<PAGE>
S E M I - A N N U A L R E P O R T
JUNE 30, 1998
[GRAPHIC]
THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
THE ENTERPRISE GROUP OF FUNDS, INC.
Enterprise Growth Fund
Enterprise Equity Fund
Enterprise Growth and Income Fund
Enterprise Equity Income Fund
Enterprise Capital Appreciation Fund
Enterprise Small Company Growth Fund
Enterprise Small Company Value Fund
Enterprise International Growth Fund
Enterprise Government Securities Fund
Enterprise High-Yield Bond Fund
Enterprise Tax-Exempt Income Fund
Enterprise Managed Fund
Enterprise Money Market Fund
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
The Enterprise Growth Fund
Manager's Comments................................................................................ 4
Portfolio of Investments.......................................................................... 5
The Enterprise Equity Fund
Manager's Comments................................................................................ 6
Portfolio of Investments.......................................................................... 8
The Enterprise Growth and Income Fund
Manager's Comments................................................................................ 10
Portfolio of Investments.......................................................................... 12
The Enterprise Equity Income Fund
Manager's Comments................................................................................ 14
Portfolio of Investments.......................................................................... 16
The Enterprise Capital Appreciation Fund
Manager's Comments................................................................................ 19
Portfolio of Investments.......................................................................... 21
The Enterprise Small Company Growth Fund
Manager's Comments................................................................................ 23
Portfolio of Investments.......................................................................... 25
The Enterprise Small Company Value Fund
Manager's Comments................................................................................ 27
Portfolio of Investments.......................................................................... 29
The Enterprise International Growth Fund
Manager's Comments................................................................................ 33
Portfolio of Investments.......................................................................... 35
The Enterprise Government Securities Fund
Manager's Comments................................................................................ 40
Portfolio of Investments.......................................................................... 42
The Enterprise High-Yield Bond Fund
Manager's Comments................................................................................ 44
Portfolio of Investments.......................................................................... 46
The Enterprise Tax-Exempt Income Fund
Manager's Comments................................................................................ 52
Portfolio of Investments.......................................................................... 53
The Enterprise Managed Fund
Manager's Comments................................................................................ 56
Portfolio of Investments.......................................................................... 58
The Enterprise Money Market Fund
Manager's Comments................................................................................ 60
Portfolio of Investments.......................................................................... 62
Statements of Assets and Liabilities................................................................ 64
Statements of Operations............................................................................ 66
Statements of Changes in Net Assets................................................................. 68
Financial Highlights................................................................................ 72
Notes to Financial Statements....................................................................... 98
</TABLE>
Returns in this report are historical and do not guarantee future performance of
any fund. Investment return and principal value will fluctuate so that shares,
when redeemed, may be worth more or less than their cost.
<PAGE>
ENTERPRISE
GROUP OF FUNDS
- --------------------------------------------------------------------------------
MESSAGE FROM THE CHAIRMAN
Dear Fellow Shareholder:
At a glance, the first half of 1998 indicates another good period for
investors, who have come to expect as much during this decade. A closer
examination, however, reveals that the past six months have been characterized
by fits and starts in the marketplace. According to Lipper Analytical Services,
Inc., the average diversified U.S. stock fund gained 11.71 percent, including
reinvested dividends, through June 30. The first quarter was responsible for the
gain; the category actually lost 0.29 percent during the second quarter.
On the fixed income side, Morningstar, Inc., reported that the average
taxable bond fund returned 2.82 percent during the first six months of 1998. As
one might expect, as stock funds stopped gaining overall in the second quarter,
bond funds benefited from a "flight to quality."
FIRST HALF REVIEW
The economic troubles in Asia that became apparent to the rest of the world
during the last half of 1997 had telling effects on the marketplace during the
first half of 1998. International conglomerates came under earnings pressure and
the U.S. dollar surged in strength, raising the prices of U.S. exports and
lowering the costs of imports. These conditions favored blue-chip investments
such as large-capitalization companies and Treasury bonds, according to
Morningstar. The S&P 500 Composite Index, a broad-market benchmark of blue-chip
stocks, reflected this trend by gaining 17.71 percent during the period.
Small-cap stocks, after a brief rally in the latter half of 1997, could not
sustain that momentum. During the first half of 1998, the Russell 2000 Index
gained 4.91 percent, including a second-quarter drop of 4.67 percent, according
to Evaluation Associates, Inc.
Although the Asian economies dominated business news, there were bright
spots in the global markets. Europe, in particular, enjoyed a strong bullish
advance as companies there embraced U.S.-style efficiencies and increased their
focus on shareholder value. Funds investing in European stocks had the best
performance of any mutual fund category tracked by Lipper. Through June 30,
these funds gained 23.95 percent year-to-date.
Possibly influenced by the Asian economic woes, the Federal Reserve stayed
on the sidelines and kept short-term interest rates steady during the first half
of 1998. These conditions favored General U.S. Treasury funds -- Lipper reported
that the group rose 4.52 percent during the first six months of 1998.
2 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
LOOKING FORWARD
We believe that the volatility that characterized the marketplace during the
first two quarters of 1998 could possibly extend throughout the second half as
the fundamentally sound U.S. economy and the fundamentally ill Asian economies
exert conflicting forces. Past performance is, of course, no guarantee of future
results. We continue to emphasize to our shareholders the value of long-term
investment planning over short-term trading to help achieve financial goals.
Overall, the performance of our funds continued to be very favorable, and we
continued to receive favorable media attention during the first six months of
the year. In particular, the Enterprise Growth, Small Company Value, Capital
Appreciation, Managed and Tax-Exempt Income Funds were mentioned positively
relative to their mutual fund peer groups. We are celebrating the 30th
anniversary of the Enterprise Growth Fund, subadvised by Montag & Caldwell,
Inc., this year. The Enterprise Growth Fund is one of the nation's best
long-term performing large-cap growth funds.
We encourage you to review the fund managers' comments in this semi-annual
report. You will find insightful commentaries and a variety of investment
strategies for the remainder of 1998. As always, we appreciate your support of
The Enterprise Group of Funds, and pledge to continue our primary mission of
adding value to your investment portfolio by providing special access to some of
the most accomplished investment firms in the industry.
Sincerely,
/s/ VICTOR UGOLYN
Victor Ugolyn
Chairman, President and Chief Executive Officer
THE ENTERPRISE GROUP OF FUNDS, INC. 3
<PAGE>
THE ENTERPRISE GROWTH FUND
MONTAG & CALDWELL, INC.
Atlanta, Georgia
INVESTMENT MANAGEMENT
Montag & Caldwell served as fund manager to Alpha Fund, Inc., the predecessor of
The Enterprise Growth Fund, since the fund was organized in 1968. Montag &
Caldwell manages approximately $22 billion for institutional clients, and its
normal investment minimum is $40 million.
INVESTMENT OBJECTIVE
The objective of the Enterprise Growth Fund is to seek appreciation of capital
primarily through investments in common stocks.
INVESTMENT PHILOSOPHY
The equity selection process is a low-risk, growth stock approach. Valuation is
the key selection criterion that makes its investment style risk-averse. Montag
& Caldwell also emphasizes growth characteristics because it seeks not only
companies with shares that are attractively priced but also those that may
experience strong earnings growth relative to other companies.
FIRST HALF 1998 PERFORMANCE REVIEW
Early in the year, the market was led by strength in economically sensitive
consumer and capital goods issues. Since slower domestic economic growth in the
periods ahead is anticipated, the fund had less representation in these equity
areas. As the first half progressed, investment returns were strong for the
shares of high-quality, global growth companies. The fund benefited from the
strength in this market segment and from above-average weightings in the
top-performing health care and technology sectors.
The fundamental outlook for the stock market continues to be encouraging.
Prospects remain good for sustained growth in the economy and corporate profits,
low inflation, and steady-to-lower bond yields. Federal tax rates at
historically attractive levels, the elimination of the annual federal budget
deficit, the triumph of capitalism, and the ending of the Cold War are also very
positive factors supportive of higher share prices. Still, tempering Montag &
Caldwell's enthusiasm were stock market valuations that reflected these strong
fundamentals. Nevertheless, Montag & Caldwell continues to think the most likely
direction for share prices is upward, with corrections probably contained
somewhere within the five-to-10 percent area. At this time, Montag & Caldwell
does not foresee a bigger stock setback because it does not expect a significant
increase in interest rates or a large decline in corporate profits.
FUTURE INVESTMENT STRATEGY
While sustained growth in the economy and corporate earnings is expected,
corporate profit increases are slowing. In a setting of slower corporate profit
growth and steady-to-lower bond yields, the above-average, steady and
predictable earnings growth rates of quality growth companies are becoming
increasingly attractive. Montag & Caldwell particularly favors the shares of
multinational consumer and health care companies with strong product offerings
that are value-added and proprietary in nature, and selective technology
holdings that may benefit from improved industry conditions and new product
offerings.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE FUND MANAGER ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE
MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER
CONDITIONS.
4 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
GROWTH FUND
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Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
COMMON STOCKS -- 96.11% AMOUNT VALUE
<S> <C> <C>
- -------------------------------------------------------------------------------
BUSINESS SERVICES -- 3.30%
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Interpublic Group of Companies Inc................ 340,000 $ 20,633,750
Manpower Inc...................................... 550,000 15,778,125
------------
36,411,875
COMPUTER HARDWARE -- 9.63%
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Cisco Systems Inc. (a)............................ 450,000 41,428,125
Hewlett Packard Company........................... 527,900 31,608,013
Intel Corporation................................. 450,000 33,356,250
------------
106,392,388
COMPUTER SERVICES -- 2.09%
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Solectron Corporation (a)......................... 550,000 23,134,375
COMPUTER SOFTWARE -- 5.49%
- -------------------------------------------------------------------------------
Electronic Arts (a)............................... 400,000 21,600,000
Microsoft Corporation (a)......................... 360,000 39,015,000
------------
60,615,000
CONSUMER NON-DURABLES -- 11.87%
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Gillette Company.................................. 790,000 44,783,125
Mattel Inc........................................ 900,000 38,081,250
Procter & Gamble Company.......................... 530,000 48,263,125
------------
131,127,500
ELECTRICAL EQUIPMENT -- 3.05%
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General Electric Company.......................... 370,000 33,670,000
ENTERTAINMENT & LEISURE -- 3.57%
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Walt Disney Company............................... 375,000 39,398,438
FINANCE -- 3.40%
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American Express Company.......................... 330,000 37,620,000
FOOD & BEVERAGES & TOBACCO -- 4.49%
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Coca-Cola Company................................. 580,000 49,590,000
HEALTH CARE -- 3.46%
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Medtronic Inc..................................... 600,000 38,250,000
HOTELS & RESTAURANTS -- 7.15%
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Cracker Barrel Old Country Store.................. 350,000 11,112,500
Marriott International Inc........................ 605,800 19,612,775
McDonald's Corporation............................ 700,000 48,300,000
------------
79,025,275
INSURANCE -- 3.30%
- -------------------------------------------------------------------------------
American International Group Inc.................. 250,000 36,500,000
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- -------------------------------------------------------------------------------
MEDICAL INSTRUMENTS -- 3.50%
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Boston Scientific Corporation (a)................. 540,000 $ 38,677,500
OIL SERVICES -- 4.62%
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Baker Hughes Inc.................................. 450,000 15,553,125
Schlumberger Ltd.................................. 520,000 35,522,500
------------
51,075,625
PHARMACEUTICALS -- 17.38%
- -------------------------------------------------------------------------------
Bristol Myers Squibb Company...................... 400,000 45,975,000
Johnson & Johnson................................. 640,000 47,200,000
Lilly (Eli) & Company............................. 630,000 41,619,375
Merck & Company Inc............................... 200,000 26,750,000
Pfizer Inc........................................ 281,100 30,552,056
------------
192,096,431
RETAIL -- 5.88%
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Gap Inc........................................... 486,200 29,962,075
Home Depot Inc.................................... 421,700 35,027,456
------------
64,989,531
TELECOMMUNICATIONS -- 3.93%
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Ericsson L M Tel Company (ADR).................... 916,100 26,223,362
Tellabs Inc. (a).................................. 240,700 17,240,138
------------
43,463,500
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TOTAL COMMON STOCKS
(IDENTIFIED COST $773,804,886).................................. 1,062,037,438
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REPURCHASE AGREEMENT -- 3.40%
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State Street Bank & Trust Repurchase Agreement,
5.00% due 07/01/98
Collateral: U.S. Treasury Bond $23,405,000, 11.25%
due 2/15/15 Value $38,312,908..................... $ 37,555,000 37,555,000
------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $37,555,000)................................... 37,555,000
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TOTAL INVESTMENTS
(IDENTIFIED COST $811,359,886).................................. $1,099,592,438
OTHER ASSETS LESS LIABILITIES -- 0.49%.......................... 5,437,090
------------
NET ASSETS -- 100%.............................................. $1,105,029,528
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</TABLE>
(a) Non-income producing security.
ADR American Depository Receipt.
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 5
<PAGE>
THE ENTERPRISE EQUITY FUND
OPCAP ADVISORS
New York, New York
INVESTMENT MANAGEMENT
OpCap Advisors, a wholly owned subsidiary of Oppenheimer Capital, became fund
manager to this Enterprise fund on May 1, 1997. Oppenheimer Capital manages
approximately $66.6 billion for institutional clients, and its normal investment
minimum is $20 million.
INVESTMENT OBJECTIVE
The objective of the Enterprise Equity Fund is long-term capital appreciation
primarily from investments in securities of companies that are believed by the
fund manager to be undervalued in the marketplace in relation to factors such as
the companies' assets or earnings.
INVESTMENT PHILOSOPHY
OpCap Advisors' investment process uses a fundamental, bottom-up process of
value investing. The security selection process focuses on well-positioned
companies that generate high returns on assets and free cash flow, have strong
barriers to competition, have management oriented to shareholder interests, and
sell at reasonable valuation levels. A complete qualitative review of the
business relative to its peers and its history is the key to the process. OpCap
seeks securities whose under-valuation is great enough to provide significant
upside reward with modest downside risk.
FIRST HALF 1998 PERFORMANCE REVIEW
The fund's year-to-date performance was dampened by an above-average cash
position. However, this cash generates a yield, helps shield against the
potential impact of a market decline, and provides a resource to purchase
quality stocks when they become available at attractive prices.
As always, OpCap selects stocks as if buying the whole business, with the
requirement that the company generate enough cash to make the investment
worthwhile. Despite generally high stock market valuations today, OpCap
continues to find individual stocks that meet its criteria.
During the first six months of 1998, OpCap established new positions in the
common stocks of Champion International Corp., International Flavours and
Fragrances, Inc., McDonald's Corp., Anadarko Petroleum Corp. and Rockwell
International Corp., among others. Rockwell International is a world leader in
industrial automation, avionics and communications and electronic commerce.
Anadarko is one of the world's largest independent oil and gas exploration and
production companies. OpCap's investment in Anadarko is based on the company's
strong fundamentals and inexpensive valuation and is not a bet on the future
direction of crude oil prices. Anadarko has doubled its oil and gas reserves and
production over the past decade at a time when many other petroleum companies
have experienced reserve and production declines. Moreover, the company
continues to add to reserves at finding costs consistently below industry
averages.
OpCap eliminated the following holdings, among others, during the period: UCAR
International, Inc., Wang Laboratories, Inc., Avon Products, Armstrong World
Industries, General Electric Co., Polaroid Corp., and Sysco
6 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
Corp. OpCap is a long-term investor in quality businesses, selling when a stock
reaches its price target, when the fundamentals that caused it to buy the stock
change, or when it finds another stock that offers compellingly better value.
FUTURE INVESTMENT STRATEGY
OpCap believes that some of the best investment value is found in businesses
that generate a high and sustainable level of cash flow, where management uses
the cash flow to benefit shareholders, such as through stock repurchase,
dividends, high-return internal investments, or acquisitions. Because these
businesses constantly create additional shareholder value, their underlying
economic value and market price often rise in tandem for long periods. The
companies in which the fund has investments generate returns on equity that are,
on average, significantly higher than the S&P 500, indicating their superior
business characteristics. Yet, their average price/earnings ratio is
significantly lower than the S&P 500, indicating their attractive value.
Although value stocks have underperformed this year, OpCap believes that in the
long run they may outperform growth stocks.
On balance, OpCap thinks the economic outlook is positive, but there are some
concerns. As always, OpCap buys individual stocks, not the indices or the
economy. Nonetheless, OpCap remains alert to macro trends because they affect
the overall investment environment and the stocks OpCap owns.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE FUND MANAGER ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE
MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER
CONDITIONS.
THE ENTERPRISE GROUP OF FUNDS, INC. 7
<PAGE>
EQUITY FUND
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
COMMON STOCKS -- 82.16% AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
ADVERTISING -- 1.82%
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Omnicom Group Inc................................. 4,000 $ 199,500
AEROSPACE -- 10.75%
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AlliedSignal Inc.................................. 3,000 133,125
Boeing Company.................................... 3,600 160,425
Lockheed Martin Corporation....................... 3,300 349,387
Rockwell International Corporation................ 5,000 240,313
Textron Inc....................................... 4,100 293,919
-----------
1,177,169
AUTOMOTIVE -- 1.38%
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LucasVarity PLC (ADR)............................. 3,800 151,288
BANKING -- 5.08%
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BankBoston Corporation............................ 3,200 178,000
Citicorp.......................................... 1,300 194,025
Wells Fargo & Company............................. 500 184,500
-----------
556,525
CHEMICALS -- 2.25%
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Du Pont (E. I.) De Nemours & Company.............. 3,300 246,262
COMPUTER SERVICES -- 1.56%
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Sabre Group Holdings Inc.......................... 4,500 171,000
CONSUMER PRODUCTS -- 2.95%
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International Flavours & Fragrances Inc........... 5,500 238,906
Mattel Inc........................................ 2,000 84,625
-----------
323,531
CRUDE & PETROLEUM -- 1.23%
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Anadarko Petroleum Corporation.................... 2,000 134,375
DRUGS & MEDICAL PRODUCTS -- 1.70%
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Becton, Dickinson & Company....................... 2,400 186,300
ELECTRICAL EQUIPMENT -- 1.70%
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Avnet Inc......................................... 3,400 185,938
FOOD & BEVERAGES & TOBACCO -- 3.66%
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Diageo PLC (ADR).................................. 3,000 144,563
Philip Morris Companies Inc....................... 6,500 255,937
-----------
400,500
HEALTH CARE -- 2.05%
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Tenet Healthcare Corporation (a).................. 7,200 225,000
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
INSURANCE -- 18.83%
- ------------------------------------------------------------------------------
ACE Ltd........................................... 8,100 $ 315,900
AFLAC Inc......................................... 4,200 127,313
American International Group Inc.................. 850 124,100
Everest Reinsurance Holdings...................... 8,400 322,875
EXEL Ltd.......................................... 4,000 311,250
General Re Corporation............................ 1,300 329,550
Mid Ocean Ltd..................................... 5,000 392,500
Renaissance Holdings Ltd.......................... 3,000 138,937
-----------
2,062,425
MACHINERY -- 5.43%
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Caterpillar Inc................................... 6,200 327,825
Dover Corporation................................. 7,800 267,150
-----------
594,975
MANUFACTURING -- 2.33%
- ------------------------------------------------------------------------------
General Dynamics Corporation...................... 5,500 255,750
MISC. FINANCIAL SERVICES -- 6.81%
- ------------------------------------------------------------------------------
Countrywide Credit Industries Inc................. 3,100 157,325
Federal Home Loan Mortgage Corporation............ 4,500 211,781
Green Tree Financial Corporation.................. 8,800 376,750
-----------
745,856
PAPER & FOREST PRODUCTS -- 1.08%
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Champion International Corporation................ 2,400 118,050
PUBLISHING -- 0.83%
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Donnelley R R & Sons Company...................... 2,000 91,500
RESTAURANTS -- 2.90%
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McDonald's Corporation............................ 4,600 317,400
RETAIL -- 2.45%
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May Department Stores Company..................... 4,100 268,550
TELECOMMUNICATIONS -- 1.35%
- ------------------------------------------------------------------------------
Sprint Corporation................................ 2,100 148,050
TRANSPORTATION -- 4.02%
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AMR Corporation (a)............................... 1,600 133,200
Canadian Pacific Ltd.............................. 6,000 170,250
Union Pacific Corporation......................... 3,100 136,787
-----------
440,237
TOTAL COMMON STOCKS
(IDENTIFIED COST $8,164,870).................................... 9,000,181
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</TABLE>
8 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
EQUITY FUND -- (Continued)
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Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
COMMERCIAL PAPER -- 15.03%
- ------------------------------------------------------------------------------
General Motors Acceptance Corporation, 5.54% due
07/16/98.......................................... $300,000 $ 299,308
Household Finance Corporation 5.51% due
07/20/98.......................................... 200,000 199,419
IBM Corporation 5.52% due 07/17/98................ 200,000 199,509
IBM Credit Corporation 5.50% due 07/15/98......... 200,000 199,572
Ford Motor Credit Company 5.52% due 07/17/98...... 450,000 448,896
American Express Credit Corporation, 5.52% due
07/13/98.......................................... 300,000 299,448
-----------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $1,646,152).................................... 1,646,152
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $9,811,022).................................... $10,646,333
OTHER ASSETS LESS LIABILITIES -- 2.81%.......................... 307,312
-----------
NET ASSETS -- 100%.............................................. $10,953,645
- ------------------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
ADR American Depository Receipt.
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 9
<PAGE>
THE ENTERPRISE GROWTH AND INCOME FUND
RETIREMENT SYSTEM INVESTORS INC.
New York, New York
INVESTMENT MANAGEMENT
Retirement System Investors Inc. ("RSI") has served as fund manager to the
Enterprise Growth and Income Fund since 1991. RSI manages more than $566 million
for all of its clients.
INVESTMENT OBJECTIVE
The objective of the Enterprise Growth and Income Fund is a total return in
excess of the total return of the Lipper Growth and Income Mutual Funds Index
measured over a new period of three to five years, by investing primarily in a
broadly diversified group of large-capitalization stocks.
INVESTMENT PHILOSOPHY
RSI uses a fundamental analysis approach, including both qualitative and
quantitative factors, applied to a universe of well-established companies. The
fund manager seeks to identify reasonable valuations among this group of stocks.
Forward earnings projections and relative valuation parameters are used to
determine price objectives and return potential.
FIRST HALF 1998 PERFORMANCE REVIEW
The first half of 1998 was characterized by fluctuation. After a strong first
quarter, the stock market went through a minor correction in the second quarter
before recovering later in the period.
On a sector attribution analysis, the fund was underweighted in the high-growth,
high-price-to-earnings-ratio, high-performing consumer staples and health care
areas, which held back results. The fund's cash position -- 11 percent at June
30 -- also adversely impacted results, as RSI's valuation disciplines did not
generate sufficient opportunities. Two of the fund's larger holdings, Armstrong
World Industries and Snap-On, had earnings shortfalls that negatively impacted
performance, which RSI believes are short-term in nature and over-reflected in
their exceedingly low valuations.
The fund's relatively large exposure in technology, helped by large positions in
EMC Corporation and BMC Software, favorably impacted results.
FUTURE INVESTMENT STRATEGY
At mid-year 1998, the economy continues to grow at a stellar pace and is
producing little inflation. Unemployment is low and consumer confidence is high.
Concerns about the negative impact of the Asian financial crisis on the economy
and corporate earnings have been offset by strong consumer spending, low
interest rates, and positive money flow and liquidity variables.
RSI sees the stock market as amply valued with a probable earnings slowdown
scenario ahead as companies face tough profit outlooks with limited pricing
power, the Asian crisis, and a firm dollar. Consequently, RSI aims to place
10 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
more emphasis on managing fund risk relative to maximizing returns in the more
volatile market that RSI expects in coming months. This is within the context of
expecting the market to continue to do well longer-term, as earnings
reaccelerate and inflation and interest rates remain low.
In new stock purchases, RSI is focusing on issues with relatively lower
valuations with still reasonable growth prospects. These names more often are in
the mid-sized capitalization range and are more sensitive to the economic cycle.
RSI plans to be alert and aggressive in investing cash reserves as opportunities
develop.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE FUND MANAGER ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE
MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER
CONDITIONS.
THE ENTERPRISE GROUP OF FUNDS, INC. 11
<PAGE>
GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
COMMON STOCKS -- 86.49% AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
AEROSPACE -- 5.97%
- ------------------------------------------------------------------------------
Allied Signal Inc................................. 44,800 $ 1,988,000
Boeing Company.................................... 2,100 93,581
Lockheed Martin Corporation....................... 5,800 614,075
-----------
2,695,656
BANKING -- 7.87%
- ------------------------------------------------------------------------------
BankAmerica Corporation........................... 5,200 449,475
Chase Manhattan Corporation....................... 10,352 781,576
Citicorp.......................................... 4,400 656,700
Washington Mutual Inc............................. 38,300 1,663,656
-----------
3,551,407
BASIC INDUSTRIES -- 1.86%
- ------------------------------------------------------------------------------
Aluminum Company of America....................... 12,700 837,406
BUILDING & CONSTRUCTION -- 8.16%
- ------------------------------------------------------------------------------
Armstrong World Industries Inc.................... 17,100 1,152,112
Martin Marietta Materials Inc..................... 2,800 126,000
Medusa Corporation................................ 1,900 119,225
Southdown Inc..................................... 32,000 2,284,000
-----------
3,681,337
CHEMICALS -- 1.88%
- ------------------------------------------------------------------------------
Du Pont (E. I.) De Nemours & Company.............. 11,400 850,725
COMPUTER HARDWARE -- 12.98%
- ------------------------------------------------------------------------------
Cisco Systems Inc. (a)............................ 3,600 331,425
Dallas Semiconductor Corporation.................. 4,200 130,200
EMC Corporation (Massachusetts) (a)............... 50,100 2,245,106
Hewlett Packard Company........................... 6,300 377,213
IBM............................................... 12,100 1,389,231
Intel Corporation................................. 11,700 867,262
Xerox Corporation................................. 5,100 518,288
-----------
5,858,725
COMPUTER SOFTWARE -- 6.96%
- ------------------------------------------------------------------------------
BMC Software Inc. (a)............................. 20,900 1,085,494
Cadence Design Systems Inc. (a)................... 14,700 459,375
Computer Associates International Inc............. 4,650 258,365
Hyperion Software Corporation..................... 3,200 91,200
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
Sterling Commerce Inc. (a)........................ 25,700 $ 1,246,450
-----------
3,140,884
CRUDE & PETROLEUM -- 5.12%
- ------------------------------------------------------------------------------
British Petroleum (ADR)........................... 6,331 558,711
Exxon Corporation................................. 8,100 577,631
Mobil Corporation................................. 6,400 490,400
Royal Dutch Petroleum (ADR)....................... 4,200 230,213
Texaco Inc........................................ 7,600 453,625
-----------
2,310,580
ELECTRICAL EQUIPMENT -- 6.49%
- ------------------------------------------------------------------------------
Emerson Electric Company.......................... 37,700 2,276,137
General Electric Company.......................... 7,200 655,200
-----------
2,931,337
ENTERTAINMENT & LEISURE -- 0.58%
- ------------------------------------------------------------------------------
Callaway Golf Company............................. 13,400 263,813
FINANCE -- 1.89%
- ------------------------------------------------------------------------------
Merrill Lynch & Company Inc....................... 1,700 156,825
Travelers Inc..................................... 11,500 697,188
-----------
854,013
FOOD & BEVERAGES & TOBACCO -- 2.01%
- ------------------------------------------------------------------------------
Dole Food Inc..................................... 12,600 626,062
Philip Morris Companies Inc....................... 7,100 279,563
-----------
905,625
INSURANCE -- 2.25%
- ------------------------------------------------------------------------------
Allstate Corporation.............................. 5,600 512,750
SunAmerica Inc.................................... 8,750 502,578
-----------
1,015,328
MACHINERY -- 6.78%
- ------------------------------------------------------------------------------
Cincinnati Milacron Inc........................... 15,200 369,550
Deere & Company................................... 17,500 925,312
Ingersoll Rand Company............................ 5,400 237,938
Snap-On Inc....................................... 42,100 1,526,125
-----------
3,058,925
METALS & MINING -- 1.88%
- ------------------------------------------------------------------------------
Potash Corp Saskatchewan Inc...................... 11,200 846,300
MISC. FINANCIAL SERVICES -- 1.17%
- ------------------------------------------------------------------------------
</TABLE>
12 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
GROWTH AND INCOME FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
Federal National Mortgage Association............. 8,700 $ 528,525
OIL SERVICES -- 2.31%
- ------------------------------------------------------------------------------
Dresser Industries Inc............................ 9,100 400,969
Schlumberger Ltd.................................. 9,400 642,137
-----------
1,043,106
PHARMACEUTICALS -- 2.46%
- ------------------------------------------------------------------------------
Johnson & Johnson................................. 5,800 427,750
Lilly (Eli) & Company............................. 800 52,850
Pfizer Inc........................................ 5,800 630,388
-----------
1,110,988
RETAIL -- 4.82%
- ------------------------------------------------------------------------------
Federated Department Stores Inc. (a).............. 17,100 920,194
Pier 1 Imports Inc................................ 35,600 849,950
Tiffany & Company................................. 8,400 403,200
-----------
2,173,344
TELECOMMUNICATIONS -- 3.05%
- ------------------------------------------------------------------------------
GTE Corporation................................... 7,700 428,313
Lucent Technologies Inc........................... 5,008 416,603
Tellabs Inc. (a).................................. 7,400 530,025
-----------
1,374,941
TOTAL COMMON STOCKS
(IDENTIFIED COST $30,644,148)................................... 39,032,965
- ------------------------------------------------------------------------------
PREFERRED STOCK -- 1.18%
- ------------------------------------------------------------------------------
INSURANCE -- 1.07%
- ------------------------------------------------------------------------------
SunAmerica Inc.................................... 10,100 484,800
RETAIL -- 0.11%
- ------------------------------------------------------------------------------
Kmart Financing................................... 700 49,000
-----------
TOTAL PREFERRED STOCK
(IDENTIFIED COST $484,603)...................................... 533,800
- ------------------------------------------------------------------------------
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
COMMERCIAL PAPER -- 8.01%
- ------------------------------------------------------------------------------
Disney Walt Company 5.51% due
07/06/98.......................................... $ 700,000 $ 699,464
Ford Motor Credit Company 5.64% due 07/01/98...... 800,000 800,000
Hasbro Inc. 5.62% due 07/08/98.................... 768,000 767,161
Merrill Lynch & Company Inc. 5.97% due 07/01/98... 650,000 650,000
Pepsico Inc. 6.00% due 07/01/98................... 700,000 700,000
-----------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $3,616,625).................................... 3,616,625
- ------------------------------------------------------------------------------
SHORT TERM GOVERNMENT SECURITIES -- 2.21%
- ------------------------------------------------------------------------------
Federal Home Loan Mortgage Discount Notes, 5.45%
due 07/14/98...................................... 1,000,000 998,032
-----------
TOTAL SHORT TERM GOVERNMENT SECURITIES
(IDENTIFIED COST $998,032)...................................... 998,032
- ------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 1.00%
- ------------------------------------------------------------------------------
State Street Bank & Trust Repurchase Agreement,
2.00% due 07/01/98
Collateral: U.S. Treasury Bond $350,000, 8.125%
due 08/15/19 Value $459,754....................... 450,000 450,000
-----------
TOTAL REPURCHASE AGREEMENT
( IDENTIFIED COST $450,000 ).................................... 450,000
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS
( IDENTIFIED COST $36,193,408).................................. $44,631,422
OTHER ASSETS LESS LIABILITIES -- 1.11 %......................... 501,682
-----------
NET ASSETS -- 100%.............................................. $45,133,104
- ------------------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
ADR American Depository Receipt.
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 13
<PAGE>
THE ENTERPRISE EQUITY INCOME FUND
1740 ADVISERS, INC.
New York, New York
INVESTMENT MANAGEMENT
1740 Advisers has been fund manager to the Enterprise Equity Income Fund since
its inception. 1740 Advisers manages more than $1.7 billion for institutional
clients and its normal investment minimum is $20 million.
INVESTMENT OBJECTIVE
The objective of the Enterprise Equity Income Fund is to seek a combination of
growth and income to achieve an above-average and consistent total return,
primarily from investments in dividend-paying common stocks.
INVESTMENT PHILOSOPHY
Above-average returns can be achieved by buying undervalued, out-of-favor stocks
and selling them after the market has recognized and corrected their
undervaluation. Dividend yield relative to the S&P 500 is the measure of the
value used in this strategy. It provides a disciplined approach to buy and sell
decisions, enhances stability in the fund, and lessens overall market risk.
FIRST HALF 1998 PERFORMANCE REVIEW
The stock market moved up sharply during the first quarter. Investors put aside
their concerns about Southeast Asia and, attracted by continued low inflation
and interest rates, poured money into stocks. Health care, telecommunications,
and financials continued as strong performers and were joined by capital
spending-related names, which had been weak in the fourth quarter after the
Asian crisis hit.
The first half of 1998 started fairly well for the Equity Income Fund.
Overweights in financial, capital goods, and communication services sectors
helped performance. Weakness in the energy sector hurt returns, while financial
services, communication services (primarily telephones), and capital goods
stocks helped returns.
The major investment event of the period was the resurgence of problems in Asia,
this time centered on Japan. As happened last fall, the dollar strengthened,
projections for U.S. economic growth and inflation were lowered, and U.S.
interest rates fell as foreign investors sought a safe haven.
As the Asian crisis resumed, investors sought safety in the dollar, bonds and
big-cap growth and technology stocks. The fund cannot own most of these names
due to little or no dividend yield. Compounding the problem, cyclical, energy,
and telephone stocks -- all high-yield value names -- sold off, creating a very
difficult environment for income-oriented funds. Cyclical and energy stocks were
hit due to Asian concerns. Telephone stocks, which should have been a safe
haven, were hit hard by the announcement on June 24 that AT&T would acquire
Telecommunications Inc. Health care, financials, and a few energy stocks were
outperformers.
FUTURE INVESTMENT STRATEGY
The evidence points to a continuation of the trading range for the near future.
There is not much to push it up dramatically except an improbably quick
resolution to Asian problems. There are a number of events that could
14 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
push the market down further: a much worse Asian situation; much higher
compensation costs; and worse-than-expected earnings. But the favorable monetary
and interest rate environment may put a floor under the trading range. Within
the range there likely may be sector rotation and, on a day-to-day basis,
reaction to economic and market news from the Far East.
In this environment, defensive qualities and stable earnings will be emphasized
in fund strategy. This means a continued emphasis on utilities (both electric
and telephone) and energy (both natural gas and international oils). Financial
stocks continue as an overweight; industry consolidation is ongoing and earnings
are still coming through. Health care stocks are also emphasized both for
earnings growth and predictability. They are relatively high-priced but have
attractive new product flows and decent yields.
Cyclical stocks were hit hard during the month of June as investors moved toward
growth and technology stocks. As a result, the capital spending and basic
materials sectors look attractive on a value basis. They will, however, need
some resolution of the Asian crisis before they come back into favor.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE FUND MANAGER ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE
MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER
CONDITIONS.
THE ENTERPRISE GROUP OF FUNDS, INC. 15
<PAGE>
EQUITY INCOME FUND
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR
PRINCIPAL
COMMON STOCKS -- 87.18% AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
AEROSPACE -- 3.21%
- ----------------------------------------------------------------------------
Northrop Grumman Corporation...................... 7,000 $ 721,875
Textron Inc....................................... 20,000 1,433,750
Timken Company.................................... 35,000 1,078,437
United Technologies Corporation................... 15,000 1,387,500
------------
4,621,562
AUTOMOTIVE -- 3.27%
- ----------------------------------------------------------------------------
Eaton Corporation................................. 15,000 1,166,250
Ford Motor Company................................ 35,000 2,065,000
General Motors Corporation........................ 22,000 1,469,875
------------
4,701,125
BANKING -- 9.20%
- ----------------------------------------------------------------------------
BankAmerica Corporation........................... 15,000 1,296,562
BankBoston Corporation............................ 30,000 1,668,750
Bankers Trust New York Corporation................ 10,000 1,160,625
Chase Manhattan Corporation....................... 20,000 1,510,000
First Union Corporation........................... 20,000 1,165,000
Fleet Financial Group Inc......................... 15,000 1,252,500
Mellon Bank Corporation........................... 20,000 1,392,500
NationsBank Corporation........................... 18,000 1,377,000
Washington Mutual Inc............................. 30,000 1,303,125
Wells Fargo & Company............................. 3,000 1,107,000
------------
13,233,062
CAPITAL GOODS & SERVICES -- 2.19%
- ----------------------------------------------------------------------------
Cooper Industries Inc............................. 20,000 1,098,750
General Signal Corporation........................ 25,000 900,000
Harsco Corporation................................ 25,000 1,145,313
------------
3,144,063
CHEMICALS -- 2.18%
- ----------------------------------------------------------------------------
Du Pont (E. I.) De Nemours & Company.............. 28,000 2,089,500
Olin Corporation.................................. 25,000 1,042,188
------------
3,131,688
COMMUNICATIONS -- 0.77%
- ----------------------------------------------------------------------------
Frontier Corporation.............................. 35,000 1,102,500
COMPUTER HARDWARE -- 1.77%
- ----------------------------------------------------------------------------
Xerox Corporation................................. 25,000 2,540,625
CONSTRUCTION -- 0.73%
- ----------------------------------------------------------------------------
<CAPTION>
NUMBER
OF SHARES
OR
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
Caterpillar Inc................................... 20,000 $ 1,057,500
CONSUMER DURABLES -- 1.11%
- ----------------------------------------------------------------------------
Dana Corporation.................................. 30,000 1,605,000
CONSUMER NON-DURABLES -- 1.60%
- ----------------------------------------------------------------------------
Avon Products Inc................................. 25,000 1,937,500
Eastman Kodak Company............................. 5,000 365,313
------------
2,302,813
CONSUMER PRODUCTS -- 0.92%
- ----------------------------------------------------------------------------
Colgate Palmolive Company......................... 15,000 1,320,000
CRUDE & PETROLEUM -- 3.23%
- ----------------------------------------------------------------------------
British Petroleum (ADR)........................... 10,000 882,500
Exxon Corporation................................. 18,000 1,283,625
Mobil Corporation................................. 18,000 1,379,250
Royal Dutch Petroleum (ADR)....................... 20,000 1,096,250
------------
4,641,625
ELECTRICAL EQUIPMENT -- 5.81%
- ----------------------------------------------------------------------------
Dresser Industries Inc............................ 35,000 1,542,187
Emerson Electric Company.......................... 30,000 1,811,250
General Electric Company.......................... 55,000 5,005,000
------------
8,358,437
ELECTRONICS -- 0.96%
- ----------------------------------------------------------------------------
Amp Inc........................................... 40,000 1,375,000
ENERGY -- 8.96%
- ----------------------------------------------------------------------------
Amoco Corporation................................. 17,000 707,625
Atlantic Richfield Company........................ 10,000 781,250
Chevron Corporation............................... 14,000 1,162,875
Consolidated Natural Gas Company.................. 20,000 1,177,500
Duke Energy Company............................... 20,000 1,185,000
El Paso Natural Gas Company....................... 40,000 1,530,000
Enron Corporation................................. 30,000 1,621,875
Questar Corporation............................... 40,000 785,000
Texaco Inc........................................ 12,000 716,250
USX Marathon Group................................ 25,000 857,812
Williams Companies Inc............................ 70,000 2,362,500
------------
12,887,687
FINANCE -- 2.56%
- ----------------------------------------------------------------------------
Bank of New York Company Inc...................... 20,000 1,213,750
H F Ahmanson & Company............................ 20,000 $ 1,420,000
</TABLE>
16 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
EQUITY INCOME FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
Morgan J P & Company Inc.......................... 9,000 1,054,125
------------
3,687,875
FOOD & BEVERAGES & TOBACCO -- 1.22%
- ----------------------------------------------------------------------------
Fortune Brands Inc................................ 20,000 768,750
Philip Morris Companies Inc....................... 25,000 984,375
------------
1,753,125
HOTELS & RESTAURANTS -- 0.73%
- ----------------------------------------------------------------------------
Felcor Suite Hotels Inc........................... 15,000 470,625
Starwood Hotels & Resorts Trust................... 12,000 579,750
------------
1,050,375
INSURANCE -- 3.59%
- ----------------------------------------------------------------------------
Cigna Corporation................................. 27,000 1,863,000
Lincoln National Corporation...................... 20,000 1,827,500
St Paul Companies Inc............................. 35,000 1,472,187
------------
5,162,687
MACHINERY -- 1.34%
- ----------------------------------------------------------------------------
Pitney Bowes Inc.................................. 40,000 1,925,000
MISC. FINANCIAL SERVICES -- 1.06%
- ----------------------------------------------------------------------------
Federal National Mortgage Association............. 25,000 1,518,750
PAPER & FOREST PRODUCTS -- 1.26%
- ----------------------------------------------------------------------------
Georgia Pacific Corporation....................... 14,000 825,125
International Paper Company....................... 23,000 989,000
------------
1,814,125
PHARMACEUTICALS -- 7.60%
- ----------------------------------------------------------------------------
American Home Products Corporation................ 45,000 2,328,750
Baxter International Inc.......................... 25,000 1,345,313
Bristol Myers Squibb Company...................... 17,000 1,953,937
Lilly (Eli) & Company............................. 12,000 792,750
Merck & Company Inc............................... 7,000 936,250
Schering Plough Corporation....................... 8,000 733,000
Smithkline Beecham PLC (ADR)...................... 23,000 1,391,500
Warner-Lambert Company............................ 21,000 1,456,875
------------
10,938,375
PUBLISHING -- 1.25%
- ----------------------------------------------------------------------------
McGraw Hill Inc................................... 22,000 1,794,375
RAW MATERIALS -- 3.51%
- ----------------------------------------------------------------------------
<CAPTION>
NUMBER
OF SHARES
OR
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
Carpenter Technology Corporation.................. 15,000 $ 753,750
Minnesota Mining & Manufacturing Company.......... 12,000 986,250
Reynolds Metals Company........................... 10,000 559,375
Rohm & Haas Company............................... 8,000 831,500
Union Camp Corporation............................ 20,000 992,500
Weyerhaeuser Company.............................. 20,000 923,750
------------
5,047,125
REAL ESTATE -- 2.74%
- ----------------------------------------------------------------------------
Avalon Bay Communities Inc........................ 10,000 380,000
Crescent Real Estate Equities..................... 15,000 504,375
Developers Diversified Realty..................... 10,000 391,875
Equity Office Properties Trust.................... 25,000 709,375
Equity Residential Properties Trust............... 10,000 474,375
Health Care Property Investors Inc................ 15,000 540,937
Irvine Apartment Communities Inc.................. 15,000 434,063
Public Storage Inc................................ 18,000 504,000
------------
3,939,000
RETAIL -- 2.07%
- ----------------------------------------------------------------------------
J C Penney Inc.................................... 20,000 1,446,250
Sears Roebuck & Company........................... 25,000 1,526,563
------------
2,972,813
TECHNOLOGY -- 1.79%
- ----------------------------------------------------------------------------
Harris Corporation................................ 30,000 1,340,625
Thomas & Betts Corporation........................ 25,000 1,231,250
------------
2,571,875
TELECOMMUNICATIONS -- 7.23%
- ----------------------------------------------------------------------------
Ameritech Corporation............................. 30,000 1,346,250
AT & T Corporation................................ 22,000 1,256,750
Bell Atlantic Corporation......................... 28,000 1,277,500
BellSouth Corporation............................. 20,000 1,342,500
GTE Corporation................................... 25,000 1,390,625
SBC Communications Inc............................ 30,000 1,200,000
Sprint Corporation................................ 20,000 1,410,000
United States West Inc. New....................... 25,000 1,175,000
------------
10,398,625
UTILITIES -- 3.32%
- ----------------------------------------------------------------------------
American Electric Power Inc....................... 20,000 907,500
Carolina Power & Light Company.................... 20,000 867,500
CMS Energy Corporation............................ 20,000 880,000
Edison International.............................. 40,000 $ 1,182,500
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 17
<PAGE>
EQUITY INCOME FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
FPL Group Inc..................................... 15,000 945,000
------------
4,782,500
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $89,788,502)................................. 125,379,312
- ----------------------------------------------------------------------------
PREFERRED STOCK -- 0.21%
- ----------------------------------------------------------------------------
INSURANCE -- 0.21%
- ----------------------------------------------------------------------------
Aetna Inc......................................... 4,000 300,500
------------
TOTAL PREFERRED STOCK
(IDENTIFIED COST $305,490).................................... 300,500
- ----------------------------------------------------------------------------
COMMERCIAL PAPER -- 11.50%
- ----------------------------------------------------------------------------
Associates Corporation of North America, 5.52% due
07/07/98.......................................... $ 300,000 299,724
Avco Financial Services Inc. 5.55% due 07/24/98... 2,200,000 2,192,199
Barclays US Funding 5.54% due 07/24/98............ 1,000,000 996,464
Chevron Oil Finance Company 5.50% due 07/27/98.... 1,800,000 1,792,850
CIT Group Holdings Inc. 5.53% due 07/27/98........ 800,000 796,805
Enterprise Funding Corporation 5.52% due
08/19/98.......................................... 1,572,000 1,560,189
General Electric Capital Corporation, 5.51% due
07/14/98.......................................... 150,000 149,701
General Electric Capital Corporation, 5.53% due
08/27/98.......................................... 1,300,000 1,288,617
Lehman Brothers Holdings Inc. 5.54% due
07/16/98.......................................... 1,000,000 997,692
Merrill Lynch & Company Inc. 5.54% due 07/31/98... 500,000 497,692
Merrill Lynch & Company Inc. 5.55% due 07/30/98... 2,300,000 2,289,717
Sears Roebuck Acceptance Corporation, 5.56% due
08/13/98.......................................... 2,000,000 1,986,718
Ford Motor Credit Company 5.51% due 08/21/98...... 500,000 496,097
<CAPTION>
NUMBER
OF SHARES
OR
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
American Express Credit Corporation, 5.49% due
07/09/98.......................................... $ 700,000 $ 699,146
American Express Credit Corporation, 5.51% due
08/14/98.......................................... 500,000 496,633
------------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $16,540,244)................................. 16,540,244
- ----------------------------------------------------------------------------
SHORT TERM GOVERNMENT SECURITIES -- 0.59%
- ----------------------------------------------------------------------------
Federal Home Loan Mortgage Discount Notes, 5.40%
due 07/31/98...................................... 150,000 149,325
Federal Home Loan Mortgage Discount Notes, 5.42%
due 07/07/98...................................... 500,000 499,549
Federal National Mortgage Association Discount
Notes, 5.44% due 08/05/98......................... 200,000 198,942
------------
TOTAL SHORT TERM GOVERNMENT SECURITIES
(IDENTIFIED COST $847,816).................................... 847,816
- ----------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 0.24%
- ----------------------------------------------------------------------------
State Street Bank & Trust Repurchase Agreement,
2.00% due 07/01/98
Collateral: U.S. Treasury Bond $275,000, 8.125%
due 8/15/19 Value $361,235........................ 350,000 350,000
------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $350,000).................................... 350,000
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $107,832,052)................................ $143,417,872
OTHER ASSETS LESS LIABILITIES -- 0.28%........................ 404,945
------------
NET ASSETS -- 100%............................................ $143,822,817
- ----------------------------------------------------------------------------
</TABLE>
ADR American Depository Receipt.
See notes to financial statements.
18 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
THE ENTERPRISE CAPITAL APPRECIATION FUND
PROVIDENT INVESTMENT COUNSEL, INC.
Pasadena, California
INVESTMENT MANAGEMENT
Provident Investment Counsel has been fund manager to the Enterprise Capital
Appreciation Fund since inception. Provident Investment Counsel manages
approximately $18.6 billion for institutional clients, and its usual investment
minimum is $5 million.
INVESTMENT OBJECTIVE
The objective of the Enterprise Capital Appreciation Fund is to seek maximum
capital appreciation, primarily through investment in common stock of companies
that demonstrate accelerating earnings momentum and consistently strong
financial characteristics.
INVESTMENT PHILOSOPHY
Provident's investment philosophy is based on the belief that, over time, the
reason the price of a company's stock increases is because its earnings are
increasing. The investment strategy seeks to create a fund of companies that, in
aggregate, is growing its earnings at a faster and more consistent rate than is
the overall market.
FIRST HALF 1998 PERFORMANCE REVIEW
On a year-to-date basis, the Enterprise Capital Appreciation Fund generated
solid returns. This strong performance continued the trend from last year, which
was only briefly interrupted by the Asian economic crisis. Provident maintained
its focus on largely domestic-oriented growth stocks with superior fundamentals.
Provident invested mainly in companies that exhibited sustainable earnings and
revenue growth trends. These stocks were rewarded in the first half of 1998, as
the overall trend of corporate earnings growth slowed, and a premium was
accorded to those companies that exhibited superior fundamentals.
A significant portion of the fund's performance came from technology, retail
trade, and health technology sectors. In the technology area, the fund held Dell
Computer and Lucent Technologies, both of which appreciated more than 100
percent. Additionally, several of the new holdings, America Online and SAP
Aktiengesellschaft, experienced rapid appreciation since purchase. In health
technology, drug stocks like Pfizer and Schering Plough had significantly better
performance than the benchmarks, propelled by new drug introductions and strong
pipelines. Finally, the retail holdings like Staples, Kohls, and Dollar Tree
Stores benefited from strong consumer demand generated by a vibrant domestic
economy.
FUTURE INVESTMENT STRATEGY
Provident's strategy will continue to focus on growth stocks with superior
fundamentals. For the last several years, corporate earnings, and consequently
stock prices, have had healthy increases due to a low inflation environment and
what Provident calls "engineered earnings." Firms have improved their bottom
lines via corporate restructuring, mergers, layoffs, and technology employment.
However, in many cases they have seen little revenue or top-line growth. This
dichotomy presents an unsustainable earnings and stock price trend. Recently
there have been numerous mega-cap stocks beginning to report disappointing
earnings numbers because their already meager
THE ENTERPRISE GROUP OF FUNDS, INC. 19
<PAGE>
revenue growth has been damaged by the Asian situation, and their "earnings
engineering" is tapped out. Provident believes that the most rewarding
investments going forward will be those that can maintain superior revenue and
earnings growth in this increasingly selective equity market. Provident
structured the fund with stocks that exhibit strong and sustainable top and
bottom lines, which it believes will be factors rewarded by the market.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE FUND MANAGER ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE
MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER
CONDITIONS.
20 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
COMMON STOCKS -- 97.34% AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
ADVERTISING -- 0.83%
- ---------------------------------------------------------------------------------
Outdoor Systems Inc. (a).......................... 40,000 $ 1,120,000
BROADCASTING -- 3.24%
- ---------------------------------------------------------------------------------
Chancellor Media Corporation (a).................. 40,000 1,986,250
Clear Channel Communications (a).................. 22,000 2,400,750
-------------
4,387,000
BUSINESS SERVICES -- 3.22%
- ---------------------------------------------------------------------------------
Accustaff Inc. (a)................................ 50,000 1,562,500
Ceridian Corporation (a).......................... 24,000 1,410,000
Robert Half International Inc. (a)................ 25,000 1,396,875
-------------
4,369,375
COMPUTER HARDWARE -- 2.06%
- ---------------------------------------------------------------------------------
Dell Computer Corporation (a)..................... 30,000 2,784,375
COMPUTER SERVICES -- 9.82%
- ---------------------------------------------------------------------------------
America Online Inc. (a)........................... 33,000 3,498,000
Fiserv Inc. (a)................................... 60,000 2,548,125
HBO & Company..................................... 120,000 4,230,000
Keane Inc. (a).................................... 20,000 1,120,000
Sungard Data Systems Inc. (a)..................... 50,000 1,918,750
-------------
13,314,875
COMPUTER SOFTWARE -- 2.73%
- ---------------------------------------------------------------------------------
SAP Aktiengesellschaft (ADR)...................... 10,000 2,250,000
Sterling Commerce Inc. (a)........................ 30,000 1,455,000
-------------
3,705,000
CONGLOMERATES -- 2.00%
- ---------------------------------------------------------------------------------
Cendant Corporation (a)........................... 130,000 2,713,750
ENERGY -- 3.16%
- ---------------------------------------------------------------------------------
AES Corporation (a)............................... 60,000 3,153,750
R & B Falcon Corporation (a)...................... 50,000 1,131,250
-------------
4,285,000
FINANCE -- 10.92%
- ---------------------------------------------------------------------------------
Associates First Capital Corporation.............. 30,000 2,306,250
Heller Financial Inc. (a)......................... 40,000 1,200,000
MBNA Corporation.................................. 180,168 5,945,544
Providian Financial Corporation................... 15,000 1,178,437
State Street Corporation.......................... 60,000 4,170,000
-------------
14,800,231
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
HEALTH CARE -- 1.89%
- ---------------------------------------------------------------------------------
Omnicare Inc...................................... 40,000 $ 1,525,000
Total Renal Care Holdings Inc. (a)................ 30,000 1,035,000
-------------
2,560,000
MACHINERY -- 4.75%
- ---------------------------------------------------------------------------------
Tyco International Ltd. New....................... 80,000 5,040,000
United States Filter Corporation (a).............. 50,000 1,403,125
-------------
6,443,125
MEDICAL SERVICES -- 5.85%
- ---------------------------------------------------------------------------------
Health Management Associates Inc. (a)............. 44,095 1,474,426
Quintiles Transnational Corporation (a)........... 80,000 3,935,000
Sofamor/Danek Group Inc. (a)...................... 29,100 2,518,969
-------------
7,928,395
PHARMACEUTICALS -- 12.04%
- ---------------------------------------------------------------------------------
Alza Corporation (a).............................. 54,000 2,335,500
Elan PLC (ADR) (a)................................ 54,000 3,472,875
McKesson Corporation.............................. 40,000 3,250,000
Pfizer Inc........................................ 35,000 3,804,062
Schering Plough Corporation....................... 37,700 3,454,263
-------------
16,316,700
RETAIL -- 23.90%
- ---------------------------------------------------------------------------------
Bed Bath & Beyond Inc. (a)........................ 36,300 1,880,794
Costco Companies Inc. (a)......................... 65,000 4,099,062
CVS Corporation................................... 64,000 2,492,000
Dollar General Corporation........................ 87,500 3,461,719
Dollar Tree Stores Inc. (a)....................... 57,450 2,333,906
Family Dollar Stores Inc.......................... 140,000 2,590,000
General Nutrition Companies Inc. (a).............. 60,000 1,867,500
Kohls Corporation (a)............................. 76,000 3,942,500
Linens N Things Inc. (a).......................... 24,800 757,950
Office Depot Inc. (a)............................. 43,000 1,357,188
Proffitts Inc. (a)................................ 75,000 3,028,125
Safeway Inc. (a).................................. 70,000 2,848,125
Staples Inc. (a).................................. 60,025 1,736,973
-------------
32,395,842
TECHNOLOGY -- 2.76%
- ---------------------------------------------------------------------------------
Lucent Technologies Inc........................... 45,000 3,743,438
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 21
<PAGE>
CAPITAL APPRECIATION FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
TELECOMMUNICATIONS -- 7.25%
- ---------------------------------------------------------------------------------
Advanced Fibre Communications (a)................. 17,000 $ 681,063
Ericsson L M Tel Company (ADR).................... 80,000 2,290,000
Tellabs Inc. (a).................................. 28,000 2,005,500
Worldcom Inc. (a)................................. 100,000 4,843,750
-------------
9,820,313
WASTE MANAGEMENT -- 0.92%
- ---------------------------------------------------------------------------------
Allied Waste Industries Inc. (a).................. 52,000 1,248,000
TOTAL COMMON STOCKS
(IDENTIFIED COST $87,291,173).................................... 131,935,419
- ---------------------------------------------------------------------------------
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 2.42%
- ---------------------------------------------------------------------------------
State Street Bank & Trust Repurchase Agreement,
4.00% due 07/01/98
Collateral: U.S. Treasury Bond, $2,045,000, 11.25%
due 2/15/15 Value $3,347,571...................... $ 3,280,000 $ 3,280,000
-------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $3,280,000)..................................... 3,280,000
- ---------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $90,571,173).................................... $ 135,215,419
OTHER ASSETS LESS LIABILITIES -- 0.24 %.......................... 325,043
-------------
NET ASSETS -- 100%............................................... $ 135,540,462
- ---------------------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
ADR American Depository Receipt.
See notes to financial statements.
22 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
THE ENTERPRISE SMALL COMPANY GROWTH FUND
PILGRIM BAXTER & ASSOCIATES, LTD.
Wayne, Pennsylvania
INVESTMENT MANAGEMENT
Pilgrim Baxter & Associates, Ltd., which has approximately $12.6 billion in
assets under management, became manager of the fund on April 1, 1997. Pilgrim
Baxter's normal investment minimum for a separate account is $20 million.
INVESTMENT OBJECTIVE
The objective of the Enterprise Small Company Growth Fund is to seek capital
appreciation by investing primarily in common stocks of small-capitalization
companies believed by the fund manager to have an outlook for strong earnings
growth and potential for significant capital appreciation.
INVESTMENT PHILOSOPHY
Pilgrim Baxter is a growth-stock investor, and believes the mission of any fund
of equity investments is to capture the growth exhibited by the underlying
assets in investment returns over time. Given that premise, superior returns may
be achieved by investing in those companies that exhibit exceptional growth
characteristics and internal reinvestment rates capable of funding that growth
into the future. Pilgrim Baxter focuses on bottom-up stock selection using a
combination of rigorous fundamental research and quantitative techniques.
FIRST HALF 1998 PERFORMANCE REVIEW
The first half of 1998 was a difficult period for the Enterprise Small Company
Growth Fund, despite an early rally by small-cap stocks. Solid earnings reports
and continued strong fundamentals, particularly in the technology and service
sectors, carried the fund higher early in the period.
Other areas of strength in the fund included financial services stocks, although
the frenzy of large bank and brokerage combinations did not benefit the fund
because there were no holdings in those large-cap stocks. The positive fallout
from such deals on the sector, however, and the effects of a still positive
interest rate environment helped contribute to performance early in the period.
The only negative area was the energy sector, where record-low commodity prices
due to the abnormally warm winter season caused the sector to be exceptionally
weak.
During the first half of 1998, small-cap stocks were especially hurt as the
Asian crisis re-emerged and fears of inflation and higher interest rates
continue to influence the financial markets. Investor preferences for large
liquid investments also cast a pall on small-cap stocks.
In anticipation of the ill effects of the Asian crisis, Pilgrim Baxter changed
the structure of the fund somewhat as the period progressed. The impact of Asia
on technology led to the sale of a number of stocks with significant exposure to
that region. As such, funds were reinvested in companies more focused on
domestic activities, especially in the service sector. While Pilgrim Baxter does
not make specific sector decisions, it was the fundamentals of several companies
in various sub-groups of the service sector that led to an increased weighting
in this area.
THE ENTERPRISE GROUP OF FUNDS, INC. 23
<PAGE>
FUTURE INVESTMENT STRATEGY
While the year has been difficult so far, Pilgrim Baxter expects the compelling
small-cap valuation to be a primary driver in the near term. By several
measures, small-cap stocks are at relative lows rarely seen in the past 40
years. In addition, growth estimates for the S&P 500 are declining as economic
growth is expected to moderate while small-cap growth expectations continue to
be strong.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE FUND MANAGER ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE
MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER
CONDITIONS.
24 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
SMALL COMPANY GROWTH FUND
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
COMMON STOCKS -- 97.81% AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
ADVERTISING -- 1.30%
- ------------------------------------------------------------------------------
Lamar Advertising Company (a)..................... 9,900 $ 355,163
AEROSPACE -- 0.85%
- ------------------------------------------------------------------------------
Tristar Aerospace Company (a)..................... 14,900 230,950
APPAREL & TEXTILES -- 0.94%
- ------------------------------------------------------------------------------
Stage Stores Inc. (a)............................. 5,700 257,925
BROADCASTING -- 0.96%
- ------------------------------------------------------------------------------
Emmis Broadcasting Corporation Class A (a)........ 5,500 262,969
BUSINESS SERVICES -- 7.84%
- ------------------------------------------------------------------------------
Central Parking Corporation....................... 6,950 323,175
Envoy Corporation (a)............................. 5,000 236,875
Kroll-O'Gara Company (a).......................... 9,200 196,650
Metamor Worldwide Inc. (a)........................ 16,987 597,730
PMT Services Inc. (a)............................. 13,700 348,494
Pre-Paid Legal Services Inc. (a).................. 14,000 441,875
-----------
2,144,799
COMMUNICATIONS -- 2.03%
- ------------------------------------------------------------------------------
Pacific Gateway Exchange Inc. (a)................. 9,600 384,600
Tel-Save Holdings Inc. (a)........................ 11,600 171,100
-----------
555,700
COMPUTER HARDWARE -- 1.32%
- ------------------------------------------------------------------------------
Apex PC Solutions Inc. (a)........................ 8,500 236,937
Xylan Corporation (a)............................. 4,200 125,213
-----------
362,150
COMPUTER SERVICES -- 11.39%
- ------------------------------------------------------------------------------
Computer Horizons Corporation (a)................. 16,998 629,988
Computer Management Sciences Inc. (a)............. 13,700 325,375
Computer Task Group Inc........................... 24,400 817,400
Diamond Technology Partner Inc. (a)............... 10,300 311,575
Pegasystems Inc. (a).............................. 14,700 398,737
Technology Solutions Company (a).................. 19,950 632,166
-----------
3,115,241
COMPUTER SOFTWARE -- 8.92%
- ------------------------------------------------------------------------------
BEA Systems Inc. (a).............................. 11,400 261,487
Dendrite International Inc. (a)................... 9,700 364,962
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
JDA Software Group Inc. (a)....................... 7,100 $ 310,625
Radiant Systems Inc. (a).......................... 13,100 189,950
Summit Design Inc. (a)............................ 17,000 249,688
Veritas Software Corporation (a).................. 8,850 366,169
Visio Corporation (a)............................. 8,900 424,975
Wind River Systems Inc. (a)....................... 7,600 272,650
-----------
2,440,506
CONSUMER DURABLES -- 1.50%
- ------------------------------------------------------------------------------
United Natural Foods Inc. (a)..................... 14,400 410,400
CONSUMER SERVICES -- 3.46%
- ------------------------------------------------------------------------------
Rental Service Corporation (a).................... 13,400 450,575
Transaction Systems Architects Inc. Class A (a)... 12,900 496,650
-----------
947,225
ELECTRICAL EQUIPMENT -- 0.20%
- ------------------------------------------------------------------------------
ATMI Inc. (a)..................................... 3,700 55,500
ENERGY -- 0.94%
- ------------------------------------------------------------------------------
Gulf Island Fabrication Inc. (a).................. 7,500 140,625
Gulfmark Offshore Inc. (a)........................ 5,100 116,025
-----------
256,650
FINANCE -- 1.66%
- ------------------------------------------------------------------------------
Healthcare Financial Partners Inc. (a)............ 7,400 453,713
HEALTH CARE -- 6.37%
- ------------------------------------------------------------------------------
Alternative Living Services Inc. (a).............. 13,300 359,100
Concentra Managed Care Inc. (a)................... 14,400 374,400
DAOU Systems Inc. (a)............................. 6,200 141,825
Kendle International Inc. (a)..................... 7,500 226,875
Pediatrix Medical Group (a)....................... 11,900 442,531
Trex Med Corporation (a).......................... 12,000 198,000
-----------
1,742,731
HOTELS & RESTAURANTS -- 4.43%
- ------------------------------------------------------------------------------
American Skiing Company (a)....................... 18,900 245,700
CKE Restaurants Inc............................... 4,300 177,375
Prime Hospitality Corporation (a)................. 16,800 292,950
Vistana Inc. (a).................................. 27,000 496,125
-----------
1,212,150
MANUFACTURING -- 2.34%
- ------------------------------------------------------------------------------
ITEQ Inc. (a)..................................... 13,900 103,381
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 25
<PAGE>
SMALL COMPANY GROWTH FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
Vitesse Semiconductor Corporation (a)............. 17,400 $ 537,225
-----------
640,606
MEDICAL INSTRUMENTS -- 0.49%
- ------------------------------------------------------------------------------
Cyberonics Inc. (a)............................... 12,700 134,938
MEDICAL SERVICES -- 5.05%
- ------------------------------------------------------------------------------
National Surgery Centers Inc. (a)................. 21,025 611,039
Quadramed Corporation (a)......................... 10,600 289,513
Renal Care Group Inc. (a)......................... 10,900 480,281
-----------
1,380,833
MISC. FINANCIAL SERVICES -- 3.84%
- ------------------------------------------------------------------------------
Amresco Inc. (a).................................. 20,900 608,712
Sirrom Capital Corporation........................ 17,000 442,000
-----------
1,050,712
OIL SERVICES -- 0.35%
- ------------------------------------------------------------------------------
Cliffs Drilling Company (a)....................... 2,900 95,156
PHARMACEUTICALS -- 5.84%
- ------------------------------------------------------------------------------
Incyte Pharmaceuticals Inc. (a)................... 9,300 317,362
Jones Pharma Inc.................................. 11,200 371,000
Medicis Pharmaceutical Corporation Class A (a).... 15,550 567,575
Pharmerica Inc. (a)............................... 28,300 341,369
-----------
1,597,306
PRINTING & PUBLISHING -- 2.36%
- ------------------------------------------------------------------------------
Applied Graphics Technologies (a)................. 14,100 645,075
REAL ESTATE -- 0.54%
- ------------------------------------------------------------------------------
CB Richard Ellis Services Inc. (a)................ 4,400 147,125
RETAIL -- 2.99%
- ------------------------------------------------------------------------------
Guitar Center Inc. (a)............................ 11,300 340,413
Insight Enterprises Inc. (a)...................... 11,950 478,000
-----------
818,413
TECHNOLOGY -- 8.88%
- ------------------------------------------------------------------------------
DSP Communications Inc. (a)....................... 14,000 192,500
Helix Technology Corporation...................... 10,300 154,500
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
Network Appliance Inc. (a)........................ 14,000 $ 545,125
Sawtek Inc. (a)................................... 5,900 87,025
Semtech Corporation (a)........................... 12,400 219,325
Uniphase Corporation (a).......................... 7,600 477,137
Waters Corporation (a)............................ 12,800 754,400
-----------
2,430,012
TELECOMMUNICATIONS -- 2.52%
- ------------------------------------------------------------------------------
Excel Switching Corporation (a)................... 7,900 196,513
Inter-Tel Inc..................................... 1,200 19,200
Tekelec (a)....................................... 10,600 474,350
-----------
690,063
TRANSPORTATION -- 1.33%
- ------------------------------------------------------------------------------
Coach USA Inc. (a)................................ 8,000 365,000
WASTE MANAGEMENT -- 7.17%
- ------------------------------------------------------------------------------
American Disposal Services Inc. (a)............... 15,900 745,312
Eastern Environmental Services Inc. (a)........... 22,500 765,000
Tetra Tech Inc. (a)............................... 18,575 450,444
-----------
1,960,756
TOTAL COMMON STOCKS
(IDENTIFIED COST $23,711,260)................................... 26,759,767
- ------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 3.47%
- ------------------------------------------------------------------------------
State Street Bank & Trust Repurchase Agreement,
2.00% due 07/01/98
Collateral: U.S Treasury Bond $640,000, 12.00% due
08/15/13 Value $974,541........................... $950,000 950,000
-----------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $950,000)...................................... 950,000
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $24,661,260)................................... $27,709,767
OTHER ASSETS LESS LIABILITIES -- (1.28)%........................ (351,025)
-----------
NET ASSETS -- 100%.............................................. $27,358,742
- ------------------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
See notes to financial statements.
26 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
THE ENTERPRISE SMALL COMPANY VALUE FUND
GABELLI ASSET MANAGEMENT COMPANY
Rye, New York
INVESTMENT MANAGEMENT
Gabelli Asset Management Company (formerly GAMCO Investors, Inc.), which manages
more than $7.3 billion for institutional clients and whose normal investment
minimum is $500,000, became manager of the fund on July 1, 1996.
INVESTMENT OBJECTIVE
The objective of the Enterprise Small Company Value Fund is to seek maximum
capital appreciation, primarily through investment in the equity securities of
companies that have a market capitalization of no more than $1 billion.
INVESTMENT PHILOSOPHY
Gabelli Asset Management Company's focus is on free cash flow, which it believes
to be the best barometer of a business' value. Rising free cash flow often
foreshadows net earnings improvement. Gabelli also looks at long-term earnings
trends, and analyzes on and off balance sheet assets and liabilities. Gabelli
wants to know everything and anything that will add or detract from its private
market value estimates. Finally Gabelli looks for a catalyst -- something
happening in the company's industry or indigenous to the company itself that
will reveal value.
FIRST HALF 1998 PERFORMANCE REVIEW
Early in the period, Whitman spun-off Hussman, its commercial refrigeration
business, and Midas Muffler to shareholders. The three pieces are now trading
well above Whitman's price prior to the spin-offs. The fund owns many more
companies whose parts are, in Gabelli's view, worth considerably more than the
current market value as a whole. Gabelli believes corporate management may
continue to feel some pressure from investors to restructure their companies in
ways that make strategic and financial sense.
In addition, there are several industry groups that, despite strong performance
over the last year or so, still look quite reasonable. The broadcasting,
publishing, cable television, cable network, and cellular telephone industries
have largely favorable prospects and, because these are primarily domestic
businesses, they are not vulnerable to potential weaknesses in Asia and Latin
American economies. Early in the year, several of the best performers in the
fund were in these industries. Price Communications enjoyed a strong surge as
its board approved a 500,000 share buyback, the company declared a five-for-four
stock split, and Wall Street analysts began to recommend the company. Paxson
Communications, United Video Satellite, Comsat, Cablevision, Century
Communications, and Associated Group rose substantially during the first six
months of the year.
The fund's media and telecommunications holdings posted strong returns during
the period. These industry groups are all benefiting from very powerful and, in
Gabelli's opinion, sustainable trends. The announcement on June 24 that AT&T
would acquire Telecommunications Inc., the nation's largest cable operator, was
an historic catalyst that
THE ENTERPRISE GROUP OF FUNDS, INC. 27
<PAGE>
helped focus investor attention on the fund's cable holding. Major beneficiaries
were Rogers Communications and Cablevision Systems. Other communications stocks,
such as Price Communications, Century Communications, and Centennial Cellular,
rose sharply.
Industrial stocks did not fare as well in the first half of 1998, partly due to
Asian economic turmoil. Borg Warner Automotive declined, and Flowserve, Coltec
Industries, and Navistar International also had weak performance. Gabelli
believes these companies still have strong franchises and very attractive
long-term business prospects.
FUTURE INVESTMENT STRATEGY
While investors worry about a substantial correction or even bear market for the
Dow and S&P 500, small-cap stocks are already experiencing one. Although
year-to-date the Russell 2000 is up 4.91 percent, approximately 60 percent of
all NASDAQ-listed stocks are off 20 percent or more from their 52-week highs.
While the fund saw some negatives due to Asian woes, small companies operating
primarily in the domestic market seem far less vulnerable to Asian economic
problems than the large multinationals. This has not prevented investors from
abandoning small-cap stocks to chase large-cap stock returns. Gabelli is a
patient investor that counts on the market's mood swings to allow it to buy
quality companies at discount prices. The gap in valuation between large and
small stocks allows Gabelli to take advantage of that discrepancy.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE FUND MANAGER ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE
MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER
CONDITIONS.
28 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
SMALL COMPANY VALUE FUND
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
COMMON STOCKS -- 86.51% AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
ADVERTISING -- 1.54%
- ------------------------------------------------------------------------------
The Ackerley Group Inc........................... 100,000 $ 2,100,000
AEROSPACE -- 6.72%
- ------------------------------------------------------------------------------
AAR Corporation.................................. 15,000 443,438
Aeroquip Vickers Inc............................. 27,000 1,576,125
Ametek, Inc...................................... 18,000 527,625
Coltec Industries Inc. (a)....................... 20,000 397,500
Curtiss Wright Corporation....................... 23,000 901,312
Gencorp Inc...................................... 30,000 757,500
Moog Inc. (Class A) (a).......................... 6,000 229,125
Sequa Corporation (Class A) (a).................. 17,000 1,134,750
Sequa Corporation (Class B) (a).................. 8,000 628,000
SPS Technologies Inc. (a)........................ 44,000 2,574,000
------------
9,169,375
APPAREL & TEXTILES -- 0.09%
- ------------------------------------------------------------------------------
Carlyle Inds Inc. (a)............................ 100,000 125,000
AUTOMOTIVE -- 5.56%
- ------------------------------------------------------------------------------
Borg Warner Automotive Inc....................... 5,500 264,344
Clarcor Inc...................................... 49,500 1,039,500
Lund International
Holdings Inc. (a)................................ 20,000 227,500
Modine Manufacturing Company..................... 45,000 1,558,125
Navistar International
Corporation Inc. (a)............................. 10,000 288,750
Scheib Earl Inc. (a)............................. 85,000 648,125
Smith A. O. Corporation.......................... 7,000 361,813
Standard Motor Products Inc...................... 60,000 1,335,000
Superior Industries
International Inc................................ 20,000 563,750
Tyler Corporation (a)............................ 20,000 206,250
Wynns International Inc.......................... 57,026 1,097,750
------------
7,590,907
BROADCASTING -- 9.56%
- ------------------------------------------------------------------------------
BET Holdings Inc. (Class A) (a).................. 41,000 2,580,437
Chris-Craft Industries Inc. (a).................. 20,950 1,145,703
Gray Communications Systems Inc.................. 17,500 566,563
Gray Communications Systems Inc. (Class B)....... 22,000 679,250
GST Telecommunications Inc. (a).................. 75,000 1,082,813
Paxar Corporation (a)............................ 75,000 862,500
Paxson Communications Corporation (a)............ 100,000 1,212,500
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
Rogers Communications Inc. (Class B) (a)......... 140,000 $ 1,260,000
United Television Inc............................ 10,000 1,145,000
USA Networks Inc. (a)............................ 100,000 2,512,500
------------
13,047,266
BUILDING & CONSTRUCTION -- 0.26%
- ------------------------------------------------------------------------------
Core Materials Corporation....................... 75,000 356,250
BUSINESS SERVICES -- 0.65%
- ------------------------------------------------------------------------------
Donnelley Enterprise Solution.................... 22,800 478,800
Nashua Corporation (a)........................... 26,500 414,063
------------
892,863
CABLE -- 5.35%
- ------------------------------------------------------------------------------
Cablevision Systems Corporation (Class A) (a).... 68,000 5,678,000
Century Communications Corporation (Class A)
(a).............................................. 30,000 562,500
Mercom Inc. (a).................................. 39,000 429,000
TCI Satellite Entertainment Inc. (Class A) (a)... 43,000 252,625
United Video Satellite Group (Class A) (a)....... 9,500 376,437
------------
7,298,562
CAPITAL GOODS & SERVICES -- 0.75%
- ------------------------------------------------------------------------------
Hussmann International Inc....................... 55,000 1,020,938
CHEMICALS -- 2.11%
- ------------------------------------------------------------------------------
Church & Dwight Company Inc...................... 14,000 453,250
Lawter International Inc......................... 100,000 1,087,500
Sybron Chemicals Inc. (a)........................ 42,000 1,344,000
------------
2,884,750
COMMUNICATIONS -- 0.50%
- ------------------------------------------------------------------------------
Aliant Communications Inc........................ 25,000 685,938
COMPUTER HARDWARE -- 0.08%
- ------------------------------------------------------------------------------
Cerion Technologies Inc. (a)..................... 100,000 103,125
CONSUMER DURABLES -- 0.11%
- ------------------------------------------------------------------------------
Noel Group (a)................................... 15,000 37,500
Oneida Ltd....................................... 3,500 107,188
------------
144,688
CONSUMER PRODUCTS -- 0.64%
- ------------------------------------------------------------------------------
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 29
<PAGE>
SMALL COMPANY VALUE FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
American Safety Razor Company (a)................ 25,000 $ 365,625
ARC International Corporation (a)................ 26,000 107,250
Milestone Scientific............................. 12,000 65,250
Weider Nutrition International Inc............... 20,000 340,000
------------
878,125
CONSUMER SERVICES -- 1.35%
- ------------------------------------------------------------------------------
Berlitz International Inc. (a)................... 16,000 432,000
ITT Educational Services Inc. (a)................ 30,000 967,500
Mikasa Inc....................................... 28,000 357,000
N2K Inc. (a)..................................... 4,000 78,500
------------
1,835,000
ELECTRICAL EQUIPMENT -- 1.36%
- ------------------------------------------------------------------------------
Ampco Pittsburgh Corporation..................... 50,000 768,750
Oak Technology Inc. (a).......................... 25,000 114,063
Thomas Industries Inc............................ 40,000 977,500
------------
1,860,313
ELECTRONICS -- 0.26%
- ------------------------------------------------------------------------------
CTS Corporation.................................. 12,000 354,000
ENTERTAINMENT & LEISURE -- 5.11%
- ------------------------------------------------------------------------------
Ascent Entertainment Group Inc. (a).............. 45,000 500,625
Bull Run Corporation (a)......................... 100,000 487,500
Florida Panthers Holdings Inc. (a)............... 30,000 590,625
Gaylord Entertainment Company.................... 60,000 1,935,000
GC Companies Inc. (a)............................ 55,000 2,853,125
Jackpot Enterprises Inc. (a)..................... 40,000 502,500
Spelling Entertainment Group Inc................. 10,500 98,437
------------
6,967,812
FINANCE -- 0.86%
- ------------------------------------------------------------------------------
Advest Group Inc................................. 4,000 115,500
Pioneer Group Inc................................ 40,000 1,052,500
------------
1,168,000
FOOD & BEVERAGES & TOBACCO -- 7.39%
- ------------------------------------------------------------------------------
Brunos Inc. (a).................................. 35,000 36,641
Celestial Seasonings Inc. (a).................... 34,000 1,683,000
Chock Full o' Nuts Corporation (a)............... 35,000 238,437
Eskimo Pie Corporation........................... 38,000 479,750
General Cigar Holdings Inc. (Class A) (a)........ 100,000 $ 987,500
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
General Cigar Holdings Inc. (Class B) (a)........ 8,000 79,000
Giant Foods Inc. (Class A)....................... 70,000 3,014,375
Ingles Markets Inc. (Class A).................... 50,000 725,000
Pepsi Cola Puerto Rico Bottling Company (a)...... 90,000 675,000
Ralcorp Holdings Inc. (a)........................ 21,000 396,375
Vermont Pure Holdings Ltd........................ 5,000 21,875
Vlasic Foods International Inc................... 7,000 140,875
Whitman Corporation.............................. 70,000 1,605,625
------------
10,083,453
GAMING -- 0.12%
- ------------------------------------------------------------------------------
Grand Casinos Inc. (a)........................... 10,000 167,500
HEALTH CARE -- 0.03%
- ------------------------------------------------------------------------------
4Health Inc. (a)................................. 6,000 42,375
HOTELS & RESTAURANTS -- 1.23%
- ------------------------------------------------------------------------------
Aztar Corporation (a)............................ 125,000 851,563
Extended Stay America Inc. (a)................... 25,000 281,250
Trump Hotels & Casino
Resorts Inc. (a)................................. 78,000 550,875
------------
1,683,688
INSURANCE -- 2.50%
- ------------------------------------------------------------------------------
Argonaut Group Inc............................... 41,000 1,296,625
Liberty Corporation.............................. 42,000 2,113,125
------------
3,409,750
MACHINERY -- 6.07%
- ------------------------------------------------------------------------------
Baldwin Technology Company Inc. (Class A) (a).... 100,000 587,500
Banner Aerospace Inc. (a)........................ 50,000 643,750
Commercial Intertech Corporation................. 15,000 271,875
Daniel Industries Inc............................ 28,000 532,000
Fairchild Corporation (Class A) (a).............. 50,000 1,009,375
Flowserve Corporation............................ 60,000 1,477,500
Hach Company..................................... 10,000 124,063
Hach Company (Class A)........................... 14,000 152,250
Idex Corporation................................. 30,000 1,035,000
Katy Industries Inc.............................. 45,000 821,250
Kollmorgen Corporation........................... 35,000 702,187
Nortek Inc. (a).................................. 20,000 615,000
Standex International Corporation................ 6,000 177,750
Tennant Company.................................. 3,000 $ 132,750
------------
8,282,250
</TABLE>
30 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
SMALL COMPANY VALUE FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
MANUFACTURING -- 2.97%
- ------------------------------------------------------------------------------
Barnes Group Inc................................. 25,000 676,562
Bway Corporation (a)............................. 3,000 64,500
Fedders Corporation (Class A).................... 65,000 414,375
Graco Inc........................................ 20,000 697,500
Industrial Distribution Group Inc. (a)........... 25,000 387,500
Oil Dri Corporation of America................... 25,000 360,938
Park Ohio Holdings
Corporation (a).................................. 51,000 943,500
Rawlings Sporting Goods Company, Inc. (a)........ 10,000 133,750
Strattec Security Corporation (a)................ 12,500 376,562
------------
4,055,187
METALS & MINING -- 0.11%
- ------------------------------------------------------------------------------
TVX Gold Inc. (a)................................ 50,000 153,125
MISC. FINANCIAL SERVICES -- 0.79%
- ------------------------------------------------------------------------------
Data Broadcasting Corporation (a)................ 80,000 510,000
Midland Company.................................. 25,000 571,875
------------
1,081,875
PAPER PRODUCTS -- 0.41%
- ------------------------------------------------------------------------------
Greif Brothers Corporation (Class A)............. 15,000 560,625
PHARMACEUTICALS -- 2.92%
- ------------------------------------------------------------------------------
Agribrands International Inc. (a)................ 5,500 166,375
Carter Wallace Inc............................... 105,000 1,896,562
Ivax Corporation (a)............................. 120,000 1,110,000
Natures Sunshine Products Inc.................... 4,000 90,250
Twinlab Corporation (a).......................... 16,500 720,844
------------
3,984,031
PRINTING & PUBLISHING -- 4.02%
- ------------------------------------------------------------------------------
Belo A. H. Corporation (Class A)................. 24,000 585,000
Lee Enterprises Inc.............................. 42,000 1,286,250
Media General Inc. (Class A)..................... 40,000 1,950,000
Meredith Corporation............................. 5,000 234,687
Nelson Thomas Inc................................ 47,000 628,625
Price Communications Corporation (a)............. 23,438 358,887
Pulitzer Publishing Company...................... 5,000 $ 446,250
------------
5,489,699
PUBLISHING -- 1.10%
- ------------------------------------------------------------------------------
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
McClatchy Company (Class A)...................... 38,000 1,315,750
Topps Company Inc. (a)........................... 60,000 185,625
------------
1,501,375
REAL ESTATE -- 1.81%
- ------------------------------------------------------------------------------
Catellus Development Corporation (a)............. 105,000 1,857,188
Griffin Land & Nurseries Inc. (a)................ 35,000 612,500
------------
2,469,688
RETAIL -- 2.62%
- ------------------------------------------------------------------------------
Coldwater Creek Inc. (a)......................... 30,000 825,000
Lillian Vernon Corporation....................... 60,000 997,500
Neiman Marcus Group Inc. (a)..................... 33,000 1,433,437
Ragan Brad Inc. (a).............................. 7,900 302,175
Valuevision International Inc.................... 5,000 20,000
------------
3,578,112
SECURITY & INVESTIGATION SERVICES -- 2.24%
- ------------------------------------------------------------------------------
Borg Warner Security Corporation (a)............. 10,000 226,250
Pittway Corporation (Class A).................... 9,000 664,875
Rollins Inc...................................... 100,000 2,050,000
Wackenhut Corporation (Class A).................. 5,000 113,125
------------
3,054,250
TELECOMMUNICATIONS -- 4.00%
- ------------------------------------------------------------------------------
Aerial Communications Inc. (a)................... 55,000 343,750
Associated Group Inc. (Class A) (a).............. 13,500 553,500
Atlantic Tele-Network Inc. (a)................... 12,000 147,000
Centennial Cellular Corporation (Class A) (a).... 20,000 746,250
Communications Systems Inc....................... 22,000 352,000
Comsat Corporation............................... 45,000 1,274,062
Emerging Communications Inc. (a)................. 28,000 239,750
Rogers Cantel Mobile Communications Inc. (Class
B) (a)........................................... 40,000 500,000
Telephone & Data Systems Inc..................... 33,000 1,299,375
------------
5,455,687
TRANSPORTATION -- 2.20%
- ------------------------------------------------------------------------------
GATX Corporation................................. 44,000 $ 1,930,500
Hudson General Corporation....................... 16,000 810,000
Transpro Inc..................................... 35,000 260,312
------------
3,000,812
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 31
<PAGE>
SMALL COMPANY VALUE FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
UTILITIES -- 0.76%
- ------------------------------------------------------------------------------
Citizens Utilities Company (Class B) (a)......... 80,675 776,497
Eastern Enterprises.............................. 6,000 257,250
------------
1,033,747
WASTE MANAGEMENT -- 0.27%
- ------------------------------------------------------------------------------
Envirosource Inc. (a)............................ 20,714 362,486
WIRELESS COMMUNICATIONS -- 0.09%
- ------------------------------------------------------------------------------
Teligent Inc. (Class A) (a)...................... 4,000 117,750
TOTAL COMMON STOCKS
(IDENTIFIED COST $101,374,476)................................. 118,050,377
- ------------------------------------------------------------------------------
U.S. TREASURY BILLS -- 13.46%
- ------------------------------------------------------------------------------
U.S. Treasury Bill
4.68% due 07/23/98............................... $2,524,000 2,516,781
U.S. Treasury Bill
4.80% due 08/20/98............................... 1,266,000 1,257,560
U.S. Treasury Bill
4.87% due 08/20/98............................... 9,081,000 9,019,577
U.S. Treasury Bill
4.89% due 08/06/98............................... 2,013,000 2,003,157
U.S. Treasury Bill
4.90% due 08/06/98............................... $ 100,000 $ 99,510
U.S. Treasury Bill
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
4.90% due 08/20/98............................... 1,010,000 1,003,126
U.S. Treasury Bill
4.92% due 08/27/98............................... 1,014,000 1,006,101
U.S. Treasury Bill
4.93% due 09/17/98............................... 1,473,000 1,457,266
------------
TOTAL U.S. TREASURY BILLS
(IDENTIFIED COST $18,363,078).................................. 18,363,078
- ------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 1.88%
- ------------------------------------------------------------------------------
State Street Bank & Trust Repurchase Agreement,
4.00% due 07/01/98
Collateral: U.S. Treasury Bond $1,635,000 12.50%
due 08/15/14, Value $2,613,789 2,560,000 2,560,000
------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $2,560,000)................................... 2,560,000
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $122,297,555)................................. $138,973,455
OTHER ASSETS LESS LIABILITIES -- (1.85)%....................... (2,520,264)
------------
NET ASSETS -- 100%............................................. $136,453,191
- ------------------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
See notes to financial statements.
32 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
THE ENTERPRISE INTERNATIONAL GROWTH FUND
BRINSON PARTNERS, INC.
Chicago, Illinois
INVESTMENT MANAGEMENT
Brinson Partners, Inc., is a global investment management firm with offices in
Chicago, London and Tokyo, and became manager of the Enterprise International
Growth Fund on October 1, 1994. Brinson Partners manages approximately $156
billion for institutional clients, and its normal investment minimum is $25
million.
INVESTMENT OBJECTIVE
The objective of the Enterprise International Growth Fund is to seek capital
appreciation, primarily through a diversified fund of non-U.S. equity
securities.
INVESTMENT PHILOSOPHY
Brinson Partners believes that discrepancies exist between prices and
fundamental values, both across and within the international equity markets. It
takes advantage of these discrepancies by using a disciplined approach to
measure fundamental value from the perspective of the long-term investor. This
international equity strategy reflects the manager's decisions about the
relative attractiveness of the asset class, the individual equity markets,
currencies, the industries across and within those markets, other common risk
factors within those markets, and individual international companies.
FIRST HALF 1998 PERFORMANCE REVIEW
During the first six months of 1998, market allocation detracted from fund
value, given the strategic cash in the fund, as well as an overweight of New
Zealand and Singapore, and an underweight of Spain.
Domestic economies in Asia remained weighed down by the burden of currency,
property, and banking crises. In addition to ongoing concerns about Japan's
weakened economy and the continuing weakness of the yen, there were fresh fears
regarding the economic health of other Asian economies. Although European
markets initially reacted poorly to this flow of unwelcome news, most core
European markets rebounded strongly on a round of merger announcements in a
variety of sectors, including the financials, apparel, food, retail, paper, auto
parts, and media. Further positive announcements about corporate earnings, as
well as the advent of the European Monetary Union and an improving economic
scenario, boosted many European markets.
Within Europe, Brinson added to select cyclical and consumer stocks, on the back
of a European recovery that has already produced signs of a healthy pickup in
both consumption and industrial production. And while cognizant of the dampening
impact of the Asian slowdown on demand, Brinson believes that many shares
already discount much of the bad news regarding negative expectations for Asia.
FUTURE INVESTMENT STRATEGY
The most important underweight in the fund still consists of a five percent
underweight in Japan. Brinson continues to see evidence that this market has
poor relative value. The return on equity for the overall Japanese market is
only 4.2 percent, inadequate compensation for the risk investors are asked to
bear. Changes are urgently needed in the
THE ENTERPRISE GROUP OF FUNDS, INC. 33
<PAGE>
regulatory environment within the Japanese economy. Although stronger reform
measures are desirable in the long term for Japan, in the short to medium term,
such reform may lead to negative consequences, namely higher unemployment and
lower asset prices. Among the other non-U.S. markets, Brinson emphasizes
Australia, New Zealand, the U.K. and, within Europe, Belgium and Finland.
Brinson is neutrally positioned in Germany, France and the Netherlands, with no
investments in Austria, Portugal or Spain. The Asia ex-Japan region is
underweighted.
Currency strategies within the fund remain unchanged. The Japanese yen
represents a four percent underweight. The Hong Kong dollar and the British
pound sterling are underweighted while the core European currencies (the German
deutschmark, French franc, Dutch guilder, Spanish peseta, Danish krone, Swedish
krona and Swiss franc) remain at a neutral weight.
As with all international growth funds, the Enterprise International Growth Fund
carries additional risks associated with possibly less stable foreign securities
and currencies, lack of uniform accounting standards and political instability.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE FUND MANAGER ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE
MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER
CONDITIONS.
34 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
INTERNATIONAL GROWTH FUND
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
COMMON STOCKS & WARRANTS -- 91.39% AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
AUSTRALIA -- 4.44%
- ---------------------------------------------------------------------------------
Amcor Ltd......................................... 16,200 $ 71,097
Boral Ltd......................................... 47,800 89,906
Brambles Industries Ltd........................... 7,900 155,405
Broken Hill Proprietary........................... 45,800 388,074
Coca Cola Amatil.................................. 9,300 60,328
CRA Ltd........................................... 10,200 121,568
CSR Ltd........................................... 29,300 84,756
David Jones Ltd................................... 90,500 103,929
Lend Lease Corporation............................ 6,965 141,163
Mayne Nickless Ltd................................ 23,100 122,601
National Australia Bank........................... 31,800 420,459
News Corporation.................................. 56,719 464,045
Orica Ltd......................................... 9,600 56,910
Pacific Dunlop Ltd................................ 49,200 79,712
Qantas Airways Ltd................................ 49,050 73,988
Santos Ltd........................................ 21,000 65,179
Telstra Corporation............................... 89,100 228,978
Westpac Bank Corporation.......................... 52,500 321,005
WMC Ltd........................................... 36,600 110,416
Woolworths Ltd.................................... 18,300 59,639
-------------
3,219,158
BELGIUM -- 4.15%
- ---------------------------------------------------------------------------------
Bruxelles Lambert Groupe.......................... 960 193,859
Delhaize Le Lion.................................. 3,350 234,203
Electrabel........................................ 1,830 519,132
Fortis AG......................................... 2,542 649,341
Fortis AG (Rts) (a)............................... 112 6
Generale De Banque (Wts) (a)...................... 300 105
KBC Banc Assurance................................ 4,400 393,977
KBC Banc Assurance (VVRP)......................... 90 6,098
Petrofina SA...................................... 935 384,031
Solvay............................................ 2,730 216,550
Tractebel CAP..................................... 2,130 312,140
Union Miniere (a)................................. 1,624 100,436
-------------
3,009,878
CANADA -- 2.64%
- ---------------------------------------------------------------------------------
Agrium Inc........................................ 4,800 60,018
Alcan Aluminum Ltd................................ 3,000 82,566
Bank Montreal..................................... 2,800 154,123
Barrick Gold Corporation.......................... 1,700 32,347
Canadian National Railway Company................. 2,400 127,539
Canadian Pacific Ltd.............................. 7,400 208,189
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Extendicare Inc................................... 6,100 $ 48,707
Hudsons Bay Company............................... 3,300 76,582
Imasco Ltd........................................ 4,000 73,800
Imperial Oil Ltd.................................. 8,100 141,463
Magna International Inc........................... 1,100 75,200
Moore Corporation Ltd............................. 3,900 52,078
Newbridge Networks Corporation (a)................ 1,100 26,275
Noranda Inc....................................... 2,900 50,056
Nova Corporation Alberta.......................... 10,200 116,795
Potash Corp. Saskatchewan Inc..................... 1,100 82,974
Royal Bank Canada................................. 3,300 198,464
Seagram Ltd....................................... 1,500 61,109
Shaw Communications Inc........................... 5,600 108,838
Transcanada Pipelines Ltd......................... 3,800 84,183
Westcoast Energy Inc.............................. 2,400 53,413
-------------
1,914,719
DENMARK -- 0.45%
- ---------------------------------------------------------------------------------
Den Danske Bank................................... 1,300 156,125
Tele Damark A/S................................... 1,800 172,938
-------------
329,063
FINLAND -- 2.48%
- ---------------------------------------------------------------------------------
Cuhor Oyj......................................... 1,200 19,485
Merita Ltd. (Class A)............................. 30,300 200,119
Metsa-Serla Oyj (Class B)......................... 5,200 50,282
Nokia Oyj (Class A)............................... 14,500 1,067,451
Outokumpu Oyj..................................... 5,800 74,073
Sampo Insurance Company (Class A)................. 2,200 104,360
UPM-Kymmene Oyj................................... 7,900 217,641
Valmet Corporation................................ 3,700 63,860
-------------
1,797,271
FRANCE -- 8.11%
- ---------------------------------------------------------------------------------
Air Liquide....................................... 697 115,289
Alcatel Alsthom................................... 1,302 265,108
AXA-UAP........................................... 2,760 310,435
AXA-UAP CVG (Wts)(a).............................. 1,860 634
Banque National de Paris.......................... 2,980 243,499
Carrefour......................................... 300 189,804
Cie De St Gobain.................................. 1,533 284,250
CSF Thomson....................................... 4,100 155,979
Dexla France...................................... 1,412 190,113
Elf Aquitaine..................................... 2,236 314,372
Eridania Beghin Say............................... 600 132,491
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 35
<PAGE>
INTERNATIONAL GROWTH FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
France Telecom.................................... 5,800 $ 400,053
Generale Des Eaux (Wts) (a)....................... 1,905 3,750
Groupe Danone..................................... 800 220,587
Lafarge Coppee SA................................. 1,200 124,055
Lagardere......................................... 4,230 176,107
Michelin.......................................... 3,057 176,471
Paribas........................................... 1,866 199,696
Pechiney.......................................... 2,830 113,983
Peugeot SA........................................ 1,260 270,936
Pinault Printemps Redo............................ 190 159,022
Rhone-Poulenc SA.................................. 4,996 281,793
Seita............................................. 4,900 222,075
Soc Generale...................................... 1,345 279,648
Suez Lyonnaise Des Eaux........................... 2,063 339,528
Total Company..................................... 1,735 225,567
Usinor............................................ 4,100 63,341
Vivendi........................................... 1,955 417,471
-------------
5,876,057
GERMANY -- 9.17%
- ---------------------------------------------------------------------------------
Allianz AG........................................ 2,055 685,399
Allianz AG New.................................... 63 20,838
Basf AG........................................... 3,150 149,775
Bayer AG.......................................... 7,500 388,422
Bayer Motoren Werke AG............................ 205 207,450
Commerzbank AG.................................... 1,650 62,854
Continental AG.................................... 5,400 169,775
Daimler Benz AG................................... 2,850 280,504
Deutsche Bank AG.................................. 5,150 435,770
Deutsche Telekom AG............................... 20,800 569,752
Dresdner Bank AG.................................. 6,200 335,191
Hochtief AG....................................... 1,850 88,835
Hoechst AG........................................ 2,500 125,801
Man AG............................................ 390 152,242
Mannesmann AG..................................... 3,200 329,147
Metro AG.......................................... 4,378 264,605
Muenchener Rueckvers AG........................... 1,040 516,699
Preuss AG......................................... 560 200,593
RWE AG............................................ 3,850 227,996
Schering AG....................................... 1,950 229,768
Siemens AG........................................ 6,150 375,626
Thyssen AG........................................ 750 190,884
Veba AG........................................... 4,380 294,720
Volkswagen AG..................................... 350 338,268
-------------
6,640,914
HONG KONG -- 0.59%
- ---------------------------------------------------------------------------------
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Cheung Kong (Holdings)............................ 16,000 $ 78,678
Citic Pacific Ltd................................. 7,000 12,378
CLP Holdings...................................... 9,500 43,282
Hang Seng Bank.................................... 7,000 39,572
Hong Kong & China Gas............................. 41,800 47,476
Hong Kong & China Gas (Wts)....................... 1,900 130
Hong Kong Telecommunications...................... 19,000 35,680
Hutchison Whampoa................................. 19,000 100,297
Johnson Elec Holdings............................. 7,000 25,929
South China Morning Post.......................... 16,000 7,692
Sun Hung Kai Properties........................... 8,000 33,970
-------------
425,084
IRELAND -- 0.32%
- ---------------------------------------------------------------------------------
Smurfit (Jefferson) Group......................... 77,000 230,135
ITALY -- 3.31%
- ---------------------------------------------------------------------------------
Assic Generali.................................... 8,858 288,162
Credito Italiano.................................. 37,000 193,772
Danieli Di Risp................................... 15,000 69,650
ENI (ADR)......................................... 3,400 221,000
ENI ORD........................................... 53,000 347,517
IMI............................................... 10,000 157,591
Istituto Bancario San Paolo di Torino............. 11,000 158,801
Montedison SPA.................................... 130,820 162,352
Parmalat Finanz................................... 46,000 93,851
Rinascente (LA)................................... 11,600 115,559
Telecom Italia Mobile Di Risp..................... 25,000 84,424
Telecom Italia SPA................................ 31,666 233,206
Telecom Italia SPA-RNC............................ 15 73
TIM............................................... 44,000 269,188
-------------
2,395,146
JAPAN -- 15.59%
- ---------------------------------------------------------------------------------
Amada Company..................................... 24,000 117,162
Bank of Tokyo/ Mitsubishi......................... 22,000 233,731
Canon Inc......................................... 20,000 455,630
Canon Sales Company Inc........................... 8,000 109,120
Citizen Watch Company............................. 23,000 190,461
Dai Nippon Printing Company Ltd................... 22,000 352,426
Daiichi Pharmaceutical............................ 20,000 264,699
Daikin Kogyo...................................... 25,000 161,640
Daiwa House Industries Company.................... 12,000 106,314
Denso Corporation................................. 18,000 299,414
Fanuc Company..................................... 9,300 322,847
Fuji Photo Film Company........................... 4,000 $ 139,727
</TABLE>
36 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
INTERNATIONAL GROWTH FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Fujitsu........................................... 15,000 158,386
Hitachi........................................... 48,000 314,168
Honda Motor Company............................... 10,000 357,272
Hoya Corporation.................................. 5,000 142,113
INAX Corporation.................................. 18,000 62,096
Ito Yokado Company................................ 9,000 425,038
Kaneka Corporation................................ 25,000 131,988
Keio Teito Electric Rail.......................... 28,000 102,264
Kintetsu.......................................... 28,000 131,627
Kirin Brewery Company............................. 27,000 255,804
Kokuyo Company.................................... 8,000 135,966
Kuraray Company Ltd............................... 29,000 247,277
Kyocera Corporation............................... 3,000 147,103
Marui Company..................................... 13,000 194,619
Matsushita Electric Ind........................... 26,000 419,325
NGK Insulators.................................... 39,000 339,879
Nintendo.......................................... 2,400 223,042
Nippon Meat Packer................................ 16,000 196,601
Nippon Steel Corporation.......................... 19,000 33,529
Okumura........................................... 25,000 88,052
Omron Corporation................................. 7,000 107,326
Osaka Gas Corporation............................. 46,000 118,435
Sankyo Pharmaceutical Company..................... 18,000 411,369
Secom Company..................................... 6,000 347,581
Sega Enterprises.................................. 3,000 51,964
Seino Transport................................... 16,000 89,101
Sekisui House..................................... 22,000 171,042
Shin Etsu Chemical Company........................ 4,000 69,429
Sony Corporation.................................. 5,400 466,696
Sumitomo Chemical Industries...................... 28,000 86,671
Sumitomo Electric Industries...................... 20,000 202,936
Takeda Chemical Industries........................ 15,000 400,304
TDK Corporation................................... 4,000 296,521
Tokio Marine & Fire............................... 22,000 226,889
Tokyo Electric Power.............................. 6,300 123,931
Tonen Corporation................................. 18,000 93,599
Toray Industries Inc.............................. 60,000 312,432
Toshiba Corporation............................... 57,000 233,738
Toyo Suisan Kaisha................................ 13,000 79,540
Toyota Motor Corporation.......................... 16,000 415,419
Yamato Transport.................................. 2,000 22,492
Yamazaki Baking Company........................... 12,000 106,748
-------------
11,293,483
MALAYSIA -- 0.35%
- ---------------------------------------------------------------------------------
Berjaya Sports.................................... 12,000 17,782
Kuala Lumpur Kepong............................... 18,500 $ 29,866
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Malayan Banking Berhad............................ 7,000 7,050
Malaysia International Shipping................... 8,000 11,662
Nestle Malaysia Berhad............................ 4,000 18,119
Petronas Gas Berhad............................... 11,000 20,408
Public Bank Berhad Foreign........................ 12,199 3,674
Resorts World Berhad.............................. 16,000 17,580
Rothmans of Pall Mall............................. 6,000 41,564
Sime Darby Berhad................................. 4,000 2,757
Tanjong PLC....................................... 7,000 9,698
Telekom Malaysia.................................. 16,000 26,986
Tenaga Nasional................................... 17,000 20,481
UMW Holdings Berhad............................... 7,000 3,137
YTL Corporation Berhad............................ 19,500 14,659
YTL Power International........................... 10,500 5,718
-------------
251,141
NETHERLANDS -- 4.47%
- ---------------------------------------------------------------------------------
ABN Amro Holdings NV.............................. 11,324 265,169
Akzo Nobel NV..................................... 350 77,860
Elsevier NV....................................... 11,600 175,191
Heineken NV....................................... 5,000 196,532
Hoogovens & Staalf................................ 1,283 55,542
ING Group NV...................................... 6,529 427,826
KLM............................................... 1,725 70,095
Kon Kpn NV........................................ 5,719 220,292
Philips Electronics............................... 3,500 294,429
Polygram.......................................... 1,800 91,915
Royal Dutch Petroleum............................. 15,180 842,358
TNT Post Group NV................................. 5,719 146,298
Unilever NV CVA................................... 4,760 377,943
-------------
3,241,450
NEW ZEALAND -- 2.88%
- ---------------------------------------------------------------------------------
Brierley Investment NPV........................... 548,400 273,946
Carter Holt Harvey NPV............................ 190,100 166,183
Fletcher Challenge Building....................... 62,800 78,427
Fletcher Challenge Energy......................... 69,300 165,877
Fletcher Challenge Forest Division NPV............ 101,933 57,284
Fletcher Challenge Paper.......................... 124,700 138,860
Lion Nathan Ltd................................... 62,000 138,080
Telecom Corporation of New Zealand Ltd............ 246,600 1,018,848
Telecom Corporation of New Zealand Ltd (ADR)...... 1,600 $ 52,400
-------------
2,089,905
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 37
<PAGE>
INTERNATIONAL GROWTH FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
NORWAY -- 0.25%
- ---------------------------------------------------------------------------------
Norsk Hydro As.................................... 3,500 154,120
Norske Skogsindust................................ 800 24,737
-------------
178,857
SINGAPORE -- 1.12%
- ---------------------------------------------------------------------------------
City Developments................................. 14,000 39,217
Creative Technology Ltd........................... 2,000 24,332
DBS Lands......................................... 27,000 22,433
Elec & Eltek International........................ 3,300 11,154
Foreign Reg Bank Singapore........................ 7,200 39,953
Fraser & Neave.................................... 4,000 10,777
Keppel Corporation................................ 17,000 25,626
Keppel Lund....................................... 17,000 15,638
Overseas Chinese Bank............................. 17,200 58,694
Rothmans Inds..................................... 6,000 26,706
Singapore Airlines................................ 20,000 93,769
Singapore Press Holdings Ltd...................... 15,932 106,844
Singapore Technologies Engineering Ltd............ 22,000 15,537
Singapore Telecommunications Ltd.................. 137,000 195,134
United Overseas Bank.............................. 39,000 121,513
Venture Manufacturing............................. 3,000 5,697
-------------
813,024
SWEDEN -- 3.07%
- ---------------------------------------------------------------------------------
ABB AB............................................ 10,050 142,383
Astra AB.......................................... 13,060 266,898
Electrolux AB..................................... 5,450 93,612
Ericsson Lm Tel................................... 16,200 473,245
Investor AB....................................... 4,200 245,123
Nordbanken Holding................................ 32,830 240,792
Skandia Forsakring................................ 9,500 135,782
Skanska AB........................................ 3,000 134,654
Svenska Handelsbanken............................. 3,290 152,620
Swedish Match..................................... 38,480 127,849
Volvo AB.......................................... 7,220 214,989
-------------
2,227,947
SWITZERLAND -- 6.29%
- ---------------------------------------------------------------------------------
ABB AG Series A................................... 144 213,009
Credit Suisse Group............................... 3,679 819,958
Holderbank Financiere Glarus AG................... 130 165,687
Julius Baer Holdings.............................. 59 $ 184,874
Nestle SA......................................... 290 621,634
Novartis AG....................................... 621 1,035,068
Roche Holdings AG................................. 73 718,045
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Sairgroup......................................... 380 125,220
Saurer AG......................................... 131 134,088
Schweizerische Rueckversicherungs................. 171 433,175
Sulzer AG......................................... 136 107,503
-------------
4,558,261
UNITED KINGDOM -- 21.71%
- ---------------------------------------------------------------------------------
Abbey National.................................... 15,000 266,735
Barclays PLC...................................... 19,000 548,196
Bass.............................................. 8,107 152,012
BAT Industries.................................... 74,300 744,352
Billiton PLC...................................... 86,000 174,467
BOC Group......................................... 10,000 136,331
Booker PLC........................................ 38,600 159,193
British Petroleum................................. 57,340 836,773
British Sky Broadcasting.......................... 26,000 186,890
British Steel..................................... 166,000 365,172
British Telecom................................... 59,000 728,991
BTR PLC........................................... 23,562 66,881
Cable & Wireless.................................. 15,000 182,331
Cadbury Schweppes................................. 22,000 340,702
Charter........................................... 28,259 295,372
Coats Viyella PLC................................. 155,800 191,202
Diageo PLC........................................ 27,907 330,834
FKI PLC........................................... 83,750 244,016
General Electric Company.......................... 51,600 444,998
Glaxo Wellcome.................................... 34,200 1,027,296
Greenalls Group................................... 28,000 242,641
Hanson PLC........................................ 32,437 197,278
Hillsdown Holdings................................ 77,000 209,564
House of Fraser PLC............................... 79,500 230,970
HSBC Holdings..................................... 19,000 482,527
Inchcape.......................................... 41,000 129,385
Legal & General Group............................. 9,500 101,438
Lloyds TSB Group PLC.............................. 53,732 752,271
Marks & Spencer................................... 73,000 664,900
Mirror Group...................................... 73,800 278,486
National Westminster Bank......................... 12,000 214,590
Peninsular and Oriental Steam..................... 26,500 381,852
Prudential Corporation............................ 10,000 131,823
Reckitt & Colman.................................. 7,650 146,125
Reed International................................ 34,000 307,692
Reuters Group..................................... 8,600 98,362
Rio Tinto Corporation............................. 20,100 $ 226,537
RJB Mining........................................ 42,000 85,555
Royal Sun Alliance Insurance...................... 20,538 212,441
Scottish Hydro.................................... 22,500 199,863
</TABLE>
38 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
INTERNATIONAL GROWTH FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Sears............................................. 91,200 82,108
Sedgwick Group.................................... 60,400 131,105
Smithkline Beecham................................ 56,400 688,861
Tate & Lyle PLC................................... 38,000 301,539
TESCO............................................. 29,800 291,079
Thames Water...................................... 20,300 369,793
Unilever.......................................... 42,100 448,478
United News & Media PLC........................... 15,000 209,881
Vodafone Group.................................... 23,593 299,586
Williams Holdings................................. 25,000 160,709
Willis Corroon Group.............................. 11,000 27,917
-------------
15,728,100
TOTAL COMMON STOCKS & WARRANTS
(IDENTIFIED COST $57,709,268).................................... 66,219,593
- ---------------------------------------------------------------------------------
PREFERRED STOCK -- 0.41%
- ---------------------------------------------------------------------------------
AUSTRALIA -- 0.19%
- ---------------------------------------------------------------------------------
News Corporation.................................. 19,916 141,431
ITALY -- 0.22%
- ---------------------------------------------------------------------------------
Fiat SPA.......................................... 63,100 157,151
-------------
TOTAL PREFERRED STOCK
(IDENTIFIED COST $192,865)....................................... 298,582
- ---------------------------------------------------------------------------------
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
COMMERCIAL PAPER -- 7.27%
- ---------------------------------------------------------------------------------
Corporate Asset Fund 5.54%,
due 07/07/98 $ 1,000,000 $ 999,077
Heinz H J Company 5.55%,
due 08/11/98...................................... 460,000 457,092
Shell Finance Yrs 1&2 5.60%,
due 07/23/98...................................... 2,000,000 1,993,155
US West Communications Group Inc. 6.10%, due
07/01/98.......................................... 1,818,000 1,818,000
-------------
5,267,324
-------------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $5,267,324)..................................... 5,267,324
- ---------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $63,169,457).................................... $ 71,785,499
OTHER ASSETS LESS LIABILITIES -- 0.93%........................... 676,270
-------------
NET ASSETS -- 100%............................................... $ 72,461,769
- ---------------------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
(Rts) Rights.
(Wts) Warrants.
ADR American Depository Receipt.
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 39
<PAGE>
THE ENTERPRISE GOVERNMENT SECURITIES FUND
TCW FUNDS MANAGEMENT, INC.
Los Angeles, California
INVESTMENT MANAGEMENT
TCW Funds Management, Inc. is a wholly owned subsidiary of TCW Management
Company. TCW manages approximately $51.3 billion for institutional clients, and
its normal investment minimum is $35 million.
INVESTMENT OBJECTIVE
The objective of the Enterprise Government Securities Fund is to seek current
income and safety of principal, primarily from securities that are obligations
of the U.S. Government, its agencies or its instrumentalities.
INVESTMENT PHILOSOPHY
TCW's investment process is grounded in long-term value considerations. It does
not attempt to forecast short-term trends in interest rates and, therefore, does
not frequently alter average fund maturities. The process focuses on controlling
the variables that are known and manageable, such as the term structure of
interest rates, mortgage prepayment rates, and security structure. The fund
remains substantially invested in mortgage-backed products under the great
majority of market conditions.
FIRST HALF 1998 PERFORMANCE REVIEW
Based on the uncertainty of Asian effects, few investors expected the Federal
Reserve to raise interest rates during the first half of 1998 in spite of a very
robust domestic economy, and they were not disappointed. Another feature of the
bond market was the decline in market volatility characterized by a fairly tight
trading range for bonds that bolstered the performance of the mortgage sector.
Declining interest rates fueled a surge in refinancing activity that boosted the
MBA Refinancing Application Index to unprecedented levels early in the year
before moderating to simply very high readings. Reported prepayments on all
mortgage-backed pass-throughs above 7.00 percent increased dramatically,
validating the index's forecast. As expected, the adjustable-rate mortgage
sector was hardest hit. The flatter yield curve combined with lower interest
rates offered adjustable-rate borrowers the greatest incentive to refinance into
fixed-rate loans and lock in lower borrowing costs. However, even though the
adjustable-rate mortgage sector was negatively impacted by very rapid prepayment
rates, performance was better than expected due to the existence of some very
positive technicals. The demand for ARMs remained strong while the supply
steadily diminished. The outstanding supply of ARMs was quickly reduced by
prepayments, and the issuance of new ARMs fell due to consumers' preference for
fixed-rate loans. Meanwhile, ARM investors continued to demand additional
products to replace the holdings that had been prepaid. These factors caused ARM
prices to firm up in spite of the prepayment risk.
International markets and money flows played a prominent role in the U.S. bond
market during the latter part of the period. Large flows of capital moved
quickly in and out of the U.S. in response to volatile conditions in the
financial markets of Asia and Russia. The impact of these capital flows on the
U.S. financial system was most strongly felt in the second week of June,
following the announcement of a 5.3 percent decline in Japan's first quarter
Gross Domestic Product. The yen fell to a 10-year low and foreign investors
moved out of emerging market securities into
40 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
the safe haven of the U.S. Treasury market, causing the yield on the benchmark
30-year U.S. Treasury bond to plummet to an historic low. However, a couple of
days later, the U.S. intervened in the currency market to support the yen. As
foreign markets rebounded, international investors sold their Treasuries and
reinvested in the emerging markets, causing interest rates in the U.S. to move
abruptly higher. Foreign investors have also influenced the shape of the U.S.
Treasury yield curve. The preference of foreign investors for 2-year and 10-year
U.S. Treasury notes has been cited as a factor in the unusual inversion observed
in today's yield curve where yields on 2-year and 10-year U.S. Treasuries lie
below the Federal funds rate of 5.50 percent.
The Asian crisis appeared to take an increasing toll on U.S. economic growth.
The U.S. trade deficit widened to $14.5 billion in April -- worse than the
consensus estimate. Falling exports and inventory overhang slowed the growth of
the industrial sector year-to-date. Nonetheless, many sectors of the U.S.
economy remained strong and the trade deficit's drag on economic growth appeared
to have been offset by domestic demand. Consumer spending grew at a rapid rate
due to strong labor and financial market conditions. Inflationary pressures held
steady and the U.S. budget surplus continued to grow, diminishing the supply of
Treasury securities. These sound fundamentals played a positive role in bond
market performance.
The mortgage market's brush with a multi-year low in rates in June caused
spreads to widen on fears of another wave of refinancings. Rumors and reports of
sales by distressed mortgage investors pushed spreads out even wider
contributing to the underperformance of the mortgage sector.
FUTURE INVESTMENT STRATEGY
The risk to the mortgage market is that a relatively small change of perhaps
0.20 percent in mortgage rates might stimulate another flood of refinancing
applications. Analysts estimate that about 15 million households continue to pay
mortgage rates of eight percent or higher. That statistic, combined with
forecasts of low interest rates persisting into the fall season, makes mortgages
vulnerable to further price pressures. On the other hand, mortgages have now
cheapened to a point where many of these risks are offset and demand remains
strong. These factors, along with TCW's continued emphasis on call protection,
support a favorable outlook for the mortgage sector during the next few months.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE FUND MANAGER ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE
MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER
CONDITIONS.
THE ENTERPRISE GROUP OF FUNDS, INC. 41
<PAGE>
GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
U.S. GOVERNMENT & AGENCY OR PRINCIPAL
OBLIGATIONS -- 82.43% AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
FEDERAL HOME LOAN BANKS -- 0.21%
- ------------------------------------------------------------------------------
Federal Home Loan Banks 5.20%, due 10/20/00....... $ 200,000 $ 200,062
FEDERAL HOME LOAN PARTICIPATION CERTIFICATES -- 10.56%
- ------------------------------------------------------------------------------
FHLPC 7.00%, due 09/01/17......................... 1,808,854 1,835,734
FHLPC 7.00%, due 10/01/17......................... 2,402,546 2,438,248
FHLPC 9.00%, due 10/01/22......................... 1,530,111 1,615,905
FHLPC 10.00%, due 10/01/18........................ 1,114,670 1,205,493
FHLPC 10.00%, due 07/01/20........................ 1,863,454 2,017,617
FHLPC 10.00%, due 10/01/20........................ 849,963 916,149
-----------
10,029,146
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 28.24%
- ------------------------------------------------------------------------------
GNMA 6.625%, due 11/15/28......................... 4,815,717 4,806,904
GNMA 7.00%, due 12/15/27.......................... 5,040,832 5,121,082
GNMA 7.00%, due 10/15/33.......................... 14,851,599 15,013,630
GNMA 7.50%, due 04/15/23.......................... 687,611 705,929
GNMA 7.50%, due 05/15/23.......................... 633,705 650,492
GNMA 7.50%, due 05/15/23.......................... 503,297 516,464
GNMA 9.00%, due 08/15/16.......................... 5,887 6,267
-----------
26,820,768
FEDERAL HOUSING ADMINISTRATION -- 29.14%
- ------------------------------------------------------------------------------
FHA 6.75%, due 11/01/28........................... 2,217,469 2,217,469
FHA 7.00%, due 08/01/28........................... 2,316,651 2,339,817
FHA 7.18%, due 02/20/29........................... 3,402,857 3,441,139
FHA 7.625%, due 06/01/28.......................... 3,699,080 3,773,061
FHA 7.75%, due 06/01/23........................... 6,286,091 6,427,528
FHA 7.75%, due 04/01/28........................... 3,866,660 3,953,660
FHA 7.80%, due 08/01/23........................... 2,757,849 2,819,901
FHA 8.70%, due 03/01/23........................... 2,571,703 2,700,288
-----------
27,672,863
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 13.86%
- ------------------------------------------------------------------------------
Federal National Mortgage Association Medium Term
Note 6.25%, due 01/14/04.......................... 250,000 250,048
Federal National Mortgage Association Medium Term
Note 6.28%, due 02/03/04.......................... 190,000 190,030
Federal National Mortgage Association Principal
Strip 7.70%, due 08/10/04......................... 125,000 117,198
FNMA 5.50%, due 01/01/09.......................... 1,901,550 1,857,929
FNMA 5.50%, due 02/01/09.......................... 3,379,368 3,300,797
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
FNMA 6.50%, due 02/01/09.......................... $ 149,975 $ 150,830
FNMA 7.00%, due 03/01/14.......................... 1,673,682 1,696,444
FNMA 8.00%, due 11/01/16.......................... 2,674,885 2,756,803
FNMA 9.50%, due 08/01/20.......................... 1,002,969 1,066,347
FNMA 9.50%, due 10/01/20.......................... 1,059,071 1,125,242
FNMA 10.00%, due 07/01/20......................... 220,864 238,252
FNMA 10.00%, due 07/01/20......................... 383,920 413,943
-----------
13,163,863
U.S. TREASURY NOTES -- 0.42%
- ------------------------------------------------------------------------------
U.S. Treasury Note 8.875%,
due 05/15/00...................................... 380,000 402,549
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(IDENTIFIED COST $78,073,930)................................... 78,289,251
- ------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS (V) -- 4.04%
- ------------------------------------------------------------------------------
Federal Home Loan Mortgage Corporation 6.72%, due
08/15/23.......................................... 1,291,553 1,110,735
Federal Home Loan Mortgage Corporation 8.80%, due
12/15/23.......................................... 2,222,727 2,200,500
Federal National Mortgage Association Remic 6.50%,
due 06/25/23...................................... 500,000 497,805
Federal National Mortgage Association Remic 7.00%,
due 07/25/05...................................... 32,456 32,382
-----------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (V)
(IDENTIFIED COST $3,831,887).................................... 3,841,422
- ------------------------------------------------------------------------------
CORPORATE BONDS -- 8.96%
- ------------------------------------------------------------------------------
CORPORATE BONDS, CONVERTIBLE SECURITIES & COMMON
STOCKS -- 8.96%
- ------------------------------------------------------------------------------
PNC 6.625%, due 07/25/28.......................... 4,500,000 4,504,219
Superior Wholesale Inventory Finance Trust 6.346%,
due 11/15/04...................................... 4,000,000 4,003,125
-----------
8,507,344
TOTAL CORPORATE BONDS
(IDENTIFIED COST $8,511,719).................................... 8,507,344
- ------------------------------------------------------------------------------
</TABLE>
42 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
GOVERNMENT SECURITIES FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
COMMERCIAL PAPER -- 3.15%
- ------------------------------------------------------------------------------
Pitney Bowes Credit Corporation 5.75%, due
07/09/98.......................................... $3,000,000 $ 2,996,167
-----------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $2,996,167).................................... 2,996,167
- ------------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 0.83%
- ------------------------------------------------------------------------------
State Street Bank & Trust Repurchase Agreement
2.00%,
due 07/01/98......................................
Collateral: U.S. Treasury Bond, $505,000 12.5% due
8/15/14 Value $807,317............................ 785,000 785,000
-----------
TOTAL REPURCHASE AGREEMENTS
(IDENTIFIED COST $785,000)...................................... 785,000
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $94,198,703)................................... $94,419,184
OTHER ASSETS LESS LIABILITIES -- 0.59%.......................... 560,848
-----------
NET ASSETS 100%................................................. $94,980,032
- ------------------------------------------------------------------------------
</TABLE>
(v) Variable interest rate security; interest rate is as of June 30, 1998. The
maturity date shown is the next interest reset date.
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 43
<PAGE>
THE ENTERPRISE HIGH-YIELD BOND FUND
CAYWOOD-SCHOLL CAPITAL MANAGEMENT
San Diego, California
INVESTMENT MANAGEMENT
Caywood-Scholl has been fund manager to the Enterprise High-Yield Bond Fund
since its inception in 1987. Caywood-Scholl manages more than $816.9 million for
institutional clients, and its normal investment minimum is $1 million.
INVESTMENT OBJECTIVE
The objective of the Enterprise High-Yield Bond Fund is to seek maximum current
income, primarily from debt securities that are rated Ba or lower by Moody's
Investors Service, Inc., or BB or lower by Standard & Poor's.
INVESTMENT PHILOSOPHY
Caywood-Scholl's investment philosophy of seeking relative value and avoiding
risk is credit research-driven. The discipline of credit research facilitates
the informed use of a variety of lower-rated securities in aggressive fixed
income investing.
FIRST HALF 1998 PERFORMANCE REVIEW
The high-yield market began 1998 with solid underlying fundamentals, a strong
economy, and ample financial liquidity. Each of these factors mitigated credit
risk that has aided the overall demand for the high-yield market.
Year-to-date, high-yield companies have issued $104.2 billion in new securities,
a 95 percent increase over 1997's first-half issuance. To place this number into
context, the total new issuance for each of the past three years (1995 -- 1997)
was $47.2 billion, $73.6 billion, and $126.0 billion, respectively. Media and
telecommunications were the leading sectors of new issuance early in the period,
and the average deal size was slightly more than $200 million. Defaults
continued to trend below their historic averages.
The strong results for the first quarter mitigated the second quarter's
lackluster performance, placing the fund's year-to-date performance in line with
most market indices. Two factors had an increasingly negative influence on
performance: supply and volatility in emerging markets and U.S. stocks. The
primary drag on high-yield performance was caused by market oversupply. The pace
of issuance has caused the risk premium in the market to widen as issuers
compete for investor favor. The widening premiums kept high-yield bonds from
participating in the rally of U.S. Treasuries.
The other variable restraining the performance of the high-yield market was the
volatility of foreign securities and domestic equities. The increase in
volatility is the manifestation of investors' concern over future cash flows and
earnings from companies competing in a global economy. The higher degree of
investor uncertainty should produce lower enterprise valuations and reduced
financial liquidity. Fortunately, neither of these outcomes is evident at
present, but investors are concerned.
44 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
During the first half of 1998, the fund emphasized telecommunications, health
care, Yankees (bonds issued in the U.S. by non-U.S. entities), and media
sectors. With the exception of Yankees, these industries outperformed the market
while experiencing an unusual degree of volatility.
FUTURE INVESTMENT STRATEGY
During the past two months, Caywood-Scholl has been slowly upgrading credit
quality, adding to positions such as American Standard, Fred Meyer, Niagara
Mohawk Power, Owens Illinois, and Westpoint Stevens. Caywood-Scholl finds the
10-year non-call securities of these double B issuers attractive at this time
due to Caywood-Scholl's favorable outlook on interest rates, superior credit
statistics that offer greater protection against an economic slowdown, and an
incremental risk premium for certain lower-quality credits that is too small
given the higher degree of market volatility.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE FUND MANAGER ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE
MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER
CONDITIONS.
THE ENTERPRISE GROUP OF FUNDS, INC. 45
<PAGE>
HIGH-YIELD BOND FUND
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
CORPORATE BONDS, CONVERTIBLE OF SHARES
SECURITIES & COMMON & OR PRINCIPAL
PREFERRED STOCKS -- 84.43% AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
AEROSPACE -- 1.06%
- ------------------------------------------------------------------------------
B E Aerospace 8.00%,
due 03/01/08...................................... $ 650,000 $ 648,375
Coltec Industries Inc. 7.50%,
due 04/15/08...................................... 500,000 505,000
-----------
1,153,375
AUTOMOTIVE -- 0.36%
- ------------------------------------------------------------------------------
United Auto Group Inc. 11.00%, due 07/15/07....... 400,000 391,000
BANKING -- 2.78%
- ------------------------------------------------------------------------------
Bay View Capital Corporation 9.125%, due
08/15/07.......................................... 900,000 924,750
DVI Inc. 9.875%, due 02/01/04..................... 550,000 583,000
Imperial Credit Industries Inc. 9.875%, due
01/15/07.......................................... 700,000 700,000
Western Financial Savings 8.875%, due 08/01/07.... 500,000 473,125
Western Financial Savings Bank Orange California
8.50%,
due 07/01/03...................................... 350,000 334,688
-----------
3,015,563
BROADCASTING -- 5.18%
- ------------------------------------------------------------------------------
Allbritton Communications Company 8.875%, due
02/01/08.......................................... 800,000 864,000
Chancellor Radio Broadcasting 8.125%, due
12/15/07.......................................... 1,000,000 1,013,750
Fox/Liberty Networks LLC Zero Coupon, due
08/15/07.......................................... 1,650,000 1,148,812
Fox Family Worldwide Inc. Zero Coupon, due
11/01/07.......................................... 750,000 483,750
Fox Family Worldwide Inc. 9.25%, due 11/01/07..... 600,000 597,000
Rogers Communications Inc. 8.875%, due 07/15/07... 600,000 601,500
Rogers Communications Inc. 9.125%, due 01/15/06... 150,000 151,875
Sinclair Broadcast Group Inc. 8.75%, due
12/15/07.......................................... 750,000 765,000
-----------
5,625,687
BUILDING & CONSTRUCTION -- 3.58%
- ------------------------------------------------------------------------------
American Standard Inc. 7.375%, due 02/01/08....... 1,700,000 1,670,250
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
Building Materials Corporation America 8.00%, due
10/15/07.......................................... $ 450,000 $ 450,000
International Comfort Products 8.625%, due
05/15/08.......................................... 750,000 746,250
Nortek Inc. 9.125%,
due 09/01/07...................................... 1,000,000 1,020,000
-----------
3,886,500
BUSINESS SERVICES -- 0.94%
- ------------------------------------------------------------------------------
CEX Holdings Inc. 9.625%,
due 06/01/08...................................... 1,000,000 1,025,000
CABLE -- 3.44%
- ------------------------------------------------------------------------------
Adelphia Communications Corporation 10.50%,
due 07/15/04...................................... 650,000 710,125
Century Communications Corporation Zero Coupon,
due 01/15/08...................................... 1,000,000 452,500
Century Communications Corporation 9.50%,
due 03/01/05...................................... 200,000 216,500
CSC Holdings Inc. 7.875%,
due 12/15/07...................................... 500,000 524,960
Lenfest Communications Inc. 7.625%, due
02/15/08.......................................... 300,000 306,000
Medicom LLC/Mediacom Capital Corporation 8.50%,
due 04/15/08...................................... 650,000 648,375
TCI Satellite Entertainment Inc. Zero Coupon, due
02/15/07.......................................... 1,300,000 880,750
-----------
3,739,210
CHEMICALS -- 2.69%
- ------------------------------------------------------------------------------
General Chemical Corporation 9.25%, due
08/15/03.......................................... 550,000 567,187
Huntsman Polymers Corporation 11.75%, due
12/01/04.......................................... 250,000 275,938
PCI Chemicals Canada Inc. 9.25%, due 10/15/07..... 500,000 486,250
Pharmaceutical Fine Chemicals 9.75%, due
11/15/07.......................................... 800,000 904,000
Pioneer Americas Acquisition Corporation 9.25%,
due 06/15/07...................................... 700,000 687,750
-----------
2,921,125
COMMUNICATIONS -- 6.10%
- ------------------------------------------------------------------------------
</TABLE>
46 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
HIGH-YIELD BOND FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
Globalstar L P 11.375%,
due 02/15/04...................................... 950,000 $ 921,500
Globalstar L P/Globalstar Capital 10.75%, due
11/01/04.......................................... 250,000 239,375
Globalstar L P/Globalstar Corporation 11.50%,
due 06/01/05...................................... $ 250,000 243,437
Globalstar Telecommunications
(Wts) (a)......................................... 700 56,000
Iridium Capital Corporation 13.00%, due
07/15/05.......................................... $ 750,000 802,500
Iridium Capital Corporation 14.00%, due
07/15/05.......................................... $ 800,000 890,000
Iridium World Communications (Wts) (a)............ 550 102,163
Level 3 Commerce Inc. 9.125%,
due 05/01/08...................................... $1,250,000 1,215,625
Loral Orion Network Systems Inc. (Wts) (a)........ 850 12,113
Orion Network Systems Inc. 12.50%, due 01/15/07... $1,450,000 1,140,062
Pathinet Inc. 12.25%,
due 04/15/08...................................... 250,000 271,250
Qwest Communications International Inc. Zero
Coupon, due 02/01/08.............................. 1,000,000 726,250
-----------
6,620,275
CONSUMER PRODUCTS -- 3.82%
- ------------------------------------------------------------------------------
Boyds Collection Ltd. 9.00%,
due 05/15/08...................................... 300,000 300,000
Chattem Inc. 8.875%,
due 04/01/08...................................... 850,000 845,750
Corning Consumer Products Company 9.625%, due
05/01/08.......................................... 600,000 595,500
French Fragrances Inc. 10.375%, due 05/15/07...... 550,000 587,125
Revlon Consumer Products Corporation 8.625%,
due 02/01/08...................................... 350,000 350,875
Samsonite Corporation New 10.75%, due 06/15/08.... 650,000 645,125
Sealy Mattress Company Zero Coupon, due
12/15/07.......................................... 1,250,000 829,688
-----------
4,154,063
CONTAINERS/PACKAGING -- 4.07%
- ------------------------------------------------------------------------------
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
Buckeye Cellulose Corporation 8.50%, due
12/15/05.......................................... 550,000 $ 562,375
Huntsman Packaging Corporation 9.125%, due
10/01/07.......................................... 650,000 646,750
Owens Illinois Inc. 7.35%,
due 05/15/08...................................... 600,000 603,438
Owens Illinois Inc. 8.10%,
due 05/15/07...................................... 100,000 105,896
Plastic Containers Inc. 10.00%, due 12/15/06...... 300,000 322,500
Printpack Inc. 9.875%,
due 08/15/04...................................... 500,000 534,375
Printpack Inc. 10.625%, due 08/15/06.............. 400,000 428,500
Stone Container Corporation 10.75%, due
10/01/02.......................................... 550,000 584,375
United States Can Corporation 10.125%, due
10/15/06.......................................... 600,000 633,750
-----------
4,421,959
CRUDE & PETROLEUM -- 1.24%
- ------------------------------------------------------------------------------
Clark Refining & Marketing Inc. 8.875%, due
11/15/07.......................................... 250,000 251,250
Clark USA Inc. 10.875%,
due 12/01/05...................................... 1,000,000 1,090,000
-----------
1,341,250
ELECTRICAL EQUIPMENT -- 0.46%
- ------------------------------------------------------------------------------
Axiohm Transaction Solutions 9.75%, due
10/01/07.......................................... 500,000 503,750
ENERGY -- 0.74%
- ------------------------------------------------------------------------------
Chesapeake Energy Corporation 9.125%, due
04/15/06.......................................... 200,000 195,500
Nuevo Energy Company 8.875%, due 06/01/08......... 600,000 609,000
-----------
804,500
ENTERTAINMENT & LEISURE -- 1.46%
- ------------------------------------------------------------------------------
AMF Bowling Inc. Zero Coupon,
due 05/12/18...................................... 2,000,000 505,000
AMF Group Inc. 10.875%,
due 03/15/06...................................... 750,000 815,625
Premier Parks Inc. Zero Coupon, due 04/01/08...... 400,000 $ 265,500
-----------
1,586,125
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 47
<PAGE>
HIGH-YIELD BOND FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
FOOD & BEVERAGES & TOBACCO -- 2.01%
- ------------------------------------------------------------------------------
NBTY Inc. 8.625%, due 09/15/07.................... 1,000,000 1,025,000
Purina Mills Inc. 9.00%,
due 03/15/10...................................... 850,000 873,375
Twin Laboratories Inc. 10.25%, due 05/15/06....... 260,000 287,300
-----------
2,185,675
GAMING -- 1.36%
- ------------------------------------------------------------------------------
Empress Entertainment Inc. 8.125%, due 07/01/06... 500,000 501,250
Trump Atlantic City Associates 11.25%, due
05/01/06.......................................... $1,000,000 972,500
-----------
1,473,750
HEALTH CARE -- 8.65%
- ------------------------------------------------------------------------------
Amerisource Distribution Corporation (Class C).... 209 12,305
Columbia HCA Healthcare Corporation 7.00%, due
07/01/07.......................................... $ 550,000 531,905
Dade International Inc. 11.125%, due 05/01/06..... 450,000 508,500
Fisher Scientific International Inc. 9.00%, due
02/01/08.......................................... $ 900,000 893,250
Fresenius Med Care Capital Trust Preferred
Security.......................................... 250 261,875
Hudson Respiratory Care Inc. 9.125%, due
04/15/08.......................................... $ 450,000 447,187
Magellan Health Services Inc. 9.00%, due
02/15/08.......................................... 200,000 198,000
Mariner Health Group Inc. 9.50%, due 04/01/06..... 650,000 689,000
Maxxim Medical Inc. 10.50%, due 08/01/06.......... 1,000,000 1,100,000
Mediq Inc. 7.50%,
due 07/15/03...................................... 710,000 710,000
Pharmerica Inc. 8.375%,
due 04/01/08...................................... 600,000 597,000
PHP Healthcare Corporation 6.50%, due 12/15/02.... 800,000 440,000
Quest Diagnostics Inc. 10.75%, due 12/15/06....... 750,000 836,250
Rural/Metro Corporation 7.875%, due 03/15/08...... 800,000 $ 770,000
Tenet Healthcare Corporation 6.00%, due
12/01/05.......................................... 500,000 456,250
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
Tenet Healthcare Corporation 8.125%, due
12/01/08.......................................... 450,000 452,430
Vencor Inc. 9.875%,
due 05/01/05...................................... 500,000 491,250
-----------
9,395,202
HOTELS & RESTAURANTS -- 3.11%
- ------------------------------------------------------------------------------
AFC Enterprises Inc. 10.25%, due 05/15/07......... 650,000 690,625
Apple South Inc. 9.75%,
due 06/01/06...................................... 350,000 374,500
Foodmaker Corporation 9.75%,
due 11/01/03...................................... 350,000 368,375
Foodmaker Inc. 8.375%, due 04/15/08............... 850,000 847,875
Hammon John Q. Hotels 8.875%, due 02/15/04........ 300,000 302,250
Perkins Family Restaurant 10.125%, due 12/15/07... 750,000 795,000
-----------
3,378,625
MACHINERY -- 0.78%
- ------------------------------------------------------------------------------
Columbus McKinnon Corporation New York 8.50%, due
04/01/08.......................................... 500,000 492,500
Navistar International Corporation 8.00%, due
02/01/08.......................................... 350,000 351,750
-----------
844,250
METALS & MINING -- 2.94%
- ------------------------------------------------------------------------------
AK Steel Corporation 9.125%,
due 12/15/06...................................... 500,000 522,500
Kaiser Aluminum & Chemical Corporation 10.875%,
due 10/15/06...................................... 500,000 537,500
Metals USA Inc. 8.625%,
due 02/15/08...................................... 500,000 480,000
Oregon Steel Mills Inc. 11.00%,
due 06/15/03...................................... 450,000 481,500
WCI Steel Inc. 10.00%,
due 12/01/04...................................... 900,000 920,250
WHX Corporation 10.50%,
due 04/15/05...................................... 250,000 $ 254,375
-----------
3,196,125
PAPER & FOREST PRODUCTS -- 0.54%
- ------------------------------------------------------------------------------
Maxxam Group Inc. 11.25%, due 08/01/03............ 550,000 581,625
</TABLE>
48 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
HIGH-YIELD BOND FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
PRINTING & PUBLISHING -- 0.79%
- ------------------------------------------------------------------------------
Nebraska Book Company 8.75%, due 02/15/08......... 500,000 481,875
Von Hoffmann Press Inc. 10.375%, due 05/15/07..... 350,000 374,938
-----------
856,813
REAL ESTATE -- 0.69%
- ------------------------------------------------------------------------------
Crown Castle International Corporation Zero
Coupon, due 11/15/07.............................. 1,100,000 752,125
RETAIL -- 4.79%
- ------------------------------------------------------------------------------
Ann Taylor Inc. 8.75%, due 06/15/00............... 579,000 581,171
Charming Shoppes Inc. 7.50%, due 07/15/06......... 450,000 432,000
Cole National Group Inc. 8.625%, due 08/15/07..... 1,100,000 1,127,500
Jitney Jungle Stores America Inc. 10.375%, due
09/15/07.......................................... 550,000 587,125
Meyer Fred Inc. 7.45%,
due 03/01/08...................................... 1,250,000 1,254,363
Randalls Food Markets Inc. 9.375%, due 07/01/07... 1,150,000 1,219,000
-----------
5,201,159
TELECOMMUNICATIONS -- 13.86%
- ------------------------------------------------------------------------------
21St Century Telecom Group Inc. Zero Coupon, due
02/15/08.......................................... 950,000 535,563
CCPR Services Inc. 10.00%, due 02/01/07........... 800,000 807,000
Comcast Cellular Holdings Inc. 9.50%, due
05/01/07.......................................... 1,500,000 1,565,625
E. Spire Communications Inc. Zero Coupon, due
11/01/05.......................................... $1,100,000 932,250
E. Spire Communications Inc. (Wts) (a)............ 800 136,800
Firstworld Communications Inc. Zero Coupon, due
04/15/08.......................................... $ 500,000 $ 235,000
ICG Holdings Inc. Zero Coupon, due 05/01/06....... 1,250,000 1,006,250
ICG Services Inc. Zero Coupon, due 02/15/08....... $ 200,000 121,750
Intermedia Communications Inc..................... 186 7,800
Intermedia Communications Inc. 8.50%, due
01/15/08.......................................... $ 600,000 600,000
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
McLeod USA Inc. Zero Coupon, due 03/01/07......... 800,000 596,000
Metronet Communications Corporation Zero Coupon,
due 11/01/07...................................... 500,000 332,500
Metronet Communications Corporation Zero Coupon,
due 06/15/08...................................... 900,000 554,625
Metronet Communications Corporation 12.00%,
due 08/15/07...................................... $ 150,000 173,625
Metronet Communications Corporation (Wts) (a)..... 150 7,575
Nextel Communications Inc. Zero Coupon, due
09/15/07.......................................... $1,550,000 1,048,187
Nextel Communications Inc. Zero Coupon, due
10/31/07.......................................... 500,000 325,625
Nextel Communications Inc. Zero Coupon, due
02/15/08.......................................... 350,000 224,000
Nextlink Communications Inc. 9.45%, due
04/15/08.......................................... $1,250,000 767,187
Pagemart (Wts) (a)................................ 3,450 24,150
Pagemart Nationwide Inc........................... 1,750 17,500
RCN Corporation Zero Coupon, due 10/15/07......... $1,050,000 670,688
RCN Corporation 9.80%,
due 02/15/08...................................... 700,000 425,250
Rogers Cantel Inc. 8.80%,
due 10/01/07...................................... 800,000 790,000
Sprint Spectrum L P Zero Coupon,
due 08/15/06...................................... 2,500,000 2,137,500
Teligent Inc. Zero Coupon, due 03/01/08........... 200,000 110,250
Winstar Communications Inc. 10.00%, due
03/15/08.......................................... 450,000 446,625
Winstar Equipment Corporation 12.50%, due
03/15/04.......................................... 400,000 451,000
-----------
15,050,325
TEXTILES -- 3.62%
- ------------------------------------------------------------------------------
Phillips Van Heusen Corporation 9.50%, due
05/01/08.......................................... 1,000,000 $ 1,001,250
Pillowtex Corporation 9.00%, due 12/15/07......... 450,000 462,375
Polymer Group Inc. 9.00%,
due 07/01/07...................................... 550,000 559,625
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 49
<PAGE>
HIGH-YIELD BOND FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
Westpoint Stevens Inc. 7.875%, due 06/15/08....... 1,000,000 997,500
William Carter Company Acquired 10.375%, due
12/01/06.......................................... 850,000 909,500
-----------
3,930,250
TRANSPORTATION -- 0.63%
- ------------------------------------------------------------------------------
TBS Shipping International Ltd. 10.00%, due
05/01/05.......................................... 750,000 684,375
UTILITIES -- 2.44%
- ------------------------------------------------------------------------------
Calenergy Inc. 7.63%, due 10/15/07................ 250,000 252,473
Ferrellgas Partners L P 9.375%,
due 06/15/06...................................... 550,000 585,062
Midland Cogeneration Venture
L P 10.33%, due 07/23/02.......................... 170,775 183,583
Midland Funding Corporation 10.33%, due
07/23/02.......................................... 183,888 197,679
Niagara Mohawk Power Corporation 7.75%,
due 10/01/08...................................... 1,400,000 1,435,000
-----------
2,653,797
WASTE MANAGEMENT -- 0.30%
- ------------------------------------------------------------------------------
Allied Waste N A Inc. 10.25%, due 12/01/06........ 300,000 330,375
TOTAL CORPORATE BONDS, CONVERTIBLE SECURITIES & COMMON STOCKS
(IDENTIFIED COST $89,522,455)................................... 91,703,853
- ------------------------------------------------------------------------------
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
FOREIGN BONDS -- 8.79%
- ------------------------------------------------------------------------------
APPAREL & TEXTILES -- 0.22%
- ------------------------------------------------------------------------------
Reliance Industries Ltd. 8.25%, due 01/15/27...... 250,000 $ 240,505
BASIC INDUSTRIES -- 0.95%
- ------------------------------------------------------------------------------
Cemex SA 12.75%, due 07/15/06..................... 900,000 1,031,265
BROADCASTING -- 1.72%
- ------------------------------------------------------------------------------
Grupo Televisa SA 11.875%,
due 05/15/06...................................... 300,000 334,704
Grupo Televisa SA De CV 11.375%, due 05/15/03..... 700,000 753,459
Satelites Mexicanos SA De CV 10.125%, due
11/01/04.......................................... 800,000 782,216
-----------
1,870,379
CABLE -- 0.61%
- ------------------------------------------------------------------------------
Kabelmedia Holding Zero Coupon, due 08/01/06...... 850,000 657,687
CAPITAL GOODS & SERVICES -- 0.44%
- ------------------------------------------------------------------------------
Cemex International Capital Inc. 9.66%, due
12/29/49.......................................... 500,000 482,500
CONTAINERS/PACKAGING -- 0.56%
- ------------------------------------------------------------------------------
Viacap SA De CV 11.375%,
due 05/15/07...................................... 600,000 613,872
ENERGY -- 0.59%
- ------------------------------------------------------------------------------
Petroleos Mexicanos 8.85%,
due 09/15/07...................................... 250,000 246,073
Petroleos Mexicanos 9.00%,
due 06/01/07...................................... 400,000 396,676
-----------
642,749
GOVERNMENT BOND -- 2.32%
- ------------------------------------------------------------------------------
Argentina Rep Global 11.00%, due 10/09/06......... 650,000 689,481
Korea Rep 8.875%, due 04/15/08.................... 400,000 361,552
Russian Federation 10.00%,
due 06/26/07...................................... 300,000 227,250
St. Petersburg Russia 9.50%,
due 06/18/02...................................... 300,000 235,140
Turkiye Cumhuriyeti 10.00%, due 09/19/07.......... 250,000 248,590
United Mexican States 8.625%, due 03/12/08........ 350,000 338,166
</TABLE>
50 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
HIGH-YIELD BOND FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
United Mexican States 9.875%, due 01/15/07........ 400,000 $ 414,384
-----------
2,514,563
METALS & MINING -- 0.13%
- ------------------------------------------------------------------------------
Hylsa SA De CV 9.25%,
due 09/15/07...................................... 150,000 141,000
PAPER & FOREST PRODUCTS -- 0.60%
- ------------------------------------------------------------------------------
Indah Kiat Finance Mauritius Ltd. 10.00%, due
07/01/07.......................................... 350,000 247,625
Indah Kiat International Finance Co. 11.875%, due
06/15/02.......................................... 150,000 122,822
Pindo Deli Finance Mauritius Ltd. 10.75%, due
10/01/07.......................................... 400,000 277,000
-----------
647,447
TRANSPORTATION -- 0.65%
- ------------------------------------------------------------------------------
TFM SA De CV 10.25%, due 06/15/07................. 250,000 241,372
Transportacion Maritima 10.00%, due 11/15/06...... 500,000 466,305
-----------
707,677
TOTAL FOREIGN BONDS
(IDENTIFIED COST $9,831,631).................................... 9,549,644
- ------------------------------------------------------------------------------
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
U.S. TREASURY NOTES -- 0.70%
- ------------------------------------------------------------------------------
U.S. Treasury Note 5.50%,
due 05/31/03...................................... 250,000 $ 249,828
U.S. Treasury Note 5.625%,
due 05/15/08...................................... 500,000 506,640
-----------
756,468
TOTAL U.S. TREASURY NOTES
(IDENTIFIED COST $756,866)...................................... 756,468
- ------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 4.47%
- ------------------------------------------------------------------------------
State Street Bank & Trust Repurchase Agreement
4.00%, due 07/01/98
Collateral: U.S. Treasury Bond $3,030,000 11.25%
due 02/15/15 Value $4,959,971..................... $4,855,000 4,855,000
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $4,855,000).................................... 4,855,000
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $104,965,952).................................. $106,864,965
OTHER ASSETS LESS LIABILITIES -- 1.61%.......................... 1,745,212
-----------
NET ASSETS 100%................................................. $108,610,177
- ------------------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
(Wts) Warrants.
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 51
<PAGE>
THE ENTERPRISE TAX-EXEMPT INCOME FUND
MBIA CAPITAL MANAGEMENT CORP.
Armonk, New York
INVESTMENT MANAGEMENT
MBIA Capital Management Corp. became manager of the Enterprise Tax-Exempt Income
Fund on January 1, 1998. MBIA Capital Management Corp. manages approximately
$11.8 billion for institutional clients, and its normal investment minimum is
$10 million.
INVESTMENT OBJECTIVE
The investment objective of the Enterprise Tax-Exempt Income Fund is to seek a
high level of current income exempt from federal income tax, with consideration
given to preservation of principal, primarily from investment in a diversified
fund of long-term investment-grade municipal bonds.
INVESTMENT PHILOSOPHY
MBIA Capital Management uses a value-driven, bottom-up investment selection
process. Recognition that interest rate movement is uncertain and that yield is
a dominant source of return drives its decisions. The key to performance is to
buy yield at the right price, in the right sector and in the right part of the
yield curve.
FIRST HALF 1998 PERFORMANCE REVIEW
The objectives for the Enterprise Tax-Exempt Fund during the first half of 1998
were to lengthen duration to take advantage of the steeper municipal yield curve
and high-yield ratios in the long end of the curve, as well as to improve credit
quality and reduce reinvestment risk.
Early in the period, MBIA increased fund duration, average maturity, and
liquidity by selling odd lot, high coupon, pre-refunded and short call paper
with maturity/redemption dates ranging from 2000 to 2003. This money was
reinvested into liquid, insured issues with 5.125 percent to 5.25 percent
coupons and good call features maturing in the 20-year area. In addition, MBIA
invested in insured, non-callable paper in the 15-year part of the curve for
well-structured cash flow.
Later in the period, MBIA extended the effective duration of the fund to 8.17
years from 7.63, increased the insured portion to 42 percent and added coupon
return (average coupon: 5.842 percent versus 5.745 percent) by buying insured
revenue bonds primarily in the 25-30 year range with good call features. The
fund's largest state holding is New York, 12.3 percent, which was the second
highest performing state (South Dakota was number one) on a year-to-date basis,
while MBIA's exposure to the health care industry 24 percent, the No. 1 revenue
bond category year-to-year, also helped buoy the fund's performance.
FUTURE INVESTMENT STRATEGY
MBIA's near-term outlook for the municipal market remains positive. Although
MBIA does not expect municipals to outperform taxables in the near future, it
does expect municipals to remain cheap on a relative basis to their taxable
counterparts. For the Enterprise Tax-Exempt Income Fund, MBIA will continue to
emphasize high-quality, liquid issues with well-structured cash flows while
focusing the relative value work on optimal fund allocation across municipal
sectors and maturities.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE FUND MANAGER ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE
MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER
CONDITIONS.
52 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
TAX-EXEMPT INCOME FUND
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL BONDS -- 98.72% AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------------
ALABAMA -- 0.99%
- ----------------------------------------------------------------------------------
Alabama Housing Finance Authority Single
Family Mortgage Revenue Home Mortgage Series
A-1 6.55% due 10/01/14........................ $ 250,000 $ 270,535
ARIZONA -- 3.53%
- ----------------------------------------------------------------------------------
Salt River Project, Arizona Agriculture Import
and Power District Electric System Revenue
5.00% due 01/01/30............................ 1,000,000 967,910
CALIFORNIA -- 0.60%
- ----------------------------------------------------------------------------------
California State General Obligation Bonds
6.10% due 09/01/04............................ 150,000 164,688
COLORADO -- 3.55%
- ----------------------------------------------------------------------------------
E470 Public Highway Authority Company Revenue
Senior Series A 5.00% due 09/01/26............ 1,000,000 973,610
FLORIDA -- 8.59%
- ----------------------------------------------------------------------------------
Broward County, Broward Recovery Revenue 7.95%
due 12/01/08.................................. 310,000 333,452
Florida State Board Education Capital Outlay
Series C 5.50% due 06/01/23................... 1,500,000 1,535,970
Florida State Board Education Capital Outlay
Series A 7.25% due 06/01/23................... 170,000 182,323
Orlando Florida Utilities Commission Water and
Electric Revenue Refunding Sub Series D 6.75%
due 10/01/17.................................. 250,000 302,285
-------------
2,354,030
GEORGIA -- 1.97%
- ----------------------------------------------------------------------------------
Atlanta Downtown Development Authority
Underground Atlanta Project 6.25% due
10/01/12...................................... 500,000 539,810
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------------
IDAHO -- 1.19%
- ----------------------------------------------------------------------------------
Idaho Housing Agency Single Family Mortgage
Revenue Series F-2 (AMT) 7.80% due 01/01/23... $ 310,000 $ 326,464
ILLINOIS -- 10.89%
- ----------------------------------------------------------------------------------
Chicago Illinois Sales Tax Revenue 5.25% due
01/01/20...................................... 1,000,000 1,001,380
Illinois Health Facilities Authority Revenues
Edward Obligated Group Series A 5.25% due
02/15/27...................................... 1,000,000 989,910
Illinois Health Facilities Authority Revenues
Sherman Health System 5.25% due 08/01/27...... 1,000,000 994,270
-------------
2,985,560
INDIANA -- 3.68%
- ----------------------------------------------------------------------------------
Indiana Health Facility Hospital Revenue
Sisters of St Francis Health-A 5.375% due
11/01/27...................................... 1,000,000 1,009,230
IOWA -- 3.55%
- ----------------------------------------------------------------------------------
Iowa Finance Authority Hospital Facility
Revenue Iowa Health Systems Series A 5.125%
due 01/01/28.................................. 1,000,000 974,230
LOUISIANA -- 0.56%
- ----------------------------------------------------------------------------------
Louisiana State Offshore Term Authority
Deepwater Port Revenue Series E 7.60% due
09/01/10...................................... 140,000 151,855
MASSACHUSETTS -- 2.89%
- ----------------------------------------------------------------------------------
Massachusetts State Housing Finance Agency
Revenue Residential FNMA Collateral-A 6.90%
due 11/15/24.................................. 750,000 791,445
MICHIGAN -- 3.95%
- ----------------------------------------------------------------------------------
Michigan State Building Authority Revenue
Series I 6.40% due 10/01/04................... 1,000,000 1,083,640
MISSOURI -- 0.39%
- ----------------------------------------------------------------------------------
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 53
<PAGE>
TAX-EXEMPT INCOME FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------------
Missouri State Housing Development Community
Mortgage Single Family GNMA Revenue Series B
(AMT) 8.25% due 05/01/19...................... $ 105,000 $ 107,624
NEVADA -- 3.37%
- ----------------------------------------------------------------------------------
Clark County School District Series A MBIA
7.00% due 06/01/11............................ 750,000 922,710
NEW MEXICO -- 1.41%
- ----------------------------------------------------------------------------------
New Mexico Mortgage Finance Authority Single
Family Mortgage 7.80% due 09/01/17............ 370,000 385,311
NEW YORK -- 12.18%
- ----------------------------------------------------------------------------------
New York Adjustment Adjusted Subser A-4 3.85%
due 08/01/22.................................. 400,000 400,000
New York State Local Government Assistance
7.00% due 04/01/21 Prerefunded 04/01/01 at
102........................................... 200,000 218,976
New York State Mortgage Agency Revenue 7.95%
due 10/01/14.................................. 200,000 203,110
New York State Power Authority Revenue &
General Prerefunded Series CC 5.00% due
01/01/09...................................... 1,020,000 1,069,970
Triborough Bridge & Tunnel Authority, New York
General Purpose Series A 6.00% due 01/01/10... 1,300,000 1,447,043
-------------
3,339,099
OHIO -- 0.19%
- ----------------------------------------------------------------------------------
Ohio Housing Finance Agency Single Family
Mortgage GNMA (AMT) 8.25% due 12/15/19........ 50,000 51,800
OKLAHOMA -- 5.86%
- ----------------------------------------------------------------------------------
Tulsa, Oklahoma General Obligation Bonds 6.30%
due 06/01/17.................................. 1,500,000 1,606,650
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------------
OREGON -- 1.51%
- ----------------------------------------------------------------------------------
Oregon State General Obligation Bonds 7.00%
due 12/01/11.................................. $ 400,000 $ 413,096
TEXAS -- 9.30%
- ----------------------------------------------------------------------------------
Houston Texas General Obligation Bonds 6.00%
due 03/01/05.................................. 500,000 525,655
Plano Texas Health Facilities Development
Corporation Texas Health Resources Systems
Series C 5.00% due 02/15/22................... 500,000 487,165
Texas Housing Agency Residential Development
Revenue Series A GNMA Collateral 7.60% due
07/01/16...................................... 85,000 87,828
Texas State Department Housing Community
Affairs Home Mortgage Revenue GNMA Collateral
Series A 6.95% due 07/01/23................... 400,000 433,168
Texas Tech University Revenues Refunding &
Improvement Financing Systems 3Rd Series
5.375% due 02/15/17........................... 1,000,000 1,016,480
-------------
2,550,296
UTAH -- 3.79%
- ----------------------------------------------------------------------------------
Utah County Utah Hospital Revenue IHC Health
Services Incorporated 5.25% due 08/15/21...... 1,000,000 998,690
Utah State Housing Finance Agency Single
Family Mortgage Series E (AMT) 9.00% due
01/01/19...................................... 40,000 41,134
-------------
1,039,824
VIRGINIA -- 3.88%
- ----------------------------------------------------------------------------------
Virginia State Transportation Board Revenue
6.00% due 04/01/10............................ 1,000,000 1,064,700
WASHINGTON -- 9.30%
- ----------------------------------------------------------------------------------
</TABLE>
54 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
TAX-EXEMPT INCOME FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------------
Tacoma, Washington Electric Systems Revenue
AMBAC 6.15% due 01/01/08...................... $ 1,000,000 $ 1,067,460
Washington State Health Care Facilities
Swedish Health Services 5.125% due 11/15/22... 1,000,000 982,960
Washington State Public Power Supply Refunding
Series B 5.125% due 07/01/14.................. 500,000 498,020
-------------
2,548,440
WISCONSIN -- 1.60%
- ----------------------------------------------------------------------------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------------
Wisconsin Housing & Economic Development
Authority Home Ownership Revenue Series A
7.75% due 09/01/17............................ $ 420,000 $ 439,551
-------------
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $25,736,363)..................................... 27,062,108
- ----------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $25,736,363 ).................................... $ 27,062,108
OTHER ASSETS LESS LIABILITIES -- 1.28%............................ 350,749
-------------
NET ASSETS -- 100%................................................ $ 27,412,857
- ----------------------------------------------------------------------------------
</TABLE>
AMT Securities subject to Alternative Minimum Tax.
See notes to financial statements
THE ENTERPRISE GROUP OF FUNDS, INC. 55
<PAGE>
THE ENTERPRISE MANAGED FUND
OPCAP ADVISORS
New York, New York
INVESTMENT MANAGEMENT
OpCap Advisors, a wholly owned subsidiary of Oppenheimer Capital, became fund
manager to the Enterprise Managed Fund on October 1, 1994. Oppenheimer Capital
manages approximately $66.6 billion for institutional clients, and its normal
investment minimum is $20 million.
INVESTMENT OBJECTIVE
The objective of the Enterprise Managed Fund is to seek growth of capital over
time through investment in a fund consisting of common stocks, bonds and cash
equivalents, the percentages of which will vary based on the manager's
assessment of relative investment values.
INVESTMENT PHILOSOPHY
OpCap's investment process seeks to take advantage of opportunities in all
market sectors by shifting the investment mix among stocks, bonds and money
market instruments. The focus of the investment process is to identify quality
companies that are undervalued in the market. The average annual return on
equity of these companies is in excess of the average return on equity of the
companies in the S&P 500 Index, while the average price-to-earnings ratio of
these companies is significantly below the price-to-earnings ratio for those
companies. This combination of high returns on equity and low security
valuations helps preserve capital in down markets and provides opportunity for
investment profit over time.
FIRST HALF 1998 PERFORMANCE REVIEW
Early in the year, the fund's results were driven by a limited number of very
large-capitalization stocks. The allocation of the fund reflected a moderate
increase in the ownership of stocks and a moderate decrease in its cash
position. The fund's performance lagged somewhat as the first half unfolded, due
in part to its large cash position and the underperformance of value stocks.
OpCap believes the U.S. economic outlook remains positive at this time, but that
many stocks are fully valued. Consequently, the fund increased its cash
position. At June 30, the fund's net assets were allocated 77 percent to common
stocks and 23 percent to cash and cash equivalents. OpCap intends to use the
fund's cash reserves to buy stocks OpCap likes as they are available at
attractive prices.
OpCap established new positions in several stocks, including Minnesota Mining &
Manufacturing Co. (3M), a leading research and technology company that is
achieving unit growth of about 10 percent a year. 3M's earnings for the fourth
quarter of 1997 fell short of investor expectations, causing the stock to drop
and creating an opportunity to buy a superb company at a reasonable price. OpCap
expects 3M to be back on track in the next several quarters, translating unit
growth into earnings growth.
Other new positions were AlliedSignal, Inc., Chase Manhattan Corp., and Sprint
Corp. OpCap sold the fund's shares of Nike, Inc., and Travelers Property
Casualty Corp.
Most of the fund's largest holdings performed well. Freddie Mac stock repeatedly
reached new highs, benefiting from the company's continued strong business
performance. Du Pont benefited from the belief of some investors that
56 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
the company is about to decide whether to divest its Conoco oil and gas
subsidiary. OpCap believes du Pont's new chief executive officer intends to
optimize returns on the company's asset base and recognizes that oil and gas
production, being a commodity business, is unlikely to earn above-average
returns. It seems likely, therefore, that du Pont may part with Conoco, even if
a decision is not reached in the immediate future. Citicorp performed well as
concerns eased about the potential impact of the Asian financial crisis on the
company's earnings. In early April, Citicorp announced plans to merge with
Travelers Group, Inc., causing the price of Citicorp stock to rise sharply.
McDonald's Corp. stock hit a new high amid signs the company is improving its
business performance in the U.S. while continuing to grow internationally.
On the other hand, Boeing Co. continued to have problems with the production of
its 737 aircraft. OpCap thinks these problems have been largely overstated by
investors. Once Boeing gets beyond its current production difficulties, the
stock should be an advantageous investment.
FUTURE INVESTMENT STRATEGY
The fund invests for the long term in reasonably-valued, high-return-on-capital
companies run by management teams that OpCap admires and with whom it wants to
collaborate. OpCap wants to own businesses that are dominant in their industries
and can control their own destinies instead of being subject to the vicissitudes
of change.
On balance, OpCap thinks the economic outlook is positive, but there are some
concerns. As always, OpCap buys individual stocks, not the indices or the
economy. Nonetheless, OpCap remains alert to macro trends because they affect
the overall investment environment and the stocks that the fund manager owns.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE FUND MANAGER ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE
MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER
CONDITIONS.
THE ENTERPRISE GROUP OF FUNDS, INC. 57
<PAGE>
MANAGED FUND
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
COMMON STOCKS -- 77.21% AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
AEROSPACE -- 5.21%
- ---------------------------------------------------------------------------------
AlliedSignal Inc.................................. 20,000 $ 887,500
Boeing Company.................................... 340,000 15,151,250
Lockheed Martin Corporation....................... 70,000 7,411,250
-------------
23,450,000
AUTOMOTIVE -- 1.42%
- ---------------------------------------------------------------------------------
LucasVarity PLC (ADR)............................. 160,000 6,370,000
BANKING -- 12.73%
- ---------------------------------------------------------------------------------
BankBoston Corporation............................ 210,000 11,681,250
Chase Manhattan Corporation....................... 60,000 4,530,000
Citicorp.......................................... 140,000 20,895,000
M&T Bank Corporation.............................. 15,000 8,310,000
Wells Fargo & Company............................. 32,200 11,881,800
-------------
57,298,050
CHEMICALS -- 10.62%
- ---------------------------------------------------------------------------------
Dow Chemical Company.............................. 80,000 7,735,000
Du Pont (E. I.) de Nemours & Company.............. 300,000 22,387,500
Hercules Inc...................................... 77,000 3,166,625
Monsanto Company.................................. 156,600 8,750,025
Solutia Inc....................................... 200,000 5,737,500
-------------
47,776,650
COMPUTER HARDWARE -- 1.22%
- ---------------------------------------------------------------------------------
Intel Corporation................................. 74,200 5,500,075
COMPUTER SOFTWARE -- 0.62%
- ---------------------------------------------------------------------------------
Computer Associates International Inc............. 50,000 2,778,125
CONSUMER PRODUCTS -- 1.65%
- ---------------------------------------------------------------------------------
Mattel Inc........................................ 175,500 7,425,844
DRUGS & MEDICAL PRODUCTS -- 1.56%
- ---------------------------------------------------------------------------------
Becton, Dickinson & Company....................... 90,500 7,025,063
ELECTRICAL EQUIPMENT -- 1.04%
- ---------------------------------------------------------------------------------
Varian Associates Inc............................. 120,000 4,680,000
ELECTRONICS -- 0.28%
- ---------------------------------------------------------------------------------
Unitrode Corporation (a).......................... 110,000 1,265,000
ENERGY -- 0.56%
- ---------------------------------------------------------------------------------
Triton Energy Ltd. (a)............................ 70,000 2,498,125
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
FINANCE -- 2.03%
- ---------------------------------------------------------------------------------
American Express Company.......................... 80,000 $ 9,120,000
INSURANCE -- 5.99%
- ---------------------------------------------------------------------------------
ACE Ltd........................................... 256,000 9,984,000
EXEL Ltd.......................................... 218,200 16,978,687
-------------
26,962,687
MACHINERY -- 4.42%
- ---------------------------------------------------------------------------------
Caterpillar Inc................................... 268,600 14,202,225
Tenneco Inc....................................... 150,000 5,709,375
-------------
19,911,600
MISC. FINANCIAL SERVICES -- 6.07%
- ---------------------------------------------------------------------------------
Countrywide Credit Industries Inc................. 130,000 6,597,500
Federal Home Loan Mortgage Corporation............ 440,000 20,707,500
-------------
27,305,000
PAPER & FOREST PRODUCTS -- 2.15%
- ---------------------------------------------------------------------------------
Champion International Corporation................ 197,000 9,689,938
PRINTING & PUBLISHING -- 3.89%
- ---------------------------------------------------------------------------------
Time Warner Inc................................... 205,000 17,514,687
PUBLISHING -- 2.03%
- ---------------------------------------------------------------------------------
Donnelley R R & Sons Company...................... 200,000 9,150,000
RAW MATERIALS -- 2.19%
- ---------------------------------------------------------------------------------
Minnesota Mining & Manufacturing Company.......... 120,000 9,862,500
RESTAURANTS -- 5.21%
- ---------------------------------------------------------------------------------
McDonald's Corporation............................ 340,000 23,460,000
TECHNOLOGY -- 1.03%
- ---------------------------------------------------------------------------------
National Semiconductor Corporation (a)............ 350,000 4,615,625
TELECOMMUNICATIONS -- 4.85%
- ---------------------------------------------------------------------------------
Sprint Corporation................................ 150,000 10,575,000
Telecom-TCI Ventures Group A (a).................. 560,000 11,235,000
-------------
21,810,000
TRANSPORTATION -- 0.44%
- ---------------------------------------------------------------------------------
</TABLE>
58 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
MANAGED FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Union Pacific Corporation......................... 45,000 $ 1,985,625
TOTAL COMMON STOCKS
(IDENTIFIED COST $249,930,618)................................... 347,454,594
- ---------------------------------------------------------------------------------
COMMERCIAL PAPER -- 15.67%
- ---------------------------------------------------------------------------------
Goldman Sachs Group L P 5.51% due 08/10/98........ $ 20,000,000 19,877,556
Household Finance Corporation 5.53% due
07/17/98.......................................... 10,000,000 9,975,422
IBM Credit Corporation 5.49% due 07/13/98......... 10,820,000 10,800,199
Prudential Funding Corporation 5.53% due
07/27/98.......................................... 15,000,000 14,940,092
Deere (John) Capital Corporation 5.52% due
07/28/98.......................................... 15,000,000 14,937,900
-------------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $70,531,169).................................... 70,531,169
- ---------------------------------------------------------------------------------
SHORT TERM GOVERNMENT SECURITIES -- 2.22%
- ---------------------------------------------------------------------------------
Federal Home Loan Bank Consolidated Discount Note,
5.39% due 07/22/98................................ 10,000,000 9,968,558
TOTAL SHORT TERM GOVERNMENT SECURITIES
(IDENTIFIED COST $9,968,558)..................................... 9,968,558
- ---------------------------------------------------------------------------------
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 4.58%
- ---------------------------------------------------------------------------------
State Street Bank & Trust Repurchase Agreement,
5.00% due 07/01/98
Collateral: U.S. Treasury Bond $13,160,000 12.50%
due 08/15/14 Value $21,038,208.................... $ 20,625,000 $ 20,625,000
-------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $20,625,000).................................... 20,625,000
- ---------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $351,055,345)................................... $ 448,579,321
OTHER ASSETS LESS LIABILITIES -- 0.32%........................... 1,437,659
-------------
NET ASSETS -- 100%............................................... $ 450,016,980
- ---------------------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
ADR American Depository Receipts.
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 59
<PAGE>
THE ENTERPRISE MONEY MARKET FUND
ENTERPRISE CAPITAL MANAGEMENT, INC.
Atlanta, Georgia
INVESTMENT MANAGEMENT
Enterprise Capital Management is a wholly owned subsidiary of the Mutual Life
Insurance Company of New York, and has managed the Enterprise Money Market Fund
since May 1, 1992.
INVESTMENT OBJECTIVE
The objective of the Enterprise Money Market Fund is the highest possible level
of current income consistent with the preservation of capital and liquidity in
obligations maturing in one year or less from the time of purchase. An
investment in the fund is neither insured nor guaranteed by the U.S. Government
and there can be no assurance that the fund will be able to maintain a stable
net asset value of $1.00. Past performance is no guarantee of future results and
the yield will fluctuate.
INVESTMENT PHILOSOPHY
Enterprise invests primarily in high-quality (A-1/P-1) short-term money market
instruments, principally commercial paper. While interest rate projection is not
a key component of the management style, Enterprise does emphasize purchases
primarily in a maturity range of 60 to 120 days to provide flexibility in
responding to significant changes in the market.
FIRST HALF 1998 PERFORMANCE REVIEW
Early in 1998, the bond market's volatility eased significantly from prior
quarters. Interest rates were largely range-bound during the period. Market
expectations regarding the Federal Reserve's willingness to loosen monetary
policy via a lowering in the Federal Reserve funds rate slowly dissipated.
Investors had hoped the turmoil in the Asian financial and currency markets,
coupled with the expected economic drag from the U.S.'s deteriorating trade
position with Japan and other Asian countries under pressure, might prompt the
Fed to ease. Unfortunately for these bullish market players, the buoyancy of the
U.S. economy kept the Fed on hold and dashed any such hopes.
As the period progressed, the bond market experienced another bout of relatively
strong volatility as positive or negative developments in the efforts to resolve
the difficulties in Asia largely governed the direction of trading. Despite the
renewed turbulence, interest rates remained range-bound (the 30-year bond
trading between 5.57 percent and 6.07 percent). Concerns regarding the Federal
Reserve Board's willingness to alter monetary policy via a change in the
overnight Fed funds rate were put aside as the bond market began to trade in
lockstep with yen/dollar movements during the latter part of the period.
Investors focused on the prospects for the Japanese government and regulatory
apparatus to deal with the potential collapse of Japan's undercapitalized
banking system and the need to pull Japan out of its recession and give a lift
to other ailing Asian economies. Skepticism persisted over whether Japan's
political and bureaucratic establishment has the fortitude and ability to carry
out long-needed reforms. Against this backdrop, the U.S. economy continued to
move forward, although the second quarter seemed to represent a slowdown from
the first quarter's blistering 4.8 percent real Gross Domestic Product pace. The
Asian drag appeared definitely to have stunted second quarter real Gross
Domestic Product growth, probably down to one percent. While there were
certainly soft spots such as trade and capital investment, many pockets of
strength
60 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
remained (housing, construction, and autos, for example). Second quarter monthly
non-farm payroll growth averaged 278,000 versus 205,000 in the first quarter.
Thus, the unemployment rate fell to 4.5 percent at quarter end. The levels for
hours worked, hourly earnings and consumer confidence all remained healthy.
Inflation has been negligible in both the consumer and producer sectors. The
Consumer Price Index increased a manageable 0.3 percent in May and 1.7 percent
year over year. Wholesale prices, as reflected in the Producer Price Index, fell
0.1 percent in June and dropped 0.8 percent year over year. Wage inflation has
picked up but has not yet been passed through in the form of higher prices to
consumers, mainly due to very weak commodities prices (oil, for example) due in
part to the Asian situation. Consequently, while economic measures pointed to a
healthy economy that may have been experiencing somewhat of a pause before
rebounding in the third quarter, mild inflation and uncertainty over Asia's
ability to address its problems left the Fed on hold as far as a change in
interest rates. Nevertheless, given the 30-year Treasury bond trading almost on
top of Fed Funds (target of 5.50 percent), the Fed's tightening bias, and
building wage pressures, something seems likely to give in the second half of
1998 as market expectations may not be fulfilled.
The yield curve flattened significantly later in the period, particularly in the
term area two years and longer. Interest rates on the long bond dropped 0.30
percent from a yield of 5.93 percent at March 31 to 5.63 percent at the end of
the second quarter. The short end also rallied, albeit modestly, as evidenced by
the three month Treasury bill's four basis-point drop in yield from 5.13 percent
at March 31 at 5.09 percent at June 30.
FUTURE INVESTMENT STRATEGY
With the Fed having formally adopted a tightening bias during the first half of
1998, expectations are that the Fed's next move may be an upward adjustment in
the Fed Funds rate. However, market sentiment on the timing of such a move is
that the Fed is at least several months away from carrying out a tightening. The
average maturity of the fund will be extended selectively to capitalize on
opportunities where the fund will be rewarded for duration extension. Such
opportunities became increasingly available toward the end of the second
quarter. The fund, therefore, is being managed to react quickly to the change of
investor expectations. Short maturity investments allow flexibility, while some
longer maturity investments lock in yields.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE FUND MANAGER ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE
MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER
CONDITIONS.
THE ENTERPRISE GROUP OF FUNDS, INC. 61
<PAGE>
MONEY MARKET FUND
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
COMMERCIAL PAPER -- 89.64% AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
Abbott Labs 5.54% due 07/28/98.................... $3,000,000 $ 2,987,535
American Crystal Sugar Years 1&2 5.78% due
07/22/98.......................................... 900,000 896,966
American Express Credit Corporation, 5.50% due
07/01/98.......................................... 300,000 300,000
American Express Credit Corporation, 5.51% due
08/14/98.......................................... 1,800,000 1,787,878
Asset Backed Securities Investment Trust Series
1997 - E, 5.63% due 08/15/98...................... 1,000,000 1,000,000
Asset Backed Securities Investment Trust Series
1997 - I, 5.69% due 10/15/98...................... 2,000,000 2,000,000
Associates Corporation of North America, 5.52% due
07/07/98.......................................... 2,000,000 1,998,160
Associates Corporation of North America, 5.52% due
07/21/98.......................................... 1,600,000 1,595,093
Avco Financial Services Inc. 5.57% due 09/01/98... 4,000,000 3,961,629
Bank of New York 5.51% due 07/16/98............... 2,000,000 1,995,408
Bell Atlantic Financial Services 5.52% due
08/04/98.......................................... 4,500,000 4,476,540
Capital One Funding Corporation 5.71% due
03/01/17.......................................... 2,300,000 2,300,000
Chevron Oil Finance Company 5.50% due 07/27/98.... 1,200,000 1,195,233
Commercial Credit Company 5.51% due 07/06/98...... 4,000,000 3,996,939
Dominion Resources Inc. 5.65% due 07/14/98........ 500,000 498,980
Dupont (E. I.) De Nemours & Company, 5.54% due
07/24/98.......................................... 2,000,000 1,992,921
Enterprise Funding Corporation 5.52% due
08/19/98.......................................... 1,375,000 1,364,669
Enterprise Funding Corporation 5.53% due
07/15/98.......................................... 500,000 498,925
General Electric Capital Corporation, 5.51% due
07/14/98.......................................... 1,000,000 998,010
General Electric Capital Corporation, 5.52% due
07/20/98.......................................... 2,200,000 2,193,591
General Motors Acceptance Corporation, 5.50% due
07/09/98.......................................... 2,500,000 2,496,944
General Motors Acceptance Corporation, 5.54% due
07/24/98.......................................... 1,100,000 1,096,107
Goldman Sachs Group L P 5.653% due 07/15/98....... 4,000,000 4,000,000
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
Houston Industries Finance Company Years 1&2,
5.72% due 07/06/98................................ $ 900,000 $ 899,285
John Hancock Capital Corporation 5.56% due
07/10/98.......................................... 3,200,000 3,195,552
Lehman Brothers Inc. 5.54% due 07/13/98........... 3,500,000 3,493,537
Lehman Brothers Inc. 5.59% due 07/17/98........... 1,000,000 997,516
Merrill Lynch & Company Inc. 5.56% due 07/30/98... 1,000,000 995,521
Metropolitan Life Funding Inc. 5.51% due
07/09/98.......................................... 4,676,000 4,670,275
Paccar Financial Corporation 5.55% due 07/06/98... 3,000,000 2,997,688
Province De Quebec 5.53% due 07/15/98............. 2,600,000 2,594,409
Prudential Funding Corporation 5.51% due
07/16/98.......................................... 1,200,000 1,197,245
Riverwoods Funding Corporation 5.51% due
07/13/98.......................................... 4,600,000 4,591,551
Sears Roebuck Acceptance Corporation, 5.52% due
07/15/98.......................................... 2,750,000 2,744,096
Sears Roebuck Acceptance Corporation, 5.56% due
08/13/98.......................................... 2,000,000 1,986,717
Texaco Inc. 5.50% due 08/14/98.................... 4,500,000 4,469,750
Transamerica Finance Group Inc. 5.50% due
08/25/98.......................................... 3,500,000 3,470,590
Transamerica Financial Canada 5.50% due
07/15/98.......................................... 1,002,000 999,856
Household Finance Corporation 5.50% due
08/10/98.......................................... 4,000,000 3,975,556
-----------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $88,910,672)................................... 88,910,672
- ------------------------------------------------------------------------------
CERTIFICATE OF DEPOSIT -- 5.04%
- ------------------------------------------------------------------------------
Bank Of Nova Scotia 5.74% due 05/07/99............ 3,000,000 2,999,528
National Westminster Bank PLC 5.86% due
08/10/98.......................................... 2,000,000 1,999,805
-----------
TOTAL CERTIFICATE OF DEPOSIT
(IDENTIFIED COST $4,999,333).................................... 4,999,333
- ------------------------------------------------------------------------------
</TABLE>
62 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
MONEY MARKET FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments (Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
SHORT TERM GOVERNMENT AMOUNT VALUE
SECURITIES -- 1.91%
<S> <C> <C>
- ------------------------------------------------------------------------------
Federal Home Loan Bank 5.69% due 10/02/98......... $1,500,000 $ 1,500,443
Federal Home Loan Mortgage Discount Notes, 5.40%
due 07/31/98...................................... 400,000 398,200
-----------
TOTAL SHORT TERM GOVERNMENT SECURITIES
(IDENTIFIED COST $1,898,643).................................... 1,898,643
- ------------------------------------------------------------------------------
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 0.18%
- ------------------------------------------------------------------------------
State Street Bank & Trust Repurchase Agreement,
2.00% due 07/01/98
Collateral: U.S. Treasury Bond $125,000 12% due
8/15/13 Value $190,340............................ $ 180,000 $ 180,000
-----------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $180,000)...................................... 180,000
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $95,988,648)................................... $95,988,648
OTHER ASSETS LESS LIABILITIES -- 3.23%.......................... 3,203,794
-----------
NET ASSETS -- 100%.............................................. $99,192,442
- ------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 63
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
- --------------------------------------------------------------------------------
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH
AND INCOME EQUITY INCOME
GROWTH FUND EQUITY FUND FUND FUND
---------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
ASSETS:
- ----------------------------------------------------------------------------------------------
Investments at value $ 1,099,592,438 $ 10,646,333 $ 44,631,422 $ 143,417,872
- ----------------------------------------------------------------------------------------------
Foreign currency at value
(identified
cost-$1,229,711) -- -- -- --
- ----------------------------------------------------------------------------------------------
Receivable for fund shares
sold 9,757,444 227,092 570,984 519,985
- ----------------------------------------------------------------------------------------------
Receivable for investments
sold 279,282 -- -- --
- ----------------------------------------------------------------------------------------------
Dividends and interest
receivable 737,220 7,927 21,064 188,552
- ----------------------------------------------------------------------------------------------
Due from investment adviser -- 5,895 13,350 7,936
- ----------------------------------------------------------------------------------------------
Cash and other assets 45,025 152,429 35,587 45,718
- ----------------------------------------------------------------------------------------------
Total assets $ 1,110,411,409 $ 11,039,676 $ 45,272,407 $ 144,180,063
- ----------------------------------------------------------------------------------------------
LIABILITIES:
- ----------------------------------------------------------------------------------------------
Payable for fund shares
redeemed 3,870,499 16,989 -- 96,451
- ----------------------------------------------------------------------------------------------
Payable for investments
purchased -- -- 75,889 --
- ----------------------------------------------------------------------------------------------
Dividends and distributions
payable -- -- -- 35,743
- ----------------------------------------------------------------------------------------------
Investment advisory fee
payable 642,213 6,097 26,032 87,832
- ----------------------------------------------------------------------------------------------
Distribution fee payable 524,392 6,024 15,189 67,190
- ----------------------------------------------------------------------------------------------
Forward currency contracts
(net), payable -- -- -- --
- ----------------------------------------------------------------------------------------------
Other accrued expenses 344,777 56,921 22,193 70,030
- ----------------------------------------------------------------------------------------------
Total liabilities $ 5,381,881 $ 86,031 $ 139,303 $ 357,246
- ----------------------------------------------------------------------------------------------
NET ASSETS $ 1,105,029,528 $ 10,953,645 $ 45,133,104 $ 143,822,817
- ----------------------------------------------------------------------------------------------
ANALYSIS OF NET ASSETS
- ----------------------------------------------------------------------------------------------
Accumulated paid-in capital 775,325,292 9,972,762 36,109,914 99,434,107
- ----------------------------------------------------------------------------------------------
Undistributed net investment
income (loss) (3,019,491) 5,311 101,176 2,247
- ----------------------------------------------------------------------------------------------
Accumulated net realized gain
(loss) on investments 44,491,175 140,261 484,000 8,800,643
- ----------------------------------------------------------------------------------------------
Accumulated net realized gain
(loss) on futures -- -- -- --
- ----------------------------------------------------------------------------------------------
Unrealized appreciation
(depreciation) of investments
and foreign currencies
denominated amounts 288,232,552 835,311 8,438,014 35,585,820
- ----------------------------------------------------------------------------------------------
Net assets $ 1,105,029,528 $ 10,953,645 $ 45,133,104 $ 143,822,817
- ----------------------------------------------------------------------------------------------
CLASS A: NET ASSETS $ 659,057,529 $ 5,115,506 $ 11,372,869 $ 110,637,278
- ----------------------------------------------------------------------------------------------
Shares outstanding 32,454,285 773,625 404,545 3,875,704
- ----------------------------------------------------------------------------------------------
Net asset value and redemption
price per share $20.31 $6.61 $28.11 $28.55
- ----------------------------------------------------------------------------------------------
Sales charge per share $1.01 $0.33 $1.40 $1.42
- ----------------------------------------------------------------------------------------------
Maximum offering price per
share, including sales charge
of 4.75% $21.32 $6.94 $29.51 $29.97
- ----------------------------------------------------------------------------------------------
CLASS B: NET ASSETS $ 305,519,991 $ 4,959,033 $ 12,778,932 $ 28,781,277
- ----------------------------------------------------------------------------------------------
Shares outstanding 15,315,933 753,912 456,499 1,018,516
- ----------------------------------------------------------------------------------------------
Net asset value and offering
price per share $19.95 $6.58 $27.99 $28.26
- ----------------------------------------------------------------------------------------------
CLASS C: NET ASSETS $ 78,889,621 $ 879,106 $ 2,953,289 $ 4,288,238
- ----------------------------------------------------------------------------------------------
Shares outstanding 3,908,852 133,587 105,512 151,051
- ----------------------------------------------------------------------------------------------
Net asset value and offering
price per share $20.18 $6.58 $27.99 $28.39
- ----------------------------------------------------------------------------------------------
CLASS Y: NET ASSETS $ 61,562,387 $ -- $ 18,028,014 $ 116,024
- ----------------------------------------------------------------------------------------------
Shares outstanding 3,005,435 -- 638,613 4,065
- ----------------------------------------------------------------------------------------------
Net asset value, offering and
redemption price per share $20.48 $-- $28.23 $28.54
- ----------------------------------------------------------------------------------------------
INVESTMENTS AT COST $ 811,359,886 $ 9,811,022 $ 36,193,408 $ 107,832,052
- ----------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
64 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
<TABLE>
<CAPTION>
CAPITAL SMALL SMALL GOVERNMENT
APPRECIATION COMPANY COMPANY VALUE INTERNATIONAL SECURITIES HIGH-YIELD
FUND GROWTH FUND FUND GROWTH FUND FUND BOND FUND
-------------- ------------- -------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------------------------------------------------------
Investments at value $ 135,215,419 $ 27,709,767 $ 138,973,455 $ 71,785,499 $ 94,419,184 $ 106,864,965
- ---------------------------------------------------------------------------------------------------------------------------
Foreign currency at value
(identified
cost-$1,229,711) -- -- -- 1,224,339 -- --
- ---------------------------------------------------------------------------------------------------------------------------
Receivable for fund shares
sold 522,314 145,741 2,078,150 199,914 190,847 820,386
- ---------------------------------------------------------------------------------------------------------------------------
Receivable for investments
sold -- 40,394 38,552 952,209 -- --
- ---------------------------------------------------------------------------------------------------------------------------
Dividends and interest
receivable 40,080 485 55,892 266,850 574,600 1,926,217
- ---------------------------------------------------------------------------------------------------------------------------
Due from investment adviser -- 18,157 24,276 7,349 7,898 10,753
- ---------------------------------------------------------------------------------------------------------------------------
Cash and other assets 72,337 24,468 (30,261) 46,436 21,386 24,353
- ---------------------------------------------------------------------------------------------------------------------------
Total assets $ 135,850,150 $ 27,939,012 $ 141,140,064 $ 74,482,596 $ 95,213,915 $ 109,646,674
- ---------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
- ---------------------------------------------------------------------------------------------------------------------------
Payable for fund shares
redeemed 94,408 243,644 65,911 124,469 31,825 28,277
- ---------------------------------------------------------------------------------------------------------------------------
Payable for investments
purchased -- 285,641 4,411,517 1,275,240 -- 718,112
- ---------------------------------------------------------------------------------------------------------------------------
Dividends and distributions
payable -- -- -- -- 77,788 131,162
- ---------------------------------------------------------------------------------------------------------------------------
Investment advisory fee
payable 80,309 21,674 78,865 49,462 46,681 52,442
- ---------------------------------------------------------------------------------------------------------------------------
Distribution fee payable 53,094 9,201 72,555 28,435 40,441 53,966
- ---------------------------------------------------------------------------------------------------------------------------
Forward currency contracts
(net), payable -- -- -- 461,034 -- --
- ---------------------------------------------------------------------------------------------------------------------------
Other accrued expenses 81,877 20,110 58,025 82,187 37,148 52,538
- ---------------------------------------------------------------------------------------------------------------------------
Total liabilities $ 309,688 $ 580,270 $ 4,686,873 $ 2,020,827 $ 233,883 $ 1,036,497
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 135,540,462 $ 27,358,742 $ 136,453,191 $ 72,461,769 $ 94,980,032 $ 108,610,177
- ---------------------------------------------------------------------------------------------------------------------------
ANALYSIS OF NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------------
Accumulated paid-in capital 69,318,434 25,541,403 117,146,959 62,279,724 98,689,195 105,354,891
- ---------------------------------------------------------------------------------------------------------------------------
Undistributed net investment
income (loss) (667,666) (194,895) (249,134) 370,023 -- --
- ---------------------------------------------------------------------------------------------------------------------------
Accumulated net realized gain
(loss) on investments 22,245,448 (1,036,273) 2,879,466 1,665,979 (3,929,644) 1,418,578
- ---------------------------------------------------------------------------------------------------------------------------
Accumulated net realized gain
(loss) on futures -- -- -- -- -- (62,305)
- ---------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation
(depreciation) of investments
and foreign currencies
denominated amounts 44,644,246 3,048,507 16,675,900 8,146,043 220,481 1,899,013
- ---------------------------------------------------------------------------------------------------------------------------
Net assets $ 135,540,462 $ 27,358,742 $ 136,453,191 $ 72,461,769 $ 94,980,032 $ 108,610,177
- ---------------------------------------------------------------------------------------------------------------------------
CLASS A: NET ASSETS $ 123,511,005 $ 8,232,302 $ 77,041,403 $ 42,876,962 $ 68,270,469 $ 73,015,635
- ---------------------------------------------------------------------------------------------------------------------------
Shares outstanding 2,921,518 352,570 8,920,128 2,271,283 5,645,353 5,873,436
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value and redemption
price per share $42.28 $23.35 $8.64 $18.88 $12.09 $12.43
- ---------------------------------------------------------------------------------------------------------------------------
Sales charge per share $2.11 $1.16 $0.43 $0.94 $0.60 $0.62
- ---------------------------------------------------------------------------------------------------------------------------
Maximum offering price per
share, including sales charge
of 4.75% $44.39 $24.51 $9.07 $19.82 $12.69 $13.05
- ---------------------------------------------------------------------------------------------------------------------------
CLASS B: NET ASSETS $ 11,397,584 $ 6,251,302 $ 50,688,191 $ 14,244,437 $ 17,397,073 $ 30,424,005
- ---------------------------------------------------------------------------------------------------------------------------
Shares outstanding 275,340 269,144 5,978,347 764,880 1,438,778 2,447,424
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value and offering
price per share $41.39 $23.23 $8.48 $18.62 $12.09 $12.43
- ---------------------------------------------------------------------------------------------------------------------------
CLASS C: NET ASSETS $ 431,094 $ 1,985,249 $ 8,480,394 $ 2,261,404 $ 1,427,075 $ 4,116,294
- ---------------------------------------------------------------------------------------------------------------------------
Shares outstanding 10,256 85,482 986,741 120,515 118,006 331,121
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value and offering
price per share $42.03 $23.22 $8.59 $18.76 $12.09 $12.43
- ---------------------------------------------------------------------------------------------------------------------------
CLASS Y: NET ASSETS $ 200,779 $ 10,889,889 $ 243,203 $ 13,078,966 $ 7,885,415 $ 1,054,243
- ---------------------------------------------------------------------------------------------------------------------------
Shares outstanding 4,747 464,543 27,864 691,368 652,248 84,809
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, offering and
redemption price per share $42.30 $23.44 $8.73 $18.92 $12.09 $12.43
- ---------------------------------------------------------------------------------------------------------------------------
INVESTMENTS AT COST $ 90,571,173 $ 24,661,260 $ 122,297,555 $ 63,169,457 $ 94,198,703 $ 104,965,952
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
TAX-EXEMPT MONEY MARKET
INCOME FUND MANAGED FUND FUND
------------- -------------- --------------
<S> <C> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------------------
Investments at value $ 27,062,108 $ 448,579,321 $ 95,988,648
- ------------------------------------------------------------------------------------------------------------
Foreign currency at value
(identified
cost-$1,229,711) -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Receivable for fund shares
sold 4,963 1,911,375 4,136,579
- ---------------------------------------------------------------------------------------------------------------------------
Receivable for investments
sold -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Dividends and interest
receivable 450,012 237,649 227,860
- ---------------------------------------------------------------------------------------------------------------------------
Due from investment adviser (940) -- --
- ---------------------------------------------------------------------------------------------------------------------------
Cash and other assets 77,890 267,320 71,427
- ---------------------------------------------------------------------------------------------------------------------------
Total assets $ 27,594,033 $ 450,995,665 $ 100,424,514
- ---------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
- ---------------------------------------------------------------------------------------------------------------------------
Payable for fund shares
redeemed 111,833 338,251 1,127,375
- ---------------------------------------------------------------------------------------------------------------------------
Payable for investments
purchased -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Dividends and distributions
payable 23,973 -- 15,094
- ---------------------------------------------------------------------------------------------------------------------------
Investment advisory fee
payable 11,331 270,338 27,851
- ---------------------------------------------------------------------------------------------------------------------------
Distribution fee payable 11,821 198,362 --
- ---------------------------------------------------------------------------------------------------------------------------
Forward currency contracts
(net), payable -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Other accrued expenses 22,218 171,734 61,752
- ---------------------------------------------------------------------------------------------------------------------------
Total liabilities $ 181,176 $ 978,685 $ 1,232,072
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 27,412,857 $ 450,016,980 $ 99,192,442
- ---------------------------------------------------------------------------------------------------------------------------
ANALYSIS OF NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------------
Accumulated paid-in capital 25,473,918 334,197,238 99,192,442
- ---------------------------------------------------------------------------------------------------------------------------
Undistributed net investment
income (loss) -- 993,620 --
- ---------------------------------------------------------------------------------------------------------------------------
Accumulated net realized gain
(loss) on investments 613,194 17,302,146 --
- ---------------------------------------------------------------------------------------------------------------------------
Accumulated net realized gain
(loss) on futures -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation
(depreciation) of investments
and foreign currencies
denominated amounts 1,325,745 97,523,976 --
- ---------------------------------------------------------------------------------------------------------------------------
Net assets $ 27,412,857 $ 450,016,980 $ 99,192,442
- ---------------------------------------------------------------------------------------------------------------------------
CLASS A: NET ASSETS $ 23,698,643 $ 188,498,864 $ 87,338,745
- ---------------------------------------------------------------------------------------------------------------------------
Shares outstanding 1,688,577 18,225,196 87,338,745
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value and redemption
price per share $14.03 $10.34 $1.00
- ---------------------------------------------------------------------------------------------------------------------------
Sales charge per share $0.70 $0.52 $--
- ---------------------------------------------------------------------------------------------------------------------------
Maximum offering price per
share, including sales charge
of 4.75% $14.73 $10.86 $1.00
- ---------------------------------------------------------------------------------------------------------------------------
CLASS B: NET ASSETS $ 3,299,507 $ 154,327,709 $ 6,609,027
- ---------------------------------------------------------------------------------------------------------------------------
Shares outstanding 235,083 15,071,240 6,609,027
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value and offering
price per share $14.04 $10.24 $1.00
- ---------------------------------------------------------------------------------------------------------------------------
CLASS C: NET ASSETS $ 414,707 $ 9,609,304 $ 2,552,742
- ---------------------------------------------------------------------------------------------------------------------------
Shares outstanding 29,549 936,021 2,552,742
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value and offering
price per share $14.03 $10.27 $1.00
- ---------------------------------------------------------------------------------------------------------------------------
CLASS Y: NET ASSETS $ -- $ 97,581,103 $ 2,691,928
- ---------------------------------------------------------------------------------------------------------------------------
Shares outstanding -- 9,392,691 2,691,928
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, offering and
redemption price per share $-- $10.39 $1.00
- ---------------------------------------------------------------------------------------------------------------------------
INVESTMENTS AT COST $ 25,736,363 $ 351,055,345 $ 95,988,648
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 65
<PAGE>
STATEMENTS OF OPERATIONS (UNAUDITED)
- --------------------------------------------------------------------------------
Six Months Ended June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH EQUITY CAPITAL
EQUITY AND INCOME INCOME APPRECIATION
GROWTH FUND FUND FUND FUND FUND
----------- -------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
- -----------------------------------------------------------------------------------------------------
Dividends $ 2,981,336(1) $ 39,274 $ 177,987(1) $ 1,411,109(1) $ 193,748(1)
- -----------------------------------------------------------------------------------------------------
Interest 1,137,739 33,454 152,831 387,560 70,643
- -----------------------------------------------------------------------------------------------------
Total 4,119,075 72,728 330,818 1,798,669 264,391
- -----------------------------------------------------------------------------------------------------
EXPENSES:
- -----------------------------------------------------------------------------------------------------
Management fees 3,285,107 27,193 123,000 499,875 469,623
- -----------------------------------------------------------------------------------------------------
Distribution fees, Class A 1,227,791 8,685 16,832 238,639 260,739
- -----------------------------------------------------------------------------------------------------
Distribution fees, Class B 1,141,880 14,442 33,561 121,053 45,464
- -----------------------------------------------------------------------------------------------------
Distribution fees, Class C 244,312 2,515 7,642 14,654 1,128
- -----------------------------------------------------------------------------------------------------
Transfer agent fees 741,487 26,874 55,065 138,430 99,947
- -----------------------------------------------------------------------------------------------------
Custodian and accounting
fees 68,514 11,503 20,230 30,954 24,342
- -----------------------------------------------------------------------------------------------------
Audit and legal fees 22,929 3,325 12,244 6,742 7,768
- -----------------------------------------------------------------------------------------------------
Reports to shareholders 147,934 (5,587) 2,833 24,638 16,142
- -----------------------------------------------------------------------------------------------------
Registration fees 57,054 3,731 17,783 7,817 5,653
- -----------------------------------------------------------------------------------------------------
Directors' fees 1,880 1,876 2,220 1,880 1,880
- -----------------------------------------------------------------------------------------------------
Other expenses 195,335 2,213 10,916 15,723 5,252
- -----------------------------------------------------------------------------------------------------
Total expenses 7,134,223 96,770 302,326 1,100,405 937,938
- -----------------------------------------------------------------------------------------------------
Less: Expense
reimbursement -- (29,432) (70,474) (26,276) --
- -----------------------------------------------------------------------------------------------------
Total expenses, net of
reimbursement 7,134,223 67,338 231,852 1,074,129 937,938
- -----------------------------------------------------------------------------------------------------
Net investment income (loss) (3,015,148) 5,390 98,966 724,540 (673,547)
- -----------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
- -----------------------------------------------------------------------------------------------------
Net realized gain (loss) on
security transactions 39,624,082 167,175 478,957 6,991,808 21,673,635
- -----------------------------------------------------------------------------------------------------
Net realized gain on foreign
currency transactions -- -- -- -- --
- -----------------------------------------------------------------------------------------------------
Net realized loss from
futures transactions -- -- -- -- --
- -----------------------------------------------------------------------------------------------------
Net change in unrealized
gain (loss) of investments 121,546,305 460,675 2,448,681 2,661,708 992,678
- -----------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS 161,170,387 627,850 2,927,638 9,653,516 22,666,313
- -----------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS $158,155,239 $633,240 $3,026,604 $10,378,056 $21,992,766
- -----------------------------------------------------------------------------------------------------
</TABLE>
(1) Net of foreign taxes withheld of $35,922 for Growth, $1,617 for Growth and
Income, $5,319 for Equity Income, $2,654 for Capital Appreciation, $121,438
for International Growth, $1,053 for High-Yield Bond, and $11,434 for
Managed.
See notes to financial statements.
66 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
<TABLE>
<CAPTION>
SMALL
COMPANY SMALL GOVERNMENT
GROWTH COMPANY INTERNATIONAL SECURITIES HIGH-YIELD TAX-EXEMPT MANAGED
FUND VALUE FUND GROWTH FUND FUND BOND FUND INCOME FUND FUND
--------- ---------- ------------ ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------------------------------------
Dividends $ 13,048 $ 359,753 $ 885,641(1) $ -- $ 11,250(1) $ -- $ 2,106,991(1)
- ---------------------------------------------------------------------------------------------------------------------------
Interest 12,680 403,200 108,908 3,229,989 4,273,616 739,397 2,024,110
- ---------------------------------------------------------------------------------------------------------------------------
Total 25,728 762,953 994,549 3,229,989 4,284,866 739,397 4,131,101
- ---------------------------------------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------------------------------------------
Management fees 125,490 383,590 282,203 273,070 294,125 66,847 1,498,548
- ---------------------------------------------------------------------------------------------------------------------------
Distribution fees, Class A 15,403 138,490 91,855 153,033 156,862 52,759 390,717
- ---------------------------------------------------------------------------------------------------------------------------
Distribution fees, Class B 22,607 176,184 59,179 71,614 124,524 15,013 655,365
- ---------------------------------------------------------------------------------------------------------------------------
Distribution fees, Class C 6,676 26,635 8,249 5,339 12,600 1,439 31,920
- ---------------------------------------------------------------------------------------------------------------------------
Transfer agent fees 51,676 211,033 101,358 71,482 99,521 24,022 384,195
- ---------------------------------------------------------------------------------------------------------------------------
Custodian and accounting
fees 29,676 33,446 107,249 25,790 37,895 19,254 42,751
- ---------------------------------------------------------------------------------------------------------------------------
Audit and legal fees 12,252 3,167 6,083 5,999 5,235 1,308 17,019
- ---------------------------------------------------------------------------------------------------------------------------
Reports to shareholders 5,678 25,830 16,986 11,507 12,512 (7,931 ) 67,185
- ---------------------------------------------------------------------------------------------------------------------------
Registration fees 17,783 8,923 6,324 5,837 6,511 7,137 8,308
- ---------------------------------------------------------------------------------------------------------------------------
Directors' fees 2,220 1,880 1,880 1,880 1,880 1,880 1,880
- ---------------------------------------------------------------------------------------------------------------------------
Other expenses 6,945 34,445 6,201 8,212 14,997 1,448 36,760
- ---------------------------------------------------------------------------------------------------------------------------
Total expenses 296,406 1,043,623 687,567 633,763 766,662 183,176 3,134,648
- ---------------------------------------------------------------------------------------------------------------------------
Less: Expense
reimbursement (76,034) (37,026) (13,678) (16,928) (56,000) (27,064 ) --
- ---------------------------------------------------------------------------------------------------------------------------
Total expenses, net of
reimbursement 220,372 1,006,597 673,889 616,835 710,662 156,112 3,134,648
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (194,644) (243,644) 320,660 2,613,154 3,574,204 583,285 996,453
- ---------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
- ---------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
security transactions (812,955) 2,383,804 3,372,498 135,988 1,195,472 613,175 16,925,919
- ---------------------------------------------------------------------------------------------------------------------------
Net realized gain on foreign
currency transactions -- -- (1,127,520) -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Net realized loss from
futures transactions -- -- -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Net change in unrealized
gain (loss) of investments 777,145 7,784,537 5,139,817 349,173 (742,786) (434,049 ) 24,733,989
- ---------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS (35,810) 10,168,341 7,384,795 485,161 452,686 179,126 41,659,908
- ---------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS $(230,454) $9,924,697 $ 7,705,455 $3,098,315 $4,026,890 $ 762,411 $42,656,361
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
MONEY
MARKET
FUND
----------
<S> <C>
INVESTMENT INCOME:
- -----------------------------------------------------
Dividends $ --
- ----------------------------------------------------------------
Interest 2,543,381
- ---------------------------------------------------------------------------
Total 2,543,381
- --------------------------------------------------------------------------------------
EXPENSES:
- -------------------------------------------------------------------------------------------------
Management fees 157,519
- ------------------------------------------------------------------------------------------------------------
Distribution fees, Class A --
- -----------------------------------------------------------------------------------------------------------------------
Distribution fees, Class B --
- ---------------------------------------------------------------------------------------------------------------------------
Distribution fees, Class C --
- ---------------------------------------------------------------------------------------------------------------------------
Transfer agent fees 46,603
- ---------------------------------------------------------------------------------------------------------------------------
Custodian and accounting
fees 21,147
- ---------------------------------------------------------------------------------------------------------------------------
Audit and legal fees 3,608
- ---------------------------------------------------------------------------------------------------------------------------
Reports to shareholders 13,601
- ---------------------------------------------------------------------------------------------------------------------------
Registration fees 6,026
- ---------------------------------------------------------------------------------------------------------------------------
Directors' fees 1,880
- ---------------------------------------------------------------------------------------------------------------------------
Other expenses 54,523
- ---------------------------------------------------------------------------------------------------------------------------
Total expenses 304,907
- ---------------------------------------------------------------------------------------------------------------------------
Less: Expense
reimbursement --
- ---------------------------------------------------------------------------------------------------------------------------
Total expenses, net of
reimbursement 304,907
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 2,238,473
- ---------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
- ---------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
security transactions --
- ---------------------------------------------------------------------------------------------------------------------------
Net realized gain on foreign
currency transactions --
- ---------------------------------------------------------------------------------------------------------------------------
Net realized loss from
futures transactions --
- ---------------------------------------------------------------------------------------------------------------------------
Net change in unrealized
gain (loss) of investments --
- ---------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS --
- ---------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS $2,238,473
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 67
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH FUND EQUITY FUND GROWTH AND INCOME FUND
----------------------------- ---------------------------- ---------------------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED) FOR THE PERIOD
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED SIX MONTHS OCTOBER 1, 1997
ENDED DECEMBER 31, ENDED DECEMBER 31, ENDED THROUGH
JUNE 30, 1998 1997 JUNE 30, 1998 1997 JUNE 30, 1998 DECEMBER 31, 1997
-------------- ------------- ------------- ------------- ------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ (3,015,148) $ (2,912,665) $ 5,390 $ 2,479 $ 98,966 $ 40,924
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
investments 39,624,082 18,241,515 167,175 60,709 478,957 69,380
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
futures and options -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized
gain (loss) of investments 121,546,305 89,190,233 460,675 374,636 2,448,681 (22,006 )
- ------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net
assets resulting from
operations 158,155,239 104,519,083 633,240 437,824 3,026,604 88,298
- ------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM:
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
A -- -- -- (2,460 ) -- (18,371 )
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
B -- -- -- -- -- (11,694 )
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
C -- -- -- (208 ) -- (2,192 )
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
Y -- -- -- -- -- (69,364 )
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class A -- (8,614,445) -- (52,758 ) -- (71,049 )
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class B -- (3,431,799) -- (30,175 ) -- (57,595 )
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class C -- (493,612) -- (4,690 ) -- (9,938 )
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class Y -- (906,323) -- -- -- (273,727 )
- ------------------------------------------------------------------------------------------------------------------------------
Total dividends and
distributions to shareholders -- (13,446,179) -- (90,291 ) -- (513,930 )
- ------------------------------------------------------------------------------------------------------------------------------
FROM CAPITAL SHARE
TRANSACTIONS:
- ------------------------------------------------------------------------------------------------------------------------------
CLASS A
- ------------------------------------------------------------------------------------------------------------------------------
Shares sold 234,607,198 260,192,148 1,865,520 2,924,258 7,433,308 3,059,535
- ------------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions -- 8,246,727 -- 55,088 -- 86,011
- ------------------------------------------------------------------------------------------------------------------------------
Shares redeemed (99,207,774) (108,981,528) (314,349 ) (59,944 ) (714,311 ) (160,185 )
- ------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class A 135,399,424 159,457,347 1,551,171 2,919,402 6,718,997 2,985,361
- ------------------------------------------------------------------------------------------------------------------------------
CLASS B
- ------------------------------------------------------------------------------------------------------------------------------
Shares sold 107,294,170 117,131,669 3,001,629 1,782,097 9,626,481 2,266,006
- ------------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions -- 3,282,897 -- 27,982 -- 66,791
- ------------------------------------------------------------------------------------------------------------------------------
Shares redeemed (9,158,612) (7,865,656) (94,132 ) (56,145 ) (569,240 ) (8,694 )
- ------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class B 98,135,558 112,548,910 2,907,497 1,753,934 9,057,241 2,324,103
- ------------------------------------------------------------------------------------------------------------------------------
CLASS C
- ------------------------------------------------------------------------------------------------------------------------------
Shares sold 45,839,102 28,408,390 575,677 306,566 2,337,715 459,347
- ------------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions -- 478,133 -- 4,380 -- 11,908
- ------------------------------------------------------------------------------------------------------------------------------
Shares redeemed (2,034,202) (2,696,749) (12,441 ) (33,314 ) (43,158 ) (2,071 )
- ------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class C 43,804,900 26,189,774 563,236 277,632 2,294,557 469,184
- ------------------------------------------------------------------------------------------------------------------------------
CLASS Y
- ------------------------------------------------------------------------------------------------------------------------------
Shares sold 11,997,477 44,900,757 -- -- 1,708,200 382,747
- ------------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions -- 480,824 -- -- -- 341,911
- ------------------------------------------------------------------------------------------------------------------------------
Shares redeemed (4,872,018) (7,816,150) -- -- (1,064,379 ) (313,478 )
- ------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class Y 7,125,459 37,565,431 -- -- 643,821 411,180
- ------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets resulting from
capital share transactions 284,465,341 335,761,462 5,021,904 4,950,968 18,714,616 6,189,828
- ------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets 442,620,580 426,834,366 5,655,144 5,298,501 21,741,220 5,764,196
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------------------------------------------------------------------------------
Beginning of period $ 662,408,948 $ 235,574,582 $ 5,298,501 $ -- $ 23,391,884 $ 17,627,688
- ------------------------------------------------------------------------------------------------------------------------------
End of period $1,105,029,528 $ 662,408,948 $ 10,953,645 $ 5,298,501 $ 45,133,104 $ 23,391,884
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
YEAR ENDED
SEPTEMBER 30,
1997
-------------
<S> <C>
FROM OPERATIONS:
Net investment income (loss) $ 105,611
- -----------------------------------------------------------
Net realized gain (loss) on
investments 348,420
- -------------------------------------------------------------------------
Net realized gain (loss) on
futures and options --
- ---------------------------------------------------------------------------------------
Net change in unrealized
gain (loss) of investments 3,204,139
- -----------------------------------------------------------------------------------------------------
Increase (decrease) in net
assets resulting from
operations 3,658,170
- -------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM:
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
A --
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
B --
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
C --
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
Y (93,534 )
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class A --
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class B --
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class C --
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class Y (338,162 )
- ------------------------------------------------------------------------------------------------------------------------------
Total dividends and
distributions to shareholders (431,696 )
- ------------------------------------------------------------------------------------------------------------------------------
FROM CAPITAL SHARE
TRANSACTIONS:
- ------------------------------------------------------------------------------------------------------------------------------
CLASS A
- ------------------------------------------------------------------------------------------------------------------------------
Shares sold 1,088,636
- ------------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions --
- ------------------------------------------------------------------------------------------------------------------------------
Shares redeemed --
- ------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class A 1,088,636
- ------------------------------------------------------------------------------------------------------------------------------
CLASS B
- ------------------------------------------------------------------------------------------------------------------------------
Shares sold 977,832
- ------------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions --
- ------------------------------------------------------------------------------------------------------------------------------
Shares redeemed (30 )
- ------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class B 977,802
- ------------------------------------------------------------------------------------------------------------------------------
CLASS C
- ------------------------------------------------------------------------------------------------------------------------------
Shares sold 97,483
- ------------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions --
- ------------------------------------------------------------------------------------------------------------------------------
Shares redeemed (75 )
- ------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class C 97,408
- ------------------------------------------------------------------------------------------------------------------------------
CLASS Y
- ------------------------------------------------------------------------------------------------------------------------------
Shares sold 4,708,756
- ------------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 431,185
- ------------------------------------------------------------------------------------------------------------------------------
Shares redeemed (1,767,589 )
- ------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class Y 3,372,352
- ------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets resulting from
capital share transactions 5,536,198
- ------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets 8,762,672
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------------------------------------------------------------------------------
Beginning of period $ 8,865,016
- ------------------------------------------------------------------------------------------------------------------------------
End of period $ 17,627,688
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
68 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
<TABLE>
<CAPTION>
EQUITY INCOME FUND CAPITAL APPRECIATION FUND SMALL COMPANY GROWTH FUND
---------------------------- ---------------------------- ---------------------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED) FOR THE PERIOD
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED SIX MONTHS OCTOBER 1, 1997
ENDED DECEMBER 31, ENDED DECEMBER 31, ENDED JUNE THROUGH
JUNE 30, 1998 1997 JUNE 30, 1998 1997 30, 1998 DECEMBER 31, 1997
------------- ------------- ------------- ------------- ------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ 724,540 $ 1,254,944 $ (673,547) $ (1,308,307) $ (194,644) $ (68,233)
- -----------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
investments 6,991,808 9,306,031 21,673,635 15,731,336 (812,955) (158,828)
- -----------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
futures and options -- -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
Net change in unrealized
gain (loss) of investments 2,661,708 12,427,285 992,678 7,731,763 777,145 (1,916,083 )
- -----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net
assets resulting from
operations 10,378,056 22,988,260 21,992,766 22,154,792 (230,454 ) (2,143,144 )
- -----------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM:
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
A (648,910 ) (1,072,290) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
B (114,721 ) (119,901) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
C (19,226 ) (10,306) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
Y (923 ) -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class A -- (6,834,121) -- (15,427,334) -- (111,554 )
- -----------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class B -- (1,334,999) -- (1,092,295) -- (64,497 )
- -----------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class C -- (130,982) -- (17,309) -- (18,302 )
- -----------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class Y -- -- -- -- -- (310,189 )
- -----------------------------------------------------------------------------------------------------------------------------
Total dividends and
distributions to shareholders (783,780 ) (9,502,599) -- (16,536,938) -- (504,542 )
- -----------------------------------------------------------------------------------------------------------------------------
FROM CAPITAL SHARE
TRANSACTIONS:
- -----------------------------------------------------------------------------------------------------------------------------
CLASS A
- -----------------------------------------------------------------------------------------------------------------------------
Shares sold 10,896,780 17,272,166 10,401,874 8,448,481 4,599,736 3,329,056
- -----------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 619,366 7,703,613 -- 14,967,124 -- 109,857
- -----------------------------------------------------------------------------------------------------------------------------
Shares redeemed (6,715,265 ) (12,389,236) (19,990,663 ) (31,521,891) (1,085,965 ) (177,096 )
- -----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class A 4,800,881 12,586,543 (9,588,789 ) (8,106,286) 3,513,771 3,261,817
- -----------------------------------------------------------------------------------------------------------------------------
CLASS B
- -----------------------------------------------------------------------------------------------------------------------------
Shares sold 9,973,542 12,399,165 2,715,914 2,827,251 3,976,481 2,166,644
- -----------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 106,764 1,368,111 -- 1,059,795 -- 61,101
- -----------------------------------------------------------------------------------------------------------------------------
Shares redeemed (1,901,334 ) (1,216,943) (757,409 ) (1,112,978) (444,064 ) (230,849 )
- -----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class B 8,178,972 12,550,333 1,958,505 2,774,068 3,532,417 1,996,896
- -----------------------------------------------------------------------------------------------------------------------------
CLASS C
- -----------------------------------------------------------------------------------------------------------------------------
Shares sold 2,455,706 1,846,156 267,131 124,776 1,274,903 645,548
- -----------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 18,027 124,710 -- 16,626 -- 17,752
- -----------------------------------------------------------------------------------------------------------------------------
Shares redeemed (176,724 ) (11,463) (4,268 ) (1,512) (61,224 ) (26,689 )
- -----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class C 2,297,009 1,959,403 262,863 139,890 1,213,679 636,611
- -----------------------------------------------------------------------------------------------------------------------------
CLASS Y
- -----------------------------------------------------------------------------------------------------------------------------
Shares sold 107,894 -- 189,572 -- 920,279 384,008
- -----------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 65 -- -- -- -- 301,209
- -----------------------------------------------------------------------------------------------------------------------------
Shares redeemed -- -- -- -- (3,629,033 ) (651,790 )
- -----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class Y 107,959 -- 189,572 -- (2,708,754 ) 33,427
- -----------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets resulting from
capital share transactions 15,384,821 27,096,279 (7,177,849 ) (5,192,328) 5,551,113 5,928,751
- -----------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets 24,979,097 40,581,940 14,814,917 425,526 5,320,659 3,281,065
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------------------------------------------------------------------------
Beginning of period $118,843,720 $ 78,261,780 $120,725,545 $ 120,300,019 $ 22,038,083 $ 18,757,018
- -----------------------------------------------------------------------------------------------------------------------------
End of period $143,822,817 $ 118,843,720 $135,540,462 $ 120,725,545 $ 27,358,742 $ 22,038,083
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SMALL COMPANY VALUE FUND
----------------------------
(UNAUDITED)
YEAR ENDED SIX MONTHS YEAR ENDED
SEPTEMBER 30, ENDED DECEMBER 31,
1997 JUNE 30, 1998 1997
------------- ------------- -------------
<S> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ (150,864) $ (243,644) $ (36,646)
- -----------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
investments 523,987 2,383,804 4,633,929
- -----------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
futures and options -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
Net change in unrealized
gain (loss) of investments 2,373,082 7,784,537 7,400,618
- -----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net
assets resulting from
operations 2,746,205 9,924,697 11,997,901
- -----------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM:
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
A -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
B -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
C -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
Y -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class A -- -- (2,902,903 )
- -----------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class B -- -- (1,418,458 )
- -----------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class C -- -- (172,913 )
- -----------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class Y (665,013 ) -- (7,578 )
- -----------------------------------------------------------------------------------------------------------------------------
Total dividends and
distributions to shareholders (665,013 ) -- (4,501,852 )
- -----------------------------------------------------------------------------------------------------------------------------
FROM CAPITAL SHARE
TRANSACTIONS:
- -----------------------------------------------------------------------------------------------------------------------------
CLASS A
- -----------------------------------------------------------------------------------------------------------------------------
Shares sold 1,977,903 41,528,507 24,183,248
- -----------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions -- -- 2,817,488
- -----------------------------------------------------------------------------------------------------------------------------
Shares redeemed (23,177 ) (15,923,247 ) (5,179,631 )
- -----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class A 1,954,726 25,605,260 21,821,105
- -----------------------------------------------------------------------------------------------------------------------------
CLASS B
- -----------------------------------------------------------------------------------------------------------------------------
Shares sold 1,059,895 28,289,831 17,761,763
- -----------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions -- -- 1,337,536
- -----------------------------------------------------------------------------------------------------------------------------
Shares redeemed (23,506 ) (2,885,932 ) (912,538 )
- -----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class B 1,036,389 25,403,899 18,186,761
- -----------------------------------------------------------------------------------------------------------------------------
CLASS C
- -----------------------------------------------------------------------------------------------------------------------------
Shares sold 189,019 5,555,131 2,602,460
- -----------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions -- -- 158,448
- -----------------------------------------------------------------------------------------------------------------------------
Shares redeemed (170 ) (270,782 ) (49,665 )
- -----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class C 188,849 5,284,349 2,711,243
- -----------------------------------------------------------------------------------------------------------------------------
CLASS Y
- -----------------------------------------------------------------------------------------------------------------------------
Shares sold 10,548,168 122,072 133,172
- -----------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 656,535 -- 7,533
- -----------------------------------------------------------------------------------------------------------------------------
Shares redeemed (4,317,735 ) (13,145 ) (2,069,409 )
- -----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class Y 6,886,968 108,927 (1,928,704 )
- -----------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets resulting from
capital share transactions 10,066,932 56,402,435 40,790,405
- -----------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets 12,148,124 66,327,132 48,286,454
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------------------------------------------------------------------------
Beginning of period $ 6,608,894 $ 70,126,059 $ 21,839,605
- -----------------------------------------------------------------------------------------------------------------------------
End of period $ 18,757,018 $136,453,191 $ 70,126,059
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 69
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL GROWTH FUND GOVERNMENT SECURITIES FUND
---------------------------- ----------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED DECEMBER 31, ENDED DECEMBER 31,
JUNE 30, 1998 1997 JUNE 30, 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ 320,660 $ 282,844 $ 2,613,154 $ 4,916,643
- ------------------------------------------------------------------------------------------
Net realized gain (loss) on
investments 2,244,978 2,951,705 135,988 (70,610)
- ------------------------------------------------------------------------------------------
Net realized gain (loss) on
futures and options -- -- -- --
- ------------------------------------------------------------------------------------------
Net change in unrealized
gain (loss) of investments 5,139,817 (1,379,627) 349,173 1,607,250
- ------------------------------------------------------------------------------------------
Increase (decrease) in net
assets resulting from
operations 7,705,455 1,854,922 3,098,315 6,453,283
- ------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM:
- ------------------------------------------------------------------------------------------
Net investment income, Class
A -- (143,750) (1,973,718) (4,240,611)
- ------------------------------------------------------------------------------------------
Net investment income, Class
B -- (7,274) (373,525) (463,583)
- ------------------------------------------------------------------------------------------
Net investment income, Class
C -- (4,922) (27,804) (5,921)
- ------------------------------------------------------------------------------------------
Net investment income, Class
Y -- (89,451) (238,107) (206,528)
- ------------------------------------------------------------------------------------------
Net realized gains on
investments Class A -- (2,418,648) -- --
- ------------------------------------------------------------------------------------------
Net realized gains on
investments Class B -- (631,985) -- --
- ------------------------------------------------------------------------------------------
Net realized gains on
investments Class C -- (71,424) -- --
- ------------------------------------------------------------------------------------------
Net realized gains on
investments Class Y -- (692,785) -- --
- ------------------------------------------------------------------------------------------
Total dividends and
distributions to shareholders -- (4,060,239) (2,613,154) (4,916,643)
- ------------------------------------------------------------------------------------------
FROM CAPITAL SHARE
TRANSACTIONS:
- ------------------------------------------------------------------------------------------
CLASS A
- ------------------------------------------------------------------------------------------
Shares sold 5,659,051 9,664,091 7,184,347 9,968,742
- ------------------------------------------------------------------------------------------
Reinvestment of
distributions -- 2,483,065 1,504,634 3,239,373
- ------------------------------------------------------------------------------------------
Shares redeemed (5,552,844) (7,918,925) (9,438,427) (19,528,142)
- ------------------------------------------------------------------------------------------
Net increase (decrease) -
Class A 106,207 4,228,231 (749,446) (6,320,027)
- ------------------------------------------------------------------------------------------
CLASS B
- ------------------------------------------------------------------------------------------
Shares sold 6,453,855 8,132,892 7,905,927 7,500,863
- ------------------------------------------------------------------------------------------
Reinvestment of
distributions -- 618,379 296,351 366,928
- ------------------------------------------------------------------------------------------
Shares redeemed (3,447,062) (2,560,054) (3,150,825) (1,468,710)
- ------------------------------------------------------------------------------------------
Net increase (decrease) -
Class B 3,006,793 6,191,217 5,051,453 6,399,081
- ------------------------------------------------------------------------------------------
CLASS C
- ------------------------------------------------------------------------------------------
Shares sold 1,033,288 1,623,970 1,126,702 491,753
- ------------------------------------------------------------------------------------------
Reinvestment of
distributions -- 64,561 26,002 5,436
- ------------------------------------------------------------------------------------------
Shares redeemed (78,769) (411,829) (225,217) (1,730)
- ------------------------------------------------------------------------------------------
Net increase (decrease) -
Class C 954,519 1,276,702 927,487 495,459
- ------------------------------------------------------------------------------------------
CLASS Y
- ------------------------------------------------------------------------------------------
Shares sold 3,106,410 5,152,548 876,243 7,776,475
- ------------------------------------------------------------------------------------------
Reinvestment of
distributions -- 782,252 235,422 203,007
- ------------------------------------------------------------------------------------------
Shares redeemed (2,413,808) (3,371,537) (836,262) (476,237)
- ------------------------------------------------------------------------------------------
Net increase (decrease) -
Class Y 692,602 2,563,263 275,403 7,503,245
- ------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets resulting from
capital share transactions 4,760,121 14,259,413 5,504,897 8,077,758
- ------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets 12,465,576 12,054,096 5,990,058 9,614,398
- ------------------------------------------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------------------------------------------
Beginning of period $ 59,996,193 $ 47,942,097 $ 88,989,974 $ 79,375,576
- ------------------------------------------------------------------------------------------
End of period $ 72,461,769 $ 59,996,193 $ 94,980,032 $ 88,989,974
- ------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
70 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
<TABLE>
<CAPTION>
HIGH-YIELD BOND FUND TAX-EXEMPT INCOME FUND MANAGED FUND
------------------------------ ---------------------------- ------------------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED DECEMBER 31, ENDED DECEMBER 31, ENDED DECEMBER 31,
JUNE 30, 1998 1997 JUNE 30, 1998 1997 JUNE 30, 1998 1997
-------------- -------------- ------------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ 3,574,204 $ 5,875,927 $ 583,285 $ 1,259,307 $ 996,453 $ 1,197,777
- ----------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
investments 1,195,472 2,743,109 613,175 372,519 16,925,919 12,784,062
- ----------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
futures and options -- (62,305) -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
Net change in unrealized
gain (loss) of investments (742,786) 349,675 (434,049) 229,121 24,733,989 38,518,875
- ----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net
assets resulting from
operations 4,026,890 8,906,406 762,411 1,860,947 42,656,361 52,500,714
- ----------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM:
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
A (2,594,647) (4,853,097) (519,490) (1,174,218) -- (591,297)
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
B (857,242) (972,857) (58,207) (83,769) -- (7,511)
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
C (86,637) (24,986) (5,588) (1,321) -- (18,130)
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
Y (35,678) (24,987) -- -- -- (607,068)
- ----------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class A -- -- -- (322,461) -- (5,861,184)
- ----------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class B -- -- -- (39,833) -- (4,171,627)
- ----------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class C -- -- -- (2,497) -- (136,070)
- ----------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class Y -- -- -- -- -- (3,007,927)
- ----------------------------------------------------------------------------------------------------------------------------
Total dividends and
distributions to shareholders (3,574,204) (5,875,927) (583,285) (1,624,099) -- (14,400,814)
- ----------------------------------------------------------------------------------------------------------------------------
FROM CAPITAL SHARE
TRANSACTIONS:
- ----------------------------------------------------------------------------------------------------------------------------
CLASS A
- ----------------------------------------------------------------------------------------------------------------------------
Shares sold 12,465,765 20,360,902 2,407,601 2,691,749 26,478,449 52,752,538
- ----------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 2,036,217 3,697,275 397,556 1,171,184 -- 6,249,605
- ----------------------------------------------------------------------------------------------------------------------------
Shares redeemed (8,318,981) (14,219,658) (2,958,100) (8,876,454) (13,396,835) (21,520,190)
- ----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class A 6,183,001 9,838,519 (152,943) (5,013,521) 13,081,614 37,481,953
- ----------------------------------------------------------------------------------------------------------------------------
CLASS B
- ----------------------------------------------------------------------------------------------------------------------------
Shares sold 13,536,681 14,068,528 875,534 1,466,262 37,814,125 45,496,427
- ----------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 642,728 701,407 44,853 100,177 -- 3,984,094
- ----------------------------------------------------------------------------------------------------------------------------
Shares redeemed (3,702,882) (3,320,942) (522,760) (728,264) (7,119,242) (6,915,745)
- ----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class B 10,476,527 11,448,993 397,627 838,175 30,694,883 42,564,776
- ----------------------------------------------------------------------------------------------------------------------------
CLASS C
- ----------------------------------------------------------------------------------------------------------------------------
Shares sold 2,810,625 1,690,084 225,636 181,367 6,063,784 3,630,893
- ----------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 70,047 18,460 4,265 3,787 -- 143,683
- ----------------------------------------------------------------------------------------------------------------------------
Shares redeemed (217,080) (255,370) (3,062) -- (634,607) (69,464)
- ----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class C 2,663,592 1,453,174 226,839 185,154 5,429,177 3,705,112
- ----------------------------------------------------------------------------------------------------------------------------
CLASS Y
- ----------------------------------------------------------------------------------------------------------------------------
Shares sold 218,252 775,896 -- -- 15,695,514 29,017,460
- ----------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 35,677 24,887 -- -- -- 3,614,889
- ----------------------------------------------------------------------------------------------------------------------------
Shares redeemed (11,487) (897) -- -- (8,856,212) (19,022,024)
- ----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class Y 242,442 799,886 -- -- 6,839,302 13,610,325
- ----------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets resulting from
capital share transactions 19,565,562 23,540,572 471,523 (3,990,192) 56,044,976 97,362,166
- ----------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets 20,018,248 26,571,051 650,649 (3,753,344) 98,701,337 135,462,066
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS:
- ----------------------------------------------------------------------------------------------------------------------------
Beginning of period $ 88,591,929 $ 62,020,878 $ 26,762,208 $ 30,515,552 $ 351,315,643 $ 215,853,577
- ----------------------------------------------------------------------------------------------------------------------------
End of period $ 108,610,177 $ 88,591,929 $ 27,412,857 $ 26,762,208 $ 450,016,980 $ 351,315,643
- ----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
MONEY MARKET FUND
--------------------------------
(UNAUDITED)
SIX MONTHS YEAR ENDED
ENDED DECEMBER 31,
JUNE 30, 1998 1997
--------------- ---------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ 2,238,473 $ 3,014,138
- ---------------------------------------------------------------------------------
Net realized gain (loss) on
investments -- --
- --------------------------------------------------------------------------------------------------
Net realized gain (loss) on
futures and options -- --
- -------------------------------------------------------------------------------------------------------------------
Net change in unrealized
gain (loss) of investments -- --
- ----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net
assets resulting from
operations 2,238,473 3,014,138
- ----------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM:
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
A (1,986,707) (2,766,936)
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
B (143,767) (181,537)
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
C (41,746) (6,468)
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
Y (66,253) (59,197)
- ----------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class A -- --
- ----------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class B -- --
- ----------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class C -- --
- ----------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class Y -- --
- ----------------------------------------------------------------------------------------------------------------------------
Total dividends and
distributions to shareholders (2,238,473) (3,014,138)
- ----------------------------------------------------------------------------------------------------------------------------
FROM CAPITAL SHARE
TRANSACTIONS:
- ----------------------------------------------------------------------------------------------------------------------------
CLASS A
- ----------------------------------------------------------------------------------------------------------------------------
Shares sold 172,843,855 186,445,537
- ----------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 1,902,874 2,799,348
- ----------------------------------------------------------------------------------------------------------------------------
Shares redeemed (155,873,840) (179,852,529)
- ----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class A 18,872,889 9,392,356
- ----------------------------------------------------------------------------------------------------------------------------
CLASS B
- ----------------------------------------------------------------------------------------------------------------------------
Shares sold 12,244,950 16,428,666
- ----------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 129,860 165,715
- ----------------------------------------------------------------------------------------------------------------------------
Shares redeemed (11,746,030) (11,957,685)
- ----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class B 628,780 4,636,696
- ----------------------------------------------------------------------------------------------------------------------------
CLASS C
- ----------------------------------------------------------------------------------------------------------------------------
Shares sold 4,692,043 3,804,829
- ----------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 36,078 5,853
- ----------------------------------------------------------------------------------------------------------------------------
Shares redeemed (3,196,345) (2,789,716)
- ----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class C 1,531,776 1,020,966
- ----------------------------------------------------------------------------------------------------------------------------
CLASS Y
- ----------------------------------------------------------------------------------------------------------------------------
Shares sold 628,538 3,225,033
- ----------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 61,203 55,490
- ----------------------------------------------------------------------------------------------------------------------------
Shares redeemed (697,908) (580,428)
- ----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class Y (8,167) 2,700,095
- ----------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets resulting from
capital share transactions 21,025,278 17,750,113
- ----------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets 21,025,278 17,750,113
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS:
- ----------------------------------------------------------------------------------------------------------------------------
Beginning of period $ 78,167,164 $ 60,417,051
- ----------------------------------------------------------------------------------------------------------------------------
End of period $ 99,192,442 $ 78,167,164
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 71
<PAGE>
GROWTH FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
(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) Effective September 1, 1995, ratio includes expenses paid indirectly.
(F) Based on average monthly shares outstanding.
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
SIX
MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, -----------------------------------------------------------------
GROWTH FUND (CLASS A) 1998 1997 1996 1995 1994 1993
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 16.91 $ 13.10 $ 10.44 $ 7.76 $ 8.26 $ 7.96
Net Investment Income (Loss) (0.05) (0.07) (0.04) (0.03) (0.02) 0.01
Net Realized and Unrealized Gain (Loss) on
Investments 3.45 4.23 3.44 3.13 (0.06) 0.84
--------- --------- --------- --------- -------- --------
Total from Investment Operations 3.40 4.16 3.40 3.10 (0.08) 0.85
--------- --------- --------- --------- -------- --------
Dividends from Net Investment Income -- -- -- -- -- 0.01
Distributions from Capital Gains -- 0.35 0.74 0.42 0.42 0.54
--------- --------- --------- --------- -------- --------
Total Distributions -- 0.35 0.74 0.42 0.42 0.55
--------- --------- --------- --------- -------- --------
Net Asset Value End of Period $ 20.31 $ 16.91 $ 13.10 $ 10.44 $ 7.76 $ 8.26
--------- --------- --------- --------- -------- --------
Total Return(C) 20.11%(B) 31.76% 32.60% 39.99% (0.99)% 10.59%
Net Assets End of Period (in thousands) $659,058 $ 424,280 $ 196,752 $ 122,559 $ 88,375 $ 90,902
Ratio of Expenses to Average Net Assets 1.48%(A) 1.43%(E) 1.53%(E) 1.60% 1.56% 1.60%
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.48%(A) 1.43%(E) 1.53%(E) 1.60% 1.56% 1.61%
Ratio of Net Investment Income (Loss) to Average
Net Assets (0.54)%(A) (0.55)% (0.39)% (0.35)% (0.30)% 0.10%
Ratio of Net Investment Income (Loss) to Average
Net Assets
(Excluding Waivers) (0.54)%(A) (0.55)% (0.39)% (0.35)% (0.30)% 0.06%
Portfolio Turnover Rate 33.76%(A) 22.28% 29.90% 45.30% 64.50% 107.90%
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED)
SIX
MONTHS YEAR ENDED
ENDED DECEMBER 31, FOR THE PERIOD
JUNE 30, ----------------------- 5/1/95
GROWTH FUND (CLASS B) 1998 1997 1996 THROUGH 12/31/95
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 16.66 $ 12.97 $ 10.41 $ 8.69
Net Investment Income (Loss) (0.08) (0.11) (0.06) (0.02)
Net Realized and Unrealized Gain (Loss) on
Investments 3.37 4.15 3.36 2.16
--------- --------- -------- ------
Total from Investment Operations 3.29 4.04 3.30 2.14
--------- --------- -------- ------
Dividends from Net Investment Income -- -- -- --
Distributions from Capital Gains -- 0.35 0.74 0.42
--------- --------- -------- ------
Total Distributions -- 0.35 0.74 0.42
--------- --------- -------- ------
Net Asset Value End of Period $ 19.95 $ 16.66 $ 12.97 $10.41
--------- --------- -------- ------
Total Return(D) 19.75%(B) 31.15% 31.73% 24.66%(B)
Net Assets End of Period (in thousands) $305,520 $ 166,932 $ 36,483 $4,572
Ratio of Expenses to Average Net Assets 2.03%(A) 1.98%(E) 2.10%(E) 2.15%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.03%(A) 1.98%(E) 2.10%(E) 2.15%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (1.09)%(A) (1.10)% (0.96)% (0.82)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (1.09)%(A) (1.10)% (0.96)% (0.82)%(A)
Portfolio Turnover Rate 33.76%(A) 22.28% 29.90% 45.30%(A)
</TABLE>
See notes to financial statements.
72 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
GROWTH FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE PERIOD
SIX MONTHS ENDED 5/1/97
GROWTH FUND (CLASS C) JUNE 30, 1998 THROUGH 12/31/97
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 16.85 $ 14.11
Net Investment Income (Loss) (0.07) (0.06)
Net Realized and Unrealized Gain (Loss) on
Investments 3.40 3.15
------- -------
Total from Investment Operations 3.33 3.09
------- -------
Dividends from Net Investment Income -- --
Distributions from Capital Gains -- 0.35
------- -------
Total Distributions -- 0.35
------- -------
Net Asset Value End of Period $ 20.18 $ 16.85
------- -------
Total Return(D) 19.76%(B) 21.91%(B)
Net Assets End of Period (in thousands) $ 78,890 $ 26,601
Ratio of Expenses to Average Net Assets 2.04%(A) 1.97%(A)(E)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.04%(A) 1.97%(AE)
Ratio of Net Investment Income (Loss) to Average
Net Assets (1.07)%(A) (1.10)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (1.07)%(A) (1.10)%(A)
Portfolio Turnover Rate 33.76%(A) 22.28%(A)
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE PERIOD
SIX MONTHS ENDED YEAR ENDED 8/8/96
GROWTH FUND (CLASS Y) JUNE 30, 1998 DECEMBER 31, 1997 THROUGH 12/31/96
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 17.02 $ 13.12 $ 11.96
Net Investment Income (Loss) (0.01) (0.02) --
Net Realized and Unrealized Gain (Loss) on
Investments 3.47 4.27 1.90
------- ------- ------
Total from Investment Operations 3.46 4.25 1.90
------- ------- ------
Dividends from Net Investment Income -- -- --
Distributions from Capital Gains -- 0.35 0.74
------- ------- ------
Total Distributions -- 0.35 0.74
------- ------- ------
Net Asset Value End of Period $ 20.48 $ 17.02 $ 13.12
------- ------- ------
Total Return 20.33%(B) 32.40% 15.91%(B)
Net Assets End of Period (in thousands) $61,562 $44,596 $ 2,339
Ratio of Expenses to Average Net Assets 1.03%(A) 0.97%(E) 1.10%(A)(E)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.03%(A) 0.97%(E) 1.10%(A)(E)
Ratio of Net Investment Income (Loss) to Average
Net Assets (0.10)%(A) (0.10)% 0.04%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (0.10)%(A) (0.10)% 0.04%(A)
Portfolio Turnover Rate 33.76%(A) 22.28% 29.90%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 73
<PAGE>
EQUITY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE PERIOD
SIX MONTHS ENDED 05/01/97
EQUITY FUND (CLASS A) JUNE 30, 1998 THROUGH 12/31/97
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 5.96 $ 5.00
Net Investment Income (Loss) 0.01 0.01
Net Realized and Unrealized Gain (Loss) on
Investments 0.64 1.05
------ ------
Total from Investment Operations 0.65 1.06
------ ------
Dividends from Net Investment Income -- --
Distributions from Capital Gains -- 0.10
------ ------
Total Distributions -- 0.10
------ ------
Net Asset Value End of Period $ 6.61 $ 5.96
------ ------
Total Return(C) 10.91%(B) 21.30%(B)
Net Assets End of Period (in thousands) $ 5,116 $ 3,196
Ratio of Expenses to Average Net Assets 1.60%(A) 1.60%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.46%(A) 6.52%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 0.39%(A) 0.26%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (0.47)%(A) (4.66)%(A)
Portfolio Turnover Rate 63.59%(A) 68.73%(A)
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE PERIOD
SIX MONTHS ENDED 05/01/97
EQUITY FUND (CLASS B) JUNE 30, 1998 THROUGH 12/31/97
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 5.94 $ 5.00
Net Investment Income (Loss) -- --
Net Realized and Unrealized Gain (Loss) on
Investments 0.64 1.04
------ ------
Total from Investment Operations 0.64 1.04
------ ------
Dividends from Net Investment Income -- --
Distributions from Capital Gains -- 0.10
------ ------
Total Distributions -- 0.10
------ ------
Net Asset Value End of Period $ 6.58 $ 5.94
------ ------
Total Return(D) 10.77%(B) 20.80%(B)
Net Assets End of Period (in thousands) $ 4,959 $ 1,820
Ratio of Expenses to Average Net Assets 2.15%(A) 2.15%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.92%(A) 6.21%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (0.12)%(A) (0.23)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (0.89)%(A) (4.29)%(A)
Portfolio Turnover Rate 63.59%(A) 68.73%(A)
</TABLE>
See notes to financial statements.
74 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
EQUITY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE PERIOD
SIX MONTHS ENDED 05/01/97
EQUITY FUND (CLASS C) JUNE 30, 1998 THROUGH 12/31/97
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 5.94 $ 5.00
Net Investment Income (Loss) -- --
Net Realized and Unrealized Gain (Loss) on
Investments 0.64 1.04
----- -----
Total from Investment Operations 0.64 1.04
----- -----
Dividends from Net Investment Income -- --
Distributions from Capital Gains -- 0.10
----- -----
Total Distributions -- 0.10
----- -----
Net Asset Value End of Period $ 6.58 $ 5.94
----- -----
Total Return(D) 10.77%(B) 20.89%(B)
Net Assets End of Period (in thousands) $ 879 $ 283
Ratio of Expenses to Average Net Assets 2.15%(A) 2.15%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.92%(A) 6.01%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (0.12)%(A) (0.21)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (0.84)%(A) (4.07)%(A)
Portfolio Turnover Rate 63.59%(A) 68.73%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 75
<PAGE>
GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE PERIOD FOR THE PERIOD
SIX MONTHS ENDED 10/1/97 7/17/97
GROWTH AND INCOME FUND (CLASS A) JUNE 30, 1998 THROUGH 12/31/97 THROUGH 9/30/97
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 25.19 $ 25.71 $ 25.05
Net Investment Income (Loss) 0.10 0.01 --
Net Realized and Unrealized Gain (Loss) on
Investments 2.82 0.04 0.66
------- ------ ------
Total from Investment Operations 2.92 0.05 0.66
------- ------ ------
Dividends from Net Investment Income -- 0.11 --
Distributions from Capital Gains -- 0.46 --
------- ------ ------
Total Distributions -- 0.57 --
------- ------ ------
Net Asset Value End of Period $ 28.11 $ 25.19 $ 25.71
------- ------ ------
Total Return(C) 11.59%(B) 0.20%(B) 2.63%(B)
Net Assets End of Period (in thousands) $11,373 $ 4,032 $ 1,109
Ratio of Expenses to Average Net Assets 1.50%(A) 1.50%(A) 1.50%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.93%(A) 2.11%(A) 4.47%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 0.50%(A) 0.56%(A) 0.07%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 0.07%(A) (0.04)%(A) (2.90)%(A)
Portfolio Turnover Rate 9.07%(A) 1.46%(A) 15.69%(A)
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE PERIOD FOR THE PERIOD
SIX MONTHS ENDED 10/1/97 7/17/97
GROWTH AND INCOME FUND (CLASS B) JUNE 30, 1998(F) THROUGH 12/31/97 THROUGH 9/30/97
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 25.15 $ 25.68 $ 25.05
Net Investment Income (Loss) (0.05) (0.01) (0.01)
Net Realized and Unrealized Gain (Loss) on
Investments 2.89 0.03 0.64
------- ------ ------
Total from Investment Operations 2.84 0.02 0.63
------- ------ ------
Dividends from Net Investment Income -- 0.09 --
Distributions from Capital Gains -- 0.46 --
------- ------ ------
Total Distributions -- 0.55 --
------- ------ ------
Net Asset Value End of Period $ 27.99 $ 25.15 $ 25.68
------- ------ ------
Total Return(D) 11.29%(B) 0.07%(B) 2.51%(B)
Net Assets End of Period (in thousands) $12,779 $ 3,257 $ 992
Ratio of Expenses to Average Net Assets 2.05%(A) 2.05%(A) 2.05%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.46%(A) 2.66%(A) 4.59%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (0.09)%(A) (0.02)%(A) (0.34)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (0.50)%(A) (0.63)%(A) (2.87)%(A)
Portfolio Turnover Rate 9.07%(A) 1.46%(A) 15.69%(A)
</TABLE>
See notes to financial statements.
76 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE PERIOD FOR THE PERIOD
SIX MONTHS ENDED 10/1/97 7/17/97
GROWTH AND INCOME FUND (CLASS C) JUNE 30, 1998 THROUGH 12/31/97 THROUGH 9/30/97
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 25.15 $ 25.68 $ 25.05
Net Investment Income (Loss) (0.03) (0.02) (0.01)
Net Realized and Unrealized Gain (Loss) on
Investments 2.87 0.05 0.64
------ ------ ------
Total from Investment Operations 2.84 0.03 0.63
------ ------ ------
Dividends from Net Investment Income -- 0.10 --
Distributions from Capital Gains -- 0.46 --
------ ------ ------
Total Distributions -- 0.56 --
------ ------ ------
Net Asset Value End of Period $ 27.99 $ 25.15 $ 25.68
------ ------ ------
Total Return(D) 11.29%(B) 0.10%(B) 2.51%(B)
Net Assets End of Period (in thousands) $ 2,953 $ 561 $ 99
Ratio of Expenses to Average Net Assets 2.05%(A) 2.05%(A) 2.05%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.46%(A) 2.64%(A) 4.60%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (0.09)%(A) 0.03%(A) (0.39)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (0.50)%(A) (0.56)%(A) (2.94)%(A)
Portfolio Turnover Rate 9.07%(A) 1.46%(A) 15.69%(A)
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
(UNAUDITED) 10/1/97 YEAR
SIX MONTHS ENDED THROUGH ENDED YEAR ENDED YEAR ENDED
GROWTH AND INCOME FUND (CLASS Y) JUNE 30, 1998 12/31/97 9/30/97 9/30/96 9/30/95
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 25.24 $ 25.73 $ 20.11 $ 16.69 $ 12.72
Net Investment Income (Loss) 0.18 0.06 0.35 0.21 0.13
Net Realized and Unrealized Gain (Loss) on
Investments 2.81 0.02 6.18 3.45 4.22
------- ------- --------- ----------- -----------
Total from Investment Operations 2.99 0.08 6.53 3.66 4.35
------- ------- --------- ----------- -----------
Dividends from Net Investment Income -- 0.11 0.20 0.24 0.16
Distributions from Capital Gains -- 0.46 0.71 -- 0.22
------- ------- --------- ----------- -----------
Total Distributions -- 0.57 0.91 0.24 0.38
------- ------- --------- ----------- -----------
Net Asset Value End of Period $ 28.23 $ 25.24 $ 25.73 $ 20.11 $ 16.69
------- ------- --------- ----------- -----------
Total Return 11.85%(B) 0.31%(B) 33.55% 22.21% 35.24%
Net Assets End of Period (in thousands) $ 18,028 $ 15,542 $ 15,428 $ 8,865 $ 5,657
Ratio of Expenses to Average Net Assets 1.05%(A) 1.05%(A) 0.99% 0.97% 0.90%
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.49%(A) 1.68%(A) 2.20% 2.05% 2.20%
Ratio of Net Investment Income (Loss) to Average
Net Assets 0.99%(A) 0.96%(A) 0.88% 1.23% 1.52%
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 0.55%(A) 0.33%(A) (0.33)% 0.15% 0.22%
Portfolio Turnover Rate 9.07%(A) 1.46%(A) 15.69% 18.08% 25.49%
<CAPTION>
YEAR ENDED YEAR ENDED
GROWTH AND INCOME FUND (CLASS Y) 9/30/94 9/30/93
- --------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 12.08 $ 10.98
Net Investment Income (Loss) 0.15 0.18
Net Realized and Unrealized Gain (Loss) on
Investments 0.74 1.84
----------- -----------
Total from Investment Operations 0.89 2.02
----------- -----------
Dividends from Net Investment Income 0.14 0.28
Distributions from Capital Gains 0.11 0.64
----------- -----------
Total Distributions 0.25 0.92
----------- -----------
Net Asset Value End of Period $ 12.72 $ 12.08
----------- -----------
Total Return 7.47% 19.39%
Net Assets End of Period (in thousands) $ 3,639 $ 3,094
Ratio of Expenses to Average Net Assets 0.90% 0.90%
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.23% 3.33%
Ratio of Net Investment Income (Loss) to Average
Net Assets 1.17% 1.31%
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (0.16)% (1.12)%
Portfolio Turnover Rate 9.64% 21.79%
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 77
<PAGE>
EQUITY INCOME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED ----------------------------------------------------
EQUITY INCOME FUND (CLASS A) JUNE 30, 1998 1997 1996 1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 26.42 $ 22.44 $ 20.73 $ 16.43 $ 17.75 $ 16.93
Net Investment Income (Loss) 0.16 0.17 0.41 0.45 0.44 0.52
Net Realized and Unrealized Gain (Loss) on
Investments 2.13 5.95 3.27 5.00 (0.53) 1.74
------- -------- -------- -------- -------- --------
Total from Investment Operations 2.29 6.12 3.68 5.45 (0.09) 2.26
------- -------- -------- -------- -------- --------
Dividends from Net Investment Income 0.16 0.15 0.40 0.45 0.44 0.50
Distributions from Capital Gains -- 1.99 1.57 0.70 0.79 0.94
------- -------- -------- -------- -------- --------
Total Distributions 0.16 2.14 1.97 1.15 1.23 1.44
------- -------- -------- -------- -------- --------
Net Asset Value End of Period $ 28.55 $ 26.42 $ 22.44 $ 20.73 $ 16.43 $ 17.75
------- -------- -------- -------- -------- --------
Total Return(C) 8.70%(B) 28.08% 17.86% 33.38% (0.49)% 13.45%
Net Assets End of Period (in thousands) $ 110,637 $ 97,932 $ 72,647 $ 61,906 $ 50,926 $ 49,920
Ratio of Expenses to Average Net Assets 1.50%(A) 1.50% 1.50% 1.50% 1.50% 1.50%
Ratio of Expenses to Average Net Assets
(Excluding Waivers) 1.54%(A) 1.62% 1.68% 1.78% 1.73% 1.91%
Ratio of Net Investment Income to Average Net
Assets 1.20%(A) 1.35% 1.87% 2.33% 2.50% 2.90%
Ratio of Net Investment Income to Average Net
Assets (Excluding Waivers) 1.16%(A) 1.23% 1.69% 2.06% 2.30% 2.51%
Portfolio Turnover Rate 34.64%(A) 32.89% 33.22% 25.60% 41.40% 39.90%
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED)
SIX
MONTHS YEAR ENDED
ENDED DECEMBER 31, FOR THE PERIOD
JUNE 30, ------------------- 5/1/95
EQUITY INCOME FUND (CLASS B) 1998 1997 1996 THROUGH 12/31/95
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 26.17 $ 22.30 $ 20.67 $18.12
Net Investment Income (Loss) 0.07 0.12 0.24 0.29
Net Realized and Unrealized Gain (Loss) on
Investments 2.13 5.83 3.30 3.40
-------- -------- -------- ------
Total from Investment Operations 2.20 5.95 3.54 3.69
-------- -------- -------- ------
Dividends from Net Investment Income 0.11 0.09 0.34 0.44
Distributions from Capital Gains -- 1.99 1.57 0.70
-------- -------- -------- ------
Total Distributions 0.11 2.08 1.91 1.14
-------- -------- -------- ------
Net Asset Value End of Period $ 28.26 $ 26.17 $ 22.30 $20.67
-------- -------- -------- ------
Total Return(D) 8.41%(B) 27.35% 17.22% 20.57%(B)
Net Assets End of Period (in thousands) $28,781 $ 19,055 $ 5,615 $1,086
Ratio of Expenses to Average Net Assets 2.05%(A) 2.05% 2.05% 2.05%(A)
Ratio of Expenses to Average Net Assets
(Excluding Waivers) 2.09%(A) 2.17% 2.23% 2.23%(A)
Ratio of Net Investment Income to Average Net
Assets 0.65%(A) 0.77% 1.32% 1.56%(A)
Ratio of Net Investment Income to Average Net
Assets (Excluding Waivers) 0.61%(A) 0.65% 1.14% 1.33%(A)
Portfolio Turnover Rate 34.64%(A) 32.89% 33.22% 25.60%(A)
</TABLE>
See notes to financial statements.
78 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
EQUITY INCOME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE PERIOD FROM
SIX MONTHS ENDED 5/1/97
EQUITY INCOME FUND (CLASS C) JUNE 30, 1998 THROUGH 12/31/97
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 26.31 $ 24.26
Net Investment Income (Loss) 0.07 0.04
Net Realized and Unrealized Gain (Loss) on
Investments 2.14 4.14
------ ------
Total from Investment Operations 2.21 4.18
------ ------
Dividends from Net Investment Income 0.13 0.14
Distributions from Capital Gains -- 1.99
------ ------
Total Distributions 0.13 2.13
------ ------
Net Asset Value End of Period $ 28.39 $ 26.31
------ ------
Total Return(D) 8.41%(B) 18.21%(B)
Net Assets End of Period (in thousands) $ 4,288 $ 1,857
Ratio of Expenses to Average Net Assets 2.05%(A) 2.05%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.09%(A) 2.20%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 0.65%(A) 0.69%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 0.61%(A) 0.54%(A)
Portfolio Turnover Rate 34.64%(A) 32.89%(A)
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED)
FOR THE PERIOD
EQUITY INCOME FUND (CLASS Y) 1/22/98 THROUGH 6/30/98
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 26.26
Net Investment Income (Loss) 0.20
Net Realized and Unrealized Gain (Loss) on
Investments 2.32
------
Total from Investment Operations 2.52
------
Dividends from Net Investment Income 0.24
Distributions from Capital Gains --
------
Total Distributions 0.24
------
Net Asset Value End of Period $ 28.54
------
Total Return 9.59%(B)
Net Assets End of Period (in thousands) $ 116
Ratio of Expenses to Average Net Assets 1.05%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.09%(A)
Ratio of Net Investment Income to Average Net
Assets 1.67%(A)
Ratio of Net Investment Income to Average Net
Assets (Excluding Waivers) 1.63%(A)
Portfolio Turnover Rate 34.64%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 79
<PAGE>
CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
SIX
MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, ------------------------------------------------------------
CAPITAL APPRECIATION FUND (CLASS A) 1998 1997 1996 1995 1994 1993
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 35.54 $ 34.21 $ 32.54 $ 28.54 $ 31.10 $ 29.42
Net Investment Income (Loss) (0.21) (0.37) (0.31) (0.25) (0.13) (0.15)
Net Realized and Unrealized Gain (Loss) on
Investments 6.95 7.31 5.69 7.59 (0.95) 1.83
--------- --------- --------- --------- --------- ---------
Total from Investment Operations 6.74 6.94 5.38 7.34 (1.08) 1.68
--------- --------- --------- --------- --------- ---------
Dividends from Net Investment Income -- -- -- -- -- --
Distributions from Capital Gains -- 5.61 3.71 3.34 1.48 --
--------- --------- --------- --------- --------- ---------
Total Distributions -- 5.61 3.71 3.34 1.48 --
--------- --------- --------- --------- --------- ---------
Net Asset Value End of Period $ 42.28 $ 35.54 $ 34.21 $ 32.54 $ 28.54 $ 31.10
--------- --------- --------- --------- --------- ---------
Total Return(C) 18.97%(B) 20.27% 16.52% 25.72% (3.46)% 5.71%
Net Assets End of Period (in thousands) $123,511 $ 112,738 $ 115,253 $ 121,207 $ 101,237 $ 103,187
Ratio of Expenses to Average Net Assets 1.46%(A) 1.65% 1.60%(E) 1.65% 1.66% 1.64%
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.46%(A) 1.65% 1.60%(E) 1.65% 1.66% 1.64%
Ratio of Net Investment Income (Loss) to Average
Net Assets (1.03)%(A) (1.06)% (0.87)% (0.82)% (0.50)% (0.60)%
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (1.03)%(A) (1.06)% (0.87)% (0.82)% (0.50)% (0.60)%
Portfolio Turnover Rate 88.49%(A) 60.73% 66.42% 65.20% 74.40% 61.90%
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED)
SIX
MONTHS YEAR ENDED DECEMBER
ENDED 31, FOR THE PERIOD
JUNE 30, ------------------- 5/1/95
CAPITAL APPRECIATION FUND (CLASS B) 1998 1997 1996 THROUGH 12/31/95
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 34.89 $ 33.86 $ 32.42 $30.04
Net Investment Income (Loss) (0.26) (0.45) (0.35) (0.12)
Net Realized and Unrealized Gain (Loss) on
Investments 6.76 7.09 5.50 5.84
-------- -------- -------- ------
Total from Investment Operations 6.50 6.64 5.15 5.72
-------- -------- -------- ------
Dividends from Net Investment Income -- -- -- --
Distributions from Capital Gains -- 5.61 3.71 3.34
-------- -------- -------- ------
Total Distributions -- 5.61 3.71 3.34
-------- -------- -------- ------
Net Asset Value End of Period $ 41.39 $ 34.89 $ 33.86 $32.42
-------- -------- -------- ------
Total Return(B) 18.63%(B) 19.60% 15.87% 18.99%(B)
Net Assets End of Period (in thousands) $11,398 $ 7,862 $ 5,047 $1,953
Ratio of Expenses to Average Net Assets 2.01%(A) 2.21% 2.14%(E) 2.08%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.01%(A) 2.21% 2.14%(E) 2.08%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (1.58)%(A) (1.61)% (1.43)% (1.41)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (1.58)%(A) (1.61)% (1.43)% (1.41)%(A)
Portfolio Turnover Rate 88.49%(A) 60.73% 66.42% 65.20%(A)
</TABLE>
See notes to financial statements.
80 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE PERIOD FROM
SIX MONTHS ENDED 5/1/97
CAPITAL APPRECIATION FUND (CLASS C) JUNE 30, 1998 THROUGH 12/31/97
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 35.43 $ 33.54
Net Investment Income (Loss) (0.17) (0.19)
Net Realized and Unrealized Gain (Loss) on
Investments 6.77 7.69
------ ------
Total from Investment Operations 6.60 7.50
------ ------
Dividends from Net Investment Income -- --
Distributions from Capital Gains -- 5.61
------ ------
Total Distributions -- 5.61
------ ------
Net Asset Value End of Period $ 42.03 $ 35.43
------ ------
Total Return(D) 18.63%(B) 22.35%(B)
Net Assets End of Period (in thousands) $ 431 $ 126
Ratio of Expenses to Average Net Assets 2.00%(A) 2.21%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.00%(A) 2.21%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (1.58)%(A) (1.88)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (1.58)%(A) (1.88)%(A)
Portfolio Turnover Rate 88.49%(A) 60.73%(A)
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED)
FOR THE PERIOD
CAPITAL APPRECIATION FUND (CLASS Y) 5/14/98 THROUGH 6/30/98
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $40.71
Net Investment Income (Loss) (0.02)
Net Realized and Unrealized Gain (Loss) on
Investments 1.61
------
Total from Investment Operations 1.59
------
Dividends from Net Investment Income --
Distributions from Capital Gains --
------
Total Distributions --
------
Net Asset Value End of Period $42.30
------
Total Return 3.91%(B)
Net Assets End of Period (in thousands) $ 201
Ratio of Expenses to Average Net Assets 1.01%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.01%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (0.58)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (0.58)%(A)
Portfolio Turnover Rate 88.49%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 81
<PAGE>
SMALL COMPANY GROWTH FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE PERIOD FROM FOR THE PERIOD
SIX MONTHS ENDED 10/1/97 7/17/97
SMALL COMPANY GROWTH FUND (CLASS A) JUNE 30, 1998 THROUGH 12/31/97 THROUGH 9/30/97
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 23.39 $ 26.61 $ 24.54
Net Investment Income (Loss) (0.16) (0.40) (0.05)
Net Realized and Unrealized Gain (Loss) on
Investments 0.12 (2.27) 2.12
------ ------ ------
Total from Investment Operations (0.04) (2.67) 2.07
------ ------ ------
Dividends from Net Investment Income -- -- --
Distributions from Capital Gains -- 0.55 --
------ ------ ------
Total Distributions -- 0.55 --
------ ------ ------
Net Asset Value End of Period $ 23.35 $ 23.39 $ 26.61
------ ------ ------
Total Return(C) (0.17)%(B) (10.04)%(B) 8.44%(B)
Net Assets End of Period (in thousands) $ 8,232 $ 4,861 $ 2,102
Ratio of Expenses to Average Net Assets 1.85%(A) 1.85%(A) 1.85%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.47%(A) 2.38%(A) 4.48%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (1.64)%(A) (1.56)%(A) (1.61)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (2.26)%(A) (2.09)%(A) (4.25)%(A)
Portfolio Turnover Rate 81.12%(A) 23.68%(A) 157.51%(A)
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE PERIOD FROM FOR THE PERIOD
SIX MONTHS ENDED 10/1/97 7/17/97
SMALL COMPANY GROWTH FUND (CLASS B) JUNE 30, 1998 THROUGH 12/31/97 THROUGH 9/30/97
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 23.33 $ 26.58 $ 24.54
Net Investment Income (Loss) (0.18) (0.47) (0.05)
Net Realized and Unrealized Gain (Loss) on
Investments 0.08 (2.23) 2.09
------ ------ ------
Total from Investment Operations (0.10) (2.70) 2.04
------ ------ ------
Dividends from Net Investment Income -- -- --
Distributions from Capital Gains -- 0.55 --
------ ------ ------
Total Distributions -- 0.55 --
------ ------ ------
Net Asset Value End of Period $ 23.23 $ 23.33 $ 26.58
------ ------ ------
Total Return(D) (0.43)%(B) (10.16)%(B) 8.31%(B)
Net Assets End of Period (in thousands) $ 6,251 $ 2,842 $ 1,099
Ratio of Expenses to Average Net Assets 2.40%(A) 2.40%(A) 2.40%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 3.02%(A) 2.93%(A) 5.52%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (2.19)%(A) (2.11)%(A) (2.18)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (2.81)%(A) (2.64)%(A) (5.29)%(A)
Portfolio Turnover Rate 81.12%(A) 23.68%(A) 157.51%(A)
</TABLE>
See notes to financial statements.
82 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
SMALL COMPANY GROWTH FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE PERIOD FOR THE PERIOD
SIX MONTHS ENDED 10/1/97 7/17/97
SMALL COMPANY GROWTH FUND (CLASS C) JUNE 30, 1998 THROUGH 12/31/97 THROUGH 9/30/97
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
Net Asset Value Beginning of Period $ 23.32 $ 26.57 $ 24.54
Net Investment Income (Loss) (0.17) (0.62) (0.07)
Net Realized and Unrealized Gain (Loss) on
Investments 0.07 (2.08) 2.10
------ ------- ------
Total from Investment Operations (0.10) (2.70) 2.03
------ ------- ------
Dividends from Net Investment Income -- -- --
Distributions from Capital Gains -- 0.55 --
------ ------- ------
Total Distributions -- 0.55 --
------ ------- ------
Net Asset Value End of Period $ 23.22 $ 23.32 $ 26.57
------ ------- ------
Total Return(D) (0.43)%(B) (10.16)%(B) 8.27%(B)
Net Assets End of Period (in thousands) $ 1,985 $ 795 $ 201
Ratio of Expenses to Average Net Assets 2.40%(A) 2.40%(A) 2.40%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 3.02%(A) 2.93%(A) 5.91%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (2.18)%(A) (2.11)%(A) (2.15)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (2.80)%(A) (2.64)%(A) (5.65)%(A)
Portfolio Turnover Rate 81.12%(A) (23.68)%(A) 157.51%(A)
</TABLE>
<TABLE>
<CAPTION>
FOR THE
PERIOD FROM
(UNAUDITED) 10/1/97 YEAR YEAR YEAR
SIX MONTHS ENDED THROUGH ENDED ENDED ENDED
SMALL COMPANY GROWTH FUND (CLASS Y) JUNE 30, 1998 12/31/97 9/30/97 9/30/96 9/30/95
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 23.43 $ 26.62 $ 25.08 $ 19.05 $ 14.01
Net Investment Income (Loss) (0.16) (0.07) (0.13) (0.17) (0.12)
Net Realized and Unrealized Gain (Loss) on
Investments 0.17 (2.57) 3.73 7.62 5.49
------- ------------- --------- ----------- -----------
Total from Investment Operations 0.01 (2.64) 3.60 7.45 5.37
------- ------------- --------- ----------- -----------
Dividends from Net Investment Income -- -- -- -- --
Distributions from Capital Gains -- 0.55 2.06 1.42 0.33
------- ------------- --------- ----------- -----------
Total Distributions -- 0.55 2.06 1.42 0.33
------- ------------- --------- ----------- -----------
Net Asset Value End of Period $ 23.44 $ 23.43 $ 26.62 $ 25.08 $ 19.05
------- ------------- --------- ----------- -----------
Total Return 0.04%(B) (9.92)%(B) 16.24% 42.07% 39.20%
Net Assets End of Period (in thousands) $ 10,890 $ 13,540 $ 15,355 $ 6,609 $ 2,950
Ratio of Expenses to Average Net Assets 1.40%(A) 1.40%(A) 1.84% 1.96% 1.85%
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.99%(A) 1.96%(A) 3.08% 3.46% 5.15%
Ratio of Net Investment Income (Loss) to Average
Net Assets (1.20)%(A) (1.12)%(A) (1.30)% (1.43)% (1.33)%
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (1.79)%(A) (1.68)%(A) (2.54)% (2.93)% (4.63)%
Portfolio Turnover Rate 81.12%(A) 23.68%(A) 157.51% 77.94% 84.05%
<CAPTION>
YEAR YEAR
ENDED ENDED
SMALL COMPANY GROWTH FUND (CLASS Y) 9/30/94 9/30/93
- --------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 14.74 $ 11.83
Net Investment Income (Loss) (0.04) (0.13)
Net Realized and Unrealized Gain (Loss) on
Investments 1.58 4.36
----------- -----------
Total from Investment Operations 1.54 4.23
----------- -----------
Dividends from Net Investment Income -- 0.11
Distributions from Capital Gains 2.27 1.21
----------- -----------
Total Distributions 2.27 1.32
----------- -----------
Net Asset Value End of Period $ 14.01 $ 14.74
----------- -----------
Total Return 11.89% 38.05%
Net Assets End of Period (in thousands) $ 1,825 $ 1,352
Ratio of Expenses to Average Net Assets 1.85% 1.85%
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 6.16% 8.06%
Ratio of Net Investment Income (Loss) to Average
Net Assets (1.37)% (1.34)%
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (5.68)% (7.55)%
Portfolio Turnover Rate 72.59% 144.49%
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 83
<PAGE>
SMALL COMPANY VALUE FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED ------------------------------------------
SMALL COMPANY VALUE FUND (CLASS A) JUNE 30, 1998 1997 1996 1995 1994
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 7.75 $ 5.74 $ 5.43 $ 5.17 $ 5.29
Net Investment Income (Loss) (0.01) 0.01 (0.01) 0.02 0.03
Net Realized and Unrealized Gain (Loss) on
Investments 0.90 2.53 0.62 0.46 (0.01)
------- --------- --------- --------- ---------
Total from Investment Operations 0.89 2.54 0.61 0.48 0.02
------- --------- --------- --------- ---------
Dividends from Net Investment Income -- -- -- 0.02 0.03
Distributions from Capital Gains -- 0.53 0.30 0.20 0.11
------- --------- --------- --------- ---------
Total Distributions -- 0.53 0.30 0.22 0.14
------- --------- --------- --------- ---------
Net Asset Value End of Period $ 8.64 $ 7.75 $ 5.74 $ 5.43 $ 5.17
------- --------- --------- --------- ---------
Total Return(C) 11.48%(B) 44.24% 11.28% 9.28% 0.34%
Net Assets End of Period (in thousands) $ 77,041 $ 45,310 $ 17,308 $ 19,720 $ 22,120
Ratio of Expenses to Average Net Assets 1.75 (A) 1.75% 1.75% 1.75% 1.75%
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.82 (A) 1.95% 2.38% 2.21% 2.15%
Ratio of Net Investment Income (Loss) to Average
Net Assets (0.26) (A) 0.05% (0.13)% 0.32% 0.60%
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (0.33) (A) (0.15)% (0.76)% (0.14)% 0.18%
Portfolio Turnover Rate 50.39 (A) 62.51% 143.58% 36.50% 16.70%
<CAPTION>
FOR THE PERIOD
10/1/93
SMALL COMPANY VALUE FUND (CLASS A) THROUGH 12/31/93
- --------------------------------------------------
<S> <C>
Net Asset Value Beginning of Period $ 5.00
Net Investment Income (Loss) 0.01
Net Realized and Unrealized Gain (Loss) on
Investments 0.29
------
Total from Investment Operations 0.30
------
Dividends from Net Investment Income 0.01
Distributions from Capital Gains --
------
Total Distributions 0.01
------
Net Asset Value End of Period $ 5.29
------
Total Return(C) 5.92%(B)
Net Assets End of Period (in thousands) $ 8,118
Ratio of Expenses to Average Net Assets 1.75 %(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 4.00 %(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 0.10 %(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (1.54) %(A)
Portfolio Turnover Rate -- %(A)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER
(UNAUDITED) 31, FOR THE PERIOD
SIX MONTHS ENDED -------------------- 5/1/95
SMALL COMPANY VALUE FUND (CLASS B) JUNE 30, 1998 1997 1996 THROUGH 12/31/95
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 7.63 $ 5.69 $ 5.41 $ 5.28
Net Investment Income (Loss) (0.02) -- (0.03) (0.01)
Net Realized and Unrealized Gain (Loss) on
Investments 0.87 2.47 0.61 0.36
------- --------- --------- -----
Total from Investment Operations 0.85 2.47 0.58 0.35
------- --------- --------- -----
Dividends from Net Investment Income -- -- -- 0.02
Distributions from Capital Gains -- 0.53 0.30 0.20
------- --------- --------- -----
Total Distributions -- 0.53 0.30 0.22
------- --------- --------- -----
Net Asset Value End of Period $ 8.48 $ 7.63 $ 5.69 $ 5.41
------- --------- --------- -----
Total Return(D) 11.14%(B) 43.40% 10.77% 6.87%(B)
Net Assets End of Period (in thousands) $ 50,688 $ 22,013 $ 2,606 $ 862
Ratio of Expenses to Average Net Assets 2.30 (A) 2.30% 2.30% 2.30 %(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.38 (A) 2.44% 2.92% 2.78 %(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (0.80) (A) (0.67)% (0.77)% (0.40) %(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (0.88) (A) (0.81)% (1.39)% (0.90) %(A)
Portfolio Turnover Rate 50.39 (A) 62.51% 143.58% 36.50 %(A)
</TABLE>
See notes to financial statements.
84 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
SMALL COMPANY VALUE FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE PERIOD
SIX MONTHS ENDED 5/1/97
SMALL COMPANY VALUE FUND (CLASS C) JUNE 30, 1998 THROUGH 12/31/97
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 7.74 $ 6.14
Net Investment Income (Loss) (0.02) (0.02)
Net Realized and Unrealized Gain (Loss) on
Investments 0.87 2.15
------ ------
Total from Investment Operations 0.85 2.13
------ ------
Dividends from Net Investment Income -- --
Distributions from Capital Gains -- 0.53
------ ------
Total Distributions -- 0.53
------ ------
Net Asset Value End of Period $ 8.59 $ 7.74
------ ------
Total Return(D) 10.98%(B) 34.68%(B)
Net Assets End of Period (in thousands) $ 8,480 $ 2,684
Ratio of Expenses to Average Net Assets 2.30%(A) 2.30%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.35%(A) 2.38%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (0.81)%(A) (0.88)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (0.84)%(A) (0.95)%(A)
Portfolio Turnover Rate 50.39%(A) 62.51%(A)
<CAPTION>
SMALL COMPANY VALUE FUND (CLASS C)
- --------------------------------------------------
<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 (Loss) to Average
Net Assets
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers)
Portfolio Turnover Rate
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED)
SIX
MONTHS YEAR ENDED DECEMBER
ENDED 31, FOR THE PERIOD
JUNE 30, ------------------- 5/25/95
SMALL COMPANY VALUE FUND (CLASS Y) 1998 1997 1996 THROUGH 12/31/95
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 7.81 $ 5.77 $ 5.43 $ 5.37
Net Investment Income (Loss) 0.01 1.45 0.01 0.04
Net Realized and Unrealized Gain (Loss) on
Investments 0.91 1.12 0.63 0.26
-------- -------- -------- ------
Total from Investment Operations 0.92 2.57 0.64 0.30
-------- -------- -------- ------
Dividends from Net Investment Income -- -- -- 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 $ 8.73 $ 7.81 $ 5.77 $ 5.43
-------- -------- -------- ------
Total Return 11.78%(B) 44.53% 11.83% 5.55%(B)
Net Assets End of Period (in thousands) $ 243 $ 119 $ 1,926 $ 2,832
Ratio of Expenses to Average Net Assets 1.30%(A) 1.30% 1.30% 1.30%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.35%(A) 1.85% 1.92% 1.81%(A)
Ratio of Net Investment Income to Average Net
Assets 0.19%(A) 2.74% 0.35% 0.18%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 0.14%(A) 2.19% (0.27)% (0.33)%(A)
Portfolio Turnover Rate 50.39%(A) 62.51% 143.58% 36.50%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 85
<PAGE>
INTERNATIONAL GROWTH FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
SIX
MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, ----------------------------------------------------
INTERNATIONAL GROWTH FUND (CLASS A) 1998 1997 1996 1995 1994 1993
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 16.71 $ 17.10 $ 16.08 $ 14.70 $ 17.44 $ 13.23
Net Investment Income (Loss) 0.08 0.08 0.10 0.11 (0.01) (0.02)
Net Realized and Unrealized Gain (Loss) on
Investments 2.09 0.73 1.88 2.12 (0.49) 4.79
-------- -------- -------- -------- -------- --------
Total from Investment Operations 2.17 0.81 1.98 2.23 (0.50) 4.77
-------- -------- -------- -------- -------- --------
Dividends from Net Investment Income -- 0.07 0.09 0.09 -- --
Distributions from Capital Gains -- 1.13 0.87 0.76 2.24 0.17
Other -- -- -- -- -- 0.39
-------- -------- -------- -------- -------- --------
Total Distributions -- 1.20 0.96 0.85 2.24 0.56
-------- -------- -------- -------- -------- --------
Net Asset Value End of Period $ 18.88 $ 16.71 $ 17.10 $ 16.08 $ 14.70 $ 17.44
-------- -------- -------- -------- -------- --------
Total Return(C) 12.99%(B) 4.75% 12.32% 15.17% (2.82)% 36.05%
Net Assets End of Period (in thousands) $42,877 $ 38,020 $ 34,837 $ 28,628 $ 27,523 $ 22,900
Ratio of Expenses to Average Net Assets 2.00%(A) 2.00% 2.00% 2.00% 2.00% 2.00%
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.04%(A) 2.11% 2.19% 2.40% 2.51% 3.06%
Ratio of Net Investment Income (Loss) to Average
Net Assets 0.97%(A) 0.50% 0.61% 0.70% (0.20)% (0.10)%
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 0.93%(A) 0.39% 0.42% 0.30% (0.70)% (1.15)%
Portfolio Turnover Rate 38.09%(A) 27.08% 23.79% 31.10% 116.10% 70.10%
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED)
SIX
MONTHS YEAR ENDED
ENDED DECEMBER 31, FOR THE PERIOD
JUNE 30, ------------------- 5/1/95
INTERNATIONAL GROWTH FUND (CLASS B) 1998 1997 1996 THROUGH 12/31/95
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 16.53 $ 16.97 $ 16.02 $14.82
Net Investment Income (Loss) 0.04 0.01 0.01 (0.02)
Net Realized and Unrealized Gain (Loss) on
Investments 2.05 0.69 1.87 2.08
-------- -------- -------- ------
Total from Investment Operations 2.09 0.70 1.88 2.06
-------- -------- -------- ------
Dividends from Net Investment Income -- 0.01 0.06 0.10
Distributions from Capital Gains -- 1.13 0.87 0.76
-------- -------- -------- ------
Total Distributions -- 1.14 0.93 0.86
-------- -------- -------- ------
Net Asset Value End of Period $ 18.62 $ 16.53 $ 16.97 $16.02
-------- -------- -------- ------
Total Return(D) 12.64%(B) 4.17% 11.72% 13.88%(B)
Net Assets End of Period (in thousands) $14,244 $ 9,878 $ 4,276 $1,094
Ratio of Expenses to Average Net Assets 2.55%(A) 2.55% 2.55% 2.55%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.59%(A) 2.67% 2.75% 2.73%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 0.50%(A) (0.06)% 0.09% (0.65)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 0.46%(A) (0.18)% (0.11)% (0.85)%(A)
Portfolio Turnover Rate 38.09%(A) 27.08% 23.79% 31.10%(A)
</TABLE>
See notes to financial statements.
86 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
INTERNATIONAL GROWTH FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE PERIOD
SIX MONTHS ENDED 5/1/97
INTERNATIONAL GROWTH FUND (CLASS C) JUNE 30, 1998 THROUGH 12/31/97
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 16.66 $ 17.51
Net Investment Income (Loss) 0.04 (0.03)
Net Realized and Unrealized Gain (Loss) on
Investments 2.06 0.39
------ ------
Total from Investment Operations 2.10 0.36
------ ------
Dividends from Net Investment Income -- 0.08
Distributions from Capital Gains -- 1.13
------ ------
Total Distributions -- 1.21
------ ------
Net Asset Value End of Period $ 18.76 $ 16.66
------ ------
Total Return(D) 12.61%(B) 2.07%(B)
Net Assets End of Period (in thousands) $ 2,261 $ 1,113
Ratio of Expenses to Average Net Assets 2.55%(A) 2.55%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.59%(A) 2.75%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 0.60%(A) (0.51)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 0.56%(A) (0.71)%(A)
Portfolio Turnover Rate 38.09%(A) 27.08%(A)
<CAPTION>
INTERNATIONAL GROWTH FUND (CLASS C)
- --------------------------------------------------
<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 (Loss) to Average
Net Assets
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers)
Portfolio Turnover Rate
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED)
SIX
MONTHS YEAR ENDED DECEMBER
ENDED 31, FOR THE PERIOD
JUNE 30, ------------------- 7/5/95
INTERNATIONAL GROWTH FUND (CLASS Y) 1998 1997 1996 THROUGH 12/31/95
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 16.71 $ 17.10 $ 16.07 $14.93
Net Investment Income (Loss) 0.13 0.17 0.14 0.02
Net Realized and Unrealized Gain (Loss) on
Investments 2.08 0.72 1.92 2.02
-------- -------- -------- ------
Total from Investment Operations 2.21 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 $ 18.92 $ 16.71 $ 17.10 $16.07
-------- -------- -------- ------
Total Return 13.23%(B) 5.21% 12.86% 13.65%(B)
Net Assets End of Period (in thousands) $13,079 $ 10,986 $ 8,828 $3,109
Ratio of Expenses to Average Net Assets 1.55%(A) 1.55% 1.55% 1.55%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.59%(A) 1.66% 1.75% 1.75%(A)
Ratio of Net Investment Income to Average Net
Assets 1.46%(A) 0.95% 1.03% 0.26%(A)
Ratio of Net Investment Income to Average Net
Assets (Excluding Waivers) 1.42%(A) 0.84% 0.84% 0.05%(A)
Portfolio Turnover Rate 38.09%(A) 27.08% 23.79% 31.10%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 87
<PAGE>
GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED -----------------------------------------------------
GOVERNMENT SECURITIES FUND (CLASS A) JUNE 30, 1998 1997 1996 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 12.03 $ 11.80 $ 11.83 $ 10.62 $ 12.44 $ 12.47
Net Investment Income (Loss) 0.35 0.73 0.74 0.76 0.87 0.92
Net Realized and Unrealized Gain (Loss) on
Investments 0.06 0.23 (0.03) 1.21 (1.82) 0.21
------- --------- --------- --------- --------- ---------
Total from Investment Operations 0.41 0.96 0.71 1.97 (0.95) 1.13
------- --------- --------- --------- --------- ---------
Dividends from Net Investment Income 0.35 0.73 0.74 0.76 0.87 0.92
Distributions from Capital Gains -- -- -- -- -- 0.24
------- --------- --------- --------- --------- ---------
Total Distributions 0.35 0.73 0.74 0.76 0.87 1.16
------- --------- --------- --------- --------- ---------
Net Asset Value End of Period $ 12.09 $ 12.03 $ 11.80 $ 11.83 $ 10.62 $ 12.44
------- --------- --------- --------- --------- ---------
Total Return(C) 3.43%(B) 8.39% 6.29% 19.00% (7.81)% 9.26%
Net Assets End of Period (in thousands) $ 68,270 $ 68,639 $ 73,693 $ 86,224 $ 84,431 $ 106,541
Ratio of Expenses to Average Net Assets 1.30%(A) 1.30% 1.30% 1.30% 1.30% 1.30%
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.34%(A) 1.46% 1.42% 1.44% 1.35% 1.44%
Ratio of Net Investment Income to Average Net
Assets 5.80%(A) 6.16% 6.35% 6.66% 7.60% 7.20%
Ratio of Net Investment Income to Average Net
Assets (Excluding Waivers) 5.76%(A) 6.00% 6.23% 6.52% 7.59% 7.03%
Portfolio Turnover Rate 14.58%(A) 9.61% 0.17% --% 27.20% 90.10%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER
(UNAUDITED) 31, FOR THE PERIOD
SIX MONTHS ENDED -------------------- 5/1/95
GOVERNMENT SECURITIES FUND (CLASS B) JUNE 30, 1998 1997 1996 THROUGH 12/31/95
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 12.02 $ 11.79 $ 11.83 $ 11.12
Net Investment Income (Loss) 0.31 0.66 0.68 0.44
Net Realized and Unrealized Gain (Loss) on
Investments 0.07 0.23 (0.04) 0.71
------- --------- --------- ------
Total from Investment Operations 0.38 0.89 0.64 1.15
------- --------- --------- ------
Dividends from Net Investment Income 0.31 0.66 0.68 0.44
Distributions from Capital Gains -- -- -- --
------- --------- --------- ------
Total Distributions 0.31 0.66 0.68 0.44
------- --------- --------- ------
Net Asset Value End of Period $ 12.09 $ 12.02 $ 11.79 $ 11.83
------- --------- --------- ------
Total Return(D) 3.23%(B) 7.81% 5.61% 10.47%(B)
Net Assets End of Period (in thousands) $ 17,397 $ 12,285 $ 5,683 $ 2,124
Ratio of Expenses to Average Net Assets 1.85%(A) 1.85% 1.85% 1.85%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.88%(A) 2.01% 1.96% 1.91%(A)
Ratio of Net Investment Income to Average Net
Assets 5.22%(A) 5.55% 5.79% 5.64%(A)
Ratio of Net Investment Income to Average Net
Assets (Excluding Waivers) 5.19%(A) 5.39% 5.68% 5.58%(A)
Portfolio Turnover Rate 14.58%(A) 9.61% 0.17% --%(A)
</TABLE>
See notes to financial statements.
88 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE PERIOD
SIX MONTHS ENDED 5/1/97
GOVERNMENT SECURITIES FUND (CLASS C) JUNE 30, 1998 THROUGH 12/31/97
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 12.03 $ 11.63
Net Investment Income (Loss) 0.32 0.46
Net Realized and Unrealized Gain (Loss) on
Investments 0.06 0.40
------ ------
Total from Investment Operations 0.38 0.86
------ ------
Dividends from Net Investment Income 0.32 0.46
Distributions from Capital Gains -- --
------ ------
Total Distributions 0.32 0.46
------ ------
Net Asset Value End of Period $ 12.09 $ 12.03
------ ------
Total Return(D) 3.15%(B) 7.49%(B)
Net Assets End of Period (in thousands) $ 1,427 $ 498
Ratio of Expenses to Average Net Assets 1.85%(A) 1.85%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.87%(A) 2.03%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 5.21%(A) 5.39%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 5.19%(A) 5.21%(A)
Portfolio Turnover Rate 14.58%(A) 9.61%(A)
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE PERIOD
SIX MONTHS ENDED 7/17/97
GOVERNMENT SECURITIES FUND (CLASS Y) JUNE 30, 1998 THROUGH 12/31/97
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 12.02 $ 11.87
Net Investment Income (Loss) 0.38 0.35
Net Realized and Unrealized Gain (Loss) on
Investments 0.07 0.15
------ ------
Total from Investment Operations 0.45 0.50
------ ------
Dividends from Net Investment Income 0.38 0.35
Distributions from Capital Gains -- --
------ ------
Total Distributions 0.38 0.35
------ ------
Net Asset Value End of Period $ 12.09 $ 12.02
------ ------
Total Return 3.74%(B) 4.02%(B)
Net Assets End of Period (in thousands) $ 7,885 $ 7,569
Ratio of Expenses to Average Net Assets 0.85%(A) 0.85%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 0.89%(A) 1.02%(A)
Ratio of Net Investment Income to Average Net
Assets 6.25%(A) 6.40%(A)
Ratio of Net Investment Income to Average Net
Assets (Excluding Waivers) 6.21%(A) 6.23%(A)
Portfolio Turnover Rate 14.58%(A) 9.61%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 89
<PAGE>
HIGH-YIELD BOND FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED -----------------------------------------------------
HIGH-YIELD BOND FUND (CLASS A) JUNE 30, 1998 1997 1996 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 12.35 $ 11.84 $ 11.39 $ 10.72 $ 11.70 $ 10.83
Net Investment Income (Loss) 0.46 0.99 0.94 0.99 0.97 0.95
Net Realized and Unrealized Gain (Loss) on
Investments 0.08 0.51 0.45 0.67 (0.97) 0.89
------- --------- --------- --------- --------- ---------
Total from Investment Operations 0.54 1.50 1.39 1.66 -- 1.84
------- --------- --------- --------- --------- ---------
Dividends from Net Investment Income 0.46 0.99 0.94 0.99 0.98 0.97
Distributions from Capital Gains -- -- -- -- -- --
------- --------- --------- --------- --------- ---------
Total Distributions 0.46 0.99 0.94 0.99 0.98 0.97
------- --------- --------- --------- --------- ---------
Net Asset Value End of Period $ 12.43 $ 12.35 $ 11.84 $ 11.39 $ 10.72 $ 11.70
------- --------- --------- --------- --------- ---------
Total Return(C) 4.43%(B) 13.18% 12.78% 16.00% 0.05% 17.58%
Net Assets End of Period (in thousands) $ 73,016 $ 66,422 $ 54,129 $ 52,182 $ 44,822 $ 44,361
Ratio of Expenses to Average Net Assets 1.30%(A) 1.30% 1.30% 1.30% 1.30% 1.30%
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.42%(A) 1.47% 1.50% 1.52% 1.45% 1.59%
Ratio of Net Investment Income to Average Net
Assets 7.44%(A) 8.20% 8.21% 8.80% 8.60% 8.20%
Ratio of Net Investment Income to Average Net
Assets (Excluding Waivers) 7.33%(A) 8.03% 8.01% 8.58% 8.52% 7.95%
Portfolio Turnover Rate 128.10%(A) 175.38% 180.13% 88.50% 113.00% 121.20%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER
(UNAUDITED) 31, FOR THE PERIOD
SIX MONTHS ENDED -------------------- 5/1/95
HIGH-YIELD BOND FUND (CLASS B) JUNE 30, 1998 1997 1996 THROUGH 12/31/95
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 12.35 $ 11.84 $ 11.39 $ 11.11
Net Investment Income (Loss) 0.43 0.77 0.88 0.61
Net Realized and Unrealized Gain (Loss) on
Investments 0.08 0.51 0.45 0.28
------- --------- --------- ------
Total from Investment Operations 0.51 1.28 1.33 0.89
------- --------- --------- ------
Dividends from Net Investment Income 0.43 0.77 0.88 0.61
Distributions from Capital Gains -- -- -- --
------- --------- --------- ------
Total Distributions 0.43 0.77 0.88 0.61
------- --------- --------- ------
Net Asset Value End of Period $ 12.43 $ 12.35 $ 11.84 $ 11.39
------- --------- --------- ------
Total Return(D) 4.14(B) 12.59% 12.16% 8.12%(B)
Net Assets End of Period (in thousands) $ 30,424 $ 19,898 $ 7,892 $ 2,951
Ratio of Expenses to Average Net Assets 1.85%(A) 1.85% 1.85% 1.85%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.96%(A) 2.02% 2.05% 2.09%(A)
Ratio of Net Investment Income to Average Net
Assets 6.88%(A) 7.51% 7.74% 7.84%(A)
Ratio of Net Investment Income to Average Net
Assets (Excluding Waivers) 6.77%(A) 7.35% 7.55% 7.68%(A)
Portfolio Turnover Rate 128.10%(A) 175.38% 180.13% 88.50%(A)
</TABLE>
See notes to financial statements.
90 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
HIGH-YIELD BOND FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE PERIOD
SIX MONTHS ENDED 5/1/97
HIGH-YIELD BOND FUND (CLASS C) JUNE 30, 1998 THROUGH 12/31/97
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 12.35 $ 11.71
Net Investment Income (Loss) 0.43 0.61
Net Realized and Unrealized Gain (Loss) on
Investments 0.08 0.64
------ ------
Total from Investment Operations 0.51 1.25
------ ------
Dividends from Net Investment Income 0.43 0.61
Distributions from Capital Gains -- --
------ ------
Total Distributions 0.43 0.61
------ ------
Net Asset Value End of Period $ 12.43 $ 12.35
------ ------
Total Return(D) 4.14%(B) 10.87%(B)
Net Assets End of Period (in thousands) $ 4,116 $ 1,463
Ratio of Expenses to Average Net Assets 1.85%(A) 1.85%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.95%(A) 2.01%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 6.88%(A) 6.84%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 6.78%(A) 6.68%(A)
Portfolio Turnover Rate 128.10%(A) 175.38%(A)
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE PERIOD
SIX MONTHS ENDED 7/25/97
HIGH-YIELD BOND FUND (CLASS Y) JUNE 30, 1998 THROUGH 12/31/97
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 12.35 $ 12.17
Net Investment Income (Loss) 0.49 0.67
Net Realized and Unrealized Gain (Loss) on
Investments 0.08 0.18
------ ------
Total from Investment Operations 0.57 0.85
------ ------
Dividends from Net Investment Income 0.49 0.67
Distributions from Capital Gains -- --
------ ------
Total Distributions 0.49 0.67
------ ------
Net Asset Value End of Period $ 12.43 $ 12.35
------ ------
Total Return 4.66%(B) 5.24%(B)
Net Assets End of Period (in thousands) $ 1,054 $ 809
Ratio of Expenses to Average Net Assets 0.85%(A) 0.85%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 0.96%(A) 1.02%(A)
Ratio of Net Investment Income to Average Net
Assets 7.92%(A) 8.26%(A)
Ratio of Net Investment Income to Average Net
Assets (Excluding Waivers) 7.81%(A) 8.09%(A)
Portfolio Turnover Rate 128.10%(A) 175.38%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 91
<PAGE>
TAX-EXEMPT INCOME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED -----------------------------------------------------
TAX-EXEMPT INCOME FUND (CLASS A) JUNE 30, 1998 1997 1996 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 13.95 $ 13.83 $ 13.99 $ 12.80 $ 14.31 $ 13.60
Net Investment Income (Loss) 0.30 0.63 0.64 0.65 0.67 0.70
Net Realized and Unrealized Gain (Loss) on
Investments 0.08 0.31 (0.16) 1.21 (1.48) 0.73
------- --------- --------- --------- --------- ---------
Total from Investment Operations 0.38 0.94 0.48 1.86 (0.81) 1.43
------- --------- --------- --------- --------- ---------
Dividends from Net Investment Income 0.30 0.63 0.64 0.65 0.68 0.70
Distributions from Capital Gains -- 0.19 -- 0.02 0.02 0.02
------- --------- --------- --------- --------- ---------
Total Distributions 0.30 0.82 0.64 0.67 0.70 0.72
------- --------- --------- --------- --------- ---------
Net Asset Value End of Period $ 14.03 $ 13.95 $ 13.83 $ 13.99 $ 12.80 $ 14.31
------- --------- --------- --------- --------- ---------
Total Return(C) 2.81%(B) 6.96% 3.54% 14.85% (5.69)% 10.76%
Net Assets End of Period (in thousands) $ 23,699 $ 23,695 $ 28,478 $ 33,626 $ 34,297 $ 41,702
Ratio of Expenses to Average Net Assets 1.10%(A) 1.22% 1.25% 1.25% 1.25% 1.25%
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.30%(A) 1.60% 1.41% 1.42% 1.28% 1.39%
Ratio of Net Investment Income to Average Net
Assets 4.43%(A) 4.50% 4.64% 4.82% 5.00% 4.90%
Ratio of Net Investment Income to Average Net
Assets (Excluding Waivers) 4.23%(A) 4.12% 4.48% 4.65% 4.97% 4.79%
Portfolio Turnover Rate 169.21%(A) 0.94% 0.91% 0.75% 25.70% 8.30%
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED)
SIX
MONTHS
ENDED YEAR ENDED
JUNE DECEMBER 31, FOR THE PERIOD
30, ----------------- 5/1/95
TAX-EXEMPT INCOME FUND (CLASS B) 1998 1997 1996 THROUGH 12/31/95
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $13.95 $ 13.83 $ 13.99 $13.44
Net Investment Income (Loss) 0.27 0.55 0.56 0.38
Net Realized and Unrealized Gain (Loss) on
Investments 0.09 0.31 (0.16) 0.57
------- ------- ------- ------
Total from Investment Operations 0.36 0.86 0.40 0.95
------- ------- ------- ------
Dividends from Net Investment Income 0.27 0.55 0.56 0.38
Distributions from Capital Gains -- 0.19 -- 0.02
------- ------- ------- ------
Total Distributions 0.27 0.74 0.56 0.40
------- ------- ------- ------
Net Asset Value End of Period $14.04 $ 13.95 $ 13.83 $13.99
------- ------- ------- ------
Total Return(D) 2.60%(B) 6.36% 2.96% 7.18%(B)
Net Assets End of Period (in thousands) $3,300 $ 2,883 $ 2,037 $ 912
Ratio of Expenses to Average Net Assets 1.65%(A) 1.76% 1.80% 1.80%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.86%(A) 2.16% 1.96% 1.98%(A)
Ratio of Net Investment Income to Average Net
Assets 3.88%(A) 3.94% 4.07% 4.08%(A)
Ratio of Net Investment Income to Average Net
Assets (Excluding Waivers) 3.67%(A) 3.54% 3.92% 3.94%(A)
Portfolio Turnover Rate 169.21%(A) 0.94% 0.91% 0.75%(A)
</TABLE>
See notes to financial statements.
92 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
TAX-EXEMPT INCOME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE PERIOD
SIX MONTHS ENDED 5/1/97
TAX-EXEMPT INCOME FUND (CLASS C) JUNE 30, 1998 THROUGH 12/31/97
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 13.95 $ 13.68
Net Investment Income (Loss) 0.27 0.36
Net Realized and Unrealized Gain (Loss) on
Investments 0.08 0.46
------ ------
Total from Investment Operations 0.35 0.82
------ ------
Dividends from Net Investment Income 0.27 0.36
Distributions from Capital Gains -- 0.19
------ ------
Total Distributions 0.27 0.55
------ ------
Net Asset Value End of Period $ 14.03 $ 13.95
------ ------
Total Return(D) 2.53%(B) 6.14%(B)
Net Assets End of Period (in thousands) $ 415 $ 184
Ratio of Expenses to Average Net Assets 1.65%(A) 1.67%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.71%(A) 2.34%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 3.88%(A) 3.99%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 3.82%(A) 3.32%(A)
Portfolio Turnover Rate 169.21%(A) 0.94%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 93
<PAGE>
MANAGED FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) YEAR ENDED DECEMBER 31, FOR THE PERIOD
SIX MONTHS ENDED ------------------------------- 10/1/94
MANAGED FUND (CLASS A) JUNE 30, 1998 1997 1996 1995 THROUGH 12/31/94
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 9.25 $ 7.97 $ 6.70 $ 4.91 $ 5.00
Net Investment Income (Loss) 0.03 0.04 0.06 0.04 0.01
Net Realized and Unrealized Gain (Loss) on Investments 1.06 1.64 1.41 1.81 (0.09)
------- --------- --------- --------- ------
Total from Investment Operations 1.09 1.68 1.47 1.85 (0.08)
------- --------- --------- --------- ------
Dividends from Net Investment Income -- 0.04 0.06 0.03 0.01
Distributions from Capital Gains -- 0.36 0.14 0.03 --
------- --------- --------- --------- ------
Total Distributions -- 0.40 0.20 0.06 0.01
------- --------- --------- --------- ------
Net Asset Value End of Period $ 10.34 $ 9.25 $ 7.97 $ 6.70 $ 4.91
------- --------- --------- --------- ------
Total Return(C) 11.78%(B) 21.05% 22.08% 37.68% (1.58)%(B)
Net Assets End of Period (in thousands) $ 188,499 $ 156,608 $ 101,022 $ 47,839 $ 7,872
Ratio of Expenses to Average Net Assets 1.48%(A) 1.49% 1.57% 1.75% 1.75%(A)
Ratio of Expenses to Average Net Assets (Excluding Waivers) 1.48%(A) 1.49% 1.57% 1.90% 3.71%(A)
Ratio of Net Investment Income to Average Net Assets 0.59%(A) 0.47% 1.12% 1.09% 1.30%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers) 0.59%(A) 0.47% 1.12% 0.94% (0.32)%(A)
Portfolio Turnover Rate 30.37%(A) 28.17% 33.21% 26.40% 27.10%(A)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER
(UNAUDITED) 31, FOR THE PERIOD
SIX MONTHS ENDED -------------------- 5/1/95
MANAGED FUND (CLASS B) JUNE 30, 1998 1997 1996 THROUGH 12/31/95
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 9.19 $ 7.93 $ 6.68 $ 5.68
Net Investment Income (Loss) -- (0.01) 0.02 0.01
Net Realized and Unrealized Gain (Loss) on Investments 1.05 1.63 1.41 1.05
------- --------- --------- -------
Total from Investment Operations 1.05 1.62 1.43 1.06
------- --------- --------- -------
Dividends from Net Investment Income -- -- 0.04 0.03
Distributions from Capital Gains -- 0.36 0.14 0.03
------- --------- --------- -------
Total Distributions -- 0.36 0.18 0.06
------- --------- --------- -------
Net Asset Value End of Period $ 10.24 $ 9.19 $ 7.93 $ 6.68
------- --------- --------- -------
Total Return(D) 11.43%(B) 20.45% 21.50% 18.38%(B)
Net Assets End of Period (in thousands) $ 154,328 $ 110,213 $ 57,037 $ 16,792
Ratio of Expenses to Average Net Assets 2.03%(A) 2.04% 2.13% 2.30%(A)
Ratio of Expenses to Average Net Assets (Excluding Waivers) 2.03%(A) 2.04% 2.13% 2.45%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 0.04%(A) (0.09)% 0.52% 0.31%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers) 0.04%(A) (0.09)% 0.52% 0.14%(A)
Portfolio Turnover Rate 30.37%(A) 28.17% 33.21% 26.40%(A)
</TABLE>
See notes to financial statements.
94 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
MANAGED FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE PERIOD
SIX MONTHS ENDED 5/1/97
MANAGED FUND (CLASS C) JUNE 30, 1998 THROUGH 12/31/97
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 9.21 $ 8.24
Net Investment Income (Loss) -- --
Net Realized and Unrealized Gain (Loss) on
Investments 1.06 1.38
------ ------
Total from Investment Operations 1.06 1.38
------ ------
Dividends from Net Investment Income -- 0.05
Distributions from Capital Gains -- 0.36
------ ------
Total Distributions -- 0.41
------ ------
Net Asset Value End of Period $ 10.27 $ 9.21
------ ------
Total Return(D) 11.51%(B) 16.74%(B)
Net Assets End of Period (in thousands) $ 9,609 $ 3,614
Ratio of Expenses to Average Net Assets 2.04%(A) 2.06%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.04%(A) 2.06%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 0.05%(A) (0.18)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 0.05%(A) (0.18)%(A)
Portfolio Turnover Rate 30.37%(A) 28.17%(A)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER
(UNAUDITED) 31, FOR THE PERIOD
SIX MONTHS ENDED -------------------- 7/5/95
MANAGED FUND (CLASS Y) JUNE 30, 1998 1997 1996 THROUGH 12/31/95
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 9.27 $ 7.98 $ 6.70 $ 6.17
Net Investment Income (Loss) 0.05 0.08 0.09 0.03
Net Realized and Unrealized Gain (Loss) on
Investments 1.07 1.64 1.42 0.57
------- --------- --------- -------
Total from Investment Operations 1.12 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 $ 10.39 $ 9.27 $ 7.98 $ 6.70
------- --------- --------- -------
Total Return 12.08%(B) 21.60% 22.63% 9.80%(B)
Net Assets End of Period (in thousands) $ 97,581 $ 80,879 $ 57,794 $ 26,664
Ratio of Expenses to Average Net Assets 1.03%(A) 1.04% 1.12% 1.30%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.03%(A) 1.04% 1.12% 1.41%(A)
Ratio of Net Investment Income to Average Net
Assets 1.04%(A) 0.92% 1.57% 1.39%(A)
Ratio of Net Investment Income to Average Net
Assets (Excluding Waivers) 1.04%(A) 0.92% 1.57% 1.28%(A)
Portfolio Turnover Rate 30.37%(A) 28.17% 33.21% 26.40%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 95
<PAGE>
MONEY MARKET FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
SIX
MONTHS
ENDED FOR THE YEAR ENDED DECEMBER 31,
JUNE 30, ----------------------------------------------------
MONEY MARKET FUND (CLASS A) 1998 1997 1996 1995 1994 1993
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net Investment Income (Loss) 0.02 0.05 0.04 0.05 0.03 0.02
Net Realized and Unrealized Gain (Loss) on
Investments -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Total from Investment Operations 0.02 0.05 0.04 0.05 0.03 0.02
-------- -------- -------- -------- -------- --------
Dividends from Net Investment Income 0.02 0.05 0.04 0.05 0.03 0.02
-------- -------- -------- -------- -------- --------
Total Distributions 0.02 0.05 0.04 0.05 0.03 0.02
-------- -------- -------- -------- -------- --------
Net Asset Value End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- --------
Total Return 2.49%(B) 4.69% 4.51% 5.05% 3.34% 2.24%
Net Assets End of Period (in thousands) $87,339 $ 68,466 $ 59,074 $ 40,325 $ 32,334 $ 18,302
Ratio of Expenses to Average Net Assets 0.68%(A) 1.00% 1.00% 1.00% 1.00% 1.00%
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 0.68%(A) 1.24% 1.18% 1.35% 1.33% 1.72%
Ratio of Net Investment Income to Average Net
Assets 4.97%(A) 4.59% 4.42% 4.92% 3.30% 2.20%
Ratio of Net Investment Income to Average Net
Assets (Excluding Waivers) 4.97%(A) 4.35% 4.24% 4.57% 3.08% 1.47%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED
(UNAUDITED) DECEMBER 31, FOR THE PERIOD
SIX MONTHS ENDED -------------------- 5/1/95
MONEY MARKET FUND (CLASS B) JUNE 30, 1998 1997 1996 THROUGH 12/31/95
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net Investment Income (Loss) 0.03 0.04 0.04 0.03
Net Realized and Unrealized Gain (Loss) on
Investments -- -- -- --
------ --------- --------- -----
Total from Investment Operations 0.03 0.04 0.04 0.03
------ --------- --------- -----
Dividends from Net Investment Income 0.03 0.04 0.04 0.03
------ --------- --------- -----
Total Distributions 0.03 0.04 0.04 0.03
------ --------- --------- -----
Net Asset Value End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ --------- --------- -----
Total Return(D) 2.49%(B) 4.11% 3.94% 2.95%(B)
Net Assets End of Period (in thousands) $ 6,609 $ 5,980 $ 1,344 $ 394
Ratio of Expenses to Average Net Assets 0.68%(A) 1.55% 1.55% 1.55%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 0.68%(A) 1.79% 1.73% 1.88%(A)
Ratio of Net Investment Income to Average Net
Assets 4.98%(A) 4.09% 3.85% 4.23%(A)
Ratio of Net Investment Income to Average Net
Assets (Excluding Waivers) 4.98%(A) 3.85% 3.68% 3.90%(A)
</TABLE>
See notes to financial statements.
96 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
MONEY MARKET FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE PERIOD
SIX MONTHS ENDED 5/1/97
MONEY MARKET FUND (CLASS C) JUNE 30, 1998 THROUGH 12/31/97
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 1.00 $ 1.00
Net Investment Income (Loss) 0.03 0.02
Net Realized and Unrealized Gain (Loss) on
Investments -- --
------ ------
Total from Investment Operations 0.03 0.02
------ ------
Dividends from Net Investment Income 0.03 0.02
------ ------
Total Distributions 0.03 0.02
------ ------
Net Asset Value End of Period $ 1.00 $ 1.00
------ ------
Total Return(D) 2.50%(B) 2.86%(B)
Net Assets End of Period (in thousands) $ 2,553 $ 1,021
Ratio of Expenses to Average Net Assets 0.67%(A) 1.55%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 0.67%(A) 1.85%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 4.97%(A) 4.15%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 4.97%(A) 3.85%(A)
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE PERIOD
SIX MONTHS ENDED 7/17/97
MONEY MARKET FUND (CLASS Y) JUNE 30, 1998 THROUGH 12/31/97
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 1.00 $ 1.00
Net Investment Income (Loss) 0.02 0.02
Net Realized and Unrealized Gain (Loss) on
Investments -- --
------ ------
Total from Investment Operations 0.02 0.02
------ ------
Dividends from Net Investment Income 0.02 0.02
------ ------
Total Distributions 0.02 0.02
------ ------
Net Asset Value End of Period $ 1.00 $ 1.00
------ ------
Total Return 2.49%(B) 2.31%(B)
Net Assets End of Period (in thousands) $ 2,692 $ 2,700
Ratio of Expenses to Average Net Assets 0.68%(A) 0.70%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 0.68%(A) 0.95%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 4.97%(A) 4.96%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 4.97%(A) 4.71%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 97
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
June 30, 1998
- --------------------------------------------------------------------------------
1. ORGANIZATION
The Enterprise Group of Funds, Inc. ("EGF") is registered under The Investment
Company Act of 1940 as an open-end management investment company and consists of
the Growth, Equity, Growth and Income, Equity Income, Capital Appreciation,
Small Company Growth, Small Company Value, International Growth, Government
Securities, High-Yield Bond, Tax-Exempt Income, Managed and Money Market Funds.
EGF offers Class A, B, C and Y shares. Shares of each class represent an
identical interest in the investments of their respective funds and generally
have the same rights, but are offered with different sales charge and
distribution fee arrangements. Class A shares, with the exception of the Money
Market Fund, are subject to a maximum sales charge of 4.75%. Class B shares are
subject to a maximum contingent sales charge of 5%, which declines to zero after
six years and which is based on the lesser of net asset value at the time of
purchase or redemption. Class B shares automatically convert to Class A shares
of the same fund eight years after purchase. Class C shares are subject to a
maximum contingent sales charge of 1%, which declines to zero after one year and
which is based on the lesser of net asset value at the time of purchase or
redemption. Class Y shares are not subject to sales charges.
Prior to July 17, 1997, the Growth and Income and Small Company Growth Funds
were part of Retirement System Fund Inc. ("RSF"). On July 17, 1997, EGF acquired
all of the assets and liabilities of these RSF funds. The acquisition, which was
approved by the shareholders of RSF, was accomplished by an even exchange of
shares of EGF for the shares then outstanding of RSF as follows:
<TABLE>
<CAPTION>
FUND SHARES RSF NAV
- -------------------------------------------------------------------------------- ---------- -----------
<S> <C> <C>
Growth and Income 600,588 $ 25.21
Small Company Growth 578,969 24.76
</TABLE>
In addition, on July 17, 1997, EGF acquired the net assets of the RSF
Intermediate-Term Fixed-Income Fund and Money Market Fund, which were combined
with the net assets of the EGF Government Securities and Money Market Funds,
respectively.
Based on the opinion of EGF counsel, the reorganization qualified as a tax-free
reorganization for Federal income tax purposes with no gain or loss recognized
to the funds or their shareholders. The net assets of the corresponding RSF
Growth and Income Fund, Small Company Growth Fund, Government Securities Fund
and Money Market Fund were $15,141,711, $14,335,622, $6,865,850, and $2,061,980,
respectively. The tax and book year-ends of the Growth and Income and Small
Company Growth Funds were changed to December 31, effective December 31, 1997.
2. SIGNIFICANT ACCOUNTING POLICIES
VALUATION OF INVESTMENTS -- 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. 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
98 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (Continued)
- --------------------------------------------------------------------------------
June 30, 1998
- --------------------------------------------------------------------------------
securities as are described above as to domestic equity securities. Securities
held by the Money Market Fund are valued on an amortized cost basis. Under the
amortized cost method, a security is valued at its cost and any discount or
premium is amortized over the period until maturity, without taking into account
the impact of fluctuating interest rates on the market value of the security
unless the aggregate deviation from net asset value as calculated by using
available market quotations exceeds 1/2 of 1%.
SPECIAL VALUATION RISKS -- As part of its investment program, the Government
Securities Fund invests in collateralized mortgage obligations ("CMOs").
Payments of principal and interest on the mortgages are passed through to the
holders of the CMOs on the same schedule as they are received, although certain
classes of CMOs have priority over others with respect to the receipt of
prepayments on the mortgages. Therefore, depending on the type of CMOs in which
the Government Securities Fund invests, the investment may be subject to a
greater valuation risk due to prepayment than other types of mortgage-related
securities.
The high-yield securities in which the High-Yield Bond Fund may invest may be
considered speculative in regard to the issuer's continuing ability to meet
principal and interest payments. The value of the lower rated securities in
which the High-Yield Bond Fund may invest will be affected by the
creditworthiness of individual issuers, general economic and specific industry
conditions, and will fluctuate inversely with changes in interest rates. In
addition, the secondary trading market for lower quality bonds may be less
active and less liquid than the trading market for higher quality bonds.
REPURCHASE AGREEMENTS -- Each fund may acquire securities subject to repurchase
agreements. Under a typical repurchase agreement, a fund would acquire a debt
security for a relatively short period (usually for one day and not more than
one week) subject to an obligation of the seller to repurchase and of the fund
to resell the debt security at an agreed-upon higher price, thereby establishing
a fixed investment return during the fund's holding period. Under each
repurchase agreement, the fund receives, as collateral, securities whose market
value is at least equal to the repurchase price.
FUTURES CONTRACTS -- A futures contract is an agreement between two parties to
buy and sell a financial instrument at a set price on a future date. Upon
entering into such a contract, a fund is required to pledge to the broker an
amount of cash or securities equal to the minimum "initial margin" requirements
of the exchange. Pursuant to the contract, the fund agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in value of
the contract. Such receipts or payments are known as "variation margin" and are
recorded by the fund as unrealized appreciation or depreciation. When the
contract is closed the fund records a realized gain or loss equal to the
difference between the value of the contract at the time it was opened and the
value at the time it was closed and reverses any unrealized appreciation or
depreciation previously recorded.
FOREIGN CURRENCY TRANSLATION -- Securities, other assets, and liabilities of the
International Growth Fund whose values are initially expressed in foreign
currencies are translated to U.S. dollars at the bid price of such currency
against U.S. dollars last quoted by a major bank. Dividend and interest income
and certain expenses denominated in foreign currencies are marked-to-market
daily based on daily exchange rates and exchange gains and losses are realized
upon ultimate receipt or disbursement. The International Growth Fund does not
isolate that portion of its realized and unrealized gains on investments from
changes in foreign exchange rates from fluctuations arising from changes in the
market prices of the investments.
THE ENTERPRISE GROUP OF FUNDS, INC. 99
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (Continued)
- --------------------------------------------------------------------------------
June 30, 1998
- --------------------------------------------------------------------------------
SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are
accounted for on the trade date. Realized gains and losses from investment
transactions are determined on the basis of identified cost and realized gains
and losses from currency transactions are determined on the basis of average
cost. Dividend income received and distributions to shareholders are recognized
on the ex-dividend date, and interest income is recognized on the accrual basis.
Premiums and discounts on securities are amortized for both financial and tax
purposes.
EXPENSES -- Each fund and class bears expenses incurred specifically on its
behalf as well as a portion of the common expenses of EGF. No class has
preferential dividend rights; differences in per share dividend rates are
generally due to differences in separate class expenses.
FEDERAL INCOME TAXES -- No provision for Federal income or excise taxes is
required, because EGF intends to continue to qualify as a regulated investment
company and distribute all of its taxable income to shareholders.
USE OF ESTIMATES IN PREPARATION OF FINANCIAL STATEMENTS -- Preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that may affect the
reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
3. TRANSACTIONS WITH AFFILIATES
The funds are charged management fees by Enterprise Capital Management, Inc.
("ECM") for furnishing management and administrative services. ECM has also
agreed to reimburse the funds for expenses incurred in excess of a percentage of
average net assets. Enterprise Fund Distributors, Inc. ("EFD"), a wholly-owned
subsidiary of ECM, serves as principal underwriter for shares of EGF. The
Directors of EGF have adopted Distributor's Agreements and Plans of Distribution
(the "Plans") pursuant to rule 12b-1 under the Investment Company Act of 1940.
The Plans provide that each fund will pay EFD a distribution fee, accrued daily
and payable monthly. The management fee, distribution fee, and maximum expense
amounts are equal to the following annual percentage of average net assets for
each class of shares:
<TABLE>
<CAPTION>
MANAGEMENT FEE DISTRIBUTION FEE MAXIMUM EXPENSE AMOUNT
-------------- --------------------------- -----------------------------
FUND A B C Y A B C Y
- ----------------------------------- ---- ----- ----- ---- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Growth .75% .45% 1.00% 1.00% none 1.60% 2.15% 2.15% 1.15%
Equity .75% .45% 1.00% 1.00% none 1.60% 2.15% 2.15% 1.15%
Growth and Income .75% .45% 1.00% 1.00% none 1.50% 2.05% 2.05% 1.05%
Equity Income .75% .45% 1.00% 1.00% none 1.50% 2.05% 2.05% 1.05%
Capital Appreciation .75% .45% 1.00% 1.00% none 1.75% 2.30% 2.30% 1.30%
Small Company Growth 1.00% .45% 1.00% 1.00% none 1.85% 2.40% 2.40% 1.40%
Small Company Value .75% .45% 1.00% 1.00% none 1.75% 2.30% 2.30% 1.30%
International Growth .85% .45% 1.00% 1.00% none 2.00% 2.55% 2.55% 1.55%
Government Securities .60% .45% 1.00% 1.00% none 1.30% 1.85% 1.85% .85%
High-Yield Bond .60% .45% 1.00% 1.00% none 1.30% 1.85% 1.85% .85%
Tax-Exempt Income .50% .45% 1.00% 1.00% none 1.10% 1.65% 1.65% .65%
Managed .75% .45% 1.00% 1.00% none 1.75% 2.30% 2.30% 1.30%
Money Market .35% none none none none .70% .70% .70% .70%
</TABLE>
100 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (Continued)
- --------------------------------------------------------------------------------
June 30, 1998
- --------------------------------------------------------------------------------
Prior to January 1, 1998, the Money Market Fund had a distribution fee of .30%,
.85% and .85% for Classes A, B, and C, respectively. The maximum expense amount
was 1.00%, 1.55% and 1.55% for Classes A, B, and C, respectively.
ECM is a wholly-owned subsidiary of The Mutual Life Insurance Company of New
York, Inc. ("MONY"). MONY and its subsidiaries and affiliates had the following
investments in EGF as of June 30, 1998:
<TABLE>
<CAPTION>
FUND A B C Y
- -------------------------------------------------------- ------------- --------- --------- --------------
<S> <C> <C> <C> <C>
Growth $ 446,198 -- $ 1,467 $ 456,921
Equity 1,342,441 $ 1,338 1,339 506
Growth and Income 1,148 1,142 1,142 10,552
Equity Income 1,344,441 -- 1,272 107,576
Capital Appreciation 110,715 -- 1,451 180,020
Small Company Growth 974 969 969 18,014
Small Company Value 357,712 -- 1,500 167,168
International Growth 2,702,238 -- 1,157 13,045,088
Government Securities 1,233,795 -- 1,081 --
High-Yield Bond 110,076 -- 1,119 24,379
Tax-Exempt Income -- -- 1,068 --
Managed 3,278,413 -- 1,302 88,686,326
Money Market 405,552 -- 1,029 --
</TABLE>
ECM has subadvisory agreements with various investment advisors as Fund Managers
for the funds of EGF. The management fee, as a percentage of average net assets
of a fund, is paid to ECM, which pays a portion of the fee to the Fund Manager.
1740 Advisers, Inc., a wholly-owned subsidiary of MONY, is the Fund Manager for
the Equity Income Fund. For the period ended June 30, 1998, ECM incurred
subadvisory fees payable to 1740 Advisers, Inc. related to the Equity Income
Fund of $191,420, with a related payable balance of $33,387 as of June 30, 1998.
The portion of sales charges paid to MONY Securities Corporation, a wholly-owned
subsidiary of MONY, from the proceeds of the sale of fund shares was $5,434,662
for the period ended June 30, 1998. The portion of sales charges paid to EFD was
$1,065,120 for the period ended June 30, 1998.
EFD uses its distribution fee from EGF to pay expenses on behalf of EGF related
to the distribution and servicing of its shares. These expenses include a
service fee to securities dealers that enter into a sales agreement with EFD.
Through June 30, 1998, EFD incurred $693,279 of services fees payable to MONY
Securities Corporation.
4. FINANCIAL INSTRUMENTS
As part of its investment program, the International Growth Fund utilizes
forward currency exchange contracts to manage exposure to currency fluctuations
and hedge against adverse changes in connection with purchases and sales of
securities. The International Growth Fund will enter into forward contracts only
for hedging purposes. The International Growth Fund may be required to set aside
liquid assets in a segregated custodial account to cover its obligations. At
June 30, 1998, the International Growth Fund had entered into various forward
currency exchange
THE ENTERPRISE GROUP OF FUNDS, INC. 101
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (Continued)
- --------------------------------------------------------------------------------
June 30, 1998
- --------------------------------------------------------------------------------
contracts under which it is obligated to exchange currencies at specified future
dates. Risks arise from the possible inability of counterparties to meet the
terms of their contracts and from movements in currency values. Outstanding
contracts at June 30, 1998 are as follows:
<TABLE>
<CAPTION>
CONTRACT TO NET UNREALIZED
SETTLEMENT ------------------------------------ APPRECIATION/
DATE RECEIVE DELIVER (DEPRECIATION)
- ---------- ----------------- ----------------- ---------------
<C> <S> <C> <C>
7/17/98 AUD 3,100,000 USD 2,119,935 $(195,117)
7/17/98 USD 1,126,888 AUD 1,700,000 71,342
7/17/98 USD 1,617,574 BEL 60,500,000 (10,804)
7/17/98 CAD 1,450,000 USD 1,013,738 (27,998)
7/17/98 CHF 2,000,000 USD 1,364,536 (41,534)
7/17/98 USD 692,919 CHF 1,000,000 31,418
7/17/98 DEM 1,400,000 USD 781,708 (4,608)
7/17/98 USD 303,767 DEM 550,000 (1,523)
7/17/98 DKK 4,400,000 USD 637,219 3,731
7/17/98 ESP 324,000,000 USD 2,112,914 1,178
7/17/98 USD 757,800 FIM 4,100,000 9,045
7/17/98 FRF 7,000,000 USD 1,154,125 4,927
7/17/98 USD 865,455 FRF 5,200,000 4,445
7/17/98 USD 4,458,762 GBP 2,750,000 (128,693)
7/17/98 USD 448,246 HKD 3,600,000 (15,684)
7/17/98 USD 318,632 ITL 574,000,000 (4,515)
7/17/98 JPY 150,000,000 USD 1,195,910 (108,313)
7/17/98 MYR 1,400,000 USD 356,189 (21,732)
7/17/98 USD 327,103 MYR 1,400,000 (7,354)
7/17/98 NLG 1,050,000 USD 514,996 2,086
7/17/98 NOK 2,200,000 USD 293,980 (6,817)
7/17/98 SEK 3,400,000 USD 425,729 840
7/17/98 USD 518,337 SGD 900,000 (15,354)
---------------
$(461,034)
---------------
---------------
</TABLE>
As part of its investment program, the High-Yield Bond Fund enters into futures
contracts to hedge against anticipated future price and interest rate changes.
Risks of entering into futures contracts include: (1) the risk that the price of
the futures contracts may not move in the same direction as the price of the
securities in the various markets; (2) the risk that there will be no liquid
secondary market when the fund attempts to enter into a closing position, (3)
the risk that the fund 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 Fund depends on the ability of the Fund Manager to predict movements in
stock, bond, and currency prices and interest rates. There were no open futures
contracts at June 30, 1998 in the High-Yield Bond Fund.
102 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (Continued)
- --------------------------------------------------------------------------------
June 30, 1998
- --------------------------------------------------------------------------------
For the period ended June 30, 1998, purchases and sales proceeds of investments,
other than short-term investments, were as follows:
<TABLE>
<CAPTION>
U.S. GOVERNMENT OTHER INVESTMENT
OBLIGATIONS SECURITIES
------------------------ -------------------------
FUND PURCHASES SALES PURCHASES SALES
- ------------------------------------------------------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Growth -- -- $404,946,511 $141,335,593
Equity -- -- 5,673,620 1,927,875
Growth and Income -- -- 18,476,436 1,265,017
Equity Income -- -- 30,160,541 20,556,316
Capital Appreciation -- -- 54,416,215 64,143,856
Small Company Growth -- -- 15,404,393 9,892,204
Small Company Value -- -- 68,456,284 22,205,201
International Growth -- -- 14,010,900 11,905,521
Government Securities $ 9,630,753 $ 6,276,300 4,007,500 --
High-Yield Bond 1,535,664 4,438,328 78,997,885 60,115,470
Tax-Exempt Income -- -- 22,641,669 21,955,750
Managed -- -- 68,231,241 49,338,996
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 103
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (Continued)
- --------------------------------------------------------------------------------
June 30, 1998
- --------------------------------------------------------------------------------
5. FUND SHARE TRANSACTIONS
At June 30, 1998, EGF, has 1,700,000,000 authorized shares at $.10 par value.
The following tables summarize the fund share activity for the year-to-date June
30, 1998 and the year ended December 31, 1997:
<TABLE>
<CAPTION>
GROWTH AND INCOME FUND
-------------------------------------
GROWTH FUND EQUITY FUND FOR THE
------------------------ ---------------------- PERIOD
YEAR-TO- YEAR YEAR-TO- YEAR YEAR-TO- OCT. 1, 1997
DATE JUNE ENDED DATE JUNE ENDED DATE JUNE THROUGH YEAR ENDED
30, DEC. 31, 30, DEC. 31, 30, DEC. 31, SEPT. 30,
1998 1997 1998 1997 1998 1997 1997
----------- ----------- ----------- --------- --------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A
Shares sold 12,616,270 16,798,417 286,235 537,283 270,787 119,722 43,148
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions -- 488,201 -- 9,243 -- 3,414 --
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (5,251,198) (7,220,904) (49,008) (10,128) (26,275) (6,251) --
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 7,365,072 10,065,714 237,227 536,398 244,512 116,885 43,148
- ---------------------------------------------------------------------------------------------------------------------------
CLASS B
Shares sold 5,792,268 7,535,787 462,475 311,371 347,613 88,542 38,624
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions -- 196,989 -- 4,711 -- 2,656 --
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (498,333) (523,041) (14,891) (9,754) (20,595) (340) (1)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 5,293,935 7,209,735 447,584 306,328 327,018 90,858 38,623
- ---------------------------------------------------------------------------------------------------------------------------
CLASS C
Shares sold 2,437,058 1,710,077 87,917 52,431 84,758 18,085 3,842
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions -- 28,376 -- 737 -- 473 --
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (106,691) (159,968) (1,925) (5,573) (1,562) (81) (3)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 2,330,367 1,578,485 85,992 47,595 83,196 18,477 3,839
- ---------------------------------------------------------------------------------------------------------------------------
CLASS Y
Shares sold 642,897 2,914,866 -- -- 63,305 14,920 216,623
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions -- 28,250 -- -- -- 13,546 20,982
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (257,712) (501,167) -- -- (40,417) (12,369) (78,821)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 385,185 2,441,949 -- -- 22,888 16,097 158,784
- ---------------------------------------------------------------------------------------------------------------------------
Total Net Increase (Decrease) 15,374,559 21,295,883 770,803 890,321 677,614 242,317 244,394
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
104 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (Continued)
- --------------------------------------------------------------------------------
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL COMPANY GROWTH FUND
-------------------------------------
CAPITAL APPRECIATION FOR THE
EQUITY INCOME FUND FUND PERIOD
------------------------ ------------------------ OCT. 1, 1997 YEAR
YEAR-TO- YEAR YEAR-TO- YEAR ENDED YEAR-TO- THROUGH ENDED
DATE JUNE ENDED DEC. DATE JUNE DEC. 31, DATE JUNE DEC. 31, SEPT. 30,
30, 1998 31, 1997 30, 1998 1997 30, 1998 1997 1997
----------- ----------- ----------- ----------- ----------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A
Shares sold 383,904 658,272 266,228 226,042 191,644 131,634 79,965
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions 21,694 291,471 -- 421,161 -- 4,697 --
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (236,816) (480,133) (517,245) (843,612) (46,935) (7,480) (955)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 168,782 469,610 (251,017) (196,409) 144,709 128,851 79,010
- ---------------------------------------------------------------------------------------------------------------------------
CLASS B
Shares sold 354,049 471,024 70,218 76,065 166,437 87,205 42,270
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions 3,778 52,259 -- 30,380 -- 2,619 --
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (67,304) (47,084) (20,201) (30,197) (19,116) (9,338) (933)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 290,523 476,199 50,017 76,248 147,321 80,486 41,337
- ---------------------------------------------------------------------------------------------------------------------------
CLASS C
Shares sold 86,161 66,249 6,811 3,123 53,984 26,874 7,580
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions 635 4,740 -- 469 -- 761 --
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (6,325) (409) (112) (35) (2,588) (1,122) (7)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 80,471 70,580 6,699 3,557 51,396 26,513 7,573
- ---------------------------------------------------------------------------------------------------------------------------
CLASS Y
Shares sold 4,063 -- 4,747 -- 35,313 15,422 481,796
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions 2 -- -- -- -- 12,856 30,325
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed -- -- -- -- (148,701) (27,103) (198,869)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 4,065 -- 4,747 -- (113,388) 1,175 313,252
- ---------------------------------------------------------------------------------------------------------------------------
Total Net Increase (Decrease) 543,841 1,016,389 (189,554) (116,604) 230,038 237,025 441,172
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 105
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (Continued)
- --------------------------------------------------------------------------------
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL COMPANY VALUE FUND INTERNATIONAL GROWTH GOVERNMENT SECURITIES
FUND FUND
------------------------ ------------------------ ------------------------
YEAR-TO- YEAR YEAR-TO- YEAR YEAR-TO- YEAR
DATE JUNE ENDED DEC. DATE JUNE ENDED DEC. DATE JUNE ENDED DEC.
30, 1998 31, 1997 30, 1998 31, 1997 30, 1998 31, 1997
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
Shares sold 4,984,151 3,235,542 307,852 528,097 593,400 840,014
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions -- 364,015 -- 148,597 124,368 274,184
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (1,908,529) (768,577) (311,451) (438,610) (779,957) (1,654,266)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 3,075,622 2,830,980 (3,599) 238,084 (62,189) 540,068
- ---------------------------------------------------------------------------------------------------------------------------
CLASS B
Shares sold 3,444,850 2,379,023 353,781 448,885 652,896 633,414
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions -- 175,399 -- 37,407 24,495 30,968
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (351,911) (127,118) (186,328) (140,802) (260,267) (124,591)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 3,092,939 2,427,304 167,453 345,490 417,124 539,791
- ---------------------------------------------------------------------------------------------------------------------------
CLASS C
Shares sold 671,772 332,692 56,824 85,857 93,050 41,088
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions -- 20,471 -- 3,875 2,149 453
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (32,013) (6,181) (3,129) (22,912) (18,590) (144)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 639,759 346,982 53,695 66,820 76,609 41,397
- ---------------------------------------------------------------------------------------------------------------------------
CLASS Y
Shares sold 14,137 21,005 166,196 276,478 72,475 652,423
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions -- 963 -- 46,815 19,464 16,945
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (1,550) (340,603) (132,185) (182,169) (69,257) (39,802)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 12,587 (318,635) 34,011 141,124 22,682 629,566
- ---------------------------------------------------------------------------------------------------------------------------
Total Net Increase (Decrease) 6,820,907 5,286,631 251,560 791,518 454,226 1,750,822
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
106 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (Continued)
- --------------------------------------------------------------------------------
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HIGH-YIELD BOND FUND TAX-EXEMPT INCOME FUND MANAGED FUND MONEY MARKET FUND
------------------------ ---------------------- ------------------------ ----------------------------
YEAR-TO-DATE YEAR ENDED YEAR-TO-DATE YEAR ENDED YEAR-TO-DATE YEAR ENDED YEAR-TO- DATE YEAR ENDED
JUNE 30, DEC. 31, JUNE 30, DEC. 31, JUNE 30, DEC. 31, JUNE 30, DEC. 31,
1998 1997 1998 1997 1998 1997 1998 1997
----------- ----------- ---------- ---------- ----------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
Shares sold 994,727 1,682,960 172,718 193,960 2,636,378 5,986,736 172,843,855 186,445,537
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of
Distributions 162,556 306,270 28,522 84,287 -- 675,645 1,902,874 2,799,348
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (663,069) (1,180,212) (211,550) (638,188) (1,337,038) (2,408,149) (155,873,840) (179,852,529)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase
(Decrease) 494,214 809,018 (10,310) (359,941) 1,299,340 4,254,232 18,872,889 9,392,356
- ---------------------------------------------------------------------------------------------------------------------------
CLASS B
Shares sold 1,079,918 1,161,593 62,542 104,859 3,792,432 5,149,999 12,244,950 16,428,666
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of
Distributions 51,333 57,929 3,209 7,203 -- 433,505 129,860 165,715
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (295,323) (1,274,381) (37,395) (52,601) (720,293) (776,922) (11,746,030) (11,957,685)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase
(Decrease) 835,928 945,141 28,356 59,461 3,072,139 4,806,582 628,780 4,636,696
- ---------------------------------------------------------------------------------------------------------------------------
CLASS C
Shares sold 224,403 137,745 16,255 12,937 606,939 384,001 4,692,043 3,804,829
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of
Distributions 5,599 1,503 305 271 -- 15,601 36,078 5,853
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (17,342) (20,787) (219) -- (63,382) (7,138) (3,196,345) (2,789,716)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase
(Decrease) 212,660 118,461 16,341 13,208 543,557 392,464 1,531,776 1,020,966
- ---------------------------------------------------------------------------------------------------------------------------
CLASS Y
Shares sold 17,346 63,572 -- -- 1,555,508 3,318,402 628,538 3,225,033
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of
Distributions 2,849 2,027 -- -- -- 389,953 61,203 55,490
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (912) 73 -- -- (884,762) (2,225,883) (697,908) (580,428)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase
(Decrease) 19,283 65,526 -- -- 670,746 1,482,472 (8,167) 2,700,095
- ---------------------------------------------------------------------------------------------------------------------------
Total Net Increase
(Decrease) 1,562,085 1,938,146 34,387 (287,272) 5,585,782 10,935,750 21,025,278 17,750,113
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 107
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (Continued)
- --------------------------------------------------------------------------------
June 30, 1998
- --------------------------------------------------------------------------------
6. TAX BASIS UNREALIZED GAIN (LOSS) OF INVESTMENTS AND DISTRIBUTIONS
At June 30, 1998, the cost of securities for Federal income tax purposes, the
aggregate gross unrealized gain for all securities for which there was an excess
of value over tax cost and the aggregate gross unrealized loss for all
securities for which there was an excess of tax cost over value were as follows:
<TABLE>
<CAPTION>
NET
UNREALIZED UNREALIZED UNREALIZED
FUND TAX COST GAIN LOSS GAIN (LOSS)
- ---------------------------------------------------------------------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
Growth $811,844,916 $302,879,828 $(15,132,306) $287,747,522
- -----------------------------------------------------------------------------------------------------------------------------
Equity 9,811,022 1,022,878 (187,567) 835,311
- -----------------------------------------------------------------------------------------------------------------------------
Growth and Income 36,195,396 9,234,800 (798,774) 8,436,026
- -----------------------------------------------------------------------------------------------------------------------------
Equity Income 107,876,600 37,048,115 (1,506,843) 35,541,272
- -----------------------------------------------------------------------------------------------------------------------------
Capital Appreciation 90,571,173 47,476,990 (2,832,744) 44,644,246
- -----------------------------------------------------------------------------------------------------------------------------
Small Company Growth 24,688,182 4,258,349 (1,236,764) 3,021,585
- -----------------------------------------------------------------------------------------------------------------------------
Small Company Value 122,310,787 19,545,821 (2,883,153) 16,662,668
- -----------------------------------------------------------------------------------------------------------------------------
International Growth 64,195,774 13,958,105 (6,368,380) 7,589,725
- -----------------------------------------------------------------------------------------------------------------------------
Government Securities 94,198,703 568,296 (347,815) 220,481
- -----------------------------------------------------------------------------------------------------------------------------
High-Yield Bond 104,918,212 3,283,919 (1,337,166) 1,946,753
- -----------------------------------------------------------------------------------------------------------------------------
Tax-Exempt Income 25,736,363 1,327,211 (1,466) 1,325,745
- -----------------------------------------------------------------------------------------------------------------------------
Managed 351,058,143 105,880,725 (8,359,547) 97,521,178
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
Income and capital gain distributions are determined in accordance with income
tax regulations, which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments for futures and
options transactions, foreign currency transactions, pay downs, market
discounts, losses deferred due to wash sales, investments in passive foreign
investment companies, and excise tax regulations.
Permanent book and tax basis differences relating to shareholder distributions
will result in reclassifications to paid in capital. Any taxable gain remaining
at fiscal year end is distributed in the following year. The Tax-Exempt Income
Fund has designated all income dividends paid as exempt interest dividends. Thus
100% of the net investment income distributions are exempt from Federal income
tax.
108 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
DIRECTORS AND OFFICERS
DIRECTORS
VICTOR UGOLYN
CHAIRMAN AND DIRECTOR
ARTHUR T. DIETZ ARTHUR HOWELL
DIRECTOR DIRECTOR
WILLIAM A. MITCHELL, JR. LONNIE H. POPE
DIRECTOR DIRECTOR
SAMUEL J. FOTI MICHAEL I. ROTH
DIRECTOR DIRECTOR
OFFICERS
VICTOR UGOLYN
PRESIDENT AND CHIEF EXECUTIVE OFFICER
PHILLIP G. GOFF
VICE PRESIDENT
HERBERT M. WILLIAMSON CATHERINE R. McCLELLAN
TREASURER AND SECRETARY
ASSISTANT SECRETARY
<PAGE>
Investment Adviser
Enterprise Capital Management, Inc.
Atlanta Financial Center
3343 Peachtree Road, N.E.
Suite 450
Atlanta, GA 30326-1022
Distributor
Enterprise Fund Distributors, Inc.
Atlanta Financial Center
3343 Peachtree Road, N.E.
Suite 450
Atlanta, GA 30326-1022
Telephone: 1-800-432-4320
Custodian
State Street Bank and Trust Company
Boston, MA
Transfer Agent
National Financial Data Services, Inc.
330 W. 9th Street
Kansas City, MO 64105
Telephone: 1-800-368-3527
Independent Accountants
PricewaterhouseCoopers LLP
Atlanta, GA
Member - Investment Company Institute
[LOGO]
1-800-432-4320
www.enterprisefunds.com
THIS REPORT IS NOT TO BE USED IN CONNECTION WITH
THE OFFERING OF SHARES OF THE FUND UNLESS ACCOMPANIED OR
PRECEDED BY AN EFFECTIVE PROSPECTUS
