|
Deficient management leads INDITEX on the verge of fail
BUCHAREST,
ROMANIA - Zara wants to cover losses from theft with employees’
money.
The management, theft and losses give headaches to the Spanish
group INDITEX, the owner of the ZARA chain. Only 10 months before, on
July 25th, 2011, the publication Ziarul Financiar
announced the fact that “INDITEX takes the manager from the
Douglas perfumeries” pointing at Paul Cuza, who previously had
the function of General Manager for Parfumerie Douglas SRL.
Currently, the Romanian INDITEX group performs salary and structural
changes without precedent, which the management team from Bucharest doesn’t want to explain.
The problem of the clothes theft is a known phenomenon, especially
when it comes to expensive brands such as ZARA or Massimo Dutti. The
phenomenon was publicly recognized even by the management of the
INDITEX Group Romania, two years before. Probably worried by this
fact, Mihai Cioltea, the development manager of the INDITEX Group
from Romania, also named by the press as “the Zara man”,
stated in 2010 for the economic website InCont the following: “They
steal a lot. Only for the stores in Bucharest we have 10 cases of
stealing per day, which we discover and, depending on the severity,
we call the police”.[...]
Read the rest of the article...
|
|
back to index
contact: globe @ globe24h.com
We respect intellectual property rights and will take appropriate steps to protect these rights.
If you believe your copyright has been infringed on, please send us a message with the following information:
1. An identification of the copyrighted work that you claim has been infringed
2. A link to the material located on Globe24h.com that you claim is a copyright infringement
3. Information on how to contact you including your address, telephone number, and email address.
Please send your message to: copyright @ globe24h.com
THE STRONG
MUNICIPAL INCOME
Funds
ANNUAL REPORT o AUGUST 31, 1996
[PHOTO OF SENIOR COUPLE]
[PICTURE OF PIE CHART EMPHASIZING BONDS]
THE STRONG SHORT-TERM MUNICIPAL BOND FUND
THE STRONG MUNICIPAL BOND FUND
THE STRONG HIGH-YIELD MUNICIPAL BOND FUND
[STRONG LOGO]
STRONG FUNDS
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 1-800-368-3863. We're here 24
hours a day, seven days a week to take your call.
- ---------------------------------------1----------------------------------------
Have a plan.
[PICTURE OF FOLDER LABELED INVESTMENTS]
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.
[PICTURE OF CLOCK]
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.
[PICTURE OF PIE CHART OF ASSET DIVERSIFICATION]
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.
[PICTURE OF MEMO REMINDER TO INVEST]
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.
[PICTURE OF GRAPH SLOPING UPWARD]
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 of principal loss.
- ---------------------------------------6----------------------------------------
Consider stocks to help achieve major long-term goals.
[PICTURE OF PIE CHART OF ASSET DIVERSIFICATION EMPASIZING STOCKS]
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.
[PICTURE OF DOLLAR SIGN]
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.
[PICTURE OF MAGNIFYING GLASS]
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.
THE STRONG
MUNICIPAL INCOME
Funds
ANNUAL REPORT o AUGUST 31, 1996
Two Important Notes for Shareholders of the Strong Municipal Income Funds
FISCAL YEAR END CHANGE. To help ensure that we can produce shareholder reports
on a timely basis, we have changed the fiscal year-end of our Municipal Income
Funds to August 31, beginning with this annual report. By staggering the Funds'
fiscal-year periods, and thereby their reporting schedules, we avoid a potential
"log-jam" of reports at year-end. This change has no effect on how the funds are
managed. It simply alters the reporting period of your shareholder reports.
Please call 1-800-368-3863 if you have a question regarding the new schedule.
STEVEN D. HARROP HAS BEEN NAMED PORTFOLIO MANAGER OF THE STRONG MUNICIPAL BOND
FUND, effective September 16, 1996. Steven has managed the Strong Municipal
Money Market Fund since 1991, the Strong Municipal Advantage Fund since its
inception in November 1995, and the Strong Short-Term Municipal Bond Fund since
December 1995.
TABLE OF CONTENTS
INVESTMENT REVIEWS
The Strong Short-Term Municipal Bond Fund........................2
The Strong Municipal Bond Fund...................................4
The Strong High-Yield Municipal Bond Fund........................4
|
FINANCIAL INFORMATION
Schedules of Investments in Securities
The Strong Short-Term Municipal Bond Fund...................8
The Strong Municipal Bond Fund..............................9
The Strong High-Yield Municipal Bond Fund..................12
Statements of Operations........................................15
Statements of Assets and Liabilities............................16
Statements of Changes in Net Assets.............................17
Notes to Financial Statements...................................19
FINANCIAL HIGHLIGHTS...................................................21
REPORT OF INDEPENDENT ACCOUNTANTS......................................23
|
The Strong SHORT-TERM MUNICIPAL BOND Fund
The Strong Short-Term Municipal Bond Fund seeks total return by investing for a
high level of federally tax-exempt current income with a low degree of
share-price fluctuation. The Fund invests primarily in short- and
intermediate-term, investment-grade municipal obligations and maintains an
average portfolio maturity of three years or less.
EQUIVALENT TAXABLE YIELDS (1)
as of 8-30-96
................................................................................
YOUR TAX-EXEMPT YIELD
OF 5.12% IS EQUIVALENT
JOINT RETURN SINGLE RETURN MARGINAL TAX RATE TO A TAXABLE YIELD OF:
................................................................................
$40,101-96,900 $24,001-58,150 28% 7.11%
$96,901-147,700 $58,151-121,300 31% 7.42%
$147,701-263,750 $121,301-263,750 36% 8.00%
OVER $263,750 OVER $263,750 39.6% 8.48%
================================================================================
|
The chart reflects 1996 marginal federal tax rates before limitations and
phase-outs. Individuals with adjusted gross income in excess of $117,950 should
consult their tax advisor to determine their actual 1996 marginal tax rate. The
Fund's income may be subject to state and local taxes and, depending on your tax
status, the Alternative Minimum Tax.
As of August 30, 1996, the Strong Short-Term Municipal Bond Fund's annualized
30-day yield was 5.12%.(1) The table above shows the Fund's equivalent taxable
yields based on 1996's federal income tax brackets.
CHANGE IN THE ECONOMIC OUTLOOK
The one-year period ended August 31, 1996, was a fairly turbulent stretch for
the municipal bond market, during which short-term municipal bonds tended to
fare better than their longer-maturity counterparts.
Throughout the last several months of 1995 and into early 1996, talk of a "flat
tax" structure in Washington created concern among investors that the tax
advantages offered by municipal bonds might be altered. As a result, yields on
municipal securities rose, considerably narrowing the normal spread between
tax-exempt bonds and taxable bonds, especially in the spring of 1996.
The municipal bond market experienced additional volatility when, in the first
quarter of 1996, economic data indicated an unexpectedly strong U.S. economy.
(The consensus going into the year had been for continued weak economic growth
and low inflation.) Many investors were caught off guard by the resulting sharp
increase in interest rates, which led to widely fluctuating prices.
Despite the fact that inflation remained under control, fear that the Federal
Reserve Board would tighten monetary policy continued to push long-term interest
rates higher through the second quarter. Through the summer, however, yields had
begun to settle into a range and prices started to firm.
OUR KEY STRATEGY REMAINED IN PLACE
Throughout the fiscal year, we diligently pursued our primary goal, which is to
reduce the maturity of the Fund without reducing its yield. In a perfect world,
it shouldn't be possible to reduce maturity without reducing yield. However, the
municipal bond market isn't perfect--there are occasional dislocations and
glitches that provide momentary windows of opportunity.
Through scrupulous research and patient trading, we believe that replacing
certain longer positions with shorter securities offering equal or higher yields
will enable us to maintain an attractive level of income while making the Fund
less susceptible to gyrations in the market.
When our repositioning of the portfolio is accomplished, we expect that the Fund
will be able to deliver attractive results under normal conditions--it won't
need a "tailwind" of falling rates to provide investors with attractive income
with a low degree of share-price movement.
By the end of August, total assets under management had increased to
approximately $136 million.
OUR OUTLOOK IS CAUTIOUSLY OPTIMISTIC
While the taxable markets remain skittish, the tax-exempt markets--which
suffered even greater declines earlier this year--are now at roughly the same
level they were in March. This is not to say that municipal markets have been
flat in 1996; they have, in fact, been quite volatile. However, we saw better
relative performance in municipal bonds during the second quarter, a condition
we expect will continue through the end of the year.
2
AS OF 8-30-96
30-Day Annualized Yield (1)
5.12%
Average Maturity (2)
2.8 years
Average Quality (3)
A
We continue to rely on our time-tested approach of utilizing intense credit
research to select attractive investments, and we remain committed to pursuing
the Fund's objective--providing shareholders with a high level of federally
tax-exempt current income with a low degree of share-price volatility. We
believe our strategy should reward investors who are willing to take a
two-to-four year approach to municipal investing.
We appreciate the opportunity to serve you, and we thank you for your investment
with us.
[PHOTO OF STEVEN D. HARROP]
Sincerely,
/s/Steven D. Harrop
Steven D. Harrop
Portfolio Manager
|
GROWTH OF AN ASSUMED $10,000 INVESTMENT
from 12-31-91 to 8-31-96
Strong Short-Term Lehman Brothers Lipper Short
Municipal Bond Fund 3-Year Municipal Municipal
Bond Index* Debt "Average"*
12-91 10,000 10,000 10,000
12-92 10,716 10,643 10,576
12-93 11,441 11,305 11,109
12-94 11,256 11,383 11,163
12-95 11,861 12,396 11,939
8-96 12,146 12,654 12,162
|
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with a similar investment in the
Lehman Brothers 3-Year Municipal Bond Index and the Lipper Short Municipal Debt
"Average." Results include the reinvestment of all dividends and capital gains
distributions. Performance is historical and does not represent future results.
Investment returns and principal value will vary, and you may have a gain or
loss when you sell shares.
AVERAGE ANNUAL
TOTAL RETURNS (4)
as of 8-31-96
1-year
4.04%
3-year
2.55%
Since inception
(on 12-31-91)
4.25%
* The Lehman Brothers 3-Year Municipal Bond Index is an unmanaged index
generally representative of the 3-year tax-exempt bond market. The Lipper
Short Municipal Debt "Average" represents funds that invest in municipal
debt issues with dollar-weighted average maturities of less than 5 years.
Source of the Lehman index data is Micropal. Source of the Lipper data is
Lipper Analytical Services, Inc.
1 Yields are annualized for the 30 days ended 8-30-96, are historical, and
will vary.
2 The Fund's average maturity includes the effect of futures contracts.
3 For the purposes of this average rating, the Fund's short-term debt
obligations have been assigned long-term ratings by the Advisor.
4 Average annual total return measures change in the value of an investment
in the Fund as an annualized average, assuming reinvestment of all
dividends and capital gains.
3
The Strong
MUNICIPAL BOND
Fund
The Strong
HIGH-YIELD
MUNICIPAL BOND
Fund
THE STRONG MUNICIPAL BOND FUND
The Strong Municipal Bond Fund seeks total return by investing for a high level
of federally tax-exempt current income with a moderate degree of share-price
fluctuation.
THE STRONG HIGH-YIELD MUNICIPAL BOND FUND
The Strong High-Yield Municipal Bond Fund seeks total return by investing for a
high level of federally tax-exempt current income.
THE MARKET DOES AN "ABOUT-FACE"
The 1-year period ended August 31, 1996 was a bit of a roller-coaster ride for
long-term municipal bond fund investors. As 1995 came to a close, the market was
enjoying the latter stages of a solid rally fueled by declining long-term rates.
However, long-term municipal bonds tended to lag the gains made by Treasuries,
due to concerns over possible tax reform that might have altered the tax-exempt
status of municipal bonds. (No such legislation occurred, or appears likely to
occur in the near future.)
TOTAL RETURNS (1)
for the 1-year period ended 8-31-96
STRONG MUNICIPAL BOND FUND 2.44%
LIPPER GENERAL MUNICIPAL DEBT FUNDS INDEX 4.94%
LEHMAN BROTHERS MUNICIPAL BOND INDEX 5.24%
STRONG HIGH-YIELD MUNICIPAL BOND FUND 4.44%
|
LIPPER HIGH YIELD MUNICIPAL DEBT FUNDS INDEX 5.10%
HIGH-YIELD MUNICIPAL BOND INDEX 5.46%
As 1996 began, the overall bond market rally continued, supported by a consensus
expectation for weak economic growth. Gross domestic product estimates were
being revised downward, and some economists even projected a recession beginning
in the first half of the year.
However, an unexpectedly strong employment report--indicating that a much larger
than anticipated number of jobs were created in February--shattered this
pessimistic view of the economy, and subsequent economic data tended to support
the idea that the economy was strengthening rather than weakening. The market
responded by pushing interest rates higher, on fear that the Federal Reserve
Board would reverse the easing policy it had followed over most of the prior
year.
Interest rates remained choppy to slightly higher through the second quarter and
into August. While this rise in rates resulted in a negative total return for
long-bond investors for the six-month period ended August 31, total returns
remained positive for the 1-year period. As you can see in the accompanying
charts, the performance of the Funds slightly lagged that of their respective
benchmarks.
STRONG MUNICIPAL BOND FUND STRATEGY
During the first three months of 1996, the Fund's duration--a measurement of its
sensitivity to interest rate changes--was longer than that of its benchmark, due
to our expectation for a continuing decline in interest rates. While this
positioning helped the Fund achieve attractive gains through the latter stages
in 1995, it adversely affected the Fund's performance as interest rates rose in
1996.
At mid-year, we began to gradually reduce the Fund's duration. By the end of
August, we had shortened the Fund's duration to 7.2--more in line with the
benchmark's duration, and a significant decrease from 9.5 at the end of the
first quarter.
In addition, we made sector changes in the portfolio designed to make the Fund
less susceptible to interest rate changes through an increase in its yield. We
expanded holdings in BBB-rated Industrial Development Revenue bonds--municipal
bonds backed by corporate credits--and slightly increased our weighting in
housing bonds. These bonds tend to offer higher-than-average yields due to the
risk of prepayment, an event that is unlikely when rates are flat or rising. We
concentrated our purchases in the 20-year maturity range rather than the 30-year
maturity range to help reduce the Fund's average maturity, and thereby its
sensitivity to interest rate movements.
STRONG HIGH-YIELD MUNICIPAL BOND FUND STRATEGY
High-yield bonds tend to be less affected by interest rate changes than
higher-quality bonds, so the Strong High-Yield Municipal Bond Fund fared
reasonably well in 1996's challenging environment.
The Fund's underperformance of its benchmark--the High Yield Municipal Bond
Index+--can be attributed partially to political events that impacted specific
holdings in the Fund. Two securities (both designed to finance waste
incinerators in Illinois) were adversely affected by the surprise repeal of the
Retail Rate Law. The prospect of lengthy litigation, with a low probability of
victory in the courts, induced us to sell the securities.
4
Also contributing to the Fund's modest underperformance versus its benchmark was
its duration, which was slightly longer than that of the index during the first
half of the year when interest rates were rising. In 1996, we made a few sector
changes in order to more broadly diversify the Fund's holdings. For example, we
added to our holdings in Industrial Development Revenue bonds, which served to
diversify the Fund from a credit standpoint. We also made an effort to increase
the Fund's diversification by state. At the beginning of the year, 21 states
were represented in the portfolio. By the end of August, that number had risen
to 29.
Finally, we acted to increase the Fund's liquidity by reducing its weighting in
non-rated bonds, which slightly increased the portfolio's credit quality. Of
course, investors should keep in mind that the high current yield offered by the
Fund reflects the substantial risks associated with its investment in high-yield
bonds, sometimes referred to as "junk" bonds.
PORTFOLIO STATISTICS AS OF 8-30-96
30-Day Average Average
Annualized Yield Maturity Quality Rating
................................................................................
Municipal Bond Fund 5.49% 14.9 years A
|
High-Yield Municipal Bond Fund 6.90% 18.7 years BBB
The Funds' average maturity includes the effects of futures contracts and
when-issued securities. For the average quality rating, the Funds' short-term
debt obligations have been assigned long-term ratings by the Advisor.
OUR OUTLOOK ON THE ECONOMY
Surprisingly--given the uncertainty in the economy--inflation has remained
subdued through 1996. However, the market now seems willing to take a
pessimistic outlook, and assume that signs of strong economic growth and higher
interest rates will continue. As such, market participants may interpret
economic reports as more inflationary than they really are.
===========================================================================================================================
EQUIVALENT TAXABLE YIELDS
as of 8-30-96
- ---------------------------------------------------------------------------------------------------------------------------
MUNICIPAL HIGH-YIELD MUNICIPAL
BOND FUND BOND FUND
..............TAXABLE INCOME...............................................................................................
YOUR TAX-EXEMPT YIELD YOUR TAX-EXEMPT YIELD
JOINT SINGLE MARGINAL OF 5.49% IS EQUIVALENT OF 6.90% IS EQUIVALENT
RETURN RETURN TAX RATE TO A TAXABLE YIELD OF: TO A TAXABLE YIELD OF:
...........................................................................................................................
$40,101-96,900 $24,001-58,150 28% 7.63% 9.58%
$96,901-147,700 $58,151-121,300 31% 7.96% 10.00%
$147,701-263,750 $121,301-263,750 36% 8.58% 10.78%
OVER $263,750 OVER $263,750 39.6% 9.09% 11.42%
===========================================================================================================================
Yields are annualized for the 30 days ended 8-30-96, are historical, and will
vary. Each Fund's income may be subject to state and local taxes and, depending
on your tax status, the Alternative Minimum Tax. The chart reflects 1996
marginal federal tax rates before limitations and phase-outs. Individuals with
adjusted gross income in excess of $117,950 should consult their tax advisor to
determine their actual 1996 marginal tax rate.
|
5
GROWTH OF AN
ASSUMED $10,000
INVESTMENT
The charts at right, provided
in accordance with SEC
regulations, compare a
$10,000 investment in each
Fund, made at its
inception, with similar
investments in relevant,
unmanaged, total-return
performance benchmarks.
Results include
the reinvestment of all
dividends and capital gains.
Performance is historical
and does not represent
future results. Investment
returns and principal
value vary, and you
may have a gain or loss
when you sell Fund shares.
THE STRONG MUNICIPAL BOND FUND
from 10-23-86 to 8-31-96
Strong Municipal Lehman Brothers Lipper General Municipal
Bond Fund Municipal Bond Index* Debt Fund Index*
9-86 10,000 10,000 10,000
12-86 10,129 10,216 10,253
12-87 9,949 10,370 10,183
12-88 10,705 11,423 11,370
12-89 11,463 12,656 12,502
12-90 11,995 13,578 13,253
12-91 13,598 15,227 14,849
12-92 15,256 16,568 16,170
12-93 17,052 18,602 18,180
12-94 16,275 17,640 17,083
12-95 18,128 20,721 20,040
8-96 17,745 20,812 19,942
|
THE STRONG HIGH-YIELD MUNICIPAL BOND FUND
from 10-1-93 to 8-31-96
The Strong Lipper High Yield
High-Yield Municipal High-Yield Municipal Municipal Debt
Bond Fund Bond Fund Index+ Funds Index+
9-93 10,000 10,000 10,000
12-93 10,267 10,164 10,141
12-94 10,165 9,600 9,637
12-95 11,651 11,362 11,245
8-96 11,637 11,391 11,238
- --------------------------------------------------------------------------------
6
|
AVERAGE ANNUAL
TOTAL RETURNS (1)
as of 8-31-96
1-year
2.44%
5-year
6.57%
Since inception
(on 10-23-86)
5.99%
AVERAGE ANNUAL
TOTAL RETURNS (1)
as of 8-31-96
1-year
4.44%
2-year
5.99%
Since inception
(on 10-1-93)
5.33%
|
We believe the sustainability of this year's economic strength is questionable,
given the rise in long-term interest rates. If the economy continues to show
strength, it appears that the Federal Reserve Board will respond by raising
short-term interest rates in order to avoid higher inflation. Although the Fed
has so far held off on raising interest rates, it is quite possible it may be
forced to tighten before year end.
[PHOTO OF MARY-KAY H. BOURBULAS]
Given the uncertainty in the market, we have positioned the Funds' durations
near their benchmarks. We expect that the market will trade in a range, and
until the economy establishes a clearer direction, we believe the best approach
is to maintain the Funds' durations close to neutral.
Thank you for your investment. We appreciate the confidence you've shown in us
to manage a portion of your investment portfolio.
Sincerely,
/s/Mary-Kay H. Bourbulas
Mary-Kay H. Bourbulas
Portfolio Manager
|
Strong Municipal Bond Fund
Strong High-Yield Municipal Bond Fund
* The Lehman Brothers Municipal Bond Index is an unmanaged index generally
representative of the investment-grade tax-exempt bond market. The Lipper
General Municipal Debt Funds Index is an equally-weighted performance index
of the largest qualifying funds in this Lipper category. To equalize the
time periods, the indices' performance was prorated for the month of
October, 1986. Source of the Lehman index data is Micropal. Source of the
Lipper index data is Lipper Analytical Services, Inc.
+ The High-Yield Municipal Bond Fund Index is comprised of the Lehman
Brothers Baa Municipal Bond Index from inception through December 31, 1995,
and the Lehman Brothers High-Yield Municipal Bond Index (which was
instituted on 1-1-96) from January 1, 1996 to present. The Lehman Brothers
Baa Municipal Bond Index is an unmanaged index generally representative of
the performance of municipal bonds rated Baa. The Lehman Brothers
High-Yield Municipal Bond Index is an unmanaged index generally
representative of the performance of municipal bonds rated below Baa. The
Lipper High Yield Municipal Debt Funds Index is an equally-weighted
performance index of the largest qualifying funds in this Lipper category.
Source of the High-Yield Index data is Lehman Brothers. Source of the
Lipper index data is Lipper Analytical Services, Inc.
1 Average annual total return and total return measure change in the value of
an investment in the Fund, assuming reinvestment of all dividends and
capital gains. Average annual total return reflects annualized change,
while total return reflects aggregate change.
7
SCHEDULES OF INVESTMENTS IN SECURITIES August 31, 1996
- --------------------------------------------------------------------------------
STRONG SHORT-TERM MUNICIPAL BOND FUND
PRINCIPAL VALUE
AMOUNT (NOTE 2)
(In Thousands) (In Thousands)
- --------------------------------------------------------------------------------
MUNICIPAL BONDS 96.3%
ARIZONA 1.9%
Phoenix, Arizona IDA Hospital Revenue - John C.
Lincoln Hospital and Health Center Project,
4.65%, Due 12/01/99 $ 675 $ 665
Phoenix, Arizona Municipal Housing Revenue
Refunding - Fillmore Gardens and Sunnyslope
Manor - Section 8 Assisted Senior Housing
Project, 5.95%, Due 6/01/05 1,865 1,888
-----
2,553
CALIFORNIA 3.1%
California Health Facilities Financing Authority
Hospital Revenue - Downey Community
Hospital, 4.90%, Due 5/15/00 2,325 2,296
Sacramento County, California MFHR Refunding -
Fairways II Apartments, 5.35%, Due 8/01/25 1,980 1,987
-----
4,283
COLORADO 1.0%
Arapahoe County, Colorado E-470 Public Highway
Authority Capital Improvement Trust Fund
Highway Revenue, Zero %, Due 8/31/03 500 321
Denver, Colorado City and County Airport System
Revenue, 7.50%, Due 11/15/25 1,000 1,044
-----
1,365
CONNECTICUT 1.1%
Connecticut IDA - The Olympic Hotel Corporation
Project, 6.95%, Due 8/01/03 1,492 1,512
DISTRICT OF COLUMBIA 4.4%
District of Columbia GO Refunding, 4.75%,
Due 6/01/03 2,960 2,879
District of Columbia Hospital Revenue Refunding -
Medlantic Healthcare Group, Inc., 6.50%,
Due 8/15/02 2,925 3,042
-----
5,921
FLORIDA 1.5%
Florida Housing Finance Agency MFMR -
Hammocks Place Project, 6.25%, Due 12/01/06 2,000 2,102
GUAM 9.6%
Guam Airport Authority General Revenue:
5.80%, Due 10/01/99 1,450 1,468
6.00%, Due 10/01/00 (c) 1,100 1,119
6.40%, Due 10/01/05 6,700 6,884
Guam Government GO, 5.70%, Due 9/01/03 3,630 3,639
-----
13,110
ILLINOIS 3.1%
Collinsville, Illinois Madison County IDR
Refunding - Drury Inn-Collinsville Project,
5.25%, Due 11/01/98 725 725
Illinois DFA IDR - Engis Corporation Project,
7.55%, Due 10/01/97 275 278
Illinois Educational Facilities Authority Revenue -
Lewis University Project:
4.50%, Due 10/01/99 900 882
5.30%, Due 10/01/04 1,390 1,343
Illinois Health Facilities Authority Revenue -
Trinity Medical Center Project, 6.15% Due 7/01/98 1,000 1,004
-----
4,232
IOWA 6.2%
Cedar Rapids, Iowa First Mortgage Revenue -
Cottage Grove Place Project, 7.25%, Due 7/01/02 6,000 5,985
Iowa Finance Authority Mortgage Revenue
Refunding - Friendship Village Project, 4.95%,
Due 11/01/00 2,500 2,478
-----
8,463
KANSAS 4.7%
Kansas DFA MFHR Refunding - Woodridge
Apartments Project, 5.90%, Due 12/01/20 6,285 6,379
KENTUCKY 2.4%
Mount Sterling, Kentucky League of Cities
Funding Trust Lease Program Revenue,
5.625%, Due 3/01/03 3,250 3,287
LOUISIANA 0.4%
Louisiana Public Facilities Authority Student
Loan Revenue, 6.75%, Due 9/01/06 525 552
MASSACHUSETTS 11.6%
Boston, Massachusetts IDFA First Mortgage
Revenue - Springhouse Project, 7.50%,
Due 1/01/98 3,750 3,754
Massachusetts Education Loan Authority
Education Loan Revenue, 7.45%, Due 1/01/02 1,545 1,613
Massachusetts Industrial Finance Agency
Refunding Revenue - Emerson College Issue,
8.50%, Due 1/01/03 5,000 5,406
Massachusetts Industrial Finance Agency Water
Treatment Revenue - Massachusetts-American
Hingham Project, 6.25%, Due 12/01/10 4,925 5,005
------
15,778
MICHIGAN 1.8%
Flint, Michigan Hospital Building Authority
Revenue Refunding - Hurley Medical Center:
5.75%, Due 7/01/03 1,000 980
6.00%, Due 7/01/04 1,005 982
6.00%, Due 7/01/05 510 493
-----
2,455
MISSISSIPPI 3.9%
Mississippi Higher Education Assistance
Corporation Student Loan Revenue:
5.60%, Due 9/01/04 2,505 2,539
5.80%, Due 9/01/06 2,050 2,078
Prentiss County, Mississippi Hospital Revenue,
5.40%, Due 12/01/97 680 683
-----
5,300
NEW JERSEY 1.2%
New Jersey Health Care Facilities Financing
Authority Revenue - Southern Ocean County
Hospital Project, 5.75%, Due 7/01/01 1,700 1,689
OHIO 5.8%
Cleveland, Ohio Energy Conservation
Improvement GO:
6.53%, Due 3/15/00 650 678
6.53%, Due 9/15/00 670 702
6.53%, Due 3/15/01 690 724
6.53%, Due 9/15/01 715 753
6.53%, Due 3/15/02 740 779
6.53%, Due 9/15/02 760 804
6.53%, Due 3/15/03 785 828
6.53%, Due 9/15/03 815 863
6.53%, Due 3/15/04 840 887
6.53%, Due 9/15/04 865 919
-----
7,937
OREGON 6.7%
Hillsboro, Oregon Hospital Facility Authority
Revenue and Advance Refunding - Tuality
Heathcare Project, 4.80%, Due 10/01/00 9,190 9,087
|
See notes to financial statements.
8
- --------------------------------------------------------------------------------
STRONG SHORT-TERM MUNICIPAL BOND FUND (continued)
PRINCIPAL VALUE
AMOUNT (NOTE 2)
(In Thousands)(In Thousands)
- --------------------------------------------------------------------------------
PENNSYLVANIA 7.3%
Clarion County, Pennsylvania Hospital Authority
Revenue - Clarion Hospital Project, 8.10%,
Due 7/01/12 $ 1,500 $ 1,592
Delaware County, Pennsylvania Authority Health
Facilities Revenue - Mercy Health Corporation of
Southeastern Pennsylvania Obligated Group,
6.00%, Due 11/15/07 5,000 4,875
Horizon Hospital System Authority of Pennsylvania
Hospital Revenue, 5.40%, Due 5/15/01 2,180 2,166
Philadelphia, Pennsylvania Hospitals and Higher
Education Facilities Authority Hospital Revenue,
5.35%, Due 7/01/99 1,335 1,340
-----
9,973
SOUTH DAKOTA 4.7%
South Dakota EDFA EDR Refunding - Pooled Loan
Program - Technical Ordinance Project, 5.75%,
Due 4/01/07 1,690 1,772
South Dakota Student Loan Corporation Student
Loan Revenue, 7.35%, Due 8/01/98 4,565 4,685
-----
6,457
TEXAS 9.3%
Brazos, Texas Higher Education Authority, Inc.
Student Loan Revenue Refunding:
5.95%, Due 6/01/02 (c) 2,595 2,696
6.50%, Due 3/01/99 1,345 1,379
Hidalgo County, Texas Health Services Corporation
Hospital Revenue - Mission Hospital, Inc. Project,
5.75%, Due 8/15/01 1,760 1,745
Trinity River Authority Refunding - Texas
Industries, Inc. Project, 6.1875%, Due 9/01/07 1,790 1,777
Trinity River Authority Refunding - Texas
Industries, Inc. Project, Series A, 6.1875%,
Due 9/01/07 5,100 5,062
------
12,659
VIRGINIA 0.4%
Smyth County, Virginia IDA IDR - Utility Trailer
Manufacturing Company Project, 8.00%,
Due 10/01/98 500 506
WASHINGTON 4.2%
Washington Health Care Facilities Authority
Revenue - Sisters of Providence, 5.375%,
Due 10/01/00 5,600 5,670
-------
TOTAL MUNICIPAL BONDS (COST $130,345) 131,270
|
SHORT-TERM INVESTMENTS (a) 2.5%
WEEKLY VARIABLE RATE PUT BONDS 1.1%
INDIANA
Portage, Indiana EDR 1,385 1,385
DAILY VARIABLE RATE PUT BONDS 1.4%
LOUISIANA 0.7%
Calcasieu Parish, Louisiana IDB Environmental
Revenue - Citgo Petroleum Corporation Project 1,000 1,000
NEVADA 0.7%
Clark County, Nevada IDR - Nevada Cogeneration
Association 2 Project 1,000 1,000
-------
2,000
-------
TOTAL SHORT-TERM INVESTMENTS (COST $3,385) 3,385
-------
TOTAL INVESTMENTS IN SECURITIES
(COST $133,730) 98.8% 134,655
-------
Other Assets and Liabilities, Net 1.2% 1,694
-------
NET ASSETS 100.0% $136,349
========
- --------------------------------------------------------------------------------
FUTURES
- -------
UNDERLYING
FACE AMOUNT UNREALIZED
EXPIRATION AT VALUE DEPRECIATION
|
DATE (In Thousands) (In Thousands)
Sold:
80 Municipal Bond Index Futures 9/96 ($9,093) ($304)
- --------------------------------------------------------------------------------
STRONG MUNICIPAL BOND FUND
PRINCIPAL VALUE
AMOUNT (NOTE 2)
(In Thousands)(In Thousands)
- --------------------------------------------------------------------------------
MUNICIPAL BONDS 92.8%
ALABAMA 2.0%
Alabama HFA SFMR, 6.40%, Due 10/01/20 $ 1,000 $ 1,009
Courtland, Alabama IDB Solid Waste Disposal
Revenue - Champion International Corporation
Project, 6.375%, Due 3/01/29 2,000 1,927
Tuscaloosa, Alabama GO, 6.75%, Due 7/01/20 2,000 2,130
-----
5,066
ALASKA 2.0%
Alaska HFC Capital Appreciation Mortgage
Revenue, Zero %, Due 12/01/27 (b) 8,500 1,147
Valdez, Alaska Marine Terminal Revenue
Refunding - BP Pipelines (Alaska), Inc. Project,
5.65%, Due 12/01/28 4,000 3,765
-----
4,912
ARIZONA 1.8%
Phoenix, Arizona IDA Mortgage Revenue
Refunding - Christian Care Retirement
Apartments, Inc. Project, 6.25%, Due 1/01/16 4,740 4,432
CALIFORNIA 9.1%
California Tri-City Housing Finance Agency
SFMR - FNMA and GNMA Collateralized,
6.45%, Due 12/01/28 2,000 2,010
Foothill/Eastern Transportation Corridor Agency
Toll Road Revenue:
Zero %, Due 1/01/28 10,560 1,280
Zero %, Due 1/01/30 4,110 437
La Habra Heights, California Citywide Street
Assessment District No. 1 Limited Obligation
Improvement, 5.80%, Due 9/02/11 1,070 1,031
Los Angeles, California Department of Water
and Power Electric Plant Revenue, 5.00%,
Due 10/15/33 1,000 850
Los Angeles, California MFHR - Earthquake
Rehabilitation Projects, 5.85%, Due 12/01/27 1,535 1,548
Los Angeles County, California Public Works
Financing Authority Lease Revenue - Multiple
Capital Facilities Project IV, 4.75%,
Due 12/01/10 4,500 4,095
Los Angeles County, California Public Works
Financing Authority Lease Revenue
Refunding - Los Angeles County 1996 Master
Refunding Project:
5.25%, Due 9/01/14 1,000 930
5.25%, Due 9/01/15 500 461
Port Hueneme, California Redevelopment Agency
Tax Allocation Refunding - Central Community
Project, 5.50%, Due 5/01/14 1,800 1,755
Rancho, California Water District Financing
Authority Revenue Refunding, 4.875%,
Due 8/01/15 2,020 1,762
San Jose, California Redevelopment Agency Tax
Allocation - Merged Area Redevelopment Project,
4.75%, Due 8/01/24 2,000 1,680
|
See notes to financial statements.
9
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) August 31, 1996
- --------------------------------------------------------------------------------
STRONG MUNICIPAL BOND FUND (continued)
PRINCIPAL VALUE
AMOUNT (NOTE 2)
(In Thousands)(In Thousands)
- --------------------------------------------------------------------------------
Student Education Loan Marketing Corporation
Student Loan Program Revenue - California
Senior Subordinate, 7.00%, Due 7/01/10 $ 3,000 $ 3,056
University of California Refunding Revenue -
Multiple Purpose Projects, 5.00%, Due 9/01/13 1,805 1,636
-----
22,531
COLORADO 8.6%
Arapahoe County, Colorado E-470 Public Highway
Authority Capital Improvement Trust Fund
Highway Revenue, Zero %, Due 8/31/10 15,000 5,831
Castle Rock Ranch, Colorado Public Improvements
Authority Public Facilities Revenue, 6.25%,
Due 12/01/17 5,000 4,944
Denver, Colorado City and County Airport System
Revenue:
6.75%, Due 11/15/22 1,500 1,584
7.00%, Due 11/15/25 6,035 6,148
7.50%, Due 11/15/25 2,655 2,771
-----
21,278
DISTRICT OF COLUMBIA 0.6%
District of Columbia GO, 6.75%, Due 6/01/08 1,500 1,579
FLORIDA 2.6%
Dade County, Florida School District GO
Refunding School, 4.75%, Due 7/15/09 1,000 921
Jacksonville, Florida PCR Refunding, 5.70%,
Due 8/01/31 2,000 1,928
Lake County, Florida Village Center Community
Development District Utility Revenue, 5.00%,
Due 11/01/13 1,615 1,476
Manatee County, Florida HFA SFMR, 7.45%,
Due 5/01/27 1,000 1,090
St. John's County, Florida Water and Sewer Revenue
Refunding, 5.50%, Due 6/01/26 1,000 951
---
6,366
GEORGIA 1.6%
Atlanta, Georgia Water and Sewer Revenue, 4.75%,
Due 1/01/23 2,875 2,393
Savannah, Georgia Hospital Authority Revenue
Refunding and Improvement - Candler Hospital,
7.00%, Due 1/01/23 1,470 1,494
-----
3,887
IDAHO 0.8%
Idaho Housing Agency SFMR, 6.45%, Due 7/01/27 2,000 2,028
ILLINOIS 11.2%
Chicago, Illinois O'Hare International Airport
International Terminal Special Revenue, 6.50%,
Due 1/01/18 1,440 1,454
Chicago, Illinois Wastewater Transmission
Revenue, 5.125%, Due 1/01/25 5,270 4,651
Cook and DuPage Counties, Illinois
Lemont-Bromberek Combined School District
No. 113A, Capital Appreciation School Building:
Zero %, Due 12/01/09 3,320 1,535
Zero %, Due 12/01/10 3,485 1,503
Granite City, Illinois Hospital Revenue Refunding -
Saint Elizabeth Medical Center, 8.125%,
Due 6/01/08 6,000 6,173
Illinois Health Facilities Authority Revenue -
Trinity Medical Center Project, 7.00%, Due 7/01/12 2,000 2,153
Illinois Metropolitan Pier and Exposition Authority
Capital Appreciation - McCormick Place
Expansion Project, Zero%, Due 6/15/16 1,250 375
Illinois State Sales Tax Revenue, 5.00%, Due 6/15/16 3,520 3,137
Kane, Cook and DuPage Counties, Illinois School
District No. U-46 Capital Appreciation School
Building:
Zero %, Due 1/01/11 (c) 1,800 758
Zero %, Due 1/01/13 2,500 934
Will County, Illinois Exempt Facilities Revenue -
Mobil Oil Refining Corporation Project, 6.40%,
Due 4/01/26 5,000 5,050
-----
27,723
INDIANA 4.3%
Indiana Health Facility Financing Authority
Hospital Revenue - Jackson County Schneck
Memorial Hospital Project, 7.50%, Due 2/15/22 7,790 8,170
Marion County, Indiana Beech Grove Schools
Building Corporation First Mortgage Refunding,
6.25%, Due 7/05/16 2,265 2,350
-----
10,520
IOWA 2.0%
Iowa Finance Authority Hospital Facility
Refunding and Revenue - Jennie Edmundson
Memorial Hospital Project, 7.65%, Due 11/01/16 4,850 5,038
LOUISIANA 0.7%
Orleans Parish, Louisiana Parishwide School
District GO, 7.50%, Due 9/01/20 1,500 1,704
MARYLAND 0.4%
Maryland Health and Higher Educational Facilities
Authority Refunding Revenue - Mercy Medical
Center Project, 6.50%, Due 7/01/13 1,000 1,068
MASSACHUSETTS 2.5%
Massachusetts Municipal Wholesale Electric
Company Power Supply System Revenue:
4.75%, Due 7/01/10 5,000 4,488
4.75%, Due 7/01/11 2,000 1,777
-----
6,265
MINNESOTA 3.0%
Southern Minnesota Municipal Power Agency
Power Supply Systems Revenue, 4.75%,
Due 1/01/16 8,400 7,308
MISSISSIPPI 0.4%
Mississippi Business Finance Corporation Port of
Gulfport Revenue - E.I. du Pont de Nemours and
Company Project, 7.15%, Due 5/01/16 1,000 1,085
NEW JERSEY 2.7%
New Jersey Housing and Mortgage Finance Agency
Home Buyer Revenue, 6.95%, Due 10/01/22 1,250 1,292
New Jersey Turnpike Authority Revenue, 6.50%,
Due 1/01/16 4,000 4,375
New Jersey Turnpike Authority Revenue, 6.50%,
Due 1/01/16 1,000 1,094
-----
6,761
NEW YORK 3.0%
Housing Corporation of New York Revenue
Refunding, 5.00%, Due 11/01/13 2,000 1,803
New York Urban Development Corporation
Revenue, 5.50%, Due 4/01/19 1,500 1,423
New York Urban Development Corporation
Revenue - University Facilities Grants Project,
5.875%, Due 1/01/21 1,045 1,002
Niagara Falls, New York Bridge Commission Toll
Bridge System Revenue, 5.25%, Due 10/01/15 3,400 3,226
-----
7,454
|
See notes to financial statements.
10
- --------------------------------------------------------------------------------
STRONG MUNICIPAL BOND FUND (continued)
PRINCIPAL VALUE
AMOUNT (NOTE 2)
(In Thousands)(In Thousands)
- --------------------------------------------------------------------------------
NORTH CAROLINA 1.5%
Fayetteville, North Carolina Public Works
Commission Revenue Refunding, 4.75%,
Due 3/01/14 $ 3,100 $ 2,732
North Carolina Housing Finance Agency Single
Family Revenue, 6.15%, Due 3/01/11 1,000 1,003
-----
3,735
OHIO 3.9%
Dayton, Ohio Special Facilities Revenue Refunding -
Emery Air Freight Corporation and Emery
Worldwide Airlines, Inc., 6.05%, Due 10/01/09 (b) 1,500 1,489
Eaton, Ohio IDR Refunding - Baxter International,
Inc. Projects, 6.50%, Due 12/01/12 1,600 1,652
Medina County, Ohio EDR MFHR - Camelot Place,
Ltd. Project, 8.375%, Due 10/01/23 3,800 3,662
Ohio Housing Finance Agency Residential
Mortgage Revenue, 5.95%, Due 9/01/27 3,000 2,932
-----
9,735
OKLAHOMA 3.8%
Oklahoma Ordnance Works Authority PCR
Refunding - Ralston Purina Company Project,
6.30%, Due 9/01/15 (b) 1,500 1,487
Shawnee, Oklahoma Hospital Authority Revenue -
MidAmerica HealthCare, Inc., 8.00%, Due 4/01/04 3,030 3,219
Tulsa, Oklahoma Trustees Municipal Airport
Trust - American Airlines, Inc., 7.375%,
Due 12/01/20 4,490 4,726
-----
9,432
OREGON 0.4%
Washington County, Oregon MFHR - Bethany
Meadows Project, 6.25%, Due 8/01/10 1,000 980
PENNSYLVANIA 3.3%
Blair County, Pennsylvania Hospital Authority First
Mortgage Revenue - Mercy Hospital Sublessee,
8.125%, Due 2/01/14 6,000 6,278
Lehigh County, Pennsylvania IDA PCR Refunding -
Pennsylvania Power & Light Company Project,
6.40%, Due 11/01/21 1,765 1,833
-----
8,111
SOUTH CAROLINA 1.2%
Charleston County, South Carolina Resource
Recovery Revenue - Foster Wheeler Charleston
Resource Recovery, Inc. Project, 9.25%,
Due 1/01/10 1,250 1,345
Kershaw County, South Carolina Hospital Facilities
Revenue Refunding - Kershaw County Memorial
Hospital Project, 8.00%, Due 9/15/17 1,435 1,503
-----
2,848
SOUTH DAKOTA 2.7%
South Dakota HDA Homeownership Mortgage,
6.40%, Due 5/01/16 1,000 1,006
South Dakota Student Loan Corporation Student
Loan Revenue, 7.625%, Due 8/01/06 5,250 5,552
-----
6,558
TENNESSEE 0.4%
Nashville and Davidson County, Tennessee
Metropolitan Government Health and
Educational Facilities Board - Meharry Medical
College Project, 5.00%, Due 12/01/24 (b) 1,000 879
TEXAS 14.2%
Austin, Texas Combined Utility Systems Revenue
Refunding, 6.50%, Due 11/15/05 (b) 1,000 1,042
El Paso, Texas Property Finance Authority, Inc.
SFMR - GNMA Mortgage-Backed, 8.70%,
Due 12/01/18 700 751
Grape Creek, Texas Pulliam Independent School
District Public Facility Corporation School
Facility Lease Revenue:
7.00%, Due 5/15/10 1,100 1,096
7.25%, Due 5/15/21 1,300 1,303
Guadalupe-Blanco River Authority, Texas Sewage
and Solid Waste Disposal Facility - E.I. du Pont
de Nemours and Company Project, 6.40%,
Due 4/01/26 4,000 4,035
Harris County, Texas IDC Marine Terminal
Revenue Refunding - GATX Terminals
Corporation Project, 6.95%, Due 2/01/22 1,750 1,833
Harris County, Texas Toll Road Senior Lien
Revenue, 5.00%, Due 8/15/16 3,900 3,495
Lufkin, Texas Health Facilities Development
Corporation Health System Revenue and
Refunding - Memorial Health System of East
Texas, 6.875%, Due 2/15/26 3,000 3,000
North Central Texas Health Facilities Development
Corporation - Tri-City Health Centre, Inc.
Project, 9.50%, Due 5/01/21 10,000 7,500
Nueces County, Texas Port of Corpus Christi
Authority PCR - Hoechst Celanese Corporation
Project, 6.875%, Due 4/01/17 5,000 5,244
Port Arthur, Texas HFC Mortgage Revenue
Refunding - FHA Insured Mortgage Loans - Port
Arthur UDAG Projects, 6.40%, Due 1/01/28 3,565 3,610
Ranger, Texas Housing Corporation MFMR
Refunding - FHA Insured Mortgage Loan -
Ranger Apartments Project, 8.80%, Due 3/01/24 1,160 1,279
Southeast Texas HFC SFMR, Zero %, Due 9/01/11 25 5
Tarrant County, Texas Keller Independent School
District Unlimited Tax School Building and
Refunding, Zero %, Due 8/15/16 2,575 789
---
34,982
UTAH 0.6%
Intermountain Power Agency Power Supply
Revenue Refunding, 6.50%, Due 7/01/11 (b) 1,500 1,581
VIRGINIA 0.6%
Westmoreland County, Virginia IDA First Mortgage
Health Facilities Revenue - Mary Washington
Health Care Center Project, 7.00%, Due 2/01/23 1,500 1,588
WISCONSIN 0.9%
Wisconsin Health and Educational Facilities
Authority Revenue - Howard Young Medical
Center, Inc. Project, 5.75%, Due 8/15/13 1,250 1,189
Wisconsin Health and Educational Facilities
Authority Revenue - Sisters of the Sorrowful
Mother - Ministry Corporation Project, 5.40%,
Due 8/15/13 1,140 1,069
-----
2,258
-----
TOTAL MUNICIPAL BONDS (COST $233,377) 229,692
|
SHORT-TERM INVESTMENTS (a) 6.1%
WEEKLY VARIABLE RATE PUT BONDS 0.5%
TEXAS
Rockwall, Texas IDC IDR - Columbia Extrusion
Corporation Project 1,335 1,335
DAILY VARIABLE RATE PUT BONDS 5.6%
DISTRICT OF COLUMBIA 0.4%
District of Columbia Refunding GO 1,000 1,000
ILLINOIS 1.6%
Chicago, Illinois O'Hare International Airport
Revenue 4,000 4,000
|
See notes to financial statements.
11
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) August 31, 1996
- --------------------------------------------------------------------------------
STRONG MUNICIPAL BOND FUND (continued)
PRINCIPAL VALUE
AMOUNT (NOTE 2)
(In Thousands)(In Thousands)
- --------------------------------------------------------------------------------
INDIANA 2.7%
Jasper County, Indiana PCR - Northern Indiana
Public Service Company Project $ 6,500 $ 6,500
NEW YORK 0.5%
New York, New York GO 1,200 1,200
WYOMING 0.4%
Lincoln County, Wyoming PCR 1,000 1,000
-----
13,700
------
TOTAL SHORT-TERM INVESTMENTS
(COST $15,035) 15,035
------
TOTAL INVESTMENTS IN SECURITIES
(COST $248,412) 98.9% 244,727
Other Assets and Liabilities, Net 1.1% 2,610
-----
NET ASSETS 100.0% $247,337
========
FUTURES
- -------
UNDERLYING
FACE AMOUNT UNREALIZED
EXPIRATION AT VALUE DEPRECIATION
DATE (In Thousands) (In Thousands)
- --------------------------------------------------------------------------------
Sold:
183 Municipal Bond Index Futures 9/96 ($20,799) ($788)
- --------------------------------------------------------------------------------
STRONG HIGH-YIELD MUNICIPAL BOND FUND
PRINCIPAL VALUE
AMOUNT (NOTE 2)
(In Thousands) (In Thousands)
- --------------------------------------------------------------------------------
|
MUNICIPAL BONDS 95.8%
ALASKA 3.8%
Seward, Alaska Revenue - Alaska Sealife Center
Project, 7.65%, Due 10/01/16 $ 3,500 $ 3,496
Valdez, Alaska Marine Terminal Revenue
Refunding - BP Pipelines (Alaska), Inc. Project,
5.65%, Due 12/01/28 5,910 5,563
-----
9,059
CALIFORNIA 3.7%
California Department of Water Resources -
Central Valley Project, 4.75%, Due 12/01/25 1,200 985
Foothill/Eastern Transportation Corridor Agency
Toll Road Revenue, Zero %, Due 1/01/28 24,000 2,910
Orange County, California San Joaquin Hills
Transportation Corridor Agency Junior Lien
Toll Road Revenue, Zero %, Due 1/01/16 4,435 1,231
San Jose, California Redevelopment Agency Tax
Allocation - Merged Area Redevelopment Project,
4.75%, Due 8/01/24 2,000 1,680
Southern California Public Power Authority San
Juan Power Project Revenue, 5.00%, Due 1/01/20 1,090 963
West Covina, California Redevelopment Agency
Community Facilities District No. 1989-1 Special
Tax Refunding - Fashion Plaza Project, 5.75%,
Due 9/01/09 1,000 974
---
8,743
COLORADO 2.2%
Arapahoe County, Colorado E-470 Public Highway
Authority Capital Improvement Trust Fund
Highway Revenue, Zero %, Due 8/31/15 20,000 5,225
DELAWARE 0.3%
Delaware EDA First Mortgage Revenue - Gilpin
Hall Project, 7.375%, Due 7/01/15 750 741
|
FLORIDA 2.1%
Orange County, Florida Health Facilities Authority
First Mortgage Revenue - RHA/Princeton
Hospital, Inc. Project, 9.00%, Due 7/01/21 5,000 4,000
Polk County, Florida HFA Subordinated Revenue -
Lake Wales Gardens Project, Zero %, Due 4/01/20 7,125 908
---
4,908
GEORGIA 6.5%
Atlanta, Georgia Urban Residential Finance
Authority MFHR - Franciscan Club Apartments
Projects, 7.75%, Due 4/01/22 4,840 3,388
Atlanta, Georgia Water and Sewer Revenue, 4.75%,
Due 1/01/23 (c) 2,000 1,665
Dekalb County, Georgia Residential Care Facilities
for the Elderly Authority First Lien Revenue -
King's Bridge Retirement Center, Inc. Project:
8.00%, Due 7/01/06 650 660
8.15%, Due 7/01/16 2,380 2,422
8.25%, Due 7/01/26 5,250 5,342
Savannah, Georgia Hospital Authority Revenue
Refunding and Improvement - Candler Hospital,
7.00%, Due 1/01/23 2,000 2,033
-----
15,510
ILLINOIS 4.7%
Granite City, Illinois Hospital Revenue Refunding -
Saint Elizabeth Medical Center, 8.125%,
Due 6/01/08 1,030 1,060
Illinois DFA Community Rehabilitation Providers
Facilities Acquisition Program Revenue:
7.25%, Due 3/01/04 1,015 1,016
7.50%, Due 3/01/14 3,070 2,978
Illinois Metropolitan Pier and Exposition Authority
Refunding - McCormick Place Expansion Project,
7.00%, Due 7/01/26 1,000 1,063
Riverdale, Illinois Environmental Improvement
Revenue - Acme Metals, Inc. Project, 7.95%,
Due 4/01/25 5,000 5,006
-----
11,123
INDIANA 5.5%
Indiana IDFA PCR Refunding - Inland Steel
Company Project, 7.25%, Due 11/01/11 5,000 5,125
Indianapolis, Indiana EDR MFHR - Post Pointe
Apartments Project:
8.20%, Due 3/01/01 270 271
8.30%, Due 3/01/06 480 482
8.40%, Due 3/01/11 710 714
8.75%, Due 3/01/27 6,540 6,581
-----
13,173
IOWA 7.7%
Cedar Rapids, Iowa First Mortgage Revenue -
Cottage Grove Place Project:
7.25%, Due 7/01/02 6,000 5,985
9.00%, Due 7/01/25 6,000 6,202
Iowa Finance Authority First Mortgage Elder Care
Facility Revenue - Amity Fellowserve-Iowa, Inc.
Project, 8.75%, Due 10/01/25 6,165 6,111
-----
18,298
KENTUCKY 2.4%
Morgantown, Kentucky Solid Waste Disposal
Facilities Revenue - IMCO Recycling, Inc. Project,
7.65%, Due 5/01/16 5,740 5,718
LOUISIANA 2.3%
Louisiana Public Facilities Authority Senior Lien
Revenue - Progressive Healthcare Providers, Inc.
Developmental Centers, 8.00%, Due 1/01/13 5,730 5,465
|
See notes to financial statements.
12
- --------------------------------------------------------------------------------
STRONG HIGH-YIELD MUNICIPAL BOND FUND (continued)
PRINCIPAL VALUE
AMOUNT (NOTE 2)
(In Thousands)(In Thousands)
- --------------------------------------------------------------------------------
MASSACHUSETTS 4.5%
Massachusetts Health and Educational Facilities
Authority Revenue - Saints Memorial Medical
Center:
5.50%, Due 10/01/02 $ 3,500 $ 3,202
5.75%, Due 10/01/06 1,885 1,666
Massachusetts Industrial Finance Agency First
Mortgage Revenue - Evanswood Bethzatha
Corporation Project, 7.875%, Due 1/15/20 2,285 2,285
Massachusetts Municipal Wholesale Electric
Company Power Supply System Revenue, 5.00%,
Due 7/01/17 4,000 3,545
-----
10,698
MINNESOTA 1.5%
Southern Minnesota Municipal Power Agency
Power Supply Systems Revenue, 4.75%,
Due 1/01/16 4,000 3,480
MISSOURI 1.6%
Missouri Health and Educational Facilities
Authority Health Facilities Revenue - National
Benevolent Association - Woodhaven Learning
Center Project, 6.75%, Due 7/01/21 295 295
Saline County, Missouri IDA Hospital Revenue -
John Fitzgibbon Memorial Hospital, Inc. Project,
7.375%, Due 5/01/11 3,550 3,492
-----
3,787
MONTANA 0.5%
Montana Health Facility Authority Health Care
Revenue - Community Medical Center, Inc.
Project, 6.375%, Due 6/01/18 (b) 1,250 1,197
NEW HAMPSHIRE 0.6%
New Hampshire Business Finance Authority
Pollution Control and Solid Waste Disposal
Revenue Refunding - Crown Paper Company
Project, 7.75%, Due 1/01/22 1,000 1,024
New Hampshire Business Finance Authority
Sewage and Solid Waste Disposal Revenue -
Crown Paper Company Project, 7.875%,
Due 7/01/26 500 511
---
1,535
NEW JERSEY 1.6%
New Jersey EDA Senior Mortgage Revenue -
Arbor Glen of Bridgewater Project:
8.00%, Due 5/15/12 1,000 964
8.75%, Due 5/15/26 3,000 2,978
-----
3,942
OHIO 0.9%
East Liverpool, Ohio Hospital Improvement
Revenue - East Liverpool City Hospital Project,
8.00%, Due 10/01/21 1,595 1,677
Medina County, Ohio EDR MFHR - Camelot Place,
Ltd. Project, 8.375%, Due 10/01/23 400 385
---
2,062
OKLAHOMA 0.7%
Oklahoma Ordnance Works Authority Sewage and
Solid Waste Disposal Facilities Revenue - Ralston
Purina Company Project, 6.50%, Due 9/01/26 (b) 1,725 1,708
OREGON 2.2%
Washington County, Oregon MFHR - Bethany
Meadows Project, 6.25%, Due 8/01/13 5,250 5,132
PENNSYLVANIA 14.9%
Bucks County, Pennsylvania IDA CDR - Attleboro
Associates, Ltd. Nursing Facility Project:
8.00%, Due 12/01/05 2,075 2,135
8.25%, Due 6/01/11 3,610 3,741
Delaware County, Pennsylvania Authority Health
Care Facility First Mortgage Revenue -
GF/Longwood Care, Inc. Project:
8.50%, Due 4/15/10 530 523
9.00%, Due 4/15/25 5,860 5,765
Delaware County, Pennsylvania IDA Revenue -
Martins Run Project:
5.40%, Due 12/15/01 1,000 977
6.00%, Due 12/15/06 1,500 1,457
Horizon Hospital System Authority Hospital
Revenue, 6.35%, Due 5/15/16 1,665 1,600
Horsham, Pennsylvania IDA CDA Health Care
Facilities Revenue - GF/Pennsylvania
Properties, Inc. Project:
7.375%, Due 9/01/08 440 420
8.375%, Due 9/01/24 6,000 6,075
Montgomery County, Pennsylvania IDA Retirement
Community Revenue Refunding - G. D. L. Farms
Corporation Project:
6.30%, Due 1/01/13 2,000 1,765
6.50%, Due 1/01/20 4,660 4,083
Montgomery County, Pennsylvania IDA Revenue -
Wordsworth Academy Project, 8.00%,
Due 9/01/24 6,840 6,849
-----
35,390
SOUTH CAROLINA 0.9%
Florence County, South Carolina IDR - Stone
Container Corporation Project, 7.375%,
Due 2/01/07 2,000 2,050
TEXAS 7.9%
DeSoto, Texas IDA IDR - Wintergreen Commercial
Partnership Project, 7.00%, Due 1/01/17 4,702 4,385
Hidalgo County, Texas Health Services Corporation
Hospital Revenue - Mission Hospital, Inc. Project,
6.75%, Due 8/15/16 3,000 2,932
Jefferson County, Texas Health Facilities
Development Corporation Hospital Revenue -
Baptist Health Care System Project:
8.30%, Due 10/01/14 4,600 4,721
8.875%, Due 6/01/21 2,410 2,509
Tarrant County, Texas Water Control and
Improvement District No. 1 Water Revenue
Refunding, 4.50%, Due 3/01/11 5,000 4,363
-----
18,910
UTAH 0.8%
Intermountain Power Agency Power Supply
Revenue Refunding, 5.75%, Due 7/01/19 (b) 2,000 1,877
VIRGINIA 2.0%
Loudoun County, Virginia IDA IDR Refunding -
Dulles Airport Marriott Hotel Project, 7.125%,
Due 09/01/15 5,000 4,881
WEST VIRGINIA 0.9%
Marion County, West Virginia Solid Waste Disposal
Facility Revenue - American Fiber Resources
Project, 9.25%, Due 12/01/11 3,400 2,040
WISCONSIN 11.8%
Adams County, Wisconsin Adams-Friendship
School District GO Refunding, 6.50%,
Due 4/01/15 (b) 1,340 1,452
Brookfield, Wisconsin IDR Refunding - Midway
Motor Lodge Project, 8.40%, Due 4/01/12 5,430 5,769
|
See notes to financial statements.
13
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) August 31, 1996
- --------------------------------------------------------------------------------
STRONG HIGH-YIELD MUNICIPAL BOND FUND (continued)
PRINCIPAL VALUE
AMOUNT (NOTE 2)
(In Thousands)(In Thousands)
- --------------------------------------------------------------------------------
Wisconsin Health and Educational Facilities
Authority Revenue - Aurora Medical Group, Inc.
Project, 9.00%, Due 11/15/25 $ 2,500 $ 2,334
Wisconsin Health and Educational Facilities
Authority Revenue - Fort Atkinson Memorial
Health Services, Inc.:
5.30%, Due 10/01/99 500 500
5.50%, Due 10/01/00 750 751
5.70%, Due 10/01/01 420 421
Wisconsin Health and Educational Facilities
Authority Revenue - National Regency of
New Berlin, Inc. Project:
7.75%, Due 8/15/15 5,000 4,813
8.00%, Due 8/15/25 12,500 11,969
------
28,009
WYOMING 1.3%
Wyoming Community Development Authority
Housing Revenue, 6.55%, Due 6/01/28 3,000 3,008
-----
TOTAL MUNICIPAL BONDS (COST $228,420) 227,669
|
SHORT-TERM INVESTMENTS (a) 3.1%
WEEKLY VARIABLE RATE PUT BOND 1.1%
INDIANA
Portage, Indiana EDR 2,500 2,500
DAILY VARIABLE RATE PUT BONDS 2.0%
NORTH CAROLINA 0.4%
Halifax County, North Carolina Industrial
Facilities and Pollution Control Financing
Authority Revenue 1,000 1,000
OREGON 1.6%
Port Morrow, Oregon Revenue - Portland General
Electric Company Project 3,800 3,800
-----
4,800
-----
TOTAL SHORT-TERM INVESTMENTS (COST $7,300) 7,300
-----
TOTAL INVESTMENTS IN SECURITIES
(COST $235,720) 98.9% 234,969
Other Assets and Liabilities, Net 1.1% 2,672
-----
NET ASSETS 100.0% $237,641
========
FUTURES
- -------
UNDERLYING
FACE AMOUNT UNREALIZED
EXPIRATION AT VALUE DEPRECIATION
|
DATE (In Thousands) (In Thousands)
Sold:
74 Municipal Bond Index Futures 9/96 ($8,411) ($320)
LEGEND
(a)Short-term investments include any security which has a maturity of less than
one year.
(b)When-Issued security.
(c)All or a portion of security pledged to cover margin requirements for futures
contracts.
All costs are stated in thousands.
Percentages are stated as a percent of net assets.
ABBREVIATIONS
The following is a list of abbreviations that may be used in the Schedules of
Investments in Securities:
BAN -- Bond Anticipation Notes
CDA -- Commercial Development Authority
CDR -- Commercial Development Revenue
COP -- Certificates of Participation
DFA -- Development Finance Authority
EDA -- Economic Development Authority
EDC -- Economic Development Corporation
EDFA -- Economic Development Finance Authority
EDR -- Economic Development Revenue
GO -- General Obligation
HDA -- Housing Development Authority
HDC -- Housing Development Corporation
HFA -- Housing Finance Authority
HFC -- Housing Finance Corporation
IBA -- Industrial Building Authority
IBR -- Industrial Building Revenue
IDA -- Industrial Development Authority
IDB -- Industrial Development Board
IDC --Industrial Development Corporation
IDFA -- Industrial Development Finance Authority
IDR -- Industrial Development Revenue
IFA -- Investment Finance Authority
MFHR -- Multi-Family Housing Revenue
MFMR -- Multi-Family Mortgage Revenue
PCR -- Pollution Control Revenue
RAN -- Revenue Anticipation Notes
SFHR -- Single Family Housing Revenue
SFMR -- Single Family Mortgage Revenue
TAN -- Tax Anticipation Notes
TRAN -- Tax and Revenue Anticipation Notes
See notes to financial statements.
14
STATEMENTS OF OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------
(In Thousands)
STRONG SHORT-TERM STRONG MUNICIPAL
MUNICIPAL BOND FUND BOND FUND
---------------------------- ----------------------------
PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED
AUG. 31, 1996 DEC. 31, 1995 AUG. 31, 1996 DEC. 31, 1995
------------- ------------- ------------- -------------
(NOTE 1) (NOTE 1)
INTEREST INCOME $5,242 $8,139 $ 9,555 $17,629
EXPENSES:
Investment Advisory Fees 450 727 926 1,704
Custodian Fees 9 26 14 40
Shareholder Servicing Costs 101 179 237 407
Reports to Shareholders 39 60 66 113
Other 61 112 50 106
-- --- -- ---
Total Expenses 660 1,104 1,293 2,370
--- ----- ----- -----
NET INVESTMENT INCOME 4,582 7,035 8,262 15,259
REALIZED AND UNREALIZED GAIN (LOSS):
Net Realized Gain (Loss) on:
Investments 247 3,067 (4,192) 17,409
Futures Contracts and Options 235 (8,579) -- (9,194)
Change in Unrealized Appreciation/Depreciation on:
Investments (1,853) 6,073 (8,618) 6,852
Futures Contracts and Options (119) 136 (788) --
---- --- ------ ------
NET GAIN (LOSS) (1,490) 697 (13,598) 15,067
------ --- ------- ------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $3,092 $7,732 ($ 5,336) $30,326
====== ====== ======== =======
|
STRONG HIGH-YIELD
MUNICIPAL BOND FUND
----------------------------
PERIOD ENDED YEAR ENDED
AUG. 31, 1996 DEC. 31, 1995
------------- -------------
(NOTE 1)
INTEREST INCOME $12,505 $14,217
EXPENSES:
Investment Advisory Fees 981 1,137
Custodian Fees 14 23
Shareholder Servicing Costs 113 143
Reports to Shareholders 31 54
Registration Fees 28 119
Other 53 39
-- --
Total Expenses before Waivers and Absorptions 1,220 1,515
Voluntary Expense Waivers and Absorptions by Advisor -- (798)
----- ----
Expenses, Net 1,220 717
----- ---
NET INVESTMENT INCOME 11,285 13,500
REALIZED AND UNREALIZED GAIN (LOSS):
Net Realized Gain (Loss) on:
Investments (3,285) 1,648
Futures Contracts and Options -- (2,705)
Change in Unrealized Appreciation/Depreciation on:
Investments (8,695) 12,823
Futures Contracts and Options (320) (14)
---- ---
NET GAIN (LOSS) (12,300) 11,752
------- ------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($ 1,015) $25,252
======== =======
|
15
See notes to financial statements.
STATEMENTS OF ASSETS AND LIABILITIES
- ---------------------------------------------------------------------------------------------------------------------------
August 31, 1996
(In Thousands, Except Per Share Amounts)
STRONG SHORT-TERM STRONG MUNICIPAL STRONG HIGH-YIELD
MUNICIPAL BOND FUND BOND FUND MUNICIPAL BOND FUND
------------------- --------- -------------------
ASSETS:
Investments in Securities, at Value (Cost of $133,730,
$248,412 and $235,720, respectively) $134,655 $244,727 $234,969
Receivable from Brokers for Securities Sold -- 16,290 5,380
Interest Receivable 2,234 3,679 4,568
Other Assets 131 432 509
--- --- ---
Total Assets 137,020 265,128 245,426
LIABILITIES:
Payable to Brokers for Securities Purchased -- 16,634 6,328
Dividends Payable 623 1,069 1,417
Accrued Operating Expenses and Other Liabilities 48 88 40
-- -- --
Total Liabilities 671 17,791 7,785
--- ------ -----
NET ASSETS $136,349 $247,337 $237,641
======== ======== ========
Capital Shares Outstanding (Unlimited Shares Authorized) 14,102 27,502 25,145
NET ASSET VALUE PER SHARE $9.67 $8.99 $9.45
===== ===== =====
16
See notes to financial statements.
|
STATEMENTS OF CHANGES IN NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------------
(In Thousands)
STRONG SHORT-TERM
MUNICIPAL BOND FUND
------------------------------------------------
PERIOD ENDED YEAR ENDED YEAR ENDED
AUG. 31, 1996 DEC. 31, 1995 DEC. 31, 1994
------------- ------------- -------------
(NOTE 1)
OPERATIONS:
Net Investment Income $ 4,582 $ 7,035 $ 8,985
Net Realized Gain (Loss) 482 (5,512) (6,513)
Change in Unrealized Appreciation/Depreciation (1,972) 6,209 (6,339)
------ ----- ------
Increase (Decrease) in Net Assets Resulting from Operations 3,092 7,732 (3,867)
CAPITAL SHARE TRANSACTIONS 5,101 (29,202) (41,777)
DISTRIBUTIONS:
From Net Investment Income (4,582) (7,035) (8,985)
In Excess of Net Investment Income -- -- (308)
----- ----
TOTAL INCREASE (DECREASE) IN NET ASSETS 3,611 (28,505) (54,937)
NET ASSETS:
Beginning of Period 132,738 161,243 216,180
------- ------- -------
End of Period $136,349 $132,738 $161,243
======== ======== ========
|
STRONG MUNICIPAL
BOND FUND
------------------------------------------------
PERIOD ENDED YEAR ENDED YEAR ENDED
AUG. 31, 1996 DEC. 31, 1995 DEC. 31, 1994
------------- ------------- -------------
(NOTE 1)
OPERATIONS:
Net Investment Income $ 8,262 $ 15,259 $ 19,953
Net Realized Gain (Loss) (4,192) 8,215 (23,725)
Change in Unrealized Appreciation/Depreciation (9,406) 6,852 (14,892)
------ ----- -------
Increase (Decrease) in Net Assets Resulting from Operations (5,336) 30,326 (18,664)
CAPITAL SHARE TRANSACTIONS 14,211 (42,434) (80,486)
DISTRIBUTIONS:
From Net Investment Income (8,262) (15,259) (19,953)
In Excess of Net Investment Income -- (5,717) --
----- ------ -------
TOTAL INCREASE (DECREASE) IN NET ASSETS 613 (33,084) (119,103)
NET ASSETS:
Beginning of Period 246,724 279,808 398,911
------- ------- -------
End of Period $247,337 $246,724 $279,808
|
17
See notes to financial statements.
STATEMENTS OF CHANGES IN NET ASSETS (continued)
- ---------------------------------------------------------------------------------------------------------------------------
(In Thousands)
STRONG HIGH-YIELD
MUNICIPAL BOND FUND
------------------------------------------------
PERIOD ENDED YEAR ENDED YEAR ENDED
AUG. 31, 1996 DEC. 31, 1995 DEC. 31, 1994
------------- ------------- -------------
(NOTE 1)
OPERATIONS:
Net Investment Income $ 11,285 $ 13,500 $ 5,945
Net Realized Loss (3,285) (1,057) (1,961)
Change in Unrealized Appreciation/Depreciation (9,015) 12,809 (4,978)
------ ------ ------
Increase (Decrease) in Net Assets Resulting from Operations (1,015) 25,252 (994)
CAPITAL SHARE TRANSACTIONS (17,014) 147,648 93,661
DISTRIBUTIONS:
From Net Investment Income (11,285) (13,500) (5,945)
From Net Realized Gains -- -- (7)
------ --
TOTAL INCREASE (DECREASE) IN NET ASSETS (29,314) 159,400 86,715
NET ASSETS:
Beginning of Period 266,955 107,555 20,840
------- ------- ------
End of Period $237,641 $266,955 $107,555
======== ======== ========
|
18
See notes to financial statements.
NOTES TO FINANCIAL STATEMENTS
August 31, 1996
1. ORGANIZATION
The Strong Municipal Income Funds consist of Strong Short-Term Municipal
Bond Fund, Inc., Strong Municipal Bond Fund, Inc. and Strong High-Yield
Municipal Bond Fund, Inc. The Funds are separately incorporated,
diversified, open-end management investment companies registered under the
Investment Company Act of 1940. The Board of Directors of the Funds
approved changing the Funds' fiscal year-ends from December 31 to August
31.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Funds in the preparation of their financial statements.
(A) Security Valuation -- Securities of the Funds for which market
quotations are readily available are valued at fair value through
valuations obtained by a commercial pricing service or the mean of the
bid and asked prices when no last sales price is available. Securities
for which market quotations are not readily available are valued at
fair value as determined in good faith under consistently applied
procedures established by and under the general supervision of the
Board of Directors. Securities which are purchased within 60 days of
their stated maturity are valued at amortized cost, which approximates
current value.
The Funds may own certain investment securities which are restricted
as to resale (none were owned at August 31, 1996). These securities
are valued after giving due consideration to pertinent factors,
including recent private sales, market conditions and the issuer's
financial performance. The Funds generally bear the costs, if any,
associated with the disposition of restricted securities.
(B) Federal Income and Excise Taxes and Distributions to Shareholders --
It is the Funds' policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and
to distribute substantially all of their taxable income to their
shareholders in a manner which results in no tax cost to the Funds.
Therefore, no Federal income or excise tax provision is required.
The character of distributions made during the year from net
investment income or net realized gains may differ from the
characterization for Federal income tax purposes due to differences in
the recognition of income and expense items for financial statement
and tax purposes. Where appropriate, reclassifications between net
asset accounts are made for such differences that are permanent in
nature.
(C) Realized Gains and Losses on Investment Transactions -- Gains or
losses realized on investment transactions are determined by comparing
the identified cost of the security lot sold with the net sales
proceeds.
(D) Futures -- Upon entering into a futures contract, the Funds pledge to
the broker cash, U.S. government securities or other liquid,
high-grade debt obligations equal to the minimum "initial margin"
requirements of the exchange. The Funds also receive from or pay to
the broker an amount of cash equal to the daily fluctuation in the
value of the contract. Such receipts or payments are known as
"variation margin," and are recorded as unrealized gains or losses.
When the futures contract is closed, a realized gain or loss is
recorded equal to the difference between the value of the contract at
the time it was opened and the value at the time it was closed.
(E) Options -- Premiums received by the Funds upon writing put or call
options are recorded as an asset with a corresponding liability which
is subsequently adjusted to the current market value of the option.
When an option expires, is exercised, or is closed, the Funds realize
a gain or loss, and the liability is eliminated. The Funds continue to
bear the risk of adverse movements in the price of the underlying
asset during the period of the option, although any potential loss
during the period would be reduced by the amount of the option premium
received.
(F) Additional Investment Risk -- The use of futures contracts and
options, for purposes of hedging the Funds' investment portfolios
involves, to varying degrees, elements of market risk in excess of the
amount recognized in the statement of assets and liabilities. The
predominant risk with futures contracts is an imperfect correlation
between the value of the contracts and the underlying securities.
(G) Other -- Investment security transactions are recorded as of the trade
date. Dividend income and distributions to shareholders are recorded
on the ex-dividend date. Interest income is recorded on the accrual
basis and includes amortization of premiums and discounts.
3. NET ASSETS
Net assets as of August 31, 1996 were as follows (in thousands):
STRONG SHORT-TERM STRONG MUNICIPAL STRONG HIGH-YIELD
MUNICIPAL BOND FUND BOND FUND MUNICIPAL BOND FUND
------------------- ---------------- -------------------
Capital Stock $147,270 $281,142 $245,015
Undistributed Net Realized Loss (11,542) (29,332) (6,303)
Net Unrealized Appreciation (Depreciation) 621 (4,473) (1,071)
------- ------- -------
$136,349 $247,337 $237,641
======== ======== ========
|
19
NOTES TO FINANCIAL STATEMENTS (continued)
August 31, 1996
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Funds for the eight months ended August 31,
1996 and the years ended December 31, 1995 and 1994 were as follows (in
thousands):
1996 1995 1994
----------------- ----------------- -----------------
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS
------ ------- ------ ------- ------ -------
STRONG SHORT-TERM MUNICIPAL BOND FUND
Shares Sold 5,134 $ 49,857 5,815 $ 56,792 14,809 $150,226
Dividends Reinvested 387 3,759 618 6,037 799 8,049
Shares Redeemed (5,001) (48,515) (9,429) (92,031) (19,907) (200,052)
------ ------- ------ ------- ------- --------
520 $ 5,101 (2,996) ($ 29,202) (4,299) ($ 41,777)
=== ======== ====== ========= ====== =========
STRONG MUNICIPAL BOND FUND
Shares Sold 4,802 $ 44,271 9,798 $ 93,037 17,346 $168,663
Dividends Reinvested 712 6,550 1,777 16,879 1,675 16,211
Shares Redeemed (7,153) (65,700) (15,997) (152,350) (27,598) (265,360)
Net Proceeds from Acquisition (Note 8) 3,236 29,090 -- -- -- --
----- ------ ----- -------- ----- --------
1,597 $ 14,211 (4,422) ($ 42,434) (8,577) ($ 80,486)
===== ======== ====== ========= ====== =========
STRONG HIGH-YIELD MUNICIPAL BOND FUND
Shares Sold 15,577 $149,876 26,320 $253,347 21,216 $205,563
Dividends Reinvested 872 8,362 975 9,387 400 3,848
Shares Redeemed (18,245) (175,252) (11,927) (115,086) (12,107) (115,750)
------- -------- ------- -------- ------- --------
(1,796) ($ 17,014) 15,368 $147,648 9,509 $ 93,661
====== ========= ====== ======== ===== ========
|
5. RELATED PARTY TRANSACTIONS
Strong Capital Management, Inc. (the "Advisor"), with whom certain officers
and directors of the Funds are affiliated, provides investment advisory
services and shareholder recordkeeping and related services to the Funds.
Investment advisory fees, which are established by terms of the Advisory
Agreements, are based on the following annualized rates of the average
daily net assets: Strong Short-Term Municipal Bond Fund .50%, Strong
Municipal Bond Fund and Strong High-Yield Municipal Bond Fund .60%.
Advisory fees are subject to reimbursement by the Advisor if the Funds'
operating expenses exceed certain levels. Shareholder recordkeeping and
related service fees are based on contractually established rates for each
open and closed shareholder account. In addition, the Advisor is
compensated for certain other services related to costs incurred for
reports to shareholders.
Certain information regarding related party transactions for the eight
months ended August 31, 1996, is as follows (in thousands):
STRONG SHORT-TERM STRONG MUNICIPAL STRONG HIGH-YIELD
MUNICIPAL BOND FUND BOND FUND MUNICIPAL BOND FUND
------------------- --------- -------------------
Payable to Advisor at August 31, 1996 $11 $12 $21
Other Shareholder Servicing Expenses Paid to Advisor 2 5 2
Unaffiliated Directors' Fees 3 4 4
|
6. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of long-term securities for the eight
months ended August 31, 1996 were as follows (in thousands):
STRONG SHORT-TERM STRONG MUNICIPAL STRONG HIGH-YIELD
MUNICIPAL BOND FUND BOND FUND MUNICIPAL BOND FUND
------------------- --------- -------------------
Purchases $52,972 $402,618 $259,622
Sales 48,595 427,718 283,887
|
7. INCOME TAX INFORMATION
At August 31, 1996, the investment cost, gross unrealized appreciation and
depreciation on investments and capital loss carryovers (expiring in
varying amounts through 2004) for Federal income tax purposes were as
follows (in thousands):
Strong Short-Term Strong Municipal Strong High-Yield
Municipal Bond Fund Bond Fund Municipal Bond Fund
------------------- --------- -------------------
Aggregate Investment Cost $133,730 $248,473 $235,754
======== ======== ========
Aggregate Unrealized
Appreciation $ 1,337 $ 1,080 $ 3,615
Depreciation (412) (4,826) (4,400)
-------- -------- ---------
$ 925 ($ 3,746) ($ 785)
======== ======== =========
Capital Loss Carryovers $ 11,846 $ 30,059 $ 6,588
======== ======== ========
|
8. ACQUISITION INFORMATION
Effective August 30, 1996, Strong Municipal Bond Fund, Inc. acquired,
through a non-taxable exchange, substantially all of the net assets of
Strong Insured Municipal Bond Fund, Inc., which amounted to (in thousands)
$29,090, and issued (in thousands) 3,236 shares. The net assets of Strong
Insured Municipal Bond Fund, Inc. included (in thousands) net unrealized
depreciation on investments of $151 and capital loss carryovers of $3,642.
The Statement of Operations for the period ended August 31, 1996 does not
include the pre-acquisition activity of Strong Insured Municipal Bond Fund,
Inc.
20
FINANCIAL HIGHLIGHTS
- ---------------------------------------------------------------------------------------------------------------------------
STRONG SHORT-TERM MUNICIPAL BOND FUND 1996(a) 1995 1994 1993 1992
------- ---- ---- ---- ----
(NOTE 1)
SELECTED PER-SHARE DATA
- -----------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.77 $ 9.73 $ 10.36 $ 10.20 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income 0.33 0.47 0.45 0.44 0.48
Net Realized and Unrealized Gains
(Losses) on Investments (0.10) 0.04 (0.62) 0.23 0.22
----- ---- ----- ---- ----
Total from Investment Operations 0.23 0.51 (0.17) 0.67 0.70
LESS DISTRIBUTIONS:
From Net Investment Income(b) (0.33) (0.47) (0.45) (0.44) (0.48)
From Net Realized Gains -- -- (0.01) (0.07) (0.02)
----- ------ ----- ----- -----
Total Distributions (0.33) (0.47) (0.46) (0.51) (0.50)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 9.67 $ 9.77 $ 9.73 $ 10.36 $ 10.20
======== ======== ======== ======== ========
TOTAL RETURN +2.4% +5.4% -1.6% +6.8% +7.2%
RATIOS AND SUPPLEMENTAL DATA
- ----------------------------
Net Assets, End of Period (In Thousands) $136,349 $132,738 $161,243 $216,180 $110,816
Ratio of Expenses to Average Net Assets 0.7%* 0.8% 0.7% 0.6% 0.2%
Ratio of Expenses to Average Net Assets
Without Waivers and Absorptions 0.7%* 0.8% 0.7% 0.7% 0.8%
Ratio of Net Investment Income to Average Net
Assets 5.1%* 4.8% 4.5% 4.2% 4.9%
Portfolio Turnover Rate 38.0% 226.8% 273.2% 141.5% 139.9%
|
STRONG MUNICIPAL BOND FUND 1996(a) 1995 1994 1993 1992 1991 1990
------- ---- ---- ---- ---- ---- ----
(NOTE 1)
SELECTED PER-SHARE DATA
- -----------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.52 $ 9.23 $ 10.25 $ 10.00 $ 9.76 $ 9.22 $ 9.47
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income 0.33 0.52 0.56 0.58 0.65 0.65 0.66
Net Realized and Unrealized Gains
(Losses) on Investments (0.53) 0.51 (1.02) 0.57 0.50 0.54 (0.25)
----- ---- ----- ---- ---- ---- -----
Total from Investment Operations (0.20) 1.03 (0.46) 1.15 1.15 1.19 0.41
LESS DISTRIBUTIONS:
From Net Investment Income(b) (0.33) (0.54) (0.56) (0.58) (0.65) (0.65) (0.66)
In Excess of Net Investment Income -- (0.20) -- -- -- -- --
From Net Realized Gains -- -- -- (0.32) (0.26) -- --
----- ---- ----- ---- ---- ---- -----
Total Distributions (0.33) (0.74) (0.56) (0.90) (0.91) (0.65) (0.66)
----- ----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 8.99 $ 9.52 $ 9.23 $ 10.25 $ 10.00 $ 9.76 $ 9.22
======== ======== ======== ======== ======== ======== ========
TOTAL RETURN -2.1% +11.4% -4.6% +11.8% +12.2% +13.4% +4.6%
RATIOS AND SUPPLEMENTAL DATA
- ----------------------------
Net Assets, End of Period (In Thousands) $247,337 $246,724 $279,808 $398,911 $289,751 $115,230 $ 31,560
Ratio of Expenses to Average Net Assets 0.8%* 0.8% 0.8% 0.7% 0.1% 0.1% 0.3%
Ratio of Expenses to Average Net Assets
Without Waivers and Absorptions 0.8%* 0.8% 0.8% 0.8% 0.9% 1.1% 1.5%
Ratio of Net Investment Income to Average
Net Assets 5.4%* 5.4% 5.8% 5.6% 6.4% 6.9% 7.2%
Portfolio Turnover Rate 172.9% 513.8% 311.0% 156.7% 324.0% 465.2% 586.0%
STRONG MUNICIPAL BOND FUND (Continued) 1989 1988 1987 1986(c)
---- ---- ---- -------
SELECTED PER-SHARE DATA
- -----------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.35 $ 9.16 $ 10.01 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income 0.52 0.49 0.67 0.12
Net Realized and Unrealized Gains
(Losses) on Investments 0.12 0.19 (0.85) 0.01
---- ---- ----- ----
Total from Investment Operations 0.64 0.68 (0.18) 0.13
LESS DISTRIBUTIONS:
From Net Investment Income(b) (0.52) (0.49) (0.67) (0.12)
In Excess of Net Investment Income -- -- -- --
From Net Realized Gains -- -- -- --
---- ---- ----- ----
Total Distributions (0.52) (0.49) (0.67) (0.12)
----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 9.47 $ 9.35 $ 9.16 $ 10.01
======== ======== ======== =======
TOTAL RETURN +7.1% +7.6% -1.8% +1.3%
RATIOS AND SUPPLEMENTAL DATA
- ----------------------------
Net Assets, End of Period (In Thousands) $ 18,735 $ 18,275 $ 19,070 $ 2,212
Ratio of Expenses to Average Net Assets 1.7% 1.3% 1.0% 0.4%*
Ratio of Expenses to Average Net Assets
Without Waivers and Absorptions 1.8% 1.4% 1.3% 1.0%*
Ratio of Net Investment Income to Average
Net Assets 5.6% 5.3% 7.0% 6.4%*
Portfolio Turnover Rate 243.3% 343.6% 284.0% 21.9%
|
* Calculated on an annualized basis.
(a) For the period ended August 31, 1996. Total return and portfolio turnover
rate are not annualized.
(b) Tax-exempt for regular Federal income tax purposes.
(c) Inception date is October 23, 1986. Total return and portfolio turnover
rate are not annualized.
21
FINANCIAL HIGHLIGHTS (continued)
- ---------------------------------------------------------------------------------------------------------------------------
STRONG HIGH-YIELD MUNICIPAL BOND FUND 1996(a) 1995 1994 1993(b)
------- ---- ---- -------
(NOTE 1)
SELECTED PER-SHARE DATA
- -----------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.91 $ 9.29 $ 10.10 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income 0.44 0.69 0.71 0.16
Net Realized and Unrealized Gains
(Losses) on Investments (0.46) 0.62 (0.81) 0.10
----- ---- ----- ----
Total from Investment Operations (0.02) 1.31 (0.10) 0.26
LESS DISTRIBUTIONS:
From Net Investment Income(c) (0.44) (0.69) (0.71) (0.16)
----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 9.45 $ 9.91 $ 9.29 $ 10.10
======== ======== ======== ========
TOTAL RETURN -0.1% +14.6% -1.0% +2.7%
RATIOS AND SUPPLEMENTAL DATA
- ----------------------------
Net Assets, End of Period (In Thousands) $237,641 $266,955 $107,555 $ 20,840
Ratio of Expenses to Average Net Assets 0.7%* 0.4% 0.0% 0.0%*
Ratio of Expenses to Average Net Assets
Without Waivers and Absorptions 0.7%* 0.8% 0.8% 1.1%*
Ratio of Net Investment Income to Average
Net Assets 6.9%* 7.1% 7.5% 6.8%*
Portfolio Turnover Rate 106.8% 113.8% 198.1% 28.0%
|
* Calculated on an annualized basis.
(a) For the period ended August 31, 1996. Total return and portfolio turnover
rate are not annualized.
(b) Inception date is October 1, 1993. Total return and portfolio turnover rate
are not annualized.
(c) Tax-exempt for regular Federal income tax purposes.
22
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of the
Strong Municipal Income Funds
We have audited the accompanying statements of assets and liabilities of Strong
Short-Term Municipal Bond Fund, Inc., Strong Municipal Bond Fund, Inc. and
Strong High-Yield Municipal Bond Fund, Inc. (collectively referred to herein as
the "Strong Municipal Income Funds"), including the schedules of investments in
securities, as of August 31, 1996, and the related statements of operations for
the period from January 1, 1996 to August 31, 1996 and the year ended December
31, 1995, the statements of changes in net assets for the period from January 1,
1996 to August 31, 1996 and the years ended December 31, 1995 and 1994, and the
financial highlights for each of the periods indicated. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
August 31, 1996 by correspondence with the custodians and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the Strong Municipal Income Funds as of August 31, 1996, the results of their
operations for the period from January 1, 1996 to August 31, 1996 and the year
ended December 31, 1995, the changes in their net assets for the period from
January 1, 1996 to August 31, 1996 and the years ended December 31, 1995 and
1994, and the financial highlights for each of the periods indicated, in
conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Milwaukee, Wisconsin
September 26, 1996
23
NOTES
24
SHAREHOLDER PRIVILIGES*
STRONG FUNDS
[PICTURE OF TELEPHONE]
24-HOUR SERVICE
TELEPHONE PURCHASE
Make additional investments into any Strong Fund by calling us toll-free at
1-800-368-3863.
TELEPHONE EXCHANGE
If your financial goals change, you can exchange your investments between any of
the Strong Funds.
TELEPHONE REDEMPTION
You can call toll-free to redeem your mutual fund shares at any time. Your
shares will be redeemed no later than the close of the next business day.
STRONG FUNDS
[PICTURE OF DOLLAR SIGN]
AUTOMATIC EXCHANGE
AUTOMATIC INVESTMENT PLAN
This plan allows you to set up regular transfers from your bank checking or NOW
account to your Strong Funds account.
PAYROLL DIRECT DEPOSIT PLAN
You can automatically transfer all or a portion of your net pay at each pay
period. This eliminates the delay of depositing paychecks to your bank and then
sending a check through the mail to Strong Funds.
AUTOMATIC EXCHANGE PLAN
This plan allows you to exchange money from one Strong Fund to another. For
example, you may want to set up automatic exchanges from a money market fund to
an equity fund.
For more information about these privileges, call us at 1-800-368-3863.
To reduce the volume of mail you receive, only one copy of certain materials,
such as prospectuses and shareholder reports, is mailed to your household.
Please call 1-800-368-3863 if you wish to receive additional copies, free of
charge.
* Each Fund reserves the right to terminate or modify any of these privileges.
Bulk Rate
U.S. Postage
PAID
Milwaukee, WI
Permit No. 2652
FOR LITERATURE AND INFORMATION REQUESTS,
CALL 1-800-368-1030.
TO DISCUSS AN EXISTING ACCOUNT OR
CONDUCT A TRANSACTION,
CALL 1-800-368-3863.
For a prospectus containing more complete information, including management fees
and expenses, please call 1-800-368-1030. Please read it carefully before
investing or sending money. This annual report does not constitute an offer for
the sale of securities. Strong Funds are offered for sale by prospectus only.
[STRONG LOGO]
STRONG FUNDS DISTRIBUTORS, INC.
P.O. Box 2936
Milwaukee, Wisconsin 53201
http://www.strong-funds.com
3617I96O
|
