<PAGE>
THE STRONG [STRONG LOGO]
INTERNATIONAL FUNDS
- -------------------
SEMI-ANNUAL REPORT O APRIL 30, 1999
[PICTURE OF STRONG FUNDS BUILDING]
THE STRONG ASIA PACIFIC FUND
THE STRONG FOREIGN MAJORMARKETS(SM) FUND
THE STRONG INTERNATIONAL STOCK FUND
THE STRONG OVERSEAS FUND
THE STRONG GLOBAL HIGH-YIELD BOND FUND
THE STRONG INTERNATIONAL BOND FUND
THE STRONG SHORT-TERM GLOBAL BOND FUND
<PAGE> LETTER FROM THE CHAIRMAN
Dear Strong Investor,
The other day, in the space of less than 24 hours, you could have heard that:
o The bull-market run for big Blue Chip stocks is over.
o The bull-market run for big-company stocks could last another five years.
o Small cap stocks will outperform big-company stocks for the next 10
years.
o Small-caps will lag large caps for the foreseeable future.
o Inflation is coming back with a vengeance.
o There's no real sign of inflation on the horizon.
o Rates will rise for the rest of the year.
o The Fed has no plans to touch rates for the rest of 1999.
o Asia is on the mend.
o Asia is still in the tank.
Interestingly, all of those observations were all provided by well-respected
professionals in the investment community -- which goes to show that in the
world of investing, even smart people differ. Nobody has a corner on the market
for insight but practically everyone has an opinion. And there are more ways
than ever today to share your convictions. Technology has seen to that.
Nowadays, information travels faster than the speed of thought, which is both a
blessing and a curse. On the one hand, it's wonderful to have such resources
literally at the tip of your fingers. On the other hand, it's overwhelming to
have so much information, much of it conflicting, coming at you like a bullet
train.
The trick is to have a plan that will keep you on the right financial track.
Figure out where you're going, how much time you have to get there, and
calculate your tolerance for risk. Then set your financial goals and stick with
them. Don't get derailed by the whirl of information that technology offers.
Meanwhile, day trading is fast replacing baseball as the national pastime. If
you believe just a small percentage of what you read, anyone with a laptop and a
modem is practically guaranteed financial independence overnight. Don't believe
it. There is a mountain of research out there that demonstrates conclusively
that the success rate of investors day trading in the securities and commodities
markets is pretty low.
Money--relative to history--just isn't that easy to make, or keep.
Do you want to increase your chances for financial success? Set your goals.
Devise an intelligent plan that suits your profile. Then discipline yourself to
ignore all that informational clutter.
The realization of long term financial goals requires a lot of planning and even
more patience.
/s/Dick
<PAGE>
THE STRONG
INTERNATIONAL
FUNDS
-----
SEMI-ANNUAL REPORT O APRIL 30, 1999
TABLE OF CONTENTS
INVESTMENT REVIEWS
The Strong Asia Pacific Fund ..................................2
The Strong Foreign MajorMarkets (sm) Fund .....................4
The Strong International Stock Fund ...........................6
The Strong Overseas Fund ......................................8
The Strong Global High-Yield Bond Fund .......................10
The Strong International Bond Fund ...........................12
The Strong Short-Term Global Bond Fund .......................14
FINANCIAL INFORMATION
Schedules of Investments in Securities
The Strong Asia Pacific Fund ............................16
The Strong Foreign MajorMarkets(sm) Fund ................17
The Strong International Stock Fund .....................19
The Strong Overseas Fund ................................20
The Strong Global High-Yield Bond Fund ..................21
The Strong International Bond Fund ......................22
The Strong Short-Term Global Bond Fund ..................23
Statements of Assets and Liabilities .........................25
Statements of Operations .....................................26
Statements of Changes in Net Assets ..........................28
Notes to Financial Statements ................................30
FINANCIAL HIGHLIGHTS .............................................33
<PAGE>
============
THE STRONG ASIA PACIFIC FUND
-----------============-----
FUND
HIGHLIGHTS
o The Strong Asia Pacific Fund returned 44.20% for the six months ended April
30, 1999.
o After a tough couple of years for Asian markets, the past six months have
been a very exciting and rewarding period for the Fund. During this time,
Asia staged an important recovery, outperforming most other areas of the
world.
o The Fund managed to capitalize fully on this recovery, outperform-ing both
its benchmark index and the majority of its peers. We accomplished this by
staying almost fully invested and by overweighting such markets as
Singapore and Thailand, which produced excellent returns.
- -----------------------------------------------
AVERAGE ANNUAL
TOTAL RETURNS (1)
As of 4-30-99
1-year 21.21%
3-year -8.93%
5-year -2.74%
Since Inception -2.89%
(on 12-31-93)
- -----------------------------------------------
INVESTMENTS
BY COUNTRY
Based on net assets as of 4-30-99
COUNTRY % OF NET ASSETS
------------------------
Japan 26.3%
Singapore 14.2%
Australia 12.2%
Hong Kong 8.5%
Thailand 8.2%
Please see the Schedule of Investments in Securities for a complete listing
of the Fund's portfolio.
PERSPECTIVES
FROM THE MANAGER
/s/ Anthony Cragg
Anthony Cragg
Portfolio Manager
- --------------------------------------------------------------------------------
The strategy we mentioned in our last report, of investing as fully as possible
at a time when most other funds were still nervously holding on to their cash,
has clearly paid off. We tried to put this cash into investment bargains around
the region: companies that were fundamentally sound, but had been beaten down
during the Asian downturn to valuations that reflected their short-term
difficulties rather than their longer-term potential.
A few examples of investment opportunities we have taken advantage of are as
follows: in Japan, Internet conglomerate Softbank and cosmetic maker Shiseido;
in Korea, chemical company Hanwha and Kookmin Bank; in Indonesia, clove
cigarette maker Sampoerna; in Thailand, property developer Land & House; and in
Singapore, property companies City Developments and DBS Land, and banks such as
Oversea-Chinese Banking Corporation. We list these particular examples because
in every single case, their share prices have doubled--and in some cases even
tripled--since our purchasing them. Given such big and rapid price moves, it may
be tempting to think that it is already too late to invest in Asia.
While a temporary correction is, of course, always possible and we do sometimes
need to rotate out of market leaders that have gotten ahead of themselves and
move into market laggards that are poised to catch up, we believe Asia is still
a highly attractive investment target for a number of reasons.
---------------------------
ASIA'S
RE-EMERGENCE
AS A MAJOR INVESTMENT
AND ECONOMIC
FORCE IS STILL
IN ITS
EARLY STAGES.
----------------------------
- --------------------------------------------------------------------------------
1 Average annual total return and total return measure change in the value of an
investment in the Fund, assuming reinvestment of all dividends and capital
gains. Average annual total return reflects annualized change while total return
reflects aggregate change, and is not annualized.
2
<PAGE>
First, the economic recovery throughout the region is still in its early stages.
The growth that we used to associate with Asia has yet to return, but we believe
it will do so in due course. Second, Japan, the biggest trading partner and
investor in Asia, is finally, laboriously, getting back on track. We believe it
will stop dragging its Asian neighbors down and begin to push them up,
especially as the yen strengthens.
Finally, the participants in the rally so far have largely been local
investors-- specialized funds such as ours and a few hedge funds. The big
mainstream international funds, global funds, and even U.S. domestic funds have
yet to participate fully, and further huge waves of liquidity will enter the
market when they do. Asia's re-emergence as a major investment and economic
force is, therefore, still in its early stages. We may be at the end of the
beginning of this process, but we are certainly not at the beginning of the end.
There is, we believe, much more to go for in terms of investment returns over
the next few years.
[GRAPH]
GROWTH OF AN ASSUMED $10,000 INVESTMENT
From 12-31-93 to 4-30-99
The Strong Lipper Pacific
Asia Pacific Fund MSCI AP* Region Funds Index *
12-93 10,000 10,000 10,000
12-94 9,473 8772 9,475
12-95 10,035 9305 9,729
12-96 10,246 10,388 9,994
12-97 7,071 6,835 7,278
12-98 6,849 6,533 7,064
4-99 8,553 8,167 8,498
This graph, provided in accordance with SEC regulations, compares a
$10,000 investment in the Fund, made at its inception, with the performance of
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.
- --------------------------------------------------------------------------------
* 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 Standard & Poor's
Micropal. Source of the Lipper index data is Lipper Inc.
YOUR FUND'S
APPROACH
THE STRONG ASIA PACIFIC FUND INVESTS PRIMARILY IN THE STOCKS OF COMPANIES
LOCATED IN ASIA AND THE PACIFIC BASIN. THE AIM IS TO GIVE INVESTORS EXPOSURE TO
A DYNAMIC AND POTENTIALLY REWARDING REGION OF THE WORLD. WE FOCUS ON FINDING
HIGH-QUALITY COMPANIES WHOSE SHARES OFFER OUTSTANDING VALUE. LEVELS OF
INVESTMENT IN INDIVIDUAL COUNTRIES ARE RAISED AND LOWERED ACCORDING TO THE
PARTICULAR ECONOMIC OUTLOOK OF EACH ONE. THE FUND'S MANAGEMENT USES ITS
EXPERIENCE AND CONTACTS TO ASSEMBLE A PORTFOLIO SOMEWHAT BROADER AND BOLDER THAN
THAT OF A CONVENTIONAL FUND OR INDEX.
- --------------------------------------------------------------------------------
MARKET HIGHLIGHTS
o Over the six months ended April 30, 1999, Asian countries slowly but
steadily emerged from their long economic slump. Not every problem is
solved and real growth may yet remain muted, but currencies have
stabilized, property prices are recovering, the bad debt crisis is easing,
interest rates are down, financial systems are being sorted out, and
companies are restructuring. Perhaps most important, confidence from both
investors and consumers is returning.
o Not all countries are recovering at the same rate. Indonesia and Malaysia
still have serious political problems, while China has weathered the storm
surprisingly well and Singapore has been buoyed by its inherent high
quality.
o The modest but significant recovery in Japan has helped consolidate Asia's
recovery.
3
<PAGE>
======================
THE STRONG FOREIGN MAJORMARKETS(SM) FUND
-----------======================-----
FUND
HIGHLIGHTS
o For the six months ended April 30, 1999, the Fund returned 16.65%.
o The Fund's country allocation has been close to neutral relative to its
benchmark. The Fund has more of a value tilt than its benchmark, and also
has a smaller average market capitalization.
o Overall performance is slightly behind the Fund's benchmark. The Fund still
faces high trading costs because of its small asset base. The Fund's
holdings in Japan, France, and the Netherlands performed better than their
counterparts in the index, while the Fund's positions in the U.K. and
Germany underperformed because of higher weightings in cyclical industries.
- ------------------------------------
TOTAL RETURN (1)
As of 4-30-99
Since Inception 8.60%
(on 6-30-98)
- ------------------------------------
INVESTMENTS
BY COUNTRY
Based on net assets as of 4-30-99
COUNTRY % OF NET ASSETS
- ------------------------
Japan 19.8%
United Kingdom 17.0%
France 8.6%
Germany 6.9%
Switzerland 6.3%
Please see the Schedule of Investments in Securities for a complete listing of
the Fund's portfolio.
PERSPECTIVES
FROM THE MANAGER
/s/Shirish Malekar
Shirish Malekar
Portfolio Manager
- --------------------------------------------------------------------------------
Global economies, stock markets, and interest rates went through a roller
coaster ride in 1998. The Asian and the Japanese economies may have already been
through the worst, and we believe that from here on they should be recovering.
In Japan, the central bank has cut interest rates to almost zero percent in an
effort to revive that country's stagnant economy. The Japanese stock market
should be helped further by the nation's new coalition government, which brings
with it beneficial fiscal policies as well as programs to restructure Japan's
financial and banking systems. Relative to other markets and to its own
historical levels, the Japanese market is still inexpensive.
The neighboring Asian economies of Hong Kong and Singapore should also benefit
from Japan's improvements. Further, we anticipate that the Pacific economies of
Australia and New Zealand will continue to grow at a moderate pace.
Europeancentral bankers cut interest rates to boost that region's economies.
Further help for European markets is likely to come from corporate
restructurings and cross-border mergers and acquisitions. Despite these positive
forces, European equities may underperform others as economies in that region
slow down further.
------------------------------
GLOBAL ECONOMIES,
STOCK MARKETS,
AND
INTEREST RATES
WENT THROUGH
A ROLLER COASTER
RIDE IN 1998.
------------------------------
- --------------------------------------------------------------------------------
1 Total return is not annualized and measures aggregate change in the value of
an investment in the Fund, assuming reinvestment of dividends.
4
<PAGE>
In recent months, the stock markets of Europe have favored large-capitalization
and growth-oriented stocks. However, we manage this Fund with a stock-selection
process that favors mid-size companies and value-oriented stocks. Some of the
underperformance of the Fund, particularly in the U.K. and Germany, has been due
to this bias.
To address this situation, we will reassess the stock selection methodology.
Although our portfolio strategy will continue to focus on value-oriented stocks
with decent growth rates, we will expand our growth parameters to include
revenue, earnings, margins, and return on equity. Other aspects of our
investment criteria won't change. The portfolio will continue to be fully
invested in stocks of companies in major foreign markets, keeping our country
allocation within 20% of their weighting in our benchmark index. Currently, the
Fund's country allocation remains close to neutral versus the benchmark.
Thank you for your investment in the Strong Foreign MajorMarkets(SM) Fund. We
appreciate the confidence you've shown in us so far.
[GRAPH]
GROWTH OF AN ASSUMED $10,000 INVESTMENT
From 6-30-98 to 4-30-99
The Foreign MSCI EAFE Lipper International
MajorMarkets(SM) Fund Funds Index*
6-98 10,000 10,000 10,000
9-98 8,470 8,579 8,422
12-98 9,980 10,351 9,728
3-99 9,900 10,495 9,853
4-99 10,860 10,920 10,312
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with the performance of the
Morgan Stanley Capital International Europe, Australasia, and Far East Index
("MSCI EAFE") 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.
- --------------------------------------------------------------------------------
* The MSCI EAFE is an unmanaged index generally representative of major overseas
stock markets. MSCI EAFE data is U.S. 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 Inc.
YOUR FUNDS APPROACH
THE STRONG FOREIGN MAJORMARKETS(SM) FUND PURSUES CAPITAL GROWTH BY INVESTING
PRIMARILY IN STOCKS FROM COMPANIES IN ESTABLISHED FOREIGN MARKETS. STOCKS ARE
SELECTED FROM EACH COUNTRY IN ITS BENCHMARK INDEX (THE MSCI EUROPE, AUSTRALASIA,
AND FAR EAST (EAFE) INDEX). THE FUND'S INVESTMENT PROCESS SCREENS FOR STOCKS
WITH BETTER FUNDAMENTAL CHARACTERISTICS THAN ARE TYPICAL FOR OTHER COMPANIES IN
THEIR COUNTRY. MANAGEMENT ALSO LOOKS FOR STOCKS THAT ARE CHEAPER THAN THE NORM
IN THEIR MARKET. ASSETS WILL BE ALLOCATED TO EACH COUNTRY WITH AN EYE TOWARDS
THE WEIGHTING IN THE EAFE INDEX.
- --------------------------------------------------------------------------------
MARKET HIGHLIGHTS
o The MSCI EAFE Index returned 15.28% for the six months ended April 30,
1999.*
o European stock markets recovered from the sharp selloff that hit them from
August through October 1998. Some European markets, namely, Finland,
France, Italy, and the U.K., have returned to the highs seen in July 1998.
Most others, however, such as Denmark, Germany, Spain, and Switzerland,
have only partially recovered. Japan and other Asia/ Pacific stock markets
have been on a slow recovery path.
o The strength of the U.S. dollar versus foreign currencies subtracted about
5% from the Fund's performance in Japan and about 10% from its European
investments' returns.
5
<PAGE>
===================
THE STRONG INTERNATIONAL STOCK FUND
-----------===================-----
FUND HIGHLIGHTS
o The Fund returned 16.88% for the six months ended April 30, 1999.
o The Fund's overweighting in Europe helped the Fund in January, when
emerging markets swooned. Although underweighted in emerging markets when
they bounced back in February and March, the Fund continued to outperform
thanks to solid stock selection in Europe. In the last two weeks of April,
however, the shift in market favor to cyclicals and away from technology
and telecommunication stocks hurt our performance.
o Despite short-term market trends, the Fund stayed fully invested in stocks,
in keeping with our long-term perspective.
--------------------
AVERAGE ANNUAL
TOTAL RETURNS(1)
As of 4-30-99
1-year -10.69%
3-year -6.92%
5-year -0.77%
Since Inception 4.89%
(on 3-4-92)
--------------------
INVESTMENTS
BY COUNTRY
Based on net assets as of 4-30-99
COUNTRY % OF NET ASSETS
----------------------------------
United Kingdom 27.5%
France 11.2%
Japan 10.6%
Italy 7.3%
Netherlands 6.4%
Please see the Schedule of Investments in Securities for a complete listing of
the Fund's portfolio.
PERSPECTIVES
FROM THE MANAGER
/s/David Lui
David Lui
Portfolio Manager
- --------------------------------------------------------------------------------
The biggest question facing an international fund manager is, Which region will
provide the highest return from now to the end of 1999? We will give our views
by region as follows:
Despite the gloom and doom over economic growth in Europe, we believe that the
positive effects of a weak Euro will finally come through in the second half of
1999--in general, a weak currency has a lagging but positive effect on an
economy. Also, sizeable interest-rate cuts in December and March have yet to
have their impact on European growth. Counterbalancing these positive factors
are the war in Kosovo, and bureaucracies that hamper the merger and acquisition
process.
How sustainable is the rally in Asia? The prognosis in Japan is getting
better. The spate of corporate restructurings announced in March excited
investors, but the question remains as to whether they constitute mere lip
service or are solid promises. The willingness of Japanese banks to write off
bad debts should also bode well for the Japanese economy, as the banks will
thereafter be able to extend new credits. We also believe that a weak yen will
power the export sector in Japan in the second half of 1999. Finally, if the
rumors of a July election turn out to be true, Japan's stock market could zoom
through the roof.
---------------------------
WHAT REMAINS
TO BE SEEN IS
WHETHER WE ARE
ON THE CUSP
OF A GLOBAL SLOWDOWN,
OR IF WE'RE ENTERING
A NEW PHASE IN
GLOBAL EXPANSION.
---------------------------
- --------------------------------------------------------------------------------
1 Average annual total return and total return measure change in the value of an
investment in the Fund, assuming reinvestment of all dividends and capital
gains. Average annual total return reflects annualized change while total return
reflects aggregate change, and is not annualized.
6
<PAGE>
Hong Kong basked in the glory of declining interest rates in February and March.
Prospects for lower rates are good and will be thwarted only by a rate hike in
the U.S. Stable real estate prices after a 50% correction will be helpful to an
economy that depends to a great extent on real estate and banking. On the other
hand, the overhang of government-owned shares that amount to 15% of the total
market cannot be ignored. Valuation is also getting a bit stretched after the
recent rally. Both China and Korea still appear to have a long way to go to
improve their economies and their markets.
This is a critical time in global growth. What remains to be seen is whether we
are on the cusp of a global slowdown with the U.S. finally throwing in the
towel, or if instead we're entering a new phase in global expansion with Asia
rejoining the party. I can't be more challenged in having to choose between
these diametrically opposite scenarios. What I can assure you of is an exciting
ride into the new millennium. I thank you for your investment in the Fund, and
hope you'll be on that ride with us.
GROWTH OF AN ASSUMED $10,000 INVESTMENT
From 3-4-92 to 4-30-99
[GRAPH] The Strong
International Stock MSCI EAFE Lipper International
Fund 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 17,712
12-98 13,287 19,516 19,954
4-99 14,072 20,589 21,152
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with the performance of the
Morgan Stanley Capital International Europe, Australasia, and Far East Index
("MSCI EAFE") 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.
- --------------------------------------------------------------------------------
* The MSCI EAFE is an unmanaged index generally representative of major
overseas stock markets. MSCI EAFE data is U.S. 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 Inc.
YOUR FUND'S
APPROACH
THE STRONG INTERNATIONAL STOCK FUND SEARCHES OUTSIDE THE U.S. FOR STOCKS THAT
APPEAR TO HAVE STRONG GROWTH POTENTIAL RELATIVE TO THEIR RISK. OUR THREE-STEP
INVESTMENT PROCESS INVOLVES COUNTRY ALLOCATION, INTENSIVE RESEARCH, AND CURRENCY
MANAGEMENT. WE EXAMINE THE ECONOMIC OUTLOOK OF INDIVIDUAL COUNTRIES TO DECIDE
HOW MUCH OF THE FUND'S ASSETS--IF ANY--TO INVEST IN EACH ONE. THEN WE CHOOSE
INDIVIDUAL STOCKS BASED ON RIGOROUS ANALYSIS INCORPORATING INTERVIEWS WITH A
COMPANY'S LEADERSHIP.
- --------------------------------------------------------------------------------
MARKET HIGHLIGHTS
o The MSCI Europe, Australasia, and Far East Index, the Fund's bench-mark,
returned 15.28% for the six months ended April 30, 1999.*
o Western Europe led the international markets up until the end of January
1999. They have since been weighted down by the war in Kosovo.
o The Japanese market was revived by restructuring plans from such big blue
chip companies as Sony and Toshiba in March. The rest of Asia rallied
strongly in sympathy with Japan in March and April.
o The technology and telecommunication sectors were market darlings up until
the second week of April, when the market made a sharp shift into
cyclicals.
7
<PAGE>
------------------------
THE STRONG OVERSEAS FUND
----===============-----
FUND HIGHLIGHTS
o The Fund returned 39.27% for the six months ended April 30, 1999.
o The Fund was overweighted in Europe. We weighted Japan at half the market
level, and maintained a market weighting for the remainder of Asia
o The Fund's European position helped the Fund in January, when emerging
markets swooned under the devaluation of Brazil's currency.
o In the last two weeks of April, a shift in market favor from technology and
telecommunication stocks and toward cyclicals hurt the Fund's performance.
o The Fund stayed fully invested in stocks, in keeping with our long-term
perspective. We did not sell out of companies because of short-term
downturns.
--------------------------------
TOTAL RETURNS (1)
As of 4-30-99
Since Inception 14.20%
(on 6-30-98)\
--------------------------------
INVESTMENTS
BY COUNTRY
Based on net assets as of 4-30-99
COUNTRY % OF NET ASSETS
-------------------------------
United Kingdom 22.9%
Japan 13.6%
France 9.1%
Italy 7.4%
Finland 7.2%
Please see the Schedule of Investments in Securities for a complete listing of
the Fund's portfolio.
PERSPECTIVES
FROM THE MANAGER
/s/ David Lui
David Lui
Portfolio Manager
- --------------------------------------------------------------------------------
Currently, international fund managers are faced with determining which region
will provide the highest return from now to the end of 1999. Our assessment of
the world's major regions for investment is as follows:
Despite the gloom and doom over Europe, we believe that the positive effects of
a weak Euro will finally emerge in the second half of 1999. (In general, a weak
currency has a lagging but positive effect on an economy.) Also, sizeable
interest-rate cuts in December and March have yet to fully benefit European
growth. Of course, the war in Kosovo weighs heavily on the region. Another less
positive factor is that many countries in the region have bureaucracies that
hamper the merger and acquisition process.
For Asia, the question is whether its current rally is sustainable. Japan is
showing some signs of improvement. The rash of corporate restructurings
announced in March got a positive response from investors, but it remains to be
seen whether true change will follow. The willingness of Japanese banks to write
off bad debts should also bode well for the Japanese economy, as the banks will
thereafter be able to extend new credits. We also believe that a weak yen will
power the export sector in Japan in the second half of 1999. Finally, if an
election is held in July (as rumor currently has it), we believe Japan's stock
market will really take flight.
--------------------
JAPAN IS SHOWING
SOME SIGNS
OF IMPROVEMENT,
BUT IT
REMAINS TO BE
SEEN WHETHER
TRUE CHANGE
WILL FOLLOW.
--------------------
- --------------------------------------------------------------------------------
1 Total return is not annualized and measures aggregate change in the value
of an investment in the fund, assuming reinvestment of dividends.
8
<PAGE>
Hong Kong basked in the glory of declining interest rates in February and March.
Prospects for still-lower rates are good--we believe they could only be thwarted
by a rate hike in the U.S. Stable real estate prices after a 50% correction
would be helpful to an economy that greatly depends on real estate and banking.
On the other hand, the impact of having the government own shares that amount to
15% of the total market cannot be ignored. Stock valuations are also somewhat
extended after their recent rally. Both China and Korea still appear to have a
long way to go to improve their economies and their markets.
This is a critical time in global growth. What remains to be seen is whether we
are on the cusp of a global slowdown led by the U.S., or if instead we're
entering a new phase in global expansion with Asia rejoining the party. I can't
be more challenged in having to choose between these diametrically opposite
scenarios. What I can assure you of is an exciting ride into the new millennium.
I thank you for your investment, and hope you'll take that ride with us.
GROWTH OF AN ASSUMED $10,000 INVESTMENT
From 6-30-98 to 4-30-99
[GRAPH]
The Strong MSCI EAFE* Lipper International
Overseas Fund Funds Index*
6-98 10,000 10,000 10,000
8-98 9,290 8,850 8,693
10-98 8,200 9,473 9,042
12-98 10,460 10,351 9,728
2-99 11,080 10,075 9,535
4-99 11,420 10,920 10,312
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with the performance of the
Morgan Stanley Capital International Europe, Australasia, and Far East Index
("MSCI EAFE") 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.
- --------------------------------------------------------------------------------
* The MSCI EAFE is an unmanaged index generally representative of major overseas
stock markets. MSCI EAFE data is U.S. 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 Inc.
YOUR FUND'S APPROACH
THE STRONG OVERSEAS FUND SEARCHES OUTSIDE THE U.S. FOR STOCKS THAT APPEAR TO
HAVE STRONG GROWTH POTENTIAL RELATIVE TO THEIR RISK. OUR THREE-STEP INVESTMENT
PROCESS INVOLVES COUNTRY ALLOCATION, INTENSIVE RESEARCH, AND CURRENCY
MANAGEMENT. WE STUDY INDIVIDUAL COUNTRIES TO DECIDE WHETHER, AND HOW MUCH, TO
INVEST IN EACH. STOCKS ARE CHOSEN THROUGH RIGOROUS ANALYSIS THAT INCLUDES
INTERVIEWS WITH COMPANY LEADERS. AT TIMES, THE FUND MAY TAKE AGGRESSIVE
POSITIONS IN COMPANIES AND COUNTRIES.
- --------------------------------------------------------------------------------
MARKET HIGHLIGHTS
o The MSCI Europe, Australasia, and Far East Index, the Fund's benchmark,
returned 15.28% for the six months ended April 30, 1999.*
o Western Europe performed strongly through the end of January. They have
since been weighted down by the war in Kosovo. Also, a slow-down in Germany
in December alarmed some investors.
o In March, Japan's market was revived by restructuring plans announced by
such leading companies as Sony and Toshiba. Following suit, the rest of
Asia rallied strongly.
o Technology and telecommunication were among the most favored sectors until
the second week of April. At that point a shift in market favor toward
cyclicals triggered steep corrections.
9
<PAGE>
======================
THE STRONG GLOBAL HIGH-YIELD BOND FUND
-----------======================-----
FUND
HIGHLIGHTS
o The Fund returned 12.69% for the six months ended April 30, 1999.
o Over the six month period, we kept the Fund in a defensive posture.
Avoiding exposure to the Russian, Venezuelan, and Brazilian markets helped
the Fund's performance.
o Another boost to the Fund's performance was its significant allocation to
U.S. high-yield bonds.
- ---------------------------------
AVERAGE ANNUAL
TOTAL RETURN (1)
As of 4-30-99
1-year -0.67%
Since Inception 2.93%
(on 1-31-98)
- ---------------------------------
PORTFOLIO STATISTICS
As of 4-30-99
- ----------------------------------
- - 30-day annualized -
- - yield(2) 6.63% -
- ----------------------------------
Average
credit quality(3) BB
Average maturity(4) 7.4 years
- ---------------------------------
PERSPECTIVES
FROM THE MANAGERS
/s/ John T. Bender /s/ Shirish Malekar /s/ Jeffrey A. Koch
John T. Bender Shirish Malekar Jeffrey A. Koch
Portfolio Co-manager Portfolio Co-manager Portfolio Co-manager
- --------------------------------------------------------------------------------
After an unusually active period in the global bond markets, we believe that
interest rates will be less volatile and credit spreads--the difference between
the yields of U.S. Treasuries and those of corporate, emerging market, and
high-yield issues--will slowly narrow. The global economies that grew at their
lowest rate since the global recession of 1981 and 1982 should stabilize. We
expect that the U.S. economy will continue to be the locomotive of growth for
the rest of the world.
Japan and the rest of Asia seem to have stabilized, and the worst seems behind
these countries. The Brazilian devaluation will drag down growth in Latin
America. Major European economies have been slowing down recently, and could
weaken further if the Kosovo crisis drags on. Weak global growth and the
easy-to-neutral monetary bias of the world's major central banks should keep
interest rates in a stable, comfortable range. We anticipate that productive
capacity in the world will help to keep inflationary pressures subdued.
Continued strong economic growth in the U.S. has improved confidence in the
markets for emerging, corporate, and non-investment-grade debt.
------------------------
JAPAN
AND THE REST
OF ASIA
SEEM TO HAVE
STABILIZED, AND
THE WORST SEEMS
BEHIND THESE
COUNTRIES.
------------------------
- --------------------------------------------------------------------------------
1 Average annual total return and total return measure change in the value of
an investment in the Fund, assuming reinvestment of all dividends and
capital gains. Average annual total return reflects annualized change while
total return reflects aggregate change, and is not annualized.
2 Yields are historical and do not represent future yields, which will
fluctuate.
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.
10
<PAGE>
Slow recovery in Japan and Asia should provide additional support to global
credit markets. We expect good relative performance from high-yield bonds and
those from emerging markets--and we find that their valuations are still at
attractive levels.
To manage risk in the portfolio, we plan to de-emphasize such higher-risk
emerging countries as Peru, Ecuador, and Nigeria, instead favoring lower-risk
developing markets such as Mexico, Argentina, and Poland.
We thank you for investing in the Strong Global High Yield Bond Fund, and look
forward to helping you pursue your important financial goals by investing in
markets around the world.
GROWTH OF AN ASSUMED $10,000 INVESTMENT
From 1-31-98 to 4-30-99
[GRAPH]
<TABLE>
<CAPTION>
The Strong Global
Global High-Yield High-Yield Lipper Global JP Morgan Emerging
Bond Fund Bond Index * Income Funds Index * Markets Bond Index*
<S> <C> <C> <C> <C>
1-98 10,000 10,000 10,000 10,000
2-98 10,221 10,206 10,086 10,286
4-98 10,437 10,435 10,209 10,568
6-98 10,135 10,041 10,166 9,913
8-98 9,107 8,022 9,844 7,113
10-98 9,201 8,791 10,335 8,313
12-98 9,683 9,106 10,555 8,582
2-99 9,945 8,997 10,306 8,383
4-99 10,368 9,949 10,483 9,633
</TABLE>
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with the performance of the
Global High-Yield Bond Index, the Lipper Global Income Funds Index, and the JP
Morgan Emerging Markets Bond 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.
- --------------------------------------------------------------------------------
* 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 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. The J.P. Morgan Emerging Markets Bond Index + is an
unmanaged index generally representative of emerging market debt obligations.
Source of the Global High Yield Bond Index data is Bloomberg and Standard &
Poor's Micropal. Source of the Lipper index data is Lipper Inc.
YOUR FUND'S
APPROACH
THE STRONG GLOBAL HIGH-YIELD BOND FUND PURSUES A HIGH LEVEL OF CURRENT INCOME
AND CAPITAL APPRECIATION. THE FUND INVESTS PRIMARILY IN MEDIUM- AND
LOWER-QUALITY BONDS ISSUED BY U.S. AND FOREIGN COMPANIES. WE START OUR
INVESTMENT PROCESS WITH A BROAD, TOP-DOWN ANALYSIS OF WORLD MARKET AND FINANCIAL
CONDITIONS. THIS ANALYSIS LEADS US TO COUNTRIES AND COMPANIES WHOSE BONDS WE
BELIEVE OFFER THE POTENTIAL FOR HIGH INCOME AND CAPITAL APPRECIATION. IN
UNCERTAIN ECONOMIC TIMES, WE MAY AVOID EMERGING MARKETS AND MAY EVEN INVEST ONLY
IN U.S. HIGH-YIELD BONDS.
- --------------------------------------------------------------------------------
MARKET HIGHLIGHTS
o The Lehman Brothers High Yield Bond Index returned 8.25% for the six months
ended April 30, 1999. The Fund's benchmark, the Global High Yield Bond
Index, combines a 65% weighting in the J.P. Morgan Emerging Markets Bond
Index+ with a 35% weighting in the Lehman Brothers High Yield Bond Index.
That benchmark returned 13.17% for the same period.*
o Corporate bonds, high-yield debt, and emerging markets issues-also known as
spread products-have recovered after their sharp selloff in the second half
of 1998.
o Although Brazilian currency was devalued in January 1999, the economies and
financial markets in emerging countries have begun to stabilize.
11
<PAGE>
==================
THE STRONG INTERNATIONAL BOND FUND
-----------==================------
FUND HIGHLIGHTS
o The Fund returned -4.81% for the six months ended April 30, 1999.
o In the first three months of the fiscal year, the Fund benefited from its
longer than index exposure to major European countries such as Germany,
France, and the U.K. where interest rates dropped. In the past three
months, small positions in such countries as Greece, Mexico, and Argentina
helped performance.
o The Fund's negative return stems from the depreciation of foreign
currencies versus the U.S. dollar. Because the Fund is unhedged, it is
fully exposed to any foreign currency depreciation. For example, the German
mark declined by more than 11% over the six months, and the Japanese yen
fell in value by about 5%.
- ------------------------------
AVERAGE ANNUAL
TOTAL RETURNS (1)
As of 4-30-99
1-year 8.55%
3-year 3.79%
5-year 7.25%
Since Inception 7.59%
(on 3-31-94)
- ------------------------------
PORTFOLIO STATISTICS
As of 4-30-99
- ----------------------------------
- - 30-day -
- - annualized yield(2) 3.24% -
- ----------------------------------
Average
credit quality(3) AA
Average maturity(4) 7.5 years
PERSPECTIVES
FROM THE MANAGER
/s/Shirish Malekar
Shirish Malekar
Portfolio Manager
Central bankers seem to have avoided global financial crisis with their
aggressive easing of interest rates at the end of 1998. In the past three
months, the global flight to quality that followed the Russian crisis has slowly
unwound. As a result, long-term interest rates in most countries snapped back by
0.25% to 0.50%--except in Japan, where interest rates moved far lower. To revive
and reflate the economy, the Bank of Japan cut interest rates to almost zero
percent.
With much fanfare, the Euro was launched on January 1, 1999. So far, though, it
has failed to hold value versus the dollar as European economies have slowed
down relative to the U.S. Since its launch, the Euro has fallen almost 10%
versus the U.S. dollar. The Japanese yen has also weakened relative to the U.S.
dollar by about 5%. The negative returns posted by the Fund and by its benchmark
are the result of the depreciation of foreign currencies against the U.S.
dollar.
Despite Brazil's devaluation of its currency and the crisis in Kosovo, emerging
bond markets have stabilized over the past three months. The risk measure for
these bonds, the yield spread of the J.P. Morgan Emerging Market Bond Index over
U.S. Treasury bonds, has narrowed by about 2% to about 10.5%.
------------------------
COUNTRY EXPOSURE (5)
As of 4-30-99
Japan
25.5%
---
Germany
20.0%
---
Italy
18.4%
---
United Kingdom
9.5%
---
Denmark
8.3%
------------------------
- --------------------------------------------------------------------------------
1 Average annual total return and total return measure change in the value of
an investment in the Fund, assuming reinvestment of all dividends and
capital gains. Average annual total return reflects annualized change while
total return reflects aggregate change, and is not annualized.
2 Yields are historical and do not represent future yields, which will
fluctuate.
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.
12
<PAGE>
This spread had been as high as about 15% right after the Brazilian devaluation
on January 13.
We believe that the worst string of global financial crises since the Great
Depression is behind us. This year, we think that global economic growth will be
higher than in 1998, but still at a moderate pace. Excess production capacity
around the world will likely help keep interest rates low in major developed
countries. Europe and the U.S. should grow in 1999, but at a much slower pace
than we've seen recently.
In these conditions, we will maintain the Fund's duration at or longer than the
benchmark's. Emerging countries have stabilized and will be on a slow path to
recovery. If China and Hong Kong can hold their currencies stable, we may have
seen the worst the emerging countries have to offer. We believe that there is
value in short duration emerging market debt.
Thank you for your investment in the Strong International Bond Fund. We look
forward to helping you pursue your important financial goals.
GROWTH OF AN ASSUMED $10,000 INVESTMENT
From 3-31-94 to 4-30-99
[GRAPH] The Strong Salomon Brothers Lipper
International Non-U.S World Government International
Bond Fund Bond Index (Currency Unhedged)* Income 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 12,784
12-97 13,297 12,387 12,991
12-98 15,330 14,590 14,725
4-99 14,503 13,864 14,344
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with the performance of 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.
- --------------------------------------------------------------------------------
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 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
Inc.
YOUR FUND'S
APPROACH
THE STRONG INTERNATIONAL BOND FUND INVESTS FOR HIGH TOTAL RETURN BY FOCUSING ON
INVESTMENT GRADE BONDS ISSUED IN FOREIGN COUNTRIES. THE FUND'S INVESTMENT
PROCESS BEGINS WITH A BROAD ANALYSIS OF GLOBAL FINANCIAL CONDITIONS. WE STRIVE
TO IDENTIFY COUNTRIES WHOSE BONDS MAY OFFER THE POTENTIAL FOR CAPITAL GAINS, OR
A HIGHER LEVEL OF INCOME THAN IS TYPICAL. THE FUND IS NONDIVERSIFIED, AND SO MAY
CONCENTRATE MORE OF ITS ASSETS IN A SINGLE BOND THAN WOULD A DIVERSIFIED FUND.
BECAUSE THE FUND'S INVESTMENTS ARE NOT HEDGED AGAINST CHANGES IN CURRENCY
VALUES, THE FUND FACES THE RISK--AND POTENTIAL BENEFIT--OF THE U.S. DOLLAR'S
FLUCTUATIONS RELATIVE TO OTHER MAJOR CURRENCIES.
- --------------------------------------------------------------------------------
MARKET HIGHLIGHTS
o The Fund's benchmark, the Salomon Brothers Non-U.S. World Government Bond
Index (Currency Unhedged), returned -4.30% for the six months ended April
30, 1999.*
o Interest rates in Europe and the U.S. were in a downward trend until
January, but have reversed course since then as fears of global economic
collapse have dissipated. Aggressive easing of interest rates by major
central banks seems to have comforted the global financial markets.
o Some normalcy has returned to the markets for mortgage-backed bonds,
corporate issues, high-yield securities and emerging debt, thanks to
central banks' easing.
13
<PAGE>
======================
THE STRONG SHORT-TERM GLOBAL BOND FUND
-----------======================-----
FUND HIGHLIGHTS
o The Fund returned 4.15% for the six months ended April 30, 1999. The Fund
outperformed its benchmark, the Salomon Brothers 1-3 Year World Government
Bond Index (Currency Hedged), by 1.66% for the same period.
o From November through January, the Fund benefited from its longer than
index exposure to major European countries such as Germany, France, and the
U.K., where interest rates dropped. Since then, small exposure to countries
such as Greece, Mexico and Argentina contributed to the Fund's
outperformance.
o Although the U.S. dollar reversed its downtrend versus major currencies,
the Fund was not affected because most of its foreign currency risk is
hedged.
- ----------------------------------------
AVERAGE ANNUAL
TOTAL RETURNS(1)
As of 4-30-99
1-year 4.74%
3-year 6.67%
5-year 7.56%
Since Inception 7.64%
(on 3-31-94)
- ----------------------------------------
PORTFOLIO STATISTICS
As of 4-30-99
- -----------------------------------------
- - 30-day annualized -
- - yield(2) 6.21% -
- -----------------------------------------
Average
credit quality(3) AA
Average maturity(4) 2.5 years
PERSPECTIVES
FROM THE MANAGER
/s/ Shirish Malekar
Shirish Malekar
Portfolio Manager
- --------------------------------------------------------------------------------
Central bankers seem to have avoided global financial crisis with their
aggressive easing of interest rates at the end of 1998. The global flight to
quality that followed the Russian debt crisis has slowly been unwound in the
past three months. As a result, long-term interest rates in most international
markets snapped back by 0.25% to 0.50%. A marked exception was Japan, where
interest rates moved still lower. In an effort to revive that troubled economy,
the Bank of Japan cut interest rates to almost zero percent. In general, despite
the Brazilian devaluation of the real in January, some normalcy has returned to
the emerging debt and corporate credit markets as fears of a credit crunch have
dissipated.
With much fanfare, the Euro was launched on January 1, 1999. It has failed to
hold value versus the dollar, however, as European economies have slowed down
relative to the U.S. Since its launch, the Euro has fallen by almost 10% versus
the U.S. dollar. On a separate note, the Japanese yen has also weakened versus
the U.S. dollar--in this case falling by about 5%.
Despite the Brazilian devaluation and the continuing crisis in Kosovo, emerging
bond markets have stabilized over the past three months. The risk measure for
these bonds, the difference (or spread) between the yield of the J.P. Morgan
Emerging Market Bond Index and that of U.S. Treasuries has narrowed by about 2%,
currently standing at about 10.5%. That spread had been as wide as 15% right
after Brazil devalued the real on January 13.
---------------------
COUNTRY EXPOSURE (5)
As of 4-30-99
Brazil
7.0%
----
Germany
6.0%
----
Greece
4.0%
----
Panama
2.3%
----
Australia
2.1%
----
---------------------
- --------------------------------------------------------------------------------
1 Average annual total return and total return measure change in the value of
an investment in the Fund, assuming reinvestment of all dividends and
capital gains. Average annual total return reflects annualized change while
total return reflects aggregate change, and is not annualized.
2 Yields are historical and do not represent future yields, which will
fluctuate.
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.
14
<PAGE>
We believe that the worst string of global financial crises since the Great
Depression is behind us. Looking forward, we anticipate that global economic
growth in 1999 will be at a higher level than in 1998, though this growth will
move at a moderate pace. Excess capacity around the world should help to keep
interest rates low in major developed countries. It's our belief that Europe and
the U.S. will grow in 1999, but we expect that growth will come at a much slower
pace than it has in the recent past.
We plan to maintain the Fund's duration at or longer than the benchmark's. This
seems appropriate, given that emerging countries have stabilized and appear to
be on a slow path to recovery. If China and Hong Kong can hold the value of
their currencies stable, we may be through the worst in the emerging countries.
Active interest-rate risk management and about 10% exposure to short-maturity
emerging market debt helped the Fund to outperform its index as well as its
peers. In the current environment, we believe that there continues to be value
in short-duration emerging market debt.
Thank you for your investment in the Strong Short-Term Global Bond Fund. We
appreciate your confidence in us.
GROWTH OF AN ASSUMED $10,000 INVESTMENT
From 3-31-94 to 4-30-99
[GRAPH]
The Strong Salomon Brothers 1-3 Year Lipper Short
Short-Term World Government Bond World Multi-Market
Global Bond Fund Index (Currency Hedged)* Income Average *
3-94 10,000 10,000 10,000
12-94 10,513 10,153 9,723
12-95 11,612 11,286 10,498
12-96 12,775 12,088 11,178
12-97 13,629 12,856 11,556
12-98 14,184 13,796 12,196
4-99 14,539 14,037 12,229
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with the performance of 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.
- --------------------------------------------------------------------------------
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 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 Inc.
YOUR FUND'S
APPROACH
THE STRONG SHORT-TERM GLOBAL BOND FUND INVESTS FOR HIGH INCOME, FOCUSING ON
HIGH-QUALITY, SHORT-TERM BONDS FROM ISSUERS IN THE U.S. AND FOREIGN COUNTRIES.
THE PRICES OF SHORT-TERM BONDS ARE GENERALLY LESS SENSITIVE TO CHANGES IN
INTEREST RATES AND OTHER MARKET CONDITIONS THAN ARE LONG-TERM BONDS, SO THE
FUND'S EMPHASIS ON SHORT-TERM ISSUES HELPS TO KEEP VOLATILITY MODEST. BEFORE
CHOOSING INDIVIDUAL INVESTMENTS FOR THE FUND, WE EXAMINE GLOBAL ECONOMIC AND
FINANCIAL CONDITIONS TO IDENTIFY COUNTRIES WHOSE BONDS APPEAR TO HAVE POTENTIAL
FOR CAPITAL GAINS OR HIGH INVESTMENT INCOME. WE THEN SELECT INDIVIDUAL BONDS
THAT WE BELIEVE ARE POISED TO BENEFIT FROM THEIR COUNTRY'S ECONOMIC CONDITIONS.
- --------------------------------------------------------------------------------
MARKET HIGHLIGHTS
o The Salomon Brothers 1-3 Year World Government Bond Index (Currency Hedged)
returned 2.49% for the six months ended April 30, 1999.*
o Interest rates in Europe and the U.S. were in a downward trend until
January. They have reversed course in recent months, as fears of global
economic collapse have dissipated. Aggressive easing of interest rates by
major central banks seems to have comforted the global financial markets.
o Some normalcy has returned to mortgage-backed bonds, corporate issues, and
high-yield and emerging-market debt-the so-called "spread" markets. These
markets have been recovering in the months since they were rocked by the
Brazilian currency devaluation in January.
15
SCHEDULES OF INVESTMENTS IN SECURITIES APRIL 30,1999 (UNAUDITED)
- --------------------------------------------------------------------------------
================================================================================
STRONG ASIA PACIFIC FUND
================================================================================
Shares or
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
COMMON STOCKS 93.8%
AUSTRALIA 12.2%
Amcor, Ltd. 77,000 $ 414,313
Aristocrat Leisure, Ltd. 51,000 326,372
Australia & New Zealand Banking Group, Ltd. 42,292 334,672
BRL Hardy, Ltd. 70,780 315,850
The Broken Hill Proprietary Company, Ltd. 43,300 489,040
Capral Aluminium, Ltd. 184,000 307,755
Cinema Plus, Ltd. 346,500 219,908
Freedom Furniture, Ltd. 162,292 196,343
News Corporation, Ltd. 41,000 343,259
Oil Search, Ltd. (b) 255,000 332,104
Simeon Wines, Ltd. 119,500 316,006
Solution 6 Holdings, Ltd. (b) 177,000 388,489
Sydney Aquarium, Ltd. 128,450 361,327
Travel.com.au, Ltd. (Acquired 4/28/99;
Cost $81,775) (b) (d) 100,000 82,638
Village Roadshow, Ltd. 174,000 311,735
WMC, Ltd. 80,700 348,381
----------
5,088,192
CHINA 0.2%
China Vanke Company, Ltd. `B Shares' (b) 248,000 83,191
HONG KONG 8.5%
Asia Satellite Telecommunications Holdings, Ltd. 211,000 381,121
China Hong Kong Photo Products Holdings, Ltd. 3,608,000 428,260
China Resources Enterprise, Ltd. 222,000 373,781
China Telecom (Hong Kong), Ltd. (b) 228,000 520,669
Jardine Matheson Holdings, Ltd. 115,800 493,308
Mandarin Oriental International, Ltd. 572,000 431,860
New World Development Company, Ltd. 171,000 423,595
Peregrine Investment Holdings, Ltd. (b) 100,000 0
South China Morning Post Holdings, Ltd. 450,000 271,424
Yue Yuen Industrial Holdings 110,000 242,685
---------
3,566,703
INDIA 2.9%
Aptech, Ltd. 3,000 58,355
Indian Hotels Company, Ltd. 50 335
The Indian Smaller Companies Fund, Ltd. (b) 16,089 237,263
Indocam Himalayan Fund NV (b) 47,000 531,100
Larsen & Toubro, Ltd. GDR 27,000 249,750
Reliance Industries, Ltd. 300 905
UTI-Mastergrowth 93 Fund (b) 732,400 190,979
---------
1,268,687
INDONESIA 4.0%
Gulf Indonesia Resources, Ltd. 41,500 427,969
Hanjaya Mandala Sampoerna Tbk PT (b) 253,000 355,088
JF Indonesia Fund, Inc. (b) 1,555,000 401,249
Jaya Real Property Tbk PT (b) 6,406,000 260,896
London Sumatra Indonesia PT 1,500,000 234,962
----------
1,680,164
ITALY 0.4%
Ducati Motor Holding Spa (b) 57,000 169,786
JAPAN 26.3%
Aiful Corporation 6,040 494,518
Asatsu, Inc. 12,800 321,260
Catena Corporation 39,000 370,946
DDI Corporation 85 422,400
Fidelity Japan OTC and Regional Markets
Fund, Ltd. (b) 59,500 459,935
Heiwa Corporation 18,600 335,122
Ito-Yokado Company, Ltd. 5,000 307,132
Jafco Company, Ltd. 13,000 651,471
Japan OTC Equity Fund, Inc. (b) 400 287,000
Japan Tobacco, Inc. 44 442,470
Matsushita Electric Industrial Company, Ltd. 22,000 418,503
Mikuni Coca-Cola Bottling Company 16,000 335,205
Mitsubishi Heavy Industries, Ltd. 91,000 398,835
Mitsubishi Motors Corporation (b) 84,000 349,853
NEC Corporation 29,000 346,552
NTT Mobile Communication Network, Inc. 7 410,626
Nippon Express Company, Ltd. 62,000 405,263
Nissho Iwai Corporation (b) 313,000 333,118
Nomura Securities Company, Ltd. 46,000 496,505
Olympus Optical Company, Ltd. 23,000 282,946
Onward Kashiyama Company, Ltd. 29,000 354,814
Oriental Land Company, Ltd. 7,900 467,393
Shiseido Company, Ltd. 16,000 252,074
Shiseido Company, Ltd. Warrants, Expire 4/26/00 (b) 550 200,361
Shohkoh Fund & Company, Ltd. (Acquired 4/14/99;
Cost $529,819) (b) (d) 1,000 586,609
Softbank Corporation (b) 3,900 519,325
Tokyo Electric Power Company 16,000 341,909
Zensho Company, Ltd. 23,000 391,268
----------
10,983,413
MALAYSIA 3.1%
Berjaya Sports Toto BHD (f) 169,000 264,885
Kumpulan Guthrie BHD (f) 200,000 118,000
Malaysia International Shipping BHD (Fgn Reg) (f) 188,000 256,719
Sime Darby BHD (f) 261,000 274,737
World Equity Benchmark Shares - Malaysia
Index Series 58,000 362,500
----------
1,276,841
NEW ZEALAND 5.6%
Carter Holt Harvey, Ltd. 242,000 354,428
Fisher & Paykel Industries, Ltd. 96,000 351,499
Fletcher Challenge Energy 164,000 392,373
Guinness Peat Group PLC 356,464 356,681
Restaurant Brands New Zealand, Ltd. 367,000 285,163
Sky City, Ltd. 76,000 333,499
Sky Network Television, Ltd. (b) 154,000 253,954
----------
2,327,597
PHILIPPINES 2.8%
Benpres Holdings Corporation (b) 1,700,000 399,208
Cosmos Bottling Corporation 3,349,000 269,511
La Tondena Distillers, Inc. (b) 379,000 490,000
----------
1,158,719
SINGAPORE 14.2%
Allgreen Properties, Ltd. (Acquired 4/28/99;
Cost $242,852) (b) (d) 400,000 242,996
City Developments, Ltd. 55,000 366,559
DBS Land, Ltd. 180,000 333,353
The Development Bank of Singapore, Ltd. (Fgn Reg) 38,000 403,421
Fraser & Neave, Ltd. 81,000 358,301
G.K. Goh Holdings, Ltd. 520,000 361,899
Hong Leong Finance, Ltd. (Fgn Reg) 244,000 601,545
JIT Holdings, Ltd. 350,000 381,893
Jurong Shipyards, Ltd. 72,000 299,381
Keppel Corporation, Ltd. 110,500 315,435
Oversea-Chinese Banking Corporation, Ltd. (Fgn Reg) 39,000 365,733
SembCorp Industries, Ltd. (b) 246,061 306,216
Singapore Airline Warrants, Expire 5/11/00 (b) 150,000 369,802
Singapore Press Holdings, Ltd. 26,000 383,368
Singapore Sesdaq Fund 32,000 488,000
United Overseas Bank, Ltd. (Fgn Reg) 45,000 347,685
----------
5,925,587
SOUTH KOREA 4.2%
Hanwha Chemical Corporation 45,008 369,005
Kookmin Bank 26,000 354,545
16
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
STRONG ASIA PACIFIC FUND (continued)
================================================================================
Shares or
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
L.G. Securities Company (b) 12,000 $ 303,030
Pohang Iron & Steel Company, Ltd. 5,310 386,629
S1 Corporation 1,742 337,256
---------
1,750,465
THAILAND 7.6%
Adkinson Securities PCL (Fgn Reg) (b) 309,000 391,985
Dusit Thani PCL (Fgn Reg) (b) 244,500 273,867
Golden Land Property Development PCL (b) 340,000 119,298
Industrial Finance Corporation of Thailand
(Fgn Reg) (b) 670,000 470,175
KCE Electronics PCL (Fgn Reg) (b) 164,000 362,969
Land & House PCL (Fgn Reg) (b) 444,000 476,356
National Petrochemical PCL (b) 500,000 428,475
Royal Garden Resort PCL (Fgn Reg) (b) 434,000 172,780
Shin Corporations PCL (Fgn Reg) (b) 55,000 198,920
TelecomAsia Corporation PCL (Fgn Reg) (b) 300,000 259,109
---------
3,153,934
UNITED KINGDOM 1.2%
Genesis Malaysia Maju Fund, Ltd. (b) 32,000 483,200
VIETNAM 0.1%
Beta Mekong Fund (b) 25,000 62,500
Beta Mekong Fund Warrants, Expire 10/31/09 (b) 5,000 0
------
62,500
OTHER 0.5%
Siam Investment Fund (b) 45,000 225,000
- -------------------------------------------------------------------------------
Total Common Stocks (Cost $33,027,995) 39,203,979
- -------------------------------------------------------------------------------
PREFERRED STOCKS 0.6%
THAILAND
Siam Commercial Bank (b) 360,000 255,436
Siam Commercial Bank Warrants,
Expire 5/10/02 (b) 360,000 0
- --------------------------------------------------------------------------------
Total Preferred Stocks (Cost $255,643) 255,436
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (A) 7.3%
COMMERCIAL PAPER 0.1%
INTEREST BEARING, DUE UPON DEMAND
UNITED STATES
United States Cayman Eurodollar Call
Deposit, 3.75% $ 21,000 21,000
TIME DEPOSITS 7.2%
UNITED STATES
Bank Paribas Nationale, 5.00%,
Due 5/03/99 1,300,000 1,300,000
Dresdner Bank, 4.875%, Due 5/03/99 1,700,000 1,700,000
----------
Total Time Deposits 3,000,000
- --------------------------------------------------------------------------------
Total Short-Term Investments (Cost $3,021,000) 3,021,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Investments in Securities (Cost $36,304,638) 101.7% 42,480,415
Other Assets and Liabilities, Net (1.7%) (697,792)
- --------------------------------------------------------------------------------
NET ASSETS 100.0% $41,782,623
================================================================================
================================================================================
STRONG FOREIGN MAJORMARKETS FUND
================================================================================
Shares or
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
COMMON STOCKS 79.4%
AUSTRALIA 3.2%
National Australia Bank, Ltd. 1,790 $ 34,815
Westpac Banking Corporation, Ltd. 3,370 25,701
------
60,516
BELGIUM 0.8%
Compagnie Benelux Paribas SA 40 2,755
Credit Communal Holding Dexia 80 12,317
------
15,072
DENMARK 0.9%
Den Danske Bank Group 127 14,657
Unidanmark A/S `A Shares' 40 2,753
------
17,410
FINLAND 0.5%
Valmet Oyj 714 8,826
FRANCE 8.6%
Compagnie de Saint Gobain 100 17,182
Compagnie Francaise d'Etudes et de Construction
Technip 20 2,413
Compagnie Generale des Etablissements Michelin
`B Shares' 110 4,996
Credit Commercial de France 200 21,148
Dexia France 90 12,610
Elf Aquitaine SA 100 15,544
Eridania Beghin-Say SA 20 2,776
Lafarge SA 400 38,912
Lagardere S.C.A. 150 5,944
Louis Vuitton Moet Hennessy 70 18,786
STMicroelectronics (b) 80 8,341
Sagem SA 6 3,363
Valeo SA 130 10,997
-------
163,012
GERMANY 5.4%
Adidas-Salomon AG 60 5,913
Axa Colonia Konzern AG 160 15,227
BASF AG 91 3,988
Bayer AG 320 13,602
Degussa-Huels AG (b) 50 2,184
Deutsche Lufthansa AG - Registered Shares 110 2,547
MAN AG 300 9,358
Merck KGaA 500 16,918
Metro AG 34 2,460
Schwarz Pharma AG 50 2,569
Thyssen Krupp AG (b) 200 4,378
VEBA AG 340 18,659
Volksfuersorge Holding AG 10 4,399
-------
102,202
HONG KONG 1.3%
Asia Satellite Telecommunications Holdings, Ltd. 2,500 4,516
Dickson Concepts International, Ltd. 2,500 2,774
Elec & Eltek International Holdings, Ltd. 40,000 7,173
Yue Yuen Industrial Holdings 5,000 11,031
------
25,494
IRELAND 0.5%
Irish Life PLC 1,064 9,788
ITALY 3.0%
Eni Spa 4,300 28,290
Montedison Spa 34,000 25,572
Sorin Biomedica Group Spa 1,000 3,360
------
57,222
JAPAN 19.8%
Canon, Inc. 1,000 24,470
East Japan Railway Company 8 47,264
Fuji Electric Company, Ltd. 1,000 3,076
Hino Motors, Ltd. (b) 3,000 14,305
17
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) APRIL 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
================================================================================
STRONG FOREIGN MAJORMARKETS FUND (continued)
================================================================================
Shares or
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
Hitachi Metals, Ltd. 2,000 $ 9,235
Hokuetsu Paper Mills, Ltd. 5,000 27,235
Isuzu Motors, Ltd. (b) 6,000 19,660
Kamigumi Company, Ltd. 1,000 4,819
Kawasaki Heavy Industries, Ltd. 5,000 12,612
Kubota Corporation 3,000 8,523
Kyowa Hakko Kogyo Company, Ltd. 1,000 5,791
Minolta Company, Ltd. 1,000 5,539
Mitsui Soko Company, Ltd. 5,000 18,227
NAMCO, Ltd. 300 6,788
NEC Corporation 3,000 35,850
NTT Data Corporation 2 15,838
Nippon Express Company, Ltd. 4,000 26,145
Nippon Zeon Company, Ltd. 2,000 13,274
Oki Electric Industry Company, Ltd. (b) 6,000 22,878
Sony Corporation 200 18,688
Sumitomo Chemical Company, Ltd. 5,000 22,333
Toshiba Ceramics Company, Ltd. 2,000 7,475
West Japan Railway Company 1 4,148
--------
374,173
MALAYSIA 0.6%
Telekom Malaysia BHD (f) 4,000 10,653
NETHERLANDS 4.2%
Akzo Nobel NV 86 3,888
Koninklijke KPN NV 523 21,844
Koninklijke Philips Electronics NV 260 22,406
Laurus NV 77 1,657
Unilever NV 378 26,380
Vendex NV 110 2,739
--------
78,914
NEW ZEALAND 0.2%
Fletcher Challenge Energy 1,260 3,015
NORWAY 0.6%
Orkla ASA `B Shares' 820 12,045
PORTUGAL 0.5%
BPI-SGPS SA - Registered Shares 210 5,662
Banco Comercial Portugues SA - Registered Shares 140 3,951
--------
9,613
SINGAPORE 0.5%
GP Batteries International, Ltd. 6,000 10,015
SPAIN 2.7%
Autopistas, Concesionaria Espanola SA 220 2,781
Banco Popular Espanol SA 160 11,335
Endesa SA 1,349 30,012
Repsol SA (b) 480 7,816
51,944
SWEDEN 2.8%
Industrivarden AB `A Shares' 1,830 27,323
Nordbanken Holding AB 4,058 25,587
--------
52,910
SWITZERLAND 6.3%
Alusuisse Lonza Group AG - Registered Shares 22 26,354
Ems-Chemie Holding AG (b) 1 4,844
Financiere Richemont AG CIE Units 2 3,405
Motor-Columbus, Ltd. 3 5,750
Reisebuero Kuoni AG 1 3,544
SGS Societe Generale de Surveillance
Holding SA - Registered Shares 38 8,505
Valora Holding AG 120 28,041
Vontoble Holding AG `B Shares' 22 38,051
--------
118,494
UNITED KINGDOM 17.0%
Allied Zurich PLC 1,054 14,412
Britannic PLC 1,020 16,378
British American Tobacco PLC 1,054 8,852
Bunzl PLC 1,330 5,687
Carlton Communications PLC 588 5,730
Guardian Royal Exchange PLC 4,190 25,845
Hanson PLC 1,400 13,934
IMI PLC 1,440 6,888
Invensys PLC 10,048 51,338
Morgan Crucible Company PLC 350 1,590
National Power PLC 1,300 10,489
Premier Farnell PLC 1,170 5,577
Prudential Corporation PLC 2,460 35,122
Scottish Power PLC 2,850 23,546
Smith & Nephew PLC 8,000 20,453
Standard Chartered PLC 1,077 19,498
TI Group PLC 1,790 14,890
Unigate PLC 1,330 9,982
Unilever PLC (b) 2,764 24,527
United Assurance Group PLC 960 7,243
--------
321,981
- --------------------------------------------------------------------------------
Total Common Stocks (Cost $1,424,009) 1,503,299
- --------------------------------------------------------------------------------
PREFERRED STOCKS 1.5%
GERMANY
Henkel KGaA-Vorzug 193 15,285
Metro AG 170 6,381
RWE AG Non-Voting 230 6,980
- --------------------------------------------------------------------------------
Total Preferred Stocks (Cost $35,058) 28,646
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (A) 15.4%
COMMERCIAL PAPER 8.5%
INTEREST BEARING, DUE UPON DEMAND
UNITED STATES
United States Cayman Eurodollar Call Deposit, 3.75% $161,000 161,000
GOVERNMENT & AGENCY ISSUES 1.6%
UNITED STATES
United States Treasury Bills, Due 7/08/99 (c) 30,000 29,759
TIME DEPOSITS 5.3%
UNITED STATES
Dresdner Bank, 4.875%, Due 5/03/99 100,000 100,000
- --------------------------------------------------------------------------------
Total Short-Term Investments (Cost $290,765) 290,759
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Investments in Securities (Cost $1,749,832) 96.3% 1,822,704
Other Assets and Liabilities, Net 3.7% 70,264
- --------------------------------------------------------------------------------
NET ASSETS 100.0% $1,892,968
================================================================================
FUTURES
- --------------------------------------------------------------------------------
Underlying Unrealized
Expiration Face Amount Appreciation
Date at Value (Depreciation)
- --------------------------------------------------------------------------------
Purchased:
3 CAC 40 Index 6/99 $139,275 $3,287
1 IBEX PLUS Index 6/99 105,393 (1,098)
18
<PAGE>
SCHEDULE OF INVESTMENTS IN SECURITIES (continued) APRIL 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
================================================================================
STRONG INTERNATIONAL STOCK FUND
================================================================================
Shares or
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
COMMON STOCKS 100.3%
AUSTRALIA 3.1%
Cable & Wireless Optus, Ltd. (b) 836,000 $ 879,111
TABCORP Holdings, Ltd. 113,000 918,116
----------
2,797,227
BELGIUM 0.9%
Mobistar SA (b) 14,900 838,180
CANADA 3.9%
Nortel Networks Corporation 52,300 3,566,206
EGYPT 0.0%
Suez Cement 300 5,147
FINLAND 6.1%
Nokia Oyj `A Shares' 71,600 5,534,389
FRANCE 11.2%
Banque Nationale de Paris 27,900 2,314,389
Lagardere S.C.A. 18,500 733,180
Pinault-Printemps-Redoute SA 4,300 713,850
STMicroelectronics (b) 37,000 3,857,607
Societe Generale 5,200 931,443
Societe Television Francaise 4,900 958,533
Suez Lyonnaise des Eaux 4,100 697,990
----------
10,206,992
GERMANY 4.6%
Bayerische Motoren Werke AG 1,300 931,993
Bayerische Motoren Werke AG - New (b) 266 189,856
Mannesmann AG 23,000 3,030,297
Muenchener Rueckversicherungs - Gesellschaft
Warrants, Expire 6/03/02 (b) 116 3,986
----------
4,156,132
GREECE 1.1%
National Bank of Greece Rights (b) 20,500 0
Panafon Hellenic Telecom Company SA
(Acquired 1/04/99 - 1/15/99; Cost $1,093,052) (b)(d) 37,400 999,265
----------
999,265
HONG KONG 3.9%
Hutchison Whampoa, Ltd. 186,000 1,667,828
Johnson Electric Holdings, Ltd. 378,000 1,129,006
Li & Fung, Ltd. 328,000 804,046
Peregrine Investment Holdings, Ltd. (b) 600,000 0
----------
3,600,880
INDIA 0.0%
Asian Hotels, Ltd. 150 452
Indian Hotels Company, Ltd. 2,050 13,735
Titan Industries, Ltd. 20 30
UTI-Mastergrowth 93 Fund (b) 37,600 9,805
----------
24,022
IRELAND 2.4%
Bank of Ireland 39,500 791,490
Connemara Green Marble Quarries PLC
(Acquired 11/21/96 - 6/20/97; Cost $635,000)(b)(d)(e) 50,800 635,000
Connemara Green Marble Quarries PLC Warrants,
Expire 9/30/02 (b) (d) (e) 8,000 0
Elan Corporation PLC ADR (b) 14,400 741,600
----------
2,168,090
ISRAEL 0.5%
Gilat Satellite Networks, Ltd. (b) 9,000 468,000
ITALY 7.3%
Banca Poplare di Brescia 66,000 2,272,310
Mediaset Spa 145,700 1,262,394
Mediolanum Spa 241,500 1,590,906
Telecom Italia Mobile Spa 256,500 1,545,429
----------
6,671,039
JAPAN 10.6%
Advantest Corporation 10,300 788,058
Daiwa Securities Group, Inc. 322,000 1,969,832
Hoya Corporation 21,000 1,099,891
Keyence Corporation 3,700 556,256
NTT Mobile Communication Network, Inc. 17 997,235
Nintendo Company, Ltd. 6,200 583,994
Rohm Company, Ltd. 8,000 965,390
Taisho Pharmaceutical Company, Ltd. 7,800 239,889
Takeda Chemical Industries 6,000 260,957
Tokyo Electron, Ltd. 18,000 1,025,727
Tokyo Seimitsu Company, Ltd. 20,300 1,124,470
----------
9,611,699
KAZAKHSTAN 0.2%
Firebird Republics Fund, Ltd. (b) 4,055 225,253
NETHERLANDS 6.4%
ASM Lithography Holding NV (b) 57,200 2,413,283
Koninklijke Ahold NV 37,550 1,395,644
Vendex NV 34,100 849,150
Verenigde Nederlandse Uitgeversbedrijven NV 29,800 1,206,853
5,864,930
PORTUGAL 0.9%
Brisa-Auto Estradas de Portugal SA 18,500 784,432
ROMANIA 0.6%
The Romanian Investment Fund, Ltd. (b) 1,500 525,000
SINGAPORE 2.5%
City Developments, Ltd. 66,000 439,870
The Development Bank of Singapore, Ltd. (Fgn Reg) 106,000 1,125,332
Pacific Internet, Ltd. (b) 3,700 293,688
Singapore Press Holdings, Ltd. 32,000 471,837
----------
2,330,727
SPAIN 1.7%
Banco Santander Central Hispano SA 42,848 931,522
Tabacalera SA 29,700 582,558
----------
1,514,080
SWEDEN 1.6%
Skandia Forsakrings AB 76,000 1,473,797
SWITZERLAND 3.0%
Adecco SA (b) 3,045 1,536,991
Zurich Allied AG 1,900 1,189,760
2,726,751
UKRAINE 0.3%
Ukrainian Opportunity Fund (b) 118,800 297,000
UNITED KINGDOM 27.5%
Cable & Wireless Communications PLC (b) 200,900 2,293,965
Dixons Group PLC 261,400 5,586,467
Energis PLC (b) 163,200 4,376,179
GKN PLC 45,000 769,296
Hays PLC 110,000 1,224,141
Kingfisher PLC 69,500 1,040,947
Legal & General Group PLC 246,400 717,265
Lloyds TSB Group PLC 156,000 2,513,636
National Express Group PLC 98,000 1,829,238
Vodafone Group PLC 155,000 2,858,235
WPP Group PLC 207,500 1,834,641
----------
25,044,010
- --------------------------------------------------------------------------------
Total Common Stocks (Cost $78,322,563) 91,433,248
- --------------------------------------------------------------------------------
19
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) APRIL 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
================================================================================
STRONG INTERNATIONAL STOCK FUND (continued)
================================================================================
Shares or
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (A) 1.6%
COMMERCIAL PAPER 0.1%
INTEREST BEARING, DUE UPON DEMAND
UNITED STATES
United States Cayman Eurodollar Call Deposit, 3.75% $ 79,000 $ 79,000
GOVERNMENT & AGENCY ISSUES 0.8%
UNITED STATES
United States Treasury Bills, Due 7/22/99 (c) 758,000 750,588
TIME DEPOSITS 0.7%
UNITED STATES
Dresdner Bank, 4.875%, Due 5/03/99 600,000 600,000
- --------------------------------------------------------------------------------
Total Short-Term Investments (Cost $1,429,757) 1,429,588
- --------------------------------------------------------------------------------
Total Investments in Securities (Cost $79,752,320) 101.9% 92,862,836
Other Assets and Liabilities, Net (1.9%) (1,736,906)
- --------------------------------------------------------------------------------
NET ASSETS 100.0% $91,125,930
================================================================================
FUTURES
- --------------------------------------------------------------------------------
Underlying
Expiration Face Amount Unrealized
Date at Value Depreciatio
- --------------------------------------------------------------------------------
Purchased:
81 Nikkei 225 Index 6/99 $11,352,825 ($91,233)
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
- --------------------------------------------------------------------------------
Unrealized
Settlement Value Appreciation
Date in USD (Depreciation)
- --------------------------------------------------------------------------------
Sold:
665,000,000 JPY 5/12/99 $5,582,043 $125,706
413,000,000 JPY 6/24/99 3,487,022 44,978
495,000,000 JPY 7/23/99 4,197,049 (10,826)
================================================================================
STRONG OVERSEAS FUND
================================================================================
Shares or
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
COMMON STOCKS 96.0%
AUSTRALIA 4.8%
Cable & Wireless Optus, Ltd. (b) 67,500 $151,722
TABCORP Holdings, Ltd. 7,000 56,874
---------
208,596
BELGIUM 0.9%
Mobistar SA (b) 700 39,378
CANADA 5.0%
BCE Emergis, Inc. (b) 1,100 34,564
Nortel Networks Corporation 2,700 184,106
---------
218,670
FINLAND 7.2%
Nokia Oyj `A Shares' 4,080 315,367
FRANCE 9.1%
Banque Nationale de Paris 800 66,363
Lagardere S.C.A. 900 35,668
Pinault-Printemps-Redoute SA 125 20,751
STMicroelectronics (b) 1,700 177,241
Societe Generale 200 35,825
Societe Television Francaise 200 39,124
Suez Lyonnaise des Eaux 140 23,834
---------
398,806
GERMANY 2.7%
Bayerische Motoren Werke AG 60 43,015
Mannesmann AG 580 76,416
---------
119,431
GREECE 1.1%
National Bank of Greece Rights (b) 568 0
Panafon Hellenic Telecom Company SA
(Acquired 11/20/98; Cost $32,438) (b) (d) 1,800 48,093
48,093
HONG KONG 3.0%
Hutchison Whampoa, Ltd. 5,000 44,834
Johnson Electric Holdings, Ltd. 16,000 47,788
Li & Fung, Ltd. 16,000 39,222
---------
131,844
IRELAND 2.1%
Bank of Ireland 1,600 32,060
Elan Corporation PLC ADR (b) 1,200 61,800
---------
93,860
ISRAEL 0.6%
Gilat Satellite Networks, Ltd. (b) 500 26,000
ITALY 7.4%
Alleanza Assicurazioni 4,840 57,948
Banca Poplare di Brescia 3,100 106,730
Mediaset Spa 2,700 23,394
Mediolanum Spa 5,000 32,938
Telecom Italia Mobile Spa 12,700 76,518
Telecom Italia Spa 2,600 27,534
---------
325,062
JAPAN 13.6%
Advantest Corporation 600 45,906
Daiwa Securities Group, Inc. 15,000 91,762
Hoya Corporation 1,000 52,376
Keyence Corporation 200 30,068
NTT Mobile Communication Network, Inc. 1 58,661
Nintendo Company, Ltd. 400 37,677
Rohm Company, Ltd. 1,000 120,674
Taisho Pharmaceutical Company, Ltd. 600 18,453
Takeda Chemical Industries 500 21,746
Tokyo Electron, Ltd. 1,000 56,985
Tokyo Seimitsu Company, Ltd. 1,100 60,932
---------
595,240
NETHERLANDS 6.1%
ASM Lithography Holding NV (b) 3,600 151,885
Koninklijke Ahold NV 1,200 44,601
Vendex NV 1,060 26,396
Verenigde Nederlandse Uitgeversbedrijven NV 1,100 44,548
---------
267,430
PORTUGAL 1.1%
Brisa-Auto Estradas de Portugal SA 1,170 49,610
SINGAPORE 4.0%
City Developments, Ltd. 5,000 33,324
The Development Bank of Singapore, Ltd. (Fgn Reg) 9,000 95,546
Pacific Internet, Ltd. (b) 200 15,875
Singapore Press Holdings, Ltd. 2,000 29,490
---------
174,235
SPAIN 1.3%
Banco Santander Central Hispano SA 1,547 33,632
Tabacalera SA 1,300 25,499
59,131
SWEDEN 0.9%
Skandia Forsakrings AB 2,000 38,784
20
<PAGE>
================================================================================
STRONG OVERSEAS FUND (continued)
================================================================================
Shares or
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
SWITZERLAND 1.5%
Adecco SA (b) 75 $ 37,857
Zurich Allied AG 45 28,178
66,035
UNITED KINGDOM 22.9%
Cable & Wireless Communications PLC (b) 9,600 109,618
Dixons Group PLC 11,100 237,222
Energis PLC (b) 6,700 179,659
Hays PLC 4,100 45,628
Kingfisher PLC 3,300 49,426
Legal & General Group PLC 14,000 40,754
Lloyds TSB Group PLC 4,300 69,286
National Express Group PLC 1,200 22,399
Rentokil Initial PLC 4,900 28,863
Vodafone Group PLC 3,200 59,010
Vodafone Group PLC Sponsored ADR 600 107,625
WPP Group PLC 6,100 53,934
-----------
1,003,424
UNITED STATES 0.7%
Global Crossing, Ltd. (b) 600 32,400
- --------------------------------------------------------------------------------
Total Common Stocks (Cost $3,438,158) 4,211,396
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (A) 4.5%
COMMERCIAL PAPER 1.3%
INTEREST BEARING, DUE UPON DEMAND
UNITED STATES
United States Cayman Eurodollar Call Deposit, 3.75% $58,000 58,000
GOVERNMENT & AGENCY ISSUES 0.9%
UNITED STATES
United States Treasury Bills, Due 7/22/99 (c) 40,000 39,609
TIME DEPOSITS 2.3%
UNITED STATES
Dresdner Bank, 4.875%, Due 5/03/99 100,000 100,000
- --------------------------------------------------------------------------------
Total Short-Term Investments (Cost $197,616) 197,609
- --------------------------------------------------------------------------------
Total Investments in Securities (Cost $3,635,774) 100.5% 4,409,005
Other Assets and Liabilities, Net (0.5%) (20,193)
- --------------------------------------------------------------------------------
NET ASSETS 100.0% $4,388,812
================================================================================
FUTURES
- --------------------------------------------------------------------------------
Underlying
Expiration Face Amount Unrealized
Date at Value Depreciation
- --------------------------------------------------------------------------------
Purchased:
4 Nikkei 225 Index 6/99 $560,663 ($6,116)
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
- --------------------------------------------------------------------------------
Unrealized
Settlement Value Appreciation
Date in USD (Depreciation)
- --------------------------------------------------------------------------------
Sold:
45,000,000 JPY 5/12/99 $377,732 $8,911
24,000,000 JPY 6/24/99 202,636 1,665
15,000,000 JPY 7/23/99 127,183 (328)
================================================================================
STRONG GLOBAL HIGH-YIELD BOND FUND
================================================================================
Shares or
Principal Value
Amount (Note 2)
- ------------------------------------------------------------------------------
CORPORATE BONDS 38.4%
SOUTH KOREA 5.9%
Korea Electric Power Company Notes, 6.375%,
Due 12/01/03 100,000 USD $ 95,965
UNITED STATES 32.5%
AP Holdings, Inc. Senior Discount Notes, Zero %,
Due 3/15/08 (Rate Reset Effective 3/15/03) $250,000 143,750
Global Crossing Holding, Ltd. Senior Notes,
9.625%, Due 5/15/08 150,000 168,000
ITT Corporation Notes, 6.75%, Due 11/15/03 100,000 96,575
Mohegan Tribal Gaming Authority Senior Notes,
8.125%, Due 1/01/06 (Acquired 2/24/99;
Cost $50,000) (d) 50,000 51,437
Transwestern Publishing Company LP/TWP
Capital Corporation II Senior Subordinated
Notes, Series D, 9.625%, Due 11/15/07 70,000 73,500
---------
533,262
- --------------------------------------------------------------------------------
Total Corporate Bonds (Cost $616,143) 629,227
- --------------------------------------------------------------------------------
GOVERNMENT & AGENCY ISSUES 30.7%
ARGENTINA 12.6%
Republic of Argentina Notes, 11.75%, Due 4/07/09 200,000 USD 205,500
COLOMBIA 5.9%
Republic of Colombia Bonds, 9.75%, Due 4/23/09 100,000 USD 97,250
MEXICO 12.2%
United Mexican States Bonds, 6.25%, Due 12/31/19 250,000 USD 199,845
RUSSIA 0.0%
Vnesheconomobank Floating Rate Debentures,
5.9688%, Due 12/15/15 (Acquired 6/02/98;
Cost $5,109) (d) 8,770 USD 658
- --------------------------------------------------------------------------------
Total Government & Agency Issues (Cost $499,311) 503,253
- --------------------------------------------------------------------------------
PREFERRED STOCKS 6.4%
CAYMAN ISLANDS
Centaur Funding Corporation Series B 9.08%
(Acquired 12/09/98; Cost $95,000) (d) 95 USD 105,628
- --------------------------------------------------------------------------------
Total Preferred Stocks (Cost $95,000) 105,628
- --------------------------------------------------------------------------------
COMMON STOCKS 4.4%
UNITED STATES
Crescent Real Estate Equities, Inc. 1,500 33,563
OpTel, Inc. Non-Voting (Acquired 3/18/98;
Cost $6,750) (b) (d) 150 750
Tanger Factory Outlet Centers, Inc. 1,500 38,625
- --------------------------------------------------------------------------------
Total Common Stocks (Cost $80,632) 72,938
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (A) 14.2%
COMMERCIAL PAPER 1.4%
INTEREST BEARING, DUE UPON DEMAND
UNITED STATES
United States Cayman Eurodollar Call
Deposit, 3.75% $23,000 23,000
GOVERNMENT & AGENCY ISSUES 0.6%
UNITED STATES
United States Treasury Bills, Due 7/15/99 (c) 10,000 9,911
TIME DEPOSITS 12.2%
UNITED STATES
Bank Paribas Nationale, 5.00%, Due 5/03/99 200,000 200,000
- --------------------------------------------------------------------------------
Total Short-Term Investments (Cost $232,916) 232,911
- --------------------------------------------------------------------------------
21
<PAGE>
SCHEDULE OF INVESTMENTS IN SECURITIES (continued) APRIL 30, 1999 (Unaudited)
================================================================================
STRONG GLOBAL HIGH-YIELD BOND FUND
================================================================================
Shares or
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Investments in Securities (Cost $1,524,002) 94.1% $1,543,957
Other Assets and Liabilities, Net 5.9% 96,562
- --------------------------------------------------------------------------------
Net Assets 100.0% $1,640,519
================================================================================
FUTURES
- --------------------------------------------------------------------------------
Underlying
Expiration Face Amount Unrealized
Date at Value Appreciation
- --------------------------------------------------------------------------------
Sold:
1 U.S. Treasury Bonds 6/99 $120,563 $3,023
================================================================================
STRONG INTERNATIONAL BOND FUND
================================================================================
Shares or
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
CORPORATE BONDS 8.6%
CANADA 3.7%
Shaw Communications, Inc. Debentures, 8.54%,
Due 9/30/27 1,000,000 CAD $654,190
DENMARK 0.3%
Nykredit Bonds, 8.00%, Due 10/01/29 412,000 DKK 60,753
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
$439,901) (d) 439,901 USD 424,504
New Zealand 1.9%
International Bank for Reconstruction
and Development Medium-Term Notes,
Zero %, Due 8/20/07 1,000,000 NZD 332,661
United States 0.3%
Bank of Boston Corporation Subordinated
Floating Rate Notes, 5.125%, Due 2/28/01 $50,000 50,056
- --------------------------------------------------------------------------------
Total Corporate Bonds (Cost $1,582,398) 1,522,164
- --------------------------------------------------------------------------------
GOVERNMENT & AGENCY ISSUES 62.5%
AUSTRALIA 2.6%
Australian Government Bonds, 8.75%, Due
8/15/08 570,000 AUD 465,592
DENMARK 8.0%
Kingdom of Denmark Notes:
7.00%, Due 11/15/07 4,250,000 DKK 728,725
9.00%, Due 11/15/00 4,400,000 DKK 681,298
----------
1,410,023
FINLAND 3.5%
Government of Finland Bonds, 10.00%,
Due 9/15/01 3,000,000 FIM 620,431
FRANCE 6.5%
Government of France Debentures, 8.50%,
Due 11/25/02 914,694 EUR 1,148,887
GERMANY 20.0%
Republic of Germany Bonds, Series 97, 6.00%,
Due 7/04/07 1,022,583 EUR 1,243,116
Republic of Germany Debentures, Series 94, 7.50%,
Due 11/11/04 1,815,086 EUR 2,315,878
----------
3,558,994
GREECE 2.1%
Republic of Hellenic Bonds, 8.80%,
Due 6/19/07 100,000,000 GRD 381,574
ITALY 18.4%
Buoni Poliennali Del Tes Bonds, 7.75%,
Due 11/01/06 2,478,988 EUR 3,278,036
UNITED STATES 1.4%
United States Treasury Notes, 6.25%, Due
5/31/00 250,000 253,438
- --------------------------------------------------------------------------------
Total Government & Agency Issues (Cost $11,470,170) 11,116,975
- --------------------------------------------------------------------------------
NON-AGENCY MORTGAGE &
ASSET-BACKED SECURITIES 13.8%
UNITED STATES
CS First Boston Mortgage Securities
Corporation Mortgage Pass-Thru Certificates,
Series 1992-4, Class A-5, Interest Only, 0.625%,
Due 10/25/22 13,640,067 140,629
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
$352,320) (d) 357,601 359,930
DLJ Mortgage Acceptance Corporation Variable
Rate Mortgage Pass-Thru Certificates:
Series 1990-2, Class A, 6.8919%, Due 1/25/22 246,072 248,533
Series 1991-3, Class A1, 6.6943%, Due 2/20/21 436,402 438,587
Merrill Lynch Home Equity Acceptance, Inc.
Subordinated Variable Rate Mortgage-Backed
Certificates, Series 1994-A, Class A-1, 5.9375%,
Due 8/17/23 58,776 58,271
Resolution Trust Corporation Mortgage Pass-Thru
Securities, Inc. Variable Rate Certificates, Series
1992-16, Class B-3, 10.5742%, Due 5/25/24 338,848 337,768
Resolution Trust Corporation Mortgage Pass-Thru
Securities, Inc. Variable Rate Mortgage Pass-Thru
Certificates, Series 1995-1, Class B-5, 6.4631%,
Due 10/25/28 476,561 485,207
Ryland Mortgage Securities Corporation Variable
Rate Mortgage Participation Securities, Series
1991-1, Class 1, 6.7847%, Due 3/25/28 391,398 393,245
- --------------------------------------------------------------------------------
Total Non-Agency Mortgage & Asset-Backed Securities
(Cost $2,287,903) 2,462,170
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (A) 14.3%
COMMERCIAL PAPER 0.2%
INTEREST BEARING, DUE UPON DEMAND
UNITED STATES
United States Cayman Eurodollar Call Deposit,
3.75% 40,000 40,000
GOVERNMENT & AGENCY ISSUES 1.2%
ARGENTINA 0.2%
Republic of Argentina Bote 10 Floating Rate Notes,
5.00%, Due 4/01/00 35,500 USD 40,466
UNITED STATES 1.0%
United States Treasury Bills, Due 5/20/99 (c) $170,000 169,653
----------
Total Government & Agency Issues 210,119
22
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
STRONG INTERNATIONAL BOND FUND (Continued)
================================================================================
Shares or
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
TIME DEPOSITS 12.9%
UNITED STATES
Bank Paribas Nationale, 5.00%, Due 5/03/99 $700,000 $ 700,000
Dresdner Bank, 4.875%, Due 5/03/99 800,000 800,000
Republic National Bank of New York, 4.9375%,
Due 5/03/99 800,000 800,000
----------
Total Time Deposits 2,300,000
- --------------------------------------------------------------------------------
Total Short-Term Investments (Cost $2,546,149) 2,550,119
- --------------------------------------------------------------------------------
Total Investments in Securities (Cost $17,886,620) 99.2% 17,651,428
Other Assets and Liabilities, Net 0.8% 140,086
- --------------------------------------------------------------------------------
NET ASSETS 100.0% $17,791,514
================================================================================
FUTURES
- --------------------------------------------------------------------------------
Underlying Unrealized
Expiration Face Amount Appreciation
- --------------------------------------------------------------------------------
Date at Value (Depreciation)
Purchased:
4 Ten-Year Japanese Government Bonds 6/99 $4,531,647 $138,734
9 Ten-Year United Kingdom Government
Bonds 6/99 1,682,683 (42,314)
Sold:
5 Ten-Year Australian Government Bonds 6/99 494,584 (4,891)
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
- --------------------------------------------------------------------------------
Unrealized
Settlement Value Appreciation
Date in USD (Depreciation)
- --------------------------------------------------------------------------------
Purchased:
1,152,000 CAD 8/12/99 $ 792,395 $ 20,277
3,925,000 EUR 8/10/99 4,178,903 (280,897)
645,530,000 JPY 5/12/99 5,418,611 (107,763)
Sold:
1,080,000 AUD 8/12/99 714,271 (15,619)
960,000 CAD 6/17/99 659,857 (36,561)
5,937,000 DKK 10/06/99 852,697 14,525
1,029,031 EUR 5/12/99 1,090,060 118,967
640,000 GBP 10/21/99 1,029,888 3,008
108,000,000 GRD 10/21/99 345,059 1,150
30,000,000 JPY 8/10/99 225,016 (1,958)
================================================================================
STRONG SHORT-TERM GLOBAL BOND FUND
================================================================================
Shares or
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
CORPORATE BONDS 22.7%
BRAZIL 7.0%
Banco de Boston SA Floating Rate Eurodollar
Notes, 8.8175%, Due 1/16/02 3,690,000 USD $3,173,400
DENMARK 0.8%
Nykredit Bonds, 8.00%, Due 10/01/29 2,613,000 DKK 385,308
MEXICO 0.9%
Imexsa Export Trust Senior Structured Pass-Thru
Certificates, Series 1996-1, 10.125%, Due 5/31/03
(Acquired 7/30/98; Cost $439,901) (d) 439,901 USD 424,505
NEW ZEALAND 0.7%
International Bank for Reconstruction and
Development Medium-Term Notes,
Zero%, Due 8/20/07 1,000,000 NZD 332,661
UNITED KINGDOM 3.3%
LCR Finance PLC Senior Bonds, 4.50%,
Due 12/07/28 (Acquired 2/10/99;
Cost $1,619,593) (d) 1,000,000 GBP 1,493,900
UNITED STATES 10.0%
Atlas Air, Inc. Pass-Thru Certificates, Series
1998-1, Class C, 8.01%, Due 1/02/10 944,396 942,125
Bank of Boston Corporation Subordinated
Floating Rate Notes, 5.125%, Due 2/28/01 100,000 100,112
GS Escrow Corporation Senior Notes, 6.75%,
Due 8/01/01 1,000,000 1,001,480
HRPT Properties Trust Floating Rate Notes,
5.60%, Due 7/09/07 1,500,000 1,495,575
Niagara Mohawk Power Corporation Senior
Notes, Series B, 7.00%, Due 10/01/00 1,000,000 1,009,755
4,549,047
- --------------------------------------------------------------------------------
Total Corporate Bonds (Cost $11,193,186) 10,358,821
- --------------------------------------------------------------------------------
GOVERNMENT AND AGENCY ISSUES 33.3%
AUSTRALIA 4.0%
Australian Government Bonds, 8.75%, Due 8/15/08 2,240,000 AUD 1,829,696
GREECE 4.0%
Republic of Hellenic Bonds, 8.80%, Due
6/19/07 470,000,000 GRD 1,793,397
PANAMA 2.3%
Republic of Panama Floating Rate Notes,
6.1913%, Due 5/14/02 1,076,955 USD 1,036,569
UNITED STATES 23.0%
FHLMC Multiclass Mortgage Participation
Certificates, 9.50%, Due 6/15/06 $1,207,239 1,265,436
FHLMC Participation Certificates:
7.677%, Due 7/01/10 338,093 344,378
9.00%, Due 8/01/18 892,377 961,054
10.00%, Due 6/01/05 517,435 539,795
FNMA Guaranteed Mortgage Pass-Thru
Certificates, Pool #372179, 11.00%, Due 4/01/12 314,557 337,216
FNMA Guaranteed Real Estate Mortgage
Investment Conduit Pass-Thru Certificates,
10.50%, Due 8/01/20 299,799 326,114
FNMA Guaranteed Real Estate Mortgage
Investment Conduit Variable Rate Pass-Thru
Certificates, Pool #313629, 8.50%, Due
11/01/02 1,798,575 1,856,004
FNMA Guaranteed Variable Rate Mortgage
Pass-Thru Certificates, Pool #365418, 6.52%,
Due 1/01/23 441,493 449,382
GNMA Guaranteed Pass-Thru Certificates, Pool
#234503, 9.50%, Due 12/15/17 4,070,895 4,401,23
------------
10,480,614
- --------------------------------------------------------------------------------
Total Government & Agency Issues (Cost $14,904,401) 15,140,276
- --------------------------------------------------------------------------------
NON-AGENCY MORTGAGE
& ASSET-BACKED SECURITIES 31.3%
UNITED STATES
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
$704,641) (d) 715,201 719,861
23
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) APRIL 30, 1999 (Unaudited)
- -------------------------------------------------------------------------------
===============================================================================
STRONG SHORT-TERM GLOBAL BOND FUND (Continued)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
DLJ Acceptance Trust Collateralized Mortgage
Obligation Certificates, Series 1989-1, Class F,
11.00%, Due 8/01/19 $2,065,390 $ 2,275,759
DLJ Mortgage Acceptance Corporation Variable
Rate Mortgage Pass-Thru Certificates:
Series 1990-2, Class A, 6.8919%, Due 1/25/22 984,288 994,130
Series 1991-3, Class A1, 6.6943%, Due 2/20/21 872,805 877,173
Empire Funding Home Loan Owner Trust Home
Loan Asset-Backed Notes, Series 1997-4, Class
A-3, 7.11%, Due 7/25/14 2,213,000 2,234,057
Kmart CMBS Financing, Inc. Floating Rate
Commercial Mortgage Pass-Thru Certificates,
Series 1997-1, Class D, 6.0388%, Due 3/01/07
(Acquired 2/21/97; Cost $2,000,000) (d) 2,000,000 1,960,130
Merrill Lynch Credit Corporation Mortgage
Investors, Inc. Senior Subordinated Variable
Rate Mortgage Pass-Thru Certificates, Series
1994-A,Class A4, 6.7758%, Due 7/15/19 707,762 714,470
Merrill Lynch Home Equity Acceptance, Inc.
Subordinated Variable Rate Mortgage-Backed
Certificates, Series 1994-A, Class A-1, 5.9375%,
Due 8/17/23 39,184 38,848
Resolution Trust Corporation Mortgage Pass-Thru
Securities, Inc. Variable Rate Certificates:
Series 1992-16, Class A-4, 7.0347%, Due 8/25/22 8,965 8,958
Series 1992-16, Class B-3, 10.5742%, Due
5/25/24 1,016,543 1,013,305
Resolution Trust Corporation Mortgage Pass-
Thru Securities, Inc. Variable Rate Commercial
Certificates, Series 1992-C8, Class A-2,
6.2875%, Due 12/25/23 573,654 574,924
Resolution Trust Corporation Mortgage Pass-
Thru Securities, Inc. Variable Rate Mortgage
Pass-Thru Certificates:
Series 1992-18P, Class B-5, 7.50%, Due 1/25/21
(Acquired 9/10/97; Cost $648,013) (d) 645,592 645,399
Series 1995-1, Class B-5, 6.4631%, Due 10/25/28 230,450 234,631
Ryland Mortgage Securities Corporation Variable
Rate Mortgage Participation Securities:
Series 1990-C1, Class A, 6.0168%, Due 10/25/20 640,650 638,248
Series 1991-1, Class 1, 6.7847%, Due 3/25/20 492,043 494,365
Series 1992-3, Class A-2, 6.8988%, Due 6/25/20 499,204 500,115
Western Federal Savings and Loan Association
Real Estate Mortgage Investment Conduit Pass-
Thru Certificates, Series 1989-5, Class A, 6.605%,
Due 7/25/19 329,793 328,799
- --------------------------------------------------------------------------------
Total Non-Agency Mortgage & Asset-Backed Securities
(Cost $14,187,584) 14,253,172
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (A) 11.7%
COMMERCIAL PAPER 0.0%
INTEREST BEARING, DUE UPON DEMAND
UNITED STATES
United States Cayman Eurodollar Call
Deposit, 3.75% 19,000 19,000
GOVERNMENT & AGENCY ISSUES 0.7%
ARGENTINA 0.4%
Republic of Argentina Bote 10 Floating Rate Notes,
5.00%, Due 4/01/00 177,500 USD 202,332
UNITED STATES 0.3%
United States Treasury Bills, Due 5/20/99 (c) $ 120,000 119,755
Total Government & Agency Issues 322,087
TIME DEPOSITS 11.0%
UNITED STATES
Bank Paribas Nationale, 5.00%, Due 5/03/99 5,000,000 $ 5,000,000
- --------------------------------------------------------------------------------
Total Short-Term Investments (Cost $5,321,138) 5,341,087
- --------------------------------------------------------------------------------
Total Investments in Securities (Cost $45,606,309) 99.0% 45,093,356
Other Assets and Liabilities, Net 1.0% 466,762
- --------------------------------------------------------------------------------
Net Assets 100.0% $45,560,118
================================================================================
FUTURES
- --------------------------------------------------------------------------------
Underlying Unrealized
Expiration Face Amount Appreciation
Date at Value (Depreciation)
- --------------------------------------------------------------------------------
Purchased:
25 Ten-Year Euro Bonds 6/99 $2,725,662 $58,983
Sold:
16 Five-Year U.S. Treasury Notes 6/99 1,778,250 16,000
9 Ten-Year Australian
Government Bonds 6/99 890,251 (8,804)
14 Ten-Year United Kingdom
Government Bonds 6/99 2,617,507 65,821
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
- --------------------------------------------------------------------------------
Unrealized
Settlement Value Appreciation
Date in USD (Depreciation)
- --------------------------------------------------------------------------------
Purchased:
9,675,000 EUR 8/10/99 $10,300,863 ($714,135)
Sold:
2,500,000 AUD 8/12/99 1,653,406 (36,156)
2,512,000 DKK 10/06/99 360,784 6,146
9,675,000 EUR 8/10/99 10,300,863 768,478
1,000,000 GBP 10/06/99 1,609,200 4,800
506,000,000 GRD 10/21/99 1,616,665 5,390
580,000 NZD 8/12/99 324,613 (4,801)
CURRENCY ABBREVIATIONS
- --------------------------------------------------------------------------------
AUD Australian Dollar
CAD Canadian Dollar
DKK Danish Krone
EUR Euro
FIM Finnish Mark
GBP British Pound
GRD Greek Drachma
JPY Japanese Yen
NZD New Zealand Dollar
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) Affiliated issuer. (See Note 7 of Notes to Financial Statements.)
(f) Due to the restrictions imposed by the Malaysian government, these
securities have been deemed to be illiquid by the Advisor
and have been recorded at estimated fair value.
Percentages are stated as a percent of net assets.
See Notes to Financial Statements.
24
<PAGE>
<TABLE>
STATEMENTS OF ASSETS AND LIABILITIES
- ---------------------------------------------------------------------------------------------------------
April 30, 1999 (Unaudited)
<CAPTION>
(In Thousands, Except Per Share Amounts)
Strong Strong Strong
Asia Foreign International Strong
Pacific MajorMarkets Stock Overseas
Fund Fund Fund Fund
-------- ---------- ----------- ----------
ASSETS:
<S> <C> <C> <C> <C>
Investments in Securities, at Value
Unaffiliated Issuers (Cost of $36,305, $1,750,
$79,117 and $3,636, respectively) $42,480 $1,823 $ 92,228 $4,409
Affiliated Issuers ($0, $0, $635 and $0, respectively) -- -- 635 --
Receivable for Securities and Forward Foreign
Currency Contracts Sold 536 123 160 10
Receivable for Fund Shares Sold 95 -- -- --
Dividends and Interest Receivable 48 8 209 6
Other Assets 714 9 -- 1
------- ----- -------- ------
Total Assets 43,873 1,963 93,232 4,426
LIABILITIES:
Payable for Securities and Forward Foreign Currency
Contracts Purchased 1,987 68 710 35
Payable for Fund Shares Redeemed 60 -- 1,272 --
Accrued Operating Expenses and Other Liabilities 43 2 124 2
------- ----- -------- ------
Total Liabilities 2,090 70 2,106 37
------- ----- -------- ------
NET ASSETS $41,783 $1,893 $ 91,126 $4,389
======= ====== ======== ======
NET ASSETS CONSIST OF:
Capital Stock (par value and paid-in capital) $52,337 $1,743 $136,543 $3,872
Accumulated Net Investment Loss (316) (9) (1,077) (19)
Accumulated Net Realized Gain (Loss) (16,394) 84 (57,509) (241)
Net Unrealized Appreciation 6,156 75 13,169 777
------- -------- -------- ------
Net Assets $41,783 $1,893 $ 91,126 $4,389
======= ======== ======== ======
Capital Shares Outstanding (Unlimited Number Authorized) 5,336 174 8,763 384
NET ASSET VALUE PER SHARE $7.83 $10.86 $10.40 $11.42
===== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
Strong Global Strong Strong
High-Yield International Short-Term
Bond Fund Bond Fund Global
ASSETS: Bond Fund
------------ ------------- ---------
<S> <C> <C> <C>
Investments in Securities, at Value
(Cost of $1,524, $17,887 and $45,606, respectively) $1,544 $17,651 $45,093
Receivable for Securities and Forward Foreign Currency Contracts Sold 81 45 829
Receivable for Fund Shares Sold -- 41 43
Interest and Dividends Receivable 22 426 566
Other Assets 21 26 22
------ ------- -------
Total Assets 1,668 18,189 46,553
LIABILITIES:
Payable for Securities and Forward Foreign Currency Contracts Purchased -- 368 714
Payable for Fund Shares Redeemed -- 13 2
Dividends Payable 9 -- 258
Accrued Operating Expenses and Other Liabilities 18 16 19
------ ------- -------
Total Liabilities 27 397 993
------ ------- -------
NET ASSETS $1,641 $17,792 $45,560
====== ======= =======
NET ASSETS CONSIST OF:
Capital Stock (par value and paid-in capital) $2,011 $18,975 $48,921
Accumulated Net Investment Income (Loss) -- (497) 1,877
Accumulated Net Realized Loss (393) (234) (4,881)
Net Unrealized Appreciation (Depreciation) 23 (452) (357)
------ ------- -------
Net Assets $1,641 $17,792 $45,560
====== ======= =======
Capital Shares Outstanding (Unlimited Number Authorized) 172 1,663 4,425
NET ASSET VALUE PER SHARE $9.52 $10.70 $10.30
===== ====== ======
See Notes to Financial Statements.
25
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF OPERATIONS
- ---------------------------------------------------------------------------------------------------------
For the Six Months Ended April 30, 1999 (Unaudited) (In Thousands)
<CAPTION>
Strong Strong Strong
Asia Foreign International Strong
Pacific MajorMarkets Stock Overseas
Fund Fund Fund Fund
----------- ------------ ------------ -------
INCOME:
<S> <C> <C> <C> <C>
Dividends (net of withholding taxes
of $23, $2, $40 and $2, respectively) $ 165 $ 15 $ 430 $ 14
Interest 39 -- 67 5
------- ---- ------ ------
Total Income 204 15 497 19
EXPENSES:
Investment Advisory Fees 139 8 501 19
Custodian Fees 123 27 31 27
Shareholder Servicing Costs 102 3 256 6
Professional Fees 7 9 19 9
Reports to Shareholders 22 2 50 3
Federal and State Registration Fees 13 18 16 15
Other 19 1 31 --
------- ---- ------- ------
Total Expenses before Waivers and Absorptions 425 68 904 79
Involuntary Expense Waivers and Absorptions by Advisor (144) (52) -- (41)
------- ---- ------- ------
Expenses, Net 281 16 904 38
------- ---- ------- ------
NET INVESTMENT LOSS
(77) (1) (407) (19)
REALIZED AND UNREALIZED GAIN (LOSS):
Net Realized Gain (Loss) on:
Investments 2,670 94 3,758 357
Futures and Forward Foreign Currency Contracts (90) 17 -- --
Foreign Currencies (2) -- (7) --
------- ---- ------- ------
Net Realized Gain 2,578 111 3,751 357
Net Change in Unrealized Appreciation/Depreciation on:
Investments 8,255 150 12,244 719
Futures and Forward Foreign Currency Contracts 107 2 69 4
Foreign Currencies -- -- (10) --
------- ---- ------- ------
Net Change in Unrealized Appreciation/Depreciation 8,362 152 12,303 723
NET GAIN ON INVESTMENTS 10,940 263 16,054 1,080
------- ---- ------- ------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $10,863 $262 $15,647 $1,061
======= ==== ======= ======
See Notes to Financial Statements.
26
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF OPERATIONS (CONTINUED)
- --------------------------------------------------------------------------------------------------------------
For the Six Months Ended April 30, 1999 (Unaudited)
(In Thousands)
<CAPTION>
Strong Strong Strong
Global International Short-Term
High-Yield Bond Global
Bond Fund Fund Bond Fund
---------- ------------- ----------
Income:
<S> <C> <C> <C>
Interest (net of withholding taxes of $0, $0 and $1, respectively) $ 60 $ 682 $2,836
Dividends 7 -- --
---- ------ ------
Total Income 67 682 2,836
Expenses:
Investment Advisory Fees 6 68 208
Custodian Fees 5 19 15
Shareholder Servicing Costs 3 32 66
Professional Fees 5 7 8
Reports to Shareholders 2 5 13
Federal and State Registration Fees 15 13 15
Organization Expense 4 18 14
Other 1 2 3
---- ------ ------
Total Expenses before Waivers and Absorptions 41 164 342
Involuntary Expense Waivers and Absorptions by Advisor (25) -- --
---- ------ ------
Expenses, Net 16 164 342
---- ------ ------
Net Investment Income 51 518 2,494
Realized and Unrealized Gain (Loss):
Net Realized Gain (Loss) on:
Investments 35 47 (723)
Futures and Forward Foreign Currency Contracts 7 577 19
Foreign Currencies - 14 28
---- ------ ------
Net Realized Gain (Loss) 42 638 (676)
Net Change in Unrealized Appreciation/Depreciation on:
Investments 99 (914) (217)
Futures and Forward Foreign Currency Contracts 3 (1,159) 907
Foreign Currencies - (54) (43)
---- ------ ------
Net Change in Unrealized Appreciation/Depreciation 102 (2,127) 647
---- ------ ------
Net Gain (Loss) on Investments 144 (1,489) (29)
---- ------ ------
Net Increase (Decrease) in Net Assets Resulting from Operations $195 ($ 971) $2,465
==== ======= ======
See Notes to Financial Statements.
27
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
(In Thousands)
<CAPTION>
Strong Asia Strong Foreign
Pacific Fund MajorMarkets Fund
---------------------------------- ----------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
April 30, 1999 Oct. 31, 1998 April 30, 1999 Oct. 31, 1998
----------------- ------------- ----------------- --------------
(Unaudited) (Unaudited) (Note 1)
OPERATIONS:
<S> <C> <C> <C> <C>
Net Investment Income (Loss) ($ 77) $ 267 ($ 1) ($ 3)
Net Realized Gain (Loss) 2,578 (16,246) 111 (34)
Net Change in Unrealized Appreciation/Depreciation 8,362 9,279 152 (76)
------- ------- ------ -------
Net Increase (Decrease) in Net Assets Resulting from
Operations 10,863 (6,700) 262 (113)
Distributions:
From Net Investment Income -- (267) -- --
In Excess of Net Investment Income -- (84) -- --
------- ------- ------ -------
Total Distributions -- (351) -- --
Capital Share Transactions:
Proceeds from Shares Sold 48,067 52,969 1,213 1,990
Proceeds from Reinvestment of Distributions -- 335 -- --
Payment for Shares Redeemed (38,857) (54,629) (1,046) (413)
------- ------- ------ -------
Net Increase (Decrease) in Net Assets from Capital Share
Transactions 9,210 (1,325) 167 1,577
------- ------- ------ -------
Total Increase (Decrease) in Net Assets 20,073 (8,376) 429 1,464
Net Assets:
Beginning of Period 21,710 30,086 1,464 --
------ ------ ------ -------
End of Period $41,783 $21,710 $1,893 $1,464
======= ======= ====== =======
Transactions in Shares of the Fund:
Sold 7,368 9,078 123 203
Issued in Reinvestment of Distributions -- 50 -- --
Redeemed (6,027) (9,224) (106) (46)
----- ----- --- --
Net Increase (Decrease) in Shares of the Fund 1,341 (96) 17 157
===== ===== === ===
</TABLE>
<TABLE>
<CAPTION>
Strong International Strong
Stock Fund Overseas Fund
------------------------------ --------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
April 30, 1999 Oct. 31, 1998 April 30, 1999 Oct. 31, 1998
---------------- -------------- ----------------- -------------
(Unaudited) (Unaudited) (Note 1)
OPERATIONS:
<S> <C> <C> <C> <C>
Net Investment Loss ($ 407) ($ 70) ($ 19) ($ 7)
Net Realized Gain (Loss) 3,751 (60,196) 357 (686)
Net Change in Unrealized Appreciation/Depreciation 12,303 33,590 723 54
-------- -------- ------ ----
Net Increase (Decrease) in Net Assets Resulting from Operations 15,647 (26,676) 1,061 (639)
DISTRIBUTIONS:
From Net Investment Income (571) -- -- --
In Excess of Net Investment Income -- (3,779) -- --
From Net Realized Gains -- (3,501) -- --
-------- -------- ------ -------
Total Distributions (571) (7,280) -- --
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 84,487 116,828 5,388 4,935
Proceeds from Reinvestment of Distributions 554 7,097 -- --
Payment for Shares Redeemed (105,011) (174,055) (4,787) (1,569)
-------- -------- ------ ------
Net Increase (Decrease) in Net Assets from Capital Share
Transactions (19,970) (50,130) 601 3,366
-------- -------- ------ -------
TOTAL INCREASE (DECREASE) IN NET ASSETS (4,894) (84,086) 1,662 2,727
NET ASSETS:
Beginning of Period 96,020 180,106 2,727 --
-------- -------- ------ ------
End of Period $ 91,126 $ 96,020 4,389 2,727
======== ======== ====== =======
TRANSACTIONS IN SHARES OF THE FUND:
Sold 8,469 11,039 500 516
Issued in Reinvestment of Distributions 56 655 -- --
Redeemed (10,491) (15,984) (448) (184)
------ ------ ---- ---
Net Increase (Decrease) in Shares of the Fund (1,966) (4,290) 52 332
====== ====== == ===
See Notes to Financial Statements
28
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
(In Thousands)
Strong Global Strong International
High-Yield Bond Fund Bond Fund
------------------------------ ------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
April 30, 1999 Oct. 31, 1998 April 30, 1999 Oct. 31, 1998
------------------------------ -------------------------------
(Unaudited) (Note 1) (Unaudited)
OPERATIONS:
<S> <C> <C> <C> <C>
Net Investment Income $ 51 $ 255 $ 518 $ 1,179
Net Realized Gain (Loss) 42 (435) 638 (940)
Net Change in Unrealized Appreciation/Depreciation 102 (79) (2,127) 1562
------ ------- ------- -------
Net Increase (Decrease) in Net Assets Resulting from Operations 195 (259) (971) 1,801
DISTRIBUTIONS:
From Net Investment Income (51) (255) (1,076) (1,288)
In Excess of Net Realized Gains -- -- -- (579)
------ ------- ------- -------
Total Distributions (51) (255) (1,076) (1,867)
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 905 10,304 6,549 11,254
Proceeds from Reinvestment of Distributions 43 215 995 1,719
Payment for Shares Redeemed (973) (8,483) (7,864) (20,952)
---- ------ ------ -------
Net Increase (Decrease) in Net Assets from Capital Share Transactions (25) 2,036 (320) (7,979)
--- ----- ---- ------
Total Increase (Decrease) in Net Assets 119 1,522 (2,367) (8,045)
NET ASSETS:
Beginning of Period 1,522 -- 20,159 28,204
----- ------ ------
End of Period $1,641 $ 1,522 $17,792 $20,159
====== ======= ======= =======
TRANSACTIONS IN SHARES OF THE FUND:
Sold 99 1,023 583 1,025
Issued in Reinvestment of Distributions 5 22 89 164
Redeemed (106) (870) (704) (1,930)
---- ---- ---- ------
Net Increase (Decrease) in Shares of the Fund (2) 175 (32) (741)
== === === ====
</TABLE>
<TABLE>
Strong Short-Term
<CAPTION> Global Bond Fund
---------------------------
Six Months Ended Year Ended
April 30, 1999 Oct. 31, 1998
--------------- ------------
(Unaudited)
OPERATIONS:
<S> <C> <C>
Net Investment Income $ 2,494 $ 5,363
Net Realized Loss (676) (3,115)
Net Change in Unrealized Appreciation/Depreciation 647 1,414
------- --------
Net Increase in Net Assets Resulting from Operations 2,465 3,662
DISTRIBUTIONS:
From Net Investment Income (1,734) (5,363)
In Excess of Net Investment Income -- (281)
From Net Realized Gains -- (778)
------- --------
Total Distributions (1,734) (6,422)
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 10,722 49,328
Proceeds from Reinvestment of Distributions 1,751 6,320
Payment for Shares Redeemed (43,047) (93,209)
------- -------
Net Decrease in Net Assets from Capital Share Transactions (30,574) (37,561)
------- --------
TOTAL DECREASE IN NET ASSETS (29,843) (40,321)
NET ASSETS:
Beginning of Period 75,403 115,724
------- --------
End of Period $45,560 $ 75,403
======= ========
TRANSACTIONS IN SHARES OF THE FUND:
Sold 1,048 4,741
Issued in Reinvestment of Distributions 171 608
Redeemed (4,212) (8,972)
------ ------
Net Decrease in Shares of the Fund (2,993) (3,623)
====== ======
See Notes to Financial Statements. 29
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
April 30, 1999 (Unaudited)
1. ORGANIZATION
The accompanying financial statements represent the Strong International
Funds (the "Funds"), which include the following funds, each with its own
investment objectives and policies:
_ Strong Asia Pacific Fund, Inc. (1) (2)
_ Strong Foreign MajorMarkets Fund(2) (a series of Strong International
Equity Funds, Inc.(1))
_ Strong International Stock Fund(2) (a series of Strong International
Equity Funds,Inc.(1))
_ Strong Overseas Fund(2)(a series of Strong International Equity Funds,
Inc.(1))
_ Strong Global High-Yield Bond Fund(3) (a series of Strong
International Income Funds, Inc.(1)
_ Strong International Bond Fund(3) (a series of Strong International
Income Funds, Inc.(1))
_ Strong Short-Term Global Bond Fund, Inc.(1) (2)
(1) An open-end management investment company registered under the
Investment Company Act of 1940.
(2) Diversified fund
(3) Non-diversified fund
The inception date for Strong Global High-Yield Bond Fund is January 31,
1998. The inception date for Strong Foreign MajorMarkets Fund and Strong
Overseas Fund is June 30, 1998.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Funds in the preparation of their financial statements.
(A) Security Valuation -- Portfolio securities traded primarily on a
principal securities exchange are valued at the last reported sales
price or the mean between the latest bid and asked prices where no
last sales price is available. Securities traded over-the-counter are
valued at the mean of the latest bid and asked prices or at the last
reported sales price. Debt securities not traded on a principal
securities exchange are valued through valuations obtained from a
commercial pricing service, otherwise sale or bid prices are used.
Securities for which market quotations are not readily available, are
valued at fair value as determined in good faith under consistently
applied procedures established by and under the general supervision of
the Board of Directors. Securities which are purchased within 60 days
of their stated maturity are valued at amortized cost, which
approximates fair value.
The Funds may own certain investment securities which are restricted
as to resale. These securities are valued after giving due
consideration to pertinent factors including recent private sales,
market conditions and the issuer's financial performance. The Funds
generally bear the costs, if any, associated with the disposition of
restricted securities. Aggregate cost and fair value of these
restricted securities held at April 30, 1999 were as follows:
<TABLE>
<CAPTION>
Aggregate Aggregate Percent of
Cost Fair Value Net Assets Liquid*
---------- ---------- ------------ -------
<S> <C> <C> <C> <C>
Strong Asia Pacific Fund $ 854,446 $ 912,243 2.2% 90.9%
Strong International Stock Fund 1,728,052 1,634,265 1.8% 61.1%
Strong Overseas Fund 32,438 48,093 1.1% 100.0%
Strong Global High-Yield Bond Fund 156,859 158,473 9.7% 99.6%
Strong International Bond Fund 792,221 784,434 4.4% 100.0%
Strong Short-Term Global Bond Fund 5,412,148 5,243,795 11.5% 100.0%
</TABLE>
* Percentage of restricted securities which are either Section
4(2)commercial paper or are eligible for resale pursuant to Rule
144A under the Securities Act of 1933 and also have been determined
to be liquid by the Advisor based upon guidelines established
by the Funds'Board of Directors.
(B) Federal Income and Excise Taxes and Distributions to Shareholders --
The Funds intend to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to
distribute substantially all of their taxable income to their
shareholders in a manner which results in no tax cost to the Funds.
Therefore, no Federal income or excise tax provision is required.
The character of distributions made during the year from net
investment income or net realized gains for financial statement
purposes may differ from the characterization for federal income tax
purposes due to differences in the recognition of income and expense
items for financial statement and tax purposes. Where appropriate,
reclassifications between net asset accounts are made for such
differences that are permanent in nature.
Strong Global High-Yield Bond Fund and Strong Short-Term Global Bond
Fund pay dividends from net investment income monthly, Strong
International Bond Fund pays dividends from net investment income
quarterly, and Strong Asia Pacific Fund, Strong Foreign MajorMarkets
Fund, Strong International Stock Fund and Strong Overseas Fund pay
dividends from net investment income annually. The funds distribute
any net realized capital gains annually. Strong Global High-Yield Bond
Fund and Strong Short-Term Global Bond Fund declare dividends on each
day the net asset value is calculated, except for bank holidays.
30
<PAGE>
- --------------------------------------------------------------------------------
(C) Realized Gains and Losses on Investment Transactions -- Investment
security transactions are recorded as of the trade date. Gains or
losses realized on investment transactions are determined by comparing
the identified cost of the security lot sold with the net sales
proceeds.
(D) Certain Investment Risks -- The Funds may utilize derivative
instruments including options, futures and other instruments with
similar characteristics to the extent that they are consistent with
the 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.
Investments in foreign denominated assets or forward currency
contracts may involve greater risks than domestic investments,
including currency, political and economic, regulatory and market
risks.
(E) Futures -- Upon entering into a futures contract, the Funds pledge to
the broker cash or other investments equal to the minimum "initial
margin" requirements of the exchange. Additional securities held by
the Funds may be designated as collateral on open futures contracts.
The Funds also receive from or pay to the broker an amount of cash
equal to the daily fluctuation in the value of the contract. Such
receipts or payments are known as "variation margin," and are recorded
as unrealized gains or losses. When the futures contract is closed, a
realized gain or loss is recorded equal to the difference between the
value of the contract at the time it was opened and the value at the
time it was closed.
(F) 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.
(G) 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.
(H) 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.
(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 in these financial statements. Actual results could differ
from those estimates.
(J) Other -- Dividend income and distributions to shareholders are
recorded on the ex-dividend date. Interest income is recorded on the
accrual basis and includes amortization of premiums and discounts.
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, Strong Foreign MajorMarkets
Fund, Strong International Stock Fund and Strong Overseas 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%. Based on the terms of
the Advisory Agreements, advisory fees and other expenses will be waived by
the Advisor if the Fund's operating expenses exceed 2% of the average daily
net assets of the Fund. In addition, the Fund's Advisor may voluntarily
waive or absorb certain expenses at their discretion. Shareholder
recordkeeping and related service fees are based on contractually
established rates for each open and closed shareholder account. The Advisor
is compensated for certain other services related to costs incurred for
reports to shareholders.
The Funds may invest cash in money market funds sponsored and managed by
the Advisor, subject to certain limitations. The terms of such transactions
are identical to those of non-related entities except that, to avoid
duplicate investment advisory fees, advisory fees of each Fund are reduced
by an amount equal to advisory fees paid to the Advisor under its
investment advisory agreement with the money market funds.
31
<PAGE>
NOTES TO FINANCIAL STATMENTS (Continued)
- --------------------------------------------------------------------------------
April 30, 1999 (Unaudited)
Certain information regarding related party transactions, excluding the
effect of waivers and absorptions, for the six months ended April 30, 1999
is as follows:
<TABLE>
<CAPTION>
Shareholder
Payable to Servicing and Other Unaffiliated
Advisor at Expenses Paid Directors'
April 30, 1999 to Advisor Fees
---------------- ------------------- --------------
<S> <C> <C> <C>
Strong Asia Pacific Fund $1,609 $100,618 $750
Strong Foreign MajorMarkets Fund -- 1,308 775
Strong International Stock Fund 17,352 256,619 1,107
Strong Overseas Fund -- 4,535 775
Strong Global High-Yield Bond Fund 14,676 1,966 750
Strong International Bond Fund 4,001 31,352 750
Strong Short-Term Global Bond Fund 5,391 63,910 750
</TABLE>
The Advisor owns 60.2% and 52.4% of Strong Foreign MajorMarkets Fund and
Strong Overseas Fund, respectively.
4. LINE OF CREDIT
The Strong Funds have established a line of credit agreement ("LOC") with
certain financial institutions to be used for temporary or emergency
purposes, primarily for financing redemption payments. Combined borrowings
among all participating Strong Funds are subject to a $350 million cap on
the total line of credit. For individual funds, borrowings under the LOC
are limited to either the lesser of 15% of the market value of total assets
or any explicit borrowing limits in the Funds' prospectus. Borrowings under
the LOC bear interest based on prevailing market rates as defined in the
LOC. A commitment fee of .07% per annum is incurred on the unused portion
of the line of credit and is allocated to all participating Strong Funds.
At April 30, 1999, there were no borrowings by the Strong Funds outstanding
under the LOC.
5. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of long-term securities for the six
months ended April 30, 1999 were as follows:
<TABLE>
<CAPTION>
Purchases Sales
------------------------------ ---------------------------------
U.S. Government U.S. Government
and Agency Other and Agency Other
------------- ----------- ----------------- ------------
<S> <C> <C> <C> <C>
Strong Asia Pacific Fund $ ___ $31,318,938 $ ___ 23,631,051
Strong Foreign MajorMarkets Fund ___ 403,304 ___ 503,601
Strong International Stock Fund ___ 56,715,514 ___ 74,251,723
Strong Overseas Fund ___ 3,453,305 ___ 2,879,314
Strong Global High-Yield Bond Fund ___ 3,619,390 ___ 3,628,029
Strong International Bond Fund ___ 1,646,972 511,719 2,287,032
Strong Short-Term Global Bond Fund 1,476,165 18,581,045 9,372,814 40,658,313
</TABLE>
6. INCOME TAX INFORMATION
The investment cost, gross unrealized appreciation and depreciation on
investments and capital loss carryovers (expiring in varying amounts
through 2006) for federal income tax purposes were as follows:
<TABLE>
<CAPTION>
at April 30, 1999 at October 31, 1998
--------------------------------------------------------------------------------
Federal Tax Unrealized Unrealized Net Appreciation Net Capital Loss
Cost Appreciation Depreciation (Depreciation) Carryovers
----------- ------------- ----------- --------------- -----------------
<S> <C> <C> <C> <C> <C>
Strong Asia Pacific Fund $36,614,265 $ 7,270,463 $1,404,313 $ 5,866,150 $18,476,100
Strong Foreign MajorMarkets Fund 1,760,796 164,147 102,239 61,908 15,990
Strong International Stock Fund 80,681,025 17,081,137 4,899,326 12,181,811 59,220,773
Strong Overseas Fund 3,695,729 793,515 80,239 713,276 493,445
Strong Global High-Yield Bond Fund 1,532,723 51,303 40,069 11,234 426,285
Strong International Bond Fund 17,886,712 368,319 603,603 (235,284) 871,161
Strong Short-Term Global Bond Fund 45,606,863 428,332 941,839 (513,507) 4,205,020
</TABLE>
7. INVESTMENTS IN AFFILIATES
Affiliated issuers, as defined under the Investment Company Act of 1940,
include those in which the Fund's holdings represent 5% or more of the
outstanding voting securities of the issuer, and any other Strong Fund. A
summary of transactions in the securities of these issuers during the six
months ended April 30, 1999 is as follows:
<TABLE>
<CAPTION>
Balance of Balance of Dividend
Shares Held Gross Gross Sales Shares Held Value Income Realized
November 1, Purchases and April 30, April 30, Nov. 1, 1998- Gain
1998 and Additions Reductions 1999 1999 April 30, 1999 (Loss) on Sale
----------- ------------- ----------- ------------ -------- ------------- ---------------
Strong International Stock Fund
<S> <C> <C> <C> <C> <C> <C> <C>
Connemara Green Marble Quarries PLC 50,800 __ __ 50,800 $635,000 __ __
Connemara Green Marble Quarries PLC
Warrants 8,000 __ __ 8,000 __ __ __
</TABLE>
32
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
- -----------------------------------------------------------------------------------------------------------------------
STRONG ASIA PACIFIC FUND
- -----------------------------------------------------------------------------------------------------------------------
<CAPTION>
Period Ended
------------------------------------------------------
April 30, Oct. 31, Oct. 31, Oct. 31, Oct. 31, Dec. 31,
Selected Per-Share Data(a) 1999(b) 1998 1997 1996 1995(d) 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $5.43 $7.35 $9.51 $9.55 $9.35 $10.00
Income From Investment Operations
Net Investment Income (Loss) (0.00)(c) 0.07 0.01 0.06 0.04 0.05
Net Realized and Unrealized Gains (Losses) on Investments 2.40 (1.90) (2.01) 0.31 0.20 (0.57)
- -----------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 2.40 (1.83) (2.00) 0.37 0.24 (0.52)
Less Distributions
From Net Investment Income -- (0.07) (0.01) (0.06) (0.03) (0.01)
In Excess of Net Investment Income -- (0.02) (0.03) (0.35) (0.01) --
From Net Realized Gains -- -- (0.10) -- -- --
In Excess of Net Realized Gains -- -- (0.02) -- -- (0.12)
- -----------------------------------------------------------------------------------------------------------------------
Total Distributions -- (0.09) (0.16) (0.41) (0.04) (0.13)
- -----------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $7.83 $5.43 $7.35 $9.51 $9.55 $9.35
=======================================================================================================================
Ratios and Supplemental Data
- -----------------------------------------------------------------------------------------------------------------------
Total Return +44.2% -25.1% -21.5% +3.8% +2.6% -5.3%
Net Assets, End of Period (In Millions) $42 $22 $30 $72 $55 $58
Ratio of Expenses to Average Net Assets 2.0%* 2.0% 2.0% 2.0% 2.0%* 2.0%
Ratio of Net Investment Income (Loss) to Average Net Assets (0.6%)* 1.1% 0.1% 0.2% 0.5%* 0.6%
Portfolio Turnover Rate 89.3% 192.9% 96.7% 91.4% 104.3% 103.3%
</TABLE>
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund
outstanding for the entire period.
(b) For the six months ended April 30, 1999 (unaudited).
(c) Amount calculated is less than $0.01.
(d) In 1995, the Fund changed its fiscal year-end from December to October.
<TABLE>
STRONG FOREIGN MAJORMARKETS FUND
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
Period Ended
----------------------------
April 30, Oct. 31,
Selected Per-Share Data(a) 1999(b) 1998(d)
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period $ 9.31 $10.00
Income From Investment Operations
Net Investment Loss (0.00)(c) (0.01)
Net Realized and Unrealized Gains (Losses) on Investments 1.55 (0.68)
- -----------------------------------------------------------------------------------------
Total from Investment Operations 1.55 (0.69)
Less Distributions
From Net Investment Income -- --
- -----------------------------------------------------------------------------------------
Total Distributions -- --
- -----------------------------------------------------------------------------------------
Net Asset Value, End of Period $10.86 $ 9.31
=========================================================================================
Ratios and Supplemental Data
- -----------------------------------------------------------------------------------------
Total Return +16.7% -6.9%
Net Assets, End of Period (In Millions) $2 $1
Ratio of Expenses to Average Net Assets 2.0%* 2.0%*
Ratio of Net Investment Loss to Average Net Assets (0.1%)* (0.5%)*
Portfolio Turnover Rate 27.8% 16.5%
</TABLE>
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund
outstanding for the entire period.
(b) For the six months ended April 30, 1999 (unaudited).
(c) Amount calculated is less than $0.01.
(d) For the period from June 30, 1998 (inception) to October 31, 1998.
See Notes to Financial Statements.
33
<TABLE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- -----------------------------------------------------------------------------------------------------------------------------
STRONG INTERNATIONAL STOCK FUND
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Period Ended
-----------------------------------------------------------------
April 30, Oct. 31, Oct. 31, Oct. 31, Oct. 31, Dec. 31,
Selected Per-Share Data(a) 1999(b) 1998 1997 1996 1995(d) 1994
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 8.95 $11.99 $13.75 $13.03 $12.65 $14.18
Income From Investment Operations
Net Investment Income (Loss) (0.06) 0.00(c) 0.01 0.17 0.08 0.06
Net Realized and Unrealized Gains (Losses) on Investments 1.57 (2.48) (0.69) 1.11 0.37 (0.27)
- ----------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 1.51 (2.48) (0.68) 1.28 0.45 (0.21)
Less Distributions
From Net Investment Income (0.06) (0.00)(c) (0.01) (0.18) (0.07) (0.01)
In Excess of Net Investment Income -- (0.30) (0.26) (0.38) -- --
From Net Realized Gains -- (0.26) (0.81) -- -- (1.25)
In Excess of Net Realized Gains -- -- -- -- -- (0.06)
- ----------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.06) (0.56) (1.08) (0.56) (0.07) (1.32)
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $10.40 $ 8.95 $11.99 $13.75 $13.03 $12.65
=============================================================================================================================
Ratios and Supplemental Data
- ----------------------------------------------------------------------------------------------------------------------------
Total Return +16.9% -21.4% -5.7% +9.8% +3.6% -1.6%
Net Assets, End of Period (In Millions) $91 $96 $180 $304 $211 $258
Ratio of Expenses to Average Net Assets 1.8%* 1.9% 1.6% 1.7% 1.8%* 1.7%
Ratio of Net Investment Income (Loss) to Average Net Assets (0.8%)* (0.1%) 0.5% 0.6% 0.8%* 0.3%
Portfolio Turnover Rate 57.5% 228.2% 143.7% 108.6% 102.0% 136.5%
</TABLE>
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund
outstanding for the entire period.
(b) For the six months ended April 30, 1999 (unaudited).
(c) Amount calculated is less than $0.01.
(d) In 1995, the Fund changed its fiscal year-end from December to October.
<TABLE>
STRONG OVERSEAS FUND
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Period Ended
--------------------------
April 30, Oct. 31,
Selected Per-Share Data(a) 1999(b) 1998(c)
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period $ 8.20 $10.00
Income From Investment Operations
Net Investment Loss (0.05) (0.02)
Net Realized and Unrealized Gains (Losses) on Investments 3.27 (1.78)
- --------------------------------------------------------------------------------------
Total from Investment Operations 3.22 (1.80)
Less Distributions
From Net Investment Income -- --
- --------------------------------------------------------------------------------------
Total Distributions -- --
- --------------------------------------------------------------------------------------
Net Asset Value, End of Period $11.42 $ 8.20
=======================================================================================
Ratios and Supplemental Data
- ---------------------------------------------------------------------------------------
Total Return +39.3% -18.0%
Net Assets, End of Period (In Millions) $4 $3
Ratio of Expenses to Average Net Assets 2.0%* 2.0%*
Ratio of Net Investment Loss to Average Net Assets (1.0%)* (0.7%)*
Portfolio Turnover Rate 80.6% 59.5%
</TABLE>
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund
outstanding for the entire period.
(b) For the six months ended April 30, 1999 (unaudited).
(c) For the period from June 30, 1998 (inception) to October 31, 1998.
See Notes to Financial Statements.
34
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- -----------------------------------------------------------------------------------------
STRONG GLOBAL HIGH-YIELD BOND FUND
- -----------------------------------------------------------------------------------------
<CAPTION>
Period Ended
-----------------------
April 30, Oct. 31,
Selected Per-Share Data(a) 1999(b) 1998(c)
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period $8.71 $10.00
Income From Investment Operations
Net Investment Income 0.28 0.53
Net Realized and Unrealized Gains (Losses) on Investments 0.81 (1.29)
- -----------------------------------------------------------------------------------------
Total from Investment Operations 1.09 (0.76)
Less Distributions
From Net Investment Income (0.28) (0.53)
- -----------------------------------------------------------------------------------------
Total Distributions (0.28) (0.53)
- -----------------------------------------------------------------------------------------
Net Asset Value, End of Period $9.52 $ 8.71
=========================================================================================
Ratios and Supplemental Data
- -----------------------------------------------------------------------------------------
Total Return +12.7% -8.0%
Net Assets, End of Period (In Millions) $2 $2
Ratio of Expenses to Average Net Assets 2.0%* 2.0%*
Ratio of Net Investment Income to Average Net Assets 6.2%* 7.2%*
Portfolio Turnover Rate 264.8% 680.3%
</TABLE>
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund
outstanding for the entire period.
(b) For the six months ended April 30, 1999 (unaudited).
(c) For the period from January 31, 1998 (inception) to October 31, 1998.
<TABLE>
STRONG INTERNATIONAL BOND FUND
- --------------------------------------------------------------------------------------------------------
<CAPTION>
Period Ended
-----------------------------------------------------------
April 30, Oct. 31, Oct. 31, Oct. 31, Oct. 31, Dec. 31,
Selected Per-Share Data(a) 1999(b) 1998 1997 1996 1995(c) 1994(d)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $11.89 $11.58 $11.87 $11.48 $10.36 $10.00
Income From Investment Operations
Net Investment Income 0.31 0.57 1.03 0.80 0.78 0.46
Net Realized and Unrealized Gains (Losses) on Investments (0.85) 0.58 (1.11) 0.15 1.00 0.40
- --------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (0.54) 1.15 (0.08) 0.95 1.78 0.86
Less Distributions
From Net Investment Income (0.65) (0.58) (0.20) (0.50) (0.66) (0.46)
In Excess of Net Investment Income -- -- -- -- -- (0.02)
From Net Realized Gains -- -- -- (0.06) -- --
In Excess of Net Realized Gains -- (0.26) (0.01) -- -- (0.02)
- --------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.65) (0.84) (0.21) (0.56) (0.66) (0.50)
- --------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $10.70 $11.89 $11.58 $11.87 $11.48 $10.36
==========================================================================================================================
Ratios and Supplemental Data
- --------------------------------------------------------------------------------------------------------------------------
Total Return -4.8% +10.9% -0.7% +8.6% +17.3% +8.7%
Net Assets, End of Period (In Millions) $18 $20 $28 $31 $21 $10
Ratio of Expenses to Average Net Assets without Waivers
and Absorptions 1.7%* 1.6% 1.5% 1.8% 2.0%* 2.0%*
Ratio of Expenses to Average Net Assets 1.7%* 1.5% 0.7% 0.0% 0.0%* 0.0%*
Ratio of Net Investment Income to Average Net Assets 5.5%* 5.3% 8.1% 7.4% 8.3%* 7.9%*
Portfolio Turnover Rate 9.8% 158.8% 208.4% 258.3% 473.3% 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, 1999 (unaudited).
(c) In 1995, the Fund changed its fiscal year-end from December to October.
(d) For the period from March 31, 1994 (inception) to December 31, 1994.
35
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
STRONG SHORT-TERM GLOBAL BOND FUND
- ------------------------------------------------------------------------------------------------------------------------
Period Ended
---------------------------------------------------------
April 30, Oct. 31, Oct. 31, Oct. 31, Oct. 31, Dec. 31,
Selected Per-Share Data(a) 1999(b) 1998 1997 1996 1995(c) 1994(d)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $10.17 $10.48 $10.74 $10.46 $10.15 $10.00
Income From Investment Operations
Net Investment Income 0.56 0.60 0.81 0.71 0.65 0.35
Net Realized and Unrealized Gains (Losses) on Investments (0.14) (0.21) (0.10) 0.34 0.20 0.16
- ------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.42 0.39 0.71 1.05 0.85 0.51
Less Distributions
From Net Investment Income (0.29) (0.59) (0.85) (0.77) (0.54) (0.35)
In Excess of Net Investment Income -- (0.03) (0.12) -- -- --
From Net Realized Gains -- (0.08) -- -- -- --
In Excess of Net Realized Gains -- -- -- -- -- (0.01)
- ------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.29) (0.70) (0.97) (0.77) (0.54) (0.36)
- ------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $10.30 $10.17 $10.48 $10.74 $10.46 $10.15
=======================================================================================================================
Ratios and Supplemental Data
- -------------------------------------------------------------------------------------------------------------------------
Total Return +4.2% +3.8% +6.8% +10.4% +8.5% +5.1%
Net Assets, End of Period (In Millions) $46 $75 $116 $71 $25 $20
Ratio of Expenses to Average Net Assets without Waivers
and Absorptions 1.1%* 1.0% 1.0% 1.5% 2.0%* 1.7%*
Ratio of Expenses to Average Net Assets 1.1%* 0.9% 0.7% 0.0% 0.0%* 0.0%*
Ratio of Net Investment Income to Average Net Assets 8.0%* 5.7% 7.6% 7.4% 8.2%* 7.7%*
Portfolio Turnover Rate 34.4% 145.2% 168.0% 179.7% 437.3% 287.8%
* Calculated on an annualized basis.
</TABLE>
(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, 1999 (unaudited).
(c) In 1995, the Fund changed its fiscal year-end from December to October.
(d) For the period from March 31, 1994 (inception) to December 31, 1994.
See Notes to Financial Statements.
36
<PAGE>
<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 W. Widmer, Treasurer
INVESTMENT ADVISOR
Strong Capital Management, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
DISTRIBUTOR
Strong Investments, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
CUSTODIAN
Firstar Bank Milwaukee, N.A.
P.O. Box 701, Milwaukee, Wisconsin 53201
TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT
Strong Capital Management, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
100 East Wisconsin Avenue, Milwaukee, Wisconsin 53202
LEGAL COUNSEL
Godfrey & Kahn, S.C.
780 North Water Street, Milwaukee, Wisconsin 53202
<PAGE>
For a prospectus containing more complete information, including management fees
and expenses, please call 1-800-368-1030. Please read it carefully before
investing or sending money. This report does not constitute an offer for the
sale of securities. Strong Funds are offered for sale by prospectus only.
[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. 11910F99 SINT
<
<PAGE>
