[STRONG LOGO]
THE STRONG
AGGRESSIVE
GROWTH FUNDS
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SEMI-ANNUAL REPORT o JUNE 30, 1999
[PICTURE OF STRONG FUNDS BUILDING]
The Strong Enterprise Fund
The Strong Growth 20 Fund
The Strong Small Cap Value Fund
The Strong U.S. Emerging Growth Fund
<PAGE>
LETTER FROM THE CHAIRMAN
Dear Strong Investor,
Having just returned from a business trip to Indianapolis, I was telling a
friend that almost everywhere I went--every freeway traveled, every side street
ventured down--bulldozers, cranes and backhoes were hard at work.
Indianapolis, like most American cities we visit these days, is in the midst of
a spectacular building boom. A sea of yellow construction equipment is washing
over the nation's landscape.
It is the latest chapter in the unbelievable economic expansion that has blessed
this country--almost without pause--since 1982. The signs of prosperity are
everywhere:
o Highways jammed with people on their way to do business.
o "Help Wanted" signs in more store windows than most of us have ever
seen at one time.
o Consumer confidence is at an all-time high. Shopping carts are stuffed
with personal computers, printers, software and all sorts of related
high-tech equipment transforming the lives of Americans.
o Restaurants are packed almost every night of the week with people who
have money to spend.
We are fortunate to be living in one of the greatest economic booms in recorded
history. Likewise, we should be grateful for the opportunity to live in this
incredibly prosperous time. We should also remember that nothing lasts forever.
The nation's economic engine is running near full capacity. After eight years of
continuous growth, the American economy is beginning to overheat. It's that
strain on the system that has Mr. Greenspan's Federal Reserve, which is
responsible for managing the economy and keeping inflation at reasonable levels,
obviously concerned.
The Fed's most powerful inflation-fighting tool is its ability to manage
interest rates. Although it is a blunt instrument, raising interest rates is
very effective in rapidly slowing the rate of growth in the economy. For
example, when rates go up, it doesn't take long to see a drop in both the
construction of new homes and the refinancing of mortgage loans. Likewise, it
wouldn't be long before some of those bulldozers and backhoes in Indianapolis
were sidelined.
The Federal Reserve has an awesome responsibility. While they want the economy
to move ahead, they can't let their hopes override common sense. The Fed has
become increasingly worried about excessive valuations in the stock market and
the possibility that, left unchecked, a financial bubble could occur.
Make no mistake about it: Here at Strong, we are bullish on the long-term
prospects for America. But, in the short term, expectations of what the stock
market and the U.S. economy can continue to deliver seem inflated. For that
reason, this could be a good time to complement your portfolio's stock holdings
with more conservative money market and short-term bond funds.
/s/ Dick
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THE STRONG
AGGRESSIVE GROWTH
FUNDS
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SEMI-ANNUAL REPORT o JUNE 30, 1999
TABLE OF CONTENTS
INVESTMENT REVIEW
The Strong Enterprise Fund ......................................2
The Strong Growth 20 Fund .......................................4
The Strong Small Cap Value Fund .................................6
The Strong U.S. Emerging Growth Fund ............................8
FINANCIAL INFORMATION
Schedules of Investments in Securities .........................10
Statements of Assets and Liabilities ...........................15
Statements of Operations .......................................16
Statements of Changes in Net Assets ............................17
Notes to Financial Statements ..................................19
FINANCIAL HIGHLIGHTS ................................................22
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============
THE STRONG ENTERPRISE FUND
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FUND
HIGHLIGHTS
o The Fund returned 40.62% for the six months ended June 30, 1999.(1) Our
Fund has the flexibility to invest in both large and small stocks, and will
seek to emphasize the most timely segments of the market.
o The Fund's performance benefited from significant involvement in Internet
stocks early in the year, and a substantial weighting in retail and
semiconductor-related stocks, two industries sensitive to economic
activity, added to our gains later in the first half.
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TOTAL RETURN(1)
As of 6-30-99
Since Inception 107.32%
(on 9-30-98)
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FIVE LARGEST
STOCK HOLDINGS
As of 6-30-99
SECURITY % OF NET ASSETS
Applied Materials, Inc. 5.3%
PRI Automation, Inc. 5.2%
SanDisk Corporation 4.9%
Polycom, Inc. 4.1%
ASM Lithography Holding NV 4.1%
Please see the Schedule of Investments
in Securities for a complete listing of
the Fund's portfolio.
PERSPECTIVES
FROM THE MANAGER
/s/ Drew Cupps
Drew Cupps
Portfolio Manager
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The market environment has continued to provide many investment opportunities
for the Strong Enterprise Fund. Our team strives to go beyond mere technological
change to also consider changes in the investment and economic environment.
Enterprise also has an all-cap format, so we can and do pursue the best growth
opportunities in the economy, whether large or small. We believe this format may
be particularly important as the strong economy allows more small- and mid-sized
companies to post attractive results.
One investment theme that was very important to our portfolio during the first
half of 1999 was the rebound of the semiconductor industry. For the duration of
the Asian economic crisis, semiconductor chip makers and equipment companies
suffered from soft demand. As confidence has returned, so has the world's demand
for semiconductors--which are used in many products such as mobile phones,
computer modems, children's toys, and automobiles. Applied Materials and other
leading companies in the industry, including PRI Automation, Credence Systems,
and ASM Lithography, were important contributors to the Fund this period.
Our research team constantly searches for forces or events that will affect an
industry --changes that will create an investment opportunity. For many months,
we have been working on the effect digital photography will have on the camera
and film market. We found market estimates pegging the digital camera
-------------------------------------
ONE INVESTMENT
THEME THAT WAS
VERY IMPORTANT TO
OUR PORTFOLIO DURING
THE FIRST HALF OF 1999
WAS THE REBOUND OF
THE SEMICONDUCTOR
INDUSTRY.
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1 Total Return is not annualized and measures aggregate change in the value
of an investment in the Fund, assuming reinvestment of dividends and
capital gains.
2
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market at 29 million units in 2002 vs. 2 million in 1998 (International Data
Corp., 5/99)--that is the kind of market growth we like as our backdrop! SanDisk
Corporation, a leader in the type of computer memory that acts as the "film" in
a digital camera, was a top performer for our Fund this period. SanDisk's
products are also being used in two other potentially explosive product
categories, the MP3 audio player market and the handheld computer market, so the
company may experience healthy demand for quite some time.
We believe that the investment environment is changing and two major forces are
at work now and will be for the next several quarters. One of these forces, not
to be underestimated, is the acceleration of the Information Age. The second
force is the increasing strength of the world economy. The strong economy is
very positive for corporate earnings, but also threatens to raise interest
rates. We believe this type of market makes research and stock selection all the
more valuable and may continue to broaden the market. We remain dedicated to
investing in those companies best positioned to benefit from these changes. We
are enthusiastic about the opportunities and encourage you to adopt a long-term
time horizon for your Enterprise investment due to the volatility inherent in
the stocks of rapidly growing companies.
GROWTH OF AN ASSUMED $10,000 INVESTMENT
From 9-30-98 to 6-30-99
[GRAPH]
THE STRONG S&P MidCap 400 Lipper Mid Cap
ENTERPRISE FUND Stock Index* Funds Index*
9-98 10,000 10,000 10,000
12-98 14,743 12,819 12,374
3-99 17,255 12,001 12,471
6-99 20,732 13,700 13,846
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
Standard & Poor's MidCap 400 Stock Index ("S&P MidCap") and the Lipper Mid Cap
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 will vary, and you may have a gain or
loss when you sell shares.
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* The S&P MidCap is an unmanaged index generally representative of the U.S.
market for medium capitalization stocks. The Lipper Mid Cap Funds Index is
an equally-weighted performance index of the largest qualifying funds in
this Lipper category. The Russell 2500(TM) Growth Index is an unmanaged
index generally representative of the U.S. market for small to medium-small
capitalization stocks. It contains securities that growth managers
typically select from the Russell 2500(TM) Index. Source of the S&P and
Russell index data is Standard & Poor's Micropal. Source of the Lipper
index data is Lipper Inc.
YOUR FUND'S
APPROACH
THE STRONG ENTERPRISE FUND SEEKS TO CAPTURE THE GROWTH OF LEADING COMPANIES IN
RAPIDLY GROWING INDUSTRIES. THE PACE OF ADVANCEMENT AND CHANGE IN THE WORLD IS
ACCELERATING. WE SEEK TO RESEARCH AND UNDERSTAND THE DIRECTION THAT THE WORLD
AND THE ECONOMY ARE MOVING, AND TO DEVELOP INVESTMENT THEMES IN ORDER TO
CAPITALIZE ON THE OPPORTUNITIES CREATED BY THOSE CHANGES. OUR FUND DOES NOT
CONCENTRATE ON A PARTICULAR SIZE COMPANY, RATHER WE SEARCH FOR GREAT COMPANIES
LARGE AND SMALL THAT ARE POSITIONED TO GROW THEIR REVENUE AND EARNINGS RAPIDLY.
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MARKET
HIGHLIGHTS
o The Fund handily outperformed the Russell 2500(TM) Growth Index, which was
up 15.58% and the S&P MidCap, which was up 6.87% during the period.*
o The vigorous U.S. economy has raised the prospect of higher interest rates
and already caused the Federal Reserve to hike rates one-quarter point in
late June.
o The stock market began to broaden out during this period. This means the
advance that had been led by large growth stocks for over two years has
expanded to include small- and mid-sized growth stocks, as well as value
stocks.
3
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THE STRONG GROWTH 20 FUND
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FUND
HIGHLIGHTS
o The Strong Growth 20 Fund returned 21.53% for the six months ended June 30,
1999. The Fund's one-year average annual total return was 43.89%. Since
inception (6-30-97), the Fund has an average annual return of 37.44%.(1)
o Communications, telecom, Internet infrastructure builders, broadband
access, and retail category leaders with strong revenue growth have been
the Fund's key performers during the first half of 1999.
o Biotech companies, such as BIOGEN, have been the Fund's most attractive
healthcare holdings.
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AVERAGE ANNUAL
TOTAL RETURNS(1)
As of 6-30-99
1-year 43.89%
Since Inception 37.44%
(on 6-30-97)
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FIVE LARGEST
STOCK HOLDINGS
As of 6-30-99
SECURITY % OF NET ASSETS
Cisco Systems, Inc. 8.9%
Tyco International, Ltd. 7.0%
Circuit City Stores, Inc. 6.6%
Uniphase Corporation 5.9%
Kohl's Corporation 5.5%
Please see the Schedule of Investments
in Securities for a complete listing of
the Fund's portfolio.
PERSPECTIVES
FROM THE MANAGER
/s/ Ronald C. Ognar
Ronald C. Ognar
Portfolio Manager
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After the Federal Reserve cut interest rates last fall, the stock market was
liquidity-driven (money coming into the market) and in the first phase of the
new advance, it was driven by rising price-earnings ratios. The large growth
stocks received almost all the attention because the world economy was still
slow, causing corporate earnings to be very weak at year-end.
Now we think the market has entered a new phase that sees world economies
picking up. In the U.S., the consumer is in a strong spending phase and interest
rates are rising with the new economic strength. The market has broadened to
include more cyclical and smaller companies. We are now in an earnings-driven
market and investors will look for companies with the strongest sales and
earnings momentum.
As long as interest rates stay in a reasonable range with the economy growing at
2% to 3%, we will continue to stay with our current strategy. As of now, we do
not see inflation becoming a problem as long as productivity continues to hold
costs down for corporations. We did substantially lower our Internet exposure
during the period due mainly to
-------------------------------------
WE ARE NOW IN
AN EARNINGS-DRIVEN
MARKET, AND
INVESTORS WILL
LOOK FOR COMPANIES
WITH THE STRONGEST
SALES AND EARNINGS
MOMENTUM.
-------------------------------------
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1 Average annual total return and total return measure change in the value of
an investment in the Fund, assuming reinvestment of all dividends and
capital gains. Average annual total return reflects annualized change while
total return reflects aggregate change, and is not annualized.
4
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high valuations and big new supplies of new Internet public offerings. This
technology money was shifted to the more cyclical growth area of semiconductors
(especially telecom-related).
We appreciate your continued investment in the Growth 20 Fund, and remain
committed to serving you in the future with a focused approach.
GROWTH OF AN ASSUMED $10,000 INVESTMENT
From 6-30-97 to 6-30-99
[GRAPH]
Lipper Capital
THE STRONG S & P 500 Appreciation
GROWTH 20 FUND Index* Funds Index*
6-97 10,000 10,000 10,000
12-97 11,387 11,058 10,890
6-98 13,129 13,016 12,490
12-98 15,545 14,218 13,067
6-99 18,891 15,978 15,023
This graph, prepared in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with the performance of the
Standard & Poor's 500 Stock Index ("S&P 500") and the Lipper Capital
Appreciation Funds Index. Results include the reinvestment of all dividends and
capital gains distributions. Performance is historical and does not represent
future results. Investment returns and principal value vary, and you may have a
gain or loss when you sell shares.
- --------------------------------------------------------------------------------
* The S&P 500 is an unmanaged index generally representative of the U.S.
stock market. The Lipper Capital Appreciation Funds Index is an
equally-weighted performance index of the largest qualifying funds in this
Lipper category. Source of the S&P index data is Standard & Poor's
Micropal. Source of the Lipper index data is Lipper Inc.
YOUR FUND'S
APPROACH
THE STRONG GROWTH 20 FUND INVESTS IN A CONCENTRATED PORTFOLIO OF 20 TO 30 GROWTH
STOCKS OF ALL SIZES. THE MANAGER CHOOSES INVESTMENTS BY CAREFULLY RESEARCHING
COMPANIES ONE AT A TIME, PAYING CLOSE ATTENTION TO THEIR VALUATIONS AND THE
LONG-TERM THEMES OF THEIR BUSINESSES. THIS IS AN AGGRESSIVE GROWTH FUND THAT
HOLDS A LIMITED NUMBER OF STOCKS, EACH ONE NORMALLY ACCOUNTING FOR BETWEEN 3%
AND 7% OF THE FUND'S TOTAL ASSETS--SO IT IS LIKELY TO SHOW PRONOUNCED PRICE
FLUCTUATION. BECAUSE OF THIS POTENTIAL VOLATILITY AND THE FUND'S AGGRESSIVE
NATURE, IT SHOULD BE HELD AS A SMALL PORTION OF AN INVESTOR'S LONG-TERM
PORTFOLIO.
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MARKET
HIGHLIGHTS
o The S&P 500 returned 12.38% for the six months ended June 30, 1999.
o The market continued to favor leading companies, such as Cisco Systems,
Kohl's Corp., Tellabs, and Uniphase Corp. (now called JDS Uniphase), which
are all core long-term holdings for our Fund.
o In addition, during the last six months, the market broadened out to
include more cyclical and smaller companies.
o Driven by strong consumer spending, the U.S. economy accelerated in the
first half of 1999, while world economies began to show signs of strength
as well.
o Productivity continued to hold corporate costs down and keep inflation in
check.
5
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=================
THE STRONG SMALL CAP VALUE FUND
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FUND
HIGHLIGHTS
o The Fund returned 15.27% for the six months ended June 30, 1999.(1)
o The second quarter represented a strong turnaround, but we continue to feel
that the downside risk for our style is fairly low and the upside potential
is good.
o We have maintained a relatively high allocation to energy and producer
durables, while underweighting financial services.
- ---------------------------------------
AVERAGE ANNUAL
TOTAL RETURN(1)
As of 6-30-99
1-year 4.26%
Since Inception 14.36%
(on 12-31-97)
- ---------------------------------------
TOP FIVE SECTORS
As of 6-30-99
SECTOR % OF NET ASSETS
Energy 18.3%
Technology 14.1%
Healthcare 13.5%
Capital Equipment 11.7%
Financial 10.9%
Please see the Schedule of Investments
in Securities for a complete listing of
the Fund's portfolio.
PERSPECTIVES
FROM THE MANAGER
/s/ I. Charles Rinaldi
I. Charles Rinaldi
Portfolio Manager
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The first three months of 1999 were interesting to watch, as Internet stocks
soared to valuations that would make Benjamin Graham, the father of value
investing, turn in his grave. Even large-cap growth stocks, pushed up by the
still-growing popularity of S&P 500 index funds, reached levels that would make
many investors begin to question valuations.
For those investors fortunate enough to have been invested in large-cap growth
and Internet stocks, we offer the wisdom of investment great Bernard Baruch,
written in 1930: "Become more humble as the market goes your way. It is not
prudent to wait for the top of the market to sell...it is better to sell too
soon." During the second quarter of the year, it seemed as if more investors
were already heeding this advice. Market leadership rotated to small- and
mid-cap stocks, and many Internet stocks and large-cap growth stocks began to
underperform.
Experience has taught me the importance of maintaining one's investment
discipline. Even as our style remained out of favor, we stayed with our value
approach--and the Fund's second quarter return of 25.82% would appear to be our
reward. Despite this recent run-up, we continue to believe there is high growth
potential in our portfolio. Of course, as part of our investment approach we
consider the possible downside risk of a stock.
-------------------------------------
DESPITE THE
RECENT RUN-UP,
WE CONTINUE TO
BELIEVE THERE IS HIGH
GROWTH POTENTIAL IN
OUR PORTFOLIO.
-------------------------------------
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1 Average annual total return and total return measure change in the value of
an investment in the Fund, assuming reinvestment of all dividends and
capital gains. Average annual total return reflects annualized change while
total return reflects aggregate change, and is not annualized.
6
<PAGE>
Evidence supporting our sentiment comes from the mergers and acquisitions
market. Reports indicate that the average annual number of mergers and
acquisitions for small companies from 1990 through April 1999 was 162. For the
first four months of 1999, however, already 207 deals have been announced or
completed. Extrapolating this figure for the entire year implies an activity
rate more than five times the historical norm. The deals being made have common
characteristics of strong cash flow, low debt, and low valuation
levels--precisely the types of stocks our style focuses on.
The Fund has maintained a relatively high allocation to energy and producer
durables while underweighting financial services. This allocation helped
performance in the recent environment of rising oil prices, recovering Asian
economies, and rising interest rates. These are longer-term trends that we
believe are just beginning, so we will likely maintain this positioning for the
foreseeable future.
Thank you for choosing the Strong Small Cap Value Fund to help you achieve your
financial goals.
GROWTH OF AN ASSUMED $10,000 INVESTMENT
From 12-31-97 to 6-30-99
[GRAPH]
THE STRONG SMALL Russell Lipper Small Cap
CAP VALUE FUND 2000(R) Index* Funds Index*
12-97 10,000 10,000 10,000
6-98 11,730 10,493 10,645
12-98 10,610 9,745 9,915
6-99 12,230 10,650 10,849
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
Russell 2000(R) Index and the Lipper Small Cap Funds Index. Results include the
reinvestment of all dividends and capital gains distributions. Performance is
historical and does not represent future results. Investment returns and
principal value vary, and you may have a gain or loss when you sell shares.
- --------------------------------------------------------------------------------
* The Russell 2000(R) Index is an unmanaged index generally representative of
the U.S. market for small capitalization stocks. The Lipper Small Cap Funds
Index is an equally-weighted performance index of the largest qualifying
funds in this Lipper category. Source of the Russell index data is Standard
& Poor's Micropal. Source of the Lipper index data is Lipper Inc.
YOUR FUND'S
APPROACH
THE STRONG SMALL CAP VALUE FUND SEEKS TOTAL RETURN BY INVESTING IN STOCKS THAT
ARE OUT OF FAVOR AND, AS A RESULT, SELL AT LOW PRICES RELATIVE TO THEIR COMPANY
EARNINGS, CASH FLOW, OR ASSET VALUE. WE LOOK FOR A DYNAMIC CHANGE IN A COMPANY
OR AN INDUSTRY THAT MAY ENHANCE STOCK PRICE PERFORMANCE. GENERALLY, WE PREFER
COMPANIES THAT HAVE POSITIVE CASH FLOWS, IN WHICH MANAGEMENT HAS A MEANINGFUL
OWNERSHIP STAKE, AND THAT ARE NOT WIDELY OWNED INSTITUTIONALLY.
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MARKET
HIGHLIGHTS
o The Russell 2000(R) Index returned 9.28% during the six-month period ended
June 30, 1999.*
o Inflation concerns resurfaced after a lengthy hiatus. At the beginning of
the year, oil prices were predicted by many experts to fall to $10 per
barrel or lower. However, by midyear, oil prices had risen to more than $19
per barrel.
o Returns for domestic stock indices were very strong, though market
leadership shifted from large-cap stocks to small-cap stocks during the
second quarter.
o Internet stocks contributed significantly to both the returns and the
volatility of the Russell 2000(R) and Russell 2000(R) Growth Indexes.
7
<PAGE>
======================
THE STRONG U.S. EMERGING GROWTH FUND
- --------------------------------======================--------------------------
FUND
HIGHLIGHTS
o The Fund's performance for the six months ended June 30, 1999 was very
strong, up 23.30%.(1)
o Our overweightings in both the technology and telecommunications industries
helped spur the Fund's outperformance. The Fund's stocks in the business
services and specialty retail sectors also performed well.
o Our direct research approach paid off in the period, as the information we
developed independently allowed us to effectively add to positions on
weakness and trim positions on strength.
- ---------------------------------------
TOTAL RETURN(1)
As of 6-30-99
Since Inception 23.30%
(on 12-31-98)
- ---------------------------------------
TOP FIVE SECTORS
As of 6-30-99
SECTOR % OF NET ASSETS
Technology 42.0%
Retail 20.6%
Capital Equipment 18.2%
Healthcare 6.3%
Transportation 4.5%
Please see the Schedule of Investments
in Securities for a complete listing of
the Fund's portfolio.
PERSPECTIVES
FROM THE MANAGERS
/s/ Thomas L. Press /s/ Donald Longlet
Thomas L. Press Donald Longlet
Portfolio Co-Manager Portfolio Co-Manager
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As we complete the Fund's first six months, we're happy to be able to report
such strong outperformance, with returns that are more than 10% higher than the
Russell 2000(R) Growth Index.* A number of factors combined to produce these
results.
First and foremost, our direct research approach to investing led us to
companies in a number of sectors that enjoyed strong performance during part or
all of the six-month period. Among these were specialty retail, business
services, technology, and telecommunications. Although these holdings have
already contributed significantly to performance, we believe they still have
more to offer. We remain overweighted in these four industries.
Looking forward, our research has encouraged us to make selective additions to
our holdings in the transportation services area. We emphasize that these
additions are selective because we focus in on the quality of the companies we
invest in, not just the broad industries. While it certainly helps for a company
to be in an industry that offers fertile ground for growth, we look carefully
for those companies that feature solid management, have the potential for rapid
revenue growth, and are not overly dependent on other companies or on economic
trends for their success. And just as an entrepreneurial spirit fuels the
management of this Fund, we look for companies that have that same spark of
creativity that can breed success.
-------------------------------------
OUR OUTLOOK IS
VERY POSITIVE FOR
SMALL- AND MID-CAP
GROWTH STOCKS.
-------------------------------------
- --------------------------------------------------------------------------------
1 Total Return is not annualized and measures aggregate change in the value
of an investment in the Fund, assuming reinvestment of dividends and
capital gains.
8
<PAGE>
Our outlook is very positive for small- and mid-cap growth stocks. Earnings
continue to surpass consensus estimates, and valuations are very attractive for
the stocks we consider. We may add to our Internet holdings, which currently
take up 3% of the portfolio. If the weakness that has afflicted this sector
continues to beat down their prices, we would be even more likely to increase
our position.
With the exception of positive flows into mutual funds, all of the ingredients
for a major move among smaller-cap stocks are in place. Redemptions in recent
months have created a headwind for us to work against. Once fund inflows pick up
steam, as they are beginning to, we expect to see major improvements among
small-cap stocks.
Thank you for your investment in the Strong U.S. Emerging Growth Fund. We
appreciate the confidence you've shown us in the Fund's first six months, and
look forward to working with you for years to come.
GROWTH OF AN ASSUMED $10,000 INVESTMENT
From 12-31-98 to 6-30-99
[GRAPH]
THE STRONG U.S. Russell Lipper Growth
EMERGING GROWTH FUND 2000(R) Index* Funds Index*
12-98 10,000 10,000 10,000
1-99 11,080 10,133 10,427
2-99 10,670 9,312 10,071
3-99 12,080 9,458 10,507
4-99 11,590 10,305 10,774
5-99 11,140 10,456 10,565
6-99 12,330 10,928 11,189
This graph, prepared in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with the performance of the
Russsell 2000(R) Index and the Lipper Growth Funds Index. Results include the
reinvestment of all dividends and capital gains distributions. Performance is
historical and does not represent future results. Investment returns and
principal value vary, and you may have a gain or loss when you sell shares.
- --------------------------------------------------------------------------------
* The Russell 2000(R) Growth Index is an unmanaged index generally
representative of the U.S. market for small capitalization stocks. It
contains securities that growth managers typically select from the Russell
2000(R) Index. The Russell 2000(R) Index is an unmanaged index generally
representative of the U.S. market for small capitalization stocks. The
Lipper Growth Funds Index is an equally-weighted performance index of the
largest qualifying funds in this Lipper category. Source of the Russell
index data is Standard & Poor's Micropal. Source of the Lipper index data
is Lipper Inc.
YOUR FUND'S
APPROACH
THE STRONG U.S. EMERGING GROWTH FUND SEEKS CAPITAL GROWTH. IT PRIMARILY INVESTS
IN STOCKS OF U.S. COMPANIES THAT THE FUND'S MANAGERS BELIEVE OFFER SUPERIOR
POTENTIAL FOR LONG-TERM GROWTH. ALTHOUGH THE FUND FOCUSES ON THE STOCKS OF
SMALLER COMPANIES, IT MAY INVEST IN FIRMS OF ANY SIZE. THE FUND'S GOAL IS TO
ACHIEVE SIGNIFICANT CAPITAL APPRECIATION OVER TIME BY INVESTING IN RAPIDLY
GROWING, EMERGING COMPANIES THAT ARE POSITIONED TO BECOME LEADERS IN THEIR
RESPECTIVE MARKETS.
- --------------------------------------------------------------------------------
MARKET
HIGHLIGHTS
o The Russell 2000(R) Growth Index returned 12.82% for the six months ended
June 30, 1999.*
o In the first quarter of 1999, the stocks of large companies continued to
significantly outperform those of smaller companies. During the second
quarter of the year, the market began to broaden out somewhat, improving
the performance of many small- and mid-cap stocks.
o The second quarter was nonetheless a difficult period for small-cap growth
investors, as interest rates rose by almost 100 basis points. Small-cap
value stocks outperformed small-cap growth stocks in April and May. As
rates stabilized in June, the Fund's portfolio dramatically outperformed.
9
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
================================================================================
STRONG ENTERPRISE FUND
================================================================================
Shares or
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
COMMON STOCKS 97.1%
BANK - MONEY CENTER 1.3%
Citigroup, Inc. 17,450 $ 828,875
COMMERCIAL SERVICE 2.4%
Avis Rent A Car, Inc. (b) 20,200 588,325
TMP Worldwide, Inc. (b) 14,800 939,800
-----------
1,528,125
COMPUTER - MAINFRAME 0.8%
Apple Computer, Inc. (b) 10,300 477,019
COMPUTER - PERIPHERAL EQUIPMENT 6.9%
Microchip Technology, Inc. (b) 26,600 1,260,175
SanDisk Corporation (b) 68,400 3,078,000
-----------
4,338,175
COMPUTER - PERSONAL & WORKSTATION 6.8%
Amazon.com, Inc. (b) 5,300 663,163
Concentric Network Corporation (b) 27,500 1,093,125
Sterling Commerce, Inc. (b) 45,800 1,671,700
Yahoo! Inc. (b) 4,900 844,025
-----------
4,272,013
COMPUTER SERVICE 1.1%
Acxiom Corporation (b) 27,900 695,756
COMPUTER SOFTWARE 16.3%
BroadVision, Inc. (b) 27,900 2,057,625
Clarify, Inc. (b) 39,500 1,629,375
Exchange Applications, Inc. (b) 23,300 949,475
I2 Technologies, Inc. (b) 34,400 1,479,200
Intuit, Inc. (b) 4,600 414,575
New Era of Networks, Inc. (b) 10,500 461,344
Oracle Systems Corporation (b) 31,900 1,184,288
Silicon Graphics, Inc. (b) 94,500 1,547,437
Synopsys, Inc. (b) 10,600 584,987
-----------
10,308,306
ELECTRICAL EQUIPMENT 5.2%
PRI Automation, Inc. (b) 90,100 3,266,125
ELECTRONIC INSTRUMENTATION 9.6%
Credence Systems Corporation (b) 59,100 2,194,087
PE Corporation-PE Biosystems Group 16,825 1,930,669
Teradyne, Inc. (b) 27,000 1,937,250
-----------
6,062,006
ELECTRONIC PRODUCTS - MISCELLANEOUS 3.3%
Powerwave Technologies, Inc. (b) 48,300 1,557,675
Rockwell International Corporation 8,900 540,675
-----------
2,098,350
ELECTRONICS - SEMICONDUCTOR/COMPONENT 20.2%
ASM Lithography Holding NV (b) 43,100 2,559,063
Applied Materials, Inc. (b) 44,900 3,316,988
Atmel Corporation (b) 80,600 2,110,712
LSI Logic Corporation (b) 50,900 2,347,762
Novellus Systems, Inc. (b) 34,900 2,381,925
-----------
12,716,450
HEALTHCARE - BIOMEDICAL/GENETIC 4.2%
Cephalon, Inc. (b) 51,600 896,550
Millennium Pharmaceuticals, Inc. (b) 48,700 1,753,200
-----------
2,649,750
HEALTHCARE - PATIENT CARE 1.2%
HEALTHSOUTH Corporation (b) 50,300 751,356
HEALTHCARE - PRODUCT 3.8%
Affymetrix, Inc. (b) 27,900 1,377,563
Sabratek Corporation (b) 47,000 1,028,125
-----------
2,405,688
HOUSEHOLD APPLIANCES & FURNISHINGS 2.0%
Sony Corporation Sponsored ADR 11,500 1,269,313
MACHINERY - MISCELLANEOUS 0.6%
Briggs & Stratton Corporation 6,400 369,600
NATURAL GAS DISTRIBUTION 1.1%
The Williams Companies, Inc. 16,600 706,537
RETAIL - DEPARTMENT STORE 1.2%
Federated Department Stores, Inc. (b) 14,200 751,712
TELECOMMUNICATION EQUIPMENT 9.1%
Comverse Technology, Inc. (b) 10,050 758,775
Motorola, Inc. 18,200 1,724,450
Nortel Networks Corporation 7,100 616,369
Polycom, Inc. (b) 67,000 2,613,000
-----------
5,712,594
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS (Cost $49,142,937) 61,207,750
- --------------------------------------------------------------------------------
OPTIONS 1.0%
TELECOMMUNICATION SERVICE
AT&T Corporation Call Options 64,000 616,000
- --------------------------------------------------------------------------------
TOTAL OPTIONS (Cost $586,093) 616,000
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 5.4%
COMMERCIAL PAPER 0.6%
INTEREST BEARING, DUE UPON DEMAND
General Mills, Inc., 4.82% $ 100 100
Warner Lambert Company, 4.91% 413,900 413,900
-----------
414,000
REPURCHASE AGREEMENTS 4.8%
ABN-AMRO Inc. (Dated 6/30/99), 4.78%, Due
7/01/99 (Repurchase proceeds $3,000,398);
Collateralized by: SLMA Notes, FNMA
Notes, FHLMC Notes, Federal Home
Loan Bank Bonds, Federal Farm Credit
Bank Notes, Tennessee Valley Authority
Bonds, and Resolution Funding Corporation
Bonds (c) 3,000,000 3,000,000
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS (Cost $3,414,000) 3,414,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES (Cost $53,143,030) 103.5% 65,237,750
Other Assets and Liabilities, Net (3.5%) (2,177,485)
- --------------------------------------------------------------------------------
NET ASSETS 100.0% $63,060,265
================================================================================
WRITTEN OPTIONS ACTIVITY
- --------------------------------------------------------------------------------
Contracts Premiums
- --------------------------------------------------------------------------------
Options outstanding at beginning of period -- $ --
Options written during the period 30 57,096
Options closed (30) (57,096)
Options expired -- --
Options exercised -- --
--- -------
Options outstanding at end of period -- $ --
=== =======
Closed options resulted in a capital gain of $20,256.
10
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
STRONG GROWTH 20 FUND
================================================================================
Shares or
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
COMMON STOCKS 89.4%
BANK - MONEY CENTER 3.1%
Citigroup, Inc. 120,000 $ 5,700,000
COMPUTER - PERSONAL & WORKSTATION 4.9%
America Online, Inc. (b) 45,000 4,972,500
Marimba, Inc. (b) 75,000 3,951,562
------------
8,924,062
COMPUTER SOFTWARE 8.9%
Cisco Systems, Inc. (b) 250,000 16,125,000
DIVERSIFIED OPERATIONS 7.0%
Tyco International, Ltd. 135,000 12,791,250
ELECTRONIC INSTRUMENTATION 3.2%
PE Corporation-PE Biosystems Group 50,000 5,737,500
ELECTRONICS - SEMICONDUCTOR/COMPONENT 6.9%
Applied Micro Circuits Corporation (b) 100,000 8,225,000
PMC-Sierra, Inc. (b) 75,000 4,420,312
------------
12,645,312
FINANCE - MISCELLANEOUS 5.4%
First Data Corporation 200,000 9,787,500
HEALTHCARE - BIOMEDICAL/GENETIC 3.5%
Biogen, Inc. (b) 100,000 6,431,250
OIL WELL EQUIPMENT & SERVICE 5.7%
BJ Services Company (b) 150,000 4,415,625
ENSCO International, Inc. 300,000 5,981,250
------------
10,396,875
RETAIL - DEPARTMENT STORE 5.5%
Kohl's Corporation (b) 130,000 10,034,375
RETAIL - RESTAURANT 2.9%
Outback Steakhouse, Inc. (b) 135,000 5,307,188
RETAIL - SPECIALTY 13.6%
Best Buy Company, Inc. (b) 125,000 8,437,500
Circuit City Stores, Inc. 130,000 12,090,000
Lowe's Companies, Inc. 75,000 4,251,563
------------
24,779,063
TELECOMMUNICATION EQUIPMENT 8.9%
Tellabs, Inc. (b) 80,000 5,405,000
Uniphase Corporation (b) 65,000 10,790,000
------------
16,195,000
TELECOMMUNICATION SERVICE 9.9%
Covad Communications Group, Inc. (b) 140,000 7,463,750
Level 3 Communications, Inc. (b) 53,800 3,231,363
MCI WorldCom, Inc. (b) 85,000 7,331,250
------------
18,026,363
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS (Cost $131,261,457) 162,880,738
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 13.4%
COMMERCIAL PAPER 0.4%
INTEREST BEARING, DUE UPON DEMAND
Warner Lambert Company, 4.91% $ 547,700 547,700
Wisconsin Electric Power Company, 4.91% 251,600 251,600
------------
799,300
REPURCHASE AGREEMENTS 13.0%
ABN-AMRO Inc. (Dated 6/30/99), 4.78%, Due 7/01/99
(Repurchase proceeds $23,603,134); Collateralized
by: SLMA Notes, FNMA Notes, FHLMC Notes,
Federal Home Loan Bank Bonds, Federal Farm
Credit Bank Notes, Tennessee Valley Authority
Bonds, and Resolution Funding Corporation
Bonds (c) 23,600,000 23,600,000
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS (Cost $24,399,300) 24,399,300
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES (Cost $155,660,757) 102.8% 187,280,038
Other Assets and Liabilities, Net (2.8%) (5,080,391)
- --------------------------------------------------------------------------------
Net Assets 100.0% $182,199,647
================================================================================
WRITTEN OPTIONS ACTIVITY
- --------------------------------------------------------------------------------
Contracts Premiums
- --------------------------------------------------------------------------------
Options outstanding at beginning of period -- $ --
Options written during the period 450 575,201
Options closed (450) (575,201)
Options expired -- --
Options exercised -- --
--- --------
Options outstanding at end of period -- $ --
=== ========
Closed options resulted in a capital loss of $216,190.
================================================================================
STRONG SMALL CAP VALUE FUND
================================================================================
Shares or
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
COMMON STOCKS 96.2%
AIRLINE 0.7%
Linea Aerea Nacional Chile SA Sponsored ADR 30,000 $ 215,625
AUTO & TRUCK PARTS 3.0%
Jason, Inc. (b) 110,000 880,000
COMMERCIAL SERVICE 5.0%
R.H. Donnelley Corporation 30,000 586,875
SCB Computer Technology, Inc. (b) 40,000 210,000
Vallen Corporation (b) 26,000 416,000
The Wackenhut Corporation Class B 11,000 264,000
----------
1,476,875
COMPUTER SOFTWARE 6.4%
JDA Software Group, Inc. (b) 10,000 93,125
Optika, Inc. (b) 278,500 1,566,562
Xircom, Inc. (b) 8,000 240,500
----------
1,900,187
COMPUTER SYSTEMS 1.1%
Corsair Communications, Inc. (b) 75,000 318,750
ELECTRICAL EQUIPMENT 0.4%
AFC Cable Systems, Inc. (b) (d) 3,500 123,594
ELECTRONIC INSTRUMENTATION 0.5%
IFR Systems, Inc. (b) 30,000 142,500
ELECTRONIC PRODUCTS - MISCELLANEOUS 2.5%
Coherent, Inc. (b) 40,000 745,000
11
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
================================================================================
STRONG SMALL CAP VALUE FUND (CONTINUED)
================================================================================
Shares or
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
ELECTRONICS - SEMICONDUCTOR/COMPONENT 2.3%
Silicon Valley Group, Inc. (b) 40,000 $ 672,500
ENGINEERING & CONSTRUCTION 2.2%
Chicago Bridge & Iron Company NV 47,500 662,031
FINANCE - MISCELLANEOUS 6.3%
Creditrust Corporation (b) 67,500 1,873,125
HEALTHCARE - DRUG/DIVERSIFIED 1.3%
Biovail Corporation International (b) (d) 7,500 382,969
HEALTHCARE - MEDICAL SUPPLY 2.1%
Ocular Sciences, Inc. (b) (d) 35,000 608,125
HEALTHCARE - PATIENT CARE 0.8%
Kendle International, Inc. (b) (d) 15,000 240,000
HEALTHCARE - PRODUCT 9.3%
Maxxim Medical, Inc. (b) (d) 75,000 1,748,437
Pall Corporation (d) 45,000 998,437
----------
2,746,874
HOUSEHOLD APPLIANCES & FURNISHINGS 1.4%
Leggett & Platt, Inc. (d) 15,000 417,187
HOUSING 1.9%
Newmark Homes Corporation (b) 107,000 575,125
MACHINERY - MISCELLANEOUS 2.4%
Global Industrial Technologies, Inc. (b) 40,000 482,500
Tennant Company 7,500 240,000
----------
722,500
MACHINERY - TRANSPORTATION EQUIPMENT & PARTS 1.3%
Detroit Diesel Corporation 15,000 369,375
METAL PRODUCTS & FABRICATION 0.3%
Webco Industries, Inc. (b) 20,000 102,500
METALS & MINING 1.1%
U.S. Concrete, Inc. (b) 35,000 332,500
OIL - NORTH AMERICAN EXPLORATION & PRODUCTION 11.3%
The Meridian Resource Corporation (b) 145,000 561,875
Patina Oil & Gas Corporation 225,000 1,420,312
Range Resources Corporation 194,500 1,191,313
Titan Exploration, Inc. (b) 30,000 150,000
----------
3,323,500
OIL - NORTH AMERICAN INTEGRATED 0.8%
Pennzoil-Quaker State Company (d) 15,000 225,000
OIL WELL EQUIPMENT & SERVICE 6.2%
Marine Drilling Companies, Inc. (b) 7,500 102,656
Matrix Service Company (b) 150,000 618,750
Oceaneering International, Inc. (b) 30,000 483,750
Pride International, Inc. (b) 60,000 633,750
----------
1,838,906
PAPER & FOREST PRODUCTS 2.0%
Chesapeake Corporation (d) 13,000 486,688
Kafus Environmental Industries, Ltd. (b) 10,000 96,250
----------
582,938
PERSONAL & COMMERCIAL LENDING 3.1%
World Acceptance Corporation (b) 182,000 915,688
PRECIOUS METAL/GEM/STONE 2.6%
Apex Silver Mines, Ltd. (b) 24,000 297,000
Glamis Gold, Ltd. (b) 255,000 462,188
----------
759,188
REAL ESTATE 1.5%
Meditrust Companies 33,000 431,063
RETAIL - RESTAURANT 0.6%
CKE Restaurants, Inc. 10,000 162,500
RETAIL - SPECIALTY 9.9%
Barbeques Galore, Ltd. Sponsored ADR (b) 196,500 1,473,750
Boise Cascade Office Products Corporation (b) 25,000 293,750
Heilig-Meyers Company 50,000 340,625
Rush Enterprises, Inc. (b) 15,000 241,875
TBC Corporation (b) 80,000 565,000
----------
2,915,000
STEEL 2.2%
Bethlehem Steel Corporation (b) 25,000 192,188
Roanoke Electric Steel Corporation 15,000 260,625
WHX Corporation (b) 30,000 196,875
----------
649,688
TELECOMMUNICATION EQUIPMENT 0.3%
Centigram Communications Corporation (b) 10,000 93,125
TELECOMMUNICATION SERVICE 1.0%
Ascent Entertainment Group, Inc. (b) 20,000 282,500
TELEPHONE 0.8%
Citizens Utilities Company Class B (b) 20,000 222,500
TRUCKING 1.6%
Covenant Transport, Inc. Class A (b) 30,000 472,500
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS (Cost $26,013,321) 28,381,438
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 4.3%
COMMERCIAL PAPER
INTEREST BEARING, DUE UPON DEMAND
General Mills, Inc., 4.82% $308,500 308,500
Warner Lambert Company, 4.91% 100 100
Wisconsin Electric Power Company, 4.91% 948,900 948,900
----------
1,257,500
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS (Cost $1,257,500) 1,257,500
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES (Cost $27,270,821) 100.5% 29,638,938
Other Assets and Liabilities, Net (0.5%) (142,682)
- --------------------------------------------------------------------------------
Net Assets 100.0% $29,496,256
================================================================================
WRITTEN OPTIONS ACTIVITY
- --------------------------------------------------------------------------------
Contracts Premiums
- --------------------------------------------------------------------------------
Options outstanding at beginning of period 1,355 $168,822
Options written during the period 3,620 668,346
Options closed (3,395) (562,755)
Options expired (525) (71,660)
Options exercised (85) (11,807)
----- --------
Options outstanding at end of period 970 $190,946
===== ========
Closed, exercised and expired options resulted in a capital gain of $113,629.
12
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
STRONG SMALL CAP VALUE FUND (CONTINUED)
================================================================================
- --------------------------------------------------------------------------------
WRITTEN OPTIONS DETAIL
- --------------------------------------------------------------------------------
Contracts
(100 shares Value
per contract) (Note 2)
- --------------------------------------------------------------------------------
AFC Cable Systems, Inc.
Calls: (Strike price is $35.00. Expiration date is 8/20/99.
Premium received is $9,082.) 35 ($10,281)
Biovail Corporation International
Calls: (Strike price is $55.00. Expiration date is 8/20/99.
Premium received is $12,900.) 75 (13,593)
Chesapeake Corporation
Calls: (Strike price is $35.00. Expiration date is 8/20/99.
Premium received is $39,109.) 130 (40,219)
Kendle International, Inc.
Calls: (Strike price is $17.50. Expiration date is 8/20/99.
Premium received is $10,162.) 50 (5,781)
Leggett & Platt, Inc.
Calls: (Strike price is $25.00. Expiration date is 9/17/99.
Premium received is $11,412.) 50 (16,563)
Maxxim Medical, Inc.
Puts: (Strike price is $20.00. Expiration date is 9/17/99.
Premium received is $27,234.) 130 (11,375)
Ocular Sciences, Inc.
Calls: (Strike price is $17.50. Expiration date is 7/16/99.
Premium received is $29,599.) 200 (21,250)
Calls: (Strike price is $20.00. Expiration date is 7/16/99.
Premium received is $26,949.) 100 (3,750)
Pall Corporation
Calls: (Strike price is $20.00. Expiration date is 7/16/99.
Premium received is $12,825.) 100 (20,625)
Calls: (Strike price is $22.50. Expiration date is 9/17/99.
Premium received is $7,037.) 50 (7,656)
Pennzoil-Quaker State Company
Calls: (Strike price is $15.00. Expiration date is 7/16/99.
Premium received is $4,637.) 50 (2,188)
================================================================================
STRONG U.S. EMERGING GROWTH FUND
================================================================================
Shares or
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
COMMON STOCKS 96.7%
COMMERCIAL SERVICE 18.2%
AHL Services, Inc. (b) 7,900 $ 197,006
Abacus Direct Corporation (b) 3,000 274,500
Copart, Inc. (b) 11,300 240,125
Corporate Executive Board Company (b) 9,200 327,175
Diamond Technology Partners, Inc. (b) 10,000 223,750
FactSet Research Systems, Inc. 6,150 348,244
International Telecommunications Data
Systems, Inc. (b) 15,500 248,000
ProBusiness Services, Inc. (b) 3,600 129,150
Sykes Enterprises, Inc. (b) 8,800 293,700
----------
2,281,650
COMPUTER - PERSONAL & WORKSTATION 2.5%
Concentric Network Corporation (b) 4,800 190,800
Proxicom, Inc. (b) 5,000 128,438
----------
319,238
COMPUTER SOFTWARE 20.8%
Advantage Learning Systems, Inc. (b) 10,000 221,250
BroadVision, Inc. (b) 2,200 162,250
Clarify, Inc. (b) 3,500 144,375
Concord Communications, Inc. (b) 2,800 126,000
Emulex Corporation (b) 1,600 177,900
Exchange Applications, Inc. (b) 9,600 391,200
HNC Software, Inc. (b) 4,800 147,900
MEDE AMERICA Corporation (b) 4,400 166,100
Mercury Interactive Corporation (b) 6,200 219,325
New Era of Networks, Inc. (b) 2,900 127,419
Sapient Corporation (b) 2,500 141,562
TSI International Software, Ltd. (b) 10,800 306,450
Transaction Systems Architects, Inc. (b) 6,900 269,100
----------
2,600,831
ELECTRONIC PRODUCTS - MISCELLANEOUS 1.1%
Proxim, Inc. (b) 2,300 133,400
ELECTRONICS - SEMICONDUCTOR/COMPONENT 10.3%
Anadigics, Inc. (b) 7,700 284,900
MMC Networks, Inc. (b) 6,400 286,400
PMC-Sierra, Inc. (b) 5,800 341,838
SDL, Inc. (b) 2,200 112,337
Transwitch Corporation (b) 5,700 270,037
----------
1,295,512
FINANCE - MISCELLANEOUS 2.0%
NOVA Corporation (b) 10,200 255,000
HEALTHCARE - INSTRUMENTATION 2.7%
Novoste Corporation (b) 7,300 153,300
Xomed Surgical Products, Inc. (b) 3,900 189,881
----------
343,181
HEALTHCARE - PATIENT CARE 1.4%
Sunrise Assisted Living, Inc. (b) 5,200 181,350
HEALTHCARE - PRODUCT 2.1%
MiniMed, Inc. (b) 3,400 261,588
MEDIA - RADIO/TV 1.4%
Cumulus Media, Inc. Class A (b) 7,900 172,813
MORTGAGE & RELATED SERVICE 1.8%
Prism Financial Corporation (b) 11,200 228,900
RETAIL - FOOD CHAIN 2.3%
Wild Oats Markets, Inc. (b) 9,300 282,197
RETAIL - RESTAURANT 5.1%
Applebee's International, Inc. 7,000 210,875
Buca, Inc. (b) 19,200 316,800
P.F. Chang's China Bistro, Inc. (b) 5,300 114,612
----------
642,287
RETAIL - SPECIALTY 13.2%
Cost Plus, Inc. (b) 9,000 409,500
Hibbett Sporting Goods, Inc. (b) 13,000 286,000
Linens `N Things, Inc. (b) 6,000 262,500
Pacific Sunwear of California (b) 8,850 215,719
Tweeter Home Entertainment Group, Inc. (b) 7,800 306,150
Zany Brainy, Inc. (b) 17,800 172,437
----------
1,652,306
TELECOMMUNICATION EQUIPMENT 7.3%
Carrier Access Corporation (b) 3,200 140,200
Copper Mountain Networks, Inc. (b) 2,900 224,025
E-Tek Dynamics, Inc. (b) 7,600 361,475
Terayon Communication Systems, Inc. (b) 3,300 184,388
----------
910,088
13
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
================================================================================
STRONG U.S. EMERGING GROWTH FUND (CONTINUED)
================================================================================
Shares or
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
TRANSPORTATION SERVICE 2.1%
C.H. Robinson Worldwide, Inc. 7,200 $ 264,600
TRUCKING 2.4%
Forward Air Corporation (b) 10,600 298,125
- --------------------------------------------------------------------------------
Total Common Stocks (Cost $10,147,998) 12,123,066
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (a) 3.5%
COMMERCIAL PAPER 2.7%
INTEREST BEARING, DUE UPON DEMAND
General Mills, Inc., 4.82% $ 100 100
Warner Lambert Company, 4.91% 162,200 162,200
Wisconsin Electric Power Company, 4.91% 179,400 179,400
-----------
341,700
UNITED STATES GOVERNMENT ISSUES 0.8%
United States Treasury Bills, Due 7/08/99 100,000 99,928
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS (Cost $441,619) 441,628
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES (Cost $10,589,617) 100.2% 12,564,694
Other Assets and Liabilities, Net (0.2%) (31,112)
- --------------------------------------------------------------------------------
NET ASSETS 100.0% $12,533,582
================================================================================
- --------------------------------------------------------------------------------
LEGEND
- --------------------------------------------------------------------------------
(a) Short-term investments include any security which has a maturity of less
than one year.
(b) Non-income producing security.
(c) See Note 2(I) of Notes to Financial Statements.
(d) All or a portion of these securities are held in conjunction with open
written option contracts.
Percentages are stated as a percent of net assets.
See Notes to Financial Statements
14
<PAGE>
<TABLE>
STATEMENTS OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------------------------------------
June 30, 1999 (Unaudited)
<CAPTION>
(In Thousands, Except Per Share Amounts)
Strong Strong Strong Strong U.S.
Enterprise Growth 20 Small Cap Emerging
Fund Fund Value Fund Growth Fund
---------- --------- ---------- -----------
ASSETS:
Investments in Securities, at Value
(Cost of $53,143, $155,661, $27,271
<S> <C> <C> <C> <C>
and $10,590, respectively) $65,238 $187,280 $29,639 $12,565
Receivable for Securities Sold 3,669 894 24 448
Receivable for Fund Shares Sold 26 46 116 --
Dividends and Interest Receivable 17 17 6 2
Other Assets 9 6 18 16
------- -------- ------- -------
Total Assets 68,959 188,243 29,803 13,031
LIABILITIES:
Payable for Securities Purchased 5,874 6,033 112 473
Written Options, at Value (Premiums Received of
$0, $0, $191 and $0, respectively) -- -- 153 --
Payable for Fund Shares Redeemed 7 -- 15 --
Accrued Operating Expenses and Other Liabilities 18 10 27 24
------- -------- ------- -------
Total Liabilities 5,899 6,043 307 497
------- -------- ------- -------
NET ASSETS $63,060 $182,200 $29,496 $12,534
======= ======== ======= =======
NET ASSETS CONSIST OF:
Capital Stock (par value and paid-in capital) $49,868 $145,252 $27,602 $11,032
Accumulated Net Investment Loss (176) (363) (130) (64)
Accumulated Net Realized Gain (Loss) 1,273 5,692 (382) (409)
Net Unrealized Appreciation 12,095 31,619 2,406 1,975
------- -------- ------- -------
Net Assets $63,060 $182,200 $29,496 $12,534
======= ======== ======= =======
Capital Shares Outstanding (Unlimited Number Authorized) 3,084 9,964 2,412 1,017
NET ASSET VALUE PER SHARE $20.45 $18.29 $12.23 $12.33
====== ====== ====== ======
See Notes to Financial Statements.
15
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF OPERATIONS
- ------------------------------------------------------------------------------------------------------------------
For the Six Months Ended June 30, 1999 (Unaudited)
<CAPTION>
(In Thousands)
Strong Strong Strong Strong U.S.
Enterprise Growth 20 Small Cap Emerging
Fund Fund Value Fund Growth Fund
---------- --------- ---------- -----------
INCOME:
Dividends (net of withholding taxes of
<S> <C> <C> <C> <C>
$0, $0, $3 and $0, respectively) $ 39 $ 76 $ 61 $ 1
Interest 56 440 16 20
------- ------- ------ ------
Total Income 95 516 77 21
EXPENSES:
Investment Advisory Fees 165 625 115 41
Custodian Fees 8 6 11 10
Shareholder Servicing Costs 55 167 55 11
Reports to Shareholders 11 25 9 10
Federal and State Registration Fees 25 44 6 19
Other 7 12 11 5
------- ------- ------ ------
Total Expenses Before Waivers and Absorptions 271 879 207 96
Involuntary Expense Waivers and Absorptions by Advisor -- -- -- (11)
------- ------- ------ ------
Expenses, Net 271 879 207 85
------- ------- ------ ------
NET INVESTMENT LOSS (176) (363) (130) (64)
REALIZED AND UNREALIZED GAIN (LOSS):
Net Realized Gain (Loss) on:
Investments 1,587 6,314 (307) (385)
Futures Contracts and Options (269) (216) 114 (25)
------- ------- ------ ------
Net Realized Gain (Loss) 1,318 6,098 (193) (410)
Net Change in Unrealized Appreciation/Depreciation on:
Investments 10,421 14,832 3,665 1,975
Futures Contracts and Options 30 -- 38 --
------- ------- ------ ------
Net Change in Unrealized Appreciation/Depreciation 10,451 14,832 3,703 1,975
------- ------- ------ ------
NET GAIN ON INVESTMENTS 11,769 20,930 3,510 1,565
------- ------- ------ ------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $11,593 $20,567 $3,380 $1,501
======= ======= ====== ======
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------
(In Thousands)
<CAPTION>
Strong Enterprise Fund Strong Growth 20 Fund
--------------------------------- ---------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
June 30, 1999 Dec. 31, 1998 June 30, 1999 Dec. 31, 1998
---------------- ------------- ---------------- -------------
(Unaudited) (Note 1) (Unaudited)
OPERATIONS:
<S> <C> <C> <C> <C>
Net Investment Loss ($ 176) ($ 10) ($ 363) ($ 355)
Net Realized Gain 1,318 336 6,098 6,240
Net Change in Unrealized Appreciation/Depreciation 10,451 1,643 14,832 13,211
------- ------- -------- -------
Net Increase in Net Assets Resulting from Operations 11,593 1,969 20,567 19,096
DISTRIBUTIONS:
From Net Investment Income -- -- -- --
In Excess of Net Investment Income -- -- -- (1)
From Net Realized Gains (369) (2) (3,026) --
------- ------- -------- -------
Total Distributions (369) (2) (3,026) (1)
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 60,779 10,984 126,588 39,531
Proceeds from Reinvestment of Distributions 357 2 2,943 1
Payment for Shares Redeemed (20,444) (1,809) (36,077) (47,100)
------- ------- -------- -------
Net Increase (Decrease) in Net Assets from Capital
Share Transactions 40,692 9,177 93,454 (7,568)
------- ------- -------- -------
TOTAL INCREASE IN NET ASSETS 51,916 11,144 110,995 11,527
NET ASSETS:
Beginning of Period 11,144 -- 71,205 59,678
------- ------- -------- -------
End of Period $63,060 $11,144 $182,200 $71,205
======= ======= ======== =======
TRANSACTIONS IN SHARES OF THE FUND:
Sold 3,488 897 7,295 3,204
Issued in Reinvestment of Distributions 22 -- 173 --
Redeemed (1,182) (141) (2,116) (3,869)
----- --- ----- -----
Net Increase (Decrease) in Shares of the Fund 2,328 756 5,352 (665)
===== === ===== =====
See Notes to Financial Statements.
17
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- ---------------------------------------------------------------------------------------------------------------------------------
(In Thousands)
<CAPTION>
Strong Small Cap Value Fund Strong U.S. Emerging Growth Fund
-------------------------------- --------------------------------
Six Months Ended Year Ended Six Months Ended
June 30, 1999 Dec. 31, 1998 June 30, 1999
---------------- ------------- ----------------
(Unaudited) (Unaudited) (Note 1)
OPERATIONS:
<S> <C> <C> <C>
Net Investment Loss ($ 130) ($ 169) ($ 64)
Net Realized Loss (193) (188) (410)
Net Change in Unrealized Appreciation/Depreciation 3,703 (1,297) 1,975
------- ------- -------
Net Increase (Decrease) in Net Assets Resulting from Operations 3,380 (1,654) 1,501
DISTRIBUTIONS FROM NET INVESTMENT INCOME -- -- --
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 19,562 60,317 16,979
Proceeds from Reinvestment of Distributions -- -- --
Payment for Shares Redeemed (17,584) (34,525) (5,946)
------- ------- -------
Net Increase in Net Assets from Capital Share Transactions 1,978 25,792 11,033
------- ------- -------
TOTAL INCREASE IN NET ASSETS 5,358 24,138 12,534
NET ASSETS:
Beginning of Period 24,138 -- --
------- ------- -------
End of Period $29,496 $24,138 $12,534
======= ======= =======
TRANSACTIONS IN SHARES OF THE FUND:
Sold 1,806 5,453 1,545
Issued in Reinvestment of Distributions -- -- --
Redeemed (1,670) (3,177) (528)
----- ----- -----
Net Increase in Shares of the Fund 136 2,276 1,017
===== ===== =====
See Notes to Financial Statements.
18
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
June 30, 1999 (Unaudited)
1. ORGANIZATION
The accompanying financial statements represent the Strong Aggressive
Growth Funds (the "Funds"), which include the following funds, each with
its own investment objectives and policies:
- Strong Enterprise Fund
- Strong Growth 20 Fund
- Strong Small Cap Value Fund
- Strong U.S. Emerging Growth Fund
Each of the above funds is a series of Strong Equity Funds, Inc., a
diversified, open-end management investment company registered under the
Investment Company Act of 1940. The inception date for Strong Enterprise
Fund is September 30, 1998. Strong U.S. Emerging Growth Fund commenced
operations on January 4, 1999.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Funds in the preparation of their financial statements.
(A) Security Valuation -- Portfolio securities traded primarily on a
principal securities exchange are valued at the last reported sales
price or the mean of the latest bid and asked prices where no last
sales price is available. Securities traded over-the-counter are
valued at the mean of the latest bid and asked prices or the last
reported sales price. Debt securities not traded on a principal
securities exchange are valued through valuations obtained from a
commercial pricing service, otherwise sale or bid prices are used.
Securities for which market quotations are not readily available are
valued at fair value as determined in good faith under consistently
applied procedures established by and under the general supervision of
the Board of Directors. Securities which are purchased within 60 days
of their stated maturity are valued at amortized cost, which
approximates fair value.
The Funds may own certain investment securities which are restricted
as to resale. These securities are valued after giving due
consideration to pertinent factors including recent private sales,
market conditions and the issuer's financial performance. The Funds
generally bear the costs, if any, associated with the disposition of
restricted securities. The Funds held no restricted securities at June
30, 1999.
(B) Federal Income and Excise Taxes and Distributions to Shareholders --
The Funds intend to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to
distribute substantially all of their taxable income to their
shareholders in a manner which results in no tax cost to the Funds.
Therefore, no federal income or excise tax provision is required.
The character of distributions made during the year from net
investment income or net realized gains for financial statement
purposes may differ from the characterization for federal income tax
purposes due to differences in the recognition of income and expense
items for financial statement and tax purposes. Where appropriate,
reclassifications between net asset accounts are made for such
differences that are permanent in nature.
Each Fund generally pays dividends from net investment income and
distributes any net capital gains that it realizes annually.
(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 Funds' investment objectives and limitations. The Funds intend to
use such derivative instruments primarily to hedge or protect from
adverse movements in securities prices or interest rates. The use of
these instruments may involve risks such as the possibility of
illiquid markets or imperfect correlation between the value of the
instruments and the underlying securities, or that the counterparty
will fail to perform its obligations.
Investments in foreign denominated assets or forward currency
contracts may involve greater risks than domestic investments, 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.
19
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
June 30, 1999 (Unaudited)
(F) Options -- The Funds may write put or call options. Premiums received
by the Funds upon writing put or call options are recorded as an asset
with a corresponding liability which is subsequently adjusted to the
current market value of the option. When an option expires, is
exercised, or is closed, the Funds realize a gain or loss, and the
liability is eliminated. The Funds continue to bear the risk of
adverse movements in the price of the underlying asset during the
period of the option, although any potential loss during the period
would be reduced by the amount of the option premium received.
(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) Repurchase Agreements -- The Funds may enter into repurchase
agreements with institutions that the Funds' investment advisor,
Strong Capital Management, Inc. (the "Advisor"), has determined are
creditworthy pursuant to criteria adopted by the Board of Directors.
Each repurchase agreement is recorded at cost. The Funds require that
the collateral, represented by securities (primarily U.S. Government
securities), in a repurchase transaction be maintained in a segregated
account with a custodian bank in a manner sufficient to enable the
Funds to obtain those securities in the event of a default of the
repurchase agreement. On a daily basis, the Advisor monitors each
repurchase agreement to ensure the value of the collateral, including
accrued interest, is at least equal to the amounts owed to the Funds
under each repurchase agreement.
(J) 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.
(K) 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
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
annualized rates of 1.00% of the average daily net assets of the Funds.
Based on the terms of the Advisory Agreements, advisory fees and other
expenses will be waived by the Advisor if the Fund's operating expenses
exceed 2% of the average daily net assets of the Fund. In addition, the
Fund's Advisor may voluntarily waive or absorb certain expenses at their
discretion. Shareholder recordkeeping and related service fees are based on
contractually established rates for each open and closed shareholder
account. The Advisor is compensated for certain other services related to
costs incurred for reports to shareholders.
The Funds may invest cash in money market funds sponsored and managed by
the Advisor, subject to certain limitations. The terms of such transactions
are identical to those of non-related entities except that, to avoid
duplicate investment advisory fees, advisory fees of each Fund are reduced
by an amount equal to advisory fees paid to the Advisor under its
investment advisory agreement with the money market funds.
Certain information regarding related party transactions, excluding the
effects of waivers and absorptions, for the six months ended June 30, 1999,
is as follows:
Shareholder
Payable to Servicing and Other Unaffiliated
Advisor at Expenses Directors'
June 30, 1999 Paid to Advisor Fees
------------- ------------------- ------------
STRONG ENTERPRISE FUND $ 432 $ 52,779 $750
STRONG GROWTH 20 FUND 657 165,737 750
STRONG SMALL CAP VALUE FUND 14,156 52,963 750
STRONG U.S. EMERGING GROWTH FUND 3 10,002 750
20
<PAGE>
- --------------------------------------------------------------------------------
4. LINE OF CREDIT
The Strong Funds have established a line of credit agreement ("LOC") with
certain financial institutions to be used for temporary or emergency
purposes, primarily for financing redemption payments. Combined borrowings
among all participating Strong Funds are subject to a $350 million cap on
the total line of credit. For individual Funds, borrowings under the LOC
are limited to either the lesser of 15% of the market value of total assets
or any explicit borrowing limits in the Funds' prospectus. Borrowings under
the LOC bear interest based on prevailing market rates as defined in the
LOC. A commitment fee of .07% per annum is incurred on the unused portion
of the line of credit and is allocated to all participating Strong Funds.
At June 30, 1999, there were no borrowings by the Funds outstanding under
the LOC.
5. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of long-term securities during the six
months ended June 30, 1999, were as follows:
Purchases Sales
------------ ------------
STRONG ENTERPRISE FUND $111,529,518 $ 72,882,070
STRONG GROWTH 20 FUND 368,818,533 289,641,768
STRONG SMALL CAP VALUE FUND 15,844,432 14,744,029
STRONG U.S. EMERGING GROWTH FUND 23,172,477 12,639,936
6. INCOME TAX INFORMATION
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>
at June 30, 1999 at December 31, 1998
---------------------------------------------------------- --------------------
<CAPTION>
Federal Tax Unrealized Unrealized Net Net Capital Loss
Cost Appreciation Depreciation Appreciation Carryovers
----------- ------------ ------------ ------------ ----------------
<S> <C> <C> <C> <C> <C>
STRONG ENTERPRISE FUND $ 54,627,227 $11,197,256 $ 586,733 $10,610,523 $ --
STRONG GROWTH 20 FUND 158,375,028 29,144,706 239,696 28,905,010 --
STRONG SMALL CAP VALUE FUND 27,653,122 4,468,877 2,445,396 2,023,481 131,504
STRONG U.S. EMERGING GROWTH FUND 11,100,497 1,664,985 200,789 1,464,196 --
21
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------
STRONG ENTERPRISE FUND
- ------------------------------------------------------------------------------
Period Ended
---------------------
June 30, Dec. 31,
Selected Per-Share Data(a) 1999(b) 1998(c)
- ------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $14.74 $10.00
Income From Investment Operations
Net Investment Loss (0.06) (0.01)
Net Realized and Unrealized Gains on Investments 5.99 4.75
- ------------------------------------------------------------------------------
Total from Investment Operations 5.93 4.74
Less Distributions
From Net Investment Income -- --
From Net Realized Gains (0.22) (0.00)(d)
- ------------------------------------------------------------------------------
Total Distributions (0.22) (0.00)(d)
- ------------------------------------------------------------------------------
Net Asset Value, End of Period $20.45 $14.74
==============================================================================
Ratios and Supplemental Data
- ------------------------------------------------------------------------------
Total Return +40.6% +47.4%
Net Assets, End of Period (In Millions) $63 $11
Ratio of Expenses to Average Net Assets 1.6%* 2.0%*
Ratio of Net Investment Loss to Average Net Assets (1.0%)* (0.9%)*
Portfolio Turnover Rate 222.2% 95.7%
<TABLE>
STRONG GROWTH 20 FUND
- ----------------------------------------------------------------------------------------
Period Ended
---------------------------------
<CAPTION>
June 30, Dec. 31, Dec. 31,
Selected Per-Share Data(a) 1999(b) 1998 1997(e)
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $15.44 $11.31 $10.00
Income From Investment Operations
Net Investment Loss (0.04) (0.08) (0.01)
Net Realized and Unrealized Gains on Investments 3.33 4.21 1.40
- ----------------------------------------------------------------------------------------
Total from Investment Operations 3.29 4.13 1.39
Less Distributions
From Net Investment Income -- -- --
In Excess of Net Investment Income -- (0.00)(d) (0.08)
From Net Realized Gains (0.44) -- --
- ----------------------------------------------------------------------------------------
Total Distributions (0.44) (0.00)(d) (0.08)
- ----------------------------------------------------------------------------------------
Net Asset Value, End of Period $18.29 $15.44 $11.31
========================================================================================
Ratios and Supplemental Data
- ----------------------------------------------------------------------------------------
Total Return +21.5% +36.5% +13.9%
Net Assets, End of Period (In Millions) $182 $71 $60
Ratio of Expenses to Average Net Assets 1.4%* 1.5%* 1.4%*
Ratio of Net Investment Loss to Average Net Assets (0.6%)* (0.6%)* (0.3%)*
Portfolio Turnover Rate 262.9% 541.2% 250.1%
</TABLE>
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund
outstanding for the entire period.
(b) For the six months ended June 30, 1999 (unaudited).
(c) For the period from September 30, 1998 (inception) to December 31, 1998.
(d) Amount calculated is less than $0.01.
(e) For the period from June 30, 1997 (inception) to December 31, 1997.
See Notes to Financial Statements.
22
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- ----------------------------------------------------------------------------
STRONG SMALL CAP VALUE FUND
- ----------------------------------------------------------------------------
Period Ended
---------------------
June 30, Dec. 31,
Selected Per-Share Data(a) 1999(b) 1998
- ----------------------------------------------------------------------------
Net Asset Value, Beginning of Period $10.61 $10.00
Income From Investment Operations
Net Investment Loss (0.05) (0.07)
Net Realized and Unrealized Gains on Investments 1.67 0.68
- ----------------------------------------------------------------------------
Total from Investment Operations 1.62 0.61
Less Distributions
From Net Investment Income -- --
- ----------------------------------------------------------------------------
Total Distributions -- --
- ----------------------------------------------------------------------------
Net Asset Value, End of Period $12.23 $10.61
============================================================================
Ratios and Supplemental Data
- ----------------------------------------------------------------------------
Total Return +15.3% +6.1%
Net Assets, End of Period (In Millions) $29 $24
Ratio of Expenses to Average Net Assets 1.8%* 1.9%*
Ratio of Net Investment Loss to Average Net Assets (1.1%)* (1.0%)*
Portfolio Turnover Rate 61.9% 121.5%
STRONG U.S. EMERGING GROWTH FUND
- ---------------------------------------------------------------------
Period Ended
------------
June 30,
Selected Per-Share Data(a) 1999(b)
- ---------------------------------------------------------------------
Net Asset Value, Beginning of Period $10.00
Income From Investment Operations
Net Investment Loss (0.06)
Net Realized and Unrealized Gains on Investments 2.39
- ---------------------------------------------------------------------
Total from Investment Operations 2.33
Less Distributions
From Net Investment Income --
- ---------------------------------------------------------------------
Total Distributions --
- ---------------------------------------------------------------------
Net Asset Value, End of Period $12.33
=====================================================================
Ratios and Supplemental Data
- ---------------------------------------------------------------------
Total Return +23.3%
Net Assets, End of Period (In Millions) $13
Ratio of Expenses to Average Net Assets 2.0%*
Ratio of Net Investment Loss to Average Net Assets (1.5%)*
Portfolio Turnover Rate 146.9%
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund
outstanding for the entire period.
(b) For the six months ended June 30, 1999 (unaudited).
See Notes to Financial Statements.
23
<PAGE>
NOTES
- --------------------------------------------------------------------------------
24
<PAGE>
DIRECTORS
Richard S. Strong
Willie D. Davis
Stanley Kritzik
Marvin E. Nevins
William F. Vogt
OFFICERS
Richard S. Strong, Chairman of the Board
Mary F. Hoppa, Vice President
John S. Weitzer, Vice President
Stephen J. Shenkenberg, Vice President and Secretary
John W. Widmer, Treasurer
INVESTMENT ADVISOR
Strong Capital Management, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
DISTRIBUTOR
Strong Investments, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
CUSTODIAN
Firstar Bank Milwaukee, N.A.
P.O. Box 701, Milwaukee, Wisconsin 53201
TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT
Strong Capital Management, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
100 East Wisconsin Avenue, Milwaukee, Wisconsin 53202
LEGAL COUNSEL
Godfrey & Kahn, S.C.
780 North Water Street, Milwaukee, Wisconsin 53202
<PAGE>
For a prospectus containing more complete information, including management fees
and expenses, please call 1-800-368-1030. Please read it carefully before
investing or sending money. This report does not constitute an offer for the
sale of securities. Strong Funds are offered for sale by prospectus only.
[PICTURE OF TELEPHONE]
To order a free prospectus kit,
CALL 1-800-368-1030.
To learn more about our funds,
discuss an existing account,
or conduct a transaction,
CALL 1-800-368-3863.
--------------------
If you are a
Financial Professional,
CALL 1-800-368-1683
[PICTURE OF STRONG WEB SITE ON COMPUTER]
Strong On-line
www.strongfunds.com
[STRONG LOGO]
STRONG FUNDS
P.O. Box 2936 o Milwaukee, Wisconsin 53201
Strong Investments, Inc. 12426H99 SAGG
<PAGE>
