N-CSR 1 dncsr.htm STRONG OPPORTUNITY FUND, INC. Strong Opportunity Fund, Inc.

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OMB Number:

  3235-0570

Expires:

  Nov. 30, 2005

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hours per response:

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM N-CSR

 

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT

INVESTMENT COMPANIES

 

 

Investment Company Act file number: 811-3793

 

Strong Opportunity Fund, Inc., on behalf

of Strong Advisor Select Fund,

Strong Advisor U.S. Small/Mid Cap Growth Fund,

Strong Endeavor Fund and Strong Opportunity Fund

(Exact name of registrant as specified in charter)

 

 

P.O. Box 2936 Milwaukee, WI   53201
(Address of principal executive offices)   (Zip code)

 

 

John W. Widmer, Strong Capital Management, Inc.

P.O. Box 2936 Milwaukee, WI 53201

(Name and address of agent for service)

 

 

Registrant’s telephone number, including area code: (414) 359-3400

 

 

Date of fiscal year end: December 31

 

 

Date of reporting period: December 31, 2004

 

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

 

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. (S) 3507.


Item 1.     Reports to Shareholders

 

ANNUAL REPORT    |    December 31, 2004

 

Strong

 

Advisor Equity

 


 

Funds

 

LOGO

 

Strong Advisor Common Stock Fund

 

Strong Advisor Mid Cap Growth Fund

 

Strong Advisor Small Cap Value Fund

 

Strong Advisor U.S. Value Fund

 

Strong Advisor Endeavor Large Cap Fund

 

Strong Advisor Focus Fund

 

Strong Advisor International Core Fund

 

Strong Advisor Select Fund

 

Strong Advisor Technology Fund

 

Strong Advisor U.S. Small/Mid Cap Growth Fund

 

Strong Advisor Utilities and Energy Fund

 

Strong Advisor Large Company Core Fund

   

LOGO

 

 


ANNUAL REPORT    |    December 31, 2004

 

Strong

Advisor Equity

Funds

 

On May 26, 2004, Strong Financial Corporation (“SFC”) announced that it reached a definitive agreement with Wells Fargo & Company (“Wells Fargo”) for Wells Fargo to acquire certain assets of SFC and certain of its affiliates, including the Advisor. On December 10, 2004, and on December 22, 2004, shareholders of the Strong Funds met and approved 1) the reorganization of each Strong Fund into a Wells Fargo Advantage Fund (“Reorganization”), and 2) interim investment advisory agreements between the Strong Funds and Wells Fargo Funds Management, LLC and certain sub-advisors (“Interim Agreements”). The Interim Agreements became effective January 1, 2005. The Reorganization of the Funds is expected to occur on or about April 11, 2005.

 

Table of Contents

 

Investment Reviews     

Strong Advisor Common Stock Fund

   2

Strong Advisor Mid Cap Growth Fund

   6

Strong Advisor Small Cap Value Fund

   10

Strong Advisor U.S. Value Fund

   14

Strong Advisor Endeavor Large Cap Fund

   18

Strong Advisor Focus Fund

   22

Strong Advisor International Core Fund

   26

Strong Advisor Select Fund

   30

Strong Advisor Technology Fund

   34

Strong Advisor U.S. Small/Mid Cap Growth Fund

   38

Strong Advisor Utilities and Energy Fund

   42

Strong Advisor Large Company Core Fund

   46

Your Fund’s Expenses

   50
Financial Information     

Schedules of Investments in Securities

    

Strong Advisor Common Stock Fund

   52

Strong Advisor Mid Cap Growth Fund

   54

Strong Advisor Small Cap Value Fund

   55

Strong Advisor U.S. Value Fund

   61

Strong Advisor Endeavor Large Cap Fund

   63

Strong Advisor Focus Fund

   64

Strong Advisor International Core Fund

   65

Strong Advisor Select Fund

   66

Strong Advisor Technology Fund

   67

Strong Advisor U.S. Small/Mid Cap Growth Fund

   68

Strong Advisor Utilities and Energy Fund

   70

Strong Advisor Large Company Core Fund

   70

Statements of Assets and Liabilities

   72

Statements of Operations

   80

Statements of Changes in Net Assets

   86
Financial Highlights    93
Notes to Financial Statements    114
Report of Independent Registered Public Accounting Firm    138
Results of Shareholders Meetings    139
Directors and Officers    144


LOGO

 

Market Update From Dick Weiss

 

January 1, 2004, to December 31, 2004

 

It’s indisputable: When it comes to the stock market, resolution brings results.

 

We saw this clearly at the tail end of 2004. The market as a whole had wandered aimlessly for the first 10 months of the year, spooked by uncertainty over the outcome of a contentious U.S. Presidential Election and our continuing involvement in Iraq. With George W. Bush’s reelection in November, the market surged, driven by the knowledge that there would be no change of administration in Washington and the U.S. commitment to democratize Iraq would continue.

 

One issue that currently weighs on the markets is inflation. There was tremendous inflation at the raw material level in both 2003 and 2004, but it has not shown up in any marked degree in the Consumer Price Index (CPI). The most obvious example occurred in the energy sector, where oil rose well above $50 per barrel. Historically, that sort of spike in oil prices would have dramatically (and negatively) impacted the average American’s financial affairs. This time, however, it did not.

 

Why? Because rather than pass on those increasing raw material costs to customers, most companies chose to take the hit themselves, largely because demand seemed soft. It seems to me that the tricky question is whether companies will continue to absorb higher prices for raw materials (thus depressing profit margins) or, rather, pass those costs along to the public.

 

In any event, it’s clear that there’s a lot more inflation in the system than is reflected in the CPI. Hence, it’s become a matter of how that inflation will be managed — and by whom.

 

It’s also worth noting that there are deflationary pressures afoot in the world’s economy today. China, absorbing millions of new workers into its labor pool, is exporting cheap goods around the globe. The United States is the destination for a disproportionate share of that production, and the Chinese are financing our purchases. For the moment, that practice has helped to prop up the U.S. dollar. In the long run, it has unsettling implications.

 

As we look at 2005, there are a lot of moving parts out there — inflation, deflation, Iraq, China, the ups-and-downs of the U.S. dollar, and the mind-boggling developments in technology with their transformative effects on both our corporate and personal lives. Rapidly aging populations in Europe and China will cause seismic demographic shifts that we believe will have a long-term, dramatic effect on the world economy and markets.

 

Thanks for your continued investment.

 

LOGO

 

Richard T. Weiss

 

Strong Financial Corporation


Strong Advisor Common Stock Fund

 

Continuing the previous year’s bull market, the U.S. stock market posted another positive year in 2004. The Strong Advisor Common Stock Fund’s Class Z shares gained 9.96% for the 12 months ending December 31, 2004. This result trailed that of the Fund’s broad-based benchmark, the Russell Midcap Index, which returned 20.22% during the same period.

 

A growing economy and higher rates

 

Strong consumer spending continued to carry the economy during 2004, while corporate spending gradually strengthened. The Federal Reserve continued to raise interest rates gradually during the period — exemplifying its confidence in the economy’s underlying strength. The Fed initiated five separate quarter-percentage-point rate hikes between June 30 and the end of the year.

 

We positioned the Strong Advisor Common Stock Fund with an expectation for higher rates and an aggressive economic recovery in 2004. The market rose only modestly for the first two-thirds of the year, as uncertainty surrounded the outcome of the U.S. presidential election and energy costs continued to rise. However, in the year’s fourth quarter, after the election ended in decisive fashion and energy prices began declining, the stock market rallied and ended the year on a very positive note.

 

Choosing stocks for the portfolio

 

The Strong Advisor Common Stock Fund uses a private market methodology to build its portfolio of securities. In other words, our investment process leads us to evaluate companies’ competitive strengths, assets, and financial position. We synthesize this information to gauge the value an independent buyer would pay for the entire company, and then we look for stocks to buy that are trading at a discount to that value.

 

This process attracted us to the Internet sector, especially in companies helping to rejuvenate the advertising business. We believed that Internet advertising companies would benefit from the rising economy as well as take market share from traditional advertising businesses.

 

DoubleClick was an investment based on this thesis. After the Internet “bubble” burst several years ago, the stock represented a compelling opportunity for value investors attracted to its reasonable price. After the company changed its business model several times in 2003, we concluded that DoubleClick’s acquisitions would complement positive trends we forecasted for Internet stocks in 2004.

 

Morningstar® Style Box *

 

LOGO

 

Despite a favorable operating environment in 2004, DoubleClick faced challenges in integrating several of its acquisitions. Also, the company’s core ad-serving technology could not withstand pricing pressure from its competition. In the last quarter of 2004, the company announced intentions to explore strategic opportunities to increase shareholder value. Against this backdrop, DoubleClick was a disappointing performer for the Fund during the period. More helpful for performance was the Fund’s overweight position in energy stocks, which generally enjoyed very strong results. In 2004 we saw record-high energy prices, caused principally by a combination of a strengthening global economy and tightening crude oil and natural gas supplies. As energy companies increased their production to take advantage of the higher prices, the number of drilling rigs worldwide increased significantly.

 

One energy stock we owned during the period was Noble Corporation, which has one of the world’s most diverse fleets of offshore rigs. As drilling activity increased, the utilization rates of the rigs also increased, allowing Noble Corporation to receive higher day rates. Energy analysts expect that the financial leverage from the increased drilling activity may be fully realized in 2005, for which earnings estimates are more than 80% above 2004 levels. This anticipated future financial strength caused Noble Corporation’s stock price to appreciate nearly 40% during 2004.

 

What lies ahead?

 

Our outlook for 2005 depends on several factors, including the pressure of inflation, the dollar’s resilience to large trade and fiscal deficits, and the need for more rapid economic growth from countries outside of the United States. Consumer spending is starting to drop off slightly, but we expect that increased corporate spending and lower fuel costs should support the continued economic recovery.

 

The Fund is expected to reorganize into the Wells Fargo Advantage Common Stock Fund, the successor to the Strong Advisor Common Stock Fund, on or about April 11, 2005.

 

We appreciate your trust in our investment expertise and are committed to providing you with positive long-term performance. Best wishes for a happy, healthy, and profitable 2005.

 

LOGO

 

Richard T. Weiss

 

Portfolio Co-Manager

 

LOGO

 

Ann M. Miletti

 

Portfolio Co-Manager

 


* The Morningstar Style Box reflects a fund’s investment strategy. For equity funds, the vertical axis shows the market capitalization of the stocks owned and the horizontal axis shows investment style (value, blend, or growth).

 

Mention of specific securities in this report is not indicative of whether the Fund may make additional purchases of, sell all or a portion of, or continue to hold those securities.

 

2


Fund Highlights

 

Sector Weightings

 

Percent of Net Assets, as of 12-31-04

 

LOGO

 

Source: Frank Russell Company via FactSet    

 

Fund Highlights are continued on next page.

 

3


Strong Advisor Common Stock Fund

 

Growth of an Assumed $10,000 Investment

From 12-29-89 to 12-31-04

 

LOGO


Performance is historical and does not guarantee future results. Investment returns and principal value will fluctuate, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the quoted performance. Call us or visit www.Strong.com for the most recent month-end performance.

 

This graph, provided in accordance with SEC regulations, compares a $10,000 investment in the Fund, made at its inception, with the performance of the Russell Midcap® Index and the Lipper Mid-Cap Core Funds Index. Results include the reinvestment of all dividends and capital gains distributions. The graph and the Average Annual Total Returns table do not reflect the deduction of taxes, if any, that a shareholder would pay on Fund distributions or the redemption of Fund shares. This graph is based on Class Z shares only; performance for other classes will vary due to differences in fee structures.

 

Definitions:

 

** The Russell Midcap® Index measures the performance of the 800 smallest companies in the Russell 1000 Index, which represent approximately 26% of the total market capitalization of the Russell 1000 Index. The Lipper Mid-Cap Core Funds Index is the average of the 30 largest funds in the Lipper Mid-Cap Core Funds Category. Source of the Russell Index data is Standard & Poor’s Micropal. Source of the Lipper Index data is Lipper.

 

It is not possible to invest directly in an index.

 

Top Holdings

 

Percent of Net Assets, as of 12-31-04

 

Noble Corporation

   2.5 %

Burlington Resources, Inc.

   2.3 %

Cablevision Systems New York Group Class A

   2.2 %

Apache Corporation

   2.1 %

Mentor Graphics Corporation

   1.8 %

Lonza Group AG

   1.8 %

Smith International, Inc.

   1.8 %

Pactiv Corporation

   1.8 %

City National Corporation

   1.7 %

EOG Resources, Inc.

   1.7 %
    

Top Ten    19.7 %
    


Holdings vary. More complete holdings are available at www.Strong.com.

 

Percentage Restrictions: The Fund’s prospectus and statement of additional information may describe restrictions on the percentage of a particular type or quality of security in which the Fund may invest (“Percentage Restrictions”). Percentage Restrictions apply at the time the Fund purchases a security. Circumstances subsequent to the purchase of the security, such as a change in: (1) the Fund’s assets (e.g., due to cash inflows and redemptions), (2) the market value of the security, or (3) the pricing, liquidity, or rating of the security, may cause the Fund to exceed or fall short of the Percentage Restriction. If this happens, the Fund’s continued holding of the security will not constitute a violation of the Percentage Restriction.

 

4


Average Annual Total Returns

 

As of 12-31-04

 

Class A1,2


      

1-year

   3.37 %

5-year

   2.14 %

10-year

   12.44 %

Since Fund Inception (12-29-89)

   14.45 %

 

Class A, excluding sales load


      

1-year

   9.67 %

5-year

   3.36 %

10-year

   13.11 %

Since Fund Inception (12-29-89)

   14.90 %

 

Class B1,2


      

1-year

   3.89 %

5-year

   2.32 %

10-year

   12.66 %

Since Fund Inception (12-29-89)

   14.62 %

 

Class C1,2


      

1-year

   7.84 %

5-year

   2.68 %

10-year

   12.48 %

Since Fund Inception (12-29-89)

   14.30 %

 

Class Z1,3


      

1-year

   9.96 %

5-year

   3.64 %

10-year

   13.47 %

Since Fund Inception (12-29-89)

   15.28 %

Performance is historical and does not guarantee future results. Investment returns and principal value will fluctuate, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the quoted performance. Call us or visit www.Strong.com for the most recent month-end performance.

 

Fee Waivers:

 

1 From time to time, the Fund’s advisor and/or administrator has waived fees and/or absorbed Fund expenses, which has resulted in higher returns. As of 12-31-04, there are waivers and/or absorptions in effect for all share classes.

 

Performance:

 

2 Average annual total returns reflect the effect of the maximum sales charge of 5.75% for Class A, the applicable contingent deferred sales charge of 5.00% in year 1 and eliminated after year 6 for Class B, and the applicable contingent deferred sales charge of 1.00% and eliminated after 12 months for Class C. The performance of the Class A, B, and C shares is based on the performance of the Fund’s Class Z shares (formerly Retail Class shares) prior to 11-30-00. The performance of the Class A shares is restated to reflect the load and the different expenses of the Class A shares, as applicable. The performance of the Class B shares is restated to reflect the contingent deferred sales charge and the different expenses of the Class B shares, as applicable. The performance of the Class C shares is restated to reflect the contingent deferred sales charge and the different expenses of the Class C shares, as applicable.

 

Please consult a prospectus for information about all share classes.

 

From time to time, the Fund’s performance was significantly enhanced through investments in initial public offerings (IPOs). In addition, the effect of IPOs purchased when the Fund’s asset base was small may have been magnified. Given these circumstances, you should not expect that such enhanced returns can be consistently achieved. Please consider this before investing.

 

General:

 

3 The Class Z shares are closed to new accounts, though the Fund may continue to offer its shares to certain company-sponsored retirement plans, institutional investors meeting specific eligibility requirements, and other limited groups as described in the prospectus.

 

Top Ten Industries

 

Percent of Net Assets, as of 12-31-04

 

Oil & Gas — United States Exploration & Production

   6.1 %

Media — Cable TV

   6.1 %

Electronics — Semiconductor Manufacturing

   5.3 %

Insurance — Property/Casualty/Title

   4.1 %

Oil & Gas — Drilling

   4.0 %

Medical/Dental — Services

   2.7 %

Retail — Department Stores

   2.6 %

Computer — IT Services

   2.4 %

Medical — Biomedical/Biotechnology

   2.4 %

Medical — Products

   2.4 %
    

Top Ten    38.1 %
    


Risks: Stock funds should only be considered for long-term goals as values fluctuate in response to the activities of individual companies and general market and economic conditions. Investment strategies that concentrate in particular market segments or fewer securities tend to increase the total risk of an investment (relative to the broader market). This Fund is exposed to the following specific risks: growth-style investing risk and small- and medium-company risk. Consult the Fund’s prospectus for additional information on these and other risks.

 

5


Strong Advisor Mid Cap Growth Fund

 

Recording its second consecutive year of positive double-digit returns, the Strong Advisor Mid Cap Growth Fund Class Z shares recorded a gain of 18.41% during 2004. Though the fund performed well, it fell short of the 20.22% return registered by the broad-based Russell Midcap Index.

 

During 2004, mid-cap value stocks outperformed mid-cap growth stocks by a wide margin, continuing a pattern we have seen for four of the last five years. This worked against our ability to beat the Russell Midcap Index, which includes both growth and value stocks. Other sources of weakness compared with the benchmark included Fund holdings in generic drug, homebuilding, and biotechnology stocks.

 

Positive contributors to the Fund’s performance came most noticeably from the consumer discretionary sector, including names such as Starbucks, Harman International, and Station Casinos. Energy was another area of strength for the Fund, led by outstanding performance from Ultra Petroleum, a fast-growing exploration and production company. Other standout positive contributors were Puerto Rican bank, Doral Financial, and technology leaders Apple Computer and Marvell Technology.

 

Capitalizing on strong, sustainable growth

 

We believe earnings and revenue growth are critical factors in determining stock price movements. Thus, our research process is centered around finding companies with the prospects for robust and sustainable growth in earnings and revenue. To find that growth, we use thorough, hands-on research, emphasizing the potential profitability of a company’s business model and management’s track record in successfully executing its strategy. We then combine that company-specific analysis with our assessment of macroeconomic, secular, and technical trends to form a decision about whether to invest in a particular stock.

 

For example, several months ago, we purchased shares of Ultra Petroleum because we believed it had tremendous potential profitability — extremely high production growth combined with the industry’s lowest cost structure. Our conclusion was that Ultra Petroleum’s high production growth rate was likely to continue for several more years, driven by the strength of its drilling prospects and management’s solid track record. Finally, an investment in Ultra Petroleum made sense given the team’s positive overall outlook for crude oil and natural gas prices. Ultra Petroleum was up 95% in 2004 and was one of the Fund’s largest holdings as of December 31, 2004.

 

Morningstar® Style Box*

 

LOGO

 

The importance of effective selling criteria

 

Deciding when to sell a stock is just as important as deciding when to buy. Our selling criteria are essentially the opposite of our buying criteria. We may sell a stock when we see a deterioration in its fundamental qualities that causes us to become suspicious about the company’s prospective growth profile or the potential profitability of its business model. Examples of events that can trigger this suspicion are questionable earnings reports, new competitive threats, changes in the economy, or changes in management personnel.

 

In July of 2004, following its latest quarterly earnings report, we began selling shares of eResearch Technology, which provides software and consulting services to help companies streamline the Food and Drug Administration approval process. For the first time in several quarters, eResearch failed to post earnings that were higher than analysts’ estimates. Also, the growth in backlog of orders, a leading indicator of future growth, slowed dramatically. Our instincts to get more cautious proved accurate. In the following weeks and months, eResearch management guided analysts’ forecasts lower for the remainder of 2004 and for 2005. After falling as low as $10.70 in October, the stock finished the year at $15.85, down sharply from our initial sales in the mid $20s.

 

Looking ahead

 

As we begin 2005, our outlook for the next several months remains positive, as we expect the economy to benefit from continued low interest rates and inflation. This environment should allow for solid growth in corporate profits, which is typically beneficial to stock prices. We plan to continue to seek out the fastest-growing companies we can identify that we believe fit within the framework of our investment process.

 

Effective February 18, 2005, Jerome “Cam” Philpott, CFA, and Stuart Roberts of Wells Capital Management Incorporated will become the Portfolio Co-Managers of the Fund. In addition, the Fund is expected to reorganize into the Wells Fargo Advantage Mid Cap Growth Fund on or about April 11, 2005.

 

It has been my pleasure being the Fund’s Portfolio Manager over the last year and a half. Thank you for your investment in the Strong Advisor Mid Cap Growth Fund.

 

LOGO

 

Brandon Nelson

 

Portfolio Manager

 


* The Morningstar Style Box reflects a fund’s investment strategy. For equity funds, the vertical axis shows the market capitalization of the stocks owned and the horizontal axis shows investment style (value, blend, or growth).

 

Mention of specific securities in this report is not indicative of whether the Fund may make additional purchases of, sell all or a portion of, or continue to hold those securities.

 

6


Fund Highlights

 

Sector Weightings

 

Percent of Net Assets, as of 12-31-04

 

LOGO

 

Source: Frank Russell Company via FactSet

 

Fund Highlights are continued on next page.

 

7


Strong Advisor Mid Cap Growth Fund

 

Growth of an Assumed $10,000 Investment

From 12-31-96 to 12-31-04

 

LOGO

 


Performance is historical and does not guarantee future results. Investment returns and principal value will fluctuate, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the quoted performance. Call us or visit www.Strong.com for the most recent month-end performance.

 

This graph, provided in accordance with SEC regulations, compares a $10,000 investment in the Fund, made at its inception, with the performance of the Russell Midcap® Index and the Lipper Mid-Cap Growth Funds Index. Results include the reinvestment of all dividends and capital gains distributions. The graph and the Average Annual Total Returns table do not reflect the deduction of taxes, if any, that a shareholder would pay on Fund distributions or the redemption of Fund shares. This graph is based on Class Z shares only; performance for other classes will vary due to differences in fee structures.

 

Definitions:

 

** The Russell Midcap® Index measures the performance of the 800 smallest companies in the Russell 1000 Index, which represent approximately 26% of the total market capitalization of the Russell 1000 Index. The Lipper Mid-Cap Growth Funds Index is the average of the 30 largest funds in the Lipper Mid-Cap Growth Funds Category. Source of the Russell Index data is Standard & Poor’s Micropal. Source of the Lipper Index data is Lipper.

 

It is not possible to invest directly in an index.

 

Top Holdings

 

Percent of Net Assets, as of 12-31-04

 

Ultra Petroleum Corporation

   3.6 %

Doral Financial Corporation

   3.3 %

Starbucks Corporation

   3.1 %

Apple Computer, Inc.

   2.8 %

Marvell Technology Group, Ltd.

   2.7 %

Station Casinos, Inc.

   2.5 %

Cognizant Technology Solutions Corporation Class A

   2.4 %

Sierra Health Services, Inc.

   2.4 %

Marriott International, Inc. Class A

   2.1 %

Alliance Data Systems Corporation

   2.0 %
    

Top Ten    26.9 %
    


Holdings vary. More complete holdings are available at www.Strong.com.

 

Percentage Restrictions: The Fund’s prospectus and statement of additional information may describe restrictions on the percentage of a particular type or quality of security in which the Fund may invest (“Percentage Restrictions”). Percentage Restrictions apply at the time the Fund purchases a security. Circumstances subsequent to the purchase of the security, such as a change in: (1) the Fund’s assets (e.g., due to cash inflows and redemptions), (2) the market value of the security, or (3) the pricing, liquidity, or rating of the security, may cause the Fund to exceed or fall short of the Percentage Restriction. If this happens, the Fund’s continued holding of the security will not constitute a violation of the Percentage Restriction.

 

8


Average Annual Total Returns

 

As of 12-31-04

 

Class A1,2


      

1-year

   11.58 %

5-year

   -10.00 %

Since Fund Inception (12-31-96)

   4.87 %

 

Class A, excluding sales load


      

1-year

   18.43 %

5-year

   -8.93 %

Since Fund Inception (12-31-96)

   5.65 %

 

Class B1,2


      

1-year

   12.71 %

5-year

   -10.12 %

Since Fund Inception (12-31-96)

   5.07 %

 

Class C1,2


      

1-year

   16.71 %

5-year

   -9.51 %

Since Fund Inception (12-31-96)

   5.07 %

 

Class Z1,3


      

1-year

   18.41 %

5-year

   -8.93 %

Since Fund Inception (12-31-96)

   5.79 %

Performance is historical and does not guarantee future results. Investment returns and principal value will fluctuate, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the quoted performance. Call us or visit www.Strong.com for the most recent month-end performance.

 

Fee Waivers:

 

1 From time to time, the Fund’s advisor and/or administrator has waived fees and/or absorbed Fund expenses, which has resulted in higher returns. As of 12-31-04, there are waivers and/or absorptions in effect for all share classes.

 

Performance:

 

2 Average annual total returns reflect the effect of the maximum sales charge of 5.75% for Class A, the applicable contingent deferred sales charge of 5.00% in year 1 and eliminated after year 6 for Class B, and the applicable contingent deferred sales charge of 1.00% and eliminated after 12 months for Class C. The performance of the Class A, B, and C shares is based on the performance of the Fund’s Class Z shares (formerly Retail Class shares) prior to 11-30-00. The performance of the Class A shares is restated to reflect the load and the different expenses of the Class A shares, as applicable. The performance of the Class B shares is restated to reflect the contingent deferred sales charge and the different expenses of the Class B shares, as applicable. The performance of the Class C shares is restated to reflect the contingent deferred sales charge and the different expenses of the Class C shares, as applicable.

 

Please consult a prospectus for information about all share classes.

 

From time to time, the Fund’s performance was significantly enhanced through investments in initial public offerings (IPOs). In addition, the effect of IPOs purchased when the Fund’s asset base was small may have been magnified. Given these circumstances, you should not expect that such enhanced returns can be consistently achieved. Please consider this before investing.

 

General:

 

3 The Class Z shares are closed to new accounts, though the Fund may continue to offer its shares to certain company-sponsored retirement plans, institutional investors meeting specific eligibility requirements, and other limited groups as described in the prospectus.

 

Top Ten Industries

 

Percent of Net Assets, as of 12-31-04

 

Oil & Gas — United States Exploration & Production

   8.4 %

Medical — Health Maintenance Organizations

   6.8 %

Financial Services — Miscellaneous

   5.6 %

Electronics — Semiconductor Manufacturing

   4.3 %

Leisure — Gaming/Equipment

   3.5 %

Leisure — Hotels & Motels

   3.4 %

Computer — IT Services

   3.3 %

Finance — Mortgage & Related Services

   3.3 %

Retail — Restaurants

   3.1 %

Telecommunications — Wireless Services

   3.1 %
    

Top Ten    44.8 %
    


Risks: Stock funds should only be considered for long-term goals as values fluctuate in response to the activities of individual companies and general market and economic conditions. Investment strategies that concentrate in particular market segments or fewer securities tend to increase the total risk of an investment (relative to the broader market). This Fund is exposed to the following specific risks: small- and medium-company risk. Consult the Fund’s prospectus for additional information on these and other risks.

 

9


Strong Advisor Small Cap Value Fund

 

The U.S. equity markets fluctuated for much of 2004 before turning in a strong rally in the fourth quarter. Despite rising interest rates, investors were cheered in part by an incumbent winning the U.S. presidential race and crude oil prices easing from their all-time highs. For the 12 months ending December 31, 2004, the Strong Advisor Small Cap Value Fund’s Class Z shares returned 20.09% versus the 18.33% return of its benchmark, the Russell 2000 Index.

 

Small-capitalization value stocks outperformed their large-and mid-cap counterparts during the period. In fact, small-cap value was one of the top-performing asset classes in 2004. What’s more, the Russell 2000 Index, which includes both value and growth stocks from the small-cap sector, reached record highs during the year and has outperformed the S&P 500 Index, which is dominated by large-cap stocks, for six years in a row.

 

The small-cap value asset class contains many stocks that are underfollowed, undervalued, and underloved. Our team employs a qualitative and quantitative screening process, followed by fundamental research, which allows only companies that meet our high standards to become holdings in the Fund.

 

Industrials, materials, and energy aided performance

 

The industrials and materials sectors added value to the Fund. Within industrials, stocks in construction and engineering, along with commercial services and supplies, performed well and were among the top contributors for the period. Meanwhile, chemical names aided performance in the materials sector. PolyOne Corporation, a specialty polymer manufacturer, was a strong performer from sales of its resin products. On the other hand, despite a solid rally in metals and mining stocks in the third quarter, the Fund experienced a pullback in many of these names during the fourth quarter. However, we continued to have conviction in these stocks, as we believed they could add significant value to the Fund over the long term.

 

The energy sector — in which the Fund remained overweighted compared to the benchmark during the period — also contributed to performance. Several energy equipment and services names, as well as oil and gas securities, were top contributors to performance. Range Resources was a top performer for the energy sector as the oil services and natural gas firm reported higher than expected natural gas reserves. Range Resources is an independent oil and gas company operating in the Southwest, Gulf Coast and Appalachian regions of the United States. In addition, Global Industries, an offshore oil pipeline services firm, was a strong contributor. Global has the largest fleet of service vessels available in the Gulf of Mexico. Many of our energy holdings have been long-term positions for the Fund. While some of these stocks lost ground near the end of the year as energy prices retreated from their October highs, we believed the valuations of the Fund’s energy holdings remained attractive. Investors’ concerns about energy supplies, coupled with international political unrest and high global demand, led us to maintain a positive outlook for this sector throughout 2004.

 

Morningstar® Style Box *

 

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Late in the year, the Fund’s consumer discretionary stocks began moving up, with commercial services and retailers leading performance. The Fund owned well known, yet underfollowed, stocks such as American Eagle Outfitters, Stamps.com, and Circuit City Stores, all of which contributed to performance.

 

Technology and financials disappointed

 

The technology sector slightly detracted from the Fund’s performance for the year. Some technology names rebounded near year end after a difficult third quarter. Software and computer stocks, in particular, produced solid returns and helped performance compared with the benchmark. However, some semiconductor stocks were hit hard at the end of the fourth quarter, namely Cirrus Logic, a multimedia chipmaker for the consumer entertainment industry (DVDs, televisions, digital home theater systems), as well as solutions for automotive and industrial applications. We believed that many technology holdings became overvalued during the year, and therefore we were selective in this area, as we have been for several years.

 

The Fund also underperformed the benchmark in the financials sector. We remained cautious about this area, especially the banking industry, in which the Fund was significantly underweighted compared to the benchmark. Given the rising interest-rate environment, we believed traditional banks might experience downward pressure on their profit margins. We continued to look for companies with the ability to increase revenue growth while possessing underlying fundamentals that met our stringent criteria. Select names within the insurance industry illustrated this point. Versus the benchmark, the Fund maintains a lower concentration of real estate securities, specifically REITs. Due to this underweighting, the Fund underperformed in this area for the year.

 

Looking ahead

 

Despite significant outperformance by the small-cap value asset class during the past six years, we believe many opportunities still exist. While valuations in some groups such as technology and financials appear overextended, we remain alert for pullbacks that could present opportunities for adding to positions in which we have conviction. Meanwhile, our outlook on energy remains constructive, and we continue to maintain larger investments in the sector based on our belief that certain industries in it offer the potential for strong and sustainable earnings growth.

 

The Fund is expected to reorganize into the Wells Fargo Advantage Small Cap Value Fund, the successor to the Strong Advisor Small Cap Value Fund, on or about April 11, 2005.

 

Thank you for your investment in the Strong Advisor Small Cap Value Fund.

 

LOGO

 

I. Charles Rinaldi

 

Portfolio Manager

 


* The Morningstar Style Box reflects a fund’s investment strategy. For equity funds, the vertical axis shows the market capitalization of the stocks owned and the horizontal axis shows investment style (value, blend, or growth).

 

Mention of specific securities in this report is not indicative of whether the Fund may make additional purchases of, sell all or a portion of, or continue to hold those securities.

 

10


Fund Highlights

 

Sector Weightings

 

Percent of Net Assets, as of 12-31-04

 

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Source: Frank Russell Company via FactSet    
    Fund Highlights are continued on next page.

 

11


Strong Advisor Small Cap Value Fund

 

Growth of an Assumed $10,000 Investment

From 12-31-97 to 12-31-04

 

LOGO

 


Performance is historical and does not guarantee future results. Investment returns and principal value will fluctuate, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the quoted performance. Call us or visit www.Strong.com for the most recent month-end performance.

 

This graph, provided in accordance with SEC regulations, compares a $10,000 investment in the Fund, made at its inception, with the performance of the Russell 2000® Index and the Lipper Small-Cap Core Funds Index. Results include the reinvestment of all dividends and capital gains distributions. The graph and the Average Annual Total Returns table do not reflect the deduction of taxes, if any, that a shareholder would pay on Fund distributions or the redemption of Fund shares. This graph is based on Class Z shares only; performance for other classes will vary due to differences in fee structures.

 

Definitions:

 

** The Russell 2000® Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 8% of the total market capitalization of the Russell 3000 Index. The Lipper Small-Cap Core Funds Index is the average of the 30 largest funds in the Lipper Small-Cap Core Funds Category. Source of the Russell Index data is Standard & Poor’s Micropal. Source of the Lipper Index data is Lipper.

 

It is not possible to invest directly in an index.

 

Top Holdings

 

Percent of Net Assets, as of 12-31-04

 

Range Resources Corporation

   4.2 %

Chicago Bridge & Iron Company NV

   3.0 %

Forest Oil Corporation

   2.7 %

Glamis Gold, Ltd.

   2.6 %

Global Industries, Ltd.

   2.2 %

United States Steel Corporation

   2.0 %

Apex Silver Mines, Ltd.

   1.9 %

UNOVA, Inc.

   1.8 %

Steel Dynamics, Inc.

   1.6 %

Beverly Enterprises, Inc.

   1.6 %
    

Top Ten    23.6 %
    


Holdings vary. More complete holdings are available at www.Strong.com.

 

Percentage Restrictions: The Fund’s prospectus and statement of additional information may describe restrictions on the percentage of a particular type or quality of security in which the Fund may invest (“Percentage Restrictions”). Percentage Restrictions apply at the time the Fund purchases a security. Circumstances subsequent to the purchase of the security, such as a change in: (1) the Fund’s assets (e.g., due to cash inflows and redemptions), (2) the market value of the security, or (3) the pricing, liquidity, or rating of the security, may cause the Fund to exceed or fall short of the Percentage Restriction. If this happens, the Fund’s continued holding of the security will not constitute a violation of the Percentage Restriction.

 

12


Average Annual Total Returns

 

As of 12-31-04

 

Class A1,2


      

1-year

   13.00 %

5-year

   18.47 %

Since Fund Inception (12-31-97)

   17.83 %

 

Class A, excluding sales load


      

1-year

   19.89 %

5-year

   19.88 %

Since Fund Inception (12-31-97)

   18.83 %

 

Class B1,2


      

1-year

   13.95 %

5-year

   18.88 %

Since Fund Inception (12-31-97)

   18.83 %

 

Class C1,2


      

1-year

   18.00 %

5-year

   19.13 %

Since Fund Inception (12-31-97)

   18.15 %

 

Class Z1,3


      

1-year

   20.09 %

5-year

   20.10 %

Since Fund Inception (12-31-97)

   19.08 %

Performance is historical and does not guarantee future results. Investment returns and principal value will fluctuate, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the quoted performance. Call us or visit www.Strong.com for the most recent month-end performance.

 

Fee Waivers:

 

1 From time to time, the Fund’s advisor and/or administrator has waived fees and/or absorbed Fund expenses, which has resulted in higher returns. As of 12-31-04, there are waivers and/or absorptions in effect for all share classes.

 

Performance:

 

2 Average annual total returns reflect the effect of the maximum sales charge of 5.75% for Class A, the applicable contingent deferred sales charge of 5.00% in year 1 and eliminated after year 6 for Class B, and the applicable contingent deferred sales charge of 1.00% and eliminated after 12 months for Class C. The performance of the Class A, B, and C shares is based on the performance of the Fund’s Class Z shares (formerly Retail Class shares) prior to 11-30-00. The performance of the Class A shares is restated to reflect the load and the different expenses of the Class A shares, as applicable. The performance of the Class B shares is restated to reflect the contingent deferred sales charge and the different expenses of the Class B shares, as applicable. The performance of the Class C shares is restated to reflect the contingent deferred sales charge and the different expenses of the Class C shares, as applicable.

 

Please consult a prospectus for information about all share classes.

 

From time to time, the Fund’s performance was significantly enhanced through investments in initial public offerings (IPOs). In addition, the effect of IPOs purchased when the Fund’s asset base was small may have been magnified. Given these circumstances, you should not expect that such enhanced returns can be consistently achieved. Please consider this before investing.

 

General:

 

3 The Class Z shares are closed to new accounts, though the Fund may continue to offer its shares to certain company-sponsored retirement plans, institutional investors meeting specific eligibility requirements, and other limited groups as described in the prospectus.

 

Top Ten Industries

 

Percent of Net Assets, as of 12-31-04

 

Oil & Gas — United States Exploration & Production

   12.2 %

Oil & Gas — Field Services

   8.9 %

Metal Ores — Gold/Silver

   8.8 %

Steel — Producers

   5.6 %

Oil & Gas — Drilling

   3.7 %

Building — Heavy Construction

   3.0 %

Insurance — Property/Casualty/Title

   2.8 %

Commercial Services — Security/Safety

   2.7 %

Commercial Services — Staffing

   2.4 %

Medical — Nursing Homes

   2.4 %
    

Top Ten    52.5 %
    


Risks: Stock funds should only be considered for long-term goals as values fluctuate in response to the activities of individual companies and general market and economic conditions. Investment strategies that concentrate in particular market segments or fewer securities tend to increase the total risk of an investment (relative to the broader market). This Fund is exposed to the following specific risks: value-style investing risk and small-company risk. Consult the Fund’s prospectus for additional information on these and other risks.

 

13


Strong Advisor U.S. Value Fund

 

The Strong Advisor U.S. Value Fund outperformed its broad-based index, the S&P 500 Index for the year ended December 31, 2004. The Fund’s Class Z shares returned 14.11%, while the S&P 500 Index returned 10.87%.

 

The first half of 2004 delivered high-energy prices, robust economic data, and solid corporate profits. However, the third quarter was sluggish due to fears that the economy had hit a soft spot. Employment numbers, which were weak in the early stages of the third quarter, turned positive in the final month, which encouraged investors. After the presidential elections in November, we observed a powerful rally in share prices, a resurgence of positive economic data, and a decline in energy prices. The persistence of these positive indicators supported a consensus that a market rally could be sustainable, amid growing concerns over a weaker U.S. dollar, rising interest rates, and a prolonged rebuilding effort in Iraq.

 

Finding “the right company at the right price”

 

Our disciplined investment process focuses on finding the right company at the right price at the right time. We spend virtually all of our time and effort on bottom-up, fundamental stock research. Individual stock selection, not sector allocation, drives the Fund’s performance. During the period, stock selection was particularly strong in financials, utilities, and information technology. The strength of stocks this year, particularly in the fourth quarter, was driven by the optimism of not only shareholders but also corporate managers. Merger-and-acquisition activity heated up significantly, and the Fund owned a number of stocks involved in this trend. Bank One, Charter One Financial, Cox Communications, Provident Financial Group, Public Service Enterprise Group, and SOLA International all received takeover bids, directly benefiting our performance.

 

The Fund’s sector weightings are the direct result of our individual company selections, rather than top-down, macroeconomic considerations. That said, the portfolio benefited this year from having a significant presence in energy, industrial, and utility sectors. As the year progressed, we shifted some energy exposure from exploration and production (E&P) to oil services — for example, Cooper Cameron — amid the euphoric sentiment created by industry consolidation in the E&P group. Moreover, as industrials moved to all-time highs during the year, we moved to an underweighting, compared to the benchmark, in this sector. Within utilities, where we also took profits but remained largely invested throughout the year, electric utility holdings such as First Energy and TXU were standout performers.

 

Morningstar® Style Box *

 

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Investments in insurance

 

Our stance on financial stocks, which was to sell bank stocks into strength and to buy insurance stocks into weakness, has been relatively unchanged for several years and served us well during 2004. Financials have been consistent market performers over this period, never falling out of favor. In fact, financials delivered record earnings and traded at record high prices. One of the primary reasons that value indices have performed so much better than growth indices over the last five years has been the strength in financials. Overall, we significantly reduced financials into 2004’s strength. Within financials, we continued to overweight insurance compared to the benchmark, with names like Loews and SAFECO aiding performance.

 

The Fund benefited from having fewer investments in the very weak technology sector. Despite the sector’s weakness, we were able to take advantage of some specific opportunities and were rewarded for this selectivity through the performance of software giant Microsoft and semiconductor maker Texas Instruments.

 

Our consumer discretionary stocks proved to be drags on performance. Lack of exposure to faster-growing industries such as Internet and catalog retailing detracted from performance. We continued to believe our larger holdings in this sector, Clear Channel Communications and Reader’s Digest Association, represented exceptional value and added to both during the year.

 

As in 2003, the year saw considerable weakness in the U.S. dollar, a condition that is typically more beneficial for larger companies, as they are more likely to be exporters and can therefore benefit from stronger currencies abroad. Despite this, small caps outperformed again in 2004. After six years of underperformance, we believe it is reasonable for investors in large-cap stocks to expect them to play “catch-up” in 2005 and beyond.

 

Focusing on out-of-favor stocks

 

We will continue to keep our heads down and our eyes open, seeking out companies with solid assets, manageable debt levels, and credible management teams. We will work to buy the stocks of these companies at attractive prices — which often come when they are temporarily out of favor with investors. Discipline and patience, along with a strong focus on risk management, continue to be hallmarks of our management style.

 

The Fund is expected to reorganize into the Wells Fargo Advantage U.S. Value Fund, the successor to the Strong Advisor U.S. Value Fund, on or about April 11, 2005.

 

Thank you for your investment in the Strong Advisor U.S. Value Fund.

 

LOGO

 

Robert J. Costomiris

 

Portfolio Manager

 


* The Morningstar Style Box reflects a fund’s investment strategy. For equity funds, the vertical axis shows the market capitalization of the stocks owned and the horizontal axis shows investment style (value, blend, or growth).

 

Mention of specific securities in this report is not indicative of whether the Fund may make additional purchases of, sell all or a portion of, or continue to hold those securities.

 

14


Fund Highlights

 

Sector Weightings

 

Percent of Net Assets, as of 12-31-04

 

LOGO

 

Source: Frank Russell Company via FactSet    
    Fund Highlights are continued on next page.

 

15


Strong Advisor U.S. Value Fund

 

Growth of an Assumed $10,000 Investment

From 12-29-95 to 12-31-04

 

LOGO

 


Performance is historical and does not guarantee future results. Investment returns and principal value will fluctuate, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the quoted performance. Call us or visit www.Strong.com for the most recent month-end performance.

 

This graph, provided in accordance with SEC regulations, compares a $10,000 investment in the Fund, made at its inception, with the performance of the S&P 500 Index and the Lipper Large-Cap Value Funds Index. Results include the reinvestment of all dividends and capital gains distributions. The graph and the Average Annual Total Returns table do not reflect the deduction of taxes, if any, that a shareholder would pay on Fund distributions or the redemption of Fund shares. This graph is based on Class Z shares only; performance for other classes will vary due to differences in fee structures.

 

Definitions:

 

** The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market value weighted index (stock price times number of shares outstanding), with each stock’s weight in the Index proportionate to its market value. The Lipper Large-Cap Value Funds Index is the average of the 30 largest funds in the Lipper Large-Cap Value Funds Category. Source of the S&P Index data is Standard & Poor’s Micropal. Source of the Lipper Index data is Lipper.

 

It is not possible to invest directly in an index.

 

Top Holdings

 

Percent of Net Assets, as of 12-31-04

 

Exxon Mobil Corporation

   5.3 %

General Electric Company

   3.5 %

Comcast Corporation Class A

   3.2 %

Bristol-Myers Squibb Company

   2.6 %

ImClone Systems, Inc.

   2.6 %

Del Monte Foods Company

   2.4 %

Kraft Foods, Inc. Class A

   2.2 %

The Kroger Company

   2.2 %

Clear Channel Communications, Inc.

   2.1 %

Cooper Cameron Corporation

   2.0 %
    

Top Ten    28.1 %
    


Holdings vary. More complete holdings are available at www.Strong.com.

 

Percentage Restrictions: The Fund’s prospectus and statement of additional information may describe restrictions on the percentage of a particular type or quality of security in which the Fund may invest (“Percentage Restrictions”). Percentage Restrictions apply at the time the Fund purchases a security. Circumstances subsequent to the purchase of the security, such as a change in: (1) the Fund’s assets (e.g., due to cash inflows and redemptions), (2) the market value of the security, or (3) the pricing, liquidity, or rating of the security, may cause the Fund to exceed or fall short of the Percentage Restriction. If this happens, the Fund’s continued holding of the security will not constitute a violation of the Percentage Restriction.

 

16


Average Annual Total Returns

 

As of 12-31-04

 

Class A1,2


      

1-year

   7.50 %

5-year

   0.18 %

Since Fund Inception (12-29-95)

   10.01 %

 

Class A, excluding sales load


      

1-year

   14.08 %

5-year

   1.38 %

Since Fund Inception (12-29-95)

   10.74 %

 

Class B1,2


      

1-year

   8.20 %

5-year

   0.28 %

Since Fund Inception (12-29-95)

   10.10 %

 

Class C1,2


      

1-year

   12.15 %

5-year

   0.67 %

Since Fund Inception (12-29-95)

   10.00 %

 

Class K1,2


      

1-year

   14.53 %

5-year

   1.81 %

Since Fund Inception (12-29-95)

   11.18 %

 

Class Z1,3


      

1-year

   14.11 %

5-year

   1.40 %

Since Fund Inception (12-29-95)

   10.93 %

Performance is historical and does not guarantee future results. Investment returns and principal value will fluctuate, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the quoted performance. Call us or visit www.Strong.com for the most recent month-end performance.

 

Fee Waivers:

 

1 From time to time, the Fund’s advisor and/or administrator has waived fees and/or absorbed Fund expenses, which has resulted in higher returns. As of 12-31-04, there are waivers and/or absorptions in effect for all share classes.

 

Performance:

 

2 Average annual total returns reflect the effect of the maximum sales charge of 5.75% for Class A, the applicable contingent deferred sales charge of 5.00% in year 1 and eliminated after year 6 for Class B, and the applicable contingent deferred sales charge of 1.00% and eliminated after 12 months for Class C. The performance of the Class A, B, and C shares is based on the performance of the Fund’s Class Z shares (formerly Retail Class shares) prior to 11-30-00. The performance of the Class A shares is restated to reflect the load and the different expenses of the Class A shares, as applicable. The performance of the Class B shares is restated to reflect the contingent deferred sales charge and the different expenses of the Class B shares, as applicable. The performance of the Class C shares is restated to reflect the contingent deferred sales charge and the different expenses of the Class C shares, as applicable. The performance of Class K shares prior to 12-31-01, is based on the Fund’s Class Z shares’ performance.

 

Please consult a prospectus for information about all share classes.

 

General:

 

3 The Class Z shares are closed to new accounts, though the Fund may continue to offer its shares to certain company-sponsored retirement plans, institutional investors meeting specific eligibility requirements, and other limited groups as described in the prospectus.

 

Top Ten Industries

 

Percent of Net Assets, as of 12-31-04

 

Oil & Gas — International Integrated

   8.2 %

Diversified Operations

   6.4 %

Food — Miscellaneous Preparation

   6.0 %

Medical — Biomedical/Biotechnology

   5.3 %

Utility — Electric Power

   5.0 %

Media — Radio/TV

   4.6 %

Telecommunications — Services

   4.6 %

Banks — Money Center

   4.4 %

Media — Cable TV

   3.4 %

Medical — Ethical Drugs

   3.2 %
    

Top Ten    51.1 %
    


Risks: Stock funds should only be considered for long-term goals as values fluctuate in response to the activities of individual companies and general market and economic conditions. Investment strategies that concentrate in particular market segments or fewer securities tend to increase the total risk of an investment (relative to the broader market). This Fund is exposed to value-style investing risk. Consult the Fund’s prospectus for additional information on this and other risks.

 

17


Strong Advisor Endeavor Large Cap Fund

 

The U.S. stock market delivered a second consecutive year of gains to investors in 2004. The economy grew in fits and starts, making equity returns volatile, with much of the year’s gain being produced in the fourth quarter. For the year ended December 31, 2004, the Strong Advisor Endeavor Large Cap Fund’s Class A shares returned 8.79% (15.38% when excluding the initial sales charge), compared to its broad-based benchmark, the S&P 500 Index, which advanced 10.87%. The Fund performed well against its benchmark, as it focused on companies with the strongest fundamentals and avoided many of the period’s highly publicized disappointments.

 

The year tested investors, as gains in the equity market were limited for much of the year by uncertainty about the presidential election, uneven job growth, increasing energy prices, rising short-term interest rates, a declining dollar, and continued turmoil in Iraq. Despite these trends, the economy continued to expand, and many companies experienced healthy profit growth that supported higher stock prices.

 

Investigative approach to investing

 

Throughout the year we executed on our intensive research process of “surrounding the company” in order to generate competitive returns for our shareholders. We attempt to delve deeply into each company through financial statement analysis, conversations with management and channel checks of suppliers, customers and competitors. By utilizing this encompassing model, we are often able to identify companies that have the potential to produce a great deal of value relative to the required investment. Moreover, the process tends to provide us with comprehensive knowledge regarding each of the Fund’s holdings.

 

Equally important is the fact that our team encourages an environment open to dissent. Within this environment, portfolio managers and analysts constantly challenge each individual investment. Every question presented requires the investment to further justify its position within the Fund. This is a well-established and respected practice of all team members that should continue to assist us in assessing the risk and reward of every investment.

 

Holdings that outperformed

 

Due to the concerns about oil supply relative to growing demand, companies that produce energy and those that make equipment to recover energy performed well. One of these was Canadian Natural Resources, a premier exploration and production company with substantial potential for production growth from its Horizon oil sands project, located in Alberta, Canada. Horizon is expected to come on line in 2008 and has been estimated to be capable of producing up to six billion barrels of oil over about 40 years. In addition to its Alberta operations, the company has holdings in the North Sea and West Africa.

 

Morningstar® Style Box *

 

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Another top performer for the year was Yahoo!. One of the key drivers for this online media company was an increase in online advertising. During the period, online media represented almost 15% of total media consumption by consumers and continued to gain market share. However, only 3% to 5% of total advertising dollars were spent online. If recent trends persist, this gap could start to close next year. Yahoo!’s competitive advantages are its breadth of offerings to advertisers, its global reach, and its breadth of product offerings on wireline and wireless devices.

 

Despite solid fundamental results, the Fund’s holding in Teva Pharmaceuticals underperformed in 2004 due to investors’ concern regarding future competition in both the branded and generic pharmaceutical businesses. We believe this negative sentiment will prove misguided and we continue to hold the stock. In 2005, we hope to see confirmation of our positive fundamental outlook for the generic industry, numerous new product launches for Teva, and stable market share trends for Teva’s largest branded product, Copaxone.

 

Outlook for 2005

 

As we enter 2005, we are optimistic that the economy will continue to strengthen, driven by accelerating enterprise, capital spending, and a resultant growth in earnings. The market remains constructive, climbing a “wall of worry” reflecting investors’ concerns about the health of the consumer, fading fiscal stimulus, record budget and trade deficits, a falling dollar, and uncertain employment growth.

 

Companies today have record levels of free cash flow but thus far have been reluctant to invest in large-scale projects. Consequently, we have seen a huge build-up in liquidity, with corporate debt levels at fifty-year lows. Historically rising corporate profits and cash flows have led to accelerating capital investment. For this reason, we believe that most of the capital spending cycle and inventory build-up is yet to come.

 

In addition, we will pay close attention to the levels of job creation, long-term interest rates and the resulting impact on the U.S. dollar. As always, we will continue to carefully select holdings for the Fund, emphasizing companies possessing unique and strong fundamentals.

 

The Fund is expected to reorganize into the Wells Fargo Advantage Endeavor Large Cap Fund, the successor to the Strong Advisor Endeavor Large Cap Fund, on or about April 11, 2005.

 

Thank you for your continued investment in the Strong Advisor Endeavor Large Cap Fund. We appreciate the trust you have placed in us.

 

LOGO

 

Thomas J. Pence

 

Portfolio Manager

 


* The Morningstar Style Box reflects a fund’s investment strategy. For equity funds, the vertical axis shows the market capitalization of the stocks owned and the horizontal axis shows investment style (value, blend, or growth).

 

Mention of specific securities in this report is not indicative of whether the Fund may make additional purchases of, sell all or a portion of, or continue to hold those securities.

 

18


Fund Highlights

 

Sector Weightings

 

Percent of Net Assets, as of 12-31-04

 

LOGO

 

Source: Frank Russell Company via FactSet

 

Fund Highlights are continued on next page.

 

19


Strong Advisor Endeavor Large Cap Fund

 

Growth of an Assumed $10,000 Investment

From 9-28-01 to 12-31-04

 

LOGO

 


Performance is historical and does not guarantee future results. Investment returns and principal value will fluctuate, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the quoted performance. Call us or visit www.Strong.com for the most recent month-end performance.

 

This graph, provided in accordance with SEC regulations, compares a $10,000 investment in the Fund, made at its inception, with the performance of the S&P 500 Index and the Lipper Large-Cap Growth Funds Index. Results include the reinvestment of all dividends and capital gains distributions. The graph and the Average Annual Total Returns table do not reflect the deduction of taxes, if any, that a shareholder would pay on Fund distributions or the redemption of Fund shares. This graph is based on Class A shares only and reflects the effect of the maximum sales charge of 5.75%; performance for other share classes will vary due to differences in fee structures and sales charges.

 

Definitions:

 

** The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market value weighted index (stock price times number of shares outstanding), with each stock’s weight in the Index proportionate to its market value. The Lipper Large-Cap Growth Funds Index is the average of the 30 largest funds in the Lipper Large-Cap Growth Funds Category. Source of the S&P 500 Index data is Standard & Poor’s Micropal. Source of the Lipper Index data is Lipper.

 

It is not possible to invest directly in an index.

 

Top Holdings

 

Percent of Net Assets, as of 12-31-04

 

Yahoo! Inc.

   5.1 %

Sprint Corporation

   4.6 %

WellPoint, Inc.

   4.1 %

EMC Corporation

   3.8 %

General Electric Company

   3.7 %

Dell, Inc.

   3.5 %

Phelps Dodge Corporation

   2.9 %

Oracle Systems Corporation

   2.7 %

Texas Instruments, Inc.

   2.6 %

Halliburton Company

   2.6 %
    

Top Ten    35.6 %
    


Holdings vary. More complete holdings are available at www.Strong.com.

 

Percentage Restrictions: The Fund’s prospectus and statement of additional information may describe restrictions on the percentage of a particular type or quality of security in which the Fund may invest (“Percentage Restrictions”). Percentage Restrictions apply at the time the Fund purchases a security. Circumstances subsequent to the purchase of the security, such as a change in: (1) the Fund’s assets (e.g., due to cash inflows and redemptions), (2) the market value of the security, or (3) the pricing, liquidity, or rating of the security, may cause the Fund to exceed or fall short of the Percentage Restriction. If this happens, the Fund’s continued holding of the security will not constitute a violation of the Percentage Restriction.

 

20


Average Annual Total Returns

 

As of 12-31-04

 

Class A1,2


      

1-year

   8.79 %

3-year

   1.14 %

Since Fund Inception (9-28-01)

   3.61 %

 

Class A, excluding sales load


      

1-year

   15.38 %

3-year

   3.17 %

Since Fund Inception (9-28-01)

   5.51 %

 

Class B1,2


      

1-year

   9.44 %

3-year

   1.30 %

Since Fund Inception (9-28-01)

   4.06 %

 

Class C1,2


      

1-year

   13.44 %

3-year

   2.58 %

Since Fund Inception (9-28-01)

   4.90 %

Performance is historical and does not guarantee future results. Investment returns and principal value will fluctuate, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the quoted performance. Call us or visit www.Strong.com for the most recent month-end performance.

 

Fee Waivers:

 

1 From time to time, the Fund’s advisor and/or administrator has waived fees and/or absorbed Fund expenses, which has resulted in higher returns. As of 12-31-04, there are waivers and/or absorptions in effect for all share classes.

 

Performance:

 

2 Average annual total returns include the effect of the maximum sales charge of 5.75% for Class A, the applicable contingent sales charge of 5.00% in year 1 and eliminated after year 6 for Class B, and the applicable contingent deferred sales charge of 1.00% and eliminated after 12 months for Class C.

 

Please consult a prospectus for information about all share classes.

 

Top Ten Industries

 

Percent of Net Assets, as of 12-31-04

 

Medical — Products

   6.9 %

Electronics — Semiconductor Manufacturing

   6.6 %

Telecommunications — Wireless Equipment

   5.3 %

Internet — Content

   5.1 %

Diversified Operations

   5.1 %

Telecommunications — Services

   4.6 %

Medical — Health Maintenance Organizations

   4.1 %

Computer — Manufacturers

   3.9 %

Computer — Data Storage

   3.8 %

Metal Ores — Miscellaneous

   2.9 %
    

Top Ten

   48.3 %
    


Risks: Stock funds should only be considered for long-term goals as values fluctuate in response to the activities of individual companies and general market and economic conditions. Investment strategies that concentrate in particular market segments or fewer securities tend to increase the total risk of an investment (relative to the broader market). This Fund is exposed to growth-style investing risk. Consult the Fund’s prospectus for additional information on this and other risks.

 

 

21


Strong Advisor Focus Fund

 

For the year ended December 31, 2004, the Strong Advisor Focus Fund’s Class A shares delivered a very strong return of 11.16% in 2004 (18.03% when excluding the initial sales charge). This bested the S&P 500 Index, the Fund’s broad-based benchmark, which returned 10.87% including reinvested dividends.

 

Four broad trends dominated 2004. First, the economy experienced continued robust corporate earnings growth. Second, long-term interest rates surprised most market prognosticators by finishing the year lower than where they started. Third, political uncertainty was alleviated by the clean George W. Bush victory, unmarred by any terrorist events or procedural troubles. This, we believe, gave the market the spark of confidence needed to ignite the subsequent fourth-quarter rally. The fourth trend in evidence during 2004 was another year of dominance by value stocks over growth stocks. The Fund performed well in this “value” environment by concentrating on finding and investing in the stocks of companies that exemplified the theme of dominant business models generating dynamic market share growth.

 

Searching for “share-gainers”

 

Our investment process emphasizes security selection as the main determinant of our portfolio construction. We focus our research on what we call “share-gainers” — that is, those companies that have developed business models that allow them not only to grow faster than the underlying economy but to do so in a sustainable fashion. Moreover, the Fund was populated with industry leaders, regardless of their size, as these companies often have sustainable advantages over their competition. A key driver of the Fund’s returns was our analysts’ ability to identify companies with growth prospects that were underestimated by the market. To be clear, it is not only the rate of growth that is important, but also how long we expect that growth to last.

 

One other factor that helped contribute to the Fund’s returns was our sell discipline. If we begin to suspect that a security’s underlying fundamentals are not performing in line with or better than our expectations, we generally trim or sell the position. Strong growth stocks often receive premium valuations, but that premium can collapse if the market suddenly becomes skeptical about the company’s future prospects.

 

Morningstar® Style Box*

 

LOGO

 

Google outperforms

 

Internet search engine provider Google was an addition to the Fund in 2004 that exemplified our process. Our fundamental research identified Google as an attractive investment opportunity. We recognized that Google was not only benefiting from increased usage of the Internet, but also from the movement of advertisers’ dollars away from traditional media to the Internet. Moreover, the returns its business model generated were some of the best we found in any sector of the economy.

 

Outlook for 2005

 

In the latter half of the year, the yield curve flattened considerably, as the Fed kept raising short-term interest rates, while long-term rates stayed about where they were. To us, this signaled the bond market’s perception that economic growth may slow in the coming months. If the economy does in fact decelerate, it would make finding rapidly growing companies more difficult. Nevertheless, we are confident that our focus on share-gainers can help us find good growth opportunities in a wide variety of economic environments.

 

Effective January 1, 2005, John S. Dale, CFA, and Gary E. Nussbaum, CFA, of Peregrine Capital Management, Inc., became the Portfolio Co-Managers of the Fund. In addition, the Fund is expected to reorganize into the Wells Fargo Advantage Large Company Growth Fund on or about April 11, 2005.

 

It has been my pleasure in being the Fund’s Portfolio Manager over the last year and a half. Thank you for your investment in the Strong Advisor Focus Fund.

 

LOGO

 

Thomas C. Ognar

 

Portfolio Manager

 


* The Morningstar Style Box reflects a fund’s investment strategy. For equity funds, the vertical axis shows the market capitalization of the stocks owned and the horizontal axis shows investment style (value, blend, or growth).

 

Mention of specific securities in this report is not indicative of whether the Fund may make additional purchases of, sell all or a portion of, or continue to hold those securities.

 

22


Fund Highlights

 

Sector Weightings

 

Percent of Net Assets, as of 12-31-04

 

LOGO

 

Source: Frank Russell Company via FactSet

 

Fund Highlights are continued on next page.

 

23


Strong Advisor Focus Fund

 

Growth of an Assumed $10,000 Investment

From 11-30-00 to 12-31-04

 

LOGO


Performance is historical and does not guarantee future results. Investment returns and principal value will fluctuate, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the quoted performance. Call us or visit www.Strong.com for the most recent month-end performance.

 

This graph, provided in accordance with SEC regulations, compares a $10,000 investment in the Fund, made at its inception, with the performance of the S&P 500 Index and the Lipper Multi-Cap Growth Funds Index. Results include the reinvestment of all dividends and capital gains distributions. The graph and the Average Annual Total Returns table do not reflect the deduction of taxes, if any, that a shareholder would pay on Fund distributions or the redemption of Fund shares. This graph is based on Class A shares only and reflects the effect of the maximum sales charge of 5.75%; performance for other classes will vary due to differences in fee structures and sales charges.

 

Definitions:

 

** The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market value weighted index (stock price times number of shares outstanding), with each stock’s weight in the Index proportionate to its market value. The Lipper Multi-Cap Growth Funds Index is the average of the 30 largest funds in the Lipper Multi-Cap Growth Funds Category. Source of the S&P Index data is Standard & Poor’s Micropal. Source of the Lipper Index data is Lipper.

 

It is not possible to invest directly in an index.

 

Top Holdings

 

Percent of Net Assets, as of 12-31-04

 

eBay, Inc.

   7.4 %

Dell, Inc.

   6.7 %

PETCO Animal Supplies, Inc.

   6.7 %

First Marblehead Corporation

   6.1 %

Digital River, Inc.

   4.8 %

Gilead Sciences, Inc.

   4.4 %

PETsMART, Inc.

   4.4 %

Hughes Supply, Inc.

   4.1 %

St. Jude Medical, Inc.

   3.7 %

Kinetic Concepts, Inc.

   3.6 %
    

Top Ten

   51.9 %
    


Holdings vary. More complete holdings are available at www.Strong.com.

 

Percentage Restrictions: The Fund’s prospectus and statement of additional information may describe restrictions on the percentage of a particular type or quality of security in which the Fund may invest (“Percentage Restrictions”). Percentage Restrictions apply at the time the Fund purchases a security. Circumstances subsequent to the purchase of the security, such as a change in: (1) the Fund’s assets (e.g., due to cash inflows and redemptions), (2) the market value of the security, or (3) the pricing, liquidity, or rating of the security, may cause the Fund to exceed or fall short of the Percentage Restriction. If this happens, the Fund’s continued holding of the security will not constitute a violation of the Percentage Restriction.

 

24


Average Annual Total Returns

 

As of 12-31-04

 

Class A1,2


      

1-year

   11.16 %

3-year

   0.24 %

Since Fund Inception (11-30-00)

   -9.46 %

 

Class A, excluding sales load


      

1-year

   18.03 %

3-year

   2.22 %

Since Fund Inception (11-30-00)

   -8.14 %

 

Class B1,2


      

1-year

   12.89 %

3-year

   0.55 %

Since Fund Inception (11-30-00)

   -9.27 %

 

Class C1,2


      

1-year

   16.89 %

3-year

   1.85 %

Since Fund Inception (11-30-00)

   -8.62 %

Performance is historical and does not guarantee future results. Investment returns and principal value will fluctuate, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the quoted performance. Call us or visit www.Strong.com for the most recent month-end performance.

 

Fee Waivers:

 

1 From time to time, the Fund’s advisor and/or administrator has waived fees and/or absorbed Fund expenses, which has resulted in higher returns. As of 12-31-04, there are waivers and/or absorptions in effect for all share classes.

 

Performance:

 

2 Average annual total returns include the effect of the maximum sales charge of 5.75% for Class A, the applicable contingent sales charge of 5.00% in year 1 and eliminated after year 6 for Class B, and the applicable contingent deferred sales charge of 1.00% and eliminated after 12 months for Class C.

 

Please consult a prospectus for information about all share classes.

 

Top Ten Industries

 

Percent of Net Assets, as of 12-31-04

 

Retail — Miscellaneous

   11.0 %

Medical — Products

   10.1 %

Internet — E*Commerce

   7.5 %

Computer — Manufacturers

   6.7 %

Financial Services — Miscellaneous

   6.1 %

Electronics — Semiconductor Manufacturing

   5.4 %

Internet — Network Security/Solutions

   4.8 %

Medical — Biomedical/Biotechnology

   4.4 %

Retail/Wholesale — Building Products

   4.1 %

Commercial Services — Schools

   3.7 %
    

Top Ten    63.8 %
    


Risks: Stock funds should only be considered for long-term goals as values fluctuate in response to the activities of individual companies and general market and economic conditions. Investment strategies that concentrate in particular market segments or fewer securities tend to increase the total risk of an investment (relative to the broader market). This Fund is exposed to the following specific risks: growth-style investing risk, nondiversified portfolio risk, and small- and medium-company risk. Consult the Fund’s prospectus for additional information on these and other risks.

 

25


Strong Advisor International Core Fund

 

The Strong Advisor International Core Fund’s Class A shares rose 12.51% during the year ending December 31, 2004 (19.38% when excluding the initial sales charge). This return trailed the Morgan Stanley Capital International Europe Australasia, and Far East (MSCI EAFE) Index, which returned 20.25% during the same period.

 

The Fund’s performance was helped by positive stock selection. By contrast, sector allocation, especially investments in consumer staples, detracted from results. However, the main reason the Fund lagged the MSCI EAFE was a lack of sufficient exposure to certain foreign currencies. Especially during the fourth quarter of 2004, many currencies experienced significant appreciation against the U.S. dollar. The Fund was generally invested in countries whose currencies did not see the strongest relative performance. For example, currencies in Canada, Brazil, Hong Kong, Singapore and Mexico — all markets we overweighted compared to the benchmark — rose an average of 3.7% during the year’s final three months. By contrast, the euro, yen, and British pound gained over 7.0% against the dollar. Our underweighting in Europe, including the U.K., and in Japan hurt relative performance when investment gains were translated back to dollars.

 

Strong fourth quarter for global equities

 

Major global stock markets found themselves stuck in trading ranges for most of the first three quarters of the year. During this period of investor malaise, high-quality, large-capitalization stocks came back into favor. This trend helped the Fund’s performance because our investment style has always favored companies with stable earnings growth, strong balance sheets and sound management practices — the very qualities being rewarded by the market.

 

In the fourth quarter, however, global investors once again became more risk tolerant. In their view, the fall in oil prices and the apparent success of China’s efforts to stabilize its economy were beneficial to global growth. Investors also believed that the re-election of President Bush would generate more initiatives to stimulate the U.S. economy. As in 2003, global investors favored emerging markets and lower-quality, small-capitalization stocks.

 

Stock selection helped

 

Positive security selection provided the strongest contribution to the Fund’s performance. Stock picks in the materials and energy sectors were particularly helpful. We have emphasized these two sectors for two years now because we believed that commodity prices would increase, based on tight supplies and growing demand, especially from China. Commodity prices did indeed increase during 2004, and portfolio holdings benefiting from this trend included BHP Billiton, an Australian mining and oil company; Companhia Vale do Rio Doce, a Brazilian iron ore miner; Encana, a Canadian energy company; and ENI, an Italian energy company. As valuations rose throughout the year, we believed that these sectors became less compelling, so we took profits in large holdings and reduced our larger positions.

 

Morningstar® Style Box*

 

LOGO

 

By contrast, results were dragged down by the lackluster performance of global consumer staples stocks. For example, European stocks in this sector, such as French beauty products maker L’Oreal and Swiss food company Nestlé, were hurt by weakness in the U.S. dollar, increasingly tough earnings comparisons, and compressed profit margins related to higher raw material costs.

 

Results from our investments in Asia were mixed. The Fund benefited from strong stock selection in Hong Kong as real estate prices continued to rebound. For example, Swire Pacific, with interests in office real state and aviation, saw its share price increase along with expectations for the local economy. Performance from Japanese holdings was more subdued. The Fund benefited from exporters Hitachi and Komatsu as well as retailer Daimaru, which gained along with Japan’s economy. However, the Fund’s smaller holdings in Japanese financial stocks, which rebounded sharply during the year’s fourth quarter, detracted from results.

 

Risks and opportunities

 

International investors face a number of risks in the year ahead, including the potential for more geopolitical instability, further U.S. dollar depreciation leading to faster Federal Reserve rate hikes, and disappointing European economic growth causing a slowdown in earnings. On the other hand, an unexpected drop in oil prices would be very beneficial to the economy. Also, if the Bush administration’s fiscal policies can stimulate the U.S. economy, our trading partners may benefit as well. A healthy economy in China would have a similar effect on its own trading partners, especially in Asia.

 

We are looking for an increasingly risk-averse investment environment in 2005, which may favor high-quality, large-cap stocks. However, after two consecutive years of strong returns, it is reasonable to expect that global markets may lack clear near-term direction.

 

Effective January 1, 2005, Mark Beale and Richard D. Lewis of New Star Institutional Managers Limited became the Portfolio Co-Managers of the Fund. In addition, the Fund is expected to reorganize into the Wells Fargo Advantage International Core Fund on or about April 11, 2005.

 

Thank you for your investment in the Strong Advisor International Core Fund.

 


* The Morningstar Style Box reflects a fund’s investment strategy. For equity funds, the vertical axis shows the market capitalization of the stocks owned and the horizontal axis shows investment style (value, blend, or growth).

 

Mention of specific securities in this report is not indicative of whether the Fund may make additional purchases of, sell all or a portion of, or continue to hold those securities.

 

26


Fund Highlights

 

Sector Weightings

 

Percent of Net Assets, as of 12-31-04

 

LOGO

 

Source: Frank Russell Company via FactSet

 

Fund Highlights are continued on next page.

 

27


Strong Advisor International Core Fund

 

Growth of an Assumed $10,000 Investment

From 9-28-01 to 12-31-04

 

LOGO


Performance is historical and does not guarantee future results. Investment returns and principal value will fluctuate, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the quoted performance. Call us or visit www.Strong.com for the most recent month-end performance.

 

This graph, provided in accordance with SEC regulations, compares a $10,000 investment in the Fund, made at its inception, with the performance of the Morgan Stanley Capital International Europe, Australasia, and Far East (“MSCI EAFE”) Index and the Lipper International Multi-Cap Core Funds Index. Results include the reinvestment of all dividends and capital gains distributions. The graph and the Average Annual Total Returns table do not reflect the deduction of taxes, if any, that a shareholder would pay on Fund distributions or the redemption of Fund shares. This graph is based on Class A shares only and reflects the effect of the maximum sales charge of 5.75%; performance for other share classes will vary due to differences in fee structures and sales charges.

 

Definitions:

 

** The MSCI EAFE® Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. and Canada. The Lipper International Multi-Cap Core Funds Index is the average of the 30 largest funds in the Lipper International Multi-Cap Core Funds Category. These funds invest assets in securities with primary trading markets outside of the United States. Source of the MSCI EAFE Index data is Standard & Poor’s Micropal. Source of the Lipper Index data is Lipper.

 

  It is not possible to invest directly in an index.

 

Top Countries

 

Percent of Net Assets, as of 12-31-04

 

Japan

   20.0 %

United Kingdom

   17.9 %

France

   10.8 %

Switzerland

   6.9 %

Germany

   6.5 %

Netherlands

   4.8 %

Singapore

   3.7 %

Italy

   3.5 %

Brazil

   2.9 %

Hong Kong

   2.9 %
    

Top Ten

   79.9 %
    


Holdings vary. More complete holdings are available at www.Strong.com.

 

Percentage Restrictions: The Fund’s prospectus and statement of additional information may describe restrictions on the percentage of a particular type or quality of security in which the Fund may invest (“Percentage Restrictions”). Percentage Restrictions apply at the time the Fund purchases a security. Circumstances subsequent to the purchase of the security, such as a change in: (1) the Fund’s assets (e.g., due to cash inflows and redemptions), (2) the market value of the security, or (3) the pricing, liquidity, or rating of the security, may cause the Fund to exceed or fall short of the Percentage Restriction. If this happens, the Fund’s continued holding of the security will not constitute a violation of the Percentage Restriction.

 

28


Average Annual Total Returns

 

As of 12-31-04

 

Class A1,2,3


      

1-year

   12.51 %

3-year

   7.86 %

Since Fund Inception (9-28-01)

   8.56 %

Class A, excluding sales load


      

1-year

   19.38 %

3-year

   10.02 %

Since Fund Inception (9-28-01)

   10.55 %

Class B1,2,3


      

1-year

   14.32 %

3-year

   8.93 %

Since Fund Inception (9-28-01)

   9.77 %

Class C1,2,3


      

1-year

   18.44 %

3-year

   10.03 %

Since Fund Inception (9-28-01)

   10.53 %

Performance is historical and does not guarantee future results. Investment returns and principal value will fluctuate, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the quoted performance. Call us or visit www.Strong.com for the most recent month-end performance.

 

Fee Waivers:

 

1 From time to time, the Fund’s advisor and/or administrator has waived fees and/or absorbed Fund expenses, which has resulted in higher returns. As of 12-31-04, there are waivers and/or absorptions in effect for all share classes.

 

Performance:

 

2 Average annual total returns include the effect of the maximum sales charge of 5.75% for Class A, the applicable contingent sales charge of 5.00% in year 1 and eliminated after year 6 for Class B, and the applicable contingent deferred sales charge of 1.00% and eliminated after 12 months for Class C.
3 The Fund’s Class A, B, and C shares have a redemption fee of 1.00% against shares that are held 30 calendar days or fewer after purchase. Performance data does not reflect the deduction of this fee, which, if reflected, would reduce the performance. Please consult a prospectus for information about all share classes.

 

Top Ten Industries

 

Percent of Net Assets, as of 12-31-04

 

Oil & Gas — International Integrated

   8.4 %

Banks — Money Center

   7.8 %

Banks — Foreign

   7.2 %

Diversified Operations

   5.6 %

Medical — Ethical Drugs

   4.0 %

Medical — Products

   3.6 %

Telecommunications — Wireless Services

   3.1 %

Metal Ores — Miscellaneous

   3.0 %

Finance — Index Tracking Fund

   2.8 %

Electronics — Miscellaneous Components

   2.8 %
    

Top Ten

   48.3 %
    


Risks: Stock funds should only be considered for long-term goals as values fluctuate in response to the activities of individual companies and general market and economic conditions. Investments in foreign companies often present more risk because of currency exchange fluctuation, government regulations, and the potential for political and economic instability. These risks are generally intensified in emerging markets. Consult the Fund’s prospectus for additional information on these and other risks.

 

29


Strong Advisor Select Fund

 

In 2004, the Fund continued to focus on companies with the strongest fundamentals and avoided many of the highly publicized disappointments during the period. For the year ended December 31, 2004, the Strong Advisor Select Fund’s Class A shares rose by 10.09% (16.80% when excluding the initial sales charge), compared to its broad-based benchmark, the S&P 500 Index, which advanced 10.87%. As the economy grew in fits and starts, equity returns were volatile, with much of the year’s gain being produced in the fourth quarter.

 

Putting our comprehensive analysis to work

 

Throughout the year we executed on our intensive research process of “surrounding the company” in order to generate competitive returns for the Fund’s shareholders. We attempt to delve deeply into each company through financial statement analysis, conversations with management and, lastly, investigations of suppliers, customers, and competitors. By utilizing this encompassing model, we are often able to identify companies that produce a great deal of value relative to the required investment. Moreover, the process tends to provide us with comprehensive knowledge regarding each of the Fund’s holdings and specifically, we can gain a better understanding of where the growth is being generated.

 

Equally important to our methodology is the fact that our team operates in an environment open to dissent. Within this environment, portfolio managers and analysts constantly challenge each individual investment. Every question presented requires the investment’s position in the portfolio to be further justified. This practice is well established and respected among all team members, and it should continue to play a vital role in helping us assess the risk and reward of every investment the Fund owns.

 

Two contributors to performance

 

Our extensive research also enables us to analyze interesting and non-traditional growth opportunities in the market, such as those recently provided by the energy sector. Due to the concerns about oil supply relative to growing demand, companies that produce energy and those that make equipment to recover energy performed well. One of these was Canadian Natural Resources, a premier exploration and production company with substantial potential for production growth from its Horizon oil sands project, located in Alberta, Canada. Horizon is expected to come online in 2008 and has been estimated to be capable of producing up to six billion barrels of oil over about 40 years. In addition to its Alberta operations, Canadian Natural Resources has energy holdings in the North Sea and West Africa.

 

Morningstar® Style Box*

 

LOGO

 

Another top performer for the year was Sprint Corporation. In 2004, the diversified telecommunications company, aided particularly by strength in its wireless business, reduced debt levels, streamlined operations and worked to create packaged bundles of communications services for customers.

 

What’s more, in December Sprint announced a merger with Nextel Communications. In our opinion, the merger created a favorable position for Sprint by reducing the number of competitors in the industry. Moreover, the union looked to be a very complementary one. If approved by the regulatory agencies, the merger would allow Sprint not only to tap into Nextel’s vast base of corporate customers, but also to gain access to the proprietary Direct Connect functionality of Nextel’s phones. Lastly, Sprint announced plans, in regards to the merger, to potentially sell its wireline business in an effort to streamline operations.

 

Looking ahead to 2005

 

As we enter 2005, we believe the key question is not whether the economy will grow but rather to what degree. We are optimistic that the economy will continue to strengthen, driven by accelerating enterprise capital spending and a resultant growth in earnings.

 

The market remains constructive, climbing a “wall of worry” reflecting investors’ concerns about the health of the consumer, fading fiscal stimulus, record budget and trade deficits, rising interest rates, a falling dollar, and uncertain employment growth. Companies today have record levels of free cash flow but thus far have seemed reluctant to invest in large-scale projects. Consequently, we have seen a huge build-up in liquidity, with corporate debt levels at fifty-year lows. Historically, rising corporate profits and cash flows have led to accelerating capital investment. For this reason, we believe that most of the capital spending cycle and inventory build-up is yet to come.

 

In addition, we will pay close attention to the levels of job creation, long-term interest rates and the resulting impact on the U.S. dollar. As always, we will continue to carefully select holdings for the fund, attempting to emphasize companies possessing unique and strong fundamentals.

 

The Fund is expected to reorganize into the Wells Fargo Advantage Endeavor Select Fund, the successor to the Strong Advisor Select Fund, on or about April 11, 2005.

 

Thank you for your continued investment in the Strong Advisor Select Fund. We appreciate the trust you have placed in us.

 

LOGO

Thomas J. Pence

Portfolio Co-Manager

 

LOGO

Erik J. Voss

Portfolio Co-Manager

 


* The Morningstar Style Box reflects a fund’s investment strategy. For equity funds, the vertical axis shows the market capitalization of the stocks owned and the horizontal axis shows investment style (value, blend, or growth).

 

Mention of specific securities in this report is not indicative of whether the Fund may make additional purchases of, sell all or a portion of, or continue to hold those securities.

 

30


Fund Highlights

 

Sector Weightings

 

Percent of Net Assets, as of 12-31-04

 

LOGO

 

Source: Frank Russell Company via FactSet

 

Fund Highlights are continued on next page.

 

31


Strong Advisor Select Fund

 

Growth of an Assumed $10,000 Investment

From 12-29-00 to 12-31-04

 

LOGO


Performance is historical and does not guarantee future results. Investment returns and principal value will fluctuate, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the quoted performance. Call us or visit www.Strong.com for the most recent month-end performance.

 

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 S&P 500 Index and the Lipper Multi-Cap Growth Funds Index. Results include the reinvestment of all dividends and capital gains distributions. The graph and the Average Annual Total Returns table do not reflect the deduction of taxes, if any, that a shareholder would pay on Fund distributions or the redemption of Fund shares. This graph is based on Class A shares only and reflects the effect of the maximum sales charge of 5.75%; performance for other classes will vary due to differences in fee structures and sales charges.

 

Definitions:

 

** The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market value weighted index (stock price times number of shares outstanding), with each stock’s weight in the Index proportionate to its market value. The Lipper Multi-Cap Growth Funds Index is the average of the 30 largest funds in the Lipper Multi-Cap Growth Funds Category. Source of the S&P Index data is Standard & Poor’s Micropal. Source of the Lipper Index data is Lipper.

 

  It is not possible to invest directly in an index.

 

Top Holdings

 

Percent of Net Assets, as of 12-31-04

 

Yahoo! Inc.

   5.8 %

Marvel Enterprises, Inc.

   4.8 %

Sprint Corporation

   4.6 %

WellPoint, Inc.

   4.5 %

EMC Corporation

   4.3 %

Phelps Dodge Corporation

   3.9 %

General Electric Company

   3.7 %

Dell, Inc.

   3.4 %

Harman International Industries, Inc.

   3.3 %

Oracle Systems Corporation

   3.3 %
    

Top Ten

   41.6 %
    

 


Holdings vary. More complete holdings are available at www.Strong.com.

 

Percentage Restrictions: The Fund’s prospectus and statement of additional information may describe restrictions on the percentage of a particular type or quality of security in which the Fund may invest (“Percentage Restrictions”). Percentage Restrictions apply at the time the Fund purchases a security. Circumstances subsequent to the purchase of the security, such as a change in: (1) the Fund’s assets (e.g., due to cash inflows and redemptions), (2) the market value of the security, or (3) the pricing, liquidity, or rating of the security, may cause the Fund to exceed or fall short of the Percentage Restriction. If this happens, the Fund’s continued holding of the security will not constitute a violation of the Percentage Restriction.

 

32


Average Annual Total Returns

 

As of 12-31-04

 

Class A1,2


      

1-year

   10.09 %

3-year

   4.88 %

Since Fund Inception (12-29-00)

   -2.01 %

Class A, excluding sales load


      

1-year

   16.80 %

3-year

   6.98 %

Since Fund Inception (12-29-00)

   -0.55 %

Class B1,2


      

1-year

   10.82 %

3-year

   4.93 %

Since Fund Inception (12-29-00)

   -1.82 %

Class C1,2


      

1-year

   14.82 %

3-year

   6.17 %

Since Fund Inception (12-29-00)

   -1.29 %

 


Performance is historical and does not guarantee future results. Investment returns and principal value will fluctuate, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the quoted performance. Call us or visit www.Strong.com for the most recent month-end performance.

 

Fee Waivers:

 

1 From time to time, the Fund’s advisor and/or administrator has waived fees and/or absorbed Fund expenses, which has resulted in higher returns. As of 12-31-04, there are waivers and/or absorptions in effect for all share classes.

 

Performance:

 

2 Average annual total returns include the effect of the maximum sales charge of 5.75% for Class A, the applicable contingent deferred sales charge of 5.00% in year 1 and eliminated after year 6 for Class B, and the applicable contingent deferred sales charge of 1.00% and eliminated after 12 months for Class C.

 

     Please consult a prospectus for information about all share classes.

 

Top Ten Industries

 

Percent of Net Assets, as of 12-31-04

 

Internet — Content

   5.7 %

Telecommunications — Wireless Equipment

   5.7 %

Electronics — Semiconductor Manufacturing

   5.6 %

Medical — Products

   5.5 %

Diversified Operations

   5.1 %

Leisure — Toys/Games/Hobby

   4.8 %

Telecommunications — Services

   4.6 %

Medical — Health Maintenance Organizations

   4.5 %

Computer — Data Storage

   4.3 %

Metal Ores — Miscellaneous

   3.9 %
    

Top Ten

   49.7 %
    

 


Risks: Stock funds should only be considered for long-term goals as values fluctuate in response to the activities of individual companies and general market and economic conditions. Investment strategies that concentrate in particular market segments or fewer securities tend to increase the total risk of an investment (relative to the broader market). This Fund is exposed to the following specific risks: growth-style investing risk, nondiversified-portfolio risk, and small- and medium-company risk. Consult the Fund’s prospectus for additional information on these and other risks.

 

33


Strong Advisor Technology Fund

 

It was a challenging year for the Strong Advisor Technology Fund. The Fund’s Class A shares returned -10.03% (-4.58% when excluding the initial sales charge) during 2004. By contrast, the Fund’s broad-based benchmark, the S&P 500 Index, returned 10.87% during the same period.

 

The Fund’s significant underperformance can be attributable to the poor performance of the semiconductor sector, in which we were overweighted compared to the benchmark, as well as weakness in the individual software held in the portfolio. In addition, the Fund’s performance suffered from its riskier profile relative to the benchmark, characterized especially by its larger weighting in small and mid-cap technology stocks.

 

The portfolio’s largest detractor from performance during the past 12 months was LSI Logic Corporation, a designer and manufacturer of complex high-performance, integrated circuits and storage systems. The next largest detractor was Magma Design Automation, a maker of electronic design automation software for engineers who design semiconductors. The stock fell after Magma announced that its third-quarter earnings per share would be worse than analysts expected because of disappointing growth in new customer orders.

 

Tough environment for tech

 

The overall market climate started the year with a strong tone, but soon moved into what was essentially a sideways trading pattern that persisted through the end of August. Concerns about the continued conflict in Iraq, the uncertainty surrounding a presidential election, higher than expected inflation rates (especially with respect to oil prices), and a sentiment that world economic growth may be slowing all weighed on the equity markets.

 

Technology stocks, which are cyclical in nature, typically perform best when macroeconomic political factors are positive, so the change in market temperament was especially difficult for stocks in the sector to weather. However, the technology sector began to realize stronger performance beginning in August, but becoming especially pronounced in late October and early November, as oil prices appeared to retreat as it became clear that the U.S. presidential election would not end in a contested fashion, as in 2000.

 

Morningstar® Style Box *

 

LOGO

 

Our approach to selecting stocks

 

Our management strategy remained consistent during the period. We sought to maintain a balance among the various subsectors that make up the technology universe: semiconductors and related equipment, software, computer hardware and storage, business services, and biotechnology. We sought to identify the companies within each subsector that we believed had the best fundamental qualities and were positioned to outperform. To this end, we looked for companies with above-average growth prospects, strong intellectual property, excellent management teams, and achievable financing plans.

 

Although we did not seek to keep a balanced representation of all major subsectors, our bottom-up, stock selection process, rather than a rigid, top-down asset allocation program, primarily drove the portfolio’s makeup.

 

In choosing stocks for the portfolio, we employed a relative valuation technique. The key element of this strategy was to look at a stock’s PEG (Price/Earnings to Growth) ratio. This figure represents the relationship of a company’s price-earnings ratio — a key measure that indicates how expensive a stock is relative to the earnings the company generates — to its projected five-year compound annual growth rate. We were interested in finding companies with favorable PEG ratios — that is, those that were positioned to deliver attractive levels of growth and that offered reasonable valuations.

 

Among the stocks selected for the portfolio using these approaches was the Fund’s strongest contributor to performance during the period, Mine Safety Appliances Company, which makes and sells safety and health equipment. Health care imaging company, CTI Molecular, also helped performance. The stock rose more than 28% in a single day in mid-November after the company reported stronger-than-expected earnings and anticipated an increase in first-quarter sales.

 

New Manager and Fund Reorganization

 

Effective January 1, 2005, Huachen Chen, CFA, and Walter C. Price, Jr., CFA, of RCM Capital Management LLC became the Portfolio Co-Managers of the Fund. In addition, the Fund is expected to reorganize into the Wells Fargo Advantage Specialized Technology Fund on or about April 11, 2005.

 

Thank you for your investment in the Strong Advisor Technology Fund.

 


* The Morningstar Style Box reflects a fund’s investment strategy. For equity funds, the vertical axis shows the market capitalization of the stocks owned and the horizontal axis shows investment style (value, blend, or growth).

 

     Mention of specific securities in this report is not indicative of whether the Fund may make additional purchases of, sell all or a portion of, or continue to hold those securities.

 

34


Fund Highlights

 

Sector Weightings

 

Percent of Net Assets, as of 12-31-04

 

LOGO

 

Source: Frank Russell Company via FactSet

 

Fund Highlights are continued on next page.

 

35


Strong Advisor Technology Fund

 

Growth of an Assumed $10,000 Investment

From 11-30-00 to 12-31-04

 

LOGO

 


Performance is historical and does not guarantee future results. Investment returns and principal value will fluctuate, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the quoted performance. Call us or visit www.Strong.com for the most recent month-end performance.

 

This graph, provided in accordance with SEC regulations, compares a $10,000 investment in the Fund, made at its inception, with the performance of the S&P 500 Index and the Lipper Science and Technology Funds Index. Results include the reinvestment of all dividends and capital gains distributions. The graph and the Average Annual Total Returns table do not reflect the deduction of taxes, if any, that a shareholder would pay on Fund distributions or the redemption of Fund shares. This graph is based on Class A shares only and reflects the effect of the maximum sales charge of 5.75%; performance for other classes will vary due to differences in fee structures and sales charges.

 

Definitions:

 

** The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market value weighted index (stock price times number of shares outstanding), with each stock’s weight in the Index proportionate to its market value. The Lipper Science and Technology Funds Index is the average of the 30 largest funds in the Lipper Science and Technology Funds Category. Source of the S&P Index data is Standard & Poor’s Micropal. Source of the Lipper Index data is Lipper.

 

It is not possible to invest directly in an index.

 

Top Holdings

 

Percent of Net Assets, as of 12-31-04

 

Avid Technology, Inc.

   4.1 %

Linear Technology Corporation

   3.5 %

Microsoft Corporation

   3.4 %

Mine Safety Appliances Company

   3.4 %

Dell, Inc.

   3.3 %

TTM Technologies, Inc.

   3.2 %

America Movil ADR Series L

   3.1 %

Lucent Technologies, Inc.

   3.0 %

KLA-Tencor Corporation

   3.0 %

Ariba, Inc.

   3.0 %
    

Top Ten

   33.0 %
    


Holdings vary. More complete holdings are available at www.Strong.com.

 

Percentage Restrictions: The Fund’s prospectus and statement of additional information may describe restrictions on the percentage of a particular type or quality of security in which the Fund may invest (“Percentage Restrictions”). Percentage Restrictions apply at the time the Fund purchases a security. Circumstances subsequent to the purchase of the security, such as a change in: (1) the Fund’s assets (e.g., due to cash inflows and redemptions), (2) the market value of the security, or (3) the pricing, liquidity, or rating of the security, may cause the Fund to exceed or fall short of the Percentage Restriction. If this happens, the Fund’s continued holding of the security will not constitute a violation of the Percentage Restriction.

 

36


Average Annual Total Returns

 

As of 12-31-04

 

Class A1,2


      

1-year

   -10.03 %

3-year

   -2.54 %

Since Fund Inception (11-30-00)

   -9.36 %

 

Class A, excluding sales load


      

1-year

   -4.58 %

3-year

   -0.60 %

Since Fund Inception (11-30-00)

   -8.04 %

 

Class B1,2


      

1-year

   -9.51 %

3-year

   -2.03 %

Since Fund Inception (11-30-00)

   -9.00 %

 

Class C1,2


      

1-year

   -5.66 %

3-year

   -0.71 %

Since Fund Inception (11-30-00)

   -8.45 %

Performance is historical and does not guarantee future results. Investment returns and principal value will fluctuate, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the quoted performance. Call us or visit www.Strong.com for the most recent month-end performance.

 

Fee Waivers:

 

1 From time to time, the Fund’s advisor and/or administrator has waived fees and/or absorbed Fund expenses, which has resulted in higher returns. As of 12-31-04, there are waivers and/or absorptions in effect for all share classes.

 

Performance:

 

2 Average annual total returns include the effect of the maximum sales charge of 5.75% for Class A, the applicable contingent deferred sales charge of 5.00% in year 1 and eliminated after year 6 for Class B, and the applicable contingent deferred sales charge of 1.00% and eliminated after 12 months for Class C.

 

Please consult a prospectus for information about all share classes.

 

Top Ten Industries

 

Percent of Net Assets, as of 12-31-04

 

Electronics — Semiconductor Manufacturing

   16.2 %

Computer Software — Desktop

   5.6 %

Computer Software — Education/Entertainment

   4.8 %

Telecommunications — Equipment

   4.6 %

Computer — IT Services

   4.5 %

Electronics — Miscellaneous Components

   4.4 %

Computer Software — Enterprise

   4.3 %

Leisure — Movies & Related

   4.1 %

Telecommunications — Wireless Equipment

   3.7 %

Medical — Systems/Equipment

   3.4 %
    

Top Ten

   55.6 %
    

 


Risks: Stock funds should only be considered for long-term goals as values fluctuate in response to the activities of individual companies and general market and economic conditions. Investment strategies that concentrate in particular market segments or fewer securities tend to increase the total risk of an investment (relative to the broader market). This Fund is exposed to the following specific risks: growth-style investing risk, concentrated-portfolio risk, technology risk, and small- and medium-company risk. Consult the Fund’s prospectus for additional information on these and other risks.

 

37


Strong Advisor U.S. Small/Mid Cap Growth Fund

 

After a very strong year for the Fund in 2003, 2004 was more difficult. For the year ended December 31, 2004, the Strong Advisor U.S. Small/Mid Cap Growth Fund’s Class A shares returned -5.22% (0.54% when excluding the initial sales charge), well behind its broad-based benchmark, the Russell Midcap Index, which returned 20.22% for the same period. The Fund’s underperformance occurred primarily in the year’s first and third quarters. During the second and fourth quarters, the Fund’s performance was more closely in line with the benchmark.

 

Factors affecting performance

 

There were two primary factors driving the Fund’s underperformance. First, small- and mid-cap growth stocks dramatically underperformed their respective value counterparts. There was a general contraction of stock valuations that took place in January and February, as weak economic data caused many investors to question the strength of the recovery and thus to lose confidence in stocks’ growth prospects. Then, in the second quarter, the economy began to pick up steam. In response, the Federal Reserve Board signaled that it was ready to raise short-term interest rates to help keep the economy from overheating and to help keep inflation in check. Higher interest rates have traditionally hurt the fastest-growing companies — the type we favor for this portfolio — the most.

 

The third quarter brought more uncertainty about the sustainability of the U.S. economic recovery. For one thing, the Fed kept upward pressure on interest rates with hikes of one-quarter of a percentage point in August and September following the June increase. Moreover, the price of crude oil continued to push higher, stoking fears that the high cost of energy would siphon disposable cash from other areas of the economy. In response, growth stocks significantly underperformed the broader market during the third quarter. In fact, according to a Merrill Lynch study of growth versus value strategies, during the first three quarters of 2004, the fastest-growing companies had the worst performance.

 

In the fourth quarter, the broader market turned in a strong rally in which mid- and small-cap growth stocks fully participated. Although the Fund posted a double-digit gain for the quarter, it nevertheless underperformed for the year.

 

The other reason for the Fund’s underperformance was unfavorable stock selection. One company that provided tremendous returns in 2003, Odyssey HealthCare, unexpectedly lowered its guidance on fourth-quarter earnings, hurting not only its own share price but also those of other companies in the hospice services industry. As one of the Fund’s largest holdings, Odyssey HealthCare negatively effected the performance of the Fund, and we sold the stock.

 

Morningstar® Style Box*

 

LOGO

 

Positioned for a stronger economy

 

Throughout 2004, we did not make any substantial changes to the Fund’s overall positioning from 2003. The portfolio remained poised to benefit from an improving business environment and increasing consumer confidence. Although the potential for further interest-rate hikes remains, we believe this trend presents limited risk to the companies in the portfolio. This is because we look for companies with little debt, and we have also significantly underweighted stocks from the financial sector compared to the benchmark, which could face the most volatility from rising rates. In the short term, it is true that some stocks may fluctuate in value due to interest-rate concerns. In the longer term, however, we believe profit growth ultimately drives stock performance and that this Fund’s portfolio of high-quality, fast-growing companies should be able to do well in this environment.

 

Our outlook

 

The Federal Reserve increased short-term interest rates five times in 2004 and appears ready to keep raising rates in the new year to keep inflation in check. Nevertheless, we think the worst of the resulting volatility is behind us. Normally, small-cap growth stocks appreciate in value after several Federal Reserve rates hikes, and we saw some evidence of that in the fourth quarter. Easing energy prices also represent a potentially positive influence on stock prices. Moreover, we expect to see strong corporate earnings in upcoming quarters. Given that many stocks are still at what we consider reasonable valuations, we believe such earnings improvements could help drive the prices of small- and mid-cap growth stocks higher in 2005.

 

Effective January 1, 2005, Jerome “Cam” Philpott, CFA, and Stuart Roberts of Wells Capital Management Incorporated became the Portfolio Co-Managers of the Fund. In addition, the Fund is expected to reorganize into the Wells Fargo Advantage Small Cap Fund on or about April 11, 2005.

 

Thank you for your investment in the Strong Advisor U.S. Small/Mid Cap Growth Fund.

 


* The Morningstar Style Box reflects a fund’s investment strategy. For equity funds, the vertical axis shows the market capitalization of the stocks owned and the horizontal axis shows investment style (value, blend, or growth).

 

Mention of specific securities in this report is not indicative of whether the Fund may make additional purchases of, sell all or a portion of, or continue to hold those securities.

 

38


Fund Highlights

 

Sector Weightings

 

Percent of Net Assets, as of 12-31-04

 

LOGO

 

Source: Frank Russell Company via FactSet

 

Fund Highlights are continued on next page.

 

39


Strong Advisor U.S. Small/Mid Cap Growth Fund

 

Growth of an Assumed $10,000 Investment

From 3-28-02 to 12-31-04

 

LOGO

 


Performance is historical and does not guarantee future results. Investment returns and principal value will fluctuate, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the quoted performance. Call us or visit www.Strong.com for the most recent month-end performance.

 

This graph, provided in accordance with SEC regulations, compares a $10,000 investment in the Fund, made at its inception, with the performance of the Russell Midcap® Index and the Lipper Small-Cap Growth Funds Index. Results include the reinvestment of all dividends and capital gains distributions. The graph and the Average Annual Total Returns table do not reflect the deduction of taxes, if any, that a shareholder would pay on Fund distributions or the redemption of Fund shares. This graph is based on Class A shares only and reflects the effect of the maximum sales charge of 5.75%; performance for other classes will vary due to differences in fee structures and sales charges.

 

Definitions:

 

** The Russell Midcap® Index measures the performance of the 800 smallest companies in the Russell 1000 Index, which represent approximately 26% of the total market capitalization of the Russell 1000 Index. The Lipper Small-Cap Growth Funds Index is the average of the 30 largest funds in the Lipper Small-Cap Growth Funds Category. Source of the Russell Index data is Standard & Poor’s Micropal. Source of the Lipper Index data is Lipper.

 

It is not possible to invest directly in an index.

 

Top Holdings

 

Percent of Net Assets, as of 12-31-04

 

Landstar Systems, Inc.

   4.3 %

Alamosa Holdings, Inc.

   4.0 %

Joy Global, Inc.

   3.3 %

Penn Virginia Corporation

   3.1 %

Trimble Navigation, Ltd.

   3.0 %

A.S.V., Inc.

   2.6 %

Cognizant Technology Solutions Corporation Class A

   2.5 %

Getty Images, Inc.

   2.5 %

Terex Corporation

   2.4 %

Investors Financial Services Corporation

   2.4 %
    

Top Ten

   30.1 %
    

 


Holdings vary. More complete holdings are available at www.Strong.com.

 

Percentage Restrictions: The Fund’s prospectus and statement of additional information may describe restrictions on the percentage of a particular type or quality of security in which the Fund may invest (“Percentage Restrictions”). Percentage Restrictions apply at the time the Fund purchases a security. Circumstances subsequent to the purchase of the security, such as a change in: (1) the Fund’s assets (e.g., due to cash inflows and redemptions), (2) the market value of the security, or (3) the pricing, liquidity, or rating of the security, may cause the Fund to exceed or fall short of the Percentage Restriction. If this happens, the Fund’s continued holding of the security will not constitute a violation of the Percentage Restriction.

 

40


Average Annual Total Returns

 

As of 12-31-04

 

Class A1,2


      

1-year

   -5.22 %

Since Fund Inception (3-28-02)

   2.14 %

Class A, excluding sales load


      

1-year

   0.54 %

Since Fund Inception (3-28-02)

   4.36 %

Class B1,2


      

1-year

   -4.46 %

Since Fund Inception (3-28-02)

   2.96 %

Class C1,2


      

1-year

   -0.46 %

Since Fund Inception (3-28-02)

   4.36 %

 


Performance is historical and does not guarantee future results. Investment returns and principal value will fluctuate, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the quoted performance. Call us or visit www.Strong.com for the most recent month-end performance.

 

Fee Waivers:

 

1 From time to time, the Fund’s advisor and/or administrator has waived fees and/or absorbed Fund expenses, which has resulted in higher returns. As of 12-31-04, there are waivers and/or absorptions in effect for all share classes.

 

Performance:

 

2 Average annual total returns include the effect of the maximum sales charge of 5.75% for Class A, the applicable contingent deferred sales charge of 5.00% in year 1 and eliminated after year 6 for Class B, and the applicable contingent deferred sales charge of 1.00% and eliminated after 12 months for Class C.

 

Please consult a prospectus for information about all share classes.

 

Top Ten Industries

 

Percent of Net Assets, as of 12-31-04

 

Machinery — Construction/Mining

   10.7 %

Oil & Gas — United States Exploration & Production

   9.1 %

Transportation — Truck

   6.5 %

Telecommunications — Wireless Services

   5.7 %

Retail — Restaurants

   5.4 %

Electronics — Semiconductor Manufacturing

   4.5 %

Medical — Systems/Equipment

   3.7 %

Internet — Network Security/Solutions

   3.0 %

Telecommunications — Wireless Equipment

   3.0 %

Computer — IT Services

   2.5 %
    

Top Ten

   54.1 %
    

 


Risks: Stock funds should only be considered for long-term goals as values fluctuate in response to the activities of individual companies and general market and economic conditions. Investment strategies that concentrate in particular market segments or fewer securities tend to increase the total risk of an investment (relative to the broader market). This Fund is exposed to the following specific risks: growth-style investing risk, and small- and medium-company risk. Consult the Fund’s prospectus for additional information on these and other risks.

 

41


Strong Advisor Utilities And Energy Fund

 

For the year ended December 31,2004, the Strong Advisor Utilities and Energy Fund’s Class A shares returned 15.61% (22.68% when excluding the initial sales charge), easily outpacing the 10.87% return of its broad-based benchmark, the S&P 500 Index. Rising energy prices and an overall favorable interest-rate environment aided the Fund’s performance, with all four of its sectors posting positive returns.

 

Interest-rate environment remained favorable

 

In the second quarter, reacting in part to stronger-than-expected employment data, the yield of 10-year Treasury bonds rose from 3.84% to 4.58%, resulting in price setbacks for a number of utility and telecommunications stocks. Over the years, we have found that large sell-offs triggered by the perception of rising interest rates frequently provide a good opportunity to reposition the Fund in stocks we like at reasonable valuations. Consequently, we added to a number of electric utility positions as we saw opportunities created by the decline. Also helping the Fund weather this interest-rate storm was our decision to allocate more than half of its assets to cash and to sectors, such as energy and gas utilities, that are less sensitive to rising interest rates. During the otherwise weak second quarter, this strategy helped the Fund deliver a positive return.

 

In the first, third, and fourth quarters, the Fund benefited from a favorable environment for long-term interest rates, which tend to have a bigger impact on utility stocks than short-term rates. Long-term rates ended the year very close to their level at the beginning of the period, while short-term rates climbed due to five increases by the Federal Reserve Board. As a result, the target federal funds rate rose from 1% at the beginning of 2004 to 2.25% at the end of the year.

 

Overweighting energy helped performance

 

A significant portion of the Fund’s gains came during the second half of the year. To a large degree, this was due to the strength in energy prices — particularly crude oil, which climbed above $50 per barrel in October. Increasing demand for fuel in Asia, political instability in Venezuela and Nigeria, and the ongoing conflict in Iraq all contributed to the high price of oil. In fact, analysts estimated that during the period oil prices included a premium of approximately $10 that was attributable to the fear that terrorist activity might interrupt supply.

 

Morningstar® Style Box*

 

LOGO

 

These developments benefited the Fund because of its overweighting, compared to its benchmark, in energy and gas utilities. High commodity prices led to robust cash flows and earnings, resulting in dividend increases and stock repurchases for many of the Fund’s larger energy holdings. Against this backdrop, integrated energy holding ConocoPhillips was a significant contributor to performance, as was ONEOK, a core holding in the gas sector.

 

Although the Fund’s electric utility stocks — representing about 39% of its assets at period end — underperformed its energy holdings by a considerable degree, they still handily outperformed the benchmark. In this group our results were aided by TXU, a new position that took top honors as the Fund’s largest gainer. TXU, an independent utility based in Texas, is a company we have followed closely for a long time. It encountered a serious liquidity crisis in 2002 and spent much of 2003 repairing its balance sheet. In 2004, the company replaced its CEO with John Wilder, a veteran manager with experience in turnaround situations. We correctly anticipated that his leadership would have a positive impact on investors’ outlook for the company.

 

Looking ahead

 

Although energy prices trended lower for most of the fourth quarter, we believe they could be in the process of finding a new, higher equilibrium level than we saw in past years. Consequently, we believe the pattern of dividend increases on the part of companies representing major positions in the Fund that we saw in 2004 could continue in 2005. However, given the healthy gains in energy stocks and the recent softness in oil and gas prices, we will be increasingly sensitive to valuations in that sector going forward.

 

Additionally, the potential for tax legislation in 2005, that would make permanent the current 15% tax on dividends, adds to the attractiveness of stocks that pay dividends or might increase their dividend payments. We will continue to keep our eye on dividends and dividend policy, as we believe doing so will help us to identify capable, shareholder-friendly managements and financially strong companies with the ability to deliver robust cash flows and dynamic earnings growth.

 

Effective January 1, 2005, Gary J. Dunn and David L. Roberts of Wells Capital Management Incorporated became the Portfolio Co-Managers of the Fund. In addition, the Fund is expected to reorganize into the Wells Fargo Advantage Equity Income Fund on or about April 11, 2005.

 

Thank you for your investment in the Strong Advisor Utilities and Energy Fund.

 


* The Morningstar Style Box reflects a fund’s investment strategy. For equity funds, the vertical axis shows the market capitalization of the stocks owned and the horizontal axis shows investment style (value, blend, or growth).

 

Mention of specific securities in this report is not indicative of whether the Fund may make additional purchases of, sell all or a portion of, or continue to hold those securities.

 

42


Fund Highlights

 

Sector Weightings

 

Percent of Net Assets, as of 12-31-04

 

LOGO

 

Source: Frank Russell Company via FactSet

 

Fund Highlights are continued on next page.

 

43


Strong Advisor Utilities And Energy Fund

 

Growth of an Assumed $10,000 Investment

From 7-31-02 to 12-31-04

 

LOGO


Performance is historical and does not guarantee future results. Investment returns and principal value will fluctuate, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the quoted performance. Call us or visit www.Strong.com for the most recent month-end performance.

 

This graph, provided in accordance with SEC regulations, compares a $10,000 investment in the Fund, made at its inception, with the performance of the S&P 500 Index and the Lipper Utility Funds Index. Results include the reinvestment of all dividends and capital gains distributions. The graph and the Average Annual Total Returns table do not reflect the deduction of taxes, if any, that a shareholder would pay on Fund distributions or the redemption of Fund shares. This graph is based on Class A shares only and reflects the effect of the maximum sales charge of 5.75%; performance for other classes will vary due to differences in fee structures and sales charges.

 

Definitions:

 

** The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market value weighted index (stock price times number of shares outstanding), with each stock’s weight in the Index proportionate to its market value. The Lipper Utility Funds Index is the average of the 30 largest funds in the Lipper Utility Funds Category. The funds invest primarily in utility shares. Source of the S&P 500 Index data is Standard & Poor’s Micropal. Source of the Lipper Index data is Lipper.

 

It is not possible to invest directly in an index.

 

Top Holdings

 

Percent of Net Assets, as of 12-31-04

 

Constellation Energy Group, Inc.

   8.3 %

ONEOK, Inc.

   7.0 %

Exelon Corporation

   5.9 %

TXU Corporation

   5.6 %

Schlumberger, Ltd.

   5.2 %

Wisconsin Energy Corporation

   4.3 %

Southern Union Company

   4.3 %

PPL Corporation

   4.1 %

BP PLC Sponsored ADR

   3.9 %

American Electric Power Company, Inc.

   3.9 %
    

Top Ten

   52.5 %
    


Holdings vary. More complete holdings are available at www.Strong.com.

 

Percentage Restrictions: The Fund’s prospectus and statement of additional information may describe restrictions on the percentage of a particular type or quality of security in which the Fund may invest (“Percentage Restrictions”). Percentage Restrictions apply at the time the Fund purchases a security. Circumstances subsequent to the purchase of the security, such as a change in: (1) the Fund’s assets (e.g., due to cash inflows and redemptions), (2) the market value of the security, or (3) the pricing, liquidity, or rating of the security, may cause the Fund to exceed or fall short of the Percentage Restriction. If this happens, the Fund’s continued holding of the security will not constitute a violation of the Percentage Restriction.

 

44


Average Annual Total Returns

 

As of 12-31-04

 

Class A1,2


      

1-year

   15.61 %

Since Fund Inception (7-31-02)

   9.87 %

Class A, excluding sales load


      

1-year

   22.68 %

Since Fund Inception (7-31-02)

   12.59 %

Class B1,2


      

1-year

   17.13 %

Since Fund Inception (7-31-02)

   10.62 %

Class C1,2


      

1-year

   21.07 %

Since Fund Inception (7-31-02)

   11.99 %

Performance is historical and does not guarantee future results. Investment returns and principal value will fluctuate, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the quoted performance. Call us or visit www.Strong.com for the most recent month-end performance.

 

Fee Waivers:

 

1 From time to time, the Fund’s advisor and/or administrator has waived fees and/or absorbed Fund expenses, which has resulted in higher returns. As of 12-31-04, there are waivers and/or absorptions in effect for all share classes.

 

Performance:

 

2 Average annual total returns include the effect of the maximum sales charge of 5.75% for Class A, the applicable contingent deferred sales charge of 5.00% in year 1 and eliminated after year 6 for Class B, and the applicable contingent deferred sales charge of 1.00% and eliminated after 12 months for Class C.

 

Please consult a prospectus for information about all share classes.

 

Top Ten Industries

 

Percent of Net Assets, as of 12-31-04

 

Utility — Electric Power

   39.0 %

Utility — Gas Distribution

   21.6 %

Oil & Gas — International Integrated

   11.9 %

Oil & Gas — Field Services

   5.2 %

Oil & Gas — Drilling

   4.1 %

Telecommunications — Services

   3.3 %

Telecommunications — Services Foreign

   3.1 %

Oil & Gas — United States Exploration & Production

   2.2 %

Diversified Operations

   2.1 %

Chemicals — Specialty

   1.2 %
    

Top Ten

   93.7 %
    


Risks: Stock funds should only be considered for long-term goals as values fluctuate in response to the activities of individual companies and general market and economic conditions. Investment strategies that concentrate in particular market segments or fewer securities tend to increase the total risk of an investment (relative to the broader market). This Fund is exposed to the following specific risks: value-style investing risk, concentrated-portfolio risk, energy-company risk, public-utilities-sector risk, and small- and medium-company risk. Consult the Fund’s prospectus for additional information on these and other risks.

 

45


Strong Advisor Large Company Core Fund

 

The Strong Advisor Large Company Core Fund Class A shares rose 4.32% during the year ending December 31, 2004 (10.69% when excluding the initial sales charge). This result lagged the Fund’s broad-based benchmark the S&P 500 Index, which gained 10.87% during the same period.

 

The Fund’s performance was helped by stock selection in the health care sector. In addition, the Fund benefited from stock selection in the financial sector.

 

The Fund’s investment process

 

We followed a consistent management strategy throughout the past 12 months. Our investment process was “bottom up,” meaning that we evaluated candidates for inclusion in the portfolio on an individual basis. In other words, our focus was on adding value through stock selection, as opposed to making indirect sector bets.

 

In choosing stocks, we followed a three-step process. First, we sought to purchase companies with improving fundamentals and earnings quality, which we defined as the proportion of earnings that are based on cash flow and not on management’s estimations and forecasts. Second, we looked for companies whose management strategy was to attempt to maximize the long-term value of the business, which we defined as the present value of the company’s future net cash flows. Finally, we wished to purchase stocks at a discount to what we believed was their fair value. To arrive at this value, we used multiple valuation tools, including both absolute and relative value metrics. After constructing the portfolio using this approach, we applied a series of risk measures to better understand how the portfolio was constructed and seek ways to reduce risk for the Fund’s shareholders.

 

What worked, what didn’t

 

Applying this stock selection process, the Fund owned a position in Aetna, a health and related benefits company. Following years of declining membership, the company’s operational turnaround began to take hold, leading membership to rise. As a result of solid pricing and growth in membership, Aetna realized higher earnings, profit margins and cash flow. In addition, the entire health care industry saw its prospects improve stemming from reduced regulatory risk and an increased likelihood of Medicare privatization. Against this backdrop, Aetna’s shares enjoyed strong performance throughout the period, especially during the strong stock market rally of the fourth quarter.

 

Morningstar® Style Box*

 

LOGO

 

Tyson Foods, however, was a portfolio holding that did not work out as well. Tyson, the world’s largest producer of meats and the largest chicken-products producer in the U.S., faced higher-than-expected expenses as a result of rising costs for chicken feed. At the same time, demand for chicken, which was strong in the summertime, decreased. The lower demand caused high inventories and put pressure on prices, cutting into Tyson’s earnings. These factors combined to lower the company’s earnings in the year’s third quarter and reduce investors’ future expectations.

 

Questions lie ahead

 

A number of questions remain unanswered for the year ahead: What will happen to crude oil prices? How quickly will the Federal Reserve Board continue to raise interest rates? Will the U.S. dollar continue its decline against the euro, yen and other world currencies? How will the war on terrorism proceed, and will violence in the Middle East persist? Although we can’t predict the answers to these questions, we are confident that these will be significant factors in how the market responds in 2005.

 

New Manager and Fund Reorganization

 

Effective January 1, 2005, David A. Katz, CFA, of Matrix Asset Advisors, Inc., became the sole Portfolio Manager of the Fund. In addition, the Fund is expected to reorganize into the Wells Fargo Advantage Large Company Core Fund, the successor to the Strong Advisor Large Company Core Fund, on or about April 11, 2005.

 

We thank you for your investment in the Strong Advisor Large Company Core Fund.

 


* The Morningstar Style Box reflects a fund’s investment strategy. For equity funds, the vertical axis shows the market capitalization of the stocks owned and the horizontal axis shows investment style (value, blend, or growth).

 

Mention of specific securities in this report is not indicative of whether the Fund may make additional purchases of, sell all or a portion of, or continue to hold those securities.

 

46


Fund Highlights

 

Sector Weightings

 

Percent of Net Assets, as of 12-31-04

 

LOGO

 

Source: Frank Russell Company via FactSet

 

Fund Highlights are continued on next page.

 

 

47


Strong Advisor Large Company Core Fund

 

Growth of an Assumed $10,000 Investment

From 11-3-97 to 12-31-04

 

LOGO


Performance is historical and does not guarantee future results. Investment returns and principal value will fluctuate, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the quoted performance. Call us or visit www.Strong.com for the most recent month-end performance.

 

This graph, provided in accordance with SEC regulations, compares a $10,000 investment in the Fund, made at its inception, with the performance of the S&P 500 Index and the Lipper Multi-Cap Core Funds Index. Results include the reinvestment of all dividends and capital gains distributions. The graph and the Average Annual Total Returns table do not reflect the deduction of taxes, if any, that a shareholder would pay on Fund distributions or the redemption of Fund shares. This graph is based on Class A shares only and reflects the effect of the maximum sales charge of 5.75%; performance for other classes will vary due to differences in fee structures and sales charges.

 

  To equalize time periods, the indices’ performances were prorated for the month of November 1997.

 

Definitions:

 

** The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market value weighted index (stock price times number of shares outstanding), with each stock’s weight in the Index proportionate to its market value. The Lipper Multi-Cap Core Funds Index is the average of the 30 largest funds in the Lipper Multi-Cap Core Funds Category. Source of the S&P 500 Index data is Standard & Poor’s Micropal. Source of the Lipper Index data is Lipper.

 

  It is not possible to invest directly in an index.

 

Top Holdings

 

Percent of Net Assets, as of 12-31-04

 

UnitedHealth Group, Inc.

   3.8 %

CIT Group, Inc.

   3.5 %

Becton, Dickinson & Company

   3.2 %

Sherwin Williams Company

   3.2 %

Archer Daniels Midland Company

   3.1 %

Wachovia Corporation

   3.1 %

NIKE, Inc. Class B

   3.0 %

Burlington Resources, Inc.

   3.0 %

Eaton Corporation

   3.0 %

Prudential Financial, Inc.

   2.9 %
    

Top Ten

   31.8 %
    


Holdings vary. More complete holdings are available at www.Strong.com.

 

Percentage Restrictions: The Fund’s prospectus and statement of additional information may describe restrictions on the percentage of a particular type or quality of security in which the Fund may invest (“Percentage Restrictions”). Percentage Restrictions apply at the time the Fund purchases a security. Circumstances subsequent to the purchase of the security, such as a change in: (1) the Fund’s assets (e.g., due to cash inflows and redemptions), (2) the market value of the security, or (3) the pricing, liquidity, or rating of the security, may cause the Fund to exceed or fall short of the Percentage Restriction. If this happens, the Fund’s continued holding of the security will not constitute a violation of the Percentage Restriction.

 

48


Average Annual Total Returns

 

As of 12-31-04

 

Class A1,2,3


      

1-year

   4.32 %

5-year

   -0.71 %

Since Fund Inception (11-3-97)

   4.69 %

 

Class A, excluding sales load


      

1-year

   10.69 %

5-year

   0.48 %

Since Fund Inception (11-3-97)

   5.50 %

 

Class B1,2


      

1-year

   4.67 %

5-year

   -0.85 %

Since Fund Inception (11-3-97)

   4.57 %

 

Class C1,2


      

1-year

   8.57 %

5-year

   -0.46 %

Since Fund Inception (11-3-97)

   4.56 %

 

Class K1,2


      

1-year

   11.32 %

5-year

   0.79 %

Since Fund Inception (11-3-97)

   5.79 %

Performance is historical and does not guarantee future results. Investment returns and principal value will fluctuate, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the quoted performance. Call us or visit www.Strong.com for the most recent month-end performance.

 

Fee Waivers:

 

1 From time to time, the Fund’s advisor and/or administrator has waived fees and/or absorbed Fund expenses, which has resulted in higher returns. As of 12-31-04, there are waivers and/or absorptions in effect for all share classes.

 

Performance:

 

2 Average annual total returns for Class A shares include the effect of the maximum sales charge of 5.75%, which was first charged on 9-17-99 and are based on the performance of the Rockhaven Fund’s Class A shares (the predecessor Fund) prior to 9-16-02. Average annual total returns for Class B shares include the effect of the applicable contingent deferred sales charge, which is 5.00% in year 1 and is eliminated after year 6, and are based on the performance of the Rockhaven Fund’s Class A shares from inception through 9-15-02, restated to reflect the contingent deferred sales charge and the different expenses of the Class B shares, as applicable, and the historical performance of the Fund’s Class A shares from 9-16-02 to 9-30-02. Average annual total returns for Class C shares include the effect of the applicable contingent deferred sales charge, which is 1.00%, and is eliminated after 12 months and are based on the performance of the Rockhaven Fund’s Class A shares from inception through 9-15-02, restated to reflect the contingent deferred sales charge and the different expenses of the Class C shares, as applicable, and the historical performance of the Fund’s Class A shares from 9-16-02 to 9-30-02. The performance of the Class K shares is based on the performance of the Rockhaven Fund’s Class A shares from inception through 9-15-02, and the historical performance of the Fund’s Class A shares from 9-16-02 to 9-30-02, and does not reflect the Fund’s maximum sales charge of 5.75%, which was charged from 9-17-99 through 9-30-02.
3 The Fund’s Class A shares have a redemption fee of 1.00% against shares that are held 360 calendar days or fewer after purchase. Performance data does not reflect the deduction of this fee, which, if reflected, would reduce the performance.

 

  Please consult a prospectus for information about all share classes.

 

Top Ten Industries

 

Percent of Net Assets, as of 12-31-04

Medical — Health Maintenance Organizations

   6.2 %

Finance — Consumer/Commercial Loans

   6.0 %

Banks — Super Regional

   5.4 %

Oil & Gas — International Integrated

   5.3 %

Telecommunications — Wireless Equipment

   4.8 %

Oil & Gas — United States Exploration & Production

   4.5 %

Medical/Dental — Supplies

   3.2 %

Building — Paint & Allied Products

   3.2 %

Food — Flour & Grain

   3.1 %

Apparel — Shoes & Related Manufacturing

   3.0 %
    

Top Ten

   44.7 %
    


Risks: Stock funds should only be considered for long-term goals as values fluctuate in response to the activities of individual companies and general market and economic conditions. Consult the Fund’s prospectus for additional information on this and other risks.

 

49


YOUR FUND’S EXPENSES

  December 31, 2004

 

About Your Fund’s Expenses

 

Example

 

As a shareholder of a mutual fund, you may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other fund expenses.

 

This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on a hypothetical investment of $1,000 invested at the beginning of the period and held for the entire period, July 1, 2004 through December 31, 2004.

 

Actual Expenses

 

The columns under the heading entitled “Actual” help you to estimate the actual expenses you paid over the period. The “Actual — Ending Account Value” shown is derived from the Fund’s actual return, and the “Actual — Expenses Paid During Period” shows the dollar amount that would have been paid by an investor who started with $1,000 in the Fund. To estimate the expenses you paid on your account during this period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.60), then multiply the result by the number in the column under the heading entitled “Actual — Expenses Paid During Period”.

 

Hypothetical Example for Comparison Purposes

 

The columns under the heading entitled “Hypothetical” provide information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the last column of the table (Hypothetical — Expenses Paid During Period) is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs could have been higher.

 

Actual Returns vs. Hypothetical Returns

 

Six Months Ended December 31, 2004

 

                     Actual

  

Hypothetical

(5% return before expenses)


     Class

  

Fund’s

Annualized
Expense
Ratio1,2


   

Beginning
Account Value

7-01-04


  

Ending
Account Value

12-31-04


   Expenses
Paid During
Period3


   Ending
Account Value
12-31-04


   Expenses
Paid During
Period3


Strong Advisor Common Stock Fund

   A
B
C
Z
   1.56
2.29
2.33
1.30
%
%
%
%
  $
$
$
$
1,000.00
1,000.00
1,000.00
1,000.00
   $
$
$
$
1,073.70
1,070.10
1,069.60
1,075.30
   $
$
$
$
8.13
11.92
12.12
6.78
   $
$
$
$
1,017.29
1,013.62
1,013.42
1,018.60
   $
$
$
$
7.91
11.59
11.79
6.60

Strong Advisor Mid Cap Growth Fund

   A
B
C
Z
   1.77
2.32
2.25
1.84
%
%
%
%
  $
$
$
$
1,000.00
1,000.00
1,000.00
1,000.00
   $
$
$
$
1,123.90
1,121.40
1,121.40
1,124.40
   $
$
$
$
9.45
12.37
12.00
9.83
   $
$
$
$
1,016.24
1,013.47
1,013.83
1,015.89
   $
$
$
$
8.97
11.74
11.39
9.32

 

(Continued on next page)

 

50


Actual Returns vs. Hypothetical Returns

 

Six Months Ended December 31, 2004

 

                     Actual

  

Hypothetical

(5% return before expenses)


     Class

  

Fund’s

Annualized
Expense
Ratio1,2


   

Beginning
Account Value

7-01-04


  

Ending
Account Value

12-31-04


   Expenses
Paid During
Period3


  

Ending
Account Value

12-31-04


   Expenses
Paid During
Period3


Strong Advisor Small Cap Value Fund

   A
B
C
Z
   1.54
2.27
2.29
1.35
%
%
%
%
  $
$
$
$
1,000.00
1,000.00
1,000.00
1,000.00
   $
$
$
$
1,132.20
1,127.80
1,128.00
1,132.80
   $
$
$
$
8.25
12.14
12.25
7.24
   $
$
$
$
1,017.39
1,013.72
1,013.62
1,018.35
   $
$
$
$
7.81
11.49
11.59
6.85

Strong Advisor U.S. Value Fund

   A
B
C
K
Z
   1.36
2.10
2.20
0.93
1.33
%
%
%
%
%
  $
$
$
$
$
1,000.00
1,000.00
1,000.00
1,000.00
1,000.00
   $
$
$
$
$
1,091.40
1,086.90
1,086.60
1,093.60
1,091.20
   $
$
$
$
$
7.15
11.02
11.54
4.89
6.99
   $
$
$
$
$
1,018.30
1,014.58
1,014.08
1,020.46
1,018.45
   $
$
$
$
$
6.90
10.63
11.14
4.72
6.75

Strong Advisor Endeavor Large Cap Fund

   A
B
C
   1.64
2.41
2.44
%
%
%
  $
$
$
1,000.00
1,000.00
1,000.00
   $
$
$
1,093.00
1,088.70
1,088.70
   $
$
$
8.63
12.65
12.81
   $
$
$
1,016.89
1,013.02
1,012.87
   $
$
$
8.31
12.19
12.35

Strong Advisor Focus Fund

   A
B
C
   2.49
2.42
2.46
%
%
%
  $
$
$
1,000.00
1,000.00
1,000.00
   $
$
$
1,084.40
1,084.60
1,084.60
   $
$
$
13.05
12.68
12.89
   $
$
$
1,012.62
1,012.97
1,012.77
   $
$
$
12.60
12.25
12.45

Strong Advisor International Core Fund

   A
B
C
   0.00
0.00
0.00
%
%
%
  $
$
$
1,000.00
1,000.00
1,000.00
   $
$
$
1,135.70
1,136.00
1,135.20
   $
$
$
—  
—  
—  
   $
$
$
1,025.14
1,025.14
1,025.14
   $
$
$
—  
—  
—  

Strong Advisor Select Fund

   A
B
C
   1.56
2.35
2.37
%
%
%
  $
$
$
1,000.00
1,000.00
1,000.00
   $
$
$
1,067.20
1,062.10
1,062.10
   $
$
$
8.11
12.18
12.28
   $
$
$
1,017.29
1,013.32
1,013.22
   $
$
$
7.91
11.89
11.99

Strong Advisor Technology Fund

   A
B
C
   2.37
2.42
2.35
%
%
%
  $
$
$
1,000.00
1,000.00
1,000.00
   $
$
$
1,030.50
1,031.00
1,031.10
   $
$
$
12.10
12.35
12.00
   $
$
$
1,013.22
1,012.97
1,013.32
   $
$
$
11.99
12.25
11.89

Strong Advisor U.S. Small/Mid Cap Growth Fund

   A
B
C
   2.42
2.42
2.39
%
%
%
  $
$
$
1,000.00
1,000.00
1,000.00
   $
$
$
1,013.50
1,013.50
1,013.50
   $
$
$
12.25
12.25
12.10
   $
$
$
1,012.97
1,012.97
1,013.12
   $
$
$
12.25
12.25
12.09

Strong Advisor Utilities and Energy Fund

   A
B
C
   2.11
2.82
2.85
%
%
%
  $
$
$
1,000.00
1,000.00
1,000.00
   $
$
$
1,167.80
1,164.50
1,163.20
   $
$
$
11.50
15.34
15.50
   $
$
$
1,014.53
1,010.96
1,010.81
   $
$
$
10.68
14.25
14.41

Strong Advisor Large Company Core Fund

   A
B
C
K
   1.43
2.39
2.45
0.91
%
%
%
%
  $
$
$
$
1,000.00
1,000.00
1,000.00
1,000.00
   $
$
$
$
1,077.00
1,071.60
1,070.60
1,080.20
   $
$
$
$
7.47
12.45
12.75
4.76
   $
$
$
$
1,017.95
1,013.12
1,012.82
1,020.56
   $
$
$
$
7.25
12.09
12.40
4.62

1 Based on the Fund’s most recent six-month period; may differ from expense ratios based on one-year data in the Financial Highlights.
2 These ratios do not include the effect of directed brokerage credits and/or custody earnings credits, if any.
3 Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 184 days, and divided by 366.

 

51


SCHEDULES OF INVESTMENTS IN SECURITIES

  December 31, 2004

 

STRONG ADVISOR COMMON STOCK FUND

 

     Shares or
Principal
Amount


  

Value

(Note 2)


Common Stocks 94.4%

           

Apparel - Shoes & Related Manufacturing 1.3%

           

Reebok International, Ltd.

   390,000    $ 17,160,000

Banks - Super Regional 2.3%

           

Fifth Third Bancorp

   345,000      16,311,600

Marshall & Ilsley Corporation

   315,000      13,923,000
         

            30,234,600

Banks - West/Southwest 1.7%

           

City National Corporation

   315,000      22,254,750

Building - Heavy Construction 1.5%

           

Jacobs Engineering Group, Inc. (b)

   420,000      20,071,800

Chemicals - Specialty 1.8%

           

Lonza Group AG (CHF) (h)

   425,000      23,787,332

Commercial Services - Leasing 1.4%

           

Ryder Systems, Inc.

   385,000      18,391,450

Computer - Data Storage 1.5%

           

Seagate Technology (b)(f)

   1,100,000      18,997,000

Computer - IT Services 2.4%

           

Affiliated Computer Services, Inc. Class A (b)

   265,000      15,950,350

BearingPoint, Inc. (b)

   1,955,000      15,698,650
         

            31,649,000

Computer - Software Design 1.8%

           

Mentor Graphics Corporation (b)(f)

   1,565,000      23,928,850

Computer Software - Enterprise 2.2%

           

Business Objects SA Sponsored ADR (b)(f)

   420,000      10,642,800

Citrix Systems, Inc. (b)

   745,000      18,274,850
         

            28,917,650

Containers 1.8%

           

Pactiv Corporation (b)

   905,000      22,887,450

Cosmetics - Personal Care 1.6%

           

International Flavors & Fragrances, Inc.

   485,000      20,777,400

Diversified Operations 1.6%

           

Carlisle Companies, Inc. (f)

   290,000      18,826,800

SPX Corporation

   60,000      2,403,600
         

            21,230,400

Electrical - Equipment 1.3%

           

EnerSys (b)(f)

   1,090,000      16,622,500

Electronics - Contract Manufacturing 1.2%

           

Solectron Corporation (b)

   3,000,000      15,990,000

Electronics - Miscellaneous Components 1.5%

           

Amphenol Corporation Class A (b)

   540,000      19,839,600

Electronics - Semiconductor Manufacturing 5.3%

           

Advanced Micro Devices, Inc. (b)(f)

   740,000      16,294,800

Fairchild Semiconductor International, Inc. (b)

   1,110,000      18,048,600

SanDisk Corporation (b)

   670,000      16,729,900

Silicon Laboratories, Inc. (b)(f)

   520,000      18,361,200
         

            69,434,500

Finance - Equity REIT 0.8%

           

Apartment Investment & Management Company Class A

   265,000    $ 10,213,100

Finance - Investment Brokers 1.2%

           

Merrill Lynch & Company, Inc.

   265,000      15,839,050

Finance - Publicly Traded Investment Funds- Equity (Non 40 Act) 1.4%

           

Biotech HOLDRs Trust (f)

   115,000      17,585,800

Insurance - Brokers 1.5%

           

Arthur J. Gallagher & Company

   615,000      19,987,500

Insurance - Diversified 1.2%

           

Genworth Financial, Inc. Class A (f)

   575,000      15,525,000

Insurance - Property/Casualty/Title 4.1%

           

MBIA, Inc.

   275,000      17,402,000

RenaissanceRe Holdings, Ltd.

   370,000      19,269,600

The St. Paul Travelers Companies, Inc.

   440,000      16,310,800
         

            52,982,400

Internet - Content 0.7%

           

Ask Jeeves, Inc. (b)(f)

   330,000      8,827,500

Internet - E*Commerce 1.2%

           

IAC/InterActiveCorp (b)(f)

   555,000      15,329,100

Internet - Software 0.5%

           

DoubleClick, Inc. (b)

   850,000      6,613,000

Machinery - General Industrial 1.3%

           

Roper Industries, Inc.

   280,000      17,015,600

Media - Cable TV 6.1%

           

Cablevision Systems New York Group Class A (b)

   1,150,000      28,635,000

The DIRECTV Group, Inc. (b)

   1,000,000      16,740,000

News Corporation Class A

   1,000,000      18,660,000

Telewest Global, Inc. (b)

   850,000      14,943,000
         

            78,978,000

Media - Newspapers 1.1%

           

Dow Jones & Company, Inc. (f)

   340,000      14,640,400

Media - Periodicals 1.0%

           

Verenigde Nederlandse Uitgeversbedrijven NV (EUR) (h)

   455,000      13,410,930

Media - Radio/TV 1.6%

           

Liberty Media Corporation Class A (b)

   1,900,000      20,862,000

Medical - Biomedical/Biotechnology 2.4%

           

Celgene Corporation (b)(f)

   495,000      13,132,350

Medimmune, Inc. (b)

   655,000      17,757,050
         

            30,889,400

Medical - Ethical Drugs 0.6%

           

Biovail Corporation International (b)

   500,000      8,265,000

Medical - Products 2.4%

           

Respironics, Inc. (b)

   180,000      9,784,800

Valeant Pharmaceuticals International (f)

   795,000      20,948,250
         

            30,733,050

 

52


STRONG ADVISOR COMMON STOCK FUND (continued)

 

    

Shares or

Principal

Amount


  

Value

(Note 2)


 

Medical/Dental - Services 2.7%

               

Omnicare, Inc. (f)

     505,000    $ 17,483,100  

Pharmaceutical Product Development, Inc. (b)

     440,000      18,167,600  
           


              35,650,700  

Medical/Dental - Supplies 1.4%

               

Hillenbrand Industries, Inc.

     320,000      17,772,800  

Metal Ores - Gold/Silver 0.3%

               

Placer Dome, Inc.

     180,000      3,394,800  

Metal Ores - Miscellaneous 1.5%

               

Alcoa, Inc.

     600,000      18,852,000  

Oil & Gas - Drilling 4.0%

               

Nabors Industries, Ltd. (b)

     385,000      19,746,650  

Noble Corporation (b)

     650,000      32,331,000  
           


              52,077,650  

Oil & Gas - Machinery/Equipment 1.8%

               

Smith International, Inc. (b)

     425,000      23,124,250  

Oil & Gas - United States Exploration & Production 6.1%

               

Apache Corporation (e)

     550,000      27,813,500  

Burlington Resources, Inc. (e)

     680,000      29,580,000  

EOG Resources, Inc.

     310,000      22,121,600  
           


              79,515,100  

Pollution Control - Services 1.5%

               

Republic Services, Inc.

     565,000      18,950,100  

Retail - Clothing/Shoes 1.1%

               

Ann Taylor Stores Corporation (b)

     670,000      14,425,100  

Retail - Department Stores 2.6%

               

Kohl’s Corporation (b)

     320,000      15,734,400  

Saks, Inc. (f)

     1,280,000      18,572,800  
           


              34,307,200  

Retail - Leisure Product 1.3%

               

The Sports Authority, Inc. (b)(f)

     630,000      16,222,500  

Retail - Restaurants 1.3%

               

Outback Steakhouse, Inc.

     355,000      16,251,900  

Retail - Super/Mini Markets 1.5%

               

The Kroger Company (b)

     1,130,000      19,820,200  

Retail/Wholesale - Auto Parts 1.6%

               

Advanced Auto Parts, Inc. (b)

     470,000      20,529,600  

Telecommunications - Services 1.5%

               

Sprint Corporation

     790,000      19,631,500  

Telecommunications - Wireless Equipment 1.3%

               

Nokia Corporation Sponsored ADR

     1,040,000      16,296,800  

Transportation - Airline 1.6%

               

Continental Airlines, Inc. Class B (b)(f)

     1,550,000      20,987,000  
           


Total Common Stocks (Cost $869,459,480)

            1,227,680,312  
           


Put Options Purchased 0.0%

               

Oil & Gas - United States Exploration & Production

               

Apache Corporation:

               

Expires 1/21/05 at $50.00

     25,000    $ 146,250  

Expires 4/15/05 at $55.00

     25,000      23,125  

Burlington Resources, Inc.,

               

Expires 1/21/05 at $42.50

     70,000      43,750  
           


Total Put Options Purchased (Cost $392,150)

            213,125  
           


Short-Term Investments (a) 9.7%

               

Collateral Received for Securities Lending 4.1%

               

Navigator Prime Portfolio

     53,056,922      53,056,922  

Repurchase Agreements (c) 5.6%

               

ABN AMRO Inc. (Dated 12/31/04), 2.15%, Due 1/03/05 (Repurchase proceeds $70,912,703); Collateralized by: United States Government & Agency Issues

   $ 70,900,000      70,900,000  

State Street Bank (Dated 12/31/04), 0.85%, Due 1/03/05 (Repurchase proceeds $1,727,422); Collateralized by: United States Government & Agency Issues

     1,727,300      1,727,300  
           


              72,627,300  
           


Total Short-Term Investments (Cost $125,684,222)

            125,684,222  
           


Total Investments in Securities (Cost $995,535,852) 104.1%

            1,353,577,659  

Other Assets and Liabilities, Net (4.1%)

            (53,446,748 )
           


Net Assets 100.0%

          $ 1,300,130,911  
           


WRITTEN OPTIONS ACTIVITY

               
     Contracts

   Premiums

 

Options outstanding at beginning of year

     —      $ —    

Options written during the year

     1,200      252,144  

Options closed

     —        —    

Options expired

     —        —    

Options exercised

     —        —    
    

  


Options outstanding at end of year

     1,200      252,144  
    

  


WRITTEN CALL OPTIONS DETAIL

               
    

Contracts

(100 shares

per contract)


  

Value

(Note 2)


 

Apache Corporation

               

(Strike Price is $50.00. Expiration date is 1/21/05. Premium received is $67,999.)

     250    $ (38,125 )

(Strike Price is $55.00. Expiration date is 4/15/05. Premium received is $74,248.)

     250      (43,125 )

Burlington Resources, Inc.

               

(Strike Price is $42.50. Expiration date is 1/21/05. Premium received is $109,897.)

     700      (119,000 )
    

  


       1,200    $ (200,250 )
    

  


 

53


SCHEDULES OF INVESTMENTS IN SECURITIES (continued)

  December 31 , 2004

 

STRONG ADVISOR MID CAP GROWTH FUND

 

     Shares or
Principal
Amount


  

Value

(Note 2)


Common Stocks 99.4%

           

Apparel - Clothing Manufacturing 1.9%

           

Coach, Inc. (b)

   23,000    $ 1,297,200

Banks - West/Southwest 0.4%

           

Placer Sierra Bancshares

   10,500      298,620

Building - Construction Products/Miscellaneous 0.4%

           

USG Corporation (b)

   6,000      241,620

Chemicals - Specialty 0.4%

           

Airgas, Inc.

   11,000      291,610

Computer - IT Services 3.3%

           

Cognizant Technology Solutions Corporation Class A (b)

   39,000      1,650,870

Kanbay International, Inc. (b)

   8,100      253,530

Satyam Computer Services, Ltd. ADR

   14,000      337,820
         

            2,242,220

Computer - Local Networks 2.0%

           

Juniper Networks, Inc. (b)

   24,000      652,560

Polycom, Inc. (b)

   29,000      676,280
         

            1,328,840

Computer - Manufacturers 2.8%

           

Apple Computer, Inc. (b)

   29,000      1,867,600

Computer Software - Desktop 2.0%

           

Adobe Systems, Inc.

   11,000      690,140

Macromedia, Inc. (b)

   22,000      684,640
         

            1,374,780

Computer Software - Security 0.8%

           

VeriSign, Inc. (b)

   17,000      569,840

Diversified Operations 0.8%

           

Textron, Inc.

   7,000      516,600

Electronics - Military Systems 1.1%

           

L-3 Communications Corporation

   10,000      732,400

Electronics - Miscellaneous Components 1.0%

           

Rockwell Automation, Inc.

   14,000      693,700

Electronics - Scientific Measuring 0.5%

           

PerkinElmer, Inc.

   15,600      350,844

Electronics - Semiconductor Manufacturing 4.3%

           

Marvell Technology Group, Ltd. (b)

   51,000      1,808,970

Tessera Technologies, Inc. (b)

   11,000      409,310

Varian Semiconductor Equipment Associates, Inc. (b)

   18,000      663,300
         

            2,881,580

Energy - Other 1.5%

           

CONSOL Energy, Inc.

   24,000      985,200

Finance - Consumer/Commercial Loans 1.4%

           

AmeriCredit Corporation (b)

   38,000      929,100

Finance - Investment Brokers 1.0%

           

Chicago Mercantile Exchange Holdings, Inc.

   3,000      686,100

Finance - Mortgage & Related Services 3.3%

           

Doral Financial Corporation

   45,000      2,216,250

Financial Services - Miscellaneous 5.6%

           

Alliance Data Systems Corporation (b)

   29,000    $ 1,376,920

Euronet Services, Inc. (b)

   16,000      416,320

First Marblehead Corporation (b)

   21,000      1,181,250

Jackson Hewitt Tax Service, Inc.

   31,500      795,375
         

            3,769,865

Household - Consumer Electronics 1.5%

           

Harman International Industries, Inc.

   8,200      1,041,400

Internet - Content 2.7%

           

Ask Jeeves, Inc. (b)

   20,000      535,000

InfoSpace, Inc. (b)

   26,700      1,269,585
         

            1,804,585

Internet - E*Commerce 0.5%

           

Arbinet-thexchange, Inc. (b)

   13,500      335,475

Internet - Internet Service Provider 1.1%

           

j2 Global Communications, Inc. (b)

   21,000      724,500

Internet - Network Security/Solutions 1.4%

           

Digital River, Inc. (b)

   23,000      957,030

Leisure - Gaming/Equipment 3.5%

           

Boyd Gaming Corporation

   16,000      666,400

Station Casinos, Inc.

   31,000      1,695,080
         

            2,361,480

Leisure - Hotels & Motels 3.4%

           

Marriott International, Inc. Class A

   22,000      1,385,560

Starwood Hotels & Resorts Worldwide, Inc.

   16,000      934,400
         

            2,319,960

Machinery - Construction/Mining 1.8%

           

Joy Global, Inc.

   28,000      1,216,040

Machinery - General Industrial 2.5%

           

IDEX Corporation

   19,500      789,750

Pentair, Inc.

   21,000      914,760
         

            1,704,510

Media - Radio/TV 0.5%

           

Central European Media Enterprises, Ltd. Class A (b)

   9,000      350,838

Medical - Biomedical/Biotechnology 1.4%

           

Biosite Diagnostics, Inc. (b)

   9,000      553,860

Sepracor, Inc. (b)

   7,000      415,590
         

            969,450

Medical - Drug/Diversified 1.8%

           

Bone Care International, Inc. (b)

   20,000      557,000

Conor Medsystems, Inc. (b)

   15,500      214,675

HealthExtras, Inc. (b)

   25,500      415,650
         

            1,187,325

Medical - Ethical Drugs 1.1%

           

Eyetech Pharmaceuticals, Inc. (b)

   15,700      714,350

Medical - Health Maintenance Organizations 6.8%

           

Aetna, Inc.

   10,000      1,247,500

Centene Corporation (b)

   18,000      510,300

Molina Healthcare, Inc. (b)

   17,000      788,460

PacifiCare Health Systems, Inc. Class A (b)

   8,000      452,160

Sierra Health Services, Inc. (b)

   29,000      1,598,190
         

            4,596,610

Medical - Outpatient/Home Care 0.4%

           

Amedisys, Inc. (b)

   9,000      291,510

 

54


STRONG ADVISOR MD CAP GROWTH FUND (continued)

 

     Shares or
Principal
Amount


  

Value

(Note 2)


 

Medical - Systems/Equipment 0.8%

               

ArthroCare Corporation (b)

     17,000    $ 545,020  

Medical/Dental - Services 1.9%

               

Covance, Inc. (b)

     10,000      387,500  

Quest Diagnostics, Inc.

     9,000      859,950  
           


              1,247,450  

Medical/Dental - Supplies 1.1%

               

Kinetic Concepts, Inc. (b)

     10,100      770,630  

Oil & Gas - Drilling 0.6%

               

Precision Drilling Corporation (b)

     6,300      395,640  

Oil & Gas - Field Services 1.3%

               

BJ Services Company

     19,000      884,260  

Oil & Gas - Machinery/Equipment 1.9%

               

Grant Prideco, Inc. (b)

     15,000      300,750  

Smith International, Inc. (b)

     18,100      984,821  
           


              1,285,571  

Oil & Gas - United States Exploration & Production 8.4%

               

Bill Barrett Corporation (b)

     13,300      425,467  

EOG Resources, Inc.

     9,000      642,240  

InterOil Corporation (b)

     25,000      946,000  

Ultra Petroleum Corporation (b)

     50,000      2,406,500  

XTO Energy, Inc.

     35,000      1,238,300  
           


              5,658,507  

Real Estate Operations 1.5%

               

The St. Joe Company

     16,000      1,027,200  

Retail - Clothing/Shoe 2.2%

               

American Eagle Outfitters, Inc.

     14,000      659,400  

Urban Outfitters, Inc. (b)

     18,000      799,200  
           


              1,458,600  

Retail - Miscellaneous 1.1%

               

PETCO Animal Supplies, Inc. (b)

     9,000      355,320  

PETsMART, Inc.

     11,000      390,830  
           


              746,150  

Retail - Restaurants 3.1%

               

Starbucks Corporation (b)

     34,000      2,120,240  

Retail/Wholesale - Building Products 0.5%

               

Hughes Supply, Inc.

     11,000      355,850  

Retail/Wholesale - Computer/Cellular 0.4%

               

Navarre Corporation (b)

     16,000      281,600  

Steel - Specialty Alloys 0.7%

               

Oregon Steel Mills, Inc. (b)

     23,000      466,670  

Telecommunications - Equipment 2.0%

               

Dycom Industries, Inc. (b)

     44,000      1,342,880  

Telecommunications - Wireless Equipment 2.0%

               

Research in Motion, Ltd. (b)

     13,000      1,071,460  

Trimble Navigation, Ltd. (b)

     8,700      287,448  
           


              1,358,908  

Telecommunications - Wireless Services 3.1%

               

NII Holdings, Inc. Class B (b)

     17,000      806,650  

Nextel Partners, Inc. Class A (b)

     46,000      898,840  

Western Wireless Corporation Class A (b)

     12,000      351,600  
           


              2,057,090  

Transportation - Truck 1.5%

               

Forward Air Corporation (b)

     22,268    $ 995,380  

Utility - Electric Power 0.4%

               

Ormat Technologies, Inc. (b)

     17,400      283,272  
           


Total Common Stocks (Cost $49,164,978)

            67,129,950  
           


Short-Term Investments (a) 0.8%

               

Repurchase Agreements (c)

               

State Street Bank (Dated 12/31/04), 0.85%, Due 1/03/05 (Repurchase proceeds $577,241); Collateralized by: United States Government & Agency Issues

   $ 577,200      577,200  
           


Total Short-Term Investments (Cost $577,200)

            577,200  
           


Total Investments in Securities (Cost $49,742,178) 100.2%

            67,707,150  

Other Assets and Liabilities, Net (0.2%)

            (154,374 )
           


Net Assets 100.0%

          $ 67,552,776  
           


STRONG ADVISOR SMALL CAP VALUE FUND  
     Shares or
Principal
Amount


  

Value

(Note 2)


 

Common Stocks 92.8%

               

Aerospace - Defense Equipment 0.3%

               

Evans & Sutherland Computer Corporation (b)(d)

     1,008,153    $ 7,026,826  

Auto/Truck - Original Equipment 0.6%

               

Dura Automotive Systems, Inc. Class A (b)

     873,100      9,455,673  

Tower Automotive, Inc. (b)

     1,928,700      4,609,593  
           


              14,065,266  

Auto/Truck - Replacement Parts 0.4%

               

LKQ Corporation (b)

     462,030      9,272,942  

Banks - Southeast 0.7%

               

The Colonial BancGroup, Inc.

     370,100      7,857,223  

Hibernia Corporation Class A

     275,260      8,122,923  
           


              15,980,146  

Building - Air Conditioning & Heating Products 0.5%

               

York International Corporation (e)

     358,000      12,365,320  

Building - Cement/Concrete/Aggregate 0.2%

               

U.S. Concrete, Inc. (b)

     715,675      5,489,227  

Building - Construction Products/Miscellaneous 0.8%

               

Royal Group Technologies, Ltd. (b)

     1,833,600      19,197,792  

Building - Heavy Construction 3.0%

               

Chicago Bridge & Iron Company NV (e)

     1,686,300      67,452,000  

Building - Maintenance & Services 0.3%

               

ABM Industries, Inc. (e)

     397,810      7,844,813  

Building - Paint & Allied Products 0.6%

               

H.B. Fuller Company (e)

     477,800      13,622,078  

 

55


SCHEDULES OF INVESTMENTS IN SECURITIES (continued)

  December 31, 2004

 

STRONG ADVISOR SMALL CAP VALUE FUND (continued)

 

     Shares or
Principal
Amount


  

Value

(Note 2)


Chemicals - Plastics 2.4%

           

Intertape Polymer Group, Inc. (b)(d)

   2,732,600    $ 24,893,986

Intertape Polymer Group, Inc.

           

(Acquired 9/05/03; Cost $680,073)

           

(CAD) (b)(g)(h)

   93,000      845,243

PolyOne Corporation (b)

   3,012,000      27,288,720
         

            53,027,949

Chemicals - Specialty 1.5%

           

OM Group, Inc. (b)

   1,039,100      33,687,622

Commercial Services - Advertising 1.3%

           

R.H. Donnelley Corporation (b)(e)

   477,800      28,214,090

Commercial Services - Consulting 0.0%

           

Navigant Consulting, Inc. (b)

   100      2,660

Commercial Services - Healthcare 0.6%

           

Healthcare Services Group, Inc.

   606,050      12,630,082

Commercial Services - Miscellaneous 0.3%

           

Providence Service Corporation (b)

   275,669      5,780,779

Commercial Services - Security/Safety 2.7%

           

Armor Holdings, Inc. (b)(e)

   302,800      14,237,656

DHB Industries, Inc. (b)(e)

   162,500      3,094,000

The GEO Group, Inc. (b)(d)

   964,610      25,639,334

OSI Systems, Inc. (b)(e)

   768,850      17,460,584
         

            60,431,574

Commercial Services - Staffing 2.4%

           

CDI Corporation

   389,345      8,324,196

Cross Country Healthcare, Inc. (b)

   392,600      7,098,208

Kforce, Inc. (b)(d)

   1,904,860      21,143,946

MPS Group, Inc. (b)

   1,450,315      17,780,862
         

            54,347,212

Computer - Data Storage 0.1%

           

Iomega Corporation (b)

   226,210      1,253,203

Computer - Manufacturers 0.5%

           

Cray, Inc. (b)

   2,341,700      10,912,322

Computer Software - Enterprise 1.4%

           

JDA Software Group, Inc. (b)(e)

   1,213,000      16,521,060

Lightbridge, Inc. (b)(d)

   2,374,400      14,341,376

TIBCO Software, Inc. (b)(e)

   50,000      667,000
         

            31,529,436

Computer Software - Medical 1.4%

           

IDX Systems Corporation (b)(e)

   944,300      32,540,578

Containers 0.2%

           

Constar International, Inc. (b)

   577,700      4,459,844

Electrical - Equipment 0.4%

           

Encore Wire Corporation (b)

   596,600      7,952,678

Electronics - Contract Manufacturing 0.4%

           

Celestica, Inc. (b)

   570,200      8,045,522

Electronics - Miscellaneous Components 0.5%

           

Coherent, Inc. (b)(e)

   386,100      11,752,884

Electronics - Parts Distributors 0.3%

           

Richardson Electronics, Ltd.

   671,800      7,127,798

Electronics - Scientific Measuring 0.4%

           

Newport Corporation (b)(e)

   571,600    $ 8,059,560

Electronics - Semiconductor Manufacturing 1.8%

           

Cirrus Logic, Inc. (b)

   2,277,400      12,548,474

Credence Systems Corporation (b)(e)

   951,025      8,701,879

STATS ChipPAC, Ltd. ADR (b)

   1,546,147      9,462,420

TriQuint Semiconductor, Inc. (b)

   1,083,120      4,819,884

Zoran Corporation (b)

   365,600      4,233,648
         

            39,766,305

Energy - Other 0.1%

           

Headwaters, Inc. (b)(e)

   46,400      1,322,400

Finance - Consumer/Commercial Loans 0.1%

           

World Acceptance Corporation (b)

   106,446      2,928,330

Finance - Equity REIT 0.6%

           

American Financial Realty Trust

   598,100      9,677,258

Government Properties Trust, Inc.

   384,700      3,793,142
         

            13,470,400

Finance - Investment Brokers 0.0%

           

Labranche & Company, Inc. (b)

   14,700      131,712

Food - Miscellaneous Preparation 1.4%

           

Del Monte Foods Company (b)

   2,873,785      31,669,111

Insurance - Diversified 0.1%

           

PXRE Group, Ltd.

   116,100      2,926,881

Insurance - Property/Casualty/Title 2.8%

           

Argonaut Group, Inc. (b)

   424,385      8,967,255

Donegal Group, Inc. Class A

   257,800      5,911,354

Endurance Specialty Holdings, Ltd.

   410,810      14,049,702

Mercury General Corporation

   416,510      24,957,279

Montpelier Re Holdings, Ltd.

   260,900      10,031,605
         

            63,917,195

Internet - E*Commerce 0.0%

           

Stamps.com, Inc. (b)

   48,475      767,844

Internet - Internet Service Provider 1.6%

           

EarthLink, Inc. (b)(e)

   2,632,200      30,322,944

Net2Phone, Inc. (b)

   1,957,395      6,655,143
         

            36,978,087

Leisure - Services 0.0%

           

Great Wolf Resorts, Inc. (b)

   16,500      368,610

Pegasus Solutions, Inc. (b)

   1,000      12,600
         

            381,210

Machinery - General Industrial 2.2%

           

Robbins & Myers, Inc.

   363,500      8,662,205

UNOVA, Inc. (b)(e)

   1,629,500      41,210,055
         

            49,872,260

Medical - Biomedical/Biotechnology 0.3%

           

CV Therapeutics, Inc. (b)(e)

   300,600      6,913,800

Medical - Generic Drugs 0.5%

           

Andrx Corporation (b)(e)

   546,100      11,921,363

Medical - Nursing Homes 2.4%

           

Beverly Enterprises, Inc. (b)

   3,854,700      35,270,505

Manor Care, Inc.

   525,600      18,622,008
         

            53,892,513

Medical - Outpatient/Home Care 0.7%

           

Gentiva Health Services, Inc. (b)

   978,300      16,357,176

 

 

56


STRONG ADVISOR SMALL CAP VALUE FUND (continued)

 

    

Shares or

Principal

Amount


  

Value

(Note 2)


Medical - Products 1.4%

           

Allied Healthcare Products, Inc. (b)(d)

   1,044,879    $ 6,843,957

Discovery Partners International, Inc. (b)(d)

   1,936,800      9,199,800

OraSure Technologies, Inc. (b)

   2,185,750      14,688,240
         

            30,731,997

Medical - Systems/Equipment 0.8%

           

Applera Corporation-Applied Biosystems Group (e)

   851,900      17,813,229

Medical/Dental - Services 0.4%

           

Covalent Group, Inc. (b)

   259,133      660,789

Omnicare, Inc.

   218,000      7,547,160
         

            8,207,949

Metal Ores - Gold/Silver 8.8%

           

Apex Silver Mines, Ltd. (b)(d)

   2,477,000      42,554,860

Glamis Gold, Ltd. (b)(e)

   3,389,800      58,168,968

Goldcorp, Inc. (e)

   2,118,200      31,857,728

Harmony Gold Mining Company, Ltd. Sponsored ADR

   2,369,400      21,964,338

Meridian Gold, Inc. (b)(e)

   1,389,500      26,358,815

Randgold Resources, Ltd. ADR (b)(e)

   1,483,000      16,906,200
         

            197,810,909

Metal Processing & Fabrication 0.4%

           

Webco Industries, Inc. (b)(d)

   905,745      9,754,874

Mining - Gems 0.7%

           

Eldorado Gold Corporation (b)

   46,500      137,175

Eldorado Gold Corporation (CAD) (b)(h)

   3,056,900      9,074,097

Quadra Mining, Ltd. (CAD) (b)(h)

   1,287,300      6,118,243
         

            15,329,515

Oil & Gas - Drilling 3.7%

           

Grey Wolf, Inc. (b)

   2,039,600      10,748,692

Helmerich & Payne, Inc. (e)

   584,480      19,895,699

Parker Drilling Company (b)

   1,469,200      5,773,956

Pride International, Inc. (b)

   1,209,300      24,839,022

Transocean, Inc. (b)(e)

   523,000      22,169,970
         

            83,427,339

Oil & Gas - Field Services 8.9%

           

BJ Services Company (e)

   344,200      16,019,068

Global Industries, Ltd. (b)(d)

   6,068,600      50,308,694

Key Energy Services, Inc. (b)

   2,240,800      26,441,440

Layne Christensen Company (b)(d)

   1,474,092      26,754,770

Matrix Service Company (b)(d)

   1,534,334      12,366,732

Newpark Resources, Inc. (b)

   3,579,860      18,436,279

Oceaneering International, Inc. (b)(e)

   697,360      26,025,475

Petroleum Helicopters, Inc. (b)

   120,374      3,103,121

Petroleum Helicopters, Inc. (non-voting) (b)(d)

   179,477      4,499,488

Willbros Group, Inc. (b)

   665,300      15,335,165
         

            199,290,232

Oil & Gas - Machinery/Equipment 1.0%

           

Input/Output, Inc. (b)(e)

   1,085,190      9,593,080

Smith International, Inc. (b)(e)

   231,400      12,590,474
         

            22,183,554

Oil & Gas - United States Exploration & Production 12.2%

           

Forest Oil Corporation (b)(e)

   1,891,100      59,985,692

McMoRan Exploration Company (b)(d)(e)

   1,162,800      21,744,360

Newfield Exploration Company (b)(e)

   248,300      14,662,115

Noble Energy, Inc. (e)

   479,000      29,535,140

PetroQuest Energy, Inc. (b)

   798,200      3,951,090

Pioneer Natural Resources Company (e)

   589,100      20,677,410

Range Resources Corporation (d)(e)

   4,653,800      95,216,748

Remington Oil & Gas Corporation (b)

   492,300    $ 13,415,175

Stone Energy Corporation (b)(e)

   332,100      14,974,389
         

            274,162,119

Paper & Paper Products 1.9%

           

Chesapeake Corporation

   461,680      12,539,229

Wausau-Mosinee Paper Corporation

   1,701,700      30,392,362
         

            42,931,591

Pollution Control - Services 0.9%

           

Calgon Carbon Corporation (d)

   2,227,200      20,222,976

Retail - Clothing/Shoes 1.3%

           

Foot Locker, Inc. (e)

   459,400      12,371,642

Payless ShoeSource, Inc. (b)

   320,500      3,942,150

Too, Inc. (b)

   528,200      12,919,772
         

            29,233,564

Retail - Consumer Electronics 0.3%

           

Circuit City Stores, Inc.

   380,700      5,954,148

Retail - Major Discount Chains 0.0%

           

Shopko Stores, Inc. (b)(e)

   20,000      373,600

Retail - Miscellaneous 0.6%

           

Barbeques Galore, Ltd. Sponsored ADR (d)

   549,021      3,294,126

Sharper Image Corporation (b)(e)

   552,800      10,420,280
         

            13,714,406

Steel - Producers 5.6%

           

IPSCO, Inc.

   724,400      34,626,320

Roanoke Electric Steel Corporation

   502,800      10,393,379

Steel Dynamics, Inc. (e)

   952,100      36,065,548

United States Steel Corporation (e)

   886,800      45,448,500
         

            126,533,747

Steel - Specialty Alloys 2.3%

           

Carpenter Technology Corporation (e)

   302,250      17,669,535

GrafTech International, Ltd. (b)(e)

   3,551,900      33,600,974
         

            51,270,509

Telecommunications - Equipment 0.3%

           

ADC Telecommunications, Inc. (b)

   2,297,500      6,157,300

Telecommunications - Services 0.5%

           

Cincinnati Bell, Inc. (b)

   2,843,400      11,800,110

Transportation - Airline 1.3%

           

Lan Airlines SA Sponsored ADR

   902,900      29,073,380

Transportation - Truck 0.7%

           

Covenant Transport, Inc. Class A (b)(d)

   787,700      16,399,914
         

Total Common Stocks (Cost $1,352,216,783)

          2,089,665,752
         

Convertible Preferred Stocks 0.7%

           

Oil & Gas - United States Exploration & Production

           

Petrohawk Energy Corporation Series B (Acquired 11/16/04; Cost $13,330,000) (g)

   172,000      14,723,200
         

Total Convertible Preferred Stocks (Cost $13,330,000)

          14,723,200
         

 

 

57


SCHEDULES OF INVESTMENTS IN SECURITIES (continued)

  December 31, 2004

 

STRONG ADVISOR SMALL CAP VALUE FUND (continued)

 

    

Shares or
Principal

Amount


   

Value

(Note 2)


 

Short-Term Investments (a) 7.8%

                

Repurchase Agreements (c)

                

ABN AMRO Inc. (Dated 12/31/04),2.15%, Due 1/03/05 (Repurchase proceeds $173,931,157); Collateralized by: United States Government & Agency Issues

   $ 173,900,000     $ 173,900,000  

State Street Bank (Dated 12/31/04),0.85%, Due 1/03/05 (Repurchase proceeds $3,025,014); Collateralized by: United States Government & Agency Issues

     3,024,800       3,024,800  
            


Total Short-Term Investments (Cost $176,924,800)

             176,924,800  
            


Total Investments in Securities (Cost $1,542,471,583) 101.3%

             2,281,313,752  

Other Assets and Liabilities, Net (1.3%)

             (29,776,182 )
            


Net Assets 100.0%

           $ 2,251,537,570  
            


WRITTEN OPTIONS ACTIVITY

                
     Contracts

    Premiums

 

Options outstanding at beginning of year

     22,822     $ 7,843,245  

Options written during the year

     104,564       26,457,536  

Options closed

     (81,942 )     (22,049,594 )

Options expired

     (4,729 )     (635,823 )

Options exercised

     (4,492 )     (1,246,293 )
    


 


Options outstanding at end of year

     36,223     $ 10,369,071  
    


 


WRITTEN CALL OPTION DETAIL

                
    

Contracts

(100 shares

per contract)


   

Value

(Note 2)


 

ABM Industries, Inc.

                

(Strike Price is $22.50. Expiration date is 7/15/05.

Premium received is $11,200.)

     100     $ (4,000 )

Andrx Corporation

                

(Strike Price is $20.00. Expiration date is 1/21/05.

Premium received is $16,700.)

     100       (20,250 )

(Strike Price is $17.50. Expiration date is 3/18/05.

Premium received is $243,494.)

     500       (250,000 )

(Strike Price is $20.00. Expiration date is 3/18/05.

Premium received is $84,148.)

     450       (139,500 )

Applera Corporation-Applied Biosystems Group

                

(Strike Price is $20.00. Expiration date is 1/21/05.

Premium received is $88,948.)

     850       (95,625 )

(Strike Price is $20.00. Expiration date is 3/18/05.

Premium received is $66,798.)

     400       (63,000 )

Armor Holdings, Inc.

                

(Strike Price is $45.00. Expiration date is 1/21/05.

Premium received is $16,200.)

     100       (27,000 )

(Strike Price is $40.00. Expiration date is 2/18/05.

Premium received is $58,049.)

     150       (114,000 )

(Strike Price is $45.00. Expiration date is 2/18/05.

Premium received is $250,244.)

     1,000       (370,000 )

(Strike Price is $50.00. Expiration date is 2/18/05.

Premium received is $31,049.)

     150       (21,375 )

(Strike Price is $50.00. Expiration date is 5/20/05.

Premium received is $70,398.)

     200       (66,000 )

BJ Services Company

                

(Strike Price is $45.00. Expiration date is 1/21/05.

Premium received is $16,350.)

     50     $ (11,750 )

(Strike Price is $47.50. Expiration date is 1/21/05.

Premium received is $96,299.)

     400       (37,000 )

(Strike Price is $45.00. Expiration date is 2/18/05.

Premium received is $29,699.)

     100       (31,000 )

(Strike Price is $50.00. Expiration date is 4/15/05.

Premium received is $114,797.)

     400       (74,000 )

CV Therapeutics, Inc.

                

(Strike Price is $17.50. Expiration date is 1/21/05.

Premium received is $22,199.)

     300       (166,500 )

(Strike Price is $22.50. Expiration date is 1/21/05.

Premium received is $61,898.)

     450       (51,750 )

(Strike Price is $17.50. Expiration date is 4/15/05.

Premium received is $74,433.)

     100       (69,500 )

(Strike Price is $20.00. Expiration date is 4/15/05.

Premium received is $121,397.)

     200       (106,000 )

(Strike Price is $22.50. Expiration date is 4/15/05.

Premium received is $95,366.)

     200       (79,000 )

(Strike Price is $30.00. Expiration date is 7/15/05.

Premium received is $58,803.)

     150       (56,250 )

Carpenter Technology Corporation

                

(Strike Price is $55.00. Expiration date is 1/21/05.

Premium received is $291,574.)

     600       (276,000 )

(Strike Price is $60.00. Expiration date is 1/21/05.

Premium received is $67,748.)

     250       (43,125 )

(Strike Price is $55.00. Expiration date is 2/18/05.

Premium received is $131,747.)

     250       (143,750 )

(Strike Price is $60.00. Expiration date is 2/18/05.

Premium received is $40,299.)

     150       (45,750 )

(Strike Price is $45.00. Expiration date is 3/18/05.

Premium received is $419,090.)

     300       (423,000 )

(Strike Price is $50.00. Expiration date is 3/18/05.

Premium received is $503,488.)

     500       (500,000 )

(Strike Price is $55.00. Expiration date is 3/18/05.

Premium received is $338,492.)

     500       (327,500 )

(Strike Price is $60.00. Expiration date is 6/17/05.

Premium received is $188,096.)

     300       (184,500 )

Chicago Bridge & Iron Company NV

                

(Strike Price is $30.00. Expiration date is 1/21/05.

Premium received is $14,976.)

     78       (78,000 )

(Strike Price is $35.00. Expiration date is 4/15/05.

Premium received is $93,398.)

     200       (114,000 )

(Strike Price is $40.00. Expiration date is 4/15/05.

Premium received is $12,700.)

     100       (24,000 )

Coherent, Inc.

                

(Strike Price is $30.00. Expiration date is 1/21/05.

Premium received is $15,790.)

     100       (12,250 )

(Strike Price is $30.00. Expiration date is 2/18/05.

Premium received is $109,447.)

     675       (129,937 )

Credence Systems Corporation

                

(Strike Price is $7.50. Expiration date is 5/20/05.

Premium received is $25,249.)

     125       (27,188 )

 

58


STRONG ADVISOR SMALL CAP VALUE FUND (continued)

 

     Contracts
(100 shares
per contract)


  

Value

(Note 2)


 

DHB Industries, Inc.

             

(Strike Price is $17.50. Expiration date is 1/21/05.

Premium received is $104,507.)

   500    $ (101,250 )

(Strike Price is $20.00. Expiration date is 1/21/05.

Premium received is $50,449.)

   350      (24,500 )

(Strike Price is $17.50. Expiration date is 2/18/05.

Premium received is $55,899.)

   200      (56,500 )

(Strike Price is $20.00. Expiration date is 2/18/05.

Premium received is $37,899.)

   200      (32,000 )

(Strike Price is $17.50. Expiration date is 4/15/05.

Premium received is $69,970.)

   200      (76,000 )

(Strike Price is $20.00. Expiration date is 4/15/05.

Premium received is $44,974.)

   175      (46,812 )

EarthLink, Inc.

             

(Strike Price is $10.00. Expiration date is 1/21/05.

Premium received is $84,238.)

   645      (101,587 )

(Strike Price is $10.00. Expiration date is 7/15/05.

Premium received is $22,699.)

   100      (22,250 )

(Strike Price is $12.50. Expiration date is 7/15/05.

Premium received is $44,499.)

   500      (45,000 )

Foot Locker, Inc.

             

(Strike Price is $25.00. Expiration date is 2/18/05.

Premium received is $47,399.)

   200      (45,500 )

(Strike Price is $25.00. Expiration date is 5/20/05.

Premium received is $59,399.)

   200      (63,000 )

Forest Oil Corporation

             

(Strike Price is $30.00. Expiration date is 2/18/05.

Premium received is $27,699.)

   100      (26,000 )

(Strike Price is $30.00. Expiration date is 5/20/05.

Premium received is $122,097.)

   300      (111,000 )

H.B. Fuller Company

             

(Strike Price is $25.00. Expiration date is 2/18/05.

Premium received is $130,307.)

   550      (198,000 )

(Strike Price is $25.00. Expiration date is 5/20/05.

Premium received is $346,992.)

   1,000      (400,000 )

Glamis Gold, Ltd.

             

(Strike Price is $17.50. Expiration date is 2/18/05.

Premium received is $23,899.)

   200      (17,500 )

(Strike Price is $20.00. Expiration date is 5/20/05.

Premium received is $98,598.)

   550      (45,375 )

Goldcorp, Inc.

             

(Strike Price is $15.00. Expiration date is 2/18/05.

Premium received is $23,699.)