ENTERPRISE GROUP OF FUNDS INC, 485APOS, 1998-03-02

ENTERPRISE GROUP OF FUNDS INC
485APOS, 1998-03-02

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<PAGE> 1
As Filed With the Securities and Exchange Commission
March 2, 1998

Registration No. 2-28097
------------------------

----------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM N-1A

Registration Statement Under the Securities Act of 1933
Pre-Effective Amendment No.
Post-Effective Amendment No. 48 x

and/or
Registration Statement Under the Investment Company Act of 1940
Amendment No. 34 x

(Check appropriate box or boxes)

-------------------------------------------------------------------

THE ENTERPRISE GROUP OF FUNDS, INC.
(Exact Name of Registrant)

Suite 450
3343 Peachtree Road
Atlanta, Georgia 30326
(Address of Principal Executive Office)

Registrant's Telephone Number: (404) 261-1116

Catherine R. McClellan
Suite 450
3343 Peachtree Road, N.E.
Atlanta, Georgia 30326-1022
(Name and Address of Agent for Service)

It is proposed that this filing will become effective (check appropriate box)

immediately upon filing pursuant to paragraph (b)
- -----

on pursuant to paragraph (b)
- ----- ------------------------------

60 days after filing pursuant to paragraph (a)
- -----

X on May 1, 1997 pursuant to paragraph (a) of Rule 485
- ----- -----------

DECLARATION PURSUANT TO RULE 24f-2(a)(l)

The Registrant has registered an indefinite number of shares of Common Stock,
$0.10 par value of the Registrant under the Securities Act of 1933 pursuant to
Rule 24f-2. The Rule 24f-2 Notice for the Registrant's fiscal year ended
December 31, 1997 will be filed with the Securities and Exchange Commission on
or about March 15, 1998.
<PAGE> 2
Cross Reference Sheet

<TABLE>
<CAPTION>
Form N-lA
Item
- ----
Prospectus Caption
------------------
<S> <C> <C>
Part A
1. Cover Page....................................... The Enterprise Group of Funds, Inc.
2. Synopsis......................................... Prospectus Summary
3. Condensed Financial Information.................. Condensed Financial Information
4. General Description of Registrant............... The Enterprise Group of Funds, Inc.
General Information - Organization of the Fund
5. Management of the Fund........................... Management of the Fund
5A. Management's Discussion of Fund Performance...... Refer to Annual Report
5B. Management's Discussion of Year 2000............. Management of the Fund
6. Capital Stock and Other Securities............... General Information - Capital Stock
7. Purchase of Securities Being Offered............. How To Purchase Portfolio Shares
8. Redemption or Repurchase......................... How to Redeem Portfolio Shares
9. Legal Proceedings................................ Not Applicable

Statement of Additional
Part B Information Caption
------ -------------------

10. Cover Page....................................... Cover Page
11. Table of Contents................................ Table of Contents
12. General Information and History.................. General Information and History
13. Investment Objectives and Policies............... Investment Objectives and Investment Restrictions
14. Management of the Registrant..................... Management of the Fund
15. Control Persons and Principal of Securities...... Management of the Fund
16. Investment Advisory and Other Services........... Investment Advisory and Other Services
17. Brokerage Allocation and other Practices......... Portfolio Transactions and Brokerage
18. Capital Stock and Other Securities............... Not Applicable
19. Purchase, Redemption and Pricing of Securities
Being Offered.................................... Purchase, Redemption and Pricing of Securities
Being Offered
20. Tax Status....................................... Not Applicable
21. Underwriters..................................... Purchase, Redemption and Pricing of Securities
Being Offered
22. Calculation of Yield Quotations of Money Market
Funds............................................ Performance Comparisons
23. Financial Statements............................. Financial Statements
</TABLE>

Part C
Information required to be included in Part C is set forth under the appropriate
Item, so numbered, in Part C to this Post-Effective Amendment.

<PAGE> 3

PROSPECTUS
May 1, 1998

[Four Color Photograph of Keys on a Key Ring]

The Enterprise Group of Funds, Inc.

<PAGE> 4
TABLE OF CONTENTS

<TABLE>
<S> <C>
Expense information.....................................

Prospectus summary......................................

Condensed financial information.........................

Investment objectives and policies of the Portfolios....

Certain investment techniques and associated risks......

Investment restrictions.................................

How to purchase Portfolio shares........................

Shareholder services....................................

How to exchange shares among the Portfolios.............

How to redeem Portfolio shares..........................

Distributor's Agreement and Plan of Distribution........

Performance comparisons.................................

Management of the Fund..................................

Taxes...................................................

Dividends and distribution..............................

Brokerage transactions..................................

General information.....................................

Appendix................................................
</TABLE>

<PAGE> 5

THE ENTERPRISE GROUP OF FUNDS, INC.
Atlanta Financial Center
3343 Peachtree Road, N.E., Suite 450
Atlanta, Georgia 30326
For Shareholder Information Call 1-800-368-3527

PROSPECTUS
DATED MAY 1, 1998

The Enterprise Group of Funds, Inc. (the "Fund") is a series of mutual funds
that seeks to provide investors a broad range of investment alternatives through
its 13 separate Portfolios. Each Portfolio is managed as if it were a separate
mutual fund issuing its own shares. The Fund's principal investment adviser,
Enterprise Capital Management, Inc. selects separate sub-advisers referred to as
"Portfolio Managers" that provide investment advice for the Portfolios and that
are selected on the basis of able investment performance in their respective
areas of responsibility.

This Prospectus explains concisely what you should know about the Fund and its
Portfolios before you consider investing. Please read this Prospectus and retain
it for future reference. Additional information, contained in a "Statement of
Additional Information," dated May 1, 1998 has been filed with the Securities
and Exchange Commission and is available upon request without charge by writing
or calling the Fund. It is incorporated by reference into this Prospectus (which
means that it is legally part of it).

Equity Portfolios

Growth Portfolio
Growth and Income Portfolio
Equity Portfolio
Equity Income Portfolio
Capital Appreciation Portfolio
Small Company Growth Portfolio
Small Company Value Portfolio
International Growth Portfolio

Income Portfolios

Government Securities Portfolio
High-Yield Bond Portfolio
Tax-Exempt Income Portfolio

Flexible Portfolio

Managed Portfolio

Money Market Portfolio

LIKE ALL MUTUAL FUND SHARES, THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

INVESTMENTS IN THE MONEY MARKET PORTFOLIO ARE NEITHER INSURED NOR GUARANTEED BY
THE U.S. GOVERNMENT. THERE IS NO ASSURANCE THAT THE MONEY MARKET PORTFOLIO WILL
BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.

THE HIGH-YIELD BOND PORTFOLIO INVESTS SIGNIFICANTLY IN LOWER RATED BONDS,
COMMONLY REFERRED TO AS "JUNK BONDS." BONDS OF THIS TYPE ARE CONSIDERED TO BE
SPECULATIVE WITH REGARD TO THE PAYMENT OF INTEREST AND RETURN OF PRINCIPAL AND
HAVE SPECIAL RISKS. THEY MAY NOT BE SUITABLE FOR ALL INVESTORS. PLEASE READ THE
RISK INFORMATION CAREFULLY.

PLEASE NOTE THAT THESE FUNDS ARE NOT BANK DEPOSITS; ARE NOT FEDERALLY INSURED;
ARE NOT ENDORSED BY ANY BANK OR GOVERNMENT AGENCY; AND ARE NOT GUARANTEED TO
ACHIEVE THEIR GOAL(S).

THE ENTERPRISE Group of Funds, Inc.
<PAGE> 6
SUMMARY OF FUND EXPENSES
<TABLE>
<CAPTION>
CAPITAL
GROWTH AND EQUITY INCOME APPRECIATION
GROWTH PORTFOLIO INCOME PORTFOLIO EQUITY PORTFOLIO PORTFOLIO PORTFOLIO
------------------ ------------------ ------------------ ------------------ ------------------
CLASS OF SHARES: A B C A B C A B C A B C A B C
---------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION
EXPENSES
Maximum Initial Sales
Load Imposed on
Purchase (as a % of
offering price)........ 4.75% none none 4.75% none none 4.75% none none 4.75% none none 4.75% none none
Maximum Deferred Sales
Load(1)................ none 5.00% 1.00% none 5.00% 1.00% none 5.00% 1.00% none 5.00% 1.00% none 5.00% 1.00%
Maximum Sales Load
Imposed On Reinvested
Dividends.............. none none none none none none none none none none none none none none none
Exchange Fee............ none none none none none none none none none none none none none none none
ANNUAL FUND OPERATING
EXPENSES (AS A % OF
AVERAGE NET ASSETS)
Management Fee(2)....... 0.75% 0.75% 0.75% 0.75% 0.75% 0.75% 0.75% 0.75% 0.75% 0.75% 0.75% 0.75% 0.75% 0.75% 0.75%
12b-1 Fee (including
service fees of
.25%)(3)............... 0.45% 1.00% 1.00% 0.45% 1.00% 1.00% 0.45% 1.00% 1.00% 0.45% 1.00% 1.00% 0.45% 1.00% 1.00%
Other Expenses(4)....... 0.23% 0.23% 0.22% 0.30% 0.30% 0.30% 0.40% 0.40% 0.40% 0.30% 0.30% 0.30% 0.45% 0.46% 0.46%
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
TOTAL FUND OPERATING
EXPENSES............... 1.43% 1.98% 1.97% 1.50% 2.05% 2.05% 1.60% 2.15% 2.15% 1.50% 2.05% 2.05% 1.65% 2.21% 2.21%
==== ==== ==== ==== ==== ==== ==== ==== ==== ==== ==== ==== ==== ==== ====
EXAMPLE 1: You would pay the following expenses over the indicated periods in each of the Funds on a $1,000 investment assuming
(a) payment of the maximum sales charge, (b) a 5% annual return, and (c) retention of shares at the end of the time period.
10-year figures for Class B shares assume conversion to Class A shares after eight years.
1 Year.................. $ 61 $ 20 $ 20 $ 62 $ 21 $ 21 $ 63 $ 22 $ 22 $ 62 $ 21 $ 21 $ 63 $ 22 $ 22
3 Years................. 91 62 62 93 64 64 96 67 67 93 64 64 97 69 69
5 Years................. 122 107 106 125 110 110 130 115 115 125 110 110 133 118 118
10 Years................ 211 216 230 218 224 238 228 234 248 218 224 238 234 240 254
EXAMPLE 2: You would pay the following expenses over the indicated periods in each of the Funds on a $1,000 investment assuming
(a) payment of the maximum sales charge, (b) a 5% annual return, and (c) redemption at the end of the time period. 10-year
figures for Class B shares assume conversion to Class A shares after eight years.
1 Year.................. $ 61 $ 70 $ 30 $ 62 $ 71 $ 31 $ 63 $ 72 $ 32 $ 62 $ 71 $ 31 $ 63 $ 72 $ 32
3 Years................. 91 102 62 93 104 64 96 107 67 93 104 64 97 109 69
5 Years................. 122 127 106 125 130 110 130 135 115 125 130 110 133 138 118
10 Years................ 211 216 230 218 224 238 228 234 248 218 224 238 234 240 254

SMALL COMPANY
GROWTH PORTFOLIO
------------------
CLASS OF SHARES: A B C
---------------- ---- ---- ----
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION
EXPENSES
Maximum Initial Sales
Load Imposed on
Purchase (as a % of
offering price)........ 4.75% none none
Maximum Deferred Sales
Load(1)................ none 5.00% 1.00%
Maximum Sales Load
Imposed On Reinvested
Dividends.............. none none none
Exchange Fee............ none none none
ANNUAL FUND OPERATING
EXPENSES (AS A % OF
AVERAGE NET ASSETS)
Management Fee(2)....... 1.00% 1.00% 1.00%
12b-1 Fee (including
service fees of
.25%)(3)............... 0.45% 1.00% 1.00%
Other Expenses(4)....... 0.40% 0.40% 0.40%
---- ---- ----
TOTAL FUND OPERATING
EXPENSES............... 1.85% 2.40% 2.40%
==== ==== ====
EXAMPLE 1: You would pay the following expenses over the indicated periods in each of the Funds on a $1,000 investment assuming
(a) payment of the maximum sales charge, (b) a 5% annual return, and (c) retention of shares at the end of the time period.
10-year figures for Class B shares assume conversion to Class A shares after eight years.
1 Year.................. $ 65 $ 24 $ 24
3 Years................. 103 75 75
5 Years................. 143 128 128
10 Years................ 254 260 274
EXAMPLE 2: You would pay the following expenses over the indicated periods in each of the Funds on a $1,000 investment assuming
(a) payment of the maximum sales charge, (b) a 5% annual return, and (c) redemption at the end of the time period. 10-year
figures for Class B shares assume conversion to Class A shares after eight years.
1 Year.................. $ 65 $ 74 $ 34
3 Years................. 103 115 75
5 Years................. 143 148 128
10 Years................ 254 260 274
</TABLE>

THE EXAMPLES SHOULD NOT BE CONSIDERED INDICATIONS OF PAST OR FUTURE EXPENSES OR
PERFORMANCE, AND ACTUAL EXPENSES OR PERFORMANCE MAY VARY FROM THOSE SHOWN.

The purpose of this table is to assist the investor in understanding the various
costs and expenses that an investor in the Portfolio will bear directly or
indirectly.

(1) Certain purchases of Class A shares of $1 million or more are not subject to
front-end sales charges, but a contingent deferred sales charge ("CDSC") is
imposed on proceeds of such shares equal to 1% if the shares are redeemed
within the first 24 months after the end of their purchase.

(2) These fees may be higher than that of other Funds. However, the Board of
Directors has determined that such fees are reasonable in light of the
services, investment decisions and investment techniques employed.

(3) Includes a service fee of .25% of average net assets for Class B and Class C
shares. See "Distributor's Agreement and Plan of Distribution." Long-term
shareholders of a 12b-1 Fund may over time pay more in 12b-1 fees than the
economic equivalent of the maximum front-end sales charges permitted by the
National Association of Securities Dealers, Inc. As for the Money Market
Portfolio, expense information has been restated to reflect the elimination
of 12b-1 expense for Classes A, B and C.

(4) As for the Growth Portfolio, expenses do not reflect a reduction for
reimbursements of .02% for brokerage credits. As for the Tax-Exempt Income
Portfolio, expense information has been restated to reflect a reduction in
the maximum expense to 1.10% for Class A, 1.65% for Class B and 1.65% for
Class C.

THE ENTERPRISE Group of Funds, Inc.

2
<PAGE> 7
<TABLE>
<CAPTION>
GOVERNMENT
SMALL COMPANY INTERNATIONAL SECURITIES HIGH-YIELD BOND TAX-EXEMPT MANAGED
VALUE PORTFOLIO GROWTH PORTFOLIO PORTFOLIO PORTFOLIO INCOME PORTFOLIO PORTFOLIO
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
A B C A B C A B C A B C A B C A B C
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
4.75% none none 4.75% none none 4.75% none none 4.75% none none 4.75% none none 4.75% none none
none 5.00% 1.00% none 5.00% 1.00% none 5.00% 1.00% none 5.00% 1.00% none 5.00% 1.00% none 5.00% 1.00%
none none none none none none none none none none none none none none none none none none
none none none none none none none none none none none none none none none none none none
0.75% 0.75% 0.75% 0.85% 0.85% 0.85% 0.60% 0.60% 0.60% 0.60% 0.60% 0.60% 0.50% 0.50% 0.50% 0.75% 0.75% 0.75%
0.45% 1.00% 1.00% 0.45% 1.00% 1.00% 0.45% 1.00% 1.00% 0.45% 1.00% 1.00% 0.45% 1.00% 1.00% 0.45% 1.00% 1.00%
0.55% 0.55% 0.55% 0.70% 0.70% 0.70% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.15% 0.15% 0.15% 0.29% 0.29% 0.31%
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
1.75% 2.30% 2.30% 2.00% 2.55% 2.55% 1.30% 1.85% 1.85% 1.30% 1.85% 1.85% 1.10% 1.65% 1.65% 1.49% 2.04% 2.06%
==== ==== ==== ==== ==== ==== ==== ==== ==== ==== ==== ==== ==== ==== ==== ==== ==== ====
$ 64 $ 23 $ 23 $ 67 $ 26 $ 26 $ 60 $ 19 $ 19 $ 60 $ 19 $ 19 $ 58 $ 17 $ 17 $ 62 $ 21 $ 21
100 72 72 107 79 79 87 58 58 87 58 58 81 52 52 92 64 65
138 123 123 150 136 136 115 100 100 115 100 100 105 90 90 125 110 111
244 250 264 269 275 289 197 203 217 197 203 217 175 181 195 217 223 239
$ 64 $ 73 $ 33 $ 67 $ 76 $ 36 $ 60 $ 69 $ 29 $ 60 $ 69 $ 29 $ 58 $ 67 $ 27 $ 62 $ 71 $ 31
100 112 72 107 119 79 87 98 58 87 98 58 81 92 52 92 104 65
138 143 123 150 156 136 115 120 100 115 120 100 105 110 90 125 130 111
244 250 264 269 275 289 197 203 217 197 203 217 175 181 195 217 223 239

MONEY MARKET
PORTFOLIO
------------------
A B C
---- ---- ----
<S> <C> <C> <C>
none none none
none 5.00% 1.00%
none none none
none none none
0.35% 0.35% 0.35%
-- -- --
0.35% 0.35% 0.35%
---- ---- ----
0.70% 0.70% 0.70%
==== ==== ====
$ 7 $ 7 $ 7
22 22 22
39 39 39
87 87 87
$ 7 $ 57 $ 17
22 62 22
39 59 39
87 87 87
</TABLE>

See "Management of the Fund," "Distribution Plans," and "Brokerage Transactions"
for further information concerning expenses. For a separate $10 charge,
redemptions for a maximum of $250,000 will be wired at your request. For
redemption information, please refer to of the Prospectus.

For accounts with a balance of $1,000 or less, as of July 31, a $25 fee per
account registration per Portfolio for maintenance will apply, excluding
Automatic Bank Draft Plan, Automatic Investment Plan, Retirement Plan and
Savings Plan Accounts.

THE ENTERPRISE Group of Funds, Inc.

3
<PAGE> 8

THE ENTERPRISE GROUP OF FUNDS, INC.
PROSPECTUS SUMMARY
================================================================================

Set forth below are the 13 Portfolios of the Fund, their Portfolio
Managers and investment objectives. The Fund is a diversified, open-end
management investment company. Enterprise Capital Management, Inc. serves
as investment adviser. The Fund consists of common stock divided into 13
Portfolios consisting of four separate classes for each Portfolio. Shares
are transferable within each class.

<TABLE>
<CAPTION>
PORTFOLIO MANAGER INVESTMENT OBJECTIVES
----------------- ---------------------
<S> <C> <C> <C>
EQUITY PORTFOLIOS
GROWTH PORTFOLIO Capital appreciation, primarily from investments
Montag & Caldwell, Inc. in common stocks.
Atlanta, Georgia
- ------------------------------------------------------------------------------------------------------------
GROWTH AND INCOME PORTFOLIO Total return in excess of the total return of the
Retirement System Investors Inc. Lipper Growth and Income Mutual Funds Average
New York, New York measured over a new period of three to five years,
by investing primarily in a broadly diversified
group of large capitalization stocks.
- ------------------------------------------------------------------------------------------------------------
EQUITY PORTFOLIO Long term capital appreciation, primarily from
OpCap Advisors investments in securities of companies that are
New York, New York believed by the Portfolio Manager to be
undervalued.
- ------------------------------------------------------------------------------------------------------------
EQUITY INCOME PORTFOLIO A combination of growth and income to achieve an
1740 Advisers, Inc. above average and consistent total return,
New York, New York primarily from investments in dividend-paying
common stocks.
- ------------------------------------------------------------------------------------------------------------
CAPITAL APPRECIATION PORTFOLIO Maximum capital appreciation, primarily through
Provident Investment Counsel, Inc. investment in common stock of companies that
Pasadena, California demonstrate accelerating earnings momentum and
consistently strong financial characteristics.
- ------------------------------------------------------------------------------------------------------------
SMALL COMPANY GROWTH PORTFOLIO Capital appreciation by investing primarily in
Pilgrim Baxter & Associates, Ltd. common stocks of small capitalization companies
Wayne, Pennsylvania believed by the Portfolio Manager to have an
outlook for strong earnings growth and potential
for significant capital appreciation.
- ------------------------------------------------------------------------------------------------------------
SMALL COMPANY VALUE PORTFOLIO Maximum capital appreciation, primarily through
GAMCO Investors, Inc. investment in the equity securities of companies
Rye, New York that have a market capitalization of no more than
$1 billion.
- ------------------------------------------------------------------------------------------------------------
INTERNATIONAL GROWTH PORTFOLIO Capital appreciation, primarily through a
Brinson Partners, Inc. diversified portfolio of non-U.S. equity
Chicago, Illinois securities.
- ------------------------------------------------------------------------------------------------------------
INCOME PORTFOLIOS
GOVERNMENT SECURITIES PORTFOLIO Current income and safety of principal, primarily
TCW Funds Management, Inc. from securities that are obligations of the U.S.
Los Angeles, California Government, or its agencies, or its
instrumentalities.
- ------------------------------------------------------------------------------------------------------------
HIGH-YIELD BOND PORTFOLIO Maximum current income, primarily from debt
Caywood-Scholl Capital Management securities that are rated Ba or lower by Moody's
San Diego, California Investors Service, Inc. or BB or lower by Standard
& Poor's Corporation.
- ------------------------------------------------------------------------------------------------------------
TAX-EXEMPT INCOME PORTFOLIO A high level of current income exempt from federal
MBIA Capital Management Corp. income tax, with consideration given to
Armonk, New York preservation of principal, primarily from
investment in a diversified portfolio of long-term
investment grade municipal bonds.
- ------------------------------------------------------------------------------------------------------------
FLEXIBLE PORTFOLIO
MANAGED PORTFOLIO Growth of capital over time through investment in
OpCap Advisors a portfolio consisting of common stocks, bonds and
New York, New York cash equivalents, the percentages of which will
vary based on the Portfolio Manager's assessments
of relative investment values.
- ------------------------------------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO
MONEY MARKET PORTFOLIO The highest possible level of current income
Enterprise Capital Management, Inc. consistent with preservation of capital and
Atlanta, Georgia liquidity by investing in obligations maturing in
one year or less from the time of purchase.
</TABLE>

================================================================================

THE ENTERPRISE Group of Funds, Inc.

4
<PAGE> 9

INVESTMENT RISK FACTORS

The risk characteristics of each Portfolio are different. In general, investors
should consider the following risks: An investment in any of the Portfolios
carries the risk that the net asset value of the Portfolio shares will fluctuate
in response to market conditions. Further, an investment in any of the Income
Portfolios carries the risk that the issuers of securities in the Income
Portfolios may default on the payment of principal and interest. An investment
in the High-Yield Bond Portfolio carries an increased risk that issuers of
securities in which the High-Yield Bond Portfolio invests may default in the
payment of principal and interest as compared to the risk of such defaults in
the other Income Portfolios. In addition, an investment in the High-Yield Bond
Portfolio may be subject to certain other risks relating to the market price,
relative liquidity in the secondary market and sensitivity to interest rate and
economic changes of the noninvestment grade securities in which the High-Yield
Bond Portfolio invests that are higher than may be associated with higher rated,
investment grade securities. The Small Company Growth and Small Company Value
Portfolios carry an increased risk that smaller capitalization companies may
experience higher growth rates and higher failure rates than do larger
companies. The limited volume and frequency of trading of small capitalization
companies may subject their stocks to greater price deviations than stocks of
larger companies. The International Growth Portfolio carries additional risks
associated with possibly less stable foreign securities and currencies. Because
of the short-term nature of the Money Market Portfolio's investments, an
investment in shares of the Money Market Portfolio is subject to relatively
little market risk and financial risk, but is subject to a high level of current
income volatility. In addition, the Money Market Portfolio uses the amortized
cost method to value its portfolio securities and seeks to maintain a constant
net asset value of $1.00 per share. There is no assurance that this Portfolio
will be able to maintain this constant net asset value. See "Certain Investment
Techniques and Associated Risks."

PURCHASE ALTERNATIVES

Each Portfolio offers four Classes of shares: shares of each Class are generally
offered at the net asset value next determined after receipt of your purchase
order plus (i) an initial ("front-end") sales charge (Class A shares) or (ii) a
deferred sales charge (Class B and C shares). The following is a brief
description of the three Classes of shares offered by each Portfolio. Class Y
shares for institutional investors is contained in a separate prospectus. For
more complete descriptions of each Class of shares, see "How to Purchase
Shares."

CLASS A SHARES: Class A shares are sold with an initial sales charges
of up to 4.75% of the offering price (for all
Portfolios other than Money Market) and are subject
to an ongoing distribution fee of 0.45% (no fee for
Money Market) of the Portfolio's average daily net
assets. The initial sales charge may be waived or
reduced in certain circumstances. Shares purchased
pursuant to waiver of the initial sales charge are
subject to a CDSC if redeemed within two years of
purchase in certain circumstances.

CLASS B SHARES: Class B shares do not incur an initial sales charge
when purchased but are subject to ongoing service
fees of 0.25% and an ongoing distribution fee of
0.75% (no fee for Money Market) of the Portfolio's
average daily net assets, and a CDSC if they are
redeemed within six years of purchase. Class B shares
automatically convert to Class A shares (which are
subject to lower ongoing expenses) approximately
eight years after purchase. Class B shares are
available only to investors purchasing less than
$250,000 in the aggregate.

THE ENTERPRISE Group of Funds, Inc.

5
<PAGE> 10

CLASS C SHARES: Class C shares are sold at net asset value per share
without an initial sales charge but are subject to an
ongoing service fee of 0.25% and an ongoing
distribution fee of 0.75% (no fee for Money Market)
of the portfolio's average daily net assets. If Class
C shares are redeemed within 12 months of their
purchase, a contingent deferred sales charge of 1.00%
will be deducted from the redemption proceeds. Class
C shares are available only to investors purchasing
less than $1,000,000 in the aggregate.
================================================================================

<TABLE>
<S> <C>
SHAREHOLDER SERVICES
Automatic Reinvestment Plan Check Writing (Class A Money Market
Automatic Bank Draft Plan Portfolio Shares Only)
Investment Plan Bank Purchase and Redemption Plan
Letter of Intent Systematic Withdrawal Plan
Right of Accumulation Retirement Plans
24-Hour Account Information
FOR MORE COMPLETE INFORMATION ABOUT THESE PLANS AND SERVICES,
SEE SHAREHOLDER SERVICES OR
CALL THE ENTERPRISE GROUP OF FUNDS AT
(800) 432-4320.
</TABLE>

================================================================================

THE ENTERPRISE Group of Funds, Inc.

6
<PAGE> 11

FINANCIAL HIGHLIGHTS

(FOR A SHARE OUTSTANDING THROUGH THE PERIODS INDICATED)
The financial highlights which follow are part of the Fund's financial
statements and are included in Fund's Annual Report to Shareholders. The Fund's
1997 Annual Report to Shareholders is incorporated by reference into the
Statement of Additional Information. Annual reports may be obtained without
charge by calling the Fund at 800-368-3527. The Report contains information
about performance of the Portfolios.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------------
GROWTH PORTFOLIO (CLASS A) 1997 1996 1995 1994 1993 1992(G) 1991
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period..... $ 10.44 $ 7.76 $ 8.26 $ 7.96 $ 8.22 $ 6.31
Net Investment Income (Loss)............. (0.04) (0.03) (0.02) 0.01 (0.02) 0.07
Net Realized and Unrealized Gain (Loss)
on Investments.......................... 3.44 3.13 (0.06) 0.84 0.55 2.57
---------------------------------------------------------------------------
Total from Investment Operations......... 3.40 3.10 (0.08) 0.85 0.53 2.64
---------------------------------------------------------------------------
Dividends from Net Investment Income..... 0.00 0.00 0.00 0.01 0.00 0.07
Distributions from Net Realized Capital
Gains................................... 0.74 0.42 0.42 0.54 0.79 0.66
---------------------------------------------------------------------------
Total Distributions...................... 0.74 0.42 0.42 0.55 0.79 0.73
---------------------------------------------------------------------------
Net Asset Value, End of Period........... $ 13.10 $ 10.44 $ 7.76 $ 8.26 $ 7.96 $ 8.22
---------------------------------------------------------------------------
Total Return(D).......................... 32.60% 39.99% (0.99)% 10.59% 6.46% 41.79%
Net Assets, End of Period (in
thousands).............................. $196,752 $122,559 $88,375 $90,902 $84,200 $77,784
Ratio of Expenses to Average Net
Assets.................................. 1.53%(F) 1.60% 1.56% 1.60% 1.60% 1.60%
Ratio of Expenses to Average Net Assets
(Excluding Waivers)..................... 1.53%(F) 1.60% 1.56% 1.61% 1.67 % 1.81%
Ratio of Net Investment Income (Loss) to
Average Net Assets...................... (0.39)% (0.35)% (0.30)% 0.10% (0.30)% 0.90%
Ratio of Net Investment Income (Loss) to
Average Net Assets (Excluding
Waivers)................................ (0.39)% (0.35)% (0.30)% 0.06% (0.31)% 0.69%
Portfolio Turnover....................... 29.90% 45.30 % 64.50 % 107.90% 61.20 % 74.70%
Average Commission Per Share(C).......... $ 0.0636

<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
GROWTH PORTFOLIO (CLASS A) 1990 1989 1988
- ----------------------------------------- -----------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period..... $ 7.24 $ 6.25 $ 6.02
Net Investment Income (Loss)............. 0.08 0.02 0.07
Net Realized and Unrealized Gain (Loss)
on Investments.......................... (0.24) 1.42 0.67
-------------------------------------
Total from Investment Operations......... (0.16) 1.44 0.74
-----------------------------------------------------
Dividends from Net Investment Income..... 0.09 0.02 0.07
Distributions from Net Realized Capital
Gains................................... 0.68 0.43 0.44
---------------------------------------------------------------------
Total Distributions...................... 0.77 0.45 0.51
---------------------------------------------------------------------------
Net Asset Value, End of Period........... $ 6.31 $ 7.24 $ 6.25
---------------------------------------------------------------------------
Total Return(D).......................... (2.26)% 23.05% 12.30%
Net Assets, End of Period (in
thousands).............................. $52,897 $55,320 $40,363
Ratio of Expenses to Average Net
Assets.................................. 1.60% 2.50% 2.50%
Ratio of Expenses to Average Net Assets
(Excluding Waivers)..................... 1.75% 2.70% 2.60%
Ratio of Net Investment Income (Loss) to
Average Net Assets...................... 1.00% 0.30% 0.80%
Ratio of Net Investment Income (Loss) to
Average Net Assets (Excluding
Waivers)................................ 0.89% 0.10% 0.75%
Portfolio Turnover....................... 138.40% 78.30% 67.10%
Average Commission Per Share(C)..........
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, FOR THE PERIOD
----------------- MAY 1, THROUGH
GROWTH PORTFOLIO (CLASS B) 1997 1996 DECEMBER 31, 1995
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $ 10.41 $ 8.69
Net Investment Income (Loss)................................ (0.06) (0.02)
Net Realized and Unrealized Gains (Losses) on Investments... 3.36 2.16
-------------------------------------
Total from Investment Operations............................ 3.30 2.14
-------------------------------------
Dividends from Net Investment Income........................ 0.00 0.00
Distributions from Net Realized Capital Gains............... 0.74 0.42
-------------------------------------
Total Distributions......................................... 0.74 0.42
-------------------------------------
Net Asset Value, End of Period.............................. $ 12.97 $10.41
-------------------------------------
Total Return(E)............................................. 31.73% 24.66%(B)
Net Assets End of Period (in thousands)..................... $36,483 $4,572
Ratio of Expenses to Average Net Assets..................... 2.10%(F) 2.15%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................... 2.10%(F) 2.15%(A)
Ratio of Net Investment Income (Loss) to average net
assets..................................................... (0.96)% (0.82)%(A)
Ratio of Net Investment Income (Loss) to average net assets
(Excluding Waivers)........................................ (0.96)% (0.82)%(A)
Portfolio Turnover.......................................... 29.90% 45.30%(A)
Average Commission Per Share(C)............................. $0.0636
</TABLE>

THE ENTERPRISE Group of Funds, Inc.

7
<PAGE> 12
FINANCIAL HIGHLIGHTS (CONTINUED)

<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 1 THROUGH
GROWTH PORTFOLIO (CLASS C) DECEMBER 31, 1997
- -------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period........................
Net Investment Income (Loss)................................
Net Realized and Unrealized Gains (Losses) on Investments...
------
Total from Investment Operations............................
------
Dividends from Net Investment Income........................
Distributions from Net Realized Capital Gains...............
------
Total Distributions.........................................
------
Net Asset Value, End of Period..............................
------
Total Return(E).............................................
Net Assets End of Period (in thousands).....................
Ratio of Expenses to Average Net Assets.....................
Ratio of Expenses to Average Net Assets (Excluding
Waivers)...................................................
Ratio of Net Investment Income (Loss) to average net
assets.....................................................
Ratio of Net Investment Income (Loss) to average net assets
(Excluding Waivers)........................................
Portfolio Turnover..........................................
Average Commission Per Share(C).............................
</TABLE>

<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 1 THROUGH
GROWTH AND INCOME PORTFOLIO (CLASS A) DECEMBER 31, 1997
- -------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period........................
Net Investment Income (Loss)................................
Net Realized and Unrealized Gains (Losses) on Investments...
-----------------
Total from Investment Operations............................
-----------------
Dividends from Net Investment Income........................
Distributions from Net Realized Capital Gains...............
-----------------
Total Distributions.........................................
-----------------
Net Asset Value, End of Period..............................
-----------------
Total Return(E).............................................
Net Assets End of Period (in thousands).....................
Ratio of Expenses to Average Net Assets.....................
Ratio of Expenses to Average Net Assets (Excluding
Waivers)...................................................
Ratio of Net Investment Income (Loss) to average net
assets.....................................................
Ratio of Net Investment Income (Loss) to average net assets
(Excluding Waivers)........................................
Portfolio Turnover..........................................
Average Commission Per Share(C).............................
</TABLE>

<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 1 THROUGH
GROWTH AND INCOME PORTFOLIO (CLASS B) DECEMBER 31, 1997
- -------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period........................
Net Investment Income (Loss)................................
Net Realized and Unrealized Gains (Losses) on Investments...
-----------------
Total from Investment Operations............................
-----------------
Dividends from Net Investment Income........................
Distributions from Net Realized Capital Gains...............
-----------------
Total Distributions.........................................
-----------------
Net Asset Value, End of Period..............................
-----------------
Total Return(E).............................................
Net Assets End of Period (in thousands).....................
Ratio of Expenses to Average Net Assets.....................
Ratio of Expenses to Average Net Assets (Excluding
Waivers)...................................................
Ratio of Net Investment Income (Loss) to average net
assets.....................................................
Ratio of Net Investment Income (Loss) to average net assets
(Excluding Waivers)........................................
Portfolio Turnover..........................................
Average Commission Per Share(C).............................
</TABLE>

THE ENTERPRISE Group of Funds, Inc.

8
<PAGE> 13
FINANCIAL HIGHLIGHTS (CONTINUED)

<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 1 THROUGH
GROWTH AND INCOME PORTFOLIO (CLASS C) DECEMBER 31, 1997
- -------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period........................
Net Investment Income (Loss)................................
Net Realized and Unrealized Gains (Losses) on Investments...
-----------------
Total from Investment Operations............................
-----------------
Dividends from Net Investment Income........................
Distributions from Net Realized Capital Gains...............
-----------------
Total Distributions.........................................
-----------------
Net Asset Value, End of Period..............................
-----------------
Total Return(E).............................................
Net Assets End of Period (in thousands).....................
Ratio of Expenses to Average Net Assets.....................
Ratio of Expenses to Average Net Assets (Excluding
Waivers)...................................................
Ratio of Net Investment Income (Loss) to average net
assets.....................................................
Ratio of Net Investment Income (Loss) to average net assets
(Excluding Waivers)........................................
Portfolio Turnover..........................................
Average Commission Per Share(C).............................
</TABLE>

<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 1 THROUGH
EQUITY PORTFOLIO (CLASS A) DECEMBER 31, 1997
- -------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period........................
Net Investment Income (Loss)................................
Net Realized and Unrealized Gains (Losses) on Investments...
-----------------
Total from Investment Operations............................
-----------------
Dividends from Net Investment Income........................
Distributions from Net Realized Capital Gains...............
-----------------
Total Distributions.........................................
-----------------
Net Asset Value, End of Period..............................
-----------------
Total Return(E).............................................
Net Assets End of Period (in thousands).....................
Ratio of Expenses to Average Net Assets.....................
Ratio of Expenses to Average Net Assets (Excluding
Waivers)...................................................
Ratio of Net Investment Income (Loss) to average net
assets.....................................................
Ratio of Net Investment Income (Loss) to average net assets
(Excluding Waivers)........................................
Portfolio Turnover..........................................
Average Commission Per Share(C).............................
</TABLE>

<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 1 THROUGH
EQUITY PORTFOLIO (CLASS B) DECEMBER 31, 1997
- -------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period........................
Net Investment Income (Loss)................................
Net Realized and Unrealized Gains (Losses) on Investments...
-----------------
Total from Investment Operations............................
-----------------
Dividends from Net Investment Income........................
Distributions from Net Realized Capital Gains...............
-----------------
Total Distributions.........................................
-----------------
Net Asset Value, End of Period..............................
-----------------
Total Return(E).............................................
Net Assets End of Period (in thousands).....................
Ratio of Expenses to Average Net Assets.....................
Ratio of Expenses to Average Net Assets (Excluding
Waivers)...................................................
Ratio of Net Investment Income (Loss) to average net
assets.....................................................
Ratio of Net Investment Income (Loss) to average net assets
(Excluding Waivers)........................................
Portfolio Turnover..........................................
Average Commission Per Share(C).............................
</TABLE>

THE ENTERPRISE Group of Funds, Inc.

9
<PAGE> 14
FINANCIAL HIGHLIGHTS (CONTINUED)

<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 1 THROUGH
EQUITY PORTFOLIO (CLASS C) DECEMBER 31, 1997
- -------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period........................
Net Investment Income (Loss)................................
Net Realized and Unrealized Gains (Losses) on Investments...
-----------------
Total from Investment Operations............................
-----------------
Dividends from Net Investment Income........................
Distributions from Net Realized Capital Gains...............
-----------------
Total Distributions.........................................
-----------------
Net Asset Value, End of Period..............................
-----------------
Total Return(E).............................................
Net Assets End of Period (in thousands).....................
Ratio of Expenses to Average Net Assets.....................
Ratio of Expenses to Average Net Assets (Excluding
Waivers)...................................................
Ratio of Net Investment Income (Loss) to average net
assets.....................................................
Ratio of Net Investment Income (Loss) to average net assets
(Excluding Waivers)........................................
Portfolio Turnover..........................................
Average Commission Per Share(C).............................
</TABLE>

THE ENTERPRISE Group of Funds, Inc.

10
<PAGE> 15
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------
EQUITY INCOME PORTFOLIO (CLASS A) 1997 1996 1995 1994 1993 1992 1991
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................... $ 20.73 $ 16.43 $ 17.75 $ 16.93 $ 16.00 $ 13.40
Net Investment Income (Loss)........................... 0.41 0.45 0.44 0.52 0.43 0.52
Net Realized and Unrealized Gain (Loss) on
Investments........................................... 3.27 5.00 (0.53) 1.74 0.92 2.61
-------------------------------------------------------------------------
Total from Investment Operations....................... 3.68 5.45 (0.09) 2.26 1.35 3.13
-------------------------------------------------------------------------
Dividends from Net Investment Income................... 0.40 0.45 0.44 0.50 0.41 0.53
Distributions from Capital Gains....................... 1.57 0.70 0.79 0.94 0.01 0.00
-------------------------------------------------------------------------
Total Distributions.................................... 1.97 1.15 1.23 1.44 0.42 0.53
-------------------------------------------------------------------------
Net Asset Value, End of Period......................... $ 22.44 $ 20.73 $ 16.43 $ 17.75 $ 16.93 $ 16.00
-------------------------------------------------------------------------
Total Return(D)........................................ 17.86% 33.38% (0.49)% 13.45% 8.48% 23.55%
Net Assets, End of Period (in thousands)............... $72,647 $61,906 $50,926 $49,920 $40,918 $33,605
Ratio of Expenses to Average Net Assets................ 1.50% 1.50% 1.50% 1.50% 1.50% 1.50%
Ratio of Expenses to Average Net Assets (Excluding
Waivers).............................................. 1.68% 1.78% 1.73% 1.91% 1.95% 2.02%
Ratio of Net Investment Income (Loss) to Average Net
Assets................................................ 1.87% 2.33% 2.50% 2.90% 2.80% 3.50%
Ratio of Net Investment Income (Loss) to Average Net
Assets (Excluding Waivers)............................ 1.69% 2.06% 2.30% 2.51% 2.22% 2.84%
Portfolio Turnover Rate................................ 33.22% 25.60% 41.40% 39.90% 38.30% 25.90%
Average Commission Per Share(C)........................ $0.0615

<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
EQUITY INCOME PORTFOLIO (CLASS A) 1990 1989 1988
- ------------------------------------------------------- -----------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period................... $ 15.26 $ 13.40 $ 12.16
Net Investment Income (Loss)........................... 0.61 0.37 0.29
Net Realized and Unrealized Gain (Loss) on
Investments........................................... (1.84) 1.97 1.37
Total from Investment Operations....................... (1.23) 2.34 1.66
Dividends from Net Investment Income................... 0.63 0.38 0.26
Distributions from Capital Gains....................... 0.00 0.10 0.16
Total Distributions.................................... 0.63 0.48 0.42
Net Asset Value, End of Period......................... $ 13.40 $ 15.26 $ 13.40
Total Return(D)........................................ (8.20)% 17.55% 13.64%
Net Assets, End of Period (in thousands)............... $29,330 $33,402 $10,199
Ratio of Expenses to Average Net Assets................ 1.50% 2.50% 2.50%
Ratio of Expenses to Average Net Assets (Excluding
Waivers).............................................. 2.01% 2.80% 3.80%
Ratio of Net Investment Income (Loss) to Average Net
Assets................................................ 4.20% 3.30% 3.60%
Ratio of Net Investment Income (Loss) to Average Net
Assets (Excluding Waivers)............................ 3.73% 3.04% 2.28%
Portfolio Turnover Rate................................ 20.80% 9.50% 9.70%
Average Commission Per Share(C)........................
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, FOR THE PERIOD
----------------- MAY 1 THROUGH
EQUITY INCOME PORTFOLIO (CLASS B) 1997 1996 DECEMBER 31, 1995
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $ 20.67 $18.12
Net Investment Income (Loss)................................ 0.24 0.29
Net Gains or Losses on Securities (Realized and
Unrealized)................................................ 3.30 3.40
-------------------------------------
Total from Investment Operations............................ 3.54 3.69
-------------------------------------
Dividends from Net Investment Income........................ 0.34 0.44
Distributions from Capital Gains............................ 1.57 0.70
-------------------------------------
Total Distributions......................................... 1.91 1.14
-------------------------------------
Net Asset Value, End of Period.............................. $ 22.30 $20.67
-------------------------------------
Total Return(E)............................................. 17.22% 20.57%(B)
Net Assets, End of Period (in thousands).................... $ 5,615 $1,086
Ratio of Expenses to Average Net Assets..................... 2.05% 2.05%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................... 2.23% 2.23%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets..................................................... 1.32% 1.56%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................ 1.14% 1.33%(A)
Portfolio Turnover Rate..................................... 33.22% 25.60%(A)
Average commission per share(C)............................. $0.0615
</TABLE>

<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 1 THROUGH
EQUITY INCOME PORTFOLIO (CLASS C) DECEMBER 31, 1997
- -------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period........................
Net Investment Income (Loss)................................
Net Gains or Losses on Securities (Realized and
Unrealized)................................................
-----------------
Total from Investment Operations............................
-----------------
Dividends from Net Investment Income........................
Distributions from Capital Gains............................
-----------------
Total Distributions.........................................
-----------------
Net Asset Value, End of Period..............................
-----------------
Total Return(E).............................................
Net Assets, End of Period (in thousands)....................
Ratio of Expenses to Average Net Assets.....................
Ratio of Expenses to Average Net Assets (Excluding
Waivers)...................................................
Ratio of Net Investment Income (Loss) to Average Net
Assets.....................................................
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................
Portfolio Turnover Rate.....................................
Average commission per share(C).............................
</TABLE>

THE ENTERPRISE Group of Funds, Inc.

11
<PAGE> 16
FINANCIAL HIGHLIGHTS (CONTINUED)

<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 1 THROUGH
SMALL COMPANY GROWTH PORTFOLIO (CLASS A) DECEMBER 31, 1997
- -------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period........................
Net Investment Income (Loss)................................
Net Realized and Unrealized Gains (Losses) on Investments...
-----------------
Total from Investment Operations............................
-----------------
Dividends from Net Investment Income........................
Distributions from Net Realized Capital Gains...............
-----------------
Total Distributions.........................................
-----------------
Net Asset Value, End of Period..............................
-----------------
Total Return(E).............................................
Net Assets End of Period (in thousands).....................
Ratio of Expenses to Average Net Assets.....................
Ratio of Expenses to Average Net Assets (Excluding
Waivers)...................................................
Ratio of Net Investment Income (Loss) to average net
assets.....................................................
Ratio of Net Investment Income (Loss) to average net assets
(Excluding Waivers)........................................
Portfolio Turnover..........................................
Average Commission Per Share(C).............................
</TABLE>

<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 1 THROUGH
SMALL COMPANY GROWTH PORTFOLIO (CLASS B) DECEMBER 31, 1997
- -------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period........................
Net Investment Income (Loss)................................
Net Realized and Unrealized Gains (Losses) on Investments...
-----------------
Total from Investment Operations............................
-----------------
Dividends from Net Investment Income........................
Distributions from Net Realized Capital Gains...............
-----------------
Total Distributions.........................................
-----------------
Net Asset Value, End of Period..............................
-----------------
Total Return(E).............................................
Net Assets End of Period (in thousands).....................
Ratio of Expenses to Average Net Assets.....................
Ratio of Expenses to Average Net Assets (Excluding
Waivers)...................................................
Ratio of Net Investment Income (Loss) to average net
assets.....................................................
Ratio of Net Investment Income (Loss) to average net assets
(Excluding Waivers)........................................
Portfolio Turnover..........................................
Average Commission Per Share(C).............................
</TABLE>

<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 1 THROUGH
SMALL COMPANY GROWTH PORTFOLIO (CLASS C) DECEMBER 31, 1997
- -------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period........................
Net Investment Income (Loss)................................
Net Realized and Unrealized Gains (Losses) on Investments...
-----------------
Total from Investment Operations............................
-----------------
Dividends from Net Investment Income........................
Distributions from Net Realized Capital Gains...............
-----------------
Total Distributions.........................................
-----------------
Net Asset Value, End of Period..............................
-----------------
Total Return(E).............................................
Net Assets End of Period (in thousands).....................
Ratio of Expenses to Average Net Assets.....................
Ratio of Expenses to Average Net Assets (Excluding
Waivers)...................................................
Ratio of Net Investment Income (Loss) to average net
assets.....................................................
Ratio of Net Investment Income (Loss) to average net assets
(Excluding Waivers)........................................
Portfolio Turnover..........................................
Average Commission Per Share(C).............................
</TABLE>

THE ENTERPRISE Group of Funds, Inc.

12
<PAGE> 17
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------
CAPITAL APPRECIATION PORTFOLIO (CLASS A) 1997 1996 1995 1994 1993 1992(F)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................... $ 32.54 $ 28.54 $ 31.10 $ 29.42 $ 27.80
Net Investment Income (Loss)........................... (0.31) (0.25) (0.13) (0.15) (0.04)
Net Realized and Unrealized Gain (Loss) on
Investments........................................... 5.69 7.59 (0.95) 1.83 1.66
-------------------------------------------------------------------
Total from Investment Operations....................... 5.38 7.34 (1.08) 1.68 1.62
-------------------------------------------------------------------
Dividends from Net Investment Income................... 0.00 0.00 0.00 0.00 0.00
Distributions from Capital Gains....................... 3.71 3.34 1.48 0.00 0.00
-------------------------------------------------------------------
Total Distributions.................................... 3.71 3.34 1.48 0.00 0.00
-------------------------------------------------------------------
Net Asset Value, End of Period......................... $ 34.21 $ 32.54 $ 28.54 $ 31.10 $ 29.42
-------------------------------------------------------------------
Total Return(D)........................................ 16.52% 25.72% (3.46)% 5.71% 5.83%
Net Assets, End of Period (in thousands)............... $115,253 $121,207 $101,237 $103,187 $72,569
Ratio of Expenses to Average Net Assets................ 1.60%(G) 1.65% 1.66% 1.64% 1.72%
Ratio of Expenses to Average Net Assets (Excluding
Waivers).............................................. 1.60%(G) 1.65% 1.66% 1.64% 1.72%
Ratio of Net Investment Income (Loss) to Average Net
Assets................................................ (0.87)% (0.82)% (0.50)% (0.60)% (0.20)%
Ratio of Net Investment Income (Loss) to Average Net
Assets (Excluding Waivers)............................ (0.87)% (0.82)% (0.50)% (0.60)% (0.20)%
Portfolio Turnover Rate................................ 66.42% 65.20% 74.40% 61.90% 32.50%
Average Commission Per Share(C)........................ $ 0.0486

<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------
CAPITAL APPRECIATION PORTFOLIO (CLASS A) 1991 1990 1989 1988
- ------------------------------------------------------- -------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................... $ 17.48 $ 16.94 $13.01 $12.28
Net Investment Income (Loss)........................... (0.01) 0.11 (0.03) (0.03)
Net Realized and Unrealized Gain (Loss) on
Investments........................................... 10.33 0.54 4.49 0.76
----------------------------------------------
Total from Investment Operations....................... 10.32 0.65 4.46 0.73
------------------------------------------------------------
Dividends from Net Investment Income................... 0.00 0.11 0.00 0.00
Distributions from Capital Gains....................... 0.00 0.00 0.53 0.00
-------------------------------------------------------------------
Total Distributions.................................... 0.00 0.11 0.53 0.00
-------------------------------------------------------------------
Net Asset Value, End of Period......................... $ 27.80 $ 17.48 $16.94 $13.01
-------------------------------------------------------------------
Total Return(D)........................................ 59.04% 3.84% 34.27% 5.94%
Net Assets, End of Period (in thousands)............... $33,375 $12,552 $9,091 $2,825
Ratio of Expenses to Average Net Assets................ 1.75% 1.75% 2.50% 2.50%
Ratio of Expenses to Average Net Assets (Excluding
Waivers).............................................. 2.04% 2.27% 3.90% 6.00%
Ratio of Net Investment Income (Loss) to Average Net
Assets................................................ (0.10)% 0.70% (0.50)% (0.30)%
Ratio of Net Investment Income (Loss) to Average Net
Assets (Excluding Waivers)............................ (0.44)% 0.12% (1.92)% (3.77)%
Portfolio Turnover Rate................................ 40.20% 60.50% 65.80% 49.30%
Average Commission Per Share(C)........................
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED FOR THE PERIOD
DECEMBER 31, MAY 1 THROUGH
CAPITAL APPRECIATION PORTFOLIO (CLASS B) 1997 1996 DECEMBER 31, 1995
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $ 32.42 $30.04
Net Investment Income (Loss)................................ (0.35) (0.12)
Net Realized and Unrealized Gain (loss) on Investments...... 5.50 5.84
-------------------------------------
Total from Investment Operations............................ 5.15 5.72
-------------------------------------
Dividends from Net Investment Income........................ 0.00 0.00
Distributions from Capital Gains............................ 3.71 3.34
-------------------------------------
Total Distributions......................................... 3.71 3.34
-------------------------------------
Net Asset Value, End of Period.............................. $ 33.86 $32.42
-------------------------------------
Total Return(E)............................................. 15.87% 18.99%(B)
Net Assets, End of Period (in thousands).................... $ 5,047 $1,953
Ratio of Expenses to Average Net Assets..................... 2.14%(G) 2.08%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................... 2.14%(G) 2.08%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets..................................................... (1.43)% (1.41)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................ (1.43)% (1.41)%(A)
Portfolio Turnover Rate..................................... 66.42% 65.20%(A)
Average Commission Per Share(C)............................. $0.0486
</TABLE>

<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 1 THROUGH
CAPITAL APPRECIATION PORTFOLIO (CLASS C) DECEMBER 31, 1997
- -------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period........................
Net Investment Income (Loss)................................
Net Realized and Unrealized Gain (loss) on Investments......
------
Total from Investment Operations............................
------
Dividends from Net Investment Income........................
Distributions from Capital Gains............................
------
Total Distributions.........................................
------
Net Asset Value, End of Period..............................
------
Total Return(E).............................................
Net Assets, End of Period (in thousands)....................
Ratio of Expenses to Average Net Assets.....................
Ratio of Expenses to Average Net Assets (Excluding
Waivers)...................................................
Ratio of Net Investment Income (Loss) to Average Net
Assets.....................................................
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................
Portfolio Turnover Rate.....................................
Average Commission Per Share(C)
</TABLE>

THE ENTERPRISE Group of Funds, Inc.

13
<PAGE> 18
FINANCIAL HIGHLIGHTS (CONTINUED)

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, FOR THE PERIOD
SMALL COMPANY VALUE PORTFOLIO ---------------------------------------- OCTOBER 1 THROUGH
(CLASS A) 1997 1996 1995 1994 DECEMBER 31, 1993
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period......................... $ 5.43 $ 5.17 $ 5.29 $ 5.00
Net Investment Income (Loss).... (0.01) 0.02 0.03 0.01
Net Realized and Unrealized Gain
(Loss) on Investments.......... 0.62 0.46 (0.01) 0.29
-------------------------------------------------------------
Total from Investment
Operations..................... 0.61 0.48 0.02 0.30
-------------------------------------------------------------
Dividends from Net Investment
Income......................... 0.00 0.02 0.03 0.01
Distributions from Capital
Gains.......................... 0.30 0.20 0.11 0.00
-------------------------------------------------------------
Total Distributions............. 0.30 0.22 0.14 0.01
-------------------------------------------------------------
Net Asset Value, End of
Period......................... $ 5.74 $ 5.43 $ 5.17 $ 5.29
-------------------------------------------------------------
Total Return (D)................ 11.28% 9.28% 0.34% 5.92%(B)
Net Assets, End of Period (in
thousands)..................... $17,308 $19,720 $22,120 $ 8,118
Ratio of Expenses to Average Net
Assets......................... 1.75% 1.75% 1.75% 1.75%(A)
Ratio of Expenses to Average Net
Assets (Excluding Waivers)..... 2.38% 2.21% 2.15% 4.00%(A)
Ratio of Net Investment Income
(Loss) to Average Net Assets... (0.13)% 0.32% 0.60% 0.10%(B)
Ratio of Net Investment Income
(Loss) to Average Net Assets
(Excluding Waivers)............ (0.76)% (0.14)% 0.18% (1.54)%(A)
Portfolio Turnover Rate......... 143.58% 36.50% 16.70% 0.00%(A)
Average Commission Per
Share(C)....................... $0.0483
</TABLE>

<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED MAY 1 THROUGH
SMALL COMPANY VALUE PORTFOLIO (CLASS B) 1997 DECEMBER 31, 1996 DECEMBER 31, 1995
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period........ $ 5.41 $ 5.28
Net Investment Income (Loss)................ (0.03) (0.01)
Net Realized and Unrealized Gain (Loss) on
Investments................................ 0.61 0.36
-------------------------------------------------
Total from Investment Operations............ 0.58 0.35
-------------------------------------------------
Dividends from Net Investment Income........ 0.00 0.02
Distributions from Capital Gains............ 0.30 0.20
-------------------------------------------------
Total Distributions......................... 0.30 0.22
-------------------------------------------------
Net Asset Value, End of Period.............. $ 5.69 $ 5.41
-------------------------------------------------
Total Return(E)............................. 10.77% 6.87%(B)
Net Assets End of Period (in thousands)..... $ 2,606 $ 862
Ratio of Expenses to Average Net Assets..... 2.30% 2.30%(A)
Ratio of Expenses to Average Net Assets
(Excluding Waivers)........................ 2.92% 2.78%(A)
Ratio of Net Investment Income (Loss) to
Average Net Assets......................... (0.77)% (0.40)%(A)
Ratio of Net Investment Income (Loss) to
Average Net Assets (Excluding Waivers)..... (1.39)% (0.90)%(A)
Portfolio Turnover Rate..................... 143.58% 36.50%(A)
Average Commission Per Share(C)............. $0.0483
</TABLE>

THE ENTERPRISE Group of Funds, Inc.

14
<PAGE> 19
FINANCIAL HIGHLIGHTS (CONTINUED)

<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 1 THROUGH
SMALL COMPANY VALUE PORTFOLIO (CLASS C) DECEMBER 31, 1997
- ---------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period........................
Net Investment Income (Loss)................................
Net Realized and Unrealized Gain (Loss) on Investments......
------------
Total from Investment Operations............................
------------
Dividends from Net Investment Income (Loss).................
Distributions from Capital Gains............................
------------
Total Distributions.........................................
------------
Net Asset Value, End of Period..............................
------------
Total Return(E).............................................
Net Assets End of Period (in thousands).....................
Ratio of Expenses to Average Net Assets.....................
Ratio of Expenses to Average Net Assets (Excluding
Waivers)...................................................
Ratio of Net Investment Income (Loss) to Average Net
Assets.....................................................
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................
Portfolio Turnover Rate.....................................
Average Commission Per Share(C).............................
</TABLE>

A Annualized
B Not Annualized
C Disclosure not applicable to periods prior to 1996. Represents average
commissions rate per share charged to the fund on purchase and sales of equity
investments on which commissions are charged during the period.
D Total return does not include one time sales charge.
E Total return does not include contingent deferred sales charge.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
INTERNATIONAL GROWTH PORTFOLIO -------------------------------------------------------------------------
(CLASS A) 1997 1996 1995 1994 1993 1992(F) 1991
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period....... $ 16.08 $ 14.70 $ 17.44 $ 13.23 $ 13.38 $ 11.95
Net Investment Income (Loss)............... 0.10 0.11 (0.01) (0.02) 0.28 0.28
Net Realized and Unrealized Gain (Loss) on
Investments............................... 1.88 2.12 (0.49) 4.79 (0.39) 1.25
--------------------------------------------------------------
Total from Investment Operations........... 1.98 2.23 (0.50) 4.77 (0.11) 1.53
--------------------------------------------------------------
Dividends from Net Investment Income....... 0.09 0.09 0.00 0.00 0.04 0.10
Distributions from Capital Gains........... 0.87 0.76 2.24 0.17 0.00 0.00
Other...................................... 0.00 0.00 0.00 0.39(G) 0.00 0.00
--------------------------------------------------------------
Total Distributions........................ 0.96 0.85 2.24 0.56 0.04 0.10
--------------------------------------------------------------
Net Asset Value, End of Period............. $ 17.10 $ 16.08 $ 14.70 $ 17.44 $ 13.23 $ 13.38
--------------------------------------------------------------
Total Return(D)............................ 12.32% 15.17% (2.82)% 36.05% (0.93)% 12.91%
Net Assets, End of Period (in thousands)... $34,837 $28,628 $27,523 $22,900 $11,630 $10,736
Ratio of Expenses to Average Net Assets.... 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%
Ratio of Expenses to Average Net Assets
(Excluding Waivers)....................... 2.19% 2.40% 2.51% 3.06% 3.70% 3.59%
Ratio of Net Investment Income (Loss) to
Average Net Assets........................ 0.61% 0.70% (0.20)% (0.10)% 0.50% 0.60%
Ratio of Net Investment Income (Loss) to
Average Net Assets (Excluding Waivers).... 0.42% 0.30% (0.70)% (1.15)% (1.15)% (0.93)%
Portfolio Turnover Rate.................... 23.79% 31.10% 116.10% 70.10% 134.90% 64.50%
Average Commission Per Share(C)............ $0.0221

<CAPTION>
YEAR ENDED DECEMBER 31,
INTERNATIONAL GROWTH PORTFOLIO -----------------------------
(CLASS A) 1990 1989 1988
- ------------------------------------------- -----------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period....... $ 14.53 $ 12.91 $ 12.00
Net Investment Income (Loss)............... 0.04 0.06 0.00
Net Realized and Unrealized Gain (Loss) on
Investments............................... (2.27) 2.21 0.91
Total from Investment Operations........... (2.23) 2.27 0.91
Dividends from Net Investment Income....... 0.04 0.00 0.00
Distributions from Capital Gains........... 0.31 0.65 0.00
Other...................................... 0.00 0.00 0.00
Total Distributions........................ 0.35 0.65 0.00
Net Asset Value, End of Period............. $ 11.95 $ 14.53 $ 12.91
Total Return(D)............................ (15.37)% 17.17% 7.58%
Net Assets, End of Period (in thousands)... $ 9,278 $ 8,514 $ 4,246
Ratio of Expenses to Average Net Assets.... 2.00% 2.50% 2.50%
Ratio of Expenses to Average Net Assets
(Excluding Waivers)....................... 3.85% 5.50% 8.50%
Ratio of Net Investment Income (Loss) to
Average Net Assets........................ 0.70% 0.60% 0.00%
Ratio of Net Investment Income (Loss) to
Average Net Assets (Excluding Waivers).... (1.22)% (2.41)% (6.09)%
Portfolio Turnover Rate.................... 84.70% 68.20% 67.10%
Average Commission Per Share(C)............
</TABLE>

THE ENTERPRISE Group of Funds, Inc.

15
<PAGE> 20
FINANCIAL HIGHLIGHTS (CONTINUED)

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, FOR THE PERIOD
------------------ MAY 1 THROUGH
INTERNATIONAL GROWTH PORTFOLIO (CLASS B) 1997 1996 DECEMBER 31, 1995
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $ 16.02 $14.82
Net Investment Income (Loss)................................ 0.01 (0.02)
Net Realized and Unrealized Gain (Loss) on Investments...... 1.87 2.08
----------------------------
Total from Investment Operations............................ 1.88 2.06
----------------------------
Dividends from Net Investment Income........................ 0.06 0.10
Distributions from Capital Gains............................ 0.87 0.76
----------------------------
Total Distributions......................................... 0.93 0.86
----------------------------
Net Asset Value, End of Period.............................. $ 16.97 $16.02
----------------------------
Total Return(E)............................................. 11.72% 13.88%(B)
Net Assets End of Period (in thousands)..................... $ 4,276 $1,094
Ratio of Expenses to Average Net Assets..................... 2.55% 2.55%(A)
Ratio of Expenses to Average Net Assets Excluding
Waivers)................................................... 2.75% 2.75%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets..................................................... 0.09% (0.65)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................ (0.11)% (0.85)%(A)
Portfolio Turnover Rate..................................... 23.79% 31.10%(A)
Average Commission Per Share(C)............................. $0.0221
</TABLE>

<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 1 THROUGH
INTERNATIONAL GROWTH PORTFOLIO (CLASS C) DECEMBER 31, 1997
- ---------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period........................
Net Investment Income (Loss)................................
Net realized and unrealized gain (Loss) on investments......
Total from Investment Operations............................
Dividends from Net Investment Income........................
Distributions from Capital Gains............................
Total Distributions.........................................
Net Asset Value, End of Period..............................
Total Return(C).............................................
Net Assets, End of Period (in thousands)....................
Ratio of Expenses to Average Net Assets.....................
Ratio of Expenses to Average Net Assets (Excluding
Waivers)...................................................
Ratio of Net Investment Income (Loss) to Average Net
Assets.....................................................
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................
Portfolio Turnover Rate.....................................
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------
GOVERNMENT SECURITIES PORTFOLIO (CLASS A) 1997 1996 1995 1994 1993 1992(E) 1991
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period... $ 11.83 $ 10.62 $ 12.44 $ 12.47 $ 12.40 $ 11.96
Net Investment Income (Loss)... 0.74 0.76 0.87 0.92 0.99 1.00
Net realized and unrealized gain (Loss)
on investments... (0.03) 1.21 (1.82) 0.21 0.19 0.44
Total from Investment Operations... 0.71 1.97 (0.95) 1.13 1.18 1.44
Dividends from Net Investment Income... 0.74 0.76 0.87 0.92 0.98 1.00
Distributions from Capital Gains... 0.00 0.00 0.00 0.24 0.13 0.00
Total Distributions... 0.74 0.76 0.87 1.16 1.11 1.00
Net Asset Value, End of Period... $ 11.80 $ 11.83 $ 10.62 $ 12.44 $ 12.47 $ 12.40
Total Return(C)... 6.29% 19.00% (7.81)% 9.26% 9.93% 12.58%
Net Assets, End of Period (in
thousands)... $ 73,693 $86,224 $84,431 $106,541 $71,515 $46,480
Ratio of Expenses to Average Net
Assets.... 1.30% 1.30% 1.30% 1.30% 1.30% 0.90%
Ratio of Expenses to Average Net Assets
(Excluding Waivers)... 1.42% 1.44% 1.35% 1.44% 1.54% 1.65%
Ratio of Net Investment Income (Loss) to
Average Net Assets... 6.35% 6.66% 7.60% 7.20% 7.90% 8.20%
Ratio of Net Investment Income (Loss) to
Average Net Assets (Excluding
Waivers)... 6.23% 6.52% 7.59% 7.03% 7.72% 7.39%
Portfolio Turnover Rate... 0.17% 0.00% 27.20% 90.10% 108.40% 58.60%

<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------
GOVERNMENT SECURITIES PORTFOLIO (CLASS A) 1990 1989 1988
- ----------------------------------------- --------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period... $ 11.92 $ 11.70 $11.96
Net Investment Income (Loss)... 1.01 0.90 0.79
Net realized and unrealized gain (Loss)
on investments... 0.05 0.23 (0.26)
Total from Investment Operations... 1.06 1.13 0.53
Dividends from Net Investment Income... 1.02 0.91 0.79
Distributions from Capital Gains... 0.00 0.00 0.00
Total Distributions... 1.02 0.91 0.79
Net Asset Value, End of Period... $ 11.96 $ 11.92 $11.70
Total Return(C)... 9.41% 10.01% 4.53%
Net Assets, End of Period (in
thousands)... $31,535 $29,897 $3,826
Ratio of Expenses to Average Net
Assets.... 1.00% 2.10% 2.10%
Ratio of Expenses to Average Net Assets
(Excluding Waivers)... 1.60% 2.70% 4.50%
Ratio of Net Investment Income (Loss) to
Average Net Assets... 8.60% 8.00% 7.00%
Ratio of Net Investment Income (Loss) to
Average Net Assets (Excluding
Waivers)... 7.77% 7.31% 4.52%
Portfolio Turnover Rate... 70.00% 85.00% 14.30%
</TABLE>

THE ENTERPRISE Group of Funds, Inc.

16
<PAGE> 21
FINANCIAL HIGHLIGHTS (CONTINUED)

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, FOR THE PERIOD
---------------- MAY 1 THROUGH
GOVERNMENT SECURITIES PORTFOLIO (CLASS B) 1997 1996 DECEMBER 31, 1995
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period............... $11.83 $11.12
Net Investment Income (Loss)....................... 0.68 0.44
Net Realized and Unrealized Gain (Loss) on
Investments....................................... (0.04) 0.71
-------------------------------------
Total from Investment Operations................... 0.64 1.15
-------------------------------------
Dividends from Net Investment Income............... 0.68 0.44
Distributions from Capital Gains................... 0.00 0.00
-------------------------------------
Total Distributions................................ 0.68 0.44
-------------------------------------
Net Asset Value, End of Period..................... $11.79 $11.83
-------------------------------------
Total Return(D).................................... 5.61% 10.47%(B)
Net Assets, End of Period (in thousands)........... $5,683 $2,124
Ratio of Expenses to Average Net Assets............ 1.85% 1.85%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers).......................................... 1.96% 1.91%(A)
Ratio of Net Investment Income to Average Net
Assets............................................ 5.79% 5.64%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers).................... 5.68% 5.58%(A)
Portfolio Turnover Rate............................ 0.17% 0.00%(A)
</TABLE>

<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 1 THROUGH
GOVERNMENT SECURITIES PORTFOLIO (CLASS C) DECEMBER 31, 1997
- ---------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period........................
Net Investment Income (Loss)................................
Net Realized and Unrealized Gain (Loss) on Investments......
------
Total from Investment Operations............................
------
Dividends from Net Investment Income........................
Distributions from Capital Gains............................
------
Total Distributions.........................................
------
Net Asset Value, End of Period..............................
------
Total Return(D).............................................
Net Assets, End of Period (in thousands)....................
Ratio of Expenses to Average Net Assets.....................
Ratio of Expenses to Average Net Assets (Excluding
Waivers)...................................................
Ratio of Net Investment Income to Average Net Assets........
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................
Portfolio Turnover Rate.....................................
</TABLE>

A Annualized
B Not Annualized
C Total return does not include one time sales charge.
D Total return does not include contingent deferred sales charge.
E Based on average monthly shares outstanding.

THE ENTERPRISE Group of Funds, Inc.

17
<PAGE> 22
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------
HIGH-YIELD BOND PORTFOLIO (CLASS A) 1997 1996 1995 1994 1993 1992 1991
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period....... $ 11.39 $ 10.72 $ 11.70 $ 10.83 $ 10.19 $ 8.55
Net Investment Income (Loss)............... 0.94 0.99 0.97 0.95 1.01 1.13
Net Realized and Unrealized Gain (Loss) on
Investments............................... 0.45 0.67 (0.97) 0.89 0.64 1.66
------------------------------------------------------------------------
Total from Investment Operations........... 1.39 1.66 0.00 1.84 1.65 2.79
------------------------------------------------------------------------
Dividends from Net Investment Income
(Loss).................................... 0.94 0.99 0.98 0.97 1.01 1.15
Distributions from Capital Gains........... 0.00 0.00 0.00 0.00 0.00 0.00
Other...................................... 0.00 0.00 0.00 0.00 0.00 0.00
------------------------------------------------------------------------
Total Distributions........................ 0.94 0.99 0.98 0.97 1.01 1.15
------------------------------------------------------------------------
Net Asset Value, End of Period............. $ 11.84 $ 11.39 $ 10.72 $ 11.70 $ 10.83 $ 10.19
------------------------------------------------------------------------
Total Return(C)............................ 12.78% 16.00% 0.05% 17.58% 16.69% 33.02%
Net Assets, End of Period (in thousands)... $54,129 $52,182 $44,822 $44,361 $30,851 $24,672
Ratio of Expenses to Average Net Assets.... 1.30% 1.30% 1.30% 1.30% 1.30% 1.30%
Ratio of Expenses to Average Net Assets
(Excluding Waivers)....................... 1.50% 1.52% 1.45% 1.59% 1.64% 1.85%
Ratio of Net Investment Income (Loss) to
Average Net Assets........................ 8.21% 8.80% 8.60% 8.20% 9.40% 11.30%
Ratio of Net Investment Income (Loss) to
Average Net Assets (Excluding Waivers).... 8.01% 8.58% 8.52% 7.95% 8.95% 10.51%
Portfolio Turnover Rate.................... 180.13% 88.50% 113.00% 121.20% 121.70% 109.30%

<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
HIGH-YIELD BOND PORTFOLIO (CLASS A) 1990 1989 1988
- ------------------------------------------- -------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period....... $ 10.98 $ 12.37 $ 12.20
Net Investment Income (Loss)............... 1.26 1.33 1.24
Net Realized and Unrealized Gain (Loss) on
Investments............................... (2.43) (1.37) 0.19

Total from Investment Operations........... (1.17) (0.04) 1.43

Dividends from Net Investment Income
(Loss).................................... 1.24 1.35 1.24
Distributions from Capital Gains........... 0.00 0.00 0.02
Other...................................... 0.02(E) 0.00 0.00

Total Distributions........................ 1.26 1.35 1.26

Net Asset Value, End of Period............. $ 8.55 $ 10.98 $ 12.37

Total Return(C)............................ (11.55)% (0.70)% 12.08%
Net Assets, End of Period (in thousands)... $19,591 $29,144 $15,772
Ratio of Expenses to Average Net Assets.... 1.00% 2.10% 2.10%
Ratio of Expenses to Average Net Assets
(Excluding Waivers)....................... 1.71% 2.50% 3.10%
Ratio of Net Investment Income (Loss) to
Average Net Assets........................ 12.30% 11.20% 11.10%
Ratio of Net Investment Income (Loss) to
Average Net Assets (Excluding Waivers).... 11.66% 10.76% 10.09%
Portfolio Turnover Rate.................... 67.40% 61.60% 88.60%
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, FOR THE PERIOD
--------------- MAY 1 THROUGH
HIGH-YIELD BOND PORTFOLIO (CLASS B) 1997 1996 DECEMBER 31, 1995
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $11.39 $11.11
Net Investment Income (Loss)................................ 0.88 0.61
Net Realized and Unrealized Gain (Loss) on Investments...... 0.45 0.28
-----------------------------------
Total from Investment Operations............................ 1.33 0.89
-----------------------------------
Dividends from Net Investment Income........................ 0.88 0.61
Distributions from Capital Gains............................ 0.00 0.00
-----------------------------------
Total Distributions......................................... 0.88 0.61
-----------------------------------
Net Asset Value, End of Period.............................. $11.84 $11.39
-----------------------------------
Total Return(D)............................................. 12.16% 8.12%(B)
Net Assets, End of Period (in thousands).................... $7,892 $2,951
Ratio of Expenses to Average Net Assets..................... 1.85% 1.85%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................... 2.05% 2.09%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets..................................................... 7.74% 7.84%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................ 7.55% 7.68%(A)
Portfolio Turnover Rate..................................... 180.13% 88.50%(A)
</TABLE>

A Annualized
B Not Annualized
C Total return does not include one time sales charge.
D Total return does not include contingent deferred sales charge.
E Distributions in excess of net investment income.

THE ENTERPRISE Group of Funds, Inc.

18
<PAGE> 23
FINANCIAL HIGHLIGHTS (CONTINUED)

<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 1, THROUGH
HIGH-YIELD BOND PORTFOLIO (CLASS C) DECEMBER 31, 1997
- -------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period........................
Net Investment Income (Loss)................................
Net Realized and Unrealized Gain (Loss) on Investments......
------
Total from Investment Operations............................
------
Dividends from Net Investment Income........................
Distributions from Capital Gains............................
------
Total Distributions.........................................
------
Net Asset Value, End of Period..............................
------
Total Return(D).............................................
Net Assets, End of Period (in thousands)....................
Ratio of Expenses to Average Net Assets.....................
Ratio of Expenses to Average Net Assets (Excluding
Waivers)...................................................
Ratio of Net Investment Income to Average Net Assets........
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................
Portfolio Turnover Rate.....................................
</TABLE>

THE ENTERPRISE Group of Funds, Inc.

19
<PAGE> 24
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------
TAX-EXEMPT INCOME PORTFOLIO (CLASS A) 1997 1996 1995 1994 1993 1992 1991
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................... $ 13.99 $ 12.80 $ 14.31 $ 13.60 $ 13.34 $ 12.78
Net Investment Income (Loss)........................... 0.64 0.65 0.67 0.70 0.76 0.82
Net Realized and Unrealized Gain (Loss) on
Investments........................................... (0.16) 1.21 (1.48) 0.73 0.26 0.56
-------------------------------------------------------------------------
Total from Investment Operations....................... 0.48 1.86 (0.81) 1.43 1.02 1.38
-------------------------------------------------------------------------
Dividends from Net Investment Income................... 0.64 0.65 0.68 0.70 0.76 0.82
Distributions from Capital Gains....................... 0.00 0.02 0.02 0.02 0.00 0.00
-------------------------------------------------------------------------
Total Distributions.................................... 0.64 0.67 0.70 0.72 0.76 0.82
-------------------------------------------------------------------------
Net Asset Value, End of Period......................... $ 13.83 $ 13.99 $ 12.80 $ 14.31 $ 13.60 $ 13.34
-------------------------------------------------------------------------
Total Return(C)........................................ 3.54% 14.85% (5.69)% 10.76% 7.88% 11.13%
Net Assets, End of Period (in thousands)............... $28,478 $33,626 $34,297 $41,702 $29,728 $22,614
Ratio of Expenses to Average Net Assets................ 1.25% 1.25% 1.25% 1.25% 1.25% 1.25%
Ratio of Expenses to Average Net Assets (Excluding
Waivers).............................................. 1.41% 1.42% 1.28% 1.39% 1.41% 1.47%
Ratio of Net Investment Income (Loss) to Average Net
Assets................................................ 4.64% 4.82% 5.00% 4.90% 5.60% 6.30%
Ratio of Net Investment Income (Loss) to Average Net
Assets (Excluding Waivers)............................ 4.48% 4.65% 4.97% 4.79% 5.49% 6.04%
Portfolio Turnover Rate................................ 0.91% 0.75% 25.70% 8.30% 16.30% 21.60%

<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
TAX-EXEMPT INCOME PORTFOLIO (CLASS A) 1990 1989 1988
- ------------------------------------------------------- -----------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period................... $ 12.87 $ 12.66 $ 12.09
Net Investment Income (Loss)........................... 0.81 0.76 0.65
Net Realized and Unrealized Gain (Loss) on
Investments........................................... (0.10) 0.31 0.64

Total from Investment Operations....................... 0.71 1.07 1.29

Dividends from Net Investment Income................... 0.80 0.77 0.65
Distributions from Capital Gains....................... 0.00 0.09 0.07

Total Distributions.................................... 0.80 0.86 0.72

Net Asset Value, End of Period......................... $ 12.78 $ 12.87 $ 12.66

Total Return(C)........................................ 5.71% 8.68% 10.90%
Net Assets, End of Period (in thousands)............... $19,880 $18,354 $ 6,655
Ratio of Expenses to Average Net Assets................ 1.20% 2.10% 2.10%
Ratio of Expenses to Average Net Assets (Excluding
Waivers).............................................. 1.47% 2.60% 4.00%
Ratio of Net Investment Income (Loss) to Average Net
Assets................................................ 6.50% 6.00% 5.60%
Ratio of Net Investment Income (Loss) to Average Net
Assets (Excluding Waivers)............................ 6.14% 5.53% 3.67%
Portfolio Turnover Rate................................ 66.40% 99.60% 117.40%
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, FOR THE PERIOD
---------------- MAY 1 THROUGH
TAX-EXEMPT INCOME PORTFOLIO (CLASS B) 1997 1996 DECEMBER 31, 1995
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $13.99 $13.44
Net Investment Income (Loss)................................ 0.56 0.38
Net Realized and Unrealized Gain (Loss) on Investments...... (0.16) 0.57
------------------------------------
Total from Investment Operations............................ 0.40 0.95
------------------------------------
Dividends from Net Investment Income........................ 0.56 0.38
Distributions from Capital Gains............................ 0.00 0.02
------------------------------------
Total Distributions......................................... 0.56 0.40
------------------------------------
Net Asset Value, End of Period.............................. $13.83 $13.99
------------------------------------
Total Return(D)............................................. 2.96% 7.18%(B)
Net Assets, End of Period (in thousands).................... $2,037 $ 912
Ratio of Expenses to Average Net Assets..................... 1.80% 1.80%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................... 1.96% 1.98%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets..................................................... 4.07% 4.08%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................ 3.92% 3.94%(A)
Portfolio Turnover Rate..................................... 0.91% 0.75%(A)
</TABLE>

<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 1 THROUGH
TAX-EXEMPT INCOME PORTFOLIO (CLASS C) DECEMBER 31, 1995
- -------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period........................
Net Investment Income (Loss)................................
Net Realized and Unrealized Gain (Loss) on Investments......
------
Total from Investment Operations............................
------
Dividends from Net Investment Income........................
Distributions from Capital Gains............................
------
Total Distributions.........................................
------
Net Asset Value, End of Period..............................
------
Total Return(D).............................................
Net Assets, End of Period (in thousands)....................
Ratio of Expenses to Average Net Assets.....................
Ratio of Expenses to Average Net Assets (Excluding
Waivers)...................................................
Ratio of Net Investment Income to Average Net Assets........
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................
Portfolio Turnover Rate.....................................
</TABLE>

A Annualized
B Not Annualized
C Total return does not include one time sales charge.
D Total return does not include contingent deferred sales charge.

THE ENTERPRISE Group of Funds, Inc.

20
<PAGE> 25
FINANCIAL HIGHLIGHTS (CONTINUED)

<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED DECEMBER 31, OCTOBER 1, 1994
------------------------------- THROUGH
MANAGED PORTFOLIO (CLASS A) 1997 1996 1995 DECEMBER 31, 1994
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $ 6.70 $ 4.91 $ 5.00
Net Investment Income (Loss)................................ 0.06 0.04 0.01
Net Realized and Unrealized Gain (Loss) on Investments...... 1.41 1.81 (0.09)
------------------------------------------------------
Total from Investment Operations............................ 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 0.00
------------------------------------------------------
Total Distributions......................................... 0.20 0.06 0.01
------------------------------------------------------
Net Asset Value, End of Period.............................. $ 7.97 $ 6.70 $ 4.91
Total Return(E)............................................. 22.08% 37.68% (1.58)%(B)
Net Assets End of Period (In Thousands)..................... $101,022 $47,839 $7,872
Ratio of Expenses to Average Net Assets..................... 1.57% 1.75% 1.75% (A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................... 1.57% 1.90% 3.71%(A)
Ratio of Net Investment Income to Average Net Assets........ 1.12% 1.09% 1.30%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................ 1.12% 0.94% (0.32)%(A)
Portfolio Turnover Rate..................................... 33.21% 26.40% 27.10%(A)
Average Commission Per Share(C)............................. $ 0.0551
</TABLE>

<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED MAY 1, 1996
DECEMBER 31, THROUGH
MANAGED PORTFOLIO (CLASS B) 1997 1996 DECEMBER 31, 1995
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $ 6.68 $ 5.68
Net Investment Income (Loss)................................ 0.02 0.01
Net Realized and Unrealized Gain (Loss) on Investments...... 1.41 1.05
--------------------------------------
Total from Investment Operations............................ 1.43 1.06
--------------------------------------
Dividends from Net Investment Income........................ 0.04 0.03
Distributions from Capital Gains............................ 0.14 0.03
--------------------------------------
Total Distributions......................................... 0.18 0.06
--------------------------------------
Net Asset Value, End of Period.............................. $ 7.93 $ 6.68
--------------------------------------
Total Return(D)............................................. 21.50% 18.38%(B)
Net Assets End of Period (in thousands)..................... $57,037 $16,792
Ratio of Expenses to Average Net Assets..................... 2.13% 2.30%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................... 2.13% 2.45%(A)
Ratio of Net Investment Income to Average Net Assets........ 0.52% 0.31%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................ 0.52% 0.14%(A)
Portfolio Turnover Rate..................................... 33.21% 26.40%(A)
Average Commission Per Share(C)............................. $0.0551
</TABLE>

THE ENTERPRISE Group of Funds, Inc.

21
<PAGE> 26
FINANCIAL HIGHLIGHTS (CONTINUED)

<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 1 THROUGH
MANAGED PORTFOLIO (CLASS C) DECEMBER 31, 1997
- -------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period........................
Net Investment Income (Loss)................................
Net Realized and Unrealized Gain (Loss) on Investments......
-----------------
Total from Investment Operations............................
-----------------
Dividends from Net Investment Income (Loss).................
Distributions from Capital Gains............................
-----------------
Total Distributions.........................................
-----------------
Net Asset Value, End of Period..............................
-----------------
Total Return(D).............................................
Net Assets End of Period (in thousands).....................
Ratio of Expenses to Average Net Assets.....................
Ratio of Expenses to Average Net Assets (Excluding
Waivers)...................................................
Ratio of Net Investment Income (Loss) to Average Net
Assets.....................................................
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................
Portfolio Turnover Rate.....................................
Average Commission Per Share(C).............................
</TABLE>

A Annualized
B Not Annualized
C Disclosure not applicable to periods prior to 1996. Represents average
commissions rate per share charged to the fund on purchase and Sale of equity
investments on which commissions are charged during the period.
D Total return does not include one time sales charge.
E Total return does not include contingent deferred sales charge.

THE ENTERPRISE Group of Funds, Inc.

22
<PAGE> 27
FINANCIAL HIGHLIGHTS (CONTINUED)

<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED DECEMBER 31, MAY 1
------------------------------------------------------------------------- THROUGH
MONEY MARKET PORTFOLIO (CLASS A) 1997 1996 1995 1994 1993 1992(D) 1991 DECEMBER 31, 1990
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period............................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net Investment Income (Loss)....... 0.04 0.05 0.03 0.02 0.03 0.05 0.04
Total from Investment Operations... 0.04 0.05 0.03 0.02 0.03 0.05 0.04
---------------------------------------------------------------------------------------------
Dividends from Net Investment
Income............................ 0.04 0.05 0.03 0.02 0.03 0.05 0.04
---------------------------------------------------------------------------------------------
Total Distributions................ 0.04 0.05 0.03 0.02 0.03 0.05 0.04
---------------------------------------------------------------------------------------------
Net Asset Value, End of Period..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------------------------------------------------------------------------------------------
Total Return(A).................... 4.51% 5.05% 3.34% 2.24% 2.92% 5.22% 4.75%(B)
Net Assets, End of Period (in
thousands)........................ $59,074 $40,325 $32,334 $18,302 $18,932 $16,710 $19,031
Ratio of Expenses to Average Net
Assets............................ 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%(A)
Ratio of Expenses to Average Net
Assets (Excluding Waivers)........ 1.18% 1.35% 1.33% 1.72% 1.56% 1.51% 1.38%(A)
Ratio of Net Investment Income to
Average Net Assets................ 4.42% 4.92% 3.30% 2.20% 2.80% 5.10% 7.00%(A)
Ratio of Net Investment Income
(Loss) to Average Net Assets
(Excluding Waivers)............... 4.24% 4.57% 3.08% 1.47% 1.81% 4.62% 6.17%(A)
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1996 FOR THE PERIOD
--------------- MAY 1 THROUGH
MONEY MARKET PORTFOLIO (CLASS B) 1997 1996 DECEMBER 31, 1995
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period...... $ 1.00 $ 1.00
Net Investment Income (Loss).............. 0.04 0.03
Total from Investment Operations.......... 0.04 0.03
-----------------------------------
Dividends from Net Investment Income...... 0.04 0.03
-----------------------------------
Total Distributions....................... 0.04 0.03
-----------------------------------
Net Asset Value, End of Period............ $ 1.00 $ 1.00
-----------------------------------
Total Return(C)........................... 3.94% 2.95%(B)
Net Assets, End of Period (in
thousands)............................... $1,344 $ 394
Ratio of Expenses to Average Net Assets... 1.55% 1.55%(A)
Ratio of Expenses to Average Net Assets
(Excluding Waivers)...................... 1.73% 1.88%(A)
Ratio of Net Investment Income to Average
Net Assets............................... 3.85% 4.23%(A)
Ratio of Net Investment Income (Loss) to
Average Net Assets (Excluding Waivers)... 3.68% 3.90%(A)
</TABLE>

<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 1 THROUGH
MONEY MARKET PORTFOLIO (CLASS C) DECEMBER 31, 1997
- ---------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period....................
Net Investment Income (Loss)............................
Total from Investment Operations........................
------
Dividends from Net Investment Income....................
------
Total Distributions.....................................
------
Net Asset Value, End of Period..........................
------
Total Return(C).........................................
Net Assets, End of Period (in thousands)................
Ratio of Expenses to Average Net Assets.................
Ratio of Expenses to Average Net Assets (Excluding
Waivers)...............................................
Ratio of Net Investment Income to Average Net Assets....
Ratio of Net Investment Income (Loss) to Average Net
Assets (Excluding Waivers).............................
</TABLE>

A Annualized
B Not Annualized
C Total return does not include contingent deferred sales charge.
D Based on average monthly shares outstanding.

THE ENTERPRISE Group of Funds, Inc.

23
<PAGE> 28

INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS

The following descriptions of the Portfolios are intended to help you select the
Portfolio which is appropriate for your investment objective. You may wish to
pursue your objectives by investing in more than one Portfolio.

The investment objectives of each Portfolio may not be changed without approval
of a majority of the outstanding voting securities of that Portfolio.

EQUITY PORTFOLIOS

Under normal market conditions, at least 65% of the net asset value of the eight
Equity Portfolios will be invested in common equity securities. The remainder of
the Equity Portfolios' assets may be invested in repurchase agreements, bankers
acceptances, bank certificates of deposit, commercial paper and similar money
market instruments, convertible bonds, convertible preferred stock, preferred
stock, corporate bonds, U.S. Treasuries, notes and bonds, American Depository
Receipts ("ADRs"), European Depository Receipts ("EDRs"), foreign stocks, rights
and warrants.

The Growth, Growth and Income, Equity, Equity Income, Capital Appreciation,
Small Company Growth and Small Company Value Portfolios invest in securities
that are traded on national securities exchanges and in the over-the-counter
market. Each of these Portfolios may invest up to 20% of its assets in foreign
securities provided they are listed on a domestic or foreign securities exchange
or are represented by ADRs and up to 10% of its assets in illiquid, including
restricted, securities. As noted below, the International Growth Portfolio
invests principally in the securities of foreign issuers listed on recognized
foreign exchanges, but may also invest in securities traded on the
over-the-counter market.

GROWTH PORTFOLIO

The objective of the Growth Portfolio is appreciation of capital primarily
through investments in common stocks. The Portfolio's common stock selection
emphasizes those companies having growth characteristics, but the Portfolio's
investment policy recognizes that securities of other companies may be
attractive for capital appreciation purposes by virtue of special developments
or depression in price believed to be temporary. The potential for appreciation
of capital is the basis for investment decisions; any income is incidental.

GROWTH AND INCOME

The objective of the Growth and Income Portfolio is to achieve a total return in
excess of the total return of the Lipper Growth and Income Mutual Funds Average,
measured over a period of three to five years, by investing primarily in a
broadly diversified group of large capitalization companies. The Portfolio seeks
this objective primarily through capital appreciation with income as a secondary
consideration. The Portfolio will invest in securities of companies which the
Portfolio Manager believes to be financially sound and will consider such
factors as the sales, growth and profitability prospects for the economic sector
and markets in which the company operates and for the services of products it
provides; the financial condition of the company; its ability to meet its
liabilities and to provide income in the form of dividends; the prevailing price
of the security; how that price compares to historical price levels of the
security, to current price levels in the general market, and to the

THE ENTERPRISE Group of Funds, Inc.

24
<PAGE> 29

prices of competing companies; projected earnings estimates and earnings growth
rate of the company, and the relation of those figures to the current price.

In general, the Portfolio will invest in stocks of companies with market
capitalizations in excess of $750 million. Although there is no assurance that
the Portfolio will meet its objective, the securities held in the Growth and
Income Portfolio will generally reflect the price volatility of the broad equity
market (i.e., the Standard & Poor's 500 Index).

EQUITY PORTFOLIO

The investment objective of the Equity Portfolio is long term capital
appreciation through investment in securities (primarily equity 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. It
is the Portfolio Manager's intention to invest in securities of companies which
in the Portfolio Manager's opinion possess one or more of the following
characteristics: undervalued assets, valuable consumer or commercial franchises,
securities valuation below peer companies, substantial and growing cash flow
and/or a favorable price to book value relationship. Investment policies aimed
at achieving the Portfolio's objective are set in a flexible framework of
securities selection which primarily includes equity securities, such as common
stocks, preferred stocks, convertible securities, rights and warrants in
proportions which vary from time-to-time. Under normal circumstances at least
65% of the Portfolio's assets will be invested in equity securities. The
Portfolio will invest primarily in stocks listed on the New York Stock Exchange.
In addition, it may also purchase securities listed on other domestic securities
exchanges, securities traded in the domestic over-the-counter market and foreign
securities provided that they are listed on a domestic or foreign securities
exchange or represented by American Depository Receipts listed on a domestic
securities exchange or traded in the United States over-the-counter market.

EQUITY INCOME PORTFOLIO

The objective of the Equity Income Portfolio is a combination of growth and
income to achieve an above average and consistent total return, primarily from
investments in dividend-paying common stocks.

The Portfolio's principal criterion in stock selection is above average yield,
and it uses this criterion as a discipline to enhance stability and reduce
market risk. Subject to this primary criterion, the Portfolio invests in stocks
that have relatively low price to earnings ratios or relatively low price to
book value ratios.

CAPITAL APPRECIATION PORTFOLIO

The objective of the Capital Appreciation Portfolio is maximum capital
appreciation, primarily through investments in common stocks of companies that
demonstrate accelerating earnings momentum and consistently strong financial
characteristics.

The Portfolio invests primarily in common stocks of companies which meet the
Portfolio Manager's criteria of: (a) steadily increasing earnings; and (b) a
three-year average performance record of sales, earnings, dividend growth,
pretax margins, return on equity and reinvestment rate at an aggregate average
of 1.5 times the average performance of the Standard & Poor's 500 common stocks
("S&P 500") for the same period. The Portfolio attempts to invest in a range of
small, medium and large companies designed to achieve an average capitalization
of the companies in which it invests that is less than the average capitali-

THE ENTERPRISE Group of Funds, Inc.

25
<PAGE> 30

zation of the S&P 500. The potential for maximum capital appreciation is the
basis for investment decisions; any income is incidental.

SMALL COMPANY GROWTH PORTFOLIO

The Small Company Growth Portfolio seeks capital appreciation and invests
primarily in common stocks of small capitalization companies believed by the
Portfolio Manager to have an outlook for strong earnings growth and potential
for significant capital appreciation. The Portfolio will normally be as fully
invested as practicable in common stocks and securities convertible into common
stocks, but also may invest up to 5% of its assets in warrants and rights to
purchase common stocks. In the option of the Portfolio Manager, there may be
times when the shareholder's best interests are best served and the investment
objective is more likely to be achieved by having varying amounts of the
Portfolio's assets in convertible securities. Under normal market conditions,
the Portfolio will invest at least 65% of its total assets in common stocks and
convertible securities of small capitalization companies (market capitalization
of up to $1 billion). At certain times that percentage may be substantially
higher. Securities will be sold when the Portfolio Manager believes that
anticipated appreciation is no longer probable, alternative investments offer
superior appreciation prospects, or the risk of a decline in market price is too
great. Because of its policy with respect to the sales of investments, the
Portfolio may from time to time realize short-term gains or losses. The
Portfolio will likely have somewhat greater volatility than the stock market in
general, as measured by the S&P 500 Index.

SMALL COMPANY VALUE PORTFOLIO

The objective of the Small Company Value Portfolio is maximum capital
appreciation, primarily through investment of at least 65% of Portfolio assets
in the common equity securities of companies (based on the total outstanding
common shares at the time of investment) which have a market capitalization of
up to $1 billion.

The Portfolio intends to invest the remaining 35% of its total assets in the
same manner but reserves the right to use some or all of the 35% to invest in
equity securities of companies (based on the total outstanding common shares at
the time of investment) which have a market capitalization of more than $1
billion.

In pursuing its objective, the Portfolio's strategy will be to invest in stocks
of companies with value that may not be fully reflected by current stock price.
Since small companies tend to be less actively followed by stock analysts, the
market may overlook favorable trends and then adjust its valuation more quickly
once investor interest has surfaced. The Portfolio Manager seeks out companies
in the public market that are selling at a discount to their private market
value (PMV) measured using proprietary research techniques in areas of core
competencies. The Portfolio Manager then determines whether there is an emerging
catalyst that will focus investor attention on the underlying assets of the
company. Smaller companies may be subject to a valuation catalyst such as
increased investor attention, takeover efforts or a change in management.

INTERNATIONAL GROWTH PORTFOLIO

The objective of the International Growth Portfolio is capital appreciation,
primarily through a diversified portfolio of non-U.S. equity securities.

THE ENTERPRISE Group of Funds, Inc.

26
<PAGE> 31

It is a fundamental policy of the Portfolio that it will invest at least 80% of
the value of its assets (except when maintaining a temporary defensive position)
in equity securities of companies domiciled outside the United States. That
portion of the Portfolio not invested in equity securities is, in normal
circumstances, invested in U.S. and foreign government securities, high grade
commercial paper, certificates of deposit, foreign currency, banker acceptances,
cash and cash equivalents, time deposits, repurchase agreements and similar
money market instruments, both foreign and domestic. The Portfolio may invest in
convertible debt securities of foreign issuers which are convertible into equity
securities at such time as a market for equity securities is established in the
country involved.

The Portfolio Manager's investment perspective for the Portfolio is to invest in
the equity securities of non-U.S. markets and companies which are believed to be
undervalued based upon internal research and proprietary valuation systems. This
international equity strategy reflects the Portfolio Manager's decisions
concerning the relative attractiveness of asset classes, the individual
international equity markets, industries across and within those markets, other
common risk factors within those markets and individual international companies.
The Portfolio Manager initially identifies those securities which it believes to
be undervalued in relation to the issuer's assets, cash flow, earnings and
revenues. The relative performance of foreign currencies is an important factor
in the Portfolio's performance. The Portfolio Manager may manage the Portfolio's
exposure to various currencies to take advantage of different yield, risk and
return characteristics. The Portfolio Manager's proprietary valuation model
determines which securities are potential candidates for inclusion in the
Portfolio.

The benchmark for the Portfolio is the European, Australian, Far East ("EAFE")
Index (the "Benchmark"). The Benchmark is a market driven, broad based index
which includes non-U.S. equity markets in terms of capitalization and
performance. The Benchmark is designed to provide a representative total return
for all major stock exchanges located outside the U.S. From time to time, the
Portfolio Manager may substitute securities in an equivalent index when it
believes that such securities in the index more accurately reflect the relevant
international market.

As a general matter, the Portfolio Manager will purchase for the Portfolio only
securities contained in the underlying index relevant to the Benchmark. Brinson
Partners will attempt to enhance the long-term risk and return performance of
the Fund relative to the Benchmark by deviating from the normal Benchmark mix of
country allocation and currencies in reaction to discrepancies between current
market prices and fundamental values. The active management process is intended
to produce a superior performance relative to the Benchmark index.

The Portfolio Manager will purchase securities of companies domiciled in a
minimum of 8 to 12 countries outside the United States.

INCOME PORTFOLIOS

Investors should refer to the Appendix to the Statement of Additional
Information for a description of the Moody's Investors Service, Inc. ("Moody's")
and Standard & Poor's ("S&P") ratings mentioned below.

THE ENTERPRISE Group of Funds, Inc.

27
<PAGE> 32

GOVERNMENT SECURITIES PORTFOLIO

It is a fundamental policy of the Portfolio that under normal conditions at
least 80% of the value of its net assets will be invested in U.S. Government
Securities. Securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities are generally considered to be of the same or
higher credit quality as privately issued securities rated Aaa by Moody's or AAA
by S&P.

U.S. Government Securities consist of direct obligations of the U.S. Treasury
(such as treasury bills, treasury notes and treasury bonds) and securities
issued or guaranteed by agencies and instrumentalities of the United States
Government. Those securities issued by agencies or instrumentalities may or may
not be backed by the full faith and credit of the United States. Examples of
full faith and credit securities are securities issued by the Government
National Mortgage Association ("GNMA Certificates"). Examples of agencies or
instrumentalities whose securities are not backed by the full faith and credit
of the United States are the Federal Farm Credit System, the Federal Home Loan
Banks, the Tennessee Valley Authority, the United States Postal Service and the
Export-Import Bank. The Portfolio may concentrate from time to time in different
securities described above in order to obtain the highest level of current
income and safety of principal.

The remainder of the Portfolio's assets may be invested in repurchase
agreements, bankers acceptances, bank certificates of deposit, commercial paper
and similar money market instruments, corporate bonds and other mortgage-related
securities (including collateralized mortgage obligations or "CMOs") rated Aaa
by Moody's or AAA by S&P at the time of the investment or determined by the
Portfolio Manager to be of comparable credit quality at the time of investment
to such rated securities. In making such investments, the Portfolio Manager
seeks income but gives careful attention to security of principal and considers
such factors as marketability and diversification. For a discussion of CMOs and
related risks, see "Certain Investment Techniques and Associated Risks".

As described in "Certain Investment Techniques and Associated Risks," the
Portfolio may write and sell covered call option contracts on securities that it
owns (in an effort to enhance income through hedging and other investment
techniques) to the extent of 20% of the value of its net assets at the time such
option contracts are written.

HIGH-YIELD BOND PORTFOLIO

The objective of the High-Yield Bond Portfolio is maximum current income,
primarily from debt securities that are rated Ba or lower by Moody's or BB or
lower by Standard & Poor's.

It is a fundamental policy of the Portfolio that it will invest at least 80% of
the value of its total assets (except when maintaining a temporary defensive
position) in high-yielding, income-producing corporate bonds that are rated B3
or better by Moody's or B- or better by S&P. The corporate bonds in which the
Portfolio invests are high-yielding but normally carry a greater credit risk
than bonds with higher ratings. In addition, such bonds, commonly referred to as
"junk bonds", may involve greater volatility of price than

THE ENTERPRISE Group of Funds, Inc.

28
<PAGE> 33

higher-rated bonds. For a discussion of high-yield securities and related risks,
see "Certain Investment Techniques and Associated Risks".

The Portfolio's investments are selected by the Portfolio Manager after careful
examination of the economic outlook to determine those industries that appear
favorable for investments. Industries going through a perceived decline
generally are not candidates for selection. After the industries are selected,
bonds of issuers within those industries are selected based on their
creditworthiness, their yields in relation to their credit and the relative
strength of their common stock prices. Companies near or in bankruptcy are not
considered for investment. The Portfolio does not purchase bonds which are rated
Ca or lower by Moody's or CC or lower by S&P or which, if unrated, in the
judgment of the Portfolio Manager have characteristics of such lower-grade
bonds. Should an investment purchased with the above-described credit quality
requisites be downgraded to Ca or lower or CC or lower, the Portfolio Manager
shall have discretion to hold or liquidate the security.

Subject to the restrictions described above, under normal circumstances, up to
20% of the Portfolio's assets may include: (1) bonds rated Caa by Moody's or CCC
by S&P; (2) unrated debt securities which, in the judgment of the Portfolio
Manager have characteristics similar to those described above; (3) convertible
debt securities; (4) puts, calls and futures as hedging devices; (5) foreign
issuer debt securities; and (6) short-term money market instruments, including
certificates of deposit, commercial paper, U.S. Government Securities and
otherincome-producing cash equivalents. For a discussion on puts, calls, and
futuresand their related risks, see "Certain Investment Techniques and
Associated Risks".

TAX-EXEMPT INCOME PORTFOLIO

The objective of the Tax-Exempt Income Portfolio is a high level of current
income not includable in gross income for federal income tax purposes, with
consideration given to preservation of principal, primarily from investments in
a diversified portfolio of long-term investment grade municipal bonds.

It is a fundamental policy of the Portfolio that it will invest at least 80% of
its net assets (except when maintaining a temporary defensive position) in
Municipal Securities (or futures contracts or options on futures with respect
thereto) which, at the time of investment, are investment grade or in Municipal
Securities which are not rated if, based upon credit analysis by the Portfolio
Manager, it is believed that such securities are of comparable quality to such
rated bonds.

The Portfolio invests primarily in investment grade "Municipal Securities" the
interest on which, in the opinion of counsel for issuers and the Portfolio, is
not includable in gross income for federal income tax purposes. Municipal
Securities are notes and bonds issued by or on behalf of states, territories and
possessions of the United States and the District of Columbia and their
political subdivisions, agencies and instrumentalities. These securities are
traded primarily in the over-the-counter market. Such securities may have fixed,
variable or floating rates of interest. See the Appendix to this Prospectus for
a further description of Municipal Securities.

Investment grade securities are: bonds rated within the three highest ratings by
Moody's (Aaa, Aa, A) or S&P (AAA, AA, A); notes given one of the three highest
ratings by Moody's (MIG1, MIG2, MIG3) for notes; commercial paper rated P-1 by
Moody's or

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A-1 by S&P; and variable rate securities rated VMIG1 or VMIG2 by Moody's.

While there are no maturity restrictions on the Municipal Securities in which
the Portfolio invests, the average maturity is expected to range between 10 and
25 years. The Portfolio Manager will actively manage the Portfolio, adjusting
the average Portfolio maturity and utilizing futures contracts and options on
futures as a defensive measure according to its judgment of anticipated interest
rates. During periods of rising interest rates and falling prices, a shorter
weighted average maturity may be adopted to cushion the effect of bond price
declines on the Portfolio's net asset value. When rates are falling and prices
are rising, a longer weighted average maturity rate may be adopted. For a
discussion on futures and their related risks, see "Certain Investment
Techniques and Associated Risks".

The Portfolio may also invest up to 20% of its net assets in cash, cash
equivalents and debt securities, the interest from which may be subject to
federal income tax. Investments in taxable securities will be limited to
investment grade corporate debt securities and U.S. Government Securities.

The Portfolio will not invest more than 20% of its net assets in Municipal
Securities the interest on which is subject to federal alternative minimum tax.

FLEXIBLE PORTFOLIO

MANAGED PORTFOLIO

The objective of the Managed Portfolio is 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 the Portfolio Manager's
assessments of the relative outlook for such investments. In seeking to achieve
its investment objective, the types of equity securities in which the Portfolio
may invest will be the same as those in which the Equity Portfolios invest. Debt
securities are expected to be predominantly investment grade intermediate to
long term U.S. Government and corporate debt, although the Portfolio will also
invest in high quality short term money market and cash equivalent securities
and may invest almost all of its assets in such securities when the Manager
deems it advisable in order to preserve capital. In addition, the Portfolio may
also invest up to 20% of its assets in foreign securities provided that they are
listed on a domestic or foreign securities exchange or are represented by ADRs
listed on a domestic securities exchange or traded in the United States
over-the-counter market.

The allocation of the Portfolio's assets among the different types of permitted
investments will vary from time to time based upon the Portfolio Manager's
evaluation of economic and market trends and its perception of the relative
values available from such types of securities at any given time. There is
neither a minimum nor a maximum percentage of the Portfolio's assets that may,
at any given time, be invested in any of the types of investments identified
above. Consequently, while the Portfolio will earn income to the extent it is
invested in bonds or cash equivalents, the Portfolio does not have any specific
income objective.

MONEY MARKET PORTFOLIO

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securities of lower quality and longer maturity which generally have less
liquidity and greater market risk. The Money Market Portfolio seeks to achieve
its objective by investing in a diversified portfolio of high quality money
market instruments, comprised of U.S. dollar-denominated instruments which
present minimal credit risks and are of eligible quality which consist of the
following:

1. obligations issued or guaranteed as to principal and interest by the United
States Government or any agency or authority controlled or supervised by and
acting as an instrumentality of the U.S. Government pursuant to authority
granted by Congress;

2. commercial paper, negotiable certificates of deposit, letters of credit, time
deposits and bankers' acceptances, of U.S. or foreign banks, and U.S. or
foreign savings and loans associations, which at the date of investment have
capital, surplus and undistributed profits as of the date of their most
recent published financial statements of $500,000,000 or greater;

3. short-term corporate debt instruments (commercial paper or variable amount
master demand notes) rated "A-1" or "A-2" by S&P or "Prime 1" or "Prime 2" by
Moody's or Tier 1 by any two Nationally Recognized Statistical Rating
Organization ("NRSRO"), or, if not rated, issued by a company rated at least
"A" by any two NRSROs and about which the Board of Directors of the Fund has
ratified the Portfolio Manager's independent determination that the
instrument presents minimal credit risks and is of high quality; however,
investments in securities of all issuers having the second highest rating
(A-2/P-2) assigned shall be limited to no more than five percent of the
Portfolio's assets at the time of purchase, with the investment of any one
such issuer being limited to not more than one percent of Portfolio assets at
the time of purchase;

4. corporate obligations limited to non-convertible corporate debt securities
having one year or less remaining to maturity and which are rated "AA" or
better by S&P or "Aa" or better by Moody's; and

5. repurchase agreements with respect to any of the foregoing obligations.

The Money Market Portfolio will limit its investment in the securities of any
one issuer to no more than five percent of Portfolio assets, measured at the
time of purchase.

In addition, the Money Market Portfolio will not purchase any security,
including any repurchase agreement maturing in more than seven days, which is
subject to legal or contractual delays on resale or which is not readily
marketable if more than 10% of the net assets of the Money Market Portfolio,
taken at market value would be invested in such securities.

After purchase by the Money Market Portfolio, a security may cease to be rated
or its rating may be reduced below the minimum required for purchase by the
Money Market Portfolio. Neither event will require a sale of such security by
the Money Market Portfolio. The Portfolio Manager will consider such event in
its determination of whether the Money Market Portfolio should continue to hold
the security provided that the security presents minimal credit risks and that
holding the security is in the best interests of the Portfolio. To the extent
Moody's or S&P may change their rating systems generally (as described in the
Appendix to the Statement of Addi-

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tional Information) the Money Market Portfolio will attempt to use comparable
ratings as standards for investments in accordance with investment policies
contained herein and in the Fund's Statement of Additional Information.

The dollar weighted average maturity of the Money Market Portfolio will be 90
days or less.

All investments of the Money Market Portfolio will be limited to instruments
which the Board of Directors determines are of eligible quality, which, if
instruments of foreign issuers, are United States dollar-denominated instruments
presenting minimal credit risk, and all of which are either:

1. of those rated in the two highest rating categories by any Nationally
Recognized Statistical Rating Organization (NRSRO), or

2. if the instrument is not rated, of comparable quality as determined by the
Board of Directors.

Generally, instruments with NRSRO ratings in the two highest grades are
considered "high quality." All of the money market investments will mature in
397 days or less. The Money Market Portfolio will use the amortized cost method
of securities valuation, as described more fully in the Statement of Additional
Information.

CERTAIN INVESTMENT
TECHNIQUES AND
ASSOCIATED RISKS

Following is a description of certain investment techniques employed by the
Portfolios, and certain types of securities invested in by the Portfolios and
associated risks. Unless otherwise indicated, all of the Portfolios may use the
indicated techniques and invest in the indicated securities.

GENERAL RISKS ASSOCIATED WITH EQUITY PORTFOLIOS

The Equity Portfolios seek to reduce risk of loss of principal due to changes in
the value of individual stocks by investing in a diversified portfolio of common
stocks and through the use of options on stocks. Such investment techniques do
not, however, eliminate all risks. Investors should expect the value of the
Equity Portfolios and the net asset value of their shares to fluctuate based on
market conditions.

Smaller capitalization companies may experience higher growth rates and higher
failure rates than do larger capitalization companies due to the risk related to
markets, market share, product performance and financial resources. The limited
volume and frequency of trading of small capitalization companies may subject
their stocks to greater price deviations than stocks of larger companies.

The International Growth Portfolio carries additional risks associated with
possibly less stable foreign securities and currencies. For a discussion on
these risks, please refer to "Foreign Currency Values and Transactions".

GENERAL RISKS ASSOCIATED WITH INCOME PORTFOLIOS

Although the Income Portfolios seek to reduce credit risks, i.e., failure of
obligors to pay interest and principal, through careful selection of
investments, and they seek to reduce market risks resulting from fluctuations in
the principal value of debt obligations due to changes in prevailing interest
rates by careful timing of maturities of investments, such risks cannot be
eliminated, and these factors will affect the net asset value of shares in the
Income Portfolios. The

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value of debt obligations has an inverse relationship with prevailing interest
rates.

GENERAL RISKS ASSOCIATED WITH FLEXIBLE PORTFOLIO

The foregoing types of risks associated with equity and income portfolios also
apply to flexible portfolios.

U.S. GOVERNMENT SECURITIES

Although the payment of interest and principal on a security may be guaranteed
by the United States Government or one of its agencies or instrumentalities, the
value of such fixed income securities and, consequently, the yield on and net
asset value of shares of the Government Securities Portfolio are not guaranteed
by the U.S. Government. The net asset value fluctuates in response to changes in
interest rates and market valuation. During periods of declining interest rates,
prepayment of mortgages underlying mortgage-backed securities can be expected to
accelerate. As a result, the Government Securities Portfolio's ability to
maintain positions in high-yielding, mortgage-backed securities, such as GNMA
Certificates, will be affected by reductions in the principal amounts of such
securities resulting from such prepayments, and its ability to reinvest the
returns of principal at comparable yields is subject to generally prevailing
interest rates at the time.

MORTGAGE-RELATED SECURITIES AND
ASSET-BACKED SECURITIES

Up to 20% of the net assets of the Government Securities Portfolio may be
invested in assets other than U.S. Government Securities, including
collateralized mortgage related securities ("CMOs") and asset backed securities.
These securities are considered to be volatile and may be thinly traded. CMOs
are obligations fully collateralized by a portfolio of mortgages or
mortgage-related securities. 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 or lesser risk of prepayment than other
types of mortgage-related securities.

While there are many versions of CMOs and asset backed securities, some include
"Interest Only" or "IO" -- where all interest payments go to one class of
holders, "Principal Only" or "PO" -- where all of the principal goes to a second
class of holders, "Floaters" -- where the coupon rate floats in the same
direction as interest rates and "Inverse Floaters" -- where the coupon rate
floats in the opposite direction as interest rates. All these securities are
volatile; they also have particular risks in differing interest rate
environments as described below.

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rated AAA or the equivalent. Conversely, while the yield to maturity on a PO
class is also extremely sensitive to rate of principal payments (including
prepayments) on the related underlying mortgage assets, a slow rate of principal
payments may have a material adverse effect on yield to maturity and therefore
the market value of the PO. As interest rates rise and fall, the value of POs
tends to move in the opposite direction from interest rates. This is typical of
most debt instruments. See "General Risks Associated With Income Portfolios".

Floaters and Inverse Floaters ("Floaters") are extremely sensitive to the rise
and fall in interest rates. The coupon rate on these securities is based on
various benchmarks, such as LIBOR ("London Inter-Bank Offered Rate") and the
11th District cost of funds (the base rate). The coupon rate on Floaters can be
affected by a variety of terms. Floaters can be reset at fixed intervals over
the life of the Floater, float with a spread to the base rate or be a certain
percentage rate minus a certain base rate. Some Floaters have floors below which
the interest rate cannot be reset and/or ceilings above which the interest rate
cannot be reset. The coupon rate and/or market value of Floaters tend to move in
the same direction as the base rate while the coupon rate and/or market value of
Inverse Floaters tend to move in the opposite direction from the base rate.

The market value of all CMOs and other asset backed securities are determined by
supply and demand in the bid/ask market, interest rate movements, the yield
curve, forward rates, prepayment assumptions and credit of the underlying
issuer. Further, the price actually received on a sale may be different from
bids when the security is being priced.

CMOs and asset-backed securities tradeover a bid and ask market through several
large market makers. Due to the complexity and concentration of derivative
securities, the liquidity and, consequently, the volatility of these securities
can be sharply influenced by market demand.

Asset-backed and mortgage-related securities may not be readily marketable. To
the extent any of these securities are not readily marketable in the judgment of
the Portfolio Manager (subject to the oversight of the Board of Directors), the
investment restriction limiting the Portfolio's investment in illiquid
instruments to not more than 10% of the value of its net assets will apply.
However, IOs and POs issued by the U.S. Government, its agencies and
instrumentalities, and backed by fixed-rate mortgages may be excluded from this
limit, if, in the judgment of the Portfolio Manager (subject to the oversight of
the Board of Directors) such IOs and POs are readily marketable. The Government
Securities Portfolio does not intend to invest in residual interests, privately
issued securities or subordinated classes of underlying mortgages.

HIGH-YIELD SECURITIES

Notwithstanding the investment policies and restrictions applicable to the
High-Yield Bond and Managed Portfolios which were designed to reduce risks
associated with such investments, high-yield securities may carry higher levels
of risk than many other types of income producing securities. These risks are of
three basic types: the risk that the issuer of the high-yield bond will default
in the payment of principal and interest; the risk that the value of the bond
will decline due to rising interest rates, economic conditions, or public
perception; and the risk that the investor in such bonds may not be able to
readily sell

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such bonds. Each of the major categories of risk are impacted by various
factors, as discussed below:

HIGH-YIELD BOND MARKET

The high-yield bond market is relatively new and has grown in the context of a
long economic expansion. Any downturn in the economy may have a negative impact
on the perceived ability of the issuer to make principal and interest payments
which may adversely affect the value of outstanding high-yield securities and
reduce market liquidity.

SENSITIVITY TO INTEREST RATE AND ECONOMIC CHANGES

In general, the market prices of bonds bear an inverse relationship to interest
rates; as interest rates increase, the prices of bonds decrease. The same
relationship may hold for high-yield bonds, but in the past high-yield bonds
have been somewhat less sensitive to interest rate changes than treasury and
investment grade bonds. While the price of high-yield bonds may not decline as
much, relatively, as the prices of treasury or investment grade bonds decline in
an environment of rising interest rates, the market price, or value, of a
high-yield bond will be expected to decrease in periods of increasing interest
rates, negatively impacting the net asset value of the High-Yield Bond
Portfolio. High-yield bond prices may not increase as much, relatively, as the
prices of treasury or investment grade bonds in periods of decreasing interest
rates. Payments of principal and interest on bonds are dependent upon the
issuer's ability to pay. Because of the generally lower creditworthiness of
issuers of high-yield bonds, changes in the economic environment generally, or
in an issuer's particular industry or business, may severely impact the ability
of the issuer to make principal and interest payments and may depress the price
of high-yield securities more significantly than such changes would impact
higher rated, investment grade securities.

PAYMENT EXPECTATIONS

Many high-yield bonds contain redemption or call provisions which might be
expected to be exercised in periods of decreasing interest rates. Should bonds
in which the High-Yield Bond Portfolio has invested be redeemed or called during
such an interest rate environment, the Portfolio would have to sell such
securities without reference to their investment merit and reinvest the proceeds
received in lower yielding securities, resulting in a decreased return for
investors in the High-Yield Bond Portfolio. In addition, such redemptions or
calls may reduce the High-Yield Bond Portfolio's asset base over which the
Portfolio's investment expenses may be spread.

LIQUIDITY AND VALUATION

Because of periods of relative illiquidity, many high-yield bonds may be thinly
traded. As a result, the ability to accurately value high-yield bonds and
determine the net asset value of the High-Yield Bond Portfolio, as well as the
Portfolio's ability to sell such securities, may be limited. Public perception
of and adverse publicity concerning high-yield securities may have a significant
negative impact on the value and liquidity of high-yield securities, even though
not based on fundamental investment analysis.

TAX CONSIDERATIONS

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come is not represented by cash, the Portfolio may be required to sell other
securities in order to satisfy the distribution requirements applicable to
regulated investment companies under the Internal Revenue Code of 1986 ("IRC").

PORTFOLIO COMPOSITION

As of March 31, 1998, the High-Yield Bond Portfolio consisted of securities
classified as follows:

<TABLE>
<CAPTION>
PERCENTAGE OF
CATEGORY PORTFOLIO
<S> <C>
BB................................. %
B.................................. %
CCC................................ %
Non-rated*......................... %
</TABLE>

- ---------------

* Equivalent ratings for these securities would have been CCC to BBB.

DEFENSIVE TACTICS

Any or all of the Portfolios may at times for defensive purposes, at the
determination of the Portfolio Manager, temporarily place all or a portion of
their assets in cash, short-term commercial paper (i.e. short-term unsecured
promissory notes issued by corporations to finance short-term credit needs),
United States Government Securities, high quality debt securities (including
"Eurodollar" and "Yankee Dollar" obligations, i.e., U.S. issuer borrowings
payable overseas in U.S. funds and obligations of foreign issuers payable in
U.S. funds), non-convertible preferred stocks and obligations of banks when in
the judgment of the Portfolio Manager such investments are appropriate in light
of economic or market conditions. The Money Market Portfolio may at times for
defensive purposes, at the determination of the Portfolio Manager, temporarily
place all or a portion of its assets in cash, when in the judgment of the
Portfolio Manager such an investment is appropriate in light of economic or
market conditions. The International Growth Portfolio may invest in all of the
above, both foreign and domestic, including foreign currency, foreign time
deposits, and foreign bank acceptances. When a Portfolio takes a defensive
position, it may not be following the fundamental investment policy of the
Portfolio.

HEDGING TRANSACTIONS

Except as otherwise indicated, the Portfolio Managers, other than for the Money
Market Portfolio, may engage in the following hedging transactions to seek to
hedge all or a portion of a Portfolio's assets against market value changes
resulting from changes in equity values, interest rates and currency
fluctuations. Hedging is a means of offsetting, or neutralizing, the price
movement of an investment by making another investment, the price of which
should tend to move in the opposite direction from the original investment.

The Portfolios will not engage in hedging transactions for speculative purposes
but only as a hedge against changes resulting from market conditions in the
values of securities owned or expected to be owned by the Portfolios. Unless
otherwise indicated, a Portfolio will not enter into a hedging transaction
(except for closing transactions) if, immediately thereafter, the sum of the
amount of the initial deposits and premiums on open contracts and options would
exceed 5% of the Portfolio's total assets taken at current value.

CERTAIN SECURITIES

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investment; provided, however, that the International Growth Portfolio, the
High-Yield Bond Portfolio, and the Government Securities Portfolio may invest up
to 20% of their net assets in such securities.

CALL OPTIONS

The Portfolios, other than the Money Market Portfolio, may write (sell) call
options that are listed on national securities exchanges or are available in the
over-the-counter market through primary broker-dealers. Call options are
short-term contracts with a duration of nine months or less. Such Portfolios of
the Fund may only write call options which are "covered," meaning that the
Portfolio either owns the underlying security or has an absolute and immediate
right to acquire that security, without additional cash consideration, upon
conversion or exchange of other securities currently held in the Portfolio. In
addition, no Portfolio will, prior to the expiration of a call option, permit
the call to become uncovered. If a Portfolio writes a call option, the purchaser
of the option has the right to buy (and the Portfolio has the obligation to
sell) the underlying security at the exercise price throughout the term of the
option. The amount paid to the Portfolio by the purchaser of the option is the
"premium." The Portfolio's obligation to deliver the underlying security against
payment of the exercise price would terminate either upon expiration of the
option or earlier if the Portfolio were to effect a "closing purchase
transaction" through the purchase of an equivalent option on an exchange. The
Portfolio would not be able to effect a closing purchase transaction after it
had received notice of exercise. The International Growth Portfolio may purchase
and write covered call options on foreign and U.S. securities and indices and
enter into related closing transactions.

Generally, such a Portfolio intends to write listed covered calls when it
anticipates that the rate of return from so doing is attractive, taking into
consideration the premium income to be received, the risks of a decline in
securities prices during the term of the option, the probability that closing
purchase transactions will be available if a sale of the securities is desired
prior to the exercise, or expiration of the options, and the cost of entering
into such transactions. A principal reason for writing calls on a securities
portfolio is to attempt to realize, through the receipt of premium income, a
greater return than would be earned on the securities alone. A covered call
writer such as a Portfolio, which owns the underlying security, has, in return
for the premium, given up the opportunity for profit from a price increase in
the underlying security above the exercise price, but it has retained the risk
of loss should the price of the security decline.

The writing of covered call options involves certain risks. A principal risk
arises because exchange and over-the-counter markets for options may be limited;
it is impossible to predict the amount of trading interest which may exist in
such options, and there can be no assurance that viable exchange and over-
the-counter markets will develop or continue. The Portfolios will write covered
call options only if there appears to be a liquid secondary market for such
options. If, however, an option is written and a liquid secondary market does
not exist, it may be impossible to effect a closing purchase transaction in the
option. In that event, the Portfolio may not be able to sell the underlying
security until the option expires or the option is exercised, even though it may
be advantageous to sell the underlying security before that time.

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PUTS

The Portfolios, except the Government Securities Portfolio and the Money Market
Portfolio, may purchase put options ("Puts") which relate to (i) securities
(whether or not they hold such securities); (ii) Index Options (described below
whether or not they hold such Options); or (iii) broadly-based stock indexes.
The Portfolios, except the Government Securities Portfolio and Money Market
Portfolio, may write covered put options. The Portfolio will receive premium
income from writing covered put options, although it may be required, when the
put is exercised, to purchase securities at higher prices than the current
market price. The High-Yield Bond Portfolio may invest up to 10% of the value of
the Portfolio in Puts.

ENTERING INTO FUTURES CONTRACTS

All Portfolios may, other than the Money Market Portfolio, enter into contracts
for the future acquisition or delivery of securities ("Futures Contracts")
including index contracts and foreign currencies, and may also purchase and sell
call options on Futures Contracts. These Portfolios may use this investment
technique to hedge against anticipated future adverse price changes which
otherwise might either adversely affect the value of the Portfolio's securities
or currencies held in the Portfolio, or to hedge anticipated future price
changes which adversely affect the prices of stocks, long-term bonds or
currencies which the Portfolio intends to purchase at a later date.
Alternatively, the Portfolios may enter into Futures Contracts in order to hedge
against a change in interest rates which will result in the premature call at
par value of certain securities which the Portfolio has purchased at a premium.
If stock, bond or currency prices or interest rates move in an unexpected
manner, the Portfolio would not achieve the anticipated benefits of Futures
Contracts.

The use of Futures Contracts involves special considerations or risks not
associated with the primary activities engaged in by any Portfolios. 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, currency prices and interest rates.

INDEX OPTIONS

All the Equity Portfolios may invest in options on stock indexes. These options
are based on indexes of stock prices that change in value according to the
market value of the stocks they include. Some stock index options are based on a
broad market index, such as the New York Stock Exchange Composite Index or the
Standard & Poor's 500. Other index options are based on a market segment or on
stocks in a single industry. Stock index options are traded primarily on
securities exchanges.

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<PAGE> 43

industry or market segment rather than changes in the price of a particular
security. Consequently, successful use of stock index options by a Portfolio
will depend on that Portfolio Manager's ability to predict movements in the
direction of the stock market generally or in a particular industry. This
requires different skills and techniques than predicting changes in the value of
individual securities.

INTEREST RATE SWAPS

In order to attempt to protect the Portfolio investments from interest rate
fluctuations, the Portfolios may engage in interest rate swaps. The Portfolios
tend to use interest rate swaps as a hedge and not as a speculative investment.
Interest rate swaps involve the exchange of the Portfolio with another party of
their respective rights to receive interest (e.g., an exchange of fixed rate
payments for floating rate payments). For example, if the Portfolio holds an
interest-paying security whose interest rate is reset once a year, it may swap
the right to receive interest at a rate that is reset daily. Such a swap
position would offset changes in the value of the underlying security because of
subsequent changes in interest rates. This would protect the Portfolio from a
decline in the value of the underlying security due to rising rates, but would
also limit its ability to benefit from falling interest rates.

The Portfolio will enter into interest rate swaps only on a net basis (i.e., the
two payments streams will be netted out, with Portfolio receiving or paying as
the case may be, only the net amount of the two payments). The net amount of the
excess, if any, of the Portfolio's obligations over its entitlements with
respect to each interest rate swap will be accrued on a daily basis, and an
amount of cash or liquid high grade debt securities having an aggregate net
asset value at least equal to the accrued excess, will be maintained in a
segregated account by the Portfolio's custodian bank.

The use of interest rate swaps involves investment techniques and risks
different from those associated with ordinary portfolio security transactions.
If the Portfolio Manager is incorrect in its forecasts of market values,
interest rates and other applicable factors, the investment performance of the
Portfolio will be less favorable than it would have been if this investment
technique were never used. Interest rate swaps do not involve the delivery of
securities or other underlying assets or principal. Thus, if the other party to
an interest rate swap defaults, the Portfolio's risk of loss consists of the net
amount of interest payments that the Portfolio is contractually entitled to
receive.

FOREIGN CURRENCY VALUES AND TRANSACTIONS

Investments in foreign securities will usually involve currencies of foreign
countries, and the value of the assets of the International Growth Portfolio
(and of the other Portfolios that may invest in foreign securities to a much
lesser extent) as measured in United States dollars may be affected favorably or
unfavorably by changes in foreign currency exchange rates and exchange control
regulations, and the International Growth Portfolio may incur costs in
connection with conversions between various currencies.

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return characteristics of the currencies and short-term interest rates when
those prices deviate significantly from fundamental value. Deviations from the
Benchmark are determined by the Portfolio Manager based upon its research.

To manage exposure to currency fluctuations, the Portfolio may alter equity or
money market exposures (in its normal asset allocation mix as previously
identified), enter into forward currency exchange contracts, buy or sell
options, futures or options on futures relating to foreign currencies and may
purchase securities indexed to currency baskets. The Portfolio will also use
these currency exchange techniques in the normal course of business to hedge
against adverse changes in exchange rates in connection with purchases and sales
of securities. Some of these strategies may require the Portfolio to set aside
liquid assets in a segregated custodial account to cover its obligations. These
techniques are further described below.

The Portfolio may conduct its foreign currency exchange transactions on a spot
(i.e., cash) basis at the spot rate prevailing in the foreign currency exchange
market or through entering into contracts to purchase or sell foreign currencies
at a future date (i.e., "forward foreign currency" contract or "forward"
contract). A forward contract involves an obligation to purchase or sell a
specific currency amount at a future date, which may be any fixed number of days
from the date of the contract, agreed upon by the parties, at a price set at the
time of the contract. The Portfolio will convert currency on a spot basis from
time to time and investors should be aware of the potential costs of currency
conversion.

When the Portfolio Manager believes that the currency of a particular country
may suffer a significant decline against the U.S. dollar or against another
currency, the Portfolio may enter into a currency contract to sell, for a fixed
amount of U.S. dollars or other appropriate currency, the amount of foreign
currency approximating the value of some or all of the Portfolio's securities
denominated in such foreign currency.

At the maturity of a forward contract, the Portfolio may either sell a portfolio
security and make delivery of the foreign currency, or it may retain the
security and terminate its contractual obligation to deliver the foreign
currency by repurchasing an "offsetting" contract with the same currency trader
obligating it to purchase, on the same maturity date, the same amount of the
foreign currency. The Portfolio may realize a gain or loss from currency
transactions.

The Portfolio also may purchase and write put and call options on foreign
currencies (traded on U.S. and foreign exchanges or over-the-counter markets) to
manage the Portfolio's exposure to changes in currency exchange rates. Call
options on foreign currency written by the Portfolio will be "covered", which
means that the Fund will own an equal amount of the underlying foreign currency.
With respect to put options on foreign currency written by the Portfolio, the
Portfolio will establish a segregated account with its custodian bank consisting
of cash, U.S. government securities or other high grade liquid debt securities
in an amount equal to the amount the Portfolio would be required to pay upon
exercise of the put.

CERTAIN OTHER SECURITIES

Except as otherwise indicated, the Portfolios may purchase the following
securities, the purchase of which involves certain risks described below. Unless

THE ENTERPRISE Group of Funds, Inc.

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<PAGE> 45

otherwise indicated, a Portfolio will not purchase a category of such securities
if the value of such category, taken at current value, would exceed 5% of the
Portfolio's total assets.

MASTER DEMAND NOTES

All Portfolios may purchase variable amount master demand notes. Variable amount
master demand notes are demand obligations that permit the investment of
fluctuating amounts at varying market rates of interest pursuant to arrangements
between the issuer and a commercial bank acting as agent for the payees of such
notes whereby both parties have the right to vary the amount of the outstanding
indebtedness on the notes. Since there is no secondary market for these notes,
the appropriate Portfolio Managers, subject to the overall review of the Fund's
Directors and Enterprise Capital Management, Inc., the adviser, monitor the
financial condition of the issuers to insure that they are able to repay the
notes.

REPURCHASE AGREEMENTS

All Portfolios may enter into repurchase agreements having maturities of one
business day. When a Portfolio acquires securities from a bank or broker-dealer,
it may simultaneously enter into a repurchase agreement with the same seller
pursuant to which the seller agrees at the time of sale to repurchase the
security at a mutually agreed upon time and price. In such instances, the Fund's
Custodian has possession of the security or collateral for the seller's
obligation. If the seller should default on its obligation to repurchase the
securities, the Portfolio may experience delays, difficulties or other costs
when selling the securities held as collateral and may incur a loss if the value
of the collateral declines. The appropriate Portfolio Managers, subject to the
overall review by the Fund's Directors and Enterprise Capital, monitor the value
of the collateral as to repurchase agreements, and they monitor the
creditworthiness of the seller and must find it satisfactory before engaging in
repurchase agreements. The Portfolios enter into repurchase agreements only with
Federal Reserve member banks that have net worth of at least $100,000,000 and
outstanding commercial paper of the two highest rating categories assigned by
Moody's or S&P or with broker-dealers that are registered with the Securities
and Exchange Commission, are members of the National Association of Securities
Dealers, Inc. ("NASD") and have similarly rated commercial paper outstanding.
Any repurchase agreements entered into by the Portfolios will be fully
collateralized and marked to market daily, other than those entered into by the
Money Market Portfolio, which are valued on an amortized cost basis.

RESTRICTED OR ILLIQUID SECURITIES

All of the Portfolios may invest up to 10% of the assets of the Portfolios in
restricted securities (privately placed equity or debt securities) or other
securities which are not readily marketable.

FOREIGN SECURITIES

As noted above, under normal circumstances the International Growth Portfolio
will invest primarily in foreign securities. All other Portfolios, except the
Government Securities Portfolio, the Tax-Exempt Income Portfolio and the Money
Market Portfolio, may, subject to the 20% limitation, invest in foreign
securities as well as both sponsored and unsponsored American Depository
Receipts ("ADRs"), and European Depository Receipts ("EDRs") which are
securities of U.S. issuers backed by securities of foreign issuers. There may be
less information available about

THE ENTERPRISE Group of Funds, Inc.

41
<PAGE> 46

unsponsored ADRs and EDRs, and therefore, they may carry higher credit risks.
The Portfolios may also invest in securities of foreign branches of domestic
banks and domestic branches of foreign banks.

Investments in foreign equity and debt securities involve risks different from
those encountered when investing in securities of domestic issuers. The
appropriate Portfolio Managers and Enterprise Capital, subject to the overall
review of the Fund's Directors, evaluate the risks and opportunities when
investing in foreign securities. Such risks include trade balances and
imbalances and related economic policies; currency exchange rate fluctuations;
foreign exchange control policies; expropriation or confiscatory taxation;
limitations on the removal of funds or other assets; political or social
instability; the diverse structure and liquidity of securities markets in
various countries and regions; policies of governments with respect to possible
nationalization of their own industries; and other specific local, political and
economic considerations.

FORWARD COMMITMENTS

Securities may be purchased on a "when issued" or on a "forward delivery" basis,
which means it may take as long as 120 days before such obligations are
delivered to a Portfolio. The purpose of such investments is to attempt to
obtain higher rates of return or lower purchase costs than would be available
for securities purchased for immediate delivery. Securities purchased on a when
issued or forward delivery basis involve a risk that the value of the security
to be purchased may decline prior to the settlement date. In addition, if the
dealer through which the trade is made fails to consummate the transaction, the
Portfolio may lose an advantageous yield or price. The Fund does not accrue
income prior to delivery of the securities in the case of forward commitment
purchases. The 5% limitation does not apply to the International Growth,
Government Securities and Tax-Exempt Income Portfolios which will have a 20%
limitation.

PORTFOLIO TURNOVER

In carrying out the investment policies described in this Prospectus, each
Portfolio expects to engage in a substantial number of securities portfolio
transactions, and the rate of portfolio turnover will not be a limiting factor
when a Portfolio Manager deems it appropriate to purchase or sell securities for
a Portfolio. However, no Portfolio's annual portfolio turnover rate (other than
the Money Market Portfolio for which, due to the short-term nature of its
investment, a portfolio turnover rate is not applicable and the High-Yield Board
Portfolio) is expected to exceed 100%.

A portfolio turnover rate is, in summary, the percentage computed by dividing
the lesser of a Portfolio's purchases or sales of securities by the average
investments of the Portfolio. High portfolio turnover involves correspondingly
greater brokerage commissions and other transaction costs which are borne
directly by a Portfolio. Each Portfolio intends to elect and to comply with the
various provisions of the IRC so as to qualify as a "regulated investment
company" thereunder. (See "Taxes".)

THE ENTERPRISE Group of Funds, Inc.

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<PAGE> 47

INVESTMENT
RESTRICTIONS

Except as indicated, each of the Portfolios has adopted certain investment
restrictions and limitations for the purpose of reducing their exposure in
specific situations.

No Portfolio will: (1) as to 75% of the assets of each Portfolio, invest more
than 5% of the value of its total assets in the securities of any single issuer
(other than cash items and U.S. government securities, as defined in the
Investment Company Act of 1940) if such purchase would cause more than 5% of the
value of its assets to be invested in the securities of such issuer; (2)
purchase more than 10% of the voting securities of any issuer; (3) invest more
than 5% of its total assets in the securities of companies that have a
continuous operating history of less than three years (the High-Yield Bond and
Tax-Exempt Income Portfolios are not subject to this restriction); (4) except as
to the Money Market Portfolio, as described below, invest more than 25% of its
total assets in any one industry, provided that: (i) this limitation does not
apply to investments in U.S. Government Securities as well as its agencies and
instrumentalities, general obligation bonds, or Municipal Securities other than
industrial development bonds issued by non-governmental users; and (ii) utility
companies will be divided according to their services (for example, gas, gas
transmission, electric, electric and gas, and telephone will each be considered
as a separate industry); (5) borrow money, except from a bank and only for
temporary or emergency purposes, and such borrowings will not exceed 5% of the
lower of the value or cost of the Portfolio's total assets; or (6) pledge,
mortgage or hypothecate its assets to an extent greater than 5% of the value of
its total assets. For purposes of restrictions (1) and (2), each Portfolio will
regard the entity which has ultimate responsibility for the payment of interest
and principal as the issuer. Notwithstanding restriction (4), the Money Market
Portfolio may invest in excess of 25% of its total assets in U.S. Government
Securities as well as its agencies and instrumentalities, and certain bank
instruments issued by domestic banks. See "Investment Restrictions" in the
Statement of Additional Information.

These investment limitations, and other limitations that are fundamental
policies, that are described in greater detail in the Statement of Additional
Information, may be changed only with the approval of the holders of a majority
of the shares of a Portfolio.

In addition, management of the Fund has adopted the following restrictions which
apply to all of the Portfolios and may be changed only by the Board of Directors
of the Fund. No Portfolio will: (A) lend its assets to any person or individual,
except by the purchase of bonds or other debt obligations customarily sold to
institutional investors; (B) invest more than 5% of the value of its net assets,
valued at the lower of cost or market, in warrants (Included within that amount,
but not to exceed 2% of the value of the Portfolio's net assets, may be warrants
which are not listed on the New York or American Stock Exchange. Warrants
acquired by a Portfolio in units or attached to securities may be deemed to be
without value.), (C) invest in oil, gas, or other mineral leases, or (D) engage
in arbitrage transactions.

If a percentage restriction is adhered to at the time of an investment, a later
increase or decrease in the investment's percentage of the value of a
Portfolio's total assets resulting from a change in portfolio value

THE ENTERPRISE Group of Funds, Inc.

43
<PAGE> 48

or assets will not constitute a violation of the percentage restrictions.

The Managed Portfolio will not invest more than 15% of the value of its total
assets in real estate investment trusts, commonly referred to as "REITS". The
Managed Portfolio will not invest more than 5% of the value of its total assets
in high-yield securities.

In order to qualify for federal income tax treatment as a regulated investment
company for a taxable year, each Portfolio must, among other things, (a) derive
at least 90% of its gross income during such taxable year from qualifying income
(i.e., dividends, interest, payments with respect to loans of stock and
securities, and gains from the sale or other disposition of stock or securities
or options thereon); (b) diversify its holdings so that, at the end of each
fiscal quarter of such taxable year, (i) at least 50% of the market value of its
total assets is represented by cash, cash items, U.S. Government Securities,
securities of other regulated investment companies, and other securities
limited, in the case of other securities for purposes of this calculation, in
respect of any one issuer, to an amount not greater than 5% of the value of its
total assets or 10% of the voting securities of the issuer, and (ii) not more
than 25% of the value of its assets is invested in the securities of any one
issuer (other than U.S. Government Securities).

HOW TO PURCHASE
PORTFOLIO SHARES

Enterprise Fund Distributors, Inc. ("the Distributor"), is the principal
underwriter for shares of the Fund. The Distributor, whose address is Atlanta
Financial Center, 3343 Peachtree Road, N.E., Suite 450, Atlanta, Georgia 30326,
is a subsidiary of Enterprise Capital Management, Inc. Purchases can be made
through most investment dealers who, as part of the service they provide, must
transmit orders promptly. The Funds offer four separate Classes of shares: Class
A, B, C and Y shares, each with a different combination of sales charges,
ongoing fees and other features. The offering of Class A, B, C and Y shares
presents the investor with the opportunity to choose the sales charge and
distribution fee arrangement which is most beneficial, depending on the amount
of purchase, the length of time the investor expects to hold the shares, and
other circumstances.

Each class of shares of a Portfolio represent an identical interest in the
investment portfolio of that Portfolio and has the same rights, except that (i)
the Class A, B and C shares bear the expenses related to distribution and
servicing of such shares, (ii) the Class A, B and C shares have exclusive voting
rights with respect to matters related to distribution and servicing
expenditures, and (iii) and only Class B shares have a conversion feature. The
Classes also have separate exchange privileges. (See "How to Exchange Shares
Among the Portfolios.") The income attributable to each class and the dividends
payable on the shares of each class will be reduced by the amount of the
distribution fee or service fee, if any, payable by that class. The distribution
related fees paid with respect to any Class will not be used to finance the
distribution expenditures of another Class. Sales personnel may receive
different compensation for selling different Classes of shares.

The following table sets forth a summary of the distribution arrangements for
Class A, B and C shares

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44
<PAGE> 49

of a Portfolio. A more detailed description of Class A, B and C is set forth
below.

<TABLE>
<CAPTION>
ANNUAL 12B-1
DISTRIBUTION OTHER
SALES CHARGE AND SERVICE FEE INFORMATION
------------ --------------- -----------
<S> <C> <C> <C>
Class
A...... Maximum 4.75% 0.45% Initial sales
initial sales distribution charge may be
charge (except fee (except waived or
Money Market) Money Market) reduced in
certain
circumstances.
$1 million
purchases,
pursuant to
waiver of
sales charge,
are subject to
a CDSC if
redeemed
within two
years.
Class
B...... CDSC for a 0.75% Shares convert
period of six distribution to Class A
years equal to fee and 0.25% Shares
5.00% during service fee approximately
the first year (except Money eight years
and declining Market) after
to 0.00% after purchase.
the sixth Available only
year. to investors
purchasing
less than
$250,000 in
the aggregate.
Class
C...... CDSC for a 0.75% Available only
period of one distribution to investors
year equal to fee and 0.25% purchasing
1.00% service fee less than
(except Money $1,000,000 in
Market) the aggregate.
</TABLE>

In deciding which Class of shares to purchase, you should consider, investment
goals, present and anticipated, purchase amounts, time horizons and
temperaments. In addition, consideration should be given to: (1) the length of
time you expect to hold your shares, (2) the amount of any applicable sales
charge (whether imposed at the time of purchase or upon redemption), (3) whether
you qualify for the reduction or waiver of any applicable sales charge, (4) the
various exchange privileges among different classes of shares and (5) the fact
that Class B shares automatically convert to Class A shares approximately eight
years after purchase. In addition, you should review certain eligibility
requirements that may apply to purchasing a particular class of shares. (See,
"Buying Class A Shares," "Buying Class B Shares" and "Buying Class C Shares"
below.)

Initial investments per Class per Portfolio are subject to a minimum of $1,000,
with subsequent investments made in amounts of $50 or more through the Fund's
Transfer Agent or through dealers, subject to the following exceptions: (a) a
lower initial minimum of $250 is accepted in connection with the Retirement
Plans, with a minimum subsequent investment of $25; and (b) a lower initial
minimum of $100 is accepted in connection with the Automatic Bank Draft Plan,
with a minimum $25 for subsequent investments.

All purchases made by check should be in U.S. dollars and made payable to The
Enterprise Group of Funds, Inc., or in the case of a retirement account, the
custodian or trustee. Third party checks will not be accepted. When purchases
are made by check or periodic account investment, redemptions will not be
allowed until the investment being redeemed has been in the account for
calendar days.

For accounts with balances under $1,000 as of July 31, an annual service charge
of $25 per account registration per Portfolio will apply, excluding Automatic
Bank Draft Plan Accounts, Automatic Investment Plan Accounts, Retirement
Accounts and Savings Plan Accounts.

From time to time, the Fund temporarily may suspend the offering of shares of
one or more of its Classes or Portfolios to new investors. During the period of
such suspension, persons who are already shareholders of any such Class or
Portfolio normally will be permitted to continue to purchase additional shares
and to have dividends reinvested.

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45
<PAGE> 50

Portfolio shares are purchased at the net asset value (plus, with the exception
of the Money Market Portfolio Class A Shares, the applicable sales charge) next
determined after the application for purchase of shares is received by the
Enterprise Shareholder Services Division of the Fund's Transfer Agent, National
Financial Data Services, Inc. (the "Transfer Agent"). The Distributor or the
Fund may reject any orders.

During the period from November 3, 1991 through December 31, 1997, the
Distributor reallowed the full applicable sales charge to certain broker/dealers
with respect to the sale of shares of the Growth and Income Portfolio, Equity
Portfolio, and Small Company Growth Portfolio of the Fund.

BUYING CLASS A. Class A Portfolio shares are offered to the public at the net
asset value next computed after receipt of the purchase order plus a maximum
sales charge as to all Portfolios, other than the Money Market Portfolio Class A
Shares, which carries no sales charge, of 4.75% of the offering price (4.99% of
the amount invested) on a single purchase of up to $100,000. The sales charge is
reduced on single purchases of $100,000 or more pursuant to the following table:

<TABLE>
<CAPTION>
DEALER
SALES CHARGE DISCOUNT
SALES CHARGE AS A OR AGENCY
AS A PERCENTAGE OF FEE AS A
PERCENTAGE OF AMOUNT PERCENTAGE OF
OFFERING PRICE INVESTED OFFERING PRICE*
-------------- ------------- ---------------
<S> <C> <C> <C>
Up to $99,999............... 4.75% 4.99% 4.00%
$100,000 up to $249,999..... 3.75% 3.90% 3.00%
$250,000 up to $499,999..... 2.50% 2.56% 2.00%
$500,000 up to $999,999..... 2.00% 2.04% 1.50%
$1,000,000 and up........... None None See Below
</TABLE>

- ---------------
* From time to time upon written notice to all of its dealers, the Distributor
may hold special promotions for specified periods during which the Distributor
may reallow dealer up to the full sales charges shown above. During such
periods, dealers may be deemed to have certain additional responsibilities
under the securities laws. In addition, the Distributor may sponsor sales
contests and provide to all qualifying dealers, from its own profits and
resources, additional compensation in the form of trips or merchandise.

Purchases of $1 million or more of Class A shares have no initial sales charge
but are subject to a contingent deferred sales charge ("CDSC") if held for less
than two years. The Distributor will pay authorized dealers an amount equal to
1% of the first $4.99 million of such purchases, plus .75 of 1% of amounts from
$5-19.99 million, plus .50 of 1% of amounts in excess of $20 million. A CDSC of
1% will be imposed on the proceeds of the redemption of shares if they are
redeemed within 24 months of the end of the calendar month of their purchase, in
an amount of the lesser of (A) the net asset value of shares at the time of
purchase or (B) the net value of the shares at the time of redemption. The CDSC
will be deducted from the redemption proceeds otherwise payable to the
shareholder and will be retained by the Distributor.

In determining the amount of purchase of Class A shares, the aggregate dollars
being invested in all Portfolios excluding all dollars that have never been
subject to a sales charge at one time or pursuant to a Letter of Intent by the
investor, are aggregated to determine the applicable sales charge.

No sales charge applies to the reinvestment of dividends or capital gains
distributions, except for dividends earned on the Money Market Portfolio and
subsequently invested in a Portfolio other than the Money Market Portfolio.

No sales charge applies to purchases of Class A shares by any of the following:
(a) selling brokers, their employees and their registered representatives; (b)
employees, clients or direct referrals of any Portfolio Manager or of Evaluation
Associates, Inc. ("EAI"); (c) directors, former directors, employees or retirees
of the Fund or of The Mutual Life Insurance Company of New York ("MONY") and its

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46
<PAGE> 51

subsidiaries; (d) immediate family and employee benefit plans of any of the
foregoing; (e) certain employee benefit plans qualified under Sections 401 and
403 of the IRC, including salary reduction plans qualified under Section 401(k)
of IRC and certain payroll deduction plans, subject to minimum requirements with
respect to number of participants or plan assets which may be established by the
Distributor; (f) MONY and its subsidiaries; (g) clients of fee-based financial
planners; and (h) financial institutions and financial institutions' trust
departments for funds over which they exercise exclusive discretionary
investment authority and which are held in fiduciary, agency, advisory,
custodial or similar capacity.

In addition, members of certain associations, fraternal groups, franchise
organizations and unions may enter into an agreement with the distributor which
allows members to purchase shares of the Fund Class A shares at a sales load
equal to 75% of the percentages in the above table, subject to minimum
requirements, with respect to number of participants or plan assets which may be
established by the Distributor. The Dealer Discount will also be adjusted in
like manner.

An investor seeking a reduction in sales charge with respect to a waiver of
sales charge by reason of being a member of the above-described groups, must
describe the basis for the requested reduction or waiver in documents
accompanying any new investment. The Fund may terminate, or amend the terms of,
offering shares of the Fund at net asset value or at a reduced sales charge at
any time.

BUYING CLASS B SHARES. Purchases of Class B shares will be processed at the net
asset value next determined after receipt of your purchase order for less than
$250,000. While not subject to a front-end sales charge, Class B shares may be
subject to a CDSC upon redemption. If Class B shares of any Fund are redeemed
within six years after the date on which a purchase order for Class B shares was
accepted, a CDSC will be imposed by applying the appropriate percentage
indicated below to the lesser of: (1) the net asset value of such shares at the
time of purchase or (2) the net asset value of such shares at the time of
redemption. The CDSC will be deducted from the redemption proceeds otherwise
payable to the shareholder and will be retained by the Distributor. The CDSC to
be imposed on such share redemptions will be assessed according to the following
schedule:

<TABLE>
<CAPTION>
YEARS SINCE PURCHASE ORDER OF LESS APPLICABLE CLASS B
THAN $250,000 WAS ACCEPTED CONTINGENT DEFERRED SALES CHARGE
- ---------------------------------- --------------------------------
<S> <C>
Up to one year.................. 5.00%
One year or more but less than 2
years......................... 4.00%
Two years or more but less than 3
years......................... 4.00%
Three years or more but less than
4 years....................... 3.00%
Four years or more but less than 5
years......................... 2.00%
Five years or more but less than 6
years......................... 1.00%
Six or more years............... None
</TABLE>

CONVERSION OF CLASS B SHARES. Class B shares will automatically convert to
Class A shares of the same Portfolio eight years after the end of the calendar
month in which the purchase order for Class B shares was accepted, on the basis
of the relative net asset values of the two classes and subject to the following
terms: Class B shares acquired through the reinvestment of dividends and
distributions ("reinvested Class B shares") will be converted to Class A shares
on a prorata basis only when Class B shares not acquired through reinvestment of
dividends or distributions ("purchased Class B shares") are converted. The
portion of reinvested Class B shares to be converted will be determined by the
ratio that the purchased Class B shares eligible for conversion bear to the
total amount of purchased Class B shares eligible

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47
<PAGE> 52

in the shareholder's account. For the purposes of calculating the holding
period, Class B shares will be deemed to have been issued on the sooner of: (a)
the date on which the issuance of Class B shares occurred, or (b) for Class B
shares obtained by an exchange or series of exchanges, the date on which the
issuance of the original Class B shares occurred. This conversion to Class A
shares will relieve Class B shares that have been outstanding for at least eight
years (a period of time sufficient for the Distributor to have been compensated
for distribution expenses related to such Class B shares) from the higher
ongoing distribution fee paid by Class B shares. Only Class B shares have this
conversion feature. Conversion of Class B shares to Class A shares is contingent
on the continuing availability of a private letter revenue ruling from the
Internal Revenue Service affirming that such conversion does not constitute a
taxable event for the shareholder under the IRC. If such revenue ruling or an
opinion of counsel is no longer available, conversion of Class B shares to Class
A shares would have to be suspended, and Class B shares would continue to be
subject to the Class B distribution fee until redeemed.

BUYING CLASS C SHARES. Class C shares are sold at net asset value per share
without an initial sales charge. However, if Class C shares are redeemed within
12 months of their purchase, a contingent deferred sales charge of 1.00% will be
deducted from the redemption proceeds. That sales charge will not apply to
shares purchased by the reinvestment of dividends or capital gains
distributions. The charge will be assessed on the lesser of the net asset value
of the shares at the time of redemption or the original purchase price. The
contingent deferred sales charge is not imposed on the amount of your account
value represented by the increase in net asset value over the initial purchase
price (including increased due to the reinvestment of dividends and capital
gains distributions). The Class C contingent deferred sales charge is paid to
the Distributor to reimburse its expenses of providing distribution-related
services to the Fund in connection with the sale of Class C shares.

To determine whether the contingent deferred sales charge applies to a
redemption, the Fund redeems shares in the following order: (1) shares acquired
by reinvestment of dividends and capital gains distributions, (2) shares held
for over 12 months, and (3) shares held the longest during the 12 month period.

REINVESTMENT PRIVILEGE. A shareholder of the Fund who redeems Shares and incurs
a contingent deferred sales charge ("CDSC") may utilize a one-time privilege to
reinvest up to the full amount redeemed at net asset value at the time of the
reinvestment in shares of the same Class of the Fund within 180 days of
redemption. The amount of any CDSC also will be reinvested. The reinvested
shares will retain their original cost and purchase date for the purposes of the
CDSC. The return of such CDSC may affect determination of gain or loss or the
original transaction for federal income tax purposes. The reinvestment privilege
may be terminated or modified at any time.

EXEMPTIONS FROM CLASS A, B AND C CDSC. No CDSC will be imposed when a
shareholder redeems Class A, B or C shares in the following instances: (a)
shares or amounts representing increases in the value of an account above the
net cost of the investment due to increases in the net asset value per share;
(b) shares acquired through reinvestment of income dividends or capital gains
distributions; (c) shares acquired by exchange from any Enterprise Portfolio,

THE ENTERPRISE Group of Funds, Inc.

48
<PAGE> 53

other than the Class A Money Market Fund where the exchanged shares would not
have been subject to a CDSC upon redemption; and (d) Class A shares purchased in
the amount of $1 million or more if held for more than twenty-four (24) months,
Class B shares held for more than six years and Class C shares held for more
than one year.

The CDSC does not apply to purchases of Class A shares at net asset value
described under "Net Asset Value Purchases" above and will be waived in the case
of redemptions of Class A, B or C shares in connection with (i) distributions to
participants or beneficiaries of plans qualified under Section 401(a) of the IRC
or from custodial accounts under the IRC Section 403(b)(7), individual
retirement accounts under the IRC Section 408(a), deferred compensation plans
under the IRC section 457 and other employee benefit plans ("plans"), and
returns of excess contributions made to these plans, (ii) withdrawals under an
automatic withdrawal plan where the annual withdrawal does not exceed 10% of the
value of the account (only for Class B shares); and (iii) liquidation of a
shareholder's account if the aggregate net asset value of shares held in the
account is less than the required minimum. A shareholder will be credited with
any CDSC paid in connection with the redemption of any Class A, B shares if
within 180 days after such redemption, the proceeds are invested in the same
Class of shares in the same and/or another Enterprise Portfolio.

In determining whether the Class A, B or C CDSC is payable, it will be assumed
that shares are not subject to a CDSC are redeemed first and that other shares
are then redeemed in the order purchased. No CDSC will be imposed on exchanges
to purchase shares of another Enterprise Portfolio although a CDSC will be
imposed on shares of the acquired Enterprise Portfolio purchased by exchange of
shares subject to a CDSC. The imposition of an assessment of a CDSC will occur
as of the date of the initial investment.

SPECIAL FIDUCIARY RELATIONSHIPS. The CDSC will not apply with respect to
purchase of Class A shares for which the selling dealer is not permitted to
receive a sales load or redemption fee imposed on a shareholder with whom such
dealer has a fiduciary relationship in accordance with provisions of the
Employee Retirement Income Security Act and regulations thereunder. If such
dealer agrees to the reimbursement provision described below, no sales charge
will be imposed on sales of $1,000,000 or more and the Distributor will pay to
the selling dealer a commission described above in "How to Buy Class A Shares."

For the period of 13 months from the date of the sales referred to in the above
paragraph, the distribution fee payable by a Fund to the Distributor pursuant to
the Fund's Distribution Plan in connection with such shares will be retained by
the Distributor. In the event of a redemption of any such shares within 24
months of purchase, the selling dealer will reimburse the Distributor for the
amount of commission paid less the amount of the distribution fee with respect
to such shares.

OTHER DEALER COMPENSATION. The Distributor will provide additional compensation
to dealers in connection with sales of shares of the Funds and other mutual
funds distributed by the Distributor ("Enterprise Distributors") including
promotional gifts (which may include gift certificates, dinners and other
items), financial assistance to dealers in connection with conferences, sales or
training programs for their employees, seminars for the public and advertising
campaigns. In some instances, these incentives may be

THE ENTERPRISE Group of Funds, Inc.

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made available only to dealers whose representatives have sold or are expected
to sell significant amounts of shares.

How the Net Asset Value is Computed. The net asset value per share for each
Class of each Portfolio of the Fund is determined by dividing the total value of
the Portfolio's investments and other assets, less any liabilities, by the total
number of outstanding shares of the Portfolio for each Class. Net asset value
per share is determined at the close of trading on each day the New York Stock
Exchange is open for trading except that net asset value per share of the
International Growth Portfolio may not, in certain circumstances, be determined
on days when the New York Stock Exchange is open for trading but one or more
foreign stock exchanges are not open for trading. The net asset value per share
is effective as of the time of computation. In determining net asset value, the
price carried by the composite tape of all national exchanges is used.

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. Domestic equity
securities, for which market quotations are not readily available, and other
assets 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. The Securities and Exchange Commission's rules relating to the amortized
cost method involve valuing a security at its cost and amortizing any discount
or premium over the period until maturity, without taking into account the
impact of fluctuating interest rates on the market value of the security unless
the deviation from net asset value as calculated by using available market
quotations exceeds 1/2 of 1%. At that point, the Board of Directors will
promptly decide what action, if any, will be initiated. The Money Market
Portfolio seeks to maintain a constant net asset value of $1.00 but there can be
no assurance that the Money Market Portfolio will be able to maintain a stable
net asset value. The Money Market Portfolio will not maintain a dollar weighted
average portfolio maturity which exceeds 90 days.

Although the legal rights of each class of shares are substantially identical,
the different expenses borne by each class will result in different net asset
values and dividends for each class. It is expected, however, that the net asset
values of the three classes will tend to converge immediately after the
recording of dividends, which will differ by approximately the amount of the
distribution and service related expense accrual differential among the classes.

Share Certificates. The Fund does not ordinarily issue certificates
representing shares of the Portfolios. Instead, shares are held on deposit for
shareholders by the Fund's Transfer Agent, which sends a statement of shares
owned in each Portfolio to shareholders following each transaction in the
shareholder's account. Certificates for full shares only (other than the Money
Market Portfolio) are available at no charge at any time upon written request to
the Transfer Agent. Special shareholder services such as telephone redemptions,
exchanges, electronic funds transfers and wire orders are not available as to
certificated shares.

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SHAREHOLDER
SERVICES

For the convenience of investors, the following plans are available:

AUTOMATIC REINVESTMENT PLAN

Dividends and capital gains distributions may be automatically reinvested in the
same Class of shares or, at the investor's election, may be paid out in cash. No
sales charge is applied upon reinvestment of dividends or capital gains. This
does not apply to Money Market Portfolio dividends invested in another
Portfolio.

AUTOMATIC BANK DRAFT PLAN

An investor's bank account may be debited monthly for automatic investment into
one or more of the Portfolios for each Class.

AUTOMATIC INVESTMENT PLAN

An investor may debit any Portfolio Account of a Class on a monthly basis for
automatic investments into one or more of the other Portfolios of the same
Class. The Portfolio from which the investment will be made is subject to the
$1,000 minimum. The investor may then choose to have $50 or more transferred to
either an established Enterprise portfolio, or they may open a new account
subject to an initial minimum investment of $100.

LETTER OF INTENT INVESTMENTS

Any investor may execute a Letter of Intent covering purchases of Class A shares
of $100,000 or more, at the public offering price, of Fund shares to be made
within a period of 13 months. A reduced sales charge will be applicable to the
total dollar amount purchased in the 13-month period provided at least $100,000
is purchased. The minimum initial investment under a Letter of Intent is 5% of
the amount indicated in the Letter of Intent. Class A shares purchased with the
first 5% of such amount will be held in escrow (while remaining registered in
the name of the investor) to secure payment of the higher sales charge
applicable to the shares actually purchased if the full amount indicated is not
purchased, and such escrowed shares will be involuntarily redeemed to pay the
additional sales charge, if necessary. When the full amount indicated has been
purchased, the escrow will be released. Class A investors wishing to enter into
a Letter of Intent in conjunction with their investment in shares of the
Portfolios should complete the appropriate portion of the new account
application.

RIGHT OF ACCUMULATION DISCOUNT

Investors who make an additional purchase of Class A shares of the Fund which,
when combined with the value of their existing aggregate holdings of Class A
shares of the Portfolios of the Fund, each calculated at the then applicable net
asset value per share, at the time of the additional purchase, equals $100,000
or more, will be entitled to the reduced sales charge shown under "How to
Purchase Portfolio Shares" above on the full amount of each additional purchase.
For purposes of determining the discount, holdings of Fund shares of the
investor's spouse, immediate family or accounts controlled by the investor
whether as a single investor or trustee of a plan will be aggregated upon
notification of applicable accounts from the investor.

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CHECK WRITING

Investors in the Money Market Portfolio Class A Shares with opening balances in
excess of $5,000 may redeem shares by check (a Redemption Check), as described
under "Redemptions" below.

BANK PURCHASE AND REDEMPTION PLAN

Any investor may initiate an ACH (Automatic Clearing House) Purchase or
Redemption directly to a bank account when proper instructions have been
established on the account.

SYSTEMATIC WITHDRAWAL PLAN

The owner of $5,000 or more of a class of a Portfolio's shares at the offering
price (net asset value plus, in the case of Class A shares, the initial sales
charge) may provide for the payment from the owner's account of any requested
dollar amount to be paid to the owner or a designated payee monthly, quarterly,
semiannually or annually. The payee may include a life insurance company,
including The Mutual Life Insurance Company of New York, the parent of
Enterprise Capital. The $5,000 minimum account size is not applicable to
Individual Retirement Accounts. The minimum periodic payment is $100. The
maximum annual rate at which Class B shares may be redeemed under a systematic
withdrawal plan is 10% of the net asset value of the account. Shares are
redeemed on the fifteenth day of the month or the preceding business day if the
fifteenth is a Saturday or Sunday. Any income or capital gain dividends will be
automatically reinvested at net asset value. A sufficient number of full and
fractional shares will be redeemed to make the designated payment. Depending
upon the size of the payments requested and fluctuations in the net asset value
of the shares redeemed, redemptions for the purpose of making such payments may
reduce or even exhaust the account.

The purchase of Class A shares while participating in a systematic withdrawal
plan will ordinarily be disadvantageous to the investor because the investor is
redeeming shares upon which a sales charge may have already been paid.
Therefore, a Fund will not knowingly permit additional investments of less than
$2,000 if the investor is at the same time making systematic withdrawals.
Enterprise will waive the contingent deferred sales charge on redemptions of
Class B and C shares made pursuant to a systematic withdrawal plan. The right is
reserved to amend the systematic withdrawal plan on 30 days' notice. The plan
may be terminated at any time by the investor or the Funds.

RETIREMENT PLANS

Shareholders may adopt Profit Sharing Plan, Money Purchase Plan, IRA and other
retirement plans funded by Portfolio shares and other investment which plans
have been approved by the Internal Revenue Service.

The costs of these plans (exclusive of the retirement plans on which a $10
annual custodial fee is charged) are paid by the Distributor, except for the
normal cost of issuing shares, which is paid by the Portfolios of the Fund.
Additional information concerning these plans is available from the Distributor
upon request.

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HOW TO EXCHANGE
SHARES AMONG THE
PORTFOLIOS

An exchange represents the sales of shares of one fund and the purchase of
shares of another, which may produce a gain or loss for tax purposes.

Shares of a Portfolio which are not subject to a CDSC exchange will be processed
at the net asset value next determined after the Transfer Agent receives your
exchange request. Shares of a Portfolio which are subject to a CDSC will be
exchangeable on the basis of the relative net asset value per share without
payment of any CDSC which might otherwise be due upon redemption of the shares
of the Portfolio. For purposes of computing the CDSC that may be payable upon a
disposition of the shares acquired in the exchange, the holding period for the
previously owned shares of the Portfolio is "tacked" to the holding period for
the newly acquired shares of the other Enterprise Portfolio. The exchange
feature may be modified or discontinued at any time, upon notice to shareholders
in accordance with applicable rules adopted by the Securities and Exchange
Commission ("SEC"). Your exchange may be processed only if the shares of the
Portfolio to be acquired are eligible for sale in your state and if the exchange
privilege may be legally offered in your state.

EXCHANGES OF CLASS A SHARES. You may exchange your Class A shares for Class A
shares of any other Enterprise Portfolio. Class A shares of any Enterprise
Portfolio cannot be exchanged for Class B, C or Y shares of any other Enterprise
Portfolio.

EXCHANGES OF CLASS B SHARES. Class B shares of all Enterprise Portfolios are
exchangeable for Class B shares of any other Enterprise Portfolio. Class B
shares of any Enterprise Portfolio cannot be exchanged for Class A, C or Y
shares of any other Enterprise Portfolio.

EXCHANGE OF CLASS C SHARES. Class C shares of all Enterprise Portfolios are
exchangeable for Class C shares of any other Enterprise Portfolio. Class C
shares of any Enterprise Portfolio cannot be exchanged for Class A, B or Y
shares of any other Enterprise Portfolio.

Exchanges may be directed by:

1. calling: Enterprise Shareholder Services
1-800-368-3527

2. writing: Enterprise Shareholder Services
P.O. Box 419731
Kansas City, MO 64141-6731

The minimum initial investment rules applicable to a Portfolio apply to any
exchange where the exchange results in a new account being opened in such
Portfolio. Exchanges into existing accounts are not subject to a minimum amount.
Original investments in the Money Market Portfolio which are transferred to
other Portfolios are not considered Portfolio exchanges but purchases.

To exchange by letter, state the name of the Portfolio you are exchanging from,
the account name(s) and address, the account number, the dollar amount or number
of shares to be exchanged, and the Portfolio into which you are exchanging. Sign
your name(s) exactly as it appears on your account statement.

The Fund reserves the right not to allow the exercise of the exchange privilege
in less than two-week intervals. The Fund reserves the right to restrict the
exchange from any Portfolio until funds have been held in that Portfolio for at
least seven days. The Fund further reserves the right to discontinue or modify
the

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53
<PAGE> 58

exchange privilege on a prospective basis at any time, including a modification
of the amount or terms of a service fee.

In addition, with regard to exchange requests made by market timers on behalf of
clients, the Fund reserves the right to delay settlement up to seven days if it
is determined by the Portfolio Manager that immediate settlement would harm the
Portfolio. Before engaging in an exchange transaction, a shareholder should read
carefully the parts of this Prospectus describing the Portfolio into which the
exchange will occur. See "Investment Objectives and Policies of the Portfolios."
Shareholders must elect to authorize the Fund's transfer agent to act upon
telephone exchange requests. Shareholders are subject to risk should they elect
to exchange by telephone in that neither the Fund nor the Transfer Agent will be
liable for properly acting upon telephone instructions believed to be genuine.
The Fund employs reasonable procedures to confirm that instructions communicated
by telephone are genuine, and should the Fund or its transfer agent fail to
institute such procedures, the Fund may be liable for any losses due to
unauthorized or fraudulent instructions. Telephone exchanges are activated by
instructions received from a shareholder or any person claiming to act as the
shareholder's representative who can provide the Transfer Agent with account
registration information.

Exchanges are taxable as redemptions on which gains or losses may be recognized.

HOW TO REDEEM
PORTFOLIO SHARES

Any shareholder may require the Fund to redeem his or her shares in any
Portfolio. The redemption price will be the net asset value per share next
determined after receipt of all required information.

REDEMPTIONS

Redemptions may be made: (1) by telephone; (2) in writing; (3) by wire, if the
appropriate request forms have been submitted; or (4) as to the Class A Money
Market Portfolio, by check writing. Payment for shares redeemed will be made
within seven days after the request has been properly made and received. Shares
purchased by check may be redeemed once the check has cleared, which may take up
to 10 days.

TELEPHONE REDEMPTIONS

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54
<PAGE> 59

information must be established on the account before this type of redemption is
initiated. Shareholders are subject to risk should they elect to redeem by
telephone in that neither the Fund nor the Transfer Agent will be liable for
properly acting upon telephone instructions believed to be genuine. Should the
Fund or its transfer agent fail to utilize reasonable procedures, the Fund may
be liable for any losses due to unauthorized or fraudulent instructions.

WRITTEN REDEMPTIONS

Redemption requests may be made in writing, accompanied by any issued share
certificates, to:

Enterprise Shareholder Services
P.O. Box 419731
Kansas City, MO 64141-6731

Such written redemption requests and any share certificates or a stock power
must be endorsed by the investor. A signature guarantee is required if the
redemption proceeds exceed $50,000 or the proceeds are to be sent to an address
other than the address of record or to a person other than the registered
holder. A signature guarantee may be secured from a member firm of a domestic
securities exchange or by a commercial bank, savings and loan association,
credit union or trust company. Further documentation may be requested, and a
signature guarantee is always required, from corporations, executors,
administrators, trustees or guardians.

WIRE REDEMPTIONS

For a separate $10 charge, redemptions for a maximum of $250,000 will be wired
at your request. On written requests, funds may be wired to any bank. On a
telephone request, funds may be wired only to the bank previously designated by
you in writing. If a shareholder has given authorization for expedited wire
redemption, shares can be redeemed and the proceeds sent by federal wire
transfer to a single, previously designated bank account. Requests received
prior to 4:00 p.m. (New York time) by the Fund's Transfer Agent, will result in
shares being redeemed at the next determined net asset value, and the proceeds
normally will be sent to the designated bank account the following business day.
Delivery of the proceeds of a wire redemption request may be delayed by the Fund
for up to seven days if the Fund deems it appropriate under the then current
market conditions. Once authorization is on file, the Transfer Agent will honor
requests by any authorized person at 1-800-368-3527. This privilege may not be
used to redeem shares in certificated form. To change the name of the single
designated bank account to receive wire redemption proceeds, it is necessary to
send a written request with signature(s) guaranteed to the Transfer Agent.

CHECK WRITING

A check redemption feature is available on the Money Market Portfolio Class A
shares in accounts with opening balances of more than $5,000. Redemption Checks
may be made payable to the order of any person in any amount from $500 to
$100,000. Up to five Redemption Checks per month may be written without charge.
Each additional Redemption Check over five in any given month will be subject to
a $5 fee. Redemption Checks are free and may be obtained by contacting
Enterprise Shareholder Services, at the telephone number or address set forth
above. A $25 fee will be imposed on any account for stopping payment of a
Redemption Check upon request by the shareholder. It is not possible to use a
Redemption

THE ENTERPRISE Group of Funds, Inc.

55
<PAGE> 60

Check to close out an account since additional shares accrue daily. Redemptions
by check writing may be subject to a contingent deferred sales charge as
described below. The amount of the check will be honored in full only if there
are sufficient funds available in the account to cover the fee amount of the
check plus applicable contingent deferred sales charge, if any.

CONTINGENT DEFERRED SALES CHARGE --
LARGE ORDER NAV PURCHASE PRIVILEGE

A contingent deferred sales charge of 1% may be imposed upon redemption of Class
A shares that are purchased in an amount in excess of $1,000,000 if they are
redeemed within two years of purchase. The charge will not be imposed upon
redemption of reinvested dividends or share appreciation. The charge is applied
to the value of the shares redeemed excluding amounts not subject to the charge.
The contingent deferred sales charge will be waived in the event of: (a)
redemptions (other than redemption of the entire plan) by a participant-directed
qualified retirement plan described in Code Section 401(a) or a
participant-directed non-qualified deferred compensation plan described in Code
Section 457; (b) redemption of shares of a shareholder (including a registered
joint owner) who has died; (c) redemption of shares of a shareholder (including
a registered joint owner) who after purchase of the shares being redeemed
becomes totally disabled (as evidenced by a determination by the federal Social
Security Administration); and (d) redemptions under the Fund's Systematic
Withdrawal Plan at a maximum of 10% per year of the net asset value of the
account.

CONTINGENT DEFERRED SALES CHARGE --
CLASS B AND C SHARES

A contingent deferred sales charge may be imposed upon redemption of Class B and
C shares. There is no such charge upon redemption of any share appreciation or
reinvested dividends on Class B and C shares. Appreciation is the difference
between the share cost of the lot (net asset value at time of purchase) and the
current price at the time of redemption multiplied by the number of shares
redeemed. Redemption must occur to realize appreciation.

The contingent deferred sales charge will be waived: (a) in the event of total
disability (as evidenced by a determination of the federal Social Security
Administration) of the shareholder (including a registered joint owner)
occurring after the purchase of shares being redeemed; (b) in the event of the
death of the shareholder (including registered joint owner); (c) for redemptions
made pursuant to a systematic withdrawal plan (see "Special
Features -- Systematic Withdrawal Plan" above); and (d) for redemptions made
pursuant to any IRA systematic withdrawal based on the shareholder's life
expectancy including, but not limited to, substantially equal periodic payments
described in IRC Section 72(t)(2)(A)(iv) prior to age 59 1/2 and required
minimum distributions after age 70 1/2.

The CDSC charge B shares is computed at the following rates applied to the value
of the shares redeemed excluding amounts not subject to the charge.

<TABLE>
<CAPTION>
CONTINGENT DEFERRED
YEAR OF REDEMPTION AFTER PURCHASE SALES CHARGE
- --------------------------------- -------------------
<S> <C>
First.......................... 5%
Second......................... 4%
Third.......................... 4%
Fourth......................... 3%
Fifth.......................... 2%
Sixth.......................... 1%
</TABLE>

The following example will illustrate the operation of the contingent deferred
sales charge. Assume that an

THE ENTERPRISE Group of Funds, Inc.

56
<PAGE> 61

investor takes a single purchase of $10,000 of the Fund's Class B shares and
that 16 months later the value of the shares has grown by $1,000 through
reinvested dividends and by an additional $1,000 in appreciation to a total of
$12,000. If the investor were then to redeem the $6,000 in share value, the
contingent deferred sales charge would be payable only with respect to $5,000
because neither the $500 of reinvested dividends nor the $500 of share
appreciation is subject to the charge. The charge would be at the rate of 4%
($200) because it was in the second year after the purchase was made.

Class C shares are subject to a 1.00% CDSC for one year from the date the order
is received.

The rate of the contingent deferred sales charge is determined by the length of
the period of ownership. Investments are tracked on a daily basis. The period of
ownership for this purpose begins the first day in which the order for the
investment is received. For example, a Class B investment made in June, 1996
will be eligible for the 4% charge if redeemed on or after June 1, 1997. In the
event no specific order is requested, the redemption will be made first from
shares representing dividends and then from the earliest purchase of shares.

REDEMPTIONS -- GENERAL

The Fund's Articles of Incorporation provide that it may redeem its shares in
cash or with a pro rata portion of the assets of the appropriate Portfolio. To
date, all redemptions have been made in cash, and the Fund anticipates that all
redemptions will be made in cash in the future, but it reserves the right to
provide redemptions in assets of a Portfolio should considerations and the size
of the Portfolio require that method of redemption. The Fund has elected to
commit itself to pay in cash all requests for redemption by any shareholder of
record, limited in amount with respect to each shareholder during any 90-day
period to the lesser of: (i) $250,000 or (ii) 1% of the net asset value of the
Portfolio at the beginning of such period.

The Fund reserves the right to redeem an account at its option upon not less
than 45 days' written notice if an account's net asset value is $500 or less and
remains so during the notice period.

DISTRIBUTION PLANS

Class A, Class B and Class C shares of each Portfolio have adopted a separate
Distribution Plan (the "Plans") pursuant to Rule 12b-1 under the Investment
Company Act of 1940. Under the Plans, Class A, Class B and Class C shares of
each of the Funds are authorized to pay the Distributor a distribution fee for
expenses incurred in connection with the distribution of shares of the Portfolio
and an account maintenance fee for shareholder servicing.

CLASS A SHARES. Class A shares of each Portfolio (except Money Market
Portfolio) pay the Distributor an account maintenance and distribution fee at
the annual rates of .45% of each Portfolio's average daily net assets
attributable to Class A shares.

CLASS B SHARES. Class B shares of each Portfolio (except Money Market
Portfolio) pay the Distributor a distribution fee at the annual rate of .75% of
each Portfolio's average daily net assets attributable to Class B shares. Class
B shares of each Portfolio (except Money Market Portfolio) also pay an account
maintenance fee at the annual rate of .25% of each Portfolio's average daily net
assets.

CLASS C SHARES. Class C shares of each Portfolio (except Money Market
Portfolio) pay the Distribu-

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57
<PAGE> 62

tor a distribution fee at the annual rate of .75% of each Portfolio's average
daily net assets attributable to Class C shares. Class C shares of each
Portfolio (except Money Market Portfolio) also pay an account maintenance fee at
the annual rate of .25% of each Portfolio's average daily net assets
attributable to Class C shares.

USE OF DISTRIBUTION AND ACCOUNT MAINTENANCE FEES. All or a portion of the
distribution fees paid by Class A, B or C shares may be used by the Distributor
to pay costs of printing reports and prospectuses for potential investors and
the costs of other distribution expenses. All or a portion of the account
maintenance fees paid by the Class A, Class B or Class C shares may be paid to
broker-dealers or others for the provision of personal continuing services to
shareholders, including such matters as responding to shareholder inquiries
concerning the status of their accounts and assistance in account maintenance
matters such as changes in address. Payments under the Plans are not limited to
amounts actually paid or expenses actually incurred by the Distributor but
cannot exceed the maximum rate set by the Plans or by the Board. It is,
therefore, possible that the Distributor may realize a profit in a particular
year as a result of these payments. The Plans have the effect of increasing the
Fund's expenses from what they would otherwise be. The Board reviews the Fund's
distribution and account maintenance fee payments and may reduce or eliminate
the fee at any time without further obligation of the Portfolio. The SAI
contains more information about the Adviser's Agreement and the Plans.

In addition to distribution and account maintenance fees paid by the Fund under
Class A, Class B and Class C Plans, Enterprise Capital (or one of its
affiliates) may make payments to dealers (including MONY Securities Corp.) and
other persons which distribute shares of the Funds (including Class Y shares).
Such payments may be calculated by reference to the net asset value of shares
sold by such persons or otherwise.

PERFORMANCE
COMPARISONS

Investors may look to mutual fund reporting services such as Lipper Analytical
Services, Inc., CDA Investment Technologies, Wiesenberger Dealer Services,
Computer Directions Adviser Services, Inc., Moody's Bond Survey Index, Nelson's
Investment Manager Data Base, Morningstar, Inc., Salomon Brothers Corporate Bond
Rate-of-Return Index, Shearson Lehman Municipal Bond Index, Bond-20 Bond Index
and mortgage trade and other publications to compare the performance of each
Portfolio with other mutual funds in that Portfolio's category. Comparative
performance information from these sources may be used by the Fund in
advertising.

From time to time, articles about the Fund regarding its performance or ranking
may appear in national publications such as Kiplinger's Personal Finance
Magazine, Money Magazine, Financial World, Morningstar, Dalbar, Value Line
Mutual Fund Survey, Personal Investors, Forbes, Fortune, Business Week, Wall
Street Journal, Donaghue Mutual Funds and Barron's. Some of these publications
may publish their own rankings or performance reviews of mutual funds, including
the Fund. Reference to or reprints of such articles may be used in the Fund's
promotional literature.

From time to time, the Fund may advertise a Portfolio's "yield" and "total
return." Total return and yield

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are calculated separately for Class A, Class B, Class C and Class Y shares. For
Portfolios other than the Money Market Portfolio, the yield for any 30-day (or
one month) period is computed by dividing the net investment income per share
earned during such Period by the maximum public offering price per share on the
last day of the period, and then annualizing such 30-day (or one month) yield in
accordance with a formula prescribed by the Securities and Exchange Commission
which provides for compounding on a semiannual basis.

Current annualized yield quotations for the Money Market Portfolio are based on
the Portfolio's net investment income per share for a seven-day period and
exclude any realized or unrealized gains or losses on portfolio securities. The
yield is computed by determining the net change in value for a hypothetical
account having a balance of one share at the beginning of the period, excluding
any realized or unrealized gains or losses, and dividing by the price per share
at the beginning of the period (expected to remain constant at $1). The net
change is then annualized by multiplying it by 365/7, with the current yield
figure carried to the nearest one-hundredth of one percent. The effective yield
of the Money Market Portfolio for a seven-day period is computed by expressing
the unannualized return for that period on a compounded, annualized basis.

A Portfolio may also advertise in items of sales literature an "actual
distribution rate" which is computed in the same manner as yield except that
actual income dividends declared per share during the period in question are
substituted for net investment income per share.

Advertisements of a Portfolio's total return disclose the Portfolio's average
annual compounded total return for its most recently completed fiscal year and
the appropriate periods since the Portfolio's inception. The Portfolio's total
return for each such period is computed by finding, through the use of a formula
prescribed by the Securities and Exchange Commission, the average annual
compounded rates of return over the period that would equate an assumed initial
amount invested to the value of the investment at the end of the period. For
purposes of computing total return, income dividends and capital gains
distributions paid on shares of the Portfolio are assumed to have been
reinvested when received and the front end sales charge applicable to sales of
the Portfolio shares (other than the Money Market Portfolio) is assumed to have
been paid.

Any distribution rate, yield or total rate of return figure should not be
considered as representative of the performance of a Portfolio in the future. In
addition, the Income Portfolios' performance figures are not directly comparable
to those of bank deposits and other similar investments, which maintain a fixed
principal value and pay a fixed yield on the principal amount. These Portfolios'
net asset values are not fixed. They vary based not only upon the type, quality
and maturities of the securities held in the Portfolio, but also on the changes
in the current value of such securities and on changes in the Portfolios'
expenses. For narrative discussions of the Fund's performance including graphs
comparing Portfolios to various securities indexes, please request a copy of an
Annual Report to Shareholders from the Fund.

The Money Market Portfolio's actual yields will fluctuate, and are not
necessarily indicative of future actual yields. Actual yields are dependent on
such variables as portfolio quality, average portfolio maturity, the type of
instruments in which investments are

THE ENTERPRISE Group of Funds, Inc.

59
<PAGE> 64

made, changes in interest rates on money market instruments, portfolio expenses
and other factors.

MANAGEMENT OF THE FUND

DIRECTORS

The Board of Directors of the Fund is responsible for the management of the
business of the Fund under the laws of Maryland, and it is primarily responsible
for reviewing the activities of Enterprise Capital Management, Inc., the various
Portfolio Managers and the Distributor under the Investment Advisory, the
Portfolio Manager Agreements, the Distributor's Agreement and the Plans which
relate to the operations of the Fund and its Portfolios. Information concerning
the Directors, including their names, positions, terms of office and principal
occupations during the past five years, is contained in the Statement of
Additional Information.

INVESTMENT ADVISER ARRANGEMENTS

The Fund has entered into an Investment Adviser's Agreement with Enterprise
Capital Management, Inc. ("Enterprise Capital") which, in turn, has entered into
Portfolio Management agreements with each of the Portfolio Managers discussed
below. Enterprise Capital acts as the Portfolio Manager for the Money Market
Portfolio. It is Enterprise Capital's responsibility to select, subject to the
Board of Directors' review and approval, Portfolio Managers who have
distinguished themselves by able performance in their respective areas of
responsibility and to review their continued performance. Enterprise Capital is
assisted in this duty by Evaluation Associates, Inc., which has had 26 years of
experience in evaluating investment advisers for individuals and institutional
investors.

Enterprise Capital and the Fund have received an exemptive order from the
Securities and Exchange Commission which permits Enterprise, subject to, among
other things, initial shareholder authority, to thereafter enter into or amend
Portfolio Manager Agreements without obtaining shareholder approval each time.
Shareholders voted affirmatively to give the Fund this ongoing authority. With
Board approval, Enterprise Capital is permitted to employ new Portfolio Managers
for the Portfolios, change the terms of the Portfolio Manager Agreements or
enter into a new Agreement with that Portfolio Manager. Shareholders of a
Portfolio continue to have the right to terminate the Portfolio Manager's
Agreement for the Portfolio at any time by a vote of the majority of the
outstanding voting securities of the Portfolio. Shareholders will be notified of
any Portfolio Manager changes or other material amendments to Portfolio Manager
Agreements that occur under these arrangements.

Enterprise Capital is also responsible for conducting all operations of the Fund
except those operations contracted to the Transfer Agent and Custodian.
Enterprise Capital is a subsidiary of The Mutual Life Insurance Company of New
York ("MONY"), one of the nation's largest insurance companies. Enterprise
Capital, which was incorporated in 1986, served as principal investment adviser
to Alpha Fund, Inc., the predecessor of the Fund's Growth Portfolio. Enterprise
Capital's address is Atlanta Financial Center, 3343 Peachtree Road, N.E., Suite
450, Atlanta, Georgia 30326.

As part of its operational responsibilities, Enterprise Capital has undertaken
to review each of its internal systems and obtain assessments from each service
provider, including Portfolio Managers, of Year 2000 issues which could
potentially impact services to the

THE ENTERPRISE Group of Funds, Inc.

60
<PAGE> 65

Fund. Enterprise Capital is unaware of any Year 2000 issues which remain
unresolved or have been identified as unresolvable. In addition, Enterprise
Capital has established a timetable to periodically re-evaluate systems to
ensure that new issues or those which may not previously have been identified
are addressed and resolved in an expeditious manner. Enterprise Capital does not
anticipate any material expenditures for monitoring Year 2000 issues.

PORTFOLIO MANAGERS

The following sets forth certain information about each of the Portfolio
Managers, the annual rate of compensation as a percentage of the Portfolio's net
assets paid to Enterprise Capital ("Management Fee") and the portion of the
Management Fee that Enterprise Capital pays to the respective Portfolio
Managers. Portfolio Managers typically manage assets for institutional investors
and high net worth individuals. Collectively, the Portfolio Managers manage
assets in excess of $300 billion for all clients, including The Enterprise Group
of Funds.

GROWTH PORTFOLIO

The Portfolio Manager of the Growth Portfolio is Montag & Caldwell, Inc.
("Montag & Caldwell"). Its address is 1100 Atlanta Financial Center, 3343
Peachtree Road, N.E., Atlanta, Georgia 30326, and it is controlled by Allegheny
Corporation. It has served as investment adviser to Alpha Fund, Inc., the
predecessor of the Growth Portfolio, since the Fund was organized in 1968.
Montag & Caldwell and its predecessors have been engaged in the business of
providing investment counseling to individuals and institutions since 1945.
Ronald E. Canakaris, President and Chief Investment Officer, is responsible for
the day to day investment management of the Portfolio and has more than 30 years
experience in the investment industry. He has been with Montag & Caldwell for
more than 26 years. Total assets under management for all clients at March 31,
1998, approximated $ billion. Usual investment minimum: $20 million.
Representative clients include: Alexander & Alexander Services; American
Business Products; and Wake Forest University. The management fee paid by the
Growth Portfolio is .75% of net assets, and the Portfolio Manager receives .30%
for assets under management up to $100,000,000; .25% for assets from
$100,000,000 to $200,000,000; and .20% for assets greater than $200,000,000.

GROWTH AND INCOME PORTFOLIO

The Portfolio Manager of the Growth and Income Portfolio is Retirement System
Investors Inc. ("RSI") which is a subsidiary of Retirement Group Inc. Its
address is 317 Madison Ave., New York, New York 10017. James P. Coughlin,
President and Chief Investment Officer, is responsible for the day-to-day
management of the Portfolio and has more than 30 years experience in the
investment industry. He has been with PSI since 1984. Total assets under
management for Retirement Investors Inc. was $ million as of March 31, 1998.
The management fee is .75%, and the Portfolio Manager receives .30% for assets
under management up to $100,000,000; .25% on the next $100,000,000; and .20% for
assets greater than $200,000,000.

EQUITY PORTFOLIO

THE ENTERPRISE Group of Funds, Inc.

61
<PAGE> 66

Oppenheimer Capital, is responsible for the day-to-day management of the
Portfolio. Ms. Rominger has more than 19 years experience in the investment
industry and has been at Oppenheimer Capital since 1981. The Portfolio Manager
had approximately $ billion under management as of March 31, 1998. Usual
investment minimum is $10 million. Representative clients include Pacific
Telesis Group, Caterpillar, Inc. and New York State Electric & Gas. The annual
management fee is .75% and the Portfolio Manager receives .40% for assets under
management up to $100,000,000 and .30% of that fee thereafter.

EQUITY INCOME PORTFOLIO

The Portfolio Manager of the Equity Income Portfolio is 1740 Advisers, Inc.
("1740 Advisers"). It is a subsidiary of MONY. Its address is 1740 Broadway, New
York, New York 10019. John V. Rock, President and Director, is responsible for
the day-to-day investment management of the Portfolio and has more than 34 years
experience in the investment industry. He has been with MONY since 1974. Total
assets under management (for the Equity Income Portfolio and all other accounts
managed) at March 31, 1998, were approximately $ billion. Usual investment
minimum: $20 million. The management fee paid by the Equity Income Portfolio is
.75% of net assets, and the Portfolio Manager receives .30% for assets under
management up to $100,000,000; and .25% on the next $100,000,000; and .20%
thereafter.

CAPITAL APPRECIATION PORTFOLIO

The Portfolio Manager of the Capital Appreciation Portfolio is Provident
Investment Counsel, Inc. ("PIC"). PIC traces its origins to an investment
partnership formed in 1951. PIC is a wholly-owned subsidiary of United Asset
Management, Inc. Its address is 300 North Lake Avenue, Pasadena, California
91101. Jeffrey J. Miller is a Managing Director of the firm and is responsible
for the day-to-day management of the Portfolio. He has more than 25 years
experience in the investment industry. He has been with PIC since 1974. As of
March 31, 1998, total assets under management for all clients were $
billion. Usual investment minimum: $5 million. Representative clients include:
Bell Atlantic, McGraw-Hill and International Paper Co. The management fee is
.75% and the Portfolio Manager receives .50% for assets under management up to
$100,000,000; .45% for assets under management for the next $100,000,000; .35%
for assets greater than $200,000,000 up to $300,000,000; and .30% thereafter.

SMALL COMPANY GROWTH PORTFOLIO

The Portfolio Manager of the Small Company Growth Portfolio is Pilgrim Baxter &
Associates, Ltd. ("Pilgrim Baxter"). Pilgrim Baxter is a wholly-owned subsidiary
of United Asset Management, Inc. Its offices are at 825 Duportail Road, Wayne,
Pennsylvania 19087. Gary Pilgrim, Chief Investment Officer of the firm, and
Michael D. Jones, Portfolio Manager/Analyst, are responsible for the day-to-day
management of the Portfolio and have more than 40 years combined experience in
the investment industry. Mr. Pilgrim and Mr. Jones have been employed by Pilgrim
Baxter since 1982 and 1991, respectively. As of March 31, 1998, total assets
under management for all clients were $ billion. Usual investment minimum:
$20 million. The management fee is 1.00% and the Portfolio Manager receives .65%
for assets under management up to $50 million; and .55% for

THE ENTERPRISE Group of Funds, Inc.

62
<PAGE> 67

assets under management for the next $50 million; and .45% for assets
thereafter.

SMALL COMPANY VALUE PORTFOLIO

The Portfolio Manager of the Small Company Value Portfolio is GAMCO Investors,
Inc. ("GAMCO"). GAMCO is a wholly-owned subsidiary of Gabelli Funds, Inc. Its
offices are located at One Corporate Center, Rye, New York 10580. GAMCO's
predecessor, Gabelli & Company, Inc., was founded in 1977 by Mario J. Gabelli
who has served as its chief investment officer since inception and is
responsible for the day-to-day management of the Portfolio. He has more than 27
years of experience in the investment industry. As of March 31, 1998, total
assets under management for all clients were $ billion. Usual investment
minimum is $1 million. The management fee is .75% and the Portfolio Manager
receives .40% for assets under management up to $1 billion and .30% for assets
in excess of $1 billion.

INTERNATIONAL GROWTH PORTFOLIO

The Portfolio Manager of the International Growth Portfolio is Brinson Partners,
Inc. ("Brinson"). Brinson Partners is a wholly-owned subsidiary of UBS (United
Bank of Switzerland). Brinson's address is 209 South LaSalle Street, Chicago,
Illinois 60604. Day-to-day management of this Portfolio is performed by a
committee. As of March 31, 1998, Brinson's assets under management for all
clients approximated $ billion. Usual investment minimum: $25 million. The
management fee is .85%, and the Portfolio Manager receives .45% for assets under
management up to $100 million; .35% for assets under management from
$100,000,000 to $200,000,000; .325% for assets from $200,000,0000 to
$500,000,000; and .25% for assets greater than $500,000,000.

GOVERNMENT SECURITIES PORTFOLIO

The Portfolio Manager of the Government Securities Portfolio is TCW Funds
Management, Inc. The firm, founded in 1971, is a wholly-owned subsidiary of TCW
Management Company, a Nevada corporation, whose direct and indirect
subsidiaries, including Trust Company of the West and TCW Asset Management
Company, provide a variety of trust, investment management and investment
advisory services. The firm's address is 865 South Figueroa Street, Suite 1800,
Los Angeles, California 90017. Philip A. Barach, Managing Director, and Jeffrey
E. Gundlach, Managing Director, are responsible for the day-to-day investment
management of the Portfolio and have more than 35 years combined experience in
the investment industry. They joined TCW in 1992. As of March 31, 1998 TCW and
its affiliated companies had approximately $ billion under management or
committed for management in various fiduciary and advisory capacities. Usual
investment minimum: $35 million. The Management Fee is .60% and the Portfolio
Manager receives .30% for assets under management up to $50,000,000 and .25% for
assets under management greater than $50,000,000.

HIGH-YIELD BOND PORTFOLIO

THE ENTERPRISE Group of Funds, Inc.

63
<PAGE> 68

of the Portfolio. He has more than 29 years of investment industry experience.
He joined Caywood-Scholl in 1986. Caywood-Scholl provides investment advice
exclusively with respect to high yield, low grade fixed income instruments. As
of March 31, 1998, assets under management for all clients approximated $
million. Usual investment minimum: $1 million. The Management Fee is .60%, and
the Portfolio Manager receives .30% for assets up to $100,000,000 and .25% for
assets above $100,000,000.

TAX-EXEMPT INCOME PORTFOLIO

The Portfolio Manager of the Tax-Exempt Income Portfolio is MBIA Capital
Management Corp. ("MBIA"). It is a wholly-owned subsidiary of MBIA, Inc. MBIA's
address is 113 King Street, Armonk, New York 10504. Day-to-day management of the
Portfolio is performed by Robert M. Ohanesian, President and Chief Investment
Officer; and Gary S. Meserole, CFA, Vice President and Portfolio Manager, who
have combined experience of more than 38 years in the investment industry. Mr.
Ohanesian joined MBIA in 1994 and previously served as Director of Investments
for Shields Asset Management. Mr. Meserole joined MBIA in 1995 and previously
served as Vice President of MBIA Insurance Corporation. As of March 31, 1998,
assets under management for all clients approximated $ billion. Usual
investment minimum: $10 million. The management fee is .50% and the Portfolio
Manager receives .25% for assets up to $50,000,000 and .30% thereafter.

MANAGED PORTFOLIO

The Portfolio Manager of the Managed Portfolio is OpCap Advisors, a majority
owned subsidiary of Oppenheimer Capital, a general partnership. Its address is
One World Financial Center, New York, New York 10281. Richard J. Glasebrook II,
Managing Director of Oppenheimer Capital is responsible for the day-to-day
management of the Portfolio. He has more than 24 years of investment industry
experience and has been with Oppenheimer Capital since 1981. As of March 31,
1998, Oppenheimer Capital and its affiliates had over $ billion under
management. Its usual investment minimum is $10 million. The management fee is
.75% and the Portfolio Manager receives .40% for assets up to $100,000,000 and
.30% for assets in excess of $100,000,000.

MONEY MARKET PORTFOLIO

The Portfolio Manager of the Money Market Portfolio is Enterprise Capital, a
wholly-owned subsidiary of MONY. Its address is Atlanta Financial Center, 3343
Peachtree Road, N.E., Suite 450, Atlanta, Georgia 30326. Enterprise Capital
utilizes the services of The Mutual Life Insurance Company of New York employees
for certain services relating to management of the Portfolio. Day-to-day
management of the Portfolio is performed by a committee. MONY's address is 1740
Broadway, New York, New York 10019. Enterprise Capital began operating as
Portfolio Manager on May 1, 1992. Total money market assets in the Portfolio at
March 31, 1998, approximated $ million. The management fee is .35%.

PAYMENT OF EXPENSES

THE ENTERPRISE Group of Funds, Inc.

64
<PAGE> 69

on the basis of its asset size, on the basis of special needs of such Portfolio,
or equally, as is deemed appropriate. These expenses include expenses such as:
custodial, transfer agent, brokerage, auditing and legal services, the printing
of Prospectuses sent to existing shareholders, expenses relating to bookkeeping
and recording and determining the net asset value of shares, and the expenses of
qualification of a Portfolio's shares under the federal and state securities
laws. The Fund's Board of Directors annually reviews allocation of expenses
among the Portfolios.

Enterprise Capital has advised the Fund that it will reimburse such portion of
the fees due to it under the Investment Adviser's Agreement as is necessary to
assure, for the period commencing January 1, 1998 and ending no earlier than
December 31, 1998, that expenses incurred by the Portfolios will not exceed the
following percentages of average annual assets (annualized for periods of less
than a fiscal year): Growth (A) 1.60%; (B) 2.15%; (C) 2.15%; Growth and Income
(A) 1.50%; (B) 2.05%; (C) 2.05%; Equity (A) 1.60%; (B) 2.15%; (C) 2.15%; Equity
Income (A) 1.50%; (B) 2.05%; (C) 2.05%; Capital Appreciation (A) 1.75%; (B)
2.30%; (C) 2.30%; Small Company Growth (A) 1.85%; (B) 2.40%; (C) 2.40%; Small
Company Value (A) 1.75%; (B) 2.30%; (C) 2.30%; International Growth (A) 2.00%;
(B) 2.55%; (C) 2.55%; Government Securities (A) 1.30%; (B) 1.85%; (C) 1.85%;
High-Yield Bond (A) 1.30%; (B) 1.85%; (C) 1.85%; Tax-Exempt Income (A) 1.10%;
(B) 1.65%; (C) 1.65%; Managed (A) 1.75%; (B) 2.30%; (C) 2.30%; and Money Market
(A) 0.70%; (B) 0.70%; (C) 0.70%. The Portfolio Managers have advised the Fund
that they may assist in a portion of the above-referenced reimbursement from
time to time.

Enterprise Capital and the Fund entered into agreements pursuant to which
Enterprise Capital advanced on behalf of the Fund $33,748 to cover the costs of
expanding the series to include a Small Company Value Portfolio; $34,116 of
expanding the series to include a Managed Portfolio; and $40,378 for expanding
the series to include an Equity Portfolio and completing the appropriate
registrations under the Investment Company Act of 1940, the Securities Act of
1933, and certain state securities laws. The agreements provide that these
amounts will be repaid by each Portfolio, in five equal annual increments
without interest, commencing at the end of the first fiscal year at which each
such Portfolio have total net assets of $5 million or more. Each Portfolio has
commenced such payments.

TAXES

Each Portfolio of the Fund has qualified and intends to continue to qualify as a
"regulated investment company" in 1998 under the provisions of the IRC as
amended. For purposes of the IRC, each Portfolio is regarded as a separate
regulated investment company. If any Portfolio qualifies as a "regulated
investment company" and complies with provisions of the IRC which require
regulated investment companies to distribute substantially all of their net
income (both ordinary income and capital gain), the Portfolio will be relieved
of federal income tax on the income and capital gains distributed to
shareholders.

THE ENTERPRISE Group of Funds, Inc.

65
<PAGE> 70

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 (Toll Free)

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 (Toll Free)

Independent Accountants
Coopers & Lybrand L.L.P.
Atlanta, GA

Member - Investment Company Institute

[Enterprise Group of Funds(TM) Logo]

1-800-432-4320

www.enterprisegroup.com
<PAGE> 71

THE ENTERPRISE GROUP OF FUNDS, INC.

Atlanta Financial Center
3343 Peachtree Road, N.E., Suite 450
Atlanta, Georgia 30326
For Shareholder Information Call 1-800-368-3527

PROSPECTUS
DATED MAY 1, 1998

Equity Portfolios

Income Portfolios

Government Securities Portfolio
High-Yield Bond Portfolio
Tax-Exempt Income Portfolio

Flexible Portfolio

Managed Portfolio

Money Market Portfolio

PLEASE NOTE THAT THESE FUNDS ARE NOT BANK DEPOSITS; ARE NOT FEDERALLY INSURED;
ARE NOT ENDORSED BY ANY BANK OR GOVERNMENT AGENCY; AND ARE NOT GUARANTEED TO
ACHIEVE THEIR GOAL(S).
THE ENTERPRISE Group of Funds, Inc.
<PAGE> 72

SUMMARY OF FUND EXPENSES

<TABLE>
<CAPTION>
SMALL SMALL
GROWTH AND EQUITY CAPITAL COMPANY COMPANY
GROWTH INCOME EQUITY INCOME APPRECIATION GROWTH VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- ---------- --------- --------- ------------ --------- ---------
CLASS OF SHARES: Y Y Y Y Y Y Y
---------------- --------- ---------- --------- --------- ------------ --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Initial Sales Load Imposed on
Purchase (as a % of offering price)..... none none none none none none none
Maximum Deferred Sales Load............... none none none none none none none
Maximum Sales Load Imposed On Reinvested
Dividends............................... none none none none none none none
Exchange Fee.............................. none none none none none none none
Redemption Fee............................ none none none none none none none
ANNUAL FUND OPERATING EXPENSES
(AS A % OF AVERAGE NET ASSETS)
Management Fee(1)......................... 0.75% 0.75% 0.75% 0.75% 0.75% 1.00% 0.75%
12b-1..................................... none none none none none none none
Other Expenses(2)......................... 0.22% 0.30% 0.40% 0.30% 0.45% 0.40% 0.55%
---- ---- ---- ---- ---- ---- ----
TOTAL FUND OPERATING EXPENSES............. 0.97% 1.05% 1.15% 1.05% 1.20% 1.40% 1.30%
==== ==== ==== ==== ==== ==== ====
EXAMPLE 1: You would pay the following expenses over the indicated periods in each of the Funds on a $1,000 investment assuming
(a) payment of the maximum sales charge (none), (b) a 5% annual return, and (c) redemption at the end of the time period.
1 Year.................................... $ 10 $ 11 $ 12 $ 11 $ 12 $ 14 $ 13
3 Years................................... 31 33 37 33 38 44 41
5 Years................................... 54 58 63 58 66 77 71
10 Years.................................. 119 128 140 128 145 168 157
</TABLE>

THE EXAMPLES SHOULD NOT BE CONSIDERED INDICATIONS OF PAST OR FUTURE EXPENSES OR
PERFORMANCE, AND ACTUAL EXPENSES OR PERFORMANCE MAY VARY FROM THOSE SHOWN.

The purpose of this table is to assist the investor in understanding the
various costs and expenses that an investor in the Portfolios will bear directly
or indirectly.

(1) These fees may be higher than that of other funds. However, the Board of
Directors has determined that such fees are reasonable in light of the services,
investment decisions and investment techniques employed.

For accounts with a balance of $1,000 or less, as of July 31, a $25 fee per
account registration per Portfolio for maintenance will apply, excluding
Automatic Bank Draft Plan Accounts, Automatic Investment Plan Accounts, and
Retirement Plans.

(2) Expenses for Equity, Equity Income, Capital Appreciation, and Tax-Exempt
Income Class Y Shares represent estimates of what these expenses are expected to
be for the 1998 fiscal year. Expense information has been restated for
Tax-Exempt Income to reflect a reduction in the maximum expense cap to 0.65%
effective October 1, 1997.

THE ENTERPRISE Group of Funds, Inc.

2
<PAGE> 73

SUMMARY OF FUND EXPENSES

<TABLE>
<CAPTION>
INTERNATIONAL GOVERNMENT HIGH-YIELD TAX-EXEMPT
GROWTH SECURITIES BOND INCOME MANAGED MONEY MARKET
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ---------- ---------- ---------- --------- ------------
CLASS OF SHARES: Y Y Y Y Y Y
---------------- ------------- ---------- ---------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Initial Sales Load Imposed on
Purchase (as a % of offering price)..... none none none none none none
Maximum Deferred Sales Load............... none none none none none none
Maximum Sales Load Imposed On Reinvested
Dividends............................... none none none none none none
Exchange Fee.............................. none none none none none none
Redemption Fee............................ none none none none none none
ANNUAL FUND OPERATING EXPENSES
(AS A % OF AVERAGE NET ASSETS)
Management Fee(1)......................... 0.85% 0.60% 0.60% 0.50% 0.75% 0.35%
12b-1..................................... none none none none none none
Other Expenses(2)......................... 0.70% 0.25% 0.25% 0.15% 0.29% 0.35%
---- ---- ---- ---- ---- ----
TOTAL FUND OPERATING EXPENSES............. 1.55% 0.85% 0.85% 0.65% 1.04% 0.70%
==== ==== ==== ==== ==== ====
EXAMPLE 1: You would pay the following expenses over the indicated periods in each of the Funds on a $1,000 investment
assuming (a) payment of the maximum sales charge (none), (b) a 5% annual return, and (c) redemption at the end of the time
period.
1 Year.................................... $ 16 $ 9 $ 9 $ 7 $ 11 $ 7
3 Years................................... 49 27 27 21 33 22
5 Years................................... 84 47 47 36 57 39
10 Years.................................. 185 105 105 81 127 87
</TABLE>

THE ENTERPRISE Group of Funds, Inc.

3
<PAGE> 74

THE ENTERPRISE GROUP OF FUNDS, INC.
PROSPECTUS SUMMARY
================================================================================

Set forth below are the 13 Portfolios of the Fund, their Portfolio
Managers and investment objectives. The Fund is a diversified, open-end
management investment company. Enterprise Capital Management, Inc. serves
as investment adviser. The Fund consists of common stock divided into 13
Portfolios consisting of four separate Classes for each Portfolio. Shares
are transferable within each Class.

<TABLE>
<CAPTION>
PORTFOLIO MANAGER INVESTMENT OBJECTIVES
----------------- ---------------------
<S> <C> <C> <C>
EQUITY PORTFOLIOS
GROWTH PORTFOLIO Capital appreciation, primarily from investments
Montag & Caldwell, Inc. Atlanta, Georgia in common stocks.
- ------------------------------------------------------------------------------------------------------------
GROWTH AND INCOME PORTFOLIO Total return in excess of the total return of
Retirement System Investors Inc. Lipper Growth and Income Mutual measured over a
Funds Average New York, New York period of three to five years, by investing
primarily in a broadly diversified group of large
capitalization stocks.
- ------------------------------------------------------------------------------------------------------------
EQUITY PORTFOLIO Long term capital appreciation, primarily from
OpCap Advisors investments in securities of companies that are
New York, New York believed by the Portfolio Manager to be
undervalued in the marketplace in relation to
factors such as the companies' assets or earnings.
- ------------------------------------------------------------------------------------------------------------
EQUITY INCOME PORTFOLIO A combination of growth and income to achieve an
1740 Advisers, Inc. above average and consistent total return,
New York, New York primarily from investments in dividend paying
common stocks.
- ------------------------------------------------------------------------------------------------------------
CAPITAL APPRECIATION PORTFOLIO Maximum capital appreciation, primarily through
Provident Investment Counsel, Inc. investment in common stock of companies that
Pasadena, California demonstrate accelerating earnings momentum and
consistently strong financial characteristics.
- ------------------------------------------------------------------------------------------------------------
SMALL COMPANY GROWTH PORTFOLIO Capital appreciation by investing primarily in
Pilgrim Baxter & Associates common stocks of small capitalization companies
Wayne, Pennsylvania believed by the Portfolio Manager to have an
outlook for strong earnings growth and potential
for significant capital appreciation.
- ------------------------------------------------------------------------------------------------------------
SMALL COMPANY VALUE PORTFOLIO Maximum capital appreciation, primarily through
Pilgrim Baxter & Associates investment in the equity securities of companies
Wayne, Pennsylvania that have a market capitalization of no more than
$1 billion.
- ------------------------------------------------------------------------------------------------------------
INTERNATIONAL GROWTH PORTFOLIO Capital appreciation, primarily through a
Brinson Partners, Inc. diversified portfolio of non-U.S. equity
Chicago, Illinois securities.
- ------------------------------------------------------------------------------------------------------------
INCOME PORTFOLIOS
GOVERNMENT SECURITIES PORTFOLIO Current income and safety of principal, primarily
TCW Funds Management, Inc. from securities that are obligations of the U.S.
Los Angeles, California Government, or its agencies, or its
instrumentalities.
- ------------------------------------------------------------------------------------------------------------
HIGH-YIELD BOND PORTFOLIO Maximum current income, primarily from debt
Caywood-Scholl Capital Management securities that are rated Ba or lower by Moody's
San Diego, California Investors Service, Inc. or BB or lower by Standard
& Poor's Corporation.
- ------------------------------------------------------------------------------------------------------------
TAX-EXEMPT INCOME PORTFOLIO A high level of current income exempt from federal
MBIA Capital Management Corp. income tax, with consideration given to
Armonk, New York preservation of principal, primarily from
investment in a diversified portfolio of long-term
investment grade municipal bonds.
- ------------------------------------------------------------------------------------------------------------
FLEXIBLE PORTFOLIO
MANAGED PORTFOLIO Growth of capital over time through investment in
OpCap Advisors a portfolio consisting of common stocks, bonds and
New York, New York cash equivalents, the percentages of which will
vary based on the Portfolio Manager's assessments
of relative investment values.
- ------------------------------------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO
MONEY MARKET PORTFOLIO The highest possible level of current income
Enterprise Capital Management, Inc. consistent with preservation of capital and
Atlanta, Georgia liquidity by investing in obligations maturing in
one year or less from the time of purchase.
</TABLE>

================================================================================

THE ENTERPRISE Group of Funds, Inc.

4
<PAGE> 75

INVESTMENT RISK FACTORS

PURCHASE ALTERNATIVES

Each Portfolio offers four Classes of shares. Shares of each Class are generally
offered at the net asset value next determined after receipt of your purchase
order plus (i) an initial ("front-end") sales charge (Class A shares) or (ii) a
deferred sales charge (Class B and C shares). The following is a brief
description of the Y Class of shares offered. Class A, Class B, Class C Shares
are contained in a separate prospectus.

CLASS Y SHARES: Class Y shares do not incur an initial sales charge
when purchased. Class Y shares are not subject to any
ongoing distribution fees or service fees. Class Y
shares are subject to an investment of $1,000,000.
Institutional investors eligible to purchases Class Y
shares include banks, savings institutions, trust
companies, insurance companies, investment companies
as defined by the Investment Company Act of 1940,
pension or profit sharing trusts, certain wrap
account clients of broker/dealers, former
shareholders of Retirement System Fund Inc. ("RSF")
whose shares were merged into The Enterprise Group of
Funds, Inc., direct referrals of Portfolio Managers
or Evaluation Associates, Inc. ("EAI"), or other
financial institutional buyer. Wrap account clients
of broker/dealers, former RSF shareholders, and
direct referrals of Portfolio Managers or Evaluation
Associates, Inc. ("EAI") are offered Class Y shares
at a lower minimum purchase amount.

THE ENTERPRISE Group of Funds, Inc.

5
<PAGE> 76

FINANCIAL HIGHLIGHTS

(FOR A SHARE OUTSTANDING THROUGH THE PERIODS INDICATED)

The financial highlights which follow are part of the Fund's financial
statements and are included in Fund's Annual Report to Shareholders. The
financial highlights include four Portfolios which were in operation during
1997. The Fund's 1997 Annual Report to Shareholders is incorporated by reference
into the Statement of Additional Information. Annual reports may be obtained
without charge by calling the Fund at 800-432-4320. The Report contains
information about the performances of the Portfolios.

<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED AUGUST 8 THROUGH
GROWTH PORTFOLIO (CLASS Y) DECEMBER 31, 1997 DECEMBER 31, 1996
- ---------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of
Period........................... 13.12 $ 11.96
Net Investment Income (Loss)...... (0.02) 0.00
Net Realized and Unrealized Gains
(Losses) on Investments.......... 4.27 1.90
---------------------------------------
Total from Investment
Operations....................... 4.25 1.90
---------------------------------------
Dividends from Net Investment
Income........................... 0.00 0.00
Distributions from Net Realized
Capital Gains.................... 0.35 0.74
---------------------------------------
Total Distributions............... 0.35 0.74
---------------------------------------
Net Asset Value, End of Period.... $ 17.02 $ 13.12
---------------------------------------
Total Return...................... 32.40% 15.91%(B)
Net Assets, End of Period (in
thousands)....................... $44,596 $ 2,339
Ratio of Expenses to Average Net
Assets........................... 0.97%(F) 1.10%(AF)
Ratio of Expenses to Average Net
Assets (Excluding Waivers)....... 0.97%(F) 1.10%(AF)
Ratio of Net Investment Income
(Loss) to Average Net Assets..... (0.10)% 0.04%(A)
Ratio of Net Investment Income
(Loss) to Average Net Assets
(Excluding Waivers).............. (0.10)% 0.04%(A)
Portfolio Turnover Rate........... 22.28% 29.90%
Average Commission Per Share(C)... $0.0509 $0.0636
</TABLE>

A Annualized
B Not Annualized
C Total returns do not include one time sales charge.
D Total returns do not include contingent deferred sales charge.
E Disclosure not applicable to periods prior to 1996. Represents average
commissions rate per share charged to the fund on purchase and sales of equity
investments on which commissions are charged during the period
F Effective September 1, 1995, ratio includes expenses paid indirectly.

THE ENTERPRISE Group of Funds, Inc.

6
<PAGE> 77
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
FOR THE PERIOD YEAR ENDED SEPTEMBER 30,
OCTOBER 1 THROUGH ----------------------------------------------------------
GROWTH AND INCOME FUND (CLASS Y) DECEMBER 31, 1997 1997 1996 1995 1994 1993 1992
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period....... $ 25.73 $ 20.11 $ 16.69 $12.72 $12.08 $10.98 $10.45
Net Investment Income (Loss)... 0.06 0.35 0.21 0.13 0.15 0.18 0.23
Net Realized and Unrealized
Gains (Losses) on
Investments... 0.02 6.18 3.45 4.22 0.74 1.84 0.60
-------------------------------------------------------------------------------
Total from Investment
Operations... 0.08 6.53 3.66 4.35 0.89 2.02 0.83
-------------------------------------------------------------------------------
Dividends from Net Investment
Income....... 0.11 0.20 0.24 0.16 0.14 0.28 0.08
Distributions from Net Realized
Capital Gains... 0.46 0.71 0.00 0.22 0.11 0.64 0.22
-------------------------------------------------------------------------------
Total Distributions... 0.57 0.91 0.24 0.38 0.25 0.92 0.30
-------------------------------------------------------------------------------
Net Asset Value, End of
Period....... $ 25.24 $ 25.73 $ 20.11 $16.69 $12.72 $12.08 $10.98
-------------------------------------------------------------------------------
Total Return... 0.31%(B) 33.55% 22.21% 35.24% 7.47% 19.39% 8.11%
Net Assets End of Period (in
thousands)... $15,542 $15,428 $ 8,865 $5,657 $3,639 $3,094 $1,049
Ratio of Expenses to Average Net
Assets....... 1.05%(A) 0.99% 0.97% 0.90% 0.90% 0.90% 0.90%
Ratio of Expenses to Average Net
Assets (Excluding Waivers)... 1.68%(A) 2.20% 2.05% 2.20% 2.23% 3.33% 3.36%
Ratio of Net Investment Income
(Loss) to Average Net Assets... 0.96%(A) 0.88% 1.23% 1.52% 1.17% 1.31% 1.86%
Ratio of Net Investment Income
(Loss) to Average Net Assets
(Excluding Waivers)... 0.33%(A) (0.33)% 0.15% 0.22% (0.16)% (1.12)% (0.60)%
Portfolio Turnover... 1.46%(A) 15.69% 18.08% 25.49% 9.64% 21.79% 61.27%
Average Commission Per
Share(E)..... $0.0509 $0.0560 $0.0600

<CAPTION>
FOR THE PERIOD
MAY 10 THROUGH
GROWTH AND INCOME FUND (CLASS Y) SEPTEMBER 30, 1991
- -------------------------------- ------------------
<S> <C>
Net Asset Value, Beginning of
Period....... $10.00
Net Investment Income (Loss)... 0.14
Net Realized and Unrealized
Gains (Losses) on
Investments... 0.31
Total from Investment
Operations... 0.45
Dividends from Net Investment
Income....... 0.00
Distributions from Net Realized
Capital Gains... 0.00
Total Distributions... 0.00
Net Asset Value, End of
Period....... $10.45
Total Return... 4.50%(B)
Net Assets End of Period (in
thousands)... $1,560
Ratio of Expenses to Average Net
Assets....... 0.90%(A)
Ratio of Expenses to Average Net
Assets (Excluding Waivers)... 2.70%(A)
Ratio of Net Investment Income
(Loss) to Average Net Assets... 3.31%(A)
Ratio of Net Investment Income
(Loss) to Average Net Assets
(Excluding Waivers)... 1.51%(A)
Portfolio Turnover... 12.49%
Average Commission Per
Share(E).....
</TABLE>
<TABLE>
<CAPTION>

FOR THE PERIOD YEAR ENDED SEPTEMBER 30,
OCTOBER 1 THROUGH --------------------------------------------------------------
SMALL COMPANY GROWTH FUND (CLASS Y) DECEMBER 31, 1997 1997 1996 1995 1994 1993 1992
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........ $ 26.62 $ 25.08 $ 19.05 $ 14.01 $ 14.74 $ 11.83 $ 10.54
Net Investment Income (Loss)................ 0.16 (0.13) (0.17) (0.12) (0.04) (0.13) (0.17)
Net Realized and Unrealized Gains (Losses)
on Investments............................. (2.80) 3.73 7.62 5.49 1.58 4.36 1.49
-----------------------------------------------------------------------------------
Total from Investment Operations............ (2.64) 3.60 7.45 5.37 1.54 4.23 1.32
-----------------------------------------------------------------------------------
Dividends from Net Investment Income........ 0.00 0.00 0.00 0.00 0.00 0.11 0.00
Distributions from Net Realized Capital
Gains...................................... 0.55 2.06 1.42 0.33 2.27 1.21 0.01
Return of Capital........................... 0.02
-----------------------------------------------------------------------------------
Total Distributions......................... 0.55 2.06 1.42 0.33 2.27 1.32 0.03
-----------------------------------------------------------------------------------
Net Asset Value, End of Period.............. $ 23.43 $ 26.62 $ 25.08 $ 19.05 $ 14.01 $ 14.74 $ 11.83
-----------------------------------------------------------------------------------
Total Return................................ 9.92%(B) 16.24% 42.07% 39.20% 11.89% 38.05% 13.80%
Net Assets End of Period (in thousands)..... $13,540 $15,355 $ 6,609 $ 2,950 $ 1,825 $ 1,352 $ 684
Ratio of Expenses to Average Net Assets..... 1.40%(A) 1.84% 1.96% 1.85% 1.85% 1.85% 1.86%
Ratio of Expenses to Average Net Assets
(Excluding Waivers)........................ 1.96%(A) 3.08% 3.46% 5.15% 6.16% 8.06% 9.76%
Ratio of Net Investment Income (Loss) to
Average Net Assets......................... (1.12)%(A) (1.30)% (1.43)% (1.33)% (1.37)% (1.34)% (1.10)%
Ratio of Net Investment Income (Loss) to
Average Net Assets (Excluding Waivers)..... (1.68)%(A) (2.54)% (2.93)% (4.63)% (5.68)% (7.55)% (9.00)%
Portfolio Turnover.......................... 23.68% 157.51% 77.94% 84.05% 72.59% 144.49% 138.46%
Average Commission Per Share(E)............. $0.0518 $0.0503 $0.0486

<CAPTION>
FOR THE PERIOD
MAY 10 THROUGH
SEPTEMBER 30,
SMALL COMPANY GROWTH FUND (CLASS Y) 1991
- -------------------------------------------- -----------------
<S> <C>
Net Asset Value, Beginning of Period........ $ 10.00
Net Investment Income (Loss)................ (0.02)
Net Realized and Unrealized Gains (Losses)
on Investments............................. 0.56
Total from Investment Operations............ 0.54
Dividends from Net Investment Income........ 0.00
Distributions from Net Realized Capital
Gains...................................... 0.00
Return of Capital........................... 0.00
Total Distributions......................... 0.00
Net Asset Value, End of Period.............. $ 10.54
Total Return................................ 5.40%(B)
Net Assets End of Period (in thousands)..... $ 602
Ratio of Expenses to Average Net Assets..... 1.85%(A)
Ratio of Expenses to Average Net Assets
(Excluding Waivers)........................ 2.70%(A)
Ratio of Net Investment Income (Loss) to
Average Net Assets......................... (0.46)%(A)
Ratio of Net Investment Income (Loss) to
Average Net Assets (Excluding Waivers)..... (1.31)%(A)
Portfolio Turnover.......................... 25.38%
Average Commission Per Share(E).............
</TABLE>

THE ENTERPRISE Group of Funds, Inc.

7
<PAGE> 78
FINANCIAL HIGHLIGHTS (CONTINUED)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, FOR THE PERIOD
------------------------ MAY 25 THROUGH
SMALL COMPANY VALUE FUND (CLASS Y) 1997 1996 DECEMBER 31, 1995
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period.............. $ 5.77 $ 5.43 $ 5.37
Net Investment Income (Loss)...................... 1.45 0.01 0.04
Net Realized and Unrealized Gains (Losses) on
Investments...................................... 1.12 0.63 0.26
---------------------------------------------
Total from Investment Operations.................. 2.57 0.64 0.30
---------------------------------------------
Dividends from Net Investment Income.............. 0.00 0.00 0.04
Distributions from Net Realized Capital Gains..... 0.53 0.30 0.20
---------------------------------------------
Total Distributions............................... 0.53 0.30 0.24
---------------------------------------------
Net Asset Value, End of Period.................... $ 7.81 $ 5.77 $ 5.43
---------------------------------------------
Total Return...................................... 44.53% 11.83% 5.55%(B)
Net Assets End of Period (in thousands)........... $ 119 $ 1,926 $ 2,832
Ratio of Expenses to Average Net Assets........... 1.30% 1.30% 1.30%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)......................................... 1.85% 1.92% 1.81%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets....................................... 2.74% 0.35% 0.18%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers)................... 2.19% (0.27)% (0.33)%(A)
Portfolio Turnover................................ 62.51% 143.58% 36.50%(A)
Average Commission Per Share(E)................... $0.0470 $0.0483
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, FOR THE PERIOD
------------------------ MAY 25, THROUGH
SMALL COMPANY VALUE PORTFOLIO (CLASS Y) 1997 1996 DECEMBER 31, 1995
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period................ $ 5.77 $ 5.43 $ 5.37
Net Investment Income (Loss)........................ 1.45 0.01 0.04
Net Realized and Unrealized Gains (Losses) on
Investments........................................ 1.12 0.63 0.26
--------------------------------------------
Total from Investment Operations.................... 2.57 0.64 0.30
--------------------------------------------
Dividends from Net Investment Income................ 0.00 0.00 0.04
Distributions from Capital Gains.................... 0.53 0.30 0.20
--------------------------------------------
Total Distributions................................. 0.53 0.30 0.24
--------------------------------------------
Net Asset Value, End of Period...................... $ 7.81 $ 5.77 $ 5.43
--------------------------------------------
Total Return........................................ 44.53% 11.83% 5.55%(B)
Net Assets, End of Period (in thousands)............ $ 119 $ 1,926 $2,832
Ratio of Expenses to Average Net Assets............. 1.30% 1.30% 1.30%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)........................................... 1.85% 1.92% 1.81%(A)
Ratio of Net Investment Income to Average Net
Assets............................................. 2.74% 0.35% 0.18%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets (Excluding Waivers)......................... 2.19% (0.27)% (0.33)%(A)
Portfolio Turnover Rate............................. 62.51% 143.58% 36.50%(A)
Average Commission Per Share(C)..................... $0.0470 $0.0483
</TABLE>

THE ENTERPRISE Group of Funds, Inc.

8
<PAGE> 79
FINANCIAL HIGHLIGHTS (CONTINUED)

<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 5
YEAR ENDED DECEMBER 31, THROUGH
INTERNATIONAL GROWTH PORTFOLIO (CLASS Y) 1997 1996 DECEMBER 31, 1995
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period.............. 17.10 $ 16.07 $14.93
Net Investment Income (Loss)...................... 0.17 0.14 0.02
Net Realized and Unrealized Gain (Loss) on
Investments...................................... 0.72 1.92 2.02
----------------------------------------------
Total from Investment Operations.................. 0.89 2.06 2.04
----------------------------------------------
Dividends from Net Investment Income.............. 0.15 0.16 0.14
Distributions from Capital Gains.................. 1.13 0.87 0.76
----------------------------------------------
Total Distributions............................... 1.28 1.03 0.90
----------------------------------------------
Net Asset Value, End of Period.................... $ 16.71 $ 17.10 $16.07
----------------------------------------------
Total Return...................................... 5.21% 12.86% 13.65%(B)
Net Assets, End of Period (in thousands).......... $10,986 $ 8,828 $3,109
Ratio of Expenses to Average Net Assets........... 1.55% 1.55% 1.55%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)......................................... 1.66% 1.75% 1.75%(A)
Ratio of Net Investment Income to Average Net
Assets........................................... 0.95% 1.03% 0.26%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers)................... 0.84% 0.84% 0.05%(A)
Portfolio Turnover Rate........................... 27.08% 23.79% 31.10%(A)
Average Commission Per Share(E)................... $0.0275 $0.0221
</TABLE>

<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 17 THROUGH
GOVERNMENT SECURITIES FUND (CLASS Y) DECEMBER 31, 1997
- -------------------------------------------------------------------------------
<S> <C>
Net asset value, beginning of period........................ $11.87
Net investment income (loss)................................ 0.35
Net realized and unrealized gains (losses) on investments... 0.15
------
Total from investment operations............................ 0.50
------
Dividends from net investment income........................ 0.35
Distributions from net realized capital gains............... 0.00
------
Total distributions......................................... 0.35
------
Net asset value, end of period.............................. $12.02
------
Total return................................................ 4.02%(B)
Net assets end of period (in thousands)..................... $7,569
Ratio of expenses to average net assets..................... 0.85%(A)
Ratio of expenses to average net assets (excluding
waivers)................................................... 1.02%(A)
Ratio of net investment income (loss) to average net
assets..................................................... 6.40%(A)
Ratio of net investment income (loss) to average net assets
(excluding waivers)........................................ 6.23%(A)
Portfolio turnover.......................................... 9.61%(A)
</TABLE>

THE ENTERPRISE Group of Funds, Inc.

9
<PAGE> 80
FINANCIAL HIGHLIGHTS (CONTINUED)

<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 25 THROUGH
HIGH-YIELD BOND FUND (CLASS Y) DECEMBER 31, 1997
- -------------------------------------------------------------------------------
<S> <C>
Net asset value, beginning of period........................ $12.17
Net investment income (loss)................................ 0.67
Net realized and unrealized gains (losses) on investments... 0.18
------
Total from investment operations............................ 0.85
------
Dividends from net investment income........................ 0.67
Distributions from net realized capital gains............... 0.00
------
Total distributions......................................... 0.67
------
Net asset value, end of period.............................. $12.35
------
Total return................................................ 5.24%(B)
Net assets end of period (in thousands)..................... $ 809
Ratio of expenses to average net assets..................... 0.85%(A)
Ratio of expenses to average net assets (excluding
waivers)................................................... 1.02%(A)
Ratio of net investment income (loss) to average net
assets..................................................... 8.26%(A)
Ratio of net investment income (loss) to average net assets
(excluding waivers)........................................ 8.09%(A)
Portfolio turnover.......................................... 175.38%(A)
</TABLE>

<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 5
YEAR ENDED DECEMBER 31, THROUGH
MANAGED PORTFOLIO (CLASS Y) 1997 1996 DECEMBER 31, 1995
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period................. $ 7.98 $ 6.70 $ 6.17
Net Investment Income (Loss)......................... 0.08 0.09 0.03
Net Realized and Unrealized Gain (Loss) on
Investments......................................... 1.64 1.42 0.57
----------------------------------------------
Total from Investment Operations..................... 1.72 1.51 0.60
----------------------------------------------
Dividends from Net Investment Income................. 0.07 0.09 0.04
Distributions from Capital Gains..................... 0.36 0.14 0.03
----------------------------------------------
Total Distributions.................................. 0.43 0.23 0.07
----------------------------------------------
Net Asset Value, End of Period....................... $ 9.27 $ 7.98 $ 6.70
----------------------------------------------
Total Return......................................... 21.60 22.63% 9.80%(B)
Net Assets, End of Period (in thousands)............. $80,879 $57,794 $26,664
Ratio of Expenses to Average Net Assets.............. 1.04% 1.12% 1.30%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)............................................ 1.04% 1.12% 1.41%(A)
Ratio of Net Investment Income to Average Net
Assets.............................................. 0.92% 1.57% 1.39%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets (Excluding Waivers).......................... 0.92% 1.57% 1.28%(A)
Portfolio Turnover Rate.............................. 28.17% 33.21% 26.40%(A)
Average Commission Per Share(E)...................... $0.0552 $0.0551
</TABLE>

<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 17 THROUGH
MONEY MARKET FUND (CLASS Y) DECEMBER 31, 1997
- -------------------------------------------------------------------------------
<S> <C>
Net asset value, beginning of period........................ $ 1.00
Net investment income (loss)................................ 0.02
Net realized and unrealized gains (losses) on investments... 0.00
------
Total from investment operations............................ 0.02
------
Dividends from net investment income........................ 0.02
Distributions from net realized capital gains............... 0.00
------
Total distributions......................................... 0.02
------
Net asset value, end of period.............................. $ 1.00
------
Total return................................................ 2.31%(B)
Net assets end of period (in thousands)..................... $2,700
Ratio of expenses to average net assets..................... 0.70%(A)
Ratio of expenses to average net assets (excluding
waivers)................................................... 0.95%(A)
Ratio of net investment income (loss) to average net
assets..................................................... 4.96%(A)
Ratio of net investment income (loss) to average net assets
(excluding waivers)........................................ 4.71%(A)
</TABLE>

AAnnualized
BNot Annualized
CTotal returns do not include one time sales change.
DTotal returns do not include contingent deferred sales charge.
EDisclosure not applicable to periods prior to 1996. Represents average
commissions rate per share charged to the fund on purchase and sales of equity
investments on which commissions are charged during the period
FEffective September 1, 1995, ratio includes expenses paid indirectly.

THE ENTERPRISE Group of Funds, Inc.

10
<PAGE> 81

INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS

The investment objectives of each Portfolio may not be changed without approval
of a majority of the outstanding voting securities of that Portfolio.

EQUITY PORTFOLIOS

GROWTH PORTFOLIO

GROWTH AND INCOME

THE ENTERPRISE Group of Funds, Inc.

11
<PAGE> 82

prevailing price of the security; how that price compares to historical price
levels of the security, to current price levels in the general market, and to
the prices of competing companies; projected earnings estimates and earnings
growth rate of the company, and the relation of those figures to the current
price.

EQUITY PORTFOLIO

EQUITY INCOME PORTFOLIO

CAPITAL APPRECIATION PORTFOLIO

THE ENTERPRISE Group of Funds, Inc.

12
<PAGE> 83

1.5 times the average performance of the Standard & Poor's 500 common stocks
("S&P 500") for the same period. The Portfolio attempts to invest in a range of
small, medium and large companies designed to achieve an average capitalization
of the companies in which it invests that is less than the average
capitalization of the S&P 500. The potential for maximum capital appreciation is
the basis for investment decisions; any income is incidental.

SMALL COMPANY GROWTH PORTFOLIO

The Small Company Growth Portfolio seeks capital appreciation and invests
primarily in common stocks of small capitalization companies believed by the
Portfolio Manager to have an outlook for strong earnings growth and potential
for significant capital appreciation. The Portfolio will normally be as fully
invested as practicable in common stocks and securities convertible into common
stocks, but also may invest up to 5% of its assets in warrants and rights to
purchase common stocks. In the option of the Portfolio Manager, there may be
times when the shareholder's best interests are best served and the investment
objective is more likely to be achieved by having varying amounts of the
Portfolio's assets in convertible securities. Under normal market conditions,
the Portfolio will invest at least 65% of its total assets in common stocks and
convertible securities of small capitalization companies (market capitalization
of up to $1 billion). At certain times that percentage may be substantially
higher. Securities will be sold when the Portfolio Manager believes that
anticipated appreciation no longer probable, alternative investments offer
superior appreciation prospects, or the risk of a decline in market price is too
great. Because of its policy with respect to the sales of investments, the
Portfolio may from time to time realize short-term gains or losses. The
Portfolio will likely have somewhat greater volatility than the stock market in
general, a measured by the S&P 500 Index.

SMALL COMPANY VALUE PORTFOLIO

THE ENTERPRISE Group of Funds, Inc.

13
<PAGE> 84

as increased investor attention, takeover efforts or a change in management.

INTERNATIONAL GROWTH PORTFOLIO

The objective of the International Growth Portfolio is capital appreciation,
primarily through a diversified portfolio of non-U.S. equity securities.

The benchmark for the fund is the European, Australian, Far East ("EAFE") Index
(the "Benchmark"). The Benchmark is a market driven broad based index which
includes non-U.S. equity markets in terms of capitalization and performance. The
Benchmark is designed to provide a representative total return for all major
stock exchanges located outside the U.S. From time to time, the Portfolio
Manager may substitute securities in an equivalent index when it believes that
such securities in the index more accurately reflect the relevant international
market.

As a general matter, the Advisor will purchase for the Portfolio only securities
contained in the underlying index relevant to the Benchmark. Brinson Partners
will attempt to enhance the long-term risk and return performance of the Fund
relative to the Benchmark by deviating from the normal Benchmark mix of country
allocation and currencies in reaction to discrepancies between current market
prices and fundamental values. The active management process is intended to
produce a superior performance relative to the Benchmark index.

The Portfolio Manager will purchase securities of companies domiciled in a
minimum of 8 to 12 countries outside the United States.

THE ENTERPRISE Group of Funds, Inc.

14
<PAGE> 85

INCOME PORTFOLIOS

GOVERNMENT SECURITIES PORTFOLIO

The objective of the Government Securities Portfolio is current income and
safety of principal primarily from securities that are obligations of the U.S.
Government, its agencies and instrumentalities ("U.S. Government Securities").
It is a fundamental policy of the Portfolio that under normal conditions at
least 80% of the value of its net assets will be invested in U.S. Government
Securities. Securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities are generally considered to be of the same or
higher credit quality as privately issued securities rated Aaa by Moody's or AAA
by S&P.

HIGH-YIELD BOND PORTFOLIO

The objective of the High-Yield Bond Portfolio is maximum current income,
primarily from debt securities that are rated Ba or lower by Moody's or BB or
lower by Standard & Poor's.

It is a fundamental policy of the Portfolio that it will invest at least 80% of
the value of its total assets

THE ENTERPRISE Group of Funds, Inc.

15
<PAGE> 86

(except when maintaining a temporary defensive position) in high-yielding,
income-producing corporate bonds that are rated B3 or better by Moody's or B- or
better by S&P. The corporate bonds in which the Portfolio invests are
high-yielding but normally carry a greater credit risk than bonds with higher
ratings. In addition, such bonds, commonly referred to as "junk bonds", may
involve greater volatility of price than higher-rated bonds. For a discussion of
high-yield securities and related risks, see "Certain Investment Techniques and
Associated Risks".

Subject to the restrictions described above, under normal circumstances, up to
20% of the Portfolio's assets may include: (1) bonds rated Caa by Moody's or CCC
by S&P; (2) unrated debt securities which, in the judgment of the Portfolio
Manager have characteristics similar to those described above; (3) convertible
debt securities; (4) puts, calls and futures as hedging devices; (5) foreign
issuer debt securities; and (6) short-term money market instruments, including
certificates of deposit, commercial paper, U.S. Government Securities and other
income-producing cash equivalents. For a discussion on puts, calls, and futures
and their related risks, see "Certain Investment Techniques and Associated
Risks".

TAX-EXEMPT INCOME PORTFOLIO

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in the over-the-counter market. Such securities may have fixed, variable or
floating rates of interest. See the Appendix to this Prospectus for a further
description of Municipal Securities.

Investment grade securities are: bonds rated within the three highest ratings by
Moody's (Aaa, Aa, A) or S&P (AAA, AA, A); notes given one of the three highest
ratings by Moody's (MIGl, MIG2, MIG3) for notes; commercial paper rated P-l by
Moody's or A-1 by S&P; and variable rate securities rated VMIGl or VMIG2 by
Moody's.

The Portfolio will not invest more than 20% of its net assets in Municipal
Securities the interest on which is subject to federal alternative minimum tax.

FLEXIBLE PORTFOLIO

MANAGED PORTFOLIO

The objective of the Managed Portfolio is 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 the Portfolio Manager's
assessments of the relative outlook for such investments. In seeking to achieve
its investment objective, the types of equity securities in which the Portfolio
may invest will be the same as those in which the Equity Portfolios invest. Debt
securities are expected to be predominantly investment grade intermediate to
long term U.S. Government and corporate debt, although the Portfolio will also
invest in high quality short term money market and cash equivalent securities
and may invest almost all of its assets in such securities when the Manager
deems it advisable in order to preserve capital. In addition, the Portfolio may
also invest up to 20% of its assets in foreign securities provided that they are
listed on a domestic or foreign securities exchange or are represented by
American Depository Receipts listed on a domestic securities exchange or traded
in the United States over-the-counter market.

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Portfolio's assets that may, at any given time, be invested in any of the types
of investments identified above. Consequently, while the Portfolio will earn
income to the extent it is invested in bonds or cash equivalents, the Portfolio
does not have any specific income objective.

MONEY MARKET PORTFOLIO

The investment objective of the Money Market Portfolio is to provide the highest
possible level of current income, consistent with preservation of capital and
liquidity. Securities in which the Portfolio will invest may not yield as high a
level of current income as securities of lower quality and longer maturity which
generally have less liquidity and greater market risk. The Money Market
Portfolio seeks to achieve its objective by investing in a diversified portfolio
of high quality money market instruments, comprised of U.S. dollar-denominated
instruments which present minimal credit risks and are of eligible quality which
consist of the following:

3. short-term corporate debt instruments (commercial paper or variable amount
master demand notes) rated "A-1" or "A-2" by S&P or "Prime 1" or "Prime 2" by
Moody's or Tier 1 by any two Nationally Recognized Statistical Rating
Organization (NRSRO), or, if not rated, issued by a company rated at least
"A" by any two NRSROs and about which the Board of Directors of the Fund has
ratified the Portfolio Manager's independent determination that the
instrument presents minimal credit risks and is of high quality; however,
investments in securities of all issuers having the second highest overall
rating (A-2/P-2) assigned shall be limited to no more than five percent of
the Portfolio's assets at the time of purchase, with the investment of any
one such issuer being limited to not more than one percent of Portfolio
assets at the time of purchase;

4. corporate obligations limited to non-convertible corporate debt securities
having one year or less remaining to maturity and which are rated "AA" or
better by S&P or "Aa" or better by Moody's; and

5. repurchase agreements with respect to any of the foregoing obligations.

The Money Market Portfolio will limit its investment in the securities of any
one issuer to no more than five percent of Portfolio assets, measured at the
time of purchase.

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the net assets of the Money Market Portfolio, taken at market value would be
invested in such securities.

The dollar weighted average maturity of the Money Market Portfolio will be 90
days or less.

1. of those rated in the two highest rating categories by any nationally
recognized statistical rating organization (NRSRO), or

2. if the instrument is not rated, of comparable quality as determined by the
Board of Directors.

CERTAIN
INVESTMENT
TECHNIQUES AND
ASSOCIATED RISKS

GENERAL RISKS ASSOCIATED WITH EQUITY PORTFOLIOS

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of trading of small capitalization companies may subject their stocks to greater
price deviations than stocks of larger companies.

GENERAL RISKS ASSOCIATED WITH INCOME PORTFOLIOS

GENERAL RISKS ASSOCIATED WITH FLEXIBLE PORTFOLIO

The foregoing types of risks associated with equity and income portfolios also
apply to flexible portfolios.

U.S. GOVERNMENT SECURITIES

MORTGAGE-RELATED SECURITIES AND
ASSET-BACKED SECURITIES

While there are many versions of CMOs and asset backed securities, some include
"Interest Only" or "IO" -- where all interest payments go to one class of

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holders, "Principal Only" or "PO" -- where all of the principal goes to a second
class of holders, "Floaters" -- where the coupon rate floats in the same
direction as interest rates and "Inverse Floaters" -- where the coupon rate
floats in the opposite direction as interest rates. All these securities are
volatile; they also have particular risks in differing interest rate
environments as described below.

The yield to maturity on an IO class is extremely sensitive to the rate of
principal payments (including prepayments) on the related underlying mortgage
assets, and a rapid rate of principal payments may have a material adverse
effect on yield to maturity and, therefore, the market value of the IO. As
interest rates rise and fall, the value of IOs tends to move in the same
direction as interest rates. Accordingly, investment in IOs can theoretically be
expected to contribute to stabilizing a Portfolio's net asset value. However, if
the underlying mortgage assets experience greater than anticipated prepayments
of principal, the Portfolio may fail to fully recoup its initial investment in
these securities even if the securities are rated AAA or the equivalent.
Conversely, while the yield to maturity on a PO class is also extremely
sensitive to rate of principal payments (including prepayments) on the related
underlying mortgage assets, a slow rate of principal payments may have a
material adverse effect on yield to maturity and therefore the market value of
the PO. As interest rates rise and fall, the value of POs tends to move in the
opposite direction from interest rates. This is typical of most debt
instruments. See "General Risks Associated With Income Portfolios".

Floaters and Inverse Floaters ("Floaters") are extremely sensitive to the rise
and fall in interest rates. The coupon rate on these securities is based on
various benchmarks, such as LIBOR ("London Inter-Bank Offered Rate") and the
11th District cost of funds (the base rate). The coupon rate on Floaters can be
affected by a variety of terms. Floaters can be reset at fixed intervals over
the life of the Floater, float with a spread to the base rate, or be a certain
percentage rate minus a certain base rate. Some Floaters have floors below which
the interest rate cannot be reset and/or ceilings above which the interest rate
cannot be reset. The coupon rate and/or market value of Floaters tend to move in
the same direction as the base rate while the coupon rate and/or market value of
Inverse Floaters tend to move in the opposite direction from the base rate.

CMOs and asset-backed securities trade over a bid and ask market through several
large market makers. Due to the complexity and concentration of derivative
securities, the liquidity and, consequently, the volatility of these securities
can be sharply influenced by market demand.

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U.S. Government, its agencies and instrumentalities, and backed by fixed-rate
mortgages may be excluded from this limit, if, in the judgment of the Portfolio
Manager (subject to the oversight of the Board of Directors) such IOs and POs
are readily marketable. The Government Securities Portfolio does not intend to
invest in residual interests, privately issued securities or subordinated
classes of underlying mortgages.

HIGH-YIELD SECURITIES

HIGH-YIELD BOND MARKET

SENSITIVITY TO INTEREST RATE AND ECONOMIC CHANGES

PAYMENT EXPECTATIONS

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reinvest the proceeds received in lower yielding securities, resulting in a
decreased return for investors in the High-Yield Bond Portfolio. In addition,
such redemptions or calls may reduce the High-Yield Bond Portfolio's asset base
over which the Portfolio's investment expenses may be spread.

LIQUIDITY AND VALUATION

TAX CONSIDERATIONS

To the extent that a Portfolio invests in securities structured as zero coupon
bonds, or other securities issued with original issue discount, the Portfolio
will be required to report interest income even though no cash interest payment
is received. Because such income is not represented by cash, the Portfolio may
be required to sell other securities in order to satisfy the distribution
requirements applicable to regulated investment companies under the Internal
Revenue Code ("IRC").

PORTFOLIO COMPOSITION

As of March 31, 1998, the High-Yield Bond Portfolio consisted of securities
classified as follows:

- ---------------

* Equivalent ratings for these securities would have been CCC to B(3).

DEFENSIVE TACTICS

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HEDGING TRANSACTIONS

CERTAIN SECURITIES

The Portfolios may invest in the following described securities, except as
otherwise indicated. These securities are commonly referred to as derivatives. A
Portfolio's investment in such securities, in the aggregate, may not exceed 5%
of net assets at the time of investment; provided, however, that the
International Growth Portfolio, the High-Yield Bond Portfolio, and the
Government Securities Portfolio may invest up to 20% of their net assets in such
securities.

CALL OPTIONS

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of a decline in securities prices during the term of the option, the probability
that closing purchase transactions will be available if a sale of the securities
is desired prior to the exercise, or expiration of the options, and the cost of
entering into such transactions. A principal reason for writing calls on a
securities portfolio is to attempt to realize, through the receipt of premium
income, a greater return than would be earned on the securities alone. A covered
call writer such as a Portfolio, which owns the underlying security, has, in
return for the premium, given up the opportunity for profit from a price
increase in the underlying security above the exercise price, but it has
retained the risk of loss should the price of the security decline.

PUTS

ENTERING INTO FUTURES CONTRACTS

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INDEX OPTIONS

Because the value of an index option depends primarily on movements in the value
of the index rather than in the price of a single security, whether a Portfolio
will realize a gain or loss from purchasing or writing an option on a stock
index depends on movements in the level of stock prices in the stock market
generally or, in the case of certain indexes, in an industry or market segment
rather than changes in the price of a particular security. Consequently,
successful use of stock index options by a Portfolio will depend on that
Portfolio Manager's ability to predict movements in the direction of the stock
market generally or in a particular industry. This requires different skills and
techniques than predicting changes in the value of individual securities.

INTEREST RATE SWAPS

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maintained in a segregated account by the Portfolio's custodian bank.

FOREIGN CURRENCY VALUES AND TRANSACTIONS

The normal currency allocation of the International Growth Portfolio is
identical to the currency mix of the Benchmark. The Portfolio expects to
maintain this normal currency exposure when global currency markets are fairly
priced relative to each other and relative to associated risks. The Portfolio
may actively deviate from such normal currency allocations to take advantage of
or to protect the Portfolio from risk and return characteristics of the
currencies and short-term interest rates when those prices deviate significantly
from fundamental value. Deviations from the Benchmark are determined by the
Portfolio Manager based upon its research.

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CERTAIN OTHER SECURITIES

Except as otherwise indicated, the Portfolios may purchase the following
securities, the purchase of which involves certain risks described below. Unless
otherwise indicated, a Portfolio will not purchase a category of such securities
if the value of such category, taken at current value, would exceed 5% of the
Portfolio's total assets.

MASTER DEMAND NOTES

REPURCHASE AGREEMENTS

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seller should default on its obligation to repurchase the securities, the
Portfolio may experience delays, difficulties or other costs when selling the
securities held as collateral and may incur a loss if the value of the
collateral declines. The appropriate Portfolio Managers, subject to the overall
review by the Fund's Directors and Enterprise Capital, monitor the value of the
collateral as to repurchase agreements, and they monitor the creditworthiness of
the seller and must find it satisfactory before engaging in repurchase
agreements. The Portfolios enter into repurchase agreements only with Federal
Reserve member banks that have net worth of at least $100,000,000 and
outstanding commercial paper of the two highest rating categories assigned by
Moody's or S&P or with broker-dealers that are registered with the Securities
and Exchange Commission, are members of the National Association of Securities
Dealers, Inc. ("NASD") and have similarly rated commercial paper outstanding.
Any repurchase agreements entered into by the Portfolios will be fully
collateralized and marked to market daily, other than those entered into by the
Money Market Portfolio, which are valued on an amortized cost basis.

RESTRICTED OR ILLIQUID SECURITIES

All of the Portfolios may invest up to 10% of the assets of the Portfolios in
restricted securities (privately placed equity or debt securities) or other
securities which are not readily marketable.

FOREIGN SECURITIES

FORWARD COMMITMENTS

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purchase costs than would be available for securities purchased for immediate
delivery. Securities purchased on a when issued or forward delivery basis
involve a risk that the value of the security to be purchased may decline prior
to the settlement date. In addition, if the dealer through which the trade is
made fails to consummate the transaction, the Portfolio may lose an advantageous
yield or price. The Fund does not accrue income prior to delivery of the
securities in the case of forward commitment purchases. The 5% limitation does
not apply to the International Growth, Government Securities and Tax-Exempt
Income Portfolios which will have a 20% limitation.

PORTFOLIO TURNOVER

In carrying out the investment policies described in this Prospectus, each
Portfolio expects to engage in a substantial number of securities portfolio
transactions, and the rate of portfolio turnover will not be a limiting factor
when a Portfolio Manager deems it appropriate to purchase or sell securities for
a Portfolio. However, no Portfolio's annual portfolio turnover rate (other than
the High-Yield Bond Portfolio and the Money Market Portfolio for which, due to
the short-term nature of its investment, a portfolio turnover rate is not
applicable and the High-Yield Bond Portfolio) is expected to exceed 100%.

A portfolio turnover rate is, in summary, the percentage computed by dividing
the lesser of a Portfolio's purchases or sales of securities by the average
investments of the Portfolio. High portfolio turnover involves correspondingly
greater brokerage commissions and other transaction costs which are borne
directly by a Portfolio. Each Portfolio intends to elect and to comply with the
various provisions of the Internal Revenue Code so as to qualify as a "regulated
investment company" thereunder. (See "Taxes".)

INVESTMENT
RESTRICTIONS

Except as indicated, each of the Portfolios has adopted certain investment
restrictions and limitations for the purpose of reducing their exposure in
specific situations.

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temporary or emergency purposes, and such borrowings will not exceed 5% of the
lower of the value or cost of the Portfolio's total assets; or (6) pledge,
mortgage or hypothecate its assets to an extent greater than 5% of the value of
its total assets. For purposes of restrictions (1) and (2), each Portfolio will
regard the entity which has ultimate responsibility for the payment of interest
and principal as the issuer. Notwithstanding restriction (4), the Money Market
Portfolio may invest in excess of 25% of its total assets in U.S. Government
Securities as well as its agencies and instrumentalities, and certain bank
instruments issued by domestic banks. See "Investment Restrictions" in the
Statement of Additional Information.

In order to qualify for federal income tax treatment as a regulated investment
company for a taxable year, each Portfolio must, among other things, (a) derive
at least 90% of its gross income during such taxable year from qualifying income
(i.e., dividends, interest, payments with respect to loans of stock and
securities, and gains from the sale or other disposition of stock or securities
or options thereon); and (b) diversify its holdings so that, at the end of each
fiscal quarter of such taxable year, (i) at least 50% of the market value of its
total assets is represented by cash, cash items, U.S. Government Securities,
securities of other regulated investment companies, and other securities
limited, in the case of other securities for purposes of this calculation, in
respect of any one issuer, to an amount not greater than 5% of the value of its
total assets or 10% of the voting securities of the issuer, and (ii) not more
than 25% of the value of its assets is invested in the securities of any one
issuer (other than U.S. Government Securities).

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HOW TO PURCHASE
PORTFOLIO SHARES

The four Classes also have separate exchange privileges. (See "How to Exchange
Shares Among the Portfolios.") The income attributable to each class and the
dividends payable on the shares of each class will be reduced by the amount of
the distribution fee or service fee, if any, payable by that class.

Class Y shares do not bear a sales charge or distribution fee. Institutional
investors eligible to purchase Class Y shares include banks, savings
institutions, trust companies, insurance companies, investment companies as
defined by the Investment Company Act of 1940, pension or profit sharing trust,
certain wrap account clients of broker/dealers, former shareholders of
Retirement System Investors, Inc. ("RSI"), direct referrals of Portfolio
Managers or EAI, or other financial institutional buyer. Wrap account clients of
broker/dealers, former RSI shareholders, and direct referrals of Portfolio
Managers or Evaluation Associates, Inc. ("EAI") are offered Class Y shares at a
lower minimum purchase amount.

For accounts with balances under $1,000 as of July 31, an annual service charge
of $25 per account registration per Portfolio will apply.

Portfolio shares are purchased at the net asset value next determined after the
application for purchase of shares is received by the Enterprise Shareholder
Services Division of the Fund's Transfer Agent, National Financial Data
Services, Inc. (the "Transfer Agent"). The Distributor or the Fund may reject
any orders.

DEALER COMPENSATION. Enterprise Distributors will provide additional
compensation to dealers in connection with sales of shares of the Funds and
other mutual funds distributed by Enterprise Distributors ("Enterprise Funds")
including promotional gifts (which may include gift certificates, dinners and
other items), financial assistance to dealers in connection with conferences,
sales or training programs for their employees, seminars for the public and
advertising campaigns. In some instances, these incentives may be made available
only to dealers whose representatives

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have sold or are expected to sell significant amounts of shares.

In addition to distribution and service fees paid the Fund under Class A, Class
B and Class C Plans, Enterprise Capital (or one of its affiliates) may make
payments to dealers (including MONY Securities Corp.) and other persons which
distribute shares of the Funds (including Class Y shares). Such payments may be
calculated by reference to the net asset value of shares sold by such persons or
otherwise.

Share Certificates. The Fund does not ordinarily issue certificates
representing shares of the Portfolios. Instead, shares are held on deposit for
shareholders

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by the Fund's Transfer Agent, which sends a statement of shares owned in each
Portfolio to shareholders following each transaction in the shareholder's
account. Certificates for full shares only (other than the Money Market
Portfolio) are available at no charge at any time upon written request to the
Transfer Agent. Special shareholder services such as telephone redemptions,
exchanges, electronic funds transfers and wire orders are not available as to
certificated shares.

SHAREHOLDER
SERVICES

For the convenience of investors, the following plans are available:

AUTOMATIC REINVESTMENT PLAN

AUTOMATIC INVESTMENT PLAN

BANK PURCHASE AND REDEMPTION PLAN

Any investor may initiate an ACH (Automatic Clearing House) Purchase or
Redemption directly to a bank account when proper instructions have been
established on the account.

RETIREMENT PLANS

Shareholders may adopt Profit Sharing Plan, Money Purchase Plan and other
retirement plans funded by Portfolio shares and other investment which plans
have been approved by the Internal Revenue Service.

HOW TO EXCHANGE
SHARES AMONG THE
PORTFOLIOS

An exchange represents the sales of shares of one fund and the purchase of
shares of another, which may produce a gain or loss for tax purposes. Class Y
shares may be exchanged for Class Y shares of any other Portfolio. Class Y
shares cannot be exchanged for Class A, B or C shares.

Shares of a Portfolio will be processed at the net asset value next determined
after the Transfer Agent receives your exchange request. The exchange feature
may be modified or discontinued at any time, upon notice to shareholders.

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Exchanges may be directed by:
1. calling: Enterprise Shareholder Services
1-800-368-3527

2. writing: Enterprise Shareholder Services
P.O. Box 419731
Kansas City, MO 64141-6731

Before engaging in an exchange transaction, a shareholder should read carefully
the parts of this Prospectus describing the Portfolio into which the exchange
will occur. See "Investment Objectives and Policies of the Portfolios."
Shareholders must elect to authorize the Fund's transfer agent to act upon
telephone exchange requests. Shareholders are subject to risk should they elect
to exchange by telephone in that neither the Fund nor the Transfer Agent will be
liable for properly acting upon telephone instructions believed to be genuine.
The Fund employs reasonable procedures to confirm that instructions communicated
by telephone are genuine, and should the Fund or its transfer agent fail to
institute such procedures, the Fund may be liable for any losses due to
unauthorized or fraudulent instructions. Telephone exchanges are activated by
instructions received from a shareholder or any person claiming to act as the
shareholder's representative who can provide the Transfer Agent with account
registration information.

Exchanges are taxable as redemptions on which gains or losses may be recognized.

HOW TO REDEEM
PORTFOLIO SHARES

REDEMPTIONS

Redemptions may be made: (1) by telephone; (2) in writing; or (3) by wire, if
the appropriate request forms have been submitted. Payment for shares re-

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deemed will be made within seven days after the request has been properly made
and received. Shares purchased by check may be redeemed once the check has
cleared, which may take up to 10 days.

TELEPHONE REDEMPTIONS

The Fund accepts telephone requests for redemptions from shareholders who have
authorized this service. Telephone requests for redemption may be made by
calling the Transfer Agent at 1-800-368-3527. Anyone making a telephone
redemption request must furnish: (1) the name and address of record of the
registered owner(s); (2) the account number; (3) the amount to be withdrawn; and
(4) the name of the person making the request. Checks for telephone redemptions
will be issued only to the registered shareowner(s) and mailed to the last
address of record or exchanged into any other Portfolio. All telephone
redemption instructions are recorded and are limited to requests of $50,000 or
less. Shareholders also have the option to have redemption proceeds transferred
directly to a bank account through the Automatic Clearing House (ACH) system.
All applicable bank information must be established on the account before this
type of redemption is initiated. Shareholders are subject to risk should they
elect to redeem by telephone in that neither the Fund nor the Transfer Agent
will be liable for properly acting upon telephone instructions believed to be
genuine. Should the Fund or its transfer agent fail to utilize reasonable
procedures, the Fund may be liable for any losses due to unauthorized or
fraudulent instructions.

WRITTEN REDEMPTIONS

Redemption requests may be made in writing, accompanied by any issued share
certificates, to:

Enterprise Shareholder Services
P.O. Box 419731
Kansas City, MO 64141-6731

WIRE REDEMPTIONS

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the proceeds of a wire redemption request may be delayed by the Fund for up to
seven days if the Fund deems it appropriate under the then current market
conditions. Once authorization is on file, the Transfer Agent will honor
requests by any authorized person at 1-800-368-3527. This privilege may not be
used to redeem shares in certificated form. To change the name of the single
designated bank account to receive wire redemption proceeds, it is necessary to
send a written request with signature(s) guaranteed to the Transfer Agent.

REDEMPTIONS -- GENERAL

The Fund may redeem its shares in cash or with a pro rata portion of the assets
of the appropriate Portfolio. To date, all redemptions have been made in cash,
and the Fund anticipates that all redemptions will be made in cash in the
future, but it reserves the right to provide redemptions in assets of a
Portfolio should considerations and the size of the Portfolio require that
method of redemption. The Fund has elected to commit itself to pay in cash all
requests for redemption by any shareholder of record, limited in amount with
respect to each shareholder during any 90-day period to the lesser of: (i)
$250,000 or (ii) 1% of the net asset value of the Portfolio at the beginning of
such period.

The Fund reserves the right to redeem an account at its option upon not less
than 45 days' written notice if an account's net asset value is $500 or less and
remains so during the notice period.

PERFORMANCE
COMPARISONS

From time to time, articles about the Fund regarding its performance or ranking
may appear in national publications such as Kiplinger's Personal Finance
Magazine, Money Magazine, Financial World, Morningstar, Dalbar, Value Line
Mutual Fund Survey, Personal Investors, Forbes, Fortune, Business Week, Wall
Street Journal, Donaghue and Barron's. Some of these publications may publish
their own rankings or performance reviews of mutual funds, including the Fund.
Reference to or reprints of such articles may be used in the Fund's promotional
literature.

From time to time, the Fund may advertise a Portfolio's "yield" and "total
return." Total return and yield are calculated separately for Class A, Class B,
Class C and Class Y shares. For Portfolios other than the Money Market
Portfolio, the yield for any 30-day (or one month) period is computed by
dividing the net investment income per share earned during such Period by the
maximum public offering price per share

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on the last day of the period, and then annualizing such 30-day (or one month)
yield in accordance with a formula prescribed by the Securities and Exchange
Commission which provides for compounding on a semiannual basis.

Advertisements of the Portfolio's total return disclose the Portfolio's average
annual compounded total return for its most recently completed fiscal year and
the appropriate periods since the Portfolio's inception. The Portfolio's total
return for each such period is computed by finding, through the use of a formula
prescribed by the Securities and Exchange Commission, the average annual
compounded rates of return over the period that would equate an assumed initial
amount invested to the value of the investment at the end of the period. For
purposes of computing total return, income dividends and capital gains
distributions paid on shares of the Portfolio are assumed to have been
reinvested when received and the front end sales charge applicable to sales of
the Portfolio shares (other than the Money Market Portfolio) is assumed to have
been paid.

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MANAGEMENT OF THE FUND

DIRECTORS

INVESTMENT ADVISER ARRANGEMENTS

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issues which remain unresolved or have been identified as unresolvable. In
addition, Enterprise Capital has established a timetable to periodically
re-evaluate systems to ensure that new issues or those which may not previously
have been identified are addressed and resolved in an expeditious manner.
Enterprise Capital does not anticipate any material expenditures for monitoring
Year 2000 issues.

PORTFOLIO MANAGERS

The following sets forth certain information about each of the Portfolio
Managers, the annual rate of compensation as a percentage of the Portfolio's net
assets paid to Enterprise Capital ("Management Fee") and the portion of the
Management Fee that Enterprise Capital pays to the respective Portfolio
Managers. Typical minimum investment requirements for the Portfolio Managers
range from $1,000,000 to $35,000,000. Due to these high minimums, this level of
professional management was previously reserved for institutional investors and
high net worth individuals. Collectively, the Portfolio Managers manage assets
in excess of $280 billion.

GROWTH PORTFOLIO

GROWTH AND INCOME PORTFOLIO

The Portfolio Manager of the Growth and Income Portfolio is Retirement System
Investors Inc. ("RSI") which is a subsidiary of Retirement Group Inc. Its
address is 317 Madison Ave., New York, New York 10017. James P. Coughlin,
President and Chief Investment Officer, is responsible for the day-to-day
management of the Portfolio and has more than 30 years experience in the
investment industry. He has been with RSI since 1984. Total assets under
management for Retirement Investors Inc. was $ million as of March 31, 1998.
The Management Fee is .75%, and the Portfolio Manager receives 40% of that fee
for assets under management up to $100,000,000; .25% on the next $100,000,000;
and .20% for assets greater than $200,000,000.

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EQUITY PORTFOLIO

The Portfolio Manager of the Equity Portfolio is OpCap Advisors which is a
subsidiary of Oppenheimer Capital, a general partnership. OpCap's address is One
World Financial Center, New York, New York 10281. Eileen Rominger, Managing
Director of Oppenheimer Capital, is responsible for the day-to-day management of
the Portfolio. Ms. Rominger has more than 19 years experience in the investment
industry and has been at Oppenheimer Capital since 1981. The Portfolio Manager
had approximately $ billion under management as of March 31, 1998. Usual
investment minimum is $10 million. Representative clients include Pacific
Telesis Group, Caterpillar, Inc. and New York State Electric & Gas. The
management fee is .75% and the Portfolio Manager receives .40% for assets under
management up to $100,000,000 and .30% of that fee thereafter.

EQUITY INCOME PORTFOLIO

CAPITAL APPRECIATION PORTFOLIO

The Portfolio Manager of the Capital Appreciation Portfolio is Provident
Investment Counsel, Inc. ("PIC"). PIC traces its origins to an investment
partnership formed in 1951. PIC is a wholly-owned subsidiary of United Asset
Management, Inc. Its address is 300 North Lake Avenue, Pasadena, California
91101. Jeffrey J. Miller is a Managing Director of the firm and is responsible
for the day-to-day management of the Portfolio. He has more than 25 years
experience in the investment industry. He has been with PIC since 1972. As of
March 31, 1998, total assets under management for all clients were $
billion. Usual investment minimum: $5 million. Representative clients include:
Bell Atlantic, McGraw-Hill and International Paper Co. The management fee is
.75% and the Portfolio Manager receives .50% for assets under management up to
$100,000,000; .45% for assets under management for the next $100,000,000; .35%
for assets greater than $200,000,000 up to $300,000,000; and .30% thereafter.

SMALL COMPANY GROWTH PORTFOLIO

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<PAGE> 112

of the Portfolio and have more than 40 years combined experience in the
investment industry. Mr. Pilgrim and Mr. Jones have been employed by Pilgrim
Baxter since 1982 and 1991, respectively. As of March 31, 1998, total assets
under management for all clients were $ billion. Usual investment minimum:
$20 million. The management fee is 1.00% and the Portfolio Manager receives .65%
for assets under management up to $50 million; and .55% for assets under
management for the next $50 million; and .45% for assets thereafter.

SMALL COMPANY VALUE PORTFOLIO

The Portfolio Manager of the Small Company Value Portfolio is GAMCO Investors,
Inc. ("GAMCO"). GAMCO is a wholly-owned subsidiary of Gabelli Funds, Inc. Its
offices are located at One Corporate Center, Rye, New York 10580. GAMCO's
predecessor, Gabelli & Company, Inc., was founded in 1977 by Mario J. Gabelli
who has served as its chief investment officer since inception. He is
responsible for the day-to-day management of the Portfolio. He has more than 27
years of experience in the investment industry. As of March 31, 1998, total
assets under management for all clients were $ billion. Usual investment
minimum is $1 million. The Management Fee is .75% and the Portfolio Manager
receives .40% for assets under management up to $1 billion and .30% for assets
in excess of $1 billion.

INTERNATIONAL GROWTH PORTFOLIO

The Portfolio Manager of the International Growth Portfolio is Brinson Partners,
Inc. ("Brinson"). Brinson Partners is a wholly-owned subsidiary of UBS (United
Bank of Switzerland). Brinson's address is 209 South LaSalle Street, Chicago,
Illinois 60604. Day-to-day management of this Portfolio is performed by a
committee. As of March 31, 1998, Brinson's assets under management for all
clients approximated $ billion. Usual investment minimum: $25 million. The
Management Fee is .85%, and the Portfolio Manager receives .45% for assets under
management up to $100 million; .35% for assets under management from
$100,000,000 to $200,000,000; .325% for assets from $200,000,000 to
$500,000,000; and .25% for assets greater than $500,000,000.

GOVERNMENT SECURITIES PORTFOLIO

The Portfolio Manager of the Government Securities Portfolio is TCW Funds
Management, Inc. The firm, founded in 1971, is a wholly-owned subsidiary of TCW
Management Company, a Nevada corporation, whose direct and indirect
subsidiaries, including Trust Company of the West and TCW Asset Management
Company, provide a variety of trust, investment management and investment
advisory services. The firm's address is 865 South Figueroa Street, Suite 1800,
Los Angeles, California 90017. Philip A. Barach, Managing Director, and Jeffrey
E. Gundlach, Managing Director, are responsible for the day-to-day investment
management of the Portfolio and have more than 35 years combined experience in
the investment industry. They joined TCW in 1992. As of March 31, 1998 TCW and
its affiliated companies had approximately $ billion under management or
committed for management in various fiduciary and advisory capacities. Usual
investment minimum: $35 million. The management fee is .60% and the Portfolio
Manager receives .30% for assets under management up to

THE ENTERPRISE Group of Funds, Inc.

42
<PAGE> 113

4$50,000,000 and .25% for assets under management greater than $50,000,000.

HIGH-YIELD BOND PORTFOLIO

The Portfolio Manager of the High-Yield Bond Portfolio is Caywood-Scholl Capital
Management ("Caywood-Scholl"). This firm was formed in 1986 and is owned by its
employees. Caywood-Scholl Capital Management's address is 4350 Executive Drive,
Suite 125, San Diego, California 92121. James Caywood, Managing Director and
Chief Executive Officer, is responsible for the day-to-day management of the
Portfolio. He has more than 29 years of investment industry experience. He
joined Caywood-Scholl in 1986. Caywood-Scholl provides investment advice
exclusively with respect to high yield, low grade fixed income instruments. As
of March 31, 1998, assets under management for all clients approximated $
million. Usual investment minimum: $1 million. The management fee is .60%, and
the Portfolio Manager receives .30% for assets up to $100,000,000 and .25% for
assets above $100,000,000.

TAX-EXEMPT INCOME PORTFOLIO

The Portfolio Manager of the Tax-Exempt Income Portfolio is MBIA Capital
Management Corp. ("MBIA"). It is a wholly-owned subsidiary of MBIA, Inc. MBIA's
address is 113 King Street, Armonk, New York 10504. Day-to-day management of the
Portfolio is performed by Robert M. Ohanesian, President and Chief Investment
Officer; and Gary S. Meserole, CFA, Vice President and Portfolio Manager, who
have combined experience of more than 38 years in the investment industry. Usual
investment minimum: $10 million fee. Mr. Ohanesian joined MBIA in 1994 and
previously served as Director of Investments for Shields Asset Management. Mr.
Meserole joined MBIA in 1995 and previously served as Vice President of MBIA
Insurance Corporation. As of March 31, 1998, assets under management for all
clients approximated $ billion. The management fee is .50% and the Portfolio
Manager receives .25% for assets up to $50,000,000 and .30% thereafter.

MANAGED PORTFOLIO

MONEY MARKET PORTFOLIO

THE ENTERPRISE Group of Funds, Inc.

43
<PAGE> 114

May 1, 1992. Total money market assets in the Portfolio at March 31, 1998,
approximated $
million. The Management Fee is .35%.

PAYMENT OF EXPENSES

The Investment Advisory Agreement obligates Enterprise Capital to provide
investment advisory services to the Portfolios of the Fund and to furnish the
Fund with certain administrative, clerical, bookkeeping and statistical
services, office space and facilities and for paying the compensation of the
officers of the Fund. Each Portfolio pays all other expenses incurred in its
operation, and a portion of the Fund's general administrative expenses is
allocated to each Portfolio either on the basis of its asset size, on the basis
of special needs of such Portfolio, or equally, as is deemed appropriate. These
expenses include expenses such as: custodial, transfer agent, brokerage,
auditing and legal services, the printing of Prospectuses sent to existing
shareholders, expenses relating to bookkeeping and recording and determining the
net asset value of shares, and the expenses of qualification of a Portfolio's
shares under the federal and state securities laws. The Fund's Board of
Directors annually reviews allocation of expenses among the Portfolios.

Enterprise Capital has advised the Fund that it will reimburse such portion of
the fees due to it under the Investment Adviser's Agreement as is necessary to
assure, for the period commencing January 1, 1998 and ending no earlier than
December 31, 1998, that expenses incurred by the Portfolios will not exceed the
following percentages of average annual assets for the Y Class (annualized for
periods of less than a fiscal year): Growth 1.15%; Growth and Income 1.05%;
Equity 1.15%; Equity Income 1.05%; Capital Appreciation 1.30%; Small Company
Growth 1.40%; Small Company Value 1.30%; International Growth 1.55%; Government
Securities 0.85%; High-Yield Bond 0.85%; Tax-Exempt Income 0.65%; Managed 1.30%
and Money Market 0.70%. The Portfolio Managers have advised the Fund that they
may assist in a portion of the above-referenced reimbursement from time to time.

Enterprise Capital and the Fund entered into agreements pursuant to which
Enterprise Capital advanced on behalf of the Fund $33,748 to cover the costs of
expanding the series to include a Small Company Value Portfolio; $34,116 of
expanding the series to include a Managed Portfolio; and approximately $40,378
for the Equity Portfolio and completing the appropriate registrations under the
Investment Company Act of 1940, the Securities Act of 1933, and certain state
securities laws. The agreements provide that these amounts will be repaid by
each Portfolio, in five equal annual increments without interest, commencing at
the end of the first fiscal year at which each such Portfolio have total net
assets of $5 million or more. Each Portfolio has commenced such payments.

TAXES

Each Portfolio of the Fund has qualified and intends to continue to qualify as a
"regulated investment company" in 1998 under the provisions of the IRC, as
amended. For purposes of the IRC, each Portfolio is regarded as a separate
regulated investment company. If any Portfolio qualifies as a "regulated
investment company" and complies with provisions of the IRC which require
regulated investment companies to distribute substantially all of their net
income (both ordinary income and capital gain), the Portfolio will

THE ENTERPRISE Group of Funds, Inc.

44
<PAGE> 115

be relieved of federal income tax on the amounts distributed to shareholders.

Dividends declared out of a Portfolio's net investment income, taking account of
its net realized short-term capital gains to the extent that they exceed its net
realized long-term capital losses are taxable to its shareholders as ordinary
income, whether such dividends are received in cash or additional shares. If,
for any taxable year, a Portfolio complies with certain requirements, some or
all of the dividends (excluding capital gain dividends, as defined in the IRC)
received by the Portfolio's corporate shareholders may qualify for the 70%
dividends received deduction available to corporations. Dividends paid by the
Income Portfolios and the International Growth Portfolio are not expected to be
eligible for dividends received deductions.

Distributions declared out of a Portfolio's realized net capital gain (realized
net capital gains from the sale of assets held for more than 12 months in excess
of realized net short-term capital losses) and designated by the Portfolio as a
capital gain dividend in a written notice to the shareholders are taxable to
such shareholders as capital gain without regard to the length of time a
shareholder has held stock of the Portfolio and regardless of whether paid in
cash or additional shares. Recent legislation created several classes of capital
gains.

The Portfolios may be required to withhold for federal income taxes 31%
("Back-Up Withholding") of the distributions and the proceeds of redemptions
payable to shareholders who fail to comply with regulations requiring that they
provide a correct social security or taxpayer identification number or to make
required certifications, or who have been notified by the Internal Revenue
Service that they are subject to Back-up Withholding. Corporate shareholders and
certain other shareholders specified in the IRC are exempt from Back-Up
Withholding.

Distributions from retirement plans are also subject to 20% federal withholding
if the shareholder fails to provide a tax identification number to the trustee
or custodian and funds are not rolled over.

No gain or loss will be recognized by Class B shareholders upon the conversion
of Class B shares into Class A shares.

Upon a sale or exchange of its shares, a shareholder will realize a taxable gain
or loss depending on its basis in the shares. Such gain or loss will be treated
as capital gain or loss if the shares are capital assets in the shareholder's
hands. In the case of an individual, any such capital gain will be treated as
short-term capital gain if the shares were held for not more than 12 months,
gain taxable at the maximum rate of 28% if such shares were held for more than
12, but not more than 18 months, and gain taxable at the maximum rate of 20% if
such shares were held for more than 18 months. In the case of a corporation, any
such capital gain will be treated as long-term capital gain, taxable at the same
rates as ordinary income, if such shares were held for more than 12 months. Any
such capital loss will be long-term capital loss if the shares were held for
more than 12 months. A sale or exchange of shares held for six months or less,
however, will be treated as long-term capital loss to the extent of any
long-term capital gains distributions with respect to such shares.

Generally, any loss realized on a sale or exchange of shares of the Fund will be
disallowed if other Fund shares are acquired (whether through the automatic

THE ENTERPRISE Group of Funds, Inc.

45
<PAGE> 116

reinvestment of dividends or otherwise) within a 61-day period beginning 30 days
before and ending 30 days after the date that the shares are disposed of. In
such a case, the basis of the shares acquired will be adjusted to reflect the
disallowed loss.

In certain circumstances (e.g., an exchange), a shareholder who has held shares
in a Portfolio for not more than 30 days may not be allowed to include certain
sales charges incurred in acquiring such shares for purposes of calculating gain
or loss realized upon the sale or exchange of shares of the Portfolio.

TAX-EXEMPT INCOME PORTFOLIO

Dividends derived from interest on Municipal Securities and designated by the
Portfolio as exempt interest dividends by written notice to the shareholders,
under existing law, are not subject to federal income tax. Dividends derived
from net capital gains realized by the Portfolio are taxable to shareholders as
a capital gain upon distribution. Any short-term capital gains or any taxable
interest income or accrued market discount realized by the Portfolio will be
distributed as a taxable ordinary income dividend distribution. These rules
apply whether such distribution is made in cash or in additional shares. The
percentage of income that is tax-exempt is applied uniformly to all
distributions made by the Portfolio during each year. As with shares in all
Portfolios, a sale, exchange or redemption of shares in the Tax-Exempt Income
Portfolio is a taxable event and may result in capital gain or loss. In
addition, generally any capital loss realized from shares held for six months or
less is disallowed to the extent of tax-exempt dividend income received.

The Tax-Exempt Income Portfolio declares and pays dividends monthly on the last
business day of the month. When a shareholder redeems shares of the Portfolio on
other than a dividend payment date, a portion of the shareholder's redemption
proceeds will represent accrued tax-exempt income which will be treated as part
of the amount realized for purposes of capital gains computations for federal
and state or local income tax purposes and will not be tax-exempt.

Income from certain "private activity" bonds issued after August 7, 1986, are
items of tax preference for the alternative minimum tax at a maximum rate of 28%
for individuals and 20% for corporations. If the Portfolio invests in private
activity bonds, shareholders may be subject to the alternative minimum tax on
that part of such Portfolio distributions derived from interest income on those
bonds. The Tax-Exempt Income Portfolio does not intend to invest more than 20%
of its assets in private activity bonds. In addition, a portion of a
distribution derived from any tax-exempt interest incurred, whether or not from
private activity bonds, will be taken into account in determining the corporate
alternative minimum tax. In higher income brackets, up to 85% of an individual's
Social Security benefits may be subject to federal income tax. Along with other
factors, total tax-exempt income, including any tax-exempt dividend income from
the Portfolio, is taken into account in determining that portion of Social
Security benefits which is taxed.

Any loss realized on this sale or exchange of shares of the Tax-Exempt Income
Portfolio held for six months or less will be disallowed to this effect of any
tax-exempt interest dividend received with respect to such shares.

THE ENTERPRISE Group of Funds, Inc.

46
<PAGE> 117

The treatment for state and local tax purpose of distributions from the
Tax-Exempt Income Portfolio representing Municipal Securities interests will
vary according to the laws of state and local taxing authorities.

FOREIGN INCOME TAXES

Investment income received by a Portfolio from sources within foreign countries
may be subject to foreign income taxes withheld at the source. The United States
has entered into tax treaties with many foreign countries which entitle the
Portfolio to a reduced rate of tax or exemption from tax on such income. It is
impossible to determine the effective rate of foreign tax in advance since the
amount of these Portfolio's assets to be invested within various countries is
not known. The Portfolios intend to operate so as to obtain treaty-reduced rates
of tax where applicable.

To the extent that the International Growth Portfolio is liable for foreign
income taxes withheld at the source, the Portfolio also intends to operate so as
to meet the requirements of the IRC to "pass through" to the Portfolio's
shareholders credits for foreign income taxes paid, but there can be no
assurance that the Portfolio will be able to do so.

EXCISE TAX

The Federal tax laws impose a four percent nondeductible excise tax on each
regulated investment company with respect to the amount, if any, by which such
company does not meet distribution requirements specified in such tax laws. Each
Portfolio of the Fund intends to comply with such distribution requirements and
thus does not expect to incur the four percent nondeductible excise tax.

GENERAL

The foregoing is a general and abbreviated summary of the applicable provisions
of the IRC and Treasury Regulations in effect, as currently interpreted by the
Courts and by the Internal Revenue Service in published revenue rulings and in
private letter rulings and is only applicable to U.S. persons. These
interpretations can be changed at any time. For the complete provisions,
reference should be made to the pertinent Code sections and the Treasury
Regulations promulgated thereunder. The above discussion covers only federal
income tax considerations with respect to the Portfolios and their shareholders.
State and local tax laws vary greatly, especially with regard to the treatment
of exempt-interest dividends. Shareholders should consult their own tax advisers
for more information regarding the federal, state, and local tax treatment of
each Portfolio's shareholders.

Statements indicating the tax status of distributions to each shareholder will
be mailed to each shareholder annually.

DIVIDENDS AND
DISTRIBUTIONS

It is the Fund's intention to distribute substantially all of the net investment
income and realized net capital gains, if any, of each Portfolio. The per share
dividends and distribution on each class of shares of a Portfolio will be
reduced as a result of any service fees applicable to that class. For dividend
purposes, net investment income of each Portfolio will consist

THE ENTERPRISE Group of Funds, Inc.

47
<PAGE> 118

of substantially all dividends received, interest accrued, net short-term
capital gains realized by such Portfolio less the estimated expenses of such
Portfolio.

Unless shareholders request otherwise, by notifying the Fund's Transfer Agent,
dividends and capital gains distributions will be automatically reinvested in
shares of the respective Portfolio at net asset value; such reinvestments
automatically occur on the payment date of such dividends and capital gains
distributions. At the election of any shareholder, dividends or capital gains
distributions, or both, will be distributed in cash to such shareholders.
However, if it is determined that the U.S. Postal Service cannot properly
deliver Fund mailings to the shareholder, the respective Portfolios will
terminate the shareholder's election to receive dividends and other
distributions in cash. Thereafter, the shareholder's subsequent dividends and
other distributions will be automatically reinvested in additional shares of the
respective Portfolios until the shareholder notifies the Transfer Agent or the
Portfolio in writing of his or her correct address and requests in writing that
the election to receive dividends and other distributions in each be reinstated.

Distributions of capital gains from each of the Portfolios, other than the Money
Market Portfolio, are made annually. Dividends from investment income of the
Equity Portfolios (except the Equity Income Portfolio) and Managed Portfolio are
declared and paid annually. Dividends on the Equity Income Portfolio are paid
semiannually. Dividends from investment income of the Income Portfolios are
declared daily and paid monthly. Dividends from investment income and any net
realized capital gains of the Money Market Portfolio are declared daily and
reinvested monthly in additional shares of the Money Market Portfolio at net
asset value.

BROKERAGE
TRANSACTIONS

Each Portfolio Manager selects the brokerage firms which complete portfolio
transactions for that Portfolio, subject to the overall direction and review of
Enterprise Capital and the Board of Directors of the Fund.

The initial criterion which must be met by any Portfolio Manager in selecting
brokers and dealers to effect securities transactions for a Portfolio is whether
such brokers and dealers can obtain the most favorable combination of price and
execution for the transaction. This does not mean that the execution decision
must be based solely on whether the lowest possible commission costs may be
obtained. In seeking to achieve the best combination of price and execution, the
Portfolio Managers evaluate the overall quality and reliability of
broker-dealers and the service they provide, including their general execution
capability, reliability and integrity, willingness to take positions in
securities, general operational capabilities and financial condition.

Subject to this primary objective, the Portfolio Managers may select for
brokerage transactions those firms which furnish brokerage and research services
to the Fund, Enterprise Capital, and the respective Portfolio Managers, or those
firms who agree to pay certain of the Fund's expenses, including certain
custodial and transfer agent services, and, consistent with the National
Association of Securities Dealers, Inc.

THE ENTERPRISE Group of Funds, Inc.

48
<PAGE> 119

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 (Toll Free)

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 (Toll Free)

Independent Accountants
Coopers & Lybrand L.L.P.
Atlanta, GA

Member - Investment Company Institute

[Enterprise Group of Funds(TM) Logo]

1-800-432-4320

www.enterprisegroup.com
<PAGE> 120
[ENTERPRISE GROUP OF FUNDS LOGO]

Atlanta Financial Center
3343 Peachtree Road, Suite 450
Atlanta, Georgia 30326-1022

STATEMENT OF ADDITIONAL INFORMATION

EQUITY PORTFOLIOS:

INCOME PORTFOLIOS:

Government Securities Portfolio
High-Yield Bond Portfolio
Tax-Exempt Income Portfolio

FLEXIBLE PORTFOLIO:

Managed Portfolio

MONEY MARKET PORTFOLIO:

Money Market Portfolio

This Statement of Additional Information is not a prospectus and should
be read in conjunction with the Fund's Prospectus.

A copy of the Prospectus may be obtained by writing to the Fund at 3343
Peachtree Road, N.E., Suite 450, Atlanta, Georgia 30326, or by calling the Fund
at the following numbers:

1-800-432-4320
1-800-368-3527 (SHAREHOLDER SERVICES)

The date of the Prospectus to which this Statement of Additional
Information relates is May 1, 1998.

The date of this Statement of Additional Information is May 1, 1998.
<PAGE> 121
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
General Information and History
(See Prospectus - General Information) 3

Investment Objectives and Policies
(See Prospectus - Investment Objectives and 3
Policies of the Portfolios)

Portfolio Turnover 5

Management of the Fund
(See Prospectus - Management of the Fund) 6

Investment Advisory and Other Services
Investment Advisory Agreement 9
Portfolio Managers
Distributor's Agreements and Plans of Distribution 11
Miscellaneous 11
(See Prospectus - Management of the Fund)

Purchase, Redemption and Pricing of Securities Being Offered 12
Services for Investors
(See Prospectus - How to Purchase Portfolio Shares;
How to Redeem Portfolio Shares)
Redemptions in Kind 13
Determination of Net Asset Value 13

Portfolio Transactions and Brokerage 14

Performance Comparisons 14

Custodian 15

Independent Accountants 15

Taxes 15

Financial Statements 16

Appendix 17
</TABLE>

<PAGE> 122
GENERAL INFORMATION AND HISTORY

The Enterprise Group of Funds, Inc. (the "Fund") was incorporated
January 2, 1968 as Alpha Fund, Inc. Its name was changed to The Enterprise Group
of Funds, Inc. on September 14, 1987, and at that same time: (i) the Fund's
Board of Directors was authorized to establish any number of series of common
stock of the Fund, each of which series would represent stock in a separate
Portfolio; (ii) each outstanding share of the common stock of Alpha Fund, Inc.
became one share of the newly established Growth Portfolio; and (iii) the Fund
was reincorporated as a Maryland corporation with the shares of the Common Stock
of the Fund divided into nine classes consisting of a separate class for each
Portfolio. On May 31, 1989, the Fund's GNMA and Corporate Portfolios were
combined with the Government Securities Portfolio reducing the number of Fund
Portfolios to eight. Effective May 1, 1990, the Fund added its Money Market
Portfolio. Effective April 21, 1993, the Fund liquidated the Precious Metals
Portfolio. Effective October 1, 1993, the Fund added its Small Company Value
Portfolio and effective October 3, 1994, the Fund added its Managed Portfolio.
Effective May 1, 1995, the Fund added Class B and Class Y shares. Effective May
1, 1997 the Fund added Class C Shares and the Equity, Growth and Income and
Small Company Growth Portfolios.

INVESTMENT OBJECTIVES AND POLICIES

INTERNATIONAL GROWTH PORTFOLIO - Capital appreciation, primarily
through a diversified portfolio of non-U.S. equity securities.

The International Growth Portfolio Manager believes that, over the long
term, investing across international equity markets based upon discrepancies
between market prices and fundamental values may achieve a positive enhancement
for the Portfolio's investment performance relative to the returns from the
Benchmark.

Fundamental value is considered to be the current value of long-term,
sustainable future cash flows derived from a given asset class or security. In
determining fundamental value, the Portfolio Manager examines the relative price
to value of the investment opportunity based upon the prospects for relative
economic growth among countries, regions or geographic areas; expected levels of
inflation; government policies influencing business conditions; and the outlook
for currency relationships. Investment decisions are based on comparisons of
current market prices to fundamental values.

Although it may invest anywhere in the world, it is expected that the
Portfolio will primarily invest in the equity markets included in the Morgan
Stanley Capital International Non-U.S. Equity (Free) Index which currently are
Japan, the United Kingdom, Germany, France, Canada, Italy, the Netherlands,
Australia, Switzerland, Spain, Hong Kong, Belgium, Singapore, Malaysia, Sweden,
Denmark, Norway, New Zealand, Austria, Finland and Ireland. The composition of
the Index may change over time, according to criteria established by Morgan
Stanley.

The "Asset Allocation Mix," set forth below, represents the asset
allocation mix based on the Benchmark as of December 31, 1996, and may shift
over time as the Benchmark index weights change.

<TABLE>
<CAPTION>
Asset Class Asset Allocation Mix Asset Class Strategy Ranges
- ----------- -------------------- ---------------------------
<S> <C> <C>
Non-U.S. Equities 100% 80-100%
Cash and Cash 0% 0-20%
---
Equivalents 100%
</TABLE>

The "asset class strategy ranges" indicated above are the ranges within
which the Fund expects to make its active asset allocations to specific asset
classes. Under all but unusual market conditions, the Portfolio expects to
adhere to the strategy ranges set forth above. However, the Portfolio's strategy
ranges may be exceeded by the Portfolio under unusual market conditions.
<PAGE> 123
The investment policies of the Portfolios along with a description of
the securities in which the Portfolios invest, certain risks connected with
investments in the Portfolios, and a description of investment techniques used
by the Portfolios are set forth in the Prospectus.

INVESTMENT RESTRICTIONS

The Fund has adopted the following investment restrictions which cannot
be changed as to any individual Portfolio without approval by the holders of a
majority of the outstanding shares of the relevant Portfolio. (As used - in this
Statement of Additional Information, "a majority of the outstanding shares of
the relevant Portfolio" means the lesser of (i) 67% of the shares of the
relevant Portfolio represented at a meeting at which more than 50% of the
outstanding shares of that Portfolio are represented in person or by proxy or
(ii) more than 50% of the outstanding shares of the relevant Portfolio.) Except
as otherwise set forth, none of the Portfolios may:

1. As to 75% of the assets of any Portfolio, purchase the securities of
any issuer if such purchase would cause more than 5% of the value of its assets
to be invested in the securities of such issuer (except U.S. Government
securities or those of its agencies or instrumentalities), or purchase more than
10% of the outstanding securities, or more than 10% of the outstanding voting
securities, of any issuer.

2. Purchase securities of any company with a record of less than three
years continuous operation (including that of predecessors) if such securities
would cause the Portfolio's investment in such companies taken at cost to exceed
5% of the value of the Portfolio's total assets. (The High-Yield Bond and
Tax-Exempt Income Portfolios are not subject to this restriction.)

3. Purchase securities on margin, but it may obtain such short-term
credits as may be necessary for the clearance of purchases and sales of
securities and may make initial and maintenance margin deposits in connection
with options and futures contracts as permitted by its investment program.

4. Make short sales of securities, unless at the time of such sale, it
owns, or has the right to acquire at no additional cost to the Portfolio as the
result of the ownership of convertible or exchange securities, an equal amount
of such securities, and it will retain such securities so long as it is in a
short portion as to them. In no event will a Portfolio make short sales of
securities in such a manner that the value of its net assets used to cover such
sales would exceed 15% of the value of its net assets at any time. The short
sales of the type described above, which are called "short sales against the
box," may be used by a Portfolio when management believes that they will protect
profits or limit losses in investments.

5. Borrow money, except that a Portfolio may borrow from banks as a
temporary measure for emergency purposes and not for investment, in which case
such borrowings may not be in excess of the lesser of: (a) 5% of its total
assets taken at cost; or (b) 5% of the value of its assets at the time that the
loan is made. A Portfolio will not purchase securities while borrowings are
outstanding. A Portfolio will not pledge, mortgage or hypothecate its assets
taken at market value to an extent greater than the lesser of 10% of the value
of its net assets or 15% of the value of its total assets taken at cost.

6. Purchase or retain the securities of any issuer if those officers
and directors of the Fund or of its investment advisor holding individually more
than 1/2 of 1% of the securities of such issuer together own more than 5% of the
securities of such issuer.

7. Purchase the securities of any other investment company except in
the open market in a transaction involving no commission or profit to a sponsor
or dealer (other than the customary sales load or broker's commission) or as a
part of a merger, consolidation, acquisition or reorganization.

8. Invest in real estate; this restriction does not prohibit the Fund
from investing in the securities of real estate investment trusts.

9. Invest for the purpose of exercising control of management of any
company.
<PAGE> 124
10. Underwrite securities issued by others except to the extent that
the disposal of an investment position may qualify the Portfolio or the Fund as
an underwriter as that term is defined under the Securities Act of 1933, as
amended,

11. Except for the Money Market Portfolio, make any investment which
would cause more than 25% of the total assets of the Portfolio to be invested in
securities issued by companies principally engaged in any one industry;
provided, however, that: (i) this limitation does not apply to investments in
U.S. Government Securities as well as its agencies and instrumentalities,
general obligation bonds, municipal securities other than industrial development
bonds issued by non-governmental users, and (ii) utility companies will be
divided according to their services (for example, gas, gas transmission,
electric, electric and gas, and telephone will each be considered a separate
industry). The Money Market Portfolio may invest more that 25% of its total
assets in U.S. Government Securities as well as its agencies and
instrumentalities and certain bank instruments issued by domestic banks. The
instruments in which the Money Market Portfolio may invest in excess of 25%, in
the aggregate, of its total assets are letters of credit and guarantees,
negotiable certificates of deposit, time deposits, commercial paper and bankers
acceptances meeting the investment criteria for the Money Market Portfolio.

12. Participate with others in any trading account. This restriction
does not prohibit the Fund or any Portfolio from combining portfolio orders with
those of other Portfolios or other clients of the investment adviser or
Portfolio Managers when to do so would permit the Fund and one or more
Portfolios to obtain a large-volume discount from ordinary brokerage commissions
when negotiated rates are available. (See "Portfolio Transactions and Brokerage"
below.)

13. Invest more than 10% of the value of its assets in securities which
are subject to legal or contractual restrictions on resale or are otherwise not
readily saleable.

In addition, management of the Fund has adopted the following
restrictions which apply to all of the Portfolios and may be changed only by the
Board of Directors of the Fund. No Portfolio will: (i) lend its assets to any
person or individual, except by the purchase of bonds or other debt obligations
customarily sold to institutional investors, (ii) invest more than 5% of the
value of its net assets, valued at the lower of cost or market, in warrants
(Included in that amount, but not to exceed 2% of the value of the Portfolio's
net assets, may be warrants which are not listed on the New York or American
Stock Exchanges. Warrants acquired by a Portfolio in units or attached to
securities may be deemed to be without value.), or (iii) invest in oil, gas, or
other mineral leases or engage in arbitrage transactions.

PORTFOLIO TURNOVER

Portfolio turnover for the Enterprise High-Yield Bond Portfolio in 1996
and 1997 was attributable to several factors, including a declining level of
interest rates, a reduction in risk premiums, and healthy stock and bank loan
markets. As a result of these conditions, the Portfolio experienced an
abnormally high amount of redemptions and tenders for existing positions. The
Portfolio Manager has taken measures to potentially improve the overall call
protection of the Portfolio in order to capture the total return potentially
made available by declining medium and long-term interest rates.

During 1996, the portfolio turnover rate for the Small Company Value
Portfolio exceeded 100% due to a change in management style which resulted with
the appointment of a new Portfolio Manager.
<PAGE> 125
MANAGEMENT OF THE FUND

The directors and officers of the Fund, and their principal occupations
during the past five years, are set forth below. Directors who are "interested
persons", as defined in the 1940 Act, are denoted by an asterisk. As to their
duties relative to the Fund, the address of each is Atlanta Financial Center,
3343 Peachtree Road, N.E., Ste. 450, Atlanta, GA 30326.

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME, AGE AND POSITION WITH THE FUND PAST FIVE YEARS
- ------------------------------------ --------------------
<S> <C>
Arthur T. Dietz (74) President, ATD Advisory Corp.
Director since 1996; President and Chief
Member of the Audit Committee Executive Officer, Strategic
Portfolio Management, Inc.,
1987-1995; Mills B. Lane Professor
of Finance and Banking, Emory
University, 1954-1988; Trustee,
Enterprise Accumulation Trust.

*Samuel J. Foti (46) President and Chief Operating
Director Officer, MONY since 1994; Executive
Vice President, MONY (1991-1994);
Trustee, MONY since 1993; Senior
Vice President, MONY (1989 - 1991);
Director, MONY Life Insurance Co.
of America since 1989; Director,
MONY Brokerage, Inc. since 1990;
Director, MONY International
Holdings, Inc. since 1994;
Director, MONY Life Insurance
Company of the Americas, Ltd. since
1994, MONY Bank & Trust Co. of the
Americas, Ltd. since 1994;
Director, Life Insurance Marketing
and Research Associates; Chairman,
Life Insurance Marketing and
Research Associates 1996 - 1997;
Trustee, Enterprise Accumulation
Trust.

Arthur Howell (79) Of Counsel, law firm of Alston &
Director Bird, Atlanta, Georgia; President,
Chairman of Audit Committee Summit Industries, Inc.; Chairman,
Crescent Banking Co., Inc.;
President, Jonesheirs, Inc.;
Trustee, Enterprise Accumulation
Trust.

William A. Mitchell, Jr.(58) President/CEO, Carter & Associates
Director (real estate development), Atlanta,
Georgia since 1994; Director, John
Wieland Homes since 1992; Trustee,
Enterprise Accumulation Trust.

Lonnie H. Pope (64) President and Chief Executive
Director Officer of AFF, Inc. (creator and
Member of the Audit Committee manufacturer of aromatics, flavors
Accumulation Trust. and fragrances), Marietta, Georgia;
Trustee, Enterprise
</TABLE>
<PAGE> 126

<TABLE>
<S> <C>
*Michael I. Roth (52) Chairman and Chief Executive
Director Officer, MONY since 1993; President
and Chief Executive Officer, MONY
(1991-1993); Director, MONY Life
Insurance Company of America since
1991; Director, ARES Holdings Inc.
since 1995; 1740 Advisers, Inc.
since 1992; MONY CS, Inc. since
1989; Executive Vice President and
Chief Financial Officer, MONY
(1989-1991); Executive Vice
President and Chief Financial
Officer, Primerica Corporation
(1987); Executive Vice President,
Primerica Corporation (1982-1987);
Trustee, Enterprise Accumulation
Trust; Director, American Council
of Life Insurance (ACLI); Director,
the Life Insurance Counsel of New
York; Director, Pitney Bowes, Inc.;
Director, Promus Hotel Corporation.

*Victor Ugolyn (50) Chairman, President and Chief
Director Executive Officer, The Enterprise
Group of Funds, Inc. since 1991;
Chairman, President and Chief
Executive Officer, Enterprise
Capital and Enterprise Fund
Distributors, Inc. since 1991;
Chairman, President and Chief
Executive Officer, Enterprise
Accumulation Trust; Vice Chairman
and Chief Marketing Officer, Value
Line Securities, Inc. (1986-1991).

Catherine R. McClellan (42) Secretary, Enterprise Accumulation
Secretary Trust; Senior Vice President,
Secretary and Chief Counsel,
Enterprise Capital Management,
Inc.; Senior Vice President,
Secretary and Chief Counsel,
Enterprise Fund Distributors, Inc.

Herbert M. Williamson (47) Assistant Secretary and Treasurer,
Treasurer Enterprise Accumulation Trust,
Enterprise Capital Management, Inc.
and Enterprise Fund Distributors,
Inc.

Phillip G. Goff (34) Vice President and Chief Financial
Vice President Officer, Enterprise Accumulation
Trust, Enterprise Capital
Management, Inc. and Enterprise
Fund Distributors, Inc. 1995 -
present; Audit Manager, Coopers &
Lybrand, L.L.P., 1991 - 1995.
</TABLE>

* Messrs. Foti, Roth and Ugolyn are "interested persons" of the Fund, of
Enterprise Capital Management, Inc. (the Fund's investment adviser), and of
Enterprise Fund Distributors, Inc. (the distributor of the Fund's Shares), as
that term is defined in the Investment Company Act of 1940.

<PAGE> 127
At December 31, 1997, the officers and directors of the Fund as a group owned
less than one percent of the shares of each Portfolio.

The Fund pays fees to those directors who are not "interested persons" of the
Fund at the rate of $10,000 per director per year plus $1,000 for each special
or committee meeting attended. The Fund pays no salaries, fees or compensation
to any of its officers, since these expenses are borne by the Fund's investment
adviser, Enterprise Capital Management, Inc. No fees were paid to the
"interested" directors of the Fund.

The following sets forth compensation paid to each of the Directors during 1997:

<TABLE>
<CAPTION>
(1) (2) (3) (4)(5)
NAME AGGREGATE PENSION OR ESTIMATED TOTAL
COMPENSA- RETIREMENT ANNUAL COMPENSATION
TION FROM BENEFITS BENEFITS FROM REGISTRANT
REGISTRANT ACCRUED AS UPON AND FUND COMPLEX
PART OF RETIREMENT PAID TO
FUND DIRECTORS*
EXPENSES
<S> <C> <C> <C> <C>
Arthur T. Dietz $13,500 None None $27,000
Arthur Howell $13,000 None None $26,000
William A. Mitchell, Jr. $12,500 None None $25,000
Lonnie H. Pope $13,500 None None $27,000
</TABLE>

* Each Director received fees for services as a Trustee of Enterprise
Accumulation Trust.

<PAGE> 128
INVESTMENT ADVISORY AND OTHER SERVICES

INVESTMENT ADVISORY AGREEMENT

The Fund has entered into an Investment Advisory Agreement (the
"Adviser's Agreement") with Enterprise Capital Management, Inc. ("Enterprise
Capital") which, in turn, has entered into Portfolio Manager's Agreements with
each of the Portfolio Managers as discussed in the Prospectus. Enterprise
Capital functions as the adviser to the Money Market Portfolio. Enterprise
Capital is a subsidiary of The Mutual Life Insurance Company of New York
("MONY"), one of the nation's largest insurance companies. Enterprise Capital
was incorporated in 1986. Enterprise Capital's address is Suite 450, 3343
Peachtree Road, Atlanta, Georgia 30326. Victor Ugolyn, who is President of the
Fund, is also Chairman of the Board and President of Enterprise Capital.

The Adviser's Agreement obligates Enterprise Capital to provide
investment advisory services to the Portfolios of the Fund, to furnish the fund
with certain administrative, clerical, bookkeeping and statistical services,
office space and facilities, and to pay the compensation of the officers of the
Fund. Each Portfolio pays all other expenses incurred in its operation, and a
portion of the Fund's general administrative expenses are allocated to the
Portfolios either on the basis of their asset size, on the basis of special
needs of any Portfolio, or equally as is deemed appropriate. The Fund's Board of
Directors annually reviews allocation of expenses among the Portfolios.

The Adviser's Agreement authorizes Enterprise Capital to enter into
subadvisory agreements with various investment advisers as Portfolio Managers
for the Portfolios of the Fund. The Portfolio Manager's Agreements are
substantially the same in all material respects except for the names of the
Portfolio Managers and the rates of compensation, which consist of a portion of
the management fee that is paid by the Fund to Enterprise Capital and which
Enterprise Capital pays to the Portfolio Managers.

Enterprise Capital and the Fund have received an exemptive order from
the Securities and Exchange Commission which permits Enterprise, subject to,
among other things, initial shareholder authority, to thereafter enter into or
amend Portfolio Manager Agreements without obtaining shareholder approval each
time. Shareholders voted affirmatively to give the Fund this ongoing authority.
With Board approval, Enterprise Capital is permitted to employ new Portfolio
Managers for the Portfolios, change the terms of the Portfolio Manager
Agreements or enter into a new Agreement with that Portfolio Manager.
Shareholders of a Portfolio continue to have the right to terminate the
Portfolio Manager's Agreement for the Portfolio at any time by a vote of the
majority of the outstanding voting securities of the Portfolio. Shareholders
will be notified of any Portfolio Manager changes or other material amendments
to Portfolio Manager Agreements that occur under these arrangements.

Enterprise Capital is the Portfolio Manager of the Money Market
Portfolio. It utilizes the services of The Mutual Life Insurance Company of New
York employees for certain services relating to management of the Portfolio.
These services include but are not limited to the initial credit review of
approved issuers and trading. All such services are provided on a cost
reimbursement basis.

Expenses that are borne directly by the Portfolios incurring such costs
include redemption expenses, expenses of portfolio transactions, shareholder
servicing costs, mailing costs, expenses of registering the shares under federal
and state securities laws, accounting and pricing costs (including the daily
calculation of net asset value and daily dividends), interest, certain taxes,
legal services, auditing services, charges of the custodian and transfer agent,
and other expenses attributable to an individual account. Expenses which are
generally allocated either on the basis of size or equally among the respective
Portfolios include director fees, legal expenses, state franchise taxes, costs
of printing of proxies, prospectuses, registration statements and shareholder
reports, printing and issuance of stock certificates and other expenses properly
payable by the Fund that are allocable to the respective Portfolios. Litigation
costs, if any, may be directly allocable to the Portfolios or allocated on the
basis of the size of the respective Portfolios. The Board of Directors has
determined that this is an appropriate method of allocation of expenses.

Enterprise Capital has advised the Fund that it will reimburse such
portion of the fees due to it under the Adviser's Agreement as is necessary to
assure, for the period commencing January 1, 1998 and ending no earlier than
<PAGE> 129
December 31, 1998 that expenses incurred by the Portfolios will not exceed those
which appear as part of the Expense table, page 2, to the Prospectus. This
commitment was also in effect from January 1, 1989 through December 31, 1997.

The tables below sets forth the 1997, 1996 and 1995 breakdown by
Portfolio of (1) the investment advisory fee paid to Enterprise Capital, (2) the
percentage of the Management Fee to be paid by Enterprise Capital to the
Portfolio Manager, (3) the portfolio management fee paid by Enterprise Capital
to the Portfolio Manager, (4) the net advisory fee left to Enterprise Capital
after payment of the portfolio management fee, and (5) the amount of the expense
reimbursement paid by Enterprise Capital to the Portfolio to assure that
expenses incurred by the Portfolio did not exceed 2.0% of average annual net
assets for the Equity Portfolios and 1.3% of average annual net assets for the
Income Portfolios. To the extent that the Management Fee equals or exceeds .75%
of the average daily net asset values of a Portfolio, such fee is higher than
the fee charged to most investment companies. However, the Board of Directors
has determined that such fees are reasonable in light of the services,
investment decisions and investment techniques employed by the Portfolios.

<TABLE>
<CAPTION>
1997

PORTFOLIO (1) (2) (3) (4) (5)
- ---------
<S> <C> <C> <C> <C> <C>
Growth $3,331,589 31% 1,038,424 2,293,165 --
Equity 15,970 53% 8,516 7,453 99,274
Growth & Income 63,099 40% 25,240 37,859 102,630
Equity Income 739,501 40% 293,217 446,285 115,504
Capital Appreciation 903,281 66% 591,969 311,312 --
Small Company Growth 84,918 65% 55,197 29,721 104,369
Small Company Value 275,321 53% 146,838 128,483 69,743
International Growth 478,833 53% 253,500 225,333 62,527
Government Securities 483,366 47% 226,402 256,963 130,007
High-Yield Bond 436,989 50% 218,495 218,494 123,123
Tax-Exempt Income 141,160 50% 70,580 70,580 108,255
Managed 2,180,923 45% 972,369 1,208,554 --
Money Market 231,118 -- -- 231,118 158,757

<CAPTION>
1996

<S> <C> <C> <C> <C> <C>
PORTFOLIO
- ---------
Growth $1,282,393 37% 474,978 807,415 --
Equity Income 523,261 40% 209,391 313,870 126,447
Capital Appreciation 935,780 65% 611,348 324,432 --
Small Company Value 153,784 47% 72,105 81,679 128,396
International Growth 353,427 53% 187,181 166,246 80,932
Government Securities 490,882 47% 229,645 261,237 94,868
High-Yield Bond 339,960 50% 170,056 169,904 114,041
Tax-Exempt Income 162,828 50% 81,452 81,376 51,959
Managed 1,164,633 49% 568,181 596,452 --
Money Market 160,844 -- -- 160,844 82,594
</TABLE>

<PAGE> 130

<TABLE>
<CAPTION>
1995

<S> <C> <C> <C> <C> <C>
Growth $ 797,410 38% 305,619 491,791 4,398
Equity Income 418,724 40% 167,490 251,234 150,764
Capital Appreciation 876,619 66% 562,933 313,686 --
Small Company Value 176,021 40% 72,927 103,094 108,702
International Growth 241,255 63% 120,627 120,628 109,484
Government Securities 516,491 50% 258,246 258,245 117,348
High-Yield Bond 304,716 50% 152,368 152,368 113,327
Tax-Exempt Income 172,474 50% 86,237 86,237 59,601
Managed 311,097 53% 164,881 146,216 58,261
Money Market 122,090 -- -- 122,090 121,372
</TABLE>

DISTRIBUTOR'S AGREEMENTS AND PLANS OF DISTRIBUTION

The Distributor's Agreements and Plans of Distribution (the "12b-1
Plans") between the Fund and Enterprise Fund Distributors, Inc. ("Enterprise
Distributors"), pursuant to which Enterprise Distributors serves as principal
underwriter of the Fund's shares, is described in the Prospectus. The 12b-1
Plans provide for the payment by the Fund to Enterprise Distributors of a daily
distribution fee.

DISTRIBUTION FEES AND COMMISSIONS
FOR ENTERPRISE FUND DISTRIBUTORS, INC. ("EFD")

<TABLE>
<CAPTION>
DISTRIBUTION COMMISSION & CDSC COMMISSIONS MARKETING & TRAVEL,
FEES PAID TO SALES FEES COLLECTED & AND FEES PAID ADVERTISING TELEPHONE &
EFD PAID TO EFD PAID TO EFD TO DEALERS FEES PAID OTHER
AUTHORIZED
FEES PAID
<S> <C> <C> <C> <C> <C> <C>
1997 $6,667,912 $1,244,343 $ 13,318 $4,320,682 $2,143,274 $3,103,754
1996 $3,696,663 $ 692,305 $131,372 $2,043,128 $1,108,160 $1,512,246
1995 $2,487,595 $ 505,970 $ 3,074 $1,255,109 $ 543,135 $1,192,256
</TABLE>

MISCELLANEOUS

The terms of each of the Investment Adviser's Agreement, the
Distributor's Agreements and 12b-1 Plans, the Transfer Agent Agreement, the
Accounting Agreement and the Portfolio Manager's Agreements (collectively, the
"Agreements") provide that each such Agreement: (i) will automatically terminate
upon "assignment," as such term is defined in the Investment Company Act of 1940
(the "1940 Act"); (ii) must be approved annually by the Fund's Board of
Directors or by vote of a majority of the outstanding voting securities; and
(iii) must be approved annually in person by vote of a majority of the directors
of the Fund who are not parties to such contract or "interested persons" (as
such term is defined in the 1940 Act) of such party. Each Agreement further
provides that it can be terminated without penalty by either party thereto upon
60 days written notice to the other party. The Fund's Board of Directors most
<PAGE> 131
recently approved continuance of the Investment Adviser's Agreement, the
Portfolio Manager's Agreements and the Distributor's Agreements and 12b-1 Plans
on February 19, 1998.

PURCHASE, REDEMPTION AND PRICING OF SECURITIES BEING OFFERED

Information concerning purchase and redemption of shares of the Fund's
Portfolios, as well as information concerning computation of net asset value per
share is set forth in the Fund's Prospectus.

SERVICES FOR INVESTORS

For the convenience of investors, the following plans are available.
Investors should realize that none of these plans can guarantee profit or insure
against loss. The costs of these shareholder plans (exclusive of the employee
benefit plans) are paid by Enterprise Distributors, except for the normal cost
of issuing shares, which is paid by the Fund.

AUTOMATIC REINVESTMENT PLAN. All shareholders, unless they request otherwise,
are enrolled in the Automatic Reinvestment Plan under which dividends and
capital gains distributions on their shares are automatically reinvested in
shares of the same Class of Portfolio(s) at the net asset value per share
computed on the record date of such dividends and capital gains distributions.
The Automatic Reinvestment Plan may be terminated by participants or by the Fund
at any time. No sales charge is applied upon reinvestment of dividends or
capital gains.

AUTOMATIC BANK DRAFT PLAN. An Automatic Bank Draft Plan is available for
investors who wish to purchase shares of one or more of the Portfolios in
amounts of $25 or more on a regular basis by having the amount of the investment
automatically deducted from the investor's checking account. The minimum initial
investment for this Plan is $100. Forms authorizing this service are available
from the Fund.

AUTOMATIC INVESTMENT PLAN. An investor may debit any Class of a Portfolio
Account on a monthly basis for automatic investments into one or more of the
other Portfolios of the same Class. The Portfolio from which the investment will
be made is subject to the $1,000 minimum. The investor may then choose to have
$50 or more transferred to either an established Enterprise Portfolio, or they
may open a new account subject to an initial minimum investment of $100.

LETTER OF INTENT INVESTMENTS. Any investor may execute a Letter of Intent
covering purchases of Class A shares of $100,000 or more, at the public offering
price, of Fund shares to be made within a period of 13 months. A reduced sales
charge will be applicable to the total dollar amount of Class A shares purchased
in the 13-month period provided at least $100,000 is purchased. The minimum
initial investment under a Letter of Intent is 5% of the amount indicated in the
Letter of Intent. Shares purchased with the first 5% of such amount will be held
in escrow (while remaining registered in the name of the investor) to secure
payment of the higher sales charge applicable to the shares actually purchased
if the full amount indicated is not purchased, and such escrowed shares will be
involuntarily redeemed to pay the additional sales charge, if necessary. When
the full amount indicated has been purchased, the escrow will be released.

Investors wishing to enter into a Letter of Intent in conjunction with
their investment in Class A shares of the Portfolios should complete the
appropriate portion of the new account application.

RIGHT OF ACCUMULATION DISCOUNT. Investors who make an additional purchase of
Class A shares of the Fund which, when combined with the value of their existing
aggregate holdings of shares of the Portfolios of the Fund, each calculated at
the then applicable net asset value per share, at the time of the additional
purchase, equals $100,000 or more, will be entitled to the reduced sales charge
shown under "How to Purchase Portfolio Shares" in the Prospectus on the full
amount of each additional purchase. For purposes of determining the discount,
holdings of Fund shares of the investor's spouse, immediate family or accounts
controlled by the investor, whether as a single investor or trustee of, or
participant in, pooled and similar accounts, will be aggregated.

CHECKWRITING. A check redemption feature is available on the Money Market
Portfolio Class A shares with opening balances of $5,000 or more. Redemption
checks may be made payable to the order of any person in any amount from
<PAGE> 132
$500 to $100,000. Up to five redemption checks per month may be written without
charge. Each additional redemption check over five in a given month will be
subject to a $5 fee. Redemption checks are free and may be obtained from the
Transfer Agent or by contacting Enterprise Capital Management. A $25 fee will be
imposed on any account for stopping payment of a redemption check upon request
of the shareholder. It is not possible to use a redemption check to close out an
account since additional shares accrue daily.

SYSTEMATIC WITHDRAWAL PLAN. Investors may elect a Systematic Withdrawal Plan
under which a fixed sum will be paid monthly, quarterly, or annually. There is
no minimum withdrawal payment required. Shares in the Plan are held on deposit
in noncertificate form and any capital gain distributions and dividends from
investment income are invested in additional shares of the Portfolio(s)at net
asset value. Shares in the Plan account are then redeemed at net asset value to
make each withdrawal payment. Redemptions for the purpose of withdrawals are
made on or about the 15th day of the month of payment at that day's closing net
asset value, and checks are mailed within five days of the redemption date. Such
distributions are subject to applicable taxation.

Because withdrawal payments may include a return of principal,
redemptions for the purpose of making such payments may reduce or even use up
the investment, depending upon the size of the payments and the fluctuations of
the market price of the underlying portfolio securities. For this reason, the
payments cannot be considered as a yield of income on the investment.

RETIREMENT PLANS. The Fund offers various Retirement Plans: IRA (generally for
all individuals with employment income); 403(b)(7) (for employees of certain
tax-exempt organizations and schools); and corporate pension and profit sharing
(including a 401(k) option) plans. For full details as to these plans, you
should request a copy of the plan document from Enterprise Distributors. After
reading the plan, you may wish to consult a competent financial or tax adviser
if you are uncertain that the plan is appropriate for your needs.

REDEMPTIONS IN KIND

The Fund's Articles of Incorporation provide that it may redeem its
shares in cash or with a pro rata portion of the assets of the Fund. To date,
all redemptions have been made in cash, and the Fund anticipates that all
redemptions will be made in cash in the future. In order to meet the
requirements of certain state laws, the Fund has elected, pursuant to Rule
18f-1 under the 1940 Act, to commit itself to pay in cash all requests for
redemption by any shareholder of record, limited in amount with respect to each
shareholder during any 90-day period to the lesser of: (i) $250,000; or (ii) 1%
of the net asset value of the Fund at the beginning of such period. If shares
are redeemed through a distribution of portfolio securities, the recipient
would incur brokerage commissions upon the sale of such securities.

DETERMINATION OF NET ASSET VALUE

The net asset value of each Portfolio's shares is determined once daily
as of the close of the New York Stock Exchange on each day on which the Exchange
is open for trading. The net asset value of a share is computed by dividing the
value of the net asset of the Portfolio by the total number of shares
outstanding.

Money Market Portfolio

The net asset value of the Money Market Portfolio is computed by
dividing the total value of the Portfolio's assets, less liabilities (including
dividends payable), by the number of shares outstanding. The assets are
determined by valuing the portfolio securities at amortized cost, pursuant to
Rule 2a-7. The amortized cost method of valuation involves valuing a security at
cost at the time of purchase and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the impact of fluctuating
interest rates on the market value of the instrument.

The purpose of the amortized cost method of valuation is to attempt to
maintain a constant net asset value per share of $1.00. While this method
provides certainty in valuation, it may result in periods during which value, as
determined by amortized cost, is higher or lower than the price the Portfolio
would receive if it sold its portfolio securities. Under the direction of the
Board of Directors, certain procedures have been adopted to monitor and
stabilize
<PAGE> 133
the price per share. Calculations are made to compare the value of the portfolio
securities, valued at amortized cost, with market values. Market valuations are
obtained by using actual quotations provided by market makers, estimates of
market value, or values obtained from yield data relating to classes of money
market instruments published by reputable sources at the bid prices for those
instruments. If a deviation of 1/2 of 1% or more between the $1.00 per share net
asset value and the net asset value calculated by reference to market valuations
has occurred, or if there are any other deviations which the Board of Directors
believes will result in dilution or other unfair results material to
shareholders, the Board of Directors will consider what action, if any, should
be initiated.

The market value of debt securities usually reflects yields generally
available on securities of similar quality. When yields decline, the market
value of a portfolio holding higher yielding securities can be expected to
increase; when yields increase, the market value of a portfolio invested at
lower yields can be expected to decline. In addition, if the Portfolio has net
redemptions at a time when interest rates have increased, the Portfolio may be
forced to sell portfolio securities prior to maturity at a price below the
Portfolio's carrying value. Also, rather than market value, any yield quoted may
be different from the yield that would result if the entire Portfolio were
valued at market value, since the amortized cost method does not take market
fluctuations into consideration.

Other Portfolios

The net asset value of Portfolios other than the Money Market Portfolio
is computed by dividing the total value of the series' securities and other
assets, less liabilities, by the number of series shares then outstanding.
Securities other than money market instruments maturing in 60 days or less which
are traded on a national exchange are valued at the last sale price as of the
close of business on the day the securities are being valued, or, lacking any
sales, at the last bid price. Securities other than money market instruments
maturing in 60 days or less traded in the over-the-counter market are valued at
the last bid price or at yield equivalent as obtained from one or more dealers
that make markets in the securities. Securities which are traded both in the
over-the-counter market and on a national exchange are valued according to the
broadest and most representative market, and it is expected that for debt
securities this ordinarily will be the over-the-counter market. Securities and
assets for which market quotations are not readily available are valued at fair
value as determined in good faith by or under the supervision of the Board of
Directors. Money market instruments with maturities of 60 days or less are
valued using the amortized cost method of valuation.

PORTFOLIO TRANSACTIONS AND BROKERAGE

The portfolio transactions and brokerage policies of the Fund are set
forth in the Prospectus. In the last three fiscal years ended December 31, the
Fund has paid the following aggregate amounts for brokerage commissions on
transactions in portfolio securities: 1997 - $1,124,684; 1996 - $762,622; 1995 -
$489,729.

PERFORMANCE COMPARISONS

From time to time the Fund may advertise a Portfolio's "yield" as
"total return." See the Prospectus under "Performance Comparisons" for an
explanation of the method of calculation of "yield" or "total return."

From time to time, a portfolio's performance and performance of
comparable investments may be compared to that of the Consumer Price Index or
various unmanaged indexes such as the Dow Jones Industrial Average, the Standard
& Poor's 500 Stock Index, the Lehman Brothers Government/Corporate Bond Index,
the Salomon Brothers Low Grade Index, the Lehman Brothers Government Bond Index,
Lehman Brothers Mortgage Backed Index, Lehman Brothers Municipal Bond Index,
Morgan Stanley Goldmine Index, the Salomon Brothers Analytical Record of Yield
and Yield Spreads, and the Salomon Brothers World Money Market Index; and it may
also be compared to the performance of other appropriate fixed income or equity
mutual funds or mutual fund indexes as reported by Lipper Analytical Services,
Inc. ("Lipper") or CDA Investment Technologies, Inc. ("CDA"). Lipper and CDA are
widely
<PAGE> 134
recognized independent mutual fund reporting services. Lipper and CDA
performance calculations are based upon changes in net asset value with all
dividends reinvested and do not include the effect of any sales charges. Also, a
portfolio's performance may be compared to the historical returns of various
investments, performances indexes of those investments or economic indicators,
included but not limited to stocks, bonds, certificates of deposit, money market
deposit accounts, money market funds and US Treasury Bills. Certain of these
alternative investments may offer fixed rates of return and guaranteed principal
and may be insured. Betas utilized will be calculated by CDA Investment
Technologies, Inc.

The Fund's performance may be compared in advertising to the
performance of other mutual funds in general or the performance of particular
types of mutual funds, especially those with similar objectives. Lipper
Analytical Services, Inc. ("Lipper"), an independent mutual fund performance
rating service headquartered in Summit, New Jersey, provides rankings which may
be used from time to time.

The Fund may be compared in advertising to Certificates of Deposit
("CDs") or other investments issued by banks. The Fund differs from bank
investments in that bank products offer fixed or variable rates; principal is
fixed and may be insured. Money markets seek to maintain a stable net asset
value and yield fluctuates. Further, the Fund may offer greater liquidity or
higher potential returns than CDs.

From time to time, the Fund may provide hypothetical illustrations
based on past performance for a particular time period. Performance information
for any Portfolio reflects only the performance of a hypothetical investment in
the Portfolio during a particular time period on which the calculations are
based. Performance information should be considered in light of the Portfolio's
investment objectives and policies, characteristics and qualities of the
Portfolio and the market conditions during the given time period, and should not
be considered as a representation of what may be achieved in the future.

The Fund may advertise examples of the effects of periodic investment
plans, including the principal of dollar cost averaging. Dollar cost averaging
programs provide an opportunity to invest a fixed dollar amount in a fund at
periodic intervals, thereby purchasing fewer shares when the price is high and
more shares when the price is low. While such a strategy does not assure a
profit guard against loss in a declining market, the investor's cost per share
can be lower if fixed numbers of shares had been purchased at periodic
intervals. In evaluating such a plan, consideration should be given to the
shareholder's ability to continue purchasing shares through periods of low price
levels.

CUSTODIAN

State Street Bank and Trust Company whose address is One Heritage
Drive, The Joseph Palmer Building, North Quincy, Massachusetts, 02171, has been
retained to act as custodian of the assets of the Fund.

INDEPENDENT ACCOUNTANTS

Coopers & Lybrand L.L.P. whose address is 1100 Campanile Building,
Atlanta, Georgia, 30309, has been retained to serve as the Fund's independent
accountants.

TAXES

See the Prospectus for information concerning taxes.

<PAGE> 135
FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Annual

Report

Page

Number
------

<S> <C>
Financial Statements

Portfolios of Investment Securities,
December 31, 1997........................................6
Statement of Assets and Liabilities,
December 31, 1997.......................................78
Statements of Operations for the
Year Ended December 31, 1997............................80
Statements of Changes in Net Assets
for Each of the Two Years Ended
December 31, 1996 and 1997..............................82

Financial Highlights......................................................86

Notes to Financial Statements.............................................112

Report of Independent Accountants ........................................125
</TABLE>

<PAGE> 136
APPENDIX

RATINGS OF CORPORATE DEBT SECURITIES

MOODY'S INVESTORS SERVICE, INC.1

Aaa - Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt edge."

Aa - Bonds rated Aa are judged to be of high quality by all standards. Together
with the Aaa group they comprise what are generally known as high grade bonds.

A - Bonds rated A possess many favorable investment attributes and are to be
considered as upper medium grade obligations.

Baa - Bonds rated Baa are considered as medium grade obligations, i.e., they are
neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.

Ba - Bonds rated Ba are judged to have speculative elements: their future cannot
be considered as well assured. Often the protection of interest and principal
payments may be very moderate and thereby not well safeguarded during both good
and bad times over the future. Uncertainty of position characterize bonds in
this case.

B - Bonds rated B generally lack characteristics of the desirable investment.
Assurance of interest and principal payments of or maintenance of other terms of
the contract over any long period of time may be small.

Caa - Bonds rated Caa are of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or interest.

Ca - Bonds rated Ca represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked short-comings.

- --------------------
(1) Moody's applies numerical modifiers, 1, 2 and 3 in generic rating
classification from Aa through B in its corporate bond rating system.
The modifier 1 indicates that the security ranks in the higher end of
its generic rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates that the issue ranks in the lower
end of its generic rating category.

<PAGE> 137
STANDARD & POOR'S CORPORATION2

AAA - Bonds rated AAA have the highest rating assigned by Standard & Poor's to a
debt obligation. Capacity to pay interest and repay principal is extremely
strong.

AA - Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest-rated issues only in a small degree.

A - Bonds rated A have a strong capacity to pay interest and repay principal,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher-rated categories.

BBB - Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than for bonds in higher-rated categories.

BB,B,CCC,CC - Bonds rated BB, B, CCC, and CC are regarded, on balance, as
predominately speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB indicates
the lowest degree of speculation and CC the highest degree of speculation. While
such bonds will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.

- --------------------
(2) Plus (+) or Minus (-): The ratings from AA to BB may be modified by the
addition of a plus or minus sign to show relative standing within the
major rating categories.

<PAGE> 138
PART C. OTHER INFORMATION

Item 24. FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements:

The audited financial statements as to the Fund are in the 1997 Annual
Report to Shareholders, a copy of which will be filed pursuant to a
post-effective amendment on or before May 1, 1998.

Portfolio of Assets and Liabilities, December 31, 1997

Statement of Assets and Liabilities, December 31, 1997

Statement of Operations for the Year Ended December 31, 1997

Statement of Changes in Net Assets for each of the Two Years Ended
December 31, 1996 and 1997

(b) Exhibits:

(1) Registrant's charter: Filed with Amendment No. 39, dated April
28, 1994, and incorporated herewith; Amendment to Charter
dated April 26, 1995 filed with Amendment No. 43 dated April
26, 1995, and incorporated herewith.

(2) By-Laws: Filed with Amendment No. 39, dated April 28, 1994,
and incorporated herewith; Amendment to By-Laws, dated
November 17, 1994 filed with Amendment No. 43 dated April 26,
1995, and incorporated herewith.

(3) Not applicable.

(4) Specimen share certificate: Filed with Amendment No. 29, dated
November 27, 1987 and incorporated herewith.

(5) Investment Advisory Agreement: Filed with Amendment No. 39,
dated April 28, 1994, and incorporated herewith.

(6) (i) Distributor's Agreements: Filed herewith as Exhibit
6(i).

(ii) Prototype Soliciting Broker/Dealer Agreement: Filed
herewith as Exhibit 6(ii).

(7) Not applicable.

(8) Form of Custodian Contract: Filed with Amendment No. 39, dated
April 28, 1994, and incorporated herewith.

(9) Not applicable.

(10) Opinion of Counsel: Filed herewith as Exhibit 10.

(11) Consent of Coopers & Lybrand, L.L.P.: Filed herewith as
Exhibit 11.

(12) All financial statements required to be filed under Item 23
are included in the 1997 Annual Report to Shareholders a copy
of which will be filed pursuant to a post-effective amendment
on or before May 1, 1998.

(13) Not applicable.

(14) Not applicable.

(15) Distribution Agreements: Filed herewith as Exhibit 6(i).

<PAGE> 139
(16) Computation of performance: Included in Part A herein and
incorporated by reference.

(17) All financial statements required to be filed under Item 23
are included in the 1997 Annual Report to Shareholders, a copy
of which will be filed pursuant to a post-effective amendment
on or before May 1, 1998.

(18) All financial statements required to be filed under Item 23
are included in the 1997 Annual Report to Shareholders, a copy
of which will be filed pursuant to a post-effective amendment
on or before May 1, 1998.

ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.

None.

ITEM 26. NUMBER OF HOLDERS OF SECURITIES

<TABLE>
<CAPTION>
Number of Record
Holders
as of the date of this
Statement of Additional
Title of Class Information
------------------------------- -------------------------
<S> <C>
Shares of Beneficial Interest 145,592
</TABLE>

ITEM 27. INDEMNIFICATION

Reference is made to the provisions of Article Sixth of
Registrant's Articles of Incorporation filed as Exhibit
24(b)(1) to this Registration Statement.

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of Registrant pursuant to the
foregoing provision or otherwise, Registrant has been advised
that in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in
the Securities Act of 1933 and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment of Registrant of expenses
incurred or paid by a director, officer or controlling person
of Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or
controlling person, Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.

ITEM 28. (a) Business and Other Connections of Investment Adviser
Enterprise Capital Management, Inc. is the investment
adviser of the Registrant.

(b) Business and Other Connections of Officers and
Directors of Investment Adviser

For information as the business, profession, vocation
or employment of a substantial nature of each of the
officers and directors of Enterprise Capital
Management, Inc. reference is made to Part B of this
Registration Statement and to the registration of
Form ADV of Enterprise Capital Management, Inc. filed
under the Investment Adviser Act of 1940, which is
incorporated herein by reference.

<PAGE> 140
ITEM 29. PRINCIPAL UNDERWRITERS

(a) Enterprise Fund Distributors, Inc. is the general
distributor of Registrant's shares.

(b) The information contained in the registration on Form
BD of Enterprise Fund Distributors, Inc., filed under
the Securities Exchange Act of 1934, is incorporated
herein by reference.

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS

<TABLE>
<CAPTION>
Entity Function Address
- ---------------------- ---------- --------------------------------------
<S> <C> <C>
The Enterprise Group Registrant Atlanta Financial Center
of Funds, Inc. 3343 Peachtree Road, N.E., Suite 450
Atlanta, GA 30326-1022

Enterprise Capital Investment Same as above.
Management, Inc. Adviser

Enterprise Fund Distributor Same as above.
Distributors, Inc.
</TABLE>

THE RECORDS OF THE PORTFOLIO MANAGERS ARE KEPT AT THE FOLLOWING LOCATIONS:

Growth Portfolio Montag & Caldwell, Inc.
Atlanta Financial Center
3343 Peachtree Road, N.E.
Atlanta, GA 30326-1450

Growth & Income Retirement System Investors Inc.
Portfolio 317 Madison
New York, NY 10122

Equity Portfolio OpCap Advisors
One World Financial Center
New York, NY 10281

Equity Income 1740 Advisers, Inc.
Portfolio 1740 Broadway
New York, NY 10019

Capital Appreciation Provident Investment Counsel
Portfolio 300 North Lake Avenue
Pasadena, CA 91101

Small Company Growth Pilgrim Baxter Associates, Ltd.
Portfolio 825 Duportail Road
Wayne, PA 19087

Small Company Value GAMCO Investors, Inc.
Portfolio One Corporate Center
Rye, New York 10580

International Growth Brinson Partners, Inc.
Portfolio 209 South LaSalle Street
Chicago, IL 609604

Government Securities TCW Funds Management, Inc.
Portfolio 865 South Figueroa Street, Suite 1800
Los Angeles, CA 90017

High-Yield Bond Caywood-Scholl Capital Management
Portfolio 4350 Executive Drive, Suite 125
San Diego, CA 92121
<PAGE> 141
Tax-Exempt Income MBIA Capital Management Corp.
Portfolio 113 King Street
Armonk, NY 10504

Managed Portfolio OpCap Advisors
One World Financial Center
New York, New York 10281

Money Market Portfolio Enterprise Capital Management, Inc.
Atlanta Financial Center
3343 Peachtree Road, N.E., Suite 450
Atlanta, GA 30326

ITEM 31. MANAGEMENT SERVICES

Not applicable.

ITEM 32. UNDERTAKINGS

(a) not applicable

(b) not applicable
<PAGE> 142
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Atlanta,
State of Georgia on the 27th day of February 1998.

THE ENTERPRISE GROUP OF FUNDS, INC.

By: /s/ Victor Ugolyn
--------------------------------------------------------------
Victor Ugolyn, Chairman, President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement of the Registrant has
been signed below by the following persons in the capacities and on the dates
indicated.

<TABLE>
<CAPTION>
Signature Capacity Date
- --------- -------- ----
<S> <C> <C>

/s/ Victor Ugolyn Chairman, President and February 27, 1998
- ---------------------------- Chief Executive Officer
Victor Ugolyn

/s/ Phillip G. Goff Principal Financial and February 27, 1998
- ---------------------------- Accounting Officer
Phillip G. Goff

/s/ Arthur T. Dietz Director February 27, 1998
- ----------------------------
Arthur T. Dietz

/s/ Samuel J. Foti Director February 27, 1998
- ----------------------------
Samuel J. Foti

/s/ Arthur Howell Director February 27, 1998
- ----------------------------
Arthur Howell

/s/ Lonnie H. Pope Director February 27, 1998
- ----------------------------
Lonnie H. Pope

/s/ William A. Mitchell, Jr. Director February 27, 1998
- ----------------------------
William A. Mitchell, Jr.

/s/ Michael I. Roth Director February 27, 1998
- ----------------------------
Michael I. Roth
</TABLE>

<PAGE> 1
EXHIBIT 6i

AMENDED AND RESTATED PLAN OF DISTRIBUTION PURSUANT
TO RULE 12b-1

CLASS A SHARES

AMENDED AND RESTATED PLAN OF DISTRIBUTION adopted as of the 1st day of
March, 1998, by The Enterprise Group of Funds, Inc., a Maryland corporation (the
"Corporation"), on behalf of the Class A shares of each of its separately
designated series (each, a "Fund").

W I T N E S S E T H:

WHEREAS, the Corporation is registered under the Investment Company Act
of 1940, as amended (the "Act"), as an open-end management investment company;
and

WHEREAS, each Fund is a separately designated investment series of the
Corporation with its own investment objective, policies and purposes offering
multiple classes of shares of common stock, par value $.10 per share, of the
Corporation (the "Shares"); and

WHEREAS, the Corporation has entered into an Amended and Restated
Distributor's Agreement with Enterprise Fund Distributors, Inc. (the
"Distributor"), pursuant to which the Distributor acts as the exclusive
distributor and representative of the Corporation in the offer and sale of the
Shares to the public; and

WHEREAS, the Corporation desires to adopt this Amended and Restated
Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act, pursuant to
which the Fund will pay an account maintenance and distribution fee to the
Distributor with respect to Class A shares of the Fund; and

WHEREAS, the Board of Directors of the Corporation (the "Directors") as
a whole, and the Directors who are not interested persons of the Corporation and
who have no direct or indirect financial interest in the operation of this Plan
or in any agreement relating hereto (the "12b-1 Directors"), having determined,
in the exercise of reasonable business judgment and in light of their fiduciary
duties under state law and under Sections 36(a) and (b) of the Act, that there
is a reasonable likelihood that this Plan will benefit the Fund and its Class A
shareholders, have approved this Plan by votes cast in person at a meeting
called for the purpose of voting hereon and on any agreements related hereto;

NOW THEREFORE, the Corporation on behalf of the Fund hereby adopts this
Plan on the following terms:
<PAGE> 2
1. Account Maintenance and Distribution Activities. The
Corporation has engaged the Distributor to distribute Class A shares of each
Fund and to service shareholder accounts using all of available facilities of
the Distributor, including sales personnel and branch office and central support
systems, and also using such other qualified broker-dealers and financial
institutions as the Distributor may select, including affiliated persons of the
Distributor. The Distributor shall spend such amounts on distribution and
account maintenance activities as it deems appropriate, including, without
limitation:

(a) sales commissions and trailer commissions paid to, or on account
of, registered representatives of the Distributor;

(b) indirect and overhead costs of the Distributor associated with its
activities as Distributor;

(c) advertising for the Fund in various forms through any available
medium, including the cost of printing and mailing Fund
prospectuses, statements of additional information and periodic
financial reports and sales literature to persons other than
current shareholders of the Fund; and

(d) sales commissions (including trailer commissions) paid to, or on
account of, Selected Agents (as hereinafter defined) which have
entered into agreements with the Distributor with respect to Class
A shares of the Fund as described in Section 3 hereof.

2. Account Maintenance and Distribution Fee. The Fund shall pay
the Distributor an account maintenance and distribution fee under the Plan at
the end of each month at the annual rate of .45% of average daily net assets
attributable to Class A shares of the Fund (with the exception of Money Market
Portfolio, as to which the fee hereunder shall be at the annual rate of .30% of
average daily net assets of Class A shares) to compensate the Distributor for
its activities hereunder. Amounts payable under the Plan shall be subject to the
limitations of Rule 2830 of the Conduct Rules of the National Association of
Securities Dealers, Inc., as such rule may be amended from time to time.

3. Payments to Other Parties. The Fund hereby authorizes the
Distributor to enter into agreements with other broker-dealers and financial
institutions ("Selected Agents") to provide compensation to such Selected Agents
for activities and services of the type referred to in Section 1 hereof. The
Distributor may reallocate all or a portion of its fees hereunder to such
Selected Agents as compensation for the above-mentioned activities and services.
Such agreements shall provide that the Selected Agents shall deliver to the
Distributor such information as is reasonably necessary to permit the
Distributor to comply with the reporting requirements set forth in Section 5
hereof.

4. Related Agreements. All agreements with any person relating to
implementation of this Plan shall be in writing, and any agreement related to
this Plan shall provide:
<PAGE> 3
(a) that such agreement may be terminated at any time, without
payment of any penalty, by vote of a majority of the 12b-1 Directors or, by vote
of a majority of the outstanding voting securities (as defined in the Act) of
Class A shares of the Fund, on not more than 60 days' written notice to any
other party to the agreement; and

(b) that such agreement shall terminate automatically in the
event of its assignment.

5. Quarterly Reports. An appropriate officer of the Corporation
shall provide to the Directors and the Directors shall review, at least
quarterly, a written report of the amounts expended pursuant to this Plan with
respect to Class A shares of the Fund and any related agreement and the purpose
for which such expenditures were made.

6. Term and Termination. (a) This Plan shall become effective as
of the date hereof, and, unless terminated as herein provided, shall continue
from year to year thereafter, so long as such continuance is specifically
approved at least annually by votes, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of both the (i) the Directors
of the Corporation, and (ii) the 12b-1 Directors of the Corporation.

(b) This Plan may be terminated at any time by vote of a
majority of the 12b-1 Directors or by vote of a majority of the outstanding
voting securities (as defined in the Act) of Class A shares of the Fund.

7. Amendments. This Plan may not be amended to increase
materially the fees authorized by Section 2 hereof unless such amendment is
approved by a vote of a majority of the outstanding voting securities (as
defined in the Act) of Class A shares of the Fund, and no material amendment to
this Plan shall be made unless approved in the manner provided for the annual
renewal of this Plan in Section 6(a) hereof.

8. Selection and Nomination of Directors. While this Plan is in
effect, the selection and nomination of those Directors of the Corporation who
are not interested persons of the Corporation shall be committed to the
discretion of the 12b-1 Directors.

9. Recordkeeping. The Corporation shall preserve copies of this
Plan and any related agreement and all reports made pursuant to Section 5 hereof
for a period of not less than six years from the date of this Plan, any such
related agreement or such reports, as the case may be, the first two years in an
easily accessible place.

10. Definition of Certain Terms. For purposes of this Plan, the
terms "assignment," "interested person," "majority of the outstanding voting
securities" and "principal underwriter" shall have their respective meaning
defined in the Act and the rules and regulations thereunder, subject, however,
to such exemptions as may be granted to either the Corporation or the
Distributor of the Shares by the Securities and Exchange Commission.
<PAGE> 4
11. Separate Series. Pursuant to the provisions of the Articles of
Incorporation, each Fund is a separate series of the Corporation, and all debts,
liabilities and expenses of Class A shares of the respective Fund shall be
enforceable only against the assets of Class A shares of such Fund and not
against the assets of any other Fund or class of shares or of the Corporation as
a whole.

IN WITNESS WHEREOF, the Corporation has caused this Plan to be executed
as of the day and year first written above.

THE ENTERPRISE GROUP OF FUNDS, INC.

By:
---------------------------------------
Catherine R. McClellan
Secretary

ENTERPRISE FUND DISTRIBUTORS, INC.

By:
---------------------------------------
Catherine R. McClellan
Senior Vice President and Secretary

<PAGE> 5
AMENDED AND RESTATED PLAN OF DISTRIBUTION PURSUANT
TO RULE 12b-1

CLASS B SHARES

AMENDED AND RESTATED PLAN OF DISTRIBUTION adopted as of the 1st day of
March, 1998, by The Enterprise Group of Funds, Inc., a Maryland corporation (the
"Corporation"), on behalf of the Class B shares of each of its separately
designated series (each, a "Fund").

W I T N E S S E T H:

WHEREAS, the Corporation is registered under the Investment Company Act
of 1940, as amended (the "Act"), as an open-end management investment company;
and

WHEREAS, the Corporation desires to adopt this Amended and Restated
Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Investment
Company Act, pursuant to which the Fund will pay account maintenance and
distribution fees to the Distributor with respect to Class B shares of the Fund;
and

WHEREAS, the Board of Directors of the Corporation (the "Directors") as
a whole, and the Directors who are not interested persons of the Corporation and
who have no direct or indirect financial interest in the operation of this Plan
or in any agreement relating hereto (the "12b-1 Directors"), having determined,
in the exercise of reasonable business judgment and in light of their fiduciary
duties under state law and under Sections 36(a) and (b) of the Act, that there
is a reasonable likelihood that this Plan will benefit the Fund and its Class B
shareholders, have approved this Plan by votes cast in person at a meeting
called for the purpose of voting hereon and on any agreements related hereto;

NOW THEREFORE, the Corporation on behalf of the Fund hereby adopts this
Plan on the following terms:

1. Account Maintenance and Distribution Activities. The
Corporation has engaged the Distributor to distribute Class B shares of each
Fund and to service shareholder accounts using all of available facilities of
the Distributor, including sales personnel and branch office and
<PAGE> 6
central support systems, and also using such other qualified broker-dealers and
financial institutions as the Distributor may select, including affiliated
persons of the Distributor. The Distributor shall spend such amounts on
distribution and account maintenance activities as it deems appropriate,
including, without limitation:

(a) sales commissions and trailer commissions paid to, or on account
of, registered representatives of the Distributor;

(b) indirect and overhead costs of the Distributor associated with its
activities as Distributor;

(d) sales commissions (including trailer commissions) paid to, or on
account of, Selected Agents (as hereinafter defined) which have
entered into agreements with the Distributor with respect to Class
B shares of the Fund as described in Section 3 hereof.

2. Account Maintenance and Distribution Fees. The Fund shall pay the
Distributor an account maintenance fee under the Plan at the end of each month
at the annual rate of 0.25% of average daily net assets attributable to Class B
shares of the Fund to compensate the Distributor for account maintenance
activities. In addition, the Fund shall pay the Distributor a distribution fee
under the Plan at the end of each month at the annual rate of .75% of average
daily net assets attributable to Class B shares of the Fund (except the Money
Market Portfolio, as to which the distribution fee hereunder shall be at the
annual rate of .60% of average daily net assets of Class B shares), to
compensate the Distributor for its activities hereunder. Amounts payable under
the Plan shall be subject to the limitations of Rule 2830 of the Conduct Rules
of the National Association of Securities Dealers, Inc., as such rule may be
amended from time to time.

4. Related Agreements. All agreements with any person relating to
implementation of this Plan shall be in writing, and any agreement related to
this Plan shall provide:
<PAGE> 7
(a) that such agreement may be terminated at any time, without
payment of any penalty, by vote of a majority of the 12b-1 Directors or, by vote
of a majority of the outstanding voting securities (as defined in the Act) of
Class B shares of the Fund, on not more than 60 days' written notice to any
other party to the agreement; and

(b) that such agreement shall terminate automatically in the
event of its assignment.

5. Quarterly Reports. An appropriate officer of the Corporation
shall provide to the Directors and the Directors shall review, at least
quarterly, a written report of the amounts expended pursuant to this Plan with
respect to Class B shares of the Fund and any related agreement and the purpose
for which such expenditures were made.

(b) This Plan may be terminated at any time by vote of a
majority of the 12b-1 Directors or by vote of a majority of the outstanding
voting securities (as defined in the Act) of Class B shares of the Fund.

7. Amendments. This Plan may not be amended to increase
materially the fees authorized by Section 2 hereof unless such amendment is
approved by a vote of a majority of the outstanding voting securities (as
defined in the Act) of Class B shares of the Fund, and no material amendment to
this Plan shall be made unless approved in the manner provided for the annual
renewal of this Plan in Section 6(a) hereof.

10. Definition of Certain Terms. For purposes of this Plan, the
terms "assignment," "interested person," "majority of the outstanding voting
securities" and "principal underwriter" shall have their respective meaning
defined in the Act and the rules and regulations thereunder, subject, however,
to such exemptions as may be granted to either the Corporation or the
Distributor of the Shares by the Securities and Exchange Commission.
<PAGE> 8
11. Separate Series. Pursuant to the provisions of the Articles of
Incorporation, each Fund is a separate series of the Corporation, and all debts,
liabilities and expenses of Class B shares of the respective Fund shall be
enforceable only against the assets of Class B shares of such Fund and not
against the assets of any other Fund or class of shares or of the Corporation as
a whole.

IN WITNESS WHEREOF, the Corporation has caused this Plan to be executed
as of the day and year first written above.

THE ENTERPRISE GROUP OF FUNDS, INC.

By:
---------------------------------------
Catherine R. McClellan
Secretary

ENTERPRISE FUND DISTRIBUTORS, INC.

By:
---------------------------------------
Catherine R. McClellan
Senior Vice President and Secretary

<PAGE> 9
AMENDED AND RESTATED PLAN OF DISTRIBUTION PURSUANT
TO RULE 12b-1

CLASS C SHARES

AMENDED AND RESTATED PLAN OF DISTRIBUTION adopted as of the 1st day of
March, 1998, by The Enterprise Group of Funds, Inc., a Maryland corporation (the
"Corporation"), on behalf of the Class C shares of each of its separately
designated series (each, a "Fund").

W I T N E S S E T H:

WHEREAS, the Corporation is registered under the Investment Company Act
of 1940, as amended (the "Act"), as an open-end management investment company;
and

WHEREAS, the Board of Directors of the Corporation (the "Directors") as
a whole, and the Directors who are not interested persons of the Corporation and
who have no direct or indirect financial interest in the operation of this Plan
or in any agreement relating hereto (the "12b-1 Directors"), having determined,
in the exercise of reasonable business judgment and in light of their fiduciary
duties under state law and under Sections 36(a) and (b) of the Act, that there
is a reasonable likelihood that this Plan will benefit the Fund and its Class C
shareholders, have approved this Plan by votes cast in person at a meeting
called for the purpose of voting hereon and on any agreements related hereto;

NOW THEREFORE, the Corporation on behalf of the Fund hereby adopts this
Plan on the following terms:

1. Account Maintenance and Distribution Activities. The Corporation has
engaged the Distributor to distribute Class C shares of each Fund and to service
shareholder accounts using all of available facilities of the Distributor,
including sales personnel and branch office and
<PAGE> 10
central support systems, and also using such other qualified broker-dealers and
financial institutions as the Distributor may select, including affiliated
persons of the Distributor. The Distributor shall spend such amounts on
distribution and account maintenance activities as it deems appropriate,
including, without limitation:

(a) sales commissions and trailer commissions paid to, or on account
of, registered representatives of the Distributor;

(b) indirect and overhead costs of the Distributor associated with its
activities as Distributor;

(d) sales commissions (including trailer commissions) paid to, or on
account of, Selected Agents (as hereinafter defined) which have
entered into agreements with the Distributor with respect to Class
C shares of the Fund as described in Section 3 hereof.

2. Account Maintenance and Distribution Fees. The Fund shall pay
the Distributor an account maintenance fee under the Plan at the end of each
month at the annual rate of .25% of average daily net assets attributable to
Class C shares of the Fund to compensate the Distributor for account maintenance
activities. In addition, the Fund shall pay the Distributor a distribution fee
under the Plan at the end of each month at the annual rate of .75% of average
daily net assets attributable to Class C shares of the Fund (with the exception
of the Money Market Portfolio, as to which the distribution fee hereunder shall
be at the annual rate of .60% of average daily net assets of Class C shares), to
compensate the Distributor for its activities hereunder. Amounts payable under
the Plan shall be subject to the limitations of Rule 2830 of the Conduct Rules
of the National Association of Securities Dealers, Inc., as such rule may be
amended from time to time.

4. Related Agreements. All agreements with any person relating to
implementation of this Plan shall be in writing, and any agreement related to
this Plan shall provide:
<PAGE> 11
(a) that such agreement may be terminated at any time, without
payment of any penalty, by vote of a majority of the 12b-1 Directors or, by vote
of a majority of the outstanding voting securities (as defined in the Act) of
Class C shares of the Fund, on not more than 60 days' written notice to any
other party to the agreement; and

(b) that such agreement shall terminate automatically in the
event of its assignment.

5. Quarterly Reports. An appropriate officer of the Corporation
shall provide to the Directors and the Directors shall review, at least
quarterly, a written report of the amounts expended pursuant to this Plan with
respect to Class C shares of the Fund and any related agreement and the purpose
for which such expenditures were made.

(b) This Plan may be terminated at any time by vote of a
majority of the 12b-1 Directors or by vote of a majority of the outstanding
voting securities (as defined in the Act) of Class C shares of the Fund.

7. Amendments. This Plan may not be amended to increase
materially the fees authorized by Section 2 hereof unless such amendment is
approved by a vote of a majority of the outstanding voting securities (as
defined in the Act) of Class C shares of the Fund, and no material amendment to
this Plan shall be made unless approved in the manner provided for the annual
renewal of this Plan in Section 6(a) hereof.

10. Definition of Certain Terms. For purposes of this Plan, the
terms "assignment," "interested person," "majority of the outstanding voting
securities" and "principal underwriter" shall have their respective meaning
defined in the Act and the rules and regulations thereunder, subject, however,
to such exemptions as may be granted to either the Corporation or the
Distributor of the Shares by the Securities and Exchange Commission.
<PAGE> 12
11. Separate Series. Pursuant to the provisions of the Articles of
Incorporation the Fund is a separate series of the Corporation, and all debts,
liabilities and expenses of Class C shares of the respective Fund shall be
enforceable only against the assets of Class C shares of the Fund and not
against the assets of any other Fund or class of shares or of the Corporation as
a whole.

IN WITNESS WHEREOF, the Corporation has caused this Plan to be executed
as of the day and year first written above.

THE ENTERPRISE GROUP OF FUNDS, INC.

By:
---------------------------------------
Catherine R. McClellan
Secretary

ENTERPRISE FUND DISTRIBUTORS, INC.

By:
---------------------------------------
Catherine R. McClellan
Senior Vice President and Secretary

<PAGE> 1
[LOGO ENTERPRISE GROUP OF FUNDS]

ENTERPRISE FUND DISTRIBUTORS, INC.
- --------------------------------------------------------------------------------
Atlanta Financial Center - 3343 Peachtree Road NE -
Suite 450 - Atlanta, GA 30326-1022
(404) 261-1116 - Facsimile (404) 261-1118 - (800) 432-4320

Dear Soliciting Broker/Dealer:

As the principal underwriter for The Enterprise Group of Funds, Inc.,
(hereinafter referred to as the "Fund"), we invite you to participate in the
distribution of the $.10 par value capital stock of the Fund (hereinafter
referred to as "the shares"), subject to the following terms:

1. SALES: In all sales of the shares to the public, you shall act
as dealer for your own account and in no transaction shall you have any
authority to act as agent for the Fund, for us, or for any other dealer.

2. PRICES: The Fund offers multiple classes of shares which include
the ability of investors to purchase shares with a front-end sales charge
("Class A Shares"); shares subject to a contingent deferred sales charge
("Class B Shares and Class C Shares") and a distribution fee greater than that
with respect to the Class A Shares; and as to institutional investors, shares
sold without a CDSC with no distribution fee ("Class Y Shares") for large
purchases. It is essential that the Dealer's employees assist the investor in
making a decision in purchasing shares of the Fund in the class that best suits
his or her particular situation. Relevant information which must be obtained
by the Dealer before placing an order on behalf of the investor includes: 1)
the specific purchase order dollar amount; 2) the length of time the investor
expects to hold the shares; and 3) any other relevant circumstances, such as
the availability of purchases under a Letter of Intent.

THE DEALER AGREES THAT APPROPRIATE SUPERVISORY PERSONNEL WITHIN YOUR
ORGANIZATION MUST ENSURE THAT ALL REGISTERED REPRESENTATIVES RECEIVING INVESTOR
INQUIRIES ABOUT THE PURCHASE OF FUND SHARES MUST ADVISE THE INVESTOR OF THE
AVAILABLE PRICING STRUCTURE OFFERED BY THE FUND AND THE IMPACT OF CHOOSING ONE
METHOD OVER ANOTHER, INCLUDING BREAKPOINTS AND THE AVAILABILITY OF LETTERS OF
INTENT. IN CERTAIN INSTANCES IT MAY BE APPROPRIATE FOR SUPERVISORY PERSONNEL
TO DISCUSS A PURCHASE WITH THE INVESTOR.

With respect to Class A Shares, Class B Shares, Class C Shares and
Class Y Shares of the Fund, orders received from you will be accepted by the
Fund at the public offering price applicable to each order. The minimum and
maximum dollar purchase of Class A, Class B, Class C and Class Y Shares of the
Fund by any person shall be the applicable minimum and maximum described in the
then current Fund Prospectus, and no order for less or more than such amounts
will be accepted hereunder. The public offering price shall be the net asset
value per share as determined and effective as of the time specified in the
then current Fund Prospectus. The procedures relating to the handling of
orders shall be subject to instructions that we shall communicate from time to
time to you. All orders are subject to acceptance or rejection by the Fund or
its Transfer Agent in our sole discretion. The Fund and the Distributor
reserve the right, without notice, to suspend or withdraw the offering of Class
A, Class B, Class C and Class Y Shares entirely.
<PAGE> 2

Class A Shares:

<TABLE>
<CAPTION>
SALES DEALER DISTRIBUTION
INVESTMENT AMOUNT CHARGE COMMISSION FEE TO DEALER
----------------- ------ ---------- -------------
<S> <C> <C> <C>
Less than $100,000 4.75% 4.00% 0.30*
$100,000 up to $249,999 3.75% 3.00% 0.30*
$250,000 up to $499,999 2.50% 2.00% 0.30*
$500,000 up to $999,999 2.00% 1.50% 0.30*
</TABLE>

*No fee paid on Money Market Portfolio shares.

Sales of $1,000,000 or more are subject to a CDSC for a two-year
period following the initial purchase. The sales commission on such purchases
will be 1% of the first $1,000,000 up to $4,999,999 of Class A Shares; 0.75 of
1% of the amounts from $5,000,000 to $19,999,999; plus 0.50 of 1% of amounts in
excess of $20,000,000.

In determining the amount of purchase of Class A Shares, the aggregate
dollars being invested in all Portfolios excluding all dollars that have never
been subject to a sales charge at one time or pursuant to a Letter of Intent by
the investor, are aggregated to determine the applicable sales charge.

An annual 0.30% Distribution Fee on sale of all Shares (with the
exception of the Money Market Portfolio) will be paid following the anniversary
date of the purchase.

Class B: The Dealer concession on Class B Shares will be 4.00% of
which amount 0.25% constitutes an advance by the Distributor of the service fee
that would otherwise be payable during the first year subsequent to the sale of
Class B Shares to Dealers who sell Class B Shares. An annual 0.25% Dealer
Distribution reallowance on shares of each Portfolio (with the exception of the
Money Market Portfolio) will be paid following the anniversary date of the
purchase and is inclusive of the annual service fee referenced above. Class B
Shares will convert to Class A Shares after eight (8) years.

Class C: The Dealer concession on these Shares will be 1.0% of the
total amount of Shares which have been sold and paid for during the period of
which amount 0.25% on sale of all Shares (with the exception of the Money
Market Portfolio) constitutes an advance by the Distributor of the service fee
that would otherwise be payable during the first year subsequent to the sale of
Class C Shares to Dealers who sell Class C Shares. A 1.0% annual Dealer
Distribution reallowance on shares of each Portfolio (with the exception of the
Money Market Portfolio) will be paid following the first year on the
anniversary date of the purchase on a prorated quarterly basis (0.25%) and is
inclusive of the annual service fee referred to above.

Class Y Shares: There is no sales commission on Class Y Shares.

You acknowledge and understand that Class B Shares and Class C Shares
may be subject to a CDSC payable to us as set forth in the Fund prospectus in
effect at the time of the original purchase of such Class B Shares and Class C
Shares from the Fund, and the repurchase price that will be paid by the Fund
for such Class B Shares and Class C Shares will reflect the imposition of any
such CDSC. If you act as agent for your customer in selling Class B Shares and
Class C Shares to us, you agree not to charge your customer more than a fair
commission for handling the transaction.

We understand and agree that qualification of the shares for sale
shall be our sole responsibility and that you assume no responsibility or
obligation with respect to such eligibility. You understand and agree that
your compliance with the requirements of the securities or "blue sky" laws in
each jurisdiction with respect to your right to sell the shares in such
jurisdiction shall be your sole responsibility.

3. PAYMENT: Payment shall be made within three (3) business days to
the transfer agent at the confirmed sales price to the public. We reserve the
right to cancel any order for which payment has not been made within the third
(3rd) day.
<PAGE> 3

4. ISSUANCE AND TRANSFER: Shares will not be issued until
payment has been received by us. In order to avoid unnecessary delay, it is
contemplated that the shares sold to you will be delivered in the name of your
customer. Such delivery will be made promptly in accordance with your written
transfer instructions.

5. LIQUIDATION: In the redemption of any shares by the Fund, it
is agreed that you will act only as agent for the holder of the shares and
place the order for redemption only with us. All redemption orders will
conform to liquidation provisions of the Fund as set out in the prospectus.

6. RESTRICTIONS ON DEALER: You are not authorized, nor is any
other person authorized or permitted, to give any information or make any
representation concerning the shares other than those which are contained in
the current prospectus and in such other printed information as may be
subsequently issued by us as information supplemental to such prospectus and
approved by us in writing for use in connection with such prospectus. You will
not use the words "The Enterprise Group of Funds, Inc." or any approximation
thereof, whether in writing, by radio or television, or in any other
advertising media without our prior written approval.

We agree to supply you with prospectuses in reasonable quantities as
supplemental sales literature, sales bulletins, and other information as issued
and approved by us. You agree not to use any other advertising or sales
material relating to the sale of the Fund's shares unless approved in writing
by us.

You will comply with all applicable state and federal laws and with
the rules and regulations of authorized regulatory agencies thereunder. You
will not offer any of the shares for sale unless the shares are duly registered
under the applicable state and federal statutes and the rules and regulations
thereunder.

Neither this agreement nor any monies due or to become due hereunder
shall be assigned by you without our prior written approval.

It is understood that you are not an agent for us, for the Fund or for
any other dealer, and that you are not a partner, employee, or agent of ours.

If you sell or offer for sale shares in the United States, you
represent that you are and will remain a member in good standing of the
National Association of Securities Dealers, Inc. And you agree to abide by all
of its rules and regulations, including its Conduct Rules. Reference is hereby
made to Conduct Rule 2830 of the National Association of Securities Dealers,
Inc., which Rule is incorporated herein by references as set forth in full.
Any breach of this Section will immediately and automatically terminate this
agreement. You also represent that you are a properly registered broker or
dealer under the Securities Exchange Act of 1934, and agree to notify us
promptly of any change, termination, or suspension of membership in the
National Association of Securities Dealers, Inc. You are responsible for
supervision of your registered representatives and other associated persons
which will enable you to ensure that your registered representatives and
associated persons are in compliance with applicable securities laws, rules and
regulations and statements of policy promulgated thereunder.

If you do not sell or offer for sale shares in the United States, you
agree to comply with the securities law of any jurisdiction in which you sell
or offer for sale shares and agree to indemnify us for any violations of such
laws. You agree that you will not sell in the United States unless you become
a member of the National Association of Securities Dealers, Inc.

You agree to indemnify and hold the Fund, its adviser, and
distributor, harmless from any liabilities (and reasonable attorneys fees and
court costs) that may result from your actions or omissions or those of your
registered representatives and other associated persons.

7. CANCELLATION: We each shall have the right to cancel this
agreement at any time upon written or telegraph notice to the other.
<PAGE> 4

8. MISCELLANEOUS: This agreement shall be governed in accordance
with the laws of Georgia, and no modification hereof shall be valid unless it
is in writing. This agreement supersedes and cancels all previous agreements
between us, whether oral or written.

Failure of either party to terminate this agreement upon occurrence of
any event set forth in this agreement as a cause for termination shall not
constitute a waiver of the right to terminate this agreement at a later time on
account of such occurrence.

All communications and notices to either party shall be sent to the
address set out in this agreement or to such other address as each party may
specify from time to time in writing.

Very truly yours,

ENTERPRISE FUND DISTRIBUTORS, INC. BY:
ATLANTA FINANCIAL CENTER ------------------------
3343 PEACHTREE ROAD NE
SUITE 450
ATLANTA, GEORGIA 30326-1022

The undersigned hereby accepts your invitation to become a member of the
selling groups referred to herein and agrees to abide by all of the foregoing
terms and conditions. This __________ day of ___________________________,
19_______.

By:
------------------------

----------------------------
Title

----------------------------
Authorized Signature

Broker/Dealer #:
------------------ ----------------------------
Name of Firm

----------------------------
Address

----------------------------
City State Zip

----------------------------
Phone Facsimile

<PAGE> 1
EXHIBIT 10

February 27, 1998

Securities and Exchange Commission
450 Fifth Street
Washington, D.C. 20549

Re: The Enterprise Group of Funds, Inc.
Registration Statement No. 2-28097

Dear Sir or Madam:

I am counsel to The Enterprise Group of Funds, Inc., (the "Fund"), and in so
acting, have reviewed Post-Effective Amendment No. 48 (the "Post Effective
Amendment") to the Fund's Registration Statement on Form N-1A, Registration File
No. 2-28097. Representatives of the Fund have advised that the Fund will file
the Post-Effective Amendment pursuant to paragraph (a) of Rule 485 ("Rule 485")
promulgated under the Securities Act of 1933. In connection therewith, the Fund
has requested that I provide this letter.

In my examination of the Post-Effective Amendment, I have assumed the conformity
to the originals of all documents submitted to me as copies.

Based upon the foregoing, I hereby advise you that:

(1) the Fund is a corporation duly incorporated and validly existing in
good standings under the laws of the State of Maryland;

(2) the Common Stock to be offered has been duly authorized and, when
sold as contemplated in the Amendments, will be validly issued,
fully paid and nonassessable; and

Very truly yours,

Catherine R. McClellan

lah

<PAGE> 1
EXHIBIT 11

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the inclusion in this Post-Effective Amendment No. 48 to
the registration statement under the Securities Act of 1933 (file
number 2-28097) of our report dated February , 1997 on our audit of the
financial statements and financial highlights of The Enterprise Group
of Funds, Inc. appearing in the Registrant's 1997 Annual Report. We
also consent to the reference to our Firm under the caption
"Independent Accountants."

COOPERS & LYBRAND L.L.P.

Atlanta, Georgia
February 27, 1998