Guinness Peat Group PLC 4,080,000 2,074
Helicopter Line, Ltd. 233,000 677
Sky City, Ltd. (b) 108,000 2,246
Wrightson, Ltd. 800,000 644
------
12,552
NORWAY 3.1%
Braathens S.A.F.E. 5,250 267
Dual Investments (b) 83,000 540
Fokus Bank (b) (c) 100,000 530
SensoNor AS (b) 325,000 2,767
Tomra Systems A/S 373,000 2,355
------
6,459
PAPUA/NEW GUINEA 0.2%
Lihir Gold, Ltd. (b) 300,000 338
PERU 0.2%
Banco de Credito del Peru 290,861 476
PHILIPPINES 0.7%
Engineering Equipment, Inc. 6,172,000 403
SM Prime Holdings, Inc. GDR 77,800 1,050
------
1,453
RUSSIA 1.3%
The Central European Growth Fund PLC 2,157,000 1,381
First NIS Regional Fund (b) 40,000 262
The Fleming Russia Securities Fund, Ltd.
(Acquired 8/17/94 - 9/28/94; Cost $1,661) (b) (d) 165,000 1,114
------
2,757
SINGAPORE 6.0%
Acma, Ltd. 274,800 895
Dairy Farm International Holdings, Ltd. 373,518 306
The Development Bank of Singapore, Ltd.
(Fgn Reg) 165,000 1,892
Hongkong Land Holdings, Ltd. 758,142 1,365
Jardine Matheson Holdings, Ltd. 104,808 639
Jardine Strategic Holdings, Ltd. 419,625 1,129
</TABLE>
See notes to financial statements.
14
<PAGE> 16
STRONG INTERNATIONAL STOCK FUND (continued)
<TABLE>
<CAPTION>
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
--------- --------------
<S> <C> <C>
Jardine Strategic Holdings, Ltd. Warrants,
Expire 5/02/98 (b) 46,625 $ 12
Keppel Corporation, Ltd. 292,000 2,397
Overseas Union Bank (c) 310,000 1,931
Pacific Carriers, Ltd. 412,000 367
ST Computer Systems & Services, Ltd.
(Fgn Reg) (b) 759,000 612
United Overseas Land, Ltd. 644,000 1,158
--------
12,703
SOUTH AFRICA 2.7%
Anglo American Corporation of South Africa 26,400 1,502
De Beers Consolidated Mines, Ltd. ADR 29,000 798
Genbel Investments, Ltd. 496,000 1,312
Malbak, Ltd. (Acquired 7/25/95; Cost $433) (d) 75,000 499
Safmarine and Rennies Holdings, Ltd. 255,000 891
Wooltru, Ltd. 125,000 703
--------
5,705
SOUTH KOREA 2.6%
Daeyu Securities Company, Ltd. (b) 40,000 429
Kookmin Bank (b) 65,021 1,249
Korea Electric Power Corporation 38,210 1,573
Korean Air Lines Company, Ltd. (b) 33,218 1,168
Ssangyong Investment & Securities Company,
Ltd. (b) 54,920 1,134
--------
5,553
SPAIN 1.2%
Fomento de Construcciones y Contratas S.A. 9,600 679
Repsol S.A. ADR 22,000 652
Telefonica de Espana S.A. 96,000 1,212
--------
2,543
SWEDEN 1.2%
Argonaut AB B Shares (b) 600,000 922
Arjo AB 61,550 955
Terra Mining AB 33,000 567
--------
2,444
SWITZERLAND 3.1%
Financiere Richemont AG CIE Units 450 626
Nestle AG 1,950 2,044
Reisebuero Kuoni AG 600 956
SGS (Societe Generale de Surveillance) Holdings S.A. 1,050 1,984
SMH (Suisse Microelectronique et d'Horlogerie) 500 312
Swiss Bank Corporation 1,800 739
--------
6,661
TAIWAN 1.8%
Core Pacific Pioneer Fund 2,011,000 507
Evergreen Marine Corporation 368,500 553
Jardine Fleming Fund 1,835,000 595
Kwang Hua Fortune Fund 1,586,000 526
NITC Fu-yuan Fund 1,579,000 570
The Taiwan Fund, Inc. 24,000 525
Yuan Ta Duo Yuan Fund 1,759,000 629
--------
3,905
THAILAND 3.1%
Loxley PCL (Fgn Reg) 46,400 885
The Ruam Pattana Two Fund (Fgn Reg) (b) 2,473,300 1,548
Saha Union PCL (Fgn Reg) 689,800 822
Sahavirya Steel Industries PCL (b) 510,000 780
Thai Airways International PCL (Fgn Reg) (b) 223,000 401
Thai Prime Fund, Ltd. 80,000 1,200
Total Access Communication Public, Ltd.
(Acquired 9/28/95; Cost $997) (b) (d) 158,000 956
--------
6,592
UNITED KINGDOM 3.8%
De La Rue PLC 123,000 1,753
Invesco PLC 182,000 702
Ladbroke Group PLC 269,534 707
Lonrho PLC 499,717 1,236
News International PLC 128,000 $ 577
Pearson PLC 47,000 467
The RTZ Corporation PLC 84,000 1,163
Royal Bank of Scotland PLC 66,286 537
Tomkins PLC 255,000 1,006
--------
8,148
UNITED STATES 0.7%
Harken Energy Corporation (b) 300,000 525
Teekay Shipping Corporation 44,000 1,023
--------
1,548
--------
TOTAL COMMON STOCKS (COST $197,092) 185,951
PREFERRED STOCKS 0.8%
AUSTRALIA
The News Corporation, Ltd. Voting 145,191 664
Sydney Harbour Casino, Ltd. (Acquired 5/30/95;
Cost $706) (b) (d) 765,000 944
--------
TOTAL PREFERRED STOCKS (COST $1,312) 1,608
CONVERTIBLE CORPORATE BONDS 1.0%
JAPAN
MBL International Finance Bermuda Trust
Convertible Notes, 3.00%, Due 11/30/02
(Cost $2,100) 2,100 USD 2,195
NON-CONVERTIBLE CORPORATE BONDS 1.4%
NEW ZEALAND
Government of New Zealand Notes, 8.00%,
Due 11/15/06 (Cost $2,901) 4,190 NZD 2,919
CASH EQUIVALENTS (a) 6.9%
COMMERCIAL PAPER 0.9%
EURODOLLAR COMMERCIAL PAPER 0.8%
INDONESIA
Polysindo EKA Perkasa PT Senior Notes,
Due 11/20/95 4,000,000 IDR 1,750
INTEREST BEARING, DUE UPON DEMAND 0.1%
UNITED STATES
United States Cayman Eurodollar Call
Deposit, 4.75% 109 USD 109
--------
Total Commercial Paper 1,859
CONVERTIBLE CORPORATE BONDS 0.4%
RUSSIA 0.4%
JSC Oil Company LUKoil Convertible
Bonds, Zero %, Due 4/06/96 (Acquired
9/20/95; Cost $1,155) (d) 1 USD 863
TIME DEPOSITS 5.6%
UNITED STATES
First National Bank Chicago Time Deposit,
Due 11/01/95 $ 1,400 1,400
Wachovia Time Deposit, Due 11/01/95 10,500 10,500
--------
11,900
--------
Total Cash Equivalents (Cost $14,931) 14,622
--------
TOTAL INVESTMENTS IN SECURITIES
(COST $218,336) 98.1% 207,295
Other Assets and Liabilities, Net 1.9% 4,110
--------
NET ASSETS 100.0% $211,405
========
</TABLE>
See notes to financial statements.
15
<PAGE> 17
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) October 31, 1995
STRONG INTERNATIONAL STOCK FUND (continued)
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
<TABLE>
<CAPTION>
UNREALIZED
VALUE IN APPRECIATION
SETTLEMENT USD (DEPRECIATION)
DATE (IN THOUSANDS) (IN THOUSANDS)
---------- -------------- --------------
<S> <C> <C> <C> <C>
Purchased:
4,000,000,000 IDR 11/20/95 $ 1,752 $ 16
Sold:
25,000,000 FRF 2/15/96 5,113 (47)
4,925,000 FRF 4/25/96 1,006 (6)
6,783,699 GBP 4/04/96 10,693 25
8,000,000,000 IDR 11/20/95 3,504 (22)
1,461,772,751 JPY 2/05/96 14,518 2,020
2,775,073,249 JPY 2/15/96 27,603 2,074
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY DIVERSIFICATION NET ASSETS
------------
<S> <C>
Conglomerate 9.9%
Bank - Money Center 7.0
Leisure Service 6.9
Closed-End Fund 5.4
Real Estate 5.3
Engineering & Construction 4.9
Telecommunication Service 3.8
Electronic Products - Miscellaneous 3.7
Metals & Mining 3.7
Brokerage & Investment Management 3.4
Machinery - Miscellaneous 2.9
Automobile 2.4
Finance - Miscellaneous 2.3
Oil - International Integrated 2.1
Media - Publishing 1.9
Airline 1.8
Shipping 1.8
Steel 1.8
Consumer - Miscellaneous 1.7
Auto & Truck Parts 1.6
Leisure Product 1.5
Paper & Forest Products 1.5
Foreign Government 1.4
Telecommunication Equipment 1.3
Agricultural Operations 1.2
Food 1.2
Beverage - Soft Drink 1.1
Shoe & Apparel Manufacturing 1.0
Retail - Food Chain 0.9
Retail - Specialty 0.9
Machine Tool 0.8
Electric Power 0.7
Healthcare - Medical Supply 0.7
Retail - Department Store 0.7
Electronic Instrumentation 0.5
Railroad 0.5
Transportation Service 0.5
Beverage - Alcoholic 0.4
Index Based 0.4
Computer Service 0.3
Machinery - Construction & Mining 0.3
Other Assets and Liabilities 7.9
-----
Net Assets 100.0%
=====
</TABLE>
STRONG ASIA PACIFIC FUND
<TABLE>
<CAPTION>
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (IN THOUSANDS)
--------- --------------
<S> <C> <C>
COMMON STOCKS 88.1%
AUSTRALIA 7.1%
AAPC, Ltd. 692,560 $ 401
Burns, Philp & Company, Ltd. 60,715 136
Casinos Austria International, Ltd. (b) 555,000 359
Coca-Cola Amatil, Ltd. 62,301 482
ERG Australia, Ltd. 70,000 85
Foster's Brewing Group, Ltd. 286,000 272
John Fairfax Holdings, Ltd. 310,000 638
Lend Lease Corporation, Ltd. 12,938 180
MIM Holdings, Ltd. 93,390 126
The News Corporation, Ltd. 22 -
Normandy Mining, Ltd. 253,203 299
Novus Petroleum, Ltd. (b) 316,000 378
Sydney Aquarium, Ltd. 197,500 328
Woodside Petroleum, Ltd. 35,000 168
------
3,852
CHINA 1.6%
China Tire Holdings, Ltd. 32,600 269
Ek Chor China Motorcycle Company, Ltd. 25,800 361
Inner Mongolia Erdos Cashmere 'B' (b) 557,000 251
------
881
HONG KONG 4.1%
Amoy Properties, Ltd. 538,000 518
CDL Hotels International, Ltd. 1,576,887 714
Great Eagle Holdings, Ltd. 48,000 132
Hang Lung Development Company, Ltd. 164,000 273
Hysan Development Company, Ltd. 82,000 209
Peregrine Investments Holdings, Ltd. 344,000 438
------
2,284
INDIA 2.7%
Bajaj Auto, Ltd. GDR (Acquired 10/28/94;
Cost $228) (b) (d) 9,000 243
The Great Eastern Shipping Company, Ltd.
GDR (Acquired 1/18/94; Cost $295) (b) (d) 18,500 162
The Great Eastern Shipping Company, Ltd.
GDR (b) 15,000 131
The India Gateway Fund, Ltd. (b) 25,000 149
The India Gateway Fund, Warrants,
Expire 5/31/97 (b) 5,000 --
Larsen & Toubro, Ltd. GDR (Acquired 11/18/94;
Cost $334) (b) (d) 20,000 365
Peregrine Indian Smaller Companies Fund (b) 2,000 153
Tata Electric Companies GDS (Acquired 2/22/94;
Cost $248) (d) 350 115
Tata Engineering and Locomotive Company
(Acquired 7/15/94; Cost $84) (d) 6,000 162
------
1,480
INDONESIA 8.1%
Astra International PT (Fgn Reg) 229,000 459
Bank Bali PT (Fgn Reg) 157,100 367
Bank Bali Warrants, Expire 8/29/00 (Fgn Reg) (b) 29,200 17
Bank Danamon PT (Fgn Reg) 100,000 145
Bank International Indonesia PT (Fgn Reg) 19,000 67
Bank Tiara Asia PT (Fgn Reg) 250,000 292
Bimantara Citra PT (Fgn Reg) (b) 46,000 35
Bukaka Teknik Utama PT IDR (b) 379,000 576
Duta Anggada PT (Fgn Reg) 441,000 277
Indocement Tunggal PT (Fgn Reg) 57,000 211
Komatsu Indonesia (Fgn Reg) 494,000 435
Matahari Putra Prima PT (Fgn Reg) 217,000 454
Putra Surya Perkasa PT (Fgn Reg) 283,333 106
Sekar Bumi (Fgn Reg) (b) 180,500 226
Semen Cibinong PT (Fgn Reg) 73,000 191
Tambang Timah PT (Persero) GDR Series B
(Acquired 10/06/95; Cost $598) (b) (d) 47,000 565
------
4,423
JAPAN 22.4%
Aderans Company, Ltd. Warrants,
Expire 8/19/97 (CHF) (b) 800 66
Alpine Electronics, Inc. 22,000 306
</TABLE>
See notes to financial statements.
16
<PAGE> 18
<TABLE>
<CAPTION>
STRONG ASIA PACIFIC FUND (continued)
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (In Thousands)
----------- ------------
<S> <C> <C>
Bunkyodo Japan Company 3,200 $ 72
Canon, Inc. 19,000 325
Charle Company 6,000 87
Chubu Steel Plate Company, Ltd. (b) 65,000 324
Citizen Watch Company, Ltd. Warrants,
Expire 10/22/96 (b) 1,600 160
DDI Corporation 65 527
East Japan Railway Company 76 359
Enplas Corporation 24,000 521
Fuji Photo Film Company, Ltd. 16,000 396
HIS Company, Ltd. 11,000 425
Heiwa Corporation 11,000 293
Hitachi, Ltd. 48,000 493
Hokuetsu Metal 44,000 172
Ishikawajima Harima Heavy Industries
Company, Ltd. 115,000 463
Ito-Yokado, Ltd. 6,000 328
Komori Corporation 19,000 450
Kumagai Gumi Company, Ltd. 65,000 249
Marubeni Corporation 111,000 541
Maspro Denkoh Corporation 1,200 17
Mitsubishi Corporation 38,000 420
Mitsui Fudosan 29,000 332
Mitsui Trust & Banking Company, Ltd. 34,000 272
Morgan Stanley Group, Inc. Nikkei 225 Index
Call Warrants (b) 42,000 226
Mori Seiki Company, Ltd. 21,000 415
Murakami Corporation 4,400 57
Nippon Telegraph & Telephone Corporation 68 558
Nomura Securities Company, Ltd. 68,000 1,244
Ohmoto Gumi Company, Ltd. 10,400 234
Olympus Optical Company, Ltd. Warrants,
Expire 12/03/96 (b) 1,500 262
Sharp Corporation 13,000 180
Sony Corporation 3,200 144
Tobu Store Company, Ltd. Warrants,
Expire 1/21/97 (b) 200 47
TOC Company, Ltd. 49,000 457
Toho Company 2,010 283
Toko Seiki Company 26,000 203
Tokyo Tungsten Company 25,000 245
Yodogawa Steel Work Warrants,
Expire 12/10/97 (b) 100 108
-------
12,261
MALAYSIA 3.8%
ACP Industries BHD 111,000 446
Arab-Malaysian Corporation 53,000 178
Batu Kawan BHD 58,000 129
Cycle & Carriage Bintang BHD 50,000 207
IJM Corporation BHD 'A' 148,000 243
Kuala Lumpur Kepong BHD 56,000 151
Petronas Gas BHD (b) 25,000 85
Road Builder Holdings BHD 138,000 426
Selangor Dredging BHD 386,000 219
-------
2,084
NEW ZEALAND 9.9%
Air New Zealand, Ltd. Class B 162,000 558
CDL Hotels New Zealand, Ltd. (b) 502,000 212
Carter Holt Harvey, Ltd. 161,000 385
Corporate Investments, Ltd. (b) 850,000 191
Evergreen Forests, Ltd. (b) 1,200,000 594
Fernz Corporation, Ltd. 83,470 247
Fletcher Challenge, Ltd. Forestry Division 373,452 515
Fletcher Challenge, Ltd. Ordinary Division 3,000 8
Guinness Peat Group PLC 1,650,000 838
Helicopter Line, Ltd. 136,600 397
Hellaby Holdings, Ltd. 1,100,000 218
Lane Walker Rudkin Industries, Ltd. 110,000 120
Port of Tauranga, Ltd. 41,000 34
Ports of Auckland, Ltd. 40,000 93
Progressive Enterprises, Ltd. 79,000 63
SEABIL (NZ), Ltd. 200,000 111
Sky City, Ltd. (b) 40,000 832
-------
5,416
PAKISTAN 0.2%
Pakistan Telecommunication Company, Ltd. GDR
(Acquired 9/16/94; Cost $180) (b) (d) 1,000 96
PAPUA/NEW GUINEA 0.6%
Lihir Gold, Ltd. (b) 300,000 338
PHILIPPINES 1.7%
Benpres Holdings Corporation GDR
(Acquired 10/25/94; Cost $580) (d) 59,080 354
Engineering Equipment, Inc. 3,000,000 196
Philippine National Bank (b) 19,890 167
SM Prime Holdings, Inc. GDR
(Acquired 6/15/94; Cost $126) (d) 16,351 221
-------
938
RUSSIA 0.4%
The Fleming Russia Securities Fund, Ltd.
(Acquired 8/17/94-9/28/94; Cost $366) (b) (d) 36,000 243
SINGAPORE 10.3%
Acma, Ltd. 172,800 563
Bukit Sembawang Estates, Inc. 14,000 299
Comfort Group, Ltd. 172,000 144
Cosco Investments, Ltd. 204,000 267
Dairy Farm International Holdings, Ltd. 130,700 107
The Development Bank of Singapore, Ltd.
(Fgn Reg) 50,000 573
Fraser & Neave, Ltd. 12,700 150
GB Holdings, Ltd. 324,000 210
Hongkong Land Holdings, Ltd. 276,737 498
Jardine Matheson Holdings, Ltd. 25,326 154
Jardine Strategic Holdings, Ltd. 114,750 309
Jardine Strategic Holdings, Ltd. Warrants,
Expire 5/02/98 (b) 12,750 3
Keppel Corporation, Ltd. 70,000 575
Lim Kah Ngam, Ltd. 152,000 166
Overseas Union Bank 100,000 623
Pacific Carriers, Ltd. 100,000 89
Singapore Sesdaq Fund (b) 23,000 425
ST Computer Systems & Services, Ltd.
(Fgn Reg) (b) 125,000 101
United Overseas Land, Ltd. 199,000 358
-------
5,614
SOUTH AFRICA 0.6%
Anglo American Corporation of South Africa 6,100 347
SOUTH KOREA 2.7%
Hana Bank (b) 19,452 407
Korea Electric Power Corporation 13,800 568
Korean Air Lines Company, Ltd. (b) 7,200 253
Ssangyong Investment & Securities
Company, Ltd. (b) 13,024 269
-------
1,497
TAIWAN 3.7%
Core Pacific Pioneer Fund 546,000 138
Evergreen Marine Corporation 103,400 155
Jardine Fleming Fund 520,000 169
Kwang Hua Fortune Fund 449,000 149
NITC Fu-yuan Fund 447,000 161
Siliconware Precision Industries Company,
Ltd. GDR (Acquired 9/19/95;
Cost $593) (b) (d) 39,000 614
The R.O.C. Taiwan Fund (b) 45,000 433
Yuan Ta Duo Yuan Fund 506,000 181
-------
2,000
THAILAND 6.7%
Alphatec Electronics PCL (Fgn Reg) (b) 17,000 222
Land & Houses PCL (Fgn Reg) 15,000 242
Loxley PCL (Fgn Reg) 16,000 305
Matichon Newspaper PCL (Fgn Reg) 55,000 277
Property Perfect Public Company, Ltd. (Fgn Reg) 35,000 266
The Ruam Pattana Two Fund (Fgn Reg) (b) 495,000 310
</TABLE>
See notes to financial statements.
17
<PAGE> 19
<TABLE>
<CAPTION>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) October 31, 1995
STRONG ASIA PACIFIC FUND (continued)
SHARES OR VALUE
PRINCIPAL (NOTE 2)
AMOUNT (IN THOUSANDS)
---------- ------------
<S> <C> <C>
Saha Union PCL (Fgn Reg) 382,700 $ 456
Sahaviriya Steel Industries PCL (b) 180,000 275
Sri Trang Agro-Industry PCL (Fgn Reg) (b) 125,000 189
Thai Airways International PCL (Fgn Reg) (b) 42,000 75
Thai Prime Fund, Ltd. 31,000 465
Total Access Communication Public, Ltd.
(Acquired 9/28/95; Cost $581) (b) (d) 92,000 557
-------
3,639
UNITED KINGDOM 0.3%
News International PLC 32,000 144
UNITED STATES 0.7%
Teekay Shipping Corporation 16,000 372
VIETNAM 0.5%
Beta Mekong Fund, Ltd. (b) 5,000 250
-------
TOTAL COMMON STOCKS (COST $53,042) 48,159
PREFERRED STOCKS 1.5%
AUSTRALIA 1.0%
Macmahon Holdings, Ltd. 160,000 74
The News Corporation, Ltd. Voting 35,754 163
Sydney Harbour Casino, Ltd. (Acquired 5/30/95;
Cost $217) (b) (d) 235,000 290
-------
527
SOUTH KOREA 0.5%
Korean Air Lines Company, Ltd. (b) 14,860 291
-------
TOTAL PREFERRED STOCKS (COST $684) 818
CONVERTIBLE CORPORATE BONDS 1.0%
JAPAN
MBL International Finance Bermuda Trust
Convertible Notes, 3.00%,
Due 11/30/02 (Cost $530) 530 USD 554
NON-CONVERTIBLE CORPORATE BONDS 1.6%
NEW ZEALAND
Government of New Zealand Notes, 8.00%,
Due 11/15/06 (Cost $844) 1,220 NZD 850
CASH EQUIVALENTS (a) 7.3%
COMMERCIAL PAPER 0.9%
EURODOLLAR COMMERCIAL PAPER 0.8%
INDONESIA
Polysindo EKA Perkasa PT Senior Notes,
Due 11/20/95 1,000,000 IDR 437
INTEREST BEARING, DUE UPON DEMAND 0.1%
UNITED STATES
United States Cayman Eurodollar Call Deposit,
4.75% 76 USD 76
-------
Total Commercial Paper 513
TIME DEPOSITS 6.4%
UNITED STATES
First National Bank Chicago Time Deposit,
Due 11/01/95 2,700 USD 2,700
Wachovia Time Deposit, Due 11/01/95 800 USD 800
-------
3,500
-------
Total Cash Equivalents (Cost $4,018) 4,013
-------
TOTAL INVESTMENTS IN SECURITIES
(COST $59,118) 99.5% 54,394
Other Assets and Liabilities, Net 0.5% 254
-------
NET ASSETS 100.0% $54,648
=======
</TABLE>
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
<TABLE>
<CAPTION>
UNREALIZED
APPRECIATION
VALUE IN (DEPRECIATION)
SETTLEMENT USD
DATE (In Thousands) (In Thousands)
---------- ------------ ------------
<S> <C> <C> <C> <C>
Purchased:
1,000,000,000 IDR 11/20/95 $ 438 $ 4
Sold:
2,000,000,000 IDR 11/20/95 876 (6)
1,056,338,758 JPY 2/15/96 10,507 748
356,781,242 JPY 2/05/96 3,544 491
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY DIVERSIFICATION NET ASSETS
<S> <C>
Real Estate............................................... 8.3%
Conglomerate.............................................. 8.2
Leisure Service........................................... 7.8
Bank - Money Center....................................... 6.7
Engineering & Construction................................ 6.1
Closed-End Fund........................................... 5.9
Electronic Products - Miscellaneous....................... 4.1
Metals & Mining........................................... 3.9
Brokerage & Investment Management......................... 3.6
Telecommunication Service................................. 3.2
Paper & Forest Products .................................. 2.7
Automobile................................................ 2.6
Machinery - Miscellaneous................................. 2.4
Airline................................................... 2.2
Media - Publishing........................................ 2.2
Shipping.................................................. 2.2
Shoe & Apparel Manufacturing.............................. 1.7
Foreign Government........................................ 1.6
Electronics - Semiconductor/Component..................... 1.5
Steel..................................................... 1.3
Electric Power............................................ 1.2
Beverage - Soft Drink..................................... 1.2
Consumer - Miscellaneous.................................. 1.1
Agricultural Operations................................... 1.1
Oil - International Integrated............................ 1.0
Retail - Department Store................................. 0.8
Retail - Food Chain....................................... 0.8
Machinery - Construction & Mining......................... 0.8
Machine Tool.............................................. 0.8
Food...................................................... 0.7
Railroad.................................................. 0.7
Auto & Truck Parts........................................ 0.6
Electronic Instrumentation................................ 0.6
Transportation Service.................................... 0.6
Beverage - Alcoholic...................................... 0.5
Index Based .............................................. 0.4
Leisure Product........................................... 0.4
Retail - Major Chain...................................... 0.3
Finance - Miscellaneous................................... 0.3
Computer Service.......................................... 0.2
Natural Gas Distribution.................................. 0.2
Other Assets and Liabilities 7.5
------
Net Assets 100.0%
======
</TABLE>
LEGEND
(a) Cash equivalents include any security which has a maturity of less than one
year.
(b) Non-income producing security.
(c) Security pledged to cover margin requirements for futures contracts.
(d) Restricted security.
All principal amounts and costs are stated in thousands.
Percentages are stated as a percent of net assets.
CURRENCY ABBREVIATIONS
<TABLE>
<S> <C>
BEF Belgian Franc
CAD Canadian Dollar
CHF Swiss Franc
DEM German Mark
DKK Danish Krona
FIM Finnish Mark
FRF French Franc
GBP British Pound
IDR Indonesian Rupiah
IEP Irish Punt
ITL Italian Lira
JPY Japanese Yen
NOK Norwegian Kroner
NZD New Zealand Dollar
THB Thailand Baht
USD United States Dollar
See notes to financial statements.
</TABLE>
18
<PAGE> 20
STATEMENTS OF OPERATIONS
For the Period Ended October 31, 1995 (Note 1)
<TABLE>
<CAPTION>
(In Thousands)
STRONG SHORT-TERM STRONG INTERNATIONAL
GLOBAL BOND FUND BOND FUND
---------------- ---------
<S> <C> <C>
INTEREST INCOME $1,212 $ 990
EXPENSES:
Investment Advisory Fees 92 83
Custodian Fees 88 97
Shareholder Servicing Costs 36 25
Reports to Shareholders 23 17
Federal and State Registration Fees 43 39
Other 20 21
------ ------
Total Expenses before Waivers and Absorptions 302 282
Expense Waivers and Absorptions by Advisor:
Voluntary (297) (239)
Involuntary (5) (43)
------ ------
Expenses, Net -- --
------ ------
NET INVESTMENT INCOME 1,212 990
REALIZED AND UNREALIZED GAIN (LOSS):
Net Realized Gain (Loss) on:
Investments (229) 469
Futures Contracts, Options and Forward Currency Contracts 118 206
Foreign Currencies 12 (217)
Change in Unrealized Appreciation/Depreciation on:
Investments 382 279
Futures Contracts, Options, and Forward Currency Contracts (115) 49
Assets and Liabilities Denominated in Foreign Currencies 2 12
------ ------
NET GAIN 170 798
------ ------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,382 $1,788
====== ======
</TABLE>
19
See notes to financial statements.
<PAGE> 21
STATEMENTS OF OPERATIONS
For the Period Ended October 31, 1995 (Note 1)
<TABLE>
<CAPTION>
(In Thousands)
STRONG INTERNATIONAL STRONG ASIA
STOCK FUND PACIFIC FUND
-------------------- ------------
<S> <C> <C>
INCOME:
Dividends (net of withholding taxes of $459 and $100, respectively) $3,810 $ 800
Interest 1,070 380
------ ------
Total Income 4,880 1,180
EXPENSES:
Investment Advisory Fees 1,900 471
Custodian Fees 481 235
Shareholder Servicing Costs 670 218
Reports to Shareholders 184 63
Federal and State Registration Fees 89 51
Other 64 23
------ ------
Total Expenses before Involuntary Expense Waiver 3,388 1,061
Involuntary Expense Waiver by Advisor -- (115)
------ ------
Expenses, Net 3,388 946
------ ------
NET INVESTMENT INCOME 1,492 234
REALIZED AND UNREALIZED GAIN (LOSS):
Net Realized Gain (Loss) on:
Investments (846) (380)
Futures Contracts, Options and Forward Currency Contracts 231 70
Foreign Currencies (191) (59)
Change in Unrealized Appreciation/Depreciation on:
Investments 2,318 510
Futures Contracts, Options and Forward Currency Contracts 4,236 1,277
Assets and Liabilities Denominated in Foreign Currencies (5) --
------ ------
NET GAIN 5,743 1,418
------ ------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $7,235 $1,652
====== ======
</TABLE>
20
See notes to financial statements.
<PAGE> 22
STATEMENTS OF ASSETS AND LIABILITIES
October 31, 1995
<TABLE>
<CAPTION>
(In Thousands, Except Per Share Amounts)
STRONG SHORT-TERM STRONG INTERNATIONAL
GLOBAL BOND FUND BOND FUND
---------------- ---------
<S> <C> <C>
ASSETS:
Investments in Securities, at Value (Cost of $25,120 and $20,422, respectively) $ 25,476 $ 20,806
Receivable from Brokers for Securities and Forward Foreign Currency Contracts Sold 998 893
Receivable for Fund Shares Sold 82 122
Interest Receivable 433 507
Other 90 102
----------- -----------
Total Assets 27,079 22,430
LIABILITIES:
Payable to Brokers for Securities and Forward Foreign Currency Contracts Purchased 1,767 1,012
Payable for Fund Shares Redeemed 64 9
Payable to Advisor for Organizational Costs 77 74
----------- -----------
Total Liabilities 1,908 1,095
----------- -----------
NET ASSETS $ 25,171 $ 21,335
=========== ===========
Capital Shares
Authorized 10,000,000 10,000,000
Outstanding 2,407 1,859
NET ASSET VALUE PER SHARE $ 10.46 $ 11.48
=========== ===========
<CAPTION>
STRONG INTERNATIONAL STRONG ASIA
STOCK FUND PACIFIC FUND
---------- ------------
<S> <C> <C>
ASSETS:
Investments in Securities, at Value (Cost of $218,336 and $59,118, respectively) $ 207,295 $ 54,394
Receivable from Brokers for Securities and Forward Foreign Currency Contracts Sold 19,686 5,677
Receivable for Fund Shares Sold 803 55
Dividends and Interest Receivable 764 172
Other 119 346
----------- -----------
Total Assets 228,667 60,644
LIABILITIES:
Payable to Brokers for Securities and Forward Foreign Currency Contracts Purchased 16,175 5,157
Payable for Fund Shares Redeemed 738 716
Accrued Operating Expenses and Other Liabilities 349 123
----------- -----------
Total Liabilities 17,262 5,996
----------- -----------
NET ASSETS $ 211,405 $ 54,648
=========== ===========
Capital Shares
Authorized 10,000,000 10,000,000
Outstanding 16,220 5,724
NET ASSET VALUE PER SHARE $ 13.03 $ 9.55
=========== ===========
</TABLE>
21
See notes to financial statements.
<PAGE> 23
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
(In Thousands)
STRONG SHORT-TERM STRONG INTERNATIONAL
GLOBAL BOND FUND BOND FUND
----------------------------- --------------------------------
PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED
OCT. 31, 1995 DEC. 31, 1994 OCT. 31, 1995 DEC. 31, 1994
------------- ------------- ------------- -------------
(NOTE 1) (NOTE 1)
<S> <C> <C> <C> <C>
OPERATIONS:
Net Investment Income $ 1,212 $ 576 $ 990 $ 414
Net Realized Gain (Loss) (99) (153) 458 (97)
Change in Unrealized Appreciation/Depreciation 269 (53) 340 110
-------- -------- ------- -------
Increase in Net Assets Resulting from Operations 1,382 370 1,788 427
CAPITAL SHARE TRANSACTIONS 5,072 19,819 10,451 9,873
DISTRIBUTIONS:
From Net Investment Income (965) (576) (850) (414)
In Excess of Net Investment Income -- (4) -- (20)
In Excess of Net Realized Gains -- (27) -- (20)
-------- -------- ------- -------
TOTAL INCREASE IN NET ASSETS 5,489 19,582 11,389 9,846
NET ASSETS:
Beginning of Period 19,682 100 9,946 100
-------- -------- ------- -------
End of Period $ 25,171 $ 19,682 $21,335 $ 9,946
======== ======== ======= =======
</TABLE>
<TABLE>
<CAPTION>
STRONG INTERNATIONAL STRONG ASIA
STOCK FUND PACIFIC FUND
---------------------------- -----------------------------
PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED
OCT. 31, 1995 DEC. 31, 1994 OCT. 31, 1995 DEC. 31, 1994
------------- ------------- ------------- -------------
(NOTE 1) (NOTE 1)
<S> <C> <C> <C> <C>
OPERATIONS:
Net Investment Income $ 1,492 $ 869 $ 234 $ 299
Net Realized Gain (Loss) (806) 17,932 (369) (73)
Change in Unrealized Appreciation/Depreciation 6,549 (27,840) 1,787 (5,276)
-------- -------- ------- -------
Increase (Decrease) in Net Assets Resulting from Operations 7,235 (9,039) 1,652 (5,050)
CAPITAL SHARE TRANSACTIONS (52,367) 162,477 (4,451) 63,428
DISTRIBUTIONS:
From Net Investment Income (1,293) (73) (234) (34)
In Excess of Net Investment Income -- -- (43) --
From Net Realized Gains -- (22,837) -- --
In Excess of Net Realized Gains -- (1,143) -- (720)
-------- -------- ------- -------
TOTAL INCREASE (DECREASE) IN NET ASSETS (46,425) 129,385 (3,076) 57,624
NET ASSETS:
Beginning of Period 257,830 128,445 57,724 100
-------- -------- ------- -------
End of Period $211,405 $257,830 $54,648 $57,724
======== ======== ======= =======
</TABLE>
22
See notes to financial statements.
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS
October 31, 1995
1. ORGANIZATION
The Strong International Funds consist of Strong Short-Term Global Bond
Fund, Inc., Strong International Bond Fund, Inc., Strong International
Stock Fund, Inc. and Strong Asia Pacific Fund, Inc. The Funds are
separately incorporated, diversified and non-diversified, open-end
management investment companies registered under the Investment Company Act
of 1940. The Board of Directors of the Funds approved changing the Funds'
fiscal year-ends from December 31 to October 31; therefore, this report
encompasses financial information for the ten months ended October 31,
1995.
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 -- Portfolio securities traded primarily on a
principal securities exchange are valued at the last reported
sales price, or the mean between the latest bid and asked prices where
no last sales price is available. Securities traded over-the-counter
are valued at either the mean of the latest bid and asked prices or at
the latest reported sales price, depending on local convention or
regulation. 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 current 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. Aggregate cost and fair value of these
restricted securities held at October 31, 1995 were as follows:
<TABLE>
<CAPTION>
STRONG SHORT-TERM STRONG INTERNATIONAL STRONG INTERNATIONAL STRONG ASIA
GLOBAL BOND FUND BOND FUND STOCK FUND PACIFIC FUND
---------------- --------- ---------- ------------
<S> <C> <C> <C> <C>
Aggregate Fair Value $3,635 $2,308 $6,763 $3,987
Aggregate Cost 3,649 2,305 6,981 4,430
Percent of Net Assets 14.4%* 10.8%* 3.2% 7.3%
</TABLE>
*Of these securities, which are restricted from resale, 82% and
88%, for Strong Short-Term Global Bond Fund and Strong International
Bond Fund, respectively, are eligible for resale pursuant to Rule 144A
under the Securities Act of 1933 and also have been determined to be
liquid by the advisor based upon guidelines established by the Funds'
Board of Directors.
(B) Federal Income and Excise Taxes and Distributions to Shareholders --
It is the Funds' policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies
and to distribute substantially all of their taxable income to their
shareholders in a manner which results in no tax cost to the Funds.
Therefore, no Federal income or excise tax provision is required.
The character of distributions made during the year from net
investment income or net realized gains may differ from the
characterization for Federal income tax purposes due to differences in
the recognition of income and expense items for financial statement
and tax purposes. Where appropriate, reclassifications between net
asset accounts are made for such differences that are permanent in
nature.
(C) Realized Gains and Losses on Investment Transactions -- Gain or loss
realized on investment transactions is determined by comparing the
identified cost of the security lot sold with the net sales proceeds.
(D) Futures -- Upon entering into a futures contract, the Funds
pledge to the broker cash, U.S. government securities or other liquid,
high-grade debt obligations equal to the minimum "initial margin"
requirements of the exchange. The Funds also receive from or pay to
the broker an amount of cash equal to the daily fluctuation in the
value of the contract. Such receipts or payments are known as
"variation margin," and are recorded as unrealized gains or losses.
When the futures contract is closed, a realized gain or loss is
recorded equal to the difference between the value of the contract at
the time it was opened and the value at the time it was closed.
(E) Options -- Premiums received by the Funds upon writing put
or call options are recorded as an asset with a corresponding
liability which is subsequently adjusted to the current market value
of the option. When an option expires, is exercised, or is closed,
the Funds realize a gain or loss, and the liability is eliminated.
The Funds continue to bear the risk of adverse movements in the price
of the underlying asset during the period of the option, although any
potential loss during the period would be reduced by the amount of the
option premium received.
(F) Foreign Currency Translation -- Investment securities and other
assets and liabilities initially expressed in foreign currencies
are converted to U.S. dollars based upon current exchange rates.
Purchases and sales of foreign investment securities and income are
converted to U.S. dollars based upon currency exchange rates
prevailing on the respective dates of such transactions. The effect
of changes in foreign exchange rates on realized and unrealized
security gains or losses is reflected as a component of such gains or
losses.
23
<PAGE> 25
NOTES TO FINANCIAL STATEMENTS (continued)
October 31, 1995
(G) Forward Foreign Currency Exchange Contracts -- Forward foreign
currency exchange contracts are valued at the forward rate and
are marked-to-market daily. The change in market value is recorded as
an unrealized gain or loss. When the contract is closed, the Funds
record an exchange gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the
time it was closed.
(H) Additional Investment Risk -- The use of futures contracts, options,
foreign denominated assets and forward currency contracts for
purposes of hedging the Funds' investment portfolios involves, to
varying degrees, elements of market risk in excess of the amount
recognized in the statement of assets and liabilities. The
predominant risk with futures contracts is an imperfect correlation
between the value of the contracts and the underlying securities.
Foreign denominated assets and forward currency contracts may involve
greater risks than domestic transactions, including currency,
political and economic, regulatory and market risks.
(I) Other -- Investment security transactions are recorded as of the
trade date. Dividend income and distributions to shareholders
are recorded on the ex-dividend date. Interest income is recorded on
the accrual basis and includes amortization of premiums and discounts.
3. NET ASSETS
Net assets as of October 31, 1995 were as follows (in thousands):
<TABLE>
<CAPTION>
STRONG SHORT-TERM STRONG INTERNATIONAL STRONG INTERNATIONAL STRONG ASIA
GLOBAL BOND FUND BOND FUND STOCK FUND PACIFIC FUND
---------------- --------- ---------- ------------
<S> <C> <C> <C> <C>
Capital Stock $24,898 $20,424 $219,570 $59,049
Undistributed Net Investment Income (Loss) 307 311 190 122
Undistributed Net Realized Gain (Loss) (250) 151 (1,362) (1,034)
Net Unrealized Appreciation (Depreciation) 216 449 (6,993) (3,489)
------- ------- -------- -------
$25,171 $21,335 $211,405 $54,648
======= ======= ======== =======
</TABLE>
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Funds for the ten months ended October 31,
1995 and the year ended December 31, 1994 were as follows
(in thousands):
<TABLE>
<CAPTION>
1995 1994
----------------- ------------------
Shares Dollars Shares Dollars
------ ------- ------ -------
<S> <C> <C> <C> <C>
STRONG SHORT-TERM GLOBAL BOND FUND
Shares Sold 2,106 $ 21,870 2,866 $ 29,549
Dividends Reinvested 86 883 52 537
Shares Redeemed (1,724) (17,681) (989) (10,267)
------ --------- ------ ---------
468 $ 5,072 1,929 $ 19,819
====== ========= ====== =========
STRONG INTERNATIONAL BOND FUND
Shares Sold 1,689 $ 19,496 1,439 $ 15,103
Dividends Reinvested 71 813 41 433
Shares Redeemed (861) (9,858) (530) (5,663)
------ --------- ------ ---------
899 $ 10,451 950 $ 9,873
====== ========= ====== =========
STRONG INTERNATIONAL STOCK FUND
Shares Sold 8,480 $ 107,112 24,930 $ 357,479
Dividends Reinvested 100 1,258 1,818 23,412
Shares Redeemed (12,739) (160,737) (15,428) (218,414)
------ --------- ------ ---------
(4,159) ($ 52,367) 11,320 $ 162,477
====== ========= ====== =========
STRONG ASIA PACIFIC FUND
Shares Sold 6,167 $ 57,648 11,796 $ 119,485
Dividends Reinvested 28 264 78 729
Shares Redeemed (6,648) (62,363) (5,707) (56,786)
------ --------- ------ ---------
(453) ($ 4,451) 6,167 $ 63,428
====== ========= ====== =========
</TABLE>
24
<PAGE> 26
5. RELATED PARTY TRANSACTIONS
Strong Capital Management, Inc. (the "Advisor"), with whom certain
officers and directors of the Funds are affiliated, provides investment
advisory services and shareholder recordkeeping and related services to the
Funds. Investment advisory fees, which are established by terms of the
Advisory Agreements, are based on the following annualized rates of the
average daily net assets: Strong Short-Term Global Bond Fund .625%, Strong
International Bond Fund .70%, Strong International Stock Fund and Strong
Asia Pacific Fund 1.00%. Advisory fees are subject to reimbursement by the
Advisor if the Funds' operating expenses exceed certain levels.
Shareholder recordkeeping and related service fees are based on
contractually established rates for each open and closed shareholder
account. In addition, the Advisor is compensated for certain other
services related to costs incurred for reports to shareholders.
Certain information regarding related party transactions for the ten
months ended October 31, 1995 is as follows (in thousands):
<TABLE>
<CAPTION>
STRONG SHORT-TERM STRONG INTERNATIONAL STRONG INTERNATIONAL STRONG ASIA
GLOBAL BOND FUND BOND FUND STOCK FUND PACIFIC FUND
---------------- --------- ---------- ------------
<S> <C> <C> <C> <C>
Payable to Advisor at October 31, 1995 $77 $74 $269 $57
Other Shareholder Servicing Expenses Paid to Advisor 2 2 14 5
Unaffiliated Directors' Fees 1 1 7 2
</TABLE>
6. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of long-term securities for the ten
months ended October 31, 1995 were as follows (in thousands):
<TABLE>
<CAPTION>
STRONG SHORT-TERM STRONG INTERNATIONAL STRONG INTERNATIONAL STRONG ASIA
GLOBAL BOND FUND BOND FUND STOCK FUND PACIFIC FUND
----------------- ---------------- ------------------ ------------
<S> <C> <C> <C> <C>
Purchases:
U.S. Government and Agency $ 4,339 $ 498 -- --
Other 63,569 58,537 $214,092 $53,183
Sales:
U.S. Government and Agency 2,590 1,541 -- --
Other 54,847 46,522 256,366 54,798
</TABLE>
7. INCOME TAX INFORMATION
At October 31, 1995, the investment cost, gross unrealized appreciation and
depreciation on investments and capital loss carryovers (expiring in
varying amounts through 2003) for Federal income tax purposes were as
follows (in thousands):
<TABLE>
<CAPTION>
STRONG SHORT-TERM STRONG INTERNATIONAL STRONG INTERNATIONAL STRONG ASIA
GLOBAL BOND FUND BOND FUND STOCK FUND PACIFIC FUND
---------------- --------- ---------- ------------
<S> <C> <C> <C> <C>
Aggregate Investment Cost $25,120 $20,422 $218,719 $59,239
Aggregate Unrealized: ======= ======= ======== =======
Appreciation $ 450 $ 466 $ 11,282 $ 2,281
Depreciation (94) (82) (22,706) (7,126)
------- -------- -------- -------
$ 356 $ 384 ($ 11,424) ($ 4,845)
======= ======= ======== =======
Capital Loss Carryovers $ 245 -- $ 1,094 $ 958
======= ======= ======== =======
</TABLE>
For corporate shareholders in the Funds, the percentages of dividend income
distributed for the ten months ended October 31, 1995, which are designated as
qualifying for the dividends-received deduction are: Strong International
Stock Fund 0.7% and Strong Asia Pacific Fund 1.1%.
25
<PAGE> 27
FINANCIAL HIGHLIGHTS
The following presents information relating to a share of capital stock each of
the Funds, outstanding for the entire period.
<TABLE>
<CAPTION>
STRONG SHORT-TERM GLOBAL BOND FUND
1995(a) 1994(b)
------ ------
(NOTE 1)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.15 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net Investment Income 0.65 0.35
Net Realized and Unrealized Gains on Investments 0.20 0.16
------- --------
TOTAL FROM INVESTMENT OPERATIONS 0.85 0.51
LESS DISTRIBUTIONS
- ------------------
From Net Investment Income (0.54) (0.35)
In Excess of Net Realized Gains -- (0.01)
------- --------
TOTAL DISTRIBUTIONS (0.54) (0.36)
------- --------
NET ASSET VALUE, END OF PERIOD $ 10.46 $ 10.15
======== ========
Total Return +8.5% +5.1%
Net Assets, End of Period (In Thousands) $ 25,171 $ 19,682
Ratio of Expenses to Average Net Assets 0.0%* 0.0%*
Ratio of Expenses to Average Net Assets
Without Waivers and Absorptions 2.0%* 1.7%*
Ratio of Net Investment Income to Average Net Assets 8.2%* 7.7%*
Portfolio Turnover Rate 437.3% 287.8%
STRONG INTERNATIONAL BOND FUND
<CAPTION>
1995(a) 1994(b)
------ ------
(NOTE 1)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.36 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net Investment Income 0.78 0.46
Net Realized and Unrealized Gains on Investments 1.00 0.40
-------- --------
TOTAL FROM INVESTMENT OPERATIONS 1.78 0.86
LESS DISTRIBUTIONS
- ------------------
From Net Investment Income (0.66) (0.46)
In Excess of Net Investment Income -- (0.02)
In Excess of Net Realized Gains -- (0.02)
-------- --------
TOTAL DISTRIBUTIONS (0.66) (0.50)
-------- --------
NET ASSET VALUE, END OF PERIOD $ 11.48 $ 10.36
======== ========
Total Return +17.3% +8.7%
Net Assets, End of Period (In Thousands) $ 21,335 $ 9,946
Ratio of Expenses to Average Net Assets 0.0%* 0.0%*
Ratio of Expenses to Average Net Assets
Without Waivers and Absorptions 2.0%* 2.0%*
Ratio of Net Investment Income to Average Net Assets 8.3%* 7.9%*
Portfolio Turnover Rate 473.3% 679.3%
</TABLE>
* Calculated on an annualized basis.
(a) For the period ended October 31, 1995. Total return and portfolio
turnover rate are not annualized.
(b) Inception date is March 31, 1994 for both Strong Short-Term Global Bond
Fund and Strong International Bond Fund. Total return and portfolio
turnover rate are not annualized.
26
<PAGE> 28
The following presents information relating to a share of capital stock of each
of the Funds, outstanding for the entire period.
STRONG INTERNATIONAL STOCK FUND
<TABLE>
<CAPTION>
1995(a) 1994 1993 1992(b)
------ ---- ---- ------
(NOTE 1)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.65 $ 14.18 $ 9.77 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net Investment Income 0.08 0.06 -- 0.05
Net Realized and Unrealized Gains (Loss) on Investments 0.37 (0.27) 4.66 (0.23)
-------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 0.45 (0.21) 4.66 (0.18)
LESS DISTRIBUTIONS
- ------------------
From Net Investment Income (0.07) (0.01) -- (0.05)
In Excess of Net Investment Income -- -- (0.02) --
From Net Realized Gains -- (1.25) (0.23) --
In Excess of Net Realized Gains -- (0.06) -- --
-------- -------- -------- --------
TOTAL DISTRIBUTIONS (0.07) (1.32) (0.25) (0.05)
-------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 13.03 $ 12.65 $ 14.18 $ 9.77
======== ======== ======== ========
Total Return +3.6% -1.6% +47.8% -1.8%
Net Assets, End of Period (In Thousands) $211,405 $257,830 $128,445 $ 12,723
Ratio of Expenses to Average Net Assets 1.8%* 1.7% 1.9% 2.0%*
Ratio of Net Investment Income to Average Net Assets 0.8%* 0.3% (0.3%) 0.8%*
Portfolio Turnover Rate 102.0% 136.5% 139.9% 20.8%
STRONG ASIA PACIFIC FUND
<CAPTION>
1995(a) 1994
------ ----
(NOTE 1)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.35 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net Investment Income 0.04 0.05
Net Realized and Unrealized Gains (Losses) on Investments 0.20 (0.57)
-------- --------
TOTAL FROM INVESTMENT OPERATIONS 0.24 (0.52)
LESS DISTRIBUTIONS
- ------------------
From Net Investment Income (0.03) (0.01)
In Excess of Net Investment Income (0.01) --
In Excess of Net Realized Gains -- (0.12)
-------- --------
TOTAL DISTRIBUTIONS (0.04) (0.13)
-------- --------
NET ASSET VALUE, END OF PERIOD $ 9.55 $ 9.35
======== ========
Total Return +2.6% -5.3%
Net Assets, End of Period (In Thousands) $ 54,648 $ 57,724
Ratio of Expenses to Average Net Assets 2.0%* 2.0%
Ratio of Net Investment Income to Average Net Assets 0.5%* 0.6%
Portfolio Turnover Rate 104.3% 103.3%
</TABLE>
* Calculated on an annualized basis.
(a) For the period ended October 31, 1995. Total return and portfolio
turnover rate are not annualized.
(b) Inception date is March 4, 1992. Total return and portfolio turnover
rate are not annualized.
27
<PAGE> 29
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of the
Strong International Funds
We have audited the accompanying statements of assets and liabilities of Strong
Short-Term Global Bond Fund, Inc. and Strong International Bond Fund, Inc.,
including the schedules of investments in securities, as of October 31, 1995,
and the related statements of operations for the period from January 1, 1995 to
October 31, 1995 and the statements of changes in net assets and financial
highlights for the periods from January 1, 1995 to October 31, 1995 and from
March 31, 1994 (inception) to December 31, 1994. We have also audited the
accompanying statements of assets and liabilities of Strong International Stock
Fund, Inc. and Strong Asia Pacific Fund, Inc., including the schedules of
investments in securities, as of October 31, 1995, and the related statements
of operations for the period from January 1, 1995 to October 31, 1995 and the
statements of changes in net assets and financial highlights for the periods
from January 1, 1995 to October 31, 1995 and the year ended December 31, 1994.
These Funds are collectively referred to herein as the "Strong International
Funds". These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of October 31, 1995 by correspondence with the custodian and brokers.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the Strong International Funds as of October 31, 1995, the results of their
operations, the changes in their net assets and the financial highlights for
each of the periods indicated, in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
Milwaukee, Wisconsin
December 8, 1995
28
<PAGE> 30
FOR LITERATURE AND INFORMATION REQUESTS,
CALL 1-800-368-1030
TO DISCUSS AN EXISTING ACCOUNT OR
CONDUCT A TRANSACTION,
CALL 1-800-368-3863
For a prospectus containing more complete information, including management
fees and expenses, please call 1-800-368-1030. Please read it carefully before
investing or sending money. This annual report does not constitute an offer for
the sale of securities. Strong Funds are offered for sale by prospectus only.
[STRONG FUNDS LOGO]
STRONG FUNDS DISTRIBUTORS, INC.
P.O. Box 2936
Milwaukee, Wisconsin 53201
