<PAGE>
THE STRONG
----------
INTERNATIONAL
FUNDS
===================================
SEMI-ANNUAL REPORT o APRIL 30, 1998
===================================
THE STRONG ASIA PACIFIC FUND
THE STRONG INTERNATIONAL STOCK FUND
THE STRONG GLOBAL HIGH-YIELD BOND FUND
THE STRONG INTERNATIONAL BOND FUND
THE STRONG SHORT-TERM GLOBAL BOND FUND
[PHOTO OF STRONG CAPITAL MANAGEMENT, INC.]
[STRONG LOGO]
STRONG FUNDS
<PAGE>
- -------------------------------------------------------------------------------
PLEASE FILE THIS PROSPECTUS SUPPLEMENT WITH YOUR RECORDS.
STRONG ASIA PACIFIC FUND
STRONG GLOBAL HIGH-YIELD BOND FUND
STRONG INTERNATIONAL BOND FUND
STRONG INTERNATIONAL STOCK FUND
STRONG SHORT-TERM GLOBAL BOND FUND
SUPPLEMENT TO PROSPECTUS DATED MARCH 1, 1998
CHANGE IN PORTFOLIO MANAGER. On May 18, 1998, Mr. David Lui became the
portfolio manager of the Strong International Stock Fund. Prior to joining
Strong Capital Management, Inc., the Fund's investment advisor, Mr. Lui served
Phoenix Duff & Phelps as a Vice President and international portfolio manager
of five funds, including the Phoenix International Portfolio and the Phoenix
Worldwide Opportunities Fund. From 1993 to 1995, Mr. Lui was Vice President of
Asian Equities at Alliance Capital Management. From 1990 to 1993, he was an
Associate of Global Markets at Bankers Trust Company.
MINIMUM INVESTMENT REQUIREMENT. On May 1, 1998, the Minimum Investment
Requirement to open a regular account in the Funds increased from $1,000 to
$2,500. This information modifies the Minimum Investment Requirements found on
page II-4 of the Prospectus under the heading "What You Should Know About
Buying Shares."
ANNUAL INCOME DIVIDENDS. After July 1, 1998, the Strong Asia Pacific and the
Strong International Stock Funds will pay dividends from net investment income
annually instead of quarterly. This information modifies the information about
dividends found on page I-11 of the Prospectus under the heading "Dividends and
Other Distributions" and on page I-34 of the Prospectus under the heading
"About the Funds--Distributions and Taxes." Therefore, the last quarterly
dividend will be payable by these Funds on June 30, 1998. The next dividend
will be payable by these Funds on December 29, 1998 and annually thereafter.
CORPORATE NAME. In May 1998, the corporate name of Strong International Stock
Fund, Inc. will become Strong International Equity Funds, Inc. The Strong
International Stock Fund will continue to exist as an investment portfolio
under the new corporate name. This is a technical change that will not affect
the management or operations of the Fund.
The date of this Prospectus Supplement is May 18, 1998.
<PAGE>
THE STRONG
----------
INTERNATIONAL
FUNDS
===================================
SEMI-ANNUAL REPORT o APRIL 30, 1998
===================================
TABLE OF CONTENTS
INVESTMENT REVIEWS
The Strong Asia Pacific Fund.............................................2
The Strong International Stock Fund......................................4
The Strong Global High-Yield Bond Fund...................................6
The Strong International Bond Fund.......................................8
The Strong Short-Term Global Bond Fund..................................10
FINANCIAL INFORMATION
Schedules of Investments in Securities
The Strong Asia Pacific Fund........................................12
The Strong International Stock Fund.................................13
The Strong Global High-Yield Bond Fund..............................16
The Strong International Bond Fund..................................17
The Strong Short-Term Global Bond Fund..............................19
Statements of Assets and Liabilities....................................22
Statements of Operations................................................23
Statements of Changes in Net Assets.....................................24
Notes to Financial Statements...........................................26
FINANCIAL HIGHLIGHTS.........................................................29
<PAGE>
============================
THE STRONG ASIA PACIFIC FUND
============================
WE INTEND TO RETAIN OUR CAUTIOUS STANCE ON THE MORE VOLATILE MARKETS WHILE
REMAINING ALERT TO ANY CONCRETE SIGNS THAT A LASTING TURNAROUND HAS BEEN
ACHIEVED.
The Strong Asia Pacific Fund seeks capital growth. The Fund invests primarily
in the equity securities of issuers located in Asia or the Pacific Basin.
A DIFFICULT PERIOD FOR ASIAN MARKETS
The most striking feature of the first half of the Fund's year (ended April 30,
1998) has been the huge extent to which Asia has underperformed Europe. The
almost unprecedented nature of the situation in Asia is evident in the extent
of the declines in the region's equity markets. The vicious cycle of current
account deficits, higher interest rates, mounting bad debts, slowing economics,
and collapsing currencies has done untold damage to these countries' property
markets, financial systems, and industrial structure.
=================================
TOP FIVE COUNTRIES
=================================
Based on net assets as of 4-30-98
COUNTRY % OF NET ASSETS
-------------------------------
Japan 15.7%
...............................
Australia 11.6%
...............................
Singapore 7.8%
...............................
New Zealand 6.5%
...............................
Hong Kong 5.7%
...............................
Please see the Schedule of
Investments in Securities for a
complete listing of the Fund's
portfolio.
=================================
=============================================
FIVE LARGEST STOCK HOLDINGS
=============================================
Based on net assets as of 4-30-98
SECURITY % OF NET ASSETS
-------------------------------------------
Sydney Aquarium, Ltd. 2.0%
...........................................
Guinness Peat Group PLC 1.7%
...........................................
Normandy Mining, Ltd. 1.7%
...........................................
Freeport-McMoran Copper 1.4%
& Gold, Inc. Class B
...........................................
Sony Corporation 1.3%
...........................................
Please see the Schedule of Investments in
Securities for a complete listing of the
Fund's portfolio.
=============================================
Despite occasional, sometimes rapid, rallies in the first four months of
calendar 1998, we do not feel the region is at the point yet of a sustained
recovery. Several significant problems with economic and financial systems
remain to be worked out. As a result, the region's recovery looks like it's
going to follow a slower process--more of a "U" shape rather than a "V."
Although there's growing confidence that most of Asia's economies and markets
are through the worst, the recovery timetable for the financial world and the
"real" world may be rather different. We intend to retain our cautious stance
on the more volatile markets while remaining alert to any concrete signs that a
lasting turnaround has been achieved. In this difficult period, the Fund
reported a loss of 10.92%.(1)
Nevertheless, we believe there's massive potential in Asia for stock prices to
rally from their depressed levels. Many Western investors are currently
scouring Asia for bargains. Investors are beginning to recognize the specific
speed and extent of each country's recuperation from its own particular bout of
Asian flu, and rewarding those that appear to be responding best to the crisis
and punishing those responding worst. In the former category would be Thailand
and Korea, while chief among those who appear to be unable or unwilling to take
the necessary medicine of the International Monetary Fund--which works to
stabilize currencies--is Indonesia.
OUR FOCUS IS ON QUALITY AND VALUE
Our efforts to manage the Fund with a cautious and selective approach haven't
allowed it to dodge every bullet. We have, however, at least been able to spare
it some of the worst damage in places such as Indonesia while taking advantage
of bounces in markets such as Thailand. In these turbulent times we have sought
to deliver as steady a performance record as possible. We do not feel this is
the time for heroics or overly aggressive trading, given the current extreme
volatility of stock prices. We are trying resolutely to steer as steady a
course as we can. We don't want to jump into any market or issue prematurely
and get caught in another downdraft. We are, however, ready for when Asia's
time comes again.
For Asia as a whole, in what we expect to be an uneven year (1998), we intend
to pursue a strategy of focusing on quality and value. Opportunities will
arise, we believe, both as prices fall to levels at which asset and earnings
flows are undervalued and as quality companies and markets are increasingly
rewarded for their balance sheet strength and business stability. In markets
that were punished in 1997, we feel that the strong companies will get stronger
and the weak will go under. Timing will be critical in reentering
2
<PAGE>
some of these markets but the patient, discriminating investor could be
rewarded by some strong recoveries later in 1998.
OUTLOOK
Given the markets this Fund invests in, it is likely to be more volatile than a
purely domestic investment. The Fund's share price can be greatly affected by
changes in market conditions, currency values, interest rates, an economic and
political changes in the U.S. and abroad.
For the time being, we intend to continue to pursue a relatively defensive
stance, using exposure to Australasia, India, and the more stable Asian markets
as well as cash to protect the Fund against the worst vagaries of the region
until things more clearly settle down. Having said that, there is every reason
to be hopeful that Asia will emerge from the trials of the last two years
purged by fire, with Asian values intact but with Asian financial systems
cleansed of the excess, corruption, and inefficient use of capital that
contributed to the crisis. Our longer-term belief in Asia as a region is
therefore intact and we will remain alert to any chance to capitalize on the
reemergence of dynamism in these economies.
Thank you for your continued confidence in the Strong Asia Pacific Fund.
Sincerely,
/s/ Anthony L.T. Cragg
Anthony L.T. Cragg
Portfolio Manager
[PHOTO OF ANTHONY L.T. CRAGG]
===============================================================================
GROWTH OF AN ASSUMED $10,000 INVESTMENT
===============================================================================
From 12-31-93 to 4-30-98
[GRAPH]
THE STRONG Lipper Pacific
ASIA PACIFIC FUND MSCI AP Region Funds Index
12-93 10,000 10,000 10,000
12-94 9,473 8,772 9,475
12-95 10,035 9,305 9,729
12-96 10,246 10,388 9,980
12-97 7,071 6,835 7,324
4-98 7,057 6,935 7,312
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
Morgan Stanley Capital International AC Asia Pacific Free ex-Japan Index ("MSCI
AP") and the Lipper Pacific Region Funds Index. Results include the
reinvestment of all dividends and capital gains distributions. Performance is
historical and does not represent future results. Investment returns and
principal value vary, and you may have a gain or loss when you sell shares.
- -------------------------------------------------------------------------------
==================================
AVERAGE ANNUAL
TOTAL RETURNS(1)
==================================
As of 4-30-98
1-YEAR -29.58%
3-YEAR -8.69%
SINCE INCEPTION -7.73%
(on 12-31-93)
==================================
* The MSCI AP Index is an unmanaged index generally representative of developed
and emerging markets in the Asia/Pacific region, excluding Japan. MSCI AP
data is U.S.dollar adjusted. The Lipper Pacific Region Funds Index is an
equally-weighted performance index of the largest qualifying funds in this
Lipper category. Source of the MSCI index data is Bloomberg. Source of the
Lipper index data is Lipper Analytical Services, Inc.
1 Average annual total return and total return measure change in the value of
an investment in the fund, assuming reinvestment of all dividends and capital
gains. Average annual total return reflects annualized change, while total
return reflects aggregate change.
3
<PAGE>
===================================
THE STRONG INTERNATIONAL STOCK FUND
===================================
WE BELIEVE THERE'S MASSIVE POTENTIAL IN ASIA FOR STOCK PRICES TO RALLY FROM
THEIR DEPRESSED LEVELS.
The most striking feature of the first half of the Fund's year (ended April 30,
1998) has been the huge disparity in performance between the European and Asian
stock markets. In Asia, the almost unprecedented nature of the situation there
can be gauged by the extent of the declines in the region's equity markets. The
vicious cycle of current account deficits, higher interest rates, mounting bad
debts, slowing economics, and collapsing currencies has done untold damage to
these countries' property markets, financial systems, and industrial structure.
==========================================
TOP FIVE COUNTRIES
==========================================
Based on net assets as of 4-30-98
COUNTRY % OF NET ASSETS
-------------------------------------
United Kingdom 15.5%
.....................................
Japan 11.5%
.....................................
France 8.2%
.....................................
Germany 5.1%
.....................................
Australia 5.1%
.....................................
Please see the Schedule of Investments
in Securities for a complete listing
of the Fund's portfolio.
==========================================
======================================================
FIVE LARGEST STOCK HOLDINGS
======================================================
Based on net assets as of 4-30-98
SECURITY % OF NET ASSETS
----------------------------------------------------
United News & Media PLC 1.3%
....................................................
Sony Corporation 1.3%
....................................................
Ing Groep Nv 1.2%
....................................................
The Romanian Investment Fund, Ltd. 1.2%
....................................................
Sydney Aquarium, Ltd. 1.2%
....................................................
Please see the Schedule of Investments in Securities
for a complete listing of the Fund's portfolio.
======================================================
A CAUTIOUS APPROACH TO THE MARKET
Despite occasional, sometimes rapid, rallies in the first four months of
calendar 1998, we do not feel the region is at the point yet of a sustained
recovery. Several significant economic and financial system problems remain to
be worked out. As a result, the region's recovery looks like it's going to
follow a slower process--more of a "U" shape rather than a "V." Although there
appears to be growing confidence that the worst is over for most economies and
stock markets in Asia, the timetable for the financial world and the "real"
world may be rather different. We intend to retain our cautious stance toward
the more volatile markets, while remaining alert to any concrete signs that a
lasting turnaround has been achieved.
Nevertheless, we believe there's massive potential in Asia for stock prices to
rally from their depressed levels. Many Western investors are currently
scouring Asia for bargains. The specific speed and extent of each country's
recuperation from its own particular bout of Asian flu is beginning to be
appreciated, with equity markets rewarding those countries that appear to be
responding best to the crisis and punishing those who are responding worst. In
the former category would be Thailand and Korea, while chief among those who
appear to be unable or unwilling to take the necessary medicine of the
International Monetary Fund--which works to stabilize currencies--is Indonesia.
A LOOK AT PERFORMANCE IN A DIFFICULT MARKET
The underperformance by the Asian markets had a sudden and severe impact on the
Fund's performance. Although we have roughly halved the Fund's exposure to Asia
over the past six months, our exposure was still large enough to inflict
considerable damage and cause the Fund to lag behind most of its competitors
who traditionally had had much lower weightings in Asia (even in the good
times) and much higher weightings in Europe (even in the bad times).
In addition to the deep problems in Asia, the Fund's performance was hurt by
the unfavorable environment for the types of stocks we typically emphasize.
Both the small-capitalization and emerging-market sectors have significantly
underperformed larger, established companies for many months. Given that
significant exposure to these sectors has long been characteristic of the Fund,
it is appropriate to consider the Fund's performance at least partly with those
sectors' difficulties in mind. In this turbulent six-month period, the Fund's
return totaled 2.82%.(1)
Turning to Europe, we have had the exact opposite situation. Since the
restructuring of the Fund began, our exposure to Europe has approximately
doubled. Unfortunately, some of that increased exposure went into place too
late to fully take advantage of European markets' sustained and spectacular
rise. The continued strength in the six months ended April 1998 was driven by
the same, now familiar, themes of restructuring, merger and acquisitions
activity, a strong U.S. dollar, and shareholder value.
Nevertheless our continued strategy, which has taken several quarters to
achieve, of rebalancing the portfolio closer to the EAFE Index (typically used
to benchmark international stock funds) weighting to the benefit of Europe and
at the expense of Asia is finally bearing fruit. After trailing the index by
about 5% in the first two months of the year, the Fund matched the index in
March and April. The Fund now has approximately 50% of its assets invested in
Europe versus around 10% in Asia proper (excluding Japan, Australasia and the
subcontinent) and is now well balanced to take advantage of strength in either
region.
Our one continued significant variance with a benchmark weighting is in Japan.
In the face of a sluggish economy and government inertia, we are
4
<PAGE>
not enthusiastic about that country's short-term prospects and are hence
considerably underweighted there.
LOOKING AHEAD
Given the markets this Fund invests in, it is likely to be more volatile than a
purely domestic investment. The Fund's share price can be greatly affected by
changes in market conditions, currency values, interest rates, and economic and
political changes in the U.S. and abroad.
We expect to maintain--or even increase--our more than 50% position in Europe
for the foreseeable future, given the relative security and attractiveness of
European markets compared with their Asian or emerging counterparts. Even
though value opportunities are not as apparent in Europe as a year or two ago,
the markets there look to have further potential as the forces of
restructuring, consolidation, a single European market, and shareholder
activism combine to deliver greater profitability and make traditionally
low-returning assets more productive.
For Asia as a whole, in what we expect to be an uneven year, we intend to
pursue a strategy of focusing on quality and value. Opportunities will arise,
we believe, both as prices fall to levels at which assets and earnings flows
are undervalued and as higher-quality companies and markets are increasingly
rewarded for their balance sheet strength and business stability. There is
every reason to be hopeful that Asia will emerge from the trials of the last
two years purged by fire, with Asian values intact but with Asian financial
systems cleansed of the excess, corruption, and inefficient use of capital that
contributed to the crisis.
Thank you for your investment in the Strong International Stock Fund. We look
forward to earning your continued confidence.
Sincerely,
/s/ Anthony L.T. Cragg
Anthony L.T. Cragg
Portfolio Manager
[PHOTO OF ANTHONY L.T. CRAGG]
===============================================================================
GROWTH OF AN ASSUMED $10,000 INVESTMENT
===============================================================================
From 3-4-92 to 4-30-98
[GRAPH]
THE STRONG INTERNATIONAL Lipper International
STOCK FUND MSCI EAFE Funds Index
2-92 10,000 10,000 10,000
12-92 9,819 9,484 9,495
12-93 14,508 12,572 13,215
12-94 14,282 13,550 13,118
12-95 15,399 15,069 14,433
12-96 16,660 15,980 16,515
12-97 14,294 16,264 17,715
4-98 15,757 18,804 20,666
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
Morgan Stanley Capital International Europe, Australasia, and Far East Index
("MSCI EAFE(tm)") and the Lipper International Funds Index. Results include the
reinvestment of all dividends and capital gains distributions. Performance is
historical and does not represent future results. Investment returns and
principal value vary, and you may have a gain or loss when you sell shares. To
equalize the time periods, the indexes' performance was prorated for the month
of March 1992.
- -------------------------------------------------------------------------------
==================================
AVERAGE ANNUAL
TOTAL RETURNS(1)
==================================
As of 4-30-98
1-YEAR -8.80%
3-YEAR 3.61%
5-YEAR 6.73%
SINCE INCEPTION 7.66%
(on 3-4-92)
==================================
* The MSCI EAFE(tm) is an unmanaged index generally representative of major
overseas stock markets. MSCI EAFE(tm) data is dollar adjusted. The Lipper
International Funds Index is an equally-weighted performance index of the
largest qualifying funds in this Lipper category. Source of the MSCI index
data is Standard & Poor's Micropal. Source of the Lipper index data is
Lipper Analytical Services, Inc.
1 Average annual total return and total return measure change in the value of
an investment in the fund, assuming reinvestment of all dividends and capital
gains. Average annual total return reflects annualized change, while total
return reflects aggregate change.
5
<PAGE>
======================================
THE STRONG GLOBAL HIGH-YIELD BOND FUND
======================================
...RETURNS WERE ENHANCED BY ADDING EXPOSURE IN SOUTHEAST ASIA AND BRAZIL. WE
ALSO ADDED VALUE THROUGH ISSUE SELECTION IN THE U.S. HIGH YIELD MARKET.
We are pleased to review the process and philosophy we utilize in managing the
Strong Global High-Yield Bond Fund, as well as discuss portfolio performance
for the Fund's very first quarter of operations.
=======================================
TOP FIVE COUNTRIES
=======================================
Based on net assets as of 4-30-98
COUNTRY % OF NET ASSETS
--------------------------------------
Brazil 16.9%
......................................
Argentina 14.0%
......................................
South Korea 10.4%
......................................
Russia 6.4%
......................................
Venezuela 5.2%
......................................
Please see the Schedule of Investments
in Securities for a complete listing of
the Fund's portfolio.
========================================
===============================
TOTAL RETURN(1)
===============================
As of 4-30-98
SINCE INCEPTION 4.37%
(on 1-31-98)
===============================
OUR GLOBAL INVESTMENT STRATEGY
The Fund's primary investment objective is to seek total return by investing
for a high level of current income and capital growth. To pursue this
objective, we invest the majority of the Fund's assets in below-investment
grade securities. Therefore, careful credit analysis is crucial to providing
good relative performance. The emerging markets portion of the Fund is invested
primarily in government and corporate credits domiciled in Latin America, Asia
and Eastern Europe. Analysis of these issuers requires an assessment of
political risks as well as macro-economic fundamentals, and industry and
company conditions. The price movements of these securities can be more
volatile than those of high yield issues in the United States.
THE KEYS BEHIND THIS QUARTER'S PERFORMANCE
For the three months ended April 30, 1998, our portfolio returns were enhanced
by adding exposure in Southeast Asia and Brazil. We also added value through
issue selection in the U.S. High Yield market.
Specifically, the Fund returned 4.37% for the three months ended April 30,
1998, while the Global High-Yield Bond Index, the Fund's benchmark, returned
4.35%.(1) As we do for our other bond funds, the Global High-Yield Bond Fund is
managed in a disciplined style around its benchmark. The Global High-Yield Bond
Index is a blend of 65% J.P. Morgan Emerging Markets Bond Index Plus and 35%
Lehman Brothers High Yield Bond Index. By modeling the portfolio in this way,
we seek to maintain a duration of approximately four years.
During the quarter, economic and political developments in Southeast Asia
dominated market news. While interest rate markets were generally stable in the
U.S., there was significant volatility in yield spreads. Recently, emerging
markets yield spreads appear to have stabilized as the crisis in Asia has
subdued.
Our view is that the underlying fundamentals of these emerging markets
economies will deteriorate. However, the policies being implemented with the
help of the International Monetary Fund (IMF) appear to minimize the risk of
financial calamity. In exchange for helping these countries pay their debts,
the IMF has imposed strict guidelines aimed at lowering inflation and
stabilizing currency. Current prices reflect a significant risk premium.
Therefore, we have begun to make investments in some selected government
credits in Asia. We believe this region should continue to have a significant
impact on financial markets, and we will monitor our investments there very
carefully. We also believe that the credit prospects for Argentina and Brazil
appear favorable as their policy responses to the Asia crisis were commendable.
OUR LONG-TERM OUTLOOK
The Strong Global High-Yield Bond Fund was started to allow investors the
opportunity to invest in government and corporate credits internationally. For
example, we believe the signing of most of the European Union (except Great
Britain and three other countries) to a single currency (the Euro) in 1999 will
eventually lead to the development of corporate bond markets in other countries
that are similar to the corporate bond market in the United States.
6
<PAGE>
At Strong, we have been able to consistently add value by utilizing our credit
research team. The Strong Global High-Yield Bond Fund is an opportunity to
extend those skills to new and developing markets worldwide.
As an investor in the Fund, please keep in mind that the Fund's returns will
fluctuate with changes in market conditions, currency values, interest rates,
foreign government regulations, and economic and political conditions in
countries in which the Fund invests. These risks are intensified in emerging
markets. For long-term investors, however, we believe these risks are
outweighed by the benefits of global investing--namely, higher return potential
and improved diversification.
Thank you for investing in the Strong Global High-Yield Bond Fund. We
appreciate your business, and look forward to serving your investment needs in
the future.
Sincerely,
/s/ John T. Bender
John T. Bender
/s/ Shirish Malekar
Shirish T. Malekar
/s/ Jeffrey A. Koch
Jeffrey A. Koch
Portfolio Co-managers
[PHOTO OF JOHN T. BENDER, SHIRISH T. MALEKAR AND JEFFREY A. KOCH]
===============================================================================
GROWTH OF AN ASSUMED $10,000 INVESTMENT
===============================================================================
From 1-31-98 to 4-30-98
[GRAPH]
THE STRONG Global Lipper Global
GLOBAL HIGH-YIELD High-Yield Income Funds
BOND FUND Bond Index Index
1-98 10,000 10,000 10,000
2-98 10,221 10,206 10,084
3-98 10,448 10,404 10,125
4-98 10,437 10,435 10,205
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
Global High-Yield Bond Index and the Lipper Global Income Funds Index. Results
include the reinvestment of all dividends and capital gains distributions.
Performance is historical and does not represent future results. Investment
returns and principal value vary, and you may have a gain or loss when you sell
shares.
- -------------------------------------------------------------------------------
========================================
PORTFOLIO STATISTICS
========================================
As of 4-30-98
30-DAY ANNUALIZED YIELD(2) 6.03%
AVERAGE CREDIT QUALITY(3) BB
AVERAGE MATURITY(4) 6.3 YEARS
========================================
* The Global High-Yield Bond Index is comprised of 65% J.P. Morgan Emerging
Markets Bond Index + and 35% Lehman Brothers High-Yield Bond Index. The J.P.
Morgan Emerging Markets Bond Index + is an unmanaged index generally
representative of emerging market debt obligations. The Lehman Brothers
High-Yield Bond Index is an unmanaged index generally representative of
corporate bonds rated below investment-grade. The Lipper Global Income Funds
Index is an equally-weighted performance index of the largest qualifying
funds in this Lipper category. Source of the Lehman index data is Bloomberg
and Standard & Poor's Micropal. Source of the Lipper index data is Lipper
Analytical Services, Inc.
1 Total return is not annualized and measures aggregate change in the value
of an investment in the fund, assuming reinvestment of dividends.
2 As of April 30, 1998, the Advisor was temporarily waiving fees of 0.100%.
Otherwise, the Fund's yield would have been 5.93% and the total return would
have been lower. Yields are historical, do not represent future yields, and
will vary.
3 For the purposes of the average, the Fund's short-term debt obligations
have been assigned a long-term rating by the Advisor.
4 The Fund's average maturity includes the effect of futures and options.
7
<PAGE>
==================================
THE STRONG INTERNATIONAL BOND FUND
==================================
THE FUND'S PERFORMANCE WAS HELPED BY A LONGER MATURITY AND APPROPRIATE COUNTRY
ALLOCATIONS.
========================================
ASSETS BY CREDIT-QUALITY RATING
========================================
Based on net assets as of 4-30-98
[PIE CHART]
Short-Term Investments 27.9%
AAA 23.6%
AA 18.5%
BB 11.6%
A 10.6%
BBB 7.8%
Includes non-rated and equity securities
which have been determined to be of
equivalent quality as those rated.
========================================
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,
the Fund will maintain an average maturity of four to nine years.
=========================================
COUNTRY EXPOSURE
=========================================
As of 4-30-98
COUNTRY % OF EXPOSURE*
--------------------------------
Japan 23.0%
................................
Italy 14.8%
................................
Germany 12.7%
................................
France 10.5%
................................
Denmark 9.5%
................................
Please see the Schedule of Investments
in Securities for a complete listing
of the Fund's portfolio.
* Exposure is calculated based on the sum
of total market value of securities and
market value of futures.
=========================================
The Fund's total return for the six month period ended April 30, 1998 was
- -2.77%.(1) That lagged the return of its benchmark, the Salomon Brothers
Non-U.S. World Government Bond Index (Currency Unhedged), which returned
- -1.02%. Most of the underperformance for the period came in January 1998, when
the non-investment-grade countries--emerging markets--were severely hurt by the
turmoil in the Southeast Asian countries like Thailand and Indonesia. Since its
inception on March 31, 1994, the Fund has posted an average annual return of
7.35%, considerably ahead of the benchmark's average annual return of 6.05% for
the same period.
===============================================================================
AVERAGE ANNUAL TOTAL RETURNS(1)
===============================================================================
As of 4-30-98
STRONG SALOMON BROTHERS NON-U.S.
INTERNATIONAL LIPPER INTERNATIONAL WORLD GOVERNMENT BOND
TIME PERIOD BOND FUND INCOME FUNDS INDEX* INDEX (CURRENCY UNHEDGED)*
- -------------------------------------------------------------------------------
1-YEAR 2.73% 9.12% 6.44%
...............................................................................
3-YEAR 2.02% 7.75% 1.51%
...............................................................................
SINCE INCEPTION
(on 3-31-94) 7.35% 7.42% 6.05%
...............................................................................
Please note that the Lipper index contains "pure" emerging markets funds as
well as international bond funds, and includes both hedged and unhedged funds.
===============================================================================
SOME NOTES ON RELATIVE PERFORMANCE
The unhedged posture of this Fund hurts it in comparison with other funds in
the Lipper International Income Funds Index. That's because the Lipper category
includes international funds that are fully hedged, as well as global funds
that are partially (about 50%) hedged.
Further, because the Fund is unhedged against foreign currency movements, any
appreciation of the U.S. dollar hurts the total return of the Fund. Although we
believe this unhedged approach is useful over the long term, in the past six-
and 12-month periods, significant appreciation of the U.S. dollar versus major
currencies adversely affected the Fund's returns. The U.S. dollar over the
past six months was up by over 10% versus the Japanese yen, and by almost 4%
versus the German mark. Over the past 12 months, the U.S. dollar has
appreciated by almost 7% versus the Japanese yen and the German mark.
PERFORMANCE ANALYSIS--WINNERS AND LOSERS
The Fund's performance was helped by a longer maturity and appropriate country
allocations. Our position in high grade major markets, i.e., Germany, the U.K.,
Italy, and Japan, performed well as interest rates in these and other major
countries came down. An emphasis on North America and Europe, as well as a
deemphasis on Japan, further helped performance. We also benefited from
short-maturity instruments in emerging countries, such as Argentina, Brazil,
and Russia.
Performance overall, however, was dragged down by the Fund's non-investment-
grade position, particularly by holdings in troubled Indonesia. Also hindering
performance were longer-maturity instruments in emerging countries and our
investment in commercial paper from Polysindo, an Indonesian textile company.
We continue to hold the investment in Polysindo, because while the political
situation in Indonesia is currently grabbing headlines, we believe the actions
of the International Monetary Fund-which works to stabilize currencies--to
restructure the region will help the country in the long run. Indonesia's
financial system and Polysindo should recover as the IMF program is implemented
and the financial conditions improve.
OUTLOOK FOR THE MARKETS
Globally, we continue to be optimistic about prospects for continued low
inflation and interest rates. As Europe gets ready for the European Monetary
Union--which will bring most of the European Union
8
<PAGE>
to a single currency-fiscal discipline will become an integral part of the
European governments. One positive note is that the European Central bank will
be fashioned after the strong Bundesbank, the German central bank.
Japan seems to have reversed gears, and now appears to be slowing down despite
numerous attempts at fiscal stimulation. The Southeast Asian crisis will bring
recessions to most of the countries in that region. On the home front, despite
tight labor and capacity conditions and equity markets' high price levels, the
U.S. Federal Reserve seems willing to maintain a neutral monetary policy due to
the benign inflation outlook around the world.
Some normalcy has returned to emerging markets, but the situation remains
fluid. We would like to continue to take advantage of some high-yield
opportunities in the emerging markets to add income to the portfolio.
As an investor in this Fund, please keep in mind that 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. These risks are intensified in emerging
markets. 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 than a pure U.S.
portfolio could offer.
We appreciate your investment in the Strong International Bond Fund, and look
forward to continuing to serve your investment needs.
Sincerely,
/s/ Shirish Malekar
Shirish T. Malekar
Portfolio Manager
[PHOTO OF SHIRISH T. MALEKAR]
===============================================================================
GROWTH OF AN ASSUMED $10,000 INVESTMENT
===============================================================================
From 3-31-94 to 4-30-98
[GRAPH]
Salomon Brothers
THE STRONG Non U.S.-World Lipper
INTERNATIONAL Government Bond Index International Income
BOND FUND (Currency Hedged) Funds Index
3-94 10,000 10,000 10,000
12-94 10,866 10,396 9,837
12-95 12,937 12,428 11,700
12-96 13,966 12,938 12,783
12-97 13,297 12,387 12,997
4-98 13,360 12,711 13,392
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) and
the Lipper International Income Funds Index. Results include the reinvestment
of all dividends and capital gains distributions. Performance is historical and
does not represent future results. Investment returns and principal value vary,
and you may have a gain or loss when you sell shares.
- -------------------------------------------------------------------------------
========================================
PORTFOLIO STATISTICS
========================================
As of 4-30-98
30-DAY ANNUALIZED YIELD(2) 6.13%
AVERAGE CREDIT QUALITY(3) A
AVERAGE MATURITY(4) 8.2 YEARS
========================================
* The Salomon Brothers Non-U.S. World Government Bond Index (Currency Unhedged)
is an unmanaged index generally representative of liquid, non-U.S. fixed
income government securities. The Lipper International Income Funds Index is
an equally-weighted performance index of the largest qualifying funds in this
Lipper category. Source of the Salomon index data is Standard & Poor's
Micropal. Source of the Lipper index data is Lipper Analytical Services, Inc.
1 Average annual total return and total return measure change in the value of
an investment in the fund, assuming reinvestment of all dividends and capital
gains. Average annual total return reflects annualized change, while total
return reflects aggregate change.
2 From time to time, the Fund's advisor has waived its management fees
resulting in higher returns and without these waivers the rankings may have
been lower.
3 For purposes of this average rating, the Fund's short-term debt obligations
have been assigned a long-term rating by the Advisor.
4 The Fund's average maturity includes the effect of futures.
9
<PAGE>
======================================
THE STRONG SHORT-TERM GLOBAL BOND FUND
======================================
OUR POSITION IN HIGH-GRADE MAJOR MARKETS, I.E., GERMANY, THE U.K., AND ITALY,
PERFORMED WELL AS INTEREST RATES IN THESE AND OTHER MAJOR COUNTRIES CAME DOWN.
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. Normally, the Fund will maintain an average maturity of three years or
less.
=========================================
COUNTRY EXPOSURE
=========================================
As of 4-30-98
COUNTRY % OF EXPOSURE*
- -----------------------------------------
Argentina 10.6%
.................................
Brazil 7.2%
.................................
Russia 5.9%
.................................
Indonesia 3.8%
.................................
Denmark 2.7%
.................................
Please see the Schedule of Investments
in Securities for a complete listing
of the Fund's portfolio.
* Exposure is calculated based on the sum
of total market value of securities and
market value of futures.
=========================================
The Fund's total return for the six-month period ended April 30, 1998 was 3.21%
(1), just ahead of its benchmark, the Salomon Brothers 1-3 Year World
Government Bond Index (Currency Hedged), which returned 3.20%, and ahead of the
Lipper Short World Multi-Market Income Average, which returned 1.85% over the
same period. Since its inception on March 31, 1994, the Fund's average annual
total return was 8.36%--considerably ahead of both the Salomon Brothers
benchmark and Lipper Short World Multi-Market Income Average, which were up
6.88% and 4.28% respectively, for the same period.
PERFORMANCE ANALYSIS--WINNERS AND LOSERS
The Fund's performance was achieved by a slightly longer-than-average maturity
relative to our benchmark and careful country allocations. Our position in
high-grade major markets, i.e., Germany, the U.K., and Italy, performed well as
interest rates in these and other major countries came down. An emphasis and
deemphasis on major countries--overweight in North America and Europe, and
minimal exposure to Japan--also helped. We also benefited from short-maturity
instruments in emerging countries such as Argentina, Brazil, and Russia.
===============================================================================
AVERAGE ANNUAL TOTAL RETURNS(1)
===============================================================================
As of 4-30-98
LIPPER SHORT SALOMON BROTHERS 1-3 YEAR
STRONG SHORT-TERM WORLD MULTI-MARKET WORLD GOVERNMENT BOND
TIME PERIOD GLOBAL BOND FUND INCOME AVERAGE* INDEX (CURRENCY HEDGED)*
- -------------------------------------------------------------------------------
1-YEAR 6.03% 4.99% 6.91%
...............................................................................
3-YEAR 8.80% 6.23% 7.51%
...............................................................................
SINCE INCEPTION
(on 3-31-94) 8.36% 4.28% 6.88%
...............................................................................
Please note that the Lipper index contains "pure" emerging markets funds as
well as international bond funds, and includes both hedged and unhedged funds.
===============================================================================
Although the past six months have seen modest declines in interest rates and a
fairly stable interest rate environment around the world, in the same period
many markets experienced some volatility due to the uncertainties in Southeast
Asia. The currencies and bonds of Southeast Asian issuers came under pressure
as the economic prospects for these countries became gloomy. The Fund was,
however, fully hedged against the Southeast Asian currency risks. Currency
devaluations therefore did not have a direct impact on the Fund. We have a
small (3.8%) exposure to Southeast Asia in the portfolio. The sell-off in these
markets also presented us with some buying opportunities. We therefore added a
small position in Korea (2.0%).
Although our exposure to Southeast Asia is small, we feel that this discussion
is important. The region has demanded significant attention in the marketplace,
in global political decisions, and obviously in the newspapers and on the
evening news programs. Although the political situation in Indonesia is
currently grabbing headlines, we believe the actions of the Inter-national
Monetary Fund--which works to stabilize currencies--to restructure the region
will help the countries and the companies in it over the long run.
OUTLOOK FOR THE MARKETS
Globally, we continue to be optimistic about prospects for continued low
inflation and interest rates. As Europe gets ready for the European Monetary
Union--which will bring most of the European Union to a single currency--fiscal
discipline will become an integral part of more European governments. One
positive note is that the European Central bank will be fashioned after the
strong Bundesbank, the German central bank.
Japan seems to have reversed gears, slowing down despite numerous attempts at
fiscal stimulation. The Southeast Asian crisis will likely bring recessions to
most of the countries in the region. On the home front, despite tight labor and
capacity conditions and the equity markets' high price levels, the U.S. Federal
Reserve seems willing to maintain a neutral monetary policy due to the benign
inflation outlook around the world.
10
<PAGE>
Some normalcy has returned to emerging markets, but the situation remains
fluid. We would like to continue to take advantage of some high-yield
opportunities in the emerging markets to add income to the portfolio.
As an investor in this Fund, please keep in mind that 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. These risks are intensified in emerging
markets. 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 than a pure U.S.
portfolio could offer.
We appreciate your investment in the Strong Short- Term Global Bond Fund, and
look forward to continuing to serve your investment needs.
Sincerely,
/s/ Shirish Malekar
Shirish T. Malekar
Portfolio Manager
[PHOTO OF SHIRISH T. MALEKAR]
===============================================================================
GROWTH OF AN ASSUMED $10,000 INVESTMENT
===============================================================================
From 3-31-94 to 4-30-98
[GRAPH]
THE STRONG Salomon Brothers Lipper
SHORT-TERM 1-3 Year World Short World
GLOBAL BOND Government Bond Index Multi-Market
FUND (Currency Hedged) Income Average
3-94 10,000 10,000 10,000
12-94 10,513 10,153 9,721
12-95 11,612 11,286 10,467
12-96 12,775 12,088 11,292
12-97 13,629 12,856 11,669
4-98 13,882 13,123 11,865
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) and the
Lipper Short World Multi-Market Income Average. Results include the
reinvestment of all dividends and capital gains distributions. Performance is
historical and does not represent future results. Investment returns and
principal value vary, and you may have a gain or loss when you sell shares.
- -------------------------------------------------------------------------------
========================================
PORTFOLIO STATISTICS
========================================
As of 4-30-98
30-DAY ANNUALIZED YIELD(2) 6.77%
AVERAGE CREDIT QUALITY(3) A
AVERAGE MATURITY(4) 2.2 YEARS
========================================
* The Salomon Brothers 1-3 Year World Government Bond Index (Currency Hedged)
is an unmanaged index generally representative of short-term, global fixed
income government securities. Rolling one-month-forward exchange contracts
are used as the hedging instrument. The Lipper Short World Multi-Market
Income Average represents funds that invest in non-U.S. dollar and U.S.
dollar debt instruments and, by policy, keeps a dollar-weighted average
maturity of less than five years. Source of the Salomon index data is Salomon
Brothers. Source of the Lipper data is Lipper Analytical Services, Inc.
1 Average annual total return and total return measure change in the value of
an investment in the fund, assuming reinvestment of all dividends and capital
gains. Average annual total return reflects annualized change, while total
return reflects aggregate change.
2 As of April 30, 1998, the Advisor was temporarily waiving fees of 0.05%.
Otherwise, the Fund's yield would have been 6.72% and the total return would
have been lower. Yields are historical, do not represent future yields, and
will vary.
3 For the purposes of the average, the Fund's short-term debt obligations have
been assigned a long-term rating by the Advisor.
4 The Fund's average maturity includes the effect of futures.
11
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
===============================================================================
STRONG ASIA PACIFIC FUND
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
COMMON STOCKS 74.7%
AUSTRALIA 11.6%
CI Technologies Group, Ltd. (Acquired 5/20/97;
Cost $111,104) (d) 98,500 $ 172,628
Cinema Plus, Ltd. 183,000 237,571
Cultus Petroleum NL (b) 150,000 208,361
Foster's Brewing Group, Ltd. 94,000 203,791
Freeport-McMoRan Copper & Gold, Inc. Class B 19,100 359,319
Hoyts Cinemas Group 97,000 157,407
Normandy Mining, Ltd. 400,308 444,326
Oil Search, Ltd. 65,000 142,607
Ramsay Health Care, Ltd. 20,000 29,859
Simeon Wines, Ltd. 110,000 278,464
Sydney Aquarium, Ltd. 200,450 513,943
Western Mining Corporation, Ltd. 73,000 258,718
----------
3,006,994
BRAZIL 0.8%
Companhia de Electricidade do Estado do Rio
de Janeiro (b) 284,000,000 211,106
CHINA 2.1%
C.H. China Investment, Ltd. (b) 290,500 58,455
C.H. China Investment, Ltd. Warrants,
Expire 7/01/99 (b) 237,500 10,791
China Southern Airlines Company, Ltd. ADR (b) 9,000 100,688
First Tractor Company, Ltd. H Shares 270,000 150,716
Huaneng Power International, Inc. Sponsored ADR 10,000 220,000
----------
540,650
HONG KONG 4.6%
CDL Hotels International, Ltd. 516,399 158,292
Cheung Kong (Holdings), Ltd. 45,000 299,109
Glorius Sun Enterprises 419,000 102,208
Guoco Group, Ltd. 79,000 197,806
Hang Seng Bank, Ltd. 9,600 80,847
Peregrine Investment Holdings, Ltd. 100,000 0
South China Morning Post (Holdings), Ltd. 184,000 110,429
Tianjin Development Holdings, Ltd. (Acquired
12/05/97; Cost $172,360) (b) (d) 200,000 228,446
----------
1,177,137
INDIA 5.0%
Asian Hotels, Ltd. 30,000 127,967
Bajaj Auto, Ltd. 7,500 112,576
Corporation Bank (b) 40,000 145,225
Hindalco Industries, Ltd. 7,000 133,157
The India Public Sector Fund, Ltd. (Acquired
11/03/97; Cost $146,260) (d) 14,200 143,846
Indian Hotels Company, Ltd. 150 2,002
The Indian Smaller Companies Fund, Ltd. (b) 13,580 96,554
Larsen & Toubro, Ltd. 21,000 132,275
Marico Industries, Ltd. 17,000 134,171
Peregrine Indian Smaller Companies Fund (b) 2,000 109,000
Reliance Industries, Ltd. 300 1,446
Titan Industries, Ltd. 25,210 36,141
UTI-Mastergrowth 93 Fund (b) 400,000 121,441
----------
1,295,801
INDONESIA 2.7%
Astra International PT 1,270,000 253,196
Gulf Indonesia Resources, Ltd. (b) 7,000 107,625
London Sumatra Indonesia PT 450,000 112,500
Siloam Gleneagles Health Care PT (Acquired
3/12/97; Cost $206,715) (d) 168,000 27,645
Telekomunikasi Indonesia PT (Persero) 537,000 214,122
----------
715,088
JAPAN 14.3%
Fidelity Japan OTC and Regional Markets
Fund, Ltd. (b) 40,500 162,000
Fujikura, Ltd. 25,000 128,340
Fujitsu, Ltd. 26,000 302,371
General Sekiyu K.K. 14,000 59,541
Horipro, Inc. 26,000 170,463
Japan Associated Finance 5,000 165,977
Japan OTC Equity Fund, Inc. (b) 300 120,000
Kirin Brewery Company, Ltd. 19,000 165,186
Konami Company, Ltd. 12,000 264,659
Marubeni Corporation 17,000 38,645
Meitec 8,000 261,949
Mikasa Coca-Cola Bottling Warrants,
Expire 1/05/00 (b) 1,500 47,984
Mitsui Fudosan 12,000 109,115
Mizuno Corporation 25,000 84,870
Nippon Broadcasting System 4,000 183,064
Nippon Shinpan Company 160,000 233,647
Nippon Telegraph & Telephone Corporation 150 130,975
Nomura International PLC Warrants,
Expire 4/26/02 (b) 400 20,000
Nomura Securities Company, Ltd. 24,000 291,758
Oriental Land Company, Ltd. 3,000 133,459
Orix Corporation 2,100 144,637
Sanwa Electric Warrants, Expire 1/19/01 (b) 500 33,655
Shochiku Warrants, Expire 12/29/99 (b) 525 39,375
Sony Corporation 4,200 348,077
Toho Company 500 52,277
----------
3,692,024
KAZAKHSTAN 0.2%
Kazakhstan Investment Fund, Ltd. (b) 19,000 57,950
LEBANON 0.8%
Solidere GDR 13,500 202,838
MALAYSIA 5.3%
Camerlin Group BHD 167,000 170,362
Highlands & Lowlands BHD 99,000 111,093
Kentucky Fried Chicken BHD 156,000 247,087
Kumpulan Guthrie BHD 200,000 168,591
Malaysia International Shipping BHD (Fgn Reg) 100,000 174,497
Oriental Holdings BHD 115,000 240,805
Resorts World BHD 57,000 110,174
Sime Darby BHD 170,000 150,604
----------
1,373,213
NEW ZEALAND 6.5%
Air New Zealand, Ltd. Class B 195,000 275,029
CDL Hotels New Zealand, Ltd. 747,000 111,555
Evergreen Forests, Ltd. (b) 658,100 152,878
Guinness Peat Group PLC 828,117 448,871
Kiwi Income Property Trust 154,000 89,436
Restaurant Brands New Zealand, Ltd. 270,000 195,631
Shortland Properties, Ltd. 381,500 165,641
Telecom Corporation of New Zealand, Ltd. (b) 91,000 243,104
----------
1,682,145
PHILIPPINES 3.5%
Alaska Milk Corporation (b) 4,321,000 198,024
Cosmos Bottling Corporation 1,604,000 207,741
Empire East Land Holdings, Inc. (b) 1,199,600 18,524
La Tondena Distillers, Inc. 373,000 287,995
SM Prime Holdings, Inc. 1,120,000 200,847
----------
913,131
SINGAPORE 6.9%
Fraser & Neave, Ltd. 60,000 269,194
Hong Leong Finance, Ltd. (Fgn Reg) 75,000 113,744
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
STRONG ASIA PACIFIC FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
Jurong Shipyards, Ltd. 37,000 $ 184,708
Keppel Corporation, Ltd. 85,500 230,161
Keppel Land, Ltd. 98,000 116,424
Oversea-Chinese Banking Corporation, Ltd. (Fgn Reg) 39,000 205,782
Overseas Union Bank, Ltd. (Fgn Reg) 30,000 113,744
Sembawang Corporation, Ltd. 92,000 183,709
United Overseas Bank, Ltd. (Fgn Reg) (b) 39,000 184,834
United Overseas Land, Ltd. (b) 258,000 192,379
-----------
1,794,679
SOUTH KOREA 1.6%
S1 Corporation 2,000 284,644
Samsung Display Devices Company, Ltd. 2,300 114,569
Samsung Display Devices Company, Ltd. Rights,
Expire 5/13/98 (b) 332 0
-----------
399,213
SRI LANKA 0.8%
National Development Bank, Ltd. (b) 36,000 133,692
Sri Lanka Growth Fund (b) 15,000 75,000
-----------
208,692
TAIWAN 1.5%
Jardine Fleming Fund 320,000 129,572
Kwang Hua Fortune Fund 279,000 139,627
U-Ming Marine Transport Corporation 213,000 107,243
-----------
376,442
THAILAND 3.4%
Advanced Info Service Public Company, Ltd.
(Fgn Reg) 28,000 196,875
Dusit Thani PCL (Fgn Reg) (b) 92,500 108,398
Industrial Finance Corporation of Thailand
(Fgn Reg) 391,000 162,917
PTT Exploration and Production PCL (Fgn Reg) 11,200 119,000
Royal Garden Resort PCL 434,000 155,404
Ruang Khao Fund Units 200,000 30,208
Ruang Khao Fund Units (Fgn Reg) (b) 718,000 108,448
-----------
881,250
VIETNAM 1.2%
Beta Mekong Fund (b) 25,000 143,750
Beta Mekong Fund Warrants, Expire 10/31/09 (b) 5,000 2,750
Vietnam Frontier Fund (b) 34,000 153,000
-----------
299,500
OTHER 1.9%
Apex Silver Mines, Ltd. (b) 14,000 163,625
Morgan Stanley Emerging Markets Fund, Inc. 14,000 176,750
Southeast Asia Frontier Fund LP (b) 25,000 162,500
-----------
502,875
- ------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $23,852,212) 19,330,728
- ------------------------------------------------------------------------------
CONVERTIBLE BONDS 4.0%
CHINA 0.6%
Shanghai Industrial Investment Treasury, Ltd.,
1.00%, Due 2/24/03 (Acquired 2/18/98 - 3/16/98;
Cost $153,700) (d) 148,000 USD 152,995
HONG KONG 1.1%
New World Infrastructure, Ltd., 5.00%, Due 7/15/01
(Acquired 2/10/98 - 2/11/98; Cost $302,694) (d) 285,000 USD 285,000
JAPAN 1.4%
STB Cayman Capital, Ltd., 0.50%, Due 10/01/07 60,000,000 JPY 375,800
SINGAPORE 0.9%
DBS Land, Ltd. Debentures, 2.00%,
Due 12/31/01 252,000 USD 233,100
- ------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS (COST $1,067,056) 1,046,895
- ------------------------------------------------------------------------------
CORPORATE BONDS 1.9%
SOUTH KOREA
Republic of Korea Notes, 8.875%,
Due 4/15/08 500,000 USD 491,734
- ------------------------------------------------------------------------------
TOTAL CORPORATE BONDS (COST $493,235) 491,734
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 12.9%
COMMERCIAL PAPER 0.9%
DISCOUNTED 0.3%
INDONESIA
Polysindo EKA Perkasa PT Notes, Zero %,
Due 4/09/98 (b) (e) 1,000,000,000 IDR 70,886
INTEREST BEARING, DUE UPON DEMAND 0.6%
UNITED STATES
United States Cayman Eurodollar
Call Deposit, 4.50% $ 163,000 163,000
TIME DEPOSITS 12.0%
UNITED STATES
Deutsche Bank, 5.5625%, Due 5/01/98 1,400,000 1,400,000
Republic National Bank, 5.375%, Due 5/01/98 400,000 400,000
Wachovia Grand Cayman, 5.40%, Due 5/01/98 1,300,000 1,300,000
-----------
Total Time Deposits 3,100,000
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS (COST $3,591,583) 3,333,886
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES (COST $29,004,086) 93.5% 24,203,243
Other Assets and Liabilities, Net 6.5% 1,677,810
- ------------------------------------------------------------------------------
NET ASSETS 100.0% $25,881,053
==============================================================================
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
- ----------------------------------------------------------------------------
Settlement Value Unrealized
Date in USD Appreciation
- ----------------------------------------------------------------------------
Sold:
(168,000,000) JPY 7/14/98 ($1,278,344) $35,593
===============================================================================
STRONG INTERNATIONAL STOCK FUND
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
COMMON STOCKS 88.4%
ARGENTINA 0.2%
Banco Rio de la Plata SA ADR (b) 22,000 $ 302,500
AUSTRALIA 5.1%
Cinema Plus, Ltd. 300,000 389,460
Freeport-McMoRan Copper & Gold, Inc. Class B 68,000 1,279,250
Hoyts Cinemas Group 285,000 462,484
Normandy Mining, Ltd. 1,352,543 1,501,270
Simeon Wines, Ltd. 428,102 1,083,736
Sydney Aquarium, Ltd. 637,100 1,633,489
Western Mining Corporation, Ltd. 213,000 754,890
----------
7,104,579
13
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
===============================================================================
STRONG INTERNATIONAL STOCK FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
BRAZIL 0.7%
Companhia de Electricidade do Estado do Rio de
Janeiro (b) 609,535,000 $ 453,087
Telecommunicacoes Brasileiras SA Sponsored
ADR (b) 4,100 499,431
-----------
952,518
CANADA 0.6%
Imax Corporation 30,000 817,500
CHILE 1.3%
Distribucion y Servicio SA ADR (b) 29,100 512,888
Quimica y Minera Chile SA Sponsored ADR 14,700 638,531
Quinenco SA ADR (b) 50,500 520,781
Santa Isabel SA Sponsored ADR 11,050 182,325
-----------
1,854,525
CHINA 0.3%
First Tractor Company, Ltd. H Shares 700,000 390,746
CZECH REPUBLIC 0.6%
Restitucni Investment Fund 26,000 800,292
EGYPT 0.7%
Al-Ahram Beverages Company S.A.E. GDR 28,200 895,350
Nile for Matches 25 132
Suez Cement 600 12,520
-----------
908,002
FRANCE 8.2%
Accor SA 3,000 816,981
Axa-UAP (b) 8,200 961,901
Cap Gemini SA 6,000 778,599
CIPE France SA (b) 23,000 808,258
EDAP TMS SA ADR (b) 15,750 87,609
Genset SA Sponsored ADR (b) 42,500 1,280,313
Groupe Danone 6,600 1,557,199
SEFIMEG (Societe Francaise d'Investissements
Immobiliers et de Gestion) 15,000 1,205,284
Societe du Louvre - Registered Shares 15,000 1,121,542
Societe Generale 5,400 1,123,336
Thomson CSF 18,000 711,805
Transgene SA ADR 48,500 873,000
-----------
11,325,827
GERMANY 3.8%
BASF AG 34,000 1,513,426
Continental AG 10,000 284,122
Deutsche Bank AG 18,700 1,438,702
Eurobike AG 49,000 1,173,816
Hannover Rueckversicherungs AG 6,400 812,925
-----------
5,222,991
GREECE 1.9%
Alpha Credit Bank AE 10,000 1,055,487
Hellenic Bottling Company SA 11,200 417,152
Royal Olympic Cruise Lines, Inc. (b) 67,000 1,231,125
-----------
2,703,764
HONG KONG 0.7%
CDL Hotels International, Ltd. 987,935 302,832
Cheung Kong (Holdings), Ltd. 85,000 564,985
Glorius Sun Enterprises 601,000 146,604
Peregrine Investment Holdings, Ltd. 600,000 0
-----------
1,014,421
INDIA 2.8%
Asian Hotels, Ltd. 650 2,773
Bajaj Auto, Ltd. 36,000 540,363
India Public Sector Fund, Ltd. (Acquired 11/03/97;
Cost $898,160) (d) 87,200 883,336
Indian Hotels Company, Ltd. 3,250 43,378
The Indian Smaller Companies Fund, Ltd. (b) 53,194 378,209
Larsen & Toubro, Ltd. 107,000 673,973
Marico Industries, Ltd. 65,000 513,007
Peregrine Indian Smaller Companies Fund (b) 7,100 386,950
Titan Industries, Ltd. 100 143
UTI-Mastergrowth 93 Fund (b) 1,650,000 500,945
-----------
3,923,077
INDONESIA 0.4%
Siloam Gleneagles Health Care PT (Acquired 3/12/97;
Cost $1,004,045) (d) 816,000 134,278
Telekomunikasi Indonesia PT (Persero) 1,000,000 398,734
-----------
533,012
IRELAND 0.5%
Connemara Green Marble Quarries PLC (Acquired
11/21/96 - 6/20/97; Cost $635,000) (b) (d) (f) 50,800 635,000
Connemara Green Marble Quarries PLC Warrants,
Expire 9/30/02 (b) 8,000 0
-----------
635,000
ITALY 1.8%
Assicurazioni Generali 15,000 449,103
CSP International Industria Calze Spa 30,000 407,556
Filatura del Brembo Spa 47,500 640,231
Ittierre Holding Spa 130,000 512,884
Zucchini Spa 60,000 545,147
-----------
2,554,921
JAPAN 10.8%
Fidelity Japan OTC and Regional Markets
Fund, Ltd. (b) 175,000 700,000
Fontaine Company, Ltd. 19,000 269,590
Fujikura, Ltd. 135,000 693,037
Fujitsu, Ltd. 112,000 1,302,522
Horipro, Inc. 89,000 583,508
Japan Associated Finance 22,000 730,297
Japan OTC Equity Fund, Inc. (b) 1,800 720,000
Kirin Brewery Company, Ltd. 103,000 895,484
Konami Company, Ltd. 43,800 966,007
Meitec 22,000 720,361
Mizuno Corporation 100,000 339,481
Nippon Broadcasting System 20,000 915,318
Nippon Shinpan Company 690,000 1,007,603
Nippon Telegraph & Telephone Corporation 900 785,849
Nomura Securities Company, Ltd. 113,000 1,373,692
Oriental Land Company, Ltd. 13,500 600,565
Orix Corporation 10,000 688,747
Sanwa Electric Warrants, Expire 1/19/01 (b) 600 40,387
Sony Corporation 21,000 1,740,384
-----------
15,072,832
KAZAKHSTAN 0.7%
Firebird Republics Fund (Acquired 8/29/97;
Cost $771,186) (b) (d) 4,055 682,525
Kazakhstan Investment Fund, Ltd. (b) 113,000 344,650
-----------
1,027,175
LEBANON 0.5%
Solidere GDR 50,000 751,250
MALAYSIA 1.4%
Kentucky Fried Chicken BHD 410,000 649,396
Kumpulan Guthrie BHD 401,000 338,024
Malaysia International Shipping BHD (Fgn Reg) 236,000 411,812
Oriental Holdings BHD 240,000 502,550
-----------
1,901,782
MALI 0.2%
Randgold Resources, Ltd. GDR (Acquired 6/26/97;
Cost $907,500) (b) (d) 55,000 343,750
14
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
STRONG INTERNATIONAL STOCK FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
MEXICO 0.5%
Grupo Financiero Banamex Accival SA de CV (b) 205,000 $ 634,207
NAMIBIA 0.4%
Namibian Minerals Corporation (b) 174,000 609,000
NETHERLANDS 4.1%
Hunter Douglas NV 24,000 1,169,486
ING Groep NV (b) 25,750 1,672,591
Koninklijke Bols Wessanen NV 86,000 1,357,178
Royal Dutch Petroleum Company 13,000 717,077
Vendex International NV 12,000 769,368
------------
5,685,700
NEW ZEALAND 3.2%
Air New Zealand, Ltd. Class B 535,000 754,567
CDL Hotels New Zealand, Ltd. 1,106,400 165,226
Evergreen Forests, Ltd. (b) 995,200 231,187
Guinness Peat Group PLC 2,436,402 1,320,622
Restaurant Brands New Zealand, Ltd. 700,000 507,193
Shortland Properties, Ltd. 1,297,900 563,527
Telecom Corporation of New Zealand, Ltd. (b) 338,000 902,958
------------
4,445,280
NORWAY 2.1%
Christiania Bank Og Kreditkasse 158,000 726,091
Fred Olsen Energy ASA 46,700 807,136
Tandberg ASA (b) 59,000 1,343,820
------------
2,877,047
PERU 0.3%
Telefonica del Peru SA Sponsored ADR (b) 20,000 442,500
PHILIPPINES 0.9%
Cosmos Bottling Corporation 5,723,000 741,210
SM Prime Holdings, Inc. 3,060,000 548,743
------------
1,289,953
PORTUGAL 2.2%
Banco Pinto & Sotto Mayor SA 43,000 1,082,011
Engil-SGPS 67,000 777,418
Sonae Investimentos-Sociedade Gestora de
Participacoes Sociais SA (b) 21,000 1,129,321
------------
2,988,750
ROMANIA 1.2%
The Romanian Investment Fund, Ltd. (Acquired
5/08/97; Cost $1,900,000) (b) (d) 1,900 1,662,500
RUSSIA 0.7%
Morgan Stanley Russia & New Europe Fund, Inc. 44,000 1,001,000
SINGAPORE 3.4%
Fraser & Neave, Ltd. 152,000 681,959
Jurong Shipyards, Ltd. 138,000 688,910
Keppel Corporation, Ltd. 270,000 726,825
Keppel Land, Ltd. 488,000 579,741
Oversea-Chinese Banking Corporation, Ltd.
(Fgn Reg) 107,000 564,581
Overseas Union Bank, Ltd. (Fgn Reg) 116,000 439,810
United Overseas Bank, Ltd. (b) (Fgn Reg) 120,000 568,720
United Overseas Land, Ltd. (b) 704,000 524,942
------------
4,775,488
SOUTH AFRICA 1.2%
Baring Simba Fund (b) 33,000 301,125
Baring Simba Fund Warrants, Expire 9/30/00 (b) 77,000 67,375
Compagnie Financiere Richemont AG Depositary
Receipts 90,000 1,236,342
------------
1,604,842
SOUTH KOREA 1.0%
S1 Corporation 5,000 711,610
Samsung Display Devices Company, Ltd. 12,500 622,659
Samsung Display Devices Company, Ltd. Rights,
Expire 5/13/98 (b) 1,809 0
------------
1,334,269
SPAIN 0.2%
Sol Melia SA 5,000 237,736
SWEDEN 2.6%
Autoliv, Inc. 42,000 1,273,729
Skandia Forsakrings AB 12,000 834,699
Volvo AB 'B Shares' 50,000 1,458,272
------------
3,566,700
SWITZERLAND 2.6%
Adecco SA 1,500 654,782
Lindt & Spruengli AG 650 1,420,860
SMH (Suisse Microelectronique et d'Horlogerie) 2,325 1,516,944
------------
3,592,586
THAILAND 1.1%
Advanced Info Service Public Company, Ltd.
(Fgn Reg) 70,000 492,188
Industrial Finance Corporation of Thailand
(Fgn Reg) 946,900 394,542
Ruang Khao Fund Units 936,000 141,375
Ruang Khao Fund Units (Fgn Reg) (b) 3,620,100 546,786
------------
1,574,891
UKRAINE 0.8%
Ukrainian Opportunity Fund (Acquired 3/21/97;
Cost $1,200,000) (b) (d) 118,800 1,128,600
UNITED KINGDOM 15.5%
Barclays PLC 28,600 825,113
Billiton PLC 518,000 1,482,746
Bluebird Toys PLC 605,000 1,112,383
British Airways PLC 144,000 1,513,978
Courtaulds PLC 159,000 1,170,126
Diageo PLC 86,264 1,026,404
Dr. Solomon's Group PLC Sponsored ADR (b) 32,000 952,000
Eidos PLC (b) 49,000 753,512
Games Workshop Group PLC 100,000 1,353,915
General Electric Company PLC 155,000 1,274,038
Great Universal Stores PLC 55,000 839,344
Lonrho PLC 105,000 762,141
Low & Bonar PLC 75,000 418,711
LucasVarity PLC 354,000 1,585,785
Next PLC 116,000 963,653
NFC PLC 511,000 1,528,904
Rolls-Royce PLC 263,000 1,244,081
Schroders PLC 20,000 966,796
United News & Media PLC 129,000 1,746,550
------------
21,520,180
VIETNAM 0.3%
Vietnam Frontier Fund (b) 84,000 378,000
OTHER 0.9%
Apex Silver Mines, Ltd. (b) 80,000 935,000
The Regent Central Asia Investments (b) 38,000 285,000
------------
1,220,000
- ------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $121,488,466) 122,709,693
- ------------------------------------------------------------------------------
15
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
===============================================================================
STRONG INTERNATIONAL STOCK FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
PREFERRED STOCKS 4.1%
BRAZIL 1.1%
Banco Estado de Sao Paulo SA 11,000,000 $ 755,138
Companhia Antartica Paulista - Industria Brasileira
de Bebidas e Conexos 12,340 830,940
------------
1,586,078
GERMANY 1.4%
Friedrich Grohe AG 3,700 1,164,624
Porsche AG Non-Voting 300 750,418
------------
1,915,042
ITALY 1.6%
IFI Istituto Finanziario 60,000 1,360,395
Telecom Italia Spa 175,000 922,305
------------
2,282,700
- ------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS (COST $4,724,314) 5,783,820
- ------------------------------------------------------------------------------
CONVERTIBLE BONDS 1.5%
CHINA 0.4%
Shanghai Industrial Investment Treasury, Ltd.,
1.00%, Due 2/24/03 (Acquired 2/18/98 - 3/20/98;
Cost $530,050) (d) 507,000 USD 524,111
HONG KONG 0.5%
New World Infrastructure, Ltd., 5.00%, Due 7/15/01
(Acquired 2/10/98 - 2/11/98; Cost $732,838) (d) 690,000 USD 690,000
JAPAN 0.6%
STB Cayman Capital, Ltd., 0.50%, Due 10/01/07 135,000,000 JPY 845,550
- ------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS (COST $2,221,487) 2,059,661
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 3.0%
COMMERCIAL PAPER 0.2%
UNITED STATES
INTEREST BEARING, DUE UPON DEMAND
United States Cayman Eurodollar Call Deposit,
4.50% $ 330,000 330,000
TIME DEPOSITS 2.8%
UNITED STATES
Deutsche Bank, 5.5625%, Due 5/01/98 3,900,000 3,900,000
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS (COST $4,230,000) 4,230,000
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES (COST $132,664,267) 97.0% 134,783,174
Other Assets and Liabilities, Net 3.0% 4,116,075
- ------------------------------------------------------------------------------
NET ASSETS 100.0% $138,899,249
==============================================================================
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
- ----------------------------------------------------------------------------
Settlement Value Unrealized
Date in USD Appreciation
- ----------------------------------------------------------------------------
Sold:
(5,959,760) GBP 5/12/98 ($9,955,838) $ 44,162
(938,000,000) JPY 7/14/98 (7,137,422) 198,727
===============================================================================
STRONG GLOBAL HIGH-YIELD BOND FUND
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
CORPORATE BONDS 35.1%
JAPAN 2.5%
SB Treasury Company LLC, 9.40%, Due 12/29/49
(Rate Reset Effective 6/30/08) (Acquired 2/06/98,
Cost $200,000) (d) 200,000 USD $ 203,396
SOUTH KOREA 4.4%
Export-Import Bank Korea Notes, 7.10%,
Due 3/15/07 200,000 USD 187,432
Korea Development Bank Bonds, 6.50%,
Due 11/15/02 200,000 USD 180,973
----------
368,405
UNITED STATES 28.2%
AP Holdings, Inc. Senior Discount Notes, Zero %,
Due 3/15/08 (Rate Reset Effective 3/15/03)
(Acquired 4/14/98; Cost $153,125) (d) $250,000 152,500
Capstar Radio Broadcasting Partners, Inc. Senior
Subordinated Notes, 9.25%, Due 7/01/07 150,000 157,125
Digital Equipment Corporation Debentures, 8.625%,
Due 11/01/12 200,000 226,656
Flag, Ltd. Senior Notes, 8.25%, Due 1/30/08
(Acquired 3/10/98; Cost $153,563) (d) 150,000 152,625
Fresenius Medical Capital Trust II Trust Preferred
Securities, 7.875%, Due 2/01/08 (Acquired 2/13/98;
Cost $210,000) (d) 210,000 208,425
Fuji JGB Investment LLC Preferred Bonds, Series A,
9.87%, Due 12/31/49 (Rate Reset Effective 6/30/08)
(Acquired 4/01/98; Cost $248,125) (d) 250,000 237,316
Graham Packaging Holdings Company/GPC Capital
Corporation II Senior Discount Notes, Zero %,
Due 1/15/09 (Rate Reset Effective 1/15/03)
(Acquired 3/18/98; Cost $158,125) (d) 250,000 158,125
Hard Rock Hotel, Inc. Senior Subordinated Notes,
9.25%, Due 4/01/05 (Acquired 3/17/98;
Cost $250,000) (d) 250,000 252,500
Nextlink Communications, Inc. Senior Discounted
Notes, 9.00%, Due 3/15/08 (Acquired 3/12/98;
Cost $152,250) (d) 150,000 153,750
Optel, Inc. Senior Notes, Series B, 13.00%,
Due 2/15/05 150,000 168,375
U.S. Air, Inc. Senior Notes, 9.625%, Due 2/01/01 300,000 314,628
Winstar Communications, Inc. Senior Subordinated
Deferred Interest Notes, 11.00%, Due 3/15/08
(Acquired 3/17/98; Cost $150,000) (d) 150,000 150,750
----------
2,332,775
- ------------------------------------------------------------------------------
TOTAL CORPORATE BONDS (COST $2,912,193) 2,904,576
- ------------------------------------------------------------------------------
CONVERTIBLE BONDS 6.3%
RUSSIA 2.6%
Lukinter Finance BV, 1.00%, Due 11/03/03 250,000 USD 212,500
UNITED STATES 3.7%
Bell Atlantic Financial Services, Inc. Senior Notes,
5.75%, Due 4/01/03 (Acquired 2/12/98;
Cost $300,000) (d) $300,000 312,750
- ------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS (COST $512,525) 525,250
- ------------------------------------------------------------------------------
GOVERNMENT & AGENCY ISSUES 52.7%
ARGENTINA 14.0%
Republic of Argentina Floating Rate Debentures,
6.625%, Due 3/31/05 712,500 USD 654,431
16
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
STRONG GLOBAL HIGH-YIELD BOND FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
Republic of Argentina Floating Rate Senior Notes,
8.726%, Due 4/10/05 500,000 USD $ 503,750
----------
1,158,181
BRAZIL 16.9%
Government of Brazil Floating Rate Discount
Bonds, 6.625%, Due 4/15/24 500,000 USD ,415,940
Republic of Brazil Bonds, 9.375%, Due 4/07/08 500,000 USD 493,750
Republic of Brazil IDU Variable Rate Debentures,
Series A, 6.875%, Due 1/01/01 210,000 USD 204,270
Republic of Brazil Variable Rate Debentures, 8.00%,
Due 4/15/14 348,498 USD 284,897
----------
1,398,857
MEXICO 5.1%
United Mexican States Secured Bonds, Series W-B,
6.25%, Due 12/31/19 500,000 USD 422,500
PANAMA 1.8%
Republic of Panama Bonds, 8.875%, Due 9/30/27 150,000 USD 150,000
RUSSIA 3.8%
Russia Principal Loans Floating Rate Debentures,
6.7188%, Due 12/15/20 500,000 USD 316,875
SOUTH KOREA 5.9%
Republic of Korea Notes, 8.875%, Due 4/15/08 500,000 USD 491,734
VENEZUELA 5.2%
Republic of Venezuela Floating Rate Debt Convertible
Bonds, Series DL, 6.8125%, Due 12/18/07 476,190 USD 427,528
- ------------------------------------------------------------------------------
TOTAL GOVERNMENT & AGENCY ISSUES (COST $4,337,347) 4,365,675
- ------------------------------------------------------------------------------
PREFERRED STOCKS 3.8%
UNITED STATES
Primedia, Inc. 8.625% Series G Exchangeable
(Acquired 3/10/98; Cost $146,250) (d) 1,500 148,875
Time Warner, Inc. 10.25% Series K Exchangeable 150 169,125
- ------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS (COST $313,313) 318,000
- ------------------------------------------------------------------------------
COMMON STOCKS 0.1%
UNITED STATES
Optel, Inc. Non-Voting (Acquired 3/18/98;
Cost $6,750) (d) 150 6,000
- ------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $6,750) 6,000
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 0.1%
COMMERCIAL PAPER 0.0%
INTEREST BEARING, DUE UPON DEMAND
UNITED STATES
United States Cayman Eurodollar Call Deposit, 4.50% $ 1,000 1,000
GOVERNMENT & AGENCY ISSUES 0.1%
UNITED STATES
United States Treasury Bills, Due 8/20/98 10,000 9,848
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS (COST $10,845) 10,848
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES (COST $8,092,973) 98.1% 8,130,349
Other Assets and Liabilities, Net 1.9% 155,170
- ------------------------------------------------------------------------------
NET ASSETS 100.0% $8,285,519
==============================================================================
===============================================================================
STRONG INTERNATIONAL BOND FUND
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
CORPORATE BONDS 12.0%
CANADA 3.3%
Shaw Communications, Inc. Debentures, 8.54%,
Due 9/30/27 1,000,000 CAD $ 702,104
DENMARK 4.8%
Nykredit Bonds, 8.00%, Due 10/01/29 7,000,000 DKK 1,041,816
MEXICO 2.4%
Imexsa Export Trust Senior Structured Pass-Thru
Certificates, Series 1996-1, 10.125%, Due 5/31/03
(Acquired 5/22/96; Cost $500,000) (d) 500,000 USD 520,000
NEW ZEALAND 1.3%
International Bank for Reconstruction &
Development Senior Notes, Zero %, Due 8/20/07 1,000,000 NZD 284,238
UNITED STATES 0.2%
Bank of Boston Corporation Subordinated Floating
Rate Notes, 5.8125%, Due 2/28/01 50,000 USD 49,859
- ------------------------------------------------------------------------------
TOTAL CORPORATE BONDS (COST $2,545,414) 2,598,017
- ------------------------------------------------------------------------------
CONVERTIBLE BONDS 4.2%
HONG KONG
Guangdong Investment, Ltd., 3.25%, Due 4/07/03
(Acquired 3/25/98; Cost $1,000,000) (d) 1,000,000 USD 907,500
- ------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS (COST $1,000,000) 907,500
- ------------------------------------------------------------------------------
GOVERNMENT & AGENCY ISSUES 36.1%
ARGENTINA 6.9%
Republic of Argentina BOCON Previsional 4
Floating Rate Notes, 5.6875%, Due 9/01/02 750,000 USD 924,375
Republic of Argentina Bote 10 Floating Rate Notes,
5.6875%, Due 4/01/00 68,500 USD 78,549
Republic of Argentina Floating Rate Senior Notes,
8.726%, Due 4/10/05 500,000 USD 503,750
----------
1,506,674
AUSTRALIA 1.8%
Australian Government Bonds, 8.75%, Due 8/15/08 500,000 AUD 395,399
DENMARK 4.7%
Kingdom of Denmark Notes:
7.00%, Due 11/15/07 4,250,000 DKK 701,060
9.00%, Due 11/15/00 2,000,000 DKK 321,761
----------
1,022,821
FINLAND 3.0%
Government of Finland Bonds, 10.00%,
Due 9/15/01 3,000,000 FIM 642,695
FRANCE 5.3%
Government of France Debentures, 8.50%,
Due 11/25/02 6,000,000 FRF 1,150,652
GERMANY 6.5%
Republic of Germany Debentures, Series 94,
7.50%, Due 11/11/04 2,200,000 DEM 1,400,279
GREECE 5.6%
Republic of Hellenic Bonds, 8.80%, Due 6/19/07 360,000,000 GRD 1,204,469
17
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
===============================================================================
STRONG INTERNATIONAL BOND FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
SOUTH KOREA 2.3%
Republic of Korea Notes, 8.875%, Due 4/15/08 500,000 USD $ 491,734
- ------------------------------------------------------------------------------
TOTAL GOVERNMENT & AGENCY ISSUES (COST $8,353,090) 7,814,723
- ------------------------------------------------------------------------------
NON-AGENCY MORTGAGE & ASSET-BACKED SECURITIES 17.0%
CS First Boston Mortgage Securities Corporation
Mortgage Pass-Thru Certificates, Series 1992-4,
Class A-5, Interest Only, 0.625%, Due 10/25/22 $22,541,615 232,404
Citicorp Mortgage Securities, Inc. Real Estate
Mortgage Investment Conduit Pass-Thru
Certificates, Series 1993-3, Class B1, 7.00%, Due
3/25/08 (Acquired 10/23/96; Cost $435,265) (d) 441,788 444,275
DLJ Mortgage Acceptance Corporation Variable
Rate Mortgage Pass-Thru Certificates:
Series 1990-2, Class A, 7.4985%, Due 1/25/22 357,775 364,931
Series 1991-3, Class A1, 7.3430%, Due 2/20/21 727,930 739,759
Merrill Lynch Home Equity Acceptance, Inc.
Subordinated Variable Rate Mortgage-Backed
Certificates, Series 1994-A, Class A-1, 6.75%,
Due 8/17/23 79,000 78,260
RTC Variable Rate Mortgage Pass-Thru
Securities, Inc.:
Series 1992-16, Class B-3, 10.5405%, Due 5/25/24 500,016 507,831
Series 1995-1, Class B-5, 6.8330%, Due 10/25/28 677,684 688,697
Ryland Mortgage Securities Corporation Variable
Rate Mortgage Participation Securites, Series
1991-1, 7.4004%, Due 3/25/20 603,701 612,756
- ------------------------------------------------------------------------------
TOTAL NON-AGENCY MORTGAGE & ASSET-BACKED SECURITIES
(COST $3,542,139) 3,668,913
- ------------------------------------------------------------------------------
PREFERRED STOCKS 2.8%
First International Funding Company 3.50%
(Acquired 9/10/96; Cost $601,358) (d) 6 598,500
- ------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS (COST $601,358) 598,500
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 23.9%
COMMERCIAL PAPER 1.3%
DISCOUNTED
INDONESIA
Polysindo EKA Perkasa PT, Due 3/18/98 (b) (e) 4,000,000,000 IDR 283,544
INTEREST BEARING, DUE UPON DEMAND 0.0%
UNITED STATES
United States Cayman Eurodollar Call Deposit,
4.50% $1,000 1,000
-----------
Total Commercial Paper 284,544
CORPORATE BONDS 7.1%
INDONESIA
Polysindo EKA Perkasa PT Notes, 19.00%, Due 4/26/99
(Linked to cross currency interest rate swap to
yield LIBOR + 3.90%) (b) (e) 5,000,000,000 IDR 1,544,481
GOVERNMENT & AGENCY ISSUES 15.5%
PHILIPPINES 4.8%
Philippine T-Bill Linked Hedged Promissory Notes,
Zero %, Due 8/14/98 (Acquired 8/07/97;
Cost $1,000,000) (d) 1,000,000 USD 1,036,250
RUSSIA 9.2%
U.S. Dollar Hedged GKO Pass-Thru Certificates,
Zero %, Due 6/24/98 1,000,000 USD 989,580
U.S. Dollar Hedged Ukranian T-Bills, Zero %,
Due 5/15/98 1,000,000 USD 993,100
-----------
1,982,680
UNITED STATES 1.5%
United States Treasury Bills, Due 8/20/98 (c) $330,000 324,994
-----------
Total Government & Agency Issues 3,343,924
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS (COST $6,719,557) 5,172,949
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES (COST $22,761,558) 96.0% 20,760,602
Other Assets and Liabilities, Net 4.0% 868,090
- ------------------------------------------------------------------------------
NET ASSETS 100.0% $21,628,692
==============================================================================
FUTURES
- -------------------------------------------------------------------------------
Underlying Unrealized
Expiration Face Amount Appreciation/
Date at Value (Depreciation)
- -------------------------------------------------------------------------------
Purchased:
13 Ten-Year French Government Bonds 6/98 $1,114,477 ($ 4,644)
9 Ten-Year German Government Bonds 6/98 1,338,716 (3,636)
24 Ten-Year Italian Government Bonds 6/98 3,209,494 8,398
5 Ten-Year Japanese Government Bonds 6/98 4,970,481 73,791
14 Ten-Year United Kingdom Government
Bonds 6/98 1,271,347 21,945
Sold:
5 Ten-Year Australian Government Bonds 6/98 (475,238) 6,156
3 Ten-Year U.S. Treasury Notes 6/98 (336,938) (1,477)
5 Thirty-Year U.S. Treasury Bonds 6/98 (601,094) 5,547
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
- ----------------------------------------------------------------------------
Settlement Value Unrealized
Date in USD Appreciation
- ----------------------------------------------------------------------------
Purchased:
1,152,000 CAD 8/12/98 $ 806,925 $ 11,894
19,502,000 DEM 5/11/98 10,870,880 66,988
2,321,200,000 ITL 8/12/98 1,312,889 19,619
925,500,000 JPY 5/11/98 6,977,007 (744,566)
Sold:
(1,080,000) AUD 8/12/98 (702,559) 40,481
(943,632) CAD 6/17/98 (660,224) 12,607
(3,700,000) DKK 5/11/98 (540,680) 27,851
(7,100,000) DKK 10/05/98 (1,044,639) (30,788)
(6,750,000) FRF 5/11/98 (1,122,213) 57,857
(640,000) GBP 10/23/98 (1,061,299) 1,581
(399,000,000) GRD 5/26/98 (1,264,539) 12,670
(4,000,000,000) IDR 5/18/98 (496,709) 17,099
(5,000,000,000) IDR 4/26/99 (2,059,308) 0
(120,050,000) JPY 5/11/98 (905,013) 94,987
18
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
STRONG SHORT-TERM GLOBAL BOND FUND
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
CORPORATE BONDS 13.2%
BRAZIL 5.0%
Banco de Boston SA Floating Rate Eurodollar
Notes, 9.4425%, Due 1/16/02 3,690,000 USD $ 3,736,125
Sharp Do Brasil SA Notes, 9.625%, Due 10/30/05
(Acquired 10/20/97; Cost $998,080) (d) 1,000,000 USD 957,500
-----------
4,693,625
DENMARK 2.2%
Nykredit Bonds, 8.00%, Due 10/01/29 14,000,000 DKK 2,083,632
JAPAN 1.3%
SB Treasury Company LLC, 9.40%, Due 12/29/49
(Acquired 2/06/98; Cost $1,200,000) (d) 1,200,000 USD 1,220,375
MEXICO 0.6%
Imexsa Export Trust Senior Structured Pass-Thru
Certificates, Series 1996-1, 10.125%, Due 5/31/03
(Acquired 5/22/96; Cost $500,000) (d) 500,000 USD 520,000
NEW ZEALAND 0.3%
International Bank for Reconstruction &
Development Senior Notes, Zero %,
Due 8/20/07 1,000,000 NZD 284,238
SOUTH KOREA 1.0%
Export-Import Bank Korea Notes, 7.10%,
Due 3/15/07 1,000,000 USD 937,162
UNITED STATES 2.8%
Atlas Air, Inc. Notes, Series 1998-1, Class C, 8.01%,
Due 1/02/10 (Acquired 1/26/98;
Cost $1,000,000) (d) $1,000,000 1,001,600
Atlas Air, Inc. Senior Notes, 10.75%, Due 8/01/05 1,000,000 1,080,000
Bank of Boston Corporation Subordinated
Floating Rate Notes, 5.8125%, Due 2/28/01 100,000 99,717
Viacom International, Inc. Notes, 8.75%,
Due 5/15/01 (Rate Reset Effective 5/15/98) 450,000 457,952
-----------
2,639,269
- ------------------------------------------------------------------------------
TOTAL CORPORATE BONDS (COST $12,435,836) 12,378,300
- ------------------------------------------------------------------------------
CONVERTIBLE BONDS 3.0%
HONG KONG 0.7%
Guangdong Investment, Ltd., 3.25%, Due 4/07/03
(Acquired 3/23/98; Cost $750,000) (d) 750,000 USD 680,625
RUSSIA 1.5%
Lukinter Finance BV, 1.00%, Due 11/03/03 1,600,000 USD 1,360,000
UNITED STATES 0.8%
Bell Atlantic Financial Services, Inc. Senior Notes,
5.75%, Due 4/01/03 (Acquired 2/12/98;
Cost $700,000) (d) $700,000 729,750
- ------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS (COST $2,818,000) 2,770,375
- ------------------------------------------------------------------------------
GOVERNMENT & AGENCY ISSUES 40.0%
ARGENTINA 8.4%
Republic of Argentina BOCON Previsional 4
Floating Rate Notes, 5.6875%, Due 9/01/02 4,500,000 USD 5,546,250
Republic of Argentina Bonds, 8.75%,
Due 5/09/02 1,000,000 USD 980,500
Republic of Argentina Bote 10 Floating Rate
Notes, 5.6875%, Due 4/01/00 342,500 USD 392,745
Republic of Argentina Floating Rate Senior Notes,
8.726%, Due 4/10/05 1,000,000 USD 1,007,500
-----------
7,926,995
AUSTRALIA 1.7%
Australian Government Bonds, 8.75%,
Due 8/15/08 1,970,000 AUD 1,557,873
BRAZIL 2.2%
Republic of Brazil IDU Variable Rate Debentures,
Series A, 6.875%, Due 1/01/01 2,100,000 USD 2,042,697
CANADA 2.1%
Government of Canada Notes, 6.125%,
Due 7/15/02 2,000,000 CAD 2,019,180
DENMARK 0.5%
Kingdom of Denmark Notes, 9.00%, Due 11/15/00 3,000,000 DKK 482,641
FRANCE 1.2%
Government of France Debentures:
7.00%, Due 10/12/00 2,900,000 FRF 511,240
8.50%, Due 11/25/02 3,000,000 FRF 575,326
-----------
1,086,566
GERMANY 1.0%
Republic of Germany Debentures, Series 90,
8.875%, Due 12/20/00 1,500,000 DEM 926,825
ITALY 0.7%
Government of Italy Debentures, 12.00%,
Due 1/01/02 1,000,000,000 ITL 696,501
NEW ZEALAND 2.3%
Government of New Zealand Notes, 6.50%,
Due 2/15/00 4,000,000 NZD 2,166,614
PANAMA 1.5%
Republic of Panama Floating Rate Notes,
6.8438%, Due 5/14/02 1,384,635 USD 1,364,731
RUSSIA 1.0%
Russian Federation Notes, 9.25%, Due 11/27/01
(Acquired 12/05/97; Cost $985,000) (d) 1,000,000 USD 978,800
SOUTH KOREA 1.0%
Republic of Korea Notes, 8.875%, Due 4/15/08 1,000,000 USD 983,468
SWEDEN 2.2%
Statens Bostadsfinansier Bonds, 9.00%,
Due 6/15/01 14,500,000 SEK 2,066,964
UNITED STATES 14.2%
FHLMC Participation Certificates:
7.969%, Due 7/01/10 $ 620,422 635,741
9.00%, Due 8/01/18 1,305,558 1,396,973
10.00%, Due 6/01/05 949,160 997,168
FNMA Guaranteed Real Estate Mortgage
Investment Conduit Adjustable Rate Mortgage
Certificates:
Pool #372179, 11.00%, Due 4/01/12 521,995 585,287
Pool #365418, 7.398%, Due 1/01/23 620,872 635,452
19
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
===============================================================================
STRONG SHORT-TERM GLOBAL BOND FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
FNMA Guaranteed Real Estate Mortgage Investment
Conduit Adjustable Rate Mortgage Securities,
Pool #103102, 6.207%, Due 3/01/18 $3,457,297 $ 3,497,022
FNMA Guaranteed Real Estate Mortgage Investment
Conduit Pass-Thru Certificates, 10.50%,
Due 8/01/20 446,574 494,768
FNMA Guaranteed Real Estate Mortgage Investment
Conduit Variable Rate Pass-Thru Certificates,
Pool #313629, 8.50%, Due 11/01/02 2,981,182 3,078,070
United States Treasury Notes, 5.625%, Due 11/30/99 2,000,000 2,000,626
-----------
13,321,107
- ------------------------------------------------------------------------------
TOTAL GOVERNMENT & AGENCY ISSUES (COST $38,088,384) 37,620,962
- ------------------------------------------------------------------------------
NON-AGENCY MORTGAGE & ASSET-BACKED SECURITIES 27.6%
Citicorp Mortgage Securities, Inc. Real Estate
Mortgage Investment Conduit Pass-Thru
Certificates, Series 1993-3, Class B1, 7.00%, Due
3/25/08 (Acquired 10/23/96; Cost $870,529) (d) 883,576 888,550
Collateralized Mortgage Obligation Trust Certificates,
Series 14, Class Z, 8.00%, Due 1/01/17 2,654,168 2,681,182
DLJ Acceptance Trust Collateralized Mortgage
Obligation Certificates, Series 1989-1, Class F,
11.00%, Due 8/01/19 3,104,419 3,494,847
DLJ Mortgage Acceptance Corporation Variable
Rate Mortgage Pass-Thru Certificates:
Series 1990-2, Class A, 7.4985%, Due 1/25/22 1,431,100 1,459,722
Series 1991-3, Class A1, 7.343%, Due 2/20/21 1,455,860 1,479,518
Series 1992-Q4, Class A2, 7.4196%, Due 7/25/22 1,759,215 1,780,637
Kmart CMBS Financing, Inc. Floating Rate
Commercial Mortgage Pass-Thru Certificates,
Series 1997-1, Class D, 6.7875%, Due 3/01/07
(Acquired 2/21/97; Cost $2,000,000) (d) 2,000,000 2,001,880
Merrill Lynch Home Equity Acceptance, Inc.
Subordinated Variable Rate Mortgage-Backed
Certificates, Series 1994-A, Class A1, 6.75%,
Due 8/17/23 52,667 52,173
NPF IX, Inc. 1997-1A Healthcare Receivables Notes,
Class A, 6.339%, Due 7/01/00 (Acquired 7/24/97;
Cost $1,999,976) (d) 2,000,000 2,006,260
RTC Mortgage Pass-Thru Securities, Inc. Mortgage
Pass-Thru Certificates, Series 1992-18P, Class B-5,
7.50%, Due 1/25/21 (Acquired 9/10/97;
Cost $2,007,500) (d) 2,000,000 2,005,000
RTC Variable Rate Mortgage Pass-Thru
Securities, Inc.:
Series 1992-6, Class B-9, 6.61%, Due 11/25/26 570,815 570,815
Series 1992-15, Class B-7, 7.0175%, Due 7/25/27 1,743,000 1,746,277
Series 1992-16, Class A-4, 7.6327%, Due 8/25/22 21,428 21,550
Series 1992-16, Class B-3, 10.5405%, Due 5/25/24 1,500,048 1,523,494
Series 1995-1, Class B-5, 6.833%, Due 10/25/28 327,706 333,032
Ryland Mortgage Securities Corporation Senior
Mortgage Partnership Variable Rate Securities:
Series 1990-C1, Class A, 6.3835%, Due 10/25/20 823,630 825,944
Series 1991-B1, Class 1, 7.4004%, Due 3/25/20 758,938 770,322
Series 1992-3, Class A-2, 7.4751%, Due 6/25/20 793,172 792,181
Ryland Mortgage Securities Corporation Senior
Mortgage Partnership Variable Rate Securities,
1989-P1, Class A, Perpetual Savings Bank,
7.6994%, Due 2/25/19 494,134 493,210
Structured Asset Securities Corporation Variable
Rate Multiclass Pass-Thru Certificates, Series
1996-C1, Class D, 6.6563%, Due 6/25/00
(Acquired 9/27/96; Cost $20,679) (d) 20,787 20,777
Western Federal Savings and Loan Association Real
Estate Mortgage Investment Conduit Pass-Thru
Certificates, Series 1989-5, Class A, 6.6824%,
Due 7/25/19 995,562 993,103
- ------------------------------------------------------------------------------
TOTAL NON-AGENCY MORTGAGE & ASSET-BACKED SECURITIES
(COST $25,750,780) 25,940,474
- ------------------------------------------------------------------------------
PREFERRED STOCKS 1.5%
First International Funding 3.50% (Acquired
9/10/96; Cost $1,403,168) (d) 14 1,396,500
- ------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS (COST $1,403,168) 1,396,500
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 13.7%
COMMERCIAL PAPER 0.5%
DISCOUNTED
INDONESIA
Polysindo EKA Perkasa PT, Due 3/18/98 (b) (e) 7,000,000,000 IDR 496,203
INTEREST BEARING, DUE UPON DEMAND 0.0%
United States Cayman Eurodollar Call Deposit,
4.50% $29,000 29,000
-----------
Total Commercial Paper 525,203
CORPORATE BONDS 3.3%
INDONESIA
Polysindo EKA Perkasa PT Notes, 19.00%, Due
4/26/99 (Linked to cross currency interest
rate swap to yield LIBOR + 3.90%) (b) (e) 10,000,000,000 IDR 3,088,962
GOVERNMENT & AGENCY ISSUES 5.7%
ARGENTINA 2.1%
Government of Spain T-Bills 2,000,000 USD 1,996,900
RUSSIA 3.4%
U.S. Dollar Hedged GKO Pass-Thru Certificates,
Zero %, Due 6/24/98 1,000,000 USD 989,580
U.S. Dollar Hedged Ukranian T-Bills, Zero %,
Due 5/15/98 2,253,433 USD 2,237,884
-----------
3,227,464
UNITED STATES 0.2%
United States Treasury Bills, Due 8/20/98 (c) $ 190,000 187,118
-----------
Total Government & Agency Issues 5,411,482
TIME DEPOSITS 4.2%
UNITED STATES
Deutsche Bank, 5.5625%, Due 5/01/98 3,900,000 3,900,000
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS (COST $16,264,883) 12,925,647
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES (COST $96,761,051) 99.0% 93,032,258
Other Assets & Liabilities, Net 1.0% 914,488
- ------------------------------------------------------------------------------
NET ASSETS 100.0% $93,946,746
==============================================================================
20
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
STRONG SHORT-TERM GLOBAL BOND FUND (CONTINUED)
===============================================================================
- -------------------------------------------------------------------------------
FUTURES
- -------------------------------------------------------------------------------
Underlying Unrealized
Expiration Face Amount Appreciation/
Date at Value (Depreciation)
- -------------------------------------------------------------------------------
Purchased:
5 Ten-Year French Government Bonds 6/98 $ 428,645 ($ 1,787)
17 Ten-Year German Government Bonds 6/98 2,528,685 (6,868)
24 Ten-Year Italian Government Bonds 6/98 3,209,494 8,398
4 Ten-Year United Kingdom Government
Bonds 6/98 363,242 6,270
Sold:
9 Ten-Year Australian Government Bonds 6/98 (855,429) (9,230)
8 Five-Year U.S. Treasury Bonds 6/98 (871,125) 7,000
21 Ten-Year U.S. Treasury Notes 6/98 (2,358,563) (10,336)
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
- ----------------------------------------------------------------------------
Settlement Value Unrealized
Date in USD Appreciation
- ----------------------------------------------------------------------------
Purchased:
3,960,000 AUD 8/13/98 $2,576,112 ($ 93,324)
Sold:
(6,335,000) AUD 8/13/98 (4,121,129) 107,167
(1,442,000) DEM 5/11/98 (803,805) 41,546
(3,300,000) DKK 5/11/98 (482,228) 24,840
(14,250,000) DKK 10/05/98 (2,096,635) (61,793)
(6,500,000) FRF 8/12/98 (1,086,410) (10,963)
(850,000) GBP 5/11/98 (1,420,010) 4,641
(7,000,000,000) IDR 5/18/98 (869,241) 29,924
(10,000,000,000) IDR 4/26/99 (4,118,616) 0
(4,430,000) NZD 8/12/98 (2,429,077) 113,300
(16,350,000) SEK 5/11/98 (2,110,622) 69,378
CURRENCY ABBREVIATIONS
- ----------------------------------------------------------------------------
AUD Australian Dollar
CAD Canadian Dollar
DEM German Mark
DKK Danish Krona
FIM Finnish Mark
FRF French Franc
GBP British Pound
GRD Greek Drachma
IDR Indonesian Rupiah
ITL Italian Lira
JPY Japanese Yen
NZD New Zealand Dollar
SEK Swedish Krona
USD United States Dollar
LEGEND
- ----------------------------------------------------------------------------
(a) Short-term investments include any security which has a maturity of less
than one year.
(b) Non-income producing security.
(c) All or a portion of security pledged to cover margin requirements for
futures contracts.
(d) Restricted security.
(e) Security is in default.
(f) Affiliated issuer. (See Note 6 of notes to financial statements.)
Percentages are stated as a percent of net assets.
See notes to financial statements.
21
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
- -------------------------------------------------------------------------------
April 30, 1998 (Unaudited) (In Thousands, Except Per Share Amounts)
STRONG ASIA STRONG INTERNATIONAL
PACIFIC FUND STOCK FUND
------------ --------------------
ASSETS:
Investments in Securities, at Value
Unaffiliated Issuers (Cost of
$29,004 and $132,029, respectively) $24,203 $134,148
Affiliated Issuers (Cost of $0 and
$635, respectively) -- 635
Receivable from Brokers for Securities
and Forward Foreign Currency Contracts
Sold 194 2,566
Receivable for Fund Shares Sold 129 --
Dividends and Interest Receivable 44 454
Other Assets 1,644 2,265
------- --------
Total Assets 26,214 140,068
LIABILITIES:
Payable to Brokers for Securities and Forward
Foreign Currency Contracts Purchased 252 913
Payable for Fund Shares Redeemed 1 --
Accrued Operating Expenses and Other
Liabilities 80 256
------- --------
Total Liabilities 333 1,169
------- --------
NET ASSETS $25,881 $138,899
======= ========
NET ASSETS CONSIST OF:
Capital Stock (par value and paid-in
capital) $43,649 $169,563
Accumulated Net Investment Loss (104) (827)
Accumulated Net Realized Loss (12,662) (31,927)
Net Unrealized Appreciation (Depreciation)(5,002) 2,090
------- --------
Net Assets $25,881 $138,899
======= ========
Capital Shares Outstanding (Unlimited
Number Authorized) 4,004 11,776
NET ASSET VALUE PER SHARE $6.46 $11.79
===== ======
<TABLE>
<CAPTION>
STRONG GLOBAL
HIGH-YIELD STRONG INTERNATIONAL STRONG SHORT-TERM
BOND FUND BOND FUND GLOBAL BOND FUND
------------- -------------------- -----------------
ASSETS:
<S> <C> <C> <C>
Investments in Securities, at Value
(Cost of $8,093, $22,762, and
$96,761, respectively) $8,130 $20,761 $93,032
Receivable from Brokers for
Securities and Forward Foreign
Currency Contracts Sold 154 208 718
Receivable for Fund Shares Sold -- 88 --
Interest Receivable 96 606 1,730
Other Assets -- 816 37
------ ------- -------
Total Assets 8,380 22,479 95,517
LIABILITIES:
Payable to Brokers for Securities and
Forward Foreign Currency Contracts
Purchased -- 573 --
Payable for Fund Shares Redeemed -- 5 594
Dividends Payable 39 -- 504
Accrued Operating Expenses and Other
Liabilities 55 272 472
------ ------- -------
Total Liabilities 94 850 1,570
------ ------- -------
NET ASSETS $8,286 $21,629 $93,947
====== ======= =======
NET ASSETS CONSIST OF:
Capital Stock (par value and paid-in
capital) $8,176 $23,221 $96,020
Undistributed Net Investment Income
(Loss) -- (128) 829
Undistributed Net Realized Gain 82 842 813
Net Unrealized Appreciation
(Depreciation) 28 (2,306) (3,715)
------ ------- -------
Net Assets $8,286 $21,629 $93,947
====== ======= =======
Capital Shares Outstanding (Unlimited
Number Authorized) 810 2,063 9,023
NET ASSET VALUE PER SHARE $10.23 $10.48 $10.41
====== ====== ======
</TABLE>
22
See notes to financial statements.
<PAGE>
STATEMENTS OF OPERATIONS
- -------------------------------------------------------------------------------
For the Six Months Ended April 30, 1998 (Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
STRONG
STRONG STRONG GLOBAL STRONG SHORT-TERM
STRONG ASIA INTERNATIONAL HIGH-YIELD INTERNATIONAL GLOBAL
PACIFIC FUND STOCK FUND BOND FUND BOND FUND BOND FUND
------------ ------------- ------------- ------------- ----------
INCOME:
<S> <C> <C> <C> <C> <C>
Interest $ 149 $ 171 $154 $ 948 $3,681
Dividends (net of withholding
taxes of $18, $93, $0, $0,
and $0 respectively) 233 1,211 -- 27 57
------ ------- ---- ------ ------
Total Income 382 1,382 154 975 3,738
EXPENSES:
Investment Advisory Fees 131 740 11 82 307
Custodian Fees 114 266 8 28 42
Shareholder Servicing Costs 74 292 3 29 95
Federal and State Registration
Fees 17 18 8 9 20
Reports to Shareholders 25 80 -- 6 12
Other 12 21 2 13 20
------ ------- ---- ------ ------
Total Expenses before Waivers
and Absorptions 373 1,417 32 167 496
Voluntary Expense Waivers and
Absorptions by Advisor (117) -- (1) (23) (83)
------ ------- ---- ------ ------
Expenses, Net 256 1,417 31 144 413
------ ------- ---- ------ ------
NET INVESTMENT INCOME (LOSS) 126 (35) 123 831 3,325
REALIZED AND UNREALIZED GAIN (LOSS):
Net Realized Gain (Loss) on:
Investments (9,895) (33,397) 80 (1,974) (4,027)
Futures Contracts, Options
and Forward Foreign
Currency Contracts 251 989 1 2,838 5,217
Foreign Currencies (7) (17) -- (31) (18)
------ ------- ---- ------ ------
Net Realized Gain (Loss) (9,651) (32,425) 81 833 1,172
Change in Unrealized Appreciation/
Depreciation on:
Investments 6,772 35,321 28 10 532
Futures Contracts, Options and
Forward Foreign Currency
Contracts (218) (362) -- (2,454) (1,826)
Foreign Currencies (72) (145) -- 25 (4)
------ ------- ---- ------ ------
Net Change in Unrealized
Appreciation/Depreciation 6,482 34,814 28 (2,419) (1,298)
------ ------- ---- ------ ------
NET GAIN (LOSS) (3,169) 2,389 109 (1,586) (126)
------ ------- ---- ------ ------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS ($3,043) $ 2,354 $232 ($ 755) $3,199
====== ======= ==== ====== ======
23
See notes to financial statements.
</TABLE>
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
(In Thousands)
<TABLE>
STRONG ASIA STRONG INTERNATIONAL
PACIFIC FUND STOCK FUND
------------------------------ -----------------------------
<CAPTION>
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCT. 31, 1997 APRIL 30, 1998 OCT. 31,1997
---------------- ------------- ---------------- ------------
(UNAUDITED) (UNAUDITED)
OPERATIONS:
<S> <C> <C> <C> <C>
Net Investment Income (Loss) $ 126 $ 38 ($ 35) $ 1,534
Net Realized Gain (Loss) (9,651) (2,518) (32,425) 10,333
Net Change in Unrealized Appreciation/
Depreciation 6,482 (5,548) 34,814 (16,088)
------- -------- -------- --------
Net Increase (Decrease) in Net Assets
Resulting from Operations (3,043) (8,028) 2,354 (4,221)
DISTRIBUTIONS:
From Net Investment Income (351) (39) (2,979) (1,534)
In Excess of Net Investment Income -- (181) -- (3,812)
From Net Realized Gains -- (749) (3,501) (17,009)
In Excess of Net Realized Gains -- (117) -- --
------- -------- -------- --------
Total Distributions (351) (1,086) (6,480) (22,355)
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 27,752 70,733 49,443 189,644
Proceeds from Reinvestment of Dividends 335 1,050 6,316 21,807
Payment for Shares Redeemed (28,898) (104,622) (92,840) (308,666)
Decrease in Net Assets from Capital
Share Transactions (811) (32,839) (37,081) (97,215)
------- -------- -------- --------
TOTAL DECREASE IN NET ASSETS (4,205) (41,953) (41,207) (123,791)
NET ASSETS:
Beginning of Period 30,086 72,039 180,106 303,897
------- -------- -------- --------
End of Period $25,881 $ 30,086 $138,899 $180,106
======= ======== ======== ========
TRANSACTIONS IN SHARES OF THE FUND:
Sold 4,198 7,557 4,374 13,682
Issued in Reinvestment of Distributions 50 110 584 1,630
Redeemed (4,335) (11,147) (8,202) (22,390)
----- ------ ----- ------
Decrease in Shares of the Fund (87) (3,480) (3,244) (7,078)
===== ====== ===== ======
24
See notes to financial statements.
</TABLE>
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- -------------------------------------------------------------------------------
<TABLE>
(In Thousands)
STRONG GLOBAL
HIGH-YIELD STRONG INTERNATIONAL STRONG SHORT-TERM
BOND FUND BOND FUND GLOBAL BOND FUND
------------- ------------------------------- ------------------------------
<CAPTION>
PERIOD ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1998 APRIL 30, 1998 OCT. 31, 1997 APRIL 30, 1998 OCT. 31,1997
-------------- ---------------- ------------- ---------------- ------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
(NOTE 1)
OPERATIONS:
<S> <C> <C> <C> <C> <C>
Net Investment Income $ 123 $ 831 $ 2,545 $ 3,325 $ 6,786
Net Realized Gain (Loss) 81 833 (2,016) 1,172 2,142
Net Change in Unrealized Appreciation/Depreciation 28 (2,419) (882) (1,298) (3,551)
------ ------- ------- -------- --------
Net Increase (Decrease) in Net Assets Resulting from
Operations 232 (755) (353) 3,199 5,377
DISTRIBUTIONS:
From Net Investment Income (123) (1,187) (585) (3,156) (7,236)
In Excess of Net Investment Income -- -- -- -- (1,002)
From Net Realized Gains -- (579) -- (778) --
In Excess of Net Realized Gains -- -- (42) -- --
------ ------- ------- -------- --------
Total Distributions (123) (1,766) (627) (3,934) (8,238)
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 9,111 4,077 25,686 32,256 147,712
Proceeds from Reinvestment of Dividends 75 1,626 589 3,910 6,904
Payment for Shares Redeemed (1,009) (9,757) (28,190) (57,208) (106,904)
------ ------- ------- -------- --------
Increase (Decrease) in Net Assets from Capital Share
Transactions 8,177 (4,054) (1,915) (21,042) 47,712
------ ------- ------- -------- --------
TOTAL INCREASE (DECREASE) IN NET ASSETS 8,286 (6,575) (2,895) (21,777) 44,851
NET ASSETS:
Beginning of Period -- 28,204 31,099 115,724 70,873
------ ------- ------- -------- --------
End of Period $8,286 $21,629 $28,204 $ 93,947 $115,724
====== ======= ======= ======== ========
TRANSACTIONS IN SHARES OF THE FUND:
Sold 902 4,077 2,239 3,089 13,724
Issued in Reinvestment of Distributions 7 1,626 50 375 647
Redeemed (99) (9,757) (2,472) (5,482) (9,933)
--- ----- ----- ----- -----
Increase (Decrease) in Shares of the Fund 810 (4,054) (183) (2,018) 4,438
=== ===== ===== ===== =====
25
See notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
April 30, 1998 (Unaudited)
1. ORGANIZATION
The accompanying financial statements represent the Strong International
Funds, which include the following diversified and non-diversified open-end
management investment companies registered under the Investment Company Act
of 1940:
Strong Asia Pacific Fund, Inc.*
Strong International Stock Fund, Inc. *
Strong Global High Yield Bond Fund (a series of Strong International
Income Funds, Inc.)**
Strong International Bond Fund (a series of Strong International Income
Funds, Inc.)**
Strong Short-Term Global Bond Fund, Inc.**
**Diversified
**Non-Diversified
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 of the latest bid and asked prices when 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
April 30, 1998 were as follows:
<TABLE>
<CAPTION>
AGGREGATE AGGREGATE PERCENT OF
COST FAIR VALUE NET ASSETS LIQUID*
---------- ---------- ---------- -------
<S> <C> <C> <C> <C>
Strong Asia Pacific Fund $ 1,092,833 $ 1,010,560 3.9% 83.0%
Strong International Stock Fund 8,578,779 6,684,100 4.8% 18.2%
Strong Global High-Yield Bond Fund 2,128,188 2,137,012 25.8% 100.0%
Strong International Bond Fund 3,536,623 3,506,525 16.2% 44.6%
Strong Short-Term Global Bond Fund 14,434,932 14,407,617 15.3% 90.3%
*Percentage is eligible for resale pursuant to Rule 144A under the Securities Act
of 1933 and also has been determined to be liquid by the Advisor based upon
guidelines established by the Funds' Board of Directors.
</TABLE>
(B) Federal Income and Excise Taxes and Distributions to Shareholders -- It
is the Funds' policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to
distribute substantially all of their taxable income to their
shareholders in a manner which results in no tax cost to the Funds.
Therefore, no Federal income or excise tax provision is required.
The character of distributions made during the year from net investment
income or net realized gains may differ from the characterization for
federal income tax purposes due to differences in the recognition of
income and expense items for financial statement and tax purposes.
Where appropriate, reclassifications between net asset accounts are made
for such differences that are permanent in nature.
(C) Realized Gains and Losses on Investment Transactions -- Gains or losses
realized on investment transactions are determined by comparing the
identified cost of the security lot sold with the net sales proceeds.
(D) Futures -- Upon entering into a futures contract, the Funds pledge to
the broker cash or other investments equal to the minimum "initial
margin" requirements of the exchange. The Funds also receive from or
pay to the broker an amount of cash equal to the daily fluctuation in
the value of the contract. Such receipts or payments are known as
"variation margin," and are recorded as unrealized gains or losses.
When the futures contract is closed, a realized gain or loss is recorded
equal to the difference between the value of the contract at the time it
was opened and the value at the time it was closed.
26
<PAGE>
- -------------------------------------------------------------------------------
(E) Options -- The Funds may write put or call options (none were written
during the period). 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.
(G) Forward Foreign Currency Exchange Contracts -- Forward foreign currency
exchange contracts are valued at the forward rate and are marked-to-
market daily. The change in market value is recorded as an unrealized
gain or loss. When the contract is closed, the Funds record an exchange
gain or loss equal to the difference between the value of the contract
at the time it was opened and the value at the time it was closed.
(H) Additional Investment Risks -- The Funds may utilize derivative
instruments including options, futures and other instruments with
similar characteristics to the extent that they are consistent with the
Fund's investment objectives and limitations. The Funds intend to use
such derivative instruments primarily to hedge or protect from adverse
movements in securities prices or interest rates. The use of these
instruments may involve risks such as the possibility of illiquid
markets or imperfect correlation between the value of the instruments
and the underlying securities, or that the counterparty will fail to
perform its obligations.
Foreign denominated assets and forward currency contracts may involve
greater risks than domestic transactions, including currency, political
and economic, regulatory and market risks.
(I) Use of Estimates -- The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements, and the
reported amounts of increases and decreases in net assets from
operations during the reporting period. Actual results could differ
from those estimates.
(J) Other -- Investment security transactions are recorded as of the trade
date. Dividend income and distributions to shareholders are recorded on
the ex-dividend date. Interest income is recorded on the accrual basis
and includes amortization of premiums and discounts.
3. RELATED PARTY TRANSACTIONS
Strong Capital Management, Inc. (the "Advisor"), with whom certain officers
and directors of the Funds are affiliated, provides investment advisory
services and shareholder recordkeeping and related services to the Funds.
Investment advisory fees, which are established by terms of the Advisory
Agreements, are based on the following annualized rates of the average daily
net assets: Strong Asia Pacific Fund and Strong International Stock Fund
1.00%, Strong Global High-Yield Bond Fund and Strong International Bond Fund
0.70%, and Strong Short-Term Global Bond Fund 0.625%. Advisory fees are
subject to reimbursement by the Advisor if a Fund's 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.
The Funds may invest cash reserves in money market funds sponsored and
managed by the Advisor, subject to certain limitations. The terms of such
transactions are identical to those of non-related entities except that, to
avoid duplicate investment advisory fees, advisory fees of each Fund
invested in such money market funds are reduced by an amount equal to
advisory fees paid to the Advisor under its investment advisory agreements
with the money market funds.
27
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------------------------------
April 30, 1998 (Unaudited)
Certain information regarding related party transactions for the six months
ended April 30, 1998 is as follows:
<TABLE>
<CAPTION>
PAYABLE TO OTHER SHAREHOLDER
(RECEIVABLE FROM) SERVICING UNAFFILIATED
ADVISOR AT EXPENSES PAID DIRECTORS'
APRIL 30, 1998 TO ADVISOR FEES
----------------- ----------------- ------------
<S> <C> <C> <C>
Strong Asia Pacific Fund ($ 5,703) $1,265 $ 750
Strong International Stock Fund 13,699 3,927 1,943
Strong Global High-Yield Bond Fund 4,371 16 --
Strong International Bond Fund 46,603 685 750
Strong Short-Term Global Bond Fund 43,450 1,408 750
</TABLE>
4. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of long-term securities for the six months
ended April 30, 1998 were as follows:
<TABLE>
PURCHASES SALES
---------------------------- ----------------------------
<CAPTION>
U.S. GOVERNMENT U.S. GOVERNMENT
AND AGENCY OTHER AND AGENCY OTHER
--------------- ------------ --------------- ------------
<S> <C> <C> <C> <C>
Strong Asia Pacific Fund -- $ 20,418,392 $2,541,768 $ 19,214,893
Strong International Stock Fund -- 125,407,277 -- 157,142,642
Strong Global High-Yield Bond Fund -- 16,682,013 -- 8,718,619
Strong International Bond Fund -- 14,889,173 -- 15,550,694
Strong Short-Term Global Bond Fund -- 60,538,005 2,541,768 71,975,079
</TABLE>
5. INCOME TAX INFORMATION
The investment cost, gross unrealized appreciation and depreciation on
investments and capital loss carryovers for federal income tax purposes are
as follows:
<TABLE>
AT APRIL 30, 1998 AT OCTOBER 30, 1997
-------------------------------------------------------- -------------------
<CAPTION>
NET
FEDERAL TAX UNREALIZED UNREALIZED APPRECIATION/ NET CAPITAL LOSS
COST APPRECIATION DEPRECIATION (DEPRECIATION) CARRYOVERS
------------ ------------ ------------ -------------- ----------------
<S> <C> <C> <C> <C> <C>
Strong Asia Pacific Fund $ 29,004,086 $ 1,334,312 ($ 6,135,155) ($4,800,843) $3,279,010
Strong International Stock Fund 132,856,359 17,001,509 (15,074,694) 1,926,815 --
Strong Global High-Yield Bond Fund 8,093,054 73,678 (36,382) 37,296 --
Strong International Bond Fund 22,761,558 511,837 (2,512,794) (2,000,957) --
Strong Short-Term Global Bond Fund 96,761,051 1,082,849 (4,811,642) (3,728,793) --
</TABLE>
Capital loss carryovers expire in varying amounts through 2005.
6. INVESTMENTS IN AFFILIATES
Affiliated issuers, as defined under the Investment Company Act of 1940,
include those in which the Fund's holdings of an issuer represent 5% or more
of the outstanding voting securities of the issuer, and any other Strong
Fund. A summary of transactions in the securities of these issuers during
the period ended April 30, 1998 is as follows:
<TABLE>
<CAPTION>
BALANCE OF BALANCE OF
SHARES HELD GROSS GROSS SALES SHARES HELD DIVIDEND INCOME
NOVEMBER 1, PURCHASES AND APRIL 30, VALUE NOV. 1, 1997-
1997 AND ADDITIONS REDUCTIONS 1998 APRIL 30, 1998 APRIL 30, 1998
----------- ------------- ----------- ----------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Strong International Stock Fund
-------------------------------
Connemara Green Marble 50,800 -- -- 50,800 $635,000 --
</TABLE>
28
<PAGE>
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
<TABLE>
STRONG ASIA PACIFIC FUND
- ------------------------------------------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA (a)
-------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
------------------------------------ --------------------------------------------------------
<CAPTION>
Net Realized
Net Asset and Unrealized Total In Excess In Excess Net Asset
Value, Net Gains from From Net of Net From Net of Net Value,
Beginning Investment (Losses) on Investment Investment Investment Realized Realized Total End of
of Period Income Investments Operations Income Income Gains Gains Distributions Period
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
April 30, 1998 (c) $ 7.35 $0.03 ($0.83) ($0.80) ($0.09) -- -- -- ($0.09) $6.46
Oct. 31, 1997 9.51 0.01 (2.01) (2.00) (0.01) ($0.03) ($0.10) ($0.02) (0.16) 7.35
Oct. 31, 1996 9.55 0.06 0.31 0.37 (0.06) (0.35) -- -- (0.41) 9.51
Oct. 31, 1995 (d) 9.35 0.04 0.20 0.24 (0.03) (0.01) -- -- (0.04) 9.55
Dec. 31, 1994 10.00 0.05 (0.57) (0.52) (0.01) -- -- (0.12) (0.13) 9.35
</TABLE>
<TABLE>
RATIOS AND SUPPLEMENTAL DATA
--------------------------------------------------------------------
<CAPTION>
Net Ratio of Net
Assets, Ratio of Investment Average
End of Expenses Income Portfolio Commission
Total Period (In to Average to Average Turnover Rate
Return Millions) Net Assets Net Assets Rate Paid (b)
<S> <C> <C> <C> <C> <C> <C>
April 30, 1998 (c) -10.9% $26 1.9%* 1.0%* 92.1% $0.0051
Oct. 31, 1997 -21.5% 30 2.0% 0.1% 96.7% 0.0073
Oct. 31, 1996 +3.8% 72 2.3% 0.2% 91.4% 0.0104
Oct. 31, 1995 (d) +2.6% 55 2.0%* 0.5%* 104.3%
Dec. 31, 1994 -5.3% 58 2.0% 0.6% 103.3%
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund outstanding for the entire period.
(b) Disclosure required, effective for reporting periods beginning after September 1, 1995.
(c) For the six months ended April 30, 1998 (Unaudited). Total return and portfolio turnover rate are not annualized.
(d) In 1995, the fund changed its fiscal year end from December to October. Total return and portfolio turnover rate are not
annualized.
</TABLE>
<TABLE>
STRONG INTERNATIONAL STOCK FUND
- ------------------------------------------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA (a)
-----------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
------------------------------------ ---------------------------------------------------------
<CAPTION>
Net Realized
Net Asset and Unrealized Total In Excess In Excess Net Asset
Value, Net Gains from From Net of Net From Net of Net Value,
Beginning Investment (Losses) on Investment Investment Investment Realized Realized Total End of
of Period Income Investments Operations Income Income Gains Gains Distributions Period
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
April 30, 1998 (c) $11.99 $0.01 $0.28 $0.29 ($0.23) -- ($0.26) -- ($0.49) $11.79
Oct. 31, 1997 13.75 0.01 (0.69) (0.68) (0.01) ($0.26) (0.81) -- (1.08) 11.99
Oct. 31, 1996 13.03 0.17 1.11 1.28 (0.18) (0.38) -- -- (0.56) 13.75
Oct. 31, 1995 (d) 12.65 0.08 0.37 0.45 (0.07) -- -- -- (0.07) 13.03
Dec. 31, 1994 14.18 0.06 (0.27) (0.21) (0.01) -- (1.25) ($0.06) (1.32) 12.65
Dec. 31, 1993 9.77 -- 4.66 4.66 -- (0.02) (0.23) -- (0.25) 14.18
Dec. 31, 1992 (e) 10.00 0.05 (0.23) (0.18) (0.05) -- -- -- (0.05) 9.77
</TABLE>
<TABLE>
RATIOS AND SUPPLEMENTAL DATA
--------------------------------------------------------------------
<CAPTION>
Net Ratio of Net
Assets, Ratio of Investment Average
End of Expenses Income Portfolio Commission
Total Period (In to Average to Average Turnover Rate
Return Millions) Net Assets Net Assets Rate Paid (b)
<S> <C> <C> <C> <C> <C> <C>
April 30, 1998 (c) +2.8% $139 1.9%* 0.0%* 88.2% $0.0006
Oct. 31, 1997 -5.7% 180 1.6% 0.5% 143.7% 0.0023
Oct. 31, 1996 +9.8% 304 1.7% 0.6% 108.6% 0.0166
Oct. 31, 1995 (d) +3.6% 211 1.8%* 0.8%* 102.0%
Dec. 31, 1994 -1.6% 258 1.7% 0.3% 136.5%
Dec. 31, 1993 +47.8% 128 1.9% (0.3%) 139.9%
Dec. 31, 1992 (e) -1.8% 13 2.0%* 0.8%* 20.8%
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund outstanding for the entire period.
(b) Disclosure required, effective for reporting periods beginning after September 1, 1995.
(c) For the six months ended April 30, 1998 (Unaudited). Total return and portfolio turnover rate are not annualized.
(d) In 1995, the fund changed its fiscal year end from December to October. Total return and portfolio turnover rate are not
annualized.
(e) Inception date is March 4, 1992. Total return and portfolio turnover rate are not annualized.
</TABLE>
<TABLE>
STRONG GLOBAL HIGH-YIELD BOND FUND
- -----------------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA (a)
---------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
-------------------------------------- -------------------------
<CAPTION>
Net Asset Net Realized Total Net Asset
Value, Net and Unrealized from From Net Value,
Beginning Investment Gains on Investment Investment Total End of
of Period Income Investments Operations Income Distributions Period
<S> <C> <C> <C> <C> <C> <C> <C>
April 30, 1998 (b) $10.00 $0.21 $0.23 $0.44 ($0.21) ($0.21) $10.23
</TABLE>
<TABLE>
RATIOS AND SUPPLEMENTAL DATA
--------------------------------------------------------------------------
<CAPTION>
Net Ratio of Expenses Ratio of Net
Assets, Ratio of to Average Net Investment
End of Expenses Assets Without Income Portfolio
Total Period (In to Average Waivers and to Average Turnover
Return Millions) Net Assets Absorptions Net Assets Rate
<S> <C> <C> <C> <C> <C> <C>
April 30, 1998 (b) +4.4% $8 2.0%* 2.0%* 7.8%* 141.1%
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund outstanding for the entire period.
(b) For the period from January 31, 1998 (inception) to April 30, 1998 (Unaudited). Total return and
portfolio turnover rate are not annualized.
29
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- -------------------------------------------------------------------------------
<TABLE>
STRONG INTERNATIONAL BOND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA (a)
-------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
------------------------------------ --------------------------------------------------------
<CAPTION>
Net Realized
Net Asset and Unrealized Total In Excess In Excess Net Asset
Value, Net Gains from From Net of Net From Net of Net Value,
Beginning Investment (Losses) on Investment Investment Investment Realized Realized Total End of
of Period Income Investments Operations Income Income Gains Gains Distribution Period
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
April 30, 1998 (b) $11.58 $0.38 ($0.69) ($0.31) ($0.53) -- ($0.26) -- ($0.79) $10.48
Oct. 31, 1997 11.87 1.03 (1.11) (0.08) (0.20) -- -- ($0.01) (0.21) 11.58
Oct. 31, 1996 11.48 0.80 0.15 0.95 (0.50) -- (0.06) -- (0.56) 11.87
Oct. 31, 1995 (c) 10.36 0.78 1.00 1.78 (0.66) -- -- -- (0.66) 11.48
Dec. 31, 1994 (d) 10.00 0.46 0.40 0.86 (0.46) ($0.02) -- (0.02) (0.50) 10.36
</TABLE>
<TABLE>
RATIOS AND SUPPLEMENTAL DATA
--------------------------------------------------------------------------
<CAPTION>
Net Ratio of Expenses Ratio of Net
Assets, Ratio of to Average Net Investment
End of Expenses Assets Without Income Portfolio
Total Period (In to Average Waivers and to Average Turnover
Return Millions) Net Assets Absorptions Net Assets Rate
<S> <C> <C> <C> <C> <C> <C>
April 30, 1998 (b) -2.8% $22 1.2%* 1.4% 6.9%* 89.2%
Oct. 31, 1997 -0.7% 28 0.7% 1.5% 8.1% 208.4%
Oct. 31, 1996 +8.6% 31 0.0% 1.8% 7.4% 258.3%
Oct. 31, 1995 (c) +17.3% 21 0.0%* 2.0%* 8.3%* 473.3%
Dec. 31, 1994 (d) +8.7% 10 0.0%* 2.0%* 7.9%* 679.3%
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund outstanding for the entire period.
(b) For the six months ended April 30, 1998 (Unaudited). Total return and portfolio turnover rate are not annualized.
(c) In 1995, the fund changed its fiscal year end from December to October. Total return and portfolio turnover rate are not
annualized.
(d) Inception date is March 31, 1994. Total return and portfolio turnover rate are not annualized.
</TABLE>
<TABLE>
STRONG SHORT-TERM GLOBAL BOND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA (a)
-------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
-------------------------------------- ---------------------------------------------------------
<CAPTION>
Net Realized
Net Asset and Unrealized Total In Excess In Excess Net Asset
Value, Net Gains from From Net of Net From Net of Net Value,
Beginning Investment (Losses) on Investment Investment Investment Realized Realized Total End of
of Period Income Investments Operations Income Income Gains Gains Distributions Period
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
April 30, 1998 (b) $10.48 $0.35 ($0.02) $0.33 ($0.32) -- ($0.08) -- ($0.40) $10.41
Oct. 31, 1997 10.74 0.81 (0.10) 0.71 (0.85) ($0.12) -- -- (0.97) 10.48
Oct. 31, 1996 10.46 0.71 0.34 1.05 (0.77) -- -- -- (0.77) 10.74
Oct. 31, 1995 (c) 10.15 0.65 0.20 0.85 (0.54) -- -- -- (0.54) 10.46
Dec. 31, 1994 (d) 10.00 0.35 0.16 0.51 (0.35) -- -- ($0.01) (0.36) 10.15
</TABLE>
<TABLE>
RATIOS AND SUPPLEMENTAL DATA
--------------------------------------------------------------------------
<CAPTION>
Net Ratio of Expenses Ratio of Net
Assets, Ratio of to Average Net Investment
End of Expenses Assets Without Income Portfolio
Total Period (In to Average Waivers and to Average Turnover
Return Millions) Net Assets Absorptions Net Assets Rate
<S> <C> <C> <C> <C> <C> <C>
April 30, 1998 (b) +3.2% $ 94 0.8%* 1.0% 6.6%* 70.6%
Oct. 31, 1997 +6.8% 116 0.7% 1.0% 7.6% 168.0%
Oct. 31, 1996 +10.4% 71 0.0% 1.5% 7.4% 179.7%
Oct. 31, 1995 (c) +8.5% 25 0.0%* 2.0%* 8.2%* 437.3%
Dec. 31, 1994 (d) +5.1% 20 0.0%* 1.7%* 7.7%* 287.8%
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund outstanding for the entire period.
(b) For the six months ended April 30, 1998 (Unaudited). Total return and portfolio turnover rate are not annualized.
(c) In 1995, the fund changed its fiscal year end from December to October. Total return and portfolio turnover rate are not
annualized.
(d) Inception date is March 31, 1994. Total return and portfolio turnover rate are not annualized.
</TABLE>
30
<PAGE>
NOTES
- -------------------------------------------------------------------------------
31
<PAGE>
NOTES
- -------------------------------------------------------------------------------
32
<PAGE>
DIRECTORS
Richard S. Strong
Willie D. Davis
Stanley Kritzik
Marvin E. Nevins
William F. Vogt
OFFICERS
Richard S. Strong, Chairman of the Board
Mary F. Hoppa, Vice President
Thomas P. Lemke, Vice President
John S. Weitzer, Vice President
Stephen J. Shenkenberg, Vice President and Secretary
John A. Flanagan, Treasurer
INVESTMENT ADVISOR
Strong Capital Management, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
DISTRIBUTOR
Strong Funds Distributors, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
CUSTODIAN
Brown Brothers Harriman & Company
40 Water Street, Boston, Massachusetts 02109
TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT
Strong Capital Management, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
AUDITOR
Coopers & Lybrand L.L.P.
411 East Wisconsin Avenue, Milwaukee, Wisconsin 53202
LEGAL COUNSEL
Godfrey & Kahn, S.C.
780 North Water Street, Milwaukee, Wisconsin 53202
<PAGE>
For a prospectus containing more complete information, including management
fees and expenses, please call 1-800-368-1030. Please read it carefully before
investing or sending money. This report does not constitute an offer for the
sale of securities. Strong Funds are offered for sale by prospectus only.
[PICTURE OF TELEPHONE]
To order a free prospectus kit,
CALL 1-800-368-1030
To learn more about our funds,
discuss an existing account,
or conduct a transaction,
CALL 1-800-368-3863
-------------------
If you are a
Financial Professional,
CALL 1-800-368-1683
[PICTURE OF STRONG WEB SITE ON COMPUTER]
Strong On-line
www.strong-funds.com
[STRONG LOGO]
STRONG FUNDS
P.O. Box 2936 o Milwaukee, Wisconsin 53201
Strong Funds Distributors, Inc. 7768E98 98SINT
