<PAGE>
[PHOTO OF A WOMAN AND 3 KIDS] [LOGO]
THE STRONG
INTERNATIONAL
FUNDS
- --------------------------------------------------------------------------------
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
ANNUAL REPORT - OCTOBER 31, 1999
<PAGE>
LETTER FROM THE CHAIRMAN
Dear Strong Investor,
The year was 1966. Lyndon B. Johnson was president, the Green Bay Packers were
headed for yet another NFL title, and I had just landed my first job in the
investment business. I was full of raw energy and exuberance and figured life
couldn't get much better. But it did--and fast. My first day on the job, the Dow
Jones Industrial Average crossed 1,000 for the first time in history. Even
though I was greener than grass, I knew that was BIG!
And now, almost 34 years later, it looks like the Dow will finish 1999 somewhere
above 11,000. A far cry from where the market was when I started in the
business. If you had told me back then that a massive bull market would start
running from around the 800-point mark in 1982, and that it would still be
roaring at the turn of the century, I would have given you a bewildered look.
That's not to say there haven't been plenty of bumps and bruises along the way.
I think we're still feeling the residual effects of the Vietnam War. We also
lived through 1973-74 when the stock market dropped 48%--not to mention the
dangerously high inflation and the rust bowl of the late 1970s, and the market
crash of October 1987.
But, mostly, it's been remarkably smooth sailing. The numbers tell the story
better than any words: The Dow has been increasing at an annual rate of 11.5%
since 1966. But, starting in 1982 it has been compounding at an astounding rate
of 19.0% per year. During the 1990s, inflation has averaged a modest 2.4%. As
the son of Depression Era parents, I can tell you that we have enjoyed the sort
of prosperity that the young people I grew up with didn't dare dream of.
Through thick and thin, however, one lesson sticks with me: In the investment
business, everything is cyclical. By all means, enjoy the good times, but bear
in mind that nothing--not even this bull market--will last forever. Boom
followed by economic correction is the nature of free enterprise. History has
proven that time and time again.
Since I started in the investment business, I've observed two significant
changes that have directly affected the investment world. First, people are
living much longer and healthier lives. Second, government and corporations have
gradually been shifting the financial responsibility for retirement directly
onto the shoulders of the individual. This phenomenon created new savings
vehicles such as IRAs and 401(k) plans. The fact that each of us will be
responsible for the financing of our own retirement is an awesome
responsibility. In truth, it's a job few of us have the training, aptitude, or
time to do well.
A long-term perspective is essential as you invest your precious retirement
money. A portfolio sensibly balanced between stocks and bonds should provide the
financial wherewithal for a long and financially viable retirement.
/s/ Dick
<PAGE>
THE STRONG
INTERNATIONAL
FUNDS
--------------
ANNUAL REPORT - OCTOBER 31, 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..............................18
The Strong Overseas Fund.........................................19
The Strong Global High-Yield Bond Fund...........................20
The Strong International Bond Fund...............................21
The Strong Short-Term Global Bond Fund...........................22
Statements of Assets and Liabilities.................................25
Statements of Operations.............................................27
Statements of Changes in Net Assets..................................29
Notes to Financial Statements........................................33
FINANCIAL HIGHLIGHTS......................................................37
REPORT OF INDEPENDENT ACCOUNTANTS.........................................40
<PAGE>
THE STRONG ASIA PACIFIC FUND
----------------------------
PERSPECTIVES
FROM THE MANAGER
/s/ Anthony Cragg
Anthony Cragg
Portfolio Manager
- --------------------------------------------------------------------------------
We regard most of the problems that have hampered Asian markets in recent months
as little more than bumps on the road to recovery. Some of these troubles are
lingering negative aftereffects from Asia's previous decline. We are confident
these effects will be superseded by much larger and longer-term positives over
time.
We are therefore as confident as before that what we have seen so far is merely
the first phase of a multi-phased bull market in Asia. A "virtuous cycle" now
appears to be largely in place in Asia, in which the recovery of one part of the
economy is leading to recovery in another part, and so on. We believe the
economic fundamentals will catch up with the stock price increases and will
support further strong advances.
With regard to stock selection, the value-based, bargain-hunting approach that
has worked well in the first phase of the region's recovery is gradually giving
way to a more traditional growth strategy. This is a direction that was to be
expected and even welcomed, as it signals the beginning of the return of the
growth for which Asia was long famous. Nevertheless, we anticipate that a broad
spectrum of new investment opportunities will continue to emerge, as Asia
regains its place as the most exciting and rewarding investment region in the
world.
---------------------------
A "VIRTUOUS CYCLE"
NOW APPEARS
TO BE LARGELY
IN PLACE IN ASIA...
---------------------------
- --------------------------------------------------------------------------------
[SIDENOTE]
FUND
HIGHLIGHTS
- For the 12 months ended October 31, 1999, the Fund posted a return of
77.16%. By comparison, the MSCI Asia Pacific Free ex. Japan Index was up
39.83% for the same period.*
- The Fund's outperformance was achieved partly through our increased
weighting in strong-performing countries such as Japan and Singapore. Stock
selection, however, was a bigger driver, as a number of our less-widely
held names, both large and small, did even better than the more obvious
index counters.
- Another important strategy that has helped the Fund during a year of
dramatic recovery in Asian markets has been our early and wholehearted
commitment to that region's recovery.
- --------------------------------------------------------------------------------
[SIDENOTE]
AVERAGE ANNUAL
TOTAL RETURNS
AS OF 10-31-99
1-year 77.16%
3-year 1.38%
5-year 0.67%
Since Inception 0.85%
(on 12-31-93)
----------------------------------------------------------------------
[SIDENOTE]
FIVE LARGEST
INVESTMENTS BY COUNTRY
BASED ON NET ASSETS AS OF 10-31-99
<TABLE>
<CAPTION>
COUNTRY % OF NET ASSETS
- ----------------------------------------------------------------------
<S> <C>
Japan 26.2%
Australia 15.5%
Singapore 7.6%
New Zealand 5.2%
Hong Kong 5.0%
</TABLE>
Please see the Schedule of Investments in Securities for a complete
listing of the Fund's portfolio.
- --------------------------------------------------------------------------------
2
<PAGE>
The seven most heavily weighted countries in the portfolio are, in order, Japan,
Australia, Singapore, New Zealand, Hong Kong, Thailand, and India. As for the
Fund's sector weightings, no single sector dominates, and for that matter none
takes up more than 10% of assets. This allows the Fund to benefit from advances
in a broad range of industries. Some of the Fund's biggest gainers have been in
the software and Internet sector, where holdings include Softbank in Japan,
Solution Six and Liberty One in Australia, and Haansoft in Korea. Financial
holdings have also contributed to performance, including Nomura and JAFCO in
Japan and DBS in Singapore. Strong performers in telecommunications include
China Telecom and India's VSNL. Electronics outperformers include Johnson
Electric in Hong Kong and Samsung Electronics in Korea. Additional stocks aiding
performance are Singapore Airlines, Malaysian gaming firm Berjaya Sports Toto,
and Hong Kong's South China Morning Post.
We thank you for your investment in the Strong Asia Pacific Fund. We appreciate
the confidence you've put in us and look forward to working with you during an
exciting period for this region.
GROWTH OF AN ASSUMED $10,000 INVESTMENT
FROM 12-31-93 TO 10-31-99
[GRAPH]
<TABLE>
<CAPTION>
THE STRONG ASIA Lipper Pacific Region
PACIFIC FUND MSCI AP* Funds Index*
--------------- -------- ---------------------
<S> <C> <C> <C>
12-93 $10,000 $10,000 $10,000
12-94 $9,473 $8,772 $9,475
12-95 $10,035 $9,305 $9,729
12-96 $10,246 $10,388 $9,994
12-97 $7,071 $6,835 $7,278
12-98 $6,849 $6,533 $7,064
10-99 $10,508 $8,397 $10,312
</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
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.
- --------------------------------------------------------------------------------
[SIDENOTE]
YOUR FUND'S
APPROACH
THE STRONG ASIA PACIFIC FUND INVESTS PRIMARILY IN THE STOCKS OF COMPANIES
LOCATED IN ASIA OR THE PACIFIC BASIN. THE AIM IS CAPITAL GROWTH BY GIVING
INVESTORS EXPOSURE TO A DYNAMIC AND POTENTIALLY REWARDING REGION OF THE WORLD.
THE MANAGER FOCUSES 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.
- --------------------------------------------------------------------------------
[SIDENOTE]
MARKET
HIGHLIGHTS
- - The first nine months of the past fiscal year saw strong market advances
across the region, as Asia finally emerged from its severe and prolonged
depression.
- - These advances were fueled by a series of positive developments, including
currency stabilization, export recovery, bad-debt resolution, financial
system restructuring, property market upturn, improved consumer sentiment,
and the resulting increased foreign and domestic investment.
- - In the final three months of the period, markets experienced what we believe
is a temporary time-out. This was caused both by profit-taking and by some
local problems, including civil unrest in Indonesia, the earthquake in
Taiwan, corporate bankruptcies in Korea, and political scandal in Malaysia.
- --------------------------------------------------------------------------------
* The Morgan Stanley Capital International AC Asia Pacific Free ex. Japan Index
("MSCI AP") 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.
3
<PAGE>
THE STRONG FOREIGN MAJORMARKETS-SM- FUND
----------------------------------------
PERSPECTIVES
FROM THE MANAGER
/s/ David Lui
David Lui
Portfolio Manager
- --------------------------------------------------------------------------------
As we look forward to the new millennium, the biggest concern facing
international fund managers is determining which region will provide the highest
returns. Because this Fund is by its design invested in a broad range of
regions, its performance will be affected by all of them.
In fact, during this period, the Fund's performance was driven by superior stock
performance across various countries and industries. No one particular sector
stood out. Most sectors and industries contributed to the Fund's returns, as I
purposefully aligned the portfolio to hold several smaller weightings across a
variety of sectors and industries during this period. Having a market weighting
in Japan also helped, as most competing international funds were underweighted
in that country.
We're of the opinion that Japan may finally be out of the woods after ten years
of punishment for its bubble economy of the 1980s. Japanese politicians appear
to have accepted that the time to act was upon them. After a huge stimulus
package of $100 billion at the end of 1998, another $100 billion package was set
for November 1999. The only stumbling block may come from a rising yen, which
could cut into Japan's powerful export sector.
Europe, on the other hand, has a less rosy outlook. Neither a weak Euro nor a
50-basis-point cut in interest rates succeeded in boosting the region's markets.
The bad news is that the Euro has bottomed, and in the new year interest rates
are more likely to rise. My opinion of the
---------------------------
...HUMAN BEINGS ARE
SMART ENOUGH TO
FIGHT ONE ANOTHER
ECONOMICALLY RATHER
THAN PHYSICALLY.
---------------------------
- --------------------------------------------------------------------------------
[SIDENOTE]
FUND
HIGHLIGHTS
- - The Fund returned 26.53% for the one-year period ended October 31, 1999, while
the Morgan Stanley Capital International Europe, Australasia, and Far East
Index ("MSCI EAFE") returned 23.03%.*
- - The Fund continued to peg its market weightings to those of the MSCI EAFE
Index.
- - The Fund's performance was driven by superior stock performance across various
countries. Having a market weighting in Japan also helped, as most competing
international funds were underweighted in that country.
- - Since taking on the management of this Fund in mid-August, we have made only
minor changes to the portfolio.
- --------------------------------------------------------------------------------
[SIDENOTE]
AVERAGE ANNUAL
TOTAL RETURNS
AS OF 10-31-99
1-year 26.53%
Since Inception 13.07%
(on 6-30-98)
----------------------------------------------------------------------
[SIDENOTE]
FIVE LARGEST
INVESTMENTS BY COUNTRY
BASED ON NET ASSETS AS OF 10-31-99
<TABLE>
<CAPTION>
COUNTRY % OF NET ASSETS
- ----------------------------------------------------------------------
<S> <C>
Japan 26.1%
United Kingdom 22.4%
France 7.7%
Germany 6.5%
Netherlands 3.8%
</TABLE>
Please see the Schedule of Investments in Securities for a complete
listing of the Fund's portfolio.
- --------------------------------------------------------------------------------
4
<PAGE>
region is lukewarm. While it's true that mergers and acquisitions will continue
and may even unite the region by crossing borders, they will take place in a
bureaucratic, nationalistic environment that drags them out and mutes their
benefits.
As for Asia outside Japan, I am of two minds. First, for the first time in three
years, I am becoming positive with regard to Hong Kong. On the other hand, I am
far less sanguine about the rest of Asia. These markets appear unlikely to
emerge from their troubles until their governments implement structural changes
to strengthen their economies and to avoid a repeat of the 1997 meltdown.
As we bid farewell to 2,000 years of human history, I can't help but think that
human beings are smart enough to fight one another economically rather than
physically. That gives us all the potential to enter a phase of sustained
economic growth as major countries turn their attention away from destroying
each other and toward producing the highest-quality products for the lowest
cost.
Looking forward, in the next year I will begin to make more significant changes
to the portfolio on a stock-by-stock basis. We appreciate your investment in the
Strong Foreign MajorMarkets-SM- Fund and thank you for joining us as we pursue
investment opportunities around the globe.
GROWTH OF AN ASSUMED $10,000 INVESTMENT
FROM 6-30-98 TO 10-31-99
[GRAPH]
<TABLE>
<CAPTION>
THE STRONG FOREIGN Lipper International
MAJORMARKETS-SM- FUND MSCI EAFE* Funds Index*
--------------------- ---------- --------------------
<S> <C> <C> <C>
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
6-99 $11,060 $10,762 $10,400
9-99 $11,260 $11,234 $10,750
10-99 $11,780 $11,655 $11,125
</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
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.
- --------------------------------------------------------------------------------
[SIDENOTE]
YOUR FUND'S
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.
- --------------------------------------------------------------------------------
[SIDENOTE]
MARKET
HIGHLIGHTS
- - The MSCI Europe, Australasia, and Far East Index, the Fund's benchmark,
returned 23.03% for the year ended October 31, 1999, while the Lipper
International Funds Index returned 23.05%.
- - Western Europe led international markets until the end of January 1999, when
the war in Kosovo had negative impacts. By the time the war ended in June,
threats of increases in Euro interest rates started to cap these markets. As
a result, Europe generally underperformed other regions.
- - The Japanese market was revived in March by restructuring plans from companies
of such stature as Sony and Toshiba. A rising yen stopped the rally in
mid-July, however. The rest of Asia has largely kept in step with Japan.
- --------------------------------------------------------------------------------
* 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.
5
<PAGE>
THE STRONG INTERNATIONAL STOCK FUND
-----------------------------------
PERSPECTIVES
FROM THE MANAGER
/s/ David Lui
David Lui
Portfolio Manager
- --------------------------------------------------------------------------------
The biggest concern facing an international fund manager is determining which
region will provide the highest return in the new millennium. We will give our
views by region as follows:
Is Japan out of the woods? We are inclined to answer yes. The Japanese
politicians apparently realized that it is now or never. After a huge stimulus
package of $100 billion at the end of 1998, another $100 billion package is
being prepared for November 1999. The wave of industrial restructuring started
to snowball in March 1999. By October, even the financial sector joined in. That
the individual investors in Japan who were burned badly in the 1990s are slowly
tiptoeing back into the market is another bullish sign. I believe the only
stumbling block may come from a rising yen, which would put a damper on the
powerful export sector in Japan. Overall, I believe that 10 years of punishment
for the Japanese stock market bubble is enough.
Neither a weak Euro nor a 50-basis-point cut in interest rates succeeded in
boosting European stock markets in 1999. The bad news is that the Euro has
bottomed and interest rates are more likely to rise in the new year. For the
first time in three years, I have become lukewarm on Europe. Mergers and
acquisitions will most likely continue. They may even begin to cross borders.
Unfortunately, these activities are played out in European style--that is, they
are drawn out by bureaucracies and rigged by nationalism. Sad to say, the
positive benefits of the Euro may become permanently subdued.
---------------------------
...10 YEARS OF
PUNISHMENT FOR THE
JAPANESE STOCK MARKET
BUBBLE IS ENOUGH.
---------------------------
- --------------------------------------------------------------------------------
[SIDENOTE]
FUND
HIGHLIGHTS
- - The Fund returned 45.99% for the one-year period ended October 31, 1999, while
the Morgan Stanley Capital International Europe, Australasia, and Far East
Index ("MSCI EAFE") returned 23.03%.*
- - The Fund's outperformance was primarily the result of successful stock
selections. Also, having a market weighting in Japan was advantageous as most
other international funds were underweighted in that country.
- - The Fund had an overweighted position in Japanese financial stocks, which
netted handsome returns as that country's financial sector began to
consolidate in preparation for deregulation and foreign competition.
- - We stayed fully invested even in the face of increased volatility in the
second half of the year, which benefited the Fund's performance.
- ---------------------------------------------------------------------------
[SIDENOTE]
AVERAGE ANNUAL
TOTAL RETURNS
AS OF 10-31-99
1-year 45.99%
3-year 2.64%
5-year 3.17%
Since Inception 7.64%
(on 3-4-92)
----------------------------------------------------------------------
[SIDENOTE]
FIVE LARGEST
INVESTMENTS BY COUNTRY
BASED ON NET ASSETS AS OF 10-31-99
<TABLE>
<CAPTION>
COUNTRY % OF NET ASSETS
- ----------------------------------------------------------------------
<S> <C>
Japan 25.3%
United Kingdom 17.1%
France 11.1%
Finland 6.8%
Canada 5.7%
</TABLE>
Please see the Schedule of Investments in Securities for a complete
listing of the Fund's portfolio.
- --------------------------------------------------------------------------------
6
<PAGE>
What about Asia outside Japan? For the first time in three years, I am becoming
positive on Hong Kong. The end of U.S. interest-rate increases would bode well
for the market. I believe the only major threat to the Hong Kong stock market is
a renminbi devaluation. As for the rest of Asia, I would stay away until those
governments implement structural changes to strengthen their economies and to
preclude a relapse of the 1997 meltdown.
As I bid farewell to 2,000 years of human history, I can't help but think that
human beings are smart enough to fight one another economically rather than
physically. Economic competition will only create more opportunities on this
planet. If the threat of large-scale war can be buried, we will truly be
entering a phase of sustained economic growth, as the major countries will be
preoccupied with producing the highest-quality products for the lowest cost.
We remain optimistic about the future and the strategy of the Strong
International Stock Fund. Thank you for your continued confidence in us.
GROWTH OF AN ASSUMED $10,000 INVESTMENT
FROM 3-4-92 TO 10-31-99
[GRAPH]
<TABLE>
<CAPTION>
THE STRONG INTERNATIONAL Lipper International
STOCK FUND MSCI EAFE* Funds Index*
------------------------ ---------- --------------------
<S> <C> <C> <C>
3-92 $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 $19,955
10-99 $17,576 $21,974 $22,821
</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
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.
- --------------------------------------------------------------------------------
[SIDENOTE]
YOUR FUND'S
APPROACH
THE STRONG INTERNATIONAL STOCK FUND SEEKS CAPITAL GROWTH. IT SEARCHES OUTSIDE
THE U.S. FOR STOCKS THAT APPEAR TO HAVE STRONG GROWTH POTENTIAL RELATIVE TO
THEIR RISK. THE MANAGER'S THREE-STEP INVESTMENT PROCESS INVOLVES COUNTRY
ALLOCATION, INTENSIVE RESEARCH, AND CURRENCY MANAGEMENT. HE EXAMINES THE
ECONOMIC OUTLOOK OF INDIVIDUAL COUNTRIES TO DECIDE HOW MUCH OF THE FUND'S
ASSETS--IF ANY--TO INVEST IN EACH ONE. THEN HE CHOOSES INDIVIDUAL STOCKS BASED
ON RIGOROUS ANALYSIS INCORPORATING INTERVIEWS WITH A COMPANY'S LEADERSHIP. HE
SOMETIMES INVESTS TO MANAGE RISK FROM FLUCTUATIONS IN FOREIGN CURRENCY VALUES.
- --------------------------------------------------------------------------------
[SIDENOTE]
MARKET
HIGHLIGHTS
- - Europe in general was an underperformer relative to the rest of the world's
markets.
- - Japan was revived in March by blue-chip companies' restructuring plans. As the
yen started rising in mid-July, however, it brought the rally to a halt. The
rest of Asia moved largely in concert with Japan.
- - High-technology and telecommunications stocks, regardless of country, were the
darlings of investors in 1999. Their significantly above-market returns fully
justified their relatively higher volatility.
- --------------------------------------------------------------------------------
* 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.
7
<PAGE>
THE STRONG OVERSEAS FUND
------------------------
PERSPECTIVES
FROM THE MANAGER
/s/ David Lui
David Lui
Portfolio Manager
- --------------------------------------------------------------------------------
As we get set for the start of the new millennium, the biggest concern facing an
international fund manager is determining which region will provide the highest
returns. Here's an outline of my viewpoint, by region.
We are starting to believe that Japan may finally be out of the woods. Japanese
politicians appear to have realized that reform must come now or it will simply
never happen. After a huge stimulus package of $100 billion at the end of 1998,
another $100 billion package was prepared for November 1999. Further, a wave of
industrial restructurings started to snowball in March 1999. By October, even
the financial sector joined in.
Perhaps the clearest measure that Japan is on the way to recovery is that
individual investors--who were so badly burned in the 1990s--are making their
way back into the market. The only stumbling block may come from a rising yen,
which will put a damper on the powerful export sector in Japan. Overall, we
believe that 10 years of punishment for the Japanese stock market bubble is
enough.
In a change from the past three years, I have become lukewarm toward Europe. It
seemed nothing, not even a weak Euro or a 50-basis-point interest-rate cut,
could boost European stock markets in 1999. The bad news is that the Euro has
bottomed and interest rates are more likely to rise in the new year. It's true:
Mergers and acquisitions will continue and may even begin to fulfill the promise
of the European Union by crossing borders. Unfortunately, they are drawn out by
bureaucracies and affected by
---------------------------
...JAPAN MAY
FINALLY BE OUT
OF THE WOODS.
---------------------------
- --------------------------------------------------------------------------------
[SIDENOTE]
FUND
HIGHLIGHTS
- - The Fund returned 75.24% for the one-year period ended October 31, 1999,
while the Morgan Stanley Capital International Europe, Australasia, and Far
East Index ("MSCI EAFE") returned 23.03%.*
- - The Fund's outperformance was primarily the result of successful stock
selections. Because this Fund holds larger positions in those stocks where
our convictions are particularly strong, the success of those positions has
had a dramatic impact on performance.
- - The Fund had an overweighted position in Japanese financial stocks, which
netted handsome returns as that country's financial sector began to
consolidate in preparation for deregulation and foreign competition.
- --------------------------------------------------------------------------------
[SIDENOTE]
AVERAGE ANNUAL
TOTAL RETURNS
AS OF 10-31-99
1-year 75.24%
Since Inception 31.25%
(on 6-30-98)
----------------------------------------------------------------------
[SIDENOTE]
FIVE LARGEST
INVESTMENTS BY COUNTRY
BASED ON NET ASSETS AS OF 10-31-99
<TABLE>
<CAPTION>
COUNTRY % OF NET ASSETS
- ----------------------------------------------------------------------
<S> <C>
Japan 25.5%
United Kingdom 15.3%
France 9.7%
Finland 6.5%
Canada 5.5%
</TABLE>
Please see the Schedule of Investments in Securities for a complete
listing of the Fund's portfolio.
- --------------------------------------------------------------------------------
8
<PAGE>
nationalism, which may combine to permanently subdue the positive impact of the
Euro.
As for Asia outside Japan, in another change from the past three years, I am now
becoming positive on Hong Kong. A possible end of U.S. interest-rate increases
may bode well for the market. I'm inclined to stay away from the rest of Asia
until the governments of those countries implement meaningful structural
changes.
As I bid farewell to 2,000 years of human history, I find many reasons for
optimism. I can't help but think that human beings are smart enough to fight one
another economically rather than physically. And if the threat of large-scale
war can be eliminated, we will truly be entering a phase of sustained economic
growth, as the major countries will be preoccupied with producing the
highest-quality products for the lowest cost.
Thank you for your investment in the Strong Overseas Fund. I am committed to
pursuing superior investment results around the world and believe the Fund is
well positioned to do just that.
GROWTH OF AN ASSUMED $10,000 INVESTMENT
FROM 6-30-98 TO 10-31-99
[GRAPH]
<TABLE>
<CAPTION>
THE STRONG Lipper International
OVERSEAS FUND MSCI EAFE* Funds Index*
------------- ---------- --------------------
<S> <C> <C> <C>
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
6-99 $12,240 $10,762 $10,400
8-99 $12,800 $11,122 $10,716
10-99 $14,370 $11,655 $11,125
</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
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.
- --------------------------------------------------------------------------------
[SIDENOTE]
YOUR FUND'S
APPROACH
THE STRONG OVERSEAS FUND SEEKS CAPITAL GROWTH. IT SEARCHES OUTSIDE THE U.S. FOR
STOCKS THAT APPEAR TO HAVE STRONG GROWTH POTENTIAL RELATIVE TO THEIR RISK. THE
MANAGER'S THREE-STEP INVESTMENT PROCESS INVOLVES COUNTRY ALLOCATION, INTENSIVE
RESEARCH, AND CURRENCY MANAGEMENT. HE STUDIES INDIVIDUAL COUNTRIES TO DECIDE
WHETHER, AND HOW MUCH, TO INVEST IN EACH. STOCKS ARE CHOSEN THROUGH RIGOROUS
ANALYSIS THAT INCLUDES INTERVIEWS WITH COMPANY LEADERS. THE FUND SOMETIMES
INVESTS TO MINIMIZE RISK FROM FOREIGN-CURRENCY FLUCTUATIONS. AT TIMES, THE FUND
MAY TAKE AGGRESSIVE POSITIONS IN COMPANIES AND COUNTRIES.
- --------------------------------------------------------------------------------
[SIDENOTE]
MARKET
HIGHLIGHTS
- - The MSCI Europe, Australasia, and Far East Index, the Fund's benchmark,
returned 23.03% for the year ended October 31, 1999. The Lipper International
Funds Index returned 23.05% for the same period.
- - Relative to the rest of the world's markets, Europe underperformed.
- - As Japanese blue-chip companies launched restructuring plans in March, that
country's market was revived. That rally ceased as the yen started rising in
mid-July. The rest of Asia moved largely in sync with Japan.
- - High-technology and telecommunications stocks, regardless of country, were
the darlings of investors in 1999. They were also more volatile than other
sectors, but their significant returns compensated for the additional risk.
- --------------------------------------------------------------------------------
* 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.
9
<PAGE>
THE STRONG GLOBAL HIGH-YIELD BOND FUND
--------------------------------------
PERSPECTIVES
FROM THE MANAGERS
/s/ John T. Bender
John T. Bender
Portfolio Co-manager
- --------------------------------------------------------------------------------
Emerging-market debt posted healthy returns over the period, a response to
rising commodity prices and signs of renewed economic growth. Of particular note
is the escalation in oil prices, which hit $21.75 per barrel by the end of
October 1999. Rising commodity prices are of great importance to emerging
markets, which tend to rely on their natural resources to spur their economies.
Investors greeted this rebound in commodity prices enthusiastically, with many
returning to developing markets for the first time since their near-collapse in
the fall of 1998.
Investments in Mexican and South Korean debt helped the Fund's total return.
Mexico has already been upgraded and is still on positive credit watch, as
rising oil prices and fiscal prudence continue to improve that country's credit
profile. South Korean debt has been upgraded several times in the past year, as
it continues to clean up problems with its banking system and strengthen its
economic performance.
The recent good news in Mexico and South Korea does not, unfortunately, easily
translate to countries such as Venezuela, Brazil, and Russia. The economic and
political challenges facing these countries are still quite substantial. Going
forward, we will continue to underweight these countries until we are far more
confident of their future prospects.
Heavy supply and a decline in credit quality have characterized the domestic
high-yield market in recent months. Corporations have rushed to issue new debt
before year-end pressures
---------------------------
COUNTRY EXPOSURE(4)
AS OF 10-31-99
Mexico
14.3%
----
Bermuda
7.8%
----
South Korea
7.2%
----
Canada
4.4%
----
Argentina
3.7%
---------------------------
- --------------------------------------------------------------------------------
[SIDENOTE]
FUND
HIGHLIGHTS
- - The Strong Global High-Yield Bond Fund returned 9.12% during the year ended
October 31, 1999. The Global High-Yield Bond Index returned 14.32% for the
same period.*
- - The Fund maintained its defensive posture relative to emerging markets by
investing mainly in higher-quality emerging markets such as South Korea and
Mexico. These countries have demonstrated a willingness to exercise fiscal
discipline during challenging economic times.
- - We continue to overweight U.S. high-yield securities in the portfolio,
particularly those from the telecommunications, energy, and chemical sectors.
---------------------------------------------------------------------------
[SIDENOTE]
AVERAGE ANNUAL
TOTAL RETURNS
AS OF 10-31-99
1-year 9.12%
Since Inception 0.23%
(on 1-31-98)
---------------------------------------------------------------------------
[SIDENOTE]
PORTFOLIO
STATISTICS
AS OF 10-31-99
30-day annualized yield(1) 7.66%
Average credit quality(2) BB
Average maturity(3) 5.7 years
- --------------------------------------------------------------------------------
(1) Yields are historical and do not represent future yields, which will
fluctuate. Yield is as of 10-29-99.
(2) For the purposes of the average, the Fund's short-term debt obligations have
been assigned a long-term rating by the Advisor.
(3) The Fund's average maturity includes the effect of futures.
(4) 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. Country exposure
does not reflect U.S. holdings.
10
<PAGE>
increase. The net result is that an entire year's supply was brought to market
in just the first three quarters of the year. This heavy new-issue volume
creates a poor technical environment for high-yield debt. Compounding this
problem is the market's increasing concern about credit quality, in the face of
a rising default rate on high-yield debt over the past year. These two factors
have pushed yield premiums to very attractive levels.
Our emphasis on credit research continues to be a strength. Our security
selection focuses primarily on companies with the potential to de-leverage
themselves rapidly. Some of our most successful holdings during the period
include debt from MetroNet Communications and Global Crossing.
We believe the combination of reduced supply, a stabilization of the default
rate, a more stable interest-rate environment, and attractive valuation levels
will lead to solid returns from U.S. high-yield debt over the next 12 to 18
months. Given this outlook, we will continue to overweight this market relative
to our benchmark.
Thank you for investing in the Strong Global High-Yield Bond Fund. We appreciate
the confidence you've shown in us.
GROWTH OF AN ASSUMED $10,000 INVESTMENT
FROM 1-31-98 TO 10-31-99
[GRAPH]
<TABLE>
<CAPTION>
THE STRONG GLOBAL Global High-Yield Lipper Global Income
HIGH-YIELD BOND FUND Bond Index* Funds Index*
-------------------- ----------------- --------------------
<S> <C> <C> <C>
1-98 $10,000 $10,000 $10,000
3-98 $10,448 $10,404 $10,128
6-98 $10,135 $10,041 $10,166
9-98 $9,146 $8,495 $10,248
12-98 $9,683 $9,106 $10,555
3-99 $10,123 $9,464 $10,388
6-99 $9,963 $9,799 $10,176
9-99 $9,948 $9,826 $10,283
10-99 $10,040 $10,049 $10,269
</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 and the Lipper Global Income Funds Index.
Results include the reinvestment of all dividends and capital gains
distributions. Performance is historical and does not represent future
results. Investment returns and principal value vary, and you may have a gain
or loss when you sell shares.
- --------------------------------------------------------------------------------
[SIDENOTE]
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. THE MANAGERS START
THEIR INVESTMENT PROCESS WITH A BROAD, TOP-DOWN ANALYSIS OF WORLD MARKET AND
FINANCIAL CONDITIONS. THIS ANALYSIS LEADS THEM TO COUNTRIES AND COMPANIES WHOSE
BONDS ARE BELIEVED TO OFFER THE POTENTIAL FOR HIGH INCOME AND CAPITAL
APPRECIATION. IN UNCERTAIN ECONOMIC TIMES, THEY MAY AVOID EMERGING MARKETS AND
MAY EVEN INVEST ONLY IN U.S. HIGH-YIELD BONDS AND TWO FOREIGN COUNTRIES.
- --------------------------------------------------------------------------------
[SIDENOTE]
MARKET
HIGHLIGHTS
- - Rising commodity prices and improved economic performance resulted in decent
returns on emerging-market debt. The J.P. Morgan Emerging Markets Bond
Index +, a measure of these markets' performance and a component of the Fund's
own benchmark, returned 19.98% for the one-year period.*
- - The U.S. high-yield market performed well but did not keep pace with emerging
markets. The Merrill Lynch High-Yield Master II Index returned 5.61% for the
year.
- - The yield premium paid by high-yield corporate bonds (relative to
investment-grade issues) rose slightly. In contrast, the premium paid on
government bonds issued by emerging markets remained mostly unchanged from
April 30 to October 31.
- --------------------------------------------------------------------------------
*The Global High-Yield Bond Index is comprised of 65% J.P. Morgan Emerging
Markets Bond Index + and 35% Lehman Brothers High-Yield Bond Index. The J.P.
Morgan Emerging Markets Bond Index + is an unmanaged index generally
representative of emerging-market debt obligations. The Lehman Brothers
High-Yield Bond Index is an unmanaged index generally representative of
corporate bonds rated below investment-grade. The Lipper Global Income Funds
Index is an equally-weighted performance index of the largest qualifying funds
in this Lipper category. Source of the Global High-Yield Bond Index data is
Bloomberg and Standard & Poor's Micropal. Source of the Lipper index data is
Lipper Inc.
11
<PAGE>
THE STRONG INTERNATIONAL BOND FUND
----------------------------------
PERSPECTIVES
FROM THE MANAGERS
/s/ John T. Bender /s/ Bradley C. Tank
John T. Bender Bradley C. Tank
Portfolio Co-manager Portfolio Co-manager
In the first months of the fiscal year, the global flight to quality that
followed 1998's Russian crisis 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.
In the second half of the year, however, global interest rates rose in response
to stronger-than-anticipated world economic growth. This rebound in economic
growth has led investors to discount future monetary tightenings, particularly
by U.S. and European central banks. In the U.S., the Federal Reserve Board
raised the federal funds rate to 5.25%. European central banks have yet to
tighten monetary policy, but market interest rates have risen to reflect a
likely move toward higher short-term rates.
In the first months after the Euro's launch on January 1, 1999, it failed to
hold value relative to the dollar as European economies slowed down relative to
the U.S. In more recent months, however, the Euro has stabilized. After
weakening in the first half of the fiscal year, the Japanese yen has rebounded,
recently appreciating by 12.9% versus the U.S. dollar as the Japanese economy
has begun to recover. Overall, foreign currency returns had a positive impact on
the portfolio, as the Fund does not hedge currency risk.
The portfolio's positive return from foreign currency exposure was not enough to
offset the
---------------------------
COUNTRY EXPOSURE(4)
AS OF 10-31-99
Japan
26.7%
----
Germany
26.0%
----
Italy
16.0%
----
United Kingdom
8.5%
----
Denmark
7.2%
---------------------------
- --------------------------------------------------------------------------------
[SIDENOTE]
FUND HIGHLIGHTS
- - The Strong International Bond Fund returned -5.34% for the year ended
October 31, 1999, while the Fund's benchmark, the Salomon Brothers Non-U.S.
World Government Bond Index (Currency Unhedged), returned -2.96%.*
- - The Fund underperformed its benchmark because its duration was longer than the
benchmark's, primarily in its European holdings. We scaled back on this
approach during the period as it became apparent that the world economy was
rebounding from last year's slowdown.
- - Since the Fund is not hedged against foreign currency fluctuations, when
foreign currencies appreciate versus the U.S. dollar, it positively impacts
the Fund. Over the past six months, the Japanese yen appreciated by 12.9%
over the dollar.
---------------------------------------------------------------------------
[SIDENOTE]
AVERAGE ANNUAL
TOTAL RETURNS
AS OF 10-31-99
1-year -5.34%
3-year 1.40%
5-year 5.38%
Since Inception 6.78%
(on 3-31-94)
---------------------------------------------------------------------------
[SIDENOTE]
PORTFOLIO
STATISTICS
AS OF 10-31-99
30-day annualized yield(1) 3.51%
Average credit quality(2) AA
Average maturity(3) 6.6 years
- --------------------------------------------------------------------------------
(1) Yields are historical and do not represent future yields, which will
fluctuate. Yield is as of 10-29-99.
(2) For purposes of this average rating, the Fund's short-term debt obligations
have been assigned a long-term rating by the Advisor.
(3) The Fund's average maturity includes the effect of futures.
(4) 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. Country exposure
does not reflect U.S. holdings.
12
<PAGE>
negative impact of its duration overweight in Europe. However, we believe the
recent rise in European interest rates more than discounts the potential
monetary tightening that may be necessary to offset fears of increased
inflation. European growth is increasing, but economic growth is still low.
Furthermore, the restructuring of Europe's economy is a deflationary phenomenon.
With rates having increased substantially, we believe the risk/reward tradeoff
favors being overweighted in European markets relative to our benchmark.
Going forward, we believe international bond markets are attractively priced.
Global interest rates have increased substantially due to fears of rapid
economic growth and rising inflation. However, market interest rates are very
attractive relative to inflation. Therefore, we will look to increase the
portfolio's exposure to interest-rate fluctuations as signs of slower global
economic growth begin to appear.
We also plan to de-emphasize securities from emerging markets. We believe the
rewards for investing in these countries is, at present, insufficient to
compensate for the economic and political challenges these markets face.
Thank you for investing in the Strong International Bond Fund. We look forward
to continuing to help you pursue your important financial goals.
GROWTH OF AN ASSUMED $10,000 INVESTMENT
FROM 3-31-94 TO 10-31-99
[GRAPH]
<TABLE>
<CAPTION>
Salomon Brothers Non-U.S.
THE STRONG INTERNATIONAL World Government Bond Lipper International Income
BOND FUND Index (Currency Unhedged)* Funds Index*
------------------------ ------------------------- ---------------------------
<S> <C> <C> <C>
3-94 $10,000 $10,000 $10,000
12-94 $10,866 $10,397 $9,837
12-95 $12,937 $12,430 $11,700
12-96 $13,966 $12,937 $12,784
12-97 $13,297 $12,386 $12,991
12-98 $15,330 $14,589 $14,725
10-99 $14,421 $14,055 $14,143
</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
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.
- --------------------------------------------------------------------------------
[SIDENOTE]
YOUR FUND'S
APPROACH
THE STRONG INTERNATIONAL BOND FUND SEEKS HIGH TOTAL RETURN BY INVESTING FOR BOTH
INCOME AND CAPITAL GROWTH. IT DOES THIS BY FOCUSING ON INVESTMENT-GRADE BONDS
ISSUED IN FOREIGN COUNTRIES. THE FUND'S INVESTMENT PROCESS BEGINS WITH A BROAD
ANALYSIS OF GLOBAL FINANCIAL CONDITIONS. THE MANAGERS 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.
---------------------------------------------------------------------------
[SIDENOTE]
MARKET
HIGHLIGHTS
- - International markets have been characterized by rising interest rates and
stronger-than-expected economic growth. The yield on the German 10-year bond
rose to 5.16% from 3.87%, while the U.S. 10-year note rose to 6.02% from 5.35%
during the last six months.
- - The increase in world economic growth brought the potential for inflationary
pressures and caused central bankers globally to move toward tighter monetary
policy.
- - After a poor start, the Euro seems to have stabilized. It ended the period
mostly unchanged versus the dollar, after depreciating by 9.4% the previous
period.
- --------------------------------------------------------------------------------
*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.
13
<PAGE>
THE STRONG SHORT-TERM GLOBAL BOND FUND
--------------------------------------
PERSPECTIVES
FROM THE MANAGERS
/s/ Jeffrey A. Koch /s/ Bradley C. Tank
Jeffrey A. Koch Bradley C. Tank
Portfolio Co-manager Portfolio Co-manager
- --------------------------------------------------------------------------------
The past 12 months saw rising interest rates and generally contracting credit
spreads. The Fund's commitment to assuming a modest degree of interest-rate risk
combined with excellent issue selection in the higher-yielding corporate bond
sector has improved the Fund's total return over its benchmark.
At the end of the fiscal year, our portfolio duration was very close to the
benchmark's, which represents a slight shortening of our stance relative to the
benchmark. We were able to add value for our shareholders during the period by
adding to our holdings from good-performing companies in the telecommunications
and energy sectors. In telecommunications, Metronet bonds outperformed as the
company was taken over by AT&T Canada. Triton Energy was also a significant
contributor to the Fund's returns, as rising oil prices and a significant
success in new exploration allowed the company's debt to become a candidate for
an upgrade. These two companies are excellent examples of how we employ our
proprietary credit research in combination with portfolio strategy to pursue
total return without taking on undue investment risk. We believe the market
holds many other similar opportunities to add value through superior issue
selection in the future.
Looking forward, our view is that the movement toward lower global bond prices
is substantially over. We believe prices have
---------------------------
COUNTRY EXPOSURE(4)
AS OF 10-31-99
Germany
10.2%
----
CANADA
2.5%
----
Australia
2.1%
----
New Zealand
0.6%
----
Denmark
0.6%
---------------------------
- --------------------------------------------------------------------------------
[SIDENOTE]
FUND
HIGHLIGHTS
- - For the year ended October 31, 1999, the Strong Short- Term Global Bond Fund
produced a total return of 6.67% versus 4.15% for the Salomon Brothers
1-3 Year World Government Bond Index (Currency Hedged).*
- - Our response to this period of rising global interest rates has been to keep
the duration of the Fund below two years. We will look to increase portfolio
duration if global bond yields increase.
- - By increasing our exposure to short-maturity, high-yield corporate bonds, we
have positioned the Fund to take advantage of the attractive income levels
available in the U.S. corporate bond market.
---------------------------------------------------------------------------
[SIDENOTE]
AVERAGE ANNUAL
TOTAL RETURNS
AS OF 10-31-99
1-year 6.67%
3-year 5.74%
5-year 7.27%
Since Inception 7.39%
(on 3-31-94)
---------------------------------------------------------------------------
[SIDENOTE]
PORTFOLIO STATISTICS
AS OF 10-31-99
30-day annualized yield(1) 6.61%
Average credit quality(2) AA
Average maturity(3) 2.1 years
- --------------------------------------------------------------------------------
(1) Yields are historical and do not represent future yields, which will
fluctuate. Yield is as of 10-29-99.
(2) For the purposes of the average, the Fund's short-term debt obligations have
been assigned a long-term rating by the Advisor.
(3) The Fund's average maturity includes the effect of futures.
(4) 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. Country exposure
does not reflect U.S. holdings.
14
<PAGE>
reached a near bottom and don't expect any significant change in the immediate
future. Global monetary policy will continue to tighten, but won't have much
impact on bond prices because such policy moves are already substantially
reflected in current market prices. We anticipate that central bankers will
remain successful in containing any meaningful upswing in global price
inflation. We also believe that the recent increases in market interest rates
and the price of energy will begin to dampen global economic growth.
The income levels available on short-maturity fixed-income securities represent
terrific value, particularly against the backdrop of low global price inflation.
We encourage investors to consider building their portfolio's allocation to
fixed-income investments in the months ahead.
Thank you for your continued confidence in the Strong Short-Term Global Bond
Fund.
GROWTH OF AN ASSUMED $10,000 INVESTMENT
FROM 3-31-94 TO 10-31-99
[GRAPH]
<TABLE>
<CAPTION>
Salomon Brothers 1-3 Year
THE STRONG SHORT-TERM World Government Bond Lipper Short World Multi-
GLOBAL BOND FUND Index (Currency Hedged)* Market Income Average*
--------------------- ------------------------- -------------------------
<S> <C> <C> <C>
3-94 $10,000 $10,000 $10,000
12-94 $10,513 $10,153 $ 9,723
12-95 $11,612 $11,286 $10,497
12-96 $12,775 $12,088 $11,177
12-97 $13,629 $12,856 $11,555
12-98 $14,184 $13,796 $12,194
10-99 $14,892 $14,265 $12,331
</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
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.
- --------------------------------------------------------------------------------
[SIDENOTE]
YOUR FUND'S
APPROACH
THE STRONG SHORT-TERM GLOBAL BOND FUND SEEKS TOTAL RETURN BY INVESTING FOR A
HIGH LEVEL OF INCOME WITH A LOW DEGREE OF SHARE-PRICE FLUCTUATION. THE FUND DOES
THIS BY 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, THE MANAGERS
EXAMINE GLOBAL ECONOMIC AND FINANCIAL CONDITIONS TO IDENTIFY COUNTRIES WHOSE
BONDS APPEAR TO HAVE POTENTIAL FOR CAPITAL GAINS OR HIGH INVESTMENT INCOME. THEY
THEN SELECT INDIVIDUAL BONDS THAT THEY BELIEVE ARE POISED TO BENEFIT FROM A
COUNTRY'S ECONOMIC CONDITIONS.
---------------------------------------------------------------------------
[SIDENOTE]
MARKET
HIGHLIGHTS
- - Interest rates in Europe and the U.S. increased during the period due to fears
of stronger global growth and tighter monetary policy.
- - The U.S. Federal Reserve increased the federal funds rate by 50 basis points
in the second half of the year as a response to strong economic growth and
tight labor markets. European market yields rose as investors began to
anticipate more aggressive monetary tightening in Europe.
- - Corporate securities generally underperformed similar-maturity government
securities in recent months as a record supply of new issues drove prices
down. We took advantage of this short-term situation to increase our exposure
to U.S. corporate bonds.
- --------------------------------------------------------------------------------
* The Solomon 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 Solomon index data is
Solomon Brothers. Source of the Lipper data is Lipper Inc.
15
<PAGE>
<TABLE>
<CAPTION>
SCHEDULES OF INVESTMENTS IN SECURITIES October 31, 1999
- ---------------------------------------------------------------------------------------------
STRONG ASIA PACIFIC FUND
- ---------------------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS 77.4%
Australia 15.1%
Adcorp Australia, Ltd. (Acquired 10/04/99;
Cost $164,750) (b) (d) 250,000 $ 159,300
The Broken Hill Proprietary Company, Ltd. 87,980 908,578
Cable & Wireless Optus, Ltd. (b) 406,000 928,744
Capral Aluminium, Ltd. 299,000 366,947
FXF Trust (b) 405,000 129,033
John Fairfax Holdings, Ltd. 345,000 863,948
Kidz.net, Ltd. (b) 2,112,641 585,586
LibertyOne, Ltd. (b) 1,095,000 1,353,604
MIM Holdings, Ltd. 1,481,936 1,218,134
Normandy Mining, Ltd. 1,030,000 781,016
North, Ltd. 400,000 772,286
Novogen, Ltd. (b) 500,000 1,067,310
Novus Petroleum, Ltd. (b) 800,000 728,957
Oil Search, Ltd. (b) 637,000 742,790
Orogen Minerals, Ltd. 760,000 813,577
PowerLan, Ltd. 300,000 701,557
Pracom, Ltd. (Acquired 9/21/99;
Cost $58,892) (b) (d) 75,000 47,790
Solution 6 Holdings, Ltd. (b) 177,644 778,780
Sydney Aquarium, Ltd. 343,450 930,097
Tourism Asset Holdings, Ltd. 1,080,000 433,551
Village Roadshow, Ltd. 224,000 431,053
WMC, Ltd. 200,000 857,671
-----------
15,600,309
China 1.5%
China Merchants Hai Hong Holdings 1,100,000 870,937
Martin Currie China Heartland Fund, Ltd. (b) 100,000 712,500
-----------
1,583,437
Hong Kong 5.0%
CDL Hotels International, Ltd. 1,627,851 550,127
China Telecom (Hong Kong), Ltd. (b) 238,000 815,037
Dickson Concepts International, Ltd. 1,198,000 1,118,185
Hengan International Group Company, Ltd. 3,030,000 828,935
South China Morning Post Holdings, Ltd. 1,500,000 1,091,084
Tianjin Development Holdings, Ltd. 1,544,000 790,138
-----------
5,193,506
India 3.2%
Indian Hotels Company, Ltd. 50 424
The Indian Smaller Companies Fund, Ltd. (b) 16,089 289,763
Indocam Himalayan Fund NV (b) 87,000 1,479,000
Reliance Industries, Ltd. 300 1,617
UTI-Mastergrowth 93 Fund (b) 732,400 288,260
Videsh Sanchar Nigam, Ltd. 76,000 1,214,100
-----------
3,273,164
Indonesia 1.7%
Aneka Tambang Tbk PT 2,950,000 629,044
Hanjaya Mandala Sampoerna Tbk PT (b) 290,000 678,089
London Sumatra Indonesia PT (b) 2,400,000 502,941
-----------
1,810,074
Japan 24.3%
Alpha Systems, Inc. 9,000 1,253,602
CRESCO, LTD. 16,400 1,402,113
East Japan Railway Company 150 920,749
Fidelity Japan OTC and Regional Markets
Fund, Ltd. (b) 69,500 1,059,875
Hitachi Maxell, Ltd. 41,000 984,630
Jafco Company, Ltd. 15,000 1,685,879
Japan Airlines Company, Ltd. 297,000 998,559
Japan Tobacco, Inc. 52 574,448
KOMATSU, LTD. 182,000 1,059,481
Kyocera Corporation 12,000 1,152,738
The Nichido Fire & Marine Insurance
Company, Ltd. 220,000 1,354,659
The Nikko Securities Company, Ltd. 166,000 1,562,728
Nippon Express Company, Ltd. 198,000 1,403,689
Nittetsu Mining Company, Ltd. 225,000 $583,573
Nomura Securities Company, Ltd. 85,000 1,405,235
Okumura Corporation (b) 270,000 972,622
Onward Kashiyama Company, Ltd. 66,000 1,038,501
The Prospect Japan Fund, Ltd. (b) 100,000 975,000
Round One Corporation 6 80,692
Softbank Corporation 2,500 1,039,866
Sumitomo Electric Industries 67,000 901,700
Toei Company, Ltd. 218,000 948,646
The Tokio Marine & Fire Insurance Company, Ltd. 45,000 590,058
Yokowo Company, Ltd. 66,000 1,131,700
-----------
25,080,743
Luxembourg 0.5%
Nomura International PLC Warrants,
Expire 9/28/00 850 499,375
Malaysia 1.6%
Berjaya Sports Toto BHD 212,000 460,275
Malaysia International Shipping BHD (Fgn Reg) 188,000 282,007
Sime Darby BHD 261,000 311,835
World Equity Benchmark Shares - Malaysia
Index Series 100,000 575,000
-----------
1,629,117
New Zealand 5.2%
Air New Zealand, Ltd. Class B 619,000 916,935
Auckland International Airport, Ltd. 640,000 889,601
Guinness Peat Group PLC 741,610 568,090
MONTANA GROUP NZ, LTD. 865,000 930,287
Restaurant Brands New Zealand, Ltd. 667,000 439,880
Sky City, Ltd. 246,000 935,969
Sky Network Television, Ltd. (b) 447,716 681,379
-----------
5,362,141
Papua New Guinea 0.6%
Lihir Gold, Ltd. (b) 700,000 575,392
Philippines 1.8%
Filinvest Land, Inc. (b) 11,800,000 1,003,000
Philippine Long Distance Telephone Company 42,000 876,750
-----------
1,879,750
Singapore 7.6%
City Developments, Ltd. 175,000 905,808
DBS Group Holdings, Ltd. 67,247 760,905
First Capital Corporation, Ltd. 740,000 881,854
Fraser & Neave, Ltd. 227,000 970,027
G.K. Goh Holdings, Ltd. 780,000 643,154
Harimau Investments, Ltd. 583,000 438,610
Hong Leong Finance, Ltd. (Fgn Reg) 319,000 587,505
Jurong Shipyards, Ltd. 172,000 791,935
NatSteel, Ltd. 435,000 727,836
Singapore Airlines Warrants, Expire 5/11/00 72,000 485,345
Singapore Computer Systems 598,000 712,633
-----------
7,905,612
South Korea 2.9%
Haansoft, Inc. 196,334 1,440,983
Hite Brewery Company, Ltd. (b) 26,500 928,274
Samsung Electronics 4,000 667,223
-----------
3,036,480
Taiwan 0.9%
Asustek Computer, Inc. 94,000 989,943
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
STRONG ASIA PACIFIC FUND (continued)
- ---------------------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Thailand 4.8%
Dusit Thani PCL (b) 52,100 $ 48,759
Dusit Thani PCL (Fgn Reg) (b) 267,400 250,255
Golden Land Property Development PCL (b) 1,290,000 501,295
KCE Electronics PCL (Fgn Reg) (b) 347,600 738,425
Kiatnakin Finance PCL (b) 815,000 981,800
National Petrochemical PCL (Fgn Reg) (b) 995,000 882,869
PTT Exploration and Production PCL (b) 118,000 862,073
The Pizza PCL (Fgn Reg) 239,000 684,184
Royal Garden Resort PCL Warrants,
Expire 5/18/05 43,400 0
-----------
4,949,660
United Kingdom 0.6%
Genesis Malaysia Maju Fund, Ltd. (b) 32,000 624,000
VIETNAM 0.1%
Beta Mekong Fund 25,000 62,500
Beta Mekong Fund Warrants, Expire 10/31/09 5,000 0
-----------
62,500
- -------------------------------------------------------------------------------------------
Total Common Stocks (Cost $74,853,745) 80,055,203
- -------------------------------------------------------------------------------------------
PREFERRED STOCKS 0.4%
Australia
Village Roadshow, Ltd. 245,000 418,386
- -------------------------------------------------------------------------------------------
Total Preferred Stocks (Cost $427,852) 418,386
- -------------------------------------------------------------------------------------------
CONVERTIBLE BONDS 1.9%
Japan
Orix Corporation Bonds, 0.375%, Due 3/31/05 50,000,000 JPY 546,662
77 Bank, Ltd. Bonds, 0.45%, Due 3/29/02 120,000,000 JPY 1,440,922
- -------------------------------------------------------------------------------------------
Total Convertible Bonds (Cost $1,581,851) 1,987,584
- -------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 19.1%
Commercial Paper 0.0%
Interest Bearing, Due Upon Demand
United States
United States Cayman Eurodollar Call
Deposit, 4.25% $ 15,000 15,000
Time Deposits 19.1%
United States
Bank of Scotland, 5.25%, Due 11/01/99 4,700,000 4,700,000
Dresdner Bank, 5.125%, Due 11/01/99 4,700,000 4,700,000
First National Bank of Chicago, 5.20%,
Due 11/01/99 900,000 900,000
Republic National Bank of New York,
5.1875%, Due 11/01/99 4,700,000 4,700,000
Royal Bank of Canada, 5.2188%, Due 11/01/99 4,700,000 4,700,000
-----------
Total Time Deposits 19,700,000
- -------------------------------------------------------------------------------------------
Total Short-Term Investments (Cost $19,715,000) 19,715,000
===========================================================================================
Total Investments in Securities (Cost $96,578,448) 98.8% 102,176,173
- -------------------------------------------------------------------------------------------
Other Assets & Liabilities, Net 1.2% 1,228,507
- -------------------------------------------------------------------------------------------
NET ASSETS 100.0% $103,404,680
===========================================================================================
- ---------------------------------------------------------------------------------------------
STRONG FOREIGN MAJOR MARKETS FUND
- ---------------------------------------------------------------------------------------------
COMMON STOCKS 91.9%
Australia 1.1%
National Australia Bank, Ltd. 1,001 $ 15,436
News Corporation, Ltd. 850 6,142
-----------
21,578
BELGIUM 1.4%
Fortis Group 320 10,836
KBC Bancassurance Holding NV 330 17,058
-----------
27,894
Finland 1.8%
Nokia Oyj 310 35,583
-----------
France 7.7%
Axa 100 14,146
Carrefour Supermarche SA 190 35,276
France Telecom SA 270 26,161
L'OREAL 20 13,387
STMicroelectonics 120 10,570
Suez Lyonnaise des Eaux 130 21,051
Total Fina SA 152 20,604
Vivendi SA 196 14,897
-----------
156,092
Germany 6.5%
Allianz AG 100 30,539
DaimlerChrysler AG 370 28,883
Deutsche Telekom AG 480 22,128
Mannesmann AG 90 14,194
Siemens AG 410 36,915
-----------
132,659
Hong Kong 2.0%
Cable & Wireless HKT, Ltd. 4,090 9,346
Hang Seng Bank, Ltd. 1,000 10,879
Hutchison Whampoa, Ltd. 2,000 20,084
-----------
40,309
Ireland 0.7%
Allied Irish Banks PLC 580 7,281
Irish Life & Permanent PLC 647 6,620
-----------
13,901
Italy 3.2%
Assicurazioni Generali 580 18,753
Eni Spa 4,300 25,361
Telecom Italia Mobile Spa 3,290 20,668
-----------
64,782
Japan 26.1%
The Bank of Tokyo - Mitsubishi 1,000 16,599
BRIDGESTONE CORPORATION 1,000 27,570
Canon, Inc. 1,000 28,338
Denso Corporation 1,000 21,422
East Japan Railway Company 4 24,553
Fuji Photo Film 1,000 32,181
Fujitsu, Ltd. 1,000 30,163
Hitachi, Ltd. 2,000 21,652
Honda Motor Company, Ltd. 1,000 42,267
Kansai Electric Power Company, Inc. 2,000 37,445
Kao Corporation 1,000 30,548
Matsushita Electric Industrial Company, Ltd. 1,000 21,085
NEC Corporation 1,000 20,269
Nippon Steel Corporation 7,000 17,819
Nomura Securities Company, Ltd. 1,000 16,532
Sony Corporation 200 31,239
The Sumitomo Bank, Ltd. 1,000 16,120
The Tokio Marine & Fire Insurance Company, Ltd. 1,000 13,112
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
STRONG FOREIGN MAJOR MARKETS FUND (continued)
- ---------------------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Tokyo Electric Power Company 2,000 $ 44,765
Toyota Motor Corporation 1,000 34,678
-----------
528,357
Malaysia 0.6%
Telekom Malaysia BHD 4,000 12,316
Netherlands 3.8%
ING Groep NV 480 28,396
Royal Dutch Petroleum Company 800 47,960
-----------
76,356
New Zealand 0.1%
Telecom Corporation of New Zealand, Ltd. 460 1,853
Norway 0.4%
Orkla ASA 'A Shares' 525 7,351
Portugal 0.5%
Electricidade de Portugal SA 590 9,199
Singapore 1.9%
Singapore Airlines, Ltd. 2,000 21,186
Singapore Press Holdings, Ltd. 1,000 17,153
-----------
38,339
Spain 2.9%
Banco Santander Central Hispano SA 3,040 31,652
Telefonica SA (b) 1,590 26,233
-----------
57,885
Sweden 2.7%
Hennes & Mauritz AB 'B Shares' 560 14,931
Skandia Forsakrings AB 390 8,709
Telefonaktiebolaget LM Ericsson 730 30,465
-----------
54,105
Switzerland 3.5%
Novartis AG 30 44,985
UBS AG 90 26,251
-----------
71,236
Taiwan 1.7%
Taiwan Semiconductor Manufacturing
Company, Ltd. (b) 1,000 34,625
United Kingdom 22.4%
AstraZeneca Group PLC 900 40,724
BP Amoco PLC 5,780 56,118
Barclays PLC 1,120 34,307
British Telecommunications PLC 1,790 32,477
Cable & Wireless PLC 1,870 21,861
Diageo PLC 4,640 46,919
Dixons Group PLC 1,100 19,497
Glaxo Wellcome PLC 1,360 40,161
HSBC Holdings PLC 2,970 36,600
Lloyds TSB Group PLC 2,900 40,124
Misys PLC 2,100 17,540
SmithKline Beecham PLC 2,130 27,457
Vodafone AirTouch PLC 4,660 21,683
WPP Group PLC 1,600 17,376
-----------
452,844
United States 0.9%
Global TeleSystems Group, Inc. (b) 800 19,150
- -------------------------------------------------------------------------------------------
Total Common Stocks (Cost $1,724,976) 1,856,414
- -------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 8.4%
Commercial Paper 1.3%
Interest Bearing, Due Upon Demand
United States
United States Cayman Eurodollar Call
Deposit, 4.25% $27,000 $ 27,000
Government & Agency Issues 2.2%
United States
United States Treasury Bills, Due 11/18/99 (c) 45,000 44,909
Time Deposits 4.9%
United States
Dresdner Bank, 5.125%, Due 11/01/99 100,000 100,000
- -------------------------------------------------------------------------------------------
Total Short-Term Investments (Cost $171,906) 171,909
===========================================================================================
Total Investments in Securities (Cost $1,896,882) 100.3% 2,028,323
Other Assets & Liabilities, Net (0.3%) (5,123)
- -------------------------------------------------------------------------------------------
NET ASSETS 100.0% $2,023,200
===========================================================================================
<CAPTION>
FUTURES
- -------------------------------------------------------------------------------------------
Underlying
Expiration Face Amount Unrealized
Date at Value Appreciation
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Purchased:
2 CAC 40 Euro Index 12/99 $102,955 $7,305
<CAPTION>
- ---------------------------------------------------------------------------------------------
STRONG INTERNATIONAL STOCK FUND
- ---------------------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS 97.1%
Australia 0.5%
TABCORP Holdings, Ltd. 94,600 $ 599,174
Canada 5.6%
Nortel Networks Corporation 102,000 6,317,625
Egypt 0.0%
Suez Cement 300 4,913
Finland 6.8%
Nokia Oyj 66,300 7,610,157
France 11.1%
Banque Nationale de Paris 27,900 2,457,548
Lagardere S.C.A. 27,600 1,120,937
STMicroelectonics 70,600 6,218,741
Societe Generale 5,194 1,134,184
Societe Television Francaise 4,900 1,540,365
-----------
12,471,775
Germany 4.3%
Bayerische Motoren Werke AG 38,116 1,218,320
Mannesmann AG 23,000 3,627,274
-----------
4,845,594
Greece 0.1%
National Bank of Greece SA 2,050 147,600
HONG KONG 5.0%
Hutchison Whampoa, Ltd. 176,000 1,767,364
Johnson Electric Holdings, Ltd. 378,000 2,043,901
Li & Fung, Ltd. 1,068,000 1,821,822
-----------
5,633,087
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
STRONG INTERNATIONAL STOCK FUND (continued)
- ---------------------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
India 0.4%
Asian Hotels, Ltd. 150 $ 450
Indian Hotels Company, Ltd. 2,050 17,372
Infosys Technologies, Ltd. 2,800 449,086
UTI-Mastergrowth 93 Fund (b) 37,600 14,799
-----------
481,707
Ireland 0.6%
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 (Acquired 11/21/96;
Cost $0) (b) (d) (e) 8,000 0
-----------
635,000
Italy 5.6%
Bipop-Carire Spa 66,000 2,803,038
Mediaset Spa 107,500 1,074,595
Mediolanum Spa 210,300 1,723,296
Telecom Italia Mobile Spa 110,900 696,666
-----------
6,297,595
Japan 25.3%
Advantest Corporation 10,300 1,553,410
The Bank of Tokyo - Mitsubishi 87,000 1,444,150
Daiwa Securities Group, Inc. 322,000 3,442,708
Fuji Bank, Ltd. 139,000 1,909,414
Hoya Corporation 17,000 1,224,784
Keyence Corporation 7,200 1,933,141
Matsushita Communication Industrial Company, Ltd. 8,000 1,346,398
NTT Data Corporation 80 1,268,012
NTT Mobile Communication Network, Inc. 85 2,261,768
Nintendo Company, Ltd. 6,200 986,282
Rohm Company, Ltd. 8,000 1,798,271
Sakura Bank, Ltd. 258,000 2,220,634
Taisho Pharmaceutical Company, Ltd. 28,000 1,167,339
Takeda Chemical Industries 19,000 1,093,275
Tokyo Electron, Ltd. 27,000 2,246,110
Tokyo Seimitsu Company, Ltd. 20,300 2,478,511
-----------
28,374,207
Mexico 0.3%
Fomento Economico Mexicano SA de CV
Sponsored ADR 11,900 390,469
Netherlands 4.9%
ASM Lithography Holding NV (b) 57,200 4,048,833
Vendex KBB NV 25,700 752,328
Verenigde Nederlandse Uitgeversbedrijven NV 21,000 712,216
-----------
5,513,377
Singapore 3.5%
City Developments, Ltd. 99,000 512,429
DBS Group Holdings, Ltd. 169,278 1,915,393
Singapore Press Holdings, Ltd. 89,900 1,542,070
-----------
3,969,892
Spain 0.8%
Banco Santander Central Hispano SA 85,696 892,255
Sweden 1.5%
Skandia Forsakrings AB 76,000 1,697,132
Switzerland 1.3%
Adecco SA 1,345 817,350
Zurich Allied AG 1,200 681,092
-----------
1,498,442
Taiwan 1.5%
Taiwan Semiconductor Manufacturing
Company, Ltd. (b) 49,600 1,717,400
United Kingdom 17.1%
Dixons Group PLC 229,700 $ 4,071,312
Energis PLC (b) 143,500 4,579,648
GKN PLC 45,000 720,653
Hays PLC 86,000 984,859
Lloyds TSB Group PLC 144,500 1,999,294
Misys PLC 113,500 948,013
Vodafone AirTouch PLC 775,000 3,606,141
WPP Group PLC 207,500 2,253,438
-----------
19,163,358
United States 0.9%
Global TeleSystems Group, Inc. (b) 42,200 1,010,163
- -------------------------------------------------------------------------------------------
Total Common Stocks (Cost $68,850,566) 109,270,922
- -------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 2.3%
Commercial Paper 0.1%
Interest Bearing, Due Upon Demand
United States
United States Cayman Eurodollar Call
Deposit, 4.25% $ 79,000 79,000
Government & Agency Issues 0.8%
United States
United States Treasury Bills, Due 11/18/99 (c) 850,000 848,286
Time Deposits 1.4%
UNITED STATES
Dresdner Bank, 5.125%, Due 11/01/99 1,600,000 1,600,000
- -------------------------------------------------------------------------------------------
Total Short-Term Investments (Cost $2,527,160) 2,527,286
===========================================================================================
Total Investments in Securities (Cost $71,377,726) 99.4% 111,798,208
- -------------------------------------------------------------------------------------------
Other Assets and Liabilities, Net 0.6% 618,491
- -------------------------------------------------------------------------------------------
NET ASSETS 100.0% $112,416,699
===========================================================================================
<CAPTION>
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
- ---------------------------------------------------------------------------------------------
Settlement Unrealized
Date Value in USD Depreciation
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Sold:
495,000,000 JPY 1/25/00 $4,826,639 $ 79,804
<CAPTION>
- ---------------------------------------------------------------------------------------------
STRONG OVERSEAS FUND
- ---------------------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS 93.2%
Australia 0.6%
TABCORP Holdings, Ltd. 7,000 $ 44,336
Canada 5.5%
BCE Emergis, Inc. (b) 1,100 28,715
Nortel Networks Corporation 6,000 371,625
-----------
400,340
Finland 6.5%
Nokia Oyj 4,080 468,317
France 9.7%
Banque Nationale de Paris 1,200 105,701
Lagardere S.C.A. 1,400 56,859
STMicroelectonics 4,100 361,145
Societe Generale 396 86,472
Societe Television Francaise 300 94,308
-----------
704,485
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
SCHEDULES OF INVESTMENTS IN SECURITIES ((continued)) October 31, 1999
- ---------------------------------------------------------------------------------------------
STRONG OVERSEAS FUND (continued)
- ---------------------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Germany 3.3%
Bayerische Motoren Werke AG 2,160 $ 69,041
Mannesmann AG 1,080 170,324
-----------
239,365
Greece 0.1%
National Bank of Greece SA 56 4,032
Hong Kong 5.1%
Hutchison Whampoa, Ltd. 9,000 90,376
Johnson Electric Holdings, Ltd. 28,500 154,104
Li & Fung, Ltd. 72,000 122,819
-----------
367,299
Italy 5.0%
Bipop-Carire Spa 4,500 191,116
Mediaset Spa 6,100 60,977
Mediolanum Spa 9,400 77,028
Telecom Italia Mobile Spa 5,700 35,807
-----------
364,928
Japan 25.5%
Advantest Corporation 600 90,490
The Bank of Tokyo - Mitsubishi 6,000 99,597
Daiwa Securities Group, Inc. 20,000 213,832
Fuji Bank, Ltd. 7,000 96,158
Hoya Corporation 1,000 72,046
Keyence Corporation 300 80,548
Matsushita Communication Industrial
Company, Ltd. 1,000 168,300
NTT Data Corporation 5 79,251
NTT Mobile Communication Network, Inc. 5 133,045
Nintendo Company, Ltd. 400 63,631
Rohm Company, Ltd. 1,000 224,783
Sakura Bank, Ltd. 13,000 111,892
Taisho Pharmaceutical Company, Ltd. 1,400 58,367
Takeda Chemical Industries 1,000 57,541
Tokyo Electron, Ltd. 2,000 166,378
Tokyo Seimitsu Company, Ltd. 1,100 134,304
-----------
1,850,163
Mexico 0.4%
Fomento Economico Mexicano SA de CV
Sponsored ADR 800 26,250
Netherlands 4.5%
ASM Lithography Holding NV (b) 3,600 254,821
Vendex KBB NV 1,060 31,030
Verenigde Nederlandse Uitgeversbedrijven NV 1,100 37,307
-----------
323,158
Singapore 4.1%
City Developments, Ltd. 6,000 31,056
DBS Group Holdings, Ltd. 13,167 148,986
SINGAPORE PRESS HOLDINGS, LTD. 6,800 116,642
-----------
296,684
Spain 0.4%
Banco Santander Central Hispano SA 3,094 32,214
Sweden 1.8%
Skandia Forsakrings AB 5,700 127,285
Switzerland 1.8%
Adecco SA 175 106,347
Zurich Allied AG 45 25,541
-----------
131,888
Taiwan 2.4%
Taiwan Semiconductor Manufacturing
Company, Ltd. (b) 5,000 173,125
United Kingdom 15.3%
Dixons Group PLC 13,800 244,598
Energis PLC (b) 8,300 264,886
Hays PLC 4,100 $ 46,953
Lloyds TSB Group PLC 4,300 59,495
Misys PLC 11,700 97,725
Vodafone AirTouch PLC 16,000 74,449
Vodafone AirTouch PLC Sponsored ADR 3,000 143,813
WPP Group PLC 16,600 180,275
-----------
1,112,194
United States 1.2%
Global TeleSystems Group, Inc. (b) 3,700 88,569
- -------------------------------------------------------------------------------------------
Total Common Stocks (Cost $4,585,173) 6,754,632
- -------------------------------------------------------------------------------------------
SHORT-TERM SECURITIES (a) 7.5%
Commercial Paper 0.0%
Interest Bearing, Due Upon Demand
United States
United States Cayman Eurodollar Call
Deposit, 4.25% $2,000 2,000
Government & Agency Issues 0.6%
United States
United States Treasury Bills, Due 11/18/99 (c) 45,000 44,909
Time Deposits 6.9%
United States
Dresdner Bank, 5.125%, Due 11/01/99 200,000 200,000
Royal Bank of Canada, 5.2188%, Due 11/01/99 300,000 300,000
-----------
500,000
- -------------------------------------------------------------------------------------------
Total Short-Term Investments (Cost $546,901) 546,909
===========================================================================================
Total Investments in Securities (Cost $5,132,074) 100.7% 7,301,541
Other Assets & Liabilities, Net (0.7%) (50,232)
- -------------------------------------------------------------------------------------------
NET ASSETS 100.0% $ 7,251,309
===========================================================================================
<CAPTION>
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
- ---------------------------------------------------------------------------------------------
Settlement Unrealized
Date Value in USD Depreciation
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Sold:
15,000,000 JPY 1/25/00 $ 146,262 $ 2,418
<CAPTION>
- ---------------------------------------------------------------------------------------------
STRONG GLOBAL HIGH-YIELD BOND FUND
- ---------------------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE BONDS 59.1%
Argentina 3.7%
YPF Sociedad Anonima Notes, 7.75%,
Due 8/27/07 50,000 USD $ 47,908
Bermuda 7.8%
Global Crossing Holding, Ltd. Senior Notes,
9.625%, Due 5/15/08 100,000 USD 102,000
Canada 4.4%
AT&T Canada, Inc. Senior Notes, 10.625%,
Due 11/01/08 50,000 USD 57,000
South Korea 7.2%
Korea Electric Power Company Notes, 6.375%,
Due 12/01/03 100,000 USD 94,266
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
STRONG GLOBAL HIGH-YIELD BOND FUND (continued)
- ---------------------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
United States 36.0%
AP Holdings, Inc. Senior Discount Notes,
Zero %, Due 3/15/08 (Rate Reset
Effective 3/15/03) $ 250,000 $ 121,563
Jones Intercable, Inc. Senior Notes, 9.625%,
Due 3/15/02 75,000 78,566
Lyondell Chemical Company Senior Secured
Notes, Series B, 9.875%, Due 5/01/07 100,000 100,000
Nextlink Communications, Inc. Senior Notes,
10.75%, Due 6/01/09 100,000 102,500
Transwestern Publishing Company LP/TWP
Capital Corporation II Senior Subordinated
Notes, Series D, 9.625%, Due 11/15/07 70,000 67,812
-----------
470,441
- -------------------------------------------------------------------------------------------
Total Corporate Bonds (Cost $824,310) 771,615
- -------------------------------------------------------------------------------------------
GOVERNMENT & AGENCY ISSUES 14.4%
Mexico 14.3%
United Mexican States Bonds, 6.25%,
Due 12/31/19 250,000 USD 187,350
Russia 0.1%
Vnesheconomobank Floating Rate
Debentures, 6.0625%, Due 12/15/15
(Acquired 6/02/98; Cost $5,109) (Defaulted
Effective 6/02/99) (d) 8,770 USD 1,020
- -------------------------------------------------------------------------------------------
Total Government & Agency Issues (Cost $204,897) 188,370
- -------------------------------------------------------------------------------------------
PREFERRED STOCKS 7.7%
United States
R&B Falcon Corporation 13.875% Senior 107 101,241
- -------------------------------------------------------------------------------------------
Total Preferred Stocks (Cost $105,299) 101,241
- -------------------------------------------------------------------------------------------
WARRANTS 1.9%
United States
R&B Falcon Corporation Warrants, Expire 5/01/09
(Acquired 5/07/99; Cost $8,250) (d) 100 25,000
- -------------------------------------------------------------------------------------------
Total Warrants (Cost $8,250) 25,000
- -------------------------------------------------------------------------------------------
COMMON STOCKS 0.1%
United States 0.1%
OpTel, Inc. Non-Voting (Acquired 3/18/98;
Cost $6,750) (b) (d) 150 750
- -------------------------------------------------------------------------------------------
Total Common Stocks (Cost $6,750) 750
- -------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 13.5%
Commercial Paper 5.0%
Interest Bearing, Due Upon Demand
United States
United States Cayman Eurodollar Call
Deposit, 4.25% $ 66,000 66,000
Government & Agency Issues 0.8%
United States
United States Treasury Bills, Due 11/18/99 (c) 10,000 9,980
Time Deposits 7.7%
United States
Bank of Scotland, 5.25%, Due 11/01/99 100,000 100,000
- -------------------------------------------------------------------------------------------
Total Short-Term Investments (Cost $175,979) 175,980
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Total Investments in Securities (Cost $1,325,485) 96.7% 1,262,956
Other Assets and Liabilities, Net 3.3% 43,233
- -------------------------------------------------------------------------------------------
NET ASSETS 100.0% $ 1,306,189
===========================================================================================
<CAPTION>
- ---------------------------------------------------------------------------------------------
FUTURES
- ---------------------------------------------------------------------------------------------
Underlying
Expiration Face Amount Unrealized
Date at Value Appreciation
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Sold:
1 U.S. Treasury Bonds 12/99 $ 113,594 $ 410
<CAPTION>
- ---------------------------------------------------------------------------------------------
STRONG INTERNATIONAL BOND FUND
- ---------------------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE BONDS 2.0%
Denmark 0.2%
Nykredit Bonds, 8.00%, Due 10/01/29 295,000 DKK $ 42,805
New Zealand 1.5%
International Bank for Reconstruction and
Development Medium-Term Notes, Zero %,
Due 8/20/07 1,000,000 NZD 276,428
United States 0.3%
Bank of Boston Corporation Subordinated
Floating Rate Notes, 5.625%, Due 2/28/01 $ 50,000 49,731
- -------------------------------------------------------------------------------------------
Total Corporate Bonds (Cost $487,724) 368,964
- -------------------------------------------------------------------------------------------
GOVERNMENT & AGENCY ISSUES 57.9%
Australia 2.5%
Australian Government Bonds, 7.50%,
Due 7/15/05 700,000 AUD 469,316
Denmark 7.0%
Kingdom of Denmark Notes:
7.00%, Due 11/15/07 4,250,000 DKK 660,342
9.00%, Due 11/15/00 4,400,000 DKK 655,786
-----------
1,316,128
Finland 3.1%
Government of Finland Bonds, 10.00%,
Due 9/15/01 3,000,000 FIM 588,141
France 5.7%
Government of France Debentures, 8.50%,
Due 11/25/02 914,694 EUR 1,078,950
Germany 23.6%
Republic of Germany Bonds, Series 97, 6.00%,
Due 7/04/07 2,072,583 EUR 2,288,830
Republic of Germany Debentures, Series 94,
7.50%, Due 11/11/04 1,815,086 EUR 2,140,629
-----------
4,429,459
Italy 16.0%
Buoni Poliennali Del Tes Bonds, 7.75%,
Due 11/01/06 2,478,988 EUR 2,994,627
- -------------------------------------------------------------------------------------------
Total Government & Agency Issues (Cost $12,024,179) 10,876,621
- -------------------------------------------------------------------------------------------
NON-AGENCY MORTGAGE & ASSET-BACKED
SECURITIES 7.8%
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 $11,021,561 113,632
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 $317,809) (d) 322,572 318,419
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
SCHEDULES OF INVESTMENTS IN SECURITIES ((continued)) October 31, 1999
- ---------------------------------------------------------------------------------------------
STRONG INTERNATIONAL BOND FUND (continued)
- ---------------------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
DLJ Mortgage Acceptance Corporation Variable
Rate Mortgage Pass-Thru Certificates:
Series 1990-2, Class A, 6.6339%, Due 1/25/22 $ 209,513 $ 209,154
Series 1991-3, Class A1, 6.5128%, Due 2/20/21 387,758 385,933
Merrill Lynch Home Equity Acceptance, Inc.
Subordinated Variable Rate Mortgage-Backed
Certificates, Series 1994-A, Class A-1, 6.375%,
Due 8/17/23 52,027 51,735
Resolution Trust Corporation Mortgage
Pass-Thru Securities, Inc. Variable Rate
Mortgage Pass-Thru Certificates, Series
1995-1, Class B-5, 6.6136%, Due 10/25/28 383,236 386,976
- -------------------------------------------------------------------------------------------
Total Non-Agency Mortgage & Asset-Backed
Securities (Cost $1,338,881) 1,465,849
- -------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 25.7%
Commercial Paper 0.0%
Interest Bearing, Due Upon Demand
United States
United States Cayman Eurodollar Call
Deposit, 4.25% 6,000 6,000
Corporate Bonds 5.4%
Canada
Trizec Hahn Corporation Debentures, 6.10%,
Due 9/01/00 1,500,000 CAD 1,017,981
Government & Agency Issues 2.2%
United States
United States Treasury Bills, Due 11/18/99 (c) $ 150,000 149,698
United States Treasury Notes, 6.25%,
Due 5/31/00 250,000 251,250
-----------
Total Government & Agency Issues 400,948
Time Deposits 18.1%
United States
Bank of Scotland, 5.25%, Due 11/01/99 900,000 900,000
Dresdner Bank, 5.125%, Due 11/01/99 900,000 900,000
Republic National Bank of New York, 5.1875%,
Due 11/01/99 900,000 900,000
Royal Bank of Canada, 5.2187%, Due 11/01/99 700,000 700,000
-----------
Total Time Deposits 3,400,000
- -------------------------------------------------------------------------------------------
Total Short-Term Investments (Cost $4,821,894) 4,824,929
===========================================================================================
Total Investments in Securities (Cost $18,672,678) 93.4% 17,536,363
Other Assets & Liabilities, Net 6.6% 1,235,532
- -------------------------------------------------------------------------------------------
NET ASSETS 100.0% $ 18,771,895
===========================================================================================
<CAPTION>
FUTURES
- ---------------------------------------------------------------------------------------------
Underlying
Expiration Face Amount Unrealized
Date at Value Appreciation
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Purchased:
4 Ten-Year Euro Bonds 12/99 $ 445,204 ($10,385)
4 Ten-Year Japanese Government Bonds 3/00 5,018,398 93,139
9 Ten-Year United Kingdom
Government Bonds 12/99 1,594,216 (35,328)
<CAPTION>
- ---------------------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
- ---------------------------------------------------------------------------------------------
Settlement Unrealized
Date Value in USD Depreciation
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Purchased:
2,858,338 EUR 2/07/00 $3,038,047 ($81,368)
350,000 GBP 4/04/00 575,976 (3,099)
645,530,000 JPY 11/12/99 6,214,526 748,566
Sold:
1,000,000 AUD 4/04/00 638,727 19,274
450,000 CAD 4/04/00 307,028 664
9,615,000 DKK 4/04/00 1,378,420 16,271
1,380,000 EUR 2/07/00 1,466,763 (971)
30,000,000 JPY 2/07/00 293,113 (23,656)
- ---------------------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------------
STRONG SHORT-TERM GLOBAL BOND FUND
- ---------------------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE BONDS 23.7%
Canada 0.9%
MetroNet Communications Corporation
Senior Notes, 12.00%, Due 8/15/07 350,000 USD $ 409,500
Denmark 0.6%
Nykredit Bonds, 8.00%, Due 10/01/29 1,875,000 DKK 272,067
New Zealand 0.6%
International Bank for Reconstruction and
Development Medium-Term Notes, Zero %,
Due 8/20/07 1,000,000 NZD 276,428
United Kingdom 4.4%
LCR Finance PLC Senior Bonds, 4.50%,
Due 12/07/28 (Acquired 2/10/99;
Cost $1,619,593) (d) 1,000,000 GBP 1,481,918
Telewest PLC Senior Discount Debentures,
Zero %, Due 10/01/07 (Rate Reset
Effective 10/01/00) 500,000 USD 456,875
-----------
1,938,793
United States 17.2%
Atlas Air, Inc. Pass-Thru Certificates,
Series 1998-1, Class C, 8.01%, Due 1/02/10 $ 937,400 889,344
Bank of Boston Corporation Subordinated
Floating Rate Notes, 5.625%, Due 2/28/01 100,000 99,462
Bresnan Communications Group LLC/Bresnan
Capital Corporation Senior Discount Notes,
Series B, Zero %, Due 2/01/09 (Rate Reset
Effective 2/01/04) 1,500,000 1,025,625
Dial Call Communications, Inc. Senior
Discount Notes, Series B, 10.25%,
Due 12/15/05 1,000,000 1,025,000
GS Escrow Corporation Senior Notes, 6.75%,
Due 8/01/01 1,000,000 974,567
HRPT Properties Trust Floating Rate Notes,
7.4263%, Due 7/09/07 (Remarketing
Date 7/09/00) 1,000,000 998,830
MCI Worldcom Senior Notes, 13.50%,
Due 12/15/02 1,000,000 1,137,500
Triton Energy, Ltd./Triton Energy Corporation
Senior Notes, 8.75%, Due 4/15/02 1,000,000 995,000
Waste Management, Inc. Senior Notes, 6.50%,
Due 12/15/02 500,000 450,009
-----------
7,595,337
- -------------------------------------------------------------------------------------------
Total Corporate Bonds (Cost $10,766,767) 10,492,125
- -------------------------------------------------------------------------------------------
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
STRONG SHORT-TERM GLOBAL BOND FUND (continued)
- ---------------------------------------------------------------------------------------------
Shares or
Principal Value
Amount (Note 2)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
GOVERNMENT & AGENCY ISSUES 31.5%
Australia 3.9%
Australian Government Bonds, 7.50%,
Due 7/15/05 2,600,000 AUD $ 1,743,174
Germany 4.0%
Republic of Germany Bonds, Series 97, 6.00%,
Due 7/04/07 1,575,000 EUR 1,747,365
United States 23.6%
FHLMC Multi-Class Mortgage Participation
Certificates, 9.50%, Due 6/15/06 $ 969,868 1,007,044
FHLMC Participation Certificates:
7.00%, Due 5/01/03 thru 7/15/06 1,675,689 1,685,756
7.557%, Due 7/01/10 263,480 265,134
9.00%, Due 8/01/18 731,374 771,311
10.00%, Due 6/01/05 411,919 425,696
FNMA Guaranteed Mortgage Pass-Thru
Cerificates, Pool #372179, 11.00%, Due 4/01/12 303,944 325,441
FNMA Guaranteed Real Estate Mortgage
Investment Conduit Pass-Thru Certificates,
10.50%, Due 8/01/20 265,817 288,260
FNMA Guaranteed Real Estate Mortgage
Investment Conduit Variable Rate Mortgage
Certificates, Pool #365418, 6.357%,
Due 1/01/23 410,436 413,082
FNMA Guaranteed Real Estate Mortgage
Investment Conduit Variable Rate Pass-
Thru Certificates, Pool #313629, 8.50%,
Due 11/01/02 1,333,037 1,363,980
GNMA Guaranteed Pass-Thru Certificates,
Pool #234503, 9.50%, Due 12/15/17 3,632,192 3,901,987
-----------
10,447,691
- -------------------------------------------------------------------------------------------
Total Government & Agency Issues (Cost $13,981,137) 13,938,230
- -------------------------------------------------------------------------------------------
NON-AGENCY MORTGAGE & ASSET-BACKED
SECURITIES 24.9%
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 $635,617) (d) 645,144 636,837
DLJ Acceptance Trust Collateralized Mortgage
Obligation, Series 1989-1, Class F, 11.00%,
Due 8/01/19 1,677,906 1,849,058
DLJ Mortgage Acceptance Corporation Variable
Rate Mortgage Pass-Thru Certificates:
Series 1990-2, Class A, 6.6339%, Due 1/25/22 838,052 836,614
Series 1991-3, Class A1, 6.5128%, Due 2/20/21 775,517 771,867
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 2,203,053
Kmart CMBS Financing, Inc. Floating Rate
Commercial Mortgage Pass-Thru Certificates,
Series 1997-1, Class D, 6.50%, Due 3/01/07
(Acquired 2/21/97; Cost $2,000,000) (d) 2,000,000 1,988,650
Merrill Lynch Credit Corporation Mortgage
Investors, Inc. Senior Subordinated Variable
Rate Mortgage Pass-Thru Certificates,
Series 1994-A, Class A4, 6.6166%, Due 7/15/19 928,631 949,832
Merrill Lynch Home Equity Acceptance, Inc.
Subordinated Variable Rate Mortgage-Backed
Certificates, Series 1994-A, Class A-1, 6.375%,
Due 8/17/23 34,685 34,490
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 $303,339) (d) $ 302,206 $ 301,922
Series 1995-1, Class B-5, 6.6136%, Due 10/25/28 185,321 187,129
Resolution Trust Corporation Variable Rate
Mortgage Pass-Thru Securities, Inc.
Commercial Certificates, Series 1992-C8,
Class A-2, 6.7875%, Due 12/25/23 313,470 313,980
Ryland Mortgage Securities Corporation Variable
Rate Mortgage Participation Securities:
Series 1990-C1, Class A, 5.8999%, Due 10/25/20 553,517 551,442
Series 1992-3, Class A-2, 6.6426%, Due 6/25/20 398,634 399,068
- -------------------------------------------------------------------------------------------
Total Non-Agency Mortgage & Asset-Backed
Securities (Cost $10,955,680) 11,023,942
- -------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 18.8%
Commercial Paper 1.4%
Interest Bearing, Due Upon Demand
United States
United States Cayman Eurodollar Call
Deposit, 4.25% 636,000 636,000
Convertible Bonds 1.1%
United States
Corporate Express, Inc. Subordinated
Notes, 4.50%, Due 7/01/00 500,000 496,875
Corporate Bonds 3.3%
Canada 1.6%
Trizec Hahn Corporation Debentures, 6.10%,
Due 9/01/00 1,000,000 CAD 678,654
United States 1.7%
Niagara Mohawk Power Corporation
Senior Notes, Series B, 7.00%, Due 10/01/00 $ 756,098 758,740
-----------
Total Corporate Bonds 1,437,394
Government & Agency Issues 0.3%
United States
United States Treasury Bills, Due 11/18/99 (c) 120,000 119,758
Time Deposits 12.7%
United States
Bank of Scotland, 5.25%, Due 11/01/99 1,400,000 1,400,000
Republic National Bank, 5.1875%,
Due 11/01/99 2,100,000 2,100,000
Royal Bank of Canada, 5.2187%,
Due 11/01/99 2,100,000 2,100,000
-----------
Total Time Deposits 5,600,000
- -------------------------------------------------------------------------------------------
Total Short-Term Investments (Cost $8,275,590) 8,290,027
===========================================================================================
Total Investments in Securities (Cost $43,979,174) 98.9% 43,744,324
Other Assets and Liabilities, Net 1.1% 466,866
- -------------------------------------------------------------------------------------------
NET ASSETS 100.0% $ 44,211,190
===========================================================================================
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
SCHEDULES OF INVESTMENTS IN SECURITIES (continued) October 31, 1999
- ---------------------------------------------------------------------------------------------
STRONG SHORT-TERM GLOBAL BOND FUND (continued)
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
FUTURES
- ---------------------------------------------------------------------------------------------
Underlying Unrealized
Expiration Face Amount Appreciation
Date at Value (Depreciation)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Purchased:
25 Ten-Year Euro Bonds 12/99 $2,782,524 ($64,800)
Sold:
16 Five-Year U.S. Treasury Notes 12/99 1,727,250 (12,818)
9 Ten-Year Australian
Government Bonds 12/99 793,838 11,678
14 Ten-Year United Kingdom
Government Bonds 12/99 2,479,892 34,656
<CAPTION>
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
- ---------------------------------------------------------------------------------------------
Settlement Unrealized
Date Value in USD Appreciation
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Sold:
1,250,000 AUD 2/07/00 $ 798,171 $26,992
1,250,000 AUD 3/07/00 798,292 8,271
1,000,000 CAD 4/04/00 682,284 1,476
1,833,000 DKK 4/04/00 262,781 3,102
1,700,000 EUR 2/07/00 1,806,882 17,898
870,000 GBP 4/04/00 1,431,713 1,177
580,000 NZD 2/07/00 294,944 17,119
</TABLE>
- --------------------------------------------------------------------------------
CURRENCY ABBREVIATIONS
- --------------------------------------------------------------------------------
AUD Australian Dollar
CAD Canadian Dollar
DKK Danish Krone
EUR Euro
FIM Finnish Mark
GBP British Pound
JPY Japanese Yen
NZD New Zealand Dollar
USD United States Dollar
LEGEND
- --------------------------------------------------------------------------------
(a) Short-term investments include any security which has a remaining 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.)
Percentages are stated as a percent of net assets.
See Notes to Financial Statements.
24
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES
- ------------------------------------------------------------------------------------------------------------------------------------
October 31, 1999
(In Thousands, Except per Share Amounts)
Strong Asia Strong Foreign Strong International Strong
Pacific Fund MajorMarkets Fund Stock Fund Overseas Fund
-------------- ------------------- ---------------------- ---------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in Securities, at Value
Unaffiliated Issuers (Cost of $96,578, $1,897,
$70,743 and $5,132, respectively) $102,176 $2,028 $111,163 $7,302
Affiliated Issuers (Cost of $0, $0, $635 and
$0, respectively) -- -- 635 --
Receivable for Securities Sold 258 -- -- --
Receivable for Fund Shares Sold 1,803 -- 533 --
Dividends and Interest Receivable 235 4 111 5
Other Assets 124 9 102 15
-------- ------ -------- ------
Total Assets 104,596 2,041 112,544 7,322
LIABILITIES:
Payable for Securities and Forward
Foreign Currency Contracts Purchased 1,101 18 80 70
Payable for Fund Shares Redeemed 51 -- -- --
Accrued Operating Expenses and Other Liabilities 39 -- 47 1
-------- ------ -------- ------
Total Liabilities 1,191 18 127 71
-------- ------ -------- ------
NET ASSETS $103,405 $2,023 $112,417 $7,251
======== ====== ======== ======
NET ASSETS CONSIST OF:
Capital Stock (par value and paid-in capital) $ 98,722 $1,697 $134,182 $5,460
Undistributed Net Investment Income 1,715 4 -- --
Accumulated Net Realized Gain (Loss) (2,641) 183 (62,099) (376)
Net Unrealized Appreciation 5,609 139 40,334 2,167
-------- ------ -------- ------
Net Assets $103,405 $2,023 $112,417 $7,251
======== ====== ======== ======
Capital Shares Outstanding (Unlimited Number Authorized) 10,748 172 8,653 505
NET ASSET VALUE PER SHARE $9.62 $11.78 $12.99 $14.37
======== ====== ======== ======
</TABLE>
See Notes to Financial Statements.
25
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
October 31, 1999
(In Thousands, Except per Share Amounts)
Strong Global Strong Strong
High-Yield International Short-Term Global
Bond Fund Bond Fund Bond Fund
--------------- --------------- -------------------
<S> <C> <C> <C>
ASSETS:
Investments in Securities, At Value
(Cost of $1,325, $18,673 and $43,979, respectively) $1,263 $17,536 $43,744
Receivable for Securities and Forward
Foreign Currency Contracts Sold 104 804 133
Receivable for Fund Shares Sold 30 6 144
Interest and Dividends Receivable 29 498 446
Other Assets 9 48 4
------ ------- -------
Total Assets 1,435 18,892 44,471
LIABILITIES:
Payable for Securities and Forward
Foreign Currency Contracts Purchased 102 100 --
Payable for Fund Shares Redeemed -- 5 3
Dividends Payable 12 -- 233
Accrued Operating Expenses and Other Liabilities 15 15 24
------ ------- -------
Total Liabilities 129 120 260
------ ------- -------
NET ASSETS $1,306 $18,772 $44,211
====== ======= =======
NET ASSETS CONSIST OF:
Capital Stock (par value and paid-in capital) $1,794 $20,027 $47,946
Undistributed Net Investment Income -- 112 490
Accumulated Net Realized Loss (426) (944) (4,035)
Net Unrealized Depreciation (62) (423) (190)
------ ------- -------
Net Assets $1,306 $18,772 $44,211
====== ======= =======
Capital Shares Outstanding (Unlimited Number Authorized) 148 1,764 4,331
NET ASSET VALUE PER SHARE $8.83 $10.64 $10.21
====== ======= =======
</TABLE>
See Notes to Financial Statements.
26
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------------------
For the Year Ended October 31, 1999
(In Thousands)
Strong Foreign Strong Strong
Strong Asia MajorMarkets International Overseas
Pacific Fund Fund Stock Fund Fund
-------------- -------------- --------------- ----------
<S> <C> <C> <C> <C>
INCOME:
Dividends (net of foreign withholding taxes of
$66, $4, $86 and $4, respectively) $ 801 $ 34 $ 937 $ 36
Interest 325 6 114 15
------- ---- ------- ------
Total Income 1,126 40 1,051 51
EXPENSES:
Investment Advisory Fees 570 18 985 46
Custodian Fees 235 82 82 54
Shareholder Servicing Costs 227 6 478 16
Professional Fees 20 9 36 10
Reports to Shareholders 44 1 92 2
Federal and State Registration Fees 47 18 29 7
Other 28 2 50 1
------- ---- ------- ------
Total Expenses before Absorptions 1,171 136 1,752 136
Involuntary Expense Absorptions by Advisor (173) (100) -- (45)
------- ---- ------- ------
Expenses, Net 998 36 1,752 91
------- ---- ------- ------
NET INVESTMENT INCOME (LOSS) 128 4 (701) (40)
REALIZED AND UNREALIZED GAIN (LOSS):
Net Realized Gain (Loss) on:
Investments 18,248 171 (77) 270
Futures and Forward Foreign Currency Contracts (90) 41 (167) (10)
Foreign Currencies (1) -- 40 2
------- ---- ------- ------
Net Realized Gain (Loss) 18,157 212 (204) 262
Net Change in Unrealized Appreciation/Depreciation on:
Investments 7,677 208 39,554 2,115
Futures and Forward Foreign Currency Contracts 107 7 (80) (2)
Foreign Currencies 31 -- (6) --
------- ---- ------- ------
Net Change in Unrealized Appreciation/Depreciation 7,815 215 39,468 2,113
------- ---- ------- ------
NET GAIN ON INVESTMENTS 25,972 427 39,264 2,375
------- ---- ------- ------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $26,100 $431 $38,563 $2,335
======= ==== ======= ======
</TABLE>
See Notes to Financial Statements.
27
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
For the Year Ended October 31, 1999
(In Thousands)
Strong Global Strong Strong
High-Yield International Short-Term Global
Bond Fund Bond Fund Bond Fund
--------------- --------------- -------------------
<S> <C> <C> <C>
INCOME:
Interest (net of foreign withholding taxes of $0, $4 and $12, respectively) $121 $1,183 $3,570
Dividends 20 -- --
---- ------ ------
Total Income 141 1,183 3,570
EXPENSES:
Investment Advisory Fees 11 129 334
Custodian Fees 29 36 38
Shareholder Servicing Costs 6 63 128
Professional Fees 9 16 21
Federal and State Registration Fees 17 28 28
Organization Expense 5 18 14
Other 3 12 21
---- ------ ------
Total Expenses before Absorptions 80 302 584
Involuntary Expense Absorptions by Advisor (50) -- --
---- ------ ------
Expenses, Net 30 302 584
---- ------ ------
NET INVESTMENT INCOME 111 881 2,986
REALIZED AND UNREALIZED GAIN (LOSS):
Net Realized Gain (Loss) on:
Investments (6) 38 (503)
Futures and Forward Foreign Currency Contracts 15 136 237
Foreign Currencies -- (3) 20
---- ------ ------
Net Realized Gain (Loss) 9 171 (246)
Net Change in Unrealized Appreciation/Depreciation on:
Investments 16 (1,814) 61
Futures and Forward Foreign Currency Contracts -- (243) 789
Foreign Currencies -- (40) (37)
---- ------ ------
Net Change in Unrealized Appreciation/Depreciation 16 (2,097) 813
---- ------ ------
NET GAIN (LOSS) ON INVESTMENTS 25 (1,926) 567
---- ------ ------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $136 ($1,045) $3,553
==== ====== ======
</TABLE>
See Notes to Financial Statements.
28
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
(In Thousands)
Strong Asia Strong Foreign
Pacific Fund MajorMarkets Fund
--------------------------------- ---------------------------------
Year Ended Year Ended Year Ended Year Ended
Oct. 31, 1999 Oct. 31, 1998 Oct. 31, 1999 Oct. 31, 1998
--------------- --------------- --------------- ---------------
(Note 1)
<S> <C> <C> <C> <C>
OPERATIONS:
Net Investment Income (Loss) $ 128 $ 267 $ 4 ($ 3)
Net Realized Gain (Loss) 18,157 (16,246) 212 (34)
Net Change in Unrealized Appreciation/Depreciation 7,815 9,279 215 (76)
-------- ------- ------ ------
Net Increase (Decrease) in Net Assets
Resulting from Operations 26,100 (6,700) 431 (113)
DISTRIBUTIONS:
From Net Investment Income -- (267) -- --
In Excess of Net Investment Income -- (84) -- --
-------- ------- ------ ------
Total Distributions -- (351) -- --
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 237,030 52,969 2,771 1,990
Proceeds from Reinvestment of Distributions -- 335 -- --
Payment for Shares Redeemed (181,435) (54,629) (2,643) (413)
-------- ------- ------ ------
Net Increase (Decrease) in Net Assets from
Capital Share Transactions 55,595 (1,325) 128 1,577
-------- ------- ------ ------
TOTAL INCREASE (DECREASE) IN NET ASSETS 81,695 (8,376) 559 1,464
NET ASSETS:
Beginning of Year 21,710 30,086 1,464 --
-------- ------- ------ ------
End of Year $103,405 $21,710 $2,023 $1,464
======== ======= ====== ======
TRANSACTIONS IN SHARES OF THE FUND:
Sold 28,350 9,078 265 203
Issued in Reinvestment of Distributions -- 50 -- --
Redeemed (21,597) (9,224) (250) (46)
------ ----- --- --
Net Increase (Decrease) in Shares of the Fund 6,753 (96) 15 157
====== ===== === ===
</TABLE>
See Notes to Financial Statements.
29
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
(In Thousands)
Strong International Strong
Stock Fund Overseas Fund
--------------------------------- ---------------------------------
Year Ended Year Ended Year Ended Year Ended
Oct. 31, 1999 Oct. 31, 1998 Oct. 31, 1999 Oct. 31, 1998
--------------- --------------- --------------- ---------------
(Note 1)
<S> <C> <C> <C> <C>
OPERATIONS:
Net Investment Loss ($ 701) ($ 70) ($ 40) ($ 7)
Net Realized Gain (Loss) (204) (60,196) 262 (686)
Net Change in Unrealized Appreciation/Depreciation 39,468 33,590 2,113 54
-------- -------- ------ ------
Net Increase (Decrease) in Net Assets
Resulting from Operations 38,563 (26,676) 2,335 (639)
DISTRIBUTIONS:
In Excess of Net Investment Income (571) (3,779) -- --
From Net Realized Gains -- (3,501) -- --
-------- -------- ------ ------
Total Distributions (571) (7,280) -- --
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 150,687 116,828 9,498 4,935
Proceeds from Reinvestment of Distributions 554 7,097 -- --
Payment for Shares Redeemed (172,836) (174,055) (7,309) (1,569)
-------- -------- ------ ------
Net Increase (Decrease) in Net Assets from
Capital Share Transactions (21,595) (50,130) 2,189 3,366
-------- -------- ------ ------
TOTAL INCREASE (DECREASE) IN NET ASSETS 16,397 (84,086) 4,524 2,727
NET ASSETS:
Beginning of Year 96,020 180,106 2,727 --
-------- -------- ------ ------
End of Year $112,417 $ 96,020 $7,251 $2,727
======== ======== ====== ======
TRANSACTIONS IN SHARES OF THE FUND:
Sold 14,284 11,039 820 516
Issued in Reinvestment of Distributions 56 655 -- --
Redeemed (16,416) (15,984) (647) (184)
------ ------ --- ---
Net Increase (Decrease) in Shares of the Fund (2,076) (4,290) 173 332
======== ======== ====== ======
</TABLE>
See Notes to Financial Statements.
30
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
(In Thousands)
Strong Global Strong International
High-Yield Bond Fund Bond Fund
--------------------------------- ---------------------------------
Year Ended Year Ended Year Ended Year Ended
Oct. 31, 1999 Oct. 31, 1998 Oct. 31, 1999 Oct. 31, 1998
--------------- --------------- --------------- ---------------
(Note 1)
<S> <C> <C> <C> <C>
OPERATIONS:
Net Investment Income $ 111 $ 255 $ 881 $ 1,179
Net Realized Gain (Loss) 9 (435) 171 (940)
Net Change in Unrealized Appreciation/Depreciation 16 (79) (2,097) 1,562
------ ------- ------- -------
Net Increase (Decrease) in Net Assets
Resulting from Operations 136 (259) (1,045) 1,801
DISTRIBUTIONS:
From Net Investment Income (111) (255) (1,075) (1,288)
In Excess of Net Realized Gains -- -- -- (579)
------ ------- ------- -------
Total Distributions (111) (255) (1,075) (1,867)
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 1,364 10,304 12,058 11,254
Proceeds from Reinvestment of Distributions 89 215 995 1,719
Payment for Shares Redeemed (1,694) (8,483) (12,320) (20,952)
------ ------- ------- -------
Net Increase (Decrease) in Net Assets from
Capital Share Transactions (241) 2,036 733 (7,979)
------ ------- ------- -------
TOTAL INCREASE (DECREASE) IN NET ASSETS (216) 1,522 (1,387) (8,045)
NET ASSETS:
Beginning of Year 1,522 -- 20,159 28,204
------ ------- ------- -------
End of Year $1,306 $ 1,522 $18,772 $20,159
====== ======= ======= =======
TRANSACTIONS IN SHARES OF THE FUND:
Sold 150 1,023 1,111 1,025
Issued in Reinvestment of Distributions 10 22 89 164
Redeemed (187) (870) (1,131) (1,930)
--- ---- ----- -----
Net Increase (Decrease) in Shares of the Fund (27) 175 69 (741)
=== ==== ===== =====
</TABLE>
See Notes to Financial Statements.
31
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
(In Thousands)
Strong Short-Term
Global Bond Fund
---------------------------------
Year Ended Year Ended
Oct. 31, 1999 Oct. 31, 1998
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Net Investment Income $ 2,986 $ 5,363
Net Realized Loss (246) (3,115)
Net Change in Unrealized Appreciation/Depreciation 813 1,414
------- --------
Net Increase in Net Assets Resulting from Operations 3,553 3,662
DISTRIBUTIONS:
From Net Investment Income (3,197) (5,363)
In Excess of Net Investment Income -- (281)
From Net Realized Gains -- (778)
------- --------
Total Distributions (3,197) (6,422)
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 21,365 49,328
Proceeds from Reinvestment of Distributions 3,126 6,320
Payment for Shares Redeemed (56,039) (93,209)
------- --------
Net Decrease in Net Assets from Capital Share Transactions (31,548) (37,561)
------- --------
TOTAL DECREASE IN NET ASSETS (31,192) (40,321)
NET ASSETS:
Beginning of Year 75,403 115,724
------- --------
End of Year $44,211 $ 75,403
======= ========
TRANSACTIONS IN SHARES OF THE FUND:
Sold 2,089 4,741
Issued in Reinvestment of Distributions 306 608
Redeemed (5,482) (8,972)
----- -----
Net Decrease in Shares of the Fund (3,087) (3,623)
===== =====
</TABLE>
See Notes to Financial Statements.
32
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
October 31, 1999
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 -- Securities of the Funds are valued at fair value
through valuations obtained by a commercial pricing service or the
mean of the latest bid and asked prices when no last sales price is
available. 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 October 31, 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 $ 223,642 $ 207,090 0.2% 100.0%
Strong International Stock Fund 635,000 635,000 0.6% 0.0%
Strong Global High-Yield Bond Fund 20,109 26,770 2.1% 93.4%
Strong International Bond Fund 317,809 318,419 1.7% 100.0%
Strong Short-Term Global Bond Fund 4,558,549 4,409,327 10.0% 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 has been determined to be
liquid by the Advisor based upon guidelines established by the Fund's
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.
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.
33
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
October 31, 1999
(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 transactions, due to
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. Additional securities held by the Funds may
be designated as collateral on written options.
(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
certain expenses at its discretion. Shareholder recordkeeping and related
service fees are based on contractually established rates for each open and
closed shareholder account. The Advisor is compensated for certain other
services related to costs incurred for reports to shareholders.
34
<PAGE>
- --------------------------------------------------------------------------------
The Funds may invest cash in money market funds sponsored and managed by the
Advisor, subject to certain limitations. The terms of such transactions are
identical to those of non-related entities except that, to avoid duplicate
investment advisory fees, advisory fees of each Fund are reduced by an
amount equal to advisory fees paid to the Advisor under its investment
advisory agreement with the money market funds.
Certain information regarding related party transactions, excluding the
effect of waivers and absorptions, for the year ended October 31, 1999 is as
follows:
<TABLE>
<CAPTION>
Payable to Shareholder Servicing Unaffiliated
Advisor at and Other Expenses Directors'
October 31, 1999 Paid to Advisor Fees
------------------ ----------------------- --------------
<S> <C> <C> <C>
Strong Asia Pacific Fund $2,127 $224,865 $1,500
Strong Foreign MajorMarkets Fund -- 5,377 1,525
Strong International Stock Fund 14,219 482,134 1,857
Strong Overseas Fund 119 13,083 1,525
Strong Global High-Yield Bond Fund 9,772 5,570 1,500
Strong International Bond Fund 2,192 60,514 1,500
Strong Short-Term Global Bond Fund 5,240 126,348 1,500
</TABLE>
The Advisor owns 58.2% and 41.3% of Strong Foreign MajorMarkets Fund and
Strong Overseas Fund, respectively, at October 31, 1999.
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 .08% per annum is incurred on the unused portion of the
line of credit and is allocated to all participating Strong Funds. At
October 31, 1999, there were no borrowings by the Strong Funds under the
LOC.
5. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of long-term securities for the year
ended October 31, 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 $ -- $139,474,016 $ -- $103,770,604
Strong Foreign MajorMarkets Fund -- 2,382,861 -- 2,294,033
Strong International Stock Fund -- 83,116,035 -- 106,260,246
Strong Overseas Fund -- 6,353,019 -- 4,545,214
Strong Global High-Yield Bond Fund -- 4,902,860 -- 5,022,430
Strong International Bond Fund -- 7,021,209 511,719 7,813,771
Strong Short-Term Global Bond Fund 3,441,451 32,092,770 11,084,883 56,388,581
</TABLE>
6. INCOME TAX INFORMATION
At October 31, 1999, the investment cost, gross unrealized appreciation and
depreciation on investments and capital loss carryovers (expiring in
varying amounts through 2007) for federal income tax purposes were as
follows:
<TABLE>
<CAPTION>
Federal Tax Unrealized Unrealized Net Appreciation/ Net Capital Loss
Cost Appreciation Depreciation (Depreciation) Carryovers
----------- ------------ ------------ ----------------- ----------------
<S> <C> <C> <C> <C> <C>
Strong Asia Pacific Fund $99,768,039 $ 8,444,569 $6,036,435 $ 2,408,134 $ 2,308,182
Strong Foreign MajorMarkets Fund 1,903,058 191,286 66,021 125,265 --
Strong International Stock Fund 72,402,907 40,556,226 1,160,925 39,395,301 59,576,024
Strong Overseas Fund 5,199,514 2,184,022 81,995 2,102,027 228,116
Strong Global High-Yield Bond Fund 1,334,207 20,691 91,942 (71,251) 416,714
Strong International Bond Fund 18,672,770 132,784 1,269,191 (1,136,407) 944,036
Strong Short-Term Global Bond Fund 43,979,728 295,707 531,111 (235,404) 4,048,359
</TABLE>
The Strong Asia Pacific Fund, Strong Foreign MajorMarkets Fund, Strong
Overseas Fund, Strong Global High-Yield Bond Fund and Strong Short-Term
Global Bond Fund utilized $16,167,918, $15,990, $265,329, $9,571 and
$156,660, respectively, of its capital loss carryovers during the year
ended October 31, 1999.
35
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
October 31, 1999
For corporate shareholders in the Funds, the percentages of dividend income
distributed for the year ended October 31, 1999, which are designated as
qualifying for the dividends-received deduction are (unaudited): Strong
Asia Pacific Fund 0.0%, Strong Foreign MajorMarkets Fund 0.0%, Strong
International Stock Fund 0.0%, Strong Overseas Fund 0.0%, Strong Global
High-Yield Bond Fund 8.9%, Strong International Bond Fund 0.0%, and Strong
Short-Term Global Bond Fund 0.0%.
7. INVESTMENTS IN AFFILIATES
Affiliated issuers, as defined under the Investment Company Act of 1940,
include those in which the Fund's holdings of an issuer represent 5% or
more of the outstanding voting securities of the issuer and any other
Strong Fund. A summary of transactions in the securities of these issuers
during the year ended October 31, 1999 is as follows:
<TABLE>
<CAPTION>
Balance of Balance of Dividend
Shares Held Gross Gross Sales Shares Held Value Income
November 1, Purchases and October 31, October 31, Nov. 1, 1998 -
1998 and Additions Reductions 1999 1999 Oct. 31, 1999
----------- ------------- ----------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
STRONG INTERNATIONAL STOCK FUND
-------------------------------
Connemara Green Marble Quarries PLC 50,800 -- -- 50,800 $635,000 --
Connemara Green Marble Quarries PLC
Warrants 8,000 -- -- 8,000 -- --
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------------------------------------------------------------
STRONG ASIA PACIFIC FUND
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended
---------------------------------------------------------
Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31, Dec. 31,
Selected Per-Share Data(a) 1999 1998 1997 1996 1995(b) 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 0.05 0.07 0.01 0.06 0.04 0.05
Net Realized and Unrealized Gains (Losses) on Investments 4.14 (1.90) (2.01) 0.31 0.20 (0.57)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 4.19 (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 $9.62 $5.43 $7.35 $9.51 $9.55 $ 9.35
====================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return +77.2% -25.1% -21.5% +3.8% +2.6% -5.3%
Net Assets, End of Period (In Millions) $103 $22 $30 $72 $55 $58
Ratio of Expenses to Average Net Assets without Waivers or Absorptions 2.0% 2.0% 2.0% 2.0% 2.0%* 2.0%
Ratio of Expenses to Average Net Assets 1.7% 2.0% 2.0% 2.0% 2.0%* 2.0%
Ratio of Net Investment Income to Average Net Assets 0.2% 1.1% 0.1% 0.2% 0.5%* 0.6%
Portfolio Turnover Rate 206.1% 192.9% 96.7% 91.4% 104.3% 103.3%
<CAPTION>
STRONG FOREIGN MAJORMARKETS FUND
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended
------------------
Oct. 31, Oct. 31,
Selected Per-Share Data(a) 1999 1998(c)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period $ 9.31 $10.00
Income From Investment Operations:
Net Investment Income (Loss) 0.03 (0.01)
Net Realized and Unrealized Gains (Losses) on Investments 2.44 (0.68)
- ---------------------------------------------------------------------------------------------
Total from Investment Operations 2.47 (0.69)
Less Distributions:
From Net Investment Income -- --
- ---------------------------------------------------------------------------------------------
Total Distributions -- --
- ---------------------------------------------------------------------------------------------
Net Asset Value, End of Period $11.78 $ 9.31
=============================================================================================
Ratios and Supplemental Data
- ---------------------------------------------------------------------------------------------
Total Return +26.5% -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 Income (Loss) to Average Net Assets 0.2% (0.5%)*
Portfolio Turnover Rate 144.5% 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) In 1995, the Fund changed its fiscal-year end from December to October.
(c) For the period from June 30, 1998 (inception) to October 31, 1998.
See Notes to Financial Statements.
37
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
STRONG INTERNATIONAL STOCK FUND
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended
---------------------------------------------------------
Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31, Dec. 31,
Selected Per-Share Data(a) 1999 1998 1997 1996 1995(b) 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) (0.09) 0.00(c) 0.01 0.17 0.08 0.06
Net Realized and Unrealized Gains (Losses) on Investments 4.19 (2.48) (0.69) 1.11 0.37 (0.27)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 4.10 (2.48) (0.68) 1.28 0.45 (0.21)
Less Distributions:
From Net Investment Income -- (0.00)(c) (0.01) (0.18) (0.07) (0.01)
In Excess of Net Investment Income (0.06) (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 $12.99 $ 8.95 $11.99 $13.75 $13.03 $12.65
====================================================================================================================================
Ratios and Supplemental Data
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return +46.0% -21.4% -5.7% +9.8% +3.6% -1.6%
Net Assets, End of Period (In Millions) $112 $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 (0.7%) (0.1%) 0.5% 0.6% 0.8%* 0.3%
Portfolio Turnover Rate 84.9% 228.2% 143.7% 108.6% 102.0% 136.5%
<CAPTION>
STRONG OVERSEAS FUND
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended
------------------
Oct. 31, Oct. 31,
Selected Per-Share Data(a) 1999 1998(d)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period $ 8.20 $10.00
Income From Investment Operations:
Net Investment Loss (0.08) (0.02)
Net Realized and Unrealized Gains (Losses) on Investments 6.25 (1.78)
- ---------------------------------------------------------------------------------------------
Total from Investment Operations 6.17 (1.80)
Less Distributions:
From Net Investment Income -- --
- ---------------------------------------------------------------------------------------------
Total Distributions -- --
- ---------------------------------------------------------------------------------------------
Net Asset Value, End of Period $14.37 $ 8.20
=============================================================================================
Ratios and Supplemental Data
- ---------------------------------------------------------------------------------------------
Total Return +75.2% -18.0%
Net Assets, End of Period (In Millions) $7 $3
Ratio of Expenses to Average Net Assets 2.0% 2.0%*
Ratio of Net Investment Loss to Average Net Assets (0.9%) (0.7%)*
Portfolio Turnover Rate 106.4% 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) In 1995, the Fund changed its fiscal year-end from December to October.
(c) Amount calculated is less than $0.00.
(d) For the period from June 30, 1998 (inception) to October 31, 1998.
See Notes to Financial Statements.
38
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
STRONG GLOBAL HIGH-YIELD BOND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended
------------------
Oct. 31, Oct. 31,
Selected Per-Share Data (a) 1999 1998(b)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period $8.71 $10.00
Income From Investment Operations:
Net Investment Income 0.67 0.53
Net Realized and Unrealized Gains (Losses) on Investments 0.12 (1.29)
- ---------------------------------------------------------------------------------------------
Total from Investment Operations 0.79 (0.76)
Less Distributions:
From Net Investment Income (0.67) (0.53)
- ---------------------------------------------------------------------------------------------
Total Distributions (0.67) (0.53)
- ---------------------------------------------------------------------------------------------
Net Asset Value, End of Period $8.83 $ 8.71
=============================================================================================
RATIOS AND SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------
Total Return +9.1% -8.0%
Net Assets, End of Period (In Millions) $1 $2
Ratio of Expenses to Average Net Assets 2.0% 2.0%*
Ratio of Net Investment Income to Average Net Assets 7.2% 7.2%*
Portfolio Turnover Rate 380.1% 680.3%
<CAPTION>
STRONG INTERNATIONAL BOND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended
---------------------------------------------------------
Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31, Dec. 31,
Selected Per-Share Data (a) 1999 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 0.54 0.57 1.03 0.80 0.78 0.46
Net Realized and Unrealized Gains (Losses) on Investments (1.14) 0.58 (1.11) 0.15 1.00 0.40
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (0.60) 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 $10.64 $11.89 $11.58 $11.87 $11.48 $10.36
====================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return -5.3% +10.9% -0.7% +8.6% +17.3% +8.7%
Net Assets, End of Period (In Millions) $19 $20 $28 $31 $21 $10
Ratio of Expenses to Average Net Assets without Waivers and Absorptions 1.6% 1.6% 1.5% 1.8% 2.0%* 2.0%*
Ratio of Expenses to Average Net Assets 1.6% 1.5% 0.7% 0.0% 0.0%* 0.0%*
Ratio of Net Investment Income to Average Net Assets 4.7% 5.3% 8.1% 7.4% 8.3%* 7.9%*
Portfolio Turnover Rate 45.7% 158.8% 208.4% 258.3% 473.3% 679.3%
</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 period from January 31, 1998 (inception) to October 31, 1998.
(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.
39
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
STRONG SHORT-TERM GLOBAL BOND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended
---------------------------------------------------------
Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31, Dec. 31,
Selected Per-Share Data (a) 1999 1998 1997 1996 1995(b) 1994(c)
- ------------------------------------------------------------------------------------------------------------------------------------
<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 0.68 0.60 0.81 0.71 0.65 0.35
Net Realized and Unrealized Gains (Losses) on Investments (0.02) (0.21) (0.10) 0.34 0.20 0.16
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.66 0.39 0.71 1.05 0.85 0.51
Less Distributions:
From Net Investment Income (0.62) (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 (0.62) (0.70) (0.97) (0.77) (0.54) (0.36)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $10.21 $10.17 $10.48 $10.74 $10.46 $10.15
====================================================================================================================================
RATIOS AND SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return +6.7% +3.8% +6.8% +10.4% +8.5% +5.1%
Net Assets, End of Period (In Millions) $44 $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 5.6% 5.7% 7.6% 7.4% 8.2%* 7.7%*
Portfolio Turnover Rate 73.1% 145.2% 168.0% 179.7% 437.3% 287.8%
</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) In 1995, the Fund changed its fiscal year-end from December to October.
(c) For the period from March 31, 1994 (inception) to December 31, 1994.
See Notes to Financial Statements.
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Directors of the
Strong International Funds
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments in securities, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of Strong Foreign
MajorMarkets Fund, Strong International Stock Fund, Strong Overseas Fund (three
of the portfolios constituting the Strong International Equity Funds, Inc.),
Strong Global High-Yield Bond Fund, Strong International Bond Fund (two of the
portfolios constituting the Strong International Income Funds, Inc.), Strong
Asia Pacific Fund, Inc. and Strong Short-Term Global Bond Fund, Inc. (the
"Funds") at October 31, 1999, the results of each of their operations, the
changes in each of their net assets and the financial highlights for the periods
indicated, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Funds' management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at October
31, 1999 by correspondence with the custodian and brokers and the application of
alternative auditing procedures where broker confirmations were not received,
provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Milwaukee, Wisconsin
December 6, 1999
40
<PAGE>
DIRECTORS
Richard S. Strong
Marvin E. Nevins
William F. Vogt
Willie D. Davis
Stanley Kritzik
OFFICERS
Richard S. Strong, CHAIRMAN OF THE BOARD
Thomas M. Zoeller, VICE PRESIDENT
Dennis A. Wallestad, VICE PRESIDENT
Stephen J. Shenkenberg, VICE PRESIDENT AND SECRETARY
John S. Weitzer, VICE PRESIDENT
John W. Widmer, TREASURER
Rhonda K. Haight, ASSISTANT TREASURER
INVESTMENT ADVISOR
Strong Capital Management, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
DISTRIBUTOR
Strong Investments, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
CUSTODIAN
Firstar Bank Milwaukee, N.A.
P.O. Box 701, Milwaukee, Wisconsin 53201
TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT
Strong Capital Management, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
100 East Wisconsin Avenue, Milwaukee, Wisconsin 53202
LEGAL COUNSEL
Godfrey & Kahn, S.C.
780 North Water Street, Milwaukee, Wisconsin 53202
<PAGE>
For a prospectus containing more complete information, including management fees
and expenses, please call 1-800-368-1030. Please read it carefully before
investing or sending money. This report does not constitute an offer for the
sale of securities. Strong Funds are offered for sale by prospectus only. Strong
Investments, Inc. 13450L99
To order a free prospectus kit,
call 1-800-368-1030
To learn more about our funds,
discuss an existing account,
or conduct a transaction,
call 1-800-368-3863
-------------------
If you are a Financial Professional,
call 1-800-368-1683
-------------------
-------------------
Visit our web site at
www.eStrong.com
-------------------
[LOGO]
STRONG FUNDS-Registered Trademark-
P.O. Box 2936
Milwaukee, Wisconsin 53201
AINT
