<PAGE> 1
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders........................... 1
Economic Snapshot................................ 2
Performance Results.............................. 3
Portfolio Management Review...................... 4
Glossary of Terms................................ 7
Portfolio Highlights............................. 8
Portfolio of Investments......................... 9
Statement of Assets and Liabilities.............. 14
Statement of Operations.......................... 15
Statement of Changes in Net Assets............... 16
Financial Highlights............................. 17
Notes to Financial Statements.................... 20
</TABLE>
ENT SAR 8/99
NOT FDIC INSURED. MAY LOSE VALUE. NO BANK GUARANTEE.
<PAGE> 2
LETTER TO SHAREHOLDERS
July 20, 1999
Dear Shareholder,
With the volatility that we've experienced recently in many financial
markets, some investors have sold securities because of uncertainty about where
the markets were going, only to be left rethinking whether they made the right
decision. We've witnessed this kind of market activity numerous times over the
past several years, sparked by concerns such as the impact of the Asian economic
crisis, high stock valuations, or, most recently, the stability of many
high-flying technology companies. While these fears eventually subsided,
investors who may have sold during this period were unable to reap the benefits
of the subsequent rally. That's partly because most of the recent big gains
happened in relatively short periods of time. This kind of volatility--and the
danger of making short-term decisions--highlights the importance of investing
for the long term, in accordance with your individual financial objectives.
Although the worst of the Asian crisis appears to be behind us, new concerns
are always emerging. In the coming months, we'll likely hear more about how the
year 2000 computer problem may affect the markets or that we're overdue for a
correction. While the markets could undoubtedly suffer as a result of these or
any number of other events, we encourage you to focus on your long-term
investment goals. Although nothing is certain, history has shown us that over
time, the markets tend to recover--and most investors want to be positioned to
take advantage of any recovery.
If you have concerns about market volatility or questions about how your
portfolio is structured to respond to these events, we encourage you to contact
your financial advisor. Your advisor can talk with you about sustaining a
long-term investment plan through a variety of market conditions. We hope that
Van Kampen Funds will play an important role as you and your advisor build a
portfolio designed to help you weather what the markets have in store.
Sincerely,
[SIG]
Richard F. Powers, III
Chairman
Van Kampen Asset Management Inc.
[SIG]
Dennis J. McDonnell
President
Van Kampen Asset Management Inc.
1
<PAGE> 3
ECONOMIC SNAPSHOT
The strength of the domestic economy continued to defy expectations in the
first half of 1999, although it finally began to show signs of slowing down.
Strong growth, healthy employment, and low inflation all contributed to the
favorable economic environment.
STRONG ECONOMIC GROWTH
The nation's gross domestic product rose at an impressive rate of 4.3
percent during the first quarter of 1999, but fell to 2.3 percent in the second
quarter. The first-quarter expansion was fueled by an increase in consumer
spending, which dropped to more moderate levels later in the reporting period.
POSITIVE EMPLOYMENT ENVIRONMENT
In May, the unemployment rate dropped to 4.2 percent--its lowest level in
more than 30 years. Throughout the reporting period, unemployment remained low,
the number of jobs grew, and wages rose. The labor market remained especially
tight in the service industry and most urban areas.
LOW INFLATION
Inflation remained low throughout most of the reporting period, although a
sharp increase in oil prices contributed to a spike in April's consumer price
index report (CPI). Following this up-tick, the Federal Reserve raised interest
rates 0.25 percent on June 30. Although the Fed had expressed a bias toward a
series of rate increases, May's tame CPI report prompted it to drop this bias
when announcing the June rate increase.
ECONOMIC OUTLOOK
Our outlook for the economy suggests that the moderate slowdown may
continue, bringing the economy back to historically normal growth levels.
Healthy job growth, which has been supporting the consumer confidence and
spending levels, showed signs of faltering toward the end of the reporting
period. However, a renewed optimism for corporate earnings, low unemployment,
and a vibrant housing market should provide some balance against a slower job
growth rate.
[LINE GRAPH]
INTEREST RATES AND INFLATION
June 30, 1997, through June 30, 1999
<TABLE>
<CAPTION>
INTEREST RATES INFLATION
-------------- ---------
<S> <C> <C>
Jun 1997 6.5000 2.3000
6.0000 2.2000
5.5000 2.2000
Sep 1997 6.2500 2.2000
5.7500 2.1000
5.6875 1.8000
Dec 1997 6.5000 1.7000
5.5625 1.6000
5.6250 1.4000
Mar 1998 6.1250 1.4000
5.6250 1.4000
5.6875 1.7000
Jun 1998 6.0000 1.7000
5.5625 1.7000
5.9375 1.6000
Sep 1998 5.7500 1.5000
5.2500 1.5000
4.8750 1.5000
Dec 1998 4.0000 1.6000
4.8125 1.7000
4.8750 1.6000
Mar 1999 5.1250 1.7000
4.9375 2.3000
4.5000 2.1000
Jun 1999 4.0000 2.0000
</TABLE>
Interest rates are represented by the closing midline federal funds rate
on the last day of each month. Inflation is indicated by the annual
percent change of the Consumer Price Index for all urban consumers at
the end of each month.
2
<PAGE> 4
PERFORMANCE RESULTS FOR THE PERIOD ENDED JUNE 30, 1999
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)... 6.88% 6.45% 6.45%
Six-month total return(2)................ 0.73% 1.45% 5.45%
One-year total return(2)................. 6.59% 7.22% 11.17%
Five-year average annual total
return(2)................................ 22.77% 23.09% 23.25%
Ten-year average total return(2)......... 16.80% N/A N/A
Life-of-Fund average annual total
return(2)................................ 13.61% 18.08% 19.25%
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 Comparative Performance section of the current prospectus. An investment
should be made with an understanding of the risks that an investment in equity
securities entails. These include the risk that the financial condition of the
issuers of the securities in the portfolio, or the condition of the stock market
in general, may worsen and therefore, the value of Fund shares may decline. 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.
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> 5
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, senior portfolio manager, who has managed
the Fund since September 1994 and worked in the investment industry since 1987.
He is joined by Michael Davis and Mary Jayne Maly, portfolio managers, and
Stephen L. Boyd, chief investment officer for equity investments. The following
excerpts reflect their views on the Fund's performance during the six months
ended June 30, 1999.
Q WHAT MARKET FACTORS AFFECTED THE FUND DURING THE REPORTING PERIOD?
A As has been its trademark recently, the stock market was volatile during
the first six months of 1999. The Dow Jones Industrial Average passed two
significant milestones during the reporting period--10,000 in late March
and 11,000 in early May. Investors' anticipation of an interest-rate increase
placed downward pressure on the stock market, particularly among growth stocks.
In response to this shift from growth investments, investors began to favor
cyclical stocks. The Federal Reserve did indeed raise interest rates on the last
day of the reporting period, but, because the increase was widely expected, the
effect on stock prices was limited.
Q SO HOW DID YOU MANAGE THE FUND IN RESPONSE TO THESE EVENTS?
A As we have stressed in prior reports, our investment discipline leads us
to purchase stocks that meet our criteria of positive future fundamentals
and attractive current prices. By our definition, a company with positive
future fundamentals possesses 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 from the "bottom up"--in other words, on a
company by company basis. Because our investment approach has served the Fund
well through a broad range of economic conditions, we weren't tempted to change
our strategy during the past six months.
That said, we did seek to adjust to changing market conditions in the last
several months of the reporting period. For example, we attempted to capitalize
on the recent upturn among cyclical stocks by adding several that clearly met
our investment discipline. This helped moderate the Fund's performance during a
difficult period for growth stocks.
Q WHAT WERE SOME OF THE FUND'S BEST PERFORMERS DURING THE PERIOD, AND HOW
DID THEY AFFECT TOTAL RETURN?
A We were pleased with our investments in semiconductor companies--their
stocks are sensitive to global economic conditions, which have been
relatively strong in
4
<PAGE> 6
recent months. The Fund's total return benefited greatly from these
stocks--especially Texas Instruments, a semiconductor maker that develops a key
component in cellular phones. Other semiconductor stocks whose performance
boosted the Fund's return were Applied Materials, which sells equipment used to
manufacture semiconductors, and STMicroelectronics, a maker of integrated
circuits.
Another stock that helped the Fund's return was Univision, the leading
Spanish-language television broadcaster in the United States. This network,
which reaches 92 percent of the U.S. Hispanic market, saw its stock price
appreciate 81 percent during the reporting period.
One of our best investments was Tricon Global, which operates restaurants
under the Pizza Hut, Taco Bell, and Kentucky Fried Chicken brands.
Q WHAT WAS SO SUCCESSFUL ABOUT TRICON GLOBAL?
A We purchased this stock in late 1998 because we were optimistic about
management's plan to improve operations, sell nonproductive stores back to
franchisees, and use the proceeds to repay debt. As we expected, earnings
increased dramatically as a result of this plan, and the stock appreciated
nearly 56 percent through late April, when we sold our position. We chose to
sell when the company failed to exceed earnings expectations in April--violating
our requirement to invest in companies with accelerating earnings growth. This
turned out to be a very good decision, as the stock began a steady decline
thereafter. The Fund's return, therefore, benefited directly from the stock's
rapid appreciation, and indirectly from our timely sale.
Please keep in mind that not all stocks in the Fund performed as well as
Tricon Global or the others mentioned above, nor is there any guarantee that
these stocks will perform as well in the future. For additional Fund portfolio
highlights, please refer to page 8.
Q DID ANY STOCKS DISAPPOINT YOU?
A Yes, we were disappointed in our holdings in the areas of health care and
grocery stores. A number of stocks in these industries underperformed and
hurt the Fund's return.
Drug companies in particular were poor performers. Our holdings included
industry leaders Schering-Plough and Pfizer, as well as smaller companies such
as Watson Pharmaceuticals and Lincare. Pharmaceutical companies, which typically
aren't affected by changes in the economy, fared very well in 1998 as investors
sought refuge from market volatility. These stocks have languished, however, as
we near the 2000 elections, which could precipitate additional health-care
regulations. This belief has placed a cloud over drug company stocks, although
we still think the long-term prospects for this sector are excellent.
Grocery store stocks also had a negative impact on the Fund's return.
These included Safeway and Kroger, two of the Fund's longtime holdings. Although
these companies still
5
<PAGE> 7
appear to be executing their business plans well, their stock prices have
suffered in recent months--reflecting concern that acquisitions in this area are
slowing.
Q HOW DID THE FUND PERFORM?
A Strong stock selection from a variety of sectors partially offset the
downward pressure on growth stocks during the period. The Fund achieved a
six-month total return of 6.88 percent(1) (Class A shares at net asset
value) as of June 30, 1999. By comparison, the Standard & Poor's 500 Index
returned 12.36 percent, and the Lipper Growth Fund Index, which more closely
resembles the Fund, returned 11.89 percent. The S&P 500 is a broad-based 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. Past
performance does not guarantee future results.
These indices are statistical composites that don't include any
commissions or sales charges that would be paid by an investor purchasing the
securities represented by these indices. Please refer to the footnotes and chart
on page 3 for additional Fund performance results.
Q WHAT DO YOU SEE AHEAD FOR THE FUND?
A We are cautiously optimistic that corporate earnings will continue to
improve and that many international economies are beginning to emerge from
last year's depths. Despite subtle indications that prices may be creeping
upwards, inflation is still low and economic growth is strong, which is a
promising sign for the stock market.
Our major concern is that stock-market valuations remain high by relative
and historical measures. Maintaining those levels depends on more good news with
respect to inflation and earnings. As long as both remain favorable, we expect
the market--and the Fund--to still perform well. However, high valuations leave
stocks vulnerable if economic conditions change. We will continue to monitor the
situation as we stick to the discipline that has worked well for us in the past.
[SIG]
Jeff D. New
Senior Portfolio Manager
[SIG]
Mary Jayne Maly
Portfolio Manager
[SIG]
Michael Davis
Portfolio Manager
[SIG]
Stephen L. Boyd
Chief Investment Officer
Equity Investments
6
<PAGE> 8
GLOSSARY OF TERMS
CLASS A SHARES: When Class A shares of a fund are purchased, the share price
includes the net asset value plus a one-time sales charge (or "load"). In
most cases, there is no redemption fee (contingent deferred sales charge).
CYCLICAL STOCKS: Stocks within industries where earnings tend to rise quickly
when the economy strengthens and fall quickly when the economy weakens.
Examples of cyclical stocks include housing, automobile, and paper
companies. Noncyclical or defensive stocks are typically less sensitive to
changes in the economy. These include utilities, grocery stores, and
pharmaceutical companies.
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.
FEDERAL RESERVE BOARD (THE FED): The governing body of the Federal Reserve
System, which is the central bank of the United States. Its policy-making
committee, called the Federal Open Market Committee, meets eight times a
year to establish monetary policy and monitor the economic pulse of the
United States.
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 relative to their earnings than value stocks, due to their
higher expected earnings growth.
INFLATION: A persistent and measurable rise in the general level of prices.
Inflation is widely measured by the Consumer Price Index, an economic
indicator that measures the change in the cost of purchased goods and
services.
NET ASSET VALUE (NAV): The value of a mutual fund share, calculated by deducting
a fund's liabilities from the total assets in its portfolio 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 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 general stock market more fully.
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.
VOLATILITY: A measure of the fluctuation in the market price of a security. A
security that is volatile has frequent and large swings in price.
7
<PAGE> 9
PORTFOLIO HIGHLIGHTS
VAN KAMPEN ENTERPRISE FUND
TOP TEN PORTFOLIO HOLDINGS AS OF JUNE 30, 1999*
<TABLE>
<S> <C>
MICROSOFT develops, manufactures, licenses, and supports a
range of software products.................................. 4.0%
CISCO SYSTEMS provides networking solutions that connect
computing devices and computer networks..................... 3.1%
TYCO INTERNATIONAL is a diversified manufacturing and
service company whose businesses include medical supplies,
electronic security components, and fire detection
equipment................................................... 2.2%
AMERICA ONLINE provides Internet online services, as well as
electronic-commerce and enterprise solutions to
businesses.................................................. 1.9%
LUCENT TECHNOLOGIES develops leading-edge communications
solutions, including wireless systems, messaging systems,
call centers, optical networking, and data networking....... 1.9%
BRISTOL-MYERS SQUIBB produces and distributes
pharmaceuticals, consumer medicines, nutritional
supplements, medical devices, and beauty care products...... 1.8%
SCHERING-PLOUGH develops pharmaceutical and health care
products worldwide, including prescription drugs and
animal-health, over-the-counter, foot-care, and sun-care
products.................................................... 1.7%
SAFEWAY operates a chain of retail supermarket stores across
the United States........................................... 1.7%
INTERNATIONAL BUSINESS MACHINES (IBM) develops,
manufactures, and sells advanced technology processing
products, including computers, software, networking systems,
and related services........................................ 1.7%
LEXMARK INTERNATIONAL manufactures laser and inkjet printers
and associated supplies for the office and home markets..... 1.6%
</TABLE>
TOP FIVE PORTFOLIO INDUSTRIES*
[BAR GRAPH]
<TABLE>
<CAPTION>
JUNE 30, 1999 DECEMBER 31, 1998
------------- -----------------
<S> <C> <C>
Technology 27.4 23.2
Health Care 13.3 13.5
Consumer Distribution 11.3 19.2
Finance 10.4 12.0
Consumer Services 8.8 10.1
</TABLE>
* As a percentage of long-term investments
8
<PAGE> 10
PORTFOLIO OF INVESTMENTS
June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- -----------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS 95.3%
CONSUMER DISTRIBUTION 10.7%
Abercrombie & Fitch Co., Class A (a).............. 374,000 $ 17,952,000
AnnTaylor Stores Corp. (a)........................ 492,000 22,140,000
Best Buy Co., Inc. (a)............................ 446,000 30,105,000
Circuit City Stores-Circuit City Group............ 180,000 16,740,000
Consolidated Stores Corp. (a)..................... 661,000 17,847,000
Costco Cos., Inc. (a)............................. 241,000 19,295,063
Dayton Hudson Corp................................ 690,000 44,850,000
Family Dollar Stores, Inc......................... 750,000 18,000,000
Kroger Co. (a).................................... 1,104,000 30,843,000
Safeway, Inc. (a)................................. 1,082,000 53,559,000
Tandy Corp........................................ 404,000 19,745,500
TJX Cos., Inc..................................... 1,371,000 45,671,437
Wal-Mart Stores, Inc.............................. 360,000 17,370,000
--------------
354,118,000
--------------
CONSUMER DURABLES 1.0%
Harley-Davidson, Inc.............................. 317,000 17,236,875
Maytag Corp....................................... 222,000 15,470,625
--------------
32,707,500
--------------
CONSUMER NON-DURABLES 8.3%
Anheuser-Busch Cos., Inc.......................... 409,000 29,013,437
Hasbro, Inc....................................... 806,000 22,517,625
Jones Apparel Group, Inc. (a)..................... 463,000 15,886,688
Kimberly-Clark Corp............................... 278,000 15,846,000
Lexmark International Group, Inc., Class A (a).... 758,000 50,075,375
NIKE, Inc., Class B............................... 746,000 47,231,125
Pepsi Bottling Group, Inc......................... 730,000 16,835,625
Quaker Oats Co.................................... 466,000 30,930,750
Seagram Co. Ltd................................... 312,600 15,747,225
Tommy Hilfiger Corp. (a).......................... 388,000 28,518,000
--------------
272,601,850
--------------
CONSUMER SERVICES 8.3%
Brinker International, Inc. (a)................... 587,000 15,959,062
CBS Corp. (a)..................................... 925,000 40,179,688
</TABLE>
See Notes to Financial Statements
9
<PAGE> 11
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- -----------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER SERVICES (CONTINUED)
Chancellor Media Corp., Class A (a)............... 336,000 $ 18,522,000
Clear Channel Communications, Inc. (a)............ 427,049 29,439,690
Comcast Corp., Class A............................ 1,087,000 41,781,563
Harrah's Entertainment, Inc. (a).................. 819,000 18,018,000
Omnicom Group, Inc................................ 550,000 44,000,000
Time Warner, Inc.................................. 520,000 38,220,000
Univision Communications, Inc., Class A (a)....... 449,000 29,634,000
--------------
275,754,003
--------------
ENERGY 2.5%
Baker Hughes Inc.................................. 1,071,000 35,878,500
Enron Corp........................................ 290,000 23,707,500
Halliburton Co.................................... 189,000 8,552,250
Williams Cos., Inc................................ 336,000 14,301,000
--------------
82,439,250
--------------
FINANCE 9.9%
AFLAC Inc......................................... 481,000 23,027,875
American International Group, Inc................. 268,000 31,372,750
Bank One Corp..................................... 281,000 16,737,062
Capital One Financial Corp........................ 312,000 17,374,500
Chase Manhattan Corp.............................. 198,000 17,151,750
Citigroup, Inc.................................... 858,000 40,755,000
Equitable Cos., Inc............................... 232,000 15,544,000
Firstar Corp...................................... 1,086,000 30,408,000
Federal Home Loan Mortgage Assn................... 289,000 16,762,000
Golden State Bancorp Inc. (a)..................... 893,000 19,646,000
Lincoln National Corp............................. 340,000 17,786,250
Marsh & McLennan Cos., Inc........................ 425,000 32,087,500
Providian Financial Corp.......................... 157,000 14,679,500
State Street Corp................................. 379,000 32,357,125
--------------
325,689,312
--------------
HEALTHCARE 12.7%
Abbott Laboratories, Inc.......................... 237,000 10,783,500
Aetna, Inc........................................ 258,000 23,074,875
Allergan, Inc..................................... 92,000 10,212,000
</TABLE>
See Notes to Financial Statements
10
<PAGE> 12
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- -----------------------------------------------------------------------------------
<S> <C> <C>
HEALTHCARE (CONTINUED)
American Home Products Corp....................... 791,000 $ 45,482,500
Amgen, Inc. (a)................................... 550,000 33,481,250
Baxter International Inc.......................... 258,000 15,641,250
Biogen, Inc. (a).................................. 430,000 27,654,375
Bristol-Myers Squibb Co........................... 817,000 57,547,438
Eli Lilly & Co.................................... 215,000 15,399,375
Guidant Corp...................................... 494,000 25,410,125
Johnson & Johnson, Inc............................ 168,000 16,464,000
Lincare Holdings, Inc. (a)........................ 709,000 17,725,000
Mylan Laboratories, Inc........................... 450,000 11,925,000
Pfizer, Inc....................................... 123,000 13,499,250
Pharmacia & Upjohn, Inc........................... 148,000 8,408,250
Schering-Plough Corp.............................. 1,035,000 54,855,000
Watson Pharmaceuticals, Inc. (a).................. 183,000 6,416,437
Wellpoint Health Networks Inc., Class A (a)....... 276,000 23,425,500
--------------
417,405,125
--------------
PRODUCER MANUFACTURING 8.0%
Corning, Inc...................................... 525,000 36,815,625
Honeywell, Inc.................................... 197,000 22,827,375
Ingersoll-Rand Co................................. 310,000 20,033,750
Navistar International Corp. (a).................. 515,200 25,760,000
Republic Services, Inc. (a)....................... 1,426,800 35,313,300
Tyco International Ltd............................ 736,070 69,742,633
United Technologies Corp.......................... 343,000 24,588,812
Waste Management, Inc............................. 568,300 30,546,125
--------------
265,627,620
--------------
RAW MATERIALS/PROCESSING INDUSTRIES 1.9%
Boise Cascade Corp................................ 768,000 32,928,000
Temple-Inland, Inc................................ 419,000 28,596,750
--------------
61,524,750
--------------
TECHNOLOGY 26.1%
Altera Corp. (a).................................. 362,000 13,326,125
America Online, Inc. (a).......................... 552,000 60,996,000
Applied Materials, Inc. (a)....................... 273,000 20,167,875
</TABLE>
See Notes to Financial Statements
11
<PAGE> 13
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- -----------------------------------------------------------------------------------
<S> <C> <C>
TECHNOLOGY (CONTINUED)
BMC Software, Inc. (a)............................ 508,000 $ 27,432,000
Cisco Systems, Inc. (a)........................... 1,491,000 95,889,938
Citrix Systems, Inc. (a).......................... 440,000 24,860,000
Compuware Corp. (a)............................... 489,000 15,556,313
Comverse Technology, Inc. (a)..................... 330,000 24,915,000
EMC Corp. (a)..................................... 748,000 41,140,000
First Data Corp................................... 281,000 13,751,437
General Instrument Corp. (a)...................... 263,000 11,177,500
Hewlett-Packard Co................................ 201,000 20,200,500
Intel Corp........................................ 554,000 32,963,000
International Business Machines Corp.............. 408,000 52,734,000
Linear Technology Corp............................ 147,000 9,885,750
LSI Logic Corp. (a)............................... 324,000 14,944,500
Lucent Technologies, Inc.......................... 903,650 60,939,897
Microsoft Corp. (a)............................... 1,409,000 127,074,187
Nokia Corp. - ADR (Finland)....................... 440,000 40,287,500
Novell, Inc. (a).................................. 458,000 12,137,000
Oracle Corp. (a).................................. 703,000 26,098,875
Sanmina Corp. (a)................................. 312,000 23,673,000
STMicroelectronics NV - ADR (Netherlands)......... 200,000 13,875,000
Texas Instruments, Inc............................ 239,000 34,655,000
Unisys Corp. (a).................................. 293,000 11,408,688
Waters Corp. (a).................................. 212,000 11,262,500
Xilinx, Inc. (a).................................. 306,000 17,518,500
--------------
858,870,085
--------------
TRANSPORTATION 1.1%
Delta Air Lines, Inc.............................. 261,000 15,040,125
Kansas City Southern Industries, Inc.............. 331,000 21,121,937
--------------
36,162,062
--------------
UTILITIES 4.8%
ALLTEL Corp....................................... 613,000 43,829,500
Frontier Corp..................................... 425,000 25,075,000
Level 3 Communications, Inc. (a).................. 410,800 24,673,675
</TABLE>
See Notes to Financial Statements
12
<PAGE> 14
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- -----------------------------------------------------------------------------------
<S> <C> <C>
UTILITIES (CONTINUED)
MCI Worldcom, Inc. (a)............................ 548,000 $ 47,162,250
Sprint Corp. (PCS Group).......................... 312,000 16,477,500
--------------
157,217,925
--------------
TOTAL LONG-TERM INVESTMENTS 95.3%
(Cost $2,156,643,369).......................................... 3,140,117,482
--------------
SHORT-TERM INVESTMENTS 5.3%
REPURCHASE AGREEMENT 2.1%
Goldman Sachs ($67,845,000 par collateralized by U.S. Government
obligations in a pooled cash account, dated 06/30/99, to be
sold on 07/01/99 at $67,854,140)............................... 67,845,000
--------------
U.S. GOVERNMENT AGENCY OBLIGATIONS 1.7%
Federal Home Loan Bank Consolidated Discount Notes ($25,000,000
par, yielding 4.95%, 07/06/99 maturity)........................ 24,982,813
Federal Home Loan Mortgage Corporation Discount Notes
($20,000,000 par, yielding 4.84%, 07/14/99 maturity)........... 19,965,261
Federal National Mortgage Association Discount Notes ($10,000,000
par, yielding 4.90%, 08/27/99 maturity)........................ 9,923,367
--------------
54,871,441
--------------
COMMERCIAL PAPER 1.5%
General Electric Capital Corp. ($50,000,000 par, yielding 5.70%,
07/01/99 maturity)............................................. 49,992,083
--------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $172,708,524)............................................ 172,708,524
--------------
TOTAL INVESTMENTS 100.6%
(Cost $2,329,351,893).......................................... 3,312,826,006
LIABILITIES IN EXCESS OF OTHER ASSETS (0.6%).................... (18,762,462)
--------------
NET ASSETS 100.0%............................................... $3,294,063,544
==============
</TABLE>
(a) Non-income producing security as this stock currently does not declare
dividends.
ADR-- American Depositary Receipt
See Notes to Financial Statements
13
<PAGE> 15
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Total Investments (Cost $2,329,351,893)..................... $3,312,826,006
Cash........................................................ 7,174
Receivables:
Investments Sold.......................................... 98,527,748
Fund Shares Sold.......................................... 41,459,237
Dividends................................................. 1,600,498
Other....................................................... 190,892
--------------
Total Assets.......................................... 3,454,611,555
--------------
LIABILITIES:
Payables:
Investments Purchased..................................... 110,617,854
Fund Shares Repurchased................................... 45,514,257
Distributor and Affiliates................................ 2,229,342
Investment Advisory Fee................................... 1,150,598
Income and Capital Gain Distributions..................... 183,589
Accrued Expenses............................................ 579,129
Trustees' Deferred Compensation and Retirement Plans........ 273,242
--------------
Total Liabilities..................................... 160,548,011
--------------
NET ASSETS.................................................. $3,294,063,544
==============
NET ASSETS CONSIST OF:
Capital (Par value of $.01 per share with an unlimited
number of shares authorized).............................. $2,037,165,648
Net Unrealized Appreciation................................. 983,474,113
Accumulated Net Realized Gain............................... 279,449,954
Accumulated Net Investment Loss............................. (6,026,171)
--------------
NET ASSETS.................................................. $3,294,063,544
==============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $2,277,479,257 and 104,823,063 shares of
beneficial interest issued and outstanding)........... $ 21.73
Maximum sales charge (5.75%* of offering price)......... 1.32
--------------
Maximum offering price to public........................ $ 23.05
==============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $914,493,980 and 43,437,108 shares of
beneficial interest issued and outstanding)........... $ 21.05
==============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $102,090,307 and 4,809,178 shares of
beneficial interest issued and outstanding)........... $ 21.23
==============
</TABLE>
*On sales of $50,000 or more, the sales charge will be reduced.
See Notes to Financial Statements
14
<PAGE> 16
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends................................................... $ 9,552,876
Interest.................................................... 2,340,366
--------------
Total Income............................................ 11,893,242
--------------
EXPENSES:
Distribution (12b-1) and Service Fees (Attributed to Classes
A, B and C of $2,453,012, $4,263,446 and $457,632
respectively)............................................. 7,174,090
Investment Advisory Fee..................................... 6,863,799
Shareholder Services........................................ 2,762,009
Custody..................................................... 126,403
Legal....................................................... 61,475
Trustees' Fees and Related Expenses......................... 47,904
Other....................................................... 583,368
--------------
Total Expenses.......................................... 17,619,048
Less Credits Earned on Cash Balances.................... 31,953
--------------
Net Expenses............................................ 17,587,095
--------------
NET INVESTMENT LOSS......................................... $ (5,693,853)
==============
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Investments............................................... $ 280,724,900
Futures................................................... 1,555,800
--------------
Net Realized Gain........................................... 282,280,700
--------------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 1,058,881,928
End of the Period:
Investments............................................... 983,474,113
--------------
Net Unrealized Depreciation During the Period............... (75,407,815)
--------------
NET REALIZED AND UNREALIZED GAIN............................ $ 206,872,885
==============
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $ 201,179,032
==============
</TABLE>
See Notes to Financial Statements
15
<PAGE> 17
STATEMENT OF CHANGES IN NET ASSETS
For the Six Months Ended June 30, 1999 and the
Year Ended December 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1999 December 31, 1998
- -----------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income/Loss................... $ (5,693,853) $ 2,399,932
Net Realized Gain............................ 282,280,700 134,279,558
Net Unrealized Appreciation/Depreciation
During the Period.......................... (75,407,815) 443,358,417
--------------- --------------
Change in Net Assets from Operations......... 201,179,032 580,037,907
--------------- --------------
Distributions from Net Investment Income --
Class A Shares............................. (39,771) (4,405,387)
Distributions in Excess of Net Investment
Income -- Class A Shares................... (332,318) -0-
--------------- --------------
Distributions from and in Excess of Net
Investment Income.......................... (372,089) (4,405,387)
--------------- --------------
Distributions from Net Realized Gain:
Class A Shares............................. (31,897,433) (75,906,906)
Class B Shares............................. (13,027,758) (29,616,587)
Class C Shares............................. (1,410,919) (3,123,845)
--------------- --------------
(46,336,110) (108,647,338)
--------------- --------------
Total Distributions.......................... (46,708,199) (113,052,725)
--------------- --------------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES................................. 154,470,833 466,985,182
--------------- --------------
FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold.................... 2,858,571,445 5,283,612,665
Net Asset Value of Shares Issued Through
Dividend Reinvestment...................... 42,417,269 102,204,579
Cost of Shares Repurchased................... (2,801,166,395) (5,118,178,150)
--------------- --------------
NET CHANGE IN NET ASSETS FROM CAPITAL
TRANSACTIONS............................... 99,822,319 267,639,094
--------------- --------------
TOTAL INCREASE IN NET ASSETS................. 254,293,152 734,624,276
NET ASSETS:
Beginning of the Period...................... 3,039,770,392 2,305,146,116
--------------- --------------
End of the Period (Including accumulated
undistributed net investment income of
$(6,026,171) and $39,771, respectively).... $ 3,294,063,544 $3,039,770,392
=============== ==============
</TABLE>
See Notes to Financial Statements
16
<PAGE> 18
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, 1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
the Period.................. $ 20.631 $ 17.414 $ 15.120 $ 13.07 $ 11.43
-------- -------- -------- -------- --------
Net Investment Income/Loss.... (.013) .058 .087 .086 .08
Net Realized and Unrealized
Gain........................ 1.430 3.980 4.113 2.942 3.7325
-------- -------- -------- -------- --------
Total from Investment
Operations.................. 1.417 4.038 4.200 3.028 3.8125
-------- -------- -------- -------- --------
Less:
Distributions from and in
Excess of Net Investment
Income.................... .004 .045 .060 .077 .0725
Distributions from Net
Realized Gain............. .317 .776 1.846 .901 2.10
-------- -------- -------- -------- --------
Total Distribution............ .321 .821 1.906 9.78 2.1725
-------- -------- -------- -------- --------
Net Assets Value, End of the
Period...................... $ 21.727 $ 20.631 $ 17.414 $ 15.120 $ 13.07
======== ======== ======== ======== ========
Total Return (a).............. 6.88%* 23.56% 28.55% 23.48% 33.92%
Net Assets at End of the
Period (in millions)........ $2,277.5 $2,137.4 $1,706.1 $1,276.9 $1,035.7
Ratio of Expenses to Average
Net Assets (b).............. .90% .94% .93% 1.01% .98%
Ratio of Net Investment
Income/Loss to Average Net
Assets (b).................. (.13%) .32% .54% .60% .59%
Portfolio Turnover............ 66%* 72% 73% 110% 152%
</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
17
<PAGE> 19
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, 1999(c) 1998(c) 1997 1996 1995
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
the Period................. $20.075 $17.059 $14.909 $ 12.94 $ 11.37
------- ------- ------- ------- -------
Net Investment Loss.......... (.092) (.089) (.021) (.012) (.03)
Net Realized and Unrealized
Gain....................... 1.387 3.881 4.017 2.882 3.70
------- ------- ------- ------- -------
Total from Investment
Operations................. 1.295 3.792 3.996 2.870 3.67
Less Distributions from Net
Realized Gain.............. .317 .776 1.846 .901 2.10
------- ------- ------- ------- -------
Net Asset Value, End of the
Period..................... $21.053 20.075 $17.059 $14.909 $ 12.94
======= ======= ======= ======= =======
Total Return (a)............. 6.45%* 22.65% 27.50% 22.48% 32.82%
Net Assets at End of the
Period (In millions)....... $ 914.5 $ 816.3 $ 542.2 $ 305.6 $ 184.1
Ratio of Expenses to Average
Net Assets (b)............. 1.69% 1.74% 1.75% 1.82% 1.81%
Ratio of Net Investment Loss
to Average Net
Assets (b)................. (.91%) (.49%) (.29%) (.21%) (.24%)
Portfolio Turnover........... 66%* 72% 73% 110% 152%
</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%.
(c) Based on average shares outstanding.
See Notes to Financial Statements
18
<PAGE> 20
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 C Shares June 30, 1999(c) 1998(c) 1997 1996 1995
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
the Period................... $20.239 $17.191 $15.008 $ 13.01 $ 11.42
------- ------- ------- ------- -------
Net Investment Loss............ (.093) (.090) (.023) (.013) (.03)
Net Realized and Unrealized
Gain......................... 1.399 3.914 4.052 2.912 3.72
------- ------- ------- ------- -------
Total from Investment
Operations................... 1.306 3.824 4.029 2.899 3.69
Less Distributions from Net
Realized Gain................ .317 .776 1.846 .901 2.10
------- ------- ------- ------- -------
Net Asset Value, End of the
Period....................... $21.228 $20.239 $17.191 $15.008 $ 13.01
======= ======= ======= ======= =======
Total Return (a)............... 6.45%* 22.65% 27.51% 22.60% 32.85%
Net Assets at End of the Period
(In millions)................ $ 102.1 $ 86.0 $ 56.9 $ 30.4 $ 15.7
Ratio of Expenses to Average
Net Assets (b)............... 1.68% 1.74% 1.75% 1.82% 1.80%
Ratio of Net Investment Loss to
Average Net Assets (b)....... (.91%) (.48%) (.29%) (.22%) (.23%)
Portfolio Turnover............. 66%* 72% 73% 110% 152%
</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%.
(c) Based on average shares outstanding.
See Notes to Financial Statements
19
<PAGE> 21
NOTES TO FINANCIAL STATEMENTS
June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen 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
20
<PAGE> 22
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
the value of the underlying security at not less than the repurchase proceeds
due the Fund.
C. INCOME AND EXPENSES--Dividend income is recorded on the ex-dividend date and
interest income is recorded on an accrual basis. Discounts on debt securities
purchased are amortized over the expected life of each applicable security.
Premiums on debt securities are not amortized. Income and 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, 1999, for federal income tax purposes, cost of long- and
short-term investments is $2,332,155,654; the aggregate gross unrealized
appreciation is $1,010,780,700 and the aggregate gross unrealized depreciation
is $30,110,348, resulting in net unrealized appreciation on long- and short-term
investments of $980,670,352.
Net realized gains or losses may differ for financial purposes primarily as
a result of the deferral of losses relating to wash sale transactions.
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.
F. EXPENSE REDUCTIONS--During the six months ended June 30, 1999, the Fund's
custody fee was reduced by $31,953 as a result of credits earned on overnight
cash balances.
21
<PAGE> 23
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
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, 1999, the Fund recognized expenses of
approximately $61,500 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.
For the six months ended June 30, 1999, the Fund recognized expenses of
approximately $273,300 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, 1999, the Fund recognized expenses of approximately $2,288,400.
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.
22
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
3. CAPITAL TRANSACTIONS
At June 30, 1999, capital aggregated $1,275,743,569, $682,957,919 and
$78,464,160 for Classes A, B, and C, respectively. For the six months ended June
30, 1999, transactions were as follows:
<TABLE>
<CAPTION>
SHARES VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
Sales:
Class A.................................. 108,410,103 $ 2,279,873,463
Class B.................................. 25,145,690 514,533,157
Class C.................................. 3,109,326 64,164,825
------------ ---------------
Total Sales................................ 136,665,119 $ 2,858,571,445
============ ===============
Dividend Reinvestment:
Class A.................................. 1,363,105 $ 28,788,797
Class B.................................. 601,398 12,334,671
Class C.................................. 62,563 1,293,801
------------ ---------------
Total Dividend Reinvestment................ 2,027,066 $ 42,417,269
============ ===============
Repurchases:
Class A.................................. (108,551,008) $(2,280,912,242)
Class B.................................. (22,972,416) (466,593,298)
Class C.................................. (2,613,335) (53,660,855)
------------ ---------------
Total Repurchases.......................... (134,136,759) $(2,801,166,395)
============ ===============
</TABLE>
23
<PAGE> 25
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
At December 31, 1998, capital aggregated $1,247,993,551, $622,683,389 and
$66,666,389 for Classes A, B, and C, respectively. For the year ended December
31, 1998, transactions were as follows:
<TABLE>
<CAPTION>
SHARES VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
Sales:
Class A.................................. 232,030,934 $ 4,349,545,687
Class B.................................. 46,624,437 851,354,417
Class C.................................. 4,456,779 82,712,561
------------ ---------------
Total Sales................................ 283,112,150 $ 5,283,612,665
============ ===============
Dividend Reinvestment:
Class A.................................. 3,731,141 $ 71,215,610
Class B.................................. 1,514,082 28,118,929
Class C.................................. 153,307 2,870,040
------------ ---------------
Total Dividend Reinvestment................ 5,398,530 $ 102,204,579
============ ===============
Repurchases:
Class A.................................. (230,130,328) $(4,324,087,590)
Class B.................................. (39,259,659) (725,635,528)
Class C.................................. (3,669,727) (68,455,032)
------------ ---------------
Total Repurchases.......................... (273,059,714) $(5,118,178,150)
============ ===============
</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.
<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>
24
<PAGE> 26
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
For the six months ended June 30, 1999, Van Kampen, as Distributor for the
Fund, received commissions on sales of the Fund's Class A shares of
approximately $441,600 and CDSC on redeemed shares of approximately $992,200.
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 $1,982,248,141 and $2,060,376,328,
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 to 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, cash or liquid 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).
25
<PAGE> 27
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Transactions in futures contracts, each with a par value of $100,000, for
the six months ended June 30, 1999, were as follows:
<TABLE>
<CAPTION>
CONTRACTS
- -----------------------------------------------------------------------
<S> <C>
Outstanding at December 31, 1998.......................... -0-
Futures Opened............................................ 300
Futures Closed............................................ (300)
----
Outstanding at June 30, 1999.............................. -0-
====
</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, 1999, are payments retained by Van Kampen of
approximately $3,604,500.
26
<PAGE> 28
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
Small Cap Value
Technology
Utility
Value
Global/International
Asian Growth
Emerging Markets
European Equity
Global Equity
Global Equity Allocation
Global Franchise
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
Reserve
Tax Free Money
Senior Loan Funds
Prime Rate Income Trust
Senior Floating Rate
To find out more about any of these funds, ask your financial advisor 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.VANKAMPEN.COM--to view a prospectus, select Download
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.VANKAMPEN.COM and selecting Contact Us
27
<PAGE> 29
VAN KAMPEN ENTERPRISE FUND
BOARD OF TRUSTEES
J. MILES BRANAGAN
JERRY D. CHOATE
RICHARD M. DEMARTINI*
LINDA HUTTON HEAGY
R. CRAIG KENNEDY
JACK E. NELSON
DON G. POWELL*
PHILLIP B. ROONEY
FERNANDO SISTO
WAYNE W. WHALEN* - Chairman
SUZANNE H. WOOLSEY, PH.D
PAUL G. YOVOVICH
OFFICERS
RICHARD F. POWERS, III*
President
DENNIS J. MCDONNELL*
Executive Vice President and Chief Investment Officer
A. THOMAS SMITH III*
Vice President and Secretary
JOHN L. SULLIVAN*
Vice President, Treasurer and Chief Financial Officer
CURTIS W. MORELL*
Vice President and Chief Accounting Officer
TANYA M. LODEN*
Controller
PETER W. HEGEL*
PAUL R. WOLKENBERG*
EDWARD C. WOOD, III*
Vice Presidents
INVESTMENT ADVISER
VAN KAMPEN
ASSET MANAGEMENT INC.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 60181-5555
DISTRIBUTOR
VAN KAMPEN FUNDS INC.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 60181-5555
SHAREHOLDER SERVICING AGENT
VAN KAMPEN INVESTOR
SERVICES INC.
P.O. Box 218256
Kansas City, Missouri 64121-8256
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, Illinois 60601
* "Interested" persons of the Fund, as defined in the
Investment Company Act of 1940.
(C) Van Kampen Funds Inc., 1999 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, 1999 the report, if used with
prospective investors, must be accompanied by a quarterly performance update, if
applicable.
28
<PAGE> 30
YEAR 2000 READINESS DISCLOSURE
Like other mutual funds, financial and business organizations, and individuals
around the world, the Fund could be adversely affected if the computer systems
used by the Fund's investment adviser and other service providers do not
properly process and calculate date-related information and data from and after
January 1, 2000. This is commonly known as the "Year 2000 Problem." The Fund's
investment adviser is taking steps that it believes are reasonably designed to
address the Year 2000 Problem with respect to computer systems that it uses and
to obtain reasonable assurances that comparable steps are being taken by the
Fund's other major service providers. At this time, there can be no assurances
that these steps will be sufficient to avoid any adverse impact to the Fund. In
addition, the Year 2000 Problem may adversely affect the markets and the issuers
of securities in which the Fund may invest that, in turn, may adversely affect
the net asset value of the Fund. Improperly functioning trading systems may
result in settlement problems and liquidity issues. In addition, corporate and
governmental data processing errors may result in production problems for
individual companies or issuers and overall economic uncertainty. Earnings of
individual issuers will be affected by remediation costs, which may be
substantial and may be reported inconsistently in U.S. and foreign financial
statements. Accordingly, the Fund's investments may be adversely affected. The
statements above are subject to the Year 2000 Information and Readiness
Disclosure Act which may limit the legal rights regarding the use of such
statements in the case of dispute.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 11
<NAME> ENTERPRISE CLASS A
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<INVESTMENTS-AT-COST> 2,329,351,893<F1>
<INVESTMENTS-AT-VALUE> 3,312,826,006<F1>
<RECEIVABLES> 141,587,483<F1>
<ASSETS-OTHER> 0<F1>
<OTHER-ITEMS-ASSETS> 198,066<F1>
<TOTAL-ASSETS> 3,454,611,555<F1>
<PAYABLE-FOR-SECURITIES> 110,617,854<F1>
<SENIOR-LONG-TERM-DEBT> 0<F1>
<OTHER-ITEMS-LIABILITIES> 49,930,157<F1>
<TOTAL-LIABILITIES> 160,548,011<F1>
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,275,743,569
<SHARES-COMMON-STOCK> 104,823,063
<SHARES-COMMON-PRIOR> 103,600,863
<ACCUMULATED-NII-CURRENT> (6,026,171)<F1>
<OVERDISTRIBUTION-NII> 0<F1>
<ACCUMULATED-NET-GAINS> 279,449,954<F1>
<OVERDISTRIBUTION-GAINS> 0<F1>
<ACCUM-APPREC-OR-DEPREC> 983,474,113<F1>
<NET-ASSETS> 2,277,479,257
<DIVIDEND-INCOME> 9,552,876<F1>
<INTEREST-INCOME> 2,340,366<F1>
<OTHER-INCOME> 0<F1>
<EXPENSES-NET> (17,587,095)<F1>
<NET-INVESTMENT-INCOME> (5,693,853)<F1>
<REALIZED-GAINS-CURRENT> 282,280,700<F1>
<APPREC-INCREASE-CURRENT> (75,407,815)<F1>
<NET-CHANGE-FROM-OPS> 201,179,032<F1>
<EQUALIZATION> 0<F1>
<DISTRIBUTIONS-OF-INCOME> (372,089)
<DISTRIBUTIONS-OF-GAINS> (31,897,433)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 108,410,103
<NUMBER-OF-SHARES-REDEEMED> (108,551,008)
<SHARES-REINVESTED> 1,363,105
<NET-CHANGE-IN-ASSETS> 140,038,668
<ACCUMULATED-NII-PRIOR> 39,771<F1>
<ACCUMULATED-GAINS-PRIOR> 43,505,364<F1>
<OVERDISTRIB-NII-PRIOR> 0<F1>
<OVERDIST-NET-GAINS-PRIOR> 0<F1>
<GROSS-ADVISORY-FEES> 6,863,799<F1>
<INTEREST-EXPENSE> 0<F1>
<GROSS-EXPENSE> 17,619,048<F1>
<AVERAGE-NET-ASSETS> 2,150,040,870
<PER-SHARE-NAV-BEGIN> 20.631
<PER-SHARE-NII> (0.013)
<PER-SHARE-GAIN-APPREC> 1.430
<PER-SHARE-DIVIDEND> (0.004)
<PER-SHARE-DISTRIBUTIONS> (0.317)
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 21.727
<EXPENSE-RATIO> 0.90
<FN>
<F1>This item relates to the Fund on a composite basis and not on a class basis
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 12
<NAME> ENTERPRISE CLASS B
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<INVESTMENTS-AT-COST> 2,329,351,893<F1>
<INVESTMENTS-AT-VALUE> 3,312,826,006<F1>
<RECEIVABLES> 141,587,483<F1>
<ASSETS-OTHER> 0<F1>
<OTHER-ITEMS-ASSETS> 198,066<F1>
<TOTAL-ASSETS> 3,454,611,555<F1>
<PAYABLE-FOR-SECURITIES> 110,617,854<F1>
<SENIOR-LONG-TERM-DEBT> 0<F1>
<OTHER-ITEMS-LIABILITIES> 49,930,157<F1>
<TOTAL-LIABILITIES> 160,548,011<F1>
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 682,957,919
<SHARES-COMMON-STOCK> 43,437,108
<SHARES-COMMON-PRIOR> 40,662,436
<ACCUMULATED-NII-CURRENT> (6,026,171)<F1>
<OVERDISTRIBUTION-NII> 0<F1>
<ACCUMULATED-NET-GAINS> 279,449,954<F1>
<OVERDISTRIBUTION-GAINS> 0<F1>
<ACCUM-APPREC-OR-DEPREC> 983,474,113<F1>
<NET-ASSETS> 914,493,980
<DIVIDEND-INCOME> 9,552,876<F1>
<INTEREST-INCOME> 2,340,366<F1>
<OTHER-INCOME> 0<F1>
<EXPENSES-NET> (17,587,095)<F1>
<NET-INVESTMENT-INCOME> (5,693,853)<F1>
<REALIZED-GAINS-CURRENT> 282,280,700<F1>
<APPREC-INCREASE-CURRENT> (75,407,815)<F1>
<NET-CHANGE-FROM-OPS> 201,179,032<F1>
<EQUALIZATION> 0<F1>
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (13,027,758)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 25,145,690
<NUMBER-OF-SHARES-REDEEMED> (22,972,416)
<SHARES-REINVESTED> 601,398
<NET-CHANGE-IN-ASSETS> 98,194,544
<ACCUMULATED-NII-PRIOR> 39,771<F1>
<ACCUMULATED-GAINS-PRIOR> 43,505,364<F1>
<OVERDISTRIB-NII-PRIOR> 0<F1>
<OVERDIST-NET-GAINS-PRIOR> 0<F1>
<GROSS-ADVISORY-FEES> 6,863,799<F1>
<INTEREST-EXPENSE> 0<F1>
<GROSS-EXPENSE> 17,619,048<F1>
<AVERAGE-NET-ASSETS> 859,496,152
<PER-SHARE-NAV-BEGIN> 20.075
<PER-SHARE-NII> (0.092)
<PER-SHARE-GAIN-APPREC> 1.387
<PER-SHARE-DIVIDEND> 0.000
<PER-SHARE-DISTRIBUTIONS> (0.317)
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 21.053
<EXPENSE-RATIO> 1.69
<FN>
<F1>This item relates to the Fund on a composite basis and not on a class basis
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 13
<NAME> ENTERPRISE CLASS C
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<INVESTMENTS-AT-COST> 2,329,351,893<F1>
<INVESTMENTS-AT-VALUE> 3,312,826,006<F1>
<RECEIVABLES> 141,587,483<F1>
<ASSETS-OTHER> 0<F1>
<OTHER-ITEMS-ASSETS> 198,066<F1>
<TOTAL-ASSETS> 3,454,611,555<F1>
<PAYABLE-FOR-SECURITIES> 110,617,854<F1>
<SENIOR-LONG-TERM-DEBT> 0<F1>
<OTHER-ITEMS-LIABILITIES> 49,930,157<F1>
<TOTAL-LIABILITIES> 160,548,011<F1>
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 78,464,160
<SHARES-COMMON-STOCK> 4,809,178
<SHARES-COMMON-PRIOR> 4,250,624
<ACCUMULATED-NII-CURRENT> (6,026,171)<F1>
<OVERDISTRIBUTION-NII> 0<F1>
<ACCUMULATED-NET-GAINS> 279,449,954<F1>
<OVERDISTRIBUTION-GAINS> 0<F1>
<ACCUM-APPREC-OR-DEPREC> 983,474,113<F1>
<NET-ASSETS> 102,090,307
<DIVIDEND-INCOME> 9,552,876<F1>
<INTEREST-INCOME> 2,340,366<F1>
<OTHER-INCOME> 0<F1>
<EXPENSES-NET> (17,587,095)<F1>
<NET-INVESTMENT-INCOME> (5,693,853)<F1>
<REALIZED-GAINS-CURRENT> 282,280,700<F1>
<APPREC-INCREASE-CURRENT> (75,407,815)<F1>
<NET-CHANGE-FROM-OPS> 201,179,032<F1>
<EQUALIZATION> 0<F1>
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (1,410,919)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,109,326
<NUMBER-OF-SHARES-REDEEMED> (2,613,335)
<SHARES-REINVESTED> 62,563
<NET-CHANGE-IN-ASSETS> 16,059,940
<ACCUMULATED-NII-PRIOR> 39,771<F1>
<ACCUMULATED-GAINS-PRIOR> 43,505,364<F1>
<OVERDISTRIB-NII-PRIOR> 0<F1>
<OVERDIST-NET-GAINS-PRIOR> 0<F1>
<GROSS-ADVISORY-FEES> 6,863,799<F1>
<INTEREST-EXPENSE> 0<F1>
<GROSS-EXPENSE> 17,619,048<F1>
<AVERAGE-NET-ASSETS> 92,294,335
<PER-SHARE-NAV-BEGIN> 20.239
<PER-SHARE-NII> (0.093)
<PER-SHARE-GAIN-APPREC> 1.399
<PER-SHARE-DIVIDEND> 0.000
<PER-SHARE-DISTRIBUTIONS> (0.317)
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 21.228
<EXPENSE-RATIO> 1.68
<FN>
<F1>This item relates to the Fund on a composite basis and not on a class basis
</FN>
</TABLE>
