STRONG EQUITY FUNDS INC, 485BPOS, 2000-04-27

STRONG EQUITY FUNDS INC
485BPOS, 2000-04-27

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As filed with the Securities and Exchange Commission on or about April 27, 2000

Securities Act Registration No. 33-70764
Investment Company Act Registration No. 811-8100

SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 35 [ X ]
and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 36 [ X ]

(Check appropriate box or boxes)

STRONG EQUITY FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)

100 Heritage Reserve
Menomonee Falls, Wisconsin 53051
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (414) 359-3400

Stephen J. Shenkenberg
Strong Capital Management, Inc.
100 Heritage Reserve
Menomonee Falls, Wisconsin 53051
(Name and Address of Agent for Service)

It is proposed that this filing will become effective (check appropriate
box).

[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[ X ] on May 1, 2000 pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485
[ ] on (date) pursuant to paragraph (a)(1) of Rule 485
[ ] 75 days after filing pursuant to paragraph (a)(2) of Rule 485
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485

If appropriate, check the following box:

[ ] this post-effective amendment designates a new effective
date for a previously filed post-effective amendment.

This Post-Effective Amendment to the Registration Statement of Strong Equity
Funds, Inc., which is currently comprised of fourteen funds, relates only to
the Strong Dow 30 Value Fund, Strong Enterprise Fund, Strong Growth Fund,
Strong Growth 20 Fund, Strong Index 500 Fund, Strong Mid Cap Disciplined Fund,
Strong Mid Cap Growth Fund, Strong Small Cap Value Fund, Strong Strategic
Growth Fund, Strong U.S. Emerging Growth Fund, and Strong Value Fund, which are
being updated through this Amendment. This Post-Effective Amendment does not
relate to, amend, supersede, or otherwise affect the separate Prospectuses and
Statements of Additional Information contained in Post-Effective Amendment No.
32.

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[Strong logo and picture of man and two children fishing]

prospectus
THE STRONG AGGRESSIVE
GROWTH FUNDS
investor class

May 1, 2000

The Strong Enterprise Fund

The Strong Growth 20 Fund

The Strong Small Cap Value Fund

The Strong U.S. Emerging Growth Fund

THE SECURITIES AND EXCHANGE COMMISSION (SEC) HAS NOT APPROVED OR DISAPPROVED OF
THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

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TABLE OF CONTENTS
Your Investment.................................................................
KEY INFORMATION.................................................................
What are the funds' goals?.....................................................1
What are the funds' principal investment strategies?...........................1
What are the main risks of investing in the funds?.............................4
What are the funds' fees and expenses?.........................................8
Who are the funds' investment advisor and portfolio managers?..................9
OTHER IMPORTANT INFORMATION YOU SHOULD KNOW...................................12
Financial Highlights..........................................................12
Your Account....................................................................
Share Price...................................................................17
Buying Shares.................................................................18
Selling Shares................................................................21
Additional Policies...........................................................23
Distributions.................................................................25
Taxes.........................................................................25
Services For Investors........................................................26
Reserved Rights...............................................................29
For More Information..................................................Back Cover

IN THIS PROSPECTUS, "WE" REFERS TO STRONG CAPITAL MANAGEMENT, INC., THE
INVESTMENT ADVISOR, ADMINISTRATOR, AND TRANSFER AGENT FOR THE STRONG FUNDS.

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YOUR INVESTMENT

KEY INFORMATION

WHAT ARE THE FUNDS' GOALS?

Each fund seeks capital growth.

WHAT ARE THE FUNDS' PRINCIPAL INVESTMENT STRATEGIES?

The ENTERPRISE FUND generally invests in stocks of small- and
medium-capitalization companies, though it may invest in companies of any size.
It focuses on companies that the manager believes are positioned for rapid
growth of revenue and earnings. The fund's manager strives to find leading
companies in rapidly growing industries such as business services, computer and
digital products, financial services, healthcare services, Internet-related
companies, medical technology, retail, and telecommunications. Companies that
have the potential for accelerated earnings growth because of management
changes, new products, or changes in the economy also may be attractive
candidates for the portfolio. To a limited extent, the fund may also invest in
foreign securities. If there is a change in the company's growth prospects or a
deterioration in the company's fundamental qualities, the manager may sell that
company's stock. The fund's active trading approach may increase the fund's
costs which may reduce the fund's performance. The fund's active trading
approach may also increase the amount of capital gains tax that you pay on the
fund's returns.

The GROWTH 20 FUND focuses on stocks of 20 to 30 companies that its manager
believes have favorable prospects for accelerating growth of earnings but are
selling at reasonable valuations based on earnings, cash flow, or asset value.
The portfolio can include stocks of any size. The fund writes put and call
options. This means that the fund sells an option to another party to either
sell a stock to (put) or buy a stock from (call) the fund at a predetermined
price in the future. When the fund writes put or call options, it will receive
fees or premiums but is exposed to losses due to changes in the value of the
stock that the put or call is written against. Writing options can serve as a
limited or partial hedge against adverse market movements. This is because
declines in the value of the hedged stock will be offset by the premium
received for writing the option. Whether or not this hedging strategy is
successful depends on a variety of factors, particularly the ability of the
fund's manager to predict movements of the price of the hedged stock. The
manager's decision to engage in this hedging strategy will reflect the
manager's judgment that writing an option on a stock will provide value to the
fund and its shareholders. To a limited extent, the fund may also invest in
foreign securities. The manager may sell a stock when the company's growth
prospects become less attractive. The fund's active trading approach may
increase the fund's costs which may reduce the fund's performance. The fund's
active trading approach may also increase the amount of capital gains tax that
you pay on the fund's returns.

The SMALL CAP VALUE FUND invests at least 65% of its assets in stocks of
small-capitalization companies that the fund's manager believes are undervalued
relative to the market based on earnings, cash flow, or asset value. The fund
defines "small-capitalization companies" as companies with a market
capitalization substantially similar to that of companies in the Russell 2500
Index at the time of investment. The manager specifically looks for companies
whose stock prices may benefit from a positive dynamic of change, such as a new
management team, a new product or service, a corporate restructuring, an
improved business plan, or a change in the political, economic, or social
environment. The fund writes put and call options. This means that the fund
sells an option to another party to either sell a stock to (put) or buy a stock
from (call) the fund at a predetermined price in the future. When the fund
writes put or call options, it will receive fees or premiums but is exposed to
losses due to changes in the value of the stock that the put or call is written
against. Writing options can serve as a limited or partial hedge against
adverse market movements. This is because declines in the value of the hedged
stock will be offset by the premium received for writing the option. Whether
or not this hedging strategy is successful depends on a variety of factors,
particularly the ability of the fund's manager to predict movements of the
price of the hedged stock. The manager's decision to engage in this hedging
strategy will reflect the manager's judgment that writing an option on a stock
will provide value to the fund and its shareholders. To a limited extent,

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the fund may also invest in foreign securities. The manager may sell a stock
when he believes fundamental changes will hurt the company over the long term
or when its price becomes excessive.

The U.S. EMERGING GROWTH FUND invests in stocks of companies that appear to
have relatively strong long-term growth potential in revenues and
profitability. The fund generally invests in the stocks of small-capitalization
companies, although the fund can invest in stocks of any size. To identify
these companies, the managers look for several characteristics, including
strong revenue growth, high return on invested capital, overall financial
strength, competitive advantages, reasonable current stock price, effective
management, and competence in research, development, and marketing. If there is
deterioration in any of the stock's qualities, the manager may sell the stock.
To a limited extent, the fund may also invest in foreign securities. The fund's
active trading approach may increase the fund's costs which may reduce the
fund's performance. The fund's active trading approach may also increase the
amount of capital gains tax that you pay on the fund's returns.

The managers of each of the funds may invest any amount in cash or cash-type
securities (high-quality, short-term debt securities issued by corporations,
financial institutions, or the U.S. government) as a temporary defensive
position to avoid losses during adverse market conditions. Taking a temporary
defensive position could reduce the benefit to these funds if the market goes
up. In this case, the funds may not achieve their investment goals.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUNDS?

GENERAL STOCK RISKS: Each of the fund's major risks are those of investing in
the stock market. This means the funds may experience sudden, unpredictable
declines in value, as well as periods of poor performance. Because stock values
go up and down, the value of your fund's shares may go up and down. Therefore,
when you sell your investment, you may receive more or less money than you
originally invested.

VALUE- AND GROWTH-STYLE INVESTING: Different types of stocks tend to shift into
and out of favor with stock market investors depending on market and economic
conditions. Because each of the funds focuses on either value- or growth-style
stocks, each fund's performance may at times be better or worse than the
performance of stock funds that focus on other types of stocks, or that have a
broader investment style.

FOREIGN SECURITIES: Each of the funds may invest up to 25% of their assets in
foreign securities. Foreign investments involve additional risks, including
currency-rate fluctuations, political and economic instability, differences in
financial reporting standards, and less-strict regulation of securities
markets.

SMALLER AND MEDIUM COMPANIES: Each of the funds invests a substantial portion
of its assets in the stocks of smaller-capitalization companies. Small- and
medium-capitalization companies often have narrower markets and more limited
managerial and financial resources than larger, more established companies. As
a result, their performance can be more volatile and they face greater risk of
business failure, which could increase the volatility of the funds' portfolios.
Generally, the smaller the company size, the greater these risks.

NONDIVERSIFIED PORTFOLIOS: The GROWTH 20 FUND is a nondiversified fund so it
takes large positions in individual stocks. As a result, the shares of this
fund are likely to fluctuate in value more than those of a fund investing in a
broader range of securities.

WRITING OPTIONS: The GROWTH 20 FUND and the SMALL CAP VALUE FUND write put and
call options. The funds will receive fees for writing options but are exposed
to losses due to an adverse change in the value of the underlying asset that
the option was written against. Transactions involving written options may
include elements of leverage and could magnify a fund's losses. Using options
in this manner may reduce a fund's opportunity for investment gain. Each fund
will segregate liquid assets, such as cash, short-term debt, and other liquid
securities, in a segregated account to the extent required to cover the
financial exposure created by the use of these instruments.

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Each of the funds is appropriate for investors who are comfortable with the
risks described here and whose financial goals are five or more years in the
future. The funds are not appropriate for investors concerned primarily with
principal stability.

FUND STRUCTURE

Each of the funds has adopted a multiple class plan. The ENTERPRISE FUND and
the GROWTH 20 FUND offer Investor Class shares and Advisor Class shares. The
SMALL CAP VALUE FUND and the U.S. EMERGING GROWTH FUND offer Investor Class
shares. Only the Investor Class shares of each fund are offered in this
prospectus. The principal differences between each of the classes of shares
are that the Advisor Class shares are subject to a front-end sales load and
distribution fees and expenses under a 12b-1 plan, and each class of shares is
subject to different administrative and transfer agency fees and expenses.
Because 12b-1 fees are paid out of the fund's assets on an on-going basis, over
time these fees will increase the cost of an investment in Advisor Class shares
and may cost more than paying other types of sales charges.

FUND PERFORMANCE
The return information on the following pages illustrates how the performance
of the funds' Investor Class shares can vary, which is one indication of the
risks of investing in the funds. Please keep in mind that the past performance
of a fund's Investor Class shares does not represent how it will perform in the
future. The information assumes that you reinvested all dividends and
distributions.

CALENDAR YEAR TOTAL RETURNS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Year Growth 20 Small Cap Value Enterprise U.S. Emerging Growth
- ---- --------- ------------------------------ ---------- ------------------------------
1998 36.5% 6.1% - -
- ---- --------- ------------------------------ ---------- ------------------------------
1999 109.5% 28.1% 187.8% 98.9%
- ---- --------- ------------------------------ ---------- ------------------------------
</TABLE>

BEST AND WORST QUARTERLY PERFORMANCE
(DURING THE PERIODS SHOWN ABOVE)

<TABLE>
<CAPTION>
<S> <C> <C>
FUND NAME BEST QUARTER RETURN WORST QUARTER RETURN
- --------------------- --------------------- ---------------------
Enterprise 71.3% (4th Q 1999) 17.0% (1st Q 1999)
Growth 20 64.9% (4th Q 1999) -7.9% (3rd Q 1998)
Small Cap Value 25.8% (2nd Q 1999) -24.6% (3rd Q 1998)
U.S. Emerging Growth 53.0% (4th Q 1999) 2.1% (2nd Q 1999)
</TABLE>

AVERAGE ANNUAL TOTAL RETURNS
AS OF 12-31-99
FUND/INDEX 1-YEAR SINCE INCEPTION
ENTERPRISE 187.83% 217.83% (9-30-98)
S&P MidCap 400 Stock Index 14.72% 36.15%
Lipper Mid-Cap Growth Funds Index 73.72% 87.08%
GROWTH 20 109.48% 60.36% (6-30-97)
S&P 500 Stock Index 21.04% 24.25%
Lipper Large-Cap Growth Funds Index 34.82% 32.25%
SMALL CAP VALUE 28.09% 16.58% (12-31-97)
Russell 2000 Index 21.26% 8.71%
Lipper Small-Cap Value Funds Index 1.89% -2.51%
U.S. EMERGING GROWTH 98.86% 98.86% (12-31-98)
Russell 2000 Index 21.26% 21.26%
Lipper Small-Cap Growth Funds Index 61.17% 61.17%

THE S&P MIDCAP 400 STOCK INDEX IS AN UNMANAGED INDEX GENERALLY REPRESENTATIVE
OF THE U.S. MARKET FOR MEDIUM CAPITALIZATION STOCKS. THE LIPPER MID-CAP GROWTH
FUNDS INDEX IS AN EQUALLY-WEIGHTED PERFORMANCE INDEX OF THE LARGEST QUALIFYING
FUNDS IN THIS LIPPER CATEGORY. THE S&P 500 STOCK INDEX IS AN UNMANAGED INDEX
GENERALLY REPRESENTATIVE OF THE U.S. STOCK MARKET. THE LIPPER LARGE-CAP GROWTH
FUNDS INDEX IS AN EQUALLY-WEIGHTED PERFORMANCE INDEX OF THE LARGEST QUALIFYING
FUNDS IN THIS LIPPER CATEGORY. THE RUSSELL 2000 INDEX IS AN UNMANAGED INDEX
GENERALLY REPRESENTATIVE OF THE U.S. MARKET FOR SMALL CAPITALIZATION STOCKS.
THE LIPPER SMALL-CAP VALUE FUNDS INDEX IS AN EQUALLY-WEIGHTED PERFORMANCE INDEX
OF THE LARGEST QUALIFYING FUNDS IN THIS LIPPER CATEGORY. THE LIPPER SMALL-CAP
GROWTH FUNDS INDEX IS AN EQUALLY-WEIGHTED PERFORMANCE INDEX OF THE LARGEST
QUALIFYING FUNDS IN THIS LIPPER CATEGORY.

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Recent returns of the ENTERPRISE FUND, the GROWTH 20 FUND, and the U.S.
EMERGING GROWTH FUND were primarily achieved during favorable conditions in the
market, particularly for technology companies. You should not expect that such
favorable returns can be consistently achieved.

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WHAT ARE THE FUNDS' FEES AND EXPENSES?

This section describes the fees and expenses that you may pay if you buy and
hold shares of the funds.

SHAREHOLDER FEES
(fees paid directly from your investment)
The Investor Class shares of each fund are 100% no-load, so you pay no sales
charges (loads) to buy or sell shares.

ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from fund assets)
The costs of operating the funds are deducted from the funds' assets, which
means you pay them indirectly. These costs are deducted before computing the
daily share price or making distributions. As a result, they don't appear on
your account statement, but instead reduce the total return you receive from
your fund investment.

ANNUAL FUND OPERATING EXPENSES (AS A PERCENT OF AVERAGE NET ASSETS)

<TABLE>
<CAPTION>
<S> <C> <C> <C>
MANAGEMENT OTHER TOTAL ANNUAL FUND
FUND FEES EXPENSES OPERATING EXPENSES
- -------------------- --------------- --------------- ------------------
Enterprise 0.75% 0.63% 1.38%
Growth 20 0.75% 0.61% 1.36%
Small Cap Value 0.75% 0.91% 1.66%
U.S. Emerging Growth 0.75% 1.12% 1.87%*
</TABLE>

*TOTAL ANNUAL FUND OPERATING EXPENSES DO NOT REFLECT OUR WAIVER OF MANAGEMENT
FEES AND/OR ABSORPTIONS. WITH WAIVERS AND/OR ABSORPTIONS, THE TOTAL ANNUAL
FUND OPERATING EXPENSES FOR THE U.S. EMERGING GROWTH FUND WERE 1.78%. WE CAN
TERMINATE WAIVERS AND ABSORPTIONS FOR THIS FUND AT ANY TIME.

EXAMPLE: This example is intended to help you compare the cost of investing in
the funds, before any waivers and absorptions, with the cost of investing in
other mutual funds. The example assumes that you invest $10,000 in the funds
and reinvest all dividends and distributions for the time periods indicated,
and then redeem all of your shares at the end of those periods. The example
also assumes that your investment has a 5% return each year and that the funds'
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions, your costs would be:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------- ------------- ------------- ------- -------------
Enterprise $140 $437 $755 $1,657
Growth 20 $138 $431 $745 $1,635
Small Cap Value $169 $523 $902 $1,965
U.S. Emerging Growth $190 $588 $1,011 $2,190
</TABLE>

WHO ARE THE FUNDS' INVESTMENT ADVISOR AND PORTFOLIO MANAGERS?

Strong Capital Management, Inc. (Strong) is the investment advisor for the
funds. Strong provides investment management services for mutual funds and
other investment portfolios representing assets, as of March 31, 2000, of over
$45 billion. Strong began conducting business in 1974. Since then, its
principal business has been providing investment advice for individuals and
institutional accounts, such as pension and profit-sharing plans, as well as
mutual funds, several of which are available through variable insurance
products. Strong's address is P.O. Box 2936, Milwaukee, WI 53201.

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SUBADVISOR FOR U.S. EMERGING GROWTH FUND. Next Century Growth Investors, LLC
(Subadvisor) is the subadvisor for the U.S. EMERGING GROWTH FUND under an
agreement with Strong. Under this agreement and under the supervision of the
fund's Board of Directors and Strong, the Subadvisor provides a continuous
investment program for the fund. This means the Subadvisor selects the
securities the fund buys and sells. The Subadvisor began conducting business
in December 1998 and had over $148 million under management as of March 31,
2000. It provides investment supervision to institutional investors and high
net worth clients. Its address is 5500 Wayzata Boulevard, Suite 975,
Minneapolis, MN 55416.

DONALD M. LONGLET co-manages the U.S. EMERGING GROWTH FUND. He has over 30
years of investment experience and is a Chartered Financial Analyst. He has
co-managed the U.S. EMERGING GROWTH FUND since its inception in December 1998.
Mr. Longlet has been President of the Subadvisor and a portfolio manager since
December 1998. For nine years prior to that, Mr. Longlet was employed by Jundt
Associates, Inc. as a portfolio manager. He served as co-portfolio manager,
Vice President and Treasurer of the Jundt Growth Fund from September 1991 to
December 1998 and of Jundt Funds, Inc. from January 1996 to December 1998.
From 1983 until 1989, Mr. Longlet was a portfolio manager for AMEV Advisers,
Inc. (now, Fortis Advisers, Inc.) Mr. Longlet began his investment career in
1968 with Northwestern National Bank of Minneapolis (now known as Norwest Bank
Minnesota, National Association), where he served as a security analyst and
portfolio manager until 1982. Mr. Longlet received his bachelors degree in
Philosophy from the University of Minnesota in 1967.

RONALD C. OGNAR manages the GROWTH 20 FUND. He has over 30 years of investment
experience and is a Chartered Financial Analyst. He joined Strong as a
portfolio manager in April 1993 and has managed the GROWTH 20 FUND since its
inception in June 1997. For two years prior to joining Strong, he was a
principal and portfolio manager with RCM Capital Management. For approximately
three years prior to that, he was a portfolio manager at Kemper Financial
Services. Mr. Ognar began his investment career in 1968 at LaSalle National
Bank after serving two years in the U.S. Army. He received his bachelors degree
in Accounting from the University of Illinois in 1968.

THOMAS L. PRESS co-manages the U.S. EMERGING GROWTH FUND. He has over ten
years of investment experience and is a Chartered Financial Analyst. He has
co-managed the U.S. EMERGING GROWTH FUND since its inception in December 1998.
Mr. Press has been Chairman and Chief Executive Officer of the Subadvisor and a
portfolio manager since December 1998. For five years prior to that, Mr. Press
was employed by Jundt Associates, Inc. as a portfolio manager. He served as
co-portfolio manager of the Jundt Growth Fund from July 1993 to December 1998
and co-portfolio manager of the Jundt Funds, Inc. from January 1996 to December
1998. Mr. Press was a Senior Vice President of Investment Advisers, Inc. and
co-manager of the IAI Emerging Growth Fund from 1992 until 1993. From 1987 to
1992, Mr. Press was a Vice President of Institutional Sales at Morgan Stanley &
Company, Inc. Prior to that, Mr. Press was an institutional salesman and
trader at Salomon Brothers Inc. Mr. Press received his bachelors degree in
Business Administration from the University of Minnesota in 1979 and his
Masters of Business Administration in Marketing from the University of St.
Thomas in 1984.

I. CHARLES RINALDI manages the SMALL CAP VALUE FUND. He has over 25 years of
investment experience. He joined Strong as a portfolio manager in November
1997 and has managed the fund since its inception in December 1997. Prior to
joining Strong, Mr. Rinaldi was employed by Mutual of America Capital
Management Corporation (MOA) as a Vice President from November 1989 to January
1994 and as a Senior Vice President from January 1994 to November 1997. While
at MOA, Mr. Rinaldi managed the equity portion of a balanced fund and managed
the value and growth portfolios of an aggressive equity fund. Prior to joining
MOA, he was employed by Glickenhaus & Co. Mr. Rinaldi received his bachelors
degree in Biology from St. Michael's College in 1965 and his Masters of
Business Administration in Finance from Babson College in 1970.

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<PAGE>

OTHER IMPORTANT INFORMATION YOU SHOULD KNOW

To a limited extent, a fund may participate in the initial public offering
(IPO) market. IPOs may significantly increase a fund's total returns during
any period that the fund has a small asset base. As a fund's assets grow, any
impact of IPO investments on a fund's total return may decline.

FINANCIAL HIGHLIGHTS

This information describes investment performance of the Investor Class shares
of the funds for the periods shown. Certain information reflects financial
results for a single Investor Class share. "Total Return" shows how much an
investment in the Investor Class shares of the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been audited by PricewaterhouseCoopers LLP,
whose report, along with the fund's financial statements, is included in the
fund's annual report.

STRONG ENTERPRISE FUND - INVESTOR CLASS
Dec. 31, Dec. 31,
SELECTED PER-SHARE DATA(a) 1999 1998(b)
Net Asset Value, Beginning of Period $14.74 $10.00
Income From Investment Operations:
Net Investment Loss (0.09) (0.01)
Net Realized and Unrealized Gains on Investments 27.43 4.75
Total from Investment Operations 27.34 4.74
Less Distributions:
From Net Investment Income - -
From Net Realized Gains (0.84) (0.00)(c)
Total Distributions (0.84) (0.00)(c)
Net Asset Value, End of Period $41.24 $14.74
RATIOS AND SUPPLEMENTAL DATA
Total Return +187.8% +47.4%
Net Assets, End of Period (In Millions) $571 $11
Ratio of Expenses to Average Net Assets 1.4% 2.0%*
Ratio of Net Investment Loss to Average Net Assets (1.0%) (0.9%)*
Portfolio Turnover Rate 178.1% 95.7%

* 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 period from September 30, 1998 (inception) to December 31,
1998.
(c) Amount calculated is less than $0.01.

STRONG GROWTH 20 FUND - INVESTOR CLASS
Dec. 31, Dec. 31, Dec. 31,
SELECTED PER-SHARE DATA(a) 1999 1998 1997(b)
Net Asset Value, Beginning of Period $15.44 $11.31 $10.00
Income From Investment Operations:
Net Investment Loss (0.08) (0.08) (0.01)
Net Realized and Unrealized Gains
on Investments 16.60 4.21 1.40
Total from Investment Operations 16.52 4.13 1.39
Less Distributions:
In Excess of Net Investment Income - (0.00)(c) (0.08)
From Net Realized Gains (1.33) - -
Total Distributions (1.33) (0.00)(c) (0.08)
Net Asset Value, End of Period $30.63 $15.44 $11.31
RATIOS AND SUPPLEMENTAL DATA
Total Return +109.5% +36.5% +13.9%
Net Assets, End of Period (In Millions) $466 $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 432.3% 541.2% 250.1%

* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the
fund outstanding for the entire period.
(b) For the period from June 30, 1997 (inception) to December 31, 1997.
(c) Amount calculated is less than $0.01.

STRONG SMALL CAP VALUE FUND - INVESTOR CLASS
Dec. 31, Dec. 31,
SELECTED PER-SHARE DATA(a) 1999 1998
Net Asset Value, Beginning of Period $10.61 $10.00
Income From Investment Operations:
Net Investment Loss (0.08) (0.07)
Net Realized and Unrealized Gains on Investments 3.06 0.68
Total from Investment Operations 2.98 0.61
Less Distributions:
From Net Realized Gains - -
Total Distributions - -
Net Asset Value, End of Period $13.59 $10.61
RATIOS AND SUPPLEMENTAL DATA
Total Return +28.1% +6.1%
Net Assets, End of Period (In Millions) $45 $24
Ratio of Expenses to Average Net Assets 1.7% 1.9%
Ratio of Net Investment Loss to Average Net Assets (1.0%) (1.0%)
Portfolio Turnover Rate 95.5% 121.5%

(a) Information presented relates to a share of capital stock of the
fund outstanding for the entire period.

STRONG U.S. EMERGING GROWTH FUND - INVESTOR CLASS
Dec. 31,
SELECTED PER-SHARE DATA(a) 1999
Net Asset Value, Beginning of Period $10.00
Income From Investment Operations:
Net Investment Loss (0.11)
Net Realized and Unrealized Gains on Investments 9.99
Total from Investment Operations 9.88
Less Distributions:
From Net Realized Gains (0.29)
Total Distributions (0.29)
Net Asset Value, End of Period $19.59
RATIOS AND SUPPLEMENTAL DATA
Total Return +98.9%
Net Assets, End of Period (In Millions) $36
Ratio of Expenses to Average Net Assets without
Waivers and Absorptions 1.9%
Ratio of Expenses to Average Net Assets 1.8%
Ratio of Net Investment Loss to Average Net Assets (1.5%)
Portfolio Turnover Rate 281.1%

(a) Information presented relates to a share of capital stock of the
fund outstanding for the entire period.

YOUR ACCOUNT

SHARE PRICE

Your transaction price for buying, selling, or exchanging shares of the funds
or specific classes of the funds is the net asset value per share (NAV) for
that fund or class of shares. NAV is generally calculated as of the close of
trading on the New York Stock Exchange (usually 3:00 p.m. Central Time) every
day the NYSE is open. If the NYSE closes at any other time, or if an emergency
exists, NAV may be calculated at a different time. Your share price will be
the next NAV calculated after we accept your order.

NAV is based on the market value of the securities in a fund's portfolio. If
market prices are not available, NAV is based on a security's fair value as
determined in good faith by us under the supervision of the Board of Directors
of the Strong Funds.

((Side Box))
<TABLE>
<CAPTION>
<S> <C>
We determine the share price or NAV of a fund or class by
dividing net assets attributable to the fund or class (the
value of the investments, cash, and other assets attributable
to the fund or class minus the liabilities attributable to the
fund or class) by the number of fund or class shares
outstanding.
- --------------------------------------------------------------
</TABLE>

FOREIGN SECURITIES

Some of the fund's portfolio securities may be listed on foreign exchanges that
trade on days when we do not calculate an NAV. As a result, the fund's NAV may
change on days when you will not be able to purchase or redeem shares. In
addition, a foreign exchange may not value its listed securities at the same
time that we calculate a fund's NAV. Events affecting the values of portfolio
securities that occur between the time a foreign exchange assigns a price to
the portfolio securities and the time when we calculate a fund's NAV generally
will not be reflected in the fund's NAV. These events will be reflected in the
fund's NAV when we, under the supervision of the Board of Directors of the
Strong Funds, determine that they would have a material effect on the fund's
NAV.

9
<PAGE>

BUYING SHARES

INVESTMENT MINIMUMS: When buying shares, you must meet the following investment
minimum requirements.

<TABLE>
<CAPTION>
<S> <C> <C>
INITIAL INVESTMENT MINIMUM ADDITIONAL INVESTMENT MINIMUM
- --------------------------------------- --------------------------------- ---------------------------------
Regular accounts $2,500 $50
- --------------------------------------- --------------------------------- ---------------------------------
Education IRA accounts $500 $50
- --------------------------------------- --------------------------------- ---------------------------------
Other IRAs and UGMA/UTMA $250 $50
accounts
- --------------------------------------- --------------------------------- ---------------------------------
SIMPLE IRA, SEP-IRA, 403(b)(7), the lesser of $250 or $25 per $50
Keogh, Pension Plan, and Profit Sharing month
Plan accounts
- --------------------------------------- --------------------------------- ---------------------------------
</TABLE>

PLEASE REMEMBER ...
- - If you use an Automatic Investment Plan, we waive the initial investment
minimum to open an account and the additional investment minimum is $50.

- - You cannot use an Automatic Investment Plan with an Education IRA.

- - If you open a qualified retirement plan account where we or one of our
alliance partners provides administrative services, there is no initial
investment minimum.

MULTIPLE CLASS PLAN

Each fund has adopted a multiple class plan which currently permits the
ENTERPRISE FUND and the GROWTH 20 FUND to offer Investor Class shares and
Advisor Class shares, and the SMALL CAP VALUE FUND and the U.S. EMERGING GROWTH
FUND to offer Investor Class shares. Each class is offered at its net asset
value and is subject to fees and expenses which may differ between classes.
The principal differences between each of the classes of shares are that the
Advisor Class shares are subject to a front-end sales load and distribution
fees and expenses under a 12b-1 plan, and each class of shares is subject to
different administrative and transfer agency fees and expenses.

BUYING INSTRUCTIONS
You can buy shares in several ways.

MAIL

You can open or add to an account by mail with a check made payable to Strong.
Send it to the address listed on the back of this prospectus, along with your
account application (for a new account) or an Additional Investment Form (for
an existing account).

EXCHANGE OPTION
Sign up for the exchange option when you open your account. To add this
option to an existing account, visit the Investor Services area at
WWW.ESTRONG.COM or call 800-368-3863 for a Shareholder Account Options Form.

((Side Box))
QUESTIONS?
Call 800-368-3863
24 hours a day
7 days a week

9
<PAGE>

EXPRESS PURCHASESM
You can make additional investments to your existing account directly from
your bank account. If you didn't establish this option when you opened your
account, visit the Investor Services area at WWW.ESTRONG.COM or call us at
800-368-3863 for a Shareholder Account Options Form.

STRONG DIRECT(R)
You can use Strong Direct(R) to add to your investment from your bank account
or to exchange shares between Strong Funds by calling 800-368-7550. See
"Services for Investors" for more information.

STRONG NETDIRECT(R)
You can use Strong netDirect(R) at WWW.ESTRONG.COM, to add to your investment
from your bank account or to exchange shares between Strong Funds. See
"Services for Investors" for more information.

INVESTOR CENTERS

You can visit our Investor Center in Menomonee Falls, Wisconsin, near
Milwaukee. Call 800-368-3863 for hours and directions, or for the location of
our other Investor Centers.

WIRE
Call 800-368-3863 for instructions before wiring funds either to open or add
to an account. This helps to ensure that your account will be credited
promptly and correctly.

AUTOMATIC INVESTMENT SERVICES
See "Services for Investors" for detailed information on all of our automatic
investment services. You can sign up for these plans when you open your
account or you can add them later by visiting the Investor Services area at
WWW.ESTRONG.COM or by calling 800-368-3863 for the appropriate form.

BROKER-DEALER
You may purchase shares through a broker-dealer or other intermediary who may
charge you a fee. Broker-dealers, including each fund's distributor, and other
intermediaries may also from time to time sponsor or participate in promotional
programs pursuant to which investors receive incentives for establishing with
the broker-dealer or intermediary an account and/or for purchasing shares of
the Strong Funds through the account(s). Investors should contact the
broker-dealer or intermediary and consult the Statement of Additional
Information for more information about promotional programs.

PLEASE REMEMBER . . .

We only accept checks payable to Strong.

- - We do not accept cash, third-party checks, credit card convenience checks, or
checks drawn on banks outside the U.S.

- - You will be charged $20 for every check, wire, or Electronic Funds Transfer
returned unpaid.

SELLING SHARES

You can access the money in your account by selling (also called redeeming)
some or all of your shares by one of the methods below. After your redemption
request is accepted, we normally send you the proceeds on the next business
day.

10
<PAGE>

SELLING INSTRUCTIONS
You can sell shares in several ways.

MAIL
Write a letter of instruction. It should specify your account number, the
dollar amount or number of shares you wish to redeem, the names and signatures
of the owners (or other authorized persons), and your mailing address. Then,
mail it to the address listed on the back of this prospectus.

REDEMPTION OPTION
Sign up for the redemption option when you open your account or add it later
by visiting the Investor Services area at WWW.ESTRONG.COM or by calling
800-368-3863 to request a Shareholder Account Options Form. With this option,
you may sell shares by phone or via the Internet and receive the proceeds in
one of three ways:

(1) We can mail a check to your account's address. Checks will not be
forwarded by the Postal Service, so please notify us if your address has
changed.

(2) We can transmit the proceeds by Electronic Funds Transfer to a
properly pre-authorized bank account. The proceeds usually will arrive at
your bank two banking days after we process your redemption.

(3) For a $10 fee, we can transmit the proceeds by wire to a properly
pre-authorized bank account. The proceeds usually will arrive at your bank the
first banking day after we process your redemption.

STRONG DIRECT(R)
You can redeem shares through Strong Direct(R) at 800-368-7550. See "Services
for Investors" for more information.

STRONG NETDIRECT(R)
You can use Strong netDirect(R) at WWW.ESTRONG.COM, to redeem shares. See
"Services for Investors" for more information.

INVESTOR CENTERS
You can visit our Investor Center in Menomonee Falls, Wisconsin, near
Milwaukee. Call 800-368-3863 for hours and directions, or for the location of
our other Investor Centers.

AUTOMATIC INVESTMENT SERVICES

You can set up automatic withdrawals from your account at regular intervals.
See "Services for Investors" for detailed information on all of our automatic
investment services. You can sign up for these plans when you open your
account, or you can add them later by visiting the Investor Services area at
WWW.ESTRONG.COM or by calling 800-368-3863 for the appropriate form.

BROKER-DEALER
You may sell shares through a broker-dealer or other intermediary who may
charge you a fee.

PLEASE REMEMBER ...
- - If you recently purchased shares, a redemption request on those shares
generally will not be honored until 10 days after we receive the purchase
check or electronic transaction.

- - Some transactions and requests require a signature guarantee.

- - If you are selling shares you hold in certificate form, you must submit the
certificates with your redemption request. Each registered owner must sign
the certificates and all signatures must be guaranteed.

12
<PAGE>

- - With an IRA (or other retirement account), you will be charged (1) a $10
annual account maintenance fee for each account up to a maximum of $30 and
(2) a $50 fee for transferring assets to another custodian or for closing an
account.

- - If you sell shares out of a non-IRA retirement account and you are eligible
to roll the sale proceeds into another retirement plan, we will withhold for
federal income tax purposes a portion of the sale proceeds unless you
transfer all of the proceeds to an eligible retirement plan.

((Side Box))

There may be special distribution requirements that apply to retirement
accounts. For instructions on:

- - Roth and Traditional IRA accounts, call
800-368-3863, and
- - SIMPLE IRA, SEP-IRA , 403(b)(7), Keogh, Pension Plan, Profit Sharing Plan, or
401(k) Plan accounts, call 800-368-2882.

((Side Box))
<TABLE>
<CAPTION>
<S> <C>
SIGNATURE GUARANTEES help ensure that major
transactions or changes to your account are in fact
authorized by you. For example, we require a
signature guarantee on written redemption requests
for more than $50,000. You can obtain a signature
guarantee for a nominal fee from most banks,
brokerage firms, and other financial institutions. A
notary public stamp or seal cannot be substituted
for a signature guarantee.
- -----------------------------------------------------
</TABLE>

ADDITIONAL POLICIES

TELEPHONE AND INTERNET TRANSACTIONS

We use reasonable procedures to confirm that telephone and Internet transaction
requests are genuine. We may be responsible if we do not follow these
procedures. You are responsible for losses resulting from fraudulent or
unauthorized instructions received over the telephone or by computer, provided
we reasonably believe the instructions were genuine. To safeguard your account,
please keep your Strong Direct(R) and Strong netDirect(R) passwords
confidential. Contact us immediately if you believe there is a discrepancy
between a transaction you performed and the confirmation statement you
received, or if you believe someone has obtained unauthorized access to your
account or password.

During times of unusual market activity, our phones may be busy and you may
experience a delay placing a telephone request. During these times, consider
trying Strong Direct(R), our 24-hour automated telephone system, by calling
800-368-7550, or Strong netDirect(R), our on-line transaction center, by
visiting WWW.ESTRONG.COM. Please remember that you must have telephone
redemption as an option on your account to redeem shares through Strong
Direct(R) or Strong netDirect(R).

INVESTING THROUGH A THIRD PARTY
If you invest through a third party (rather than directly with Strong), the
policies and fees may be different than described in this prospectus. Banks,
brokers, 401(k) plans, financial advisors, and financial supermarkets may
charge transaction fees and may set different minimum investments or
limitations on buying or selling shares. Consult a representative of your
plan or financial institution if you are not sure.

13
<PAGE>

PURCHASES IN KIND
You may, if we approve, purchase shares of the fund with securities that are
eligible for purchase by the fund (consistent with the fund's investment
restrictions, policies, and goal) and that have a value that is readily
ascertainable in accordance with the fund's valuation policies.

LOW BALANCE ACCOUNT FEE

Because of the high cost of maintaining small accounts, an annual low balance
account fee of $10 (or the value of the account if the account value is less
than $10) will be charged to all accounts that fail to meet the initial
investment minimum. The fee, which is payable to the transfer agent, will not
apply to (1) any retirement accounts, (2) accounts with an automatic investment
plan (unless regular investments have been discontinued), or (3) shareholders
whose combined Strong Funds assets total $100,000 or more. We may waive the
fee, in our discretion, in the event that a significant market correction
lowers an account balance below the account's initial investment minimum. The
effective date of this policy is September 1, 2000.

VERIFICATION OF ACCOUNT STATEMENTS

You should contact Strong in writing regarding any errors or discrepancies
within 45 days after the date of the statement confirming a transaction. The
statement will be deemed correct if we do not hear from you within those
45 days.

DISTRIBUTIONS

DISTRIBUTION POLICY
The fund generally pays you dividends from net investment income and
distributes any net capital gains that it realizes annually.

REINVESTMENT OF DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS

Your dividends and capital gain distributions will be automatically reinvested
in additional shares, unless you choose otherwise. Your other options are to
receive checks for these payments, have them automatically invested in another
Strong Fund, or have them deposited into your bank account. To change the
current option for payment of dividends and capital gain distributions, please
call 800-368-3863.

TAXES

TAXABLE DISTRIBUTIONS
Any net investment income and net short-term capital gain distributions you
receive are taxable as ordinary dividend income at your income tax rate.
Distributions of net capital gains are generally taxable as long-term capital
gains. This is generally true no matter how long you have owned your shares
and whether you reinvest your distributions or take them in cash. You may
also have to pay taxes when you exchange or sell shares if your shares have
increased in value since you bought them.

((Side Box))
<TABLE>
<CAPTION>
<S> <C>
Generally, if your investment is in a Traditional
IRA or other TAX-DEFERRED ACCOUNT, your
dividends and distributions will not be taxed at the
time they are paid, but instead at the time you
withdraw them from your account.
- ----------------------------------------------------
</TABLE>

RETURN OF CAPITAL
If your fund's (1) income distributions exceed its net investment income and
net short-term capital gains or (2) capital gain distributions exceed its net
capital gains in any year, all or a portion of those distributions may be
treated as a return of capital to you. Although a return of capital is not
taxed, it will reduce the cost basis of your shares.

14
<PAGE>

YEAR-END STATEMENT
To assist you in tax preparation, after the end of each calendar year, we send
you a statement of your fund's ordinary dividends and net capital gain
distributions (Form 1099).

BACKUP WITHHOLDING
By law, we must withhold 31% of your distributions and proceeds if (1) you are
subject to backup withholding or (2) you have not provided us with complete
and correct taxpayer information such as your Social Security Number (SSN) or
Tax Identification Number (TIN).

((Side Box))

Unless your investment is in a tax-deferred
retirement account such as an IRA, YOU MAY WANT
TO AVOID:
- -Investing a large amount in a fund close to the
end of the calendar year. If the fund makes a
capital gain distribution, you may receive some
of your investment back as a taxable
distribution.
- -Selling shares of a mutual fund at a loss and
then investing in the same fund within 30 days
before or after the sale. This is called a wash
sale and you will not be allowed to claim a tax
loss on the transaction.
- -------------------------------------------------
</TABLE>

((Side Box))
<TABLE>
<CAPTION>
<S> <C>
COST BASIS is the amount that you paid for the
shares. When you sell shares, you subtract the cost
basis from the sale proceeds to determine whether
you realized an investment gain or loss. For
example, if you bought a share of a fund at $10 and
you sold it two years later at $11, your cost basis on
the share is $10 and your gain is $1.
- ------------------------------------------------------
</TABLE>

Because everyone's tax situation is unique, you should consult your tax
professional for assistance.

SERVICES FOR INVESTORS

Strong provides you with a variety of services to help you manage your
investment. For more details, call 800-368-3863, 24 hours a day, 7 days a
week. These services include:

STRONG DIRECT (R) AUTOMATED TELEPHONE SYSTEM

15
<PAGE>

exchanges, or redemptions among your existing accounts if you have elected
these services (800-368-7550). Passwords help to protect your account
information.

ESTRONG.COM
Visit us on-line at WWW.ESTRONG.COM to access your fund's performance and
portfolio holding information. In addition to general information about
investing, our web site offers daily performance information, portfolio
manager commentaries, and information on available account options.

STRONG NETDIRECT(R)
If you are a shareholder, you may use Strong netDirect(R) to access your
account information 24 hours a day from your personal computer. Strong
netDirect(R) allows you to view account history, account balances, and recent
dividend activity, as well as to make purchases, exchanges, or redemptions
among your existing accounts if you have elected these services. Encryption
technology and passwords help to protect your account information. You may
register to use Strong netDirect(R) at WWW.ESTRONG.COM.

STRONGMAIL
If you register for StrongMail at WWW.STRONGMAIL.COM, you will receive your
fund's closing price by e-mail each business day. In addition, StrongMail
offers market news and updates throughout the day.

STRONG EXCHANGE OPTION
You may exchange shares of a fund for shares of another Strong Fund, either in
writing, by telephone, or through your personal computer, if the accounts are
identically registered (with the same name, address, and taxpayer
identification number). Please ask us for the appropriate prospectus and read
it before investing in any of the Strong Funds. Remember, an exchange of
shares of one Strong Fund for those of another Strong Fund is considered a
sale and a purchase of shares for tax purposes and may result in a capital
gain or loss. Some Strong Funds that you may want to exchange into may charge
a redemption fee of 0.50% to 1.00% on the sale of shares held for less than
six months. Purchases by exchange are subject to the investment requirements
and other criteria of the fund purchased.

STRONG AUTOMATIC INVESTMENT SERVICES
You may invest or redeem automatically in the following ways, some of which
may be subject to additional restrictions or conditions.

AUTOMATIC INVESTMENT PLAN (AIP)
This plan allows you to make regular, automatic investments from your bank
checking or savings account.

AUTOMATIC EXCHANGE PLAN
This plan allows you to make regular, automatic exchanges from one eligible
Strong Fund to another.

AUTOMATIC DIVIDEND REINVESTMENT
Your dividends and capital gains will be automatically reinvested in
additional shares, unless you choose otherwise. Your other options are to
receive checks for these payments, have them automatically invested in another
Strong Fund, or have them deposited into your bank account.

NO-MINIMUM INVESTMENT PLAN
This plan allows you to invest without meeting the minimum initial investment
requirements if you invest monthly and you participate in the AIP, Automatic
Exchange Plan, or Payroll Direct Deposit Plan.

PAYROLL DIRECT DEPOSIT PLAN
This plan allows you to send all or a portion of your paycheck, social
security check, military allotment, or annuity payment to the Strong Funds of
your choice.

SYSTEMATIC WITHDRAWAL PLAN
This plan allows you to redeem a fixed sum from your account on a regular
basis. Payments may be sent electronically to a bank account or as a check to
you or anyone you properly designate.

15
<PAGE>

STRONG RETIREMENT PLAN SERVICES
We offer a wide variety of retirement plans for individuals and institutions,
including large and small businesses. For information on:

- - INDIVIDUAL RETIREMENT PLANS, including Traditional IRAs and Roth IRAs, call
800-368-3863.

- - QUALIFIED RETIREMENT PLANS, including SIMPLE IRAs, SEP-IRAs, 403(b)(7)s,
Keoghs, Pension Plans, Profit Sharing Plans, and 401(k) Plans, call
800-368-2882.

SOME OF THESE SERVICES MAY BE SUBJECT TO ADDITIONAL RESTRICTIONS OR
CONDITIONS. CALL 800-368-3863 FOR MORE INFORMATION.

RESERVED RIGHTS

We reserve the right to:

- - Refuse, change, discontinue, or temporarily suspend account services,
including purchase, exchange, or telephone and Strong netDirect(R) redemption
privileges, for any reason.

- - Reject any purchase request for any reason including exchanges from other
Strong Funds. Generally, we do this if the purchase or exchange is
disruptive to the efficient management of a fund (due to the timing of the
investment or an investor's history of excessive trading).

- - Change the minimum or maximum investment amounts.

- - Delay sending out redemption proceeds for up to seven days (this generally
only applies to very large redemptions without notice, excessive trading, or
during unusual market conditions).

- - Suspend redemptions or postpone payments when the NYSE is closed for any
reason other than its usual weekend or holiday closings, when trading is
restricted by the SEC, or under any emergency circumstances.

- - Make a redemption-in-kind (a payment in portfolio securities rather than
cash) if the amount you are redeeming is in excess of the lesser of (1)
$250,000 or (2) 1% of the fund's assets. Generally, redemption-in-kind is
used when large redemption requests may cause harm to the fund and its
shareholders.

- - Close any account that does not meet minimum investment requirements. We
will give you notice and 60 days to begin an automatic investment program or
to increase your balance to the required minimum. We may waive the minimum
initial investment at our discretion.

- - Reject any purchase or redemption request that does not contain all required
documentation.

17
<PAGE>

FOR MORE INFORMATION

More information is available upon request at no charge, including:

SHAREHOLDER REPORTS: Additional information is available in the annual and
semi-annual report to shareholders. These reports contain a letter from
management, discuss recent market conditions, economic trends and investment
strategies that significantly affected your investment's performance during the
last fiscal year, and list portfolio holdings.

STATEMENT OF ADDITIONAL INFORMATION (SAI): The SAI contains more details about
investment policies and techniques. A current SAI is on file with the SEC and
is incorporated into this prospectus by reference. This means that the SAI is
legally considered a part of this prospectus even though it is not physically
contained within this prospectus.

To request information or to ask questions:

BY TELEPHONE FOR HEARING-IMPAIRED (TDD)
414-359-1400 or 800-368-3863 800-999-2780

BY MAIL BY OVERNIGHT DELIVERY
Strong Funds Strong Funds
P.O. Box 2936 900 Heritage Reserve
Milwaukee, WI 53201-2936 Menomonee Falls, WI 53051

ON THE INTERNET BY E-MAIL
View on-line or download documents: [email protected]
Strong Funds: WWW.ESTRONG.COM
SEC*: www.sec.gov

To reduce the volume of mail you receive, only one copy of financial reports,
prospectuses, and other regulatory materials is mailed to your household. You
can call us at 800-368-3863, or write to us at the address listed above, to
request (1) additional copies free of charge, or (2) that we discontinue our
practice of householding regulatory materials.

This prospectus is not an offer to sell securities in places other than the
United States and its territories.

*INFORMATION ABOUT A FUND (INCLUDING THE SAI) CAN ALSO BE REVIEWED AND COPIED
AT THE SECURITIES AND EXCHANGE COMMISSION'S PUBLIC REFERENCE ROOM IN
WASHINGTON, D.C. YOU MAY CALL THE COMMISSION AT 202-942-8090 FOR INFORMATION
ABOUT THE OPERATION OF THE PUBLIC REFERENCE ROOM. REPORTS AND OTHER
INFORMATION ABOUT A FUND ARE ALSO AVAILABLE FROM THE EDGAR DATABASE ON THE
COMMISSION'S INTERNET SITE AT WWW.SEC.GOV. YOU MAY OBTAIN A COPY OF THIS
INFORMATION, AFTER PAYING A DUPLICATING FEE, BY SENDING A WRITTEN REQUEST TO
THE COMMISSION'S PUBLIC REFERENCE SECTION, WASHINGTON, D.C. 20549-0102, OR BY
SENDING AN ELECTRONIC REQUEST TO THE FOLLOWING E-MAIL ADDRESS:
[email protected].

Strong Enterprise Fund, a series of Strong Equity Funds, Inc., SEC file number:
811-8100
Strong Growth 20 Fund, a series of Strong Equity Funds, Inc., SEC file number:
811-8100
Strong Small Cap Value Fund, a series of Strong Equity Funds, Inc., SEC file
number: 811-8100
Strong U.S. Emerging Growth Fund, a series of Strong Equity Funds, Inc., SEC
file number: 811-8100

18
<PAGE>

[Strong logo and picture of man and two children fishing]

prospectus
THE STRONG GROWTH FUNDS
investor class

May 1, 2000

The Strong Common Stock Fund

The Strong Discovery Fund

The Strong Growth Fund

The Strong Mid Cap Disciplined Fund

The Strong Mid Cap Growth Fund

The Strong Opportunity Fund

The Strong Strategic Growth Fund

1
<PAGE>

TABLE OF CONTENTS
Your Investment.................................................................
KEY INFORMATION.................................................................
What are the funds' goals?.....................................................1
What are the funds' principal investment strategies?...........................1
What are the main risks of investing in the funds?.............................5
What are the funds' fees and expenses?........................................10
Who are the funds' investment advisor and portfolio managers?.................11
OTHER IMPORTANT INFORMATION YOU SHOULD KNOW...................................14
Financial Highlights..........................................................14
Your Account....................................................................
Share Price...................................................................22
Buying Shares.................................................................23
Selling Shares................................................................26
Additional Policies...........................................................28
Distributions.................................................................30
Taxes.........................................................................30
Services For Investors........................................................31
Reserved Rights...............................................................34
For More Information..................................................Back Cover

IN THIS PROSPECTUS, "WE" REFERS TO STRONG CAPITAL MANAGEMENT, INC., THE
INVESTMENT ADVISOR, ADMINISTRATOR, AND TRANSFER AGENT FOR THE STRONG FUNDS.

2
<PAGE>

YOUR INVESTMENT

KEY INFORMATION

WHAT ARE THE FUNDS' GOALS?

Each fund seeks capital growth.

WHAT ARE THE FUNDS' PRINCIPAL INVESTMENT STRATEGIES?

The COMMON STOCK FUND invests at least 65% of its assets in stocks of small-
and medium-capitalization companies that the fund's manager believes are
underpriced, yet have attractive growth prospects. He bases his analysis on a
company's "private market value"-the price an investor would be willing to pay
for the entire company given its management, financial health, and growth
potential. The manager determines a company's private market value based on a
fundamental analysis of a company's cash flows, asset valuations, competitive
situation, and franchise value. To a limited extent, the fund may also invest
in foreign securities. The manager may sell a stock when its price no longer
compares favorably with the company's private market value.

The DISCOVERY FUND invests in securities that its managers believe offer
attractive opportunities for growth. The fund usually invests in a diversified
portfolio of common stocks from small-, medium-, and large-capitalization
companies. These are chosen through a combination of in-depth fundamental
analysis of a company's financial reports and direct, on-site research during
company visits. When the managers believe market conditions favor fixed-income
investments, they have the flexibility to invest a significant portion of the
fund's assets in bonds. The fund would primarily invest in intermediate- and
long-term investment grade bonds. To a limited extent, the fund may also invest
in foreign securities. The managers may sell a holding if its growth potential
or fundamental qualities change. The fund's active trading approach may
increase the fund's costs which may reduce the fund's performance. The fund's
active trading approach may also increase the amount of capital gains tax that
you pay on the fund's returns.

The GROWTH FUND focuses on stocks of companies that its manager believes have
favorable prospects for accelerating growth of earnings but are selling at
reasonable valuations based on earnings, cash flow, or asset value. The
portfolio can include stocks of any size. The fund writes put and call options.
This means that the fund sells an option to another party to either sell a
stock to (put) or buy a stock from (call) the fund at a predetermined price in
the future. When the fund writes put or call options, it will receive fees or
premiums but is exposed to losses due to changes in the value of the stock that
the put or call is written against. Writing options can serve as a limited or
partial hedge against adverse market movements. This is because declines in
the value of the hedged stock will be offset by the premium received for
writing the option. Whether or not this hedging strategy is successful depends
on a variety of factors, particularly the ability of the fund's manager to
predict movements of the price of the hedged stock. The manager's decision to
engage in this hedging strategy will reflect the manager's judgment that
writing an option on a stock will provide value to the fund and its
shareholders. To a limited extent, the fund may also invest in foreign
securities. The manager may sell a stock when the company's growth prospects
become less attractive. The fund's active trading approach may increase the
fund's costs which may reduce the fund's performance. The fund's active
trading approach may also increase the amount of capital gains tax that you pay
on the fund's returns.

The MID CAP DISCIPLINED FUND invests at least 65% of its assets in stocks of
medium-capitalization companies that the fund's manager believes present
attractive opportunities, but have not been widely recognized by investment
analysts or the financial press. The fund defines "medium-capitalization
companies" as companies with a market capitalization substantially similar to
that of companies in the S&P MidCap 400 Index at the time of investment. To
identify these companies, the manager engages in in-depth, first-hand research.
On-site visits with members of a company's management team are often an
integral part of this process. The goal of the manager's research is to
identify companies that are undervalued or have growth potential that are not
currently reflected in the companies' stock price. To a limited extent, the
fund may also invest in foreign securities. The manager may sell a stock when
changes in its price or growth potential no longer make it an attractive
investment.

3
<PAGE>

The MID CAP GROWTH FUND invests at least 65% of its assets in stocks of
medium-capitalization companies that the fund's managers believe have favorable
prospects for accelerating growth of earnings but are selling at reasonable
valuations based on earnings, cash flow, or asset value. The fund defines
"medium-capitalization companies" as companies with a market capitalization
substantially similar to that of companies in the S&P MidCap 400 Index at the
time of investment. The fund writes put and call options. This means that the
fund sells an option to another party to either sell a stock to (put) or buy a
stock from (call) the fund at a predetermined price in the future. When the
fund writes put or call options, it will receive fees or premiums but is
exposed to losses due to changes in the value of the stock that the put or call
is written against. Writing options can serve as a limited or partial hedge
against adverse market movements. This is because declines in the value of the
hedged stock will be offset by the premium received for writing the option.
Whether or not this hedging strategy is successful depends on a variety of
factors, particularly the ability of the fund's managers to predict movements
of the price of the hedged stock. The managers' decision to engage in this
hedging strategy will reflect the managers' judgment that writing an option on
a stock will provide value to the fund and its shareholders. To a limited
extent, the fund may also invest in foreign securities. The managers may sell a
holding when there is a fundamental change in the outlook for the company or to
take advantage of a better investment opportunity. The fund's active trading
approach may increase the fund's costs which may reduce the fund's performance.
The fund's active trading approach may also increase the amount of capital
gains tax that you pay on the fund's returns.

The OPPORTUNITY FUND invests primarily in stocks of medium-capitalization
companies that the fund's manager believes are underpriced, yet have attractive
growth prospects. He bases his analysis on a company's "private market
value"-the price an investor would be willing to pay for the entire company
given its management, financial health, and growth potential. The manager
determines a company's private market value based on a fundamental analysis of
a company's cash flows, asset valuations, competitive situation, and franchise
value. To a limited extent, the fund may also invest in foreign securities. The
manager may sell a stock when its price no longer compares favorably with the
company's private market value.

The STRATEGIC GROWTH FUND invests primarily in the stocks of medium- and
large-capitalization companies, looking for those that may have long-term
growth potential. Based on fundamental analysis, the fund's manager seeks
stocks of well-managed companies that produce needed or proven products
(products for which there is a significant or growing demand in the
marketplace) and that are market leaders in growing industries. In looking for
well-managed companies, the manager examines many factors such as consistency
of a business plan, foresight of the competitive market conditions, business
knowledge, and management's attention to detail. The portfolio generally holds
50 or fewer stocks. To a limited extent, the fund may also invest in foreign
securities. The manager may sell a holding if its growth prospects diminish or
if better investment opportunities become available.

The managers of each of the funds may invest in cash or cash-type securities
(high-quality, short-term debt securities issued by corporations, financial
institutions, or the U.S. government) as a temporary defensive position to
avoid losses during adverse market conditions. The DISCOVERY FUND, the GROWTH
FUND, and the STRATEGIC GROWTH FUND may do so without limit. The MID CAP GROWTH
FUND may do so with up to 35% of its assets. The OPPORTUNITY FUND and the MID
CAP DISCIPLINED FUND may do so with up to 30% of their assets. The COMMON
STOCK FUND may do so with up to 20% of its assets. Taking a temporary
defensive position could reduce the benefit to these funds if the market goes
up. In this case, the funds may not achieve their investment goals.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUNDS?

GENERAL STOCK RISKS: The major risks of each fund are those of investing in the
stock market. That means the funds may experience sudden, unpredictable
declines in value, as well as periods of poor performance. Because stock values
go up and down, the value of your fund's shares may go up and down. Therefore,
when you sell your investment, you may receive more or less money than you
originally invested.

4
<PAGE>

WRITING OPTIONS: The GROWTH FUND and the MID CAP GROWTH FUND write put and call
options. The funds will receive fees for writing options but are exposed to
losses due to an adverse change in the value of the underlying asset that the
option was written against. Transactions involving written options may include
elements of leverage and could magnify a fund's losses. Using options in this
manner may reduce a fund's opportunity for investment gain. Each fund will
segregate liquid assets, such as cash, short-term debt, and other liquid
securities, in a segregated account to the extent required to cover the
financial exposure created by the use of these instruments.

BOND RISKS: The DISCOVERY FUND maintains the flexibility to invest in bonds.
To the extent it does, the fund is exposed to the risks of bond investing. A
bond's market value is affected significantly by changes in interest
rates-generally, when interest rates rise, the bond's market value declines and
when interest rates decline, its market value rises (interest-rate risk).
Generally, the longer a bond's maturity, the greater the risk and the higher
its yield. Conversely, the shorter a bond's maturity, the lower the risk and
the lower its yield (maturity risk). A bond's value can also be affected by
changes in the bond's credit quality rating or its issuer's financial condition
(credit-quality risk). Because bond values fluctuate, the fund's share price
fluctuates. So, when you sell your investment, you may receive more or less
money than you originally invested.

FUND STRUCTURE

Each of the funds has adopted a multiple class plan. The GROWTH FUND offers
Investor Class shares, Advisor Class shares, and Institutional Class shares.
The OPPORTUNITY FUND offers Investor Class shares and Advisor Class shares.
The COMMON STOCK FUND, the DISCOVERY FUND, the MID CAP DISCIPLINED FUND, the
MID CAP GROWTH FUND, and the STRATEGIC GROWTH FUND offer Investor Class shares.
Only the Investor Class shares of each fund are offered in this prospectus.
The principal differences between each of the classes of shares are that the
Advisor Class shares are subject to a front-end sales load and distribution
fees and expenses under a 12b-1 plan, and each class of shares is subject to
different administrative and transfer agency fees and expenses. Because 12b-1
fees are paid out of the fund's assets on an on-going basis, over time these
fees will increase the cost of an investment in Advisor Class shares and may
cost more than paying other types of sales charges.

FUND PERFORMANCE
The return information on the following pages illustrates how the performance
of the funds' Investor Class shares can vary, which is one indication of the
risks of investing in the funds. Please keep in mind that the past performance
of each fund's Investor Class shares does not represent how it will perform in
the future. The information assumes that you reinvested all dividends and
distributions.

5
<PAGE>

CALENDAR YEAR TOTAL RETURNS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Common Mid Cap Mid Cap Strategic
Year Opportunity Discovery Stock Growth Growth Disciplined Growth
- ---- ------------ ---------- ------ ------- -------- ----------- ---------
1990 -11.3% -2.7% 1.0% - - - -
- ---- ------------ ---------- ------ ------- -------- ----------- ---------
1991 31.7% 67.6% 57.1% - - - -
- ---- ------------ ---------- ------ ------- -------- ----------- ---------
1992 17.4% 1.9% 20.8% - - - -
- ---- ------------ ---------- ------ ------- -------- ----------- ---------
1993 21.2% 22.2% 25.2% - - - -
- ---- ------------ ---------- ------ ------- -------- ----------- ---------
1994 3.2% -5.7% -0.5% 17.3% - - -
- ---- ------------ ---------- ------ ------- -------- ----------- ---------
1995 27.3% 34.8% 32.4% 41.0% - - -
- ---- ------------ ---------- ------ ------- -------- ----------- ---------
1996 18.1% 1.5% 20.5% 19.5% - - -
- ---- ------------ ---------- ------ ------- -------- ----------- ---------
1997 23.4% 10.8% 24.0% 19.1% 13.8% - -
- ---- ------------ ---------- ------ ------- -------- ----------- ---------
1998 15.5% 7.0% 6.6% 27.0% 14.5% - -
- ---- ------------ ---------- ------ ------- -------- ----------- ---------
1999 33.4% 5.3% 40.4% 75.1% 92.0% 35.2% 29.4%
- ---- ------------ ---------- ------ ------- -------- ----------- ---------
</TABLE>

BEST AND WORST QUARTERLY PERFORMANCE
(DURING THE PERIODS SHOWN ABOVE)

<TABLE>
<CAPTION>
<S> <C> <C>
FUND NAME BEST QUARTER RETURN WORST QUARTER RETURN
- -------------------- -------------------- ---------------------
Common Stock 25.3% (4th Q 1999) -16.5% (3rd Q 1998)
Discovery 27.9% (1st Q 1991) -17.4% (3rd Q 1998)
Growth 54.9% (4th Q 1999) -12.7% (3rd Q 1998)
Mid Cap Disciplined 18.4% (4th Q 1999) -11.3% (3rd Q 1999)
Mid Cap Growth 47.3% (4th Q 1999) -18.2% (3rd Q 1998)
Opportunity 17.5% (4th Q 1998) -14.1% (3rd Q 1998)
Strategic Growth 24.7% (4th Q 1998) -9.8% (3rd Q 1998)
</TABLE>

AVERAGE ANNUAL TOTAL RETURNS
AS OF 12-31-99
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FUND/INDEX 1-YEAR 5-YEAR 10-YEAR SINCE INCEPTION
COMMON STOCK 40.35% 24.24% 21.59% 21.59% (12-29-89)
Russell 2000 Index 21.26% 16.69% 13.40% 13.40%
Lipper Mid-Cap Value Funds Index 11.94% 14.88% 11.79% 11.79%
DISCOVERY 5.28% 11.32% 12.59% 14.45% (12-31-87)
Russell 2000 Index 21.26% 16.69% 13.40% 14.56%
Lipper Mid-Cap Value Funds Index 11.94% 14.88% 11.79% 13.50%
GROWTH 75.06% 34.86% - 31.75% (12-31-93)
S&P 500 Stock Index 21.04% 28.56% - 23.55%
Lipper Multi-Cap Growth
Funds Index 46.35% 28.76% - 22.86%
MID CAP DISCIPLINED 35.20% - - 35.20% (12-31-98)
S&P MidCap 400 Stock Index 14.72% - - 14.72%
Lipper Mid-Cap Value Funds Index 11.94% - - 11.94%
MID CAP GROWTH 92.02% - - 35.78% (12-31-96)
S&P MidCap 400 Stock Index 14.72% - - 21.81%
Lipper Mid-Cap Growth Funds Index 73.72% - - 29.69%
OPPORTUNITY 33.39% 23.38% 17.23% 19.49% (12-31-85)
S&P MidCap 400 Stock Index 14.72% 23.05% 17.32% 17.19%
Lipper Multi-Cap Value Funds Index 5.94% 17.82% 13.03% 13.62%

STRATEGIC GROWTH 29.36% - - 28.42% (6-30-98)

S&P 500 Stock Index 21.04% - - 20.46%
Lipper Mid-Cap Core Funds Index 28.19% - - 17.48%
</TABLE>
6
<PAGE>

THE RUSSELL 2000 INDEX IS AN UNMANAGED INDEX GENERALLY REPRESENTATIVE OF THE
U.S. MARKET FOR SMALL CAPITALIZATION STOCKS. THE LIPPER MID-CAP VALUE FUNDS
INDEX IS AN EQUALLY-WEIGHTED PERFORMANCE INDEX OF THE LARGEST QUALIFYING FUNDS
IN THIS LIPPER CATEGORY. THE S&P 500 STOCK INDEX IS AN UNMANAGED INDEX
GENERALLY REPRESENTATIVE OF THE U.S. STOCK MARKET. THE LIPPER MULTI-CAP GROWTH
FUNDS INDEX IS AN EQUALLY-WEIGHTED PERFORMANCE INDEX OF THE LARGEST QUALIFYING
FUNDS IN THIS LIPPER CATEGORY. THE S&P MIDCAP 400 STOCK INDEX IS AN UNMANAGED
INDEX GENERALLY REPRESENTATIVE OF THE U.S. MARKET FOR MEDIUM CAPITALIZATION
STOCKS. THE LIPPER MID-CAP GROWTH FUNDS INDEX IS AN EQUALLY-WEIGHTED
PERFORMANCE INDEX OF THE LARGEST QUALIFYING FUNDS IN THIS LIPPER CATEGORY. THE
LIPPER MULTI-CAP VALUE FUNDS INDEX IS AN EQUALLY-WEIGHTED PERFORMANCE INDEX OF
THE LARGEST QUALIFYING FUNDS IN THIS LIPPER CATEGORY. THE LIPPER MID-CAP CORE
FUNDS INDEX IS AN EQUALLY-WEIGHTED PERFORMANCE INDEX OF THE LARGEST QUALIFYING
FUNDS IN THIS LIPPER CATEGORY.

Recent returns for the GROWTH FUND and the MID CAP GROWTH FUND were primarily
achieved during favorable conditions in the market, particularly for technology
companies. The MID CAP DISCIPLINED FUND and the STRATEGIC GROWTH FUND achieved
short-term performance through investments in initial public offerings. You
should not expect that such favorable returns can be consistently achieved.

WHAT ARE THE FUNDS' FEES AND EXPENSES?

This section describes the fees and expenses that you may pay if you buy and
hold shares of the funds.

SHAREHOLDER FEES
(fees paid directly from your investment)
The Investor Class shares of each fund are 100% no-load, so you pay no sales
charges (loads) to buy or sell shares.

ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from fund assets)
The costs of operating the funds are deducted from fund assets, which means you
pay them indirectly. These costs are deducted before computing the daily share
price or making distributions. As a result, they don't appear on your account
statement, but instead reduce the total return you receive from your fund
investment.

ANNUAL FUND OPERATING EXPENSES (AS A PERCENT OF AVERAGE NET ASSETS)

<TABLE>
<CAPTION>
<S> <C> <C> <C>
MANAGEMENT OTHER TOTAL ANNUAL FUND
FUND FEES EXPENSES OPERATING EXPENSES
- ------------------- --------------- --------------- ------------------
Common Stock 0.75% 0.42% 1.17%
Discovery 0.75% 0.66% 1.41%
Growth 0.75% 0.49% 1.24%
Mid Cap Disciplined 0.75% 1.25% 2.00%
Mid Cap Growth 0.75% 0.81% 1.56%
Opportunity 0.75% 0.44% 1.19%
Strategic Growth 0.75% 1.25% 2.00%
</TABLE>

EXAMPLE: This example is intended to help you compare the cost of investing in
the funds with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the funds and reinvest all dividends and
distributions for the time periods indicated, and then redeem all of your
shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the funds' operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------- ------------- ------------- ------- -------------
Common Stock $119 $372 $644 $1,420
Discovery $144 $446 $771 $1,691
Growth $126 $393 $681 $1,500
Mid Cap Disciplined $203 $627 $1,078 $2,327
Mid Cap Growth $159 $493 $850 $1,856
Opportunity $121 $378 $654 $1,443
Strategic Growth $203 $627 $1,078 $2,327
</TABLE>

6
<PAGE>

WHO ARE THE FUNDS' INVESTMENT ADVISOR AND PORTFOLIO MANAGERS?

The following individuals are the funds' portfolio managers.
DEAN G. DUMONTHIER is the portfolio manager of the MID CAP DISCIPLINED FUND
since March 1999. He has over four years of investment experience. Mr.
DuMonthier joined Strong as an equity research analyst in April 1996. In
January 1999, he began managing equity accounts for Strong. For eight years
prior to joining Strong, Mr. DuMonthier worked at Hewitt Associates as an
investment consultant and as a management consultant. A Chartered Financial
Analyst, Mr. DuMonthier received his bachelors degree in Economics from
Lawrence University in 1988 and a Masters of Management degree from the Kellogg
Graduate School of Management at Northwestern University in 1995.

DEREK V.W. FELSKE co-manages the MID CAP GROWTH FUND. He has over 15 years of
investment experience and is a Chartered Financial Analyst. Mr. Felske joined
Strong as a portfolio manager in January 1999 and has co-managed the MID CAP
GROWTH FUND since February 1999. From July 1996 to January 1999, Mr. Felske
was the chief executive officer of Leawood Capital Management LLC. From
September 1993 to July 1996, Mr. Felske was a vice president and a portfolio
manager at Twentieth Century Companies, Inc. From 1991 to 1993, Mr. Felske was
a member of the portfolio management team at RCM Capital Management. Mr.
Felske received his bachelors degree in Economics from Dartmouth College in
1980 and his Masters of Business Administration in Finance and Accounting from
Wharton Business School in 1991.

RONALD C. OGNAR manages the GROWTH FUND and co-manages the MID CAP GROWTH FUND.
He has over 30 years of investment experience and is a Chartered Financial
Analyst. He joined Strong as a portfolio manager in April 1993 and has managed
the GROWTH FUND since its inception in December 1993 and co-managed the MID CAP
GROWTH FUND since February 1999. For two years prior to joining Strong, he was
a principal and portfolio manager with RCM Capital Management. For
approximately three years prior to that, he was a portfolio manager at Kemper
Financial Services. Mr. Ognar began his investment career in 1968 at LaSalle
National Bank after serving two years in the U.S. Army. He received his
bachelors degree in Accounting from the University of Illinois in 1968.
CHARLES A. PAQUELET co-manages the DISCOVERY FUND. He has over ten years of
investment experience and is a Chartered Financial Analyst. He joined Strong
as a securities analyst in 1989. Since 1990, he has been a portfolio manager of
separate accounts and accounts of institutional investors. Mr. Paquelet has
co-managed the DISCOVERY FUND since August 1996. Prior to joining Strong, he
was a financial analyst for B.F. Goodrich Company in 1987. Mr. Paquelet
received his bachelors degree in Finance from Case Western Reserve University
in 1987 and his Masters of Business Administration in Finance from Indiana
University in 1989.

SCOTT SINDELAR manages the STRATEGIC GROWTH FUND. He has over ten years of
investment experience. Mr. Sindelar joined Strong as a portfolio manager in
April 1998. He has managed the STRATEGIC GROWTH FUND since its inception in
June 1998. From 1986 to March 1998, Mr. Sindelar was employed at Mid-Continent
Capital, LLC as a Vice President and portfolio manager. From 1984 to 1986, he
worked as a Corporate Finance Officer at Northern Trust Company, and from 1980
to 1984, he worked as a Corporate Project Manager at DeKalb AgResearch, Inc.
Mr. Sindelar received his bachelors degree in Management from Indiana
University in 1979 and his Masters of Management degree in Finance from the
Kellogg Graduate School of Management at Northwestern University in 1980.

RICHARD S. STRONG co-manages the DISCOVERY FUND. Mr. Strong founded Strong in
1974 and has over 30 years of investment experience. Mr. Strong has managed or
co-managed the DISCOVERY FUND since its inception in December 1987. He began
his investment career at Employers Insurance of Wausau in 1966. Mr. Strong
received his bachelors degree in History from Baldwin-Wallace College in 1963
and his Masters of Business Administration in Finance from the University of
Wisconsin

8
<PAGE>

Madison in 1966. In addition to his role as a portfolio manager, he is the
Chairman of the Board, Director, Chief Investment Officer, and a member of
Strong's Executive Committee.
RICHARD T. WEISS manages the COMMON STOCK FUND and the OPPORTUNITY FUND. He has
over 25 years of investment experience and has managed the COMMON STOCK FUND
and the OPPORTUNITY FUND since March 1991. Mr. Weiss joined Strong as a
portfolio manager in March 1991 from Stein Roe & Farnham, where he began his
career as a research analyst in 1975. He was named a portfolio manager in 1981.
Mr. Weiss received his bachelors degree in Business Administration from the
University of Southern California in 1973 and his Masters of Business
Administration in Business from Harvard Graduate School of Business
Administration in 1975. In addition, Mr. Weiss is a member of Strong's
Executive Committee.

OTHER IMPORTANT INFORMATION YOU SHOULD KNOW

FINANCIAL HIGHLIGHTS

This information describes investment performance of the Investor Class shares
of the funds for the periods shown. Certain information reflects financial
results for a single Investor Class share. "Total Return" shows how much your
investment in the Investor Class shares of the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been audited by PricewaterhouseCoopers LLP,
whose report, along with the fund's financial statements, is included in the
fund's annual report.

<TABLE>
<CAPTION>
STRONG COMMON STOCK FUND - INVESTOR CLASS
<S> <C> <C> <C> <C> <C>
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
SELECTED PER-SHARE DATA(a) 1999 1998 1997 1996 1995
Net Asset Value, Beginning of Period $21.06 $21.02 $20.24 $19.77 $16.74
Income From Investment Operations:
Net Investment Income (Loss) (0.01) 0.00(b) 0.01 0.06 0.11
Net Realized and Unrealized Gains
on Investments 8.19 1.36 4.67 3.87 5.25
Total from Investment Operations 8.18 1.36 4.68 3.93 5.36
Less Distributions:
From Net Investment Income - - (0.01) (0.06) (0.10)
In Excess of Net Investment Income - - (0.03) (0.05) (0.02)
From Net Realized Gains (4.03) (1.32) (3.86) (3.35) (2.21)
Total Distributions (4.03) (1.32) (3.90) (3.46) (2.33)
Net Asset Value, End of Period $25.21 $21.06 $21.02 $20.24 $19.77
RATIOS AND SUPPLEMENTAL DATA
Total Return +40.4% +6.6% +24.0% +20.5% +32.4%
Net Assets, End of Period (In Millions) $1,733 $1,440 $1,565 $1,244 $1,061
Ratio of Expenses to Average Net Assets 1.2% 1.2% 1.2% 1.2% 1.2%
Ratio of Net Investment Income (Loss)
to Average Net Assets (0.1%) 0.0%(b) 0.0%(b) 0.3% 0.5%
Portfolio Turnover Rate 80.1% 102.6% 117.3% 90.9% 91.5%
</TABLE>
(a) Information presented relates to a share of capital stock of the
fund outstanding for the entire period.
(b) Amount calculated is less than $0.01 or 0.1%.

<TABLE>
<CAPTION>
STRONG DISCOVERY FUND- INVESTOR CLASS
<S> <C> <C> <C> <C> <C>
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
SELECTED PER-SHARE DATA(a) 1999 1998 1997 1996 1995
Net Asset Value, Beginning of Period $17.95 $17.00 $17.45 $18.96 $15.67
Income From Investment Operations:
Net Investment Loss (0.17) (0.07) (0.16) (0.15) (0.05)
Net Realized and Unrealized Gains
on Investments 1.08 1.26 2.00 0.35 5.48
Total from Investment Operations 0.91 1.19 1.84 0.20 5.43
Less Distributions:
In Excess of Net Investment Income - - - (1.12) (0.10)
From Net Realized Gains (0.22) (0.24) (1.90) (0.59) (2.04)
In Excess of Net Realized Gains - - (0.39) - -
Total Distributions (0.22) (0.24) (2.29) (1.71) (2.14)
Net Asset Value, End of Period $18.64 $17.95 $17.00 $17.45 $18.96
RATIOS AND SUPPLEMENTAL DATA
Total Return +5.3% +7.0% +10.9% +1.5% +34.8%
Net Assets, End of Period (In Millions) $187 $322 $383 $514 $599
Ratio of Expenses to Average Net Assets 1.4% 1.3% 1.4% 1.4% 1.4%
Ratio of Net Investment Loss to
Average Net Assets (0.7%) (0.4%) (0.9%) (0.3%) (0.4%)
Portfolio Turnover Rate 214.0% 185.9% 169.9% 792.8% 516.0%
</TABLE>

(a) Information presented relates to a share of capital stock of the
fund outstanding for the entire period.

<TABLE>
<CAPTION>
STRONG GROWTH FUND - INVESTOR CLASS
<S> <C> <C> <C> <C> <C>
Dec.31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
SELECTED PER-SHARE DATA(a) 1999 1998 1997 1996 1995
Net Asset Value, Beginning of Period $23.25 $18.31 $18.50 $15.88 $11.61
Income From Investment Operations:
Net Investment Loss (0.18) (0.13) (0.08) (0.03) (0.04)
Net Realized and Unrealized Gains
on Investments 17.08 5.07 3.41 3.13 4.79
Total from Investment Operations 16.90 4.94 3.33 3.10 4.75
Less Distributions:
In Excess of Net Investment Income - - - (0.02) (0.03)
From Net Realized Gains (4.49) (0.00)(b) (2.70) (0.46) (0.16)
In Excess of Net Realized Gains - - (0.82) - (0.29)
Total Distributions (4.49) (0.00)(b) (3.52) (0.48) (0.48)
Net Asset Value, End of Period $35.66 $23.25 $18.31 $18.50 $15.88
RATIOS AND SUPPLEMENTAL DATA
Total Return +75.1% +27.0% +19.1% +19.5% +41.0%
Net Assets, End of Period (In Millions)$3,354 $1,835 $1,597 $1,308 $643
Ratio of Expenses to Average Net Assets 1.2% 1.3% 1.3% 1.3% 1.4%
Ratio of Net Investment Loss to
Average Net Assets (0.8%) (0.7%) (0.5%) (0.2%) (0.5%)
Portfolio Turnover Rate 324.0% 248.6% 295.7% 294.9% 321.2%
</TABLE>
(a) Information presented relates to a share of capital stock of the
fund outstanding for the entire period.
(b) Amount calculated is less than $0.01.

STRONG MID CAP DISCIPLINED FUND - INVESTOR CLASS
Dec. 31,
SELECTED PER-SHARE DATA(a) 1999
Net Asset Value, Beginning of Period $10.00
Income From Investment Operations:
Net Investment Loss (0.10)
Net Realized and Unrealized Gains on Investments 3.62
Total from Investment Operations 3.52
Less Distributions:
From Net Investment Income -
Total Distributions -
Net Asset Value, End of Period $13.52
RATIOS AND SUPPLEMENTAL DATA
Total Return +35.2%
Net Assets, End of Period (In Millions) $6
Ratio of Expenses to Average Net Assets 2.0%
Ratio of Net Investment Loss to Average Net Assets (0.9%)
Portfolio Turnover Rate 245.7%

(a) Information presented relates to a share of capital stock of the
fund outstanding for the entire period.

STRONG MID CAP GROWTH FUND - INVESTOR CLASS
Dec. 31, Dec. 31, Dec. 31,
SELECTED PER-SHARE DATA(a) 1999 1998 1997
Net Asset Value, Beginning of Period $13.03 $11.38 $10.00
Income From Investment Operations:
Net Investment Loss (0.12) (0.12) (0.09)
Net Realized and Unrealized Gains
on Investments 12.08 1.77 1.47
Total from Investment Operations 11.96 1.65 1.38
Less Distributions:
From Net Realized Gains (1.74) - -
Total Distributions (1.74) - -
Net Asset Value, End of Period $23.25 $13.03 $11.38
RATIOS AND SUPPLEMENTAL DATA
Total Return +92.0% +14.5% +13.9%
Net Assets, End of Period (In Millions) $65 $19 $16
Ratio of Expenses to Average Net Assets 1.6% 1.7% 1.6%
Ratio of Net Investment Loss to Average
Net Assets (1.1%) (0.9%) (0.9%)
Portfolio Turnover Rate 681.0% 206.9% 305.2%

(a) Information presented relates to a share of capital stock of the
fund outstanding for the entire period.

<TABLE>
<CAPTION>
STRONG OPPORTUNITY FUND - INVESTOR CLASS
<S> <C> <C> <C> <C> <C>
Dec. 31, Dec. 31, Dec.31, Dec. 31, Dec. 31,
SELECTED PER-SHARE DATA(a) 1999 1998 1997 1996 1995
Net Asset Value, Beginning of Period $38.62 $37.41 $35.26 $33.35 $27.71
Income From Investment Operations:
Net Investment Income 0.08 0.05 0.10 0.20 0.20
Net Realized and Unrealized Gains
on Investments 12.42 5.68 7.90 5.78 7.28
Total from Investment Operations 12.50 5.73 8.00 5.98 7.48
Less Distributions:
From Net Investment Income (0.08) (0.05) (0.10) (0.20) (0.20)
In Excess of Net Investment Income - - - (0.05) (0.01)
From Net Realized Gains (6.35) (4.47) (5.75) (3.82) (1.63)
Total Distributions (6.43) (4.52) (5.85) (4.07) (1.84)
Net Asset Value, End of Period $44.69 $38.62 $37.41 $35.26 $33.35
RATIOS AND SUPPLEMENTAL DATA
Total Return +33.4% +15.5% +23.5% +18.1% +27.3%
Net Assets, End of Period (In Millions)$2,537 $2,038 $1,925 $1,770 $1,328
Ratio of Expenses to Average Net Assets 1.2% 1.2% 1.2% 1.3% 1.3%
Ratio of Net Investment Income to
Average Net Assets 0.2% 0.2% 0.3% 0.6% 0.7%
Portfolio Turnover Rate 80.8% 86.0% 93.7% 103.3% 92.5%

</TABLE>
(a) Information presented relates to a share of capital stock of the
fund outstanding for the entire period.

STRONG STRATEGIC GROWTH FUND- INVESTOR CLASS
Dec. 31, Dec. 31,
SELECTED PER-SHARE DATA(a) 1999 1998(b)
Net Asset Value, Beginning of Period $11.25 $10.00
Income From Investment Operations:
Net Investment Loss (0.11) (0.03)
Net Realized and Unrealized Gains on Investments 3.41 1.28
Total from Investment Operations 3.30 1.25
Less Distributions:
From Net Realized Gains (0.70) -
Total Distributions (0.70) -
Net Asset Value, End of Period $13.85 $11.25
RATIOS AND SUPPLEMENTAL DATA
Total Return +29.4% +12.5%
Net Assets, End of Period (In Millions) $5 $3
Ratio of Expenses to Average Net Assets 2.0% 2.0%*
Ratio of Net Investment Loss to Average Net Assets (1.1%) (0.5%)*
Portfolio Turnover Rate 178.4% 59.7%

9
<PAGE>

YOUR ACCOUNT

SHARE PRICE

((Side Box))
<TABLE>
<S> <C>
We determine the share price or NAV of a fund or class by
dividing net assets attributable to the fund or class (the value of
the investments, cash, and other assets attributable to the fund or
class minus the liabilities attributable to the fund or class) by the
number of fund or class shares outstanding.
- ---------------------------------------------------------------------
</TABLE>

FOREIGN SECURITIES

BUYING SHARES

INVESTMENT MINIMUMS: When buying shares, you must meet the following investment
minimum requirements.

<TABLE>
<CAPTION>
<S> <C> <C>
INITIAL INVESTMENT MINIMUM ADDITIONAL INVESTMENT MINIMUM
- -------------------------------------- ----------------------------------- -----------------------------------
Regular accounts $2,500 $50
- -------------------------------------- ----------------------------------- -----------------------------------
Education IRA accounts $500 $50
- -------------------------------------- ----------------------------------- -----------------------------------
Other IRAs and UGMA/UTMA accounts $250 $50
- -------------------------------------- ----------------------------------- -----------------------------------
SIMPLE IRA, SEP-IRA, 403(b)(7), Keogh, the lesser of $250 or $25 per month $50
Pension Plan, and Profit Sharing Plan
accounts
- -------------------------------------- ----------------------------------- -----------------------------------
</TABLE>

PLEASE REMEMBER ...
- - If you use an Automatic Investment Plan, we waive the initial investment
minimum to open an account and the additional investment minimum is $50.

- - You cannot use an Automatic Investment Plan with an Education IRA.

- - If you open a qualified retirement plan account where we or one of our
alliance partners provides administrative services, there is no initial
investment minimum.

10
<PAGE>

MULTIPLE CLASS PLAN

Each fund has adopted a multiple class plan which currently permits the GROWTH
FUND to offer Investor Class shares, Advisor Class shares, and Institutional
Class shares; the OPPORTUNITY FUND to offer Investor Class shares and Advisor
Class shares; and the COMMON STOCK FUND, the DISCOVERY FUND, the MID CAP
DISCIPLINED FUND, the MID CAP GROWTH FUND, and the STRATEGIC GROWTH FUND to
offer Investor Class shares. Each class is offered at its net asset value and
is subject to fees and expenses which may differ between classes. The
principal differences between each of the classes of shares are that the
Advisor Class shares are subject to a front-end sales load and distribution
fees and expenses under a 12b-1 plan, and each class of shares is subject to
different administrative and transfer agency fees and expenses.

COMMON STOCK FUND CLOSED TO NEW INVESTORS
The COMMON STOCK FUND is closed to new investors, however, the fund may
continue to offer its shares through company-sponsored retirement plans (such
as 401(k) plans) and in other limited circumstances. Current shareholders may
continue to add to their accounts and open new accounts in the fund. Although
the fund may resume sales to new investors in the future, currently, there are
no plans to do so.

BUYING INSTRUCTIONS
You can buy shares in several ways.

MAIL

((Side Box))
QUESTIONS?
Call 800-368-3863
24 hours a day
7 days a week

INVESTOR CENTERS

You can visit our Investor Center in Menomonee Falls, Wisconsin, near
Milwaukee. Call 800-368-3863 for hours and directions, or for the location of
our other Investor Centers.

11
<PAGE>

WIRE
Call 800-368-3863 for instructions before wiring funds either to open or add
to an account. This helps to ensure that your account will be credited
promptly and correctly.

PLEASE REMEMBER . . .

We only accept checks payable to Strong.

- - We do not accept cash, third-party checks, credit card convenience checks, or
checks drawn on banks outside the U.S.

- - You will be charged $20 for every check, wire, or Electronic Funds Transfer
returned unpaid.

SELLING SHARES

SELLING INSTRUCTIONS
You can sell shares in several ways.

(1) We can mail a check to your account's address. Checks will not be
forwarded by the Postal Service, so please notify us if your address has
changed.

11
<PAGE>

STRONG DIRECT(R)
You can redeem shares through Strong Direct(R) at 800-368-7550. See "Services
for Investors" for more information.

STRONG NETDIRECT(R)
You can use Strong netDirect(R) at WWW.ESTRONG.COM, to redeem shares. See
"Services for Investors" for more information.

INVESTOR CENTERS
You can visit our Investor Center in Menomonee Falls, Wisconsin, near
Milwaukee. Call 800-368-3863 for hours and directions, or for the location of
our other Investor Centers.

AUTOMATIC INVESTMENT SERVICES

BROKER-DEALER
You may sell shares through a broker-dealer or other intermediary who may
charge you a fee.

- - Some transactions and requests require a signature guarantee.

((Side Box))
<TABLE>
<CAPTION>
<S> <C>
There may be special distribution requirements that
apply to retirement accounts. For instructions on:
- -Roth and Traditional IRA accounts, call
800-368-3863, and
- -SIMPLE IRA, SEP-IRA, 403(b)(7), Keogh,
Pension Plan, Profit Sharing Plan, or 401(k) Plan
accounts, call 800-368-2882.
- ---------------------------------------------------
</TABLE>

((Side Box))
<TABLE>
<CAPTION>
<S> <C>
SIGNATURE GUARANTEES help ensure that major
transactions or changes to your account are in fact
authorized by you. For example, we require a signature
guarantee on written redemption requests for more than
$50,000. You can obtain a signature guarantee for a
nominal fee from most banks, brokerage firms, and
other financial institutions. A notary public stamp or
seal cannot be substituted for a signature guarantee.
- --------------------------------------------------------
</TABLE>

12
<PAGE>

ADDITIONAL POLICIES

TELEPHONE AND INTERNET TRANSACTIONS
We use reasonable procedures to confirm that telephone and Internet transaction
requests are genuine. We may be responsible if we do not follow these
procedures. You are responsible for losses resulting from fraudulent or
unauthorized instructions received over the telephone or by computer, provided
we reasonably believe the instructions were genuine. To safeguard your account,
please keep your Strong Direct(R) and Strong netDirect(R) passwords
confidential. Contact us immediately if you believe there is a discrepancy
between a transaction you performed and the confirmation statement you
received, or if you believe someone has obtained unauthorized access to your
account or password.

LOW BALANCE ACCOUNT FEE

VERIFICATION OF ACCOUNT STATEMENTS

DISTRIBUTIONS

DISTRIBUTION POLICY
The fund generally pays you dividends from net investment income and
distributes any net capital gains that it realizes annually.

REINVESTMENT OF DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
Your dividends and capital gain distributions will be automatically reinvested
in additional shares, unless you choose otherwise. Your other options are to
receive checks for these payments, have them automatically invested in another
Strong Fund, or have them deposited into your bank account. To change the
current option for payment of dividends and capital gain distributions, please
call 800-368-3863.

TAXES

14
<PAGE>

((Side Box))
<TABLE>
<CAPTION>
<S> <C>
Generally, if your investment is in a Traditional IRA or
other TAX-DEFERRED ACCOUNT, your dividends and
distributions will not be taxed at the time they are paid,
but instead at the time you withdraw them from your
account.
- ----------------------------------------------------------
</TABLE>

YEAR-END STATEMENT
To assist you in tax preparation, after the end of each calendar year, we send
you a statement of your fund's ordinary dividends and net capital gain
distributions (Form 1099).

((Side Box))

Unless your investment is in a tax-deferred retirement
account such as an IRA, YOU MAY WANT TO AVOID:
- -Investing a large amount in a fund close to the end of
the calendar year. If the fund makes a capital gain
distribution, you may receive some of your
investment back as a taxable distribution.
- -Selling shares of a mutual fund at a loss and then
investing in the same fund within 30 days before or
after the sale. This is called a wash sale and you will
not be allowed to claim a tax loss on the transaction.
- ---------------------------------------------------------
</TABLE>

((Side Box))
<TABLE>
<CAPTION>
<S> <C>
COST BASIS is the amount that you paid for the shares.
When you sell shares, you subtract the cost basis from the
sale proceeds to determine whether you realized an
investment gain or loss. For example, if you bought a
share of a fund at $10 and you sold it two years later at
$11, your cost basis on the share is $10 and your gain is
$1.
- ----------------------------------------------------------
</TABLE>

15
<PAGE>

Because everyone's tax situation is unique, you should consult your tax
professional for assistance.

SERVICES FOR INVESTORS

Strong provides you with a variety of services to help you manage your
investment. For more details, call 800-368-3863, 24 hours a day, 7 days a
week. These services include:

STRONG DIRECT(R) AUTOMATED TELEPHONE SYSTEM
Our 24-hour automated response system enables you to use a touch-tone phone to
access current share prices (800-368-3550), to access fund and account
information (800-368-5550), and to make purchases, exchanges, or redemptions
among your existing accounts if you have elected these services
(800-368-7550). Passwords help to protect your account information.

STRONG AUTOMATIC INVESTMENT SERVICES
You may invest or redeem automatically in the following ways, some of which
may be subject to additional restrictions or conditions.

AUTOMATIC INVESTMENT PLAN (AIP)
This plan allows you to make regular, automatic investments from your bank
checking or savings account.

AUTOMATIC EXCHANGE PLAN
This plan allows you to make regular, automatic exchanges from one eligible
Strong Fund to another.

AUTOMATIC DIVIDEND REINVESTMENT

15
<PAGE>

Your dividends and capital gains will be automatically reinvested in
additional shares, unless you choose otherwise. Your other options are to
receive checks for these payments, have them automatically invested in another
Strong Fund, or have them deposited into your bank account.

PAYROLL DIRECT DEPOSIT PLAN
This plan allows you to send all or a portion of your paycheck, social
security check, military allotment, or annuity payment to the Strong Funds of
your choice.

STRONG RETIREMENT PLAN SERVICES
We offer a wide variety of retirement plans for individuals and institutions,
including large and small businesses. For information on:

- - INDIVIDUAL RETIREMENT PLANS, including Traditional IRAs and Roth IRAs, call
800-368-3863.

- - QUALIFIED RETIREMENT PLANS, including SIMPLE IRAs, SEP-IRAs, 403(b)(7)s,
Keoghs, Pension Plans, Profit Sharing Plans, and 401(k) Plans, call
800-368-2882.

SOME OF THESE SERVICES MAY BE SUBJECT TO ADDITIONAL RESTRICTIONS OR
CONDITIONS. CALL 800-368-3863 FOR MORE INFORMATION.

RESERVED RIGHTS

We reserve the right to:

- - Refuse, change, discontinue, or temporarily suspend account services,
including purchase, exchange, or telephone and Strong netDirect(R) redemption
privileges, for any reason.

- - Change the minimum or maximum investment amounts.

- - Delay sending out redemption proceeds for up to seven days (this generally
only applies to very large redemptions without notice, excessive trading, or
during unusual market conditions).

16
<PAGE>

- - Reject any purchase or redemption request that does not contain all required
documentation.

FOR MORE INFORMATION

More information is available upon request at no charge, including:

To request information or to ask questions:

BY TELEPHONE FOR HEARING-IMPAIRED (TDD)
414-359-1400 or 800-368-3863 800-999-2780

BY MAIL BY OVERNIGHT DELIVERY
Strong Funds Strong Funds
P.O. Box 2936 900 Heritage Reserve
Milwaukee, WI 53201-2936 Menomonee Falls, WI 53051

ON THE INTERNET BY E-MAIL
View on-line or download documents: [email protected]
Strong Funds: WWW.ESTRONG.COM
SEC*: www.sec.gov

This prospectus is not an offer to sell securities in places other than the
United States and its territories.

Strong Common Stock Fund, Inc., SEC file number: 811-5687
Strong Discovery Fund, Inc., SEC file number: 811-5341
Strong Growth Fund, a series of Strong Equity Funds, Inc., SEC file number:
811-8100
Strong Mid Cap Disciplined Fund, a series of Strong Equity Funds, Inc., SEC
file number: 811-8100
Strong Mid Cap Growth Fund, a series of Strong Equity Funds, Inc., SEC file
number: 811-8100
Strong Opportunity Fund, a series of Strong Opportunity Fund, Inc., SEC file
number: 811-3793
Strong Strategic Growth Fund, a series of Strong Equity Funds, Inc., SEC file
number: 811-8100

18
<PAGE>

[Strong logo and picture of man and two children fishing]

prospectus
THE STRONG EQUITY FUNDS
advisor class

May 1, 2000

The Strong Enterprise Fund

The Strong Growth Fund

The Strong Growth 20 Fund

The Strong Opportunity Fund

1
<PAGE>

TABLE OF CONTENTS

Your Investment.................................................................
KEY INFORMATION.................................................................
What are the funds' goals?.....................................................1
What are the funds' principal investment strategies?...........................1
What are the main risks of investing in the funds?.............................3
What are the funds' fees and expenses?.........................................8
Who are the funds' investment advisor and portfolio managers?..................9
OTHER IMPORTANT INFORMATION YOU SHOULD KNOW...................................11
Financial Highlights..........................................................11
Your Account....................................................................
Distribution Fees.............................................................16
Share Price...................................................................16
Buying Shares.................................................................17
Selling Shares................................................................21
Additional Policies...........................................................22
Distributions.................................................................23
Taxes.........................................................................24
Reserved Rights...............................................................25
For More Information..................................................Back Cover

IN THIS PROSPECTUS, "WE" REFERS TO STRONG CAPITAL MANAGEMENT, INC., THE
INVESTMENT ADVISOR, ADMINISTRATOR, AND TRANSFER AGENT FOR THE STRONG FUNDS.

2
<PAGE>

YOUR INVESTMENT

KEY INFORMATION

WHAT ARE THE FUNDS' GOALS?

Each fund seeks capital growth.

WHAT ARE THE FUNDS' PRINCIPAL INVESTMENT STRATEGIES?

The GROWTH FUND focuses on stocks of companies that its manager believes have
favorable prospects for accelerating growth of earnings but are selling at
reasonable valuations based on earnings, cash flow, or asset value. The
portfolio can include stocks of any size. The fund writes put and call options.
This means that the fund sells an option to another party to either sell a
stock to (put) or buy a stock from (call) the fund at a predetermined price in
the future. When the fund writes put or call options, it will receive fees or
premiums but is exposed to losses due to changes in the value of the stock that
the put or call is written against. Writing options can serve as a limited or
partial hedge against adverse market movements. This is because declines in
the value of the hedged stock will be offset by the premium received for
writing the option. Whether or not this hedging strategy is successful depends
on a variety of factors, particularly the ability of the fund's manager to
predict movements of the price of the hedged stock. The manager's decision to
engage in this hedging strategy will reflect the manager's judgment that
writing an option on a stock will provide value to the fund and its
shareholders. To a limited extent, the fund may also invest in foreign
securities. The manager may sell a stock when the company's growth prospects
become less attractive. The fund's active trading approach may increase the
fund's costs which may reduce the fund's performance. The fund's active trading
approach may also increase the amount of capital gains tax that you pay on the
fund's returns.

The GROWTH 20 FUND focuses on stocks of 20 to 30 companies that its manager
believes have favorable prospects for accelerating growth of earnings but are
selling at reasonable valuations based on earnings, cash flow, or asset value.
The portfolio can include stocks of any size. The fund writes puts and call
options. This means that the fund sells an option to another party to either
sell a stock to (put) or buy a stock from (call) the fund at a predetermined
price in the future. When the fund writes put or call options, it will receive
fees or premiums but is exposed to losses due to changes in the value of the
stock that the put or call is written against. Writing options can serve as a
limited or partial hedge against adverse market movements. This is because
declines in the value of the hedged stock will be offset by the premium
received for writing the option. Whether or not this hedging strategy is
successful depends on a variety of factors, particularly the ability of the
fund's manager to predict movements of the price of the hedged stock. The
manager's decision to engage in this hedging strategy will reflect the
manager's judgment that writing an option on a stock will provide value to the
fund and its shareholders. To a limited extent, the fund may also invest in
foreign securities. The manager may sell a stock when the company's growth
prospects become less attractive. The fund's active trading approach may
increase the fund's costs which may reduce the fund's performance. The fund's
active trading approach may also increase the amount of capital gains tax that
you pay on the fund's returns.

3
<PAGE>

manager determines a company's private market value based on a fundamental
analysis of a company's cash flows, asset valuations, competitive situation,
and franchise value. To a limited extent, the fund may also invest in foreign
securities. The manager may sell a stock when its price no longer compares
favorably with the company's private market value.

The managers of each of the funds may invest in cash or cash-type securities
(high-quality, short-term debt securities issued by corporations, financial
institutions, or the U.S. government) as a temporary defensive position to
avoid losses during adverse market conditions. The ENTERPRISE FUND, the GROWTH
FUND, and the GROWTH 20 FUND may do so without limit. The OPPORTUNITY FUND may
do so with up to 30% of its assets. Taking a temporary defensive position could
reduce the benefit to these funds if the market goes up. In this case, the
funds may not achieve their investment goals.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUNDS?

WRITING OPTIONS: The GROWTH FUND and the GROWTH 20 FUND write put and call
options. The funds will receive fees for writing options but are exposed to
losses due to an adverse change in the value of the underlying asset that the
option was written against. Transactions involving written options may include
elements of leverage and could magnify a fund's losses. Using options in this
manner may reduce a fund's opportunity for investment gain. Each fund will
segregate liquid assets, such as cash, short-term debt, and other liquid
securities, in a segregated account to the extent required to cover the
financial exposure created by the use of these instruments.

NONDIVERSIFIED PORTFOLIOS: As a nondiversified fund, the GROWTH 20 FUND takes
large positions in individual stocks. As a result, the shares of this fund are
likely to fluctuate in value more than those of a fund investing in a broader
range of securities.

FUND STRUCTURE

The funds offer multiple classes of shares. The GROWTH FUND offers Investor
Class shares, Advisor Class shares, and Institutional Class shares. The
ENTERPRISE FUND, the GROWTH 20 FUND, and the OPPORTUNITY FUND offer Investor
Class shares and Advisor Class shares. Only the Advisor Class shares are
offered in this prospectus. The principal differences between each of the
classes of shares are that the Advisor Class shares are subject to a front-end
sales load and distribution fees and expenses under a 12b-1 plan, and each
class of shares is subject to different administrative and transfer agency fees
and expenses. Because 12b-1 fees are paid out of the fund's assets on an
on-going basis, over time these fees will increase the cost of an investment in
Advisor Class shares and may cost more than paying other types of sales
charges.

4
<PAGE>

FUND PERFORMANCE

The return information on the following pages illustrates how the performance
of the funds' Advisor Class shares can vary, which is one indication of the
risks of investing in the funds. Performance results for Advisor Class shares,
which were first offered on February 24, 2000, are based on the historical
performance of each fund's Investor Class shares from the inception of each
fund up to February 23, 2000, recalculated to reflect the higher annual expense
ratio applicable to the Advisor Class shares. The Investor Class shares of
these funds are not offered by this prospectus. The returns for the Advisor
Class shares are substantially similar to those of the Investor Class shares
depicted on the following pages since each are invested in the same portfolio
of securities and the only differences relate to the differences in the fees
and expenses of each class of shares. Please keep in mind that the past
performance of the funds' Advisor Class shares does not represent how they will
perform in the future. The information assumes that you reinvested all
dividends and distributions.

CALENDAR YEAR TOTAL RETURNS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Year Opportunity Growth Growth 20 Enterprise
- ------- ------------ --------- --------- ----------
1990 -11.6% - - -
- ------- ------------ --------- --------- ----------
1991 31.4% - - -
- ------- ------------ --------- --------- ----------
1992 17.0% - - -
- ------- ------------ --------- --------- ----------
1993 20.9% - - -
- ------- ------------ --------- --------- ----------
1994 2.9% 17.0% - -
- ------- ------------ --------- --------- ----------
1995 27.0% 40.7% - -
- ------- ------------ --------- --------- ----------
1996 17.8% 19.2% - -
- ------- ------------ --------- --------- ----------
1997 23.1% 18.7% - -
- ------- ------------ --------- --------- ----------
1998 15.2% 26.7% 36.3% -
- ------- ------------ --------- --------- ----------
1999 33.1% 74.8% 109.2% 187.5%
- ------- ------------ --------- --------- ----------
</TABLE>

BEST AND WORST QUARTERLY PERFORMANCE
(DURING THE PERIODS SHOWN ABOVE)

<TABLE>
<CAPTION>
<S> <C> <C>
FUND NAME BEST QUARTER RETURN WORST QUARTER RETURN
- ------------------ ------------------- ---------------------
Enterprise 71.3% (4th Q 1999) 17.0% (1st Q 1999)
Growth 55.0% (4th Q 1999) -12.8% (3rd Q 1998)
Growth 20 64.9% (4th Q 1999) -8.0% (3rd Q 1998)
Opportunity 17.5% (4th Q 1998) -14.2% (3rd Q 1998)
</TABLE>

The bar chart does not reflect the initial sales charge which was first charged
on February 24, 2000. If it did, returns would be lower than those shown.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
AS OF 12-31-99
<S> <C> <C> <C> <C>
FUND/INDEX 1-YEAR 5-YEAR 10-YEAR SINCE INCEPTION
ENTERPRISE 170.97% - - 202.71% (9-30-98)
S&P MidCap 400 Stock Index 14.72% - - 36.15%
Lipper Mid-Cap Growth
Funds Index 73.72% - - 87.08%
GROWTH 64.71% 32.96% - 30.15% (12-31-93)
S&P 500 Stock Index 21.04% 28.56% - 23.55%
Lipper Multi-Cap Growth
Funds Index 46.35% 28.76% - 22.86%
GROWTH 20 97.18% - - 56.33% (6-30-97)
S&P 500 Stock Index 21.04% - - 24.25%
Lipper Large-Cap Growth
Funds Index 34.82% - - 32.25%
OPPORTUNITY 25.43% 21.62% 16.22% 18.68% (12-31-85)
S&P MidCap 400 Stock Index 14.72% 23.05% 17.32% 17.19%
Lipper Multi-Cap Value Funds Index 5.94% 17.82% 13.03% 13.62%
</TABLE>
THE S&P MIDCAP 400 STOCK INDEX IS AN UNMANAGED INDEX GENERALLY REPRESENTATIVE
OF THE U.S. MARKET FOR MEDIUM CAPITALIZATION STOCKS. THE LIPPER MID-CAP GROWTH
FUNDS INDEX IS AN EQUALLY-WEIGHTED PERFORMANCE INDEX OF THE LARGEST QUALIFYING
FUNDS IN THIS LIPPER CATEGORY. THE S&P 500 STOCK INDEX IS AN UNMANAGED INDEX
GENERALLY REPRESENTATIVE OF THE U.S. STOCK MARKET. THE LIPPER MULTI-CAP GROWTH
FUNDS INDEX IS AN EQUALLY-WEIGHTED PERFORMANCE INDEX OF THE LARGEST QUALIFYING
FUNDS IN THIS LIPPER CATEGORY. THE LIPPER LARGE-CAP GROWTH FUNDS INDEX IS AN
EQUALLY-WEIGHTED PERFORMANCE INDEX OF THE LARGEST QUALIFYING FUNDS IN THIS
LIPPER CATEGORY. THE LIPPER MULTI-CAP VALUE FUNDS INDEX IS AN EQUALLY-WEIGHTED
PERFORMANCE INDEX OF THE LARGEST QUALIFYING FUNDS IN THIS LIPPER CATEGORY.

Unlike the bar chart, the performance table reflects the impact of the maximum
initial sales charge which was first charged on February 24, 2000. No sales
charge is imposed on reinvested dividends and distributions.

Recent returns of the ENTERPRISE FUND, the GROWTH FUND, and the GROWTH 20 FUND
were primarily achieved during favorable conditions in the market, particularly
for technology companies. You should not expect that such favorable returns can
be consistently achieved.

WHAT ARE THE FUNDS' FEES AND EXPENSES?

This section describes the fees and expenses that you may pay if you buy and
hold shares of the funds.

SHAREHOLDER FEES
(fees paid directly from your investment)

<TABLE>
<CAPTION>
<S> <C>
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON
FUND PURCHASES (AS A PERCENTAGE OF OFFERING PRICE)
Enterprise 5.75%
Growth 5.75%
Growth 20 5.75%
Opportunity 5.75%
</TABLE>

You may not have to pay the maximum sales charge because waivers and reduced
sales charges are available. Call 800-368-1683 for more information.

ANNUAL FUND OPERATING EXPENSES (AS A PERCENT OF AVERAGE NET ASSETS)

MANAGEMENT OTHER TOTAL ANNUAL FUND
FUND FEES 12B-1 FEES EXPENSES* OPERATING EXPENSES
- ------------ ------------ ------------ ------------ ------------------
Enterprise 0.75% 0.25% 0.49% 1.49%
Growth 0.75% 0.25% 0.49% 1.49%
Growth 20 0.75% 0.25% 0.51% 1.51%
Opportunity 0.75% 0.25% 0.49% 1.49%
</TABLE>

6
<PAGE>

*THE EXPENSE INFORMATION HAS BEEN RESTATED TO REFLECT CURRENT FEES.

EXAMPLE: This example is intended to help you compare the cost of investing in
the funds with the cost of investing in other mutual funds. The maximum initial
sales charge imposed on purchases of Advisor Class shares is reflected in this
example. The example assumes that you invest $10,000 in the funds and reinvest
all dividends and distributions for the time periods indicated, and then redeem
all of your shares at the end of those periods. The example also assumes that
your investment has a 5% return each year and that the funds' operating
expenses remain the same. Although your actual costs may be higher or lower,
based on these assumptions, your costs would be:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Enterprise $718 $1,019 $1,341 $2,252
Growth $718 $1,019 $1,341 $2,252
Growth 20 $720 $1,025 $1,351 $2,273
Opportunity $718 $1,019 $1,341 $2,252
</TABLE>

WHO ARE THE FUNDS' INVESTMENT ADVISOR AND PORTFOLIO MANAGERS?

The following individuals are the funds' portfolio managers.
ANDREW S. CUPPS manages the ENTERPRISE FUND. He has over eight years of
investment experience. He joined Strong as an equity portfolio manager in March
1994. Since 1994, he has been a portfolio manager of separate accounts and
accounts of institutional investors. He has managed the ENTERPRISE FUND since
its inception in September 1998. Prior to joining Strong, Mr. Cupps was
employed at Driehaus Capital Management as a research analyst from July 1992 to
March 1994. Mr. Cupps received his bachelors degree in Economics from Harvard
University in 1992.
RONALD C. OGNAR manages the GROWTH FUND and the GROWTH 20 FUND. He has over 30
years of investment experience and is a Chartered Financial Analyst. He joined
Strong as a portfolio manager in April 1993. He has managed the GROWTH FUND
since its inception in December 1993 and the GROWTH 20 FUND since its inception
in June 1997. For two years prior to joining Strong, he was a principal and
portfolio manager with RCM Capital Management. For approximately three years
prior to that, he was a portfolio manager at Kemper Financial Services. Mr.
Ognar began his investment career in 1968 at LaSalle National Bank after
serving two years in the U.S. Army. He received his bachelors degree in
Accounting from the University of Illinois in 1968.
RICHARD T. WEISS manages the OPPORTUNITY FUND. He has 25 years of investment
experience and has managed the OPPORTUNITY FUND since March 1991. Mr. Weiss
joined Strong as a portfolio manager in March 1991 from Stein Roe & Farnham,
where he began his career as a research analyst in 1975. He was named a
portfolio manager in 1981. Mr. Weiss received his bachelors degree in Business
Administration from the University of Southern California in 1973 and his
Masters of Business Administration in Business from Harvard Graduate School of
Business Administration in 1975. In addition, Mr. Weiss is a member of Strong's
Executive Committee.

OTHER IMPORTANT INFORMATION YOU SHOULD KNOW

To a limited extent, a fund may participate in the initial public offering
(IPO) market. IPOs may significantly increase a fund's total returns during any
period that the fund has a small asset base. As a fund's assets grow, any
impact of IPO investments on the fund's total return may decline.

FINANCIAL HIGHLIGHTS

6
<PAGE>

Investor Class shares of the fund would have increased (or decreased) during
each period, assuming you had reinvested all dividends and distributions. The
Advisor Class shares of the fund were first offered on February 24, 2000. These
figures for the fund have been audited by PricewaterhouseCoopers LLP, whose
report, along with the fund's financial statements, is included in the fund's
annual report.

</TABLE>
(a) Information presented relates to a share of capital stock of the
fund outstanding for the entire period.

8
<PAGE>

YOUR ACCOUNT

DISTRIBUTION FEES

The Strong Funds have adopted a Rule 12b-1 distribution plan for the Advisor
Class shares of the funds. Under the distribution plan, each fund may make
monthly payments to the funds' distributor at the annual rate of 1.00% of the
average daily net assets of the fund attributable to its Advisor Class shares.
However, under the Distribution Agreement for the Advisor Class shares,
payments to the fund's distributor under the distribution plan are currently
limited to payment at an annual rate equal to 0.25% of average daily net assets
attributable to Advisor Class shares. Such payments may be made for
distribution related services and other services which are primarily intended
to result in the sale of Advisor Class shares of the fund. Because Rule 12b-1
fees are ongoing, over time they will increase the cost of an investment in the
Advisor Class shares of the fund and may cost more than other types of sales
charges.

SHARE PRICE

Your transaction price for buying, selling, or exchanging Advisor Class shares
is the net asset value per share (NAV) of that class of shares. Any applicable
sales charge will be added to the purchase price for Advisor Class Shares. The
"offering price" is the initial sales charge plus the NAV. NAV is generally
calculated as of the close of trading on the New York Stock Exchange (usually
3:00 p.m. Central Time) every day the NYSE is open. If the NYSE closes at any
other time, or if an emergency exists, NAV may be calculated at a different
time. Your share price will be the next NAV calculated after we accept your
order.

((Side Box))
<TABLE>
<CAPTION>
<S> <C>
We determine the share price or NAV of a class of shares by
dividing net assets attributable to the class of shares (the value of
the fund's investments, cash, and other assets attributable to the
class of shares minus the fund's liabilities attributable to the class
of shares) by the number of shares in the class outstanding.
- ----------------------------------------------------------------------
</TABLE>

FOREIGN SECURITIES

8
<PAGE>

BUYING SHARES

INVESTMENT MINIMUMS: When buying shares, you must meet the following investment
minimum requirements.

<TABLE>
<CAPTION>
<S> <C> <C>
INITIAL INVESTMENT MINIMUM ADDITIONAL INVESTMENT MINIMUM
- -------------------------------------- ----------------------------------- ----------------------------------
Regular accounts $2,500 $50
- -------------------------------------- ----------------------------------- ----------------------------------
Education IRA accounts $500 $50
- -------------------------------------- ----------------------------------- ----------------------------------
Other IRAs and UGMA/UTMA accounts $250 $50
- -------------------------------------- ----------------------------------- ----------------------------------
SIMPLE IRA, SEP-IRA, 403(b)(7), Keogh, the lesser of $250 or $25 per month $50
Pension Plan, and Profit Sharing Plan
accounts*
- -------------------------------------- ----------------------------------- ----------------------------------
</TABLE>
*IF YOU OPEN A QUALIFIED RETIREMENT PLAN ACCOUNT WHERE WE OR ONE OF OUR
ALLIANCE PARTNERS PROVIDE ADMINISTRATIVE SERVICES, THERE IS NO INITIAL
INVESTMENT MINIMUM.

OFFERING PRICE: The offering price is the next NAV calculated after we accept
your order, plus any initial sales charge. No sales charge is imposed on
reinvested dividends and distributions. Advisor Class shares are also subject
to Rule 12b-1 fees at an annual rate of 0.25% of average daily net assets. The
amount of the initial sales charge you pay when you buy Advisor Class shares
differs depending on the amount you invest, as follows:

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNT OF AS A PERCENTAGE AS A PERCENTAGE
YOUR INVESTMENT OF OFFERING PRICE OF YOUR INVESTMENT
Less than $50,000 5.75% 6.10%
$50,000 but less than $100,000 4.50% 4.71%
$100,000 but less than $250,000 3.50% 3.63%
$250,000 but less than $500,000 2.50% 2.56%
$500,000 but less than $1,000,000 2.00% 2.04%
$1,000,000 or more 0.00% 0.00%
</TABLE>

INITIAL SALES CHARGE WAIVERS: The initial sales charge on the Advisor Class
shares may be waived in certain circumstances. These circumstances are
described in the Statement of Additional Information. Call 800-368-1683 for a
copy.

REINSTATEMENT PRIVILEGE: After you have redeemed Advisor Class shares, you
have a one time right to reinvest the proceeds back into the same fund within
90 days of the redemption at the current net asset value (without an initial
sales charge).

LETTER OF INTENT (LOI): If you intend to invest $50,000 or more, you may buy
Advisor Class shares at the reduced sales charge as though the total amount
were invested in Advisor Class shares in one lump sum. Shares equal to the
difference between the lower sales charge and the higher sales charge you would
have paid had you not purchased your shares through this program will be held
in escrow until the intended amount is invested. These escrowed shares may be
redeemed by a fund if the investor is required to pay additional sales charges.

RIGHTS OF ACCUMULATION: You will qualify for a lower sales charge on your
purchases of Advisor Class shares when your new investment in Advisor Class
shares, together with the current (offering price) value of all your holdings
in the Advisor Class shares, reaches a reduced sales charge level.

MULTIPLE CLASS PLAN: The fund has adopted a multiple class plan which
currently permits the GROWTH FUND to offer Investor Class shares, Advisor Class
shares, and Institutional Class shares, and the ENTERPRISE FUND, the GROWTH 20
FUND, and the OPPORTUNITY FUND to offer Investor Class shares and Advisor Class
shares. Each class is offered at its net asset value and is subject to fees and
expenses which may differ between classes. The principal differences between
each of the classes of shares are that the Advisor Class shares are subject to
a front-end sales load and distribution fees and expenses under a 12b-1 plan,
and each class of shares is subject to different administrative and transfer
agency fees and expenses.

BUYING INSTRUCTIONS
You can buy shares in several ways.

9
<PAGE>

MAIL

EXCHANGE OPTION
Sign up for the exchange option when you open your account. You may exchange
your shares of the fund for shares of another Strong Fund. You will not pay an
initial sales charge when you exchange, unless you exchange Advisor Class
shares of the Strong Advantage Fund into another fund's Advisor Class shares.
You may make an exchange by calling Strong Institutional Client Services at
800-368-1683 or by sending a facsimile to 414-359-3535. Please obtain and read
the appropriate prospectus before investing in any of the Strong Funds.
Remember, an exchange of shares of one Strong Fund for those of another Strong
Fund, is considered a sale and a purchase of fund shares for tax purposes and
may result in a capital gain or loss. Some Strong Funds that you may want to
exchange into may charge a redemption fee of 0.50% to 1.00% on the sale of
shares held for less than six months. Purchases by exchange are subject to the
investment requirements and other criteria of the fund or class purchased.

WIRE
Call 800-368-1683 for instructions before wiring funds either to open or add
to an account. This helps to ensure that your account will be credited
promptly and correctly.

BROKER-DEALER
You may purchase shares through a broker-dealer or other intermediary who may
charge you a fee. Broker-dealers, including each fund's distributor, and other
intermediaries may also from time to time sponsor or participate in
promotional programs pursuant to which investors receive incentives for
establishing with the broker-dealer or intermediary an account and/or for
purchasing shares of the Strong Funds through the account(s). Investors
should contact the broker-dealer or intermediary and consult the Statement of
Additional Information for more information about promotional programs.

PLEASE REMEMBER . . .

We only accept checks payable to Strong.

- - We do not accept cash, third-party checks, credit card convenience checks, or
checks drawn on banks outside the U.S.

- - You will be charged $20 for every check, wire, or Electronic Funds Transfer
returned unpaid.

SELLING SHARES

SELLING INSTRUCTIONS
You can sell shares in several ways.

REDEMPTION OPTION
Sign up for the redemption option when you open your account. With this
option, you may sell shares by phone and receive the proceeds in one of three
ways:

11
<PAGE>

(1) We can mail a check to your account's address. Checks will not be
forwarded by the Postal Service, so please notify us if your address has
changed.

BROKER-DEALER
You may sell shares through a broker-dealer or other intermediary who may
charge you a fee.

- - Some transactions and requests require a signature guarantee.

((Side Box))
<TABLE>
<CAPTION>
<S> <C>
SIGNATURE GUARANTEES help ensure that major
transactions or changes to your account are in fact
authorized by you. For example, we require a signature
guarantee on written redemption requests for more than
$50,000. You can obtain a signature guarantee for a
nominal fee from most banks, brokerage firms, and
other financial institutions. A notary public stamp or
seal cannot be substituted for a signature guarantee.
- --------------------------------------------------------
</TABLE>

ADDITIONAL POLICIES

TELEPHONE TRANSACTIONS

We use reasonable procedures to confirm that telephone transaction requests are
genuine. We may be responsible if we do not follow these procedures. You are
responsible for losses resulting from fraudulent or unauthorized instructions
received over the telephone, provided we reasonably believe the instructions
were genuine. During times of unusual market activity, our phones may be busy
and you may experience a delay placing a telephone request.

12
<PAGE>

VERIFICATION OF ACCOUNT STATEMENTS

DISTRIBUTIONS

DISTRIBUTION POLICY
Each fund generally pays you dividends from net investment income and
distributes any net capital gains that it realizes annually.

TAXES

YEAR-END STATEMENT
To assist you in tax preparation, after the end of each calendar year, we send
you a statement of your fund's ordinary dividends and net capital gain
distributions (Form 1099).

Because everyone's tax situation is unique, you should consult your tax
professional for assistance.

13
<PAGE>

RESERVED RIGHTS

We reserve the right to:

- - Refuse, change, discontinue, or temporarily suspend account services,
including purchase, exchange, or telephone and redemption privileges, for any
reason.

- - Change the minimum or maximum investment amounts.

- - Delay sending out redemption proceeds for up to seven days (this generally
only applies to very large redemptions without notice, excessive trading, or
during unusual market conditions).

- - Reject any purchase or redemption request that does not contain all required
documentation.

14
<PAGE>

FOR MORE INFORMATION

More information is available upon request at no charge, including:

To request information or to ask questions:

BY TELEPHONE BY OVERNIGHT DELIVERY
800-368-1683 Strong Institutional Client Services
100 Heritage Reserve
Menomonee Falls, WI 53051
BY MAIL
Strong Institutional Client Services ON THE INTERNET
P.O. Box 2936 View on-line or download documents:
Milwaukee, WI 53201-2936 SEC*: www.sec.gov

This prospectus is not an offer to sell securities in places other than the
United States and its territories.

*INFORMATION ABOUT A FUND (INCLUDING THE SAI) CAN ALSO BE REVIEWED AND COPIED
AT THE SECURITIES AND EXCHANGE COMMISSION'S PUBLIC REFERENCE ROOM IN
WASHINGTON, D.C. YOU MAY CALL THE COMMISSION AT 202-942-8090 FOR INFORMATION
ABOUT THE OPERATION OF THE PUBLIC REFERENCE ROOM. REPORTS AND OTHER INFORMATION
ABOUT A FUND ARE ALSO AVAILABLE FROM THE EDGAR DATABASE ON THE COMMISSION'S
INTERNET SITE AT WWW.SEC.GOV. YOU MAY OBTAIN A COPY OF THIS INFORMATION, AFTER
PAYING A DUPLICATING FEE, BY SENDING A WRITTEN REQUEST TO THE COMMISSION'S
PUBLIC REFERENCE SECTION, WASHINGTON, D.C. 20549-0102, OR BY SENDING AN
ELECTRONIC REQUEST TO THE FOLLOWING E-MAIL ADDRESS: [email protected].

Strong Enterprise Fund, a series of Strong Equity Funds, Inc., SEC file number:
811-8100
Strong Growth Fund, a series of Strong Equity Funds, Inc., SEC file number:
811-8100
Strong Growth 20 Fund, a series of Strong Equity Funds, Inc., SEC file number:
811-8100
Strong Opportunity Fund, a series of Strong Opportunity Fund, Inc., SEC file
number: 811-3793

15
<PAGE>

[Strong logo and picture of man and two children fishing]

prospectus
THE STRONG GROWTH FUND
institutional class

May 1, 2000

1
<PAGE>

TABLE OF CONTENTS
Your Investment.................................................................
KEY INFORMATION.................................................................
What are the fund's goals?.....................................................1
What are the fund's principal investment strategies?...........................1
What are the main risks of investing in the fund?..............................2
What are the fund's fees and expenses?.........................................5
Who are the fund's investment advisor and portfolio manager?...................6
OTHER IMPORTANT INFORMATION YOU SHOULD KNOW....................................7
Financial Highlights...........................................................7
Your Account....................................................................
Share Price....................................................................9
Buying Shares.................................................................10
Selling Shares................................................................11
Additional Policies...........................................................12
Distributions.................................................................13
Taxes.........................................................................14
Reserved Rights...............................................................15
For More Information..................................................Back Cover

IN THIS PROSPECTUS, "WE" REFERS TO STRONG CAPITAL MANAGEMENT, INC., THE
INVESTMENT ADVISOR, ADMINISTRATOR, AND TRANSFER AGENT FOR THE STRONG FUNDS.

2
<PAGE>

YOUR INVESTMENT

KEY INFORMATION

WHAT ARE THE FUND'S GOALS?

The fund seeks capital growth.

WHAT ARE THE FUND'S PRINCIPAL INVESTMENT STRATEGIES?

The fund focuses on stocks of companies that its manager believes have
favorable prospects for accelerating growth of earnings but are selling at
reasonable valuations based on earnings, cash flow, or asset value. The
portfolio can include stocks of any size.

The fund writes put and call options. This means that the fund sells an option
to another party to either sell a stock to (put) or buy a stock from (call) the
fund at a predetermined price in the future. When the fund writes put or call
options, it will receive fees or premiums but is exposed to losses due to
changes in the value of the stock that the put or call is written against.
Writing options can serve as a limited or partial hedge against adverse market
movements. This is because declines in the value of the hedged stock will be
offset by the premium received for writing the option. Whether or not this
hedging strategy is successful depends on a variety of factors, particularly
the ability of the fund's manager to predict movements of the price of the
hedged stock. The manager's decision to engage in this hedging strategy will
reflect the manager's judgment that writing an option on a stock will provide
value to the fund and its shareholders.

To a limited extent, the fund may also invest in foreign securities. The
manager may sell a stock when the company's growth prospects become less
attractive. The fund's active trading approach may increase the fund's costs
which may reduce the fund's performance. The fund's active trading approach
may also increase the amount of capital gains tax that you pay on the fund's
returns.

The manager of the fund may invest in cash or cash-type securities
(high-quality, short-term debt securities issued by corporations, financial
institutions, or the U.S. government) as a temporary defensive position to
avoid losses during adverse market conditions. Taking a temporary defensive
position could reduce the benefit to the fund if the market goes up. In this
case, the fund may not achieve its investment goals.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?

GENERAL STOCK RISKS: The major risks of the fund are those of investing in the
stock market. That means the fund may experience sudden, unpredictable declines
in value, as well as periods of poor performance. Because stock values go up
and down, the value of your fund's shares may go up and down. Therefore, when
you sell your investment, you may receive more or less money than you
originally invested.

GROWTH-STYLE INVESTING: Different types of stocks tend to shift into and out
of favor with stock market investors depending on market and economic
conditions. Because the fund focuses on growth-style stocks, the fund's
performance may at times be better or worse than the performance of stock funds
that focus on other types of stocks or that have a broader investment style.

WRITING OPTIONS: The fund writes put and call options. The fund will receive
fees for writing options but is exposed to losses due to an adverse change in
the value of the underlying asset that the option was written against.
Transactions involving written options may include elements of leverage and
could magnify the fund's losses. Using options in this manner may reduce the
fund's opportunity for investment gain. The fund will segregate liquid assets,
such as cash, short-term debt, and other liquid securities, in a segregated
account to the extent required to cover the financial exposure created by the
use of these instruments.

3
<PAGE>

FOREIGN SECURITIES: The fund may invest up to 25% of its assets in foreign
securities. Foreign investments involve additional risks, including
currency-rate fluctuations, political and economic instability, differences in
financial reporting standards, and less-strict regulation of securities
markets.

SMALLER AND MEDIUM COMPANIES: The fund invests a substantial portion of its
assets in the stocks of smaller-capitalization companies. Small- and
medium-capitalization companies often have narrower markets and more limited
managerial and financial resources than larger, more established companies. As
a result, its performance can be more volatile and it faces greater risk of
business failure, which could increase the volatility of the fund's portfolios.
Generally, the smaller the company size, the greater these risks.

The fund is appropriate for investors who are comfortable with the risks
described here and whose financial goals are five or more years in the future.
The fund is not appropriate for investors concerned primarily with principal
stability.

FUND STRUCTURE

The fund offers multiple classes of shares: Investor Class shares, Advisor
Class shares, and Institutional Class shares. Only the Institutional Class
shares are offered in this prospectus. The principal differences between each
of the classes of shares are that the Advisor Class shares are subject to a
front-end sales load and distribution fees and expenses under a 12b-1 plan, and
each class of shares is subject to different administrative and transfer agency
fees and expenses. Because 12b-1 fees are paid out of the fund's assets on an
on-going basis, over time these fees will increase the cost of an investment in
Advisor Class shares and may cost more than paying other types of sales
charges.

FUND PERFORMANCE
The return information on the following pages illustrates how the performance
of the fund's Institutional Class shares can vary, which is one indication of
the risks of investing in the fund. Performance results for the Institutional
Class shares, which were first offered on February 24, 2000, are based on the
historical performance of the fund's Investor Class shares from the inception
of the fund up to February 23, 2000. The Investor Class shares of the fund,
which are not offered by this prospectus, achieved performance results which
are lower than those that are expected to be achieved by the Institutional
Class shares because the Investor Class shares are invested in the same
portfolio of securities but are subject to a higher annual expense ratio. The
returns for the Institutional Class are substantially similar to those of the
Investor Class shares depicted below and on the following page since each are
invested in the same portfolio of securities and the only differences relate to
the differences in the fees and expenses of each class of shares. Please keep
in mind that the past performance of the fund's Institutional Class shares does
not represent how it will perform in the future. The information assumes that
you reinvested all dividends and distributions.

CALENDAR YEAR TOTAL RETURNS

<TABLE>
<CAPTION>
<S> <C>
Year Growth
- ---- -------
1994 17.3%
- ---- -------
1995 41.0%
- ---- -------
1996 19.5%
- ---- -------
1997 19.1%
- ---- -------
1998 27.0%
- ---- -------
1999 75.1%
- ---- -------
</TABLE>

BEST AND WORST QUARTERLY PERFORMANCE
(DURING THE PERIODS SHOWN ABOVE)

<TABLE>
<CAPTION>
<S> <C> <C>
FUND NAME BEST QUARTER RETURN WORST QUARTER RETURN
- ----------------- ------------------- ---------------------
Growth 54.9% (4th Q 1999) -12.7% (3rd Q 1998)
</TABLE>

4
<PAGE>

AVERAGE ANNUAL TOTAL RETURNS
AS OF 12-31-99
FUND/INDEX 1-YEAR 5-YEAR SINCE INCEPTION
GROWTH 75.06% 34.86% 31.75% (12-31-93)
S&P 500 Stock Index 21.04% 28.56% 23.55%
Lipper Multi-Cap Growth
Funds Index 46.35% 28.76% 22.86%

THE S&P 500 STOCK INDEX IS AN UNMANAGED INDEX GENERALLY REPRESENTATIVE OF THE
U.S. STOCK MARKET. THE LIPPER MULTI-CAP GROWTH FUNDS INDEX IS AN
EQUALLY-WEIGHTED PERFORMANCE INDEX OF THE LARGEST QUALIFYING FUNDS IN THIS
LIPPER CATEGORY.

Recent returns for the fund were primarily achieved during favorable conditions
in the market, particularly for technology companies. You should not expect
that such favorable returns can be consistently achieved.

WHAT ARE THE FUND'S FEES AND EXPENSES?

This section describes the fees and expenses that you may pay if you buy and
hold shares of the fund.

SHAREHOLDER FEES
(fees paid directly from your investment)
The Institutional Class shares of the fund are 100% no-load, so you pay no
sales charges (loads) to buy or sell shares.

ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from fund assets)
The costs of operating the fund are deducted from fund assets, which means you
pay them indirectly. These costs are deducted before computing the daily share
price or making distributions. As a result, they don't appear on your account
statement, but instead reduce the total return you receive from your fund
investment.

ANNUAL FUND OPERATING EXPENSES (AS A PERCENT OF AVERAGE NET ASSETS)

Management Fee 0.75%
Other Expenses 0.07%*
Total Annual Fund Operating Expenses 0.82%

*THE EXPENSE INFORMATION HAS BEEN RESTATED TO REFLECT CURRENT FEES.

EXAMPLE: This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the fund and reinvest all dividends and
distributions for the time periods indicated, and then redeem all of your
shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:

<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------- ---------- ------- ----------
$84 $262 $455 $1,014
</TABLE>

WHO ARE THE FUND'S INVESTMENT ADVISOR AND PORTFOLIO MANAGER?

Strong Capital Management, Inc. (Strong) is the investment advisor for the
fund. Strong provides investment management services for mutual funds and other
investment portfolios representing assets, as of March 31, 2000, of over $45
billion. Strong began conducting business in 1974. Since then, its principal
business has been providing investment advice for individuals and institutional
accounts, such as pension and profit-sharing plans, as well as mutual funds,
several of which are available through variable insurance products. Strong's
address is P.O. Box 2936, Milwaukee, WI 53201.

5
<PAGE>

RONALD C. OGNAR manages the fund. He has over 30 years of investment
experience and is a Chartered Financial Analyst. He joined Strong as a
portfolio manager in April 1993 and has managed the fund since its inception in
December 1993. For two years prior to joining Strong, he was a principal and
portfolio manager with RCM Capital Management. For approximately three years
prior to that, he was a portfolio manager at Kemper Financial Services. Mr.
Ognar began his investment career in 1968 at LaSalle National Bank after
serving two years in the U.S. Army. He received his bachelors degree in
Accounting from the University of Illinois in 1968.

OTHER IMPORTANT INFORMATION YOU SHOULD KNOW
To a limited extent, the fund may participate in the initial public offering
(IPO) market. IPOs may significantly increase a fund's total returns during
any period that the fund has a small asset base. As a fund's assets grow, any
impact of IPO investments on the fund's total return may decline.

FINANCIAL HIGHLIGHTS

This information describes investment performance of the Investor Class shares
of the fund for the periods shown. Certain information reflects financial
results for a single Investor Class share. "Total Return" shows how much an
investment in the Investor Class shares of the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. The Institutional Class shares of the fund were first offered
on February 24, 2000. These figures have been audited by
PricewaterhouseCoopers LLP, whose report, along with the fund's financial
statements, is included in the fund's annual report.

6
<PAGE>

YOUR ACCOUNT

SHARE PRICE

Your transaction price for buying, selling, or exchanging Institutional Class
shares is the net asset value per share (NAV) of that class of shares. NAV is
generally calculated as of the close of trading on the New York Stock Exchange
(usually 3:00 p.m. Central Time) every day the NYSE is open. If the NYSE
closes at any other time, or if an emergency exists, NAV may be calculated at a
different time. Your share price will be the next NAV calculated after we
accept your order.

FOREIGN SECURITIES
Some of the fund's portfolio securities may be listed on foreign exchanges that
trade on days when we do not calculate an NAV. As a result, the fund's NAV may
change on days when you will not be able to purchase or redeem shares. In
addition, a foreign exchange may not value its listed securities at the same
time that we calculate a fund's NAV. Events affecting the values of portfolio
securities that occur between the time a foreign exchange assigns a price to
the portfolio securities and the time when we calculate a fund's NAV generally
will not be reflected in the fund's NAV. These events will be reflected in the
fund's NAV when we, under the supervision of the Board of Directors of the
Strong Funds, determine that they would have a material effect on the fund's
NAV.

BUYING SHARES

Prior to your initial investment, complete and sign an application and send it
to Strong Institutional Client Services, P.O. Box 2936, Milwaukee, Wisconsin
53201-2936 or send it by facsimile to 414-359-3535. The initial investment
minimum is $1 million. The minimum initial investment minimum is waived for
registered investment advisors with a minimum initial investment of at least
$250,000. After your initial investment, additional transactions may be made
in any amount. Shares must be purchased by wire unless you use the Exchange
Option described below. To purchase by wire, place an order by calling
800-368-1683 before 3:00 p.m. Central Time. Firstar Bank Milwaukee, N.A., the
fund's agent, must receive payment by the close of the federal wire system
that day. If payment is not received by this deadline, your order may be
canceled or you may be liable for the resulting interest expenses. You should
wire federal funds as follows:

Firstar Bank Milwaukee, N.A.
777 East Wisconsin Avenue
Milwaukee, WI 53202
ABA routing number: 075000022
Account number: 112737-090
For Further Credit to: (your account number and registration)

7
<PAGE>

MULTIPLE CLASS PLAN

The fund has adopted a multiple class plan which currently permits it to offer
three classes of shares: Investor Class shares, Advisor Class shares, and
Institutional Class shares. Each class is offered at its net asset value and
is subject to fees and expenses which may differ between classes. The
principal difference between each of the classes of shares is that the Advisor
Class shares are subject to a front-end sales load and distribution fees and
expenses under a 12b-1 plan, and each class of shares is subject to different
administrative and transfer agency fees and expenses.

BROKER-DEALER
Broker-dealers, including the fund's distributor, and other intermediaries may
also from time to time sponsor or participate in promotional programs pursuant
to which investors receive incentives for establishing with the broker-dealer
or intermediary an account and/or for purchasing shares of the Strong Funds
through the account(s). Investors should contact the broker-dealer or
intermediary and consult the Statement of Additional Information for more
information about promotional programs.

SELLING SHARES

Shares must be redeemed by wire unless you use the Exchange Option described
below. The fund pays the wire fees which are a fund expense. You may redeem
shares by either telephone or written instruction.
To redeem by wire, place an order by calling Strong Institutional Client
Services at 800-368-1683 before 3:00 p.m. Central Time. The original
application must be on file with the fund's transfer agent before a redemption
will be processed. You may also redeem shares by sending a written request to
Strong Institutional Client Services, P.O. Box 2936, Milwaukee, Wisconsin
53201-2936 or sending it by facsimile to 414-359-3535. Your written request
must be signed exactly as the names of the registered owners appear on the
fund's account records, and the request must be signed by the minimum number of
persons designated on the account application that are required to effect a
redemption. Please note that any written redemption request of $50,000 or more
must be accompanied by a signature guarantee. Payment of the redemption
proceeds will be wired to the bank account(s) designated on the account
application. Redemption proceeds will ordinarily be wired the next business
day, but in no event more than seven days after receipt of the redemption.
((Side Box))
<TABLE>
<CAPTION>
<S> <C>
SIGNATURE GUARANTEES help ensure that major
transactions or changes to your account are in fact
authorized by you. For example, we require a signature
guarantee on written redemption requests for more than
$50,000. You can obtain a signature guarantee for a
nominal fee from most banks, brokerage firms, and
other financial institutions. A notary public stamp or
seal cannot be substituted for a signature guarantee.
- --------------------------------------------------------
</TABLE>

ADDITIONAL POLICIES

EXCHANGE OPTION
You may exchange your shares of the fund for shares of another Strong Fund. You
may make an exchange by calling Strong Institutional Client Services at
800-368-1683 or by sending a facsimile to 414-359-3535. Please obtain and read
the appropriate prospectus before investing in any of the Strong Funds.
Remember, an exchange of shares of one Strong Fund for those of another Strong
Fund, is considered a sale and a purchase of fund shares for tax purposes and
may result in a capital gain or loss. Some Strong Funds that you may want to
exchange into may charge a redemption fee of 0.50% to 1.00% on the sale of
shares held for less than six months. Purchases by exchange are subject to the
investment requirements and other criteria of the fund and class purchased.

ADVANCE NOTICE OF LARGE TRANSACTIONS
We strongly urge you to begin all purchases and redemptions as early in the day
as possible and to notify us at least one day in advance of transactions in
excess of $5 million. This will allow Strong to manage the fund most
effectively. When you give us this advance notice, you must provide us with
your name and account number. To protect the fund's performance and
shareholders, we discourage frequent trading in response to short-term market
fluctuations.

7
<PAGE>

TELEPHONE TRANSACTIONS

VERIFICATION OF ACCOUNT STATEMENTS

DISTRIBUTIONS

DISTRIBUTION POLICY
The fund generally pays you dividends from net investment income and
distributes any net capital gains that it realizes annually.

REINVESTMENT OF DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
Your dividends and capital gain distributions will be automatically reinvested
in additional shares, unless you choose otherwise. Your other options are to
receive checks for these payments or have them credited to your bank account
by Electronic Funds Transfer. To change the current option for payment of
dividends and capital gain distributions, please call 800-368-1683.

TAXES

YEAR-END STATEMENT
To assist you in tax preparation, after the end of each calendar year, we send
you a statement of your fund's ordinary dividends and net capital gain
distributions (Form 1099).

9
<PAGE>

Because everyone's tax situation is unique, you should consult your tax
professional for assistance.

RESERVED RIGHTS

We reserve the right to:

- - Change the minimum or maximum investment amounts.

- - Delay sending out redemption proceeds for up to seven days (this generally
only applies to very large redemptions without notice, excessive trading, or
during unusual market conditions).

- - Close any account that does not meet minimum investment requirements. We
will give you notice and 60 days to increase your balance to the required
minimum. We may waive the minimum initial investment at our discretion.

- - Reject any purchase or redemption request that does not contain all required
documentation.

- - Amend or terminate purchases-in-kind at any time.

10
<PAGE>

FOR MORE INFORMATION

More information is available upon request at no charge, including:

To request information or to ask questions:

Milwaukee, WI 53201-2936 SEC*: www.sec.gov

This prospectus is not an offer to sell securities in places other than the
United States and its territories.

Strong Growth Fund, a series of Strong Equity Funds, Inc., SEC file number
811-8100

11
<PAGE>

[Strong logo and picture of man and two children fishing]

prospectus

THE STRONG VALUE FUND

May 1, 2000

1
<PAGE>

2
<PAGE>

TABLE OF CONTENTS
Your Investment.................................................................
KEY INFORMATION.................................................................
What are the fund's goals?.....................................................1
What are the fund's principal investment strategies?...........................1
What are the main risks of investing in the fund?..............................1
What are the fund's fees and expenses?.........................................5
Who are the fund's investment advisor and portfolio managers?..................6
OTHER IMPORTANT INFORMATION YOU SHOULD KNOW....................................7
Financial Highlights...........................................................7
Your Account....................................................................
Share Price....................................................................9
Buying Shares..................................................................9
Selling Shares................................................................12
Additional Policies...........................................................14
Distributions.................................................................16
Taxes.........................................................................16
Services For Investors........................................................17
Reserved Rights...............................................................20
For More Information..................................................Back Cover

IN THIS PROSPECTUS, "WE" REFERS TO STRONG CAPITAL MANAGEMENT, INC., THE
INVESTMENT ADVISOR, ADMINISTRATOR, AND TRANSFER AGENT FOR THE STRONG FUNDS.

3
<PAGE>

YOUR INVESTMENT

KEY INFORMATION

WHAT ARE THE FUND'S GOALS?

The STRONG VALUE FUND seeks capital growth.

WHAT ARE THE FUND'S PRINCIPAL INVESTMENT STRATEGIES?

The VALUE FUND'S manager follows a four-step investment discipline. First, the
manager identifies trends or events that may serve as catalysts to increase the
value of a company or group of companies. The catalyst could be a management
change, corporate restructuring, a cyclical upturn in an industry, or a new
industry trend. Second, the manager then looks for large- and
medium-capitalization companies with strong balance sheets, experienced
management, and competitive positions. Third, the manager looks for companies
that are inexpensive relative to one or more valuation measures such as
earnings, cash flow, or asset value. The fourth step is to take a disciplined
approach to selling stocks. If a stock's price declines 15% from its average
cost and the outlook for the company has deteriorated, the manager will sell
the position.

The manager may invest 30% of assets in cash or cash-type securities
(high-quality, short-term debt securities issued by corporations, financial
institutions, or the U.S. government) as a temporary defensive position to
avoid losses during adverse market conditions. This could reduce the benefit
to the fund if the market goes up. In this case, the fund may not achieve its
investment goal.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?

GENERAL STOCK RISKS: The fund's major risks are those of investing in the stock
market. This means the fund may experience sudden, unpredictable declines in
value, as well as periods of poor performance. Because stock values go up and
down, the value of your fund's shares may go up and down. Therefore, when you
sell your investment, you may receive more or less money than you originally
invested.

VALUE-STYLE INVESTING: Different types of stocks tend to shift into and out of
favor with stock market investors depending on market and economic conditions.
Because the fund focuses on value-style stocks, its performance may at times be
better or worse than the performance of stock funds that focus on other types
of stocks, or that have a broader investment style.

MEDIUM-CAPITALIZATION COMPANIES: The fund invests in the stocks of
medium-capitalization companies. Medium-capitalization companies often have
narrower markets and more limited managerial and financial resources than
larger, more established companies. As a result, their performance can be more
volatile and they face greater risk of business failure which could increase
the volatility of the fund's portfolio.

The return information on the following pages illustrates how the fund's
performance can vary, which is one indication of the risks of investing in the
fund. Please keep in mind that the fund's past performance does not represent
how it will perform in the future. The information assumes that you reinvested
all dividends and distributions.

4
<PAGE>

CALENDAR YEAR TOTAL RETURNS

<TABLE>
<CAPTION>
<S> <C>
Year Value
1996 16.8%
1997 25.9%
1998 15.2%
1999 -2.0%
</TABLE>

BEST AND WORST QUARTERLY PERFORMANCE
(DURING THE PERIODS SHOWN ABOVE)

<TABLE>
<CAPTION>
<S> <C>
BEST QUARTER RETURN WORST QUARTER RETURN
- --------------------- ---------------------
15.5% (4th Q 1998) -10.8% (3rd Q 1998)
</TABLE>

AVERAGE ANNUAL TOTAL RETURNS

AS OF 12-31-99
FUND/INDEX 1-YEAR SINCE INCEPTION
VALUE -1.96% 13.53% (12-29-95)
S&P 500 Stock Index 21.04% 26.39%
Lipper Large-Cap Value Funds Index 10.78% 19.47%

THE S&P 500 STOCK INDEX IS AN UNMANAGED INDEX GENERALLY REPRESENTATIVE OF THE
U.S. STOCK MARKET. THE LIPPER LARGE-CAP VALUE FUNDS INDEX IS AN
EQUALLY-WEIGHTED PERFORMANCE INDEX OF THE LARGEST QUALIFYING FUNDS IN THIS
LIPPER CATEGORY.

WHAT ARE THE FUND'S FEES AND EXPENSES?

This section describes the fees and expenses that you may pay if you buy and
hold shares of the fund.

SHAREHOLDER FEES
(fees paid directly from your investment)
The fund is 100% no-load, so you pay no sales charges (loads) to buy or sell
shares.

ANNUAL FUND OPERATING EXPENSES (AS A PERCENT OF AVERAGE NET ASSETS)

Management Fee 1.00%

Other Expenses 0.36%
Total Annual Fund Operating Expenses 1.36%

4
<PAGE>

has a 5% return each year and that the fund's operating expenses remain the
same. Although your actual costs may be higher or lower, based on these
assumptions, your costs would be:

<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------ ------- ------- --------

$138 $431 $745 $1,635
- ------ ------- ------- --------
</TABLE>

WHO ARE THE FUND'S INVESTMENT ADVISOR AND PORTFOLIO MANAGERS?

SUBADVISOR FOR VALUE FUND. Sloate, Weisman, Murray and Company, Inc.
(Subadvisor) is the subadvisor for the fund under an agreement with Strong.
Under this agreement and under the supervision of the fund's Board of Directors
and Strong, the Subadvisor provides a continuous investment program for the
fund. This means the Subadvisor selects the securities the fund buys and
sells. The Subadvisor began conducting business in 1974. It provides
investment supervision to institutional investors and high net worth clients.
Its address is 540 Madison Avenue, New York, NY 10022.

LAURA J. SLOATE manages the fund. She has over 30 years of investment
experience and is a Chartered Financial Analyst. She has been the Chairman and
Chief Investment Officer of the Subadvisor since its establishment in 1974.
She has managed or co-managed the VALUE FUND since its inception in December
1995. Prior to her employment at the Subadvisor, she was a Securities Analyst
and an account executive at Scheinman Hochstin & Trott, Neuberger Berman &
Company, and Drexel Burnham & Company. She received her bachelors degree in
History from Barnard College in 1966 and her masters degree in History from
Columbia Graduate Facilities in 1966. Ms. Sloate is a principal of one of the
first woman-owned money management firms.

OTHER IMPORTANT INFORMATION YOU SHOULD KNOW

FINANCIAL HIGHLIGHTS

This information describes investment performance for the periods shown.
Certain information reflects financial results for a single fund share
outstanding for the entire period. "Total Return" shows how much your
investment in the fund would have increased (or decreased) during each period,
assuming you had reinvested all dividends and distributions. These figures
have been audited by PricewaterhouseCoopers LLP, whose report, along with the
fund's financial statements, is included in the fund's annual report.

6
<PAGE>

<TABLE>
<CAPTION>
STRONG VALUE FUND
<S> <C> <C> <C> <C>
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
SELECTED PER-SHARE DATA(a) 1999 1998 1997 1996
Net Asset Value, Beginning of Period $14.95 $13.77 $11.55 $10.00
Income From Investment Operations
Net Investment Income 0.06 0.08 0.10 0.13
Net Realized and Unrealized Gains
(Losses) on Investments (0.36) 1.97 2.86 1.55
Total from Investment Operations (0.30) 2.05 2.96 1.68
Less Distributions
From Net Investment Income (0.06) (0.07) (0.10) (0.13)
From Net Realized Gains (2.28) (0.80) (0.64) -
Total Distributions (2.34) (0.87) (0.74) (0.13)
Net Asset Value, End of Period $12.31 $14.95 $13.77 $11.55
RATIOS AND SUPPLEMENTAL DATA
Total Return -2.0% +15.2% +25.9% +16.8%
Net Assets, End of Period (In Millions) $58 $91 $94 $55
Ratio of Expenses to Average Net
Assets without Fees Paid Indirectly
by Advisor 1.4% 1.3% 1.3% 1.5%
Ratio of Expenses to Average
Net Assets 1.4% 1.3% 1.3% 1.5%
Ratio of Net Investment Income to
Average Net Assets 0.3% 0.5% 0.8% 1.5%
Portfolio Turnover Rate 103.8% 92.6% 103.0% 89.5%
</TABLE>
(a) Information presented relates to a share of capital stock of the fund
outstanding for the entire period.

1
<PAGE>

YOUR ACCOUNT

SHARE PRICE

Your transaction price for buying, selling, or exchanging shares is the net
asset value per share (NAV). NAV is generally calculated as of the close of
trading on the New York Stock Exchange (usually 3:00 p.m. Central Time) every
day the NYSE is open. If the NYSE closes at any other time, or if an emergency
exists, NAV may be calculated at a different time. Your share price will be
the next NAV calculated after we accept your order.

((Side Box))

We determine a fund's share price or NAV by dividing net assets
(the value of its investments, cash, and other assets minus the
liabilities) by the number of shares outstanding.
- ----------------------------------------------------------------
</TABLE>

BUYING SHARES

INVESTMENT MINIMUMS: When buying shares, you must meet the following
investment minimum requirements.

<TABLE>
<CAPTION>
<S> <C> <C>
INITIAL INVESTMENT MINIMUM ADDITIONAL INVESTMENT MINIMUM
- -------------------------------------- ----------------------------------- -----------------------------------
Regular accounts $2,500 $50
- -------------------------------------- ----------------------------------- -----------------------------------
Education IRA accounts $500 $50
- -------------------------------------- ----------------------------------- -----------------------------------
Other IRAs and UGMA/UTMA accounts $250 $50
- -------------------------------------- ----------------------------------- -----------------------------------
SIMPLE IRA, SEP-IRA, 403(b)(7), Keogh, the lesser of $250 or $25 per month $50
Pension Plan, and Profit Sharing Plan
accounts
- -------------------------------------- ----------------------------------- -----------------------------------
</TABLE>

PLEASE REMEMBER ...
- - If you use an Automatic Investment Plan, we waive the initial investment
minimum to open an account and the additional investment minimum is $50.

- - You cannot use an Automatic Investment Plan with an Education IRA.

- - If you open a qualified retirement plan account where we or one of our
alliance partners provides administrative services, there is no initial
investment minimum.

7
<PAGE>

BUYING INSTRUCTIONS
You can buy shares in several ways.

MAIL

EXCHANGE OPTION

Sign up for the exchange option when you open your account. To add this
option to an existing account, visit the Investor Services area at
WWW.ESTRONG.COM or call 800-368-3863 for a Shareholder Account Options Form.

((Side Box))
QUESTIONS?
Call 800-368-3863
24 hours a day
7 days a week

EXPRESS PURCHASESM

You can make additional investments to your existing account directly from
your bank account. If you didn't establish this option when you opened your
account, visit the Investor Services area at WWW.ESTRONG.COM or call us at
800-368-3863 for a Shareholder Account Options Form.

STRONG DIRECT(R)

You can use Strong Direct(R) to add to your investment from your bank account
or to exchange shares between Strong Funds by calling 800-368-7550. See
"Services for Investors" for more information.

7
<PAGE>

STRONG NETDIRECT(R)

You can use Strong netDirect(R) at WWW.ESTRONG.COM, to add to your investment
from your bank account or to exchange shares between Strong Funds. See
"Services for Investors" for more information.

INVESTOR CENTERS

You can visit our Investor Center in Menomonee Falls, Wisconsin, near Milwaukee.
Call 800-368-3863 for hours and directions, or for the location of our other
Investor Centers.

WIRE

Call 800-368-3863 for instructions before wiring funds either to open or add
to an account. This helps to ensure that your account will be credited
promptly and correctly.

AUTOMATIC INVESTMENT SERVICES

See "Services for Investors" for detailed information on all of our automatic
investment services. You can sign up for these plans when you open your
account or you can add them later by visiting the Investor Services area at
WWW.ESTRONG.COM or by calling 800-368-3863 for the appropriate form.

BROKER-DEALER

You may purchase shares through a broker-dealer or other intermediary who may
charge you a fee. Broker-dealers, including the fund's distributor, and other
intermediaries may also from time to time sponsor or participate in promotional
programs pursuant to which investors receive incentives for establishing with
the broker-dealer or intermediary an account and/or for purchasing shares of
the Strong Funds through the account(s). Investors should contact the
broker-dealer or intermediary and consult the Statement of Additional
Information for more information about promotional programs.

PLEASE REMEMBER . . .

We only accept checks payable to Strong.

- - We do not accept cash, third-party checks, credit card convenience checks, or
checks drawn on banks outside the U.S.

- - You will be charged $20 for every check, wire, or Electronic Funds Transfer
returned unpaid.

9
<PAGE>

SELLING SHARES

SELLING INSTRUCTIONS
You can sell shares in several ways.

REDEMPTION OPTION

Sign up for the redemption option when you open your account or add it later
by visiting the Investor Services area at WWW.ESTRONG.COM or by calling
800-368-3863 to request a Shareholder Account Options Form. With this option,
you may sell shares by phone or via the Internet and receive the proceeds in
one of three ways:

(1) We can mail a check to your account's address. Checks will not be
forwarded by the Postal Service, so please notify us if your address has
changed.

(2) We can transmit the proceeds by Electronic Funds Transfer to a properly
pre-authorized bank account. The proceeds usually will arrive at your bank
two banking days after we process your redemption.

(3) For a $10 fee, we can transmit the proceeds by wire to a properly
pre-authorized bank account. The proceeds usually will arrive at your bank
the first banking day after we process your redemption.

STRONG DIRECT(R)

You can redeem shares through Strong Direct(R) at 800-368-7550. See "Services
for Investors" for more information.

STRONG NETDIRECT(R)

You can use Strong netDirect(R) at WWW.ESTRONG.COM, to redeem shares. See
"Services for Investors" for more information.

INVESTOR CENTERS

You can visit our Investor Center in Menomonee Falls, Wisconsin, near
Milwaukee. Call 800-368-3863 for hours and directions, or for the location of
our other Investor Centers.

AUTOMATIC INVESTMENT SERVICES

BROKER-DEALER
You may sell shares through a broker-dealer or other intermediary who may
charge you a fee.

PLEASE REMEMBER ...

- - If you recently purchased shares, a redemption request on those shares
generally will not be honored until 10 days after we receive the purchase
check or electronic transaction.

- - Some transactions and requests require a signature guarantee.

((Side Box))

There may be special distribution requirements that apply to retirement
accounts. For instructions on:
- - Roth and Traditional IRA accounts, call
800-368-3863, and
- - SIMPLE IRA, SEP-IRA , 403(b)(7), Keogh, Pension Plan, Profit Sharing Plan, or
401(k) Plan accounts, call 800-368-2882.

((Side Box))
<TABLE>
<CAPTION>
<S> <C>
SIGNATURE GUARANTEES help ensure that major
transactions or changes to your account are in fact
authorized by you. For example, we require a signature
guarantee on written redemption requests for more than $50,000.
You can obtain a signature guarantee for a nominal fee
from most banks, brokerage firms, and other financial
institutions. A notary public stamp or seal cannot be
substituted for a signature guarantee.
- --------------------------------------------------------------
</TABLE>

ADDITIONAL POLICIES

TELEPHONE AND INTERNET TRANSACTIONS

PURCHASES IN KIND

You may, if we approve, purchase shares of the fund with securities that are
eligible for purchase by the fund (consistent with the fund's investment
restrictions, policies, and goal) and that have a value that is readily
ascertainable in accordance with the fund's valuation policies.

LOW BALANCE ACCOUNT FEE

VERIFICATION OF ACCOUNT STATEMENTS

DISTRIBUTIONS

DISTRIBUTION POLICY
The fund generally pays you dividends from net investment income quarterly and
distributes any net capital gains that it realizes annually.

12
<PAGE>

Fund, or have them deposited into your bank account. To change the current
option for payment of dividends and capital gain distributions, please call
800-368-3863.

TAXES

((Side Box))
<TABLE>
<CAPTION>
<S> <C>
Generally, if your investment is in a Traditional IRA or
other TAX-DEFERRED ACCOUNT, your dividends and
distributions will not be taxed at the time they are paid,
but instead at the time you withdraw them from your
account.
- ----------------------------------------------------------
</TABLE>

YEAR-END STATEMENT
To assist you in tax preparation, after the end of each calendar year, we send
you a statement of your fund's ordinary dividends and net capital gain
distributions (Form 1099).

((Side Box))

Unless your investment is in a tax-deferred retirement
account such as an IRA, YOU MAY WANT TO AVOID:
- -Investing a large amount in a fund close to the end of
the calendar year. If the fund makes a capital gain
distribution, you may receive some of your
investment back as a taxable distribution.
- -Selling shares of a mutual fund at a loss and then
investing in the same fund within 30 days before or
after the sale. This is called a WASH SALE and you will
not be allowed to claim a tax loss on the transaction.
- ---------------------------------------------------------
</TABLE>

13
<PAGE>

((Side Box))
<TABLE>
<CAPTION>
<S> <C>
COST BASIS is the amount that you paid for the shares.
When you sell shares, you subtract the cost basis from the
sale proceeds to determine whether you realized an
investment gain or loss. For example, if you bought a
share of a fund at $10 and you sold it two years later at
$11, your cost basis on the share is $10 and your gain is
$1.
- ----------------------------------------------------------
</TABLE>

Because everyone's tax situation is unique, you should consult your tax
professional for assistance.

SERVICES FOR INVESTORS

Strong provides you with a variety of services to help you manage your
investment. For more details, call 800-368-3863, 24 hours a day, 7 days a
week. These services include:

STRONG DIRECT(R) AUTOMATED TELEPHONE SYSTEM

Our 24-hour automated response system enables you to use a touch-tone phone to
access current share prices, (800-368-3550), to access fund and account
information (800-368-5550), and to make purchases, exchanges, or redemptions
among your existing accounts if you have elected these services
(800-368-7550). Passwords help to protect your account information.

ESTRONG.COM

Visit us on-line at WWW.ESTRONG.COM to access your fund's performance and
portfolio holding information. In addition to general information about
investing, our web site offers daily performance information, portfolio
manager commentaries, and information on available account options.

STRONG NETDIRECT(R)

If you are a shareholder, you may use Strong netDirect(R) to access your
account information 24 hours a day from your personal computer. Strong
netDirect(R) allows you to view account history, account balances, and recent
dividend activity, as well as to make purchases, exchanges, or redemptions
among your existing accounts if you have elected these services. Encryption
technology and passwords help to protect your account information. You may
register to use Strong netDirect(R) at WWW.ESTRONG.COM.

STRONGMAIL

If you register for StrongMail at WWW.STRONGMAIL.COM, you will receive your
fund's closing price by e-mail each business day. In addition, StrongMail
offers market news and updates throughout the day.

STRONG EXCHANGE OPTION

You may exchange shares of a fund for shares of another Strong Fund, either in
writing, by telephone, or through your personal computer, if the accounts are
identically registered (with the same name, address, and taxpayer
identification number). Please ask us for the appropriate prospectus and read
it before investing in any of the Strong Funds. Remember, an exchange of
shares of one Strong Fund for those of another Strong Fund is considered a
sale and a purchase of shares for tax purposes and may result in a capital
gain or loss. Some Strong Funds that you may want to exchange into may charge
a redemption fee of 0.50% to 1.00% on the sale of shares held for less than
six months. Purchases by exchange are subject to the investment requirements
and other criteria of the fund purchased.

STRONG AUTOMATIC INVESTMENT SERVICES
You may invest or redeem automatically in the following ways, some of which
may be subject to additional restrictions or conditions.

14
<PAGE>

AUTOMATIC INVESTMENT PLAN (AIP)
This plan allows you to make regular, automatic investments from your bank
checking or savings account.

AUTOMATIC EXCHANGE PLAN
This plan allows you to make regular, automatic exchanges from one eligible
Strong Fund to another.

PAYROLL DIRECT DEPOSIT PLAN
This plan allows you to send all or a portion of your paycheck, social
security check, military allotment, or annuity payment to the Strong Funds of
your choice.

STRONG RETIREMENT PLAN SERVICES
We offer a wide variety of retirement plans for individuals and institutions,
including large and small businesses. For information on:

- - INDIVIDUAL RETIREMENT PLANS, including Traditional IRAs and Roth IRAs, call
800-368-3863.

- - QUALIFIED RETIREMENT PLANS, including SIMPLE IRAs, SEP-IRAs, 403(b)(7)s,
Keoghs, Pension Plans, Profit Sharing Plans, and 401(k) Plans, call
800-368-2882.

SOME OF THESE SERVICES MAY BE SUBJECT TO ADDITIONAL RESTRICTIONS OR
CONDITIONS. CALL 800-368-3863 FOR MORE INFORMATION.

15
<PAGE>

RESERVED RIGHTS

We reserve the right to:

- - Refuse, change, discontinue, or temporarily suspend account services
including purchase, exchange, or telephone and Strong netDirect(R) redemption
privileges, for any reason.

- - Change the minimum or maximum investment amounts.

- - Delay sending out redemption proceeds for up to seven days (this generally
only applies to very large redemptions without notice, excessive trading, or
during unusual market conditions).

- - Reject any purchase or redemption request that does not contain all required
documentation.

15
<PAGE>

FOR MORE INFORMATION

More information is available upon request at no charge, including:

To request information or to ask questions:

BY TELEPHONE FOR HEARING-IMPAIRED (TDD)

414-359-1400 or 800-368-3863 800-999-2780

BY MAIL BY OVERNIGHT DELIVERY
Strong Funds Strong Funds
P.O. Box 2936 900 Heritage Reserve

Milwaukee, WI 53201-2936 Menomonee Falls, WI 53051

ON THE INTERNET BY E-MAIL

View on-line or download documents: [email protected]
Strong Funds: WWW.ESTRONG.COM

SEC*:WWW.SEC.GOV

This prospectus is not an offer to sell securities in places other than the
United States and its territories.

Strong Value Fund, a series of Strong Equity Funds, Inc., SEC file number:
811-8100

17
<PAGE>

STATEMENT OF ADDITIONAL INFORMATION ("SAI")

STRONG COMMON STOCK FUND, INC.
STRONG DISCOVERY FUND, INC.
STRONG ENTERPRISE FUND, A SERIES FUND OF STRONG EQUITY FUNDS, INC.
STRONG GROWTH FUND, A SERIES FUND OF STRONG EQUITY FUNDS, INC.
STRONG GROWTH 20 FUND, A SERIES FUND OF STRONG EQUITY FUNDS, INC.
STRONG MID CAP DISCIPLINED FUND, A SERIES FUND OF STRONG EQUITY FUNDS, INC.
STRONG MID CAP GROWTH FUND, A SERIES FUND OF STRONG EQUITY FUNDS, INC.
STRONG OPPORTUNITY FUND, A SERIES FUND OF STRONG OPPORTUNITY FUND, INC.
STRONG SMALL CAP VALUE FUND, A SERIES FUND OF STRONG EQUITY FUNDS, INC.
STRONG STRATEGIC GROWTH FUND, A SERIES FUND OF STRONG EQUITY FUNDS, INC.
STRONG U.S. EMERGING GROWTH FUND, A SERIES FUND OF STRONG EQUITY FUNDS, INC.
STRONG VALUE FUND, A SERIES FUND OF STRONG EQUITY FUNDS, INC.

P.O. Box 2936
Milwaukee, WI 53201
Telephone: (414) 359-1400
Toll-Free: (800) 368-3863
e-mail: [email protected]
Web Site: www.eStrong.com

Throughout this SAI, "the Fund" is intended to refer to each Fund listed above,
unless otherwise indicated. This SAI is not a Prospectus and should be read
together with the Prospectus for the Fund dated May 1, 2000. Requests for
copies of the Prospectus should be made by calling either number listed above.
The financial statements appearing in the Annual Report, which accompanies this
SAI, are incorporated into this SAI by reference.

May 1, 2000

1
<PAGE>

TABLE OF CONTENTS PAGE

INVESTMENT RESTRICTIONS........................................................4
COMPARING THE FUNDS............................................................6
INVESTMENT POLICIES AND TECHNIQUES.............................................6
Strong Common Stock Fund.......................................................6
Strong Discovery Fund..........................................................6
Strong Enterprise Fund.........................................................6
Strong Growth Fund.............................................................7
Strong Growth 20 Fund..........................................................7
Strong Mid Cap Disciplined Fund................................................7
Strong Mid Cap Growth Fund.....................................................7
Strong Opportunity Fund........................................................8
Strong Small Cap Value Fund....................................................8
Strong Strategic Growth Fund...................................................8
Strong U.S. Emerging Growth Fund...............................................8
Strong Value Fund..............................................................9
Borrowing......................................................................9
Cash Management................................................................9
Convertible Securities.........................................................9
Debt Obligations..............................................................10
Depositary Receipts...........................................................10
Derivative Instruments........................................................11
Foreign Investment Companies..................................................20
Foreign Securities............................................................20
High-Yield (High-Risk) Securities.............................................20
Illiquid Securities...........................................................22
Lending of Portfolio Securities...............................................23
Mortgage- and Asset-Backed Debt Securities....................................23
Municipal Obligations.........................................................24
Participation Interests.......................................................25
Repurchase Agreements.........................................................25
Reverse Repurchase Agreements and Mortgage Dollar Rolls.......................25
Short Sales...................................................................26
Small and Medium Companies....................................................26
Standby Commitments...........................................................26
U.S. Government Securities....................................................26
Warrants......................................................................27
When-Issued and Delayed-Delivery Securities...................................27
Zero-Coupon, Step-Coupon, and Pay-in-Kind Securities..........................27
DIRECTORS AND OFFICERS........................................................28
PRINCIPAL SHAREHOLDERS........................................................30
INVESTMENT ADVISOR............................................................31
INVESTMENT SUBADVISOR.........................................................36
U.S. Emerging Growth Fund.....................................................36
Value Fund....................................................................37
ADMINISTRATOR.................................................................37
DISTRIBUTOR...................................................................39
DISTRIBUTION PLAN.............................................................40
PORTFOLIO TRANSACTIONS AND BROKERAGE..........................................40
CUSTODIAN.....................................................................45
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT..................................45
TAXES.........................................................................48
DETERMINATION OF NET ASSET VALUE..............................................50
ADDITIONAL SHAREHOLDER INFORMATION............................................50
ORGANIZATION..................................................................54
SHAREHOLDER MEETINGS..........................................................55
PERFORMANCE INFORMATION.......................................................55
GENERAL INFORMATION...........................................................64
INDEPENDENT ACCOUNTANTS.......................................................66
LEGAL COUNSEL.................................................................67
FINANCIAL STATEMENTS..........................................................67
APPENDIX A - DEFINITION OF BOND RATINGS.......................................68
APPENDIX B - ADVISOR CLASS SHARES.............................................77

2
<PAGE>

No person has been authorized to give any information or to make any
representations other than those contained in this SAI and its corresponding
Prospectus, and if given or made, such information or representations may not
be relied upon as having been authorized. This SAI does not constitute an
offer to sell securities.

3
<PAGE>

INVESTMENT RESTRICTIONS

FUNDAMENTAL INVESTMENT LIMITATIONS

The following are the Fund's fundamental investment limitations which, along
with the Fund's investment objective (which is described in the Prospectus),
cannot be changed without shareholder approval. To obtain approval, a majority
of the Fund's outstanding voting shares must vote for the change. A majority
of the Fund's outstanding voting securities means the vote of the lesser of:
(1) 67% or more of the voting securities present, if more than 50% of the
outstanding voting securities are present or represented, or (2) more than 50%
of the outstanding voting shares.

Unless indicated otherwise below, the Fund:

1. May not with respect to 75% of its total assets, purchase the securities
of any issuer (except securities issued or guaranteed by the U.S. government or
its agencies or instrumentalities) if, as a result, (1) more than 5% of the
Fund's total assets would be invested in the securities of that issuer, or (2)
the Fund would hold more than 10% of the outstanding voting securities of that
issuer.

2. May (1) borrow money from banks and (2) make other investments or engage
in other transactions permissible under the Investment Company Act of 1940
("1940 Act") which may involve a borrowing, provided that the combination of
(1) and (2) shall not exceed 33 1/3% of the value of the Fund's total assets
(including the amount borrowed), less the Fund's liabilities (other than
borrowings), except that the Fund may borrow up to an additional 5% of its
total assets (not including the amount borrowed) from a bank for temporary or
emergency purposes (but not for leverage or the purchase of investments). The
Fund may also borrow money from the other Strong Funds or other persons to the
extent permitted by applicable law.

3. May not issue senior securities, except as permitted under the 1940 Act.

4. May not act as an underwriter of another issuer's securities, except to
the extent that the Fund may be deemed to be an underwriter within the meaning
of the Securities Act of 1933 in connection with the purchase and sale of
portfolio securities.

5. May not purchase or sell physical commodities unless acquired as a
result of ownership of securities or other instruments (but this shall not
prevent the Fund from purchasing or selling options, futures contracts, or
other derivative instruments, or from investing in securities or other
instruments backed by physical commodities).

6. May not make loans if, as a result, more than 33 1/3% of the Fund's
total assets would be lent to other persons, except through (1) purchases of
debt securities or other debt instruments, or (2) engaging in repurchase
agreements.

7. May not purchase the securities of any issuer if, as a result, more than
25% of the Fund's total assets would be invested in the securities of issuers,
the principal business activities of which are in the same industry.

8. May not purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not prohibit the
Fund from purchasing or selling securities or other instruments backed by real
estate or of issuers engaged in real estate activities).

9. May, notwithstanding any other fundamental investment policy or
restriction, invest all of its assets in the securities of a single open-end
management investment company with substantially the same fundamental
investment objective, policies, and restrictions as the Fund.

With respect to Growth 20 Fund, Fundamental Policy No. 1 does not apply because
the Fund is nondiversified.

4
<PAGE>

NON-FUNDAMENTAL OPERATING POLICIES

The following are the Fund's non-fundamental operating policies which may be
changed by the Fund's Board of Directors without shareholder approval.

Unless indicated otherwise below, the Fund may not:

1. Sell securities short, unless the Fund owns or has the right to obtain
securities equivalent in kind and amount to the securities sold short, or
unless it covers such short sale as required by the current rules and positions
of the Securities and Exchange Commission ("SEC") or its staff, and provided
that transactions in options, futures contracts, options on futures contracts,
or other derivative instruments are not deemed to constitute selling securities
short.

2. Purchase securities on margin, except that the Fund may obtain such
short-term credits as are necessary for the clearance of transactions; and
provided that margin deposits in connection with futures contracts, options on
futures contracts, or other derivative instruments shall not constitute
purchasing securities on margin.

3. Invest in illiquid securities if, as a result of such investment, more
than 15% (10% with respect to a money fund) of its net assets would be invested
in illiquid securities, or such other amounts as may be permitted under the
1940 Act.

4. Purchase securities of other investment companies except in compliance
with the 1940 Act and applicable state law.

5. Invest all of its assets in the securities of a single open-end
investment management company with substantially the same fundamental
investment objective, restrictions and policies as the Fund.

6. Engage in futures or options on futures transactions which are
impermissible pursuant to Rule 4.5 under the Commodity Exchange Act and, in
accordance with Rule 4.5, will use futures or options on futures transactions
solely for bona fide hedging transactions (within the meaning of the Commodity
Exchange Act), provided, however, that the Fund may, in addition to bona fide
hedging transactions, use futures and options on futures transactions if the
aggregate initial margin and premiums required to establish such positions,
less the amount by which any such options positions are in the money (within
the meaning of the Commodity Exchange Act), do not exceed 5% of the Fund's net
assets.

7. Borrow money except (1) from banks or (2) through reverse repurchase
agreements or mortgage dollar rolls, and will not purchase securities when bank
borrowings exceed 5% of its total assets.

8. Make any loans other than loans of portfolio securities, except through
(1) purchases of debt securities or other debt instruments, or (2) engaging in
repurchase agreements.

Unless noted otherwise, if a percentage restriction is adhered to at the time
of investment, a later increase or decrease in percentage resulting from a
change in the Fund's assets (I.E. due to cash inflows or redemptions) or in
market value of the investment or the Fund's assets will not constitute a
violation of that restriction.

5
<PAGE>

COMPARING THE FUNDS

<TABLE>
<CAPTION>
<S> <C> <C> <C>
FUND ANTICIPATED EQUITY EXPOSURE MAXIMUM DEBT EXPOSURE FOREIGN SECURITIES
Common Stock 80-100% 20% Up to 25%
Discovery 0-100% 100% Up to 25%
Enterprise 80-100% 20% Up to 25%
Growth 65-100% 35% Up to 25%
Growth 20 65-100% 35% Up to 25%
Mid Cap Disciplined 70-100% 30% Up to 25%
Mid Cap Growth 80-100% 20% Up to 25%
Opportunity 70-100% 30% Up to 25%
Small Cap Value 80-100% 20% Up to 25%
Strategic Growth 80-100% 20% Up to 25%
U. S. Emerging Growth 65-100% 35% Up to 25%
Value 70-100% 30% Up to 10%
- ---------------------- --------------------------- ----------------------- ----------------------
</TABLE>

INVESTMENT POLICIES AND TECHNIQUES

STRONG COMMON STOCK FUND

- - The Fund will invest at least 80% of its net assets in equity securities,
including common stocks (which must constitute at least 65% of its total
assets), preferred stocks, and securities that are convertible into common or
preferred stocks, such as warrants and convertible bonds. Under normal market
conditions, the Fund expects to be fully invested in equity securities.
- - The Fund may, however, invest up to 20% of its net assets in debt
obligations, including intermediate- to long-term corporate or U.S.
government debt securities and, when the Advisor determines that market
conditions warrant a temporary defensive position, it may use that allowance
to invest in cash and short-term fixed-income securities.
- - The Fund may invest up to 5% of its net assets in non-investment-grade debt
obligations.
- - The Fund may invest up to 25% of its net assets in foreign securities,
including both direct investments and investments made through depositary
receipts.

STRONG DISCOVERY FUND

- - The Fund normally emphasizes equity securities, although it has the
flexibility to invest in any type of security that the Advisor believes has
the potential for capital appreciation. The Fund may invest up to 100% of its
total assets in equity securities, including common stocks, preferred stocks,
and securities that are convertible into common or preferred stocks, such as
warrants and convertible bonds.

- - The Fund may also invest up to 100% of its total assets in debt obligations,
including intermediate- to long-term corporate or U.S. government debt
securities. When the Advisor determines that market conditions warrant a
temporary defensive position, the Fund may invest without limitation in cash
and short-term fixed-income securities.
- - The Fund may invest up to 5% of its net assets in non-investment-grade debt
obligations.
- - The Fund may invest up to 25% of its net assets in foreign securities,
including both direct investments and investments made through depositary
receipts.

STRONG ENTERPRISE FUND

- - Under normal market conditions, the Fund will invest at least 80% of its net
assets in equity securities, including common stocks, preferred stocks, and
securities that are convertible into common or preferred stocks, such as
warrants and convertible bonds. Although the Fund will primarily invest in
the equity securities of small and mid-size companies, it may invest in
companies of any capitalization range.
- - The Fund may invest up to 20% of its total assets in debt obligations,
including intermediate- to long-term corporate or U.S. government debt
securities. When the Advisor determines that market conditions warrant a
temporary defensive position, the Fund may invest without limitation in cash
and short-term fixed-income securities.
- - The Fund may invest up to 5% of its net assets in non-investment-grade debt
obligations.

6
<PAGE>

- - The Fund may invest up to 25% of its net assets in foreign securities,
including both direct investments and investments made through depositary
receipts.

STRONG GROWTH FUND

- - Under normal market conditions, the Fund will invest at least 65% of its
total assets in equity securities, including common stocks, preferred stocks,
and securities that are convertible into common or preferred stocks, such as
warrants and convertible bonds. While the emphasis of the Fund is clearly on
equity securities, the Fund may invest a limited portion of its assets in
debt obligations when the Advisor perceives that they are more attractive
than stocks on a long-term basis.
- - The Fund may invest up to 35% of its total assets in debt obligations,
including intermediate- to long-term corporate or U.S. government debt
securities. When the Advisor determines that market conditions warrant a
temporary defensive position, the Fund may invest without limitation in cash
and short-term fixed-income securities.
- - The Fund may invest up to 5% of its net assets in non-investment-grade debt
obligations.
- - The Fund may invest up to 25% of its net assets in foreign securities,
including both direct investments and investments made through depositary
receipts.

STRONG GROWTH 20 FUND
- - Under normal market conditions, the Fund will invest at least 65% of its
total assets in equity securities, including common stocks, preferred stocks,
and securities that are convertible into common or preferred stocks, such as
warrants and convertible bonds. While the emphasis of the Fund is clearly on
equity securities, the Fund may invest a limited portion of its assets in
debt obligations when the Advisor perceives that they are more attractive
than stocks on a long-term basis.
- - The Fund may invest up to 35% of its total assets in debt obligations,
including intermediate- to long-term corporate or U.S. government debt
securities. When the Advisor determines that market conditions warrant a
temporary defensive position, the Fund may invest without limitation in cash
and short-term fixed-income securities.
- - The Fund may invest up to 5% of its net assets in non-investment-grade debt
obligations.
- - The Fund may invest up to 25% of its net assets in foreign securities,
including both direct investments and investments made through depositary
receipts.

STRONG MID CAP DISCIPLINED FUND

- - The Fund will invest at least 70% of its net assets in equity securities,
including common stocks, preferred stocks, and securities that are
convertible into common or preferred stocks, such as warrants and convertible
bonds. Under normal market conditions, the Fund expects to be fully invested
in equities. At least 65% of the Fund's total assets will normally be
invested in equity securities of medium market capitalization companies,
which for the purposes of this Fund, are those companies with a market
capitalization substantially similar to that of companies in the S&P MidCap
400 Index at the time of the Fund's investment. In general,
medium-capitalization companies often involve greater risks than investments
in established companies.

- - The Fund may, however, invest up to 30% of its net assets in debt
obligations, including intermediate- to long-term corporate or U.S.
government debt securities and, when the Advisor determines that market
conditions warrant a temporary defensive position, it may use that allowance
to invest in cash and short-term fixed-income securities.
- - Although these debt obligations primarily will be investment grade, the Fund
may invest up to 5% of its net assets in non-investment-grade debt
obligations.
- - The Fund may invest up to 25% of its net assets in foreign securities,
including both direct investments and investments made through depositary
receipts.

STRONG MID CAP GROWTH FUND

- - The Fund will invest at least 80% of its net assets in equity securities,
including common stocks, preferred stocks, and securities that are
convertible into common or preferred stocks, such as warrants and convertible
bonds. At least 65% of the Fund's total assets will normally be invested in
equity securities of medium market capitalization companies, which for the
purposes of this Fund, are those companies with a market capitalization
substantially similar to that of companies in the S&P MidCap 400 Index at the
time of the Fund's investment.

7
<PAGE>

- - The Fund may invest up to 5% of its net assets in non-investment-grade debt
obligations.
- - The Fund may invest up to 25% of its net assets in foreign securities,
including both direct investments and investments made through depositary
receipts.

STRONG OPPORTUNITY FUND

- - The Fund will invest at least 70% of its net assets in equity securities,
including common stocks, preferred stocks, and securities that are
convertible into common or preferred stocks, such as warrants and convertible
bonds. Under normal market conditions, the Fund expects to be fully invested
in equities.
- - The Fund may, however, invest up to 30% of its net assets in debt
obligations, including intermediate- to long-term corporate or U.S.
government debt securities and, when the Advisor determines that market
conditions warrant a temporary defensive position, it may use that allowance
to invest in cash and short-term fixed-income securities.
- - The Fund may invest up to 5% of its net assets in non-investment-grade debt
obligations.
- - The Fund may invest up to 25% of its net assets in foreign securities,
including both direct investments and investments made through depositary
receipts.

STRONG SMALL CAP VALUE FUND

- - The Fund will invest at least 80% of its net assets in equity securities,
including common stocks, preferred stocks, and securities that are
convertible into common or preferred stocks, such as warrants and convertible
bonds. At least 65% of the Fund's total assets will normally be invested in
equity securities of small market capitalization companies, which for the
purposes of this Fund, are those companies with a market capitalization
substantially similar to that of companies in the Russell 2500 Index at the
time of the Fund's investment. In general, smaller-capitalization companies
often involve greater risks than investments in established companies.

- - The Fund may invest up to 20% of its net assets in debt obligations,
including intermediate- to long-term corporate or U.S. government debt
securities. When the Advisor determines that market conditions warrant a
temporary defensive position, the Fund may invest without limitation in cash
and short-term fixed-income securities.
- - The Fund may invest up to 5% of its net assets in non-investment-grade debt
obligations.
- - The Fund may invest up to 25% of its net assets in foreign securities,
including both direct investments and investments made through depositary
receipts.

STRONG STRATEGIC GROWTH FUND

- - Under normal market conditions, the Fund will invest at least 80% of its net
assets in equity securities, including common stocks, preferred stocks, and
securities that are convertible into common or preferred stocks, such as
warrants and convertible bonds.
- - The Fund may invest up to 20% of its net assets in debt obligations,
including intermediate- to long-term corporate or U.S. government debt
securities. When the Advisor determines that market conditions warrant a
temporary defensive position, the Fund may invest without limitation in cash
and short-term fixed-income securities.
- - Although the debt obligations in which it invests will be primarily
investment grade, the Fund may invest up to 5% of its net assets in
non-investment-grade debt obligations.
- - The Fund may invest up to 25% of its net assets in foreign securities,
including both direct investments and investments made through depositary
receipts.
- - The Fund may invest up to 10% of its net assets in equity real estate
investment trusts ("REITs").

STRONG U.S. EMERGING GROWTH FUND

- - Under normal market conditions, the Fund will invest at least 65% of its
total assets in equity securities of U.S. issuers that the Advisor believes
have substantial potential for high long-term growth, including common
stocks, preferred stocks, and securities that are convertible into common or
preferred stocks, such as warrants and convertible bonds. While the emphasis
of the Fund is clearly on equity securities, the Fund may invest a limited
portion of its assets in debt obligations when the Advisor perceives that
they are more attractive than stocks on a long-term basis.
- - The Fund may invest up to 35% of its total assets in debt obligations,
including intermediate- to long-term corporate or U.S. government debt
securities. When the Advisor determines that market conditions warrant a
temporary defensive position, the Fund may invest without limitation in cash
and short-term fixed-income securities.

8
<PAGE>

- - Although these debt obligations primarily will be investment grade, the Fund
may invest up to 5% of its net assets in non-investment-grade debt
obligations.
- - The Fund may invest up to 25% of its net assets in foreign securities,
including both direct investments and investments made through depositary
receipts.

STRONG VALUE FUND

- - The Fund will invest at least 70% of its net assets in equity securities,
including common stocks, preferred stocks, and securities that are
convertible into common or preferred stocks, such as warrants and convertible
bonds. Under normal market conditions, the Fund expects to be fully invested
in equities.
- - The Fund may, however, invest up to 30% of its net assets in debt
obligations, including intermediate- to long-term corporate or U.S.
government debt securities and, when the Subadvisor determines that market
conditions warrant a temporary defensive position, it may use that allowance
to invest in cash and short-term fixed-income securities.
- - The Fund may invest up to 5% of its net assets in non-investment-grade debt
obligations.
- - The Fund does not intend to invest directly in foreign securities; however,
it may invest up to 10% of its net assets in foreign securities in domestic
markets through depositary receipts.

The following information supplements the discussion of the Fund's investment
objective, policies, and techniques described in the Prospectus.

BORROWING

The Fund may borrow money from banks and make other investments or engage in
other transactions permissible under the 1940 Act which may be considered a
borrowing (such as mortgage dollar rolls and reverse repurchase agreements).
However, the Fund may not purchase securities when bank borrowings exceed 5% of
the Fund's total assets. Presently, the Fund only intends to borrow from banks
for temporary or emergency purposes.

The Fund has established a line-of-credit ("LOC") with certain banks by which
it may borrow funds for temporary or emergency purposes. A borrowing is
presumed to be for temporary or emergency purposes if it is repaid by the Fund
within 60 days and is not extended or renewed. The Fund intends to use the LOC
to meet large or unexpected redemptions that would otherwise force the Fund to
liquidate securities under circumstances which are unfavorable to the Fund's
remaining shareholders. The Fund pays a commitment fee to the banks for the
LOC.

CASH MANAGEMENT

The Fund may invest directly in cash and short-term fixed-income securities,
including, for this purpose, shares of one or more money market funds managed
by Strong Capital Management, Inc., the Fund's investment advisor ("Advisor")
(collectively, the "Strong Money Funds"). The Strong Money Funds seek current
income, a stable share price of $1.00, and daily liquidity. All money market
instruments can change in value when interest rates or an issuer's
creditworthiness change dramatically. The Strong Money Funds cannot guarantee
that they will always be able to maintain a stable net asset value of $1.00 per
share.

CONVERTIBLE SECURITIES

Convertible securities are bonds, debentures, notes, preferred stocks, or other
securities that may be converted into or exchanged for a specified amount of
common stock of the same or a different issuer within a particular period of
time at a specified price or formula. A convertible security entitles the
holder to receive interest normally paid or accrued on debt or the dividend
paid on preferred stock until the convertible security matures or is redeemed,
converted, or exchanged. Convertible securities have unique investment
characteristics in that they generally (1) have higher yields than common
stocks, but lower yields than comparable non-convertible securities, (2) are
less subject to fluctuation in value than the underlying stock since they have
fixed income characteristics, and (3) provide the potential for capital
appreciation if the market price of the underlying common stock increases.
Most convertible securities currently are issued by U.S. companies, although a
substantial Eurodollar convertible securities market has developed, and the
markets for convertible securities denominated in local currencies are
increasing.

The value of a convertible security is a function of its "investment value"
(determined by its yield in comparison with the yields of other securities of
comparable maturity and quality that do not have a conversion privilege) and
its "conversion value" (the

9
<PAGE>

security's worth, at market value, if converted into the underlying common
stock). The investment value of a convertible security is influenced by
changes in interest rates, with investment value declining as interest rates
increase and increasing as interest rates decline. The credit standing of the
issuer and other factors also may have an effect on the convertible security's
investment value. The conversion value of a convertible security is determined
by the market price of the underlying common stock. If the conversion value is
low relative to the investment value, the price of the convertible security is
governed principally by its investment value. Generally, the conversion value
decreases as the convertible security approaches maturity. To the extent the
market price of the underlying common stock approaches or exceeds the
conversion price, the price of the convertible security will be increasingly
influenced by its conversion value. A convertible security generally will sell
at a premium over its conversion value by the extent to which investors place
value on the right to acquire the underlying common stock while holding a fixed
income security.

A convertible security may be subject to redemption at the option of the issuer
at a price established in the convertible security's governing instrument. If
a convertible security is called for redemption, the Fund will be required to
permit the issuer to redeem the security, convert it into the underlying common
stock, or sell it to a third party.

DEBT OBLIGATIONS

The Fund may invest a portion of its assets in debt obligations. Issuers of
debt obligations have a contractual obligation to pay interest at a specified
rate on specified dates and to repay principal on a specified maturity date.
Certain debt obligations (usually intermediate- and long-term bonds) have
provisions that allow the issuer to redeem or "call" a bond before its
maturity. Issuers are most likely to call such securities during periods of
falling interest rates and the Fund may have to replace such securities with
lower yielding securities, which could result in a lower return for the Fund.

PRICE VOLATILITY. The market value of debt obligations is affected primarily
by changes in prevailing interest rates. The market value of a debt obligation
generally reacts inversely to interest-rate changes, meaning, when prevailing
interest rates decline, an obligation's price usually rises, and when
prevailing interest rates rise, an obligation's price usually declines.

MATURITY. In general, the longer the maturity of a debt obligation, the higher
its yield and the greater its sensitivity to changes in interest rates.
Conversely, the shorter the maturity, the lower the yield but the greater the
price stability. Commercial paper is generally considered the shortest
maturity form of debt obligation.

CREDIT QUALITY. The values of debt obligations may also be affected by changes
in the credit rating or financial condition of their issuers. Generally, the
lower the quality rating of a security, the higher the degree of risk as to the
payment of interest and return of principal. To compensate investors for
taking on such increased risk, those issuers deemed to be less creditworthy
generally must offer their investors higher interest rates than do issuers with
better credit ratings.

In conducting its credit research and analysis, the Advisor considers both
qualitative and quantitative factors to evaluate the creditworthiness of
individual issuers. The Advisor also relies, in part, on credit ratings
compiled by a number of Nationally Recognized Statistical Rating Organizations
("NRSROs").

DEPOSITARY RECEIPTS

The Fund may invest in foreign securities by purchasing depositary receipts,
including American Depositary Receipts ("ADRs") and European Depositary
Receipts ("EDRs"), or other securities convertible into securities of foreign
issuers. These securities may not necessarily be denominated in the same
currency as the securities into which they may be converted. Generally, ADRs,
in registered form, are denominated in U.S. dollars and are designed for use in
the U.S. securities markets, while EDRs, in bearer form, may be denominated in
other currencies and are designed for use in the European securities markets.
ADRs are receipts typically issued by a U.S. bank or trust company evidencing
ownership of the underlying securities. EDRs are European receipts evidencing
a similar arrangement. For purposes of the Fund's investment policies, ADRs
and EDRs are deemed to have the same classification as the underlying
securities they represent, except that ADRs and EDRs shall be treated as
indirect foreign investments. For example, an ADR or EDR representing
ownership of common stock will be treated as common stock. Depositary receipts
do not eliminate all of the risks associated with directly investing in the
securities of foreign issuers.

ADR facilities may be established as either "unsponsored" or "sponsored." While
ADRs issued under these two types of facilities are in some respects similar,
there are distinctions between them relating to the rights and obligations of
ADR holders and the practices of market participants.

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A depositary may establish an unsponsored facility without participation by (or
even necessarily the permission of) the issuer of the deposited securities,
although typically the depositary requests a letter of non-objection from such
issuer prior to the establishment of the facility. Holders of unsponsored ADRs
generally bear all the costs of such facility. The depositary usually charges
fees upon the deposit and withdrawal of the deposited securities, the
conversion of dividends into U.S. dollars, the disposition of non-cash
distributions, and the performance of other services. The depositary of an
unsponsored facility frequently is under no obligation to pass through voting
rights to ADR holders in respect of the deposited securities. In addition, an
unsponsored facility is generally not obligated to distribute communications
received from the issuer of the deposited securities or to disclose material
information about such issuer in the U.S. and there may not be a correlation
between such information and the market value of the depositary receipts.

Sponsored ADR facilities are created in generally the same manner as
unsponsored facilities, except that the issuer of the deposited securities
enters into a deposit agreement with the depositary. The deposit agreement
sets out the rights and responsibilities of the issuer, the depositary, and the
ADR holders. With sponsored facilities, the issuer of the deposited securities
generally will bear some of the costs relating to the facility (such as
dividend payment fees of the depositary), although ADR holders continue to bear
certain other costs (such as deposit and withdrawal fees). Under the terms of
most sponsored arrangements, depositories agree to distribute notices of
shareholder meetings and voting instructions, and to provide shareholder
communications and other information to the ADR holders at the request of the
issuer of the deposited securities.

DERIVATIVE INSTRUMENTS

IN GENERAL. The Fund may use derivative instruments for any lawful purpose
consistent with its investment objective such as hedging or managing risk.
Derivative instruments are commonly defined to include securities or contracts
whose values depend on (or "derive" from) the value of one or more other
assets, such as securities, currencies, or commodities. These "other assets"
are commonly referred to as "underlying assets."

A derivative instrument generally consists of, is based upon, or exhibits
characteristics similar to OPTIONS or FORWARD CONTRACTS. Options and forward
contracts are considered to be the basic "building blocks" of derivatives. For
example, forward-based derivatives include forward contracts, swap contracts,
as well as exchange-traded futures. Option-based derivatives include privately
negotiated, over-the-counter ("OTC") options (including caps, floors, collars,
and options on forward and swap contracts) and exchange-traded options on
futures. Diverse types of derivatives may be created by combining options or
forward contracts in different ways, and by applying these structures to a wide
range of underlying assets.

An option is a contract in which the "holder" (the buyer) pays a certain amount
("premium") to the "writer" (the seller) to obtain the right, but not the
obligation, to buy from the writer (in a "call") or sell to the writer (in a
"put") a specific asset at an agreed upon price at or before a certain time.
The holder pays the premium at inception and has no further financial
obligation. The holder of an option-based derivative generally will benefit
from favorable movements in the price of the underlying asset but is not
exposed to corresponding losses due to adverse movements in the value of the
underlying asset. The writer of an option-based derivative generally will
receive fees or premiums but generally is exposed to losses due to changes in
the value of the underlying asset.

A forward is a sales contract between a buyer (holding the "long" position) and
a seller (holding the "short" position) for an asset with delivery deferred
until a future date. The buyer agrees to pay a fixed price at the agreed
future date and the seller agrees to deliver the asset. The seller hopes that
the market price on the delivery date is less than the agreed upon price, while
the buyer hopes for the contrary. The change in value of a forward-based
derivative generally is roughly proportional to the change in value of the
underlying asset.

HEDGING. The Fund may use derivative instruments to protect against possible
adverse changes in the market value of securities held in, or are anticipated
to be held in, its portfolio. Derivatives may also be used to "lock-in"
realized but unrecognized gains in the value of its portfolio securities.
Hedging strategies, if successful, can reduce the risk of loss by wholly or
partially offsetting the negative effect of unfavorable price movements in the
investments being hedged. However, hedging strategies can also reduce the
opportunity for gain by offsetting the positive effect of favorable price
movements in the hedged investments. To the extent that a hedge matures prior
to or after the disposition of the investment subject to the hedge, any gain or
loss on the hedge will be realized earlier or later than any offsetting gain or
loss on the hedged investment.

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MANAGING RISK. The Fund may also use derivative instruments to manage the
risks of its portfolio. Risk management strategies include, but are not
limited to, facilitating the sale of portfolio securities, managing the
effective maturity or duration of debt obligations in its portfolio,
establishing a position in the derivatives markets as a substitute for buying
or selling certain securities, or creating or altering exposure to certain
asset classes, such as equity, debt, or foreign securities. The use of
derivative instruments may provide a less expensive, more expedient or more
specifically focused way to invest than "traditional" securities (I.E., stocks
or bonds) would.

EXCHANGE AND OTC DERIVATIVES. Derivative instruments may be exchange-traded or
traded in OTC transactions between private parties. Exchange-traded
derivatives are standardized options and futures contracts traded in an auction
on the floor of a regulated exchange. Exchange contracts are generally very
liquid. The exchange clearinghouse is the counterparty of every contract.
Thus, each holder of an exchange contract bears the credit risk of the
clearinghouse (and has the benefit of its financial strength) rather than that
of a particular counterparty. OTC transactions are subject to additional
risks, such as the credit risk of the counterparty to the instrument, and are
less liquid than exchange-traded derivatives since they often can only be
closed out with the other party to the transaction.

RISKS AND SPECIAL CONSIDERATIONS. The use of derivative instruments involves
risks and special considerations as described below. Risks pertaining to
particular derivative instruments are described in the sections that follow.

(1) MARKET RISK. The primary risk of derivatives is the same as the risk
of the underlying assets, namely that the value of the underlying asset may go
up or down. Adverse movements in the value of an underlying asset can expose
the Fund to losses. Derivative instruments may include elements of leverage
and, accordingly, the fluctuation of the value of the derivative instrument in
relation to the underlying asset may be magnified. The successful use of
derivative instruments depends upon a variety of factors, particularly the
ability of the Advisor to predict movements of the securities, currencies, and
commodity markets, which requires different skills than predicting changes in
the prices of individual securities. There can be no assurance that any
particular strategy adopted will succeed. The Advisor's decision to engage in
a derivative instrument will reflect its judgment that the derivative
transaction will provide value to the Fund and its shareholders and is
consistent with the Fund's objectives, investment limitations, and operating
policies. In making such a judgment, the Advisor will analyze the benefits and
risks of the derivative transaction and weigh them in the context of the Fund's
entire portfolio and investment objective.

(2) CREDIT RISK. The Fund will be subject to the risk that a loss may be
sustained as a result of the failure of a counterparty to comply with the terms
of a derivative instrument. The counterparty risk for exchange-traded
derivative instruments is generally less than for privately negotiated or OTC
derivative instruments, since generally a clearing agency, which is the issuer
or counterparty to each exchange-traded instrument, provides a guarantee of
performance. For privately negotiated instruments, there is no similar
clearing agency guarantee. In all transactions, the Fund will bear the risk
that the counterparty will default, and this could result in a loss of the
expected benefit of the derivative transaction and possibly other losses. The
Fund will enter into transactions in derivative instruments only with
counterparties that the Advisor reasonably believes are capable of performing
under the contract.

(3) CORRELATION RISK. When a derivative transaction is used to completely
hedge another position, changes in the market value of the combined position
(the derivative instrument plus the position being hedged) result from an
imperfect correlation between the price movements of the two instruments. With
a perfect hedge, the value of the combined position remains unchanged for any
change in the price of the underlying asset. With an imperfect hedge, the
values of the derivative instrument and its hedge are not perfectly correlated.
Correlation risk is the risk that there might be imperfect correlation, or even
no correlation, between price movements of an instrument and price movements of
investments being hedged. For example, if the value of a derivative
instruments used in a short hedge (such as writing a call option, buying a put
option, or selling a futures contract) increased by less than the decline in
value of the hedged investments, the hedge would not be perfectly correlated.
Such a lack of correlation might occur due to factors unrelated to the value of
the investments being hedged, such as speculative or other pressures on the
markets in which these instruments are traded. The effectiveness of hedges
using instruments on indices will depend, in part, on the degree of correlation
between price movements in the index and price movements in the investments
being hedged.

(4) LIQUIDITY RISK. Derivatives are also subject to liquidity risk.
Liquidity risk is the risk that a derivative instrument cannot be sold, closed
out, or replaced quickly at or very close to its fundamental value. Generally,
exchange contracts are very liquid because the exchange clearinghouse is the
counterparty of every contract. OTC transactions are less liquid than
exchange-traded derivatives since they often can only be closed out with the
other party to the transaction. The Fund might be required by applicable
regulatory requirement to maintain assets as "cover," maintain segregated
accounts, and/or make margin payments

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when it takes positions in derivative instruments involving obligations to
third parties (I.E., instruments other than purchased options). If the Fund
was unable to close out its positions in such instruments, it might be required
to continue to maintain such assets or accounts or make such payments until the
position expired, matured, or was closed out. The requirements might impair
the Fund's ability to sell a portfolio security or make an investment at a time
when it would otherwise be favorable to do so, or require that the Fund sell a
portfolio security at a disadvantageous time. The Fund's ability to sell or
close out a position in an instrument prior to expiration or maturity depends
on the existence of a liquid secondary market or, in the absence of such a
market, the ability and willingness of the counterparty to enter into a
transaction closing out the position. Therefore, there is no assurance that
any derivatives position can be sold or closed out at a time and price that is
favorable to the Fund.

(5) LEGAL RISK. Legal risk is the risk of loss caused by the legal
unenforcibility of a party's obligations under the derivative. While a party
seeking price certainty agrees to surrender the potential upside in exchange
for downside protection, the party taking the risk is looking for a positive
payoff. Despite this voluntary assumption of risk, a counterparty that has
lost money in a derivative transaction may try to avoid payment by exploiting
various legal uncertainties about certain derivative products.

(6) SYSTEMIC OR "INTERCONNECTION" RISK. Interconnection risk is the risk
that a disruption in the financial markets will cause difficulties for all
market participants. In other words, a disruption in one market will spill
over into other markets, perhaps creating a chain reaction. Much of the OTC
derivatives market takes place among the OTC dealers themselves, thus creating
a large interconnected web of financial obligations. This interconnectedness
raises the possibility that a default by one large dealer could create losses
at other dealers and destabilize the entire market for OTC derivative
instruments.

GENERAL LIMITATIONS. The use of derivative instruments is subject to
applicable regulations of the SEC, the several options and futures exchanges
upon which they may be traded, the Commodity Futures Trading Commission
("CFTC"), and various state regulatory authorities. In addition, the Fund's
ability to use derivative instruments may be limited by certain tax
considerations.

The Fund has filed a notice of eligibility for exclusion from the definition of
the term "commodity pool operator" with the CFTC and the National Futures
Association, which regulate trading in the futures markets. In accordance with
Rule 4.5 of the regulations under the Commodity Exchange Act ("CEA"), the
notice of eligibility for the Fund includes representations that the Fund will
use futures contracts and related options solely for bona fide hedging purposes
within the meaning of CFTC regulations, provided that the Fund may hold other
positions in futures contracts and related options that do not qualify as a
bona fide hedging position if the aggregate initial margin deposits and
premiums required to establish these positions, less the amount by which any
such futures contracts and related options positions are "in the money," do not
exceed 5% of the Fund's net assets. Adherence to these guidelines does not
limit the Fund's risk to 5% of the Fund's assets.

The SEC has identified certain trading practices involving derivative
instruments that involve the potential for leveraging the Fund's assets in a
manner that raises issues under the 1940 Act. In order to limit the potential
for the leveraging of the Fund's assets, as defined under the 1940 Act, the SEC
has stated that the Fund may use coverage or the segregation of the Fund's
assets. To the extent required by SEC guidelines, the Fund will not enter into
any such transactions unless it owns either: (1) an offsetting ("covered")
position in securities, options, futures, or derivative instruments; or (2)
cash or liquid securities positions with a value sufficient at all times to
cover its potential obligations to the extent that the position is not
"covered". The Fund will also set aside cash and/or appropriate liquid assets
in a segregated custodial account if required to do so by SEC and CFTC
regulations. Assets used as cover or held in a segregated account cannot be
sold while the derivative position is open, unless they are replaced with
similar assets. As a result, the commitment of a large portion of the Fund's
assets to segregated accounts could impede portfolio management or the Fund's
ability to meet redemption requests or other current obligations.

In some cases, the Fund may be required to maintain or limit exposure to a
specified percentage of its assets to a particular asset class. In such cases,
when the Fund uses a derivative instrument to increase or decrease exposure to
an asset class and is required by applicable SEC guidelines to set aside liquid
assets in a segregated account to secure its obligations under the derivative
instruments, the Advisor may, where reasonable in light of the circumstances,
measure compliance with the applicable percentage by reference to the nature of
the economic exposure created through the use of the derivative instrument and
not by reference to the nature of the exposure arising from the liquid assets
set aside in the segregated account (unless another interpretation is specified
by applicable regulatory requirements).

OPTIONS. The Fund may use options for any lawful purpose consistent with its
investment objective such as hedging or managing risk. An option is a contract
in which the "holder" (the buyer) pays a certain amount ("premium") to the
"writer" (the seller) to obtain the right, but not the obligation, to buy from
the writer (in a "call") or sell to the writer (in a "put") a specific asset at
an agreed upon price ("strike price" or "exercise price") at or before a
certain time ("expiration date"). The holder pays the

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<PAGE>

premium at inception and has no further financial obligation. The holder of an
option will benefit from favorable movements in the price of the underlying
asset but is not exposed to corresponding losses due to adverse movements in
the value of the underlying asset. The writer of an option will receive fees
or premiums but is exposed to losses due to changes in the value of the
underlying asset. The Fund may buy or write (sell) put and call options on
assets, such as securities, currencies, financial commodities, and indices of
debt and equity securities ("underlying assets") and enter into closing
transactions with respect to such options to terminate an existing position.
Options used by the Fund may include European, American, and Bermuda style
options. If an option is exercisable only at maturity, it is a "European"
option; if it is also exercisable prior to maturity, it is an "American"
option. If it is exercisable only at certain times, it is a "Bermuda" option.

The Fund may purchase (buy) and write (sell) put and call options underlying
assets and enter into closing transactions with respect to such options to
terminate an existing position. The purchase of a call option serves as a long
hedge, and the purchase of a put option serves as a short hedge. Writing put
or call options can enable the Fund to enhance income by reason of the premiums
paid by the purchaser of such options. Writing call options serves as a
limited short hedge because declines in the value of the hedged investment
would be offset to the extent of the premium received for writing the option.
However, if the security appreciates to a price higher than the exercise price
of the call option, it can be expected that the option will be exercised and
the Fund will be obligated to sell the security at less than its market value
or will be obligated to purchase the security at a price greater than that at
which the security must be sold under the option. All or a portion of any
assets used as cover for OTC options written by the Fund would be considered
illiquid to the extent described under "Investment Policies and Techniques -
Illiquid Securities." Writing put options serves as a limited long hedge
because decreases in the value of the hedged investment would be offset to the
extent of the premium received for writing the option. However, if the
security depreciates to a price lower than the exercise price of the put
option, it can be expected that the put option will be exercised and the Fund
will be obligated to purchase the security at more than its market value.

The value of an option position will reflect, among other things, the
historical price volatility of the underlying investment, the current market
value of the underlying investment, the time remaining until expiration, the
relationship of the exercise price to the market price of the underlying
investment, and general market conditions.

The Fund may effectively terminate its right or obligation under an option by
entering into a closing transaction. For example, the Fund may terminate its
obligation under a call or put option that it had written by purchasing an
identical call or put option; this is known as a closing purchase transaction.
Conversely, the Fund may terminate a position in a put or call option it had
purchased by writing an identical put or call option; this is known as a
closing sale transaction. Closing transactions permit the Fund to realize the
profit or limit the loss on an option position prior to its exercise or
expiration.

The Fund may purchase or write both exchange-traded and OTC options.
Exchange-traded options are issued by a clearing organization affiliated with
the exchange on which the option is listed that, in effect, guarantees
completion of every exchange-traded option transaction. In contrast, OTC
options are contracts between the Fund and the other party to the transaction
("counterparty") (usually a securities dealer or a bank) with no clearing
organization guarantee. Thus, when the Fund purchases or writes an OTC option,
it relies on the counterparty to make or take delivery of the underlying
investment upon exercise of the option. Failure by the counterparty to do so
would result in the loss of any premium paid by the Fund as well as the loss of
any expected benefit of the transaction.

The Fund's ability to establish and close out positions in exchange-listed
options depends on the existence of a liquid market. The Fund intends to
purchase or write only those exchange-traded options for which there appears to
be a liquid secondary market. However, there can be no assurance that such a
market will exist at any particular time. Closing transactions can be made for
OTC options only by negotiating directly with the counterparty, or by a
transaction in the secondary market if any such market exists. Although the
Fund will enter into OTC options only with counter parties that are expected to
be capable of entering into closing transactions with the Fund, there is no
assurance that the Fund will in fact be able to close out an OTC option at a
favorable price prior to expiration. In the event of insolvency of the
counterparty, the Fund might be unable to close out an OTC option position at
any time prior to its expiration. If the Fund were unable to effect a closing
transaction for an option it had purchased, it would have to exercise the
option to realize any profit.

The Fund may engage in options transactions on indices in much the same manner
as the options on securities discussed above, except the index options may
serve as a hedge against overall fluctuations in the securities market
represented by the relevant market index.

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The writing and purchasing of options is a highly specialized activity that
involves investment techniques and risks different from those associated with
ordinary portfolio securities transactions. Imperfect correlation between the
options and securities markets may detract from the effectiveness of the
attempted hedging.

SPREAD TRANSACTIONS. The Fund may use spread transactions for any lawful
purpose consistent with its investment objective such as hedging or managing
risk. The Fund may purchase covered spread options from securities dealers.
Such covered spread options are not presently exchange-listed or
exchange-traded. The purchase of a spread option gives the Fund the right to
put, or sell, a security that it owns at a fixed dollar spread or fixed yield
spread in relation to another security that the Fund does not own, but which is
used as a benchmark. The risk to the Fund in purchasing covered spread options
is the cost of the premium paid for the spread option and any transaction
costs. In addition, there is no assurance that closing transactions will be
available. The purchase of spread options will be used to protect the Fund
against adverse changes in prevailing credit quality spreads, I.E., the yield
spread between high quality and lower quality securities. Such protection is
only provided during the life of the spread option.

FUTURES CONTRACTS. The Fund may use futures contracts for any lawful purpose
consistent with its investment objective such as hedging or managing risk. The
Fund may enter into futures contracts, including, but not limited to, interest
rate and index futures. The Fund may also purchase put and call options, and
write covered put and call options, on futures in which it is allowed to
invest. The purchase of futures or call options thereon can serve as a long
hedge, and the sale of futures or the purchase of put options thereon can serve
as a short hedge. Writing covered call options on futures contracts can serve
as a limited short hedge, and writing covered put options on futures contracts
can serve as a limited long hedge, using a strategy similar to that used for
writing covered options in securities. The Fund may also write put options on
futures contracts while at the same time purchasing call options on the same
futures contracts in order to create synthetically a long futures contract
position. Such options would have the same strike prices and expiration dates.
The Fund will engage in this strategy only when the Advisor believes it is more
advantageous to the Fund than purchasing the futures contract.

To the extent required by regulatory authorities, the Fund only enters into
futures contracts that are traded on national futures exchanges and are
standardized as to maturity date and underlying financial instrument. Futures
exchanges and trading are regulated under the CEA by the CFTC. Although
techniques other than sales and purchases of futures contracts could be used to
reduce the Fund's exposure to market or interest rate fluctuations, the Fund
may be able to hedge its exposure more effectively and perhaps at a lower cost
through the use of futures contracts.

An interest rate futures contract provides for the future sale by one party and
purchase by another party of a specified amount of a specific financial
instrument (E.G., debt security) for a specified price at a designated date,
time, and place. An index futures contract is an agreement pursuant to which
the parties agree to take or make delivery of an amount of cash equal to the
difference between the value of the index at the close of the last trading day
of the contract and the price at which the index futures contract was
originally written. Transaction costs are incurred when a futures contract is
bought or sold and margin deposits must be maintained. A futures contract may
be satisfied by delivery or purchase, as the case may be, of the instrument or
by payment of the change in the cash value of the index. More commonly,
futures contracts are closed out prior to delivery by entering into an
offsetting transaction in a matching futures contract. Although the value of
an index might be a function of the value of certain specified securities, no
physical delivery of those securities is made. If the offsetting purchase
price is less than the original sale price, the Fund realizes a gain; if it is
more, the Fund realizes a loss. Conversely, if the offsetting sale price is
more than the original purchase price, the Fund realizes a gain; if it is less,
the Fund realizes a loss. The transaction costs must also be included in these
calculations. There can be no assurance, however, that the Fund will be able
to enter into an offsetting transaction with respect to a particular futures
contract at a particular time. If the Fund is not able to enter into an
offsetting transaction, the Fund will continue to be required to maintain the
margin deposits on the futures contract.

No price is paid by the Fund upon entering into a futures contract. Instead,
at the inception of a futures contract, the Fund is required to deposit in a
segregated account with its custodian, in the name of the futures broker
through whom the transaction was effected, "initial margin" consisting of cash
and/or other appropriate liquid assets in an amount generally equal to 10% or
less of the contract value. Margin must also be deposited when writing a call
or put option on a futures contract, in accordance with applicable exchange
rules. Unlike margin in securities transactions, initial margin on futures
contracts does not represent a borrowing, but rather is in the nature of a
performance bond or good-faith deposit that is returned to the Fund at the
termination of the transaction if all contractual obligations have been
satisfied. Under certain circumstances, such as periods of high volatility,
the Fund may be required by an exchange to increase the level of its initial
margin payment, and initial margin requirements might be increased generally in
the future by regulatory action.

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Subsequent "variation margin" payments are made to and from the futures broker
daily as the value of the futures position varies, a process known as "marking
to market." Variation margin does not involve borrowing, but rather represents
a daily settlement of the Fund's obligations to or from a futures broker. When
the Fund purchases an option on a future, the premium paid plus transaction
costs is all that is at risk. In contrast, when the Fund purchases or sells a
futures contract or writes a call or put option thereon, it is subject to daily
variation margin calls that could be substantial in the event of adverse price
movements. If the Fund has insufficient cash to meet daily variation margin
requirements, it might need to sell securities at a time when such sales are
disadvantageous. Purchasers and sellers of futures positions and options on
futures can enter into offsetting closing transactions by selling or
purchasing, respectively, an instrument identical to the instrument held or
written. Positions in futures and options on futures may be closed only on an
exchange or board of trade that provides a secondary market. The Fund intends
to enter into futures transactions only on exchanges or boards of trade where
there appears to be a liquid secondary market. However, there can be no
assurance that such a market will exist for a particular contract at a
particular time.

Under certain circumstances, futures exchanges may establish daily limits on
the amount that the price of a future or option on a futures contract can vary
from the previous day's settlement price; once that limit is reached, no trades
may be made that day at a price beyond the limit. Daily price limits do not
limit potential losses because prices could move to the daily limit for several
consecutive days with little or no trading, thereby preventing liquidation of
unfavorable positions.

If the Fund were unable to liquidate a futures or option on a futures contract
position due to the absence of a liquid secondary market or the imposition of
price limits, it could incur substantial losses. The Fund would continue to be
subject to market risk with respect to the position. In addition, except in
the case of purchased options, the Fund would continue to be required to make
daily variation margin payments and might be required to maintain the position
being hedged by the future or option or to maintain cash or securities in a
segregated account.

Certain characteristics of the futures market might increase the risk that
movements in the prices of futures contracts or options on futures contracts
might not correlate perfectly with movements in the prices of the investments
being hedged. For example, all participants in the futures and options on
futures contracts markets are subject to daily variation margin calls and might
be compelled to liquidate futures or options on futures contracts positions
whose prices are moving unfavorably to avoid being subject to further calls.
These liquidations could increase price volatility of the instruments and
distort the normal price relationship between the futures or options and the
investments being hedged. Also, because initial margin deposit requirements in
the futures markets are less onerous than margin requirements in the securities
markets, there might be increased participation by speculators in the future
markets. This participation also might cause temporary price distortions. In
addition, activities of large traders in both the futures and securities
markets involving arbitrage, "program trading" and other investment strategies
might result in temporary price distortions.

FOREIGN CURRENCIES. The Fund may purchase and sell foreign currency on a spot
basis, and may use currency-related derivatives instruments such as options on
foreign currencies, futures on foreign currencies, options on futures on
foreign currencies and forward currency contracts (I.E., an obligation to
purchase or sell a specific currency at a specified future date, which may be
any fixed number of days from the contract date agreed upon by the parties, at
a price set at the time the contract is entered into). The Fund may use these
instruments for hedging or any other lawful purpose consistent with the Fund's
investment objective, including transaction hedging, anticipatory hedging,
cross hedging, proxy hedging, and position hedging. The Fund's use of
currency-related derivative instruments will be directly related to the Fund's
current or anticipated portfolio securities, and the Fund may engage in
transactions in currency-related derivative instruments as a means to protect
against some or all of the effects of adverse changes in foreign currency
exchange rates on its investment portfolio. In general, if the currency in
which a portfolio investment is denominated appreciates against the U.S.
dollar, the dollar value of the security will increase. Conversely, a decline
in the exchange rate of the currency would adversely affect the value of the
portfolio investment expressed in U.S. dollars.

For example, the Fund might use currency-related derivative instruments to
"lock in" a U.S. dollar price for a portfolio investment, thereby enabling the
Fund to protect itself against a possible loss resulting from an adverse change
in the relationship between the U.S. dollar and the subject foreign currency
during the period between the date the security is purchased or sold and the
date on which payment is made or received. The Fund also might use
currency-related derivative instruments when the Advisor believes that one
currency may experience a substantial movement against another currency,
including the U.S. dollar, and it may use currency-related derivative
instruments to sell or buy the amount of the former foreign currency,
approximating the value of some or all of the Fund's portfolio securities
denominated in such foreign currency. Alternatively, where appropriate, the
Fund may use currency-related derivative instruments to hedge all or part of
its foreign currency exposure through the use of a basket of currencies or a
proxy currency where such currency or currencies act as an effective proxy for
other currencies. The

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<PAGE>

use of this basket hedging technique may be more efficient and economical than
using separate currency-related derivative instruments for each currency
exposure held by the Fund. Furthermore, currency-related derivative
instruments may be used for short hedges - for example, the Fund may sell a
forward currency contract to lock in the U.S. dollar equivalent of the proceeds
from the anticipated sale of a security denominated in a foreign currency.

In addition, the Fund may use a currency-related derivative instrument to shift
exposure to foreign currency fluctuations from one foreign country to another
foreign country where the Advisor believes that the foreign currency exposure
purchased will appreciate relative to the U.S. dollar and thus better protect
the Fund against the expected decline in the foreign currency exposure sold.
For example, if the Fund owns securities denominated in a foreign currency and
the Advisor believes that currency will decline, it might enter into a forward
contract to sell an appropriate amount of the first foreign currency, with
payment to be made in a second foreign currency that the Advisor believes would
better protect the Fund against the decline in the first security than would a
U.S. dollar exposure. Hedging transactions that use two foreign currencies are
sometimes referred to as "cross hedges." The effective use of currency-related
derivative instruments by the Fund in a cross hedge is dependent upon a
correlation between price movements of the two currency instruments and the
underlying security involved, and the use of two currencies magnifies the risk
that movements in the price of one instrument may not correlate or may
correlate unfavorably with the foreign currency being hedged. Such a lack of
correlation might occur due to factors unrelated to the value of the currency
instruments used or investments being hedged, such as speculative or other
pressures on the markets in which these instruments are traded.

The Fund also might seek to hedge against changes in the value of a particular
currency when no hedging instruments on that currency are available or such
hedging instruments are more expensive than certain other hedging instruments.
In such cases, the Fund may hedge against price movements in that currency by
entering into transactions using currency-related derivative instruments on
another foreign currency or a basket of currencies, the values of which the
Advisor believes will have a high degree of positive correlation to the value
of the currency being hedged. The risk that movements in the price of the
hedging instrument will not correlate perfectly with movements in the price of
the currency being hedged is magnified when this strategy is used.

The use of currency-related derivative instruments by the Fund involves a
number of risks. The value of currency-related derivative instruments depends
on the value of the underlying currency relative to the U.S. dollar. Because
foreign currency transactions occurring in the interbank market might involve
substantially larger amounts than those involved in the use of such derivative
instruments, the Fund could be disadvantaged by having to deal in the odd lot
market (generally consisting of transactions of less than $1 million) for the
underlying foreign currencies at prices that are less favorable than for round
lots (generally consisting of transactions of greater than $1 million).

There is no systematic reporting of last sale information for foreign
currencies or any regulatory requirement that quotations available through
dealers or other market sources be firm or revised on a timely basis.
Quotation information generally is representative of very large transactions in
the interbank market and thus might not reflect odd-lot transactions where
rates might be less favorable. The interbank market in foreign currencies is a
global, round-the-clock market. To the extent the U.S. options or futures
markets are closed while the markets for the underlying currencies remain open,
significant price and rate movements might take place in the underlying markets
that cannot be reflected in the markets for the derivative instruments until
they re-open.

Settlement of transactions in currency-related derivative instruments might be
required to take place within the country issuing the underlying currency.
Thus, the Fund might be required to accept or make delivery of the underlying
foreign currency in accordance with any U.S. or foreign regulations regarding
the maintenance of foreign banking arrangements by U.S. residents and might be
required to pay any fees, taxes and charges associated with such delivery
assessed in the issuing country.

When the Fund engages in a transaction in a currency-related derivative
instrument, it relies on the counterparty to make or take delivery of the
underlying currency at the maturity of the contract or otherwise complete the
contract. In other words, the Fund will be subject to the risk that a loss may
be sustained by the Fund as a result of the failure of the counterparty to
comply with the terms of the transaction. The counterparty risk for
exchange-traded instruments is generally less than for privately negotiated or
OTC currency instruments, since generally a clearing agency, which is the
issuer or counterparty to each instrument, provides a guarantee of performance.
For privately negotiated instruments, there is no similar clearing agency
guarantee. In all transactions, the Fund will bear the risk that the
counterparty will default, and this could result in a loss of the expected
benefit of the transaction and possibly other losses to the Fund. The Fund
will enter into transactions in currency-related derivative instruments only
with counterparties that the Advisor reasonably believes are capable of
performing under the contract.

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<PAGE>

Purchasers and sellers of currency-related derivative instruments may enter
into offsetting closing transactions by selling or purchasing, respectively, an
instrument identical to the instrument purchased or sold. Secondary markets
generally do not exist for forward currency contracts, with the result that
closing transactions generally can be made for forward currency contracts only
by negotiating directly with the counterparty. Thus, there can be no assurance
that the Fund will in fact be able to close out a forward currency contract (or
any other currency-related derivative instrument) at a time and price favorable
to the Fund. In addition, in the event of insolvency of the counterparty, the
Fund might be unable to close out a forward currency contract at any time prior
to maturity. In the case of an exchange-traded instrument, the Fund will be
able to close the position out only on an exchange which provides a market for
the instruments. The ability to establish and close out positions on an
exchange is subject to the maintenance of a liquid market, and there can be no
assurance that a liquid market will exist for any instrument at any specific
time. In the case of a privately negotiated instrument, the Fund will be able
to realize the value of the instrument only by entering into a closing
transaction with the issuer or finding a third party buyer for the instrument.
While the Fund will enter into privately negotiated transactions only with
entities who are expected to be capable of entering into a closing transaction,
there can be no assurance that the Fund will in fact be able to enter into such
closing transactions.

The precise matching of currency-related derivative instrument amounts and the
value of the portfolio securities involved generally will not be possible
because the value of such securities, measured in the foreign currency, will
change after the currency-related derivative instrument position has been
established. Thus, the Fund might need to purchase or sell foreign currencies
in the spot (cash) market. The projection of short-term currency market
movements is extremely difficult, and the successful execution of a short-term
hedging strategy is highly uncertain.

Permissible foreign currency options will include options traded primarily in
the OTC market. Although options on foreign currencies are traded primarily in
the OTC market, the Fund will normally purchase or sell OTC options on foreign
currency only when the Advisor reasonably believes a liquid secondary market
will exist for a particular option at any specific time.

There will be a cost to the Fund of engaging in transactions in
currency-related derivative instruments that will vary with factors such as the
contract or currency involved, the length of the contract period and the market
conditions then prevailing. The Fund using these instruments may have to pay a
fee or commission or, in cases where the instruments are entered into on a
principal basis, foreign exchange dealers or other counterparties will realize
a profit based on the difference ("spread") between the prices at which they
are buying and selling various currencies. Thus, for example, a dealer may
offer to sell a foreign currency to the Fund at one rate, while offering a
lesser rate of exchange should the Fund desire to resell that currency to the
dealer.

When required by the SEC guidelines, the Fund will set aside permissible liquid
assets in segregated accounts or otherwise cover the Fund's potential
obligations under currency-related derivatives instruments. To the extent the
Fund's assets are so set aside, they cannot be sold while the corresponding
currency position is open, unless they are replaced with similar assets. As a
result, if a large portion of the Fund's assets are so set aside, this could
impede portfolio management or the Fund's ability to meet redemption requests
or other current obligations.

The Advisor's decision to engage in a transaction in a particular
currency-related derivative instrument will reflect the Advisor's judgment that
the transaction will provide value to the Fund and its shareholders and is
consistent with the Fund's objectives and policies. In making such a judgment,
the Advisor will analyze the benefits and risks of the transaction and weigh
them in the context of the Fund's entire portfolio and objectives. The
effectiveness of any transaction in a currency-related derivative instrument is
dependent on a variety of factors, including the Advisor's skill in analyzing
and predicting currency values and upon a correlation between price movements
of the currency instrument and the underlying security. There might be
imperfect correlation, or even no correlation, between price movements of an
instrument and price movements of investments being hedged. Such a lack of
correlation might occur due to factors unrelated to the value of the
investments being hedged, such as speculative or other pressures on the markets
in which these instruments are traded. In addition, the Fund's use of
currency-related derivative instruments is always subject to the risk that the
currency in question could be devalued by the foreign government. In such a
case, any long currency positions would decline in value and could adversely
affect any hedging position maintained by the Fund.

The Fund's dealing in currency-related derivative instruments will generally be
limited to the transactions described above. However, the Fund reserves the
right to use currency-related derivatives instruments for different purposes
and under different circumstances. Of course, the Fund is not required to use
currency-related derivatives instruments and will not do so unless deemed
appropriate by the Advisor. It also should be realized that use of these
instruments does not eliminate, or protect against, price movements in the
Fund's securities that are attributable to other (I.E., non-currency related)
causes. Moreover, while the use

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<PAGE>

of currency-related derivatives instruments may reduce the risk of loss due to
a decline in the value of a hedged currency, at the same time the use of these
instruments tends to limit any potential gain which may result from an increase
in the value of that currency.

SWAP AGREEMENTS. The Fund may enter into interest rate, securities index,
commodity, or security and currency exchange rate swap agreements for any
lawful purpose consistent with the Fund's investment objective, such as for the
purpose of attempting to obtain or preserve a particular desired return or
spread at a lower cost to the Fund than if the Fund had invested directly in an
instrument that yielded that desired return or spread. The Fund also may enter
into swaps in order to protect against an increase in the price of, or the
currency exchange rate applicable to, securities that the Fund anticipates
purchasing at a later date. Swap agreements are two-party contracts entered
into primarily by institutional investors for periods ranging from a few weeks
to several years. In a standard "swap" transaction, two parties agree to
exchange the returns (or differentials in rates of return) earned or realized
on particular predetermined investments or instruments. The gross returns to
be exchanged or "swapped" between the parties are calculated with respect to a
"notional amount" (I.E., the return on or increase in value of a particular
dollar amount invested at a particular interest rate) in a particular foreign
currency, or in a "basket" of securities representing a particular index. Swap
agreements may include interest rate caps, under which, in return for a
premium, one party agrees to make payments to the other to the extent that
interest rates exceed a specified rate, or "cap;" interest rate floors, under
which, in return for a premium, one party agrees to make payments to the other
to the extent that interest rates fall below a specified level, or "floor;" and
interest rate collars, under which a party sells a cap and purchases a floor,
or vice versa, in an attempt to protect itself against interest rate movements
exceeding given minimum or maximum levels.

The "notional amount" of the swap agreement is the agreed upon basis for
calculating the obligations that the parties to a swap agreement have agreed to
exchange. Under most swap agreements entered into by the Fund, the obligations
of the parties would be exchanged on a "net basis." Consequently, the Fund's
obligation (or rights) under a swap agreement will generally be equal only to
the net amount to be paid or received under the agreement based on the relative
values of the positions held by each party to the agreement ("net amount").
The Fund's obligation under a swap agreement will be accrued daily (offset
against amounts owed to the Fund) and any accrued but unpaid net amounts owed
to a swap counterparty will be covered by the maintenance of a segregated
account consisting of cash and/or other appropriate liquid assets.

Whether the Fund's use of swap agreements will be successful in furthering its
investment objective will depend, in part, on the Advisor's ability to predict
correctly whether certain types of investments are likely to produce greater
returns than other investments. Swap agreements may be considered to be
illiquid. Moreover, the Fund bears the risk of loss of the amount expected to
be received under a swap agreement in the event of the default or bankruptcy of
a swap agreement counterparty. Certain restrictions imposed on the Fund by the
Internal Revenue Code of 1986 ("IRC") may limit the Fund's ability to use swap
agreements. The swaps market is largely unregulated.

The Fund will enter swap agreements only with counterparties that the Advisor
reasonably believes are capable of performing under the swap agreements. If
there is a default by the other party to such a transaction, the Fund will have
to rely on its contractual remedies (which may be limited by bankruptcy,
insolvency or similar laws) pursuant to the agreements related to the
transaction.

ADDITIONAL DERIVATIVE INSTRUMENTS AND STRATEGIES. In addition to the
derivative instruments and strategies described above and in the Prospectus,
the Advisor expects to discover additional derivative instruments and other
hedging or risk management techniques. The Advisor may utilize these new
derivative instruments and techniques to the extent that they are consistent
with the Fund's investment objective and permitted by the Fund's investment
limitations, operating policies, and applicable regulatory authorities.

FOREIGN INVESTMENT COMPANIES

The Fund may invest, to a limited extent, in foreign investment companies.
Some of the countries in which the Fund invests may not permit direct
investment by outside investors. Investments in such countries may only be
permitted through foreign government-approved or -authorized investment
vehicles, which may include other investment companies. In addition, it may be
less expensive and more expedient for the Fund to invest in a foreign
investment company in a country which permits direct foreign investment.
Investing through such vehicles may involve frequent or layered fees or
expenses and may also be subject to limitation under the 1940 Act. Under the
1940 Act, the Fund may invest up to 10% of its assets in shares of other
investment companies and up to 5% of its assets in any one investment company
as long as the investment does not represent more than 3% of the voting stock
of the acquired investment company. The Fund does not intend to invest in such
investment companies

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<PAGE>

unless, in the judgment of the Advisor, the potential benefits of such
investments justify the payment of any associated fees and expenses.

FOREIGN SECURITIES

Investing in foreign securities involves a series of risks not present in
investing in U.S. securities. Many of the foreign securities held by the Fund
will not be registered with the SEC, nor will the foreign issuers be subject to
SEC reporting requirements. Accordingly, there may be less publicly available
information concerning foreign issuers of securities held by the Fund than is
available concerning U.S. companies. Disclosure and regulatory standards in
many respects are less stringent in emerging market countries than in the U.S.
and other major markets. There also may be a lower level of monitoring and
regulation of emerging markets and the activities of investors in such markets,
and enforcement of existing regulations may be extremely limited. Foreign
companies, and in particular, companies in smaller and emerging capital markets
are not generally subject to uniform accounting, auditing and financial
reporting standards, or to other regulatory requirements comparable to those
applicable to U.S. companies. The Fund's net investment income and capital
gains from its foreign investment activities may be subject to non-U.S.
withholding taxes.

The costs attributable to foreign investing that the Fund must bear frequently
are higher than those attributable to domestic investing; this is particularly
true with respect to emerging capital markets. For example, the cost of
maintaining custody of foreign securities exceeds custodian costs for domestic
securities, and transaction and settlement costs of foreign investing also
frequently are higher than those attributable to domestic investing. Costs
associated with the exchange of currencies also make foreign investing more
expensive than domestic investing. Investment income on certain foreign
securities in which the Fund may invest may be subject to foreign withholding
or other government taxes that could reduce the return of these securities.
Tax treaties between the U.S. and foreign countries, however, may reduce or
eliminate the amount of foreign tax to which the Fund would be subject.

Foreign markets also have different clearance and settlement procedures, and in
certain markets there have been times when settlements have failed to keep pace
with the volume of securities transactions, making it difficult to conduct such
transactions. Delays in settlement could result in temporary periods when
assets of the Fund are uninvested and are earning no investment return. The
inability of the Fund to make intended security purchases due to settlement
problems could cause the Fund to miss investment opportunities. Inability to
dispose of a portfolio security due to settlement problems could result either
in losses to the Fund due to subsequent declines in the value of such portfolio
security or, if the Fund has entered into a contract to sell the security,
could result in possible liability to the purchaser.

HIGH-YIELD (HIGH-RISK) SECURITIES

IN GENERAL. Non-investment grade debt obligations ("lower-quality securities")
include (1) bonds rated as low as C by Moody's Investors ("Moody's"), Standard
& Poor's Ratings Group ("S&P"), and comparable ratings of other nationally
recognized statistical rating organizations ("NRSROs"); (2) commercial paper
rated as low as C by S&P, Not Prime by Moody's, and comparable ratings of other
NRSROs; and (3) unrated debt obligations of comparable quality. Lower-quality
securities, while generally offering higher yields than investment grade
securities with similar maturities, involve greater risks, including the
possibility of default or bankruptcy. They are regarded as predominantly
speculative with respect to the issuer's capacity to pay interest and repay
principal. The special risk considerations in connection with investments in
these securities are discussed below. Refer to the Appendix for a description
of the securities ratings.

EFFECT OF INTEREST RATES AND ECONOMIC CHANGES. The lower-quality and
comparable unrated security market is relatively new and its growth has
paralleled a long economic expansion. As a result, it is not clear how this
market may withstand a prolonged recession or economic downturn. Such
conditions could severely disrupt the market for and adversely affect the value
of such securities.

All interest-bearing securities typically experience appreciation when interest
rates decline and depreciation when interest rates rise. The market values of
lower-quality and comparable unrated securities tend to reflect individual
corporate developments to a greater extent than do higher rated securities,
which react primarily to fluctuations in the general level of interest rates.
Lower-quality and comparable unrated securities also tend to be more sensitive
to economic conditions than are higher-rated securities. As a result, they
generally involve more credit risks than securities in the higher-rated
categories. During an economic downturn or a sustained period of rising
interest rates, highly leveraged issuers of lower-quality and comparable
unrated securities may experience financial stress and may not have sufficient
revenues to meet their payment obligations. The issuer's ability to service

20
<PAGE>

its debt obligations may also be adversely affected by specific corporate
developments, the issuer's inability to meet specific projected business
forecasts or the unavailability of additional financing. The risk of loss due
to default by an issuer of these securities is significantly greater than
issuers of higher-rated securities because such securities are generally
unsecured and are often subordinated to other creditors. Further, if the
issuer of a lower-quality or comparable unrated security defaulted, the Fund
might incur additional expenses to seek recovery. Periods of economic
uncertainty and changes would also generally result in increased volatility in
the market prices of these securities and thus in the Fund's net asset value.

As previously stated, the value of a lower-quality or comparable unrated
security will decrease in a rising interest rate market and accordingly, so
will the Fund's net asset value. If the Fund experiences unexpected net
redemptions in such a market, it may be forced to liquidate a portion of its
portfolio securities without regard to their investment merits. Due to the
limited liquidity of lower-quality and comparable unrated securities (discussed
below), the Fund may be forced to liquidate these securities at a substantial
discount. Any such liquidation would force the Fund to sell the more liquid
portion of its portfolio.

PAYMENT EXPECTATIONS. Lower-quality and comparable unrated securities
typically contain redemption, call or prepayment provisions which permit the
issuer of such securities containing such provisions to, at its discretion,
redeem the securities. During periods of falling interest rates, issuers of
these securities are likely to redeem or prepay the securities and refinance
them with debt securities with a lower interest rate. To the extent an issuer
is able to refinance the securities, or otherwise redeem them, the Fund may
have to replace the securities with a lower yielding security, which would
result in a lower return for the Fund.

CREDIT RATINGS. Credit ratings issued by credit rating agencies are designed
to evaluate the safety of principal and interest payments of rated securities.
They do not, however, evaluate the market value risk of lower-quality
securities and, therefore, may not fully reflect the true risks of an
investment. In addition, credit rating agencies may or may not make timely
changes in a rating to reflect changes in the economy or in the condition of
the issuer that affect the market value of the security. Consequently, credit
ratings are used only as a preliminary indicator of investment quality.
Investments in lower-quality and comparable unrated obligations will be more
dependent on the Advisor's credit analysis than would be the case with
investments in investment-grade debt obligations. The Advisor employs its own
credit research and analysis, which includes a study of existing debt, capital
structure, ability to service debt and to pay dividends, the issuer's
sensitivity to economic conditions, its operating history and the current trend
of earnings. The Advisor continually monitors the investments in the Fund's
portfolio and carefully evaluates whether to dispose of or to retain
lower-quality and comparable unrated securities whose credit ratings or credit
quality may have changed.

LIQUIDITY AND VALUATION. The Fund may have difficulty disposing of certain
lower-quality and comparable unrated securities because there may be a thin
trading market for such securities. Because not all dealers maintain markets
in all lower-quality and comparable unrated securities, there is no established
retail secondary market for many of these securities. The Fund anticipates
that such securities could be sold only to a limited number of dealers or
institutional investors. To the extent a secondary trading market does exist,
it is generally not as liquid as the secondary market for higher-rated
securities. The lack of a liquid secondary market may have an adverse impact
on the market price of the security. As a result, the Fund's asset value and
ability to dispose of particular securities, when necessary to meet the Fund's
liquidity needs or in response to a specific economic event, may be impacted.
The lack of a liquid secondary market for certain securities may also make it
more difficult for the Fund to obtain accurate market quotations for purposes
of valuing the Fund's portfolio. Market quotations are generally available on
many lower-quality and comparable unrated issues only from a limited number of
dealers and may not necessarily represent firm bids of such dealers or prices
for actual sales. During periods of thin trading, the spread between bid and
asked prices is likely to increase significantly. In addition, adverse
publicity and investor perceptions, whether or not based on fundamental
analysis, may decrease the values and liquidity of lower-quality and comparable
unrated securities, especially in a thinly traded market.

LEGISLATION. Legislation may be adopted, from time to time, designed to limit
the use of certain lower-quality and comparable unrated securities by certain
issuers. It is anticipated that if additional legislation is enacted or
proposed, it could have a material affect on the value of these securities and
the existence of a secondary trading market for the securities.

ILLIQUID SECURITIES

The Fund may invest in illiquid securities (I.E., securities that are not
readily marketable). However, the Fund will not acquire illiquid securities
if, as a result, the illiquid securities would comprise more than 15% (10% for
money market funds) of the value of the Fund's net assets (or such other
amounts as may be permitted under the 1940 Act). However, as a matter of
internal policy, the Advisor intends to limit the Fund's investments in
illiquid securities to 10% of its net assets.

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<PAGE>

The Board of Directors of the Fund, or its delegate, has the ultimate authority
to determine, to the extent permissible under the federal securities laws,
which securities are illiquid for purposes of this limitation. Certain
securities exempt from registration or issued in transactions exempt from
registration under the Securities Act of 1933, as amended ("Securities Act"),
such as securities that may be resold to institutional investors under Rule
144A under the Securities Act and Section 4(2) commercial paper, may be
considered liquid under guidelines adopted by the Fund's Board of Directors.

The Board of Directors of the Fund has delegated to the Advisor the day-to-day
determination of the liquidity of a security, although it has retained
oversight and ultimate responsibility for such determinations. The Board of
Directors has directed the Advisor to look to such factors as (1) the frequency
of trades or quotes for a security, (2) the number of dealers willing to
purchase or sell the security and number of potential buyers, (3) the
willingness of dealers to undertake to make a market in the security, (4) the
nature of the security and nature of the marketplace trades, such as the time
needed to dispose of the security, the method of soliciting offers, and the
mechanics of transfer, (5) the likelihood that the security's marketability
will be maintained throughout the anticipated holding period, and (6) any other
relevant factors. The Advisor may determine 4(2) commercial paper to be liquid
if (1) the 4(2) commercial paper is not traded flat or in default as to
principal and interest, (2) the 4(2) commercial paper is rated in one of the
two highest rating categories by at least two NRSROs, or if only one NRSRO
rates the security, by that NRSRO, or is determined by the Advisor to be of
equivalent quality, and (3) the Advisor considers the trading market for the
specific security taking into account all relevant factors. With respect to
any foreign holdings, a foreign security may be considered liquid by the
Advisor (despite its restricted nature under the Securities Act) if the
security can be freely traded in a foreign securities market and all the facts
and circumstances support a finding of liquidity.

Restricted securities may be sold only in privately negotiated transactions or
in a public offering with respect to which a registration statement is in
effect under the Securities Act. Where registration is required, the Fund may
be obligated to pay all or part of the registration expenses and a considerable
period may elapse between the time of the decision to sell and the time the
Fund may be permitted to sell a security under an effective registration
statement. If, during such a period, adverse market conditions were to
develop, the Fund might obtain a less favorable price than prevailed when it
decided to sell. Restricted securities will be priced in accordance with
pricing procedures adopted by the Board of Directors of the Fund. If through
the appreciation of restricted securities or the depreciation of unrestricted
securities the Fund should be in a position where more than 15% of the value of
its net assets are invested in illiquid securities, including restricted
securities which are not readily marketable (except for 144A Securities and
4(2) commercial paper deemed to be liquid by the Advisor), the Fund will take
such steps as is deemed advisable, if any, to protect the liquidity of the
Fund's portfolio.

The Fund may sell OTC options and, in connection therewith, segregate assets or
cover its obligations with respect to OTC options written by the Fund. The
assets used as cover for OTC options written by the Fund will be considered
illiquid unless the OTC options are sold to qualified dealers who agree that
the Fund may repurchase any OTC option it writes at a maximum price to be
calculated by a formula set forth in the option agreement. The cover for an
OTC option written subject to this procedure would be considered illiquid only
to the extent that the maximum repurchase price under the formula exceeds the
intrinsic value of the option.

LENDING OF PORTFOLIO SECURITIES

The Fund is authorized to lend up to 33 1/3% of the total value of its
portfolio securities to broker-dealers or institutional investors that the
Advisor deems qualified, but only when the borrower maintains with the Fund's
custodian bank collateral either in cash or money market instruments in an
amount at least equal to the market value of the securities loaned, plus
accrued interest and dividends, determined on a daily basis and adjusted
accordingly. Although the Fund is authorized to lend, the Fund does not
presently intend to engage in lending. In determining whether to lend
securities to a particular broker-dealer or institutional investor, the Advisor
will consider, and during the period of the loan will monitor, all relevant
facts and circumstances, including the creditworthiness of the borrower. The
Fund will retain authority to terminate any loans at any time. The Fund may
pay reasonable administrative and custodial fees in connection with a loan and
may pay a negotiated portion of the interest earned on the cash or money market
instruments held as collateral to the borrower or placing broker. The Fund
will receive reasonable interest on the loan or a flat fee from the borrower
and amounts equivalent to any dividends, interest or other distributions on the
securities loaned. The Fund will retain record ownership of loaned securities
to exercise beneficial rights, such as voting and subscription rights and
rights to dividends, interest or other distributions, when retaining such
rights is considered to be in the Fund's interest.

MORTGAGE- AND ASSET-BACKED DEBT SECURITIES

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<PAGE>

Mortgage-backed securities represent direct or indirect participations in, or
are secured by and payable from, mortgage loans secured by real property, and
include single- and multi-class pass-through securities and collateralized
mortgage obligations. Such securities may be issued or guaranteed by U.S.
government agencies or instrumentalities, such as the Government National
Mortgage Association and the Federal National Mortgage Association, or by
private issuers, generally originators and investors in mortgage loans,
including savings associations, mortgage bankers, commercial banks, investment
bankers, and special purpose entities (collectively, "private lenders").
Mortgage-backed securities issued by private lenders may be supported by pools
of mortgage loans or other mortgage-backed securities that are guaranteed,
directly or indirectly, by the U.S. government or one of its agencies or
instrumentalities, or they may be issued without any governmental guarantee of
the underlying mortgage assets but with some form of non-governmental credit
enhancement.

Asset-backed securities have structural characteristics similar to
mortgage-backed securities. Asset-backed debt obligations represent direct or
indirect participation in, or are secured by and payable from, assets such as
motor vehicle installment sales contracts, other installment loan contracts,
home equity loans, leases of various types of property, and receivables from
credit card or other revolving credit arrangements. The credit quality of most
asset-backed securities depends primarily on the credit quality of the assets
underlying such securities, how well the entity issuing the security is
insulated from the credit risk of the originator or any other affiliated
entities, and the amount and quality of any credit enhancement of the
securities. Payments or distributions of principal and interest on
asset-backed debt obligations may be supported by non-governmental credit
enhancements including letters of credit, reserve funds, overcollateralization,
and guarantees by third parties. The market for privately issued asset-backed
debt obligations is smaller and less liquid than the market for government
sponsored mortgage-backed securities.

The rate of principal payment on mortgage- and asset-backed securities
generally depends on the rate of principal payments received on the underlying
assets which in turn may be affected by a variety of economic and other
factors. As a result, the yield on any mortgage- and asset-backed security is
difficult to predict with precision and actual yield to maturity may be more or
less than the anticipated yield to maturity. The yield characteristics of
mortgage- and asset-backed securities differ from those of traditional debt
securities. Among the principal differences are that interest and principal
payments are made more frequently on mortgage-and asset-backed securities,
usually monthly, and that principal may be prepaid at any time because the
underlying mortgage loans or other assets generally may be prepaid at any time.
As a result, if the Fund purchases these securities at a premium, a prepayment
rate that is faster than expected will reduce yield to maturity, while a
prepayment rate that is slower than expected will have the opposite effect of
increasing the yield to maturity. Conversely, if the Fund purchases these
securities at a discount, a prepayment rate that is faster than expected will
increase yield to maturity, while a prepayment rate that is slower than
expected will reduce yield to maturity. Amounts available for reinvestment by
the Fund are likely to be greater during a period of declining interest rates
and, as a result, are likely to be reinvested at lower interest rates than
during a period of rising interest rates. Accelerated prepayments on
securities purchased by the Fund at a premium also impose a risk of loss of
principal because the premium may not have been fully amortized at the time the
principal is prepaid in full. The market for privately issued mortgage- and
asset-backed securities is smaller and less liquid than the market for
government-sponsored mortgage-backed securities.

While many mortgage- and asset-backed securities are issued with only one class
of security, many are issued in more than one class, each with different
payment terms. Multiple class mortgage- and asset-backed securities are issued
for two main reasons. First, multiple classes may be used as a method of
providing credit support. This is accomplished typically through creation of
one or more classes whose right to payments on the security is made subordinate
to the right to such payments of the remaining class or classes. Second,
multiple classes may permit the issuance of securities with payment terms,
interest rates, or other characteristics differing both from those of each
other and from those of the underlying assets. Examples include so-called
"strips" (mortgage- and asset-backed securities entitling the holder to
disproportionate interests with respect to the allocation of interest and
principal of the assets backing the security), and securities with class or
classes having characteristics which mimic the characteristics of non-mortgage-
or asset-backed securities, such as floating interest rates (I.E., interest
rates which adjust as a specified benchmark changes) or scheduled amortization
of principal.

The Fund may invest in stripped mortgage- or asset-backed securities, which
receive differing proportions of the interest and principal payments from the
underlying assets. The market value of such securities generally is more
sensitive to changes in prepayment and interest rates than is the case with
traditional mortgage- and asset-backed securities, and in some cases such
market value may be extremely volatile. With respect to certain stripped
securities, such as interest only and principal only classes, a rate of
prepayment that is faster or slower than anticipated may result in the Fund
failing to recover all or a portion of its investment, even though the
securities are rated investment grade.

23
<PAGE>

Mortgage- and asset-backed securities backed by assets, other than as described
above, or in which the payment streams on the underlying assets are allocated
in a manner different than those described above may be issued in the future.
The Fund may invest in such securities if such investment is otherwise
consistent with its investment objectives and policies and with the investment
restrictions of the Fund.

MUNICIPAL OBLIGATIONS

IN GENERAL. Municipal obligations are debt obligations issued by or on behalf
of states, territories, and possessions of the United States and the District
of Columbia and their political subdivisions, agencies, and instrumentalities.
Municipal obligations generally include debt obligations issued to obtain funds
for various public purposes. Certain types of municipal obligations are issued
in whole or in part to obtain funding for privately operated facilities or
projects. Municipal obligations include general obligation bonds, revenue
bonds, industrial development bonds, notes, and municipal lease obligations.
Municipal obligations also include obligations, the interest on which is exempt
from federal income tax, that may become available in the future as long as the
Board of Directors of the Fund determines that an investment in any such type
of obligation is consistent with the Fund's investment objective.

BONDS AND NOTES. General obligation bonds are secured by the issuer's pledge of
its full faith, credit, and taxing power for the payment of interest and
principal. Revenue bonds are payable only from the revenues derived from a
project or facility or from the proceeds of a specified revenue source.
Industrial development bonds are generally revenue bonds secured by payments
from and the credit of private users. Municipal notes are issued to meet the
short-term funding requirements of state, regional, and local governments.
Municipal notes include tax anticipation notes, bond anticipation notes,
revenue anticipation notes, tax and revenue anticipation notes, construction
loan notes, short-term discount notes, tax-exempt commercial paper, demand
notes, and similar instruments.

LEASE OBLIGATIONS. Municipal lease obligations may take the form of a lease, an
installment purchase, or a conditional sales contract. They are issued by state
and local governments and authorities to acquire land, equipment, and
facilities, such as state and municipal vehicles, telecommunications and
computer equipment, and other capital assets. The Fund may purchase these
obligations directly, or it may purchase participation interests in such
obligations. (See "Participation Interests" below.) Municipal leases are
generally subject to greater risks than general obligation or revenue bonds.
State constitutions and statutes set forth requirements that states or
municipalities must meet in order to issue municipal obligations. Municipal
leases may contain a covenant by the state or municipality to budget for,
appropriate, and make payments due under the obligation. Certain municipal
leases may, however, contain "non-appropriation" clauses which provide that the
issuer is not obligated to make payments on the obligation in future years
unless funds have been appropriated for this purpose each year. Accordingly,
such obligations are subject to "non-appropriation" risk. While municipal
leases are secured by the underlying capital asset, it may be difficult to
dispose of any such asset in the event of non-appropriation or other default.

MORTGAGE-BACKED BONDS. The Fund's investments in municipal obligations may
include mortgage-backed municipal obligations, which are a type of municipal
security issued by a state, authority, or municipality to provide financing for
residential housing mortgages to target groups, generally low-income
individuals who are first-time home buyers. The Fund's interest, evidenced by
such obligations, is an undivided interest in a pool of mortgages. Payments
made on the underlying mortgages and passed through to the Fund will represent
both regularly scheduled principal and interest payments. The Fund may also
receive additional principal payments representing prepayments of the
underlying mortgages. While a certain level of prepayments can be expected,
regardless of the interest rate environment, it is anticipated that prepayment
of the underlying mortgages will accelerate in periods of declining interest
rates. In the event that the Fund receives principal prepayments in a declining
interest-rate environment, its reinvestment of such funds may be in bonds with
a lower yield.

PARTICIPATION INTERESTS

A participation interest gives the Fund an undivided interest in a municipal
obligation in the proportion that the Fund's participation interest bears to
the principal amount of the obligation. These instruments may have fixed,
floating, or variable rates of interest. The Fund will only purchase
participation interests if accompanied by an opinion of counsel that the
interest earned on the underlying municipal obligations will be tax-exempt. If
the Fund purchases unrated participation interests, the Board of Directors or
its delegate must have determined that the credit risk is equivalent to the
rated obligations in which the Fund may invest. Participation interests may be
backed by a letter of credit or guaranty of the selling institution. When
determining whether such a participation interest meets the Fund's credit
quality requirements, the Fund may look to the credit quality of any financial
guarantor providing a letter of credit or guaranty.

24
<PAGE>

REPURCHASE AGREEMENTS

The Fund may enter into repurchase agreements with certain banks or non-bank
dealers. In a repurchase agreement, the Fund buys a security at one price, and
at the time of sale, the seller agrees to repurchase the obligation at a
mutually agreed upon time and price (usually within seven days). The
repurchase agreement, thereby, determines the yield during the purchaser's
holding period, while the seller's obligation to repurchase is secured by the
value of the underlying security. The Advisor will monitor, on an ongoing
basis, the value of the underlying securities to ensure that the value always
equals or exceeds the repurchase price plus accrued interest. Repurchase
agreements could involve certain risks in the event of a default or insolvency
of the other party to the agreement, including possible delays or restrictions
upon the Fund's ability to dispose of the underlying securities. Although no
definitive creditworthiness criteria are used, the Advisor reviews the
creditworthiness of the banks and non-bank dealers with which the Fund enters
into repurchase agreements to evaluate those risks. The Fund may, under
certain circumstances, deem repurchase agreements collateralized by U.S.
government securities to be investments in U.S. government securities.

REVERSE REPURCHASE AGREEMENTS AND MORTGAGE DOLLAR ROLLS

The Fund may engage in reverse repurchase agreements to facilitate portfolio
liquidity, a practice common in the mutual fund industry, or for arbitrage
transactions as discussed below. In a reverse repurchase agreement, the Fund
would sell a security and enter into an agreement to repurchase the security at
a specified future date and price. The Fund generally retains the right to
interest and principal payments on the security. Since the Fund receives cash
upon entering into a reverse repurchase agreement, it may be considered a
borrowing. When required by guidelines of the SEC, the Fund will set aside
permissible liquid assets in a segregated account to secure its obligations to
repurchase the security.

The Fund may also enter into mortgage dollar rolls, in which the Fund would
sell mortgage-backed securities for delivery in the current month and
simultaneously contract to purchase substantially similar securities on a
specified future date. While the Fund would forego principal and interest paid
on the mortgage-backed securities during the roll period, the Fund would be
compensated by the difference between the current sales price and the lower
price for the future purchase as well as by any interest earned on the proceeds
of the initial sale. The Fund also could be compensated through the receipt of
fee income equivalent to a lower forward price. At the time the Fund would
enter into a mortgage dollar roll, it would set aside permissible liquid assets
in a segregated account to secure its obligation for the forward commitment to
buy mortgage-backed securities. Mortgage dollar roll transactions may be
considered a borrowing by the Fund.

The mortgage dollar rolls and reverse repurchase agreements entered into by the
Fund may be used as arbitrage transactions in which the Fund will maintain an
offsetting position in investment grade debt obligations or repurchase
agreements that mature on or before the settlement date on the related mortgage
dollar roll or reverse repurchase agreements. Since the Fund will receive
interest on the securities or repurchase agreements in which it invests the
transaction proceeds, such transactions may involve leverage. However, since
such securities or repurchase agreements will be high quality and will mature
on or before the settlement date of the mortgage dollar roll or reverse
repurchase agreement, the Advisor believes that such arbitrage transactions do
not present the risks to the Fund that are associated with other types of
leverage.

SHORT SALES

The Fund may sell securities short (1) to hedge unrealized gains on portfolio
securities or (2) if it covers such short sale with liquid assets as required
by the current rules and positions of the SEC or its staff. Selling securities
short against the box involves selling a security that the Fund owns or has the
right to acquire, for delivery at a specified date in the future. If the Fund
sells securities short against the box, it may protect unrealized gains, but
will lose the opportunity to profit on such securities if the price rises.

SMALL AND MEDIUM COMPANIES

The Fund may invest its assets in small- and medium-capitalization companies.
While small- and medium-capitalization companies generally have the potential
for rapid growth, investments in small- and medium-capitalization companies
often involve greater risks than investments in larger, more established
companies because small- and medium-capitalization companies may lack the
management experience, financial resources, product diversification, and
competitive strengths of larger companies. In addition, in many instances the
securities of small- and medium-capitalization companies are traded only

25
<PAGE>

OTC or on a regional securities exchange, and the frequency and volume of their
trading is substantially less than is typical of larger companies. Therefore,
the securities of small- and medium-capitalization companies may be subject to
greater and more abrupt price fluctuations. When making large sales, the Fund
may have to sell portfolio holdings at discounts from quoted prices or may have
to make a series of small sales over an extended period of time due to the
trading volume of small and medium company securities. Investors should be
aware that, based on the foregoing factors, an investment in the Fund may be
subject to greater price fluctuations than an investment in the Fund that
invests primarily in larger, more established companies. The Advisor's
research efforts may also play a greater role in selecting securities for the
Fund than in the Fund that invests in larger, more established companies.

STANDBY COMMITMENTS

In order to facilitate portfolio liquidity, the Fund may acquire standby
commitments from brokers, dealers, or banks with respect to securities in its
portfolio. Standby commitments entitle the holder to achieve same-day
settlement and receive an exercise price equal to the amortized cost of the
underlying security plus accrued interest. Standby commitments generally
increase the cost of the acquisition of the underlying security, thereby
reducing the yield. Standby commitments are subject to the issuer's ability to
fulfill its obligation upon demand. Although no definitive creditworthiness
criteria are used, the Advisor reviews the creditworthiness of the brokers,
dealers, and banks from which the Fund obtains standby commitments to evaluate
those risks.

U.S. GOVERNMENT SECURITIES

U.S. government securities are issued or guaranteed by the U.S. government or
its agencies or instrumentalities. Securities issued by the government include
U.S. Treasury obligations, such as Treasury bills, notes, and bonds. Securities
issued by government agencies or instrumentalities include obligations of the
following:

- - the Federal Housing Administration, Farmers Home Administration,
Export-Import Bank of the United States, Small Business Administration, and
the Government National Mortgage Association ("GNMA"), including GNMA
pass-through certificates, whose securities are supported by the full faith
and credit of the United States;
- - the Federal Home Loan Banks, Federal Intermediate Credit Banks, and the
Tennessee Valley Authority, whose securities are supported by the right of
the agency to borrow from the U.S. Treasury;
- - the Federal National Mortgage Association, whose securities are supported by
the discretionary authority of the U.S. government to purchase certain
obligations of the agency or instrumentality; and
- - the Student Loan Marketing Association, the Interamerican Development Bank,
and International Bank for Reconstruction and Development, whose securities
are supported only by the credit of such agencies.
Although the U.S. government provides financial support to such U.S.
government-sponsored agencies or instrumentalities, no assurance can be given
that it will always do so. The U.S. government and its agencies and
instrumentalities do not guarantee the market value of their securities;
consequently, the value of such securities will fluctuate.

WARRANTS

The Fund may acquire warrants. Warrants are securities giving the holder the
right, but not the obligation, to buy the stock of an issuer at a given price
(generally higher than the value of the stock at the time of issuance) during
a specified period or perpetually. Warrants may be acquired separately or in
connection with the acquisition of securities. Warrants do not carry with
them the right to dividends or voting rights with respect to the securities
that they entitle their holder to purchase, and they do not represent any
rights in the assets of the issuer. As a result, warrants may be considered
to have more speculative characteristics than certain other types of
investments. In addition, the value of a warrant does not necessarily change
with the value of the underlying securities, and a warrant ceases to have
value if it is not exercised prior to its expiration date.

WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES

The Fund may purchase securities on a when-issued or delayed-delivery basis.
The price of debt obligations so purchased, which may be expressed in yield
terms, generally is fixed at the time the commitment to purchase is made, but
delivery and payment for the securities take place at a later date. During
the period between the purchase and settlement, no payment is made by the Fund
to the issuer and no interest on the debt obligations accrues to the Fund.
Forward commitments involve a risk of loss if the value of the security to be
purchased declines prior to the settlement date, which risk is in addition to
the risk of decline in value of the Fund's other assets. While when-issued
and delayed-delivery securities may be sold prior to the settlement date, the
Fund intends

26
<PAGE>

to purchase such securities with the purpose of actually acquiring them unless
a sale appears desirable for investment reasons. At the time the Fund makes
the commitment to purchase these types of securities, it will record the
transaction and reflect the value of the security in determining its net asset
value. The Fund does not believe that its net asset value will be adversely
affected by these types of securities purchases.

To the extent required by the SEC, the Fund will maintain cash and marketable
securities equal in value to commitments for when-issued or delayed-delivery
securities. Such segregated securities either will mature or, if necessary,
be sold on or before the settlement date. When the time comes to pay for
when-issued or delayed-delivery securities, the Fund will meet its obligations
from then-available cash flow, sale of the securities held in the separate
account, described above, sale of other securities or, although it would not
normally expect to do so, from the sale of the when-issued or delayed-delivery
securities themselves (which may have a market value greater or less than the
Fund's payment obligation).

ZERO-COUPON, STEP-COUPON, AND PAY-IN-KIND SECURITIES

The Fund may invest in zero-coupon, step-coupon, and pay-in-kind securities.
These securities are debt securities that do not make regular cash interest
payments. Zero-coupon and step-coupon securities are sold at a deep discount
to their face value. Pay-in-kind securities pay interest through the issuance
of additional securities. Because such securities do not pay current cash
income, the price of these securities can be volatile when interest rates
fluctuate. While these securities do not pay current cash income, federal
income tax law requires the holders of zero-coupon, step-coupon, and
pay-in-kind securities to include in income each year the portion of the
original issue discount (or deemed discount) and other non-cash income on such
securities accruing that year. In order to continue to qualify as a
"regulated investment company" or "RIC" under the IRC and avoid a certain
excise tax, the Fund may be required to distribute a portion of such discount
and income and may be required to dispose of other portfolio securities, which
may occur in periods of adverse market prices, in order to generate cash to
meet these distribution requirements.

27
<PAGE>

DIRECTORS AND OFFICERS

The Board of Directors of the Fund is responsible for managing the Fund's
business and affairs. Directors and officers of the Fund, together with
information as to their principal business occupations during the last five
years, and other information are shown below. Each director who is deemed an
"interested person," as defined in the 1940 Act, is indicated by an asterisk
(*). Each officer and director holds the same position with the 27 registered
open-end management investment companies consisting of 56 mutual funds
("Strong Funds"). The Strong Funds, in the aggregate, pay each Director who
is not a director, officer, or employee of the Advisor, or any affiliated
company (a "disinterested director") an annual fee of $86,000 plus $6,000 per
Board meeting, except for the Chairman of the Independent Directors Committee.
The Chairman of the Independent Directors Committee receives an annual fee of
$94,600 plus $6,600 per Board meeting. In addition, each disinterested
director is reimbursed by the Strong Funds for travel and other expenses
incurred in connection with attendance at such meetings. Other officers and
directors of the Strong Funds receive no compensation or expense reimbursement
from the Strong Funds.

*RICHARD S. STRONG (DOB 5/12/42), Director and Chairman of the Board of the
Strong Funds.

Prior to August 1985, Mr. Strong was Chief Executive Officer of the Advisor,
which he founded in 1974. Since August 1985, Mr. Strong has been a Security
Analyst and Portfolio Manager of the Advisor. In October 1991, Mr. Strong
also became the Chairman of the Advisor. Mr. Strong is a Director of the
Advisor. Mr. Strong has been in the investment management business since
1967.

MARVIN E. NEVINS (DOB 7/9/18), Director of the Strong Funds.

Private Investor. From 1945 to 1980, Mr. Nevins was Chairman of Wisconsin
Centrifugal Inc., a foundry. From 1980 until 1981, Mr. Nevins was the Chairman
of the Wisconsin Association of Manufacturers & Commerce. He has been a
Director of A-Life Medical, Inc., San Diego, CA since 1996 and Surface Systems,
Inc. (a weather information company), St. Louis, MO since 1992. He was also a
regent of the Milwaukee School of Engineering and a member of the Board of
Trustees of the Medical College of Wisconsin and Carroll College.

WILLIE D. DAVIS (DOB 7/24/34), Director of the Strong Funds.

Mr. Davis has been Director of Alliance Bank since 1980, Sara Lee Corporation
(a food/consumer products company) since 1983, KMart Corporation (a discount
consumer products company) since 1985, Dow Chemical Company since 1988, MGM
Grand, Inc. (an entertainment/hotel company) since 1990, WICOR, Inc. (a utility
company) since 1990, Johnson Controls, Inc. (an industrial company) since 1992,
Checker's Hamburger, Inc. since 1994, and MGM, Inc. (an entertainment company)
since 1998. Mr. Davis has been a trustee of the University of Chicago since
1980 and Marquette University since 1988. Since 1977, Mr. Davis has been
President and Chief Executive Officer of All Pro Broadcasting, Inc. Mr. Davis
was a Director of the Fireman's Fund (an insurance company) from 1975 until
1990.

STANLEY KRITZIK (DOB 1/9/30), Director of the Strong Funds.

Mr. Kritzik has been a Partner of Metropolitan Associates since 1962, a
Director of Aurora Health Care since 1987, and Health Network Ventures, Inc.
since 1992.

WILLIAM F. VOGT (DOB 7/19/47), Director and Chairman of the Independent
Directors Committee of the Strong Funds.

Mr. Vogt has been the President of Vogt Management Consulting, Inc. since 1990.
From 1982 until 1990, he served as Executive Director of University Physicians
of the University of Colorado. Mr. Vogt is the Past President of the Medical
Group Management Association and a Fellow of the American College of Medical
Practice Executives.

NEAL MALICKY (DOB 9/14/34), Director of the Strong Funds.

28
<PAGE>

and Colleges of the United Methodist Church, the Past Chairperson of the
Association of Independent Colleges and Universities of Ohio, and the Past
Secretary of the National Association of Independent Colleges and Universities.

STEPHEN J. SHENKENBERG (DOB 6/14/58), Vice President and Secretary of the
Strong Funds.

Mr. Shenkenberg has been Deputy General Counsel of the Advisor since November
1996. From December 1992 until November 1996, Mr. Shenkenberg acted as
Associate Counsel to the Advisor. From June 1987 until December 1992, Mr.
Shenkenberg was an attorney for Godfrey & Kahn, S.C., a Milwaukee law firm.

JOHN S. WEITZER (DOB 10/31/67), Vice President of the Strong Funds.

Mr. Weitzer has been Senior Counsel of the Advisor since December 1997. From
July 1993 until December 1997, Mr. Weitzer acted as Associate Counsel to the
Advisor.

THOMAS M. ZOELLER (DOB 2/21/64), Vice President of the Strong Funds.

Mr. Zoeller has been Senior Vice President and Chief Financial Officer of the
Advisor since February 1998 and a member of the Office of the Chief Executive
since November 1998. From October 1991 to February 1998, Mr. Zoeller was the
Treasurer and Controller of the Advisor, and from August 1991 to October 1991
he was the Controller. From August 1989 to August 1991, Mr. Zoeller was the
Assistant Controller of the Advisor. From September 1986 to August 1989, Mr.
Zoeller was a Senior Accountant at Arthur Andersen & Co.

DENNIS A. WALLESTAD (DOB 11/3/62), Vice President of the Strong Funds.

Mr. Wallestad has been Director of Finance and Operations of the Advisor since
February 1999. From April 1997 to February 1999, Mr. Wallestad was the Chief
Financial Officer of The Ziegler Companies, Inc. From November 1996 to April
1997, Mr. Wallestad was the Chief Administrative Officer of Calamos Asset
Management, Inc. From July 1994 to November 1996, Mr. Wallestad was Chief
Financial Officer for Firstar Trust and Investments Group. From September 1991
to June 1994 and from September 1985 to August 1989, Mr. Wallestad was an Audit
Manager for Arthur Andersen & Co., LLP in Milwaukee. Mr. Wallestad completed a
Masters of Accountancy from the University of Oklahoma from September 1989 to
August 1991.

JOHN W. WIDMER (DOB 1/19/65), Treasurer of the Strong Funds.

Mr. Widmer has been Treasurer of the Advisor since April 1999. From May 1997
to January 2000, Mr. Widmer was the Manager of Financial Management and Sales
Reporting Systems. From May 1992 to May 1997, Mr. Widmer was an Accounting
and Business Advisory Manager in the Milwaukee office of Arthur Andersen LLP.
From June 1987 to May 1992, Mr. Widmer was an accountant at Arthur Andersen
LLP.

RHONDA K. HAIGHT (DOB 11/13/64), Assistant Treasurer of the Strong Funds.

Ms. Haight has been Manager of the Mutual Fund Accounting Department of the
Advisor since January 1994. From May 1990 to January 1994, Ms. Haight was a
supervisor in the Mutual Fund Accounting Department of the Advisor. From June
1987 to May 1990, Ms. Haight was a Mutual Fund Accountant of the Advisor.

Except for Messrs. Nevins, Davis, Kritzik, Vogt, and Malicky, the address of
all of the above persons is P.O. Box 2936, Milwaukee, Wisconsin 53201. Mr.
Nevins' address is 6075 Pelican Bay Boulevard #1006, Naples, Florida 34108.
Mr. Davis' address is 161 North La Brea, Inglewood, California 90301. Mr.
Kritzik's address is 1123 North Astor Street, P.O. Box 92547, Milwaukee,
Wisconsin 53202-0547. Mr. Vogt's address is P.O. Box 7657, Avon, CO 81620.
Mr. Malicky's address is 518 Bishop Place, Berea, OH 44017.

29
<PAGE>

Unless otherwise noted below, as of March 31, 2000, the officers and directors
of the Fund in the aggregate beneficially owned less than 1% of any class of
the Fund's then outstanding shares.

FUND CLASS/SHARES PERCENT
- ------------------- ------------------------------ -------------------

Common Stock 2,337,374 3.43%
Enterprise Advisor Class - 292 99.70%
Growth Advisor Class - 343 99.84%
Institutional Class - 343 16.41%
Growth 20 Investor Class - 536,879 2.66%
Advisor Class - 410 99.43%
Mid Cap Disciplined 57,123 12.66%
Opportunity Advisor Class - 348 100%
Strategic Growth 53,418 13.74%
</TABLE>

PRINCIPAL SHAREHOLDERS

Unless otherwise noted below, as of March 31, 2000 no persons owned of record
or are known to own of record or beneficially more than 5% of any class of the
Fund's then outstanding shares.

NAME AND ADDRESS FUND/CLASS/SHARES PERCENT
- ------------------------------------------------------------------------------------
Emre & Co. Common Stock - 6,013,196 8.81%
P.O. Box 1408
Milwaukee, WI 53201-1408

Mitra & Co. Common Stock - 4,237,253 6.21%
1000 N. Water St.
Milwaukee, WI 53202-6648

Strong Capital Management, Inc. Enterprise - Advisor Class - 292 99.70%*
100 Heritage Reserve
Menomonee Falls, WI 53051-4400

Emre & Co. Growth - Investor Class - 4,847,986 5.08%
P.O. Box 1408
Milwaukee, WI 53201-1408

Strong Capital Management, Inc. Growth - Advisor Class - 343 99.84%*
100 Heritage Reserve
Menomonee Falls, WI 53051-4400

City Securities Corporation (FBO) Growth - Institutional Class - 1,747 83.59%*
Susanna Kwitny
135 N. Pennsylvania, Suite 2200
Indianapolis, IN 46204

Strong Capital Management, Inc. Growth - Institutional Class - 343 16.41%
100 Heritage Reserve
Menomonee Falls, WI 53051-4400

Strong Capital Management, Inc. Growth 20 - Advisor Class - 410 99.43%*
100 Heritage Reserve
Menomonee Falls, WI 53051-4400

Strong Capital Management, Inc.
100 Heritage Reserve
Menomonee Falls, WI 53051-4400 Mid Cap Disciplined - 50,000 11.08%
</TABLE>

30
<PAGE>

Emre & Co. Mid Cap Disciplined - 31,569 7.00%
P.O. Box 1408
Milwaukee, WI 53201-1408

Strong Capital Management, Inc. Opportunity - Advisor Class - 348 100%*
100 Heritage Reserve
Menomonee Falls, WI 53051-4400

Emre & Co. Small Cap Value - 1,133,032 17.12%
P.O. Box 1408
Milwaukee, WI 53201-1408

Strong Investments, Inc. Strategic Growth - 52,539 13.51%
100 Heritage Reserve
Menomonee Falls, WI 53051-4400

Charles F. Streich Strategic Growth - 24,702 6.35%
1423 W. Westport Circle
Mequon, WI 53092-5753

</TABLE>

* This represents the initial capital of the class of shares of the Fund.

INVESTMENT ADVISOR

The Fund has entered into an Advisory Agreement with Strong Capital
Management, Inc. ("Advisor"). Mr. Strong controls the Advisor due to his
stock ownership of the Advisor. Mr. Strong is the Chairman and a Director of
the Advisor, Mr. Zoeller is Senior Vice President and Chief Financial Officer
of the Advisor, Mr. Wallestad is Senior Vice President of the Advisor, Mr.
Shenkenberg is Vice President, Secretary, Chief Compliance Officer, and Deputy
General Counsel of the Advisor, Mr. Weitzer is Senior Counsel of the Advisor,
Mr. Widmer is Treasurer of the Advisor, and Ms. Haight is Manager of the
Mutual Fund Accounting Department of the Advisor. As of March 31, 2000, the
Advisor had over $45 billion under management.

The Advisory Agreement is required to be approved annually by either the Board
of Directors of the Fund or by vote of a majority of the Fund's outstanding
voting securities (as defined in the 1940 Act). In either case, each annual
renewal must be approved by the vote of a majority of the Fund's directors who
are not parties to the Advisory Agreement or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval. The Advisory Agreement is terminable, without penalty, on 60 days
written notice by the Board of Directors of the Fund, by vote of a majority of
the Fund's outstanding voting securities, or by the Advisor, and will
terminate automatically in the event of its assignment.

Under the terms of the Advisory Agreement, the Advisor manages the Fund's
investments subject to the supervision of the Fund's Board of Directors. The
Advisor is responsible for investment decisions and supplies investment
research and portfolio management. The Advisory Agreement authorizes the
Advisor to delegate its investment advisory duties to a subadvisor in
accordance with a written agreement under which the subadvisor would furnish
such investment advisory services to the Advisor. In that situation, the
Advisor continues to have responsibility for all investment advisory services
furnished by the subadvisor under the subadvisory agreement. At its expense,
the Advisor provides office space and all necessary office facilities,
equipment and personnel for servicing the investments of the Fund. The
Advisor places all orders for the purchase and sale of the Fund's portfolio
securities at the Fund's expense.

31
<PAGE>

transfer agents (including the printing and mailing of reports and notices to
shareholders), registrars, auditing and legal services, and clerical services
related to recordkeeping and shareholder relations; printing of stock
certificates; fees for directors who are not "interested persons" of the
Advisor; expenses of indemnification; extraordinary expenses; and costs of
shareholder and director meetings.

On January 28, 2000, the Board of Directors of the Fund determined that
certain administrative services provided by the Advisor under the then current
Advisory Agreement should be provided pursuant to a separate administration
agreement, which would more clearly delineate the nature of the administrative
services to be provided and the cost to the Fund associated with those
administrative services. The Board of Directors also approved an amendment to
the Advisory Agreement ("Amended Advisory Agreement") that would remove all
references in the Advisory Agreement regarding the provision of administrative
services and approved the adoption of a separate Administration Agreement with
the Advisor. The specific terms of the new Administration Agreement are
described below. The advisory and administrative services that will be
provided under the Amended Advisory Agreement and the new Administration
Agreement for the then existing class of shares will be, at a minimum, the
same services as those provided under the then current Advisory Agreement for
the then existing class of shares, the quality of those services will remain
the same, and the personnel performing such services will remain the same.

As a result of these arrangements, the annual advisory fee paid by each Fund,
has been reduced by 0.25% of the average daily net asset value of the Fund,
effective February 24, 2000. In no event will the fees under the
Administrative Agreement for the Investor Class and Advisor Class shares of
these Funds exceed 0.25% of the average daily net asset value of the Fund. In
no event will the fees under the Administrative Agreement for the
Institutional Class shares of the Fund exceed 0.02% of the average daily net
asset value of the Fund.

The Institutional and Advisor Class shares of the Growth Fund and the Advisor
Class shares of the Enterprise, Growth 20, and Opportunity Funds were not
affected by the new advisory and administrative agreements because these
classes of funds were first offered for sale on February 24, 2000.

As compensation for its advisory services, the Fund pays to the Advisor a
monthly management fee at the annual rate specified below of the average daily
net asset value of the Fund. From time to time, the Advisor may voluntarily
waive all or a portion of its management fee for the Fund.

<TABLE>
<CAPTION>
<S> <C> <C>
FUND CURRENT ANNUAL RATE ANNUAL RATE PRIOR TO 2/24/00
- ------------------------- ------------------------- ----------------------------
Common Stock Fund 0.75% 1.00%
Discovery Fund 0.75% 1.00%
Enterprise Fund 0.75% 1.00%
Growth Fund 0.75% 1.00%
Growth 20 Fund 0.75% 1.00%
Mid Cap Disciplined Fund 0.75% 1.00%
Mid Cap Growth Fund 0.75% 1.00%
Opportunity Fund 0.75% 1.00%
Small Cap Value Fund 0.75% 1.00%
Strategic Growth Fund 0.75% 1.00%
U.S. Emerging Growth Fund 0.75% 1.00%
Value Fund 1.00% 1.00%
</TABLE>

32
<PAGE>

The Fund paid the following management fees for the time periods indicated:

<TABLE>
<CAPTION>
<S> <C> <C> <C>
MANAGEMENT FEE
FISCAL YEAR ENDED MANAGEMENT FEE ($) WAIVER ($) AFTER WAIVER ($)
- ----------------- ------------------ ---------------- ----------------
</TABLE>

Common Stock Fund

12/31/97 14,265,537 0 14,265,537
12/31/98 15,452,856 0 15,452,856
12/31/99 14,472,235 0 14,472,235
</TABLE>

Discovery Fund

12/31/97 3,953,837 0 3,953,837
12/31/98 3,425,884 0 3,425,884
12/31/99 2,300,355 0 2,300,355
</TABLE>

Enterprise Fund

Growth Fund

12/31/97 15,115,440 0 15,115,440
12/31/98 16,039,806 0 16,039,806
12/31/99 21,857,266 0 21,857,266
</TABLE>

Growth 20 Fund

Mid Cap Disciplined Fund

Mid Cap Growth Fund

Opportunity Fund

12/31/97 18,114,956 0 18,114,956
12/31/98 20,312,655 0 20,312,655
12/31/99 21,885,763 0 21,885,763
</TABLE>

Small Cap Value Fund

33
<PAGE>

Strategic Growth Fund

U.S. Emerging Growth Fund

Value Fund

12/31/97 750,219 0 750,219
12/31/98 948,313 0 948,313
12/31/99 772,670 0 772,670
</TABLE>

(1) Commenced operations on September 29, 1998
(2) Commenced operations on June 30, 1997.
(3) Commenced operations on May 20, 1998.

The organizational expenses for the Fund which were advanced by the Advisor
and which will be reimbursed by the Fund over a period of not more than 60
months from the Fund's date of inception are listed below.

<TABLE>
<CAPTION>
<S> <C>
FUND ORGANIZATIONAL EXPENSES
- ---------------------- -----------------------

Growth 20 Fund $1,355
Mid Cap Growth Fund $5,044
Small Cap Value Fund $12,120
Value Fund $1,638
</TABLE>

The Advisory Agreement requires the Advisor to reimburse the Fund in the event
that the expenses and charges payable by the Fund in any fiscal year,
including the management fee but excluding taxes, interest, brokerage
commissions, and similar fees and to the extent permitted extraordinary
expenses, exceed two percent (2%) of the average net asset value of the Fund
for such year, as determined by valuations made as of the close of each
business day of the year. Reimbursement of expenses in excess of the
applicable limitation will be made on a monthly basis and will be paid to the
Fund by reduction of the Advisor's fee, subject to later adjustment, month by
month, for the remainder of the Fund's fiscal year. The Advisor may from time
to time voluntarily absorb expenses for the Fund in addition to the
reimbursement of expenses in excess of applicable limitations.

On July 12, 1994, the SEC filed an administrative action ("Order") against the
Advisor, Mr. Strong, and another employee of the Advisor in connection with
conduct that occurred between 1987 and early 1990. In re Strong/Corneliuson
Capital Management, Inc., et al. Admin. Proc. File No. 3-8411. The proceeding
was settled by consent without admitting or denying the allegations in the
Order. The Order found that the Advisor and Mr. Strong aided and abetted
violations of Section 17(a) of the 1940 Act by effecting trades between mutual
funds, and between mutual funds and Harbour Investments Ltd. ("Harbour"),
without complying with the exemptive provisions of SEC Rule 17a-7 or otherwise
obtaining an exemption. It further found that the Advisor violated, and Mr.
Strong aided and abetted violations of, the disclosure provisions of the 1940
Act and the Investment Advisers Act of 1940 by misrepresenting the Advisor's
policy on personal trading and by failing to disclose trading by Harbour, an
entity in which principals of the Advisor owned between 18 and 25 percent of
the voting stock. As part of the settlement, the respondents agreed to a
censure and a cease and desist order and the Advisor agreed to various
undertakings, including adoption of certain procedures and a limitation for
six months on accepting certain types of new advisory clients.

On June 6, 1996, the Department of Labor ("DOL") filed an action against the
Advisor for equitable relief alleging violations of the Employee Retirement
Income Security Act of 1974 ("ERISA") in connection with cross trades that
occurred between 1987 and late 1989 involving certain pension accounts managed
by the Advisor. Contemporaneous with this filing, the Advisor, without
admitting or denying the DOL's allegations, agreed to the entry of a consent
judgment resolving all matters relating to the allegations. Reich v. Strong
Capital Management, Inc., (U.S.D.C. E.D. WI) ("Consent Judgment"). Under the
terms of the Consent Judgment, the Advisor agreed to reimburse the affected
accounts a total of $5.9 million. The settlement did not have any material
impact on the Advisor's financial position or operations.

34
<PAGE>

The Fund and the Advisor have adopted a Code of Ethics ("Code") which governs
the personal trading activities of all "Access Persons" of the Advisor.
Access Persons include every director and officer of the Advisor and the
investment companies managed by the Advisor, including the Fund, as well as
certain employees of the Advisor who have access to information relating to
the purchase or sale of securities by the Advisor on behalf of accounts
managed by it. The Code is based upon the principal that such Access Persons
have a fiduciary duty to place the interests of the Fund and the Advisor 's
other clients ahead of their own.

The Code requires Access Persons (other than Access Persons who are
independent directors of the investment companies managed by the Advisor,
including the Fund) to, among other things, preclear their securities
transactions (with limited exceptions, such as transactions in shares of
mutual funds, direct obligations of the U.S. government, and certain options
on broad-based securities market indexes) and to execute such transactions
through the Advisor's trading department. The Code, which applies to all
Access Persons (other than Access Persons who are independent directors of the
investment companies managed by the Advisor, including the Fund), includes a
ban on acquiring any securities in an initial public offering, other than a
new offering of a registered open-end investment company, and a prohibition
from profiting on short-term trading in securities. In addition, no Access
Person may purchase or sell any security which is contemporaneously being
purchased or sold, or to the knowledge of the Access Person, is being
considered for purchase or sale, by the Advisor on behalf of any mutual fund
or other account managed by it. Finally, the Code provides for trading "black
out" periods of seven calendar days during which time Access Persons who are
portfolio managers may not trade in securities which have been purchased or
sold by any mutual fund or other account managed by the portfolio manager.

The Advisor provides investment advisory services for multiple clients through
different types of investment accounts (E.G., mutual funds, hedge funds,
separately managed accounts, etc.) who may have similar or different
investment objectives and investment policies (E.G., some accounts may have an
active trading strategy while others follow a "buy and hold" strategy). In
managing these accounts, the Advisor seeks to maximize each account's return,
consistent with the account's investment objectives and investment strategies.
While the Advisor's policies are designed to ensure that over time
similarly-situated clients receive similar treatment, to the maximum extent
possible, because of the range of the Advisor's clients, the Advisor may give
advice and take action with respect to one account that may differ from the
advice given, or the timing or nature of action taken, with respect to another
account (the Advisor, its principals and associates also may take such actions
in their personal securities transactions, to the extent permitted by and
consistent with the Code). For example, the Advisor may use the same
investment style in managing two accounts, but one may have a shorter-term
horizon and accept high-turnover while the other may have a longer-term
investment horizon and desire to minimize turnover. If the Advisor reasonably
believes that a particular security may provide an attractive opportunity due
to short-term volatility but may no longer be attractive on a long-term basis,
the Advisor may cause accounts with a shorter-term investment horizon to buy
the security at the same time it is causing accounts with a longer-term
investment horizon to sell the security. The Advisor takes all reasonable
steps to ensure that investment opportunities are, over time, allocated to
accounts on a fair and equitable basis relative to the other
similarly-situated accounts and that the investment activities of different
accounts do not unfairly disadvantage other accounts.

From time to time, the Advisor votes the shares owned by the Fund according to
its Statement of General Proxy Voting Policy ("Proxy Voting Policy"). The
general principal of the Proxy Voting Policy is to vote any beneficial
interest in an equity security prudently and solely in the best long-term
economic interest of the Fund and its beneficiaries considering all relevant
factors and without undue influence from individuals or groups who may have an
economic interest in the outcome of a proxy vote. Shareholders may obtain a
copy of the Proxy Voting Policy upon request from the Advisor.

The Advisor also provides a program of custom portfolio management called the
Strong Advisor. This program is designed to determine which investment
approach fits an investor's financial needs and then provides the investor
with a custom built portfolio of Strong Funds based on that allocation. The
Advisor, on behalf of participants in the Strong Advisor program, may
determine to invest a portion of the program's assets in any one Strong Fund,
which investment, particularly in the case of a smaller Strong Fund, could
represent a material portion of the Fund's assets. In such cases, a decision
to redeem the Strong Advisor program's investment in a Fund on short notice
could raise a potential conflict of interest for the Advisor, between the
interests of participants in the Strong Advisor program and of the Fund's
other shareholders. In general, the Advisor does not expect to direct the
Strong Advisor program to make redemption requests on short notice. However,
should the Advisor determine this to be necessary, the Advisor will use its
best efforts and act in good faith to balance the potentially competing
interests of participants in the Strong Advisor program and the Fund's other
shareholders in a manner the Advisor deems most appropriate for both parties
in light of the circumstances.

35
<PAGE>

From time to time, the Advisor may make available to third parties current and
historical information about the portfolio holdings of the Advisor's mutual
funds or other clients. Release may be made to entities such as fund ratings
entities, industry trade groups, and financial publications. Generally, the
Advisor will release this type of information only where it is otherwise
publicly available. This information may also be released where the Advisor
reasonably believes that the release will not be to the detriment of the best
interests of its clients.

For more complete information about the Advisor, including its services,
investment strategies, policies, and procedures, please call 800-368-3863 and
ask for a copy of Part II of the Advisor's Form ADV.

INVESTMENT SUBADVISOR

U.S. EMERGING GROWTH FUND

The Advisor has entered into a Subadvisory Agreement with Next Century Growth
Investors, LLC ("Subadvisor") with respect to the Fund. Under the terms of
the Subadvisory Agreement, the Subadvisor furnishes investment advisory and
portfolio management services to the Fund with respect to its investments.
The Subadvisor is responsible for decisions to buy and sell the Fund's
investments and all other transactions related to investment and the
negotiation of brokerage commissions, if any, except that the Advisor is
responsible for managing the cash equivalent investments maintained by the
Fund in the ordinary course of its business and which, on average, are
expected to equal approximately 5% of the Fund's total assets. During the
term of the Subadvisory Agreement, the Subadvisor will bear all expenses
incurred by it in connection with its services under such agreement.

The Subadvisory Agreement may be terminated at any time, without payment of any
penalty, by vote of the Board of Directors of the fund or buy a vote of a
majority of the outstanding voting securities of the Fund on 60 days written
notice to the Subadvisor. The Subadvisory Agreement may also be terminated by
the Advisor for breach upon 20 days notice, immediately in the event that the
Subadvisor becomes unable to discharge its duties and obligations, and upon 60
days notice for any reason. The Subadvisory Agreement may be terminated by the
Subadvisor upon 180 days notice for any reason. The Subadvisory Agreement will
terminate automatically in the event of its unauthorized assignment.

The Subadvisory Agreement requires the Advisor, not the Fund, to pay the
Subadvisor a monthly fee based on the following annual rate. The Advisor will
pay the Subadvisor a fee equal to an annual rate of 0.50% of the Fund's
average daily net asset value minus 50% of any payments the Advisor is
obligated to make to third party financial intermediaries for various
administrative services such third party intermediaries provide for the Fund's
shareholders who invest through them.

The Subadvisor received the following subadvisory fees from the Advisor for
the time periods indicated.

<TABLE>
<CAPTION>
<S> <C>
FISCAL YEAR ENDED SUBADVISORY FEE ($)
- ------------------- -------------------
12/31/99 54,763
</TABLE>

The Subadvisor has adopted a Code of Ethics which is substantially identical
to the Code discussed above under "Investment Advisor."

The Fund's portfolio managers and one other person ("Investment Managers"),
and the Advisor entered into a Limited Liability Company Agreement (the "LLC
Agreement") forming the Subadvisor. Mr. Thomas L. Press, one of the
Investment Managers of the Subadvisor, controls the Subadvisor pursuant to the
terms of the LLC Agreement. The Advisor's ownership interest in the
Subadvisor may raise conflicts of interest in some situations.

The LLC Agreement provides that the Subadvisor shall be managed and controlled
by the Subadvisor's Board of Directors. Currently, there are three directors.
One of the directors is designated by the Advisor. The LLC Agreement grants
to the Advisor, subject to applicable regulatory requirements, a right of
first refusal pursuant to which the Advisor may purchase, under certain
circumstances, and subject to certain restrictions any selling Investment
Manager's interest in the Subadvisor. The Advisor has sole responsibility for
all distribution and marketing activities relating to the Fund's shares for as
long as the Advisor is a member of the Subadvisor. In addition to the Fund,
the Subadvisor is an investment subadvisor to other accounts for which the
Advisor acts as investment advisor.

36
<PAGE>

VALUE FUND

The Advisor has entered into a Subadvisory Agreement with Sloate, Weisman,
Murray & Company, Inc. ("Subadvisor") with respect to the Value Fund. Under
the terms of the Subadvisory Agreement, the Subadvisor furnishes investment
advisory and portfolio management services to the Fund with respect to its
investments. The Subadvisor is responsible for decisions to buy and sell the
Fund's investments and all other transactions related to investments and the
negotiation of brokerage commissions, if any, except that the Advisor is
responsible for managing the cash equivalent investments maintained by the
Fund in the ordinary course of its business and which, on average, are
expected to equal approximately five to seven percent of the Fund's total
assets. Purchases and sales of securities on a securities exchange are
effected through brokers who charge a negotiated commission for their
services. During the term of the Subadvisory Agreement, the Subadvisor will
bear all expenses incurred by it in connection with its services under such
agreement.

The Subadvisory Agreement requires the Advisor, not the Fund, to pay the
Subadvisor a monthly fee based on the following annual rates. The Advisor
will pay the Subadvisor 60% of management fees collected by the Advisor from
the Fund on $74 million, 50% of management fees collected by the Advisor from
the Fund on net assets from $74 million to $300 million in the Fund, and 40%
of management fees collected by the Advisor from the Fund on assets in excess
of $300 million in the Fund.

The Advisor has one relationship with the Subadvisor that is not related to
the subadvisory arrangement for the fund. For more than 10 years, the Advisor
has obtained third party investment research from the Subadvisor through soft
dollar brokerage arrangements with various broker-dealers.

The Subadvisor received the following subadvisory fees from the Advisor for
the time periods indicated.

<TABLE>
<CAPTION>
<S> <C>
FISCAL YEAR ENDED SUBADVISORY FEE ($)
- ------------------- -------------------

12/31/97 439,090
12/31/98 546,267
12/31/99 472,762
</TABLE>

ADMINISTRATOR

The Fund has entered into a separate administration agreement with the Advisor
in order to provide administration services to the Fund that previously were
provided under the Advisory Agreement ("Administration Agreement").

The Fund has adopted a Rule 18f-3 Plan under the 1940 Act ("Multi-Class Plan").
The Multi-Class Plan permits the Fund to have multiple classes of shares. The
Fund has entered into a separate administration agreement with the Advisor for
each of its separate class of shares ("Administration Agreement - Investor
Class," "Administration Agreement - Institutional Class," and "Administration
Agreement - Advisor Class"). The Growth Fund currently offers three classes of
shares: Investor Class shares, Advisor Class shares, and Institutional Class
shares. The Enterprise, Growth 20, and Opportunity Funds currently offer two
classes of shares: Investor Class shares and Advisor Class shares. The Common
Stock, Mid Cap Disciplined, Mid Cap Growth, Small Cap Value, Strategic Growth,
U.S. Emerging Growth, and Value Funds currently offer only one class of shares:
Investor Class shares.

The fees received and the services provided by the Advisor, as administrator,
are in addition to fees received and services provided by the Advisor under the
Amended Advisory Agreement.

ADMINISTRATION AGREEMENT - INVESTOR CLASS

Under the Administration Agreement - Investor Class, the Advisor provides
certain administrative functions for the Investor Class shares of the Fund,
including: (i) authorizing expenditures and approving bills for payment on
behalf of the Fund and the Investor Class shares; (ii) supervising preparation
of the periodic updating of the Fund's registration statements with respect to
the Investor Class shares, including Investor Class prospectuses and
statements of additional information, for the purpose of filings with the SEC
and state securities administrators and monitoring and maintaining the
effectiveness of such filings, as appropriate; (iii) supervising preparation
of shareholder reports, notices of dividends, capital gains distributions and
tax credits for the Fund's Investor Class shareholders, and attending to
routine correspondence and other communications with individual Investor Class
shareholders; (iv) supervising the daily pricing of the Fund's investment
portfolios and the publication of the respective net asset values of the
Investor Class shares of the Fund, earnings reports and other financial data
to the extent required by the Fund's

37
<PAGE>

Advisory Agreement prior to the adoption of this Administration Agreement; (v)
monitoring relationships with organizations providing services to the Fund,
with respect to the Investor Class shares, including the Custodian, DST and
printers; (vi) supervising compliance by the Fund, with respect to the Investor
Class Shares, with recordkeeping requirements under the 1940 Act and
regulations thereunder, maintaining books and records for the Fund (other than
those maintained by the Custodian and the Fund's transfer agent) and preparing
and filing of tax reports other than the Fund's income tax returns;
(vii) answering shareholder inquiries regarding account status and history, the
manner in which purchases and redemptions of the Investor Class shares may be
effected, and certain other matters pertaining to the Investor Class shares;
(viii) assisting shareholders in designating and changing dividend options,
account designations and addresses; (ix) providing necessary personnel and
facilities to coordinate the establishment and maintenance of shareholder
accounts and records with the Fund's transfer agent; (x) transmitting
shareholders' purchase and redemption orders to the Fund's transfer agent; (xi)
arranging for the wiring or other transfer of funds to and from shareholder
accounts in connection with shareholder orders to purchase or redeem Investor
Class shares; (xii) verifying purchase and redemption orders, transfers among
and changes in shareholder-designated accounts; (xiii) informing the
distributor of the gross amount of purchase and redemption orders for Investor
Class shares; and (xiv) providing such other related services as the Fund or a
shareholder may reasonably request, to the extent permitted by applicable law.
For its services for the Investor Class shares of the Fund under the
Administration Agreement - Investor Class, the Advisor receives a monthly fee
from the Fund at the annual rate of 0.25% of the Fund's average daily net
assets attributable to the Investor Class shares.

ADMINISTRATION AGREEMENT - INSTITUTIONAL CLASS

Under the Administration Agreement - Institutional Class, the Advisor provides
certain administrative functions for the Institutional Class shares of the
Fund, including: (i) authorizing expenditures and approving bills for payment
on behalf of the Fund and the Institutional Class shares; (ii) supervising
preparation of the periodic updating of the Fund's registration statements
with respect to the Institutional Class shares, including Institutional Class
prospectuses and statements of additional information, for the purpose of
filings with the SEC and state securities administrators and monitoring and
maintaining the effectiveness of such filings, as appropriate; (iii)
supervising preparation of shareholder reports, notices of dividends, capital
gains distributions and tax credits for the Fund's Institutional Class
shareholders, and attending to routine correspondence and other communications
with individual shareholders; (iv) supervising the daily pricing of the Fund's
investment portfolios and the publication of the respective net asset values
of the Institutional Class shares of the Fund, earnings reports and other
financial data to the extent required by the Fund's Advisory Agreement prior
to the adoption of this Administration Agreement; (v) monitoring relationships
with organizations providing services to the Fund, with respect to the
Institutional Class shares, including the Custodian, DST and printers; (vi)
supervising compliance by the Fund, with respect to the Institutional Class
shares, with recordkeeping requirements under the 1940 Act and regulations
thereunder, maintaining books and records for the Fund (other than those
maintained by the Custodian and the Fund's transfer agent) and preparing and
filing of tax reports other than the Fund's income tax returns; (vii)
transmitting shareholders' purchase and redemption orders to the Fund's
transfer agent; (viii) arranging for the wiring or other transfer of funds to
and from shareholder accounts in connection with shareholder orders to
purchase or redeem Institutional Class shares; (ix) verifying purchase and
redemption orders, transfers among and changes in shareholder-designated
accounts; (x) informing the distributor of the gross amount of purchase and
redemption orders for Institutional Class shares; and (xi) providing such
other related services as the Fund or a shareholder may reasonably request, to
the extent permitted by applicable law. For its services for the
Institutional Class shares of the Fund under the Administration Agreement -
Institutional Class, the Advisor receives a monthly fee from the Fund at the
annual rate of 0.02% of the Fund's average daily net assets attributable to
the Institutional Class shares.

ADMINISTRATION AGREEMENT - ADVISOR CLASS
Under the Administration Agreement - Advisor Class, the Advisor provides
certain administrative functions for the Advisor Class shares of the Fund,
including: (i) authorizing expenditures and approving bills for payment on
behalf of the Fund and the Advisor Class shares; (ii) supervising preparation
of the periodic updating of the Fund's registration statements with respect to
the Advisor Class shares, including Advisor Class prospectuses and statements
of additional information, for the purpose of filings with the SEC and state
securities administrators and monitoring and maintaining the effectiveness of
such filings, as appropriate; (iii) supervising preparation of shareholder
reports, notices of dividends, capital gains distributions and tax credits for
the Fund's Advisor Class shareholders, and attending to routine correspondence
and other communications with individual shareholders; (iv) supervising the
daily pricing of the Fund's investment portfolios and the publication of the
respective net asset values of the Advisor Class shares of the Fund, earnings
reports and other financial data to the extent required by the Fund's Advisory
Agreement prior to the adoption of this Administration Agreement; (v)
monitoring relationships with organizations providing services to the Fund,
with respect to the Advisor Class shares, including the Custodian, DST and
printers; (vi) supervising

38
<PAGE>

compliance by the Fund, with respect to the Advisor Class shares, with
recordkeeping requirements under the 1940 Act and regulations thereunder,
maintaining books and records for the Fund (other than those maintained by the
Custodian and the Fund's transfer agent) and preparing and filing of tax
reports other than the Fund's income tax returns; (vii) providing necessary
personnel and facilities to coordinate the establishment and maintenance of
shareholder accounts and records with the Fund's transfer agent;
(viii) transmitting shareholders' purchase and redemption orders to the Fund's
transfer agent; (ix) arranging for the wiring or other transfer of funds to and
from shareholder accounts in connection with shareholder orders to purchase or
redeem Advisor Class shares; (x) verifying purchase and redemption orders,
transfers among and changes in shareholder-designated accounts; (xi) informing
the distributor of the gross amount of purchase and redemption orders for
Advisor Class shares; and (xii) providing such other related services as the
Fund or a shareholder may reasonably request, to the extent permitted by
applicable law. For its services for the Advisor Class shares of the Fund
under the Administration Agreement - Advisor Class, the Advisor receives a
monthly fee from the Fund at the annual rate of 0.25% of the Fund's average
daily net assets attributable to the Advisor Class shares.

DISTRIBUTOR

Under a Distribution Agreement with the Fund ("Distribution Agreement"),
Strong Investments, Inc. ("Distributor"), P.O. Box 2936, Milwaukee, Wisconsin,
53201, acts as underwriter of the Fund's shares. Mr. Strong is the Chairman
and Director of the Distributor, and Mr. Shenkenberg is Vice President, Chief
Compliance Officer and Secretary of the Distributor. The Distribution
Agreement provides that the Distributor will use its best efforts to
distribute the Fund's shares. The Distribution Agreement further provides
that the Distributor will bear the additional costs of printing prospectuses
and shareholder reports which are used for selling purposes, as well as
advertising and any other costs attributable to the distribution of the Fund's
shares. The Distributor is a direct subsidiary of the Advisor and controlled
by the Advisor and Richard S. Strong. The Distribution Agreement is subject
to the same termination and renewal provisions as are described above with
respect to the Advisory Agreement.

The Investor Class shares of the Fund and the Institutional Class shares of
the Growth Fund are offered on a "no-load" basis, which means that no sales
commissions are charged on the purchases of those shares.

The Advisor Class shares of each Fund are offered at net asset value plus an
initial sales charge. The "offering price" is the initial sales charge plus
the net asset value. The Distributor may pay up to 100% of the applicable
initial sales charges due upon the purchase of the Advisor Class shares to the
brokers, if any, involved in the transaction. As compensation for its
services under the Distribution Agreement, the Distributor may retain all or a
portion of the initial sales charge from purchases of Advisor Class shares of
the Enterprise, Growth, Growth 20, and Opportunity Funds. See Appendix B for
more information on Advisor Class shares, including sales charge break points
and waivers.

Pursuant to a distribution plan adopted on behalf of the Advisor Class shares
of the Enterprise, Growth, Growth 20, and Opportunity Funds in accordance to
Rule 12b-1 ("Rule 12b-1 Plan") under the 1940 Act, the Distribution Agreement
for the Advisor Class shares of the Fund authorizes the Fund to bear the costs
of preparing and mailing prospectuses and shareholder reports that are used
for selling purposes as well as advertising and other costs attributable to
the distribution of those shares. Under the Distribution Agreement for the
Advisor Class shares of the Fund, payments to the Distributor under the Rule
12b-1 Plan are limited to payment at an annual rate equal of 0.25% of average
daily net assets attributable to Advisor Class shares.

From time to time, the Distributor may hold in-house sales incentive programs
for its associated persons under which these persons may receive compensation
awards in connection with the sale and distribution of the Fund's shares.
These awards may include items such as, but not limited to, cash, gifts,
merchandise, gift certificates, and payment of travel expenses, meals, and
lodging. Any in-house sales incentive program will be conducted in accordance
with the rules of the National Association of Securities Dealers, Inc.
("NASD").

39
<PAGE>

THE FOLLOWING SECTION APPLIES TO THE ADVISOR CLASS SHARES OF THE ENTERPRISE,
GROWTH, GROWTH 20, AND OPPORTUNITY FUNDS ONLY.

DISTRIBUTION PLAN

The Fund has adopted a Rule 12b-1 Plan pursuant to Rule 12b-1 under the 1940
Act, on behalf of the Advisor Class shares of the Fund. The Rule 12b-1 Plan
authorizes the Fund, with respect to its Advisor Class shares, to make
payments to the Distributor in connection with the distribution of its Advisor
Class shares at an annual rate of up to 1.00% of the Fund's average daily net
assets attributable to its Advisor Class shares. However, under the
Distribution Agreement for the Advisor Class shares of the Fund, payments to
the Distributor under the Rule 12b-1 Plan are limited to payment at an annual
rate equal of 0.25% of average daily net assets attributable to Advisor Class
shares. Amounts received by the Distributor under the Distribution Agreement
for the Advisor Class shares of the Fund may be spent by the Distributor for
any activities or expenses primarily intended to result in the sale of Advisor
Class shares or the servicing of shareholders, including, but not limited to:
compensation to and expenses, including overhead and telephone expenses, of
employees of the Distributor who engage in or support the distribution of
Advisor Class shares; printing and distribution of prospectuses, statements of
additional information and any supplements thereto, and shareholder reports to
persons other than existing shareholders; preparation, printing and
distribution of sales literature and advertising materials; holding seminars
and sales meetings with wholesale and retail sales personnel, which are
designed to promote the distribution of Advisor Class shares; and compensation
of broker-dealers. The Distributor may determine the services to be provided
by the broker-dealer to shareholders in connection with the sale of Advisor
Class shares. All or any portion of the compensation paid to the Distributor
may be reallocated by the Distributor to broker-dealers who sell Advisor Class
shares.

The Rule 12b-1 Plan is known as a "compensation" plan because payments under
the Rule 12b-1 Plan are made for services rendered to the Fund with respect to
its Advisor Class shares regardless of the level of expenditures by the
Distributor. The Board of Directors of the Fund, however, will take into
account any expenditures made by the Distributor for purposes of both their
quarterly review of the operation of the Rule 12b-1 Plan and in connection
with their annual consideration of the Rule 12b-1 Plan's renewal.

The Rule 12b-1 Plan will continue in effect from year to year, provided that
such continuance is approved annually by a vote of the Board of Directors of
the Fund, and a majority of the Directors of the Fund who are not interested
persons (as defined in the 1940 Act) of the Fund and have no direct or
indirect financial interest in the operation of the Rule 12b-1 Plan or any
agreements related to the Rule 12b-1 Plan ("Rule 12b-1 Independent
Directors"), cast in person at a meeting called for the purpose of voting on
the Rule 12 b-1 Plan. The Rule 12b-1 Plan may not be amended to increase
materially the amount to be spent for the services described in the Rule 12b-1
Plan without the approval of the Advisor Class shareholders of the Fund, and
all material amendments to the Rule 12b-1 Plan must also be approved by the
Directors in the manner described above. The Rule 12b-1 Plan may be
terminated at any time, without payment of a penalty, by a vote of a majority
of the Rule 12b-1 Independent Directors, or by a vote of a majority of the
outstanding voting securities of the Fund (as defined in the 1940 Act) on not
more than 60 days' written notice to any other party to the Rule 12b-1 Plan.
The Board of Directors of the Fund and the Rule 12b-1 Independent Directors
have determined that, in their judgment, there is a reasonable likelihood that
the Rule 12b-1 Plan will benefit the Fund and its Advisor Class shareholders.
Under the Rule 12b-1 Plan, the Distributor will provide the Board of Directors
of the Fund and the Directors will review, at least quarterly, a written
report of the amounts expended under the Rule 12b-1 Plan and the purposes for
which such expenditures were made. As part of their quarterly review of the
Rule 12b-1 Plan, the Directors will consider the continued appropriateness of
the Rule 12b-1 Plan and the level of compensation provided thereunder.

PORTFOLIO TRANSACTIONS AND BROKERAGE

The Advisor is responsible for decisions to buy and sell securities for the
Fund and for the placement of the Fund's investment business and the
negotiation of the commissions to be paid on such transactions. Reference in
this section to the Advisor also refer to the Subadvisor unless indicated
otherwise. It is the policy of the Advisor, to seek the best execution at the
best security price available with respect to each transaction, in light of
the overall quality of brokerage and research services provided to the
Advisor, or the Fund. In OTC transactions, orders are placed directly with a
principal market maker unless it is believed that a better price and execution
can be obtained using a broker. The best price to the Fund means the best net
price without regard to the mix between purchase or sale price and
commissions, if any. In selecting broker-dealers and in negotiating
commissions, the Advisor considers a variety of factors, including best price
and execution, the full range of brokerage services provided by the broker, as
well as its capital strength and stability, and the quality of the research
and research services provided by the broker. Brokerage will not be allocated
based on the sale of any shares of the Strong Funds.

40
<PAGE>

The Advisor is responsible for decisions to buy and sell securities for the
Fund and for the placement of the Fund's investment business and the
negotiation of the commissions to be paid on such transactions. It is the
policy of the Advisor, to seek the best execution at the best security price
available with respect to each transaction, in light of the overall quality of
brokerage and research services provided to the Advisor, or the Fund. In OTC
transactions, orders are placed directly with a principal market maker unless
it is believed that a better price and execution can be obtained using a
broker. The best price to the Fund means the best net price without regard to
the mix between purchase or sale price and commissions, if any. In selecting
broker-dealers and in negotiating commissions, the Advisor considers a variety
of factors, including best price and execution, the full range of brokerage
services provided by the broker, as well as its capital strength and
stability, and the quality of the research and research services provided by
the broker. Brokerage will not be allocated based on the sale of any shares
of the Strong Funds.

The Advisor has adopted procedures that provide generally for the Advisor to
seek to bunch orders for the purchase or sale of the same security for the
Fund, other mutual funds managed by the Advisor, and other advisory clients
(collectively, "client accounts"). The Advisor will bunch orders when it
deems it to be appropriate and in the best interest of the client accounts.
When a bunched order is filled in its entirety, each participating client
account will participate at the average share price for the bunched order on
the same business day, and transaction costs shall be shared pro rata based on
each client's participation in the bunched order. When a bunched order is
only partially filled, the securities purchased will be allocated on a pro
rata basis to each client account participating in the bunched order based
upon the initial amount requested for the account, subject to certain
exceptions, and each participating account will participate at the average
share price for the bunched order on the same business day.

Section 28(e) of the Securities Exchange Act of 1934 ("Section 28(e)") permits
an investment advisor, under certain circumstances, to cause an account to pay
a broker or dealer a commission for effecting a transaction in excess of the
amount of commission another broker or dealer would have charged for effecting
the transaction in recognition of the value of the brokerage and research
services provided by the broker or dealer. Brokerage and research services
include (1) furnishing advice as to the value of securities, the advisability
of investing in, purchasing or selling securities, and the availability of
securities or purchasers or sellers of securities; (2) furnishing analyses and
reports concerning issuers, industries, securities, economic factors and
trends, portfolio strategy, and the performance of accounts; and (3) effecting
securities transactions and performing functions incidental thereto (such as
clearance, settlement, and custody).

In carrying out the provisions of the Advisory Agreement, the Advisor may
cause the Fund to pay a broker, which provides brokerage and research services
to the Advisor, a commission for effecting a securities transaction in excess
of the amount another broker would have charged for effecting the transaction.
The Advisor believes it is important to its investment decision-making process
to have access to independent research. The Advisory Agreement provides that
such higher commissions will not be paid by the Fund unless (1) the Advisor
determines in good faith that the amount is reasonable in relation to the
services in terms of the particular transaction or in terms of the Advisor's
overall responsibilities with respect to the accounts as to which it exercises
investment discretion; (2) such payment is made in compliance with the
provisions of Section 28(e), other applicable state and federal laws, and the
Advisory Agreement; and (3) in the opinion of the Advisor, the total
commissions paid by the Fund will be reasonable in relation to the benefits to
the Fund over the long term. The investment management fee paid by the Fund
under the Advisory Agreement is not reduced as a result of the Advisor's
receipt of research services. To request a copy of the Advisor's Soft Dollar
Practices, please call 800-368-3863.

Generally, research services provided by brokers may include information on
the economy, industries, groups of securities, individual companies,
statistical information, accounting and tax law interpretations, political
developments, legal developments affecting portfolio securities, technical
market action, pricing and appraisal services, credit analysis, risk
measurement analysis, performance analysis, and analysis of corporate
responsibility issues. Such research services are received primarily in the
form of written reports, telephone contacts, and personal meetings with
security analysts. In addition, such research services may be provided in the
form of access to various computer-generated data, computer hardware and
software, and meetings arranged with corporate and industry spokespersons,
economists, academicians, and government representatives. In some cases,
research services are generated by third parties but are provided to the
Advisor by or through brokers. Such brokers may pay for all or a portion of
computer hardware and software costs relating to the pricing of securities.

41
<PAGE>

brokerage services, a conflict of interest may exist by reason of the Advisor's
allocation of the costs of such benefits and services between those that
primarily benefit the Advisor and those that primarily benefit the Fund and
other advisory clients.

From time to time, the Advisor may purchase new issues of securities for the
Fund in a fixed income price offering. In these situations, the seller may be
a member of the selling group that will, in addition to selling the securities
to the Fund and other advisory clients, provide the Advisor with research. The
NASD has adopted rules expressly permitting these types of arrangements under
certain circumstances. Generally, the seller will provide research "credits"
in these situations at a rate that is higher than that which is available for
typical secondary market transactions. These arrangements may not fall within
the safe harbor of Section 28(e).

The Advisor may engage in "step-out" and "give-up" brokerage transactions
subject to best price and execution. In a step-out or give-up trade, an
investment advisor directs trades to a broker-dealer who executes the
transactions while a second broker-dealer clears and settles part or all of the
transaction. The first broker-dealer then shares part of its commission with
the second broker-dealer. The Advisor engages in step-out and give-up
transactions primarily (1) to satisfy directed brokerage arrangements of
certain of its client accounts and/or (2) to pay commissions to broker-dealers
that supply research or analytical services.

At least annually, the Advisor considers the amount and nature of research and
research services provided by brokers, as well as the extent to which such
services are relied upon, and attempts to allocate a portion of the brokerage
business of the Fund and other advisory clients on the basis of that
consideration. In addition, brokers may suggest a level of business they would
like to receive in order to continue to provide such services. The actual
brokerage business received by a broker may be more or less than the suggested
allocations, depending upon the Advisor's evaluation of all applicable
considerations.

The Advisor has informal arrangements with various brokers whereby, in
consideration for providing research services and subject to Section 28(e),
the Advisor allocates brokerage to those firms, provided that the value of any
research and brokerage services was reasonable in relationship to the amount
of commission paid and was subject to best execution. In no case will the
Advisor make binding commitments as to the level of brokerage commissions it
will allocate to a broker, nor will it commit to pay cash if any informal
targets are not met. The Advisor anticipates it will continue to enter into
such brokerage arrangements.

The Advisor may direct the purchase of securities on behalf of the Fund and
other advisory clients in secondary market transactions, in public offerings
directly from an underwriter, or in privately negotiated transactions with an
issuer. When the Advisor believes the circumstances so warrant, securities
purchased in public offerings may be resold shortly after acquisition in the
immediate aftermarket for the security in order to take advantage of price
appreciation from the public offering price or for other reasons. Short-term
trading of securities acquired in public offerings, or otherwise, may result
in higher portfolio turnover and associated brokerage expenses.

With respect to the Fund's foreign equity investing, the Advisor is
responsible for selecting brokers in connection with foreign securities
transactions. The fixed commissions paid in connection with most foreign
stock transactions are usually higher than negotiated commissions on U.S.
stock transactions. Foreign stock exchanges and brokers are subject to less
government supervision and regulation as compared with the U.S. exchanges and
brokers. In addition, foreign security settlements may in some instances be
subject to delays and related administrative uncertainties.

The Advisor places portfolio transactions for other advisory accounts,
including other mutual funds managed by the Advisor. Research services
furnished by firms through which the Fund effects its securities transactions
may be used by the Advisor in servicing all of its accounts; not all of such
services may be used by the Advisor in connection with the Fund. In the
opinion of the Advisor, it is not possible to measure separately the benefits
from research services to each of the accounts managed by the Advisor. Because
the volume and nature of the trading activities of the accounts are not
uniform, the amount of commissions in excess of those charged by another
broker paid by each account for brokerage and research services will vary.
However, in the opinion of the Advisor, such costs to the Fund will not be
disproportionate to the benefits received by the Fund on a continuing basis.

The Advisor seeks to allocate portfolio transactions equitably whenever
concurrent decisions are made to purchase or sell securities by the Fund and
another advisory account. In some cases, this procedure could have an adverse
effect on the price or the amount of securities available to the Fund. In
making such allocations between the Fund and other advisory accounts, the main
factors considered by the Advisor are the respective investment objectives,
the relative size of portfolio holdings of the same or comparable securities,
the availability of cash for investment, the size of investment commitments
generally held, and the opinions of the persons responsible for recommending
the investment.

42
<PAGE>

Where consistent with a client's investment objectives, investment
restrictions, and risk tolerance, the Advisor may purchase securities sold in
underwritten public offerings for client accounts, commonly referred to as
"deal" securities. To the extent the Fund participates in deals in the initial
public offering market ("IPOs") and during the period that the Fund has a small
asset base, a significant portion of the Fund's returns may be attributable to
its IPO investments. As the Fund's assets grow, any impact of IPO investments
on the Fund's total return may decline and the Fund may not continue to
experience substantially similar performance.

The Advisor has adopted deal allocation procedures ("Procedures"), summarized
below, that reflect the Advisor's overriding policy that deal securities must
be allocated among participating client accounts in a fair and equitable
manner and that deal securities may not be allocated in a manner that unfairly
discriminates in favor of certain clients or types of clients.

The Procedures provide that, in determining which client accounts a portfolio
manager team will seek to have purchase deal securities, the team will
consider all relevant factors including, but not limited to, the nature, size,
and expected allocation to the Advisor of deal securities; the size of the
account(s); the accounts' investment objectives and restrictions; the risk
tolerance of the client; the client's tolerance for possibly higher portfolio
turnover; the amount of commissions generated by the account during the past
year; and the number and nature of other deals the client has participated in
during the past year.

Where more than one of the Advisor's portfolio manager team seeks to have
client accounts participate in a deal and the amount of deal securities
allocated to the Advisor by the underwriting syndicate is less than the
aggregate amount ordered by the Advisor (a "reduced allocation"), the deal
securities will be allocated among the portfolio manager teams based on all
relevant factors. The primary factor shall be assets under management,
although other factors that may be considered in the allocation decision
include, but are not limited to, the nature, size, and expected allocation of
the deal; the amount of brokerage commissions or other amounts generated by
the respective participating portfolio manager teams; and which portfolio
manager team is primarily responsible for the Advisor receiving securities in
the deal. Based on relevant factors, the Advisor has established general
allocation percentages for its portfolio manager teams, and these percentages
are reviewed on a regular basis to determine whether asset growth or other
factors make it appropriate to use different general allocation percentages
for reduced allocations.

When a portfolio manager team receives a reduced allocation of deal
securities, the portfolio manager team will allocate the reduced allocation
among client accounts in accordance with the allocation percentages set forth
in the team's initial allocation instructions for the deal securities, except
where this would result in a DE MINIMIS allocation to any client account. On
a regular basis, the Advisor reviews the allocation of deal securities to
ensure that they have been allocated in a fair and equitable manner that does
not unfairly discriminate in favor of certain clients or types of clients.

Transactions in futures contracts are executed through futures commission
merchants ("FCMs"). The Fund's procedures in selecting FCMs to execute the
Fund's transactions in futures contracts are similar to those in effect with
respect to brokerage transactions in securities.

The Fund paid the following brokerage commissions for the time periods
indicated:

<TABLE>
<CAPTION>
<S> <C>
FISCAL YEAR ENDED BROKERAGE COMMISSIONS ($)
- ---------------------- -------------------------
</TABLE>

Common Stock Fund

12/31/97 5,306,111
12/31/98 5,582,078
12/31/99 3,636,714
</TABLE>

43
<PAGE>

Discovery Fund

12/31/97 2,403,613
12/31/98 2,151,029
12/31/99 1,916,282
</TABLE>

Enterprise Fund

Growth Fund

12/31/97 7,256,232
12/31/98 6,906,735
12/31/99 10,493,904
</TABLE>

Growth 20 Fund

Mid Cap Disciplined Fund

Mid Cap Growth Fund

Opportunity Fund

12/31/97 5,660,826
12/31/98 5,538,205
12/31/99 5,305,390
</TABLE>

Small Cap Value Fund

Strategic Growth Fund

U.S. Emerging Growth

44
<PAGE>

Value Fund

12/31/97 196,104
12/31/98 223,166
12/31/99 227,621
</TABLE>

(1) Commenced operations on September 29, 1998
(2) Commenced operations on June 30, 1997.
(3) Commenced operations on May 20, 1998.

Unless otherwise noted below, the Fund has not acquired securities of its
regular brokers or dealers (as defined in Rule 10b-1 under the 1940 Act) or
their parents.

REGULAR BROKER OR DEALER (OR PARENT) ISSUER VALUE OF SECURITIES OWNED AS OF DECEMBER 31, 1999
- ----------------------------------------------- -------------------------------------------------
Citigroup, Inc. $3,039,000 (Enterprise)
Citigroup, Inc. $11,113,000 (Growth)
Lehman Brothers Inc. $974,000 (Mid Cap Growth)
Bear, Stearns & Company, Inc. $1,022,000 (Value)
Citigroup, Inc. $1,517,000 (Value)
</TABLE>

For the fiscal year ended December 31, 1999 and December 31, 1998, the Growth
20 Fund's portfolio turnover rate was 432.3% and 541.2%, respectively. This
portfolio turnover was high due to (1) the use of an active trading approach
to achieve the fund's investment objective of capital growth by investing in
the stocks of 20-30 growth companies, and, to a lesser degree, (2) the use tax
lot accounting to identify and sell the tax lots of a securities that have the
highest cost basis and/or longest holding period to minimize adverse tax
consequences to the Growth 20 Fund's shareholders. For the fiscal year ended
December 31, 1999, the Mid Cap Growth Fund's portfolio turnover rate was
681.0% and the Growth Fund's portfolio turnover rate was 324.0%. These
portfolio turnover rates were higher than anticipated primarily because the
Funds repositioned their portfolios in light of their investment objective,
policies, and the then prevailing market environment.

CUSTODIAN

As custodian of the Fund's assets, Firstar Bank Milwaukee, N.A., P.O. Box 761,
Milwaukee, Wisconsin 53201, has custody of all securities and cash of the
Fund, delivers and receives payment for securities sold, receives and pays for
securities purchased, collects income from investments, and performs other
duties, all as directed by officers of the Fund. The custodian is in no way
responsible for any of the investment policies or decisions of the Fund.

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

The Advisor, P.O. Box 2936, Milwaukee, Wisconsin, 53201, acts as transfer
agent and dividend-disbursing agent for the Fund. The Advisor is compensated
as follows:

45
<PAGE>

<TABLE>
<CAPTION>
<S> <C>
Equity Funds and Investor Class shares of Equity Funds $21.75 annual open account fee, $4.20 annual closed account fee
- ------------------------------------------------------ -----------------------------------------------------------------
Advisor Class shares of Equity Funds 0.20% of the average daily net asset value of all Advisor Class shares.
- ------------------------------------------------------ ---------------------------------------------------------------------
Institutional Class shares of Equity Funds 0.015% of the average daily net asset value of all Institutional Class
shares.
- ------------------------------------------------------ -----------------------------------------------------------------------
</TABLE>

* Plus out-of-pocket expenses, such as postage and printing expenses in
connection with shareholder communications.
(1) Excluding the Strong Heritage Money Fund. The fee for the Heritage Money
Fund is 0.015% of the average daily net asset value of all Advisor Class
shares.

The fees received and the services provided as transfer agent and dividend
disbursing agent are in addition to those received and provided by the Advisor
under the Administration Agreements. The fees and services provided as
transfer agent and dividend disbursing agent are in addition to those received
and provided by the Advisor under the Advisory Agreements.

From time to time, the Fund, directly or indirectly through arrangements with
the Advisor, and/or the Advisor may pay fees to third parties that provide
transfer agent type services and other administrative services to persons who
beneficially own interests in the Fund, such as participants in 401(k) plans
and shareholders who invest through other financial intermediaries. These
services may include, among other things, sub-accounting services, transfer
agent type activities, answering inquiries relating to the Fund, transmitting
proxy statements, annual reports, updated prospectuses, other communications
regarding the Fund, and related services as the Fund or beneficial owners may
reasonably request. In such cases, the Fund will not pay fees based on the
number of beneficial owners at a rate that is greater than the rate the Fund
is currently paying the Advisor for providing these services to Fund
shareholders; however, the Advisor may pay to the third party amounts in
excess of such limitation out of its own profits.

The Fund paid the following amounts for the time periods indicated for transfer
agency and dividend disbursing and printing and mailing services:

NOTE - THE FOLLOWING TABLE DOES NOT CONTAIN INFORMATION ON THE INSTITUTIONAL
OR ADVISOR CLASS SHARES OF THE GROWTH FUND OR THE ADVISOR CLASS SHARES OF THE
ENTERPRISE, GROWTH 20, OR OPPORTUNITY FUNDS SINCE THEY WERE NOT OFFERED UNTIL
FEBRUARY 24, 2000.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
OUT-OF-POCKET PRINTING/MAILING TOTAL COST AFTER
FUND FEE ($) EXPENSES ($) SERVICES ($) WAIVER ($) WAIVER ($)
- ------------ ------------ ------------- ---------------- ------------ ----------------
</TABLE>

Common Stock Fund

12/31/97 1,784,460 138,514 18,792 0 1,941,766
12/31/98 2,066,643 138,555 15,981 0 2,221,179
12/31/99 2,011,104 158,760 9,384 0 2,179,248
</TABLE>

Discovery Fund

12/31/97 1,127,401 92,494 13,482 0 1,233,377
12/31/98 905,454 71,877 11,587 0 988,918
12/31/99 663,246 71,277 4,269 0 738,792
</TABLE>

Enterprise Fund - Investor Class

46
<PAGE>

Growth Fund - Investor Class

12/31/97 3,572,665 285,939 40,770 0 3,899,374
12/31/98 3,583,549 278,220 32,416 0 3,894,185
12/31/99 4,131,273 393,038 22,423 0 4,546,734
</TABLE>

Growth 20 Fund - Investor Class

Mid Cap Disciplined Fund

Mid Cap Growth Fund

Opportunity Fund - Investor Class

12/31/97 3,388,964 204,179 30,271 0 3,623,414
12/31/98 3,447,689 217,329 28,222 0 3,693,240
12/31/99 3,304,024 284,804 16,742 0 3,605,570
</TABLE>

Small Cap Value Fund

Strategic Growth Fund(3)

U.S. Emerging Growth Fund

Value Fund

12/31/97 153,918 24,707 2,319 0 180,944
12/31/98 202,999 19,346 9,117 0 231,462
12/31/99 169,773 18,818 1,063 0 189,654
</TABLE>

(1) Commenced operations on September 29, 1998.
(2) Commenced operations on June 30, 1997.
(3) Commenced operations on July 1, 1998.

47
<PAGE>

TAXES

GENERAL

The Fund intends to qualify annually for treatment as a regulated investment
company ("RIC") under Subchapter M of the IRC. If so qualified, the Fund will
not be liable for federal income tax on earnings and gains distributed to its
shareholders in a timely manner. This qualification does not involve
government supervision of the Fund's management practices or policies. The
following federal tax discussion is intended to provide you with an overview
of the impact of federal income tax provisions on the Fund or its
shareholders. These tax provisions are subject to change by legislative or
administrative action at the federal, state, or local level, and any changes
may be applied retroactively. Any such action that limits or restricts the
Fund's current ability to pass-through earnings without taxation at the Fund
level, or otherwise materially changes the Fund's tax treatment, could
adversely affect the value of a shareholder's investment in the Fund. Because
the Fund's taxes are a complex matter, you should consult your tax adviser for
more detailed information concerning the taxation of the Fund and the federal,
state, and local tax consequences to shareholders of an investment in the
Fund.

In order to qualify for treatment as a RIC under the IRC, the Fund must
distribute to its shareholders for each taxable year at least 90% of its
investment company taxable income (consisting generally of taxable net
investment income, net short-term capital gain, and net gains from certain
foreign currency transactions, if applicable) ("Distribution Requirement") and
must meet several additional requirements. These requirements include the
following: (1) the Fund must derive at least 90% of its gross income each
taxable year from dividends, interest, payments with respect to securities
loans, and gains from the sale or other disposition of securities (or foreign
currencies if applicable) or other income (including gains from options,
futures, or forward contracts) derived with respect to its business of
investing in securities ("Income Requirement"); (2) at the close of each
quarter of the Fund's taxable year, at least 50% of the value of its total
assets must be represented by cash and cash items, U.S. government securities,
securities of other RICs, and other securities, with these other securities
limited, in respect of any one issuer, to an amount that does not exceed 5% of
the value of the Fund's total assets and that does not represent more than 10%
of the issuer's outstanding voting securities; and (3) at the close of each
quarter of the Fund's taxable year, not more than 25% of the value of its
total assets may be invested in securities (other than U.S. government
securities or the securities of other RICs) of any one issuer. There is a
30-day period after the end of each calendar year quarter in which to cure any
non-compliance with these requirements. From time to time the Advisor may
find it necessary to make certain types of investments for the purpose of
ensuring that the Fund continues to qualify for treatment as a RIC under the
IRC.

If Fund shares are sold at a loss after being held for 12 months or less, the
loss will be treated as long-term, instead of short-term, capital loss to the
extent of any capital gain distributions received on those shares.

The Fund's distributions are taxable in the year they are paid, whether they
are taken in cash or reinvested in additional shares, except that certain
distributions declared in the last three months of the year and paid in
January are taxable as if paid on December 31.

The Fund will be subject to a nondeductible 4% excise tax ("Excise Tax") to
the extent it fails to distribute by the end of any calendar year
substantially all of its ordinary income for that year and capital gain net
income for the one-year period ending on October 31 of that year, plus certain
other amounts. The Fund may make additional distributions if necessary to
avoid imposition of a 4% excise tax on undistributed income and gains.

FOREIGN TRANSACTIONS

Dividends and interest received by the Fund may be subject to income,
withholding, or other taxes imposed by foreign countries and U.S. possessions
that would reduce the yield on its securities. Tax conventions between
certain countries and the U.S may reduce or eliminate these foreign taxes,
however, and many foreign countries do not impose taxes on capital gains in
respect of investments by foreign investors. If more than 50% of the value of
the Fund's total assets at the close of its taxable year consists of
securities of foreign corporations, it will be eligible to, and may, file an
election with the Internal Revenue Service that would enable its shareholders,
in effect, to receive the benefit of the foreign tax credit with respect to
any foreign and U.S. possessions income taxes paid by it. The Fund would
treat those taxes as dividends paid to its shareholders and each shareholder
would be required to (1) include in gross income, and treat as paid by the
shareholder, the shareholder's proportionate share of those taxes, (2) treat
the shareholder's share of those taxes and of any dividend paid by the Fund
that represents income from foreign or U.S. possessions sources as the
shareholder's own income from those sources, and (3) either deduct the taxes
deemed paid by the

48
<PAGE>

shareholder in computing the shareholder's taxable income or, alternatively,
use the foregoing information in calculating the foreign tax credit against the
shareholder's federal income tax. The Fund will report to its shareholders
shortly after each taxable year their respective shares of its income from
sources within, and taxes paid to, foreign countries and U.S. possessions if it
makes this election.

The Fund holding foreign securities in its investment portfolio maintains its
accounts and calculates its income in U.S. dollars. In general, gain or loss
(1) from the disposition of foreign currencies and forward currency contracts,
(2) from the disposition of foreign-currency-denominated debt securities that
are attributable to fluctuations in exchange rates between the date the
securities are acquired and their disposition date, and (3) attributable to
fluctuations in exchange rates between the time the Fund accrues interest or
other receivables or expenses or other liabilities denominated in a foreign
currency and the time the Fund actually collects those receivables or pays
those liabilities, will be treated as ordinary income or loss. A
foreign-currency-denominated debt security acquired by the Fund may bear
interest at a high normal rate that takes into account expected decreases in
the value of the principal amount of the security due to anticipated currency
devaluations; in that case, the Fund would be required to include the interest
in income as it accrues but generally would realize a currency loss with
respect to the principal only when the principal was received (through
disposition or upon maturity).

The Fund may invest in the stock of "passive foreign investment companies"
("PFICs") in accordance with its investment objective, policies and
restrictions. A PFIC is a foreign corporation that, in general, meets either
of the following tests: (1) at least 75% of its gross income is passive or (2)
an average of at least 50% of its assets produce, or are held for the
production of, passive income. Under certain circumstances, the Fund will be
subject to federal income tax on a portion of any "excess distribution"
received on the stock or of any gain on disposition of the stock
(collectively, "PFIC income"), plus interest thereon, even if the Fund
distributes the PFIC income as a taxable dividend to its shareholders. The
balance of the PFIC income will be included in the Fund's investment company
taxable income and, accordingly, will not be taxable to it to the extent that
income is distributed to its shareholders. If the Fund invests in a PFIC and
elects to treat the PFIC as a "qualified electing fund," then in lieu of the
foregoing tax and interest obligation, the Fund will be required to include in
income each year its pro rata share of the qualified electing fund's annual
ordinary earnings and net capital gain (the excess of net long-term capital
gain over net short-term capital loss) -- which probably would have to be
distributed to its shareholders to satisfy the Distribution Requirement and
avoid imposition of the Excise Tax -- even if those earnings and gain were not
received by the Fund. In most instances it will be very difficult, if not
impossible, to make this election because of certain requirements thereof.

DERIVATIVE INSTRUMENTS

The use of derivatives strategies, such as purchasing and selling (writing)
options and futures and entering into forward currency contracts, if
applicable, involves complex rules that will determine for income tax purposes
the character and timing of recognition of the gains and losses the Fund
realizes in connection therewith. Gains from the disposition of foreign
currencies, if any (except certain gains therefrom that may be excluded by
future regulations), and income from transactions in options, futures, and
forward currency contracts, if applicable, derived by the Fund with respect to
its business of investing in securities or foreign currencies, if applicable,
will qualify as permissible income under the Income Requirement.

For federal income tax purposes, the Fund is required to recognize as income
for each taxable year its net unrealized gains and losses on options, futures,
or forward currency contracts, if any, that are subject to section 1256 of the
IRC ("Section 1256 Contracts") and are held by the Fund as of the end of the
year, as well as gains and losses on Section 1256 Contracts actually realized
during the year. Except for Section 1256 Contracts that are part of a "mixed
straddle" and with respect to which the Fund makes a certain election, any
gain or loss recognized with respect to Section 1256 Contracts is considered
to be 60% long-term capital gain or loss and 40% short-term capital gain or
loss, without regard to the holding period of the Section 1256 Contract.

ZERO-COUPON, STEP-COUPON, AND PAY-IN-KIND SECURITIES

The Fund may acquire zero-coupon, step-coupon, or other securities issued with
original issue discount. As a holder of those securities, the Fund must
include in its income the original issue discount that accrues on the
securities during the taxable year, even if the Fund receives no corresponding
payment on the securities during the year. Similarly, the Fund must include
in its income securities it receives as "interest" on pay-in-kind securities.
Because the Fund annually must distribute substantially all of its investment
company taxable income, including any original issue discount and other
non-cash income, to satisfy the Distribution Requirement and avoid imposition
of the Excise Tax, it may be required in a particular year to distribute as a
dividend an amount that is greater than the total amount of cash it actually
receives. Those distributions may be made from the

49
<PAGE>

proceeds on sales of portfolio securities, if necessary. The Fund may realize
capital gains or losses from those sales, which would increase or decrease its
investment company taxable income or net capital gain, or both.

USE OF TAX-LOT ACCOUNTING

When sell decisions are made by the Fund's portfolio manager, the Advisor
generally sells the tax lots of the Fund's securities that results in the
lowest amount of taxes to be paid by the shareholders on the Fund's capital
gain distributions. The Advisor uses tax-lot accounting to identify and sell
the tax lots of a security that have the highest cost basis and/or longest
holding period to minimize adverse tax consequences to the Fund's
shareholders. However, if the Fund has a capital loss carry forward position,
the Advisor would reverse its strategy and sell the tax lots of a security
that have the lowest cost basis and/or shortest holding period to maximize the
use of the Fund's capital loss carry forward position.

DETERMINATION OF NET ASSET VALUE

Generally, when an investor makes any purchases, sales, or exchanges, the
price of the investor's shares will be the net asset value ("NAV") next
determined after Strong Funds receives a request in proper form (which
includes receipt of all necessary and appropriate documentation and subject to
available funds). Any applicable sales charges will be added to the purchase
price for Advisor Class shares of the Fund, if any. The "offering price" is
the initial sales charge, if any, plus the NAV. If Strong Funds receives such
a request prior to the close of the New York Stock Exchange ("NYSE") on a day
on which the NYSE is open, the share price will be the NAV determined that
day. The NAV for each Fund or each class of shares is normally determined as
of 3:00 p.m. Central Time ("CT") each day the NYSE is open. The NYSE is open
for trading Monday through Friday except New Year's Day, Martin Luther King
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day, and Christmas Day. Additionally, if any of the
aforementioned holidays falls on a Saturday, the NYSE will not be open for
trading on the preceding Friday, and when any such holiday falls on a Sunday,
the NYSE will not be open for trading on the succeeding Monday, unless unusual
business conditions exist, such as the ending of a monthly or yearly
accounting period. The Fund reserves the right to change the time at which
purchases, redemptions, and exchanges are priced if the NYSE closes at a time
other than 3:00 p.m. CT or if an emergency exists. The NAV of each Fund or of
each class of shares of a Fund is calculated by taking the fair value of the
Fund's total assets attributable to that Fund or class, subtracting all its
liabilities attributable to that Fund or class, and dividing by the total
number of shares outstanding of that Fund or class. Expenses are accrued
daily and applied when determining the NAV. The Fund's portfolio securities
are valued based on market quotations or at fair value as determined by the
method selected by the Fund's Board of Directors.

Equity securities are valued at the last sales price on the NASDAQ or, if not
traded on the NASDAQ, at the last sales price on the national securities
exchange on which such securities are primarily traded. Securities traded on
NASDAQ for which there were no transactions on a given day or securities not
listed on an exchange or NASDAQ are valued at the average of the most recent
bid and asked prices. Other exchange-trade securities (generally foreign
securities) will be valued based on market quotations.

Securities quoted in foreign currency are valued daily in U.S. dollars at the
foreign currency exchange rates that are prevailing at the time the daily NAV
per share is determined. Although the Fund values its foreign assets in U.S.
dollars on a daily basis, it does not intend to convert its holdings of
foreign currencies into U.S. dollars on a daily basis. Foreign currency
exchange rates are generally determined prior to the close of trading on the
NYSE. Occasionally, events affecting the value of foreign investments and
such exchange rates occur between the time at which they are determined and
the close of trading on the NYSE. Such events would not normally be reflected
in a calculation of the Fund's NAV on that day. If events that materially
affect the value of the Fund's foreign investments or the foreign currency
exchange rates occur during such period, the investments will be valued at
their fair value as determined in good faith by or under the direction of the
Board of Directors.

ADDITIONAL SHAREHOLDER INFORMATION

FUND REDEMPTIONS

Shareholders (except Institutional Class shareholders) can gain access to the
money in their accounts by selling (also called redeeming) some or all of
their shares by mail, telephone, computer, automatic withdrawals, through a
broker-dealer, or by writing a check (assuming all the appropriate documents
and requirements have been met for these account options). Institutional
Class shareholders may redeem some or all of their shares by telephone or by
faxing a written request. After a redemption request is processed, the
proceeds from the sale will normally be sent on the next business day but, in
any event, no more than seven days later.

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<PAGE>

TELEPHONE AND INTERNET EXCHANGE/REDEMPTION PRIVILEGES

The Fund employs reasonable procedures to confirm that instructions
communicated by telephone or the Internet are genuine. The Fund may not be
liable for losses due to unauthorized or fraudulent instructions. Such
procedures include but are not limited to requiring a form of personal
identification prior to acting on instructions received by telephone or the
Internet, providing written confirmations of such transactions to the address
of record, tape recording telephone instructions and backing up Internet
transactions.

MOVING ACCOUNT OPTIONS AND INFORMATION

When establishing a new account (other than an Institutional Class account) by
exchanging funds from an existing Strong Funds account, some account options
(such as checkwriting, telephone exchange, telephone purchase and telephone
redemption), if existing on the account from which money is exchanged, will
automatically be made available on the new account unless the shareholder
indicates otherwise, or the option is not available on the new account.
Subject to applicable Strong Funds policies, other account options, including
automatic investment, automatic exchange and systematic withdrawal, may be
moved to the new account at the request of the shareholder. These options are
not available for Institutional Class accounts. If allowed by Strong Funds
policies (i) once the account options are established on the new account, the
shareholder may modify or amend the options, and (ii) account options may be
moved or added from one existing account to another new or existing account.
Account information, such as the shareholder's address of record and social
security number, will be copied from the existing account to the new account.

REDEMPTION-IN-KIND

The Fund has elected to be governed by Rule 18f-1 under the 1940 Act, which
obligates the Fund to redeem shares in cash, with respect to any one
shareholder during any 90-day period, up to the lesser of $250,000 or 1% of
the assets of the Fund. If the Advisor determines that existing conditions
make cash payments undesirable, redemption payments may be made in whole or in
part in securities or other financial assets, valued for this purpose as they
are valued in computing the NAV for the Fund's shares (a
"redemption-in-kind"). Shareholders receiving securities or other financial
assets in a redemption-in-kind may realize a gain or loss for tax purposes,
and will incur any costs of sale, as well as the associated inconveniences.
If you expect to make a redemption in excess of the lesser of $250,000 or 1%
of the Fund's assets during any 90-day period and would like to avoid any
possibility of being paid with securities in-kind, you may do so by providing
Strong Funds with an unconditional instruction to redeem at least 15 calendar
days prior to the date on which the redemption transaction is to occur,
specifying the dollar amount or number of shares to be redeemed and the date
of the transaction (please call 800-368-3863). This will provide the Fund
with sufficient time to raise the cash in an orderly manner to pay the
redemption and thereby minimize the effect of the redemption on the interests
of the Fund's remaining shareholders.

SHARES IN CERTIFICATE FORM

Certificates will be issued for shares (other than Institutional Class or
Advisor Class shares) held in a Fund account only upon written request.
Certificates will not be issued for Institutional Class or Advisor Class
shares of any Fund. A shareholder will, however, have full shareholder rights
whether or not a certificate is requested.

DOLLAR COST AVERAGING

Strong Funds' Automatic Investment Plan, Payroll Direct Deposit Plan, and
Automatic Exchange Plan are methods of implementing dollar cost averaging.
Dollar cost averaging is an investment strategy that involves investing a
fixed amount of money at regular time intervals. By always investing the same
set amount, an investor will be purchasing more shares when the price is low
and fewer shares when the price is high. Ultimately, by using this principle
in conjunction with fluctuations in share price, an investor's average cost
per share may be less than the average transaction price. A program of
regular investment cannot ensure a profit or protect against a loss during
declining markets. Since such a program involves continuous investment
regardless of fluctuating share values, investors should consider their
ability to continue the program through periods of both low and high
share-price levels. These methods are unavailable for Institutional Class
accounts..

FINANCIAL INTERMEDIARIES

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<PAGE>

If an investor purchases or redeems shares of the Fund through a financial
intermediary, certain features of the Fund relating to such transactions may
not be available or may be modified. In addition, certain operational
policies of the Fund, including those related to settlement and dividend
accrual, may vary from those applicable to direct shareholders of the Fund and
may vary among intermediaries. Please consult your financial intermediary for
more information regarding these matters. In addition, the Fund may pay,
directly or indirectly through arrangements with the Advisor, amounts to
financial intermediaries that provide transfer agent type and/or other
administrative services to their customers. The Fund will not pay more for
these services through intermediary relationships than it would if the
intermediaries' customers were direct shareholders in the Fund; however, the
Advisor may pay to the financial intermediary amounts in excess of such
limitation out of its own profits. Certain financial intermediaries may
charge an advisory, transaction, or other fee for their services. Investors
will not be charged for such fees if investors purchase or redeem Fund shares
directly from the Fund without the intervention of a financial intermediary.

SIGNATURE GUARANTEES

A signature guarantee is designed to protect shareholders and the Fund against
fraudulent transactions by unauthorized persons. In the following instances,
the Fund will require a signature guarantee for all authorized owners of an
account:

- - when adding the telephone redemption option to an existing account;
- - when transferring the ownership of an account to another individual or
organization;
- - when submitting a written redemption request for more than $50,000;
- - when requesting to redeem or redeposit shares that have been issued in
certificate form;
- - if requesting a certificate after opening an account;
- - when requesting that redemption proceeds be sent to a different name or
address than is registered on an account;
- - if adding/changing a name or adding/removing an owner on an account; and
- - if adding/changing the beneficiary on a transfer-on-death account.

A signature guarantee may be obtained from any eligible guarantor institution,
as defined by the SEC. These institutions include banks, savings
associations, credit unions, brokerage firms, and others. Please note that a
notary public stamp or seal is not acceptable.

RIGHT OF SET-OFF

To the extent not prohibited by law, the Fund, any other Strong Fund, and the
Advisor, each has the right to set-off against a shareholder's account balance
with a Strong Fund, and redeem from such account, any debt the shareholder may
owe any of these entities. This right applies even if the account is not
identically registered.

BROKERS RECEIPT OF PURCHASE AND REDEMPTION ORDERS

The Fund has authorized certain brokers to accept purchase and redemption
orders on the Fund's behalf. These brokers are, in turn, authorized to
designate other intermediaries to accept purchase and redemption orders on the
Fund's behalf. The Fund will be deemed to have received a purchase or
redemption order when an authorized broker or, if applicable, a broker's
authorized designee, accepts the order. Purchase and redemption orders
received in this manner will be priced at the Fund's net asset value next
computed after they are accepted by an authorized broker or the broker's
authorized designee.

PROMOTIONAL ITEMS

From time to time, the Advisor and/or Distributor may give de minimis gifts or
other immaterial consideration to investors who open new accounts or add to
existing accounts with the Strong Funds. In addition, from time to time, the
Advisor and/or Distributor, alone or with other entities or persons, may
sponsor, participate in conducting, or be involved with sweepstakes,
give-aways, contests, incentive promotions, or other similar programs
("Give-Aways"). This is done in order to, among other reasons, increase the
number of users of and visits to the Fund's Internet web site. As part of the
Give-Aways, persons may receive cash or other awards including without
limitation, gifts, merchandise, gift certificates, travel, meals, and lodging.
Under the Advisor's and Distributor's standard rules for Give-Aways, their
employees, subsidiaries, advertising and promotion agencies, and members of
their immediate families are not eligible to enter the Give-Aways.

RETIREMENT PLANS

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TRADITIONAL INDIVIDUAL RETIREMENT ACCOUNT (IRA): Everyone under age 70 1/2 with
earned income may contribute to a tax-deferred Traditional IRA. The Strong
Funds offer a prototype plan for you to establish your own Traditional IRA. You
are allowed to contribute up to the lesser of $2,000 or 100% of your earned
income each year to your Traditional IRA (or up to $4,000 between your
Traditional IRA and your non-working spouses' Traditional IRA). Under certain
circumstances, your contribution will be deductible.

ROTH IRA: Taxpayers, of any age, who have earned income, and whose adjusted
gross income ("AGI") does not exceed $110,000 (single) or $160,000 (joint) can
contribute to a Roth IRA. Allowed contributions begin to phase-out at $95,000
(single) or $150,000 (joint). You are allowed to contribute up to the lesser
of $2,000 or 100% of earned income each year into a Roth IRA. If you also
maintain a Traditional IRA, the maximum contribution to your Roth IRA is
reduced by any contributions that you make to your Traditional IRA.
Distributions from a Roth IRA, if they meet certain requirements, may be
federally tax free. If your AGI is $100,000 or less, you can convert your
Traditional IRAs into a Roth IRA. Conversions of earnings and deductible
contributions are taxable in the year of the distribution. The early
distribution penalty does not apply to amounts converted to a Roth IRA even if
you are under age 59 1/2.

EDUCATION IRA: Taxpayers may contribute up to $500 per year into an Education
IRA for the benefit of a child under age 18. Total contributions to any one
child cannot exceed $500 per year. The contributor must have adjusted income
under $110,000 (single) or $160,000 (joint) to contribute to an Education IRA.
Allowed contributions begin to phase-out at $95,000 (single) or $150,000
(joint). Withdrawals from the Education IRA to pay qualified higher education
expenses are federally tax free. Any withdrawal in excess of higher education
expenses for the year are potentially subject to tax and an additional 10%
penalty.

DIRECT ROLLOVER IRA: To avoid the mandatory 20% federal withholding tax on
distributions, you must transfer the qualified retirement or IRC section 403(b)
plan distribution directly into an IRA. The distribution must be eligible for
rollover. The amount of your Direct Rollover IRA contribution will not be
included in your taxable income for the year.

SIMPLIFIED EMPLOYEE PENSION PLAN (SEP-IRA): A SEP-IRA plan allows an employer
to make deductible contributions to separate IRA accounts established for each
eligible employee.

SALARY REDUCTION SIMPLIFIED EMPLOYEE PENSION PLAN (SAR SEP-IRA): A SAR SEP-IRA
plan is a type of SEP-IRA plan in which an employer may allow employees to
defer part of their salaries and contribute to an IRA account. These deferrals
help lower the employees' taxable income. Please note that you may no longer
open new SAR SEP-IRA plans (since December 31, 1996). However, employers with
SAR SEP-IRA plans that were established prior to January 1, 1997 may still open
accounts for new employees.

SIMPLIFIED INCENTIVE MATCH PLAN FOR EMPLOYEES (SIMPLE-IRA): A SIMPLE-IRA plan
is a retirement savings plan that allows employees to contribute a percentage
of their compensation, up to $6,000, on a pre-tax basis, to a SIMPLE-IRA
account. The employer is required to make annual contributions to eligible
employees' accounts. All contributions grow tax-deferred.

DEFINED CONTRIBUTION PLAN: A defined contribution plan allows self-employed
individuals, partners, or a corporation to provide retirement benefits for
themselves and their employees. Plan types include: profit-sharing plans,
money purchase pension plans, and paired plans (a combination of a
profit-sharing plan and a money purchase plan).

401(K) PLAN: A 401(k) plan is a type of profit-sharing plan that allows
employees to have part of their salary contributed on a pre-tax basis to a
retirement plan which will earn tax-deferred income. A 401(k) plan is funded by
employee contributions, employer contributions, or a combination of both.

403(B)(7) PLAN: A 403(b)(7) plan is a tax-sheltered custodial account designed
to qualify under section 403(b)(7) of the IRC and is available for use by
employees of certain educational, non-profit, hospital, and charitable
organizations.

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<PAGE>

ORGANIZATION

The Fund is either a "Corporation" or a "Series" of common stock of a
Corporation, as described in the chart below:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Incorporation Date Series Date Class Authorized Par
Corporation Date Created Created Shares Value ($)
- --------------------------------- ------------- ------------ ------------ ------------ ------------
Strong Common Stock Fund, Inc. 11/11/88 Indefinite .001
Strong Discovery Fund, Inc. 9/24/87 Indefinite .001
Strong Equity Funds, Inc.(1) 12/28/90 Indefinite .00001
- - Strong Growth Fund 12/28/90 Indefinite .00001
+Investor Class(2) 12/28/90 Indefinite .00001
+Advisor Class 2/17/00 Indefinite .00001
+Institutional Class 2/17/00 Indefinite .00001
- - Strong Value Fund 11/01/95 Indefinite .00001
- - Strong Mid Cap Growth Fund 10/28/96 Indefinite .00001
- - Strong Index 500 Fund* 4/08/97 Indefinite .00001
- - Strong Growth 20 Fund 6/04/97 Indefinite .00001
+Investor Class(2) 6/04/97 Indefinite .00001
+Advisor Class 2/17/00 Indefinite .00001
- - Strong Small Cap Value Fund 12/10/97 Indefinite .00001
- - Strong Dow 30 Value Fund* 12/10/97 Indefinite .00001
- - Strong Strategic Growth Fund 5/4/98 Indefinite .00001
- - Strong Enterprise Fund 9/15/98 Indefinite .00001
+Investor Class(2) 9/15/98 Indefinite .00001
+Advisor Class 2/17/00 Indefinite .00001
- - Strong Mid Cap Disciplined Fund 12/15/98 Indefinite .00001
- -Strong U.S. Emerging Growth Fund 12/15/98 Indefinite .00001
- -Strong Internet Fund* 12/14/99 Indefinite .00001
- -Strong Technology 100 Fund* 12/14/99 Indefinite .00001
- -Strong Technology Index Plus 12/14/99 Indefinite .00001
Fund*
Strong Opportunity Fund, Inc. 7/05/83 Indefinite .01
- - Strong Opportunity Fund 7/05/83 Indefinite .01
+Investor Class(2) 7/05/83 Indefinite .01
+Advisor Class 2/17/00 Indefinite .01
</TABLE>

* Described in a different prospectus and SAI.
(1) Prior to November 1, 1995, the Corporation's name was Strong Growth
Fund, Inc.
(2) Prior to February 17, 2000, the Investor Class shares were designated as
common stock of the Fund.

The Strong Common Stock Fund, Inc., Strong Discovery Fund, Inc., and Strong
Opportunity Fund, Inc. are separately incorporated, diversified, open-end
management investment companies. The Strong Enterprise Fund, Strong Growth
Fund, Strong Mid Cap Disciplined Fund, Strong Mid Cap Growth Fund, Strong
Small Cap Value Fund, Strong Strategic Growth Fund, Strong U.S. Emerging
Growth Fund, and Strong Value Funds are diversified series of Strong Equity
Funds, Inc., which is an open-end management investment company. The Strong
Growth 20 Fund is a nondiversified series of Strong Equity Funds, Inc.

54
<PAGE>

series or class are entitled to vote. Each share of the Fund has one vote, and
all shares participate equally in dividends and other capital gains
distributions by the Fund and in the residual assets of the Fund in the event
of liquidation. Fractional shares have the same rights proportionately as do
full shares. Shares of the Corporation have no preemptive, conversion, or
subscription rights. If the Corporation issues additional series, the assets
belonging to each series of shares will be held separately by the custodian,
and in effect each series will be a separate fund.

SHAREHOLDER MEETINGS

The Wisconsin Business Corporation Law permits registered investment
companies, such as the Fund, to operate without an annual meeting of
shareholders under specified circumstances if an annual meeting is not
required by the 1940 Act. The Fund has adopted the appropriate provisions in
its Bylaws and may, at its discretion, not hold an annual meeting in any year
in which the election of directors is not required to be acted on by
shareholders under the 1940 Act.

The Fund's Bylaws allow for a director to be removed by its shareholders with
or without cause, only at a meeting called for the purpose of removing the
director. Upon the written request of the holders of shares entitled to not
less than ten percent (10%) of all the votes entitled to be cast at such
meeting, the Secretary of the Fund shall promptly call a special meeting of
shareholders for the purpose of voting upon the question of removal of any
director. The Secretary shall inform such shareholders of the reasonable
estimated costs of preparing and mailing the notice of the meeting, and upon
payment to the Fund of such costs, the Fund shall give not less than ten nor
more than sixty days notice of the special meeting.

PERFORMANCE INFORMATION

The Strong Funds may advertise a variety of types of performance information
as more fully described below. The Fund's performance is historical and past
performance does not guarantee the future performance of the Fund. From time
to time, the Advisor may agree to waive or reduce its management fee and/or to
absorb certain operating expenses for the Fund. Waivers of management fees
and absorption of expenses will have the effect of increasing the Fund's
performance.

A multiple class Fund will separately calculate performance information for
each class of shares. The performance figures for each class of shares will
vary based on differences in their expense ratios.

Performance figures for Institutional Class shares of the Growth Fund, which
were first offered to the public on February 24, 2000, include the historical
performance of the Fund's Investor Class shares for the period from a Fund's
inception through February 23, 2000. For the Advisor Class shares of the
Enterprise, Growth, Growth 20, and Opportunity Funds, which also were first
offered to the public on February 24, 2000, performance is based on the
historical performance of each Fund's Investor Class of shares, which has been
recalculated to reflect the additional expenses imposed on the Advisor Class
shares. The performance figures for each class of shares will vary based on
differences in their expense ratios.

DISTRIBUTION RATE

The distribution rate for the Fund is computed, according to a
non-standardized formula, by dividing the total amount of actual distributions
per share paid by the Fund over a twelve month period by the Fund's net asset
value on the last day of the period. The distribution rate differs from the
Fund's yield because the distribution rate includes distributions to
shareholders from sources other than dividends and interest, such as
short-term capital gains. Therefore, the Fund's distribution rate may be
substantially different than its yield. Both the Fund's yield and
distribution rate will fluctuate.

AVERAGE ANNUAL TOTAL RETURN

The Fund's average annual total return quotation is computed in accordance
with a standardized method prescribed by rules of the SEC. The average annual
total return for the Fund for a specific period is calculated by first taking
a hypothetical $10,000 investment ("initial investment") in the Fund's shares
on the first day of the period and computing the "redeemable value" of that
investment at the end of the period. The redeemable value is then divided by
the initial investment, and this quotient is taken to the Nth root (N
representing the number of years in the period) and 1 is subtracted from the
result, which is then expressed as a percentage. The calculation assumes that
all income and capital gains dividends paid by the Fund have been reinvested
at net asset value on the reinvestment dates during the period. Average
annual total returns reflect the impact of sales charges, if any.

TOTAL RETURN

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<PAGE>

Calculation of the Fund's total return is not subject to a standardized
formula. Total return performance for a specific period is calculated by
first taking an investment (assumed below to be $10,000) ("initial
investment") in the Fund's shares on the first day of the period and computing
the "ending value" of that investment at the end of the period. The total
return percentage is then determined by subtracting the initial investment
from the ending value and dividing the remainder by the initial investment and
expressing the result as a percentage. The calculation assumes that all
income and capital gains dividends paid by the Fund have been reinvested at
net asset value of the Fund on the reinvestment dates during the period.
Total return may also be shown as the increased dollar value of the
hypothetical investment over the period. Total returns reflect the impact of
sales charges, if any.

CUMULATIVE TOTAL RETURN

Cumulative total return represents the simple change in value of an investment
over a stated period and may be quoted as a percentage or as a dollar amount.
Total returns and cumulative total returns may be broken down into their
components of income and capital (including capital gains and changes in share
price) in order to illustrate the relationship between these factors and their
contributions to total return. Cumulative total returns reflect the impact of
sales charges, if any.

TOTAL RETURN

COMMON STOCK FUND

Initial $10,000 Ending $ value Cumulative Average Annual
Time Period Investment December 31, 1999 Total Return Total Return
- -------------- --------------- ----------------- --------------- ------------------
One Year $10,000 14,035 40.35% 40.35%
- -------------- --------------- ----------------- --------------- ------------------
Five Years $10,000 29,597 195.97% 24.24%
- -------------- --------------- ----------------- --------------- ------------------
Ten Years $10,000 70,653 606.53% 21.59%
- -------------- --------------- ----------------- --------------- ------------------
Life of Fund* $10,000 70,653 606.53% 21.59%
- -------------- --------------- ----------------- --------------- ------------------
</TABLE>

* Commenced operations on December 29, 1989.

DISCOVERY FUND

Initial $10,000 Ending $ value Cumulative Average Annual
Time Period Investment December 31, 1999 Total Return Total Return
- -------------- --------------- ----------------- --------------- ------------------
One Year $10,000 10,528 5.28% 5.28%
- -------------- --------------- ----------------- --------------- ------------------
Five Years $10,000 17,094 70.94% 11.32%
- -------------- --------------- ----------------- --------------- ------------------
Ten Years $10,000 32,743 227.43% 12.59%
- -------------- --------------- ----------------- --------------- ------------------
Life of Fund* $10,000 50,516 405.16% 14.45%
- -------------- --------------- ----------------- --------------- ------------------
</TABLE>

* Commenced operations on December 31, 1987.

ENTERPRISE FUND

INVESTOR CLASS

* Commenced operations on September 29, 1998.

ADVISOR CLASS+

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<PAGE>

* Commenced operations on September 29, 1998.
+ Commenced operations February 24, 2000.

GROWTH FUND

INVESTOR CLASS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Initial $10,000 Ending $ value Cumulative Average Annual
Time Period Investment December 31, 1999 Total Return Total Return
- -------------- --------------- ----------------- --------------- ------------------
One Year $10,000 17,506 75.06% 75.06%
- -------------- --------------- ----------------- --------------- ------------------
Five Years $10,000 44,600 346.00% 34.86%
- -------------- --------------- ----------------- --------------- ------------------
Life of Fund* $10,000 52,302 423.02% 31.75%
- -------------- --------------- ----------------- --------------- ------------------
</TABLE>

* Commenced operations on December 31, 1993.

ADVISOR CLASS+

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Initial $10,000 Ending $ value Cumulative Average Annual
Time Period Investment December 31, 1999 Total Return Total Return
- -------------- -------------- ----------------- --------------- ------------------
One Year $10,000 16,471 64.71% 64.71%
- -------------- --------------- ----------------- --------------- ------------------
Five Years $10,000 41,560 315.60% 32.96%
- -------------- --------------- ----------------- --------------- ------------------
Life of Fund* $10,000 48,611 386.11% 30.15%
- -------------- --------------- ----------------- --------------- ------------------
</TABLE>

* Commenced operations on December 31, 1993.
+ Commenced operations on February 24, 2000.

INSTITUTIONAL CLASS+

* Commenced operations on December 31, 1993.
+ Commenced operations on February 24, 2000.

57
<PAGE>

GROWTH 20 FUND

INVESTOR CLASS

* Commenced operations on June 30, 1997.

ADVISOR CLASS+

* Commenced operations on June 30, 1997.
+ Commenced operations on February 24, 2000.

MID CAP DISCIPLINED FUND

* Commenced operations on December 31, 1998.

MID CAP GROWTH FUND

* Commenced operations on December 31, 1996.

OPPORTUNITY FUND

INVESTOR CLASS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Initial $10,000 Ending $ value Cumulative Average Annual
Time Period Investment December 31, 1999 Total Return Total Return
- -------------- --------------- ----------------- --------------- ------------------
One Year $10,000 13,339 33.39% 33.39%
- -------------- --------------- ----------------- --------------- ------------------
Five Years $10,000 28,592 185.92% 23.38%
- -------------- --------------- ----------------- --------------- ------------------
Ten Years $10,000 49,006 390.06% 17.23%
- -------------- --------------- ----------------- --------------- ------------------
Life of Fund* $10,000 121,017 1,110.17% 19.49%
- -------------- --------------- ----------------- --------------- ------------------
</TABLE>

* Commenced operations on December 31, 1985.

58
<PAGE>

ADVISOR CLASS+

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Initial $10,000 Ending $ value Cumulative Average Annual
Time Period Investment December 31, 1999 Total Return Total Return
- -------------- --------------- ----------------- --------------- ------------------
One Year $10,000 12,543 25.43% 25.43%
- -------------- --------------- ----------------- --------------- ------------------
Five Years $10,000 22,610 166.10% 21.62%
- -------------- -------------- ----------------- --------------- ------------------
Ten Years $10,000 44,970 349.70% 16.22%
- -------------- --------------- ----------------- --------------- ------------------
Life of Fund* $10,000 109,942 999.42% 18.68%
- -------------- --------------- ----------------- --------------- ------------------
</TABLE>

* Commenced operations on December 31, 1985.
+ Commenced operations on February 24, 2000.

SMALL CAP VALUE FUND

*Commenced operations on December 31, 1997.

STRATEGIC GROWTH FUND

* Commenced operations on July 1, 1998.

U.S. EMERGING GROWTH FUND

* Commenced operations on December 31, 1998.

VALUE FUND

* Commenced operations on December 29, 1995.

COMPARISONS

U.S. TREASURY BILLS, NOTES, OR BONDS. Investors may want to compare the
performance of the Fund to that of U.S. Treasury bills, notes, or bonds, which
are issued by the U.S. Government. Treasury obligations are issued in
selected denominations. Rates of Treasury obligations are fixed at the time
of issuance and payment of principal and interest is backed by the full faith
and credit of the Treasury. The market value of such instruments will
generally fluctuate inversely with interest rates prior to maturity

59
<PAGE>

and will equal par value at maturity. Generally, the values of obligations
with shorter maturities will fluctuate less than those with longer maturities.

CERTIFICATES OF DEPOSIT. Investors may want to compare the Fund's performance
to that of certificates of deposit offered by banks and other depositary
institutions. Certificates of deposit may offer fixed or variable interest
rates and principal is guaranteed and may be insured. Withdrawal of the
deposits prior to maturity normally will be subject to a penalty. Rates
offered by banks and other depositary institutions are subject to change at
any time specified by the issuing institution.

MONEY MARKET FUNDS. Investors may also want to compare performance of the
Fund to that of money market funds. Money market fund yields will fluctuate
and shares are not insured, but share values usually remain stable.

LIPPER ANALYTICAL SERVICES, INC. ("LIPPER") AND OTHER INDEPENDENT RANKING
ORGANIZATIONS. From time to time, in marketing and other fund literature, the
Fund's performance may be compared to the performance of other mutual funds in
general or to the performance of particular types of mutual funds with similar
investment goals, as tracked by independent organizations. Among these
organizations, Lipper, a widely used independent research firm which ranks
mutual funds by overall performance, investment objectives, and assets, may be
cited. Lipper performance figures are based on changes in net asset value,
with all income and capital gains dividends reinvested. Such calculations do
not include the effect of any sales charges imposed by other funds. The Fund
will be compared to Lipper's appropriate fund category, that is, by fund
objective and portfolio holdings. The Fund's performance may also be compared
to the average performance of its Lipper category.

MORNINGSTAR, INC. The Fund's performance may also be compared to the
performance of other mutual funds by Morningstar, Inc., which rates funds on
the basis of historical risk and total return. Morningstar's ratings range
from five stars (highest) to one star (lowest) and represent Morningstar's
assessment of the historical risk level and total return of a fund as a
weighted average for 3, 5, and 10 year periods. Ratings are not absolute and
do not represent future results.

INDEPENDENT SOURCES. Evaluations of fund performance made by independent
sources may also be used in advertisements concerning the Fund, including
reprints of, or selections from, editorials or articles about the Fund,
especially those with similar objectives. Sources for fund performance and
articles about the Fund may include publications such as Money, Forbes,
Kiplinger's, Smart Money, Financial World, Business Week, U.S. News and World
Report, The Wall Street Journal, Barron's, and a variety of investment
newsletters.

INDICES. The Fund may compare its performance to a wide variety of indices.
There are differences and similarities between the investments that a Fund may
purchase and the investments measured by the indices.

HISTORICAL ASSET CLASS RETURNS. From time to time, marketing materials may
portray the historical returns of various asset classes. Such presentations
will typically compare the average annual rates of return of inflation, U.S.
Treasury bills, bonds, common stocks, and small stocks. There are important
differences between each of these investments that should be considered in
viewing any such comparison. The market value of stocks will fluctuate with
market conditions, and small-stock prices generally will fluctuate more than
large-stock prices. Stocks are generally more volatile than bonds. In return
for this volatility, stocks have generally performed better than bonds or cash
over time. Bond prices generally will fluctuate inversely with interest rates
and other market conditions, and the prices of bonds with longer maturities
generally will fluctuate more than those of shorter-maturity bonds. Interest
rates for bonds may be fixed at the time of issuance, and payment of principal
and interest may be guaranteed by the issuer and, in the case of U.S. Treasury
obligations, backed by the full faith and credit of the U.S. Treasury.

60
<PAGE>

STRONG FUNDS. The Strong Funds offer a comprehensive range of conservative to
aggressive investment options. The Strong Funds and their investment
objectives are listed below.

FUND NAME INVESTMENT OBJECTIVE

- ----------------------------------------- -----------------------------------------------------------------------------------
CASH MANAGEMENT
- ----------------------------------------- -----------------------------------------------------------------------------------
Strong Advantage Fund Current income with a very low degree of share-price fluctuation.
- ----------------------------------------- -----------------------------------------------------------------------------------
Strong Heritage Money Fund Current income, a stable share price, and daily liquidity.
- ----------------------------------------- -----------------------------------------------------------------------------------
Strong Investors Money Fund Current income, a stable share price, and daily liquidity.
- ----------------------------------------- -----------------------------------------------------------------------------------
Strong Money Market Fund Current income, a stable share price, and daily liquidity.
- ----------------------------------------- -----------------------------------------------------------------------------------
Strong Municipal Advantage Fund Federally tax-exempt current income with a very low degree of share-price
fluctuation.
- ----------------------------------------- -----------------------------------------------------------------------------------
Strong Municipal Money Market Fund Federally tax-exempt current income, a stable share-price, and daily liquidity.
- ----------------------------------------- -----------------------------------------------------------------------------------

- ----------------------------------------- -----------------------------------------------------------------------------------
CONSERVATIVE EQUITY
- ----------------------------------------- -----------------------------------------------------------------------------------
Strong American Utilities Fund Total return by investing for both income and capital growth.
- ----------------------------------------- -----------------------------------------------------------------------------------
Strong Asset Allocation Fund High total return consistent with reasonable risk over the long term.
- ----------------------------------------- -----------------------------------------------------------------------------------
Strong Blue Chip 100 Fund Total return by investing for both income and capital growth.
- ----------------------------------------- -----------------------------------------------------------------------------------
Strong Equity Income Fund Total return by investing for both income and capital growth.
- ----------------------------------------- -----------------------------------------------------------------------------------
Strong Growth and Income Fund High total return by investing for capital growth and income.
- ----------------------------------------- -----------------------------------------------------------------------------------
Strong Limited Resources Fund Total return by investing for both capital growth and income.
- ----------------------------------------- -----------------------------------------------------------------------------------
Strong Schafer Balanced Fund Total return by investing for both income and capital growth.
- ----------------------------------------- -----------------------------------------------------------------------------------
Strong Schafer Value Fund Long-term capital appreciation principally through investment in common stocks
and other equity securities. Current income is a secondary objective.
- ----------------------------------------- -----------------------------------------------------------------------------------

- ----------------------------------------- -----------------------------------------------------------------------------------
EQUITY
- ----------------------------------------- -----------------------------------------------------------------------------------
Strong Common Stock Fund* Capital growth.
- ----------------------------------------- -----------------------------------------------------------------------------------
Strong Discovery Fund Capital growth.
- ----------------------------------------- -----------------------------------------------------------------------------------
Strong Dow 30 Value Fund Capital growth.
- ----------------------------------------- -----------------------------------------------------------------------------------
Strong Enterprise Fund Capital growth.
- ----------------------------------------- -----------------------------------------------------------------------------------
Strong Growth Fund Capital growth.
- ----------------------------------------- -----------------------------------------------------------------------------------
Strong Growth 20 Fund Capital growth.
- ----------------------------------------- -----------------------------------------------------------------------------------
Strong Index 500 Fund To approximate as closely as practicable (before fees and expenses) the
capitalization-weighted total rate of return of that portion of the U.S. market for
publicly traded common stocks composed of the larger capitalized companies.
- ----------------------------------------- -----------------------------------------------------------------------------------
Strong Internet Fund Capital growth.
- ----------------------------------------- -----------------------------------------------------------------------------------
Strong Large Cap Growth Fund Capital growth.
- -------------------------------------- ----------------------------------------------------------------------------
Strong Mid Cap Disciplined Fund Capital growth.
- -------------------------------------- ----------------------------------------------------------------------------
Strong Mid Cap Growth Fund Capital growth.
- -------------------------------------- ----------------------------------------------------------------------------
Strong Opportunity Fund Capital growth.
- -------------------------------------- ----------------------------------------------------------------------------
Strong Small Cap Value Fund Capital growth.
- -------------------------------------- ----------------------------------------------------------------------------
Strong Strategic Growth Fund Capital growth.
- -------------------------------------- ----------------------------------------------------------------------------
Strong Technology 100 Fund Capital growth.
- -------------------------------------- ----------------------------------------------------------------------------
Strong Technology Index Plus Fund Capital growth.
- -------------------------------------- ----------------------------------------------------------------------------
Strong U.S. Emerging Growth Fund Capital growth.
- -------------------------------------- ----------------------------------------------------------------------------
Strong Value Fund Capital growth.
- -------------------------------------- ----------------------------------------------------------------------------

- -------------------------------------- ----------------------------------------------------------------------------
INCOME
- -------------------------------------- ----------------------------------------------------------------------------
Strong Bond Fund Total return by investing for a high level of current income with a moderate
degree of share-price fluctuation.
- -------------------------------------- ----------------------------------------------------------------------------
Strong Corporate Bond Fund Total return by investing for a high level of current income with a moderate
degree of share-price fluctuation.
- -------------------------------------- ----------------------------------------------------------------------------
</TABLE>

61
<PAGE>

<TABLE>
<CAPTION>
<S> <C>
Strong Government Securities Fund Total return by investing for a high level of current income with a moderate
degree of share-price fluctuation.
- ------------------------------------------ ----------------------------------------------------------------------------------
Strong High-Yield Bond Fund Total return by investing for a high level of current income and capital growth.
- ------------------------------------------ ----------------------------------------------------------------------------------
Strong Short-Term Bond Fund Total return by investing for a high level of current income with a low degree of
share-price fluctuation.
- ------------------------------------------ ----------------------------------------------------------------------------------
Strong Short-Term High Yield Bond Total return by investing for a high level of current income with a moderate
Fund degree of share-price fluctuation.
- ------------------------------------------ ----------------------------------------------------------------------------------

- ------------------------------------------ ----------------------------------------------------------------------------------
INTERNATIONAL
- ------------------------------------------ ----------------------------------------------------------------------------------

Strong Asia Pacific Fund Capital growth.
- ------------------------------------------ ----------------------------------------------------------------------------------
Strong Foreign MajorMarketsSM Fund Capital growth.
- ------------------------------------------ ----------------------------------------------------------------------------------
Strong Global High-Yield Bond Fund Total return by investing for a high level of current income and capital growth.
- ------------------------------------------ ----------------------------------------------------------------------------------
Strong International Bond Fund High total return by investing for both income and capital appreciation.
- ------------------------------------------ ----------------------------------------------------------------------------------
Strong International Stock Fund Capital growth.
- ------------------------------------------ ----------------------------------------------------------------------------------
Strong Overseas Fund Capital growth.
- ------------------------------------------ ----------------------------------------------------------------------------------
Strong Short-Term Global Bond Fund Total return by investing for a high level of income with a low degree of share
price fluctuation.
- ------------------------------------------ ----------------------------------------------------------------------------------

- ------------------------------------------ ----------------------------------------------------------------------------------
LIFE STAGE SERIES
- ------------------------------------------ ----------------------------------------------------------------------------------
Strong Aggressive Portfolio Capital growth.
- ------------------------------------------ ----------------------------------------------------------------------------------
Strong Conservative Portfolio Total return by investing primarily for income and secondarily for capital growth.
- ------------------------------------------ ----------------------------------------------------------------------------------
Strong Moderate Portfolio Total return by investing primarily for capital growth and secondarily for income.
- ------------------------------------------ ----------------------------------------------------------------------------------

- ------------------------------------------ ----------------------------------------------------------------------------------
MUNICIPAL INCOME
- ------------------------------------------ ----------------------------------------------------------------------------------
Strong High-Yield Municipal Bond Fund Total return by investing for a high level of federally tax-exempt current income.
- ------------------------------------------ ----------------------------------------------------------------------------------
Strong Municipal Bond Fund Total return by investing for a high level of federally tax-exempt current income
with a moderate degree of share-price fluctuation.
- ------------------------------------------ ----------------------------------------------------------------------------------
Strong Short-Term High Yield Total return by investing for a high level of federally tax-exempt current income
Municipal Fund with a moderate degree of share-price fluctuation.
- ------------------------------------------ ----------------------------------------------------------------------------------
Strong Short-Term Municipal Bond Total return by investing for a high level of federally tax-exempt current income
Fund with a low degree of share-price fluctuation.
- ------------------------------------------ ----------------------------------------------------------------------------------
</TABLE>

* The Fund is closed to new investors, except the Fund may continue to
offer its shares through certain 401(k) plans and similar company-sponsored
retirement plans.

The Advisor also serves as Advisor to several management investment companies,
some of which fund variable annuity separate accounts of certain insurance
companies.

The Fund may from time to time be compared to other Strong Funds based on a
risk/reward spectrum. In general, the amount of risk associated with any
investment product is commensurate with that product's potential level of
reward. The Strong Funds risk/reward continuum or any Fund's position on the
continuum may be described or diagrammed in marketing materials. The Strong
Funds risk/reward continuum positions the risk and reward potential of each
Strong Fund relative to the other Strong Funds, but is not intended to
position any Strong Fund relative to other mutual funds or investment
products. Marketing materials may also discuss the relationship between risk
and reward as it relates to an individual investor's portfolio.

TYING TIME FRAMES TO YOUR GOALS. There are many issues to consider as you
make your investment decisions, including analyzing your risk tolerance,
investing experience, and asset allocations. You should start to organize
your investments by learning to link your many financial goals to specific
time frames. Then you can begin to identify the appropriate types of
investments to help meet your goals. As a general rule of thumb, the longer
your time horizon, the more price fluctuation you will be able to tolerate in
pursuit of higher returns. For that reason, many people with longer-term
goals select stocks or long-term bonds, and many people with nearer-term goals
match those up with for instance, short-term bonds. The Advisor developed the
following suggested holding periods to help our investors set realistic
expectations for both the risk and reward potential of our funds. (See table
below.) Of course, time is just one element to consider when making your
investment decision.

62
<PAGE>

STRONG FUNDS SUGGESTED MINIMUM HOLDING PERIODS

<TABLE>
<CAPTION>
<S> <C> <C> <C>
UNDER 1 YEAR 1 TO 2 YEARS 4 TO 7 YEARS 5 OR MORE YEARS
- ------------------------ -------------------------- --------------------------- --------------------------

Heritage Money Fund Advantage Fund Conservative Portfolio Aggressive Portfolio
Investors Money Fund Municipal Advantage Fund Corporate Bond Fund American Utilities Fund
Money Market Fund Global High-Yield Bond Fund Asia Pacific Fund
Municipal Money Market 2 TO 4 YEARS Government Securities Fund Asset Allocation Fund
Fund
Short-Term Bond Fund High-Yield Bond Fund Blue Chip 100 Fund
Short-Term Global Bond High-Yield Municipal Bond Common Stock Fund*
Fund Fund Discovery Fund
Short-Term High Yield Bond International Bond Fund Dow 30 Value Fund
Fund Municipal Bond Fund Enterprise Fund
Short-Term High Yield Equity Income Fund
Municipal Fund Foreign MajorMarketsSM
Short-Term Municipal Bond Fund
Fund Growth Fund
Growth 20 Fund
Growth and Income Fund
Index 500 Fund
International Stock Fund
Internet Fund
Large Cap Growth Fund
Limited Resources Fund
Mid Cap Disciplined Fund
Mid Cap Growth Fund
Moderate Portfolio
Opportunity Fund
Overseas Fund
Schafer Balanced Fund
Schafer Value Fund
Small Cap Value Fund
Strategic Growth Fund
Technology 100 Fund
Technology Index Plus Fund
U.S. Emerging Growth Fund
Value Fund
</TABLE>

* This Fund is closed to new investors, except the Fund may continue to
offer its shares through certain 401(k) plans and similar company-sponsored
retirement plans.

PRODUCT LIFE CYCLES. Discussions of product life cycles and their potential
impact on the Fund's investments may be used in advertisements and sales
materials. The basic idea is that most products go through a life cycle that
generally consists of an early adoption phase, a rapid growth phase, and a
maturity phase. The early adoption phase generally includes the time period
during which the product is first being developed and marketed. The rapid
growth phase usually occurs when the general public becomes aware of the new
product and sales are rising. The maturity phase generally includes the time
period when the public has been aware of the product for a period of time and
sales have leveled off or declined.

By identifying and investing in companies that produce or service products that
are in the early adoption phase of their life cycle, it may be possible for the
Fund to benefit if the product moves into a prolonged period of rapid growth
that enhances the company's stock price. However, you should keep in mind that
investing in a product in its early adoption phase does not provide any
guarantee of profit. A product may experience a prolonged rapid growth and
maturity phase without any corresponding increase in the company's stock price.
In addition, different products have life cycles that may be longer or shorter
than those depicted and these variations may influence whether the product has
a positive effect on the company's stock price. For example, a product may not
positively impact a company's stock price if it experiences an extremely short
rapid growth or maturity phase because the product becomes obsolete soon after
it is introduced to the general public. Other products may never move past the
early adoption phase and have no impact on the company's stock price.

63
<PAGE>

ADDITIONAL FUND INFORMATION

PORTFOLIO CHARACTERISTICS. In order to present a more complete picture of the
Fund's portfolio, marketing materials may include various actual or estimated
portfolio characteristics, including but not limited to median market
capitalizations, earnings per share, alphas, betas, price/earnings ratios,
returns on equity, dividend yields, capitalization ranges, growth rates,
price/book ratios, top holdings, sector breakdowns, asset allocations, quality
breakdowns, and breakdowns by geographic region.

MEASURES OF VOLATILITY AND RELATIVE PERFORMANCE. Occasionally statistics may
be used to specify fund volatility or risk. The general premise is that
greater volatility connotes greater risk undertaken in achieving performance.
Measures of volatility or risk are generally used to compare the Fund's net
asset value or performance relative to a market index. One measure of
volatility is beta. Beta is the volatility of a fund relative to the total
market as represented by the Standard & Poor's 500 Stock Index. A beta of
more than 1.00 indicates volatility greater than the market, and a beta of
less than 1.00 indicates volatility less than the market. Another measure of
volatility or risk is standard deviation. Standard deviation is a statistical
tool that measures the degree to which a fund's performance has varied from
its average performance during a particular time period.

Standard deviation is calculated using the following formula:

Standard deviation = the square root of S(xi - xm)2
n-1

Where: S = "the sum of",
xi = each individual return during the time period,
xm = the average return over the time period, and
n = the number of individual returns during the time period.

Statistics may also be used to discuss the Fund's relative performance. One
such measure is alpha. Alpha measures the actual return of a fund compared to
the expected return of a fund given its risk (as measured by beta). The
expected return is based on how the market as a whole performed, and how the
particular fund has historically performed against the market. Specifically,
alpha is the actual return less the expected return. The expected return is
computed by multiplying the advance or decline in a market representation by
the Fund's beta. A positive alpha quantifies the value that the fund manager
has added, and a negative alpha quantifies the value that the fund manager has
lost.

Other measures of volatility and relative performance may be used as
appropriate. However, all such measures will fluctuate and do not represent
future results.

GENERAL INFORMATION

BUSINESS PHILOSOPHY

The Advisor is an independent, Midwestern-based investment advisor, owned by
professionals active in its management. Recognizing that investors are the
focus of its business, the Advisor strives for excellence both in investment
management and in the service provided to investors. This commitment affects
many aspects of the business, including professional staffing, product
development, investment management, and service delivery.

The increasing complexity of the capital markets requires specialized skills
and processes for each asset class and style. Therefore, the Advisor believes
that active management should produce greater returns than a passively managed
index. The Advisor has brought together a group of top-flight investment
professionals with diverse product expertise, and each concentrates on their
investment specialty. The Advisor believes that people are the firm's most
important asset. For this reason, continuity of professionals is critical to
the firm's long-term success.

INVESTMENT ENVIRONMENT

64
<PAGE>

the competitive environment, consumer behavior, industry trends, technological
advances, macroeconomic trends, and the supply and demand of various financial
instruments. In addition, marketing materials may cite the portfolio
management's views or interpretations of such factors.

EIGHT BASIC PRINCIPLES FOR SUCCESSFUL MUTUAL FUND INVESTING
These common sense rules are followed by many successful investors. They make
sense for beginners, too. If you have a question on these principles, or would
like to discuss them with us, please contact us at 800-368-3863.

1. HAVE A PLAN - even a simple plan can help you take control of your
financial future. Review your plan once a year, or if your circumstances
change.

2. START INVESTING AS SOON AS POSSIBLE. Make time a valuable ally. Let it
put the power of compounding to work for you, while helping to reduce your
potential investment risk.

3. DIVERSIFY YOUR PORTFOLIO. By investing in different asset classes -
stocks, bonds, and cash - you help protect against poor performance in one
type of investment while including investments most likely to help you achieve
your important goals.

4. INVEST REGULARLY. Investing is a process, not a one-time event. By
investing regularly over the long term, you reduce the impact of short-term
market gyrations, and you attend to your long-term plan before you're tempted
to spend those assets on short-term needs.

5. MAINTAIN A LONG-TERM PERSPECTIVE. For most individuals, the best
discipline is staying invested as market conditions change. Reactive,
emotional investment decisions are all too often a source of regret - and
principal loss.

6. CONSIDER STOCKS TO HELP ACHIEVE MAJOR LONG-TERM GOALS. Over time,
stocks have provided the more powerful returns needed to help the value of
your investments stay well ahead of inflation.

7. KEEP A COMFORTABLE AMOUNT OF CASH IN YOUR PORTFOLIO. To meet current
needs, including emergencies, use a money market fund or a bank account - not
your long-term investment assets.

8. KNOW WHAT YOU'RE BUYING. Make sure you understand the potential risks
and rewards associated with each of your investments. Ask questions... request
information...make up your own mind. And choose a fund company that helps you
make informed investment decisions.

STRONG RETIREMENT PLAN SERVICES
Strong Retirement Plan Services offers a full menu of high quality, affordable
retirement plan options, including traditional money purchase pension and
profit sharing plans, 401(k) plans, simplified employee pension plans, salary
reduction plans, Keoghs, and 403(b) plans. Retirement plan specialists are
available to help companies determine which type of retirement plan may be
appropriate for their particular situation.

MARKETS. The retirement plan services provided by the Advisor focus on four
distinct markets, based on the belief that a retirement plan should fit the
customer's needs, not the other way around.
1. SMALL COMPANY PLANS. Small company plans are designed for companies
with 1-50 plan participants. The objective is to incorporate the features and
benefits typically reserved for large companies, such as sophisticated
recordkeeping systems, outstanding service, and investment expertise, into a
small company plan without administrative hassles or undue expense. Small
company plan sponsors receive a comprehensive plan administration manual as
well as toll-free telephone support.
2. LARGE COMPANY PLANS. Large company plans are designed for companies
with between 51 and 1,000 plan participants. Each large company plan is
assigned a team of professionals consisting of an account manager, who is
typically an attorney, CPA, or holds a graduate degree in business, a
conversion specialist (if applicable), an accounting manager, a
legal/technical manager, and an education/communications educator.
3. WOMEN-OWNED BUSINESSES.

65
<PAGE>

4. NON-PROFIT AND EDUCATIONAL ORGANIZATIONS (THE 403(B) MARKET).

TURNKEY APPROACH. The retirement plans offered by the Advisor are designed to
be streamlined and simple to administer. To this end, the Advisor has
invested heavily in the equipment, systems, and people necessary to adopt or
convert a plan, and to keep it running smoothly. The Advisor provides all
aspects of the plan, including plan design, administration, recordkeeping, and
investment management. To streamline plan design, the Advisor provides
customizable IRS-approved prototype documents. The Advisor's services also
include annual government reporting and testing as well as daily valuation of
each participant's account. This structure is intended to eliminate the
confusion and complication often associated with dealing with multiple
vendors. It is also designed to save plan sponsors time and expense.

The Advisor strives to provide one-stop retirement savings programs that
combine the advantages of proven investment management, flexible plan design,
and a wide range of investment options. The open architecture design of the
plans allow for the use of the family of mutual funds managed by the Advisor
as well as a stable asset value option. Large company plans may supplement
these options with their company stock (if publicly traded) or funds from
other well-known mutual fund families.

EDUCATION. Participant education and communication is key to the success of
any retirement program, and therefore is one of the most important services
that the Advisor provides. The Advisor's goal is twofold: to make sure that
plan participants fully understand their options and to educate them about the
lifelong investment process. To this end, the Advisor provides attractive,
readable print materials that are supplemented with audio and video tapes, and
retirement education programs.

SERVICE. The Advisor's goal is to provide a world class level of service.
One aspect of that service is an experienced, knowledgeable team that provides
ongoing support for plan sponsors, both at adoption or conversion and
throughout the life of a plan. The Advisor is committed to delivering
accurate and timely information, evidenced by straightforward, complete, and
understandable reports, participant account statements, and plan summaries.

The Advisor has designed both "high-tech" and "high-touch" systems, providing
an automated telephone system as well as personal contact. Participants can
access daily account information, conduct transactions, or have questions
answered in the way that is most comfortable for them.

STRONG FINANCIAL ADVISORS GROUP

The Strong Financial Advisors Group is dedicated to helping financial advisors
better serve their clients. Financial advisors receive regular updates on the
mutual funds managed by the Advisor, access to portfolio managers through
special conference calls, consolidated mailings of duplicate confirmation
statements, access to the Advisor's network of regional representatives, and
other specialized services. For more information on the Strong Financial
Advisors Group, call 800-368-1683.

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP, 100 East Wisconsin Avenue, Milwaukee, Wisconsin
53202, are the independent accountants for the Fund, providing audit services
and assistance and consultation with respect to the preparation of filings
with the SEC.

66
<PAGE>

LEGAL COUNSEL

Godfrey & Kahn, S.C., 780 North Water Street, Milwaukee, Wisconsin 53202,
acts as legal counsel for the Fund.

FINANCIAL STATEMENTS

The Annual Report for the Fund that is attached to this SAI contains the
following audited financial information:

1. Schedule of Investments in Securities.
2. Statement of Operations.
3. Statement of Assets and Liabilities.

4. Statements of Changes in Net Assets.

5. Notes to Financial Statements.
6. Financial Highlights.
7. Report of Independent Accountants.

67
<PAGE>

APPENDIX A - DEFINITION OF BOND RATINGS

STANDARD & POOR'S ISSUE CREDIT RATINGS

A Standard & Poor's issue credit rating is a current opinion of the
creditworthiness of an obligor with respect to a specific financial
obligation, a specific class of financial obligations, or a specific financial
program (including ratings on medium-term note programs and commercial paper
programs). It takes into consideration the creditworthiness of guarantors,
insurers, or other forms of credit enhancement of the obligation and takes
into account the currency in which the obligation is denominated. The issue
credit rating is not a recommendation to purchase, sell, or hold a financial
obligation, inasmuch as it does not comment as to market price or suitability
for a particular investor.

Issue credit ratings are based on current information furnished by the
obligors or obtained by Standard & Poor's from other sources it considers to
be reliable. Standard & Poor's does not perform an audit in connection with
any credit rating and may, on occasion, rely on unaudited financial
information. Credit ratings may be changed, suspended, or withdrawn as a
result of changes in, or unavailability of, such information, or based on
other circumstances.

Issue credit ratings can be either long-term or short-term. Short-term
ratings are generally assigned to those obligations considered short-term in
the relevant market. In the U.S., for example, that means obligations with an
original maturity of no more than 365 days - including commercial paper.
Short-term ratings are also used to indicate the creditworthiness of an
obligor with respect to put features on long-term obligations. The result is
a dual rating, in which the short-term rating addresses the put feature, in
addition to the usual long-term rating. Medium-term notes are assigned
long-term ratings.

Issue credit ratings are based, in varying degrees, on the following
considerations:

1. Likelihood of payment capacity and willingness of the obligor to meet
its financial commitment on an obligation in accordance with the terms of the
obligation.

2. Nature of and provisions of the obligation.

3. Protection afforded by, and relative position of, the obligation in the
event of bankruptcy, reorganization, or other arrangement under the laws of
bankruptcy and other laws affecting creditors' rights.

The issue rating definitions are expressed in terms of default risk. As such,
they pertain to senior obligations of an entity. Junior obligations are
typically rated lower than senior obligations, to reflect the lower priority
in bankruptcy, as noted above. (Such differentiation applies when an entity
has both senior and subordinated obligations, secured and unsecured
obligations, or operating company and holding company obligations.)
Accordingly, in the case of junior debt, the rating may not conform exactly
with the category definition.

'AAA'

An obligation rated 'AAA' has the highest rating assigned by Standard &
Poor's. The obligor's capacity to meet its financial commitment on the
obligation is EXTREMELY STRONG.

'AA'

An obligation rated 'AA' differs from the highest rated obligations only in
small degree. The obligor's capacity to meet its financial commitment on the
obligation is VERY STRONG.

'A'

An obligation rated 'A' is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in higher
rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still STRONG.

'BBB'

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<PAGE>

An obligation rated 'BBB' exhibits ADEQUATE protection parameters. However,
adverse economic conditions or changing circumstances are more likely to lead
to a weakened capacity of the obligor to meet its financial commitment on the
obligation.

Obligations rated 'BB', 'B', 'CCC', 'CC' and 'C' are regarded as having
significant speculative characteristics. 'BB' indicates the least degree of
speculation and 'C' the highest. While such obligations will likely have some
quality and protective characteristics, these may be outweighed by large
uncertainties or major exposures to adverse conditions.

'BB'

An obligation rated 'BB' is LESS VULNERABLE to nonpayment than other
speculative issues. However, it faces major ongoing uncertainties or exposure
to adverse business, financial, or economic conditions which could lead to the
obligor's inadequate capacity to meet its financial commitment on the
obligation.

'B'

An obligation rated 'B' is MORE VULNERABLE to nonpayment than obligations
rated 'BB', but the obligor currently has the capacity to meet its financial
commitment on the obligation. Adverse business, financial, or economic
conditions will likely impair the obligor's capacity or willingness to meet
its financial commitment on the obligation.

'CCC'

An obligation rated 'CCC' is CURRENTLY VULNERABLE to nonpayment, and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial, or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.

'CC'

An obligation rated 'CC' is CURRENTLY HIGHLY VULNERABLE to nonpayment.

'C'

The 'C' rating may be used to cover a situation where a bankruptcy petition
has been filed or similar action has been taken, but payments on this
obligation are being continued.

'D'

An obligation rated 'D' is in payment default. The 'D' rating category is
used when payments on an obligation are not made on the date due, even if the
applicable grace period has not expired, unless Standard & Poor's believes
that such payments will be made during such grade period. The 'D' rating also
will be used upon the filing of a bankruptcy petition or the taking of a
similar action if payments on an obligation are jeopardized.

69
<PAGE>

MOODY'S LONG-TERM DEBT RATINGS

Aaa - Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such issues.

Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risk appear somewhat larger than in Aaa
securities.

A - Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper-medium-grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may
be present which suggest a susceptibility to impairment some time in the
future.

Baa - Bonds which are rated Baa are considered as medium-grade obligations
(I.E., they are neither highly protected nor poorly secured). Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.

Ba - Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well-assured. Often the protection of interest
and principal payments may be very moderate, and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.

B - Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

Caa - Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal
or interest.

Ca - Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked
shortcomings.

C - Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.

FITCH IBCA, INC. ("FITCH") LONG-TERM NATIONAL CREDIT RATINGS

AAA

Obligations which have the highest rating assigned by Fitch on its national
rating scale for that country. This rating is automatically assigned to all
obligations issued or guaranteed by the sovereign state. Capacity for timely
repayment of principal and interest is extremely strong, relative to other
obligors in the same country.

Obligations for which capacity for timely repayment of principal and interest
is very strong relative to other obligors in the same country. The risk
attached to these obligations differs only slightly from the country's highest
rated debt.

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<PAGE>

Obligations for which capacity for timely repayment of principal and interest
is strong relative to other obligors in the same country. However, adverse
changes in business, economic or financial conditions are more likely to
affect the capacity for timely repayment than for obligations in higher rated
categories.

BBB

Obligations for which capacity for timely repayment of principal and interest
is adequate relative to other obligors in the same country. However, adverse
changes in business, economic or financial conditions are more likely to
affect the capacity for timely repayment than for obligations in higher rated
categories.

Obligations for which capacity for timely repayment of principal and interest
is uncertain relative to other obligors in the same country. Within the
context of the country, these obligations are speculative to some degree and
capacity for timely repayment remains susceptible over time to adverse changes
in business, financial or economic conditions.

Obligations for which capacity for timely repayment of principal and interest
is uncertain relative to other obligors in the same country. Timely repayment
of principal and interest is not sufficiently protected against adverse
changes in business, economic or financial conditions and these obligations
are more speculative than those in higher rated categories.

CCC

Obligations for which there is a current perceived possibility of default
relative to other obligors in the same country. Timely repayment of principal
and interest is dependent on favorable business, economic or financial
conditions and these obligations are far more speculative than those in higher
rated categories.

Obligations which are highly speculative relative to other obligors in the
same country or which have a high risk of default.

Obligations which are currently in default.

DUFF & PHELPS, INC. LONG-TERM DEBT AND PREFERRED STOCK RATING SCALE

Rating Definition

AAA Highest credit quality. The risk factors are negligible, being only
slightly more
than for risk-free U.S. Treasury debt.

AA+ High credit quality. Protection factors are strong. Risk is modest
but may
AA vary slightly from time to time because of economic conditions.
AA-

A+ Protection factors are average but adequate. However, risk factors are
more
A variable in periods of greater economic stress.
A-

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<PAGE>

BBB+ Below-average protection factors but still considered sufficient for
prudent
BBB investment. Considerable variability in risk during economic cycles.
BBB-

BB+ Below investment grade but deemed likely to meet obligations when due.

BB Present or prospective financial protection factors fluctuate according
to
BB- industry conditions. Overall quality may move up or down frequently
within this category.

B+ Below investment grade and possessing risk that obligations will not be
met
B when due. Financial protection factors will fluctuate widely according
to
B- economic cycles, industry conditions and/or company fortunes.
Potential
exists for frequent changes in the rating within this category or into a
higher
or lower rating grade.

CCC Well below investment-grade securities. Considerable uncertainty
exists as to
timely payment of principal, interest or preferred dividends. Protection
factors
are narrow and risk can be substantial with unfavorable economic/industry

conditions, and/or with unfavorable company developments.

DD Defaulted debt obligations. Issuer failed to meet scheduled principal
and/or
interest payments.

DP Preferred stock with dividend arrearages.

THOMSON BANKWATCH LONG-TERM DEBT RATINGS

Long-Term Debt Ratings assigned by Thomson BankWatch ALSO WEIGH HEAVILY
GOVERNMENT OWNERSHIP AND SUPPORT. The quality of both the company's
management and franchise are of even greater importance in the Long-Term Debt
Rating decisions. Long-Term Debt Ratings look out over a cycle and are not
adjusted frequently for what it believes are short-term performance
aberrations.

Long-Term Debt Ratings can be restricted to local currency debt - ratings will
be identified by the designation LC. In addition, Long-Term Debt Ratings may
include a plus (+) or minus (-) to indicate where within the category the
issue is placed. BankWatch Long-Term Debt Ratings are based on the following
scale:

INVESTMENT GRADE

AAA (LC-AAA) - Indicates that the ability to repay principal and interest on a
timely basis is extremely high.

AA (LC-AA) - Indicates a very strong ability to repay principal and interest
on a timely basis, with limited incremental risk compared to issues rated in
the highest category.

A (LC-A) - Indicates the ability to repay principal and interest is strong.
Issues rated A could be more vulnerable to adverse developments (both internal
and external) than obligations with higher ratings.

BBB (LC-BBB) - The lowest investment-grade category; indicates an acceptable
capacity to repay principal and interest. BBB issues are more vulnerable to
adverse developments (both internal and external) than obligations with higher
ratings.

NON-INVESTMENT GRADE - may be speculative in the likelihood of timely
repayment of principal and interest

BB (LC-BB) - While not investment grade, the BB rating suggests that the
likelihood of default is considerably less than for lower-rated issues.
However, there are significant uncertainties that could affect the ability to
adequately service debt obligations.

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<PAGE>

B (LC-B) - Issues rated B show a higher degree of uncertainty and therefore
greater likelihood of default than higher-rated issues. Adverse developments
could negatively affect the payment of interest and principal on a timely
basis.

CCC (LC-CCC) - Issues rated CCC clearly have a high likelihood of default,
with little capacity to address further adverse changes in financial
circumstances.

CC (LC-CC) - CC is applied to issues that are subordinate to other obligations
rated CCC and are afforded less protection in the event of bankruptcy or
reorganization.

D (LC-D) - Default.

SHORT-TERM RATINGS

STANDARD & POOR'S SHORT-TERM ISSUE CREDIT RATINGS

'A-1'

A short-term obligation rated 'A-1' is rated in the highest category by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is strong. Within this category, certain obligations are
designated with a plus sign (+). This indicates that the obligor's capacity
to meet its financial commitment on these obligations is extremely strong.

'A-2'

A short-term obligation rated 'A-2' is somewhat more susceptible to the averse
effects of changes in circumstances and economic conditions than obligations
in higher rating categories. However, the obligor's capacity to meet its
financial commitment on the obligation is satisfactory.

'A-3'

A short-term obligation rated 'A-3' exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity of the obligor to meet its financial commitment
on the obligation.

'B'

A short-term obligation rated 'B' is regarded as having significant
speculative characteristics. The obligor currently has the capacity to meet
its financial commitment on the obligation; however, it faces major ongoing
uncertainties which could lead to the obligor's inadequate capacity to meet
its financial commitment on the obligation.

'C'

A short-term obligation rated 'C' is currently vulnerable to nonpayment and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation.

'D'

A short-term obligation rated 'D' is in payment default. The 'D' rating
category is used when payments on an obligation are not made on the date due
even if the applicable grace period has not expired, unless Standard & Poor's
believes that such payments will be made during such grace period. The 'D'
rating also will be used upon the filing of a bankruptcy petition or the
taking of a similar action if payments on an obligation are jeopardized.

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<PAGE>

MOODY'S SHORT-TERM DEBT RATINGS

Moody's short-term debt ratings are opinions of the ability of issuers to
repay punctually senior debt obligations. These obligations have an original
maturity not exceeding one year, unless explicitly noted.

Moody's employs the following three designations, all judged to be investment
grade, to indicate the relative repayment ability of rated issuers:

PRIME - 1 Issuers rated Prime-1 (or supporting institutions) have a
superior ability for repayment of senior short-term Debt
obligations. Prime-1 repayment ability will often be evidenced by many of the
following characteristics:
- - Leading market positions in well-established industries.
- - High rates of return on funds employed.
- - Conservative capitalization structure with moderate reliance on debt and
ample asset protection.
- - Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
- - Well-established access to a range of financial markets and assured sources
of alternate liquidity.

PRIME - 2 Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of senior short-term debt obligations.
This will normally be evidenced by many of the characteristics cited above, but
to a lesser degree. Earnings trends and coverage ratios, while
sound, may be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.

PRIME - 3 Issuers rated Prime-3 (or supporting institutions) have an
acceptable ability for repayment of senior short-term
obligations. The effect of industry characteristics and market compositions
may be more pronounced. Variability in earnings and
profitability may result in changes in the level of debt protection
measurements and may require relatively high financial leverage.
Adequate alternate liquidity is maintained.

NOT PRIME Issuers rated Not Prime do not fall within any of the Prime
rating categories.

FITCH IBCA, INC. ("FITCH") SHORT-TERM NATIONAL CREDIT RATINGS

Obligations assigned this rating have the highest capacity for timely repayment
under Fitch's national rating scale for that country, relative to other
obligations in the same country. This rating is automatically assigned to all
obligations issued or guaranteed by the sovereign state. Where issues possess
a particularly strong credit feature, a "+" is added to the assigned rating.

Obligations supported by a strong capacity for timely repayment relative to
other obligors in the same country. However, the relative degree of risk is
slightly higher than for issues classified as 'A1' and capacity for timely
repayment may be susceptible to adverse changes in business, economic, or
financial conditions.

Obligations supported by an adequate capacity for timely repayment relative to
other obligors in the same country. Such capacity is more susceptible to
adverse changes in business, economic, or financial conditions than for
obligations in higher categories.

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<PAGE>

Obligations for which the capacity for timely repayment is uncertain relative
to other obligors in the same country. The capacity for timely repayment is
susceptible to adverse changes in business, economic, or financial conditions.

Obligations for which there is a high risk of default to other obligors in the
same country or which are in default.

DUFF & PHELPS, INC. SHORT-TERM DEBT RATINGS

RATING: DEFINITION

HIGH GRADE

D-1+ Highest certainty of timely payment. Short-term liquidity, including
internal operating factors and/or access to alternative sources of funds, is
outstanding, and safety is just below risk-free U.S. Treasury short-term
obligations.

D-1 Very high certainty of timely payment. Liquidity factors are excellent
and supported by good fundamental protection factors. Risk factors are minor.

D-1- High certainty of timely payment. Liquidity factors are strong and
supported by good fundamental protection factors. Risk factors are very small.

GOOD GRADE

D-2 Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing funding needs may enlarge total
financing requirements, access to capital markets is good. Risk factors are
small.

SATISFACTORY GRADE

D-3 Satisfactory liquidity and other protection factors qualify issues as
to investment grade. Risk factors are larger and subject to more variation.
Nevertheless, timely payment is expected.

NON-INVESTMENT GRADE

D-4 Speculative investment characteristics. Liquidity is not sufficient to
insure against disruption in debt service. Operating factors and market access
may be subject to a high degree of variation.

DEFAULT

D-5 Issuer failed to meet scheduled principal and/or interest
payments.

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<PAGE>

THOMSON BANKWATCH (TBW) SHORT-TERM RATINGS

TBW assigns Short-Term Debt Ratings to specific debt instruments with original
maturities of one year or less.

TBW-1 (LC-1) The highest category; indicates a very high likelihood that
principal and interest will be paid on a timely basis.

TBW-2 (LC-2) The second-highest category; while the degree of safety regarding
timely repayment of principal and interest is strong, the relative degree of
safety is not as high as for issues rated TBW-1.

TBW-3 (LC-3) The lowest investment-grade category; indicates that while the
obligation is more susceptible to adverse developments (both internal and
external) than those with higher ratings, the capacity to service principal and
interest in a timely fashion is considered adequate.

TBW-4 (LC-4) The lowest rating category; this rating is regarded as
non-investment grade and therefore speculative.

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APPENDIX B - ADVISOR CLASS SHARES

FRONT-END SALES LOAD

The offering price for Advisor Class shares is the next NAV calculated after a
purchase order is accepted, plus any applicable initial sales charges. No
sales charge is imposed on reinvested dividends and distributions. Advisor
Class shares are also subject to Rule 12b-1 fees at an annual rate of 0.25% of
average daily net assets. The amount of the initial sales charge you pay when
you buy Advisor Class shares differs depending on the amount you invest and the
Fund you invest in, as follows:

FOR THE ENTERPRISE, GROWTH, GROWTH 20, AND OPPORTUNITY FUNDS.

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Dealer
Reallowance as a
Amount of As a Percentage As a Percentage Percentage of Offering
Your Investment Of Offering Price of Investment Price
Less than $50,000 5.75% 6.10% 5.00%
$50,000 but less than $100,000 4.50% 4.71% 3.75%
$100,000 but less than $250,000 3.50% 3.63% 2.80%
$250,000 but less than $500,000 2.50% 2.56% 2.00%
$500,000 but less than $1,000,000 2.00% 2.04% 1.60%
$1,000,000 or more None None None
</TABLE>

DEALER REALLOWANCES. As shown above, Distributor pays (or "reallows") a
portion of the initial sales charge. The dealer reallowance is expressed as a
percentage of the Advisor Class shares' offering price.

WAIVER OF FRONT-END SALES LOAD

As used in this Appendix, the term "dealer" includes any broker, dealer, bank
(including bank trust departments), registered investment adviser, financial
planner and any other financial institutions having a selling agreement or
other similar agreement with Distributor. In the following circumstances, the
initial sales charge imposed on purchases of Advisor Class shares are waived:

1. DIVIDEND REINVESTMENT. Shares acquired through reinvestment of dividends
and distributions.

2. CERTAIN ACQUISITIONS/LIQUIDATIONS. Shares acquired on account of the
acquisition or liquidation of assets of other investment companies.

3. WRAP ACCOUNT AND FUND "SUPERMARKET" INVESTMENTS. Shares acquired by
investments through certain dealers (including registered investment
advisors and financial planners) which have established certain operational
arrangements with the Advisor which include a requirement that such shares
be sold for the sole benefit of clients participating in a "wrap" account,
mutual fund "supermarket" account, or a similar program under which such
clients pay a fee to such dealer.

4. INVESTMENTS BY INSURANCE COMPANY SEPARATE ACCOUNTS. Shares acquired by
insurance company separate accounts.

5. CERTAIN RETIREMENT PLANS. Shares acquired by certain retirement plans or
trust accounts whose third party administrators or dealers have entered into
an administrative services agreement with Distributor or the Advisor or one
of their affiliates to perform certain administrative services, subject to
certain operational and minimum size requirements specified from time to
time by Distributor or the Advisor or one of their affiliates.

6. BANK TRUST DEPARTMENTS AND LAW FIRMS. Shares acquired by certain bank trust
departments or law firms acting as trustee or manager for trust accounts
which have entered into an administrative services agreement with
Distributor or the Advisor or one of their affiliates and the shares are
being acquired for the benefit of their trust account clients.

OTHER ADVISOR CLASS SHARES INFORMATION

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<PAGE>

1. REINSTATEMENT PRIVILEGE. Shareholders of the Fund who have redeemed their
shares have a one-time right to reinvest the redemption proceeds at net
asset value (without a sales charge). Such a reinvestment must be made
within 90 days of the redemption and is limited to the amount of the
redemption proceeds. Although redemptions and repurchases of shares are
taxable events, a reinvestment within a certain period of time in the same
fund may be considered a "wash sale" and may result in the inability to
recognize currently all or a portion of a loss realized on the original
redemption for federal income tax purposes. Please see your tax adviser for
further information.

2. LETTER OF INTENT (LOI). If a shareholder (other than a group purchaser
described below) anticipates purchasing $50,000 or more of Advisor Class
shares of a Fund within a 13-month period, the shareholder may obtain
Advisor Class shares of the Fund at the same reduced sales charge as though
the total quantity were invested in one lump sum by completing the Letter of
Intent and delivering the Letter of Intent to the Advisor within 90 days of
the commencement of purchases. Subject to acceptance by the Advisor and the
conditions mentioned below, each purchase will be made at a public offering
price applicable to a single transaction of the dollar amount specified in
the Letter of Intent. The shareholder or his dealer must inform the Advisor
that the Letter of Intent is in effect each time shares are purchased. The
shareholder makes no commitment to purchase additional shares, but if his
purchases within 13 months plus the value of shares credited toward
completion of the Letter of Intent do not total the sum specified, the
shareholder will pay the increased amount of the sales charge as described
below. Instructions for issuance of shares in the name of a person other
than the person signing the Letter of Intent application must be accompanied
by a written statement from the dealer stating that the shares were paid for
by the person signing such Letter. Neither income dividends nor capital gain
distributions taken in additional shares will apply toward the completion of
the Letter of Intent. Out of the shareholder's initial purchase (or
subsequent purchases if necessary), shares equal to difference between the
lower sales charge and the higher sales charge the investor would have paid
had the investor not purchased shares through this program will be held in
escrow until the intended amount is invested. These escrowed shares may be
redeemed by the Fund if the investor is required to pay additional sales
charges. When the minimum investment so specified is completed the escrowed
shares will be released. If the intended investment is not completed, the
Advisor or Distributor will redeem an appropriate number of the escrowed
shares in order to realize such difference. Shares remaining after any such
redemption will be released by the Advisor or Distributor. By completing
and signing the Account Application or Letter of Intent, the shareholder
irrevocably appoints the Advisor and/or the Distributor as the shareholder's
attorney to surrender for redemption any or all escrowed shares with full
power of substitution in the premises.

3. RIGHT OF ACCUMULATION. A shareholder qualifies for cumulative quantity
discounts on the purchase of Advisor Class shares when the shareholder's new
investment, together with the current offering price value of Advisor Class
shares of that Fund reaches a discount level. A shareholder (or his
investment adviser) must provide the Advisor or Distributor with information
to verify that the quantity sales charge discount is applicable at the time
the investment is made.

4. GROUP PURCHASES. A bona fide group and all its members may be treated as a
single purchaser and, under the Right of Accumulation (but not the Letter of
Intent) obtain quantity sales charge discounts on the purchase of Advisor
Class shares if the group (1) gives its endorsement or authorization to the
investment program so it may be used by the investment dealer to facilitate
solicitation of the membership, thus effecting economies of sales effort;
(2) has been in existence for at least six months and has a legitimate
purpose other than to purchase mutual fund shares at a discount; (3) is not
a group of individuals whose sole organizational nexus is as credit
cardholders of a company, policyholders of an insurance company, customers
of a bank or broker-dealer, clients of an investment adviser or other
similar groups; and (4) agrees to provide certification of membership of
those members investing money in the Advisor Class shares upon the request
of the Advisor or Distributor.

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<PAGE>

ADDITIONAL DEALER COMMISSIONS/CONCESSIONS

Dealers may receive different compensation with respect to sales of Advisor
Class shares. In addition, from time to time, Distributor may pay dealers 100%
of the applicable sales charge on sales of Advisor Class shares of certain
specified Funds sold by such dealer during a specified sales period. In
addition, from time to time, Distributor, at its expense, may provide
additional commissions, compensation or promotional incentives ("concessions")
to dealers which sell or arrange for the sale of shares of the Fund. Such
concessions provided by Distributor may include financial assistance to dealers
in connection with pre-approved conferences or seminars, sales or training
programs for invited registered representatives and other employees, payment
for travel expenses, including lodging, incurred by registered representatives
and other employees for such seminars or training programs, seminars for the
public, advertising and sales campaigns regarding one or more Funds, and/or
other dealer-sponsored events. From time to time, Distributor may make expense
reimbursements for special training of a dealer's registered representatives
and other employees in group meetings or to help pay the expenses of sales
contests. Other concessions may be offered to the extent not prohibited by
state laws or any self-regulatory agency, such as the NASD.

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<PAGE>

[Strong logo and picture of man and two children fishing]

prospectus

THE STRONG
DOW 30 VALUE FUND

May 1, 2000

1
<PAGE>

2
<PAGE>

TABLE OF CONTENTS
Your Investment................................................................
KEY INFORMATION................................................................
What are the fund's goals?.....................................................1
What are the fund's principal investment strategies?...........................1
What are the main risks of investing in the fund?..............................2
What are the fund's fees and expenses?.........................................6
Who are the fund's investment advisor and portfolio managers?..................7
OTHER IMPORTANT INFORMATION YOU SHOULD KNOW....................................8
Financial Highlights..........................................................10
Your Account....................................................................
Share Price...................................................................12
Buying Shares.................................................................12
Selling Shares................................................................15
Additional Policies...........................................................17
Distributions.................................................................19
Taxes.........................................................................19
Services For Investors........................................................20
Reserved Rights...............................................................23
For More Information..................................................Back Cover

IN THIS PROSPECTUS, "WE" REFERS TO STRONG CAPITAL MANAGEMENT, INC., THE
INVESTMENT ADVISOR, ADMINISTRATOR, AND TRANSFER AGENT FOR THE STRONG FUNDS.

2
<PAGE>

YOUR INVESTMENT

KEY INFORMATION

WHAT ARE THE FUND'S GOALS?

The STRONG DOW 30 VALUE FUND* seeks capital growth.

WHAT ARE THE FUND'S PRINCIPAL INVESTMENT STRATEGIES?

The DOW 30 VALUE FUND invests in the 30 blue-chip companies that make up the
Dow Jones Industrial Average (DJIA). The fund indexes half of its assets to the
DJIA. With the remaining assets, the fund's managers add to positions in select
DJIA stocks based on several value criteria. The managers may sell a holding
from the actively managed portion of the portfolio when it no longer fits the
selection criteria.

DJIA INDEXING. With approximately 50% of the fund's net assets, the fund will
maintain price-weighted positions in each of the 30 DJIA companies' securities.
In this way, this portion of the fund's portfolio will seek to approximate the
price-weighted total return of these companies.

OVERWEIGHTING OF DJIA. In addition, the fund will invest between 30% and 50% of
its net assets in certain securities of the DJIA using a proprietary rating
system and other valuation measures that help identify those stocks in the DJIA
that appear to offer the greatest potential for gains. The proprietary rating
system takes into account such valuation measures as dividend yield,
price-earnings (P-E) ratio, cash flow, discounted cash flows, value of
discounted dividends, P-E ratio to growth rate, earnings momentum, and earnings
revisions.

STOCK ALLOCATION. The fund may invest up to 20% of its net assets in cash and
short-term investment-grade fixed income securities based upon the Subadvisor's
interpretations of the Dow Theory. The Dow Theory states that a major market
trend, either a Bull or Bear market, must be confirmed by a similar movement in
the DJIA and the Dow Jones Transportation Average. According to Dow Theory, a
significant trend is not confirmed until both of these indexes reach
significant new highs or lows.

Generally, the fund will not have a position in any company greater than 10% of
the fund's net assets. The fund may also engage in futures and options
transactions on the DJIA for hedging or risk management purposes. The use of
futures and options may include elements of leverage and the fluctuation of the
value of such instruments in relation to their underlying assets may be
magnified.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?

NONDIVERSIFIED PORTFOLIO: As a nondiversified fund, the fund takes large
positions in individual stocks. As a result, the shares of this fund are likely
to fluctuate in value more than those of a fund investing in a broader range of
securities.

4
<PAGE>

The fund is appropriate for investors who are comfortable with the risks
described here and whose financial goals are five years or more in the future.
The fund is not appropriate for investors concerned primarily with principal
stability.
((Side Box))
*Dow JonesSM, Dow Jones Industrial AverageSM, Dow 30SM , and DJIASM are service
marks of Dow Jones & Company, Inc. and have been licensed for use for certain
purposes by the Strong Dow 30 Value Fund. The Strong Dow 30 Value Fund is
based, in whole or in part, on the Dow Jones Industrial AverageSM. The Strong
Dow 30 Value Fund is not sponsored, endorsed, sold, or promoted by Dow Jones,
and Dow Jones makes no representation regarding the advisability of investing
in the fund. Please read "Other Important Information You Should Know" for
additional information.

The return on the following pages illustrates how the fund's performance can
vary, which is one indication of the risks of investing in the fund. Please
keep in mind that the fund's past performance does not represent how it will
perform in the future. The information assumes that you reinvested all
dividends and distributions.

CALENDAR YEAR TOTAL RETURNS

<TABLE>
<CAPTION>
<S> <C>
Year Dow 30 Value
1998 16.1%
1999 24.9%
</TABLE>

BEST AND WORST QUARTERLY PERFORMANCE
(DURING THE PERIODS SHOWN ABOVE)

<TABLE>
<CAPTION>
<S> <C>
BEST QUARTER RETURN WORST QUARTER RETURN
- --------------------- ---------------------
15.4% (4th Q 1998) -10.7% (3rd Q 1998)
</TABLE>

AVERAGE ANNUAL TOTAL RETURNS
AS OF 12-31-99
FUND/INDEX 1-YEAR SINCE INCEPTION
DOW 30 VALUE 24.87% 20.41% (12-31-97)
Dow Jones Industrial Average 27.18% 22.57%
Lipper Large-Cap Value Funds Index 10.78% 14.45%

THE DOW JONES INDUSTRIAL AVERAGE IS AN UNMANAGED INDEX GENERALLY REPRESENTATIVE
OF THE U.S. STOCK MARKET. THE LIPPER LARGE-CAP VALUE FUNDS INDEX IS AN
EQUALLY-WEIGHTED PERFORMANCE INDEX OF THE LARGEST QUALIFYING FUNDS IN THIS
LIPPER CATEGORY.

WHAT ARE THE FUND'S FEES AND EXPENSES?

5
<PAGE>

This section describes the fees and expenses that you may pay if you buy and
hold shares of the fund.

SHAREHOLDER FEES
(fees paid directly from your investment)
The fund is 100% no-load, so you pay no sales charges (loads) to buy or sell
shares.

ANNUAL FUND OPERATING EXPENSES (AS A PERCENT OF AVERAGE NET ASSETS)

Management Fee 0.80%

Other Expenses 0.48%
Total Annual Fund Operating Expenses* 1.28%

*TOTAL ANNUAL FUND OPERATING EXPENSES DO NOT REFLECT OUR WAIVER OF MANAGEMENT
FEES AND/OR ABSORPTIONS. WITH WAIVERS AND/OR ABSORPTIONS, THE TOTAL ANNUAL
FUND OPERATING EXPENSES OF THE FUND WERE 1.25%. WE CAN TERMINATE WAIVERS AND
ABSORPTIONS FOR THIS FUND AT ANY TIME.

EXAMPLE: This example is intended to help you compare the cost of investing in
the fund, before waivers and absorptions, with the cost of investing in other
mutual funds. The example assumes that you invest $10,000 in the fund and
reinvest all dividends and distributions for the time periods indicated, and
then redeem all of your shares at the end of those periods. The example also
assumes that your investment has a 5% return each year and that the fund's
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions, your costs would be:

<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------- -------- ------- --------
$130 $406 $702 $1,545
- -------- -------- ------- --------
</TABLE>

WHO ARE THE FUND'S INVESTMENT ADVISOR AND PORTFOLIO MANAGERS?

SUBADVISOR FOR DOW 30 VALUE FUND. Horizon Investment Services, LLC (Subadvisor)
is the subadvisor for the fund under an agreement with Strong. Under this
agreement and under the supervision of the fund's Board of Directors and
Strong, the Subadvisor provides a continuous investment program for the fund.
This means the Subadvisor selects the securities the fund buys and sells. The
Subadvisor began conducting business in November 1997 and has approximately
$129 million under management as of March 31, 2000. Its address is 7412
Calumet Avenue, Suite 300, Hammond, IN 46324-2692.

The following individuals are the fund's portfolio managers:

CHARLES B. CARLSON co-manages the DOW 30 VALUE FUND. He has over 15 years of
investment experience and is a Chartered Financial Analyst. He has been
employed by the Subadvisor as a portfolio manager and Vice President since the
Subadvisor was formed in November 1997. He has co-managed the fund since its
inception in December 1997. Mr. Carlson has been employed by Horizon
Management Services, Inc. ("HMS") and its predecessor, Dow Theory Forecasts,
Inc., as Vice President since 1986. The Subadvisor is a wholly-owned
subadvisory of HMS. HMS publishes and distributes investment-related
newsletters through

6
<PAGE>

its subsidiaries. Mr. Carlson has been employed by Horizon Publishing Company,
a wholly-owned subsidiary of HMS, and its predecessor, Northstar Financial
Inc., since 1982. He has served as the Contributing Editor of the DOW THEORY
FORECAST newsletter since 1982, the Managing Editor of the NO-LOAD STOCK
INVESTOR since 1996 and the Managing Editor of THE DRIP INVESTOR newsletter
since 1992. Prior to the fund's inception, Mr. Carlson had not managed a mutual
fund. However, he has managed a portion of a corporate equity account of HMS.
He received his bachelors degree in Journalism from Northwestern University in
1982 and his Masters of Business Administration in Finance from the University
of Chicago in 1993.

RICHARD J. MORONEY co-manages the DOW 30 VALUE FUND. He has over ten years of
investment experience and is a Chartered Financial Analyst. He has been
employed by the Subadvisor as a portfolio manager and Vice President since the
Subadvisor was formed in November 1997. He has co-managed the fund since its
inception in December 1997. Mr. Moroney is employed by HMS where he has been a
Vice President and Editor of the DOW THEORY FORECAST newsletter since July
1995. For four years prior to that, Mr. Moroney worked as Managing Editor of
the DOW THEORY FORECAST newsletter. For two years prior to that, he was a
research analyst for HMS' predecessor corporation, Dow Theory Forecasts, Inc.
Prior to the fund's inception, Mr. Moroney had not managed a mutual fund.
However, he has managed a portion of a corporate equity account of HMS. He
received his bachelors degree in Journalism and Economics from Northwestern
University in 1989 and his Masters of Business Administration with
concentrations in Accounting and Finance from the University of Chicago in
1996.

OTHER IMPORTANT INFORMATION YOU SHOULD KNOW

THE FUND IS NOT SPONSORED BY DOW JONES

The fund is not sponsored, endorsed, sold or promoted by Dow Jones. Dow Jones
makes no representation or warranty, express or implied, to the shareholders of
the fund or any member of the public regarding the advisability of investing in
securities generally or in the fund particularly. Dow Jones' only relationship
to the fund is the licensing of certain trademarks and trade names of Dow Jones
and of the Dow Jones Industrial AverageSM which is determined, composed and
calculated by Dow Jones without regard to the fund. Dow Jones has no obligation
to take the needs of the fund or its shareholders into consideration in
determining, composing or calculating Dow Jones Industrial AverageSM. Dow Jones
is not responsible for and has not participated in the determination of the
timing of, prices at, or quantities of the fund's shares to be issued or in the
determination or calculation of the equation by which the fund's shares are to
be redeemed. Dow Jones has no obligation or liability in connection with the
administration or marketing of the fund.

DOW JONES DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE DOW
JONES INDUSTRIAL AVERAGESM OR ANY DATA INCLUDED THEREIN AND DOW JONES SHALL
HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. DOW
JONES MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY
THE FUND, SHAREHOLDERS OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE
OF THE DOW JONES INDUSTRIAL AVERAGESM OR ANY DATA INCLUDED THEREIN. DOW JONES
MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES,
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO
THE DOW JONES INDUSTRIAL AVERAGESM OR ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL DOW JONES HAVE ANY LIABILITY
FOR ANY LOST PROFITS OR INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES
(INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS
BETWEEN DOW JONES AND THE FUND.

7
<PAGE>

FINANCIAL HIGHLIGHTS

This information describes investment performance for the periods shown.
Certain information reflects financial results for a single fund share. "Total
Return" shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been audited by PricewaterhouseCoopers LLP,
whose report, along with the fund's financial statements, is included in the
fund's annual report.

STRONG DOW 30 VALUE FUND
Dec. 31, Dec. 31,
SELECTED PER-SHARE DATA(a) 1999 1998
Net Asset Value, Beginning of Period $11.43 $10.00
Income From Investment Operations:
Net Investment Income 0.05 0.18
Net Realized and Unrealized Gains on Investments 2.79 1.43
Total from Investment Operations 2.84 1.61
Less Distributions:
From Net Investment Income (0.05) (0.18)
Total Distributions (0.05) (0.18)
Net Asset Value, End of Period $14.22 $11.43
RATIOS AND SUPPLEMENTAL DATA
Total Return +24.9% +16.1%
Net Assets, End of Period (In Thousands) $113,976 $28,248
Ratio of Expenses to Average Net Assets without Waivers
and Absorptions 1.1% 2.0%
Ratio of Expenses to Average Net Assets 1.1% 0.1%
Ratio of Net Investment Income to Average Net Assets 0.6% 2.1%
Portfolio Turnover Rate 64.8% 45.7%

(a) Information presented relates to a share of capital stock of the fund
outstanding for the entire period.

YOUR ACCOUNT

SHARE PRICE

((Side Box))

BUYING SHARES

INVESTMENT MINIMUMS: When buying shares, you must meet the following
investment minimum requirements.

SIMPLE IRA, SEP-IRA, 403(b)(7), Keogh, the lesser of $250 or $25 per month $50
Pension Plan, and Profit Sharing
Plan accounts
- -------------------------------------- ----------------------------------- ----------------------------------
</TABLE>

PLEASE REMEMBER ...
- - If you use an Automatic Investment Plan, we waive the initial investment
minimum to open an account and the additional investment minimum is $50.
- - You cannot use an Automatic Investment Plan with an Education IRA.
- - If you open a qualified retirement plan account where we or one of our
alliance partners provides administrative services, there is no initial
investment minimum.

8
<PAGE>

BUYING INSTRUCTIONS
You can buy shares in several ways.

MAIL

EXCHANGE OPTION

((Side Box))
QUESTIONS?
Call 800-368-3863
24 hours a day
7 days a week

EXPRESS PURCHASESM

STRONG DIRECT(R)

You can use Strong Direct(R) to add to your investment from your bank account
or to exchange shares between Strong Funds by calling 800-368-7550. See
"Services for Investors" for more information.

8
<PAGE>

STRONG NETDIRECT(R)

You can use Strong netDirect(R) at WWW.ESTRONG.COM, to add to your investment
from your bank account or to exchange shares between Strong Funds. See
"Services for Investors" for more information.

INVESTOR CENTERS

You can visit our Investor Center in Menomonee Falls, Wisconsin, near Milwaukee.
Call 800-368-3863 for hours and directions, or for the location of our other
Investor Centers.

WIRE

Call 800-368-3863 for instructions before wiring funds either to open or add
to an account. This helps to ensure that your account will be credited
promptly and correctly.

AUTOMATIC INVESTMENT SERVICES

BROKER-DEALER

PLEASE REMEMBER . . .

We only accept checks payable to Strong.

- - We do not accept cash, third-party checks, credit card convenience checks, or
checks drawn on banks outside the U.S.

- - You will be charged $20 for every check, wire, or Electronic Funds Transfer
returned unpaid.

SELLING SHARES

10
<PAGE>

SELLING INSTRUCTIONS
You can sell shares in several ways.

REDEMPTION OPTION

(1) We can mail a check to your account's address. Checks will not be
forwarded by the Postal Service, so please notify us if your address has
changed.

(2) We can transmit the proceeds by Electronic Funds Transfer to a properly
pre-authorized bank account. The proceeds usually will arrive at your bank
two banking days after we process your redemption.

(3) For a $10 fee, we can transmit the proceeds by wire to a properly
pre-authorized bank account. The proceeds usually will arrive at your bank
the first banking day after we process your redemption.

STRONG DIRECT(R)

You can redeem shares through Strong Direct(R) at 800-368-7550. See "Services
for Investors" for more information.

STRONG NETDIRECT(R)

You can use Strong netDirect(R) at, WWW.ESTRONG.COM, to redeem shares. See
"Services for Investors" for more information.

11
<PAGE>

INVESTOR CENTERS

You can visit our Investor Center in Menomonee Falls, Wisconsin, near
Milwaukee. Call 800-368-3863 for hours and directions, or for the location of
our other Investor Centers.

AUTOMATIC INVESTMENT SERVICES

BROKER-DEALER
You may sell shares through a broker-dealer or other intermediary who may
charge you a fee.

PLEASE REMEMBER ...

- - If you recently purchased shares, a redemption request on those shares
generally will not be honored until 10 days after we receive the purchase
check or electronic transaction.

- - Some transactions and requests require a signature guarantee.

((Side Box))

12
<PAGE>

ADDITIONAL POLICIES

TELEPHONE AND INTERNET TRANSACTIONS

INVESTING THROUGH A THIRD PARTY

If you invest through a third party (rather than directly with Strong), the
policies and fees may be different than described in this prospectus. Banks,
brokers, 401(k) plans, financial advisors, and financial supermarkets may
charge transaction fees and may set different minimum investments or
limitations on buying or selling shares. Consult a representative of your
plan or financial institution if you are not sure.

LOW BALANCE ACCOUNT FEE
Because of the high cost of maintaining small accounts, an annual low balance
account fee of $10 (or the value of the account if the account value is less
than $10) will be charged to all accounts that fail to meet the initial
investment minimum. The fee, which is payable to the transfer agent, will not
apply to (1) any retirement accounts, (2) accounts with an automatic investment
plan (unless regular investments have been discontinued), or (3) shareholders
whose combined Strong Funds assets total $100,000 or more. We may waive the
fee, in our discretion, in the event that a significant market correction
lowers an account balance below the account's initial investment minimum. The
effective date of this policy is September 1, 2000.

VERIFICATION OF ACCOUNT STATEMENTS
You should contact Strong in writing regarding any errors or discrepancies
within 45 days after the date of the statement confirming a transaction. The
statement will be deemed correct if we do not hear from you within those 45
days.

DISTRIBUTIONS

DISTRIBUTION POLICY
The fund generally pays you dividends from net investment income and
distributes any net capital gains that it realizes annually.

13
<PAGE>

REINVESTMENT OF DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS

TAXES

((Side Box))
<TABLE>
<CAPTION>
<S> <C>
Generally, if your investment is in a Traditional IRA or
other TAX-DEFERRED ACCOUNT, your dividends and
distributions will not be taxed at the time they are paid,
but instead at the time you withdraw them from your
account.
- ----------------------------------------------------------
</TABLE>

YEAR-END STATEMENT
To assist you in tax preparation, after the end of each calendar year, we send
you a statement of your fund's ordinary dividends and net capital gain
distributions (Form 1099).

((Side Box))

<TABLE>
<CAPTION>
<S> <C>
Unless your investment is in a tax-deferred retirement
account such as an IRA, YOU MAY WANT TO AVOID:
- -Investing a large amount in a fund close to the end of
the calendar year. If the fund makes a capital gain
distribution, you may receive some of your
investment back as a taxable distribution.
- -Selling shares of a mutual fund at a loss and then
investing in the same fund within 30 days before or
after the sale. This is called a wash sale and you will
not be allowed to claim a tax loss on the transaction.
- ---------------------------------------------------------
</TABLE>

14
<PAGE>

((Side Box))
<TABLE>
<CAPTION>
<S> <C>
COST BASIS is the amount that you paid for the shares.
When you sell shares, you subtract the cost basis from the
sale proceeds to determine whether you realized an
investment gain or loss. For example, if you bought a
share of a fund at $10 and you sold it two years later at
$11, your cost basis on the share is $10 and your gain is
$1.
- ----------------------------------------------------------
</TABLE>

Because everyone's tax situation is unique, you should consult your tax
professional for assistance.

SERVICES FOR INVESTORS

Strong provides you with a variety of services to help you manage your
investment. For more details, call 800-368-3863, 24 hours a day, 7 days a
week. These services include:

STRONG DIRECT (R) AUTOMATED TELEPHONE SYSTEM

Our 24-hour automated response system enables you to use a touch-tone phone to
access current share prices (800-368-3550), to access fund and account
information (800-368-5550), and to make purchases, exchanges, or redemptions
among your existing accounts if you have elected these services
(800-368-7550). Passwords help to protect your account information.

ESTRONG.COM

STRONG NETDIRECT(R)

STRONG EXCHANGE OPTION

15
<PAGE>

STRONG AUTOMATIC INVESTMENT SERVICES
You may invest or redeem automatically in the following ways, some of which
may be subject to additional restrictions or conditions.

AUTOMATIC INVESTMENT PLAN (AIP)
This plan allows you to make regular, automatic investments from your bank
checking or savings account.

AUTOMATIC EXCHANGE PLAN
This plan allows you to make regular, automatic exchanges from one eligible
Strong Fund to another.

AUTOMATIC DIVIDEND REINVESTMENT

PAYROLL DIRECT DEPOSIT PLAN
This plan allows you to send all or a portion of your paycheck, social
security check, military allotment, or annuity payment to the Strong Funds of
your choice.

STRONG RETIREMENT PLAN SERVICES
We offer a wide variety of retirement plans for individuals and institutions,
including large and small businesses. For information on:

- - INDIVIDUAL RETIREMENT PLANS, including Traditional IRAs and Roth IRAs, call
800-368-3863.

- - QUALIFIED RETIREMENT PLANS, including SIMPLE IRAs, SEP-IRAs, 403(b)(7)s,
Keoghs, Pension Plans, Profit Sharing Plans, and 401(k) Plans, call
800-368-2882.

SOME OF THESE SERVICES MAY BE SUBJECT TO ADDITIONAL RESTRICTIONS OR
CONDITIONS. CALL 800-368-3863 FOR MORE INFORMATION.

16
<PAGE>

RESERVED RIGHTS

We reserve the right to:

- - Refuse, change, discontinue, or temporarily suspend account services
including purchase, exchange, or telephone and Strong netDirect(R) redemption
privileges, for any reason.

- - Change the minimum or maximum investment amounts.

- - Delay sending out redemption proceeds for up to seven days (this generally
only applies to very large redemptions without notice, excessive trading, or
during unusual market conditions).

- - Reject any purchase or redemption request that does not contain all required
documentation.

17
<PAGE>

FOR MORE INFORMATION

More information is available upon request at no charge, including:

To request information or to ask questions:

BY TELEPHONE FOR HEARING-IMPAIRED (TDD)

414-359-1400 or 800-368-3863 800-999-2780

BY MAIL BY OVERNIGHT DELIVERY
Strong Funds Strong Funds
P.O. Box 2936 900 Heritage Reserve

Milwaukee, WI 53201-2936 Menomonee Falls, WI 53051

ON THE INTERNET BY E-MAIL

View on-line or download documents: [email protected]

Strong Funds: WWW.ESTRONG.COM

SEC*:www.sec.gov

This prospectus is not an offer to sell securities in places other than the
United States and its territories.

Strong Dow 30 Value Fund, a series of Strong Equity Funds, Inc., SEC file
number: 811-8100

18
<PAGE>

STATEMENT OF ADDITIONAL INFORMATION ("SAI")

STRONG DOW 30 VALUE FUND*, A SERIES FUND OF STRONG EQUITY FUNDS, INC.

P.O. Box 2936

Milwaukee, WI 53201

Telephone: (414) 359-1400
Toll-Free: (800) 368-3863

e-mail: [email protected]

Web Site: www.eStrong.com

This SAI is not a Prospectus and should be read together with the Prospectus
for the Fund dated May 1, 2000. Requests for copies of the Prospectus should
be made by calling either number listed above. The financial statements
appearing in the Annual Report, which accompanies this SAI, are incorporated
into this SAI by reference.

May 1, 2000

*The Fund is not sponsored, endorsed, sold or promoted by Dow Jones. Dow Jones
makes no representation or warranty, express or implied, to the shareholders of
the Fund or any member of the public regarding the advisability of investing in
securities generally or in the Fund particularly. Dow Jones' only relationship
to the Fund is the licensing of certain trademarks and trade names of Dow Jones
and of the Dow Jones Industrial AverageSM which is determined, composed and
calculated by Dow Jones without regard to the Fund. Dow Jones has no
obligation to take the needs of the Fund or its shareholders into consideration
in determining, composing or calculating Dow Jones Industrial AverageSM. Dow
Jones is not responsible for and has not participated in the determination of
the timing of, prices at, or quantities of the Fund's shares to be issued or in
the determination or calculation of the equation by which the Fund's shares are
to be redeemed. Dow Jones has no obligation or liability in connection with
the administration or marketing of the Fund.

1
<PAGE>

TABLE OF CONTENTS PAGE

2
<PAGE>

INVESTMENT RESTRICTIONS

FUNDAMENTAL INVESTMENT LIMITATIONS

Unless indicated otherwise below, the Fund:

3. May not issue senior securities, except as permitted under the 1940 Act.

With respect to the Dow 30 Value Fund, Fundamental Policy No. 1 does not apply
because the Fund is non-diversified.

3
<PAGE>

NON-FUNDAMENTAL OPERATING POLICIES

The following are the Fund's non-fundamental operating policies which may be
changed by the Fund's Board of Directors without shareholder approval.

Unless indicated otherwise below, the Fund may not:

4. Purchase securities of other investment companies except in compliance
with the 1940 Act and applicable state law.

5. Invest all of its assets in the securities of a single open-end
investment management company with substantially the same fundamental
investment objective, restrictions and policies as the Fund.

7. Borrow money except (1) from banks or (2) through reverse repurchase
agreements or mortgage dollar rolls, and will not purchase securities when bank
borrowings exceed 5% of its total assets.

8. Make any loans other than loans of portfolio securities, except through
(1) purchases of debt securities or other debt instruments, or (2) engaging in
repurchase agreements.

4
<PAGE>

INVESTMENT POLICIES AND TECHNIQUES

STRONG DOW 30 VALUE FUND

- - With approximately 50% of the Fund's net assets, the Fund will maintain
price-weighted positions in each of the 30 Dow Jones Industrial Average
(DJIA) companies' securities. In this way, this portion of the Fund's
portfolio will seek to approximate the price-weighted total return of these
companies.

- - In addition, the Fund will invest between 30% and 50% of its net assets in
certain securities of the DJIA using a proprietary rating system and other
valuation measures that help identify those stocks in the DJIA that appear to
offer the greatest potential for gains. The proprietary rating system takes
into account such valuation measures as dividend yield, price-earnings (P-E)
ratio, cash flow, discounted cash flows, value of discounted dividends, P-E
ratio to growth rate, earnings momentum, and earnings revisions.

- - The Fund may invest up to 20% of its net assets in cash and short-term
investment-grade fixed income securities based upon the Subadvisor's
interpretations of the Dow Theory.

The following information supplements the discussion of the Fund's investment
objective, policies, and techniques described in the Prospectus.

BORROWING

The Fund may borrow money from banks and make other investments or engage in
other transactions permissible under the 1940 Act which may be considered a
borrowing (such as mortgage dollar rolls and reverse repurchase agreements).
However, the Fund may not purchase securities when bank borrowings exceed 5%
of the Fund's total assets. Presently, the Fund only intends to borrow from
banks for temporary or emergency purposes.

The Fund has established a line-of-credit ("LOC") with certain banks by which
it may borrow funds for temporary or emergency purposes. A borrowing is
presumed to be for temporary or emergency purposes if it is repaid by the Fund
within 60 days and is not extended or renewed. The Fund intends to use the
LOC to meet large or unexpected redemptions that would otherwise force the
Fund to liquidate securities under circumstances which are unfavorable to the
Fund's remaining shareholders. The Fund pays a commitment fee to the banks
for the LOC.

FUTURES AND OPTIONS

IN GENERAL. The Fund may use futures and options on the DJIA for any lawful
purpose consistent with the Fund's investment objective such as hedging or
managing risk.

GENERAL LIMITATIONS. The use of futures and options is subject to applicable
regulations of the Securities and Exchange Commission (the "SEC"), the several
options and futures exchanges upon which they may be traded, the Commodity
Futures Trading Commission ("CFTC"), and various state regulatory authorities.
In addition, the Fund's ability to use such instruments may be limited by
certain tax considerations. For a discussion of the federal income tax
treatment of the Fund's derivative instruments, see "Taxes - Derivative
Instruments."

The Fund has filed a notice of eligibility for exclusion from the definition
of the term "commodity pool operator" with the CFTC and the National Futures
Association, which regulate trading in the futures markets. In accordance
with Rule 4.5 of the regulations under the Commodity Exchange Act (the "CEA"),
the notice of eligibility for the Fund includes representations that the Fund
will use futures contracts and related options solely for bona fide hedging
purposes within the meaning of CFTC regulations, provided that the Fund may
hold other positions in futures contracts and related options that do not
qualify as a bona fide hedging position if the aggregate initial margin
deposits and premiums required to establish these positions, less the amount
by which any such futures contracts and related options positions are "in the
money," do not exceed 5% of the Fund's net assets. Adherence to these
guidelines does not limit the Fund's risk to 5% of the Fund's assets.

5
<PAGE>

assets, as defined under the 1940 Act, the SEC has stated that the Fund may use
coverage or the segregation of the Fund's assets. To the extent required by
SEC guidelines, the Fund will not enter into any such transactions unless it
owns either: (i) an offsetting ("covered") position in securities, options,
futures, or derivative instruments; or (ii) cash or liquid securities positions
with a value sufficient at all times to cover its potential obligations to the
extent that the position is not "covered". The Fund will also set aside cash
and/or appropriate liquid assets in a segregated custodial account if required
to do so by the SEC and CFTC regulations. Assets used as cover or held in a
segregated account cannot be sold while the derivative position is open, unless
they are replaced with similar assets. As a result, the commitment of a large
portion of the Fund's assets to segregated accounts could impede portfolio
management or the Fund's ability to meet redemption requests or other current
obligations.

In some cases the Fund may be required to maintain or limit exposure to a
specified percentage of its assets to a particular asset class. In such
cases, when the Fund uses a derivative instrument to increase or decrease
exposure to an asset class and is required by applicable SEC guidelines to set
aside liquid assets in a segregated account to secure its obligations under
the derivative instruments, the Advisor may, where reasonable in light of the
circumstances, measure compliance with the applicable percentage by reference
to the nature of the economic exposure created through the use of the
derivative instrument and not by reference to the nature of the exposure
arising from the liquid assets set aside in the segregated account (unless
another interpretation is specified by applicable regulatory requirements).

OPTIONS. The Fund may use options for any lawful purpose consistent with the
Fund's investment objective such as hedging or managing risk. An option is a
contract in which the "holder" (the buyer) pays a certain amount (the
"premium") to the "writer" (the seller) to obtain the right, but not the
obligation, to buy from the writer (in a "call") or sell to the writer (in a
"put") a specific asset at an agreed upon price (the "strike price" or
"exercise price") at or before a certain time (the "expiration date"). The
holder pays the premium at inception and has no further financial obligation.
The holder of an option will benefit from favorable movements in the price of
the underlying asset but is not exposed to corresponding losses due to adverse
movements in the value of the underlying asset. The writer of an option will
receive fees or premiums but is exposed to losses due to changes in the value
of the underlying asset. The Fund may buy or write (sell) put and call
options on assets, such as securities, currencies, commodities, and indices of
debt and equity securities ("underlying assets") and enter into closing
transactions with respect to such options to terminate an existing position.
Options used by the Fund may include European, American, and Bermuda style
options. If an option is exercisable only at maturity, it is a "European"
option; if it is also exercisable prior to maturity, it is an "American"
option. If it is exercisable only at certain times, it is a "Bermuda" option.

The Fund may purchase (buy) and write (sell) put and call options underlying
assets and enter into closing transactions with respect to such options to
terminate an existing position. The purchase of call options serves as a long
hedge, and the purchase of put options serves as a short hedge. Writing put
or call options can enable the Fund to enhance income by reason of the
premiums paid by the purchaser of such options. Writing call options serves
as a limited short hedge because declines in the value of the hedged
investment would be offset to the extent of the premium received for writing
the option. However, if the security appreciates to a price higher than the
exercise price of the call option, it can be expected that the option will be
exercised and the Fund will be obligated to sell the security at less than its
market value or will be obligated to purchase the security at a price greater
than that at which the security must be sold under the option. All or a
portion of any assets used as cover for OTC options written by the Fund would
be considered illiquid to the extent described under "Investment Policies and
Techniques - Illiquid Securities." Writing put options serves as a limited
long hedge because increases in the value of the hedged investment would be
offset to the extent of the premium received for writing the option. However,
if the security depreciates to a price lower than the exercise price of the
put option, it can be expected that the put option will be exercised and the
Fund will be obligated to purchase the security at more than its market value.

6
<PAGE>

The Fund may purchase or write both exchange-traded and OTC options.
Exchange-traded options are issued by a clearing organization affiliated with
the exchange on which the option is listed that, in effect, guarantees
completion of every exchange-traded option transaction. In contrast, OTC
options are contracts between the Fund and the other party to the transaction
("counter party") (usually a securities dealer or a bank) with no clearing
organization guarantee. Thus, when the Fund purchases or writes an OTC
option, it relies on the counter party to make or take delivery of the
underlying investment upon exercise of the option. Failure by the counter
party to do so would result in the loss of any premium paid by the Fund as
well as the loss of any expected benefit of the transaction.

The Fund's ability to establish and close out positions in exchange-listed
options depends on the existence of a liquid market. The Fund intends to
purchase or write only those exchange-traded options for which there appears
to be a liquid secondary market. However, there can be no assurance that such
a market will exist at any particular time. Closing transactions can be made
for OTC options only by negotiating directly with the counter party, or by a
transaction in the secondary market if any such market exists. Although the
Fund will enter into OTC options only with counter parties that are expected
to be capable of entering into closing transactions with the Fund, there is no
assurance that the Fund will in fact be able to close out an OTC option at a
favorable price prior to expiration. In the event of insolvency of the
counter party, the Fund might be unable to close out an OTC option position at
any time prior to its expiration. If the Fund were unable to effect a closing
transaction for an option it had purchased, it would have to exercise the
option to realize any profit.

FUTURES CONTRACTS. The Fund may use futures contracts for any lawful purpose
consistent with the Fund's investment objective such as hedging or managing
risk. The Fund may enter into futures contracts, including interest rate,
index, and currency futures. The Fund may also purchase put and call options,
and write covered put and call options, on futures in which it is allowed to
invest. The purchase of futures or call options thereon can serve as a long
hedge, and the sale of futures or the purchase of put options thereon can
serve as a short hedge. Writing covered call options on futures contracts can
serve as a limited short hedge, and writing covered put options on futures
contracts can serve as a limited long hedge, using a strategy similar to that
used for writing covered options in securities. The Fund's hedging may
include purchases of futures as an offset against the effect of expected
increases in securities prices and sales of futures as an offset against the
effect of expected declines in securities prices. The Fund may also write put
options on futures contracts while at the same time purchasing call options on
the same futures contracts in order to create synthetically a long futures
contract position. Such options would have the same strike prices and
expiration dates. The Fund will engage in this strategy only when the Advisor
believes it is more advantageous to the Fund than is purchasing the futures
contract.

To the extent required by regulatory authorities, the Fund only enters into
futures contracts that are traded on national futures exchanges and are
standardized as to maturity date and underlying financial instrument. Futures
exchanges and trading are regulated under the CEA by the CFTC. Although
techniques other than sales and purchases of futures contracts could be used
to the Fund's exposure to market, or interest rate fluctuations, the Fund may
be able to hedge its exposure more effectively and perhaps at a lower cost
through using futures contracts.

An index futures contract is an agreement pursuant to which the parties agree
to take or make delivery of an amount of cash equal to the difference between
the value of the index at the close of the last trading day of the contract
and the price at which the index futures contract was originally written.
Transaction costs are incurred when a futures contract is bought or sold and
margin deposits must be maintained. A futures contract may be satisfied by
delivery or purchase, as the case may be, of the instrument, the currency or
by payment of the change in the cash value of the index. More commonly,
futures contracts are closed out prior to delivery by entering into an
offsetting transaction in a matching futures contract. Although the value of
an index might be a function of the value of certain specified securities, no
physical delivery of those securities is made. If the offsetting purchase
price is less than the original sale price, the Fund realizes a gain; if it is
more, the Fund realizes a loss. Conversely, if the offsetting sale price is
more than the original purchase price, the Fund realizes a gain; if it is
less, the Fund realizes a loss. The transaction costs must also be included
in these calculations. There can be no assurance, however, that the Fund will
be able to enter into an offsetting transaction with respect to a particular
futures contract at a particular time. If the

7
<PAGE>

Fund is not able to enter into an offsetting transaction, the Fund will
continue to be required to maintain the margin deposits on the futures
contract.

Subsequent "variation margin" payments are made to and from the futures broker
daily as the value of the futures position varies, a process known as "marking
to market." Variation margin does not involve borrowing, but rather
represents a daily settlement of the Fund's obligations to or from a futures
broker. When the Fund purchases an option on a future, the premium paid plus
transaction costs is all that is at risk. In contrast, when the Fund
purchases or sells a futures contract or writes a call or put option thereon,
it is subject to daily variation margin calls that could be substantial in the
event of adverse price movements. If the Fund has insufficient cash to meet
daily variation margin requirements, it might need to sell securities at a
time when such sales are disadvantageous. Purchasers and sellers of futures
positions and options on futures can enter into offsetting closing
transactions by selling or purchasing, respectively, an instrument identical
to the instrument held or written. Positions in futures and options on
futures may be closed only on an exchange or board of trade that provides a
secondary market. The Fund intends to enter into futures transactions only on
exchanges or boards of trade where there appears to be a liquid secondary
market. However, there can be no assurance that such a market will exist for
a particular contract at a particular time.

Under certain circumstances, futures exchanges may establish daily limits on
the amount that the price of a future or option on a futures contract can vary
from the previous day's settlement price; once that limit is reached, no
trades may be made that day at a price beyond the limit. Daily price limits
do not limit potential losses because prices could move to the daily limit for
several consecutive days with little or no trading, thereby preventing
liquidation of unfavorable positions.

If the Fund were unable to liquidate a futures or option on a futures contract
position due to the absence of a liquid secondary market or the imposition of
price limits, it could incur substantial losses. The Fund would continue to
be subject to market risk with respect to the position. In addition, except
in the case of purchased options, the Fund would continue to be required to
make daily variation margin payments and might be required to maintain the
position being hedged by the future or option or to maintain cash or
securities in a segregated account.

Certain characteristics of the futures market might increase the risk that
movements in the prices of futures contracts or options on futures contracts
might not correlate perfectly with movements in the prices of the investments
being hedged. For example, all participants in the futures and options on
futures contracts markets are subject to daily variation margin calls and
might be compelled to liquidate futures or options on futures contracts
positions whose prices are moving unfavorably to avoid being subject to
further calls. These liquidations could increase price volatility of the
instruments and distort the normal price relationship between the futures or
options and the investments being hedged. Also, because initial margin
deposit requirements in the futures markets are less onerous than margin
requirements in the securities markets, there might be increased participation
by speculators in the future markets. This participation also might cause
temporary price distortions. In addition, activities of large traders in both
the futures and securities markets involving arbitrage, "program trading" and
other investment strategies might result in temporary price distortions.
ILLIQUID SECURITIES

8
<PAGE>

The Board of Directors of the Fund, or its delegate, has the ultimate
authority to determine, to the extent permissible under the federal securities
laws, which securities are illiquid for purposes of this limitation. Certain
securities exempt from registration or issued in transactions exempt from
registration under the Securities Act of 1933, as amended ("Securities Act"),
such as securities that may be resold to institutional investors under Rule
144A under the Securities Act and Section 4(2) commercial paper, may be
considered liquid under guidelines adopted by the Fund's Board of Directors.

The Board of Directors of the Fund has delegated to the Advisor the day-to-day
determination of the liquidity of a security, although it has retained
oversight and ultimate responsibility for such determinations. The Board of
Directors has directed the Advisor to look to such factors as (1) the
frequency of trades or quotes for a security, (2) the number of dealers
willing to purchase or sell the security and number of potential buyers, (3)
the willingness of dealers to undertake to make a market in the security, (4)
the nature of the security and nature of the marketplace trades, such as the
time needed to dispose of the security, the method of soliciting offers, and
the mechanics of transfer, (5) the likelihood that the security's
marketability will be maintained throughout the anticipated holding period,
and (6) any other relevant factors. The Advisor may determine 4(2) commercial
paper to be liquid if (1) the 4(2) commercial paper is not traded flat or in
default as to principal and interest, (2) the 4(2) commercial paper is rated
in one of the two highest rating categories by at least two NRSROs, or if only
one NRSRO rates the security, by that NRSRO, or is determined by the Advisor
to be of equivalent quality, and (3) the Advisor considers the trading market
for the specific security taking into account all relevant factors. With
respect to any foreign holdings, a foreign security may be considered liquid
by the Advisor (despite its restricted nature under the Securities Act) if the
security can be freely traded in a foreign securities market and all the facts
and circumstances support a finding of liquidity.

Restricted securities may be sold only in privately negotiated transactions or
in a public offering with respect to which a registration statement is in
effect under the Securities Act. Where registration is required, the Fund may
be obligated to pay all or part of the registration expenses and a
considerable period may elapse between the time of the decision to sell and
the time the Fund may be permitted to sell a security under an effective
registration statement. If, during such a period, adverse market conditions
were to develop, the Fund might obtain a less favorable price than prevailed
when it decided to sell. Restricted securities will be priced in accordance
with pricing procedures adopted by the Board of Directors of the Fund. If
through the appreciation of restricted securities or the depreciation of
unrestricted securities the Fund should be in a position where more than 15%
of the value of its net assets are invested in illiquid securities, including
restricted securities which are not readily marketable (except for 144A
Securities and 4(2) commercial paper deemed to be liquid by the Advisor), the
Fund will take such steps as is deemed advisable, if any, to protect the
liquidity of the Fund's portfolio.

LENDING OF PORTFOLIO SECURITIES

The Fund is authorized to lend up to 33 1/3% of the total value of its
portfolio securities to broker-dealers or institutional investors that the
Advisor deems qualified, but only when the borrower maintains with the Fund's
custodian bank collateral either in cash or money market instruments in an
amount at least equal to the market value of the securities loaned, plus
accrued interest and dividends, determined on a daily basis and adjusted
accordingly. Although the Fund is authorized to lend, the Fund does not
presently intend to engage in lending. In determining whether to lend
securities to a particular broker-dealer or institutional investor, the
Advisor will consider, and during the period of the loan will monitor, all
relevant facts and circumstances, including the creditworthiness of the
borrower. The Fund will retain authority to terminate any loans at any time.
The Fund may pay reasonable administrative and custodial fees in connection
with a loan and may pay a negotiated portion of the interest earned on the
cash or money market instruments held as collateral to the borrower or placing
broker. The Fund will receive reasonable interest on the loan or a flat fee
from the borrower and amounts equivalent to any dividends, interest or other
distributions on the securities loaned. The Fund will retain record ownership
of loaned securities to exercise beneficial rights, such as voting and
subscription rights and rights to dividends, interest or other distributions,
when retaining such rights is considered to be in the Fund's interest.

REPURCHASE AGREEMENTS

9
<PAGE>

default or insolvency of the other party to the agreement, including possible
delays or restrictions upon the Fund's ability to dispose of the underlying
securities. Although no definitive creditworthiness criteria are used, the
Advisor reviews the creditworthiness of the banks and non-bank dealers with
which the Fund enters into repurchase agreements to evaluate those risks. The
Fund may, under certain circumstances, deem repurchase agreements
collateralized by U.S. government securities to be investments in U.S.
government securities.

TEMPORARY DEFENSIVE POSITION

When the Advisor determines that market conditions warrant a temporary
defensive position, the Fund may invest without limitation in cash and
short-term fixed income securities, including U.S. government securities,
commercial paper, banker's acceptances, certificates of deposit, and time
deposits.

DIRECTORS AND OFFICERS

*RICHARD S. STRONG (DOB 5/12/42), Director and Chairman of the Board of the
Strong Funds.

MARVIN E. NEVINS (DOB 7/9/18), Director of the Strong Funds.

Private Investor. From 1945 to 1980, Mr. Nevins was Chairman of Wisconsin
Centrifugal Inc., a foundry. From 1980 until 1981, Mr. Nevins was the Chairman
of the Wisconsin Association of Manufacturers & Commerce. He has been a
Director of A-Life Medical, Inc., San Diego, CA since 1996 and Surface
Systems, Inc. (a weather information company), St. Louis, MO since 1992. He
was also a regent of the Milwaukee School of Engineering and a member of the
Board of Trustees of the Medical College of Wisconsin and Carroll College.

WILLIE D. DAVIS (DOB 7/24/34), Director of the Strong Funds.

Mr. Davis has been Director of Alliance Bank since 1980, Sara Lee Corporation
(a food/consumer products company) since 1983, KMart Corporation (a discount
consumer products company) since 1985, Dow Chemical Company since 1988, MGM
Grand, Inc. (an entertainment/hotel company) since 1990, WICOR, Inc. (a
utility company) since 1990, Johnson Controls, Inc. (an industrial company)
since 1992, Checker's Hamburger, Inc. since 1994, and MGM, Inc. (an
entertainment company) since 1998. Mr. Davis has been a trustee of the
University of Chicago since 1980 and Marquette University since 1988. Since
1977, Mr. Davis has been President and Chief Executive Officer of All Pro
Broadcasting, Inc. Mr. Davis was a Director of the Fireman's Fund (an
insurance company) from 1975 until 1990.

9
<PAGE>

STANLEY KRITZIK (DOB 1/9/30), Director of the Strong Funds.

Mr. Kritzik has been a Partner of Metropolitan Associates since 1962, a
Director of Aurora Health Care since 1987, and Health Network Ventures, Inc.
since 1992.

WILLIAM F. VOGT (DOB 7/19/47), Director and Chairman of the Independent
Directors Committee of the Strong Funds.

Mr. Vogt has been the President of Vogt Management Consulting, Inc. since
1990. From 1982 until 1990, he served as Executive Director of University
Physicians of the University of Colorado. Mr. Vogt is the Past President of
the Medical Group Management Association and a Fellow of the American College
of Medical Practice Executives.

NEAL MALICKY (DOB 9/14/34), Director of the Strong Funds.

Mr. Malicky has been Chancellor at Baldwin-Wallace College since July 1999.
From 1981 to July 1999, he served as President of Baldwin-Wallace College. He
is a Trustee of Southwest Community Health Systems, Cleveland Scholarship
Program, and The National Conference for Community Justice (NCCJ). He is also
the Past President of the National Association of Schools and Colleges of the
United Methodist Church, the Past Chairperson of the Association of
Independent Colleges and Universities of Ohio, and the Past Secretary of the
National Association of Independent Colleges and Universities.

STEPHEN J. SHENKENBERG (DOB 6/14/58), Vice President and Secretary of the
Strong Funds.

JOHN S. WEITZER (DOB 10/31/67), Vice President of the Strong Funds.

Mr. Weitzer has been Senior Counsel of the Advisor since December 1997. From
July 1993 until December 1997, Mr. Weitzer acted as Associate Counsel to the
Advisor.

THOMAS M. ZOELLER (DOB 2/21/64), Vice President of the Strong Funds.

DENNIS A. WALLESTAD (DOB 11/3/62), Vice President of the Strong Funds.

10
<PAGE>

Asset Management, Inc. From July 1994 to November 1996, Mr. Wallestad was
Chief Financial Officer for Firstar Trust and Investments Group. From
September 1991 to June 1994 and from September 1985 to August 1989, Mr.
Wallestad was an Audit Manager for Arthur Andersen & Co., LLP in Milwaukee.
Mr. Wallestad completed a Masters of Accountancy from the University of
Oklahoma from September 1989 to August 1991.

JOHN W. WIDMER (DOB 1/19/65), Treasurer of the Strong Funds.

RHONDA K. HAIGHT (DOB 11/13/64), Assistant Treasurer of the Strong Funds.

Unless otherwise noted below, as of March 31, 2000, the officers and
directors of the Fund in the aggregate beneficially owned less than 1% of the
Fund's then outstanding shares.

<TABLE>
<CAPTION>
<S> <C> <C>
FUND SHARES PERCENT
- ------ ------ -------
None
</TABLE>

PRINCIPAL SHAREHOLDERS

Unless otherwise noted below, as of March 31, 2000, no persons owned of record
or are known to own of record or beneficially more than 5% of the Fund's then
outstanding shares.

<TABLE>
<CAPTION>
<S> <C> <C>
NAME AND ADDRESS FUND/SHARES PERCENT
- ---------------- ------------ ------------
None
</TABLE>

INVESTMENT ADVISOR

11
<PAGE>

of the Fund's outstanding voting securities, or by the Advisor, and will
terminate automatically in the event of its assignment.

Except for expenses assumed by the Advisor, as set forth above, or by Strong
Investments, Inc. with respect to the distribution of the Fund's shares, the
Fund is responsible for all its other expenses, including, without limitation,
interest charges, taxes, brokerage commissions, and similar expenses; expenses
of issue, sale, repurchase or redemption of shares; expenses of registering or
qualifying shares for sale with the states and the SEC; expenses for printing
and distribution of prospectuses to existing shareholders; charges of
custodians (including fees as custodian for keeping books and similar services
for the Fund), transfer agents (including the printing and mailing of reports
and notices to shareholders), registrars, auditing and legal services, and
clerical services related to recordkeeping and shareholder relations; printing
of stock certificates; fees for directors who are not "interested persons" of
the Advisor; expenses of indemnification; extraordinary expenses; and costs of
shareholder and director meetings.

<TABLE>
<CAPTION>
<S> <C>
FUND ANNUAL RATE
- ----------------- ---------------
Dow 30 Value Fund 0.80%
</TABLE>

The Fund paid the following management fees for the time periods indicated:

<TABLE>
<CAPTION>
<S> <C> <C> <C>
MANAGEMENT FEE
FISCAL YEAR ENDED MANAGEMENT FEE ($) WAIVER ($) AFTER WAIVER ($)
- ----------------- ------------------ ---------------- ----------------
12/31/98 149,451 143,758 5,693
12/31/99 582,923 13,689 569,234
</TABLE>

<TABLE>
<CAPTION>
<S> <C>
FUND ORGANIZATIONAL EXPENSES
- --------------------- -----------------------
Dow 30 Value Fund $21,074
</TABLE>

12
<PAGE>

17(a) of the 1940 Act by effecting trades between mutual funds, and between
mutual funds and Harbour Investments Ltd. ("Harbour"), without complying with
the exemptive provisions of SEC Rule 17a-7 or otherwise obtaining an exemption.
It further found that the Advisor violated, and Mr. Strong aided and abetted
violations of, the disclosure provisions of the 1940 Act and the Investment
Advisers Act of 1940 by misrepresenting the Advisor's policy on personal
trading and by failing to disclose trading by Harbour, an entity in which
principals of the Advisor owned between 18 and 25 percent of the voting stock.
As part of the settlement, the respondents agreed to a censure and a cease and
desist order and the Advisor agreed to various undertakings, including adoption
of certain procedures and a limitation for six months on accepting certain
types of new advisory clients.

13
<PAGE>

INVESTMENT SUBADVISOR

The Advisor has retained Horizon Investment Services, LLC (the "Subadvisor")
to manage the Fund's investments. The Subadvisor was formed in November 1997
to provide subadvisory services to the Fund and the Fund is currently the sole
investment advisory client of the Subadvisor. The Subadvisor is a limited
liability company organized in Indiana and is a wholly owned subsidiary of
Horizon Management Services, Inc. ("HMS"), a firm that publishes and
distributes investment-related newsletters through its wholly owned
subsidiaries. Mr. Robert T. Evans, the President of HMS, is the controlling
shareholder of HMS.

The Fund's subadvisory agreement, dated December 30, 1997 (the "Subadvisory
Agreement"), was last approved by the Fund's initial shareholder on its first
day of operations. Under the Subadvisory Agreement the Subadvisor, pursuant
to the oversight and supervision of the Fund's Board of Directors and the
Advisor, provides a continuous investment program for the Fund. Under the
Subadvisory Agreement, the Subadvisor is responsible for determining the
securities to be purchased or sold by the Fund. However, the Advisor is
responsible for executing the Fund's purchase or sale transactions and for
managing the Fund's cash investments, which on average is expected to be less
than 5% of the Fund's net assets. The Subadvisor bears all of its own
expenses in providing subadvisory services to the Fund.

The Subadvisory Agreement may be terminated at any time, without payment of
any penalty, by vote of the Board of Directors of the Fund or by a vote of a
majority of the outstanding voting securities of the Fund on 60 days written
notice to the Subadvisor. The Subadvisory Agreement may also be terminated by
the Advisor for breach upon 20 days notice, immediately in the event that the
Subadvisor becomes unable to discharge its duties and obligations, and upon 60
days notice for any reason. The Subadvisory Agreement may be terminated by
the Subadvisor upon 180 days notice for any reason. The Subadvisory Agreement
will terminate automatically in the event of its unauthorized assignment.

The Subadvisory Agreement requires the Advisor, not the Fund, to pay the
Subadvisor a fee, computed and paid monthly, at an annual rate of (i) 50% of
the total management fee collected by the Advisor from the Fund on the first
$1.0 billion of the Fund's net assets, (ii) 40% of the total management fee
collected by the Advisor from the Fund on the Fund's net assets over $1.0

15
<PAGE>

billion and up to $1.5 billion, (iii) 35% of the total management fee collected
by the Advisor from the Fund on the Fund's net assets over $1.5 billion and up
to $2.0 billion, (iv) 30% of the total management fee collected by the Advisor
from the Fund on the Fund's net assets over $2.0 billion and up to $2.5
billion, and (v) 10% of the total management fee collected by the Advisor from
the Fund on the Fund's net assets over $2.5 billion. However, prior to January
1, 2000, the Subadvisory fee shall be $250,000 per year. If the services of the
Subadvisor are terminated, the Advisor shall pay a compensatory amount to
Subadvisor in a manner to be determined.

The Subadvisor received the following subadvisory fees from the Advisor for
the time periods indicated.

<TABLE>
<CAPTION>
<S> <C>
FISCAL YEAR ENDED SUBADVISORY FEE ($)
- ------------------- -------------------
12/31/98 229,163
12/31/99 249,996
</TABLE>

The Subadvisor has adopted a Code of Ethics which is substantially identical
to the Code discussed above under "Investment Advisor."

DISTRIBUTOR

PORTFOLIO TRANSACTIONS AND BROKERAGE

16
<PAGE>

client accounts. When a bunched order is filled in its entirety, each
participating client account will participate at the average share price for
the bunched order on the same business day, and transaction costs shall be
shared pro rata based on each client's participation in the bunched order.
When a bunched order is only partially filled, the securities purchased will be
allocated on a pro rata basis to each client account participating in the
bunched order based upon the initial amount requested for the account, subject
to certain exceptions, and each participating account will participate at the
average share price for the bunched order on the same business day.

The Advisor may engage in "step-out" and "give-up" brokerage transactions
subject to best price and execution. In a step-out or give-up trade, an
investment advisor directs trades to a broker-dealer who executes the
transactions while a second broker-dealer clears and settles part or all of
the transaction. The first broker-dealer then shares part of its commission
with the second broker-dealer. The Advisor engages in step-out and give-up
transactions primarily (1) to satisfy directed brokerage arrangements of
certain of its client accounts and/or (2) to pay commissions to broker-dealers
that supply research or analytical services.

Where the Advisor itself receives both administrative benefits and research
and brokerage services from the services provided by brokers, it makes a good
faith allocation between the administrative benefits and the research and
brokerage services, and will pay for any administrative benefits with cash.
In making good faith allocations between administrative benefits and research
and brokerage services, a conflict of interest may exist by reason of the
Advisor's allocation of the costs of such benefits and services between those
that primarily benefit the Advisor and those that primarily benefit the Fund
and other advisory clients.

16
<PAGE>

rate that is higher than that which is available for typical secondary market
transactions. These arrangements may not fall within the safe harbor of Section
28(e).

Where consistent with a client's investment objectives, investment
restrictions, and risk tolerance, the Advisor may purchase securities sold in
underwritten public offerings for client accounts, commonly referred to as
"deal" securities. To the extent the Fund participates in deals in the
initial public offering market ("IPOs") and during the period that the Fund
has a small asset base, a significant portion of the Fund's returns may be
attributable to its IPO investments. As the Fund's assets grow, any impact of
IPO investments on the Fund's total return may decline and the Fund may not
continue to experience substantially similar performance.

17
<PAGE>

The Fund paid the following brokerage commissions for the time periods
indicated:

<TABLE>
<CAPTION>
<S> <C>
FISCAL YEAR ENDED BROKERAGE COMMISSIONS ($)
- ---------------------- -------------------------
12/31/98 17,155
12/31/99 26,807
</TABLE>

19
<PAGE>

Unless otherwise noted below, the Fund has not acquired securities of its
regular brokers or dealers (as defined in Rule 10b-1 under the 1940 Act) or
their parents.

<TABLE>
<CAPTION>
<S> <C>
REGULAR BROKER OR DEALER (OR PARENT) ISSUER VALUE OF SECURITIES OWNED AS OF DECEMBER 31, 1999
- ----------------------------------------------- -------------------------------------------------
Citigroup, Inc. $4,198,000
</TABLE>

CUSTODIAN

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

The Advisor, P.O. Box 2936, Milwaukee, Wisconsin, 53201, acts as transfer
agent and dividend-disbursing agent for the Fund. The Advisor is compensated
as follows:

<TABLE>
<CAPTION>
<S> <C>
FUND TYPE/SHARE CLASS FEE*
- ------------------------------------ -------------------------------------------------------------------------------
Money Funds and Investor Class $32.50 annual open account fee, $4.20 annual closed account fee.
shares of Money Funds
- ------------------------------------ -------------------------------------------------------------------------------
Advisor Class shares of Money 0.20% of the average daily net asset value of all Advisor Class shares.
Funds(1)
- ------------------------------------ -------------------------------------------------------------------------------
Institutional class shares of Money 0.015% of the average daily net asset value of all Institutional Class shares.
Funds
- ------------------------------------ -------------------------------------------------------------------------------
Income Funds and Investor Class $31.50 annual open account fee, $4.20 annual closed account fee.
shares of Income Funds
- ------------------------------------ -------------------------------------------------------------------------------
Advisor Class shares of Income 0.20% of the average daily net asset value of all Advisor Class shares.
Funds
- ------------------------------------ -------------------------------------------------------------------------------
Institutional Class shares of Income 0.015% of the average daily net asset value of all Institutional Class shares.
Funds
- ------------------------------------ -------------------------------------------------------------------------------
Equity Funds and Investor Class $21.75 annual open account fee, $4.20 annual closed account fee.
shares of Equity Funds
- ------------------------------------ -------------------------------------------------------------------------------
Advisor Class shares of Equity Funds 0.20% of the average daily net asset value of all Advisor Class shares.
- ------------------------------------ -------------------------------------------------------------------------------
Institutional Class shares of Equity 0.015% of the average daily net asset value of all Institutional Class shares.
Funds
- ------------------------------------ -------------------------------------------------------------------------------
</TABLE>

* Plus out-of-pocket expenses, such as postage and printing expenses in
connection with shareholder communications.

(1) Excluding the Strong Heritage Money Fund. The fee for the Heritage
Money Fund is 0.015% of the average daily net asset value of all Advisor Class
shares.

The fees and services provided as transfer agent and dividend disbursing agent
are in addition to those received and provided by the Advisor under the
Advisory Agreements.

20
<PAGE>

activities, answering inquiries relating to the Fund, transmitting proxy
statements, annual reports, updated prospectuses, other communications
regarding the Fund, and related services as the Fund or beneficial owners may
reasonably request. In such cases, the Fund will not pay fees based on the
number of beneficial owners at a rate that is greater than the rate the Fund is
currently paying the Advisor for providing these services to Fund shareholders;
however, the Advisor may pay to the third party amounts in excess of such
limitation out of its own profits.

The Fund paid the following amounts for the time periods indicated for transfer
agency and dividend disbursing and printing and mailing services:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PER ACCOUNT OUT-OF-POCKET PRINTING/MAILING TOTAL COST AFTER
FUND CHARGES ($) EXPENSES ($) SERVICES ($) WAIVER ($) WAIVER ($)
- ------------- ------------- ------------- ---------------- ------------- ----------------
12/31/98 93,822 13,160 1,044 90,944 17,082
12/31/99 186,791 23,598 1,032 3,186 208,235
</TABLE>

TAXES

GENERAL

The Fund intends to qualify annually for treatment as a regulated investment
company ("RIC") under Subchapter M of the Internal Revenue Code of 1986,
("IRC"). If so qualified, the Fund will not be liable for federal income tax
on earnings and gains distributed to its shareholders in a timely manner.
This qualification does not involve government supervision of the Fund's
management practices or policies. The following federal tax discussion is
intended to provide you with an overview of the impact of federal income tax
provisions on the Fund or its shareholders. These tax provisions are subject
to change by legislative or administrative action at the federal, state, or
local level, and any changes may be applied retroactively. Any such action
that limits or restricts the Fund's current ability to pass-through earnings
without taxation at the Fund level, or otherwise materially changes the Fund's
tax treatment, could adversely affect the value of a shareholder's investment
in the Fund. Because the Fund's taxes are a complex matter, you should
consult your tax adviser for more detailed information concerning the taxation
of the Fund and the federal, state, and local tax consequences to shareholders
of an investment in the Fund.

20
<PAGE>

22
<PAGE>

DERIVATIVE INSTRUMENTS

DETERMINATION OF NET ASSET VALUE

Generally, when an investor makes any purchases, sales, or exchanges, the price
of the investor's shares will be the net asset value ("NAV") next determined
after Strong Funds receives a request in proper form (which includes receipt of
all necessary and appropriate documentation and subject to available funds).
Any applicable sales charges will be added to the purchase price for Advisor
Class shares of the Fund, if any. The "offering price" is the initial sales
charge, if any, plus the NAV. If Strong Funds receives such a request prior to
the close of the New York Stock Exchange ("NYSE") on a day on which the NYSE is
open, the share price will be the NAV determined that day. The NAV for each
Fund or each class of shares is normally determined as of 3:00 p.m. Central
Time ("CT") each day the NYSE is open. The NYSE is open for trading Monday
through Friday except New Year's Day, Martin Luther King Jr. Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
and Christmas Day. Additionally, if any of the aforementioned holidays falls
on a Saturday, the NYSE will not be open for trading on the preceding Friday,
and when any such holiday falls on a Sunday, the NYSE will not be open for
trading on the succeeding Monday, unless unusual business conditions exist,
such as the ending of a monthly or yearly accounting period. The Fund
reserves the right to change the time at which purchases, redemptions, and
exchanges are priced if the NYSE closes at a time other than 3:00 p.m. CT or if
an emergency exists. The NAV of each Fund or of each class of shares of a Fund
is calculated by taking the fair value of the Fund's total assets attributable
to that Fund or class, subtracting all its liabilities attributable to that
Fund or class, and dividing by the total number of shares outstanding of that
Fund or class. Expenses are accrued daily and applied when determining the
NAV. The Fund's portfolio securities are valued based on market quotations or
at fair value as determined by the method selected by the Fund's Board of
Directors.

ADDITIONAL SHAREHOLDER INFORMATION

FUND REDEMPTIONS

23
<PAGE>

Institutional Class shareholders may redeem some or all of their shares by
telephone or by faxing a written request. After a redemption request is
processed, the proceeds from the sale will normally be sent on the next
business day but, in any event, no more than seven days later.

TELEPHONE AND INTERNET EXCHANGE/REDEMPTION PRIVILEGES

MOVING ACCOUNT OPTIONS AND INFORMATION

REDEMPTION-IN-KIND

SHARES IN CERTIFICATE FORM

Certificates will be issued for shares (other than Institutional Class shares)
held in a Fund account only upon written request. Certificates will not be
issued for Institutional Class shares of any Fund. A shareholder will,
however, have full shareholder rights whether or not a certificate is
requested.

DOLLAR COST AVERAGING

23
<PAGE>

cannot ensure a profit or protect against a loss during declining markets.
Since such a program involves continuous investment regardless of fluctuating
share values, investors should consider their ability to continue the program
through periods of both low and high share-price levels. These methods are
unavailable for Institutional Class accounts.

24
<PAGE>

FINANCIAL INTERMEDIARIES

SIGNATURE GUARANTEES

A signature guarantee may be obtained from any eligible guarantor institution,
as defined by the SEC. These institutions include banks, savings associations,
credit unions, brokerage firms, and others. Please note that a notary public
stamp or seal is not acceptable.

RIGHT OF SET-OFF

BROKERS RECEIPT OF PURCHASE AND REDEMPTION ORDERS

PROMOTIONAL ITEMS

26
<PAGE>

programs ("Give-Aways"). This is done in order to, among other reasons,
increase the number of users of and visits to the Fund's Internet web site. As
part of the Give-Aways, persons may receive cash or other awards including
without limitation, gifts, merchandise, gift certificates, travel, meals, and
lodging. Under the Advisor's and Distributor's standard rules for Give-Aways,
their employees, subsidiaries, advertising and promotion agencies, and members
of their immediate families are not eligible to enter the Give-Aways.

RETIREMENT PLANS

SIMPLIFIED EMPLOYEE PENSION PLAN (SEP-IRA): A SEP-IRA plan allows an employer
to make deductible contributions to separate IRA accounts established for each
eligible employee.

26
<PAGE>

28
<PAGE>

ORGANIZATION

The Fund is either a "Corporation" or a "Series" of common stock of a
Corporation, as described in the chart below:

<S> <C> <C> <C> <C> <C>
Incorporation Date Series Date Class Authorized Par
Corporation Date Created Created Shares Value ($)
- ---------------------------------- ------------- ------------ ------------ ------------ ------------

Strong Equity Funds, Inc.(1) 12/28/90 Indefinite .00001
- - Strong Growth Fund* 12/28/90 Indefinite .00001
+Investor Class(2) 12/28/90 Indefinite .00001
+Advisor Class 2/17/00 Indefinite .00001
+Institutional Class 2/17/00 Indefinite .00001
- - Strong Value Fund* 11/01/95 Indefinite .00001
- - Strong Mid Cap Growth Fund* 10/28/96 Indefinite .00001
- - Strong Index 500 Fund* 4/08/97 Indefinite .00001
- - Strong Growth 20 Fund* 6/04/97 Indefinite .00001
+Investor Class(2) 6/04/97 Indefinite .00001
+Advisor Class 2/17/00 Indefinite .00001
- - Strong Small Cap Value Fund* 12/10/97 Indefinite .00001
- - Strong Dow 30 Value Fund 12/10/97 Indefinite .00001
- - Strong Strategic Growth Fund* 5/4/98 Indefinite .00001
- - Strong Enterprise Fund* 9/15/98 Indefinite .00001
+Investor Class(2) 9/15/98 Indefinite .00001
+Advisor Class 2/17/00 Indefinite .00001
- - Strong Mid Cap Disciplined Fund* 12/15/98 Indefinite .00001
- -Strong U.S. Emerging Growth 12/15/98 Indefinite .00001
Fund*
- -Strong Internet Fund* 12/14/99 Indefinite .00001
- -Strong Technology 100 Fund* 12/14/99 Indefinite .00001
- -Strong Technology Index Plus 12/14/99 Indefinite .00001
Fund*
</TABLE>

* Described in a different prospectus and SAI.
(1) Prior to November 1, 1995, the Corporation's name was Strong Growth Fund,
Inc.

The Dow 30 Value Fund is a nondiversified series of Strong Equity Funds, Inc.,
an open-end management investment company.

29
<PAGE>

The Corporation is a Wisconsin corporation that is authorized to offer separate
series of shares representing interests in separate portfolios of securities,
each with differing investment objectives. The shares in any one portfolio
may, in turn, be offered in separate classes, each with differing preferences,
limitations or relative rights. However, the Articles of Incorporation for the
Corporation provide that if additional series of shares are issued by the
Corporation, such new series of shares may not affect the preferences,
limitations or relative rights of the Corporation's outstanding shares. In
addition, the Board of Directors of the Corporation is authorized to allocate
assets, liabilities, income and expenses to each series and class. Classes
within a series may have different expense arrangements than other classes of
the same series and, accordingly, the net asset value of shares within a series
may differ. Finally, all holders of shares of the Corporation may vote on each
matter presented to shareholders for action except with respect to any matter
which affects only one or more series or class, in which case only the shares
of the affected series or class are entitled to vote. Each share of the Fund
has one vote, and all shares participate equally in dividends and other capital
gains distributions by the Fund and in the residual assets of the Fund in the
event of liquidation. Fractional shares have the same rights proportionately
as do full shares. Shares of the Corporation have no preemptive, conversion, or
subscription rights. If the Corporation issues additional series, the assets
belonging to each series of shares will be held separately by the custodian,
and in effect each series will be a separate fund.

29
<PAGE>

SHAREHOLDER MEETINGS

The Wisconsin Business Corporation Law permits registered investment companies,
such as the Fund, to operate without an annual meeting of shareholders under
specified circumstances if an annual meeting is not required by the 1940 Act.
The Fund has adopted the appropriate provisions in its Bylaws and may, at its
discretion, not hold an annual meeting in any year in which the election of
directors is not required to be acted on by shareholders under the 1940 Act.

PERFORMANCE INFORMATION

The Strong Funds may advertise a variety of types of performance information as
more fully described below. The Fund's performance is historical and past
performance does not guarantee the future performance of the Fund. From time
to time, the Advisor may agree to waive or reduce its management fee and/or to
absorb certain operating expenses for the Fund. Waivers of management fees and
absorption of expenses will have the effect of increasing the Fund's
performance.

DISTRIBUTION RATE

The distribution rate for the Fund is computed, according to a non-standardized
formula, by dividing the total amount of actual distributions per share paid by
the Fund over a twelve month period by the Fund's net asset value on the last
day of the period. The distribution rate differs from the Fund's yield because
the distribution rate includes distributions to shareholders from sources other
than dividends and interest, such as short-term capital gains. Therefore, the
Fund's distribution rate may be substantially different than its yield. Both
the Fund's yield and distribution rate will fluctuate.

AVERAGE ANNUAL TOTAL RETURN

The Fund's average annual total return quotation is computed in accordance with
a standardized method prescribed by rules of the SEC. The average annual total
return for the Fund for a specific period is calculated by first taking a
hypothetical $10,000 investment ("initial investment") in the Fund's shares on
the first day of the period and computing the "redeemable value" of that
investment at the end of the period. The redeemable value is then divided by
the initial investment, and this quotient is taken to the Nth root (N
representing the number of years in the period) and 1 is subtracted from the
result, which is then expressed as a percentage. The calculation assumes that
all income and capital gains dividends paid by the Fund have been reinvested at
net asset value on the reinvestment dates during the period. Average annual
total returns reflect the impact of sales charges, if any.

TOTAL RETURN

Calculation of the Fund's total return is not subject to a standardized
formula. Total return performance for a specific period is calculated by first
taking an investment (assumed below to be $10,000) ("initial investment") in
the Fund's shares on the first day of the period and computing the "ending
value" of that investment at the end of the period. The total return
percentage is then determined by subtracting the initial investment from the
ending value and dividing the remainder by the initial investment and
expressing the result as a percentage. The calculation assumes that all income
and capital gains dividends paid by the Fund have been reinvested at net asset
value of the Fund on the reinvestment dates during the period. Total return
may also be shown as the increased dollar value of the hypothetical investment
over the period. Total returns reflect the impact of sales charges, if any.

CUMULATIVE TOTAL RETURN

31
<PAGE>

TOTAL RETURN

* Commenced operations on December 31, 1997.

COMPARISONS

U.S. TREASURY BILLS, NOTES, OR BONDS. Investors may want to compare the
performance of the Fund to that of U.S. Treasury bills, notes, or bonds, which
are issued by the U.S. Government. Treasury obligations are issued in selected
denominations. Rates of Treasury obligations are fixed at the time of issuance
and payment of principal and interest is backed by the full faith and credit of
the Treasury. The market value of such instruments will generally fluctuate
inversely with interest rates prior to maturity and will equal par value at
maturity. Generally, the values of obligations with shorter maturities will
fluctuate less than those with longer maturities.

MONEY MARKET FUNDS. Investors may also want to compare performance of the Fund
to that of money market funds. Money market fund yields will fluctuate and
shares are not insured, but share values usually remain stable.

31
<PAGE>

Kiplinger's, Smart Money, Financial World, Business Week, U.S. News and World
Report, The Wall Street Journal, Barron's, and a variety of investment
newsletters.

STRONG FUNDS. The Strong Funds offer a comprehensive range of conservative to
aggressive investment options. The Strong Funds and their investment objectives
are listed below.

FUND NAME INVESTMENT OBJECTIVE

- ---------------------------------- -----------------------------------------------------------------------------------
CASH MANAGEMENT
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Advantage Fund Current income with a very low degree of share-price fluctuation.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Heritage Money Fund Current income, a stable share price, and daily liquidity.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Investors Money Fund Current income, a stable share price, and daily liquidity.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Money Market Fund Current income, a stable share price, and daily liquidity.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Municipal Advantage Fund Federally tax-exempt current income with a very low degree of share-price
fluctuation.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Municipal Money Market Fund Federally tax-exempt current income, a stable share-price, and daily liquidity.
- ---------------------------------- -----------------------------------------------------------------------------------

- ---------------------------------- -----------------------------------------------------------------------------------
CONSERVATIVE EQUITY
- ---------------------------------- -----------------------------------------------------------------------------------
Strong American Utilities Fund Total return by investing for both income and capital growth.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Asset Allocation Fund High total return consistent with reasonable risk over the long term.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Blue Chip 100 Fund Total return by investing for both income and capital growth.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Equity Income Fund Total return by investing for both income and capital growth.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Growth and Income Fund High total return by investing for capital growth and income.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Limited Resources Fund Total return by investing for both capital growth and income.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Schafer Balanced Fund Total return by investing for both income and capital growth.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Schafer Value Fund Long-term capital appreciation principally through investment in common stocks
and other equity securities. Current income is a secondary objective.
- ---------------------------------- -----------------------------------------------------------------------------------

Strong Enterprise Fund Capital growth.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Growth Fund Capital growth.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Growth 20 Fund Capital growth.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Index 500 Fund To approximate as closely as practicable (before fees and expenses) the
capitalization-weighted total rate of return of that portion of the U.S. market for
publicly traded common stocks composed of the larger capitalized companies.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Internet Fund Capital growth.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Large Cap Growth Fund Capital growth.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Mid Cap Disciplined Fund Capital growth.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Mid Cap Growth Fund Capital growth.
- ---------------------------------- -----------------------------------------------------------------------------------
</TABLE>

32
<PAGE>

<TABLE>
<CAPTION>
<S> <C>
Strong Opportunity Fund Capital growth.
- ---------------------------------- ----------------------------------------------------------------------------------
Strong Small Cap Value Fund Capital growth.
- ---------------------------------- ----------------------------------------------------------------------------------
Strong Strategic Growth Fund Capital growth.
- ---------------------------------- ----------------------------------------------------------------------------------
Strong Technology 100 Fund Capital growth.
- ---------------------------------- ----------------------------------------------------------------------------------
Strong Technology Index Plus Fund Capital growth.
- ---------------------------------- ----------------------------------------------------------------------------------
Strong U.S. Emerging Growth Fund Capital growth.
- ---------------------------------- ----------------------------------------------------------------------------------
Strong Value Fund Capital growth.
- ---------------------------------- ----------------------------------------------------------------------------------

- ---------------------------------- ----------------------------------------------------------------------------------
INCOME
- ---------------------------------- ----------------------------------------------------------------------------------
Strong Bond Fund Total return by investing for a high level of current income with a moderate
degree of share-price fluctuation.
- ---------------------------------- ----------------------------------------------------------------------------------
Strong Corporate Bond Fund Total return by investing for a high level of current income with a moderate
degree of share-price fluctuation.
- ---------------------------------- ----------------------------------------------------------------------------------
Strong Government Securities Fund Total return by investing for a high level of current income with a moderate
degree of share-price fluctuation.
- ---------------------------------- ----------------------------------------------------------------------------------
Strong High-Yield Bond Fund Total return by investing for a high level of current income and capital growth.
- ---------------------------------- ----------------------------------------------------------------------------------
Strong Short-Term Bond Fund Total return by investing for a high level of current income with a low degree of
share-price fluctuation.
- ---------------------------------- ----------------------------------------------------------------------------------
Strong Short-Term High Yield Bond Total return by investing for a high level of current income with a moderate
Fund degree of share-price fluctuation.
- ---------------------------------- ----------------------------------------------------------------------------------

- ---------------------------------- ----------------------------------------------------------------------------------
INTERNATIONAL
- ---------------------------------- ----------------------------------------------------------------------------------
Strong Asia Pacific Fund Capital growth.
- ---------------------------------- ----------------------------------------------------------------------------------
Strong Foreign MajorMarketsSM Fund Capital growth.
- ---------------------------------- ----------------------------------------------------------------------------------
Strong Global High-Yield Bond Fund Total return by investing for a high level of current income and capital growth.
- ---------------------------------- ----------------------------------------------------------------------------------
Strong International Bond Fund High total return by investing for both income and capital appreciation.
- ---------------------------------- ----------------------------------------------------------------------------------

Strong International Stock Fund Capital growth.
- ---------------------------------- ----------------------------------------------------------------------------------
Strong Overseas Fund Capital growth.
- ---------------------------------- ----------------------------------------------------------------------------------
Strong Short-Term Global Bond Fund Total return by investing for a high level of income with a low degree of share
price fluctuation.
- ---------------------------------- ----------------------------------------------------------------------------------

- ---------------------------------- ----------------------------------------------------------------------------------
LIFE STAGE SERIES
- ---------------------------------- ----------------------------------------------------------------------------------
Strong Aggressive Portfolio Capital growth.
- ---------------------------------- ----------------------------------------------------------------------------------
Strong Conservative Portfolio Total return by investing primarily for income and secondarily for capital
growth.
- ---------------------------------- ----------------------------------------------------------------------------------
Strong Moderate Portfolio Total return by investing primarily for capital growth and secondarily for
income.
- ---------------------------------- ----------------------------------------------------------------------------------

- ---------------------------------- ----------------------------------------------------------------------------------
MUNICIPAL INCOME
- ---------------------------------- ----------------------------------------------------------------------------------
Strong High-Yield Municipal Bond Total return by investing for a high level of federally tax-exempt current income.
Fund
- ---------------------------------- ----------------------------------------------------------------------------------
Strong Municipal Bond Fund Total return by investing for a high level of federally tax-exempt current income
with a moderate degree of share-price fluctuation.
- ---------------------------------- ----------------------------------------------------------------------------------
Strong Short-Term High Yield Total return by investing for a high level of federally tax-exempt current income
Municipal Fund with a moderate degree of share-price fluctuation.
- ---------------------------------- ----------------------------------------------------------------------------------
Strong Short-Term Municipal Bond Total return by investing for a high level of federally tax-exempt current income
Fund with a low degree of share-price fluctuation.
- ---------------------------------- ----------------------------------------------------------------------------------
</TABLE>

34
<PAGE>

* The Fund is closed to new investors, except the Fund may continue to
offer its shares through certain 401(k) plans and similar company-sponsored
retirement plans.

The Advisor also serves as Advisor to several management investment companies,
some of which fund variable annuity separate accounts of certain insurance
companies.

The Fund may from time to time be compared to other Strong Funds based on a
risk/reward spectrum. In general, the amount of risk associated with any
investment product is commensurate with that product's potential level of
reward. The Strong Funds risk/reward continuum or any Fund's position on the
continuum may be described or diagrammed in marketing materials. The Strong
Funds risk/reward continuum positions the risk and reward potential of each
Strong Fund relative to the other Strong Funds, but is not intended to position
any Strong Fund relative to other mutual funds or investment products.
Marketing materials may also discuss the relationship between risk and reward
as it relates to an individual investor's portfolio.

TYING TIME FRAMES TO YOUR GOALS. There are many issues to consider as you make
your investment decisions, including analyzing your risk tolerance, investing
experience, and asset allocations. You should start to organize your
investments by learning to link your many financial goals to specific time
frames. Then you can begin to identify the appropriate types of investments to
help meet your goals. As a general rule of thumb, the longer your time
horizon, the more price fluctuation you will be able to tolerate in pursuit of
higher returns. For that reason, many people with longer-term goals select
stocks or long-term bonds, and many people with nearer-term goals match those
up with for instance, short-term bonds. The Advisor developed the following
suggested holding periods to help our investors set realistic expectations for
both the risk and reward potential of our funds. (See table below.) Of
course, time is just one element to consider when making your investment
decision.

STRONG FUNDS SUGGESTED MINIMUM HOLDING PERIODS

<TABLE>
<CAPTION>
<S> <C> <C>
UNDER 1 YEAR 1 TO 2 YEARS 4 TO 7 YEARS
- ---------------------- -------------------------- ---------------------------
Heritage Money Fund Advantage Fund Conservative Portfolio
Investors Money Fund Municipal Advantage Fund Corporate Bond Fund
Money Market Fund Global High-Yield Bond Fund
Municipal Money Market 2 TO 4 YEARS Government Securities Fund
Fund
Short-Term Bond Fund High-Yield Bond Fund
Short-Term Global Bond High-Yield Municipal Bond
Fund Fund
Short-Term High Yield Bond International Bond Fund
Fund Municipal Bond Fund
Short-Term High Yield
Municipal Fund
Short-Term Municipal Bond
Fund

<S> <C>
5 OR MORE YEARS
- ----------------------
Aggressive Portfolio
American Utilities Fund
Asia Pacific Fund
Asset Allocation Fund
Blue Chip 100 Fund
Common Stock Fund*
Discovery Fund
Dow 30 Value Fund
Enterprise Fund
Equity Income Fund
Foreign MajorMarketsSM
Fund
Growth Fund
Growth 20 Fund
Growth and Income Fund
Index 500 Fund
International Stock Fund
Internet Fund
Large Cap Growth Fund
Limited Resources Fund
Mid Cap Disciplined Fund
Mid Cap Growth Fund
Moderate Portfolio
Opportunity Fund
Overseas Fund
Schafer Balanced Fund
Schafer Value Fund
Small Cap Value Fund
Strategic Growth Fund
Technology 100 Fund
Technology Index Plus Fund
U.S. Emerging Growth Fund
Value Fund
</TABLE>

35
<PAGE>

* This Fund is closed to new investors, except the Fund may continue to
offer its shares through certain 401(k) plans and similar company-sponsored
retirement plans.

ADDITIONAL FUND INFORMATION

MEASURES OF VOLATILITY AND RELATIVE PERFORMANCE. Occasionally statistics may
be used to specify fund volatility or risk. The general premise is that greater
volatility connotes greater risk undertaken in achieving performance. Measures
of volatility or risk are generally used to compare the Fund's net asset value
or performance relative to a market index. One measure of volatility is beta.
Beta is the volatility of a fund relative to the total market as represented by
the Standard & Poor's 500 Stock Index. A beta of more than 1.00 indicates
volatility greater than the market, and a beta of less than 1.00 indicates
volatility less than the market. Another measure of volatility or risk is
standard deviation. Standard deviation is a statistical tool that measures the
degree to which a fund's performance has varied from its average performance
during a particular time period.

Standard deviation is calculated using the following formula:

Standard deviation = the square root of S(xi - xm)2
n-1

36
<PAGE>

Where: S = "the sum of",
xi = each individual return during the time period,
xm = the average return over the time period, and
n = the number of individual returns during the time period.

Other measures of volatility and relative performance may be used as
appropriate. However, all such measures will fluctuate and do not represent
future results.

GENERAL INFORMATION

BUSINESS PHILOSOPHY

INVESTMENT ENVIRONMENT

Discussions of economic, social, and political conditions and their impact on
the Fund may be used in advertisements and sales materials. Such factors that
may impact the Fund include, but are not limited to, changes in interest rates,
political developments, the competitive environment, consumer behavior,
industry trends, technological advances, macroeconomic trends, and the supply
and demand of various financial instruments. In addition, marketing materials
may cite the portfolio management's views or interpretations of such factors.

EIGHT BASIC PRINCIPLES FOR SUCCESSFUL MUTUAL FUND INVESTING

These common sense rules are followed by many successful investors. They make
sense for beginners, too. If you have a question on these principles, or would
like to discuss them with us, please contact us at 800-368-3863.

1. HAVE A PLAN - even a simple plan can help you take control of your
financial future. Review your plan once a year, or if your circumstances
change.

2. START INVESTING AS SOON AS POSSIBLE. Make time a valuable ally. Let it
put the power of compounding to work for you, while helping to reduce your
potential investment risk.

3. DIVERSIFY YOUR PORTFOLIO. By investing in different asset classes -
stocks, bonds, and cash - you help protect against poor performance in one type
of investment while including investments most likely to help you achieve your
important goals.

37
<PAGE>

5. MAINTAIN A LONG-TERM PERSPECTIVE. For most individuals, the best
discipline is staying invested as market conditions change. Reactive, emotional
investment decisions are all too often a source of regret - and principal loss.

6. CONSIDER STOCKS TO HELP ACHIEVE MAJOR LONG-TERM GOALS. Over time, stocks
have provided the more powerful returns needed to help the value of your
investments stay well ahead of inflation.

7. KEEP A COMFORTABLE AMOUNT OF CASH IN YOUR PORTFOLIO. To meet current
needs, including emergencies, use a money market fund or a bank account - not
your long-term investment assets.

MARKETS. The retirement plan services provided by the Advisor focus on four
distinct markets, based on the belief that a retirement plan should fit the
customer's needs, not the other way around.

1. SMALL COMPANY PLANS. Small company plans are designed for companies
with 1-50 plan participants. The objective is to incorporate the features and
benefits typically reserved for large companies, such as sophisticated
recordkeeping systems, outstanding service, and investment expertise, into a
small company plan without administrative hassles or undue expense. Small
company plan sponsors receive a comprehensive plan administration manual as
well as toll-free telephone support.
2. LARGE COMPANY PLANS. Large company plans are designed for companies
with between 51 and 1,000 plan participants. Each large company plan is
assigned a team of professionals consisting of an account manager, who is
typically an attorney, CPA, or holds a graduate degree in business, a
conversion specialist (if applicable), an accounting manager, a legal/technical
manager, and an education/communications educator.
3. WOMEN-OWNED BUSINESSES.
4. NON-PROFIT AND EDUCATIONAL ORGANIZATIONS (THE 403(B) MARKET).

TURNKEY APPROACH. The retirement plans offered by the Advisor are designed to
be streamlined and simple to administer. To this end, the Advisor has invested
heavily in the equipment, systems, and people necessary to adopt or convert a
plan, and to keep it running smoothly. The Advisor provides all aspects of the
plan, including plan design, administration, recordkeeping, and investment
management. To streamline plan design, the Advisor provides customizable
IRS-approved prototype documents. The Advisor's services also include annual
government reporting and testing as well as daily valuation of each
participant's account. This structure is intended to eliminate the confusion
and complication often associated with dealing with multiple vendors. It is
also designed to save plan sponsors time and expense.

The Advisor strives to provide one-stop retirement savings programs that
combine the advantages of proven investment management, flexible plan design,
and a wide range of investment options. The open architecture design of the
plans allow for the use of the family of mutual funds managed by the Advisor as
well as a stable asset value option. Large company plans may supplement these
options with their company stock (if publicly traded) or funds from other
well-known mutual fund families.

SERVICE. The Advisor's goal is to provide a world class level of service. One
aspect of that service is an experienced, knowledgeable team that provides
ongoing support for plan sponsors, both at adoption or conversion and
throughout the life of a plan. The Advisor is committed to delivering accurate
and timely information, evidenced by straightforward, complete, and
understandable reports, participant account statements, and plan summaries.

38
<PAGE>

STRONG FINANCIAL ADVISORS GROUP

INDEPENDENT ACCOUNTANTS

LEGAL COUNSEL

Godfrey & Kahn, S.C., 780 North Water Street, Milwaukee, Wisconsin 53202, acts
as legal counsel for the Fund.

FINANCIAL STATEMENTS

The Annual Report for the Fund that is attached to this SAI contains the
following audited financial information:

1. Schedule of Investments in Securities.
2. Statement of Operations.
3. Statement of Assets and Liabilities.

4. Statements of Changes in Net Assets.

5. Notes to Financial Statements.
6. Financial Highlights.
7. Report of Independent Accountants.

39
<PAGE>

[Strong logo and picture of man and two children fishing]

prospectus

THE STRONG INDEX 500 FUND

May 1, 2000

1
<PAGE>

2
<PAGE>

TABLE OF CONTENTS
YOUR INVESTMENT.................................................................
KEY INFORMATION.................................................................
What are the fund's goals?.....................................................1
What are the fund's principal investment strategies?...........................2
What are the main risks of investing in the fund?..............................2
What are the fund's fees and expenses?.........................................5
Who is the fund's investment advisor?..........................................6
OTHER IMPORTANT INFORMATION YOU SHOULD KNOW....................................6
Master/Feeder Mutual Fund Structure............................................7
Financial Highlights...........................................................8
Your Account....................................................................
Share Price...................................................................10
Buying Shares.................................................................11
Selling Shares................................................................13
Additional Policies...........................................................16
Distributions.................................................................18
Taxes.........................................................................18
Services For Investors........................................................19
Reserved Rights...............................................................22
For More Information..................................................Back Cover

IN THIS PROSPECTUS, "WE" REFERS TO STRONG CAPITAL MANAGEMENT, INC., THE
SHAREHOLDER SERVICING AGENT AND TRANSFER AGENT FOR THE STRONG INDEX 500 FUND.

2
<PAGE>

YOUR INVESTMENT

KEY INFORMATION

WHAT ARE THE FUND'S GOALS?

The STRONG INDEX 500 FUND seeks to replicate as closely as practicable, before
fees and expenses, the capitalization-weighted total rate of return of that
portion of the U.S. market for publicly traded common stocks composed of the
larger capitalized companies. The fund invests all of its assets in a separate
mutual fund, called the S&P 500 Index Master Portfolio (Master Portfolio) of
the Master Investment Portfolio, that has a substantially similar investment
objective. For simplicity's sake, all discussion of the fund's investment
objectives, strategies, and risks refers also to the Master Portfolio's
objectives, strategies, and risks, unless otherwise indicated.

The fund invests all of its assets in the Master Portfolio. The Master
Portfolio holds each of the stocks that make up the S&P 500 COMPOSITE INDEX*
(S&P 500 INDEX) which is a widely used measure of large U.S.-company stock
performance. It consists of the common stocks of 500 major corporations
selected according to:
- - their size
- - the frequency and ease by which their stocks trade
- - the range and diversity of the American economy

((Side Box))
In a CAPITALIZATION-WEIGHTED TOTAL RATE OF RETURN, each stock contributes to
the index in the same proportion as the value of its shares in the index. Thus,
if the shares of Company A are worth twice as much as the shares of Company B,
A's return will count twice as much as B's in calculating the index's overall
return. This method contrasts with EQUAL WEIGHTED RETURN, by which A's
performance and B's performance and the performance of every other stock in the
index would count the same even though the companies percentage of the index
differ.

*S&P DOES NOT SPONSOR, ENDORSE, SELL, OR PROMOTE THE FUND OR THE MASTER
PORTFOLIO, NOR IS IT AFFILIATED IN ANY WAY WITH BARCLAYS GLOBAL FUND ADVISORS,
THE MASTER PORTFOLIO'S INVESTMENT ADVISOR, THE FUND, OR THE MASTER PORTFOLIO.
"STANDARD & POOR'S(R)," "S&P(R)," AND "S&P 500(R)" ARE TRADEMARKS OF
MCGRAW-HILL, INC, AND HAVE BEEN LICENSED FOR USE BY THE FUND AND THE MASTER
PORTFOLIO. S&P MAKES NO REPRESENTATION OR WARRANTY, EXPRESSED OR IMPLIED,
REGARDING THE ADVISABILITY OF INVESTING IN THE FUND OR THE MASTER PORTFOLIO.

4
<PAGE>

WHAT ARE THE FUND'S PRINCIPAL INVESTMENT STRATEGIES?

The fund invests all of its assets in the Master Portfolio. The Master
Portfolio and the fund pursue their goal by:
- - investing in all of the securities that make up the S&P 500 Index
- - investing in these securities in proportions that match the weightings of
the S&P 500 Index

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?

CALENDAR YEAR TOTAL RETURNS

<TABLE>
<CAPTION>
<S> <C>
Year Index 500
- ---- ---------
1998 28.1%
- ---- ---------
1999 20.4%
- ---- ---------
</TABLE>

BEST AND WORST QUARTERLY PERFORMANCE

(DURING THE PERIODS SHOWN ABOVE)

BEST QUARTER RETURN: 21.2% (4th Q 1998)
WORST QUARTER RETURN: -10.0% (3rd Q 1998)

AVERAGE ANNUAL TOTAL RETURNS

AS OF 12-31-99

FUND/INDEX 1-YEAR SINCE INCEPTION

INDEX 500 FUND 20.37% 26.96% (5-1-97)
S&P 500 Stock Index 21.04% 27.54%
Lipper S&P 500 Index Objective Funds Index 20.61% 27.22%

THE S&P 500 STOCK INDEX IS AN UNMANAGED INDEX GENERALLY REPRESENTATIVE OF THE
U.S. STOCK MARKET. THE LIPPER S&P 500 INDEX OBJECTIVE FUNDS INDEX IS AN
EQUALLY-WEIGHTED PERFORMANCE INDEX OF THE LARGEST QUALIFYING FUNDS IN THIS
LIPPER CATEGORY.

4
<PAGE>

WHAT ARE THE FUND'S FEES AND EXPENSES?

This section describes the fees and expenses that you may pay if you buy and
hold shares of the fund.

SHAREHOLDER FEES
(fees paid directly from your investment)

The fund is 100% no-load, so you pay no sales charges (loads) to buy or sell
shares. Shares of the fund held for less than six months are subject to a
redemption fee of 0.50%. Redemption fees are paid directly to the fund.

ANNUAL FUND OPERATING EXPENSES (AS A PERCENT OF AVERAGE NET ASSETS)*

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
MANAGEMENT SHAREHOLDER OTHER TOTAL ANNUAL FEE WAIVERS NET FUND
FEES SERVICING FEE EXPENSES FUND OPERATING AND/OR EXPENSES
EXPENSES ABSORPTIONS**
- ----------- ------------- -------- ----------------------- ----------------------- -----------------------
0.05% 0.25% 0.39% 0.69% 0.24% 0.45%
</TABLE>

*TOTAL ANNUAL FUND OPERATING EXPENSES, AS WELL AS NET FUND EXPENSES, INCLUDE
THE FUND'S AND THE MASTER PORTFOLIO'S EXPENSES.

**WE HAVE CONTRACTUALLY AGREED TO WAIVE OUR MANAGEMENT FEES AND ABSORB EXPENSES
TO KEEP TOTAL EXPENSES AT OR BELOW 0.45% UNTIL JANUARY 1, 2001.

EXAMPLE: This example is intended to help you compare the cost of investing in
the fund, before any waivers and absorptions, with the cost of investing in
other mutual funds. The example assumes that you invest $10,000 in the fund and
reinvest all dividends and distributions for the time periods indicated, and
then redeem all of your shares at the end of those periods. The example also
assumes that your investment has a 5% return each year and that the fund's
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions, your costs would be:

<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------- ---------- ------- ----------
$70 $221 $384 $859
</TABLE>

WHO IS THE FUND'S INVESTMENT ADVISOR?

The fund does not have its own investment advisor. Instead, the fund invests
all of its assets in a separate mutual fund, called the S&P 500 Index Master
Portfolio (Master Portfolio) of the Master Investment Portfolio. Barclays
Global Fund Advisors (BGFA) serves as investment advisor for the Master
Portfolio.

BGFA provides investment guidance and policy direction in connection with the
management of the Master Portfolio's assets. It makes the day-to-day decisions
on buying and selling securities for the Master Portfolio and conducts the
research leading to those decisions. BGFA is located at 45 Fremont Street, San
Francisco, California 94105. It is a wholly owned subsidiary of Barclays Global
Investors, N.A., which in turn is an indirect subsidiary of Barclays Bank PLC.
Barclays Global Investors is the

5
<PAGE>

world's largest manager of institutional investment assets. As of November 30,
1999, Barclays Global Investors and its affiliates, including BGFA, provided
investment advisory services for assets worth $738 billion. Barclays Global
Investors, BGFA, Barclays Bank and their affiliates deal, trade, and invest for
their own accounts in the types of securities in which the Master Portfolio may
also invest.

Unlike many traditional active investment funds, there is no single portfolio
manager who makes investment decisions for the Master Portfolio. Instead, the
Master Portfolio tracks the S&P 500 Index. The process reflects BGFA's
commitment to an objective and consistent investment management structure.

OTHER IMPORTANT INFORMATION YOU SHOULD KNOW

The fund seeks to achieve its investment objective by investing all of its
assets in the Master Portfolio. The Master Portfolio seeks to come within 95%
of S&P 500 Index's total return, before fees and expenses, in falling as well
as rising markets. It does not seek to "beat" the markets it tracks. BGFA, the
Master Portfolio's investment advisor, makes no attempt to apply economic,
financial, or market analysis when managing the portfolio. It selects
securities because they will help the Master Portfolio achieve returns
corresponding to index returns. Including a security among the Master
Portfolio's holdings implies no opinion as to its attractiveness as an
investment.

INVESTING IN INDEXES
Investors look to indexes as the standard of performance, but they cannot own
them. Indexes are model portfolios, groups of stocks or bonds selected to
represent not actual securities but an entire market. One way an index fund can
seek to match an index's performance, before fees and expenses, is through
buying all the index's securities in the same proportion as they are reflected
in the index. This is what the Master Portfolio does with regard to the S&P 500
Index.

INVESTING IN FUTURES AND OPTIONS
The Master Portfolio may invest in index futures contracts and options on
futures contracts to remain fully invested while keeping cash on hand, either
in anticipation of shareholder redemptions or because it has not yet invested
new shareholder money.

MASTER/FEEDER MUTUAL FUND STRUCTURE
The fund does not have its own investment advisor. Instead, the fund invests
all of its assets in a separate mutual fund, called the S&P 500 Index Master
Portfolio of the Master Investment Portfolio, that has a substantially similar
investment objective as the fund. BGFA serves as investment advisor for the
Master Portfolio. The Master Portfolio may accept investments from other feeder
funds.

FEEDER FUND EXPENSES

The feeders bear the Master Portfolio's expenses in proportion to the amount of
assets each invests in the Master Portfolio. Each feeder can set its own
transaction minimums, fund-specific expenses, and conditions.

FEEDER FUND RIGHTS
Under the master/feeder structure, the fund's Board of Directors retains the
right to withdraw the fund's assets from the Master Portfolio if it believes
doing so is in shareholders' best interests. If the Directors withdraw the
fund's assets, they would then consider whether the fund should hire its own
investment adviser, invest in another master portfolio, or take other action.

FINANCIAL HIGHLIGHTS

7
<PAGE>

This information describes investment performance for the periods shown.
Certain information reflects financial results for a single fund share. "Total
Return" shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been audited by KPMG LLP, whose report,
along with the fund's financial statements, is included in the fund's annual
report.

STRONG INDEX 500 FUND
Dec. 31, Feb. 28, Feb. 28,
SELECTED PER-SHARE DATA(a) 1999(b) 1999 1998(c)
Net Asset Value, Beginning of Period $15.56 $13.16 $10.00
Income From Investment Operations:
Net Investment Income 0.15 0.13 0.11
Net Realized and Unrealized Gains
on Investments 2.89 2.39 3.15
Total from Investment Operations 3.04 2.52 3.26
Less Distributions:
From Net Investment Income (0.15) (0.12) (0.09)
From Net Realized Gains (0.38) (0.00)(d) (0.01)
Total Distributions (0.53) (0.12) (0.10)
Net Asset Value, End of Period $18.07 $15.56 $13.16
RATIOS AND SUPPLEMENTAL DATA
Total Return +19.5% +19.2% +32.7%
Net Assets, End of Period (In Thousands) $185,859 $139,123 $32,096
Ratio of Expenses to Average Net Assets
Without Waivers and Absorptions 0.69%* 0.73% 1.53%*
Ratio of Expenses to Average Net Assets 0.45%* 0.45% 0.44%*
Ratio of Net Investment Income to
Average Net Assets 1.04%* 1.18% 1.43%*
Portfolio Turnover Rate (e) 7% 11% 6%

* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the
fund outstanding for the entire period.
(b) In 1999, the Fund changed its fiscal year-end from February to
December.
(c) For the period from May 1, 1997 (inception) to February 28, 1998.
(d) Amount calculated is less than $0.01.
(e) This rate represents the portfolio turnover rate of the S&P 500
Index Master Portfolio.

1
<PAGE>

YOUR ACCOUNT

SHARE PRICE

Your transaction price for buying, selling, or exchanging shares is the next
net asset value per share (NAV) calculated after we accept your order. We
calculate the NAV of the fund based on the value of the NAV of the Master
Portfolio's shares. Both are calculated on the same day.

((Side Box))

<TABLE>
<CAPTION>
<S> <C>
We determine the fund's share price or NAV by dividing net
assets (the value of its investments, cash, and other assets minus
the liabilities) by the number of shares outstanding.
- -------------------------------------------------------------------
</TABLE>

The Master Portfolio calculates its share-price in accordance with the standard
formula for valuing mutual fund shares at the close of regular trading
(normally 3 p.m. Central time) every day the New York Stock Exchange is open.
The formula calls for deducting all of the Master Portfolio's liabilities from
the total value of its assets-the market value of the securities it holds, plus
cash reserves-and dividing the result by the number of shares outstanding. Most
of the securities in the Master Portfolio are valued at their current market
prices. If such prices are not readily available, the securities' fair value is
estimated in accordance with guidelines approved by the Master Portfolio's
Board of Trustees. Bonds and notes with remaining maturities of 60 days or less
are valued according to the amortized cost method.

BUYING SHARES

INVESTMENT MINIMUMS: When buying shares, you must meet the following investment
minimum requirements.

<TABLE>
<CAPTION>
<S> <C> <C>
INITIAL INVESTMENT MINIMUM ADDITIONAL INVESTMENT MINIMUM
- ---------------------------------------------- ------------------------------------- -------------------------------------
Regular accounts $2,500 $50
- ---------------------------------------------- ------------------------------------- -------------------------------------
Education IRA accounts $500 $50
- ---------------------------------------------- ------------------------------------- -------------------------------------
Other IRAs and UGMA/UTMA accounts $250 $50
- ---------------------------------------------- ------------------------------------- -------------------------------------
SIMPLE IRA, SEP-IRA, 403(b)(7), Keogh, the lesser of $250 or $25 per month $50
Pension Plan, and Profit Sharing Plan accounts
- ---------------------------------------------- ------------------------------------- -------------------------------------
</TABLE>

8
<PAGE>

BUYING INSTRUCTIONS
You can buy shares in several ways.

MAIL

EXCHANGE OPTION

((Side Box))
QUESTIONS?
Call 800-368-3863
24 hours a day
7 days a week

EXPRESS PURCHASESM

STRONG DIRECT(R)

You can use Strong Direct(R) to add to your investment from your bank account
or to exchange shares between Strong Funds by calling 800-368-7550. See
"Services for Investors" for more information.

STRONG NETDIRECT(R)

You can use Strong netDirect(R) at WWW.ESTRONG.COM, to add to your
investment from your bank account or to exchange shares between Strong Funds.
See "Services for Investors" for more information.

INVESTOR CENTERS

You can visit our Investor Center in Menomonee Falls, Wisconsin, near
Milwaukee. Call 800-368-3863 for hours and directions, or for the location of
our other Investor Centers.

WIRE

Call 800-368-3863 for instructions before wiring funds either to open or add
to an account. This helps to ensure that your account will be credited
promptly and correctly.

AUTOMATIC INVESTMENT SERVICES

BROKER-DEALER

You may purchase shares through a broker-dealer or other intermediary who may
charge you a fee. Broker-dealers, including the fund's distributor, and other
intermediaries may also from time to time sponsor or participate in
promotional programs pursuant to which investors receive incentives for
establishing with the broker-dealer or intermediary an account and/or for
purchasing shares of the Strong Funds through the account(s). Investors
should contact the broker-dealer or intermediary and consult the Statement of
Additional Information for more information about promotional programs.

8
<PAGE>

PLEASE REMEMBER . . .

- - We only accept checks payable to Strong.

- - We do not accept cash, third-party checks, credit card convenience checks, or
checks drawn on banks outside the U.S.

- - You will be charged $20 for every check, wire, or Electronic Funds Transfer
returned unpaid.

SELLING SHARES

SELLING INSTRUCTIONS
You can sell shares in several ways.

REDEMPTION OPTION

(1) We can mail a check to your account's address. Checks will not be
forwarded by the Postal Service, so please notify us if your address has
changed.

STRONG DIRECT(R)

You can redeem shares through Strong Direct(R) at 800-368-7550. See "Services
for Investors" for more information.

STRONG NETDIRECT(R)

You can use Strong netDirect(R) at WWW.ESTRONG.COM, to redeem shares. See
"Services for Investors" for more information.

INVESTOR CENTERS

You can visit our Investor Center in Menomonee Falls, Wisconsin, near
Milwaukee. Call 800-368-3863 for hours and directions, or for the location of
our other Investor Centers.

AUTOMATIC INVESTMENT SERVICES

10
<PAGE>

BROKER-DEALER
You may sell shares through a broker-dealer or other intermediary who may
charge you a fee.

PLEASE REMEMBER ...

- - If you recently purchased shares, a redemption request on those shares
generally will not be honored until 10 days after we receive the purchase
check or electronic transaction.

- - Some transactions and requests require a signature guarantee.

- - With an IRA (or other retirement account), you will be charged (1) a $10
annual account maintenance fee for each account up to a maximum of $30, (2)
a $10 account liquidation fee, and (3) a $50 fee for transferring assets to
another custodian or for closing an account.

((Side Box))

((Side Box))
<TABLE>
<CAPTION>
<S> <C>
SIGNATURE GUARANTEES help ensure that major
transactions or changes to your account are in fact
authorized by you. For example, we require a signature
guarantee on written redemption requests for more than
$50,000. You can obtain a signature guarantee for a
nominal fee from most banks, brokerage firms, and
other financial institutions. A notary public stamp or
seal cannot be substituted for a signature guarantee.
- --------------------------------------------------------
</TABLE>

ADDITIONAL POLICIES

TELEPHONE AND INTERNET TRANSACTIONS

11
<PAGE>

INVESTING THROUGH A THIRD PARTY

EARLY REDEMPTION FEE

The fund can experience substantial price fluctuations and is intended for
long-term investors. Short-term "market timers" (those who engage in frequent
purchases and redemptions) can disrupt a mutual fund's investment program and
create additional transaction costs that are borne by all shareholders. For
these reasons, the fund assesses a 0.50% fee on redemptions (including
exchanges) of fund shares held for less than six months. Redemption fees will
be paid to the fund. The fund will use the "first-in, first-out" (FIFO)
method to determine the six-month holding period.

PURCHASES IN KIND

LOW BALANCE ACCOUNT FEE

VERIFICATION OF ACCOUNT STATEMENTS

DISTRIBUTIONS

DISTRIBUTION POLICY
The fund generally pays you dividends from net investment income and
distributes any net capital gains that it realizes annually.

REINVESTMENT OF DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS

TAXES

((Side Box))
<TABLE>
<CAPTION>
<S> <C>
Generally, if your investment is in a Traditional IRA or
other TAX-DEFERRED ACCOUNT, your dividends and
distributions will not be taxed at the time they are paid,
but instead at the time you withdraw them from your account.
- ------------------------------------------------------------------
</TABLE>

YEAR-END STATEMENT
To assist you in tax preparation, after the end of each calendar year, we send
you a statement of your fund's ordinary dividends and net capital gain
distributions (Form 1099).

((Side Box))

Unless your investment is in a tax-deferred retirement
account such as an IRA, YOU MAY WANT TO AVOID:
- -Investing a large amount in a fund close to the end of
the calendar year. If the fund makes a capital gain
distribution, you may receive some of your
investment back as a taxable distribution.
- -Selling shares of a mutual fund at a loss and then
investing in the same fund within 30 days before or
after the sale. This is called a wash sale and you will
not be allowed to claim a tax loss on the transaction.
- ---------------------------------------------------------
</TABLE>

((Side Box))
<TABLE>
<CAPTION>
<S> <C>
COST BASIS is the amount that you paid for the shares.
When you sell shares, you subtract the cost basis from the
sale proceeds to determine whether you realized an
investment gain or loss. For example, if you bought a
share of a fund at $10 and you sold it two years later at
$11, your cost basis on the share is $10 and your gain is
$1.
- ----------------------------------------------------------
</TABLE>

Because everyone's tax situation is unique, you should consult your tax
professional for assistance.

SERVICES FOR INVESTORS

Strong provides you with a variety of services to help you manage your
investment. For more details, call 800-368-3863, 24 hours a day, 7 days a
week. These services include:

13
<PAGE>

STRONG DIRECT (R) AUTOMATED TELEPHONE SYSTEM

ESTRONG.COM

STRONG NETDIRECT(R)

STRONGMAIL

STRONG EXCHANGE OPTION

You may exchange shares of a fund for shares of another Strong Fund, either in
writing, by telephone, or through your personal computer, if the accounts are
identically registered (with the same name, address, and taxpayer
identification number). Please ask us for the appropriate prospectus and read
it before investing in any of the Strong Funds. Remember, an exchange of
shares of one Strong Fund for those of another Strong Fund is considered a
sale and a purchase of shares for tax purposes and may result in a capital
gain or loss. Some Strong Funds that you may want to exchange into may charge
a redemption fee of 0.50% to 1.00% on the sale of shares held for less than
six months. The fund charges an early redemption fee of 0.50%. Purchases by
exchange are subject to the investment requirements and other criteria of the
fund purchased.

STRONG AUTOMATIC INVESTMENT SERVICES
You may invest or redeem automatically in the following ways, some of which
may be subject to additional restrictions or conditions.

AUTOMATIC INVESTMENT PLAN (AIP)
This plan allows you to make regular, automatic investments from your bank
checking or savings account.

AUTOMATIC EXCHANGE PLAN
This plan allows you to make regular, automatic exchanges from one eligible
Strong Fund to another.

AUTOMATIC DIVIDEND REINVESTMENT

PAYROLL DIRECT DEPOSIT PLAN

14
<PAGE>

This plan allows you to send all or a portion of your paycheck, social
security check, military allotment, or annuity payment to the Strong Funds of
your choice.

STRONG RETIREMENT PLAN SERVICES
We offer a wide variety of retirement plans for individuals and institutions,
including large and small businesses. For information on:

- - INDIVIDUAL RETIREMENT PLANS, including Traditional IRAs and Roth IRAs, call
800-368-3863.

- - QUALIFIED RETIREMENT PLANS, including SIMPLE IRAs, SEP-IRAs, 403(b)(7)s,
Keoghs, Pension Plans, Profit Sharing Plans, and 401(k) Plans, call
800-368-2882.

SOME OF THESE SERVICES MAY BE SUBJECT TO ADDITIONAL RESTRICTIONS OR
CONDITIONS. CALL 800-368-3863 FOR MORE INFORMATION.

15
<PAGE>

RESERVED RIGHTS

We reserve the right to:

- - Refuse, change, discontinue, or temporarily suspend account services,
including purchase, exchange, or telephone and Strong netDirect(R) redemption
privileges, for any reason.

- - Change the minimum or maximum investment amounts.

- - Delay sending out redemption proceeds for up to seven days (this generally
only applies to very large redemptions without notice, excessive trading, or
during unusual market conditions).

- - Reject any purchase or redemption request that does not contain all required
documentation.

16
<PAGE>

FOR MORE INFORMATION

More information is available upon request at no charge, including:

To request information or to ask questions:

BY TELEPHONE FOR HEARING-IMPAIRED (TDD)

414-359-1400 or 800-368-3863 800-999-2780

BY MAIL BY OVERNIGHT DELIVERY
Strong Funds Strong Funds
P.O. Box 2936 900 Heritage Reserve

Milwaukee, WI 53201-2936 Menomonee Falls, WI 53051

ON THE INTERNET BY E-MAIL

View on-line or download documents: [email protected]
Strong Funds: WWW.ESTRONG.COM

SEC*: www.sec.gov

This prospectus is not an offer to sell securities in places other than the
United States and its territories.

Strong Index 500 Fund, a series of Strong Equity Funds, Inc., SEC file number:
811-8100

17
<PAGE>

STATEMENT OF ADDITIONAL INFORMATION ("SAI")

STRONG INDEX 500 FUND, A SERIES FUND OF STRONG EQUITY FUNDS, INC.

P.O. Box 2936

Milwaukee, WI 53201

Telephone: (414) 359-1400
Toll-Free: (800) 368-3863

e-mail: [email protected]

Web Site: www.eStrong.com

THE FUND SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING SUBSTANTIALLY
ALL OF ITS ASSETS IN THE S&P 500 INDEX MASTER PORTFOLIO (THE "MASTER
PORTFOLIO"), WHICH IS A SERIES OF MASTER INVESTMENT PORTFOLIO ("MIP"), AN
OPEN-END, MANAGEMENT INVESTMENT COMPANY.

The Master Portfolio has substantially the same investment objective as the
Fund. The Fund may withdraw its investment in the Master Portfolio at any
time, if the Board of Directors of the Fund determines that such action is in
the best interests of the Fund and its shareholders. Upon such withdrawal, the
Fund's Board of Directors would consider alternative investments, including
investing all of the Fund's assets in another investment company with the same
investment objective as the Fund or hiring an investment adviser to manage the
Fund's assets in accordance with the investment policies and restrictions
described in the Fund's Prospectus and this SAI.

May 1, 2000

Neither the Fund nor the Master Portfolio is sponsored, endorsed, sold or
promoted by Standard & Poor's ("S&P"). S&P makes no representation or warranty,
express or implied, to the Fund, the Master Portfolio or any member of the
public regarding the advisability of investing in securities generally or in
the Fund particularly or the ability of the S&P 500 Index to track general
stock market performance. S&P's only relationship to the Fund is the licensing
of certain trademarks and trade names of S&P and of the S&P 500 Index which is
determined, composed and calculated by S&P without regard to the Fund. S&P has
no obligation to take the needs of the Fund into consideration in determining,
composing or calculating the S&P 500 Index. S&P is not responsible for and has
not participated in the determination of the prices and amount of the Fund's
shares or the timing of the issuance or sale of the Fund's shares or in the
determination or calculation of the equation by which the Fund's shares are to
be converted into cash. S&P has no obligation or liability in connection with
the administration, marketing or trading of the Fund's shares.

S&P does not guarantee the accuracy and/or the completeness of the S&P 500
Index or any data included therein and S&P shall have no liability for any
errors, omissions, or interruptions therein. S&P makes no warranty, express or
implied, as to results to be obtained by the Fund, or any other person or
entity from the use of the S&P 500 Index or any data included therein. S&P
makes no express or implied warranties, and expressly disclaims all warranties
of merchantability or fitness for a particular purpose or use with respect to
the S&P 500 Index or any data included therein. Without limiting any of the
foregoing, in no event shall S&P have any liability for any special, punitive,
indirect, or consequential damages (including lost profits), even if notified
of the possibility of such damages.

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TABLE OF CONTENTS PAGE

INVESTMENT RESTRICTIONS........................................................3
INVESTMENT POLICIES AND TECHNIQUES.............................................7
Strong Index 500 Fund..........................................................7
Repurchase Agreements..........................................................7
Floating- and Variable-Rate Obligations........................................7
U.S. Government Obligations....................................................8
Unrated, Downgraded and Below Investment Grade Investments.....................8
Letters of Credit..............................................................9
Loans of Portfolio Securities..................................................9
Futures Contracts and Options Transactions.....................................9
Stock Index Futures and Options on Stock Index Futures........................11
Investment Company Securities.................................................11
Illiquid Securities...........................................................11
Short-Term Instruments and Temporary Investments..............................11
Bank Obligations..............................................................11
Commercial Paper and Short-Term Corporate Debt Instruments....................12
Forward Commitments, When-Issued Purchases and Delayed- Delivery Transaction..12
Borrowing Money...............................................................12
Investment in Warrants........................................................12
RISK CONSIDERATIONS...........................................................12
MASTER/FEEDER STRUCTURE.......................................................14
DIRECTORS AND OFFICERS........................................................14
PRINCIPAL SHAREHOLDERS........................................................16
INVESTMENT ADVISOR............................................................17
ADMINISTRATOR AND PLACEMENT AGENT OF THE MASTER PORTFOLIO.....................17
DISTRIBUTOR...................................................................18
PORTFOLIO TRANSACTIONS AND BROKERAGE..........................................18
CUSTODIAN AND FUND ACCOUNTING SERVICES AGENT..................................19
FUND TRANSFER AGENT AND DIVIDEND DISBURSING AGENT.............................20
MASTER PORTFOLIO TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT.................21
FUND SHAREHOLDER SERVICING AGENT..............................................21
TAXES.........................................................................22
DETERMINATION OF NET ASSET VALUE..............................................23
ADDITIONAL SHAREHOLDER INFORMATION............................................23
ORGANIZATION..................................................................25
SHAREHOLDER MEETINGS..........................................................26
MASTER PORTFOLIO ORGANIZATION.................................................26
PERFORMANCE INFORMATION.......................................................26
GENERAL INFORMATION...........................................................32
INDEPENDENT ACCOUNTANTS.......................................................34
LEGAL COUNSEL.................................................................35
FINANCIAL STATEMENTS..........................................................35

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INVESTMENT RESTRICTIONS

FUNDAMENTAL INVESTMENT LIMITATIONS

Unless indicated otherwise below, the Fund:

3. May not issue senior securities, except as permitted under the 1940 Act.

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NON-FUNDAMENTAL OPERATING POLICIES

The following are the Fund's non-fundamental operating policies which may be
changed by the Fund's Board of Directors without shareholder approval.

Unless indicated otherwise below, the Fund may not:

4. Purchase securities of other investment companies except in compliance
with the 1940 Act and applicable state law.

5. Invest all of its assets in the securities of a single open-end
investment management company with substantially the same fundamental
investment objective, restrictions and policies as the Fund.

7. Borrow money except (1) from banks or (2) through reverse repurchase
agreements or mortgage dollar rolls, and will not purchase securities when bank
borrowings exceed 5% of its total assets.

8. Make any loans other than loans of portfolio securities, except through
(1) purchases of debt securities or other debt instruments, or (2) engaging in
repurchase agreements.

Non-Fundamental Policy No. 5 does not apply because the Fund seeks to achieve
its investment objective by investing substantially all of its assets in the
Master Portfolio of MIP.

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FUNDAMENTAL OPERATING POLICIES OF THE MASTER PORTFOLIO

The Master Portfolio is subject to the following fundamental investment
limitations which cannot be changed without approval by the holders of a
majority (as defined in the 1940 Act) of the Master Portfolio's outstanding
voting securities. To obtain approval, a majority of the Master Portfolio's
outstanding voting securities means the vote of the lesser of: (1) 67% or more
of the voting securities present, if more than 50% of the outstanding voting
securities are present or represented, or (2) more than 50% of the outstanding
voting shares.

The Master Portfolio may not:

1. invest more than 5% of its assets in the obligations of any single
issuer, except that up to 25% of the value of its total assets may be invested,
and securities issued or guaranteed by the U.S. government, or its agencies or
instrumentalities may be purchased, without regard to any such limitation.

2. hold more than 10% of the outstanding voting securities of any single
issuer. This investment restriction applies only with respect to 75% of its
total assets.

3. invest in commodities, except that the Master Portfolio may purchase and
sell (I.E., write) options, forward contracts, futures contracts, including
those relating to indexes, and options on futures contracts or indexes.

4. purchase, hold or deal in real estate, or oil, gas or other mineral
leases or exploration or development programs, but the Master Portfolio may
purchase and sell securities that are secured by real estate or issued by
companies that invest or deal in real estate.

5. borrow money, except to the extent permitted under the 1940 Act,
provided that the Master Portfolio may borrow up to 20% of the current value of
its net assets for temporary purposes only in order to meet redemptions, and
these borrowings may be secured by the pledge of up to 20% of the current value
of its net assets (but investments may not be purchased while any such
outstanding borrowing in excess of 5% of its net assets exists). For purposes
of this investment restriction, the Master Portfolio's entry into options,
forward contracts, futures contracts, including those relating to indexes, and
options on futures contracts or indexes shall not constitute borrowing to the
extent certain segregated accounts are established and maintained by the Master
Portfolio.

6. make loans to others, except through the purchase of debt obligations
and the entry into repurchase agreements. However, the Master Portfolio may
lend its portfolio securities in an amount not to exceed one-third of the value
of its total assets. Any loans of portfolio securities will be made according
to guidelines established by the SEC and the Master Portfolio's Board of
Trustees.

7. act as an underwriter of securities of other issuers, except to the
extent that the Master Portfolio may be deemed an underwriter under the
Securities Act of 1933, as amended, by virtue of disposing of portfolio
securities.

8. invest 25% or more of its total assets in the securities of issuers in
any particular industry or group of closely related industries except that, in
the case of the Master Portfolio, there shall be no limitation with respect to
investments in (i) obligations of the U.S. government, its agencies or
instrumentalities; or (ii) any industry in which the S&P 500 Index becomes
concentrated to the same degree during the same period, the Master Portfolio
will be concentrated as specified above only to the extent the percentage of
its assets invested in those categories of investments is sufficiently large
that 25% or more of its total assets would be invested in a single industry.

9. issue any senior security (as such term is defined in Section 18(f) of
the 1940 Act), except to the extent the activities permitted in the Master
Portfolio's fundamental policies (3) and (5) may be deemed to give rise to a
senior security.

10. purchase securities on margin, but the Master Portfolio may make margin
deposits in connection with transactions in options, forward contracts, futures
contracts, including those related to indexes, and options on futures contracts
or indexes.

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NON-FUNDAMENTAL OPERATING POLICIES OF THE MASTER PORTFOLIO

The Master Portfolio is subject to the following non-fundamental operating
policies which may be changed by the Board of Trustees of the Master Portfolio
without the approval of the holders of the Master Portfolio's outstanding
securities.

The Master Portfolio may:

1. invest in shares of other open-end management investment companies,
subject to the limitations of Section 12(d)(1) of the 1940 Act. Under the 1940
Act, the Master Portfolio's investment in such securities currently is limited,
subject to certain exceptions, to (i) 3% of the total voting stock of any one
investment company, (ii) 5% of the Master Portfolio's net assets with respect
to any one investment company, and (iii) 10% of the Master Portfolio's net
assets in the aggregate. Other investment companies in which the Master
Portfolio invests can be expected to charge fees for operating expenses, such
as investment advisory and administration fees, that would be in addition to
those charged by the Master Portfolio.

2. not invest more than 15% of its net assets in illiquid securities. For
this purpose, illiquid securities include, among others, (i) securities that
are illiquid by virtue of the absence of a readily available market or legal or
contractual restrictions on resale, (ii) fixed time deposits that are subject
to withdrawal penalties and that have maturities of more than seven days, and
(iii) repurchase agreements not terminable within seven days.

3. lend securities from its portfolio to brokers, dealers and financial
institutions, in amounts not to exceed (in the aggregate) one-third of the
Master Portfolio's total assets. Any such loans of portfolio securities will
be fully collateralized based on values that are marked to market daily. The
Master Portfolio will not enter into any portfolio security lending arrangement
having a duration of longer than one year.

If a percentage restriction is adhered to at the time of investment, a later
change in percentage resulting from a change in values or assets will not
constitute a violation of such restriction.

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INVESTMENT POLICIES AND TECHNIQUES

The following information supplements the discussion of the Fund's investment
objective, policies, and techniques described in the Prospectus.

STRONG INDEX 500 FUND

- - Under normal market conditions, at least 90% of the value of the Master
Portfolio's total assets is invested in securities comprising the S&P 500
Index. The Master Portfolio has also represented that it attempts to
achieve, in both rising and falling markets, a correlation of at least 95%
between the total return of its net assets, before expenses, and the total
return of the S&P 500 Index. Notwithstanding the factors described below,
perfect (100%) correlation would be achieved if the total return of the
Master Portfolio's net assets increased or decreased exactly as the total
return of the S&P 500 Index increased or decreased.
- - The Master Portfolio may invest up to 10% of its total assets in high-quality
money market instruments to provide liquidity.

REPURCHASE AGREEMENTS

The Master Portfolio may engage in a repurchase agreement with respect to any
security in which it is authorized to invest, although the underlying security
may mature in more than thirteen months. The Master Portfolio may enter into
repurchase agreements wherein the seller of a security to the Master Portfolio
agrees to repurchase that security from the Master Portfolio at a mutually
agreed-upon time and price that involves the acquisition by the Master
Portfolio of an underlying debt instrument, subject to the seller's obligation
to repurchase, and the Master Portfolio's obligation to resell, the instrument
at a fixed price usually not more than one week after its purchase. The period
of maturity is usually quite short, often overnight or a few days, although it
may extend over a number of months. The Master Portfolio may enter into
repurchase agreements only with respect to securities that could otherwise be
purchased by the Master Portfolio, and all repurchase transactions must be
collateralized. The Master Portfolio may participate in pooled repurchase
agreement transactions with other funds advised by Barclays Global Fund
Advisors ( "BGFA").

The Master Portfolio's custodian has custody of, and holds in a segregated
account, securities acquired as collateral by the Master Portfolio under a
repurchase agreement. The Master Portfolio may enter into repurchase
agreements only with respect to securities of the type in which it may invest,
including government securities and mortgage-related securities, regardless of
their remaining maturities, and requires that additional securities be
deposited with the custodian if the value of the securities purchased should
decrease below resale price. BGFA monitors on an ongoing basis the value of
the collateral to assure that it always equals or exceeds the repurchase price.
Certain costs may be incurred by the Master Portfolio in connection with the
sale of the underlying securities if the seller does not repurchase them in
accordance with the repurchase agreement. In addition, if bankruptcy
proceedings are commenced with respect to the seller of the securities,
disposition of the securities by the Master Portfolio may be delayed or
limited. While it does not presently appear possible to eliminate all risks
from these transactions (particularly the possibility of a decline in the
market value of the underlying securities, as well as delay and costs to the
Master Portfolio in connection with insolvency proceedings), it is the policy
of the Master Portfolio to limit repurchase agreements to selected creditworthy
securities dealers or domestic banks or other recognized financial
institutions. The Master Portfolio considers on an ongoing basis the
creditworthiness of the institutions with which it enters into repurchase
agreements. Repurchase agreements are considered to be loans by the Master
Portfolio under the 1940 Act.

FLOATING- AND VARIABLE-RATE OBLIGATIONS

The Master Portfolio may purchase debt instruments with interest rates that are
periodically adjusted at specified intervals or whenever a benchmark rate or
index changes. The floating- and variable-rate instruments that the Master
Portfolio may purchase include certificates of participation in such
instruments. These adjustments generally limit the increase or decrease in the
amount of interest received on the debt instruments. Floating- and
variable-rate instruments are subject to interest-rate risk and credit risk.

The Master Portfolio may purchase floating- and variable-rate demand notes and
bonds, which are obligations ordinarily having stated maturities in excess of
thirteen months, but which permit the holder to demand payment of principal at
any time, or at specified intervals not exceeding thirteen months. Variable
rate demand notes include master demand notes that are obligations that permit
the Master Portfolio to invest fluctuating amounts, which may change daily
without penalty, pursuant to direct

7
<PAGE>

arrangements between the Master Portfolio, as lender, and the borrower. The
interest rates on these notes fluctuate from time to time. The issuer of such
obligations ordinarily has a corresponding right, after a given period, to
prepay in its discretion the outstanding principal amount of the obligations
plus accrued interest upon a specified number of days' notice to the holders of
such obligations. The interest rate on a floating-rate demand obligation is
based on a known lending rate, such as a bank's prime rate, and is adjusted
automatically each time such rate is adjusted. The interest rate on a
variable-rate demand obligation is adjusted automatically at specified
intervals. Frequently, such obligations are secured by letters of credit or
other credit support arrangements provided by banks. Because these obligations
are direct lending arrangements between the lender and borrower, it is not
contemplated that such instruments generally will be traded, and there
generally is no established secondary market for these obligations, although
they are redeemable at face value. Accordingly, where these obligations are
not secured by letters of credit or other credit support arrangements, the
Master Portfolio's right to redeem is dependent on the ability of the borrower
to pay principal and interest on demand. Such obligations frequently are not
rated by credit rating agencies and the Master Portfolio may invest in
obligations which are not so rated only if BGFA determines that at the time of
investment the obligations are of comparable quality to the other obligations
in which the Master Portfolio may invest. BGFA, on behalf of the Master
Portfolio , considers on an ongoing basis the creditworthiness of the issuers
of the floating- and variable-rate demand obligations in the Master Portfolio's
portfolio. The Master Portfolio will not invest more than 10% of the value of
its total net assets in floating- or variable-rate demand obligations whose
demand feature is not exercisable within seven days. Such obligations may be
treated as liquid, provided that an active secondary market exists.

U.S. GOVERNMENT OBLIGATIONS

The Master Portfolio may invest in various types of U.S. Government
obligations. U.S. Government obligations include securities issued or
guaranteed as to principal and interest by the U.S. Government, its agencies or
instrumentalities. Payment of principal and interest on U.S. Government
obligations (i) may be backed by the full faith and credit of the United States
(as with U.S. Treasury obligations and GNMA certificates) or (ii) may be backed
solely by the issuing or guaranteeing agency or instrumentality itself (as with
FNMA notes). In the latter case, the investor must look principally to the
agency or instrumentality issuing or guaranteeing the obligation for ultimate
repayment, which agency or instrumentality may be privately owned. There can be
no assurance that the U.S. Government would provide financial support to its
agencies or instrumentalities where it is not obligated to do so. As a general
matter, the value of debt instruments, including U.S. Government obligations,
declines when market interest rates increase and rises when market interest
rates decrease. Certain types of U.S. Government obligations are subject to
fluctuations in yield or value due to their structure or contract terms.

UNRATED, DOWNGRADED AND BELOW INVESTMENT GRADE INVESTMENTS

The Master Portfolio may purchase instruments that are not rated if, in the
opinion of the adviser, BGFA, such obligation is of investment quality
comparable to other rated investments that are permitted to be purchased by the
Master Portfolio. After purchase by the Master Portfolio, a security may cease
to be rated or its rating may be reduced below the minimum required for
purchase by the Master Portfolio. Neither event will require a sale of such
security by the Master Portfolio provided that the amount of such securities
held by the Master Portfolio does not exceed 5% of the Fund's net assets. To
the extent the ratings given by Moody's or S&P may change as a result of
changes in such organizations or their rating systems, the Master Portfolio
will attempt to use comparable ratings as standards for investments in
accordance with the investment policies contained in its Prospectus and in this
SAI.

The Master Portfolio is not required to sell downgraded securities, and the
Master Portfolio could hold up to 5% of its net assets in debt securities rated
below "Baa" by Moody's or below "BBB" by S&P or if unrated, low quality (below
investment grade) securities.

Although they may offer higher yields than do higher rated securities, low
rated and unrated low quality debt securities generally involve greater
volatility of price and risk of principal and income, including the possibility
of default by, or bankruptcy of, the issuers of the securities. In addition,
the markets in which low rated and unrated low quality debt are traded are more
limited than those in which higher rated securities are traded. The existence
of limited markets for particular securities may diminish the Master
Portfolio's ability to sell the securities at fair value either to meet
redemption requests or to respond to changes in the economy or in the financial
markets and could adversely affect and cause fluctuations in the daily net
asset value of the Master Portfolio's shares.

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<PAGE>

Adverse publicity and investor perceptions, whether or not based on fundamental
analysis, may decrease the values and liquidity of low rated or unrated low
quality debt securities, especially in a thinly traded market. Analysis of the
creditworthiness of issuers of low rated or unrated low quality debt securities
may be more complex than for issuers of higher rated securities, and the
ability of the Master Portfolio to achieve its investment objective may, to the
extent it holds low rated or unrated low quality debt securities, be more
dependent upon such creditworthiness analysis than would be the case if the
Master Portfolio held exclusively higher rated or higher quality securities.

Low rated or unrated low quality debt securities may be more susceptible to
real or perceived adverse economic and competitive industry conditions than
investment grade securities. The prices of such debt securities have been found
to be less sensitive to interest rate changes than higher rated or higher
quality investments, but more sensitive to adverse economic downturns or
individual corporate developments. A projection of an economic downturn or of a
period of rising interest rates, for example, could cause a decline in low
rated or unrated low quality debt securities prices because the advent of a
recession could dramatically lessen the ability of a highly leveraged company
to make principal and interest payments on its debt securities. If the issuer
of the debt securities defaults, the Master Portfolio may incur additional
expenses to seek recovery.

LETTERS OF CREDIT

Certain of the debt obligations (including municipal securities, certificates
of participation, commercial paper and other short-term obligations) which the
Master Portfolio may purchase may be backed by an unconditional and irrevocable
letter of credit of a bank, savings and loan association or insurance company
which assumes the obligation for payment of principal and interest in the event
of default by the issuer. Only banks, savings and loan associations and
insurance companies which, in the opinion of BGFA, as investment adviser, are
of comparable quality to issuers of other permitted investments of the Master
Portfolio may be used for letter of credit-backed investments.

LOANS OF PORTFOLIO SECURITIES

The Master Portfolio may lend securities from their portfolios to brokers,
dealers and financial institutions (but not individuals) if cash, U.S.
Government securities or other high-quality debt obligations equal to at least
100% of the current market value of the securities loan (including accrued
interest thereon) plus the interest payable to the Master Portfolio with
respect to the loan is maintained with the Master Portfolio. In determining
whether to lend a security to a particular broker, dealer or financial
institution, the Master Portfolio's investment adviser will consider all
relevant facts and circumstances, including the size, creditworthiness and
reputation of the broker, dealer, or financial institution. Any loans of
portfolio securities will be fully collateralized based on values that are
marked to market daily. The Master Portfolio will not enter into any portfolio
security lending arrangement having a duration of longer than one year. Any
securities that the Master Portfolio may receive as collateral will not become
part of the Master Portfolio's investment portfolio at the time of the loan
and, in the event of a default by the borrower, the Master Portfolio will, if
permitted by law, dispose of such collateral except for such part thereof that
is a security in which the Master Portfolio is permitted to invest. During the
time securities are on loan, the borrower will pay the Master Portfolio any
accrued income on those securities, and the Master Portfolio may invest the
cash collateral and earn income or receive an agreed-upon fee from a borrower
that has delivered cash-equivalent collateral. The Master Portfolio will not
lend securities having a value that exceeds one-third of the current value of
its total assets. Loans of securities by the Master Portfolio will be subject
to termination at the Master Portfolio's or the borrower's option. The Master
Portfolio may pay reasonable administrative and custodial fees in connection
with a securities loan and may pay a negotiated portion of the interest or fee
earned with respect to the collateral to the borrower or the placing broker.
Borrowers and placing brokers may not be affiliated, directly or indirectly,
with BGFA.

The principal risk of portfolio lending is potential default or insolvency of
the borrower. In either of these cases, the Master Portfolio could experience
delays in recovering securities or collateral or could lose all or part of the
value of the loaned securities.

FUTURES CONTRACTS AND OPTIONS TRANSACTIONS

The Master Portfolio may use futures contracts as a hedge against the effects
of interest rate changes or changes in the market value of the stocks
comprising the index in which the Master Portfolio invests. In managing its
cash flows, the Master Portfolio also may use futures contracts as a substitute
for holding the designated securities underlying the futures contract. A
futures contract is an agreement between two parties, a buyer and a seller, to
exchange a particular commodity at a specific price on a

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<PAGE>

specific date in the future. An option transaction generally involves a right,
which may or may not be exercised, to buy or sell a commodity or financial
instrument at a particular price on a specified future date. At the time it
enters into a futures transaction, the Master Portfolio is required to make a
performance deposit (initial margin) of cash or liquid securities in a
segregated account in the name of the futures broker. Subsequent payments of
"variation margin" are then made on a daily basis, depending on the value of
the futures position which is continually "marked to market."

The Master Portfolio may engage only in futures contract transactions involving
(i) the sale of a futures contract (I.E., short positions) to hedge the value
of securities held by the Master Portfolio; (ii) the purchase of a futures
contract when the Master Portfolio hold a short position having the same
delivery month (I.E., a long position offsetting a short position); or (iii)
the purchase of a futures contract to permit the Master Portfolio to, in
effect, participate in the market for the designated securities underlying the
futures contract without actually owning such designated securities. When the
Master Portfolio purchases a futures contract, it will create a segregated
account consisting of cash or other liquid assets in an amount equal to the
total market value of such futures contract, less the amount of initial margin
for the contract.

If the Master Portfolio enters into a short position in a futures contract as a
hedge against anticipated adverse market movements and the market then rises,
the increase in the value of the hedged securities will be offset, in whole or
in part, by a loss on the futures contract. If instead the Master Portfolio
purchases a futures contract as a substitute for investing in the designated
underlying securities, the Master Portfolio experiences gains or losses that
correspond generally to gains or losses in the underlying securities. The
latter type of futures contract transactions permits the Master Portfolio to
experience the results of being fully invested in a particular asset class,
while maintaining the liquidity needed to manage cash flows into or out of the
Master Portfolio (E.G., from purchases and redemptions of fund shares). Under
normal market conditions, futures contract positions may be closed out on a
daily basis. The Master Portfolio identified above expects to apply a portion
of its cash or cash equivalents maintained for liquidity needs to such
activities.

Transactions by the Master Portfolio in futures contracts involve certain
risks. One risk in employing futures contracts as a hedge against cash market
price volatility is the possibility that futures prices will correlate
imperfectly with the behavior of the prices of the securities in the Master
Portfolio's investment portfolio. Similarly, in employing futures contracts as
a substitute for purchasing the designated underlying securities, there is a
risk that the performance of the futures contract may correlate imperfectly
with the performance of the direct investments for which the futures contract
is a substitute. In addition, commodity exchanges generally limit the amount of
fluctuation permitted in futures contract prices during a single trading day,
and the existence of such limits may prevent the prompt liquidation of futures
positions in certain cases. Limits on price fluctuations are designed to
stabilize prices for the benefit of market participants; however, there could
be cases where the Master Portfolio could incur a larger loss due to the delay
in trading than it would have if no limit rules had been in effect.

Futures contracts and options are standardized and traded on exchanges, where
the exchange serves as the ultimate counterparty for all contracts.
Consequently, the primary credit risk on futures contracts is the
creditworthiness of the exchange. Futures contracts are subject to market risk
(I.E., exposure to adverse price changes). Although the Master Portfolio
intends to purchase or sell futures contracts only if there is an active market
for such contracts, no assurance can be given that a liquid market will exist
for any particular contract at any particular time. Many futures exchanges and
boards of trade limit the amount of fluctuation permitted in futures contract
prices during a single trading day. Once the daily limit has been reached in a
particular contract, no trades may be made that day at a price beyond that
limit or trading may be suspended for specified periods during the trading day.
Futures contract prices could move to the limit for several consecutive trading
days with little or no trading, thereby preventing prompt liquidation of
futures positions and potentially subjecting the Master Portfolio to
substantial losses. If it is not possible, or if the Master Portfolio
determines not to close a futures position in anticipation of adverse price
movements, the Master Portfolio will be required to make daily cash payments on
variation margin.

In order to comply with undertakings made by the Master Portfolio pursuant to
Commodity Futures Trading Commission ("CFTC") Regulation 4.5, the Master
Portfolio will use futures and option contracts solely for bona fide hedging
purposes within the meaning and intent of CFTC Reg. 1.3(z); provided, however,
that in addition, with respect to positions in commodity futures or commodity
option contracts which do not come within the meaning and intent of CFTC Reg.
1.3(z), the aggregate initial margin and premiums required to establish such
positions will not exceed five percent of the liquidation value of the Master
Portfolio's portfolio, after taking into account unrealized profits and
unrealized losses on any such contract it has entered into; and provided
further, that in the case of an option that is in-the-money at the time of
purchase, the in-the-money amount as defined in CFTC Reg. 190.01(x) may be
excluded in computing such five percent.

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STOCK INDEX FUTURES AND OPTIONS ON STOCK INDEX FUTURES

The Master Portfolio may invest in stock index futures and options on stock
index futures as a substitute for a comparable market position in the
underlying securities. A stock index future obligates the seller to deliver
(and the purchaser to take), effectively, an amount of cash equal to a specific
dollar amount times the difference between the value of a specific stock index
at the close of the last trading day of the contract and the price at which the
agreement is made. No physical delivery of the underlying stocks in the index
is made. With respect to stock indices that are permitted investments, the
Master Portfolio intends to purchase and sell futures contracts on the stock
index for which it can obtain the best price with consideration also given to
liquidity. There can be no assurance that a liquid market will exist at the
time when the Master Portfolio seeks to close out a futures contract or a
futures option position. Lack of a liquid market may prevent liquidation of an
unfavorable position.

INVESTMENT COMPANY SECURITIES

The Master Portfolio may invest in securities issued by other investment
companies which principally invest in securities of the type in which the
Master Portfolio invests. Under the 1940 Act, the Master Portfolio's investment
in such securities currently is limited to, subject to certain exceptions, (i)
3% of the total voting stock of any one investment company, (ii) 5% of the
Master Portfolio's net assets with respect to any one investment company and
(iii) 10% of the Master Portfolio's net assets in the aggregate. Investments in
the securities of other investment companies generally will involve duplication
of advisory fees and certain other expenses. The Master Portfolio may also
purchase shares of exchange listed closed-end funds.

ILLIQUID SECURITIES

The Master Portfolio may invest up to 15% of the value of its net assets in
securities as to which a liquid trading market does not exist, provided such
investments are consistent with its investment objective. Such securities may
include securities that are not readily marketable, such as certain securities
that are subject to legal or contractual restrictions on resale, participation
interests that are not subject to the demand feature described above, floating-
and variable-rate demand obligations as to which the Master Portfolio cannot
exercise the related demand feature described above on not more than seven
days' notice and as to which there is no secondary market and repurchase
agreements providing for settlement more than seven days after notice.

SHORT-TERM INSTRUMENTS AND TEMPORARY INVESTMENTS

The Master Portfolio may invest in high-quality money market instruments on an
ongoing basis to provide liquidity, for temporary purposes when there is an
unexpected level of shareholder purchases or redemptions or when ''defensive''
strategies are appropriate. The instruments in which the Master Portfolio may
invest include: (i) short-term obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities (including government-sponsored
enterprises); (ii) negotiable certificates of deposit (''CDs''), bankers'
acceptances, fixed time deposits and other obligations of domestic banks
(including foreign branches) that have more than $1 billion in total assets at
the time of investment and that are members of the Federal Reserve System or
are examined by the Comptroller of the Currency or whose deposits are insured
by the FDIC; (iii) commercial paper rated at the date of purchase ''Prime-1''
by Moody's or ''A-1+'' or ''A-1'' by S&P, or, if unrated, of comparable quality
as determined by BGFA ; (iv) nonconvertible corporate debt securities (E.G.,
bonds and debentures) with remaining maturities at the date of purchase of not
more than one year that are rated at least ''Aa'' by Moody's or ''AA'' by S&P;
(v) repurchase agreements; and (vi) short-term, U.S. dollar-denominated
obligations of foreign banks (including U.S. branches) that, at the time of
investment have more than $10 billion, or the equivalent in other currencies,
in total assets and in the opinion of BGFA are of comparable quality to
obligations of U.S. banks which may be purchased by the Master Portfolio.

BANK OBLIGATIONS

The Master Portfolio may invest in bank obligations, including certificates of
deposit, time deposits, bankers' acceptances and other short-term obligations
of domestic banks, foreign subsidiaries of domestic banks, foreign branches of
domestic banks, and domestic and foreign branches of foreign banks, domestic
savings and loan associations and other banking institutions. Certificates of
deposit are negotiable certificates evidencing the obligation of a bank to
repay funds deposited with it for a specified period of time. Time deposits are
non-negotiable deposits maintained in a banking institution for a specified
period of time at a stated interest rate. Time deposits which may be held by
the Master Portfolio will not benefit from insurance from the Bank Insurance
Fund or the Savings Association Insurance Fund administered by the FDIC.
Bankers' acceptances are credit instruments evidencing the obligation of a bank
to pay a draft drawn on it by a customer. These instruments reflect the
obligation

11
<PAGE>

both of the bank and of the drawer to pay the face amount of the instrument
upon maturity. The other short-term obligations may include uninsured, direct
obligations, bearing fixed, floating- or variable-interest rates.

COMMERCIAL PAPER AND SHORT-TERM CORPORATE DEBT INSTRUMENTS

The Master Portfolio may invest in commercial paper (including variable amount
master demand notes), which consists of short-term, unsecured promissory notes
issued by corporations to finance short-term credit needs. Commercial paper is
usually sold on a discount basis and has a maturity at the time of issuance not
exceeding nine months. Variable amount master demand notes are demand
obligations that permit the investment of fluctuating amounts at varying market
rates of interest pursuant to arrangements between the issuer and a commercial
bank acting as agent for the payee of such notes whereby both parties have the
right to vary the amount of the outstanding indebtedness on the notes. The
investment adviser and/or sub-adviser to the Master Portfolio monitors on an
on-going basis the ability of an issuer of a demand instrument to pay principal
and interest on demand. The Master Portfolio also may invest in
non-convertible corporate debt securities (E.G., bonds and debentures) with not
more than one year remaining to maturity at the date of settlement. The Master
Portfolio will invest only in such corporate bonds and debentures that are
rated at the time of purchase at least ''Aa'' by Moody's or ''AA'' by S&P.
Subsequent to its purchase by the Master Portfolio, an issue of securities may
cease to be rated or its rating may be reduced below the minimum rating
required for purchase by the Master Portfolio. BGFA will consider such an
event in determining whether the Master Portfolio should continue to hold the
obligation. To the extent the Master Portfolio continues to hold such
obligations, it may be subject to additional risk of default.

FORWARD COMMITMENTS, WHEN-ISSUED PURCHASES AND DELAYED- DELIVERY TRANSACTIONS

The Master Portfolio may purchase or sell securities on a when-issued or
delayed-delivery basis and make contracts to purchase or sell securities for a
fixed price at a future date beyond customary settlement time. Securities
purchased or sold on a when-is-sued, delayed-delivery or forward commitment
basis involve a risk of loss if the value of the security to be purchased
declines, or the value of the security to be sold increases, before the
settlement date. Although the Master Portfolio will generally purchase
securities with the intention of acquiring them, the Master Portfolio may
dispose of securities purchased on a when-issued, delayed-delivery or a forward
commitment basis before settlement when deemed appropriate by BGFA.

BORROWING MONEY

As a fundamental policy, the Master Portfolio is permitted to borrow to the
extent permitted under the 1940 Act. However, the Master Portfolio currently
intends to borrow money only for temporary or emergency (not leveraging)
purposes, and may borrow up to one-third of the value of its total assets
(including the amount borrowed) valued at the lesser of cost or market, less
liabilities (not including the amount borrowed) at the time the borrowing is
made. While borrowings exceed 5% of the Master Portfolio's total assets, the
Master Portfolio will not make any investments.

INVESTMENT IN WARRANTS

The Master Portfolio may invest up to 5% of net assets at the time of purchase
in warrants (other than those that have been acquired in units or attached to
other securities), including not more than 2% of each of their net assets in
warrants which are not listed on the New York or American Stock Exchange. A
warrant is an instrument issued by a corporation which gives the holder the
right to subscribe to a specified amount of the corporation's capital stock at
a set price for a specified period of time. The prices of warrants do not
necessarily correlate with the prices of the underlying securities. The Master
Portfolio may only purchase warrants on securities in which the Master
Portfolio may invest directly.

RISK CONSIDERATIONS

GENERAL

Since the investment characteristics and, therefore, investment risks directly
associated with such characteristics of the Fund correspond to those of the
Master Portfolio, the following is a discussion of the risks associated with
the investments of the Master Portfolio.

12
<PAGE>

EQUITY SECURITIES

The stock investments of the Master Portfolio are subject to equity market
risk. Equity market risk is the possibility that common stock prices will
fluctuate or decline over short or even extended periods. The U.S. stock market
tends to be cyclical, with periods when stock prices generally rise and periods
when prices generally decline. Throughout 1998, the stock market, as measured
by the S&P 500 Index and other commonly used indices, was trading at or close
to record levels. There can be no guarantee that these performance levels will
continue.

DEBT SECURITIES

The debt instruments in which the Master Portfolio invests are subject to
credit and interest rate risk. Credit risk is the risk that issuers of the debt
instruments in which the Master Portfolio invests may default on the payment of
principal and/or interest. Interest-rate risk is the risk that in-creases in
market interest rates may adversely affect the value of the debt instruments in
which the Master Portfolio invests. The value of the debt instruments generally
changes inversely to market interest rates. Debt securities with longer
maturities, which tend to produce higher yields, are subject to potentially
greater capital appreciation and depreciation than obligations with shorter
maturities. Changes in the financial strength of an issuer or changes in the
ratings of any particular security may also affect the value of these
investments. Although some of the Master Portfolio's securities are guaranteed
by the U.S. Government, its agencies or instrumentalities, such securities are
subject to interest rate risk and the market value of these securities, upon
which the Master Portfolio's daily NAV is based, will fluctuate. No assurance
can be given that the U.S. Government would provide financial support to its
agencies or instrumentalities where it is not obligated to do so.

FOREIGN SECURITIES

Investing in the securities of issuers in any foreign country, including
through American Depository Receipts (''ADRs''), European Depository Receipts
(''EDRs'') and similar securities, involves special risks and considerations
not typically associated with investing in U.S. companies. These include
differences in accounting, auditing and financial reporting standards;
generally higher commission rates on foreign portfolio transactions; the
possibility of nationalization, expropriation or confiscatory taxation; adverse
changes in investment or exchange control regulations (which may include
suspension of the ability to transfer currency from a country); and political,
social and monetary or diplomatic developments that could affect U.S.
investments in foreign countries. Additionally, dispositions of foreign
securities and dividends and interest payable on those securities may be
subject to foreign taxes, including withholding taxes. Foreign securities often
trade with less frequency and volume than domestic securities and, therefore,
may exhibit greater price volatility. Additional costs associated with an
investment in foreign securities may include higher custodial fees than apply
to domestic custodial arrangements and transaction costs of foreign currency
conversions. Changes in foreign exchange rates also will affect the value of
securities denominated or quoted in currencies other than the U.S. dollar. The
Master Portfolio's performance may be affected either unfavorably or favorably
by fluctuations in the relative rates of exchange between the currencies of
different nations, by exchange control regulations and by indigenous economic
and political developments.

OTHER INVESTMENT CONSIDERATIONS

Certain of the floating-and- variable-rate instruments that the Master
Portfolio may purchase also may be considered derivatives. Derivatives are
financial instruments whose values are derived, at least in part, from the
prices of other securities or specified assets, indices or rates. The Master
Portfolio may use some derivatives as part of its short-term liquidity holdings
and/or substitutes for comparable market positions in the underlying
securities. Some derivatives may be more sensitive than direct securities to
changes in interest rates or sudden market moves. Some derivatives also may be
susceptible to fluctuations in yield or value due to their structure or
contract terms. The Master Portfolio may not use derivatives to create leverage
without establishing adequate ''cover'' in compliance with SEC leverage rules.
Asset allocation and modeling strategies are employed by BGFA for other
investment companies and accounts advised or sub-advised by BGFA. If these
strategies indicate particular securities should be purchased or sold, at the
same time, by the Master Portfolio and one or more of these investment
companies or accounts, available investments or opportunities for sales will be
allocated equitably to each by BGFA. In some cases, this procedure may
adversely affect the size of the position obtained for or disposed of by the
Master Portfolio or the price paid or received by the Master Portfolio.

13
<PAGE>

MASTER/FEEDER STRUCTURE

The Fund seeks to achieve its investment objective by investing all of its
assets into the Master Portfolio of MIP. The Fund and other entities investing
in the Master Portfolio are each liable for all obligations of the Master
Portfolio. However, the risk of the Fund incurring financial loss on account of
such liability is limited to circumstances in which both inadequate insurance
existed and MIP itself is unable to meet its obligations. Accordingly, the
Fund's Board of Directors believes that neither the Fund nor its shareholders
will be adversely affected by investing Fund assets in the Master Portfolio.
However, if a mutual fund or other investor withdraws its investment from the
Master Portfolio, the economic efficiencies (E.G., spreading fixed expenses
among a larger asset base) that the Fund's Board believes may be available
through investment in the Master Portfolio may not be fully achieved. In
addition, given the relative novelty of the master/feeder structure, accounting
or operational difficulties, although unlikely, could arise.

The Fund may withdraw its investment in the Master Portfolio only if the Fund's
Board of Directors determines that such action is in the best interests of the
Fund and its shareholders. Upon any such withdrawal, the Fund's Board would
consider alternative investments, including investing all of the Fund's assets
in another investment company with the same investment objective as the Fund or
hiring an investment adviser to manage the Fund's assets in accordance with the
investment policies described below with respect to the Master Portfolio.

The investment objective and other fundamental policies of the Master Portfolio
cannot be changed without approval by the holders of a majority (as defined in
the 1940 Act) of the Master Portfolio's outstanding interests. Whenever the
Fund, as an interestholder of the Master Portfolio, is requested to vote on any
matter submitted to interestholders of the Master Portfolio, the Fund will
either (1) hold a meeting of its shareholders to consider such matters, and
cast its votes in proportion to the votes received from its shareholders
(shares for which the fund receives no voting instructions will be voted in the
same proportion as the votes received from the other Fund shareholders); or (2)
cast its votes, as an interestholder of the Master Portfolio, in proportion to
the votes received by the Master Portfolio from all other interestholders of
the Master Portfolio.

Certain policies of the Master Portfolio which are non-fundamental may be
changed by vote of a majority of MIP's Trustees without interestholder
approval. If the Master Portfolio's investment objective or fundamental or
non-fundamental policies are changed, the Fund may elect to change its
objective or policies to correspond to those of the Master Portfolio. The Fund
also may elect to redeem its interests in the Master Portfolio and either seek
a new investment company with a matching objective in which to invest or retain
its own investment adviser to manage the Fund's portfolio in accordance with
its objective. In the latter case, the Fund's inability to find a substitute
investment company in which to invest or equivalent management services could
adversely affect shareholders' investments in the Fund. The Fund will provide
shareholders with 30 days' written notice prior to the implementation of any
change in the investment objective of the Fund or the Master Portfolio, to the
extent possible.

DIRECTORS AND OFFICERS

Directors and officers of the Fund, together with information as to their
principal business occupations during the last five years, and other
information are shown below. Each director who is deemed an "interested
person," as defined in the 1940 Act, is indicated by an asterisk (*). Each
officer and director holds the same position with the 27 registered open-end
management investment companies consisting of 56 mutual funds ("Strong Funds").
The Strong Funds, in the aggregate, pay each Director who is not a director,
officer, or employee of the Advisor, or any affiliated company (a
"disinterested director") an annual fee of $86,000 plus $6,000 per Board
meeting, except for the Chairman of the Independent Directors Committee. The
Chairman of the Independent Directors Committee receives an annual fee of
$94,600 plus $6,600 per Board meeting. In addition, each disinterested
director is reimbursed by the Strong Funds for travel and other expenses
incurred in connection with attendance at such meetings. Other officers and
directors of the Strong Funds receive no compensation or expense reimbursement
from the Strong Funds.

*RICHARD S. STRONG (DOB 5/12/42), Director and Chairman of the Board of the
Strong Funds.

Prior to August 1985, Mr. Strong was Chief Executive Officer of Strong, which
he founded in 1974. Since August 1985, Mr. Strong has been a Security Analyst
and Portfolio Manager of Strong. In October 1991, Mr. Strong also became the
Chairman of Strong. Mr. Strong is a Director of Strong. Mr. Strong has been
in the investment management business since 1967.

14
<PAGE>

MARVIN E. NEVINS (DOB 7/9/18), Director of the Strong Funds.

WILLIE D. DAVIS (DOB 7/24/34), Director of the Strong Funds.

STANLEY KRITZIK (DOB 1/9/30), Director of the Strong Funds.

Mr. Kritzik has been a Partner of Metropolitan Associates since 1962, a
Director of Aurora Health Care since 1987, and Health Network Ventures, Inc.
since 1992.

WILLIAM F. VOGT (DOB 7/19/47), Director and Chairman of the Independent
Directors Committee of the Strong Funds.

NEAL MALICKY (DOB 9/14/34), Director of the Strong Funds.

Mr. Malicky has been Chancellor at Baldwin-Wallace College since July 1999.
From 1981 to July 1999, he served as President of Baldwin-Wallace College. He
is a Trustee of Southwest Community Health Systems, Cleveland Scholarship
Program, and The National Conference for Community Justice (NCCJ). He is also
the Past President of the National Association of Schools and Colleges of the
United Methodist Church, the Past Chairperson of the Association of Independent
Colleges and Universities of Ohio, and the Past Secretary of the National
Association of Independent Colleges and Universities.

STEPHEN J. SHENKENBERG (DOB 6/14/58), Vice President and Secretary of the
Strong Funds.

JOHN S. WEITZER (DOB 10/31/67), Vice President of the Strong Funds.

Mr. Weitzer has been Senior Counsel of the Advisor since December 1997. From
July 1993 until December 1997, Mr. Weitzer acted as Associate Counsel to the
Advisor.

15
<PAGE>

THOMAS M. ZOELLER (DOB 2/21/64), Vice President of the Strong Funds.

DENNIS A. WALLESTAD (DOB 11/3/62), Vice President of the Strong Funds.

JOHN W. WIDMER (DOB 1/19/65), Treasurer of the Strong Funds.

Mr. Widmer has been Treasurer of the Advisor since April 1999. From May 1997
to January 2000, Mr. Widmer was the Manager of Financial Management and Sales
Reporting Systems. From May 1992 to May 1997, Mr. Widmer was an Accounting and
Business Advisory Manager in the Milwaukee office of Arthur Andersen LLP. From
June 1987 to May 1992, Mr. Widmer was an accountant at Arthur Andersen LLP.

RHONDA K. HAIGHT (DOB 11/13/64), Assistant Treasurer of the Strong Funds.

Except for Messrs. Nevins, Davis, Kritzik, Vogt, and Malicky, the address of
all of the above persons is P.O. Box 2936, Milwaukee, Wisconsin 53201. Mr.
Nevins' address is 6075 Pelican Bay Boulevard #1006, Naples, Florida 34108. Mr.
Davis' address is 161 North La Brea, Inglewood, California 90301. Mr.
Kritzik's address is 1123 North Astor Street, P.O. Box 92547, Milwaukee,
Wisconsin 53202-0547. Mr. Vogt's address is P.O. Box 7657, Avon, CO 81620.
Mr. Malicky's address is 518 Bishop Place, Berea, OH 44017.

Unless otherwise noted below, as of March 31, 2000, the officers and directors
of the Fund in the aggregate beneficially owned less than 1% of the Fund's then
outstanding shares.

<TABLE>
<CAPTION>
<S> <C> <C>
FUND SHARES PERCENT
- ------ ------ -------
None
</TABLE>

PRINCIPAL SHAREHOLDERS

Unless otherwise noted below, as of March 31, 2000 no persons owned of record
or are known to own of record or beneficially more than 5% of the Fund's then
outstanding shares.

<TABLE>
<CAPTION>
<S> <C> <C>
NAME AND ADDRESS SHARES PERCENT
- ------------------------- -------------- --------------
Emre & Co. 2,602,423 26.05%
P.O. Box 1408
Milwaukee, WI 53201-1408
</TABLE>

16
<PAGE>

INVESTMENT ADVISOR

The advisor to the Master Portfolio is Barclays Global Fund Advisors ("BGFA").
BGFA is an indirect subsidiary of Barclays Bank PLC. Pursuant to an Investment
Advisory Contract ("Advisory Contract") with the Master Portfolio, BGFA
provides investment guidance and policy direction in connection with the
management of the Master Portfolio's assets. Pursuant to the Advisory
Contract, BGFA furnishes to the Master Portfolio's Boards of Trustees periodic
reports on the investment strategy and performance of the Master Portfolio.
The Advisory Contract is required to be approved annually (i) by the holders of
a majority of the Master Portfolio's outstanding voting securities or by the
Master Portfolio's Boards of Trustees and (ii) by a majority of the Trustees of
the Master Portfolio who are not parties to the Advisory Contract or
"interested persons" (as defined in the 1940 Act) of any such party. The
Advisory Contract may be terminated on 60 days' written notice by either party
and will terminate automatically if assigned.

BGFA is entitled to receive monthly fees at the annual rate of 0.05% of the
average daily net assets of the Master Portfolio as compensation for its
advisory services to the Master Portfolio. The Advisory Contract provides that
the advisory fee is accrued daily and paid monthly. This advisory fee is an
expense of the Master Portfolio borne proportionately by its interestholders,
such as the Fund.

BGFA has agreed to provide to the Master Portfolio, among other things, money
market security and fixed-income research, analysis and statistical and
economic data and information concerning interest rate and security market
trends, portfolio composition, credit conditions and average maturities of the
Master Portfolio's investment portfolio.

The Fund paid the following management fees for the time period indicated:

<TABLE>
<CAPTION>
<S> <C> <C> <C>
MANAGEMENT FEE
FISCAL PERIOD ENDED MANAGEMENT FEE ($) WAIVER($) BY BGFA AFTER WAIVER ($)
- ------------------- ------------------ ------------------ ------------------
2/28/98* 5,726 0 5,726
2/28/99 37,485 0 37,485
12/31/99** 69,891 0 69,891
</TABLE>

* Commenced operations on May 1, 1997.

** For the ten-month fiscal year ended December 31, 1999.

The Master Portfolio paid the following management fees for the time period
indicated:

<TABLE>
<CAPTION>
<S> <C> <C> <C>
MANAGEMENT FEE
FISCAL YEAR ENDED MANAGEMENT FEE ($) WAIVER($) BY BGFA AFTER WAIVER ($)
- ------------------ ------------------ ------------------ ------------------
2/28/98 939,051 0 939,051
2/28/99 1,353,414 0 1,353,414
12/31/99* 1,821,793 0 1,821,793
</TABLE>

* For the ten-month fiscal year ended December 31, 1999.

ADMINISTRATOR AND PLACEMENT AGENT OF THE MASTER PORTFOLIO

Stephens Inc. ("Stephens") and Barclays Global Investors, N.A. ("BGI") serve as
co-administrators on behalf of the Master Portfolio. Under the
Co-Administration Agreement between Stephens, BGI and the Master Portfolio,
Stephens and BGI provide as administrative services, among other things: (i)
general supervision of the operation of the Master Portfolio, including
coordination of the services performed by the investment advisor, transfer and
dividend disbursing agent, custodian, shareholder servicing agent(s),
independent auditors and legal counsel; (ii) general supervision of regulatory
compliance matters, including the compilation of information for documents such
as reports to, and filings with, the SEC and state securities commissions; and
preparation of proxy statements and shareholder reports for the Master
Portfolio; and (iii) general supervision relative to the compilation of data
required for the preparation of periodic reports distributed to the Master
Portfolio's officers and Board. Stephens also furnishes office space and
certain facilities required for conducting the business of the Master Portfolio
together with those ordinary clerical and bookkeeping services that are not
furnished by BGFA. Stephens also pays the compensation of

17
<PAGE>

the Master Portfolio's trustees, officers and employees who are affiliated with
Stephens. Furthermore, except as provided in the Advisory Contract, Stephens
and BGI bears substantially all costs of the Master Portfolio and the Master
Portfolio's operations. However, Stephens and BGI are not required to bear any
cost or expense which a majority of the disinterested trustees of the Master
Portfolio deem to be an extraordinary expense.

Stephens also acts as the placement agent of Master Portfolio's shares pursuant
to a Placement Agency Agreement ("Placement Agency Agreement") with the Master
Portfolio.

DISTRIBUTOR

Under a Distribution Agreement with the Fund ("Distribution Agreement"), Strong
Investments, Inc. ("Distributor"), P.O. Box 2936, Milwaukee, Wisconsin, 53201,
acts as underwriter of the Fund's shares. Mr. Strong is the Chairman and
Director of the Distributor, and Mr. Shenkenberg is Vice President, Chief
Compliance Officer and Secretary of the Distributor. The Distribution
Agreement provides that the Distributor will use its best efforts to distribute
the Fund's shares. The Distribution Agreement further provides that the
Distributor will bear the additional costs of printing prospectuses and
shareholder reports which are used for selling purposes, as well as advertising
and any other costs attributable to the distribution of the Fund's shares. The
Distributor is a direct subsidiary of the Advisor and controlled by the Advisor
and Richard S. Strong. The Distribution Agreement is subject to the same
termination and renewal provisions as are described above with respect to the
Advisory Agreement.

PORTFOLIO TRANSACTIONS AND BROKERAGE

Purchases and sales of equity securities on a securities exchange usually are
effected through brokers who charge a negotiated commission for their services.
Commission rates are established pursuant to negotiations with the broker based
on the quality and quantity of execution services provided by the broker in
light of generally prevailing rates. Orders may be directed to any broker
including, to the extent and in the manner permitted by applicable law,
Stephens or BGI. In the over- the-counter-market, securities are generally
traded on a "net" basis with dealers acting as principal for their own accounts
without a stated commission, although the price of the security usually
includes a profit to the dealer. In underwritten offerings, securities are
purchased at a fixed price that includes an amount of compensation to the
underwriter, generally referred to as the underwriter's concession or discount.

Purchases of debt securities generally are principal transactions. Debt
securities normally are purchased or sold from or to dealers serving as market
makers for the securities at a net price. Debt securities also may be purchased
in underwritten offerings or directly from an issuer. Generally debt
obligations are traded on a net basis and do not involve brokerage commissions.
The cost of executing transactions in debt securities consists primarily of
dealer spreads and underwriting commissions.

Under the 1940 Act, persons affiliated with the Master Portfolio are prohibited
from dealing with the Master Portfolio as a principal in the purchase and sale
of portfolio securities unless an exemptive order allowing such transactions is
obtained from the Commission or an exemption is otherwise available. The Master
Portfolio may purchase securities from underwriting syndicates of which
Stephens is a member under certain conditions in accordance with the provisions
of a rule adopted under the 1940 Act and in compliance with procedures adopted
by MIP's Board of Trustees.

The Master Portfolio has no obligation to deal with any dealer or group of
dealers in the execution of transactions in portfolio securities. Subject to
policies established by the Board of Trustees, BGFA is responsible for the
Master Portfolio's investment decisions and the placing of portfolio
transactions. In placing orders, it is the policy of the Master Portfolio to
obtain the best overall terms taking into account the dealer's general
execution and operational facilities, the type of transaction involved and
other factors such as the dealer's risk in positioning the securities involved.
BGFA generally seeks reasonably competitive spreads or commissions.

18
<PAGE>

In assessing the best overall terms available for any transaction, BGFA
considers factors deemed relevant, including the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker or dealer, and the reasonableness of the commission,
if any, both for the specific transaction and on a continuing basis. Certain of
the brokers or dealers with whom the Master Portfolios may transact business
offer commission rebates to the Master Portfolio. BGFA considers such rebates
in assessing the best overall terms available for any transaction. BGFA may
cause the Master Portfolio to pay a broker/dealer which furnishes brokerage
and research services a higher commission than that which might be charged by
another broker/dealer for effecting the same transaction, provided that BGFA
determines in good faith that such commission is reasonable in relation to the
value of the brokerage and research services provided by such broker/dealer,
viewed in terms of either the particular transaction or the overall
responsibilities of BGFA. Such brokerage and research services might consist of
reports and statistics relating to specific companies or industries, general
summaries of groups of stocks or bonds and their comparative earnings and
yields, or broad overviews of the stock, bond, and government securities
markets and the economy.

Supplementary research information so received is in addition to, and not in
lieu of, services required to be performed by BGFA and does not reduce the
advisory fees payable by the Master Portfolio. MIP's Board of Trustees will
periodically review the commissions paid by the Master Portfolio to consider
whether the commissions paid over representative periods of time appear to be
reasonable in relation to the benefits inuring to the Master Portfolio. It is
possible that certain of the supplementary research or other services received
will primarily benefit one or more other investment companies or other accounts
for which BGFA exercises investment discretion. Conversely, the Master
Portfolio may be the primary beneficiary of the research or services received
as a result of portfolio transactions effected for such other account or
investment company.

Under Section 28(e) of the Securities Exchange Act of 1934, an adviser shall
not be "deemed to have acted unlawfully or to have breached its fiduciary duty"
solely because under certain circumstances it has caused the account to pay a
higher commission than the lowest available. To obtain the benefit of Section
28(e), an adviser must make a good faith determination that the commissions
paid are "reasonable in relation to the value of the brokerage and research
services provided . . . viewed in terms of either that particular transaction
or its overall responsibilities with respect to the accounts as to which it
exercises investment discretion and that the services provided by a broker
provide an adviser with lawful and appropriate assistance in the performance of
its investment decision-making responsibilities." Accordingly, the price to the
Master Portfolio in any transaction may be less favorable than that available
from another broker/dealer if the difference is reasonably justified by other
aspects of the portfolio execution services offered.

The portfolio turnover rate for the Master Portfolio generally is not expected
to exceed 50%. This portfolio turnover rate will not be a limiting factor when
BGFA deems portfolio changes appropriate.

The Master Portfolio paid the following brokerage commissions for the time
periods indicated below. None of these brokerage commissions were paid to
affiliated brokers.

<TABLE>
<CAPTION>
<S> <C>
FISCAL YEAR ENDED BROKERAGE COMMISSIONS ($)
- ---------------------- -------------------------
2/28/98* 112,100
2/28/99 366,484
12/31/99** 271,962
</TABLE>

* Commenced operations on May 1, 1997.

** For the ten-month fiscal year ended December 31, 1999.

Unless otherwise noted below, the Master Portfolio has not acquired securities
of its regular brokers or dealers (as defined in Rule 10b-1 under the 1940 Act)
or their parents.

CUSTODIAN AND FUND ACCOUNTING SERVICES AGENT

Investors Bank & Trust Company ("IBT") located at 200 Clarendon Street, Boston,
MA 02111, serves as custodian of the assets of the Fund and Master Portfolio.
As a result, IBT has custody of all securities and cash of the Fund and the
Master Portfolio, delivers and receives payment for securities sold, receives
and pays for securities purchased, collects income from investments,

19
<PAGE>

and performs other duties, all as directed by the officers of the Fund and the
Master Portfolio. The custodian is in no way responsible for any of the
investment policies or decisions of the Fund and the Master Portfolio. IBT
also acts as the Fund's Accounting Services Agent.

FUND TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

The Advisor, P.O. Box 2936, Milwaukee, Wisconsin, 53201, acts as transfer agent
and dividend-disbursing agent for the Fund. The Advisor is compensated as
follows:

* Plus out-of-pocket expenses, such as postage and printing expenses in
connection with shareholder communications.

(1) Excluding the Strong Heritage Money Fund. The fee for the Heritage Money
Fund is 0.015% of the average daily net asset value of all Advisor Class
shares.

From time to time, the Fund, directly or indirectly through arrangements with
Strong, and/or Strong may pay amounts to third parties that provide transfer
agent type services and other administrative services relating to the Fund to
persons who beneficially own interests in the Fund, such as participants in
401(k) plans. These services may include, among other things, sub-accounting
services, transfer agent type activities, answering inquiries relating to the
Fund, transmitting proxy statements, annual reports, updated prospectuses,
other communications regarding the Fund, and related services as the Fund or
beneficial owners may reasonably request. In such cases, the Fund will not pay
fees based on the number of beneficial owners at a rate that is greater than
the rate the Fund is currently paying Strong for providing these services to
Fund shareholders.

On July 12, 1994, the SEC filed an administrative action ("Order") against
Strong, Mr. Strong, and another employee of Strong in connection with conduct
that occurred between 1987 and early 1990. In re Strong/Corneliuson Capital
Management, Inc., et al. Admin. Proc. File No. 3-8411. The proceeding was
settled by consent without admitting or denying the allegations in the Order.
The Order found that Strong and Mr. Strong aided and abetted violations of
Section 17(a) of the 1940 Act by effecting trades between mutual funds, and
between mutual funds and Harbour Investments Ltd. ("Harbour"), without
complying with the exemptive provisions of SEC Rule 17a-7 or otherwise
obtaining an exemption. It further found that Strong violated, and Mr. Strong
aided and abetted violations of, the disclosure provisions of the 1940 Act and
the Investment Advisers Act of 1940 by misrepresenting Strong's policy on
personal trading and by failing to disclose trading by Harbour, an entity in
which principals of Strong owned between 18 and 25 percent of the voting stock.
As part of the settlement, the respondents agreed to a censure and a cease and
desist order and Strong agreed to various undertakings, including adoption of
certain procedures and a limitation for six months on accepting certain types
of new advisory clients.

On June 6, 1996, the Department of Labor ("DOL") filed an action against Strong
for equitable relief alleging violations of the Employee Retirement Income
Security Act of 1974 ("ERISA") in connection with cross trades that occurred
between 1987 and

20
<PAGE>

late 1989 involving certain pension accounts managed by Strong.
Contemporaneous with this filing, Strong, without admitting or denying the
DOL's allegations, agreed to the entry of a consent judgment resolving all
matters relating to the allegations. Reich v. Strong Capital Management, Inc.,
(U.S.D.C. E.D. WI) ("Consent Judgment"). Under the terms of the Consent
Judgment, Strong agreed to reimburse the affected accounts a total of $5.9
million. The settlement did not have any material impact on Strong's financial
position or operations.

The organizational expenses for the Fund which were advanced by Strong and
which will be reimbursed by the Fund over a period of not more than 60 months
from the Fund's date of inception are listed below.

<TABLE>
<CAPTION>
<S> <C>
FUND ORGANIZATIONAL EXPENSES
- ----------------------- -----------------------
Strong Index 500 Fund $23,981
</TABLE>

The Fund paid the following amounts for the time periods indicated for transfer
agency and dividend disbursing and printing and mailing services:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FISCAL YEAR PER ACCOUNT OUT-OF-POCKET PRINTING/MAILING TOTAL COST AFTER
ENDED CHARGES ($) EXPENSES ($) SERVICES ($) WAIVER ($) WAIVER ($)
- ------------- ------------- ------------- ---------------- ------------- ----------------
2/28/98* 21,551 5,731 720 7,642 20,360
2/28/99 171,812 32,549 2,643 62,806 144,198
12/31/99** 369,998 33,144 1,690 26,400 378,432
</TABLE>

* Commenced operations on May 1, 1997.

** For the ten-month fiscal year ended December 31, 1999.

MASTER PORTFOLIO TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT

Investors Bank & Trust Company ("IBT"), 200 Clarendon Street, Boston, MA 02111,
acts as transfer agent and dividend-disbursing agent for the Master Portfolio.

FUND SHAREHOLDER SERVICING AGENT

Under a Shareholder Servicing Agreement with the Fund dated April 30, 1997,
Strong acts as shareholder servicing agent for the Fund. As shareholder
servicing agent, Strong provides personal services to the Fund's shareholders
and maintains the Fund's shareholder accounts. Such services include, (i)
answering shareholder inquiries regarding account status and history, the
manner in which purchases and redemptions of the Fund's shares may be effected,
and certain other matters pertaining to the Fund; (ii) assisting shareholders
in designating and changing dividend options, account designations and
addresses; (iii) providing necessary personnel and facilities to coordinate the
establishment and maintenance of shareholder accounts and records with the
Fund's transfer agent; (iv) transmitting shareholders' purchase and redemption
orders to the Fund's transfer agent; (v) arranging for the wiring or other
transfer of funds to and from shareholder accounts in connection with
shareholder orders to purchase or redeem shares of the Fund; (vi) verifying
purchase and redemption orders, transfers among and changes in
shareholder-designated accounts; (vii) informing the distributor of the Fund of
the gross amount of purchase and redemption orders for the Fund's shares;
(viii) monitoring the activities of the Fund's transfer agent related to
shareholders' accounts, and to statements, confirmations or other reports
furnished to shareholders by the Fund's transfer agent; and (ix) providing such
other related services as the Fund or a shareholder may reasonably request, to
the extent permitted by applicable law.

As compensation for its services, the Fund pays Strong a monthly fee based on a
percentage of the Fund's average daily net asset value. The annual rate is
0.25%. From time to time, Strong may voluntarily waive all or a portion of its
shareholder servicing fee and/or absorb certain Fund expenses without further
notification of the commencement or termination of such waiver or absorption.
Any such waiver or absorption will temporarily lower the Fund's overall expense
ratio and increase the Fund's overall return to investors.

21
<PAGE>

The Fund paid the following servicing fees for the time periods indicated:

<TABLE>
<CAPTION>
<S> <C> <C> <C>
SERVICING FEE
FISCAL YEAR ENDED SERVICING FEE ($) WAIVER ($) BY STRONG AFTER WAIVER ($)
- ------------------ ------------------ -------------------- ------------------
2/28/98* 28,770 28,770 0
2/28/99 189,339 77,525 111,814
12/31/99** 348,349 239,117 109,232
</TABLE>

* Commenced operations on May 1, 1997.

** For the ten-month fiscal year ended December 31, 1999.

TAXES

GENERAL

The Fund intends to qualify annually for treatment as a regulated investment
company ("RIC") under Subchapter M of the Internal Revenue Code of 1986,
("IRC"). If so qualified, the Fund will not be liable for federal income tax
on earnings and gains distributed to its shareholders in a timely manner. This
qualification does not involve government supervision of the Fund's management
practices or policies. The following federal tax discussion is intended to
provide you with an overview of the impact of federal income tax provisions on
the Fund or its shareholders. These tax provisions are subject to change by
legislative or administrative action at the federal, state, or local level, and
any changes may be applied retroactively. Any such action that limits or
restricts the Fund's current ability to pass-through earnings without taxation
at the Fund level, or otherwise materially changes the Fund's tax treatment,
could adversely affect the value of a shareholder's investment in the Fund.
Because the Fund's taxes are a complex matter, you should consult your tax
adviser for more detailed information concerning the taxation of the Fund and
the federal, state, and local tax consequences to shareholders of an investment
in the Fund.

In order to qualify for treatment as a RIC under the IRC, the Fund must
distribute to its shareholders for each taxable year at least 90% of its
investment company taxable income (consisting generally of taxable net
investment income, net short-term capital gain, and net gains from certain
foreign currency transactions, if applicable) ("Distribution Requirement") and
must meet several additional requirements. These requirements include the
following: (1) the Fund must derive at least 90% of its gross income each
taxable year from dividends, interest, payments with respect to securities
loans, and gains from the sale or other disposition of securities (or foreign
currencies if applicable) or other income (including gains from options,
futures, or forward contracts) derived with respect to its business of
investing in securities ("Income Requirement"); (2) at the close of each
quarter of the Fund's taxable year, at least 50% of the value of its total
assets must be represented by cash and cash items, U.S. government securities,
securities of other RICs, and other securities, with these other securities
limited, in respect of any one issuer, to an amount that does not exceed 5% of
the value of the Fund's total assets and that does not represent more than 10%
of the issuer's outstanding voting securities; and (3) at the close of each
quarter of the Fund's taxable year, not more than 25% of the value of its total
assets may be invested in securities (other than U.S. government securities or
the securities of other RICs) of any one issuer. There is a 30-day period
after the end of each calendar year quarter in which to cure any non-compliance
with these requirements.

The Fund will be subject to a nondeductible 4% excise tax ("Excise Tax") to the
extent it fails to distribute by the end of any calendar year substantially all
of its ordinary income for that year and capital gain net income for the
one-year period ending on October 31 of that year, plus certain other amounts.
The Fund may make additional distributions if necessary to avoid imposition of
a 4% excise tax on undistributed income and gains.

22
<PAGE>

From time to time, BGFA may find it necessary to make certain types of
investments for the purpose of ensuring that the Master Portfolio, and
therefore the Fund, continues to qualify for treatment as a RIC under the Code.
For purposes of complying with these qualification requirements the Fund will
be deemed to own a proportionate share of the Master Portfolio.

DETERMINATION OF NET ASSET VALUE

Generally, when an investor makes any purchases, sales, or exchanges, the price
of the investor's shares will be the net asset value ("NAV") next determined
after Strong Funds receives a request in proper form (which includes receipt of
all necessary and appropriate documentation and subject to available funds).
Any applicable sales charges will be added to the purchase price for Advisor
Class shares of the Fund, if any. The "offering price" is the initial sales
charge, if any, plus the NAV. If Strong Funds receives such a request prior to
the close of the New York Stock Exchange ("NYSE") on a day on which the NYSE is
open, the share price will be the NAV determined that day. The NAV for each
Fund or each class of shares is normally determined as of 3:00 p.m. Central
Time ("CT") each day the NYSE is open. The NYSE is open for trading Monday
through Friday except New Year's Day, Martin Luther King Jr. Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
and Christmas Day. Additionally, if any of the aforementioned holidays falls
on a Saturday, the NYSE will not be open for trading on the preceding Friday,
and when any such holiday falls on a Sunday, the NYSE will not be open for
trading on the succeeding Monday, unless unusual business conditions exist,
such as the ending of a monthly or yearly accounting period. The Fund
reserves the right to change the time at which purchases, redemptions, and
exchanges are priced if the NYSE closes at a time other than 3:00 p.m. CT or if
an emergency exists. The NAV of each Fund or of each class of shares of a Fund
is calculated by taking the fair value of the Fund's total assets attributable
to that Fund or class, subtracting all its liabilities attributable to that
Fund or class, and dividing by the total number of shares outstanding of that
Fund or class. Expenses are accrued daily and applied when determining the
NAV. The Fund's portfolio securities are valued based on market quotations or
at fair value as determined by the method selected by the Fund's Board of
Directors.

ADDITIONAL SHAREHOLDER INFORMATION

TELEPHONE AND INTERNET EXCHANGE/REDEMPTION PRIVILEGES

RIGHT OF SET-OFF

To the extent not prohibited by law, the Fund, any other Strong Fund, and
Strong, each has the right to set-off against a shareholder's account balance
with a Strong Fund, and redeem from such account, any debt the shareholder may
owe any of these entities. This right applies even if the account is not
identically registered.

BROKERS RECEIPT OF PURCHASE AND REDEMPTION ORDERS

RETIREMENT PLANS

23
<PAGE>

$4,000 between your Traditional IRA and your non-working spouses' Traditional
IRA). Under certain circumstances, your contribution will be deductible.

SIMPLIFIED EMPLOYEE PENSION PLAN (SEP-IRA): A SEP-IRA plan allows an employer
to make deductible contributions to separate IRA accounts established for each
eligible employee.

24
<PAGE>

ORGANIZATION

The Fund is either a "Corporation" or a "Series" of common stock of a
Corporation, as described in the chart below:

Strong Equity Funds, Inc.(1) 12/28/90 Indefinite .00001
- - Strong Growth Fund* 12/28/90 Indefinite .00001
+Investor Class(2) 12/28/90 Indefinite .00001
+Advisor Class 2/17/00 Indefinite .00001
+Institutional Class 2/17/00 Indefinite .00001
- - Strong Value Fund* 11/01/95 Indefinite .00001
- - Strong Mid Cap Growth Fund* 10/28/96 Indefinite .00001
- - Strong Index 500 Fund 4/08/97 Indefinite .00001
- - Strong Growth 20 Fund* 6/04/97 Indefinite .00001
+Investor Class(2) 6/04/97 Indefinite .00001
+Advisor Class 2/17/00 Indefinite .00001
- - Strong Small Cap Value Fund* 12/10/97 Indefinite .00001
- - Strong Dow 30 Value Fund* 12/10/97 Indefinite .00001
- - Strong Strategic Growth Fund* 5/4/98 Indefinite .00001
- - Strong Enterprise Fund* 9/15/98 Indefinite .00001
+Investor Class(2) 9/15/98 Indefinite .00001
+Advisor Class 2/17/00 Indefinite .00001
- - Strong Mid Cap Disciplined Fund* 12/15/98 Indefinite .00001
- -Strong U.S. Emerging Growth 12/15/98 Indefinite .00001
Fund*
- -Strong Internet Fund* 12/14/99 Indefinite .00001
- -Strong Technology 100 Fund* 12/14/99 Indefinite .00001
- -Strong Technology Index Plus 12/14/99 Indefinite .00001
Fund*
</TABLE>

* Described in a different prospectus and SAI.
(1) Prior to November 1, 1995, the Corporation's name was Strong Growth Fund,
Inc.

25
<PAGE>

SHAREHOLDER MEETINGS

The Wisconsin Business Corporation Law permits registered investment companies,
such as the Fund, to operate without an annual meeting of shareholders under
specified circumstances if an annual meeting is not required by the 1940 Act.
The Fund has adopted the appropriate provisions in its Bylaws and may, at its
discretion, not hold an annual meeting in any year in which the election of
directors is not required to be acted on by shareholders under the 1940 Act.

MASTER PORTFOLIO ORGANIZATION

The Master Portfolio is a series of Master Investment Portfolio ("MIP"), an
open-end, series management investment company organized as Delaware business
trust. MIP was organized on October 21, 1993. MIP currently consists of
twelve series, including the Master Portfolio. In accordance with Delaware law
and in connection with the tax treatment sought by MIP, the Declaration of
Trust provides that its investors are personally responsible for Trust
liabilities and obligations, but only to the extent the Trust property is
insufficient to satisfy such liabilities and obligations. The Declaration of
Trust also provides that MIP must maintain appropriate insurance (for example,
fidelity bonding and errors and omissions insurance) for the protection of the
Trust, its investors, trustees, officers, employees and agents covering
possible tort and other liabilities, and that investors will be indemnified to
the extent they are held liable for a disproportionate share of MIP's
obligations. Thus, the risk of an investor incurring financial loss on account
of investor liability is limited to circumstances in which both inadequate
insurance existed and MIP itself was unable to meet its obligations.

The Declaration of Trust further provides that obligations of MIP are not
binding upon its trustees individually but only upon the property of MIP and
that the trustees will not be liable for any action or failure to act, but
nothing in the Declarations of Trust protects a trustee against any liability
to which the trustee would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of the trustee's office.

The interests in the Master Portfolio have substantially identical voting and
other rights as those rights enumerated above for shares of the Fund. MIP is
generally not required to hold annual meetings, but is required by Section
16(c) of the 1940 Act to hold a special meeting and assist investor
communications under certain circumstances. Whenever the Fund is requested to
vote on a matter with respect to the Master Portfolio, the Fund will hold a
meeting of Fund shareholders and will cast its votes as instructed by such
shareholders.

In a situation where the Fund does not receive instruction from certain of its
shareholders on how to vote the corresponding shares of the Master Portfolio,
such Fund will vote such shares in the same proportion as the shares for which
the Fund does receive voting instructions.

PERFORMANCE INFORMATION

The Strong Funds may advertise a variety of types of performance information as
more fully described below. The Fund's performance is historical and past
performance does not guarantee the future performance of the Fund. From time
to time, Strong may agree to waive or reduce its management fee and/or to
absorb certain operating expenses for the Fund. Waivers of management fees and
absorption of expenses will have the effect of increasing the Fund's
performance.

DISTRIBUTION RATE

26
<PAGE>

sources other than dividends and interest, such as short-term capital gains.
Therefore, the Fund's distribution rate may be substantially different than its
yield. Both the Fund's yield and distribution rate will fluctuate.

AVERAGE ANNUAL TOTAL RETURN

The Fund's average annual total return quotation is computed in accordance with
a standardized method prescribed by rules of the SEC. The average annual total
return for the Fund for a specific period is calculated by first taking a
hypothetical $10,000 investment ("initial investment") in the Fund's shares on
the first day of the period and computing the "redeemable value" of that
investment at the end of the period. The redeemable value is then divided by
the initial investment, and this quotient is taken to the Nth root (N
representing the number of years in the period) and 1 is subtracted from the
result, which is then expressed as a percentage. The calculation assumes that
all income and capital gains dividends paid by the Fund have been reinvested at
net asset value on the reinvestment dates during the period. Average annual
total returns reflect the impact of sales charges, if any.

TOTAL RETURN

Calculation of the Fund's total return is not subject to a standardized
formula. Total return performance for a specific period is calculated by first
taking an investment (assumed below to be $10,000) ("initial investment") in
the Fund's shares on the first day of the period and computing the "ending
value" of that investment at the end of the period. The total return
percentage is then determined by subtracting the initial investment from the
ending value and dividing the remainder by the initial investment and
expressing the result as a percentage. The calculation assumes that all income
and capital gains dividends paid by the Fund have been reinvested at net asset
value of the Fund on the reinvestment dates during the period. Total return
may also be shown as the increased dollar value of the hypothetical investment
over the period. Total returns reflect the impact of sales charges, if any.

CUMULATIVE TOTAL RETURN

TOTAL RETURN

INDEX 500 FUND

* Commenced operations on May 1, 1997.

COMPARISONS

U.S. TREASURY BILLS, NOTES, OR BONDS. Investors may want to compare the
performance of the Fund to that of U.S. Treasury bills, notes, or bonds, which
are issued by the U.S. Government. Treasury obligations are issued in selected
denominations. Rates of Treasury obligations are fixed at the time of issuance
and payment of principal and interest is backed by the full faith and credit of
the Treasury. The market value of such instruments will generally fluctuate
inversely with interest rates prior to maturity and will equal par value at
maturity. Generally, the values of obligations with shorter maturities will
fluctuate less than those with longer maturities.

27
<PAGE>

MONEY MARKET FUNDS. Investors may also want to compare performance of the Fund
to that of money market funds. Money market fund yields will fluctuate and
shares are not insured, but share values usually remain stable.

28
<PAGE>

STRONG FUNDS. The Strong Funds offer a comprehensive range of conservative to
aggressive investment options. The Strong Funds and their investment objectives
are listed below.

FUND NAME INVESTMENT OBJECTIVE

<TABLE>
<CAPTION>
<S> <C>
- ---------------------------------- -----------------------------------------------------------------------------------
CASH MANAGEMENT
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Advantage Fund Current income with a very low degree of share-price fluctuation.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Heritage Money Fund Current income, a stable share price, and daily liquidity.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Investors Money Fund Current income, a stable share price, and daily liquidity.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Money Market Fund Current income, a stable share price, and daily liquidity.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Municipal Advantage Fund Federally tax-exempt current income with a very low degree of share-price
fluctuation.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Municipal Money Market Fund Federally tax-exempt current income, a stable share-price, and daily liquidity.
- ---------------------------------- -----------------------------------------------------------------------------------

- ---------------------------------- -----------------------------------------------------------------------------------
EQUITY
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Common Stock Fund* Capital growth.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Discovery Fund Capital growth.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Dow 30 Value Fund Capital growth.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Enterprise Fund Capital growth.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Growth Fund Capital growth.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Growth 20 Fund Capital growth.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Index 500 Fund To approximate as closely as practicable (before fees and expenses) the
capitalization-weighted total rate of return of that portion of the U.S. market for
publicly traded common stocks composed of the larger capitalized companies.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Internet Fund Capital growth.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Large Cap Growth Fund Capital growth.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Mid Cap Disciplined Fund Capital growth.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Mid Cap Growth Fund Capital growth.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Opportunity Fund Capital growth.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Small Cap Value Fund Capital growth.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Strategic Growth Fund Capital growth.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Technology 100 Fund Capital growth.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Technology Index Plus Fund Capital growth.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong U.S. Emerging Growth Fund Capital growth.
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Value Fund Capital growth.
- ---------------------------------- -----------------------------------------------------------------------------------

- ---------------------------------- -----------------------------------------------------------------------------------
INCOME
- ---------------------------------- -----------------------------------------------------------------------------------
Strong Bond Fund Total return by investing for a high level of current income with a moderate
degree of share-price fluctuation.
- ---------------------------------- -----------------------------------------------------------------------------------
</TABLE>

29
<PAGE>

<TABLE>
<CAPTION>
<S> <C>
Strong Corporate Bond Fund Total return by investing for a high level of current income with a moderate
degree of share-price fluctuation.
- ---------------------------------- ----------------------------------------------------------------------------------
Strong Government Securities Fund Total return by investing for a high level of current income with a moderate
degree of share-price fluctuation.
- ---------------------------------- ----------------------------------------------------------------------------------
Strong High-Yield Bond Fund Total return by investing for a high level of current income and capital growth.
- ---------------------------------- ----------------------------------------------------------------------------------
Strong Short-Term Bond Fund Total return by investing for a high level of current income with a low degree of
share-price fluctuation.
- ---------------------------------- ----------------------------------------------------------------------------------
Strong Short-Term High Yield Bond Total return by investing for a high level of current income with a moderate
Fund degree of share-price fluctuation.
- ---------------------------------- ----------------------------------------------------------------------------------

* The Fund is closed to new investors, except the Fund may continue to
offer its shares through certain 401(k) plans and similar company-sponsored
retirement plans.

The Advisor also serves as Advisor to several management investment companies,
some of which fund variable annuity separate accounts of certain insurance
companies.

The Fund may from time to time be compared to other Strong Funds based on a
risk/reward spectrum. In general, the amount of risk associated with any
investment product is commensurate with that product's potential level of
reward. The Strong Funds risk/reward continuum or any Fund's position on the
continuum may be described or diagrammed in marketing materials. The Strong
Funds risk/reward continuum positions the risk and reward potential of each
Strong Fund relative to the other Strong Funds, but is not intended to position
any Strong Fund relative to other mutual funds or investment products.
Marketing materials may also discuss the relationship between risk and reward
as it relates to an individual investor's portfolio.

30
<PAGE>

investments to help meet your goals. As a general rule of thumb, the longer
your time horizon, the more price fluctuation you will be able to tolerate in
pursuit of higher returns. For that reason, many people with longer-term goals
select stocks or long-term bonds, and many people with nearer-term goals match
those up with for instance, short-term bonds. Strong developed the following
suggested holding periods to help our investors set realistic expectations for
both the risk and reward potential of our funds. (See table below.) Of
course, time is just one element to consider when making your investment
decision.

STRONG FUNDS SUGGESTED MINIMUM HOLDING PERIODS

<TABLE>
<CAPTION>
<S> <C> <C> <C>
UNDER 1 YEAR 1 TO 2 YEARS 4 TO 7 YEARS 5 OR MORE YEARS
- ---------------------- -------------------------- --------------------------- --------------------------

* This Fund is closed to new investors, except the Fund may continue to
offer its shares through certain 401(k) plans and similar company-sponsored
retirement plans.

31
<PAGE>

company's stock price. However, you should keep in mind that investing in a
product in its early adoption phase does not provide any guarantee of profit.
A product may experience a prolonged rapid growth and maturity phase without
any corresponding increase in the company's stock price. In addition,
different products have life cycles that may be longer or shorter than those
depicted and these variations may influence whether the product has a positive
effect on the company's stock price. For example, a product may not positively
impact a company's stock price if it experiences an extremely short rapid
growth or maturity phase because the product becomes obsolete soon after it is
introduced to the general public. Other products may never move past the early
adoption phase and have no impact on the company's stock price.

ADDITIONAL FUND INFORMATION

MEASURES OF VOLATILITY AND RELATIVE PERFORMANCE. Occasionally statistics may
be used to specify fund volatility or risk. The general premise is that greater
volatility connotes greater risk undertaken in achieving performance. Measures
of volatility or risk are generally used to compare the Fund's net asset value
or performance relative to a market index. One measure of volatility is beta.
Beta is the volatility of a fund relative to the total market as represented by
the Standard & Poor's 500 Stock Index. A beta of more than 1.00 indicates
volatility greater than the market, and a beta of less than 1.00 indicates
volatility less than the market. Another measure of volatility or risk is
standard deviation. Standard deviation is a statistical tool that measures the
degree to which a fund's performance has varied from its average performance
during a particular time period.

Standard deviation is calculated using the following formula:

Standard deviation = the square root of S(xi - xm)2
n-1

Where: S = "the sum of",
xi = each individual return during the time period,
xm = the average return over the time period, and
n = the number of individual returns during the time period.

Other measures of volatility and relative performance may be used as
appropriate. However, all such measures will fluctuate and do not represent
future results.

GENERAL INFORMATION

BUSINESS PHILOSOPHY

Strong is an independent, Midwestern-based investment advisor, owned by
professionals active in its management. Recognizing that investors are the
focus of its business, Strong strives for excellence both in investment
management and in the service provided to investors. This commitment affects
many aspects of the business, including professional staffing, product
development, investment management, and service delivery.

The increasing complexity of the capital markets requires specialized skills
and processes for each asset class and style. Therefore, Strong believes that
active management should produce greater returns than a passively managed
index. Strong has

32
<PAGE>

brought together a group of top-flight investment professionals with diverse
product expertise, and each concentrates on their investment specialty. Strong
believes that people are the firm's most important asset. For this reason,
continuity of professionals is critical to the firm's long-term success.

INVESTMENT ENVIRONMENT

EIGHT BASIC PRINCIPLES FOR SUCCESSFUL MUTUAL FUND INVESTING

1. HAVE A PLAN - even a simple plan can help you take control of your
financial future. Review your plan once a year, or if your circumstances
change.

2. START INVESTING AS SOON AS POSSIBLE. Make time a valuable ally. Let it
put the power of compounding to work for you, while helping to reduce your
potential investment risk.

3. DIVERSIFY YOUR PORTFOLIO. By investing in different asset classes -
stocks, bonds, and cash - you help protect against poor performance in one type
of investment while including investments most likely to help you achieve your
important goals.

5. MAINTAIN A LONG-TERM PERSPECTIVE. For most individuals, the best
discipline is staying invested as market conditions change. Reactive, emotional
investment decisions are all too often a source of regret - and principal loss.

6. CONSIDER STOCKS TO HELP ACHIEVE MAJOR LONG-TERM GOALS. Over time, stocks
have provided the more powerful returns needed to help the value of your
investments stay well ahead of inflation.

7. KEEP A COMFORTABLE AMOUNT OF CASH IN YOUR PORTFOLIO. To meet current
needs, including emergencies, use a money market fund or a bank account - not
your long-term investment assets.

MARKETS. The retirement plan services provided by Strong focus on four
distinct markets, based on the belief that a retirement plan should fit the
customer's needs, not the other way around.

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<PAGE>

TURNKEY APPROACH. The retirement plans offered by Strong are designed to be
streamlined and simple to administer. To this end, Strong has invested heavily
in the equipment, systems, and people necessary to adopt or convert a plan, and
to keep it running smoothly. Strong provides all aspects of the plan,
including plan design, administration, recordkeeping, and investment
management. To streamline plan design, Strong provides customizable
IRS-approved prototype documents. Strong's services also include annual
government reporting and testing as well as daily valuation of each
participant's account. This structure is intended to eliminate the confusion
and complication often associated with dealing with multiple vendors. It is
also designed to save plan sponsors time and expense.

Strong strives to provide one-stop retirement savings programs that combine the
advantages of proven investment management, flexible plan design, and a wide
range of investment options. The open architecture design of the plans allow
for the use of the family of mutual funds managed by Strong as well as a stable
asset value option. Large company plans may supplement these options with
their company stock (if publicly traded) or funds from other well-known mutual
fund families.

EDUCATION. Participant education and communication is key to the success of
any retirement program, and therefore is one of the most important services
that Strong provides. Strong's goal is twofold: to make sure that plan
participants fully understand their options and to educate them about the
lifelong investment process. To this end, Strong provides attractive, readable
print materials that are supplemented with audio and video tapes, and
retirement education programs.

SERVICE. Strong's goal is to provide a world class level of service. One
aspect of that service is an experienced, knowledgeable team that provides
ongoing support for plan sponsors, both at adoption or conversion and
throughout the life of a plan. Strong is committed to delivering accurate and
timely information, evidenced by straightforward, complete, and understandable
reports, participant account statements, and plan summaries.

Strong has designed both "high-tech" and "high-touch" systems, providing an
automated telephone system as well as personal contact. Participants can
access daily account information, conduct transactions, or have questions
answered in the way that is most comfortable for them.

STRONG FINANCIAL ADVISORS GROUP

The Strong Financial Advisors Group is dedicated to helping financial advisors
better serve their clients. Financial advisors receive regular updates on the
mutual funds managed by Strong, access to portfolio managers through special
conference calls, consolidated mailings of duplicate confirmation statements,
access to Strong's network of regional representatives, and other specialized
services. For more information on the Strong Financial Advisors Group, call
1-800-368-1683.

INDEPENDENT ACCOUNTANTS

KPMG LLP, Three Embarcadero Center, San Francisco, California 94111, have been
selected as the independent accountants for the Fund and the Master Portfolio,
providing audit services and assistance and consultation with respect to the
preparation of filings with the SEC.

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<PAGE>

LEGAL COUNSEL

Godfrey & Kahn, S.C., 780 North Water Street, Milwaukee, Wisconsin 53202, acts
as legal counsel for the Fund.

FINANCIAL STATEMENTS

The Annual Report for the Fund and the Master Investment Portfolio - S&P 500
Index Master Portfolio that is attached to this SAI contains the following
audited financial information:

1. Schedule of Investments in Securities.
2. Statements of Operations.
3. Statements of Assets and Liabilities.
4. Statements of Changes in Net Assets.
5. Notes to Financial Statements.
6. Financial Highlights.
7. Report of Independent Accountants.

35
<PAGE>

STRONG EQUITY FUNDS, INC.

PART C
OTHER INFORMATION

Item 23. EXHIBITS

(a) Articles of Incorporation effective August 1, 1996(3)
(a.1) Amendment to Articles of Incorporation effective October 24,
1996(4)
(a.2) Amendment to Articles of Incorporation effective April 7,
1997(5)
(a.3) Amendment to Articles of Incorporation effective June 4, 1997(6)
(a.4) Amendment to Articles of Incorporation effective December 10,
1997(7)
(a.5) Amendment to Articles of Incorporation effective May 4, 1998(8)
(a.6) Amendment to Articles of Incorporation effective September 14,
1998(9)
(a.7) Amendment to Articles of Incorporation effective December 15,
1998(10)
(a.8) Amendment to Articles of Incorporation effective February 2,
1999(11)
(a.9) Amendment to Articles of Incorporation effective December 13,
1999(14)
(a.10) Amendment to Articles of Incorporation dated February 17,
2000(15)
(b) Bylaws dated October 20, 1995(1)
(b.1) Amendment to Bylaws dated May 1, 1998(8)
(c) Specimen Stock Certificate(15)
(d) Amended and Restated Investment Advisory Agreement [Excluding
Index 500 Fund](15)
(d.1) Subadvisory Agreement (Value Fund)(1)
(d.2) Subadvisory Agreement (Dow 30 Value Fund)(7)
(d.3) Amended and Restated Subadvisory Agreement (U.S. Emerging Growth
Fund)(15)
(e) Distribution Agreement - Investor and Institutional Class(15)
(e.1) Distribution Agreement - Advisor Class(15)
(e.2) Dealer Agreement(15)
(e.3) Services Agreement(15)
(f) Inapplicable
(g) Custody Agreement with Firstar (Growth, Value, Mid Cap Growth,
Growth 20, Small Cap Value, Dow 30 Value, Strategic Growth, Enterprise, Mid Cap
Disciplined, U.S. Emerging Growth, Internet, Technology 100, and Technology
Index Plus Funds) (2)
(g.1) Global Custody Agreement with Brown Brothers Harriman & Co.
(Growth, Value, Mid Cap Growth, Growth 20, Small Cap Value, Strategic Growth,
Enterprise, Mid Cap Disciplined, U.S. Emerging Growth, Internet, Technology
100, and Technology Index Plus, Funds)(2)
(g.2) Amendment to Global Custody Agreement with Brown Brothers
Harriman & Co. dated August 26, 1996 (Growth, Value, Mid Cap Growth, Growth 20,
Small Cap Value, Strategic Growth, Enterprise, Mid Cap Disciplined, U.S.
Emerging Growth, Internet, Technology 100, and Technology Index Plus Funds)(11)
(g.3) Custody Agreement with Investors Bank and Trust (Index 500
Fund)(5)
(h) Amended and Restated Transfer and Dividend Disbursing Agent
Agreement [Excluding Index 500 Fund](15)
(h.1) Shareholder Servicing Agent Agreement (relating to personal
services provided to shareholders)[Index 500 Fund](5)
(h.2) Administration Agreement - Investor Class(15)
(h.3) Administration Agreement - Advisor Class(15)
(h.4) Administration Agreement - Institutional Class(15)
(i) Inapplicable
(j) Consent of Independent Accountants
(j.1) Consent of Independent Accountants (Index 500 Fund)
(k) Inapplicable
(l) Inapplicable
(m) Amended and Restated Rule 12b-1 Plan(15)

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<PAGE>

(n) Amended and Restated Rule 18f-3 Plan(15)
(o) Inapplicable
(p) Code of Ethics for Access Persons dated January 1, 1999(12)
(p.1) Code of Ethics for Non-Access Persons dated January 1, 1999(12)
(q) Power of Attorney dated April 28, 1999(12)
(q.1) Power of Attorney dated December 23, 1999(14)
(q.2) Power of Attorney for the Master Investment Portfolio dated June
24, 1999(13)
(q.3) Power of Attorney for the Master Investment Portfolio dated
February 17, 2000
(r) Letter of Representation

__________________________

(1) Incorporated herein by reference to Post-Effective Amendment No. 5 to
the Registration Statement on Form N-1A filed on or about December 15, 1995.

(2) Incorporated herein by reference to Post-Effective Amendment No. 7 to
the Registration Statement on Form N-1A filed on or about July 30, 1996.

(3) Incorporated herein by reference to Post-Effective Amendment No. 8 to
the Registration Statement on Form N-1A filed on or about October 17, 1996.

(4) Incorporated herein by reference to Post-Effective Amendment No. 9 to
the Registration Statement on Form N-1A filed on or about December 30, 1996.

(5) Incorporated herein by reference to Post-Effective Amendment No. 12 to
the Registration Statement on Form N-1A filed on or about April 25, 1997.

(6) Incorporated herein by reference to Post-Effective Amendment No. 13 to
the Registration Statement on Form N-1A filed on or about June 27, 1997.

(7) Incorporated herein by reference to Post-Effective Amendment No. 16 to
the Registration Statement on Form N-1A filed on or about December 24, 1997.

(8) Incorporated herein by reference to Post-Effective Amendment No. 20 to
the Registration Statement on Form N-1A filed on or about May 18, 1998.

(9) Incorporated herein by reference to Post-Effective Amendment No. 23 to
the Registration Statement on Form N-1A filed on or about September 28, 1998.

(10) Incorporated herein by reference to Post-Effective Amendment No. 25 to
the Registration Statement on Form N-1A filed on or about December 30, 1998.

(11) Incorporated herein by reference to Post-Effective Amendment No. 26 to
the Registration Statement on Form N-1A filed on or about March 2, 1999.

(12) Incorporated herein by reference to Post-Effective Amendment No. 27 to
the Registration Statement on Form N-1A filed on or about April 29, 1999.

(13) Incorporated herein by reference to Post-Effective Amendment No. 29 to
the Registration Statement on Form N-1A filed on or about June 25, 1999.

(14) Incorporated herein by reference to Post-Effective Amendment No. 32 to
the Registration Statement on Form N-1A filed on or about December 27,
1999.

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<PAGE>

(15) Incorporated herein by reference to Post-Effective Amendment No. 34 to
the Registration Statement on Form N-1A filed on or about February 22,
2000.

Item 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

Registrant neither controls any person nor is under common control with
any other person.

Item 25. INDEMNIFICATION

Officers and directors of the Funds, its advisor and underwriter are
insured under a joint directors and officers/errors and omissions insurance
policy underwritten by a group of insurance companies in the aggregate amount
of $115,000,000, subject to certain deductions. Pursuant to the authority of
the Wisconsin Business Corporation Law ("WBCL"), Article VII of Registrant's
Bylaws provides as follows:

ARTICLE VII. INDEMNIFICATION OF OFFICERS AND DIRECTORS

SECTION 7.01. MANDATORY INDEMNIFICATION. The Corporation shall
indemnify, to the full extent permitted by the WBCL, as in effect from time to
time, the persons described in Sections 180.0850 through 180.0859 (or any
successor provisions) of the WBCL or other provisions of the law of the State
of Wisconsin relating to indemnification of directors and officers, as in
effect from time to time. The indemnification afforded such persons by this
section shall not be exclusive of other rights to which they may be entitled as
a matter of law.

SECTION 7.02. PERMISSIVE SUPPLEMENTARY BENEFITS. The Corporation
may, but shall not be required to, supplement the right of indemnification
under Section 7.01 by (a) the purchase of insurance on behalf of any one or
more of such persons, whether or not the Corporation would be obligated to
indemnify such person under Section 7.01; (b) individual or group
indemnification agreements with any one or more of such persons; and (c)
advances for related expenses of such a person.

SECTION 7.03. AMENDMENT. This Article VII may be amended or
repealed only by a vote of the shareholders and not by a vote of the Board of
Directors.

SECTION 7.04. INVESTMENT COMPANY ACT. In no event shall the
Corporation indemnify any person hereunder in contravention of any provision of
the Investment Company Act.

Item 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISOR

ENTERPRISE, GROWTH, GROWTH 20, INTERNET, MID CAP DISCIPLINED, MID CAP
GROWTH, SMALL CAP VALUE, STRATEGIC GROWTH, TECHNOLOGY 100, AND TECHNOLOGY INDEX
PLUS FUNDS

The information contained under "Who are the funds' investment advisor and
portfolio manager?" in the Prospectus and under "Directors and Officers,"
"Investment Advisor," and "Distributor" in the Statement of Additional
Information is hereby incorporated by reference pursuant to Rule 411 under the
Securities Act of 1933.

VALUE, DOW 30 VALUE, AND U.S. EMERGING GROWTH FUNDS

The information contained under "Who are the funds' investment advisor and
portfolio managers?" in the Prospectus and under "Directors and Officers,"
"Investment Advisor," "Subadvisor," and "Distributor" in the Statement of
Additional Information is hereby incorporated by reference pursuant to Rule 411
under the Securities Act of 1933.

4
<PAGE>

INDEX 500 FUND

The information contained under "Who is the fund's investment advisor?" in
the Prospectus and under "Directors and Officers" "Investment Advisor," and
"Distributor" in the Statement of Additional Information is hereby incorporated
by reference pursuant to Rule 411 under the Securities Act of 1933.

Item 27. PRINCIPAL UNDERWRITERS

(a) Strong Investments, Inc., principal underwriter for Registrant, also
serves as principal underwriter for Strong Advantage Fund, Inc.; Strong Asia
Pacific Fund, Inc.; Strong Asset Allocation Fund, Inc.; Strong Common Stock
Fund, Inc.; Strong Conservative Equity Funds, Inc.; Strong Corporate Bond Fund,
Inc.; Strong Discovery Fund, Inc.; Strong Government Securities Fund, Inc.;
Strong Heritage Reserve Series, Inc.; Strong High-Yield Municipal Bond Fund,
Inc.; Strong Income Funds, Inc.; Strong Income Funds II, Inc.; Strong
International Equity Funds, Inc.; Strong International Income Funds, Inc.;
Strong Life Stage Series, Inc.; Strong Money Market Fund, Inc.; Strong
Municipal Bond Fund, Inc.; Strong Municipal Funds, Inc.; Strong Opportunity
Fund, Inc.; Strong Opportunity Fund II, Inc.; Strong Schafer Funds, Inc.;
Strong Schafer Value Fund, Inc.; Strong Short-Term Bond Fund, Inc.; Strong
Short-Term Global Bond Fund, Inc.; Strong Short-Term Municipal Bond Fund, Inc.;
Strong Total Return Fund, Inc.; and Strong Variable Insurance Funds, Inc.

(b)

Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH UNDERWRITER WITH FUND

Richard S. Strong Director and Chairman Director and Chairman of
100 Heritage Reserve of the Board the Board
Menomonee Falls, WI 53051

Stephen J. Shenkenberg Vice President, Chief Vice President
100 Heritage Reserve Compliance Officer and Secretary
Menomonee Falls, WI 53051 and Secretary

Anthony J. D'Amato President none
100 Heritage Reserve
Menomonee Falls, WI 53051

Jevad Aslani Vice President none
100 Heritage Reserve
Menomonee Falls, WI 53051

Lyle J. Fitterer Vice President none
100 Heritage Reserve
Menomonee Falls, WI 53051

Dana J. Russart Vice President none
100 Heritage Reserve
Menomonee Falls, WI 53051

Peter D. Schwab Vice President none
100 Heritage Reserve
Menomonee Falls, WI 53051

Michael W. Stefano Vice President none
100 Heritage Reserve
Menomonee Falls, WI 53051

5
<PAGE>

Dennis A. Wallestad Vice President none
100 Heritage Reserve
Menomonee Falls, WI 53051

Thomas M. Zoeller Treasurer and Chief Vice President
100 Heritage Reserve Financial Officer
Menomonee Falls, WI 53051

Richard T. Weiss Director none
100 Heritage Reserve
Menomonee Falls, WI 53051

Item 28. LOCATION OF ACCOUNTS AND RECORDS

All accounts, books, or other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the rules promulgated
thereunder are in the physical possession of Registrant's Vice President,
Stephen J. Shenkenberg, at Registrant's corporate offices, 100 Heritage
Reserve, Menomonee Falls, Wisconsin 53051.

Item 29. MANAGEMENT SERVICES

All management-related service contracts entered into by Registrant are
discussed in Parts A and B of this Registration Statement.

Item 30. UNDERTAKINGS

None

6
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all the
requirements for effectiveness of this Post-Effective Amendment to the
Registration Statement pursuant to Rule 485(b) under the Securities Act of
1933, and has duly caused this Post-Effective Amendment to the Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the Village of Menomonee Falls, and State of Wisconsin on the
26th day of April, 2000.

STRONG EQUITY FUNDS, INC.
(Registrant)

By: /S/ STEPHEN J. SHENKENBERG
Stephen J. Shenkenberg, Vice President

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement on Form N-1A has been
signed below by the following persons in the capacities and on the date
indicated.

<TABLE>
<CAPTION>
<S> <C> <C>
NAME TITLE DATE
- --------------------- ---------------------------------- --------------

Chairman of the Board (Principal
/s/ Richard S. Strong Executive Officer) and a Director April 26, 2000
- ---------------------
Richard S. Strong

Treasurer (Principal Financial and
/s/ John W. Widmer Accounting Officer) April 26, 2000
- ---------------------
John W. Widmer

Director April 26, 2000
- ---------------------
Marvin E. Nevins*

Director April 26, 2000
- ---------------------
Willie D. Davis*

Director April 26, 2000
- ---------------------
William F. Vogt*

Director April 26, 2000
- ---------------------
Stanley Kritzik*

Director April 26, 2000
- ---------------------
Neal Malicky*

</TABLE>

* John S. Weitzer signs this document pursuant to powers of attorney filed
with Post-Effective Amendment No. 32 and Post-Effective Amendment No. 27 to the
Registration Statement on Form N-1A.

By: /S/ JOHN S. WEITZER
John S. Weitzer

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<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this registration statement under Rule 485(b)
under the Securities Act, and has duly caused this Post-Effective Amendment to
be signed on its behalf by the undersigned, thereto duly authorized, in the
City of Little Rock, State of Arkansas on the 26th day of April, 2000.

MASTER INVESTMENT PORTFOLIO S&P 500 INDEX MASTER
PORTFOLIO

By: /S/ RICHARD H. BLANK, JR.
Richard H. Blank, Jr.
Secretary and Treasurer
(Principal Financial Officer)

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.

SIGNATURES TITLE DATE

/S/ RICHARD H. BLANK, JR. Secretary and Treasurer April 26, 2000
Richard H. Blank, Jr. (Principal Financial Officer)

Trustee April 26, 2000
Jack S. Euphrat*

Chairman, President April 26, 2000
R. Greg Feltus* (Principal Executive Officer)
and Trustee

Trustee April 26, 2000
W. Rodney Hughes*

Trustee April 26, 2000
Leo Soong*

* Richard H. Blank, Jr. signs this document pursuant to powers of attorney as
previously filed and filed herewith.

*By: /S/ RICHARD H. BLANK, JR.
Richard H. Blank, Jr.
Attorney-in-Fact

1
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EXHIBIT INDEX

<TABLE>
<CAPTION>
<S> <C> <C>
EDGAR
EXHIBIT NO. EXHIBIT EXHIBIT NO.
- ----------- -----------------------------------------------------------------------------

(j) Consent of Independent Accountants EX-99.j

(j.1) Consent of Independent Accountants (Index 500 Fund) EX-99.j1

(q.3) Power of Attorney for the Master Investment Portfolio dated February 17, 2000 EX-99.q3

(r) Letter of Representation EX-99.r
</TABLE>

1
<PAGE>

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in this Registration
Statement on Form N-1A of our report dated February 7, 2000 (except Strong Dow
30 Value Fund and Strong Value Fund, which reports are dated February 2, 2000),
relating to the financial statements and financial highlights which appear in
the December 31, 1999 Annual Reports to Shareholders of Strong Dow 30 Value
Fund, Strong Enterprise Fund, Strong Growth Fund, Strong Growth 20 Fund, Strong
Mid Cap Disciplined Fund, Strong Mid Cap Growth Fund, Strong Small Cap Value
Fund, Strong Strategic Growth Fund, Strong U.S. Emerging Growth Fund and Strong
Value Fund (ten of the portfolios constituting the Strong Equity Funds, Inc.),
which are also incorporated by reference into the Registration Statement. We
also consent to the references to us under the headings "Financial Highlights"
and "Independent Accountants" in such Registration Statement.

/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP

Milwaukee, Wisconsin
April 26, 2000

1
<PAGE>

CONSENT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Directors of
Strong Equity Funds, Inc.:

We consent to the use of our reports dated February 11, 2000 for Strong Index
500 Fund and S&P 500 Index Master Portfolio included herein.

We also consent to the reference to our Firm under the headings "Financial
Highlights" in the prospectus and "Independent Accountants" in the Statement of
Additional Information.

San Francisco, California
April 26, 2000

1
<PAGE>

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Marco E. Adelfio, Richard H. Blank, Jr., R. Greg Feltus and Robert M.
Kurucza, and each of them, his true and lawful attorney-in-fact and agent
(each, an "Attorney-in Fact") with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, (i) to execute the Registration Statement of each of Barclays
Global Investors Funds, Inc. and Master Investment Portfolio and any investment
company whose fund(s) invest in a Master Portfolio of Master Investment
Portfolio (each, a "Company"), and any or all amendments (including
post-effective amendments) thereto and to file the same, with any and all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission and any state securities commissions or
authorities, and (ii) to execute any and all federal or state regulatory
filings, including all applications with regulatory authorities, state charter
or organizational documents and any amendments or supplements thereto, to be
executed by, on behalf of, or for the benefit of, a Company. The undersigned
hereby grants to each Attorney-in-Fact full power and authority to do and
perform each and every act and thing contemplated above, as fully and to all
intents and purposes as he might or could do in person, and hereby ratifies and
confirms all that said Attorney-in-Fact may lawfully do or cause to be done by
virtue hereof.

Dated: February 17, 2000 /S/ LEO SOONG
Leo Soong

1
<PAGE>

GODFREY & KAHN, S.C.
ATTORNEYS AT LAW
780 North Water Street
Milwaukee, Wisconsin 53202
Phone (414) 273-3500 Fax (414) 273-5198

April 26, 2000

VIA EDGAR

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Re: STRONG EQUITY FUNDS, INC.

Gentlemen:

We represent Strong Equity Funds, Inc. (the "Company"), in connection with
its filing of Post-Effective Amendment No. 17 (the "Post-Effective Amendment")
to the Company's Registration Statement (Registration Nos. 33-70764; 811-8100)
on Form N-1A under the Securities Act of 1933 (the "Securities Act") and the
Investment Company Act of 1940. The Post-Effective Amendment is being filed
pursuant to Rule 485(b) under the Securities Act.

We have reviewed the Post-Effective Amendment and, in accordance with Rule
485(b)(4) under the Securities Act, hereby represent that the Post-Effective
Amendment does not contain disclosures which would render it ineligible to
become effective pursuant to Rule 485(b).

We consent to the use of this letter in the Post-Effective Amendment.

Very truly yours,

GODFREY & KAHN, S.C.

/s/ Renee M. Hardt

Renee M. Hardt

1
<PAGE>

2
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