<PAGE>
ANNUAL REPORT
DECEMBER 31, 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 Global Financial Services 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>
Enterprise Growth Fund
Manager's Comments................................................................................ 4
Portfolio of Investments.......................................................................... 7
Enterprise Equity Fund
Manager's Comments................................................................................ 8
Portfolio of Investments.......................................................................... 12
Enterprise Growth and Income Fund
Manager's Comments................................................................................ 14
Portfolio of Investments.......................................................................... 17
Enterprise Equity Income Fund
Manager's Comments................................................................................ 19
Portfolio of Investments.......................................................................... 22
Enterprise Capital Appreciation Fund
Manager's Comments................................................................................ 25
Portfolio of Investments.......................................................................... 28
Enterprise Small Company Growth Fund
Manager's Comments................................................................................ 30
Portfolio of Investments.......................................................................... 34
Enterprise Small Company Value Fund
Manager's Comments................................................................................ 35
Portfolio of Investments.......................................................................... 39
Enterprise International Growth Fund
Manager's Comments................................................................................ 43
Portfolio of Investments.......................................................................... 47
Enterprise Global Financial Services Fund
Manager's Comments................................................................................ 51
Portfolio of Investments.......................................................................... 55
Enterprise Government Securities Fund
Manager's Comments................................................................................ 57
Portfolio of Investments.......................................................................... 61
Enterprise High-Yield Bond Fund
Manager's Comments................................................................................ 63
Portfolio of Investments.......................................................................... 66
Enterprise Tax-Exempt Income Fund
Manager's Comments................................................................................ 73
Portfolio of Investments.......................................................................... 77
Enterprise Managed Fund
Manager's Comments................................................................................ 80
Portfolio of Investments.......................................................................... 84
Enterprise Money Market Fund
Manager's Comments................................................................................ 86
Portfolio of Investments.......................................................................... 88
Statements of Assets and Liabilities................................................................ 90
Statements of Operations............................................................................ 92
Statements of Changes in Net Assets................................................................. 94
Financial Highlights................................................................................ 98
Notes to Financial Statements....................................................................... 126
</TABLE>
Returns in this report are historical and do not guarantee future performance of
any fund. Investment return and principal value will fluctuate so that shares,
when redeemed, may be worth more or less than their cost.
<PAGE>
[LOGO]
ENTERPRISE
GROUP OF FUNDS
- --------------------------------------------------------------------------------
MESSAGE FROM THE CHAIRMAN
Dear Fellow Shareholders:
Unlike the previous three years, during which nearly every measure of the
stock market was extraordinarily positive, 1998 proved to be a somewhat
qualified success. For the fourth consecutive year, the S&P 500 Composite Index
advanced more than 20 percent. The S&P 500 rose 28.57 percent, inclusive of
reinvested dividends, which was the 16th calendar-year gain for the index in the
past 17 years. The Dow Jones Industrial Average did not fare quite as well, but
showed great resilience. On August 31, the Dow was down 4.7 percent for the year
but rallied in the final four months to record an 18.07 percent gain for 1998
and close the year at 9181.43. This was the first time in history that the Dow
had four straight years of double-digit percentage gains.
Not all stocks, however, enjoyed an upswing. The Russell 2000 Index, a
measure of small-cap stocks, fell 2.56 percent during the year. Technology and
Internet-related stocks -- especially the large-caps such as Microsoft and Intel
- -- were the stars of the marketplace. The technology-laden Nasdaq Composite
Index rocketed 40.48 percent and frequently illustrated the volatility that was
characteristic of the year's trading activity.
Uncertainty caused by the economies of other nations contributed to the
volatility. The economic tumult that began in Southeast Asia during the second
half of 1997 continued throughout 1998. Russia in essence defaulted on its
tremendous debt load by devaluing the ruble, and Latin American economic
instability also had an adverse effect on U.S. multinational companies. Alan
Greenspan and the other Federal Reserve governors did their best to keep
American markets moving in a positive direction by implementing three
interest-rate cuts in the autumn.
In the fixed income market, all of the uncertainty and volatility helped to
push yields on U.S. Treasury securities to their lowest levels in nearly three
decades. The yield on the benchmark 30-year Treasury bond dropped from 5.92
percent to 5.12 percent during the year, and yielded as little as 4.70 percent
on October 5.
Although the numbers were not as outstanding as they had been in the
previous three years, the average diversified U.S. stock fund returned 14.52
percent in 1998, according to Lipper, Inc. Bond traders had a stressful year as
a late-summer flight to quality hurt high-yield bond funds but benefited general
U.S. Treasury funds. Overall, the average taxable bond fund scored total
returns, including price changes and reinvested dividends, of 5.17 percent for
the year. Treasury funds accounted for much of this gain by posting a 9.69
percent advance, according to Lipper.
LOOKING TO 1999
We believe, as do our fund managers, that uncertainty will continue to be a
theme in the marketplace in 1999. The introduction and incorporation of the euro
into the currency markets will be a major event, but the strength and nature of
its influence probably will not become clear right away. Economic problems in
Russia, Southeast Asia and Brazil will have influence. These issues underscore
the importance for investors of a long-term investment strategy constructed and
implemented with the help of professional financial advisors. And, as always, it
is prudent to remember that past performance does not guarantee future results.
2 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
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We celebrated the 30th anniversary of the Enterprise Growth Fund in 1998.
The fund, subadvised by Montag & Caldwell, Inc., continued to receive favorable
industry recognition for its long-term historical performance in publications
such as USA TODAY, THE WASHINGTON POST and INVESTOR'S BUSINESS DAILY.
Several other Enterprise funds earned positive media recognition during the
year, including the Small Company Value, Capital Appreciation, High-Yield Bond
and Tax-Exempt Income Funds. In 1999 and beyond, we will continue to provide
investors with a wide selection of mutual funds to cover the spectrum of
investment needs.
On October 1, we launched the Enterprise Global Financial Services Fund,
subadvised by Sanford C. Bernstein & Co., Inc. This is our 14th fund overall and
our first sector fund. Backed by the renowned research capabilities of Sanford
Bernstein, the fund seeks to achieve capital appreciation through investment in
the common stocks of domestic and foreign financial services companies. Under
normal circumstances, at least 65 percent of the fund's total assets will be
invested in financial services companies that are domiciled in the U.S., and at
least three other countries.
In 1998, the Enterprise Group of Funds was also recognized as being one of
the nation's top 10 fastest growing mutual fund companies as well as one of the
top 25 performing fund families.* This was a ranking of long-term, open-end fund
families with at least $1 billion in assets under management as of 12/97 based
on net sales flow as a percentage of assets for the period 1/98 - 12/98. This
would not have been possible without your support and confidence which we
greatly appreciate.
The Enterprise Group of Funds provides a level of professional money
management once reserved for only the largest institutional investors.
Enterprise's different funds are managed by separate independent asset
management firms, each a recognized specialist in its own area of investment
expertise. Selected based upon industry reputation and investment track record,
each firm is continuously monitored by Enterprise and a national consulting firm
to ensure that high standards of performance and professionalism continue to be
met. Significantly, these firms primarily manage multimillion dollar portfolios
on behalf of corporations, nonprofit organizations and government entities who
are able to meet minimum investment requirements of up to $40 million.
Collectively, these firms manage well over $425 billion in investment assets.
Enterprise's distinctive management strategy provides individual investors the
benefits of diversification amongst multiple asset management firms along with
the conveniences of exchange privileges and consolidated statements -- all with
a minimum investment of as little as $1,000 per fund.
In 1999, we will continue to provide you with access to these firms -- some
of the most accomplished institutional investment firms in the industry -- and
look forward to working with you and your financial advisors.
Sincerely,
/s/ VICTOR UGOLYN
Victor Ugolyn
Chairman, President and Chief Executive Officer
* SOURCE: STRATEGIC INSIGHT, AN INDEPENDENT FINANCIAL RESEARCH FIRM. ENTERPRISE
PLACED 7TH OUT OF 189 FUND FAMILIES, 124 OF WHICH REFLECTED POSITIVE GROWTH.
THE ENTERPRISE GROUP OF FUNDS, INC. 3
<PAGE>
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 $25 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.
1998 PERFORMANCE REVIEW
The Standard & Poor's 500 Index established another record in 1998 by increasing
more than 20 percent for the fourth consecutive year. During the year, the
decline in bond yields had a positive impact on stock market valuations and more
than offset the weaker-than-expected trends in corporate profits. The Enterprise
Growth Fund achieved a greater than 30 percent annual return for the fourth
consecutive year. During 1998, the fund benefited from strong returns in its
technology, consumer and health care holdings.
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS Periods Ending December 31, 1998
<S> <C> <C> <C>
Enterprise Growth Fund - A One Year
With Sales Charge 24.64%
Without Sales Charge 30.94%
S&P 500 Index* 28.57%
Lipper Growth Fund Index* 25.69%
Enterprise Growth Fund - A S&P 500 Index
12/31/88 $9,542.68 $10,000.00
1989 $11,742.27 $13,169.00
1990 $11,475.72 $12,759.44
1991 $16,271.43 $16,647.25
1992 $17,322.56 $17,915.77
1993 $19,157.02 $19,721.68
1994 $18,967.36 $19,982.00
1995 $26,550.52 $27,491.24
1996 $35,205.99 $33,803.23
1997 $46,387.41 $45,079.98
1998 $60,738.28 $57,959.34
<CAPTION>
<S> <C> <C> <C> <C>
Five Year Ten Year
24.72% 19.74%
25.96% 20.33%
24.06% 19.21%
19.82% 17.21%
Lipper Growth Fund Index
$10,000.00
$12,747.00
$12,057.39
$16,437.84
$17,692.04
$19,811.55
$19,500.51
$25,867.42
$30,389.05
$38,922.30
$48,921.43
</TABLE>
4 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C>
Enterprise Growth Fund - B One Year
With Sales Charge 26.20%
Without Sales Charge 30.20%
S&P 500 Index* 28.57%
Lipper Growth Fund Index* 25.69%
Enterprise Growth Fund - B S&P 500 Index
5/1/95 $10,000.00 $10,000.00
1995 $12,465.80 $12,162.54
1996 $16,421.20 $14,948.98
1997 $21,536.39 $19,935.95
1998 $27,740.39 $25,631.66
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C>
Enterprise Growth Fund - B 5/1/95 - 12/31/98
With Sales Charge 32.04%
Without Sales Charge 32.43%
S&P 500 Index* 29.22%
Lipper Growth Fund Index* 25.10%
Lipper Growth Fund Index
5/1/95 $10,000.00
1995 $12,030.00
1996 $14,132.84
1997 $18,101.35
1998 $22,751.58
</TABLE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C> <C> <C>
Enterprise Growth Fund - C One Year 5/1/97-12/31/98
With Sales Charge 29.22% 31.91%
Without Sales Charge 30.22% 31.91%
S&P 500 Index* 28.57% 31.33%
Lipper Growth Fund Index* 25.69% 29.90%
Enterprise Growth Fund - C S&P 500 Index Lipper Growth Fund Index
5/1/1997 $10,000.00 $10,000.00 $10,000.00
1997 $12,190.60 $12,256.00 $12,310.00
1998 $15,874.60 $15,757.54 $15,472.44
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 5
<PAGE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNSPERIODS ENDING DECEMBER 31, 1998
<S> <C> <C> <C>
One Year
Enterprise Growth Fund Y 32.09%
S&P 500 Index* 28.57%
Lipper Growth Fund Index* 25.69%
8/31/96 Enterprise Growth Fund - Y
1996 $10,000
1997 $11,738.41
1998 $15,541.65
$20,528.97
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNSPERIODS ENDING DECEMBER 31, 1998
<S> <C> <C>
8/31/96 -12/31/98
Enterprise Growth Fund Y 36.09%
S&P 500 Index* 33.45%
Lipper Growth Fund Index* 28.59%
8/31/96 S&P 500 Index Lipper Growth Fund Index
1996 $10,000 $10,000
1997 $11,439.00 $11,172.00
1998 $15,255.05 $14,309.10
$19,613.42 $17,985.10
</TABLE>
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
* The S&P 500 Index is an unmanaged index that includes 500 companies that tend
to be leaders in important industries within the U.S. economy. It includes
reinvested dividends and excludes any transaction or holding charges. Lipper
Inc. is an independent reporting service that measures the performance of most
mutual funds. The performance results reflect an unmanaged index and are net of
all expenses other than sales charges and redemption fees. One cannot invest
directly in an index.
FUTURE INVESTMENT STRATEGY
Given Montag's outlook for sustained growth in the economy with low inflation,
Montag believes it may be another positive year for investors. Montag expects
corporate profit growth to remain subdued and bond yields to remain fairly
steady in the year ahead, and for stock market returns to be more moderate than
in 1998. These returns may approximate 10 percent when measured by such popular
stock market averages as the S&P 500 and the Dow Jones Industrials.
An economic setting of moderate corporate profit gains and steady bond yields
bodes well for the shares of growth companies that should produce superior
earnings growth. With the U.S. economy likely to slow and foreign currencies
strengthening against the dollar, Montag believes high-quality, global consumer
growth companies are particularly attractive investments. Given the consistent
demand for their products and favorable demographic trends, health care
companies may continue to do well. Selected technology holdings that are
benefiting from new product cycles and better worldwide industry conditions may
also be rewarding investments.
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.
6 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE GROWTH FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
COMMON STOCKS -- 97.67% AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
BUSINESS SERVICES -- 3.66%
- ---------------------------------------------------------------------------------
Interpublic Group of Companies Inc................ 500,000 $ 39,875,000
Manpower Inc...................................... 550,000 13,853,125
--------------
53,728,125
COMPUTER HARDWARE -- 13.45%
- ---------------------------------------------------------------------------------
Cisco Systems Inc. (a)............................ 490,100 45,487,406
Compaq Computer Corporation (a)................... 1,070,000 44,873,125
Hewlett Packard Company........................... 700,000 47,818,750
Intel Corporation................................. 500,000 59,281,250
--------------
197,460,531
COMPUTER SERVICES -- 3.48%
- ---------------------------------------------------------------------------------
Solectron Corporation (a)......................... 550,000 51,115,625
COMPUTER SOFTWARE -- 4.61%
- ---------------------------------------------------------------------------------
Electronic Arts (a)............................... 500,000 28,062,500
Microsoft Corporation (a)......................... 285,000 39,525,938
--------------
67,588,438
CONSUMER PRODUCTS -- 9.45%
- ---------------------------------------------------------------------------------
Gillette Company.................................. 1,400,000 67,637,500
Mattel Inc........................................ 512,200 11,684,562
Procter & Gamble Company.......................... 650,000 59,353,125
--------------
138,675,187
ELECTRICAL EQUIPMENT -- 3.48%
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General Electric Company.......................... 500,000 51,031,250
ENTERTAINMENT & LEISURE -- 4.74%
- ---------------------------------------------------------------------------------
Carnival Corporation.............................. 575,600 27,628,800
Walt Disney Company............................... 1,400,000 42,000,000
--------------
69,628,800
FOOD & BEVERAGES & TOBACCO -- 5.18%
- ---------------------------------------------------------------------------------
Bestfoods......................................... 550,000 29,287,500
Coca-Cola Company................................. 700,000 46,812,500
--------------
76,100,000
HEALTH CARE -- 3.25%
- ---------------------------------------------------------------------------------
Medtronic Inc..................................... 642,900 47,735,325
HOTELS & RESTAURANTS -- 6.90%
- ---------------------------------------------------------------------------------
Cracker Barrel Old Country Store.................. 400,000 9,325,000
Marriott International Inc. (Class A)............. 979,200 28,396,800
McDonald's Corporation............................ 830,000 63,598,750
--------------
101,320,550
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
MEDICAL INSTRUMENTS -- 2.74%
- ---------------------------------------------------------------------------------
Boston Scientific Corporation (a)................. 1,500,000 $ 40,218,750
MISC. FINANCIAL SERVICES -- 2.93%
- ---------------------------------------------------------------------------------
American Express Company.......................... 420,000 42,945,000
MULTI-LINE INSURANCE -- 2.90%
- ---------------------------------------------------------------------------------
American International Group Inc.................. 440,000 42,515,000
PHARMACEUTICALS -- 18.93%
- ---------------------------------------------------------------------------------
Bristol-Myers Squibb Company...................... 480,000 64,230,000
Johnson & Johnson................................. 800,000 67,100,000
Lilly (Eli) & Company............................. 530,300 47,130,412
Merck & Company Inc............................... 264,400 39,048,575
Pfizer Inc........................................ 481,300 60,373,069
--------------
277,882,056
RETAIL -- 8.70%
- ---------------------------------------------------------------------------------
Costco Companies Inc. (a)......................... 435,700 31,452,094
Gap Inc........................................... 707,450 39,794,063
Home Depot Inc.................................... 923,400 56,500,537
--------------
127,746,694
TELECOMMUNICATIONS -- 3.27%
- ---------------------------------------------------------------------------------
Tellabs Inc. (a).................................. 700,000 47,993,750
--------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $1,024,543,859)................................ 1,433,685,081
- ---------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 2.41%
- ---------------------------------------------------------------------------------
State Street Bank & Trust Repurchase Agreement,
4.25% due 01/04/99
Collateral: U.S. Treasury Bond $28,420,000, 11.25%
due 08/15/22 Value $36,057,875.................... $ 35,345,000 35,345,000
--------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $35,345,000)................................... 35,345,000
- ---------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $1,059,888,859)................................ $1,469,030,081
OTHER ASSETS LESS LIABILITIES -- (0.08)%........................ (1,156,313)
--------------
NET ASSETS -- 100%.............................................. $1,467,873,768
- ---------------------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 7
<PAGE>
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 $62 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 managements oriented to shareholder interests, and
sell at reasonable valuation levels. A complete qualitative review of the
business relative to its peers and its history is the key to the process. OpCap
seeks securities whose undervaluation is great enough to provide significant
upside reward with modest downside risk.
1998 PERFORMANCE REVIEW
The stock market continued its remarkable advance in 1998, with the Standard &
Poor's 500 Index providing a total return of 28.6 percent, inclusive of
reinvested dividends. This marked the fourth consecutive year in which the index
has delivered a total return of more than 20 percent. The market has benefited
throughout this period from an unusually favorable U.S. economic environment of
moderate growth with declining interest rates and extremely low inflation.
Beneath the surface, however, there were many crosscurrents in 1998. The year's
sharp increase for the S&P 500 was driven primarily by a limited group of
super-large company stocks. Many other stocks were left behind. For instance,
the Russell 2000, a benchmark of small company stocks, actually declined 2.6
percent in 1998. The strong relative performance of large versus small stocks
reflected the preference of many investors for highly liquid large issues --
especially those with predictable earnings -- at a time when the international
economic outlook was uncertain and widespread concern existed that the rate of
economic growth in the U.S. might finally be slowing.
In addition, there was a wide disparity between the performance of growth stocks
(those projected to have high future earnings growth rates) and value stocks
(those considered to be undervalued in relation to their inherent worth). The
S&P 500/BARRA Growth Index rose 42.2 percent in 1998 while the S&P 500/BARRA
Value Index increased only 14.7 percent.
8 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
Performance gaps of this type, favoring either growth or value, are common.
Nonetheless, the 1998 differential was one of the largest in history. Many
quality stocks that were inexpensive languished or even fell in price, while
some highly valued growth stocks became even more expensive. For instance, the
10 greatest contributors to the S&P 500 Index in 1998 advanced an average of
82.4 percent, reaching an average multiple of 46.7 times trailing earnings.
Value investors had a difficult year. OpCap underperformed the market for
several reasons. For one, it owns the stocks of a diverse group of large and
mid-sized companies, and mid-cap stocks did not perform nearly as well as did
the S&P 500, which is dominated by larger companies. In addition, the
performance of the market in 1998 was driven primarily by large "growth" stocks,
reflecting a preference of many investors for owning highly liquid issues --
especially those with predictable earnings -- in an uncertain global economic
environment. Year-to-date performance differentials between value and growth
styles of investing are common, and OpCap is confident the pendulum will swing
back to value investing in time.
In addition, with its risk-averse investment philosophy, OpCap sometimes trails
the market averages in periods of sharply rising prices. The fund manager
focuses on long-term investments in quality companies rather than on attempting
to predict near-term market trends.
The average price to earnings ratio of the stocks owned by the fund was 18.6 at
the end of December, compared with a price to earnings ratio of 26.7 for the S&P
500, indicating the relative value of the fund's holdings. In contrast to their
low relative valuations, the stocks owned by the fund are expected to generate
returns on equity that are well above the average returns of the S&P 500 stocks.
This combination of low relative stock market prices and superior business
characteristics helps control risk and creates opportunity for investment
profit.
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C> <C>
Enterprise Equity Fund A One Year 5/1/97-12/31/98
With Sales Charge 4.13% 15.05%
Without Sales Charge 9.38% 18.46%
S&P 500 Index* 28.57% 31.33%
Lipper Growth Fund Index* 25.69% 29.90%
Enterprise Equity Fund -
A S&P 500 Index Lipper Growth Fund Index
5/1/97 $9,523.81 $10,000.00 $10,000.00
12/31/97 $11,552.00 $12,256.00 $12,310.00
12/31/98 $12,635.58 $15,757.54 $15,472.44
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 9
<PAGE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C> <C>
Enterprise Equity Fund B One Year 5/1/97 - 12/31/98
With Sales Charge 4.82% 15.65%
Without Sales Charge 8.82% 17.81%
S&P 500 Index* 28.57% 31.33%
Lipper Growth Fund Index* 25.69% 29.90%
Enterprise Equity Fund -
B S&P 500 Index
5/1/97 $10,000.00 $1,000.00
1997 $12,080.30 $12,256.00
1998 $12,745.78 $15,757.54
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C>
Enterprise Equity Fund B
With Sales Charge
Without Sales Charge
S&P 500 Index*
Lipper Growth Fund Index*
Lipper Growth Fund Index
5/1/97 $10,000.00
1997 $12,310.00
1998 $15,472.44
</TABLE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C>
Enterprise Equity Fund - C One Year
With Sales Charge 7.98%
Without Sales Charge 8.98%
S&P 500 Index* 28.57%
Lipper Growth Fund Index* 25.69%
Enterprise Equity Fund -
C S&P 500 Index
5/1/97 $10,000.00 $10,000.00
1997 $12,089.20 $12,256.00
1998 $13,174.81 $15,757.54
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C>
Enterprise Equity Fund - C 5/1/97 - 12/31/98
With Sales Charge 17.97%
Without Sales Charge 17.97%
S&P 500 Index* 31.33%
Lipper Growth Fund Index* 29.90%
Lipper Growth Fund Index
5/1/97 $10,000.00
1997 $12,310.00
1998 $15,472.44
</TABLE>
10 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIOD ENDING DECEMBER 31, 1998
<S> <C> <C>
Enterprise Equity Fund - Y
Cumulative Return
S&P 500 Index*
Lipper Growth Fund Index*
Enterprise Equity Fund -
Y S&P 500 Index
10/31/98 $10,000.00 $10,000
1998 $10,318.60 $11,217.01
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIOD ENDING DECEMBER 31, 1998
<S> <C>
Enterprise Equity Fund - Y 10/31/98 - 12/31/98
Cumulative Return 3.19%
S&P 500 Index* 12.17%
Lipper Growth Fund Index* 14.82%
Lipper Growth Fund Index
10/31/98 $10,000
1998 $11,481.50
</TABLE>
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
* The S&P 500 Index is an unmanaged index that includes 500 companies that tend
to be leaders in important industries within the U.S. economy. It includes
reinvested dividends and excludes any transaction or holding charges. Lipper
Inc. is an independent reporting service that measures the performance of most
mutual funds. The performance results reflect an unmanaged index and are net of
all expenses other than sales charges and redemption fees. One cannot invest
directly in an index.
FUTURE INVESTMENT STRATEGY
As for the prospects of the U.S. economy in 1999, the outlook is more
challenging than is usually the case. OpCap expects capital spending and rates
of inventory growth to slow and corporate profits to be mixed, with the
potential for downside surprises as deflationary pressures and rapid changes
derail profits at some companies. Clearly, these are negatives for the stock
market.
On the other hand, the Federal Reserve Board has been cutting interest rates and
adding money to the economy at an explosive rate, helping drive the stock
market's strong performance in the fourth quarter of 1998. Given its concern
about the health of international financial markets, the Fed is likely to
persist in rapid monetary growth. Monetary stimulus and lower interest rates
could therefore continue to benefit financial markets, housing and personal
consumption in the coming year.
In terms of the economic problems being experienced internationally, renewed
economic growth in Japan is a key part of the solution. Japanese banks still
must rid their books of enough bad loans to be considered healthy and to
contribute actively to financing economic growth. Even with government fiscal
stimulus programs, it is likely that the Japanese economy will decline slightly
this year. Europe is in much better shape, although its economic growth may slow
in 1999 as exports and capital spending are negatively affected by external
events. Severe economic problems still exist in the developing world, especially
in Latin America.
OpCap continues to see many long-term positives, including powerful trends such
as an information revolution that is transforming the way every business works,
continued growth in demand for stocks from the Baby Boomers saving for
retirement, a federal budget surplus and no inflation. Nonetheless, OpCap is
concerned about the high valuation levels of many stocks.
The challenge for investors in the coming year will be to chart a course that
captures favorable returns while guarding against the economic and market
uncertainty that exists at this time. Through its disciplined value philosophy,
OpCap seeks to do just that by owning businesses that generate high levels of
cash and use that cash to create value for shareholders through all economic
environments.
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>
ENTERPRISE EQUITY FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
COMMON STOCKS -- 87.34% AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
ADVERTISING -- 1.36%
- ------------------------------------------------------------------------------
Omnicom Group Inc................................. 4,000 $ 232,000
AEROSPACE -- 3.75%
- ------------------------------------------------------------------------------
AlliedSignal Inc.................................. 10,600 469,712
Lockheed Martin Corporation....................... 2,000 169,500
-----------
639,212
AUTOMOTIVE -- 3.36%
- ------------------------------------------------------------------------------
LucasVarity (ADR)................................. 17,100 572,850
BANKING -- 3.34%
- ------------------------------------------------------------------------------
BankBoston Corporation............................ 5,400 210,263
Wells Fargo & Company............................. 9,000 359,437
-----------
569,700
CHEMICALS -- 1.81%
- ------------------------------------------------------------------------------
Du Pont (E. I.) De Nemours & Company.............. 5,800 307,763
COMPUTER SERVICES -- 0.65%
- ------------------------------------------------------------------------------
Sabre Group Holdings Inc.......................... 2,500 111,250
CONGLOMERATES -- 8.35%
- ------------------------------------------------------------------------------
Berkshire Hathaway Inc. (Class B) (a)............. 137 318,500
Minnesota Mining & Manufacturing Company.......... 5,900 419,638
Textron Inc....................................... 9,000 683,437
-----------
1,421,575
CONSUMER PRODUCTS -- 1.31%
- ------------------------------------------------------------------------------
International Flavours & Fragrances Inc........... 4,000 176,750
Mattel Inc........................................ 2,000 45,625
-----------
222,375
CRUDE & PETROLEUM -- 0.91%
- ------------------------------------------------------------------------------
Anadarko Petroleum Corporation.................... 5,000 154,375
DRUGS & MEDICAL PRODUCTS -- 1.45%
- ------------------------------------------------------------------------------
Becton, Dickinson & Company....................... 5,800 247,588
ELECTRICAL EQUIPMENT -- 1.21%
- ------------------------------------------------------------------------------
Avnet Inc......................................... 3,400 205,700
ELECTRONICS -- 3.40%
- ------------------------------------------------------------------------------
Conexant Systems Inc. (a)......................... 1,000 16,850
Rockwell International Corporation................ 14,000 563,062
-----------
579,912
ENTERTAINMENT & LEISURE -- 0.85%
- ------------------------------------------------------------------------------
Carnival Corporation.............................. 3,000 144,000
FOOD & BEVERAGES & TOBACCO -- 5.58%
- ------------------------------------------------------------------------------
Diageo (ADR)...................................... 6,100 282,125
Philip Morris Companies Inc....................... 12,500 668,750
-----------
950,875
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
HEALTH CARE -- 1.57%
- ------------------------------------------------------------------------------
Tenet Healthcare Corporation (a).................. 10,200 $ 267,750
HOTELS & RESTAURANTS -- 2.25%
- ------------------------------------------------------------------------------
McDonald's Corporation............................ 5,000 383,125
INSURANCE -- 14.64%
- ------------------------------------------------------------------------------
ACE Ltd........................................... 19,100 657,756
AFLAC Inc......................................... 6,700 294,800
Everest Reinsurance Holdings...................... 14,400 560,700
EXEL Ltd. (Class A)............................... 11,107 833,025
Renaissance Holdings Ltd.......................... 4,000 146,500
-----------
2,492,781
MACHINERY -- 5.07%
- ------------------------------------------------------------------------------
Caterpillar Inc................................... 6,200 285,200
Dover Corporation................................. 15,800 578,675
-----------
863,875
MANUFACTURING -- 4.71%
- ------------------------------------------------------------------------------
Avery Dennison Corporation........................ 10,000 450,625
General Dynamics Corporation...................... 6,000 351,750
-----------
802,375
MISC. FINANCIAL SERVICES -- 9.47%
- ------------------------------------------------------------------------------
Citigroup Inc..................................... 9,750 482,625
Conseco Inc....................................... 15,365 469,593
Countrywide Credit Industries Inc................. 5,600 281,050
Freddie Mac....................................... 5,900 380,181
-----------
1,613,449
MULTI-LINE INSURANCE -- 0.84%
- ------------------------------------------------------------------------------
American International Group Inc.................. 1,475 142,522
PAPER & FOREST PRODUCTS -- 0.57%
- ------------------------------------------------------------------------------
Champion International Corporation................ 2,400 97,200
PRINTING & PUBLISHING -- 0.77%
- ------------------------------------------------------------------------------
Donnelley R.R. & Sons Company..................... 3,000 131,438
RETAIL -- 1.88%
- ------------------------------------------------------------------------------
May Department Stores Company..................... 5,300 319,988
TELECOMMUNICATIONS -- 4.29%
- ------------------------------------------------------------------------------
Motorola Inc...................................... 7,100 433,544
Sprint Corporation................................ 3,100 260,787
Sprint PCS (a).................................... 1,550 35,844
-----------
730,175
TRANSPORTATION -- 3.95%
- ------------------------------------------------------------------------------
AMR Corporation (a)............................... 9,100 540,312
Canadian Pacific Ltd.............................. 7,000 132,125
-----------
672,437
TOTAL COMMON STOCKS
(IDENTIFIED COST $14,023,820)................................... 14,876,290
- ------------------------------------------------------------------------------
</TABLE>
12 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE EQUITY FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
COMMERCIAL PAPER -- 15.53%
- ------------------------------------------------------------------------------
American Express Credit Corporation, 5.30% due
01/14/99.......................................... $500,000 $ 499,043
Ford Motor Credit Company 4.76% due 01/05/99...... 600,000 599,682
General Electric Capital Corporation, 5.28% due
01/13/99.......................................... 200,000 199,648
General Electric Capital Corporation, 5.35% due
01/06/99.......................................... 350,000 349,740
Household Finance Corporation, 5.25% due
01/25/99.......................................... 500,000 498,250
Norwest Financial Inc., 5.50% due 01/22/99........ 500,000 498,396
-----------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $2,644,759).................................... 2,644,759
- ------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 2.55%
- ------------------------------------------------------------------------------
State Street Bank & Trust Repurchase Agreement,
2.00% due 01/04/99 Collateral: U.S. Treasury Bond
$270,000, 13.25% due 05/15/14
Value $451,649.................................... 435,000 435,000
-----------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $435,000)...................................... 435,000
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $17,103,579)................................... $17,956,049
OTHER ASSETS LESS LIABILITIES -- (5.42)%........................ (923,383)
-----------
NET ASSETS -- 100%.............................................. $17,032,666
- ------------------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
ADR American Depository Receipt.
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 13
<PAGE>
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 approximately $597
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 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.
1998 PERFORMANCE REVIEW
The stock market recorded its fourth consecutive year of above-average gains.
Interest rates, inflation, consumer spending, money supply and investor cash
flows remained positive influences, offsetting concerns about foreign economies
and credit market turbulence. The year was noted for its high volatility -- two
price reversal moves of about 20 percent; continued narrowness of market
leadership, favoring large-cap high-growth at the expense of cyclical, commodity
and smaller issues; the emergence of Internet-related stocks as huge market
gainers; and record-high earning valuations for the overall market.
For the full year, large-cap growth stocks outperformed value-oriented cyclical,
commodity companies and smaller issues. The fund benefited from its relatively
large weighting in technology and was negatively impacted by large aggregate
positions in cyclical, commodity and financial sectors.
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNSPERIODS ENDING DECEMBER 31,
1998
<S> <C> <C>
Enterprise Growth & Income Fund - A One Year
With Sales Charge 10.95%
Without Sales Charge 16.50%
S&P 500 Index* 28.57%
Lipper Growth & Income Fund Index* 13.58%
Enterprise Growth & Income Fund - A S&P 500 Index
7/31/97 $9,523.28 $10,000.00
12/31/97 $9,520.52 $10,243.00
1998 $11,091.40 $13,169.43
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNSPERIODS ENDING DECEMBER 31,
1998
<S> <C>
Enterprise Growth & Income Fund - A 7/31/97-12/31/98
With Sales Charge 7.57%
Without Sales Charge 11.34%
S&P 500 Index* 21.41%
Lipper Growth & Income Fund Index* 11.00%
Lipper Growth & Income Fund Index
7/31/97 $10,000.00
12/31/97 $10,210.16
1998 $11,596.70
</TABLE>
14 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C> <C>
Enterprise Growth & Income Fund - B One Year
With Sales Charge 11.95%
Without Sales Charge 15.95%
S&P 500 Index* 28.57%
Lipper Growth & Income Fund Index* 13.58%
Enterprise Growth & Income Fund - B
7/31/97 $10,000.00
12/31/97 $9,976.00
1998 $11,567.17
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C>
Enterprise Growth & Income Fund - B 7/31/97-12/31/98
With Sales Charge 8.09%
Without Sales Charge 10.80%
S&P 500 Index* 21.41%
Lipper Growth & Income Fund Index* 11.00%
S&P 500 Index Lipper Growth & Income Fund Index
7/31/97 $10,000.00 $10,000.00
12/31/97 $10,243.00 $10,210.16
1998 $13,169.43 $11,596.70
</TABLE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C> <C>
Enterprise Growth & Income Fund - C One Year
With Sales Charge 14.95%
Without Sales Charge 15.95%
S&P 500 Index* 28.57%
Lipper Growth & Income Fund Index* 13.58%
Enterprise Growth & Income Fund - C
7/31/97 $10,000.00
12/31/97 $9,979.00
1998 $11,570.65
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C>
Enterprise Growth & Income Fund - C 7/31/97-12/31/98
With Sales Charge 10.83%
Without Sales Charge 10.83%
S&P 500 Index* 21.41%
Lipper Growth & Income Fund Index* 11.00%
S&P 500 Index Lipper Growth & Income Fund Index
7/31/97 $10,000.00 $10,000.00
12/31/97 $10,243.00 $10,210.16
1998 $13,169.43 $11,596.70
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 15
<PAGE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C> <C>
Enterprise Growth & Income Fund - Y
S&P 500 Index*
Lipper Growth & Income Fund Index*
Enterprise Growth & Income Fund - Y
5/31/91 $10,000.00
1991 $11,311.45
1992 $11,889.47
1993 $13,791.78
1994 $14,584.81
1995 $19,864.51
1996 $24,723.37
1997 $31,559.38
1998 $36,949.72
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C>
One Year Five Year
Enterprise Growth & Income Fund - Y 17.08% 21.79%
S&P 500 Index* 28.57% 24.06%
Lipper Growth & Income Fund Index* 13.58% 17.38%
S&P 500 Index Lipper Growth & Income Fund Index
5/31/91 $10,000.00 $10,000.00
1991 $10,895.00 $10,703.00
1992 $11,725.20 $11,733.81
1993 $12,907.10 $13,449.41
1994 $13,077.47 $13,393.73
1995 $17,991.99 $17,564.40
1996 $22,122.95 $21,195.84
1997 $29,503.16 $26,892.43
1998 $37,932.22 $30,544.42
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
5/31/91-12/31/98
Enterprise Growth & Income Fund - Y 18.79%
S&P 500 Index* 19.20%
Lipper Growth & Income Fund Index* 15.84%
5/31/91
1991
1992
1993
1994
1995
1996
1997
1998
</TABLE>
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
* The S&P 500 Index is an unmanaged index that includes 500 companies that tend
to be leaders in important industries within the U.S. economy. It includes
reinvested dividends and excludes any transaction or holding charges. Lipper
Inc. is an independent reporting service that measures the performance of most
mutual funds. The performance results reflect an unmanaged index and are net of
all expenses other than sales charges and redemption fees. One cannot invest
directly in an index.
FUTURE INVESTMENT STRATEGY
With the market at record valuation levels and an expected earnings slowdown,
RSI is placing more emphasis on controlling portfolio risk while patiently
seeking opportunities where its disciplines find them. Market breadth will
broaden during the year, which should benefit the Growth and Income Fund, given
its ample representation in value-type issues, which have previously lagged the
market.
RSI expects to maintain its relatively large concentration in broad technology
growth areas, but most new purchases will be in lower price-to-earnings,
value/growth type companies that have lagged the market and now seem attractive
on a risk/return basis.
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.
16 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
COMMON STOCKS -- 90.64% AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
AEROSPACE -- 4.23%
- ------------------------------------------------------------------------------
AlliedSignal Inc.................................. 44,800 $ 1,985,200
Lockheed Martin Corporation....................... 7,300 618,675
-----------
2,603,875
BANKING -- 1.72%
- ------------------------------------------------------------------------------
BankAmerica Corporation........................... 5,884 353,776
Chase Manhattan Corporation....................... 10,352 704,583
-----------
1,058,359
BASIC INDUSTRIES -- 2.16%
- ------------------------------------------------------------------------------
Aluminum Company of America....................... 17,800 1,327,212
BROADCASTING -- 1.25%
- ------------------------------------------------------------------------------
Time Warner Inc................................... 12,400 769,575
BUILDING & CONSTRUCTION -- 7.96%
- ------------------------------------------------------------------------------
Armstrong World Industries Inc.................... 20,600 1,242,437
Martin Marietta Materials Inc..................... 7,000 435,313
Southdown Inc..................................... 54,372 3,218,143
-----------
4,895,893
CHEMICALS -- 0.98%
- ------------------------------------------------------------------------------
Du Pont (E. I.) De Nemours & Company.............. 11,400 604,913
COMPUTER HARDWARE -- 18.65%
- ------------------------------------------------------------------------------
Cisco Systems Inc. (a)............................ 6,100 566,156
Dallas Semiconductor Corporation.................. 38,930 1,586,398
EMC Corporation (a)............................... 50,100 4,258,500
Hewlett Packard Company........................... 6,100 416,706
IBM............................................... 13,100 2,420,225
Intel Corporation................................. 11,700 1,387,181
Xerox Corporation................................. 7,100 837,800
-----------
11,472,966
COMPUTER SERVICES -- 2.11%
- ------------------------------------------------------------------------------
Cadence Design Systems Inc. (a)................... 25,500 758,625
Safeguard Scientifics Inc......................... 19,600 537,775
-----------
1,296,400
COMPUTER SOFTWARE -- 8.28%
- ------------------------------------------------------------------------------
BMC Software Inc. (a)............................. 34,550 1,539,634
Computer Associates International Inc............. 4,650 198,206
Hyperion Solutions Corporation.................... 3,040 54,720
Learning Company Inc.............................. 29,300 759,969
Sterling Commerce Inc. (a)........................ 56,400 2,538,000
-----------
5,090,529
CRUDE & PETROLEUM -- 4.77%
- ------------------------------------------------------------------------------
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
British Petroleum (ADR)........................... 9,194 $ 873,430
Exxon Corporation................................. 8,100 592,312
Mobil Corporation................................. 9,500 827,687
Royal Dutch Petroleum (ADR)....................... 4,700 225,013
Texaco Inc........................................ 7,900 417,713
-----------
2,936,155
ELECTRICAL EQUIPMENT -- 5.41%
- ------------------------------------------------------------------------------
Emerson Electric Company.......................... 42,900 2,595,450
General Electric Company.......................... 7,200 734,850
-----------
3,330,300
ELECTRONICS -- 0.41%
- ------------------------------------------------------------------------------
Pmc Sierra Inc.................................... 4,000 252,500
ENTERTAINMENT & LEISURE -- 0.19%
- ------------------------------------------------------------------------------
Callaway Golf Company............................. 11,400 116,850
FINANCE -- 0.19%
- ------------------------------------------------------------------------------
Merrill Lynch & Company Inc....................... 1,700 113,475
FOOD & BEVERAGES & TOBACCO -- 2.23%
- ------------------------------------------------------------------------------
Dole Food Inc..................................... 12,600 378,000
Philip Morris Companies Inc....................... 18,580 994,030
-----------
1,372,030
INSURANCE -- 2.33%
- ------------------------------------------------------------------------------
SunAmerica Inc.................................... 17,627 1,429,990
LIFE INSURANCE -- 0.14%
- ------------------------------------------------------------------------------
American General Corporation...................... 1,100 85,800
MACHINERY -- 5.38%
- ------------------------------------------------------------------------------
Deere & Company................................... 16,000 530,000
Ingersoll Rand Company............................ 17,400 816,712
Snap-On Inc....................................... 56,400 1,963,425
-----------
3,310,137
MANUFACTURING -- 0.54%
- ------------------------------------------------------------------------------
Milacron Inc...................................... 17,200 331,100
METALS & MINING -- 1.19%
- ------------------------------------------------------------------------------
Potash Corp. Saskatchewan Inc..................... 11,500 734,563
MISC. FINANCIAL SERVICES -- 1.81%
- ------------------------------------------------------------------------------
Citigroup Inc..................................... 22,500 1,113,750
OIL SERVICES -- 1.32%
- ------------------------------------------------------------------------------
Halliburton Company............................... 9,100 269,588
Schlumberger Ltd.................................. 11,800 544,275
-----------
813,863
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 17
<PAGE>
ENTERPRISE GROWTH AND INCOME FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
PROPERTY-CASUALTY INSURANCE -- 0.86%
- ------------------------------------------------------------------------------
Allstate Corporation.............................. 13,700 $ 529,163
PHARMACEUTICALS -- 3.62%
- ------------------------------------------------------------------------------
Bristol-Myers Squibb Company...................... 5,475 732,623
Johnson & Johnson................................. 6,800 570,350
Lilly (Eli) & Company............................. 500 44,438
Merck & Company Inc............................... 400 59,075
Pfizer Inc........................................ 5,800 727,537
Twinlab Corporation (a)........................... 7,000 91,875
-----------
2,225,898
RETAIL -- 4.60%
- ------------------------------------------------------------------------------
Ethan Allen Interiors Inc......................... 500 20,500
Federated Department Stores Inc. (a).............. 20,200 879,962
Pier 1 Imports Inc................................ 72,900 706,219
Tiffany & Company................................. 23,550 1,221,656
-----------
2,828,337
SAVINGS AND LOAN -- 3.52%
- ------------------------------------------------------------------------------
Federal National Mortgage Association............. 8,700 643,800
Washington Mutual Inc............................. 39,900 1,523,681
-----------
2,167,481
TELECOMMUNICATIONS -- 4.79%
- ------------------------------------------------------------------------------
GTE Corporation................................... 7,700 500,500
Lucent Technologies Inc........................... 11,908 1,309,880
Northern Telecom Ltd.............................. 12,580 630,572
Tellabs Inc. (a).................................. 7,400 507,363
-----------
2,948,315
TOTAL COMMON STOCKS
(IDENTIFIED COST $44,205,507)................................... 55,759,429
- ------------------------------------------------------------------------------
PREFERRED STOCK -- 0.92%
- ------------------------------------------------------------------------------
MISC. FINANCIAL SERVICES -- 0.92%
- ------------------------------------------------------------------------------
Kmart Financing................................... 9,800 567,788
-----------
TOTAL PREFERRED STOCK
(IDENTIFIED COST $596,863)...................................... 567,788
- ------------------------------------------------------------------------------
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
COMMERCIAL PAPER -- 7.64%
- ------------------------------------------------------------------------------
Ford Motor Credit Company 5.97% due 01/06/99...... $1,100,000 $ 1,099,088
General Motors Acceptance Corporation, 5.94% due
01/04/99.......................................... 1,100,000 1,099,456
McDonalds Corporation 6.00% due 01/06/99.......... 900,000 899,250
Midamerican Energy Company 6.20% due 01/04/99..... 1,600,000 1,599,173
-----------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $4,696,967).................................... 4,696,967
- ------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 0.52%
- ------------------------------------------------------------------------------
State Street Bank & Trust Repurchase Agreement,
2.00% due 01/04/99
Collateral: U.S. Treasury Bond $310,000, 6.25% due
02/28/02
Value $330,577.................................... 320,000 320,000
-----------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $320,000)...................................... 320,000
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $49,819,337)................................... $61,344,184
OTHER ASSETS LESS LIABILITIES -- 0.28%.......................... 174,656
-----------
NET ASSETS -- 100%.............................................. $61,518,840
- ------------------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
(ADR) American Depository Receipt.
See notes to financial statements.
18 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
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 $1.9 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.
1998 PERFORMANCE REVIEW
For 1998, investment market action and performance was very narrow, confined
mostly to focusing on big capitalization growth stocks, and especially the
technology sector. In the S&P 500 only 15 stocks accounted for 50 percent of the
increase. Most of these names have little or no dividend yield and thus the
Equity Income Fund cannot own them. On the positive side, telecommunications,
health care and financials helped the fund's performance.
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C>
Enterprise Equity Income Fund - A One Year Five Year
With Sales Charge 5.84% 16.22%
Without Sales Charge 11.13% 17.37%
S&P 500/Barra Value Index* 14.68% 19.88%
Lipper Equity Income Fund Index* 11.78% 16.62%
Enterprise Equity Income Fund -
A S&P 500/Barra Value Index
12/31/88 $9,523.81 $10,000.00
1989 $11,195.52 $12,613.00
1990 $10,278.27 $11,749.01
1991 $12,699.42 $14,399.59
1992 $13,776.21 $15,915.86
1993 $15,628.83 $18,876.21
1994 $15,553.03 $18,757.29
1995 $20,747.28 $25,697.49
1996 $24,452.95 $31,348.37
1997 $31,319.83 $40,746.61
1998 $34,803.00 $46,728.21
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1998
<S> <C>
Enterprise Equity Income Fund - A Ten Year
With Sales Charge 13.28%
Without Sales Charge 13.84%
S&P 500/Barra Value Index* 16.67%
Lipper Equity Income Fund Index* 14.89%
Lipper Equity Income Fund Index
12/31/88 $10,000.00
1989 $12,264.00
1990 $11,637.31
1991 $14,742.14
1992 $16,178.03
1993 $18,578.85
1994 $18,407.92
1995 $23,899.01
1996 $28,193.66
1997 $35,851.05
1998 $40,074.31
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 19
<PAGE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C> <C>
Enterprise Equity Income Fund - B One Year
With Sales Charge 6.49%
Without Sales Charge 10.49%
S&P 500/Barra Value Index* 14.68%
Lipper Equity Income Fund Index* 11.78%
Enterprise Equity S&P 500/Barra Lipper Equity Income
Income Fund - B Value Index Fund Index
5/1/95 $10,000.00 $10,000.00 $10,000.00
1995 $12,057.10 $12,097.02 $11,790.00
1996 $14,133.92 $14,757.16 $13,908.66
1997 $17,999.83 $19,181.35 $17,686.26
1998 $19,587.48 $21,997.17 $19,769.70
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C>
Enterprise Equity Income Fund - B 5/1/95-12/31/98
With Sales Charge 20.10%
Without Sales Charge 20.60%
S&P 500/Barra Value Index* 23.95%
Lipper Equity Income Fund Index* 20.40%
5/1/95
1995
1996
1997
1998
</TABLE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C>
Enterprise Equity Income Fund - C One Year 5/1/97-12/31/98
With Sales Charge 9.47% 17.34%
Without Sales Charge 10.47% 17.34%
S&P 500/Barra Value Index* 14.68% 22.96%
Lipper Equity Income Fund Index* 11.78% 20.00%
Enterprise Equity Income Fund -
C S&P 500/Barra Value Index
5/1/97 $10,000.00 $10,000.00
12/31/97 $11,820.90 $12,311.00
1998 $13,058.55 $14,118.25
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C>
Enterprise Equity Income Fund - C
With Sales Charge
Without Sales Charge
S&P 500/Barra Value Index*
Lipper Equity Income Fund Index*
Lipper Equity Income Fund Index
5/1/97 $10,000.00
12/31/97 $12,127.00
1998 $13,555.56
</TABLE>
20 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIOD ENDING DECEMBER 31, 1998
<S> <C> <C>
Enterprise Equity Income Fund - Y 1/31/98-12/31/98
Cumulative Return 10.70%
S&P 500/Barra Value Index* 12.17%
Lipper Equity Income Fund Index* 11.59%
Enterprise Equity Income Fund -
Y S&P 500/Barra Value Index
1/31/98 $10,000.00 $10,000.00
1998 $11,070 $11,217
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIOD ENDING DECEMBER 31, 1998
<S> <C>
Enterprise Equity Income Fund - Y
Cumulative Return
S&P 500/Barra Value Index*
Lipper Equity Income Fund Index*
Lipper Equity Income Fund Index
1/31/98 $10,000.00
1998 $11,159.00
</TABLE>
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
* The S&P 500/Barra Value Index is an unmanaged index. It includes reinvested
dividends and excludes any transaction or holding charges. Lipper Inc. is an
independent reporting service that measures the performance of most mutual
funds. The performance results reflect an unmanaged index and are net of all
expenses other than sales charges and redemption fees. One cannot invest
directly in an index.
FUTURE INVESTMENT STRATEGY
The question for stock market valuation in 1999 will be whether the market
losses from lower earnings are offset by what it gains from lower rates. As of
now the answer seems to be positive. As long as rates stay low and earnings are
stable, the flow of money into equity funds should continue. Valuations are
high, parts of the world are still fragile and, after four very strong years,
the market is entitled to a breather.
With the expectation for slower economic growth, low inflation and lack of
pricing power and uncertain earnings, selectivity becomes important. In this
environment companies that can achieve unit growth and who do not need price
increases to succeed should be favored. This means an emphasis on health care,
pharmaceuticals, hospital supplies and telecommunications -- primarily
telephones. Selected industrial names such as General Electric, Xerox and Pitney
Bowes should also do well. Financials -- banks and insurance -- should benefit
from lower interest rates.
At the other end of the spectrum from the stable growers are the
economy-sensitive or cyclical stocks. The economic backdrop seems all wrong for
them, but this is already well known and is reflected in their very depressed
prices. If Southeast Asia stabilizes and shows some signs of improvement; the
energy, basic materials and capital good stocks which were hurt the most by the
economic crisis should benefit. The fund is slowly increasing exposure in
international oils, paper, forest products and chemical stocks. It may be early,
but usually these groups move in anticipation of change in the world outlook.
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. 21
<PAGE>
ENTERPRISE EQUITY INCOME FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR
PRINCIPAL
COMMON STOCKS -- 93.89% AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
AEROSPACE -- 2.58%
- ----------------------------------------------------------------------------
Northrop Grumman Corporation...................... 20,000 $ 1,462,500
Timken Company.................................... 25,000 471,875
United Technologies Corporation................... 18,000 1,957,500
------------
3,891,875
AUTOMOTIVE -- 2.31%
- ----------------------------------------------------------------------------
Ford Motor Company................................ 35,000 2,054,063
General Motors Corporation........................ 20,000 1,431,250
------------
3,485,313
BANKING -- 9.18%
- ----------------------------------------------------------------------------
Bank of New York Company Inc...................... 45,000 1,811,250
BankAmerica Corporation........................... 30,000 1,803,750
BankBoston Corporation............................ 30,000 1,168,125
Bankers Trust New York Corporation................ 5,000 427,188
Chase Manhattan Corporation....................... 28,000 1,905,750
First Union Corporation........................... 20,000 1,216,250
Fleet Financial Group Inc......................... 35,000 1,564,062
Mellon Bank Corporation........................... 20,000 1,375,000
Morgan J P & Company Inc.......................... 10,000 1,050,625
Wells Fargo & Company............................. 38,000 1,517,625
------------
13,839,625
CAPITAL GOODS & SERVICES -- 0.98%
- ----------------------------------------------------------------------------
Cooper Industries Inc............................. 15,000 715,313
Harsco Corporation................................ 25,000 760,937
------------
1,476,250
CHEMICALS -- 1.46%
- ----------------------------------------------------------------------------
Du Pont (E. I.) De Nemours & Company.............. 28,000 1,485,750
Olin Corporation.................................. 25,000 707,813
------------
2,193,563
COMMUNICATIONS -- 0.79%
- ----------------------------------------------------------------------------
Frontier Corporation.............................. 35,000 1,190,000
COMPUTER HARDWARE -- 2.35%
- ----------------------------------------------------------------------------
Xerox Corporation................................. 30,000 3,540,000
CONGLOMERATES -- 1.48%
- ----------------------------------------------------------------------------
Minnesota Mining & Manufacturing Company.......... 10,000 711,250
<CAPTION>
NUMBER
OF SHARES
OR
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
Textron Inc....................................... 20,000 $ 1,518,750
------------
2,230,000
CONSUMER DURABLES -- 0.95%
- ----------------------------------------------------------------------------
Dana Corporation.................................. 35,000 1,430,625
CONSUMER NON-DURABLES -- 1.85%
- ----------------------------------------------------------------------------
Avon Products Inc................................. 55,000 2,433,750
Eastman Kodak Company............................. 5,000 360,000
------------
2,793,750
CONSUMER PRODUCTS -- 0.92%
- ----------------------------------------------------------------------------
Colgate Palmolive Company......................... 15,000 1,393,125
CRUDE & PETROLEUM -- 4.99%
- ----------------------------------------------------------------------------
Amoco Corporation................................. 14,000 845,250
British Petroleum (ADR)........................... 12,000 1,140,000
Chevron Corporation............................... 15,000 1,244,062
Exxon Corporation................................. 20,000 1,462,500
Mobil Corporation................................. 18,000 1,568,250
Royal Dutch Petroleum (ADR)....................... 10,000 478,750
Texaco Inc........................................ 15,000 793,125
------------
7,531,937
ELECTRICAL EQUIPMENT -- 4.59%
- ----------------------------------------------------------------------------
Emerson Electric Company.......................... 30,000 1,815,000
General Electric Company.......................... 50,000 5,103,125
------------
6,918,125
ELECTRONICS -- 1.38%
- ----------------------------------------------------------------------------
Amp Inc........................................... 40,000 2,082,500
ENERGY -- 7.49%
- ----------------------------------------------------------------------------
Atlantic Richfield Company........................ 12,000 783,000
Consolidated Natural Gas Company.................. 30,000 1,620,000
Duke Energy Company............................... 25,000 1,601,562
El Paso Energy Corporation........................ 45,000 1,566,563
Enron Corporation................................. 30,000 1,711,875
Questar Corporation............................... 40,000 775,000
USX Marathon Group................................ 30,000 903,750
Williams Companies Inc............................ 75,000 2,339,062
------------
11,300,812
FOOD & BEVERAGES & TOBACCO -- 1.59%
- ----------------------------------------------------------------------------
Fortune Brands Inc................................ 20,000 632,500
</TABLE>
22 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE EQUITY INCOME FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
Philip Morris Companies Inc....................... 33,000 $ 1,765,500
------------
2,398,000
HOTELS & RESTAURANTS -- 0.15%
- ----------------------------------------------------------------------------
Felcor Lodging Trust Inc.......................... 10,000 230,625
INSURANCE -- 1.38%
- ----------------------------------------------------------------------------
Cigna Corporation................................. 27,000 2,087,438
MACHINERY -- 2.67%
- ----------------------------------------------------------------------------
Caterpillar Inc................................... 23,000 1,058,000
Pitney Bowes Inc.................................. 45,000 2,972,812
------------
4,030,812
MANUFACTURING -- 0.47%
- ----------------------------------------------------------------------------
Eaton Corporation................................. 10,000 706,875
MISC. FINANCIAL SERVICES -- 1.31%
- ----------------------------------------------------------------------------
Citigroup Inc..................................... 40,000 1,980,000
MULTI-LINE INSURANCE -- 1.19%
- ----------------------------------------------------------------------------
Lincoln National Corporation...................... 22,000 1,799,875
OIL SERVICES -- 2.49%
- ----------------------------------------------------------------------------
Baker Hughes Inc.................................. 45,000 795,937
Diamond Offshore Drilling Inc..................... 30,000 710,625
Halliburton Company............................... 40,000 1,185,000
Schlumberger Ltd.................................. 23,000 1,060,875
------------
3,752,437
PROPERTY-CASUALTY INSURANCE -- 0.69%
- ----------------------------------------------------------------------------
St. Paul Companies Inc............................ 30,000 1,042,500
PAPER & FOREST PRODUCTS -- 1.80%
- ----------------------------------------------------------------------------
Georgia Pacific Corporation....................... 25,000 1,464,063
International Paper Company....................... 28,000 1,254,750
------------
2,718,813
PAPER PRODUCTS -- 1.26%
- ----------------------------------------------------------------------------
Bowater Inc....................................... 20,000 828,750
Temple-Inland Inc................................. 18,000 1,067,625
------------
1,896,375
PHARMACEUTICALS -- 8.88%
- ----------------------------------------------------------------------------
American Home Products Corporation................ 40,000 2,252,500
Baxter International Inc.......................... 30,000 1,929,375
Bristol-Myers Squibb Company...................... 18,000 2,408,625
<CAPTION>
NUMBER
OF SHARES
OR
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
Lilly (Eli) & Company............................. 8,000 $ 711,000
Merck & Company Inc............................... 8,000 1,181,500
Pharmacia & Upjohn Inc............................ 35,000 1,981,875
Schering Plough Corporation....................... 8,000 442,000
Smithkline Beecham (ADR).......................... 25,000 1,737,500
Warner-Lambert Company............................ 10,000 751,875
------------
13,396,250
PUBLISHING -- 1.69%
- ----------------------------------------------------------------------------
McGraw Hill Inc................................... 25,000 2,546,875
RAW MATERIALS -- 3.72%
- ----------------------------------------------------------------------------
Carpenter Technology Corporation.................. 15,000 509,063
Phelps Dodge Corporation.......................... 10,000 508,750
Reynolds Metals Company........................... 15,000 790,312
Rohm & Haas Company............................... 28,000 843,500
Union Camp Corporation............................ 25,000 1,687,500
Weyerhaeuser Company.............................. 25,000 1,270,312
------------
5,609,437
REAL ESTATE -- 2.35%
- ----------------------------------------------------------------------------
Avalon Bay Communities Inc........................ 10,000 342,500
Boston Properties Inc............................. 20,000 610,000
Crescent Real Estate Equities..................... 25,000 575,000
Developers Diversified Realty..................... 20,000 355,000
Equity Office Properties Trust.................... 25,000 600,000
Equity Residential Properties Trust............... 15,000 606,563
Health Care Property Investors Inc................ 15,000 461,250
------------
3,550,313
RETAIL -- 0.56%
- ----------------------------------------------------------------------------
Sears Roebuck & Company........................... 20,000 850,000
SAVINGS AND LOAN -- 2.37%
- ----------------------------------------------------------------------------
Federal National MortgageAssociation.............. 25,000 1,850,000
Washington Mutual Inc............................. 45,000 1,718,437
------------
3,568,437
TECHNOLOGY -- 0.99%
- ----------------------------------------------------------------------------
Harris Corporation................................ 17,000 622,625
Thomas & Betts Corporation........................ 20,000 866,250
------------
1,488,875
TELECOMMUNICATIONS -- 10.65%
- ----------------------------------------------------------------------------
Ameritech Corporation............................. 35,000 2,218,125
AT & T Corporation................................ 30,000 2,257,500
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 23
<PAGE>
ENTERPRISE EQUITY INCOME FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
Bell Atlantic Corporation......................... 32,000 $ 1,696,000
BellSouth Corporation............................. 48,000 2,394,000
GTE Corporation................................... 28,000 1,820,000
SBC Communications Inc............................ 40,000 2,145,000
Sprint Corporation................................ 20,000 1,682,500
Sprint PCS (a).................................... 10,000 231,250
U S West Inc...................................... 25,000 1,615,625
------------
16,060,000
UTILITIES -- 4.38%
- ----------------------------------------------------------------------------
American Electric Power Inc....................... 25,000 1,176,562
Carolina Power & Light Company.................... 25,000 1,176,563
CMS Energy Corporation............................ 30,000 1,453,125
Edison International.............................. 45,000 1,254,375
FPL Group Inc..................................... 25,000 1,540,625
------------
6,601,250
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $106,502,795)................................ 141,612,687
- ----------------------------------------------------------------------------
SHORT-TERM GOVERNMENT SECURITIES -- 0.33%
- ----------------------------------------------------------------------------
Freddie Mac Discount Notes, 5.04% due 12/02/99.... $ 500,000 496,878
------------
TOTAL SHORT-TERM GOVERNMENT SECURITIES
(IDENTIFIED COST $496,878).................................... 496,878
- ----------------------------------------------------------------------------
COMMERCIAL PAPER -- 7.07%
- ----------------------------------------------------------------------------
American Express Credit Corporation, 5.05% due
01/04/99.......................................... 400,000 399,832
<CAPTION>
NUMBER
OF SHARES
OR
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
Banc One Funding Corporation 5.41% due 01/22/99... $1,000,000 $ 996,844
Enterprise Funding Corporation 5.43% due
01/20/99.......................................... 1,000,000 997,134
Ford Motor Credit Company 5.35% due 01/07/99...... 200,000 199,822
General Electric Capital Corporation, 5.33% due
01/22/99.......................................... 600,000 598,135
Heller Financial Inc. Discount Common Paper, 5.52%
due 01/25/99...................................... 1,500,000 1,494,480
Household Finance Corporation 5.17% due
01/21/99.......................................... 2,500,000 2,492,819
Prudential Funding Corporation 5.17% due
01/15/99.......................................... 2,000,000 1,995,979
Riverwoods Funding Corporation 5.18% due
01/15/99.......................................... 1,500,000 1,496,978
------------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $10,672,023)................................. 10,672,023
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $117,671,696)................................ $152,781,588
OTHER ASSETS LESS LIABILITIES -- (1.29)%...................... (1,948,278)
------------
NET ASSETS -- 100%............................................ $150,833,310
- ----------------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
(ADR) American Depository Receipts.
See notes to financial statements.
24 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
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 $20 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.
1998 PERFORMANCE REVIEW
The Enterprise Capital Appreciation Fund had an excellent year. To start, 1998
will be remembered as the year that astonished investors. Despite global turmoil
and the prospect of slowing corporate profit growth, the large-cap market
delivered an historically unprecedented fourth straight year of gains exceeding
20 percent. Specifically, the Russell 1000 Growth posted a gain of nearly 39
percent. Other capitalization stock categories did not do nearly as well, with
the Russell MidCap Growth Index posting a gain of nearly 18 percent for the
year. Given its exposure to both large and mid-cap stocks, Class A of the
Enterprise Capital Appreciation Fund posted a gain of 30 percent, still beating
the S&P 500 return of 28.6 percent. This past year was a tumultuous one -- in
the financial markets, foreign affairs and domestic politics -- and it was at
times a challenge for investors (and often their advisers) to stay the course.
In the end, though, perseverance and discipline were greatly rewarded.
The Enterprise Capital Appreciation Fund can attribute its superior performance
to several factors. First, Provident emphasized the retail sector given its
strong outlook on consumer spending. This sector was up nearly 76 percent for
the Russell 1000 Growth in 1998, and the Enterprise Capital Appreciation Fund
had a triple sector overweighting in stocks such as Kohls, Safeway, and Family
Dollar Stores. Next, the Fund benefited from technology services stocks. While
1998 may have been an exceptionally volatile year for technology names,
especially given their exposure to foreign markets, the software side posted
phenomenal gains, mostly in the fourth quarter. The Enterprise Capital
Appreciation Fund contained names such as America Online, Dell Computer, Fiserv,
Lucent Technologies and Lycos. Finally, the dramatic underweighting in the
consumer non-durable sector helped fund performance. Much of this sector was
overly exposed to multinational markets, with the Fund holding only Clear
Channel Communications at year-end. This sector was up only 10 percent in the
large-cap Russell index, with many other areas providing better opportunities.
THE ENTERPRISE GROUP OF FUNDS, INC. 25
<PAGE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C>
Enterprise Capital Appreciation Fund -
A
With Sales Charge
Without Sales Charge
S&P 500/Barra Growth Index*
Lipper Cap. Appr. Fund Index*
Enterprise Capital Appreciation Fund -
A S&P 500/Barra Growth Index
12/31/88 $9,524.16 $10,000.00
1989 $12,788.09 $13,640.00
1990 $13,279.15 $13,667.28
1991 $21,119.16 $18,911.42
1992 $22,350.41 $19,870.22
1993 $23,626.61 $20,204.04
1994 $22,809.13 $20,836.43
1995 $28,671.08 $28,779.28
1996 $33,407.54 $35,680.55
1997 $40,179.25 $48,718.22
1998 $52,293.70 $69,252.95
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C> <C>
Enterprise Capital Appreciation Fund -
A One Year Five Year Ten Year
With Sales Charge 23.98% 16.09% 17.99%
Without Sales Charge 30.15% 17.22% 18.57%
S&P 500/Barra Growth Index* 42.15% 27.94% 21.35%
Lipper Cap. Appr. Fund Index* 19.98% 16.26% 15.71%
Lipper Cap. Appr. Fund Index
12/31/88 $10,000.00
1989 $12,830.00
1990 $11,831.83
1991 $16,275.86
1992 $17,506.31
1993 $20,263.56
1994 $19,765.08
1995 $26,008.86
1996 $29,897.19
1997 $35,867.66
1998 $43,034.01
</TABLE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C>
Enterprise Capital Appreciation Fund - B
With Sales Charge
Without Sales Charge
S&P 500/Barra Growth Index*
Lipper Cap Appr. Fund Index*
Enterprise Capital Appreciation Fund -
B
5/1/95 $10,000
1995 $11,898.80
1996 $13,787.62
1997 $16,489.30
1998 $21,044.56
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C>
Enterprise Capital Appreciation Fund - B One Year
With Sales Charge 25.44%
Without Sales Charge 29.44%
S&P 500/Barra Growth Index* 42.15%
Lipper Cap Appr. Fund Index* 19.98%
Barra/Growth Index Lipper Cap Appr. Fund Index
5/1/95 $10,000 $10,000.00
1995 $12,258.67 $12,093.00
1996 $15,198.30 $13,900.90
1997 $20,751.75 $16,676.91
1998 $29,498.62 $20,008.96
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
Enterprise Capital Appreciation Fund - B 5/1/95-12/31/98
With Sales Charge 22.47%
Without Sales Charge 22.94%
S&P 500/Barra Growth Index* 34.27%
Lipper Cap Appr. Fund Index* 20.80%
5/1/95
1995
1996
1997
1998
</TABLE>
26 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C> <C>
Enterprise Capital Appreciation Fund C One Year
With Sales Charge 28.60%
Without Sales Charge 29.60%
S&P 500/Barra Growth Index* 42.15%
Lipper Cap. Appr. Fund Index* 19.98%
Enterprise Capital Appreciation Fund -
C
5/1/97 $10,000.00
1997 $12,234.60
1998 $15,856.04
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C>
Enterprise Capital Appreciation Fund C 5/1/97-12/31/98
With Sales Charge 31.82%
Without Sales Charge 31.82%
S&P 500/Barra Growth Index* 39.09%
Lipper Cap. Appr. Fund Index* 26.34%
S&P 500/Barra Growth Index Lipper Cap. Appr. Fund Index
5/1/97 $10,000.00 $10,000.00
1997 $12,199.00 $12,311.00
1998 $17,340.88 $14,770.74
</TABLE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIOD ENDING DECEMBER 31, 1998
<S> <C>
Enterprise Capital Appreciation Fund - Y
Cumulative Return
S&P 500/Barra Growth Index*
Lipper Capital Appreciation Fund Index*
Enterprise Capital Appreciation Fund -
Y
10/31/98 $10,000.00
1998 $11,757.00
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIOD ENDING DECEMBER 31, 1998
<S> <C>
Enterprise Capital Appreciation Fund - Y
Cumulative Return
S&P 500/Barra Growth Index*
Lipper Capital Appreciation Fund Index*
S&P 500/Barra Growth Index
10/31/98 $10,000.00
1998 $12,373.79
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIOD ENDING DECEMBER 31, 1998
Enterprise Capital Appreciation Fund - Y 5/31/1998-12/31/98
Cumulative Return 17.57%
S&P 500/Barra Growth Index* 23.74%
Lipper Capital Appreciation Fund Index* 8.88%
Lipper Capital Appreciation Fund
Index
10/31/98 $10,000.00
1998 $10,887.79
</TABLE>
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
* The S&P 500/Barra Growth Index is an unmanaged index. It includes reinvested
dividends and excludes any transaction or holding charges. Lipper Inc. is an
independent reporting service that measures the performance of most mutual
funds. The performance results reflect an unmanaged index and are net of all
expenses other than sales charges and redemption fees. One cannot invest
directly in an index.
FUTURE INVESTMENT STRATEGY
Given the low inflation environment in the U.S. with stronger wage growth and
record low savings rates, the Fund will continue to emphasize retail into 1999.
Emphasis will be on only the highest-quality, "best in class" technology names
with superior fundamentals, market share, proprietary products and solid
management. The Enterprise Capital Appreciation Fund will continue to seek
companies with quality of operations and earnings in both the large and
mid-capitalization markets.
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. 27
<PAGE>
ENTERPRISE CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
COMMON STOCKS -- 95.98% AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
ADVERTISING -- 1.18%
- ---------------------------------------------------------------------------------
Outdoor Systems Inc. (a).......................... 58,000 $ 1,740,000
BANKING -- 2.07%
- ---------------------------------------------------------------------------------
FIRSTAR Corporation............................... 32,720 3,051,140
BROADCASTING -- 2.74%
- ---------------------------------------------------------------------------------
Clear Channel Communications (a).................. 44,000 2,398,000
Infinity Broadcasting Corporation (Class A) (a)... 60,000 1,642,500
-------------
4,040,500
BUSINESS SERVICES -- 5.61%
- ---------------------------------------------------------------------------------
Ceridian Corporation (a).......................... 24,000 1,675,500
Computer Sciences Corporation (a)................. 25,000 1,610,937
Concord EFS Inc. (a).............................. 50,000 2,118,750
CSG Systems International Inc.(a)................. 20,000 1,580,000
Paychex Inc....................................... 25,000 1,285,938
-------------
8,271,125
COMPUTER HARDWARE -- 2.51%
- ---------------------------------------------------------------------------------
Dell Computer Corporation (a)..................... 30,000 2,195,625
Lexmark International Group Inc. (Class A) (a).... 15,000 1,507,500
-------------
3,703,125
COMPUTER SERVICES -- 12.34%
- ---------------------------------------------------------------------------------
America Online Inc. (a)........................... 54,000 8,640,000
Boole & Babbage Inc. (a).......................... 15,000 441,562
Cadence Design Systems Inc. (a)................... 25,400 755,650
Fiserv Inc. (a)................................... 60,000 3,086,250
Lycos Inc. (a).................................... 30,000 1,666,875
Sungard Data Systems Inc. (a)..................... 50,000 1,984,375
Synopsys Inc. (a)................................. 30,000 1,627,500
-------------
18,202,212
COMPUTER SOFTWARE -- 1.16%
- ---------------------------------------------------------------------------------
BMC Software Inc. (a)............................. 10,000 445,625
SAP Aktiengesellschaft (ADR)...................... 35,000 1,262,188
-------------
1,707,813
ELECTRONICS -- 0.98%
- ---------------------------------------------------------------------------------
SCI Systems Inc. (a).............................. 25,000 1,443,750
FINANCE -- 6.31%
- ---------------------------------------------------------------------------------
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Associates First Capital Corporation (Class A).... 60,000 $ 2,542,500
MBNA Corporation.................................. 200,502 5,000,019
Metris Companies Inc.............................. 35,000 1,760,937
-------------
9,303,456
HEALTH CARE -- 7.48%
- ---------------------------------------------------------------------------------
Cardinal Health Inc............................... 30,000 2,276,250
Henry Schein Inc. (a)............................. 30,000 1,342,500
McKesson Corporation.............................. 40,000 3,162,500
Omnicare Inc...................................... 50,000 1,737,500
Pss World Medical Inc. (a)........................ 45,000 1,035,000
Total Renal Care Holdings Inc. (a)................ 50,000 1,478,125
-------------
11,031,875
MANUFACTURING -- 4.09%
- ---------------------------------------------------------------------------------
Tyco International Ltd............................ 80,000 6,035,000
MEDICAL INSTRUMENTS -- 2.81%
- ---------------------------------------------------------------------------------
Sofamor/Danek Group Inc. (a)...................... 34,100 4,151,675
MEDICAL SERVICES -- 4.22%
- ---------------------------------------------------------------------------------
Health Management Associates Inc. (Class A) (a)... 90,142 1,949,321
Quintiles Transnational Corporation (a)........... 80,000 4,270,000
-------------
6,219,321
PHARMACEUTICALS -- 9.20%
- ---------------------------------------------------------------------------------
Elan (ADR) (a).................................... 54,000 3,756,375
Pfizer Inc........................................ 35,000 4,390,312
Schering Plough Corporation....................... 75,400 4,165,850
Watson Pharmaceuticals Inc. (a)................... 20,000 1,257,500
-------------
13,570,037
RETAIL -- 22.87%
- ---------------------------------------------------------------------------------
Bed Bath & Beyond Inc. (a)........................ 72,600 2,477,475
Costco Companies Inc. (a)......................... 65,000 4,692,188
CVS Corporation................................... 70,000 3,850,000
Dollar General Corporation........................ 52,800 1,247,400
Dollar Tree Stores Inc. (a)....................... 57,450 2,509,847
Family Dollar Stores Inc.......................... 140,000 3,080,000
Kohl's Corporation (a)............................ 70,000 4,300,625
Linens 'n Things Inc. (a)......................... 40,000 1,585,000
Office Depot Inc. (a)............................. 43,000 1,588,313
</TABLE>
28 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE CAPITAL APPRECIATION FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Safeway Inc. (a).................................. 95,000 $ 5,789,062
Staples Inc. (a).................................. 60,025 2,622,342
-------------
33,742,252
TECHNOLOGY -- 1.45%
- ---------------------------------------------------------------------------------
Linear Technology Corporation..................... 9,300 832,931
Waters Corporation (a)............................ 15,000 1,308,750
-------------
2,141,681
TELECOMMUNICATIONS -- 8.13%
- ---------------------------------------------------------------------------------
Alltel Corporation................................ 20,000 1,196,250
Lucent Technologies Inc........................... 33,000 3,630,000
MCI Worldcom Inc. (a)............................. 100,000 7,175,000
-------------
12,001,250
WASTE MANAGEMENT -- 0.83%
- ---------------------------------------------------------------------------------
Allied Waste Industries Inc. (a).................. 52,000 1,228,500
TOTAL COMMON STOCKS
(IDENTIFIED COST $81,056,188).................................... 141,584,712
- ---------------------------------------------------------------------------------
COMMERCIAL PAPER -- 4.07%
- ---------------------------------------------------------------------------------
General Electric Capital Corporation, 5.485% due
01/20/99.......................................... $ 6,000,000 6,000,000
-------------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $6,000,000)..................................... 6,000,000
- ---------------------------------------------------------------------------------
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 1.90%
- ---------------------------------------------------------------------------------
State Street Bank & Trust Repurchase Agreement,
3.25% due 01/04/99
Collateral: U.S. Treasury Note $2,790,000, 5.38%
due 01/31/00 Value $2,870,213..................... $ 2,810,000 $ 2,810,000
-------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $2,810,000)..................................... 2,810,000
- ---------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $89,866,188).................................... $ 150,394,712
OTHER ASSETS LESS LIABILITIES -- (1.95)%......................... (2,882,987)
-------------
NET ASSETS -- 100%............................................... $ 147,511,725
- ---------------------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
ADR American Depository Receipts.
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 29
<PAGE>
ENTERPRISE SMALL COMPANY GROWTH FUND
WILLIAM D. WITTER, INC.
New York, New York
INVESTMENT MANAGEMENT
William D. Witter, Inc., which has approximately $905 million in assets under
management, became manager of the fund on September 2, 1998. William D. Witter's
normal investment minimum for a separate account is $1 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
William D. Witter will seek out stocks of small companies that are expected to
have above-average growth in earnings which are reasonably valued. The manager
uses a disciplined approach in evaluating growth companies. It relates the
expected growth rate in earnings to the price-to-earnings ratio of the stock.
Generally, the manager will not buy a stock if the price-to-earnings ratio
exceeds the growth rate. By using this valuation parameter, the manager believes
it moderates some of the inherent volatility in the small-capitalization sector
of the market. Securities will be sold when the manager believes the stock price
exceeds the valuation criteria or when the stock appreciates to the point where
it is substantially overweighted in the fund or when the company no longer meets
expectations. The manager's goal is to hold a stock for a minimum of one year
but this may not always be feasible and there may be times when short-term gains
or losses will be realized.
1998 PERFORMANCE REVIEW
A key influence on the results of the fund during 1998 was the general
environment that affected all small-capitalization issues. The first quarter
benefited from a strong 5.5 percent GDP growth rate, which was accompanied by a
surprising low level of price increases. Common stocks appreciated. In a
continuation of the trend of the prior year, however, large-capitalization
issues outperformed those of smaller companies. In that quarter, the total
return of the S&P 500 was 14.1 percent versus a 10.3 percent return for the
Russell 2000. By the end of the second quarter the divergence increased (S&P
+17.9 percent, Russell 2000 +5.1 percent).
As concerns developed during the summer about the inability of Japan to
invigorate its economy, Russia's virtual economic collapse, and the near-failure
of Long Term Capital Management LP, interest in investing in small companies was
further reduced. By the time William D. Witter, Inc., assumed the responsibility
of managing the Enterprise Small Company Growth Fund on September 2, the Russell
2000 was off more than 22 percent for the year. The S&P was virtually even for
that time frame. During the balance of 1998, the Russell 2000 recovered most of
its loss and finished up 2.4 percent.
The low valuation levels that a number of equities, such as Atlas Air, reached
in September and early October positively affected the results in the last four
months of the year. The shares of this air freight carrier receded to
30 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
$20.63 from $41.00 five months earlier. Twenty thousand shares of Atlas Air were
purchased at $21.80. At December 31, 1998, Atlas Air was valued at close to
$49.00. Other air transportation issues such as Alaska Air were in a similar
position.
A factor that had a slight negative influence on the results was the unusually
high turnover in the fund associated with the managerial change of the fund.
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ENTERPRISE SMALL RUSSELL 2000 LIPPER SMALL CAP
COMPANY GROWTH FUND - A INDEX FUND INDEX
<S> <C> <C> <C>
7/31/97 $ 9,524.36 $ 10,000.00 $ 10,000.00
1997 $ 9,182.63 $ 10,610.10 $ 10,258.00
1998 $ 8,809.81 $ 10,338.49 $ 10,170.81
Average Annual Total Returns
Periods ending December 31, 1998
Enterprise Small Company Growth Fund - A One Year 7/31/97-12/31/98
With Sales Charge -8.63% -8.54%
Without Sales Charge -4.06% -5.35%
Russell 2000 Index* -2.56% 2.37%
Lipper Small Cap Fund Index* -0.85% 1.20%
</TABLE>
During 1998, an investment in the above hypothetical shareholder account
decreased $373 compared to a decrease of $273 and an increase of $3,883 in the
Russell 2000 and the Russell 1000 Growth index, respectively.
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C> <C>
Enterprise Small Company Growth Fund - B One Year 7/31/97-12/31/98
With Sales Charge -8.93% -9.15%
Without Sales Charge -5.14% -6.24%
Russell 2000 Index* -2.56% 2.37%
Lipper Small Cap Fund Index* -0.85% 1.18%
Enterprise Small Company Growth Fund - B Russell 2000 Index
7/31/97 $10,000.00 $10,000.00
12/31/97 $9,620.95 $10,610.10
1998 $9,126.43 $10,338.49
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1998
<S> <C>
Enterprise Small Company Growth Fund - B
With Sales Charge
Without Sales Charge
Russell 2000 Index*
Lipper Small Cap Fund Index*
Lipper Small Cap Fund Index
7/31/97 $10,000.00
12/31/97 $10,255.30
1998 $10,168.13
</TABLE>
During 1998, an investment in the above hypothetical shareholder account
decreased $493 compared to a decrease of $272 and an increase of $3,883 in the
Russell 2000 and the Russell 1000 Growth index, respectively.
THE ENTERPRISE GROUP OF FUNDS, INC. 31
<PAGE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C> <C>
Enterprise Small Company Growth Fund - C One Year 7/31/97-12/31/98
With Sales Charge -5.71% -6.00%
Without Sales Charge -4.76% -6.00%
Russell 2000 Index* -2.56% 2.37%
Lipper Small Cap Fund Index* -2.56% 2.37%
Enterprise Small Russell 2000 Lipper Small Cap
Company Growth Fund - C Index Fund Index
7/31/97 $10,000.00 $10,000.00 $10,000.00
12/31/97 $9,617.00 $10,610.10 $10,255.30
1998 $9,159.23 $10,338.49 $10,168.13
</TABLE>
During 1998, an investment in the above hypothetical shareholder account
decreased $458 compared to a decrease of $272 and an increase of $3,883 in the
Russell 2000 and the Russell 1000 Growth index, respectively.
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
One Year
<S> <C> <C> <C>
Enterprise Small Company Growth Fund - Y -3.76%
Russell 2000 Index* -2.56%
Lipper Small Cap Fund Index* -0.85%
Enterprise Small Lipper Small
Company Growth Fund - Y Russell 2000 Cap Fund Index
5/31/91 $10,000.00 $10,000.00 $10,000.00
1991 $12,062.05 $10,773.46 $11,557.00
1992 $14,075.21 $12,756.85 $12,850.23
1993 $17,696.76 $15,167.90 $15,024.49
1994 $19,531.91 $14,891.84 $14,952.37
1995 $27,258.73 $19,127.08 $19,680.31
1996 $34,828.48 $22,281.14 $22,506.40
1997 $38,293.92 $27,265.43 $25,893.61
1998 $36,854.07 $26,567.44 $25,673.52
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
Five Year 5/31/91-12/31/98
<S> <C> <C>
Enterprise Small Company Growth Fund - Y 15.80% 18.75%
Russell 2000 Index* 11.86% 13.74%
Lipper Small Cap Fund Index* 11.31% 13.22%
5/31/91
1991
1992
1993
1994
1995
1996
1997
1998
</TABLE>
During 1998, an investment in the above hypothetical shareholder account
decreased $1,440 compared to a decrease of $698 and an increase of $10,897 in
the Russell 2000 and the Russell 1000 Growth index, respectively.
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
* The Russell 2000 Index is an unmanaged index. It includes reinvested
dividends and excludes any transaction or holding charges. The Russell 2000
Index replaces the Russell 1000 Value Index as the broad-based comparison to the
Fund as it more appropriately reflects the securities market in which the Fund
invests. Lipper Inc. is an independent reporting service that measures the
performance of most mutual funds. The performance results reflect an unmanaged
index and are net of all expenses other than sales charges and redemption fees.
One cannot invest directly in an index.
32 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
FUTURE INVESTMENT STRATEGY
A continuation of a 2.5 percent to 3 percent economic growth rate is
anticipated. While new obstacles such as the current crisis in Brazil are
undoubtedly going to appear, the combination of the capital investments and
restructuring decisions of the late 1980s and of the 1990s has created a
positive environment.
Several of the keys to the recent and, Witter believes, future growth are the
productivity improvements associated with new technologies for use in industry,
commerce and telecommunications. Consequently, Witter will continue to look for
investment opportunities in the technology sector.
Due to higher valuation levels, positions in some of the software holdings may
be reduced. The semi-conductor equipment sector appears to have strong
fundamentals beginning in the year 2000. Additions may be made to the Fund in
this area. Some commercial service providers such as Charles River Associates
have substantial opportunities for both exceptional revenue and earnings growth.
This sector as well as health care are ones that Witter expects to expand. While
it appears early, oil service issues are being reviewed as future fund
additions.
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. 33
<PAGE>
ENTERPRISE SMALL COMPANY GROWTH FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
COMMON STOCKS -- 96.43% AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
AEROSPACE -- 2.54%
- ------------------------------------------------------------------------------
AAR Corporation................................... 16,000 $ 382,000
Tristar Aerospace Company (a)..................... 49,000 343,000
-----------
725,000
BUSINESS SERVICES -- 7.28%
- ------------------------------------------------------------------------------
Charles River Associates Inc. (a)................. 25,000 546,875
Labor Ready Inc. (a).............................. 40,500 797,344
Maximus Inc. (a).................................. 19,750 730,750
-----------
2,074,969
COMPUTER HARDWARE -- 3.24%
- ------------------------------------------------------------------------------
National Computer Systems Inc..................... 25,000 925,000
COMPUTER SERVICES -- 4.15%
- ------------------------------------------------------------------------------
Cymer Inc. (a).................................... 50,000 731,250
Kronos Inc. (a)................................... 10,200 451,988
-----------
1,183,238
COMPUTER SOFTWARE -- 13.17%
- ------------------------------------------------------------------------------
Legato Systems Inc. (a)........................... 13,500 890,156
Pervasive Software Inc. (a)....................... 80,000 1,540,000
Verity Inc. (a)................................... 50,000 1,325,000
-----------
3,755,156
CONSTRUCTION -- 0.51%
- ------------------------------------------------------------------------------
Stolt Comex Seaway (ADR) (a)...................... 25,900 145,688
DRUGS & MEDICAL PRODUCTS -- 2.38%
- ------------------------------------------------------------------------------
Geltex Pharmaceuticals Inc. (a)................... 30,000 678,750
ELECTRICAL EQUIPMENT -- 2.31%
- ------------------------------------------------------------------------------
C & D Technologies................................ 24,000 660,000
ELECTRONICS -- 7.59%
- ------------------------------------------------------------------------------
Barringer Technologies Inc. (a)................... 116,500 1,004,812
Lernout & Hauspie Speech Products (a)............. 16,000 522,000
Veeco Instruments Inc. (a)........................ 12,000 637,500
-----------
2,164,312
FINANCE -- 7.08%
- ------------------------------------------------------------------------------
Doral Financial Corporation....................... 37,000 818,625
Hambrecht & Quist Group (a)....................... 25,000 567,188
Raymond James Financial Inc....................... 30,000 633,750
-----------
2,019,563
MANUFACTURING -- 8.82%
- ------------------------------------------------------------------------------
Astropower Inc. (a)............................... 46,000 442,750
Candela Corporation (a)........................... 51,000 286,875
Mueller Industries Inc. (a)....................... 25,000 507,812
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
Trinity Industries Inc............................ 16,000 $ 616,000
Varlen Corporation................................ 28,750 663,047
-----------
2,516,484
MEDICAL INSTRUMENTS -- 2.36%
- ------------------------------------------------------------------------------
Theragenics Corporation (a)....................... 40,000 672,500
MEDICAL SERVICES -- 3.34%
- ------------------------------------------------------------------------------
Maxxim Medical Inc. (a)........................... 32,000 952,000
OIL SERVICES -- 1.19%
- ------------------------------------------------------------------------------
Atwood Oceanics Inc. (a).......................... 20,000 340,000
PHARMACEUTICALS -- 1.38%
- ------------------------------------------------------------------------------
Jones Pharma Inc.................................. 10,800 394,200
RETAIL -- 2.12%
- ------------------------------------------------------------------------------
Rush Enterprises Inc. (a)......................... 55,000 605,000
TECHNOLOGY -- 8.99%
- ------------------------------------------------------------------------------
Applied Science & Technology Inc. (a)............. 79,000 809,750
Catalytica Inc. (a)............................... 45,000 810,000
Flir Systems Inc. (a)............................. 27,000 627,750
Mecon Inc. (a).................................... 30,000 315,000
-----------
2,562,500
TRANSPORTATION -- 17.98%
- ------------------------------------------------------------------------------
Alaska Air Group Inc. (a)......................... 23,000 1,017,750
Amtran Inc. (a)................................... 24,000 651,000
Atlas Air Inc. (a)................................ 28,000 1,370,250
Ryanair Holdings (ADR) (a)........................ 24,000 906,000
Sea Containers Ltd. (Class A)..................... 39,500 1,182,531
-----------
5,127,531
TOTAL COMMON STOCKS
(IDENTIFIED COST $21,105,380)................................... 27,501,891
- ------------------------------------------------------------------------------
COMMERCIAL PAPER -- 3.81%
- ------------------------------------------------------------------------------
Novartis Finance Corporation 5.25% due 01/04/99... $1,087,000 1,086,524
-----------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $1,086,524).................................... 1,086,524
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $22,191,904)................................... $28,588,415
OTHER ASSETS LESS LIABILITIES -- (0.24)%........................ (69,093)
-----------
NET ASSETS -- 100%.............................................. $28,519,322
- ------------------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
(ADR) American Depository Receipt.
See notes to financial statements.
34 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE SMALL COMPANY VALUE FUND
GABELLI ASSET MANAGEMENT COMPANY
Rye, New York
INVESTMENT MANAGEMENT
Gabelli Asset Management Company, which manages approximately $7.2 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.
1998 PERFORMANCE REVIEW
Small company stocks had a lackluster year, especially when compared to the
larger market indices. The last quarter of the year reversed the sharp
correction seen in the third quarter. The best performers in the fund were media
and communications companies. Price Communications, the cellular telephone
company, rose 372 percent. Cable company Century Communications rose 225
percent. Its affiliate telephone company, Centennial Cellular, was acquired and
resulted in a $200 million gain for Century. Another telephone holding, Viatel,
rose 115 percent. Data Broadcasting increased 218 percent for the year. The
company plans an initial public offering of MarketWatch, its business news and
data web site.
The Fund's largest holding, Cablevision, rose 109 percent. This follows a
stellar performance in 1997. Cablevision is one of the leading
telecommunications and entertainment companies. Its businesses include cable in
the core media markets of New York, Boston and Cleveland. It owns Madison Square
Garden Properties, including the New York Knicks and Rangers.
Industrial companies that devise a portion of their revenues from outside the
U.S. were challenges. These stocks were negatively impacted by the sluggishness
of the Southeast Asian economy. Companies such as Aeroquip-Vickers, Flowserve,
and Daniel Industries were poor performers, as were issues such as Pioneer
Group, Watts Industries and TVX Gold.
THE ENTERPRISE GROUP OF FUNDS, INC. 35
<PAGE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31,1998
<S> <C> <C> <C>
Enterprise Small Company Value Fund - A One Year Five Year Inception*
With Sales Charge 0.11% 12.02% 12.62%
Without Sales Charge 5.15% 13.10% 13.67%
Russell 2000 Index* -2.56% 11.86% 11.81%
Lipper Small Cap Fund Index* -0.85% 11.30% 11.30%
Enterprise Small Company Russell 2000 Lipper Small Cap
Value Fund - A Index Fund Index
10/1/93 $9,523.81 $10,000.00 $10,000.00
12/31/93 $10,088.57 $10,262.00 $10,269.00
1994 $10,122.87 $10,075.23 $10,219.40
1995 $11,062.78 $12,940.63 $13,450.78
1996 $12,310.66 $15,074.54 $15,382.98
1997 $17,757.44 $18,446.71 $17,693.19
1998 $18,671.42 $17,974.48 $17,542.80
</TABLE>
During 1998, an investment in the above hypothetical shareholder account
increased $914 compared to a decrease of $472 and an increase of $3,476 in the
Russell 2000 and the Russell 1000 Value index, respectively.
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C>
Enterprise Small Company Value Fund - B One Year 5/1/95-12/31/98
With Sales Charge 0.44% 16.34%
Without Sales Charge 4.44% 16.88%
Russell 2000 Index* -2.56% 14.96%
Lipper Small Cap Fund Index* -0.85% 13.72%
Enterprise Small Company Russell 2000
Value Fund - B Index
5/1/95 $10,000.00 $10,000.00
1995 $10,686.60 $12,011.05
1996 $11,837.55 $13,991.67
1997 $16,975.04 $17,121.61
1998 $17,428.73 $16,683.30
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C>
Enterprise Small Company Value Fund - B
With Sales Charge
Without Sales Charge
Russell 2000 Index*
Lipper Small Cap Fund Index*
Lipper Small Cap
Fund Index
5/1/95 $10,000.00
1995 $12,291.00
1996 $14,056.73
1997 $16,167.76
1998 $16,029.69
</TABLE>
During 1998, an investment in the above hypothetical shareholder account
decreased $454 compared to a decrease of $438 and an increase of $3,148 in the
Russell 2000 and the Russell 1000 Value index, respectively.
36 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C>
Enterprise Small Company Value Fund - C One Year 5/1/97-12/31/98
With Sales Charge 4.03% 23.10%
Without Sales Charge 5.03% 23.10%
Russell 2000 Index* -2.56% 14.52%
Lipper Small Cap Fund Index* -0.85% 15.40%
Enterprise Small Company Russell 2000
Value Fund - C Index
5/1/97 $10,000.00 $10,000.00
1997 $13,468.40 $12,808.00
1998 $14,145.20 $12,699.13
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C>
Enterprise Small Company Value Fund - C
With Sales Charge
Without Sales Charge
Russell 2000 Index*
Lipper Small Cap Fund Index*
Lipper Small Cap
Fund Index
5/1/97 $10,000.00
1997 $12,868.06
1998 $12,808.00
</TABLE>
During 1998, an investment in the above hypothetical shareholder account
increased $677 compared to a decrease of $329 and an increase of $1,977 in the
Russell 2000 and the Russell 1000 Value index, respectively.
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C>
One Year 5/31/95-12/31/98
Enterprise Small Company Value Fund - Y 6.13% 17.93%
Russell 2000 Index* -2.56% 14.78%
Lipper Small Cap Fund Index* -0.85% 13.57%
Enterprise Small Company Russell 2000
Value Fund - Y Index
5/31/95 $10,000.00 $10,000.00
1995 $10,535.90 $11,808.09
1996 $11,782.30 $13,755.25
1997 $17,028.96 $16,832.30
1998 $18,072.83 $16,401.39
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C>
Enterprise Small Company Value Fund - Y
Russell 2000 Index*
Lipper Small Cap Fund Index*
Lipper Small Cap
Fund Index
5/31/95 $10,000.00
1995 $12,102.00
1996 $13,839.85
1997 $15,922.74
1998 $15,787.40
</TABLE>
During 1998, an investment in the above hypothetical shareholder account
increased $1,044 compared to a decrease of $431 and an increase of $3,020 in the
Russell 2000 and the Russell 1000 Value index, respectively.
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
* The Russell 2000 Index is an unmanaged index. It includes reinvested
dividends and excludes any transaction or holding charges. The Russell 2000
Index replaces the Russell 1000 Value Index as the broad-based comparison to the
Fund as it more appropriately reflects the securities market in which the Fund
invests. Lipper Inc. is an independent reporting service that measures the
performance of most mutual funds. The performance results reflect an unmanaged
index and are net of all expenses other than sales charges and redemption fees.
One cannot invest directly in an index.
THE ENTERPRISE GROUP OF FUNDS, INC. 37
<PAGE>
FUTURE INVESTMENT STRATEGY
Gabelli believes the four legs supporting the stock market stool are low
inflation, low interest rates, a powerful flow of funds and strong corporate
profit growth. While the first three remain very positive, there are doubts
about the fourth. Weak Asian markets and the ongoing international currency
crisis could lead to problems in the Latin American currencies. Serious economic
problems for the United States' Latin American trading partners would have a far
greater impact on the American economy and corporate profits than did economic
disruption in Southeast Asia.
While the U.S. economy is starting to slow, it is still advancing at respectable
pace. If Latin America remains stable and American consumers continue to spend,
the U.S. economy may continue to expand, albeit at a slower pace than in recent
years.
Gabelli will continue to try to find many true business bargains in the
small-cap sector. These bargains present the opportunity for financially robust
companies to continue to snap up other companies in their own and related
industries due to necessity. For example, a telecommunications company that does
not offer a full range of services (long distance and local telephone Internet
access and transmission and home entertainment services) will likely have a very
bleak future. This bodes well for the Fund during the coming year.
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.
38 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE SMALL COMPANY VALUE FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
COMMON STOCKS -- 94.88% AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
ADVERTISING -- 1.18%
- ------------------------------------------------------------------------------
BOWLIN Outdoor Advertising & Travel Center Inc.
(a).............................................. 15,000 $ 76,875
The Ackerley Group Inc........................... 97,000 1,770,250
------------
1,847,125
AEROSPACE -- 8.17%
- ------------------------------------------------------------------------------
AAR Corporation.................................. 15,000 358,125
Aeroquip Vickers Inc............................. 100,000 2,993,750
Ametek Inc....................................... 35,000 780,937
Coltec Industries Inc. (a)....................... 60,000 1,170,000
Curtiss-Wright Corporation....................... 22,000 838,750
Gencorp Inc...................................... 30,000 748,125
Kaman Corporation (Class A)...................... 68,000 1,092,250
Moog Inc. (Class A) (a).......................... 15,000 586,875
Sequa Corporation (Class A) (a).................. 19,000 1,137,625
Sequa Corporation (Class B) (a).................. 8,500 624,750
SPS Technologies Inc. (a)........................ 43,000 2,434,875
------------
12,766,062
AGGREGATE -- 0.99%
- ------------------------------------------------------------------------------
Calmat Company................................... 50,000 1,543,750
APPAREL & TEXTILES -- 0.11%
- ------------------------------------------------------------------------------
Carlyle Industries Inc. (a)...................... 150,000 168,750
AUTOMOTIVE -- 6.84%
- ------------------------------------------------------------------------------
A.O. Smith Corporation........................... 10,500 257,906
Borg-Warner Automotive Inc....................... 7,000 390,687
Clarcor Inc...................................... 52,000 1,040,000
Lund International
Holdings Inc. (a)................................ 20,000 170,000
Modine Manufacturing Company..................... 60,000 2,175,000
Navistar International
Corporation Inc. (a)............................. 12,000 342,000
Scheib Earl Inc. (a)............................. 85,000 467,500
Standard Motor Products Inc...................... 110,000 2,667,500
Superior Industries
International Inc................................ 32,000 890,000
Tyler Corporation (a)............................ 20,000 122,500
Wynns International Inc.......................... 98,326 2,175,463
------------
10,698,556
BROADCASTING -- 6.56%
- ------------------------------------------------------------------------------
BHC Communications Inc. (Class A) (a)............ 3,500 427,000
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
Chris-Craft Industries Inc. (a).................. 40,950 $ 1,973,278
Fisher Companies Inc............................. 15,000 1,027,500
Gray Communications Systems Inc.................. 29,250 535,641
Gray Communications Systems Inc. (Class B)....... 33,000 451,688
Paxson Communications Corporation (a)............ 95,000 872,812
United Television Inc............................ 17,300 1,989,500
USA Networks Inc. (a)............................ 90,000 2,981,250
------------
10,258,669
BUILDING & CONSTRUCTION -- 0.25%
- ------------------------------------------------------------------------------
Core Materials Corporation....................... 110,000 385,000
BUSINESS SERVICES -- 0.72%
- ------------------------------------------------------------------------------
Nashua Corporation (a)........................... 85,000 1,131,563
CABLE -- 7.41%
- ------------------------------------------------------------------------------
AFC Cable Systems Inc. (a)....................... 30,000 1,008,750
Cablevision Systems Corporation (Class A) (a).... 120,000 6,022,500
Century Communications
Corporation (Class A) (a)........................ 30,000 951,562
Mercom Inc. (a).................................. 135,000 1,586,250
Rogers Communications Inc. (Class B) (a)......... 140,000 1,242,500
TCI Satellite Entertainment Inc. (Class A) (a)... 43,000 61,813
United Video Satellite Group (Class A) (a)....... 30,000 708,750
------------
11,582,125
CHEMICALS -- 1.84%
- ------------------------------------------------------------------------------
Church & Dwight Company Inc...................... 18,000 646,875
Lawter International Inc......................... 110,000 1,278,750
Sybron Chemicals Inc. (a)........................ 70,000 945,000
------------
2,870,625
COMMUNICATIONS -- 0.35%
- ------------------------------------------------------------------------------
Western Wireless Corporation..................... 25,000 550,000
COMPUTER HARDWARE -- 0.03%
- ------------------------------------------------------------------------------
Cerion Technologies Inc. (a)..................... 120,000 52,500
CONSUMER DURABLES -- 1.03%
- ------------------------------------------------------------------------------
Hussmann International Inc....................... 80,000 1,550,000
Noel Group (a)................................... 15,000 16,875
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 39
<PAGE>
ENTERPRISE SMALL COMPANY VALUE FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
Oneida Ltd....................................... 3,500 $ 51,844
------------
1,618,719
CONSUMER PRODUCTS -- 0.49%
- ------------------------------------------------------------------------------
American Safety Razor
Company (a)...................................... 31,000 372,000
ARC International Corporation (a)................ 26,000 40,625
Mikasa Inc....................................... 28,000 357,000
Milestone Scientific Inc. (a).................... 3,000 3,375
------------
773,000
CONSUMER SERVICES -- 1.50%
- ------------------------------------------------------------------------------
Berlitz International Inc. (a)................... 25,000 725,000
ITT Educational Services Inc. (a)................ 30,000 1,020,000
Loewen Group Inc. (ADR).......................... 55,000 464,062
N2K Inc. (a)..................................... 10,000 130,625
------------
2,339,687
ELECTRICAL EQUIPMENT -- 1.42%
- ------------------------------------------------------------------------------
Ampco-Pittsburgh Corporation..................... 57,000 619,875
Donaldson Inc.................................... 10,000 207,500
Oak Technology Inc. (a).......................... 100,000 350,000
Thomas Industries Inc............................ 42,500 834,063
UCAR International Inc. (a)...................... 12,000 213,750
------------
2,225,188
ELECTRONICS -- 0.43%
- ------------------------------------------------------------------------------
CTS Corporation.................................. 15,000 652,500
Power-One Inc. (a)............................... 2,000 14,000
------------
666,500
ENTERTAINMENT & LEISURE -- 5.47%
- ------------------------------------------------------------------------------
Ascent Entertainment
Group Inc. (a)................................... 55,000 405,625
Bull Run Corporation (a)......................... 100,000 337,500
Florida Panthers Holdings Inc. (a)............... 45,000 419,062
Gaylord Entertainment Company.................... 114,000 3,434,250
GC Companies Inc. (a)............................ 60,000 2,497,500
Grand Casinos Inc. (a)........................... 60,000 483,750
Jackpot Enterprises Inc. (a)..................... 38,000 358,625
Spelling Entertainment Group Inc................. 81,000 607,500
------------
8,543,812
FINANCE -- 0.96%
- ------------------------------------------------------------------------------
Advest Group Inc................................. 15,000 277,500
Pioneer Group Inc................................ 50,000 987,500
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
Southwest Securities Group Inc................... 11,500 $ 231,438
------------
1,496,438
FOOD & BEVERAGES & TOBACCO -- 4.43%
- ------------------------------------------------------------------------------
Brunos Inc. (a).................................. 30,000 22,969
Buenos Aires Embotelladora (ADR) (a)(d).......... 22,794 0
Celestial Seasonings Inc. (a).................... 68,000 1,891,250
Chock Full o' Nuts
Corporation (a).................................. 40,000 250,000
General Cigar Holdings Inc. (Class A) (a)........ 160,000 1,390,000
General Cigar Holdings Inc. (Class B) (a)........ 8,000 69,500
Ingles Markets Inc. (Class A).................... 50,000 546,875
Pepsi Cola Puerto Rico Bottling Company (a)...... 90,000 466,875
Ralcorp Holdings Inc. (a)........................ 21,000 383,250
Vermont Pure Holdings Ltd........................ 5,000 23,437
Vlasic Foods International Inc. (a).............. 10,000 238,125
Whitman Corporation.............................. 65,000 1,649,375
------------
6,931,656
HOTELS & RESTAURANTS -- 0.98%
- ------------------------------------------------------------------------------
Aztar Corporation (a)............................ 155,000 784,688
Extended Stay America Inc. (a)................... 35,000 367,500
Trump Hotels & Casino
Resorts Inc. (a)................................. 100,000 375,000
------------
1,527,188
INSURANCE -- 4.26%
- ------------------------------------------------------------------------------
Argonaut Group Inc............................... 70,000 1,715,000
Liberty Corporation.............................. 88,000 4,334,000
Midland Company.................................. 25,000 603,125
------------
6,652,125
MACHINERY -- 6.42%
- ------------------------------------------------------------------------------
Baldwin Technology Company Inc. (Class A) (a).... 100,000 562,500
Banner Aerospace Inc. (a)........................ 52,000 490,750
Commercial Intertech Corporation................. 18,000 232,875
Daniel Industries Inc............................ 55,000 666,875
Fairchild Corporation (Class A) (a).............. 68,000 1,071,000
Flowserve Corporation............................ 92,000 1,523,750
Hach Company..................................... 32,000 384,000
Hach Company (Class A)........................... 41,000 420,250
Idex Corporation................................. 32,000 784,000
</TABLE>
40 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE SMALL COMPANY VALUE FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
Katy Industries Inc.............................. 58,000 $ 1,018,625
Kollmorgen Corporation........................... 55,000 838,750
Nortek Inc. (a).................................. 25,000 690,625
Paxar Corporation (a)............................ 95,000 849,062
Standex International Corporation................ 10,000 262,500
Tennant Company.................................. 3,000 120,375
Watts Industries Inc. (Class A).................. 7,000 116,375
------------
10,032,312
MANUFACTURING -- 3.49%
- ------------------------------------------------------------------------------
Barnes Group Inc................................. 35,000 1,028,125
Belden Inc....................................... 18,000 381,375
Bway Corporation (a)............................. 6,000 90,375
Cuno Inc. (a).................................... 7,000 113,750
Fedders Corporation (Class A).................... 65,000 341,250
Graco Inc........................................ 20,000 590,000
Industrial Distribution
Group Inc. (a)................................... 42,000 320,250
Material Sciences Corporation (a)................ 20,000 170,000
Myers Industries Inc............................. 6,000 171,750
Oil Dri Corporation of America................... 35,000 525,000
Park Ohio Holdings
Corporation (a).................................. 67,000 1,013,375
Rawlings Sporting Goods Company, Inc. (a)........ 20,000 226,250
Strattec Security Corporation (a)................ 16,000 480,000
------------
5,451,500
METALS & MINING -- 0.43%
- ------------------------------------------------------------------------------
TVX Gold Inc. (a)................................ 160,000 290,000
WHX Corporation (a).............................. 38,000 382,375
------------
672,375
MISC. FINANCIAL SERVICES -- 0.63%
- ------------------------------------------------------------------------------
Data Broadcasting Corporation (a)................ 55,000 983,125
NEUTRACEUTICALS -- 0.36%
- ------------------------------------------------------------------------------
Irwin Naturals/4Health Inc. (a).................. 15,000 71,250
Natures Sunshine Products Inc.................... 5,000 76,250
Weider Nutrition International Inc............... 65,000 414,375
------------
561,875
PAPER PRODUCTS -- 0.34%
- ------------------------------------------------------------------------------
Greif Brothers Corporation (Class A)............. 18,000 525,375
PHARMACEUTICALS -- 3.24%
- ------------------------------------------------------------------------------
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
Agribrands International Inc. (a)................ 10,000 $ 300,000
Carter Wallace Inc............................... 140,000 2,747,500
Ivax Corporation (a)............................. 150,000 1,865,625
Twinlab Corporation (a).......................... 12,000 157,500
------------
5,070,625
PRINTING & PUBLISHING -- 6.46%
- ------------------------------------------------------------------------------
Belo (A.H.) Corporation (Class A)................ 28,000 558,250
Lee Enterprises Inc.............................. 52,000 1,638,000
McClatchy Company (Class A)...................... 50,000 1,768,750
Media General Inc. (Class A)..................... 38,800 2,056,400
Penton Media Inc................................. 70,000 1,417,500
Price Communications
Corporation (a).................................. 46,874 606,432
Pulitzer Publishing Company...................... 7,000 606,375
Thomas Nelson Inc................................ 85,000 1,147,500
Topps Company Inc. (a)........................... 60,000 300,000
------------
10,099,207
REAL ESTATE -- 1.47%
- ------------------------------------------------------------------------------
Catellus Development
Corporation (a).................................. 120,000 1,717,500
Griffin Land & Nurseries Inc. (a)................ 37,000 471,750
Gyrodyne Company
of America Inc. (a).............................. 8,000 106,000
------------
2,295,250
RETAIL -- 1.97%
- ------------------------------------------------------------------------------
Coldwater Creek Inc. (a)......................... 31,000 426,250
Lillian Vernon Corporation....................... 105,500 1,740,750
Neiman Marcus Group Inc. (a)..................... 35,000 872,813
ValueVision International Inc. (Class A) (a)..... 5,000 35,156
------------
3,074,969
SECURITY & INVESTIGATION SERVICES -- 3.59%
- ------------------------------------------------------------------------------
Borg-Warner Security
Corporation (a).................................. 26,000 487,500
Pittway Corporation (Class A).................... 18,000 595,125
Rollins Inc...................................... 252,000 4,410,000
Wackenhut Corporation (Class A).................. 5,000 127,187
------------
5,619,812
TELECOMMUNICATIONS -- 7.80%
- ------------------------------------------------------------------------------
Aerial Communications Inc. (a)................... 80,000 470,000
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 41
<PAGE>
ENTERPRISE SMALL COMPANY VALUE FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
Aliant Communications Inc........................ 28,000 $ 1,144,500
Associated Group Inc.
(Class A) (a).................................... 21,000 903,000
Atlantic Tele-Network Inc........................ 12,000 108,750
Centennial Cellular Corporation (Class A) (a).... 51,600 2,115,600
Commonwealth Telephone Enterprises Inc........... 20,410 683,735
Communications Systems Inc....................... 38,000 448,875
COMSAT Corporation............................... 50,000 1,800,000
GST Telecommunications Inc. (a).................. 80,000 525,000
Rogers Cantel Mobile Communications Inc. (Class
B) (a)........................................... 45,000 548,438
Telephone and Data Systems Inc................... 75,000 3,370,312
Viatel Incorporated.............................. 3,000 68,625
------------
12,186,835
TRANSPORTATION -- 1.77%
- ------------------------------------------------------------------------------
GATX Corporation................................. 42,000 1,590,750
Hudson General Corporation....................... 16,000 1,008,000
TransPro Inc..................................... 35,000 170,625
------------
2,769,375
UTILITIES -- 1.26%
- ------------------------------------------------------------------------------
Citizens Utilities Company (Class B) (a)......... 100,750 818,594
Eastern Enterprises.............................. 25,000 1,093,750
Southwest Gas Corporation........................ 2,000 53,750
------------
1,966,094
WASTE MANAGEMENT -- 0.14%
- ------------------------------------------------------------------------------
Envirosource Inc. (a)............................ 43,414 222,497
WIRELESS COMMUNICATIONS -- 0.09%
- ------------------------------------------------------------------------------
Teligent Inc. (Class A) (a)...................... 5,000 143,750
TOTAL COMMON STOCKS
(IDENTIFIED COST $140,300,966)................................. 148,304,014
- ------------------------------------------------------------------------------
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
U.S. TREASURY BILLS -- 4.53%
- ------------------------------------------------------------------------------
U.S. Treasury Bill
4.30% due 02/11/99............................... $1,005,000 $ 1,000,078
U.S. Treasury Bill
4.355% due 02/18/99.............................. 1,165,000 1,158,235
U.S. Treasury Bill
4.42% due 02/04/99............................... 1,578,000 1,571,413
U.S. Treasury Bill
4.43% due 01/21/99............................... 1,007,000 1,004,522
U.S. Treasury Bill
4.48% due 01/21/99............................... 554,000 552,621
U.S. Treasury Bill
4.49% due 01/21/99............................... 1,803,000 1,798,503
------------
TOTAL U.S. TREASURY BILLS
(IDENTIFIED COST $7,085,372)................................... 7,085,372
- ------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 0.71%
- ------------------------------------------------------------------------------
State Street Bank & Trust Repurchase Agreement,
3.25% due 01/04/99
Collateral: U.S. Treasury Bond $680,000 13.25%
due 05/15/14,
Value $1,137,487................................. 1,110,000 1,110,000
------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $1,110,000)................................... 1,110,000
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $148,496,338)................................. $156,499,386
OTHER ASSETS LESS LIABILITIES -- (0.12)%....................... (187,419)
------------
NET ASSETS 100%................................................ $156,311,967
- ------------------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
(d) Security is fair valued. Also includes 1,116,906 rights valued at $0,
expiring 1/5/99.
(ADR) American Depository Receipt.
See notes to financial statements.
42 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
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 $163
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.
1998 PERFORMANCE REVIEW
For the year ending December 31, non-U.S. market returns were enhanced by
foreign currency strength. The notable exceptions were the Canadian dollar, as
well as the Australian and New Zealand dollars, all of which weakened relative
to the U.S. dollar. The Japanese yen strengthened sharply at the start of the
fourth quarter, to end the year in positive territory relative to the U.S.
dollar.
With the upturn in the markets through the fourth quarter, the majority of
individual European markets ended the year with double-digit returns (in
dollar-hedged terms): Finland (110.75 percent) and Belgium (49.07 percent)
posted the strongest returns. Norway (-26.89 percent) and New Zealand (-16.22
percent) were the weakest performers, as were the Asian markets of Singapore
(-7.43 percent), Hong Kong (-6.28 percent) and Japan (-3.84 percent).
For the year, currency allocation and market allocation detracted from
performance. The fund's overweight to the weak Australian and New Zealand dollar
currencies, as well as the underweight of the yen, hurt performance. Security
selection, particularly Japan stock selection, was a positive contributor to
performance for the year. Strategic cash held in the fund detracted from
performance in the first half of the year, otherwise market allocation decisions
overall provided favorable results.
THE ENTERPRISE GROUP OF FUNDS, INC. 43
<PAGE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31,1998
<S> <C> <C> <C>
Enterprise International Growth Fund - A One Year Five Year
With Sales Charge 8.87% 7.47%
Without Sales Charge 14.28% 8.52%
EAFE Index* 20.00% 9.19%
Lipper International Fund Index* 12.66% 8.59%
Enterprise Lipper
International EAFE International
Growth Fund - A Index Fund Index
12/31/88 $9,527.68 $10,000.00 $10,000.00
1989 $11,200.00 $11,054.00 $12,232.00
1990 $9,475.20 $8,461.84 $10,718.90
1991 $10,697.50 $9,488.26 $12,130.58
1992 $10,601.22 $8,333.54 $11,611.39
1993 $14,428.27 $11,046.94 $16,160.74
1994 $14,022.11 $11,906.39 $16,041.15
1995 $16,149.26 $13,241.09 $17,648.47
1996 $18,138.85 $14,041.65 $20,195.14
1997 $19,000.45 $14,291.17 $21,663.33
1998 $21,713.71 $17,149.41 $24,405.91
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31,1998
<S> <C>
Enterprise International Growth Fund - A Ten Year
With Sales Charge 8.06%
Without Sales Charge 8.59%
EAFE Index* 5.54%
Lipper International Fund Index* 9.33%
12/31/88
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
</TABLE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C>
Enterprise International Growth Fund - B One Year 5/1/95-12/31/98
With Sales Charge 9.57% 11.17%
Without Sales Charge 13.57% 11.78%
EAFE Index* 20.00% 8.80%
Lipper International Fund Index* 12.66% 11.77%
Enterprise
International EAFE
Growth Fund - B Index
5/1/95 $10,000.00 $10,000.00
1995 $11,387.70 $10,521.74
1996 $12,722.34 $11,158.31
1997 $13,252.86 $11,356.93
1998 $14,751.27 $13,628.31
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C>
Enterprise International Growth Fund - B
With Sales Charge
Without Sales Charge
EAFE Index*
Lipper International Fund Index*
Lipper
International
Fund Index
5/1/95 $10,000.00
1995 $10,883.00
1996 $12,453.42
1997 $13,356.29
1998 $15,047.20
</TABLE>
44 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31,1998
<S> <C> <C> <C>
Enterprise International Growth Fund -
C One Year 5/1/97-12/31/98
With Sales Charge 12.64% 9.30%
Without Sales Charge 13.64% 9.30%
EAFE Index* 20.00% 13.44%
Lipper International Fund Index* 12.66% 10.07%
Enterprise Lipper
International EAFE International
Growth Index - C Index Fund Index
5/1/97 $10,000.00 $10,000.00 $10,000.00
1997 $10,207.20 $10,285.00 $10,418.00
1998 $11,599.46 $12,342.00 $11,736.92
</TABLE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1998 ONE YEAR 7/31/95 - 12/31/98
<S> <C> <C> <C>
Enterprise International Growth Fund - Y 14.73% 12.22%
EAFE Index* 20.00% 8.49%
Lipper International Fund Index* 7.25% 10.49%
Enterprise Lipper
International EAFE International
Growth Fund - Y Index Fund Index
7/31/95 $10,000.00 $10,000.00 $10,000.00
1995 $10,890.74 $10,203.00 $10,176.00
1996 $12,290.81 $10,820.28 $11,644.40
1997 $12,931.16 $11,012.88 $12,488.62
1998 $14,835.66 $13,215.46 $14,069.67
</TABLE>
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
* The EAFE Index is an unmanaged index. It includes reinvested dividends and
excludes any transaction or holding charges. Lipper Inc. is an independent
reporting service that measures the performance of most mutual funds. The
performance results reflect an unmanaged index and are net of all expenses other
than sales charges and redemption fees. One cannot invest directly in an index.
THE ENTERPRISE GROUP OF FUNDS, INC. 45
<PAGE>
FUTURE INVESTMENT STRATEGY
Monetary union, privatization/restructuring/merger activity and increased
capital flows have boosted European equity markets. Despite their excellent
performance, European corporations are still early into their restructuring,
with the potential for improving profitability ahead. Europe is the fund's
largest overweight. Most Pacific markets continued to suffer the consequences of
the 1997 currency crisis. This situation has been aggravated in Japan by flawed
macroeconomic policies, a largely insolvent financial sector and an unprofitable
domestic corporate sector. The fund remains very underweight to Japan, Hong Kong
and Singapore. In comparison, Australia and New Zealand have been unduly
impacted by their geographic proximity to Asia and are attractively priced. The
fund maintains overweight in these markets.
Currency strategies within the fund at the end of the year remained similar to
that of the market allocations. The only notable hedging strategies were the six
percent underweight of the Japanese yen and a four percent underweight of the
British pound sterling. The Hong Kong dollar was also underweight, such that
there was no currency exposure to Hong Kong. Offsetting these positions were
overweights in the Australian dollar and to a lesser degree, the New Zealand
dollar.
AS WITH ALL INTERNATIONAL GROWTH FUNDS, THE ENTERPRISE INTERNATIONAL GROWTH FUND
CARRIES ADDITIONAL RISKS ASSOCIATED WITH POSSIBLY LESS STABLE FOREIGN
SECURITIES, 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.
46 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE INTERNATIONAL GROWTH FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
COMMON STOCKS -- 95.38% AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
AUSTRALIA -- 4.75%
- ---------------------------------------------------------------------------------
Amcor Ltd......................................... 16,200 $ 69,221
Brambles Industries Ltd........................... 10,300 250,889
Broken Hill Proprietary
Company Ltd....................................... 44,000 324,061
CSR Ltd........................................... 55,900 136,676
David Jones Ltd................................... 79,700 87,910
Lend Lease Corporation Ltd........................ 13,930 187,793
National Australia Bank Ltd....................... 31,800 479,368
News Corporation.................................. 47,519 313,901
Orica Ltd......................................... 13,600 70,754
Pacific Dunlop Ltd................................ 49,200 79,593
Qantas Airways Ltd................................ 62,850 128,250
QBE Insurance Group Ltd........................... 31,027 128,336
Rio Tinto Ltd..................................... 10,200 120,976
Santos Ltd........................................ 39,800 106,823
Telstra Corporation Ltd........................... 107,300 501,685
Westpac Bank Corporation Ltd...................... 57,600 385,435
WMC Ltd........................................... 33,000 99,491
Woolworths Ltd.................................... 18,300 62,305
-------------
3,533,467
BELGIUM -- 2.91%
- ---------------------------------------------------------------------------------
Electrabel........................................ 1,930 843,014
Fortis............................................ 2,712 976,697
Fortis (Wts) (a).................................. 112 6
KBC Bancassurance Holdings........................ 4,345 341,869
KBC Bancassurance Holdings (Wts) (a).............. 90 5
-------------
2,161,591
CANADA -- 2.21%
- ---------------------------------------------------------------------------------
Agrium Inc........................................ 6,900 60,942
Alcan Aluminum Ltd................................ 3,800 103,173
Bank Montreal..................................... 2,800 113,026
Canadian National Railway Company................. 2,500 130,438
Canadian Pacific Ltd.............................. 7,400 139,189
Extendicare Inc................................... 6,100 34,720
Hudson's Bay Company.............................. 5,200 65,829
Imasco Ltd........................................ 4,000 85,574
Imperial Oil Ltd.................................. 7,400 118,855
Magna International Inc........................... 1,100 68,656
Newbridge Networks Corporation.................... 2,700 82,316
NOVA Chemicals Corporation........................ 4,220 55,218
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Potash Corporation
Saskatchewan Inc.................................. 1,100 $ 70,886
Royal Bank Canada................................. 3,300 165,270
Seagram Ltd....................................... 1,500 57,164
Shaw Communications Inc........................... 5,600 135,924
Transcanada Pipelines Ltd......................... 7,604 111,685
Westcoast Energy Inc.............................. 2,400 47,890
-------------
1,646,755
DENMARK -- 0.58%
- ---------------------------------------------------------------------------------
Tele Danmark (Class B)............................ 3,190 430,560
FINLAND -- 2.57%
- ---------------------------------------------------------------------------------
Merita (Class A).................................. 48,800 308,170
Nokia (Class A)................................... 10,000 1,215,925
UPM-Kymmene....................................... 14,000 389,880
-------------
1,913,975
FRANCE -- 9.92%
- ---------------------------------------------------------------------------------
Air Liquide....................................... 2,497 457,776
Alcatel Alsthom................................... 3,652 446,784
AXA............................................... 3,310 479,538
AXA (Wts) (a)..................................... 1,860 882
Banque Nationale de Paris......................... 4,428 364,472
Compagnie de Saint Gobain......................... 1,723 243,149
Compagnie Financiere de Paribas................... 2,426 210,751
Danone............................................ 980 280,451
Dexia France...................................... 1,702 262,104
Elf Aquitaine..................................... 2,416 279,151
France Telecom.................................... 4,820 382,772
Lagardere S.C.A................................... 10,950 465,145
Michelin (CGDE) (Class B)......................... 4,597 183,765
Pinault-Printemps-Redoute......................... 1,180 225,405
Rhone-Poulenc..................................... 6,916 355,758
SEITA............................................. 9,220 577,178
Societe Generale.................................. 1,855 300,264
Suez Lyonnaise Des Eaux........................... 2,563 526,261
Thomson CSF....................................... 8,080 346,843
Total (Class B)................................... 3,425 346,727
Vivendi........................................... 2,465 639,286
-------------
7,374,462
GERMANY -- 11.01%
- ---------------------------------------------------------------------------------
Allianz........................................... 3,150 1,154,836
Bayer............................................. 28,950 1,208,132
DaimlerChrysler (a)............................... 9,031 891,395
Deutsche Bank..................................... 5,800 341,228
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 47
<PAGE>
ENTERPRISE INTERNATIONAL GROWTH FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Deutsche Telekom.................................. 16,650 $ 547,474
Dresdner Bank..................................... 7,750 325,513
Hoechst........................................... 9,050 375,228
Mannesmann........................................ 6,650 762,121
SAP............................................... 650 280,811
Siemens........................................... 14,070 907,551
Veba.............................................. 16,780 1,003,820
Volkswagen........................................ 4,850 387,045
-------------
8,185,154
IRELAND -- 0.13%
- ---------------------------------------------------------------------------------
Smurfit (Jefferson) Group......................... 54,000 96,893
ITALY -- 4.21%
- ---------------------------------------------------------------------------------
Assicurazioni Generali............................ 15,858 661,769
ENI............................................... 111,000 725,029
ENI (ADR)......................................... 2,500 169,375
La Rinascente..................................... 41,600 427,586
Montedison........................................ 249,820 331,643
Sao Paolo Imi..................................... 21,450 378,808
Telecom Italia.................................... 1 9
TIM............................................... 59,000 435,332
-------------
3,129,551
JAPAN -- 13.13%
- ---------------------------------------------------------------------------------
Acom Company...................................... 2,000 128,439
Amada Company..................................... 22,000 106,449
Bridgestone Corporation........................... 4,000 90,756
Canon Inc......................................... 16,000 341,796
Citizen Watch Company (a)......................... 20,000 120,301
Dai Nippon Printing Company Ltd................... 18,000 286,917
Daiichi Pharmaceutical Company Ltd................ 16,000 270,181
Daikin Industries Ltd............................. 20,000 198,142
Daiwa House Industry Company Ltd.................. 10,000 106,413
Denso Corporation................................. 17,000 314,286
Fanuc Ltd. (a).................................... 8,300 284,131
Fuji Photo Film Company........................... 4,000 148,607
Fujitsu Ltd....................................... 12,000 159,752
Honda Motor Company Ltd........................... 10,000 328,173
Hoya Corporation.................................. 4,000 194,604
Ito-Yokado Company Ltd............................ 8,000 559,045
Kaneka Corporation................................ 20,000 149,845
Kao Corporation................................... 6,000 135,338
Kirin Brewery Company Ltd......................... 22,000 280,230
Kokuyo Company Ltd................................ 6,000 80,725
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Kuraray Company Ltd............................... 24,000 $ 264,732
Marui Company Ltd................................. 10,000 192,393
Matsushita Electric Industrial Company Ltd........ 24,000 424,379
NGK Insulators Ltd................................ 32,000 412,419
Nintendo Company Ltd.............................. 2,400 232,464
Nippon Meat Packer Inc............................ 14,000 225,387
Omron Corporation................................. 7,000 95,851
Sankyo Company Ltd................................ 14,000 305,882
Secom Company Ltd................................. 5,000 413,976
Sega Enterprises Ltd.............................. 3,000 66,475
Sekisui House Ltd................................. 19,000 200,840
Shin-Etsu Chemical Company Ltd.................... 4,000 96,241
Sony Corporation.................................. 4,700 342,158
Sumitomo Chemical Company Ltd..................... 23,000 89,518
Sumitomo Electric Industries...................... 16,000 179,885
Takeda Chemical Industries........................ 12,000 461,743
TDK Corporation................................... 3,000 274,127
Tokio Marine & Fire Insurance Company Ltd......... 18,000 214,949
Toray Industries Inc.............................. 51,000 266,165
Toshiba Corporation............................... 47,000 279,797
Toyota Motor Corporation.......................... 14,000 380,186
Yamato Transport Company Ltd...................... 4,000 55,905
-------------
9,759,602
MALAYSIA -- 0.04%
- ---------------------------------------------------------------------------------
Malayan Banking Berhad............................ 7,000 14,184
Nestle (Malaysia) Berhad.......................... 4,000 16,000
-------------
30,184
NETHERLANDS -- 7.04%
- ---------------------------------------------------------------------------------
ABN Amro Holdings................................. 15,102 317,522
Elsevier.......................................... 30,000 419,971
Heineken.......................................... 10,300 619,524
ING Group......................................... 17,729 1,080,519
KPN............................................... 19,977 999,541
Royal Dutch Petroleum Company..................... 26,980 1,342,753
Unilever.......................................... 5,360 457,913
-------------
5,237,743
NEW ZEALAND -- 1.88%
- ---------------------------------------------------------------------------------
Auckland International Airport Ltd. (a)........... 43,400 60,519
Brierley Investments Ltd.......................... 315,200 71,320
Carter Holt Harvey Ltd............................ 128,700 115,128
Fletcher Challenge Building Division.............. 41,000 63,213
</TABLE>
48 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE INTERNATIONAL GROWTH FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Fletcher Challenge Energy Division................ 50,900 $ 96,422
Fletcher Challenge Paper Division................. 99,900 66,761
Lion Nathan Ltd................................... 43,200 109,796
Telecom Corporation of
New Zealand Ltd................................... 174,300 756,669
Telecom Corporation of
New Zealand Ltd (ADR)............................. 1,600 57,100
-------------
1,396,928
NORWAY -- 0.38%
- ---------------------------------------------------------------------------------
Norsk Hydro....................................... 3,700 125,143
Norske Skogindustrier............................. 5,300 154,847
-------------
279,990
SINGAPORE -- 0.70%
- ---------------------------------------------------------------------------------
Singapore Press Holdings Ltd...................... 28,738 313,316
United Overseas Bank Ltd.......................... 32,000 205,451
-------------
518,767
SPAIN -- 1.83%
- ---------------------------------------------------------------------------------
Banco Popular Espanol............................. 4,999 376,367
Empresa Nacionale Electricidade................... 27,262 721,257
Telefonica De Espana.............................. 5,805 257,737
Telefonica De Espana (Rts)........................ 5,805 5,147
-------------
1,360,508
SWEDEN -- 3.86%
- ---------------------------------------------------------------------------------
Astra (Class A)................................... 20,170 410,857
Electrolux (Series B)............................. 29,600 508,222
Ericsson LM (Class B)............................. 18,280 434,231
Investor (Class B)................................ 6,960 313,529
Nordbanken Holding................................ 35,490 227,142
Skandia Forsakrings............................... 32,420 494,791
Svenska Handelsbanken (Class A)................... 3,290 138,487
Swedish Match..................................... 93,890 340,901
-------------
2,868,160
SWITZERLAND -- 7.20%
- ---------------------------------------------------------------------------------
Credit Suisse Group............................... 483 75,595
Julius Baer Holdings Ltd. (Class B)............... 65 216,004
Nestle............................................ 585 1,273,313
Novartis.......................................... 852 1,674,601
Roche Holdings.................................... 79 963,850
Schweizerische Ruckversicherungs-Gesellschaft..... 206 537,007
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Swisscom (a)...................................... 1,453 $ 608,193
-------------
5,348,563
UNITED KINGDOM -- 21.03%
- ---------------------------------------------------------------------------------
Allied Zurich (a)................................. 43,650 655,947
Barclays.......................................... 24,000 520,352
Billiton.......................................... 12,000 23,924
BOC Group......................................... 24,000 344,110
Booker............................................ 38,600 40,081
Boots Company..................................... 28,000 478,684
British American Tobacco (a)...................... 19,650 173,027
British Petroleum Company......................... 62,408 929,018
British Steel..................................... 240,000 363,848
Cable & Wireless.................................. 17,000 207,875
Charter........................................... 44,259 242,656
Coats Viyella..................................... 182,800 82,000
Diageo............................................ 31,907 353,845
Fairview Holdings (a)............................. 24,750 36,597
FKI............................................... 173,750 386,817
Garban............................................ 1,900 7,229
General Electric Company.......................... 67,600 612,095
Glaxo Wellcome.................................... 32,200 1,108,463
Greenalls Group................................... 32,000 170,394
Hanson............................................ 58,437 465,049
Hillsdown Holdings................................ 49,500 61,680
House of Fraser................................... 79,500 70,003
Lloyds TSB Group.................................. 89,232 1,270,507
Marks & Spencer................................... 101,000 694,700
Mirror Group...................................... 88,800 221,668
National Westminster Bank......................... 21,000 406,463
Nycomed Amersham.................................. 39,000 268,898
Prudential Corporation............................ 67,000 1,022,053
Reed International................................ 38,000 301,778
Rio Tinto......................................... 30,100 350,058
RJB Mining........................................ 42,000 54,428
Royal & Sun Alliance Insurance Group.............. 25,538 207,902
Sainsbury J....................................... 18,000 145,639
Scottish and Southern Energy...................... 58,500 659,449
Smithkline Beecham................................ 49,400 684,648
Tate & Lyle....................................... 16,000 86,127
Terranova Foods (a)............................... 24,750 45,232
TESCO............................................. 178,400 518,691
Thames Water...................................... 21,358 411,618
Thames Water (Class B) (a)........................ 23,300 28,259
United News & Media............................... 19,000 165,094
Vodafone Group.................................... 15,593 253,364
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 49
<PAGE>
ENTERPRISE INTERNATIONAL GROWTH FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Williams.......................................... 27,076 $ 154,746
Yorkshire Water................................... 38,000 347,234
-------------
15,632,250
TOTAL COMMON STOCKS
(IDENTIFIED COST $61,231,284).................................... 70,905,103
- ---------------------------------------------------------------------------------
PREFERRED STOCK -- 0.16%
- ---------------------------------------------------------------------------------
AUSTRALIA -- 0.16%
- ---------------------------------------------------------------------------------
News Corporation.................................. 19,916 121,187
-------------
TOTAL PREFERRED STOCK
(IDENTIFIED COST $91,328)........................................ 121,187
- ---------------------------------------------------------------------------------
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
COMMERCIAL PAPER -- 2.68%
- ---------------------------------------------------------------------------------
Anheuser Busch Inc. 5.00%
due 01/04/99 $ 1,997,000 $ 1,996,168
-------------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $1,996,168)..................................... 1,996,168
- ---------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $63,318,780).................................... $ 73,022,458
OTHER ASSETS LESS LIABILITIES -- 1.78%........................... 1,320,194
-------------
NET ASSETS -- 100%............................................... $ 74,342,652
- ---------------------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
(Rts) Rights
(Wts) Warrants
(ADR) American Depository Receipt.
See notes to financial statements.
50 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE GLOBAL FINANCIAL SERVICES FUND
SANFORD C. BERNSTEIN & CO., INC.
New York, New York
INVESTMENT MANAGEMENT
Sanford C. Bernstein & Co., Inc., which has approximately $78 billion in assets
under management, became manager of the fund on October 1, 1998, the fund's
inception date. Sanford C. Bernstein's normal investment minimum is $5 million.
INVESTMENT OBJECTIVE
The objective of the Enterprise Global Financial Services Fund is to seek
capital appreciation, primarily through investment in common stocks of domestic
and foreign financial services companies.
INVESTMENT PHILOSOPHY
The manager seeks to identify companies with sound long-term prospects that are
currently shunned by investors. In addition to targeting compelling buying
opportunities with high return potential, the manager's process is also geared
to control volatility. To evaluate the risk/reward tradeoff, the manager
incorporates the use of a number of proprietary models including an optimization
model and a relative return trends model. The actual construction of the
portfolio considers not only this fundamental risk/reward profile of stocks but
also the appropriate timing of the transactions.
REVIEW OF FOURTH QUARTER 1998
When the fourth quarter started, share prices of financial services companies
were falling sharply around the world on investor fears about their exposure to
capital markets, hedge funds and emerging markets. The indiscriminate selling
that ensued created tremendous value opportunities. As many banks and brokerage
firms announced write-offs of loan and security portfolios, share prices fell
across the board, even for banks and brokerages with little exposure to overseas
economies or the capital markets. Sanford Bernstein's research efforts focused
on separating companies that were relatively unscathed from those that were
deeply wounded. This paid off to some degree. As the facts become better known,
the fund manager expects shares in financial companies with little emerging
markets or capital markets exposure to continue outperforming.
In the U.S. portion of the portfolio, there was one such opportunity in
BankAmerica, which has $570 billion in assets following its merger with
NationsBank last summer. The share price fell about 30 percent from the
beginning of July, in part due to write-offs related to a hedge fund investment.
The combined entity, however, has far less exposure than most money center banks
to emerging markets or to a drop in capital markets activity. Half of its
earnings come from the relatively steady U.S. retail banking business. The
precipitous share price drop reflected investor overreaction and ignored the
company's strong fundamentals. Sanford Bernstein used this opportunity to build
a position in the stock.
Another of the fund's large U.S. holdings is Bank One. Its share price fell by
40 percent despite minimal exposure to overseas economies and the capital
markets. The second-largest U.S. issuer of credit cards and a major player in
the relatively steady world of retail banking, the company recently added to its
string of mergers and acquisitions with
THE ENTERPRISE GROUP OF FUNDS, INC. 51
<PAGE>
its First Chicago transaction; this deal consolidates Bank One's strength
throughout the Midwest. Management is targeting cost savings that could total
more than $900 million. Trading at a modest valuation despite its attractive
prospects for earnings growth, Bank One's shares offer excellent value.
Insurance companies, such as Ambac Financial Group, Chubb and American General,
also form a large part of the U.S. portion of the Fund. These stocks do not
derive as much of their earnings from trading, and do not have extensive credit
exposure to emerging markets. These defensive holdings have outperformed during
the recent global market upset.
Market gyrations also produced interesting value opportunities in the overseas
portion of the Fund. Among the Fund's strong performers was UBS, a giant Swiss
bank whose shares suffered a severe setback in the autumn, following its
disclosure of hefty losses related to trading activity and to its exposure to
Long Term Capital Management, a hedge fund. The stock's subsequent gains seem to
reflect market approval of management's quick and decisive actions following the
disclosure of losses. UBS shares probably will continue to do well, with capital
market-related earnings likely to recover. The benefits from the merger of UBS
and Swiss Bank Corp. last summer should also begin to emerge soon. Continued
growth in the bank's core businesses -- private banking and asset management --
should support earnings growth.
In Japan, financial reform and deregulation are opening up new investment
opportunities. The Fund's Japanese investments have been fairly defensive,
concentrated in regional banks with fewer of the asset-quality problems plaguing
the rest of the Japanese financial sector. However, the Fund has invested
selectively in attractively valued Japanese financial institutions likely to be
beneficiaries of the changing financial landscape. For instance, one of the
Fund's Japanese holdings, Mitsui Trust and Banking, is likely to benefit from
the government's measures to rationalize and strengthen the Japanese banking
system. Management is also implementing its own restructuring plan. For example,
Mitsui Trust recently announced that it would retrench in foreign markets to
focus its resources on its strong franchise in Japan. Although the stock
performed well, Mitsui Trust continues to be attractively valued.
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
PERIOD ENDING DECEMBER 31, 1998
<S> <C> <C> <C>
Enterprise Global Financial Services Fund
- -A 10/1/98-12/31/98
With Sales Charge 15.24%
Without Sales Charge 21.00%
S&P Financial Services Index* 22.21%
Lipper Financial Services Fund Index* 19.16%
Enterprise Global
Financial S&P Financial Lipper Financial
Services Fund - A Services Index Services Fund Index
10/1/98 $9,523.81 $10,000.00 $10,000.00
1998 $11,523.81 $12,221.00 $11,916.00
</TABLE>
52 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
PERIOD ENDING DECEMBER 31, 1998
<S> <C> <C> <C>
Enterprise Global Financial Services Fund
- -B 10/1/98-12/31/98
With Sales Charge 15.60%
Without Sales Charge 20.60%
S&P Financial Services Index* 22.21%
Lipper Financial Services Fund Index* 19.16%
Enterprise Global S&P Financial Lipper Financial
Financial Services Fund -
B Services Index Services Fund Index
10/1/98 $10,000.00 $10,000.00 $10,000.00
1998 $11,560.00 $12,221.00 $11,916.00
</TABLE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C> <C>
Enterprise Global Financial Services Fund
- -C 10/1/98-12/31/98
With Sales Charge 19.60%
Without Sales Charge 20.60%
S&P Financial Services Fund Index* 22.21%
Lipper Financial Services Fund Index* 19.16%
Enterprise Global Lipper Financial
Financial S&P Financial Services
Services Fund - C Services Fund Index* Fund Index*
10/1/98 $10,000.00 $10,000.00 $10,000.00
12/31/98 $11,960.00 $12,221.00 $11,916.00
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 53
<PAGE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C> <C>
Enterprise Global Financial Services Fund
- -Y 10/1/98 - 12/31/98
Cumulative Return 21.00%
S&P Financial Services Index* 22.21%
Lipper Financial Services Fund Index* 19.16%
Enterprise Global Lipper Financial
Financial S&P Financial Services
Services Fund - Y Services Index Fund Index
10/1/98 $10,000 $10,000 $10,000
1998 $12,100 $12,221 $11,916
</TABLE>
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
* The S&P Financial Services Index is an unmanaged index. It includes
reinvested dividends and excludes any transaction or holding charges. Lipper
Inc. is an independent reporting service that measures the performance of most
mutual funds. The performance results reflect an unmanaged index and are net of
all expenses other than sales charges and redemption fees. One cannot invest
directly in an index.
FUTURE INVESTMENT STRATEGY
Sanford Bernstein expects many of the fund's holdings to continue benefiting
from industry consolidation and restructuring in the coming year. The Enterprise
Global Financial Services Fund employs the fund manager's research-driven
approach to identifying value, that is, to identify and select companies whose
share prices are low relative to the forecast of their long-term earnings power.
Over time, such stocks tend to outperform their local markets as investors
recognize their potential.
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.
54 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE GLOBAL FINANCIAL SERVICES FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
DOMESTIC STOCKS -- 67.80% AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
BANKING -- 33.39%
- ---------------------------------------------------------------------------------
Bank One Corporation.............................. 8,500 $ 434,031
BankAmerica Corporation........................... 8,700 523,088
Chase Manhattan Corporation....................... 1,200 81,675
First Union Corporation........................... 5,900 358,794
Fleet Financial Group Inc......................... 6,800 303,875
KeyCorp........................................... 3,600 115,200
Morgan J P & Company Inc.......................... 850 89,303
National City Corporation......................... 3,300 239,250
PNC Bank Corporation.............................. 3,400 184,025
Republic New York Corporation..................... 4,000 182,250
Wells Fargo & Company............................. 7,050 281,559
-------------
2,793,050
FINANCE -- 1.28%
- ---------------------------------------------------------------------------------
Household International Inc....................... 2,000 79,250
MBNA Corporation.................................. 1,100 27,431
-------------
106,681
LIFE INSURANCE -- 2.63%
- ---------------------------------------------------------------------------------
American General Corporation...................... 2,000 156,000
UNUM Corporation.................................. 1,100 64,213
-------------
220,213
MISC. FINANCIAL SERVICES -- 11.04%
- ---------------------------------------------------------------------------------
Ambac Financial Group Inc......................... 3,200 192,600
American Express Company.......................... 1,600 163,600
Citigroup Inc..................................... 6,850 339,075
Countrywide Credit Industries Inc................. 500 25,094
MBIA Inc.......................................... 3,100 203,243
-------------
923,612
MULTI-LINE INSURANCE -- 7.31%
- ---------------------------------------------------------------------------------
American International Group Inc.................. 2,700 260,887
Hartford Financial Services Group Inc............. 1,100 60,363
Lincoln National Corporation...................... 1,600 130,900
SAFECO Corporation................................ 3,700 158,869
-------------
611,019
PROPERTY-CASUALTY INSURANCE -- 6.51%
- ---------------------------------------------------------------------------------
Allstate Corporation.............................. 4,200 162,225
Chubb Corporation................................. 3,700 240,038
St. Paul Companies Inc............................ 4,100 142,475
-------------
544,738
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
SAVINGS AND LOAN -- 5.64%
- ---------------------------------------------------------------------------------
Federal National Mortgage Association............. 2,300 $ 170,200
Golden West Financial Corporation................. 2,000 183,375
Washington Mutual Inc............................. 3,100 118,381
-------------
471,956
TOTAL DOMESTIC STOCKS
(IDENTIFIED COST $4,884,923)..................................... 5,671,269
- ---------------------------------------------------------------------------------
FOREIGN STOCKS -- 28.13%
- ---------------------------------------------------------------------------------
BANKING -- 9.78%
- ---------------------------------------------------------------------------------
AUSTRIA -- 0.12%
- ---------------------------------------------------------------------------------
Bank Austria...................................... 200 10,170
CANADA -- 0.96%
- ---------------------------------------------------------------------------------
Bank Nova Scotia Halifax.......................... 400 8,832
Canadian Imperial Bank............................ 1,500 37,291
National Bank of Canada........................... 2,100 34,073
FRANCE -- 0.71%
- ---------------------------------------------------------------------------------
Banque Nationale de Paris......................... 350 28,809
Compagnie Financiere de Paribas................... 350 30,405
GERMANY -- 1.98%
- ---------------------------------------------------------------------------------
Commerzbank....................................... 5,250 166,012
ITALY -- 1.81%
- ---------------------------------------------------------------------------------
Banca Commerciale Italiana........................ 7,000 48,263
Banca Popolare Di Bergamo Credito Varesino........ 2,000 48,505
Banca Popolare Di Milano.......................... 6,000 54,431
JAPAN -- 2.43%
- ---------------------------------------------------------------------------------
Bank of Iwate..................................... 900 46,174
Kita-Nippon Bank Ltd.............................. 1,300 67,846
Mitsui Trust & Banking Company.................... 40,000 45,643
Yamanashi Chuo Bank Ltd........................... 10,000 43,344
NORWAY -- 0.08%
- ---------------------------------------------------------------------------------
Christiania Bank Kreditkasse...................... 2,000 6,949
SINGAPORE -- 0.30%
- ---------------------------------------------------------------------------------
Keppel Lund....................................... 3,000 3,252
Overseas Union Bank Ltd........................... 4,000 17,444
Singapore Land.................................... 2,000 4,434
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 55
<PAGE>
ENTERPRISE GLOBAL FINANCIAL SERVICES FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
SPAIN -- 1.39%
- ---------------------------------------------------------------------------------
Argentaria........................................ 4,500 $ 116,363
-------------
818,240
LIFE INSURANCE -- 0.30%
- ---------------------------------------------------------------------------------
ITALY -- 0.30%
- ---------------------------------------------------------------------------------
Unipol............................................ 6,000 25,220
MISC. FINANCIAL SERVICES -- 8.76%
- ---------------------------------------------------------------------------------
AUSTRALIA -- 1.09%
- ---------------------------------------------------------------------------------
Westfield Trust................................... 41,400 91,329
FRANCE -- 0.27%
- ---------------------------------------------------------------------------------
Simco............................................. 250 22,670
GERMANY -- 0.94%
- ---------------------------------------------------------------------------------
Deutsche Pfandbrief & Hypothekenbank.............. 900 78,843
HONG KONG -- 1.05%
- ---------------------------------------------------------------------------------
Amoy Properties Ltd............................... 60,000 44,530
Dao Heng Bank Group Ltd........................... 7,000 21,639
Hang Lung Development Company Ltd................. 20,000 21,426
JAPAN -- 1.57%
- ---------------------------------------------------------------------------------
Daiwa Securities Co. Ltd.......................... 19,000 64,874
San- In Godo Bank Ltd............................. 10,000 66,519
NETHERLANDS -- 1.35%
- ---------------------------------------------------------------------------------
ING Group......................................... 900 54,852
Wereldhave........................................ 1,020 57,822
SINGAPORE -- 0.15%
- ---------------------------------------------------------------------------------
United Overseas Bank Ltd.......................... 2,000 12,841
SWEDEN -- 0.58%
- ---------------------------------------------------------------------------------
Tornet Fastighets................................. 3,300 48,130
SWITZERLAND -- 1.76%
- ---------------------------------------------------------------------------------
UBS............................................... 480 147,456
-------------
732,931
MULTI-LINE INSURANCE -- 4.58%
- ---------------------------------------------------------------------------------
CHINA -- 1.18%
- ---------------------------------------------------------------------------------
Baloise Holding Ltd............................... 95 98,548
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
FRANCE -- 0.47%
- ---------------------------------------------------------------------------------
Scor.............................................. 600 $ 39,653
GERMANY -- 0.89%
- ---------------------------------------------------------------------------------
Hannover Rueckversicherungs....................... 400 42,602
Mannheimer Aktiengesellschaf...................... 50 31,501
UNITED KINGDOM -- 2.04%
- ---------------------------------------------------------------------------------
Guardian Royal Exchange........................... 30,400 170,207
-------------
382,511
PROPERTY-CASUALTY INSURANCE -- 4.71%
- ---------------------------------------------------------------------------------
FINLAND -- 0.16%
- ---------------------------------------------------------------------------------
Pohjola Group Insurance Corporation............... 250 13,630
FRANCE -- 0.18%
- ---------------------------------------------------------------------------------
AGF (Assurances Generales de France).............. 250 14,926
ITALY -- 0.13%
- ---------------------------------------------------------------------------------
Unipol (Preferred)................................ 4,000 10,693
UNITED KINGDOM -- 4.24%
- ---------------------------------------------------------------------------------
CGU............................................... 12,000 189,201
Royal & Sun Alliance Insurance Group.............. 20,300 165,260
-------------
393,710
TOTAL FOREIGN STOCKS
(IDENTIFIED COST $1,976,280)..................................... 2,352,612
- ---------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 3.77%
- ---------------------------------------------------------------------------------
State Street Bank & Trust Repurchase Agreement,
2.00% due 01/04/99 Collateral: U.S. Treasury Note
$320,000, 5.63 due 11/30/99 Value $324,333 $ 315,000 315,000
-------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $315,000 )...................................... 315,000
- ---------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $7,176,203)..................................... $ 8,338,881
OTHER ASSETS LESS LIABILITIES -- 0.30%........................... 25,122
-------------
NET ASSETS -- 100%............................................... $ 8,364,003
- ---------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
56 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
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 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.
1998 PERFORMANCE REVIEW
The domestic economy took a back seat to foreign events in 1998, as the
financial woes of the emerging market sector set off a chain reaction that led
investors worldwide to seek the relative safety and liquidity of U.S.
Treasuries. The problems began in the summer following an Asian currency
devaluation. The "Asian contagion" spread quickly to all emerging markets as
bond and equity markets around the globe began to sell off. The devaluation of
the Russian ruble in August exacerbated conditions. The demand for
dollar-denominated assets skyrocketed and fueled a powerful flight to quality
that plunged the yield on the 30-year U.S. Treasury Bond down to a historic low
even though the U.S. economy was expanding briskly.
Other sectors of the bond market did not fare nearly as well as Treasuries. Most
types of bonds including asset-backeds, mortgages, high-grade corporates,
high-yield corporates and emerging market debt fell in value between August and
October. Many of the bond market's problems were related to liquidity issues
rather than credit concerns. Spreads in the mortgage sector were also related to
liquidity issues rather than credit concerns. These spreads widened to levels
that had not been seen for a decade as the market confronted the year's second
wave of refinancing at the same time that hedge funds began selling mortgages to
meet margin calls. The impact of the demise of the Long Term Capital Management
hedge fund on the banking system finally forced the Fed to step in to restore
order. Bond prices stabilized and the market's liquidity improved after the Fed
cut interest rates three times between September 29 and November 17.
International markets also recovered, inciting investors to pull their capital
out of U.S. Treasuries and causing rates to rebound higher once again.
Nonetheless, interest rates at year-end were between 80 and 120 basis points
lower than they were at the beginning of the year. The 8.57 percent return of
the high-grade corporate market sector and the 9.85 percent return of the
government sector overshadowed the mortgage sector's total rate of return of
6.92 percent for the year.
THE ENTERPRISE GROUP OF FUNDS, INC. 57
<PAGE>
The slowdown in the U.S. economy forecasted by most analysts as a result of the
downturn in Asia was never fully realized in 1998 because of strong consumer
spending and confidence. Most analysts are once again forecasting a slowdown in
economic growth in 1999. The Fed appears to be satisfied with current market
conditions and seems to be done with its easing for a while. Spreads have
tightened and fourth quarter growth remains robust. The International Monetary
Fund's bailout of Brazil has also taken some pressure off of the Latin American
sector. There are encouraging signs that the worst is already behind us.
Nonetheless, many of the risks that investors confronted in 1998 related to
currency crises, downturns in emerging markets, deflation, exuberance in U.S.
stock prices, the monetary union in Europe, tension in the Middle East, the U.S.
budget surplus, and the year 2000 computer problem remain in place today. Thus
analysts expect another year of uncertainty and volatility in 1999.
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C> <C>
Enterprise Government Securities Fund -
A One Year Five Year Ten Year
With Sales Charge 1.75% 5.17% 7.67%
Without Sales Charge 6.82% 6.19% 8.19%
Lehman Brothers Int. Gov't Bond Index* 8.49% 6.45% 8.34%
Lipper General US Gov't Bond Index* 7.85% 6.02% 7.92%
Enterprise Government Lehman Brothers Int. Lipper General US
Securities Fund - A Gov't Bond Index Gov't Fund Index
12/31/88 $9,527.69 $10,000.00 $10,000.00
1989 $10,480.46 $11,268.00 $11,241.00
1990 $11,465.62 $12,345.22 $12,142.53
1991 $12,910.29 $14,087.13 $13,918.98
1992 $14,188.41 $15,063.37 $14,768.04
1993 $15,507.93 $16,294.05 $15,996.74
1994 $14,297.69 $16,008.90 $15,238.49
1995 $17,014.25 $18,315.78 $17,819.89
1996 $18,084.45 $19,059.40 $18,204.80
1997 $19,601.73 $20,530.79 $19,865.08
1998 $20,938.96 $22,273.85 $21,424.49
</TABLE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C> <C>
Enterprise Government Securities Fund -
B One Year 5/1/95-12/31/98
With Sales Charge 2.24% 7.55%
Without Sales Charge 6.24% 8.22%
Lehman Brothers Int. Gov't Bond Index* 8.49% 7.87%
Lipper General US Gov't Fund Index* 7.85% 8.05%
Enterprise Government Lehman Brothers Int. Lipper General US
Securities Fund - B Gov't Bond Index Gov't Fund Index
5/1/95 $10,000.00 $10,000.00 $10,000.00
1995 $11,047.00 $10,858.63 $11,052.45
1996 $11,666.74 $11,299.49 $11,291.18
1997 $12,577.91 $12,171.81 $12,320.94
1998 $13,062.77 $13,205.19 $13,288.13
</TABLE>
58 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C> <C>
Enterprise Government Securities Fund - C One Year 5/1/97-12/31/98
With Sales Charge 5.15% 8.23%
Without Sales Charge 6.15% 8.23%
Lehman Brothers Int. Gov't Bond Index* 8.49% 9.19%
Lipper General US Gov't Fund Index* 7.85% 9.66%
Enterprise Government Lehman Brothers Int. Lipper General US
Securities Fund - C Gov't. Bond Index Gov't Fund Index
5/1/97 $10,000.00 $10,000.00 $10,000.00
1997 $10,748.90 $10,674.00 $10,814.15
1998 $11,409.96 $11,580.22 $11,663.06
</TABLE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C> <C>
One Year 7/31/97-12/31/98
Enterprise Government Securities Fund -
Y 7.30% 7.47%
Lehman Brothers Int. Gov't Bond Index* 8.49% 8.09%
Lipper General US Gov't Fund Index* 7.85% 7.86%
Enterprise Government Lehman Brothers Int. Lipper General US
Securities Fund - Y Gov't Bond Index Gov't Fund Index
7/31/97 $10,000.00 $10,000.00 $10,000.00
1997 $10,322.58 $10,293.00 $10,323.03
1998 $11,076.13 $11,166.88 $11,133.39
</TABLE>
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
* The Lehman Intermediate Gov't Bond Index is an unmanaged index. It includes
reinvested interest and excludes any transaction or holding charges. Lipper Inc.
is an independent reporting service that measures the performance of most mutual
funds. The performance results reflect an unmanaged index and are net of all
expenses other than sales charges and redemption fees. One cannot invest
directly in an index.
THE ENTERPRISE GROUP OF FUNDS, INC. 59
<PAGE>
FUTURE INVESTMENT STRATEGY
The mortgage sector is positioned to perform well during early 1999. Mortgages
remain inexpensive relative to their historical valuations and further declines
in market volatility should tighten spreads further. Prepayment reports to date
have been very much in line with street forecasts. The demand for mortgage
products is expected to remain strong as investors reinvest their paydowns and
allocate additional money to this fundamentally inexpensive sector. Recent data
have revealed that the current demand for fixed-rate products from the banking
sector alone exceeds the current issuance. In this period of rapid prepayments,
call protection remains of utmost importance and we continue to emphasize
discounts and securities with prepayment protection. This emphasis has helped us
through previous periods of rapid prepayments and allows us to retain a
favorable outlook on the mortgage sector in the near term.
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.
60 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
U.S. GOVERNMENT & AGENCY OR PRINCIPAL
OBLIGATIONS -- 77.27% AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
FREDDIE MAC PARTICIPATION CERTIFICATES -- 7.93%
- ------------------------------------------------------------------------------
FHLPC 7.00%, due 09/01/17......................... $1,555,438 $ 1,585,380
FHLPC 7.00%, due 10/01/17......................... 1,961,187 1,998,783
FHLPC 9.00%, due 10/01/22......................... 1,435,858 1,511,729
FHLPC 10.00%, due 10/01/18........................ 928,972 1,004,553
FHLPC 10.00%, due 07/01/20........................ 1,601,885 1,734,184
FHLPC 10.00%, due 10/01/20........................ 755,336 815,023
-----------
8,649,652
FEDERAL HOUSING ADMINISTRATION -- 24.47%
- ------------------------------------------------------------------------------
FHA 6.75%, due 11/01/28........................... 2,208,574 2,197,531
FHA 7.00%, due 10/01/28........................... 2,305,937 2,308,820
FHA 7.18%, due 02/20/29........................... 3,387,722 3,400,426
FHA 7.625%, due 06/01/28.......................... 3,683,553 3,724,993
FHA 7.75%, due 05/01/18........................... 6,219,634 6,312,928
FHA 7.75%, due 04/01/28........................... 3,250,598 3,303,420
FHA 7.80%, due 09/01/23........................... 2,740,700 2,781,811
FHA 8.70%, due 12/01/27........................... 2,562,600 2,671,510
-----------
26,701,439
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 21.67%
- ------------------------------------------------------------------------------
FNMA 5.50%, due 01/01/09.......................... 1,728,399 1,713,120
FNMA 5.50%, due 02/01/09.......................... 3,230,279 3,200,528
FNMA 6.00%, due 11/01/28.......................... 4,035,019 3,984,622
FNMA 6.00%, due 11/01/28.......................... 8,069,108 7,968,325
FNMA 6.50%, due 02/01/09.......................... 134,685 136,532
FNMA 7.00%, due 03/01/14.......................... 1,512,440 1,541,947
FNMA 8.00%, due 11/01/16.......................... 2,482,821 2,544,891
FNMA 9.50%, due 08/01/20.......................... 901,598 958,560
FNMA 9.50%, due 10/01/20.......................... 856,086 909,446
FNMA 10.00%, due 07/01/20......................... 218,182 235,606
FNMA 10.00%, due 07/01/20......................... 308,186 332,456
FNMA Principal Strip 7.70%, due 08/10/04.......... 125,000 121,159
-----------
23,647,192
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 20.17%
- ------------------------------------------------------------------------------
GNMA 7.00%, due 12/15/27.......................... 4,768,814 4,879,880
GNMA 7.00%, due 10/15/33.......................... 14,805,506 15,465,388
GNMA 7.50%, due 04/15/23.......................... 560,100 576,835
GNMA 7.50%, due 05/15/23.......................... 607,338 625,570
GNMA 7.50%, due 05/15/23.......................... 439,627 452,609
GNMA 9.00%, due 08/15/16.......................... 5,370 5,701
-----------
22,005,983
U.S. TREASURY NOTES -- 3.03%
- ------------------------------------------------------------------------------
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
U.S. Treasury Note 3.375%, due 01/15/07........... $3,000,000 $ 2,901,540
U.S. Treasury Note 8.875%, due 05/15/00........... 380,000 401,067
-----------
3,302,607
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(IDENTIFIED COST $83,841,660)................................... 84,306,873
- ------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS -- 7.25%
- ------------------------------------------------------------------------------
FNMA Remic 6.50%, due 06/25/23.................... 434,567 437,926
Freddie Mac Series 1552 Class YA 7.24%, due
08/15/23(v)....................................... 1,291,553 1,193,072
Freddie Mac Series 1634 Class SB 8.80%, due
12/15/23(v)....................................... 2,222,727 2,228,284
PNC Mortgage Securities Corporation Series 1998-5
6.625%, due 07/25/28.............................. 4,011,980 4,053,989
-----------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(IDENTIFIED COST $7,751,550).................................... 7,913,271
- ------------------------------------------------------------------------------
-----------
CORPORATE BONDS -- 2.27%
- ------------------------------------------------------------------------------
ASSET-BACKED SECURITIES -- 2.27%
- ------------------------------------------------------------------------------
Superior Wholesale Inventory Financing Trust
Series 1997-A 6.346%, due 11/15/04................ 2,471,446 2,474,535
-----------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $2,476,080).................................... 2,474,535
- ------------------------------------------------------------------------------
COMMERCIAL PAPER -- 8.24%
- ------------------------------------------------------------------------------
BP America Inc. 5.30%, due 01/11/99............... 2,000,000 1,997,056
Ciesco Inc. 5.65%, due 01/04/99................... 4,000,000 3,998,117
Metropolitan Life Funding Inc. 4.85%, due
01/22/99.......................................... 3,000,000 2,991,512
-----------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $8,986,685).................................... 8,986,685
- ------------------------------------------------------------------------------
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 61
<PAGE>
ENTERPRISE GOVERNMENT SECURITIES FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 4.43%
- ------------------------------------------------------------------------------
State Street Bank & Trust Repurchase Agreement
3.25%, due 01/04/99
Collateral: U.S. Treasury Note, $4,800,000 5.375%
due 1/31/00 Value $4,938,000...................... $4,840,000 $ 4,840,000
-----------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $4,840,000).................................... 4,840,000
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $107,895,975).................................. 108,521,364
OTHER ASSETS LESS LIABILITIES -- 0.54%.......................... 591,194
-----------
NET ASSETS 100%................................................. $109,112,558
- ------------------------------------------------------------------------------
</TABLE>
(v) Variable interest rate security; interest rate is as of December 31, 1998.
See notes to financial statements.
62 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
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 approximately $973 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.
1998 PERFORMANCE REVIEW
The predominant theme in 1998 was volatility. After advancing more than four
percent during the first quarter, the high-yield market was derailed by both
global and domestic events, including spreading Asian contagion, a Russian
default, the Long Term Capital Management bailout, deflating commodities, and
the impeachment process of the U.S. President. Whereas risk had been in vogue
with most investors for much of the 1990s, risk was abruptly out of fashion. As
a result, the high-yield market underperformed the Treasury market.
Despite the lackluster performance it should be noted that the high-yield market
had a record year in terms of new issuance and mutual fund inflows. The market
has grown to more than $550 billion. The scope of institutional investors
involved in the market has increased as has the number of market makers.
THE ENTERPRISE GROUP OF FUNDS, INC. 63
<PAGE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C> <C>
Enterprise High-Yield Bond Fund - A One Year Five Year Ten Year
With Sales Charge -2.62% 7.62% 8.75%
Without Sales Charge 2.29% 8.67% 9.28%
Lehman BB Index* 5.13% 9.38% 10.61%
Lipper High-Yield Bond Fund Index* -0.08% 7.63% 9.52%
Enterprise
High-Yield Lehman BB Lipper High-Yield
Bond Fund - A Index Bond Fund Index
12/31/88 $9,522.71 $10,000.00 $10,000.00
1989 $9,456.05 $10,781.00 $9,723.00
1990 $8,368.60 $10,788.55 $8,641.80
1991 $11,130.24 $13,488.92 $12,117.54
1992 $12,989.00 $15,117.03 $14,342.31
1993 $15,275.06 $17,516.11 $17,187.83
1994 $15,282.09 $17,447.79 $16,555.32
1995 $17,727.22 $21,258.39 $19,432.63
1996 $19,992.76 $23,154.64 $21,954.99
1997 $22,627.80 $26,081.39 $24,846.46
1998 $23,145.53 $27,419.36 $24,826.58
</TABLE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C> <C>
Enterprise High-Yield Bond Fund - B One Year 5/1/95 - 12/31/98
With Sales Charge -2.36% 8.69%
Without Sales Charge 1.64% 9.34%
Lehman BB Index* 5.13% 8.92%
Lipper High-Yield Bond Fund Index* -0.08% 9.49%
Enterprise
High-Yield Lehman BB Lipper High-Yield
Bond Fund - B Index Bond Fund Index
5/1/95 $10,000.00 $10,000.00 $10,000.00
1995 $10,812.00 $10,971.00 $10,917.37
1996 $12,126.74 $11,949.61 $12,334.44
1997 $13,653.37 $13,460.04 $13,958.89
1998 $13,577.29 $14,150.54 $13,947.72
</TABLE>
64 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C> <C>
Enterprise High-Yield Bond Fund - C One Year 5/1/97-12/31/98
With Sales Charge 0.72% 7.48%
Without Sales Charge 1.72% 7.48%
Lehman BB Index* 5.13% 9.20%
Lipper High Yield Bond Fund Index* -0.08% 6.70%
Enterprise
High-Yield Lehman BB Lipper High Yield
Bond Fund - C Index Bond Fund Index
5/1/97 $10,000.00 $10,000.00 $10,000.00
1997 $11,087.40 $11,016.00 $11,151.68
1998 $11,278.23 $11,581.12 $11,143.00
</TABLE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C> <C>
One Year 7/31/97 - 12/31/98
Enterprise High-Yield Bond Fund - Y 2.49% 4.87%
Lehman BB Index* 5.13% 5.84%
Lipper High Yield Bond Fund Index* -0.08% 2.82%
Enterprise
High-Yield Lehman BB Lipper High Yield
Bond Fund - Y Index Bond Fund Index
7/31/97 $10,000.00 $10,000.00 $10,000.00
1997 $10,438.40 $10,310.00 $10,411.07
1998 $10,698.32 $10,838.90 $10,402.74
</TABLE>
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
* The Lehman BB Index is an unmanaged index. It includes reinvested interest
and excludes any transaction or holding charges. Lipper Inc. is an independent
reporting service that measures the performance of most mutual funds. The
performance results reflect an unmanaged index and are net of all expenses other
than sales charges and redemption fees. One cannot invest directly in an index.
FUTURE INVESTMENT STRATEGY
Looking ahead to 1999, Caywood-Scholl believes that the valuation in the
high-yield market is still very attractive. With most economists predicting
domestic growth in the neighborhood of two percent, the fund manager does not
expect a meaningful increase in credit risk. The domestic bank sector is healthy
and should remain supportive to leveraged companies. A robust stock market is
always a positive for high-yield issuers, giving them an alternative source of
capital. Lastly, given the growth of the market and the general improvement of
the quality of issuers, it is easy to have a positive outlook on 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.
THE ENTERPRISE GROUP OF FUNDS, INC. 65
<PAGE>
ENTERPRISE HIGH-YIELD BOND FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
CORPORATE BONDS, CONVERTIBLE OF SHARES
SECURITIES, COMMON & OR PRINCIPAL
PREFERRED STOCKS -- 88.61% AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
AEROSPACE -- 1.09%
- ------------------------------------------------------------------------------
BE Aerospace Inc. 9.50%, due 11/01/08............. $ 250,000 $ 264,375
BE Aerospace Inc. (Series B) 8.00%, due
03/01/08.......................................... 150,000 147,000
Coltec Industries Inc. 7.50%, due 04/15/08........ 800,000 845,000
-----------
1,256,375
AUTOMOTIVE -- 0.81%
- ------------------------------------------------------------------------------
Sonic Automotive Inc. (Series B) 11.00%, due
08/01/08.......................................... 600,000 581,250
United Auto Group Inc. (Series B) 11.00%, due
07/15/07.......................................... 400,000 351,000
-----------
932,250
BANKING -- 2.12%
- ------------------------------------------------------------------------------
Bay View Capital Corporation 9.125%, due
08/15/07.......................................... 900,000 868,500
DVI Inc. 9.875%, due 02/01/04..................... 350,000 336,000
Imperial Credit Industries Inc. (Series B) 9.875%,
due 01/15/07...................................... 700,000 542,500
Western Financial Savings Bank Orange California
8.50%, due 07/01/03............................... 350,000 310,188
Western Financial Savings Bank Orange California
8.875%, due 08/01/07.............................. 500,000 397,500
-----------
2,454,688
BROADCASTING -- 4.73%
- ------------------------------------------------------------------------------
Allbritton Communications Company (Series B)
8.875%, due 02/01/08.............................. 800,000 810,000
Chancellor Media Corporation 9.00%, due
10/01/08.......................................... 850,000 901,000
Chancellor Media Corporation (Series B) 8.125%,
due 12/15/07...................................... 500,000 496,250
Fox Family Worldwide Inc. 9.25%, due 11/01/07..... 600,000 592,500
Fox Family Worldwide Inc. 0%, due 11/01/07 (c).... 750,000 477,187
Fox/Liberty Networks LLC 0%, due 08/15/07 (c)..... 1,800,000 1,215,000
Rogers Communications Inc. 8.875%, due 07/15/07... 300,000 309,000
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
Rogers Communications Inc. 9.125%, due 01/15/06... $ 150,000 $ 156,000
Sinclair Broadcast Group Inc. 8.75%, due
12/15/07.......................................... 500,000 503,750
-----------
5,460,687
BUILDING & CONSTRUCTION -- 5.03%
- ------------------------------------------------------------------------------
American Standard Inc. 7.375%, due 02/01/08....... 1,850,000 1,870,812
Building Materials Corporation America (Series B)
7.75%, due 07/15/05............................... 600,000 592,500
Building Materials Corporation America (Series B)
8.00%, due 10/15/07............................... 450,000 430,875
International Comfort Products (Series B) 8.625%,
due 05/15/08...................................... 750,000 750,000
Nortek Inc. 8.875%, due 08/01/08.................. 400,000 406,000
Nortek Inc. (Series B) 9.125%, due 09/01/07....... 1,000,000 1,027,500
Republic Group Inc. 9.50%, due 07/15/08........... 750,000 731,250
-----------
5,808,937
BUSINESS SERVICES -- 1.18%
- ------------------------------------------------------------------------------
CEX Holdings Inc. 9.625%, due 06/01/08............ 850,000 775,625
United Rentals Inc. 8.80%, due 08/15/08........... 600,000 586,500
-----------
1,362,125
CABLE -- 2.72%
- ------------------------------------------------------------------------------
Adelphia Communications Corporation (Series B)
10.50%, due 07/15/04.............................. 650,000 710,125
Century Communications Corporation 9.50%, due
03/01/05.......................................... 200,000 222,500
Century Communications Corporation (Series B) Zero
Coupon, due 01/15/08.............................. 1,000,000 508,750
CSC Holdings Inc. 7.875%, due 12/15/07............ 500,000 527,430
Lenfest Communications Inc. 7.625%, due
02/15/08.......................................... 300,000 311,625
</TABLE>
66 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE HIGH-YIELD BOND FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
Mediacom LLC/Mediacom Capital Corporation (Series
B) 8.50%, due 04/15/08............................ $ 650,000 $ 663,813
TCI Satellite Entertainment Inc. 0%, due 02/15/07
(c)............................................... 1,000,000 198,750
-----------
3,142,993
CHEMICALS -- 1.36%
- ------------------------------------------------------------------------------
Huntsman Corporation 9.50%, due 07/01/07.......... 350,000 350,000
Huntsman Polymers Corporation 11.75%, due
12/01/04.......................................... 250,000 272,500
PCI Chemicals Canada Inc. 9.25%, due 10/15/07..... 500,000 403,125
Pioneer Americas Acquisition Corporation (Series
B) 9.25%, due 06/15/07............................ 700,000 544,250
-----------
1,569,875
COMMUNICATIONS -- 5.84%
- ------------------------------------------------------------------------------
Globalstar LP/Capital 11.375%, due 02/15/04....... 1,050,000 784,875
Globalstar LP/Capital 10.75%, due 11/01/04........ 250,000 179,375
Globalstar LP/Capital 11.50%, due 06/01/05........ $ 250,000 186,875
Globalstar Telecommunications (Wts) (a)........... 700 15,789
Iridium Capital Corporation (Series A) 13.00%, due
07/15/05.......................................... $ 700,000 642,250
Iridium Capital Corporation (Series B) 14.00%, due
07/15/05.......................................... $ 800,000 763,000
Iridium World Communications (Wts) (a)............ 550 68,750
Level 3 Commuications Inc. 0%, due 12/01/08 (c)... $ 750,000 437,813
Level 3 Communications Inc. 9.125%, due
05/01/08.......................................... $1,200,000 1,191,000
Loral Orion Network Systems Inc. (Wts) (a)........ 850 7,075
Loral Space & Communication Ltd. 0%, due 01/15/07
(c)............................................... $1,450,000 929,812
Qwest Communications International Inc. 7.25%, due
11/01/08.......................................... 500,000 511,250
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
Qwest Communications International Inc. 7.50%, due
11/01/08.......................................... $ 450,000 $ 469,687
Qwest Communications International Inc. (Series B)
0%, due 02/01/08 (c).............................. 750,000 563,437
-----------
6,750,988
CONSUMER PRODUCTS -- 3.49%
- ------------------------------------------------------------------------------
Boyds Collection Ltd. 9.00%, due 05/15/08......... 300,000 306,375
Chattem Inc. (Series B) 8.875%, due 04/01/08...... 1,100,000 1,127,500
Corning Consumer Products Company (Series B)
9.625%, due 05/01/08.............................. 600,000 430,500
French Fragrances Inc. (Series B) 10.375%, due
05/15/07.......................................... 550,000 547,938
Revlon Consumer Products Corporation 8.625%, due
02/01/08.......................................... 350,000 321,125
Samsonite Corporation 10.75%, due 06/15/08........ 650,000 550,875
Sealy Mattress Company (Series B) 0%, due 12/15/07
(c)............................................... 1,250,000 748,437
-----------
4,032,750
CONTAINERS/PACKAGING -- 4.29%
- ------------------------------------------------------------------------------
Buckeye Cellulose Corporation 8.50%, due
12/15/05.......................................... 550,000 569,250
Huntsman Packaging Corporation 9.125%, due
10/01/07.......................................... 650,000 645,125
Owens Illinois Inc. 7.35%, due 05/15/08........... 1,500,000 1,536,840
Owens Illinois Inc. 8.10%, due 05/15/07........... 100,000 107,131
Printpack Inc. (Series B) 9.875%, due 08/15/04.... 500,000 511,250
Printpack Inc. (Series B) 10.625%, due 08/15/06... 400,000 391,000
Stone Container Corporation 10.75%, due
10/01/02.......................................... 550,000 571,312
United States Can Corporation (Series B) 10.125%,
due 10/15/06...................................... 600,000 630,750
-----------
4,962,658
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 67
<PAGE>
ENTERPRISE HIGH-YIELD BOND FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
CRUDE & PETROLEUM -- 1.01%
- ------------------------------------------------------------------------------
Clark Refining & Marketing Inc. 8.875%, due
11/15/07.......................................... $ 250,000 $ 231,563
Trizec Hahn Corporation (Series B) 10.875%, due
12/01/05.......................................... 1,000,000 937,500
-----------
1,169,063
ELECTRONICS -- 0.40%
- ------------------------------------------------------------------------------
Axiohm Transaction Solutions 9.75%, due
10/01/07.......................................... 500,000 465,000
ENERGY -- 1.18%
- ------------------------------------------------------------------------------
Cogentrix Energy Inc. 8.75%, due 10/15/08......... 250,000 268,750
Nuevo Energy Company (Series B) 8.875%, due
06/01/08.......................................... 250,000 236,875
Ocean Energy Inc. (Series B) 8.375%, due
07/01/08.......................................... 900,000 852,750
-----------
1,358,375
ENTERTAINMENT & LEISURE -- 0.21%
- ------------------------------------------------------------------------------
AMF Bowling Inc. Zero Coupon, due 05/12/18........ 1,950,000 248,625
FOOD & BEVERAGES & TOBACCO -- 2.25%
- ------------------------------------------------------------------------------
NBTY Inc. (Series B) 8.625%, due 09/15/07......... 1,000,000 981,250
Purina Mills Inc. 9.00%, due 03/15/10............. 550,000 565,125
RJR Nabisco Inc. 8.75%, due 07/15/07.............. 250,000 272,075
Seagram Joseph E. & Sons Inc. 6.80%, due
12/15/08.......................................... 500,000 499,795
Twin Laboratories Inc. 10.25%, due 05/15/06....... 260,000 277,550
-----------
2,595,795
GAMING -- 2.37%
- ------------------------------------------------------------------------------
Circus Circus Enterprises Inc. 9.25%, due
12/01/05.......................................... 1,000,000 1,021,250
Empress Entertainment Inc. 8.125%, due 07/01/06... 650,000 651,625
Mirage Resorts Inc. 6.75%, due 08/01/07........... 200,000 193,308
Trump Atlantic City Associates 11.25%, due
05/01/06.......................................... 1,000,000 877,500
-----------
2,743,683
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
HEALTH CARE -- 6.24%
- ------------------------------------------------------------------------------
Columbia HCA Healthcare Corporation 7.00%, due
07/01/07.......................................... $ 550,000 $ 523,308
Dade International Inc. (Series B) 11.125%, due
05/01/06.......................................... 450,000 498,938
Fisher Scientific International Inc. 9.00%, due
02/01/08.......................................... 900,000 897,750
Fisher Scientific International Inc. 9.00%, due
02/01/08.......................................... $ 450,000 448,875
Fresenius Medical Care Capital Trust (Preferred
Security)......................................... 250 263,125
Hudson Respiratory Care Inc. 9.125%, due
04/15/08.......................................... $ 450,000 367,875
Magellan Health Services Inc. 9.00%, due
02/15/08.......................................... 200,000 178,500
Maxxim Medical Inc. 10.50%, due 08/01/06.......... 1,000,000 1,075,000
Pharmerica Inc. 8.375%, due 04/01/08.............. 500,000 448,750
PHP Healthcare Corporation 6.50%, due 12/15/02
(b)............................................... 800,000 8,000
Quest Diagnostics Inc. 10.75%, due 12/15/06....... 750,000 829,687
Tenet Healthcare Corporation 6.00%, due
12/01/05.......................................... 900,000 814,500
Tenet Healthcare Corporation 8.125%, due
12/01/08.......................................... 450,000 465,057
Vencor Operating Inc. 9.875%, due 05/01/05........ 450,000 390,375
-----------
7,209,740
HOTELS & RESTAURANTS -- 3.71%
- ------------------------------------------------------------------------------
AFC Enterprises Inc. 10.25%, due 05/15/07......... 650,000 677,625
Apple South Inc. 9.75%, due 06/01/06.............. 350,000 332,500
Foodmaker Corporation (Series B) 9.75%, due
11/01/03.......................................... 350,000 367,680
Foodmaker Inc. 8.375%, due 04/15/08............... 850,000 853,187
Hammon John Q. Hotels 8.875%, due 02/15/04........ 300,000 273,750
HMH Properties Inc. (Series A) 7.875%, due
08/01/05.......................................... 1,000,000 983,750
</TABLE>
68 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE HIGH-YIELD BOND FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
Perkins Family Restaurant (Series B) 10.125%, due
12/15/07.......................................... $ 750,000 $ 799,688
-----------
4,288,180
MACHINERY -- 0.72%
- ------------------------------------------------------------------------------
Columbus McKinnon Corporation 8.50%, due
04/01/08.......................................... 500,000 471,250
Navistar International Corporation (Series B)
8.00%, due 02/01/08............................... 350,000 355,688
-----------
826,938
MEDICAL SERVICES -- 0.64%
- ------------------------------------------------------------------------------
Rural/Metro Corporation 7.875%, due 03/15/08...... 800,000 734,000
METALS & MINING -- 2.65%
- ------------------------------------------------------------------------------
AK Steel Corporation 9.125%, due 12/15/06......... 500,000 521,250
Kaiser Aluminum & Chemical Corporation (Series D)
10.875%, due 10/15/06............................. 500,000 503,750
Metals USA Inc. 8.625%, due 02/15/08.............. 500,000 453,125
Oregon Steel Mills Inc. 11.00%, due 06/15/03...... 450,000 464,063
WCI Steel Inc. (Series B) 10.00%, due 12/01/04.... 900,000 895,500
WHX Corporation 10.50%, due 04/15/05.............. 250,000 229,375
-----------
3,067,063
PHARMACEUTICALS -- 1.14%
- ------------------------------------------------------------------------------
Biovail Corporation International New 10.875%, due
11/15/05.......................................... 1,300,000 1,319,500
PRINTING & PUBLISHING -- 0.93%
- ------------------------------------------------------------------------------
Nebraska Book Company Inc. 8.75%, due 02/15/08.... 750,000 713,438
Von Hoffmann Press Inc. 0%, due 05/15/07 (c)...... 350,000 359,625
-----------
1,073,063
REAL ESTATE -- 0.57%
- ------------------------------------------------------------------------------
Crown Castle International Corporation 0%, due
11/15/07 (c)...................................... 950,000 659,063
RETAIL -- 6.33%
- ------------------------------------------------------------------------------
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
Cole National Group Inc. 8.625%, due 08/15/07..... $1,100,000 $ 1,086,250
Jitney Jungle Stores America Inc. 10.375%, due
09/15/07.......................................... 550,000 566,500
Meyer Fred Inc. 7.45%, due 03/01/08............... 1,550,000 1,674,108
Michaels Stores Inc. 6.75%, due 01/15/03 (c)...... 450,000 392,625
Nine West Group Inc. 5.50%, due 07/15/03.......... 250,000 195,625
Randalls Food Markets Inc. (Series B) 9.375%, due
07/01/07.......................................... 600,000 643,500
Saks Inc. 7.50%, due 12/01/10..................... 400,000 403,634
Saks Inc. 8.25%, due 11/15/08..................... 2,200,000 2,355,254
-----------
7,317,496
TELECOMMUNICATIONS -- 16.28%
- ------------------------------------------------------------------------------
21st Century Telecom Group Inc. 0%, due 02/15/08
(c) .............................................. 950,000 399,000
CCPR Services Inc. 10.00%, due 02/01/07........... 800,000 770,000
Comcast Cellular Holdings Inc. (Series B) 9.50%,
due 05/01/07...................................... 1,600,000 1,704,000
E. Spire Communications Inc. 0%, due 11/01/05
(c)............................................... $1,100,000 830,841
E. Spire Communications Inc. (Wts) (a)............ 800 19,209
Firstworld Communications Inc. 0%, due 04/15/08
(c)............................................... $ 500,000 150,000
Firstworld Communications Inc. (Wts) (a).......... 500 --
Flag Ltd. 8.25%, due 01/30/08..................... $ 350,000 344,750
ICG Holdings Inc. 0%, due 05/01/06 (c)............ 1,250,000 925,000
ICG Services Inc. 0%, due 02/15/08 (c)............ 200,000 106,750
ICO Global Communication 15.00%, due 08/01/05..... 250,000 187,500
Intermedia Communications Inc. (Series B) 8.50%,
due 01/15/08...................................... 600,000 574,500
Intermedia Communications Inc. (Series B) 0%, due
07/15/07 (c)...................................... 350,000 244,563
McLeodUSA Inc. 0%, due 03/01/07 (c)............... 800,000 611,000
Metromedia Fiber Network Inc. 10.00%, due
11/15/08.......................................... 500,000 516,875
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 69
<PAGE>
ENTERPRISE HIGH-YIELD BOND FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
Metronet Communications Corp 0%, due 06/15/08
(c)............................................... $ 900,000 $ 554,625
Metronet Communications Corporation 12.00%, due
08/15/07.......................................... 150,000 166,875
Metronet Communications Corporation 0%, due
11/01/07 (c)...................................... $ 500,000 304,375
Metronet Communications Corporation (Wts) (a)..... 150 7,972
Nextel Communications Inc. 0%, due 09/15/07 (c)... $1,550,000 997,812
Nextel Communications Inc. 0%, due 10/31/07 (c)... 500,000 304,375
Nextel Communications Inc. 0%, due 02/15/08 (c)... 350,000 210,875
Nextlink Communications Inc. 10.75%, due
11/15/08.......................................... 900,000 922,500
Nextlink Communications Inc. 0%, due 04/15/08
(c)............................................... 1,250,000 714,062
Orange 8.00%, due 08/01/08........................ $1,500,000 1,503,750
Pagemart (Wts) (a)................................ 3,450 24,150
Pagemart Nationwide Inc........................... 1,750 17,500
Pathnet Inc. 12.25%, due 04/15/08................. $ 250,000 174,375
Pathnet Inc. (Wts.) (a)........................... 250 0
RCN Corporation 0%, due 10/15/07 (c).............. $1,050,000 612,938
RCN Corporation (Series B) 0%, due 02/15/08 (c)... 700,000 377,125
Rogers Cantel Inc. 8.80%, due 10/01/07............ 800,000 805,000
Sprint Spectrum LP 0%, due 08/15/06 (c)........... 2,500,000 2,271,875
Teligent Inc. (Series B) 0%, due 03/01/08 (c)..... 200,000 97,750
Winstar Communications Inc. 10.00%, due
03/15/08.......................................... 700,000 600,250
Winstar Equipment Corporation 12.50%, due
03/15/04.......................................... 750,000 755,625
-----------
18,807,797
TEXTILES -- 3.86%
- ------------------------------------------------------------------------------
Phillips Van Heusen Corporation 9.50%, due
05/01/08.......................................... 1,000,000 1,001,250
Pillowtex Corporation (Series B) 9.00%, due
12/15/07.......................................... 450,000 466,875
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
Polymer Group Inc. (Series B) 8.75%, due
03/01/08.......................................... $ 250,000 $ 244,375
Polymer Group Inc. (Series B) 9.00%, due
07/01/07.......................................... 550,000 543,125
Westpoint Stevens Inc. 7.875%, due 06/15/08....... 1,250,000 1,281,250
William Carter Company (Series A) 10.375%, due
12/01/06.......................................... 850,000 927,562
-----------
4,464,437
TRANSPORTATION -- 0.37%
- ------------------------------------------------------------------------------
TBS Shipping International Ltd. 10.00%, due
05/01/05.......................................... 750,000 433,125
UTILITIES -- 3.82%
- ------------------------------------------------------------------------------
Calenergy Inc. 7.52%, due 09/15/08................ 1,500,000 1,571,775
Calenergy Inc. 7.63%, due 10/15/07................ 250,000 266,282
Ferrellgas Partners LP (Series B) 9.375%, due
06/15/06.......................................... 450,000 451,125
Midland Cogeneration Venture LP (Series C-91)
10.33%, due 07/23/02.............................. 152,247 163,475
Midland Funding Corporation (Series C-94) 10.33%,
due 07/23/02...................................... 163,936 176,027
Niagara Mohawk Power Corporation (Series G) 7.75%,
due 10/01/08...................................... 1,650,000 1,786,504
-----------
4,415,188
WASTE MANAGEMENT -- 1.27%
- ------------------------------------------------------------------------------
Allied Waste North America 7.625%, due 01/01/06... 750,000 759,375
Allied Waste North America 7.875%, due 01/01/09... 700,000 709,625
-----------
1,469,000
TOTAL CORPORATE BONDS, CONVERTIBLE SECURITIES, COMMON &
PREFERRED STOCKS (IDENTIFIED COST $106,115,326)................. 102,399,457
- ------------------------------------------------------------------------------
</TABLE>
70 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE HIGH-YIELD BOND FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
FOREIGN BONDS -- 7.28%
- ------------------------------------------------------------------------------
APPAREL & TEXTILES -- 0.18%
- ------------------------------------------------------------------------------
Reliance Industries Ltd. 8.25%, due 01/15/27...... $ 250,000 $ 209,465
BASIC INDUSTRIES -- 1.11%
- ------------------------------------------------------------------------------
Cemex 12.75%, due 07/15/06........................ 850,000 947,750
Cemex 12.75%, due 07/15/06........................ 300,000 334,500
-----------
1,282,250
BROADCASTING -- 1.33%
- ------------------------------------------------------------------------------
Grupo Televisa 11.375%, due 05/15/03.............. 600,000 594,000
Grupo Televisa 11.875%, due 05/15/06.............. 300,000 300,000
Satelites Mexicanos 10.125%, due 11/01/04......... 800,000 638,000
-----------
1,532,000
CABLE -- 0.60%
- ------------------------------------------------------------------------------
Kabelmedia Holding 0%, due 08/01/06 (c)........... 850,000 697,000
CAPITAL GOODS & SERVICES -- 0.39%
- ------------------------------------------------------------------------------
Cemex International Capital Inc. 9.66%, due
12/29/49.......................................... 500,000 456,250
CONGLOMERATES -- 0.34%
- ------------------------------------------------------------------------------
Hutchison Whampoa Finance Ltd. 6.95%, due
08/01/07.......................................... 400,000 390,416
CONTAINERS/PACKAGING -- 0.54%
- ------------------------------------------------------------------------------
Vicap 11.375%, due 05/15/07....................... 700,000 630,000
ENERGY -- 0.20%
- ------------------------------------------------------------------------------
Petroleos Mexicanos 8.85%, due 09/15/07........... 250,000 225,625
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
GOVERNMENT BOND -- 1.75%
- ------------------------------------------------------------------------------
City of St. Petersburg 9.50%, due 06/18/02........ $ 300,000 $ 69,750
Republic of Argentina Global 11.00%, due
10/09/06.......................................... 650,000 645,125
Republic of Turkey 10.00%, due 09/19/07........... 250,000 227,097
Russian Federation 10.00%, due 06/26/07........... 300,000 81,750
United Mexican States 8.625%, due 03/12/08........ 750,000 701,250
United Mexican States 9.875%, due 01/15/07........ 300,000 297,750
-----------
2,022,722
PAPER & FOREST PRODUCTS -- 0.44%
- ------------------------------------------------------------------------------
Indah Kiat Finance Mauritius Ltd. 10.00%, due
07/01/07.......................................... 350,000 184,187
Indah Kiat International Finance Co. (Series B)
11.875%, due 06/15/02............................. 150,000 106,367
Pindo Deli Finance Mauritius Ltd. 10.75%, due
10/01/07.......................................... 400,000 213,000
-----------
503,554
TRANSPORTATION -- 0.40%
- ------------------------------------------------------------------------------
TFM 10.25%, due 06/15/07.......................... 250,000 209,375
Transportacion Maritima 10.00%, due 11/15/06...... 300,000 248,250
-----------
457,625
TOTAL FOREIGN BONDS
(IDENTIFIED COST $9,583,530).................................... 8,406,907
- ------------------------------------------------------------------------------
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 71
<PAGE>
ENTERPRISE HIGH-YIELD BOND FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
U.S. TREASURY NOTES -- 2.19%
- ------------------------------------------------------------------------------
U.S. Treasury Note 4.50%, due 09/30/00............ $1,500,000 $ 1,497,435
U.S. Treasury Note 4.75%, due 11/15/08............ 500,000 503,575
U.S. Treasury Note 5.625%, due 05/15/08........... 500,000 533,575
TOTAL U.S. TREASURY NOTES
(IDENTIFIED COST $2,543,202).................................... 2,534,585
- ------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 0.27%
- ------------------------------------------------------------------------------
State Street Bank & Trust Repurchase Agreement
2.00%, due 01/04/99
Collateral: U.S. Treasury Bond $190,000 13.25% due
05/15/14 Value $317,827........................... 310,000 310,000
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $310,000)...................................... $ 310,000
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $118,552,058).................................. $113,650,949
OTHER ASSETS LESS LIABILITIES -- 1.65% ......................... 1,904,919
-----------
NET ASSETS 100%................................................. $115,555,868
- ------------------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
(b) In bankruptcy; Fund has ceased accrual of interest.
(c) Step bond -- coupon increases periodically based upon predetermined
schedule.
(WTS) Warrants.
See notes to financial statements.
72 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
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 $15
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.
1998 PERFORMANCE REVIEW
The long-term tax-exempt market moved sideways during 1998, with yields falling
roughly 25 basis points during the year. In contrast, yields on Treasuries
plummeted, with the 30-year Treasury Bond dropping approximately 90 basis
points. Despite the subdued performance of tax-exempts versus Treasuries, total
returns for tax-exempts were respectable, with most maturities returning between
six and seven percent.
The muted performances of tax-exempts versus Treasuries were the results of
several factors:
- The near-record new issue supply of $284.2 billion, up 29 percent as
compared to 1997, and the highest since 1993. The demand for tax-exempt
income was not sufficient to absorb such a heavy calendar.
- Rate shock, with the five percent yield barrier being a crucial impediment
to both investors and dealers.
- The lure of equity market returns for all investors.
- The extraordinary flight-to-quality rally in the Treasury market during
the second half of the year.
The relative cheapness of tax-exempts versus Treasuries during the year was best
reflected in the increase in tax-exempt/Treasury yield ratios. For example,
long-insured tax-exempts cheapened to 101.3 percent of Treasuries by year-end
versus an average of 93.5 percent for the year and 87 percent during the past
nine years.
Credit quality was a bright spot for the tax-exempt market in 1998. Tax-exempt
credit spreads generally stayed fairly tight over the year, despite the huge
increase in quality spreads in the taxable market. Indeed, the severe damage
that occurred in the taxable markets during the second half of the year was
nearly invisible to the tax-exempt market. Liquidity remained good, and no
discernable widening occurred in bid/offer and credit spreads during the year.
THE ENTERPRISE GROUP OF FUNDS, INC. 73
<PAGE>
The investment focus for the Enterprise Tax-Exempt Income Fund for 1998 was to
increase credit quality and duration and reduce the reinvestment risk of the
fund. During the year the fund's allocation to the insured sector increased to
51.8 percent from 7.9 percent, while the fund's total exposure to the insured
and general obligation sectors was increased to 67.8 percent versus 41.8 percent
a year ago. This increase in credit quality benefited the fund, as the best
performing sectors in the Lehman Brothers Municipal Bond Index were the insured
and general obligation sectors, with a total return of 6.67 percent, followed by
the revenue (6.33 percent) and pre-refunded (5.67 percent) sectors. The fund's
increased exposure to the insured sector came partly at the expense of the
pre-refunded sector (exposure of 0.8 percent at year-end versus 12.5 percent a
year ago) as MBIA sold shorter maturity paper and reinvested into
well-structured insured issues in the longer end of the yield curve. The fund's
reinvestment risk dropped with a decrease in exposure to the volatile housing
sector from 13.1 percent to 5.3 percent. Housing bonds underperformed the market
by 91 basis points during the year. The effective duration of the fund extended
to 7.65 percent at year-end from 6.89 percent a year ago. However, the effective
duration was as long as 8.17 percent at the end of the second quarter. This
longer bias had a positive impact on performance as yields declined, albeit a
relatively modest 25 basis points, during the year.
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C>
Enterprise Tax-Exempt Income Fund - A One Year
With Sales Charge 0.86%
Without Sales Charge 5.92%
Lehman Municipal Bond Index* 6.48%
Lipper General Muni Debt Index* 5.64%
Enterprise Tax-Exempt Income Fund - A
12/31/88 $9,525.96
1989 $10,352.81
1990 $10,943.96
1991 $12,162.02
1992 $13,120.39
1993 $14,532.14
1994 $13,704.68
1995 $15,739.83
1996 $16,297.02
1997 $17,431.29
1998 $18,462.87
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C>
Enterprise Tax-Exempt Income Fund - A Five Year
With Sales Charge 3.89%
Without Sales Charge 4.90%
Lehman Municipal Bond Index* 6.23%
Lipper General Muni Debt Index* 5.70%
Lehman Municipal Bond Index
12/31/88 $10,000.00
1989 $11,078.00
1990 $11,885.59
1991 $13,329.68
1992 $14,505.36
1993 $16,286.62
1994 $15,449.49
1995 $18,146.97
1996 $18,952.70
1997 $20,696.34
1998 $22,037.47
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
Enterprise Tax-Exempt Income Fund - A Ten Year
With Sales Charge 6.32%
Without Sales Charge 6.84%
Lehman Municipal Bond Index* 8.22%
Lipper General Muni Debt Index* 7.75%
Lipper General Muni Debt Index
12/31/88 $10,000.00
1989 $10,995.70
1990 $11,655.33
1991 $13,058.63
1992 $14,220.85
1993 $15,988.50
1994 $15,022.80
1995 $17,623.40
1996 $18,253.96
1997 $19,968.01
1998 $21,094.20
</TABLE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31,
1998
<S> <C> <C> <C>
Enterprise Tax-Exempt Income Fund - B One Year 5/1/95-12/31/98
With Sales Charge 1.33% 5.24%
Without Sales Charge 5.33% 5.95%
Lehman Municipal Bond Index* 6.48% 8.09%
Lipper General Municipal Debt Index* 5.64% 7.66%
Enterprise Tax-Exempt Income Fund - B
5/1/95 $10,000.00 $10,000.00 $10,000.00
1995 $10,718.20 $10,957.45 $10,954.14
1996 $11,036.10 $11,443.96 $11,345.20
1997 $11,738.22 $12,496.80 $12,410.52
1998 $12,064.10 $13,306.59 $13,110.47
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31,
1998
<S> <C>
Enterprise Tax-Exempt Income Fund - B
With Sales Charge
Without Sales Charge
Lehman Municipal Bond Index*
Lipper General Municipal Debt Index*
Lehman Municipal Bond Index
5/1/95
1995
1996
1997
1998
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31,
1998
Enterprise Tax-Exempt Income Fund - B
With Sales Charge
Without Sales Charge
Lehman Municipal Bond Index*
Lipper General Municipal Debt Index*
Lipper General Municipal Debt Index
5/1/95
1995
1996
1997
1998
</TABLE>
74 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C>
Enterprise Tax-Exempt Income Fund - C
With Sales Charge
Without Sales Charge
Lehman Municipal Bond Index*
Lipper General Municipal Debt Index*
Enterprise Tax-Exempt Income Fund - C
5/1/97 $10,000.00
1997 $10,613.60
1998 $11,180.37
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C>
Enterprise Tax-Exempt Income Fund - C One Year
With Sales Charge 4.34%
Without Sales Charge 5.34%
Lehman Municipal Bond Index* 6.48%
Lipper General Municipal Debt Index* 5.64%
Lehman Municipal Bond Index
5/1/97 $10,000.00
1997 $10,855.00
1998 $11,558.40
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
Enterprise Tax-Exempt Income Fund - C 5/1/97-12/31/98
With Sales Charge 6.92%
Without Sales Charge 6.92%
Lehman Municipal Bond Index* 5.64%
Lipper General Municipal Debt Index* 8.58%
Lipper General Municipal Debt Index
5/1/97 $10,000.00
1997 $10,860.40
1998 $11,472.93
</TABLE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIOD ENDING DECEMBER 31, 1998
<S> <C>
Enterprise Tax-Exempt Income Fund-Y
Cumulative Return
Lehman Municipal Bond Index*
Lipper General Municipal Debt Index*
Enterprise Tax-Exempt Income Fund - Y
11/30/98 $10,000.00
1998 $10,018.00
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIOD ENDING DECEMBER 31, 1998
<S> <C>
Enterprise Tax-Exempt Income Fund-Y
Cumulative Return
Lehman Municipal Bond Index*
Lipper General Municipal Debt Index*
Lehman Municipal Bond Index
11/30/98 $10,000.00
1998 $10,025.00
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIOD ENDING DECEMBER 31, 1998
Enterprise Tax-Exempt Income Fund-Y 11/30/98-12/31/98
Cumulative Return 0.18%
Lehman Municipal Bond Index* 0.25%
Lipper General Municipal Debt Index* 0.18%
Lipper General Municipal Debt Index
11/30/98 $10,000.00
1998 $10,018.00
</TABLE>
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
* The Lehman Municipal Bond Index is an unmanaged index. It includes reinvested
interest and excludes any transaction or holding charges. Lipper Inc. is an
independent reporting service that measures the performance of most mutual
funds. The performance results reflect an unmanaged index and are net of all
expenses other than sales charges and redemption fees. One cannot invest
directly in an index.
THE ENTERPRISE GROUP OF FUNDS, INC. 75
<PAGE>
FUTURE INVESTMENT STRATEGY
MBIA believes the U.S. economy will flirt with recession in 1999. The global
economic and political backdrop will cause policymakers to consider tactics
aimed at reflation. Reflationary policies imply a positively sloped yield curve
led by declining short rates. Expect inflationary pressures to be moderate, with
CPI averaging 1.5 to 2 percent. This should result in long-bond yields trading
below 5.65 percent for most of the year.
It is unrealistic to assume a short fix is in order for the American global
trading partners. Economic and political problems in the U.S., Asia, Russia and
Latin America did not happen overnight and solutions to their turmoil should not
be expected to occur at an unrealistic pace. Keep in mind that capital markets'
history teaches us that the financial markets treat recognition of a problem as
part of the solution. The markets react in a discounting fashion to expected
resolutions. We remain convinced of positive outcomes for U.S. financial
markets. There will be bouts, however, of anguish and volatility throughout
1999.
The fund manager expects tax-exempts to remain cheap to Treasuries throughout
1999 as municipal new issue supply is expected to remain relatively high ($215
to $250 billion). Credit quality is also expected to remain good, while
tax-exempt yield volatility will remain muted early in the year. As a result,
MBIA remains positive on the tax-exempt sector and will continue to emphasize
high-quality well-structured paper for the fund.
DEPENDING ON AN INVESTOR'S SPECIFIC SITUATION, INCOME DERIVED FROM THIS FUND
MAY, AT TIMES, BE SUBJECT TO AN ALTERNATIVE MINIMUM TAX, AS WELL AS TAXABLE
CAPITAL GAINS AND INTEREST INCOME PAYMENTS.
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.
76 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE TAX-EXEMPT INCOME FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL BONDS -- 95.45% AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------------
ALABAMA -- 0.92%
- ----------------------------------------------------------------------------------
Alabama Housing Finance Authority Single
Family Mortgage Revenue Home Mortgage Series
A-1 6.55% due 10/01/14........................ $ 250,000 $ 267,752
ARIZONA -- 3.37%
- ----------------------------------------------------------------------------------
Salt River Project, Arizona Agriculture Import
and Power District Electric System Revenue
5.00% due 01/01/30............................ 1,000,000 978,670
CALIFORNIA -- 0.58%
- ----------------------------------------------------------------------------------
California State General Obligation Bonds
6.10% due 09/01/04............................ 150,000 167,205
FLORIDA -- 7.06%
- ----------------------------------------------------------------------------------
Broward County, Broward Recovery Revenue 7.95%
due 12/01/08.................................. 295,000 312,715
Florida State Board Education Capital Outlay
Series C 5.50% due 06/01/23................... 1,500,000 1,554,720
Florida State Board Education Capital Outlay
Series A 7.25% due 06/01/23................... 170,000 180,938
-------------
2,048,373
GEORGIA -- 5.46%
- ----------------------------------------------------------------------------------
Atlanta Downtown Development Authority
Underground Atlanta Project 6.25% due
10/01/12...................................... 500,000 540,545
Municipal Electric Authority Georgia Project
One Subordinated Series A (MBIA Insured) 5.25%
due 01/01/15.................................. 1,000,000 1,044,010
-------------
1,584,555
ILLINOIS -- 10.49%
- ----------------------------------------------------------------------------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------------
Chicago Illinois Sales Tax Revenue (FGIC
Insured) 5.25% due 01/01/20................... $ 1,000,000 $ 1,018,630
Illinois Health Facilities Authority Revenues
Edward Obligated Group Series A (AMBAC
Insured) 5.25% due 02/15/27................... 1,000,000 1,010,450
Illinois Health Facilities Authority Revenues
Sherman Health System (AMBAC Insured) 5.25%
due 08/01/27.................................. 1,000,000 1,012,480
-------------
3,041,560
INDIANA -- 3.54%
- ----------------------------------------------------------------------------------
Indiana Health Facility Hospital Revenue
Sisters of St Francis Health-A (MBIA Insured)
5.375% due 11/01/27........................... 1,000,000 1,025,510
IOWA -- 3.46%
- ----------------------------------------------------------------------------------
Iowa Finance Authority Hospital Facility
Revenue Iowa Health Systems Series A (MBIA
Insured) 5.125% due 01/01/28.................. 1,000,000 1,002,620
LOUISIANA -- 0.52%
- ----------------------------------------------------------------------------------
Louisiana State Offshore Term Authority
Deepwater Port Revenue Series E 7.60% due
09/01/10...................................... 140,000 150,010
MASSACHUSETTS -- 2.81%
- ----------------------------------------------------------------------------------
Massachusetts State Housing Finance Agency
Revenue Residential FNMA Collateral-A 6.90%
due 11/15/24.................................. 750,000 816,420
MICHIGAN -- 3.74%
- ----------------------------------------------------------------------------------
Michigan State Building Authority Revenue
Series I 6.40% due 10/01/04................... 1,000,000 1,083,570
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 77
<PAGE>
ENTERPRISE TAX-EXEMPT INCOME FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------------
NEBRASKA -- 3.68%
- ----------------------------------------------------------------------------------
Nebraska Public Power District Revenue General
Series A (MBIA Insured) 5.25% due 01/01/05.... $ 1,000,000 $ 1,066,350
NEVADA -- 3.19%
- ----------------------------------------------------------------------------------
Clark County School District Series A (MBIA
Insured) 7.00% due 06/01/11................... 750,000 925,755
NEW YORK -- 9.59%
- ----------------------------------------------------------------------------------
New York State Local Government Assistance
7.00% due 04/01/21 (Prerefunded 04/01/01 at
102).......................................... 200,000 217,936
New York State Power Authority Revenue &
General Prerefunded Series CC 5.00% due
01/01/09 (Prerefunded 1/01/03 at 102)......... 1,020,000 1,080,486
Triborough Bridge & Tunnel Authority, New York
General Purpose Series A 6.00% due 01/01/10... 1,300,000 1,481,688
-------------
2,780,110
OHIO -- 3.46%
- ----------------------------------------------------------------------------------
Ohio State Public Facilities Commission Higher
Education Capital Facilities Series II C FSA
4.00% due 06/01/03............................ 1,000,000 1,003,530
OKLAHOMA -- 5.56%
- ----------------------------------------------------------------------------------
Tulsa, Oklahoma General Obligation Bonds 6.30%
due 06/01/17.................................. 1,500,000 1,613,355
OREGON -- 3.48%
- ----------------------------------------------------------------------------------
Clackamas County School District 12 4.00% due
06/01/03...................................... 1,000,000 1,008,380
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------------
TEXAS -- 10.24%
- ----------------------------------------------------------------------------------
Grapevine Colleyville Independent School
District Texas Refunding 4.75% due 08/15/02... $ 500,000 $ 515,400
Houston Texas General Obligation Bonds 6.00%
due 03/01/05.................................. 500,000 527,800
Plano Texas Health Facilities Development
Corporation Texas Health Resources Systems
Series C (MBIA Insured) 5.00% due 02/15/22.... 500,000 488,620
Texas State Department Housing Community
Affairs Home Mortgage Revenue GNMA Collateral
Series A 6.95% due 07/01/23................... 390,000 417,604
Texas Tech University Revenues Refunding &
Improvement Financing Systems 3rd Series
(AMBAC Insured) 5.375% due 02/15/17........... 1,000,000 1,022,100
-------------
2,971,524
UTAH -- 3.48%
- ----------------------------------------------------------------------------------
Utah County Utah Hospital Revenue IHC Health
Services Incorporated (MBIA Insured) 5.25% due
08/15/21...................................... 1,000,000 1,009,980
VIRGINIA -- 3.70%
- ----------------------------------------------------------------------------------
Virginia State Transportation Board Revenue
6.00% due 04/01/10............................ 1,000,000 1,071,970
WASHINGTON -- 7.12%
- ----------------------------------------------------------------------------------
Tacoma, Washington Electric Systems Revenue
(AMBAC Insured) 6.15% due 01/01/08............ 1,000,000 1,070,970
</TABLE>
78 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE TAX-EXEMPT INCOME FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------------
Washington State Health Care Facilities
Swedish Health Services (AMBAC Insured) 5.125%
due 11/15/22.................................. $ 1,000,000 $ 993,910
-------------
2,064,880
-------------
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $26,242,533)..................................... 27,682,079
- ----------------------------------------------------------------------------------
SHORT-TERM TAX-EXEMPT INVESTMENTS -- 2.41%
- ----------------------------------------------------------------------------------
INDIANA -- 1.38%
- ----------------------------------------------------------------------------------
Jasper County Industrial Pollution Control
Revenue Northern Industrial Public Service B
resets 1/04/1999 5.15% (v).................... 400,000 400,000
NEW YORK -- 1.03%
- ----------------------------------------------------------------------------------
New York, New York General Obligaiton Bonds
Series A-4 resets 1/04/1999 5.00% (v)......... 300,000 300,000
-------------
TOTAL SHORT-TERM TAX-EXEMPT INVESTMENTS
(IDENTIFIED COST $700,000)........................................ 700,000
- ----------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $26,942,533)..................................... $ 28,382,079
OTHER ASSETS LESS LIABILITIES -- 2.14%............................ 620,748
-------------
NET ASSETS -- 100%................................................ $ 29,002,827
- ----------------------------------------------------------------------------------
</TABLE>
(v) Variable interest rate demand security; Interest rate is as of December 31,
1998, and is adjusted daily. Maturity date is the later of the next reset
date or next put at par.
AMBAC American Bond Assurance Corp.
FGIC Financial Guaranty Insurance Corp.
MBIA Municipal Bond Insurance Association
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 79
<PAGE>
ENTERPRISE MANAGED FUND
OPCAP ADVISORS, INC.
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 $62 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.
1998 PERFORMANCE REVIEW
1998 was not an especially good year for the Fund. It trailed the S&P 500
because of two main factors: the minimal holdings of technology issues, many of
which had large gains in 1998, and the poor performance of certain of the fund's
investments, including Citigroup, Inc., and Boeing Co. Other major holdings of
the fund, including its three largest holdings -- McDonald's Corp., Time Warner
Inc. and Federal Home Loan Mortgage Corp. (Freddie Mac) -- rose strongly.
While the fund's 1998 results did not live up to expectations, OpCap remains
dedicated to the continued delivery of excellent results over time. OpCap
focuses on individual companies and tries to understand where their businesses
are going over the next several years, not on where the stock market is heading
in the next six months. Simply stated, OpCap wants to invest in superior
businesses that are underpriced in the stock market. A superior business is one
that is extremely well-managed, earns high returns on capital, has a dominant
competitive position to protect those returns and uses the free cash flow
resulting from those returns to create shareholder value, such as through astute
acquisitions or share repurchases.
80 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C>
Enterprise Managed Fund - A One Year 10/1/94-12/31/98
With Sales Charge 1.75% 18.27%
Without Sales Charge 7.05% 19.64%
S&P 500 Index* 28.57% 28.44%
Lipper Flexible Portfolio Fund Index* 16.52% 16.40%
Enterprise Managed Fund - A S&P 500 Index
10/1/94 $9,523.81 $10,000.00
12/31/94 $9,373.33 $9,998.00
1995 $12,905.21 $13,753.25
1996 $15,754.68 $16,904.12
1997 $19,071.03 $22,543.33
1998 $20,414.78 $28,983.96
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C>
Enterprise Managed Fund - A
With Sales Charge
Without Sales Charge
S&P 500 Index*
Lipper Flexible Portfolio Fund Index*
Lipper Flexible Portfolio Fund
Index
10/1/94 $10,000.00
12/31/94 $9,819.00
1995 $12,135.30
1996 $13,846.38
1997 $16,372.65
1998 $19,076.76
</TABLE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C>
Enterprise Managed Fund - B One Year 5/1/95-12/31/98
With Sales Charge 2.31% 17.57%
Without Sales Charge 6.31% 18.10%
S&P 500 Index* 28.57% 29.22%
Lipper Flexible Portfolio Fund Index* 16.52% 17.38%
Enterprise Managed Fund - B S&P 500 Index
5/1/95 $10,000.00 $10,000.00
1995 $11,838.20 $12,162.54
1996 $14,382.90 $14,948.98
1997 $17,324.21 $19,935.95
1998 $18,117.37 $25,631.66
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C>
Enterprise Managed Fund - B
With Sales Charge
Without Sales Charge
S&P 500 Index*
Lipper Flexible Portfolio Fund Index*
Lipper Flexible Portfolio Fund
Index
5/1/95 $10,000.00
1995 $11,455.00
1996 $13,070.27
1997 $15,454.94
1998 $18,007.48
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 81
<PAGE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C> <C>
Enterprise Managed Fund - C One Year
With Sales Charge 4.36%
Without Sales Charge 5.36%
S&P 500 Index* 28.57%
Lipper Flexible Portfolio Fund Index* 25.69%
Enterprise Managed Fund - C S&P 500 Index
5/1/97 10,000.00 10,000.00
1997 11,673.70 12,256.00
1998 12,299.08 15,757.54
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDING DECEMBER 31, 1998
<S> <C>
Enterprise Managed Fund - C 5/1/97-12/31/98
With Sales Charge 13.20%
Without Sales Charge 13.20%
S&P 500 Index* 31.33%
Lipper Flexible Portfolio Fund Index* 29.90%
Lipper Flexible Portfolio Fund
Index
5/1/97 10,000.00
1997 12,310.00
1998 15,472.44
</TABLE>
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIOD ENDING DECEMBER 31, 1998
<S> <C> <C> <C>
One Year 7/31/95-12/31/98
Enterprise Managed Fund - Y 7.20% 17.21%
S&P 500 Index* 28.57% 28.08%
Lipper Flexible Portfolio Fund Index* 16.52% 16.10%
Enterprise Managed Fund - Y S&P 500 Index
7/31/95 $10,000.00 $10,000.00
1995 $10,770.77 $11,067.84
1996 $13,208.20 $13,603.48
1997 $16,061.17 $18,141.60
1998 $17,217.57 $23,324.65
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PERIOD ENDING DECEMBER 31, 1998
<S> <C>
Enterprise Managed Fund - Y
S&P 500 Index*
Lipper Flexible Portfolio Fund Index*
Lipper Flexible Portfolio Fund
Index
7/31/95 $10,000.00
1995 $10,603.00
1996 $12,098.13
1997 $14,305.43
1998 $16,668.12
</TABLE>
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
* The S&P 500 Index is an unmanaged index that includes 500 companies that tend
to be leaders in important industries within the U.S. economy. It includes
reinvested dividends and excludes any transaction or holding charges. Lipper
Inc. is an independent reporting service that measures the performance of most
mutual funds. The performance results reflect an unmanaged index and are net of
all expenses other than sales charges and redemption fees. One cannot invest
directly in an index.
82 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
FUTURE INVESTMENT STRATEGY
OpCap expects U.S. and international economic growth to slow in 1999, and the
fund is positioned to perform well in this environment. The fund owns very few
cyclical stocks that would be hurt by economic weakness. New investments in the
fourth quarter of 1998 were AlliedSignal Inc., a diversified technology and
manufacturing company; News Corporation Ltd., a global media and communications
company; and US West Inc., which provides telecommunications services in the
western and midwestern United States. OpCap believes each should deliver strong
business results in 1999.
US West Inc. exemplifies the fund manager's philosophy of owning quality
companies with excellent prospects. It has been investing in new technologies
and businesses, and those investments should begin to pay off with higher
earnings. This includes the company's new wired-wireless service, the first of
its kind in the United States. The service allows customers to have a single
number for their wired and wireless phones.
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. 83
<PAGE>
ENTERPRISE MANAGED FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
COMMON STOCKS -- 83.97% AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
AEROSPACE -- 3.35%
- ---------------------------------------------------------------------------------
AlliedSignal Inc.................................. 50,200 $ 2,224,488
Boeing Company.................................... 380,500 12,413,812
-------------
14,638,300
BANKING -- 9.84%
- ---------------------------------------------------------------------------------
BankBoston Corporation............................ 270,000 10,513,125
Chase Manhattan Corporation....................... 60,000 4,083,750
M&T Bank Corporation.............................. 18,500 9,600,344
Wells Fargo & Company............................. 472,000 18,850,500
-------------
43,047,719
BROADCASTING -- 8.10%
- ---------------------------------------------------------------------------------
News Corporation Ltd. (ADR)....................... 360,000 8,887,500
Time Warner Inc................................... 427,600 26,537,925
-------------
35,425,425
CHEMICALS -- 8.28%
- ---------------------------------------------------------------------------------
Dow Chemical Company.............................. 79,000 7,184,063
Du Pont (E. I.) De Nemours & Company.............. 301,000 15,971,812
Hercules Inc...................................... 70,600 1,932,675
Monsanto Company.................................. 140,000 6,650,000
Solutia Inc....................................... 200,000 4,475,000
-------------
36,213,550
COMPUTER SOFTWARE -- 1.41%
- ---------------------------------------------------------------------------------
Computer Associates International Inc............. 145,000 6,180,625
CONGLOMERATES -- 4.44%
- ---------------------------------------------------------------------------------
Minnesota Mining & Manufacturing Company.......... 160,000 11,380,000
Tenneco Inc....................................... 68,300 2,326,469
Textron Inc....................................... 75,000 5,695,312
-------------
19,401,781
CONSUMER PRODUCTS -- 1.46%
- ---------------------------------------------------------------------------------
Mattel Inc........................................ 280,000 6,387,500
DRUGS & MEDICAL PRODUCTS -- 0.63%
- ---------------------------------------------------------------------------------
Becton, Dickinson & Company....................... 65,000 2,774,688
ELECTRICAL EQUIPMENT -- 0.95%
- ---------------------------------------------------------------------------------
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
Varian Associates Inc............................. 110,000 4,166,250
FOOD & BEVERAGES & TOBACCO -- 6.65%
- ---------------------------------------------------------------------------------
Diageo (ADR)...................................... 340,000 $ 15,725,000
Philip Morris Companies Inc....................... 250,000 13,375,000
-------------
29,100,000
HOTELS & RESTAURANTS -- 6.33%
- ---------------------------------------------------------------------------------
McDonald's Corporation............................ 361,150 27,673,119
INSURANCE -- 6.04%
- ---------------------------------------------------------------------------------
ACE Ltd........................................... 262,000 9,022,625
EXEL Ltd. (Class A)............................... 231,700 17,377,500
-------------
26,400,125
MACHINERY -- 1.97%
- ---------------------------------------------------------------------------------
Caterpillar Inc................................... 187,100 8,606,600
MANUFACTURING -- 2.91%
- ---------------------------------------------------------------------------------
ITT Industries Inc................................ 320,000 12,720,000
MISC. FINANCIAL SERVICES -- 10.42%
- ---------------------------------------------------------------------------------
Citigroup Inc..................................... 400,000 19,800,000
Freddie Mac....................................... 400,000 25,775,000
-------------
45,575,000
PAPER & FOREST PRODUCTS -- 2.02%
- ---------------------------------------------------------------------------------
Champion International Corporation................ 218,000 8,829,000
PRINTING & PUBLISHING -- 2.09%
- ---------------------------------------------------------------------------------
Donnelley R.R. & Sons Company..................... 200,000 8,762,500
Reed International (ADR).......................... 12,700 400,050
-------------
9,162,550
TELECOMMUNICATIONS -- 5.03%
- ---------------------------------------------------------------------------------
Sprint Corporation................................ 147,000 12,366,375
U S West Inc...................................... 149,300 9,648,512
-------------
22,014,887
TRANSPORTATION -- 2.05%
- ---------------------------------------------------------------------------------
UAL Corporation (a)............................... 150,000 8,953,125
TOTAL COMMON STOCKS
(IDENTIFIED COST $304,771,446)................................... 367,270,244
- ---------------------------------------------------------------------------------
</TABLE>
84 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE MANAGED FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
U.S. TREASURY BONDS -- 2.40%
- ---------------------------------------------------------------------------------
U.S. Treasury Bond 5.50% due 08/15/28............. $ 10,000,000 $ 10,475,000
-------------
TOTAL U.S. TREASURY BONDS
(IDENTIFIED COST $10,677,541).................................... 10,475,000
- ---------------------------------------------------------------------------------
U.S. TREASURY NOTES -- 2.44%
- ---------------------------------------------------------------------------------
U.S. Treasury Note 5.625% due 05/15/08............ 10,000,000 10,671,500
-------------
TOTAL U.S. TREASURY NOTES
(IDENTIFIED COST $10,681,899).................................... 10,671,500
- ---------------------------------------------------------------------------------
COMMERCIAL PAPER -- 7.56%
- ---------------------------------------------------------------------------------
Ford Motor Credit Company 5.38% due 01/06/99...... 15,000,000 14,988,791
General Electric Capital Corporation, 5.51% due
01/25/99.......................................... 10,000,000 9,963,267
Household Finance Corporation 5.38% due
01/19/99.......................................... 8,151,000 8,129,074
-------------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $33,081,132).................................... 33,081,132
- ---------------------------------------------------------------------------------
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 3.44%
- ---------------------------------------------------------------------------------
State Street Bank & Trust Repurchase Agreement,
4.25% due 01/04/99
Collateral: U.S. Treasury Note $14,385,000 5.75%
due 08/15/03
Value $15,338,006................................. $ 15,035,000 $ 15,035,000
-------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $15,035,000).................................... 15,035,000
- ---------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $374,247,018)................................... $ 436,532,876
OTHER ASSETS LESS LIABILITIES -- 0.19%........................... 840,742
-------------
NET ASSETS -- 100%............................................... $ 437,373,618
- ---------------------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
(ADR) American Depository Receipt.
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 85
<PAGE>
ENTERPRISE MONEY MARKET FUND
ENTERPRISE CAPITAL MANAGEMENT, INC.
Atlanta, Georgia
INVESTMENT MANAGEMENT
Enterprise Capital Management, Inc., which provides mutual fund investment
advisory services for The Enterprise Group of Funds, is a member of The MONY
Group Inc. (NYSE:MNY) 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.
1998 PERFORMANCE REVIEW
By year-end 1998, the global financial markets had staged a strong rebound from
their precarious state at the end of September and in the first half of October.
Equity markets bounced back from their lows, credit spreads contracted
appreciably from their mid-October yields, and liquidity largely returned to the
capital markets. These conditions enabled new issue markets for equities and
bonds to become operable once again, since the turmoil had all but shut down
these markets. Even the money market securities market experienced upheaval, as
yields remained high while short-term Treasury rates dropped. Lower-rated money
market credits traded at historically wide spreads.
The return to more settled conditions was due in no small part to the Fed's
recognition, whether or not in concert with other central banks, of the serious
need to address the global economic and currency problems through a shift to a
program of easing monetary policy. As well, the Fed believed it prudent to
undertake its easing stance given the potential for non-domestic pressures to
spill over into the U.S. economy's performance which managed by itself clearly
did not justify such a shift in Fed policy.
In this environment the Fund was managed during 1998 to react quickly to the
change of investor expectations. Short maturity investments allowed flexibility,
while some longer maturity investments locked in yields.
86 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
FUTURE INVESTMENT STRATEGY
Presently, there are many crosscurrents at work as the Fed weighs an economy
with robust domestic demand, surging stock market, softening dollar, tightening
credit spreads, quiescent inflation, and a weak manufacturing sector against a
backdrop of potentially worrisome global financial conditions. Absent an
exogenous shock to the system, such a picture argues for a wait-and-see stance
by the Fed.
Going forward, the average maturity of the Fund will be adjusted selectively to
capitalize on opportunities where the Fund will be rewarded for duration
extension. Currently, there is no benefit afforded money market investors for
extending much beyond the 30-day area. Consequently, the Enterprise Money Market
Fund is maintaining a shorter-than-target average maturity. At year-end, the
average maturity of the Fund was approximately 28.8 days. The 30-day and
seven-day current yields of the fund were each 4.97 percent as of year-end.
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. 87
<PAGE>
ENTERPRISE MONEY MARKET FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
COMMERCIAL PAPER -- 93.39% AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
American Crystal Sugar 5.30% due 01/29/99......... $1,500,000 $ 1,493,817
American Express Credit Corporation, 4.80% due
02/01/99.......................................... 2,400,000 2,390,080
Ameritech Capital Funding Corporation, 5.50% due
01/22/99.......................................... 4,200,000 4,186,525
Asset Backed Securities Investment Trust Series
1997 - E, 5.54% due 01/15/99...................... 1,000,000 1,000,000
Associates Corporation of North America, 4.95% due
04/22/99.......................................... 2,000,000 1,969,475
Avco Financial Services Canada 5.30% due
03/01/99.......................................... 4,000,000 3,965,256
Avco Financial Services Canada 5.35% due
03/15/99.......................................... 1,000,000 989,151
Avco Financial Services Canada 5.40% due
02/08/99.......................................... 1,000,000 994,300
Bank of New York 5.26% due 02/05/99............... 3,000,000 2,984,658
Bank of Nova Scotia 5.40% due 01/19/99............ 3,000,000 2,991,900
Bank One Cleveland, N.A. 5.71% due 03/01/17....... 2,200,000 2,200,000
Chevron Oil Finance Company 5.25% due 01/13/99.... 5,000,000 4,991,250
Ciesco LP 5.08% due 01/21/99...................... 6,000,000 5,983,067
CIT Group Holdings Inc. 5.33% due 01/28/99........ 1,500,000 1,494,004
Coca Cola Enterprises Inc. 5.20% due 02/02/99..... 4,875,000 4,852,467
Coca Cola Enterprises Inc. 5.50% due 01/28/99..... 1,300,000 1,294,638
Commercial Credit Company 5.17% due 01/26/99...... 2,500,000 2,491,024
Conagra Inc. 5.80% due 01/08/99................... 500,000 499,436
Edison Asset Securitization 5.40% due 01/29/99.... 6,000,000 5,974,800
Enterprise Funding Corporation 5.35% due
01/15/99.......................................... 2,769,000 2,763,239
Enterprise Funding Corporation 5.42% due
01/19/99.......................................... 1,500,000 1,495,935
Ford Motor Canada 5.17% due 01/22/99.............. 4,500,000 4,486,429
General Electric Capital Corporation, 5.00% due
01/13/99.......................................... 500,000 499,167
General Electric Capital Corporation, 5.17% due
01/15/99.......................................... 2,000,000 1,995,979
General Electric Capital Corporation, 5.50% due
01/29/99.......................................... 1,000,000 995,722
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
General Motors Acceptance Corporation, 5.04% due
01/04/99.......................................... $1,000,000 $ 999,580
General Motors Acceptance Corporation, 5.31% due
01/20/99.......................................... 3,000,000 2,991,593
Goldman Sachs Group 5.34% due 01/15/99............ 4,000,000 4,000,000
Goldman Sachs Group 5.40% due 01/08/99............ 2,600,000 2,597,270
Heller Financial Inc. 5.52% due 01/12/99.......... 3,000,000 2,994,940
Heller Financial Inc. 5.52% due 01/22/99.......... 4,000,000 3,987,120
Household Finance Canada 5.17% due 01/21/99....... 4,000,000 3,988,511
Household International Corporation, 5.45% due
01/08/99.......................................... 1,000,000 998,940
Houston Industries Finance Company, 6.05% due
01/06/99.......................................... 1,000,000 999,160
JHM Funding Incorporated 5.40% due 01/29/99....... 4,876,000 4,855,521
Lehman Brothers Inc. 5.60% due 01/29/99........... 7,400,000 7,367,769
Merrill Lynch & Company Inc. 5.19% due 01/26/99... 2,500,000 2,490,990
Merrill Lynch & Company Inc. 5.27% due 01/27/99... 2,000,000 1,992,388
Norfolk Southern Corporation 6.15% due 01/04/99... 1,400,000 1,399,283
Paccar Financial Corporation 5.40% due 01/04/99... 6,000,000 5,997,300
Panasonic Finance Inc. 5.13% due 01/26/99......... 3,000,000 2,989,313
Republic New York Corporation Discount, 5.02% due
03/01/99.......................................... 4,200,000 4,165,446
Sanwa Business Credit Corporation, 5.45% due
01/22/99.......................................... 4,000,000 3,987,283
Sears Roebuck Acceptance Corporation, 5.33% due
01/15/99.......................................... 1,000,000 997,927
Sears Roebuck Acceptance Corporation, 5.36% due
01/21/99.......................................... 3,000,000 2,991,067
Sears Roebuck Acceptance Corporation, 5.50% due
01/19/99.......................................... 3,000,000 2,991,750
Syndicated Loan Funding Trust 6.04% due
01/15/99.......................................... 3,000,000 3,000,000
Textron Financial 6.10% due 01/06/99.............. 1,500,000 1,498,729
Transamerica Financial Canada 5.23% due
01/25/99.......................................... 4,500,000 4,484,310
Transamerica Financial Canada 5.37% due
01/11/99.......................................... 2,500,000 2,496,271
</TABLE>
88 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE MONEY MARKET FUND -- (Continued)
- --------------------------------------------------------------------------------
Portfolio of Investments
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES
OR PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ------------------------------------------------------------------------------
Xerox Credit Corporation 5.25% due 01/12/99....... $6,000,000 $ 5,990,375
-----------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $148,235,151).................................. 148,235,151
- ------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT -- 3.78%
- ------------------------------------------------------------------------------
Bank of Nova Scotia 5.74% due 05/07/99............ 3,000,000 2,999,808
Union Bank Treasury Division 5.50% due 01/20/99... 3,000,000 3,000,000
-----------
TOTAL CERTIFICATES OF DEPOSIT
(IDENTIFIED COST $5,999,808).................................... 5,999,808
- ------------------------------------------------------------------------------
SHORT-TERM GOVERNMENT SECURITIES -- 2.64%
- ------------------------------------------------------------------------------
Federal Home Loan Banks 5.00% due 10/27/99........ 4,000,000 4,000,000
Freddie Mac Discount Notes 5.09% due 01/14/99..... 100,000 99,816
Freddie Mac Discount Notes 5.10% due 01/12/99..... 100,000 99,844
-----------
TOTAL SHORT-TERM GOVERNMENT SECURITIES
(IDENTIFIED COST $4,199,660).................................... 4,199,660
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $158,434,619).................................. $158,434,619
OTHER ASSETS LESS LIABILITIES -- 0.19%.......................... 295,347
-----------
NET ASSETS -- 100%.............................................. $158,729,966
- ------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 89
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH CAPITAL
AND INCOME EQUITY INCOME APPRECIATION
GROWTH FUND EQUITY FUND FUND FUND FUND
---------------- ------------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------------------------------------
Investments at value $ 1,469,030,081 $ 17,956,049 $ 61,344,184 $ 152,781,588 $ 150,394,712
- --------------------------------------------------------------------------------------------------------------
Foreign currency at value
(cost-$1,285,825 and
$59,377) -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------
Receivable for fund shares
sold 10,514,237 53,481 429,053 193,421 788,655
- --------------------------------------------------------------------------------------------------------------
Receivable for investments
sold -- 101,520 72,682 -- --
- --------------------------------------------------------------------------------------------------------------
Dividends and interest
receivable 707,209 14,764 32,682 216,852 46,205
- --------------------------------------------------------------------------------------------------------------
Due from investment adviser -- 14,798 17,109 -- --
- --------------------------------------------------------------------------------------------------------------
Forward currency contracts
(net) receivable -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------
Cash and other assets 45,637 43,043 13,438 64,531 16,137
- --------------------------------------------------------------------------------------------------------------
Total assets $ 1,480,297,164 $ 18,183,655 $ 61,909,148 $ 153,256,392 $ 151,245,709
- --------------------------------------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------------------------------------
Payable for fund shares
redeemed 1,300,545 23,211 29,857 173,103 123,952
- --------------------------------------------------------------------------------------------------------------
Payable for investments
purchased 8,819,800 1,037,480 236,461 1,977,163 3,375,613
- --------------------------------------------------------------------------------------------------------------
Dividends and distributions
payable -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------
Investment advisory fees
payable 872,011 10,232 36,631 93,363 84,891
- --------------------------------------------------------------------------------------------------------------
Distribution fees payable 750,009 10,522 26,556 73,665 57,378
- --------------------------------------------------------------------------------------------------------------
Accrued expenses and other
liabilities 681,031 69,544 60,803 105,788 92,150
- --------------------------------------------------------------------------------------------------------------
Total liabilities $ 12,423,396 $ 1,150,989 $ 390,308 $ 2,423,082 $ 3,733,984
- --------------------------------------------------------------------------------------------------------------
NET ASSETS $ 1,467,873,768 $ 17,032,666 $ 61,518,840 $ 150,833,310 $ 147,511,725
- --------------------------------------------------------------------------------------------------------------
ANALYSIS OF NET ASSETS
- --------------------------------------------------------------------------------------------------------------
Paid-in capital 1,081,589,933 16,099,210 49,991,308 114,781,365 91,520,373
- --------------------------------------------------------------------------------------------------------------
Undistributed net investment
income (loss) (7,753,555) (3,422) 1,278 70,719 (1,342,438)
- --------------------------------------------------------------------------------------------------------------
Accumulated net realized gain
(loss) on investments (15,103,832) 84,408 1,407 871,334 (3,194,734)
- --------------------------------------------------------------------------------------------------------------
Accumulated net realized gain
(loss) on futures -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------
Unrealized appreciation
(depreciation) on investments
and foreign currency
denominated amounts 409,141,222 852,470 11,524,847 35,109,892 60,528,524
- --------------------------------------------------------------------------------------------------------------
Net assets $ 1,467,873,768 $ 17,032,666 $ 61,518,840 $ 150,833,310 $ 147,511,725
- --------------------------------------------------------------------------------------------------------------
CLASS A: NET ASSETS $ 827,567,226 $ 6,740,895 $ 16,664,261 $ 111,274,606 $ 131,604,967
- --------------------------------------------------------------------------------------------------------------
Shares outstanding 39,279,626 1,041,720 574,389 4,138,708 3,410,132
- --------------------------------------------------------------------------------------------------------------
Net asset value and redemption
price per share $21.07 $6.47 $29.01 $26.89 $38.59
- --------------------------------------------------------------------------------------------------------------
Sales charge per share $1.05 $0.32 $1.45 $1.34 $1.92
- --------------------------------------------------------------------------------------------------------------
Maximum offering price per
share, including sales charge
of 4.75% $22.12 $6.79 $30.46 $28.23 $40.51
- --------------------------------------------------------------------------------------------------------------
CLASS B : NET ASSETS $ 446,472,930 $ 8,731,197 $ 21,890,475 $ 33,806,809 $ 14,663,236
- --------------------------------------------------------------------------------------------------------------
Shares outstanding 21,650,929 1,357,791 757,479 1,272,483 390,970
- --------------------------------------------------------------------------------------------------------------
Net asset value and offering
price per share $20.62 $6.43 $28.90 $26.57 $37.50
- --------------------------------------------------------------------------------------------------------------
CLASS C : NET ASSETS $ 133,194,151 $ 1,503,982 $ 4,654,429 $ 5,639,397 $ 1,039,961
- --------------------------------------------------------------------------------------------------------------
Shares outstanding 6,381,815 233,706 161,018 211,193 27,190
- --------------------------------------------------------------------------------------------------------------
Net asset value and offering
price per share $20.87 $6.44 $28.91 $26.70 $38.25
- --------------------------------------------------------------------------------------------------------------
CLASS Y : NET ASSETS $ 60,639,461 $ 56,592 $ 18,309,675 $ 112,498 $ 203,561
- --------------------------------------------------------------------------------------------------------------
Shares outstanding 2,832,109 8,797 628,524 4,187 5,248
- --------------------------------------------------------------------------------------------------------------
Net asset value, offering and
redemption price per share $21.41 $6.43 $29.13 $26.87 $38.79
- --------------------------------------------------------------------------------------------------------------
INVESTMENTS AT COST $ 1,059,888,859 $ 17,103,579 $ 49,819,337 $ 117,671,696 $ 89,866,188
- --------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
90 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
<TABLE>
<CAPTION>
GLOBAL
SMALL SMALL FINANCIAL GOVERNMENT
COMPANY COMPANY VALUE INTERNATIONAL SERVICES SECURITIES HIGH-YIELD
GROWTH FUND FUND GROWTH FUND FUND FUND BOND FUND
------------- -------------- ------------- ------------ -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------------------------------------------------
Investments at value $ 28,588,415 $ 156,499,386 $ 73,022,458 $8,338,881 $ 108,521,364 $ 113,650,949
- --------------------------------------------------------------------------------------------------------------------------
Foreign currency at value
(cost-$1,285,825 and
$59,377) -- -- 1,300,794 59,747 -- --
- --------------------------------------------------------------------------------------------------------------------------
Receivable for fund shares
sold 108,324 1,506,643 209,809 26,588 259,232 227,097
- --------------------------------------------------------------------------------------------------------------------------
Receivable for investments
sold 461,782 -- 16,783 -- -- --
- --------------------------------------------------------------------------------------------------------------------------
Dividends and interest
receivable 3,674 99,385 148,132 12,956 672,864 2,283,764
- --------------------------------------------------------------------------------------------------------------------------
Due from investment adviser 22,173 9,153 3,443 42,490 15,420 9,534
- --------------------------------------------------------------------------------------------------------------------------
Forward currency contracts
(net) receivable -- -- 39,171 1,132 -- --
- --------------------------------------------------------------------------------------------------------------------------
Cash and other assets 11,519 17,115 14,904 33,692 14,437 13,966
- --------------------------------------------------------------------------------------------------------------------------
Total assets $ 29,195,887 $ 158,131,682 $ 74,755,494 $ 8,515,486 $ 109,483,317 $ 116,185,310
- --------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------------------------------------------------
Payable for fund shares
redeemed 27,346 1,172,498 177,162 823 122,119 283,545
- --------------------------------------------------------------------------------------------------------------------------
Payable for investments
purchased 559,040 305,541 47,187 105,423 -- --
- --------------------------------------------------------------------------------------------------------------------------
Dividends and distributions
payable -- -- -- -- 74,423 141,289
- --------------------------------------------------------------------------------------------------------------------------
Investment advisory fees
payable 22,516 94,376 51,151 5,616 55,426 59,043
- --------------------------------------------------------------------------------------------------------------------------
Distribution fees payable 11,622 90,003 30,590 1,281 52,702 62,682
- --------------------------------------------------------------------------------------------------------------------------
Accrued expenses and other
liabilities 56,041 157,297 106,752 38,340 66,089 82,883
- --------------------------------------------------------------------------------------------------------------------------
Total liabilities $ 676,565 $ 1,819,715 $ 412,842 $ 151,483 $ 370,759 $ 629,442
- --------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 28,519,322 $ 156,311,967 $ 74,342,652 $ 8,364,003 $ 109,112,558 $ 115,555,868
- --------------------------------------------------------------------------------------------------------------------------
ANALYSIS OF NET ASSETS
- --------------------------------------------------------------------------------------------------------------------------
Paid-in capital 27,516,556 147,800,744 64,196,653 7,191,623 112,479,065 120,404,737
- --------------------------------------------------------------------------------------------------------------------------
Undistributed net investment
income (loss) (348,252) (739,317) 13,581 7,863 -- 12
- --------------------------------------------------------------------------------------------------------------------------
Accumulated net realized gain
(loss) on investments (5,045,493) 1,247,492 369,955 316 (3,991,896) 114,533
- --------------------------------------------------------------------------------------------------------------------------
Accumulated net realized gain
(loss) on futures -- -- -- -- -- (62,305)
- --------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation
(depreciation) on investments
and foreign currency
denominated amounts 6,396,511 8,003,048 9,762,463 1,164,201 625,389 (4,901,109)
- --------------------------------------------------------------------------------------------------------------------------
Net assets $ 28,519,322 $ 156,311,967 $ 74,342,652 $ 8,364,003 $ 109,112,558 $ 115,555,868
- --------------------------------------------------------------------------------------------------------------------------
CLASS A: NET ASSETS $ 8,194,493 $ 79,867,579 $ 41,458,039 $ 1,426,281 $ 71,609,403 $ 72,636,908
- --------------------------------------------------------------------------------------------------------------------------
Shares outstanding 365,227 10,081,778 2,194,602 235,885 5,896,061 6,302,320
- --------------------------------------------------------------------------------------------------------------------------
Net asset value and redemption
price per share $22.44 $7.92 $18.89 $6.05 $12.15 $11.53
- --------------------------------------------------------------------------------------------------------------------------
Sales charge per share $1.12 $0.39 $0.94 $0.30 $0.61 $0.57
- --------------------------------------------------------------------------------------------------------------------------
Maximum offering price per
share, including sales charge
of 4.75% $23.56 $8.31 $19.83 $6.35 $12.76 $12.10
- --------------------------------------------------------------------------------------------------------------------------
CLASS B : NET ASSETS $ 8,759,560 $ 61,929,341 $ 16,007,394 $ 1,022,356 $ 27,133,777 $ 35,495,217
- --------------------------------------------------------------------------------------------------------------------------
Shares outstanding 395,771 7,997,909 859,679 169,647 2,235,436 3,080,313
- --------------------------------------------------------------------------------------------------------------------------
Net asset value and offering
price per share $22.13 $7.74 $18.62 $6.03 $12.14 $11.52
- --------------------------------------------------------------------------------------------------------------------------
CLASS C : NET ASSETS $ 2,481,164 $ 14,238,508 $ 3,498,291 $ 217,936 $ 3,088,857 $ 5,391,870
- --------------------------------------------------------------------------------------------------------------------------
Shares outstanding 111,708 1,802,611 186,364 36,167 254,390 467,798
- --------------------------------------------------------------------------------------------------------------------------
Net asset value and offering
price per share $22.21 $7.90 $18.77 $6.03 $12.14 $11.53
- --------------------------------------------------------------------------------------------------------------------------
CLASS Y : NET ASSETS $ 9,084,105 $ 276,539 $ 13,378,928 $ 5,697,430 $ 7,280,521 $ 2,031,873
- --------------------------------------------------------------------------------------------------------------------------
Shares outstanding 402,788 34,308 708,491 942,373 599,717 176,496
- --------------------------------------------------------------------------------------------------------------------------
Net asset value, offering and
redemption price per share $22.55 $8.06 $18.88 $6.05 $12.14 $11.51
- --------------------------------------------------------------------------------------------------------------------------
INVESTMENTS AT COST $ 22,191,904 $ 148,496,338 $ 63,318,780 $ 7,176,203 $ 107,895,975 $ 118,552,058
- --------------------------------------------------------------------------------------------------------------------------
<CAPTION>
TAX-EXEMPT MONEY MARKET
INCOME FUND MANAGED FUND FUND
------------- -------------- --------------
<S> <C> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------------------
Investments at value $ 28,382,079 $ 436,532,876 $ 158,434,619
- ------------------------------------------------------------------------------------------------------------
Foreign currency at value
(cost-$1,285,825 and
$59,377) -- -- --
- --------------------------------------------------------------------------------------------------------------------------
Receivable for fund shares
sold 170,361 787,178 1,603,767
- --------------------------------------------------------------------------------------------------------------------------
Receivable for investments
sold -- 1,024,928 --
- --------------------------------------------------------------------------------------------------------------------------
Dividends and interest
receivable 436,495 610,861 232,104
- --------------------------------------------------------------------------------------------------------------------------
Due from investment adviser 5,487 -- --
- --------------------------------------------------------------------------------------------------------------------------
Forward currency contracts
(net) receivable -- -- --
- --------------------------------------------------------------------------------------------------------------------------
Cash and other assets 78,992 32,924 452,033
- --------------------------------------------------------------------------------------------------------------------------
Total assets $ 29,073,414 $ 438,988,767 $ 160,722,523
- --------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------------------------------------------------
Payable for fund shares
redeemed 947 883,164 1,851,055
- --------------------------------------------------------------------------------------------------------------------------
Payable for investments
purchased -- -- --
- --------------------------------------------------------------------------------------------------------------------------
Dividends and distributions
payable 19,780 -- 10,549
- --------------------------------------------------------------------------------------------------------------------------
Investment advisory fees
payable 12,268 273,370 44,356
- --------------------------------------------------------------------------------------------------------------------------
Distribution fees payable 13,411 209,267 --
- --------------------------------------------------------------------------------------------------------------------------
Accrued expenses and other
liabilities 24,181 249,348 86,597
- --------------------------------------------------------------------------------------------------------------------------
Total liabilities $ 70,587 $ 1,615,149 $ 1,992,557
- --------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 29,002,827 $ 437,373,618 $ 158,729,966
- --------------------------------------------------------------------------------------------------------------------------
ANALYSIS OF NET ASSETS
- --------------------------------------------------------------------------------------------------------------------------
Paid-in capital 27,456,825 369,924,024 158,729,966
- --------------------------------------------------------------------------------------------------------------------------
Undistributed net investment
income (loss) -- (6,227) --
- --------------------------------------------------------------------------------------------------------------------------
Accumulated net realized gain
(loss) on investments 106,456 5,169,963 --
- --------------------------------------------------------------------------------------------------------------------------
Accumulated net realized gain
(loss) on futures -- -- --
- --------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation
(depreciation) on investments
and foreign currency
denominated amounts 1,439,546 62,285,858 --
- --------------------------------------------------------------------------------------------------------------------------
Net assets $ 29,002,827 $ 437,373,618 $ 158,729,966
- --------------------------------------------------------------------------------------------------------------------------
CLASS A: NET ASSETS $ 23,709,484 $ 175,083,644 $ 140,490,150
- --------------------------------------------------------------------------------------------------------------------------
Shares outstanding 1,712,806 18,914,704 140,490,150
- --------------------------------------------------------------------------------------------------------------------------
Net asset value and redemption
price per share $13.84 $9.26 $1.00
- --------------------------------------------------------------------------------------------------------------------------
Sales charge per share $0.69 $0.46 --
- --------------------------------------------------------------------------------------------------------------------------
Maximum offering price per
share, including sales charge
of 4.75% $14.53 $9.72 $1.00
- --------------------------------------------------------------------------------------------------------------------------
CLASS B : NET ASSETS $ 4,450,523 $ 161,552,271 $ 10,147,261
- --------------------------------------------------------------------------------------------------------------------------
Shares outstanding 321,631 17,626,832 10,147,261
- --------------------------------------------------------------------------------------------------------------------------
Net asset value and offering
price per share $13.84 $9.17 $1.00
- --------------------------------------------------------------------------------------------------------------------------
CLASS C : NET ASSETS $ 777,408 $ 11,653,660 $ 4,680,248
- --------------------------------------------------------------------------------------------------------------------------
Shares outstanding 56,161 1,281,367 4,680,248
- --------------------------------------------------------------------------------------------------------------------------
Net asset value and offering
price per share $13.84 $9.09 $1.00
- --------------------------------------------------------------------------------------------------------------------------
CLASS Y : NET ASSETS $ 65,412 $ 89,084,043 $ 3,412,307
- --------------------------------------------------------------------------------------------------------------------------
Shares outstanding 4,727 9,633,554 3,412,307
- --------------------------------------------------------------------------------------------------------------------------
Net asset value, offering and
redemption price per share $13.84 $9.25 $1.00
- --------------------------------------------------------------------------------------------------------------------------
INVESTMENTS AT COST $ 26,942,533 $ 374,247,018 $ 158,434,619
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 91
<PAGE>
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
For the Year Ended December 31, 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 $ 7,117,485(1) $125,906(1) $ 492,976(1) $ 2,971,442(1) $ 329,441(1)
- -----------------------------------------------------------------------------------------------------
Interest 2,222,178 102,376 295,113 909,210 314,761
- -----------------------------------------------------------------------------------------------------
Total 9,339,663 228,282 788,089 3,880,652 644,202
- -----------------------------------------------------------------------------------------------------
EXPENSES:
- -----------------------------------------------------------------------------------------------------
Investment Advisory fees 7,776,795 77,640 309,113 1,030,099 944,606
- -----------------------------------------------------------------------------------------------------
Distribution fees, Class A 2,788,550 21,880 46,300 478,504 517,829
- -----------------------------------------------------------------------------------------------------
Distribution fees, Class B 2,865,025 46,707 112,242 269,764 103,259
- -----------------------------------------------------------------------------------------------------
Distribution fees, Class C 729,161 8,123 26,078 39,311 4,392
- -----------------------------------------------------------------------------------------------------
Transfer agent fees 1,941,096 88,432 158,466 329,713 274,758
- -----------------------------------------------------------------------------------------------------
Custodian and accounting
fees 170,715 30,918 53,461 65,841 48,571
- -----------------------------------------------------------------------------------------------------
Audit and legal fees 71,451 14,176 24,772 18,795 17,765
- -----------------------------------------------------------------------------------------------------
Reports to shareholders 355,086 (8,107) 7,648 46,905 30,837
- -----------------------------------------------------------------------------------------------------
Registration fees 115,453 23,465 39,137 30,100 27,386
- -----------------------------------------------------------------------------------------------------
Directors' fees 4,825 4,821 5,165 4,825 4,825
- -----------------------------------------------------------------------------------------------------
Other expenses 258,840 4,817 13,516 18,053 6,272
- -----------------------------------------------------------------------------------------------------
Total expenses 17,076,997 312,872 795,898 2,331,910 1,980,500
- -----------------------------------------------------------------------------------------------------
Less: Expense
reimbursement -- (117,115) (178,665) (102,250) --
- -----------------------------------------------------------------------------------------------------
Total expenses, net of
reimbursement 17,076,997 195,757 617,233 2,229,660 1,980,500
- -----------------------------------------------------------------------------------------------------
Net investment income (loss) (7,737,334) 32,525 170,856 1,650,992 (1,336,298)
- -----------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
- -----------------------------------------------------------------------------------------------------
Net realized gain (loss) on
security transactions 48,382,838 174,726 474,045 9,777,817 19,025,360
- -----------------------------------------------------------------------------------------------------
Net realized loss on foreign
currency transactions -- -- -- -- --
- -----------------------------------------------------------------------------------------------------
Net change in unrealized
gain (loss) on investments
and foreign currency
related transactions 242,454,975 477,834 5,535,514 2,185,780 16,876,956
- -----------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS 290,837,813 652,560 6,009,559 11,963,597 35,902,316
- -----------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS $283,100,479 $685,085 $6,180,415 $13,614,589 $34,566,018
- -----------------------------------------------------------------------------------------------------
</TABLE>
(1) Net of foreign taxes withheld of $35,922 for Growth, $625 for Equity, $3,949
for Growth and Income, $10,791 for Equity Income, $2,654 for Capital
Appreciation, $222 for Small Company Growth, $178,151 for International
Growth, $603 for Global Financial Services, $803 for High-Yield Bond, and
$20,192 for Managed.
See notes to financial statements.
92 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
<TABLE>
<CAPTION>
SMALL GLOBAL
COMPANY SMALL FINANCIAL GOVERNMENT
GROWTH COMPANY INTERNATIONAL SERVICES SECURITIES HIGH-YIELD
FUND VALUE FUND GROWTH FUND FUND FUND BOND FUND
--------- ---------- ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
10/1/98
THROUGH
INVESTMENT INCOME: 12/31/98
- -----------------------------------------------------------------------------------------------------------------------
Dividends $ 39,855(1) $ 991,182 $ 1,391,932(1) $ 26,904(1) $ -- $ 21,696(1)
- -----------------------------------------------------------------------------------------------------------------------
Interest 62,230 643,067 157,479 4,910 6,734,281 9,368,965
- -----------------------------------------------------------------------------------------------------------------------
Total 102,085 1,634,249 1,549,411 31,814 6,734,281 9,390,661
- -----------------------------------------------------------------------------------------------------------------------
EXPENSES:
- -----------------------------------------------------------------------------------------------------------------------
Investment Advisory fees 247,872 893,406 574,799 14,156 585,666 623,478
- -----------------------------------------------------------------------------------------------------------------------
Distribution fees, Class A 31,625 303,832 181,304 832 312,335 318,106
- -----------------------------------------------------------------------------------------------------------------------
Distribution fees, Class B 55,032 435,983 128,991 1,090 187,417 283,545
- -----------------------------------------------------------------------------------------------------------------------
Distribution fees, Class C 16,660 77,537 21,388 378 16,815 37,572
- -----------------------------------------------------------------------------------------------------------------------
Transfer agent fees 141,315 557,693 243,856 26,460 196,109 238,910
- -----------------------------------------------------------------------------------------------------------------------
Custodian and accounting
fees 61,827 76,301 231,301 16,045 53,538 78,896
- -----------------------------------------------------------------------------------------------------------------------
Audit and legal fees 24,724 19,444 14,428 17,933 17,024 17,045
- -----------------------------------------------------------------------------------------------------------------------
Reports to shareholders 17,271 39,900 17,676 753 15,468 16,187
- -----------------------------------------------------------------------------------------------------------------------
Registration fees 37,627 38,575 27,698 10,081 28,201 32,033
- -----------------------------------------------------------------------------------------------------------------------
Directors' fees 5,165 4,825 4,825 1,136 4,825 4,825
- -----------------------------------------------------------------------------------------------------------------------
Other expenses 7,657 45,981 6,875 1,797 9,168 18,839
- -----------------------------------------------------------------------------------------------------------------------
Total expenses 646,775 2,493,477 1,453,141 90,661 1,426,566 1,669,436
- -----------------------------------------------------------------------------------------------------------------------
Less: Expense
reimbursement (196,438) (126,994) (73,295) (66,710) (80,305) (146,963)
- -----------------------------------------------------------------------------------------------------------------------
Total expenses, net of
reimbursement 450,337 2,366,483 1,379,846 23,951 1,346,261 1,522,473
- -----------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (348,252) (732,234) 169,565 7,863 5,388,020 7,868,188
- -----------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
- -----------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
security transactions (4,822,173) 4,934,895 4,448,094 21,597 73,735 1,471,176
- -----------------------------------------------------------------------------------------------------------------------
Net realized loss on foreign
currency transactions -- -- (2,917,969) (21,281) -- --
- -----------------------------------------------------------------------------------------------------------------------
Net change in unrealized
gain (loss) on investments
and foreign currency
related transactions 4,125,149 (888,315) 6,756,237 1,164,201 754,081 (7,542,908)
- -----------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS (697,024) 4,046,580 8,286,362 1,164,517 827,816 (6,071,732)
- -----------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS $(1,045,276) $3,314,346 $ 8,455,927 $1,172,380 $6,215,836 $1,796,456
- -----------------------------------------------------------------------------------------------------------------------
<CAPTION>
MONEY
TAX-EXEMPT MANAGED MARKET
INCOME FUND FUND FUND
----------- ----------- ----------
<S> <C><C> <C> <C>
INVESTMENT INCOME:
- --------------------------------------------------------------------------------------------
Dividends $ -- $ 4,964,046(1) $ --
- --------------------------------------------------------------------------------------------------------
Interest 1,497,257 3,569,842 6,117,373
- --------------------------------------------------------------------------------------------------------------------
Total 1,497,257 8,533,888 6,117,373
- -----------------------------------------------------------------------------------------------------------------------
EXPENSES:
- -----------------------------------------------------------------------------------------------------------------------
Investment Advisory fees 138,737 3,103,061 385,510
- -----------------------------------------------------------------------------------------------------------------------
Distribution fees, Class A 107,181 786,377 --
- -----------------------------------------------------------------------------------------------------------------------
Distribution fees, Class B 34,734 1,413,691 --
- -----------------------------------------------------------------------------------------------------------------------
Distribution fees, Class C 4,491 85,063 --
- -----------------------------------------------------------------------------------------------------------------------
Transfer agent fees 51,511 907,266 164,996
- -----------------------------------------------------------------------------------------------------------------------
Custodian and accounting
fees 35,581 90,047 50,638
- -----------------------------------------------------------------------------------------------------------------------
Audit and legal fees 10,951 35,083 16,603
- -----------------------------------------------------------------------------------------------------------------------
Reports to shareholders (6,817) 95,857 26,246
- -----------------------------------------------------------------------------------------------------------------------
Registration fees 27,161 39,561 33,197
- -----------------------------------------------------------------------------------------------------------------------
Directors' fees 4,825 4,825 4,825
- -----------------------------------------------------------------------------------------------------------------------
Other expenses 1,404 52,181 26,286
- -----------------------------------------------------------------------------------------------------------------------
Total expenses 409,759 6,613,012 708,301
- -----------------------------------------------------------------------------------------------------------------------
Less: Expense
reimbursement (82,991) -- --
- -----------------------------------------------------------------------------------------------------------------------
Total expenses, net of
reimbursement 326,768 6,613,012 708,301
- -----------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 1,170,489 1,920,876 5,409,072
- -----------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
- -----------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
security transactions 746,552 30,494,153 --
- -----------------------------------------------------------------------------------------------------------------------
Net realized loss on foreign
currency transactions -- -- --
- -----------------------------------------------------------------------------------------------------------------------
Net change in unrealized
gain (loss) on investments
and foreign currency
related transactions (320,248) (10,504,129) --
- -----------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS 426,304 19,990,024 --
- -----------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS $ 1,596,793 $21,910,900 $5,409,072
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 93
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY FUND GROWTH AND INCOME FUND
GROWTH FUND -------------------------------- --------------------------------
---------------------------- FOR THE PERIOD FOR THE PERIOD
YEAR ENDED YEAR ENDED YEAR ENDED MAY 1, 1997 YEAR ENDED OCTOBER 1, 1997
DECEMBER 31, DECEMBER 31, DECEMBER 31, THROUGH DECEMBER 31, THROUGH
1998 1997 1998 DECEMBER 31, 1997 1998 DECEMBER 31, 1997
-------------- ------------ ------------ ----------------- ------------ -----------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ (7,737,334) $ (2,912,665) $ 32,525 $ 2,479 $ 170,856 $ 40,924
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
investments 48,382,838 18,241,515 174,726 60,709 474,045 69,380
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
futures and options -- -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized
gain (loss) on investments 242,454,975 89,190,233 477,834 374,636 5,535,514 (22,006)
- ---------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net
assets resulting from
operations 283,100,479 104,519,083 685,085 437,824 6,180,415 88,298
- ---------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM:
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
A (11,564) -- (23,216) (2,460) (49,655) (18,371)
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
B (417) -- (10,634) -- (13,413) (11,694)
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
C (4,198) -- (1,711) (208) (1,356) (2,192)
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
Y (42) -- (386) -- (107,244) (69,364)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class A (38,585,631) (8,614,445) (25,454) (52,758) (128,692) (71,049)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class B (20,943,603) (3,431,799) (32,207) (30,175) (168,132) (57,595)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class C (6,012,830) (493,612) (5,525) (4,690) (36,761) (9,938)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class Y (2,811,699) (906,323) (218) -- (144,116) (273,727)
- ---------------------------------------------------------------------------------------------------------------------------------
Total dividends and
distributions to shareholders (68,369,984) (13,446,179) (99,351) (90,291) (649,369) (513,930)
- ---------------------------------------------------------------------------------------------------------------------------------
FROM CAPITAL SHARE
TRANSACTIONS:
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS A
- ---------------------------------------------------------------------------------------------------------------------------------
Shares sold 475,086,024 260,192,148 4,275,470 2,924,258 13,648,983 3,059,535
- ---------------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 37,006,136 8,246,727 39,040 55,088 174,612 86,011
- ---------------------------------------------------------------------------------------------------------------------------------
Shares redeemed (240,646,180) (108,981,528) (1,091,690) (59,944) (2,458,043) (160,185)
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class A 271,445,980 159,457,347 3,222,820 2,919,402 11,365,552 2,985,361
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS B
- ---------------------------------------------------------------------------------------------------------------------------------
Shares sold 229,554,640 117,131,669 9,402,016 1,782,097 18,581,974 2,266,006
- ---------------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 20,187,422 3,282,897 41,050 27,982 173,334 66,791
- ---------------------------------------------------------------------------------------------------------------------------------
Shares redeemed (28,733,003) (7,865,656) (2,754,989) (56,145) (1,648,252) (8,694)
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class B 221,009,059 112,548,910 6,688,077 1,753,934 17,107,056 2,324,103
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS C
- ---------------------------------------------------------------------------------------------------------------------------------
Shares sold 99,187,822 28,408,390 1,411,627 306,566 4,168,315 459,347
- ---------------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 5,852,001 478,133 7,109 4,380 36,716 11,908
- ---------------------------------------------------------------------------------------------------------------------------------
Shares redeemed (12,495,435) (2,696,749) (237,070) (33,314) (444,827) (2,071)
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class C 92,544,388 26,189,774 1,181,666 277,632 3,760,204 469,184
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS Y
- ---------------------------------------------------------------------------------------------------------------------------------
Shares sold 31,656,834 44,900,757 55,800 -- 2,595,184 382,747
- ---------------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 2,181,730 480,824 68 -- 250,373 341,911
- ---------------------------------------------------------------------------------------------------------------------------------
Shares redeemed (28,103,666) (7,816,150) -- -- (2,482,459) (313,478)
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class Y 5,734,898 37,565,431 55,868 -- 363,098 411,180
- ---------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets resulting from
capital share transactions 590,734,325 335,761,462 11,148,431 4,950,968 32,595,910 6,189,828
- ---------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets 805,464,820 426,834,366 11,734,165 5,298,501 38,126,956 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 $1,467,873,768 $662,408,948 $17,032,666 $5,298,501 $61,518,840 $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) on 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.
94 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION SMALL COMPANY GROWTH FUND
EQUITY INCOME FUND FUND ------------------------------------------------
------------------------ ------------------------ FOR THE PERIOD
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED OCTOBER 1, 1997 YEAR ENDED
DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER 31, THROUGH SEPTEMBER 30,
31, 1998 31, 1997 31, 1998 31, 1997 1998 DECEMBER 31, 1997 1997
----------- ----------- ----------- ----------- ------------ ----------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ 1,650,992 $ 1,254,944 $(1,336,298) $(1,308,307) $ (348,252) $ (68,233) $ (150,864)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
investments 9,777,817 9,306,031 19,025,360 15,731,336 (4,822,173) (158,828) 523,987
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
futures and options -- -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized
gain (loss) on investments 2,185,780 12,427,285 16,876,956 7,731,763 4,125,149 (1,916,083) 2,373,082
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net
assets resulting from
operations 13,614,589 22,988,260 34,566,018 22,154,792 (1,045,276) (2,143,144) 2,746,205
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM:
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
A (1,347,963) (1,072,290) (3,981) -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
B (250,476) (119,901) (2,159) -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
C (41,379) (10,306) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
Y (1,942) -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class A (7,896,363) (6,834,121) (20,305,457) (15,427,334) -- (111,554) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class B (2,412,973) (1,334,999) (2,296,049) (1,092,295) -- (64,497) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class C (397,433) (130,982) (156,338) (17,309) -- (18,302) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class Y (8,549) -- (34,063) -- -- (310,189) (665,013)
- ------------------------------------------------------------------------------------------------------------------------------------
Total dividends and
distributions to shareholders (12,357,078) (9,502,599) (22,798,047) (16,536,938) -- (504,542) (665,013)
- ------------------------------------------------------------------------------------------------------------------------------------
FROM CAPITAL SHARE
TRANSACTIONS:
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS A
- ------------------------------------------------------------------------------------------------------------------------------------
Shares sold 19,311,952 17,272,166 35,319,635 8,448,481 6,801,056 3,329,056 1,977,903
- ------------------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 8,929,816 7,703,613 19,629,603 14,967,124 -- 109,857 --
- ------------------------------------------------------------------------------------------------------------------------------------
Shares redeemed (16,538,197) (12,389,236) (47,296,498) (31,521,891) (2,975,141) (177,096) (23,177)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class A 11,703,571 12,586,543 7,652,740 (8,106,286) 3,825,915 3,261,817 1,954,726
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS B
- ------------------------------------------------------------------------------------------------------------------------------------
Shares sold 16,906,603 12,399,165 7,868,911 2,827,251 8,068,502 2,166,644 1,059,895
- ------------------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 2,494,182 1,368,111 2,237,821 1,059,795 -- 61,101 --
- ------------------------------------------------------------------------------------------------------------------------------------
Shares redeemed (4,409,445) (1,216,943) (3,856,735) (1,112,978) (2,063,663) (230,849) (23,506)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class B 14,991,340 12,550,333 6,249,997 2,774,068 6,004,839 1,996,896 1,036,389
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS C
- ------------------------------------------------------------------------------------------------------------------------------------
Shares sold 4,251,624 1,846,156 917,554 124,776 2,206,846 645,548 189,019
- ------------------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 420,408 124,710 153,448 16,626 -- 17,752 --
- ------------------------------------------------------------------------------------------------------------------------------------
Shares redeemed (746,044) (11,463) (161,592) (1,512) (506,686) (26,689) (170)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class C 3,925,988 1,959,403 909,410 139,890 1,700,160 636,611 188,849
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS Y
- ------------------------------------------------------------------------------------------------------------------------------------
Shares sold 110,250 -- 208,176 -- 1,178,645 384,008 10,548,168
- ------------------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 930 -- 15,972 -- -- 301,209 656,535
- ------------------------------------------------------------------------------------------------------------------------------------
Shares redeemed -- -- (18,086) -- (5,183,044) (651,790) (4,317,735)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class Y 111,180 -- 206,062 -- (4,004,399) 33,427 6,886,968
- ------------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets resulting from
capital share transactions 30,732,079 27,096,279 15,018,209 (5,192,328) 7,526,515 5,928,751 10,066,932
- ------------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets 31,989,590 40,581,940 26,786,180 425,526 6,481,239 3,281,065 12,148,124
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------------------------------------------------------------------------------------
Beginning of period $118,843,720 $78,261,780 $120,725,545 $120,300,019 $22,038,083 $18,757,018 $ 6,608,894
- ------------------------------------------------------------------------------------------------------------------------------------
End of period $150,833,310 $118,843,720 $147,511,725 $120,725,545 $28,519,322 $22,038,083 $18,757,018
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SMALL COMPANY VALUE FUND
-------------------------
YEAR ENDED YEAR ENDED
DECEMBER DECEMBER 31,
31, 1998 1997
----------- ------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ (732,234) $ (36,646)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
investments 4,934,895 4,633,929
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
futures and options -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized
gain (loss) on investments (888,315) 7,400,618
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net
assets resulting from
operations 3,314,346 11,997,901
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM:
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
A (3,491) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
B (2,710) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
C (883) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
Y -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class A (2,153,716) (2,902,903)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class B (1,656,937) (1,418,458)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class C (365,249) (172,913)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class Y (7,161) (7,578)
- ------------------------------------------------------------------------------------------------------------------------------------
Total dividends and
distributions to shareholders (4,190,147) (4,501,852)
- ------------------------------------------------------------------------------------------------------------------------------------
FROM CAPITAL SHARE
TRANSACTIONS:
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS A
- ------------------------------------------------------------------------------------------------------------------------------------
Shares sold 81,669,430 24,183,248
- ------------------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 2,070,187 2,817,488
- ------------------------------------------------------------------------------------------------------------------------------------
Shares redeemed (49,169,722) (5,179,631)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class A 34,569,895 21,821,105
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS B
- ------------------------------------------------------------------------------------------------------------------------------------
Shares sold 50,674,685 17,761,763
- ------------------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 1,591,999 1,337,536
- ------------------------------------------------------------------------------------------------------------------------------------
Shares redeemed (11,540,525) (912,538)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class B 40,726,159 18,186,761
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS C
- ------------------------------------------------------------------------------------------------------------------------------------
Shares sold 12,908,849 2,602,460
- ------------------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 352,181 158,448
- ------------------------------------------------------------------------------------------------------------------------------------
Shares redeemed (1,644,958) (49,665)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class C 11,616,072 2,711,243
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS Y
- ------------------------------------------------------------------------------------------------------------------------------------
Shares sold 221,282 133,172
- ------------------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 7,161 7,533
- ------------------------------------------------------------------------------------------------------------------------------------
Shares redeemed (78,860) (2,069,409)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class Y 149,583 (1,928,704)
- ------------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets resulting from
capital share transactions 87,061,709 40,790,405
- ------------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets 86,185,908 48,286,454
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------------------------------------------------------------------------------------
Beginning of period $70,126,059 $21,839,605
- ------------------------------------------------------------------------------------------------------------------------------------
End of period $156,311,967 $70,126,059
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 95
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL
FINANCIAL
SERVICES FUND
---------------
INTERNATIONAL GROWTH FUND FOR THE PERIOD GOVERNMENT SECURITIES FUND
--------------------------- OCTOBER 1, 1998 --------------------------
YEAR ENDED YEAR ENDED THROUGH YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1998 1998 1997
------------ ------------ --------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ 169,565 $ 282,844 $ 7,863 $ 5,388,020 $ 4,916,643
- ----------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
investments 1,530,125 2,951,705 316 73,735 (70,610)
- ----------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
futures and options -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------
Net change in unrealized
gain (loss) on investments 6,756,237 (1,379,627) 1,164,201 754,081 1,607,250
- ----------------------------------------------------------------------------------------------------------
Increase (decrease) in net
assets resulting from
operations 8,455,927 1,854,922 1,172,380 6,215,836 6,453,283
- ----------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM:
- ----------------------------------------------------------------------------------------------------------
Net investment income, Class
A (108,820) (143,750) -- (3,896,434) (4,240,611)
- ----------------------------------------------------------------------------------------------------------
Net investment income, Class
B (1,058) (7,274) -- (936,305) (463,583)
- ----------------------------------------------------------------------------------------------------------
Net investment income, Class
C (2,049) (4,922) -- (83,616) (5,921)
- ----------------------------------------------------------------------------------------------------------
Net investment income, Class
Y (92,335) (89,451) -- (471,665) (206,528)
- ----------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class A (329,025) (2,418,648) -- -- --
- ----------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class B (121,910) (631,985) -- -- --
- ----------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class C (25,397) (71,424) -- -- --
- ----------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class Y (102,033) (692,785) -- -- --
- ----------------------------------------------------------------------------------------------------------
Total dividends and
distributions to shareholders (782,627) (4,060,239) -- (5,388,020) (4,916,643)
- ----------------------------------------------------------------------------------------------------------
FROM CAPITAL SHARE
TRANSACTIONS:
- ----------------------------------------------------------------------------------------------------------
CLASS A
- ----------------------------------------------------------------------------------------------------------
Shares sold 9,516,243 9,664,091 1,452,204 22,163,314 9,968,742
- ----------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 422,857 2,483,065 -- 2,999,537 3,239,373
- ----------------------------------------------------------------------------------------------------------
Shares redeemed (11,162,315) (7,918,925) (129,788) (22,837,964) (19,528,142)
- ----------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class A (1,223,215) 4,228,231 1,322,416 2,324,887 (6,320,027)
- ----------------------------------------------------------------------------------------------------------
CLASS B
- ----------------------------------------------------------------------------------------------------------
Shares sold 12,740,631 8,132,892 1,150,088 25,436,261 7,500,863
- ----------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 120,205 618,379 -- 756,772 366,928
- ----------------------------------------------------------------------------------------------------------
Shares redeemed (8,121,910) (2,560,054) (190,737) (11,444,391) (1,468,710)
- ----------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class B 4,738,926 6,191,217 959,351 14,748,642 6,399,081
- ----------------------------------------------------------------------------------------------------------
CLASS C
- ----------------------------------------------------------------------------------------------------------
Shares sold 3,010,422 1,623,970 222,535 3,877,365 491,753
- ----------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 24,651 64,561 -- 79,085 5,436
- ----------------------------------------------------------------------------------------------------------
Shares redeemed (917,430) (411,829) (26,021) (1,372,631) (1,730)
- ----------------------------------------------------------------------------------------------------------
Net increase (decrease)-
Class C 2,117,643 1,276,702 196,514 2,583,819 495,459
- ----------------------------------------------------------------------------------------------------------
CLASS Y
- ----------------------------------------------------------------------------------------------------------
Shares sold 8,304,283 5,152,548 4,713,342 982,969 7,776,475
- ----------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 194,336 782,252 -- 467,956 203,007
- ----------------------------------------------------------------------------------------------------------
Shares redeemed (7,458,814) (3,371,537) -- (1,813,505) (476,237)
- ----------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class Y 1,039,805 2,563,263 4,713,342 (362,580) 7,503,245
- ----------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets resulting from
capital share transactions 6,673,159 14,259,413 7,191,623 19,294,768 8,077,758
- ----------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets 14,346,459 12,054,096 8,364,003 20,122,584 9,614,398
- ----------------------------------------------------------------------------------------------------------
NET ASSETS:
- ----------------------------------------------------------------------------------------------------------
Beginning of period $59,996,193 $47,942,097 $ -- $ 88,989,974 $79,375,576
- ----------------------------------------------------------------------------------------------------------
End of period $74,342,652 $59,996,193 $ 8,364,003 $109,112,558 $88,989,974
- ----------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
96 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
<TABLE>
<CAPTION>
MONEY MARKET
HIGH-YIELD BOND FUND TAX-EXEMPT INCOME FUND MANAGED FUND FUND
-------------------------- --------------------------- -------------------------- -------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1998 1997 1998 1997 1998
------------ ------------ ------------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ 7,868,188 $ 5,875,927 $ 1,170,489 $ 1,259,307 $ 1,920,876 $ 1,197,777 $ 5,409,072
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
investments 1,471,176 2,743,109 746,552 372,519 30,494,153 12,784,062 --
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
futures and options -- (62,305 ) -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized
gain (loss) on investments (7,542,908) 349,675 (320,248) 229,121 (10,504,129) 38,518,875 --
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net
assets resulting from
operations 1,796,456 8,906,406 1,596,793 1,860,947 21,910,900 52,500,714 5,409,072
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM:
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
A (5,459,924) (4,853,097 ) (1,024,552) (1,174,218) (885,601) (591,297) (4,735,359)
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
B (2,042,690) (972,857 ) (128,996) (83,769) (147,987) (7,511) (392,136)
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
C (273,307) (24,986 ) (16,647) (1,321) (43,801) (18,130) (138,096)
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
Y (92,256) (24,987 ) (293) -- (849,714) (607,068) (143,481)
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class A (997,754) -- (524,341) (322,461) (10,259,117) (5,861,184) --
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class B (480,676) -- (97,566) (39,833) (9,542,938) (4,171,627) --
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class C (74,900) -- (16,735) (2,497) (692,449) (136,070) --
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized gains on
investments Class Y (26,418) -- (1,473) -- (5,205,913) (3,007,927) --
- -----------------------------------------------------------------------------------------------------------------------------------
Total dividends and
distributions to shareholders (9,447,925) (5,875,927 ) (1,810,603) (1,624,099) (27,627,520) (14,400,814) (5,409,072)
- -----------------------------------------------------------------------------------------------------------------------------------
FROM CAPITAL SHARE
TRANSACTIONS:
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS A
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold 26,180,156 20,360,902 4,758,439 2,691,749 44,993,325 52,752,538 413,364,732
- -----------------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 5,184,552 3,697,275 1,239,726 1,171,184 10,727,403 6,249,605 4,556,487
- -----------------------------------------------------------------------------------------------------------------------------------
Shares redeemed (20,189,403) (14,219,658 ) (5,829,298) (8,876,454) (36,345,519) (21,520,190) (345,896,926)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class A 11,175,305 9,838,519 168,867 (5,013,521) 19,375,209 37,481,953 72,024,293
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS B
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold 26,716,825 14,068,528 2,501,000 1,466,262 66,722,575 45,496,427 32,792,113
- -----------------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 1,974,137 701,407 188,983 100,177 9,333,309 3,984,094 351,316
- -----------------------------------------------------------------------------------------------------------------------------------
Shares redeemed (10,886,369) (3,320,942 ) (1,073,717) (728,264) (21,471,933) (6,915,745) (28,976,415)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class B 17,804,593 11,448,993 1,616,266 838,175 54,583,951 42,564,776 4,167,014
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS C
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold 5,863,205 1,690,084 731,438 181,367 10,395,540 3,630,893 15,657,662
- -----------------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 291,593 18,460 28,617 3,787 707,800 143,683 112,867
- -----------------------------------------------------------------------------------------------------------------------------------
Shares redeemed (1,836,334) (255,370 ) (157,608) -- (2,469,630) (69,464) (12,111,247)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)-
Class C 4,318,464 1,453,174 602,447 185,154 8,633,710 3,705,112 3,659,282
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS Y
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold 1,250,831 775,896 66,447 -- 30,057,893 29,017,460 2,877,556
- -----------------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 119,053 24,887 402 -- 6,055,002 3,614,889 131,097
- -----------------------------------------------------------------------------------------------------------------------------------
Shares redeemed (52,838) (897 ) -- -- (26,931,170) (19,022,024) (2,296,440)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class Y 1,317,046 799,886 66,849 -- 9,181,725 13,610,325 712,213
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets resulting from
capital share transactions 34,615,408 23,540,572 2,454,429 (3,990,192) 91,774,595 97,362,166 80,562,802
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets 26,963,939 26,571,051 2,240,619 (3,753,344) 86,057,975 135,462,066 80,562,802
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------------------------------------------------------------------------------
Beginning of period $ 88,591,929 $62,020,878 $26,762,208 $30,515,552 $351,315,643 $215,853,577 $ 78,167,164
- -----------------------------------------------------------------------------------------------------------------------------------
End of period $115,555,868 $88,591,929 $29,002,827 $26,762,208 $437,373,618 $351,315,643 $ 158,729,966
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
YEAR ENDED
DECEMBER 31,
1997
-------------
<S> <C>
FROM OPERATIONS:
Net investment income (loss) $ 3,014,138
- -----------------------------------------------------------
Net realized gain (loss) on
investments --
- -------------------------------------------------------------------------
Net realized gain (loss) on
futures and options --
- ---------------------------------------------------------------------------------------
Net change in unrealized
gain (loss) on investments --
- -----------------------------------------------------------------------------------------------------
Increase (decrease) in net
assets resulting from
operations 3,014,138
- -------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM:
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
A (2,766,936)
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
B (181,537)
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
C (6,468)
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income, Class
Y (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 (3,014,138)
- -----------------------------------------------------------------------------------------------------------------------------------
FROM CAPITAL SHARE
TRANSACTIONS:
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS A
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold 186,445,537
- -----------------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 2,799,348
- -----------------------------------------------------------------------------------------------------------------------------------
Shares redeemed (179,852,529)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class A 9,392,356
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS B
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold 16,428,666
- -----------------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 165,715
- -----------------------------------------------------------------------------------------------------------------------------------
Shares redeemed (11,957,685)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class B 4,636,696
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS C
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold 3,804,829
- -----------------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 5,853
- -----------------------------------------------------------------------------------------------------------------------------------
Shares redeemed (2,789,716)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)-
Class C 1,020,966
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS Y
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold 3,225,033
- -----------------------------------------------------------------------------------------------------------------------------------
Reinvestment of
distributions 55,490
- -----------------------------------------------------------------------------------------------------------------------------------
Shares redeemed (580,428)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) -
Class Y 2,700,095
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets resulting from
capital share transactions 17,750,113
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in
net assets 17,750,113
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------------------------------------------------------------------------------
Beginning of period $ 60,417,051
- -----------------------------------------------------------------------------------------------------------------------------------
End of period $ 78,167,164
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 97
<PAGE>
ENTERPRISE 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>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------
ENTERPRISE GROWTH FUND (CLASS A) 1998 1997 1996 1995 1994
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 16.91 $ 13.10 $ 10.44 $ 7.76 $ 8.26
Net Investment Income (Loss) (0.11)(F) (0.07) (0.04) (0.03) (0.02)
Net Realized and Unrealized Gain (Loss) on
Investments 5.31 4.23 3.44 3.13 (0.06)
--------- --------- --------- --------- --------
Total from Investment Operations 5.20 4.16 3.40 3.10 (0.08)
--------- --------- --------- --------- --------
Dividends from Net Investment Income -- -- -- -- --
Distributions from Capital Gains (1.04) (0.35) (0.74) (0.42) (0.42)
--------- --------- --------- --------- --------
Total Distributions (1.04) (0.35) (0.74) (0.42) (0.42)
--------- --------- --------- --------- --------
Net Asset Value End of Period $ 21.07 $ 16.91 $ 13.10 $ 10.44 $ 7.76
--------- --------- --------- --------- --------
Total Return(C) 30.94% 31.76% 32.60% 39.99% (0.99)%
Net Assets End of Period (in thousands) $ 827,567 $ 424,280 $ 196,752 $ 122,559 $ 88,375
Ratio of Expenses to Average Net Assets 1.48% 1.43%(E) 1.53%(E) 1.60% 1.56%
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.48% 1.43%(E) 1.53%(E) 1.60% 1.56%
Ratio of Net Investment Income (Loss) to Average
Net Assets (0.58)% (0.55)% (0.39)% (0.35)% (0.30)%
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (0.58)% (0.55)% (0.39)% (0.35)% (0.30)%
Portfolio Turnover Rate 28% 22% 30% 45% 65%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, FOR THE PERIOD
----------------------------------- 5/1/95
ENTERPRISE 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) (0.21)(F) (0.11) (0.06) (0.02)
Net Realized and Unrealized Gain (Loss) on
Investments 5.21 4.15 3.36 2.16
--------- --------- -------- ------
Total from Investment Operations 5.00 4.04 3.30 2.14
--------- --------- -------- ------
Dividends from Net Investment Income -- -- -- --
Distributions from Capital Gains (1.04) (0.35) (0.74) (0.42)
--------- --------- -------- ------
Total Distributions (1.04) (0.35) (0.74) (0.42)
--------- --------- -------- ------
Net Asset Value End of Period $ 20.62 $ 16.66 $ 12.97 $10.41
--------- --------- -------- ------
Total Return(D) 30.20% 31.15% 31.73% 24.66%(B)
Net Assets End of Period (in thousands) $ 446,473 $ 166,932 $ 36,483 $4,572
Ratio of Expenses to Average Net Assets 2.03% 1.98%(E) 2.10%(E) 2.15%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.03% 1.98%(E) 2.10%(E) 2.15%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (1.13)% (1.10)% (0.96)% (0.82)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (1.13)% (1.10)% (0.96)% (0.82)%(A)
Portfolio Turnover Rate 28% 22% 30% 45%(A)
</TABLE>
See notes to financial statements.
98 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE GROWTH FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED 5/1/97
ENTERPRISE GROWTH FUND (CLASS C) DECEMBER 31, 1998 THROUGH 12/31/97
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 16.85 $ 14.11
Net Investment Income (Loss) (0.21)(F) (0.06)
Net Realized and Unrealized Gain (Loss) on
Investments 5.27 3.15
------- -------
Total from Investment Operations 5.06 3.09
------- -------
Dividends from Net Investment Income -- --
Distributions from Capital Gains (1.04) (0.35)
------- -------
Total Distributions (1.04) (0.35)
------- -------
Net Asset Value End of Period $ 20.87 $ 16.85
------- -------
Total Return(D) 30.22% 21.91%(B)
Net Assets End of Period (in thousands) $ 133,194 $ 26,601
Ratio of Expenses to Average Net Assets 2.04% 1.97%(A)(E)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.04% 1.97%(AE)
Ratio of Net Investment Income (Loss) to Average
Net Assets (1.13)% (1.10)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (1.13)% (1.10)%(A)
Portfolio Turnover Rate 28% 22%(A)
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED YEAR ENDED 8/8/96
ENTERPRISE GROWTH FUND (CLASS Y) DECEMBER 31, 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) (0.02)(F) (0.02) --
Net Realized and Unrealized Gain (Loss) on
Investments 5.45 4.27 1.90
------- ------- ------
Total from Investment Operations 5.43 4.25 1.90
------- ------- ------
Dividends from Net Investment Income -- -- --
Distributions from Capital Gains (1.04) (0.35) (0.74)
------- ------- ------
Total Distributions (1.04) (0.35) (0.74)
------- ------- ------
Net Asset Value End of Period $ 21.41 $ 17.02 $ 13.12
------- ------- ------
Total Return 32.09% 32.40% 15.91%(B)
Net Assets End of Period (in thousands) $60,640 $44,596 $ 2,339
Ratio of Expenses to Average Net Assets 1.03% 0.97%(E) 1.10%(A)(E)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.03% 0.97%(E) 1.10%(A)(E)
Ratio of Net Investment Income (Loss) to Average
Net Assets (0.13)% (0.10)% 0.04%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (0.13)% (0.10)% 0.04%(A)
Portfolio Turnover Rate 28% 22% 30%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 99
<PAGE>
ENTERPRISE EQUITY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED 05/01/97
ENTERPRISE EQUITY FUND (CLASS A) DECEMBER 31, 1998 THROUGH 12/31/97
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 5.96 $ 5.00
Net Investment Income (Loss) 0.03 0.01
Net Realized and Unrealized Gain (Loss) on
Investments 0.53 1.05
------ ------
Total from Investment Operations 0.56 1.06
------ ------
Dividends from Net Investment Income (0.02) --
Distributions from Capital Gains (0.03) (0.10)
------ ------
Total Distributions (0.05) (0.10)
------ ------
Net Asset Value End of Period $ 6.47 $ 5.96
------ ------
Total Return(C) 9.38% 21.30%(B)
Net Assets End of Period (in thousands) $ 6,741 $ 3,196
Ratio of Expenses to Average Net Assets 1.60% 1.60%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.73% 6.52%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 0.59% 0.26%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (0.54)% (4.66)%(A)
Portfolio Turnover Rate 35% 69%(A)
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED 05/01/97
ENTERPRISE EQUITY FUND (CLASS B) DECEMBER 31, 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 0.53 1.04
------ ------
Total from Investment Operations 0.53 1.04
------ ------
Dividends from Net Investment Income (0.01) --
Distributions from Capital Gains (0.03) (0.10)
------ ------
Total Distributions (0.04) (0.10)
------ ------
Net Asset Value End of Period $ 6.43 $ 5.94
------ ------
Total Return(D) 8.82% 20.80%(B)
Net Assets End of Period (in thousands) $ 8,731 $ 1,820
Ratio of Expenses to Average Net Assets 2.15% 2.15%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 3.29% 6.21%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 0.07% (0.23)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (1.07)% (4.29)%(A)
Portfolio Turnover Rate 35% 69%(A)
</TABLE>
See notes to financial statements.
100 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE EQUITY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED 05/01/97
ENTERPRISE EQUITY FUND (CLASS C) DECEMBER 31, 1998 THROUGH 12/31/97
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 5.94 $ 5.00
Net Investment Income (Loss) 0.01 --
Net Realized and Unrealized Gain (Loss) on
Investments 0.53 1.04
------ ------
Total from Investment Operations 0.54 1.04
------ ------
Dividends from Net Investment Income (0.01) --
Distributions from Capital Gains (0.03) (0.10)
------ ------
Total Distributions (0.04) (0.10)
------ ------
Net Asset Value End of Period $ 6.44 $ 5.94
------ ------
Total Return(D) 8.98% 20.89%(B)
Net Assets End of Period (in thousands) $ 1,504 $ 283
Ratio of Expenses to Average Net Assets 2.15% 2.15%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 3.28% 6.01%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 0.09% (0.21)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (1.03)% (4.07)%(A)
Portfolio Turnover Rate 35% 69%(A)
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
10/14/98
ENTERPRISE EQUITY FUND (CLASS Y) THROUGH 12/31/98
- ---------------------------------------------------------------------
<S> <C>
Net Asset Value Beginning of Period $ 5.86
Net Investment Income (Loss) 0.01
Net Realized and Unrealized Gain (Loss) on
Investments 0.63
------
Total from Investment Operations 0.64
------
Dividends from Net Investment Income (0.04)
Distributions from Capital Gains (0.03)
------
Total Distributions (0.07)
------
Net Asset Value End of Period $ 6.43
------
Total Return 10.93%(B)
Net Assets End of Period (in thousands) $ 57
Ratio of Expenses to Average Net Assets 1.13%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.26%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 1.04%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (0.11)%(A)
Portfolio Turnover Rate 35%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 101
<PAGE>
ENTERPRISE GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD FOR THE PERIOD
YEAR ENDED 10/1/97 7/17/97
ENTERPRISE GROWTH AND INCOME FUND (CLASS A) DECEMBER 31, 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) 0.14 0.01 --
Net Realized and Unrealized Gain (Loss) on
Investments 4.00 0.04 0.66
------- ------ ------
Total from Investment Operations 4.14 0.05 0.66
------- ------ ------
Dividends from Net Investment Income (0.09) (0.11) --
Distributions from Capital Gains (0.23) (0.46) --
------- ------ ------
Total Distributions (0.32) (0.57) --
------- ------ ------
Net Asset Value End of Period $ 29.01 $ 25.19 $ 25.71
------- ------ ------
Total Return(C) 16.50% 0.20%(B) 2.63%(B)
Net Assets End of Period (in thousands) $16,664 $ 4,032 $ 1,109
Ratio of Expenses to Average Net Assets 1.50% 1.50%(A) 1.50%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.93% 2.11%(A) 4.47%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 0.41% 0.56%(A) 0.07%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (0.03)% (0.04)%(A) (2.90)%(A)
Portfolio Turnover Rate 5% 1%(A) 16%(A)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED FOR THE PERIOD FOR THE PERIOD
DECEMBER 31, 10/1/97 7/17/97
ENTERPRISE GROWTH AND INCOME FUND (CLASS B) 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) 0.05 (0.01) (0.01)
Net Realized and Unrealized Gain (Loss) on
Investments 3.95 0.03 0.64
------- ------ ------
Total from Investment Operations 4.00 0.02 0.63
------- ------ ------
Dividends from Net Investment Income (0.02) (0.09) --
Distributions from Capital Gains (0.23) (0.46) --
------- ------ ------
Total Distributions (0.25) (0.55) --
------- ------ ------
Net Asset Value End of Period $ 28.90 $ 25.15 $ 25.68
------- ------ ------
Total Return(D) 15.95% 0.07%(B) 2.51%(B)
Net Assets End of Period (in thousands) $21,891 $ 3,257 $ 992
Ratio of Expenses to Average Net Assets 2.05% 2.05%(A) 2.05%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.48% 2.66%(A) 4.59%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (0.17)% (0.02)%(A) (0.34)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (0.60)% (0.63)%(A) (2.87)%(A)
Portfolio Turnover Rate 5% 2%(A) 16%(A)
</TABLE>
See notes to financial statements.
102 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED FOR THE PERIOD FOR THE PERIOD
DECEMBER 31, 10/1/97 7/17/97
ENTERPRISE GROWTH AND INCOME FUND (CLASS C) 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) 0.06 (0.02) (0.01)
Net Realized and Unrealized Gain (Loss) on
Investments 3.94 0.05 0.64
------ ------ ------
Total from Investment Operations 4.00 0.03 0.63
------ ------ ------
Dividends from Net Investment Income (0.01) (0.10) --
Distributions from Capital Gains (0.23) (0.46) --
------ ------ ------
Total Distributions (0.24) (0.56) --
------ ------ ------
Net Asset Value End of Period $ 28.91 $ 25.15 $ 25.68
------ ------ ------
Total Return(D) 15.95% 0.10%(B) 2.51%(B)
Net Assets End of Period (in thousands) $ 4,654 $ 561 $ 99
Ratio of Expenses to Average Net Assets 2.05% 2.05%(A) 2.05%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.49% 2.64%(A) 4.60%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (0.16)% 0.03%(A) (0.39)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (0.60)% (0.56)%(A) (2.94)%(A)
Portfolio Turnover Rate 5% 2%(A) 16%(A)
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
10/1/97 YEAR
YEAR ENDED THROUGH ENDED YEAR ENDED YEAR ENDED
ENTERPRISE GROWTH AND INCOME FUND (CLASS Y) DECEMBER 31, 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) 0.29 0.06 0.35 0.21 0.13
Net Realized and Unrealized Gain (Loss) on
Investments 4.00 0.02 6.18 3.45 4.22
------- ------- --------- ----------- -----------
Total from Investment Operations 4.29 0.08 6.53 3.66 4.35
------- ------- --------- ----------- -----------
Dividends from Net Investment Income (0.17) (0.11) (0.20) (0.24) (0.16)
Distributions from Capital Gains (0.23) (0.46) (0.71) -- (0.22)
------- ------- --------- ----------- -----------
Total Distributions (0.40) (0.57) (0.91) (0.24) (0.38)
------- ------- --------- ----------- -----------
Net Asset Value End of Period $ 29.13 $ 25.24 $ 25.73 $ 20.11 $ 16.69
------- ------- --------- ----------- -----------
Total Return 17.08% 0.31%(B) 33.55% 22.21% 35.24%
Net Assets End of Period (in thousands) $ 18,310 $ 15,542 $ 15,428 $ 8,865 $ 5,657
Ratio of Expenses to Average Net Assets 1.05% 1.05%(A) 0.99% 0.97% 0.90%
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.48% 1.68%(A) 2.20% 2.05% 2.20%
Ratio of Net Investment Income (Loss) to Average
Net Assets 0.89% 0.96%(A) 0.88% 1.23% 1.52%
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 0.45% 0.33%(A) (0.33)% 0.15% 0.22%
Portfolio Turnover Rate 5% 2%(A) 16% 18% 25%
<CAPTION>
YEAR ENDED
ENTERPRISE GROWTH AND INCOME FUND (CLASS Y) 9/30/94
- --------------------------------------------------
<S> <C>
Net Asset Value Beginning of Period $ 12.08
Net Investment Income (Loss) 0.15
Net Realized and Unrealized Gain (Loss) on
Investments 0.74
-----------
Total from Investment Operations 0.89
-----------
Dividends from Net Investment Income (0.14)
Distributions from Capital Gains (0.11)
-----------
Total Distributions (0.25)
-----------
Net Asset Value End of Period $ 12.72
-----------
Total Return 7.47%
Net Assets End of Period (in thousands) $ 3,639
Ratio of Expenses to Average Net Assets 0.90%
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.23%
Ratio of Net Investment Income (Loss) to Average
Net Assets 1.17%
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (0.16)%
Portfolio Turnover Rate 10%
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 103
<PAGE>
ENTERPRISE EQUITY INCOME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------
ENTERPRISE EQUITY INCOME FUND (CLASS A) 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 26.42 $ 22.44 $ 20.73 $ 16.43 $ 17.75
Net Investment Income (Loss) 0.36 0.17 0.41 0.45 0.44
Net Realized and Unrealized Gain (Loss) on
Investments 2.52 5.95 3.27 5.00 (0.53)
--------- -------- -------- -------- --------
Total from Investment Operations 2.88 6.12 3.68 5.45 (0.09)
--------- -------- -------- -------- --------
Dividends from Net Investment Income (0.35) (0.15) (0.40) (0.45) (0.44)
Distributions from Capital Gains (2.06) (1.99) (1.57) (0.70) (0.79)
--------- -------- -------- -------- --------
Total Distributions (2.41) (2.14) (1.97) (1.15) (1.23)
--------- -------- -------- -------- --------
Net Asset Value End of Period $ 26.89 $ 26.42 $ 22.44 $ 20.73 $ 16.43
--------- -------- -------- -------- --------
Total Return(C) 11.13% 28.08% 17.86% 33.38% (0.49)%
Net Assets End of Period (in thousands) $ 111,275 $ 97,932 $ 72,647 $ 61,906 $ 50,926
Ratio of Expenses to Average Net Assets 1.50% 1.50% 1.50% 1.50% 1.50%
Ratio of Expenses to Average Net Assets
(Excluding Waivers) 1.58% 1.62% 1.68% 1.78% 1.73%
Ratio of Net Investment Income (Loss) to
Average Net Assets 1.32% 1.35% 1.87% 2.33% 2.50%
Ratio of Net Investment Income (Loss) to
Average Net Assets (Excluding Waivers) 1.25% 1.23% 1.69% 2.06% 2.30%
Portfolio Turnover Rate 31% 33% 33% 26% 41%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, FOR THE PERIOD
------------------------------ 5/1/95
ENTERPRISE 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) 0.20 0.12 0.24 0.29
Net Realized and Unrealized Gain (Loss) on
Investments 2.49 5.83 3.30 3.40
-------- -------- -------- ------
Total from Investment Operations 2.69 5.95 3.54 3.69
-------- -------- -------- ------
Dividends from Net Investment Income (0.23) (0.09) (0.34) (0.44)
Distributions from Capital Gains (2.06) (1.99) (1.57) (0.70)
-------- -------- -------- ------
Total Distributions (2.29) (2.08) (1.91) (1.14)
-------- -------- -------- ------
Net Asset Value End of Period $ 26.57 $ 26.17 $ 22.30 $20.67
-------- -------- -------- ------
Total Return(D) 10.49% 27.35% 17.22% 20.57%(B)
Net Assets End of Period (in thousands) $ 33,807 $ 19,055 $ 5,615 $1,086
Ratio of Expenses to Average Net Assets 2.05% 2.05% 2.05% 2.05%(A)
Ratio of Expenses to Average Net Assets
(Excluding Waivers) 2.13% 2.17% 2.23% 2.23%(A)
Ratio of Net Investment Income (Loss) to
Average Net Assets 0.78% 0.77% 1.32% 1.56%(A)
Ratio of Net Investment Income (Loss) to
Average Net Assets (Excluding Waivers) 0.71% 0.65% 1.14% 1.33%(A)
Portfolio Turnover Rate 31% 33% 33% 26%(A)
</TABLE>
See notes to financial statements.
104 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE EQUITY INCOME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD FROM
YEAR ENDED 5/1/97
ENTERPRISE EQUITY INCOME FUND (CLASS C) DECEMBER 31, 1998 THROUGH 12/31/97
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 26.31 $ 24.26
Net Investment Income (Loss) 0.21 0.04
Net Realized and Unrealized Gain (Loss) on
Investments 2.49 4.14
------ ------
Total from Investment Operations 2.70 4.18
------ ------
Dividends from Net Investment Income (0.25) (0.14)
Distributions from Capital Gains (2.06) (1.99)
------ ------
Total Distributions (2.31) (2.13)
------ ------
Net Asset Value End of Period $ 26.70 $ 26.31
------ ------
Total Return(D) 10.47% 18.21%(B)
Net Assets End of Period (in thousands) $ 5,639 $ 1,857
Ratio of Expenses to Average Net Assets 2.05% 2.05%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.13% 2.20%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 0.81% 0.69%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 0.73% 0.54%(A)
Portfolio Turnover Rate 31% 33%(A)
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
ENTERPRISE EQUITY INCOME FUND (CLASS Y) 1/22/98 THROUGH 12/31/98
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 26.25
Net Investment Income (Loss) 0.47
Net Realized and Unrealized Gain (Loss) on
Investments 2.69
------
Total from Investment Operations 3.16
------
Dividends from Net Investment Income (0.48)
Distributions from Capital Gains (2.06)
------
Total Distributions (2.54)
------
Net Asset Value End of Period $ 26.87
------
Total Return 12.26%(B)
Net Assets End of Period (in thousands) $ 112
Ratio of Expenses to Average Net Assets 1.05%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.13%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 1.79%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 1.72%(A)
Portfolio Turnover Rate 31%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 105
<PAGE>
ENTERPRISE CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
ENTERPRISE CAPITAL APPRECIATION FUND (CLASS A) 1998 1997 1996 1995 1994
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 35.54 $ 34.21 $ 32.54 $ 28.54 $ 31.10
Net Investment Income (Loss) (0.39)(F) (0.37) (0.31) (0.25) (0.13)
Net Realized and Unrealized Gain (Loss) on
Investments 10.55 7.31 5.69 7.59 (0.95)
--------- --------- --------- --------- ---------
Total from Investment Operations 10.16 6.94 5.38 7.34 (1.08)
--------- --------- --------- --------- ---------
Dividends from Net Investment Income -- -- -- -- --
Distributions from Capital Gains (7.11) (5.61) (3.71) (3.34) (1.48)
--------- --------- --------- --------- ---------
Total Distributions (7.11) (5.61) (3.71) (3.34) (1.48)
--------- --------- --------- --------- ---------
Net Asset Value End of Period $ 38.59 $ 35.54 $ 34.21 $ 32.54 $ 28.54
--------- --------- --------- --------- ---------
Total Return(C) 30.15% 20.27% 16.52% 25.72% (3.46)%
Net Assets End of Period (in thousands) $ 131,605 $ 112,738 $ 115,253 $ 121,207 $ 101,237
Ratio of Expenses to Average Net Assets 1.52% 1.65% 1.60%(E) 1.65% 1.66%
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.52% 1.65% 1.60%(E) 1.65% 1.66%
Ratio of Net Investment Income (Loss) to Average
Net Assets (1.01)% (1.06)% (0.87)% (0.82)% (0.50)%
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (1.01)% (1.06)% (0.87)% (0.82)% (0.50)%
Portfolio Turnover Rate 76% 61% 66% 65% 74%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, FOR THE PERIOD
------------------------------ 5/1/95
ENTERPRISE 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) (0.58)(F) (0.45) (0.35) (0.12)
Net Realized and Unrealized Gain (Loss) on
Investments 10.30 7.09 5.50 5.84
-------- -------- -------- ------
Total from Investment Operations 9.72 6.64 5.15 5.72
-------- -------- -------- ------
Dividends from Net Investment Income -- -- -- --
Distributions from Capital Gains (7.11) (5.61) (3.71) (3.34)
-------- -------- -------- ------
Total Distributions (7.11) (5.61) (3.71) (3.34)
-------- -------- -------- ------
Net Asset Value End of Period $ 37.50 $ 34.89 $ 33.86 $32.42
-------- -------- -------- ------
Total Return(D) 29.44% 19.60% 15.87% 18.99%(B)
Net Assets End of Period (in thousands) $ 14,663 $ 7,862 $ 5,047 $1,953
Ratio of Expenses to Average Net Assets 2.08% 2.21% 2.14%(E) 2.08%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.08% 2.21% 2.14%(E) 2.08%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (1.56)% (1.61)% (1.43)% (1.41)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (1.56)% (1.61)% (1.43)% (1.41)%(A)
Portfolio Turnover Rate 76% 61% 66% 65%(A)
</TABLE>
See notes to financial statements.
106 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
FROM
YEAR ENDED 5/1/97
ENTERPRISE CAPITAL APPRECIATION FUND (CLASS C) DECEMBER 31, 1998 THROUGH 12/31/97
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 35.43 $ 33.54
Net Investment Income (Loss) (0.57)(F) (0.19)
Net Realized and Unrealized Gain (Loss) on
Investments 10.50 7.69
------ ------
Total from Investment Operations 9.93 7.50
------ ------
Dividends from Net Investment Income -- --
Distributions from Capital Gains (7.11) (5.61)
------ ------
Total Distributions (7.11) (5.61)
------ ------
Net Asset Value End of Period $ 38.25 $ 35.43
------ ------
Total Return(D) 29.60% 22.35%(B)
Net Assets End of Period (in thousands) $ 1,040 $ 126
Ratio of Expenses to Average Net Assets 2.11% 2.21%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.11% 2.21%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (1.53)% (1.88)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (1.53)% (1.88)%(A)
Portfolio Turnover Rate 76% 61%(A)
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
ENTERPRISE CAPITAL APPRECIATION FUND (CLASS Y) 5/14/98 THROUGH 12/31/98
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $40.71
Net Investment Income (Loss) (0.15)(F)
Net Realized and Unrealized Gain (Loss) on
Investments 5.34
------
Total from Investment Operations 5.19
------
Dividends from Net Investment Income --
Distributions from Capital Gains (7.11)
------
Total Distributions (7.11)
------
Net Asset Value End of Period $38.79
------
Total Return 14.08%(B)
Net Assets End of Period (in thousands) $ 204
Ratio of Expenses to Average Net Assets 1.05%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.05%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (0.51)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (0.51)%(A)
Portfolio Turnover Rate 76%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 107
<PAGE>
ENTERPRISE SMALL COMPANY GROWTH FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD FROM FOR THE PERIOD
YEAR ENDED 10/1/97 7/17/97
ENTERPRISE SMALL COMPANY GROWTH FUND (CLASS A) DECEMBER 31, 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) (0.32)(F) (0.40) (0.05)
Net Realized and Unrealized Gain (Loss) on
Investments (0.63) (2.27) 2.12
------ ------ ------
Total from Investment Operations (0.95) (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 $ 22.44 $ 23.39 $ 26.61
------ ------ ------
Total Return(C) (4.06)% (10.04)%(B) 8.44%(B)
Net Assets End of Period (in thousands) $ 8,194 $ 4,861 $ 2,102
Ratio of Expenses to Average Net Assets 1.85% 1.85%(A) 1.85%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.66% 2.38%(A) 4.48%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (1.43)% (1.56)%(A) (1.61)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (2.24)% (2.09)%(A) (4.25)%(A)
Portfolio Turnover Rate 151% 24%(A) 158%(A)
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD FROM FOR THE PERIOD
YEAR ENDED 10/1/97 7/17/97
ENTERPRISE SMALL COMPANY GROWTH FUND (CLASS B) DECEMBER 31, 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) (0.41)(F) (0.47) (0.05)
Net Realized and Unrealized Gain (Loss) on
Investments (0.79) (2.23) 2.09
------ ------ ------
Total from Investment Operations (1.20) (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 $ 22.13 $ 23.33 $ 26.58
------ ------ ------
Total Return(D) (5.14)% (10.16)%(B) 8.31%(B)
Net Assets End of Period (in thousands) $ 8,760 $ 2,842 $ 1,099
Ratio of Expenses to Average Net Assets 2.40% 2.40%(A) 2.40%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 3.24% 2.93%(A) 5.52%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (1.94)% (2.11)%(A) (2.18)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (2.78)% (2.64)%(A) (5.29)%(A)
Portfolio Turnover Rate 151% 24%(A) 158%(A)
</TABLE>
See notes to financial statements.
108 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE SMALL COMPANY GROWTH FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED FOR THE PERIOD FOR THE PERIOD
DECEMBER 31, 10/1/97 7/17/97
ENTERPRISE SMALL COMPANY GROWTH FUND (CLASS C) 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) (0.41)(F) (0.62) (0.07)
Net Realized and Unrealized Gain (Loss) on
Investments (0.70) (2.08) 2.10
------ ------- ------
Total from Investment Operations (1.11) (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 $ 22.21 $ 23.32 $ 26.57
------ ------- ------
Total Return(D) (4.76)% (10.16)%(B) 8.27%(B)
Net Assets End of Period (in thousands) $ 2,481 $ 795 $ 201
Ratio of Expenses to Average Net Assets 2.40% 2.40%(A) 2.40%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 3.24% 2.93%(A) 5.91%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (1.93)% (2.11)%(A) (2.15)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (2.77)% (2.64)%(A) (5.65)%(A)
Portfolio Turnover Rate 151% 24%(A) 158%(A)
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
FROM
10/1/97 YEAR YEAR YEAR YEAR
YEAR ENDED THROUGH ENDED ENDED ENDED ENDED
ENTERPRISE SMALL COMPANY GROWTH FUND (CLASS Y) DECEMBER 31, 1998 12/31/97 9/30/97 9/30/96 9/30/95 9/30/94
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 23.43 $ 26.62 $ 25.08 $19.05 $14.01 $14.74
Net Investment Income (Loss) (0.23)(F) (0.07) (0.13) (0.17) (0.12) (0.04)
Net Realized and Unrealized Gain (Loss) on
Investments (0.65) (2.57) 3.73 7.62 5.49 1.58
------- ------- ------- ------- ------- -------
Total from Investment Operations (0.88) (2.64) 3.60 7.45 5.37 1.54
------- ------- ------- ------- ------- -------
Dividends from Net Investment Income -- -- -- -- -- --
Distributions from Capital Gains -- (0.55) (2.06) (1.42) (0.33) (2.27)
------- ------- ------- ------- ------- -------
Total Distributions -- (0.55) (2.06) (1.42) (0.33) (2.27)
------- ------- ------- ------- ------- -------
Net Asset Value End of Period $ 22.55 $ 23.43 $ 26.62 $25.08 $19.05 $14.01
------- ------- ------- ------- ------- -------
Total Return (3.76)% (9.92)%(B) 16.24% 42.07% 39.20% 11.89%
Net Assets End of Period (in thousands) $ 9,084 $13,540 $15,355 $6,609 $2,950 $1,825
Ratio of Expenses to Average Net Assets 1.40% 1.40%(A) 1.84% 1.96% 1.85% 1.85%
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.15% 1.96%(A) 3.08% 3.46% 5.15% 6.16%
Ratio of Net Investment Income (Loss) to Average
Net Assets (1.03)% (1.12)%(A) (1.30)% (1.43)% (1.33)% (1.37)%
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (1.78)% (1.68)%(A) (2.54)% (2.93)% (4.63)% (5.68)%
Portfolio Turnover Rate 151% 24%(A) 158% 78% 84% 73%
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 109
<PAGE>
ENTERPRISE SMALL COMPANY VALUE FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------
ENTERPRISE SMALL COMPANY VALUE FUND (CLASS A) 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) (0.03) 0.01 (0.01) 0.02 0.03
Net Realized and Unrealized Gain (Loss) on
Investments 0.42 2.53 0.62 0.46 (0.01)
------- ------- ------- ------- -------
Total from Investment Operations 0.39 2.54 0.61 0.48 0.02
------- ------- ------- ------- -------
Dividends from Net Investment Income -- -- -- (0.02) (0.03)
Distributions from Capital Gains (0.22) (0.53) (0.30) (0.20) (0.11)
------- ------- ------- ------- -------
Total Distributions (0.22) (0.53) (0.30) (0.22) (0.14)
------- ------- ------- ------- -------
Net Asset Value End of Period $ 7.92 $ 7.75 $ 5.74 $ 5.43 $ 5.17
------- ------- ------- ------- -------
Total Return 5.15% 44.24% 11.28% 9.28% 0.34%
Net Assets End of Period (in thousands) $79,867 $45,310 $17,308 $19,720 $22,120
Ratio of Expenses to Average Net Assets 1.75% 1.75% 1.75% 1.75% 1.75%
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.85% 1.95% 2.38% 2.21% 2.15%
Ratio of Net Investment Income (Loss) to Average
Net Assets (0.37)% 0.05% (0.13)% 0.32% 0.60%
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (0.48)% (0.15)% (0.76)% (0.14)% 0.18%
Portfolio Turnover Rate 33% 63% 144% 37% 17%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, FOR THE PERIOD
------------------------ 5/1/95
ENTERPRISE SMALL COMPANY VALUE FUND (CLASS B) 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) (0.07)(F) -- (0.03) (0.01)
Net Realized and Unrealized Gain (Loss) on
Investments 0.40 2.47 0.61 0.36
------- ------- ------ -----
Total from Investment Operations 0.33 2.47 0.58 0.35
------- ------- ------ -----
Dividends from Net Investment Income -- -- -- (0.02)
Distributions from Capital Gains (0.22) (0.53) (0.30) (0.20)
------- ------- ------ -----
Total Distributions (0.22) (0.53) (0.30) (0.22)
------- ------- ------ -----
Net Asset Value End of Period $ 7.74 $ 7.63 $ 5.69 $ 5.41
------- ------- ------ -----
Total Return(D) 4.44% 43.40% 10.77% 6.87%(B)
Net Assets End of Period (in thousands) $61,929 $22,013 $2,606 $ 862
Ratio of Expenses to Average Net Assets 2.30% 2.30% 2.30% 2.30%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.41% 2.44% 2.92% 2.78%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (0.93)% (0.67)% (0.77)% (0.40)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (1.04)% (0.81)% (1.39)% (0.90)%(A)
Portfolio Turnover Rate 33% 63% 144% 37%(A)
</TABLE>
See notes to financial statements.
110 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE SMALL COMPANY VALUE FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED 5/1/97
ENTERPRISE SMALL COMPANY VALUE FUND (CLASS C) DECEMBER 31, 1998 THROUGH 12/31/97
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 7.74 $ 6.14
Net Investment Income (Loss) (0.07)(F) (0.02)
Net Realized and Unrealized Gain (Loss) on
Investments 0.45 2.15
------- ------
Total from Investment Operations 0.38 2.13
------- ------
Dividends from Net Investment Income -- --
Distributions from Capital Gains (0.22) (0.53)
------- ------
Total Distributions (0.22) (0.53)
------- ------
Net Asset Value End of Period $ 7.90 $ 7.74
------- ------
Total Return(D) 5.03% 34.68%(B)
Net Assets End of Period (in thousands) $14,239 $2,684
Ratio of Expenses to Average Net Assets 2.30% 2.30%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.40% 2.38%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (0.94)% (0.88)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (1.04)% (0.95)%(A)
Portfolio Turnover Rate 33% 63%(A)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, FOR THE PERIOD
------------------------------- 5/25/95
ENTERPRISE 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(F) 1.45 0.01 0.04
Net Realized and Unrealized Gain (Loss) on
Investments 0.46 1.12 0.63 0.26
--------- -------- -------- ------
Total from Investment Operations 0.47 2.57 0.64 0.30
--------- -------- -------- ------
Dividends from Net Investment Income -- -- -- (0.04)
Distributions from Capital Gains (0.22) (0.53) (0.30) (0.20)
--------- -------- -------- ------
Total Distributions (0.22) (0.53) (0.30) (0.24)
--------- -------- -------- ------
Net Asset Value End of Period $ 8.06 $ 7.81 $ 5.77 $ 5.43
--------- -------- -------- ------
Total Return 6.13% 44.53% 11.83% 5.55%(B)
Net Assets End of Period (in thousands) $ 277 $ 119 $ 1,926 $ 2,832
Ratio of Expenses to Average Net Assets 1.30% 1.30% 1.30% 1.30%(A)
Ratio of Expenses to Average Net Assets (Excludung
Waivers) 1.39% 1.85% 1.92% 1.81%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 0.06% 2.74% 0.35% 0.18%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (0.02)% 2.19% (0.27)% (0.33)%(A)
Portfolio Turnover Rate 33% 63% 144% 37%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 111
<PAGE>
ENTERPRISE INTERNATIONAL GROWTH FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------
ENTERPRISE INTERNATIONAL GROWTH FUND (CLASS A) 1998 1997 1996 1995 1994
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 16.71 $ 17.10 $ 16.08 $ 14.70 $ 17.44
Net Investment Income (Loss) 0.06 0.08 0.10 0.11 (0.01)
Net Realized and Unrealized Gain (Loss) on
Investments 2.32 0.73 1.88 2.12 (0.49)
-------- -------- -------- -------- --------
Total from Investment Operations 2.38 0.81 1.98 2.23 (0.50)
-------- -------- -------- -------- --------
Dividends from Net Investment Income (0.05) (0.07) (0.09) (0.09) --
Distributions from Capital Gains (0.15) (1.13) (0.87) (0.76) (2.24)
-------- -------- -------- -------- --------
Total Distributions (0.20) (1.20) (0.96) (0.85) (2.24)
-------- -------- -------- -------- --------
Net Asset Value End of Period $ 18.89 $ 16.71 $ 17.10 $ 16.08 $ 14.70
-------- -------- -------- -------- --------
Total Return(C) 14.28% 4.75% 12.32% 15.17% (2.82)%
Net Assets End of Period (in thousands) $ 41,458 $ 38,020 $ 34,837 $ 28,628 $ 27,523
Ratio of Expenses to Average Net Assets 2.00% 2.00% 2.00% 2.00% 2.00%
Ratio of Expenses to Average Net Assets( Excluding
Waivers) 2.11% 2.11% 2.19% 2.40% 2.51%
Ratio of Net Investment Income (Loss) to Average
Net Assets 0.30% 0.50% 0.61% 0.70% (0.20)%
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 0.19% 0.39% 0.42% 0.30% (0.70)%
Portfolio Turnover Rate 52% 27% 24% 31% 116%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, FOR THE PERIOD
------------------------------ 7/5/95
ENTERPRISE 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 2.28 0.69 1.87 2.08
-------- -------- -------- ------
Total from Investment Operations 2.24 0.70 1.88 2.06
-------- -------- -------- ------
Dividends from Net Investment Income -- (0.01) (0.06) (0.10)
Distributions from Capital Gains (0.15) (1.13) (0.87) (0.76)
-------- -------- -------- ------
Total Distributions (0.15) (1.14) (0.93) (0.86)
-------- -------- -------- ------
Net Asset Value End of Period $ 18.62 $ 16.53 $ 16.97 $16.02
-------- -------- -------- ------
Total Return(D) 13.57% 4.17% 11.72% 13.88%(B)
Net Assets End of Period (in thousands) $ 16,008 $ 9,878 $ 4,276 $1,094
Ratio of Expenses to Average Net Assets 2.55% 2.55% 2.55% 2.55%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.66% 2.67% 2.75% 2.75%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (0.28)% (0.06)% 0.09% (0.65)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (0.39)% (0.18)% (0.11)% (0.85)%(A)
Portfolio Turnover Rate 52% 27% 24% 31%(A)
</TABLE>
See notes to financial statements.
112 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE INTERNATIONAL GROWTH FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED 5/1/97
ENTERPRISE INTERNATIONAL GROWTH FUND (CLASS C) DECEMBER 31, 1998 THROUGH 12/31/97
- -----------------------------------------------------------------------------------------------------------
<S> <C> <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 2.31 0.39
------ ------
Total from Investment Operations 2.27 0.36
------ ------
Dividends from Net Investment Income (0.01) (0.08)
Distributions from Capital Gains (0.15) (1.13)
------ ------
Total Distributions (0.16) (1.21)
------ ------
Net Asset Value End of Period $ 18.77 $ 16.66
------ ------
Total Return(D) 13.64% 2.07%(B)
Net Assets End of Period (in thousands) $ 3,498 $ 1,113
Ratio of Expenses to Average Net Assets 2.55% 2.55%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.67% 2.75%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (0.35)% (0.51)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (0.47)% (0.71)%(A)
Portfolio Turnover Rate 52% 27%(A)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, FOR THE PERIOD
------------------------------ 7/5/95
ENTERPRISE 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) 0.14 0.17 0.14 0.02
Net Realized and Unrealized Gain (Loss) on
Investments 2.32 0.72 1.92 2.02
-------- -------- -------- ------
Total from Investment Operations 2.46 0.89 2.06 2.04
-------- -------- -------- ------
Dividends from Net Investment Income (0.14) (0.15) (0.16) (0.14)
Distributions from Capital Gains (0.15) (1.13) (0.87) (0.76)
-------- -------- -------- ------
Total Distributions (0.29) (1.28) (1.03) (0.90)
-------- -------- -------- ------
Net Asset Value End of Period $ 18.88 $ 16.71 $ 17.10 $16.07
-------- -------- -------- ------
Total Return 14.73% 5.21% 12.86% 13.65%(B)
Net Assets End of Period (in thousands) $ 13,379 $ 10,986 $ 8,828 $3,109
Ratio of Expenses to Average Net Assets 1.55% 1.55% 1.55% 1.55%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.66% 1.66% 1.75% 1.75%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 0.75% 0.95% 1.03% 0.26%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 0.64% 0.84% 0.84% 0.05%(A)
Portfolio Turnover Rate 52% 27% 24% 31%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 113
<PAGE>
ENTERPRISE GLOBAL FINANCIAL SERVICES FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
ENTERPRISE GLOBAL FINANCIAL SERVICES FUND (CLASS 10/1/98 THROUGH
A) 12/31/98
- ---------------------------------------------------------------------
<S> <C>
Net Asset Value Beginning of Period $ 5.00
Net Investment Income (Loss) 0.01
Net Realized and Unrealized Gain (Loss) on
Investments 1.04
------
Total from Investment Operations 1.05
------
Dividends from Net Investment Income --
Distributions from Capital Gains --
------
Total Distributions --
------
Net Asset Value End of Period $ 6.05
------
Total Return(C) 21.00%(B)
Net Assets End of Period (in thousands) $ 1,426
Ratio of Expenses to Average Net Assets 1.75%(A)
Ratio of Expenses to Average Net Assets( Excluding
Waivers) 6.58%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 0.16%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (4.68)%(A)
Portfolio Turnover Rate 2%
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
ENTERPRISE GLOBAL FINANCIAL SERVICES FUND (CLASS 10/1/98 THROUGH
B) 12/31/98
- ---------------------------------------------------------------------
<S> <C>
Net Asset Value Beginning of Period $ 5.00
Net Investment Income (Loss) 0.01
Net Realized and Unrealized Gain (Loss) on
Investments 1.02
------
Total from Investment Operations 1.03
------
Dividends from Net Investment Income --
Distributions from Capital Gains --
------
Total Distributions --
------
Net Asset Value End of Period $ 6.03
------
Total Return(D) 20.60%(B)
Net Assets End of Period (in thousands) $ 1,023
Ratio of Expenses to Average Net Assets 2.30%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 7.50%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (0.49)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (5.69)%(A)
Portfolio Turnover Rate 2%
</TABLE>
See notes to financial statements.
114 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE GLOBAL FINANCIAL SERVICES FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
ENTERPRISE GLOBAL FINANCIAL SERVICES FUND (CLASS 10/1/98 THROUGH
C) 12/31/98
- ---------------------------------------------------------------------
<S> <C>
Net Asset Value Beginning of Period $ 5.00
Net Investment Income (Loss) 0.01
Net Realized and Unrealized Gain (Loss) on
Investments 1.02
------
Total from Investment Operations 1.03
------
Dividends from Net Investment Income --
Distributions from Capital Gains --
------
Total Distributions --
------
Net Asset Value End of Period $ 6.03
------
Total Return(D) 20.60%(B)
Net Assets End of Period (in thousands) $ 218
Ratio of Expenses to Average Net Assets 2.30%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 6.42%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (0.33)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (4.45)%(A)
Portfolio Turnover Rate 2%
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
ENTERPRISE GLOBAL FINANCIAL SERVICES FUND (CLASS 10/1/98 THROUGH
Y) 12/31/98
- ---------------------------------------------------------------------
<S> <C>
Net Asset Value Beginning of Period $ 5.00
Net Investment Income (Loss) 0.01
Net Realized and Unrealized Gain (Loss) on
Investments 1.04
------
Total from Investment Operations 1.05
------
Dividends from Net Investment Income --
Distributions from Capital Gains --
------
Total Distributions --
------
Net Asset Value End of Period $ 6.05
------
Total Return 21.00%(B)
Net Assets End of Period (in thousands) $ 5,697
Ratio of Expenses to Average Net Assets 1.30%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 5.09%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 0.61%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) (3.18)%(A)
Portfolio Turnover Rate 2%
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 115
<PAGE>
ENTERPRISE GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
ENTERPRISE GOVERNMENT SECURITIES FUND (CLASS A) 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 12.03 $ 11.80 $ 11.83 $ 10.62 $ 12.44
Net Investment Income (Loss) 0.68 0.73 0.74 0.76 0.87
Net Realized and Unrealized Gain (Loss) on
Investments 0.12 0.23 (0.03) 1.21 (1.82)
--------- --------- --------- --------- ---------
Total from Investment Operations 0.80 0.96 0.71 1.97 (0.95)
--------- --------- --------- --------- ---------
Dividends from Net Investment Income (0.68) (0.73) (0.74) (0.76) (0.87)
Distributions from Capital Gains -- -- -- -- --
--------- --------- --------- --------- ---------
Total Distributions (0.68) (0.73) (0.74) (0.76) (0.87)
--------- --------- --------- --------- ---------
Net Asset Value End of Period $ 12.15 $ 12.03 $ 11.80 $ 11.83 $ 10.62
--------- --------- --------- --------- ---------
Total Return(C) 6.82% 8.39% 6.29% 19.00% (7.81)%
Net Assets End of Period (in thousands) $ 71,609 $ 68,639 $ 73,693 $ 86,224 $ 84,431
Ratio of Expenses to Average Net Assets 1.30% 1.30% 1.30% 1.30% 1.30%
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.38% 1.46% 1.42% 1.44% 1.35%
Ratio of Net Investment Income (Loss) to Average
Net Assets 5.61% 6.16% 6.35% 6.66% 7.60%
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 5.53% 6.00% 6.23% 6.52% 7.59%
Portfolio Turnover Rate 8% 10% 0% 0% 27%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, FOR THE PERIOD
------------------------------- 5/1/95
ENTERPRISE GOVERNMENT SECURITIES FUND (CLASS B) 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) 0.61 0.66 0.68 0.44
Net Realized and Unrealized Gain (Loss) on
Investments 0.12 0.23 (0.04) 0.71
--------- --------- --------- ------
Total from Investment Operations 0.73 0.89 0.64 1.15
--------- --------- --------- ------
Dividends from Net Investment Income (0.61) (0.66) (0.68) (0.44)
Distributions from Capital Gains -- -- -- --
--------- --------- --------- ------
Total Distributions (0.61) (0.66) (0.68) (0.44)
--------- --------- --------- ------
Net Asset Value End of Period $ 12.14 $ 12.02 $ 11.79 $ 11.83
--------- --------- --------- ------
Total Return(D) 6.24% 7.81% 5.61% 10.47%(B)
Net Assets End of Period (in thousands) $ 27,134 $ 12,285 $ 5,683 $ 2,124
Ratio of Expenses to Average Net Assets 1.85% 1.85% 1.85% 1.85%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.93% 2.01% 1.96% 1.91%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 5.00% 5.55% 5.79% 5.64%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 4.91% 5.39% 5.68% 5.58%(A)
Portfolio Turnover Rate 8% 10% 0% 0%(A)
</TABLE>
See notes to financial statements.
116 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED FOR THE PERIOD
DECEMBER 31, 5/1/97
ENTERPRISE GOVERNMENT SECURITIES FUND (CLASS C) 1998 THROUGH 12/31/97
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 12.03 $ 11.63
Net Investment Income (Loss) 0.62 0.46
Net Realized and Unrealized Gain (Loss) on
Investments 0.11 0.40
------ ------
Total from Investment Operations 0.73 0.86
------ ------
Dividends from Net Investment Income (0.62) (0.46)
Distributions from Capital Gains -- --
------ ------
Total Distributions (0.62) (0.46)
------ ------
Net Asset Value End of Period $ 12.14 $ 12.03
------ ------
Total Return(D) 6.15% 7.49%(B)
Net Assets End of Period (in thousands) $ 3,089 $ 498
Ratio of Expenses to Average Net Assets 1.85% 1.85%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.94% 2.03%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 4.97% 5.39%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 4.88% 5.21%(A)
Portfolio Turnover Rate 8% 10%(A)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED FOR THE PERIOD
DECEMBER 31, 7/17/97
ENTERPRISE GOVERNMENT SECURITIES FUND (CLASS Y) 1998 THROUGH 12/31/97
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 12.02 $ 11.87
Net Investment Income (Loss) 0.74 0.35
Net Realized and Unrealized Gain (Loss) on
Investments 0.12 0.15
------ ------
Total from Investment Operations 0.86 0.50
------ ------
Dividends from Net Investment Income (0.74) (0.35)
Distributions from Capital Gains -- --
------ ------
Total Distributions (0.74) (0.35)
------ ------
Net Asset Value End of Period $ 12.14 $ 12.02
------ ------
Total Return 7.30% 4.02%(B)
Net Assets End of Period (in thousands) $ 7,281 $ 7,569
Ratio of Expenses to Average Net Assets 0.85% 0.85%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 0.93% 1.02%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 6.06% 6.40%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 5.98% 6.23%(A)
Portfolio Turnover Rate 8% 10%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 117
<PAGE>
ENTERPRISE HIGH-YIELD BOND FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
ENTERPRISE HIGH-YIELD BOND FUND (CLASS A) 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 12.35 $ 11.84 $ 11.39 $ 10.72 $ 11.70
Net Investment Income (Loss) 0.94 0.99 0.94 0.99 0.97
Net Realized and Unrealized Gain (Loss) on
Investments (0.66) 0.51 0.45 0.67 (0.97)
--------- --------- --------- --------- ---------
Total from Investment Operations 0.28 1.50 1.39 1.66 --
--------- --------- --------- --------- ---------
Dividends from Net Investment Income (0.94) (0.99) (0.94) (0.99) (0.98)
Distributions from Capital Gains (0.16) -- -- -- --
--------- --------- --------- --------- ---------
Total Distributions (1.10) (0.99) (0.94) (0.99) (0.98)
--------- --------- --------- --------- ---------
Net Asset Value End of Period $ 11.53 $ 12.35 $ 11.84 $ 11.39 $ 10.72
--------- --------- --------- --------- ---------
Total Return(C) 2.29% 13.18% 12.78% 16.00% 0.05%
Net Assets End of Period (in thousands) $ 72,637 $ 66,422 $ 54,129 $ 52,182 $ 44,822
Ratio of Expenses to Average Net Assets 1.30% 1.30% 1.30% 1.30% 1.30%
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.44% 1.47% 1.50% 1.52% 1.45%
Ratio of Net Investment Income (Loss) to Average
Net Assets 7.72% 8.20% 8.21% 8.80% 8.60%
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 7.58% 8.03% 8.01% 8.58% 8.52%
Portfolio Turnover Rate 114% 175% 180% 89% 113%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, FOR THE PERIOD
------------------------------- 5/1/95
ENTERPRISE HIGH-YIELD BOND FUND (CLASS B) 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) 0.87 0.77 0.88 0.61
Net Realized and Unrealized Gain (Loss) on
Investments (0.67) 0.51 0.45 0.28
--------- --------- --------- ------
Total from Investment Operations 0.20 1.28 1.33 0.89
--------- --------- --------- ------
Dividends from Net Investment Income (0.87) (0.77) (0.88) (0.61)
Distributions from Capital Gains (0.16) -- -- --
--------- --------- --------- ------
Total Distributions (1.03) (0.77) (0.88) (0.61)
--------- --------- --------- ------
Net Asset Value End of Period $ 11.52 $ 12.35 $ 11.84 $ 11.39
--------- --------- --------- ------
Total Return(D) 1.64% 12.59% 12.16% 8.12%(B)
Net Assets End of Period (in thousands) $ 35,495 $ 19,898 $ 7,892 $ 2,951
Ratio of Expenses to Average Net Assets 1.85% 1.85% 1.85% 1.85%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.99% 2.02% 2.05% 2.09%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 7.20% 7.51% 7.74% 7.84%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 7.06% 7.35% 7.55% 7.68%(A)
Portfolio Turnover Rate 114% 175% 180% 89%(A)
</TABLE>
See notes to financial statements.
118 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE HIGH-YIELD BOND FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED 5/1/97
ENTERPRISE HIGH-YIELD BOND FUND (CLASS C) DECEMBER 31, 1998 THROUGH 12/31/97
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 12.35 $ 11.71
Net Investment Income (Loss) 0.87 0.61
Net Realized and Unrealized Gain (Loss) on
Investments (0.66) 0.64
------ ------
Total from Investment Operations 0.21 1.25
------ ------
Dividends from Net Investment Income (0.87) (0.61)
Distributions from Capital Gains (0.16) --
------ ------
Total Distributions (1.03) (0.61)
------ ------
Net Asset Value End of Period $ 11.53 $ 12.35
------ ------
Total Return(D) 1.72% 10.87%(B)
Net Assets End of Period (in thousands) $ 5,392 $ 1,463
Ratio of Expenses to Average Net Assets 1.85% 1.85%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.99% 2.01%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 7.27% 6.84%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 7.13% 6.68%(A)
Portfolio Turnover Rate 114% 175%(A)
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED 7/25/97
ENTERPRISE HIGH-YIELD BOND FUND (CLASS Y) DECEMBER 31, 1998 THROUGH 12/31/97
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 12.35 $ 12.17
Net Investment Income (Loss) 0.99 0.67
Net Realized and Unrealized Gain (Loss) on
Investments (0.68) 0.18
------ ------
Total from Investment Operations 0.31 0.85
------ ------
Dividends from Net Investment Income (0.99) (0.67)
Distributions from Capital Gains (0.16) --
------ ------
Total Distributions (1.15) (0.67)
------ ------
Net Asset Value End of Period $ 11.51 $ 12.35
------ ------
Total Return 2.49% 5.24%(B)
Net Assets End of Period (in thousands) $ 2,032 $ 809
Ratio of Expenses to Average Net Assets 0.85% 0.85%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.00% 1.02%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 8.30% 8.26%(A)
Ratio of Net Investment Income (Loss) to Avg Net
Assets (Excluding Waivers) 8.16% 8.09%(A)
Portfolio Turnover Rate 114% 175%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 119
<PAGE>
ENTERPRISE TAX-EXEMPT INCOME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
ENTERPRISE TAX-EXEMPT INCOME FUND (CLASS A) 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 13.95 $ 13.83 $ 13.99 $ 12.80 $ 14.31
Net Investment Income (Loss) 0.60 0.63 0.64 0.65 0.67
Net Realized and Unrealized Gain (Loss) on
Investments 0.20 0.31 (0.16) 1.21 (1.48)
--------- --------- --------- --------- ---------
Total from Investment Operations 0.80 0.94 0.48 1.86 (0.81)
--------- --------- --------- --------- ---------
Dividends from Net Investment Income (0.60) (0.63) (0.64) (0.65) (0.68)
Distributions from Capital Gains (0.31) (0.19) -- (0.02) (0.02)
--------- --------- --------- --------- ---------
Total Distributions (0.91) (0.82) (0.64) (0.67) (0.70)
--------- --------- --------- --------- ---------
Net Asset Value End of Period $ 13.84 $ 13.95 $ 13.83 $ 13.99 $ 12.80
--------- --------- --------- --------- ---------
Total Return(C) 5.92% 6.96% 3.54% 14.85% (5.69)%
Net Assets End of Period (in thousands) $ 23,710 $ 23,695 $ 28,478 $ 33,626 $ 34,297
Ratio of Expenses to Average Net Assets 1.10% 1.22% 1.25% 1.25% 1.25%
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.40% 1.60% 1.41% 1.42% 1.28%
Ratio of Net Investment Income (Loss) to Average
Net Assets 4.30% 4.50% 4.64% 4.82% 5.00%
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 4.00% 4.12% 4.48% 4.65% 4.97%
Portfolio Turnover Rate 100% 1% 1% 1% 26%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, FOR THE PERIOD
--------------------------- 5/1/95
ENTERPRISE 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) 0.53 0.55 0.56 0.38
Net Realized and Unrealized Gain (Loss) on
Investments 0.20 0.31 (0.16) 0.57
------- ------- ------- ------
Total from Investment Operations 0.73 0.86 0.40 0.95
------- ------- ------- ------
Dividends from Net Investment Income (0.53) (0.55) (0.56) (0.38)
Distributions from Capital Gains (0.31) (0.19) -- (0.02)
------- ------- ------- ------
Total Distributions (0.84) (0.74) (0.56) (0.40)
------- ------- ------- ------
Net Asset Value End of Period $ 13.84 $ 13.95 $ 13.83 $13.99
------- ------- ------- ------
Total Return(D) 5.33% 6.36% 2.96% 7.18%(B)
Net Assets End of Period (in thousands) $ 4,451 $ 2,883 $ 2,037 $ 912
Ratio of Expenses to Average Net Assets 1.65% 1.76% 1.80% 1.80%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.96% 2.16% 1.96% 1.98%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 3.71% 3.94% 4.07% 4.08%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 3.41% 3.54% 3.92% 3.94%(A)
Portfolio Turnover Rate 100% 1% 1% 1%(A)
</TABLE>
See notes to financial statements.
120 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE TAX EXEMPT INCOME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED 5/1/97
ENTERPRISE TAX-EXEMPT INCOME FUND (CLASS C) DECEMBER 31, 1998 THROUGH 12/31/97
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 13.95 $ 13.68
Net Investment Income (Loss) 0.53 0.36
Net Realized and Unrealized Gain (Loss) on
Investments 0.20 0.46
------ ------
Total from Investment Operations 0.73 0.82
------ ------
Dividends from Net Investment Income (0.53) (0.36)
Distributions from Capital Gains (0.31) (0.19)
------ ------
Total Distributions (0.84) (0.55)
------ ------
Net Asset Value End of Period $ 13.84 $ 13.95
------ ------
Total Return(D) 5.34% 6.14%(B)
Net Assets End of Period (in thousands) $ 777 $ 184
Ratio of Expenses to Average Net Assets 1.65% 1.67%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.93% 2.34%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 3.71% 3.99%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 3.43% 3.32%(A)
Portfolio Turnover Rate 100% 1%(A)
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
11/17/98
ENTERPRISE TAX-EXEMPT INCOME FUND (CLASS Y) THROUGH 12/31/98
- ---------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 14.12
Net Investment Income (Loss) 0.07
Net Realized and Unrealized Gain (Loss) on
Investments 0.03
------
Total from Investment Operations 0.10
------
Dividends from Net Investment Income (0.07)
Distributions from Capital Gains (0.31)
------
Total Distributions (0.38)
------
Net Asset Value End of Period $ 13.84
------
Total Return 0.75%(B)
Net Assets End of Period (in thousands) $ 65
Ratio of Expenses to Average Net Assets 0.65%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 0.95%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 4.75%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 4.45%(A)
Portfolio Turnover Rate 100%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 121
<PAGE>
ENTERPRISE MANAGED FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, FOR THE PERIOD
------------------------------------- 10/1/94
ENTERPRISE MANAGED FUND (CLASS A) 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) 0.06 0.04 0.06 0.04 0.01
Net Realized and Unrealized Gain (Loss) on Investments 0.58 1.64 1.41 1.81 (0.09)
-------- -------- -------- ------- ------
Total from Investment Operations 0.64 1.68 1.47 1.85 (0.08)
-------- -------- -------- ------- ------
Dividends from Net Investment Income (0.05) (0.04) (0.06) (0.03) (0.01)
Distributions from Capital Gains (0.58) (0.36) (0.14) (0.03) --
-------- -------- -------- ------- ------
Total Distributions (0.63) (0.40) (0.20) (0.06) (0.01)
-------- -------- -------- ------- ------
Net Asset Value End of Period $ 9.26 $ 9.25 $ 7.97 $ 6.70 $ 4.91
-------- -------- -------- ------- ------
Total Return(C) 7.05% 21.05% 22.08% 37.68% (1.58)%(B)
Net Assets End of Period (in thousands) $175,084 $156,608 $101,022 $47,839 $ 7,872
Ratio of Expenses to Average Net Assets 1.50% 1.49% 1.57% 1.75% 1.75%(A)
Ratio of Expenses to Average Net Assets (Excluding Waivers) 1.50% 1.49% 1.57% 1.90% 3.71%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 0.57% 0.47% 1.12% 1.09% 1.30%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers) 0.57% 0.47% 1.12% 0.94% (0.32)%(A)
Portfolio Turnover Rate 43% 28% 33% 26% 27%(A)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, FOR THE PERIOD
--------------------------- 5/1/95
ENTERPRISE MANAGED FUND (CLASS B) 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 0.57 1.63 1.41 1.05
-------- -------- ------- -------
Total from Investment Operations 0.57 1.62 1.43 1.06
-------- -------- ------- -------
Dividends from Net Investment Income (0.01) -- (0.04) (0.03)
Distributions from Capital Gains (0.58) (0.36) (0.14) (0.03)
-------- -------- ------- -------
Total Distributions (0.59) (0.36) (0.18) (0.06)
-------- -------- ------- -------
Net Asset Value End of Period $ 9.17 $ 9.19 $ 7.93 $ 6.68
-------- -------- ------- -------
Total Return(D) 6.31% 20.45% 21.50% 18.38%(B)
Net Assets End of Period (in thousands) $161,552 $110,213 $57,037 $16,792
Ratio of Expenses to Average Net Assets 2.05% 2.04% 2.13% 2.30%(A)
Ratio of Expenses to Average Net Assets (Excluding Waivers) 2.05% 2.04% 2.13% 2.45%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 0.02% (0.09)% 0.52% 0.31%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers) 0.02% (0.09)% 0.52% 0.14%(A)
Portfolio Turnover Rate 43% 28% 33% 26%(A)
</TABLE>
See notes to financial statements.
122 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE MANAGED FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED 5/1/97
ENTERPRISE MANAGED FUND (CLASS C) DECEMBER 31, 1998 THROUGH 12/31/97
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 9.21 $ 8.24
Net Investment Income (Loss) (0.01) --
Net Realized and Unrealized Gain (Loss) on
Investments 0.49 1.38
------- ------
Total from Investment Operations 0.48 1.38
------- ------
Dividends from Net Investment Income (0.02) (0.05)
Distributions from Capital Gains (0.58) (0.36)
------- ------
Total Distributions (0.60) (0.41)
------- ------
Net Asset Value End of Period $ 9.09 $ 9.21
------- ------
Total Return(D) 5.36% 16.74%(B)
Net Assets End of Period (in thousands) $ 11,654 $ 3,614
Ratio of Expenses to Average Net Assets 2.05% 2.06%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 2.05% 2.06%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 0.02% (0.18)%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 0.02% (0.18)%(A)
Portfolio Turnover Rate 43% 28%(A)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, FOR THE PERIOD
-------------------------- 7/5/95
ENTERPRISE MANAGED FUND (CLASS Y) 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) 0.10 0.08 0.09 0.03
Net Realized and Unrealized Gain (Loss) on
Investments 0.55 1.64 1.42 0.57
-------- ------- ------- -------
Total from Investment Operations 0.65 1.72 1.51 0.60
-------- ------- ------- -------
Dividends from Net Investment Income (0.09) (0.07) (0.09) (0.04)
Distributions from Capital Gains (0.58) (0.36) (0.14) (0.03)
-------- ------- ------- -------
Total Distributions (0.67) (0.43) (0.23) (0.07)
-------- ------- ------- -------
Net Asset Value End of Period $ 9.25 $ 9.27 $ 7.98 $ 6.70
-------- ------- ------- -------
Total Return 7.20% 21.60% 22.63% 9.80%(B)
Net Assets End of Period (in thousands) $ 89,084 $80,879 $57,794 $26,664
Ratio of Expenses to Average Net Assets 1.05% 1.04% 1.12% 1.30%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 1.05% 1.04% 1.12% 1.41%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 1.01% 0.92% 1.57% 1.39%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 1.01% 0.92% 1.57% 1.28%(A)
Portfolio Turnover Rate 43% 28% 33% 26%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 123
<PAGE>
ENTERPRISE MONEY MARKET FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
----------------------------------------------------
ENTERPRISE MONEY MARKET FUND (CLASS A) 1998 1997 1996 1995 1994
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net Investment Income (Loss) 0.05 0.05 0.04 0.05 0.03
-------- -------- -------- -------- --------
Total from Investment Operations 0.05 0.05 0.04 0.05 0.03
-------- -------- -------- -------- --------
Dividends from Net Investment Income (0.05) (0.05) (0.04) (0.05) (0.03)
-------- -------- -------- -------- --------
Total Distributions (0.05) (0.05) (0.04) (0.05) (0.03)
-------- -------- -------- -------- --------
Net Asset Value End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Total Return 5.04% 4.69% 4.51% 5.05% 3.34%
Net Assets End of Period (in thousands) $140,490 $ 68,466 $ 59,074 $ 40,325 $ 32,334
Ratio of Expenses to Average Net Assets 0.64% 1.00% 1.00% 1.00% 1.00%
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 0.64% 1.24% 1.18% 1.35% 1.33%
Ratio of Net Investment Income (Loss) to Average
Net Assets 4.91% 4.59% 4.42% 4.92% 3.30%
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 4.91% 4.35% 4.24% 4.57% 3.08%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, FOR THE PERIOD
------------------------------- 5/1/95
ENTERPRISE MONEY MARKET FUND (CLASS B) 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) 0.05 0.04 0.04 0.03
--------- --------- --------- -----
Total from Investment Operations 0.05 0.04 0.04 0.03
--------- --------- --------- -----
Dividends from Net Investment Income (0.05) (0.04) (0.04) (0.03)
--------- --------- --------- -----
Total Distributions (0.05) (0.04) (0.04) (0.03)
--------- --------- --------- -----
Net Asset Value End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- -----
Total Return(D) 5.04% 4.11% 3.94% 2.95%(B)
Net Assets End of Period (in thousands) $ 10,147 $ 5,980 $ 1,344 $ 394
Ratio of Expenses to Average Net Assets 0.64% 1.55% 1.55% 1.55%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 0.64% 1.79% 1.73% 1.88%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 4.91% 4.09% 3.85% 4.23%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 4.91% 3.85% 3.68% 3.90%(A)
</TABLE>
See notes to financial statements.
124 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
ENTERPRISE MONEY MARKET FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED 5/1/97
ENTERPRISE MONEY MARKET FUND (CLASS C) DECEMBER 31, 1998 THROUGH 12/31/97
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 1.00 $ 1.00
Net Investment Income (Loss) 0.05 0.02
------ ------
Total from Investment Operations 0.05 0.02
------ ------
Dividends from Net Investment Income (0.05) (0.02)
------ ------
Total Distributions (0.05) (0.02)
------ ------
Net Asset Value End of Period $ 1.00 $ 1.00
------ ------
Total Return(D) 5.04% 2.86%(B)
Net Assets End of Period (in thousands) $ 4,680 $ 1,021
Ratio of Expenses to Average Net Assets 0.63% 1.55%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 0.63% 1.85%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 4.90% 4.15%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 4.90% 3.85%(A)
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED 7/17/97
ENTERPRISE MONEY MARKET FUND (CLASS Y) DECEMBER 31, 1998 THROUGH 12/31/97
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 1.00 $ 1.00
Net Investment Income (Loss) 0.05 0.02
------ ------
Total from Investment Operations 0.05 0.02
------ ------
Dividends from Net Investment Income (0.05) (0.02)
------ ------
Total Distributions (0.05) (0.02)
------ ------
Net Asset Value End of Period $ 1.00 $ 1.00
------ ------
Total Return 5.04% 2.31%(B)
Net Assets End of Period (in thousands) $ 3,413 $ 2,700
Ratio of Expenses to Average Net Assets 0.65% 0.70%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers) 0.65% 0.95%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets 4.92% 4.96%(A)
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers) 4.92% 4.71%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE GROUP OF FUNDS, INC. 125
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
December 31, 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, Global
Financial Services, 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 percent. Class B
shares are subject to a maximum contingent deferred sales charge of 5 percent,
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 deferred sales charge of 1 percent,
which declines to zero after one year and which is based on the lesser of net
asset value at the time of purchase or redemption. Class Y shares are not
subject to sales charges.
2. SIGNIFICANT ACCOUNTING POLICIES
VALUATION OF INVESTMENTS -- Investment securities, other than debt securities,
listed on either a national or foreign securities exchange or traded in the
over-the-counter National Market System are valued each business day at the last
reported sales price; if there are no such reported sales, the securities are
valued at their last quoted bid price. Other securities traded over-the-counter
and not part of the National Market System are valued at the last quoted bid
price. Debt securities (other than certain short-term obligations) are valued
each business day by an independent pricing service approved by the Board of
Directors. Short-term debt securities having a remaining maturity of sixty days
or less are valued at amortized cost, which approximates market value. Any
securities for which market quotations are not readily available are valued at
their fair value as determined in good faith by the Board of Directors.
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 percent.
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
126 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- (Continued)
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
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. Repurchase agreements could
involve certain risks in the event of default or insolvency of the selling
institution, including costs of disposing of securities held as collateral and
any loss resulting from delays or restrictions upon the Fund's ability to
dispose of securities.
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.
FOREIGN CURRENCY TRANSLATION -- Securities, other assets and liabilities of the
International Growth Fund and the Global Financial Services 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
on the valuation date. Dividend and interest income and certain expenses
denominated in foreign currencies are translated to U.S. dollars based on the
exchange rates in effect on the date income is earned and the expense is
incurred; and exchange gains and losses are realized upon ultimate receipt or
disbursement. Neither the International Growth Fund nor the Global Financial
Services Fund isolate that portion of realized and unrealized gains on
investments from changes in foreign exchange rates from fluctuations arising
from changes in the market prices of the investments.
SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are
accounted for on the trade date. Realized gains and losses from investment
transactions are determined on the basis of identified cost and realized gains
and losses from currency transactions are determined on the basis of average
cost. Dividend income received and distributions to shareholders are recognized
on the ex-dividend date, and interest income is recognized on the accrual basis.
Premiums and discounts on securities are amortized for both financial and tax
purposes.
EXPENSES -- Each 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.
THE ENTERPRISE GROUP OF FUNDS, INC. 127
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- (Continued)
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
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 a Distributor's Agreement and Plan of Distribution
(the "Plan") pursuant to rule 12b-1 under the Investment Company Act of 1940.
The Plan provides that each 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%
Global Financial Services .85% .45% 1.00% 1.00% none 1.75% 2.30% 2.30% 1.30%
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>
128 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- (Continued)
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
ECM is a wholly-owned subsidiary of MONY Life Insurance Company, which is
wholly-owned by The MONY Group Inc. The MONY Group Inc. and its subsidiaries and
affiliates had the following investments in EGF as of December 31, 1998:
<TABLE>
<CAPTION>
FUND A B C Y
- ------------------------------------------------------ ------------- --------- ----------- --------------
<S> <C> <C> <C> <C>
Growth $ 481,131 -- $ 1,517 $ 581,196
Equity 1,318,938 $ 1,308 1,311 50,796
Growth and Income 1,184 1,179 1,180 25,396
Equity Income 991,465 -- 1,197 101,282
Capital Appreciation 121,125 -- 1,321 180,742
Small Company Growth 936 923 926 31,058
Small Company Value 206,012 -- 1,419 208,365
International Growth 2,638,275 -- 1,158 13,309,748
Global Financial Services 24,200 -- 120,600 5,701,355
Government Securities 918,985 -- 1,086 --
High-Yield Bond 100,987 -- 1,038 46,789
Tax-Exempt Income -- -- 1,054 49,008
Managed 3,122,170 -- 1,152 81,269,388
Money Market 395,702 -- 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 Life Insurance Company,
is the Fund Manager for the Equity Income Fund. For the year ended December 31,
1998, ECM incurred subadvisory fees payable to 1740 Advisers, Inc. related to
the Equity Income Fund of $393,367, with a related payable balance of $35,368 as
of December 31, 1998.
The portion of sales charges paid to MONY Securities Corporation, a wholly-owned
subsidiary of MONY Life Insurance Company, from the proceeds of the sale of fund
shares was $10,144,048 for the period ended December 31, 1998. The portion of
sales charges paid to EFD was $1,873,837 for the period ended December 31, 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 December 31, 1998, EFD incurred $1,501,290 of services fees payable to
MONY Securities Corporation.
4. FINANCIAL INSTRUMENTS
As part of each funds investment program, the International Growth Fund and the
Global Financial Services Fund utilize forward currency exchange contracts to
manage exposure to currency fluctuations and hedge against adverse changes in
connection with purchases and sales of securities. The Funds will enter into
forward contracts only for hedging purposes. The Funds may be required to set
aside liquid assets in a segregated custodial account to collateralize their
obligations. At December 31, 1998, the Funds had entered into various forward
currency
THE ENTERPRISE GROUP OF FUNDS, INC. 129
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- (Continued)
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
exchange contracts under which they are 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 December 31, 1998 are as follows:
INTERNATIONAL GROWTH FUND
<TABLE>
<CAPTION>
PURCHASES NET UNREALIZED
SETTLEMENT ------------------------------------ APPRECIATION/
DATE RECEIVE DELIVER (DEPRECIATION)
- ---------- ----------------- ----------------- ---------------
<C> <S> <C> <C>
6/18/99 AUD 4,100,000 USD 2,549,175 $ (32,944)
6/18/99 CAD 1,850,000 USD 1,204,427 6,807
6/18/99 CHF 600,000 USD 455,719 (11,883)
6/18/99 ESP 151,000,000 USD 1,084,089 (12,320)
6/18/99 JPY 60,000,000 USD 533,499 9,313
6/18/99 PTE 80,000,000 USD 476,531 (3,639)
6/18/99 SEK 18,400,000 USD 2,306,082 (24,587)
---------------
(69,253)
<CAPTION>
SALES
------------------------------------
RECEIVE DELIVER
----------------- -----------------
<C> <S> <C> <C>
6/18/99 USD 800,119 BEL 27,000,000 12,697
6/18/99 USD 457,928 CHF 600,000 14,092
6/18/99 USD 422,246 DEM 700,000 (1,373)
6/18/99 USD 742,823 FIM 3,700,000 10,876
6/18/99 USD 564,612 FRF 3,100,000 5,397
6/18/99 USD 3,696,880 GBP 2,200,000 54,001
6/18/99 USD 1,354,867 NLG 2,500,000 12,735
---------------
108,425
---------------
$ 39,172
---------------
---------------
</TABLE>
130 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- (Continued)
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
GLOBAL FINANCIAL SERVICES FUND
<TABLE>
<CAPTION>
PURCHASES NET UNREALIZED
SETTLEMENT ------------------------------------ APPRECIATION/
DATE RECEIVE DELIVER (DEPRECIATION)
- ---------- ----------------- ----------------- ---------------
<C> <S> <C> <C>
1/4/99 CAD 10,000 USD 6,523 $ 19
1/4/99 CHF 15,000 USD 10,893 31
---------------
50
<CAPTION>
SALES
------------------------------------
RECEIVE DELIVER
----------------- -----------------
<C> <S> <C> <C>
3/24/99 USD 68,613 AUD 110,000 1,158
9/22/99 USD 9,152 SGD 15,000 (76)
---------------
1,082
---------------
$ 1,132
---------------
---------------
</TABLE>
As part of its investment program, the High-Yield Bond Fund may enter 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 December 31, 1998 in the High-Yield Bond Fund.
THE ENTERPRISE GROUP OF FUNDS, INC. 131
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- (Continued)
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
For the period ended December 31, 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 -- -- $784,941,058 $279,349,584
Equity -- -- 12,527,647 2,930,543
Growth and Income -- -- 32,841,520 1,931,571
Equity Income -- -- 61,145,439 37,918,779
Capital Appreciation -- -- 91,696,930 105,002,901
Small Company Growth -- -- 42,821,153 35,905,636
Small Company Value -- -- 117,869,107 35,213,619
International Growth -- -- 39,582,680 33,776,237
Global Financial Services -- -- 6,980,735 141,129
Government Securities $20,131,912 $ 5,563,466 8,511,719 1,987,180
High-Yield Bond 11,581,688 12,268,016 134,971,082 101,288,211
Tax-Exempt Income -- -- 28,193,309 26,726,365
Managed 21,374,219 -- 209,275,147 149,108,167
</TABLE>
132 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- (Continued)
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
5. FUND SHARE TRANSACTIONS
At December 31, 1998, EGF, has 2,500,000,000 authorized shares at $.10 par
value. The following tables summarize the fund share activity of each fund:
<TABLE>
<CAPTION>
GROWTH FUND EQUITY FUND GROWTH AND INCOME FUND
---------------------------- -------------------------- -----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED THREE
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, MONTHS ENDED
1998 1997 1998 1997 1998 DEC. 31, 1997
------------- ------------- ------------ ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
Shares sold 25,016,660 16,798,417 672,134 537,283 502,593 119,722
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions 1,817,182 488,201 6,246 9,243 6,225 3,414
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (12,643,429) (7,220,904) (173,058) (10,128) (94,462) (6,251)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 14,190,413 10,065,714 505,322 536,398 414,356 116,885
- ---------------------------------------------------------------------------------------------------------------------------
CLASS B
Shares sold 12,165,306 7,535,787 1,484,070 311,371 682,522 88,542
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions 1,012,396 196,989 6,611 4,711 6,205 2,656
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (1,548,771) (523,041) (439,218) (9,754) (60,729) (340)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 11,628,931 7,209,735 1,051,463 306,328 627,998 90,858
- ---------------------------------------------------------------------------------------------------------------------------
CLASS C
Shares sold 5,180,277 1,710,077 223,366 52,431 154,095 18,085
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions 290,019 28,376 1,143 737 1,314 473
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (666,966) (159,968) (38,398) (5,573) (16,707) (81)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 4,803,330 1,578,485 186,111 47,595 138,702 18,477
- ---------------------------------------------------------------------------------------------------------------------------
CLASS Y
Shares sold 1,619,933 2,914,866 8,786 -- 95,598 14,920
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions 105,396 28,250 11 -- 8,894 13,546
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (1,513,470) (501,167) -- -- (91,693) (12,369)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 211,859 2,441,949 8,797 -- 12,799 16,097
- ---------------------------------------------------------------------------------------------------------------------------
Total Net Increase (Decrease) 30,834,533 21,295,883 1,751,693 890,321 1,193,855 242,317
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
YEAR ENDED
SEPT. 30,
1997
------------
<S> <C>
CLASS A
Shares sold 43,148
- -----------------------------------------
Reinvestment of Distributions --
- -----------------------------------------
Shares Redeemed --
- -----------------------------------------
Net Increase (Decrease) 43,148
- -----------------------------------------
CLASS B
Shares sold 38,624
- -----------------------------------------
Reinvestment of Distributions --
- -----------------------------------------
Shares Redeemed (1)
- -----------------------------------------
Net Increase (Decrease) 38,623
- -----------------------------------------
CLASS C
Shares sold 3,842
- -----------------------------------------
Reinvestment of Distributions --
- -----------------------------------------
Shares Redeemed (3)
- -----------------------------------------
Net Increase (Decrease) 3,839
- -----------------------------------------
CLASS Y
Shares sold 216,623
- -----------------------------------------
Reinvestment of Distributions 20,982
- -----------------------------------------
Shares Redeemed (78,821)
- -----------------------------------------
Net Increase (Decrease) 158,784
- -----------------------------------------
Total Net Increase (Decrease) 244,394
- -----------------------------------------
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 133
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- (Continued)
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY INCOME FUND CAPITAL APPRECIATION FUND SMALL COMPANY GROWTH FUND
---------------------------- -------------------------- -----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED THREE
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, MONTHS ENDED
1998 1997 1998 1997 1998 DEC. 31, 1997
------------- ------------- ------------ ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
Shares sold 693,308 658,272 913,983 226,042 302,759 131,634
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions 338,394 291,471 548,612 421,161 -- 4,697
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (599,916) (480,133) (1,224,998) (843,612) (145,393) (7,480)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 431,786 469,610 237,597 (196,409) 157,366 128,851
- ---------------------------------------------------------------------------------------------------------------------------
CLASS B
Shares sold 609,848 471,024 204,018 76,065 379,909 87,205
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions 95,849 52,259 64,334 30,380 -- 2,619
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (161,207) (47,084) (102,705) (30,197) (105,961) (9,338)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 544,490 476,199 165,647 76,248 273,948 80,486
- ---------------------------------------------------------------------------------------------------------------------------
CLASS C
Shares sold 151,702 66,249 23,429 3,123 102,780 26,874
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions 16,076 4,740 4,329 469 -- 761
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (27,165) (409) (4,125) (35) (25,158) (1,122)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 140,613 70,580 23,633 3,557 77,622 26,513
- ---------------------------------------------------------------------------------------------------------------------------
CLASS Y
Shares sold 4,152 -- 5,239 -- 48,468 15,422
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions 35 -- 443 -- -- 12,856
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed -- -- (434) -- (223,611) (27,103)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 4,187 -- 5,248 -- (175,143) 1,175
- ---------------------------------------------------------------------------------------------------------------------------
Total Net Increase (Decrease) 1,121,076 1,016,389 432,125 (116,604) 333,793 237,025
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
YEAR ENDED
SEPT. 30,
1997
------------
<S> <C>
CLASS A
Shares sold 79,965
- -----------------------------------------
Reinvestment of Distributions --
- -----------------------------------------
Shares Redeemed (955)
- -----------------------------------------
Net Increase (Decrease) 79,010
- -----------------------------------------
CLASS B
Shares sold 42,270
- -----------------------------------------
Reinvestment of Distributions --
- -----------------------------------------
Shares Redeemed (933)
- -----------------------------------------
Net Increase (Decrease) 41,337
- -----------------------------------------
CLASS C
Shares sold 7,580
- -----------------------------------------
Reinvestment of Distributions --
- -----------------------------------------
Shares Redeemed (7)
- -----------------------------------------
Net Increase (Decrease) 7,573
- -----------------------------------------
CLASS Y
Shares sold 481,796
- -----------------------------------------
Reinvestment of Distributions 30,325
- -----------------------------------------
Shares Redeemed (198,869)
- -----------------------------------------
Net Increase (Decrease) 313,252
- -----------------------------------------
Total Net Increase (Decrease) 441,172
- -----------------------------------------
</TABLE>
134 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- (Continued)
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL
FINANCIAL
SERVICES FUND
SMALL COMPANY VALUE FUND INTERNATIONAL GROWTH FUND ---------------
--------------------------- -------------------------- FOR THE PERIOD
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED OF 10/01/98
DEC. 31, DEC. 31, DEC. 31, DEC. 31, THROUGH
1998 1997 1998 1997 12/31/98
------------- ------------ ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C>
CLASS A
Shares sold 10,236,575 3,235,542 524,854 528,097 258,209
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions 276,418 364,015 22,822 148,597 --
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (6,275,721) (768,577) (627,956) (438,610) (22,324)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 4,237,272 2,830,980 (80,280) 238,084 235,885
- ---------------------------------------------------------------------------------------------------------------------------
CLASS B
Shares sold 6,411,836 2,379,023 714,287 448,885 201,950
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions 217,426 175,399 6,578 37,407 --
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (1,516,761) (127,118) (458,613) (140,802) (32,303)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 5,112,501 2,427,304 262,252 345,490 169,647
- ---------------------------------------------------------------------------------------------------------------------------
CLASS C
Shares sold 1,622,753 332,692 170,129 85,857 40,518
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions 47,138 20,471 1,342 3,875 --
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (214,262) (6,181) (51,927) (22,912) (4,351)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 1,455,629 346,982 119,544 66,820 36,167
- ---------------------------------------------------------------------------------------------------------------------------
CLASS Y
Shares sold 27,545 21,005 454,733 276,478 942,373
- ---------------------------------------------------------------------------------------------------------------------------
Reinvestment of Distributions 941 963 10,505 46,815 --
- ---------------------------------------------------------------------------------------------------------------------------
Shares Redeemed (9,455) (340,603) (414,104) (182,169) --
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 19,031 (318,635) 51,134 141,124 942,373
- ---------------------------------------------------------------------------------------------------------------------------
Total Net Increase (Decrease) 10,824,433 5,286,631 352,650 791,518 1,384,072
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
GOVERNMENT SECURITIES FUND
--------------------------
YEAR ENDED YEAR ENDED
DEC. 31, DEC. 31,
1998 1997
------------ ------------
<S> <C> <C>
CLASS A
Shares sold 1,824,936 840,014
- --------------------------------------------------
Reinvestment of Distributions 247,336 274,184
- --------------------------------------------------
Shares Redeemed (1,883,753) (1,654,266)
- --------------------------------------------------
Net Increase (Decrease) 188,519 (540,068)
- --------------------------------------------------
CLASS B
Shares sold 2,093,943 633,414
- --------------------------------------------------
Reinvestment of Distributions 62,371 30,968
- --------------------------------------------------
Shares Redeemed (942,532) (124,591)
- --------------------------------------------------
Net Increase (Decrease) 1,213,782 539,791
- --------------------------------------------------
CLASS C
Shares sold 319,445 41,088
- --------------------------------------------------
Reinvestment of Distributions 6,516 453
- --------------------------------------------------
Shares Redeemed (112,968) (144)
- --------------------------------------------------
Net Increase (Decrease) 212,993 41,397
- --------------------------------------------------
CLASS Y
Shares sold 81,282 652,423
- --------------------------------------------------
Reinvestment of Distributions 38,601 16,945
- --------------------------------------------------
Shares Redeemed (149,732) (39,802)
- --------------------------------------------------
Net Increase (Decrease) (29,849) 629,566
- --------------------------------------------------
Total Net Increase (Decrease) 1,585,445 670,686
- --------------------------------------------------
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 135
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- (Continued)
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HIGH-YIELD BOND FUND TAX-EXEMPT INCOME FUND
------------------------ ----------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1998 1997 1998 1997
----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
CLASS A
Shares sold 2,158,147 1,682,960 339,169 193,960
- -------------------------------------------------------------------
Reinvestment of
Distributions 434,025 306,270 88,848 84,287
- -------------------------------------------------------------------
Shares Redeemed (1,669,074) (1,180,212) (414,098) (638,188)
- -------------------------------------------------------------------
Net Increase
(Decrease) 923,098 809,018 13,919 (359,941)
- -------------------------------------------------------------------
CLASS B
Shares sold 2,209,676 1,161,593 178,013 104,859
- -------------------------------------------------------------------
Reinvestment of
Distributions 166,249 57,929 13,547 7,203
- -------------------------------------------------------------------
Shares Redeemed (907,108) (274,381) (76,656) (52,601)
- -------------------------------------------------------------------
Net Increase
(Decrease) 1,468,817 945,141 114,904 59,461
- -------------------------------------------------------------------
CLASS C
Shares sold 480,109 137,745 52,051 12,937
- -------------------------------------------------------------------
Reinvestment of
Distributions 24,727 1,503 2,052 271
- -------------------------------------------------------------------
Shares Redeemed (155,499) (20,787) (11,150) --
- -------------------------------------------------------------------
Net Increase
(Decrease) 349,337 118,461 42,953 13,208
- -------------------------------------------------------------------
CLASS Y
Shares sold 105,449 63,572 4,698 --
- -------------------------------------------------------------------
Reinvestment of
Distributions 10,054 2,027 29 --
- -------------------------------------------------------------------
Shares Redeemed (4,531) (73) -- --
- -------------------------------------------------------------------
Net Increase
(Decrease) 110,972 65,526 4,727 --
- -------------------------------------------------------------------
Total Net Increase
(Decrease) 2,852,224 1,938,146 176,503 (287,272)
- -------------------------------------------------------------------
</TABLE>
136 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- (Continued)
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MANAGED FUND MONEY MARKET FUND
-------------------------- --------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold 4,571,675 5,986,736 413,364,732 186,445,537
- --------------------------------------------------------------------------
Reinvestment of
Distributions 1,185,379 675,645 4,556,487 2,799,348
- --------------------------------------------------------------------------
Shares Redeemed (3,768,206) (2,408,149) (345,896,926) (179,852,529)
- --------------------------------------------------------------------------
Net Increase
(Decrease) 1,988,848 4,254,232 72,024,293 9,392,356
- --------------------------------------------------------------------------
CLASS B
Shares sold 6,850,169 5,149,999 32,792,113 16,428,666
- --------------------------------------------------------------------------
Reinvestment of
Distributions 1,041,656 433,505 351,316 165,715
- --------------------------------------------------------------------------
Shares Redeemed (2,264,094) (776,922) (28,976,415) (11,957,685)
- --------------------------------------------------------------------------
Net Increase
(Decrease) 5,627,731 4,806,582 4,167,014 4,636,696
- --------------------------------------------------------------------------
CLASS C
Shares sold 1,068,902 384,001 15,657,662 3,804,829
- --------------------------------------------------------------------------
Reinvestment of
Distributions 79,473 15,601 112,867 5,853
- --------------------------------------------------------------------------
Shares Redeemed (259,472) (7,138) (12,111,247) (2,789,716)
- --------------------------------------------------------------------------
Net Increase
(Decrease) 888,903 392,464 3,659,282 1,020,966
- --------------------------------------------------------------------------
CLASS Y
Shares sold 3,071,921 3,318,402 2,877,556 3,225,033
- --------------------------------------------------------------------------
Reinvestment of
Distributions 669,801 389,953 131,097 55,490
- --------------------------------------------------------------------------
Shares Redeemed (2,830,113) (2,225,883) (2,296,440) (580,428)
- --------------------------------------------------------------------------
Net Increase
(Decrease) 911,609 1,482,472 712,213 2,700,095
- --------------------------------------------------------------------------
Total Net Increase
(Decrease) 9,417,091 10,935,750 80,562,802 17,750,113
- --------------------------------------------------------------------------
</TABLE>
THE ENTERPRISE GROUP OF FUNDS, INC. 137
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- (Continued)
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
6. TAX BASIS UNREALIZED GAIN (LOSS) OF INVESTMENTS AND DISTRIBUTIONS
At December 31, 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 $1,059,947,894 $427,639,649 $(18,557,462) $409,082,187
- ------------------------------------------------------------------------------------------------------------
Equity 17,120,700 1,599,949 (764,600) 835,349
- ------------------------------------------------------------------------------------------------------------
Growth and Income 49,827,231 14,224,817 (2,707,864) 11,516,953
- ------------------------------------------------------------------------------------------------------------
Equity Income 117,743,423 38,072,436 (3,034,271) 35,038,165
- ------------------------------------------------------------------------------------------------------------
Capital Appreciation 89,866,188 60,969,849 (441,325) 60,528,524
- ------------------------------------------------------------------------------------------------------------
Small Company Growth 22,191,903 6,696,449 (299,937) 6,396,512
- ------------------------------------------------------------------------------------------------------------
Small Company Value 148,662,707 21,656,658 (13,819,979) 7,836,679
- ------------------------------------------------------------------------------------------------------------
International Growth 64,134,550 13,085,083 (4,197,175) 8,887,908
- ------------------------------------------------------------------------------------------------------------
Global Financial Services 7,179,286 1,173,024 (13,429) 1,159,595
- ------------------------------------------------------------------------------------------------------------
Government Securities 107,895,975 888,693 (263,304) 625,389
- ------------------------------------------------------------------------------------------------------------
High-Yield Bond 118,584,530 2,238,060 (7,171,641) (4,933,581)
- ------------------------------------------------------------------------------------------------------------
Tax-Exempt Income 26,942,533 1,456,548 (17,002) 1,439,546
- ------------------------------------------------------------------------------------------------------------
Managed 374,260,658 80,168,998 (17,896,780) 62,272,218
- ------------------------------------------------------------------------------------------------------------
</TABLE>
Income and capital gain distributions are determined in accordance with federal
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, paydowns,
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.
At December 31, 1998, the following Funds had capital loss carryforwards for
federal tax purposes of:
<TABLE>
<CAPTION>
EXPIRING
BALANCE THROUGH
------------------ -----------
<S> <C> <C>
Small Company Growth Fund................................................................... $ 5,045,501 2006
Government Securities Fund.................................................................. 3,875,251 2004
Money Market Fund........................................................................... 6,575 2006
</TABLE>
The Tax-Exempt Income Fund has designated all income dividends paid as exempt
interest dividends. Thus 100 percent of the net investment income distributions
are exempt from Federal income tax.
138 THE ENTERPRISE GROUP OF FUNDS, INC.
<PAGE>
Federal tax information (Unaudited):
- --------------------------------------------------------------------------------
The capital gains distribution paid to shareholders for 1998, whether taken in
additional shares or cash, is as follows:
<TABLE>
<CAPTION>
CAPITAL GAINS
--------------
<S> <C>
Growth Fund........................................................ $ 68,358,888
Equity Fund........................................................ 20,168
Growth and Income Fund............................................. 453,951
Equity Income Fund................................................. 10,715,318
Capital Appreciation Fund.......................................... 22,785,148
Small Company Growth Fund.......................................... --
Small Company Value Fund........................................... 2,923,661
International Growth Fund.......................................... 2,236
Global Financial Services Fund..................................... --
Government Securities.............................................. --
High-Yield Bond.................................................... 454,886
Tax-Exempt Income Fund............................................. 569,587
Managed Fund....................................................... 25,676,066
</TABLE>
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.
THE ENTERPRISE GROUP OF FUNDS, INC. 139
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF
THE ENTERPRISE GROUP OF FUNDS, INC.:
In our opinion, the accompanying statements of assets and liabilities, including
the portfolios of investments, and the related statements of operations and of
changes in net assets, and the financial highlights present fairly, in all
material respects, the financial position of the Growth, Equity, Growth and
Income, Equity Income, Capital Appreciation, Small Company Growth, Small Company
Value, International Growth, Global Financial Services, Government Securities,
High-Yield Bond, Tax-Exempt Income, Managed, and Money Market Funds of The
Enterprise Group of Funds, Inc. (collectively the "Funds") at December 31, 1998,
the results of their operations for the year (or period) then ended, the changes
in their net assets for each of the two years (or periods) in the period then
ended, and the financial highlights for each of the periods presented (except
for the financial highlights, as indicated below, which were audited by other
auditors), in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Funds' management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
December 31, 1998 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above. The financial highlights for
each of the three years in the period ended September 30, 1996 for Growth and
Income and Small Company Growth Funds of The Enterprise Group of Funds, Inc.
were audited by other auditors whose report dated November 15, 1996, expressed
an unqualified opinion thereon.
/s/ PricewaterhouseCoopers LLP
Atlanta, Georgia
February 17, 1999
140 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 Advisor
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] Enterprise
Group of Funds
INVEST WITH THE PROS THE PROFESSIONALS USE -Registered Trademark-
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.
