[STRONG LOGO]
THE STRONG
DOW 30 VALUE
FUND
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SEMI-ANNUAL REPORT o JUNE 30, 1999
[PICTURE OF STRONG FUNDS BUILDING]
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THE STRONG
DOW 30 VALUE FUND
--------------------------
SEMI-ANNUAL REPORT o JUNE 30, 1999
TABLE OF CONTENTS
INVESTMENT REVIEW
The Strong Dow 30 Value Fund ....................................2
FINANCIAL INFORMATION
Schedule of Investments in Securities ...........................4
Statement of Assets and Liabilities .............................5
Statement of Operations .........................................6
Statements of Changes in Net Assets .............................7
Notes to Financial Statements ...................................8
FINANCIAL HIGHLIGHTS ................................................10
<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 DOW 30 VALUE FUND
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FUND
HIGHLIGHTS
o The Strong Dow 30 Value Fund returned 20.38% for the six months ended June
30, 1999.(1) The strong first-half performance was keyed by an
impressive second quarter, which saw the fund gain 12.33%.
o Fund performance was fueled by a broadening in market leadership to include
cyclical and value stocks--sectors of the market that had been out of favor
since early 1995.
o Strength in cyclical stocks was especially good news for the Dow, which is
particularly sensitive to their price movements.
- ---------------------------------------
AVERAGE ANNUAL
TOTAL RETURNS(1)
As of 6-30-99
1-year 24.00%
Since Inception 25.01%
(on 12-31-97)
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FIVE LARGEST
STOCK HOLDINGS
As of 6-30-99
SECURITY % OF NET ASSETS
J.P. Morgan & Company, Inc. 7.0%
International Business
Machines Corporation 5.9%
American Express Company 5.9%
Hewlett-Packard Company 4.9%
Johnson & Johnson 4.7%
Please see the Schedule of Investments
in Securities for a complete listing of
the Fund's portfolio.
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PERSPECTIVES
FROM THE MANAGERS
/s/Charles B. Carlson /s/ Richard T. Moroney
Charles B. Carlson Richard T. Moroney
Portfolio Co-manager Portfolio Co-manager
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After four years of impressive gains, many on Wall Street expected the
stock-market averages to take a breather in the first half of 1999. Your Fund's
managers partly agreed, as we felt big gains would be difficult to achieve
unless market breadth improved and the profit outlook brightened.
Both conditions were met when global economic prospects improved and
March-quarter corporate earnings showed encouraging growth, keying a broad-based
rally. Sharp gains among cyclical and value stocks pushed the Dow Industrials
sharply higher, and some of these stocks no longer represent such compelling
bargains. In our view, the best-performing stocks over the next 12 to 18 months
will be quality issues with reasonable valuations, solid profit outlooks, and
the potential to surpass Wall Street expectations.
Relative to the Dow Jones Industrial Average, the Fund was overweighted or
neutral in most cyclical stocks at the beginning of 1999. However, some cyclical
stocks now rank poorly in our valuation model, so we are selectively
underweighting some of the stocks. For example, Chevron, Exxon, International
Paper, and Union Carbide now trade at rich valuations even if you assume
earnings will rebound strongly in 2000.
Sector rotation in the first half also created some buying opportunities. For
the first time, drug manufacturer Merck & Co. now ranks among the top 10 in our
valuation model.
------------------------------------
SHARP GAINS
AMONG CYCLICAL
AND VALUE STOCKS
PUSHED THE DOW
INDUSTRIALS SHARPLY
HIGHER...
------------------------------------
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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.
2
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Considering the company's bright long-term profit outlook, we feel the stock now
represents one of the better values in the Dow.
AT&T and Citigroup are no longer ranked among the very best Dow stocks in our
valuation model. But we expect to remain overweighted in both these stocks, as
both companies hold unique opportunities not fully recognized on Wall Street.
Both companies, in our view, have the potential to surpass consensus
expectations.
Going forward, we believe the portfolio is positioned to capitalize on an
environment of solid economic growth and contained interest rates. We don't
believe the recent advance in interest rates is likely to be extended sharply
higher. Both Citigroup, the leader in financial services, and General Motors,
the auto giant that ranks among the best in our value model, should surpass
consensus expectations if interest rates stabilize and the global recovery
continues.
Thank you for choosing the Strong Dow 30 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 Dow Jones Industrial Lipper Growth &
DOW 30 VALUE FUND Average (SM)* Income Funds Index*
12-97 10,000 10,000 10,000
3-98 11,127 11,172 11,140
6-98 11,273 11,411 11,162
9-98 10,065 10,048 9,770
12-98 11,611 11,813 11,358
3-99 12,444 12,643 11,599
6-99 13,978 14,227 12,675
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 Dow
Jones Industrial Average(SM) (DJIA) and the Lipper Growth & Income Funds Index.
Results include the reinvestment of 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.
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* The DJIA is an unmanaged index generally representative of the U.S. stock
market. The Lipper Growth & Income Funds Index is an equally-weighted
performance index of the largest qualifying funds in this Lipper category.
Source of the DJIA index data is Standard & Poor's Micropal. Source of the
Lipper index data is Lipper Inc.
YOUR FUND'S
APPROACH
THE STRONG DOW 30 VALUE FUND INVESTS SOLELY IN THE 30 STOCKS THAT COMPRISE THE
DOW JONES INDUSTRIAL AVERAGE (DJIA). WITH ONE HALF OF THE FUND'S ASSETS, THE
MANAGERS ATTEMPT TO REPLICATE THE DJIA AND EQUAL ITS RETURN. IN THE OTHER HALF
OF THE PORTFOLIO, THE MANAGERS ATTEMPT TO BETTER THE DJIA'S RETURN BY
EMPHASIZING DJIA STOCKS SELLING AT ATTRACTIVE VALUATIONS. IN ASSESSING VALUE,
THE MANAGERS CONSIDER DIVIDEND YIELD, PRICE/EARNINGS RATIOS, PRICE/CASH FLOW
RATIOS, AND COMPANY GROWTH RATES. STOCKS THAT APPEAR TO BE INEXPENSIVE COMPARED
WITH HISTORICAL NORMS OR WITH OTHER DJIA STOCKS ARE OVERWEIGHTED, AND STOCKS
THAT APPEAR TO BE EXPENSIVE ARE UNDERWEIGHTED.
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MARKET
HIGHLIGHTS
o In the first half of 1999, improving corporate profit expectations and
rising interest rates led to a shift away from large-capitalization, richly
priced growth stocks toward value and cyclical stocks.
o Cyclical stocks have also benefited from further evidence of turnarounds in
Asian economies. Many Dow stocks have large Asian businesses or compete
with Asian rivals, and improvement in this area bodes well for such
cyclical sectors as energy, paper, chemicals, and machinery.
o Corporate profit growth accelerated in the first half of 1999. Improving
demand trends suggest profit comparisons will remain favorable in the
second half of the year.
3
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SCHEDULE OF INVESTMENTS IN SECURITIES JUNE 30, 1999 (UNAUDITED)
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================================================================================
STRONG DOW 30 VALUE FUND
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Shares or
Principal Value
Amount (Note 2)
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COMMON STOCKS 99.1%
AEROSPACE & DEFENSE 6.7%
The Boeing Company 58,000 $ 2,562,875
United Technologies Corporation 39,400 2,824,487
-----------
5,387,362
AUTO & TRUCK PARTS 2.7%
The Goodyear Tire & Rubber Company 36,600 2,152,538
AUTOMOBILE 3.9%
General Motors Corporation 47,900 3,161,400
BANK - MONEY CENTER 10.6%
Citigroup, Inc. 61,650 2,928,375
J.P. Morgan & Company, Inc. 39,900 5,605,950
-----------
8,534,325
BEVERAGE - SOFT DRINK 1.6%
The Coca-Cola Company 19,800 1,237,500
CHEMICAL 1.2%
Union Carbide Corporation 19,800 965,250
COMPUTER - MAINFRAME 10.8%
Hewlett-Packard Company 38,900 3,909,450
International Business Machines Corporation 36,900 4,769,325
-----------
8,678,775
DIVERSIFIED OPERATIONS 10.2%
Allied Signal, Inc. 40,300 2,538,900
E.I. Du Pont de Nemours & Company 36,100 2,466,081
Minnesota Mining & Manufacturing Company 36,300 3,155,831
-----------
8,160,812
ELECTRICAL EQUIPMENT 4.1%
General Electric Company 28,900 3,265,700
FINANCE - MISCELLANEOUS 5.9%
American Express Company 36,500 4,749,563
HEALTHCARE - DRUG/DIVERSIFIED 8.9%
Johnson & Johnson 38,200 3,743,600
Merck & Company, Inc. 46,000 3,404,000
-----------
7,147,600
LEISURE PRODUCT 3.4%
Eastman Kodak Company 40,200 2,723,550
LEISURE SERVICE 1.4%
The Walt Disney Company 36,100 1,112,331
MACHINERY - CONSTRUCTION & MINING 2.7%
Caterpillar, Inc. 36,100 2,166,000
METALS & MINING 2.8%
Alcoa, Inc. 36,600 2,264,625
OIL - INTERNATIONAL INTEGRATED 6.6%
Chevron Corporation 31,000 2,950,812
Exxon Corporation 30,100 2,321,463
-----------
5,272,275
PAPER & FOREST PRODUCTS 1.9%
International Paper Company 30,800 1,555,400
RETAIL - DEPARTMENT STORE 2.0%
Sears, Roebuck & Company 36,400 1,622,075
RETAIL - MAJOR CHAIN 1.5%
Wal-Mart Stores, Inc. 25,100 1,211,075
RETAIL - RESTAURANT 1.0%
McDonald's Corporation 18,800 776,675
SOAP & CLEANING PREPARATION 2.7%
The Procter & Gamble Company 24,200 2,159,850
TELECOMMUNICATION SERVICE 4.0%
AT&T Corporation 57,200 3,192,475
TOBACCO 2.5%
Philip Morris Companies, Inc. 49,200 1,977,225
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TOTAL COMMON STOCKS (Cost $70,837,705) 79,474,381
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SHORT-TERM INVESTMENTS (a) 1.7%
COMMERCIAL PAPER
INTEREST BEARING, DUE UPON DEMAND
General Mills, Inc., 4.82% $268,824 268,824
Pitney Bowes Credit Corporation, 4.82% 103,776 103,776
Sara Lee Corporation, 4.82% 26,139 26,139
Warner Lambert Company, 4.91% 100 100
Wisconsin Electric Power Company, 4.91% 982,061 982,061
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TOTAL SHORT-TERM INVESTMENTS (Cost $1,380,900) 1,380,900
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TOTAL INVESTMENTS IN SECURITIES (Cost $72,218,605) 100.8% 80,855,281
Other Assets and Liabilities, Net (0.8%) (669,255)
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NET ASSETS 100.0% $80,186,026
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LEGEND
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(a) Short-term investments include any security which has a maturity of less
than one year.
Percentages are stated as a percent of net assets.
See Notes to Financial Statements.
4
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STATEMENT OF ASSETS AND LIABILITIES
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June 30, 1999 (Unaudited)
Strong Dow 30
Value Fund
-------------
ASSETS:
Investments in Securities, at Value (Cost of $72,218,605) $80,855,281
Receivable for Fund Shares Sold 112,700
Dividends and Interest Receivable 121,976
Other Assets 17,086
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Total Assets 81,107,043
LIABILITIES:
Payable for Securities Purchased 892,192
Payable for Fund Shares Redeemed 4,970
Accrued Operating Expenses and Other Liabilities 23,855
-----------
Total Liabilities 921,017
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NET ASSETS $80,186,026
===========
NET ASSETS CONSIST OF:
Capital Stock (par value and paid-in capital) $71,399,410
Undistributed Net Investment Income 120,085
Undistributed Net Realized Gain 29,855
Net Unrealized Appreciation 8,636,676
-----------
Net Assets $80,186,026
===========
Capital Shares Outstanding (Unlimited Number Authorized) 5,826,276
NET ASSET VALUE PER SHARE $13.76
======
See Notes to Financial Statements.
5
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STATEMENT OF OPERATIONS
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For the Six Months Ended June 30, 1999 (Unaudited)
STRONG DOW 30
VALUE FUND
-------------
INCOME:
Dividends $ 385,390
Interest 44,993
----------
Total Income 430,383
EXPENSES:
Investment Advisory Fees 173,135
Custodian Fees 16,308
Shareholder Servicing Costs 77,803
Reports to Shareholders 20,920
Licensing Fee 15,000
Other 33,833
----------
Total Expenses before Waivers and Absorptions 336,999
Voluntary Expense Waivers and Absorptions by Advisor (26,670)
----------
Expense, Net 310,329
----------
NET INVESTMENT INCOME 120,054
REALIZED AND UNREALIZED GAIN:
Net Realized Gain on Investments 785,373
Net Change in Unrealized Appreciation/Depreciation on Investments 6,239,964
----------
NET GAIN ON INVESTMENTS 7,025,337
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $7,145,391
==========
See Notes to Financial Statements.
6
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<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
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<CAPTION>
STRONG DOW 30 VALUE FUND
------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 DEC. 31, 1998
---------------- -------------
(Unaudited) (Note 1)
OPERATIONS:
<S> <C> <C>
Net Investment Income $ 120,054 $ 381,766
Net Realized Gain (Loss) 785,373 (755,518)
Net Change in Unrealized Appreciation/Depreciation 6,239,964 2,396,712
----------- -----------
Net Increase in Net Assets Resulting from Operations 7,145,391 2,022,960
DISTRIBUTIONS FROM NET INVESTMENT INCOME -- (381,735)
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 57,017,360 36,153,107
Proceeds from Reinvestment of Distributions -- 370,392
Payment for Shares Redeemed (12,224,273) (9,917,176)
----------- -----------
Net Increase in Net Assets from Capital Share Transactions 44,793,087 26,606,323
----------- -----------
TOTAL INCREASE IN NET ASSETS 51,938,478 28,247,548
NET ASSETS:
Beginning of Period 28,247,548 --
----------- -----------
End of Period $80,186,026 $28,247,548
=========== ===========
TRANSACTIONS IN SHARES OF THE FUND:
Sold 4,312,594 3,359,816
Issued in Reinvestment of Distributions -- 32,316
Redeemed (957,231) (921,219)
--------- ---------
Net Increase in Shares of the Fund 3,355,363 2,470,913
========= =========
See Notes to Financial Statements.
7
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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June 30, 1999 (Unaudited)
1. ORGANIZATION
Strong Dow 30 Value Fund is a non-diversified series of Strong Equity
Funds, Inc., an open-end management investment company registered under the
Investment Company Act of 1940. The Fund commenced operations on January 2,
1998.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its 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 last 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 Fund 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 Fund generally
bears the costs, if any, associated with the disposition of restricted
securities. The Fund held no restricted securities at June 30, 1999.
(B) Federal Income and Excise Taxes and Distributions to Shareholders --
The Fund intends to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders
in a manner which results in no tax cost to the Fund. 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.
The 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 Fund 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 Fund intends 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 foreign 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 Fund pledges to
the broker cash or other investments equal to the minimum "initial
margin" requirements of the exchange. Additional securities held by
the Fund may be designated as collateral on open futures contracts.
The Fund also receives from or pays 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 Fund may write put or call options (none were written
during the period). Premiums received by the Fund 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 Fund
realizes a gain or loss, and the liability is eliminated. The Fund
continues 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) Repurchase Agreements -- The Fund may enter into repurchase agreements
with institutions that the Fund's
8
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- --------------------------------------------------------------------------------
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
Fund requires that the collateral, represented by securities
(primarily U.S. Government securities), in a repurchase transaction be
maintained in a segregated account with a custodian in a manner
sufficient to enable the Fund to obtain those securities in the event
of a default of the issuer 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 amount owed to the Fund under each repurchase agreement.
(H) 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.
(I) 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 premium and discounts.
3. RELATED PARTY TRANSACTIONS
The Advisor, with whom certain officers and directors of the Fund are
affiliated, provides investment advisory services and shareholder
recordkeeping and related services to the Fund. Investment advisory fees,
which are established by terms of the Advisory Agreement, are based on an
annualized rate of 0.80% of the average daily net assets of the Fund. Based
on the terms of the Advisory Agreement, 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. In addition, the Advisor is compensated for certain other services
related to costs incurred for reports to shareholders.
Horizon Investment Services, LLC ("Horizon") manages the investments of
Strong Dow 30 Value Fund under an agreement with the Advisor. Horizon is
compensated by the Advisor (not the Fund) and bears all of its own expenses
in providing subadvisory sevices.
The Fund 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 the Fund are reduced by an
amount equal to advisory fees paid to the Advisor under its investment
advisory agreement with the money market funds.
The amount payable to the Advisor at June 30, 1999, shareholder servicing
and other expenses paid to the Advisor, and unaffiliated directors' fees
for the six months then ended, were $15,316, $74,712 and $750,
respectively.
4. LINE OF CREDIT
The Strong Funds have established a line of credit agreement ("LOC") with
certain financial institutions to be used for temporary or emergency
purposes, primarily for financing redemption payments. Combined borrowings
among all participating Strong Funds are subject to a $350 million cap on
the total line of credit. For individual Funds, borrowings under the LOC
are limited to either the lesser of 15% of the market value of total assets
or any explicit borrowing limits in the Fund's 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 Fund outstanding under
the LOC.
5. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of long-term securities for the six
months ended June 30, 1999 were $57,502,966 and $13,244,859, respectively.
6. INCOME TAX INFORMATION
At June 30, 1999, the cost of investments in securities for federal income
tax purposes was $73,013,743. Net unrealized appreciation of securities was
$7,841,538, consisting of gross unrealized appreciation and depreciation of
$9,263,852 and $1,422,314, respectively. At December 31, 1998, the Fund had
a capital loss carryover of $287,516 which expires in 2006.
9
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------------------------------
STRONG DOW 30 VALUE FUND
- ------------------------------------------------------------------------------------------------------
<CAPTION>
Period Ended
-----------------------
June 30, Dec. 31,
Selected Per-Share Data(a) 1999(b) 1998
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period $11.43 $10.00
Income From Investment Operations
Net Investment Income 0.02 0.18
Net Realized and Unrealized Gains on Investments 2.31 1.43
- ------------------------------------------------------------------------------------------------------
Total from Investment Operations 2.33 1.61
Less Distributions
From Net Investment Income -- (0.18)
- ------------------------------------------------------------------------------------------------------
Total Distributions -- (0.18)
- ------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $13.76 $11.43
======================================================================================================
Ratios and Supplemental Data
- ------------------------------------------------------------------------------------------------------
Total Return +20.4% +16.1%
Net Assets, End of Period (In Thousands) $80,186 $28,248
Ratio of Expenses to Average Net Assets without Waivers and Absorptions 1.5%* 2.0%
Ratio of Expenses to Average Net Assets 1.4%* 0.1%
Ratio of Net Investment Income to Average Net Assets 0.5%* 2.1%*
Portfolio Turnover Rate 29.4% 45.7%
* 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).
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
NOTES
- --------------------------------------------------------------------------------
11
<PAGE>
NOTES
- --------------------------------------------------------------------------------
12
<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
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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.
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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. 12423H99 SDOW
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