<PAGE>
VAN KAMPEN
ENTERPRISE FUND
Semi-Annual Report
June 30, 1998
[ARTWORK APPEARS HERE]
VAN KAMPEN
FUNDS
<PAGE>
Table of Contents
<TABLE>
<S> <C>
Letter to Shareholders...................... 1
Performance Results......................... 3
Glossary of Terms........................... 4
Portfolio Management Review................. 5
Portfolio Highlights........................ 8
Portfolio of Investments.................... 9
Statement of Assets and Liabilities......... 15
Statement of Operations..................... 16
Statement of Changes in Net Assets.......... 17
Financial Highlights........................ 18
Notes to Financial Statements............... 21
</TABLE>
ENT SAR 8/98
<PAGE>
Letter to Shareholders
[PHOTO APPEARS HERE]
Dennis J. McDonnell and Don G. Powell
July 16, 1998
Dear Shareholder,
As you may know, Van Kampen American Capital is consolidating all of the
retail mutual funds that we distribute under the single name of Van Kampen
Funds. This move accompanies the change in our legal name to Van Kampen Funds
Inc.
You can be assured that the change in your fund's name will not affect its
management or daily operations. You will begin seeing the application of this
change with this report. In addition, as of August 31, your fund will be listed
in the daily newspapers by share class under the heading "Van Kampen Funds." For
your convenience, we have enclosed a separate brochure that covers additional
details related to these changes.
Economic Review
The U.S. economy continued to expand at a robust pace despite a deepening
recession in a number of Asian nations. The nation's inflation-adjusted output
of goods and services ran at 5.4 percent during the first quarter, an annualized
rate considered by many economists to be virtually unsustainable without leading
to inflation. As the reporting period ended, however, there were indications
that the Asian financial crisis was finally having a moderating impact on the
economy. Also, the Conference Board's index of leading indicators points toward
a slowdown in economic growth later this year.
Despite the generally solid pace of economic activity, inflation remained
benign. Consumer prices rose by 1.7 percent during the 12 months through June,
while producer prices actually declined during the same period. Falling
commodity prices and the impact of the strong dollar helped to offset the
inflationary implications of a tight labor market and strong consumer spending.
While the Federal Reserve kept short-term interest rates steady at 5.5 percent
during the reporting period, minutes from the central bank's May policy meeting
indicated growing sentiment for tightening monetary policy if the drag from Asia
does not slow the American economy on its own.
Market Review
U.S. stocks continued to post gains during the period, but the sharp variation
in returns across industry groups reflected the growing impact of the Asian
financial crisis on corporate profits. The Wilshire 5000 Index, consisting of
all publicly traded U.S. companies, gained 14.68 percent during the first six
months of 1998. Once again, most of the strength was concentrated in large-
capitalization companies, as the S&P 500 Index of large stocks returned 17.67
percent during the period compared to 4.93 percent for the Russell 2000 Index of
small-cap issues. Even large stocks, however, fell back significantly beginning
in April as the Asian crisis intensified.
1
Continued on page two
<PAGE>
Companies with heavy exposure to domestic consumers benefited from a strong
American economy, especially during the latter stages of the reporting period.
Consumer cyclical stocks returned 28.94 percent during the first six months of
1998, compared to 6.35 percent for basic materials and 3.01 percent for energy
issues. Eight of the ten top-performing industry groups during the second
quarter were from consumer-related sectors. Meanwhile, the steep decline in
energy and agricultural prices--a consequence of reduced demand from Asia--
undermined the performance of commodity-related stocks. During the three months
through June, five of the ten worst-performing industry sectors were from either
energy, metals, or commodity-based industries.
Outlook
We believe economic growth in the United States is likely to slow in coming
months as the impact of the Asian crisis becomes more apparent. As growth
decelerates, corporate profits will come under pressure, especially among large
companies. Given the difficult year-over-year earnings comparisons that will
begin to appear in coming quarters, we caution investors not to expect a
continuation of the large gains that have become almost routine for U.S. stocks
in recent years. The high valuations and decelerating profit growth could limit
returns in the equity market over the near term.
Still, the overall environment for equities remains positive. Inflation is
low, the economy continues to grow, the bond market is healthy, and monetary
policy is stable. These characteristics usually support relatively high
valuations in the stock market. We remain confident that the domestic equity
asset class will continue to provide solid growth for investors with a long-term
time horizon.
Additional details about your fund, including a question-and-answer section
with your portfolio management team, are provided in this report. As always, we
are pleased to have the opportunity to serve you and your family through our
diverse menu of quality investments.
Sincerely,
/s/ Don G. Powell /s/ Dennis J. McDonnell
Don G. Powell Dennis J. McDonnell
Chairman President
Van Kampen Asset Management Inc. Van Kampen Asset Management Inc.
2
<PAGE>
Performance Results for the Period Ended June 30, 1998
Van Kampen Enterprise Fund
<TABLE>
<CAPTION>
A Shares B Shares C Shares
<S> <C> <C> <C>
Total Returns
Six-month total return based on NAV/1/........ 16.77% 16.34% 16.39%
Six-month total return/2/..................... 10.07% 11.34% 15.39%
One-year total return/2/...................... 21.46% 22.92% 26.96%
Five-year average annual total return/2/...... 19.85% 20.15% N/A
Ten-year average annual total return/2/....... 17.45% N/A N/A
Life-of-Fund average annual total return/2/... 13.64% 19.00% 20.71%
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. This performance was achieved during generally
rising stock prices. Fund shares, when redeemed, may be worth more or less than
their original cost.
Because the prices of common stocks and other securities fluctuate, the value of
an investment in the Fund will vary upon the Fund's investment performance.
Foreign securities may magnify volatility due to changes in foreign exchange
rates, the political and economic uncertainties in foreign countries, and the
potential lack of liquidity, government supervision, and regulation.
Market forecasts provided in this report may not necessarily come to pass.
3
<PAGE>
Glossary of Terms
Blue-chip stocks:
Stocks of large, well-known companies that have a long record of growth.
Examples of blue-chip stocks include General Motors, International Business
Machines (IBM), Coca-Cola, and General Electric.
Bottom-up investing:
A management style that emphasizes the analysis of individual stocks, rather
than economic and market cycles.
Dow Jones Industrial Average:
The oldest and most widely recognized stock market average, which reflects the
performance of 30 actively traded stocks of well-established, blue-chip
companies.
Fundamentals:
Characteristics of a company, such as revenue growth, earnings growth,
financial strength, market share, and quality of management.
Growth investing:
An investment strategy that seeks to identify stocks that tend to offer
greater-than-average earnings growth. Growth stocks typically trade at higher
prices than value stocks, due to their higher expected earnings growth.
Market capitalization:
The size of a company, as measured by the value of its stock. Morningstar, an
independent mutual fund rating service, defines "small-cap" as less than $1
billion, "mid-cap" as between $1 billion and $5 billion, and "large-cap" as
more than $5 billion.
Net asset value (NAV):
The value of a mutual fund share, calculated by deducting a fund's liabilities
from its total assets and dividing this amount by the number of shares
outstanding. The NAV does not include any initial or contingent deferred sales
charge.
Standard & Poor's 500-Stock Index:
A broad-based measurement of changes in stock-market conditions based on the
average performance of 500 widely held common stocks. The index, which tracks
industrial, transportation, financial, and utility stocks, provides a guide to
the overall health of the U.S. stock market. The S&P 500 is a much broader
index than the Dow Jones Industrial Average and reflects the stock market more
accurately.
Valuation:
The estimated or determined worth of a stock, based on financial measures such
as the stock's current price relative to earnings, revenue, book value, and
cash flow.
4
<PAGE>
Portfolio Management Review
Van Kampen Enterprise Fund
We recently spoke to the management team of the Van Kampen Enterprise Fund about
the key events and economic forces that shaped the markets during the past six
months. The team includes Jeff D. New, portfolio manager; Michael Davis,
portfolio comanager; and Dennis J. McDonnell, president of the adviser. The
following excerpts reflect their views on the Fund's performance during the six
months ended June 30, 1998.
Q Can you describe the stock market environment for the Fund during the past
six months?
A The stock market was influenced by two opposing factors. On the home front,
steady economic growth and low inflation provided a very favorable climate
for stocks. However, the aftermath of the currency collapse in Southeast Asia
threatened to slow the economies of countries around the world. Fortunately for
equity investors, positive economic conditions in the United States had a
greater influence on the stock market than overseas turmoil did. The Dow Jones
Industrial Average set record highs throughout the reporting period and has
fluctuated around the 9000 mark since April.
Investors continued to favor large, well-established companies during the
reporting period because of their uncertainty about how the Asian situation
would affect the U.S. markets. Generally, stocks of large-capitalization
companies made greater gains than stocks of small-cap firms.
Q Given this environment, how did you seek to meet the Fund's objective?
A We maintain a consistent strategy of identifying companies that we believe
have a combination of positive future fundamentals at attractive current
prices. By our definition, positive future fundamentals include at least one of
the following traits: consistent earnings growth; accelerating earnings growth;
better-than-expected fundamentals; or an underlying change in a company,
industry, or regulatory environment. We evaluate stocks one by one according to
these criteria and make purchases wherever we find good opportunities. This
approach to stock selection has served the Fund well through a broad range of
economic conditions, so we work hard to maintain this strategy during each
reporting period.
Q Which stocks supported the Fund's performance during the reporting period?
A Many of the Fund's best-performing stocks came from the retail segment of the
consumer distribution sector. We owned a number of retail stocks at the end
of last year, which put us in a good position when the Asian crisis flared up in
October. Most U.S. retail companies depend on domestic sales to generate
revenues, so their stock prices were largely insulated from overseas turmoil.
The combination of low unemployment, rising disposable income, and a flourishing
housing market has recently contributed to healthy retail sales. The portfolio
included substantial positions in Safeway, Dayton Hudson, and TJX Companies, all
of which performed well during the reporting period. We believe that a
continuation of slow but steady economic growth will support the fundamentals
for these stocks.
5
<PAGE>
The technology sector continued to be volatile, performing very well during
most of the reporting period but struggling toward the end. Earlier this year,
an oversupply of personal computers overwhelmed many areas of the technology
industry. Manufacturers such as Compaq Computer and IBM, which sell computers to
retailers and wholesalers for distribution, had to reduce production of new
computers until inventory supply and demand regained its balance. We decreased
our holdings in this area during that time, although the situation appears to be
on its way to resolution.
The majority of our technology assets were invested in computer software, data
storage, and telecommunications equipment. Software has been an outstanding
industry, because businesses have viewed software investments as necessary
productivity tools to remain competitive. BMC Software and Compuware have been
impressive holdings in this field. Data storage, the centralized storage system
that saves a company's computer files, has been a high-growth area as well. In
the age of e-mails and databases, companies need sophisticated storage systems
to access an increasing volume of information more frequently and efficiently. A
leader in data storage is EMC, which saw its stock price rise 63 percent during
the reporting period. Finally, telecom industries have seen explosive growth
from the demand for cellular phones, computer networking, and remote access
functions. Cisco Systems and Nokia performed well during the period.
Health-care stocks continued to make up a large portion of the Fund. Among
this group, Wellpoint Health Network, a health maintenance organization, was a
notable holding. In late 1997, HMOs were caught between accelerating costs and
an inability to raise prices, and many of them, including Wellpoint, saw a
decline in stock prices. Recently, however, many HMOs have been able to
implement rate increases that offset the rising cost of medical care, and the
result has been an upward trend in earnings. We purchased Wellpoint last year
because it is a high-quality company with good fundamentals, and we stuck with
it during the volatility of 1997. Our perseverance was rewarded, as the stock
price has appreciated 75 percent this year. Of course, not all stocks in the
portfolio performed as favorably, and there is no guarantee that any of these
stocks will perform as well in the future. For additional Fund portfolio
highlights, please refer to page eight.
Q What factors worked against the Fund?
A Two stocks, in particular, were disappointments during the reporting period.
The first was Cendant, a marketer and provider of consumer and business
services. In April, Cendant disclosed some accounting irregularities, which
caused the stock price to plummet more than 46 percent in one day. The stock had
been a sizable holding in the portfolio, and we continue to own it because we
believe the company has a strong market position and an attractive price.
A more substantial drag on the Fund was Philip Morris, our largest holding at
the end of the reporting period. Philip Morris and the rest of the tobacco
industry have been trying to settle a number of lawsuits. We increased our
position in the stock last year when a settlement that would have given tobacco
firms immunity to most future lawsuits appeared imminent. No deal could be
reached, however, and the settlement process has lingered into 1998. Amid these
factors, the stock price dropped 13 percent in the past six months.
Despite this price decline, we held on to Philip Morris for a number of
reasons. First, the stock fits our criteria of strong fundamentals at an
attractive price. Tobacco firms have typically been high-growth companies, and
Philip Morris is very inexpensive right now compared to its historical values.
Second, tobacco stocks have routinely suffered bouts of negative sentiment, but
these periods have usually been followed by outperformance in the stock price.
Based on these factors, we've maintained a sizable weighting in the stock.
6
<PAGE>
Q How did the Fund perform during the past six months?
A The Fund achieved a six-month total return of 16.77 percent/1/ (Class A
shares at net asset value) as of June 30, 1998. By comparison, the Standard &
Poor's 500-Stock Index returned 17.67 percent, and the Lipper Growth Fund Index,
which more closely resembles the Fund, returned 15.59 percent. The S&P 500-Stock
Index is a broad-based, unmanaged index that reflects the general performance of
the stock market, and the Lipper Growth Fund Index reflects the average
performance of the 30 largest growth funds.
These indices are statistical composites that do not include any commissions
or sales charges that would be paid by an investor purchasing the securities
represented by these indices. Please refer to the chart on page three for
additional Fund performance results.
Q What is your outlook for the Fund through the rest of the year?
A In the near term, we see little to disrupt the present state of affairs--
favorable inflation and solid, controlled economic growth should continue to
support the stock market. One important change, however, is that corporate
earnings estimates are beginning to slow down. In the last several years, many
companies implemented strategies to streamline their businesses and increase
profitability, and they've run out of easy ways to enhance their profits. While
we expect most companies to continue to show solid growth, the majority will not
be able to achieve the remarkable growth rates they enjoyed during the past
several years. We believe the few companies that are able to demonstrate such
growth levels will be the big winners in the long term.
The investment style of the Enterprise Fund is well suited for these
conditions, as we target those companies that we believe can demonstrate above-
average growth rates at reasonable prices. In this type of environment, where
superior earnings growth is harder to achieve, we feel the Enterprise Fund may
be able to add value to shareholders through disciplined stock selection.
/s/ Jeff D. New /s/ Michael Davis
Jeff D. New Michael Davis
Portfolio Manager Portfolio Comanager
/s/ Dennis J. McDonnell
Dennis J. McDonnell
President
Van Kampen Asset Management Inc.
7
Please see footnote on page three
<PAGE>
Portfolio Highlights
Van Kampen Enterprise Fund
<TABLE>
<CAPTION>
Portfolio Holdings as a Percentage of Long-Term Investments
Percentage of
Top Ten Holdings These Investments
as of June 30, 1998 Six Months Ago
<S> <C> <C>
Philip Morris Cos., Inc................................................ 3.2% ..................4.5%
Conseco, Inc........................................................... 2.2% ..................3.1%
Bristol-Myers Squibb Co................................................ 2.1% ..................2.1%
USA Waste Services, Inc................................................ 2.1% ..................1.4%
Chase Manhattan Corp................................................... 1.9% ..................1.1%
Safeway, Inc........................................................... 1.7% ..................1.6%
BMC Software, Inc...................................................... 1.5% ..................1.9%
Schering-Plough Corp................................................... 1.5% ..................1.3%
Travelers Group, Inc................................................... 1.5% ..................1.6%
Chancellor Media Corp., Class A........................................ 1.4% ..................1.3%
</TABLE>
Top Five Portfolio Holdings by Sector as a Percentage of Long-Term Investments
<TABLE>
<CAPTION>
As of June 30, 1998 As of December 31, 1997
<S> <C> <C> <C>
Technology......................16% Technology...............................16%
Finance.........................14% Finance..................................16%
Health Care.....................14% Consumer Distribution....................13%
Consumer Distribution...........12% Health Care..............................13%
Consumer Services...............11% Consumer Services........................13%
</TABLE>
8
<PAGE>
PORTFOLIO OF INVESTMENTS
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Description Shares Market Value
- ----------- -------- ------------
<S> <C> <C>
Common Stocks 89.8%
Consumer Distribution 11.6%
Brightpoint, Inc. (b).......................... 436,000 $ 6,322,000
Costco Cos., Inc. (b).......................... 312,000 19,675,500
CVS Corp....................................... 268,000 10,435,250
Dayton Hudson Corp............................. 690,000 33,465,000
Family Dollar Stores, Inc...................... 750,000 13,875,000
Federated Department Stores, Inc. (b).......... 256,800 13,819,050
Jacor Communications, Inc., Class A (b)........ 270,000 15,930,000
Kroger Co. (b)................................. 552,000 23,667,000
Lear Corp. (b)................................. 238,000 12,212,375
Lowe's Cos., Inc............................... 530,000 21,498,125
McKesson Corp.................................. 250,000 20,312,500
Proffitt's, Inc. (b)........................... 380,000 15,342,500
Rite Aid Corp.................................. 430,000 16,151,875
Ross Stores, Inc............................... 560,000 24,080,000
Safeway, Inc. (b).............................. 1,082,000 44,023,875
TJX Cos., Inc.................................. 1,460,000 35,222,500
------------
326,032,550
------------
Consumer Durables 2.0%
Dana Corp...................................... 470,000 25,145,000
Ford Motor Co.................................. 302,000 17,818,000
Maytag Corp.................................... 280,000 13,825,000
------------
56,788,000
------------
Consumer Non-Durables 6.1%
Borders Group, Inc. (b)........................ 413,000 15,281,000
Colgate-Palmolive Co........................... 250,000 22,000,000
Dial Corp...................................... 838,000 21,735,625
Jones Apparel Group, Inc. (b).................. 112,800 4,124,250
Liz Claiborne, Inc............................. 282,000 14,734,500
Philip Morris Cos., Inc........................ 2,073,000 81,624,375
Tommy Hilfiger Corp. (b)....................... 213,000 13,312,500
------------
172,812,250
------------
</TABLE>
9
See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1998 (Unaudited)
================================================================================
<TABLE>
<CAPTION>
Description Shares Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Consumer Services 10.8%
AccuStaff, Inc. (b)...................................... 654,000 $ 20,437,500
Brinker International, Inc. (b).......................... 985,000 18,961,250
CBS Corp. ............................................... 925,000 29,368,750
Cendant Corp. (b)........................................ 819,457 17,106,166
Chancellor Media Corp., Class A (b)...................... 732,000 36,348,375
CKE Restaurants, Inc. ................................... 370,000 15,262,500
Clear Channel Communications, Inc. (b)................... 70,350 7,676,943
FIRSTPLUS Financial Group, Inc. (b)...................... 445,000 16,020,000
Foodmaker, Inc. (b)...................................... 529,000 8,926,875
Gannett Co., Inc. ....................................... 250,000 17,765,625
Metamor Worldwide, Inc. (b).............................. 405,000 14,250,938
New York Times Co., Class A.............................. 315,000 24,963,750
Omnicom Group, Inc. ..................................... 550,000 27,431,250
Promus Hotel Corp. (b)................................... 200,000 7,700,000
Time Warner, Inc. ....................................... 260,000 22,213,750
Tribune Co. ............................................. 283,000 19,473,937
------------
303,907,609
------------
Energy 3.8%
British Petroleum Co. PLC - ADR (United Kingdom)......... 124,000 10,943,000
Coastal Corp. ........................................... 276,000 19,268,250
Cooper Cameron Corp. (b)................................. 231,000 11,781,000
El Paso Natural Gas Co. ................................. 710,000 27,157,500
Enron Corp. ............................................. 290,000 15,678,125
EVI Weatherford, Inc. (b)................................ 299,250 11,109,657
YPF Sociedad Anonima, Class D - ADR (Argentina).......... 319,000 9,589,937
------------
105,527,469
------------
Finance 14.1%
Allstate Corp. .......................................... 180,000 16,481,250
AMBAC Financial Group, Inc. ............................. 226,000 13,221,000
Associates First Capital Corp., Class A.................. 141,525 10,879,734
BankAmerica Corp. ....................................... 170,000 14,694,375
BankBoston Corp. ........................................ 434,000 24,141,250
Bear Stearns Cos., Inc. ................................. 265,000 15,071,875
Chase Manhattan Corp. ................................... 646,200 48,788,100
</TABLE>
See Notes to Financial Statements
10
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1998 (Unaudited)
================================================================================
<TABLE>
<CAPTION>
Description Shares Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Finance (Continued)
CMAC Investment Corp. ................................. 318,000 $ 19,557,000
Conseco, Inc. ......................................... 1,213,800 56,745,150
Federal National Mortgage Assn. ....................... 346,000 21,019,500
First Union Corp. ..................................... 327,070 19,051,829
Household International, Inc. ......................... 210,000 10,447,500
Merrill Lynch & Co., Inc. ............................. 150,000 13,837,500
MGIC Investment Corp. ................................. 133,000 7,589,313
SunAmerica, Inc. ...................................... 423,000 24,296,062
Torchmark, Inc. ....................................... 386,000 17,659,500
Travelers Group, Inc. ................................. 618,000 37,466,250
U.S. Bancorp........................................... 348,000 14,964,000
Washington Mutual, Inc. ............................... 300,000 13,031,250
------------
398,942,438
------------
Healthcare 14.1%
Abbott Laboratories, Inc. ............................. 270,000 11,036,250
Becton, Dickinson & Co. ............................... 190,000 14,748,750
Bristol-Myers Squibb Co. .............................. 460,000 52,871,250
ESC Medical Systems, Ltd. (b).......................... 522,000 17,617,500
Guidant Corp. ......................................... 239,000 17,043,688
Health Care & Retirement Corp. (b)..................... 400,000 15,775,000
Health Management Assn., Inc., Class A (b)............. 462,000 15,448,125
HEALTHSOUTH Corp. (b).................................. 950,000 25,353,125
Lincare Holdings, Inc. (b)............................. 576,000 24,228,000
Merck & Co., Inc. ..................................... 94,000 12,572,500
Mylan Laboratories, Inc. .............................. 450,000 13,528,125
Pfizer, Inc. .......................................... 100,000 10,868,750
Schering-Plough Corp. ................................. 424,000 38,849,000
Tenet Healthcare Corp. (b)............................. 477,000 14,906,250
Total Renal Care Holdings, Inc. (b).................... 611,785 21,106,582
United Healthcare Corp. ............................... 210,000 13,335,000
Universal Health Services, Inc., Class B (b)........... 315,000 18,388,125
Watson Pharmaceuticals, Inc. (b)....................... 494,000 23,063,625
Wellpoint Health Networks, Inc., Class A (b)........... 488,000 36,112,000
------------
396,851,645
------------
</TABLE>
See Notes to Financial Statements
11
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1998 (Unaudited)
================================================================================
<TABLE>
<CAPTION>
Description Shares Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Producer Manufacturing 6.1%
Aeroquip-Vickers, Inc. ................................ 147,100 $ 8,586,962
Illinois Tool Works, Inc. ............................. 219,000 14,604,563
Republic Services, Inc. (b)............................ 315,300 7,567,200
Textron, Inc. ......................................... 335,000 24,015,312
Tyco International Ltd. ............................... 552,000 34,776,000
United Technologies Corp. ............................. 311,000 28,767,500
USA Waste Services, Inc. (b)........................... 1,065,000 52,584,375
------------
170,901,912
------------
Raw Materials/Processing Industries 1.4%
Crompton & Knowles Corp. .............................. 533,000 13,424,938
Cytec Industries, Inc. (b)............................. 222,000 9,823,500
Du Pont (E. I.) de Nemours & Co. ...................... 210,000 15,671,250
------------
38,919,688
------------
Technology 15.8%
Ascend Communications, Inc. (b)........................ 350,000 17,346,875
BMC Software, Inc. (b)................................. 750,000 38,953,125
Cadence Design Systems, Inc. (b)....................... 560,000 17,500,000
Check Point Software Tech Ltd. ........................ 230,000 7,532,500
Cisco Systems, Inc. (b)................................ 204,000 18,780,750
Citrix Systems, Inc. (b)............................... 217,500 14,871,562
Computer Associates International, Inc. ............... 387,000 21,502,687
Computer Sciences Corp. (b)............................ 414,000 26,496,000
Compuware Corp. (b).................................... 517,000 26,431,625
Comverse Technology, Inc. (b).......................... 220,000 11,412,500
EMC Corp. (b).......................................... 809,000 36,253,312
Hexcel Corp. (b)....................................... 315,000 7,126,875
International Business Machines Corp. ................. 136,000 15,614,500
Linear Technology Corp. ............................... 160,000 9,650,000
Lucent Technologies, Inc. ............................. 132,000 10,980,750
Maxim Integrated Products, Inc. (b).................... 355,000 11,249,063
Microsoft Corp. (b).................................... 178,000 19,290,750
Networks Associates, Inc. (b).......................... 564,000 27,001,500
Nokia Corp. - ADR (Finland)............................ 322,000 23,365,125
Sanmina Corp. (b)...................................... 208,000 9,022,000
</TABLE>
12
See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1998 (Unaudited)
================================================================================
<TABLE>
<CAPTION>
Description Shares Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Technology (Continued)
SCI Systems, Inc. (b).................................. 447,000 $ 16,818,375
Sterling Software, Inc. (b)............................ 640,000 18,920,000
Storage Technology Corp. (b)........................... 340,000 14,747,500
Tellabs, Inc. (b)...................................... 228,000 16,330,500
Xilinx, Inc. (b)....................................... 255,000 8,670,000
--------------
445,867,874
--------------
Transportation 1.4%
AMR Corp. (b).......................................... 234,000 19,480,500
Continental Airlines, Inc., Class B (b)................ 348,300 21,202,762
--------------
40,683,262
--------------
Utilities 2.6%
Ameritech Corp. ....................................... 400,000 17,950,000
Bell Atlantic Corp. ................................... 432,000 19,710,000
CMS Energy Group....................................... 206,000 9,064,000
SBC Communications, Inc. .............................. 320,000 12,800,000
U.S. West, Inc. ....................................... 310,000 14,570,000
--------------
74,094,000
--------------
Total Long-Term Investments 89.8%
(Cost $1,626,075,603)........................................... 2,531,328,697
--------------
Short-Term Investments 11.7%
United States Government Agency Obligations 8.1%
Federal Home Loan Mortgage
($20,000,000 par, yielding 5.4419%, 07/06/98 maturity)............ 19,981,966
Federal Home Loan Mortgage
($34,000,000 par, yielding 5.4791%, 07/14/98 maturity) (a)........ 33,927,938
Federal Home Loan Mortgage
($20,000,000 par, yielding 5.4856%, 08/04/98 maturity) (a)........ 19,894,221
Federal Home Loan Mortgage
($30,000,000 par, yielding 5.4991%, 08/21/98 maturity) (a)........ 29,763,832
Federal Home Loan Mortgage
($25,000,000 par, yielding 5.4961%, 09/24/98 maturity) (a)........ 24,677,500
Federal National Mortgage Association
($25,000,000 par, yielding 5.4531%, 07/08/98 maturity) (a)........ 24,969,833
</TABLE>
13
See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
==================================================================================================================
Description Market Value
- ----------- --------------
<S> <C>
United States Government Agency Obligations (Continued)
Federal National Mortgage Association
($25,000,000 par, yielding 5.4849%, 07/17/98 maturity) (a)....................................... $ 24,935,541
Federal National Mortgage Association
($24,500,000 par, yielding 5.4545%, 08/07/98 maturity) (a)....................................... 24,360,608
Federal National Mortgage Association
($25,000,000 par, yielding 5.4961%, 09/25/98 maturity) (a)....................................... 24,677,500
--------------
Total United States Government Agency Obligations 8.1%........................................... 227,188,939
--------------
Commercial Paper 2.1%
General Electric Capital Corp. ($30,000,000 par, yielding 6.051%, 07/01/98 maturity)............. 29,994,789
Prudential Funding Corp. ($30,000,000 par, yielding 6.031%, 07/01/98 maturity)................... 29,994,873
--------------
Total Commercial Paper........................................................................... 59,989,662
--------------
Repurchase Agreements 1.5%
SBC Warburg, ($41,423,000 par collateralized by U.S. Government obligations in a
pooled cash account, dated 06/30/98, to be sold on 07/01/98 at $41,429,674) (a).................. 41,423,000
--------------
Total Short-Term Investments 11.7%
(Cost $328,595,445)............................................................................ 328,601,601
--------------
Total Investments 101.5%
(Cost $1,954,671,048).......................................................................... 2,859,930,298
Liabilities in Excess of Other Assets (1.5%)..................................................... (41,952,544)
--------------
Net Assets 100.0%................................................................................ $2,817,977,754
==============
</TABLE>
(a) Assets segregated for open futures transactions
(b) Non-income producing security as this stock currently does not declare
dividends.
14
See Notes to Financial Statements
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1998 (Unaudited)
================================================================================
<TABLE>
<S> <C>
ASSETS:
Total Investments (Cost $1,954,671,048)........................ $2,859,930,298
Cash 15,979
Receivables:
Fund Shares Sold............................................. 5,951,906
Dividends.................................................... 2,170,144
Other.......................................................... 200,600
--------------
Total Assets.............................................. 2,868,268,927
--------------
LIABILITIES:
Payables:
Fund Shares Repurchased...................................... 37,439,038
Investments Purchased........................................ 7,567,200
Distributor and Affiliates................................... 2,326,135
Variation Margin on Futures.................................. 1,181,508
Investment Advisory Fee...................................... 1,013,030
Income and Capital Gain Distributions........................ 204,255
Accrued Expenses............................................... 350,347
Trustees' Deferred Compensation and Retirement Plans........... 209,660
--------------
Total Liabilities......................................... 50,291,173
--------------
Net Assets..................................................... $2,817,977,754
==============
NET ASSETS CONSIST OF:
Capital........................................................ $1,808,562,607
Net Unrealized Appreciation.................................... 906,183,884
Accumulated Net Realized Gain.................................. 101,918,730
Accumulated Undistributed Net Investment Income................ 1,312,533
--------------
Net Assets..................................................... $2,817,977,754
==============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $2,013,724,767 and 99,988,912 shares of
beneficial interest issued and outstanding)............... $ 20.14
Maximum sales charge (5.75%* of offering price)........... 1.23
--------------
Maximum offering price to public.......................... $ 21.37
==============
Class B Shares:
Net asset value and offering price per share (Based on net
assets of $724,739,621 and 36,848,297 shares of beneficial
interest issued and outstanding).......................... $ 19.67
==============
Class C Shares:
Net asset value and offering price per share (Based on net
assets of $79,513,366 and 4,011,208 shares of beneficial
interest issued and outstanding).......................... $ 19.82
==============
</TABLE>
*On sales of $50,000 or more, the sales charge will be reduced.
See Notes to Financial Statements
15
<PAGE>
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1998 (Unaudited)
================================================================================
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends........................................................ $ 10,496,666
Interest......................................................... 5,767,442
------------
Total Income................................................ 16,264,108
------------
EXPENSES:
Investment Advisory Fee.......................................... 5,906,512
Distribution (12b-1) and Service Fees (Attributed to Classes A, B
and C of $1,926,498, $3,192,424 and $339,595 respectively)..... 5,458,517
Shareholder Services............................................. 2,451,375
Custody.......................................................... 67,729
Trustees' Fees and Expenses...................................... 28,914
Legal............................................................ 15,385
Other............................................................ 850,579
------------
Total Expenses.............................................. 14,779,011
------------
Net Investment Income............................................ $ 1,485,097
============
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Investments.................................................... $ 92,247,557
Futures........................................................ 16,015,152
------------
Net Realized Gain................................................ 108,262,709
------------
Unrealized Appreciation/Depreciation:
Beginning of the Period........................................ 615,523,511
------------
End of the Period:
Investments.................................................. 905,259,250
Futures...................................................... 924,634
------------
906,183,884
------------
Net Unrealized Appreciation During the Period.................... 290,660,373
------------
Net Realized and Unrealized Gain................................. $398,923,082
============
Net Increase in Net Assets From Operations....................... $400,408,179
============
</TABLE>
See Notes to Financial Statements
16
<PAGE>
Statement of Changes in Net Assets
For the Six Months Ended June 30, 1998 and
the Year Ended December 31, 1997 (Unaudited)
================================================================================
<TABLE>
<CAPTION>
For the Six Months Year Ended
Ended June 30,1998 December 31, 1997
- --------------------------------------------------------------------------------------
<S> <C> <C>
From Investment Activities:
Operations:
Net Investment Income............................. $ 1,485,097 $ 6,869,254
Net Realized Gain................................. 108,262,709 213,595,434
Net Unrealized Appreciation During the Period..... 290,660,373 255,744,332
-------------- --------------
Change in Net Assets from Operations.............. 400,408,179 476,209,020
-------------- --------------
Distributions from Net Investment Income:
Class A Shares.................................. (2,217,790) (5,354,359)
-------------- --------------
Distributions from Net Realized Gain:
Class A Shares.................................. (17,523,567) (162,962,079)
Class B Shares.................................. (6,059,005) (52,681,023)
Class C Shares.................................. (634,551) (5,428,380)
-------------- --------------
(24,217,123) (221,071,482)
-------------- --------------
Total Distributions.............................. (26,434,913) (226,425,841)
-------------- --------------
Net Change in Net Assets from Investment Activities 373,973,266 249,783,179
-------------- --------------
From Capital Transactions:
Proceeds from Shares Sold......................... 2,540,490,376 3,595,442,347
Net Asset Value of Shares Issued Through Dividend
Reinvestment.................................... 23,714,122 206,216,075
Cost of Shares Repurchased........................ (2,425,346,126) (3,359,260,453)
-------------- --------------
Net Change in Net Assets from Capital Transactions 138,858,372 442,397,969
-------------- --------------
Total Increase in Net Assets...................... 512,831,638 692,181,148
Net Assets:
Beginning of the Period........................... 2,305,146,116 1,612,964,968
-------------- --------------
End of the Period (Including accumulated net
investment income of $1,312,533 and $2,045,226,
respectively)................................... $2,817,977,754 $2,305,146,116
============== ==============
</TABLE>
See Notes to Financial Statements
17
<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
Ended Year Ended December 31,
June 30, ---------------------------------------
Class A Shares 1998 1997 1996 1995 1994
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of the Period...... $17.414 $15.120 $ 13.07 $ 11.43 $ 12.23
------- ------- ------- ------- -------
Net Investment Income....................... .030 .087 .086 .08 .08
Net Realized and Unrealized Gain/Loss....... 2.892 4.113 2.942 3.7325 (.1225)
------- ------- ------- ------- -------
Total from Investment Operations.............. 2.922 4.200 3.028 3.8125 (.0425)
------- ------- ------- ------- -------
Less:
Distributions from Net Investment Income.... .022 .060 .077 .0725 .085
Distributions from Net Realized Gain........ .175 1.846 .901 2.10 .6725
------- ------- ------- ------- -------
Total Distributions........................... .197 1.906 .978 2.1725 .7575
------- ------- ------- ------- -------
Net Asset Value, End of the Period............ $20.139 $17.414 $15.120 $ 13.07 $ 11.43
======= ======= ======= ======= =======
Total Return (a).............................. 16.77%* 28.55% 23.48% 33.92% (.18%)
Net Assets at End of the Period (In millions). $2,013.7 $1,706.1 $1,276.9 $1,035.7 $ 749.7
Ratio of Expenses to Average Net Assets (b)... .93% .93% 1.01% .98% 1.05%
Ratio of Net Investment Income to
Average Net Assets (b)...................... .34% .54% .60% .59% .71%
Portfolio Turnover............................ 25%* 73% 110% 152% 176%
</TABLE>
* Non-Annualized
(a) Total Return is based upon net asset value which does not include payment of
maximum sales charge or contingent deferred sales charge.
(b) For the year ended December 31, 1996, the impact on the Ratios of Expenses
and Net Investment Income to Average Net Assets due to Van Kampen's
reimbursement of certain expenses was less than 0.01%.
See Notes to Financial Statements
18
<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
Ended Year Ended December 31,
June 30, ---------------------------------------
Class B Shares 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of the Period....... $ 17.059 $14.909 $ 12.94 $11.37 $ 12.19
-------- ------- ------- ------ -------
Net Investment Loss.......................... (.031) (.021) (.012) (.03) (.01)
Net Realized and Unrealized Gain/Loss........ 2.815 4.017 2.882 3.70 (.1375)
-------- ------- ------- ------ -------
Total from Investment Operations............... 2.784 3.996 2.870 3.67 (.1475)
-------- ------- ------- ------ -------
Less Distributions from Net Realized Gain...... .175 1.846 .901 2.10 .6725
-------- ------- ------- ------ -------
Net Asset Value, End of the Period............. $ 19.668 $17.059 $14.909 $12.94 $ 11.37
======== ======= ======= ====== =======
Total Return (a)............................... 16.34%* 27.50% 22.48% 32.82% (1.07%)
Net Assets at End of the Period (In millions).. $ 724.7 $ 542.2 $ 305.6 $184.1 $ 93.7
Ratio of Expenses to Average Net Assets (b).... 1.73% 1.75% 1.82% 1.81% 1.89%
Ratio of Net Investment Income to
Average Net Assets (b)....................... (.47%) (.29%) (.21%) (.24%) (.11%)
Portfolio Turnover............................. 25%* 73% 110% 152% 176%
</TABLE>
* Non-Annualized
(a) Total Return is based upon net asset value which does not include payment of
maximum sales charge or contingent deferred sales charge.
(b) For the year ended December 31, 1996, the impact on the Ratios of Expenses
and Net Investment Income to Average Net Assets due to Van Kampen's
reimbursement of certain expenses was less than 0.01%.
See Notes to Financial Statements
19
<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
Ended Year Ended December 31,
June 30, ---------------------------------------
Class C Shares 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of the Period...................... $ 17.191 $15.008 $ 13.01 $11.42 $ 12.23
-------- ------- ------- ------ -------
Net Investment Loss.......................... (.028) (.023) (.013) (.03) (.01)
Net Realized and Unrealized Gain/Loss........ 2.835 4.052 2.912 3.72 (.1275)
-------- ------- ------- ------ -------
Total from Investment Operations............... 2.807 4.029 2.899 3.69 (.1375)
Less Distributions from Net Realized Gain...... .175 1.846 .901 2.10 .6725
-------- ------- ------- ------ -------
Net Asset Value, End of the Period............. $ 19.823 $17.191 $15.008 $13.01 $ 11.42
======== ======= ======= ====== =======
Total Return (a)............................... 16.39%* 27.51% 22.60% 32.85% (.99%)
Net Assets at End of the Period (In millions).. $ 79.5 $ 56.9 $ 30.4 $ 15.7 $ 7.4
Ratio of Expenses to Average Net Assets (b).... 1.73% 1.75% 1.82% 1.80% 1.90%
Ratio of Net Investment Income to Average
Net Assets (b)............................... (.47%) (.29%) (.22%) (.23%) (.12%)
Portfolio Turnover............................. 25%* 73% 110% 152% 176%
</TABLE>
* Non-Annualized
(a) Total Return is based upon net asset value which does not include payment of
maximum sales charge or contingent deferred sales charge.
(b) For the year ended December 31, 1996, the impact on the Ratios of Expenses
and Net Investment Income to Average Net Assets due to Van Kampen's
reimbursement of certain expenses was less than 0.01%.
See Notes to Financial Statements
20
<PAGE>
Notes to Financial Statements
June 30, 1998 (Unaudited)
================================================================================
1. Significant Accounting Policies
Van Kampen Enterprise Fund, formerly known as Van Kampen American Capital
Enterprise Fund, (the "Fund") is organized as a Delaware business trust, and is
registered as a diversified open-end management 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
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent 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 exchange
are valued at their sale price as of the close of such securities exchange.
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 in accordance with procedures
established in good faith by the Board of Trustees. Short-term securities with
remaining maturities of 60 days or less are valued 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.
The Fund may invest in repurchase agreements, which are short-term investments
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 repurchase agreements, or transfer uninvested cash
balances into a pooled cash account along with other investment companies
advised by Van Kampen Asset Management Inc. (the "Adviser") or its affiliates,
the daily aggregate of which is invested in repurchase agreements. Repurchase
agreements are fully 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.
21
<PAGE>
Notes to Financial Statements (Continued)
June 30, 1998 (Unaudited)
================================================================================
C. Income and Expenses--Dividend income is recorded on the ex-dividend date and
interest income is recorded on an accrual basis. Original issue discounts on
debt securities purchased are amortized over the expected life of each
applicable security. Premiums on debt securities are not amortized. Expenses of
the Fund are allocated on a pro rata basis to each class of shares, except for
distribution and service fees and transfer agency costs which are unique to each
class of shares.
D. Federal Income Taxes--It is the Fund's policy to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no provision for federal income taxes is required.
At June 30, 1998, for federal income tax purposes, cost of long- and short-
term investments is $1,954,993,131; the aggregate gross unrealized appreciation
is $937,000,822 and the aggregate gross unrealized depreciation is $31,139,021,
resulting in net unrealized appreciation including open futures of $905,861,801.
Net realized gains or losses may differ for financial purposes primarily as a
result of the deferral of losses for tax purposes resulting from wash sales and
the mark to market of open future contracts at December 31, 1997.
E. Distribution of Income and Gains--The Fund declares and pays dividends
annually 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 included
in ordinary income for tax purposes.
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, 1998, the Fund recognized expenses of
approximately $15,400 representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom (Illinois), counsel to the Fund, of which a trustee of the
Fund is an affiliated person.
22
<PAGE>
Notes to Financial Statements (Continued)
June 30, 1998 (Unaudited)
================================================================================
For the six months ended June 30, 1998, the Fund recognized expenses of
approximately $271,900 representing Van Kampen Funds Inc.'s or its affiliates'
(collectively "Van Kampen") cost of providing accounting services to the Fund.
Van Kampen Investor Services Inc. ("VKIS"), an affiliate of the Adviser,
serves as the shareholder servicing agent for the Fund. For the six months ended
June 30, 1998, the Fund recognized expenses of approximately $1,974,400.
Beginning in 1998, the transfer agency fees are determined through negotiations
with the Fund's Board of Trustees and are based on competitive market
benchmarks.
Certain officers and trustees of the Fund are also officers and directors of
Van Kampen. The Fund does not compensate its officers or trustees who are
officers of Van Kampen.
The Fund provides deferred compensation and retirement plans for its trustees
who are not officers of Van Kampen. Under the deferred compensation plan,
trustees may elect to defer all or a portion of their compensation to a later
date. Benefits under the retirement plan are payable for a ten-year period and
are based upon each trustee's years of service to the Fund. The maximum annual
benefit per trustee under the plan is $2,500.
3. Capital Transactions
The Fund has outstanding three classes of shares of beneficial interest, 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, 1998, capital aggregated $1,185,421,168, $560,475,176 and
$62,666,263 for Classes A, B, and C, respectively. For the six months ended June
30, 1998, transactions were as follows:
<TABLE>
<CAPTION>
Shares Value
================================================================
<S> <C> <C>
Sales:
Class A.......................... 108,428,454 $2,061,278,957
Class B.......................... 23,242,261 435,645,729
Class C.......................... 2,311,642 43,565,690
----------- --------------
Total Sales........................ 133,982,357 $2,540,490,376
=========== ==============
Dividend Reinvestment:
Class A.......................... 882,393 $ 17,374,290
Class B.......................... 298,657 5,755,123
Class C.......................... 30,109 584,709
----------- --------------
Total Dividend Reinvestment........ 1,211,159 $ 23,714,122
=========== ==============
</TABLE>
23
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1998 (Unaudited)
================================================================================
<TABLE>
<CAPTION>
Shares Value
================================================================================
<S> <C> <C>
Repurchases:
Class A.................................... (107,291,051) $(2,044,551,923)
Class B.................................... (18,476,197) (349,771,247)
Class C.................................... (1,640,808) (31,022,956)
------------ ---------------
Total Repurchases............................ (127,408,056) $(2,425,346,126)
============ ===============
</TABLE>
At December 31, 1997, capital aggregated $1,151,319,844, $468,845,571 and
$49,538,820 for Classes A, B, and C, respectively. For the year ended December
31, 1997, transactions were as follows:
<TABLE>
<CAPTION>
Shares Value
================================================================================
<S> <C> <C>
Sales:
Class A.................................... 163,160,235 $ 2,870,082,714
Class B.................................... 37,384,289 643,957,979
Class C.................................... 4,816,449 81,401,654
------------ ---------------
Total Sales.................................. 205,360,973 $ 3,595,442,347
============ ===============
Dividend Reinvestment:
Class A.................................... 9,059,256 $ 151,406,608
Class B.................................... 3,035,164 49,805,679
Class C.................................... 302,489 5,003,788
------------ ---------------
Total Dividend Reinvestment.................. 12,396,909 $ 206,216,075
============ ===============
Repurchases:
Class A.................................... (158,703,531) $(2,797,304,772)
Class B.................................... (29,133,822) (497,604,258)
Class C.................................... (3,835,319) (64,351,423)
------------ ---------------
Total Repurchases............................ (191,672,672) $(3,359,260,453)
============ ===============
</TABLE>
Class B and C shares are offered without a front end sales charge, but are
subject to a contingent deferred sales charge (CDSC). Class B shares will
automatically convert to Class A shares after the eighth year following
purchase. The CDSC for Class B and C shares will be imposed on most redemptions
made within five years of the purchase for Class B and one year of the purchase
for Class C as detailed in the following schedule.
24
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1998 (Unaudited)
================================================================================
<TABLE>
<CAPTION>
Contingent Deferred
Sales Charge
-------------------
<S> <C> <C>
Year of Redemption Class B Class 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, 1998, Van Kampen, as Distributor for the
Fund, received commissions on sales of the Fund's Class A shares of
approximately $486,700 and CDSC on redeemed shares of approximately $479,200.
Sales charges do not represent expenses of the Fund.
4. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $674,615,515 and $605,724,505,
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 holdings,
including derivative instruments, are marked to market each day with the change
in value reflected in the unrealized appreciation/depreciation. Upon
disposition, a realized gain or loss is recognized accordingly, except when
taking delivery of a security underlying a futures contract. In this instance,
the recognition of gain or loss is postponed until the disposal of the security
underlying the futures contract.
During the period, the Fund invested in futures contracts, a type of
derivative. A futures contract is an agreement involving the delivery of a
particular 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
underlying the index or to manage the Fund's overall exposure to the equity
markets.
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 could be based upon
25
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1998 (Unaudited)
================================================================================
changes in the value of the contract (the variation margin). The potential risk
of loss associated with a futures contract is in excess of the variation margin
reflected on the Statement of Assets and Liabilities.
Transactions in futures contracts for the six months ended June 30, 1998, were
as follows:
<TABLE>
<CAPTION>
Contracts
===============================================================================
<S> <C>
Outstanding at December 31, 1997..................................... 800
Futures Opened....................................................... 1,560
Futures Closed....................................................... (1,530)
------
Outstanding at June 30, 1998......................................... 830
======
</TABLE>
The futures contracts outstanding at June 30, 1998, and the description and
unrealized appreciation are as follows:
<TABLE>
<CAPTION>
Unrealized
Contracts Appreciation
===============================================================================
<S> <C> <C>
Long Contracts--Sep 1998 S&P 500 Index Future
(Current Notional Value of $285,750 per contract).. 830 $924,634
=== ========
</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 (collectively
the "Plans"). The Plans govern payments for the distribution of the Fund's
shares, ongoing shareholder services and maintenance of shareholder accounts.
Annual fees under the Plans of up to .25% of Class A net assets and 1.00% each
of Class B and Class C net assets are accrued daily. Included in these fees for
the six months ended June 30, 1998, are payments retained by Van Kampen of
approximately $2,803,900.
26
<PAGE>
VAN KAMPEN FUNDS
EQUITY FUNDS
Domestic
Aggressive Equity
Aggressive Growth
American Value
Comstock
Emerging Growth
Enterprise
Equity Growth
Equity Income
Growth
Growth and Income
Harbor
Pace
Real Estate Securities
U.S. Real Estate
Utility
Value
International/Global
Asian Growth
Emerging Markets
Global Equity
Global Equity Allocation
Global Managed Assets
International Magnum
Latin American
FIXED-INCOME FUNDS
Income
Corporate Bond
Global Fixed Income
Global Government Securities
Government Securities
High Income Corporate Bond
High Yield
High Yield & Total Return
Limited Maturity Government
Short-Term Global Income
Strategic Income
U.S. Government
U.S. Government Trust for Income
Worldwide High Income
Tax Exempt Income
California Insured Tax Free
Florida Insured Tax Free Income
High Yield Municipal
Insured Tax Free Income
Intermediate Term Municipal Income
Municipal Income
New York Tax Free Income
Pennsylvania Tax Free Income
Tax Free High Income
Capital Preservation and
Senior Loan Funds
Prime Rate Income Trust
Reserve
Senior Floating Rate
Tax Free Money
To find out more about any of these funds, ask your financial adviser for a
prospectus, which contains more complete information, including sales charges,
risks, and expenses. Please read it carefully before you invest or send money.
To view a current Van Kampen fund prospectus or to receive additional fund
information, choose from one of the following:
. visit our web site at www.van-kampen.com -- to view prospectuses, select
Investors' Place, then Download a Prospectus
. call us at 1-800-341-2911 weekdays from 7:00 a.m. to 7:00 p.m. Central time
(Telecommunications Device for the Deaf users, call 1-800-421-2833)
. e-mail us by visiting www.van-kampen.com and selecting Investors' Place
27
<PAGE>
VAN KAMPEN ENTERPRISE FUND
Board of Trustees
J. Miles Branagan
Richard M. DeMartini*
Linda Hutton Heagy
R. Craig Kennedy
Jack E. Nelson
Don G. Powell*
Phillip B. Rooney
Fernando Sisto
Wayne W. Whalen*--Chairman
Officers
Dennis J. McDonnell*
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
Peter W. Hegel*
Paul R. Wolkenberg*
Vice Presidents
Investment Adviser
Van Kampen
Asset Management Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Distributor
Van Kampen Funds Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Shareholder Servicing Agent
Van Kampen 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 (Illinois)
333 West Wacker Drive
Chicago, Illinois 60606
Independent Accountants
PricewaterhouseCoopers LLP
200 E. Randolph Drive
Chicago, IL 60601
* "Interested" persons of the Fund, as defined in the Investment Company Act of
1940.
(C) Van Kampen Funds Inc., 1998
All rights reserved.
/SM/ denotes a service mark of Van Kampen Funds 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. After December 31, 1998, the report, if used with
prospective investors, must be accompanied by a quarterly performance update.
28
<PAGE>
Van Kampen Funds Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 11
<NAME> ENTERPRISE CLASS A
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 1,954,671,048 <F1>
<INVESTMENTS-AT-VALUE> 2,859,930,298 <F1>
<RECEIVABLES> 8,122,050 <F1>
<ASSETS-OTHER> 0 <F1>
<OTHER-ITEMS-ASSETS> 216,579 <F1>
<TOTAL-ASSETS> 2,868,268,927 <F1>
<PAYABLE-FOR-SECURITIES> 7,567,200 <F1>
<SENIOR-LONG-TERM-DEBT> 0 <F1>
<OTHER-ITEMS-LIABILITIES> 42,723,973 <F1>
<TOTAL-LIABILITIES> 50,291,173 <F1>
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,185,421,168
<SHARES-COMMON-STOCK> 99,988,912
<SHARES-COMMON-PRIOR> 97,969,116
<ACCUMULATED-NII-CURRENT> 1,312,533 <F1>
<OVERDISTRIBUTION-NII> 0 <F1>
<ACCUMULATED-NET-GAINS> 101,918,730 <F1>
<OVERDISTRIBUTION-GAINS> 0 <F1>
<ACCUM-APPREC-OR-DEPREC> 906,183,884 <F1>
<NET-ASSETS> 2,013,724,767
<DIVIDEND-INCOME> 10,496,666 <F1>
<INTEREST-INCOME> 5,767,442 <F1>
<OTHER-INCOME> 0 <F1>
<EXPENSES-NET> (14,779,011) <F1>
<NET-INVESTMENT-INCOME> 1,485,097 <F1>
<REALIZED-GAINS-CURRENT> 108,262,709 <F1>
<APPREC-INCREASE-CURRENT> 290,660,373 <F1>
<NET-CHANGE-FROM-OPS> 400,408,179 <F1>
<EQUALIZATION> 0 <F1>
<DISTRIBUTIONS-OF-INCOME> (2,217,790)
<DISTRIBUTIONS-OF-GAINS> (17,523,567)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 108,428,454
<NUMBER-OF-SHARES-REDEEMED> (107,291,051)
<SHARES-REINVESTED> 882,393
<NET-CHANGE-IN-ASSETS> 307,670,030
<ACCUMULATED-NII-PRIOR> 2,045,226 <F1>
<ACCUMULATED-GAINS-PRIOR> 17,873,144 <F1>
<OVERDISTRIB-NII-PRIOR> 0 <F1>
<OVERDIST-NET-GAINS-PRIOR> 0 <F1>
<GROSS-ADVISORY-FEES> 5,906,512 <F1>
<INTEREST-EXPENSE> 0 <F1>
<GROSS-EXPENSE> 14,779,011 <F1>
<AVERAGE-NET-ASSETS> 1,887,396,485
<PER-SHARE-NAV-BEGIN> 17.414
<PER-SHARE-NII> 0.030
<PER-SHARE-GAIN-APPREC> 2.892
<PER-SHARE-DIVIDEND> (0.022)
<PER-SHARE-DISTRIBUTIONS> (0.175)
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 20.139
<EXPENSE-RATIO> 0.93
<AVG-DEBT-OUTSTANDING> 0 <F1>
<AVG-DEBT-PER-SHARE> 0 <F1>
<FN>
<F1> This item relates to the Fund on a composite basis and not on a class
basis
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 12
<NAME> ENTERPRISE CLASS B
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 1,954,671,048 <F1>
<INVESTMENTS-AT-VALUE> 2,859,930,298 <F1>
<RECEIVABLES> 8,122,050 <F1>
<ASSETS-OTHER> 0 <F1>
<OTHER-ITEMS-ASSETS> 216,579 <F1>
<TOTAL-ASSETS> 2,868,268,927 <F1>
<PAYABLE-FOR-SECURITIES> 7,567,200 <F1>
<SENIOR-LONG-TERM-DEBT> 0 <F1>
<OTHER-ITEMS-LIABILITIES> 42,723,973 <F1>
<TOTAL-LIABILITIES> 50,291,173 <F1>
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 560,475,176
<SHARES-COMMON-STOCK> 36,848,297
<SHARES-COMMON-PRIOR> 31,783,576
<ACCUMULATED-NII-CURRENT> 1,312,533 <F1>
<OVERDISTRIBUTION-NII> 0 <F1>
<ACCUMULATED-NET-GAINS> 101,918,730 <F1>
<OVERDISTRIBUTION-GAINS> 0 <F1>
<ACCUM-APPREC-OR-DEPREC> 906,183,884 <F1>
<NET-ASSETS> 724,739,621
<DIVIDEND-INCOME> 10,496,666 <F1>
<INTEREST-INCOME> 5,767,442 <F1>
<OTHER-INCOME> 0 <F1>
<EXPENSES-NET> (14,779,011) <F1>
<NET-INVESTMENT-INCOME> 1,485,097 <F1>
<REALIZED-GAINS-CURRENT> 108,262,709 <F1>
<APPREC-INCREASE-CURRENT> 290,660,373 <F1>
<NET-CHANGE-FROM-OPS> 400,408,179 <F1>
<EQUALIZATION> 0 <F1>
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (6,059,005)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 23,242,261
<NUMBER-OF-SHARES-REDEEMED> (18,476,197)
<SHARES-REINVESTED> 298,657
<NET-CHANGE-IN-ASSETS> 182,554,424
<ACCUMULATED-NII-PRIOR> 2,045,226 <F1>
<ACCUMULATED-GAINS-PRIOR> 17,873,144 <F1>
<OVERDISTRIB-NII-PRIOR> 0 <F1>
<OVERDIST-NET-GAINS-PRIOR> 0 <F1>
<GROSS-ADVISORY-FEES> 5,906,512 <F1>
<INTEREST-EXPENSE> 0 <F1>
<GROSS-EXPENSE> 14,779,011 <F1>
<AVERAGE-NET-ASSETS> 644,379,571
<PER-SHARE-NAV-BEGIN> 17.059
<PER-SHARE-NII> (0.031)
<PER-SHARE-GAIN-APPREC> 2.815
<PER-SHARE-DIVIDEND> 0.000
<PER-SHARE-DISTRIBUTIONS> (0.175)
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 19.668
<EXPENSE-RATIO> 1.73
<AVG-DEBT-OUTSTANDING> 0 <F1>
<AVG-DEBT-PER-SHARE> 0 <F1>
<FN>
<F1> This item relates to the Fund on a composite basis and not on a class
basis
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 13
<NAME> ENTERPRISE CLASS C
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 1,954,671,048 <F1>
<INVESTMENTS-AT-VALUE> 2,859,930,298 <F1>
<RECEIVABLES> 8,122,050 <F1>
<ASSETS-OTHER> 0 <F1>
<OTHER-ITEMS-ASSETS> 216,579 <F1>
<TOTAL-ASSETS> 2,868,268,927 <F1>
<PAYABLE-FOR-SECURITIES> 7,567,200 <F1>
<SENIOR-LONG-TERM-DEBT> 0 <F1>
<OTHER-ITEMS-LIABILITIES> 42,723,973 <F1>
<TOTAL-LIABILITIES> 50,291,173 <F1>
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 62,666,263
<SHARES-COMMON-STOCK> 4,011,208
<SHARES-COMMON-PRIOR> 3,310,265
<ACCUMULATED-NII-CURRENT> 1,312,533 <F1>
<OVERDISTRIBUTION-NII> 0 <F1>
<ACCUMULATED-NET-GAINS> 101,918,730 <F1>
<OVERDISTRIBUTION-GAINS> 0 <F1>
<ACCUM-APPREC-OR-DEPREC> 906,183,884 <F1>
<NET-ASSETS> 79,513,366
<DIVIDEND-INCOME> 10,496,666 <F1>
<INTEREST-INCOME> 5,767,442 <F1>
<OTHER-INCOME> 0 <F1>
<EXPENSES-NET> (14,779,011) <F1>
<NET-INVESTMENT-INCOME> 1,485,097 <F1>
<REALIZED-GAINS-CURRENT> 108,262,709 <F1>
<APPREC-INCREASE-CURRENT> 290,660,373 <F1>
<NET-CHANGE-FROM-OPS> 400,408,179 <F1>
<EQUALIZATION> 0 <F1>
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (634,551)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,311,642
<NUMBER-OF-SHARES-REDEEMED> (1,640,808)
<SHARES-REINVESTED> 30,109
<NET-CHANGE-IN-ASSETS> 22,607,184
<ACCUMULATED-NII-PRIOR> 2,045,226 <F1>
<ACCUMULATED-GAINS-PRIOR> 17,873,144 <F1>
<OVERDISTRIB-NII-PRIOR> 0 <F1>
<OVERDIST-NET-GAINS-PRIOR> 0 <F1>
<GROSS-ADVISORY-FEES> 5,906,512 <F1>
<INTEREST-EXPENSE> 0 <F1>
<GROSS-EXPENSE> 14,779,011 <F1>
<AVERAGE-NET-ASSETS> 68,555,137
<PER-SHARE-NAV-BEGIN> 17.191
<PER-SHARE-NII> (0.028)
<PER-SHARE-GAIN-APPREC> 2.835
<PER-SHARE-DIVIDEND> 0.000
<PER-SHARE-DISTRIBUTIONS> (0.175)
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 19.823
<EXPENSE-RATIO> 1.73
<AVG-DEBT-OUTSTANDING> 0 <F1>
<AVG-DEBT-PER-SHARE> 0 <F1>
<FN>
<F1> This item relates to the Fund on a composite basis and not on a class
basis
</FN>
</TABLE>
