<PAGE> 1
As filed with the Securities and Exchange Commission on February 25, 1999
Securities Act File No. 2-28097
Investment Company Act File No. 811-01582
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. 52 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 38
(Check appropriate box or boxes)
THE ENTERPRISE GROUP OF FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
Suite 450
3343 Peachtree Road
Atlanta, Georgia 30326
(Address of Principal Executive Office)(Zip Code)
Registrant's telephone number, including area code: (404) 261-1116
Catherine R. McClellan
Suite 450
3343 Peachtree Road, N.E.
Atlanta, Georgia 30326-1022
(Name and Address for Agent for Service)
Copy to:
Margery K. Neale, Esq
Swidler Berlin Shereff & Friedman, LLP
919 Third Avenue
New York, NY 10022
Approximate Date of Proposed Public Offering: As soon as practicable after
this Registration Statement becomes effective.
It is proposed that this filing will become effective (check appropriate
box)
[ ] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[X] on May 3, 1999 pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
<PAGE> 2
THE ENTERPRISE GROUP OF FUNDS, INC.
PROSPECTUS
CLASS A, B AND C SHARES
DATED MAY 3, 1999
Equity Funds
Growth Fund
Growth and Income Fund
Equity Fund
Equity Income Fund
Capital Appreciation Fund
Small Company Growth Fund
Small Company Value Fund
International Growth Fund
Global Financial Services Fund
Income Funds
Government Securities Fund
High-Yield Bond Fund
Tax-Exempt Income Fund
Flexible Fund
Managed Fund
Money Market Fund
Money Market Fund
This prospectus contains information you should know before investing,
including information about risks. Please read it before you invest and keep it
for future reference. As with all mutual funds, the Securities and Exchange
Commission does not guarantee that the information in this prospectus is
accurate or complete, nor has it approved or disapproved these securities. It
is a criminal offense to state otherwise.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
Introduction......................................................................................................1
Growth Fund.......................................................................................................2
Growth and Income Fund............................................................................................5
Equity Fund.......................................................................................................9
Equity Income Fund...............................................................................................12
Capital Appreciation Fund........................................................................................15
Small Company Growth Fund........................................................................................18
Small Company Value Fund.........................................................................................22
International Growth Fund........................................................................................25
Global Financial Services Fund...................................................................................29
Government Securities Fund.......................................................................................32
High-Yield Bond Fund.............................................................................................36
Tax-Exempt Income Fund...........................................................................................40
Managed Fund.....................................................................................................44
Money Market Fund................................................................................................47
Additional Information about the Funds' Investments and Risks....................................................50
Equity and Flexible Funds' Investments..................................................................50
Income Funds' Investments...............................................................................51
Money Market Fund's Investments.........................................................................52
Investment Restrictions and Practices...................................................................53
Risk Terminology........................................................................................55
Shareholder Account Information..................................................................................56
Selecting a Share Class.................................................................................56
Class A Shares- Initial Sales Charge Option.............................................................57
</TABLE>
-i-
<PAGE> 4
<TABLE>
<S> <C> <C>
Class B and C Shares- CDSC Options......................................................................58
Determination of the CDSC...............................................................................58
Sales Charge Waivers and Reductions.....................................................................59
Class A Waivers and Reductions.................................................................59
CDSC Waivers...................................................................................60
Conversion of Class B shares............................................................................61
Reinstatement Privilege.................................................................................61
Purchasing, Redeeming and Exchanging Shares.............................................................62
Transaction and Account Policies.................................................................................68
Valuation of Shares.....................................................................................68
Execution of Requests...................................................................................69
Telephone Transactions..................................................................................69
Exchanges...............................................................................................69
Share Certificates......................................................................................69
Small Accounts..........................................................................................70
Dividends, Distributions and Taxes......................................................................70
Fund Management..................................................................................................72
The Investment Advisor..................................................................................72
The Fund Managers.......................................................................................73
Year 2000 ..............................................................................................78
Financial Highlights.............................................................................................79
</TABLE>
-ii-
<PAGE> 5
INTRODUCTION
The Enterprise Group of Funds, Inc. is a mutual fund family that
offers different classes of shares in separate investment portfolios or Funds.
This prospectus relates to Class A, B and C shares of the Funds. The Funds have
individual objectives and strategies to offer investors a broad range of
investment alternatives.
Enterprise Capital Management, Inc. (the "Advisor") is the investment
advisor to each Fund. The Advisor selects a Fund Manager for each Fund's
portfolio on the basis of a number of criteria, including the Fund Manager's
reputation, resources and performance results.
Before investing in any mutual fund, you should consider the general
risks involved. The value of your investment in a Fund is based on the market
prices of the securities the Fund holds. These prices change due to economic
and other events that affect securities markets generally, as well as those
that affect particular companies or governments. These price movements,
sometimes called volatility, will vary depending on the types of securities a
Fund owns and the markets where these securities trade. Like other investments,
you could lose money on your investment in a Fund. Your investment in a Fund is
not a bank deposit. It is not insured or guaranteed by the FDIC or any
government agency. We cannot guarantee that a Fund will achieve its objective.
A Fund's objective may not be changed without shareholder approval.
1
<PAGE> 6
GROWTH FUND
FUND PROFILE
<TABLE>
<S> <C>
Investment Objective Capital appreciation
Principal Investments U.S. common stocks of large capitalization companies
Fund Manager Montag & Caldwell, Inc.
Investor Profile Investors who want the value of their investment to grow but do
not need to receive income on their investment.
Investment Strategies The Growth Fund invests primarily in U.S. common
stocks. The "Growth at a Price," strategy employed
by the Fund combines growth and value style
investing. This means that the Fund invests in the
stocks of companies with long-term earnings
potential but which are currently selling at a
discount to their estimated long term value. The
Fund's equity selection process is a lower risk,
growth stock approach. Valuation is the key
selection criterion which makes the investment style
risk adverse. Also emphasized are growth
characteristics to identify companies whose shares
are attractively priced and may experience strong
earnings growth relative to other companies.
Principal Risks As a result of investing primarily in U.S. common stocks, the Fund is
subject to the risk that stock prices will fall over short or extended
periods of time. Stock markets tend to move in cycles, with periods of
rising prices and periods of falling prices. This price volatility is
the principal risk of investing in the Fund.
</TABLE>
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the
volatility of an investment in the Fund and give some indication of the risk.
Of course, the Fund's past performance does not necessarily indicate how the
Fund will perform in the future. The performance of different classes of shares
will differ slightly due to differences in expenses.
This bar chart shows changes in the performance of the Fund's Class A
shares from year to year. The bar chart does not reflect sales charges. If
sales charges had been reflected, returns would be less than those shown below.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
23.05% -2.27% 41.79% 6.46% 10.59% -0.99% 39.98% 32.60% 31.76% 30.94%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
</TABLE>
2
<PAGE> 7
<TABLE>
<CAPTION>
BEST QUARTER WORST QUARTER
26.81% -15.64%
(DECEMBER 31, 1998) (SEPTEMBER 30, 1990)
- --------------------------------------------------------------------------------------------------------------------
Average Annual Total Returns Return Since Inception (2)
(as of the calendar year ended Past One Past Five Past Ten --------------------------
December 31, 1998) Year Years Years Fund S&P 500 (3)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Enterprise Growth
Fund(1) Class A 24.64% 24.72% 19.74%
- --------------------------------------------------------------------------------------------------------------------
Class B 26.20% N/A N/A 32.04% 29.22%
- --------------------------------------------------------------------------------------------------------------------
Class C 29.22% N/A N/A 31.91% 31.33%
- --------------------------------------------------------------------------------------------------------------------
S&P 500(3) 28.57% 24.06% 19.21% See Above
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Includes sales charge.
2. Inception date for Class A shares is September 14, 1987; inception date
for Class B shares is May 1, 1995; and inception date for Class C shares
is May 1, 1997.
3. This unmanaged broad-based index includes 500 companies which tend to
be leaders in important industries within the US economy. It includes
reinvested dividends. An index does not have an investment advisor and
does not pay commissions or expenses. If an index had expenses, its
performance would be lower.
FEES AND EXPENSES
This table describes the shareholder fees that you may pay if you
purchase or redeem Fund shares. Every mutual fund has operating expenses to pay
for professional advisory, shareholder, distribution, administration and
custody services. The Fund's expenses in the table are shown as a percentage of
the Fund's net assets. These expenses are deducted from Fund assets. The table
shows the highest expenses that could be currently charged to the Fund.
<TABLE>
<CAPTION>
Shareholder Fees (paid directly from your investment in the fund) Class A Class B Class C
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)(1) 4.75% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of net asset value) None 5.00%2 1.00%(3)
Annual Fund Operating Expenses (paid indirectly if you hold fund shares)
Investment Advisory Fees 0.75% 0.75% 0.75%
Distribution and Service (12b-1) Fees(4) 0.45% 1.00% 1.00%
Other Expenses(5) 0.28% 0.28% 0.29%
---------------------------------
Total Annual Fund Operating Expenses 1.48% 2.03% 2.04%
</TABLE>
3
<PAGE> 8
1. This sales charge varies depending upon how much you invest. See
"Shareholder Account Information."
2. This sales charge is imposed if you redeem Class B shares within one
year of your purchase. A graduated reduced sales charge is imposed if
you redeem your shares within six years of purchase. Class B shares
automatically convert to Class A shares about eight years after you
purchase them and will be subject to lower expenses. See "Shareholder
Account Information."
3. This sales charge is imposed if you redeem Class C shares within one
year of your purchase. See "Shareholder Account Information."
4. Class B or Class C shareholders who own their shares for an extended
period of time may pay more in Rule 12b-1 distribution fees than the
economic equivalent of the maximum front-end sales charge permitted
under the Conduct Rules of the National Association of Securities
Dealers.
EXAMPLE
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the Fund for the time periods indicated. The example
also assumes that each year your investment has a 5% return and Fund expenses
remain the same. Although your actual costs and returns may be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
If you redeem your shares at the end of
the period: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $618 $ 921 $1,245 $2,159
Class B $706 $1,037 $1,293 $2,217
Class C $ 31 $ 64 $ 110 $ 237
If you do not redeem your shares:
Class A $618 $ 921 $1,245 $2,159
Class B $206 $ 637 $1,093 $2,217
Class C $ 26 $ 64 $ 110 $ 237
</TABLE>
4
<PAGE> 9
GROWTH AND INCOME FUND
FUND PROFILE
<TABLE>
<S> <C>
Investment Objective Total return through capital appreciation with income as a
secondary consideration
Principal Investments Broadly diversified group of U.S. common stocks of large
capitalization companies
Fund Manager Retirement System Investors Inc.
Investor Profile Investors who want the value of their investment to grow, with the
potential of receiving dividend income.
Investment Strategies The Growth and Income Fund invests primarily in U.S. common
stocks of large capitalization companies. The Fund principally
selects stocks that will appreciate in value, seeking to take
advantage of temporary stock price inefficiencies which may be
caused by market participants focusing heavily on short-term
developments. In selecting stocks for the Fund, the Fund Manager
employs a "value-oriented" strategy. This means that the Fund
Manager attempts to identify stocks of companies that have greater
value than is recognized by the market generally. The Fund Manager
considers a number of factors, such as sales, growth and profitability
prospects for the economic sector and markets in which the company
operates and for the company's products and services, the company's
stock market price, earnings level and projected earnings growth rate.
The Fund Manager compares this information to that of other companies
in determining relative value.
Principal Risks The Fund invests primarily in U.S. common stocks. As a result, the
Fund is subject to the risk that stock prices will fall over short or
extended periods of time. Stock markets tend to move in cycles, with
periods of rising prices and periods of falling prices. This price
volatility is the principal risk of investing in the Fund.
</TABLE>
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the
volatility of an investment in the Fund and give some indication of the risk.
Of course, the Fund's past performance does not necessarily indicate how the
Fund will perform in the future. The performance of different classes of shares
will differ slightly due to differences in expenses.
5
<PAGE> 10
This bar chart shows changes in the performance of the Fund's Class A
shares and Class Y shares from year to year. The bar chart does not reflect
sales charges. If sales charges had been reflected, returns would be less than
those shown below. Class Y shares are institutional shares and are not offered
through this Prospectus. Class Y shares are being shown in the following chart
to indicate the Fund's performance since inception. The expenses of Class Y
shares are lower than those of Class A shares. Accordingly, if Class A shares
had been in existence as long as Class Y shares, returns would be less than
those shown for Class Y shares.
<TABLE>
<CAPTION>
16.50%
1998
Class A shares
<S> <C> <C> <C> <C> <C> <C>
5.11 16.00 5.75 36.20 %24.46 27.65% 17.08%
1992 1993 1994 1995 1996 1997 1998
<CAPTION>
Class Y shares
BEST QUARTER WORST QUARTER
19.50% -12.40%
(December 31, 1998) (September 30, 1998)
(Class Y)
Average Annual Total Returns (as of the calendar year Past One Past Five Return Since
ended December 31, 1998) Year Years Inception(2)
------------------
S&P
Fund 500(3)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Enterprise Growth and Income Fund(1) Class A 10.95% N/A 7.57% 21.41
- --------------------------------------------------------------------------------------------------------------
Class B 11.95% N/A 8.09% 21.41
- --------------------------------------------------------------------------------------------------------------
Class C 14.95% N/A 10.83% 21.41
- --------------------------------------------------------------------------------------------------------------
Class Y 17.08% 21.79% 18.79% 19.20%
- --------------------------------------------------------------------------------------------------------------
S&P 500(3) 28.57% 24.06% See Above
- --------------------------------------------------------------------------------------------------------------
</TABLE>
1. Includes sales charge.
2. Inception date for Classes A, B and C is July 17, 1997. Performance
reflects annualized return from July 31, 1997 to December 31, 1998.
Inception date for Class Y is May 31, 1991.
3. This unmanaged broad-based index includes 500 companies which tend to be
leaders in important industries within the U.S. economy. It includes
reinvested dividends. An index does not have an investment advisor and
does not pay commissions or expenses. If an index had expenses, its
performance would be lower.
6
<PAGE> 11
FEES AND EXPENSES
This table describes the shareholder fees that you may pay if you
purchase or redeem Fund shares. Every mutual fund has operating expenses to pay
for professional advisory, shareholder, distribution, administration and
custody services. The Fund's expenses in the table are shown as a percentage of
the Fund's net assets. These expenses are deducted from Fund assets. The table
shows the highest expenses that could be currently charged to the Fund.
<TABLE>
<CAPTION>
Shareholder Fees (paid directly from your investment in the fund) Class A Class B Class C
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)(1) 4.75% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of net asset value) None 5.00%(2) 1.00%(3)
Annual Fund Operating Expenses (paid indirectly if you hold fund shares)
Investment Advisory Fees 0.75% 0.75% 0.75%
Distribution and Service (12b-1) Fees(4) 0.45% 1.00% 1.00%
Other Expenses [0.73%] [0.73%] [0.74%]
----------------------------------
Total Annual Fund Operating Expenses(5) [1.93%] [2.48%] [2.49%]
</TABLE>
1. This sales charge varies depending upon how much you invest. See
"Shareholder Account Information."
2. This sales charge is imposed if you redeem Class B shares within one
year of your purchase. A graduated reduced sales charge is imposed if
you redeem your shares within six years of purchase. Class B shares
automatically convert to Class A shares about eight years after you
purchase them and will be subject to lower expenses. See "Shareholder
Account Information."
3. This sales charge is imposed if you redeem Class C shares within one
year of your purchase. See "Shareholder Account Information."
4. Class B or Class C shareholders who own their shares for an extended
period of time may pay more in Rule 12b-1 distribution fees than the
economic equivalent of the maximum front-end sales charge permitted
under the Conduct Rules of the National Association of Securities
Dealers.
5. Actual Fund expenses are lower than those shown in the table because
the Advisor is voluntarily reimbursing the Fund for some of its
expenses. If these reimbursements are taken into account, Other
Expenses and Total Operating Expenses for Class A, Class B and Class C
shares are:
<TABLE>
<CAPTION>
Class A Class B Class C
<S> <C> <C> <C>
Actual Other Expenses 0.30% 0.30% 0.30%
Actual Total Operating Expenses 1.50% 2.05% 2.05%
</TABLE>
The Advisor could discontinue these voluntary reimbursements at any
time.
7
<PAGE> 12
EXAMPLE
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the Fund for the time periods indicated. The example
also assumes that each year your investment has a 5% return and Fund expenses
remain the same. Although your actual costs and returns may be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
If you redeem your shares at the end of
the period: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $662 $1,052 $1,467 $2,622
Class B $751 $1,173 $1,521 $2,681
Class C $352 $ 776 $1,326 $2,826
If you do not redeem your shares:
Class A $662 $1,052 $1,467 $2,622
Class B $251 $ 773 $1,321 $2,681
Class C $252 $ 776 $1,326 $2,826
</TABLE>
8
<PAGE> 13
EQUITY FUND
FUND PROFILE
<TABLE>
<S> <C>
Investment Objective Long-term capital appreciation
Principal Investments U.S. equity securities
Fund Manager OpCap Advisors
Investor Profile Investors who want the value of their investment to grow but do not
need to receive income on their investment.
Investment Strategies The Equity Fund invests primarily in equity securities of companies
that meet the Fund Manager's criteria of high return on investment
capital, strong positions within their industries, sound financial
fundamentals and management committed to shareholder interests.
The Fund Manager selects companies with one or more of the following
characteristics: substantial and growing discretionary cash flow, strong
shareholder value-oriented management, valuable consumer or commercial
franchises, high return on capital, favorable price to intrinsic value,
and undervalued assets. The Fund Manager also imposes a strict sell
discipline to sell the stock once it rises near to the target price.
Principal Risks The Fund invests primarily in U.S. common stocks. As a result, the Fund
is subject to the risk that stock prices will fall over short or extended
periods of time. Stock markets tend to move in cycles, with periods of
rising prices and periods of falling prices. This price volatility is the
principal risk of investing in the Fund.
</TABLE>
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the
volatility of an investment in the Fund and give some indication of the risk.
Of course, the Fund's past performance does not necessarily indicate how the
Fund will perform in the future. The performance of different classes of shares
will differ slightly due to differences in expenses.
This bar chart shows changes in the performance of the Fund's Class A
shares from year to year. The bar chart does not reflect sales charges. If
sales charges had been reflected, returns would be less than those shown below.
9.38%
1998
9
<PAGE> 14
<TABLE>
<CAPTION>
BEST QUARTER WORST QUARTER
11.81% -11.80%
(DECEMBER 31, 1998) (SEPTEMBER 30, 1998)
- -------------------------------------------------------------------------------------------------------------
Average Annual Total Returns Return Since Inception (2)
(as of the calendar year Past One --------------------------
ended December 31, 1998) Year Fund S&P 500 (3)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Enterprise Equity Fund(1) Class A 4.13% 15.05% xx.xx%
- -------------------------------------------------------------------------------------------------------------
Class B 4.82% 15.65% xx.xx%
- -------------------------------------------------------------------------------------------------------------
Class C 7.98% 17.97% xx.xx%
- -------------------------------------------------------------------------------------------------------------
S&P 500(3) 28.57% 31.33% xx.xx%
- -------------------------------------------------------------------------------------------------------------
</TABLE>
1. Includes sales charge.
2. Inception date for Classes A, B and C is May 1, 1997.
3. This unmanaged broad-based index includes 500 companies which tend to
be leaders in important industries within the US economy. It includes
reinvested dividends. An index does not have an investment advisor and
does not pay commissions or expenses. If an index had expenses, its
performance would be lower.
FEES AND EXPENSES
This table describes the shareholder fees that you may pay if you
purchase or redeem Fund shares. Every mutual fund has operating expenses to pay
for professional advisory, shareholder, distribution, administration and
custody services. The Fund's expenses in the table above are shown as a
percentage of the Fund's net assets. These expenses are deducted from Fund
assets. The table shows the highest expenses that could be currently charged to
the Fund.
<TABLE>
<CAPTION>
Shareholder Fees (paid directly from your investment in the fund) Class A Class B Class C
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)(1) 4.75% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of net asset value) None 5.00%(2) 1.00%(3)
Annual Fund Operating Expenses (paid indirectly if you hold fund shares)
Investment Advisory Fees 0.75% 0.75% 0.75%
Distribution and Service (12b-1) Fees(4) 0.45% 1.00% 1.00%
Other Expenses 1.53% 1.54% 1.53%
-------------------------------
Total Annual Fund Operating Expenses(5) 2.73% 3.29% 3.28%
</TABLE>
1. This sales charge varies depending upon how much you invest. See
"Shareholder Account Information."
2. This sales charge is imposed if you redeem Class B shares within one
year of your purchase. A graduated reduced sales charge is imposed if
you redeem your shares within six years of purchase. Class B shares
automatically convert to Class A shares about eight years after you
purchase them and will be subject to lower expenses. See "Shareholder
Account Information."
3. This sales charge is imposed if you redeem Class C shares within one
year of your purchase. See "Shareholder Account Information."
4. Class B or Class C shareholders who own their shares for an extended
period of time may pay more in Rule 12b-1 distribution fees than the
economic equivalent of the maximum front-end sales charge permitted
under the Conduct Rules of the National Association of Securities
Dealers.
10
<PAGE> 15
5. ACTUAL FUND EXPENSES ARE LOWER THAN THOSE SHOWN IN THE TABLE BECAUSE
THE ADVISOR IS VOLUNTARILY REIMBURSING THE FUND FOR SOME OF ITS
EXPENSES. If these reimbursements are taken into account, Other
Expenses and Total Operating Expenses for Class A, Class B and Class C
shares are:
<TABLE>
<CAPTION>
Class A Class B Class C
<S> <C> <C> <C>
Actual Other Expenses 0.40% 0.40% 0.40%
Actual Total Operating Expenses 1.60% 2.15% 2.15%
</TABLE>
The Advisor could discontinue these voluntary reimbursements at any
time.
EXAMPLE
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the Fund for the time periods indicated. The example
also assumes that each year your investment has a 5% return and Fund expenses
remain the same. Although your actual costs and returns may be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
If you redeem your shares at the end of
the period: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $738 $1,282 $1,851 $3,390
Class B $832 $1,413 $1,917 $3,459
Class C $431 $1,010 $1,712 $3,576
If you do not redeem your shares:
Class A $738 $1,282 $1,851 $3,390
Class B $332 $1,013 $1,717 $3,459
Class C $331 $1,010 $1,712 $3,576
</TABLE>
11
<PAGE> 16
EQUITY INCOME FUND
FUND PROFILE
<TABLE>
<S> <C>
Investment Objective A combination of growth and income to achieve an above-average
and consistent total return
Principal Investments Dividend-paying U.S. common stocks
Fund Manager 1740 Advisers, Inc.
Investor Profile Investors who want the value of their investment to grow, with the
potential of receiving dividend income.
Investment Strategies The Equity Income Fund invests primarily in dividend-paying U.S. common
stocks with dividends that exceed the average for the S&P 500. The
goal is capital appreciation combined with a high level of current
income. Dividend yield relative to the S&P 500 average is used as a
discipline and measure of value in selecting stocks for the Fund. To
qualify for a purchase, a stock's yield must be greater than the S&P
500's yield. The stock must be sold within two quarters after the yield
falls below the S&P yield. The effect of this discipline is that a
stock whose price rises faster than its dividend increases is sold.
Principal Risks The Fund invests primarily in U.S. common stocks. As a result, the
Fund is subject to the risk that stock prices will fall over short
or extended periods of time. Stock markets tend to move in cycles,
with periods of rising prices and periods of falling prices. This price
volatility is the principal risk of investing in the Fund.
</TABLE>
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the
volatility of an investment in the Fund and give some indication of the risk.
Of course, the Fund's past performance does not necessarily indicate how the
Fund will perform in the future. The performance of different classes of shares
will differ slightly due to differences in expenses.
This bar chart shows changes in the performance of the Fund's Class A
shares from year to year. The bar chart does not reflect sales charges. If
sales charges had been reflected, returns would be less than those shown below.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
17.55% -8.19% 23.56% 8.48% 13.45% -0.49% 33.40% 17.86% 28.08% 11.07%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
</TABLE>
12
<PAGE> 17
<TABLE>
<CAPTION>
BEST QUARTER WORST QUARTER
14.94% -13.46%
(JUNE 31, 1997) (SEPTEMBER 30, 1990)
- -----------------------------------------------------------------------------------------------------------------
Return Since Inception(2)
-------------------------
Average Annual Total Returns (as of S&P 500/
the calendar year ended December 31, Past One Past Five Past Ten Barra Value
1998) Year Years Years Fund Index(3)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Enterprise Equity Income
Fund(1) Class A 5.84% 16.22% 13.28%
- -----------------------------------------------------------------------------------------------------------------
Class B 6.49% N/A N/A 20.10% 23.95%
- -----------------------------------------------------------------------------------------------------------------
Class C 9.47% N/A N/A 17.34% 22.96%
- -----------------------------------------------------------------------------------------------------------------
S&P 500/ Barra Value Index(3) 28.57% 24.06% 19.21% See Above
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
1. Includes sales charge.
2. Inception date for Class A shares is September 14, 1987; inception date for
Class B shares is May 1, 1995 and inception date for Class C shares is
May 1, 1997.
3. This unmanaged broad-based index is comprised of S & P companies sorted
with low price to book ratios. It includes reinvested dividends.
FEES AND EXPENSES
This table describes the shareholder fees that you may pay if you
purchase or redeem Fund shares. Every mutual fund has operating expenses to pay
for professional advisory, shareholder, distribution, administration and custody
services. The Fund's expenses in the table above are shown as a percentage of
the Fund's net assets. These expenses are deducted from Fund assets. The table
shows the highest expenses that could be currently charged to the Fund.
<TABLE>
<CAPTION>
Shareholder Fees (Paid Directly from Your Investment in the Fund) Class A Class B Class C
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)(1) 4.75% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of net asset value) None 5.00%(2) 1.00%(3)
Annual Fund Operating Expenses (Paid Indirectly if you hold Fund Shares)
Investment Advisory Fees 0.75% 0.75% 0.75%
Distribution and Service (12b-1) Fees(4) 0.45% 1.00% 1.00%
Other Expenses 0.38% 0.38% 0.38%
------------------------------
Total Annual Fund Operating Expenses(5) 1.58% 2.13% 2.13%
</TABLE>
1. This sales charge varies depending upon how much you invest. See
"Shareholder Account Information."
2. This sales charge is imposed if you redeem Class B shares within one
year of your purchase. A graduated reduced sales charge is imposed if
you redeem your shares within six years of purchase. Class B shares
13
<PAGE> 18
automatically convert to Class A shares about eight years after you
purchase them and will be subject to lower expenses. See "Shareholder
Account Information."
3. This sales charge is imposed if you sell Class C shares within one year
of your purchase. See "Shareholder Account Information."
4. Class B or Class C shareholders who own their shares for an extended
period of time may pay more in Rule 12b-1 distribution fees than the
economic equivalent of the maximum front-end sales charge permitted
under the Conduct Rules of the National Association of Securities
Dealers.
5. Actual Fund expenses are lower than those shown in the table because
the Advisor is voluntarily reimbursing the Fund for some of its
expenses. If these reimbursements are taken into account, Other
Expenses and Total Operating Expenses for Class A, Class B and Class C
shares are:
<TABLE>
<CAPTION>
Class A Class B Class C
<S> <C> <C> <C>
Actual Other Expenses 0.30% 0.30% 0.30%
Actual Total Operating Expenses 1.50% 1.50% 2.05%
</TABLE>
The Advisor could discontinue these voluntary reimbursements at any
time.
EXAMPLE
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the Fund for the time periods indicated. The example
also assumes that each year your investment has a 5% return and Fund expenses
remain the same. Although your actual costs and returns may be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
If you redeem your shares at the end of
the period: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $628 $ 950 $1,295 $2,264
Class B $716 $1,067 $1,344 $2,322
Class C $316 $ 667 $1,144 $2,462
If you do not redeem your shares:
Class A $628 $ 950 $1,295 $2,264
Class B $216 $ 667 $1,144 $2,322
Class C $216 $ 667 $1,144 $2,462
</TABLE>
14
<PAGE> 19
CAPITAL APPRECIATION FUND
FUND PROFILE
<TABLE>
<S> <C>
Investment Objective Maximum capital appreciation
Principal Investments U.S. common stocks of companies that demonstrate
accelerating earnings momentum and consistently
strong financial characteristics
Fund Manager Provident Investment Counsel, Inc.
Investor Profile Investors who want the value of their investment to
grow but do not need to receive income on their
investment and are willing to accept the increased
risk associated with more aggressive investment
strategies.
Investment Strategies The Capital Appreciation Fund invests in U.S. common
stocks of companies that demonstrate accelerating
earnings momentum and consistently strong financial
characteristics. The Fund Manager's criteria for
stock selection include: (a) steadily increasing
earnings; and (b) a three-year average performance
record of sales, earnings, dividend growth, pretax
margins, return on equity and reinvestment rate at an
aggregate average of 1.5 times the average
performance of the S&P 500 for the same period. The
Fund Manager selects stocks of small, medium and
large capitalization companies in an attempt to
achieve an average capitalization of portfolio
companies that is less than the average
capitalization of the S&P 500. The potential for
maximum capital appreciation is the basis for
investment decisions; any income is incidental.
Principal Risks The Fund's investment universe consists of large,
medium and small capitalization common stocks. As a
result, the Fund is subject to the risk that stock
prices will fall over short or extended periods of
time. Stock markets tend to move in cycles, with
periods of rising prices and periods of falling
prices. This price volatility is the principal risk
of investing in the Fund. In addition, small- to
mid-sized companies may be more vulnerable to adverse
business or economic events than larger, more
established companies. In particular, these companies
may have somewhat limited product lines, markets and
financial resources, and may depend upon a relatively
small-to medium-sized management group.
</TABLE>
15
<PAGE> 20
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the volatility
of an investment in the Fund and give some indication of the risk. Of course,
the Fund's past performance does not necessarily indicate how the Fund will
perform in the future. The performance of different classes of shares will
differ slightly due to differences in expenses.
This bar chart shows changes in the performance of the Fund's Class A
shares from year to year. The bar chart does not reflect sales charges. If sales
charges had been reflected, returns would be less than those shown below.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
34.27% 3.84% 59.04% 5.83% 5.71% (3.46)% 25.70% 16.52% 20.27% 30.15%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
</TABLE>
<TABLE>
<CAPTION>
BEST QUARTER WORST QUARTER
25.35% -17.81%
(DECEMBER 31, 1998) (SEPTEMBER 30, 1990)
- ------------------------------------------------------------------------------------------------------------------------
Return Since Inception(2)
------------------------------
S&P 500/
Average Annual Total Returns (as Barra Growth
of the calendar year ended Past One Past Five Past Ten Index(3)
December 31, 1998) Year Years Years Fund
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Enterprise Capital Appreciation
Fund(1) Class A 23.98% 16.09% 17.99%
- ------------------------------------------------------------------------------------------------------------------------
Class B 25.44% N/A N/A 22.47% 34.27%
- ------------------------------------------------------------------------------------------------------------------------
Class C 28.60% N/A N/A 31.82% 39.09%
- ------------------------------------------------------------------------------------------------------------------------
S&P 500/Barra Growth Index(3) 42.15% 27.94% 21.35% See Above
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Includes sales charge.
2. Inception date for Class A shares is September 14, 1987; inception date for
Class B shares is May 1, 1995 and inception date for Class C shares is
May 1, 1997.
3. This unmanaged broad-based index is comprised of U.S. common stocks in the
S & P 500 with high price to book ratios. An index does not have an
investment advisor and does not pay commissions or expenses. If an index
had expenses, its performance would be lower.
FEES AND EXPENSES
This table describes the shareholder fees that you may pay if you
purchase or redeem Fund shares. Every mutual fund has operating expenses to pay
for professional advisory, shareholder, distribution, administration and custody
services. The Fund's expenses in the table
16
<PAGE> 21
above are shown as a percentage of the Fund's net assets. These expenses are
deducted from Fund assets. The table shows the highest expenses that could be
currently charged to the Fund.
<TABLE>
<CAPTION>
Shareholder Fees (paid directly from your investment in a fund) Class A Class B Class C
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)(1) 4.75% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of net asset value) None 5.00%(2) 1.00%(3)
Annual Fund Operating Expenses (paid indirectly if you hold fund shares)
investment Advisory Fees 0.75% 0.75% 0.75%
Distribution and Service (12b-1) Fees(4) 0.45% 1.00% 1.00%
Other Expenses 0.32% 0.33% 0.36%
------------------------------
Total Annual Fund Operating Expenses 1.52% 2.08% 2.11%
</TABLE>
1. This sales charge varies depending upon how much you invest. See
"Shareholder Account Information."
2. This sales charge is imposed if you redeem Class B shares within one
year of your purchase. A graduated reduced sales charge is imposed if
you redeem your shares within six years of purchase. Class B shares
automatically convert to Class A shares about eight years after you
purchase them and will be subject to lower expenses. See "Shareholder
Account Information."
3. This sales charge is imposed if you redeem Class C shares within one
year of your purchase. See "Shareholder Account Information."
4. Class B or Class C shareholders who own their shares for an extended
period of time may pay more in Rule 12b-1 distribution fees than the
economic equivalent of the maximum front-end sales charge permitted
under the Conduct Rules of the National Association of Securities
Dealers.
EXAMPLE
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the Fund for the time periods indicated. The example
also assumes that each year your investment has a 5% return and Fund expenses
remain the same. Although your actual costs and returns may be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
If you redeem your shares at the end of
the period: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $622 $ 932 $,1265 $2,201
Class B $711 $1,052 $,1319 $2,267
Class C $314 $ 661 $1,134 $2,441
If you do not redeem your shares:
Class A $622 $ 932 $1,265 $2,201
Class B $211 $ 652 $1,119 $2,267
Class C $214 $ 661 $1,134 $2,441
</TABLE>
17
<PAGE> 22
SMALL COMPANY GROWTH FUND
FUND PROFILE
<TABLE>
<S> <C>
Investment Objective Capital appreciation
Principal Investments U.S. common stocks of small capitalization companies
Fund Manager William D. Witter, Inc.
Investor Profile Investors who want an increase in the value of their
investment without regard to income; are willing to
accept the increased risk of investing in small
company stocks for the possibility of higher returns;
and want to diversify their portfolio to include
small company stocks.
Investment Strategies The Small Company Growth Fund invests primarily in
common stocks of small capitalization companies with
above-average growth characteristics that are
reasonably valued. The Fund Manager uses a
disciplined approach in evaluating growth companies.
It relates the expected growth rate in earnings to
the price-earnings ratio of the stock. Generally, the
Fund Manager will not buy a stock if the
price-earnings ratio exceeds the growth rate. By
using this valuation parameter, the Fund Manager
believes it moderates some of the inherent volatility
in the small capitalization sector of the market.
Securities will be sold when the Fund Manager
believes the stock price exceeds the valuation
criteria, or when the stock appreciates to a point
where it is substantially overweighted in the
portfolio, or when the company no longer meets
expectations. The Fund 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.
Principal Risks The Fund invests primarily in small capitalization
common stocks. As a result, the Fund is subject to
the risk that stock prices will fall over short or
extended periods of time. Stock markets tend to move
in cycles, with periods of rising prices and periods
of falling prices. This price volatility is the
principal risk of investing in the Fund. In addition,
small-sized companies may be more vulnerable to
adverse business or economic events than larger, more
established companies. In particular, small-sized
companies may have limited product lines, markets and
financial resources, and may depend upon a relatively
small management group.
</TABLE>
18
<PAGE> 23
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the volatility
of an investment in the Fund and give some indication of the risk. Of course,
the Fund's past performance does not necessarily indicate how the Fund will
perform in the future. The performance of different classes of shares will
differ slightly due to differences in expenses.
This bar chart shows changes in the performance of the Fund's Class A
shares and Class Y shares from year to year. The bar chart does not reflect
sales charges. If sales charges had been reflected, returns would be less than
those shown below. Class Y shares are institutional shares and are not offered
through this Prospectus. Class Y shares are being shown in the following chart
to indicate the Fund's performance since inception. The expenses of Class Y
shares are lower than those of Class A shares. Accordingly, if Class A shares
had been in existence as long as Class Y shares, returns would be less than
those shown for Class Y shares.
<TABLE>
<CAPTION>
(4.06)%
1998
(Class A)
<S> <C> <C> <C> <C> <C> <C>
16.67% 25.73% 10.37% 39.56% 27.77% 9.95% (3.76)%
1992 1993 1994 1995 1996 1997 1998
(Class Y)
</TABLE>
<TABLE>
<CAPTION>
BEST QUARTER WORST QUARTER
27.19% -24.36%
(December 31, 1998) (September 30, 1998)
(Class Y)
- ------------------------------------------------------------------------------------------------------------------
Return Since
Inception(2)
-----------------
Average Annual Total Returns (as of the calendar year Past One Past Five Russell
ended December 31, 1998) Year Years Fund 2000(3)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Enterprise Small Company Growth Fund(1) Class A (8.63)% N/A (8.54)% 2.37%
- ------------------------------------------------------------------------------------------------------------------
Class B (8.93)% N/A (9.15)% 2.37%
- ------------------------------------------------------------------------------------------------------------------
Class C (5.71)% N/A (6.00)% 2.37%
- ------------------------------------------------------------------------------------------------------------------
Class Y (3.76)% 15.80% 18.75% 13.74%
- ------------------------------------------------------------------------------------------------------------------
Russell 2000(3) (2.56)% 11.86% See Above
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Includes sales charge.
19
<PAGE> 24
2. Inception date for Classes A, B and C is July 17, 1997. Performance
reflects annualized return from July 31, 1997 to December 31, 1998.
Inception date for Class Y shares is May 31, 1995.
3. This unmanaged broad-based index measures the performance of 2,000
small capitalization companies. As of the latest reconstitution, the
average market capitalization was approximately $592.0 million and the
largest company in the index had an approximate market capitalization
of $1,402.7 million. An index does not have an investment advisor and
does not pay commissions or expenses. If an index had expenses, its
performance would be lower.
FEES AND EXPENSES
This table describes the shareholder fees that you may pay if you
purchase or redeem Fund shares. Every mutual fund has operating expenses to pay
for professional advisory, shareholder, distribution, administration and custody
services. The Fund's expenses in the table above are shown as a percentage of
the Fund's net assets. These expenses are deducted from Fund assets. The table
shows the highest expenses that could be currently charged to the Fund.
<TABLE>
<CAPTION>
Shareholder Fees (paid directly from your investment in the fund) Class A Class B Class C
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)(1) 4.75% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of net asset value) None 5.00%(2) 1.00%(3)
Annual Fund Operating Expenses (paid indirectly if you hold fund shares)
Investment Advisory Fees 1.00% 1.00% 1.00%
Distribution and Service (12b-1) Fees(4) 0.45% 1.00% 1.00%
Other Expenses 1.21% 1.24% 1.24%
-----------------------------------
Total Annual Fund Operating Expenses(5) 2.66% 3.24% 3.24%
</TABLE>
1. This sales charge varies depending upon how much you invest. See
"Shareholder Account Information."
2. This sales charge is imposed if you redeem Class B shares within one
year of your purchase. A graduated reduced sales charge is imposed if
you redeem your shares within six years of purchase. Class B shares
automatically convert to Class A shares about eight years after you
purchase them and will be subject to lower expenses. See "Shareholder
Account Information."
3. This sales charge is imposed if you redeem Class C shares within one
year of your purchase. See "Shareholder Account Information."
4. Includes a service fee of .25% of average net assets for Class B and
Class C shares. Class B or Class C shareholders who own their shares
for an extended period of time may pay more in Rule 12b-1 distribution
fees than the economic equivalent of the maximum front-end sales charge
permitted under the Conduct Rules of the National Association of
Securities Dealers.
5. Actual Fund expenses are lower than those shown in the table because
the Advisor is voluntarily reimbursing the Fund for some of its
expenses. If these reimbursements are taken into account, Other
Expenses and Total Operating Expenses for Class A, Class B and Class C
shares are:
<TABLE>
<CAPTION>
Class A Class B Class C
<S> <C> <C> <C>
Actual Other Expenses 0.40% 0.40% 0.40%
Actual Total Operating Expenses 1.85% 2.40% 2.40%
</TABLE>
20
<PAGE> 25
The Advisor could discontinue these voluntary reimbursements at any
time.
EXAMPLE
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the Fund for the time periods indicated. The example
also assumes that each year your investment has a 5% return and Fund expenses
remain the same. Although your actual costs and returns may be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
If you redeem your shares at the end of
the period: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $731 $1,262 $1,818 $3,326
Class B $827 $1,398 $1,893 $3,408
Class C $427 $ 998 $1,693 $3,540
If you do not redeem your shares:
Class A $731 $1,262 $1,818 $3,326
Class B $327 $ 998 $1,693 $3,408
Class C $327 $ 998 $1,693 $3,540
</TABLE>
21
<PAGE> 26
SMALL COMPANY VALUE FUND
FUND PROFILE
<TABLE>
<S> <C>
Investment Objective Maximum capital appreciation
Principal Investments U.S. common stocks of small capitalization companies
Fund Manager GAMCO Investors, Inc.
Investor Profile Investors who want an increase in the value of their
investment without regard to income; are willing to
accept the increased risk of investing in small
company stocks for the possibility of higher returns;
and want to diversify their portfolio to include
small company stocks.
Investment Strategies The Small Company Value Fund invests primarily in
common stocks of small capitalization companies that
the Fund Manager believes are undervalued -- that is,
the stock's market price does not fully reflect the
company's value. The Fund Manager uses a proprietary
research technique to determine which stocks have a
market price that is less than the "private market
value." The Fund Manager then determines whether
there is an emerging valuation catalyst that will
focus investor attention on the underlying assets of
the company and increase the market price. Smaller
companies may be subject to a valuation catalyst such
as increased investor attention, takeover efforts or
a change in management.
Principal Risks The Fund invests primarily in small capitalization
common stocks. As a result, the Fund is subject to
the risk that stock prices will fall over short or
extended periods of time. Stock markets tend to move
in cycles, with periods of rising prices and periods
of falling prices. This price volatility is the
principal risk of investing in the Fund. In addition,
small-sized companies may be more vulnerable to
adverse business or economic events than larger, more
established companies. In particular, small-sized
companies may have limited product lines, markets and
financial resources, and may depend upon a relatively
small management group.
</TABLE>
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the volatility
of an investment in the Fund and give some indication of the risk. Of course,
the Fund's past performance does not
22
<PAGE> 27
necessarily indicate how the Fund will perform in the future. The performance of
different classes of shares will differ slightly due to differences in expenses.
This bar chart shows changes in the performance of the Fund's Class A
shares from year to year. The bar chart does not reflect sales charges. If sales
charges had been reflected, returns would be less than those shown below.
<TABLE>
<S> <C> <C> <C> <C> <C>
5.92% 0.34% 9.29% 11.28% 44.24% 5.15%
1993 1994 1995 1996 1997 1998
</TABLE>
<TABLE>
<CAPTION>
BEST QUARTER WORST QUARTER
18.94% (17.01)%
(JUNE 30, 1997) (SEPTEMBER 30, 1998)
- ---------------------------------------------------------------------------------------------------------------
Average Annual Total Returns (as of Return Since Inception(2)
the calendar year ended December 31, Past One Past Five ---------------------------------
1998) Year Years Fund Russell 2000(3)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Enterprise Small Company
Value Fund(1) Class A 0.11% 12.02% 12.62% 11.81%
- ---------------------------------------------------------------------------------------------------------------
Class B 0.44% N/A 16.34% 14.96%
- ---------------------------------------------------------------------------------------------------------------
Class C 4.03% N/A 23.10% 14.52%
- ---------------------------------------------------------------------------------------------------------------
Russell 2000(3) (2.56)% 11.86% See Above
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
1. Includes sales charge.
2. Inception date for Class A shares is October 1, 1993; inception date
for Class B shares is May 1, 1995; inception date for Class C shares is
May 1, 1997.
3. This unmanaged broad-based index measures the performance of 2,000
small capitalization companies. As of the latest reconstitution, the
average market capitalization was approximately $592.0 million and the
largest company in the index had an approximate market capitalization
of $1,402.7 million. An index does not have an investment advisor and
does not pay commissions or expenses. If an index had expenses, its
performance would be lower.
Fees and Expenses
This table describes the shareholder fees that you may pay if you
purchase or redeem Fund shares. Every mutual fund has operating expenses to pay
for professional advisory, shareholder, distribution, administration and custody
services. The Fund's expenses in the table above are shown as a percentage of
the Fund's net assets. These expenses are deducted from Fund assets. The table
shows the highest expenses that could be currently charged to the Fund.
<TABLE>
<CAPTION>
Shareholder Fees (paid directly from your investment in the fund) Class A Class B Class C
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)(1) 4.75% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of net asset value) None 5.00%(2) 1.00%(3)
</TABLE>
23
<PAGE> 28
<TABLE>
<CAPTION>
Annual Fund Operating Expenses (paid indirectly if you hold fund shares)
<S> <C> <C> <C>
Investment Advisory Fees 0.75% 0.75% 0.75%
Distribution and Service (12b-1) Fees(4) 0.45% 1.00% 1.00%
Other Expenses 0.65% 0.66% 0.65%
--------------------------------
Total Annual Fund Operating Expenses(5) 1.85% 2.41% 2.40%
</TABLE>
1. This sales charge varies depending upon how much you invest. See
"Shareholder Account Information."
2. This sales charge is imposed if you redeem Class B shares within one
year of your purchase. A graduated reduced sales charge is imposed if
you redeem your shares within six years of purchase. Class B shares
automatically convert to Class A shares about eight years after you
purchase them and will be subject to lower expenses. See "Shareholder
Account Information."
3. This sales charge is imposed if you redeem Class C shares within one
year of your purchase. See "Shareholder Account Information."
4. Class B or Class C shareholders who own their shares for an extended
period of time may pay more in Rule 12b-1 distribution fees than the
economic equivalent of the maximum front-end sales charge permitted
under the Conduct Rules of the National Association of Securities
Dealers.
5. Actual Fund expenses are lower than those shown in the table because
the Advisor is voluntarily reimbursing the Fund for some of its
expenses. If these reimbursements are taken into account, Other
Expenses and Total Operating Expenses for Class A, Class B and Class C
shares are:
<TABLE>
<CAPTION>
Class A Class B Class C
<S> <C> <C> <C>
Actual Other Expenses 0.55% 0.55% 0.55%
Actual Total Operating Expenses 1.75% 2.30% 2.30%
</TABLE>
The Advisor could discontinue these voluntary reimbursements at any
time.
EXAMPLE
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the Fund for the time periods indicated. The example
also assumes that each year your investment has a 5% return and Fund expenses
remain the same. Although your actual costs and returns may be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
If you redeem your shares at the end of
the period: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $654 $1,029 $1,428 $2,541
Class B $744 $1,151 $1,485 $2,608
Class C $343 $ 748 $1,280 $2,736
If you do not redeem your shares:
Class A $654 $1,029 $1,428 $2,541
Class B $244 $ 751 $1,285 $2,608
Class C $243 $ 748 $1,280 $2,736
</TABLE>
24
<PAGE> 29
INTERNATIONAL GROWTH FUND
FUND PROFILE
<TABLE>
<S> <C>
Investment Objective Capital appreciation
Principal Investments Non-U.S. equity securities
Fund Manager Vontobel USA Inc.
Investor Profile Investors who want an increase in the value of their
investment without regard to income and are willing
to accept the increased risk of international
investing for the possibility of higher returns.
Investment Strategies The International Growth Fund invests primarily
in non-U.S. equity securities that the Fund Manager
believes are undervalued. The Fund Manager uses an
approach that involves top-down country allocation
combined with bottom-up stock selection. The Fund
Manager looks for companies that are good predictable
businesses selling at attractive prices relative to
an estimate of intrinsic value. The Fund Manager
diversifies investments amongst European, Australian
and Far East ("EAFE") markets.
</TABLE>
25
<PAGE> 30
<TABLE>
<S> <C>
Principal Risks The Fund invests primarily in common stocks of foreign
companies. As a result, the Fund is subject to the
risk that stock prices will fall over short or
extended periods of time. Stock markets tend to move
in cycles, with periods of rising prices and periods
of falling prices. This price volatility is the
principal risk of investing in the Fund. In addition,
investments in foreign markets may be more volatile
than investments in U.S. markets. Diplomatic,
political or economic developments may cause foreign
investments to lose money. The value of the U.S.
dollar may rise, causing reduced returns for U.S.
persons investing abroad. A foreign country may not
have the same accounting and financial reporting
standards as the U.S. Foreign stock markets, brokers
and companies are generally subject to less
supervision and regulation than their U.S.
counterparts. Emerging markets securities may be even
more susceptible to these risks.
</TABLE>
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the volatility
of an investment in the Fund and give some indication of the risk. Of course,
the Fund's past performance does not necessarily indicate how the Fund will
perform in the future. The performance of different classes of shares will
differ slightly due to differences in expenses.
This bar chart shows changes in the performance of the Fund's Class A
shares from year to year. The bar chart does not reflect sales charges. If sales
charges had been reflected, returns would be less than those shown below.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
17.55% (15.37)% 12.91% (0.93)% 36.05% (2.82)% 15.17% 12.32% 4.75% 14.28%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
</TABLE>
<TABLE>
<CAPTION>
BEST QUARTER WORST QUARTER
17.44% -18.21%
(DECEMBER 31, 1998) (SEPTEMBER 30, 1990)
- -----------------------------------------------------------------------------------------------------------------------
Return Since Inception(2)
Average Annual Total Returns (as --------------------------
of the calendar year ended Past One Past Five Past Ten MSCI EAFE
December 31, 1998) Year Years Years Fund Index(3)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Enterprise International Growth
Fund(1) Class A 8.87% 7.47% 8.06%
- -----------------------------------------------------------------------------------------------------------------------
Class B 9.57% N/A N/A 11.17% 8.80%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
26
<PAGE> 31
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Return Since Inception(2)
Average Annual Total Returns (as --------------------------
of the calendar year ended Past One Past Five Past Ten MSCI EAFE
December 31, 1998) Year Years Years Fund Index(3)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class C 12.64% N/A N/A 9.30% 13.44%
- -----------------------------------------------------------------------------------------------------------------------
MSCI EAFE Index(3) 20.00% 9.19% 5.54% See Above
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Includes sales charge.
2. Inception date for Class A shares is September 14, 1987; inception date for
Class B shares is May 1, 1995; and inception date for Class C shares is
May 1, 1997.
3. The Morgan Stanley Capital International Europe, Australia and the Far East
(MSCI EAFE) Index is a market capitalization weighted, equity index
comprised of 1,032 companies that are representative of the market
structure of 20 countries, excluding the United States, Canada and other
regions such as Latin America. Constituent stocks are selected on the basis
of industry representation, liquidity and sufficient float.
FEES AND EXPENSES
This table describes the shareholder fees that you may pay if you
purchase or redeem Fund shares. Every mutual fund has operating expenses to pay
for professional advisory, shareholder, distribution, administration and custody
services. The Fund's expenses in the table above are shown as a percentage of
the Fund's net assets. These expenses are deducted from Fund assets. The table
shows the highest expenses that could be currently charged to the Fund.
<TABLE>
<CAPTION>
Shareholder Fees (paid directly from your investment in the fund) Class A Class B Class C
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)(1) 4.75% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of net asset value) None 5.00%(2) 1.00%(3)
Annual Fund Operating Expenses (paid indirectly if you hold fund shares)
Investment Advisory Fees 0.85% 0.85% 0.85%
Distribution and Service (12b-1) Fees(4) 0.45% 1.00% 1.00%
Other Expenses 0.81% 0.82% 0.82%
-----------------------------------
Total Annual Fund Operating Expenses(5) 2.11% 2.66% 2.67%
</TABLE>
1. This sales charge varies depending upon how much you invest. See
"Shareholder Account Information."
2. This sales charge is imposed if you redeem Class B shares within one
year of your purchase. A graduated reduced sales charge is imposed if
you redeem your shares within six years of purchase. Class B shares
automatically convert to Class A shares about eight years after you
purchase them and will be subject to lower expenses. See "Shareholder
Account Information."
3. This sales charge is imposed if you redeem Class C shares within one
year of your purchase. See "Shareholder Account Information."
4. Class B or Class C shareholders who own their shares for an extended
period of time may pay more in Rule 12b-1 distribution fees than the
economic equivalent of the maximum front-end sales charge permitted
under the Conduct Rules of the National Association of Securities
Dealers.
5. Actual fund expenses are lower than those shown in the table because
the advisor is voluntarily reimbursing the fund for some of its
expenses. If these reimbursements are taken into account, Other
Expenses and Total Operating Expenses for Class A, Class B and Class C
shares are:
27
<PAGE> 32
<TABLE>
<CAPTION>
Class A Class B Class C
<S> <C> <C> <C>
Actual Other Expenses 0.70% 0.70% 0.70%
Actual Total Operating Expenses 2.00% 2.55% 2.55%
</TABLE>
The Advisor could discontinue these voluntary reimbursements at any
time.
EXAMPLE
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the Fund for the time periods indicated. The example
also assumes that each year your investment has a 5% return and Fund expenses
remain the same. Although your actual costs and returns may be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
If you redeem your shares at the end of
the period: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $ 679 $1,104 $1,555 $2,800
Class B $ 769 $1,226 $1,610 $2,860
Class C $ 370 $ 829 $1,415 $3,003
If you do not redeem your shares:
Class A $ 679 $1,104 $1,555 $2,800
Class B $ 269 $ 826 $1,410 $2,860
Class C $ 169 $ 523 $ 902 $1,965
</TABLE>
28
<PAGE> 33
GLOBAL FINANCIAL SERVICES FUND
FUND PROFILE
<TABLE>
<S> <C>
Investment Objective Capital appreciation
Principal Investments Common stocks of domestic and foreign financial
services companies
Fund Manager Sanford C. Bernstein & Co., Inc.
Investor Profile Investors who want an increase in the value of their
investment without regard to income; want investment
in the global financial services sector; and are
willing to accept the increased risk of international
investing for the possibility of higher returns.
Investment Strategies The Global Financial Services Fund invests primarily
in the domestic and foreign financial services
industry by normally investing in companies domiciled
in the U.S. and at least three other countries. The
Fund considers a financial services company to be a
firm that in its most recent fiscal year either (i)
derived at least 50% of its revenues or earnings from
financial services activities, or (ii) devoted at
least 50% of its assets to such activities. Financial
services companies provide financial services to
consumers and businesses and include the following
types of U.S. and foreign firms: commercial banks,
thrift institutions and their holding companies;
consumer and industrial finance companies;
diversified financial services companies; investment
banks; securities brokerage and investment advisory
firms; financial technology companies; real
estate-related firms; leasing firms; credit card
companies; government sponsored financial
enterprises; investment companies; insurance
brokerages; and various firms in all segments of the
insurance industry such as multi-line property and
casualty, life insurance companies and insurance
holding companies. The Fund Manager selects
securities by combining fundamental and quantitative
research to identify securities of financial services
companies that are attractively priced relative to
their expected returns. Its research analysts employ
a long-term approach to forecasting the earnings and
growth potential of companies and attempt to
construct global portfolios that produce maximum
returns at a given risk level.
</TABLE>
29
<PAGE> 34
<TABLE>
<S> <C>
Principal Risks The Fund invests primarily in common stocks of
foreign companies. As a result, the Fund is subject
to the risk that stock prices will fall over short or
extended periods of time. Stock markets tend to move
in cycles, with periods of rising prices and periods
of falling prices. This price volatility is a
principal risk of investing in the Fund. In addition,
investments in foreign markets may be more volatile
than investments in U.S. markets. Diplomatic,
political or economic developments may cause foreign
investments to lose money. The value of the U.S.
dollar may rise, causing reduced returns for U.S.
persons investing abroad. A foreign country may not
have the same accounting and financial reporting
standards as the U.S. Foreign stock markets, brokers
and companies are generally subject to less
supervision and regulation than their U.S.
counterparts. Emerging markets securities may be even
more susceptible to these risks. Because the Fund
concentrates in a single sector, its performance is
largely dependent on the sector's performance, which
may differ from that of the overall stock market.
Generally, the financial services industry is
extremely sensitive to fluctuations in interest
rates. Moreover, while rising interest rates will
cause a decline in the value of any debt securities
the Fund holds, falling interest rates or
deteriorating economic conditions can adversely
affect the performance of financial services
companies' stock. Both foreign and domestic financial
services companies are affected by government
regulation or market intervention, which may limit
their activities and affect their profitability. Some
financial services companies, e.g., insurance
companies, are subject to severe market share
competition and price competition.
</TABLE>
FEES AND EXPENSES
This table describes the shareholder fees that you may pay if you
purchase or redeem Fund shares. Every mutual fund has operating expenses to pay
for professional advisory, shareholder, distribution, administration and custody
services. The Fund's expenses in the table above are shown as a percentage of
the Fund's net assets. These expenses are deducted from Fund assets. The table
shows the highest expenses that could be currently charged to the Fund.
<TABLE>
<CAPTION>
Shareholder Fees (paid directly from your investment in the fund) Class A Class B Class C
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)(1) 4.75% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of net asset value) None 5.00%(2) 1.00%(3)
Annual Fund Operating Expenses (paid indirectly if you hold fund shares)
Investment Advisory Fees 0.85% 0.85% 0.85%
</TABLE>
30
<PAGE> 35
<TABLE>
<S> <C> <C> <C>
Distribution and Service (12b-1) Fees(4) 0.45% 1.00% 1.00%
Other Expenses [0.45%] [0.45%] [0.45%]
---------------------------------
Total Annual Fund Operating Expenses(5) [1.75%] [1.75%] [1.75%]
</TABLE>
1. This sales charge varies depending upon how much you invest. See
"Shareholder Account Information."
2. This sales charge is imposed if you redeem Class B shares within one
year of your purchase. A graduated reduced sales charge is imposed if
you redeem your shares within six years of purchase. Class B shares
automatically convert to Class A shares about eight years after you
purchase them and will be subject to lower expenses. See "Shareholder
Account Information."
3. This sales charge is imposed if you redeem Class C shares within one
year of your purchase. See "Shareholder Account Information."
4. Class B or Class C shareholders who own their shares for an extended
period of time may pay more in Rule 12b-1 distribution fees than the
economic equivalent of the maximum front-end sales charge permitted
under the Conduct Rules of the National Association of Securities
Dealers.
5. Actual Fund expenses are lower than those shown in the table because
the Advisor is voluntarily reimbursing the Fund for some of its
expenses. If these reimbursements are taken into account, Other
Expenses and Total Operating Expenses for Class A, Class B and Class C
shares are:
<TABLE>
<CAPTION>
Class A Class B Class C
<S> <C> <C> <C>
Actual Other Expenses 0.45% 0.45% 0.45%
Actual Total Operating Expenses 1.75% 2.30% 2.30%
</TABLE>
The Advisor could discontinue these voluntary reimbursements at any
time.
EXAMPLE
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the Fund for the time periods indicated. The example
also assumes that each year your investment has a 5% return and Fund expenses
remain the same. Although your actual costs and returns may be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
If you redeem your shares at the end of
the period: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $1,097 $2,311 $3,487 $6,269
Class B $1,228 $2,538 $3,699 $6,490
Class C $ 736 $1,885 $3,098 $5,982
If you do not redeem your shares:
Class A $1,097 $2,311 $3,487 $6,269
Class B $ 741 $2,167 $3,523 $6,490
Class C $ 637 $1,885 $3,098 $5,982
</TABLE>
31
<PAGE> 36
GOVERNMENT SECURITIES FUND
FUND PROFILE
<TABLE>
<S> <C>
Investment Objective Current income and safety of principal
Principal Investments Securities that are obligations of the U.S.
Government, its agencies or instrumentalities
Fund Manager TCW Funds Management, Inc.
Investor Profile Conservative investors who want to receive income
from their investment
Investment Strategies The Government Securities Fund invests primarily in
securities that are obligations of the U.S.
Government, its agencies or instrumentalities. The
Fund's investments may include securities issued by
the U.S. Treasury, such as treasury bills, treasury
notes and treasury bonds. In addition, the Fund may
invest in securities that are issued or guaranteed by
agencies and instrumentalities of the U.S.
Government. Securities issued by agencies or
instrumentalities may or may not be backed by the
full faith and credit of the United States.
Securities issued by the Government National Mortgage
Association ("GNMA Certificates") are examples of
full faith and credit securities. Agencies or
instrumentalities whose securities are not backed by
the full faith and credit of the United States
include the Federal National Mortgage Association
(Fannie Mae) and Federal Home Loan Mortgage Corp.
(Freddie Mac). To a limited extent, the Fund may
invest in mortgage-backed securities, including
collateralized mortgage obligations ("CMOs"). The
Fund may concentrate from time to time in different
U.S. Government securities in order to obtain the
highest available level of current income and safety
of principal.
</TABLE>
32
<PAGE> 37
<TABLE>
<S> <C>
Principal Risks The Government Securities Fund invests primarily in
U.S. Government debt securities. As a result, the
Fund is subject to the risk that the prices of debt
securities will decline due to rising interest rates.
This risk is greater for long-term debt securities
than for short-term debt securities. To the extent
that the Fund invests in mortgage-backed securities,
it is subject to additional risk. A mortgage-backed
security pools all interest and principal payments
from the underlying mortgages and pays it to the
security's owner. The mortgages underlying
mortgage-backed securities may mature or be paid off
before the stated maturity date. This has a number of
drawbacks. First, the Fund may lose money on its
investment. Second, the monthly income payments to
the Fund may fluctuate. Third, the Fund cannot
predict the maturity of its investment with
certainty. Fourth, the Fund would invest any
resulting proceeds elsewhere, generally at a lower
interest rate.
</TABLE>
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the volatility
of an investment in the Fund and give some indication of the risk. Of course,
the Fund's past performance does not necessarily indicate how the Fund will
perform in the future. The performance of different classes of shares will
differ slightly due to differences in expenses.
This bar chart shows changes in the performance of the Fund's Class A
shares from year to year. The bar chart does not reflect sales charges. If sales
charges had been reflected, returns would be less than those shown below.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10.01% 9.41% 12.58% 9.93% 9.27% (7.80)% 19.00% 6.29% 8.39% 6.82%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
BEST QUARTER WORST QUARTER
6.08% 5.16%
(MARCH 31, 1995) (JUNE 30, 1994)
</TABLE>
33
<PAGE> 38
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------
Return Since Inception(2)
---------------------------
Lehman
Brothers
Average Annual Total Returns (as Intermediate
of the calendar year ended Past One Past Five Past Ten Government
December 31, 1998) Year Years Years Fund Bond Index(3)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Enterprise Government Securities
Fund(1) Class A 1.75% 5.17% 7.67% -- --
- -----------------------------------------------------------------------------------------------------------------------
Class B 2.24% N/A N/A 7.55% 7.87%
- -----------------------------------------------------------------------------------------------------------------------
Class C 5.15% N/A N/A 8.23% 9.19%
- -----------------------------------------------------------------------------------------------------------------------
Lehman Brothers International
Government Bond Index(3) 8.49% 6.45% 8.34% See Above
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Includes sales charge.
2. Inception date for Class A shares is September 14, 1987; inception date for
Class B shares is May 1, 1995; and inception date for Class B shares is
May 1, 1995;
3. This is an unmanaged broad-based index that includes all issues with
maturities of one to 9.99 years contained in the Lehman Brothers Government
Bond Index (this index includes all publicly held U. S. Treasury debt or
any governmental agency thereof, quasi-federal corporation, or corporate
debt guaranteed by the U. S. government with a minimum maturity of one year
and minimum outstanding par amount of $1 million) and is constructed the
same way. Average weighted maturity is approximately four years. The index
excludes transaction and holding charges.
FEES AND EXPENSES
This table describes the shareholder fees that you may pay if you
purchase or redeem Fund shares. Every mutual fund has operating expenses to pay
for professional advisory, shareholder, distribution, administration and custody
services. The Fund's expenses in the table above are shown as a percentage of
the Fund's net assets. These expenses are deducted from Fund assets. The table
shows the highest expenses that could be currently charged to the Fund.
<TABLE>
<CAPTION>
Shareholder Fees (paid directly from your investment in the fund) Class A Class B Class C
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)(1) 4.75% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of net asset value) None 5.00%(2) 1.00%(3)
Annual Fund Operating Expenses (paid indirectly if you hold fund shares)
Investment Advisory Fees 0.60% 0.60% 0.60%
Distribution and Service (12b-1) Fees(4) 0.45% 1.00% 1.00%
Other Expenses 0.33% 0.33% 0.34%
-----------------------------------
Total Annual Fund Operating Expenses(5) 1.38% 1.93% 1.94%
</TABLE>
1. This sales charge varies depending upon how much you invest. See
"Shareholder Account Information."
2. This sales charge is imposed if you redeem Class B shares within one
year of your purchase. A graduated reduced sales charge is imposed if
you redeem your shares within six years of purchase. Class B shares
automatically convert to Class A shares about eight years after you
purchase them and will be subject to lower expenses. See "Shareholder
Account Information."
3. This sales charge is imposed if you redeem Class C shares within one
year of your purchase. See "Shareholder Account Information."
34
<PAGE> 39
4. Class B or Class C shareholders who own their shares for an extended
period of time may pay more in Rule 12b-1 distribution fees than the
economic equivalent of the maximum front-end sales charge permitted
under the Conduct Rules of the National Association of Securities
Dealers.
5. Actual Fund expenses are lower than those shown in the table because
the Advisor is voluntarily reimbursing the Fund for some of its
expenses. If these reimbursements are taken into account, Other
Expenses and Total Operating Expenses for Class A, Class B and Class C
shares are:
<TABLE>
<CAPTION>
Class A Class B Class C
<S> <C> <C> <C>
Actual Other Expenses 0.25% 0.25% 0.25%
Actual Total Operating Expenses 1.30% 1.85% 1.85%
</TABLE>
The Advisor could discontinue these voluntary reimbursements at any
time.
EXAMPLE
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the Fund for the time periods indicated. The example
also assumes that each year your investment has a 5% return and Fund expenses
remain the same. Although your actual costs and returns may be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
If you redeem your shares at the end of
the period: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $609 $ 891 $1,194 $2,054
Class B $696 $1,006 $1,242 $2,111
Class C $297 $ 609 $1,047 $2,264
If you do not redeem your shares:
Class A $609 $ 891 $1,194 $2,054
Class B $196 $ 606 $1,042 $2,111
Class C $197 $ 609 $1,047 $2,264
</TABLE>
35
<PAGE> 40
HIGH-YIELD BOND FUND
FUND PROFILE
<TABLE>
<S> <C>
Investment Objective Maximum current income
Principal Investments Debt securities rated below investment grade, which
are commonly known as "junk bonds"
Fund Manager Caywood-Scholl Capital Management
Investor Profile Income-oriented investors who are willing to accept
increased risk for the possibility of greater returns
through high-yield bond investing.
Investment Strategies The High-Yield Bond Fund invests primarily in
high-yielding, income-producing corporate bonds rated
B3 to Ba1 by Moody's Investors Service, Inc.
("Moody's") or B- to BB+ by Standard & Poor's
Corporation ("S&P"), which are commonly known as
"junk bonds." The Fund's investments are selected by
the Fund Manager after careful examination of the
economic outlook to determine those industries that
appear favorable for investment. Industries going
through a perceived decline generally are not
candidates for selection. After the industries are
selected, the Fund Manager identifies bonds of
issuers within those industries based on their
creditworthiness, their yields in relation to their
credit and the relative value in relation to the high
yield market. Companies near or in bankruptcy are not
considered for investment. The Fund does not purchase
bonds which are rated Ca or lower by Moody's or CC or
lower by S&P or which, if unrated, in the judgment of
the Fund Manager have characteristics of such
lower-grade bonds. Should an investment be
subsequently downgraded to Ca or lower or CC or
lower, the Fund Manager has discretion to hold or
liquidate the security. Subject to the restrictions
described above, under normal circumstances, up to
20% of the Fund's assets may include: (1) bonds rated
Caa by Moody's or CCC by S&P; (2) unrated debt
securities which, in the judgment of the Fund Manager
have characteristics similar to those described
above; (3) convertible debt securities; (4) puts,
calls and futures as hedging devices; (5) foreign
issuer debt securities; and (6) short-term money
market instruments, including certificates of
deposit, commercial paper, U.S. Government securities
and other income-producing cash equivalents.
</TABLE>
36
<PAGE> 41
<TABLE>
<S> <C>
Principal Risks The Fund invests primarily in below investment-grade
debt securities. As a result, the Fund is subject to
the risk that the prices of the debt securities will
decline due to rising interest rates. This risk is
greater for long-term debt securities than for
short-term debt securities. A high-yield bond's
market price may fluctuate more than higher-quality
securities and may decline significantly. While the
Fund Manager tries to diversify the Fund's portfolio
and to engage in a credit analysis of each high-yield
bond issuer in which it invests, high-yield bonds
also carry a substantial risk of default or changes
in the issuer's creditworthiness. In addition, it may
be more difficult for the Fund to dispose of
high-yield bonds or to determine their value.
high-yield bonds may contain redemption or call
provisions that, if exercised during a period of
declining interest rates, may force the Fund to
replace the security with a lower-yielding security.
If this occurs, it will result in a decreased return
for shareholders.
</TABLE>
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the volatility
of an investment in the Fund and give some indication of the risk. Of course,
the Fund's past performance does not necessarily indicate how the Fund will
perform in the future. The performance of different classes of shares will
differ slightly due to differences in expenses.
This bar chart shows changes in the performance of the Fund's Class A
shares from year to year. The bar chart does not reflect sales charges. If sales
charges had been reflected, returns would be less than those shown below.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(0.70)% (11.55)% 33.02% 16.69% 17.58% 0.05% 16.00% 12.78% 13.18% 2.29%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
</TABLE>
Best Quarter Worst Quarter
11.52% -8.05%
(March 31, 1991) (September 30, 1990)
37
<PAGE> 42
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Return Since Inception(2)
-------------------------------
Lehman
Average Annual Total Returns (as Brothers High
of the calendar year ended Past One Past Five Past Ten Yield Bond
December 31, 1998) Year Years Years Fund Index(3)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Enterprise High-Yield Bond
Fund(1) Class A (2.62)% 7.62% 8.75%
- ---------------------------------------------------------------------------------------------------------------------------
Class B (2.36)% N/A N/A 8.69% 9.92%
- ---------------------------------------------------------------------------------------------------------------------------
Class C 0.72 % N/A N/A 7.48% 9.20%
- ---------------------------------------------------------------------------------------------------------------------------
Lehman Brothers High Yield BB
Index(3) 5.13 % 9.28% 10.61% See Above
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Includes sales charge.
2. Inception date for Class A shares is September 14, 1987; inception date for
Class B shares is May 1, 1995; and inception date for Class C shares is
May 1, 1997.
3. This is an unmanaged index that includes fixed rate, public
nonconvertible issues that are rated Ba1 or lower by Moody's Investor
Service. If a Moody's rating is not available, the bonds must be rated BB+
or lower by S&P, or by Fitch if an S&P rating is not available. The index
excludes transaction or holding charges.
FEES AND EXPENSES
This table describes the shareholder fees that you may pay if you
purchase or redeem Fund shares. Every mutual fund has operating expenses to pay
for professional advisory, shareholder, distribution, administration and custody
services. The Fund's expenses in the table above are shown as a percentage of
the Fund's net assets. These expenses are deducted from Fund assets. The table
shows the highest expenses that could be currently charged to the Fund.
<TABLE>
<CAPTION>
Shareholder Fees (paid directly from your investment in a fund) Class A Class B Class C
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)(1) 4.75% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of net asset value) None 5.00%(2) 1.00%(3)
Annual Fund Operating Expenses (paid indirectly if you hold fund shares)
Investment Advisory Fees 0.60% 0.60% 0.60%
Distribution and Service (12b-1) Fees(4) 0.45% 1.00% 1.00%
Other Expenses 0.39% 0.39% 0.39%
Total Annual Fund Operating Expenses(5) 1.44% 1.99% 1.99%
</TABLE>
1. This sales charge varies depending upon how much you invest. See
"Shareholder Account Information."
2. This sales charge is imposed if you redeem Class B shares within one
year of your purchase. A graduated reduced sales charge is imposed if
you redeem your shares within six years of purchase. Class B shares
automatically convert to Class A shares about eight years after you
purchase them and will be subject to lower expenses. See "Shareholder
Account Information."
3. This sales charge is imposed if you redeem Class C shares within one
year of your purchase. See "Shareholder Account Information."
38
<PAGE> 43
4. Class B or Class C shareholders who own their shares for an extended
period of time may pay more in Rule 12b-1 distribution fees than the
economic equivalent of the maximum front-end sales charge permitted
under the Conduct Rules of the National Association of Securities
Dealers.
5. Actual Fund expenses are lower than those shown in the table because
the Advisor is voluntarily reimbursing the Fund for some of its
expenses. If these reimbursements are taken into account, Other
Expenses and Total Operating Expenses for Class A, Class B and Class C
shares are:
<TABLE>
<CAPTION>
Class A Class B Class C
<S> <C> <C> <C>
Actual Other Expenses 0.25% 0.25% 0.25%
Actual Total Operating Expenses 1.30% 1.85% 1.85%
</TABLE>
The Advisor could discontinue these reimbursements at any time.
EXAMPLE
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the Fund for the time periods indicated. The example
also assumes that each year your investment has a 5% return and Fund expenses
remain the same. Although your actual costs and returns may be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
If you redeem your shares at the end of
the period: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $615 $ 909 $1,225 $2,117
Class B $702 $1,024 $1,273 $2,175
Class C $302 $ 624 $1,073 $2,317
If you do not redeem your shares:
Class A $615 $ 909 $1,225 $2,117
Class B $202 $ 624 $1,073 $2,175
Class C $202 $ 624 $1,073 $2,317
</TABLE>
39
<PAGE> 44
TAX-EXEMPT INCOME FUND
FUND PROFILE
<TABLE>
<S> <C>
Investment Objective A high level of current income exempt from federal
income tax, with consideration given to preservation
of principal
Principal Investments A diversified portfolio of long-term investment grade
municipal bonds
Fund Manager MBIA Capital Management Corp.
Investor Profile Investors who want to receive tax-free current income
and maintain the value of their investment.
Investment Strategies The Tax-Exempt Income Fund invests primarily in
investment grade, tax-exempt obligations, like
municipal securities. The issuers of these securities
may be located in any state, territory or possession
of the United States. In selecting investments for
the Fund, the Fund Manager tries to limit risk as
much as possible. The Fund Manager analyzes
municipalities, their credit risk, market trends and
investment cycles. The Fund Manager attempts to
identify and invest in municipal issuers with
improving credit and avoid those with deteriorating
credit. The Fund anticipates that its average
weighted maturity will range from 10 to 25 years. The
Fund Manager will actively manage the Fund, adjusting
the average Fund maturity and utilizing futures
contracts and options on futures as a defensive
measure according to its judgment of anticipated
interest rates. During periods of rising interest
rates and falling prices, the Fund Manager may adopt
a shorter weighted average maturity to cushion the
effect of bond price declines on the Fund's net asset
value. When rates are falling and prices are rising,
the Fund Manager may adopt a longer weighted average
maturity rate. The Fund may also invest up to 20% of
its net assets in cash, cash equivalents and debt
securities, the interest from which may be subject to
federal income tax. Investments in taxable securities
will be limited to investment grade corporate debt
securities and U.S. Government securities. The Fund
will not invest more than 20% of its net assets in
municipal securities, the interest on which is
subject to the federal alternative minimum tax.
</TABLE>
40
<PAGE> 45
<TABLE>
<S> <C>
Principal Risks The Fund invests primarily in long-term investment
grade debt securities. As a result, the Fund is
subject to the risk that the prices of debt
securities will decline due to rising interest rates.
This risk is greater for long-term debt securities
than for short-term debt securities. Debt securities
may decline in credit quality due to economic or
governmental events. In addition, an issuer may fail
to make timely payments of principal or interest to
the Fund. Some investment grade bonds may have
speculative characteristics.
</TABLE>
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the volatility
of an investment in the Fund and give some indication of the risk. Of course,
the Fund's past performance does not necessarily indicate how the Fund will
perform in the future. The performance of different classes of shares will
differ slightly due to differences in expenses.
This bar chart shows changes in the performance of the Fund's Class A
shares from year to year. The bar chart does not reflect sales charges. If sales
charges had been reflected, returns would be less than those shown below.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
8.68% 5.71% 11.13% 7.88% 10.76% (5.69)% 14.85% 3.53% 6.96% 5.92%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
</TABLE>
BEST QUARTER WORST QUARTER
6.78% -5.42%
(MARCH 31, 1995) (MARCH 31, 1994)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Return Since Inception(2)
---------------------------
Lehman
Brothers
Average Annual Total Returns (as Municipal
of the calendar year ended Past One Past Five Past Ten Bond
December 31, 1998) Year Years Years Fund Index(3)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Enterprise Tax-Exempt Income
Fund(1) Class A 0.86% 3.89% 6.32%
- ---------------------------------------------------------------------------------------------------------------------
Class B 1.33% N/A N/A 5.24% 8.09%
- ---------------------------------------------------------------------------------------------------------------------
Class C 4.34% N/A N/A 6.92% 5.64%
- ---------------------------------------------------------------------------------------------------------------------
Lehman Brothers Municipal Bond 6.48% 6.23% 8.22%
Index(3) See Above
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Includes sales charge.
41
<PAGE> 46
2. Inception date for Class A shares is September 14, 1987; inception date for
Class B shares is May 1, 1995; and inception date for Class C shares is
May 1, 1997.
3. This is an unmanaged index that includes approximately 1,100 investment
grade tax-exempt bonds and is classified into four main sectors: general
obligation, revenue, insured and prerefunded. An index does not have an
investment advisor and does not pay commissions and expenses. If an index
had expenses, its performance would be lower.
FEES AND EXPENSES
This table describes the shareholder fees that you may pay if you
purchase or redeem Fund shares. Every mutual fund has operating expenses to pay
for professional advisory, shareholder, distribution, administration and custody
services. The Fund's expenses in the table above are shown as a percentage of
the Fund's net assets. These expenses are deducted from Fund assets. The table
shows the highest expenses that could be currently charged to the Fund.
<TABLE>
<CAPTION>
Shareholder Fees (paid directly from your investment in the fund) Class A Class B Class C
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)(1) 4.75% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of net asset value) None 5.00%(2) 1.00%(3)
Annual Fund Operating Expenses (paid indirectly if you hold fund shares)
Investment Advisory Fees 0.50% 0.50% 0.50%
Distribution and Service (12b-1) Fees(4) 0.45% 1.00% 1.00%
Other Expenses 0.45% 0.46% 0.43%
----------------------------------
Total Annual Fund Operating Expenses(5) 1.40% 1.96% 1.93%
</TABLE>
1. This sales charge varies depending upon how much you invest. See
"Shareholder Account Information."
2. This sales charge is imposed if you redeem Class B shares within one
year of your purchase. A graduated reduced sales charge is imposed if
you redeem your shares within six years of purchase. Class B shares
automatically convert to Class A shares about eight years after you
purchase them and will be subject to lower expenses. See "Shareholder
Account Information."
3. This sales charge is imposed if you redeem Class C shares within one
year of your purchase. See "Shareholder Account Information."
4. Class B or Class C shareholders who own their shares for an extended
period of time may pay more in Rule 12b-1 distribution fees than the
economic equivalent of the maximum front-end sales charge permitted
under the Conduct Rules of the National Association of Securities
Dealers.
5. Actual Fund expenses are lower than those shown in the table because
the Advisor is voluntarily reimbursing the Fund for some of its
expenses. If these reimbursements are taken into account, Other
Expenses and Total Operating Expenses for Class A, Class B and Class C
shares are:
<TABLE>
<CAPTION>
Class A Class B Class C
<S> <C> <C> <C>
Actual Other Expenses 0.15% 0.15% 0.15%
Actual Total Operating Expenses 1.10% 1.65% 1.65%
</TABLE>
The Advisor could discontinue these voluntary reimbursements at any
time.
42
<PAGE> 47
EXAMPLE
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the Fund for the time periods indicated. The example
also assumes that each year your investment has a 5% return and Fund expenses
remain the same. Although your actual costs and returns may be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
If you redeem your shares at the end of
the period: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $611 $ 897 $1,204 $2,075
Class B $699 $1,015 $1,257 $2,141
Class C $296 $ 606 $1,042 $2,254
If you do not redeem your shares:
Class A $611 $ 897 $1,204 $2,075
Class B $199 $ 615 $1,057 $2,141
Class C $196 $ 606 $1,042 $2,254
</TABLE>
43
<PAGE> 48
MANAGED FUND
FUND PROFILE
<TABLE>
<S> <C>
Investment Objective Growth of capital over time
Principal Investments Common stocks, bonds and cash equivalents, the
percentages of which will vary based on the Fund
Manager's assessment of relative investment values
Fund Manager OpCap Advisors
Investor Profile Investors who want the value of their
investment to grow but do not need to receive income
on their investment.
Investment Strategies The Managed Fund invests in a diversified portfolio
of common stocks, bonds and cash equivalents. The
allocation of the Fund's assets among the different
types of permitted investments will vary from time to
time based upon the Fund Manager's evaluation of
economic and market trends and its perception of the
relative values available from such types of
securities at any given time. There is neither a
minimum nor a maximum percentage of the Fund's assets
that may, at any given time, be invested in any
specific types of investments. However, the Fund
invests primarily in equity securities at times when
the Manager believes that the best investment values
are available in the equity markets. The Fund may
invest almost all of its assets in high-quality
short-term money market and cash equivalent
securities when the Fund Manager deems it advisable
to preserve capital. Consequently, while the Fund
will earn income to the extent it is invested in
bonds or cash equivalents, the Fund does not have any
specific income objective. The bonds in which the
Fund may invest will normally be investment grade
intermediate to long-term U.S. Government and
corporate debt.
Principal Risks The Fund invests in both common stocks and debt
securities. As a result, the Fund is subject to the
risk that stock prices will fall over short or
extended periods of time. Stock markets tend to move
in cycles, with periods of rising prices and periods
of falling prices. This price volatility is a
principal risk of investing in the Fund. In addition,
the Fund is subject to the risk that the prices of
debt securities will decline due to rising interest
rates. The risk is greater for long-term debt
securities than for short-term debt securities. Debt
securities may decline in credit quality due to
economic governmental events.
</TABLE>
44
<PAGE> 49
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the volatility
of an investment in the Fund and give some indication of the risk. Of course,
the Fund's past performance does not necessarily indicate how the Fund will
perform in the future. The performance of different classes of shares will
differ slightly due to differences in expenses.
This bar chart shows changes in the performance of the Fund's Class A
shares from year to year. The bar chart does not reflect sales charges. If sales
charges had been reflected, returns would be less than those shown below.
<TABLE>
<S> <C> <C> <C>
37.69% 22.08% 21.05% 7.05%
1995 1996 1997 1998
</TABLE>
Best Quarter Worst Quarter
13.46% -14.60%
(June 30, 1997) (September 30, 1998)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
Return Since Inception(2)
Average Annual Total Returns (as of the Past One ------------------------------------
calendar year ended December 31, 1998) Year Fund S&P 500(3)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Enterprise Managed
Fund(1) Class A 1.97% 18.28% 28.44%
- ---------------------------------------------------------------------------------------------------------
Class B 2.31% 17.57% 29.22%
- ---------------------------------------------------------------------------------------------------------
Class C 4.36% 13.20% 31.33%
- ---------------------------------------------------------------------------------------------------------
S&P 500(3) 28.57% See Above
- ---------------------------------------------------------------------------------------------------------
</TABLE>
1. Includes sales charge.
2. Inception date for Class A shares is October 3,
1994; inception date for Class B shares is May 1, 1995; and inception date
for Class C shares is May 1, 1997.
3. This unmanaged broad-based index includes 500 companies which tend to be
leaders in important industries within the US economy. It includes
reinvested dividends. An index does not have an investment advisor and does
not pay commissions or expenses. If an index had expenses, its performance
would be lower.
FEES AND EXPENSES
This table describes the shareholder fees that you may pay if you
purchase or redeem Fund shares. Every mutual fund has operating expenses to pay
for professional advisory, shareholder, distribution, administration and custody
services. The Fund's expenses in the table above are shown as a percentage of
the Fund's net assets. These expenses are deducted from Fund assets. The table
shows the highest expenses that could be currently charged to the Fund.
<TABLE>
<CAPTION>
Shareholder Fees (paid directly from your investment in the fund) Class A Class B Class C
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)(1) 4.75% None None
</TABLE>
45
<PAGE> 50
<TABLE>
<S> <C> <C> <C>
Maximum Deferred Sales Charge (Load)
(as a percentage of net asset value) None 5.00%(2) 1.00%(3)
Annual Fund Operating Expenses (paid indirectly if you hold fund shares)
Investment Advisory Fees 0.75% 0.75% 0.75%
Distribution and Service (12b-1) Fees(4) 0.45% 1.00% 1.00%
Other Expenses 0.30% 0.30% 0.30%
----------------------------------
Total Annual Fund Operating Expenses 1.50% 2.05% 2.05%
</TABLE>
1. This sales charge varies depending upon how much you invest. See
"Shareholder Account Information."
2. This sales charge is imposed if you redeem Class B shares within one
year of your purchase. A graduated reduced sales charge is imposed if
you redeem your shares within six years of purchase. Class B shares
automatically convert to Class A shares about eight years after you
purchase them and will be subject to lower expenses. See "Shareholder
Account Information."
3. This sales charge is imposed if you redeem Class C shares within one
year of your purchase. See "Shareholder Account Information."
4. Class B or Class C shareholders who own their shares for an extended
period of time may pay more in Rule 12b-1 distribution fees than the
economic equivalent of the maximum front-end sales charge permitted
under the Conduct Rules of the National Association of Securities
Dealers.
EXAMPLE
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the Fund for the time periods indicated. The example
also assumes that each year your investment has a 5% return and Fund expenses
remain the same. Although your actual costs and returns may be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
If you redeem your shares at the end of
the period: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $620 $ 927 $1,255 $2,180
Class B $708 $1,043 $1,303 $2,238
Class C $308 $ 643 $1,103 $2,379
If you do not redeem your shares:
Class A $620 $ 927 $1,255 $2,180
Class B $208 $ 643 $1,103 $2,238
Class C $208 $ 643 $1,103 $2,379
</TABLE>
46
<PAGE> 51
MONEY MARKET FUND
FUND PROFILE
Investment Objective The highest possible level of current
income consistent with preservation of
capital and liquidity
Principal Investments High quality, short-term debt securities,
commonly known as money market instruments
Fund Manager Enterprise Capital Management, Inc.
Investor Profile Investors who seek an income producing
investment with emphasis on preservation of
capital.
Investment Strategies The Money Market Fund invests in
a diversified portfolio of high quality
dollar-denominated money market instruments
which present minimal credit risks in the
judgment of the Fund Manager. The Fund
Manager actively manages the Fund's average
maturity based on current interest rates
and its outlook of the market.
Principal Risks Although the Money Market Fund seeks to
preserve the value of your investment at
$1.00 per share, it is possible to lose
money by investing in the Fund.
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the volatility
of an investment in the Fund and give some indication of the risk. Of course,
the Fund's past performance does not necessarily indicate how the Fund will
perform in the future. The performance of different classes of shares will
differ slightly due to differences in expenses.
This bar chart shows changes in the performance of the Fund's Class A
shares from year to year. The bar chart does not reflect sales charges. If sales
charges had been reflected, returns would be less than those shown below.
BEST QUARTER WORST QUARTER
1.79% 0.53%
(--) (--)
September 30, 1990 June 30, 1993
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996 1997 1998
------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
5.21% 2.92% 2.24% 3.34% 5.05% 4.51% 4.69% 5.04%
</TABLE>
47
<PAGE> 52
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Return Since Inception(2)
Average Annual Total Returns ---------------------------------
(as of the calendar year ended Past One Past Five IBC Taxable Money
December 31, 1998) Year Years Fund Market Index3
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Enterprise Money Market
Fund(1) Class A 5.04% 4.52% 4.36% 4.74%
- ---------------------------------------------------------------------------------------------------------------
Class B 5.04% N/A 3.64% 5.09%
- ---------------------------------------------------------------------------------------------------------------
Class C 5.04 N/A 7.75% 5.07%
- ---------------------------------------------------------------------------------------------------------------
IBC Taxable Money Market 5.04% 4.85% See Above
Index(3)
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
1. Includes sales charge.
2. Inception date for Class A shares is May 1, 1990; inception date for Class
B shares is May 1, 1995; inception date for Class C shares is May 1, 1997.
3. This is a widely recognized composite of money market funds that invest in
taxable short-term money market instruments. An index does not have an
investment advisor and does not pay commissions or expenses. If an index
had expenses, its performance would be lower.
FEES AND EXPENSES
This table describes the shareholder fees that you may pay if you
purchase or redeem Fund shares. Every mutual fund has operating expenses to pay
for professional advisory, shareholder, distribution, administration and custody
services. The Fund's expenses in the table above are shown as a percentage of
the Fund's net assets. These expenses are deducted from Fund assets. The table
shows the highest expenses that could be currently charged to the Fund.
<TABLE>
<CAPTION>
Shareholder Fees (paid directly from your investment in the fund) Class A Class B Class C
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) 4.75% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of net asset value)
Annual Fund Operating Expenses (paid indirectly if you hold fund shares) None 5.00%(1) 1.00%(2)
Investment Advisory Fees 0.35% 0.35% 0.35%
Distribution and Service (12b-1) Fees None None None
Other Expenses 0.29% 0.29% 0.28%
-----------------------------------
Total Annual Fund Operating Expenses(3) 0.64% 0.64% 0.63%
</TABLE>
1. This sales charge is imposed if you redeem Class B shares within one
year of your purchase. A graduated reduced sales charge is imposed if
you redeem your shares within six years of purchase. Class B shares
automatically convert to Class A shares about eight years after you
purchase them and will be subject to lower expenses. See "Shareholder
Account Information."
2. This sales charge is imposed if you redeem Class C shares within one
year of your purchase. See "Shareholder Account Information."
3. Actual Fund expenses are lower than those shown in the table because
the Advisor is voluntarily reimbursing the Fund for some of its
expenses. If these reimbursements are taken in account, Other Expenses
and Total Operating Expenses for Class A, Class B, and Class C shares
are:
48
<PAGE> 53
<TABLE>
<CAPTION>
Class A Class B Class C
<S> <C> <C> <C>
Actual Other Expenses 0.35% 0.35% 0.35%
Actual Total Operating Expenses 0.70% 0.70% 0.70%
</TABLE>
The Advisor could discontinue these voluntary reimbursements at any
time.
EXAMPLE
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the Fund for the time periods indicated. The example
also assumes that each year your investment has a 5% return and Fund expenses
remain the same. Although your actual costs and returns may be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
If you redeem your shares at the end of
the period: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $ 65 $205 $357 $798
Class B $565 $605 $557 $798
Class C $164 $202 $351 $786
If you do not redeem your shares:
Class A $ 65 $205 $357 $798
Class B $ 65 $205 $357 $798
Class C $ 64 $202 $351 $786
</TABLE>
49
<PAGE> 54
ADDITIONAL INFORMATION ABOUT THE FUNDS' INVESTMENTS AND RISKS
EQUITY AND FLEXIBLE FUNDS' INVESTMENTS
The table below shows the Equity and Flexible Funds' principal investments. In
other words, the table describes the type or types of investments that we
believe will most likely help each Fund achieve its investment goal.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
EQUITY FUNDS FLEXIBLE
FUND
- ------------------------------------------------------------------------------------------------------------------------------
Small Small Global
Growth & Equity Capital Company Company International Financial
Growth Income Equity Income Appreciation Growth Value Growth Services Managed
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Stocks(1) o o o o o o o o o
- ------------------------------------------------------------------------------------------------------------------------------
Foreign Stocks o o
- ------------------------------------------------------------------------------------------------------------------------------
Bonds o
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- -------------------
1. Each Fund that invests in U.S. stocks may invest in large
capitalization companies, medium capitalization companies and small
capitalization companies. Large Capitalization Companies generally,
have market capitalizations of over $5 billion. Medium Capitalization
Companies generally have market capitalizations ranging from $1 billion
to $5 billion. Small Capitalization Companies generally have market
capitalizations of $1 billion or less. However, there may be some
overlap among capitalization categories. The Growth and Income Fund
intends to invest primarily in stocks of large capitalization
companies. The Small Company Growth Fund and the Small Company Value
Fund intend to invest primarily in the stocks of small capitalization
issuers.
Each Fund also may invest in other securities, use other strategies and engage
in other investment practices, which are described in detail in our Statement of
Additional Information. Of course, we cannot guarantee that any Fund will
achieve its investment goal.
The investments listed above and the investments and strategies described
throughout this prospectus are those that a Fund may use under normal
conditions. During unusual economic or market conditions or for temporary
defensive or liquidity purposes, each Fund may invest up to 100% of its assets
in cash, money market instruments, repurchase agreements and short-term
obligations. When a Fund is investing for temporary defensive purposes, it is
not pursuing its investment goal.
50
<PAGE> 55
INCOME FUNDS' INVESTMENTS
The table below shows the Income Funds' principal investments. In other words,
the table describes the type or types of investments that we believe will most
likely help each Fund achieve its investment goal.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
GOVERNMENT SECURITIES HIGH-YIELD BOND TAX-EXEMPT INCOME
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Government Securities o
- -------------------------------------------------------------------------------------------------------------------------
Corporate Debt Securities
Junk Bonds(1) o
- -------------------------------------------------------------------------------------------------------------------------
Mortgage-Backed Securities o
- -------------------------------------------------------------------------------------------------------------------------
Municipal Securities o
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. "Junk Bond" refers to any security rated lower than "Baa" by Moody's
Investors Service. If a Moody's rating is not available, the bonds must
be rated lower than "BBB" by Standard & Poor's.
Each Fund also may invest in other securities, use other strategies and engage
in other investment practices, which are described in detail in our Statement of
Additional Information. Of course, we cannot guarantee that any Fund will
achieve its investment goal.
The investments listed above and the investments and strategies described
throughout this prospectus are those that a Fund may use under normal
conditions. During unusual economic or market conditions or for temporary
defensive or liquidity purposes, each Fund may invest up to 100% of its assets
in cash, money market instruments, repurchase agreements and short-term
obligations. When a Fund is investing for temporary defensive purposes, it is
not pursuing its investment goal.
51
<PAGE> 56
MONEY MARKET FUND'S INVESTMENTS
The Money Market Fund's principal investments include: bank obligations,
commercial paper and corporate obligations. The Fund also may invest in other
securities, use other strategies and engage in other investment practices, which
are described in detail in our Statement of Additional Information. Of course,
we cannot guarantee that the Fund will achieve its investment goal.
52
<PAGE> 57
This table shows each Fund's investment limitations as a percentage of portfolio
assets. In each case the principal types of risk are listed (see page ____ for
definitions).
- --------------------------------------------------------------------------------
5 Percent of total assets (italic type)
5 Percent of net assets (roman type)
* No policy limitation on usage; fund may be using currently
0 Permitted, but not typically used.
- - Not permitted
- --------------------------------------------------------------------------------
Conventional Securities
- --------------------------------------------------------------------------------
Non-Investment-Grade Securities. Securities rated below BBB/Baa are considered
junk bonds. Credit, market, interest rate, liquidity, valuation, information
risks.
- --------------------------------------------------------------------------------
Foreign Equities.
- - Stocks issued by foreign companies. Market, currency, information,
natural event, political risks.
- - American or European depository receipts, which are dollar-denominated
securities typically issued by American or European banks and are based
on ownership of securities issued by foreign companies. Market,
currency, information, natural event, political risks.
- --------------------------------------------------------------------------------
Restricted And Illiquid Securities. Securities not traded on the open market.
May include illiquid Rule 144A securities. Liquidity, valuation, market risks.
- --------------------------------------------------------------------------------
Investment Practices
- --------------------------------------------------------------------------------
Repurchase Agreements. The purchase of a security that must later be sold back
to the seller at the same price plus interest. Credit risk.
- --------------------------------------------------------------------------------
Securities Lending. The lending of securities to financial institutions, which
provide cash or government securities as collateral. Credit risk.
- --------------------------------------------------------------------------------
Short Sales. The selling of securities which have been borrowed on the
expectation that the market price will drop.
- - Hedged. Hedged leverage, market, correlation, liquidity,
opportunity risks.
- - Speculative. Speculative leverage, market, liquidity risks.
- --------------------------------------------------------------------------------
Short-Term Trading. Selling a security soon after purchase. A Fund engaging in
short-term trading will have higher turnover, brokerage commissions and
transaction expenses. Short-term trading may also have tax consequences,
involving a possible increase in short-term capital gains or losses. Market
risk.
- --------------------------------------------------------------------------------
When-Issued Securities and Forward Commitments. The purchase or sale of
securities for delivery at a future date; market value may change before
delivery. Market, opportunity, leverage risks.
- --------------------------------------------------------------------------------
Leveraged Derivative Securities. The Funds will not invest in derivatives for
speculative purposes, but only as a hedge against changes in the values of the
Funds' securities resulting from market conditions.
- --------------------------------------------------------------------------------
Financial Futures and Options; Securities and Index Options. Contracts involving
the right or obligation to deliver or receive assets or money depending on the
performance of one or more assets or an economic index.
- - Futures and related options. Interest rate, currency, market,
leverage, correlation, liquidity, opportunity risks.
- - Options on securities and indices. Interest rate, currency, market,
hedged or speculative leverage, correlation, liquidity, credit,
opportunity risks.
- --------------------------------------------------------------------------------
Currency Contracts. Contracts involving the right or obligation to buy or sell a
given amount of foreign currency at a specified price and future date.
Hedged. Currency, hedged leverage, correlation, liquidity, opportunity risks.
Speculative. Currency, speculative leverage, liquidity risks.
Hedged & Speculative should be indented under "Currency Contracts" and in the
same box.
- --------------------------------------------------------------------------------
Other Derivatives, Including Puts, Calls and Interest Rate Swaps. Interest rate,
currency, market, hedged or speculative leverage, correlation, liquidity,
credit, opportunity risks.
- --------------------------------------------------------------------------------
53
<PAGE> 58
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
GLOBAL HIGH- TAX-
GROWTH & EQUITY CAPITAL SMALL SMALL FINANCIAL GOVERNMENT YIELD EXEMPT MONEY
GROWTH INCOME EQUITY INCOME APPRECIATION COMPANY COMPANY INTERNATIONAL SERVICES MANAGED SECURITIES BOND INCOME MARKET
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0 0 0 0 0 * 0 0
- ----------------------------------------------------------------------------------------------------------------------------
- - - - - - - - * * - - - - -
- ----------------------------------------------------------------------------------------------------------------------------
20 20 20 20 20 20 20 * * 20 - - - -
- ----------------------------------------------------------------------------------------------------------------------------
10 10 10 10 10 10 10 10 10 10 10 10 10 10
- ----------------------------------------------------------------------------------------------------------------------------
5 5 5 5 5 5 5 5 5 5 5 5 5 5
- ----------------------------------------------------------------------------------------------------------------------------
- - - - - - - - - - - - - - -
- ----------------------------------------------------------------------------------------------------------------------------
- - - - - - - - - - - - - - -
- ----------------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0 0 0 0 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0 0 0 0 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------
10 10 10 10 10 10 10 10 10 10 10 10 10 10
- ----------------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0
- - - - - - - - - - - - - - -
- ----------------------------------------------------------------------------------------------------------------------------
- - - - - - - - - - - - - - -
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
54
<PAGE> 59
Risk Terminology
Correlation Risk: the risk that changes in the value of hedging instrument will
not match those of the asset being hedged (hedging is the use of one investment
to offset the effects of another investment). Incomplete correlation can result
in unanticipated risks.
Credit Risk: the risk that the issuer of a security, or the counterparty to a
contract, will default or otherwise become unable to honor a financial
obligation.
Currency Risk: the risk that fluctuations in the exchange rates between the U.S.
dollar and foreign currencies may negatively affect an investment. Adverse
changes in exchange rates may erode or reverse any gains produced by foreign
currency denominated investments and may widen any losses.
Information Risk: the risk that key information about a security or market is
inaccurate or unavailable.
Interest Rate Risk: the risk of market losses attributable to changes in
interest rates. With fixed-rate securities, a rise in interest rates typically
cause a fall in values, while a fall in rates typically causes a rise in values.
Leverage Risk: associated with securities or practices (such as borrowing) that
multiply small index or market movements into large changes in value.
Hedged. When a derivative (a security whose value is based on another
security or index) is used as a hedge against an opposite position that the
Fund also holds, any loss generated by the derivative should be
substantially offset by gains on the hedged investment, and vice versa.
While hedging can reduce or eliminate losses, it can also reduce or
eliminate gains.
Speculative. To the extent that a derivative is not used as a hedge, a Fund
is directly exposed to the risks of that derivative. Gains or losses from
speculative positions in a derivative may be substantially greater than the
derivative's original cost.
Liquidity Risk: the risk that certain securities may be difficult or impossible
to sell at the time and the price that the seller would like. The seller may
have to lower the price, sell other securities instead or forego an investment
opportunity, any of which could have a negative effect on Fund management or
performance.
Market Risk: the risk that the market value of a security may move up or down,
sometimes rapidly and unpredictably. These fluctuations may cause a security to
be worth less than the price originally paid for it, or less than it was worth
at an earlier time. Market risk may affect a single issuer, industry, sector of
the economy or the market as a whole. Common to all stocks and bonds and the
mutual funds that invest in them.
Natural Event Risk: the risk of losses attributable to natural disasters, crop
failures and similar events.
Opportunity Risk: the risk of missing out on an investment opportunity because
the assets necessary to take advantage of it are tied up in less advantageous
investments.
Political Risks: the risk of losses attributable to government or political
actions, from changes in tax or trade statutes to governmental collapse and war.
55
<PAGE> 60
Valuation Risk: the risk that a Fund has valued certain of its securities at a
higher price than it can sell them for.
SHAREHOLDER ACCOUNT INFORMATION
Selecting A Share Class
Each Fund offers three Classes of shares through this Prospectus: Class
A, B and C shares. Each Class of shares has its own sales charge and expense
structure, which allows you to choose the Class of shares best suited to your
investment needs. When choosing your Class of shares, you should consider the
size of your investment and how long you plan to hold your shares. Your
financial advisor can help you determine which Class is right for you.
The table below summarizes the key features of Class A, B and C shares.
They are described in more detail below.
<TABLE>
<CAPTION>
Class A Class B Class C
<S> <C> <C> <C>
Availability? Generally available Available only to Available only to
through most investment investors purchasing less investors purchasing less
dealers. than $250,000 in the than $1,000,000 in the
aggregate. aggregate.
Initial Sales Charge? Yes (except for Money No. Entire purchase is No. Entire purchase is
Market Fund Class A invested in shares of a invested in shares of a
shares, which carry no Fund. Fund.
sales charge). Payable
at time of purchase.
Lower sales charges
available for larger
investments.
Contingent Deferred No. (However, a CDSC Yes. Payable if you Yes. Payable if you
Sales Charge may be charged for redeem your shares redeem your shares
("CDSC")? purchases over $1 within six years of within one year of
million that are sold purchase. purchase.
within two years, on Amount of CDSC
which no initial sales gradually decreases over
charge was imposed.) time.
Distribution and Service 0.45% distribution and 0.75% distribution fee 0.75% distribution fee
Fees? service fee (except and 0.25% service fee and 0.25% service fee
Money Market Fund) (except Money Market (except Money Market
Fund) Fund)
</TABLE>
56
<PAGE> 61
<TABLE>
<S> <C> <C> <C>
Conversion to Class A No. Yes, automatically after No.
Shares? eight years.
</TABLE>
Enterprise Fund Distributors, Inc., a subsidiary of Enterprise Capital
Management, Inc., the Advisor to the Funds, is the principal underwriter for
shares of the Funds. In addition to distribution and service fees paid the Funds
under the Class A, Class B and Class C distribution plans, the Distributor (or
one of its affiliates) may make payments to dealers (including MONY Securities
Corp.) and other persons which distribute shares of the Funds. Such payments may
be calculated by reference to the net asset value of shares sold by such persons
or otherwise.
CLASS A SHARES- INITIAL SALES CHARGE OPTION
If you select Class A shares of any Fund other than the Money Market
Fund, you will pay a sales charge at the time of purchase. No initial sales
charge applies to Class A shares that you receive through reinvestment of
dividends or distributions. However, if you have received shares of the Money
Market Fund through reinvestment of dividends, and you subsequently exchange
those shares for Class A shares of another Fund, an initial sales charge will
apply to the Class A purchase. The sales charges applicable to Class A shares
are based on the following schedule:
<TABLE>
<CAPTION>
Your Investment(1) Sales Charge as a Sales Charge as a Dealer Discount or
Percentage of Offering Percentage of Amount Agency Fee as a
Price Invested Percentage of Offering
Price(2)
<S> <C> <C> <C>
Up to $99,999 4.75% 4.99% 4.00%
$100,000 up to 3.75% 3.90% 3.00%
$249,999
$250,000 up to 2.50% 2.56% 2.00%
$499,999
$500,000 up to 2.00% 2.04% 1.50%
$999,999
$1,000,000 and up(3) None None 1% of the first $4.99
million, plus 0.75%
of amounts from $5-19.99
million, plus .50% of
amounts in excess of
$20 million.
</TABLE>
- -------------------
1. In determining the amount of your investment and the applicable sales
charge, Enterprise will include all shares you are currently purchasing
in all of the Funds, except for shares of the Money Market Fund.
57
<PAGE> 62
2. From time to time upon written notice to all of its dealers, the
Distributor may hold special promotions for specified periods during
which the Distributor may reallow dealers up to the full sales charges
shown above. During such periods, dealers may be deemed to have certain
additional responsibilities under the securities laws. In addition, the
Distributor may sponsor sales contests and provide to all qualifying
dealers, from its own profits and resources, additional compensation in
the form of trips or merchandise. The Distributor will provide
additional compensation to dealers in connection with sales of shares
of the Funds and other mutual funds distributed by the Distributor
including promotional gifts (which may include gift certificates,
dinners and other items), financial assistance to dealers in connection
with conferences, sales or training programs for their employees,
seminars for the public and advertising campaigns. In some instances,
these incentives may be made available only to dealers whose
representatives have sold or are expected to sell significant amounts
of shares.
3. If you invest $1,000,000 or more in Class A shares, you will not pay an
initial sales charge. However, if you redeem your shares within 24
months of the end of the calendar month of their purchase, you may be
charged a CDSC. The Distributor will compensate dealers in connection
with purchases of Class A shares in excess of $1,000,000.
If you purchase Class A shares, you will also pay a distribution and
service fee at an annual rate of 0.45% daily net assets attributable to Class A
shares of each Fund.
CLASS B AND C SHARES - CDSC OPTIONS
If you select Class B or Class C shares, you will not pay an initial
sales charge at the time of purchase. However, if you redeem your Class B shares
within six years of purchase or Class C shares within one year, you may be
required to pay a CDSC, which will be deducted from your redemption proceeds. If
you own Class B or C shares of a Fund other than the Money Market Fund, you will
also pay distribution fees of 0.75% and service fees of 0.25% each year pursuant
to Rule 12b-l under the Investment Company Act of 1940. Because these fees are
paid from the Funds' assets on an ongoing basis, over time these fees increase
the cost of your investment and may cost you more than paying an initial sales
charge. The Distributor uses the money that it receives from the CDSC and the
distribution fees to reimburse its expenses of providing distribution related
services to the Funds.
The Fund will not accept purchase orders for Class B shares in amounts
of $250,000 or more, and will not accept purchase orders for Class C shares in
amounts of $1,000,000 or more.
The Class B CDSC gradually decreases as you hold your shares over time,
according to the following schedule:
<TABLE>
<CAPTION>
Applicable Class B
Years Since Purchase Contingent Deferred
Order Was Accepted Sales Charge
-------------------- -------------------
<S> <C>
One year 5.00%
Over one year through 2 years 4.00%
Over two years through 3 years 4.00%
Over three years through 4 years 3.00%
</TABLE>
58
<PAGE> 63
<TABLE>
<CAPTION>
Applicable Class B
Years Since Purchase Contingent Deferred
Order Was Accepted Sales Charge
<S> <C>
Over four years through 5 years 2.00%
Over five years through 6 years 1.00%
Six or more years None
</TABLE>
If you redeem Class C shares within 12 months after purchase, you may
be charged a CDSC of 1.00%.
DETERMINATION OF THE CDSC
Each applicable CDSC will be determined using the original purchase
cost or current market value of the shares being redeemed, whichever is less.
There is no CDSC imposed upon the redemption of reinvested dividends or
distributions. Moreover, no CDSC will be charged upon the exchange of shares
from one Fund into another. In determining whether a CDSC is payable, we assume
that shares that are not subject to a CDSC are redeemed first and that other
shares are then redeemed in the order purchased. If shares of the Money Market
Fund are acquired upon an exchange from shares of another Fund, your Money
Market Fund shares will continue to be subject to any CDSC that applied at the
time of exchange. The time period during which you hold Money Market Fund shares
will not be taken into account for purposes of determining the CDSC applicable
upon redemption.
SALES CHARGE WAIVERS AND REDUCTIONS
CLASS A WAIVERS AND REDUCTIONS
The following individuals and institutions may purchase Class A shares
without an initial sales charge:
- Selling brokers, their employees and their registered
representatives.
- Employees, clients or direct referrals of any Fund
Manager or of Evaluation Associates, Inc.
- Directors, former directors, employees or retirees of
a Fund or of The MONY Group Inc. ("MONY") and its
subsidiaries.
- Family including spouses, parents, siblings, children
and grandchildren and employee benefit plans of any
of the foregoing.
- Certain employee benefit plans qualified under
Sections 401 and 403 of the Internal Revenue Code,
including salary reduction plans qualified under
Section 401(k) and certain payroll deduction plans,
subject to minimum requirements with respect to
number of participants or plan assets which may be
established by the Distributor.
- MONY and its subsidiaries.
- Clients of fee-based financial planners.
- Financial institutions and financial institutions'
trust departments for funds over which they exercise
exclusive discretionary investment authority and
which are held in fiduciary, agency, advisory,
custodial or similar capacity.
59
<PAGE> 64
The Class A initial sales charge may be reduced in connection with
purchases by members of certain associations, fraternal groups, franchise
organizations and unions. There are also several special purchase plans that
allow you to combine multiple purchases of Class A shares to take advantage of
the breakpoints in the sales charge schedule. For information about initial
sales charge reductions, the "Right of Accumulation Discount" and "Letter of
Intent Investments," contact your financial advisor or broker, or consult the
Statement of Additional Information.
If you are eligible to purchase Class A shares without an initial sales
charge because you fit within one of the categories described above, you will
also qualify for a waiver of any CDSC that would otherwise apply to your
redemption of Class A shares.
The CDSC will not apply to Class A shares for which the selling dealer
is not permitted to receive a sales load or redemption fee imposed on a
shareholder with whom such dealer has a fiduciary relationship in accordance
with provisions of the Employee Retirement Income Security Act and regulations
thereunder, provided that the dealer agrees to certain reimbursement
arrangements with the Distributor that are described in the Statement of
Additional Information. If the dealer agrees to these reimbursement
arrangements, no CDSC will be imposed with respect to shares purchased for
$1,000,000 or more.
CDSC WAIVERS
Enterprise will waive your CDSC in connection with:
- Distributions to participants or beneficiaries of and
redemptions (other than redemption of the entire
plan) by plans qualified under Section 401(a) of the
Internal Revenue Code (IRC) or from custodial
accounts under the IRC Section 403(b)(7), individual
retirement accounts under the IRC Section 408(a),
deferred compensation plans under the IRC Section 457
and other employee benefit plans ("plans"), and
returns of excess contributions made to these plans.
- The liquidation of a shareholder's account if the
aggregate net asset value of shares held in the
account is less than the required minimum.
- Redemption of shares of a shareholder (including a
registered joint owner) who has died.
- Redemption of shares of a shareholder (including a
registered joint owner) who after purchase of the
shares being sold becomes totally disabled (as
evidenced by a determination by the federal Social
Security Administration).
- Redemptions under a Fund's systematic withdrawal plan
at a maximum of 10% per year of the net asset value
of the account.
- Redemptions made pursuant to any Individual
Retirement Account (IRA) systematic withdrawal based
on the shareholder's life expectancy [in accordance
with the requirements of the Internal Revenue Code].
60
<PAGE> 65
CONVERSION OF CLASS B SHARES
Your Class B shares will automatically convert to Class A shares of
the same Fund eight years after the end of the calendar month in which your
purchase order for Class B shares was accepted. A pro rata portion of any Class
B shares acquired through reinvestment of dividends or distributions will
convert along with Class B shares that were purchased. Class A shares are
subject to lower expenses than Class B shares. The conversion of Class B to
Class A is not a taxable event for federal income tax purposes.
REINSTATEMENT PRIVILEGE
If you redeem shares of a Fund on which you paid an initial sales
charge or are charged a CDSC upon redemption, you will be eligible for a
reinstatement privilege if you reinvest the proceeds in shares of the same Class
of the same or a different Fund within 180 days of redemption. Specifically,
when you reinvest, the Fund will waive any initial sales charge or credit your
account with the amount of the CDSC that you previously paid. The reinvested
shares will keep their original cost and purchase date for purposes of
calculating any future CDSCs. The return of a CDSC may affect determination of
gain or loss relating to the original sale transaction for federal income tax
purposes. The Fund may modify or terminate the reinvestment privilege at any
time.
61
<PAGE> 66
PURCHASING, REDEEMING AND EXCHANGING SHARES
The charts below summarize how to purchase, redeem and exchange shares
of the Funds.
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------------------------
How to Purchase Shares Important Information about Purchasing Shares
- ---------------------------------------------------------------------------------------------------------------------
Select the Fund and the share Class Be sure to read this prospectus carefully.
appropriate for you
- ---------------------------------------------------------------------------------------------------------------------
Determine how much you would like to The minimum initial investment for the Funds is $1,000 for all accounts,
invest except:
- $250 for retirement plans
- $100 for the Automatic Bank Draft Plan
The minimum investment for additional purchases is $50 for all accounts
except:
- $25 for retirement plans
- $25 for the Automatic Bank Draft Plan
- ---------------------------------------------------------------------------------------------------------------------
Have your securities dealer submit your The price of your shares is based on the next calculation of net asset
purchase order value after your order is received by the Enterprise Shareholder Services
Division of the Transfer Agent. All purchases made by check should be in
U.S. dollars and made payable to The Enterprise Group of Funds, Inc., or
in the case of a retirement account, the custodian or trustee. Third-
party checks will not be accepted.
- ---------------------------------------------------------------------------------------------------------------------
Acquire additional shares through the Dividends and capital gains distributions may be automatically reinvested
Automatic Reinvestment Plan in the same Class of shares without a sales charge. This does not apply to
Money Market Fund dividends invested in another Fund.
- ---------------------------------------------------------------------------------------------------------------------
Participate in the Automatic Bank Draft Your bank account may be debited monthly for automatic investment into one
Plan or more of the Funds for each Class.
- ---------------------------------------------------------------------------------------------------------------------
Participate in the Automatic Investment You may have your shares automatically invested on a monthly basis into
Plan the same Class of one or more of the Funds. As long as you maintain a
balance of $1,000 in the account from which you are transferring your
shares, you may transfer $50 or more to an established account in an
Enterprise Fund or you may open a new account with $100 or more.
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
62
<PAGE> 67
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------------------------
Participate in a Retirement Plan You may use shares of the Funds to establish a Profit Sharing Plan,
Money Purchase Plan, Conventional IRA, Roth IRA, Educational IRA, other
retirement plans funded by shares of a Fund and other investment plans
which have been approved by the Internal Revenue Service.
The Distributor pays the cost of these plans, except for the retirement
plans, which charge an annual custodial fee of $10. If you would like to
find out more about these plans, please contact the Transfer Agent.
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
How to Redeem Your Shares Important Information about Redeeming Your Shares
- ---------------------------------------------------------------------------------------------------------------------
Have your investment dealer submit your The redemption price of your shares is based on the next calculation of
sales order net asset value after your order is receive
- ---------------------------------------------------------------------------------------------------------------------
Call the Transfer Agent at You may redeem your shares by telephone if you have authorized this
1-800-368-3527 service. If you make a telephone redemption request, you must furnish:
- the name and address of record of the registered owner,
- the account number,
- the amount to be withdrawn, and
- the name of the person making the request.
Checks for telephone redemptions will be issued only to the registered
shareowner(s) and mailed to the last address of record or exchanged into
another Fund. All telephone redemption instructions are recorded and are
limited to requests of $50,000 or less.
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
63
<PAGE> 68
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------------------------
How to Redeem Your Shares Important Information about Redeeming Your Shares
- ---------------------------------------------------------------------------------------------------------------------
Write the Transfer Agent at Enterprise You may redeem your shares by sending in a written request. If you own
Shareholder Services share certificates, they must accompany the written request. You must
P.O. Box 419731 obtain a signature guarantee if:
Kansas City, MO - the redemption proceeds exceed $50,000,
64141-6731 - the proceeds are to be sent to an address other
than the address of record, or
- the proceeds are to be sent to a person other than
the registered holder.
You can generally obtain a signature guarantee from the following sources:
- a member firm of a domestic securities exchange;
- a commercial bank;
- a savings and loan association;
- a credit union; or
- a trust company.
Corporations, executors, administrators, trustees or guardians may need to
include additional documentation with a request to redeem shares and a
signature guarantee.
- ---------------------------------------------------------------------------------------------------------------------
Payment of Proceeds Generally The Funds normally will make payment of redemption proceeds within seven
days after your request has been properly made and received. When
purchases are made by check or periodic account investment, redemption
proceeds may not be available until the investment being redeemed has been
in the account for seven calendar days.
- ---------------------------------------------------------------------------------------------------------------------
Receipt of Proceeds By Wire For a separate $15 charge, you may request that your redemption proceeds
of $250,000 or less be wired. If you submit a written request, your
proceeds may be wired to any bank. If you authorize the Transfer Agent to
accept telephone wire requests, any authorized person may make such
requests at 1-800-368-3527. However, on a telephone request, your
proceeds may be wired only to a bank previously designated by you in
writing. If you have authorized expedited wire redemption, shares can be
sold and the proceeds sent by federal wire transfer to a single,
previously designated bank account. Otherwise, proceeds normally will be
sent to the designated bank account the following business day. To change
the name of the single designated bank account to receive wire redemption
proceeds, you must send a written request with signature(s) guaranteed to
the Transfer Agent.
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
64
<PAGE> 69
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------------------------
How to Redeem Your Shares Important Information about Redeeming Your Shares
- ---------------------------------------------------------------------------------------------------------------------
Use of Check Writing If you hold an account with a balance of more than $5,000 in Class A
shares of the Money Market Fund you may redeem your shares of that Fund by
redemption check. You may make redemption checks payable in any amount
from $500 to $100,000. You may write up to five redemption checks per
month without charge. Each additional redemption check in any given month
will be subject to a $5 fee. You may obtain redemption checks, without
charge, by calling 1-800-368-3527 or writing Enterprise Shareholder
Services at P.O. Box 419731, Kansas City, MO 64141-6731.
The Funds may charge a $25 fee for stopping payment of a redemption check
upon your request. It is not possible to use a redemption check to close
out an account since additional shares accrue daily. Redemptions by check
writing may be subject to a CDSC if the Money Market Fund shares being
redeemed were purchased by exchanged shares of another Fund on which a
CDSC was applicable. The Funds will honor the check only if there are
sufficient funds available in your Money Market Fund account to cover the
fee amount of the check plus applicable CDSC, if any.
- ---------------------------------------------------------------------------------------------------------------------
Participate in the Bank Purchase and You may initiate an Automatic Clearing House (ACH) Purchase or Redemption
Redemption Plan directly to a bank account when you have established proper instructions,
including all applicable bank information, on the account.
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
65
<PAGE> 70
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------------------------
How to Redeem Your Shares Important Information about Redeeming Your Shares
- ---------------------------------------------------------------------------------------------------------------------
Participate in a Systematic Withdrawal If you have at least $5,000 in your account you may participate in a
Plan systematic withdrawal plan. Under a plan, you may arrange monthly,
quarterly, semi-annual or annual automatic withdrawals of at least $100
from any Fund. The proceeds of each withdrawal will be mailed to you or
as you otherwise direct in writing, including to a life insurance company,
such as an affiliate of MONY. The $5,000 minimum account size is not
applicable to Individual Retirement Accounts. The maximum annual rate at
which Class B shares may be sold under a systematic withdrawal plan is 10%
of the net asset value of the account. The Funds process sales through a
systematic withdrawal plan on the 15th day of the month or the preceding
business day if the 15th is not a business day. Any income or capital
gain dividends will be automatically reinvested at net asset value. A
sufficient number of full and fractional shares will be redeemed to make
the designated payment. Depending upon the size of the payments requested
and fluctuations in the net asset value of the shares redeemed, sales for
the purpose of making such payments may reduce or even exhaust the account.
You should not purchase Class A shares while participating in a systematic
withdrawal plan because you may be redeeming shares upon which a sales
charge was already paid. The Funds will not knowingly permit additional
investments of less than $2,000 if you are making systematic withdrawals
at the same time. The Advisor will waive the CDSC on redemptions of
shares made pursuant to a systematic withdrawal plan.
The Funds may amend a systematic withdrawal plan on 30 days' notice. You
or the Funds may terminate the plan at any time.
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
66
<PAGE> 71
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------------------------
How to Exchange Your Shares Important Information about Exchanging Your Shares
- ---------------------------------------------------------------------------------------------------------------------
Select the Fund into which you want to You can exchange your shares of a Fund for the same Class of shares of any
exchange. Be sure to read the other Fund.
prospectus describing the Fund into
which you want to exchange. No CDSC will be charged upon the exchange of shares. However, if shares of
the Money Market Fund are acquired upon an exchange from shares of another
Fund, your Money Market Fund shares will continue to be subject to any
CDSC that applied at the time of exchange. The time period during which
you hold Money Market Fund shares will not be taken into account for
purposes of determining the CDSC applicable upon redemption. Shares of a
Fund subject to an exchange will be processed at net asset value next
determined after the Transfer Agent receives your exchange request. In
determining the CDSC applicable to shares being redeemed subsequent to an
exchange, Enterprise will take into account the length of time you held
shares prior to the exchange.
If your exchange results in the opening of a new account in a Fund, you
are subject to the applicable minimum investment requirements. Original
investments in the Money Market Fund which are transferred to other Funds
are considered purchases rather than exchanges.
- ---------------------------------------------------------------------------------------------------------------------
Call the Transfer Agent at If you authorize the Transfer Agent to act upon telephone exchange
1-800-368-3527 requests, you or anyone who can provide the Transfer Agent with account
registration information may exchange by telephone.
If you exchange your shares by telephone, you must furnish:
- the name of the Fund you are exchanging from,
- the name and address of the registered owner,
- the account number,
- the dollar amount or number of shares to be exchanged,
- the Fund into which you are exchanging, and
- the name of the person making the request.
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
67
<PAGE> 72
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------------------------
How to Exchange Your Shares Important Information about Exchanging Your Shares
- ---------------------------------------------------------------------------------------------------------------------
Write the Transfer Agent at To exchange by letter, you must state:
Enterprise Shareholder Services - the name of the Fund you are exchanging from,
P.O. Box 419731 - the account name(s) and address,
Kansas City, MO - the account number,
64141-6731 - the dollar amount or number of shares to be exchanged, and
- the Fund into which you are exchanging.
You must also sign your name(s) exactly as it appears on your account
statement.
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
TRANSACTION AND ACCOUNT POLICIES
VALUATION OF SHARES
When you purchase shares, you pay the offering price, which is net
asset value, plus any applicable sales charges. When you redeem your shares,
you receive the net asset value, minus any applicable CDSC. The Funds calculate
a share's net asset value by dividing net assets of each Class by the total
number of outstanding shares of such Class.
The Funds calculate net asset value at the close of regular trading
(generally 4:00 p.m. Eastern time) on each day the New York Stock Exchange is
open.
Except with respect to the Money Market Fund, 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 sale price on the exchange on which the security is
primarily traded. If there are no current day 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.
The Money Market Fund seeks to maintain a constant net asset value per
share of $1.00, but there can be no assurance that the Money Market Fund will be
able to do so.
The different expenses borne by each Class of shares of a Fund will
result in different net asset values and dividends for each Class. It is
expected, however, that the net asset values of the three Classes of each Fund
will tend to converge immediately after the recording of dividends.
68
<PAGE> 73
EXECUTION OF REQUESTS
The net asset value used in determining your purchase, redemption or
exchange price is the one next calculated after your order is received by the
Fund. The Distributor or the Fund may reject any order. From time to time,
the Funds may suspend the sale of shares. In such event, existing shareholders
normally will be permitted to continue to purchase additional shares of the
same Class and to have dividends reinvested.
The Funds normally pay redemption proceeds in cash. However, if a
Fund determines that it would be detrimental to the best interests of the
remaining shareholders of the Fund to make payment of redemption proceeds
wholly or partly in cash, the Fund may pay the redemption price in securities
(redemption in kind), in which case, you would probably have to pay brokerage
costs to sell the securities distributed to you, as well as taxes on any
capital gains from the sale as with any redemption. The Funds have made an
election that requires them to pay $250,000 of redemption proceeds in cash
subject to other restrictions as described in the Statement of Additional
Information.
TELEPHONE TRANSACTIONS
If you elect to exchange or redeem your shares by telephone, you are
subject to the risk that neither the Funds nor the Transfer Agent will be
liable for properly acting upon unauthorized telephone instructions believed to
be genuine. The Funds use reasonable procedures to confirm that telephone
instructions are genuine. However, if appropriate measures are not taken, the
Funds may be liable for any losses that may occur to an account due to an
unauthorized telephone call.
EXCHANGES
The Funds may refuse to allow the exercise of the exchange privilege
in less than two-week intervals or may restrict an exchange from any Fund until
shares have been held in that Fund for at least seven days. The Funds may also
discontinue or modify the exchange privilege on a prospective basis at any
time, including a modification of the amount or terms of a service fee, upon
notice to shareholders in accordance with applicable rules adopted by the
Securities and Exchange Commission ("SEC"). Your exchange may be processed
only if the shares of the Fund to be acquired are eligible for sale in your
state and if the exchange privilege may be legally offered in your state.
In addition, if a Fund determines that an investor is using market
timing strategies or making excessive exchanges and immediate loss of
redemption proceeds would harm the Fund, the Fund may delay investment of the
proceeds of such investor's exchange request for up to seven days.
SHARE CERTIFICATES
The Funds do not ordinarily issue certificates representing shares of
the Funds. Instead, shares are held on deposit for shareholders by the Funds'
Transfer Agent, which will send you a statement of shares owned in each Fund
following each transaction in your account. If you wish to have certificates
for your shares, you may request them from the Transfer Agent by writing to
Enterprise Shareholder Services, P.O. Box 419731, Kansas City, Mo. 64141-6731.
The Funds do not issue certificates for fractional shares. You may redeem or
exchange certificated shares only by returning the certificates to the Fund,
along with a letter
69
<PAGE> 74
of instruction and a signature guarantee. Special shareholder services such as
telephone redemptions, exchanges, electronic funds transfers and wire orders
are not available if you hold certificates.
SMALL ACCOUNTS
For accounts with balances under $1,000, an annual service charge of
$25 per account registration per Fund will apply, excluding Automatic Bank
Draft Plan Accounts, Automatic Investment Plan Accounts, Retirement Accounts
and Savings Plan Accounts.
If your account balance drops to $500 or less, a Fund may close out
your account and mail you the proceeds. You will always be given at least 45
days' written notice to give you time to add to your account and avoid
redeeming your shares.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Fund will distribute substantially all of its net investment
income and realized net capital gains, if any.
Each Fund makes distributions of capital gains, if any, annually.
Each Fund declares and pays dividends of investment income according to the
following schedule:
<TABLE>
<CAPTION>
Declared and Paid Annually Declared and Paid Semi-Annually Declared and Paid Monthly
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Growth Fund Equity Income Fund Government Securities Fund
Growth and Income Fund High-Yield Bond Fund
Equity Fund Tax-Exempt Income Fund
Capital Appreciation Fund Money Market Fund
Small Company Growth Fund
Small Company Value Fund
International Growth Fund
Global Financial Services Fund
Managed Fund
</TABLE>
Your dividends and capital gains distributions, if any, will be
automatically reinvested in shares of the same Fund and Class on which they
were paid at net asset value. Such reinvestments automatically occur on the
payment date of such dividends and capital gains distributions.
Alternatively, if you contact the Transfer Agent, you may elect to receive
dividends or capital gains distributions, or both, in cash.
70
<PAGE> 75
You will pay tax on dividends and distributions from the Funds whether
you receive them in cash or additional shares. The Funds intend to make
distributions that will either be taxed as ordinary income or capital gains. If,
for any taxable year, a Fund distributes income from dividends from domestic
corporations, and complies with certain requirements, corporations may be
entitled to take a dividends - received deduction for some or all of the
dividends they receive.
If you redeem shares of a Fund or exchange them for shares of another
Fund, unless you are a dealer, you generally will recognize capital gain or loss
on the transaction. Any such gain or loss will be a long-term capital gain or
loss, taxable, if you held such shares for more than 12 months. The maximum
long-term capital gain tax rate for individuals is 20%.
Income received by the Funds from investments in securities issued by
foreign issuers may give rise to withholding and other taxes imposed by foreign
countries. Tax conventions between certain countries and the United States may
reduce or eliminate such taxes.
If you are neither a lawful permanent resident nor a citizen of the
U.S. or if you are a foreign entity, the Funds' ordinary income dividends (which
include distributions of net short term capital gains) will generally be subject
to a 30% U.S. withholding tax, unless a lower treaty rate applies.
The Funds are required to withhold 31% ("Back-Up Withholding") of the
distributions and the proceeds of redemptions payable to shareholders who fail
to provide a correct social security or taxpayer identification number [or to
make required certifications, or who have been notified by the Internal Revenue
Service that they are subject to Back-up Withholding. Corporate shareholders and
certain other shareholders specified in the IRC are exempt from Back-Up
Withholding.
Dividends derived from interest on municipal securities and designated
by the Tax-Exempt Income Fund as exempt interest dividends by written notice to
the shareholders, under existing law, are not subject to federal income tax.
Dividends derived from net capital gains realized by the Fund are taxable to
shareholders as a capital gain upon distribution. Any short-term capital gains
or any taxable interest income or accrued market discount realized by the Fund
will be distributed as a taxable ordinary income dividend distribution. These
rules apply whether such distribution is made in cash or in additional shares.
Any capital loss realized from shares held for six months or less is disallowed
to the extent of tax-exempt dividend income received.
Income from certain "private activity" bonds issued after August 7,
1986, are items of tax preference for the corporate and individual alternative
minimum tax. If the Tax-Exempt Income Fund invests in private activity bonds,
you may be subject to the alternative minimum tax on that part of such Fund
distributions derived from interest income on those bonds. The receipt of
exempt-interest dividends also may have additional tax consequences. Certain of
these are described in the Statement of Additional Information.
71
<PAGE> 76
The treatment for state and local tax purpose of distributions from the
Tax-Exempt Income Fund representing municipal securities interests will vary
according to the laws of state and local taxing authorities.
The foregoing summarizes some of the federal income tax considerations
with respect to the Funds and their shareholders. It is not a substitute for
personal tax advice. You should consult your tax advisor for more information
regarding the potential tax consequences of an investment in the Funds under all
applicable tax laws.
The Funds will mail statements indicating the tax status of your
distributions to you annually.
FUND MANAGEMENT
THE INVESTMENT ADVISOR
Enterprise Capital Management, Inc. serves as the investment advisor to
each of the Funds. The Advisor selects Fund Managers for the Funds, subject to
the approval of the Board of Directors of the Funds, and reviews their continued
performance. Evaluation Associates, Inc., which has had 26 years of experience
in evaluating investment advisors for individuals and institutional investors,
assists the Advisor in selecting Fund Managers. The Advisor also provides
various administrative services and acts as Fund Manager for the Money Market
Fund.
The Securities and Exchange Commission has issued an exemptive order
that permits the Advisor to enter into or amend Agreements with Fund Managers
without obtaining shareholder approval each time. The exemptive order permits
the Advisor, with Board approval, to employ new Fund Managers for the Funds,
change the terms of the Agreements with Fund Managers or enter into a new
Agreement with a Fund Manager. Shareholders of a Fund have the right to
terminate an agreement with a Fund Manager at any time by a vote of the majority
of the outstanding voting securities of such Fund. The Fund will notify
shareholders of any Fund Manager changes or other material amendments to the
Agreements with Fund Managers that occur under these arrangements.
The Advisor, which was incorporated in 1986, served as principal
investment advisor to Alpha Fund, Inc., the predecessor of the Fund's Growth
Fund. The Advisor also serves as investment advisor to Enterprise Accumulation
Trust which had assets of $[ ] billion at March 31, 1999. The Advisor's address
is Atlanta Financial Center, 3343 Peachtree Road, N.E., Suite 450, Atlanta,
Georgia 30326.
The following table sets forth the fee paid to the Advisor for the
fiscal year ended December 31, 1998 by each Fund. The Advisor in turn
compensated each Fund Manager at no additional cost to the Fund.
72
<PAGE> 77
<TABLE>
<CAPTION>
Name of Fund Fee (as a percentage of average net
assets)
<S> <C>
Growth Fund 0.75%
Growth and Income Fund 0.75%
Equity Fund 0.75%
Equity Income Fund 0.75%
Capital Appreciation Fund 0.75%
Small Company Growth Fund 1.00%
Small Company Value Fund 0.75%
International Growth Fund 0.85%
Global Financial Services Fund 0.85%
Government Securities Fund 0.60%
High-Yield Bond Fund 0.60%
Tax-Exempt Income Fund 0.50%
Managed Fund 0.75%
Money Market Fund 0.35%
</TABLE>
The Fund Managers
The following chart sets forth certain information about each of the
Fund Managers other than the Advisor, which acts as the Fund Manager to the
Money Market Fund. The Fund Managers are responsible for the day to day
management of the Funds. The Fund Managers typically manage assets for
institutional investors and high net worth individuals. Collectively, the Fund
Managers manage assets in excess of $350 billion for all clients, including The
Enterprise Group of Funds.
73
<PAGE> 78
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Name of Fund and Name and The Fund Manager's Portfolio Managers
Address of Fund Manager Experience
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Growth Fund Montag & Caldwell has served Ronald E. Canakaris,
as the Fund Manager to Alpha President and Chief
Montag & Caldwell, Inc. Fund, Inc., the predecessor of Investment Officer of Montag
("Montag & Caldwell") the Growth Fund, since the & Caldwell, is responsible
1100 Atlanta Financial Center Fund was organized in 1968. for the day-to-day investment
3343 Peachtree Road, N.E. Montag & Caldwell and its management of the Growth
Atlanta, Georgia 30326 predecessors have been Fund and has more than 30
engaged in the business of years' experience in the
providing investment counseling investment industry. He has
to individuals and institutions been President of Montag &
since 1945. Total assets under Caldwell for more than 15
management for all clients years and has served as Fund
approximated $25.8 billion as of Manager since its inception.
Dec. 31, 1998 Usual investment
minimum: $40 million.
- ----------------------------------------------------------------------------------------------------------------
Growth and Income Fund RSI has served as Fund Manager James P. Coughlin, President
Retirement System Fund Inc. Core and Chief Investment Officer
Retirement System Investors Inc. Equity Fund, the predecessor of of RSI, is responsible for the
("RSI") The Growth and Income Fund, since day-to-day management of
317 Madison Avenue the Fund was organized in 1991. the Fund and has more than
New York, New York 10017 RSI has been engaged in providing 30 years' experience in the
investment advisory services since investment industry. He has
1989. served as President and Chief
Investment Officer of RSI
Total assets under management for since 1989.
RSI were $597 million as of
Dec. 31, 1998.
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
74
<PAGE> 79
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Name of Fund and Name and The Fund Manager's Portfolio Managers
Address of Fund Manager Experience
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Equity Fund OpCap has been providing investment Eileen Rominger, Managing
counseling since 1987. Director of Oppenheimer
OpCap Advisors ("OpCap") OpCap had approximately $62 billion Capital, is responsible for the
One World Financial Center under management as of Dec 31, 1998. day-to-day management of
New York, New York 10281 Usual investment minimum is $20 the Fund. Ms. Rominger has
million. more than 20 years' experience
in the investment industry and
has been Managing Director of
Oppenheimer Capital since 1994.
She previously served as Senior
Vice President from 1986 to
1994.
- ----------------------------------------------------------------------------------------------------------------
Equity Income Fund 1740 Advisers has been providing John V. Rock, President and
investment counseling since 1971. Director of 1740 Advisers, is
1740 Advisers, Inc. ("1740 Total assets under management responsible for the day-to-
Advisers") for 1740 Advisers as of day investment management
1740 Broadway Dec. 31, 1998, were of the Fund and has more
New York, New York 10019 approximately $1.9 billion. than 35 years' experience in
Usual investment minimum: $20 the investment industry. He
million. has served as President of
1740 Advisers since 1974.
- ----------------------------------------------------------------------------------------------------------------
Capital Appreciation Fund PIC has served as Fund Manager since Jeffrey J. Miller is a Managing
its inception in 1987. Director of PIC and is
Provident Investment Counsel, PIC traces its origins to an responsible for the day-to-
Inc. ("PIC") investment partnership formed day management of the Fund.
300 North Lake Avenue in 1951. As of Dec. 31, 1998, He has more than 26 years'
Pasadena, California 91101 total assets under management experience in the investment
for all clients were $20.4 billion. industry. He has been Managing
Usual investment minimum: $5 Director of PIC since 1972.
million.
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
75
<PAGE> 80
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Name of Fund and Name and The Fund Manager's Portfolio Managers
Address of Fund Manager Experience
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Small Company Growth Fund Witter has provided investment William D. Witter, President
counseling since 1997. of Witter, and Paul B.
As of Dec. 31, 1998, total assets Phillips, Managing Director,
under management for all clients are responsible for the day-
William D. Witter, Inc. ("Witter") were $905 million. Usual investment to-day management of the
One Citicorp Center minimum is $1 million. Fund. They have more than
153 East 53rd Street 80 years' combined
New York, New York 10022 experience in the investment
industry. Mr. Witter and Mr.
Phillips have been employed
in their present positions by
Witter since 1977 and 1996,
respectively. Mr. Phillips
previously served as Senior
Portfolio Manager at Bankers
Trust Company from 1986 to
1995.
- ----------------------------------------------------------------------------------------------------------------
Small Company Value Fund GAMCO's predecessor, Gabelli Mario J. Gabelli has served
& Company, Inc., was founded as Chief Investment Officer of
GAMCO Investors, Inc. in 1977. As of Dec 31, 1998, GAMCO since inception in
("GAMCO") total assets under management 1977 and is responsible for
One Corporate Center for all clients were $7.2 billion. the day-to-day management
Rye, New York 10580 Usual investment minimum is of the Fund. He has more
$500,000. than 28 years' experience in
the investment industry.
- ----------------------------------------------------------------------------------------------------------------
International Growth Fund Vontobel has provided investment Fabrizio Pierallini, Senior
counseling since 1984. Vice President and Managing
Vontobel USA Inc. "Vontobel" Vontobel's assets under management Director of International
450 Park Avenue for all clients were $841 million Investments is responsible for
New York, New York 10022 as of December 31, 1998. Usual the day-to-day management of the
investment minimum is $200,000. Fund. Mr. Pierallini has been
employed by Vontobel since
1994. He previously served as a
portfolio manager for the Swiss
Bank.
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
76
<PAGE> 81
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Name of Fund and Name and The Fund Manager's Portfolio Managers
Address of Fund Manager Experience
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Global Financial Services Sanford Bernstein was The day-to-day management
Fund established in 1967 and as of of this Fund is performed by
Dec. 31, 1998, had $78.6 Sanford Bernstein's Policy
Sanford C. Bernstein & Co., billion in assets under Group, chaired by Andrew S.
Inc. ("Sanford Bernstein") management. Usual investment Adelson, who has more than
767 Fifth Avenue minimum is $5 million. 20 years' experience in the
New York, New York investment industry.
10153-0185
- ----------------------------------------------------------------------------------------------------------------
Government Securities Fund The firm was founded in 1971 Philip A. Barach, Managing
and as of Dec. 31, 1998, TCW Director of TCW, and Jeffrey
TCW Funds Management, Inc. and its affiliated companies had E. Gundlach, Managing
("TCW") approximately $54.5 billion Director are responsible for
865 South Figueroa Street Suite under management or the day-to-day investment
1800 committed for management in management of the Fund and
Los Angeles, California 90017 various fiduciary advisory have more than 37 years'
capacities. Usual investment combined experience in the
minimum: $35 million. investment industry. They
have served as Managing
Directors since they joined TCW
in 1987 and 1985, respectively.
- ----------------------------------------------------------------------------------------------------------------
High-Yield Bond Fund Caywood-Scholl has provided James Caywood, Managing
investment advice with respect Director and Chief Investment
Caywood-Scholl Capital to high-yield, low grade fixed Officer of Caywood-Scholl,
Management ("Caywood-Scholl") income instruments since 1986. is responsible for the day-to-
4350 Executive Drive, Suite 125 As of Dec. 31, 1998 assets day management of the Fund.
San Diego, California 92121 under management for all clients He has more than 30 years'
approximated $973 million. investment industry
Usual investment minimum: $1 experience. He joined
million. Caywood-Scholl in 1986 as
Managing Director and Chief
Investment Officer and has
held those positions since
1986.
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
77
<PAGE> 82
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Name of Fund and Name and The Fund Manager's Portfolio Managers
Address of Fund Manager Experience
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Tax-Exempt Income Fund MBIA has provided investment Robert M. Ohanesian,
counseling services since 1987. President and Chief
MBIA Capital Management As of December 31, 1998, assets Investment Officer of MBIA,
Corp. ("MBIA") under management for all clients who has more than 25 years
113 King Street approximated $15 billion. experience in the investment
Armonk, New York 10504 Usual investment minimum: $10 industry, serves as portfolio
million. manager to the Fund. Mr.
Ohanesian joined MBIA in
1994 and previously served
as Director of Investments for
Shields Asset Management
from 1988 through 1993.
- ----------------------------------------------------------------------------------------------------------------
Managed Fund OpCap Advisors has provided Richard J. Glasebrook II,
investment counseling services Managing Director of
OpCap Advisors since 1987. As of December 31, 1998, Oppenheimer Capital is
One World Financial Center Oppenheimer Capital and its responsible for the day-to-
New York, New York 10281 affiliates have over $62 billion day management of the Fund.
under management. Its usual He has more than 25 years'
investment minimum is $20 investment industry
million. experience. Mr. Glasebrook
has served as Managing
Director of Oppenheimer
Capital since 1994 and
immediately preceding served
as Senior Vice President.
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
YEAR 2000
Many computer and computer-based systems cannot distinguish the year
2000 from the year 1900 because of the way they encode and calculate dates
(commonly known as the "Year 2000 Issue"). The Year 2000 Issue could potentially
have an adverse impact on the handling of security trades, the payment of
interest and dividends, pricing and account services. As part of its operational
responsibilities, the Advisor has reviewed each of its internal systems and has
obtained assessments from each service provider, including Fund Managers, of
Year 2000 issues which could potentially impact services to the Fund. The
Advisor is unaware of any Year 2000 issues which remain unresolved or have been
identified as unresolvable. In addition, the Advisor has established a timetable
to
78
<PAGE> 83
periodically re-evaluate systems to ensure new issues or those which may not
previously have been identified are addressed and resolved in an expeditious
manner. The Advisor does not anticipate any material expenditures for monitoring
Year 2000 issues. If the problem has not been fully addressed, however, the
Funds could be negatively affected. The Year 2000 Issue could also have a
negative impact on the companies in which the Funds invest, which could hurt the
Funds' investment returns.
FINANCIAL HIGHLIGHTS
The Financial Highlights tables for each Fund is intended to help you
understand the Fund's financial performance for the past 5 years, or, if
shorter, the period of the Fund's operations. Certain information reflects
financial results for a single Fund share. The total returns in each table
represent the rate that an investor would have earned (or lost) on an investment
in a Fund (assuming reinvestment of all dividends and distributions).
79
<PAGE> 84
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGH THE PERIODS INDICATED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------------------
GROWTH FUND (CLASS A) 1998 1997 1996 1995 1994 1993 1992(F)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period...... $ $ 13.10 $ 10.44 $ 7.76 $ 8.26 $ 7.96 $ 8.22
Net Investment Income (Loss).............. (0.07) (0.04) (0.03) (0.02) 0.01 (0.02)
Net Realized and Unrealized Gain (Loss) on
Investments.............................. 4.23 3.44 3.13 (0.06) 0.84 0.55
---------------------------------------------------------------------------------
Total from Investment Operations.......... 4.16 3.40 3.10 (0.08) 0.85 0.53
---------------------------------------------------------------------------------
Dividends from Net Investment Income...... 0.00 0.00 0.00 0.00 0.01 0.00
Distributions from Net Realized Capital
Gains.................................... 0.35 0.74 0.42 0.42 0.54 0.79
---------------------------------------------------------------------------------
Total Distributions....................... 0.35 0.74 0.42 0.42 0.55 0.79
---------------------------------------------------------------------------------
Net Asset Value, End of Period............ $ $ 16.91 $ 13.10 $ 10.44 $ 7.76 $ 8.26 $ 7.96
---------------------------------------------------------------------------------
Total Return(C)........................... 31.76% 32.60% 39.99% (0.99)% 10.59% 6.46%
Net Assets End of Period (In Thousands)... $ $424,280 $196,752 $122,559 $88,375 $90,902 $84,200
Ratio of Expenses to Average Net Assets... 1.43%(E) 1.53%(E) 1.60% 1.56% 1.60% 1.60%
Ratio of Expenses to Average Net Assets
(Excluding Waivers)...................... 1.43%(E) 1.53%(E) 1.60% 1.56% 1.61% 1.67%
Ratio of Net Investment Income (Loss) to
Average Net Assets....................... (0.55)% (0.39)% (0.35)% (0.30)% 0.10% (0.30)%
Ratio of Net Investment Income (Loss) to
Average Net Assets (Excluding Waivers)... (0.55)% (0.39)% (0.35)% (0.30)% 0.06% (0.31)%
Portfolio Turnover........................ 22.28% 29.90% 45.30% 64.50% 107.90% 61.20%
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------
GROWTH FUND (CLASS A) 1991 1990 1989 1988
- ------------------------------------------ ----------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period...... $ 6.31 $ 7.24 $ 6.25 $ 6.02
Net Investment Income (Loss).............. 0.07 0.08 0.02 0.07
Net Realized and Unrealized Gain (Loss) on
Investments.............................. 2.57 (0.24) 1.42 0.67
----------------------------------------
Total from Investment Operations.......... 2.64 (0.16) 1.44 0.74
----------------------------------------
Dividends from Net Investment Income...... 0.07 0.09 0.02 0.07
Distributions from Net Realized Capital
Gains.................................... 0.66 0.68 0.43 0.44
----------------------------------------
Total Distributions....................... 0.73 0.77 0.45 0.51
----------------------------------------
Net Asset Value, End of Period............ $ 8.22 $ 6.31 $ 7.24 $ 6.25
----------------------------------------
Total Return(C)........................... 41.79% (2.26)% 23.05% 12.30%
Net Assets End of Period (In Thousands)... $77,784 $52,897 $55,320 $40,363
Ratio of Expenses to Average Net Assets... 1.60% 1.60% 2.50% 2.50%
Ratio of Expenses to Average Net Assets
(Excluding Waivers)...................... 1.81% 1.75% 2.70% 2.60%
Ratio of Net Investment Income (Loss) to
Average Net Assets....................... 0.90% 1.00% 0.30% 0.80%
Ratio of Net Investment Income (Loss) to
Average Net Assets (Excluding Waivers)... 0.69% 0.89% 0.10% 0.75%
Portfolio Turnover........................ 74.70% 138.40% 78.30% 67.10%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, FOR THE PERIOD
---------------------------------- MAY 1 THROUGH
GROWTH FUND (CLASS B) 1998 1997 1996 DECEMBER 31, 1995
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period......... $ $ 12.97 $ 10.41 $ 8.69
Net Investment Income (Loss)................. (0.11) (0.06) (0.02)
Net Realized and Unrealized Gains (Losses) on
Investments................................. 4.15 3.36 2.16
------------------------------------------------------
Total from Investment Operations............. 4.04 3.30 2.14
------------------------------------------------------
Dividends from Net Investment Income......... 0.00 0.00 0.00
Distributions from Net Realized Capital
Gains....................................... 0.35 0.74 0.42
------------------------------------------------------
Total Distributions.......................... 0.35 0.74 0.42
------------------------------------------------------
Net Asset Value, End of Period............... $ $ 16.66 $ 12.97 $10.41
------------------------------------------------------
Total Return(D).............................. 31.15% 31.73% 24.66%(B)
Net Assets End of Period (in thousands)...... $ $166,932 $36,483 $4,572
Ratio of Expenses to Average Net Assets...... 1.98%(E) 2.10%(E) 2.15%(A)
Ratio of Expenses to Average Net Assets
(Excluding Waivers)......................... 1.98%(E) 2.10%(E) 2.15%(A)
Ratio of Net Investment Income (Loss) to
Average Net Assets.......................... (1.10)% (0.96)% (0.82)%(A)
Ratio of Net Investment Income (Loss) to
Average Net Assets (Excluding Waivers)...... (1.10)% (0.96)% (0.82)%(A)
Portfolio Turnover........................... 22.28% 29.90% 45.30%(A)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED FOR THE PERIOD
DECEMBER 31, MAY 1 THROUGH
GROWTH FUND (CLASS C) 1998 DECEMBER 31, 1997
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period........................ $ $ 14.11
Net Investment Income (Loss)................................ (0.06)
Net Realized and Unrealized Gains (Losses) on Investments... 3.15
-----------------------------
Total from Investment Operations............................ 3.09
-----------------------------
Dividends from Net Investment Income........................ 0.00
Distributions from Net Realized Capital Gains............... 0.35
-----------------------------
Total Distributions......................................... 0.35
-----------------------------
Net Asset Value, End of Period.............................. $ $ 16.85
-----------------------------
Total Return(D)............................................. 21.91%(B)
Net Assets End of Period (In Thousands)..................... $ $26,601
Ratio of Expenses to Average Net Assets..................... 1.97%(EA)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................... 1.97%(EA)
Ratio of Net Investment Income (Loss) to Average Net
Assets..................................................... (1.10)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................ (1.10)%(A)
Portfolio Turnover.......................................... 22.28%(A)
</TABLE>
A Annualized.
B Not Annualized.
C Total returns do not include one time sales charge.
D Total return does not include contingent deferred sales charge.
E Effective September 1, 1995, ratio includes expenses paid indirectly.
F Based on average monthly shares outstanding.
THE ENTERPRISE Group of Funds, Inc.
<PAGE> 85
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
FOR THE PERIOD
OCTOBER 1 FOR THE PERIOD
YEAR ENDED THROUGH JULY 17 THROUGH
GROWTH AND INCOME FUND (CLASS A) DECEMBER 31, 1998 DECEMBER 31, 1997 SEPTEMBER 30, 1997
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period........... $ 25.71 $ 25.05
Net Investment Income (Loss)................... 0.01 0.00
Net Realized and Unrealized Gain (Loss) on
Investments................................... 0.04 0.66
-----------------------------------------
Total from Investment Operations............... 0.05 0.66
-----------------------------------------
Dividends from Net Investment Income........... 0.11 0.00
Distributions from Net Realized Capital
Gains......................................... 0.46 0.00
-----------------------------------------
Total Distributions............................ 0.57 0.00
-----------------------------------------
Net Asset Value, End of Period................. $ 25.19 $ 25.71
-----------------------------------------
Total Return(C)................................ 0.20%(B) 2.63 %(B)
Net Assets End of Period (In Thousands)........ $ 4,032 $ 1,109
Ratio of Expenses to Average Net Assets........ 1.50%(A) 1.50 %(A)
Ratio of Expenses to Average Net Assets
(Excluding Waivers)........................... 2.11%(A) 4.47 %(A)
Ratio of Net Investment Income (Loss) to
Average Net Assets............................ 0.56%(A) 0.07 %(A)
Ratio of Net Investment Income (Loss) to
Average Net Assets (Excluding Waivers)........ (0.04)%(A) (2.90)%(A)
Portfolio Turnover............................. 1.46%(A) 15.69 %(A)
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
OCTOBER 1 FOR THE PERIOD
YEAR ENDED THROUGH JULY 17 THROUGH
GROWTH AND INCOME FUND (CLASS B) DECEMBER 31, 1998 DECEMBER 31, 1997 SEPTEMBER 30, 1997
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period........... $ 25.68 $ 25.05
Net Investment Income (Loss)................... (0.01) (0.01)
Net Realized and Unrealized Gains(Losses) on
Investments................................... 0.03 0.64
-----------------------------------------
Total from Investment Operations............... 0.02 0.63
-----------------------------------------
Dividends from Net Investment Income........... 0.09 0.00
Distributions from Net Realized Capital
Gains......................................... 0.46 0.00
-----------------------------------------
Total Distributions............................ 0.55 0.00
-----------------------------------------
Net Asset Value, End of Period................. $ 25.15 $ 25.68
-----------------------------------------
Total Return(D)................................ 0.07%(B) 2.51 %(B)
Net Assets End of Period (In Thousands)........ $ 3,257 $ 992
Ratio of Expenses to Average Net Assets........ 2.05%(A) 2.05 %(A)
Ratio of Expenses to Average Net Assets
(Excluding Waivers)........................... 2.66%(A) 4.59 %(A)
Ratio of Net Investment Income (Loss) to
Average Net Assets............................ (0.02)%(A) (0.34)%(A)
Ratio of Net Investment Income (Loss) to
Average Net Assets (Excluding Waivers)........ (0.63)%(A) (2.87)%(A)
Portfolio Turnover............................. 1.46%(A) 15.69 %(A)
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
OCTOBER 1 FOR THE PERIOD
YEAR ENDED THROUGH JULY 17 THROUGH
GROWTH AND INCOME FUND (CLASS C) DECEMBER 31, 1998 DECEMBER 31, 1997 SEPTEMBER 30, 1997
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period........... $ 25.68 $ 25.05
Net Investment Income (Loss)................... (0.02) (0.01)
Net Realized and Unrealized Gains (Losses) on
Investments................................... 0.05 0.64
-----------------------------------------
Total from Investment Operations............... 0.03 0.63
-----------------------------------------
Dividends from Net Investment Income........... 0.10 0.00
Distributions from Net Realized Capital
Gains......................................... 0.46 0.00
-----------------------------------------
Total Distributions............................ 0.56 0.00
-----------------------------------------
Net Asset Value, End of Period................. $ 25.15 $ 25.68
-----------------------------------------
Total Return(D)................................ 0.10%(B) 2.51 %(B)
Net Assets End of Period (In Thousands)........ $ 561 $ 99
Ratio of Expenses to Average Net Assets........ 2.05%(A) 2.05 %(A)
Ratio of Expenses to Average Net Assets
(Excluding Waivers)........................... 2.64%(A) 4.60 %(A)
Ratio of Net Investment Income (Loss) to
Average Net Assets............................ 0.03%(A) (0.39)%(A)
Ratio of Net Investment Income (Loss) to
Average Net Assets (Excluding Waivers)........ (0.56)%(A) (2.94)%(A)
Portfolio Turnover............................. 1.46%(A) 15.69 %(A)
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
<PAGE> 86
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED MAY 1 THROUGH
EQUITY FUND (CLASS A) DECEMBER 31, 1998 DECEMBER 31, 1997
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period........................ $ 5.00
Net Investment Income (Loss)................................ 0.01
Net Realized and Unrealized Gain (Loss) on Investments...... 1.05
------------------
Total from Investment Operations............................ 1.06
------------------
Dividends from Net Investment Income........................ 0.00
Distributions from Net Realized Capital Gains............... 0.10
------------------
Total Distributions......................................... 0.10
------------------
Net Asset Value, End of Period.............................. $ 5.96
------------------
Total Return(C)............................................. 21.30%(B)
Net Assets End of Period (In Thousands)..................... $ 3,196
Ratio of Expenses to Average Net Assets..................... 1.60%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)...................................................
Ratio of Net Investment Income (Loss) to Average Net
Assets..................................................... 0.26%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................ (4.66)%(A)
Portfolio Turnover.......................................... 68.73%(A)
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED MAY 1 THROUGH
EQUITY FUND (CLASS B) DECEMBER 31, 1998 DECEMBER 31, 1997
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period........................ $ 5.00
Net Investment Income (Loss)................................ 0.00
Net Realized and Unrealized Gains (Losses) on Investments... 1.04
-------------------
Total from Investment Operations............................ 1.04
-------------------
Dividends from Net Investment Income........................ 0.00
Distributions from Net Realized Capital Gains............... 0.10
-------------------
Total Distributions......................................... 0.10
-------------------
Net Asset Value, End of Period.............................. $ 5.94
-------------------
Total Return(D)............................................. 20.80%(B)
Net Assets End of Period (In Thousands)..................... $ 1,820
Ratio of Expenses to Average Net Assets..................... 2.15%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................... 6.21%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets..................................................... (0.23)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................ (4.29)%(A)
Portfolio Turnover.......................................... 68.73%(A)
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED MAY 1 THROUGH
EQUITY FUND (CLASS C) DECEMBER 31, 1998 DECEMBER 31, 1997
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period........................ $ 5.00
Net Investment Income (Loss)................................ 0.00
Net Realized and Unrealized Gains (Losses) on Investments... 1.04
------------------
Total from Investment Operations............................ 1.04
------------------
Dividends from Net Investment Income........................ 0.00
Distributions from Net Realized Capital Gains............... 0.10
------------------
Total Distributions......................................... 0.10
------------------
Net Asset Value, End of Period.............................. $ 5.94
------------------
Total Return(D)............................................. 20.89%(B)
Net Assets End of Period (In Thousands)..................... $ 283
Ratio of Expenses to Average Net Assets..................... 2.15%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................... 6.01%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets..................................................... (0.21)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................ (4.07)%(A)
Portfolio Turnover.......................................... 68.73%(A)
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
<PAGE> 87
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
YEAR ENDED ---------------------------------------------------------
EQUITY INCOME FUND (CLASS A) DECEMBER 31, 1998 1997 1996 1995 1994 1993 1992
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............... $ 22.44 $ 20.73 $ 16.43 $ 17.75 $ 16.93 $ 16.00
Net Investment Income (Loss)....................... 0.17 0.41 0.45 0.44 0.52 0.43
Net Realized and Unrealized Gain (Loss) on
Investments....................................... 5.95 3.27 5.00 (0.53) 1.74 0.92
-----------------------------------------------------------------------------
Total from Investment Operations................... 6.12 3.68 5.45 (0.09) 2.26 1.35
-----------------------------------------------------------------------------
Dividends from Net Investment Income............... 0.15 0.40 0.45 0.44 0.50 0.41
Distributions from Net Realized Capital Gains...... 1.99 1.57 0.70 0.79 0.94 0.01
-----------------------------------------------------------------------------
Total Distributions................................ 2.14 1.97 1.15 1.23 1.44 0.42
-----------------------------------------------------------------------------
Net Asset Value, End of Period..................... $ 26.42 $ 22.44 $ 20.73 $ 16.43 $ 17.75 $ 16.93
-----------------------------------------------------------------------------
Total Return(C).................................... 28.08% 17.86% 33.38% (0.49)% 13.45% 8.48%
Net Assets End of Period (In Thousands)............ $97,932 $72,647 $61,906 $50,926 $49,920 $40,918
Ratio of Expenses to Average Net Assets............ 1.50% 1.50% 1.50% 1.50% 1.50% 1.50%
Ratio of Expenses to Average Net Assets (Excluding
Waivers).......................................... 1.62% 1.68% 1.78% 1.73% 1.91% 1.95%
Ratio of Net Investment Income (Loss) to Average
Net Assets........................................ 1.35% 1.87% 2.33% 2.50% 2.90% 2.80%
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers).................... 1.23% 1.69% 2.06% 2.30% 2.51% 2.22%
Portfolio Turnover................................. 32.89% 33.22% 25.60% 41.40% 39.90% 38.30%
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------
EQUITY INCOME FUND (CLASS A) 1991 1990 1989 1988
- --------------------------------------------------- --------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............... $ 13.40 $ 15.26 $ 13.40 $ 12.16
Net Investment Income (Loss)....................... 0.52 0.61 0.37 0.29
Net Realized and Unrealized Gain (Loss) on
Investments....................................... 2.61 (1.84) 1.97 1.37
--------------------------------------
Total from Investment Operations................... 3.13 (1.23) 2.34 1.66
--------------------------------------
Dividends from Net Investment Income............... 0.53 0.63 0.38 0.26
Distributions from Net Realized Capital Gains...... 0.00 0.00 0.10 0.16
--------------------------------------
Total Distributions................................ 0.53 0.63 0.48 0.42
--------------------------------------
Net Asset Value, End of Period..................... $ 16.00 $ 13.40 $ 15.26 $ 13.40
--------------------------------------
Total Return(C).................................... 23.55% (8.20)% 17.55% 13.64%
Net Assets End of Period (In Thousands)............ $33,605 $29,330 $33,402 $10,199
Ratio of Expenses to Average Net Assets............ 1.50% 1.50% 2.50% 2.50%
Ratio of Expenses to Average Net Assets (Excluding
Waivers).......................................... 2.02% 2.01% 2.80% 3.80%
Ratio of Net Investment Income (Loss) to Average
Net Assets........................................ 3.50% 4.20% 3.30% 3.60%
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers).................... 2.84% 3.73% 3.04% 2.28%
Portfolio Turnover................................. 25.90% 20.80% 9.50% 9.70%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, FOR THE PERIOD
YEAR ENDED ------------------ MAY 1 THROUGH
EQUITY INCOME FUND (CLASS B) DECEMBER 31, 1998 1997 1996 DECEMBER 31, 1995
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $ 22.30 $ 20.67 $ 18.12
Net Investment Income (Loss)................................ 0.12 0.24 0.29
Net Realized and Unrealized Gain (Loss) on Investments...... 5.83 3.30 3.40
----------------------------------------------------------
Total from Investment Operations............................ 5.95 3.54 3.69
----------------------------------------------------------
Dividends from Net Investment Income........................ 0.09 0.34 0.44
Distributions from Capital Gains............................ 1.99 1.57 0.70
----------------------------------------------------------
Total Distributions......................................... 2.08 1.91 1.14
----------------------------------------------------------
Net Asset Value, End of Period.............................. $ 26.17 $ 22.30 $ 20.67
----------------------------------------------------------
Total Return(D)............................................. 27.35% 17.22% 20.57%(B)
Net Assets End of Period (In Thousands)..................... $19,055 $ 5,615 $ 1,086
Ratio of Expenses to Average Net Assets..................... 2.05% 2.05% 2.05%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................... 2.17% 2.23% 2.23%(A)
Ratio of Net Investment Income to Average Net Assets........ 0.77% 1.32% 1.56%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................ 0.65% 1.14% 1.33%(A)
Portfolio Turnover Rate..................................... 32.89% 33.22% 25.60%(A)
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED MAY 1 THROUGH
EQUITY INCOME FUND (CLASS C) DECEMBER 31, 1998 DECEMBER 31, 1997
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value Beginning of Period......................... $ 24.26
Net Investment Income (Loss)................................ 0.04
Net Realized and Unrealized Gains (Losses) on Investments... 4.14
------------------------------------
Total from Investment Operations............................ 4.18
------------------------------------
Dividends from Net Investment Income........................ 0.14
Distributions from Net Realized Capital Gains............... 1.99
------------------------------------
Total Distributions......................................... 2.13
------------------------------------
Net Asset Value, End of Period.............................. $ 26.31
------------------------------------
Total Return(D)............................................. 18.21%(B)
Net Assets End of Period (In Thousands)..................... $ 1,857
Ratio of Expense in Average Net Assets...................... 2.05%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................... 2.20%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets..................................................... 0.69%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................ 0.54%(A)
Portfolio Turnover.......................................... 32.89%(A)
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
<PAGE> 88
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
CAPITAL APPRECIATION FUND YEAR ENDED -------------------------------------------------------------------
(CLASS A) DECEMBER 31, 1998 1997 1996 1995 1994 1993 1992(F)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period........................... $ $ 34.21 $ 32.54 $ 28.54 $ 31.10 $ 29.42 $ 27.80
Net Investment Income (Loss)...... (0.37) (0.31) (0.25) (0.13) (0.15) (0.04)
Net Realized and Unrealized Gain
(Loss) on Investments............ 7.31 5.69 7.59 (0.95) 1.83 1.66
----------------------------------------------------------------------------------
Total from Investment
Operations....................... 6.94 5.38 7.34 (1.08) 1.68 1.62
----------------------------------------------------------------------------------
Dividends from Net Investment
Income........................... 0.00 0.00 0.00 0.00 0.00 0.00
Distributions from Net Realized
Capital Gains.................... 5.61 3.71 3.34 1.48 0.00 0.00
----------------------------------------------------------------------------------
Total Distributions............... 5.61 3.71 3.34 1.48 0.00 0.00
----------------------------------------------------------------------------------
Net Asset Value, End of Period.... $ $ 35.54 $ 34.21 $ 32.54 $ 28.54 $ 31.10 $ 29.42
----------------------------------------------------------------------------------
Total Return(C)................... 20.27% 16.52% 25.72% (3.46)% 5.71% 5.83%
Net Assets End of Period (In
Thousands)....................... $ $112,738 $115,253 $121,207 101,237 103,187 72,569
Ratio of Expenses to Average Net
Assets........................... 1.65% 1.60%(E) 1.65% 1.66% 1.64% 1.72%
Ratio of Expenses to Average Net
Assets (Excluding Waivers)....... 1.65% 1.60%(E) 1.65% 1.66% 1.64% 1.72%
Ratio of Net Investment Income
(Loss) to Average Net Assets..... (1.06)% (0.87)% (0.82)% (0.50)% (0.60)% (0.20)%
Ratio of Net Investment Income
(Loss) to Average Net Assets
(Excluding Waivers).............. (1.06)% (0.87)% (0.82)% (0.50)% (0.60)% (0.20)%
Portfolio Turnover................ 60.73% 66.42% 65.20% 74.40% 61.90% 32.50%
<CAPTION>
YEAR ENDED DECEMBER 31,
CAPITAL APPRECIATION FUND --------------------------------------
(CLASS A) 1991 1990 1989 1988
- ---------------------------------- --------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period........................... $ 17.48 $ 16.94 $13.01 $12.28
Net Investment Income (Loss)...... (0.01) 0.11 (0.03) (0.03)
Net Realized and Unrealized Gain
(Loss) on Investments............ 10.33 0.54 4.49 0.76
---------------------------------------
Total from Investment
Operations....................... 10.32 0.65 4.46 0.73
---------------------------------------
Dividends from Net Investment
Income........................... 0.00 0.11 0.00 0.00
Distributions from Net Realized
Capital Gains.................... 0.00 0.00 0.53 0.00
---------------------------------------
Total Distributions............... 0.00 0.11 0.53 0.00
---------------------------------------
Net Asset Value, End of Period.... $ 27.80 $ 17.48 $16.94 $13.01
---------------------------------------
Total Return(C)................... 59.04% 3.84% 34.27% 5.94%
Net Assets End of Period (In
Thousands)....................... 33,375 12,552 9,091 2,825
Ratio of Expenses to Average Net
Assets........................... 1.75% 1.75% 2.50% 2.50%
Ratio of Expenses to Average Net
Assets (Excluding Waivers)....... 2.04% 2.27% 3.90% 6.00%
Ratio of Net Investment Income
(Loss) to Average Net Assets..... (0.10)% 0.70% (0.50)% (0.30)%
Ratio of Net Investment Income
(Loss) to Average Net Assets
(Excluding Waivers).............. (0.44)% 0.12% (1.92)% (3.77)%
Portfolio Turnover................ 40.20% 60.50% 65.80% 49.30%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED FOR THE PERIOD
YEAR ENDED DECEMBER 31, MAY 1 THROUGH
CAPITAL APPRECIATION FUND (CLASS B) DECEMBER 31, 1998 1997 1996 DECEMBER 31, 1995
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $ $ 33.86 $ 32.42 $30.04
Net Investment Income (Loss)................................ (0.45) (0.35) (0.12)
Net Realized and Unrealized Gain (Loss) on Investments...... 7.09 5.50 5.84
------------------------------------------------------
Total from Investment Operations............................ 6.64 5.15 5.72
------------------------------------------------------
Dividends from Net Investment Income........................ 0.00 0.00 0.00
Distributions from Capital Gains............................ 5.61 3.71 3.34
------------------------------------------------------
Total Distributions......................................... 5.61 3.71 3.34
------------------------------------------------------
Net Asset Value, End of Period.............................. $ $ 34.89 $ 33.86 $32.42
------------------------------------------------------
Total Return(D)............................................. 19.60% 15.87% 18.99%(B)
Net Assets End of Period (In Thousands)..................... $ $ 7,862 $ 5,047 $1,953
Ratio of Expenses to Average Net Assets..................... 2.21% 2.14%(E) 2.08%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................... 2.21% 2.14%(E) 2.08%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets..................................................... (1.61)% (1.43)% (1.41)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................ (1.61)% (1.43)% (1.41)%(A)
Portfolio Turnover Rate..................................... 60.73% 66.42% 65.20%(A)
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED MAY 1 THROUGH
CAPITAL APPRECIATION FUND (CLASS C) DECEMBER 31, 1998 DECEMBER 31, 1997
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period........................ $ $ 33.54
Net Investment Income (Loss) (0.19)
Net Realized and Unrealized Gains (Losses) on Investments... 7.69
--------------------------------
Total from Investment Operations............................ 7.50
--------------------------------
Dividends from Net Investment Income........................ 0.00
Distributions from Net Realized Capital Gains 5.61
--------------------------------
Total Distributions......................................... 5.61
--------------------------------
Net Asset Value, End of Period.............................. $ $ 35.43
--------------------------------
Total Return(D)............................................. 22.35%(B)
Net Assets End of Period (In Thousands)..................... $ $ 126
Ratio of Expenses to Average Net Assets..................... 2.21%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................... 2.21%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets..................................................... (1.88)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................ (1.88)%(A)
Portfolio Turnover.......................................... 60.73%(A)
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
<PAGE> 89
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
FOR THE PERIOD
OCTOBER 1 FOR THE PERIOD
YEAR ENDED THROUGH JULY 17 THROUGH
SMALL COMPANY GROWTH FUND (CLASS A) DECEMBER 31, 1998 DECEMBER 31, 1997 SEPTEMBER 30, 1997
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $ $ 26.61 $ 24.54
Net Investment Income (Loss)................................ 0.40 (0.05)
Net Realized and Unrealized Gain (Loss) on Investments...... (2.27) 2.12
-----------------------------------------------------
Total from Investment Operations............................ (2.67) 2.07
-----------------------------------------------------
Dividends from Net Investment Income........................ 0.00 0.00
Distributions from Net Realized Capital Gains............... 0.55 0.00
-----------------------------------------------------
Total Distributions......................................... 0.55 0.00
-----------------------------------------------------
Net Asset Value, End of Period.............................. $ $ 23.39 $ 26.61
-----------------------------------------------------
Total Return(C)............................................. (10.04)%(B) 8.44%(B)
Net Assets End of Period (In Thousands)..................... $ $ 4,861 $ 2,102
Ratio of Expenses to Average Net Assets..................... 1.85%(A) 1.85%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................... 2.38%(A) 4.48%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets..................................................... (1.56)%(A) (1.61)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................ (2.09)%(A) (4.25)%(A)
Portfolio Turnover.......................................... 23.68%(A) 157.51%(A)
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
OCTOBER 1 FOR THE PERIOD
YEAR ENDED THROUGH JULY 17 THROUGH
SMALL COMPANY GROWTH FUND (CLASS B) DECEMBER 31, 1998 DECEMBER 31, 1997 SEPTEMBER 30, 1997
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $ $ 26.58 $ 24.54
Net Investment Income (Loss)................................ 0.47 (0.05)
Net Realized and Unrealized Gains (Losses) on Investments... (2.23) 2.09
-----------------------------------------------------
Total from Investment Operations............................ (2.70) 2.04
-----------------------------------------------------
Dividends from Net Investment Income........................ 0.00 0.00
Distributions from Net Realized Capital Gains............... 0.55 0.00
-----------------------------------------------------
Total Distributions......................................... 0.55 0.00
-----------------------------------------------------
Net Asset Value, End of Period.............................. $ $ 23.33 $ 26.58
-----------------------------------------------------
Total Return(D)............................................. (10.16)%(B) 8.31%(B)
Net Assets End of Period (In Thousands)..................... $ $ 2,842 $ 1,099
Ratio of Expenses to Average Net Assets..................... 2.40%(A) 2.40%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................... 2.93%(A) 5.52%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets..................................................... (2.11)%(A) (2.18)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................ (2.64)%(A) (5.29)%(A)
Portfolio Turnover.......................................... 23.68%(A) 157.51%(A)
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
OCTOBER 1 FOR THE PERIOD
YEAR ENDED THROUGH JULY 17 THROUGH
SMALL COMPANY GROWTH FUND (CLASS C) DECEMBER 31, 1998 DECEMBER 31, 1997 SEPTEMBER 30, 1997
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $ $ 26.57 $ 24.54
Net Investment Income (Loss)................................ 0.62 (0.07)
Net Realized and Unrealized Gains (Losses) on Investments... (2.08) 2.10
-----------------------------------------------------
Total from Investment Operations............................ (2.70) 2.03
-----------------------------------------------------
Dividends from Net Investment Income........................ 0.00 0.00
Distributions from Net Realized Capital Gains............... 0.55 0.00
-----------------------------------------------------
Total Distributions......................................... 0.55 0.00
-----------------------------------------------------
Net Asset Value, End of Period.............................. $ $ 23.32 $ 26.57
-----------------------------------------------------
Total Return(D)............................................. (10.16)%(B) 8.27%(B)
Net Assets End of Period (In Thousands)..................... $ $ 795 $ 201
Ratio of Expenses to Average Net Assets..................... 2.40%(A) 2.40%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................... 2.93%(A) 5.91%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets..................................................... (2.11)%(A) (2.15)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................ (2.64)%(A) (5.65)%(A)
Portfolio Turnover.......................................... 23.68%(A) 157.51%(A)
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
<PAGE> 90
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED
YEAR ENDED DECEMBER 31, FOR THE PERIOD
DECEMBER 31, ---------------------------------------- OCTOBER 1 THROUGH
SMALL COMPANY VALUE FUND (CLASS A) 1998 1997 1996 1995 1994 DECEMBER 31, 1993
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period........................ $ 5.74 $ 5.43 $ 5.17 $ 5.29 $ 5.00
Net Investment Income (Loss)... 0.01 (0.01) 0.02 0.03 0.01
Net Realized and Unrealized Gain
(Loss) on Investments......... 2.53 0.62 0.46 (0.01) 0.29
----------------------------------------------------------------------
Total from Investment
Operations.................... 2.54 0.61 0.48 0.02 0.30
----------------------------------------------------------------------
Dividends from Net Investment
Income........................ 0.00 0.00 0.02 0.03 0.01
Distributions from Net Realized
Capital Gains (Loss).......... 0.53 0.30 0.20 0.11 0.00
----------------------------------------------------------------------
Total Distributions............ 0.53 0.30 0.22 0.14 0.01
----------------------------------------------------------------------
Net Asset Value, End of Period... $ 7.75 $ 5.74 $ 5.43 $ 5.17 $ 5.29
----------------------------------------------------------------------
Total Return(C)................ 44.24% 11.28% 9.28% 0.34% 5.92%(B)
Net Assets End of Period (In
Thousands).................... $45,310 $17,308 $19,720 $22,120 $8,118
Ratio of Expenses to Average Net
Assets........................ 1.75% 1.75% 1.75% 1.75% 1.75%(A)
Ratio of Expenses to Average Net
Assets (Excluding Waivers).... 1.95% 2.38% 2.21% 2.15% 4.00%(A)
Ratio of Net Investment Income
(Loss) to Average Net Assets... 0.05% (0.13)% 0.32% 0.60% 0.10%(A)
Ratio of Net Investment Income
(Loss) to Average Net Assets
(Excluding Waivers)........... (0.15)% (0.76)% (0.14)% 0.18% (1.54)%(A)
Portfolio Turnover............. 62.51% 143.58% 36.50% 16.70% 0%(A)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED
YEAR ENDED DECEMBER 31, FOR THE PERIOD
DECEMBER 31, ------------------ MAY 1 THROUGH
SMALL COMPANY VALUE FUND (CLASS B) 1998 1997 1996 DECEMBER 31, 1995
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period.............................. $ 5.69 $ 5.41 $ 5.28
Net Investment Income (Loss)......... 0.00 (0.03) (0.01)
Net Realized and Unrealized Gain
(Loss) on Investments............... 2.47 0.61 0.36
----------------------------------------------------
Total from Investment Operations..... 2.47 0.58 0.35
----------------------------------------------------
Dividends from Net Investment
Income.............................. 0.00 0.00 0.02
Distributions from Capital Gains..... 0.53 0.30 0.20
----------------------------------------------------
Total Distributions.................. 0.53 0.30 0.22
----------------------------------------------------
Net Asset Value, End of Period....... $ 7.63 $ 5.69 $ 5.41
----------------------------------------------------
Total Return(D)...................... 43.40% 10.77% 6.87%(B)
Net Assets End of Period (In
Thousands).......................... $22,013 $ 2,606 $ 862
Ratio of Expenses to Average Net
Assets.............................. 2.30% 2.30% 2.30%(A)
Ratio of Expenses to Average Net
Assets (Excluding Waivers).......... 2.44% 2.92% 2.78%(A)
Ratio of Net Investment Income to
Average Net Assets.................. (0.67)% (0.77)% (0.40)%(A)
Ratio of Net Investment Income (Loss)
to Average Net Assets (Excluding
Waivers)............................ (0.81)% (1.39)% (0.90)%(A)
Portfolio Turnover Rate.............. 62.51% 143.58% 36.50%(A)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED FOR THE PERIOD
DECEMBER 31, MAY 1 THROUGH
SMALL COMPANY VALUE FUND (CLASS C) 1998 DECEMBER 31, 1997
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period........................ $ 6.14
Net Investment Income (Loss)................................ (0.02)
Net Realized and Unrealized Gains(Losses) on Investments.... 2.15
-------------------------
Total from Investment Operations............................ 2.13
-------------------------
Dividends from Net Investment Income........................ 0.00
Distributions from Net Realized Capital Gains............... 0.53
-------------------------
Total Distributions......................................... 0.53
-------------------------
Net Asset Value, End of Period.............................. $ 7.74
-------------------------
Total Return(D)............................................. 34.68%(B)
Net Assets End of Period (In Thousands)..................... $ 2,684
Ratio of Expenses to Average Net Assets..................... 2.30%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................... 2.38%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets..................................................... (0.88)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................ (0.95)%(A)
Portfolio Turnover.......................................... 62.51%(A)
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
<PAGE> 91
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
INTERNATIONAL GROWTH FUND YEAR ENDED -------------------------------------------------------------------------
(CLASS A) DECEMBER 31, 1998 1997 1996 1995 1994 1993 1992(F) 1991
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period......................... $ 17.10 $ 16.08 $ 14.70 $ 17.44 $ 13.23 $ 13.38 $ 11.95
Net Investment Income (Loss).... 0.08 0.10 0.11 (0.01) (0.02) 0.28 0.28
Net Realized and Unrealized Gain
(Loss) on Investments.......... 0.73 1.88 2.12 (0.49) 4.79 (0.39) 1.25
----------------------------------------------------------------------------------------
Total from Investment
Operations..................... 0.81 1.98 2.23 (0.50) 4.77 (0.11) 1.53
----------------------------------------------------------------------------------------
Dividends from Net Investment
Income......................... 0.07 0.09 0.09 0.00 0.00 0.04 0.10
Distributions from Capital Gains
(Loss)......................... 1.13 0.87 0.76 2.24 0.17 0.00 0.00
Other........................... 0.00 0.00 0.00 0.00 0.39 0.00 0.00
----------------------------------------------------------------------------------------
Total Distributions............. 1.20 0.96 0.85 2.24 0.56 0.04 0.10
----------------------------------------------------------------------------------------
Net Asset Value, End of
Period......................... $ 16.71 $ 17.10 $ 16.08 $ 14.70 $ 17.44 $ 13.23 $ 13.38
----------------------------------------------------------------------------------------
Total Return(C)................. 4.75% 12.32% 15.17% (2.82)% 36.05% (0.93)% 12.91%
Net Assets End of Period (In
Thousands)..................... $38,020 $34,837 $28,628 $27,523 $22,900 $11,630 $10,736
Ratio of Expenses to Average Net
Assets......................... 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%
Ratio of Expenses to Average Net
Assets (Excluding Waivers)..... 2.11% 2.19% 2.40% 2.51% 3.06% 3.70% 3.59%
Ratio of Net Investment Income
(Loss) to Average Net Assets... 0.50% 0.61% 0.70% (0.20)% (0.10)% 0.50% 0.60%
Ratio of Net Investment Income
(Loss) to Average Net
Assets(Excluding Waivers)...... 0.39% 0.42% 0.30% (0.70)% (1.15)% (1.15)% (0.93)%
Portfolio Turnover Rate......... 27.08% 23.79% 31.10% 116.10% 70.10% 134.90% 64.50%
<CAPTION>
YEAR ENDED DECEMBER 31,
INTERNATIONAL GROWTH FUND -----------------------------
(CLASS A) 1990 1989 1988
- -------------------------------- -----------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period......................... $ 14.53 $ 12.91 $ 12.00
Net Investment Income (Loss).... 0.04 0.06 0.00
Net Realized and Unrealized Gain
(Loss) on Investments.......... (2.27) 2.21 0.91
-----------------------------
Total from Investment
Operations..................... (2.23) 2.27 0.91
-----------------------------
Dividends from Net Investment
Income......................... 0.04 0.00 0.00
Distributions from Capital Gains
(Loss)......................... 0.31 0.65 0.00
Other........................... 0.00 0.00 0.00
-----------------------------
Total Distributions............. 0.35 0.65 0.00
-----------------------------
Net Asset Value, End of
Period......................... $ 11.95 $ 14.53 $ 12.91
-----------------------------
Total Return(C)................. (15.37)% 17.17% 7.58%
Net Assets End of Period (In
Thousands)..................... $ 9,278 $ 8,514 $ 4,246
Ratio of Expenses to Average Net
Assets......................... 2.00% 2.50% 2.50%
Ratio of Expenses to Average Net
Assets (Excluding Waivers)..... 3.85% 5.50% 8.50%
Ratio of Net Investment Income
(Loss) to Average Net Assets... 0.70% 0.60% 0.00%
Ratio of Net Investment Income
(Loss) to Average Net
Assets(Excluding Waivers)...... (1.22)% (2.41)% (6.09)%
Portfolio Turnover Rate......... 84.70% 68.20% 67.10%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, FOR THE PERIOD
YEAR ENDED ------------------ MAY 1 THROUGH
INTERNATIONAL GROWTH FUND (CLASS B) DECEMBER 31, 1998 1997 1996 DECEMBER 31, 1995
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.................... $ 16.97 $ 16.02 $14.82
Net Investment Income (Loss)............................ 0.01 0.01 (0.02)
Net Realized and Unrealized Gain (Loss) on
Investments............................................ 0.69 1.87 2.08
------------------------------------------------------
Total from Investment Operations........................ 0.70 1.88 2.06
------------------------------------------------------
Dividends from Net Investment Income.................... 0.01 0.06 0.10
Distributions from Capital Gains........................ 1.13 0.87 0.76
------------------------------------------------------
Total Distributions..................................... 1.14 0.93 0.86
------------------------------------------------------
Net Assets Value, End of Period......................... $ 16.53 $ 16.97 $16.02
------------------------------------------------------
Total Return(C)......................................... 4.17% 11.72% 13.88%(B)
Net Assets End of Period (In Thousands)................. $ 9,878 $ 4,276 $1,094
Ratio of Expenses to Average Net Assets................. 2.55% 2.55% 2.55%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)............................................... 2.67% 2.75% 2.73%(A)
Ratio of Net Investment Income to Average Net Assets.... (0.06)% 0.09% (0.65)%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets (Excluding Waivers)............................. (0.18)% (0.11)% (0.85)%(A)
Portfolio Turnover Rate................................. 27.08% 23.79% 31.10%(A)
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE PERIOD
SIX MONTHS MAY 1 THROUGH
ENDED DECEMBER 31,
INTERNATIONAL GROWTH FUND (CLASS C) JUNE 30, 1998 1997
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period................. $ 17.51
Net Investment Income (Loss)......................... (0.03)
Net Realized and Unrealized Gains (Losses) on
Investments......................................... 0.39
--------------------------------
Total from Investment Operations..................... 0.36
--------------------------------
Dividends from Net Investment Income................. 0.08
Distributions from Net Realized Capital Gains........ 1.13
--------------------------------
Total Distributions.................................. 1.21
--------------------------------
Net Asset Value, End of Period....................... $ 16.66
--------------------------------
Total Return(D)...................................... 2.07%(B)
Net Assets End of Period (In Thousands).............. $ 1,113
Ratio of Expenses to Average Net Assets.............. 2.55%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)............................................ 2.75%(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).......................... (0.71)%(A)
Portfolio Turnover................................... 27.08%(A)
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
14
<PAGE> 92
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED DECEMBER 31,
DECEMBER 31, ----------------------------------------------------------
GOVERNMENT SECURITIES FUND (CLASS A) 1998 1997 1996 1995 1994 1993 1992(F)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period......... $ $ 11.80 $ 11.83 $ 10.62 $ 12.44 $ 12.47 $ 12.40
Net Investment Income (Loss)................. 0.73 0.74 0.76 0.87 0.92 0.99
Net Realized and Unrealized Gain (Loss) on
Investments................................. 0.23 (0.03) 1.21 (1.82) 0.21 0.19
-------------------------------------------------------------------------
Total from Investment Operations............. 0.96 0.71 1.97 (0.95) 1.13 1.18
-------------------------------------------------------------------------
Dividends from Net Investment Income......... 0.73 0.74 0.76 0.87 0.92 0.98
Distributions from Net Realized Capital Gains
(Loss)...................................... 0.00 0.00 0.00 0.00 0.24 0.13
-------------------------------------------------------------------------
Total Distributions.......................... 0.73 0.74 0.76 0.87 1.16 1.11
-------------------------------------------------------------------------
Net Asset Value, End of Period............... $ $ 12.03 $ 11.80 $ 11.83 $ 10.62 $ 12.44 $ 12.47
-------------------------------------------------------------------------
Total Return(C).............................. 8.39% 6.29% 19.00% (7.81)% 9.26% 9.93%
Net Assets End of Period (In Thousands)...... $ $68,639 $73,693 $86,224 $84,431 $106,541 $71,515
Ratio of Expenses to Average Net Assets...... 1.30% 1.30% 1.30% 1.30% 1.30% 1.30%
Ratio of Expenses to Average Net Assets
(Excluding Waivers)......................... 1.46% 1.42% 1.44% 1.35% 1.44% 1.54%
Ratio of Net Investment Income (Loss) to
Average Net Assets.......................... 6.16% 6.35% 6.66% 7.60% 7.20% 7.90%
Ratio of Net Investment Income (Loss) to
Average Net Assets (Excluding Waivers)...... 6.00% 6.23% 6.52% 7.59% 7.03% 7.72%
Portfolio Turnover........................... 9.61% 0.17% 0.00% 27.20% 90.10% 108.40%
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
GOVERNMENT SECURITIES FUND (CLASS A) 1991 1990 1989 1988
- --------------------------------------------- ------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period......... $ 11.96 $ 11.92 $ 11.70 $11.96
Net Investment Income (Loss)................. 1.00 1.01 0.90 0.79
Net Realized and Unrealized Gain (Loss) on
Investments................................. 0.44 0.05 0.23 (0.26)
------------------------------------
Total from Investment Operations............. 1.44 1.06 1.13 0.53
------------------------------------
Dividends from Net Investment Income......... 1.00 1.02 0.91 0.79
Distributions from Net Realized Capital Gains
(Loss)...................................... 0.00 0.00 0.00 0.00
------------------------------------
Total Distributions.......................... 1.00 1.02 0.91 0.79
------------------------------------
Net Asset Value, End of Period............... $ 12.40 $ 11.96 $ 11.92 $11.70
------------------------------------
Total Return(C).............................. 12.58% 9.41% 10.01% 4.53%
Net Assets End of Period (In Thousands)...... $46,480 $31,535 $29,897 $3,826
Ratio of Expenses to Average Net Assets...... 0.90% 1.00% 2.10% 2.10%
Ratio of Expenses to Average Net Assets
(Excluding Waivers)......................... 1.65% 1.60% 2.70% 4.50%
Ratio of Net Investment Income (Loss) to
Average Net Assets.......................... 8.20% 8.60% 8.00% 7.00%
Ratio of Net Investment Income (Loss) to
Average Net Assets (Excluding Waivers)...... 7.39% 7.77% 7.31% 4.52%
Portfolio Turnover........................... 58.60% 70.00% 85.40% 14.30%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED
YEAR ENDED DECEMBER 31, FOR THE PERIOD
DECEMBER 31, ----------------- MAY 1 THROUGH
GOVERNMENT SECURITIES FUND (CLASS B) 1998 1997 1996 DECEMBER 31, 1995
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period.............................. $ $ 11.79 $11.83 $11.12
Net Investment Income (Loss)......... 0.66 0.68 0.44
Net Realized and Unrealized Gain
(Loss) on Investments............... 0.23 (0.04) 0.71
------------------------------------------------------
Total from Investment Operations..... 0.89 0.64 1.15
------------------------------------------------------
Dividends from Net Investment
Income.............................. 0.66 0.68 0.44
Distributions from Capital Gains..... 0.00 0.00 0.00
------------------------------------------------------
Total Distributions.................. 0.66 0.68 0.44
------------------------------------------------------
Net Asset Value, End of Period....... $ $ 12.02 $11.79 $11.83
------------------------------------------------------
Total Return(D)...................... 7.81% 5.61% 10.47%(B)
Net Assets End of Period (in
thousands).......................... $ $12,285 $5,683 $2,124
Ratio of Expenses to Average Net
Assets.............................. 1.85% 1.85% 1.85%(A)
Ratio of Expenses to Average Net
Assets (Excluding Waivers).......... 2.01% 1.96% 1.91%(A)
Ratio of Net Investment Income to
Average Net Assets.................. 5.55% 5.79% 5.64%(A)
Ratio of Net Investment Income (Loss)
to Average Net Assets (Excluding
Waivers)............................ 5.39% 5.68% 5.58%(A)
Portfolio Turnover Rate.............. 9.61% 0.17% 0.00%(A)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED FOR THE PERIOD
DECEMBER 31, MAY 1 THROUGH
GOVERNMENT SECURITIES FUND (CLASS C) 1998 DECEMBER 31, 1997
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period................. $ $11.63
Net Investment Income (Loss)......................... 0.46
Net Realized and Unrealized Gains (Losses) on
Investments......................................... 0.40
--------------------------------
Total from Investment Operations..................... 0.86
--------------------------------
Dividends from Net Investment Income................. 0.46
Distributions from Net Realized Capital Gains
(Loss).............................................. 0.00
--------------------------------
Total Distributions.................................. 0.46
--------------------------------
Net Asset Value, End of Period....................... $ $12.03
--------------------------------
Total Return(D)...................................... 7.49%(B)
Net Assets End of Period (In Thousands).............. $ $ 498
Ratio of Expenses to Average Net Assets.............. 1.85%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)............................................ 2.03%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets.............................................. 5.39%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets (Excluding Waivers).......................... 5.21%(A)
Portfolio Turnover................................... 9.61%(A)
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
<PAGE> 93
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED DECEMBER 31,
DECEMBER 31, ------------------------------------------------------------------------
HIGH-YIELD BOND FUND (CLASS A) 1998 1997 1996 1995 1994 1993 1992 1991
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period............................ $ 11.84 $ 11.39 $ 10.72 $ 11.70 $ 10.83 $ 10.19 $ 8.55
Net Investment Income (Loss)....... 0.99 0.94 0.99 0.97 0.95 1.01 1.13
Net Realized and Unrealized Gain
(Loss) on Investments............. 0.51 0.45 0.67 (0.97) 0.89 0.64 1.66
----------------------------------------------------------------------------------------
Total from Investment Operations... 1.50 1.39 1.66 0.00 1.84 1.65 2.79
----------------------------------------------------------------------------------------
Dividends from Net Investment
Income............................ 0.99 0.94 0.99 0.98 0.97 1.01 1.15
Distributions from Capital Gains... 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Other.............................. 0.00 0.00 0.00 0.00 0.00 0.00 0.00
----------------------------------------------------------------------------------------
Total Distributions................ $ 0.99 0.94 0.99 0.98 0.97 1.01 1.15
----------------------------------------------------------------------------------------
Net Asset Value, End of Period..... $ 12.35 $ 11.84 $ 11.39 $ 10.72 $ 11.70 $ 10.83 $ 10.19
----------------------------------------------------------------------------------------
Total Return(C).................... 13.18% 12.78% 16.00% 0.05% 17.58% 16.69% 33.02%
Net Assets End of Period (In
Thousands)........................ $66,422 $54,129 $52,182 $44,822 $44,361 $30,851 $24,672
Ratio of Expenses to Average Net
Assets............................ 1.30% 1.30% 1.30% 1.30% 1.30% 1.30% 1.30%
Ratio of Expenses to Average Net
Assets (Excluding Waivers)........ 1.47% 1.50% 1.52% 1.45% 1.59% 1.64% 1.85%
Ratio of Net Investment Income to
Average Net Assets................ 8.20% 8.21% 8.80% 8.60% 8.20% 9.40% 11.30%
Ratio of Net Investment Income
(Loss) to Average Net Assets
(Excluding Waivers)............... 8.03% 8.01% 8.58% 8.52% 7.95% 8.95% 10.51%
Portfolio Turnover Rate............ 175.38% 180.13% 88.50% 113.00% 121.20% 121.70% 109.30%
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
HIGH-YIELD BOND FUND (CLASS A) 1990 1989 1988
- ----------------------------------- -----------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period............................ $ 10.98 $ 12.37 $ 12.20
Net Investment Income (Loss)....... 1.26 1.33 1.24
Net Realized and Unrealized Gain
(Loss) on Investments............. (2.43) (1.37) 0.19
-----------------------------
Total from Investment Operations... (1.17) (0.04) 1.43
-----------------------------
Dividends from Net Investment
Income............................ 1.24 1.35 1.24
Distributions from Capital Gains... 0.00 0.00 0.02
Other.............................. 0.02(E) 0.00 0.00
-----------------------------
Total Distributions................ 1.26 1.35 1.26
-----------------------------
Net Asset Value, End of Period..... $ 8.55 $ 10.98 $ 12.37
-----------------------------
Total Return(C).................... (11.55)% (0.70)% 12.08%
Net Assets End of Period (In
Thousands)........................ $19,591 $29,144 $15,772
Ratio of Expenses to Average Net
Assets............................ 1.00% 2.10% 2.10%
Ratio of Expenses to Average Net
Assets (Excluding Waivers)........ 1.71% 2.50% 3.10%
Ratio of Net Investment Income to
Average Net Assets................ 12.30% 11.20% 11.10%
Ratio of Net Investment Income
(Loss) to Average Net Assets
(Excluding Waivers)............... 11.66% 10.76% 10.09%
Portfolio Turnover Rate............ 67.40% 61.60% 88.60%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED
YEAR ENDED DECEMBER 31, FOR THE PERIOD
DECEMBER 31, ---------------- MAY 1 THROUGH
HIGH-YIELD BOND FUND (CLASS B) 1998 1997 1996 DECEMBER 31, 1995
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $ 11.84 $11.39 $11.11
Net Investment Income (Loss)................................ 0.77 0.88 0.61
Net Realized and Unrealized Gain (Loss) on Investments...... 0.08 0.45 0.28
------------------------------------------------------
Total from Investment Operations............................ 1.28 1.33 0.89
------------------------------------------------------
Dividends from Net Investment Income........................ 0.77 0.88 0.61
Distributions from Capital Gains............................ 0.00 0.00 0.00
------------------------------------------------------
Total Distributions......................................... 0.77 0.88 0.61
------------------------------------------------------
Net Asset Value, End of Period.............................. $ 12.35 $11.84 $11.39
------------------------------------------------------
Total Return(D)............................................. 12.59% 12.16% 8.12%(B)
Net Assets End of Period (In Thousands)..................... $19,898 $7,892 $2,951
Ratio of Expenses to Average Net Assets..................... 1.85% 1.85% 1.85%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................... 2.02% 2.05% 2.09%(A)
Ratio of Net Investment Income to Average Net Assets........ 7.51% 7.74% 7.84%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................ 7.35% 7.55% 7.68%(A)
Portfolio Turnover Rate..................................... 175.38% 180.13% 88.50%(A)
</TABLE>
<TABLE>
<CAPTION>
(UNAUDITED) FOR THE PERIOD
SIX MONTHS ENDED MAY 1 THROUGH
HIGH-YIELD BOND FUND (CLASS C) JUNE 30, 1998 DECEMBER 31, 1997
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period........................ $ 12.35 $11.71
Net Investment Income (Loss)................................ 0.43 0.61
Net Realized and Unrealized Gains (Losses) on Investments... 0.08 0.64
--------------------------------
Total from Investment Operations............................ 1.25
--------------------------------
Dividends from Net Investment Income........................ 0.61
Distributions from Net Realized Capital Gains............... 0.00
--------------------------------
Total Distributions......................................... 0.61
--------------------------------
Net Asset Value, End of Period.............................. $12.35
--------------------------------
Total Return(D)............................................. 10.87%(B)
Net Assets End of Period (In Thousands)..................... $1,463
Ratio of Expenses to Average Net Assets..................... 1.85%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................... 2.01%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets..................................................... 6.84%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers) 6.68%(A)
Portfolio Turnover.......................................... 175.38%(A)
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
<PAGE> 94
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------------------
TAX-EXEMPT INCOME FUND (CLASS A) 1998 1997 1996 1995 1994 1993 1992 1991
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period............................ $ 13.83 $ 13.99 $ 12.80 $ 14.31 $ 13.60 $ 13.34 $ 12.78
Net Investment Income (Loss)....... 0.63 0.64 0.65 0.67 0.70 0.76 0.82
Net Realized and Unrealized Gain
(Loss) on Investments............. 0.31 (0.16) 1.21 (1.48) 0.73 0.26 0.56
------------------------------------------------------------------------------
Total from Investment Operations... 0.94 0.48 1.86 (0.81) 1.43 1.02 1.38
-----------------------------------------------------------------------------
Dividends from Net Investment
Income (Loss)..................... 0.63 0.64 0.65 0.68 0.70 0.76 0.82
Distributions from Net Realized
Capital Gains..................... 0.19 0.00 0.02 0.02 0.02 0.00 0.00
-----------------------------------------------------------------------------
Total Distributions................ 0.82 0.64 0.67 0.70 0.72 0.76 0.82
-----------------------------------------------------------------------------
Net Asset Value, End of Period..... $ 13.95 $ 13.83 $ 13.99 $ 12.80 $ 14.31 $ 13.60 $ 13.34
-----------------------------------------------------------------------------
Total Return(C).................... 6.96% 3.54% 14.85% (5.69)% 10.76% 7.88% 11.13%
Net Assets End of Period (In
Thousands)........................ $23,695 $28,478 $33,626 $34,297 $41,702 $29,728 $22,614
Ratio of Expenses to Average Net
Assets............................ 1.22% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25%
Ratio of Expenses to Average Net
Assets (Excluding Waivers)........ 1.60% 1.41% 1.42% 1.28% 1.39% 1.41% 1.47%
Ratio of Net Investment Income
(Loss) to Average Net Assets...... 4.50% 4.64% 4.82% 5.00% 4.90% 5.60% 6.30%
Ratio of Net Investment Income
(Loss) to Average Net Assets
(Excluding Waivers)............... 4.12% 4.48% 4.65% 4.97% 4.79% 5.49% 6.04%
Portfolio Turnover................. 0.94% 0.91% 0.75% 25.70% 8.30% 16.30% 21.60%
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
TAX-EXEMPT INCOME FUND (CLASS A) 1990 1989 1988
- ----------------------------------- -----------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period............................ $ 12.87 $ 12.66 $ 12.09
Net Investment Income (Loss)....... 0.81 0.76 0.65
Net Realized and Unrealized Gain
(Loss) on Investments............. (0.10) 0.31 0.64
------ ------- -------
Total from Investment Operations... 0.71 1.07 1.29
------ ------- -------
Dividends from Net Investment
Income (Loss)..................... 0.80 0.77 0.65
Distributions from Net Realized
Capital Gains..................... 0.00 0.09 0.07
------ ------- -------
Total Distributions................ 0.80 0.86 0.72
------ ------- -------
Net Asset Value, End of Period..... $ 12.78 $ 12.87 $ 12.66
------ ------- -------
Total Return(C).................... 5.71% 8.68% 10.90%
Net Assets End of Period (In
Thousands)........................ $19,880 $18,354 $ 6,655
Ratio of Expenses to Average Net
Assets............................ 1.20% 2.10% 2.10%
Ratio of Expenses to Average Net
Assets (Excluding Waivers)........ 1.47% 2.60% 4.00%
Ratio of Net Investment Income
(Loss) to Average Net Assets...... 6.50% 6.00% 5.60%
Ratio of Net Investment Income
(Loss) to Average Net Assets
(Excluding Waivers)............... 6.14% 5.53% 3.67%
Portfolio Turnover................. 66.40% 99.60% 117.40%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, FOR THE PERIOD
-------------------------------- MAY 1 THROUGH
TAX-EXEMPT INCOME FUND (CLASS B) 1998 1997 1996 DECEMBER 31, 1995
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period......... $13.83 $13.99 $13.44
Net Investment Income (Loss)................. 0.55 0.56 0.38
Net Realized and Unrealized Gain (Loss) on
Investments................................. 0.31 (0.16) 0.57
---------------------------------------
Total from Investment Operations............. 0.86 0.40 0.95
---------------------------------------
Dividends from Net Investment Income......... 0.55 0.56 0.38
Distributions from Capital Gains............. 0.19 0.00 0.02
---------------------------------------
Total Distributions.......................... 0.74 0.56 0.40
---------------------------------------
Net Asset Value, End of Period............... $13.95 $13.83 $13.99
---------------------------------------
Total Return(D).............................. 6.36% 2.96% 7.18%(B)
Net Assets End of Period (In Thousands)...... $2,883 $2,037 $ 912
Ratio of Expenses to Average Net Assets...... 1.76% 1.80% 1.80%(A)
Ratio of Expenses to Average Net Assets
(Excluding Waivers)......................... 2.16% 1.96% 1.98%(A)
Ratio of Net Investment Income to Average Net
Assets...................................... 3.94% 4.07% 4.08%(A)
Ratio of Net Investment Income (Loss) to
Average Net Assets (Excluding Waivers)...... 3.54% 3.92% 3.94%(A)
Portfolio Turnover rate...................... 0.94% 0.91% 0.75%(A)
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED MAY 1 THROUGH
TAX-EXEMPT INCOME FUND (CLASS C) DECEMBER 31, 1998 DECEMBER 31, 1997
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period........................ $13.68
Net Investment Income (Loss)................................ 0.36
Net Realized and Unrealized Gains (Losses) on Investments... 0.46
---------------------
Total from Investment Operations............................ 0.82
---------------------
Dividends from Net Investment Income (Loss)................. 0.36
Distributions from Net Realized Capital Gains............... 0.19
---------------------
Total Distributions......................................... 0.55
---------------------
Net Asset Value, End of Period.............................. $13.95
---------------------
Total Return(D)............................................. 6.14%(B)
Net Assets End of Period (In Thousands)..................... $ 184
Ratio of Expenses to Average Net Assets..................... 1.67%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................... 2.34%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets..................................................... 3.99%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers) 3.32%(A)
Portfolio Turnover.......................................... 0.94%(A)
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
<PAGE> 95
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED DECEMBER 31, FOR THE PERIOD
DECEMBER 31, ------------------------------- OCTOBER 1 THROUGH
MANAGED FUND (CLASS A) 1998 1997 1996 1995 DECEMBER 31, 1994
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.................... $ $ 7.97 $ 6.70 $ 4.91 $ 5.00
Net Investment Income (Loss)............................ 0.04 0.06 0.04 0.01
Net Realized and Unrealized Gain (Loss) on
Investments............................................ 1.64 1.41 1.81 (0.09)
-------------------------------------------------------------------
Total from Investment Operations........................ 1.68 1.47 1.85 (0.08)
-------------------------------------------------------------------
Dividends from Net Investment Income (Loss)............. 0.04 0.06 0.03 0.01
Distributions from Net Realized Capital Gains........... 0.36 0.14 0.03 0.00
-------------------------------------------------------------------
Total Distributions..................................... 0.40 0.20 0.06 0.01
-------------------------------------------------------------------
Net Asset Value, End of Period.......................... $ $ 9.25 $ 7.97 $ 6.70 $ 4.91
-------------------------------------------------------------------
Total Return(C)......................................... 21.05% 22.08% 37.68% (1.58)%(B)
Net Assets End of Period (In Thousands)................. $ $156,608 $101,022 $47,839 $7,872
Ratio of Expenses to Average Net Assets................. 1.49% 1.57% 1.75% 1.75%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)............................................... 1.49% 1.57% 1.90% 3.71%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets................................................. 0.47% 1.12% 1.09% 1.30%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets (Excluding Waivers)............................. 0.47% 1.12% 0.94% (0.32)%(A)
Portfolio Turnover...................................... 28.17% 33.21% 26.40% 27.10%(A)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED
YEAR ENDED DECEMBER 31, FOR THE PERIOD
DECEMBER 31, ------------------- MAY 1 THROUGH
MANAGED FUND (CLASS B) 1998 1997 1996 DECEMBER 31, 1995
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $ $ 7.93 $ 6.68 $ 5.68
Net Investment Income (Loss)................................ (0.01) 0.02 0.01
Net Realized and Unrealized Gain (Loss) on Investments...... 1.63 1.41 1.05
------------------------------------------------------
Total from Investment Operations............................ 1.62 1.43 1.06
------------------------------------------------------
Dividends from Net Investment Income (Loss)................. 0.00 0.04 0.03
Distributions from Capital Gains............................ 0.36 0.14 0.03
------------------------------------------------------
Total Distributions......................................... 0.36 0.18 0.06
------------------------------------------------------
Net Asset Value, End of Period.............................. $ $ 9.19 $ 7.93 $ 6.68
------------------------------------------------------
Total Return(D)............................................. 20.45% 21.50% 18.38%(B)
Net Assets End of Period (In Thousands)..................... $ $110,213 $57,037 $16,792
Ratio of Expenses to Average Net Assets..................... 2.04% 2.13% 2.30%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................... 2.04% 2.13% 2.45%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets..................................................... (0.09)% 0.52% 0.31%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................ (0.09)% 0.52% 0.14%(A)
Portfolio Turnover Rate..................................... 28.17% 33.21% 26.40%(A)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED FOR THE PERIOD
DECEMBER 31, MAY 1 THROUGH
MANAGED FUND (CLASS C) 1998 DECEMBER 31, 1997
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period........................ $ $ 8.24
Net Investment Income (Loss)................................ 0.00
Net Realized and Unrealized Gains (Losses) on Investments... 1.38
--------------------------------
Total from Investment Operations............................ 1.38
--------------------------------
Dividends from Net Investment Income........................ 0.05
Distributions from Net Realized Capital Gains............... 0.36
--------------------------------
Total Distributions......................................... 0.41
--------------------------------
Net Asset Value, End of Period.............................. $ $ 9.21
--------------------------------
Total Return(D)............................................. 16.74%(B)
Net Assets End of Period (In Thousands)..................... $ $ 3,614
Ratio of Expenses to Average Net Assets..................... 2.06%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................... 2.06%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets..................................................... (0.18)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................ (0.18)%(A)
Portfolio Turnover.......................................... 28.17%(A)
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
<PAGE> 96
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
YEAR ENDED --------------------------------------------------------------------------
MONEY MARKET FUND (CLASS A) DECEMBER 31, 1998 1997 1996 1995 1994 1993 1992(F) 1991
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period.............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net Investment Income (Loss)......... 0.05 0.04 0.05 0.03 0.02 0.03 0.05
----------------------------------------------------------------------------------------
Total from Investment Operations..... 0.05 0.04 0.05 0.03 0.02 0.03 0.05
----------------------------------------------------------------------------------------
Dividends from Net Investment Income
(Loss).............................. 0.05 0.04 0.05 0.03 0.02 0.03 0.05
----------------------------------------------------------------------------------------
Total Distributions.................. 0.05 0.04 0.05 0.03 0.02 0.03 0.05
----------------------------------------------------------------------------------------
Net Asset Value, End of Period....... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------------------------------------------------------------------------------------
Total Return......................... 4.69% 4.51% 5.05% 3.34% 2.24% 2.92% 5.22%
Net Assets End of Period (In
Thousands).......................... $68,466 $59,074 $40,325 $32,334 $18,302 $18,932 $16,710
Ratio of Expenses to Average Net
Assets.............................. 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
Ratio of Expenses to Average Net
Assets (Excluding Waivers).......... 1.24% 1.18% 1.35% 1.33% 1.72% 1.56% 1.51%
Ratio of Net Investment Income (Loss)
to Average Net Assets............... 4.59% 4.42% 4.92% 3.30% 2.20% 2.80% 5.10%
Ratio of Net Investment Income (Loss)
to Average Net Assets (Excluding
Waivers)............................ 4.35% 4.24% 4.57% 3.08% 1.47% 1.81% 4.62%
<CAPTION>
FOR THE PERIOD
MAY 1 THROUGH
MONEY MARKET FUND (CLASS A) DECEMBER 31, 1990
- ------------------------------------- -----------------
<S> <C>
Net Asset Value, Beginning of
Period.............................. $ 1.00
Net Investment Income (Loss)......... 0.04
-------
Total from Investment Operations..... 0.04
-------
Dividends from Net Investment Income
(Loss).............................. 0.04
-------
Total Distributions.................. 0.04
-------
Net Asset Value, End of Period....... $ 1.00
Total Return......................... 4.75%(B)
Net Assets End of Period (In
Thousands).......................... $19,031
Ratio of Expenses to Average Net
Assets.............................. 1.00%(A)
Ratio of Expenses to Average Net
Assets (Excluding Waivers).......... 1.38%(A)
Ratio of Net Investment Income (Loss)
to Average Net Assets............... 7.00%(A)
Ratio of Net Investment Income (Loss)
to Average Net Assets (Excluding
Waivers)............................ 6.17%(A)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, FOR THE PERIOD
YEAR ENDED ---------------- MAY 1 THROUGH
MONEY MARKET FUND (CLASS B) DECEMBER 31, 1998 1997 1996 DECEMBER 31, 1995
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $ 1.00 $ 1.00 $ 1.00
Net Investment Income (Loss)................................ 0.04 0.04 0.03
--------------------------------------------
Total from Investment Operations............................ 0.04 0.04 0.03
--------------------------------------------
Dividends from Net Investment Income (Loss)................. 0.04 0.04 0.03
--------------------------------------------
Total Distributions......................................... 0.04 0.04 0.03
--------------------------------------------
Net Asset Value, End of Period.............................. $ 1.00 $ 1.00 $ 1.00
--------------------------------------------
Total Return(D)............................................. 4.11% 3.94% 2.95%(B)
Net Assets End of Period (In Thousands)..................... $5,980 $1,344 $ 394
Ratio of Expenses to Average Net Assets..................... 1.55% 1.55% 1.55%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................... 1.79% 1.73% 1.88%(A)
Ratio of Net Investment Income to Average (Loss) Net
Assets..................................................... 4.09% 3.85% 4.23%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................ 3.85% 3.68% 3.90%(A)
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED MAY 1 THROUGH
MONEY MARKET FUND (CLASS C) DECEMBER 31, 1998 DECEMBER 31, 1997
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period........................ $ 1.00
Net Investment Income (Loss)................................ 0.02
-------------------------
Total from Investment Operations............................ 0.02
-------------------------
Dividends from Net Investment Income (Loss)................. 0.02
-------------------------
Total Distributions......................................... 0.02
-------------------------
Net Asset Value, End of Period.............................. $ 1.00
-------------------------
Total Return(D)............................................. 2.86%(B)
Net Assets End of Period (In Thousands)..................... $1,021
Ratio of Expenses to Average Net Assets..................... 1.55%(A)
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................... 1.85%(A)
Ratio of Net Investment Income (Loss) to Average Net
Assets..................................................... 4.15%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers)........................................ 3.85%(A)
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
19
<PAGE> 97
The Enterprise Group of Funds
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: 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: 800-368-3527
Independent Accountants
PricewaterhouseCoopers LLP
Atlanta, GA
Member - Investment Company Institute
<PAGE> 98
(OUTSIDE BACK COVER)
FOR MORE INFORMATION
The following documents contain more information about the Funds and
are available free of charge upon request:
Annual/Semi-annual Reports. Contain financial statements,
performance data and information on portfolio holdings. The
annual report also contains a written analysis of market
conditions and investment strategies that significantly
affected a Fund's performance during the last fiscal year.
Statement of Additional Information (SAI). Contains additional
information about the Funds' policies, investment restrictions
and business structure. This prospectus incorporates the SAI
by reference.
You may obtain copies of these documents or ask questions about the
Funds by contacting:
Enterprise Group of Funds, Inc.
Atlanta Financial Center
3343 Peachtree Road, N.E., Suite 450
Atlanta, Georgia 30326
1-800-368-3527
or by calling your broker or financial advisor.
Information about the Funds (including the SAI) can be reviewed and
copied at the Public Reference Room of the Securities and Exchange Commission,
Washington, D.C. Call (800) SEC-0330 for information on the operation of the
Public Reference Room. Information about the Funds is also available on the
Securities and Exchange Commission's web-site at http://www.sec.gov and copies
may be obtained upon payment of a duplicating fee by writing the Public
Reference Section of the Securities and Exchange Commission, Washington, D.C.
20549-6009. You also may obtain additional information about the Funds by
visiting the Enterprise Group of Funds, Inc.'s website (www.enterprisefunds.com)
and 24-hour Shareholder information by calling 1-800-821-9540.
You should rely only on the information contained in this prospectus.
No one is authorized to provide you with any different information.
INVESTMENT COMPANY ACT
File No.
<PAGE> 99
THE ENTERPRISE GROUP OF FUNDS, INC.
PROSPECTUS
CLASS Y SHARES
DATED MAY 3, 1999
Equity Funds
Growth Fund
Growth and Income Fund
Equity Fund
Equity Income Fund
Capital Appreciation Fund
Small Company Growth Fund
Small Company Value Fund
International Growth Fund
Global Financial Services Fund
Income Funds
Government Securities Fund
High-Yield Bond Fund
Tax-Exempt Income Fund
Flexible Fund
Managed Fund
Money Market Fund
Money Market Fund
This prospectus contains information you should know before investing, including
information about risks. Please read it before you invest and keep it for future
reference. As with all mutual funds, the Securities and Exchange Commission does
not guarantee that the information in this prospectus is accurate or complete,
nor has it approved or disapproved these securities. It is a criminal offense to
state otherwise.
<PAGE> 100
TABLE OF CONTENTS
<TABLE>
<S> <C>
Introduction......................................................................................................1
Growth Fund.......................................................................................................2
Growth and Income Fund............................................................................................4
Equity Fund.......................................................................................................7
Equity Income Fund...............................................................................................10
Capital Appreciation Fund........................................................................................13
Small Company Growth Fund........................................................................................16
Small Company Value Fund.........................................................................................19
International Growth Fund........................................................................................22
Global Financial Services Fund...................................................................................25
Government Securities Fund.......................................................................................28
High-Yield Bond Fund.............................................................................................32
Tax-Exempt Income Fund...........................................................................................36
Managed Fund.....................................................................................................40
Money Market Fund................................................................................................43
Additional Information about the Funds' Investments and Risks....................................................46
Equity and Flexible Funds' Investments..................................................................46
Income Funds' Investments...............................................................................47
Money Market Fund's Investments.........................................................................48
Investment Restrictions and Practices...................................................................49
Risk Terminology........................................................................................51
Shareholder Account Information..................................................................................53
Class Y Shares..........................................................................................53
Purchasing, Redeeming and Exchanging Shares.............................................................53
Transaction and Account Policies.................................................................................57
Valuation of Shares.....................................................................................57
Execution of Requests...................................................................................58
</TABLE>
i
<PAGE> 101
<TABLE>
<S> <C>
Telephone Transactions.................................................................................58
Exchanges..............................................................................................59
Share Certificates.....................................................................................59
Small Accounts.........................................................................................59
Dealer Compensation....................................................................................59
Dividends, Distributions and Taxes.....................................................................60
Fund Management.................................................................................................62
The Investment Advisor.................................................................................62
The Fund Managers......................................................................................63
Year 2000..............................................................................................68
Financial Highlights............................................................................................69
</TABLE>
ii
<PAGE> 102
INTRODUCTION
The Enterprise Group of Funds, Inc. is a mutual fund family that offers
different classes of shares in separate investment portfolios or Funds. This
prospectus relates to Class Y shares of the Funds. The Funds have individual
objectives and strategies to offer investors a broad range of investment
alternatives.
Enterprise Capital Management, Inc. (the "Advisor") is the investment
advisor to each Fund. The Advisor selects a Fund Manager for each Fund's
portfolio on the basis of a number of criteria, including the Fund Manager's
reputation, resources and performance results.
Before investing in any mutual fund, you should consider the general
risks involved. The value of your investment in a Fund is based on the market
prices of the securities the Fund holds. These prices change due to economic and
other events that affect securities markets generally, as well as those that
affect particular companies or governments. These price movements, sometimes
called volatility, will vary depending on the types of securities a Fund owns
and the markets where these securities trade. Like other investments, you could
lose money on your investment in a Fund. Your investment in a Fund is not a bank
deposit. It is not insured or guaranteed by the FDIC or any government agency.
We cannot guarantee that a Fund will achieve its objective. A Fund's objective
may not be changed without shareholder approval.
1
<PAGE> 103
GROWTH FUND
FUND PROFILE
<TABLE>
<S> <C>
Investment Objective Capital appreciation
Principal Investments U.S. common stocks of large capitalization
companies
Fund Manager Montag & Caldwell, Inc.
Investor Profile Investors who want the value of
their investment to grow but do not need to
receive income on their investment.
Investment Strategies The Growth Fund invests primarily in U.S.
common stocks. The "Growth at a Price,"
strategy employed by the Fund combines
growth and value style investing. This means
that the Fund invests in the stocks of
companies with long-term earnings potential
but which are currently selling at a
discount to their estimated long term value.
The Fund's equity selection process is a
lower risk, growth stock approach. Valuation
is the key selection criterion which makes
the investment style risk adverse. Also
emphasized are growth characteristics to
identify companies whose shares are
attractively priced and may experience
strong earnings growth relative to other
companies.
Principal Risks As a result of investing primarily in
U.S. common stocks, the Fund is subject to
the risk that stock prices will fall over
short or extended periods of time. Stock
markets tend to move in cycles, with
periods of rising prices and periods of
falling prices. This price volatility is
the principal risk of investing in the
Fund.
</TABLE>
Performance Information
The bar chart and the performance table below illustrate the volatility
of an investment in the Fund and give some indication of the risk. Of course,
the Fund's past performance does not necessarily indicate how the Fund will
perform in the future.
This bar chart shows changes in the performance of the Fund's Class Y
shares from year to year.
<TABLE>
<S> <C>
32.40% 32.09%
1997 1998
</TABLE>
Best Quarter Worst Quarter
27.52% -13.92%
(December 31, 1998) (September 30, 1998)
2
<PAGE> 104
<TABLE>
<CAPTION>
Average Annual Total Returns (as of the Past One Return Since
calendar year ended December 31, 1998) Year Inception(1)
- --------------------------------------------------------------------------------
<S> <C> <C>
Enterprise Growth Fund Class Y 32.09% 36.09%
- --------------------------------------------------------------------------------
S&P 500(2) 28.57% 33.45%
- --------------------------------------------------------------------------------
</TABLE>
1. Inception date for Class Y shares is August 31, 1996.
2. This unmanaged broad-based index includes 500 companies which tend to be
leaders in important industries within the U.S. economy. It includes
reinvested dividends. An index does not have an investment advisor and does
not pay commissions or expenses. If an index had expenses, its performance
would be lower.
FEES AND EXPENSES
This table describes the shareholder fees that you may pay if you
purchase or redeem Fund shares. Every mutual fund has operating expenses to pay
for professional advisory, shareholder, distribution, administration and custody
services. The Fund's expenses in the table are shown as a percentage of the
Fund's net assets. These expenses are deducted from Fund assets. The table shows
the highest expenses that could be currently charged to the Fund.
<TABLE>
<S> <C>
Shareholder Fees (paid directly from your investment in the fund) Class Y
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) None
Maximum Deferred Sales Charge (Load)
(as a percentage of net asset value) None
Annual Fund Operating Expenses (paid indirectly if you hold fund shares)
Investment Advisory Fees 0.75%
Distribution and Service (12b-1) Fees None
Other Expenses (1) %
-----
Total Annual Fund Operating Expenses %
</TABLE>
1. The Fund received expense reimbursements of ____% in exchange for
brokerage credits which are not reflected in the table.
EXAMPLE
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the Fund for the time periods indicated. The example
also assumes that each year your investment has a 5% return and Fund expenses
remain the same. Although your actual costs and returns may be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
If you redeem your shares at the end of the period:
Class Y $ $ $ $
If you do not redeem your shares:
Class Y $ $ $ $
</TABLE>
3
<PAGE> 105
GROWTH AND INCOME FUND
FUND PROFILE
<TABLE>
<S> <C>
Investment Objective Total return through capital appreciation
with income as a secondary consideration
Principal Investments Broadly diversified group of U.S. common
stocks of large capitalization companies
Fund Manager Retirement System Investors Inc.
Investor Profile Investors who want the value of
their investment to grow, with the
potential of receiving dividend income.
Investment Strategies The Growth and Income Fund invests
primarily in U.S. common stocks of large
capitalization companies. The Fund
principally selects stocks that will
appreciate in value, seeking to take
advantage of temporary stock price
inefficiencies which may be caused by market
participants focusing heavily on short-term
developments. In selecting stocks for the
Fund, the Fund Manager employs a "value-
oriented" strategy. This means that the Fund
Manager attempts to identify stocks of
companies that have greater value than is
recognized by the market generally. The Fund
Manager considers a number of factors, such
as sales, growth and profitability prospects
for the economic sector and markets in which
the company operates and for the company's
products and services, the company's stock
market price, earnings level and projected
earnings growth rate. The Fund Manager
compares this information to that of other
companies in determining relative value.
Principal Risks The Fund invests primarily in U.S.
common stocks. As a result, the Fund is
subject to the risk that stock prices will
fall over short or extended periods of
time. Stock markets tend to move in cycles,
with periods of rising prices and periods
of falling prices. This price volatility is
the principal risk of investing in the
Fund.
</TABLE>
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the volatility
of an investment in the Fund and give some indication of the risk. Of course,
the Fund's past performance does not necessarily indicate how the Fund will
perform in the future.
This bar chart shows changes in the performance of the Fund's Class Y
shares from year to year.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
5.11% 16.00% 5.75% 36.20% 24.46% 27.65% 17.08%
1992 1993 1994 1995 1996 1997 1998
</TABLE>
4
<PAGE> 106
<TABLE>
<CAPTION>
BEST QUARTER WORST QUARTER
19.50% -12.40%
(DECEMBER 31, 1998) (SEPTEMBER 30, 1998)
Average Annual Total Returns
(as of the calendar year ended Past One Past Five Return Since Inception (1)
December 31, 1998) Year Years --------------------------
Fund S&P 500 (2)
<S> <C> <C> <C> <C>
Enterprise Growth and Income
Fund Class Y 17.08% 21.79% 18.79% xx.xx%
S&P 500(2) 28.57% 24.06% 19.20% xx.xx%
</TABLE>
1. Inception for Class Y shares is May 31, 1991.
2. This unmanaged broad-based index includes 500 companies which tend to
be leaders in important industries within the US economy. It includes
reinvested dividends. An index does not have an investment advisor and
does not pay commissions or expenses. If an index had expenses, its
performance would be lower.
FEES AND EXPENSES
This table describes the shareholder fees that you may pay if you
purchase or redeem Fund shares. Every mutual fund has operating expenses to pay
for professional advisory, shareholder, distribution, administration and custody
services. The Fund's expenses in the table are shown as a percentage of the
Fund's net assets. These expenses are deducted from Fund assets. The table shows
the highest expenses that could be currently charged to the Fund.
<TABLE>
<S> <C>
Shareholder Fees (paid directly from your investment in the fund) Class Y
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) None
Maximum Deferred Sales Charge (Load)
(as a percentage of net asset value) None
Annual Fund Operating Expenses (paid indirectly if you hold fund shares)
Investment Advisory Fees 0.75%
Distribution and Service (12b-1) Fees None
Other Expenses %
-----
Total Annual Fund Operating Expenses (1) %
</TABLE>
1. Actual Expenses are lower because the advisor is voluntarily
reimbursing the Fund for some of its expenses. If these reimbursements
are taken into account, Other Expenses and Total Operating Expenses for
Class Y shares are:
<TABLE>
<S> <C>
Actual Other Expenses 0.30%
Actual Total Operating 1.05%
Expenses
</TABLE>
The Advisor could discontinue these voluntary reimbursements at any
time.
5
<PAGE> 107
EXAMPLE
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the Fund for the time periods indicated. The example
also assumes that each year your investment has a 5% return and Fund expenses
remain the same. Although your actual costs and returns may be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
If you redeem your shares at the end of the period:
Class Y $ $ $ $
If you do not redeem your shares:
Class Y $ $ $ $
</TABLE>
6
<PAGE> 108
EQUITY FUND
FUND PROFILE
Investment Objective Long-term capital appreciation
Principal Investments U.S. equity securities
Fund Manager OpCap Advisors
Investor Profile Investors who want the value of
their investment to grow but do not need to
receive income on their investment.
Investment Strategies The Equity Fund invests primarily in equity
securities of companies that meet the Fund
Manager's criteria of high return on
investment capital, strong positions within
their industries, sound financial
fundamentals and management committed to
shareholder interests. The Fund Manager
selects companies with one or more of the
following characteristics: substantial and
growing discretionary cash flow, strong
shareholder value-oriented management,
valuable consumer or commercial franchises,
high return on capital, favorable price to
intrinsic value, and under-valued assets.
The Fund Manager also imposes a strict sell
discipline to sell the stock once it rises
near to the target price.
Principal Risks The Fund invests primarily in U.S.
common stocks. As a result, the Fund is
subject to the risk that stock prices will
fall over short or extended periods of
time. Stock markets tend to move in cycles,
with periods of rising prices and periods
of falling prices. This price volatility is
the principal risk of investing in the
Fund.
7
<PAGE> 109
FEES AND EXPENSES
This table describes the shareholder fees that you may pay if you
purchase or redeem Fund shares. Every mutual fund has operating expenses to pay
for professional advisory, shareholder, distribution, administration and custody
services. The Fund's expenses in the table above are shown as a percentage of
the Fund's net assets. These expenses are deducted from Fund assets. The table
shows the highest expenses that could be currently charged to the Fund.
<TABLE>
<S> <C>
Shareholder Fees (paid directly from your investment in the fund) Class Y
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) None
Maximum Deferred Sales Charge (Load)
(as a percentage of net asset value) None
Annual Fund Operating Expenses (paid indirectly if you hold fund shares)
Investment Advisory Fees 0.75%
Distribution and Service (12b-1) Fees None
Other Expenses %
-----
Total Annual Fund Operating Expenses(1) %
</TABLE>
1. Actual expenses are lower because the Advisor is voluntarily
reimbursing the Fund for some of its expenses. If these reimbursements
are taken into account, Other Expenses and Total Operating Expenses for
Class Y shares are:
<TABLE>
<S> <C>
Actual Other Expenses 0.40%
Actual Total Operating 1.15%
Expenses
</TABLE>
The Advisor could discontinue these voluntary reimbursements at any
time.
8
<PAGE> 110
EXAMPLE
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the Fund for the time periods indicated. The example
also assumes that each year your investment has a 5% return and Fund expenses
remain the same. Although your actual costs and returns may be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
If you redeem your shares at the end of the period:
Class Y $ $ $ $
If you do not redeem your shares:
Class Y $ $ $ $
</TABLE>
9
<PAGE> 111
EQUITY INCOME FUND
FUND PROFILE
<TABLE>
<S> <C>
Investment Objective A combination of growth and income to achieve an above-average
and consistent total return
Principal Investments Dividend-paying U.S. common stocks
Fund Manager 1740 Advisers, Inc.
Investor Profile Investors who want the value of their investment to grow, with the
potential of receiving dividend income.
Investment Strategies The Equity Income Fund invests primarily in dividend-paying U.S. common stocks with
dividends that exceed the average for the S&P 500. The goal is capital appreciation
combined with a high level of current income. Dividend yield relative to the S&P
500 average is used as a discipline and measure of value in selecting stocks for
the Fund. To qualify for a purchase, a stock's yield must be greater than the S&P
500's yield. The stock must be sold within two quarters after the yield falls below the
S&P yield. The effect of this discipline is that a stock whose price rises faster than
its dividend increases is sold.
Principal Risks The Fund invests primarily in U.S. common stocks. As a result, the Fund is
subject to the risk that stock prices will fall over short or extended periods of
time. Stock markets tend to move in cycles, with periods of rising prices and periods
of falling prices. This price volatility is the principal risk of investing in the
Fund.
</TABLE>
10
<PAGE> 112
Fees and Expenses
This table describes the shareholder fees that you may pay if you
purchase or redeem Fund shares. Every mutual fund has operating expenses to pay
for professional advisory, shareholder, distribution, administration and custody
services. The Fund's expenses in the table above are shown as a percentage of
the Fund's net assets. These expenses are deducted from Fund assets. The table
shows the highest expenses that could be currently charged to the Fund.
<TABLE>
<S> <C>
Shareholder Fees (paid directly from your investment in the fund) Class Y
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) None
Maximum Deferred Sales Charge (Load) None
(as a percentage of net asset value)
Annual Fund Operating Expenses (paid indirectly if you hold fund shares)
Investment Advisory Fees 0.75%
Distribution and Service (12b-1) Fees None
Other Expenses %
-------
Total Annual Fund Operating Expenses (1) %
</TABLE>
1. Actual Expenses are lower because the Advisor is voluntarily
reimbursing the Fund for some of its expenses. If these reimbursements
are taken into account, Other Expenses and Total Operating Expenses for
Class Y shares are:
<TABLE>
<S> <C>
Actual Other Expenses 0.30%
Actual Total Operating 1.05%
Expenses
</TABLE>
The Advisor could discontinue these voluntary reimbursements at any
time.
11
<PAGE> 113
EXAMPLE
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the Fund for the time periods indicated. The example
also assumes that each year your investment has a 5% return and Fund expenses
remain the same. Although your actual costs and returns may be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
If you redeem your shares at the end of the period:
Class Y $ $ $ $
If you do not redeem your shares:
Class Y $ $ $ $
</TABLE>
12
<PAGE> 114
CAPITAL APPRECIATION FUND
FUND PROFILE
<TABLE>
<S> <C>
Investment Objective Maximum capital appreciation
Principal Investments U.S. common stocks of companies that demonstrate accelerating
earnings momentum and consistently strong financial characteristics
Fund Manager Provident Investment Counsel, Inc.
Investor Profile Investors who want the value of
their investment to grow but do not need to
receive income on their investment and are
willing to accept the increased risk
associated with more aggressive investment
strategies.
Investment Strategies The Capital Appreciation Fund invests in U.S. common stocks of
companies that demonstrate accelerating earnings momentum and
consistently strong financial characteristics. The Fund Manager's
criteria for stock selection include: (a) steadily increasing earnings;
and (b) a three-year average performance record of sales, earnings,
dividend growth, pretax margins, return on equity and reinvestment
rate at an aggregate average of 1.5 times the average performance of
the S&P 500 for the same period. The Fund Manager selects
stocks of small, medium and large capitalization companies in an
attempt to achieve an average capitalization of portfolio companies
that is less than the average capitalization of the S&P 500. The
potential for maximum capital appreciation is the basis for investment
decisions; any income is incidental.
Principal Risks The Fund investment universe consists of large, medium and small capitalization
common stocks. As a result, the Fund is subject to the risk that
stock prices will fall over short or extended periods of time. Stock
markets tend to move in cycles, with periods of rising prices and
periods of falling prices. This price volatility is the principal risk of
investing in the Fund. In addition, small- to mid-sized companies
may be more vulnerable to adverse business or economic events
than larger, more established companies. In particular, these
companies may have somewhat limited product lines, markets and
financial resources, and may depend upon a relatively small- to
medium-sized management group.
</TABLE>
13
<PAGE> 115
1. Inception date for Class A shares is September 14, 1987.
2. This unmanaged broad-based index is comprised of U.S. stocks in the S&P
500 with high price to book ratios. An index does not have an
investment advisor and does not pay commissions or expenses. If an
index had expenses, its performance would be lower.
Fees and Expenses
This table describes the shareholder fees that you may pay if you
purchase or redeem Fund shares. Every mutual fund has operating expenses to pay
for professional advisory, shareholder, distribution, administration and custody
services. The Fund's expenses in the table above are shown as a percentage of
the Fund's net assets. These expenses are deducted from Fund assets. The table
shows the highest expenses that could be currently charged to the Fund.
14
<PAGE> 116
<TABLE>
<S> <C>
SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT IN A FUND) Class Y
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) None
Maximum Deferred Sales Charge (Load)
(as a percentage of net asset value) None
ANNUAL FUND OPERATING EXPENSES (PAID INDIRECTLY IF YOU HOLD FUND SHARES)
Investment Advisory Fees 0.75%
Distribution and Service (12b-1) Fees None
Other Expenses %
-------
Total Annual Fund Operating Expenses %
</TABLE>
EXAMPLE
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the Fund for the time periods indicated. The example
also assumes that each year your investment has a 5% return and Fund expenses
remain the same. Although your actual costs and returns may be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
If you redeem your shares at the end of the period:
Class Y $ $ $ $
If you do not redeem your shares:
Class Y $ $ $ $
</TABLE>
15
<PAGE> 117
SMALL COMPANY GROWTH FUND
<TABLE>
<CAPTION>
FUND PROFILE
<S> <C>
Investment Objective Capital appreciation
Principal Investments U.S. common stocks of small capitalization companies
Fund Manager William D. Witter, Inc.
Investor Profile Investors who want an increase in the value of their investment
without regard to income; are willing to
accept the increased risk of investing in
small company stocks for the possibility of
higher returns; and want to diversify their
portfolio to include small company stocks.
Investment Strategies The Small Company Growth Fund invests primarily in common
stocks of small capitalization companies with above-average growth
characteristics that are reasonably valued. The Fund Manager uses
a disciplined approach in evaluating growth companies. It relates the
expected growth rate in earnings to the price-earnings ratio of the
stock. Generally, the Fund Manager will not buy a stock if the
price-earnings ratio exceeds the growth rate. By using this valuation
parameter, the Fund Manager believes it moderates some of the
inherent volatility in the small capitalization sector of the market.
Securities will be sold when the Fund Manager believes the stock
price exceeds the valuation criteria, or when the stock appreciates to
a point where it is substantially overweighted in the portfolio, or
when the company no longer meets expectations. The Fund
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.
Principal Risks The Fund invests primarily in small capitalization common stocks.
As a result, the Fund is subject to the risk that stock prices will fall
over short or extended periods of time. Stock markets tend to move
in cycles, with periods of rising prices and periods of falling prices.
This price volatility is the principal risk of investing in the Fund. In
addition, small-sized companies may be more vulnerable to adverse
business or economic events than larger, more established
companies. In particular, small-sized companies may have limited
product lines, markets and financial resources, and may depend
upon a relatively small management group.
</TABLE>
Performance Information
The bar chart and the performance table below illustrate the volatility
of an investment in the Fund and give some indication of the risk. Of course,
the Fund's past performance does not necessarily indicate how the Fund will
perform in the future.
16
<PAGE> 118
This bar chart shows changes in the performance of the Fund's Class Y
shares from year to year.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
16.69% 25.73% 10.37% 39.56% 27.77% 9.95% -3.76%
1992 1993 1994 1995 1996 1997 1998
</TABLE>
Best Quarter Worst Quarter
27.19% -24.36%
(December 31, 1998) (September 30, 1998)
<TABLE>
<CAPTION>
Average Annual Total Returns (as of
the calendar year ended December Past One Past Five Return Since
31, 1998) Year Years Inception 1
- ----------------------------------- -------- --------- ------------
<S> <C> <C> <C>
Enterprise Small Company Growth
Fund Class Y -3.76% 15.80% 18.75%
Russell 2000 2 -2.56% 11.86% %
</TABLE>
1. Inception date for Class Y shares is May 31, 1991. 2. This
unmanaged broad-based index measures the performance of 2,000 small
capitalization companies. As of the latest reconstitution, the average
market capitalization was approximately $592.0 million and the largest
company in the index had an approximate market capitalization of
$1,402.7 million. An index does not have an investment advisor and does
not pay commissions or expenses. If an index had expenses, its
performance would be lower.
Fees and Expenses
This table describes the shareholder fees that you may pay if you
purchase or redeem Fund shares. Every mutual fund has operating expenses to pay
for professional advisory, shareholder, distribution, administration and custody
services. The Fund's expenses in the table above are shown as a percentage of
the Fund's net assets. These expenses are deducted from Fund assets. The table
shows the highest expenses that could be currently charged to the Fund.
<TABLE>
<S> <C>
Shareholder Fees (paid directly from your investment in the fund) Class Y
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) None
Maximum Deferred Sales Charge (Load) None
(as a percentage of net asset value)
Annual Fund Operating Expenses (paid indirectly if you hold fund shares)
Investment Advisory Fees 1.00%
Distribution and Service (12b-1) Fees None
Other Expenses %
-------
Total Annual Fund Operating Expenses1 %
</TABLE>
1. Actual Expenses are lower because the advisor is voluntarily
reimbursing the Fund for some of its expenses. If these reimbursements
are taken into account, Other Expenses and Total Operating Expenses for
Class Y shares are:
Actual Other Expenses 0.40%
Actual Total Operating 1.40%
Expenses
17
<PAGE> 119
The Advisor could discontinue these voluntary reimbursements at any
time.
Example
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the Fund for the time periods indicated. The example
also assumes that each year your investment has a 5% return and Fund expenses
remain the same. Although your actual costs and returns may be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10YEARS
<S> <C> <C> <C> <C>
If you redeem your shares at the end of the period:
Class Y $ $ $ $
If you do not redeem your shares:
Class Y $ $ $ $
</TABLE>
18
<PAGE> 120
SMALL COMPANY VALUE FUND
FUND PROFILE
<TABLE>
<S> <C>
Investment Objective Maximum capital appreciation
Principal Investments U.S. common stocks of small capitalization companies
Fund Manager GAMCO Investors, Inc.
Investor Profile Investors who want an increase in
the value of their investment without
regard to income; are willing to accept the
increased risk of investing in small
company stocks for the possibility of
higher returns; and want to diversify their
portfolio to include small company stocks.
Investment Strategies The Small Company Value Fund invests primarily in common stocks
of small capitalization companies that the
Fund Manager believes are undervalued --
that is, the stock's market price does not
fully reflect the company's value. The
Fund Manager uses a proprietary research
technique to determine which stocks have a
market price that is less than the "private
market value." The Fund Manager then
determines whether there is an emerging
valuation catalyst that will focus investor
attention on the underlying assets of the
company and increase the market price.
Smaller companies may be subject to a
valuation catalyst such as increased
investor attention, takeover efforts or a
change in management.
Principal Risks The Fund invests primarily in small capitalization common stocks.
As a result, the Fund is subject to the risk that stock prices will fall
over short or extended periods of time. Stock markets tend to move
in cycles, with periods of rising prices and periods of falling prices.
This price volatility is the principal risk of investing in the Fund. In
addition, small-sized companies may be more vulnerable to adverse
business or economic events than larger, more established
companies. In particular, small-sized companies may have limited
product lines, markets and financial resources, and may depend
upon a relatively small management group.
</TABLE>
Performance Information
The bar chart and the performance table below illustrate the volatility
of an investment in the Fund and give some indication of the risk. Of course,
the Fund's past performance does not necessarily indicate how the Fund will
perform in the future.
This bar chart shows changes in the performance of the Fund's Class Y
shares from year to year.
19
<PAGE> 121
<TABLE>
<S> <C> <C>
11.83% 44.53% 6.13%
1996 1997 1998
</TABLE>
Best Quarter Worst Quarter
19.21% -16.95%
(June 30, 1997) (September 30, 1998)
<TABLE>
<CAPTION>
Average Annual Total Returns (as of the Past One Return Since
calendar year ended December 31, 1998) Year Inception (1)
- --------------------------------------- -------- -------------
<S> <C> <C>
Enterprise Small Company Value Fund
Class Y 6.13% 17.93%
Russell 2000 (2) -2.56% 14.78%
</TABLE>
1. Inception date for Class Y shares is May 31, 1995.
2. This unmanaged broad-based index measures the performance of 2,000
small capitalization companies. As of the latest reconstitution, the
average market capitalization was approximately $592.0 million and the
largest company in the index had an approximate market capitalization
of $1,402.7 million. An index does not have an investment advisor and
does not pay commissions or expenses. If an index had expenses, its
performance would be lower.
FEES AND EXPENSES
This table describes the shareholder fees that you may pay if you
purchase or redeem Fund shares. Every mutual fund has operating expenses to pay
for professional advisory, shareholder, distribution, administration and custody
services. The Fund's expenses in the table above are shown as a percentage of
the Fund's net assets. These expenses are deducted from Fund assets. The table
shows the highest expenses that could be currently charged to the Fund.
<TABLE>
<S> <C>
Shareholder Fees (paid directly from your investment in the fund) Class Y
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) None
Maximum Deferred Sales Charge (Load) None
(as a percentage of net asset value)
Annual Fund Operating Expenses (paid indirectly if you hold fund shares)
Investment Advisory Fees 0.75%
Distribution and Service (12b-1) Fees None
Other Expenses %
-------
Total Annual Fund Operating Expenses (1) %
</TABLE>
1. Actual expenses are lower because the Advisor is voluntarily
reimbursing the Fund for some of its expenses. If these reimbursements
are taken into account, Other Expenses and Total Operating Expenses for
Class Y shares are:
Actual Other Expenses 0.55%
Actual Total Operating 1.30%
Expenses
The Advisor could discontinue these voluntary reimbursements at any
time.
20
<PAGE> 122
Example
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the Fund for the time periods indicated. The example
also assumes that each year your investment has a 5% return and Fund expenses
remain the same. Although your actual costs and returns may be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
If you redeem your shares at the end of the period:
Class Y $ $ $ $
If you do not redeem your shares:
Class Y $ $ $ $
</TABLE>
21
<PAGE> 123
INTERNATIONAL GROWTH FUND
<TABLE>
<CAPTION>
FUND PROFILE
<S> <C>
Investment Objective Capital appreciation
Principal Investments Non-U.S. equity securities
Fund Manager Vontobel USA Inc.
Investor Profile Investors who want an increase in
the value of their investment without
regard to income; and are willing to accept
the increased risk of international
investing for the possibility of higher
returns.
Investment Strategies The International Growth Fund invests primarily in non-U.S.
equity securities that the Fund Manager believes are undervalued.
The Fund Manager uses an approach that involves top-down country
allocation combined with bottom-up stock selection. The Fund Manager
looks for companies that are good predictable businesses selling at
attractive prices relative to an estimate of intrinsic value. The
Fund Manager diversifies investments amongst European, Australian and
Far East ("EAFE") markets.
</TABLE>
22
<PAGE> 124
<TABLE>
<S> <C>
Principal Risks The Fund invests primarily in common stocks of foreign companies.
As a result, the Fund is subject to the risk that stock prices will fall
over short or extended periods of time. Stock markets tend to move
in cycles, with periods of rising prices and periods of falling prices.
This price volatility is the principal risk of investing in the Fund. In
addition, investments in foreign markets may be more volatile than
investments in U.S. markets. Diplomatic, political or economic
developments may cause foreign investments to lose money. The
value of the U.S. dollar may rise, causing reduced returns for U.S.
persons investing abroad. A foreign country may not have the same
accounting and financial reporting standards as the U.S. Foreign
stock markets, brokers and companies are generally subject to less
supervision and regulation than their U.S. counterparts. Emerging
markets securities may be even more susceptible to these risks.
</TABLE>
Performance Information
The bar chart and the performance table below illustrate the volatility
of an investment in the Fund and give some indication of the risk. Of course,
the Fund's past performance does not necessarily indicate how the Fund will
perform in the future.
This bar chart shows changes in the performance of the Fund's Class Y
shares from year to year.
<TABLE>
<S> <C> <C>
12.86% 5.21% 14.73%
1996 1997 1998
</TABLE>
Best Quarter Worst Quarter
17.54% -13.79%
(December 31, 1998) (September 30, 1998)
<TABLE>
<CAPTION>
Average Annual Total Returns (as of
the calendar year ended December Past One
31, 1998) Year Return Since Inception (1)
- ----------------------------------- -------- --------------------------
<S> <C> <C>
Enterprise International Growth
Fund Class Y 14.73% 12.22%
MSCI EAFE Index (2) 20.00% 8.49%
</TABLE>
1. Inception date for Class Y shares is July 31, 1995.
2. The Morgan Stanley Capital International Europe, Australia and the Far
East (MSCI EAFE) Index is a market capitalization weighted, equity
index comprised of 1,032 companies that are representative of the
market structure of 20 countries, excluding the United States, Canada
and other regions such as Latin America. Constituent stocks are
selected on the basis of industry representation, liquidity and
sufficient float.
23
<PAGE> 125
Fees and Expenses
This table describes the shareholder fees that you may pay if you
purchase or redeem Fund shares. Every mutual fund has operating expenses to pay
for professional advisory, shareholder, distribution, administration and custody
services. The Fund's expenses in the table above are shown as a percentage of
the Fund's net assets. These expenses are deducted from Fund assets. The table
shows the highest expenses that could be currently charged to the Fund.
<TABLE>
<S> <C>
Shareholder Fees (paid directly from your investment in the fund) Class Y
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offeringprice) None
Maximum Deferred Sales Charge (Load) None
(as a percentage of net asset value)
Annual Fund Operating Expenses (paid indirectly if you hold fund shares)
Investment Advisory Fees 0.85%
Distribution and Service (12b-1) Fees None
Other Expenses %
-------
Total Annual Fund Operating Expenses(1) %
</TABLE>
1. Actual expenses are lower because the Advisor is voluntarily
reimbursing the Fund for some of its expenses. If these reimbursements
are taken into account, Other Expenses and Total Operating Expenses for
Class Y shares are:
Actual Other Expenses 0.70%
Actual Total Operating 1.55%
Expenses
The Advisor could discontinue these voluntary reimbursements at any
time.
Example
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the Fund for the time periods indicated. The example
also assumes that each year your investment has a 5% return and Fund expenses
remain the same. Although your actual costs and returns may be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
If you redeem your shares at the end of the period:
Class Y $ $ $ $
If you do not redeem your shares:
Class Y $ $ $ $
</TABLE>
24
<PAGE> 126
GLOBAL FINANCIAL SERVICES FUND
FUND PROFILE
<TABLE>
<S> <C>
Investment Objective Capital appreciation
Principal Investments Common stocks of domestic and foreign financial services companies
Fund Manager Sanford C. Bernstein & Co., Inc.
Investor Profile Investors who want an increase in the value of their investment
without regard to income; want investment in the global financial
services sector; and are willing to accept the increased risk of
international investing for the possibility of higher returns.
Investment Strategies The Global Financial Services Fund invests primarily in the domestic
and foreign financial services industry by normally investing in
companies domiciled in the U.S. and at least three other countries.
The Fund considers a financial services company to be a firm that in
its most recent fiscal year either (i) derived at least 50% of its
revenues or earnings from financial services activities, or (ii) devoted
at least 50% of its assets to such activities. Financial services
companies provide financial services to consumers and businesses
and include the following types of U.S. and foreign firms: commercial
banks, thrift institutions and their holding companies; consumer and
industrial finance companies; diversified financial services companies;
investment banks; securities brokerage and investment advisory
firms; financial technology companies; real estate-related firms;
leasing firms; credit card companies; government sponsored financial
enterprises; investment companies; insurance brokerages; and
various firms in all segments of the insurance industry such as multi-
line property and casualty, life insurance companies and insurance
holding companies. The Fund Manager selects securities by
combining fundamental and quantitative research to identify securities
of financial services companies that are attractively priced relative to
their expected returns. Its research analysts employ a long-term
approach to forecasting the earnings and growth potential of
companies and attempt to construct global portfolios that produce
maximum returns at a given risk level.
</TABLE>
25
<PAGE> 127
<TABLE>
<S> <C>
Principal Risks The Fund invests primarily in common stocks of domestic and foreign companies.
As a result, the Fund is subject to the risk that stock prices will fall
over short or extended periods of time. Stock markets tend to move
in cycles, with periods of rising prices and periods of falling prices.
This price volatility is a principal risk of investing in the Fund. In
addition, investments in foreign markets may be more volatile than
investments in U.S. markets. Diplomatic, political or economic
developments may cause foreign investments to lose money. The
value of the U.S. dollar may rise, causing reduced returns for U.S.
persons investing abroad. A foreign country may not have the same
accounting and financial reporting standards as the U.S. Foreign
stock markets, brokers and companies are generally subject to less
supervision and regulation than their U.S. counterparts. Emerging
markets securities may be even more susceptible to these risks.
Because the Fund concentrates in a single sector, its performance is
largely dependent on the sector's performance, which may differ
from that of the overall stock market. Generally, the financial
services industry is extremely sensitive to fluctuations in interest rates.
Moreover, while rising interest rates will cause a decline in the value
of any debt securities the Fund holds, falling interest rates or
deteriorating economic conditions can adversely affect the
performance of financial services companies' stock. Both foreign and
domestic financial services companies are affected by government
regulation or market intervention, which may limit their activities and
affect their profitability. Some financial services companies, e.g.,
insurance companies, are subject to severe market share competition
and price competition.
</TABLE>
Fees and Expenses
This table describes the shareholder fees that you may pay if you
purchase or redeem Fund shares. Every mutual fund has operating expenses to pay
for professional advisory, shareholder, distribution, administration and custody
services. The Fund's expenses in the table above are shown as a percentage of
the Fund's net assets. These expenses are deducted from Fund assets. The table
shows the highest expenses that could be currently charged to the Fund.
<TABLE>
<S> <C>
Shareholder Fees (paid directly from your investment in the fund) Class Y
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) None
Maximum Deferred Sales Charge (Load) None
(as a percentage of net asset value)
</TABLE>
26
<PAGE> 128
<TABLE>
<S> <C>
Annual Fund Operating Expenses (paid indirectly if you hold fund shares)
Investment Advisory Fees 0.85%
Distribution and Service (12b-1) Fees 0.45%
Other Expenses [ ]
--------
Total Annual Fund Operating Expenses (1) [ ]
</TABLE>
1. Actual Expenses are lower because the Advisor is voluntarily
reimbursing the Fund for some of its expenses. If these reimbursements
are taken into account, Other Expenses and Total Operating Expenses for
Class Y shares are:
Actual Other Expenses 0.45%
Actual Total Operating Expenses 1.30%
The Advisor could discontinue these voluntary reimbursements at any
time.
Example
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the Fund for the time periods indicated. The example
also assumes that each year your investment has a 5% return and Fund expenses
remain the same. Although your actual costs and returns may be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
If you redeem your shares at the end of the period:
Class Y $ $ $ $
If you do not redeem your shares:
Class Y $ $ $ $
</TABLE>
27
<PAGE> 129
GOVERNMENT SECURITIES FUND
FUND PROFILE
<TABLE>
<S> <C>
Investment Objective Current income and safety of principal
Principal Investments Securities that are obligations of the U.S. Government, its agencies
or instrumentalities
Fund Manager TCW Funds Management, Inc.
Investor Profile Conservative investors who want to receive income from their
investment
Investment Strategies The Government Securities Fund invests primarily in securities that
are obligations of the U.S. Government, its agencies or
instrumentalities. The Fund's investments may include securities
issued by the U.S. Treasury, such as treasury bills, treasury notes
and treasury bonds. In addition, the Fund may invest in securities
that are issued or guaranteed by agencies and instrumentalities of the
U.S. Government. Securities issued by agencies or instrumentalities
may or may not be backed by the full faith and credit of the United
States. Securities issued by the Government National Mortgage
Association ("GNMA Certificates") are examples of full faith and
credit securities. Agencies or instrumentalities whose securities are
not backed by the full faith and credit of the United States include
Federal National Mortgage Association (FANNIE MAE) and Federal Home Loan
Mortgage Corp. (FREDDIE MAC). To a limited extent, the Fund may invest in
mortgage-backed securities, including collateralized mortgage
obligations ("CMOs"). The Fund may concentrate from time to time
in different U.S. Government securities in order to obtain the highest
available level of current income and safety of principal.
</TABLE>
28
<PAGE> 130
<TABLE>
<S> <C>
Principal Risks The Government Securities Fund invests primarily in U.S.
Government debt securities. As a result, the Fund is subject to the
risk that the prices of debt securities will decline due to rising interest
rates. This risk is greater for long-term debt securities than for short-
term debt securities. To the extent that the Fund invests in
mortgage-backed securities, it is subject to additional risk. A
mortgage-backed security pools all interest and principal payments
from the underlying mortgages and pays it to the security's owner.
The mortgages underlying mortgage-backed securities may mature
or be paid off before the stated maturity date. This has a number of
drawbacks. First, the Fund may lose money on its investment.
Second, the monthly income payments to the Fund may fluctuate.
Third, the Fund cannot predict the maturity of its investment with
certainty. Fourth, the Fund would invest any resulting proceeds
elsewhere, generally at a lower interest rate.
</TABLE>
Performance Information
The bar chart and the performance table below illustrate the volatility
of an investment in the Fund, and give some indication of the risk. Of course,
the Fund's past performance does not necessarily indicate how the Fund will
perform in the future.
This bar chart shows changes in the performance of the Fund's Class Y
shares from year to year.
7.30%
1998
Best Quarter Worst Quarter
2.78% 0.63%
(September 30, 1998) (December 31, 1998)
<TABLE>
<CAPTION>
Average Annual Total Returns (as of the Past One Return
calendar year ended December 31, 1998) Year Since Inception (1)
- --------------------------------------- -------- -------------------
<S> <C> <C>
Enterprise Government Securities Fund
Class Y 7.30% 7.47%
Lehman Brothers Intermediate
Government Bond Index (2) 8.49% 8.09%
</TABLE>
1. Inception date for Class Y shares is July 31, 1997.
29
<PAGE> 131
2. This is an unmanaged broad-based index that includes all issues with
maturities of one to 9.99 years contained in the Lehman Brothers
Government Bond Index (this index includes all publicly held U.S.
Treasury debt or any governmental agency thereof, quasi-federal
corporation, or corporate debt guaranteed by the U. S. government
with a minimum maturity of one year and minimum outstanding par
amount of $1 million) and is constructed the same way. Average
weighted maturity is approximately four years. The index excludes
transaction and holding charges.
Fees and Expenses
This table describes the shareholder fees that you may pay if you
purchase or redeem Fund shares. Every mutual fund has operating expenses to pay
for professional advisory, shareholder, distribution, administration and custody
services. The Fund's expenses in the table above are shown as a percentage of
the Fund's net assets. These expenses are deducted from Fund assets. The table
shows the highest expenses that could be currently charged to the Fund.
<TABLE>
<S> <C>
Shareholder Fees (paid directly from your investment in the fund) Class Y
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) None
Maximum Deferred Sales Charge (Load)
(as a percentage of net asset value) None
Annual Fund Operating Expenses (paid indirectly if you hold fund shares)
Investment Advisory Fees 0.60%
Distribution and Service (12b-1) Fees None
Other Expenses %
--------
Total Annual Fund Operating Expenses(1) %
</TABLE>
1. Actual Expenses are lower because the Advisor is voluntarily
reimbursing the Fund for some of its expenses. If these reimbursements
are taken into account, Other Expenses and Total Operating Expenses for
Class Y shares are:
Actual Other Expenses 0.25%
Actual Total Operating Expenses 0.85%
The Advisor could discontinue these voluntary reimbursements at any
time.
30
<PAGE> 132
Example
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the Fund for the time periods indicated. The example
also assumes that each year your investment has a 5% return and Fund expenses
remain the same. Although your actual costs and returns may be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
If you redeem your shares at the end of the period:
Class Y $ $ $ $
If you do not redeem your shares:
Class Y $ $ $ $
</TABLE>
31
<PAGE> 133
HIGH-YIELD BOND FUND
FUND PROFILE
<TABLE>
<S> <C>
Investment Objective Maximum current income
Principal Investments Debt securities rated below investment grade, which are commonly
known as "junk bonds"
Fund Manager Caywood-Scholl Capital Management
Investor Profile Income-oriented investors who are willing to accept increased
risk for the possibility of greater returns through high-yield bond
investing.
Investment Strategies The High-Yield Bond Fund invests primarily in high-yielding,
income-producing corporate bonds rated B3 to Ba1 by Moody's
Investors Service, Inc. ("Moody's") or B- to BB+ by Standard
& Poor's Corporation ("S&P"), which are commonly known as
"junk bonds." The Fund's investments are selected by the
Fund Manager after careful examination of the economic
outlook to determine those industries that appear favorable
for investment. Industries going through a perceived decline
generally are not candidates for selection. After the
industries are selected, the Fund Manager identifies bonds of
issuers within those industries based on their
creditworthiness, their yields in relation to their credit
and the relative value in relation to the high-yield market.
Companies near or in bankruptcy are not considered for
investment. The Fund does not purchase bonds which are rated
Ca or lower by Moody's or CC or lower by S&P or which, if
unrated, in the judgment of the Fund Manager have
characteristics of such lower-grade bonds. Should an
investment be subsequently downgraded to Ca or lower or CC or
lower, the Fund Manager has discretion to hold or liquidate
the security. Subject to the restrictions described above,
under normal circumstances, up to 20% of the Fund's assets
may include: (1) bonds rated Caa by Moody's or CCC by S&P;
(2) unrated debt securities which, in the judgment of the
Fund Manager have characteristics similar to those described
above; (3) convertible debt securities; (4) puts, calls and
futures as hedging devices; (5) foreign issuer debt
securities; and (6) short-term money market instruments,
including certificates of deposit, commercial paper, U.S.
Government securities and other income-producing cash equivalents.
</TABLE>
32
<PAGE> 134
<TABLE>
<S> <C>
Principal Risks The Fund invests primarily in below investment-grade debt securities.
As a result, the Fund is subject to the risk that the prices of the debt
securities will decline due to rising interest rates. This risk is greater
for long-term debt securities than for short-term debt securities. A
high-yield bond's market price may fluctuate more than higher-quality
securities and may decline significantly. While the Fund Manager
tries to diversify the Fund's portfolio and to engage in a credit
analysis of each high-yield bond issuer in which it invests, high-yield bonds also
carry a substantial risk of default or changes in the issuer's
creditworthiness. In addition, it may be more difficult for the Fund to
dispose of high-yield bonds or to determine their value. High-yield bonds may
contain redemption or call provisions that, if exercised during a
period of declining interest rates, may force the Fund to replace the
security with a lower-yielding security. If this occurs, it will result in a
decreased return for shareholders.
</TABLE>
Performance Information
The bar chart and the performance table below illustrate the volatility
of an investment in the Fund and give some indication of the risk. Of course,
the Fund's past performance does not necessarily indicate how the Fund will
perform in the future.
This bar chart shows changes in the performance of the Fund's Class Y
shares from year to year.
2.49%
1998
Best Quarter Worst Quarter
4.32% -5.72%
(March 31, 1998) (September 30, 1998)
33
<PAGE> 135
<TABLE>
<CAPTION>
Average Annual Total Returns (as of the Past One Return Since
calendar year ended December 31, 1998) Year Inception(1)
- --------------------------------------- -------- ------------
<S> <C> <C>
Enterprise High-Yield Bond Fund
Class Y 2.49% 4.87%
Lehman Brothers High Yield BB Index(2) 5.13% 5.84%
</TABLE>
1. Inception date for Class Y shares is July 31, 1997.
2. This is an unmanaged broad-based index that includes fixed rate,
public nonconvertible issues that are rated Ba1 or lower by Moody's
Investor Service. If a Moody's rating is not available, the bonds must
be rated BB+ or lower by S&P, or by Fitch if an S&P rating is not
available. The index excludes transaction or holding charges.
Fees and Expenses
This table describes the shareholder fees that you may pay if you
purchase or redeem Fund shares. Every mutual fund has operating expenses to pay
for professional advisory, shareholder, distribution, administration and custody
services. The Fund's expenses in the table above are shown as a percentage of
the Fund's net assets. These expenses are deducted from Fund assets. The table
shows the highest expenses that could be currently charged to the Fund.
<TABLE>
<S> <C>
Shareholder Fees (paid directly from your investment in the fund) Class Y
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) None
Maximum Deferred Sales Charge (Load)
(as a percentage of net asset value) None
Annual Fund Operating Expenses (paid indirectly if you hold fund shares)
Investment Advisory Fees 0.60%
Distribution and Service (12b-1) Fees None
Other Expenses %
-----
Total Annual Fund Operating Expenses(1) %
</TABLE>
1. Actual Expenses are lower because the Advisor is voluntarily
reimbursing the Fund for some of its expenses. If these reimbursements
are taken into account, Other Expenses and Total Operating Expenses for
Class Y shares are:
Actual Other Expenses 0.25%
Actual Total Operating Expenses 0.85%
The Advisor could discontinue these reimbursements at any time.
34
<PAGE> 136
Example
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the Fund for the time periods indicated. The example
also assumes that each year your investment has a 5% return and Fund expenses
remain the same. Although your actual costs and returns may be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
If you redeem your shares at the end of the period:
Class Y $ $ $ $
If you do not redeem your shares:
Class Y $ $ $ $
</TABLE>
35
<PAGE> 137
TAX-EXEMPT INCOME FUND
FUND PROFILE
<TABLE>
<S> <C>
Investment Objective A high level of current income exempt from federal income tax,
with consideration given to preservation of principal
Principal Investments A diversified portfolio of long-term investment grade municipal bonds
Fund Manager MBIA Capital Management Corp.
Investor Profile Investors who want to receive tax-free current income and
maintain the value of their investment.
Investment Strategies The Tax-Exempt Income Fund invests primarily in investment grade,
tax-exempt obligations, like municipal securities. The issuers of these
securities may be located in any state, territory or possession of the
United States. In selecting investments for the Fund, the Fund
Manager tries to limit risk as much as possible. The Fund Manager
analyzes municipalities, their credit risk, market trends and
investment cycles. The Fund Manager attempts to identify and invest
in municipal issuers with improving credit and avoid those with
deteriorating credit. The Fund anticipates that its average weighted
maturity will range from 10 to 25 years. The Fund Manager will
actively manage the Fund, adjusting the average Fund maturity and
utilizing futures contracts and options on futures as a defensive
measure according to its judgment of anticipated interest rates.
During periods of rising interest rates and falling prices, the Fund
Manager may adopt a shorter weighted average maturity to cushion
the effect of bond price declines on the Fund's net asset value.
When rates are falling and prices are rising, the Fund Manager may
adopt a longer weighted average maturity rate. The Fund may also
invest up to 20% of its net assets in cash, cash equivalents and debt
securities, the interest from which may be subject to federal income
tax. Investments in taxable securities will be limited to investment
grade corporate debt securities and U.S. Government securities.
The Fund will not invest more than 20% of its net assets in municipal
securities, the interest on which is subject to the federal alternative
minimum tax.
</TABLE>
36
<PAGE> 138
<TABLE>
<S> <C>
Principal Risks The Fund invests primarily in long-term investment grade debt
securities. As a result, the Fund is subject to the risk that the prices
of debt securities will decline due to rising interest rates. This risk is
greater for long-term debt securities than for short-term debt
securities. Debt securities may decline in credit quality due to
economic or governmental events. In addition, an issuer may fail to
make timely payments of principal or interest to the Fund. Some
investment grade bonds may have speculative characteristics.
</TABLE>
37
<PAGE> 139
Fees and Expenses
This table describes the shareholder fees that you may pay if you
purchase or redeem Fund shares. Every mutual fund has operating expenses to pay
for professional advisory, shareholder, distribution, administration and custody
services. The Fund's expenses in the table above are shown as a percentage of
the Fund's net assets. These expenses are deducted from Fund assets. The table
shows the highest expenses that could be currently charged to the Fund.
<TABLE>
<S> <C>
Shareholder Fees (paid directly from your investment in the fund) Class Y
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) None
Maximum Deferred Sales Charge (Load) None
(as a percentage of net asset value)
Annual Fund Operating Expenses (paid indirectly if you hold fund Shares)
Investment Advisory Fees 0.50%
Distribution and Service (12b-1) Fees None
Other Expenses %
-------
Total Annual Fund Operating Expenses %
</TABLE>
1. Actual expenses are lower because the Advisor is voluntarily
reimbursing the Fund for some of its expenses. If these reimbursements
are taken into account, Other Expenses and Total Operating Expenses for
Class Y shares are:
Actual Other Expenses 0.15%
Actual Total Operating Expenses 0.65%
The Advisor could discontinue these voluntary reimbursements at any
time.
38
<PAGE> 140
Example
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example
assumes that you invest $10,000 in the Fund for the time periods indicated.
The example also assumes that each year your investment has a 5% return and
Fund expenses remain the same. Although your actual costs and returns may be
different, your approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
If you redeem your shares at the end of the period:
Class Y $ $ $ $
If you do not redeem your shares:
Class Y $ $ $ $
</TABLE>
39
<PAGE> 141
MANAGED FUND
<TABLE>
<CAPTION>
FUND PROFILE
<S> <C>
Investment Objective Growth of capital over time
Principal Investments Common stocks, bonds and cash equivalents, the percentages of which will vary
based on the Fund Manager's assessment of relative investment values
Fund Manager OpCap Advisors
Investor Profile Investors who want the value of their investment to grow but do not need to
receive income on their investment.
Investment Strategies The Managed Fund invests in a diversified portfolio of common stocks, bonds and
cash equivalents. The allocation of the Fund's assets among the different types
of permitted investments will vary from time to time based upon the Fund
Manager's evaluation of economic and market trends and its perception of the
relative values available from such types of securities at any given time.
There is neither a minimum nor a maximum percentage of the Fund's assets that
may, at any given time, be invested in any specific types of investments.
However, the Fund invests primarily in equity securities at times when the
Manager believes that the best investment values are available in the equity
markets. The Fund may invest almost all of its assets in high-quality short-
term money market and cash equivalent securities when the Fund Manager deems it
advisable to preserve capital. Consequently, while the Fund will earn income to
the extent it is invested in bonds or cash equivalents, the Fund does not have
any specific income objective. The bonds in which the Fund may invest will
normally be investment grade intermediate to long-term U.S. Government and
corporate debt.
</TABLE>
40
<PAGE> 142
<TABLE>
<S> <C>
Principal Risks The Fund invests in both common stocks and debt securities. As a result, the
Fund is subject to the risk that stock prices will fall over short or extended
periods of time. Stock markets tend to move in cycles, with periods of rising
prices and periods of falling prices. This price volatility is a principal risk
of investing in the Fund. In addition, the Fund is subject to the risk that the
prices of debt securities will decline due to rising interest rates. The risk
is greater for long-term debt securities than for short-term debt securities.
Debt securities may decline in credit quality due to economic governmental
events.
</TABLE>
Performance Information
The bar chart and the performance table below illustrate the
volatility of an investment in the Fund and give some indication of the risk.
Of course, the Fund's past performance does not necessarily indicate how the
Fund will perform in the future.
This bar chart shows changes in the performance of the Fund's Class Y
Shares from year to year.
<TABLE>
<CAPTION>
22.63% 21.6% 7.2%
1996 1997 1998
<C> <C> <C>
Best Quarter Worst Quarter
13.55% -14.53%
(June 30, 1997) (September 30, 1998)
</TABLE>
<TABLE>
<S> <C> <C>
Average Annual Total Returns (as of
the calendar year ended December Past One Return Since
31, 1998) Year Inception(1)
Enterprise Managed Fund Class Y 7.20% 17.21%
S&P 5002 28.57% 28.08%
</TABLE>
1. Inception date for Class Y shares is July 31, 1995.
2. This unmanaged broad-based index is comprised of industrial, public
utility, financial and transportation stocks with income reinvested.
An index does not have an investment advisor and does not pay
commissions or expenses. If an index had expenses, its performance
would be lower.
41
<PAGE> 143
Fees and Expenses
This table describes the shareholder fees that you may pay if you
purchase or redeem Fund shares. Every mutual fund has operating expenses to
pay for professional advisory, shareholder, distribution, administration and
custody services. The Fund's expenses in the table above are shown as a
percentage of the Fund's net assets. These expenses are deducted from Fund
assets. The table shows the highest expenses that could be currently charged
to the Fund.
<TABLE>
<S> <C>
Shareholder Fees (paid directly from your investment in the fund) Class Y
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) None
Maximum Deferred Sales Charge (Load)
(as a percentage of net asset value) None
Annual Fund Operating Expenses (paid indirectly if you hold fund shares)
Investment Advisory Fees 0.75%
Distribution and Service (12b-1) Fees None
Other Expenses %
----
Total Annual Fund Operating Expenses %
</TABLE>
Example
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example
assumes that you invest $10,000 in the Fund for the time periods indicated.
The example also assumes that each year your investment has a 5% return and
Fund expenses remain the same. Although your actual costs and returns may be
different, your approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
If you redeem your shares at the end of the period:
Class Y $ $ $ $
If you do not redeem your shares:
Class Y $ $ $ $
</TABLE>
42
<PAGE> 144
MONEY MARKET FUND
Fund Profile
<TABLE>
<S> <C>
Investment Objective The highest possible level of current income consistent with preservation of
capital and liquidity
Principal Investments High quality, short-term debt securities, commonly known as money market
instruments
Fund Manager Enterprise Capital Management, Inc.
Investor Profile Investors who seek an income producing investment with emphasis on preservation
of capital.
Investment Strategies The Money Market Fund invests in a diversified portfolio of high quality dollar-
denominated money market instruments which present minimal credit risks in the
judgment of the Fund Manager. The Fund Manager actively manages the Fund's
average maturity based on current interest rates and its outlook of the market.
Principal Risks Although the Money Market Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the Fund.
</TABLE>
<PAGE> 145
Fees and Expenses
This table describes the shareholder fees that you may pay if you
purchase or redeem Fund shares. Every mutual fund has operating expenses to
pay for professional advisory, shareholder, distribution, administration and
custody services. The Fund's expenses in the table above are shown as a
percentage of the Fund's net assets. These expenses are deducted from Fund
assets. The table shows the highest expenses that could be currently charged
to the Fund.
<TABLE>
<S> <C>
Shareholder Fees (paid directly from your investment in the fund) Class Y
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) None
Maximum Deferred Sales Charge (Load)
(as a percentage of net asset value) None
Annual Fund Operating Expenses (paid indirectly if you hold fund shares)
Investment Advisory Fees 0.35%
Distribution and Service (12b-1) Fees None
Other Expenses %
------
Total Annual Fund Operating Expenses1 %
</TABLE>
1. Actual expenses are lower because the Advisor is voluntarily
reimbursing the Fund for some of its expenses. If these
reimbursements are taken in account, Other Expenses and Total
Operating Expenses for Class Y shares are:
<TABLE>
<S> <C>
Actual Other Expenses 0.35%
Actual Total Operating 0.70%
Expenses
</TABLE>
The Advisor could discontinue these voluntary reimbursements at any
time.
44
<PAGE> 146
Example
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example
assumes that you invest $10,000 in the Fund for the time periods indicated.
The example also assumes that each year your investment has a 5% return and
Fund expenses remain the same. Although your actual costs and returns may be
different, your approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
If you redeem your shares at the end of the period:
Class Y $ $ $ $
If you do not redeem your shares:
Class Y $ $ $ $
</TABLE>
45
<PAGE> 147
ADDITIONAL INFORMATION ABOUT THE FUNDS' INVESTMENTS AND RISKS
Equity and Flexible Funds' Investments
The table below shows the Equity and Flexible Funds' principal investments. In
other words, the table describes the type or types of investments that
Enterprise believes will most likely help each Fund achieve its
investment goal.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
EQUITY FUNDS FLEXIBLE
FUND
- --------------------------------------------------------------------------------------------------------------------------
Small Small Global
Growth & Equity Capital Company Company International Financial
Growth Income Equity Income Appreciation Growth Value Growth Services Managed
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Stocks - - - - - - - - -
Foreign Stocks - -
Bonds -
</TABLE>
________________________
(1) Each Fund that invests in U.S. stocks may invest in large
capitalization companies, medium capitalization companies and small
capitalization companies. Large Capitalization Companies generally,
have market capitalizations of more than $5 billion. Medium
capitalization companies generally have market capitalizations ranging
from $1 billion to $5 billion. Small capitalization companies generally
have market capitalizations of $1 billion or less. However, there may
be some overlap among capitalization categories. The Growth and Income
Fund intends to invest primarily in stocks of large-capitalization
companies. The Small Company Growth Fund and the Small Company Value
Fund intend to invest primarily in the stocks of small-capitalization
issuers.
Each Fund also may invest in other securities, use other strategies and engage
in other investment practices, which are described in detail in the Statement of
Additional Information. Of course, Enterprise cannot guarantee that any Fund
will achieve its investment goal.
The investments listed above and the investments and strategies described
throughout this Prospectus are those that a Fund may use under normal
conditions. During unusual economic or market conditions or for temporary
defensive or liquidity purposes, each Fund may invest up to 100% of its assets
in cash, money market instruments, repurchase agreements and short-term
obligations. When a Fund is investing for temporary defensive purposes, it is
not pursuing its investment goal.
46
<PAGE> 148
Income Funds' Investments
The table below shows the Income Funds' principal investments. In other words,
the table describes the type or types of investments that Enterprise believes
will most likely help each Fund achieve its investment goal.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Government Securities High-Yield Bond Tax-Exempt Income
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Government Securities o
- --------------------------------------------------------------------------------------------------------------------------
Corporate Debt Securities
High-Yield Bonds o
- --------------------------------------------------------------------------------------------------------------------------
Mortgage-Backed Securities o
- --------------------------------------------------------------------------------------------------------------------------
Municipal Securities o
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
__________________
(1) "Junk Bond" refers to any security rated lower than "Baa" by Moody's
Investor Service. If a Moody's rating is not available, then bonds must
be rated lower than "BBB" by Standard & Poor's.
Each Fund also may invest in other securities, use other strategies and engage
in other investment practices, which are described in detail in the Statement of
Additional Information. Of course, Enterprise cannot guarantee that any Fund
will achieve its investment goal.
The investments listed above and the investments and strategies described
throughout this Prospectus are those that a Fund may use under normal
conditions. During unusual economic or market conditions or for temporary
defensive or liquidity purposes, each Fund may invest up to 100% of its assets
in cash, money market instruments, repurchase agreements and short-term
obligations. When a Fund is investing for temporary defensive purposes, it is
not pursuing its investment goal.
47
<PAGE> 149
Money Market Fund's Investments
The Money Market Fund's principal investments include: bank obligations,
commercial paper and corporate obligations. The Fund also may invest in other
securities, use other strategies and engage in other investment practices, which
are described in detail in the Statement of Additional Information. Of course,
Enterprise cannot guarantee that the Fund will achieve its investment goal.
48
<PAGE> 150
This table shows each Fund's investment limitations as a percentage of portfolio
assets. In each case the principal types of risk are listed (see page ____ for
definitions).
- --------------------------------------------------------------------------------
5 Percent of total assets (italic type)
5 Percent of net assets (roman type)
* No policy limitation on usage; fund may be using currently
0 Permitted, but not typically used.
- - Not permitted
- --------------------------------------------------------------------------------
Conventional Securities
- --------------------------------------------------------------------------------
Non-Investment-Grade Securities. Securities rated below BBB/Baa are considered
junk bonds. Credit, market, interest rate, liquidity, valuation, information
risks.
- --------------------------------------------------------------------------------
Foreign Equities.
- - Stocks issued by foreign companies. Market, currency, information,
natural event, political risks.
- - American or European depository receipts, which are dollar-denominated
securities typically issued by American or European banks and are based
on ownership of securities issued by foreign companies. Market,
currency, information, natural event, political risks.
- --------------------------------------------------------------------------------
Restricted And Illiquid Securities. Securities not traded on the open market.
May include illiquid Rule 144A securities. Liquidity, valuation, market risks.
- --------------------------------------------------------------------------------
Investment Practices
- --------------------------------------------------------------------------------
Repurchase Agreements. The purchase of a security that must later be sold back
to the seller at the same price plus interest. Credit risk.
- --------------------------------------------------------------------------------
Securities Lending. The lending of securities to financial institutions, which
provide cash or government securities as collateral. Credit risk.
- --------------------------------------------------------------------------------
Short Sales. The selling of securities which have been borrowed on the
expectation that the market price will drop.
- - Hedged. Hedged leverage, market, correlation, liquidity,
opportunity risks.
- - Speculative. Speculative leverage, market, liquidity risks.
- --------------------------------------------------------------------------------
Short-Term Trading. Selling a security soon after purchase. A Fund engaging in
short-term trading will have higher turnover, brokerage commissions and
transaction expenses. Short-term trading may also have tax consequences,
involving a possible increase in short-term capital gains or losses. Market
risk.
- --------------------------------------------------------------------------------
When-Issued Securities and Forward Commitments. The purchase or sale of
securities for delivery at a future date; market value may change before
delivery. Market, opportunity, leverage risks.
- --------------------------------------------------------------------------------
Leveraged Derivative Securities. The Funds will not invest in derivatives for
speculative purposes, but only as a hedge against changes in the values of the
Funds' securities resulting from market conditions.
- --------------------------------------------------------------------------------
Financial Futures and Options; Securities and Index Options. Contracts involving
the right or obligation to deliver or receive assets or money depending on the
performance of one or more assets or an economic index.
- - Futures and related options. Interest rate, currency, market,
leverage, correlation, liquidity, opportunity risks.
- - Options on securities and indices. Interest rate, currency, market,
hedged or speculative leverage, correlation, liquidity, credit,
opportunity risks.
- --------------------------------------------------------------------------------
Currency Contracts. Contracts involving the right or obligation to buy or sell a
given amount of foreign currency at a specified price and future date.
- --------------------------------------------------------------------------------
Hedged. Currency, hedged leverage, correlation, liquidity, opportunity risks.
- --------------------------------------------------------------------------------
Speculative. Currency, speculative leverage, liquidity risks.
- --------------------------------------------------------------------------------
Other Derivatives, Including Puts, Calls and Interest Rate Swaps. Interest rate,
currency, market, hedged or speculative leverage, correlation, liquidity,
credit, opportunity risks.
- --------------------------------------------------------------------------------
49
<PAGE> 151
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
GLOBAL HIGH- TAX-
GROWTH & EQUITY CAPITAL SMALL SMALL FINANCIAL GOVERNMENT YIELD EXEMPT MONEY
GROWTH INCOME EQUITY INCOME APPRECIATION COMPANY COMPANY INTERNATIONAL SERVICES MANAGED SECURITIES BOND INCOME MARKET
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0 0 0 0 0 * 0 0
- ----------------------------------------------------------------------------------------------------------------------------
- - - - - - - - * * - - - - -
- ----------------------------------------------------------------------------------------------------------------------------
20 20 20 20 20 20 20 * * 20 - - - -
- ----------------------------------------------------------------------------------------------------------------------------
10 10 10 10 10 10 10 10 10 10 10 10 10 10
- ----------------------------------------------------------------------------------------------------------------------------
5 5 5 5 5 5 5 5 5 5 5 5 5 5
- ----------------------------------------------------------------------------------------------------------------------------
- - - - - - - - - - - - - - -
- ----------------------------------------------------------------------------------------------------------------------------
- - - - - - - - - - - - - - -
- ----------------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0 0 0 0 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0 0 0 0 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------
10 10 10 10 10 10 10 10 10 10 10 10 10 10
- ----------------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0
- - - - - - - - - - - - - - -
- ----------------------------------------------------------------------------------------------------------------------------
- - - - - - - - - - - - - - -
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
50
<PAGE> 152
Risk Terminology
Correlation Risk: The risk that changes in the value of hedging instrument will
not match those of the asset being hedged (hedging is the use of one investment
to offset the effects of another investment). Incomplete correlation can
result in unanticipated risks.
Credit Risk: The risk that the issuer of a security, or the counterparty to a
contract, will default or otherwise become unable to honor a financial
obligation.
Currency Risk: The risk that fluctuations in the exchange rates between the
U.S. dollar and foreign currencies may negatively affect an investment.
Adverse changes in exchange rates may erode or reverse any gains produced by
foreign currency denominated investments and may widen any losses.
Information Risk: The risk that key information about a security or market is
inaccurate or unavailable.
Interest Rate Risk: The risk of market losses attributable to changes in
interest rates. With fixed-rate securities, a rise in interest rates typically
cause a fall in values, while a fall in rates typically causes a rise in
values.
Leverage Risk: Associated with securities or practices (such as borrowing) that
multiply small index or market movements into large changes in value.
Hedged. When a derivative (a security whose value is based on another
security or index) is used as a hedge against an opposite position that a
Fund also holds, any loss generated by the derivative should be
substantially offset by gains on the hedged investment, and vice versa.
While hedging can reduce or eliminate losses, it can also reduce or
eliminate gains.
Speculative. To the extent that a derivative is not used as a hedge, a Fund
is directly exposed to the risks of that derivative. Gains or losses from
speculative portions in a derivative may be substantially greater than the
derivative's original cost.
Liquidity Risk: The risk that certain securities may be difficult or impossible
to sell at the time and the price that the seller would like. The seller may
have to lower the price, sell other securities instead or forego an investment
opportunity, any of which could have a negative effect on Fund management or
performance.
Market Risk: The risk that the market value of a security may move up or down,
sometimes rapidly and unpredictably. These fluctuations may cause a security
to be worth less than the price originally paid for it, or less than it was
worth at an earlier time. Market risk may affect a single issuer, industry,
sector of the economy or the market as a whole. Common to all stocks and bonds
and the mutual funds that invest in them.
Natural Event Risk: The risk of losses attributable to natural disasters, crop
failures and similar events.
Opportunity Risk: The risk of missing out on an investment opportunity because
the assets necessary to take advantage of it are tied up in less advantageous
investments.
Political Risks: The risk of losses attributable to government or political
actions, from changes in tax or trade statutes to governmental collapse and
war.
51
<PAGE> 153
Valuation Risk: The risk that a Fund has valued certain of its securities at a
higher price than it can sell them for.
52
<PAGE> 154
SHAREHOLDER ACCOUNT INFORMATION
Class Y Shares
Each Fund offers Class Y shares through this prospectus for the
minimum initial purchase amount of $1,000,000. Class Y shares do not bear a
sales charge or distribution fee. Class Y shares are offered exclusively for
sale to institutional investors, including banks, savings institutions, trust
companies, insurance companies, investment companies registered under the
Investment Company Act of 1940, pension or profit sharing trusts, certain wrap
account clients of broker/dealers, former shareholders of Retirement System
Fund, Inc. ("RS Fund"), direct referrals of Fund Managers or Evaluation
Associates, Inc. ("EAI") or other financial institutional buyers. Wrap account
clients of broker/dealers, former RS Fund shareholders, and direct referrals of
Fund Managers or EAI are offered Class Y shares at a lower minimum purchase
amount.
Enterprise Fund Distributors, Inc., a subsidiary of Enterprise Capital
Management, Inc., the Advisor to the Funds, is the principal underwriter for
shares of the Funds.
PURCHASING, REDEEMING AND EXCHANGING SHARES
The charts below summarize how to purchase, redeem and exchange shares
of the Funds.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
How to Purchase Shares Important Information about Purchasing Shares
- -----------------------------------------------------------------------------------------------------------------------
<S> <C>
Select the Fund appropriate for you Be sure to read this prospectus carefully.
- -----------------------------------------------------------------------------------------------------------------------
Have your securities dealer submit your The price of your shares is based on the next calculation of net asset
purchase order value after your order is received by the Enterprise Shareholder Services
Division of the Transfer Agent. All purchases made by check should be in
U.S. dollars and made payable to The Enterprise Group of Funds, Inc., or
in the case of a retirement account, the custodian or trustee. Third-
party checks will not be accepted.
- -----------------------------------------------------------------------------------------------------------------------
Acquire additional shares through the Dividends and capital gains distributions may be automatically reinvested
Automatic Reinvestment Plan in the same Class of shares without a sales charge.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
53
<PAGE> 155
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------
Participate in the Automatic Investment You may have your shares automatically invested on a monthly basis into
Plan the same Class of one or more of the Funds. As long as you maintain a
balance of $1,000 in the account from which you are transferring your
shares, you may transfer $50 or more to an established account in an
Enterprise Fund or you may open a new account with $100 or more.
- -----------------------------------------------------------------------------------------------------------------------
Participate in a Retirement Plan You may use shares of the Funds to establish a Profit Sharing Plan,
Money Purchase Plan, Conventional IRA, Roth IRA, Educational IRA, other
retirement plans funded by shares of a Fund and other investment plans
which have been approved by the Internal Revenue Service.
The Distributor pays the cost of these plans, except for the retirement
plans, which charge an annual custodial fee of $10. If you would like to
find out more about these plans, please contact the Transfer Agent.
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
How to Redeem Your Shares Important Information about Redeeming Your Shares
Have your investment dealer submit your The redemption price of your shares is based on the next calculation of
sales order net asset value after your order is received.
- -----------------------------------------------------------------------------------------------------------------------
Call the Transfer Agent at You may redeem your shares by telephone if you have authorized this
1-800-368-3527 service. If you make a telephone redemption request, you must furnish:
- the name and address of record of the
registered owner,
- the account number,
- the amount to be withdrawn, and
- the name of the person making the request.
Checks for telephone redemptions will be issued only to the registered
shareowner(s) and mailed to the last address of record or exchanged into
another Fund. All telephone redemption instructions are recorded and are
limited to requests of $50,000 or less.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
54
<PAGE> 156
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------
How to Redeem Your Shares Important Information about Redeeming Your Shares
- -----------------------------------------------------------------------------------------------------------------------
Write the Transfer Agent at Enterprise You may redeem your shares by sending in a written request. If you own
Shareholder Services share certificates, they must accompany the written request. You must
P.O. Box 419731 obtain a signature guarantee if:
Kansas City, MO - the redemption proceeds exceed $50,000,
64141-6731 - the proceeds are to be sent to an address other than the
address of record, or
- the proceeds are to be sent to a person other than
the registered holder.
You can generally obtain a signature guarantee from the following sources:
- a member firm of a domestic securities exchange;
- a commercial bank;
- a savings and loan association;
- a credit union; or
- a trust company.
Corporations, executors, administrators, trustees or guardians may need to
include additional documentation with a request to redeem shares and a
signature guarantee.
- -----------------------------------------------------------------------------------------------------------------------
Payment of Proceeds Generally The Funds normally will make payment of redemption proceeds within seven
days after your request has been properly made and received. [When
purchases are made by check or periodic account investment, redemption
proceeds may not be available until the investment being redeemed has been
in the account for seven calendar days.] The Funds may suspend the redemption
privilege or delay sending redemption proceeds for more than seven days during
any period when the New York Stock Exchange is closed or an emergency
warranting such action exists as determined by the Securities and Exchange
Commission.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
55
<PAGE> 157
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------
How to Redeem Your Shares Important Information about Redeeming Your Shares
- -----------------------------------------------------------------------------------------------------------------------
Receipt of Proceeds By Wire For a separate $15 charge, you may request that your redemption proceeds
of $250,000 or less be wired. If you submit a written request, your
proceeds may be wired to any bank. If you authorize the Transfer Agent to
accept telephone wire requests, any authorized person may make such
requests at 1-800-368-3527. However, on a telephone request, your
proceeds may be wired only to a bank previously designated by you in
writing. If you have authorized expedited wire redemption, shares can be
sold and the proceeds sent by federal wire transfer to a single,
previously designated bank account. Otherwise, proceeds normally will be
sent to the designated bank account the following business day. To change
the name of the single designated bank account to receive wire redemption
proceeds, you must send a written request with signature(s) guaranteed to
the Transfer Agent.
- -----------------------------------------------------------------------------------------------------------------------
Participate in the Bank Purchase and You may initiate an Automatic Clearing House (ACH) Purchase or Redemption
Redemption Plan directly to a bank account when you have established proper instructions,
including all applicable bank information, on the account.
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
How to Exchange Your Shares Important Information about Exchanging Your Shares
- -----------------------------------------------------------------------------------------------------------------------
Select the Fund into which you want to You can exchange your shares of a Fund for the same Class of shares of any
exchange. Be sure to read the other Fund.
prospectus describing the Fund into
which you want to exchange. If you are not subject to the minimum investment requirement of
$1,000,000, and your exchange results in the opening of a new account in a
Fund, you are subject to the minimum investment requirement of $1,000.
Original investments in the Money Market Fund which are transferred to
other Funds are considered purchases rather than exchanges.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
56
<PAGE> 158
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------
How to Exchange Your Shares Important Information about Exchanging Your Shares
- -----------------------------------------------------------------------------------------------------------------------
Call the Transfer Agent at If you authorize the Transfer Agent to act upon telephone exchange
1-800-368-3527 requests, you or anyone who can provide the Transfer Agent with account
registration information may exchange by telephone.
If you exchange your shares by telephone, you must furnish:
- the name of the Fund you are exchanging from,
- the name and address of the registered owner,
- the account number,
- the dollar amount or number of shares to be exchanged,
- the Fund into which you are exchanging, and
- the name of the person making the request.
- -----------------------------------------------------------------------------------------------------------------------
Write the Transfer Agent at To exchange by letter, you must state:
Enterprise Shareholder Services - the name of the Fund you are exchanging from,
P.O. Box 419731 - the account name(s) and address,
Kansas City, MO - the account number,
64141-6731 - the dollar amount or number of shares to be exchanged, and
- the Fund into which you are exchanging.
You must also sign your name(s) exactly as it appears on your account
statement.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
TRANSACTION AND ACCOUNT POLICIES
Valuation of Shares
When you purchase shares, you pay the net asset value. When you
redeem your shares, you receive the net asset value. The Funds calculate a
share's net asset value by dividing net assets of each Class by the total
number of outstanding shares of such Class.
The Funds calculate net asset value at the close of regular trading
(generally 4:00 p.m. Eastern time) on each day the New York Stock Exchange is
open.
Except with respect to the Money Market Fund, 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 sale price on the exchange on which the security is
primarily traded. If there are no current day 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 values 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.
57
<PAGE> 159
The Money Market Fund seeks to maintain a constant net asset value per share of
$1.00, but there can be no assurance that the Money Market Fund will be able to
do so.
Because Class Y shares are not subject to any distribution or service
fees, the net asset value per share of the Class Y shares will generally be
higher than the net asset value per share of Class A, Class B and Class C
shares of each Fund, except following payment of dividends and distributions.
Execution of Requests
The net asset value used in determining your purchase, redemption or
exchange price is the one next calculated after your order is received by the
Fund.
The Distributor or the Fund may reject any order. From time to time, the
Funds may suspend the sale of shares. In such event, existing shareholders
normally will be permitted to continue to purchase additional shares of the
same Class and to have dividends reinvested.
The Funds normally pay redemption proceeds in cash. However, if a Fund
determines that it would be detrimental to the best interests of the remaining
shareholders of the Fund to make payment of redemption proceeds wholly or
partly in cash, the Fund may pay the redemption price in securities (redemption
in kind), in which case, you would probably have to pay brokerage costs to sell
the securities distributed to you, as well as taxes on any capital gains from
the sale as with any redemption. The Funds have made an election that requires
them to pay $250,000 of redemption proceeds in cash, subject to other
restrictions as described in the Statement of Additional Information.
Telephone Transactions
If you elect to exchange or redeem your shares by telephone, you are
subject to the risk that neither the Funds nor the Transfer Agent will be
liable for properly acting upon unauthorized telephone instructions believed to
be genuine. The Funds use reasonable procedures to confirm that telephone
instructions are genuine. However, if appropriate measures are not taken, the
Funds may be liable for any losses that may occur to an account due to an
unauthorized telephone call.
Exchanges
The Funds may refuse to allow the exercise of the exchange privilege in
less than two-week intervals or may restrict an exchange from any Fund until
shares have been held in that Fund for at
58
<PAGE> 160
least seven days. The Funds may also discontinue or modify the exchange
privilege on a prospective basis at any time, including a modification of the
amount or terms of a service fee, upon notice to shareholders in accordance
with applicable rules adopted by the Securities and Exchange Commission
("SEC"). Your exchange may be processed only if the shares of the Fund to be
acquired are eligible for sale in your state and if the exchange privilege may
be legally offered in your state.
In addition, if a Fund determines that an investor is using market timing
strategies or making excessive exchanges and immediate loss of redemption
proceeds would harm the Fund, the Fund may delay investment of the proceeds of
such investor's exchange request for up to seven days.
Share Certificates
The Funds do not ordinarily issue certificates representing shares of the
Funds. Instead, shares are held on deposit for shareholders by the Funds'
Transfer Agent, which will send you a statement of shares owned in each Fund
following each transaction in your account. If you wish to have certificates
for your shares, you may request them from the Transfer Agent by writing to
Enterprise Shareholder Services, P.O. Box 419731, Kansas City, Mo. 64141-6731.
The Funds do not issue certificates for fractional shares. You may redeem or
exchange certificated shares only by returning the certificates to the Fund,
along with a letter of instruction and a signature guarantee. Special
shareholder services such as telephone redemptions, exchanges, electronic funds
transfers and wire orders are not available if you hold certificates.
Small Accounts
For accounts with balances under $1,000, an annual service charge of $25
per account registration per Fund will apply, excluding Automatic Bank Draft
Plan Accounts, Automatic Investment Plan Accounts, Retirement Accounts and
Savings Plan Accounts.
If your account balance drops to $500 or less, a Fund may close out your
account and mail you the proceeds. You will always be given at least 45 days'
written notice to give you time to add to your account and avoid redeeming your
shares.
Dealer Compensation
The Distributor will provide additional compensation to dealers in
connection with sales of shares of the Funds and other mutual funds distributed
by the Distributor including promotional gifts (which may include gift
certificates, dinners and other items), financial assistance to dealers in
connection with conferences, sales or training programs for their employees,
seminars for the public and advertising campaigns. In some instances, these
incentives may be made available only to dealers whose representatives have
sold or are expected to sell significant amounts of shares.
In addition to distribution and service fees paid the Funds under plans of
distribution for Class A, Class B and Class C, the Distributor (or one of its
affiliates) may make payments to dealers
59
<PAGE> 161
(including MONY Securities Corp.) and other persons which distribute shares of
the Funds (including Class Y shares). Such payments may be calculated by
reference to the net asset value of shares sold by such persons or otherwise.
Dividends, Distributions and Taxes
Each Fund will distribute substantially all of its net investment income
and realized net capital gains, if any.
Each Fund makes distributions of capital gains, if any, annually. Each
Fund declares and pays dividends of investment income according to the
following schedule:
<TABLE>
<S> <C> <C>
Declared and Paid Annually Declared and Paid Semi-Annually Declared and Paid Monthly
- --------------------------------------------------------------------------------------------------------------
Growth Fund Equity Income Fund Government Securities Fund
Growth and Income Fund High-Yield Bond Fund
Equity Fund Tax-Exempt Income Fund
Capital Appreciation Fund Money Market Fund
Small Company Growth Fund
Small Company Value Fund
International Growth Fund
Global Financial Services Fund
Managed Fund
</TABLE>
Your dividends and capital gains distributions, if any, will be
automatically reinvested in shares of the same Fund and Class on which they
were paid at net asset value. Such reinvestments automatically occur on the
payment date of such dividends and capital gains distributions.
Alternatively, if you contact the Transfer Agent, you may elect to receive
dividends or capital gains distributions, or both, in cash.
You will pay tax on dividends and distributions from the Funds whether you
receive them in cash or additional shares. The Funds intend to make
distributions that will either be taxed as ordinary income or capital gains.
If, for any taxable year, a Fund distributes income from
60
<PAGE> 162
dividends from domestic corporations, and complies with certain requirements,
corporations may be entitled to take a dividends - received deduction for some
or all of the dividends they receive.
If you redeem shares of a Fund or exchange them for shares of another
Fund, unless you are a dealer, you generally will recognize capital gain or
loss on the transaction. Any such gain or loss will be a long-term capital
gain or loss, taxable if you held such shares for more than 12 months. The
maximum long-term capital gain tax rate for individuals is 20%.
Income received by the Funds from investments in securities issued by
foreign issuers may give rise to withholding and other taxes imposed by foreign
countries. Tax conventions between certain countries and the United States may
reduce or eliminate such taxes.
If you are neither a lawful permanent resident nor a citizen of the U.S.
or if you are a foreign entity, the Funds' ordinary income dividends (which
include distributions of net short term capital gains) will generally be
subject to a 30% U.S. withholding tax, unless a lower treaty rate applies.
The Funds are required to withhold 31% ("Back-Up Withholding") of the
distributions and the proceeds of redemptions payable to shareholders who fail
to provide a correct social security or taxpayer identification number or to
make required certifications, or who have been notified by the Internal Revenue
Service that they are subject to Back-up Withholding. Corporate shareholders and
certain other shareholders specified in the IRC are exempt from Back-Up
Withholding.
Dividends derived from interest on municipal securities and designated by
the Tax-Exempt Income Fund as exempt interest dividends by written notice to
the shareholders, under existing law, are not subject to federal income tax.
Dividends derived from net capital gains realized by the Fund are taxable to
shareholders as a capital gain upon distribution. Any short-term capital gains
or any taxable interest income or accrued market discount realized by the Fund
will be distributed as a taxable ordinary income dividend distribution. These
rules apply whether such distribution is made in cash or in additional shares.
Any capital loss realized from shares held for six months or less is disallowed
to the extent of tax-exempt dividend income received.
Income from certain "private activity" bonds issued after August 7, 1986,
are items of tax preference for the corporate and individual alternative
minimum tax. If the Tax-Exempt Income Fund invests in private activity bonds,
you may be subject to the alternative minimum tax on that part of such Fund
distributions derived from interest income on those bonds. The receipt of
exempt interest dividends also may have additional tax consequences. Certain
of these are described in the Statement of Additional Information.
The treatment for state and local tax purpose of distributions from the
Tax-Exempt Income Fund representing Municipal Securities interests will vary
according to the laws of state and local taxing authorities.
61
<PAGE> 163
The foregoing summarizes some of the federal income tax considerations
with respect to the Funds and their shareholders. It is not a substitute for
personal tax advice. You should consult your tax advisor for more information
regarding the potential tax consequences of an investment in the Funds under
all applicable tax laws.
The Funds will mail statements indicating the tax status of your
distributions to you annually.
FUND MANAGEMENT
The Investment Advisor
Enterprise Capital Management, Inc. serves as the investment advisor to
each of the Funds. The Advisor selects Fund Managers for the Funds, subject to
the approval of the Board of Directors of the Funds, and reviews their
continued performance. Evaluation Associates, Inc., which has had 26 years of
experience in evaluating investment advisors for individuals and institutional
investors, assists the Advisor in selecting Fund Managers. The Advisor also
provides various administrative services and acts as Fund Manager for the Money
Market Fund.
The Securities and Exchange Commission has issued an exemptive order that
permits the Advisor to enter into or amend Agreements with Fund Managers
without obtaining shareholder approval each time. The exemptive order permits
the Advisor, with Board approval, to employ new Fund Managers for the Funds,
change the terms of the Agreements with Fund Managers or enter into a new
Agreement with a Fund Manager. Shareholders of a Fund have the right to
terminate an agreement with a Fund Manager at any time by a vote of the
majority of the outstanding voting securities of such Fund. The Fund will
notify shareholders of any Fund Manager changes or other material amendments to
the Agreements with Fund Managers that occur under these arrangements.
The Advisor, which was incorporated in 1986, served as principal investment
advisor to Alpha Fund, Inc., the predecessor of the Fund's Growth Fund. The
Advisor also serves as investment advisor to Enterprise Accumulation Trust which
had assets of $[ ] billion at March 31, 1999. The Advisor's address is Atlanta
Financial Center, 3343 Peachtree Road, N.E., Suite 450, Atlanta, Georgia 30326.
The following table sets forth the fee paid to the Advisor for the fiscal
year ended December 31, 1998 by each Fund. The Advisor in turn compensated
each Fund Manager at no additional cost to the Fund.
62
<PAGE> 164
<TABLE>
<CAPTION>
NAME OF FUND FEE (AS A PERCENTAGE OF AVERAGE NET ASSETS)
<S> <C>
Growth Fund 0.75%
- ------------------------------------------------------------------------------------------------
Growth and Income Fund 0.75%
Equity Fund 0.75%
Equity Income Fund 0.75%
Capital Appreciation Fund 0.75%
Small Company Growth Fund 1.00%
Small Company Value Fund 0.75%
International Growth Fund 0.85%
Global Financial Services Fund 0.85%
Government Securities Fund 0.60%
High-Yield Bond Fund 0.60%
Tax-Exempt Income Fund 0.50%
Managed Fund 0.75%
Money Market Fund 0.35%
</TABLE>
The Fund Managers
The following chart sets forth certain information about each of the Fund
Managers other than the Advisor, which acts as the Fund Manager to the Money
Market Fund. The Fund Managers are responsible for the day-to-day management
of the Funds. The Fund Managers typically manage assets for institutional
investors and high net worth individuals. Collectively, the Fund Managers
manage assets in excess of $350 billion for all clients, including the
Enterprise Group of Funds.
63
<PAGE> 165
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
Name of Fund and Name and Address The Fund Manager's Experience Portfolio Managers
of Fund Manager
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Growth Fund Montag & Caldwell has served as Ronald E. Canakaris, President
the Fund Manager to Alpha Fund, and Chief Investment Officer of
Montag & Caldwell, Inc. ("Montag & Inc., the predecessor of the Montag & Caldwell, is
Caldwell") Growth Fund, since the Fund was responsible for the day-to-day
1100 Atlanta Financial Center organized in 1968. Montag & investment management of the
3343 Peachtree Road, N.E. Caldwell and its predecessors have Growth Fund and has more than 30
Atlanta, Georgia 30326 been engaged in the business of years' experience in the
providing investment counseling to investment industry. He has
individuals and institutions since been President of Montag &
1945. Total assets under Caldwell for more than 15 years
management for all clients and has served as Fund Manager
approximated $25.8 billion as since its inception.
of December 31, 1998 Usual
investment minimum: $40 million.
------------------------------------------------------------------------------------------------------------------
Growth and Income Fund Total assets under management for James P. Coughlin, President and
RSI were $597 million as of Chief Investment Officer of RSI,
Retirement System Investors Inc. December 31, 1998. is responsible for the day-to-
("RSI") day management of the Fund and
317 Madison Avenue has more than 30 years'
New York, New York 10017 experience in the investment
industry. He has served as
President and Chief Investment
Officer of RSI since 1989.
------------------------------------------------------------------------------------------------------------------
</TABLE>
64
<PAGE> 166
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
Name of Fund and Name and Address The Fund Manager's Experience Portfolio Managers
of Fund Manager
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Equity Fund OpCap has been providing Eileen Rominger, Managing
investment counseling services Director of Oppenheimer Capital,
OpCap Advisors ("OpCap") since 1987. OpCap had is responsible for the day-to-
One World Financial Center approximately $62 billion day management of the Fund. Ms.
New York, New York 10281 under management as of Rominger has more than 19 years'
December 31, 1998. Usual experience in the investment
investment minimum is $20 industry and has been Managing
million. Director of Oppenheimer Capital
since 1994. She previously
served as Senior Vice President
from 1986 to 1994.
------------------------------------------------------------------------------------------------------------------
Equity Income Fund 1740 Advisers has been providing John V. Rock, President and
investment counseling services Director of 1740 Advisers, is
1740 Advisers, Inc. ("1740 since 1971. Total assets under responsible for the day-to-day
Advisers") management for 1740 Advisers as investment management of the
1740 Broadway of December 31, 1998, were Fund and has more than 34 years'
New York, New York 10019 approximately $1.9 billion. experience in the investment
Usual investment minimum: $20 industry. He has served as
million. President of 1740 Advisers since
1974.
------------------------------------------------------------------------------------------------------------------
Capital Appreciation Fund PIC traces its origins to an Jeffrey J. Miller is a Managing
investment partnership formed in Director of PIC and is
Provident Investment Counsel, Inc. 1951. As of December 31, 1998, responsible for the day-to-day
("PIC") total assets under management for management of the Fund. He has
300 North Lake Avenue Pasadena, all clients were $20.4 billion. more than 25 years' experience
California 91101 Usual investment minimum: $5 in the investment industry. He
million. has been Managing Director of
PIC since 1972.
------------------------------------------------------------------------------------------------------------------
</TABLE>
65
<PAGE> 167
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Name of Fund and Name and Address The Fund Manager's Experience Portfolio Managers
of Fund Manager
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Small Company Growth Fund Witter has provided investment William D. Witter, President of
counseling services since 1977. Witter, and Paul B. Phillips,
As of December 31, 1998, total Managing Director, are
William D. Witter, Inc. ("Witter") assets under management for all responsible for the day-to-day
One Citicorp Center clients were $905 million. management of the Fund. They
153 East 53rd Street Usual investment minimum is $1 have more than 80 years'
New York, New York 10022 million. combined experience in the
investment industry. Mr. Witter
and Mr. Phillips have been
employed in their present
positions by Witter since 1977
and 1996, respectively. Mr.
Phillips previously served as
Senior Portfolio Manager at
Bankers Trust Company from 1986
to 1995.
- ------------------------------------------------------------------------------------------------------------------------------------
Small Company Value Fund GAMCO's predecessor, Gabelli & Mario J. Gabelli has served as
Company, Inc., was founded in chief investment officer of
GAMCO Investors, Inc. 1977. As of December 31, 1998, Gabelli since inception in
("GAMCO") total assets under management 1977 and is responsible for the
One Corporate Center for all clients were $7.2 billion. day-to-day management of the
Rye, New York 10580 Usual investment minimum is Fund. He has more than 28
$500,000. years' experience in the
investment industry.
- ------------------------------------------------------------------------------------------------------------------------------------
International Growth Fund Vontobel has provided investment Fabrizio Pierallini, Senior Vice
counseling since 1984. Vontobel's President and Managing Director of
Vontobel USA Inc. "Vontobel" assets under management for all International Investments is
450 Park Avenue clients were $841 million as of responsible for the day-to-day
New York, New York 10022 December 31, 1998. Usual management of the Fund. Mr. Pierallini
investment minimum is $200,000. has been employed by Vontobel since
1994. He previously served as a
portfolio manager for the Swiss Bank.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
66
<PAGE> 168
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
Name of Fund and Name and Address The Fund Manager's Experience Portfolio Managers
of Fund Manager
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Global Financial Services Fund Sanford Bernstein was established The day-to-day management of
in 1967 and as of Dec. 31, 1998, this Fund is performed by
Sanford C. Bernstein & Co., Inc. had $78.6 billion in assets Sanford Bernstein's Policy
("Sanford Bernstein") under management. Usual Group, which is chaired by
767 Fifth Avenue investment minimum is $5 million. Andrew S. Adelson, who has more
New York, New York than 20 years' experience in the
10153-0185 investment industry.
------------------------------------------------------------------------------------------------------------
Government Securities Fund The firm was founded in 1971 and Philip A. Barach, Managing
as of Dec. 31, 1998, TCW and its Director of TCW, and Jeffrey E.
TCW Funds Management, Inc. ("TCW") affiliated companies had Gundlach, Managing Director, are
865 South Figueroa Street Suite approximately $54.5 billion responsible for the day-to-day
1800 under management or committed for investment management of the
Los Angeles, California 90017 management in various fiduciary Fund and have more than 35
advisory capacities. Usual years' combined experience in
investment minimum: $35 million. the investment industry. They
have served as Managing
Directors since they joined TCW
in 1987 and 1985, respectively.
------------------------------------------------------------------------------------------------------------
High-Yield Bond Fund Caywood-Scholl has provided James Caywood, Managing Director
investment advice with respect to and Chief Investment Officer of
Caywood-Scholl Capital Management high-yield, low grade fixed income Caywood-Scholl, is responsible
("Caywood-Scholl") instruments since 1986. As of for the day-to-day management of
4350 Executive Drive, Suite 125 Dec. 31, 1998, assets under the Fund. He has more than 29
San Diego, California 92121 management for all clients years' investment industry
approximated $973 million. experience. He joined Caywood-
Usual investment minimum: $1 Scholl in 1986 as Managing
million. Director and Chief Investment
Officer and has held those
positions since 1986.
------------------------------------------------------------------------------------------------------------
</TABLE>
67
<PAGE> 169
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
Name of Fund and Name and Address The Fund Manager's Experience Portfolio Managers
of Fund Manager
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Tax-Exempt Income Fund MBIA has provided investment Robert M. Ohanesian, President
counseling services since 1987. and Chief Investment Officer of
MBIA Capital Management Corp. As of Dec. 31, 1998 assets under MBIA, who has more than 25 years
("MBIA") management for all clients experience in the investment
113 King Street approximated $15 billion. Usual industry, serves as portfolio
Armonk, New York 10504 investment minimum: $10 million. manager to the Fund. Mr.
Ohanesian joined MBIA in 1994
and previously served as
Director of Investments for
Shields Asset Management from
1988 through 1993.
------------------------------------------------------------------------------------------------------------
Managed Fund OpCap Advisors has provided Richard J. Glasebrook II,
investment counseling services Managing Director of Oppenheimer
OpCap Advisors since 1987. Capital is responsible for the
One World Financial Center As of Dec. 31, 1998, Oppenheimer day-to-day management of the
New York, New York 10281 Capital and its affiliates have Fund. He has more than 24
over $62 billion under years' investment industry
management. Its usual investment experience. Mr. Glasebrook has
minimum is $20 million. served as Managing Director of
Oppenheimer Capital since 1994
and immediately preceding served
as Senior Vice President.
------------------------------------------------------------------------------------------------------------
</TABLE>
Year 2000
Many computer and computer-based systems cannot distinguish the year 2000
from the year 1900 because of the way they encode and calculate dates (commonly
known as the "Year 2000 Issue"). The Year 2000 Issue could potentially have an
adverse impact on the handling of security trades, the payment of interest and
dividends, pricing and account services. As part of its operational
responsibilities, the Advisor has reviewed each of its internal systems and has
obtained assessments from each service provider, including Fund Managers, of
Year 2000 issues which could potentially impact services to the Fund. The
Advisor is unaware of any Year 2000 issues which remain unresolved or have been
identified as unresolvable. In addition, the Advisor has established a
timetable to periodically re-evaluate systems to ensure new issues or those
68
<PAGE> 170
which may not previously have been identified are addressed and resolved in an
expeditious manner. The Advisor does not anticipate any material expenditures
for monitoring Year 2000 issues. If the problem has not been fully addressed,
however, the Funds could be negatively affected. The Year 2000 Issue could
also have a negative impact on the companies in which the Funds invest, which
could hurt the Funds' investment returns.
FINANCIAL HIGHLIGHTS
The Financial Highlights tables for each Fund is intended to help you
understand the Fund's financial performance for the past 5 years, or, if
shorter, the period of the Fund's operations. Certain information reflects
financial results for a single Fund share. The total returns in each table
represent the rate that an investor would have earned (or lost) on an
investment in a Fund (assuming reinvestment of all dividends and
distributions).
69
<PAGE> 171
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGH THE PERIODS INDICATED)
<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED YEAR ENDED AUGUST 8 THROUGH
GROWTH FUND (CLASS Y) DECEMBER 31, 1998 DECEMBER 31, 1997 DECEMBER 31, 1996
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of
period........................ $ 13.12 $ 11.96
Net investment income (loss)... (0.02) 0.00
Net realized and unrealized
gains (losses) on
investments................... 4.27 1.90
------------------------------------------------------------
Total from investment
operations.................... 4.25 1.90
------------------------------------------------------------
Dividends from net investment
Income........................ 0.00 0.00
Distributions from net realized
Capital Gains................. 0.35 0.74
------------------------------------------------------------
Total distributions............ 0.35 0.74
------------------------------------------------------------
Net asset value, end of
period........................ $ 17.02 $ 13.12
------------------------------------------------------------
Total return................... 32.40% 15.91%(B)
Net assets end of period (in
thousands).................... $44,596 $ 2,339
Ratio of expenses to average
net assets.................... 0.97%(E) 1.10%(AE)
Ratio of expenses to average
net assets (excluding
waivers)...................... 0.97%(E) 1.10%(AE)
Ratio of net investment income
(loss) to average net
assets........................ (0.10)% 0.04%(A)
Ratio of net investment income
(loss) to average net assets
(excluding waivers)........... (0.10)% 0.04%(A)
Portfolio turnover............. 22.28% 29.90%(A)
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD YEAR ENDED SEPTEMBER 30,
GROWTH AND INCOME FUND YEAR ENDED OCTOBER 1 THROUGH ----------------------------------------------------------
(CLASS Y) DECEMBER 31, 1998 DECEMBER 31, 1997 1997 1996 1995 1994 1993 1992
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period....................... $ 25.73 $ 20.11 $ 16.69 $12.72 $12.08 $10.98 $10.45
Net investment income
(loss)....................... 0.06 0.35 0.21 0.13 0.15 0.18 0.23
Net realized and unrealized
gains (losses) on
investments.................. 0.02 6.18 3.45 4.22 0.74 1.84 0.60
--------------------------------------------------------------------------------------------------
Total from investment
operations................... 0.08 6.53 3.66 4.35 0.89 2.02 0.83
--------------------------------------------------------------------------------------------------
Dividends from net investment
income....................... 0.11 0.20 0.24 0.16 0.14 0.28 0.08
Distributions from net
realized capital gains....... 0.46 0.71 0.00 0.22 0.11 0.64 0.22
--------------------------------------------------------------------------------------------------
Total distributions........... 0.57 0.91 0.24 0.38 0.25 0.92 0.30
--------------------------------------------------------------------------------------------------
Net asset value, end of
period....................... $ 25.24 $ 25.73 $ 20.11 $16.69 $12.72 $12.08 $10.98
--------------------------------------------------------------------------------------------------
Total return.................. 0.31%(B) 33.55% 22.21% 35.24% 7.47% 19.39% 8.11%
Net assets end of period (in
thousands)................... $15,542 $15,428 $ 8,865 $5,657 $3,639 $3,094 $1,049
Ratio of expenses to average
net assets................... 1.05%(A) 0.99% 0.97% 0.90% 0.90% 0.90% 0.90%
Ratio of expenses to average
net assets (excluding
waivers)..................... 1.68%(A) 2.20% 2.05% 2.20% 2.23% 3.33% 3.36%
Ratio of net investment income
(loss) to average net
assets....................... 0.96%(A) 0.88% 1.23% 1.52% 1.17% 1.31% 1.86%
Ratio of net investment income
(loss) to average net assets
(excluding waivers).......... 0.33%(A) (0.33)% 0.15% 0.22% (0.16)% (1.12)% (0.60)%
Portfolio turnover............ 1.46%(A) 15.69% 18.08% 25.49% 9.64% 21.79% 61.27%
<CAPTION>
FOR THE PERIOD
GROWTH AND INCOME FUND MAY 10 THROUGH
(CLASS Y) SEPTEMBER 30, 1991
- ------------------------------ ------------------
<S> <C>
Net asset value, beginning of
period....................... $10.00
Net investment income
(loss)....................... 0.14
Net realized and unrealized
gains (losses) on
investments.................. 0.31
Total from investment
operations................... 0.45
Dividends from net investment
income....................... 0.00
Distributions from net
realized capital gains....... 0.00
Total distributions........... 0.00
Net asset value, end of
period....................... $10.45
Total return.................. 4.50%(B)
Net assets end of period (in
thousands)................... $1,560
Ratio of expenses to average
net assets................... 0.90%(A)
Ratio of expenses to average
net assets (excluding
waivers)..................... 2.70%(A)
Ratio of net investment income
(loss) to average net
assets....................... 3.31%(A)
Ratio of net investment income
(loss) to average net assets
(excluding waivers).......... 1.51%(A)
Portfolio turnover............ 12.49%
</TABLE>
A Annualized
B Not Annualized
E Effective September 1, 1995, ratio includes expenses paid indirectly.
THE ENTERPRISE Group of Funds, Inc.
6
<PAGE> 172
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
FOR THE PERIOD
EQUITY INCOME FUND (CLASS Y) 1/22/98 THROUGH 12/31/98
- ---------------------------------------------------------
<S> <C>
Net asset value, beginning of
period........................
Net investment income (loss)...
Net realized and unrealized
gains (losses) on
investments...................
Total from investment
operations....................
Dividends from net investment
income........................
Distributions from net realized
capital gains.................
Total distributions............
Net asset value, end of
period........................
Total return...................
Net assets end of period (in
thousands)....................
Ratio of expenses to average
net assets....................
Ratio of expenses to average
net assets (excluding
waivers)......................
Ratio of net investment income
(loss) to average net
assets........................
Ratio of net investment income
(loss) to average net assets
(excluding waivers)...........
Portfolio turnover.............
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
CAPITAL APPRECIATION (CLASS Y) 5/14/98 THROUGH 12/31/98
- ---------------------------------------------------------
<S> <C>
Net asset value, beginning of
period........................
Net investment income (loss)...
Net realized and unrealized
gains (losses) on
investments...................
Total from investment
operations....................
Dividends from net investment
income........................
Distributions from net realized
capital gains.................
Total distributions............
Net asset value, end of
period........................
Total return...................
Net assets end of period (in
thousands)....................
Ratio of expenses to average
net assets....................
Ratio of expenses to average
net assets (excluding
waivers)......................
Ratio of net investment income
(loss) to average net
assets........................
Ratio of net investment income
(loss) to average net assets
(excluding waivers)...........
Portfolio turnover.............
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
7
<PAGE> 173
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED FOR THE PERIOD YEAR ENDED SEPTEMBER 30,
DECEMBER 31, OCTOBER 1 THROUGH -----------------------------
SMALL COMPANY GROWTH FUND (CLASS Y) 1998 DECEMBER 31, 1997 1997 1996 1995
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period....... $ $ 26.62 $ 25.08 $ 19.05 $ 14.01
Net investment income (loss)............... (.07) (0.13) (0.17) (0.12)
Net realized and unrealized gains (losses)
on investments............................ (2.57) 3.73 7.62 5.49
-----------------------------------------------------------------
Total from investment operations........... (2.64) 3.60 7.45 5.37
-----------------------------------------------------------------
Dividends from net investment income....... 0.00 0.00 0.00 0.00
Distributions from net realized capital
gains..................................... 0.55 2.06 1.42 0.33
Return of Capital.......................... 0.00 0.00 0.00 0.00
-----------------------------------------------------------------
Total distributions........................ $ 0.55 2.06 1.42 0.33
-----------------------------------------------------------------
Net asset value, end of period............. $ $ 23.43 $ 26.62 $ 25.08 $ 19.05
-----------------------------------------------------------------
Total return............................... (9.92)%(B) 16.24% 42.07% 39.20%
Net assets end of period (in thousands).... $ $13,540 $15,355 $ 6,609 $ 2,950
Ratio of expenses to average net assets.... 1.40%(A) 1.84% 1.96% 1.85%
Ratio of expenses to average net assets
(excluding waivers)....................... 1.96%(A) 3.08% 3.46% 5.15%
Ratio of net investment income (loss) to
average net assets........................ (1.12)%(A) (1.30)% (1.43)% (1.33)%
Ratio of net investment income (loss) to
average net assets (excluding waivers).... (1.68)%(A) (2.54)% (2.93)% (4.63)%
Portfolio turnover......................... 23.68% 157.51% 77.94% 84.05%
<CAPTION>
FOR THE PERIOD
YEAR ENDED SEPTEMBER 30, MAY 10 THROUGH
----------------------------- SEPTEMBER 30,
SMALL COMPANY GROWTH FUND (CLASS Y) 1994 1993 1992 1991
- ------------------------------------------- --------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period....... $ 14.74 $ 11.83 $ 10.54 $ 10.00
Net investment income (loss)............... (0.04) (0.13) (0.17) (0.02)
Net realized and unrealized gains (losses)
on investments............................ 1.58 4.36 1.49 0.56
Total from investment operations........... 1.54 4.23 1.32 0.54
Dividends from net investment income....... 0.00 0.11 0.00 0.00
Distributions from net realized capital
gains..................................... 2.27 1.21 0.01 0.00
Return of Capital.......................... 0.00 0.00 0.02 0.00
Total distributions........................ 2.27 1.32 0.03 0.00
Net asset value, end of period............. $ 14.01 $ 14.74 $ 11.83 $ 10.54
Total return............................... 11.89% 38.05% 13.80% 5.40%(B)
Net assets end of period (in thousands).... $ 1,825 $ 1,352 $ 684 $ 602
Ratio of expenses to average net assets.... 1.85% 1.85% 1.86% 1.85%(A)
Ratio of expenses to average net assets
(excluding waivers)....................... 6.16% 8.06% 9.76% 2.70%(A)
Ratio of net investment income (loss) to
average net assets........................ (1.37)% (1.34)% (1.10)% (0.46)%(A)
Ratio of net investment income (loss) to
average net assets (excluding waivers).... (5.68)% (7.55)% (9.00)% (1.31)%(A)
Portfolio turnover......................... 72.59% 144.49% 138.46% 25.38%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED DECEMBER 31, FOR THE PERIOD
DECEMBER 31, -------------------------- MAY 25 THROUGH
SMALL COMPANY VALUE FUND (CLASS Y) 1998 1997 1996 DECEMBER 31, 1995
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period... $ $ 5.77 $ 5.43 $ 5.37
Net investment income (loss)........... 1.45 0.01 0.04
Net realized and unrealized
gains(losses) on investments.......... 1.12 0.63 0.26
--------------------------------------------------------------
Total from investment operations....... 2.57 0.64 0.30
--------------------------------------------------------------
Dividends from net investment income... 0.00 0.00 0.04
Distributions from net realized capital
gains................................. 0.53 0.30 0.20
--------------------------------------------------------------
Total distributions.................... 0.53 0.30 0.24
--------------------------------------------------------------
Net asset value, end of period......... $ $ 7.81 $ 5.77 $ 5.43
--------------------------------------------------------------
Total return........................... 44.53% 11.83% 5.55%(B)
Net assets end of period (in
thousands)............................ $ $ 119 $ 1,926 $ 2,832
Ratio of expenses to average net
assets................................ 1.30% 1.30% 1.30%(A)
Ratio of expenses to average net assets
(excluding waivers)................... 1.85% 1.92% 1.81%(A)
Ratio of net investment income (loss)
to average net assets................. 2.74% 0.35% 0.18%(A)
Ratio of net investment income (loss)
to average net assets (excluding
waivers).............................. 2.19% (0.27)% (0.33)%(A)
Portfolio turnover..................... 62.51% 143.58% 36.50%(A)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED DECEMBER 31, FOR THE PERIOD
DECEMBER 31, -------------------------- JULY 5 THROUGH
INTERNATIONAL GROWTH FUND (CLASS Y) 1998 1997 1996 DECEMBER 31, 1995
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period... $ $ 17.10 $ 16.07 $14.93
Net investment income (loss)........... 0.17 0.14 0.02
Net realized and unrealized
gains(losses) on investments.......... 0.72 1.92 2.02
-------------------------------------------------------------
Total from investment operations....... 0.89 2.06 2.04
-------------------------------------------------------------
Dividends from net investment income... 0.15 0.16 0.14
Distributions from net realized capital
gains................................. 1.13 0.87 0.76
-------------------------------------------------------------
Total distributions.................... 1.28 1.03 0.90
-------------------------------------------------------------
Net asset value, end of period......... $ $ 16.71 $ 17.10 $16.07
-------------------------------------------------------------
Total return........................... 5.21% 12.86% 13.65%(B)
Net assets end of period (in
thousands)............................ $ $10,986 $ 8,828 $3,109
Ratio of expenses to average net
assets................................ 1.55% 1.55% 1.55%(A)
Ratio of expenses to average net assets
(excluding waivers)................... 1.66% 1.75% 1.75%(A)
Ratio of net investment income (loss)
to average net assets................. 0.95% 1.03% 0.26%(A)
Ratio of net investment income (loss)
to average net assets (excluding
waivers).............................. 0.84% 0.84% 0.05%(A)
Portfolio turnover..................... 27.08% 23.79% 31.10%(A)
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
8
<PAGE> 174
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED JULY 17 THROUGH
GOVERNMENT SECURITIES FUND (CLASS Y) DECEMBER 31, 1998 DECEMBER 31, 1997
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period........................ $11.87
Net investment income (loss)................................ 0.35
Net realized and unrealized gains(losses) on investments.... 0.15
----------------
Total from investment operations............................ 0.50
----------------
Dividends from net investment income........................ 0.35
Distributions from net realized capital gains............... 0.00
----------------
Total distributions......................................... 0.35
Net asset value, end of period.............................. $12.02
----------------
Total return................................................ 4.02%(B)
Net assets end of period (in thousands)..................... $7,569
Ratio of expenses to average net assets..................... 0.85%(A)
Ratio of expenses to average net assets (excluding
waivers)................................................... 1.02%(A)
Ratio of net investment income (loss) to average net
assets..................................................... 6.40%(A)
Ratio of net investment income (loss) to average net assets
(excluding waivers) 6.23%(A)
Portfolio turnover.......................................... 9.61%(A)
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED JULY 25 THROUGH
HIGH-YIELD BOND FUND (CLASS Y) DECEMBER 31, 1998 DECEMBER 31, 1997
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period........................ $12.17
Net investment income (loss)................................ 0.67
Net realized and unrealized gains (losses) on investments... 0.18
----------------
Total from investment operations............................ 0.85
----------------
Dividends from net investment income........................ 0.67
Distributions from net realized capital gains............... 0.00
----------------
Total distributions......................................... 0.67
----------------
Net asset value, end of period.............................. $12.35
----------------
Total return................................................ 5.24%(B)
Net assets end of period (in thousands)..................... $ 809
Ratio of expenses to average net assets..................... 0.85%(A)
Ratio of expenses to average net assets (excluding
waivers)................................................... 1.02%(A)
Ratio of net investment income (loss) to average net
assets..................................................... 8.26%(A)
Ratio of net investment income (loss) to average net assets
(excluding waivers)........................................ 8.09%(A)
Portfolio turnover.......................................... 175.38%(A)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, FOR THE PERIOD
YEAR ENDED ----------------- 7/5/95 THROUGH
MANAGED FUND (CLASS Y) DECEMBER 31, 1998 1997 1996 12/31/95
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period........................ $ 7.98 $ 6.70 $ 6.17
Net investment income (loss)................................ 0.08 0.09 0.03
Net realized and unrealized gains (losses) on investments... 1.64 1.42 0.57
--------------------------------------
Total from investment operations............................ 1.72 1.51 0.60
--------------------------------------
Dividends from net investment income........................ 0.07 0.09 0.04
Distributions from net realized capital gains............... 0.36 0.14 0.03
--------------------------------------
Total distributions......................................... 0.43 0.23 0.07
--------------------------------------
Net asset value, end of period.............................. $ 9.27 $ 7.98 $ 6.70
--------------------------------------
Total return................................................ 21.60% 22.63% 9.80%(B)
Net assets end of period (in thousands)..................... $80,879 $57,794 $26,664
Ratio of expenses to average net assets..................... 1.04% 1.12% 1.30%(A)
Ratio of expenses to average net assets (excluding
waivers)................................................... 1.04% 1.12% 1.41%(A)
Ratio of net investment income (loss) to average net
assets..................................................... 0.92% 1.57% 1.39%(A)
Ratio of net investment income (loss) to average net assets
(excluding waivers)........................................ 0.92% 1.57% 1.28%(A)
Portfolio turnover.......................................... 28.17% 33.21% 26.40%(A)
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
9
<PAGE> 175
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
FOR THE PERIOD
YEAR ENDED JULY 17 THROUGH
MONEY MARKET FUND (CLASS Y) DECEMBER 31, 1998 DECEMBER 31, 1997
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period........................ $ 1.00
Net investment income (loss)................................ 0.02
Net realized and unrealized gains (losses) on investments... 0.00
------------------------------------
Total from investment operations............................ 0.02
------------------------------------
Dividends from net investment income........................ 0.02
Distributions from net realized capital gains............... 0.00
------------------------------------
Total distributions......................................... 0.02
------------------------------------
Net asset value, end of period.............................. $ 1.00
------------------------------------
Total return................................................ 2.31%(B)
Net assets end of period (in thousands)..................... $2,700
Ratio of expenses to average net assets..................... 0.70%(A)
Ratio of expenses to average net assets (excluding
waivers)................................................... 0.95%(A)
Ratio of net investment income (loss) to average net
assets..................................................... 4.96%(A)
Ratio of net investment income (loss) to average net assets
(excluding waivers)........................................ 4.71%(A)
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
10
<PAGE> 176
THE ENTERPRISE GROUP OF FUNDS
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: 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: 800-368-3527
Independent Accountants
PricewaterhouseCoopers LLP
Atlanta, GA
Member - Investment Company Institute
<PAGE> 177
(OUTSIDE BACK COVER)
FOR MORE INFORMATION
The following documents contain more information about the Funds and
are available free of charge upon request:
ANNUAL/SEMI-ANNUAL REPORTS. Contain financial
statements, performance data and information on
portfolio holdings. The annual report also contains
a written analysis of market conditions and
investment strategies that significantly affected a
Fund's performance during the last fiscal year.
STATEMENT OF ADDITIONAL INFORMATION (SAI). Contains
additional information about the Funds' policies,
investment restrictions and business structure. This
prospectus incorporates the SAI by reference.
You may obtain copies of these documents or ask questions about the
Funds by contacting:
Enterprise Group of Funds, Inc.
Atlanta Financial Center
3343 Peachtree Road, N.E., Suite 450
Atlanta, Georgia 30326
1-800-368-3527
or by calling your broker or financial advisor.
Information about the Funds (including the SAI) can be reviewed and
copied at the Public Reference Room of the Securities and Exchange Commission,
Washington, D.C. Call (800) SEC-0330 for information on the operation of the
Public Reference Room. Information about the Funds is also available on the
Securities and Exchange Commission's web-site at http://www.sec.gov and copies
may be obtained upon payment of a duplicating fee by writing the Public
Reference Section of the Securities and Exchange Commission, Washington, D.C.
20549-6009. You also may obtain additional information about the Funds by
visiting the Enterprise Group of Funds, Inc.'s website
(www.enterprisefunds.com) and 24-hour Shareholder Information by calling
1-800-821-9540.
You should rely only on the information contained in this prospectus.
No one is authorized to provide you with any different information.
<PAGE> 178
[GRAPHIC OMITTED]
Atlanta Financial Center
3343 Peachtree Road, Suite 450
Atlanta, Georgia 30326-1022
STATEMENT OF ADDITIONAL INFORMATION
EQUITY FUNDS:
Growth Fund
Growth and Income Fund
Equity Fund
Equity Income Fund
Capital Appreciation Fund
Small Company Growth Fund
Small Company Value Fund
International Growth Fund
Global Financial Services Fund
INCOME FUNDS:
Government Securities Fund
High-Yield Bond Fund
Tax-Exempt Income Fund
FLEXIBLE FUND:
Managed Fund
MONEY MARKET FUND:
Money Market Fund
This Statement of Additional Information is not a prospectus and should
be read in conjunction with the Enterprise Group of Funds, Inc. (the
"Corporation") Prospectus dated May 3, 1999, which has been filed with the
Securities and Exchange Commission and can be obtained, without charge, by
writing to the Corporation at 3343 Peachtree Road, N.E., Suite 450, Atlanta,
Georgia 30326, or by calling the Corporation at the following numbers:
1-800-432-4320
1-800-368-3527 (SHAREHOLDER SERVICES)
The Prospectus is incorporated by reference into this Statement of
Additional Information, and this Statement of Additional Information is
incorporated by reference into the Prospectus.
The date of this Statement of Additional Information is May 3, 1999.
<PAGE> 179
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
<S> <C>
General Information and History...................................................................................1
Investment Objectives and Policies................................................................................1
Certain Investment Securities, Techniques and Associated Risks...................................................12
Investment Restrictions..........................................................................................22
Portfolio Turnover...............................................................................................25
Management of the Corporation....................................................................................26
Investment Advisory and Other Services ..........................................................................29
Investment Advisory Agreement...........................................................................29
Fund Manager Arrangements...............................................................................31
Distributor's Agreements And Plans Of Distribution......................................................35
Miscellaneous...........................................................................................37
Purchase, Redemption and Pricing of Securities Being Offered.....................................................37
Initial Sales Charge Waivers and Reductions.............................................................38
Exemptions from Class A, B and C CDSC...................................................................38
CDSC Waivers and Reductions.............................................................................39
Services For Investors..................................................................................40
Conversion of Class B shares............................................................................42
Exchange Privilege......................................................................................42
Redemptions In Kind.....................................................................................43
Determination Of Net Asset Value........................................................................43
Fund Transactions and Brokerage..................................................................................49
Performance Comparisons..........................................................................................52
Taxes............................................................................................................55
Dividends and Distributions......................................................................................58
Additional Information...........................................................................................59
Custodian, Transfer and Dividend Disbursing Agent................................................................60
Independent Accountants..........................................................................................61
Financial Statements.............................................................................................61
Appendix A.......................................................................................................62
Appendix B.......................................................................................................64
</TABLE>
i
<PAGE> 180
GENERAL INFORMATION AND HISTORY
The Enterprise Group of Funds, Inc. (the "Corporation"), an open-end
management investment company, was incorporated in Maryland on January 2, 1968,
as Alpha Fund, Inc. On September 14, 1987, the Corporation's name was changed to
The Enterprise Group of Funds, Inc. and the Corporation's common stock was
divided into nine classes, each of which representing shares of a separate fund
of the Corporation (each a "Fund," and collectively the "Funds"). Effective May
1, 1990, the Corporation added its Money Market Fund. Effective October 1, 1993,
the Corporation added its Small Company Value Fund and effective October 3,
1994, the Corporation added its Managed Fund. Effective May 1, 1995, the
Corporation added Class B and Class Y Shares. Effective May 1, 1997, the
Corporation added Class C Shares and the Equity, Growth and Income and Small
Company Growth Funds. Effective October 1, 1998, the Corporation added its
Global Financial Services Fund. Each Fund is diversified, as that term is
defined in the Investment Company of 1940.
INVESTMENT OBJECTIVES AND POLICIES
The following information is provided for those investors wishing to
have more comprehensive information than that contained in the Prospectus. The
investment objectives of each Fund may not be changed without approval of a
majority of the outstanding voting securities of that Fund.
Equity Funds
Under normal market conditions, at least 65% of the net asset value of
the nine Equity Funds will be invested in common equity securities. The
remainder of the Equity Funds' assets may be invested in repurchase agreements,
bankers acceptances, bank certificates of deposit, commercial paper and similar
money market instruments, convertible bonds, convertible preferred stock,
preferred stock, corporate bonds, U.S. Treasuries, notes and bonds, American
Depository Receipts ("ADRs"), European Depository Receipts ("EDRs"), rights and
warrants.
The Growth, Growth and Income, Equity, Equity Income, Capital
Appreciation, Global Financial Services, Small Company Growth and Small Company
Value Funds invest in securities that are traded on national securities
exchanges and in the over-the-counter market. Each of these Funds, except the
Global Financial Services Fund, may invest up to 20% of its assets in foreign
securities provided they are listed on a domestic or foreign securities exchange
or are represented by ADRs. The Global Financial Services Fund may invest over
50% of its assets in foreign securities. No Fund may invest more than 10% of its
net assets in illiquid, including restricted, securities. As noted below, the
International Growth Fund invests principally in the securities of foreign
issuers listed on recognized foreign exchanges, but may also invest in
securities traded on the over-the-counter market.
Growth Fund. The objective of the Growth Fund is appreciation of
capital primarily through investments in common stocks. The Fund's common stock
selection emphasizes those
<PAGE> 181
companies having growth characteristics, but the Fund's investment policy
recognizes that securities of other companies may be attractive for capital
appreciation purposes by virtue of special developments or depression in price
believed to be temporary. The potential for appreciation of capital is the basis
for investment decisions; any income is incidental.
Growth and Income Fund. The objective of the Growth and Income Fund is
total return through capital appreciation with income as a secondary
consideration. The Fund will invest in securities of companies which the Fund
Manager believes to be financially sound and will consider such factors as the
sales, growth and profitability prospects for the economic sector and markets in
which the company operates and for the services of products it provides; the
financial condition of the company; its ability to meet its liabilities and to
provide income in the form of dividends; the prevailing price of the security;
how that price compares to historical price levels of the security, to current
price levels in the general market, and to the prices of competing companies;
projected earnings estimates and earnings growth rate of the company, and the
relation of those figures to the current price. The securities held in the
Growth and Income Fund will generally reflect the price volatility of the broad
equity market (i.e., the S&P 500 Composite Stock Price Index).
Equity Fund. The investment objective of the Equity Fund is long-term
capital appreciation through investment in securities (primarily equity
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. It is the Fund Manager's intention to invest in securities of
companies which in the Fund Manager's opinion possess one or more of the
following characteristics: undervalued assets, valuable consumer or commercial
franchises, securities valuation below peer companies, substantial and growing
cash flow and/or a favorable price to book value relationship. Investment
policies aimed at achieving the Fund's objective are set in a flexible framework
of securities selection which primarily includes equity securities, such as
common stocks, preferred stocks, convertible securities, rights and warrants in
proportions which vary from time to time. Under normal circumstances at least
65% of the Fund's assets will be invested in equity securities. The Fund will
invest primarily in stocks listed on the New York Stock Exchange. In addition,
it may also purchase securities listed on other domestic securities exchanges,
securities traded in the domestic over-the-counter market and foreign securities
provided that they are listed on a domestic or foreign securities exchange or
represented by ADRs listed on a domestic securities exchange or traded in the
United States over-the-counter market.
Equity Income Fund. The objective of the Equity Income Fund is a
combination of growth and income to achieve an above-average and consistent
total return, primarily from
2
<PAGE> 182
investments in dividend-paying common stocks. Under normal circumstances, at
least 65% of the Fund's total assets will be invested in income-producing equity
securities.
The Fund's principal criterion in stock selection is above-average
yield, and it uses this criterion as a discipline to enhance stability and
reduce market risk. Subject to this primary criterion, the Fund invests in
stocks that have relatively low price to earnings ratios or relatively low price
to book value ratios.
Capital Appreciation Fund. The objective of the Capital Appreciation
Fund is maximum capital appreciation, primarily through investments in common
stocks of companies that demonstrate accelerating earnings momentum and
consistently strong financial characteristics.
The Fund invests primarily in common stocks of companies which meet the
Fund Manager's criteria of: (a) steadily increasing earnings; and (b) a
three-year average performance record of sales, earnings, dividend growth,
pretax margins, return on equity and reinvestment rate at an aggregate average
of 1.5 times the average performance of the Standard & Poor's 500 common stocks
("S&P 500") for the same period. The Fund attempts to invest in a range of
small, medium and large companies designed to achieve an average capitalization
of the companies in which it invests that is less than the average
capitalization of the S&P 500. The potential for maximum capital appreciation is
the basis for investment decisions; any income is incidental.
Small Company Growth Fund. The Small Company Growth Fund seeks to
achieve its objective of capital appreciation by investing primarily in common
stocks of small companies with strong earnings growth and potential for
significant capital appreciation. Under normal market conditions, the Fund will
have at least 65% of its total assets in small capitalization stocks (market
capitalization of up to $1 billion) and generally that percentage will be
considerably higher. The Fund reserves the right to have some of its assets in
the equities of companies with over $1 billion in market capitalization. These
holdings may be equities that have appreciated since original purchase or
equities of companies with a market capitalization in excess of $1 billion at
the time of purchase. The Fund will normally be as fully invested as practicable
in common stocks, but also may invest up to 5% of its assets in warrants and
rights to purchase common stocks.
In pursuing its objective, the Fund Manager will seek out the stocks of
small companies that are expected to have above average growth in earnings and
are reasonably valued. The Fund Manager uses a disciplined approach in
evaluating growth companies. It relates the expected growth rate in earnings to
the price-earnings ratio of the stock. Generally, the Fund Manager will not buy
a stock if the price-earnings ratio exceeds the growth rate. By using this
valuation parameter, the Fund Manager believes it moderates some of the inherent
volatility in the small-capitalization sector of the market. Securities will be
sold when the Fund Manager believes the stock price exceeds the valuation
criteria, or when the stock appreciates to a point where it is substantially
overweighted in the portfolio, or when the company no longer meets expectations.
The Fund Manager's goal is to
3
<PAGE> 183
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.
Small Company Value Fund. The objective of the Small Company Value Fund
is maximum capital appreciation, primarily through investment of at least 65% of
Fund assets in the common equity securities of companies (based on the total
outstanding common shares at the time of investment) which have a market
capitalization of up to $1 billion.
The Fund intends to invest the remaining 35% of its total assets in the
same manner but reserves the right to use some or all of the 35% to invest in
equity securities of companies (based on the total outstanding common shares at
the time of investment) which have a market capitalization of more than $1
billion.
In pursuing its objective, the Fund's strategy will be to invest in
stocks of companies with value that may not be fully reflected by current stock
price. Since small companies tend to be less actively followed by stock
analysts, the market may overlook favorable trends and then adjust its valuation
more quickly once investor interest has surfaced. The Fund Manager uses a number
of proprietary research techniques in various sectors to seek out companies in
the public market that are selling at a discount to what the Fund Manager terms
the private market value (PMV) of the companies. The Fund Manager then
determines whether there is an emerging catalyst that will focus investor
attention on the underlying assets of the company. Smaller companies may be
subject to a valuation catalyst such as increased investor attention, takeover
efforts or a change in management.
International Growth Fund. The objective of the International Growth
Fund is capital appreciation, primarily through a diversified Fund of non-U.S.
equity securities.
It is a fundamental policy of the Fund that it will invest at least 80%
of the value of its assets (except when maintaining a temporary defensive
position) in equity securities of companies domiciled outside the United States.
That portion of the Fund not invested in equity securities is, in normal
circumstances, invested in U.S. and foreign government securities, high-grade
commercial paper, certificates of deposit, foreign currency, bankers
acceptances, cash and cash equivalents, time deposits, repurchase agreements and
similar money market instruments, both foreign and domestic. The Fund may invest
in convertible debt securities of foreign issuers which are convertible into
equity securities at such time as a market for equity securities is established
in the country involved.
4
<PAGE> 184
The International Growth Fund will invest primarily in equity securities, which
may achieve capital appreciation by selecting companies with superior potential
based on a series of macro and micro analyses. The International Growth Fund may
select its investments from companies which are listed on a securities exchange
or from companies whose securities have an established over-the-counter market,
and may make limited investments in "thinly traded" securities.
The International Growth Fund will have at least 65% of its assets invested in
European and Pacific Basin equity securities. The International Growth Fund
intends to broadly diversify investments among countries and normally to have
represented in the portfolio business activities of not less than three
different countries. The selection of the securities in which the International
Growth Fund will invest will not be limited to companies of any particular size,
and will be based only upon the expected contribution such security will make to
its investment objective.
Using an approach that involves top-down country allocation combined with
bottom-up stock selection, the Fund Manager will seek to identify countries
where economic and political factors are likely to provide above-average
returns, and companies in such countries that are best positioned in their
respective industries and are attractively valued. In this regard the Fund
Manager will allocate the assets of the International Growth Fund principally
between the European and Pacific regions. The International Growth Fund will
invest most of its assets in equity securities of countries which are generally
considered to have developed markets, such as the United Kingdom, Germany,
France, the Netherlands, Switzerland, Norway, Spain, Japan, Hong Kong,
Australia, and Singapore.
The Fund Manager's approach is governed by its belief that the principal factors
affecting an equity market's return are, on a country allocation basis, the
proportion of liquidity in the economy, and, on a stock selection basis,
consistent profit growth, a strong balance sheet and high returns on employed
capital and, in addition, that the effect of currency fluctuations on portfolio
returns can be reduced through a systematic hedging strategy.
For its country allocation, the Fund Manager analyzes approximately 35
international growth markets, which include the 20 markets currently comprised
in Morgan Stanley Capital International's Europe, Australia, and Far East Index
("EAFE"). The Fund Manager also gives consideration to such factors as market
liquidity, accessibility to foreign investors, regulatory protection of
shareholders, accounting and disclosure standards, and transferability of funds
and foreign exchange controls, if any.
Each factor is assigned a numerical value based on a scale determined by the
historic ranges. Based on the arithmetical sum of all such values, an
attractiveness ranking for each country in the Fund Manager's universe is
produced on a quarterly basis. The use of three different sets of variables in
combination results in a higher degree of predictability of the valuation
model's output. Generally, the factors are equally weighted. In a few instances
a double weight is assigned if the predictive power of a particular factor has
historically been very high, like yield curve analysis, which is relevant in all
markets.
5
<PAGE> 185
The valuation model's total return expectations provide a relative
ranking in descending order of attractiveness of all countries in the Fund
Manager's universe. It is not the Fund Manager's approach to make country
"bets" by, for example, significantly overweighting those countries showing the
highest expected return based on the output of the Fund Manager's valuation
model. Rather, the Fund Manager normalizes the distribution of country weights
through the use of proprietary risk-variance matrix that establishes for each
market a minimum/maximum weight relative to the benchmark (EAFE). Since the
Fund Manager's country allocation valuation model cannot take into account
exogenous events impacting country stock market returns such as political
events, social unrest and currency turmoil, this matrix serves for risk control
purposes.
Before a decision is made to increase or lower a country weight based
on the quantitative output of the valuation model, the Fund Manager reviews the
country's fundamental economic data that are not part of the country screening
process as well as its political situation. This systematic qualitative
analysis focuses on such macroeconomic data as GDP growth, external trade
balances, current account and balance of payments, external debt position and
debt service ratios, foreign reserve position, ability to finance deficits in
external accounts, fiscal and exchange rate policies, private and public
savings rates, as well as inflationary trends.
The Fund Manager believes this approach to be more useful than a rigid
discipline that ties the magnitude and timing of shifts in country weights
directly to changes in the expected returns for each country produced by the
Fund Manager's valuation model since the Fund Manager does not employ portfolio
optimization techniques.
The Fund Manager's stock selection process begins by screening a
universe of approximately 3000 stocks in a market capitalization range from
approximately $500 million to approximately $100 billion. The Fund Manager's
screens are designed to be representative of each market and generally cover a
broad cross-section of companies which together account for about 70% of total
market capitalization. The Fund Manager's approach is to look at companies
whose growth factors can be measured and compared. The Fund Manager's data
series focus on low price to sales ratios, consistent earnings growth,
consistent operating margins, high returns on equity relative to price to cash
flow, and healthy debt ratios. The Fund Manager defines cash flow as recurrent
net profit plus depreciation. Furthermore, the Fund Manager analyzes the share
price in relation to earnings before interest, taxes, depreciation and
amortization, and looks at the underlying trend of cash and retained earnings.
The screens, comprising multiple valuation ratios, are used to ensure rigor and
consistency in the Fund Manager's bottom-up research.
The Fund Manager supplements the above quantitative screening process
by an analysis of certain qualitative criteria, one of the most important of
which is to identify strong, stable and reliable management that maintains a
company's market position through consistent unit volume growth and gains in
market share rather than a reliance on price increases, exercises tight
financial control and fosters a culture of market responsiveness.
Based on the Fund Manager's ranking of approximately 3000 stocks in
about 35 different international equity markets, the Fund Manager usually
selects names which appear in the top third of the quantitative screens for
each country. Based on the screening factors, these stocks typically show low
historical deviations of annual earnings, high returns on equity and low debt
levels. Position size at purchase ranges about 0.7% to 1% of total portfolio
assets.
Within this range position size varies in proportion to the market
capitalization of the company within a given country's stock market. The Fund
Manager normally allows positions to reach a maximum of approximately 5% of
total assets.
Shifts in country weight are the principal cause for selling stocks.
Stocks are sold if a country's maximum weight-basis on the risk-variance matrix
has been exceeded. The Fund Manager may trim or sell positions if a name drops
from the top third of its quantitative screens due to price appreciation or if
a company's fundamentals have deteriorated.
Within each country, no conscious sector allocation decision is made.
Sector allocation is the result of the stock selection within each country.
The Global Financial Services Fund invests almost exclusively in
financial services stocks with average holdings of between 55 and 75 stocks. In
addition, the Fund primarily invests in U.S. financial services companies. Other
countries eligible for inclusion into this service will be limited to the
developed market as represented by the MSCI EAFE Index with Canada. The Fund
Manager will not make investments in emerging markets. The Fund is broadly
diversified geographically, typically with holdings in ten or more foreign
countries. The vast majority of the investments are made in common and preferred
stocks with a fully invested
6
<PAGE> 186
posture being the norm. Individual security positions are controlled so that no
single holding will dominate the portfolio.
The Fund Manager employs a centralized investment approach in all
portfolios. The Global Investment Policy Group uses its many years of experience
and market memory to review analysts' latest research findings and forecasts.
The group integrates the work of analysts, economists and the quantitative
group, systematically applying valuation and portfolio construction processes to
select securities. The portfolio managers then apply the Investment Policy
Group's decisions, deviating only to conform to Fund objectives.
The Fund Manager employs 129 analysts who take an intensive, long-term
approach to forecasting earnings power and growth. Organized in global industry
teams so that they can discern companies' strategies, cost pressures and
competition in a global context, the Fund Manager's analysts are centrally
located so that the senior professionals can control the quality of their
findings.
Income Funds
Investors should refer to Appendix A to this Statement of Additional
Information for a description of the Moody's Investors Service, Inc. ("Moody's")
and Standard & Poor's ("S&P") ratings mentioned below.
Government Securities Fund. The objective of the Government Securities
Fund is current income and safety of principal primarily from securities that
are obligations of the U.S. Government, its agencies and instrumentalities
("U.S. Government Securities").
It is a fundamental policy of the Fund that under normal conditions at
least 80% of the value of its net assets will be invested in U.S. Government
Securities. As an operating policy, at least 65% of total assets will be
invested in U.S. Government Securities. Securities issued or guaranteed by the
U.S. Government or its agencies or instrumentalities are generally considered to
be of the same or higher credit quality as privately issued securities rated Aaa
by Moody's or AAA by S&P.
U.S. Government Securities consist of direct obligations of the U.S.
Treasury (such as treasury bills, treasury notes and treasury bonds) and
securities issued or guaranteed by agencies and instrumentalities of the United
States Government. Those securities issued by agencies or instrumentalities may
or may not be backed by the full faith and credit of the United States. Examples
of full faith and credit securities are securities issued by the Government
National Mortgage Association ("GNMA Certificates"). Examples of agencies or
instrumentalities whose securities are not backed by the full faith and credit
of the United States are the Federal Farm Credit System, the Federal Home Loan
Banks, the Tennessee Valley Authority, the United States Postal Service and the
Export-Import Bank. The Fund will choose among these categories in order to
achieve the highest level of current income and safety of principal.
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<PAGE> 187
The remainder of the Fund's assets may be invested in repurchase
agreements, bankers acceptances, bank certificates of deposit, commercial paper
and similar money market instruments, corporate bonds and other mortgage-related
securities (including collateralized mortgage obligations or "CMOs") rated Aaa
by Moody's or AAA by S&P at the time of the investment or determined by the Fund
Manager to be of comparable credit quality at the time of investment to such
rated securities. In making such investments, the Fund Manager seeks income but
gives careful attention to security of principal and considers such factors as
marketability and diversification. For a discussion of CMOs and related risks,
see "Certain Investment Techniques and Associated Risks in this Statement of
Additional Information."
As described in "Certain Investment Techniques and Associated Risks,"
the Fund may write and sell covered call option contracts on securities that it
owns (in an effort to enhance income through hedging and other investment
techniques) to the extent of 20% of the value of its net assets at the time such
option contracts are written.
High-Yield Bond Fund. The objective of the High-Yield Bond Fund is
maximum current income, primarily from debt securities that are rated Ba or
lower by Moody's or BB or lower by S&P.
It is a fundamental policy of the Fund that under normal circumstances
it will invest at least 80% of the value of its total net assets (at least 65%
of gross assets) in high-yielding, income-producing corporate bonds that are
rated below investment grade and rated B3 or better by Moody's or B- or better
by S&P. The corporate bonds in which the Fund invests are high-yielding but
normally carry a greater credit risk than bonds with higher ratings. In
addition, such bonds, commonly referred to as "junk bonds," may involve greater
volatility of price than higher-rated bonds. For a discussion of high-yield
securities and related risks, see "Certain Investment Techniques and Associated
Risks."
The Fund's investments are selected by the Fund Manager after careful
examination of the economic outlook to determine those industries that appear
favorable for investments. Industries going through a perceived decline
generally are not candidates for selection. After the industries are selected,
bonds of issuers within those industries are selected based on their
creditworthiness, their yields in relation to their credit and the relative
strength of their common stock prices. Companies near or in bankruptcy are not
considered for investment. The Fund does not purchase bonds which are rated Ca
or lower by Moody's or CC or lower by S&P or which, if unrated, in the judgment
of the Fund Manager have characteristics of such lower-grade bonds. Should an
investment purchased with the above-described credit quality requisites be
downgraded to Ca or lower or CC or lower, the Fund Manager shall have discretion
to hold or liquidate the security.
Subject to the restrictions described above, under normal
circumstances, up to 20% of the Fund's assets may include: (1) bonds rated Caa
by Moody's or CCC by S&P; (2) unrated debt securities which, in the judgment of
the Fund Manager have characteristics similar to those described above; (3)
convertible debt securities; (4) puts, calls and futures as hedging devices;
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(5) foreign issuer debt securities; and (6) short-term money market instruments,
including certificates of deposit, commercial paper, U.S. Government Securities
and other income-producing cash equivalents. For a discussion of puts, calls,
and futures and their related risks, see "Certain Investment Techniques and
Associated Risks."
Tax-Exempt Income Fund. The objective of the Tax-Exempt Income Fund is
a high level of current income not includable in gross income for federal income
tax purposes, with consideration given to preservation of principal, primarily
from investments in a diversified portfolio of long-term investment grade
municipal bonds.
It is a fundamental policy of the Fund that under normal circumstances
it will invest at least 80% of its net assets in investment grade "Municipal
Securities" (or futures contracts or options on futures with respect thereto)
which, at the time of investment, are investment grade or in Municipal
Securities which are not rated if, based upon credit analysis by the Fund
Manager, it is believed that such securities are of comparable quality to such
rated bonds. Municipal Securities are notes and bonds issued by or on behalf of
states, territories and possessions of the United States and the District of
Columbia and their political subdivisions, agencies and instrumentalities. These
securities are traded primarily in the over-the-counter market. Such securities
may have fixed, variable or floating rates of interest. The interest on
investment grade Municipal Securities, in the opinion of Counsel for issuers and
the Fund, is not includable in gross income for federal income tax purposes, and
not subject to the alternative minimum tax. See the Appendix B for a further
description of Municipal Securities.
Investment grade securities in which the Fund may invest are those
bonds rated within the three highest ratings by Moody's (Aaa, Aa, A) or S&P
(AAA, AA, A); notes given one of the three highest ratings by Moody's (MIG1,
MIG2, MIG3) for notes; commercial paper rated P-1 by Moody's or A-1 by S&P; and
variable rate securities rated VMIG1 or VMIG2 by Moody's.
While there are no maturity restrictions on the Municipal Securities in
which the Fund invests, the average maturity is expected to range between 10 and
25 years. The Fund Manager will actively manage the Fund, adjusting the average
Fund maturity and utilizing futures contracts and options on futures as a
defensive measure according to its judgment of anticipated interest rates.
During periods of rising interest rates and falling prices, a shorter weighted
average maturity may be adopted to cushion the effect of bond price declines on
the Fund's net asset value. When rates are falling and prices are rising, a
longer weighted average maturity rate may be adopted. For a discussion on
futures and their related risks, see "Certain Investment Techniques and
Associated Risks."
The Fund may also invest up to 20% of its net assets in cash, cash
equivalents and debt securities, the interest from which may be subject to
federal income tax. Investments in taxable
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securities will be limited to investment grade corporate debt securities and
U.S. Government Securities.
The Fund will not invest more than 20% of its net assets in Municipal
Securities the interest on which is subject to federal alternative minimum tax.
Flexible Fund
Managed Fund. The objective of the Managed Fund is growth of capital
over time through investment in a portfolio consisting of common stocks, bonds
and cash equivalents, the percentages of which will vary based on the Fund
Manager's assessments of the relative outlook for such investments. In seeking
to achieve its investment objective, the types of equity securities in which the
Fund may invest will be the same as those in which the Equity Funds invest. Debt
securities are expected to be predominantly investment grade intermediate to
long-term U.S. Government and corporate debt, although the Fund will also invest
in high quality short-term money market and cash equivalent securities and may
invest almost all of its assets in such securities when the Fund Manager deems
it advisable in order to preserve capital. In addition, the Fund may also invest
up to 20% of its assets in foreign securities provided that they are listed on a
domestic or foreign securities exchange or are represented by ADRs listed on a
domestic securities exchange or traded in the United States over-the-counter
market.
The allocation of the Fund's assets among the different types of
permitted investments will vary from time to time based upon the Fund Manager's
evaluation of economic and market trends and its perception of the relative
values available from such types of securities at any given time. There is
neither a minimum nor a maximum percentage of the Fund's assets that may, at any
given time, be invested in any of the types of investments identified above.
Consequently, while the Fund will earn income to the extent it is invested in
bonds or cash equivalents, the Fund does not have any specific income objective.
However, it is a policy of the Fund that it will not invest more than 5% of the
value of its total assets in high-yield securities.
Money Market Fund
Money Market Fund. The investment objective of the Money Market Fund is
to provide the highest possible level of current income, consistent with
preservation of capital and liquidity. Securities in which the Fund will invest
may not yield as high a level of current income as securities of lower quality
and longer maturity which generally have less liquidity and greater market risk.
The Money Market Fund seeks to achieve its objective by investing in a
diversified portfolio of high-quality money market instruments, comprised of
U.S. dollar-denominated instruments which present minimal credit risks and are
of eligible quality which consist of the following:
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1. obligations issued or guaranteed as to principal and interest by the
United States Government or any agency or authority controlled or
supervised by and acting as an instrumentality of the U.S. Government
pursuant to authority granted by Congress;
2. commercial paper, negotiable certificates of deposit, letters of
credit, time deposits and bankers acceptances, of U.S. or foreign
banks, and U.S. or foreign savings and loans associations, which at the
date of investment have capital, surplus and undistributed profits as
of the date of their most recent published financial statements of
$500,000,000 or greater;
3. short-term corporate debt instruments (commercial paper or variable
amount master demand notes) rated "A-1" or "A-2" by S&P or "Prime 1" or
"Prime 2" by Moody's or Tier 1 by any two Nationally Recognized
Statistical Rating Organization ("NRSRO"), or, if not rated, issued by
a company rated at least "A" by any two NRSROs and about which the
Board of Directors of the Fund has ratified the Fund Manager's
independent determination that the instrument presents minimal credit
risks and is of high quality; however, investments in securities of all
issuers having the second highest rating (A-2/P-2) assigned shall be
limited to no more than five percent of the Fund's assets at the time
of purchase, with the investment of any one such issuer being limited
to not more than one percent of Fund assets at the time of purchase;
4. corporate obligations limited to non-convertible corporate debt
securities having one year or less remaining to maturity and which are
rated "AA" or better by S&P or "Aa" or better by Moody's; and
5. repurchase agreements with respect to any of the foregoing
obligations.
The Money Market Fund will limit its investment in the securities of
any one issuer to no more than five percent of Fund assets, measured at the time
of purchase.
In addition, the Money Market Fund will not purchase any security,
including any repurchase agreement maturing in more than seven days, which is
subject to legal or contractual delays on resale or which is not readily
marketable if more than 10% of the net assets of the Money Market Fund, taken at
market value would be invested in such securities.
After purchase by the Money Market Fund, a security may cease to be
rated or its rating may be reduced below the minimum required for purchase by
the Money Market Fund. Neither event will require a sale of such security by the
Money Market Fund. The Fund Manager will consider such event in its
determination of whether the Money Market Fund should continue to hold the
security provided that the security presents minimal credit risks and that
holding the security is in the best interests of the Fund. To the extent Moody's
or S&P may change their rating systems generally (as described in Appendix A)
the Money Market Fund will attempt to use comparable ratings as standards for
investments in accordance with investment policies contained herein and in the
Fund's Prospectus.
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The dollar-weighted average maturity of the Money Market Fund will be
90 days or less.
All investments of the Money Market Fund will be limited to instruments
which the Board of Directors determines are of eligible quality, which, if
instruments of foreign issuers, are United States dollar-denominated instruments
presenting minimal credit risk, and all of which are either:
1. of those rated in the two highest rating categories by any NRSRO, or
2. if the instrument is not rated, of comparable quality as determined
by the Board of Directors.
Generally, instruments with NRSRO ratings in the two highest grades are
considered "high quality." All of the money market investments will mature in
397 days or less. The Money Market Fund will use the amortized cost method of
securities valuation, as described more fully below in "Determination of Net
Asset Value."
CERTAIN INVESTMENT SECURITIES, TECHNIQUES
AND ASSOCIATED RISKS
Following is a description of certain investment techniques employed by
the Funds, and certain types of securities invested in by the Funds and
associated risks. Unless otherwise indicated, all of the Funds may use the
indicated techniques and invest in the indicated securities
Mortgage-Related Securities and Asset-Backed Securities
Up to 20% of the net assets of the Government Securities Fund may be
invested in assets other than U.S. Government Securities, including
collateralized mortgage-related securities ("CMOs") and asset-backed securities.
These securities are considered to be volatile and may be thinly traded. CMOs
are obligations fully collateralized by a portfolio of mortgages or
mortgage-related securities. Payments of principal and interest on the mortgages
are passed through to the holders of the CMOs on the same schedule as they are
received, although certain classes of CMOs have priority over others with
respect to the receipt of prepayments on the mortgages. Therefore, depending on
the type of CMOs in which the Government Securities Fund invests, the investment
may be subject to a greater or lesser risk of prepayment than other types of
mortgage-related securities.
While there are many versions of CMOs and asset-backed securities, some
include "Interest Only" or "IO" -- where all interest payments go to one class
of holders, "Principal Only" or "PO" -- where all of the principal goes to a
second class of holders, "Floaters" -- where the coupon rate floats in the same
direction as interest rates and "Inverse Floaters" --where the coupon rate
floats in the opposite direction as interest rates. All these securities are
volatile; they also have particular risks in differing interest rate
environments as described below.
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The yield to maturity on an IO class is extremely sensitive to the rate
of principal payments (including prepayments) on the related underlying mortgage
assets, and a rapid rate of principal payments may have a material adverse
effect on yield to maturity and, therefore, the market value of the IO. As
interest rates rise and fall, the value of IOs tends to move in the same
direction as interest rates. Accordingly, investment in IOs can theoretically be
expected to contribute to stabilizing the Fund's net asset value. However, if
the underlying mortgage assets experience greater than anticipated prepayments
of principal, the Fund may fail to fully recoup its initial investment in these
securities even if the securities are rated AAA or the equivalent. Conversely,
while the yield to maturity on a PO class is also extremely sensitive to rate of
principal payments (including prepayments) on the related underlying mortgage
assets, a slow rate of principal payments may have a material adverse effect on
yield to maturity and therefore the market value of the PO. As interest rates
rise and fall, the value of POs tends to move in the opposite direction from
interest rates. This is typical of most debt instruments.
Floaters and Inverse Floaters ("Floaters") are extremely sensitive to
the rise and fall in interest rates. The coupon rate on these securities is
based on various benchmarks, such as LIBOR ("London Inter-Bank Offered Rate")
and the 11th District cost of funds (the base rate). The coupon rate on Floaters
can be affected by a variety of terms. Floaters can be reset at fixed intervals
over the life of the Floater, float with a spread to the base rate or be a
certain percentage rate minus a certain base rate. Some Floaters have floors
below which the interest rate cannot be reset and/or ceilings above which the
interest rate cannot be reset. The coupon rate and/or market value of Floaters
tend to move in the same direction as the base rate while the coupon rate and/or
market value of Inverse Floaters tend to move in the opposite direction from the
base rate.
The market value of all CMOs and other asset-backed securities are
determined by supply and demand in the bid/ask market, interest rate movements,
the yield curve, forward rates, prepayment assumptions and credit of the
underlying issuer. Further, the price actually received on a sale may be
different from bids when the security is being priced. CMOs and asset-backed
securities tradeover a bid and ask market through several large market makers.
Due to the complexity and concentration of derivative securities, the liquidity
and, consequently, the volatility of these securities can be sharply influenced
by market demand.
Asset-backed and mortgage-related securities may not be readily
marketable. To the extent any of these securities are not readily marketable in
the judgment of the Fund Manager (subject to the oversight of the Board of
Directors), the investment restriction limiting the Fund's investment in
illiquid instruments to not more than 10% of the value of its net assets will
apply. However, IOs and POs issued by the U.S. Government, its agencies and
instrumentalities, and backed by fixed-rate mortgages may be excluded from this
limit, if, in the judgment of the Fund Manager (subject to the oversight of the
Board of Directors) such IOs and POs are readily marketable. The Government
Securities Fund does not intend to invest in residual interests, privately
issued securities or subordinated classes of underlying mortgages.
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High-Yield Securities
Notwithstanding the investment policies and restrictions applicable to
the High-Yield Bond and Managed Funds which were designed to reduce risks
associated with such investments, high-yield securities may carry higher levels
of risk than many other types of income producing securities. These risks are of
three basic types: the risk that the issuer of the high-yield bond will default
in the payment of principal and interest; the risk that the value of the bond
will decline due to rising interest rates, economic conditions, or public
perception; and the risk that the investor in such bonds may not be able to
readily sell such bonds. Each of the major categories of risk are affected by
various factors, as discussed below:
High-Yield Bond Market. The high-yield bond market is relatively new
and has grown in the context of a long economic expansion. Any downturn in the
economy may have a negative impact on the perceived ability of the issuer to
make principal and interest payments which may adversely affect the value of
outstanding high-yield securities and reduce market liquidity.
Sensitivity To Interest Rate and Economic Changes. In general, the
market prices of bonds bear an inverse relationship to interest rates; as
interest rates increase, the prices of bonds decrease. The same relationship may
hold for high-yield bonds, but in the past high-yield bonds have been somewhat
less sensitive to interest rate changes than treasury and investment grade
bonds. While the price of high-yield bonds may not decline as much, relatively,
as the prices of treasury or investment grade bonds decline in an environment of
rising interest rates, the market price, or value, of a high-yield bond will be
expected to decrease in periods of increasing interest rates, affecting
impacting the net asset value of the High-Yield Bond Fund. High-yield bond
prices may not increase as much, relatively, as the prices of treasury or
investment grade bonds in periods of decreasing interest rates. Payments of
principal and interest on bonds are dependent upon the issuer's ability to pay.
Because of the generally lower creditworthiness of issuers of high-yield bonds,
changes in the economic environment generally, or in an issuer's particular
industry or business, may severely impair the ability of the issuer to make
principal and interest payments and may depress the price of high-yield
securities more significantly than such changes would affect higher-rated,
investment-grade securities.
Payment Expectations. Many high-yield bonds contain redemption or call
provisions which might be expected to be exercised in periods of decreasing
interest rates. Should bonds in which the High-Yield Bond Fund has invested be
redeemed or called during such an interest rate environment, the Fund would have
to sell such securities without reference to their investment merit and reinvest
the proceeds received in lower yielding securities, resulting in a decreased
return for investors in the High-Yield Bond Fund. In addition, such redemptions
or calls may reduce the High-Yield Bond Fund's asset base over which the Fund's
investment expenses may be spread.
Liquidity and Valuation. Because of periods of relative illiquidity,
many high-yield bonds may be thinly traded. As a result, the ability to
accurately value high-yield bonds and
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<PAGE> 194
determine the net asset value of the High-Yield Bond Fund, as well as the Fund's
ability to sell such securities, may be limited. Public perception of and
adverse publicity concerning high-yield securities may have a significant
negative impact on the value and liquidity of high-yield securities, even though
not based on fundamental investment analysis.
Tax Considerations. To the extent that a Fund invests in securities
structured as zero coupon bonds, or other securities issued with original issue
discount, the Fund will be required to report interest income even though no
cash interest payment is received. Because such income is not represented by
cash, the Fund may be required to sell other securities in order to satisfy the
distribution requirements applicable to regulated investment companies under the
Internal Revenue Code of 1986 ("IRC").
Fund Composition As of December 31, 1998, the High-Yield Bond Fund consisted of
securities classified as follows:
<TABLE>
<CAPTION>
PERCENTAGE OF
CATEGORY FUND
<S> <C>
AAA 3%
BBB 6%
BB 28%
B 58%
CCC 2%
Non-rated* 3%
</TABLE>
- ----------
* Equivalent ratings for these securities would have been B.
REITS
Each Fund may invest up to 10% of its total assets in the securities of
real estate investment trusts ("REITs"). REITs are pooled investment vehicles
which invest in real estate and real estate-related loans. The value of a REIT's
shares generally is affected by changes in the value of the underlying
investments of the trust.
Hedging Transactions
Except as otherwise indicated, the Fund Managers, other than for the
Money Market Fund, may invest in derivatives, which are discussed in detail
below, to seek to hedge all or a portion of a Fund's assets against market value
changes resulting from changes in equity values, interest rates and currency
fluctuations. Hedging is a means of offsetting, or neutralizing, the price
movement of an investment by making another investment, the price of which
should tend to move in the opposite direction from the original investment.
The Funds will not engage in hedging transactions for speculative
purposes but only as a hedge against changes resulting from market conditions in
the values of securities owned or expected to be owned by the Funds. Unless
otherwise indicated, a Fund will not enter into a hedging transaction (except
for closing transactions) if, immediately thereafter, the sum of the
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amount of the initial deposits and premiums on open contracts and options would
exceed 5% of the Fund's total assets taken at current value.
Certain Securities
The Funds may invest in the following described securities, except as
otherwise indicated. These securities are commonly referred to as derivatives. A
Fund's investment in such securities, in the aggregate, may not exceed 5% of net
assets at the time of investment; provided, however, that the International
Growth Fund, the High-Yield Bond Fund, and the Government Securities Fund may
invest up to 20% of their net assets in such securities.
Call Options. The Funds, other than the Money Market Fund, may write
(sell) call options that are listed on national securities exchanges or are
available in the over-the-counter market through primary broker-dealers. Call
options are short-term contracts with a duration of nine months or less. Such
Funds may only write call options which are "covered," meaning that the Fund
either owns the underlying security or has an absolute and immediate right to
acquire that security, without additional cash consideration, upon conversion or
exchange of other securities currently held in the Fund. In addition, no Fund
will, prior to the expiration of a call option, permit the call to become
uncovered. If a Fund writes a call option, the purchaser of the option has the
right to buy (and the Fund has the obligation to sell) the underlying security
at the exercise price throughout the term of the option. The amount paid to the
Fund by the purchaser of the option is the "premium." The Fund's obligation to
deliver the underlying security against payment of the exercise price would
terminate either upon expiration of the option or earlier if the Fund were to
effect a "closing purchase transaction" through the purchase of an equivalent
option on an exchange. The Fund would not be able to effect a closing purchase
transaction after it had received notice of exercise. The International Growth
Fund may purchase and write covered call options on foreign and U.S. securities
and indices and enter into related closing transactions.
Generally, a Fund intends to write listed covered calls when it
anticipates that the rate of return from so doing is attractive, taking into
consideration the premium income to be received, the risks of a decline in
securities prices during the term of the option, the probability that closing
purchase transactions will be available if a sale of the securities is desired
prior to the exercise, or expiration of the options, and the cost of entering
into such transactions. A principal reason for writing calls on a securities
portfolio is to attempt to realize, through the receipt of premium income, a
greater return than would be earned on the securities alone. A covered call
writer such as a Fund, which owns the underlying security, has, in return for
the premium, given up the opportunity for profit from a price increase in the
underlying security above the exercise price, but it has retained the risk of
loss should the price of the security decline.
The writing of covered call options involves certain risks. A principal
risk arises because exchange and over-the-counter markets for options may be
limited; it is impossible to predict the amount of trading interest which may
exist in such options, and there can be no assurance that
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<PAGE> 196
viable exchange and over-the-counter markets will develop or continue. The Funds
will write covered call options only if there appears to be a liquid secondary
market for such options. If, however, an option is written and a liquid
secondary market does not exist, it may be impossible to effect a closing
purchase transaction in the option. In that event, the Fund may not be able to
sell the underlying security until the option expires or the option is
exercised, even though it may be advantageous to sell the underlying security
before that time.
Puts. The Funds, except the Government Securities Fund and the Money
Market Fund, may purchase put options ("Puts") which relate to (i) securities
(whether or not they hold such securities); (ii) Index Options (described below
whether or not they hold such Options); or (iii) broadly-based stock indexes.
The Funds, except the Government Securities Fund and Money Market Fund, may
write covered Puts. The Funds will receive premium income from writing covered
Puts, although it may be required, when the put is exercised, to purchase
securities at higher prices than the current market price. The High-Yield Bond
Fund may invest up to 10% of the value of the Fund in Puts.
Futures Contracts. All Funds, other than the Money Market Fund, may
enter into contracts for the future acquisition or delivery of securities
("Futures Contracts") including index contracts and foreign currencies, and may
also purchase and sell call options on Futures Contracts. These Funds may use
this investment technique to hedge against anticipated future adverse price
changes which otherwise might either adversely affect the value of the Fund's
securities or currencies held in the Fund, or to hedge anticipated future price
changes which adversely affect the prices of stocks, long-term bonds or
currencies which the Fund intends to purchase at a later date. Alternatively,
the Funds may enter into Futures Contracts in order to hedge against a change in
interest rates which will result in the premature call at par value of certain
securities which the Fund has purchased at a premium. If stock, bond or currency
prices or interest rates move in an unexpected manner, the Fund would not
achieve the anticipated benefits of Futures Contracts.
The use of Futures Contracts involves special considerations or risks
not associated with the primary activities engaged in by any Funds. 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) risk that the Fund Manager may be incorrect in its prediction
of movements in stock, bond, currency prices and interest rates.
Index Options. All the Equity Funds may invest in options on stock
indexes. These options are based on indexes of stock prices that change in value
according to the market value of the stocks they include. Some stock index
options are based on a broad market index, such as the New York Stock Exchange
Composite Index or the S&P 500. Other index options are based on a market
segment or on stocks in a single industry. Stock index options are traded
primarily on securities exchanges.
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Because the value of an index option depends primarily on movements in
the value of the index rather than in the price of a single security, whether a
Fund will realize a gain or loss from purchasing or writing an option on a stock
index depends on movements in the level of stock prices in the stock market
generally or, in the case of certain indexes, in an industry or market segment
rather than changes in the price of a particular security. Consequently,
successful use of stock index options by a Fund will depend on that Fund
Manager's ability to predict movements in the direction of the stock market
generally or in a particular industry. This requires different skills and
techniques than predicting changes in the value of individual securities.
Interest Rate Swaps. In order to attempt to protect the Fund's
investments from interest rate fluctuations, the Funds may engage in interest
rate swaps. Generally, the Funds tend to use interest rate swaps as a hedge and
not as a speculative investment. Interest rate swaps involve the exchange
between the Fund and another party of their respective rights to receive
interest (e.g., an exchange of fixed rate payments for floating rate payments).
For example, if the Fund holds an interest-paying security whose interest rate
is reset once a year, it may swap the right to receive interest at a rate that
is reset daily. Such a swap position would offset changes in the value of the
underlying security because of subsequent changes in interest rates. This would
protect the Fund from a decline in the value of the underlying security due to
rising rates, but would also limit its ability to benefit from falling interest
rates.
The Fund will enter into interest rate swaps only on a net basis (i.e.,
the two payments streams will be netted out, with Fund receiving or paying as
the case may be, only the net amount of the two payments). The net amount of the
excess, if any, of the Fund's obligations over its entitlements with respect to
each interest rate swap will be accrued on a daily basis, and an amount of cash
or liquid high grade debt securities having an aggregate net asset value at
least equal to the accrued excess, will be maintained in a segregated account by
the Fund's custodian bank.
The use of interest rate swaps involves investment techniques and risks
different from those associated with ordinary portfolio security transactions.
If a Fund Manager is incorrect in its forecasts of market values, interest rates
and other applicable factors, the investment performance of the Fund will be
less favorable than it would have been if this investment technique were never
used. Interest rate swaps do not involve the delivery of securities or other
underlying assets or principal. Thus, if the other party to an interest rate
swap defaults, the Fund's risk of loss consists of the net amount of interest
payments that the Fund is contractually entitled to receive.
Foreign Currency Values and Transactions
Investments in foreign securities will usually involve currencies of
foreign countries, and the value of the assets of the International Growth Fund
and the Global Financial Services Fund (and of the other Funds that may invest
in foreign securities to a much lesser extent) as measured in United States
dollars may be affected favorably or unfavorably by changes in foreign currency
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<PAGE> 198
exchange rates and exchange control regulations, and the International Growth
Fund may incur costs in connection with conversions between various currencies.
The normal currency allocation of the International Growth Fund is
identical to the currency mix of the Benchmark, the MSCI EAFE Index. The Fund
expects to maintain this normal currency exposure when global currency markets
are fairly priced relative to each other and relative to associated risks. The
Fund may actively deviate from such normal currency allocations to take
advantage of or to protect the Fund from risk and return characteristics of the
currencies and short-term interest rates when those prices deviate significantly
from fundamental value. Deviations from the Benchmark are determined by the Fund
Manager based upon its research.
To manage exposure to currency fluctuations, the Fund may alter equity
or money market exposures (in its normal asset allocation mix as previously
identified), enter into forward currency exchange contracts, buy or sell
options, futures or options on futures relating to foreign currencies and may
purchase securities indexed to currency baskets. The Fund will also use these
currency exchange techniques in the normal course of business to hedge against
adverse changes in exchange rates in connection with purchases and sales of
securities. Some of these strategies may require the Fund to set aside liquid
assets in a segregated custodial account to cover its obligations. These
techniques are further described below.
The Fund may conduct its foreign currency exchange transactions on a
spot (i.e., cash) basis at the spot rate prevailing in the foreign currency
exchange market or through entering into contracts to purchase or sell foreign
currencies at a future date (i.e., "forward foreign currency" contract or
"forward" contract). A forward contract involves an obligation to purchase or
sell a specific currency amount at a future date, which may be any fixed number
of days from the date of the contract, agreed upon by the parties, at a price
set at the time of the contract. The Fund will convert currency on a spot basis
from time to time and investors should be aware of the potential costs of
currency conversion.
When a Fund Manager believes that the currency of a particular country
may suffer a significant decline against the U.S. dollar or against another
currency, the Fund may enter into a currency contract to sell, for a fixed
amount of U.S. dollars or other appropriate currency, the amount of foreign
currency approximating the value of some or all of the Fund's securities
denominated in such foreign currency.
At the maturity of a forward contract, the Fund may either sell a
portfolio security and make delivery of the foreign currency, or it may retain
the security and terminate its contractual obligation to deliver the foreign
currency by repurchasing an "offsetting" contract with the same currency trader
obligating it to purchase, on the same maturity date, the same amount of the
foreign currency. The Fund may realize a gain or loss from currency
transactions.
The Fund also may purchase and write put and call options on foreign
currencies (traded on U.S. and foreign exchanges or over-the-counter markets) to
manage the Fund's exposure to
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<PAGE> 199
changes in currency exchange rates. Call options on foreign currency written by
the Fund will be "covered", which means that the Fund will own an equal amount
of the underlying foreign currency. With respect to put options on foreign
currency written by the Fund, the Fund will establish a segregated account with
its custodian bank consisting of cash, U.S. government securities or other
high-grade liquid debt securities in an amount equal to the amount the Fund
would be required to pay upon exercise of the put.
Certain Other Securities
Except as otherwise indicated, the Funds may purchase the following
securities, the purchase of which involves certain risks described below. Unless
otherwise indicated, a Fund will not purchase a category of such securities if
the value of such category, taken at current value, would exceed 5% of the
Fund's total assets.
Master Demand Notes. All Funds may purchase variable amount master
demand notes. Variable amount master demand notes are demand obligations that
permit the investment of fluctuating amounts at varying market rates of interest
pursuant to arrangements between the issuer and a commercial bank acting as
agent for the payees of such notes whereby both parties have the right to vary
the amount of the outstanding indebtedness on the notes. Since there is no
secondary market for these notes, the appropriate Fund Managers, subject to the
overall review of the Fund's Directors and the Advisor, monitor the financial
condition of the issuers to evaluate their ability to repay the notes.
Repurchase Agreements. All Funds may enter into repurchase agreements
having maturities of one business day When a Fund acquires securities from a
bank or broker-dealer, it may simultaneously enter into a repurchase agreement
with the same seller pursuant to which the seller agrees at the time of sale to
repurchase the security at a mutually agreed upon time and price. In such
instances, the Corporation's Custodian has possession of the security or
collateral for the seller's obligation. If the seller should default on its
obligation to repurchase the securities, the Fund may experience delays,
difficulties or other costs when selling the securities held as collateral and
may incur a loss if the value of the collateral declines. The appropriate Fund
Managers, subject to the overall review by the Corporation's Directors and the
Advisor, monitor the value of the collateral as to repurchase agreements, and
they monitor the creditworthiness of the seller and must find it satisfactory
before engaging in repurchase agreements. The Funds enter into repurchase
agreements only with Federal Reserve member banks that have net worth of at
least $100,000,000 and outstanding commercial paper of the two highest rating
categories assigned by Moody's or S&P or with broker-dealers that are registered
with the Securities and Exchange Commission, are members of the National
Association of Securities Dealers, Inc. ("NASD") and have similarly rated
commercial paper outstanding. Any repurchase agreements entered into by the
Funds will be fully collateralized and marked to market daily, other than those
entered into by the Money Market Fund, which are valued on an amortized cost
basis.
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Restricted or Illiquid Securities. Each Fund may invest up to 10% of
its net assets in restricted securities (privately placed equity or debt
securities) or other securities which are not readily marketable.
Foreign Securities. As noted above, the International Growth Fund will
invest primarily in foreign securities and the Global Financial Services Fund
may invest 50% or more of its total assets in such securities. All other Funds,
except the Government Securities Fund, the Tax-Exempt Income Fund and the Money
Market Fund, may, subject to the 20% limitation, invest in foreign securities as
well as both sponsored and unsponsored ADRs, and EDRs which are securities of
U.S. issuers backed by securities of foreign issuers. There may be less
information available about unsponsored ADRs and EDRs, and therefore, they may
carry higher credit risks. The Funds may also invest in securities of foreign
branches of domestic banks and domestic branches of foreign banks.
Investments in foreign equity and debt securities involve risks
different from those encountered when investing in securities of domestic
issuers. The appropriate Fund Managers and the Advisor, subject to the overall
review of the Fund's Directors, evaluate the risks and opportunities when
investing in foreign securities. Such risks include trade balances and
imbalances and related economic policies; currency exchange rate fluctuations;
foreign exchange control policies; expropriation or confiscatory taxation;
limitations on the removal of funds or other assets; political or social
instability; the diverse structure and liquidity of securities markets in
various countries and regions; policies of governments with respect to possible
nationalization of their own industries; and other specific local, political and
economic considerations.
Forward Commitments
Securities may be purchased on a "when issued" or on a "forward
delivery" basis, which means it may take as long as 120 days before such
obligations are delivered to a Fund. The purpose of such investments is to
attempt to obtain higher rates of return or lower purchase costs than would be
available for securities purchased for immediate delivery. Securities purchased
on a when issued or forward delivery basis involve a risk that the value of the
security to be purchased may decline prior to the settlement date. In addition,
if the dealer through which the trade is made fails to consummate the
transaction, the Fund may lose an advantageous yield or price. The Fund does not
accrue income prior to delivery of the securities in the case of forward
commitment purchases. The 5% limitation does not apply to the International
Growth, Government Securities and Tax-Exempt Income Funds which have a 20%
limitation.
Temporary Defensive Tactics
Any or all of the Funds may at times for defensive purposes, at the
determination of the Fund Manager, temporarily place all or a portion of their
assets in cash, short-term commercial paper (i.e., short-term unsecured
promissory notes issued by corporations to finance short-term credit needs),
United States Government securities, high-quality debt securities (including
"Eurodollar" and "Yankee Dollar" obligations, i.e., U.S. issuer borrowings
payable overseas in
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<PAGE> 201
U.S. funds and obligations of foreign issuers payable in U.S. funds), and
obligations of banks when in the judgment of the Fund Manager such investments
are appropriate in light of economic or market conditions. The Money Market Fund
may at times for defensive purposes temporarily place all or a portion of its
assets in cash, when in the judgment of the Fund Manager such an investment is
appropriate in light of economic or market conditions. For temporary defensive
purposes, the International Growth Fund may invest in all of the above, both
foreign and domestic, including foreign currency, foreign time deposits, and
foreign bank acceptances. When a Fund takes a defensive position, it may not be
following the fundamental investment policy of the Fund.
INVESTMENT RESTRICTIONS
Each of the Funds has adopted the following investment restrictions and
limitations which cannot be changed as to any individual Fund without approval
by the holders of a majority of the outstanding shares of the relevant Fund for
the purpose of reducing their exposure in specific situations. (As used in this
Statement of Additional Information, "a majority of the outstanding shares of
the relevant Fund" means the lesser of (i) 67% of the shares of the relevant
Fund represented at a meeting at which more than 50% of the outstanding shares
of that Fund are represented in person or by proxy or (ii) more than 50% of the
outstanding shares of the relevant Fund.) Except as otherwise set forth, no Fund
may:
1. As to 75% of its assets purchase the securities of any issuer if
such purchase would cause more than 5% of the value of its assets to be invested
in the securities of such issuer (except U.S. Government securities or those of
its agencies or instrumentalities as defined in the Investment Company Act of
1940), or purchase more than 10% of the outstanding securities, or more than 10%
of the outstanding voting securities, of any issuer. For purposes of this
restriction, each Fund will regard the entity which has ultimate responsibility
for the payment of interest and principal as the issuer.
2. Purchase securities of any company that has a continuous operating
history of less than three years (including that of predecessors) if such
securities would cause the Fund's investment in such companies taken at cost to
exceed 5% of the value of the Fund's total assets. (The Global Financial
Services High-Yield Bond and Tax-Exempt Income Funds are not subject to this
restriction.)
3. Purchase securities on margin, but it may obtain such short-term
credits as may be necessary for the clearance of purchases and sales of
securities and may make initial and maintenance margin deposits in connection
with options and futures contracts as permitted by its investment program.
4. Make short sales of securities, unless at the time of such sale, it
owns, or has the right to acquire at no additional cost to the Fund as the
result of the ownership of convertible or exchange securities, an equal amount
of such securities, and it will retain such securities so long as it is in a
short portion as to them. In no event will a Fund make short sales of securities
in
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such a manner that the value of its net assets used to cover such sales would
exceed 15% of the value of its net assets at any time. The short sales of the
type described above, which are called "short sales against the box," may be
used by a Fund when management believes that they will protect profits or limit
losses in investments.
5. Borrow money, except that a Fund may borrow from banks as a
temporary measure for emergency purposes and not for investment, in which case
such borrowings may not be in excess of the lesser of: (a) 5% of its total
assets taken at cost; or (b) 5% of the value of its assets at the time that the
loan is made. A Fund will not purchase securities while borrowings are
outstanding. A Fund will not pledge, mortgage or hypothecate its assets taken at
market value to an extent greater than the lesser of 10% of the value of its
net assets or 5% of the value of its total assets taken at cost.
6. Purchase or retain the securities of any issuer if those officers
and directors of a Fund or of its investment adviser holding individually more
than 1/2 of 1% of the securities of such issuer together own more than 5% of the
securities of such issuer. (The Global Financial Services Fund is not subject to
this restriction).
7. Purchase the securities of any other investment company except in
the open market in a transaction involving no commission or profit to a sponsor
or dealer (other than the customary sales load or broker's commission) or as a
part of a merger, consolidation, acquisition or reorganization.
8. Invest in real estate; this restriction does not prohibit a Fund
from investing in the securities of real estate investment trusts.
9. Invest for the purpose of exercising control of management of any
company.
10. Underwrite securities issued by others except to the extent that
the disposal of an investment position may qualify any Fund or the Corporation
as an underwriter as that term is defined under the Securities Act of 1933, as
amended,
11. Except for the Money Market Fund, the Government Securities Fund
and the Global Financial Services Fund, make any investment which would cause
more than 25% of the total assets of the Fund to be invested in securities
issued by companies principally engaged in any one industry; provided, however,
that: (i) this limitation does not apply to investments in U.S. Government
Securities as well as its agencies and instrumentalities, general obligation
bonds, municipal securities other than industrial development bonds issued by
non-governmental users, and (ii) utility companies will be divided according to
their services (for example, gas, gas transmission, electric, electric and gas,
and telephone will each be considered a separate industry). The Money Market
Fund may invest more than 25% of its total assets in U.S. Government Securities
as well as its agencies and instrumentalities and certain bank instruments
issued by domestic banks. The instruments in which the Money Market Fund
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may invest in excess of 25%, in the aggregate, of its total assets are letters
of credit and guarantees, negotiable certificates of deposit, time deposits,
commercial paper and bankers acceptances meeting the investment criteria for the
Money Market Fund. The Global Financial Services Fund will invest 25% or more of
its total assets in companies in the financial services industry.
12. Participate with others in any trading account. This restriction
does not prohibit the Corporation or any Fund from combining portfolio orders
with those of other Funds or other clients of the investment adviser or Fund
Managers when to do so would permit the Corporation and one or more Funds to
obtain a large-volume discount from ordinary brokerage commissions when
negotiated rates are available. (The Global Financial Service Fund is not
subject to this restriction).
13. Invest more than 10% of the value of its assets in securities which
are subject to legal or contractual restrictions on resale or are otherwise not
readily salable. (The Global Financial Services Fund is not subject to this
restriction.)
14. Issue senior securities, except as permitted by the Investment
Company Act of 1940 and rules thereunder.
15. Invest in commodities or commodities contracts, except the Funds
may purchase and sell options, futures contracts and options on futures
contracts in accordance with their investment policies as set forth in this
registration statement.
16. Make loans, except by purchasing debt securities or entering into
repurchase agreements, in each case in accordance with its investment policies
as set forth in this Statement of Additional Information.
In addition, management of the Corporation has adopted the following
restrictions which apply to all of the Funds and may be changed only by the
Board of Directors of the Corporation. No Fund will: (i) lend its assets to any
person or individual, except by the purchase of bonds or other debt obligations
customarily sold to institutional investors, (ii) invest more than 5% of the
value of its net assets, valued at the lower of cost or market, in warrants
(Included in that amount, but not to exceed 2% of the value of the Fund's net
assets, may be warrants which are not listed on the New York or American Stock
Exchanges. Warrants acquired by a Fund in units or attached to securities may be
deemed to be without value.), (iii) invest in oil, gas, or other mineral leases
or engage in arbitrage transactions, or (iv) invest more than 15% of its total
assets in the securities of real estate investment trusts ("REITs").
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If a percentage restriction is adhered to at the time of an investment,
a later increase or decrease in the investment's percentage of the value of a
Fund's total assets resulting from a change in portfolio value or assets will
not constitute a violation of the percentage restrictions.
PORTFOLIO TURNOVER
A portfolio turnover rate is, in summary, the percentage computed by
dividing the lesser of a Fund's purchases or sales of securities by the average
investments of that Fund. The Fund Managers intend to manage each Fund's assets
by buying and selling securities to help attain its investment objective. This
may result in increases or decreases in a Fund's current income available for
distribution to its shareholders. While none of the Funds is managed with the
intent of generating short-term capital gains, each of the Funds may dispose of
investments (including money market instruments) regardless of the holding
period if, in the opinion of the Fund Manager, an issuer's creditworthiness or
perceived changes in a company's growth prospects or asset value make selling
them advisable. Such an investment decision may result in capital gains or
losses and could result in a high portfolio turnover rate during a given
period, resulting in increased transaction costs related to equity securities.
Disposing of debt securities in these circumstances should not increase direct
transaction costs since debt securities are normally traded on a principal basis
without brokerage commissions. However, such transactions do involve a mark-up
or mark-down of the price.
The portfolio turnover rates of the Funds cannot be accurately
predicted. Nevertheless, the annual portfolio turnover rates of the Funds (other
than the Money Market Fund for which, due to the short-term nature of its
investment, a portfolio turn-over rate is not applicable and the High-Yield Bond
Fund) are not expected to exceed 100%. A 100% portfolio turnover rate would
occur, for example, if all the securities in a Fund's investment portfolio were
replaced once in a period of one year.
The portfolio turnover rate for the Enterprise High-Yield Bond Fund was
180.13% in 1996, and 175.38% in 1997. These rates exceeded 100% due to several
factors, including a declining level of interest rates, a reduction in risk
premiums, and healthy stock and bank loan markets. As a result of these
conditions, the Fund experienced an abnormally high amount of redemptions and
tenders for existing positions. The Fund Manager has taken measures to
potentially improve the overall call protection of the Fund in order to capture
the total return potentially made available by declining medium and long-term
interest rates.
During 1998, the portfolio turnover rate for the Small Company Growth
Fund exceeded 100% due to a change in management style which resulted from the
appointment of a new Fund Manager.
During 1996, the portfolio turnover rate for the Small Company Value
Fund was 143.58% It exceeded 100% principally due to a change in management
style which resulted from the appointment of a new Fund Manager. In 1997, the
portfolio turnover rate for the Fund was 62.51%. The rate also exceeded 100%
during 1998 in order to employ the Fund Manager's strategy of selling shares of
stock once a catalyst has driven the stock's price to a target selling price.
MANAGEMENT OF THE CORPORATION
The Board of Directors of the Corporation is responsible for the
management of the business of the Corporation under the laws of Maryland, and it
is primarily responsible for reviewing the activities of Enterprise Capital
Management, Inc. (the "Adviser"), the various Fund Managers and Enterprise Fund
Distributors, Inc. (the "Distributor" or "EFD") under the Investment Advisor's
Agreement, the Fund Manager's Agreements, the Distributor's Agreement and the
Plans which relate to the operations of the Corporation and its Funds.
The Directors and officers of the Corporation, and their principal
occupations during the past five years, are set forth below. Directors who are
"interested persons", as defined in the
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1940 Act, are denoted by an asterisk. As to their duties relative to the
Corporation, the address of each is Atlanta Financial Center, 3343 Peachtree
Road, N.E., Suite 450, Atlanta, GA 30326.
<TABLE>
<CAPTION>
NAME, AGE AND POSITION WITH PRINCIPAL OCCUPATION
THE CORPORATION PAST FIVE YEARS
- ---------------------------- --------------------
<S> <C>
Arthur T. Dietz (75) President, ATD Advisory Corp. since 1996; President and
Director Chief Executive Officer, Strategic Fund Management, Inc.,
Member of the Audit Committee 1987-1995; Mills B. Lane Professor of Finance and
Banking, Emory University, 1954-1988; Chairman, First
Atlanta Investments, 1998-present; Trustee, Enterprise
Accumulation Trust.
*Samuel J. Foti (47) President and Chief Operating Officer, MONY Life
Director Insurance Company of New York ("MONY") since 1994;
Executive Vice President, MONY (1991-1994); Trustee,
MONY since 1993; Senior Vice President, MONY (1989 -
1991); Director, MONY Life Insurance Co. of America
since 1989; Director, MONY Brokerage, Inc. since 1990;
Director, MONY International Holdings, Inc. since 1994;
Director, MONY Life Insurance Company of the Americas,
Ltd. since 1994, MONY Bank & Trust Co. of the Americas,
Ltd. since 1994; Director, Life Insurance Marketing and
Research Associates; Chairman, Life Insurance Marketing
and Research Associates 1996 - 1997; Trustee, Enterprise
Accumulation Trust.
Arthur Howell (80) Of Counsel, law firm of Alston & Bird, Atlanta, Georgia
Director since 1987; President, Summit Industries, Inc.
Chairman of Audit Committee (manufacturer) since 1954; Chairman Crescent Banking
Co., Inc. since 1985; President, Jonesheirs, Inc.
(licensing entity) since 1975; Trustee, Enterprise
Accumulation Trust.
William A. Mitchell, Jr.(59) President/CEO, Carter & Associates (real estate
Director development), Atlanta, Georgia since 1994; Director, John
Wieland Homes (commercial residential builders) since 1992;
Trustee, Enterprise Accumulation Trust.
Lonnie H. Pope (65) Chief Executive Officer, Longleaf Industries, Inc.
Director (chemical manufacturing) (1996-present); formerly President and
Member of the Audit Committee Chief Executive Officer of AFF, Inc. (aromatics manufacturing)
from 1987 to 1998; Trustee, Enterprise Accumulation Trust
</TABLE>
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<TABLE>
<S> <C>
*Michael I. Roth (53) Chairman and Chief Executive Officer, MONY since 1993;
Director President and Chief Executive Officer, MONY (1991-
1993); Director, MONY Life Insurance Company of America since
1991; Director, ARES Holdings Inc. since 1995; 1740 Advisers, Inc.
since 1992; MONY CS, Inc. since 1989; Executive Vice President
and Chief Financial Officer, MONY (1989-1991); Executive Vice
President and Chief Financial Officer, Primerica Corporation
(1987); Executive Vice President, Primerica Corporation
(1982-1987); Trustee, Enterprise Accumulation Trust; Director,
American Council of Life Insurance (ACLI);Director, the Life
Insurance Counsel of New York; Director, Pitney Bowes, Inc.;
Director, Promus Hotel Corporation.
*Victor Ugolyn (51) Chairman, President and Chief Executive Officer, The
Director Enterprise Group of Funds, Inc. since 1991; Chairman,
President and Chief Executive Officer, Enterprise Capital
and Enterprise Fund Distributors, Inc. since 1991;
Chairman, President and Chief Executive Officer;
Enterprise Accumulation Trust; Vice Chairman and Chief
Marketing Officer, Value Line Securities, Inc. (1986-1991).
Catherine R. McClellan (43)
Secretary Secretary, Enterprise Accumulation Trust since 1994;
Senior Vice President, Secretary and Chief Counsel,
Enterprise Capital Management, Inc. since 1989;
Senior Vice President, Secretary and Chief Counsel,
Enterprise Fund Distributors, Inc. since 1989.
Herbert M. Williamson (48) Assistant Secretary and Treasurer, Enterprise Accumulation
Treasurer Trust, Enterprise Capital Management, Inc. and Enterprise
Fund Distributors, Inc. since 1989.
Phillip G. Goff (35) Vice President and Chief Financial Officer, Enterprise
Vice President Accumulation Trust, Enterprise Capital Management, Inc.
and Enterprise Fund Distributors, Inc. 1995 - present; Audit
Manager, Coopers & Lybrand LLP, 1991 - 1995.
</TABLE>
* Messrs. Foti, Roth and Ugolyn are "interested persons" of the
Corporation, of the Advisor, and of the Distributor, as that term is
defined in the Investment Act of 1940.
Arthur T. Dietz, Arthur Howell and Lonnie H. Pope also serve on the
Audit Committee of the Board of Directors. The Audit Committee is charged with
recommending to the full
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<PAGE> 207
Board the engagement or discharge of the Corporation's independent accountants;
directing investigations into matters within the scope of the independent
accountants' duties; reviewing with the independent accountants the audit plan
and results of the audit; approving professional services provided by the
independent accountants and other accounting firms prior to the performance of
such services; reviewing the independence of the independent accountants;
considering the range of audit and non-audit fees; and preparing and submitting
Committee minutes to the full Board. Arthur T. Dietz and Victor Ugolyn also
serve on the Valuation Committee of the Board of Directors.
The Corporation pays fees to those directors who are not "interested
persons" of the Corporation at the rate of $12,500 per director per year plus
$625 for each regular, special or committee meeting attended. The Corporation
pays no salaries, fees or compensation to any of its officers, since these
expenses are borne by the Advisor. No fees were paid to the "interested"
Directors of the Corporation.
The following sets forth compensation paid to each of the Directors
during 1998:
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
Name Aggregate Pension or Estimated Total
Compensa- Retirement Annual Compensation
tion from Benefits Benefits from the
the Corporation Accrued as upon Corporation
part of Retirement and Fund
Fund Complex
Expenses paid to
Directors*
<S> <C> <C> <C> <C>
Arthur T. Dietz $14,275 None None $25,875
Arthur Howell $14,800 None None $26,875
William A.
Mitchell, Jr. $13,350 None None $24,625
Lonnie H. Pope $14,275 None None $26,875
</TABLE>
* Each Director received fees for services as a Trustee of Enterprise
Accumulation Trust.
Directors, former directors, employees or retirees of the Corporation,
or of MONY and its subsidiaries and members of their families, or MONY and its
subsidiaries and any employee benefit plans of the foregoing may purchase Class
A shares at net asset value.
At April 3, 1999, the officers and Directors of the Fund as a group
owned less than one percent of the shares of each Fund.
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<PAGE> 208
The following shareholders owned of record or beneficially 5% or more
of the indicated Fund Class' shares outstanding as of [ ]:
A shareholder who owns beneficially, directly or indirectly, 25% or
more of a Fund's outstanding voting securities may be deemed to "control" (as
defined in the 1940 Act) that Fund.
INVESTMENT ADVISORY AND OTHER SERVICES
Investment Advisory Agreement
The Corporation, on behalf of each Fund, has entered into an Investment
Advisory Agreement (the "Advisor's Agreement") with the Advisor which, in turn,
has entered into Fund Manager's Agreements with each of the Fund Managers. The
Advisor is a subsidiary of MONY Life Insurance Company ("MONY"), one of the
nation's largest insurance companies, and is a second-tier subsidiary of The
MONY Group Inc. The Advisor was incorporated in 1986. The Advisor's address is
3343 Peachtree Road, Suite 450, Atlanta, Georgia 30326. Victor Ugolyn, who is
President of the Fund, is also Chairman of the Board and President of the
Advisor.
The Advisor's Agreement obligates the Advisor to provide investment
advisory services to the Funds, to furnish the Corporation with certain
administrative, clerical, bookkeeping and statistical services, office space and
facilities, and to pay the compensation of the officers of the Corporation. Each
Fund pays all other expenses incurred in its operation, including redemption
expenses, expenses of portfolio transactions, shareholder servicing costs,
mailing costs, expenses of registering the shares under federal and state
securities laws, accounting and pricing costs (including the daily calculation
of net asset value and daily dividends), interest, certain taxes, legal
services, auditing services, charges of the custodian and transfer agent, and
other expenses attributable to an individual account. Each Fund also pays a
portion of the Corporation's general administrative expenses. These expenses are
allocated to the Funds either on the basis of their asset size, on the basis of
special needs of any Fund, or equally as is deemed appropriate. These expenses
include expenses such as: director fees; [state franchise taxes]; custodial,
transfer agent, brokerage, auditing and legal services; the printing of
prospectuses, proxies, registration statements and shareholder reports sent to
existing shareholders; printing and issuance of stock certificates; expenses
relating to bookkeeping, recording and determining the net asset value of
shares; the expenses of qualification of a Fund's shares under the federal and
state securities laws; and any other expenses properly payable by the
Corporation that are allocable to the respective Funds. Litigation costs, if
any, may be directly allocable to the Funds or allocated on the basis of the
size of the respective Funds. The Board of Directors annually reviews allocation
of expenses among the Funds and has been determined that this is an appropriate
method of allocation of expenses.
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<PAGE> 209
The Advisor has advised the Corporation that it will reimburse such
portion of the fees due to it under the Advisor's Agreement as is necessary to
assure, for the period commencing January 1, 1999, and ending no earlier than
December 31, 1999, that expenses incurred by the Funds will not exceed the
following percentages of average annual assets (annualized for periods of less
than a fiscal year): Growth (A) 1.60%; (B) 2.15%; (C) 2.15%; Growth and Income
(A) 1.50%; (B) 2.05%; (C) 2.05%; Equity (A) 1.60%; (B) 2.15%; (C) 2.15%; Equity
Income (A) 1.50%; (B) 2.05%; (C) 2.05%; Capital Appreciation (A) 1.75%; (B)
2.30%; (C) 2.30%; Small Company Growth (A) 1.85%; (B) 2.40%; (C) 2.40%; Small
Company Value (A) 1.75%; (B) 2.30%; (C) 2.30%; International Growth (A) 2.00%;
(B) 2.55%; (C) 2.55%; Global Financial Services (A)_____%; (B)_____%; (C)_____%;
Government Securities (A) 1.30%; (B) 1.85%; (C) 1.85%; High-Yield Bond (A)
1.30%; (B) 1.85%; (C) 1.85%; Tax-Exempt Income (A) 1.10%; (B) 1.65%; (C) 1.65%;
Managed (A) 1.75%; (B) 2.30%; (C) 2.30%; and Money Market (A) 0.70%; (B) 0.70%;
(C) 0.70%.] This commitment was also in effect from January 1, 1989 through
December 31, 1998. The Fund Managers have advised the Corporation that they may
assist in a portion of the above-referenced reimbursement from time to time.
The Advisory Agreement provides that in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard for its
obligations thereunder,the Advisor or the Fund Manager, as the case may be, is
not liable for any act or omission in the course of, or in connection with, the
rendition of services thereunder. The Agreement permits the Advisor to act as
investment advisor for any other person or firm.
The Advisor and the Corporation entered into agreements pursuant to
which the Advisor advanced on behalf of the Corporation $33,748 to cover the
costs of expanding the series to include a Small Company Value Fund; $34,116 of
expanding the series to include a Managed Fund; and $40,378 for expanding the
series to include an Equity Fund and completing the appropriate registrations
under the Investment Company Act of 1940, the Securities Act of 1933, and
certain state securities laws. The agreements provide that these amounts will be
repaid by each Fund, in five equal annual increments without interest,
commencing at the end of the first fiscal year at which each such Fund have
total net assets of $5 million or more. Each Fund has commenced such payments.
The Advisor's Agreement authorizes the Advisor to enter into
subadvisory agreements with various investment advisers as Fund Managers for the
Funds. The Fund Manager's Agreements are substantially the same in all material
respects except for the names of the Fund Managers and the rates of
compensation, which consist of a portion of the management fee that is paid by
the Corporation to the Advisor and which the Advisor pays to the Fund Managers.
The Advisor and the Corporation have received an exemptive order from
the Securities and Exchange Commission which permits the Corporation, subject
to, among other things, initial shareholder authority, to thereafter enter into
or amend Fund Manager Agreements without obtaining shareholder approval each
time. Shareholders voted affirmatively to give the Corporation this ongoing
authority. With Board approval, the Advisor is permitted to employ new Fund
Managers for the Funds, change the terms of the Fund Manager Agreements or enter
into a new Agreement with that Fund Manager. Shareholders of a Fund continue to
have the right to terminate the Fund Manager's Agreement for the Fund at any
time by a vote of the majority of the outstanding voting securities of the Fund.
Shareholders will be notified of any Fund Manager changes or other material
amendments to Fund Manager Agreements that occur under these arrangements.
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<PAGE> 210
FUND MANAGER ARRANGEMENTS
The following table sets forth certain information about the Fund
Managers for each Fund.
<TABLE>
<CAPTION>
Fund Name and Control Persons Fee Paid by the Advisor to the
of the Fund Manager Fund Manager as a Percentage of
Average Daily Net Assets
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Growth Fund Montag & Caldwell, Inc. .30% for assets under management
("Montag & Caldwell"). up to $100,000,000; .25% for
Montag & Caldwell is assets from $100,000,000 to
controlled by Allagheny $200,000,000; and .20% for assets
Corporation. greater than $200,000,000.
Growth and Income Fund Retirement System .30% for assets under management
Investors Inc. ("RSI") up to $100,000,000; .25% on the
which is a subsidiary of next $100,000,000; and .20% for
Retirement System Group assets greater than $200,000,000.
Inc.
Equity Fund OpCap Advisors, which is .40% for assets under management
a subsidiary of up to $100,000,000 and .30%
Oppenheimer Capital, a thereafter.
general partnership.
Equity Income Fund 1740 Advisers, Inc. .30% for assets under management
("1740 Advisers"). It is a up to $100,000,000; .25% on the
subsidiary of MONY. next $100,000,000; and .20%
thereafter.
Capital Appreciation Fund Provident Investment .50% for assets under management
Counsel, Inc. ("PIC"). up to $100,000,000; .45% for
PIC is a wholly owned assets under management for the
subsidiary of United Asset next $100,000,000; .35% for assets
Management, Inc. greater than $200,000,000 up to
$300,000,000; and .30% thereafter.
</TABLE>
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<PAGE> 211
<TABLE>
<S> <C> <C>
Small Company Growth Fund William D. Witter, Inc. .65% for assets under management
("Witter"). Witter is up to $50 million; .55% for assets
owned by its employees. under management for the next
$50 million; and .45% for assets
thereafter.
Small Company Value Fund GAMCO Investors, Inc. .40% for assets under management
is a wholly owned up to $1 billion and .30% for
subsidiary of Gabelli assets in excess of $1 billion.
Asset Management Inc.
International Growth Fund Vontobel USA Inc. .40% for assets under management
"Vontobel". Vontobel is a up to $100,000,000; .35% for
wholly-owned subsidiary assets under management from
of Bank J. Vontobel of $100,000,000 to $200,000,000;
Zurich, Switzerland. .325% for assets from
$200,000,000 to $500,000,000;
and .25% for assets greater than
$500,000,000.
Global Financial Services Fund Sanford C. Bernstein & .50% for assets up to $100 million;
Co., Inc. ("Sanford .40% for assets from $100 million
Bernstein") is owned to $300 million; .30% for assets
by its employees. over $300 million.
Government Securities Fund TCW Funds Management, .30% for assets under management
Inc. The firm is a wholly up to $50,000,000 and .25% for
owned subsidiary of TCW assets under management greater
Management Company, a than $50,000,000.
Nevada corporation,
whose direct and indirect
subsidiaries, including
Trust Company of the
West and TCW Asset
Management Company,
provide a variety of trust,
investment management
and investment advisory
services.
</TABLE>
32
<PAGE> 212
<TABLE>
<S> <C> <C>
High-Yield Bond Fund Caywood-Scholl Capital .30% for assets under management
Management ("Caywood- up to $100,000,000 and .25% for
Scholl"). It is a wholly assets above $100,000,000.
owned subsidiary of
RCM Global Investors
LLC, an affiliate of
Dresdner Bank AG.
Tax-Exempt Income Fund MBIA Capital .15% for assets under
Management Corp. management.
("MBIA"). It is a wholly
owned subsidiary of
MBIA, Inc.
Managed Fund OpCap Advisors, a .40% for assets under management
majority-owned subsidiary up to $100,000,000 and .30% for
of Oppenheimer Capital, a assets in excess of $100,000,000.
general partnership.
Money Market Fund Enterprise Capital, a .35% for assets under
wholly owned subsidiary management.
of MONY.
</TABLE>
The Advisor is the Fund Manager of the Money Market Fund. It utilizes
the services of MONY employees for certain services relating to management of
the Fund. These services include but are not limited to the initial credit
review of approved issuers and trading. All such services are provided on a cost
reimbursement basis.
The tables below sets forth the 1998, 1997 and 1996 breakdown by Fund
of (1) the investment advisory fee paid to the Advisor, (2) the percentage of
the Management Fee to be paid by the Advisor to the Fund Manager, (3) the fund
management fee paid by the Advisor to the Fund Manager, (4) the net advisory fee
left to the Advisor after payment of the fund management fee, and (5) the amount
of the expense reimbursement paid by the Advisor to the Fund to assure that
expenses incurred by the [Fund] did not exceed 2.0% of average annual net assets
for the Equity Funds and 1.3% of average annual net assets for the Income Funds.
33
<PAGE> 213
<TABLE>
<CAPTION>
1998
FUND (1) (2) (3) (4) (5)
--- --- --- --- ---
<S> <C> <C> <C> <C> <C>
Growth
Equity
Growth and Income
Equity Income
Capital Appreciation
Small Company
Growth
Small Company Value
International Growth
Government Securities
High-Yield Bond
Tax-Exempt Income
Managed
Money Market
</TABLE>
<TABLE>
<CAPTION>
1997
FUND (1) (2) (3) (4) (5)
- ---- ------------ --- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Growth $ 3,331,589 31% $ 1,038,424 $ 2,293,165 $ --
Equity 15,970 53% 8,516 7,453 99,274
Growth and Income 63,099 40% 25,240 37,859 102,630
Equity Income 739,501 40% 293,217 446,285 115,504
Capital Appreciation 903,281 66% 591,969 311,312 --
Small Company 84,918 65% 55,197 29,791 104,369
Growth
Small Company Value 275,321 53% 146,838 128,483 69,743
International Growth 478,833 53% 253,500 225,333 62,527
Government Securities 483,366 47% 226,402 256,963 130,007
High-Yield Bond 436,989 50% 218,495 218,494 123,123
Tax-Exempt Income 141,160 50% 70,580 70,580 108,255
Managed 2,180,923 45% 972,369 1,208,554 --
Money Market 231,118 -- -- 231,118 158,757
</TABLE>
<TABLE>
<CAPTION>
1996
FUND (1) (2) (3) (4) (5)
- ---- ------------ --- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Growth $ 1,282,393 37% $ 474,978 $ 807,415 $ --
Equity Income 523,261 40% 209,391 313,870 126,447
Capital Appreciation 935,780 65% 611,348 324,432 --
Small Company Value 153,784 47% 72,105 81,679 128,396
International Growth 353,427 53% 187,181 166,246 80,932
Government Securities 490,882 47% 229,645 261,237 94,868
High-Yield Bond 339,960 50% 170,056 169,904 114,041
Tax-Exempt Income 162,828 50% 81,452 81,376 51,959
Managed 1,164,633 49% 568,181 596,452 --
Money Market 160,844 -- -- 160,844 82,594
</TABLE>
34
<PAGE> 214
Distributor's Agreements and Plans of Distribution
The Distributor is a subsidiary of Enterprise Capital Management, Inc.
The Distributor's principal business address is Atlanta Financial Center, 3343
Peachtree Road, N.E., Suite 450, Atlanta, Georgia 30326.
Class A, Class B and Class C shares of each Fund have adopted a
separate Distribution Plan (the "Plans") pursuant to Rule 12b-1 under the
Investment Company Act of 1940. Under the Plans, Class A, Class B and Class C
shares of each of the Funds are authorized to pay the Distributor a distribution
fee for expenses incurred in connection with the continuous distribution of
shares of the Fund and an account maintenance fee for shareholder servicing.
There is no Distribution Plan in effect for Class Y shares.
Class A Shares. Class A shares of each Fund (except Money Market Fund)
pay the Distributor an account maintenance and distribution fee at the annual
rates of .45% of each Fund's average daily net assets attributable to Class A
shares.
Class B Shares. Class B shares of each Fund (except Money Market Fund)
pay the Distributor a distribution fee at the annual rate of .75% of each Fund's
average daily net assets attributable to Class B shares. Class B shares of each
Fund (except Money Market Fund) also pay an account maintenance fee at the
annual rate of .25% of each Fund's average daily net assets.
Class C Shares. Class C shares of each Fund (except Money Market Fund)
pay the Distributor a distribution fee at the annual rate of .75% of each Fund's
average daily net assets attributable to Class C shares. Class C shares of each
Fund (except Money Market Fund) also pay an account maintenance fee at the
annual rate of .25% of each Fund's average daily net assets attributable to
Class C shares.
Use of Distribution and Account Maintenance Fees. All or a portion of
the distribution fees paid by Class A, B or C shares may be used by the
Distributor to pay costs of printing reports and prospectuses for potential
investors and the costs of other distribution expenses. All or a portion of the
account maintenance fees paid by the Class A, Class B or Class C shares may be
paid to broker-dealers or others for the provision of personal continuing
services to shareholders, including such matters as responding to shareholder
inquiries concerning the status of their accounts and assistance in account
maintenance matters such as changes in address. Payments under the Plans are not
limited to amounts actually paid or expenses actually incurred by the
Distributor but cannot exceed the maximum rate set by the Plans or by the Board.
It is, therefore, possible that the Distributor may realize a profit in a
particular year as a result of these payments. The Plans have the effect of
increasing the Corporation's expenses from what they would otherwise be. The
Board reviews the Corporation's distribution and account maintenance fee
payments and may reduce or eliminate the fee at any time without further
obligation of the Corporation.
In addition to distribution and account maintenance fees paid by the
Corporation under Class A, Class B and Class C Plans, the Advisor (or one of its
affiliates) may make payments to
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<PAGE> 215
dealers (including MONY Securities Corp.) and other persons which distribute
shares of the Funds (including Class Y shares). Such payments may be calculated
by reference to the net asset value of shares sold by such persons or otherwise.
Distribution Fees and Commissions
<TABLE>
<CAPTION>
TRAVEL,
TELEPHONE &
DISTRIBUTION COMMISSION CDSC COMMISSIONS MARKETING & OTHER
FEES PAID TO & SALES FEES COLLECTED & AND FEES PAID ADVERTISING AUTHORIZED
THE PAID TO THE PAID TO THE TO DEALERS FEES PAID FEES PAID
DISTRIBUTION DISTRIBUTION DISTRIBUTION
------------ ------------- ------------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
1998
1997 $6,667,912 $1,244,343* $ 13,318 $ 4,320,682 $ 2,143,274 $ 3,103,754
1996 $3,696,663 $ 692,305 $ 131,372 $ 2,043,128 $ 1,108,160 $ 1,512,246
</TABLE>
- -----------------
* During the period from [November 3, 1997 through December 31, 1997]
[UPDATE], the Distributor reallowed the full applicable sales charge to
certain broker/dealers with respect to the sale of shares of the
[Growth and Income Fund, Equity Fund, and Small Company Growth Fund.]
MISCELLANEOUS
The terms of each of the Advisor's Agreement, the Distributor's
Agreements and 12b-1 Plans, the Transfer Agent Agreement, the Accounting
Agreement and the Fund Manager's Agreements (each an "Agreement," and
collectively, the "Agreements") provide that each such Agreement: (i) will
automatically terminate upon "assignment," as such term is defined in the
Investment Company Act of 1940 (the "1940 Act"); (ii) must be approved annually
by the Corporation's Board of Directors or by vote of a majority of the
outstanding voting securities; and (iii) must be approved annually in person by
vote of a majority of the Directors of the Corporation who are not parties to
such contract or "interested persons" (as such term is defined in the 1940 Act)
of such party. Each Agreement further provides that it can be terminated without
penalty by either party thereto upon 60 days written notice to the other party.
The Corporation's Board of Directors most recently approved continuance of the
Investment Advisor's Agreement, the Fund Manager's Agreements and the
Distributor's Agreements and 12b-1 Plans on February 25, 1999.
Purchase, Redemption and Pricing of Securities being Offered
Information concerning purchase and redemption of shares of the Funds,
as well as information concerning computation of net asset value per share is
set forth in the Prospectus.
Each Fund offers four separate classes of shares: Class A, B, C and Y
shares. Each Class of shares of a Fund represents an identical interest in the
investment portfolio of that Fund and has the same rights, except that (i) each
class may bear differing amounts of certain class-specific expenses, (ii) Class
A shares are subject to an initial sales charge, a distribution fee and service
fee, (iii) Class B and Class C shares are subject to a contingent deferred sales
charge ("CDSC"), a distribution fee and an
36
<PAGE> 216
ongoing service fee, (iv) only Class B shares have a conversion feature; (v) the
Class A, B and C shares have exclusive voting rights with respect to matters
related to distribution and servicing expenditures; (vi) Class Y shares are not
subject to any sales charge or any distribution, account maintenance or service
fee, and (vii) the Classes have separate exchange privileges. In addition, the
income attributable to each Class and the dividends payable on the shares of
each Class will be reduced by the amount of the distribution fee or service fee,
if any, payable by that Class. The distribution-related fees paid with respect
to any Class will not be used to finance the distribution expenditures of
another Class. Sales personnel may receive different compensation for selling
different Classes of shares.
Fund shares are purchased at the net asset value (plus, with the
exception of the Money Market Fund Class A shares and Class Y shares, the
applicable sales charge) next determined after the application for purchase of
shares is received by the Enterprise Shareholder Services Division of the Fund's
Transfer Agent, National Financial Data Services, Inc. (the "Transfer Agent").
The sales charge may be imposed, at the election of the investor, at the time of
purchase (Class A shares) or may be deferred (Class B and C shares and Class A
shares in excess of $1,000,000). Purchases can be made through most investment
dealers who, as part of the service they provide, must transmit orders promptly.
Initial Sales Charge Waivers and Reductions
No sales charge applies to purchases of Class A shares by any of the
following: (a) selling brokers, their employees and their registered
representatives; (b) employees, clients or direct referrals of any Fund Manager
or of Evaluation Associates, Inc. ("EAI"); (c) directors, former directors,
employees or retirees of the Fund or of MONY and its subsidiaries; (d) family
including spouses, parents, siblings, children and grandchildren and employee
benefit plans of any of the foregoing; (e) certain employee benefit plans
qualified under Sections 401 and 403 of the IRC, including salary reduction
plans qualified under Section 401(k) of IRC and certain payroll deduction plans,
subject to minimum requirements with respect to number of participants or plan
assets which may be established by the Distributor; (f) MONY and its
subsidiaries; (g) clients of fee-based financial planners; and (h) financial
institutions and financial institutions' trust departments for funds over which
they exercise exclusive discretionary investment authority and which are held in
fiduciary, agency, advisory, custodial or similar capacity.
In addition, members of certain associations, fraternal groups,
franchise organizations and unions may enter into an agreement with the
Distributor which allows members to purchase Class A shares at a sales load
equal to 75% of the applicable sales charge, subject to minimum requirements,
with respect to number of participants or plan assets which may be established
by the Distributor. The Dealer Discount will also be adjusted in like manner.
An investor seeking a reduction in sales charge with respect to a
waiver of sales charge by reason of being a member of the above-described
groups, must describe the basis for the requested reduction or waiver in
documents accompanying any new investment. The
37
<PAGE> 217
Corporation may terminate, or amend the terms of, offering shares of a Fund at
net asset value or at a reduced sales charge at any time.
Exemptions from Class A, B and C CDSC
No CDSC will be imposed when a shareholder redeems Class A, B or C
shares in the following instances: (a) shares or amounts representing increases
in the value of an account above the net cost of the investment due to increases
in the net asset value per share; (b) shares acquired through reinvestment of
income dividends or capital gains distributions; (c) shares acquired by exchange
from any Fund, other than the Class A Money Market fund where the exchanged
shares would not have been subject to a CDSC upon redemption; and (d) Class A
shares purchased in the amount of $1 million or more if held for more than
twenty-four (24) months, Class B shares held for more than six years and Class C
shares held for more than one year. The CDSC does not apply to purchases of
Class A shares at net asset value.
In determining whether the Class A, B or C CDSC is payable, it will be
assumed that shares are not subject to a CDSC are redeemed first and that other
shares are then redeemed in the order purchased. No CDSC will be imposed on
exchanges to purchase shares of another Fund although a CDSC will be imposed on
shares of the acquired Fund purchased by exchange of shares subject to a CDSC.
The imposition of an assessment of a CDSC will occur as of the date of the
initial investment.
Special Fiduciary Relationships. The CDSC will not apply with respect
to purchase of Class A shares for which the seller dealer is not permitted to
receive a sales load or redemption fee imposed on a shareholder with whom such
dealer has a fiduciary relationship in accordance with the provisions of the
Employee Retirement Income Security Act and regulations thereunder. If such
dealer agrees to the reimbursement provision described below, no sales charge
will be imposed on sales of $1,000,000 or more and the Distributor will pay to
the selling dealer a commission described in the Prospectus.
For the period of 13 months from the date of the sales referred to in
the above paragraph, the distribution fee payable by a Fund to the Distributor
pursuant to the Fund's Distribution Plan in connection with such shares will be
retained by the Distributor. In the event of a redemption of any such shares
within 24 months of purchase, the selling dealer will reimburse the Distributor
for the amount of commission paid less the amount of the distribution fee with
respect to such shares.
CDSC Waivers and Reductions
The CDSC will be waived in the event of: (a) distributions to
participants or beneficiaries and redemptions (other than redemption of the
entire plan) by certain plans, including participant-directed qualified
retirement qualified under Section 401(a) of the IRC or from custodial accounts
under the IRC Section 403(b)(7), individual retirement accounts under the IRC
Section 408(a), participant-directed non-qualified deferred compensation plans
under the IRC section 457 and other employee benefit plans ("plans"), and
returns of excess contributions made to these
38
<PAGE> 218
plans; (b) redemption of shares of a shareholder (including a registered joint
owner) who has died; (c) redemption of shares of a shareholder (including a
registered joint owner) who after purchase of the shares being redeemed becomes
totally disabled (as evidenced by a determination by the federal Social Security
Administration); (d) withdrawals under a systematic withdrawal plan where the
annual withdrawal does not exceed 10% of the net asset value of the account
(only for Class B shares); and (e) liquidation of a shareholder's account if the
aggregate net asset value of shares held in the account is less than the
required minimum. The CDSC will also be waived for redemptions made pursuant to
any IRA systematic withdrawal based on the shareholder's life expectancy
including, but not limited to, substantially equal periodic payments described
in IRC Section 72(t)(2)(A)(iv) prior to age 59 1/2 and required minimum
distributions after age 70 1/2. A shareholder will be credited with any CDSC
paid in connection with the redemption of any Class A, B, or C shares if within
180 days after such redemption, the proceeds are invested in the same class of
shares in the same and/or another Fund.
SERVICES FOR INVESTORS
For the convenience of investors, the following plans are available.
Investors should realize that none of these plans can guarantee profit or insure
against loss. The costs of these shareholder plans (exclusive of the employee
benefit plans) are paid by the Distributor, except for the normal cost of
issuing shares, which is paid by the Corporation.
AUTOMATIC REINVESTMENT PLAN. All shareholders, unless they request
otherwise, are enrolled in the Automatic Reinvestment Plan under which dividends
and capital gains distributions on their shares are automatically reinvested in
shares of the same Class of Fund(s) at the net asset value per share computed on
the record date of such dividends and capital gains distributions. The Automatic
Reinvestment Plan may be terminated by participants or by the Corporation at any
time. No sales charge is applied upon reinvestment of dividends or capital
gains.
AUTOMATIC BANK DRAFT PLAN. An Automatic Bank Draft Plan is available
for investors who wish to purchase shares of one or more of the Funds in amounts
of $25 or more on a regular basis by having the amount of the investment
automatically deducted from the investor's checking account. The minimum initial
investment for this Plan is $100. Forms authorizing this service are available
from the Corporation.
AUTOMATIC INVESTMENT PLAN. An investor may debit any Class of a Fund
Account on a monthly basis for automatic investments into one or more of the
other Funds of the same Class. The Fund from which the investment will be made
is subject to the $1,000 minimum. The
39
<PAGE> 219
investor may then choose to have $50 or more transferred to either an
established Fund, or they may open a new account subject to an initial minimum
investment of $100.
Letter of Intent Investments. Any investor may execute a Letter of
Intent covering purchases of Class A shares of $100,000 or more, at the public
offering price, of Fund shares to be made within a period of 13 months. A
reduced sales charge will be applicable to the total dollar amount of Class A
shares purchased in the 13-month period provided at least $100,000 is purchased.
The minimum initial investment under a Letter of Intent is 5% of the amount
indicated in the Letter of Intent. Class A shares purchased with the first 5% of
such amount will be held in escrow (while remaining registered in the name of
the investor) to secure payment of the higher sales charge applicable to the
shares actually purchased if the full amount indicated is not purchased, and
such escrowed shares will be involuntarily redeemed to pay the additional sales
charge, if necessary. When the full amount indicated has been purchased, the
escrow will be released.
Investors wishing to enter into a Letter of Intent in conjunction with
their investment in Class A shares of the Funds should complete the appropriate
portion of the new account application.
Right of Accumulation Discount. Investors who make an additional
purchase of Class A shares of a Fund which, when combined with the value of
their existing aggregate holdings of shares of a Fund, each calculated at the
then applicable net asset value per share, at the time of the additional
purchase, equals $100,000 or more, will be entitled to the reduced sales charge
shown under "Shareholder Account Information-Class A Shares-Initial Sales Charge
Option" in the Prospectus on the full amount of each additional purchase. For
purposes of determining the discount, holdings of Fund shares of the investor's
spouse, immediate family or accounts controlled by the investor, whether as a
single investor or trustee of, or participant in, pooled and similar accounts,
will be aggregated upon notification of applicable accounts from the investor.
Checkwriting. A check redemption feature is available on the Money
Market Fund Class A shares with opening balances of $5,000 or more. Redemption
checks may be made payable to the order of any person in any amount from $500 to
$100,000. Up to five redemption checks per month may be written without charge.
Each additional redemption check over five in a given month will be subject to a
$5 fee. Redemption checks are free and may be obtained from the Transfer Agent
or by contacting the Advisor. A $25 fee will be imposed on any account for
stopping payment of a redemption check upon request of the shareholder. It is
not possible to use a redemption check to close out an account since additional
shares accrue daily.
Systematic Withdrawal Plan. Investors may elect a Systematic Withdrawal
Plan under which a fixed sum will be paid monthly, quarterly, or annually. There
is no minimum withdrawal payment required. Shares in the Plan are held on
deposit in noncertificate form and any capital gain distributions and dividends
from investment income are invested in additional shares of the Fund(s)at net
asset value. Shares in the Plan account are then redeemed at net asset
40
<PAGE> 220
value to make each withdrawal payment. Redemptions for the purpose of
withdrawals are made on or about the 15th day of the month of payment at that
day's closing net asset value, and checks are mailed within five days of the
redemption date. Such distributions are subject to applicable taxation.
Because withdrawal payments may include a return of principal,
redemptions for the purpose of making such payments may reduce or even use up
the investment, depending upon the size of the payments and the fluctuations of
the market price of the underlying Fund securities. For this reason, the
payments cannot be considered as a yield of income on the investment.
Retirement Plans. The Corporation offers various Retirement Plans: IRA
(generally for all individuals with employment income); 403(b)(7) (for employees
of certain tax-exempt organizations and schools); and corporate pension and
profit sharing (including a 401(k) option) plans. For full details as to these
plans, you should request a copy of the plan document from the Transfer Agent.
After reading the plan, you may wish to consult a competent financial or tax
adviser if you are uncertain that the plan is appropriate for your needs.
Conversion of Class B Shares
Class B shares will automatically convert to Class A shares of the same
Fund eight years after the end of the calendar month in which the purchase order
for Class B shares was accepted, on the basis of the relative net asset values
of the two classes and subject to the following terms: Class B shares acquired
through the reinvestment of dividends and distributions ("reinvested Class B
shares") will be converted to Class A shares on a pro rata basis only when Class
B shares not acquired through reinvestment of dividends or distributions
("purchased Class B shares") are converted. The portion of reinvested Class B
shares to be converted will be determined by the ratio that the purchased Class
B shares eligible for conversion bear to the total amount of purchased Class B
shares eligible in the shareholder's account. For the purposes of calculating
the holding period, Class B shares will be deemed to have been issued on the
sooner of: (a) the date on which the issuance of Class B shares occurred, or (b)
for Class B shares obtained by an exchange or series of exchanges, the date on
which the issuance of the original Class B shares occurred. This conversion to
Class A shares will relieve Class B shares that have been outstanding for at
least eight years (a period of time sufficient for the Distributor to have been
compensated for distribution expenses related to such Class B shares) from the
higher ongoing distribution fee paid by Class B shares. Only Class B shares have
this conversion feature. Conversion of Class B shares to Class A shares is
contingent on the continuing availability of a private letter revenue ruling
from the Internal Revenue Service affirming that such conversion does not
constitute a taxable event for the shareholder under the IRC. If such revenue
ruling or an opinion of counsel is no longer available, conversion of Class B
shares to Class A shares would have to be suspended, and Class B shares would
continue to be subject to the Class B distribution fee until redeemed.
41
<PAGE> 221
Exchange Privilege
An exchange represents the sale of shares of one Fund and the purchase
of shares of another, which may produce a gain or loss for tax purposes.
Shares of a Fund which are not subject to a CDSC exchange will be
processed at the net asset value next determined after the Transfer Agent
receives your exchange request. Shares of a Fund which are subject to a CDSC
will be exchangeable on the basis of the relative net asset value per share
without payment of any CDSC which might otherwise be due upon redemption of the
shares of the Fund. For purposes of computing the CDSC that may be payable upon
a disposition of the shares acquired in the exchange, the holding period for the
previously owned shares of the Fund is "tacked" to the holding period for the
newly acquired shares of the other Enterprise Fund. The exchange feature may be
modified or discontinued at any time, upon notice to shareholders in accordance
with applicable rules adopted by the Securities and Exchange Commission ("SEC").
Your exchange may be processed only if the shares of the Fund to be acquired are
eligible for sale in your state and if the exchange privilege may be legally
offered in your state.
Exchange of Class A Shares. You may exchange your Class A shares for
Class A shares of any other Fund. Class A shares of any Fund cannot be exchanged
for Class B, C or Y shares of any other Fund.
Exchange of Class B Shares. Class B shares of all Fund are exchangeable
for Class B shares of any other Enterprise Fund. Class B shares of any Fund
cannot be exchanged for Class A, C or Y shares of any other Fund.
Exchange of Class C Shares. Class C shares of all Funds are
exchangeable for Class C shares of any other Fund. Class C shares of any Fund
cannot be exchanged for Class A, B or Y shares of any other Fund.
The minimum initial investment rules applicable to a Fund apply to any
exchange where the exchange results in a new account being opened in such Fund.
Exchanged into existing accounts are not subject to minimum amount. Original
investment in the Money Market Fund which are transferred to other Funds are not
considered Fund exchanges but purchases.
Redemptions -- General
Payment for redeemed shares is ordinarily made within seven days after
receipt by the corporation's transfer agent of redemption instructions in
proper form. the redemption privilege may be suspended or payment may be
postponed for more than seven days during any period when: (1) the NYSE is
closed other than for customary weekend or holiday closings or trading thereon
is restricted as determined by the securities and exchange commission; (2) an
emergency, as defined by the Securities and Exchange Commission, exists making
trading of fund securities or valuation of net assets not reasonably
practicable; (3) the Securities and Exchange Commission has by order permitted
such suspension or delay.
REDEMPTIONS IN KIND
The Corporation's Articles of Incorporation provide that it may redeem
its shares in cash or with a pro rata portion of the assets of the Corporation.
To date, all redemptions have been made in cash, and the Corporation anticipates
that all redemptions will be made in cash in the future. In order to meet the
requirements of certain state laws, the Corporation has elected, pursuant to
Rule 18f-1 under the 1940 Act, to commit itself to pay in cash all requests for
redemption by any shareholder of record, limited in amount with respect to each
shareholder during any 90-day period to the lesser of: (i) $250,000; or (ii) 1%
of the net asset value of the Corporation at the beginning of such period. If
shares are redeemed through a distribution of
42
<PAGE> 222
Corporation securities, the recipient would incur brokerage commissions upon the
sale of such securities.
The Corporation reserves the right to redeem an account at its option
upon not less than 45 days' written notice if an account's net asset value is
$500 or less and remains so during the notice period.
Determination of Net Asset Value
The net asset value of each Fund's shares is determined once daily as
of the close of the NYSE on each day on which the NYSE is open for trading. The
Funds may own securities that are primarily listed on foreign exchanges which
trade on Saturday or other customary United States national business holidays.
If the Funds do not price their securities on these days, their net asset values
may be significantly affected on days when investors have no access to the
Funds. The net asset value per share is effective as of the time of computation.
In determining net asset value, the price carried by the composite tape of all
national exchanges is used.
Money Market Fund. The net asset value of the Money Market Fund is
computed by dividing the total value of the Fund's assets, less liabilities
(including dividends payable), by the number of shares outstanding. The assets
are determined by valuing the Fund securities at amortized cost, pursuant to
Rule 2a-7. The amortized cost method of valuation involves valuing a security at
cost at the time of purchase and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the impact of fluctuating
interest rates on the market value of the instrument.
The purpose of the amortized cost method of valuation is to attempt to
maintain a constant net asset value per share of $1.00. While this method
provides certainty in valuation, it may result in periods during which value, as
determined by amortized cost, is slightly higher or lower than the price the
Fund would receive if it sold its Fund securities. Under the direction of the
Board of Directors, certain procedures have been adopted to monitor and
stabilize the price per share. Calculations are made to compare the value of the
Fund securities, valued at amortized cost, with market values. Market valuations
are obtained by using actual quotations provided by market makers, estimates of
market value, or values obtained from yield data relating to classes of money
market instruments published by reputable sources at the bid prices for those
instruments. If a deviation of 1/2 of 1% or more between the $1.00 per share net
asset value and the net asset value calculated by reference to market valuations
has occurred, or if there are any other deviations which the Board of Directors
believes will result in dilution or other unfair results material to
shareholders, the Board of Directors will consider what action, if any, should
be initiated. The Money Market Fund seeks to maintain a constant net asset value
of $1.00 but there can be no assurance that the Money Market Fund will be able
to maintain a stable net asset value. The Money Market Fund will not maintain a
dollar-weighted average portfolio maturity which exceeds 90 days.
43
<PAGE> 223
The market value of debt securities usually reflects yields generally
available on securities of similar quality. When yields decline, the market
value of the Fund holding higher yielding securities can be expected to
increase; when yields increase, the market value of the Fund invested at lower
yields can be expected to decline. In addition, if the Fund has net redemptions
at a time when interest rates have increased, the Fund may be forced to sell
Fund securities prior to maturity at a price below the Fund's carrying value.
Also, rather than market value, any yield quoted may be different from the yield
that would result if the entire Fund were valued at market value, since the
amortized cost method does not take market fluctuations into consideration.
Other Funds. The Funds, other than the Money Market Fund, calculate a
share's net asset value by dividing the net assets of the Portfolio by the
number of shares then outstanding of such Portfolio. Securities other than money
market instruments maturing in 60 days or less which are traded on a national
exchange are valued at the last sale price as of the close of business on the
day the securities are being valued, or, lacking any sales, at the last bid
price. Securities other than money market instruments maturing in 60 days or
less traded in the over-the-counter market are valued at the last bid price or
at yield equivalent as obtained from one or more dealers that make markets in
the securities. Securities which are traded both in the over-the-counter market
and on a national exchange are valued according to the broadest and most
representative market, and it is expected that for debt securities this
ordinarily will be the over-the-counter market. Securities and assets for which
market quotations are not readily available are valued at fair value as
determined in good faith by or under the supervision of the Board of Directors.
Debt securities and foreign securities are valued on the basis of independent
pricing services approved by the Board of Directors, and such pricing services
generally follow the same procedures in valuing foreign equity securities as are
described above. Money market instruments with maturities of 60 days or less are
valued using the amortized cost method of valuation.
Computation of Offering Price Per Share. The following is the offering
price calculation for each Class of shares of each Fund. The Class A, Class B
and Class C calculations are based on the value of each Fund's net assets and
number of shares outstanding on December 31, 1998.
44
<PAGE> 224
<TABLE>
<CAPTION>
Growth Fund Growth and Income Fund
----------------------------------------------- -----------------------------------------------
Class A Class B Class C Class Y Class A Class B Class C Class Y
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Assets.........
------- ------- ------- ------- ------- ------- ------- -------
Number of
Shares
Outstanding........
------- ------- ------- ------- ------- ------- ------- -------
Net Asset
Value Per
Share (net
assets divided
by number of
shares) ........... $ $ $ $ $ $ $ $
------- ------- ------- ------- ------- ------- ------- -------
Sales charge
for Class A
Shares: 4.75%
of offering
price (4.99% of
net asset value
per share)*........ ** ** ** ** ** **
------- ------- ------- ------- ------- ------- ------- -------
Offering Price..... $ $ $ $ $ $ $ $
------- ------- ------- ------- ------- ------- ------- -------
</TABLE>
- -----------------------
* Rounded to nearest one-hundredth percent; assumes maximum sales charge
is applicable.
** Class B, Class C, and Class Y shares are not subject to an initial
charge. However, Class B and Class C shares may be subject to a CDSC on
redemption of shares.
<TABLE>
<CAPTION>
Equity Fund Equity Income Fund
----------------------------------------------- -----------------------------------------------
Class A Class B Class C Class Y Class A Class B Class C Class Y
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Assets.........
------- ------- ------- ------- ------- ------- ------- -------
Number of
Shares
Outstanding........
------- ------- ------- ------- ------- ------- ------- -------
Net Asset
Value Per
Share (net
assets divided
by number of
shares) ........... $ $ $ $ $ $ $ $
------- ------- ------- ------- ------- ------- ------- -------
Sales charge
for Class A
Shares: 4.75%
of offering
price (4.99% of
net asset value
per share)*........ ** ** ** ** ** **
------- ------- ------- ------- ------- ------- ------- -------
Offering Price..... $ $ $ $ $ $ $ $
------- ------- ------- ------- ------- ------- ------- -------
</TABLE>
- -----------------------
* Rounded to nearest one-hundredth percent; assumes maximum sales charge
is applicable.
** Class B, Class C, and Class Y shares are not subject to an initial
charge. However, Class B and Class C shares may be subject to a CDSC on
redemption of shares.
45
<PAGE> 225
<TABLE>
<CAPTION>
Capital Appreciation Fund Small Company Growth Fund
----------------------------------------------- -----------------------------------------------
Class A Class B Class C Class Y Class A Class B Class C Class Y
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Assets.........
------- ------- ------- ------- ------- ------- ------- -------
Number of
Shares
Outstanding........
------- ------- ------- ------- ------- ------- ------- -------
Net Asset
Value Per
Share (net
assets divided
by number of
shares) ........... $ $ $ $ $ $ $ $
------- ------- ------- ------- ------- ------- ------- -------
Sales charge
for Class A
Shares: 4.75%
of offering
price (4.99% of
net asset value
per share)*........ ** ** ** ** ** **
------- ------- ------- ------- ------- ------- ------- -------
Offering Price..... $ $ $ $ $ $ $ $
------- ------- ------- ------- ------- ------- ------- -------
</TABLE>
- -----------------------
* Rounded to nearest one-hundredth percent; assumes maximum sales charge
is applicable.
** Class B, Class C and Class Y shares are not subject to an initial
charge. However, Class B and Class C shares may be subject to a CDSC on
redemption of shares.
<TABLE>
<CAPTION>
Small Company Value Fund International Growth Fund
----------------------------------------------- -----------------------------------------------
Class A Class B Class C Class Y Class A Class B Class C Class Y
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Assets.........
------- ------- ------- ------- ------- ------- ------- -------
Number of
Shares
Outstanding........
------- ------- ------- ------- ------- ------- ------- -------
Net Asset
Value Per
Share (net
assets divided
by number of
shares) ........... $ $ $ $ $ $ $ $
------- ------- ------- ------- ------- ------- ------- -------
Sales charge
for Class A
Shares: 4.75%
of offering
price (4.99% of
net asset value
per share)*........ ** ** ** ** ** **
------- ------- ------- ------- ------- ------- ------- -------
Offering Price..... $ $ $ $ $ $ $ $
------- ------- ------- ------- ------- ------- ------- -------
</TABLE>
- ------------------------
* Rounded to nearest one-hundredth percent; assumes maximum sales charge
is applicable.
** Class B, Class C and Class Y are not subject to an initial charge.
However, Class B and Class C shares may be subject to a CDSC on
redemption of shares.
46
<PAGE> 226
<TABLE>
<CAPTION>
Global Financial Services Fund Government Securities Fund
----------------------------------------------- -----------------------------------------------
Class A Class B Class C Class Y Class A Class B Class C Class Y
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Assets.........
------- ------- ------- ------- ------- ------- ------- -------
Number of
Shares
Outstanding........
------- ------- ------- ------- ------- ------- ------- -------
Net Asset
Value Per
Share (net
assets divided
by number of
shares) ........... $ $ $ $ $ $ $ $
------- ------- ------- ------- ------- ------- ------- -------
Sales charge
for Class A
Shares: 4.75%
of offering
price (4.99% of
net asset value
per share)*........ ** ** ** ** ** **
------- ------- ------- ------- ------- ------- ------- -------
Offering Price..... $ $ $ $ $ $ $ $
------- ------- ------- ------- ------- ------- ------- -------
</TABLE>
- -----------------------
* Rounded to nearest one-hundredth percent; assumes maximum sales charge is
applicable.
** Class B, Class C and Class Y shares are not subject to an initial charge.
However, Class B and Class C shares may be subject to a CDSC on redemption
of shares.
<TABLE>
<CAPTION>
High-Yield Bond Fund Tax-Exempt Income Fund
----------------------------------------------- -----------------------------------------------
Class A Class B Class C Class Y Class A Class B Class C Class Y
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Assets.........
------- ------- ------- ------- ------- ------- ------- -------
Number of
Shares
Outstanding........
------- ------- ------- ------- ------- ------- ------- -------
Net Asset
Value Per
Share (net
assets divided
by number of
shares) ........... $ $ $ $ $ $ $ $
------- ------- ------- ------- ------- ------- ------- -------
Sales charge
for Class A
Shares: 4.75%
of offering
price (4.99% of
net asset value
per share)*........ ** ** ** ** ** **
------- ------- ------- ------- ------- ------- ------- -------
Offering Price..... $ $ $ $ $ $ $ $
------- ------- ------- ------- ------- ------- ------- -------
</TABLE>
- -----------------------
* Rounded to nearest one-hundredth percent; assumes maximum sales charge
is applicable.
** Class B, Class C and Class Y shares are not subject to an initial
charge. However, Class B and Class C shares may be subject to a CDSC on
redemption of shares.
47
<PAGE> 227
<TABLE>
<CAPTION>
Managed Fund Money Market Fund
----------------------------------------------- -----------------------------------------------
Class A Class B Class C Class Y Class A Class B Class C Class Y
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Assets.........
------- ------- ------- ------- ------- ------- ------- -------
Number of
Shares
Outstanding........
------- ------- ------- ------- ------- ------- ------- -------
Net Asset
Value Per
Share (net
assets divided
by number of
shares) ........... $ $ $ $ $ $ $ $
------- ------- ------- ------- ------- ------- ------- -------
Sales charge
for Class A
Shares: 4.75%
of offering
price (4.99% of
net asset value
per share)*........ ** ** ** ** ** **
------- ------- ------- ------- ------- ------- ------- -------
Offering Price..... $ $ $ $ $ $ $ $
------- ------- ------- ------- ------- ------- ------- -------
</TABLE>
- -----------------------
* Rounded to nearest one-hundredth percent; assumes maximum sales charge
is applicable.
** Class B, Class C and Class Y shares are not subject to an initial
charge. However, Class B and Class C shares may be subject to a CDSC on
redemption of shares.
Fund Transactions and Brokerage
Each Fund Manager selects the brokerage firms which complete portfolio
transactions for that Fund, subject to the overall direction and review of the
Advisor and the Board of Directors of the Corporation.
The initial criterion which must be met by any Fund Manager in
selecting brokers and dealers to effect securities transactions for a Fund is
whether such brokers and dealers can obtain
48
<PAGE> 228
the most favorable combination of price and execution for the transaction. This
does not mean that the execution decision must be based solely on whether the
lowest possible commission costs may be obtained. In seeking to achieve the best
combination of price and execution, the Fund Managers evaluate the overall
quality and reliability of broker-dealers and the service they provide,
including their general execution capability, reliability and integrity,
willingness to take positions in securities, general operational capabilities
and financial condition.
Subject to this primary objective, the Fund Managers may select for
brokerage transactions those firms which furnish brokerage and research
services, including analyses and reports concerning issuers, industries,
securities, economic factors and trends, to the Corporation, the Advisor, and
the respective Fund Managers, or those firms who agree to pay certain of the
Corporation's expenses, including certain custodial and transfer agent services,
and, consistent with the National Association of Securities Dealers, Inc.
Conduct Rules, those firms which have been active in selling shares of the
Corporation. If in the judgment of the Fund Manager the Fund will be benefitted
by supplemental research services, a broker furnishing such services may be paid
brokerage commissions which are in excess of commissions which another broker
may have charged for effecting the same transaction. Fund Managers may execute
brokerage transactions through affiliated broker/dealers, subject to compliance
with applicable requirements of the federal securities laws.
The following table sets forth the amounts of the brokerage commissions
paid to broker-dealers by each Fund for the fiscal year ended December 31, 1998.
<TABLE>
<CAPTION>
Fund Aggregate Brokerage Commissions Brokerage Commissions Paid
Brokerage Brokerage Paid to Affiliated Broker- to Affiliated Broker-Dealers
Commission Paid Commissions Paid To Dealers as a Percentage of as a Percentage of the Fund's
on Transactions in Affiliated Broker- the Fund's Aggregate Aggregate Dollar Amount of
the Fund's Dealers Commissions Paid Transactions Involving
Securities Brokerage Commissions
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Growth
- ---------------------------------------------------------------------------------------------------------------------------
Growth and Income
- ---------------------------------------------------------------------------------------------------------------------------
Equity
- ---------------------------------------------------------------------------------------------------------------------------
Equity Income
- ---------------------------------------------------------------------------------------------------------------------------
Capital Appreciation
- ---------------------------------------------------------------------------------------------------------------------------
Small Company
- ---------------------------------------------------------------------------------------------------------------------------
Growth
- ---------------------------------------------------------------------------------------------------------------------------
Small Company Value
- ---------------------------------------------------------------------------------------------------------------------------
International Growth
- ---------------------------------------------------------------------------------------------------------------------------
Global Financial
- ---------------------------------------------------------------------------------------------------------------------------
Services
- ---------------------------------------------------------------------------------------------------------------------------
Government Securities
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
49
<PAGE> 229
<TABLE>
<CAPTION>
Fund Aggregate Brokerage Commissions Brokerage Commissions Paid
Brokerage Brokerage Paid to Affiliated Broker- to Affiliated Broker-Dealers
Commission Paid Commissions Paid To Dealers as a Percentage of as a Percentage of the Fund's
on Transactions in Affiliated Broker- the Fund's Aggregate Aggregate Dollar Amount of
the Fund's Dealers Commissions Paid Transactions Involving
Securities Brokerage Commissions
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
High-Yield Bond
- ---------------------------------------------------------------------------------------------------------------------------
Tax-Exempt Income
- ---------------------------------------------------------------------------------------------------------------------------
Managed
- ---------------------------------------------------------------------------------------------------------------------------
Money Market
</TABLE>
The following tables set forth the aggregate brokerage commissions paid
by each Fund on transactions in that Fund's securities for the fiscal year ended
December 31, 1997 and December 31, 1998.
<TABLE>
<CAPTION>
1997
Aggregate Brokerage Commissions Paid on
Fund Transactions in the Fund's Securities
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C>
Growth
- ---------------------------------------------------------------------------------------------------------------------------
Growth and Income
- ---------------------------------------------------------------------------------------------------------------------------
Equity
- ---------------------------------------------------------------------------------------------------------------------------
Equity Income
- ---------------------------------------------------------------------------------------------------------------------------
Capital Appreciation
- ---------------------------------------------------------------------------------------------------------------------------
Small Company Growth
- ---------------------------------------------------------------------------------------------------------------------------
Small Company Value
- ---------------------------------------------------------------------------------------------------------------------------
International Growth
- ---------------------------------------------------------------------------------------------------------------------------
Government Securities
- ---------------------------------------------------------------------------------------------------------------------------
High-Yield Bond
- ---------------------------------------------------------------------------------------------------------------------------
Tax-Exempt Income
- ---------------------------------------------------------------------------------------------------------------------------
Managed
- ---------------------------------------------------------------------------------------------------------------------------
Money Market
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
50
<PAGE> 230
<TABLE>
<CAPTION>
1996
Aggregate Brokerage Commissions Paid on
Fund Transactions in the Fund's Securities
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C>
Growth
- ---------------------------------------------------------------------------------------------------------------------------
Growth and Income
- ---------------------------------------------------------------------------------------------------------------------------
Equity
- ---------------------------------------------------------------------------------------------------------------------------
Equity Income
- ---------------------------------------------------------------------------------------------------------------------------
Capital Appreciation
- ---------------------------------------------------------------------------------------------------------------------------
Small Company Growth
- ---------------------------------------------------------------------------------------------------------------------------
Small Company Value
- ---------------------------------------------------------------------------------------------------------------------------
International Growth
- ---------------------------------------------------------------------------------------------------------------------------
Government Securities
- ---------------------------------------------------------------------------------------------------------------------------
High-Yield Bond
- ---------------------------------------------------------------------------------------------------------------------------
Tax-Exempt Income
- ---------------------------------------------------------------------------------------------------------------------------
Managed
- ---------------------------------------------------------------------------------------------------------------------------
Money Market
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
PERFORMANCE COMPARISONS
From time to time the Corporation may advertise a Fund's average annual
total return, other total return data, or yield. Total return and yield are
calculated separately for Class A, Class B, Class C and Class Y shares. Total
return figures are based on the Fund's historical performance and are not
intended to indicate future performance.
Average annual total return is calculated by finding the average annual
compounded rates of return over the specified periods that would equate the
initial amount invested to the ending redemption value according to the
following formula: Average annual total return is computed assuming all
dividends and distributions are reinvested when received and taking into account
all applicable recurring and nonrecurring expenses.
51
<PAGE> 231
P(1+T)n=ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
N = number of
ERV = ending redeemable value of hypothetical $1,000 payment made at
the beginning of the specified periods at the end of the
specified periods.
Each Fund also may quote annual, average annual and annualized total
return and aggregate total return performance data, both as a percentage and as
a dollar amount based on a hypothetical $1,000 investment. Such data will be
computed as described above, except that as required by the periods of the
quotations, actual annual, annualized or aggregate data, rather than average
annual data may be quoted. Actual annual or annualized total return data
generally will be lower than average total return data since the average rates
of return reflect compounding of return; aggregate total return data generally
will be higher than average annual total return data since the aggregate rates
of return reflect compounding over a longer period of time.
Yield quotations for the Funds, other than the Money Market Fund, is
calculated by dividing net investment income of a Fund per share earned during a
30 day period by the maximum offering price per share on the last day of the
period according to the following formula:
Yield=2[(a-b/cd+1)6-1]
Where: a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding during the period,
that were entitled to receive dividends.
d = the maximum offer price per share on the last day of the period.
Yield quotations for the Money Market Fund will be computed based on a
seven day period by determining the net change, exclusive of capital changes and
income other than investment income, in the value of a hypothetical pre-existing
account having a balance of one share at the beginning of the period,
subtracting a hypothetical change reflecting deductions from shareholder
accounts, and dividing the difference by the value of the account at the
beginning of the base period to obtain the base period return, and then
multiplying the base period return by (365/7) with the resulting yield figure
carried to at least the nearest hundredth of one percent. The effective yield of
the Money Market Fund for a seven-day period is computed by expressing the
unannualized return for that period on a compounded, annualized basis by adding
1, raising the sum to a power equal to 365 divided by 7, and subtracting 1 from
the result according to the following formula:
Effective Yield=[(Base Period Return + 1)365/7]-1.
The Money Market Fund's actual yields will fluctuate, and are not
necessarily indicative of future actual yields. Actual yields are dependent on
such variables as portfolio quality, average portfolio maturity, the type of
instruments in which investments are made, changes in interest rates on money
market instruments, portfolio expenses and other factors.
A Fund may also advertise in items of sales literature an "actual
distribution rate" which is computed in the same manner as yield except that
actual income dividends declared per share during the period in question are
substituted for net investment income per share.
Any distribution rate, yield or total rate of return figure should not
be considered as representative of the performance of a Fund in the future. In
addition, the Income Funds' performance figures are not directly comparable to
those of bank deposits and other similar investments, which maintain a fixed
principal value and pay a fixed yield on the principal amount. These Funds' net
asset values are not fixed. They vary based not only upon the type, quality and
maturities of the securities held in the Funds, but also on the changes in the
current value of such securities and on changes in the Funds' expenses. For
narrative discussions of the Fund's performance including graphs comparing Funds
to various securities indexes, please request a copy of an Annual Report to
Shareholders from the Corporation.
52
<PAGE> 232
From time to time, a Fund's performance and performance of comparable
investments may be compared to that of the Consumer Price Index or various
unmanaged indexes such as the Dow Jones Industrial Average, the S&P 500, the
Lehman Brothers Government/Corporate Bond Index, the Lehman Brothers Government
Bond Index, Lehman Brothers Mortgage Backed Index, Lehman Brothers Municipal
Bond Index, Morgan Stanley Goldmine Index, the Salomon Smith Barney Low Grade
Index, the Salomon Smith Barney Analytical Record of Yield and Yield Spreads,
the Salomon Smith Barney Corporate Bond Rate-of-Return Index, and the Salomon
Smith Barney World Money Market Index, Bond-20 Bond Index; and it may also be
compared to the performance of other appropriate fixed income or equity mutual
funds or mutual fund indexes as reported by Lipper Analytical Services, Inc.
("Lipper") CDA Investment Technologies, Inc. ("CDA"). Lipper and CDA are widely
recognized independent mutual fund reporting services. Lipper and CDA
performance calculations are based upon changes in net asset value with all
dividends reinvested and do not include the effect of any sales charges.
Investors may also look to mutual fund reporting services such as Computer
Directions Advisor Services, Inc., Moody's Bond Survey Index, Nelson's
Investment Manager Data Base, Morningstar, Inc. and mortgage trade and other
publications to compare the performance of each Fund with other mutual funds in
that Fund's category. Also, a Fund's performance may be compared to the
historical returns of various investments, performances indexes of those
investments or economic indicators, included but not limited to stocks, bonds,
certificates of deposit, money market deposit accounts, money market funds and
US Treasury Bills. Certain of these alternative investments may offer fixed
rates of return and guaranteed principal and may be insured. Betas utilized will
be calculated by CDA Investment Technologies, Inc.
The Corporation's performance may be compared in advertising to the
performance of other mutual funds in general or the performance of particular
types of mutual funds, especially those with similar objectives. Lipper, an
independent mutual fund performance rating service headquartered in Summit, New
Jersey, provides rankings which may be used from time to time.
From time to time, articles about the Corporation regarding its
performance or ranking may appear in national publications such as Kiplinger's
Personal Finance Magazine, Money Magazine, Financial World, Morningstar, Dalbar,
Value Line Mutual Fund Survey, Forbes, Fortune, Business Week, Wall Street
Journal, Donaghue Mutual Funds and Barron's. Some of these publications may
publish their own rankings or performance reviews of mutual funds, including the
Corporation. Reference to or reprints of such articles may be used in the
Corporation's promotional literature.
The Money Market Fund may compare its performance in advertising to the
yield on Certificates of Deposit ("CDs") or other investments issued by banks.
The Money Market Fund differs from bank investments in that bank products offer
fixed or variable rates; principal is fixed and may be insured. Money market
funds seek to maintain a stable net asset value and yield fluctuates. Further,
the Fund may offer greater liquidity or higher potential returns than CDs.
53
<PAGE> 233
The Corporation may advertise examples of the effects of periodic
investment plans, including the principal of dollar cost averaging. Dollar cost
averaging programs provide an opportunity to invest a fixed dollar amount in a
fund at periodic intervals, thereby purchasing fewer shares when the price is
high and more shares when the price is low. While such a strategy does not
assure a profit guard against loss in a declining market, the investor's cost
per share can be lower if fixed numbers of shares had been purchased at periodic
intervals. In evaluating such a plan, consideration should be given to the
shareholder's ability to continue purchasing shares through periods of low price
levels.
TAXES
In order to qualify for federal income tax treatment as a regulated
investment company under Subchapter M of the IRC for a taxable year, each Fund
must, among other things, (a) derive at least 90% of its gross income during
such taxable year from qualifying income (i.e., dividends, interest, payments
with respect to loans of stock and securities, gains from the sale or other
disposition of stock or securities or options thereon, and certain other related
income); (b) diversify its holdings so that, at the end of each fiscal quarter
of such taxable year, (i) at least 50% of the market value of its total assets
is represented by cash, cash items, U.S. Government Securities, securities of
other regulated investment companies, and other securities limited, in the case
of other securities for purposes of this calculation, in respect of any one
issuer, to an amount not greater than 5% of the value of its total assets or 10%
of the voting securities of the issuer, and (ii) not more than 25% of the value
of its assets is invested in the securities of any one issuer (other than U.S.
Government Securities).
Each Fund has qualified and intends to continue to qualify as a
"regulated investment company" under the provisions of the IRC as amended. For
purposes of the IRC, each Fund is regarded as a separate regulated investment
company. If any Fund qualifies as a "regulated investment company" and complies
with distribution requirements applicable to regulated investment companies, the
Fund will be relieved of federal income tax on the income and capital gains
distributed to shareholders.
Dividends declared from a Fund's net investment income, including its
net realized short-term capital gains in excess of its net realized long-term
capital losses, are taxable to its shareholders as ordinary income, whether such
dividends are received in cash or additional shares. If, for any taxable year, a
Fund complies with certain requirements, some or all of the dividends paid out
of the Fund's income from dividends paid by domestic corporations received by
the Fund's corporate shareholders may qualify for the 70% dividends received
deduction available to corporations. Dividends paid by the Income Funds and the
International Growth Fund are not expected to be eligible for dividends received
deductions.
Distributions declared from a Fund's realized net capital gain
(realized net capital gains from the sale of assets held for more than 12 months
in excess of realized net short-term capital losses) and designated by the Fund
as a capital gain dividend in a written notice to the shareholders are taxable
to such shareholders as capital gain without regard to the length of time
54
<PAGE> 234
a shareholder has held stock of the Fund and regardless of whether paid in cash
or additional shares. Capital gain dividends received by individuals are taxed
at the minimum rate of 20%.
The Funds may be required to withhold for federal income taxes 31%
("Back-Up Withholding") of the distributions and the proceeds of redemptions
payable to shareholders who fail to comply with regulations requiring that they
provide a correct social security or taxpayer identification number or to make
required certifications, or who have been notified by the Internal Revenue
Service that they are subject to Back-up Withholding. Corporate shareholders and
certain other shareholders specified in the IRC are exempt from Back-Up
Withholding.
Upon a sale or exchange of its shares, a shareholder will realize a
taxable gain or loss depending on its basis in the shares. Such gain or loss
will be treated as capital gain or loss if the shares are capital assets in the
shareholder's hands. In the case of an individual, any such capital gain will be
treated as short-term capital gain if the shares were held for not more than 12
months and long-term gain taxable at the maximum rate of 20% if such shares were
held for more than 18 months. In the case of a corporation, any such capital
gain will be treated as long-term capital gain, taxable at the same rates as
ordinary income, if such shares were held for more than 12 months. Any such
capital loss will be long-term capital loss if the shares were held for more
than 12 months. A sale or exchange of shares held for six months or less,
however, will be treated as long-term capital loss to the extent of any
long-term capital gains distributions with respect to such shares.
Generally, any loss realized on a sale or exchange of shares of a Fund
will be disallowed if other Fund shares are acquired (whether through the
automatic reinvestment of dividends or otherwise) within a 61-day period
beginning 30 days before and ending 30 days after the date on which the shares
are disposed. In such a case, the basis of the shares acquired will be adjusted
to reflect the disallowed loss.
In certain circumstances (e.g., an exchange), a shareholder who has
held shares in a Fund for not more than 90 days may not be allowed to include
certain sales charges incurred in acquiring such shares for purposes of
calculating gain or loss realized upon the sale or exchange of shares of the
Fund.
No gain or loss will be recognized by Class B shareholders upon the
conversion of Class B shares into Class A shares.
Tax-Exempt Income Fund
Dividends derived from interest on Municipal Securities and designated
by the Tax-Exempt Income Fund as exempt interest dividends by written notice to
the shareholders, under existing law, are not subject to federal income tax.
Dividends derived from net capital gains realized by the Fund are taxable to
shareholders as a capital gain upon distribution. Any short-term capital gains
or any taxable interest income or accrued market discount (whether on taxable or
tax-exempt securities)
55
<PAGE> 235
realized by the Fund will be distributed as a taxable ordinary income dividend
distribution. These rules apply whether such distribution is made in cash or in
additional shares. The percentage of income that is tax-exempt is applied
uniformly to all distributions made by the Fund during each year. As with shares
in all Funds, a sale, exchange or redemption of shares in the Tax-Exempt Income
Fund is a taxable event and may result in capital gain or loss. Any capital loss
realized from shares held for six months or less is disallowed to the extent of
tax-exempt dividend income received.
The Tax-Exempt Income Fund declares and pays dividends monthly on the
last business day of the month. When a shareholder redeems shares of the Fund on
other than a dividend payment date, a portion of the shareholder's redemption
proceeds will represent accrued tax-exempt income which will be treated as part
of the amount realized for purposes of capital gains computations for federal
and state or local income tax purposes and will not be tax-exempt.
Income from certain "private activity" bonds issued after August 7,
1986, are items of tax preference for the alternative minimum tax at a maximum
rate of 28% for individuals and 20% for corporations. If the Fund invests in
private activity bonds, shareholders may be subject to the alternative minimum
tax on that part of such Fund distributions derived from interest income on
those bonds. The Tax-Exempt Income Fund does not intend to invest more than 20%
of its assets in private activity bonds. In addition, a portion of a
distribution derived from any tax-exempt interest incurred, whether or not from
private activity bonds, will be taken into account in determining the corporate
alternative minimum tax. In higher income brackets, up to 85% of an individual's
Social Security benefits may be subject to federal income tax. Along with other
factors, total tax-exempt income, including any tax-exempt dividend income from
the Fund, is taken into account in determining that portion of Social Security
benefits which is taxed.
All or a portion of the interest incurred by a shareholder to purchase
or carry an investment in the Tax-Exempt Income Fund will not be deductible.
The treatment for state and local tax purpose of distributions from the
Tax-Exempt Income Fund representing Municipal Securities interests will vary
according to the laws of state and local taxing authorities.
FOREIGN INCOME TAXES
Investment income received by the Corporation from sources within
foreign countries may be subject to foreign income taxes withheld at the source.
The United States has entered into tax treaties with many foreign countries
which entitle the Corporation to a reduced rate of tax or exemption from tax on
such income. It is impossible to determine the effective rate of foreign tax in
advance since the amount of the Corporation's assets to be invested within
various countries is not known. The Corporation intends to operate so as to
obtain treaty-reduced rates of tax where applicable.
56
<PAGE> 236
To the extent that the International Growth Fund is liable for foreign
income taxes withheld at the source, the Fund also intends to operate so as to
meet the requirements of the IRC to "pass through" to the Fund's shareholders
credits for foreign income taxes paid, but there can be no assurance that the
Fund will be able to do so.
EXCISE TAX
The federal tax laws impose a 4% nondeductible excise tax on each
regulated investment company with respect to the amount, if any, by which such
company does not meet certain specified distribution requirements. Each Fund
intends to comply with such distribution requirements and thus does not expect
to incur the 4% nondeductible excise tax.
GENERAL
The foregoing is a general and abbreviated summary of the applicable
provisions of the IRC and Treasury Regulations in effect, as currently
interpreted by the Courts and by the Internal Revenue Service in published
revenue rulings and in private letter rulings and is only applicable to U.S.
persons. These interpretations can be changed at any time. For the complete
provisions, reference should be made to the pertinent IRC sections and the
Treasury Regulations promulgated thereunder. The above discussion covers only
federal income tax considerations with respect to the Funds and their
shareholders. State and local tax laws vary greatly, especially with regard to
the treatment of exempt-interest dividends. Shareholders should consult their
own tax advisers for more information regarding the federal, state, and local
tax treatment of each Fund's shareholders.
Statements indicating the tax status of distributions to each
shareholder will be mailed to each shareholder annually.
DIVIDENDS AND DISTRIBUTIONS
It is the Corporation's intention to distribute substantially all of
the net investment income and realized net capital gains, if any, of each Fund.
The per share dividends and distribution on each class of shares of a Fund will
be reduced as a result of any service fees applicable to that class. For
dividend purposes, net investment income of each Fund will consist of
substantially all dividends received, interest accrued, net short-term capital
gains realized by such Fund less the estimated expenses of such Fund.
Unless shareholders request otherwise, by notifying the Fund's Transfer
Agent, dividends and capital gains distributions will be automatically
reinvested in shares of the respective Fund at net asset value; such
reinvestments automatically occur on the payment date of such dividends
and capital gains distributions. At the election of any shareholder, dividends
or capital gains distributions, or both, will be distributed in cash to such
shareholders. However, if it is determined that the U.S. Postal Service cannot
properly deliver Fund mailings to the shareholder, the respective Funds will
terminate the shareholder's election to receive dividends and other
57
<PAGE> 237
distributions in cash. Thereafter, the shareholder's subsequent dividends and
other distributions will be automatically reinvested in additional shares of the
respective Funds until the shareholder notifies the Transfer Agent or the
Corporation in writing of his or her correct address and requests in writing
that the election to receive dividends and other distributions in each be
reinstated.
Distributions of capital gains from each of the Funds, other than the
Money Market Fund, are made annually. Dividends from investment income of the
Equity Funds (except the Equity Income Fund) and Managed Fund are declared and
paid annually. Dividends on the Equity Income Fund are paid semiannually.
Dividends from investment income of the Income Funds are declared daily and paid
monthly. Dividends from investment income and any net realized capital gains of
the Money Market Fund are declared daily and reinvested monthly in additional
shares of the Money Market Fund at net asset value.
Although the legal rights of each Class of shares are substantially
identical, the different expenses borne by each Class will result in different
net asset values and dividends for each Class. It is expected, however, that the
net asset values of the three Classes will tend to converge immediately after
the recording of dividends, which will differ by approximately the amount of the
distribution and service related expense accrual differential among the Classes.
ADDITIONAL INFORMATION
CAPITAL STOCK
The authorized capital stock of the Corporation consists of Common
Stock, par value $0.10 per share. The shares of Common Stock are divided into 14
series with each series representing a separate Fund. The Board of Directors may
determine the number of authorized shares for each series and to create new
series of Common Stock. It is anticipated that new Classes will be authorized by
the Board from time to time as new Funds with separate investment objectives and
policies are established.
Each Class of shares is entitled to participate in dividends and
distributions declared by the respective Funds and in net assets of such Funds
upon liquidation or dissolution remaining after satisfaction of outstanding
liabilities, except that each Class will bear its own distribution and
shareholder servicing charges. The shares of each Fund, when issued, will be
fully paid and nonassessable, have no preference, preemptive, conversion
[(except as described above),] exchange or similar rights, and will be freely
transferable. Holders of shares of any Fund are entitled to redeem their shares
as set forth in the Prospectus. [The rights of redemption and conversion rights
are described elsewhere herein and in the Prospectus.]
VOTING RIGHTS
Shares of each Fund are entitled to one vote per share and fractional
votes for fractional shares. The Corporation's shareholders have the right to
vote on the election of Directors of the
58
<PAGE> 238
Corporation and on any and all other matters on which, by law or the provisions
of the Corporation's bylaws, they may be entitled to vote. [Voting rights are
not cumulative, so that holders of more than 50% of the shares voting in the
election of Directors can, if they choose to do so, elect all of the Directors
of the Corporation, in which event the holders of the remaining shares are
unable to elect any person as a Director.]
On matters relating to all Funds or Classes of shares and affecting all
Funds or Class of shares in the same manner, shareholders of all Funds or
Classes of shares are entitled to vote. On any matters affecting only one Fund,
only the shareholders of that Fund are entitled to vote. On matters relating to
all the Funds but affecting the Funds differently, separate votes by Fund are
required. Each Class has exclusive voting rights with respect to matters related
to distribution and servicing expenditures, as applicable.
The Corporation and its Funds are not required by Maryland law to hold
annual meetings of shareholders under normal circumstances. The Board of
Directors or the shareholders may call special meetings of the shareholders for
action by shareholder vote, including the removal of any or all of the
Directors, as may be required by either the Articles of Incorporation or bylaws
of the Corporation, or the Investment Company Act of 1940. Shareholders possess
certain rights related to shareholder communications which, if exercised, could
facilitate the calling by shareholders of a special meeting.
REPORTS TO SHAREHOLDERS
The Corporation sends to all its shareholders annual and semiannual
reports, including a list of investment securities held in the Funds.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT
State Street Bank and Trust Company whose address is One Heritage
Drive, The Joseph Palmer Building, North Quincy, Massachusetts, 02171, has been
retained to act as custodian of the assets of the Corporation. The custodian is
responsible for safeguarding and controlling the cash and securities of the
Funds, handling the receipt and delivery of securities and collecting interest
and dividends on the Funds' investments.
National Financial Data Services, Inc. acts as the Corporation's
Transfer Agent and Dividend Disbursing Agent. National Financial Data Services,
Inc. is a joint venture of State Street Bank & Trust Company of Boston,
Massachusetts, and DST Systems, Inc. of Kansas City, Missouri.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, whose address is 1100 Campanile Building,
Atlanta, Georgia, 30309, has been retained to serve as the Corporation's
independent accountants. The
59
<PAGE> 239
independent accountants are responsible for auditing the annual financial
statements of the Funds.
FINANCIAL STATEMENTS
60
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APPENDIX A
RATINGS OF CORPORATE DEBT SECURITIES
MOODY'S INVESTORS SERVICE, INC. (1)
Aaa Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as
"gilt edge."
Aa Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as
high grade bonds.
A Bonds rated A possess many favorable investment attributes and are to
be considered as upper medium grade obligations.
Baa Bonds rated Baa are considered as medium grade obligations, i.e., they
are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics
as well.
Ba Bonds rated Ba are judged to have speculative elements: their future
cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty
of position characterize bonds in this case.
B Bonds rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments of or
maintenance of other terms of the contract over any long period of time
may be small.
Caa Bonds rated Caa are of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or
interest.
Ca Bonds rated Ca represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked
short-comings.
---------------------
(1) Moody's applies numerical modifiers, 1, 2 and 3 in generic rating
classification from Aa through B in its corporate bond rating
system. The modifier 1 indicates that the security ranks in the
higher end of its generic rating category; the modifier 2
indicates a mid-range ranking; and the modifier 3 indicates that
the issue ranks in the lower end of its generic rating category.
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<PAGE> 241
STANDARD & POOR'S CORPORATION (2)
AAA Bonds rated AAA have the highest rating assigned by Standard & Poor's
to a debt obligation. Capacity to pay interest and repay principal is
extremely strong.
AA Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest-rated issues only in a small
degree.
A Bonds rated A have a strong capacity to pay interest and repay
principal, although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than bonds
in higher-rated categories.
BBB Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for bonds in this category than for bonds
in higher-rated categories.
BB, Bonds rated BB, B, CCC, and CC are regarded, on balance, as
predominately B, speculative with respect to the issuer's capacity to
pay interest and repay principal in
CCC, accordance with the terms of the obligation. BB indicates the lowest
degree of
CC speculation and CC the highest degree of speculation. While such bonds
will likely have some quality and protective characteristics, these are
outweighed by large uncertainties or major risk exposures to adverse
conditions.
----------------------
(2) Plus (+) or Minus (-): The ratings from AA to BB may be modified by the
addition of a plus or minus sign to show relative standing within the
major rating categories.
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APPENDIX B
DESCRIPTION OF MUNICIPAL SECURITIES
Municipal Securities are notes and bonds issued by or on behalf of
states, territories and possessions of the United States and the District of
Columbia and their political subdivisions, agencies and instrumentalities,
the interest on which is exempt from federal income taxes and, in certain
instances, applicable state or local income taxes. These securities are
traded primarily in the over-the-counter market.
Municipal Securities are issued to obtain funds for various public
purposes, including the construction of a wide range of public facilities
such as airports, bridges, highways, housing, hospitals, mass
transportation, schools, streets, water and sewer works and gas and electric
utilities. Municipal Securities may also be issued in connection with the
refunding of outstanding Municipal Securities obligations, obtaining funds
to lend to other public institutions and for general operating expenses.
Industrial Development Bonds ("IDBs") are issued by or on behalf of public
authorities to obtain funds to provide privately operated facilities for
business and manufacturing, housing, sports, pollution control, and for
airport, mass transit, port and parking facilities and are considered
tax-exempt bonds if the interest thereon is exempt from federal income
taxes.
The two principal classifications of tax-exempt bonds are "general
obligation" and "revenue." General obligation bonds are secured by the
issuer's pledge of its full faith and credit and taxing power for the
payment of principal and interest. Revenue bonds are payable only from the
revenues derived from a particular facility or class of facilities or, in
some cases, from the proceeds of a special excise tax or other specific
revenue source. Although IDBs are issued by municipal authorities, they are
generally secured only by the revenues derived from payment of the
industrial user. The payment of principal and interest on IDBs is dependent
solely upon the ability of the user of the facilities financed by the bonds
to meet its financial obligations and the pledge, if any, of real and
personal property so financed as security for such payment.
Tax-exempt notes are of short maturity, generally less than three
years. They include such securities as Project Notes, Tax Anticipation
Notes, Revenue Anticipation Notes, Bond Anticipation Notes and Construction
Loan Notes. Tax-exempt commercial paper consists of short-term obligations
generally having a maturity of less than nine months.
New issues of Municipal Securities are normally offered on a
when-issued basis, which means that delivery and payment for these
securities normally takes place 15 to 45 days after the date of commitment
to purchase.
Yields of Municipal Securities depend upon a number of factors,
including economic, money and capital market conditions, the volume of
Municipal Securities available, conditions within the Municipal Securities
market, and the maturity, rating and size of individual offerings.
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Changes in market values of Municipal Securities may vary inversely in
relation to changes in interest rates. The magnitude of changes in market
values in response to changes in market rates of interest typically varies
in proportion to the quality and maturity of obligations. In general, among
Municipal Securities of comparable quality, the longer the maturity, the
higher the yield, and the greater potential for price fluctuations.
FLOATING RATE AND VARIABLE RATE SECURITIES
The Tax-Exempt Income Fund may invest in floating rate and variable
rate tax-exempt securities. These securities are normally IDBs or revenue
bonds that provide that the rate of interest is set as a specific percentage
of a designated base rate, such as rates of treasury bills or bonds or the
prime rate at a major commercial bank and provide that the holders of the
securities can demand payment of the obligation on short notice at par plus
accrued interest, which amount may be more or less than the amount initially
paid for the bonds. Floating rate securities have an interest rate which
changes whenever there is a change in the designated base interest rate,
while variable rate securities provide for a specific periodic adjustment in
the interest rate. Frequently such securities are secured by letters of
credit or other credit support arrangements provided by banks. The quality
of the underlying credit or of the bank, as the case may be, must be
equivalent to the long-term bond or commercial paper rating stated above.
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PART C
OTHER INFORMATION
Item 23. Exhibits.
(a) (i) Registrant's Charter [Articles of Incorporation]:
Incorporated herein by reference to Post-Effective Amendment
No. 39 to Registrant's Registration Statement on Form N-1A
(File No. 2-28097) filed on April 28, 1994.
(ii) Amendment to Charter [Articles of Incorporation]
dated April 26, 1995: Incorporated herein by reference to
Post-Effective Amendment No. 43 to Registrant's Registration
Statement on Form N-1A (File No. 2-28097) filed on April 26,
1995.
(b) (i) By-Laws: Incorporated herein by reference to
Post-Effective Amendment No. 39 to Registrant's Registration
Statement on Form N-1A (File No. 2-28097) filed on April 28,
1994.
(ii) Amendment to By-Laws, dated November 17, 1994:
Incorporated herein by reference to Post-Effective Amendment
No. 43 to Registrant's Registration Statement on Form N-1A
(File No. 2-28097) filed on April 26, 1995.
(c) Specimen share certificate: Incorporated herein by reference
to Post-Effective Amendment No. 29 to Registrant's
Registration Statement on Form N-1A (File No. 2-28097) filed
on November 27, 1987.
(d) (i) Investment Adviser's Agreement between Registrant and
Enterprise Capital Management, Inc. ("Enterprise
Capital").*
(ii) Portfolio Manager's Agreement between Enterprise
Capital and Montag & Caldwell, Inc.*
(iii) Portfolio Manager's Agreement Between Enterprise
Capital and Retirement System Investors Inc.*
(iv) Portfolio Manager's Agreement between Enterprise
Capital and OpCap Advisors*
(v) Portfolio Manager's Agreement between Enterprise
Capital and 1740 Advisers, Inc.*
(vi) Portfolio Manager's Agreement between Enterprise
Capital and Provident Investment counsel, Inc.*
(vii) Portfolio Manager's Agreement between Enterprise
Capital and William D. Witter, Inc.*
(viii) Portfolio Manager's Agreement between Enterprise
Capital and GAMCO Investors, Inc.*
(ix) Portfolio Manager's Agreement between Enterprise
Capital and Vontobel USA Inc.*
(x) Portfolio Manager's Agreement between Enterprise
Capital and Sanford C. Bernstein & Co., Inc.*
(xi) Portfolio Manager's Agreement between Enterprise
Capital and Caywood-Scholl Capital Management*
(e) (i) General Distributor's Agreement: Incorporated herein
by reference to Post-Effective Amendment No. 39 to
Registrant's Registration Statement on Form N-1A
(File No. 2-28097) filed on April 28, 1994.
(ii) Addendum to Distributor's Agreement: Incorporated
herein by reference to Post-Effective Amendment No.
43 to Registrant's Registration Statement on Form
N-1A (File No. 2-28097) filed on April 26, 1995.
(iii) Prototype Soliciting Broker/Dealer Agreement.
Incorporated herein by reference to Post-Effective
Amendment No. 48 to Registrant's Registration
Statement on Form N-1A (File No. 2-28097) filed on
March 2, 1998.
(f) Not applicable.
<PAGE> 245
(g) Form of Custodian Contract: Incorporated herein by reference
to Post-Effective Amendment No. 39 to Registrant's
Registration Statement on Form N-1A (File No. 2-28097) filed
on April 28, 1994.
(h) Not applicable.
(i) Opinion and Consent of Counsel.*
(j) Consent of PricewaterhouseCoopers LLP.*
(k) Not applicable.
(l) Not applicable.
(m) Amended and Restated Plan of Distribution Pursuant to Rule
12b-1 for Class A, B and C shares. Incorporated herein by
reference to Exhibit 6(i) to Post-Effective Amendment No. 48
to Registrant's Registration Statement on Form N-1A (File No.
2-28097) filed on March 2, 1998.
(n) Financial Data Schedules.*
(o) (i) 18f-3 Plan.*
(ii) Powers of Attorney.*
* To be filed by amendment on or before May 3, 1999.
Item 24. Persons Controlled By or Under Common Control with Registrant.
There are no persons controlled by or under common control with
Registrant.
Item 25. Indemnification.
Reference is made to the provisions of Article Six of Registrant's
Articles of Incorporation which is incorporated herein by reference to
Post-Effective Amendment No. 39 to the Registration Statement on Form
N-1A (File No. 2-28097) filed on April 26, 1995.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of Registrant pursuant to the foregoing provision or otherwise,
Registrant has been advised that in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment of Registrant of expenses
incurred or paid by a director, officer or controlling person of
Registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person, Registrant
will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such
<PAGE> 246
indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication
of such issue.
Item 26. Business and Other Connections of the Investment Adviser.
See "Management of The Fund" in the Prospectus and "Investment Advisory
and Other Services" in the Statement of Additional Information for
information regarding the business and other connections of the
Investment Adviser
For information as to the business, profession, vocation or employment
of a substantial nature of each of the officers and directors of
Enterprise Capital Management, Inc. reference is made to Part B of
Post-Effective Amendment to the Registrant's Registration Statement and
to the registration of Form ADV (File No. ) of Enterprise Capital
Management, Inc. filed under the Investment Adviser Act of 1940, which
is incorporated herein by reference.
Montag & Caldwell, Inc., Retirement System Investors, Inc., OpCap
Advisors, 1740 Advisers, Inc., Provident Investment Counsel, Inc.,
William D. Witter, Inc., Gabelli Asset Management Company, Brinson
Partners, Inc., Sanford C. Bernstein & Co., Inc., TCW Funds Management,
Inc., Caywood-Scholl Capital Management, and MBIA Capital Management
Corp.; the Fund Managers of certain of the Funds of the Registrant, are
primarily engaged in the business of rendering investment advisory
services. Reference is made to the recent Form ADV and schedules
thereto on file with the Commission for a description of the names and
employment of the directors and officers of the following Fund
Managers, and other required information:
<TABLE>
<CAPTION>
File No.
--------
<S> <C>
Montag & Caldwell, Inc. 801-15398
Retirement System Investors, Inc. 801-36893
OpCap Advisors 801-27180
1740 Advisers, Inc. 801-8176
Provident Investment Counsel, Inc. 801-30020
William D. Witter, Inc. 801-12695
Gabelli Asset Management Company 801-14132
Vontobel USA Inc.
Sanford C. Bernstein & Co., Inc. 801-10488
TCW Funds Management Corp. 801-29075
Caywood-Scholl Capital Management 801-26996
MBIA Capital Management Corp. 801-46649
</TABLE>
Item 27. Principal Underwriters.
(a) Enterprise Fund Distributors, Inc. is the principal
underwriter of the Funds' shares.
(b) The information contained in the registration on Form BD of
Enterprise Fund
<PAGE> 247
Distributor's Inc. (File No. ________), filed under the
Securities Exchange Act of 1934, is incorporated herein by
reference.
(c) Inapplicable.
Item 28. Location and Accounts and Records.
<TABLE>
<CAPTION>
Entity Function Address
- ------ -------- -------
<S> <C> <C>
The Enterprise Group of Registrant Atlanta Financial Center
Funds, Inc. 3343 Peachtree Road, N.E.
Suite 450
Atlanta, GA 30326
Enterprise Capital Group Investment Adviser Same as above.
Management, Inc.
Enterprise Fund Distributors, Distributor Same as above.
Inc.
State Street Bank and Trust Custodian One Heritage Drive
Company The Joseph Palmer
Building
North Quincy, MA 02171
National Financial Data Transfer Agent and 330 W. 9th Street
Services, Inc. Dividend Disbursing Agent Kansas City, MO 64105
</TABLE>
The records of the Fund Managers are kept at the following locations:
<TABLE>
<S> <C>
Growth Fund Montag & Caldwell, Inc.
1100 Atlanta Financial Center
3343 Peachtree Road, N.E.
Atlanta, GA 30326
Growth & Income Fund Retirement Systems Investors, Inc.
317 Madison Avenue
New York, NY 10017 [CONFIRM ZIP]
Equity Fund OpCap Advisors
One World Financial Center
New York, NY 10281
Equity Income Fund 1740 Advisers, Inc.
1740 Broadway
New York, NY 10019
Capital Appreciation Fund Provident Investment Counsel
300 North Lake Avenue
Pasadena, CA 91101
</TABLE>
<PAGE> 248
<TABLE>
<S> <C>
Small Company Growth Fund William D. Witter, Inc.
One Citicorp Center
153 East 53rd Street
New York, NY 10022
Small Company Value Fund GAMCO Investors, Inc.
One Corporate Center
Rye, NY 10580
International Growth Fund Vontobel USA, Inc.
450 Park Avenue
New York, New York 10022
Global Financial Services Fund Sanford C. Bernstein & Co., Inc.
767 Fifth Avenue
New York, NY 10153-0185
Government Securities Fund TCW Funds Management, Inc.
865 South Figueroa Street, Suite 1800
Los Angeles, CA 90017
High-Yield Bond Fund Caywood-Scholl Capital Management
4350 Executive Drive, Suite 125
San Diego, CA 92121
Tax-Exempt Income Fund MBIA Capital Management Corp.
113 King Street
Armonk, NY 10504
Managed Fund OpCap Advisors
One World Financial Center
New York, NY 10281
Money Market Fund Enterprise Capital Management, Inc.
Atlanta Financial Center
3343 Peachtree Road, N.E.,
Suite 450
Atlanta, GA 30326
</TABLE>
Item 29. Management Services.
Inapplicable.
Item 30. Undertakings.
Inapplicable.
<PAGE> 249
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Atlanta,
State of Georgia, on the 25th day of February 1999.
THE ENTERPRISE GROUP OF FUNDS,
INC.
By: /s/ Victor Ugolyn
----------------------------
Victor Ugolyn
Chairman, President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement of the Registrant has
been signed below by the following persons in the capacities and on the date
indicated:
<TABLE>
<S> <C> <C>
/s/ Victor Ugolyn
- --------------------------------- Chairman, President and Chief February 25, 1999
Victor Ugolyn Executive Officer
/s/ Phillip G. Goff
- --------------------------------- Principal Financial and Accounting February 25, 1999
Phillip G. Goff Officer
*
- ---------------------------------
Arthur T. Dietz Director February 25, 1999
*
- ---------------------------------
Samuel J. Foti Director February 25, 1999
*
- ---------------------------------
Arthur Howell Director February 25, 1999
*
- ---------------------------------
Lonnie Hope Director February 25, 1999
*
- ---------------------------------
William A. Mitchell, Jr. Director February 25, 1999
*
- ---------------------------------
Michael I. Roth Director February 25, 1999
By: /s/ Catherine R. McClellan
------------------------------
(Attorney-in-Fact)
</TABLE>
<PAGE> 250
[EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description
Number -----------
------
<S> <C>
(d) Investment Advisory and Management Agreement
(e)(i) Distribution Agreement
(i) Opinion and Consent of Counsel
(j) Consent of Independent Accountants
(m)(i) Distribution Plans pursuant to Rule 12b-1 (Class A shares).
(m)(ii) Distribution Plans pursuant to Rule 12b-1 (Class B shares).
(m)(iii) Distribution Plan pursuant to Rule 12b-1 (Class II shares).
(n) Financial Data Schedules]
</TABLE>
