AMERICAN CAPITAL ENTERPRISE FUND INC, N-30D, 1996-03-07

AMERICAN CAPITAL ENTERPRISE FUND INC
N-30D, 1996-03-07

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<PAGE>

TABLE OF CONTENTS

<TABLE>
<S> <C>
Letter to Shareholders................................ 1
Performance Results................................... 3
Performance Perspective............................... 4
Portfolio Management Review........................... 5
Your Diversified Portfolio............................ 7
Equity Management Philosophy.......................... 8
Portfolio of Investments.............................. 9
Statement of Assets and Liabilities................... 13
Statement of Operations............................... 14
Statement of Changes in Net Assets.................... 15
Financial Highlights.................................. 16
Notes to Financial Statements......................... 19
Report of Independent Accountants..................... 22
</TABLE>

ENT ANR 2/96
<PAGE>

LETTER TO SHAREHOLDERS

[PHOTO OF DENNIS J. MCDONNELL AND DON G. POWELL]

January 24, 1996

Dear Shareholder,
For most investors, it would be hard to surpass the success enjoyed during
1995. The stock and bond markets achieved substantial gains, driven by a com-
bination of continuing economic growth and low inflation. The strength of eq-
uity and fixed-income securities in 1995 was particularly impressive because
it followed a year in which both markets declined. People who remained in-
vested during 1995 generally shared in the growth of the markets, while in-
vestors who retreated after 1994's downturn may have missed out on the double-
digit returns.
The rebound in the markets last year reinforces the importance of maintain-
ing a long-term perspective for your investments.
While the environment for stocks and bonds remains positive, it is unlikely
that 1996 will see a repeat of the markets' strong 1995 performance. However,
over the long-term, stocks have outperformed virtually all other types of in-
vestments, and bonds have met the needs of investors who seek capital preser-
vation and regular income.

ECONOMIC OVERVIEW
The U.S. economy grew throughout 1995, though the rate of growth slowed to-
ward year-end. The gross domestic product (the value of all goods and services
produced in the United States) grew at an annual rate of more than 4.2 percent
in the third quarter of 1995, but slowed to an estimated 2 to 3 percent in the
fourth quarter, with retail and auto sales particularly sluggish. The slower
growth rate eased concerns about a rise in inflation and allowed the Federal
Reserve Board to lower short-term interest rates by a quarter-percentage point
in late December. The reduction in rates during the latter half of 1995 is ex-
pected to help generate moderate economic growth in 1996, just as the Fed's
raising of short-term rates in 1994 helped slow economic growth in 1995.
The cut in short-term rates, combined with modest growth forecasts, was
viewed by the financial markets as a positive event, pushing up both stock and
bond prices. For the year ended December 31, 1995, the Standard & Poor's 500-
Stock Index achieved a total return of 37.45 percent. The yield on 10-year
Treasury notes was 5.57 percent on December 31, compared to 7.83 percent at
the beginning of the year. Because bond prices and yields move in opposite di-
rections, bond prices rose. Many observers expect the Fed to cut rates further
if Congress and the President are able to reach an agreement on the federal
budget, provided economic conditions justify further easing.
With a low inflation, low interest rate environment, corporate earnings re-
mained quite strong during the year, helping to push stocks to new highs. The
strongest sectors were technology and finance, as these stocks benefited from
the impact of the Internet, telecommunications deregulation and bank mergers.
U.S. companies with global operations also did well, aided by a declining U.S.
dollar.

ECONOMIC OUTLOOK
Looking ahead, we are cautiously optimistic. We expect the economy to grow
at a rate of 2 to 3 percent throughout 1996, with growth stronger in the sec-
ond half of the year as the full impact of the Fed's rate cuts take effect.
Lower rates will have the greatest impact on interest-sensitive industries,
such as housing. Although inflation appears to be under control, there proba-
bly will be some cyclical upward pressure in 1996.

1
Continued on page two
<PAGE>

The current economic conditions are ideal for stocks, especially those of
smaller companies, because they tend to be affected less by economic cycles.
The outlook for the fixed-income market--including municipal bonds--is posi-
tive, too. In the near-term, we believe domestic markets will benefit from a
stable U.S. dollar and increased business activity driven in part by a number
of recently announced strategic reorganizations of some of the nation's blue
chip industry leaders.
During recent months, debate over tax reform and the federal deficit has dom-
inated the agenda in Washington. Now that we are in a presidential election
year, tax reform likely will replace the budget battle as the top issue in
Washington. There has been varied speculation about the impact tax reform could
have on the economy and on various types of investments. We are following the
tax reform debate very closely, and we will keep you updated on this issue
throughout the year. See the winter issue of Your Portfolio for a detailed dis-
cussion of tax reform.
On the following pages, you can read about your Fund's performance in 1995,
as well as the portfolio management team's outlook for the Fund in the coming
months. We hope that you will find this information helpful.

CORPORATE NEWS
As part of our commitment to helping you achieve your investment goals, Van
Kampen American Capital strives to provide shareholders with the best service
in the mutual fund industry. That is why we are especially pleased to have re-
ceived the 1995 Quality Tested Service Seal, which is awarded annually by
DALBAR, Inc., an independent research firm. The Seal, which symbolizes the
achievement of the highest tier of service in the mutual fund industry, was
awarded to American Capital annually from 1990 to 1994 and we are honored that
the service provided by Van Kampen American Capital has achieved the same level
of excellence.

Sincerely,

/s/ Don G. Powell /s/ Dennis J. McDonnell
Don G. Powell Dennis J. McDonnell
Chairman President
Van Kampen American Capital Van Kampen American Capital
Asset Management, Inc. Asset Management, Inc.

2
<PAGE>

PERFORMANCE RESULTS FOR THE PERIOD ENDED DECEMBER 31, 1995

VAN KAMPEN AMERICAN CAPITAL ENTERPRISE FUND

<TABLE>
<CAPTION>
A SHARES B SHARES C SHARES

<S> <C> <C> <C>
TOTAL RETURNS
One-year total return based on NAV1................. 33.92% 32.82% 32.85%
One-year total return2.............................. 26.19% 27.82% 31.85%
Five-year average annual total return2.............. 16.09% N/A N/A
Ten-year average annual total return/2/............. 12.83% N/A N/A
Life-of-Fund average annual total return2........... 12.83% 14.05% 14.56%
Commencement Date................................... 01/07/54 12/20/91 07/20/93
</TABLE>

N/A = Not Applicable

1Assumes reinvestment of all distributions for the period and does not include
payment of the maximum sales charge (5.75% for A shares) or contingent deferred
sales charge for early withdrawal (5% for B shares and 1% for C shares).

2Standardized total return. Assumes reinvestment of all distributions for the
period and includes payment of the maximum sales charge (A shares) or
contingent deferred sales charge for early withdrawal (B and C shares).

See the Prior Performance section of the current prospectus. Past performance
does not guarantee future results. Investment return and net asset value will
fluctuate with market conditions. Fund shares, when redeemed, may be worth
more or less than their original cost.

3
<PAGE>

PUTTING YOUR FUND'S PERFORMANCE IN PERSPECTIVE

As you evaluate your progress toward achieving your financial goals, it is
important to track your investment portfolio's performance at regular inter-
vals. A good starting point is a comparison of your investment holdings to an
applicable benchmark, such as a broad-based market index. Such a comparison
can:

. Illustrate the general market environment in which your investments are
being managed

. Reflect the impact of favorable market trends or difficult market condi-
tions

. Help you evaluate the extent to which your Fund's management team has re-
sponded to the opportunities and challenges presented to them over the
period measured

For these reasons, you may find it helpful to review the chart below, which
compares your Fund's performance to that of the Standard & Poor's 500-Stock
Index and the Lipper Growth Fund Index over time. These indices are unmanaged
statistical composites and do not reflect any commissions or fees which would
be incurred by an investor purchasing the securities they represent. Similar-
ly, their performance does not reflect any sales charges or other costs which
would be applicable to an actively managed portfolio, such as that of the
Fund.

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
Van Kampen American Capital Enterprise Fund vs. Standard & Poor's 500-
Stock Index and the Lipper Growth Fund Index (December 1985 through
December 1995)

[GRAPH APPEARS HERE]

VKAC Enterprise Standard & Poor's Lipper Growth
Fund 500-Stock Index* Fund Index
--------------- ----------------- -------------
<S> <C> <C> <C>
Dec 1985 9,427 10,000 10,000
Dec 1986 10,352 11,862 11,560
Dec 1987 10,465 12,476 11,931
Dec 1988 11,727 14,534 13,619
Dec 1989 15,383 19,125 17,363
Dec 1990 14,941 18,530 16,423
Dec 1991 20,802 24,151 22,271
Dec 1992 22,548 25,988 23,971
Dec 1993 25,018 28,596 26,842
Dec 1994 24,971 28,984 26,420
Dec 1995 33,442 39,837 34,737

</TABLE>

The above chart reflects the performance of Class A shares of the Fund. The
performance of Class A shares will differ from that of other share classes of
the Fund because of the difference in sales charges and/or expenses paid by
shareholders investing in the different share classes. The Fund's performance
assumes reinvestment of all distributions for the period ended December 31,
1995, and includes payment of the maximum sales charge (5.75% for A shares).

While past performance is not indicative of future performance, the above
information provides a broader vantage point from which to evaluate the
discussion of the Fund's performance found in the following pages.

*The Standard & Poor's 500-Stock Index represents general stock market
performance and was initially selected as a benchmark for the Fund's
performance; additionally the Lipper Growth Fund Index was selected to
represent a more narrow-based comparison for the Fund.

4
<PAGE>

PORTFOLIO MANAGEMENT REVIEW

VAN KAMPEN AMERICAN CAPITAL ENTERPRISE FUND

We recently spoke with the management team of the Van Kampen American Capital
Enterprise Fund about the key events and economic forces which shaped the
markets during the past fiscal year. The team includes Jeff D. New, portfolio
manager, and Alan T. Sachtleben, executive vice president, equity investments.
The following excerpts reflect their views on the Fund's performance during
the twelve-month period ended December 31, 1995.

Q THE STOCK MARKET ENJOYED STRONG RETURNS DURING 1995. WHAT FACTORS HAD THE
MOST IMPACT ON THE FUND'S PERFORMANCE DURING THE PAST YEAR?

A The stock market as a whole benefited from continued--although slower--
economic growth that generated strong corporate profits without experienc-
ing increased inflation. The Fund benefited from having significant
investments in technology, finance and health care stocks, which were some of
the strongest sectors during the reporting period. While the Fund benefited
from technology's strong performance during the year, our insistence on being
diversified limited our investment in technology stocks, which benefited the
Fund in the fourth quarter when the technology sector began to show some signs
of weakness. We reduced the Fund's technology holdings--particularly semicon-
ductor stocks--toward year-end, when their valuations had reached high levels
and an improved supply and demand balance reduced earnings growth projections.

We continued to focus on stock selection. One emphasis was identifying those
companies that we believe were poised to benefit from industry consolidation,
either by acquiring other firms or by being acquired. Another emphasis was
finding companies with a high certainty of meeting their earnings outlook in
any economic environment. The Fund's diversification at the end of the year is
illustrated by the chart below.

[LOGO/ART APPEARS HERE]
[Pie Chart of Portfolio Holdings by Sector
as of December 31, 1995 appears here]

Energy....................................... 5%
Raw Materials/Processing Industries.......... 6%
Produce Manufacturing........................ 5%
Technologies................................. 17%
Consumer Non-Durables........................ 8%
Consumer Distribution........................ 8%
Consumer Services............................ 7%
Finance...................................... 14%
Health Care.................................. 12%
Utilities.................................... 5%
Other........................................ 13%

Q CAN YOU GIVE A FEW EXAMPLES OF STOCKS THE FUND OWNED DURING 1995 THAT BEN-
EFITED FROM THIS CONSOLIDATION TREND?

A United Waste Systems, a trash collection firm in the Midwest, acquired
many smaller companies, streamlining their operations and increasing prof-
its. In industrial services, Praxair became an even bigger supplier of indus-
trial gases by acquiring smaller firms.

Of course, not all of the securities in the portfolio performed as well and
past performance is no guarantee of future performance.

5
<PAGE>

Q WHAT CHANGES DID YOU MAKE TO THE PORTFOLIO DURING THE PAST YEAR?

A We reduced the Fund's overall exposure to the economic cycle, since we be-
lieve we are in the late stages of an economic expansion. As a result, we
have focused on companies that either are uniquely positioned with a particular
service or product, or those companies in which we have a high degree of confi-
dence in their earnings outlook. In terms of economic sectors, we reduced the
Fund's holdings in the paper and semiconductor industries, while increasing its
holdings in financial services and telecommunications.

Q HOW DID THE FUND PERFORM DURING THE YEAR ENDED DECEMBER 31, 1995?

A Class A shares of the Fund achieved a total return at net asset value of
33.92 percent/1/, including reinvestment of dividends totaling $0.0725 per
share and a capital gains distribution of $2.10 per share. By comparison, the
Standard & Poor's 500-Stock Index, a broad-based, unmanaged index that reflects
general stock market performance, achieved a total return of 37.45 percent for
the period. The Lipper Growth Fund Index, which represents the average perfor-
mance of the largest midcap funds, achieved a total return of 31.48 percent.
Neither index reflects any commissions or fees that would be paid by an in-
vestor purchasing the securities it represents. (Please refer to the chart on
page three for additional Fund performance results.)

Q WHAT IS THE OUTLOOK FOR STOCKS?

A The outlook is positive, which is not to say that a correction could not
occur in the near-term. The major issue is whether corporate earnings will
maintain their current levels during the next year. However, some very positive
forces are present: moderate economic growth, low inflation and acceptable lev-
els of interest rates. Looking further into the future, these three condi-
tions--aided by the Federal Reserve Board's decision in December to lower
short-term interest rates--should lead to increasing corporate profits which,
in turn, should lead to higher stock prices.

/s/ Alan T. Sachtleben /s/ Jeff D. New
Alan T. Sachtleben Jeff D. New
Executive Vice President Portfolio Manager
Equity Investments

6
Please see footnotes on page three
<PAGE>

YOUR DIVERSIFIED PORTFOLIO

VAN KAMPEN AMERICAN CAPITAL ENTERPRISE FUND

Your investment in the Van Kampen American Capital Enterprise Fund makes you a
part owner of a diversified portfolio of stocks. Here is a list of the ten
largest stock holdings in the portfolio as of December 31, 1995, and a brief
description of each holding.

TOP TEN STOCK HOLDINGS

<TABLE>
<CAPTION>
PERCENT OF NET ASSETS PERCENT OF NET ASSETS
AS OF DECEMBER 31, 1995 SIX MONTHS AGO
- ------------------------------------------------------------------------------------------------------------------------

<S> <C> <C>
PHILIP MORRIS COMPANIES INC. 3.7% 1.8%
Major producer and distributor of food and tobacco products.
FEDERAL NATIONAL MORTGAGE ASSOC. 2.9% 1.1%
Buys conventional and federally insured mortgages from private lenders.
PEPSICO INC. 1.7% 1.0%
Diversified consumer products company with major subsidiaries such as
Pepsi and Pizza Hut.
MCI COMMUNICATIONS 1.5% 0.4%
One of the world's leading providers of long-distance and other tele-
communications services.
MOBIL CORP. 1.5% 0.4%
Major producer and supplier of energy products worldwide.
SCHERING PLOUGH CORP. 1.5% 1.0%
Major manufacturer of pharmaceutical and health care products.
SAFEWAY INC. 1.4% 0.7%
One of the largest supermarket chains in the United States.
SMITHKLINE BEECHAM 1.4% 0.4%
Major manufacturer of pharmaceutical and health care products.
EXXON CORP. 1.4% 0.7%
Major producer and supplier of energy products worldwide.
WORLDCOM INC. 1.4% 1.0%
Formerly LDDS. Major provider of long-distance telecommunications serv-
ices.
</TABLE>

7
<PAGE>

MANAGING YOUR EQUITY INVESTMENT FOR LONG-TERM PERFORMANCE

VAN KAMPEN AMERICAN CAPITAL ENTERPRISE FUND

- --------------------------------------------------------------------------------

Do you ever wonder how a mutual fund invests your money? At Van Kampen American
Capital, we manage our equity funds using a four-step investment process de-
signed to produce consistently good results over shorter periods of time and
competitive long-term performance.

[_] FULLY INVESTED. The money you invest in one of our stock funds normally will
be fully invested in the market to seek to maximize your potential for long-term
returns. The importance of being fully in-vested is illustrated by the charts at
right. By missing fewer than 4 percent of the months during the past 68 years,
the value of $1 in-vested in 1926 was $11.57 at the end of 1994, compared to
$810.54 for $1 that was invested for the entire pe-riod. During the five-year
period (1990-1994), the average annual to-tal return for stocks, as measured by
the Standard & Poor's 500-Stock Index, a broad-based, unmanaged in-dex, was 8.87
percent. However, the average annual return for the S&P 500 for the same period
excluding the 20 best days for stock market performance, was just 0.67 percent.
Of course, past performance is no guarantee of future performance.

[_] BROADLY DIVERSIFIED. A portfolio that is broadly diversified can help reduce
risk and increase relative stability.

Since our goal is consistency, we emphasize stock funds that are broadly
diversified both in terms of the number of industries and the number of stocks
within each industry in which they invest. Generally, our stock funds invest in
12 broad economic sectors, and in many individual stocks within each sector.

[_] CLEARLY DEFINED STRUCTURE. Main-taining a fund's basic characteris-tics over
time is an important component in delivering consistent results. It also is
important to ef-fective asset allocation. The basic characteristics of our funds
are de-termined by a pre-defined profile which remains constant over time. If
you buy a blue-chip stock fund to-day, it won't become a small-cap stock fund
tomorrow.

[_] BLENDED INVESTMENT STYLE. Market conditions are constantly changing, which
means the stocks that perform well should be expected to change. A rigid
investment style might cause an investor to suffer when certain types of stocks
lose favor with the market. The two most common invest-ment styles are growth,
which emphasizes companies that are projected to experience rapid growth in
earnings, and value, which focuses on companies whose stock is selling for less
than the company's true worth. At Van Kampen American Capital, our style is
blended between growth and value on a fund-specific basis.

[CHART OF FULLY INVESTED APPROACH APPEARS HERE]

Market Returns 1926-1994

$1 Invested in 1926

$810.54 $12.18 $11.57

Stocks T-Bills Stocks
816 Months Minus 30
Best Months

Source: Ibbotson

[CHART OF MARKET RETURNS APPEARS HERE]

S&P 500 Average Annual Total Returns
(12/31/89 - 12/31/94)

8.87% 3.27% (0.67%)

Fully Less 10 Less 20
Invested Best Days Best Days

Source: Vestek System

We constantly evaluate the results of our approach and compare it to other sim-
ilar funds. Although past performance is no guarantee of future results, we re-
main committed to our belief that this approach should help Van Kampen American
Capital shareholders achieve consistent, competitive, long-term performance.

8
<PAGE>

PORTFOLIO OF INVESTMENTS

December 31, 1995

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
(000) Description Market Value
- --------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCK 88.5%
CONSUMER DISTRIBUTION 7.7%
*155 Consolidated Stores Corp............................ $ 3,371,250
*335 Eckerd Corp......................................... 14,949,375
*210 Federated Department Stores, Inc.................... 5,775,000
100 Gap, Inc............................................ 4,200,000
*510 General Nutrition Companies, Inc.................... 11,723,100
*420 Kroger Co........................................... 15,750,000
*366 Officemax, Inc...................................... 8,195,963
*345 Safeway, Inc........................................ 17,767,500
260 Sears, Roebuck & Co................................. 10,140,000
*115 Vons Companies, Inc................................. 3,248,750
--------------
95,120,938
--------------
CONSUMER DURABLES 0.8%
90 Chrysler Corp....................................... 4,983,750
105 Snap-On, Inc........................................ 4,751,250
--------------
9,735,000
--------------
CONSUMER NON-DURABLES 8.3%
*330 ConAgra, Inc........................................ 13,612,500
175 CPC International, Inc.............................. 12,009,375
*70 Fila Holdings, ADS.................................. 3,162,250
*115 Nautica Enterprises, Inc............................ 5,031,250
370 PepsiCo, Inc........................................ 20,673,750
505 Philip Morris Companies, Inc........................ 45,702,500
35 Ralston Purina Group................................ 2,183,125
--------------
102,374,750
--------------
CONSUMER SERVICES 6.9%
*89 American Radio Systems Corp......................... 2,492,000
*130 Buffets, Inc........................................ 1,787,500
89 Citicasters, Inc.................................... 2,090,813
*245 Cox Communications, Inc............................. 4,777,500
100 Disney (Walt) Co.................................... 5,900,000
*215 Emmis Broadcasting Corp., Class A................... 6,665,000
216 Evergreen Media Corp., Class A...................... 6,912,000
*240 Grand Casinos, Inc.................................. 5,580,000
200 Marriott International, Inc......................... 7,650,000
270 Omnicom Group, Inc.................................. 10,057,500
*85 Outback Steakhouse, Inc............................. 3,049,375
330 Service Corp. International......................... 14,520,000
*287 Trump Hotels & Casino Resorts....................... 6,170,500
*150 Viacom, Inc., Class B............................... 7,106,250
--------------
84,758,438
--------------
ENERGY 5.1%
210 Exxon Corp.......................................... 16,826,250
100 Halliburton Co...................................... 5,062,500
160 Mobil Corp.......................................... 17,920,000
355 Panhandle Eastern Corp.............................. 9,895,625
*275 Smith International, Inc............................ 6,462,500
35 Texaco, Inc......................................... 2,747,500
100 Williams Companies.................................. 4,387,500
--------------
63,301,875
--------------
</TABLE>

9
See Notes to Financial Statements
<PAGE>

PORTFOLIO OF INVESTMENTS (CONTINUED)

December 31, 1995

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
(000) Description Market Value
- --------------------------------------------------------------------------------
<C> <S> <C>
FINANCE 13.8%
80 Aetna Life & Casualty Co............................ $ 5,540,000
315 Allstate Corp....................................... 12,954,375
85 Bank of New York, Inc............................... 4,143,750
285 Bank of Boston Corp................................. 13,181,250
185 BankAmerica Corp.................................... 11,978,750
46 Baybanks, Inc....................................... 4,548,975
205 Chemical Banking Corp............................... 12,043,750
135 Citicorp............................................ 9.078,750
75 Conseco, Inc........................................ 4,696,875
165 Exel Limited........................................ 10,065,000
290 Federal National Mortgage Association............... 35,996,250
155 Franklin Resources, Inc............................. 7,808,125
455 Green Tree Financial Corp........................... 12,000,625
413 Mercury Finance Co.................................. 5,465,625
190 Penncorp Financial Group, Inc....................... 5,581,250
140 Reliastar Financial Corp............................ 6,212,500
188 SunAmerica, Inc..................................... 8,906,250
--------------
170,202,100
--------------
HEALTH CARE 12.3%
*90 Amgen, Inc.......................................... 5,343,750
120 Bristol-Myers Squibb Co............................. 10,305,000
*120 Circon Corp......................................... 2,430,000
*50 Coherent, Inc....................................... 2,025,000
*130 Community Health System, Inc........................ 4,631,250
*167 Foundation Health Corp.............................. 7,159,500
*140 Genzyme Corp........................................ 8,732,500
135 Guidant Corp........................................ 5,703,750
*180 Health Management Association, Inc., Class A........ 4,702,500
165 Johnson & Johnson................................... 14,128,125
*200 Lincare Holdings, Inc............................... 4,997,500
*120 Maxicare Health Plans, Inc.......................... 3,225,000
*50 Medisense, Inc...................................... 1,581,250
90 Medtronic, Inc...................................... 5,028,750
73 Mentor Corp......................................... 1,683,600
160 Merck & Co, Inc..................................... 10,520,000
*100 Nellcor, Inc........................................ 5,800,000
174 Pharmacia & Upjohn, Inc............................. 6,742,500
*115 Renal Treatment Centers, Inc........................ 5,060,000
325 Schering Plough Corp................................ 17,793,750
315 SmithKline Beecham, Plc, ADR........................ 17,482,500
*140 Watsons Pharmaceuticals, Inc........................ 6,860,000
--------------
151,936,225
--------------
PRODUCER MANUFACTURING 4.8%
70 Case Corp........................................... 3,202,500
162 Dover Corp.......................................... 5,973,750
130 Greenfield Industries, Inc.......................... 4,062,500
150 Harnischfeger Industries, Inc....................... 4,987,500
105 Illinois Tool Works, Inc............................ 6,195,000
45 Johnson Controls, Inc............................... 3,093,750
*70 Litton Industries, Inc.............................. 3,115,000
*93 MSC Industrial Direct Co., Class A.................. 2,543,750
</TABLE>

10
See Notes to Financial Statements
<PAGE>

PORTFOLIO OF INVESTMENTS (CONTINUED)

December 31, 1995

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
(000) Description Market Value
- --------------------------------------------------------------------------------
<C> <S> <C>
70 Parker Hannifin Corp................................ $ 2,397,500
40 Textron, Inc........................................ 2,700,000
70 United Technologies Corp............................ 6,641,250
*295 United Waste System, Inc............................ 10,988,750
*105 Varity Corp......................................... 3,898,125
--------------
59,799,375
--------------
RAW MATERIALS/PROCESSING INDUSTRIES 5.6%
55 Agrium, Inc......................................... 2,475,000
90 Aluminum Co. of America............................. 4,758,750
80 Bowater, Inc........................................ 2,840,000
*130 Cytec Industries, Inc............................... 8,108,750
75 Hercules, Inc....................................... 4,228,125
47 IMC Global, Inc..................................... 1,933,387
95 James River Corp.................................... 2,291,875
101 Kimberly-Clark Corp................................. 8,390,850
80 Monsanto Co......................................... 9,800,000
459 Praxair, Inc........................................ 15,433,875
80 Sigma Aldrich Corp.................................. 3,960,000
170 Terra Industries, Inc............................... 2,401,250
60 Union Carbide Corp.................................. 2,250,000
--------------
68,871,862
--------------
TECHNOLOGY 16.9%
*165 Adaptec, Inc........................................ 6,765,000
*100 Analog Devices, Inc................................. 3,537,500
*106 Applied Materials, Inc.............................. 4,173,750
*30 Ascend Communications, Inc.......................... 2,433,750
*233 Bay Networks, Inc................................... 9,561,562
130 Boeing Co........................................... 10,188,750
*95 Cabletron Systems, Inc.............................. 7,695,000
*105 Cadence Design System, Inc.......................... 4,410,000
*100 Cisco System, Inc................................... 7,462,500
*185 Compaq Computer Corp................................ 8,880,000
230 Computer Association International, Inc............. 13,081,250
*115 Dell Computer Corp.................................. 3,981,875
*189 DST Systems, Inc.................................... 5,395,050
*160 ECI Telecom Limited................................. 3,650,000
115 First Data Corp..................................... 7,690,625
*80 FTP Software, Inc................................... 2,320,000
*150 Gateway 2000, Inc................................... 3,675,000
*9 In Focus Systems, Inc............................... 335,962
100 Intel Corp.......................................... 5,675,000
*310 International Rectifier Corp........................ 7,750,000
*90 KLA Instruments Corp................................ 2,345,625
*99 Komag, Inc.......................................... 4,575,600
*94 Lam Research Corp................................... 4,300,500
120 Linear Technology Corp.............................. 4,710,000
*100 LSI Logic Corp...................................... 3,275,000
*90 Medic Computer System, Inc.......................... 5,445,000
*100 Microcom, Inc....................................... 2,600,000
*150 Microsoft Corp...................................... 13,162,500
*16 Network Appliance, Inc.............................. 625,950
*157 Oak Technology, Inc................................. 6,637,475
</TABLE>

11
See Notes to Financial Statements
<PAGE>

PORTFOLIO OF INVESTMENTS (CONTINUED)

December 31, 1995

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
(000) Description Market Value
- -------------------------------------------------------------------------------
<C> <S> <C>
*90 Oracle System Corp................................. $ 3,813,750
*70 Pairgain Technologies, Inc......................... 3,832,500
*150 S3 Inc............................................. 2,643,750
*200 SCI System, Inc.................................... 6,200,000
*120 Seagate Technology................................. 5,700,000
*135 SGS Thomson Microelectronics N.V., ADR............. 5,413,625
*9 Sun Microsystems, Inc.............................. 428,875
*265 Symantec Corp...................................... 6,161,250
*75 3Com Corp.......................................... 3,496,875
*60 US Robotics Corp................................... 5,265,000
--------------
209,295,849
--------------
TRANSPORTATION 1.5%
30 Burlington Northern, Inc........................... 2,340,000
90 Conrail, Inc....................................... 6,300,000
60 CSX Corp........................................... 2,737,500
125 Illinois Central Corp.............................. 4,796,875
*37 Northwest Airlines, Inc., Class A.................. 1,887,000
--------------
18,061,375
--------------
UTILITIES 4.8%
100 AT&T Corp.......................................... 6,475,000
159 Frontier Corp...................................... 4,758,000
720 MCI Communications Corp............................ 18,810,000
325 Sprint Corp........................................ 12,959,375
*470 WorldCom, Inc...................................... 16,567,500
--------------
59,569,875
--------------
TOTAL COMMON STOCK (Cost $918,630,934)............ 1,093,027,662
--------------
PREFERRED STOCK 0.5%
*122 Cellular Communications, Inc. (Cost $3,807,997).... 6,072,734
--------------
<CAPTION>
Par
Amount
(000)
- --------
<C> <S> <C>
SHORT-TERM INVESTMENTS 10.4%
COMMERCIAL PAPER 3.2%
$20,000 Associates Corp of North America, 5.52%, 01/02/96.. 19,986,667
20,000 General Electric Capital Corp., 5.50%, 01/02/96.... 19,987,000
--------------
39,973,667
--------------
REPURCHASE AGREEMENT 2.6%
**31,955 Lehman Government Securities, dated 12/29/95,
5.875% due 01/02/96 (collateralized by U.S.
Government obligations in a pooled cash account)
repurchase proceeds $31,975,860................... 31,955,000
--------------
UNITED STATES AGENCIES AND GOVERNMENT OBLIGATIONS
4.6%
**17,000 Federal Home Loan Banks, 5.63%, 02/07/96........... 16,900,588
**35,000 Federal National Mortgage Association, 5.62%,
02/21/96........................................... 34,720,644
**5,000 United States Treasury Bills, 5.328%, 02/08/96..... 4,971,725
--------------
56,592,957
--------------
TOTAL SHORT-TERM INVESTMENTS (Cost $128,521,624).. 128,521,624
--------------
TOTAL INVESTMENT (Cost $1,050,960,555) 99.4% ...... 1,227,622,020
OTHER ASSETS AND LIABILITIES, NET 0.6%............. 7,901,151
--------------
NET ASSETS 100%.................................... $1,235,523,171
--------------
</TABLE>

*Non-income producing security.
** Securities with a market value of approximately $77.6 million were placed as
collateral for future contracts (see Note 1B).

12
See Notes to Financial Statements
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES

December 31, 1995

- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments, at market value (Cost $1,050,960,555)............. $1,227,622,020
Cash........................................................... 22,578
Receivable for Fund shares sold................................ 24,384,744
Receivable for investments sold................................ 7,346,415
Dividends and interest receivable.............................. 1,368,694
Receivable for variation margin................................ 87,500
Other assets................................................... 57,277
--------------
Total Assets................................................. 1,260,889,228
--------------
LIABILITIES
Payable for Fund shares redeemed............................... 14,378,662
Dividends payable.............................................. 9,240,497
Due to Distributor............................................. 687,109
Due to Adviser................................................. 496,246
Due to shareholder service agent............................... 241,000
Deferred Trustee's compensation................................ 98,464
Accrued expenses............................................... 224,079
--------------
Total Liabilities............................................ 25,366,057
--------------
NET ASSETS, equivalent to $13.07 per share for Class A, $12.94
per share for Class B, and $13.01 per share
for Class C shares............................................ $1,235,523,171
--------------
NET ASSETS WERE COMPRISED OF:
Shares of beneficial interest, at par; 79,257,386 Class A,
14,223,692 Class B, and 1,206,605 Class C shares outstanding.. $ 946,877
Capital surplus................................................ 1,047,796,579
Undistributed net realized gain on securities.................. 10,914,263
Net unrealized appreciation (depreciation) of securities
Investments................................................... 176,661,465
Future contracts.............................................. (818,125)
Undistributed net investment income............................ 22,112
--------------
NET ASSETS..................................................... $1,235,523,171
--------------
</TABLE>

13
See Notes to Financial Statements
<PAGE>

STATEMENT OF OPERATIONS

Year Ended December 31, 1995

- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends....................................................... $ 12,513,391
Interest........................................................ 4,218,621
------------
Investment income............................................. 16,732,012
------------
EXPENSES
Management fees................................................. 5,293,215
Shareholder service agent's fees and expenses................... 2,641,131
Accounting services............................................. 131,706
Service fees--Class A........................................... 1,683,818
Distribution and service fees--Class B.......................... 1,402,808
Distribution and service fees--Class C.......................... 110,564
Trustees' fees and expenses..................................... 39,477
Audit fees...................................................... 36,303
Custodian fees.................................................. 14,413
Legal fees...................................................... 12,099
Reports to shareholders......................................... 139,561
Registration and filing fees.................................... 210,726
Miscellaneous................................................... 15,979
------------
Total expenses................................................ 11,731,800
------------
NET INVESTMENT INCOME........................................... 5,000,212
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON SECURITIES
Net realized gain on securities
Investments.................................................... 163,892,920
Future contracts............................................... 9,912,326
Net unrealized appreciation (depreciation) of securities during
the period
Investments.................................................... 124,067,548
Future contracts............................................... (1,093,248)
------------
NET REALIZED AND UNREALIZED GAIN ON SECURITIES.................. 296,779,546
------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................ $301,779,758
------------
</TABLE>

14
See Notes to Financial Statements
<PAGE>

STATEMENT OF CHANGES IN NET ASSETS

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31
------------------------------
1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
NET ASSETS, beginning of period................ $ 850,794,416 $ 847,216,585
-------------- --------------
OPERATIONS
Net investment income......................... 5,000,212 5,294,220
Net realized gain on securities............... 173,805,246 56,353,022
Net unrealized appreciation (depreciation) of
securities during the period................. 122,974,300 (62,609,722)
-------------- --------------
Increase (decrease) in net assets resulting
from operations.............................. 301,779,758 (962,480)
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income
Class A...................................... (4,891,163) (5,421,487)
Class B...................................... -- --
Class C...................................... -- --
-------------- --------------
(4,891,163) (5,421,487)
-------------- --------------
Net realized gain on securities
Class A...................................... (141,850,844) (42,823,112)
Class B...................................... (24,998,825) (5,142,630)
Class C...................................... (2,129,789) (417,302)
-------------- --------------
(168,979,458) (48,383,044)
-------------- --------------
Total distributions.......................... (173,870,621) (53,804,531)
-------------- --------------
CAPITAL TRANSACTIONS
Proceeds from shares sold
Class A...................................... 1,442,947,657 1,071,449,681
Class B...................................... 100,490,408 87,294,376
Class C...................................... 12,610,458 22,435,417
-------------- --------------
1,556,048,523 1,181,179,474
-------------- --------------
Proceeds from shares issued for distributions
reinvested
Class A...................................... 130,617,203 42,222,983
Class B...................................... 23,364,668 4,813,913
Class C...................................... 1,888,209 371,079
-------------- --------------
155,870,080 47,407,975
-------------- --------------
Cost of shares redeemed
Class A...................................... (1,402,228,054) (1,094,738,045)
Class B...................................... (45,974,654) (58,634,738)
Class C...................................... (6,896,277) (16,869,824)
-------------- --------------
(1,455,098,985) (1,170,242,607)
-------------- --------------
Increase in net assets from capital
transactions................................. 256,819,618 58,344,842
-------------- --------------
INCREASE IN NET ASSETS....................... 384,728,755 3,577,831
-------------- --------------
NET ASSETS, end of period (including
undistributed net investment income of $22,112
and accumulated net investment loss of
$86,937, respectively)........................ $1,235,523,171 $ 850,794,416
-------------- --------------
</TABLE>

15
See Notes to Financial Statements
<PAGE>

FINANCIAL HIGHLIGHTS

Selected data for a share of beneficial interest outstanding throughout each of
the periods indicated.

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
-------------------------------------------
Year Ended December 31
-------------------------------------------
1995 1994 1993 1992 1991
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of pe-
riod............................. $11.43 $12.23 $12.64 $13.83 $10.76
-------- ------ ------- ------- -------
INCOME FROM OPERATIONS
Investment income................ .21 .21 .19 .27 .295
Expenses......................... (.13) (.13) (.13) (.135) (.125)
-------- ------ ------- ------- -------
Net investment income............. .08 .08 .06 .135 .17
Net realized and unrealized gain
(loss) on securities............. 3.7325 (.1225) 1.2525 .9325 3.9625
-------- ------ ------- ------- -------
Total from investment operations.. 3.8125 (.0425) 1.3125 1.0675 4.1325
-------- ------ ------- ------- -------
LESS DISTRIBUTIONS FROM
Net investment income............ (.0725) (.085) (.0575) (.145) (.1725)
Net realized gain on securities.. (2.10) (.6725) (1.665) (2.1125) (.89)
-------- ------ ------- ------- -------
Total distributions............... (2.1725) (.7575) (1.7225) (2.2575) (1.0625)
-------- ------ ------- ------- -------
Net asset value, end of period.... $13.07 $11.43 $12.23 $12.64 $13.83
-------- ------ ------- ------- -------
TOTAL RETURN (/1/)................ 33.92% (.18%) 10.96% 8.39% 39.23%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (mil-
lions)........................... $1,035.7 $749.7 $778.9 $736.4 $713.1
Average net assets (millions)..... $916.8 $758.4 $759.0 $683.8 $625.8
Ratios to average net assets
Expenses......................... .98% 1.05% .99% .99% .97%
Net investment income............ .59% .71% .48% 1.00% 1.33%
Portfolio turnover rate........... 152% 176% 196% 161% 103%
</TABLE>

(1) Total return does not consider the effect of sales charges.

16
See Notes to Financial Statements
<PAGE>

FINANCIAL HIGHLIGHTS (CONTINUED)

Selected data for a share of beneficial interest outstanding throughout each of
the periods indicated.

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B(/1/)
-------------------------------------
Year Ended December 31
-------------------------------------
1995(/2/) 1994(/2/) 1993 1992(/2/)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period..... $11.37 $12.19 $12.66 $13.82
------ ------ ------ -------
INCOME FROM OPERATIONS
Investment income....................... .21 .21 .16 .26
Expenses................................ (.24) (.22) (.20) (.245)
------ ------ ------ -------
Net investment income (loss)............. (.03) (.01) (.04) .015
Net realized and unrealized gain (loss)
on securities........................... 3.70 (.1375) 1.24 .9675
------ ------ ------ -------
Total from investment operations......... 3.67 (.1475) 1.20 .9825
------ ------ ------ -------
LESS DISTRIBUTIONS FROM
Net investment income................... -- -- (.005) (.03)
Net realized gain on securities......... (2.10) (.6725) (1.665) (2.1125)
------ ------ ------ -------
Total distributions...................... (2.10) (.6725) (1.67) (2.1425)
------ ------ ------ -------
Net asset value, end of period........... $12.94 $11.37 $12.19 $12.66
------ ------ ------ -------
TOTAL RETURN(/3/)........................ 32.82% (1.07%) 10.00% 7.67%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (millions)..... $184.1 $93.7 $66.2 $21.5
Average net assets (millions)............ $140.3 $81.3 $43.6 $8.3
Ratios to average net assets
Expenses................................ 1.81% 1.89% 1.81% 1.90%
Net investment income (loss)............ (.24%) (.11%) (.37%) .12%
Portfolio turnover rate.................. 152% 176% 196% 161%
</TABLE>

(1) Sales of Class B commenced December 20, 1991 at a net asset value of $12.55
per share. At December 31, 1991, there were 763 Class B shares outstanding
with a per share net asset value of $13.82. The increase in net asset value
was due principally to unrealized appreciation. There were no dividends or
distributions to shareholders during the period. Other financial highlights
for the Class B shares for this short period are not meaningful and
therefore are not presented.
(2) Based on average shares outstanding.
(3) Total return does not consider the effect of sales charges.

17
See Notes to Financial Statements
<PAGE>

FINANCIAL HIGHLIGHTS (CONTINUED)

Selected data for a share of beneficial interest outstanding throughout each of
the periods indicated.

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class C
----------------------------------------
Year Ended July 20, 1993(/1/)
December 31 through
-------------------- December 31,
1995(/2/) 1994(/2/) 1993(/2/)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period. $11.42 $12.23 $12.66
------ ------ ------
INCOME FROM OPERATIONS
Investment income................... .21 .21 .08
Expenses............................ (.24) (.22) (.11)
------ ------ ------
Net investment loss.................. (.03) (.01) (.03)
Net realized and unrealized gain
(loss) on securities................ 3.72 (.1275) .765
------ ------ ------
Total from investment operations..... 3.69 (.1375) .735
------ ------ ------
LESS DISTRIBUTIONS FROM NET REALIZED
GAIN ON SECURITIES.................. (2.10) (.6725) (1.165)
------ ------ ------
Net asset value, end of period....... $13.01 $11.42 $12.23
------ ------ ------
TOTAL RETURN (/3/)................... 32.85% (.99%) 6.08%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (millions). $15.7 $7.4 $2.1
Average net assets (millions)........ $11.1 $5.9 $0.8
Ratios to average net assets
(annualized)
Expenses............................ 1.80% 1.90% 1.83%
Net investment loss................. (.23%) (.12%) (.48%)
Portfolio turnover rate.............. 152% 176% 196%
</TABLE>

(1)Commencement of offering of sales.
(2)Based on average shares outstanding.
(3)Total return for periods of less than one full year are not annualized.
Total return does not consider the effect of sales charges.

18
See Notes to Financial Statements
<PAGE>

NOTES TO FINANCIAL STATEMENTS

- --------------------------------------------------------------------------------
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
Van Kampen American Capital Enterprise Fund (the "Fund", formerly American
Capital Enterprise Fund, Inc.) is registered under the Investment Company Act
of 1940, as amended, as a diversified open-end management investment company.
The Fund seeks capital appreciation by investing in a portfolio consisting
principally of common stocks.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported. Actual amounts may differ from the estimates.

A. INVESTMENT VALUATIONS-Securities listed or traded on a national securities
exchange are valued at the last sale price. Unlisted securities and listed
securities for which the last sale price is not available are valued at the
mean between the last reported bid and asked price.
Short-term investments with a maturity of 60 days or less when purchased are
valued at amortized cost, which approximates market value. Short-term
investments with a maturity of more than 60 days when purchased are valued
based on market quotations until the remaining days to maturity becomes less
than 61 days. From such time, until maturity, the investments are valued at
amortized cost.

B. FUTURES CONTRACTS-Transactions in futures contracts are utilized in
strategies to manage the market risk of the Fund's investments. The purchase of
a futures contract increases the impact on net asset value of changes in the
market price of investments. There is a risk that the market movement of such
instruments may not be in the direction forecasted.
Upon entering into futures contracts, the Fund maintains, in a segregated
account with its custodian, securities with a value equal to its obligation
under the futures contracts. A portion of these funds is held as collateral in
an account in the name of the broker. During the period the futures contract is
open, changes in the value of the contract ("variation margin") are recognized
by marking the contract to market on a daily basis. As unrealized gains or
losses are incurred, variation margin payments are received from or made to the
broker. Upon the closing or cash settlement of a contract, gains or losses are
realized. The cost of securities acquired through delivery under a contract is
adjusted by the unrealized gain or loss on the contract.

C. REPURCHASE AGREEMENTS-A repurchase agreement is a short-term investment in
which a Fund acquires ownership of a debt security and the seller agrees to
repurchase the security at a future time and specified price. The Fund may
invest independently in repurchase agreements, or transfer uninvested cash
balances into a pooled cash account along with other investment companies
advised by Van Kampen American Capital Asset Management, Inc. ("The Adviser"),
the daily aggregate of which is invested in repurchase agreements. Repurchase
agreements are collateralized by the underlying debt security. The Fund will
make payment for such securities only upon physical delivery or evidence of
book entry transfer to the account of the custodian bank. The seller is
required to maintain the value of the underlying security at not less than the
repurchase proceeds due the Fund.

D. FEDERAL INCOME TAXES-No provision for federal income taxes is required
because the Fund has elected to be taxed as "regulated investment company"
under the Internal Revenue Code and intends to maintain this qualification by
annually distributing all of its taxable net investment income and taxable net
realized gains on investments to its shareholders.

E. INVESTMENT TRANSACTIONS AND RELATED INVESTMENT INCOME-Investment
transactions are accounted for on the trade date. Realized gains and losses on
investments are determined on the basis of identified cost. Dividend income is
recorded on the ex-dividend date. Interest income is accrued daily.

F. DIVIDENDS AND DISTRIBUTIONS-Dividends and distributions to shareholders are
recorded on the record date. The Fund distributes tax basis earnings in
accordance with the minimum distribution requirements of the Internal Revenue
Code, which may differ from generally accepted accounting principles. Such
dividends or distributions may exceed financial statement earnings.

19
<PAGE>

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

- --------------------------------------------------------------------------------

NOTE 2--MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Adviser serves as investment manager of the Fund. Management fees are paid
monthly, based on the average daily net assets of the Fund at an annual rate of
.50% of the first $1 billion, .45% of the next $1 billion, .40% of the next $1
billion, and .35% of the amount in excess of $3 billion.
Accounting services include the salaries and overhead expenses of the Fund's
Treasurer and the personnel operating under his direction. Charges are
allocated among investment companies advised by the Adviser. For the period,
these charges included $21,310 as the Fund's share of the employee costs
attributable to the Fund's accounting officers. A portion of the accounting
services expenses was paid to the Adviser in reimbursement of personnel,
facilities and equipment costs attributable to the provision of accounting
services to the Fund. The services provided by the Adviser are at cost.
ACCESS Investor Services, Inc., an affiliate of the Adviser, serves as
shareholder service agent of the Fund. These services are provided at cost plus
a profit. For the period, such fees aggregated $2,315,395.
The Fund was advised that Van Kampen American Capital Distributors, Inc. (the
"Distributor"), and Advantage Capital Corporation (the "Retail Dealer"), both
affiliates of the Adviser, received $238,225 and $87,017, respectively, as
their portion of the commissions charged on sales of Fund shares during the
period.
Under the Distribution Plans, each class of shares pays up to .25% per annum
of its average daily net assets to reimburse the Distributor for expenses and
service fees incurred. The Class B and Class C shares pay an additional fee of
up to .75% per annum of their average daily net assets to reimburse the
Distributor for its distribution expenses. Actual distribution expenses
incurred by the Distributor for Class B and Class C shares may exceed the
amounts reimbursed to the Distributor by the Fund. At the end of the period,
the unreimbursed expenses incurred by the Distributor under the Class B and
Class C plans aggregated approximately $8.0 million and $85,000, respectively,
and may be carried forward and reimbursed through either the collection of the
contingent deferred sales charges from share redemptions or, subject to the
annual renewal of the plans, future Fund reimbursements of distribution fees.
Legal fees of $12,073 during the period were for services rendered by former
counsel of the Fund, O'Melveny & Myers. A former trustee was of counsel to that
firm.
Certain officers and trustees of the Fund are officers and trustees of the
Adviser, the Distributor, the Retail Dealer and the shareholder service agent.

NOTE 3--INVESTMENT ACTIVITY
During the period, the cost of purchases and proceeds from sales of
investments, excluding short-term investments, were $1,513,904,870 and
$1,503,374,054, respectively.
At the end of the period, the Fund held 250 long Standard & Poor's 500 Index
futures contracts expiring in March 1996. The market value of such contracts
was $77,306,250 and the unrealized depreciation was $818,125.
For federal income tax purposes, the identified cost of investments owned at
the end of the period was $1,053,326,039. Net unrealized appreciation of
investments aggregated $174,295,981, gross unrealized appreciation of
investments aggregated $194,480,859 and gross unrealized depreciation of
investments aggregated $20,184,878.

NOTE 4--TRUSTEE COMPENSATION
Fund trustees who are not affiliated with the Adviser are compensated by the
Fund at the annual rate of $2,046 plus a fee of $58 per day for Board and
Committee meetings attended. During the period, such fees aggregated $37,345.
The trustees may participate in a voluntary Deferred Compensation Plan (the
"Plan"). The Plan is not funded, and obligations under the Plan will be paid
solely out of the Fund's general accounts. The Fund will not reserve or set
aside funds for the payment of its obligations under the Plan by any form of
trust or escrow. Each trustee covered under the Plan elects to be credited with
an earnings component on amounts deferred equal to the income earned by the
Fund on its short-term investments or equal to the total return of the Fund.

NOTE 5--CAPITAL
The Fund offers three classes of shares at their respective net asset values
per share, plus a sales charge which is imposed either at the time of purchase
(the Class A shares) or at the time of redemption on a contingent deferred
basis (the Class B and Class C shares). Each class of shares has the same
rights, except that Class B and Class C shares bear the cost of distribution
fees and certain other class

20
<PAGE>

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

- --------------------------------------------------------------------------------
specific expenses. Realized and unrealized gains or losses, investment income
and expenses (other than class specific expenses) are allocated daily to each
class of shares based upon the relative proportion of net assets of each class.
Class B and Class C shares automatically convert to Class A shares six years
and ten years after purchase, respectively, subject to certain conditions.
The Fund has an unlimited number of shares of $.01 par value beneficial
interest authorized. Transactions in shares of beneficial interest were as
follows:

<TABLE>
<CAPTION>
Year Ended December 31
-------------------------
1995 1994
--------------------------------------------------------------------------
<S> <C> <C>
Shares sold
Class A....................................... 106,134,949 88,756,758
Class B....................................... 7,589,070 7,241,495
Class C....................................... 923,407 1,852,492
------------ -----------
114,647,426 97,850,745
------------ -----------
Shares issued for distributions reinvested
Class A....................................... 10,204,215 3,777,078
Class B....................................... 1,841,496 432,428
Class C....................................... 147,978 33,138
------------ -----------
12,193,689 4,242,644
------------ -----------
Shares redeemed
Class A....................................... (102,688,145) (90,630,945)
Class B....................................... (3,442,265) (4,873,905)
Class C....................................... (514,225) (1,404,906)
------------ -----------
(106,644,635) (96,909,756)
------------ -----------
Increase in shares outstanding................. 20,196,480 5,183,633
------------ -----------
</TABLE>

NOTE 6--FUND REORGANIZATION
On July 21, 1995, the shareholders approved the reorganization of the Fund to a
Delaware Business Trust and the election of fourteen trustees. On August 4,
1995, the reorganization became effective.

21
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
VAN KAMPEN AMERICAN CAPITAL ENTERPRISE FUND

In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Van Kampen American Capital
Enterprise Fund (the "Fund") at December 31, 1995, the results of its
operations, the changes in its net assets and the financial highlights for each
of the fiscal periods presented, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 1995 by correspondence with the
custodian and brokers and the application of alternative procedures where
confirmations were not received, provide a reasonable basis for the opinion
expressed above.

PRICE WATERHOUSE LLP

Houston, Texas
January 31, 1996

22
<PAGE>

FUNDS DISTRIBUTED BY VAN KAMPEN AMERICAN CAPITAL

GLOBAL AND INTERNATIONAL
Global Equity Fund
Global Government Securities Fund
Global Managed Assets Fund
Short-Term Global Income Fund
Strategic Income Fund

EQUITY
Growth
Emerging Growth Fund
Enterprise Fund
Pace Fund
Growth & Income
Balanced Fund
Comstock Fund
Equity Income Fund
Growth and Income Fund
Harbor Fund
Real Estate Securities Fund
Utility Fund

FIXED INCOME
Corporate Bond Fund
Government Securities Fund
High Income Corporate Bond Fund
High Yield Fund
Limited Maturity Government Fund
Prime Rate Income Trust
Reserve Fund
U.S. Government Fund
U.S. Government Trust for Income

TAX-FREE
California Insured Tax Free Fund
Florida Insured Tax Free Income Fund
High Yield Municipal Fund
Insured Tax Free Income Fund
Limited Term Municipal Income Fund
Municipal Income Fund
New Jersey Tax Free Income Fund
New York Tax Free Income Fund
Pennsylvania Tax Free Income Fund
Tax Free High Income Fund
Tax Free Money Fund
Texas Tax Free Income Fund

THE GOVETT FUNDS
Emerging Markets Fund
Global Income Fund
International Equity Fund
Latin America Fund
Pacific Strategy Fund
Smaller Companies Fund

Ask your investment adviser for a prospectus containing more complete
information, including sales charges and expenses. Please read it carefully
before you invest or send money. Or call us direct at 1-800-421-5666 weekdays
from 7:00 a.m. to 7:00 p.m. Central time.

23
<PAGE>

VAN KAMPEN AMERICAN CAPITAL ENTERPRISE FUND

BOARD OF TRUSTEES

J. MILES BRANAGAN
LINDA HUTTON HEAGY
ROGER HILSMAN
R. CRAIG KENNEDY
DENNIS J. MCDONNELL
DONALD C. MILLER
JACK E. NELSON
DON G. POWELL
JEROME L. ROBINSON
FERNANDO SISTO*
WAYNE W. WHALEN
WILLIAM S. WOODSIDE

*Chairman of the Board

OFFICERS

DON G. POWELL
President and Chief Executive Officer

DENNIS J. MCDONNELL
Executive Vice President

RONALD A. NYBERG
Vice President and Secretary

EDWARD C. WOOD, III
Vice President and Chief Financial Officer

CURTIS W. MORELL
Vice President and Chief Accounting Officer

JOHN L. SULLIVAN
Treasurer

TANYA M. LODEN
Controller

WILLIAM N. BROWN
PETER W. HEGEL
ROBERT C. PECK, JR.
ALAN T. SACHTLEBEN
PAUL R. WOLKENBERG
Vice Presidents

INVESTMENT ADVISER

VAN KAMPEN AMERICAN CAPITAL ASSET MANAGEMENT INC.
2800 Post Oak Blvd.,
Houston, Texas 77056

DISTRIBUTOR

VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181

SHAREHOLDER SERVICE AGENT

ACCESS INVESTOR SERVICES, INC.
P.O. Box 418256,
Kansas City, Missouri 64141-9256

CUSTODIAN

STATE STREET BANK AND TRUST CO.
225 Franklin Street,
Boston, Massachusetts 02110

LEGAL COUNSEL

SKADDEN, ARPS, SLATE, MEAGER & FLOM
333 West Wacker Drive
Chicago, Illinois 60806

INDEPENDENT ACCOUNTANTS

SMdenotes a service mark of
Van Kampen American Capital Distributors, Inc.

This report is submitted for the general information of the shareholders of
the Fund. It is not authorized for distribution to prospective investors
unless it has been preceded or is accompanied by an effective prospectus of
the Fund which contains additional information on how to purchase shares, the
sales charge, and other pertinent data. If used for distribution to
prospective investors after 3/31/96, this annual report must be accompanied by
a Van Kampen American Capital Enterprise Fund performance data update for the
most recent quarter.