<PAGE>
S E M I - A N N U A L R E P O R T
JUNE 30, 1997
[PICTURE]
THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
THE ENTERPRISE GROUP OF FUNDS, INC.
Enterprise Growth Portfolio
Enterprise Equity Portfolio
Enterprise Equity Income Portfolio
Enterprise Capital Appreciation Portfolio
Enterprise Small Company Value Portfolio
Enterprise International Growth Portfolio
Enterprise Government Securities Portfolio
Enterprise High-Yield Bond Portfolio
Enterprise Tax-Exempt Income Portfolio
Enterprise Managed Portfolio
Enterprise Money Market Portfolio
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
The Enterprise Growth Portfolio
Manager's Comments................................................................................. 4
Portfolio of Investments........................................................................... 6
The Enterprise Equity Portfolio
Manager's Comments................................................................................. 7
Portfolio of Investments........................................................................... 9
The Enterprise Equity Income Portfolio
Manager's Comments................................................................................. 10
Portfolio of Investments........................................................................... 12
The Enterprise Capital Appreciation Portfolio
Manager's Comments................................................................................. 15
Portfolio of Investments........................................................................... 17
The Enterprise Small Company Value Portfolio
Manager's Comments................................................................................. 19
Portfolio of Investments........................................................................... 21
The Enterprise International Growth Portfolio
Manager's Comments................................................................................. 23
Portfolio of Investments........................................................................... 25
The Enterprise Government Securities Portfolio
Manager's Comments................................................................................. 30
Portfolio of Investments........................................................................... 32
The Enterprise High-Yield Bond Portfolio
Manager's Comments................................................................................. 33
Portfolio of Investments........................................................................... 34
The Enterprise Tax-Exempt Income Portfolio
Manager's Comments................................................................................. 38
Portfolio of Investments........................................................................... 40
The Enterprise Managed Portfolio
Manager's Comments................................................................................. 43
Portfolio of Investments........................................................................... 45
The Enterprise Money Market Portfolio
Manager's Comments................................................................................. 47
Portfolio of Investments........................................................................... 48
Statement of Assets and Liabilities.................................................................. 50
Statement of Operations.............................................................................. 52
Statement of Changes in Net Assets................................................................... 54
Financial Highlights................................................................................. 58
Notes to Financial Statements........................................................................ 80
</TABLE>
Returns in this report are historical and do not guarantee future performance of
any fund. Investment return and principal value will fluctuate so that shares,
when redeemed, may be worth more or less than their cost.
<PAGE>
[LOGO]
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MESSAGE FROM THE CHAIRMAN
Dear Fellow Shareholder:
Just like most of this decade, 1997, so far, has been another good year for
investors, particularly those in U.S. stock mutual funds. According to Lipper
Analytical Services, Inc., the average diversified U.S. stock fund through June
30th has gained 12.99%. On the fixed income side, bond funds saw renewed
interest from investors searching for diversification and shelter amidst the
stock market advance. Lipper reported that the average taxable bond fund
returned 3.16% for the first six months of the year--surpassing the 0.97% CPI
level of inflation.(1)
FIRST HALF REVIEW
Stocks surged in the first half of 1997 as investors relied on the
continuance of strong earnings gains coupled with a scenario of modest economic
growth. The advance was interrupted as investors, in anticipation of the 0.25%
Federal Reserve rate hike on March 25, sent markets lower in mid-March through
the first half of April. In May and June, U.S. stocks and bonds performed well
as most economic indicators continued to point to non-inflationary growth, thus
permitting the Federal Reserve to leave interest rates unchanged.(2)
For the first six months, stocks as measured by the S&P 500 Composite Index
rose 20.61%, representing 10 quarters in a row that equities have risen.(3) Not
all stocks were treated equally as small stocks (Russell 2000: +10.21%)
continued to lag larger equities. Liquidity, global markets and predictability
of earnings in an uncertain economic environment favored the largest companies.
European markets appear to have adopted a more sanguine view towards
monetary union, despite the difficulties of both France and Germany in meeting
the critical criteria. While there is still uncertainty about both the timetable
and final participants in monetary union, there is a growing sentiment that this
union may take place on time and may be a broader union encompassing both Spain
and Italy. There have also been some recent signs of a domestic rebound in
Japan. Nonetheless, the bankruptcies of individual companies within several
sectors have provided sharp reminders that the recovery of Japan's economy may
not be as widespread as investors believe.
In the fixed income markets, intermediate rallies could not stop bonds from
moving irregularly lower in the first quarter. Yields rose to levels not seen
since September, 1996 when the 30 year U.S. Treasury surpassed 7.0% in late
March. Signs of economic slowing in the second quarter allowed the Federal
Reserve to avoid further tightening and fixed income markets to rally.
NEW ADDITIONS TO ENTERPRISE FUND FAMILY
Enterprise continues efforts to provide its shareholders with access to
investment managers and styles we believe best suited to help them reach their
investment objectives. On May 1, Enterprise introduced the Enterprise Equity
Portfolio, a large cap value investment style. The sub-adviser to this Portfolio
is OpCap Advisors, a subsidiary of Oppenheimer Capital.
Enterprise is also pleased to announce that two new portfolios, the
Enterprise Growth and Income Portfolio and the Enterprise Small Company Growth
Portfolio, were available for our shareholders effective July 17. Both funds
were acquired from Retirement System Investors Inc., which has served as
investment adviser to the funds since their inception in May 1991. The new
Enterprise Growth and Income Portfolio offers investors a blend of large
- ------------
(1) CPI is the Consumer Price Index which measures average changes in prices of
goods and services usually bought by urban wage earners and clerical
workers.
(2) THE WALL STREET JOURNAL (5/21/97)
(3) Evaluation Associates, Inc.
2 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
cap value and large cap growth investment styles. It is managed by Retirement
System Investors Inc. For investors seeking access to small cap "growth" stocks,
the new Enterprise Small Company Growth Portfolio gives investors entry to this
segment of the equity market. This Portfolio is managed by Pilgrim Baxter &
Associates while our small company "value" fund is managed by GAMCO Investors,
Inc..
While we are excited with the introduction of our new portfolios, we do not
want to forget the success achieved by other members of the Enterprise family.
During the first half of the year, the Enterprise Growth, Equity Income, Small
Company Value and Government Securities Portfolios, in particular, all received
favorable media recognition relative to their mutual fund peer groups.
LOOKING FORWARD
Looking out over the remainder of 1997, we have some reservations about the
ease with which investors have set aside the worries that dominated the markets
in March and April. On one hand, we prefer to remain cautious of the Federal
Reserve. On the other, optimism about the state of the economy makes one
reluctant to reduce investment exposure. Past performance is, of course, no
guarantee of future results. In this investment environment, investors must
continue to demonstrate patience with fluctuations in the market in order to
potentially enjoy "fundamental" market expansion.
We continue to emphasize to our shareholders long-term investment planning
over short-term trading to help achieve financial goals. No two financial goals,
of course, are exactly alike. Each requires specific investment products
tailored to the investor's asset allocation parameters and risk tolerance level.
Enterprise provides investors with a wide selection of mutual funds to cover the
complete spectrum of investment needs. It is particularly important to remember
to diversify your investments. An almost certain way to court disaster is to
place all your investment dollars in one basket. Allocating your investment
portfolio across a wide variety of funds invested in stocks and bonds both in
the U.S. and abroad may help insulate it from a downturn in any one market.
The Enterprise Group of Funds provides a level of professional money
management once reserved for only the largest institutional investors.
Enterprise's different investment portfolios are managed by separate independent
asset management firms, each a recognized specialist in its own area of
investment expertise. Selected based upon industry reputation and investment
track record, each firm is continuously monitored by Enterprise and a national
consulting firm to ensure that high standards of performance and professionalism
continue to be met. Significantly, these firms primarily manage multimillion
dollar portfolios on behalf of corporations, nonprofit organizations, and
government entities who are able to meet minimum investment requirements of up
to $35 million. Collectively, these independent firms manage well over $250
billion in investment assets.
Enterprise's distinctive management strategy provides individual investors
the benefits of diversification amongst multiple asset management firms along
with the conveniences of exchange privileges and consolidated statements -- all
with a minimum investment of as little as $1,000 per portfolio. We encourage you
to review the portfolio managers' comments in this semi-annual report. You will
find insightful commentaries and a variety of investment strategies for 1997.
Enterprise has worked diligently to create funds that invest in market
sectors that offer our shareholders the potential for attractive performance in
relation to their investment objectives. We are proud of our success to date and
appreciate your confidence in The Enterprise Group of Funds as we continue our
primary mission to add value to your investment portfolio by providing you with
special access to some of the most accomplished investment firms in the
industry.
Sincerely,
/s/ VICTOR UGOLYN
Victor Ugolyn
Chairman, President, and Chief Executive Officer
THE ENTERPRISE GROUP OF FUNDS, INC. 3
<PAGE>
THE ENTERPRISE GROWTH PORTFOLIO
MONTAG & CALDWELL, INC.
Atlanta, Georgia
INVESTMENT MANAGEMENT
Montag & Caldwell has served as investment adviser to the Growth Portfolio since
1967. Montag currently manages approximately $12 billion for institutional
clients. Montag's normal investment minimum is $20 million.
INVESTMENT OBJECTIVE
The objective of the Enterprise Growth Portfolio is to seek appreciation of
capital primarily through investments in common stocks.
INVESTMENT PHILOSOPHY
Our equity selection process is a low risk, growth stock approach. Valuation is
our key selection criterion which makes our investment style risk averse. We
also emphasize growth characteristics because we are seeking not only companies
with shares that are attractively priced but also those which should experience
strong earnings growth relative to other companies.
FIRST HALF 1997 PERFORMANCE REVIEW
Entering 1997, we had expected the stock market to be more volatile this year
but to produce a positive return even after the strong gains in 1995 and 1996.
We still have this view, since we believe inflation will remain low and well-
controlled. In our opinion, there has been a sea change in the inflation
outlook. Vigilant monetary and fiscal policies, global competitive forces and
reduced trade barriers, deregulation of markets and technological advances are
all contributing to low and well-controlled inflation throughout the world. As
economic growth moderates, continued low rates of inflation may eventually lead
to steady to lower bond yields. This may, of course, support and enhance stock
market valuations. Continued moderate rates of inflation will also mean a better
environment for corporate profit growth in 1997 and 1998.
The first quarter saw weakness in communication issues and profit taking in
various other holdings which resulted in the Enterprise Growth Portfolio
consolidating its recent strong gains. With economic growth moderating, the rate
of inflation being lower than expected, corporate profits growing at a healthy
rate and interest rates remaining steady to lower, the stock market staged an
explosive rally during the second quarter of the year. During this period, the
Portfolio benefited from the strength in its consumer, healthcare and technology
holdings. While a consolidation of these gains or a pullback in share prices may
be expected, the fundamentals suggest further but more moderate gains may occur
in the year ahead.
FUTURE INVESTMENT STRATEGY
While current stock market valuations are consistent with periods of low
inflation, valuation measures are high and continued low inflation is needed to
maintain and support them. Based on our inflation outlook, we expect this will
be the case. However, with valuations full and corporate profit growth likely to
be moderate in the year ahead, stock market gains may also be more subdued,
though respectable.
4 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
The outlook for high quality growth companies continues to be good. As corporate
profit growth moderates and inflation remains low and well controlled, these
companies' above average earnings growth rates may become increasingly
attractive. Their valuations relative to the overall market may expand from the
levels experienced when inflation was higher. Specifically, we continue to favor
the shares of multinational growth companies that may benefit from the expansion
of the global marketplace.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE
MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER
CONDITIONS.
THE ENTERPRISE GROUP OF FUNDS, INC. 5
<PAGE>
GROWTH PORTFOLIO
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Portfolio of Investments (Unaudited)
June 30, 1997
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<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
COMMON STOCKS -- 95.46% AMOUNT VALUE
<S> <C> <C>
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BUSINESS SERVICES -- 4.06%
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Interpublic Group of Companies Inc................ 140,000 $ 8,583,750
Manpower Inc...................................... 200,000 8,900,000
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17,483,750
COMPUTER HARDWARE -- 16.01%
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3Com Corporation (a).............................. 294,000 13,230,000
Adaptec Inc. (a).................................. 260,000 9,035,000
Cisco Systems Inc. (a)............................ 260,000 17,452,500
Compaq Computer Corporation (a)................... 130,000 12,902,500
Seagate Technology (a)............................ 465,600 16,383,300
------------
69,003,300
COMPUTER SERVICES -- 6.66%
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Electronic Data Systems Corporation............... 243,400 9,979,400
First Data Corporation............................ 190,000 8,348,125
Solectron Corporation (a)......................... 148,000 10,360,000
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28,687,525
COMPUTER SOFTWARE -- 8.72%
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Electronic Arts (a)............................... 280,000 9,415,000
Microsoft Corporation (a)......................... 124,000 15,670,500
Oracle System Corporation (a)..................... 248,000 12,493,000
------------
37,578,500
CONSUMER DURABLES -- 2.00%
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Harley Davidson Inc............................... 180,000 8,628,750
CONSUMER NON-DURABLES -- 8.02%
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Gillette Company.................................. 180,000 17,055,000
Procter & Gamble Company.......................... 124,000 17,515,000
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34,570,000
ENTERTAINMENT & LEISURE -- 2.98%
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Walt Disney Company............................... 160,000 12,840,000
FINANCE -- 4.79%
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American Express Company.......................... 160,000 11,920,000
Federal National Mortgage Association............. 200,000 8,725,000
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20,645,000
FOOD & BEVERAGES & TOBACCO -- 5.67%
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Coca-Cola Company................................. 220,000 14,850,000
Pioneer Hi Bred International Inc................. 120,000 9,600,000
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24,450,000
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
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HEALTH CARE -- 3.20%
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Medtronic Inc..................................... 170,000 $ 13,770,000
HOTELS & RESTAURANTS -- 3.56%
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Cracker Barrel Old Country Store.................. 170,000 4,505,000
Marriott International Inc........................ 176,800 10,851,100
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15,356,100
PHARMACEUTICALS -- 16.59%
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Bristol Myers Squibb Company...................... 160,600 13,008,600
Johnson & Johnson................................. 270,000 17,381,250
Lilly Eli & Company............................... 125,000 13,664,063
Merck & Company Inc............................... 136,000 14,076,000
Pfizer Inc........................................ 112,000 13,384,000
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71,513,913
RETAIL -- 7.42%
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Cuc International Inc. (a)........................ 400,000 10,325,000
Gap Inc........................................... 220,000 8,552,500
Home Depot Inc.................................... 190,000 13,098,125
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31,975,625
TECHNOLOGY -- 3.95%
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Intel Corporation................................. 120,000 17,017,500
TELECOMMUNICATIONS -- 1.83%
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Ericsson L M Tel Company (ADR).................... 200,000 7,875,000
TOTAL COMMON STOCKS
(IDENTIFIED COST $273,497,257).................................. 411,394,963
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REPURCHASE AGREEMENT -- 3.45%
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State Street Bank & Trust Repurchase Agreement,
5.00% due 07/01/97
Collateral: U.S. Treasury Note $14,815,000, 5.875%
due 1/31/99 Value $15,152,501..................... $14,855,000 14,855,000
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TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $14,855,000)................................... 14,855,000
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TOTAL INVESTMENTS
(IDENTIFIED COST $288,352,257).................................. $426,249,963
OTHER ASSETS LESS LIABILITIES -- 1.09%.......................... 4,715,796
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NET ASSETS -- 100%.............................................. $430,965,759
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</TABLE>
(a) Non-income Producing
ADR American Depository Receipts
See notes to financial statements.
6 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
THE ENTERPRISE EQUITY PORTFOLIO
OPCAP ADVISORS
New York, New York
INVESTMENT MANAGEMENT
OpCap Advisors, a wholly owned subsidiary of Oppenheimer Capital, became
investment adviser to this new Enterprise fund on May 1, 1997. Oppenheimer
Capital currently manages approximately $57 billion for institutional clients.
OpCap's normal investment minimum is $10 million.
INVESTMENT OBJECTIVE
The objective of the Enterprise Equity Portfolio is long term capital
appreciation primarily from investments in securities of companies that are
believed by the portfolio manager to be undervalued in the marketplace in
relation to factors such as the companies' assets or earnings.
INVESTMENT PHILOSOPHY
Our investment process uses a fundamental, bottom-up process of value investing.
The security selection process focuses on well positioned companies which have
high returns on assets and free cash flow, strong barriers to competition,
managements oriented to shareholder interests and sell at reasonable valuation
levels. A complete qualitative review of the business relative to its peers and
its history is the key to the process. We seek securities whose undervaluation
is great enough to provide significant upside reward with modest downside risk.
FIRST HALF 1997 PERFORMANCE REVIEW
Starting on May 1, a diverse group of large capitalization and mid
capitalization stocks were acquired by the Equity Portfolio. Many of the
companies owned by the Portfolio are in seemingly mundane businesses, yet their
leadership positions permit them to earn high and improving returns on capital.
Caterpillar, Inc. (earth moving equipment and diesel engines) is a low cost,
high quality producer worldwide and its service network represents a formidable
barrier to entry by competitors. Dover Corporation (diversified industrial
products) enjoys a return on invested capital of nearly 30% in its eclectic
portfolio of companies with leading market shares in niche businesses. In each
of these companies, management has focused on maximizing cash flow returns on
capital and using that cash flow to create wealth for shareholders, such as by
investing in high return business opportunities or repurchasing shares.
We maintained a relatively defensive investment posture throughout the quarter.
Investments were allocated 81% to common stocks and 19% to cash and cash
equivalents at June 30, 1997. The Portfolio's above average cash position is a
buffer against market volatility and more importantly, provides a resource to
purchase quality stocks opportunistically as they become available at attractive
prices.
FUTURE INVESTMENT STRATEGY
We continue to invest in businesses that are worth inherently more, in our
judgment, than their asking prices. We hope to preserve the Portfolio's capital
in all market conditions, including market corrections, because we have
maintained our value price discipline and because the businesses in which we
invest tend to generate excess cash, which becomes more valuable in difficult
markets.
THE ENTERPRISE GROUP OF FUNDS, INC. 7
<PAGE>
Even when we identify a business that meets our criteria, including high
sustainable returns on capital, we are very conscious about not paying too much
for the company's stock. Buying stocks at reasonable valuations is very
important to us, since the price we pay should be low enough to offer both
significant opportunity for investment profit and meaningful protection against
a severe price decline. We believe our focus on value and long term perspective
are a tremendous advantage in a stock market which is driven by transitory
considerations.
In general, we find the stock market to be fully valued at this time. However,
we are not market timers and do not have an opinion as to whether the market
will be higher or lower a month from now than it is today. We buy individual
stocks, not the market. Using our above average cash reserves, we will be
opportunistic in buying stocks we like when we can get them at favorable prices.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE
MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER
CONDITIONS.
8 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
EQUITY PORTFOLIO
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Portfolio of Investments (Unaudited)
June 30, 1997
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<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
COMMON STOCKS -- 86.34% AMOUNT VALUE
<S> <C> <C>
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AEROSPACE -- 3.57%
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Lockheed Martin Corporation....................... 700 $ 72,494
BANKING -- 9.16%
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BankBoston Corporation............................ 1,000 72,063
Citicorp.......................................... 500 60,281
Wells Fargo & Company............................. 200 53,900
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186,244
CHEMICALS -- 2.47%
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Du Pont (E. I.) De Nemours & Company.............. 800 50,300
COMPUTER SERVICES -- 3.03%
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Gateway 2000 Inc.................................. 1,900 61,631
COMPUTER SOFTWARE -- 2.74%
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Computer Associates International Inc............. 1,000 55,688
CONGLOMERATES -- 5.51%
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General Electric Company.......................... 800 52,300
Textron Inc....................................... 900 59,737
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112,037
CONSUMER DURABLES -- 2.71%
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Snap-On Inc....................................... 1,400 55,125
CONSUMER PRODUCTS -- 2.50%
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Mattel Inc........................................ 1,500 50,813
DRUGS & MEDICAL PRODUCTS -- 3.49%
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Becton, Dickinson & Company....................... 1,400 70,875
ELECTRICAL EQUIPMENT -- 2.69%
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Oak Industries Inc................................ 1,900 54,625
HEALTH CARE -- 3.78%
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Tenet Healthcare Corporation (a).................. 2,600 76,862
INSURANCE -- 16.06%
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American International Group Inc.................. 300 44,813
Everest Reinsurance Holdings...................... 1,400 55,475
General Re Corporation............................ 500 91,000
Mid Ocean Ltd..................................... 1,200 62,925
Renaissance Holdings Ltd.......................... 1,900 72,437
-------------
326,650
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
MACHINERY -- 7.02%
- ---------------------------------------------------------------------------------
Caterpillar, Inc.................................. 700 $ 75,162
Dover Corporation................................. 1,100 67,650
-------------
142,812
MISC. FINANCIAL SERVICES -- 4.84%
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Countrywide Credit Industries Inc................. 1,500 46,781
Federal Home Loan Mortgage Corporation............ 1,500 51,563
-------------
98,344
PUBLISHING -- 2.16%
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Donnelley R R & Sons Company...................... 1,200 43,950
RESTAURANTS -- 3.09%
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McDonalds Corporation............................. 1,300 62,806
RETAIL -- 3.02%
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May Department Stores Company..................... 1,300 61,425
TELECOMMUNICATIONS -- 3.36%
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Sprint Corporation................................ 1,300 68,413
TRANSPORTATION -- 5.14%
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AMR Corporation (a)............................... 700 64,750
Canadian Pacific Limited.......................... 1,400 39,812
-------------
104,562
TOTAL COMMON STOCKS
(IDENTIFIED COST $1,629,994)..................................... 1,755,656
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REPURCHASE AGREEMENT -- 19.67%
- ---------------------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement, 2.00% due
07/01/97
Collateral: U.S. Treasury
Note $410,000, 5.75% due 12/31/98
Value $408,912.................................... $ 400,000 400,000
-------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $400,000)....................................... 400,000
- ---------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $2,029,994)..................................... $ 2,155,656
OTHER ASSETS LESS LIABILITIES -- (6.01)%......................... (122,199)
-------------
NET ASSETS -- 100%............................................... $ 2,033,457
- ---------------------------------------------------------------------------------
</TABLE>
(a) Non-income Producing
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 9
<PAGE>
THE ENTERPRISE EQUITY INCOME PORTFOLIO
1740 ADVISERS, INC.
New York, New York
INVESTMENT MANAGEMENT
1740 Advisers has been an investment adviser to the Enterprise Equity Income
Portfolio since its inception. 1740 Advisers currently manages over $1 billion
for institutional clients. 1740 Advisers' normal investment minimum is $20
million.
INVESTMENT OBJECTIVE
The objective of the Enterprise Equity Income Portfolio is to seek a combination
of growth and income to achieve an above average and consistent total return,
primarily from investments in dividend-paying common stocks.
INVESTMENT PHILOSOPHY
Above average returns can be achieved by buying undervalued, out of favored
stocks and selling them after the market has recognized and corrected their
under valuation. Dividend yield relative to the S&P 500 is the measure of the
value used in this strategy. It provides a disciplined approach to buy and sell
decisions, potentially enhanced stability in the portfolio and may lower overall
market risk.
FIRST HALF 1997 PERFORMANCE REVIEW
After a weak first quarter, the stock market moved up sharply in the second
quarter, setting new highs in the popular averages but also improving breadth.
The economic news was very favorable, creating a return to the "Goldilocks"
economy -- not too fast and not too slow. Inflation news was positive with both
the producer and consumer indices showing a flat trend. Interest rates drifted
lower, mutual fund inflows continued and stock prices exploded to the upside.
In the first quarter, the Enterprise Equity Income Portfolio was helped by solid
performance from financial, healthcare, energy and cyclical stocks. However, the
market began to sell off late in the quarter in anticipation of higher interest
rates and weaker earnings. In the second quarter, the Portfolio was helped by
good performance from the financial, healthcare and capital goods stocks. The
Portfolio's underweight in technology, which helped returns in the first
quarter, hurt in the second as technology roared back.
FUTURE INVESTMENT STRATEGY
Looking to the second half, with the expectation of slower growth, it seems that
earnings gains may be more difficult to achieve. Reduced consumer spending, lack
of pricing power, lower revenues and the fact that most of the easy cost cutting
has already taken place may limit earnings. This same set of circumstances may
also produce lower interest rates, aiding valuations, but making stock selection
more important in a tougher earnings environment. After a very strong first
half, a somewhat defensive posture seems warranted.
The strategy for the second half is to increase the emphasis on defensive
sectors and those where earnings look potentially more assured and on names
which have not been fully exploited in the market's rise. Defensive sectors
which are being emphasized are the telephones, some international oils and
diversified natural gas companies. Some areas which may have relatively more
stable earnings include healthcare and financial services. The final area of
10 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
emphasis, sectors and companies which may not be overextended and overexploited,
mainly fall in the economy sensitive areas. These include capital goods such as
machinery and diversified manufacturing as well as basic materials, including
forest products, paper and metals. This strategy recognizes that the market has
been going up for a long time, valuations of the market may be high and that
expectations for market favorites may be even higher. The risks have increased
and some defensiveness is in order.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE
MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER
CONDITIONS.
THE ENTERPRISE GROUP OF FUNDS, INC. 11
<PAGE>
EQUITY INCOME PORTFOLIO
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
COMMON STOCKS -- 91.26% AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
AEROSPACE -- 3.14%
- ---------------------------------------------------------------------------------
Northrop Grumman Corporation...................... 10,000 $ 878,125
Timken Company.................................... 30,000 1,066,875
United Technologies Corporation................... 14,000 1,162,000
-------------
3,107,000
AUTOMOTIVE -- 2.19%
- ---------------------------------------------------------------------------------
Eaton Corporation................................. 12,000 1,047,750
Ford Motor Company Delaware....................... 15,000 566,250
General Motors Corporation........................ 10,000 556,875
-------------
2,170,875
BANKING -- 4.43%
- ---------------------------------------------------------------------------------
Bankers Trust New York Corporation................ 7,000 609,000
Chase Manhattan Corporation....................... 10,000 970,625
First Union Corporation........................... 12,000 1,110,000
NationsBank Corporation........................... 18,000 1,161,000
Wells Fargo & Company............................. 2,000 539,000
-------------
4,389,625
BUILDING & CONSTRUCTION -- 0.00%
- ---------------------------------------------------------------------------------
Morrison Knudsen Corporation (Wts)(a)............. 309 1,931
CAPITAL GOODS & SERVICES -- 9.71%
- ---------------------------------------------------------------------------------
Cooper Industries Inc............................. 20,000 995,000
Deere & Company................................... 20,000 1,097,500
General Electric Company.......................... 45,000 2,941,875
General Signal Corporation........................ 20,000 872,500
Harsco Corporation................................ 20,000 810,000
Textron Inc....................................... 20,000 1,327,500
Xerox Corporation................................. 20,000 1,577,500
-------------
9,621,875
CHEMICALS -- 3.38%
- ---------------------------------------------------------------------------------
Du Pont (E. I.) De Nemours & Company.............. 24,000 1,509,000
Monsanto Company.................................. 20,000 861,250
Olin Corporation.................................. 25,000 976,562
-------------
3,346,812
CONSUMER DURABLES -- 2.35%
- ---------------------------------------------------------------------------------
Dana Corporation.................................. 25,000 950,000
Emerson Electric Company.......................... 25,000 1,376,563
-------------
2,326,563
CONSUMER NON-DURABLES -- 1.91%
- ---------------------------------------------------------------------------------
Avon Products Inc................................. 16,000 1,129,000
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Eastman Kodak Company............................. 10,000 $ 767,500
-------------
1,896,500
CONSUMER PRODUCTS -- 1.32%
- ---------------------------------------------------------------------------------
Colgate Palmolive Company......................... 20,000 1,305,000
CRUDE & PETROLEUM -- 0.06%
- ---------------------------------------------------------------------------------
MCN Energy Group Inc.............................. 2,000 61,250
ELECTRONICS -- 1.26%
- ---------------------------------------------------------------------------------
Amp Inc........................................... 30,000 1,252,500
ENERGY -- 12.94%
- ---------------------------------------------------------------------------------
Amoco Corporation................................. 10,000 869,375
Atlantic Richfield Company........................ 10,000 705,000
British Petroleum PLC (ADR)....................... 12,000 898,500
Chevron Corporation............................... 12,000 887,250
Consolidated Natural Gas
Company........................................... 12,000 645,750
Dresser Industries Inc............................ 30,000 1,117,500
El Paso Natural Gas Company....................... 15,000 825,000
Exxon Corporation................................. 20,000 1,230,000
Mobil Corporation................................. 14,000 978,250
Questar Corporation............................... 16,000 646,000
Royal Dutch Petroleum Company..................... 5,000 1,068,125
Sonat Inc......................................... 15,000 768,750
Texaco Inc........................................ 10,000 1,087,500
Williams Companies Inc............................ 25,000 1,093,750
-------------
12,820,750
FINANCE -- 6.72%
- ---------------------------------------------------------------------------------
American Express Company.......................... 15,000 1,117,500
Bank Of New York Company Inc...................... 20,000 870,000
BankAmerica Corporation........................... 18,000 1,162,125
Federal National Mortgage Association............. 20,000 872,500
Great Western Financial Corporation............... 25,000 1,343,750
H F Ahmanson & Company............................ 30,000 1,290,000
-------------
6,655,875
FOOD & BEVERAGES & TOBACCO -- 1.79%
- ---------------------------------------------------------------------------------
Fortune Brands Inc................................ 15,000 559,687
Gallaher Group P L C.............................. 15,000 276,563
Philip Morris Companies Inc....................... 21,000 931,875
-------------
1,768,125
HOTELS & RESTAURANTS -- 0.56%
- ---------------------------------------------------------------------------------
Felcor Suite Hotels Inc........................... 15,000 558,750
INSURANCE -- 3.70%
- ---------------------------------------------------------------------------------
</TABLE>
12 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
EQUITY INCOME PORTFOLIO -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Aetna Inc......................................... 7,000 $ 716,625
Cigna Corporation................................. 6,000 1,065,000
Lincoln National Corporation...................... 15,000 965,625
St Paul Companies Inc............................. 12,000 915,000
-------------
3,662,250
MACHINERY -- 1.05%
- ---------------------------------------------------------------------------------
Pitney Bowes Inc.................................. 15,000 1,042,500
PAPER & FOREST PRODUCTS -- 2.02%
- ---------------------------------------------------------------------------------
Georgia Pacific Corporation....................... 12,000 1,024,500
International Paper Company....................... 20,000 971,250
-------------
1,995,750
PHARMACEUTICALS -- 9.00%
- ---------------------------------------------------------------------------------
American Home Products Corporation................ 16,000 1,224,000
Baxter International Inc.......................... 20,000 1,045,000
Bristol Myers Squibb Company...................... 14,000 1,134,000
Lilly Eli & Company............................... 10,000 1,093,125
Merck & Company Inc............................... 10,000 1,035,000
Schering Plough Corporation....................... 14,000 670,250
Smithkline Beecham P L C (ADR).................... 12,000 1,099,500
Warner-Lambert Company............................ 13,000 1,615,250
-------------
8,916,125
PUBLISHING -- 1.31%
- ---------------------------------------------------------------------------------
McGraw Hill Inc................................... 22,000 1,293,875
RAW MATERIALS -- 6.34%
- ---------------------------------------------------------------------------------
Carpenter Technology Corporation.................. 15,000 686,250
Freeport McMoRan Copper & Gold Inc................ 15,000 438,750
Minnesota Mining & Manufacturing Company.......... 10,000 1,020,000
Phelps Dodge Corporation.......................... 12,000 1,022,250
Reynolds Metals Company........................... 15,000 1,068,750
Union Camp Corporation............................ 20,000 1,000,000
Weyerhaeuser Company.............................. 20,000 1,040,000
-------------
6,276,000
REAL ESTATE -- 2.53%
- ---------------------------------------------------------------------------------
Bay Apartment Communities......................... 10,000 370,000
Crescent Operating Inc............................ 1,500 18,000
Crescent Real Estate Equities..................... 15,000 476,250
Developers Diversified Realty..................... 7,000 280,000
Equity Residential Properties Trust............... 6,000 285,000
Health Care Property Investors Inc................ 8,000 282,000
Irvine Apartment Communities Inc.................. 15,000 442,500
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Public Storage Inc................................ 12,000 $ 351,000
-------------
2,504,750
TECHNOLOGY -- 3.17%
- ---------------------------------------------------------------------------------
Harris Corporation Delaware....................... 14,000 1,176,000
Honeywell Inc..................................... 12,000 910,500
Thomas & Betts Corporation........................ 20,000 1,051,250
-------------
3,137,750
TELECOMMUNICATIONS -- 6.28%
- ---------------------------------------------------------------------------------
Ameritech Corporation............................. 15,000 1,019,062
Bell Atlantic Corporation......................... 15,000 1,138,125
BellSouth Corporation............................. 20,000 927,500
GTE Corporation................................... 16,000 702,000
NYNEX Corporation................................. 7,000 403,375
SBC Communications Inc............................ 20,000 1,237,500
Sprint Corporation................................ 15,000 789,375
-------------
6,216,937
TRANSPORTATION -- 2.08%
- ---------------------------------------------------------------------------------
Norfolk Southern Corporation...................... 10,000 1,007,500
Union Pacific Corporation......................... 15,000 1,057,500
-------------
2,065,000
UTILITIES -- 2.02%
- ---------------------------------------------------------------------------------
American Electric Power Inc....................... 12,000 504,000
Carolina Power & Light Company.................... 13,000 466,375
FPL Group Inc..................................... 10,000 460,625
U.S. West Communications Group.................... 15,000 565,313
-------------
1,996,313
TOTAL COMMON STOCKS
(IDENTIFIED COST $58,961,406).................................... 90,390,681
- ---------------------------------------------------------------------------------
COMMERCIAL PAPER -- 8.03%
- ---------------------------------------------------------------------------------
Associates Corporation of North America, 5.53% due
07/11/97.......................................... $ 900,000 898,617
Associates Corporation of North America, 5.61% due
07/24/97.......................................... 300,000 298,925
Bell Atlantic Financial Services 5.52% due
07/16/97.......................................... 1,680,000 1,676,136
CIT Group Holdings Inc. 5.53% due 07/28/97........ 200,000 199,171
General Electric Capital Corporation, 5.52% due
07/25/97.......................................... 600,000 597,792
General Motors Acceptance Corporation, 5.55% due
07/02/97.......................................... 200,000 199,969
JHM Funding Inc. 5.60% due 08/12/97............... 1,000,000 993,467
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 13
<PAGE>
EQUITY INCOME PORTFOLIO -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Sanwa Business Credit Corporation, 5.55% due
07/15/97.......................................... $ 300,000 $ 299,352
Sanwa Business Credit Corporation, 5.57% due
08/07/97.......................................... 1,100,000 1,093,703
Sears Roebuck Acceptance Corporation, 5.56% due
07/08/97.......................................... 1,000,000 998,919
Sears Roebuck Acceptance Corporation, 5.56% due
07/21/97.......................................... 500,000 498,456
Ford Motor Credit Company 5.61% due 07/07/97...... 200,000 199,813
-------------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $7,954,320)..................................... 7,954,320
- ---------------------------------------------------------------------------------
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 0.10%
- ---------------------------------------------------------------------------------
State Street Bank & Trust Repurchase Agreement,
2.00% due 07/01/97
Collateral: U.S. Treasury Note $105,000, 5.875%
due 10/31/98 Value $105,924....................... $ 100,000 $ 100,000
-------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $100,000)....................................... 100,000
- ---------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $67,015,726).................................... $ 98,445,001
OTHER ASSETS LESS LIABILITIES -- 0.61%........................... 604,631
-------------
NET ASSETS -- 100%............................................... $ 99,049,632
- ---------------------------------------------------------------------------------
</TABLE>
ADR American Depository Receipts
Wts Warrants
(a) Non-income producing
See notes to financial statements.
14 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
THE ENTERPRISE CAPITAL APPRECIATION PORTFOLIO
PROVIDENT INVESTMENT COUNSEL, INC.
Pasadena, California
INVESTMENT MANAGEMENT
Provident Investment Counsel has been the investment adviser to the Enterprise
Capital Appreciation Portfolio since inception. Provident Investment Counsel
currently manages approximately $19 billion for institutional clients.
Provident's usual investment minimum is $5 million.
INVESTMENT OBJECTIVE
The objective of the Enterprise Capital Appreciation Portfolio is to seek
maximum capital appreciation, primarily through investment in common stock of
companies that demonstrate accelerating earnings momentum and consistently
strong financial characteristics.
INVESTMENT PHILOSOPHY
Our investment philosophy is based on the belief that, over time, the reason the
price of a company's stock increases is because its earnings are increasing. Our
investment strategy seeks to create a portfolio of companies that, in aggregate,
is growing its earnings at a faster and more consistent rate than the overall
market.
FIRST HALF 1997 PERFORMANCE REVIEW
Driven by predictable and sustainable earnings growth, the Enterprise Capital
Appreciation Portfolio produced healthy gains during the first half of 1997. The
returns were heavily influenced both by its growth characteristics and mid cap
bias. While the Portfolio returns benefited from investors desire for shares of
strong, consistent growth companies, it was also hindered by its orientation
towards the middle capitalization sector of the market. In terms of performance,
the mid cap segment of the market lagged both the large and small cap areas over
the most recent three month period.
From a sector perspective, strong gains in the areas where the Portfolio had its
greatest exposure contributed most to the Portfolio's overall returns.
Healthcare, driven mainly by drug stocks like Pfizer and Elan, posted very
strong results during the first half of 1997. Shares of select finance companies
also outperformed, as the fundamental backdrop of low, stable interest rates
provided a strong environment for interest sensitive issues.
In the technology sector, shares of selected electronic equipment producers,
such as Tellabs and Lucent Technologies, contributed to portfolio gains as the
market rewarded an improving pricing and profitability environment. Lastly,
energy related issues, an area where we have increased our exposure, also
provided healthy returns.
FUTURE INVESTMENT STRATEGY
Looking forward to the second half of 1997, we expect earnings growth and
profitability to be the key issues for equity investors. Should overall earnings
growth slow as consensus estimates forecast, investors may continue to demand
high quality companies with both visible and sustainable earnings. It is an
environment that is particularly conducive to growth stocks which can maintain
solid revenue growth and strong profit margins. Furthermore, the Enterprise
Capital Appreciation Portfolio is well positioned to benefit from the potential
continued demand for
THE ENTERPRISE GROUP OF FUNDS, INC. 15
<PAGE>
growth shares with its emphasis on high quality growth companies. Lastly, we
will continue the Portfolio's migration toward the mid cap area of the market.
As opportunities arise and valuation levels become increasingly attractive, we
will selectively position the Portfolio to benefit from those mid cap companies
where fundamentals have yet to be realized by the overall market in terms of
stock price appreciation.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE
MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER
CONDITIONS.
16 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
CAPITAL APPRECIATION PORTFOLIO
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
COMMON STOCKS -- 94.19% AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
BUSINESS SERVICES -- 7.13%
- ---------------------------------------------------------------------------------
Computer Sciences Corporation (a)................. 17,000 $ 1,226,125
Cuc International Inc. (a)........................ 29,100 751,144
Danka Business Systems (ADR)...................... 16,800 686,700
First Data Corporation............................ 90,000 3,954,375
Paychex Inc....................................... 49,500 1,881,000
-------------
8,499,344
CAPITAL GOODS & SERVICES -- 3.95%
- ---------------------------------------------------------------------------------
Tyco International Ltd (a)........................ 67,600 4,702,425
COMPUTER SERVICES -- 2.71%
- ---------------------------------------------------------------------------------
HBO & Company..................................... 30,000 2,066,250
Sungard Data Systems Inc. (a)..................... 25,000 1,162,500
-------------
3,228,750
COMPUTER SOFTWARE -- 3.35%
- ---------------------------------------------------------------------------------
Microsoft Corporation (a)......................... 21,200 2,679,150
Sterling Commerce Inc. (a)........................ 40,000 1,315,000
-------------
3,994,150
CONSUMER NON-DURABLES -- 2.16%
- ---------------------------------------------------------------------------------
Gillette Company.................................. 27,200 2,577,200
CRUDE & PETROLEUM -- 1.23%
- ---------------------------------------------------------------------------------
Petroleum Geo Services (ADR) (a).................. 30,000 1,466,250
DRUGS & MEDICAL PRODUCTS -- 1.13%
- ---------------------------------------------------------------------------------
Boston Scientific Corporation (a)................. 22,000 1,351,625
ENERGY -- 5.46%
- ---------------------------------------------------------------------------------
AES Corporation (a)............................... 40,000 2,830,000
Global Marine Inc. (a)............................ 100,000 2,325,000
Tosco Corporation................................. 45,000 1,347,188
-------------
6,502,188
FINANCE -- 11.43%
- ---------------------------------------------------------------------------------
Associates First Capital Corporation (a).......... 44,900 2,491,950
Federal Home Loan Mortgage Corporation............ 34,800 1,196,250
Federal National Mortgage Association............. 55,600 2,425,550
Green Tree Financial Corporation.................. 30,000 1,068,750
MBNA Corporation.................................. 138,112 5,058,352
State Street Corporation.......................... 30,000 1,387,500
-------------
13,628,352
HEALTH CARE -- 16.24%
- ---------------------------------------------------------------------------------
Cardinal Health Inc............................... 47,400 2,713,650
Healthsouth Corporation (a)....................... 90,600 2,259,337
Medtronic Inc..................................... 35,300 $ 2,859,300
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Omnicare Inc...................................... 58,000 1,819,750
Oxford Health Plans Inc. (a)...................... 49,400 3,544,450
Pfizer Inc........................................ 39,200 4,684,400
Tenet Healthcare Corporation (a).................. 50,000 1,478,125
-------------
19,359,012
HOTELS & RESTAURANTS -- 3.57%
- ---------------------------------------------------------------------------------
HFS Inc. (a)...................................... 50,000 2,900,000
Promus Hotel Corporation (a)...................... 35,000 1,356,250
-------------
4,256,250
INSURANCE -- 2.84%
- ---------------------------------------------------------------------------------
American International Group Inc.................. 9,850 1,471,344
MGIC Investment Corporation....................... 40,000 1,917,500
-------------
3,388,844
MACHINERY -- 2.27%
- ---------------------------------------------------------------------------------
Culligan Water Technologies Inc. (a).............. 30,000 1,342,500
United States Filter Corporation (a).............. 50,000 1,362,500
-------------
2,705,000
MEDICAL SERVICES -- 2.34%
- ---------------------------------------------------------------------------------
Quintiles Transnational Corporation (a)........... 40,000 2,785,000
OIL SERVICES -- 4.72%
- ---------------------------------------------------------------------------------
Reading & Bates Corporation (a)................... 33,000 882,750
Santa Fe International Corporation (a)............ 55,000 1,870,000
Schlumberger Ltd.................................. 23,000 2,875,000
-------------
5,627,750
PHARMACEUTICALS -- 5.57%
- ---------------------------------------------------------------------------------
Elan PLC (ADR) (a)................................ 40,000 1,810,000
Lilly Eli & Company............................... 30,000 3,279,375
McKesson Corporation.............................. 20,000 1,550,000
-------------
6,639,375
RETAIL -- 9.44%
- ---------------------------------------------------------------------------------
Costco Companies Inc. (a)......................... 65,000 2,136,875
CVS Corporation................................... 28,000 1,435,000
Dollar General Corporation........................ 44,000 1,650,000
Family Dollar Stores Inc.......................... 45,000 1,226,250
Kohls Corporation (a)............................. 22,000 1,164,625
Polo Ralph Lauren Corporation (a)................. 40,000 1,095,000
Safeway Inc. (a).................................. 35,000 1,614,375
Tiffany & Company................................. 20,000 923,750
-------------
11,245,875
TECHNOLOGY -- 2.72%
- ---------------------------------------------------------------------------------
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 17
<PAGE>
CAPITAL APPRECIATION PORTFOLIO -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Lucent Technologies Inc........................... 45,000 $ 3,242,813
TELECOMMUNICATIONS -- 5.93%
- ---------------------------------------------------------------------------------
ADC Telecommunications Inc. (a)................... 40,000 1,335,000
Ericsson L M Tel Company (ADR).................... 58,300 2,295,562
Tellabs Inc. (a).................................. 30,000 1,676,250
Worldcom Inc. (a)................................. 55,000 1,760,000
-------------
7,066,812
TOTAL COMMON STOCKS
(IDENTIFIED COST $71,560,695).................................... 112,267,015
- ---------------------------------------------------------------------------------
COMMERCIAL PAPER -- 3.36%
- ---------------------------------------------------------------------------------
General Electric Capital Corporation, 5.53% due
07/17/97.......................................... $ 4,000,000 4,000,000
-------------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $4,000,000)..................................... 4,000,000
- ---------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 2.36%
- ---------------------------------------------------------------------------------
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
State Street Bank & Trust Repurchase Agreement,
4.00% due 07/01/97
Collateral: U.S. Treasury Note, $2,895,000, 4.75%
due 10/31/98 Value $2,873,916..................... $ 2,815,000 $ 2,815,000
-------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $2,815,000)..................................... 2,815,000
- ---------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $78,375,695).................................... $ 119,082,015
OTHER ASSETS LESS LIABILITIES -- 0.09%........................... 107,505
-------------
NET ASSETS -- 100%............................................... $ 119,189,520
- ---------------------------------------------------------------------------------
</TABLE>
(a) Non-income Producing
ADR American Depository Receipts
See notes to financial statements.
18 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
THE ENTERPRISE SMALL COMPANY VALUE PORTFOLIO
GAMCO INVESTORS, INC.
Rye, New York
INVESTMENT MANAGEMENT
GAMCO Investors, Inc., which currently manages over $5 billion for institutional
clients, became manager of the Portfolio on July 1, 1996. GAMCO's normal
investment minimum is $1 million.
INVESTMENT OBJECTIVE
The objective of the Enterprise Small Company Value Portfolio is to seek maximum
capital appreciation, primarily through investment in the equity securities of
companies which have a market capitalization of no more than $1 billion.
INVESTMENT PHILOSOPHY
Our focus is on free cash flow. We believe free cash flow is the best barometer
of a business' value. Rising free cash flow often foreshadows net earnings
improvement. We also look at long-term earnings trends. In addition, we analyze
on and off balance sheet assets and liabilities. We want to know everything that
will add or detract from our private market value estimates. Finally, we look
for a catalyst: something happening in the company's industry or indigenous to
the company itself that will surface value.
FIRST HALF 1997 PERFORMANCE REVIEW
In the first half of 1997, the sun, moon and stars all came into alignment in
the form of modest economic growth, low inflation and strong corporate earnings.
The Federal Reserve and corporate managements have reduced economic volatility
while establishing more modest but sustainable economic growth. The billions of
new consumers in the global marketplace have added extra secular growth to the
economy, perhaps diluting the cyclical effects of prior economic policy.
Inflation is not dead, but it is certainly subdued.
Among the best performers in the Portfolio during the first six months of 1997
was Cablevision Systems Corporation, up 76%. News Corporation's Fox unit
purchased 40% of Cablevision's Rainbow cable network and programming unit. Cable
stocks received another positive jolt when Microsoft's Bill Gates, recognizing
that cable lines were likely to continue to be the speediest data transmission
highway into the home, invested $1 billion in Comcast Corporation.
Another significant Portfolio gainer was International Family Entertainment
(IFE), up 93%. News Corp. offered $35 per share for IFE. Deals affecting
Portfolio holdings, however, were not confined to the media and entertainment
industry. ITT Industries bought Goulds Pumps for $37 per share and the bidding
contest for Dynamics Corp. escalated to a $58 per share completed offer for 50%
by CTS Corp.
FUTURE INVESTMENT STRATEGY
Stock investors are reaping the benefits of the almost decade long cost cutting
efforts of corporate America. Management has restructured and technology has
contributed to enormous productivity gains. While the economy
THE ENTERPRISE GROUP OF FUNDS, INC. 19
<PAGE>
has chugged along at a modest 3% to 4% growth rate for the past three years,
corporate earnings have grown double digits. One of the consequences of a
slowing economy may be corporate earnings growth below enhanced expectations. We
are likely to see disappointments and we expect that investors will not be kind
to companies announcing earnings shortfalls.
The economy may turn out to be very good in 1997. The reservoir of growth
opportunities in Europe, Japan and Latin America should help United States
exports. On balance, modest growth over the next twelve months appears
reasonable. Inflation concerns center around labor, commodities and energy,
since we produce less and consume more.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE
MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER
CONDITIONS.
20 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
SMALL COMPANY VALUE PORTFOLIO
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
COMMON STOCKS -- 88.44% AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
ADVERTISING -- 1.98%
- ---------------------------------------------------------------------------------
Ackerley Inc...................................... 55,000 $ 618,750
AEROSPACE -- 9.81%
- ---------------------------------------------------------------------------------
Coltec Industries Inc. (a)........................ 20,000 390,000
Curtiss Wright Corporation........................ 6,000 349,500
Gencorp Inc....................................... 20,000 462,500
Sequa Corporation (Class A)....................... 18,000 1,014,750
SPS Technologies Inc.............................. 12,000 849,000
-------------
3,065,750
APPAREL & TEXTILES -- 2.43%
- ---------------------------------------------------------------------------------
Fieldcrest Cannon Inc............................. 40,000 760,000
AUTOMOTIVE -- 2.20%
- ---------------------------------------------------------------------------------
Modine Manufacturing Company...................... 1,000 29,750
Scheib Earl Inc................................... 60,000 363,750
Wynns International Inc........................... 10,351 293,710
-------------
687,210
BROADCASTING -- 14.45%
- ---------------------------------------------------------------------------------
BET Holdings Inc. (a)............................. 18,000 589,500
Chris Craft Industries Inc........................ 10,715 516,999
Gaylord Entertainment Company..................... 20,000 461,250
HSN Inc........................................... 25,000 781,250
International Family Entertainment Inc............ 40,000 1,375,000
United Television Inc............................. 8,000 792,000
-------------
4,515,999
CABLE -- 3.20%
- ---------------------------------------------------------------------------------
Cablevision Systems Corporation (a)............... 18,500 999,000
CAPITAL GOODS & SERVICES -- 1.03%
- ---------------------------------------------------------------------------------
AAR Corporation................................... 10,000 323,125
CHEMICALS -- 1.51%
- ---------------------------------------------------------------------------------
Church & Dwight Inc............................... 12,000 321,000
Lawter International Inc.......................... 12,000 151,500
-------------
472,500
CONSUMER DURABLES -- 0.51%
- ---------------------------------------------------------------------------------
Oneida Ltd........................................ 6,000 160,125
CONSUMER SERVICES -- 2.67%
- ---------------------------------------------------------------------------------
Berlitz International Inc. (a).................... 8,000 199,500
Rollins Inc....................................... 22,000 442,750
Wackenhut Corporation............................. 8,000 192,000
-------------
834,250
ELECTRICAL EQUIPMENT -- 2.27%
- ---------------------------------------------------------------------------------
Ametek Inc........................................ 12,000 282,000
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Ampco Pittsburgh Corporation...................... 9,500 $ 139,531
Thomas Industries Inc............................. 10,000 287,500
-------------
709,031
ENTERTAINMENT & LEISURE -- 5.27%
- ---------------------------------------------------------------------------------
Aztar Corporation (a)............................. 53,000 374,312
GC Companies Inc.................................. 13,000 594,750
Spelling Entertainment Group Inc.................. 50,000 343,750
Ticketmaster Group Inc............................ 20,000 332,500
-------------
1,645,312
FINANCE -- 1.90%
- ---------------------------------------------------------------------------------
Advest Group Inc.................................. 7,500 178,125
Pioneer Group Inc................................. 18,000 414,000
-------------
592,125
FOOD & BEVERAGES & TOBACCO -- 8.23%
- ---------------------------------------------------------------------------------
Celestial Seasonings Inc. (a)..................... 22,000 550,000
Chock Full O Nuts Corporation..................... 25,000 182,813
Culbro Corporation (a)............................ 2,200 306,212
Eskimo Pie Corporation............................ 22,000 266,750
Giant Foods Inc................................... 8,000 261,000
Mafco Consolidated Group Inc...................... 30,000 1,005,000
-------------
2,571,775
FOREST PRODUCTS -- 0.22%
- ---------------------------------------------------------------------------------
Griffin Land & Nurseries Inc...................... 4,900 69,825
HEALTH CARE -- 0.60%
- ---------------------------------------------------------------------------------
Healthplan Services Corporation................... 10,000 188,750
HOTELS & RESTAURANTS -- 1.72%
- ---------------------------------------------------------------------------------
Trump Hotels & Casino Resorts Inc................. 50,000 537,500
INSURANCE -- 0.78%
- ---------------------------------------------------------------------------------
Liberty Corporation............................... 6,000 244,500
MACHINERY -- 3.74%
- ---------------------------------------------------------------------------------
Daniel Industries Inc............................. 5,000 77,188
Idex Corporation.................................. 10,000 330,000
Katy Industries Inc............................... 30,000 446,250
Kollmorgen Corporation............................ 20,000 316,250
-------------
1,169,688
METALS & MINING -- 0.35%
- ---------------------------------------------------------------------------------
Nortek Inc........................................ 4,500 108,563
MISC. FINANCIAL SERVICES -- 1.89%
- ---------------------------------------------------------------------------------
Data Broadcasting Corporation..................... 40,000 $ 190,000
Midland Company................................... 8,000 400,000
-------------
590,000
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 21
<PAGE>
SMALL COMPANY VALUE PORTFOLIO -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
PAPER PRODUCTS -- 0.43%
- ---------------------------------------------------------------------------------
Greif Brothers Corporation........................ 5,000 $ 135,000
PHARMACEUTICALS -- 4.26%
- ---------------------------------------------------------------------------------
Carter Wallace Inc................................ 40,000 715,000
Ivax Corporation.................................. 55,000 615,312
-------------
1,330,312
PRINTING & PUBLISHING -- 6.24%
- ---------------------------------------------------------------------------------
Lee Enterprises Inc............................... 15,000 395,625
Media General Inc................................. 18,000 720,000
Meredith Corporation.............................. 14,000 406,000
Nelson Thomas Inc................................. 19,500 270,562
Price Communications Corporation.................. 18,000 157,500
-------------
1,949,687
REAL ESTATE -- 0.29%
- ---------------------------------------------------------------------------------
Catellus Development Corporation (a).............. 5,000 90,625
RETAIL -- 3.43%
- ---------------------------------------------------------------------------------
Lillian Vernon Corporation........................ 20,000 337,500
Neiman Marcus Group Inc........................... 28,000 735,000
-------------
1,072,500
SECURITY & INVESTIGATION SERVICES -- 0.64%
- ---------------------------------------------------------------------------------
Pittway Corporation............................... 4,000 199,000
TELECOMMUNICATIONS -- 3.88%
- ---------------------------------------------------------------------------------
Aerial Communications Inc......................... 50,000 425,000
Atlantic Tele Network Inc......................... 25,000 312,500
Centennial Cellular Corporation (a)............... 18,000 285,750
Comsat Corporation................................ 8,000 190,500
-------------
1,213,750
TRANSPORTATION -- 2.51%
- ---------------------------------------------------------------------------------
GATX Corporation.................................. 8,000 462,000
Hudson General Corporation........................ 8,500 323,000
-------------
785,000
TOTAL COMMON STOCKS
(IDENTIFIED COST $22,721,890).................................... 27,639,652
- ---------------------------------------------------------------------------------
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
U.S. TREASURY BILLS -- 10.99%
- ---------------------------------------------------------------------------------
U.S. Treasury Bill
4.53% due 07/17/97................................ $ 700,000 $ 698,591
U.S. Treasury Bill
4.55% due 07/03/97................................ 154,000 153,961
U.S. Treasury Bill
4.66% due 07/10/97................................ 400,000 399,534
U.S. Treasury Bill
4.70% due 07/17/97................................ 100,000 99,791
U.S. Treasury Bill
4.70% due 07/24/97................................ 100,000 99,700
U.S. Treasury Bill
4.72% due 07/24/97................................ 125,000 124,623
U.S. Treasury Bill
4.75% due 07/24/97................................ 190,000 189,423
U.S. Treasury Bill
4.82% due 07/31/97................................ 600,000 597,590
U.S. Treasury Bill
4.88% due 07/24/97................................ 200,000 199,376
U.S. Treasury Bill
4.88% due 08/07/97................................ 150,000 149,248
U.S. Treasury Bill
4.92% due 08/07/97................................ 250,000 248,736
U.S. Treasury Bill
4.94% due 08/07/97................................ 250,000 248,731
U.S. Treasury Bill
5.00% due 08/14/97................................ 225,000 223,625
-------------
TOTAL U.S. TREASURY BILLS
(IDENTIFIED COST $3,432,929)..................................... 3,432,929
- ---------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $26,154,819).................................... $ 31,072,581
OTHER ASSETS LESS LIABILITIES -- 0.57%........................... 178,369
-------------
NET ASSETS -- 100%............................................... $ 31,250,950
- ---------------------------------------------------------------------------------
</TABLE>
(a) Non-income Producing
See notes to financial statements.
22 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
THE ENTERPRISE INTERNATIONAL GROWTH PORTFOLIO
BRINSON PARTNERS, INC.
Chicago, Illinois
INVESTMENT MANAGEMENT
Brinson Partners, Inc. is a global investment management firm with offices in
Chicago, London and Tokyo and became managers of the Enterprise International
Growth Portfolio on October 1, 1994. Brinson Partners, Inc. currently manages
approximately $75 billion for institutional clients and has a normal investment
minimum of $25 million.
INVESTMENT OBJECTIVE
The objective of the Enterprise International Growth Portfolio is to seek
capital appreciation, primarily through a diversified portfolio of non-U.S.
equity securities.
INVESTMENT PHILOSOPHY
We believe that discrepancies exist between prices and fundamental values, both
across and within the international equity markets. We take advantage of these
discrepancies by using a disciplined approach to measure fundamental value from
the perspective of the long term investor. Our international equity strategy
reflects our decisions about the relative attractiveness of the asset class, the
individual equity markets, currencies, the industries across and within those
markets, other common risk factors within those markets and individual
international companies.
FIRST HALF 1997 PERFORMANCE REVIEW
Returns for European markets during the first half of 1997 were led by double
digit returns in Switzerland, the Netherlands, Spain, Finland and Germany. On
the other side of the globe, Pacific region gains were more modest due to
negative returns in Malaysia and Singapore, offsetting part of the double digit
gain for Japan. Currencies declined on average relative to the U.S. dollar, with
most of the depreciation occurring in European currencies.
The large overweight of the U.S. dollar during most of the first quarter
relative to the EAFE Index helped to protect the Portfolio from declines in
foreign currencies and added to Portfolio performance. Security selection,
particularly in Japan, also contributed to Portfolio returns. Japanese
exporters, including the electronic companies, were very strong due to the
weakness of the Japanese yen at the outset of the year. The Portfolio maintained
an overweight position in these stocks. In addition, the underweight position in
weak Japanese financial stocks added value. Market allocation, however,
detracted from value primarily due to the Portfolio's cash position and
underweight in Switzerland.
FUTURE INVESTMENT STRATEGY
Recent events in Europe have magnified the tensions within the European Union as
its members prepare for a single currency, leading us to reduce our broad
overweight in continental European equity markets in favor of southeast Asia.
Malaysia and Singapore appear to offer good relative value. Malaysia, in
particular, has been weak on the back of several factors: fears of a Thai-like
banking/currency crisis; the instigation of government measures to restrain
property speculation; and the slowdown of growth from double digit levels. We
believe that many of these fears have been overdone and, in any event, have been
incorporated in the price of the market. Moreover, both the economy
THE ENTERPRISE GROUP OF FUNDS, INC. 23
<PAGE>
and the stock market are undergoing a transformation, with the economy gaining
from diversification into more sophisticated, export-oriented products, such as
computer and electronic items and the stock market is benefiting from ongoing
privatizations.
The Portfolio's overall market weightings reflect the lack of significant
price/value discrepancies between the largest developed markets. The 3%
underweight in Japan is now the second largest, after Switzerland (-3.74%).
Given our fundamental and valuation analysis, the Japanese equity market remains
somewhat more overpriced than most of the other non-U.S. markets. Change is
urgently needed within Japan's banking sector and regulatory environment. The
Swiss market has performed extremely well for the last few years and does not
appear to offer relative value, despite the low level of interest rates there.
We are invested but quite underweight in Hong Kong, as we are concerned about
the heavy exposure to the overvalued property market and the sustainability of
the Hong Kong dollar/U.S. dollar peg in the longer term. Moreover, Hong Kong's
valuation is not attractive in our forward-looking cash flow discount model due
to the belief that the political and economic risks in China are being
underestimated, resulting in a higher discount rate than investors realize.
We continue to emphasize New Zealand and Australia and within Europe, Germany,
Belgium, Italy, the Netherlands and the United Kingdom. We are neutrally
positioned in Finland and Spain. We have no investments in Austria, Denmark,
Norway or Sweden. The Portfolio continues to target a 5% strategic cash
position, reflecting our view that most equity markets are expensive.
Our industry strategies include a recently established overweight in European
steel stocks, as many of these companies have been undergoing extensive
restructuring. Going forward, we would expect to see a continuation of the
current trend toward consolidations and capacity reductions. Ultimately, this
should foster greater profitability, while ensuring that the best companies
remain state of the art. We have been scaling back our overweighted positions in
European banks and Japanese electrical and electronic stocks due to the strong
performances of these sectors. The Portfolio continues to maintain a large
underweight in Japanese banks.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE
MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER
CONDITIONS.
24 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
INTERNATIONAL GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
COMMON STOCKS -- 91.30% AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
AUSTRALIA -- 4.63%
- ---------------------------------------------------------------------------------
Amcor Ltd......................................... 15,800 $ 105,080
Boral Ltd......................................... 30,600 96,435
Brambles Industries Ltd........................... 4,000 79,175
Broken Hill Proprietary........................... 37,500 552,160
Coca Cola Amatil.................................. 5,000 64,995
CRA Ltd........................................... 14,100 240,614
CSR Ltd........................................... 20,000 77,540
David Jones Ltd................................... 61,500 85,986
Lend Lease Corporation............................ 4,665 98,716
MIM Holdings Ltd.................................. 50,731 75,146
National Australia Bank........................... 25,000 358,414
News Corporation.................................. 51,064 245,057
Pacific Dunlop Ltd................................ 28,500 84,432
Qantas Airways Ltd................................ 33,455 78,379
Santos Ltd........................................ 8,000 33,676
Westpac Bank Corporation.......................... 43,500 262,015
WMC Ltd........................................... 22,000 138,831
Woolworths Ltd.................................... 15,000 49,313
-------------
2,725,964
BELGIUM -- 2.88%
- ---------------------------------------------------------------------------------
Bruxelles Lambert Groupe.......................... 600 100,556
Delhaize Le Lion.................................. 2,150 112,938
Electrabel........................................ 1,140 244,286
Fortis AG......................................... 1,212 250,282
Fortis AG (Rts) (a)............................... 112 25
Generale De Banque................................ 300 115,481
Generale De Banque (Wts) (a)...................... 300 3,218
Kredietbank....................................... 380 153,141
Kredietbank (Vvrp)................................ 9 3,552
Petrofina SA...................................... 625 236,677
Society General De Belgique....................... 1,050 98,054
Solvay............................................ 191 112,540
Tractebel CAP..................................... 300 125,070
Union Miniere (a)................................. 1,504 140,869
-------------
1,696,689
CANADA -- 2.68%
- ---------------------------------------------------------------------------------
Alcan Aluminum Ltd................................ 3,000 102,321
Bank Montreal Quebec.............................. 2,900 113,190
Barrick Gold Corporation.......................... 1,700 36,993
Bce Inc........................................... 3,200 89,446
Canadian National Railway
Company........................................... 1,900 82,827
Canadian Pacific Ltd.............................. 7,400 210,594
Hudson's Bay Company.............................. 3,900 86,136
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Imperial Oil Ltd.................................. 2,300 $ 117,836
Macmillan Bloedel Ltd............................. 4,500 61,751
Moore Corporation Ltd............................. 2,500 49,241
Noranda Inc....................................... 2,900 62,475
Northern Telecom Ltd.............................. 1,100 99,131
Nova Corporation Alberta.......................... 4,700 40,161
Royal Bank Canada Montreal
Quebec............................................ 3,300 149,473
Seagram Ltd....................................... 2,600 104,493
Thomson Corporation............................... 4,200 96,716
Transcanada Pipelines Ltd......................... 3,800 76,361
-------------
1,579,145
FINLAND -- 0.68%
- ---------------------------------------------------------------------------------
Merita A Ltd...................................... 13,000 43,310
Nokia Oy.......................................... 2,600 194,221
Outokumpu Oy...................................... 2,200 43,638
Pohjola........................................... 700 20,760
Rauma Oy.......................................... 94 2,154
Sampo Vakuutusosak................................ 200 19,450
Upm Kymmene Oy.................................... 3,400 78,571
-------------
402,104
FRANCE -- 6.50%
- ---------------------------------------------------------------------------------
Accor............................................. 1,124 168,312
Alcatel Alsthom................................... 1,452 181,849
Axa Uap........................................... 2,960 184,096
Axa Uap (Wts) (a)................................. 1,860 7,216
Banque National Paris............................. 4,980 205,244
Cie Bancaire...................................... 955 121,880
Cie De St Gobain.................................. 1,651 240,766
Cie De Suez....................................... 21,320 52,423
Colas............................................. 532 70,158
Credit Local de France............................ 1,412 137,435
CSF Thomson....................................... 3,000 77,288
Danone............................................ 1,000 165,229
Eaux Cie General (Wts) (a)........................ 1,905 1,141
Generale Des Eaux................................. 1,105 141,587
Lafarge Coppee SA................................. 1,200 74,634
Lagardere S.C.A................................... 2,900 84,236
LVMH Moet Hennessy................................ 525 141,151
Lyonnaise Des Eaux SA............................. 1,400 141,031
Michelin.......................................... 3,128 187,839
Pechiney.......................................... 3,526 138,899
Peugeot SA........................................ 1,760 170,109
Rhone Poulenc Act A............................... 96 2,761
Rhone Poulenc SA.................................. 4,500 183,777
Seita............................................. 3,000 94,951
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 25
<PAGE>
INTERNATIONAL GROWTH PORTFOLIO -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Societe Generale.................................. 1,546 $ 172,576
Society Elf Aquitaine............................. 2,336 252,016
Ste Generale...................................... 49 4,644
Total SA.......................................... 1,985 200,638
Usinor Sacilor.................................... 12,400 223,663
-------------
3,827,549
GERMANY -- 8.26%
- ---------------------------------------------------------------------------------
Allianz AG........................................ 1,850 387,163
BASF AG........................................... 5,550 205,090
Bayer AG.......................................... 7,500 288,200
Bayer Motoren Werk................................ 255 210,977
Commerzbank AG.................................... 5,900 167,112
Daimler Benz AG................................... 3,150 255,562
Deutsche Bank AG.................................. 6,000 350,553
Deutsche Telekom.................................. 14,550 350,381
Hochtief AG....................................... 1,450 64,847
Hoechst AG........................................ 2,300 97,560
Manitoba AG....................................... 390 120,079
Mannesmann AG..................................... 520 231,661
Metro AG.......................................... 1,720 188,459
Muenchener Ruckvers............................... 95 266,355
Preuss AG......................................... 660 193,183
Rwe AG............................................ 4,400 189,209
Schering AG....................................... 2,650 283,142
Siemens AG........................................ 2,550 151,398
Thyssen AG........................................ 1,050 248,638
Veba AG........................................... 4,680 262,967
Volkswagen AG..................................... 450 344,963
-------------
4,857,499
HONG KONG -- 1.07%
- ---------------------------------------------------------------------------------
Cheung Kong (Holdings)............................ 7,000 69,121
China Light & Power............................... 14,500 82,164
Guoco Group....................................... 8,000 42,131
Hang Seng Bank.................................... 5,000 71,315
Hong Kong Telecommunications...................... 20,000 47,758
Hutchison Whampoa................................. 13,000 112,426
New World Devel Company........................... 8,000 47,707
Sun Hung Kai Properties........................... 4,000 48,146
Swire Pacific..................................... 7,000 63,022
Wharf Holdings.................................... 11,000 47,707
-------------
631,497
IRELAND -- 0.25%
- ---------------------------------------------------------------------------------
Smurfit Jefferson................................. 51,000 146,930
ITALY -- 2.94%
- ---------------------------------------------------------------------------------
Assic Generali.................................... 7,810 141,994
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Bca Comm Italiana................................. 26,000 $ 53,849
Credito Italiano.................................. 74,000 135,411
Danieli Di Risp................................... 15,000 52,513
Edison............................................ 9,000 44,773
Eni (ADR)......................................... 3,400 193,375
Eni SPA........................................... 22,000 124,590
IMI............................................... 10,500 94,524
INA............................................... 39,000 59,433
Italgas........................................... 17,000 55,014
Mediobanca........................................ 400 198
Mediobanca SPA.................................... 3,000 18,216
Montedison SPA.................................... 197,820 130,594
Rinascente........................................ 8,000 44,458
Rinascente Louisiana.............................. 14,000 34,062
SAI Di Risp....................................... 15,000 46,247
SIP............................................... 21,000 62,893
Telecom Italia Di Risp............................ 104,000 205,911
Telecom Italia Mobile............................. 28,000 90,611
Telecom Italia Mobile Di Risp..................... 80,000 143,095
-------------
1,731,761
JAPAN -- 26.55%
- ---------------------------------------------------------------------------------
Amada Company..................................... 25,000 220,293
Asahi Glass Company............................... 30,000 298,377
Bank of Tokyo Mits................................ 26,000 521,724
Canon Inc......................................... 20,000 544,408
Canon Sales Company Inc........................... 8,000 186,355
Citizen Watch Company............................. 21,000 161,961
Dai Nippon Printng................................ 23,000 519,717
Daiichi Pharm Company............................. 17,000 299,599
Daikin Kogyo...................................... 23,000 208,690
Daiwa House Industries............................ 12,000 146,571
Fanuc............................................. 9,300 357,006
Fujitsu........................................... 14,000 194,207
Hitachi........................................... 46,000 513,698
Honda Motor Company............................... 6,000 180,597
INAX Corporation.................................. 23,000 172,169
Isetan Company.................................... 7,000 86,721
Ito Yokado Company................................ 9,000 522,160
Kaneka Corporation................................ 23,000 144,076
Keio Teito Electric Railway....................... 27,000 128,381
Kintetsu.......................................... 27,000 164,893
Kirin Brewery Company............................. 25,000 259,553
Kokuyo Company.................................... 8,000 216,367
Kuraray Company................................... 28,000 278,485
Kyocera Corporation............................... 3,000 238,178
Maeda Road Construction........................... 5,000 42,968
Marui Company..................................... 14,000 260,164
</TABLE>
26 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
INTERNATIONAL GROWTH PORTFOLIO -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Matsushita Electric Industrial Indiana............ 37,000 $ 745,681
Mitsubishi Paper.................................. 29,000 113,348
NGK............................................... 40,000 439,714
Nintendo Company.................................. 2,400 201,012
Nippon Denso...................................... 12,000 286,861
Nippon Meat Packer................................ 16,000 206,596
Nippon Steel Corporation.......................... 19,000 60,670
Okumura Corporation............................... 25,000 132,394
Osaka Gas Company................................. 48,000 137,777
Sankyo Company.................................... 18,000 604,607
Sanwa Bank........................................ 12,000 177,979
Secom Company..................................... 6,000 440,237
Seino Transportation.............................. 16,000 173,094
Sekisui House..................................... 48,000 485,779
Shinmaywa Industries.............................. 11,000 77,447
Sony Corporation.................................. 5,400 470,651
Sumitomo Bank..................................... 26,000 426,453
Sumitomo Electric Industries...................... 19,000 318,269
Sumitomo Trust & Banking.......................... 13,000 139,505
Takeda Chemical Industries........................ 16,000 449,485
TDK Corporation................................... 4,000 293,492
Tokio Marine & Fire............................... 21,000 274,821
Tokyo Electric Power.............................. 6,300 132,464
Tokyo Steel Manufacturing......................... 17,700 197,662
Tonen Corporation................................. 17,000 204,676
Toray Industries Inc.............................. 98,000 698,534
Toshiba Corporation............................... 57,000 366,507
Toyo Suisan Kaisha................................ 13,000 132,699
Toyota Motor Corporation.......................... 6,000 176,933
Yamazaki Baking Company........................... 11,000 193,858
-------------
15,626,523
MALAYSIA -- 1.49%
- ---------------------------------------------------------------------------------
Hume Industries................................... 12,000 55,151
Kuala Lumpur Kepong............................... 24,500 60,668
Land & General.................................... 27,000 31,022
Malayan Bank Berhad............................... 14,000 146,989
Malaysia International Shipping................... 13,000 33,736
Nestle Malay Berhad............................... 4,000 29,952
New Straits Times................................. 3,000 17,591
Perusahaan Otomobl................................ 3,000 14,025
Public Bank Berhad................................ 24,333 37,984
Resorts World Berhad.............................. 11,000 33,122
Rothmans Pall Mall................................ 2,000 19,651
Sime Darby Berhad................................. 31,000 103,170
Telekom Malaysia.................................. 15,000 70,127
Tenaga Nasiona.................................... l28,000 136,450
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
UMW Holdings Berhad............................... 6,000 $ 28,288
UTD Engineers Bhd................................. 6,000 43,265
YTL Corporation................................... 5,000 15,452
YTL Power International........................... 500 630
-------------
877,273
NETHERLANDS -- 5.68%
- ---------------------------------------------------------------------------------
Abn Amro Holdings NV.............................. 13,892 259,029
Akzo Nobel NV..................................... 400 54,817
DSM............................................... 950 94,521
Elsevier.......................................... 11,800 197,178
Heineken NV....................................... 500 85,333
ING NTFL.......................................... 9,427 434,634
KLM............................................... 5,100 157,191
Kon Hoogovens & Staalf............................ 1,841 102,606
KPN............................................... 7,501 294,247
Philips Electronic................................ 4,400 315,166
Royal Dutch Petroleum............................. 4,520 957,930
Royal Dutch Petroleum Company
(ADR)............................................. 300 64,087
Unilever.......................................... 1,540 324,177
-------------
3,340,916
NEW ZEALAND -- 3.17%
- ---------------------------------------------------------------------------------
Brierley Investment Ltd........................... 316,000 309,086
Carter Holt Harvey................................ 109,000 282,086
Fletcher Challenge Building....................... 36,000 108,327
Fletcher Challenge Energy......................... 40,000 120,906
Fletcher Challenge Forest Division................ 64,513 93,776
Fletcher Challenge Paper.......................... 72,000 174,594
Telecom Corporation of New
Zealand........................................... 139,000 708,118
Telecom Corporation of New
Zealand (ADR)..................................... 1,600 65,200
-------------
1,862,093
SINGAPORE -- 1.37%
- ---------------------------------------------------------------------------------
City Developments................................. 7,000 68,546
DBS Lands......................................... 10,000 31,615
Development Bank Singapore........................ 7,000 88,130
Fraser & Neave.................................... 2,000 14,269
Hotel Properties.................................. 20,000 33,993
Jardine Matheson.................................. 4,800 34,080
Keppel Corporation................................ 4,000 17,766
Keppel Corporation (Class A)...................... 1,000 4,337
Overseas Chinese Bank............................. 13,200 136,644
Singapore Airlines................................ 10,000 89,529
Singapore Press Holdings.......................... 5,000 100,720
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 27
<PAGE>
INTERNATIONAL GROWTH PORTFOLIO -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Singapore Telecomm................................ 39,000 $ 72,015
United Overseas Bank.............................. 8,000 82,255
Wing Tai Holdings................................. 11,000 31,699
-------------
805,598
SPAIN -- 2.25%
- ---------------------------------------------------------------------------------
Acerinox SA....................................... 300 56,213
Banco Bilbao Vizcaya.............................. 1,600 129,976
Banco Central Hispanoamericano.................... 2,050 74,988
Banco Popular..................................... 380 93,098
Banco Santander................................... 3,750 115,541
Corporacion Mapfre................................ 700 37,245
Empresa Nac Electricid............................ 2,350 197,282
Fomento De Construcciones......................... 500 63,760
Gas Natural SDG SA................................ 400 87,384
Iberdrola SA...................................... 8,100 102,246
Repsol SA (ADR)................................... 2,540 107,392
Telefonica De Espana.............................. 5,800 167,682
Vallehermoso SA................................... 1,300 35,070
Viscofan Envoltura................................ 2,300 53,773
-------------
1,321,650
SWITZERLAND -- 2.44%
- ---------------------------------------------------------------------------------
ABB AG............................................ 55 83,253
Alusuisse Lonza Holdings.......................... 65 67,315
Ciba Specialty Chemicals (a)...................... 199 18,401
CS Holding........................................ 561 72,046
Nestle SA......................................... 197 259,878
Novartis AG....................................... 244 390,066
Roche Holdings AG................................. 30 271,336
Schw Ruckversicher................................ 60 84,863
Schweiz Bankgesellschaft.......................... 68 77,781
Zurich Verischerung............................... 272 108,241
-------------
1,433,180
UNITED KINGDOM -- 18.46%
- ---------------------------------------------------------------------------------
Abbey National.................................... 13,000 177,521
Bass.............................................. 8,200 100,095
BAT Industries.................................... 46,300 414,431
BG................................................ 94,500 346,216
Booker............................................ 10,600 48,720
British Energy.................................... 83,000 202,492
British Petroleum................................. 43,927 546,443
British Steel..................................... 106,000 263,900
British Telecom................................... 77,000 571,898
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
BTR............................................... 25,000 $ 85,555
Centrica (a)...................................... 84,500 102,724
Charter........................................... 12,259 162,809
Coats Viyella..................................... 52,800 110,789
FKI............................................... 60,750 171,984
General Electric.................................. 99,600 595,452
Glaxo Holdings.................................... 34,200 707,645
Grand Metropolitan................................ 26,000 250,261
Guinness.......................................... 34,300 335,865
Hanson............................................ 29,437 146,084
Hillsdown Holdings................................ 67,000 189,120
House of Fraser................................... 71,500 189,915
HSBC Holdings..................................... 15,000 461,746
Imperial Chemical Industries...................... 5,000 69,443
Inchcape.......................................... 21,000 98,969
Legal & General Group............................. 32,500 220,278
Lloyds TSB Group.................................. 53,232 546,954
Marks & Spencer................................... 39,000 323,435
Mirror Group PLC.................................. 37,800 118,343
National Westminster Bank......................... 14,000 188,262
Northern Foods.................................... 36,000 119,302
Peninsular and Oriental Steam..................... 26,500 263,900
Reckitt & Colman.................................. 6,650 99,336
Redland........................................... 12,500 70,775
Reuters Holdings.................................. 14,000 147,579
RJB Mining........................................ 28,000 167,862
Royal Sun Alliance................................ 38,005 281,007
RTZ Corporation................................... 15,100 263,153
Sainsbury J....................................... 31,000 187,913
Scottish Hydro.................................... 15,500 107,120
Sears............................................. 91,200 103,275
Sedgwick Group.................................... 60,400 123,719
Smithkline Beecham................................ 18,200 335,060
TESCO............................................. 25,800 159,399
Thames Water...................................... 18,300 210,278
Unilever.......................................... 4,400 125,957
Vodafone Group.................................... 24,400 119,056
Williams Holdings................................. 30,000 162,367
Yorkshire Water................................... 10,800 70,682
-------------
10,865,089
TOTAL COMMON STOCKS
(IDENTIFIED COST $45,672,919).................................... $ 53,731,460
- ---------------------------------------------------------------------------------
</TABLE>
28 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
INTERNATIONAL GROWTH PORTFOLIO -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
PREFERRED STOCK -- 0.54%
- ---------------------------------------------------------------------------------
AUSTRALIA -- 0.07%
- ---------------------------------------------------------------------------------
News Corporation.................................. 10,000 $ 39,450
GERMANY -- 0.25%
- ---------------------------------------------------------------------------------
Henkel Kgaa....................................... 2,600 147,583
ITALY -- 0.22%
- ---------------------------------------------------------------------------------
Fiat SPA.......................................... 71,000 131,175
TOTAL PREFERRED STOCK
(IDENTIFIED COST $317,281)....................................... 318,208
- ---------------------------------------------------------------------------------
COMMERCIAL PAPER -- 5.62%
- ---------------------------------------------------------------------------------
Avery Dennison Corporation
6.25%, due 07/01/97............................... $ 1,463,000 1,463,000
Dun & Bradstreet Corporation
5.58%, due 08/05/97............................... 500,000 497,288
Dun & Bradstreet Corporation
5.60%, due 08/05/97............................... 400,000 397,822
General Electric Capital
Corporation Discount
5.55%, due 07/08/97............................... 455,000 454,509
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Mobil Australia Finance Company
5.53%, due 07/21/97............................... $ 500,000 $ 498,464
-------------
3,311,083
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $3,311,083)..................................... 3,311,083
- ---------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $49,301,283).................................... $ 57,360,751
OTHER ASSETS LESS LIABILITIES -- 2.54%........................... 1,493,095
-------------
NET ASSETS -- 100%............................................... $ 58,853,846
- ---------------------------------------------------------------------------------
</TABLE>
(a) Non-income Producing
(Rts) Rights
(Wts) Warrants
ADR American Depository Receipts
These abbreviations signify corporations:
AG Aktien Gesellschaft
Ltd Limited
SA Societe Anonyme
SDG Sociedad de Gas
SPA Societa Per Azoine
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 29
<PAGE>
THE ENTERPRISE GOVERNMENT SECURITIES PORTFOLIO
TCW FUNDS MANAGEMENT, INC.
Los Angeles, California
INVESTMENT MANAGEMENT
TCW Funds Management, a wholly owned subsidiary of TCW Management Company, has
been managing the Enterprise Government Securities Portfolio since May 1, 1992.
TCW currently manages over $50 billion for institutional clients and has a
normal investment minimum of $35 million.
INVESTMENT OBJECTIVE
The objective of the Enterprise Government Securities Portfolio is to seek
current income and safety of principal, primarily from securities that are
obligations of the U.S. Government, its agencies or its instrumentalities.
INVESTMENT PHILOSOPHY
Our investment process is grounded in long term value considerations. We do not
attempt to forecast short term trends in interest rates and, therefore, do not
frequently alter average portfolio maturities. The process focuses on
controlling the variables that are known and can be managed, such as the term
structure of interest rates, mortgage prepayment rates and security structure.
Portfolios remain substantially invested in mortgage backed products under the
great majority of market conditions.
FIRST HALF 1997 PERFORMANCE REVIEW
Fixed income markets, after being under pressure from the threat of and actual
increase in interest rates by the Federal Reserve in the first quarter,
responded exuberantly to news of easing economic growth and minimal inflationary
pressures during the second quarter of 1997. As of June 30, the yields on the 10
and 30 year treasuries stood at 6.41% and 6.69%, respectively, down from 6.88%
and 7.08% on April 1 and almost even with year end levels. Recent measures of
economic activity were received positively by investors. Consumer spending
declined from its torrid first quarter pace and retail sales declined 5% for the
three month period ending in May. These soft spending numbers point to real GDP
growth rate below 2% in the second quarter. Inflation reports have also been
favorable. Even though capacity utilization and vendor performance have risen
steadily over the past eighteen months, price stability has been maintained
throughout the manufacturing process. The Consumer Price Index is up a mere 2.2%
from a year ago and the Producer Price Index has declined for the last 5
consecutive months.
After a slow first quarter, the mortgage sector performed well throughout the
second quarter. Interest rates declined throughout the second quarter, reversing
most of the yield increases observed in the first quarter. Positive technicals
have played a large role in the strong performance of the mortgage sector in the
first half of this year. Investor demand in many sectors has exceeded the supply
of new securities. As a result, spreads have narrowed to the tightest levels in
decades. Mortgage spreads are however vulnerable to a widening if interest rates
continue to drop. A yield below 6.25% on the 10 year is likely to reignite
prepayment fears in the marketplace and push spreads out.
FUTURE INVESTMENT STRATEGY
The outlook for the mortgage-backed securities market remains positive. Investor
demand is strong. Even though mortgage spreads have tightened, the sector has
retained its yield advantage over other fixed income sectors such as
30 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
high grade corporates and treasuries. Few pricing anomalies and/or
inefficiencies exist now and, in recognition of this fact, our strategy remains
unchanged from previous quarters. As we wait for new opportunities to emerge, we
continue to emphasize call protection even when call protection is not a major
concern in the marketplace.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE
MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER
CONDITIONS.
THE ENTERPRISE GROUP OF FUNDS, INC. 31
<PAGE>
GOVERNMENT SECURITIES PORTFOLIO
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
U.S. GOVERNMENT & AGENCY OBLIGATIONS -- 92.88% AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------------
FEDERAL HOME LOAN PARTICIPATION CERTIFICATES -- 8.61%
- ----------------------------------------------------------------------------------
FHLPC 9.00%, due 05/01/23......................... $ 1,720,671 $ 1,815,858
FHLPC 10.00%, due 10/01/18........................ 1,256,061 1,355,868
FHLPC 10.00%, due 07/01/20........................ 2,238,828 2,420,508
FHLPC 10.00%, due 10/01/20........................ 918,740 996,411
-------------
6,588,645
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 28.06%
- ----------------------------------------------------------------------------------
GNMA 6.625%, due 11/15/28......................... 4,861,001 4,664,179
GNMA 7.00%, due 10/15/33.......................... 14,938,935 14,602,212
GNMA 7.50%, due 04/15/23.......................... 745,050 747,323
GNMA 7.50%, due 05/15/23.......................... 1,452,967 1,457,384
GNMA 9.00%, due 08/15/16.......................... 8,678 9,135
-------------
21,480,233
FEDERAL HOUSING ADMINISTRATION -- 40.35%
- ----------------------------------------------------------------------------------
FHA 6.75%, due 11/01/28........................... 2,237,792 2,086,741
FHA 7.00%, due 08/01/28........................... 2,336,950 2,228,866
FHA 7.18%, due 02/20/29........................... 3,431,522 3,302,840
FHA 7.625%, due 06/01/28.......................... 3,730,702 3,702,722
FHA 7.75%, due 04/01/23........................... 6,411,407 6,387,364
FHA 7.75%, due 04/01/28........................... 3,896,925 3,887,183
FHA 7.80%, due 08/01/23........................... 2,790,150 2,811,076
FHA 8.65%, due 06/01/27........................... 3,679,813 3,799,406
FHA 8.70%, due 03/01/23........................... 2,588,736 2,676,106
-------------
30,882,304
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 15.86%
- ----------------------------------------------------------------------------------
FNMA 5.50%, due 01/01/09.......................... 2,188,867 2,086,712
FNMA 5.50%, due 02/01/09.......................... 3,752,763 3,578,860
FNMA 8.00%, due 11/01/16.......................... 2,978,142 3,078,655
FNMA 9.50%, due 08/01/20.......................... 1,043,658 1,116,840
FNMA 9.50%, due 10/01/20.......................... 1,380,941 1,477,552
FNMA 10.00%, due 07/01/20......................... 737,319 800,483
-------------
12,139,102
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS (IDENTIFIED COST
$72,561,175)...................................................... 71,090,284
- ----------------------------------------------------------------------------------
<CAPTION>
PRINCIPAL
COLLATERALIZED MORTGAGE OBLIGATIONS (V) -- 3.86% AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------------
Federal Home Loan Mortgage Corporation 6.72%, due
07/15/97.......................................... $ 1,291,553 $ 946,063
Federal Home Loan Mortgage Corporation 8.80%, due
07/15/97.......................................... 2,222,727 1,905,988
Federal National Mortgage Association 15.50%, due
07/25/97.......................................... 100,127 103,381
-------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (V) (IDENTIFIED COST
$3,413,211)....................................................... 2,955,432
- ----------------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 2.67%
- ----------------------------------------------------------------------------------
State Street Bank & Trust Repurchase Agreement
4.00%, due 07/01/97
Collateral: U.S. Treasury Note, $2,105,000 4.75%
due 10/31/98 Value $2,089,669..................... 2,045,000 2,045,000
-------------
TOTAL REPURCHASE AGREEMENTS
(IDENTIFIED COST $2,045,000)...................................... 2,045,000
- ----------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $78,019,386)..................................... $ 76,090,716
OTHER ASSETS LESS LIABILITIES -- 0.59%............................ 451,611
-------------
NET ASSETS -- 100%................................................ $ 76,542,327
- ----------------------------------------------------------------------------------
</TABLE>
(v) Variable interest rate security; interest rate is as of June 30, 1997. The
maturity date shown is the next interest reset date.
See notes to financial statements.
32 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
THE ENTERPRISE HIGH-YIELD BOND PORTFOLIO
CAYWOOD-SCHOLL CAPITAL MANAGEMENT
San Diego, California
INVESTMENT MANAGEMENT
Caywood-Scholl has been investment adviser to the Enterprise High-Yield Bond
Portfolio since its inception in 1987. Caywood-Scholl currently manages over
$790 million for institutional clients. Caywood-Scholl's normal investment
minimum is $1 million.
INVESTMENT OBJECTIVE
The objective of the Enterprise High-Yield Bond Portfolio is to seek maximum
current income, primarily from debt securities that are rated Ba or lower by
Moody's Investors Service or BB or lower by Standard & Poor's Corporation.
INVESTMENT PHILOSOPHY
Our investment philosophy of seeking relative value and avoiding risk is credit
research driven. The discipline of credit research facilitates the informed use
of a variety of lower rated securities in aggressive fixed income investing.
FIRST HALF 1997 PERFORMANCE REVIEW
A strong stock market, which is typically good for the high-yield market, served
to lessen high-yield investor's credit concerns during the first half of 1997.
Also, like the stock market, the high-yield market experienced a significant
increase in mutual fund inflows. The Portfolio's top performing investments
included Cemex SA, Mediq Inc., Quixote, Sprint Spectrum L.P. and Maxus Energy
Corporation. The Cemex and Maxus Energy bonds rallied in response to improving
emerging market fundamentals. Mediq and Quixote had positive corporate events
which significantly reduced credit risk associated with these investments.
Sprint Spectrum bonds improved on expectations that Sprint Corporation intends
to increase their exposure to this entity.
FUTURE INVESTMENT STRATEGY
Looking ahead to the third quarter, we anticipate a stable to possibly improving
U.S. treasury market. A moderate June labor report and the expectation of
minimal inflationary pressures, as demonstrated by stable to downward trending
gold and commodity prices, are supportive to current market conditions. The
stock markets may be influenced by earnings reports. Given the economy's
strength, most companies may meet investor expectations. As for the high-yield
market, new issues will continue to dominate. As long as cash flows remain
stable, we would expect market technicals to maintain their favorable balance.
As always, we will emphasize selectivity in the investment process, looking for
those securities which offer the most attractive risk adjusted returns.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE
MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER
CONDITIONS.
THE ENTERPRISE GROUP OF FUNDS, INC. 33
<PAGE>
HIGH-YIELD BOND PORTFOLIO
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
CORPORATE BONDS, CONVERTIBLE SECURITIES & COMMON OR PRINCIPAL
STOCKS -- 83.80% AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
APPAREL & TEXTILES -- 0.84%
- ---------------------------------------------------------------------------------
Brazos Sportswear Inc. 10.50%, due 07/01/07....... $ 600,000 $ 595,500
AUTOMOTIVE -- 1.15%
- ---------------------------------------------------------------------------------
Speedy Muffler King Inc. 10.875%, due 10/01/06.... 800,000 814,000
BANKING -- 2.82%
- ---------------------------------------------------------------------------------
DVI Inc. 9.875%, due 02/01/04..................... 800,000 815,000
Homeside Inc. 11.25%, due 05/15/03................ 325,000 377,406
Imperial Credit Industries Inc. 9.875%, due
01/15/07.......................................... $ 800,000 796,000
-------------
1,988,406
BASIC INDUSTRIES -- 0.00%
- ---------------------------------------------------------------------------------
Tracor Inc. (Wts) (a)............................. 600 --
BROADCASTING -- 6.41%
- ---------------------------------------------------------------------------------
American Radio Systems Corporation 9.00%, due
02/01/06.......................................... $ 400,000 408,000
Kabelmedia Holding Zero Coupon, due 08/01/06...... 850,000 521,687
Rogers Communications Inc. Zero Coupon, due
05/20/13.......................................... 1,500,000 652,500
Rogers Communications Inc. 9.125%, due 01/15/06... 150,000 151,875
Rogers Communications Inc. 10.875%, due
04/15/04.......................................... 500,000 524,375
TCI Satellite Entertainment Inc. Zero Coupon, due
02/15/07.......................................... 400,000 235,500
TCI Satellite Entertainment Inc. 10.875%, due
02/15/07.......................................... 350,000 350,875
Telewest PLC Zero Coupon, due 10/01/07............ 400,000 289,000
Telewest PLC 9.625%, due 10/01/06................. 750,000 772,500
Universal Outdoor Inc. 9.75%, due 10/15/06........ 600,000 621,000
-------------
4,527,312
BUILDING & CONSTRUCTION -- 0.58%
- ---------------------------------------------------------------------------------
Building Materials Corporation America 8.625%, due
12/15/06.......................................... 400,000 409,000
CABLE -- 3.09%
- ---------------------------------------------------------------------------------
Century Communications Corporation 9.50%, due
03/01/05.......................................... 200,000 205,500
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Century Communications Corporation 9.75%, due
02/15/02.......................................... $ 350,000 $ 364,875
Comcast UK Cable LP Zero Coupon, due 11/15/07..... 900,000 677,250
TCI Communications Inc. 6.875%, due 02/15/06...... 1,000,000 935,960
-------------
2,183,585
CHEMICALS -- 3.03%
- ---------------------------------------------------------------------------------
General Chemical Corporation 9.25%, due
08/15/03.......................................... 600,000 613,500
Pioneer Americas Acquisition Corporation 9.25%,
due 06/15/07...................................... 600,000 593,250
Rexene Corporation 11.75%, due 12/01/04........... 250,000 284,375
Texas Petrochemicals Corporation 11.125%, due
07/01/06.......................................... 600,000 645,000
-------------
2,136,125
COMMUNICATIONS -- 1.67%
- ---------------------------------------------------------------------------------
Echostar Communications Corporation Zero Coupon,
due 06/01/04...................................... $ 1,400,000 1,181,250
CONGLOMERATES -- 0.00%
- ---------------------------------------------------------------------------------
Amerisource Distribution Corporation Class C...... 209 --
CONSUMER PRODUCTS -- 6.53%
- ---------------------------------------------------------------------------------
Drypers Corporation 10.25%, due 06/15/07.......... $ 250,000 248,750
E & S Holdings Corporation 10.375%, due
10/01/06.......................................... 750,000 785,625
French Fragrances Inc. 10.375%, due 05/15/07...... 450,000 463,500
Mediq Inc. 7.50%, due 07/15/03.................... 940,000 954,100
Ralphs Grocery Company 10.45%, due 06/15/04....... 750,000 817,500
Ralphs Grocery Company 11.00%, due 06/15/05....... 300,000 327,750
Randalls Food Markets Inc. 9.375%, due 07/01/07... 500,000 497,500
Samsonite Corporation 11.125%, due 07/15/05....... 150,000 166,500
Shoppers Food Warehouse Corporation 9.75%, due
06/15/04.......................................... 350,000 350,000
-------------
4,611,225
CONTAINERS/PACKAGING -- 7.53%
- ---------------------------------------------------------------------------------
Four M Corporation 12.00%, due 06/01/06........... 700,000 726,250
</TABLE>
34 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
HIGH-YIELD BOND PORTFOLIO -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
MVE Inc. 12.50%, due 02/15/02..................... $ 600,000 $ 618,000
Owens Illinois Inc. 8.10%, due 05/15/07........... 750,000 763,297
Plastic Containers Inc. 10.00%, due 12/15/06...... 300,000 311,250
Printpack Inc. 10.625%, due 08/15/06.............. 600,000 635,250
Stone Container Corporation 10.75%, due
10/01/02.......................................... 550,000 574,750
Stone Container Corporation 12.25%, due
04/01/02.......................................... 400,000 410,000
United States Can Corporation 10.125%, due
10/15/06.......................................... $ 1,200,000 1,278,000
-------------
5,316,797
ELECTRONICS -- 0.81%
- ---------------------------------------------------------------------------------
Qualcomm Financial Trust I Trust Preferred Sec
144A.............................................. 12,000 570,000
ENERGY -- 1.45%
- ---------------------------------------------------------------------------------
Ferrellgas Partners L P 9.375%, due 06/15/06...... $ 550,000 566,500
Midland Cogeneration Venture L P 10.33%, due
07/23/02.......................................... 205,074 220,968
Midland Funding Corporation I 10.33%, due
07/23/02.......................................... 220,821 237,934
-------------
1,025,402
ENTERTAINMENT & LEISURE -- 2.45%
- ---------------------------------------------------------------------------------
AMF Group Inc. 10.875%, due 03/15/06.............. 700,000 756,000
Coach USA Inc. 9.375%, due 07/01/07............... 200,000 201,000
Cobblestone Golf Group Inc. 11.50%, due
06/01/03.......................................... 400,000 422,000
Coleman Escrow Corporation Zero Coupon, due
05/15/01.......................................... 550,000 347,875
-------------
1,726,875
FOOD & BEVERAGES & TOBACCO -- 1.60%
- ---------------------------------------------------------------------------------
Cott Corporation 9.375%, due 07/01/05............. 400,000 419,000
North Atlantic Trading Inc. 11.00%, due
06/15/04.......................................... 500,000 507,500
RJR Nabisco Inc. 8.50%, due 07/01/07.............. 200,000 199,500
-------------
1,126,000
GAMING -- 0.90%
- ---------------------------------------------------------------------------------
Trump Atlantic City Associates 11.25%, due
05/01/06.......................................... 650,000 635,375
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
HEALTH CARE -- 5.53%
- ---------------------------------------------------------------------------------
Dade International Inc. 11.125%, due 05/01/06..... $ 450,000 $ 500,625
Mariner Health Group Inc. 9.50%, due 04/01/06..... 650,000 679,250
Maxxim Medical Inc. 10.50%, due 08/01/06.......... 1,000,000 1,082,500
Quest Diagnostics Inc. 10.75%, due 12/15/06....... 650,000 702,000
Tenet Healthcare Corporation 8.625%, due
12/01/03.......................................... 500,000 519,375
Twin Laboratories Inc. 10.25%, due 05/15/06....... $ 400,000 423,000
-------------
3,906,750
HOTELS & RESTAURANTS -- 1.62%
- ---------------------------------------------------------------------------------
Foodmaker Inc. (Wts) (a).......................... 250 3,563
H M H Properties Inc. 9.50%, due 05/15/05......... $ 800,000 837,000
Hammon John Q. Hotels 8.875%, due 02/15/04........ 300,000 304,125
-------------
1,144,688
MACHINERY -- 0.97%
- ---------------------------------------------------------------------------------
Mettler Toledo Inc. 9.75%, due 10/01/06........... 650,000 680,875
METALS & MINING -- 4.38%
- ---------------------------------------------------------------------------------
Kaiser Aluminum & Chemical Corporation 10.875%,
due 10/15/06...................................... 500,000 540,000
Kaiser Aluminum & Chemical Corporation 12.75%, due
02/01/03.......................................... 500,000 543,750
Oregon Steel Mills Inc. 11.00%, due 06/15/03...... 650,000 698,750
WCI Steel Inc. 10.00%, due 12/01/04............... 800,000 828,000
Wheeling Pittsburgh Corporation 9.375%, due
11/15/03.......................................... 500,000 478,750
-------------
3,089,250
OIL SERVICES -- 3.93%
- ---------------------------------------------------------------------------------
Clark USA Inc. 10.875%, due 12/01/05.............. 1,100,000 1,168,750
Maxus Energy Corporation 9.375%, due 11/01/03..... 900,000 959,625
Maxus Energy Corporation 11.25%, due 05/01/13..... 45,000 46,969
Mesa Operating Company 10.625%, due 07/01/06...... 250,000 284,375
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 35
<PAGE>
HIGH-YIELD BOND PORTFOLIO -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Pride Petroleum Services Inc. 9.375%, due
05/01/07.......................................... $ 300,000 $ 311,250
-------------
2,770,969
PAPER & FOREST PRODUCTS -- 1.38%
- ---------------------------------------------------------------------------------
Crown Paper Company 11.00%, due 09/01/05.......... 400,000 402,000
Maxxam Group Inc. 11.25%, due 08/01/03............ 550,000 569,938
-------------
971,938
PUBLISHING -- 0.29%
- ---------------------------------------------------------------------------------
Von Hoffmann Press Inc. 10.375%, due 05/15/07..... 200,000 207,500
RESTAURANTS -- 1.78%
- ---------------------------------------------------------------------------------
AFC Enterprises Inc. 10.25%, due 05/15/07......... 400,000 406,000
Boston Chicken Inc. 7.75%, due 05/01/04........... 550,000 499,812
Foodmaker Corporation 9.75%, due 11/01/03......... 350,000 353,500
-------------
1,259,312
RETAIL -- 4.31%
- ---------------------------------------------------------------------------------
Ann Taylor Inc. 8.75%, due 06/15/00............... 440,000 444,400
Brown Group Inc. 9.50%, due 10/15/06.............. 350,000 359,625
Cole National Group Inc. 9.875%, due 12/31/06..... 750,000 789,375
Corporate Express Inc. 4.50%, due 07/01/00........ 750,000 670,312
Michaels Stores Inc. 6.75%, due 01/15/03.......... 850,000 782,000
-------------
3,045,712
RUBBER & PLASTICS -- 0.77%
- ---------------------------------------------------------------------------------
Polymer Group Inc. 9.00%, due 07/01/07............ $ 550,000 541,151
TELECOMMUNICATIONS -- 14.95%
- ---------------------------------------------------------------------------------
American Communications Services Inc. (Wts) (a)... 800 75,200
American Communications Services Inc. Zero Coupon,
due 11/01/05...................................... $ 1,000,000 590,000
Brooks Fiber Properties Inc. Zero Coupon, due
11/01/01.......................................... 1,150,000 751,812
Brooks Fiber Properties Inc. 10.00%, due
06/01/07.......................................... 300,000 304,500
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
CCPR Services Inc. 10.00%, due 02/01/07........... $ 1,000,000 $ 1,001,250
Comcast Cellular Holdings Inc. 9.50%, due
05/01/07.......................................... 1,350,000 1,366,875
Globalstar L P/Globalstar Capital 11.25%, due
06/15/04.......................................... 350,000 328,125
Globalstar L P/Globalstar Capital 11.375%, due
02/15/04.......................................... 700,000 705,250
ICG Holdings Inc. Zero Coupon, due 05/01/06....... 1,100,000 734,250
MFS Communications Inc. Zero Coupon, due
01/15/04.......................................... 500,000 463,125
Nextel Communications Inc. Zero Coupon, due
08/15/04.......................................... 300,000 231,750
Orion Network Systems Inc. 12.50%, due 01/15/07
(v)............................................... $ 850,000 493,000
Pagemart (Wts) (a)................................ 3,450 24,150
Pagemart Nationwide Inc........................... 1,750 17,500
Sprint Spectrum L P Zero Coupon, due 08/15/06..... $ 1,250,000 906,250
Sprint Spectrum L P 11.00%, due 08/15/06.......... 650,000 721,500
Teleport Communications Group Zero Coupon, due
07/01/07.......................................... 950,000 685,188
Teleport Communications Group 9.875%, due
07/01/06.......................................... 900,000 956,250
Winstar Equipment Corporation 12.50%, due
03/15/04.......................................... 200,000 195,250
-------------
10,551,225
TEXTILES -- 1.27%
- ---------------------------------------------------------------------------------
Carter William Company 10.375%, due 12/01/06...... 850,000 894,625
TRANSPORTATION -- 0.39%
- ---------------------------------------------------------------------------------
Atlas Air Inc. 12.25%, due 12/01/02............... 250,000 277,500
WASTE MANAGEMENT -- 1.37%
- ---------------------------------------------------------------------------------
Allied Waste North America Inc. 10.25%, due
12/01/06.......................................... 900,000 969,750
TOTAL CORPORATE BONDS, CONVERTIBLE SECURITIES & COMMON STOCKS
(IDENTIFIED COST $57,393,453).................................... 59,158,097
- ---------------------------------------------------------------------------------
FOREIGN BONDS -- 10.56%
- ---------------------------------------------------------------------------------
BASIC INDUSTRIES -- 1.80%
- ---------------------------------------------------------------------------------
Cemex S A 12.75%, due 07/15/06.................... 1,100,000 1,271,875
</TABLE>
36 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
HIGH-YIELD BOND PORTFOLIO -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
BROADCASTING -- 2.00%
- ---------------------------------------------------------------------------------
Grupo Televisa S A 11.375%, due 05/15/03.......... $ 850,000 $ 931,812
Grupo Televisa S A De C V 11.875%, due 05/15/06... 150,000 168,938
TV Azteca S A De C V 10.125%, due 02/15/04........ 300,000 307,500
-------------
1,408,250
CONTAINERS/PACKAGING -- 0.89%
- ---------------------------------------------------------------------------------
Viacap S A De C V 11.375%, due 05/15/07........... 600,000 629,250
GOVERNMENT BOND -- 3.30%
- ---------------------------------------------------------------------------------
Argentina Rep 11.00%, due 10/09/06................ 900,000 1,002,375
Mexico United Mexico States 9.875%, due
01/15/07.......................................... 500,000 531,875
Russian Federation 10.00%, due 06/26/07........... 300,000 298,125
St. Petersburg Russia 9.50%, due 06/18/02......... 500,000 500,625
-------------
2,333,000
OIL SERVICES -- 0.57%
- ---------------------------------------------------------------------------------
Petroleos Mexicanos 9.00%, due 06/01/07........... 400,000 402,500
PAPER & FOREST PRODUCTS -- 0.64%
- ---------------------------------------------------------------------------------
Indah Kiat Finance Mautitius Limited 10.00%, due
07/01/07.......................................... 450,000 448,313
TRANSPORTATION -- 1.36%
- ---------------------------------------------------------------------------------
Greater Bejing First Expressway 9.50%, due
06/15/07.......................................... 200,000 202,712
TFM S A Ce C V 10.25%, due 06/15/07............... 250,000 254,062
Transportacion Maritima Mexica 10.00%, due
11/15/06.......................................... 500,000 503,750
-------------
960,524
TOTAL FOREIGN BONDS
(IDENTIFIED COST $7,195,972)..................................... 7,453,712
- ---------------------------------------------------------------------------------
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
U.S. TREASURY BILLS -- 2.89%
- ---------------------------------------------------------------------------------
United States Treasury Bill 4.82%, due 09/04/97... $ 500,000 $ 495,649
United States Treasury Bill 4.85%, due 09/04/97... 750,000 743,432
United States Treasury Bill 5.07%, due 07/24/97... 800,000 797,409
-------------
2,036,490
TOTAL U.S. TREASURY BILLS
(IDENTIFIED COST $2,036,490)..................................... 2,036,490
- ---------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 2.17%
- ---------------------------------------------------------------------------------
State Street Bank & Trust Repurchase Agreement
4.00%, due 07/01/97
Collateral: U.S. Treasury Note $1,530,000 6.50%
due 8/15/05 Value $1,566,131...................... 1,535,000 1,535,000
-------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $1,535,000)..................................... 1,535,000
- ---------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $68,160,915).................................... $ 70,183,299
OTHER ASSETS LESS LIABILITIES -- 0.58%........................... 409,971
-------------
NET ASSETS -- 100%............................................... $ 70,593,270
- ---------------------------------------------------------------------------------
</TABLE>
(a) Non-income Producing
(v) Variable interest rate security. Maturity date shown is the next interest
reset date.
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 37
<PAGE>
THE ENTERPRISE TAX-EXEMPT INCOME PORTFOLIO
MORGAN STANLEY ASSET MANAGEMENT, INC.
New York, New York
INVESTMENT MANAGEMENT
Morgan Stanley Asset Management, Inc,. a wholly owned subsidiary of the Morgan
Stanley Group, Inc,. has managed the Enterprise Tax-Exempt Income Portfolio
since January 1, 1992. Morgan Stanley manages over $74 billion for institutional
clients. Morgan Stanley's normal investment minimum is $25 million.
INVESTMENT OBJECTIVE
The investment objective of the Enterprise Tax-Exempt Income Portfolio is to
seek a high level of current income exempt from federal income tax, with
consideration given to preservation of principal, primarily from investment in a
diversified portfolio of long term investment grade municipal bonds.
INVESTMENT PHILOSOPHY
Our management style is risk averse and conservative. We strive to add value by
concentrating on high quality tax-exempt municipal securities and capitalizing
on investment opportunities that arise because of volatility, changes in the
yield curve and sector analysis that reveals pricing inefficiencies.
FIRST HALF 1997 PERFORMANCE REVIEW
The U.S. fixed income market rebounded from a weak first quarter to turn in a
solid performance in the second quarter. Economic growth slowed markedly from
the very rapid pace of the first quarter and the major inflation measures
remained exceptionally well behaved. With an economy slowing to a more moderate
growth pace and with no signs of inflation, the Federal Reserve did not tighten
monetary policy at either its May or July meetings. The bond markets responded
quite favorably to these developments, with interest rates falling between 30
and 40 basis points across the yield curve.
Year-to-date, the Municipal bond market has done a commendable job of keeping up
with the U.S. Treasury market. Municipals, historically known to lag the
Treasury market during market surges, were able to put in a strong showing
during the 2nd quarter due to a number of factors. An active but manageable new
issue supply flow was met with strong seasonal demand due to the large number of
June and July bond redemptions and coupon payments. Property and casualty
insurance companies healthy appetite continued to fuel the new issue fire, with
deals being underwritten at very aggressive levels. Individual investors
remained selectively active, buying on the longer end of the yield curve during
market weakness and sticking to the shorter end when absolute yield levels did
not look enticing. As the second quarter came to a close, credit quality spreads
became non-existent, with AAA, AA and insured paper virtually trading on top of
each other versus a fifteen basis point plus spread at the beginning of the
year.
FUTURE INVESTMENT STRATEGY
While the Fed remains watchful for signals of potential inflationary pressures,
market participants have increasingly concluded that given the exceptionally
well behaved nature of inflation measures to date, the Fed may be unlikely to
tighten further without deterioration in these measures. If interest rates stay
at or near their current levels, a steady
38 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
stream of advance refunding of higher coupon outstanding bonds should keep
municipal supply and demand well balanced during the third quarter. In this
market environment, we will continue to focus on the high end of the quality
spectrum and will look for those credits we feel will differentiate themselves
when quality spreads return to more normal levels.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE
MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER
CONDITIONS.
THE ENTERPRISE GROUP OF FUNDS, INC. 39
<PAGE>
TAX-EXEMPT INCOME PORTFOLIO
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL BONDS -- 98.18%
<S> <C> <C>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------
ALABAMA -- 0.93%
- ----------------------------------------------------------------------------------
Alabama Housing Finance Authority Single
Family Mortgage Revenue Home Mortgage Series
A-1 6.55% due 10/01/14........................ $ 250,000 $ 263,998
ARIZONA -- 3.18%
- ----------------------------------------------------------------------------------
Salt River Project, Arizona Agriculture Import
and Power District Electric System Revenue
5.00% due 01/01/30............................ 1,000,000 903,890
CALIFORNIA -- 2.52%
- ----------------------------------------------------------------------------------
California State General Obligation Bonds
6.10% due 09/01/00............................ 150,000 162,920
Los Angeles County, California Sales Tax
Series A Revenue 6.75% due 07/01/18
Prerefunded 07/01/01 at 102................... 500,000 552,760
-------------
715,680
CONNECTICUT -- 0.39%
- ----------------------------------------------------------------------------------
Connecticut State Health & Education Facility
Revenue Hospital MBIA 7.10% due 07/01/25...... 100,000 109,371
DELAWARE -- 2.43%
- ----------------------------------------------------------------------------------
Delaware Transportation Authority Systems
Revenue 6.50% due 07/01/11 Prerefunded
07/01/01 at 102............................... 630,000 688,325
FLORIDA -- 8.11%
- ----------------------------------------------------------------------------------
Broward County, Broward Recovery Revenue 7.95%
due 12/01/08.................................. 325,000 353,756
Florida State Board Education Capital Outlay
Series C 5.50% due 06/01/23................... 1,500,000 1,471,620
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
Florida State Board Education Capital Outlay
Series A 7.25% due 06/01/23................... $ 170,000 $ 184,722
Orlando Florida Utilities Commission Water and
Electric Revenue Refunding Sub Series D 6.75%
due 10/01/17.................................. 250,000 291,927
-------------
2,302,025
GEORGIA -- 1.85%
- ----------------------------------------------------------------------------------
Atlanta Downtown Development Authority
Underground Atlanta Project 6.25% due
10/01/12...................................... 500,000 526,360
IDAHO -- 1.36%
- ----------------------------------------------------------------------------------
Idaho Housing Agency Single Family Mortgage
Revenue Series F-2 (AMT) 7.80% due 01/01/20... 365,000 385,790
ILLINOIS -- 2.89%
- ----------------------------------------------------------------------------------
Du Page County, Illinois Revenue 6.50% due
01/01/12 Prerefunded 01/01/02 at 102.......... 750,000 820,770
LOUISIANA -- 1.15%
- ----------------------------------------------------------------------------------
Louisiana State Offshore Term Authority
Deepwater Port Revenue Series E 7.60% due
09/01/10...................................... 300,000 327,555
MARYLAND -- 3.68%
- ----------------------------------------------------------------------------------
Maryland State General Obligation Bonds 5.50%
due 02/01/07.................................. 1,000,000 1,044,120
MASSACHUSETTS -- 2.77%
- ----------------------------------------------------------------------------------
Massachusetts State Housing Finance Agency
Revenue Residential FNMA Collateral-A 6.90%
due 11/15/24.................................. 750,000 785,408
</TABLE>
40 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
TAX-EXEMPT INCOME PORTFOLIO -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
MICHIGAN -- 3.80%
- ----------------------------------------------------------------------------------
Michigan State Building Authority Revenue
Series I 6.40% due 10/01/04................... $ 1,000,000 $ 1,077,790
MISSOURI -- 0.47%
- ----------------------------------------------------------------------------------
Missouri State Housing Development Community
Mortgage Single Family GNMA Revenue Series B
(AMT) 8.25% due 05/01/19...................... 130,000 134,646
NEBRASKA -- 3.57%
- ----------------------------------------------------------------------------------
Omaha Public Power District Nebraska Electric
Revenue 5.60% due 02/01/12.................... 1,000,000 1,012,240
NEVADA -- 6.84%
- ----------------------------------------------------------------------------------
Clark County School District Series A MBIA
7.00% due 06/01/11............................ 750,000 879,877
Nevada State General Obligation Bonds 6.25%
due 07/01/12.................................. 1,000,000 1,060,290
-------------
1,940,167
NEW MEXICO -- 1.59%
- ----------------------------------------------------------------------------------
New Mexico Mortgage Finance Authority Single
Family Mortgage 7.80% due 09/01/17............ 435,000 449,847
NEW YORK -- 12.50%
- ----------------------------------------------------------------------------------
New York City General Obligation Series B (v)
5.50% due 07/01/97............................ 100,000 100,000
New York City Municipal Water Finance
Authority Water And Sewer Systems Revenue
Series A (v) 5.50% due 07/01/97............... 100,000 100,000
New York State Local Government Assistance
7.00% due 04/01/21 Prerefunded 04/01/01 at
102........................................... 500,000 552,695
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
New York State Mortgage Agency Revenue 7.95%
due 10/01/14.................................. $ 200,000 $ 204,918
New York State Power Authority Revenue &
General Purpose Series CC 5.00% due
01/01/09...................................... 1,200,000 1,188,144
Triborough Bridge & Tunnel Authority, New York
General Purpose Series A 6.00% due 01/01/10... 1,300,000 1,400,503
-------------
3,546,260
OHIO -- 0.24%
- ----------------------------------------------------------------------------------
Ohio Housing Finance Agency Single Family
Mortgage Revenue GNMA (AMT) 8.25% due
12/15/19...................................... 65,000 67,835
OKLAHOMA -- 5.57%
- ----------------------------------------------------------------------------------
Tulsa, Oklahoma General Obligation Bonds 6.30%
due 06/01/17.................................. 1,500,000 1,580,040
OREGON -- 1.49%
- ----------------------------------------------------------------------------------
Oregon State General Obligation Bonds 7.00%
due 12/01/11.................................. 400,000 422,996
PENNSYLVANIA -- 2.90%
- ----------------------------------------------------------------------------------
Philadelphia Pennsylvania Hospitals & Higher
Education Facilities Hospital Revenue 6.50%
due 02/15/09 Prerefunded 02/15/02 at 102...... 750,000 822,090
SOUTH CAROLINA -- 0.18%
- ----------------------------------------------------------------------------------
Charleston County South Carolina Resource
Recovery Revenue (AMT) 9.25% due 01/01/10..... 50,000 52,516
TEXAS -- 7.82%
- ----------------------------------------------------------------------------------
Brazos River Authority Texas Revenue 8.25% due
05/01/15...................................... 150,000 157,220
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 41
<PAGE>
TAX-EXEMPT INCOME PORTFOLIO -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
Houston Texas General Obligation Bonds 6.00%
due 03/01/05.................................. $ 500,000 $ 525,835
San Antonio, Revenue Refunding General
Obligation Bonds 5.75% due 08/01/13........... 975,000 990,434
Texas Housing Agency Residential Development
Revenue Series A GNMA Collateral 7.60% due
07/01/16...................................... 110,000 114,206
Texas State Department Housing Community
Affairs Home Mortgage Revenue GNMA Collateral
Series A 6.95% due 07/01/23................... 410,000 431,919
-------------
2,219,614
UTAH -- 0.28%
- ----------------------------------------------------------------------------------
Utah State Housing Finance Agency Single
Family Mortgage Series E (AMT) 9.00% due
01/01/19...................................... 75,000 79,100
VIRGINIA -- 10.76%
- ----------------------------------------------------------------------------------
Fairfax County, Virginia General Obligation
Bonds 5.40% due 05/01/11...................... 1,000,000 1,013,320
Fairfax County, Virginia Water Authority
Revenue 5.75% due 04/01/29.................... 1,000,000 1,000,700
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
Virginia State Transportation Board Revenue
6.00% due 04/01/10............................ $ 1,000,000 $ 1,038,490
-------------
3,052,510
WASHINGTON -- 7.31%
- ----------------------------------------------------------------------------------
Tacoma, Washington Electric Systems Revenue
AMBAC 6.15% due 01/01/08...................... 1,000,000 1,060,830
Washington State General Obligation Series 93A
5.75% due 10/01/17............................ 1,000,000 1,014,020
-------------
2,074,850
WISCONSIN -- 1.60%
- ----------------------------------------------------------------------------------
Wisconsin Housing & Economic Development
Authority Home Ownership Revenue Series A
7.75% due 09/01/17............................ 435,000 454,783
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $26,452,568)..................................... 27,860,576
- ----------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $26,452,568)..................................... $ 27,860,576
OTHER ASSETS LESS LIABILITIES -- 1.82%............................ 517,670
-------------
NET ASSETS -- 100%................................................ $ 28,378,246
- ----------------------------------------------------------------------------------
</TABLE>
AMT Securities subject to Alternative Minimum Tax
(v) Variable interest rate security; Interest rate is as of June 30, 1997, and
is adjusted daily. Maturity date shown is the next interest reset date.
See notes to financial statements.
42 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
THE ENTERPRISE MANAGED PORTFOLIO
OPCAP ADVISORS
New York, New York
INVESTMENT MANAGEMENT
OpCap Advisors, a wholly owned subsidiary of Oppenheimer Capital, became
investment adviser to the Enterprise Managed Portfolio on October 1, 1994.
Oppenheimer Capital currently manages approximately $57 billion for
institutional clients. OpCap Advisors' normal investment minimum is $10 million.
INVESTMENT OBJECTIVE
The objective of the Enterprise Managed Portfolio is to seek growth of capital
over time through investment in a portfolio consisting of common stocks, bonds
and cash equivalents, the percentages of which will vary based on our assessment
of relative investment values.
INVESTMENT PHILOSOPHY
Our investment process allows us to take advantage of opportunities in all
market sectors by shifting the investment mix among stocks, bonds and money
market instruments. The focus of our investment process is to identify quality
companies that are undervalued in the market. The average annual return on
equity of these companies is in excess of the average return on equity of the
companies in the S&P 500 Index, while the average price-earnings ratio of these
companies is significantly below the price-earnings ratio for those companies in
the S&P 500 Index. This combination of high returns on equity and low security
valuations may help preserve capital in down markets and may provide opportunity
for investment profit over time.
FIRST HALF 1997 PERFORMANCE REVIEW
After a weak first quarter, the market took off during the second quarter,
rising relentlessly and confounding the skeptics along the way. What would have
been considered miraculous only a few years ago, low unemployment with low
inflation, has become recurring economic reality. In May, the jobless rate fell
to 4.8%, the lowest in 24 years. Defying standard economic theory that tight job
markets lead to inflation, the consumer price index subsided also, rising only
2.25 from a year earlier. When one stands back from the usual gyrations in
short-term economic data, there are few signs of disruption to this favorable
economic environment. If we were to worry, it would be about tightening labor
markets. Rising wage rates could boost inflation somewhat but we believe that a
protracted problem with inflation can be caused only by too-rapid growth of the
money supply.
FUTURE INVESTMENT STRATEGY
At June 30 Portfolio assets were allocated 87% to common stocks and 13% to cash
and cash equivalents. We expect companies owned by the Portfolio to continue to
improve their results. The pending consummation of the merger of McDonnell
Douglas Corporation and Boeing Co. should enable our McDonnell Douglas holding
to perform well. In the coming months, we expect E.I. DuPont de Nemours Company
to announce a restructuring which may spur its business performance. While the
market has mistakenly, in our view, neglected Citicorp stock much of this year,
its business, particularly the two-thirds generated by international operations,
continues to surge. Moreover, Citicorp continues to repurchase its shares at a
very aggressive pace. Share repurchases add value by reducing the number
outstanding, making the remaining shares worth more.
THE ENTERPRISE GROUP OF FUNDS, INC. 43
<PAGE>
Our major disappointment this year is Wells Fargo which has encountered severe
difficulties in its merger with First Interstate Bancorp, completed in April
1996. We do not foresee a resolution of these issues before year end.
Fortunately, the company continues to repurchase its stock at a high rate of
approximately 7% to 8% per year. We continue to own the stock in anticipation it
will provide superior returns over time.
The Portfolio continues to seek to invest in businesses that are worth
inherently more, in our judgment, than their asking prices. We seek to preserve
the Portfolio's capital in all market conditions, including market corrections,
because we remain disciplined about not overpaying for stocks and because the
businesses in which we invest tend to generate excess cash which they use to
create long-term value for shareholders. We remain focused on individual
companies where we try to understand in what direction their businesses are
going over the next several years and are less concerned about attempting to
predict where the stock market is heading in the next month.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE
MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER
CONDITIONS.
44 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
MANAGED PORTFOLIO
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
COMMON STOCKS -- 87.37% AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
AEROSPACE -- 6.62%
- ---------------------------------------------------------------------------------
Lockheed Martin Corporation....................... 55,000 $ 5,695,938
Loral Space & Communications (a).................. 45,000 675,000
McDonnell Douglas Corporation..................... 190,000 13,015,000
-------------
19,385,938
AUTOMOTIVE -- 1.89%
- ---------------------------------------------------------------------------------
LucasVarity PLC (ADR)............................. 160,000 5,540,000
BANKING -- 13.37%
- ---------------------------------------------------------------------------------
BankBoston Corporation............................ 100,000 7,206,250
Citicorp.......................................... 110,000 13,261,875
First Empire State Corporation.................... 11,500 3,875,500
Wells Fargo & Company............................. 55,000 14,822,500
-------------
39,166,125
CABLE -- 4.57%
- ---------------------------------------------------------------------------------
Tele-Communications Inc. (a)...................... 900,000 13,387,500
CHEMICALS -- 6.56%
- ---------------------------------------------------------------------------------
Du Pont (E. I.) de Nemours & Company.............. 230,000 14,461,250
Hercules Inc...................................... 54,600 2,613,975
Monsanto Company.................................. 50,000 2,153,125
-------------
19,228,350
COMPUTER SOFTWARE -- 0.95%
- ---------------------------------------------------------------------------------
Computer Associates International Inc............. 50,000 2,784,375
CONSUMER PRODUCTS -- 6.45%
- ---------------------------------------------------------------------------------
Mattel Inc........................................ 360,000 12,195,000
Nike Inc.......................................... 115,000 6,713,125
-------------
18,908,125
DRUGS & MEDICAL PRODUCTS -- 2.42%
- ---------------------------------------------------------------------------------
Becton, Dickinson & Company....................... 140,000 7,087,500
ELECTRICAL EQUIPMENT -- 1.57%
- ---------------------------------------------------------------------------------
Varian Associates Inc............................. 85,000 4,611,250
ELECTRONICS -- 0.77%
- ---------------------------------------------------------------------------------
Unitrode Corporation (a).......................... 45,000 2,266,875
ENERGY -- 1.72%
- ---------------------------------------------------------------------------------
Triton Energy Ltd. (a)............................ 110,000 5,039,375
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
INSURANCE -- 6.40%
- ---------------------------------------------------------------------------------
ACE Ltd........................................... 50,000 $ 3,693,750
EXEL Ltd.......................................... 210,000 11,077,500
Travelers Property Casualty Corporation........... 100,000 3,987,500
-------------
18,758,750
MACHINERY -- 7.65%
- ---------------------------------------------------------------------------------
Caterpillar Inc................................... 110,000 11,811,250
Tenneco Inc....................................... 234,300 10,587,431
-------------
22,398,681
METALS & MINING -- 1.81%
- ---------------------------------------------------------------------------------
Freeport McMoRan Copper & Gold (Class B).......... 170,000 5,291,250
MISC. FINANCIAL SERVICES -- 10.86%
- ---------------------------------------------------------------------------------
American Express Company.......................... 80,000 5,960,000
Countrywide Credit Industries Inc................. 130,000 4,054,375
Federal Home Loan Mortgage Corporation............ 400,000 13,750,000
Federal National Mortgage Association............. 184,700 8,057,537
-------------
31,821,912
PAPER & FOREST PRODUCTS -- 2.64%
- ---------------------------------------------------------------------------------
Champion International Corporation................ 140,000 7,735,000
PUBLISHING -- 0.44%
- ---------------------------------------------------------------------------------
Donnelley R R & Sons Company...................... 35,100 1,285,538
RESTAURANTS -- 3.96%
- ---------------------------------------------------------------------------------
McDonalds Corporation............................. 240,000 11,595,000
TECHNOLOGY -- 4.35%
- ---------------------------------------------------------------------------------
Intel Corporation................................. 37,100 5,261,244
National Semiconductor Corporation (a)............ 244,300 7,481,687
-------------
12,742,931
TRANSPORTATION -- 1.93%
- ---------------------------------------------------------------------------------
Union Pacific Corporation......................... 80,000 5,640,000
WASTE MANAGEMENT -- 0.44%
- ---------------------------------------------------------------------------------
Waste Management Inc.............................. 39,961 1,283,747
TOTAL COMMON STOCKS
(IDENTIFIED COST $194,510,268)................................... 255,958,222
- ---------------------------------------------------------------------------------
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 45
<PAGE>
MANAGED PORTFOLIO -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
- ---------------------------------------------------------------------------------
COMMERCIAL PAPER -- 9.52%
<S> <C> <C>
- ---------------------------------------------------------------------------------
General Electric Company 5.52% due 07/17/97....... $ 10,000,000 $ 9,975,467
IBM Credit Corporation 5.54% due 07/28/97......... 9,000,000 8,962,605
Ford Motor Credit Company 5.53% due 07/28/97...... 9,000,000 8,962,672
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $27,900,744).................................... 27,900,744
- ---------------------------------------------------------------------------------
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 3.19%
- ---------------------------------------------------------------------------------
State Street Bank & Trust Repurchase Agreement,
5.00% due 07/01/97
Collateral: U.S. Treasury Note $9,310,000, 6.50%
due 8/15/05 Value $9,529,856...................... $ 9,340,000 $ 9,340,000
-------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $9,340,000)..................................... 9,340,000
- ---------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $231,751,012)................................... $ 293,198,966
OTHER ASSETS LESS LIABILITIES -- (0.08)%......................... (224,326)
-------------
NET ASSETS -- 100%............................................... $ 292,974,640
- ---------------------------------------------------------------------------------
</TABLE>
(a) Non-income Producing
ADR American Depository Receipts
Ltd Limited
See notes to financial statements.
46 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
THE ENTERPRISE MONEY MARKET PORTFOLIO
ENTERPRISE CAPITAL MANAGEMENT, INC.
Atlanta, Georgia
INVESTMENT MANAGEMENT
Enterprise Capital Management is a wholly owned subsidiary of The Mutual Life
Insurance Company of New York. We have managed the Enterprise Money Market
Portfolio since May 1, 1992.
INVESTMENT OBJECTIVE
The objective of the Enterprise Money Market Portfolio is the highest possible
level of current income consistent with the preservation of capital and
liquidity in obligations maturing in one year or less from the time of purchase.
INVESTMENT PHILOSOPHY
We invest primarily in high quality (A-1/P-1) short-term money market
instruments, principally commercial paper. While interest rate projection is not
a key component of our management style, we do emphasize purchases primarily in
a maturity range of 60 to 120 days. This provides the Portfolio flexibility to
respond to significant changes in the market.
FIRST HALF 1997 PERFORMANCE REVIEW
On a wave of rising fears of rapid economic expansion, the Federal Reserve acted
at its March meeting to increase the short-term Fed Funds rate to 5.5% from
5.25%, the first move in over a year. Over the course of the second quarter of
1997, concerns subsided among fixed income investors over a further move by the
Federal Reserve Board to tighten monetary policy via another boost in the
overnight Fed Funds rate. Retail sales, a key indicator of economic vitality,
slowed markedly in the second quarter falling at an annualized rate of 5.3% from
February to May, hinting at a much quieter economic pace than that exhibited in
the first quarter. Still, leading up to the May meeting, many market
participants thought the Fed would again tighten monetary policy due to very
tight labor market conditions. However, the Fed held its policy steady in May
and has been vindicated in the face of a quiescent inflationary backdrop,
moderating economic growth and recent easing of labor market pressures.
The yield curve remains relatively flat. Investors responded to the moderating
economic conditions in the second quarter and the Fed's restraint against
additional tightening of monetary policy by staging a strong rally. Interest
rates on the long Treasury declined by 32 basis points in the second quarter
from a yield of 7.10% at the end of the first quarter to 6.78% at the end of the
second quarter. The 30 day and 7 day effective yield of the Enterprise Money
Market Portfolio were identical at 4.76% as of June 30, 1997, with an average
maturity of 31 days.
FUTURE INVESTMENT STRATEGY
The prevailing sentiment is that the Federal Open Market Committee is on hold in
terms of an interest rate move absent a significant re-igniting of economic
growth in the third quarter. The Portfolio is being managed to react quickly to
the change of investor expectations. Short maturity investments allow
flexibility, while some longer maturity investments lock in yields.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE
MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER
CONDITIONS.
THE ENTERPRISE GROUP OF FUNDS, INC. 47
<PAGE>
MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
COMMERCIAL PAPER -- 91.98% AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
American Express Credit Corporation, 5.52% due
07/28/97.......................................... $ 2,000,000 $ 1,991,720
Associates Corporation North America, 5.56% due
07/07/97.......................................... 1,600,000 1,598,517
Associates Corporation North America, 5.61% due
07/24/97.......................................... 1,100,000 1,096,057
Avco Financial Services Inc 5.65% due 07/21/97.... 1,000,000 996,861
Avco Financial Services Inc. 5.58% due 07/03/97... 2,000,000 1,999,380
Banco Real S A Grand Cayman 5.57% due 10/02/97.... 3,000,000 2,956,833
Bank of New York 5.52% due 07/10/97............... 3,000,000 2,995,860
Bell Atlantic Financial Services 5.55% due
07/07/97.......................................... 2,018,000 2,016,133
Canadian Wheat Board 5.57% due 07/15/97........... 2,500,000 2,494,585
Capital One Funding Corporation 5.63% due
07/03/97.......................................... 2,500,000 2,500,000
CIT Group Holdings Inc. 5.56% due 07/03/97........ 1,500,000 1,499,537
CIT Group Holdings Inc. 5.58% due 07/07/97........ 900,000 899,163
Commercial Credit Company 5.55% due 08/29/97...... 3,000,000 2,972,713
Copley Financing Corporation 5.55% due 07/02/97... 2,500,000 2,499,615
Dupont E I De Nemours & Company 5.54% due
08/04/97.......................................... 2,500,000 2,486,919
Enterprise Funding Corporation 5.54% due
07/11/97.......................................... 1,000,000 998,461
Ford Motor Credit Company 5.53% due 08/26/97...... 500,000 495,699
Ford Motor Credit Company 5.61% due 07/07/97...... 1,300,000 1,298,785
General Electric Capital Corporation, 5.52% due
07/25/97.......................................... 1,000,000 996,320
Heller Financial Inc. 5.64% due 07/22/97.......... 1,500,000 1,495,065
Heller Financial Inc. 5.68% due 07/21/97.......... 1,000,000 996,844
Household Finance Corporation 5.48% due
07/14/97.......................................... 1,200,000 1,197,625
Household Finance Corporation 5.59% due
08/25/97.......................................... 1,800,000 1,784,628
John Hancock Capital Corporation 5.60% due
08/12/97.......................................... 1,000,000 993,467
John Hancock Capital Corporation 5.68% due
08/12/97.......................................... 1,000,000 993,373
Lucent Technologies Inc. 5.57% due 08/04/97....... 2,200,000 2,188,427
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Merrill Lynch & Company Inc. 5.58% due 07/21/97... $ 645,000 $ 643,001
Merrill Lynch & Company Inc. 5.60% due 08/26/97... 1,000,000 991,289
Metropolitan Life Funding Inc. 5.53% due
07/18/97.......................................... 1,288,000 1,284,637
National Westminster Bank Plc 5.61% due
07/08/97.......................................... 1,000,000 998,909
NYNEX Corporation 5.53% due 07/24/97.............. 2,500,000 2,491,167
Paccar Financial Corporation 5.58% due 07/03/97... 500,000 499,845
Panasonic Finance Inc. 5.55% due 07/14/97......... 2,000,000 1,995,992
Province De Quebec 5.65% due 07/08/97............. 2,500,000 2,497,253
Prudential Funding Corporation 5.56% due
07/14/97.......................................... 1,000,000 997,992
Sanwa Business Credit Corporation, 5.55% due
07/15/97.......................................... 300,000 299,353
Sears Roebuck Acceptance Corporation, 5.55% due
07/21/97.......................................... 2,000,000 1,993,833
Sears Roebuck Acceptance Corporation, 5.58% due
07/17/97.......................................... 1,000,000 997,520
Sony Capital Corporation 5.54% due 07/17/97....... 2,000,000 1,995,074
-------------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $62,128,452).................................... 62,128,452
- ---------------------------------------------------------------------------------
CORPORATE NOTES -- 3.70%
- ---------------------------------------------------------------------------------
Asset Backed Securities Investment Trust (v),
5.69% due 07/15/97................................ 2,500,000 2,500,000
-------------
TOTAL CORPORATE NOTES
(IDENTIFIED COST $2,500,000)..................................... 2,500,000
- ---------------------------------------------------------------------------------
SHORT TERM GOVERNMENT SECURITIES -- 3.70%
- ---------------------------------------------------------------------------------
Federal Home Loan Bank 5.85% due 11/06/97......... 1,000,000 1,000,000
Federal Home Loan Bank 5.91% due 03/24/98......... 1,500,000 1,500,000
-------------
TOTAL SHORT TERM GOVERNMENT SECURITIES
(IDENTIFIED COST $2,500,000)..................................... 2,500,000
- ---------------------------------------------------------------------------------
</TABLE>
48 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
MONEY MARKET PORTFOLIO -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 0.41%
- ---------------------------------------------------------------------------------
State Street Bank & Trust Repurchase Agreement,
2.00% due 07/01/97
Collateral: U.S. Treasury Bond $200,000 13.75% due
8/15/04 Value $292,349............................ $ 280,000 $ 280,000
-------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $280,000)....................................... 280,000
- ---------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $67,408,452).................................... $ 67,408,452
OTHER ASSETS LESS LIABILITIES -- 0.21%........................... 140,331
-------------
NET ASSETS -- 100%............................................... $ 67,548,783
- ---------------------------------------------------------------------------------
</TABLE>
(v) Variable interest rate security; interest rate is as of June 30, 1997. The
maturity date shown is the next interest reset date.
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 49
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
- --------------------------------------------------------------------------------
June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY CAPITAL
GROWTH EQUITY INCOME APPRECIATION
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- ------------ ------------- --------------
<S> <C> <C> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------------------
Investments at value $ 426,249,963 $ 2,155,656 $ 98,445,001 $ 119,082,015
- -------------------------------------------------------------------------------------------
Foreign currency at value
(identified cost-$511,188) -- -- -- --
- -------------------------------------------------------------------------------------------
Receivable for fund shares
sold 9,517,302 94,511 260,483 34,966
- -------------------------------------------------------------------------------------------
Receivable for investments
sold -- -- 456,261 292,490
- -------------------------------------------------------------------------------------------
Dividends and interest
receivable 132,603 1,232 108,870 59,841
- -------------------------------------------------------------------------------------------
Due from investment adviser -- 10,999 6,195 --
- -------------------------------------------------------------------------------------------
Forward currency contracts
(net) receivable -- -- -- --
- -------------------------------------------------------------------------------------------
Cash and other assets 749 3,510 470 46,866
- -------------------------------------------------------------------------------------------
Total assets $ 435,900,617 $ 2,265,908 $ 99,277,280 $ 119,516,178
- -------------------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------------------
Payable for fund shares
redeemed 592,369 -- 51,664 105,751
- -------------------------------------------------------------------------------------------
Payable for investments
purchased 3,804,230 210,789 -- --
- -------------------------------------------------------------------------------------------
Dividends and distributions
payable -- -- 15,986 --
- -------------------------------------------------------------------------------------------
Investment advisory fee
payable 252,405 1,013 60,171 72,936
- -------------------------------------------------------------------------------------------
Distribution fee payable 185,199 724 40,914 46,598
- -------------------------------------------------------------------------------------------
Other accrued expenses 100,655 19,925 58,913 101,373
- -------------------------------------------------------------------------------------------
Total liabilities $ 4,934,858 $ 232,451 $ 227,648 $ 326,658
- -------------------------------------------------------------------------------------------
NET ASSETS $ 430,965,759 $ 2,033,457 $ 99,049,632 $ 119,189,520
- -------------------------------------------------------------------------------------------
ANALYSIS OF NET ASSETS
- -------------------------------------------------------------------------------------------
Accumulated paid-in capital 290,313,502 1,905,461 62,977,327 70,864,555
- -------------------------------------------------------------------------------------------
Undistributed net investment
income (loss) (1,019,762) 487 (8,959) (591,693)
- -------------------------------------------------------------------------------------------
Accumulated net realized gain
(loss) on investments 3,774,313 1,847 4,651,989 8,210,338
- -------------------------------------------------------------------------------------------
Accumulated net realized
gain(loss) on futures -- -- -- --
- -------------------------------------------------------------------------------------------
Unrealized appreciation
(depreciation) of investments
and foreign currencies
denominated amounts 137,897,706 125,662 31,429,275 40,706,320
- -------------------------------------------------------------------------------------------
Net assets $ 430,965,759 $ 2,033,457 $ 99,049,632 $ 119,189,520
- -------------------------------------------------------------------------------------------
CLASS A: NET ASSETS $ 301,330,972 $ 1,643,128 $ 87,824,606 $ 112,772,834
- -------------------------------------------------------------------------------------------
Shares outstanding 19,043,628 297,276 3,304,969 3,000,103
- -------------------------------------------------------------------------------------------
Net asset value and redemption
price per share $15.82 $5.53 $26.57 $37.59
- -------------------------------------------------------------------------------------------
Sales charge per share $0.79 $0.28 $1.33 $1.87
- -------------------------------------------------------------------------------------------
Maximum offering price per
share, including sales charge
of 4.75% $16.61 $5.81 $27.90 $39.46
- -------------------------------------------------------------------------------------------
CLASS B: NET ASSETS $ 92,772,864 $ 359,291 $ 11,123,414 $ 6,391,713
- -------------------------------------------------------------------------------------------
Shares outstanding 5,934,359 65,046 421,806 172,274
- -------------------------------------------------------------------------------------------
Net asset value and offering
price per share $15.63 $5.52 $26.37 $37.10
- -------------------------------------------------------------------------------------------
CLASS C: NET ASSETS $ 5,326,189 $ 31,038 $ 101,612 $ 24,973
- -------------------------------------------------------------------------------------------
Shares outstanding 336,719 5,613 3,829 664
- -------------------------------------------------------------------------------------------
Net asset value and offering
price per share $15.82 $5.53 $26.54 $37.60
- -------------------------------------------------------------------------------------------
CLASS Y: NET ASSETS $ 31,535,734 $ -- $ -- $ --
- -------------------------------------------------------------------------------------------
Shares outstanding 1,984,971 -- -- --
- -------------------------------------------------------------------------------------------
Net asset value, offering and
redemption price per share $15.89 -- -- --
- -------------------------------------------------------------------------------------------
INVESTMENTS AT COST $ 288,352,257 $ 2,029,994 $ 67,015,726 $ 78,375,695
- -------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
50 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
<TABLE>
<CAPTION>
SMALL
COMPANY INTERNATIONAL GOVERNMENT HIGH-YIELD TAX-EXEMPT MONEY
VALUE GROWTH SECURITIES BOND INCOME MANAGED MARKET
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------------------------------------------------------
Investments at value $31,072,581 $ 57,360,751 $ 76,090,716 $ 70,183,299 $ 27,860,576 $ 293,198,966 $ 67,408,452
- --------------------------------------------------------------------------------------------------------------------------------
Foreign currency at value
(identified cost-$511,188) -- 507,226 -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Receivable for fund shares
sold 382,855 619,370 93,697 289,621 6,763 1,876,497 855,844
- --------------------------------------------------------------------------------------------------------------------------------
Receivable for investments
sold 299,964 56,100 -- 1,151,428 -- 288,815 --
- --------------------------------------------------------------------------------------------------------------------------------
Dividends and interest
receivable 10,908 283,223 560,696 1,225,842 523,287 157,455 91,712
- --------------------------------------------------------------------------------------------------------------------------------
Due from investment adviser 6,028 -- 8,810 8,266 6,904 -- 10,021
- --------------------------------------------------------------------------------------------------------------------------------
Forward currency contracts
(net) receivable -- 810,392 -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Cash and other assets 22,040 21,002 66,195 431 44,452 44,353 138,505
- --------------------------------------------------------------------------------------------------------------------------------
Total assets $31,794,376 $ 59,658,064 $ 76,820,114 $ 72,858,887 $ 28,441,982 $ 295,566,086 $ 68,504,534
- --------------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------------------------------------------------------
Payable for fund shares
redeemed 64,997 112,069 76,182 24,881 -- 271,211 832,261
- --------------------------------------------------------------------------------------------------------------------------------
Payable for investments
purchased 415,762 555,031 -- 2,030,407 -- 1,891,408 --
- --------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions
payable -- -- 83,656 107,207 23,612 -- 23,906
- --------------------------------------------------------------------------------------------------------------------------------
Investment advisory fee
payable 17,888 41,926 37,664 34,526 11,754 176,529 19,287
- --------------------------------------------------------------------------------------------------------------------------------
Distribution fee payable 13,320 20,804 31,872 31,345 11,496 117,895 19,049
- --------------------------------------------------------------------------------------------------------------------------------
Other accrued expenses 31,459 74,388 48,413 37,251 16,874 134,403 61,248
- --------------------------------------------------------------------------------------------------------------------------------
Total liabilities $ 543,426 $ 804,218 $ 277,787 $ 2,265,617 $ 63,736 $ 2,591,446 $ 955,751
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $31,250,950 $ 58,853,846 $ 76,542,327 $ 70,593,270 $ 28,378,246 $ 292,974,640 $ 67,548,783
- --------------------------------------------------------------------------------------------------------------------------------
ANALYSIS OF NET ASSETS
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated paid-in capital 23,822,308 47,726,736 82,555,144 69,910,016 26,823,223 225,969,371 67,548,783
- --------------------------------------------------------------------------------------------------------------------------------
Undistributed net investment
income (loss) 101,364 249,490 6,299 -- -- 616,199 --
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated net realized gain
(loss) on investments 2,409,516 2,005,992 (4,090,446) (1,260,418) 147,015 4,941,116 --
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated net realized
gain(loss) on futures -- -- -- (78,711) -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation
(depreciation) of investments
and foreign currencies
denominated amounts 4,917,762 8,871,628 (1,928,670) 2,022,383 1,408,008 61,447,954 --
- --------------------------------------------------------------------------------------------------------------------------------
Net assets $31,250,950 $ 58,853,846 $ 76,542,327 $ 70,593,270 $ 28,378,246 $ 292,974,640 $ 67,548,783
- --------------------------------------------------------------------------------------------------------------------------------
CLASS A: NET ASSETS $24,541,264 $ 39,961,801 $ 68,275,090 $ 58,193,921 $ 26,290,844 $ 135,247,866 $ 61,150,468
- --------------------------------------------------------------------------------------------------------------------------------
Shares outstanding 3,426,829 2,071,143 5,802,554 4,847,854 1,898,364 14,991,434 61,150,468
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value and redemption
price per share $7.16 $19.29 $11.77 $12.00 $13.85 $9.02 $1.00
- --------------------------------------------------------------------------------------------------------------------------------
Sales charge per share $0.36 $0.96 $0.59 $0.60 $0.69 $0.45 --
- --------------------------------------------------------------------------------------------------------------------------------
Maximum offering price per
share, including sales charge
of 4.75% $7.52 $20.25 $12.36 $12.60 $14.54 $9.47 $1.00
- --------------------------------------------------------------------------------------------------------------------------------
CLASS B: NET ASSETS $ 6,431,050 $ 8,047,191 $ 8,247,052 $ 12,223,832 $ 2,085,380 $ 85,683,005 $ 6,228,721
- --------------------------------------------------------------------------------------------------------------------------------
Shares outstanding 909,195 421,430 700,999 1,018,316 150,573 9,573,904 6,228,721
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value and offering
price per share $7.07 $19.09 $11.76 $12.00 $13.85 $8.95 $1.00
- --------------------------------------------------------------------------------------------------------------------------------
CLASS C: NET ASSETS $ 210,619 $ 114,163 $ 20,185 $ 175,517 $ 2,022 $ 486,364 $ 169,594
- --------------------------------------------------------------------------------------------------------------------------------
Shares outstanding 29,397 5,915 1,715 14,624 146 53,916 169,594
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value and offering
price per share $7.16 $19.30 $11.77 $12.00 $13.85 $9.02 $1.00
- --------------------------------------------------------------------------------------------------------------------------------
CLASS Y: NET ASSETS $ 68,017 $ 10,730,691 $ -- $ -- $ -- $ 71,557,405 $ --
- --------------------------------------------------------------------------------------------------------------------------------
Shares outstanding 9,449 555,000 -- -- -- 7,903,157 --
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, offering and
redemption price per share $7.20 $19.33 -- -- -- $9.05 --
- --------------------------------------------------------------------------------------------------------------------------------
INVESTMENTS AT COST $26,154,819 $ 49,301,283 $ 78,019,386 $ 68,160,915 $ 26,452,568 $ 231,751,012 $ 67,408,452
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 51
<PAGE>
STATEMENT OF OPERATIONS (UNAUDITED)
- --------------------------------------------------------------------------------
For Six Months Ended June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY CAPITAL
GROWTH EQUITY INCOME APPRECIATION
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
- -------------------------------------------------------------------------------------------------
Dividends $ 1,021,539(2) $ 3,085 $ 1,040,113(2) $ 276,116(2)
- -------------------------------------------------------------------------------------------------
Interest 346,183 1,204 237,707 99,176
- -------------------------------------------------------------------------------------------------
Total 1,367,722 4,289 1,277,820 375,292
- -------------------------------------------------------------------------------------------------
EXPENSES:
- -------------------------------------------------------------------------------------------------
Management fees 1,177,425 1,725 322,698 437,494
- -------------------------------------------------------------------------------------------------
Distribution fees, Class A 543,938 936 176,098 249,969
- -------------------------------------------------------------------------------------------------
Distribution fees, Class B 305,237 208 38,887 27,829
- -------------------------------------------------------------------------------------------------
Distribution fees, Class C 4,598 13 47 11
- -------------------------------------------------------------------------------------------------
Transfer agent fees 250,812 10,098 112,396 165,392
- -------------------------------------------------------------------------------------------------
Custodian and accounting
fees 39,550(1) 5,976 29,608 28,472
- -------------------------------------------------------------------------------------------------
Audit and legal fees 20,553 2,486 13,209 17,647
- -------------------------------------------------------------------------------------------------
Reports to shareholders 24,200 2,178 11,396 19,475
- -------------------------------------------------------------------------------------------------
Registration fees 16,210 1,245 12,944 13,138
- -------------------------------------------------------------------------------------------------
Directors' fees 2,628 883 2,628 2,628
- -------------------------------------------------------------------------------------------------
Other expenses 15,009 597 4,182 4,930
- -------------------------------------------------------------------------------------------------
Total expenses 2,400,160 26,345 724,093 966,985
- -------------------------------------------------------------------------------------------------
Less: Expense
reimbursement (12,676)(1) (22,543) (57,273) --
- -------------------------------------------------------------------------------------------------
Total expenses, net of
reimbursement 2,387,484 3,802 666,820 966,985
- -------------------------------------------------------------------------------------------------
Net investment income (loss) (1,019,762) 487 611,000 (591,693)
- -------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
- -------------------------------------------------------------------------------------------------
Net realized gain (loss) on
security transactions 3,267,467 1,847 3,860,926 6,832,923
- -------------------------------------------------------------------------------------------------
Net realized gain on foreign
currency transactions -- -- -- --
- -------------------------------------------------------------------------------------------------
Net realized loss from
futures transactions -- -- -- --
- -------------------------------------------------------------------------------------------------
Net change in unrealized
gain (loss) of investments
and foreign currency
related transactions 60,401,692 125,662 10,932,447 4,786,515
- -------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS 63,669,159 127,509 14,793,373 11,619,438
- -------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS $ 62,649,397 $ 127,996 $ 15,404,373 $ 11,027,745
- -------------------------------------------------------------------------------------------------
</TABLE>
(1) Reflects total expense before reduction for brokerage commission credits
which are reflected as expense reimbursement.
(2) Net of foreign taxes withheld of $8,262 for Growth, $1,951 for Equity
Income, $5,764 for Capital Appreciation, $102,169 for International Growth,
$1,441 for High-Yield Bond and $6,876 for Managed.
See notes to financial statements.
52 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
<TABLE>
<CAPTION>
SMALL
COMPANY INTERNATIONAL GOVERNMENT HIGH-YIELD TAX- EXEMPT MONEY
VALUE GROWTH SECURITIES BOND INCOME MANAGED MARKET
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
- ------------------------------------------------------------------------------------------------------------------------------
Dividends $ 274,994 $ 672,218(2) $ -- $ 22,100(2) $ -- $ 1,524,605(2) $ --
- ------------------------------------------------------------------------------------------------------------------------------
Interest 41,111 73,699 2,916,194 3,211,099 840,175 1,003,226 1,676,025
- ------------------------------------------------------------------------------------------------------------------------------
Total 316,105 745,917 2,916,194 3,233,199 840,175 2,527,831 1,676,025
- ------------------------------------------------------------------------------------------------------------------------------
EXPENSES:
- ------------------------------------------------------------------------------------------------------------------------------
Management fees 88,483 215,333 228,388 196,971 72,615 936,548 106,266
- ------------------------------------------------------------------------------------------------------------------------------
Distribution fees, Class A 42,400 80,437 156,120 125,365 60,755 262,869 86,722
- ------------------------------------------------------------------------------------------------------------------------------
Distribution fees, Class B 18,862 28,652 33,710 49,659 10,215 347,671 12,227
- ------------------------------------------------------------------------------------------------------------------------------
Distribution fees, Class C 105 56 5 38 2 226 133
- ------------------------------------------------------------------------------------------------------------------------------
Transfer agent fees 61,557 84,495 84,485 66,806 28,894 244,489 113,460
- ------------------------------------------------------------------------------------------------------------------------------
Custodian and accounting
fees 25,176 75,500 25,923 31,785 20,322 37,277 20,037
- ------------------------------------------------------------------------------------------------------------------------------
Audit and legal fees 9,340 11,094 13,971 12,123 9,790 19,754 10,174
- ------------------------------------------------------------------------------------------------------------------------------
Reports to shareholders 5,218 7,548 10,005 7,443 8,989 17,263 6,694
- ------------------------------------------------------------------------------------------------------------------------------
Registration fees 12,799 12,864 12,600 14,589 12,698 20,853 17,342
- ------------------------------------------------------------------------------------------------------------------------------
Directors' fees 2,628 2,628 2,628 2,628 2,628 2,628 2,628
- ------------------------------------------------------------------------------------------------------------------------------
Other expenses 4,818 3,409 3,509 3,253 1,740 22,054 4,534
- ------------------------------------------------------------------------------------------------------------------------------
Total expenses 271,386 522,016 571,344 510,660 228,648 1,911,632 380,217
- ------------------------------------------------------------------------------------------------------------------------------
Less: Expense
reimbursement (56,645) (20,204) (57,956) (56,558) (41,492) -- (68,604)
- ------------------------------------------------------------------------------------------------------------------------------
Total expenses, net of
reimbursement 214,741 501,812 513,388 454,102 187,156 1,911,632 311,613
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 101,364 244,105 2,402,805 2,779,097 653,019 616,199 1,364,412
- ------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
security transactions 2,009,285 1,554,034 (18,313) 1,243,179 154,723 4,145,914 --
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gain on foreign
currency transactions -- 165,181 -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
Net realized loss from
futures transactions -- -- -- (62,305) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized
gain (loss) of investments
and foreign currency
related transactions 3,427,017 4,493,147 (192,729) (269,738) (122,665) 27,176,842 --
- ------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS 5,436,302 6,212,362 (211,042) 911,136 32,058 31,322,756 --
- ------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS $ 5,537,666 $ 6,456,467 $ 2,191,763 $ 3,690,233 $ 685,077 $31,938,955 $ 1,364,412
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 53
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY EQUITY
GROWTH PORTFOLIO INCOME
PORTFOLIO ------------- PORTFOLIO
----------------------------- (UNAUDITED) -----------------------------
(UNAUDITED) FOR THE (UNAUDITED)
SIX MONTHS YEAR ENDED PERIOD MAY 1, SIX MONTHS YEAR ENDED
ENDED JUNE DECEMBER 31, 1997 THROUGH ENDED JUNE DECEMBER 31,
30, 1997 1996 JUNE 30, 1997 30, 1997 1996
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ (1,019,762) $ (762,775) $ 487 $ 611,000 $ 1,289,804
- -------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
investments 3,267,467 11,317,236 1,847 3,860,926 5,664,492
- -------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
futures and options -- -- -- -- --
- -------------------------------------------------------------------------------------------------------------
Net change in unrealized
gain (loss) of investments 60,401,692 36,890,580 125,662 10,932,447 4,614,269
- -------------------------------------------------------------------------------------------------------------
Increase (decrease) in net
assets resulting from
operations 62,649,397 47,445,041 127,996 15,404,373 11,568,565
- -------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM:
- -------------------------------------------------------------------------------------------------------------
Net investment income, Class
A -- -- -- (582,081) (1,197,980)
- -------------------------------------------------------------------------------------------------------------
Net investment income, Class
B -- -- -- (57,926) (63,375)
- -------------------------------------------------------------------------------------------------------------
Net investment income, Class
C -- -- -- (834) --
- -------------------------------------------------------------------------------------------------------------
Net investment income, Class
Y -- -- -- -- --
- -------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class A -- (10,559,038) -- -- (4,726,758)
- -------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class B -- (1,957,665) -- -- (369,926)
- -------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class C -- -- -- -- --
- -------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class Y -- (124,046) -- -- --
- -------------------------------------------------------------------------------------------------------------
Total dividends and
distributions to shareholders -- (12,640,749) -- (640,841) (6,358,039)
- -------------------------------------------------------------------------------------------------------------
FROM CAPITAL SHARE
TRANSACTIONS:
- -------------------------------------------------------------------------------------------------------------
CLASS A
- -------------------------------------------------------------------------------------------------------------
Shares sold 122,246,146 106,776,181 1,525,759 7,494,666 9,911,599
- -------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions -- 10,017,857 -- 564,493 5,727,817
- -------------------------------------------------------------------------------------------------------------
Shares redeemed (65,315,058) (74,805,079) (370) (6,294,390) (10,005,618)
- -------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class A 56,931,088 41,988,959 1,525,389 1,764,769 5,633,798
- -------------------------------------------------------------------------------------------------------------
CLASS B
- -------------------------------------------------------------------------------------------------------------
Shares sold 48,579,716 28,798,411 349,259 4,683,332 4,189,055
- -------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions -- 1,812,775 -- 53,747 392,623
- -------------------------------------------------------------------------------------------------------------
Shares redeemed (4,605,314) (1,074,883) -- (578,919) (155,615)
- -------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class B 43,974,402 29,536,303 349,259 4,158,160 4,426,063
- -------------------------------------------------------------------------------------------------------------
CLASS C
- -------------------------------------------------------------------------------------------------------------
Shares sold 5,127,842 -- 30,813 100,557 --
- -------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions -- -- -- 834 --
- -------------------------------------------------------------------------------------------------------------
Shares redeemed (17,474) -- -- -- --
- -------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class C 5,110,368 -- 30,813 101,391 --
- -------------------------------------------------------------------------------------------------------------
CLASS Y
- -------------------------------------------------------------------------------------------------------------
Shares sold 29,727,194 5,950,078 -- -- --
- -------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions -- 124,046 -- -- --
- -------------------------------------------------------------------------------------------------------------
Shares redeemed (3,001,272) (3,959,203) -- -- --
- -------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class Y 26,725,922 2,114,921 -- -- --
- -------------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets resulting from
capital share transactions 132,741,780 73,640,183 1,905,461 6,024,320 10,059,861
- -------------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets 195,391,177 108,444,475 2,033,457 20,787,852 15,270,387
- -------------------------------------------------------------------------------------------------------------
NET ASSETS:
- -------------------------------------------------------------------------------------------------------------
Beginning of period $ 235,574,582 $ 127,130,107 $ -- $ 78,261,780 $ 62,991,393
- -------------------------------------------------------------------------------------------------------------
End of period $ 430,965,759 $ 235,574,582 $ 2,033,457 $ 99,049,632 $ 78,261,780
- -------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
54 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
<TABLE>
<CAPTION>
CAPITAL SMALL
APPRECIATION COMPANY VALUE
PORTFOLIO PORTFOLIO
--------------------------- ---------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED JUNE DECEMBER 31, ENDED JUNE DECEMBER 31,
30, 1997 1996 30, 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ (591,693) $ (1,109,093) $ 101,364 $ (24,765)
- -----------------------------------------------------------------------------------------
Net realized gain (loss) on
investments 6,832,923 10,763,909 2,009,285 1,473,114
- -----------------------------------------------------------------------------------------
Net realized gain (loss) on
futures and options -- -- -- --
- -----------------------------------------------------------------------------------------
Net change in unrealized
gain (loss) of investments 4,786,515 9,326,093 3,427,017 795,406
- -----------------------------------------------------------------------------------------
Increase (decrease) in net
assets resulting from
operations 11,027,745 18,980,909 5,537,666 2,243,755
- -----------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM:
- -----------------------------------------------------------------------------------------
Net investment income, Class
A -- -- -- --
- -----------------------------------------------------------------------------------------
Net investment income, Class
B -- -- -- --
- -----------------------------------------------------------------------------------------
Net investment income, Class
C -- -- -- --
- -----------------------------------------------------------------------------------------
Net investment income, Class
Y -- -- -- --
- -----------------------------------------------------------------------------------------
Net realized gains on
investments Class A -- (11,466,091) -- (868,453)
- -----------------------------------------------------------------------------------------
Net realized gains on
investments Class B -- (501,250) -- (131,977)
- -----------------------------------------------------------------------------------------
Net realized gains on
investments Class C -- -- -- --
- -----------------------------------------------------------------------------------------
Net realized gains on
investments Class Y -- -- -- (100,931)
- -----------------------------------------------------------------------------------------
Total dividends and
distributions to shareholders -- (11,967,341) -- (1,101,361)
- -----------------------------------------------------------------------------------------
FROM CAPITAL SHARE
TRANSACTIONS:
- -----------------------------------------------------------------------------------------
CLASS A
- -----------------------------------------------------------------------------------------
Shares sold 4,726,500 19,727,741 5,676,742 4,307,659
- -----------------------------------------------------------------------------------------
Reinvestment of
distributions -- 10,709,311 -- 831,465
- -----------------------------------------------------------------------------------------
Shares redeemed (17,699,114) (43,391,759) (2,898,542) (8,474,210)
- -----------------------------------------------------------------------------------------
Net increase (decrease) -
Class A (12,972,614) (12,954,707) 2,778,200 (3,335,086)
- -----------------------------------------------------------------------------------------
CLASS B
- -----------------------------------------------------------------------------------------
Shares sold 1,428,899 2,946,771 3,156,072 1,845,129
- -----------------------------------------------------------------------------------------
Reinvestment of
distributions -- 466,933 -- 122,778
- -----------------------------------------------------------------------------------------
Shares redeemed (619,185) (331,951) (287,395) (260,393)
- -----------------------------------------------------------------------------------------
Net increase (decrease) -
Class B 809,714 3,081,753 2,868,677 1,707,514
- -----------------------------------------------------------------------------------------
CLASS C
- -----------------------------------------------------------------------------------------
Shares sold 24,656 -- 202,084 --
- -----------------------------------------------------------------------------------------
Reinvestment of
distributions -- -- -- --
- -----------------------------------------------------------------------------------------
Shares redeemed -- -- -- --
- -----------------------------------------------------------------------------------------
Net increase (decrease) -
Class C 24,656 -- 202,084 --
- -----------------------------------------------------------------------------------------
CLASS Y
- -----------------------------------------------------------------------------------------
Shares sold -- -- 93,710 847,748
- -----------------------------------------------------------------------------------------
Reinvestment of
distributions -- -- -- 1,728
- -----------------------------------------------------------------------------------------
Shares redeemed -- -- (2,068,992) (1,938,659)
- -----------------------------------------------------------------------------------------
Net increase (decrease) -
Class Y -- -- (1,975,282) (1,089,183)
- -----------------------------------------------------------------------------------------
Total increase (decrease) in
net assets resulting from
capital share transactions (12,138,244) (9,872,954) 3,873,679 (2,716,755)
- -----------------------------------------------------------------------------------------
Total increase (decrease) in
net assets (1,110,499) (2,859,386) 9,411,345 (1,574,361)
- -----------------------------------------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------------------------------------
Beginning of period $120,300,019 $123,159,405 $21,839,605 $ 23,413,966
- -----------------------------------------------------------------------------------------
End of period $119,189,520 $120,300,019 $31,250,950 $ 21,839,605
- -----------------------------------------------------------------------------------------
<CAPTION>
INTERNATIONAL GOVERNMENT
GROWTH SECURITIES
PORTFOLIO PORTFOLIO
--------------------------- ---------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED JUNE DECEMBER 31, ENDED JUNE DECEMBER 31,
30, 1997 1996 30, 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ 244,105 $ 269,629 $ 2,402,806 $ 5,172,678
- -----------------------------------------------------------------------------------------
Net realized gain (loss) on
investments 1,719,215 2,656,487 (18,313) 342,253
- -----------------------------------------------------------------------------------------
Net realized gain (loss) on
futures and options -- -- -- --
- -----------------------------------------------------------------------------------------
Net change in unrealized
gain (loss) of investments 4,493,147 2,020,264 (192,728) (754,744)
- -----------------------------------------------------------------------------------------
Increase (decrease) in net
assets resulting from
operations 6,456,467 4,946,380 2,191,765 4,760,187
- -----------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM:
- -----------------------------------------------------------------------------------------
Net investment income, Class
A -- (173,156) (2,207,123) (4,942,104)
- -----------------------------------------------------------------------------------------
Net investment income, Class
B -- (13,172) (195,659) (230,737)
- -----------------------------------------------------------------------------------------
Net investment income, Class
C -- -- (24) --
- -----------------------------------------------------------------------------------------
Net investment income, Class
Y -- (79,688) -- --
- -----------------------------------------------------------------------------------------
Net realized gains on
investments Class A -- (1,684,658) -- --
- -----------------------------------------------------------------------------------------
Net realized gains on
investments Class B -- (208,721) -- --
- -----------------------------------------------------------------------------------------
Net realized gains on
investments Class C -- -- -- --
- -----------------------------------------------------------------------------------------
Net realized gains on
investments Class Y -- (424,530) -- --
- -----------------------------------------------------------------------------------------
Total dividends and
distributions to shareholders -- (2,583,925) (2,402,806) (5,172,841)
- -----------------------------------------------------------------------------------------
FROM CAPITAL SHARE
TRANSACTIONS:
- -----------------------------------------------------------------------------------------
CLASS A
- -----------------------------------------------------------------------------------------
Shares sold 4,497,440 9,214,469 4,048,063 8,082,041
- -----------------------------------------------------------------------------------------
Reinvestment of
distributions -- 1,776,922 1,693,974 3,653,159
- -----------------------------------------------------------------------------------------
Shares redeemed (3,857,434) (6,715,142) (10,942,223) (23,815,232)
- -----------------------------------------------------------------------------------------
Net increase (decrease) -
Class A 640,006 4,276,249 (5,200,186) (12,080,032)
- -----------------------------------------------------------------------------------------
CLASS B
- -----------------------------------------------------------------------------------------
Shares sold 3,453,135 3,267,075 3,224,691 4,496,001
- -----------------------------------------------------------------------------------------
Reinvestment of
distributions -- 213,154 152,978 177,788
- -----------------------------------------------------------------------------------------
Shares redeemed (465,133) (393,878) (819,946) (1,153,825)
- -----------------------------------------------------------------------------------------
Net increase (decrease) -
Class B 2,988,002 3,086,351 2,557,723 3,519,964
- -----------------------------------------------------------------------------------------
CLASS C
- -----------------------------------------------------------------------------------------
Shares sold 112,940 -- 20,237 --
- -----------------------------------------------------------------------------------------
Reinvestment of
distributions -- -- 18 --
- -----------------------------------------------------------------------------------------
Shares redeemed -- -- -- --
- -----------------------------------------------------------------------------------------
Net increase (decrease) -
Class C 112,940 -- 20,255 --
- -----------------------------------------------------------------------------------------
CLASS Y
- -----------------------------------------------------------------------------------------
Shares sold 2,287,329 6,700,676 -- --
- -----------------------------------------------------------------------------------------
Reinvestment of
distributions -- 504,218 -- --
- -----------------------------------------------------------------------------------------
Shares redeemed (1,572,995) (1,819,421) -- --
- -----------------------------------------------------------------------------------------
Net increase (decrease) -
Class Y 714,334 5,385,473 -- --
- -----------------------------------------------------------------------------------------
Total increase (decrease) in
net assets resulting from
capital share transactions 4,455,282 12,748,073 (2,622,208) (8,560,068)
- -----------------------------------------------------------------------------------------
Total increase (decrease) in
net assets 10,911,749 15,110,528 (2,833,249) (8,972,722)
- -----------------------------------------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------------------------------------
Beginning of period $47,942,097 $ 32,831,569 $79,375,576 $ 88,348,298
- -----------------------------------------------------------------------------------------
End of period $58,853,846 $ 47,942,097 $76,542,327 $ 79,375,576
- -----------------------------------------------------------------------------------------
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 55
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS -- (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HIGH-YIELD TAX-EXEMPT
BOND PORTFOLIO INCOME PORTFOLIO
----------------------------- -----------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED JUNE DECEMBER 31, ENDED JUNE DECEMBER 31,
30, 1997 1996 30, 1997 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ 2,779,097 $ 4,626,639 $ 653,019 $ 1,503,075
- ---------------------------------------------------------------------------------------------
Net realized gain (loss) on
investments 1,243,179 746,203 154,723 54,614
- ---------------------------------------------------------------------------------------------
Net realized gain (loss) on
futures and options (62,305) (16,406) -- --
- ---------------------------------------------------------------------------------------------
Net change in unrealized
gain (loss) of investments (269,739) 1,549,219 (122,665) (497,297)
- ---------------------------------------------------------------------------------------------
Increase (decrease) in net
assets resulting from
operations 3,690,232 6,905,655 685,077 1,060,392
- ---------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM:
- ---------------------------------------------------------------------------------------------
Net investment income, Class
A (2,384,184) (4,227,766) (612,345) (1,437,694)
- ---------------------------------------------------------------------------------------------
Net investment income, Class
B (394,715) (398,943) (40,666) (65,432)
- ---------------------------------------------------------------------------------------------
Net investment income, Class
C (198) -- (8) --
- ---------------------------------------------------------------------------------------------
Net investment income, Class
Y -- -- -- --
- ---------------------------------------------------------------------------------------------
Net realized gains on
investments Class A -- -- -- --
- ---------------------------------------------------------------------------------------------
Net realized gains on
investments Class B -- -- -- --
- ---------------------------------------------------------------------------------------------
Net realized gains on
investments Class C -- -- -- --
- ---------------------------------------------------------------------------------------------
Net realized gains on
investments Class Y -- -- -- --
- ---------------------------------------------------------------------------------------------
Total dividends and
distributions to shareholders (2,779,097) (4,626,709) (653,019) (1,503,126)
- ---------------------------------------------------------------------------------------------
FROM CAPITAL SHARE
TRANSACTIONS:
- ---------------------------------------------------------------------------------------------
CLASS A
- ---------------------------------------------------------------------------------------------
Shares sold 8,497,132 12,189,056 1,599,072 2,501,597
- ---------------------------------------------------------------------------------------------
Reinvestment of
distributions 1,793,173 3,065,474 466,098 1,077,601
- ---------------------------------------------------------------------------------------------
Shares redeemed (6,977,978) (15,310,792) (4,284,093) (8,294,043)
- ---------------------------------------------------------------------------------------------
Net increase (decrease) -
Class A 3,312,327 (56,262) (2,218,923) (4,714,845)
- ---------------------------------------------------------------------------------------------
CLASS B
- ---------------------------------------------------------------------------------------------
Shares sold 5,345,290 5,149,262 467,552 1,482,068
- ---------------------------------------------------------------------------------------------
Reinvestment of
distributions 281,242 269,854 31,734 57,257
- ---------------------------------------------------------------------------------------------
Shares redeemed (1,453,470) (754,001) (451,737) (403,587)
- ---------------------------------------------------------------------------------------------
Net increase (decrease) -
Class B 4,173,062 4,665,115 47,549 1,135,738
- ---------------------------------------------------------------------------------------------
CLASS C
- ---------------------------------------------------------------------------------------------
Shares sold 175,877 -- 2,000 --
- ---------------------------------------------------------------------------------------------
Reinvestment of
distributions 191 -- 10 --
- ---------------------------------------------------------------------------------------------
Shares redeemed (200) -- -- --
- ---------------------------------------------------------------------------------------------
Net increase (decrease) -
Class C 175,868 -- 2,010 --
- ---------------------------------------------------------------------------------------------
CLASS Y
- ---------------------------------------------------------------------------------------------
Shares sold -- -- -- --
- ---------------------------------------------------------------------------------------------
Reinvestment of
distributions -- -- -- --
- ---------------------------------------------------------------------------------------------
Shares redeemed -- -- -- --
- ---------------------------------------------------------------------------------------------
Net increase (decrease) -
Class Y -- -- -- --
- ---------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets resulting from
capital share transactions 7,661,257 4,608,853 (2,169,364) (3,579,107)
- ---------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets 8,572,392 6,887,799 (2,137,306) (4,021,841)
- ---------------------------------------------------------------------------------------------
NET ASSETS:
- ---------------------------------------------------------------------------------------------
Beginning of period $ 62,020,878 $ 55,133,079 $ 30,515,552 $ 34,537,393
- ---------------------------------------------------------------------------------------------
End of period $ 70,593,270 $ 62,020,878 $ 28,378,246 $ 30,515,552
- ---------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
56 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
<TABLE>
<CAPTION>
MANAGED MONEY MARKET
PORTFOLIO PORTFOLIO
----------------------------- -----------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED JUNE DECEMBER 31, ENDED JUNE DECEMBER 31,
30, 1997 1996 30, 1997 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ 616,199 $ 1,722,342 $ 1,364,412 $ 2,023,539
- ---------------------------------------------------------------------------------------------
Net realized gain (loss) on
investments 4,145,914 4,191,029 -- --
- ---------------------------------------------------------------------------------------------
Net realized gain (loss) on
futures and options -- -- -- --
- ---------------------------------------------------------------------------------------------
Net change in unrealized
gain (loss) of investments 27,176,842 25,922,892 -- --
- ---------------------------------------------------------------------------------------------
Increase (decrease) in net
assets resulting from
operations 31,938,955 31,836,263 1,364,412 2,023,539
- ---------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM:
- ---------------------------------------------------------------------------------------------
Net investment income, Class
A -- (799,735) (1,305,896) (1,984,743)
- ---------------------------------------------------------------------------------------------
Net investment income, Class
B -- (286,048) (57,871) (38,796)
- ---------------------------------------------------------------------------------------------
Net investment income, Class
C -- -- (645) --
- ---------------------------------------------------------------------------------------------
Net investment income, Class
Y -- (643,498) -- --
- ---------------------------------------------------------------------------------------------
Net realized gains on
investments Class A -- (1,790,459) -- --
- ---------------------------------------------------------------------------------------------
Net realized gains on
investments Class B -- (1,012,095) -- --
- ---------------------------------------------------------------------------------------------
Net realized gains on
investments Class C -- -- -- --
- ---------------------------------------------------------------------------------------------
Net realized gains on
investments Class Y -- (1,018,912) -- --
- ---------------------------------------------------------------------------------------------
Total dividends and
distributions to shareholders -- (5,550,747) (1,364,412) (2,023,539)
- ---------------------------------------------------------------------------------------------
FROM CAPITAL SHARE
TRANSACTIONS:
- ---------------------------------------------------------------------------------------------
CLASS A
- ---------------------------------------------------------------------------------------------
Shares sold 29,155,638 48,360,893 99,362,686 155,780,333
- ---------------------------------------------------------------------------------------------
Reinvestment of
distributions -- 2,491,364 1,382,462 1,843,341
- ---------------------------------------------------------------------------------------------
Shares redeemed (9,928,850) (10,298,814) (98,668,180) (138,874,791)
- ---------------------------------------------------------------------------------------------
Net increase (decrease) -
Class A 19,226,788 40,553,443 2,076,968 18,748,883
- ---------------------------------------------------------------------------------------------
CLASS B
- ---------------------------------------------------------------------------------------------
Shares sold 22,986,960 35,850,528 7,316,915 4,456,552
- ---------------------------------------------------------------------------------------------
Reinvestment of
distributions -- 1,222,567 55,033 35,289
- ---------------------------------------------------------------------------------------------
Shares redeemed (3,229,177) (2,767,399) (2,486,778) (3,542,604)
- ---------------------------------------------------------------------------------------------
Net increase (decrease) -
Class B 19,757,783 34,305,696 4,885,170 949,237
- ---------------------------------------------------------------------------------------------
CLASS C
- ---------------------------------------------------------------------------------------------
Shares sold 478,096 -- 181,123 --
- ---------------------------------------------------------------------------------------------
Reinvestment of
distributions -- -- 771 --
- ---------------------------------------------------------------------------------------------
Shares redeemed -- -- (12,300) --
- ---------------------------------------------------------------------------------------------
Net increase (decrease) -
Class C 478,096 -- 169,594 --
- ---------------------------------------------------------------------------------------------
CLASS Y
- ---------------------------------------------------------------------------------------------
Shares sold 18,231,296 30,665,682 -- --
- ---------------------------------------------------------------------------------------------
Reinvestment of
distributions -- 1,662,410 -- --
- ---------------------------------------------------------------------------------------------
Shares redeemed (12,511,855) (8,914,287) -- --
- ---------------------------------------------------------------------------------------------
Net increase (decrease) -
Class Y 5,719,441 23,413,805 -- --
- ---------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets resulting from
capital share transactions 45,182,108 98,272,944 7,131,732 19,698,120
- ---------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets 77,121,063 124,558,460 7,131,732 19,698,120
- ---------------------------------------------------------------------------------------------
NET ASSETS:
- ---------------------------------------------------------------------------------------------
Beginning of period $ 215,853,577 $ 91,295,117 $ 60,417,051 $ 40,718,931
- ---------------------------------------------------------------------------------------------
End of period $ 292,974,640 $ 215,853,577 $ 67,548,783 $ 60,417,051
- ---------------------------------------------------------------------------------------------
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 57
<PAGE>
GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
(A) Annualized.
(B) Not Annualized.
(C) Total returns do not include one time sales charge.
(D) Total return does not include contingent deferred sales charge.
(E) Disclosure not applicable to periods prior to 1996. Represents average
commission rate per share charged to the fund on purchases and sales of
equity investments on which commissions are charged during the period.
(F) Effective September 1, 1995, ratio includes expenses paid indirectly.
(G) Based on average monthly shares outstanding.
(H) Distributions in excess of net investment income.
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED --------------------------------------------------------
GROWTH PORTFOLIO (CLASS A) JUNE 30, 1997 1996 1995 1994 1993 1992(G)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 13.10 $ 10.44 $ 7.76 $ 8.26 $ 7.96 $ 8.22
Net Investment Income (Loss) (0.04) (0.04) (0.03) (0.02) 0.01 (0.02)
Net Realized and Unrealized Gain
(Loss) on Investments 2.76 3.44 3.13 (0.06) 0.84 0.55
------- -------- -------- -------- -------- --------
Total from Investment Operations 2.72 3.40 3.10 (0.08) 0.85 0.53
------- -------- -------- -------- -------- --------
Dividends from Net Investment
Income -- -- -- -- 0.01 --
Distributions from Capital Gains -- 0.74 0.42 0.42 0.54 0.79
Other -- -- -- -- -- --
------- -------- -------- -------- -------- --------
Total Distributions -- 0.74 0.42 0.42 0.55 0.79
------- -------- -------- -------- -------- --------
Net Asset Value End of Period $ 15.82 $ 13.10 $ 10.44 $ 7.76 $ 8.26 $ 7.96
------- -------- -------- -------- -------- --------
Total Return(C) 20.76%(B) 32.60% 39.99% (0.99)% 10.59% 6.46%
Net Assets End of Period (in
thousands) $301,331 $196,752 $122,559 $ 88,375 $ 90,902 $ 84,200
Ratio of Expenses to Average Net
Assets 1.42%(A)(F) 1.53%(F) 1.60% 1.56% 1.60% 1.60%
Ratio of Expenses to Average Net
Assets (Excluding Waivers) 1.42%(A)(F) 1.53%(F) 1.60% 1.56% 1.61% 1.67%
Ratio of Net Investment Income
(Loss) to Average Net Assets (0.55)%(A) (0.39)% (0.35)% (0.30)% 0.10% (0.30)%
Ratio of Net Investment Income
(Loss) to Average Net Assets
(Excluding Waivers) (0.55)%(A) (0.39)% (0.35)% (0.30)% 0.06% (0.31)%
Portfolio Turnover Rate 16.02%(A) 29.90% 45.30% 64.50% 107.90% 61.20%
Average commission per share(E) $ 0.0593 $ 0.0636
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED) YEAR ENDED FOR THE PERIOD
SIX MONTHS ENDED ----------------- -------------------------
GROWTH PORTFOLIO (CLASS B) JUNE 30, 1997 DECEMBER 31, 1996 5/1/95 THROUGH 12/31/95
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 12.97 $ 10.41 $ 8.69
Net Investment Income (Loss) (0.06) (0.06) (0.02)
Net Realized and Unrealized Gain
(Loss) on Investments 2.72 3.36 2.16
------- ------- --------
Total from Investment Operations 2.66 3.30 2.14
------- ------- --------
Dividends from Net Investment
Income -- -- --
Distributions from Capital Gains -- 0.74 0.42
Other -- -- --
------- ------- --------
Total Distributions -- 0.74 0.42
------- ------- --------
Net Asset Value End of Period $ 15.63 $ 12.97 $ 10.41
------- ------- --------
Total Return(D) 20.51%(B) 31.73% 24.66%(B)
Net Assets End of Period (in
thousands) $ 92,773 $ 36,483 $ 4,572
Ratio of Expenses to Average Net
Assets 1.96%(A)(F) 2.10%(F) 2.15%(A)
Ratio of Expenses to Average Net
Assets (Excluding Waivers) 1.96%(A)(F) 2.10%(F) 2.15%(A)
Ratio of Net Investment Income
(loss) to Average Net Assets (1.09)%(A) (0.96)% (0.82)%(A)
Ratio of Net Investment Income
(loss) to Average Net Assets
(Excluding Waivers) (1.09)%(A) (0.96)% (0.82)%(A)
Portfolio Turnover Rate 16.02%(A) 29.90% 45.30%(A)
Average commission per share(E) $ 0.0593 $ 0.0636
</TABLE>
See notes to financial statements.
58 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
FOR THE PERIOD
GROWTH PORTFOLIO (CLASS C) 5/1/97 THROUGH 6/30/97
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 14.11
Net Investment Income (Loss) (0.02)
Net Realized and Unrealized Gain
(Loss) on Investments 1.73
-------
Total from Investment Operations 1.71
-------
Dividends from Net Investment
Income --
Distribution from Capital Gains --
Other --
-------
Total Distributions --
-------
Net Asset Value End of Period $ 15.82
-------
Total Return(D) 12.12%(B)
Net Assets End of Period (in
thousands) $ 5,326
Ratio of Expenses to Average Net
Assets 1.96%(A)(F)
Ratio of Expenses to Average Net
Assets (Excluding Waivers) 1.96%(A)(F)
Ratio of Net Investment Income
(Loss) to Average Net Assets (1.39)%(A)
Ratio of Net Investment Income
(Loss) to Average Net Assets
(Excluding Waivers) (1.39)%(A)
Portfolio Turnover Rate 16.02%(A)
Average commission per share(E) $0.0593
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE PERIOD
SIX MONTHS ENDED -------------------------
GROWTH PORTFOLIO (CLASS Y) JUNE 30, 1997 8/8/96 THROUGH 12/31/96
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 13.12 $ 11.96
Net Investment Income (Loss) -- --
Net Realized and Unrealized Gain
(Loss) on Investments 2.77 1.90
------- -------
Total from Investment Operations 2.77 1.90
------- -------
Dividends from Net Investment
Income -- --
Distributions from Capital Gains -- 0.74
Other -- --
------- -------
Total Distributions -- 0.74
------- -------
Net Asset Value End of Period $ 15.89 $ 13.12
------- -------
Total Return 21.11%(B) 15.91%(B)
Net Assets End of Period (in
thousands) $ 31,536 $ 2,339
Ratio of Expenses to Average Net
Assets 0.97%(A)(F) 1.10%(A)(F)
Ratio of Expenses to Average Net
Assets (Excluding Waivers) 0.97%(A)(F) 1.10%(A)(F)
Ratio of Net Investment Income
(loss) to Average Net Assets (0.10)%(A) 0.04%(A)
Ratio of Net Investment Income
(loss) to Average Net Assets
(Excluding Waivers) (0.10)%(A) 0.04%(A)
Portfolio Turnover Rate 16.02%(A) 29.90%(A)
Average commission per share(E) $ 0.0593 $0.0636
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 59
<PAGE>
ENTERPRISE EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
ENTERPRISE EQUITY PORTFOLIO (CLASS FOR THE PERIOD
A) 5/1/97 THROUGH 6/30/97
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 5.00
Net Investment Income (Loss) --
Net Realized and Unrealized Gain
(Loss) on Investments 0.53
--------
Total from Investment Operations 0.53
--------
Dividends from Net Investment
Income --
Distributions from Capital Gains --
Other --
--------
Total Distributions --
--------
Net Asset Value End of Period $ 5.53
--------
--------
Total Return(C) 10.80%(B)
Net Assets End of Period (in
thousands) $ 1,643
Ratio of Expenses to Average Net
Assets 1.60%(A)
Ratio of Expenses to Average Net
Assets (Excluding Waivers) 11.54%(A)
Ratio of Net Investment Income
(Loss) to Average Net Assets 0.24%(A)
Ratio of Net Investment Income
(Loss) to Average Net Assets
(Excluding Waivers) (9.61)%(A)
Portfolio Turnover Rate 9.66%(A)
Average commission per share(E) $ 0.0559
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED)
ENTERPRISE EQUITY PORTFOLIO (CLASS FOR THE PERIOD
B) 5/1/97 THROUGH 6/30/97
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 5.00
Net Investment Income (Loss) --
Net Realized and Unrealized Gain
(Loss) on Investments 0.52
--------
Total from Investment Operations 0.52
--------
Dividends from Net Investment
Income --
Distributions from Capital Gains --
Other --
--------
Total Distributions --
--------
Net Asset Value End of Period $ 5.52
--------
--------
Total Return(D) 10.40%(B)
Net Assets End of Period (in
thousands) $ 359
Ratio of Expenses to Average Net
Assets 2.15%(A)
Ratio of Expenses to Average Net
Assets (Excluding Waivers) 10.74%(A)
Ratio of Net Investment Income
(Loss) to Average Net Assets (0.11)%(A)
Ratio of Net Investment Income
(Loss) to Average Net Assets
(Excluding Waivers) (8.63)%(A)
Portfolio Turnover Rate 9.66%(A)
Average commission per share(E) $ 0.0559
</TABLE>
See notes to financial statements.
60 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
ENTERPRISE EQUITY PORTFOLIO (CLASS FOR THE PERIOD
C) 5/1/97 THROUGH 6/30/97
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 5.00
Net Investment Income (Loss) --
Net Realized and Unrealized Gain
(Loss) on Investments 0.53
--------
Total from Investment Operations 0.53
--------
Dividends from Net Investment
Income --
Distributions from Capital Gains --
Other --
--------
Total Distributions --
--------
Net Asset Value End of Period $ 5.53
--------
--------
Total Return(D) 10.60%(B)
Net Assets End of Period (in
thousands) $ 31
Ratio of Expenses to Average Net
Assets 2.15%(A)
Ratio of Expenses to Average Net
Assets (Excluding Waivers) 10.77%(A)
Ratio of Net Investment Income
(Loss) to Average Net Assets (0.03)%(A)
Ratio of Net Investment Income
(Loss) to Average Net Assets
(Excluding Waivers) (8.57)%(A)
Portfolio Turnover Rate 9.66%(A)
Average commission per share(E) $ 0.0559
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 61
<PAGE>
EQUITY INCOME PORTFOLIO
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED -------------------------------------------------------
EQUITY INCOME PORTFOLIO (CLASS A) JUNE 30, 1997 1996 1995 1994 1993 1992
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 22.44 $ 20.73 $ 16.43 $ 17.75 $ 16.93 $ 16.00
Net Investment Income (Loss) 0.18 0.41 0.45 0.44 0.52 0.43
Net Realized and Unrealized Gain
(Loss) on Investments 4.13 3.27 5.00 (0.53) 1.74 0.92
------- -------- ------- -------- ------- ---------
Total from Investment Operations 4.31 3.68 5.45 (0.09) 2.26 1.35
------- -------- ------- -------- ------- ---------
Dividends from Net Investment
Income 0.18 0.40 0.45 0.44 0.50 0.41
Distributions from Capital Gains -- 1.57 0.70 0.79 0.94 0.01
Other -- -- -- -- -- --
------- -------- ------- -------- ------- ---------
Total Distributions 0.18 1.97 1.15 1.23 1.44 0.42
------- -------- ------- -------- ------- ---------
Net Asset Value End of Period $ 26.57 $ 22.44 $ 20.73 $ 16.43 $ 17.75 $ 16.93
------- -------- ------- -------- ------- ---------
Total Return(C) 19.19%(B) 17.86% 33.38% (0.49)% 13.45% 8.48%
Net Assets End of Period (in
thousands) $ 87,625 $ 72,647 $61,906 $ 50,926 $49,920 $ 40,918
Ratio of Expenses to Average Net
Assets 1.50%(A) 1.50% 1.50% 1.50% 1.50% 1.50%
Ratio of Expenses to Average Net
Assets (Excluding Waivers) 1.63%(A) 1.68% 1.78% 1.73% 1.91% 1.95%
Ratio of Net Investment Income to
Average Net Assets 1.46%(A) 1.87% 2.33% 2.50% 2.90% 2.80%
Ratio of Net Investment Income to
Average Net Assets (Excluding
Waivers) 1.33%(A) 1.69% 2.06% 2.30% 2.51% 2.22%
Portfolio Turnover Rate 32.92%(A) 33.22% 25.60% 41.40% 39.90% 38.30%
Average commission per share(E) $ 0.0600 $ 0.0615
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED) YEAR ENDED FOR THE PERIOD
SIX MONTHS ENDED ----------------- -------------------------
EQUITY INCOME PORTFOLIO (CLASS B) JUNE 30, 1997 DECEMBER 31, 1996 5/1/95 THROUGH 12/31/95
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 22.30 $ 20.67 $ 18.12
Net Investment Income (Loss) 0.02 0.24 0.29
Net Realized and Unrealized Gain
(Loss) on Investments 4.19 3.30 3.40
------- ------- -------
Total from Investment Operations 4.21 3.54 3.69
------- ------- -------
Dividends from Net Investment
Income 0.14 0.34 0.44
Distributions from Capital Gains -- 1.57 0.70
Other -- -- --
------- ------- -------
Total Distributions 0.14 1.91 1.14
------- ------- -------
Net Asset Value End of Period $ 26.37 $ 22.30 $ 20.67
------- ------- -------
Total Return(D) 18.87%(B) 17.22% 20.57%(B)
Net Assets End of Period (in
thousands) $11,123 $ 5,615 $ 1,086
Ratio of Expenses to Average Net
Assets 2.05%(A) 2.05% 2.05%(A)
Ratio of Expenses to Average Net
Assets (Excluding Waivers) 2.18%(A) 2.23% 2.23%(A)
Ratio of Net Investment Income to
Average Net Assets 0.90%(A) 1.32% 1.56%(A)
Ratio of Net Investment Income to
Average Net Assets (Excluding
Waivers) 0.77%(A) 1.14% 1.33%(A)
Portfolio Turnover Rate 32.92%(A) 33.22% 25.60%(A)
Average commission per share(E) $0.0600 $0.0615
</TABLE>
See notes to financial statements.
62 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
EQUITY INCOME PORTFOLIO
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
FOR THE PERIOD
EQUITY INCOME PORTFOLIO (CLASS C) 5/1/97 THROUGH 6/30/97
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 24.26
Net Investment Income (Loss) --
Net Realized and Unrealized Gain
(Loss) on Investments 2.50
-------
Total from Investment Operations 2.50
-------
Dividends from Net Investment
Income 0.22
Distributions from Capital Gains --
Other --
-------
Total Distributions 0.22
-------
Net Asset Value End of Period $ 26.54
-------
Total Return(D) 10.30%(B)
Net Assets End of Period (in
thousands) $ 102
Ratio of Expenses to Average Net
Assets 2.05%(A)
Ratio of Expenses to Average Net
Assets (Excluding Waivers) 2.19%(A)
Ratio of Net Investment Income
(Loss) to Average Net Assets (0.10)%(A)
Ratio of Net Investment Income
(Loss) to Average Net Assets
(Excluding Waivers) (0.24)%(A)
Portfolio Turnover Rate 32.92%(A)
Average commission per share(E) $0.0600
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 63
<PAGE>
CAPITAL APPRECIATION PORTFOLIO
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) YEAR ENDED DECEMBER 31,
CAPITAL APPRECIATION PORTFOLIO SIX MONTHS ENDED --------------------------------------------------------
(CLASS A) JUNE 30, 1997 1996 1995 1994 1993 1992(G)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 34.21 $ 32.54 $ 28.54 $ 31.10 $ 29.42 $ 27.80
Net Investment Income (Loss) (0.18) (0.31) (0.25) (0.13) (0.15) (0.04)
Net Realized and Unrealized Gain
(Loss) on Investments 3.56 5.69 7.59 (0.95) 1.83 1.66
------- -------- -------- -------- -------- --------
Total from Investment Operations 3.38 5.38 7.34 (1.08) 1.68 1.62
------- -------- -------- -------- -------- --------
Dividends from Net Investment
Income -- -- -- -- -- --
Distributions from Capital Gains -- 3.71 3.34 1.48 -- --
Other -- -- -- -- -- --
------- -------- -------- -------- -------- --------
Total Distributions -- 3.71 3.34 1.48 -- --
------- -------- -------- -------- -------- --------
Net Asset Value End of Period $ 37.59 $ 34.21 $ 32.54 $ 28.54 $ 31.10 $ 29.42
------- -------- -------- -------- -------- --------
Total Return(C) 9.88%(B) 16.52% 25.72% (3.46)% 5.71% 5.83%
Net Assets End of Period (in
thousands) $112,773 $115,253 $121,207 $101,237 $103,187 $ 72,569
Ratio of Expenses to Average Net
Assets 1.63%(A) 1.60%(F) 1.65% 1.66% 1.64% 1.72%
Ratio of Expenses to Average Net
Assets (Excluding Waivers) 1.63%(A) 1.60%(F) 1.65% 1.66% 1.64% 1.72%
Ratio of Net Investment Income
(Loss) to Average Net Assets (0.98)%(A) (0.87)% (0.82)% (0.50)% (0.60)% (0.20)%
Ratio of Net Investment Income
(Loss) to Average Net Assets
(Excluding Waivers) (0.98)%(A) (0.87)% (0.82)% (0.50)% (0.60)% (0.20)%
Portfolio Turnover Rate 60.89%(A) 66.42% 65.20% 74.40% 61.90% 32.50%
Average commission per share(E) $ 0.0441 $ 0.0486
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED) YEAR ENDED FOR THE PERIOD
CAPITAL APPRECIATION PORTFOLIO SIX MONTHS ENDED ----------------- -------------------------
(CLASS B) JUNE 30, 1997 DECEMBER 31, 1996 5/1/95 THROUGH 12/31/95
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 33.86 $ 32.42 $ 30.04
Net Investment Income (Loss) (0.25) (0.35) (0.12)
Net Realized and Unrealized Gain
(Loss) on Investments 3.49 5.50 5.84
------- ------- --------
Total from Investment Operations 3.24 5.15 5.72
------- ------- --------
Dividends from Net Investment
Income -- -- --
Distributions from Capital Gains -- 3.71 3.34
Other -- -- --
------- ------- --------
Total Distributions -- 3.71 3.34
------- ------- --------
Net Asset Value End of Period $ 37.10 $ 33.86 $ 32.42
------- ------- --------
Total Return(D) 9.57%(B) 15.87% 18.99%(B)
Net Assets End of Period (in
thousands) $ 6,392 $ 5,047 $ 1,953
Ratio of Expenses to Average Net
Assets 2.18%(A) 2.14%(F) 2.08%(A)
Ratio of Expenses to Average Net
Assets (Excluding Waivers) 2.18%(A) 2.14%(F) 2.08%(A)
Ratio of Net Investment Income
(loss) to Average Net Assets (1.52)%(A) (1.43)% (1.41)%(A)
Ratio of Net Investment Income
(loss) to Average Net Assets
(Excluding Waivers) (1.52)%(A) (1.43)% (1.41)%(A)
Portfolio Turnover Rate 60.89%(A) 66.42% 65.20%(A)
Average commission per share(E) $ 0.0441 $ 0.0486
</TABLE>
See notes to financial statements.
64 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
CAPITAL APPRECIATION PORTFOLIO
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
CAPITAL APPRECIATION PORTFOLIO FOR THE PERIOD
(CLASS C) 5/1/97 THROUGH 6/30/97
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 33.54
Net Investment Income (Loss) (0.03)
Net Realized and Unrealized Gain
(Loss) on Investments 4.09
--------
Total from Investment Operations 4.06
--------
Dividends from Net Investment
Income --
Distributions from Capital Gains --
Other --
--------
Total Distributions --
--------
Net Asset Value End of Period $ 37.60
--------
Total Return(D) 12.10%(B)
Net Assets End of Period (in
thousands) $ 25
Ratio of Expenses to Average Net
Assets 2.20%(A)
Ratio of Expenses to Average Net
Assets (Excluding Waivers) 2.20%(A)
Ratio of Net Investment Income
(Loss) to Average Net Assets (1.57)%(A)
Ratio of Net Investment Income
(Loss) to Average Net Assets
(Excluding Waivers) (1.57)%(A)
Portfolio Turnover Rate 60.89%(A)
Average commission per share(E) $ 0.0441
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 65
<PAGE>
SMALL COMPANY VALUE PORTFOLIO
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) YEAR ENDED DECEMBER 31, FOR THE PERIOD
SMALL COMPANY VALUE PORTFOLIO SIX MONTHS ENDED ------------------------------ -------------------------
(CLASS A) JUNE 30, 1997 1996 1995 1994 10/1/93 THROUGH 12/31/93
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 5.74 $ 5.43 $ 5.17 $ 5.29 $ 5.00
Net Investment Income (Loss) 0.02 (0.01) 0.02 0.03 0.01
Net Realized and Unrealized Gain
(Loss) on Investments 1.40 0.62 0.46 (0.01) 0.29
------- -------- ------- ------- ------
Total from Investment Operations 1.42 0.61 0.48 0.02 0.30
------- -------- ------- ------- ------
Dividends from Net Investment
Income -- -- 0.02 0.03 0.01
Distributions from Capital Gains -- 0.30 0.20 0.11 --
Other -- -- -- -- --
------- -------- ------- ------- ------
Total Distributions -- 0.30 0.22 0.14 0.01
------- -------- ------- ------- ------
Net Asset Value End of Period $ 7.16 $ 5.74 $ 5.43 $ 5.17 $ 5.29
------- -------- ------- ------- ------
Total Return(C) 24.74%(B) 11.28% 9.28% 0.34% 5.92%(B)
Net Assets End of Period (in
thousands) $24,541 $ 17,308 $19,720 $22,120 $8,118
Ratio of Expenses to Average Net
Assets 1.75%(A) 1.75% 1.75% 1.75% 1.75%(A)
Ratio of Expenses to Average Net
Assets (Excluding Waivers) 2.23%(A) 2.38% 2.21% 2.15% 4.00%(A)
Ratio of Net Investment Income to
Average Net Assets 0.87%(A) (0.13)% 0.32% 0.60% 0.10%(A)
Ratio of Net Investment Income to
Average Net Assets (Excluding
Waivers) 0.40%(A) (0.76)% (0.14)% 0.18% (1.54)%(A)
Portfolio Turnover Rate 75.23%(A) 143.58% 36.50% 16.70% --%
Average commission per share(E) $0.0486 $ 0.0483
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED) YEAR ENDED FOR THE PERIOD
SMALL COMPANY VALUE PORTFOLIO SIX MONTHS ENDED ----------------- -------------------------
(CLASS B) JUNE 30, 1997 DECEMBER 31, 1996 5/1/95 THROUGH 12/31/95
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 5.69 $ 5.41 $ 5.28
Net Investment Income (Loss) (0.01) (0.03) (0.01)
Net Realized and Unrealized Gain
(Loss) on Investments 1.39 0.61 0.36
------- -------- -------
Total from Investment Operations 1.38 0.58 0.35
------- -------- -------
Dividends from Net Investment
Income -- -- 0.02
Distributions from Capital Gains -- 0.30 0.20
Other -- -- --
------- -------- -------
Total Distributions -- 0.30 0.22
------- -------- -------
Net Asset Value End of Period $ 7.07 $ 5.69 $ 5.41
------- -------- -------
Total Return(D) 24.25%(B) 10.77% 6.87%(B)
Net Assets End of Period (in
thousands) $ 6,431 $ 2,606 $ 862
Ratio of Expenses to Average Net
Assets 2.30%(A) 2.30% 2.30%(A)
Ratio of Expenses to Average Net
Assets (Excluding Waivers) 2.76%(A) 2.92% 2.78%(A)
Ratio of Net Investment Income
(loss) to Average Net Assets 0.25%(A) (0.77)% (0.40)%(A)
Ratio of Net Investment Income
(loss) to Average Net Assets
(Excluding Waivers) (0.21)%(A) (1.39)% (0.90)%(A)
Portfolio Turnover Rate 75.23%(A) 143.58% 36.50%(A)
Average commission per share(E) $0.0486 $ 0.0483
</TABLE>
See notes to financial statements.
66 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
SMALL COMPANY VALUE PORTFOLIO
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
SMALL COMPANY VALUE PORTFOLIO FOR THE PERIOD
(CLASS C) 5/1/97 THROUGH 6/30/97
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 6.14
Net Investment Income (Loss) --
Net Realized and Unrealized Gain
(Loss) on Investments 1.02
-------
Total from Investment Operations 1.02
-------
Dividends from Net Investment
Income --
Distributions from Capital Gains --
Other --
-------
Total Distributions --
-------
Net Asset Value End of Period $ 7.16
-------
Total Return(D) 16.61%(B)
Net Assets End of Period (in
thousands) $ 211
Ratio of Expenses to Average Net
Assets 2.30%(A)
Ratio of Expenses to Average Net
Assets (Excluding Waivers) 2.65%(A)
Ratio of Net Investment Income
(Loss) to Average Net Assets (1.00)%(A)
Ratio of Net Investment Income
(Loss) to Average Net Assets
(Excluding Waivers) (1.34)%(A)
Portfolio Turnover Rate 75.23%(A)
Average commission per share(E) $0.0486
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED) YEAR ENDED FOR THE PERIOD
SMALL COMPANY VALUE PORTFOLIO SIX MONTHS ENDED ----------------- -------------------------
(CLASS Y) JUNE 30, 1997 DECEMBER 31, 1996 5/25/95 THROUGH 12/31/95
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 5.77 $ 5.43 $ 5.37
Net Investment Income (Loss) 0.86 0.01 0.04
Net Realized and Unrealized Gain
(Loss) on Investments 0.57 0.63 0.26
------- -------- -------
Total from Investment Operations 1.43 0.64 0.30
------- -------- -------
Dividends from Net Investment
Income -- -- 0.04
Distributions from Capital Gains -- 0.30 0.20
Other -- -- --
------- -------- -------
Total Distributions -- 0.30 0.24
------- -------- -------
Net Asset Value End of Period $ 7.20 $ 5.77 $ 5.43
------- -------- -------
Total Return 24.78%(B) 11.83% 5.55%(B)
Net Assets End of Period (in
thousands) $ 68 $ 1,926 $ 2,832
Ratio of Expenses to Average Net
Assets 1.30%(A) 1.30% 1.30%(A)
Ratio of Expenses to Average Net
Assets (Excluding Waivers) 1.89%(A) 1.92% 1.81%(A)
Ratio of Net Investment Income to
Average Net Assets 2.97%(A) 0.35% 0.18%(A)
Ratio of Net Investment Income to
Average Net Assets (Excluding
Waivers) 2.38%(A) (0.27)% (0.33)%(A)
Portfolio Turnover Rate 75.23%(A) 143.58% 36.50%(A)
Average commission per share(E) $0.0486 $ 0.0483
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 67
<PAGE>
INTERNATIONAL GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) YEAR ENDED DECEMBER 31,
INTERNATIONAL GROWTH PORTFOLIO SIX MONTHS ENDED -----------------------------------------------------
(CLASS A) JUNE 30, 1997 1996 1995 1994 1993 1992(G)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 17.10 $ 16.08 $ 14.70 $ 17.44 $ 13.23 $ 13.38
Net Investment Income (Loss) 0.08 0.10 0.11 (0.01) (0.02) 0.28
Net Realized and Unrealized Gain
(Loss) on Investments 2.11 1.88 2.12 (0.49) 4.79 (0.39)
------- ------- ------- -------- ------- --------
Total from Investment Operations 2.19 1.98 2.23 (0.50) 4.77 (0.11)
------- ------- ------- -------- ------- --------
Dividends from Net Investment
Income -- 0.09 0.09 -- -- 0.04
Distributions from Capital Gains -- 0.87 0.76 2.24 0.17 --
Other(H) -- -- -- -- 0.39 --
------- ------- ------- -------- ------- --------
Total Distributions -- 0.96 0.85 2.24 0.56 0.04
------- ------- ------- -------- ------- --------
Net Asset Value End of Period $ 19.29 $ 17.10 $ 16.08 $ 14.70 $ 17.44 $ 13.23
------- ------- ------- -------- ------- --------
Total Return(C) 12.81%(B) 12.32% 15.17% (2.82)% 36.05% (0.93)%
Net Assets End of Period (in
thousands) $39,962 $34,837 $28,628 $ 27,523 $22,900 $ 11,630
Ratio of Expenses to Average Net
Assets 2.00%(A) 2.00% 2.00% 2.00% 2.00% 2.00%
Ratio of Expenses to Average Net
Assets (Excluding Waivers) 2.08%(A) 2.19% 2.40% 2.51% 3.06% 3.70%
Ratio of Net Investment Income
(Loss) to Average Net Assets 0.91%(A) 0.61% 0.70% (0.20)% (0.10)% 0.50%
Ratio of Net Investment Income
(Loss) to Average Net Assets
(Excluding Waivers) 0.83%(A) 0.42% 0.30% (0.70)% (1.15)% (1.15)%
Portfolio Turnover Rate 25.93%(A) 23.79% 31.10% 116.10% 70.10% 134.90%
Average commission per share(E) $0.0290 $0.0221
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED) YEAR ENDED FOR THE PERIOD
INTERNATIONAL GROWTH PORTFOLIO SIX MONTHS ENDED ----------------- -------------------------
(CLASS B) JUNE 30, 1997 DECEMBER 31, 1996 5/1/95 THROUGH 12/31/95
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 16.97 $ 16.02 $ 14.82
Net Investment Income (Loss) 0.01 0.01 (0.02)
Net Realized and Unrealized Gain
(Loss) on Investments 2.11 1.87 2.08
------- ------- -------
Total from Investment Operations 2.12 1.88 2.06
------- ------- -------
Dividends from Net Investment
Income -- 0.06 0.10
Distributions from Capital Gains -- 0.87 0.76
Other -- -- --
------- ------- -------
Total Distributions -- 0.93 0.86
------- ------- -------
Net Asset Value End of Period $ 19.09 $ 16.97 $ 16.02
------- ------- -------
Total Return(D) 12.49%(B) 11.72% 13.88%(B)
Net Assets End of Period (in
thousands) $ 8,047 $ 4,276 $ 1,094
Ratio of Expenses to Average Net
Assets 2.55%(A) 2.55% 2.55%(A)
Ratio of Expenses to Average Net
Assets (Excluding Waivers) 2.63%(A) 2.75% 2.73%(A)
Ratio of Net Investment Income
(Loss) to Average Net Assets 0.56%(A) 0.09% (0.65)%(A)
Ratio of Net Investment Income
(Loss) to Average Net Assets
(Excluding Waivers) 0.48%(A) (0.11)% (0.85)%(A)
Portfolio Turnover Rate 25.93%(A) 23.79% 31.10%(A)
Average commission per share(E) $0.0290 $0.0221
</TABLE>
See notes to financial statements.
68 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
INTERNATIONAL GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
INTERNATIONAL GROWTH PORTFOLIO FOR THE PERIOD
(CLASS C) 5/1/97 THROUGH 6/30/97
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 17.51
Net Investment Income (Loss) 0.02
Net Realized and Unrealized Gain
(Loss) on Investments 1.77
-------
Total from Investment Operations 1.79
-------
Dividends from Net Investment
Income --
Distributions from Capital Gains --
Other --
-------
Total Distributions --
-------
Net Asset Value End of Period $ 19.30
-------
Total Return(D) 10.22%(B)
Net Assets End of Period (in
thousands) $ 114
Ratio of Expenses to Average Net
Assets 2.55%(A)
Ratio of Expenses to Average Net
Assets (Excluding Waivers) 2.59%(A)
Ratio of Net Investment Income
(Loss) to Average Net Assets 2.50%(A)
Ratio of Net Investment Income to
(Loss) Average Net Assets
(Excluding Waivers) 2.46%(A)
Portfolio Turnover Rate 25.93%(A)
Average commission per share(E) $0.0290
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED) YEAR ENDED FOR THE PERIOD
INTERNATIONAL GROWTH PORTFOLIO SIX MONTHS ENDED ----------------- -------------------------
(CLASS Y) JUNE 30, 1997 DECEMBER 31, 1996 7/5/95 THROUGH 12/31/95
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 17.10 $ 16.07 $ 14.93
Net Investment Income (Loss) 0.10 0.14 0.02
Net Realized and Unrealized Gain
(Loss) on Investments 2.13 1.92 2.02
------- ------- -------
Total from Investment Operations 2.23 2.06 2.04
------- ------- -------
Dividends from Net Investment
Income -- 0.16 0.14
Distributions from Capital Gains -- 0.87 0.76
Other -- -- --
------- ------- -------
Total Distributions -- 1.03 0.90
------- ------- -------
Net Asset Value End of Period $ 19.33 $ 17.10 $ 16.07
------- ------- -------
Total Return 13.04%(B) 12.86% 13.65%(B)
Net Assets End of Period (in
thousands) $10,731 $ 8,828 $ 3,109
Ratio of Expenses to Average Net
Assets 1.55%(A) 1.55% 1.55%(A)
Ratio of Expenses to Average Net
Assets (Excluding Waivers) 1.63%(A) 1.75% 1.75%(A)
Ratio of Net Investment Income to
Average Net Assets 1.39%(A) 1.03% 0.26%(A)
Ratio of Net Investment Income to
Average Net Assets (Excluding
Waivers) 1.31%(A) 0.84% 0.05%(A)
Portfolio Turnover Rate 25.93%(A) 23.79% 31.10%(A)
Average commission per share(E) $0.0290 $0.0221
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 69
<PAGE>
ENTERPRISE GOVERNMENT SECURITIES PORTFOLIO
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE YEAR ENDED DECEMBER 31,
ENTERPRISE GOVERNMENT SECURITIES SIX MONTHS ENDED ----------------------------------------------------
PORTFOLIO (CLASS A) JUNE 30, 1997 1996 1995 1994 1993 1992(G)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 11.80 $ 11.83 $ 10.62 $ 12.44 $ 12.47 $ 12.40
Net Investment Income (Loss) 0.37 0.74 0.76 0.87 0.92 0.99
Net Realized and Unrealized Gain
(Loss) on Investments (0.03) (0.03) 1.21 (1.82) 0.21 0.19
------- ------- ------- ------- ------- --------
Total from Investment Operations 0.34 0.71 1.97 (0.95) 1.13 1.18
------- ------- ------- ------- ------- --------
Dividends from Net Investment
Income 0.37 0.74 0.76 0.87 0.92 0.98
Distributions from Capital Gains -- -- -- -- -- --
Other -- -- -- -- -- --
------- ------- ------- ------- ------- --------
Total Distributions 0.37 0.74 0.76 0.87 1.16 1.11
------- ------- ------- ------- ------- --------
Net Asset Value End of Period $ 11.77 $ 11.80 $ 11.83 $ 10.62 $ 12.44 $ 12.47
------- ------- ------- ------- ------- --------
Total Return(C) 2.94%(B) 6.29% 19.00% (7.81)% 9.26% 9.93%
Net Assets End of Period (in
thousands) $68,275 $73,693 $86,224 $84,431 $106,541 $ 71,515
Ratio of Expenses to Average Net
Assets 1.30%(A) 1.30% 1.30% 1.30% 1.30% 1.30%
Ratio of Expenses to Average Net
Assets (Excluding Waivers) 1.45%(A) 1.42% 1.44% 1.35% 1.44% 1.54%
Ratio of Net Investment Income to
Average Net Assets 6.31%(A) 6.35% 6.66% 7.60% 7.20% 7.90%
Ratio of Net Investment Income to
Average Net Assets (Excluding
Waivers) 6.16%(A) 6.23% 6.52% 7.59% 7.03% 7.72%
Portfolio Turnover Rate 8.32%(A) 0.17% --% 27.20% 90.10% 108.40%
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED) YEAR ENDED FOR THE PERIOD
ENTERPRISE GOVERNMENT SECURITIES SIX MONTHS ENDED ----------------- -------------------------
PORTFOLIO (CLASS B) JUNE 30, 1997 DECEMBER 31, 1996 5/1/95 THROUGH 12/31/95
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $11.79 $11.83 $ 11.12
Net Investment Income (Loss) 0.34 0.68 0.44
Net Realized and Unrealized Gain
(Loss) on Investments (0.03) (0.04) 0.71
------ ------ -------
Total from Investment Operations 0.31 0.64 1.15
------ ------ -------
Dividends from Net Investment
Income 0.34 0.68 0.44
Distributions from Capital Gains -- -- --
Other -- -- --
------ ------ -------
Total Distributions 0.34 0.68 0.44
------ ------ -------
Net Asset Value End of Period $11.76 $11.79 $ 11.83
------ ------ -------
Total Return(D) 2.66%(B) 5.61% 10.47%(B)
Net Assets End of Period (in
thousands) $8,247 $5,683 $ 2,124
Ratio of Expenses to Average Net
Assets 1.85%(A) 1.85% 1.85%(A)
Ratio of Expenses to Average Net
Assets (Excluding Waivers) 2.00%(A) 1.96% 1.91%(A)
Ratio of Net Investment Income to
Average Net Assets 5.76%(A) 5.7% 5.64%(A)
Ratio of Net Investment Income to
Average Net Assets (Excluding
Waivers) 5.61%(A) 5.68% 5.58%(A)
Portfolio Turnover Rate 8.32%(A) 0.17% --%(A)
</TABLE>
See notes to financial statements.
70 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE GOVERNMENT SECURITIES PORTFOLIO
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
ENTERPRISE GOVERNMENT SECURITIES FOR THE PERIOD
PORTFOLIO (CLASS C) 5/1/97 THROUGH 6/30/97
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $11.63
Net Investment Income (Loss) 0.13
Net Realized and Unrealized Gain
(Loss) on Investments 0.14
------
Total from Investment Operations 0.27
------
Dividends from Net Investment
Income 0.13
Distributions from Capital Gains --
Other --
------
Total Distributions 0.13
------
Net Asset Value End of Period $11.77
------
Total Return(D) 2.36%(B)
Net Assets End of Period (in
thousands) $ 20
Ratio of Expenses to Average Net
Assets 1.85%(A)
Ratio of Expenses to Average Net
Assets (Excluding Waivers) 1.94%(A)
Ratio of Net Investment Income to
Average Net Assets 4.46%(A)
Ratio of Net Investment Income to
Average Net Assets (Excluding
Waivers) 4.37%(A)
Portfolio Turnover Rate 8.32%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 71
<PAGE>
ENTERPRISE HIGH-YIELD BOND PORTFOLIO
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE YEAR ENDED DECEMBER 31,
ENTERPRISE HIGH-YIELD BOND SIX MONTHS ENDED -------------------------------------------------------
PORTFOLIO (CLASS A) JUNE 30, 1997 1996 1995 1994 1993 1992
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 11.84 $ 11.39 $ 10.72 $ 11.70 $ 10.83 $ 10.19
Net Investment Income (Loss) 0.50 0.94 0.99 0.97 0.95 1.01
Net Realized and Unrealized Gain
(Loss) on Investments 0.16 0.45 0.67 (0.97) 0.89 0.64
-------- -------- ------- -------- -------- --------
Total from Investment Operations 0.66 1.39 1.66 -- 1.84 1.65
-------- -------- ------- -------- -------- --------
Dividends from Net Investment
Income 0.50 0.94 0.99 0.98 0.97 1.01
Distributions from Capital Gains -- -- -- -- -- --
Other -- -- -- -- -- --
-------- -------- ------- -------- -------- --------
Total Distributions 0.50 0.94 0.99 0.98 0.97 1.01
-------- -------- ------- -------- -------- --------
Net Asset Value End of Period $ 12.00 $ 11.84 $ 11.39 $ 10.72 $ 11.70 $ 10.83
-------- -------- ------- -------- -------- --------
Total Return(C) 5.73%(B) 12.78% 16.00% 0.05% 17.58% 16.69%
Net Assets End of Period (in
thousands) $ 58,194 $ 54,129 $52,182 $ 44,822 $ 44,361 $ 30,851
Ratio of Expenses to Average Net
Assets 1.30%(A) 1.30% 1.30% 1.30% 1.30%(E) 1.30%
Ratio of Expenses to Average Net
Assets (Excluding Waivers) 1.47%(A) 1.50% 1.52% 1.45% 1.59% 1.64%
Ratio of Net Investment Income to
Average Net Assets 8.49%(A) 8.21% 8.80% 8.60% 8.20% 9.40%
Ratio of Net Investment Income to
Average Net Assets (Excluding
Waivers) 8.32%(A) 8.01% 8.58% 8.52% 7.95% 8.95%
Portfolio Turnover Rate 189.30%(A) 180.13% 88.50% 113.00% 121.20% 121.70%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED
(UNAUDITED) ----------------- FOR THE PERIOD
ENTERPRISE HIGH-YIELD BOND SIX MONTHS ENDED UNAUDITED -------------------------
PORTFOLIO (CLASS B) JUNE 30, 1997 DECEMBER 31, 1996 5/1/95 THROUGH 12/31/95
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 11.84 $ 11.39 $ 11.11
Net Investment Income (Loss) 0.47 0.88 0.61
Net Realized and Unrealized Gain
(Loss) on Investments 0.16 0.45 0.28
-------- -------- -------
Total from Investment Operations 0.63 1.33 0.89
-------- -------- -------
Dividends from Net Investment
Income 0.47 0.88 0.61
Distributions from Capital Gains -- -- --
Other -- -- --
-------- -------- -------
Total Distributions 0.47 0.88 0.61
-------- --------
Net Asset Value End of Period $ 12.00 $ 11.84 $ 11.39
-------- -------- -------
Total Return(D) 5.44%(B) 12.16% 8.12%(B)
Net Assets End of Period (in
thousands) $ 12,224 $ 7,892 $ 2,951
Ratio of Expenses to Average Net
Assets 1.85%(A) 1.85% 1.85%(A)
Ratio of Expenses to Average Net
Assets (Excluding Waivers) 2.02%(A) 2.05% 2.09%(A)
Ratio of Net Investment Income to
Average Net Assets 7.88%(A) 7.74% 7.84%(A)
Ratio of Net Investment Income to
Average Net Assets (Excluding
Waivers) 7.72%(A) 7.55% 7.68%(A)
Portfolio Turnover Rate 189.30%(A) 180.13% 88.50%(A)
</TABLE>
See notes to financial statements.
72 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE HIGH-YIELD BOND PORTFOLIO
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
ENTERPRISE HIGH-YIELD BOND FOR THE PERIOD
PORTFOLIO (CLASS C) 5/1/97 THROUGH 6/30/97
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 11.71
Net Investment Income (Loss) 0.16
Net Realized and Unrealized Gain
(Loss) on Investments 0.29
--------
Total from Investment Operations 0.45
--------
Dividends from Net Investment
Income 0.16
Distributions from Capital Gains --
Other --
--------
Total Distributions 0.16
--------
Net Asset Value End of Period $ 12.00
--------
Total Return(D) 3.88%(B)
Net Assets End of Period (in
thousands) $ 176
Ratio of Expenses to Average Net
Assets 1.85%(A)
Ratio of Expenses to Average Net
Assets (Excluding Waivers) 2.02%(A)
Ratio of Net Investment Income to
Average Net Assets 7.88%(A)
Ratio of Net Investment Income to
Average Net Assets (Excluding
Waivers) 7.72%(A)
Portfolio Turnover Rate 189.30%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 73
<PAGE>
ENTERPRISE TAX-EXEMPT INCOME PORTFOLIO
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED --------------------------------------------
ENTERPRISE TAX-EXEMPT INCOME PORTFOLIO (CLASS A) JUNE 30, 1997 1996 1995 1994 1993 1992
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 13.83 $ 13.99 $ 12.80 $ 14.31 $ 13.60 $ 13.34
Net Investment Income (Loss) 0.31 0.64 0.65 0.67 0.70 0.76
Net Realized and Unrealized Gain (Loss) on Investments 0.02 (0.16) 1.21 (1.48) 0.73 0.26
------- ------- ------- -------- ------- -------
Total from Investment Operations 0.33 0.48 1.86 (0.81) 1.43 1.02
------- ------- ------- -------- ------- -------
Dividends from Net Investment Income 0.31 0.64 0.65 0.68 0.70 0.76
Distributions from Capital Gains -- -- 0.02 0.02 0.02 --
Other -- -- -- -- -- --
------- ------- ------- -------- ------- -------
Total Distributions 0.31 0.64 0.67 0.70 0.72 0.76
------- ------- ------- -------- ------- -------
Net Asset Value End of Period $ 13.85 $ 13.83 $ 13.99 $ 12.80 $ 14.31 $ 13.60
------- ------- ------- -------- ------- -------
Total Return(C) 2.42%(B) 3.54% 14.85% (5.69)% 10.76% 7.88%
Net Assets End of Period (in thousands) $26,291 $28,478 $33,626 $ 34,297 $41,702 $29,728
Ratio of Expenses to Average Net Assets 1.25%(A) 1.25% 1.25% 1.25% 1.25% 1.25%
Ratio of Expenses to Average Net Assets (Excluding Waivers) 1.54%(A) 1.41% 1.42% 1.28% 1.39% 1.41%
Ratio of Net Investment Income to Average Net Assets 4.50%(A) 4.64% 4.82% 5.00% 4.90% 5.60%
Ratio of Net Investment Income to Average Net Assets
(Excluding Waivers) 4.21%(A) 4.48% 4.65% 4.97% 4.79% 5.49%
Portfolio Turnover Rate 1.81%(A) 0.91% 0.75% 25.70% 8.30% 16.30%
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED) YEAR ENDED FOR THE PERIOD
SIX MONTHS ENDED ----------------- -------------------------
ENTERPRISE TAX-EXEMPT INCOME PORTFOLIO (CLASS B) JUNE 30, 1997 DECEMBER 31, 1996 5/1/95 THROUGH 12/31/95
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $13.83 $13.99 $13.44
Net Investment Income (Loss) 0.27 0.56 0.38
Net Realized and Unrealized Gain (Loss) on Investments 0.02 (0.16) 0.57
------ ------ ------
Total from Investment Operations 0.29 0.40 0.95
------ ------ ------
Dividends from Net Investment Income 0.27 0.56 0.38
Distributions from Capital Gains -- -- 0.02
Other -- -- --
------ ------ ------
Total Distributions 0.27 0.56 0.40
------ ------ ------
Net Asset Value End of Period $13.85 $13.83 $13.99
------ ------ ------
Total Return(D) 2.14%(B) 2.96% 7.18%(B)
Net Assets End of Period (in thousands) $2,085 $2,037 $ 912
Ratio of Expenses to Average Net Assets 1.80%(A) 1.80% 1.80%(A)
Ratio of Expenses to Average Net Assets (Excluding Waivers) 2.08%(A) 1.96% 1.98%(A)
Ratio of Net Investment Income to Average Net Assets 3.95%(A) 4.07% 4.08%(A)
Ratio of Net Investment Income to Average Net Assets
(Excluding Waivers) 3.67%(A) 3.92% 3.94%(A)
Portfolio Turnover Rate 1.81%(A) 0.91% 0.75%(A)
</TABLE>
See notes to financial statements.
74 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE TAX-EXEMPT INCOME PORTFOLIO
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
FOR THE PERIOD
ENTERPRISE TAX-EXEMPT INCOME PORTFOLIO (CLASS C) 5/1/97 THROUGH 6/30/97
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $13.68
Net Investment Income (Loss) 0.10
Net Realized and Unrealized Gain (Loss) on
Investments 0.17
------
Total from Investment Operations 0.27
------
Dividends from Net Investment Income 0.10
Distributions from Capital Gains --
Other --
------
Total Distributions 0.10
------
Net Asset Value End of Period $13.85
------
Total Return(D) 2.02%(B)
Net Assets End of Period (in thousands) $ 2
Ratio of Expenses to Average Net Assets 1.80%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.95%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 3.86%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 3.71%(A)
Portfolio Turnover Rate 1.81%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 75
<PAGE>
ENTERPRISE MANAGED PORTFOLIO
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
(UNAUDITED) DECEMBER 31, FOR THE PERIOD
SIX MONTHS ENDED ----------------- ------------------------
ENTERPRISE MANAGED PORTFOLIO (CLASS A) JUNE 30, 1997 1996 1995 10/1/94 THROUGH 12/31/94
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 7.97 $ 6.70 $ 4.91 $ 5.00
Net Investment Income (Loss) 0.02 0.06 0.04 0.01
Net Realized and Unrealized Gain (Loss) on Investments 1.03 1.41 1.81 (0.09)
------- -------- ------- -------
Total from Investment Operations 1.05 1.47 1.85 (0.08)
------- -------- ------- -------
Dividends from Net Investment Income -- 0.06 0.03 0.01
Distributions from Capital Gains -- 0.14 0.03 --
Other -- -- -- --
------- -------- ------- -------
Total Distributions -- 0.20 0.06 0.01
------- -------- ------- -------
Net Asset Value End of Period $ 9.02 $ 7.97 $ 6.70 $ 4.91
------- -------- ------- -------
Total Return(C) 13.17%(B) 22.08% 37.68% (1.58)%(B)
Net Assets End of Period (in thousands) $135,248 $101,022 $47,839 $ 7,872
Ratio of Expenses to Average Net Assets 1.49%(A) 1.57% 1.75% 1.75%(A)
Ratio of Expenses to Average Net Assets (Excluding Waivers) 1.49%(A) 1.57% 1.90% 3.71%(A)
Ratio of Net Investment Income to Average Net Assets 0.53%(A) 1.12% 1.09% 1.30%(A)
Ratio of Net Investment to Average Net Assets (Excluding
Waivers) 0.53%(A) 1.12% 0.94% (0.32)%(A)
Portfolio Turnover Rate 21.13%(A) 33.21% 26.40% 27.10%(A)
Average commission per share(E) $ 0.0575 $ 0.0551
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED) YEAR ENDED FOR THE PERIOD
SIX MONTHS ENDED ----------------- -----------------------
ENTERPRISE MANAGED PORTFOLIO (CLASS B) JUNE 30, 1997 DECEMBER 31, 1996 5/1/95 THROUGH 12/31/95
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 7.93 $ 6.68 $ 5.68
Net Investment Income (Loss) (0.01) 0.02 0.01
Net Realized and Unrealized Gain (Loss) on Investments 1.03 1.41 1.05
------- ------- -------
Total from Investment Operations 1.02 1.43 1.06
------- ------- -------
Dividends from Net Investment Income -- 0.04 0.03
Distributions from Capital Gains -- 0.14 0.03
Other -- -- --
------- ------- -------
Total Distributions -- 0.18 0.06
------- ------- -------
Net Asset Value End of Period $ 8.95 $ 7.93 $ 6.68
------- ------- -------
Total Return(D) 12.86%(B) 21.50% 18.38%(B)
Net Assets End of Period (in thousands) $85,683 $57,037 $16,792
Ratio of Expenses to Average Net Assets 2.04%(A) 2.13% 2.30%(A)
Ratio of Expenses to Average Net Assets (Excluding Waivers) 2.04%(A) 2.13% 2.45%(A)
Ratio of Net Investment Income to Average Net Assets (1) (0.02)%(A) 0.52% 0.31%(A)
Ratio of Net Investment Income to Average Net Assets
(Excluding Waivers) (0.02)%(A) 0.52% 0.14%(A)
Portfolio Turnover Rate 21.13%(A) 33.21% 26.40%(A)
Average commission per share(E) $0.0575 $0.0551
</TABLE>
See notes to financial statements.
76 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE MANAGED PORTFOLIO
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
FOR THE PERIOD
ENTERPRISE MANAGED PORTFOLIO (CLASS C) 5/1/97 THROUGH 6/30/97
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 8.24
Net Investment Income (Loss) --
Net Realized and Unrealized Gain (Loss) on
Investments 0.78
--------
Total from Investment Operations 0.78
--------
Dividends from Net Investment Income --
Distributions from Capital Gains --
Other --
--------
Total Distributions --
--------
Net Asset Value End of Period $ 9.02
--------
--------
Total Return(D) 9.47%(B)
Net Assets End of Period (in thousands) $ 486
Ratio of Expenses to Average Net Assets 2.04%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.04%(A)
Ratio of Net Ivnestment Income (Loss) to Average
Net Assets (0.67)%(A)
Ratio of Net Investment Income (Loss) to Avrage
Net Assets (Excluding Waivers) (0.67)%(A)
Portfolio Turnover Rate 21.13%(A)
Average commission per share(E) $ 0.0575
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED) YEAR ENDED FOR THE PERIOD
SIX MONTHS ENDED ----------------- -----------------------
ENTERPRISE MANAGED PORTFOLIO (CLASS Y) JUNE 30, 1997 DECEMBER 31, 1996 7/5/95 THROUGH 12/31/95
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 7.60 $ 6.70 $ 6.17
Net Investment Income (Loss) 0.06 0.09 0.03
Net Realized and Unrealized Gain (Loss) on Investments 1.02 1.42 0.57
------- ------- -------
Total from Investment Operations 1.07 1.51 0.60
------- ------- -------
Dividends from Net Investment Income -- 0.09 0.04
Distributions from Capital Gains -- 0.14 0.03
Other -- -- --
------- ------- -------
Total Distributions -- 0.23 0.07
------- ------- -------
Net Asset Value End of Period $ 9.05 $ 7.98 $ 6.70
------- ------- -------
Total Return 13.41%(B) 22.63% 9.80%(B)
Net Assets End of Period (in thousands) $71,567 $57,794 $26,664
Ratio of Expenses to Average Net Assets 1.04%(A) 1.12% 1.30%(A)
Ratio of Expenses to Average Net Assets (Excluding Waivers) 1.04%(A) 1.12% 1.41%(A)
Ratio of Net Investment Income to Average Net Assets 0.97%(A) 1.57% 1.39%(A)
Ratio of Net Investment Income to Average Net Assets
(Excluding Waivers) 0.97%(A) 1.57% 1.28%(A)
Portfolio Turnover Rate 21.13%(A) 33.21% 26.40%(A)
Average commission per share(E) $0.0575 $0.0551
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 77
<PAGE>
ENTERPRISE MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED -------------------------------------------
ENTERPRISE MONEY MARKET PORTFOLIO (CLASS A) JUNE 30, 1997 1996 1995 1994 1993 1992(G)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net Investment Income (Loss) 0.02 0.04 0.05 0.03 0.02 0.03
Net Realized and Unrealized Gain (Loss) on Investments -- -- -- -- -- --
------- ------- ------- ------- ------- -------
Total from Investment Operations 0.02 0.04 0.05 0.03 0.02 0.03
------- ------- ------- ------- ------- -------
Dividends from Net Investment Income 0.02 0.04 0.05 0.03 0.02 0.03
Distributions from Capital Gains -- -- -- -- -- --
Other -- -- -- -- -- --
------- ------- ------- ------- ------- -------
Total Distributions 0.02 0.04 0.05 0.03 0.02 0.03
------- ------- ------- ------- ------- -------
Net Asset Value End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- -------
Total Return 2.26%(B) 4.51% 5.05% 3.34% 2.24% 2.92%
Net Assets End of Period (in thousands) $61,150 $59,074 $40,325 $32,334 $18,302 $18,932
Ratio of Expenses to Average Net Assets 1.00%(A) 1.00% 1.00% 1.00% 1.00% 1.00%
Ratio of Expenses to Average Net Assets (Excluding Waivers) 1.23%(A) 1.18% 1.35% 1.33% 1.72% 1.56%
Ratio of Net Investment Income to Average Net Assets 4.48%(A) 4.42% 4.92% 3.30% 2.20% 2.80%
Ratio of Net Investment to Average Net Assets (Excluding
Waivers) 4.26%(A) 4.24% 4.57% 3.08% 1.47% 1.81%
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED) YEAR ENDED FOR THE PERIOD
SIX MONTHS ENDED ----------------- -------------------------
ENTERPRISE MONEY MARKET PORTFOLIO (CLASS B) JUNE 30, 1997 DECEMBER 31, 1996 5/1/95 THROUGH 12/31/95
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 1.00 $ 1.00 $ 1.00
Net Investment Income (Loss) 0.02 0.04 0.03
Net Realized and Unrealized Gain (Loss) on Investments -- -- --
------ ------ ------
Total from Investment Operations 0.02 0.04 0.03
------ ------ ------
Dividends from Net Investment Income 0.02 0.04 0.03
Distributions from Capital Gains -- -- --
Other -- -- --
------ ------ ------
Total Distributions 0.02 0.04 0.03
------ ------ ------
Net Asset Value End of Period $ 1.00 $ 1.00 $ 1.00
------ ------ ------
Total Return(D) 1.98%(B) 3.94% 2.95%(B)
Net Assets End of Period (in thousands) $6,229 $1,344 $ 394
Ratio of Expenses to Average Net Assets 1.55%(A) 1.55% 1.55%(A)
Ratio of Expenses to Average Net Assets (Excluding Waivers) 1.76%(A) 1.73% 1.88%(A)
Ratio of Net Investment Income to Average Net Assets 3.99%(A) 3.85% 4.23%(A)
Ratio of Net Investment Income to Average Net Assets
(Excluding Waivers) 3.78%(A) 3.68% 3.90%(A)
</TABLE>
See notes to financial statements.
78 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
FOR THE PERIOD
ENTERPRISE MONEY MARKET PORTFOLIO (CLASS C) 5/1/97 THROUGH 6/30/97
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 1.00
Net Investment Income (Loss) 0.01
Net Realized and Unrealized Gain (Loss) on
Investments --
------
Total from Investment Operations 0.01
------
Dividends from Net Investment Income 0.01
Distributions from Capital Gains --
Other --
------
Total Distributions 0.01
------
Net Asset Value End of Period $ 1.00
------
------
Total Return(D) 0.75%(B)
Net Assets End of Period (in thousands) $ 170
Ratio of Expenses to Average Net Assets 1.55%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.73%(A)
Ratio of Net Investment Income to Average Net
Assets 4.08%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 3.90%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 79
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
June 30, 1997
- --------------------------------------------------------------------------------
1. ORGANIZATION OF THE FUND
The Enterprise Group of Funds, Inc. (the "Fund") is registered under The
Investment Company Act of 1940 as an open-end management investment company and
consists of the Growth, Equity, Equity Income, Capital Appreciation, Small
Company Value (formerly Small Company), International Growth, Government
Securities, High-Yield Bond, Tax-Exempt Income, Managed and Money Market
Portfolios. Prior to May 1, 1995, the Fund only issued one class of shares which
were redesignated Class A shares. On that date, the Fund began issuing Class B
and Y shares. Shares of each Class represent an identical interest in the
investments of their respective portfolios and generally have the same rights,
but are offered with different sales charge and distribution fee arrangements.
Upon redemption, Class B shares are subject to a maximum contingent sales charge
of 5%, which declines to zero after six years and which is based on the lesser
of net asset value at the time of purchase or redemption. Class B shares will
automatically convert to Class A shares of the same fund eight years after
purchase. On May 1, 1997 the Fund began offering Class C shares which are
subject to a maximum contingent sales charge of 1%, which declines to zero after
one year and which is based on the lesser of net asset value at the time of
purchase or redemption. Class Y shares are not subject to sales charges.
2. SIGNIFICANT ACCOUNTING POLICIES
SECURITY VALUATION -- Domestic equity securities are valued at the last sale
price or, in the absence of any sale on that date, the closing bid price.
Domestic equity securities without last trade information are valued at the last
bid price. Equity securities for which market quotations are not readily
available and other securities are valued at fair value as determined in good
faith by the Board of Directors. Debt securities and foreign securities are
valued on the basis of independent pricing services approved by the Board of
Directors, and such pricing services generally follow the same procedures in
valuing foreign equity securities as are described above as to domestic equity
securities. Securities held by the Money Market Portfolio are valued on an
amortized cost basis. Under the amortized cost method, a security is valued at
its cost and any discount or premium is amortized over the period until
maturity, without taking into account the impact of fluctuating interest rates
on the market value of the security unless the aggregate deviation from net
asset value as calculated by using available market quotations exceeds 1/2 of
1%.
SPECIAL VALUATION RISKS -- As part of its investment program, the Government
Securities Portfolio invests in collateralized mortgage obligations ("CMOs").
Payments of principal and interest on the mortgages are passed through to the
holders of the CMOs on the same schedule as they are received, although certain
classes of CMOs have priority over others with respect to the receipt of
prepayments on the mortgages. Therefore, depending on the type of CMOs in which
the Government Securities Portfolio invests, the investment may be subject to a
greater valuation risk due to prepayment than other types of mortgage-related
securities.
The high-yield securities in which the High-Yield Bond Portfolio may invest may
be considered speculative in regard to the issuer's continuing ability to meet
principal and interest payments. The value of the lower rated securities in
which the High-Yield Bond Portfolio may invest will be affected by the
creditworthiness of individual issuers, general economic and specific industry
conditions, and will fluctuate inversely with changes in interest rates. In
addition, the secondary trading market for lower quality bonds may be less
active and less liquid than the trading market for higher quality bonds.
80 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (Continued)
- --------------------------------------------------------------------------------
June 30, 1997
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- Each portfolio may acquire securities subject to
repurchase agreements. Under a typical repurchase agreement, a Portfolio would
acquire a debt security for a relatively short period (usually for one day and
not more than one week) subject to an obligation of the seller to repurchase and
of the Portfolio to resell the debt security at an agreed-upon higher price,
thereby establishing a fixed investment return during the Portfolio's holding
period. Under each repurchase agreement, the Portfolio receives, as collateral,
securities whose market value is at least equal to the repurchase price.
FUTURES CONTRACTS -- A futures contract is an agreement between two parties to
buy and sell a financial instrument at a set price on a future date. Upon
entering into such a contract a Portfolio is required to pledge to the broker an
amount of cash or securities equal to the minimum "initial margin" requirements
of the exchange. Pursuant to the contract, the Portfolio agrees to receive from
or pay to the broker an amount of cash equal to the daily fluctuation in value
of the contract. Such receipts or payments are known as "variation margin" and
are recorded by the Portfolio as unrealized appreciation or depreciation. When
the contract is closed the Portfolio records a realized gain or loss equal to
the difference between the value of the contract at the time it was opened and
the value at the time it was closed and reverses any unrealized appreciation or
depreciation previously recorded.
FOREIGN CURRENCY TRANSLATION -- Securities, other assets and liabilities of the
International Growth Portfolio, whose values are initially expressed in foreign
currencies, are translated to U.S. dollars at the bid price of such currency
against U.S. dollars last quoted by a major bank. Dividend and interest income
and certain expenses denominated in foreign currencies are marked-to-market
daily based on daily exchange rates and exchange gains and losses are realized
upon ultimate receipt or disbursement. The fund does not isolate that portion of
its realized and unrealized gains on investments from changes in foreign
exchange rates from fluctuations arising from changes in the market prices of
the investments.
SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are
accounted for on the trade date. Realized gains and losses from investment
transactions are determined on the basis of identified cost and realized gains
and losses from currency transactions are determined on the basis of average
cost. Dividend income received and distributions to shareholders are recognized
on the ex-dividend date, and interest income is recognized on the accrual basis.
Premiums and discounts on securities are amortized for both financial and tax
purposes.
EXPENSES -- Each portfolio and class bears expenses incurred specifically on its
behalf as well as a portion of the common expenses of the Fund. No class has
preferential dividend rights; differences in per share dividend rates are
generally due to differences in separate class expenses.
FEDERAL INCOME TAXES -- No provision for federal income or excise taxes is
required because the Fund intends to continue to qualify as a regulated
investment company and distribute all of its taxable income to shareholders.
USE OF ESTIMATES IN PREPARATION OF FINANCIAL STATEMENTS -- Preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that may affect the
reported amounts of 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.
THE ENTERPRISE GROUP OF FUNDS, INC. 81
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (Continued)
- --------------------------------------------------------------------------------
June 30, 1997
- --------------------------------------------------------------------------------
3. TRANSACTIONS WITH AFFILIATES
The Portfolios are charged management fees by Enterprise Capital Management,
Inc. ("Enterprise Capital") for furnishing management and administrative
services. Enterprise Capital has also agreed to reimburse the Portfolios for
expenses incurred in excess of a percentage of average net assets. Enterprise
Fund Distributors, Inc. (the "Distributor"), a wholly-owned subsidiary of
Enterprise Capital, serves as principal underwriter for shares of the Fund. The
Directors of the Fund have adopted a Distributor's Agreement and Plan of
Distribution (the "Plan") pursuant to rule 12b-1 under the Investment Company
Act of 1940. The Plan provides that each Portfolio will pay the Distributor a
distribution fee, accrued daily and payable monthly. The management fee,
distribution fee, and maximum expense amounts are equal to the following annual
percentage of average net assets for each class of shares:
<TABLE>
<CAPTION>
MAXIMUM
MANAGEMENT FEE DISTRIBUTION FEE EXPENSE AMOUNTS
------------------------- --------------------------- -----------------------------
PORTFOLIO A B C Y A B C Y A B C Y
- ---------------------------------------- ---- ---- ---- ---- ---- ----- ----- ---- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Growth .75% .75% .75% .75% .45% 1.00% 1.00% none 1.60% 2.15% 2.15% 1.15%
Equity .75% .75% .75% .75% .45% 1.00% 1.00% none 1.60% 2.15% 2.15% 1.15%
Equity Income .75% .75% .75% .75% .45% 1.00% 1.00% none 1.50% 2.05% 2.05% 1.05%
Capital Appreciation .75% .75% .75% .75% .45% 1.00% 1.00% none 1.75% 2.30% 2.30% 1.30%
Small Company Value .75% .75% .75% .75% .45% 1.00% 1.00% none 1.75% 2.30% 2.30% 1.30%
International Growth .85% .85% .85% .85% .45% 1.00% 1.00% none 2.00% 2.55% 2.55% 1.55%
Government Securities .60% .60% .60% .60% .45% 1.00% 1.00% none 1.30% 1.85% 1.85% .85%
High-Yield Bond .60% .60% .60% .60% .45% 1.00% 1.00% none 1.30% 1.85% 1.85% .85%
Tax-Exempt Income .50% .50% .50% .50% .45% 1.00% 1.00% none 1.25% 1.80% 1.80% .80%
Managed .75% .75% .75% .75% .45% 1.00% 1.00% none 1.75% 2.30% 2.30% 1.30%
Money Market .35% .35% .35% .35% .30% .85% .85% none 1.00% 1.55% 1.55% .70%
</TABLE>
Enterprise Capital is a wholly-owned subsidiary of The Mutual Life Insurance
Company of New York, Inc. ("MONY"). MONY and its subsidiaries had the following
investments in the portfolios as of June 30, 1997:
<TABLE>
<CAPTION>
PORTFOLIO A B C
- ------------------------------------------------------------------------------------------ ---------- ---------- ----------
<S> <C> <C> <C>
Growth -- -- $1,132
Equity $1,103,788 $1,104 1,106
Equity Income 830,930 -- 1,100
Capital Appreciation -- -- 1,121
Small Company Value 276,193 -- 1,170
International Growth 2,570,821 -- 1,110
Government Securities 832,524 -- 1,024
High-Yield Bond -- -- 1,041
Tax-Exempt Income -- -- 1,021
Managed 2,398,588 -- 1,095
Money Market -- -- 1,008
</TABLE>
Enterprise Capital has subadvisory agreements with various investment advisors
as Portfolio Managers for the Portfolios of the Fund. The management fee, as a
percentage of average net assets of a Portfolio, is paid to Enterprise Capital
which pays a portion of the fee to the Portfolio Manager. 1740 Advisers, Inc., a
wholly-owned subsidiary of MONY, is the Portfolio Manager for the Equity Income
Portfolio. For year-to-date June 30, 1997, Enterprise Capital incurred
subadvisory fees payable to 1740 Advisers, Inc. related to the Equity Income
Portfolio of $129,079.
82 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (Continued)
- --------------------------------------------------------------------------------
June 30, 1997
- --------------------------------------------------------------------------------
The portion of sales charges paid to MONY Securities Corporation, a wholly-owned
subsidiary of MONY, from the proceeds of the sale of fund shares was $2,654,249
for year-to-date June 30, 1997. The portion of sales charges paid to the
Distributor was $520,178 for the year-to-date June 30, 1997.
The Distributor uses its distribution fee from the Fund to pay expenses on
behalf of the Fund related to the distribution and servicing of its shares.
These expenses include a service fee to securities dealers that enter into a
sales agreement with the Distributor. Through June 30, 1997, the Distributor has
incurred $481,692 of service fees payable to MONY Securities Corporation.
4. FINANCIAL INSTRUMENTS
As part of its investment program, the International Growth Portfolio utilizes
forward currency exchange contracts to manage exposure to currency fluctuations
and hedge against adverse changes in connection with purchases and sales of
securities. The Portfolio will enter into forward contracts only for hedging
purposes. The Portfolio may be required to set aside liquid assets in a
segregated custodial account to cover its obligations. At June 30, 1997, the
International Growth Portfolio had entered into various forward currency
exchange contracts under which it is obligated to exchange currencies at
specified future dates. Risks arise from the possible inability of
counterparties to meet the terms of their contracts and from movements in
currency values. Outstanding contracts at June 30, 1997 are as follows:
<TABLE>
<CAPTION>
CONTRACT TO NET UNREALIZED
SETTLEMENT -------------------------------- APPRECIATION/
DATE RECEIVE DELIVER (DEPRECIATION)
- ---------- --------------- --------------- --------------
<C> <S> <C> <C>
7/18/97 USD 2,249,912 AUD 2,900,000 $ 57,900
7/18/97 USD 960,347 BEL 31,000,000 97,678
7/18/97 CAD 1,150,000 USD 860,284 (26,484)
7/18/97 USD 813,609 CHF 1,100,000 58,489
7/18/97 CHF 4,000,000 USD 2,827,446 (81,555)
7/18/97 USD 2,222,766 DEM 3,500,000 213,270
7/18/97 DEM 3,100,000 USD 1,843,940 (64,100)
7/18/97 USD 612,991 ESP 81,000,000 63,203
7/18/97 ESP 81,000,000 USD 557,214 (7,427)
7/18/97 USD 4,068,117 FRF 21,500,000 405,059
7/18/97 FRF 21,500,000 USD 3,800,230 (137,171)
7/18/97 USD 701,820 GBP 420,000 2,760
7/18/97 GBP 700,000 USD 1,140,489 24,611
7/18/97 GBP 1,460,000 JPY 276,491,880 (11,194)
7/18/97 USD 452,261 HKD 3,500,000 592
7/18/97 USD 2,529,699 JPY 292,000,000 (24,844)
7/18/97 JPY 199,000,000 USD 1,640,193 100,746
7/18/97 USD 2,563,080 NLG 4,500,000 267,532
7/18/97 NLG 3,550,000 USD 1,884,180 (73,248)
7/18/97 SEK 9,000,000 USD 1,219,727 (55,425)
--------------
$810,392
--------------
--------------
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 83
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (Continued)
- --------------------------------------------------------------------------------
June 30, 1997
- --------------------------------------------------------------------------------
Net unrealized appreciation on these contracts at June 30, 1997 is included in
the accompanying financial statements as forward currency contracts (net)
receivable.
As part of its investment program, the High-Yield Bond Portfolio enters into
futures contracts to hedge against anticipated future price and interest rate
changes. Risks of entering into futures contracts include: (1) the risk that the
price of the futures contracts may not move in the same direction as the price
of the securities in the various markets; (2) the risk that there will be no
liquid secondary market when the Portfolio attempts to enter into a closing
position, (3) the risk that the Portfolio will lose an amount in excess of the
initial margin deposit; and (4) the fact that the success or failure of these
transactions for the Portfolio depends on the ability of the Portfolio Manager
to predict movements in stock, bond, and currency prices and interest rates.
There were no open futures contracts at June 30, 1997 in the High-Yield Bond
Portfolio.
For year-to-date June 30, 1997, purchases and sales proceeds of investments,
other than short-term investments, were as follows:
<TABLE>
<CAPTION>
U.S. GOVERNMENT OTHER INVESTMENT
OBLIGATIONS SECURITIES
---------------------- -------------------------
PORTFOLIO PURCHASES SALES PURCHASES SALES
- --------------------------------------------------------------------------- ---------- ---------- ------------ -----------
<S> <C> <C> <C> <C>
Growth -- -- $148,277,681 $24,347,321
Equity -- -- 1,647,095 18,948
Equity Income -- -- 18,377,810 13,022,907
Capital Appreciation -- -- 34,605,852 54,833,923
Small Company Value -- -- 8,601,583 7,497,876
International Growth -- -- 9,547,903 5,897,474
Government Securities $3,075,657 $3,631,688 -- --
High-Yield Bond -- -- 64,739,058 58,272,582
Tax-Exempt Income -- -- 260,501 2,465,033
Managed -- -- 56,478,701 22,709,042
</TABLE>
84 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (Continued)
- --------------------------------------------------------------------------------
June 30, 1997
- --------------------------------------------------------------------------------
5. FUND SHARE TRANSACTIONS
At June 30, 1997, the Fund has 1,700,000,000 authorized shares at $.10 par
value. The following tables summarize the fund share activity for the year ended
December 31, 1996 and year-to-date June 30, 1997
<TABLE>
<CAPTION>
EQUITY EQUITY INCOME CAPITAL APPRECIATION
GROWTH PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------------------------- --------- -------------------- ----------------------
YEAR-TO- YEAR YEAR-TO- YEAR-TO- YEAR YEAR-TO- YEAR
DATE ENDED DATE DATE ENDED DATE ENDED
JUNE 30, DEC. 31, JUNE 30, JUNE 30, DEC. 31, JUNE 30, DEC. 31,
1997 1996 1997 1997 1996 1997 1996
------------ ------------ --------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A
Shares sold 8,667,947 8,738,168 297,343 307,724 445,852 134,319 575,596
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions -- 764,679 -- 21,255 255,843 -- 312,878
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (4,647,818) (6,216,899) (67) (261,322) (451,181) (503,160) (1,243,989)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 4,020,129 3,285,948 297,276 67,657 250,514 (368,841) (355,515)
- ---------------------------------------------------------------------------------------------------------------------------
CLASS B
Shares sold 3,452,031 2,318,350 65,046 192,002 188,604 41,111 84,267
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions -- 139,776 -- 2,035 17,631 -- 13,789
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (329,935) (85,206) -- (24,025) (6,975) (17,912) (9,219)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 3,122,096 2,372,920 65,046 170,012 199,260 23,199 88,837
- ---------------------------------------------------------------------------------------------------------------------------
CLASS C
Shares Sold 337,853 -- 5,613 3,797 -- 664 --
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions -- -- -- 32 -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (1,134) -- -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 336,719 -- 5,613 3,829 -- 664 --
- ---------------------------------------------------------------------------------------------------------------------------
CLASS Y
Shares sold 2,025,235 467,776 -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions -- 9,455 -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (218,565) (298,930) -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 1,806,670 178,301 -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Total Net Increase (Decrease) 9,285,614 5,837,169 367,935 241,498 449,774 (344,978) (266,678)
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 85
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (Continued)
- --------------------------------------------------------------------------------
June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL COMPANY VALUE INTERNATIONAL GROWTH GOVERNMENT SECURITIES HIGH-YIELD BOND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------------------- -------------------- ---------------------- ----------------------
YEAR-TO- YEAR YEAR-TO- YEAR YEAR-TO- YEAR YEAR-TO- YEAR
DATE ENDED DATE ENDED DATE ENDED DATE ENDED
JUNE 30, DEC. 31, JUNE 30, DEC. 31, JUNE 30, DEC. 31, JUNE 30, DEC. 31,
1997 1996 1997 1996 1997 1996 1997 1996
--------- ----------- --------- --------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
Shares sold 890,063 747,903 253,870 547,159 345,548 693,755 716,195 1,061,881
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions -- 144,852 -- 103,914 145,234 314,104 151,077 266,718
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (476,760) (1,511,602) (219,525) (394,928) (935,838) (2,050,440) (589,622) (1,340,318)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 413,303 (618,847) 34,345 256,145 (445,056) (1,042,581) 277,650 (11,719)
- ---------------------------------------------------------------------------------------------------------------------------
CLASS B
Shares sold 498,471 323,495 196,259 194,193 276,422 385,535 450,848 449,539
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions -- 21,578 -- 12,561 13,117 15,300 23,694 23,405
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (47,380) (46,439) (26,766) (23,124) (70,403) (98,589) (122,581) (65,696)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 451,091 298,634 169,493 183,630 219,136 302,246 351,961 407,248
- ---------------------------------------------------------------------------------------------------------------------------
CLASS C
Shares sold 29,397 -- 5,915 -- 1,714 -- 14,624 --
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions -- -- -- -- 1 -- 16 --
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed -- -- -- -- -- -- (16) --
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 29,397 -- 5,915 -- 1,715 -- 14,624 --
- ---------------------------------------------------------------------------------------------------------------------------
CLASS Y
Shares Sold 16,084 150,961 126,794 399,982 -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions -- 293 -- 29,486 -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (340,547) (339,207) (88,027) (106,743) -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) (324,463) (187,953) 38,767 322,725 -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Total Net Increase (Decrease) 569,328 (508,166) 248,520 762,500 (224,205) (740,335) 644,235 395,529
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
86 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (Continued)
- --------------------------------------------------------------------------------
June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TAX-EXEMPT INCOME MONEY MARKET
PORTFOLIO MANAGED PORTFOLIO PORTFOLIO
-------------------- ------------------------ ---------------------------
YEAR-TO- YEAR YEAR-TO- YEAR YEAR-TO- YEAR
DATE ENDED DATE ENDED DATE ENDED
JUNE 30, DEC. 31, JUNE 30, DEC. 31, JUNE 30, DEC. 31,
1997 1996 1997 1996 1997 1996
--------- --------- ----------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
Shares sold 116,129 182,258 3,510,934 6,602,960 99,343,086 155,780,333
- ----------------------------------------------------------------------------------------------------------
Reinvestment of Distributions 33,874 78,413 -- 312,623 1,382,462 1,843,341
- ----------------------------------------------------------------------------------------------------------
Shares Redeemed (310,467) (604,753) (1,191,124) (1,385,991) (98,648,580) (138,874,791)
- ----------------------------------------------------------------------------------------------------------
Net Increase (Decrease) (160,464) (344,082) 2,319,810 5,529,592 2,076,968 18,748,883
- ----------------------------------------------------------------------------------------------------------
CLASS B
Shares sold 33,846 107,623 2,769,304 4,899,330 7,316,915 4,456,552
- ----------------------------------------------------------------------------------------------------------
Reinvestment of Distributions 2,306 4,171 -- 154,174 55,033 35,289
- ----------------------------------------------------------------------------------------------------------
Shares Redeemed (32,845) (29,665) (387,919) (374,396) (2,486,778) (3,542,604)
- ----------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 3,307 82,129 2,381,385 4,679,108 4,885,170 949,237
- ----------------------------------------------------------------------------------------------------------
CLASS C
Shares sold 145 -- 53,916 -- 181,123 --
- ----------------------------------------------------------------------------------------------------------
Reinvestment of Distributions 1 -- -- -- 771 --
- ----------------------------------------------------------------------------------------------------------
Shares Redeemed -- -- -- -- (12,300) --
- ----------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 146 -- 53,916 -- 169,594 --
- ----------------------------------------------------------------------------------------------------------
CLASS Y
Shares sold -- -- 2,205,823 4,254,875 -- --
- ----------------------------------------------------------------------------------------------------------
Reinvestment of Distributions -- -- -- 208,342 -- --
- ----------------------------------------------------------------------------------------------------------
Shares Redeemed -- -- (1,542,139) (1,204,112) -- --
- ----------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- -- 663,684 3,259,105 -- --
- ----------------------------------------------------------------------------------------------------------
Total Net Increase (Decrease) (157,011) (261,953) 5,418,795 13,467,805 7,131,732 19,698,120
- ----------------------------------------------------------------------------------------------------------
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 87
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (Continued)
- --------------------------------------------------------------------------------
June 30, 1997
- --------------------------------------------------------------------------------
6. TAX BASIS UNREALIZED GAIN (LOSS) OF INVESTMENTS AND DISTRIBUTIONS
At June 30, 1997, the cost of securities for federal income tax purposes, the
aggregate gross unrealized gain for all securities for which there was an excess
of value over tax cost and the aggregate gross unrealized loss for all
securities for which there was an excess of tax cost over value were as follows:
<TABLE>
<CAPTION>
NET
TAX UNREALIZED UNREALIZED UNREALIZED
PORTFOLIO COST GAIN LOSS GAIN (LOSS)
- ---------------------------------------------------------------------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
Growth $288,352,257 $137,897,706 -- $137,897,706
- -----------------------------------------------------------------------------------------------------------------------------
Equity 2,029,994 135,248 $ (9,586) 125,662
- -----------------------------------------------------------------------------------------------------------------------------
Equity Income 67,028,462 31,437,292 (20,753) 31,416,539
- -----------------------------------------------------------------------------------------------------------------------------
Capital Appreciation 78,375,695 40,710,420 (4,100) 40,706,320
- -----------------------------------------------------------------------------------------------------------------------------
Small Company Value 26,166,366 5,177,308 (271,093) 4,906,215
- -----------------------------------------------------------------------------------------------------------------------------
International Growth 49,416,752 9,879,716 (1,935,717) 7,943,999
- -----------------------------------------------------------------------------------------------------------------------------
Government Securities 78,019,386 223,341 (2,152,011) (1,928,670)
- -----------------------------------------------------------------------------------------------------------------------------
High-Yield Bond 68,168,514 2,245,146 (230,361) 2,014,785
- -----------------------------------------------------------------------------------------------------------------------------
Tax-Exempt Income 26,452,568 1,465,049 (57,041) 1,408,008
- -----------------------------------------------------------------------------------------------------------------------------
Managed 231,753,810 61,572,153 (126,997) 61,445,156
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
Income and capital gain distributions are determined in accordance with income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments for futures and
options transactions, foreign currency transactions, pay downs, market
discounts, losses deferred due to wash sales, investments in passive foreign
investment companies, and excise tax regulations.
Permanent book and tax basis differences relating to shareholder distributions
will result in reclassifications to paid in capital. Any taxable gain remaining
at fiscal year end is distributed in the following year.
The Tax-Exempt Income Portfolio has designated all income dividends paid as
exempt interest dividends. Thus 100% of the net investment income distributions
are exempt from federal income tax.
7. SUBSEQUENT EVENT
On July 17, 1997, the Fund acquired four existing portfolios from another mutual
fund. Two of these portfolios were merged into the Government Securities and
Money Market portfolios. The other two portfolios, Growth and Income and Small
Company Growth, will continue as separate portfolios within the Fund. All
existing shareholders as of July 16, 1997 received Class Y shares of the Fund.
88 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
DIRECTORS AND OFFICERS
DIRECTORS
Victor Ugolyn
CHAIRMAN AND DIRECTOR
Arthur T. Dietz Arthur Howell
DIRECTOR DIRECTOR
William A. Mitchell, Jr. Lonnie H. Pope
DIRECTOR DIRECTOR
Samuel J. Foti Michael I. Roth
DIRECTOR DIRECTOR
OFFICERS
Victor Ugolyn
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Phillip G. Goff
VICE PRESIDENT
Herbert M. Williamson Catherine R. McClellan
TREASURER AND SECRETARY
ASSISTANT SECRETARY
<PAGE>
INVESTMENT ADVISER
Enterprise Capital Management, Inc.
Atlanta Financial Center
3343 Peachtree Road, N.E.
Suite 450
Atlanta, GA 30326-1022
DISTRIBUTOR
Enterprise Fund Distributors, Inc.
Atlanta Financial Center
3343 Peachtree Road, N.E.
Suite 450
Atlanta, GA 30326-1022
Telephone: 1-800-432-4320
CUSTODIAN
State Street Bank and Trust Company
Boston, MA
TRANSFER AGENT
National Financial Data Services, Inc.
1004 Baltimore Ave., 2nd Floor
Kansas City, MO 64105-2112
Telephone: 1-800-368-3527
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
Atlanta, GA
MEMBER - INVESTMENT COMPANY INSTITUTE
[LOGO] ENTERPRISE
GROUP OF FUNDS
INVEST WITH THE PROS THE PROFESSIONALS USE
1-800-432-4320
www.enterprisegroup.com
THIS REPORT IS NOT TO BE USED IN CONNECTION WITH
THE OFFERING OF SHARES OF THE FUND UNLESS ACCOMPANIED OR
PRECEDED BY AN EFFECTIVE PROSPECTUS.
