<PAGE> 1
<TABLE>
<S> <C>
Table of Contents
OVERVIEW
LETTER TO SHAREHOLDERS 1
ECONOMIC SNAPSHOT 2
PERFORMANCE SUMMARY
RETURN HIGHLIGHTS 4
PORTFOLIO AT A GLANCE
TOP TEN HOLDINGS 6
TOP FIVE SECTORS 6
Q&A WITH YOUR PORTFOLIO MANAGERS 7
GLOSSARY OF TERMS 11
BY THE NUMBERS
YOUR FUND'S INVESTMENTS 12
FINANCIAL STATEMENTS 17
NOTES TO FINANCIAL STATEMENTS 23
VAN KAMPEN FUNDS
THE VAN KAMPEN FAMILY OF FUNDS 30
FUND OFFICERS AND IMPORTANT ADDRESSES 31
</TABLE>
It is times like these when money- management experience may make a difference.
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
<PAGE> 2
OVERVIEW
LETTER TO SHAREHOLDERS
July 20, 2000
Dear Shareholder,
Whether you have held your fund for years or just joined the Van Kampen family
of shareholders in the last few months, you are likely to have questions and
even some concerns about how recent market volatility has affected your
investment. I encourage you to review the following Q&A in which your portfolio
manager provides an update on how your fund is being managed in this
environment.
It is times like these when money-management experience may make a difference.
Toward that end, you should know that Van Kampen is one of the nation's oldest
investment-management firms, with a history of money management dating back to
1926. Our portfolio managers have invested in all types of market
conditions--during bull and bear markets, periods of inflation and rising
interest rates, and now a technology revolution. We have managed money long
enough to understand short-term market volatility and the value of investing for
the long term.
As we move through the second half of 2000, count on us to
continue to draw on the wisdom of our 74 years of experience.
Along those lines, Van Kampen's "Generations of Experience" is
the theme of a national advertising campaign that we recently kicked off. The
message emphasizes our depth of investment-management history, as well as our
firm belief that with the right investments, anyone can realize life's true
wealth.
Sincerely,
[SIG]
Richard F. Powers, III
President and CEO
Van Kampen Investments
1
<PAGE> 3
ECONOMIC SNAPSHOT
ECONOMIC GROWTH
BEGINNING IN THE SECOND QUARTER OF 2000, EVIDENCE OF SLOWER ECONOMIC GROWTH IN
THE UNITED STATES EMERGED. HOWEVER, ANALYSTS BELIEVE IT MAY HAVE BEEN PREMATURE
TO ASSUME THAT THE U.S. ECONOMY HAS SLOWED TO A SUSTAINABLE, NONINFLATIONARY
PACE, WITH THE GROSS DOMESTIC PRODUCT (GDP), A MEASURE OF ECONOMIC GROWTH, UP
5.2 PERCENT ANNUALIZED IN THE SECOND QUARTER OF 2000.
CONSUMER SPENDING AND EMPLOYMENT
CONSUMER SPENDING REMAINED THE MAIN ENGINE OF GROWTH BEHIND THE U.S. ECONOMY.
LIVING STANDARDS AND SPENDING HABITS WERE BOOSTED BY STRONG GAINS IN REAL
INCOME, AND INDIVIDUAL WEALTH INCREASED SUBSTANTIALLY, PRIMARILY DUE TO A
BUOYANT STOCK MARKET. NONETHELESS, DATA RELEASED IN THE SECOND QUARTER OF 2000
REFLECTED A MINOR DECREASE IN THE SPENDING OF INDIVIDUALS. IN JUNE, THE CONSUMER
PRICE INDEX (CPI), THE LEADING INFLATION INDICATOR, ROSE HIGHER THAN
EXPECTED--0.6 PERCENT MORE THAN THE PREVIOUS MONTH. THAT HEIGHTENED CONCERNS
ABOUT INFLATION, AND THE PROSPECT OF ADDITIONAL FEDERAL RESERVE BOARD
INTEREST-RATE INCREASES.
THE U.S. LABOR MARKET WAS STILL ROBUST DURING THIS TIME, AND JOB INSECURITY
CONTINUED TO DECLINE. SOLID EMPLOYMENT GROWTH WAS ACCOMPANIED BY UNUSUALLY LARGE
GAINS IN PRODUCTIVITY, WHICH LIMITED THE RISE IN UNIT LABOR COSTS ACROSS THE
WHOLE ECONOMY. GIVEN THE HIGH EMPLOYMENT NUMBERS AND STRONG LEVELS OF
PRODUCTIVITY, ANALYSTS BELIEVE AN INCREASE IN INTEREST RATES TO WARD OFF
INFLATION AND FURTHER SLOW THE ECONOMY IS POSSIBLE.
INTEREST RATES AND INFLATION
DURING THE PAST FEW MONTHS, PERSISTENT STRENGTH IN CONSUMER SPENDING ACCOMPANIED
BY A VERY TIGHT LABOR MARKET, RESULTED IN SOME INFLATION. THE CPI REACHED A
LEVEL OF 2.7 PERCENT IN JANUARY 2000 AND 3.7 PERCENT IN JUNE 2000, CLEARLY
DEMONSTRATING SIGNS OF INFLATION.
SINCE JUNE 1999, THE FEDERAL RESERVE HAS INCREASED THE FEDERAL FUNDS RATE SIX
TIMES BY A TOTAL OF 175 BASIS POINTS TO LOWER ECONOMIC GROWTH AND DECREASE ANY
FUTURE FEARS OF INFLATION. THESE INCREASES IN INTEREST RATES HELPED SLOW THE
INTEREST-SENSITIVE AUTO AND HOUSING MARKETS.
MANY OBSERVERS BELIEVE INTEREST RATES COULD BE LIFTED FURTHER IN COMING MONTHS.
WHILE MARKETS HAVE EXPERIENCED MUCH SHORT-TERM VOLATILITY, THE MARKET'S OUTLOOK
COULD IMPROVE ONCE INTEREST-RATE HIKES CEASE.
2
<PAGE> 4
U.S. GROSS DOMESTIC PRODUCT
SEASONALLY ADJUSTED ANNUALIZED RATES
(June 30, 1998 -- June 30, 2000)
[BAR GRAPH]
<TABLE>
<CAPTION>
U.S. GROSS DOMESTIC PRODUCT
---------------------------
<S> <C>
Jun 98 2.10
Sep 98 3.80
Dec 98 5.90
Mar 99 3.50
Jun 99 2.50
Sep 99 5.70
Dec 99 8.30
Mar 00 4.80
Jun 00 5.20
</TABLE>
Source: Bureau of Economic Analysis
INTEREST RATES AND INFLATION
(June 30, 1998 -- June 30, 2000)
[LINE GRAPH]
<TABLE>
<CAPTION>
INTEREST RATES INFLATION
-------------- ---------
<S> <C> <C>
Jun 98 5.50 1.70
5.50 1.70
5.50 1.60
Sep 98 5.25 1.50
5.00 1.50
4.75 1.50
Dec 98 4.75 1.60
4.75 1.70
4.75 1.60
Mar 99 4.75 1.70
4.75 2.30
4.75 2.10
Jun 99 5.00 2.00
5.00 2.10
5.25 2.30
Sep 99 5.25 2.60
5.25 2.60
5.50 2.60
Dec 99 5.50 2.70
5.50 2.70
5.75 3.20
Mar 00 6.00 3.70
6.00 3.00
6.50 3.10
Jun 00 6.50 3.70
</TABLE>
Interest rates are represented by the closing midline federal funds target 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.
3
<PAGE> 5
PERFORMANCE SUMMARY
RETURN HIGHLIGHTS
(as of June 30, 2000)
<TABLE>
<CAPTION>
A SHARES B SHARES C SHARES
-------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Six-month total return based on
NAV(1) 6.58% 6.21% 6.19%
-------------------------------------------------------------------------
Six-month total return(2) 0.45% 1.21% 5.19%
-------------------------------------------------------------------------
One-year total return(2) 18.84% 20.18% 24.15%
-------------------------------------------------------------------------
Five-year average annual total
return(2) 22.52% 22.86% 23.02%
-------------------------------------------------------------------------
Ten-year average total return(2) 17.73% N/A N/A
-------------------------------------------------------------------------
Life-of-Fund average annual total
return(2) 13.85% 18.32%(3) 20.09%
-------------------------------------------------------------------------
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 Class A shares) or
contingent deferred sales charge ("CDSC") for Class B and C shares. On
purchases of Class A shares of $1 million or more, a CDSC of 1% may be
imposed on certain redemptions made within one year of purchase. Returns for
Class B shares are calculated without the effect of the maximum 5% CDSC,
charged on certain redemptions made within one year of purchase and
declining thereafter to 0% after the fifth year. Returns for Class C shares
are calculated without the effect of the maximum 1% CDSC, charged on certain
redemptions made within one year of purchase. If the sales charges were
included, total returns would be lower.
(2) Standardized total return. Assumes reinvestment of all distributions for the
period and includes payment of the maximum sales charge (5.75% for Class A
shares) or contingent deferred sales charge ("CDSC") for Class B and C
shares. On purchases of Class A shares of $1 million or more, a CDSC of 1%
may be imposed on certain redemptions made within one year of purchase.
Returns for Class B shares are calculated with the effect of the maximum 5%
CDSC, charged on certain redemptions made within one year of purchase and
declining thereafter to 0% after the fifth year. Returns for Class C shares
are calculated with the effect of the maximum 1% CDSC, charged on certain
redemptions made within one year of purchase.
(3) The total return reflects the conversion of Class B shares into Class A
shares six years after the end of the calendar month in which the shares
were purchased.
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. The Fund may invest up to 15% of the total
assets in
4
<PAGE> 6
foreign securities which may subject the Fund to special risks including
currency exchange rate fluctuations, and political and economic instability.
In addition, the Fund is subject to other risks. These risks include, but
are not limited to: market risk -- the possibility that the market values of
securities owned by the Fund will decline; derivative instrument risk -- a
derivative instrument is one whose value depends on (or is derived from) the
value of an underlying asset, interest rate or index and involves risks
different from investment in the underlying security; and manager risk --
management may not be successful in selecting the best performing securities
and the Fund's performance may lag behind that of similar funds. Past
performance is no 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.
Market forecasts provided in this report may not necessarily come to pass.
5
<PAGE> 7
PORTFOLIO AT A GLANCE
TOP TEN HOLDINGS
(as a percentage of long-term investments--June 30, 2000)
<TABLE>
<S> <C> <C>
1. INTEL 5.4%
Designs, manufactures, and markets
microcomputer components.
2. CISCO SYSTEMS 4.9%
Provides solutions that connect
computing devices and computer
networks.
3. GENERAL ELECTRIC 4.4%
Produces appliances, lighting
products, aircraft engines, and
plastics.
4. PFIZER 3.2%
Manufactures pharmaceuticals,
including Viagra and Lipitor, and
consumer products such as Certs,
Listerine, and Visine.
5. ORACLE 3.0%
Supplies software products for
information management and also
offers consulting and systems
integration services.
6. EMC 2.7%
Provides products and services that
help companies store and access large
amounts of computer data.
7. JDS UNIPHASE 2.1%
Makes products used in optical
networks for the telecommunications
and cable-television industries.
8. ELI LILLY 1.8%
Develops pharmaceutical products for
worldwide distribution.
9. ADC TELECOMMUNICATIONS 1.7%
Creates hardware and software
products used to build communica-
tions networks.
10. MICRON TECHNOLOGY 1.6%
Manufactures semiconductor components
for computers and other electronic
devices.
</TABLE>
TOP FIVE SECTORS*
(as a percentage of long-term investments)
[BAR GRAPH]
<TABLE>
<CAPTION>
JUNE 30, 2000 DECEMBER 31, 1999
------------- -----------------
<S> <C> <C>
Technology 45.4 51.9
Health Care 13.2 9.8
Finance 8.5 8.9
Producer Manufacturing 6.8 2.0
Consumer Services 5.4 7.4
</TABLE>
*These sector categories represent broad groupings of related industries.
6
<PAGE> 8
Q&A WITH YOUR PORTFOLIO MANAGERS
WE RECENTLY SPOKE WITH THE MANAGEMENT TEAM OF THE VAN KAMPEN ENTERPRISE FUND
ABOUT THE KEY EVENTS AND ECONOMIC FORCES THAT SHAPED THE MARKETS AND INFLUENCED
THE FUND'S RETURN DURING THE SIX MONTHS ENDED JUNE 30, 2000. THE TEAM IS LED BY
JEFF D. NEW, SENIOR PORTFOLIO MANAGER, WHO HAS MANAGED THE FUND SINCE JULY 1994
AND HAS WORKED IN THE INVESTMENT INDUSTRY SINCE JULY 1987. HE IS JOINED BY
SENIOR PORTFOLIO MANAGERS MICHAEL DAVIS AND MARY JAYNE MALY. THE FOLLOWING
DISCUSSION REFLECTS THEIR VIEWS ON THE FUND'S PERFORMANCE.
Q HOW WOULD YOU DESCRIBE THE
MARKET ENVIRONMENT IN WHICH THE FUND OPERATED, AND HOW DID THE FUND PERFORM?
A While the economy continued to
be strong, the word that most aptly describes the market environment during the
period is volatile.
Many economic sectors remained strong, and many companies' earnings
continued to exceed Wall Street analysts' expectations in the past six months.
Because of continued economic strength, the Federal Reserve Board (the Fed)
continued raising interest rates in an effort to slow the economy and prevent
inflation. At the end of the period, a slowing gross domestic product (GDP) and
other indicators such as housing, retail spending, and employment pointed to an
economic slowdown, indicating that the Fed's actions were working.
Investors spent much of the last six months trying to determine how far the
Fed would go with its interest-rate hikes and what effect those rate hikes would
have on various market sectors and stocks. That uncertainty showed up in the
markets in the form of some fairly dramatic market swings, especially in the
technology sector. From the start of the year through early March, technology
stocks did very well. On March 10, the technology-heavy NASDAQ index reached its
all-time peak, but then started to decline and finally plummeted in early to
mid-April, taking the Standard and Poor's 500 Index down with it. Stocks staged
a brief rally toward the end of April, but fell again until mid-May, when they
started to go back up again.
The fund weathered this volatility well, returning 6.58 percent for the six-
month period ended June 30, 2000 (Class A shares at net asset value; if the
maximum sales charge of 5.75 percent were included, the return would have been
lower). As a result of current market activity, current performance may vary
from the figures shown. By comparison, the Standard & Poor's 500 Index lost 0.42
percent, and the Russell 1000 Growth Index, which more closely resembles the
composition of the fund, returned 4.23 percent for the same period. Of course,
past performance is no guarantee of future results.
The S&P 500 Index is an unmanaged, broad-based index that measures the
7
<PAGE> 9
performance of 500 stocks from 83 industrial groups and reflects the general
performance of the stock market. The Russell 1000 Growth Index is an unmanaged
index that reflects the general performance of growth stocks. These indexes 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
indexes. If these costs had been included, performance would have been lower. It
is not possible to invest directly in an index. Please refer to the chart and
footnotes on page 4 for additional fund performance results.
Q WHAT STRATEGIES DID YOU USE TO
MANAGE THE FUND THROUGH THIS VOLATILE PERIOD?
A We maintained our investment
discipline of looking for companies with positive future fundamentals, whether
in volatile or stable markets. We invest in companies that possess at least one
of the following characteristics: consistent earnings growth, accelerating
earnings growth, better-than-expected fundamentals, or an underlying change in a
company, industry, or regulatory environment. Because we evaluate stocks on a
company-by-company basis, our focus is on the merits of any given company rather
than market movements or interest-rate changes. Regardless of what happens in
the market on a daily basis, we always remain true to this discipline.
In short, we really didn't react to the volatility we saw in the markets.
The fund held a number of companies that posted strong earnings and whose
earnings estimates were increased by Wall Street analysts. If a company's
fundamentals remained strong by our definition, the fund generally continued to
own it despite any volatility in the stock's price. Over the last six months, we
increased the fund's percentage of drug and energy stocks. Their growth rates
weren't as high as the technology stocks that grabbed all the headlines, but we
believed both groups were poised to do well.
Q WHAT SPECIFIC STOCKS CONTRIBUTED
TO THE FUND'S RETURN?
A Despite the sector's volatility, many
of the stocks that helped fund performance were in the technology sector. Intel,
a microprocessor manufacturer, was the fund's largest holding and also the
largest contributor to fund performance. Intel performed very well due to good
unit growth, improved pricing, and several new products. Micron Technologies, a
semiconductor company, was one of the fund's better performers during the
period. Micron has done an excellent job of capitalizing on the increasing
demand for memory in everything from computers and cellular phones to cars and
washing machines, so we added to the fund's position in late 1999 and again in
May 2000. Cisco and Oracle have also been positive stocks for the fund, as both
have emerged as dominant companies in their markets (Internet infrastructure and
corporate databases, respectively).
As we mentioned earlier, the fund benefited from owning drug stocks,
particularly in the large-cap sector. In addition to being largely overlooked by
investors, there was uncertainty regarding a possible Medicare prescription-drug
benefit and its effect on drug prices.
8
<PAGE> 10
This uncertainty resulted in the group's stock valuations generally being
relatively low, despite consistent and moderate earnings growth rates. The fund
owned both Pfizer and Warner Lambert, two companies that merged during the
reporting period. We increased the fund's position in the surviving company,
Pfizer, during the period because we felt that the success of its existing drugs
and the expected economies of scale coming out of the merger made the company an
even more attractive holding. American Home Products, another drug company with
a number of promising drugs in its pipeline, also contributed to performance.
Another sector that boosted fund performance was energy. In the past six
months, we added a number of offshore drillers and companies whose businesses
are tied to oil and gas wells to the fund's portfolio. Oil and gas prices rose
during the period, which heightened drilling activity. BJ Services, Smith
International, and Schlumberger all did well as a result.
Of course, not all of the stocks in the fund performed as favorably, nor is
there any guarantee that any of the stocks mentioned above will continue to
perform as well or be held by the fund in the future. For additional fund
highlights, please refer to page 6.
Q WHAT STOCKS HURT FUND
PERFORMANCE DURING THE PERIOD?
A Not all technology stocks could be
counted on for positive performance, with Microsoft's decline detracting from
fund performance more than any other stock in the portfolio. We started reducing
the fund's position in Microsoft in late 1999 and continued to sell it this
spring due to our belief that Microsoft would decrease in importance as
technology shifts away from desktop computers to cellular phones and other
Internet-access devices. Qualcomm, a major player in cellular-phone components,
also disappointed, as did the stock of America Online, whose value weakened amid
uncertainty created by their upcoming merger with Time Warner.
Many retail stocks hurt the fund's overall performance as well. The stocks
of Wal-Mart, Home Depot, and Gap all declined on the expectations that higher
interest rates would slow consumer spending.
Another sector that did poorly was communication services, which includes
wireless telecommunications and independent telecommunications companies. Many
of these stocks had relatively high valuations but poor earnings, and they were
also very dependent on the market for raising additional money to fund their
growth. They were hit hard when the market fell in April. We sold Voicestream
Wireless, a telecommunications stock, from the fund's portfolio in April after
the company reported lower earnings than what Wall Street analysts had
predicted.
Q WHAT DO YOU SEE AHEAD FOR THE
MARKET AND THE FUND?
A We envision more of the same in
terms of the economy. We believe that the overall outlook for corporate profits
is good and that the Fed has been successful in slowing the economy. Therefore,
we expect to see sustainable growth rather than a boom/bust cycle. This is
positive for stocks because it sets
9
<PAGE> 11
the stage for favorable earnings growth with less risk of inflation. With that
said, we believe our best long-term course of action for the fund is to stick to
our investment discipline and continue to look for companies with positive
future fundamentals, regardless of market movements.
10
<PAGE> 12
GLOSSARY OF TERMS
A HELPFUL GUIDE TO SOME OF THE COMMON TERMS YOU'RE LIKELY TO SEE IN THIS REPORT
AND OTHER FINANCIAL PUBLICATIONS.
CLASS A SHARES: A division of mutual fund shares, which are generally divided
into three groupings, called Class A, Class B, and Class C shares. The specific
features of each are dependent on varying fees and sales charges. In most cases,
Class A shares will have no redemption fee (contingent deferred sales charge).
EARNINGS ESTIMATE: A forecast for a company's net income during a given period.
An earnings estimate can come from the company's management as well as from
independent analysts.
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
than 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 from 83 industrial groups. The index, which tracks industrial,
transportation, financial, and utility stocks, to name a few, provides a guide
to the overall health of the U.S. stock market.
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.
11
<PAGE> 13
BY THE NUMBERS
YOUR FUND'S INVESTMENTS
June 30, 2000 (Unaudited)
THE FOLLOWING PAGES DETAIL YOUR FUND'S PORTFOLIO OF INVESTMENTS AT THE END OF
THE REPORTING PERIOD.
<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
COMMON STOCKS* 98.9%
COMMUNICATIONS 2.2%
ADC Telecommunications, Inc. ........................... 810,000 $ 67,938,750
Alcatel SA -- ADR (France).............................. 167,000 11,105,500
Scientific-Atlanta, Inc. ............................... 174,000 12,963,000
--------------
92,007,250
--------------
CONSUMER DISTRIBUTION 5.0%
Best Buy Co., Inc. (a).................................. 180,000 11,385,000
Home Depot, Inc. ....................................... 692,000 34,556,750
Kohl's Corp. (a)........................................ 620,000 34,487,500
Kroger Co. ............................................. 401,000 8,847,062
Limited, Inc. .......................................... 653,000 14,121,125
Outback Steakhouse, Inc. (a)............................ 550,000 16,087,500
Safeway, Inc. (a)....................................... 779,000 35,152,375
Target Corp. ........................................... 222,000 12,876,000
Wal-Mart Stores, Inc. .................................. 613,000 35,324,125
--------------
202,837,437
--------------
CONSUMER DURABLES 0.9%
Harley-Davidson, Inc. .................................. 916,000 35,266,000
--------------
CONSUMER NON-DURABLES 3.9%
Anheuser-Busch Cos., Inc. .............................. 191,000 14,265,313
Avon Products, Inc. .................................... 235,000 10,457,500
Colgate-Palmolive Co. .................................. 217,000 12,992,875
Nike, Inc. Class B...................................... 427,000 16,999,938
Pepsi Bottling Group, Inc. ............................. 933,000 27,231,937
PepsiCo, Inc. .......................................... 962,000 42,748,875
Quaker Oats Co. ........................................ 203,000 15,250,375
Starbucks Corp. (a)..................................... 524,000 20,010,250
--------------
159,957,063
--------------
</TABLE>
See Notes to Financial Statements
12
<PAGE> 14
YOUR FUND'S INVESTMENTS
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
CONSUMER SERVICES 5.3%
Hispanic Broadcasting Corp. (a)......................... 436,000 $ 14,442,500
Metro-Goldwyn-Mayer, Inc. (a)........................... 795,778 20,789,700
MGM Grand, Inc. ........................................ 376,000 12,079,000
Omnicom Group, Inc. .................................... 272,000 24,225,000
Park Place Entertainment Corp. (a)...................... 498,000 6,069,375
Starwood Hotels & Resorts Worldwide, Inc. Class B....... 1,115,000 36,307,187
Time Warner, Inc. ...................................... 438,000 33,288,000
Univision Communications, Inc. (a)...................... 333,000 34,465,500
Viacom, Inc. Class B (a)................................ 356,965 24,340,551
Walt Disney Co. ........................................ 277,000 10,751,063
--------------
216,757,876
--------------
ENERGY 4.9%
Anadarko Petroleum Corp. ............................... 301,000 14,843,063
Baker Hughes Inc. ...................................... 568,000 18,176,000
BJ Services Co. (a)..................................... 474,000 29,625,000
Enron Corp. ............................................ 128,000 8,256,000
ENSCO International, Inc. .............................. 953,000 34,129,312
Nabors Industries, Inc. (a)............................. 395,000 16,417,187
Noble Drilling Corp. (a)................................ 1,036,000 42,670,250
Schlumberger, Ltd. ..................................... 109,000 8,134,125
Smith International, Inc. (a)........................... 390,000 28,396,875
--------------
200,647,812
--------------
FINANCE 8.4%
Allstate Corp. ......................................... 368,000 8,188,000
American Express Co. ................................... 531,000 27,678,375
American General Corp. ................................. 140,000 8,540,000
American International Group, Inc. ..................... 303,000 35,602,500
Associates First Capital Corp. ......................... 277,000 6,180,563
Bank of New York Inc. .................................. 172,000 7,998,000
Bank of America Corp. .................................. 335,000 14,405,000
Capital One Financial Corp. ............................ 288,000 12,852,000
Chase Manhattan Corp. .................................. 342,000 15,753,375
Citigroup, Inc. ........................................ 567,000 34,161,750
Federal Home Loan Mortgage Corp. ....................... 287,000 11,623,500
Federal National Mortgage Association................... 234,000 12,211,875
Fifth Third Bancorp. ................................... 115,000 7,273,750
Firstar Corp. .......................................... 389,000 8,193,312
FleetBoston Financial Corp. ............................ 670,000 22,780,000
Franklin Resources, Inc. ............................... 265,000 8,049,375
</TABLE>
See Notes to Financial Statements
13
<PAGE> 15
YOUR FUND'S INVESTMENTS
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
FINANCE (CONTINUED)
Marsh & McLennan Cos., Inc. ............................ 58,000 $ 6,057,375
MBNA Corp. ............................................. 433,000 11,745,125
Merrill Lynch & Co., Inc. .............................. 149,000 17,135,000
Northern Trust Corp. ................................... 133,000 8,653,312
Providian Financial Corp. .............................. 85,000 7,650,000
Schwab Charles Corp. ................................... 594,000 19,973,250
SLM Holding Corp. ...................................... 168,000 6,289,500
T. Rowe Price Associates, Inc. ......................... 226,000 9,605,000
Wells Fargo Co. ........................................ 408,000 15,810,000
--------------
344,409,937
--------------
HEALTHCARE 13.0%
American Home Products Corp. ........................... 692,100 40,660,875
Amgen, Inc. (a)......................................... 546,000 38,356,500
Bristol-Myers Squibb Co. ............................... 379,000 22,076,750
Eli Lilly & Co. ........................................ 710,000 70,911,250
Immunex Corp. (a)....................................... 378,000 18,687,375
Johnson & Johnson....................................... 435,000 44,315,625
MedImmune, Inc. (a)..................................... 359,000 26,566,000
Merck & Co., Inc. ...................................... 574,000 43,982,750
PE Corp. -- PE Biosystems Group......................... 203,000 13,372,625
Pfizer, Inc. ........................................... 2,664,500 127,896,000
Pharmacia Corp. ........................................ 386,000 19,951,375
Schering-Plough Corp. .................................. 570,000 28,785,000
UnitedHealth Group, Inc. ............................... 289,000 24,781,750
Wellpoint Health Networks, Inc. (a)..................... 168,000 12,169,500
--------------
532,513,375
--------------
PRODUCER MANUFACTURING 6.7%
Corning, Inc. .......................................... 234,000 63,150,750
General Electric Co. ................................... 3,339,000 176,967,000
Johnson Controls, Inc. ................................. 206,000 10,570,375
Tyco International Ltd. ................................ 487,000 23,071,625
--------------
273,759,750
--------------
TECHNOLOGY 44.9%
Adobe Systems, Inc. .................................... 184,000 23,920,000
Advanced Micro Devices, Inc. (a)........................ 181,000 13,982,250
Agilent Technologies Inc. (a)........................... 61,786 4,556,718
Altera Corp. (a)........................................ 465,000 47,400,937
</TABLE>
See Notes to Financial Statements
14
<PAGE> 16
YOUR FUND'S INVESTMENTS
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
TECHNOLOGY (CONTINUED)
America Online, Inc. (a)................................ 889,000 $ 46,894,750
Analog Devices, Inc. (a)................................ 450,000 34,200,000
Apple Computer, Inc. (a)................................ 184,000 9,637,000
Applied Materials, Inc. (a)............................. 546,000 49,481,250
Atmel Corp. (a)......................................... 311,000 11,468,125
BEA Systems, Inc. (a)................................... 136,000 6,723,500
Broadcom Corp. (a)...................................... 96,000 21,018,000
CIENA Corp. (a)......................................... 79,000 13,168,313
Cisco Systems, Inc. (a)................................. 3,112,000 197,806,500
Comverse Technology, Inc. (a)........................... 583,000 54,219,000
Dell Computer Corp. (a)................................. 1,014,000 50,002,875
EMC Corp. (a)........................................... 1,436,000 110,482,250
First Data Corp. ....................................... 246,000 12,207,750
Hewlett-Packard Co. .................................... 162,000 20,229,750
Inktomi Corp. (a)....................................... 96,000 11,352,000
Intel Corp. ............................................ 1,630,000 217,910,625
JDS Uniphase Corp. (a).................................. 695,200 83,337,100
KLA -- Tencor Corp. (a)................................. 151,000 8,842,938
Linear Technology Corp. ................................ 460,000 29,411,250
LSI Logic Corp. (a)..................................... 648,000 35,073,000
Lucent Technologies, Inc. .............................. 374,650 22,198,012
Micron Technology, Inc. (a)............................. 750,000 66,046,875
Microsoft Corp. (a)..................................... 701,000 56,080,000
National Semiconductor Corp. (a)........................ 176,000 9,988,000
Nokia Corp. -- ADR (Finland)............................ 1,256,000 62,721,500
Nortel Networks Corp. .................................. 884,000 60,333,000
Oracle Corp. (a)........................................ 1,470,000 123,571,875
QUALCOMM, Inc. (a)...................................... 52,200 3,132,000
Sanmina Corp. (a)....................................... 473,000 40,441,500
STMicroelectronics NV -- ADR (Netherlands).............. 600,000 38,512,500
Sun Microsystems, Inc. (a).............................. 608,000 55,290,000
Teradyne, Inc. (a)...................................... 304,000 22,344,000
Texas Instruments, Inc. ................................ 776,000 53,301,500
VERITAS Software Corp. (a).............................. 212,750 24,044,074
Waters Corp. (a)........................................ 212,000 26,460,250
Xilinx, Inc. (a)........................................ 612,000 50,528,250
Yahoo!, Inc. (a)........................................ 62,000 7,680,250
--------------
1,835,999,467
--------------
TRANSPORTATION 0.2%
Kansas City Southern Industries, Inc. .................. 109,000 9,666,938
--------------
</TABLE>
See Notes to Financial Statements
15
<PAGE> 17
YOUR FUND'S INVESTMENTS
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
UTILITIES 3.5%
Bell Atlantic Corp. (a)................................. 323,000 $ 16,412,438
McLeodUSA, Inc. (a)..................................... 798,000 16,508,625
Nextel Communications, Inc. (a)......................... 324,000 19,824,750
NEXTLINK Communications, Inc............................ 360,000 13,657,500
SBC Communications, Inc................................. 488,000 21,106,000
Sprint Corp. (PCS Group)................................ 352,000 17,952,000
Worldcom Inc. (a)....................................... 828,000 37,984,500
--------------
143,445,813
--------------
TOTAL LONG-TERM INVESTMENTS 98.9%
(Cost $2,701,901,151).......................................... 4,047,268,718
--------------
SHORT-TERM INVESTMENTS 3.1%
COMMERCIAL PAPER 2.4%
General Electric Capital Corp. ($50,000,000 par, yielding 4.57%,
07/03/00 maturity)............................................... 49,980,972
Prudential Funding Corp. ($50,000,000 par, yielding 4.33%, 07/03/00
maturity)........................................................ 49,981,945
--------------
TOTAL COMMERCIAL PAPER............................................. 99,962,917
--------------
REPURCHASE AGREEMENT 0.7%
DLJ Mortgage Acceptance Corp. ($28,421,000 par collateralized by
U.S.
Government obligations in a pooled cash account, dated 06/30/00
to
be sold on 07/03/00 at $28,436,584............................... 28,421,000
--------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $128,383,917)............................................ 128,383,917
--------------
TOTAL INVESTMENTS 102.0%
(Cost $2,830,285,068)............................................ 4,175,652,635
LIABILITIES IN EXCESS OF OTHER ASSETS (2.0%)....................... (82,296,819)
--------------
NET ASSETS 100.0%.................................................. $4,093,355,816
==============
</TABLE>
* The common stocks are classified by sectors which represent broad groupings
of related industries.
ADR -- American Depository Receipt
(a) Non-Income producing security as this stock currently does not declare
dividends.
See Notes to Financial Statements
16
<PAGE> 18
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Total Investments (Cost $2,830,285,068)..................... $4,175,652,635
Cash........................................................ 69,433
Receivables:
Investments Sold.......................................... 47,744,116
Fund Shares Sold.......................................... 8,394,832
Dividends................................................. 987,668
Other....................................................... 146,746
--------------
Total Assets............................................ 4,232,995,430
--------------
LIABILITIES:
Payables:
Investments Purchased..................................... 70,908,955
Fund Shares Repurchased................................... 64,655,204
Distributor and Affiliates................................ 2,194,712
Investment Advisory Fee................................... 1,276,415
Trustees' Deferred Compensation and Retirement Plans........ 334,013
Accrued Expenses............................................ 270,315
--------------
Total Liabilities....................................... 139,639,614
--------------
NET ASSETS.................................................. $4,093,355,816
==============
NET ASSETS CONSIST OF:
Capital (Par value of $.01 per share with an unlimited
number of shares authorized).............................. $2,500,138,345
Net Unrealized Appreciation................................. 1,345,367,567
Accumulated Net Realized Gain............................... 259,510,075
Accumulated Net Investment Loss............................. (11,660,171)
--------------
NET ASSETS.................................................. $4,093,355,816
==============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $2,805,154,563 and 117,850,065 shares of
beneficial interest issued and outstanding)............. $ 23.80
Maximum sales charge (5.75%* of offering price)......... 1.45
--------------
Maximum offering price to public........................ $ 25.25
==============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $1,141,474,636 and 50,138,894 shares of
beneficial interest issued and outstanding)............. $ 22.77
==============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $146,726,617 and 6,383,237 shares of
beneficial interest issued and outstanding)............. $ 22.99
==============
</TABLE>
* On sales of $50,000 or more, the sales charge will be reduced.
See Notes to Financial Statements
17
<PAGE> 19
Statement of Operations
For the Six Months Ended June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends................................................... $ 7,265,369
Interest.................................................... 2,736,641
--------------
Total Income............................................ 10,002,010
--------------
EXPENSES:
Distribution (12b-1) and Service Fees (Attributed to Classes
A, B and C of $3,189,650, $5,487,489 and $668,019
respectively)............................................. 9,345,158
Investment Advisory Fee..................................... 8,369,511
Shareholder Services........................................ 3,009,321
Custody..................................................... 97,095
Trustees' Fees and Related Expenses......................... 82,224
Legal....................................................... 55,598
Other....................................................... 486,373
--------------
Total Expenses.......................................... 21,445,280
Less Credits Earned on Cash Balances.................... 26,408
--------------
Net Expenses............................................ 21,418,872
--------------
NET INVESTMENT LOSS......................................... $ (11,416,862)
==============
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Investments............................................... $ 277,631,783
Futures................................................... (64,089)
--------------
Net Realized Gain........................................... 277,567,694
--------------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 1,364,234,284
End of the Period:
Investments............................................. 1,345,367,567
--------------
Net Unrealized Depreciation During the Period............... (18,866,717)
--------------
NET REALIZED AND UNREALIZED GAIN............................ $ 258,700,977
==============
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $ 247,284,115
==============
</TABLE>
See Notes to Financial Statements
18
<PAGE> 20
Statement of Changes in Net Assets
For the Six Months Ended June 30, 2000 and the Year Ended December 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED JUNE 30, 2000 DECEMBER 31, 1999
----------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Loss............................ $ (11,416,862) $ (11,779,087)
Net Realized Gain.............................. 277,567,694 482,437,010
Net Unrealized Appreciation/Depreciation During
the Period................................... (18,866,717) 305,352,356
--------------- --------------
Change in Net Assets from Operations........... 247,284,115 776,011,279
--------------- --------------
Distributions from Net Investment Income....... -0- (39,771)
Distributions in Excess of Net Investment
Income....................................... -0- (332,342)
--------------- --------------
Distributions from and in Excess of Net
Investment Income*........................... -0- (372,113)
Distributions from Net Realized Gain*.......... (89,022,370) (443,264,269)
--------------- --------------
Total Distributions............................ (89,022,370) (443,636,382)
--------------- --------------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES................................... 158,261,745 332,374,897
--------------- --------------
FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold...................... 1,413,225,187 5,415,754,623
Net Asset Value of Shares Issued Through
Dividend Reinvestment........................ 81,474,288 404,284,548
Cost of Shares Repurchased..................... (1,289,422,914) (5,462,366,950)
--------------- --------------
NET CHANGE IN NET ASSETS FROM CAPITAL
TRANSACTIONS................................. 205,276,561 357,672,221
--------------- --------------
TOTAL INCREASE IN NET ASSETS................... 363,538,306 690,047,118
NET ASSETS:
Beginning of the Period........................ 3,729,817,510 3,039,770,392
--------------- --------------
End of the Period (Including accumulated net
investment loss of $11,660,171 and $243,309,
respectively)................................ $ 4,093,355,816 $3,729,817,510
=============== ==============
* Distributions by Class
-----------------------------------------------
Distributions from and in Excess of Net
Investment Income:
Class A Shares............................... $ -0- $ (372,113)
Class B Shares............................... -0- -0-
Class C Shares............................... -0- -0-
--------------- --------------
$ -0- $ (372,113)
=============== ==============
Distributions from Net Realized Gain:
Class A Shares............................... $ (60,494,393) $ (304,078,413)
Class B Shares............................... (25,396,787) (125,087,732)
Class C Shares............................... (3,131,190) (14,098,124)
--------------- --------------
$ (89,022,370) $ (443,264,269)
=============== ==============
</TABLE>
See Notes to Financial Statements
19
<PAGE> 21
Financial Highlights
(Unaudited)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
CLASS A SHARES JUNE 30, -----------------------------------------
2000 1999 1998 1997 1996
------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF THE
PERIOD.......................... $22.774 $ 20.631 $ 17.414 $ 15.120 $ 13.07
------- -------- -------- -------- --------
Net Investment Income/Loss...... (.042) (.030) .058 .087 .086
Net Realized and Unrealized
Gain.......................... 1.598 5.207 3.980 4.113 2.942
------- -------- -------- -------- --------
Total from Investment
Operations...................... 1.556 5.177 4.038 4.200 3.028
------- -------- -------- -------- --------
Less:
Distributions from and in Excess
of Net Investment Income...... -0- .004 .045 .060 .077
Distributions from Net Realized
Gain.......................... .527 3.030 .776 1.846 .901
------- -------- -------- -------- --------
Total Distribution................ .527 3.034 .821 1.906 .978
------- -------- -------- -------- --------
NET ASSETS VALUE, END OF THE
PERIOD.......................... $23.803 $ 22.774 $ 20.631 $ 17.414 $ 15.120
======= ======== ======== ======== ========
Total Return (a).................. 6.58%* 26.56% 23.56% 28.55% 23.48%
Net Assets at End of the Period
(in millions)................... $2,805.2 $2,591.1 $2,137.4 $1,706.1 $1,276.9
Ratio of Expenses to Average Net
Assets (b)...................... .85% .91% .94% .93% 1.01%
Ratio of Net Investment
Income/Loss to Average Net
Assets (b)...................... (.34%) (.13%) .32% .54% .60%
Portfolio Turnover................ 46%* 111% 72% 73% 110%
</TABLE>
* Non-Annualized
(a) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum sales charge of 5.75% or contingent deferred
sales charge ("CDSC"). On purchases of $1 million or more, a contingent
deferred sales charge of 1% may be imposed on certain redemptions made
within one year of purchase. If the sales charges were included, total
returns would be lower.
(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> 22
Financial Highlights
(Unaudited)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
CLASS B SHARES JUNE 30, ---------------------------------------
2000(C) 1999 1998(C) 1997 1996
----------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF THE
PERIOD.......................... $ 21.884 $ 20.075 $17.059 $14.909 $ 12.94
-------- -------- ------- ------- --------
Net Investment Loss............. (.123) (.154) (.089) (.021) (.012)
Net Realized and Unrealized
Gain.......................... 1.532 4.993 3.881 4.017 2.882
-------- -------- ------- ------- --------
Total from Investment
Operations...................... 1.409 4.839 3.792 3.996 2.870
Less Distributions from Net
Realized Gain................... .527 3.030 .776 1.846 .901
-------- -------- ------- ------- --------
NET ASSET VALUE, END OF THE
PERIOD.......................... $ 22.766 $ 21.884 20.075 $17.059 $ 14.909
======== ======== ======= ======= ========
Total Return (a).................. 6.21%* 25.54% 22.65% 27.50% 22.48%
Net Assets at End of the Period
(In millions)................... $1,141.5 $1,020.8 $ 816.3 $ 542.2 $ 305.6
Ratio of Expenses to Average Net
Assets (b)...................... 1.62% 1.67% 1.74% 1.75% 1.82%
Ratio of Net Investment Loss to
Average Net Assets (b).......... (1.11%) (.91%) (.49%) (.29%) (.21%)
Portfolio Turnover................ 46%* 111% 72% 73% 110%
</TABLE>
* Non-Annualized
(a) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum contingent deferred sales charge of 5%,
charged on certain redemptions made within one year of purchase and
declining thereafter to 0% after the fifth year. If the sales charge was
included, total returns would be lower.
(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
21
<PAGE> 23
Financial Highlights
(Unaudited)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
CLASS C SHARES JUNE 30, --------------------------------------
2000(C) 1999 1998(C) 1997 1996
---------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF THE
PERIOD............................ $22.093 $20.239 $17.191 $15.008 $ 13.01
------- ------- ------- ------- --------
Net Investment Loss............... (.123) (.136) (.090) (.023) (.013)
Net Realized and Unrealized
Gain............................ 1.543 5.020 3.914 4.052 2.912
------- ------- ------- ------- --------
Total from Investment Operations.... 1.420 4.884 3.824 4.029 2.899
Less Distributions from Net Realized
Gain.............................. .527 3.030 .776 1.846 .901
------- ------- ------- ------- --------
NET ASSET VALUE, END OF THE PERIOD.. $22.986 $22.093 $20.239 $17.191 $ 15.008
======= ======= ======= ======= ========
Total Return (a).................... 6.19%* 25.59% 22.65% 27.51% 22.60%
Net Assets at End of the Period (In
millions)......................... $ 146.7 $ 117.9 $ 86.0 $ 56.9 $ 30.4
Ratio of Expenses to Average Net
Assets (b)........................ 1.62% 1.68% 1.74% 1.75% 1.82%
Ratio of Net Investment Loss to
Average Net Assets (b)............ (1.11%) (.90%) (.48%) (.29%) (.22%)
Portfolio Turnover.................. 46%* 111% 72% 73% 110%
</TABLE>
* Non-Annualized
(a) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum contingent deferred sales charge of 1%,
charged on certain redemptions made within one year of purchase. If the
sales charge was included, total returns would be lower.
(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
22
<PAGE> 24
NOTES TO
FINANCIAL STATEMENTS
June 30, 2000 (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, which
approximates market value.
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.
23
<PAGE> 25
NOTES TO
FINANCIAL STATEMENTS
June 30, 2000 (Unaudited)
C. INCOME AND EXPENSES Interest income is recorded on an accrual basis and
dividend income is recorded on the ex-dividend date. Discounts on debt
securities purchased are accreted 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, 2000, for federal income tax purposes, cost of long- and
short-term investments is $2,835,683,546; the aggregate gross unrealized
appreciation is $1,427,535,972 and the aggregate gross unrealized depreciation
is $87,566,883, resulting in net unrealized appreciation on long- and short-term
investments of $1,339,969,089.
Net realized gains or losses may differ for financial and tax reporting
purposes primarily as a result of the deferral of losses relating to wash sale
transactions at June 30, 2000.
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, 2000, the Fund's
custody fee was reduced by $26,408 a result of credits earned on overnight cash
balances.
24
<PAGE> 26
NOTES TO
FINANCIAL STATEMENTS
June 30, 2000 (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, 2000, the Fund recognized expenses of
approximately $55,600 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, 2000, the Fund recognized expenses of
approximately $70,400 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., an affiliate of the Adviser, serves as
the shareholder servicing agent for the Fund. For the six months ended June 30,
2000, the Fund recognized expenses of approximately $2,419,400. 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.
25
<PAGE> 27
NOTES TO
FINANCIAL STATEMENTS
June 30, 2000 (Unaudited)
3. CAPITAL TRANSACTIONS
At June 30, 2000, capital aggregated $1,558,572,238, $828,104,198 and
$113,461,909 for Classes A, B, and C, respectively. For the six months ended
June 30, 2000, transactions were as follows:
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Sales:
Class A............................................. 42,057,211 $ 971,370,298
Class B............................................. 17,376,534 385,332,128
Class C............................................. 2,500,634 56,522,761
----------- ---------------
Total Sales........................................... 61,934,379 $ 1,413,225,187
=========== ===============
Dividend Reinvestment:
Class A............................................. 2,128,230 $ 54,461,405
Class B............................................. 984,994 24,161,896
Class C............................................. 115,098 2,850,987
----------- ---------------
Total Dividend Reinvestment........................... 3,228,322 $ 81,474,288
=========== ===============
Repurchases:
Class A............................................. (40,107,378) $ (925,368,647)
Class B............................................. (14,866,418) (328,825,328)
Class C............................................. (1,569,236) (35,228,939)
----------- ---------------
Total Repurchases..................................... (56,543,032) $(1,289,422,914)
=========== ===============
</TABLE>
26
<PAGE> 28
NOTES TO
FINANCIAL STATEMENTS
June 30, 2000 (Unaudited)
At December 31, 1999, capital aggregated $1,458,109,182, $747,435,502 and
$89,317,100 for Classes A, B, and C, respectively. For the year ended December
31, 1999, transactions were as follows:
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Sales:
Class A............................................ 204,104,518 $ 4,361,367,361
Class B............................................ 45,071,295 932,198,067
Class C............................................ 5,836,735 122,189,195
------------ ---------------
Total Sales.......................................... 255,012,548 $ 5,415,754,623
============ ===============
Dividend Reinvestment:
Class A............................................ 12,823,258 $ 272,202,449
Class B............................................ 5,831,316 119,129,590
Class C............................................ 628,245 12,952,509
------------ ---------------
Total Dividend Reinvestment.......................... 19,282,819 $ 404,284,548
============ ===============
Repurchases:
Class A............................................ (206,756,637) $(4,423,347,663)
Class B............................................ (44,921,263) (926,532,977)
Class C............................................ (5,378,863) (112,486,310)
------------ ---------------
Total Repurchases.................................... (257,056,763) $(5,462,366,950)
============ ===============
</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 purchased
on or after June 1, 1996, and any dividend reinvestment Class B shares received
on such shares, automatically convert to Class A shares eight years after the
end of the calendar month in which the shares were purchased. Class B shares
purchased before June 1, 1996, and any dividend reinvestment plan Class B shares
received on such shares, automatically convert to Class A shares six years after
the end of the calendar month in which the shares were purchased. For the six
months ended June 30, 2000, 1,931,147 Class B shares automatically converted to
Class A shares and are shown in the above table as sales of Class A shares and
repurchases of Class B shares. Class C shares purchased before January 1, 1997,
and any dividend reinvestment plan C shares received on such shares,
automatically convert to Class A shares ten years after the end of the calendar
month in which the shares were purchased. Class C shares purchased on or after
January 1, 1997 do not possess a conversion feature. For the six months ended
June 30, 2000, no Class C shares converted to Class A shares. The CDSC for Class
B and C shares will be imposed on most redemptions made within five years of the
purchase for Class B
27
<PAGE> 29
NOTES TO
FINANCIAL STATEMENTS
June 30, 2000 (Unaudited)
shares and one year of the purchase for Class C shares 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>
For the six months ended June 30, 2000, Van Kampen, as Distributor for the
Fund, received commissions on sales of the Fund's Class A shares of
approximately $920,100 and CDSC on redeemed shares of approximately $934,800.
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 $2,146,554,143 and $1,762,035,006,
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 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.
The Fund may invest 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.
28
<PAGE> 30
NOTES TO
FINANCIAL STATEMENTS
June 30, 2000 (Unaudited)
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).
Transactions in futures contracts for the six months ended June 30, 2000,
were as follows:
<TABLE>
<CAPTION>
CONTRACTS
<S> <C>
Outstanding at December 31, 1999............................ 760
Futures Opened.............................................. -0-
Futures Closed.............................................. (760)
-----
Outstanding at June 30, 2000................................ -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, as amended 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, 2000, are payments retained by Van Kampen of
approximately $3,917,700.
7. BORROWINGS
In accordance with its investment policies, the Fund may borrow from banks for
temporary purposes and is subject to certain other customary restrictions.
Effective November 30, 1999, the Fund, in conjunction with certain other funds
of Van Kampen, has entered in to a $650,000,000 committed line of credit
facility with a group of banks which expires on November 28, 2000, but is
renewable with the consent of the participating banks. Each Fund is permitted to
utilize the facility in accordance with the restrictions of its prospectus. In
the event the demand for the credit facility meets or exceeds $650 million on a
complex-wide basis, each Fund will be limited to its pro-rata percentage based
on the net assets of each participating Fund. Interest on borrowings is charged
under the agreement at a rate of 0.50% above the federal funds rate per annum.
An annual commitment fee of 0.09% per annum is charged on the unused portion of
the credit facility, which each Fund incurs based on its pro-rata percentage of
quarterly net assets. The Fund has not borrowed against the credit facility
during the period.
29
<PAGE> 31
VAN KAMPEN FUNDS
THE VAN KAMPEN
FAMILY OF FUNDS
Growth
Aggressive Growth
American Value*
Emerging Growth
Enterprise
Equity Growth
Focus Equity
Growth
Mid Cap Growth
Pace
Select Growth
Small Cap Value
Tax Managed Equity Growth
Technology
Growth and Income
Comstock
Equity Income
Growth and Income
Harbor
Real Estate Securities
Utility
Value
Global/International
Asian Growth
Emerging Markets
European Equity
Global Equity
Global Equity Allocation
International Magnum
Latin American
Strategic Income
Tax Managed Global Franchise
Worldwide High Income
Income
Corporate Bond
Government Securities
High Income Corporate Bond
High Yield
High Yield & Total Return*
Limited Maturity Government
U.S. Government
U.S. Government Trust for Income
Capital Preservation
Reserve
Tax Free Money
Senior Loan
Prime Rate Income Trust
Senior Floating Rate
Tax Free
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
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 ongoing 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 [COMPUTER ICON]
- 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.
[PHONE ICON]
- e-mail us by visiting
WWW.VANKAMPEN.COM and
selecting Contact Us
[MAIL ICON]
* Closed to new investors
** Open to new investors for a limited time
30
<PAGE> 32
FUND OFFICERS AND IMPORTANT ADDRESSES
VAN KAMPEN ENTERPRISE FUND
BOARD OF TRUSTEES
J. MILES BRANAGAN
JERRY D. CHOATE
LINDA HUTTON HEAGY
R. CRAIG KENNEDY
MITCHELL M. MERIN*
JACK E. NELSON
RICHARD F. POWERS, III*
PHILLIP B. ROONEY
FERNANDO SISTO
WAYNE W. WHALEN* - Chairman
SUZANNE H. WOOLSEY
OFFICERS
RICHARD F. POWERS, III*
President
STEPHEN L. BOYD*
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
RICHARD A. CICCARONE*
JOHN R. REYNOLDSON*
MICHAEL H. SANTO*
JOHN H. ZIMMERMANN, 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 AUDITORS(1)
ERNST & YOUNG LLP
233 South Wacker Drive
Chicago, Illinois 60606
(1) Independent auditors for the Fund perform an annual audit of the Fund's
financial statements. The Board of Trustees has engaged Ernst & Young LLP
to be the Fund's independent auditors.
PricewaterhouseCoopers LLP ceased being the Fund's independent auditors
effective May 18, 2000. The cessation of the client-auditor relationship
between the Fund and PricewaterhouseCoopers was based solely on a possible
future business relationship by PricewaterhouseCoopers with an affiliate of
the Fund's Investment Adviser.
* "Interested persons" of the Fund, as defined in the Investment Company Act of
1940, as amended.
(C) Van Kampen Funds Inc., 2000. 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 charges on
shares of the Fund, and other pertinent
data. After December 31, 2000, the report, if used with prospective investors,
must be accompanied by a quarterly performance update, if applicable.
31
<PAGE> 33
YOUR NOTES
32
