<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders...................... 1
Performance Results......................... 3
Portfolio Highlights........................ 4
Portfolio Management Review................. 5
Portfolio of Investments.................... 7
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
</TABLE>
ENT SAR 8/96
<PAGE>
LETTER TO SHAREHOLDERS
[PHOTO OF DENNIS J. MCDONNELL AND DON G. POWELL APPEARS HERE]
DENNIS J. MCDONNELL AND DON G. POWELL
August 1, 1996
Dear Shareholder,
As you may be aware, an agreement was reached in late June for VK/AC Hold-
ing, Inc., the parent company of Van Kampen American Capital, Inc., to be ac-
quired by the Morgan Stanley Group Inc. While this announcement may appear
commonplace in an ever-changing financial industry, we believe it represents
an exciting opportunity for shareholders of our investment products.
With Morgan Stanley's global leadership in investment banking and asset
management and Van Kampen American Capital's reputation for competitive long-
term performance and superior investor services, together we will offer a
broader range of investment opportunities and expertise.
The new ownership will not affect our commitment to pursuing excellence in
all aspects of our business. And, we expect very little change in the way your
mutual fund account is maintained and serviced.
A proxy will be mailed to you shortly explaining the acquisition and asking
for your vote of approval. Please read it carefully and return your response
for inclusion in the shareholder vote. We value our relationship with you and
look forward to communicating more details of this transaction, which is an-
ticipated to be completed in November.
ECONOMIC REVIEW
The economy demonstrated an acceleration in growth during the six-month re-
porting period. After a nominal 0.3 percent growth rate in the last quarter of
1995, GDP (the nation's gross domestic product) rose by 2.0 percent in this
year's first quarter. And, as anticipated, the economy grew 4.2 percent in the
second quarter, partly reflecting a recovery from the effects of labor strikes
earlier in the year and extreme weather conditions across the country. Upward
momentum has been assisted by consumer spending, as indicated by a 5.6 percent
rise in retail sales in the first five months of this year versus the compara-
ble 1995 period.
In the manufacturing sector, economic reports, such as the National Associa-
tion of Purchasing Managers Index, suggested a continued rebound in production
from last winter's lower levels. In June, this index reached its highest level
since early 1995. Strong levels of exports and a replenishing of inventories
have helped support this momentum.
Surprisingly healthy economic activity led to concerns that inflation may
rise and the Federal Reserve Board might tighten monetary policy. Inflation
remains modest, however, with consumer prices rising at about a 3 percent an-
nual rate over the past year. Meanwhile, the closely watched "core" Consumer
Price Index, which excludes volatile food and energy components, has risen
year over year at rates between 2.7 and 3.0 percent per year, with mid-1996
readings at a moderate 2.7 percent. In general, recent reports have suggested
an upward creep in labor-related costs, while indicating that prices of many
commodities have begun to decline.
Continued on page two
1
<PAGE>
EQUITY MARKET REVIEW
The stock market averages posted attractive gains for the six-month period
ended June 30, 1996, with most major averages posting all-time highs. The Dow
Jones Industrial Average rose approximately 10.9 percent from 5095 to 5654,
and the NASDAQ Composite Index rose 12.6 percent from 1052 to 1185.
Corporate earnings, which were an important contributor to last year's
strong stock market, continued to move ahead during the reporting period. Un-
expectedly strong economic activity helped lift reported profits above expec-
tations for the period. Through the rest of 1996, we expect earnings will be
supportive, but perhaps not the primary factor in the movement of the major
stock market averages.
OUTLOOK
We anticipate that reasonably strong economic growth will continue during
the balance of 1996, albeit at more moderate rates than the second quarter's
swift pace. While we expect rates of inflation to remain near current levels,
the Fed may begin to lean toward greater restraint in its monetary policy in
the coming months. That suggests an upward bias for short-term interest rates
and for yields on long-term bonds to remain steady at current levels.
Additional details about your Fund, including a question and answer section
with your portfolio management team, is provided in this report. We appreciate
your continued confidence in your investment with Van Kampen American Capital.
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 JUNE 30, 1996
VAN KAMPEN AMERICAN CAPITAL ENTERPRISE FUND
<TABLE>
<CAPTION>
A SHARES B SHARES C SHARES
TOTAL RETURNS
<S> <C> <C> <C>
Six-month total return based on NAV/1/............... 11.61% 11.17% 11.26%
Six-month total return/2/............................ 5.17% 6.17% 10.26%
One-year total return/2/............................. 16.54% 17.61% 21.65%
Five-year average annual total return/2/............. 15.27% N/A N/A
Ten-year average annual total return/2/.............. 11.76% N/A N/A
Life-of-Fund average annual total return/2/.......... 12.97% 15.09% 16.08%
Commencement Date.................................... 01/07/54 12/20/91 07/20/93
</TABLE>
N/A = Not Applicable
/1/Assumes 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).
/2/Standardized 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>
PORTFOLIO HIGHLIGHTS
VAN KAMPEN AMERICAN CAPITAL ENTERPRISE FUND
TOP TEN HOLDINGS AS A PERCENTAGE OF LONG-TERM INVESTMENTS
<TABLE>
<CAPTION>
% AS OF
AS OF JUNE 30, 1996 SIX MONTHS AGO
<S> <C> <C>
Philip Morris Companies, Inc.............................. 4.5%........... 4.2%
Federal National Mortgage Association .................... 1.8%........... 3.3%
Worldcom, Inc............................................. 1.4%........... 1.5%
Safeway, Inc.............................................. 1.4%........... 1.6%
PepsiCo, Inc.............................................. 1.4%........... 1.9%
Sun Microsystems, Inc..................................... 1.3%........... N/A
Computer Association International, Inc. ................. 1.3%........... 1.2%
Microsoft Corp............................................ 1.3%........... 1.2%
Praxair, Inc. ............................................ 1.2%........... 1.4%
Eckerd Corp. ............................................. 1.2%........... 1.4%
</TABLE>
N/A=Not Applicable
TOP FIVE PORTFOLIO HOLDINGS BY SECTOR
<TABLE>
<CAPTION>
AS OF JUNE 30, 1996
<S> <C>
Technology............ 21%
Finance............... 14%
Health Care........... 11%
Consumer Distribution. 10%
Consumer Services..... 8%
</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1995
<S> <C>
Technology............ 17%
Finance............... 14%
Health Care........... 12%
Consumer Non-Durables. 8%
Consumer Distribution. 8%
</TABLE>
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 that shaped the
markets during the first half of the Fund's fiscal year. The team is led by
Jeff D. New, portfolio manager, and Alan T. Sachtleben, executive vice
president for equity investments. The following excerpts reflect their views
on the Fund's performance during the six-month period ended June 30, 1996.
Q WHAT MARKET FACTORS HAD A SIGNIFICANT INFLUENCE ON THE FUND DURING THE
PERIOD?
A As has been the case for the past several years, the market environment
continued to demonstrate positive fundamentals, specifically solid cor-
porate earnings growth and controlled inflation.
In the early part of 1996, many market followers expected the slow economic
growth of 1995 to carry through into the new year. Anticipating slow growth,
we structured the Fund's portfolio to focus on individual companies that had
strong earnings growth expectations. In a slow economy, corporate earnings ex-
pectations are examined more closely. As always, we carefully analyzed stock
valuations in order to avoid overpaying for growth potential.
Q HOW WAS THE PORTFOLIO ALLOCATED DURING THE PERIOD, AND WHAT ARE ITS
CURRENT TOP SECTOR WEIGHTINGS?
A We continued to focus on stocks with positive earnings outlooks and at-
tractive valuations. The portfolio allocation at the outset of the year
and as of June 30, 1996 is illustrated in the portfolio highlights on page
four and demonstrates the broad diversification of the Fund's holdings. The
sector weightings reflect where we find the best combination of individual
company fundamentals and valuations.
Q WHAT IS THE FUND'S STRATEGY, AND HOW DID THE FUND PERFORM DURING THE SIX
MONTHS ENDED JUNE 30, 1996?
A The Enterprise Fund is managed in a simple but highly disciplined man-
ner. The Fund's holdings are determined by individual company analysis
rather than a "top-down" or macro-economic view. Historical trends indicate
that stocks that have significantly outperformed the market have at least one
of these four characteristics: accelerating earnings growth, consistent earn-
ings growth, better-than-expected fundamentals, or a positive fundamental
change (such as a management reorganization). If one of these four criteria is
met and the stock has a reasonable valuation, we will consider adding it to
the Fund's portfolio. If the opposite is true of a stock that is currently in
the portfolio (such as a deceleration in earnings growth), the Fund will con-
sider selling the stock, ideally before its price declines.
Class A shares of the Fund achieved a total return at net asset value of
11.61 percent/1/ for the six-month period ended June 30, 1996. By comparison,
the Standard & Poor's 500-Stock Index generated a total return of 10.08 per-
cent and the Lipper Growth Fund Index returned 7.99 percent for the same peri-
od. Keep in mind that the S&P 500 Index is a broad-based, unmanaged index that
reflects the general performance of the stock market and does not reflect any
commissions or fees that would be paid by an investor purchasing the securi-
ties it represents. The Lipper Growth Fund Index reflects the average perfor-
mance of all growth funds and does not reflect any sales charges that would be
paid by an investor purchasing the funds it represents. Please refer to the
chart on page three for additional Fund performance results.
5
<PAGE>
Q WHICH STOCKS HAD A SIGNIFICANT INFLUENCE ON THE PORTFOLIO'S PERFORMANCE
DURING THE PERIOD?
A Stocks of consolidating companies were important for us this period.
Consolidation can be a useful way to grow a company quickly, broaden its
profit margin and reduce its operating costs. For instance, a merger of simi-
lar companies has often resulted in a reduced workforce, streamlined opera-
tions, improved productivity and increased profits.
Three companies that the Fund held used consolidation very effectively. A
textbook example was Evergreen Media, a radio broadcasting conglomerate. After
the recent passage of the Telecom Act of 1996, Evergreen increased the number
of radio stations it owns nationwide. As a result of its aggressive buyouts,
Evergreen posted a 33.59 percent stock price appreciation for the period.
US Office Products, an office supply company, also has been actively buying
up smaller office suppliers in an effort to increase its size, as well as its
sales and distribution. US Office Products appreciated 84.62 percent for the
period based on stock price.
In addition, United Waste used acquisitions of smaller, residential trash
collection companies to increase its business base. As these types of compa-
nies continue to consolidate, we believe the larger organizations in the in-
dustry will experience strong growth. United Waste appreciated 73.15 percent
during the period based on stock price.
Grocery stores have proven to be among the portfolio's steady performers.
Safeway, like United Waste, is another company that continues to show substan-
tial earnings growth and expansion. Supermarkets provide staple products for
which consumer demand remains constant--which is the key to earnings and stock
price stability during a slower economy. Safeway appreciated 28.16 percent
based on stock price.
Q WHAT IS YOUR OUTLOOK FOR THE STOCK MARKET DURING THE NEXT SIX MONTHS
AND, MORE SPECIFICALLY, FOR THE FUND?
A We anticipate slower economic growth and low inflation for the remainder
of the year--most likely leading to moderate growth in the stock market.
However, it's unlikely that we will see returns on stocks like those experi-
enced in 1995. With the expectation of moderate earnings growth and low infla-
tion, investors will want to focus on companies demonstrating higher growth
and/or consistent earnings growth. The mid-cap stocks that comprise the Fund
offer higher growth-potential than large-cap stocks, with less risk than
emerging companies. For this reason, we see a favorable environment for the
stocks in the Fund.
In the current market, stocks appear to be fairly valued. Therefore, indi-
vidual companies and their specific attributes will dictate portfolio selec-
tion. The Fund will continue to hold stocks with strong future fundamentals
and attractive earnings but only at an acceptable price.
For the long-term, we are optimistic about the Fund's performance, given our
focus on positive fundamentals and attractive valuations.
/s/ Alan T. Sachtleben /s/ Jeff D. New
Alan T. Sachtleben Jeff D. New
Executive Vice President Portfolio Manager
Equity Investments
Please see footnotes on page three
6
<PAGE>
PORTFOLIO OF INVESTMENTS
June 30, 1996 (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Security Description Shares Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS 92.9%
CONSUMER DISTRIBUTION 9.7%
Dayton Hudson Corp....................................... 130,000 $ 13,406,250
Dillard Dept Stores, Inc................................. 21,700 792,050
Eckerd Corp. (c)......................................... 684,000 15,475,500
Gap, Inc................................................. 265,000 8,513,125
General Nutrition Companies, Inc......................... 250,000 4,375,000
Gymboree Corp. (c)....................................... 142,300 4,340,150
Kroger Co. (c)........................................... 245,000 9,677,500
Lear Seating Corp. (c)................................... 120,000 4,230,000
Officemax, Inc........................................... 244,000 5,825,500
Pep Boys Manny Moe & Jack................................ 100,000 3,400,000
Ross Stores, Inc......................................... 85,000 2,953,750
Safeway, Inc............................................. 540,000 17,820,000
Sears Roebuck & Co....................................... 265,000 12,885,625
Staples, Inc. (c)........................................ 253,000 4,933,500
Tiffany & Co............................................. 95,000 6,935,000
TJX Companies, Inc....................................... 195,000 6,581,250
U.S. Office Products Co. (c)............................. 200,000 8,400,000
Vons Companies, Inc. (c)................................. 160,000 5,980,000
--------------
136,524,200
--------------
CONSUMER DURABLES 2.6%
Black & Decker Corp...................................... 135,000 5,214,375
Chrysler Corp............................................ 220,000 13,640,000
Ford Motor Co............................................ 200,000 6,475,000
Harley Davidson, Inc..................................... 133,000 5,469,625
Snap On, Inc............................................. 123,000 5,827,125
--------------
36,626,125
--------------
CONSUMER NON-DURABLES 7.6%
Fila Holdings S.p.A. - Sponsored ADR (Italy)............. 90,000 7,762,500
Liz Claiborne, Inc....................................... 174,000 6,024,750
Nautica Enterprises, Inc. (c)............................ 234,000 6,727,500
Oakley, Inc. (c)......................................... 107,000 4,868,500
PepsiCo, Inc............................................. 500,000 17,687,500
Philip Morris Companies, Inc............................. 565,000 58,760,000
Tommy Hilfiger Corp. (c)................................. 102,000 5,469,750
--------------
107,300,500
--------------
CONSUMER SERVICES 7.9%
American Radio Systems Corp. (c)......................... 91,000 3,913,000
Career Horizons, Inc. (c)................................ 153,000 5,355,000
Emmis Broadcasting Corp., Class A (c).................... 143,000 7,150,000
Equifax, Inc............................................. 255,000 6,693,750
Evergreen Media Corp., Class A (c)....................... 230,000 9,832,500
</TABLE>
See Notes to Financial Statements
7
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Security Description Shares Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER SERVICES (CONTINUED)
Hilton Hotels Corp....................................... 55,000 $ 6,187,500
La Quinta Inns, Inc...................................... 145,000 4,857,500
Marriott International, Inc.............................. 204,000 10,965,000
Mirage Resorts, Inc. (c)................................. 138,000 7,452,000
Omnicom Group (c)........................................ 275,000 12,787,500
Outback Steakhouse, Inc. (c)............................. 173,000 5,965,797
Promus Hotel Corp. (c)................................... 153,000 4,532,625
RAC Financial Group, Inc. (c)............................ 95,000 2,683,750
Service Corp. International.............................. 219,000 12,592,500
Sonic Corp. (c).......................................... 150,000 3,637,500
Trump Hotels & Casino Resorts............................ 222,000 6,327,000
--------------
110,932,922
--------------
ENERGY 4.4%
Apache Corp.............................................. 170,000 5,588,750
Baker Hughes, Inc........................................ 113,000 3,714,875
Exxon Corp............................................... 116,000 10,077,500
Panhandle Eastern Corp................................... 184,000 6,049,000
Phillips Petroleum Co.................................... 120,000 5,025,000
Smith International, Inc. (c)............................ 281,000 8,465,125
Sonat Offshore Drilling, Inc............................. 61,000 3,080,500
Texaco, Inc.............................................. 112,000 9,394,000
Williams Companies....................................... 220,000 10,890,000
--------------
62,284,750
--------------
FINANCE 13.6%
Aames Financial Corp..................................... 153,000 5,488,875
Alex Brown, Inc.......................................... 110,000 6,215,000
Bank of Boston Corp...................................... 189,000 9,355,500
Bankamerica Corp......................................... 133,000 10,074,750
Chase Manhattan Corp..................................... 209,000 14,760,625
Citicorp................................................. 110,000 9,088,750
CMAC Investment Corp..................................... 105,000 6,037,500
Conseco, Inc............................................. 185,000 7,400,000
Exel Limited............................................. 100,000 7,050,000
Federal National Mortgage Association.................... 690,000 23,115,000
Green Tree Financial Corp................................ 420,000 13,125,000
Merrill Lynch & Co., Inc................................. 130,000 8,466,250
MGIC Investment Corp..................................... 103,000 5,780,875
Money Store, Inc......................................... 225,000 4,978,125
Morgan Stanley Group, Inc................................ 125,000 6,140,625
Nationsbank Corp......................................... 100,000 8,262,500
Penncorp Financial Group, Inc............................ 194,000 6,159,500
</TABLE>
See Notes to Financial Statements
8
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Security Description Shares Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
FINANCE (CONTINUED)
Student Loan Marketing Association....................... 133,000 $ 9,842,000
SunAmerica, Inc.......................................... 262,500 14,831,250
Travelers Group, Inc..................................... 177,000 8,075,625
Wells Fargo & Co......................................... 26,000 6,210,750
--------------
190,458,500
--------------
HEALTH CARE 10.6%
Amgen, Inc. (c).......................................... 115,000 6,210,000
Bristol Myers Squibb Co.................................. 115,000 10,350,000
Coherent, Inc. (c)....................................... 51,000 2,652,000
Elan Corp. PLC - ADR (Ireland) (c)....................... 137,000 7,826,125
Genzyme Corp. (c)........................................ 127,000 6,381,750
Guidant Corp............................................. 138,000 6,796,500
Health Management Association, Inc., Class A (c)......... 274,500 5,558,625
Healthcare Compare Corp. (c)............................. 110,000 5,362,500
Healthsouth Rehabilitation (c)........................... 265,000 9,540,000
Johnson & Johnson........................................ 275,000 13,612,500
Lincare Holdings, Inc. (c)............................... 204,900 8,042,325
Medtronic, Inc........................................... 112,000 6,272,000
Mentor Corp.............................................. 121,400 3,095,700
Merck & Co., Inc......................................... 150,000 9,693,750
Orthodontic Centers of America (c)....................... 130,000 3,445,000
Pfizer, Inc.............................................. 130,000 9,278,750
Physician Reliance Network (c)........................... 204,000 4,539,000
Renal Treatment Centers, Inc. (c)........................ 235,000 6,756,250
Schering-Plough Corp..................................... 185,000 11,608,750
Sofamor/Danek Group, Inc. (c)............................ 100,000 2,775,000
Universal Health Services, Inc., Class B (c)............. 152,100 3,973,613
Watsons Pharmaceuticals, Inc. (c)........................ 143,000 5,416,125
--------------
149,186,263
--------------
PRODUCER MANUFACTURING 5.8%
Belden, Inc.............................................. 96,200 2,886,000
Case Corp................................................ 143,000 6,864,000
Deere & Co............................................... 153,000 6,120,000
Dover Corp............................................... 166,000 7,656,750
Greenfield Industries, Inc............................... 133,000 4,389,000
Illinois Tool Workers, Inc............................... 87,000 5,883,375
Johnson Controls, Inc.................................... 46,000 3,197,000
MSC Industrial Direct Co., Class A....................... 94,500 3,047,625
Textron, Inc............................................. 67,000 5,351,625
United Technologies Corp................................. 72,000 8,280,000
United Waste Systems, Inc. (c)........................... 450,000 14,512,500
USA Waste Services, Inc. (c)............................. 230,000 6,813,750
Wellman, Inc............................................. 300,000 7,012,500
--------------
82,014,125
--------------
</TABLE>
See Notes to Financial Statements
9
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Security Description Shares Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
RAW MATERIALS/PROCESSING INDUSTRIES 4.7%
A K Steel Holding Corp................................... 199,000 $ 7,785,875
Bemis, Inc............................................... 107,000 3,745,000
Boise Cascade, Corp...................................... 84,000 3,076,500
Cytec Industries, Inc. (c)............................... 51,000 4,360,500
Fort Howard Corp. (c).................................... 143,000 2,842,125
Phelps Dodge Corp........................................ 41,000 2,557,375
Praxair, Inc............................................. 381,000 16,097,250
Raychem Corp............................................. 100,000 7,187,500
Sigma Aldrich Corp....................................... 82,000 4,387,000
UCAR International, Inc. (c)............................. 120,000 4,995,000
Union Carbide Corp....................................... 150,000 5,962,500
Willamette Industries, Inc............................... 50,000 2,975,000
--------------
65,971,625
--------------
TECHNOLOGY 20.7%
Adaptec, Inc. (c)........................................ 100,000 4,737,500
ADC Telecommunications, Inc. (c)......................... 135,000 6,075,000
Analog Devices, Inc. (c)................................. 240,000 6,120,000
Ascend Communications, Inc. (c).......................... 133,000 7,481,250
Aspect Telecommunications Corp. (c)...................... 138,000 6,831,000
Atmel Corp. (c).......................................... 143,000 4,307,875
BMC Industries, Inc...................................... 127,000 3,651,250
BMC Software, Inc. (c)................................... 170,000 10,157,500
Boeing Co................................................ 133,000 11,587,625
Cadence Design System, Inc. (c).......................... 210,000 7,087,500
Cascade Communications (c)............................... 82,000 5,576,000
CHS Electronics, Inc. (c)................................ 135,800 1,833,300
Cisco Systems, Inc. (c).................................. 200,000 11,325,000
Computer Association International, Inc.................. 235,000 16,743,750
DST Systems, Inc......................................... 193,300 6,185,600
ECI Telecom Limited...................................... 204,000 4,743,000
Ericsson LM Class B Sek 10 - ADR (Sweden)................ 310,000 6,665,000
First Data Corp.......................................... 87,000 6,927,375
Hewlett-Packard Co....................................... 57,000 5,678,625
Input/Output, Inc. (c)................................... 102,000 3,302,250
Intel Corp............................................... 162,000 11,896,875
Linear Technology Corp................................... 163,000 4,890,000
Lucent Technologies, Inc................................. 112,400 4,257,150
Medic Computer Systems, Inc.............................. 92,000 7,463,500
Microsoft Corp. (c)...................................... 138,000 16,577,250
Newbridge Networks Corp. (c)............................. 82,000 5,371,000
Octel Communications (c)................................. 244,000 4,819,000
</TABLE>
See Notes to Financial Statements
10
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Security Description Shares Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
TECHNOLOGY (CONTINUED)
Oracle System Corp. (c)................................. 206,500 $ 8,143,843
Pairgain Technologies, Inc. (c)......................... 174,000 10,788,000
Peoplesoft, Inc. (c).................................... 82,000 5,842,500
Picturetel Corp. (c).................................... 140,000 5,512,500
Proxim, Inc. (c)........................................ 133,000 5,353,250
Sanmina Corp. (c)....................................... 130,000 3,510,000
SCI System, Inc. (c).................................... 205,000 8,328,125
Sun Microsystems, Inc. (c).............................. 291,000 17,132,625
Synopsys, Inc. (c)...................................... 115,000 4,571,250
Tellabs, Inc. (c)....................................... 118,000 7,891,250
3Com Corp. (c).......................................... 97,000 4,437,750
TSX Corp. (c)........................................... 35,700 990,675
US Robotics Corp. (c)................................... 144,000 12,312,000
Wind River Systems, Inc. (c)............................ 89,100 3,073,950
--------------
290,178,893
--------------
TRANSPORTATION 1.4%
Burlington Northern, Inc................................ 56,000 4,529,000
Continental Airlines, Inc., Class B (c)................. 56,000 3,458,000
CSX Corp. .............................................. 113,500 5,476,375
Northwest Airlines, Inc., Class A (c)................... 155,000 6,122,500
--------------
19,585,875
--------------
UTILITIES 3.9%
Frontier Corp........................................... 161,600 4,949,000
LCI International, Inc. (c)............................. 200,000 6,275,000
MCI Communications Corp................................. 530,000 13,581,250
Sprint Corp............................................. 281,000 11,802,000
Worldcom, Inc. (c)...................................... 330,000 18,273,750
--------------
54,881,000
--------------
TOTAL COMMON STOCKS 92.9% (Cost $1,020,586,974) (a).... 1,305,944,778
--------------
</TABLE>
See Notes to Financial Statements
11
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Security Description Market Value
- --------------------------------------------------------------------------------
<S> <C>
SHORT-TERM INVESTMENTS 5.5%
COMMERCIAL PAPER 1.8%
General Electric Capital Corp. ($15,000,000 par, yielding 5.56%,
07/01/96 maturity).............................................. $ 14,993,050
Tennessee Valley Authority Discount Note ($10,000,000 par,
yielding 5.33%, 08/20/96
maturity) (b)................................................... 9,925,058
--------------
24,918,108
--------------
UNITED STATES AGENCY AND GOVERNMENT OBLIGATIONS 3.7%
Student Loan Marketing Association Discount Note ($42,075,000
par, yielding 5.45%, 07/01/96 maturity) (b)..................... 42,055,891
United States Treasury Bills ($10,000,000 par, yielding 4.93%,
07/05/96 maturity) (b).......................................... 9,993,222
--------------
52,049,113
--------------
TOTAL SHORT-TERM INVESTMENTS.................................... 76,967,221
--------------
OTHER ASSETS IN EXCESS OF LIABILITIES 1.6%...................... 22,297,908
--------------
NET ASSETS 100%................................................. $1,405,209,907
--------------
</TABLE>
(a) At June 30, 1996, for federal income tax purposes, cost for long-term
investments is $1,021,850,005, the aggregate gross unrealized appreciation is
$296,953,060 and the aggregate gross unrealized depreciation is $12,902,037,
resulting in net unrealized appreciation including open futures transactions of
$284,051,023.
(b) Assets segregated as collateral for open futures transactions.
(c) Non-income producing security as this stock currently does not declare
dividends.
See Notes to Financial Statements
12
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments, at Market Value (Cost $1,020,586,974) (Note 1).... $1,305,944,778
Short-Term Investments (Note 1)................................ 76,967,221
Cash........................................................... 28,587
Receivables:
Securities Sold............................................... 25,164,407
Fund Shares Sold.............................................. 6,534,916
Dividends..................................................... 1,142,368
Variation Margin on Futures (Note 5).......................... 58,000
Other.......................................................... 58,776
--------------
Total Assets.................................................. 1,415,899,053
--------------
LIABILITIES:
Payables:
Securities Purchased.......................................... 6,602,394
Fund Shares Repurchased....................................... 2,418,220
Distributor and Affiliates (Notes 2 and 6).................... 889,748
Investment Advisory Fee (Note 2).............................. 566,245
Income Distributions.......................................... 68,607
Deferred Compensation and Retirement Plans (Note 2)............ 110,809
Accrued Expenses............................................... 33,123
--------------
Total Liabilities............................................. 10,689,146
--------------
NET ASSETS..................................................... $1,405,209,907
--------------
NET ASSETS CONSIST OF:
Capital (Note 3)............................................... $1,085,417,902
Net Unrealized Appreciation on Securities...................... 285,314,054
Accumulated Net Realized Gain on Securities.................... 31,614,624
Accumulated Undistributed Net Investment Income................ 2,863,327
--------------
NET ASSETS..................................................... $1,405,209,907
--------------
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on net
assets of $1,153,871,689 and 79,830,509 shares of capital
stock issued and outstanding) (Note 3)........................ $ 14.45
Maximum sales charge (5.75%* of offering price)............... .88
--------------
Maximum offering price to public.............................. $ 15.33
--------------
Class B Shares:
Net asset value and offering price per share (Based on net
assets of $228,888,948 and 16,060,980 shares of capital stock
issued and outstanding) (Note 3).............................. $ 14.25
--------------
Class C Shares:
Net asset value and offering price per share (Based on net
assets of $22,449,270 and 1,565,699 shares of capital stock
issued and outstanding) (Note 3).............................. $ 14.34
--------------
</TABLE>
*On sales of $50,000 or more, the sales charge will be reduced.
See Notes to Financial Statements
13
<PAGE>
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends......................................................... $ 7,112,393
Interest.......................................................... 3,344,679
------------
Investment Income................................................ 10,457,072
------------
EXPENSES:
Investment Advisory Fee (Note 2).................................. 3,268,062
Distribution (12b-1) and Service Fees (Allocated to Classes A, B
and C of $1,110,564, $1,057,466 and $96,520, respectively) (Note
6)............................................................... 2,264,550
Shareholder Services (Note 2)..................................... 1,600,452
Custody (Note 1).................................................. 47,730
Trustees Fees and Expenses (Note 2)............................... 30,363
Other ............................................................ 310,233
------------
Total Expenses................................................... 7,521,390
Less: Earnings Credits on Cash Balances (Note 1)................. 21,569
Expenses Reimbursed............................................ 7,500
------------
Net Expenses..................................................... 7,492,321
------------
NET INVESTMENT INCOME............................................. $ 2,964,751
------------
REALIZED AND UNREALIZED GAIN/LOSS ON SECURITIES:
Realized Gain/Loss on Securities:
Investments...................................................... $ 22,840,010
Futures.......................................................... 10,424,755
------------
Net Realized Gain on Securities................................... 33,264,765
------------
Unrealized Appreciation/Depreciation on Securities:
Beginning of the Period.......................................... 175,843,340
------------
End of the Period:
Investments...................................................... 285,357,804
Futures.......................................................... (43,750)
------------
285,314,054
------------
Net Unrealized Appreciation on Securities During the Period:...... 109,470,714
------------
NET REALIZED AND UNREALIZED GAIN ON SECURITIES.................... $142,735,479
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS........................ $145,700,230
------------
</TABLE>
See Notes to Financial Statements
14
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the Six Months Ended June 30, 1996 and the Year Ended December 31, 1995
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
Six Months Ended December 31,
June 30, 1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income........................ $ 2,964,751 $ 5,000,212
Net Realized Gain on Securities.............. 33,264,765 173,805,246
Net Unrealized Appreciation
on Securities During the Period............. 109,470,714 122,974,300
-------------- --------------
Change in Net Assets from Operations........ 145,700,230 301,779,758
-------------- --------------
Distributions from Net Investment Income:
Class A Shares.............................. (123,536) (4,891,163)
-------------- --------------
Distributions from Net Realized Gain on
Securities:
Class A Shares.............................. (10,305,885) (141,850,844)
Class B Shares.............................. (2,077,735) (24,998,825)
Class C Shares.............................. (180,784) (2,129,789)
-------------- --------------
(12,564,404) (168,979,458)
-------------- --------------
Total Distributions......................... (12,687,940) (173,870,621)
-------------- --------------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES................................... 133,012,290 127,909,137
-------------- --------------
FROM CAPITAL TRANSACTIONS (NOTE 3):
Proceeds from Shares Sold.................... 1,067,321,008 1,556,048,523
Net Asset Value of Shares Issued Through
Dividend Reinvestment........................ 11,508,609 155,870,080
Cost of Shares Repurchased................... (1,042,155,171) (1,455,098,985)
-------------- --------------
NET CHANGE IN NET ASSETS FROM CAPITAL
TRANSACTIONS................................. 36,674,446 256,819,618
-------------- --------------
TOTAL INCREASE IN NET ASSETS................. 169,686,736 384,728,755
NET ASSETS:
Beginning of the Period...................... 1,235,523,171 850,794,416
-------------- --------------
End of the Period (Including undistributed
net investment income of $2,863,327 and
$22,112, respectively)...................... $1,405,209,907 $1,235,523,171
-------------- --------------
</TABLE>
See Notes to Financial Statements
15
<PAGE>
FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for one share of the Fund
outstanding throughout the periods indicated. (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year Ended December 31,
Ended ------------------------------
Class A Shares June 30, 1996 1995 1994 1993 1992
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of the
Period............................ $13.07 $11.43 $12.23 $12.64 $13.83
-------- -------- ------ ------ ------
Net Investment Income............ .041 .08 .08 .06 .135
Net Realized and Unrealized
Gain/Loss on Securities......... 1.477 3.7325 (.1225) 1.2525 .9325
-------- -------- ------ ------ ------
Total from Investment Operations.. 1.518 3.8125 (.0425) 1.3125 1.0675
-------- -------- ------ ------ ------
Less:
Distributions from Net Investment
Income........................... .002 .0725 .085 .0575 .145
Distributions from Net Realized
Gain on Securities.............. .132 2.10 .6725 1.665 2.1125
-------- -------- ------ ------ ------
Total Distributions............... .134 2.1725 .7575 1.7225 2.2575
-------- -------- ------ ------ ------
Net Asset Value, End of the
Period............................ $14.454 $13.07 $11.43 $12.23 $12.64
-------- -------- ------ ------ ------
Total Return (a).................. 11.61%* 33.92% (.18%) 10.96% 8.39%
Net Assets at End of the Period
(In millions)..................... $1,153.9 $1,035.7 $749.7 $778.9 $736.4
Ratio of Expenses to Average Net
Assets (b) (c).................... .98% .98% 1.05% .99% .99%
Ratio of Net Investment Income to
Average Net Assets (c)............ .58% .59% .71% .48% 1.00%
Portfolio Turnover................ 62%* 152% 176% 196% 161%
</TABLE>
*Non-Annualized
(a) Total return is based upon net asset value which does not include payment
of the maximum sales charge or contingent deferred sales charge.
(b) Beginning with the year ended December 31, 1995, the Ratio of Expenses are
based upon Total Expenses which does not reflect credits earned on
overnight cash balances. (Note 1)
(c) The Ratios of Expenses and Net Investment Income to Average Net Assets
were not affected by the assumption of expenses by VKAC.
See Notes to Financial Statements
16
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
The following schedule presents financial highlights for one share of the Fund
outstanding throughout the periods indicated. (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year Ended December 31,
Ended ------------------------------
Class B Shares June 30, 1996 1995 1994 1993 1992
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
the Period...................... $12.94 $11.37 $12.19 $12.66 $13.82
------- ------ ------ ------ ------
Net Investment Income/Loss..... (.011) (.03) (.01) (.04) .015
Net Realized and Unrealized
Gain/Loss on Securities....... 1.454 3.70 (.1375) 1.24 .9675
------- ------ ------ ------ ------
Total from Investment
Operations...................... 1.443 3.67 (.1475) 1.20 .9825
------- ------ ------ ------ ------
Less:
Distributions from Net
Investment Income.............. -- -- -- .005 .03
Distributions from Net Realized
Gain on Securities............ .132 2.10 .6725 1.665 2.1125
------- ------ ------ ------ ------
Total Distributions............. .132 2.10 .6725 1.67 2.1425
------- ------ ------ ------ ------
Net Asset Value, End of the
Period.......................... $14.251 $12.94 $11.37 $12.19 $12.66
------- ------ ------ ------ ------
Total Return (a)................ 11.17%** 32.82% (1.07%) 10.00% 7.67%
Net Assets at End of the Period
(In millions)................... $228.9 $184.1 $93.7 $66.2 $21.5
Ratio of Expenses to Average Net
Assets (b)*..................... 1.79% 1.81% 1.89% 1.81% 1.90%
Ratio of Net Investment Income
to Average Net Assets*......... (.24%) (.24%) (.11%) (.37%) .12%
Portfolio Turnover.............. 62%** 152% 176% 196% 161%
*If certain expenses had not been assumed by VKAC, the ratios would have been
as follows:
Ratio of Expenses to Average Net
Assets (b)...................... 1.79% 1.81% N/A N/A N/A
Ratio of Net Investment Income
to Average Net Assets........... (.23%) (.24%) N/A N/A N/A
</TABLE>
**Non-Annualized
(a) Total return is based upon net asset value which does not include payment
of the maximum sales charge or contingent deferred sales charge.
(b) Beginning with the year ended December 31, 1995, the Ratio of Expenses are
based upon Total Expenses which does not reflect credits earned on
overnight cash balances. (Note 1)
N/A = Not Applicable
See Notes to Financial Statements
17
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
The following schedule presents financial highlights for one share of the Fund
outstanding throughout the periods indicated. (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
July 20, 1993
Six Months Year Ended Year Ended (Commencement
Ended December 31, December 31, of Distribution) to
Class C Shares June 30, 1996 1995 1994 December 31, 1993
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of the Period. $13.01 $11.42 $12.23 $12.66
------- ------ ------ ------
Net Investment Income.. (.009) (.03) (.01) (.03)
Net Realized and
Unrealized
Gain/Loss on
Securities............ 1.469 3.72 (.1275) .765
------- ------ ------ ------
Total from Investment
Operations.............. 1.460 3.69 (.1375) .735
------- ------ ------ ------
Less Distributions from
Net Realized
Gain on Securities..... .132 2.10 .6725 1.165
------- ------ ------ ------
Net Asset Value, End of
the Period.............. $14.338 $13.01 $11.42 $12.23
------- ------ ------ ------
Total Return (a)........ 11.26%* 32.85% (.99%) 6.08%*
Net Assets at End of the
Period (In millions)... $22.4 $15.7 $7.4 $2.1
Ratio of Expenses to
Average Net
Assets (b) (c)......... 1.80% 1.80% 1.90% 1.83%
Ratio of Net Investment
Income to Average Net
Assets (c)............. (.25%) (.23%) (.12%) (.48%)
Portfolio Turnover...... 62%* 152% 176% 196%
</TABLE>
*Non-Annualized
(a) Total return is based upon net asset value which does not include payment
of the maximum sales charge or contingent deferred sales charge.
(b) Beginning with the year ended December 31, 1995, the Ratio of Expenses are
based upon Total Expenses which does not reflect credits earned on
overnight cash balances. (Note 1)
(c) The Ratios of Expenses and Net Investment Income to Average Net Assets
were not affected by the assumption of expenses by VKAC.
See Notes to Financial Statements
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS
June 30, 1996 (Unaudited)
- -------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen American Capital Enterprise Fund (the "Fund") is organized as a
Delaware business trust, and is registered as a diversified open-end manage-
ment investment company under the Investment Company Act of 1940, as amended.
The Fund's investment objective is to seek capital appreciation by investing
in a portfolio of securities consisting principally of common stocks. The Fund
commenced investment operations on January 7, 1954. The distribution of the
Fund's Class B and Class C shares commenced on December 20, 1991 and July 20,
1993, respectively.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The prep-
aration of financial statements in conformity with generally accepted account-
ing principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of con-
tingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
A. SECURITY VALUATION-Investments in securities listed on a securities ex-
change are valued at their sale price as of the close of such securities ex-
change. Unlisted securities and listed securities for which the last sale
price is not available are valued at the mean of the bid and asked prices or,
if not available, their fair value as determined by the Board of Trustees.
Short-term securities with remaining maturities of less than 60 days are val-
ued at amortized cost.
B. SECURITY TRANSACTIONS-Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
A repurchase agreement is a short-term investment in which the 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 re-
purchase 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 securi-
ties only upon physical delivery or evidence of book entry transfer to the ac-
count 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.
C. INVESTMENT INCOME-Dividend income is recorded on the ex-dividend date and
interest income is recorded on an accrual basis.
19
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- -------------------------------------------------------------------------------
D. FEDERAL INCOME TAXES-It is the Fund's policy to comply with the require-
ments of the Internal Revenue Code applicable to regulated investment compa-
nies and to distribute substantially all of its taxable income to its
shareholders. Therefore, no provision for federal income taxes is required.
Net realized gains or losses may differ for financial and tax reporting pur-
poses primarily as a result of gains or losses recognized for tax purposes on
the mark-to-market of open futures at December 31, 1995, the Fund's year-end,
and the deferral of losses for tax purposes resulting from wash sales.
E. DISTRIBUTION OF INCOME AND GAINS-The Fund declares and pays dividends annu-
ally from net investment income. Net realized gains, if any, are distributed
annually. Distributions from net realized gains for book purposes may include
short-term capital gains and gains on option and futures transactions. All
short-term capital gains and a portion of option and futures gains are in-
cluded in ordinary income for tax purposes.
F. EXPENSE REDUCTIONS-During the six months ended June 30, 1996, the Fund's
custody fee was reduced by approximately $21,600 as a result of credits earned
on overnight cash balances.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Fund's Investment Advisory Agreement, the Adviser will
provide investment advice and facilities to the Fund for an annual fee payable
monthly as follows:
<TABLE>
<CAPTION>
AVERAGE NET ASSETS % PER ANNUM
- --------------------------------------------------------------------------------
<S> <C>
First $1 billion.................................................... .50 of 1%
Next $1 billion..................................................... .45 of 1%
Next $1 billion..................................................... .40 of 1%
Over $3 billion..................................................... .35 of 1%
</TABLE>
For the six months ended June 30, 1996, the Fund recognized expenses of ap-
proximately $151,300 representing Van Kampen American Capital Distributors,
Inc.'s or its affiliates' (collectively "VKAC") cost of providing accounting
services to the Fund. These services are provided by VKAC at cost.
ACCESS Investor Services, Inc. ("ACCESS"), an affiliate of the Adviser,
serves as the shareholder servicing agent for the Fund. For the six months
ended June 30, 1996, the Fund recognized expenses of approximately $1,300,900,
representing ACCESS' cost of providing transfer agency and shareholder serv-
ices plus a profit.
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- -------------------------------------------------------------------------------
Certain officers and trustees of the Fund are also officers and directors of
VKAC. The Fund does not compensate its officers or trustees who are officers
of VKAC.
The Fund has implemented deferred compensation and retirement plans for its
trustees. Under the deferred compensation plan, trustees may elect to defer
all or a portion of their compensation to a later date. The retirement plan
covers those trustees who are not officers of VKAC.
At June 30, 1996, VKAC owned 138,615, 65 and 54 shares of Classes A, B and
C, respectively.
3. CAPITAL TRANSACTIONS
The Fund has outstanding three classes of common shares, Classes A, B and C
each with a par value of $.01 per share. There are an unlimited number of
shares of each class authorized.
At June 30, 1996, capital aggregated $858,395,473, $206,276,251 and
$20,746,178 for Classes A, B, and C, respectively. For the six months ended
June 30, 1996, transactions were as follows:
<TABLE>
<CAPTION>
SHARES VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
Sales:
Class A......................................... 69,917,084 $ 972,837,327
Class B......................................... 6,095,280 84,235,750
Class C......................................... 733,131 10,247,931
----------- ---------------
Total Sales...................................... 76,745,495 $ 1,067,321,008
----------- ---------------
Dividend Reinvestment:
Class A......................................... 664,953 $ 9,406,990
Class B......................................... 139,538 1,938,831
Class C......................................... 11,663 162,788
----------- ---------------
Total Dividend Reinvestment...................... 816,154 $ 11,508,609
----------- ---------------
Repurchases:
Class A......................................... (70,008,914) $ (976,153,761)
Class B......................................... (4,397,530) (60,632,639)
Class C......................................... (385,700) (5,368,771)
----------- ---------------
Total Repurchases................................ (74,792,144) $(1,042,155,171)
----------- ---------------
</TABLE>
21
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- -------------------------------------------------------------------------------
At December 31, 1995, capital aggregated $852,304,917, $180,734,309 and
$15,704,230 for Classes A, B, and C, respectively. For the year ended December
31, 1995, transactions were as follows:
<TABLE>
<CAPTION>
SHARES VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
Sales:
Class A........................................ 106,134,949 $ 1,442,947,657
Class B........................................ 7,589,070 100,490,408
Class C........................................ 923,407 12,610,458
------------ ---------------
Total Sales..................................... 114,647,426 $ 1,556,048,523
------------ ---------------
Dividend Reinvestment:
Class A........................................ 10,204,215 $ 130,617,203
Class B........................................ 1,841,496 23,364,668
Class C........................................ 147,978 1,888,209
------------ ---------------
Total Dividend Reinvestment..................... 12,193,689 $ 155,870,080
------------ ---------------
Repurchases:
Class A........................................ (102,688,145) $(1,402,228,054)
Class B........................................ (3,442,265) (45,974,654)
Class C........................................ (514,225) (6,896,277)
------------ ---------------
Total Repurchases............................... (106,644,635) $(1,455,098,985)
------------ ---------------
</TABLE>
Class B and C shares are offered without a front end sales charge, but are
subject to a contingent deferred sales charge (CDSC). The CDSC for Class B and
C shares will be imposed on most redemptions made within six years of the pur-
chase for Class B and one year of the purchase for Class C as detailed in the
following schedule. The Class B and C shares bear the expense of their respec-
tive deferred sales arrangements, including higher distribution and service
fees and incremental transfer agency costs.
22
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CONTINGENT
DEFERRED SALES
CHARGE
YEAR OF REDEMPTION CLASS B CLASS C
- --------------------------------------------------------------------------------
<S> <C> <C>
First........................................................... 5.00% 1.00%
Second.......................................................... 4.00% None
Third........................................................... 3.00% None
Fourth.......................................................... 2.50% None
Fifth........................................................... 1.50% None
Sixth and Thereafter............................................ None None
</TABLE>
For the six months ended June 30, 1996, VKAC, as Distributor for the Fund,
received commissions on sales of the Fund's Class A shares of approximately
$221,100 and CDSC on redeemed shares of approximately $253,300.
4. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of invest-
ments, excluding short-term investments, were $827,780,950 and $752,481,457,
respectively.
5. DERIVATIVE FINANCIAL INSTRUMENTS
A derivative financial instrument in very general terms refers to a security
whose value is "derived" from the value of an underlying asset, reference rate
or index.
The Fund has a variety of reasons to use derivative instruments, such as to
attempt to protect the Fund against possible changes in the market value of
its portfolio or generate potential gain. All of the Fund's portfolio hold-
ings, including derivative instruments, are marked to market each day with the
change in value reflected in the unrealized appreciation/depreciation on secu-
rities. Upon disposition, a realized gain or loss is recognized accordingly.
During the period, the Fund invested in futures contracts, a type of deriva-
tive. A futures contract is an agreement involving the delivery of a particu-
lar asset on a specified future date at an agreed upon price. The Fund
generally invests in stock index futures. These contracts are generally used
to provide the return of an index without purchasing all of the securities un-
derlying the index or as a substitute for purchasing specific securities.
23
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- -------------------------------------------------------------------------------
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. During the period the futures contract is open,
payments are received from or made to the broker based upon changes in the
value of the contract (the variation margin). The cost of securities acquired
through delivery under a contract is adjusted by the unrealized gain or loss
on the contract.
Transactions in futures contracts for the six months ended June 30, 1996,
were as follows:
<TABLE>
<CAPTION>
CONTRACTS
- --------------------------------------------------------------------------------
<S> <C>
Outstanding at December 31, 1995..................................... 250
Futures Opened....................................................... 2,375
Futures Closed....................................................... (2,445)
------
Outstanding at June 30, 1996......................................... 180
------
</TABLE>
The futures contracts outstanding at June 30, 1996, and the description and
unrealized depreciation are as follows:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS DEPRECIATION
- -------------------------------------------------------------------------------
<S> <C> <C>
S&P 500 Index Futures
Sept 1996--Buys to Open............................... 180 $43,750
--- -------
</TABLE>
6. DISTRIBUTION AND SERVICE PLANS
The Fund and its shareholders have adopted a distribution plan pursuant to
Rule 12b-1 under the Investment Company Act of 1940 and a service plan (col-
lectively the "Plans"). The Plans govern payments for the distribution of the
Fund's shares, ongoing shareholder services and maintenance of shareholder ac-
counts.
Annual fees under the Plans of up to .25% of Class A shares and 1.00% each
of Class B and Class C shares are accrued daily. Included in these fees for
the six months ended June 30, 1996, are payments to VKAC of approximately
$964,800.
24
<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 - Co-Chairman
JACK E. NELSON
DON G. POWELL*
JEROME L. ROBINSON
FERNANDO SISTO - Co-Chairman
WAYNE W. WHALEN*
WILLIAM S. WOODSIDE
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 SERVICING AGENT
ACCESS INVESTOR
SERVICES, INC.
P.O. Box 418256
Kansas City, Missouri 64141-9256
CUSTODIAN
STATE STREET BANK
AND TRUST COMPANY
225 Franklin Street
P.O. Box 1713
Boston, Massachusetts 02105
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT ACCOUNTANTS
PRICE WATERHOUSE LLP
1201 Louisiana
Houston, Texas 77002
*"Interested" persons of the Fund, as defined in the
Investment Company Act of 1940.
(C)Van Kampen American Capital Distributors, Inc., 1996
All rights reserved.
(SM)denotes 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 un-
less 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.
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