THE ENTERPRISE GROUP OF FUNDS, INC.
[GRAPHIC]
ANNUAL REPORT
December 31, 1999
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THE ENTERPRISE GROUP OF FUNDS, INC.
AGGRESSIVE GROWTH
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Enterprise Multi-Cap Growth Fund
Enterprise Small Company Growth Fund
Enterprise Small Company Value Fund
GROWTH
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Enterprise Growth Fund
Enterprise Capital Appreciation Fund
Enterprise Equity Fund
Enterprise Growth and Income Fund
Enterprise Equity Income Fund
Enterprise International Growth Fund
SECTOR
------
Enterprise Internet Fund
Enterprise Global Financial Services Fund
HYBRID
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Enterprise Managed Fund
Enterprise Balanced Fund
FIXED INCOME
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Enterprise High-Yield Bond Fund
Enterprise Government Securities Fund
Enterprise Tax-Exempt Income Fund
Enterprise Money Market Fund
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Table of Contents
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<TABLE>
<CAPTION>
Page
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<S> <C>
Enterprise Multi-Cap Growth Fund
Manager's Comments .......................... 4
Portfolio of Investments .................... 7
Enterprise Small Company Growth Fund
Manager's Comments .......................... 9
Portfolio of Investments .................... 12
Enterprise Small Company Value Fund
Manager's Comments .......................... 13
Portfolio of Investments .................... 15
Enterprise Growth Fund
Manager's Comments .......................... 19
Portfolio of Investments .................... 22
Enterprise Capital Appreciation Fund
Manager's Comments .......................... 23
Portfolio of Investments .................... 26
Enterprise Equity Fund
Manager's Comments .......................... 27
Portfolio of Investments .................... 29
Enterprise Growth and Income Fund
Manager's Comments .......................... 30
Portfolio of Investments .................... 33
Enterprise Equity Income Fund
Manager's Comments .......................... 35
Portfolio of Investments .................... 37
Enterprise International Growth Fund
Manager's Comments .......................... 39
Portfolio of Investments .................... 42
Enterprise Internet Fund
Manager's Comments .......................... 44
Portfolio of Investments .................... 48
Enterprise Global Financial Services Fund
Manager's Comments .......................... 50
Portfolio of Investments .................... 53
Enterprise Managed Fund
Managers' Comments .......................... 55
Portfolio of Investments .................... 59
Enterprise Balanced Fund
Manager's Comments .......................... 63
Portfolio of Investments .................... 66
Enterprise High-Yield Bond Fund
Manager's Comments .......................... 68
Portfolio of Investments .................... 71
Enterprise Government Securities Fund
Manager's Comments .......................... 77
Portfolio of Investments .................... 80
Enterprise Tax-Exempt Income Fund
Manager's Comments .......................... 81
Portfolio of Investments .................... 84
Enterprise Money Market Fund
Manager's Comments .......................... 86
Portfolio of Investments .................... 88
Statements of Assets and Liabilities ......... 90
Statements of Operations ..................... 92
Statements of Changes in Net Assets .......... 94
Financial Highlights ......................... 98
Notes to Financial Statements ................ 132
</TABLE>
Returns in this report are historical and do not guarantee future performance of
any fund. Investment return and principal value will fluctuate so that shares,
when redeemed, may be worth more or less than their original cost.
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[GRAPHIC]
ENTERPRISE
GROUP OF FUNDS
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MESSAGE FROM THE CHAIRMAN
Dear Fellow Shareholders:
As we enter the new century and millennium, let me take this opportunity to
thank you for your confidence in choosing Enterprise to help you achieve your
investment objectives.
1999 was a year that was anything but dull for the investment markets. It
was a year that saw technology and Internet stocks overwhelm Wall Street and
global markets rebound from earlier concerns about economic collapse. However,
fixed-income investors were not so fortunate. For the fixed-income markets, the
year was filled with inflationary concerns, rising interest rates and worries
about Y2K technology disruptions, sending bond prices declining in nearly every
bond category. As measured by the Lehman Brothers Aggregate Bond Index, the bond
market experienced its worst year since 1994, declining 0.82 percent.
On the very positive side, the Dow Jones -------------------------
Industrial Average rose 27.19 percent in 1999, "By structuring each fund
while the Standard & Poor's 500 Stock Index to incorporate what we
gained 21.03 percent, marking the fifth straight believe to be the best
year these two indices have both recorded of each manager's
double-digit gains. Even small stocks, led by investment talents, we
technology and Internet stocks, staged a recovery. provide our shareholders
With a year-end rush, the Russell 2000 Index an excellent investment
managed a 21.26 percent gain for the year and the opportunity available
technology and Internet-laden NASDAQ Composite only through Enterprise."
Index was up a dramatic 86.81 percent, the NASDAQ's -------------------------
highest single return year ever and a record gain for
a U.S. stock index as reported by The Wall Street
Journal. According to Lipper Inc., the average
diversified U.S. stock fund posted a total return of
27.11 percent. On the fixed-income side, Lipper
reported that the average general domestic taxable
fixed-income fund gained 0.45 percent.
For The Enterprise Group of Funds, 1999 brought continued success, both in
investment returns and in our continuing evolution as a rapidly growing,
nationally recognized, mutual fund family. Enterprise continues to be one of the
nation's fastest growing fund companies.(1) Enterprise ranked 44th out of all
672 fund complexes based on net equity sales.(2) The addition of the Enterprise
Multi-Cap Growth and Internet Funds, both managed by Fred Alger Management,
Inc., has provided our shareholders with new aggressive investment options in
the technology and Internet sectors, while the Enterprise Balanced Fund, managed
by Montag & Caldwell, Inc., has further broadened our investment spectrum to
include a fund for investors seeking a mix of equity and fixed-income
investments.
In addition to enhancing our menu of investment options, Enterprise made
manager changes where we believe our shareholders would benefit. Effective
April 1,Vontobel USA Inc. was named manager of the Enterprise International
Growth Fund. In November, Marsico Capital Management, LLC was selected to
manage Enterprise Capital Appreciation, and TCW Investment Management Co.
became fund manager for the Enterprise Equity Fund. We also added Sanford C.
Bernstein & Co., Inc. to co-manage the Enterprise Managed Fund with OpCap
Advisors. In each case, Enterprise was not only looking to add investment
management firms we identified to be exceptional in each specific
THE ENTERPRISE Group of Funds, Inc.
2
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investment category, but also to augment a very important "value-added" feature
of our firm. By structuring each fund to incorporate what we believe to be the
best of each manager's investment talents, we provide our shareholders an
excellent investment opportunity available only through Enterprise.
If you have not already visited the Enterprise Web site at
www.enterprisefunds.com, please do so. Our Web site is an excellent vehicle for
us to share information with you, our shareholders. On the site, you have access
to your personal account information, educational material, as well as to
details on our funds including daily performance results. We believe you will
find this information helpful. Of course, we will continue to explore additional
ways in which we can employ technology to better serve your needs.
The Enterprise Group of Funds provides a level of professional money
management once reserved for only the largest institutional investors.
Enterprise's different funds are managed by separate independent asset
management firms, each a recognized specialist in its own area of investment
expertise. Selected based upon industry reputation and investment track record,
each firm is continuously monitored by Enterprise and a national leading
consulting firm to ensure that high standards of performance and professionalism
continue to be met. Significantly, these firms primarily manage
multimillion-dollar portfolios on behalf of corporations, nonprofit
organizations and government entities who are able to meet minimum investment
requirements of up to $100 million. Collectively, these firms manage more than
$275 billion in investment assets. Enterprise's distinctive management strategy
provides individual investors the benefits of diversification among multiple
asset management firms along with the conveniences of exchange privileges and
consolidated statements -- all with a minimum investment of as little as $1,000
per fund.
As we begin the year, we are also pleased with the special recognition
given to us by Financial Research Corporation, one of the nation's leading
industry research firms, which listed Enterprise as one of the top five fund
families in the industry that they believe are well positioned to continue
strong growth in 2000. And Barron's recently cited Enterprise managers as "some
of the best and brightest in the money management business."(3) We will continue
to provide you with access to these firms -- some of the most accomplished
institutional investment firms in the industry.
Your confidence is our most important asset. We are excited about our
ability to provide you the diverse investment choices necessary to meet your
investment objectives as we move forward into this new century.
Sincerely,
/s/ Victor Ugolyn
Victor Ugolyn
Chairman, President and Chief Executive Officer
(1) Source: Strategic Insight, an independent financial research firm and
Enterprise research. Ranking of long-term, open-end fund families with at least
$1 billion in assets under management as of 12/98 based on net sales flow as a
percentage of assets for the period 1/99-12/99. Enterprise placed 14th out of
230 fund families, 133 of which reflected positive growth.
(2) Source: Financial Research Corporation, an independent financial research
firm and Enterprise research. Ranking of all long-term open-end fund families
based on net equity sales for the period 1/99 through 12/99.
(3) Barron's, January 3, 2000.
THE ENTERPRISE Group of Funds, Inc.
3
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Enterprise Multi-Cap Growth Fund
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Fred Alger Management, Inc.
New York, New York
Investment Management
Fred Alger Management, Inc., which has approximately $17 billion in assets
under management, became the manager of the Fund on July 1, 1999, the Fund's
inception date. Alger's normal investment minimum is $5 million.
Investment Objective
Long-term capital appreciation.
Investment Strategies
The Multi-Cap Growth Fund invests primarily in growth stocks. The Fund Manager
believes that these companies tend to fall into one of two categories: High Unit
Volume Growth and Positive Life Cycle Change. High Unit Volume Growth companies
are those vital, creative companies that offer goods or services to a rapidly
expanding marketplace. They include both established and emerging firms,
offering new or improved products, or firms simply fulfilling an increased
demand for an existing line. Positive Life Cycle Change companies are those
companies experiencing a major change that is expected to produce advantageous
results. These changes may be as varied as new management; new products or
technologies; restructuring or reorganization; or merger and acquisition. The
Fund can leverage, that is, borrow money, to buy additional securities for its
portfolio. By borrowing money, the Fund has the potential to increase its
returns if the increase in the value of the securities purchased, exceeds the
cost of borrowing, including the interest paid on the money borrowed. The
Enterprise Multi-Cap Growth Fund seeks long term capital appreciation by
investing in companies across all market capitalization ranges.
1999 Performance Review
The birth of the Fund took place at the start of the third quarter, a period
during which the market experienced widespread weakness. After peaking in
mid-July, the S&P 500 began a downward trend that resulted in a -6.25 percent
return for the quarter. Only gains posted in the technology sector helped to
buoy the double-digit losses suffered by consumer staples, financials and
transportation stocks and prevented the S&P 500 from slipping even further.
Heavy losses were evident in other indices in the third quarter, including the
S&P MidCap 400 Index, -8.40 percent, and the Russell 2000 Index, -6.64 percent.
A variety of bearish indicators also appeared. On August 24, the Federal Reserve
raised both the Fed Funds rate and the discount rate by 0.25 percent. During
September, the Dow broke below the key 10,400 support level, the S&P 500 broke
below its 200-day moving average line and the advance-decline line continued to
be very weak. Technology stocks also finally broke down during the last month of
the third quarter, leading the market downward.
After an anemic third quarter, however, domestic equity markets bounced back in
vigorous fashion. Growth stocks continued to significantly outperform value
stocks, and technology companies persisted as the clear market leaders. And
while large cap stocks continued to perform well, their smaller counterparts
were the obvious market standouts. Most major equity indices across all market
capitalizations generated strong double-digit returns during the final three
months of the year, ensuring that 1999 was yet another successful year for stock
investors.
1999 was a particularly good year for investors in the Enterprise Multi-Cap
Growth Fund. Fortunately, the Fund was well positioned to benefit from the
strong performance of certain segments of the market. Management's growth stock
philosophy was of great benefit during a year in which value severely
underperformed growth.
In addition, the Fund was heavily weighted in technology companies throughout
the year. Stocks such as Yahoo!, Microsoft and America Online fueled much of the
Fund's gains. Technology stocks were the clear market leaders in 1999, thus
making the Fund extremely well positioned for the strong bull market.
Specifically, the boom in Internet stocks was of great benefit to the Fund.
Exceptional stock picking and a number of superb July IPO allocations also
account for the excellent performance.
The total return generated by the Fund was heavily impacted by the inclusion of
numerous IPOs during the month of July. Without exception, all of the IPO
allocations during July produced positive returns for the Fund. In many cases
these returns were exceptionally high, and in many cases large percentages of
the IPO allocations were eliminated
THE ENTERPRISE Group of Funds, Inc.
4
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from the Fund within a day or two of their purchase. Examples of IPO
allocations that more than doubled in price and were completely or partially
liquidated within two days of purchase include: MP3.com Inc., Gadzoox Networks
Inc., and Hoovers Inc.
In total, the IPOs accounted for virtually all of the Fund's gains of 78.6
percent during the month of July in what was otherwise an anemic month for
technology stocks. Better than normal IPO allocations for Fred Alger Management
and unusually strong IPO performance help to account for the tremendous returns.
Also, the relatively small asset size of the Fund during its first month of
existence greatly exaggerated the impact of IPOs on performance. The exceptional
returns produced by the Fund during the month of July were a one-time anomaly
and will be virtually impossible to reproduce.
IPOs did not impact the returns generated by the Fund after July 31, 1999. No
new IPOs were added to the Fund after the end of July. Therefore, August,
September and fourth quarter return figures are IPO-free.
GROWTH OF A $10,000 INVESTMENT
[CHART APPEARS HERE]
Enterprise S&P Lipper
Multi-Cap 500 Multi-Cap
Growth Fund - A Index Core Index
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7/1/99 9523 10000 10000
12/31/99 26596 10770 10918
<TABLE>
<CAPTION>
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Cummulative Total Returns Cummulative Total Returns
Period ending December 31, 1999 Period ending December 31, 1999
<S> <C> <C> <C>
Enterprise Multi-Cap Growth Fund-A 7/1/99-12/31/99 Enterprise Multi-Cap Growth Fund B 7/1/99-11/31/99
With Sales Charge 165.96% With Sales Charge 173.45%
Without Sales Charge 179.26% Without Sales Charge 178.45%
S&P 500 Index* 7.70% S&P 500 Index* 7.70%
Lipper Multi-Cap Core Index* 9.18% Lipper Multi-Cap Core Index* 9.18%
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<CAPTION>
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Cummulative Total Returns Cummulative Total Returns
Period ending December 31, 1999 Period ending December 31, 1999
<S> <C> <C> <C>
Enterprise Multi-Cap Growth Fund-C 7/1/99-12/31/99 Enterprise Multi-Cap Growth Fund Y 7/1/99-11/31/99
With Sales Charge 177.46% Cumulative Return 179.66%
Without Sales Charge 178.46% S&P 500 Index* 7.70%
S&P 500 Index* 7.70% Lipper Multi-Cap Core Index* 9.18%
Lipper Multi-Cap Core Index* 9.18%
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</TABLE>
The performance of Classes B, C and Y will vary from the performance of Class A
shown in the above line graph based on differences in sales charges and expenses
paid by shareholders investing in the different classes.
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
*The S&P 500 is an unmanaged index that includes the common stocks of 500
companies that tend to be leaders in important industries within the U.S.
economy. It assumes the reinvestment of dividends and distributions and does not
include any management fees or expenses. The Lipper Multi-Cap Core Index is an
unmanaged index of the 30 largest funds, based on total year-end net asset
value, in the Lipper Multi-Cap Core Fund category. It assumes the reinvestment
of dividends and capital gains and does not include any management fees or
expenses. One cannot invest in an index.
THE ENTERPRISE Group of Funds, Inc.
5
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Future Investment Strategy
The economy of 2000 is likely to resemble the economy of 1999, but it will
probably not grow as rapidly. This is an inevitable by-product of higher
interest rates. Despite this, there are factors that may keep the economy moving
along at a decent rate: low unemployment, good wage gains, and positive
psychology. Inflation may remain subdued as a result of continually increasing
productivity and the slowing of economic growth. The flattening of oil prices
and the impact of the Internet on pricing may also help subdue inflation.
Interest rates may eventually fall, at some point responding to the slowing
economy and the dropping inflation. Presently, interest rates are being held up
artificially by concerns about the actions of the Fed. If the Fed lays off,
interest rates may drop.
Corporate earnings may not be as strong in 2000 as in 1999. The top-down
forecast for S&P earnings is an increase of 10 percent, which is lower than the
14 percent estimated for this year. It would be logical to assume that the
market will rise less vigorously as well.
Should market conditions become neutral or favorable, Alger expects that the
Multi-Cap Growth Fund may continue to outperform broad market averages.
Technology stocks may continue to do well next year, as this is one of the few
areas of the economy which is truly booming. Consequently, despite high
valuation, rapidly growing companies may remain the best place to invest, with
IT companies in the vanguard. Alger's reliance on comprehensive, in-house
fundamental research may ensure the Fund remains stocked with the most appealing
growth investments.
The views expressed in this report reflect those of the Fund Manager only
through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
[GRAPHIC]
www.enterprisefunds.com
THE ENTERPRISE Group of Funds, Inc.
6
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Portfolio of Investments
ENTERPRISE MULTI-CAP GROWTH FUND
December 31, 1999
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<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Common Stocks -- 90.65%
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Advertising -- 0.39%
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Omnicom Group Inc. ........................ 4,000 $ 400,000
Broadcasting -- 4.79%
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AT&T Corporation - Liberty Media
Group (a) ............................... 18,400 1,044,200
Clear Channel Communications Inc. (a) 25,500 2,275,875
Echostar Communications Corporation
(Class A) (a) ........................... 16,800 1,638,000
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4,958,075
Cable -- 1.81%
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Cablevision Systems Corporation
(Class A) (a) ........................... 5,800 437,900
Comcast Corporation (a) ................... 18,650 942,991
Cox Communications Inc. (Class A) (a) 9,600 494,400
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1,875,291
Communications -- 2.02%
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Brocade Communications Systems Inc.
(a) ..................................... 11,800 2,088,600
Computer Hardware -- 3.52%
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Cisco Systems Inc. (a) .................... 16,300 1,746,137
Dell Computer Corporation (a) ............. 18,600 948,600
Intel Corporation ......................... 11,500 946,594
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3,641,331
Computer Services -- 20.68%
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America Online Inc. (a) ................... 62,600 4,722,387
Ariba Inc. (a) ............................ 21,200 3,760,350
ASM Lithography Holdings (a) .............. 3,800 432,250
At Home Corporation (a) ................... 28,350 1,215,506
CNET Inc. (a) ............................. 18,200 1,032,850
Digital Islands (a) ....................... 10,400 989,300
Sun Microsystems Inc. (a) ................. 23,800 1,843,013
VeriSign Inc. (a) ......................... 13,800 2,634,937
Yahoo! Inc. (a) ........................... 11,067 4,788,553
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21,419,146
Computer Software -- 11.04%
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Exodus Communications Inc. (a) ............ 41,200 3,659,075
Legato Systems Inc. (a) ................... 13,800 949,612
Microsoft Corporation (a) ................. 28,500 3,327,375
RealNetworks Inc. (a) ..................... 3,600 433,125
Vignette Corporation (a) .................. 18,800 3,064,400
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11,433,587
Electrical Equipment -- 0.59%
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Teradyne Inc. (a) ......................... 9,300 613,800
Electronics -- 10.07%
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Altera Corporation (a) .................... 24,600 1,219,238
Applied Micro Circuits Corporation (a) 15,400 1,959,650
Broadcom Corporation (Class A) (a) ........ 7,400 2,015,575
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Conexant Systems Inc. (a) ................. 26,900 $ 1,785,487
PMC-Sierra Inc. (a) ....................... 12,400 1,987,875
SDL Inc. (a) .............................. 6,700 1,460,600
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10,428,425
Energy -- 0.79%
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Calpine Corporation (a) ................... 12,800 819,200
Finance -- 0.40%
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Morgan Stanley Dean Witter &
Company ................................. 2,900 413,975
Machinery -- 0.26%
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Applied Materials Inc. (a) ................ 2,100 266,044
Manufacturing -- 0.86%
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Corning Inc. .............................. 6,900 889,669
Medical Instruments -- 1.33%
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Affymetrix Inc. (a) ....................... 8,100 1,374,469
Medical Services -- 0.90%
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Biogen Inc. (a) ........................... 11,100 937,950
Misc. Financial Services -- 2.02%
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American Express Company .................. 6,450 1,072,312
Citigroup Inc. ............................ 18,400 1,022,350
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2,094,662
Multi-Line Insurance -- 0.22%
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American International Group Inc. ......... 2,100 227,063
Oil Services -- 2.25%
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BJ Services Company (a) ................... 13,600 568,650
Halliburton Company ....................... 29,450 1,185,362
Nabors Industries Inc. (a) ................ 18,600 575,438
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2,329,450
Pharmaceuticals -- 5.65%
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Abgenix Inc. (a) .......................... 7,600 1,007,000
Amgen Inc. (a) ............................ 34,600 2,078,162
MedImmune Inc. (a) ........................ 3,600 597,150
Protein Design Labs Inc. (a) .............. 17,700 1,239,000
Warner-Lambert Company .................... 11,400 934,088
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5,855,400
Retail -- 5.78%
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Amazon.com Inc. (a) ....................... 11,100 844,988
Costco Wholesale Corporation (a) .......... 3,500 319,375
eBay Inc. (a) ............................. 20,200 2,528,787
Home Depot Inc. ........................... 26,250 1,799,766
Wal-Mart Stores Inc. ...................... 7,200 497,700
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5,990,616
Technology -- 2.64%
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Linear Technology Corporation ............. 13,600 973,250
Texas Instruments Inc. .................... 3,900 377,812
Xilinx Inc. (a) ........................... 30,400 1,382,250
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2,733,312
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
7
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Portfolio of Investments -- (Continued)
ENTERPRISE MULTI-CAP GROWTH FUND
December 31, 1999
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<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Telecommunications -- 7.06%
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Efficient Networks Inc. (a) ............ 17,200 $ 1,169,600
Global TeleSystems Group Inc. (a) ...... 29,800 1,031,825
Lucent Technologies Inc. ............... 15,800 1,182,038
MCI WorldCom Inc. (a) .................. 14,850 787,978
McLeodUSA Inc. (a) ..................... 9,800 576,975
QUALCOMM Inc. (a) ...................... 6,800 1,197,650
Sprint Corporation ..................... 5,600 376,950
Sycamore Networks Inc. (a) ............. 3,200 985,600
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7,308,616
Wireless Communications -- 5.58%
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Digital Microwave Corporation (a) ...... 28,000 656,250
Motorola Inc. .......................... 10,100 1,487,225
Nextel Communications Inc. (Class A)
(a) .................................. 18,900 1,949,062
Nokia Corporation (ADR) ................ 4,450 845,500
Sprint PCS (a) ......................... 8,200 840,500
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5,778,537
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Total Common Stocks
(Identified cost $67,636,021)......................... 93,877,218
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Commercial Paper -- 7.80%
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AES Hawaii Inc. 6.60% due 01/12/00 ..... $1,700,000 1,696,572
Austra Corporation Asset Collateral,
7.07% due 01/10/00 ................... 1,900,000 1,896,642
Merrill Lynch & Company Inc. 5.55%
due 01/27/00 ......................... 3,000,000 2,987,975
Textron lnc. 6.90% due 01/14/00 ........ 1,500,000 1,496,262
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Total Commercial Paper
(Identified cost $8,077,451).......................... 8,077,451
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<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Repurchase Agreement -- 2.41%
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State Street Bank & Trust Repurchase
Agreement, 2.50% due 01/03/00
Collateral: U.S. Treasury Note
$2,500,000, 6.25% due 02/15/03,
Value $2,609,018 ..................... $2,497,000 $ 2,497,000
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Total Repurchase Agreement
(Identified cost $2,497,000)......................... 2,497,000
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Total Investments
(Identified cost $78,210,472)........................ $104,451,669
Other Assets Less Liabilities -- (0.86)% ............ (886,035)
Net Assets -- 100% .................................. $103,565,634
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</TABLE>
(a) Non-income producing securities.
(ADR) American Depository Receipt.
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
8
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Enterprise Small Company Growth Fund
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William D. Witter, Inc.
New York, New York
Investment Management
William D. Witter, Inc., which has approximately $1.4 billion in assets under
management, became manager of the Fund on September 2, 1998. Witter's normal
investment minimum for a separate account is $1 million.
Investment Objective
The objective of the Enterprise Small Company Growth Fund is to seek capital
appreciation.
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 its price-earnings ratio exceeds its 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
over-weighted in the Fund, 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.
1999 Performance Review
In 1999, concentrating on equities of growing companies was a successful
strategy. Regardless of capitalization sector, growth securities achieved better
results than those of the core or value classifications.
"At a reasonable price" is subject to a variety of interpretations. Witter
defines the phrase as meaning equities whose price/earnings ratios, based on
forward earnings, are less than their projected growth rates. In 1999, this
interpretation restrained the results. Many of the best performing equities were
Internet-related and others that had limited revenues and no immediate prospects
for earnings. In fact, the highest achiever of the equities in the Fund was
Intranet Solutions, Inc., an exception to Witter's basic approach. The company
was founded in 1990 and was originally a systems integration and consulting firm
in Eden Prairie, MN. Recently it acquired software that allows information to
move directly from a PC to the Internet. This system avoids writing additional
code for entry into a server and saves both time and money. The company's
revenues are less than $20 million and it is projected to earn $0.12 per share
for the March 2000 fiscal year. The stock was purchased between $7.25 and $7.50
per share in August 1999 and ended the year at $37 per share.
The practice of concentrating on companies with strong financials was a positive
contributor. Portfolio turnover was 62 percent in 1999. In view of the
volatility that existed, greater transaction activity may have added to the
return. Such an approach, however, would have increased long-term capital gains.
With the exception of the second quarter in which GDP expanded at a 1.8 percent
annualized rate, the economy grew at a 4 percent-plus pace. Except for
industrial capacity, most components of the economy were being utilized at
levels that were expected to increase inflation. In addition, concerns developed
that global demand would rise too rapidly. Consequently, interest rates moved
higher. For example, the yield on five-year maturity U.S. Treasuries, which
started the year at 4.55 percent, was at 6.49 percent on December 31. With the
exception of the transportation sector commitments such as Alaska Air, higher
borrowing costs had only minor effects on the underlying earnings of the
holdings.
Another significant macro-economic trend during the period was the rise in
capital spending with particular emphasis on equipment and software. Following a
15.8 percent increase in these components in 1998, in 1999 these expenditures
were estimated to have increased between 12 and 13 percent. Throughout the year,
technology (defined broadly) represented the largest single component of the
Fund. As of December 31, the combination of computer services and software,
electronics, and the technology sub-component accounted for 46.5 percent of the
Fund. In addition to the particularly positive performance of Intranet
Solutions, Applied Science & Technology, Cymer Inc., and Exchange Applications
produced returns of 224 percent, 214 percent, and 108 percent, respectively.
THE ENTERPRISE Group of Funds, Inc.
9
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- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Other key contributors to the results were medical device companies such as
Cytyc Corp., Candela Corp., and Aurora Biosciences. Less dramatic but meaningful
advances were achieved by companies in unrelated areas such as AstroPower, a
producer of solar energy products, Charles River Associates, an economic
consulting firm, and Ryanair Holdings, a Dublin based discount airline growing
at 20 to 25 percent per year.
Equities that negatively impacted the Fund's return included the transportation
sector positions, with the exception of Ryanair Holdings, and companies that
experienced what Witter believes and hope to be temporary interruptions of their
fundamental growth. This group includes Catalytica, Inc., whose North Carolina
pharmaceutical production facilities were impacted by Hurricane Floyd. Another
example was Theragenics Corporation, whose revenue and earnings momentum was
affected by its outsourcing its marketing function to Johnson & Johnson. Other
issues whose performance was below average included non-technology companies
like On Assignment, Inc., a staffing specialist, whose 18X price/earnings ratio
is less than its past and projected earnings growth rate of 20 percent plus.
Investors simply had limited interest in this type of holding.
GROWTH OF A $10,000 INVESTMENT
[CHART APPEARS HERE]
Enterprise Russell Lipper
Small Company 2000 Small Cap
Growth Fund - A Index Growth Index
---------- ----- ------------
7/31/97 9524 10000 10000
1997 9182 10610 10078
1998 8809 10338 10175
1999 13058 12536 16400
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE SMALL COMPANY GROWTH FUND - A ONE YEAR 7/31/97-12/31/99
With Sales Charge 41.17% 11.66%
Without Sales Charge 48.22% 13.93%
Russell 2000 Index* 21.26% 9.80%
Lipper Small Cap Growth Index* 61.17% 22.69%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE SMALL COMPANY GROWTH FUND - B ONE YEAR 7/31/97-12/31/99
With Sales Charge 42.40% 11.64%
Without Sales Charge 47.40% 13.04%
Russell 2000 Index* 21.26% 9.80%
Lipper Small Cap Growth Index* 61.17% 22.69%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE SMALL COMPANY GROWTH FUND - C ONE YEAR 7/31/97-12/31/99
With Sales Charge 46.37% 13.20%
Without Sales Charge 47.37% 13.20%
Russell 2000 Index* 21.26% 9.80%
Lipper Small Cap Growth Index* 61.17% 22.69%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
<TABLE>
<CAPTION>
ONE YEAR FIVE YEAR 5/31/91-12/31/99
<S> <C> <C> <C>
ENTERPRISE SMALL COMPANY GROWTH FUND - Y 48.82% 22.94% 21.91%
Russell 2000 Index* 21.26% 16.69% 14.59%
Lipper Small Cap Growth Index* 61.17% 23.66% 18.21%
</TABLE>
The performance of Classes B,C and Y will vary from the performance of Class A
as shown in the above line graph based on differences in sales charges and
expenses paid by shareholders investing in the different classes.
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
*The Russell 2000 is an unmanaged index of the stocks of 2000 small and mid-cap
companies. It assumes the reinvestment of dividends and capital gains and
excludes management fees and expenses. The Lipper Small-Cap Growth Index is an
unmanaged index of the 30 largest funds, based on total year-end net asset
value, in the Lipper Small-Cap Growth Fund category. It assumes the reinvestment
of dividends and capital gains and does not include any management fees or
expenses. One cannot invest in an index.
THE ENTERPRISE Group of Funds, Inc.
10
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<PAGE>
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- --------------------------------------------------------------------------------
Future Investment Strategy
As the current economic expansion is about to become the longest advance in U.S.
history, there appears to be no significant imbalances that may cause a
recession. The focus of businesses on productivity improvement has been visible
and is projected to continue. Consequently, opportunities for new technology
products and services will be present over the near and intermediate terms. The
combination of Federal policy and the concerns about inflation by fixed-income
investors will regulate economic growth but not destroy it.
Valuation levels of common stocks have been uneven and are expected to continue
to be so. The prospects of rapid growth attract funds and moderate growth
attracts only moderate interest.
Witter shall continue to use 25 percent as a minimum return expectation for all
new purchases. While long-term capital appreciation is the Fund's goal, in view
of the volatility that persists, reductions of successful holdings following
sharp price increases may be made.
Small companies as a class produced good relative performance in the last nine
months of the year. The Russell and S&P returns were 26.3 percent and 15.5
percent, respectively. Witter believes this trend may continue and that a larger
number of small capitalization issues will participate.
The views expressed in this report reflect those of the Fund Manager only
through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
[GRAPHIC]
www.enterprisefunds.com
THE ENTERPRISE Group of Funds, Inc.
11
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<PAGE>
Portfolio of Investments
ENTERPRISE SMALL COMPANY GROWTH FUND
December 31, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Common Stocks -- 92.77%
- -----------------------------------------------------------------------
Aerospace -- 0.88%
- -----------------------------------------------------------------------
AAR Corporation ......................... 26,000 $ 466,375
Business Services -- 10.50%
- -----------------------------------------------------------------------
Charles River Associates Inc. (a) ....... 44,000 1,474,000
Labor Ready Inc. (a) .................... 72,750 882,094
Maximus Inc. (a) ........................ 53,750 1,824,140
Object Design Inc. (a) .................. 30,000 435,000
On Assignment Inc. (a) .................. 31,000 926,125
-----------
5,541,359
Computer Services -- 11.58%
- -----------------------------------------------------------------------
Integral Systems Inc. Maryland (a) ...... 36,600 1,614,975
Kronos Inc. (a) ......................... 25,800 1,548,000
Mapinfo Corporation (a) ................. 54,600 2,006,550
National Computer Systems Inc. .......... 25,000 940,625
-----------
6,110,150
Computer Software -- 15.07%
- -----------------------------------------------------------------------
Exchange Applications Software (a) ...... 20,400 1,139,850
Intranet Solutions Inc. (a) ............. 28,000 1,036,000
Legato Systems Inc. (a) ................. 33,000 2,270,812
Pervasive Software Inc. (a) ............. 80,000 1,355,000
Sterling Software Inc. (a) .............. 32,000 1,008,000
Timberline Software Corporation ......... 36,000 483,750
Wind River Systems Inc. (a) ............. 18,000 659,250
-----------
7,952,662
Electronics -- 13.89%
- -----------------------------------------------------------------------
Applied Science & Technology Inc. (a) ... 79,000 2,625,515
Cymer Inc. (a) .......................... 39,300 1,807,800
Nanometrics Inc. (a) .................... 56,800 1,143,100
Veeco Instruments Inc. (a) .............. 37,500 1,755,469
-----------
7,331,884
Manufacturing -- 7.12%
- -----------------------------------------------------------------------
Astropower Inc. (a) ..................... 95,800 1,341,200
Mueller Industries Inc. (a) ............. 13,000 471,250
PRI Automation Inc. (a) ................. 29,000 1,946,625
-----------
3,759,075
Medical Instruments -- 12.00%
- -----------------------------------------------------------------------
Candela Corporation (a) ................. 112,500 2,095,312
Cytyc Corporation (a) ................... 31,600 1,929,575
Staar Surgical Company (a) .............. 55,000 536,250
Theragenics Corporation (a) ............. 80,000 725,000
Varian Medical Systems Inc. (a) ......... 35,000 1,043,438
-----------
6,329,575
Medical Services -- 1.86%
- -----------------------------------------------------------------------
Impath Inc. (a) ......................... 38,600 981,888
Security & Investigation Services -- 1.46%
- -----------------------------------------------------------------------
Barringer Technologies Inc. (a) ......... 126,100 772,363
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Technology -- 6.01%
- -----------------------------------------------------------------------
Aurora Bioscience Corporation (a) ....... 73,000 $ 1,934,500
Catalytica Inc. (a) ..................... 91,250 1,237,578
-----------
3,172,078
Transportation -- 10.82%
- -----------------------------------------------------------------------
Alaska Air Group Inc. (a) ............... 23,000 807,875
Amtran Inc. (a) ......................... 41,000 794,375
Atlas Air Inc. (a) ...................... 49,000 1,344,437
Ryanair Holdings (ADR) (a) .............. 31,000 1,708,875
Sea Containers Ltd. (Class A) ........... 39,500 1,051,688
-----------
5,707,250
Travel/Entertainment/Leisure -- 1.58%
- -----------------------------------------------------------------------
Polaris Industries Inc. ................. 23,000 833,750
-----------
Total Common Stocks
(Identified cost $32,168,223)............ 48,958,409
- -----------------------------------------------------------------------
Commercial Paper -- 5.03%
- -----------------------------------------------------------------------
Laclede Gas Company 4.35% due
01/05/00 .............................. $312,000 311,849
Peoples Energy Corporation 5.10% due
01/04/00 .............................. 2,342,000 2,341,005
-----------
Total Commercial Paper
(Identified cost $2,652,854 )............ 2,652,854
- -----------------------------------------------------------------------
-----------
Total Investments
(Identified cost $34,821,077 )............ $51,611,263
Other Assets Less Liabilities -- 2.20% ... 1,161,116
-----------
Net Assets -- 100% ........................ $52,772,379
- -----------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
(ADR) American Depository Receipt.
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
12
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<PAGE>
- ------- -------------
Enterprise Small Company Value Fund
- ------- -------------
Gabelli Asset Management Company
Rye, New York
Investment Management
Gabelli Asset Management Company, which manages approximately $9 billion for
institutional clients and whose normal investment minimum is $1 million, became
manager of the Fund on July 1, 1996.
Investment Objective
The objective of the Enterprise Small Company Value Fund is to seek maximum
capital appreciation.
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" or what an
investor would pay for the company. 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.
1999 Performance Review
It was a narrow market, as the NASDAQ zipped up over 80 percent, yet there were
near equal returns for the top companies in the S&P 500 and Wilshire 5000.
However, investors still had distinct biases. Large-cap stocks represented by
the S&P 500 and Dow Jones Industrial Average continued to outperform the
small-cap stocks in the Russell 2000, albeit by a smaller margin than in recent
years. Growth stocks continued to outpace value stocks. Once again, the majority
of stocks appeared to walk through knee high mud, as is reflected in the broad
based, non-cap weighted Value Line Composite's -3.7 percent decline. Technology
stocks continued to lead the market.
The Russell 2000 exploded at year-end. Small-cap stocks had substantially
underperformed large-caps. This trend is beginning to reverse, partly driven by
low valuations.
The Fund's 1999 return includes the excellent performance of telecommunications,
cable television and entertainment stocks. It also benefited from a strong rally
by small group broadcasters following further deregulation in the broadcast
industry. Finally, takeovers continued to add positively to performance.
For the year, the top Fund performers included Omnipoint Corporation, TCI
Satellite Entertainment, Inc., Leap Wireless International, Inc., Aerial
Communications, Inc., and ValueVision International, Inc. TCI Satellite
Entertainment benefited from the Satellite Television Home Viewers Act signed
on November 29. The new law allows satellite television companies to include
local broadcasters in their services. Aerial Communications and Omnipoint are
being bought by Voice Stream Wireless.
THE ENTERPRISE Group of Funds, Inc.
13
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<PAGE>
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- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
[CHART APPEARS HERE]
Enterprise Lipper
Small Company Russell Small Cap
Value 2000 Value
Fund - A Index Index
---------- --------------- ------------------
10/1/93 9523 10000 10000
12/31/93 10087 10262 10347
1994 10121 10075 10273
1995 11061 12940 12473
1996 12309 15074 14995
1997 17755 18446 19314
1998 18669 17974 18018
1999 21681 21796 18256
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
<TABLE>
<CAPTION>
ENTERPRISE SMALL COMPANY VALUE FUND - A ONE YEAR FIVE YEAR 10/1/93-12/31/99
<S> <C> <C> <C>
With Sales Charge 10.68% 15.32% 13.18%
Without Sales Charge 16.13% 16.46% 14.06%
Russell 2000 Index* 21.26% 16.69% 13.27%
Lipper Small Cap Growth Index* 1.32% 12.18% 10.11%
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE SMALL COMPANY GROWTH FUND - B ONE YEAR 5/1/95-12/31/99
With Sales Charge 10.47% 16.28%
Without Sales Charge 15.47% 16.53%
Russell 2000 Index* 21.26% 16.30%
Lipper Small Cap Growth Index* 1.32% 11.38%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE SMALL COMPANY GROWTH FUND - C ONE YEAR 5/1/97-12/31/99
With Sales Charge 14.42% 20.16%
Without Sales Charge 15.42% 20.16%
Russell 2000 Index* 21.26% 17.01%
Lipper Small Cap Growth Index* 1.32% 7.73%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
<TABLE>
<CAPTION>
ONE YEAR 5/31/95-12/31/99
<S> <C> <C>
ENTERPRISE SMALL COMPANY GROWTH FUND - Y 16.60% 17.64%
Russell 2000 Index* 21.26% 16.16%
Lipper Small Cap Growth Index* 1.32% 12.87%
</TABLE>
The performance of Classes B,C and Y will vary from the performance of Class A
shown in the above line graph based on differences in sales charges and expenses
paid by shareholders investing in the different classes.
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
*The Russell 2000 is an unmanaged index of the stocks of 2000 small and mid-cap
companies. It assumes the reinvestment of dividends and capital gains and
excludes management fees and expenses. The Lipper Small-Cap Value Index is an
unmanaged index of the 30 largest funds, based on total year-end net asset
value, in the Lipper Small Cap Value Fund category. It assumes the reinvestment
of dividends and capital gains and does not include any management fees or
expenses. One cannot invest in an index.
Future Investment Strategy
America is the world's undisputed economic heavyweight champion. World class
industrial companies have revitalized the manufacturing sector of the economy
and American semiconductor, computer and software firms are global leaders in
the information age. American ingenuity is creating jobs. Job creation is not
without some pain and uncertainty. Inflation is running at around 3 percent and
long interest rates are around 6.5 percent.
Today, this market mechanism allocates capital from "bricks and mortars" to
"clicks and mortars." However, as in other periods of time, speculative excesses
can end in bubbles that burst. While this time it is different, it is still the
same. The U.S. economy and our lives will be forever changed by the Internet.
There is no looking back. However, valuations in many companies have overshot
their mark. In others, they have been woefully ignored.
While the overall market has no margin of safety, there are still lots of
bargains in the small cap arena. As value managers, Gabelli's application of
analytical principles results in a focus on economic and stock market sectors
that are ignored. Gabelli will continue to use its research to ferret out
undervalued stocks. Gabelli expects to be in front of companies that either are
the subject of takeovers or are likely to go through a form of financial
engineering.
The views expressed in this report reflect those of the Fund Manager only
through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
THE ENTERPRISE Group of Funds, Inc.
14
- --------------------------------------------------------------------------------
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<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
ENTERPRISE SMALL COMPANY VALUE FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Common Stocks -- 91.95%
- --------------------------------------------------------------------------------------------------------------------
Advertising -- 0.99%
- --------------------------------------------------------------------------------------------------------------------
Ackerley Group Inc. .................................................... 130,000 $2,356,250
BOWLIN Outdoor Advertising &
Travel Center Inc. (a) ............................................... 60,000 315,000
----------
2,671,250
Aerospace -- 4.03%
- --------------------------------------------------------------------------------------------------------------------
AAR Corporation ........................................................ 36,000 645,750
Ametek Inc. ............................................................ 55,000 1,048,437
Curtiss-Wright Corporation ............................................. 28,000 1,032,500
GenCorp Inc. ........................................................... 250,000 2,468,750
Kaman Corporation (Class A) ............................................ 73,000 939,875
Moog Inc. (Class A) (a) ................................................ 17,000 459,000
Sequa Corporation (Class A) (a) ........................................ 19,000 1,024,813
Sequa Corporation (Class B) (a) ........................................ 25,400 1,524,000
SPS Technologies Inc. (a) .............................................. 54,000 1,724,625
----------
10,867,750
Apparel & Textiles -- 0.03%
- --------------------------------------------------------------------------------------------------------------------
Carlyle Industries Inc. (a) ............................................ 150,000 93,750
Automotive -- 6.26%
- --------------------------------------------------------------------------------------------------------------------
A. O. Smith Corporation ................................................ 15,000 328,125
A. O. Smith Corporation (Class A) ...................................... 5,000 103,750
Borg-Warner Automotive Inc. ............................................ 33,000 1,336,500
Clarcor Inc. ........................................................... 60,000 1,080,000
Earl Scheib Inc. (a) ................................................... 85,000 249,687
Federal-Mogul Corporation .............................................. 41,000 825,125
Genuine Parts Company .................................................. 3,000 74,438
Lund International Holdings Inc. (a) ................................... 30,000 176,250
Midas Inc. ............................................................. 56,000 1,225,000
Modine Manufacturing Company ........................................... 107,000 2,675,000
Navistar International Corporation (a) ................................. 30,000 1,421,250
Standard Motor Products Inc. ........................................... 120,000 1,935,000
Superior Industries International Inc. ................................. 82,000 2,198,625
Tenneco Automotive Inc. ................................................ 200,000 1,862,500
Wynns International Inc. ............................................... 98,326 1,388,855
----------
16,880,105
Broadcasting -- 9.64%
- --------------------------------------------------------------------------------------------------------------------
BHC Communications Inc. (Class A)
(a) .................................................................. 13,500 2,160,000
Chris-Craft Industries Inc. (a) ........................................ 98,000 7,068,250
Fisher Companies Inc. .................................................. 30,000 1,852,500
Granite Broadcasting Corporation (a) ................................... 146,000 1,478,250
Gray Communications Systems Inc. ....................................... 38,150 674,778
Gray Communications Systems Inc.
(Class B) ............................................................ 35,000 472,500
Paxson Communications Corporation (a) 113,000 1,348,938
United Television Inc. ................................................. 46,500 6,300,750
UnitedGlobalCom Inc. (a) ............................................... 14,000 988,750
USA Networks Inc. (a) .................................................. 55,000 3,038,750
Young Broadcasting Inc. (a) ............................................ 12,000 612,000
----------
25,995,466
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Building & Construction -- 0.22%
- --------------------------------------------------------------------------------------------------------------------
Core Materials Corporation (a) ......................................... 190,000 $ 439,375
Huttig Building Products Inc. (a) ...................................... 30,001 148,129
----------
587,504
Business Services -- 0.61%
- --------------------------------------------------------------------------------------------------------------------
Nashua Corporation (a) ................................................. 100,000 750,000
National Processing Inc. (a) ........................................... 100,000 887,500
----------
1,637,500
Cable -- 4.20%
- --------------------------------------------------------------------------------------------------------------------
Cablevision Systems Corporation
(Class A) (a) ........................................................ 72,000 5,436,000
Lamson & Sessions Company (a) .......................................... 30,000 146,250
Mercom Inc. (a) (d) .................................................... 135,000 1,620,000
Rogers Communications Inc. (Class B)
(a) .................................................................. 150,000 3,712,500
TCI Satellite Entertainment Inc.
(Class A) (a) ........................................................ 25,000 400,000
----------
11,314,750
Chemicals -- 1.62%
- --------------------------------------------------------------------------------------------------------------------
Church & Dwight Company Inc. ........................................... 15,000 400,312
Ferro Corporation ...................................................... 85,000 1,870,000
OMNOVA Solutions Inc. .................................................. 160,000 1,240,000
Sybron Chemicals Inc. (a) .............................................. 72,000 846,000
----------
4,356,312
Communications -- 0.02%
- --------------------------------------------------------------------------------------------------------------------
Western Wireless Corporation (a) ....................................... 1,000 66,750
Computer Hardware -- 0.00%
- --------------------------------------------------------------------------------------------------------------------
Cerion Technologies Inc. (a) (d) ....................................... 120,000 --
Computer Services -- 0.05%
- --------------------------------------------------------------------------------------------------------------------
Tyler Technologies Inc. (a) ............................................ 25,000 137,500
Computer Software -- 0.31%
- --------------------------------------------------------------------------------------------------------------------
BARRA Inc. (a) ......................................................... 10,000 317,500
Xionics Document Technologies Inc. (a) 50,000 521,875
----------
839,375
Consumer Durables -- 0.57%
- --------------------------------------------------------------------------------------------------------------------
Dana Corporation ....................................................... 3,000 89,813
Hussmann International Inc. ............................................ 90,000 1,355,625
Noel Group Units (a) (f) ............................................... 15,000 6,000
Noel Group Liquidating Trust Units (a)
(f) .................................................................. 15,000 10,500
Oneida Ltd. ............................................................ 3,500 76,125
----------
1,538,063
Consumer Products -- 0.12%
- --------------------------------------------------------------------------------------------------------------------
ARC International Corporation (a) ...................................... 26,000 19,500
Mikasa Inc. ............................................................ 30,000 301,875
----------
321,375
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
15
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
ENTERPRISE SMALL COMPANY VALUE FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Consumer Services -- 0.46%
- ----------------------------------------------------------------------------------------------------------------------
Berlitz International Inc. (a) ........................................... 38,000 $ 653,125
ITT Educational Services Inc. (a) ........................................ 35,000 540,313
Loewen Group Inc. (ADR) (a) .............................................. 100,000 43,750
----------
1,237,188
Electrical Equipment -- 2.86%
- ----------------------------------------------------------------------------------------------------------------------
Ampco-Pittsburgh Corporation ............................................. 57,000 577,125
Donaldson Company Inc. ................................................... 15,000 360,938
Oak Technology Inc. (a) .................................................. 245,000 2,312,187
Selas Corporation of America ............................................. 70,000 468,125
SL Industries Inc. ....................................................... 102,000 1,185,750
Thomas Industries Inc. ................................................... 50,000 1,021,875
UCAR International Inc. (a) .............................................. 100,000 1,781,250
----------
7,707,250
Electronics -- 1.35%
- ----------------------------------------------------------------------------------------------------------------------
CTS Corporation .......................................................... 8,000 603,000
Power-One Inc. (a) ....................................................... 1,000 45,812
Watkins-Johnson Company .................................................. 75,000 3,000,000
----------
3,648,812
Entertainment & Leisure -- 4.96%
- ----------------------------------------------------------------------------------------------------------------------
Ascent Entertainment Group Inc. (a) ...................................... 100,000 1,268,750
Bull Run Corporation (a) ................................................. 100,000 587,500
Gaylord Entertainment Company ............................................ 135,000 4,041,562
GC Companies Inc. (a) .................................................... 110,000 2,846,250
Hearst-Argyle Television Inc. (a) ........................................ 12,000 319,500
Jackpot Enterprises Inc. (a) ............................................. 75,000 623,438
Players International Inc. (a) ........................................... 10,000 82,188
Sinclair Broadcast Group Inc. (a) ........................................ 90,000 1,098,281
TV Guide Inc. (Class A) (a) .............................................. 58,000 2,494,000
----------
13,361,469
Finance -- 0.79%
- ----------------------------------------------------------------------------------------------------------------------
Advest Group Inc. ........................................................ 35,000 643,125
Century Business Services Inc. (a) ....................................... 17,000 143,437
Pioneer Group Inc. (a) ................................................... 85,000 1,338,750
----------
2,125,312
Food & Beverages & Tobacco -- 4.16%
- ----------------------------------------------------------------------------------------------------------------------
Ben & Jerry's Homemade Inc. (a) .......................................... 32,000 796,000
Buenos Aires Embotelladora
(ADR) (a) (d) .......................................................... 22,794 --
Celestial Seasonings Inc. (a) ............................................ 112,000 2,084,250
Eskimo Pie Corporation ................................................... 10,000 73,750
General Cigar Holdings Inc. (Class A)
(a) .................................................................... 340,000 2,826,250
General Cigar Holdings Inc. (Class B)
(a) .................................................................... 8,000 64,000
Ingles Markets Inc. (Class A) ............................................ 80,000 890,000
J & J Snack Foods Corporation (a) ........................................ 25,000 512,500
PepsiAmericas Inc. (a) ................................................... 125,000 468,750
Ralcorp Holdings Inc. (a) ................................................ 45,000 897,187
Rexall Sundown Inc. (a) .................................................. 20,000 206,250
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Robert Mondavi Corporation
(Class A) (a) .......................................................... 25,000 $ 868,750
Vermont Pure Holdings Ltd. (a) ........................................... 5,000 13,125
Weis Markets Inc. ........................................................ 10,000 435,000
Whitman Corporation ...................................................... 80,000 1,075,000
----------
11,210,812
Hotels & Restaurants -- 1.58%
- ----------------------------------------------------------------------------------------------------------------------
Aztar Corporation (a) .................................................... 285,000 3,099,375
Boca Resorts Inc. (a) .................................................... 45,000 438,750
Extended Stay America Inc. (a) ........................................... 25,000 190,625
Lakes Gaming Inc. (a) .................................................... 30,000 238,125
Trump Hotels & Casino Resorts Inc. (a) 90,000 303,750
----------
4,270,625
Insurance -- 2.46%
- ----------------------------------------------------------------------------------------------------------------------
Argonaut Group Inc. ...................................................... 95,000 1,888,125
Liberty Corporation ...................................................... 100,000 4,218,750
Midland Company .......................................................... 25,000 518,750
----------
6,625,625
Machinery -- 4.48%
- ----------------------------------------------------------------------------------------------------------------------
Baldwin Technology Company Inc.
(Class A) (a) .......................................................... 105,000 223,125
Commercial Intertech Corporation ......................................... 45,000 573,750
Fairchild Corporation (Class A) (a) ...................................... 110,000 996,875
Flowserve Corporation .................................................... 122,000 2,074,000
Gardner Denver Inc. (a) .................................................. 22,000 367,125
Idex Corporation ......................................................... 48,000 1,458,000
Katy Industries Inc. ..................................................... 75,000 651,563
Kollmorgen Corporation ................................................... 85,000 1,046,562
Nortek Inc. (a) .......................................................... 53,000 1,484,000
Paxar Corporation (a) .................................................... 90,000 759,375
Standex International Corporation ........................................ 26,000 544,375
Tennant Company .......................................................... 8,000 262,000
Watts Industries Inc. (Class A) .......................................... 110,000 1,622,500
----------
12,063,250
Manufacturing -- 6.66%
- ----------------------------------------------------------------------------------------------------------------------
Aviall Inc. (a) .......................................................... 145,000 1,187,187
Barnes Group Inc. ........................................................ 80,000 1,305,000
Belden Inc. .............................................................. 60,000 1,260,000
Bway Corporation (a) ..................................................... 15,000 91,875
Crane Company ............................................................ 47,000 934,125
Cuno Inc. (a) ............................................................ 45,000 931,641
Danaher Corporation ...................................................... 20,000 965,005
Dexter Corporation ....................................................... 35,000 1,391,250
Fedders Corporation (Class A) ............................................ 65,000 333,125
Graco Inc. ............................................................... 22,000 789,250
Industrial Distribution Group Inc. (a) ................................... 39,000 126,750
MagneTek Inc. (a) ........................................................ 40,000 307,500
Mark IV Industries Inc. .................................................. 192,000 3,396,000
Material Sciences Corporation (a) ........................................ 70,500 718,219
Myers Industries Inc. .................................................... 100,000 1,575,000
Oil Dri Corporation of America ........................................... 45,000 646,875
Park Ohio Holdings Corporation (a) ....................................... 110,000 1,086,250
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
16
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
ENTERPRISE SMALL COMPANY VALUE FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Rawlings Sporting Goods Company
Inc. (a) ............................................................. 45,000 $ 270,000
Strattec Security Corporation (a) ...................................... 20,000 647,500
----------
17,962,552
Medical Services -- 0.33%
- ----------------------------------------------------------------------------------------------------------
CIRCOR International Inc. (a) .......................................... 85,000 876,563
Metals & Mining -- 0.45%
- ----------------------------------------------------------------------------------------------------------
TVX Gold Inc. (a) ...................................................... 480,000 390,000
WHX Corporation (a) .................................................... 90,000 810,000
----------
1,200,000
Misc. Financial Services -- 0.20%
- ----------------------------------------------------------------------------------------------------------
Data Broadcasting Corporation (a) ...................................... 65,000 536,250
Neutraceuticals -- 0.34%
- ----------------------------------------------------------------------------------------------------------
Weider Nutrition International Inc. .................................... 250,000 921,875
Oil Services -- 0.20%
- ----------------------------------------------------------------------------------------------------------
Fall River Gas Company ................................................. 25,000 531,250
Paper Products -- 0.72%
- ----------------------------------------------------------------------------------------------------------
Greif Brothers Corporation (Class A) ................................... 65,000 1,933,750
Pharmaceuticals -- 3.43%
- ----------------------------------------------------------------------------------------------------------
Agribrands International Inc. (a) ...................................... 8,000 368,000
Carter-Wallace Inc. .................................................... 208,000 3,731,000
Ivax Corporation (a) ................................................... 172,000 4,429,000
Twinlab Corporation (a) ................................................ 90,000 714,375
----------
9,242,375
Printing & Publishing -- 7.18%
- ----------------------------------------------------------------------------------------------------------
A.H. Belo Corporation (Class A) ........................................ 50,000 953,125
Lee Enterprises Inc. ................................................... 60,000 1,916,250
McClatchy Company (Class A) ............................................ 50,000 2,162,500
Media General Inc. (Class A) ........................................... 145,000 7,540,000
Penton Media Inc. ...................................................... 110,000 2,640,000
Pulitzer Inc. .......................................................... 55,000 2,217,187
Thomas Nelson Inc. ..................................................... 108,000 999,000
Topps Company Inc. (a) ................................................. 90,000 933,750
----------
19,361,812
Property-Casualty Insurance -- 0.42%
- ----------------------------------------------------------------------------------------------------------
Foremost Corporation of America ........................................ 40,000 1,135,000
Real Estate -- 1.25%
- ----------------------------------------------------------------------------------------------------------
Catellus Development Corporation (a) ................................... 205,000 2,626,562
Griffin Land & Nurseries Inc. (a) ...................................... 42,000 483,000
Gyrodyne Company of America Inc. (a) 13,000 264,875
----------
3,374,437
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Retail -- 1.21%
- ----------------------------------------------------------------------------------------------------------
Coldwater Creek Inc. (a) ............................................... 23,000 $ 471,500
Lillian Vernon Corporation ............................................. 125,000 1,390,625
Neiman-Marcus Group Inc. (Class A) ..................................... 35,000 977,812
Sports Authority Inc. (a) .............................................. 130,000 260,000
ValueVision International Inc.
(Class A) (a) ........................................................ 3,000 171,938
----------
3,271,875
Security & Investigation Services -- 2.35%
- ----------------------------------------------------------------------------------------------------------
Burns International Services
Corporation (a) ...................................................... 143,000 1,546,187
Pittway Corporation (Class A) .......................................... 18,000 806,625
Rollins Inc. ........................................................... 260,000 3,900,000
Wackenhut Corporation (Class A) (a) .................................... 5,000 74,688
----------
6,327,500
Telecommunications -- 6.49%
- ----------------------------------------------------------------------------------------------------------
Aerial Communications Inc. (a) ......................................... 53,000 3,226,375
Associated Group Inc. (Class A) (a) .................................... 25,000 2,281,250
Atlantic Tele-Network Inc. ............................................. 12,000 110,250
CommNet Cellular Inc. (a) .............................................. 30,000 963,750
Commonwealth Telephone Enterprises
Inc. (a) ............................................................. 30,410 1,607,929
Communications Systems Inc. ............................................ 68,000 884,000
COMSAT Corporation ..................................................... 45,000 894,375
Esat Telecom Group (a) ................................................. 2,000 183,000
GST Telecommunications Inc. (a) ........................................ 55,000 498,437
Hector Communications Corporation
(a) .................................................................. 6,000 84,000
Omnipoint Corporation (a) .............................................. 9,000 1,085,625
Rogers Cantel Mobile Communications
Inc. (Class B) (a) ................................................... 35,000 1,273,125
Telephone and Data Systems Inc. ........................................ 27,000 3,402,000
Teligent Inc. (Class A) (a) ............................................ 10,500 648,375
Viatel Inc. (a) ........................................................ 6,500 348,563
----------
17,491,054
Transportation -- 0.70%
- ----------------------------------------------------------------------------------------------------------
GATX Corporation ....................................................... 40,000 1,350,000
TransPro Inc. .......................................................... 85,000 547,188
----------
1,897,188
Utilities -- 6.32%
- ----------------------------------------------------------------------------------------------------------
AGL Resources Inc. ..................................................... 55,000 935,000
Aquarion Company ....................................................... 100,000 3,700,000
Berkshire Energy Resources ............................................. 10,000 350,000
Citizens Utilities Company (Class B) (a) 260,000 3,688,750
Eastern Enterprises .................................................... 60,000 3,446,250
Florida Public Utilities Company ....................................... 14,000 238,000
Southwest Gas Corporation .............................................. 22,000 506,000
WICOR, Inc. ............................................................ 143,400 4,185,487
----------
17,049,487
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
17
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
ENTERPRISE SMALL COMPANY VALUE FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Waste Management -- 0.03%
- --------------------------------------------------------------------------------------------------------
Envirosource Inc. (a) .................................................... 110,000 $ 84,700
Wireless Communications -- 1.90%
- --------------------------------------------------------------------------------------------------------
Allen Telecom Inc. (a) ................................................... 170,000 1,965,625
Leap Wireless International Inc. (a) ..................................... 12,000 942,000
Price Communications Corporation (a) ..................................... 80,000 2,225,000
-----------
5,132,625
-----------
Total Common Stocks
(Identified cost $231,958,583).......................................................... 247,888,086
- --------------------------------------------------------------------------------------------------------
U.S. Treasury Bills -- 8.11%
- --------------------------------------------------------------------------------------------------------
U.S. Treasury Bill
5.21% due 01/13/00 ..................................................... $8,055,000 8,041,011
U.S. Treasury Bill
5.27% due 01/13/00 ..................................................... 4,119,000 4,111,764
U.S. Treasury Bill
5.15% due 01/20/00 ..................................................... 6,424,000 6,406,539
U.S. Treasury Bill
5.20% due 01/20/00 ..................................................... 3,305,000 3,295,930
-----------
Total U.S. Treasury Bills
(Identified cost $21,855,244)........................................................... 21,855,244
- --------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Value
<S> <C>
Total Investments
(Identified cost $253,813,827).................... $269,743,330
Other Assets Less Liabilities -- (0.06)% ......... (165,379)
------------
Net Assets -- 100% ............................... $269,577,951
- ------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
(d) Security is fair valued at December 31, 1999.
(f) Restricted securities as to resale. The value of the Fund's investments
in restricted securities was $16,500, representing 0.01% of net assets at
December 31, 1999.
(ADR) American Depository Receipt.
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
18
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- ------- -------------
ENTERPRISE GROWTH FUND
- ------- -------------
Montag & Caldwell, Inc.
Atlanta, Georgia
Investment Management
Montag & Caldwell has served as Fund Manager to the Enterprise Growth Fund since
the fund was organized in 1968. Montag & Caldwell manages approximately $35
billion for institutional clients, and its normal investment minimum is $40
million.
Investment Objective
The objective of the Enterprise Growth Fund is to seek capital appreciation.
Investment Strategies
The Growth Fund invests primarily in U.S. common stocks. The "Growth at a
Reasonable 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
generally lower risk than a typical growth stock approach. Valuation is the key
selection criterion that makes the investment style risk averse. Also emphasized
are growth characteristics to identify companies whose shares are attractively
priced and may experience strong earnings growth relative to other companies.
1999 Performance Review
Due to strength in the Fund's technology holdings and certain consumer and
financial issues, 1999 was another good year for the Enterprise Growth Fund.
Montag attributes the Fund's performance to the strength in the Fund's
technology holdings offsetting weakness in certain consumer and health care
issues.
While the S&P 500 and other market-weighted indices made considerable progress
in 1999, many stocks showed little change or actually declined in price. The
year's stock market advance was extremely narrow, dominated almost exclusively
by the technology sector. Montag thinks the weakness in the broader market is
related to the increase in both short and long-term interest rates. Higher
interest rates increase the costs of borrowing for consumers and businesses and
reduce the attractiveness of stocks versus higher yielding bonds.
THE ENTERPRISE Group of Funds, Inc.
19
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
[CHART APPEARS HERE]
Lipper
Enterprise S&P Large Cap
Growth 500 Growth
Fund - A Index Index
---------- --------------- ------------------
12/31/89 10000 10000 9526
1990 9818 9689 9310
1991 13484 12641 13200
1992 14413 13604 14053
1993 15949 14975 15541
1994 15818 15173 15387
1995 21341 20875 21540
1996 25729 25668 28562
1997 32828 34231 37633
1998 44801 44011 49276
1999 60401 53268 60156
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE GROWTH FUND - A ONE YEAR FIVE YEAR TEN YEAR
With Sales Charge 16.28% 30.07% 19.65%
Without Sales Charge 22.08% 31.35% 20.24%
S&P 500 Index* 21.03% 28.55% 18.21%
Lipper Small Cap Growth Index* 34.82% 30.73% 19.70%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE GROWTH FUND - B ONE YEAR 5/1/95-12/31/99
With Sales Charge 16.30% 29.80%
Without Sales Charge 21.30% 29.96%
S&P 500 Index* 21.03% 27.50%
Lipper Small Cap Growth Index* 34.82% 30.47%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE GROWTH FUND - C ONE YEAR 5/1/97--12/31/99
With Sales Charge 20.28% 27.82%
Without Sales Charge 21.28% 27.82%
S&P 500 Index* 21.03% 27.39%
Lipper Small Cap Growth Index* 34.82% 35.20%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ONE YEAR 8/31/96-12/31/99
ENTERPRISE GROWTH FUND - Y 22.52% 31.87%
S&P 500 Index* 21.03% 29.62%
Lipper Large Cap Growth Index* 34.82% 33.79%
The performance of Classes B,C and Y will vary from the performance of Class A
shown in the above line graph based on differences in sales charges and expenses
paid by shareholders investing in the different classes.
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
*The S&P 500 is an unmanaged index that includes the common stocks of 500
companies that tend to be leaders in important industries within the U.S.
economy. It assumes the reinvestment of dividends and distributions and does not
include any management fees or expenses. The Lipper Large Cap Growth Index is an
unmanaged index of the 30 largest funds, based on total year-end net asset
value, in the Lipper Large Cap Growth Fund category. It assumes the reinvestment
of dividends and capital gains and does not include any management fees or
expenses. One cannot invest in an index.
Future Investment Strategy
While many technology stocks are now richly valued, Montag believes there are
still selective opportunities in technology. Global industry conditions remain
robust, and the build-out of the Internet is increasing the demand for
technology goods and services.
As it becomes more evident to investors that the Federal Reserve will be
successful at engineering a soft landing for the U.S. economy, the broader
market may begin to improve. Bond yields may then stabilize and drift somewhat
lower as the economy slows; and investors may become increasingly confident that
corporate profits can keep growing since a recession-induced decline in profits
may not be needed to keep inflation in check. Because the Federal Reserve is
operating in a preemptive fashion, Montag believes the Fed will be successful in
achieving sustained economic growth with low inflation and, as a result, the
stock market may begin to broaden out while it continues toward higher levels.
THE ENTERPRISE Group of Funds, Inc.
20
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In addition to selective technology issues, Montag continues to view the shares
of global, consumer growth companies as quite attractive. With the triumph of
capitalism, the longer-term opportunities for these high quality companies may
be enormous. Now that consumers overseas are benefiting from the pickup in world
trade, the intermediate-term outlook is also quite good. Montag expects
research-driven pharmaceutical and medical device companies to perform better in
2000 because their shares may represent excellent value and offer strong
double-digit earnings growth prospects. Well-positioned consumer-oriented
companies with a global opportunity, but more dependent on the U.S. economy, may
also do well as it becomes more evident that a soft economic landing has been
achieved.
Although Montag's long-term outlook for bonds is positive, Montag anticipates
that short-term anxiety over further Federal Reserve action and concern about
the strength of holiday retail spending will cause interest rates to increase
temporarily. With real GDP continuing to increase at a strong rate, many market
participants expect the Fed to increase short-term interest rates at their
February meeting. Inflation continues to be contained despite tight labor
markets and strength in global economies. Montag expects that the combination of
preemptive actions by the Fed and continued tame inflation may lead to a soft
landing that will allow interest rates to drift lower over the long-term.
The views expressed in this report reflect those of the Fund Manager only
through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
[GRAPHIC]
www.enterprisefunds.com
THE ENTERPRISE Group of Funds, Inc.
21
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Portfolio of Investments
ENTERPRISE GROWTH FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Common Stocks -- 98.11%
- ------------------------------------------------------------------------
Banking -- 1.77%
- ------------------------------------------------------------------------
Wells Fargo & Company .................. 1,075,000 $ 43,470,313
Business Services -- 2.42%
- ------------------------------------------------------------------------
Interpublic Group of Companies Inc...... 1,030,000 59,418,125
Computer Hardware -- 10.62%
- ------------------------------------------------------------------------
Dell Computer Corporation (a) .......... 824,600 42,054,600
EMC Corporation (a) .................... 547,100 59,770,675
Hewlett-Packard Company ................ 871,300 99,273,744
Intel Corporation ...................... 733,600 60,384,450
--------------
261,483,469
Computer Services -- 5.55%
- ------------------------------------------------------------------------
Electronic Data Systems
Corporation .......................... 1,380,100 92,380,444
Solectron Corporation (a) .............. 464,400 44,176,050
--------------
136,556,494
Computer Software -- 11.03%
- ------------------------------------------------------------------------
Electronic Arts Inc. (a) ............... 700,000 58,800,000
Microsoft Corporation (a) .............. 870,000 101,572,500
Oracle Corporation (a) ................. 991,000 111,053,937
--------------
271,426,437
Consumer Products -- 9.33%
- ------------------------------------------------------------------------
Gillette Company ....................... 2,500,000 102,968,750
Newell Rubbermaid Inc. ................. 1,243,500 36,061,500
Procter & Gamble Company ............... 827,800 90,695,837
--------------
229,726,087
Electrical Equipment -- 2.47%
- ------------------------------------------------------------------------
General Electric Company ............... 393,000 60,816,750
Entertainment & Leisure -- 1.46%
- ------------------------------------------------------------------------
Carnival Corporation ................... 750,000 35,859,375
Food & Beverages & Tobacco -- 7.42%
- ------------------------------------------------------------------------
Bestfoods .............................. 1,000,000 52,562,500
Coca-Cola Company ...................... 1,700,000 99,025,000
PepsiCo Inc. ........................... 878,900 30,981,225
--------------
182,568,725
Health Care -- 2.66%
- ------------------------------------------------------------------------
Medtronic Inc. ......................... 1,796,500 65,459,968
Hotels & Restaurants -- 5.23%
- ------------------------------------------------------------------------
Marriott International Inc. (Class A)... 1,400,000 44,187,500
McDonald's Corporation ................. 2,100,000 84,656,250
--------------
128,843,750
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Medical Instruments -- 2.22%
- ------------------------------------------------------------------------
Boston Scientific Corporation (a) ...... 2,500,000 $ 54,687,500
Misc. Financial Services -- 2.53%
- ------------------------------------------------------------------------
American Express Company ............... 374,100 62,194,125
Multi-Line Insurance -- 3.01%
- ------------------------------------------------------------------------
American International Group Inc........ 685,000 74,065,625
Pharmaceuticals -- 11.64%
- ------------------------------------------------------------------------
Bristol-Myers Squibb Company ........... 1,038,400 66,652,300
Johnson & Johnson ...................... 805,900 75,049,437
Pfizer Inc. ............................ 2,902,900 94,162,819
Schering-Plough Corporation ............ 1,200,000 50,625,000
--------------
286,489,556
Retail -- 11.85%
- ------------------------------------------------------------------------
Circuit City Stores Inc. ............... 883,200 39,799,200
Costco Wholesale Corporation (a) ....... 639,900 58,390,875
Gap Inc. ............................... 1,523,700 70,090,200
Home Depot Inc. ........................ 1,800,000 123,412,500
--------------
291,692,775
Telecommunications -- 6.90%
- ------------------------------------------------------------------------
MCI WorldCom Inc. (a) .................. 1,766,700 93,745,519
Tellabs Inc. (a) ....................... 1,186,100 76,132,794
--------------
169,878,313
--------------
Total Common Stocks
(Identified cost $1,808,267,259).................... 2,414,637,387
- ------------------------------------------------------------------------
Repurchase Agreement -- 1.74%
- ------------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement, 2.50%
due 01/03/00
Collateral: U.S. Treasury Note
$44,685,000, 5.50% due
05/31/03 Value $43,950,322............ $42,877,000 42,877,000
--------------
Total Repurchase Agreement
(Identified cost $42,877,000)......................... 42,877,000
- ------------------------------------------------------ -----------------
Total Investments
(Identified cost $1,851,144,259)...................... $2,457,514,387
Other Assets Less Liabilities -- 0.15% ............... 3,722,900
--------------
Net Assets -- 100% ................................... $2,461,237,287
- ------------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
22
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- ------- -------------
ENTERPRISE CAPITAL APPRECIATION FUND
- ------- -------------
Marsico Capital Management, LLC
Denver, Colorado
Investment Management
Marsico Capital Management, LLC became Fund Manager to the Enterprise Capital
Appreciation Fund on November 1, 1999. Marsico manages approximately $14 billion
for institutional clients and its usual investment minimum is $100 million.
Investment Objective
The objective of the Enterprise Capital Appreciation Fund is to seek maximum
capital appreciation.
Investment Strategies
The Capital Appreciation Fund's investment strategy blends top-down economic and
industry analysis with bottom-up stock selection. The Fund Manager's investment
approach emphasizes large capitalization U.S. companies that, in the Fund
Manager's opinion, have the ability to produce above-average earnings growth.
The investment process begins by establishing an overall macroeconomic outlook
which in turn forms the strategic backdrop for actual portfolio construction.
Various economic, social, and political factors are considered, including global
trends (e.g., productivity enhancements), interest rates, inflation, central
bank policies, the regulatory environment, and the overall competitive
landscape. This analysis also seeks to uncover specific industries and companies
that are expected to benefit from the macroeconomic environment. The potential
for maximum capital appreciation is the basis for investment decisions; any
income is incidental.
Stock selection stresses rigorous hands-on fundamental internal research. The
primary focus is to identify companies with market expertise/dominance, durable
franchises, improving fundamentals (e.g., margins, Return on Equity, Return on
Assets), strong balance sheets, global distribution capabilities and management
teams. Valuation is also an important consideration in selecting stocks. Stocks
are sold for three primary reasons: overvaluation relative to expected earnings
growth potential, forced displacement (i.e., a better investment idea surfaces),
or a permanent change in industry/company fundamentals that alters the original
investment thesis.
1999 Performance Review
Marsico began managing the Fund on November 1, 1999. The previous manager --
Provident Investment Counsel -- was responsible for the Fund during the
remainder of the year.
U.S. stocks finished 1999 on a strong note, with many market indexes (e.g.,
NASDAQ Composite, Russell 1000 Growth, S&P 500, Russell 2000, Russell 2000
Growth) producing double-digit returns in the fourth quarter. Technology-related
stocks continued to post remarkable gains; the NASDAQ surged by 22 percent in
the month of December alone -- more than the S&P 500's gain for the entire year.
For 1999 as a whole, the NASDAQ rose nearly 87 percent. During the last 60
trading days of 1999, according to Hewitt Associates, the NASDAQ Composite rose
by a stunning 51.5 percent. The IPO market remained buoyant; over 150 IPOs were
priced in the U.S. during the fourth quarter; 62 finished the quarter up at
least 100 percent from their subscription prices.
Bonds, meanwhile, went in the other direction. The Federal Open Market Committee
("FOMC") followed rate increases in the second and third quarters with one
further tightening move in November, unwinding the 0.75 percent "easing" that
took place in late-1998 subsequent to the Russian ruble devaluation. Although
the Federal Reserve did not raise rates or formally change its interest rate
policy at its December meeting, the FOMC's post-meeting press release seemed to
hint that tighter monetary policy would be a distinct possibility in 2000. Bond
yields rose sharply during the fourth quarter. Fixed-income returns in 1999 were
the weakest since 1994.
THE ENTERPRISE Group of Funds, Inc.
23
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
During the fourth quarter, every sector in the S&P 500 Index produced a positive
return. However, six sectors -- including utilities, health care, energy, and
transportation -- had relatively weak returns (compared to the overall Index)
ranging from less than 1 percent to 5 percent. Technology (34 percent), business
equipment (23 percent), retail (22 percent), and consumer services (19 percent)
were the strongest-performing areas during the quarter. Beginning November 1999,
the Fund was well-represented in the technology sector through a diverse array
of high quality companies such as QUALCOMM, Inc., EMC Corporation, Cisco
Systems, Inc., and Sun Microsystems., Inc., many of which produced strong gains
in the fourth quarter. However, there also were a variety of positive
contributors to performance outside the technology area for the Fund during the
quarter including Genentech, Inc., General Electric Company, Tiffany & Company,
and UAL Corporation.
GROWTH OF A $10,000 INVESTMENT
[CHART APPEARS HERE]
Enterprise S&P Lipper
Capital 500/Barra Multi-Cap
Appreciation Growth Growth
Fund - A Index Index
---------- --------------- ------------------
12/31/89 9527 10000 10000
1990 9893 10020 9409
1991 15734 13864 13548
1992 16651 14567 14614
1993 17602 14812 16712
1994 16993 15276 16240
1995 21360 21099 21716
1996 24889 26158 25593
1997 29934 35717 31467
1998 38960 50772 39270
1999 54307 65111 57472
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE CAPITAL APPRECIATION FUND - A ONE YEAR FIVE YEAR TEN YEAR
With Sales Charge 32.78% 24.94% 18.44%
Without Sales Charge 39.39% 26.16% 19.01%
S&P 500/Barra Growth Index* 28.24% 33.64% 20.61%
Lipper Multi-Cap Growth Index* 46.35% 28.76% 19.11%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE CAPITAL APPRECIATION FUND - B ONE YEAR 5/1/95-12/31/99
With Sales Charge 33.62% 25.96%
Without Sales Charge 38.62% 26.14%
S&P 500/Barra Growth Index* 28.24% 32.99%
Lipper Multi-Cap Growth Index* 46.35% 28.51%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE CAPITAL APPRECIATION FUND - C ONE YEAR 5/1/97-12/31/99
With Sales Charge 37.64% 34.34%
Without Sales Charge 38.64% 34.34%
S&P 500/Barra Growth Index* 28.24% 34.95%
Lipper Multi-Cap Growth Index* 46.35% 35.52%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ONE YEAR 5/31/98-12/31/99
ENTERPRISE CAPITAL APPRECIATION FUND - Y 0.04% 36.94%
S&P 500/Barra Growth Index* 8.24% 33.79%
Lipper Multi-Cap Growth Index* 46.35% 36.85%
The performance of Classes B,C and Y will vary from the performance of Class A
shown in the above line graph based on differences in sales charges and expenses
paid by shareholders investing in the different classes.
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
*The S&P 500/Barra Growth Index is an unmanaged capitalization weighted index
composed of stocks of S&P 500 with high price-to-book ratios relative to the S&P
500 as a whole. It assumes the reinvestment of dividends and capital gains and
does not include management fees and expenses. The Lipper Multi-Cap Growth Index
is an unmanaged index of the 30 largest funds, based on total year-end net asset
value, in the Lipper Multi-Cap Growth Fund category. It assumes the reinvestment
of dividends and capital gains and does not include any management fees or
expenses. One cannot invest in an index.
THE ENTERPRISE Group of Funds, Inc.
24
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- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FUTURE INVESTMENT STRATEGY
Marsico's overall market outlook, which incorporates macroeconomic data,
sector/industry factors, and individual company analysis, on balance remains
positive. Several factors may help create an overall favorable backdrop for
equity investing. These include productivity gains associated with technological
advancements, a strong U.S. consumer, Federal budget surpluses, and expected
escalation of free trade. While interest rates have risen recently, Marsico
believes that the U.S. is in a secular lower interest rate environment. One key
aspect underlying Marsico's market outlook is that Marsico believes inflation
should remain low and that the "spread" between inflation and interest rates (as
measured by the 30-year Treasury bond) is well above the historical norm. That
is, real interest rates, in Marsico's opinion, appear relatively high. Assuming
inflation remains at or near its present level, Marsico expects interest rates
may decline over time, which may be a plus for growth-oriented stocks. In the
interim, Marsico anticipates that market volatility will continue. In 1999, 35
percent of the trading days resulted in a price change of 1 percent or more in
the S&P 500 Index, while 9 percent of the trading days had price changes of 2
percent or more in the Index.
Marsico has taken a variety of steps to ensure that the Fund is prudently
allocated both across and within a variety of economic sectors and industries.
Marsico believes that stock selection, which was important in 1999, will be even
more critical in 2000. It is important to emphasize that Marsico will continue
to focus on finding value in a number of areas in the stock market including
select technology, retail, health care and financial services companies. While
the Fund's aggregate position in technology is significant, Marsico believes the
individual holdings are well diversified across a group of high quality, proven
companies including telecommunications equipment/services, networking, hardware,
software, and data storage. In the event that Marsico becomes concerned about
specific valuations with the companies owned in the Fund, Marsico would not
hesitate to trim or sell the positions outright.
The views expressed in this report reflect those of the Fund Manager only
through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
[GRAPHIC]
www.enterprisefunds.com
THE ENTERPRISE Group of Funds, Inc.
25
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<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
ENTERPRISE CAPITAL APPRECIATION FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Common Stocks -- 90.94%
- ------------------------------------------------------------------------
Advertising -- 1.26%
- ------------------------------------------------------------------------
Omnicom Group Inc. ...................... 28,974 $ 2,897,400
Broadcasting -- 1.83%
- ------------------------------------------------------------------------
Clear Channel Communications Inc. (a) 46,822 4,178,863
Cable -- 0.99%
- ------------------------------------------------------------------------
Mediaone Group Inc. (a) ................. 29,512 2,266,891
Chemicals -- 0.78%
- ------------------------------------------------------------------------
Du Pont (E. I.) de Nemours &
Company ............................... 26,990 1,777,966
Communications -- 2.59%
- ------------------------------------------------------------------------
3Com Corporation (a) .................... 126,133 5,928,251
Computer Hardware -- 15.02%
- ------------------------------------------------------------------------
Cisco Systems Inc. (a) .................. 106,944 11,456,376
Dell Computer Corporation (a) ........... 211,419 10,782,369
EMC Corporation (a) ..................... 111,081 12,135,599
------------
34,374,344
Computer Services -- 9.09%
- ------------------------------------------------------------------------
America Online Inc. (a) ................. 113,017 8,525,720
Sun Microsystems Inc. (a) ............... 50,000 3,871,875
VeriSign Inc. (a) ....................... 44,000 8,401,250
------------
20,798,845
Computer Software -- 2.99%
- ------------------------------------------------------------------------
Oracle Corporation (a) .................. 13,217 1,481,130
Veritas Software Corporation (a) ........ 37,500 5,367,188
------------
6,848,318
Electrical Equipment -- 4.58%
- ------------------------------------------------------------------------
General Electric Company ................ 67,661 10,470,540
Electronics -- 0.06%
- ------------------------------------------------------------------------
Sony Corp. (ADR) ........................ 453 128,992
Energy -- 1.63%
- ------------------------------------------------------------------------
AES Corporation (a) ..................... 50,000 3,737,500
Finance -- 2.59%
- ------------------------------------------------------------------------
Morgan Stanley Dean Witter &
Company ............................... 41,576 5,934,974
Hotels & Restaurants -- 1.82%
- ------------------------------------------------------------------------
Four Seasons Hotels Inc. ................ 78,051 4,156,216
Misc. Financial Services -- 6.44%
- ------------------------------------------------------------------------
Citigroup Inc. .......................... 180,514 10,029,809
Federal National Mortgage Association 75,242 4,697,922
------------
14,727,731
Pharmaceuticals -- 5.12%
- ------------------------------------------------------------------------
Genentech Inc. (a) ...................... 87,200 11,728,400
Retail -- 2.78%
- ------------------------------------------------------------------------
Tiffany & Company ....................... 71,200 6,354,600
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Technology -- 2.67%
- ------------------------------------------------------------------------
Texas Instruments Inc. .................. 63,128 $ 6,115,525
Telecommunications -- 21.57%
- ------------------------------------------------------------------------
Ciena Corporation (a) ................... 40,389 2,322,367
General Motors Corporation
(Class H) (a) ......................... 37,087 3,560,352
JDS Uniphase Corporation (a) ............ 28,804 4,646,445
Lucent Technologies Inc. ................ 81,997 6,134,401
MCI WorldCom Inc. (a) ................... 130,055 6,901,017
McLeodUSA Inc. (a) ...................... 40,000 2,355,000
Nortel Networks Corporation ............. 80,566 8,137,166
QUALCOMM Inc. (a) ....................... 86,936 15,311,603
------------
49,368,351
Transportation -- 3.64%
- ------------------------------------------------------------------------
AMR Corporation (a) ..................... 31,693 2,123,431
UAL Corporation (a) ..................... 80,228 6,222,684
------------
8,346,115
Travel/Entertainment/Leisure -- 0.07%
- ------------------------------------------------------------------------
Royal Caribbean Cruises Ltd ............. 3,157 155,680
------------
Wireless Communications -- 3.42%
- ------------------------------------------------------------------------
Sprint PCS (a) .......................... 76,289 7,819,622
------------
Total Common Stocks
(Identified cost $152,682,436)........... 208,115,124
- ------------------------------------------------------------------------
Short-Term Government Securities -- 8.08%
- ------------------------------------------------------------------------
Federal Home Loan Bank Consolidated
Discount Note, 1.35% due 01/03/00 $18,500,000 18,498,613
------------
Total Short-Term Government Securities
(Identified cost $18,498,613)........................ 18,498,613
- ------------------------------------------------------------------------
Total Investments
(Identified cost $171,181,049)......................... $226,613,737
Other Assets Less Liabilities -- 0.98% ................ 2,240,502
------------
Net Assets -- 100% .................................... $228,854,239
- ------------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
(ADR) American Depository Receipt.
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
26
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<PAGE>
- ------- -------------
ENTERPRISE EQUITY FUND
- ------- -------------
TCW Investment Management Company
Los Angeles, California
Investment Management
TCW Investment Management Company (previously known as TCW Funds Management,
Inc.) became Fund Manager to the Enterprise Equity Fund on November 1, 1999. TCW
manages approximately $57 billion for institutional clients, and its normal
investment minimum is $100 million.
Investment Objective
The objective of the Enterprise Equity Fund is long-term capital appreciation.
Investment Strategies
Using a bottom-up investment approach, TCW invests in large and medium
capitalization companies that have a long record of successful operations in
their core business. Looking for companies with a dominant position in a niche
business (e.g. technology, production and distribution), TCW also considers the
financial quality of the company. Prime candidates have sound financial
fundamentals and management that is committed to shareholder interests.
1999 Performance Review
The U.S. stock market continued to advance strongly in 1999. The S&P 500 Index
rose 21.0 percent, returning more than 20 percent for a record fifth consecutive
year. Even as the popular indexes kept hitting new highs, however, the U.S.
market was characterized by two contradictory trends: the rapid escalation of
technology stocks, especially those associated with the Internet and e-commerce,
and the only modest gains or even price declines for many stocks in other
industry sectors. More than half the stocks on the New York Stock Exchange
actually declined in price during the year. The Russell 1000 Value Index, a
widely followed large-cap value benchmark, rose a relatively modest 6.7 percent
in 1999, even though many of the companies in the index continued to generate
strong earnings growth.
Performance disparities among industry sectors and types of stocks are hardly
new. Nonetheless, few such disparities have been as extreme as that which
occurred during 1999 between the high-flying tech stocks and the rest of the
market. The outperformance of technology stocks became most pronounced in the
fourth quarter, when the S&P 500 rose 14.9 percent while the tech-heavy NASDAQ
composite delivered a total return of 48.3 percent.
Much of the current fervor surrounding tech stocks stems from the explosive
growth potential of e-commerce and other tech-related businesses.
Internet-related stocks such as America Online, Yahoo!, Amazon.com and eBay
advanced more than 20 percent in December alone, even though most of these
companies have yet to earn any profit and are expected to remain unprofitable in
the near term. This lack of current earnings, and uncertainty over when earnings
will occur, makes these stocks risky and even undesirable for investors who are
not simply chasing the upward momentum of stocks that keep rising with little or
no direct relationship to fundamentals.
TCW has always been thoughtful in its value style to give consideration to
companies across the breadth of the market, including technology companies. And,
in fact, the Fund made money on several of the more established technology
stocks during the past year -- companies with strong market positions and
improving profitability. However, in the current ebullient market for tech
stocks, it has become increasingly difficult to find value in the sector. As a
result, the Fund's investment results trailed the S&P 500 and other major market
indexes due in part to the Fund's underweighting in the technology sector.
Whether the current tech stock craze turns out to be a bubble that bursts
remains to be seen. Even if it does burst, however, the technology industry may
continue to grow and create enormous economic wealth. TCW's challenge as value
manager, therefore, is to identify solid companies that stand to benefit from
this growth. In recent months, TCW has intensified its research efforts aimed at
buying technology companies with staying power and where share prices bear some
reasonable relationship to underlying value.
The Fund bought several such stocks and TCW will continue its efforts to find
additional technology issues that meet TCW's value criteria, while maintaining
TCW's broadly based research programs to uncover excellent investment
opportunities in all industry sectors.
THE ENTERPRISE Group of Funds, Inc.
27
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- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
[CHART APPEARS HERE]
Enterprise S&P Lipper
Equity 500 Multi-Cap
Fund - A Index Value Index
---------- ----- -----------
5/1/97 9523 10000 10000
12/31/97 11552 12256 12145
1998 12635 15757 12904
1999 14803 19071 13671
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE EQUITY FUND - A ONE YEAR 5/1/97-12/31/99
With Sales Charge 11.63% 15.83%
Without Sales Charge 17.15% 17.97%
S&P 500 Index* 21.03% 27.37%
Lipper Multi-Cap Value Index* 5.94% 12.53%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE EQUITY FUND - B ONE YEAR 5/1/97-12/31/99
With Sales Charge 11.49% 16.45%
Without Sales Charge 16.49% 17.31%
S&P 500 Index* 21.03% 27.37%
Lipper Multi-Cap Value Index* 5.94% 12.53%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE EQUITY FUND - C ONE YEAR 5/1/97-12/31/99
With Sales Charge 15.30% 17.34%
Without Sales Charge 16.30% 17.34%
S&P 500 Index* 21.03% 27.37%
Lipper Multi-Cap Value Index* 5.94% 12.53%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ONE YEAR 10/31/98-12/31/99
ENTERPRISE EQUITY FUND - Y 17.89% 18.28%
S&P 500 Index* 21.03% 29.96%
Lipper Multi-Cap Value Index* 5.94% 10.49%
The performance of Classes B, C and Y will vary from the performance of Class A
shown in the above line graph based on differences in sales charges and expenses
paid by shareholders investing in the different classes.
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
*The S&P 500 is an unmanaged index that includes the common stocks of 500
companies that tend to be leaders in important industries within the U.S.
economy. It assumes the reinvestment of dividends and distributions and does not
include any management fees or expenses. The Lipper Multi-Cap Value Index is an
unmanaged index of the 30 largest funds, based on total year-end net asset
value, in the Lipper Multi-Cap Value Fund category. It assumes the reinvestment
of dividends and capital gains and does not include any management fees or
expenses. One cannot invest in an index.
Future Investment Strategy
Throughout the year, TCW has seen higher interest rates and significantly higher
energy prices. This may prove burdensome to certain sectors of the economy. Thus
far, due in part to the wealth effect of a strong stock market, consumer
confidence is high. As a result consumer spending has not slowed and the broad
economy continues to grow at a significant rate. However, if consumer spending,
which has grown recently at a rate in excess of incomes, does slow, corporate
earnings may be impacted. In the past year earnings shortfalls have usually
resulted in swift corrections to share prices. A consumer-led economic slowdown
may, however, lead to lower interest rates. But a slowdown in the economy may
result in earnings disappointments from companies that do not have pricing
power. Alternatively lower interest rates could result in improved valuations
for the leading companies the Fund owns.
In 2000, TCW will continue to focus on companies whose specific advantages may
enable them to deliver strong earnings and cash-flow growth. While it is not
hard to find stocks that trade at arguably low valuations, it is a challenge to
find companies that are truly valuable whose stock can be purchased at a
reasonable price. TCW believes the Fund is comprised of very valuable companies.
Given that these companies typically have stronger balance sheets, are more
profitable, grow more rapidly and have greater market share, they may be better
prepared to weather bad as well as good economic times. As the Fund's holdings
appreciate, it becomes necessary to find new ideas, which meet TCW's stringent
criteria, and in today's market that can be difficult.
The views expressed in this report reflect those of the Fund Manager only
through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
THE ENTERPRISE Group of Funds, Inc.
28
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<PAGE>
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PORTFOLIO OF INVESTMENTS
ENTERPRISE EQUITY FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Common Stocks -- 96.23%
- ---------------------------------------------------------------------
Automotive -- 1.25%
- ---------------------------------------------------------------------
Delphi Automotive Systems Corporation 17,300 $ 272,475
Broadcasting -- 2.75%
- ---------------------------------------------------------------------
Time Warner Inc. ....................... 8,300 601,231
Business Services -- 3.07%
- ---------------------------------------------------------------------
Paychex Inc. ........................... 16,800 672,000
Cable -- 2.64%
- ---------------------------------------------------------------------
Cox Communications Inc. (Class A) (a) .. 11,200 576,800
Computer Hardware -- 17.50%
- ---------------------------------------------------------------------
Cisco Systems Inc. (a) ................. 11,900 1,274,787
Dell Computer Corporation (a) .......... 30,700 1,565,700
Intel Corporation ...................... 12,000 987,750
-----------
3,828,237
Computer Services -- 1.60%
- ---------------------------------------------------------------------
Pixar Inc. (a) ......................... 9,900 350,213
Computer Software -- 11.21%
- ---------------------------------------------------------------------
Microsoft Corporation (a) .............. 8,200 957,350
Siebel Systems Inc. (a) ................ 17,800 1,495,200
-----------
2,452,550
Consumer Products -- 3.86%
- ---------------------------------------------------------------------
Gillette Company ....................... 10,400 428,350
Procter & Gamble Company ............... 3,800 416,337
-----------
844,687
Electrical Equipment -- 4.83%
- ---------------------------------------------------------------------
Maxim Integrated Products Inc. (a) ..... 22,400 1,057,000
Finance -- 2.83%
- ---------------------------------------------------------------------
Providian Financial Corporation ........ 6,800 619,225
Health Care -- 1.83%
- ---------------------------------------------------------------------
Medtronic Inc. ......................... 11,000 400,813
Hotels & Restaurants -- 0.90%
- ---------------------------------------------------------------------
Mirage Resorts Inc. (a) ................ 12,900 197,531
Insurance -- 3.44%
- ---------------------------------------------------------------------
Progressive Corporation (Ohio) ......... 10,300 753,188
Machinery -- 4.63%
- ---------------------------------------------------------------------
Applied Materials Inc. (a) ............. 8,000 1,013,500
Medical Services -- 4.02%
- ---------------------------------------------------------------------
Biogen Inc. (a) ........................ 10,400 878,800
Misc. Financial Services -- 3.95%
- ---------------------------------------------------------------------
The Charles Schwab Corporation ......... 22,500 863,437
Multi-Line Insurance -- 2.22%
- ---------------------------------------------------------------------
American International Group Inc. ...... 4,500 486,563
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Pharmaceuticals -- 8.01%
- ---------------------------------------------------------------------
Amgen Inc. (a) ......................... 11,000 $ 660,687
Pfizer Inc. ............................ 22,000 713,625
Warner-Lambert Company ................. 4,600 376,913
-----------
1,751,225
Retail -- 6.68%
- ---------------------------------------------------------------------
Home Depot Inc. ........................ 15,750 1,079,859
Safeway Inc. (a) ....................... 10,700 380,519
-----------
1,460,378
Telecommunications -- 2.56%
- ---------------------------------------------------------------------
Lucent Technologies Inc. ............... 7,500 561,094
Transportation -- 6.45%
- ---------------------------------------------------------------------
Kansas City Southern Industries Inc. ... 18,900 1,410,412
-----------
Total Common Stocks
(Identified cost $18,343,924 )................... 21,051,359
- ---------------------------------------------------------------------
Repurchase Agreement -- 3.75%
- ---------------------------------------------------------------------
State Street Bank & Trust Repurchase
Agreement, 2.50% due 01/03/00
Collateral: U.S. Treasury Bond
$790,000, 7.25% due 08/15/04
Value $858,046 ....................... $820,000 820,000
-----------
Total Repurchase Agreement
(Identified cost $820,000 )........................... 820,000
- ------------------------------------------------------ --------------
Total Investments
(Identified cost $19,163,924).......................... $21,871,359
Other Assets Less Liabilities -- 0.02% ................ 3,772
-----------
Net Assets -- 100% .................................... $21,875,131
- ---------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
29
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<PAGE>
- ------------- -------
ENTERPRISE GROWTH AND INCOME FUND
- ------------- -------
Retirement System Investors Inc.
New York, New York
Investment Management
Retirement System Investors Inc. ("RSI") has served as Fund Manager to the
Enterprise Growth and Income Fund since 1991. RSI manages approximately $974
million for all of its clients.
Investment Objective
The objective of the Enterprise Growth and Income Fund is a total return through
capital appreciation with income as a secondary consideration.
Investment Strategies
The Growth and Income Fund invests primarily in U.S. common stocks of large
capitalization companies. The Fund 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. 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
sells its products and services, the company's stock market price, earnings
level and projected earnings growth rate. The Fund Manager also considers
current and projected dividend yields. The Fund Manager compares this
information to that of other companies in determining relative value and
dividend potential.
1999 Performance Review
1999 was a very good year for growth stock investing, particularly for funds
with exposure to technology stocks. The technology component of the S&P 500 was
up over 80 percent while the S&P 500 gained 21.0 percent. Sectors related to the
so-called New Economy fared especially well. Companies helping to build the new
communications infrastructure, as well as Internet-related companies, were bid
up to unprecedented valuations by an investment community willing to pay high
prices for expected growth. By and large, non-Internet technology companies did
post good earnings growth in 1999, partly because they were comparing results
versus a 1998 plagued by weak emerging markets. And, by and large, Internet
stocks were bid up to very high levels on the promise that at some point, they
will make money, not keep losing it in copious amounts.
Elsewhere in the market, many solid performing companies were selling for
significantly lower valuations than the narrow list of stocks that investors
seemed to have on their must-own list. It seemed if a company was not on that
narrow list, its shares were likely to languish. Half of the S&P 500 stocks
finished down for the year. Presumably, with so much money going into
technology, there was less left for other investments.
In addition to favoring a very narrow list of companies, the market was somewhat
unusual in that it ignored rising interest rates, with most sectors shrugging
them off as less meaningful than in the past. The Federal Reserve Board raised
rates 0.75 percent, essentially reversing the cuts of 1998 that accompanied the
crisis of confidence sparked by Thailand, Russia and the hedge fund Long Term
Capital Management's problems. While inflation remained fairly quiescent, it
crept up a little and economic factors such as very high employment caused the
Fed to fret about future inflation.
Strong contributors to the Fund's 1999 performance were stellar returns from
Safeguard Scientific, Nortel Networks, Tiffany, Corning, EMC and Alcoa, among
the larger holdings. Laggards were Xerox, Philip Morris, Lockheed Martin and
Safeway.
THE ENTERPRISE Group of Funds, Inc.
30
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- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
[CHART APPEARS HERE]
Enterprise S&P Lipper
Growth & Income 500 Large Cap
Fund - A Index Core Index
---------- ----- -----------
7/31/97 9523 10000 10000
1997 9520 10243 10169
1998 11091 13169 12908
1999 14749 15939 15406
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE GROWTH AND INCOME FUND - A ONE YEAR 7/31/97-12/31/99
With Sales Charge 26.64% 17.42%
Without Sales Charge 32.97% 19.82%
S&P 500 Index* 21.03% 21.25%
Lipper Large Cap Core Index* 19.35% 19.56%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE GROWTH AND INCOME FUND - B ONE YEAR 7/31/97-12/31/99
With Sales Charge 27.20% 17.89%
Without Sales Charge 32.20% 19.19%
S&P 500 Index* 21.03% 21.25%
Lipper Large Cap Core Index* 19.35% 19.56%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE GROWTH AND INCOME FUND - C ONE YEAR 7/31/97-12/31/99
With Sales Charge 31.29% 19.24%
Without Sales Charge 32.29% 19.24%
S&P 500 Index* 21.03% 21.25%
Lipper Large Cap Core Index* 19.35% 19.56%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ONE YEAR FIVE YEAR 5/31/91-12/31/99
ENTERPRISE GROWTH AND INCOME FUND - Y 33.59% 27.61% 20.42%
S&P 500 Index* 21.03% 28.55% 19.41%
Lipper Large Cap Core Index* 19.35% 25.32% 17.61%
The performance of Classes B, C and Y will vary from the performance of Class A
shown in the above line graph based on differences in sales charges and expenses
paid by shareholders investing in the different classes.
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
*The S&P 500 is an unmanaged index that includes the common stocks of 500
companies that tend to be leaders in important industries within the U.S.
economy. It assumes the reinvestment of dividends and distributions and does not
include any management fees or expenses. The Lipper Large-Cap Core Index is an
unmanaged index of the 30 largest funds, based on total year-end net asset
value, in the Lipper Large-Cap Core Fund category. It assumes the reinvestment
of dividends and capital gains and does not include any management fees or
expenses. One cannot invest in an index.
THE ENTERPRISE Group of Funds, Inc.
31
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Future Investment Strategy
Generally, the backdrop for the stock market appears quite good on all fronts
except that of valuation and the challenge the Fed faces in finding a level of
interest rates providing a soft landing for the expansion. On the positive side,
the American economy is in excellent shape heading into 2000: Y2K computer
glitches were avoided; more people are employed than ever, inflation has
remained quiet; the U.S. remains the pre-eminent engine of world-wide growth and
technological progress; the rest of the world's economies, especially the
emerging countries, seem on a much more solid footing than last year; the world
in general is benefiting from a peace dividend, with fewer resources going to
defense products; the Internet and other technologies appear to be increasing
productivity and lowering the costs of doing business; and the baby boom
generation seems to be saving for its retirement, mostly by investing either
directly or via mutual funds, in the stock market.
On the more worrisome side, interest rates have come up, responding in part to
the Federal Reserve Board's three 0.25 percent increases in short term rates in
1999, which reversed three similar downward moves in 1998. Because of high GDP
rates and full employment, many believe that the Fed will raise rates more in
early 2000, partly because it was forestalled in late 1999 due to a desire to
keep liquidity high in the face of Y2K concerns. OPEC proved itself resurgent in
1999, as the cartel was able to roughly double the price of oil by not cheating
as it has done in the recent past. While the cost of an important raw material
going up is not a good thing, the world, particularly the developed world, is
less energy intensive than it was formerly, and has absorbed this price rise
without much trouble.
Most worrisome are phenomena internal to the financial markets. There seems to
be clear signs of speculation in certain sectors of the market, particularly in
Initial Public Offerings ("IPOs") and the Internet stocks. It is less clear that
the very high valuations accorded to technology and communications companies are
overdone, as earnings growth generated by companies in this sector has been
dramatic. Most often, though, in the long history of the stock market, sectors
which shoot up like rockets come back down to earth, sometimes painfully. In the
first few trading days of 2000, with interest rates continuing to drift up, the
market sold off, possibly related to investors who waited for the 2000 tax year
to sell stocks with large embedded capital gains.
The market has also been quite narrow. While the averages have gone up, the
drivers to those returns have been a fairly narrow group of stocks. RSI expects
a moderation in the extreme discrepancy between favored and unfavored stocks in
the market. This can come about in two ways: either the market broadens out and
the lagging stocks catch up, or the leading stocks lose steam and their P/E
multiples contract, and their prices decline. The former would be the preferable
outcome, and one which RSI believes is most likely, given the positives the
economy and this market have going for them.
RSI's response remains focused on seeking out attractive relative value in both
growth and value stocks, with more of the latter surfacing as attractive
currently. In the growth camp, RSI continues to embrace technology but is
concerned about excessive valuations and would be careful about new commitments
unless weakness develops. If a more inflationary environment develops and
worldwide economic expansion continues, RSI would expect that cyclical and basic
material companies may provide good relative performance. Reflecting this, the
Fund is overweighted in aluminum, papers, electrical equipment and capital goods
companies. Financial and other interest sensitive groups could become more
interesting once interest rates peak or the economy slows.
The views expressed in this report reflect those of the Fund Manager only
through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
THE ENTERPRISE Group of Funds, Inc.
32
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
ENTERPRISE GROWTH AND INCOME FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares,
Contracts
or Principal
Amount Value
<S> <C> <C>
Common Stocks -- 90.61%
- -----------------------------------------------------------------------------------------------------------------------
Aerospace -- 3.72%
- -----------------------------------------------------------------------------------------------------------------------
Honeywell International Inc. ............................................. 107,775 $6,217,270
Lockheed Martin Corporation .............................................. 7,100 155,313
----------
6,372,583
Banking -- 1.13%
- -----------------------------------------------------------------------------------------------------------------------
Bank of America Corporation .............................................. 5,884 295,303
Chase Manhattan Corporation .............................................. 21,002 1,631,593
----------
1,926,896
Broadcasting -- 1.31%
- -----------------------------------------------------------------------------------------------------------------------
Time Warner Inc. ......................................................... 30,950 2,241,941
Building & Construction -- 3.52%
- -----------------------------------------------------------------------------------------------------------------------
Armstrong World Industries Inc. .......................................... 20,600 687,525
Martin Marietta Materials Inc. ........................................... 32,450 1,330,450
Southdown Inc. ........................................................... 77,622 4,007,236
----------
6,025,211
Chemicals -- 0.48%
- -----------------------------------------------------------------------------------------------------------------------
Du Pont (E. I.) de Nemours &
Company ................................................................ 12,400 816,850
Communications -- 0.02%
- -----------------------------------------------------------------------------------------------------------------------
3Com Corporation (a) ..................................................... 750 35,250
Computer Hardware -- 15.24%
- -----------------------------------------------------------------------------------------------------------------------
Cisco Systems Inc. (a) ................................................... 12,200 1,306,925
Dallas Semiconductor Corporation ......................................... 95,780 6,171,824
EMC Corporation (a) ...................................................... 93,200 10,182,100
Hewlett-Packard Company .................................................. 6,100 695,019
Intel Corporation ........................................................ 23,400 1,926,112
International Business Machines
Corporation ............................................................ 45,320 4,894,560
Lexmark International Group Inc.
(Class A) (a) .......................................................... 1,700 153,850
Xerox Corporation ........................................................ 33,400 757,762
----------
26,088,152
Computer Services -- 3.44%
- -----------------------------------------------------------------------------------------------------------------------
Comverse Technology Inc. (a) ............................................. 675 97,706
Internet Capital Group Inc. (a) .......................................... 5,500 935,000
Safeguard Scientifics Inc. (a) ........................................... 27,500 4,456,719
Sun Microsystems Inc. (a) ................................................ 5,200 402,675
----------
5,892,100
Computer Software -- 5.71%
- -----------------------------------------------------------------------------------------------------------------------
BMC Software Inc. (a) .................................................... 80,075 6,400,995
Cadence Design Systems Inc. (a) .......................................... 37,100 890,400
Computer Associates International Inc. 4,650 325,209
Sterling Commerce Inc. (a) ............................................... 63,400 2,159,563
----------
9,776,167
Consumer Products -- 1.57%
- -----------------------------------------------------------------------------------------------------------------------
Kimberly-Clark Corporation ............................................... 41,250 2,691,563
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares,
Contracts
or Principal
Amount Value
<S> <C> <C>
Consumer Services -- 0.13%
- -----------------------------------------------------------------------------------------------------------------------
United Parcel Service Inc. ............................................... 3,160 $ 218,040
Containers/Packaging -- 1.90%
- -----------------------------------------------------------------------------------------------------------------------
Smurfit - Stone Container
Corporation (a) ........................................................ 132,500 3,246,250
Crude & Petroleum -- 5.82%
- -----------------------------------------------------------------------------------------------------------------------
BP Amoco (ADR) ........................................................... 35,020 2,077,124
Exxon Mobil Corporation .................................................. 43,613 3,513,572
Royal Dutch Petroleum Company
(ADR) .................................................................. 34,275 2,071,495
Texaco Inc. .............................................................. 42,300 2,297,419
----------
9,959,610
Electrical Equipment -- 4.64%
- -----------------------------------------------------------------------------------------------------------------------
Emerson Electric Company ................................................. 119,100 6,833,362
General Electric Company ................................................. 7,200 1,114,200
----------
7,947,562
Electronics -- 0.90%
- -----------------------------------------------------------------------------------------------------------------------
Conexant Systems Inc. (a) ................................................ 200 13,275
Gemstar International Group Ltd. (a) ..................................... 3,000 213,750
PMC-Sierra Inc. (a) ...................................................... 8,200 1,314,563
----------
1,541,588
Finance -- 0.08%
- -----------------------------------------------------------------------------------------------------------------------
Merrill Lynch & Company Inc. ............................................. 1,700 141,950
Food & Beverages & Tobacco -- 2.21%
- -----------------------------------------------------------------------------------------------------------------------
Anheuser Busch Companies Inc. ............................................ 44,900 3,182,287
Dole Food Inc. ........................................................... 10,800 175,500
Philip Morris Companies Inc. ............................................. 18,080 419,230
----------
3,777,017
Machinery -- 3.62%
- -----------------------------------------------------------------------------------------------------------------------
Deere & Company .......................................................... 13,000 563,875
Ingersoll Rand Company ................................................... 74,950 4,126,934
Snap-On Inc. ............................................................. 56,400 1,498,125
----------
6,188,934
Manufacturing -- 4.94%
- -----------------------------------------------------------------------------------------------------------------------
Corning Inc. ............................................................. 54,150 6,981,966
Milacron Inc. ............................................................ 17,200 264,450
Tyco International Ltd. .................................................. 31,100 1,209,012
----------
8,455,428
Metals & Mining -- 2.85%
- -----------------------------------------------------------------------------------------------------------------------
Alcoa Inc. ............................................................... 52,750 4,378,250
Potash Corporation Saskatchewan Inc. 10,500 505,969
----------
4,884,219
Misc. Financial Services -- 2.50%
- -----------------------------------------------------------------------------------------------------------------------
Citigroup Inc. ........................................................... 39,300 2,183,606
Federal National Mortgage
Association ............................................................ 33,600 2,097,900
----------
4,281,506
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
33
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
ENTERPRISE GROWTH AND INCOME FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares,
Contracts
or Principal
Amount Value
<S> <C> <C>
Multi-Line Insurance -- 1.24%
- ------------------------------------------------------------------------------
American General Corporation ........... 1,100 $ 83,462
American International Group Inc. ...... 18,838 2,036,859
------------
2,120,321
Oil Services -- 0.61%
- ------------------------------------------------------------------------------
Halliburton Company .................... 9,100 366,275
Schlumberger Ltd. ...................... 10,800 607,500
Transocean Sedco Forex Inc. ............ 2,091 70,437
------------
1,044,212
Pharmaceuticals -- 4.30%
- ------------------------------------------------------------------------------
Bristol-Myers Squibb Company ........... 31,210 2,003,292
Elan Corporation (ADR) (a) ............. 62,950 1,857,025
Johnson & Johnson ...................... 22,350 2,081,344
Merck & Company Inc. ................... 12,810 859,071
Pfizer Inc. ............................ 17,400 564,412
------------
7,365,144
Printing & Publishing -- 0.04%
- ------------------------------------------------------------------------------
McGraw-Hill Companies Inc. ............. 1,200 73,950
Property-Casualty Insurance -- 0.19%
- ------------------------------------------------------------------------------
Allstate Corporation ................... 13,700 328,800
Retail -- 7.01%
- ------------------------------------------------------------------------------
CVS Corporation ........................ 52,750 2,106,703
Federated Department Stores Inc. (a) ... 21,200 1,071,925
Safeway Inc. (a) ....................... 129,900 4,619,569
Tiffany & Company ...................... 47,100 4,203,675
------------
12,001,872
Savings and Loan -- 0.89%
- ------------------------------------------------------------------------------
Washington Mutual Inc. ................. 58,400 1,518,400
Technology -- 0.12%
- ------------------------------------------------------------------------------
Texas Instruments Inc. ................. 2,150 208,281
Telecommunications -- 9.30%
- ------------------------------------------------------------------------------
GTE Corporation ........................ 7,700 543,331
Lucent Technologies Inc. ............... 25,466 1,905,175
Nortel Networks Corporation ............ 110,360 11,146,360
QUALCOMM Inc. (a) ...................... 80 14,090
SBC Communications Inc. ................ 27,500 1,340,625
Tellabs Inc. (a) ....................... 15,000 962,813
------------
15,912,394
Transportation -- 1.18%
- ------------------------------------------------------------------------------
FDX Corporation (a) .................... 49,450 2,024,359
------------
Total Common Stocks
(Identified cost $109,705,555).............................. 155,106,550
- -------------------------------------------------------------- ------------
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares,
Contracts
or Principal
Amount Value
<S> <C> <C>
Convertible Preferred Stocks -- 0.27%
- -------------------------------------------------------------------------------
Misc. Financial Services -- 0.27%
- -------------------------------------------------------------------------------
Kmart Financing (a) .................... 10,500 $ 459,375
------------
Total Convertible Preferred Stocks
(Identified cost $635,930).............................. 459,375
- -------------------------------------------------------------------------------
Commercial Paper -- 8.15%
- -------------------------------------------------------------------------------
Exxon Asset Management Company
6.47%, due 01/06/00 .................. $4,000,000 3,996,406
Ford Motor Credit Company
6.57%, due 01/07/00 .................. 7,000,000 6,992,335
Questar Corporation
5.10%, due 01/03/11 .................. 2,000,000 1,999,433
Wisconsin Public Service Corporation,
5.35% due 01/10/00 ................... 960,000 958,716
------------
Total Commercial Paper
(Identified cost $13,946,890)................................. 13,946,890
- ---------------------------------------------------------------- --------------
Repurchase Agreement -- 0.68%
- -------------------------------------------------------------------------------
State Street Bank & Trust Repurchase
Agreement, 2.50% due 01/03/00
Collateral: U.S. Treasury Note
$1,170,000, 6.625% due 03/31/02
Value $1,217,483 ..................... 1,172,000 1,172,000
------------
Total Repurchase Agreement
(Identified cost $1,172,000)................................... 1,172,000
- -------------------------------------------------------------------------------
Call Options Written -- (0.02%)
- -------------------------------------------------------------------------------
Nortel Networks Corporation, expires
January 2000, $95..................... 20 (19,750)
Nortel Networks Corporation, expires
March 2000, $95....................... 10 (14,500)
------------
Total Call Options Written
(Premiums received $20,224)................................... (34,250)
- ---------------------------------------------------------------- --------------
Total Investments, Net
(Identified cost $125,460,375)................................ $170,650,565
Other Assets Less Liabilities -- 0.31% ....................... 530,930
------------
Net Assets -- 100% ........................................... $171,181,495
- -------------------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
(ADR) American Depository Receipt.
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
34
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- ------- -------------
ENTERPRISE EQUITY INCOME FUND
- ------- -------------
1740 Advisers, Inc.
New York, New York
Investment Management
1740 Advisers has been Fund Manager to the Enterprise Equity Income Fund since
its inception. 1740 Advisers is a member of The MONY Group, Inc. (NYSE: MNY)
and manages more than $2 billion for institutional clients and its normal
investment minimum is $20 million.
Investment Objective
The objective of the Enterprise Equity Income Fund is to seek a combination of
growth and income to achieve an above-average and consistent total return.
Investment Strategies
The Equity Income Fund invests primarily in dividend-paying U.S. common stocks.
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 average dividend yield. The
stock must be sold within two quarters after its dividend yield falls below that
of the S&P average. The effect of this discipline is that a stock will be sold
if increases in its annual dividends do not keep pace with increases in its
market price.
1999 Performance Review
Technology and telecom, including Internet-related stocks, were the major focus
for much of 1999. Basic materials and capital goods joined tech as the only
outperformers for the year. The Fund could not own most technology stocks due to
little or no dividend yield, but was overweight in the cyclicals.
The technology sector was the only game in town for much of the year. There was
good reason for this: investors viewed these companies as being able to grow
earnings without the need to raise prices in the no-pricing power environment
that many other companies found themselves. These are great companies with very
attractive future opportunities and markets, but as happens from time to time,
valuations can run ahead of reality. Many investors now believe that it is easy
to get rich: buy technology and the Internet. There is usually a problem
somewhere down the road when things seem so evident and easy.
The popular coverages are now heavily influenced by technology due to the strong
outperformance of these stocks. The average company had much more modest returns
in 1999. Many industries and stocks were flat or down for the year, and many
experienced bear market size declines. The market risk going forward may not be
in these areas, they will sell off some with the rest of the market, but are not
as extended as the technology-related names.
The market has had a tremendous unprecedented move -- five straight 20 percent
plus years, and 1740 Advisers believes a correction is both needed and healthy.
Some broadening of the market away from the single-minded focus on technology
would also be very healthy. Many companies are selling at valuations that are
much more moderate and at a discount, not only from the leaders, but also from
the averages themselves.
THE ENTERPRISE Group of Funds, Inc.
35
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
[CHART APPEARS HERE]
Lipper
Enterprise S&P Equity Income
Equity Income 500/Barra Fund
Fund - A Value Index Index
---------- --------------- ------------------
12/31/89 9526 10000 10000
1990 8745 9315 9488
1991 10805 11416 12020
1992 11721 12618 13191
1993 13297 14965 15149
1994 13233 14871 15010
1995 17652 20373 19488
1996 20805 24854 22990
1997 26647 32305 29234
1998 29612 37047 32677
1999 31744 41760 34045
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE EQUITY INCOME FUND - A ONE YEAR FIVE YEAR TEN YEAR
With Sales Charge 2.11% 17.97% 12.25%
Without Sales Charge 7.20% 19.12% 12.79%
S&P 500/Barra Value Index* 12.72% 22.94% 15.37%
Lipper Equity Income Fund Index* 4.19% 17.80% 13.03%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE EQUITY INCOME FUND - B ONE YEAR 5/1/95-12/31/99
With Sales Charge 1.55% 17.20%
Without Sales Charge 6.55% 17.44%
S&P 500/Barra Value Index* 12.72% 21.48%
Lipper Equity Income Fund Index* 4.19% 16.72%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE EQUITY INCOME FUND - C ONE YEAR 5/1/97-12/31/99
With Sales Charge 5.64% 13.21%
Without Sales Charge 6.64% 13.21%
S&P 500/Barra Value Index* 12.72% 19.03%
Lipper Equity Income Fund Index* 4.19% 13.85%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ONE YEAR 1/31/98-12/31/99
ENTERPRISE EQUITY INCOME FUND - Y 7.69% 9.61%
S&P 500/Barra Value Index* 12.72% 15.09%
Lipper Equity Income Fund Index* 4.19% 8.31%
The performance of Classes B, C and Y will vary from the performance of Class A
shown in the above line graph based on differences in sales charges and
expenses paid by shareholders investing in the different classes.
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
*The S&P 500/Barra Value Index is an unmanaged capitalization weighted index
composed of stocks of S&P 500 with low price-to-book ratios relative to the S&P
500 as a whole. It assumes the reinvestment of dividends and capital gains and
does not include any management fees or expenses. The Lipper Equity Income Fund
Index is an unmanaged index of the 30 largest funds, based on total year-end net
asset value, in the Lipper Equity Income Fund category. It assumes the
reinvestment of dividends and capital gains and does not include any management
fees or expenses. One cannot invest in an index.
Future Investment Strategy
The Equity Income Fund's strategy is emphasizing these neglected parts of the
market. Strong world growth may favor the energy and basic materials sectors.
Both may have above average earnings gains this year. The same is true of the
machinery and capital spending related industries. The drug stocks
underperformed in 1999 as growth investors moved toward the tech stocks. Drug
stocks and the telecommunication sectors may do better this year. These stocks
all have reasonable valuations of rising earnings, above average yields and they
have already experienced significant declines. They may also benefit from any
broadening of the market or increase in defensiveness by investors.
The views expressed in this report reflect those of the Fund Manager only
through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
THE ENTERPRISE Group of Funds, Inc.
36
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
ENTERPRISE EQUITY INCOME FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Common Stocks -- 97.89%
- -------------------------------------------------------------------------
Aerospace -- 3.77%
- -------------------------------------------------------------------------
Honeywell International Inc. ............. 35,000 $ 2,019,062
Northrop Grumman Corporation ............. 30,000 1,621,875
United Technologies Corporation .......... 40,000 2,600,000
------------
6,240,937
Automotive -- 2.61%
- -------------------------------------------------------------------------
Ford Motor Company ....................... 40,000 2,137,500
General Motors Corporation ............... 30,000 2,180,625
------------
4,318,125
Banking -- 6.56%
- -------------------------------------------------------------------------
Bank of America Corporation .............. 25,000 1,254,688
Bank of New York Company Inc. ............ 50,000 2,000,000
Chase Manhattan Corporation .............. 22,000 1,709,125
FleetBoston Financial Corporation ........ 45,000 1,566,563
J. P. Morgan & Company Inc. .............. 5,000 633,125
Mellon Financial Corporation ............. 55,000 1,873,437
Wells Fargo & Company .................... 45,000 1,819,687
------------
10,856,625
Chemicals -- 3.47%
- -------------------------------------------------------------------------
Dow Chemical Company ..................... 19,000 2,538,875
Du Pont (E. I.) de Nemours &
Company ................................ 30,000 1,976,250
Rohm & Haas Company ...................... 30,000 1,220,625
------------
5,735,750
Computer Hardware -- 0.89%
- -------------------------------------------------------------------------
Xerox Corporation ........................ 65,000 1,474,688
Conglomerates -- 2.34%
- -------------------------------------------------------------------------
Minnesota Mining & Manufacturing
Company ................................ 20,000 1,957,500
Textron Inc. ............................. 25,000 1,917,188
------------
3,874,688
Consumer Durables -- 0.81%
- -------------------------------------------------------------------------
Dana Corporation ......................... 45,000 1,347,188
Consumer Non-Durables -- 1.30%
- -------------------------------------------------------------------------
Avon Products Inc. ....................... 65,000 2,145,000
Consumer Products -- 3.63%
- -------------------------------------------------------------------------
Colgate-Palmolive Company ................ 40,000 2,600,000
Kimberly-Clark Corporation ............... 22,000 1,435,500
Procter & Gamble Company ................. 18,000 1,972,125
------------
6,007,625
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Crude & Petroleum -- 6.24%
- -------------------------------------------------------------------------
BP Amoco (ADR) ........................... 30,000 $ 1,779,375
Chevron Corporation ...................... 19,000 1,645,875
Exxon Mobil Corporation .................. 50,000 4,028,125
Royal Dutch Petroleum Company
(ADR) .................................. 25,000 1,510,937
Texaco Inc. .............................. 25,000 1,357,813
------------
10,322,125
Electrical Equipment -- 5.25%
- -------------------------------------------------------------------------
Emerson Electric Company ................. 30,000 1,721,250
General Electric Company ................. 45,000 6,963,750
------------
8,685,000
Energy -- 6.22%
- -------------------------------------------------------------------------
Atlantic Richfield Company ............... 17,000 1,470,500
Consolidated Natural Gas Company ......... 17,000 1,103,938
Duke Energy Corporation .................. 38,000 1,904,750
El Paso Energy Corporation ............... 45,000 1,746,562
Enron Corporation ........................ 40,000 1,775,000
Williams Companies Inc. .................. 75,000 2,292,187
------------
10,292,937
Food & Beverages & Tobacco -- 0.21%
- -------------------------------------------------------------------------
Philip Morris Companies Inc. ............. 15,000 347,813
Insurance -- 1.46%
- -------------------------------------------------------------------------
Cigna Corporation ........................ 30,000 2,416,875
Machinery -- 3.72%
- -------------------------------------------------------------------------
Caterpillar Inc. ......................... 38,000 1,788,375
Deere & Company .......................... 45,000 1,951,875
Pitney Bowes Inc. ........................ 50,000 2,415,625
------------
6,155,875
Manufacturing -- 1.10%
- -------------------------------------------------------------------------
Eaton Corporation ........................ 25,000 1,815,625
Metals & Mining -- 1.50%
- -------------------------------------------------------------------------
Alcoa Inc. ............................... 30,000 2,490,000
Misc. Financial Services -- 1.95%
- -------------------------------------------------------------------------
Citigroup Inc. ........................... 58,000 3,222,625
Multi-Line Insurance -- 0.85%
- -------------------------------------------------------------------------
Lincoln National Corporation ............. 35,000 1,400,000
Oil Services -- 4.69%
- -------------------------------------------------------------------------
Baker Hughes Inc. ........................ 45,000 947,812
Diamond Offshore Drilling Inc. ........... 40,000 1,222,500
Halliburton Company ...................... 30,000 1,207,500
Kerr-McGee Corporation ................... 30,000 1,860,000
Schlumberger Ltd. ........................ 20,000 1,125,000
Tidewater Inc. ........................... 35,000 1,260,000
Transocean Sedco Forex Inc. .............. 3,872 130,438
------------
7,753,250
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
37
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
ENTERPRISE EQUITY INCOME FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Paper & Forest Products -- 6.04%
- -------------------------------------------------------------------------
Bowater Inc. ............................. 35,000 $ 1,900,938
Georgia-Pacific Group .................... 50,000 2,537,500
International Paper Company .............. 60,000 3,386,250
Temple-Inland Inc. ....................... 33,000 2,175,937
------------
10,000,625
Pharmaceuticals -- 11.69%
- -------------------------------------------------------------------------
Abbott Laboratories ...................... 45,000 1,634,063
American Home Products Corporation 50,000 1,971,875
Baxter International Inc. ................ 30,000 1,884,375
Bristol-Myers Squibb Company ............. 30,000 1,925,625
Eli Lilly & Company ...................... 25,000 1,662,500
Johnson & Johnson ........................ 25,000 2,328,125
Merck & Company Inc. ..................... 34,000 2,280,125
Pharmacia & Upjohn Inc. .................. 38,000 1,710,000
Smithkline Beecham (ADR) ................. 32,000 2,062,000
Warner-Lambert Company ................... 23,000 1,884,562
------------
19,343,250
Printing & Publishing -- 1.12%
- -------------------------------------------------------------------------
McGraw-Hill Companies Inc. ............... 30,000 1,848,750
Property-Casualty Insurance -- 1.36%
- -------------------------------------------------------------------------
Chubb Corporation ........................ 40,000 2,252,500
Raw Materials -- 3.04%
- -------------------------------------------------------------------------
Phelps Dodge Corporation ................. 20,000 1,342,500
Reynolds Metals Company .................. 20,000 1,532,500
Weyerhaeuser Company ..................... 30,000 2,154,375
------------
5,029,375
Real Estate -- 2.08%
- -------------------------------------------------------------------------
Boston Properties Inc. ................... 25,000 778,125
Crescent Real Estate Equities Company 45,000 826,875
Equity Office Properties Trust ........... 40,000 985,000
Equity Residential Properties Trust ...... 20,000 853,750
------------
3,443,750
Telecommunications -- 12.10%
- -------------------------------------------------------------------------
AT&T Corporation ......................... 55,000 2,791,250
Bell Atlantic Corporation ................ 45,000 2,770,312
BellSouth Corporation .................... 48,000 2,247,000
Global Crossing Ltd. (a) ................. 55,000 2,750,000
GTE Corporation .......................... 32,000 2,258,000
SBC Communications Inc. .................. 55,000 2,681,250
Sprint Corporation ....................... 35,000 2,355,938
U. S. West Inc. .......................... 30,000 2,160,000
------------
20,013,750
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Utilities -- 1.89%
- -------------------------------------------------------------------------
CMS Energy Corporation ................... 50,000 $ 1,559,375
Edison International ..................... 60,000 1,571,250
------------
3,130,625
------------
Total Common Stocks
(Identified cost $127,702,464)......................... 161,965,376
- -------------------------------------------------------------------------
Commercial Paper -- 2.11%
- -------------------------------------------------------------------------
Chevron USA Inc.
5.00% due 01/05/00 ..................... $1,700,000 1,699,056
Windmill Funding Corporation
6.49% due 01/04/00 ..................... 1,800,000 1,799,026
------------
Total Commercial Paper
(Identified cost $3,498,082)......................... 3,498,082
- -------------------------------------------------------------------------
Repurchase Agreement -- 0.11%
- -------------------------------------------------------------------------
State Street Bank & Trust Repurchase
Agreement, 2.50% due 01/03/00
Collateral: U.S. Treasury Note
$180,000, 7.00% due 07/15/06,
Value $195,946 ......................... 183,000 183,000
------------
Total Repurchase Agreement
(Identified cost $183,000)........................... 183,000
- -------------------------------------------------------------------------
Total Investments
(Identified cost $131,383,546)....................... $165,646,458
Other Assets Less Liabilities -- (0.11)% ............ (186,488)
------------
Net Assets -- 100% .................................. $165,459,970
- -------------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
(ADR) American Depository Receipt.
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
38
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- --------------------------------------------------------------------------------
<PAGE>
- ------- -------------
ENTERPRISE INTERNATIONAL GROWTH FUND
- ------- -------------
Vontobel USA Inc.
New York, NY
Investment Management
Vontobel USA became portfolio manager on April 1, 1999. Vontobel manages
approximately $2 billion and its normal investment minimum is $10 million.
Investment Objective
The objective of the Enterprise International Growth Fund is to seek capital
appreciation.
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 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 among European, Australian and Far East ("EAFE") markets.
1999 Performance Review
Vontobel became the portfolio manager on April 1, 1999. The massive sell-off of
securities necessary to align the portfolio with Vontobel's investment strategy
had a negative impact on performance early in the second quarter. Losses were
sustained while selling many securities that did not meet Vontobel's investment
criterion, largely due to company fundamentals.
Beginning with the third quarter, there was an underweight in Japan, which had a
modestly negative impact on absolute returns, as Japan outperformed Europe in
dollar terms. The Fund's underweight in the Japanese banking sector also had a
modestly negative impact on returns. Security selection in Japan made a positive
contribution to performance, with names like Murata Manufacturing Company, Ltd.,
Rohm Company, Ltd., NTT Data Corporation, and Takeda Chemical Industries posting
significant upticks for the third quarter. The decision to leave the yen
position unhedged had a positive impact on returns, allowing investors to
participate in the growing international strength of the currency.
A European overweight in the Fund had a slight negative impact on absolute
returns. The Fund's European telecommunications stocks, following an upward
trend in this sector of the market, made a significant positive contribution to
performance. The Fund's holdings represent dominant franchises and market
leaders in the telecommunications industry and were selected not on a sector
basis but, in keeping with Vontobel's investment discipline, because of the
strength of the businesses and the historical track records of consistent
earnings growth. A partial hedge against the Euro detracted from returns. This
hedge was reduced substantially.
The highest gains in 1999 were realized by companies in emerging Asia. Because
Vontobel's style views emerging markets and international developed markets as
separate asset classes, the Fund does not generally have emerging markets
exposure. This lack of exposure to emerging Asia meant a lack of additional
returns above what the EAFE countries provided. Japan was the best performing
EAFE market and the Fund's exposure to Japan added to performance, with many
long-term core holdings, such as Murata Manufacturing Company, Ltd., and Rohm
Company, Ltd., providing returns up to 40 percent. Stocks such as NTT Data
Corporation and Hikari Tsushin, Inc., gave the Fund lucrative exposure to the
fast-growing mobile telecommunications market in Japan, and they present
excellent investment opportunities.
Stock picking in Europe had a positive impact on returns. Many European
holdings, such as Mannesmann and Vodafone AirTouch, provided performance well in
excess of 20 percent for the year. Telecomm stocks performed extraordinarily
well and many of the Fund's holdings exceeded expectations. The Fund's weighting
of over 10 percent in European telecomm paid off nicely in 1999. Hedges against
the Euro, which were placed at various points throughout the
THE ENTERPRISE Group of Funds, Inc.
39
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
year, had a net positive impact on returns. The Fund's overweight to Europe
versus Asia had been a liability in the third quarter. In the fourth quarter,
however, the Fund benefited from Europe's recovery, as the European overweight
had a net positive effect on fourth quarter performance.
GROWTH OF A $10,000 INVESTMENT
[CHART APPEARS HERE]
Enterprise Lipper
International MSCI International
Growth EAFE Fund
Fund - A Index Index
---------- --------------- ------------------
12/31/89 10000 10000 9527
1990 8763 7655 8060
1991 9917 8583 9100
1992 9492 7538 9108
1993 13212 9993 12274
1994 13114 10771 11928
1995 14428 11978 13738
1996 16510 12702 15430
1997 17707 12928 16163
1998 19948 15514 18471
1999 27496 19697 25816
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE INTERNATIONAL GROWTH FUND - A ONE YEAR FIVE YEAR TEN YEAR
With Sales Charge 33.13% 15.57% 9.95%
Without Sales Charge 39.76% 16.70% 10.48%
MSCI EAFE Index* 26.96% 12.83% 7.01%
Lipper International Fund Index* 37.83% 15.96% 10.64%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE INTERNATIONAL GROWTH FUND - B ONE YEAR 5/1/95-12/31/99
With Sales Charge 34.02% 16.88%
Without Sales Charge 39.02% 17.12%
MSCI EAFE Index* 26.96% 12.47%
Lipper International Fund Index* 37.83% 16.89%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE INTERNATIONAL GROWTH FUND - C ONE YEAR 5/1/97-12/31/99
With Sales Charge 37.95% 19.59%
Without Sales Charge 38.95% 19.59%
MSCI EAFE Index* 26.96% 18.34%
Lipper International Fund Index* 37.83% 19.74%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ONE YEAR 7/31/95-12/31/99
ENTERPRISE INTERNATIONAL GROWTH FUND - Y 40.39% 18.05%
MSCI EAFE Index* 26.96% 12.43%
Lipper International Fund Index* 37.83% 16.16%
The performance of Classes B, C and Y will vary from the performance of Class A
shown in the above line graph based on differences in sales charges and expenses
paid by shareholders investing in the different classes.
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
*The Morgan Stanley Capital International Europe, Australia and Far East Index
(MSCI EAFE) is an unmanaged index composed of the stocks of approximately 1,032
companies traded on 20 stock exchanges from around the world, excluding the USA,
Canada, and Latin America. It assumes the reinvestment of dividends and capital
gains and excludes fees or expenses. The Lipper International Fund Index is an
unmanaged index of the 30 largest funds, based on total year-end net asset
value, in the Lipper International Fund category. It assumes the reinvestment of
dividends and capital gains and does not include any management fees or
expenses. One cannot invest in an index.
THE ENTERPRISE Group of Funds, Inc.
40
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Future Investment Strategy
Vontobel believes there is great value left in Europe. The primary focus in
European holdings is to invest in market leaders in their respective industries,
which remain attractive business and continue to exhibit attractive valuations
and good franchises. The earnings progression remains strong, suggesting a
potentially positive trend and growth close to 18 percent in the year 2000.
Market P/Es of 17x support the belief that there may be multiple economic
expansions.
After last year's initial euphoria, Vontobel expects the Euro to be trading
close to parity in the coming months. This is not a negative for Europe, either
in terms of future profits or for macro factors such as inflation. In fact, it
may provide a boost in the export markets for many firms.
In Asia, particularly Japan, there are a lot of good businesses that were
penalized with unsatisfactorily low returns. Currently, Asia is at a turning
point where Vontobel sees the ability to give higher returns on capital
employed. This along with other factors could lead investors to put more money
in Asia in the new year. The strong yen is probably a reflection of the strength
of the Japanese economy. Belief in real restructurings and a positive worldview
on the Japanese economy have most likely been major factors contributing to the
rise of the yen in 1999.
As with all international funds, the Enterprise International Growth Fund
carries additional risks associated with possibly less stable foreign
securities, currencies, lack of uniform accounting standards and political
instability.
The views expressed in this report reflect those of the Fund Manager only
through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
Industry classifications for the portfolio as a percentage of total market value
at December 31, 1999 is as follows:
(unaudited)
<TABLE>
<CAPTION>
Industry
<S> <C>
Aerospace & Military Technology 1.67%
Appliances & Household Durables 3.04%
Automobiles 1.29%
Banking 6.55%
Beverages & Tobacco 1.87%
Broadcasting & Publishing 3.31%
Building Materials & Components 2.02%
Business & Public Service 13.45%
Data Processing & Reproduction 2.56%
Electrical & Electronics 1.10%
Electronic Components, Instruments 11.50%
Energy Sources 2.35%
Financial Services 3.75%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Food & Household Products 1.82%
Health & Personal Care 6.38%
Industrial Components 0.80%
Insurance 7.68%
Machinery & Engineering 0.45%
Merchandising 3.47%
Multi-Industry 0.93%
Real Estate 0.70%
Recreation, Other Consumer Goods 1.38%
Telecommunications 15.30%
Textiles & Apparels 0.96%
Cash/Other 5.67%
------
Total 100.00%
======
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
41
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
ENTERPRISE INTERNATIONAL GROWTH FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Common Stocks -- 92.10%
- -------------------------------------------------------------------
Australia -- 0.45%
- -------------------------------------------------------------------
Telstra Corporation Ltd. ............. 87,000 $ 472,916
Finland -- 3.37%
- -------------------------------------------------------------------
Nokia Corporation (ADR) .............. 13,200 2,508,000
Sonera Yhtyma ........................ 15,300 1,048,817
-----------
3,556,817
France -- 8.21%
- -------------------------------------------------------------------
Altran Technologies .................. 2,900 1,752,788
Axa .................................. 8,000 1,115,338
Cap Gemini ........................... 1,298 329,500
CGIP ................................. 15,020 983,475
Dassault Systemes .................... 11,200 729,966
L'Oreal .............................. 950 762,236
Louis Vuitton Moet Hennessy .......... 1,300 582,359
Scor ................................. 20,600 908,911
Total Fina (Class B) ................. 7,700 1,027,749
Valeo ................................ 6,000 462,978
-----------
8,655,300
Germany -- 3.90%
- -------------------------------------------------------------------
Allianz .............................. 2,200 739,092
Bayerische Motoren Werke ............. 26,000 793,590
Mannesmann ........................... 7,100 1,712,948
Muenchener Rueckvers ................. 3,400 862,412
-----------
4,108,042
Hong Kong -- 1.86%
- -------------------------------------------------------------------
Dah Sing Financial Group ............. 124,000 494,501
SmarTone Telecommunications
Holdings Ltd. ...................... 153,000 738,084
Sun Hung Kai Properties Ltd. ......... 70,000 729,401
-----------
1,961,986
Ireland -- 1.74%
- -------------------------------------------------------------------
Allied Irish Banks ................... 57,800 657,940
CRH .................................. 21,400 462,404
Elan Corporation (ADR) (a) ........... 24,000 708,000
-----------
1,828,344
Italy -- 2.43%
- -------------------------------------------------------------------
ENI .................................. 105,000 577,514
Pirelli .............................. 142,000 389,794
Telecom Italia ....................... 57,200 806,686
TIM .................................. 70,000 782,005
-----------
2,555,999
Japan -- 28.00%
- -------------------------------------------------------------------
Asatsu-DK Inc. ....................... 10,000 675,345
Fuji Photo Film Company .............. 8,000 292,062
Hikari Tsushin Inc. .................. 800 1,605,168
Honda Motor Company Ltd. ............. 15,000 557,894
Hoya Corporation ..................... 9,000 709,112
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Mikuni Coca-Cola Bottling
Company Ltd. ....................... 17,000 $ 297,837
Murata Manufacturing Company Ltd...... 15,000 3,523,539
Nichiei Company Ltd. ................. 13,500 293,335
Nintendo Company Ltd. ................ 7,000 1,163,355
Nippon Telegraph & Telephone
Corporation ........................ 5 85,642
Nomura Securities Company Ltd. ....... 18,000 325,046
NTT Data Corporation ................. 80 1,840,071
NTT Mobile Communication
Network Inc. ....................... 92 3,538,808
Rohm Company Ltd. .................... 9,000 3,699,716
Ryohin Keikaku Company Ltd. .......... 5,000 1,003,719
Secom Company Ltd. ................... 6,000 660,664
Seven Eleven Japan ................... 7,000 1,109,915
Shohkoh Fund ......................... 2,500 989,772
Sony Corporation ..................... 8,000 2,372,516
Takeda Chemical Industries ........... 30,000 1,482,823
Tokyo Broadcasting System Inc. ....... 31,000 1,049,819
Tokyo Electron Ltd. .................. 13,000 1,781,345
Yasuda Fire & Marine Insurance
Company Ltd. ....................... 81,000 458,236
-----------
29,515,739
Malaysia -- 0.02%
- -------------------------------------------------------------------
Malayan Banking Berhad ............... 7,000 24,868
Netherlands -- 8.45%
- -------------------------------------------------------------------
Aegon ................................ 15,291 1,477,185
Aegon (ADR) .......................... 11,569 1,104,840
ASM Lithography Holdings (a) ......... 14,000 1,555,549
Getronics ............................ 16,700 1,332,361
Heineken ............................. 16,200 790,169
Kempen & Company ..................... 13,200 525,232
Philips Electronics .................. 5,992 814,865
Vendex KBB ........................... 27,400 728,676
Wolters Kluwer ....................... 17,200 582,168
-----------
8,911,045
Norway -- 0.45%
- -------------------------------------------------------------------
Tomra Systems ........................ 27,900 473,856
Singapore -- 1.58%
- -------------------------------------------------------------------
Datacraft Asia Ltd. .................. 53,000 439,900
Singapore Press Holdings Ltd. ........ 56,388 1,222,220
-----------
1,662,120
Spain -- 0.59%
- -------------------------------------------------------------------
Telefonica ........................... 25,000 624,557
Sweden -- 7.01%
- -------------------------------------------------------------------
A Com (a) ............................ 23,600 538,065
Assa Abloy (Class B) ................. 118,260 1,660,838
Connecta (a) ......................... 7,500 255,612
Ericsson LM (Class B) ................ 18,000 1,157,128
Framtidsfabriken (Class A) (a) ....... 3,100 561,053
Hennes & Mauritz (Class B) ........... 45,600 1,527,324
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
42
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
ENTERPRISE INTERNATIONAL GROWTH FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Modern Time Group (Class B) (a) ......... 12,500 $ 619,932
Securitas (Class B) ..................... 35,200 637,067
Svenska Handelsbanken Series A .......... 34,000 427,547
------------
7,384,566
Switzerland -- 7.04%
- ------------------------------------------------------------------------
Credit Suisse Group ..................... 10,400 2,067,198
Nestle .................................. 440 806,054
Pharma Vision 2000 (a) .................. 500 354,833
Roche Holdings .......................... 34 555,172
Roche Holdings Genusschein .............. 220 2,611,317
Schweizerische Rueckversicherungs-
Gesellschaft .......................... 500 1,027,130
------------
7,421,704
United Kingdom -- 17.00%
- ------------------------------------------------------------------------
Amvescap ................................ 80,000 930,413
BP Amoco (ADR) .......................... 14,600 865,962
British Telecom ......................... 42,000 1,017,639
Capita Group ............................ 50,300 914,058
CGU ..................................... 23,900 385,671
Compass Group ........................... 134,500 1,846,692
Diageo .................................. 37,000 295,245
Dixons Group ............................ 40,500 974,753
Hays .................................... 56,600 903,289
HSBC Holdings ........................... 90,100 1,248,721
Invensys ................................ 140,900 744,944
Lloyds TSB Group ........................ 59,200 735,362
Misys ................................... 94,100 1,460,717
Next .................................... 43,500 417,377
Provident Financial ..................... 38,400 426,749
Rentokil Initial ........................ 183,100 665,463
Schroders ............................... 28,200 567,571
Securicor ............................... 41,900 106,936
Smithkline Beecham ...................... 45,800 580,749
Vodafone AirTouch ....................... 225,570 1,124,389
WPP Group ............................... 109,000 1,707,857
------------
17,920,557
------------
Total Common Stocks
(Identified cost $68,342,394)........................ 97,078,416
- ------------------------------------------------------- ------------
Preferred Stock -- 1.14%
- ------------------------------------------------------------------------
Germany -- 1.14%
- ------------------------------------------------------------------------
SAP ..................................... 2,000 1,204,790
------------
Total Preferred Stock
(Identified cost $633,281)........................... 1,204,790
- ------------------------------------------------------- ------------
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Convertible Security -- 0.38%
- ------------------------------------------------------------------------
United States -- 0.38%
- ------------------------------------------------------------------------
Salomon Smith Barney Holdings Inc.
"QUANTO", convertible on
5/09/00 (a) ........................... $ 400,000 $ 400,108
------------
Total Convertible Security
(Identified cost $400,000)............................. 400,108
- ------------------------------------------------------- ----------------
Warrants -- 0.31%
- ------------------------------------------------------------------------
Switzerland -- 0.31%
- ------------------------------------------------------------------------
Zuercher Kantonalbank Call Warrant
Expiration 09/15/00 (a)(e) ............ 425,000 330,968
------------
Total Warrants
(Identified cost $272,686).......................... 330,968
- ------------------------------------------------------------------------
Repurchase Agreements -- 4.78%
- ------------------------------------------------------------------------
State Street Bank & Trust Repurchase
Agreement, 2.50% due 01/03/00
Collateral: U.S. Treasury Note
$5,255,000, 5.50% due 05/31/03,
Value $5,168,601....................... 5,041,000 5,041,000
------------
Total Repurchase Agreements
(Identified cost $5,041,000)....................... 5,041,000
- ------------------------------------------------------------------------
Total Investments
(Identified cost $74,689,361).......................... $104,055,282
Other Assets Less Liabilities -- 1.29% ................ 1,355,707
------------
Net Assets -- 100% .................................... $105,410,989
- ------------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
(e) The warrants entitle the fund to purchase 1 share of Credit Suisse Group
for every 40 warrants held and 290 CHF until September 15, 2000.
(ADR) American Depository Receipt.
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
43
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- ------------- -------
ENTERPRISE INTERNET FUND
- ------------- -------
Fred Alger Management, Inc.
New York, New York
Investment Management
Fred Alger Management, Inc., which has approximately $17 billion in assets
under management, became the manager of the fund on July 1, 1999, the fund's
inception date. Alger's normal investment minimum is $5 million.
Investment Objective
Long-term capital appreciation
Investment Strategies
Under normal conditions, the Internet Fund will invest at least 65 percent of
its assets in the equity securities of companies in the Internet, Intranet and
"high tech" sectors. In choosing which companies' stock the Fund should
purchase, the Fund Manager invests in those companies listed on a U.S.
securities exchange or NASDAQ which are engaged in the research, design,
development or manufacturing, or engaged to a significant extent in the business
of distributing products, processes or services for use with Internet or
Intranet related businesses. The Fund may also invest in other "high tech"
companies. The Internet is a world-wide network of computers designed to permit
users to share information and transfer data quickly and easily. The World Wide
Web ("WWW"), which is a means of graphically interfacing with the Internet, is a
hyper-text based publishing medium containing text, graphics, interactive
feedback mechanisms and links within WWW documents and to other WWW documents.
An Intranet is the application of WWW tools and concepts to a company's internal
documents and databases. Other "high tech" companies may include firms in the
computer, communication, video, electronic, office and factory automation and
robotic sectors.
1999 Performance Review
The birth of the Enterprise Internet Fund took place at the start of the third
quarter, a period during which the market experienced widespread weakness. After
peaking in mid-July, the S&P 500 began a downward trend that resulted in a -6.25
percent return for the quarter. Only gains posted in the technology sector
helped to buoy the double-digit losses suffered by consumer staples, financials
and transportation stocks and prevented the S&P 500 from slipping even further.
Heavy losses were evident in other indices in the third quarter, including the
S&P MidCap 400 Index, -8.40 percent, and the Russell 2000 Index, -6.64 percent.
A variety of bearish indicators also appeared. On August 24, the Federal Reserve
raised both the Fed Funds rate and the discount rate by 0.25 percent. During
September, the Dow broke below the key 10,400 support level, the S&P 500 broke
below its 200-day moving average line and the advance-decline line continued to
be very weak. Technology stocks also finally broke down during the last month of
the third quarter, leading the market downward.
After an anemic third quarter, however, domestic equity markets bounced back in
vigorous fashion. Growth stocks continued to significantly outperform value
stocks, and technology companies persisted as the clear market leaders. And
while large cap stocks continued to perform well, their smaller counterparts
were the obvious market standouts. Most major equity indices across all market
capitalizations generated strong double-digit returns during the final three
months of the year, ensuring that 1999 was yet another successful year for stock
investors.
1999 was a particularly good year for investors in the Fund. Fortunately, the
Fund was well positioned to benefit from the strong performance of certain
segments of the market. Alger's growth stock philosophy was of great benefit
during a year in which value severely underperformed growth.
In addition, the Fund was heavily weighted in technology companies throughout
the year. Stocks such as Yahoo!, Microsoft and America Online fueled much of the
Fund's gains. Technology stocks were the clear market leaders in 1999, thus
making the Fund extremely well positioned for the strong bull market.
Specifically, the boom in Internet
THE ENTERPRISE Group of Funds, Inc.
44
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
stocks was of great benefit to the Fund. Exceptional stock picking and a number
of superb July IPO allocations also account for the excellent performance.
The returns generated by the Fund were heavily impacted by the inclusion of
numerous IPOs during the month of July. Without exception, all of the IPO
allocations during July produced positive returns for the Fund. In many cases
these returns were exceptionally high, and in many cases large percentages of
the IPO allocations were eliminated from the Fund within a day or two of their
purchase. Examples of IPO allocations that more than doubled in price and were
completely or partially liquidated within two days of purchase include:
Efficient Networks Inc., Gadzoox Networks Inc., and Drugstore.com Inc.
In total, the IPOs accounted for virtually all of the Fund's gains of 65.2
percent during the month of July in what was otherwise an anemic month for
technology stocks. Better than normal IPO allocations for Fred Alger Management
and unusually strong IPO performance help to account for the tremendous returns.
Also, the relatively small asset size of the Fund during its first month of
existence greatly exaggerated the impact of IPOs on performance. The exceptional
returns produced by the Fund during the month of July were a one-time anomaly
and will be virtually impossible to reproduce.
IPOs did not impact the returns generated by the Fund after July 31, 1999. No
new IPOs were added to the Fund after the end of July. Therefore, August,
September and fourth quarter return figures are IPO-free.
[GRAPHIC]
www.enterprisefunds.com
THE ENTERPRISE Group of Funds, Inc.
45
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- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
[CHART APPEARS HERE]
Enterprise S&P Lipper
Internet 500 Science & Technology
Fund - A Index Index
----------------- ----- --------------------
7/1/99 9523 10000 10000
12/31/99 30551 10770 16798
CUMULATIVE TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE INTERNET FUND - A 7/1/99-12/31/99
With Sales Charge 205.52%
Without Sales Charge 220.79%
S&P 500 Index* 7.70%
Lipper Science & Technology Index* 67.98%
CUMULATIVE TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE INTERNET FUND - B 7/1/99-12/31/99
With Sales Charge 215.09%
Without Sales Charge 220.09%
S&P 500 Index* 7.70%
Lipper Science & Technology Index* 67.98%
CUMULATIVE TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE INTERNET FUND - C 7/1/99-12/31/99
With Sales Charge 219.09%
Without Sales Charge 220.09%
S&P 500 Index* 7.70%
Lipper Science & Technology Index* 67.98%
CUMULATIVE TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE INTERNET FUND - Y 7/1/99-12/31/99
Cumulative Return 221.79%
S&P 500 Index* 7.70%
Lipper Science & Technology Index* 67.98%
The performance of Classes B, C and Y will vary from the performance of Class A
shown in the above line graph based on differences in sales charges and expenses
paid by shareholders investing in the different classes.
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
*The S&P 500 is an unmanaged index that includes the common stocks of 500
companies that tend to be leaders in important industries within the U.S.
economy. It assumes the reinvestment of dividends and distributions and does not
include any management fees or expenses. The Lipper Science & Technology Index
is an unmanaged index of the 30 largest funds, based on total year-end net asset
value, in the Lipper Science & Technology Fund category. It assumes the
reinvestment of dividends and capital gains and does not include any management
fees or expenses. One cannot invest in an index.
Future Investment Strategy
The economy of 2000 is likely to resemble the economy of 1999, but it will
probably not grow as rapidly. This is an inevitable by-product of higher
interest rates. Despite this, there are factors that may keep the economy moving
along at a decent rate: low unemployment, good wage gains, and positive
psychology. Inflation may remain subdued as a result of continually increasing
productivity and the slowing of economic growth. The flattening of oil prices
and the impact of the Internet on pricing may also help subdue inflation.
Interest rates may eventually fall, at some point, responding to the slowing
economy and the dropping inflation. Presently, interest rates are being held up
artificially by concerns about the actions of the Fed. If the Fed lays off,
interest rates may drop.
Corporate earnings may probably not be as strong in 2000 as in 1999. The
top-down forecast for S&P earnings is an increase of 10 percent, which is lower
than the 14 percent estimated for this year. It would be logical to assume that
the market will rise less vigorously as well.
THE ENTERPRISE Group of Funds, Inc.
46
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<PAGE>
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- --------------------------------------------------------------------------------
Should market conditions become neutral or favorable, Alger expects that the
Internet Fund may continue to outperform broad market averages. Technology
stocks may continue to do well next year, as this is one of the few areas of the
economy which is truly booming. Consequently, despite high valuation, rapidly
growing companies may remain the best place to invest, with IT companies in the
vanguard. Alger's reliance on comprehensive, in-house fundamental research may
ensure the Fund remains stocked with the most appealing growth investments in
the technology sector.
The Enterprise Internet Fund is a sector fund that focuses on equities in a
specific industry and therefore concentrates its investments in fewer stocks
within the industry than a typical common stock fund would. This strategy may
result in more volatility than the typical growth stock fund because while
individual company stock risk is reduced through diversification, industry risk
can be magnified. In addition, some Internet-related stocks have shown extreme
volatility, trading in a broad range of share prices daily.
The views expressed in this report reflect those of the Fund Manager only
through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
[GRAPHIC]
www.enterprisefunds.com
THE ENTERPRISE Group of Funds, Inc.
47
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<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
ENTERPRISE INTERNET FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Common Stocks -- 88.08%
- ------------------------------------------------------------------------
Advertising -- 2.52%
- ------------------------------------------------------------------------
DoubleClick Inc. (a) ..................... 26,200 $ 6,630,238
Broadcasting -- 1.39%
- ------------------------------------------------------------------------
EchoStar Communications Corporation
(Class A) (a) .......................... 37,500 3,656,250
Cable -- 0.63%
- ------------------------------------------------------------------------
Comcast Corporation (a) .................. 16,200 819,113
Cox Communications Inc.
(Class A) (a) .......................... 16,500 849,750
------------
1,668,863
Communications -- 4.03%
- ------------------------------------------------------------------------
Brocade Communications Systems
Inc. (a) ............................... 30,700 5,433,900
Cobalt Networks Inc. (a) ................. 47,700 5,169,487
------------
10,603,387
Computer Hardware -- 1.53%
- ------------------------------------------------------------------------
Cisco Systems Inc. (a) ................... 24,100 2,581,713
Dell Computer Corporation (a) ............ 28,200 1,438,200
------------
4,019,913
Computer Services -- 32.06%
- ------------------------------------------------------------------------
America Online Inc. (a) .................. 155,300 11,715,444
Ariba Inc. (a) ........................... 46,600 8,265,675
ASM Lithography Holding (a) .............. 7,800 887,250
At Home Corporation (a) .................. 70,000 3,001,250
CMGI Inc. (a) ............................ 12,000 3,322,500
CNET Inc. (a) ............................ 40,200 2,281,350
Critical Path Inc. (a) ................... 24,500 2,312,187
Digital Islands (a) ...................... 48,000 4,566,000
InfoSpace.Com Inc. (a) ................... 22,000 4,708,000
Inktomi Corporation (a) .................. 37,800 3,354,750
Internet Capital Group Inc. (a) .......... 38,600 6,562,000
McAfee.com Corporation (a) ............... 25,000 1,125,000
Redback Networks, Inc. (a) ............... 13,300 2,360,750
Sun Microsystems Inc. (a) ................ 47,800 3,701,512
Talk City Inc. (a) ....................... 47,500 1,240,938
VeriSign Inc. (a) ........................ 35,200 6,721,000
VerticalNet Inc. (a) ..................... 35,800 5,871,200
Yahoo! Inc. (a) .......................... 28,700 12,418,131
------------
84,414,937
Computer Software -- 23.49%
- ------------------------------------------------------------------------
Alteon WebSystems Inc. (a) ............... 20,600 1,807,650
Art Technology Group Inc. (a) ............ 25,000 3,203,125
Broadbase Software Inc. (a) .............. 22,000 2,475,000
Broadvision Inc. (a) ..................... 31,000 5,271,937
Commerce One, Inc. (a) ................... 33,000 6,484,500
Exodus Communications Inc. (a) ........... 82,800 7,353,675
InterNAP Network Services
Corporation (a) ........................ 20,000 3,460,000
Legato Systems Inc. (a) .................. 34,600 2,380,913
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Liberate Technologies (a) ................ 11,200 $ 2,878,400
Microsoft Corporation (a) ................ 59,100 6,899,925
Phone.Com Inc. (a) ....................... 56,600 6,562,062
RealNetworks Inc. (a) .................... 13,700 1,648,281
Red Hat Inc. (a) ......................... 11,000 2,323,750
Viador Inc. (a) .......................... 35,500 1,504,313
Vignette Corporation (a) ................. 46,600 7,595,800
------------
61,849,331
Electrical Equipment -- 0.44%
- ------------------------------------------------------------------------
Teradyne Inc.(a) ......................... 17,600 1,161,600
Electronics -- 7.40%
- ------------------------------------------------------------------------
Altera Corporation (a) ................... 20,400 1,011,075
Applied Micro Circuits
Corporation (a) ........................ 35,300 4,491,925
Broadcom Corporation (Class A) (a) ....... 13,300 3,622,587
Conexant Systems Inc. (a) ................ 44,500 2,953,688
PMC-Sierra Inc. (a) ...................... 27,200 4,360,500
SDL Inc. (a) ............................. 14,000 3,052,000
------------
19,491,775
Machinery -- 0.24%
- ------------------------------------------------------------------------
Applied Materials Inc. (a) ............... 4,900 620,769
Retail -- 4.46%
- ------------------------------------------------------------------------
Amazon.com Inc. (a) ...................... 27,400 2,085,825
eBay Inc. (a) ............................ 49,900 6,246,856
FreeMarkets Inc. (a) ..................... 10,000 3,413,125
------------
11,745,806
Technology -- 2.53%
- ------------------------------------------------------------------------
Linear Technology Corporation ............ 12,900 923,156
Network Appliance Inc. (a) ............... 45,600 3,787,650
Texas Instruments Inc. ................... 8,200 794,375
Xilinx Inc. (a) .......................... 25,200 1,145,813
------------
6,650,994
Telecommunications -- 5.50%
- ------------------------------------------------------------------------
Ciena Corporation (a) .................... 47,000 2,702,500
Efficient Networks Inc. (a) .............. 37,500 2,550,000
Lucent Technologies Inc. ................. 34,500 2,581,031
Next Level Communications Inc. (a) ....... 24,000 1,797,000
QUALCOMM Inc. (a) ........................ 13,600 2,395,300
Sycamore Networks Inc. (a) ............... 7,950 2,448,600
------------
14,474,431
Wireless Communications -- 1.86%
- ------------------------------------------------------------------------
Digital Microwave Corporation (a) ........ 60,000 1,406,250
Motorola Inc. ............................ 19,000 2,797,750
Nokia Corporation (ADR) .................. 3,700 703,000
------------
4,907,000
------------
Total Common Stocks
(Identified cost $146,407,938)..................... 231,895,294
- ------------------------------------------------------------------------
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
48
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<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
ENTERPRISE INTERNET FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Commercial Paper -- 10.11%
- -----------------------------------------------------------------
AES Hawaii Inc.
6.60% due 01/12/00 ............... $ 2,400,000 $ 2,395,160
Austra Corporation
7.07% due 01/10/00 ............... 2,000,000 1,996,465
Merrill Lynch & Company Inc. 5.55%
due 01/27/00 ..................... 8,500,000 8,465,929
Standard Life Assurance Company
6.45% due 01/12/00 ............... 10,000,000 9,980,291
Textron Financial Corporation
6.90% due 01/14/00 ............... 3,800,000 3,790,532
-----------
Total Commercial Paper
(Identified cost $26,628,377)................... 26,628,377
- -------------------------------------------------- -----------
Repurchase Agreement -- 1.04%
- -----------------------------------------------------------------
State Street Bank & Trust Repurchase
Agreement, 2.50% due 01/03/00
Collateral: U.S. Treasury Note
$2,725,000, 7.50% due 11/15/01,
Value $2,833,139 ................. 2,747,000 2,747,000
-----------
Total Repurchase Agreement
(Identified cost $2,747,000).................... 2,747,000
- -------------------------------------------------- -----------
</TABLE>
<TABLE>
<CAPTION>
Value
<S> <C>
Total Investments
(Identified cost $175,783,315).................. $261,270,671
Other Assets Less Liabilities -- 0.77% ......... 2,016,855
------------
Net Assets -- 100% ............................. $263,287,526
- ------------------------------------------------ ------------
</TABLE>
(a) Non-income producing security.
(ADR) American Depository Receipt.
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
49
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<PAGE>
- ------------- -------
ENTERPRISE GLOBAL FINANCIAL SERVICES FUND
- ------------- -------
Sanford C. Bernstein & Co., Inc.
New York, New York
Investment Management
Sanford C. Bernstein & Co., Inc., which has approximately $88 billion in assets
under management, became manager of the Fund on October 1, 1998, the Fund's
inception date. Bernstein's normal investment minimum is $5 million.
Investment Objective
The objective of the Enterprise Global Financial Services Fund is to seek
capital appreciation.
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 in 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 percent of its revenues or earnings from financial services
activities, or (ii) devoted at least 50 percent 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 brokerage; 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.
1999 Performance Review
Stock selection reduced relative returns for the year. Most significantly, the
Fund's defensive positioning in the U.S. detracted from performance. The Fund
was underweight investment banks and commercial banks in the U.S. because their
rich valuations reflected investor reliance on continued strong earnings and
revenue growth due to capital-markets activity; in Bernstein's view, this strong
level cannot be sustained, so the stocks represent considerable risk at current
prices. The Fund was overweight regional banks, which were much more
attractively valued and generally less exposed to a slow-down in capital markets
activity. In the second half of the year, however, the regional banks traded
down sharply on concerns about interest-margin compression. Bernstein believes
that this creates an opportunity: The bank's stock prices are lower, but
Bernstein's earnings forecasts for them are unchanged. Bernstein was already
assuming that banks' interest spreads would contract from recent levels and that
banks would have to charge off a somewhat higher percentage of loans than they
have had to during the recent economic boom. Interest-rate concerns have also
negatively impacted the Fund's insurance holdings, which tend to have large bond
portfolios and whose earnings are sensitive to changes in the inflation rate.
This has created an attractive opportunity in some well reserved insurance
companies that are poised to benefit from an improving pricing environment.
Concerns about falling profits in credit cards has continued to hurt Bank One's
stock price, while the stock price of First Union has suffered from concerns
about merger integration. In both these cases, Bernstein believes that the stock
market reaction has been severe and that even with potentially lower earnings,
these stocks trade at very attractive valuations.
Outside the U.S., the Fund's holdings in Italy and Japan outperformed on
excitement about ongoing consolidation and restructuring activity in the
financial services sector. In France, Germany, Hong Kong, the Netherlands,
Singapore, Switzerland and the U.K., the Fund's value stocks underperformed.
THE ENTERPRISE Group of Funds, Inc.
50
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<PAGE>
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- --------------------------------------------------------------------------------
Country selection enhanced relative performance primarily because of our
underweight position in Belgium and Ireland, two very narrow markets. This
premium was partly offset by our decision to invest in Canada. We invested in
Canada because it offers several very attractive value opportunities.
Currency management reduced relative performance: In a period when the U.S.
dollar was strengthening, the Fund's overweight position in foreign currencies
reduced returns.
GROWTH OF A $10,000 INVESTMENT
[CHART APPEARS HERE]
Enterprise S&P Lipper
Global Financial 500 Financial Services
Services Fund - A Index Fund Index
----------------- ----- ------------------
10/1/98 9523 10000 10000
12/31/98 11523 12129 11916
1999 10946 14680 11393
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE GLOBAL FINANCIAL SERVICES FUND - A ONE YEAR 10/1/98-12/31/99
With Sales Charge -9.50% 7.51%
Without Sales Charge -5.01% 11.79%
S&P 500 Index* 21.03% 35.88%
Lipper Financial Services Fund Index* -4.39% 10.98%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE GLOBAL FINANCIAL SERVICES FUND - B ONE YEAR 10/1/98-12/31/98
With Sales Charge -10.22% 7.90%
Without Sales Charge -5.50% 11.03%
S&P 500 Index* 21.03% 35.88%
Lipper Financial Services Fund Index* -4.39% 10.98%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE GLOBAL FINANCIAL SERVICES FUND - C ONE YEAR 10/1/98-12/31/98
With Sales Charge -6.26% 11.21%
Without Sales Charge -5.31% 11.21%
S&P 500 Index* 21.03% 35.88%
Lipper Financial Services Fund Index* -4.39% 10.98%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ONE YEAR 10/1/98-12/31/99
ENTERPRISE GLOBAL FINANCIAL SERVICES FUND - Y -4.51% 12.26%
S&P 500 Index* 21.03% 35.88%
Lipper Financial Services Fund Index* -4.39% 10.98%
The performance of Classes B, C and Y will vary from the performance of Class A
shown in the above line graph based on differences in sales charges and expenses
paid by shareholders investing in the different classes.
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
*The S&P 500 is an unmanaged index that includes the common stocks of 500
companies that tend to be leaders in important industries within the U.S.
economy. It assumes the reinvestment of dividends and distributions and does not
include any management fees or expenses. The S&P 500 Index replaces the S&P 500
Financial Services Index as the broad-based comparison to the Fund as it more
appropriately reflects the braod-based market. During 1999, an investment in the
above hypothetical account decreased by $577 compared to an increase of $2,551
and an increase of the $436 in the S&P 500 Index and the S&P Financial Services
Index, respectively. The Lipper Financial Services Fund Index is an unmanaged
index of the 10 largest funds, based on total year-end net asset value, in the
Lipper Financial Services Fund category. It assumes the reinvestment of
dividends and capital gains and does not include any management fees or
expenses. One cannot invest in an index.
THE ENTERPRISE Group of Funds, Inc.
51
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- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Future Investment Strategy
The financial services industry continues to offer an interesting investment
opportunity. Good long-term demand growth by baby boomers as well as
restructuring and M&A activity globally may continue to benefit shareholders. In
the near term, interest-rate concerns are hurting returns for financial services
stocks, particularly banks. Bernstein believes that this creates an opportunity,
because the stock prices are lower, but its earnings forecasts are unchanged.
Bernstein was already assuming that banks' interest spreads would contract from
recent levels and that banks would have to charge off a somewhat higher
percentage of loans than they have had to during the recent economic boom. Apart
from creating an attractive buying opportunity, lower prices may also cause a
quickening in the pace of M&A activity. Bernstein, however, does not forecast
transactions, although a value portfolio is likely to benefit from takeovers
over time. Value investing requires patience.
As with all global funds, the Enterprise Global Financial Services Fund carries
additional risks associated with possibly less stable foreign securities,
currencies, lack of uniform accounting standards and political instability.
The views expressed in this report reflect those of the Fund Manager only
through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
[GRAPHIC]
www.enterprisefunds.com
THE ENTERPRISE Group of Funds, Inc.
52
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<PAGE>
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PORTFOLIO OF INVESTMENTS
ENTERPRISE GLOBAL FINANCIAL SERVICES FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Common Stocks -- 67.94%
- ----------------------------------------------------------------------
Banking -- 32.28%
- ----------------------------------------------------------------------
Bank of America Corporation ............. 21,800 $1,094,087
Bank One Corporation .................... 18,000 577,125
Chase Manhattan Corporation ............. 5,200 403,975
First Union Corporation ................. 18,200 597,187
FleetBoston Financial Corporation ....... 18,314 637,556
J.P. Morgan & Company Inc. .............. 1,500 189,938
KeyCorp ................................. 18,000 398,250
National City Corporation ............... 19,900 471,381
PNC Bank Corporation .................... 10,100 449,450
Wells Fargo & Company ................... 8,850 357,872
----------
5,176,821
Finance -- 1.09%
- ----------------------------------------------------------------------
Household International Inc. ............ 4,700 175,075
Insurance -- 0.30%
- ----------------------------------------------------------------------
Jefferson-Pilot Corporation ............. 700 47,775
Life Insurance -- 1.29%
- ----------------------------------------------------------------------
Torchmark Corporation ................... 7,100 206,344
Misc. Financial Services -- 13.73%
- ----------------------------------------------------------------------
Ambac Financial Group Inc. .............. 6,100 318,344
American Express Company ................ 1,600 266,000
Citigroup Inc. .......................... 14,075 782,042
Countrywide Credit Industries Inc. ...... 500 12,625
Federal National Mortgage Association.... 8,600 536,962
MBIA Inc. ............................... 5,400 285,188
----------
2,201,161
Multi-Line Insurance -- 11.73%
- ----------------------------------------------------------------------
American General Corporation ............ 4,100 311,087
American International Group Inc. ....... 10,050 1,086,656
Hartford Financial Services Group Inc.... 5,100 241,613
Lincoln National Corporation ............ 1,300 52,000
SAFECO Corporation ...................... 7,600 189,050
----------
1,880,406
Property-Casualty Insurance -- 4.52%
- ----------------------------------------------------------------------
Allstate Corporation .................... 6,600 158,400
Chubb Corporation ....................... 7,600 427,975
St. Paul Companies Inc. ................. 4,100 138,119
----------
724,494
Savings and Loan -- 3.00%
- ----------------------------------------------------------------------
Golden West Financial Corporation ....... 10,500 351,750
Washington Mutual Inc. .................. 5,000 130,000
----------
481,750
----------
Total Common Stocks
(Identified cost $11,394,651).............................10,893,826
- ----------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Foreign Stocks -- 29.25%
- ----------------------------------------------------------------------
Banking -- 11.21%
- ----------------------------------------------------------------------
Austria -- 0.11%
- ----------------------------------------------------------------------
Bank Austria ............................ 300 $ 16,923
Canada -- 0.74%
- ----------------------------------------------------------------------
Bank of Nova Scotia Halifax ............. 2,500 53,776
National Bank of Canada ................. 5,100 65,362
France -- 0.66%
- ----------------------------------------------------------------------
Banque Nationale de Paris ............... 1,150 106,114
Germany -- 1.52%
- ----------------------------------------------------------------------
Commerzbank ............................. 5,400 198,277
IKB Deutsche Industriebank .............. 2,600 45,572
Italy -- 1.34%
- ----------------------------------------------------------------------
Banca Commerciale Italiana .............. 2,000 10,880
Banca Popolare Di Bergamo Credito
Varesino .............................. 3,000 69,386
Banca Popolare Di Milano ................ 5,000 38,934
San Paolo IMI ........................... 7,000 95,124
Japan -- 5.01%
- ----------------------------------------------------------------------
Bank of Iwate Ltd. ...................... 500 20,554
Eighteenth Bank Ltd. .................... 59,000 217,128
Kita-Nippon Bank Ltd. ................... 1,000 48,449
Mitsui Trust & Banking Company Ltd. ..... 94,000 212,528
Nanto Bank Ltd. ......................... 27,000 198,199
Tokai Bank Ltd. ......................... 15,000 94,548
Yamanashi Chuo Bank Ltd. ................ 3,000 12,039
Norway -- 0.09%
- ----------------------------------------------------------------------
Christiania Bank Og Kreditkasse ......... 2,000 9,866
Sparebanken ............................. 200 4,645
Portugal -- 0.16%
- ----------------------------------------------------------------------
Banco Espirito Santo .................... 900 25,295
Singapore -- 0.48%
- ----------------------------------------------------------------------
Overseas Union Bank Ltd. ................ 7,308 42,782
Singapore Land Ltd. ..................... 6,000 15,779
United Overseas Bank .................... 2,112 18,641
Spain -- 1.10%
- ----------------------------------------------------------------------
Argentaria .............................. 7,500 176,261
----------
1,797,062
Insurance -- 2.15%
- ----------------------------------------------------------------------
United Kingdom -- 2.15%
- ----------------------------------------------------------------------
Royal & Sun Alliance Insurance Group .... 46,090 345,444
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
53
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<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
ENTERPRISE GLOBAL FINANCIAL SERVICES FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Misc. Financial Services -- 9.19%
- ------------------------------------------------------------------------
Australia -- 0.95%
- ------------------------------------------------------------------------
Westfield Trust New Shares ............... 2,763 $ 5,333
Westfield Trust Units .................... 74,500 146,239
France -- 0.23%
- ------------------------------------------------------------------------
Simco .................................... 450 36,423
Germany -- 0.70%
- ------------------------------------------------------------------------
Deutsche Pfandbriefbank .................. 1,500 112,118
Hong Kong -- 1.19%
- ------------------------------------------------------------------------
Amoy Properties Ltd. ..................... 118,000 99,428
Dao Heng Bank Group Ltd. ................. 8,000 41,268
Hang Lung Development Company Ltd. 44,000 49,810
Japan -- 1.68%
- ------------------------------------------------------------------------
Daiwa Securities Group Inc. .............. 4,000 62,602
San-in Godo Bank Ltd. .................... 33,000 207,360
Netherlands -- 2.11%
- ------------------------------------------------------------------------
ING Groep ................................ 2,875 173,594
Wereldhave ............................... 3,675 165,295
Sweden -- 0.51%
- ------------------------------------------------------------------------
Tornet Fastighets ........................ 5,900 81,819
Switzerland -- 1.82%
- ------------------------------------------------------------------------
Schweizerische Rueckversicherungs-
Gesellschaft ........................... 60 123,256
UBS ...................................... 625 168,781
-----------
1,473,326
Multi-Line Insurance -- 3.85%
- ------------------------------------------------------------------------
France -- 0.44%
- ------------------------------------------------------------------------
Scor ..................................... 1,600 70,595
Germany -- 0.83%
- ------------------------------------------------------------------------
Hannover Rueckversicherungs .............. 1,050 80,915
Mannheimer Aktiengesellschaft ............ 950 51,123
Switzerland -- 0.49%
- ------------------------------------------------------------------------
Baloise Holding Ltd. ..................... 100 78,691
United Kingdom -- 2.09%
- ------------------------------------------------------------------------
CGU ...................................... 20,800 335,647
-----------
616,971
Property-Casualty Insurance -- 0.80%
- ------------------------------------------------------------------------
France -- 0.41%
- ------------------------------------------------------------------------
AGF (Assurances Generales de France) ..... 1,200 65,034
Italy -- 0.39%
- ------------------------------------------------------------------------
Unipol ................................... 11,000 45,653
Unipol (Preferred) ....................... 8,000 17,488
-----------
128,175
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Real Estate -- 2.05%
- ------------------------------------------------------------------------
Italy -- 0.01%
- ------------------------------------------------------------------------
Beni Stabili Spa ......................... 4,000 $ 1,410
Singapore -- 0.06%
- ------------------------------------------------------------------------
Keppel Land Ltd. ......................... 6,000 9,835
United Kingdom -- 1.98%
- ------------------------------------------------------------------------
MEPC ..................................... 42,400 318,473
-----------
329,718
-----------
Total Foreign Stocks
(Identified cost $4,467,133 )........................... 4,690,696
- -------------------------------------------------------- ---------------
Repurchase Agreement -- 5.04%
- ------------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement, 2.50% due
01/03/00
Collateral: U.S. Treasury Note
$795,000, 7.25% due 05/15/04
Value $834,242 ......................... $809,000 809,000
-----------
Total Repurchase Agreement
(Identified cost $809,000)......................... 809,000
- ------------------------------------------------------------------------
Total Investments
(Identified cost $16,670,784)........................... $16,393,522
Other Assets Less Liabilities -- (2.23)% ............... (358,334)
-----------
Net Assets -- 100% ..................................... $16,035,188
- ------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
54
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<PAGE>
- ------- -------------
ENTERPRISE MANAGED FUND
- ------- -------------
OpCap Advisors, Inc.
New York, New York
Sanford C. Bernstein & Co., Inc.
New York, New York
Investment Management
OpCap Advisors, a wholly owned subsidiary of Oppenheimer Capital, became Fund
Manager to the Enterprise Managed Fund on October 1, 1994. Oppenheimer Capital
manages approximately $52 billion for institutional clients, and its normal
investment minimum is $20 million.
Sanford C. Bernstein & Co., Inc., which has approximately $88 billion in assets
under management, became co-portfolio manager of the Fund on November 1, 1999.
Bernstein's normal investment minimum is $5 million.
Investment Objective
The objective of the Enterprise Managed Fund is to seek growth of capital over
time.
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 economic and
market trends and 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 Fund Managers believe 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 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.
1999 Performance Review -- OpCap Advisors
In 1999 the U.S. stock market continued to advance strongly. The S&P 500 Index
rose 21.0 percent, returning more than 20 percent for a record fifth consecutive
year. Even as the popular indexes kept hitting new highs, however, the U.S.
market was characterized by two contradictory trends: the rapid escalation of
technology stocks, especially those associated with the Internet and e-commerce,
and the only modest gains or even price declines for many stocks in other
industry sectors.
More than half the stocks on the New York Stock Exchange actually declined in
price during the year, and the Russell 1000 Value Index, a widely followed large
cap value benchmark, rose a relatively modest 6.7 percent in 1999 even though
many of the companies in the index continued to generate strong earnings growth.
Performance disparities among industry sectors and types of stocks are hardly
new. Nonetheless, few such disparities have been as extreme as that which
occurred during 1999 between the high-flying tech stocks and the rest of the
market. The outperformance of technology stocks became most pronounced in the
fourth quarter, when the S&P 500 rose 14.9 percent while the tech-heavy NASDAQ
composite delivered a total return of 48.3 percent.
Much of the current fervor surrounding tech stocks stems from the explosive
growth potential of e-commerce and other tech-related businesses.
Internet-related stocks such as America Online, Yahoo!, Amazon and eBay advanced
more than 20 percent in December alone, even though many of these companies have
yet to earn any profit and are expected to remain unprofitable in the near term.
This lack of current earnings, and uncertainty over when earnings will occur,
makes these stocks risky and even undesirable for investors who are not simply
chasing the upward momentum of stocks that keep rising with little or no direct
relationship to fundamentals.
OpCap has always been thoughtful in its value style to consider companies across
the breadth of the market, including technology companies. And, in fact, the
Fund made money on several of the more established technology stocks during the
past year -- companies with strong market positions and improving profitability.
However, in the current
THE ENTERPRISE Group of Funds, Inc.
55
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<PAGE>
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- --------------------------------------------------------------------------------
ebullient market for tech stocks, it has become increasingly difficult to find
value in the sector. As a result, the Fund's investment results trailed the S&P
500 and other major market indexes due in part to an underweighting in the
technology sector.
Whether the current tech stock craze turns out to be a bubble that bursts
remains to be seen. Even if it does burst, however, the technology industry will
continue to grow and create enormous economic wealth. OpCap's challenge as value
investors, therefore, is to identify solid companies that stand to benefit from
this growth. In recent months, OpCap has intensified research efforts aimed at
buying technology companies with staying power and where share prices bear some
reasonable relationship to underlying value. OpCap bought several such stocks
and will continue efforts to find additional technology issues that meet its
value criteria, while maintaining OpCap's broadly based research programs to
uncover excellent investment opportunities in all industry sectors.
1999 Performance Review -- Sanford C. Bernstein
Bernstein became co-manager of the Enterprise Managed Fund in November.
Bernstein's portion of the Fund was not completely restructured until late in
the month. December was the first full month of performance.
Stock selection hurt performance in December. Most significantly, the Fund was
overweight electric utilities versus telecom in the utilities sector and the
Fund's telecom holdings were in traditional, rather than extremely high-priced
cellular companies. Stock selection within consumer growth also hurt, as several
leading pharmaceutical companies traded down. Partly offsetting this, however,
was strong stock selection within the financial, credit non-financial,
industrial resources and technology sectors.
The five largest contributors to performance in the month were Amgen, Bausch &
Lomb, Georgia Pacific, Lehman Brothers Holdings and Motorola. The five largest
detractors from performance were an underweight in QUALCOMM and overweight
positions of Goodyear Tire & Rubber, Inc., Bristol Myers Squibb, and Johnson &
Johnson.
Sector weights contributed 0.37 percent to performance. Most important were
underweight positions in the consumer growth and consumer staples sectors.
Overweights of the utilities and energy sectors, however, detracted from
performance.
[GRAPHIC]
www.enterprisefunds.com
THE ENTERPRISE Group of Funds, Inc.
56
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<PAGE>
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GROWTH OF A $10,000 INVESTMENT
[CHART APPEARS HERE]
Lipper
Enterprise S&P Flexible
Managed 500 Portfolio
Fund - A Index Fund Index
---------- --------------- ------------------
10/1/94 9523 10000 10000
12/31/94 9373 9998 9819
1995 12906 13755 12135
1996 15755 16913 13846
1997 19071 22555 16372
1998 20415 29000 19076
1999 21926 35099 20946
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE MANAGED FUND - A ONE YEAR FIVE YEAR 10/1/94-12/31/99
With Sales Charge 2.32% 17.40% 16.12%
Without Sales Charge 7.40% 18.53% 17.21%
S&P 500 Index* 21.03% 28.55% 27.01%
Lipper Flexible Portfolio Fund Index* 9.80% 16.36% 15.27%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE MANAGED FUND - B ONE YEAR 5/1/95-12/31/99
With Sales Charge 1.75% 15.32%
Without Sales Charge 6.75% 15.57%
S&P 500 Index* 21.03% 27.50%
Lipper Flexible Portfolio Fund Index* 9.80% 15.70%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE MANAGED FUND - C ONE YEAR 5/1/97-12/31/99
With Sales Charge 6.64% 11.09%
Without Sales Charge 7.64% 11.09%
S&P 500 Index* 21.03% 27.39%
Lipper Flexible Portfolio Fund Index* 9.80% 15.79%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ONE YEAR 7/31/95-12/31/99
ENTERPRISE MANAGED FUND - Y 7.94% 15.05%
S&P 500 Index* 21.03% 26.52%
Lipper Flexible Portfolio Fund Index* 9.80% 14.65%
The performance of Classes B, C and Y will vary from the performance of Class A
shown in the above line graph based on differences in sales charges and expenses
paid by shareholders investing in the different classes.
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
*The S&P 500 is an unmanaged index that includes the common stocks of 500
companies that tend to the leaders in important industries within the U.S.
economy. It assumes the reinvestment of dividends and distributions and does not
include any management fees or expenses. The Lipper Flexible Portfolio Fund
Index is an unmanaged index of the 30 largest funds, based on total year-end net
asset value, in the Lipper Flexible Portfolio Fund category. It assumes the
reinvestment of dividends and capital gains and does not include any management
fees or expenses. One cannot invest in an index.
Future Investment Strategy -- OpCap Advisors
OpCap remains optimistic about the outlook for its style of value investing and
believes the Fund is positioned to perform well in the months ahead. The
companies the Fund owns have strong competitive positions, and on average their
share prices trade at discounts to the S&P 500. OpCap believes the market will
ultimately shift back to an emphasis on company fundamentals, benefiting the
value approach.
Nonetheless, the Fund has a larger-than-normal cash position, reflecting OpCap's
caution in adding to equity holdings at a time when technology stocks keep
rising and many other stocks have languished. OpCap thinks there are many
opportunities in today's market to buy quality businesses with solid
fundamentals inexpensively and that many of these companies will improve their
earnings as the economies of Asia and Europe strengthen. OpCap believes also,
however, that the Fund has the luxury of being opportunistic about waiting for
attractive prices and building positions over time given the current malaise of
many non-tech issues.
THE ENTERPRISE Group of Funds, Inc.
57
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<PAGE>
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Future Investment Strategy -- Sanford C. Bernstein
The cheapest 100 stocks in the S&P 500 are now trading at their lowest
valuations relative to the market as a whole in 25 years, but with far less
risk. While a small fraction of the Fund's overweight value holdings is invested
in companies suffering serious short-term earnings reverses, most are in
companies meeting or exceeding short-term earnings expectations. In fact,
consensus earnings forecasts for many of the Fund's holdings have turned up
sharply. While some of these companies' share prices have recently recovered
some of their lost ground, they remain cheap not only in Bernstein's eyes, but
in managements'. Stock buyback activity has been unusually high for many of the
Fund's holdings.
Producers of industrial commodities are among the investments in the Fund that
are showing the strongest fundamental improvement, with commodity prices rising
strongly on improved demand and corporate restructuring efforts bearing fruit.
The turnaround in paper was particularly rapid. Global capacity utilization for
pulp, uncoated free sheet and linerboard has been rising and steadily pushing up
pricing. In every case, however, current pricing is still quite a bit below the
peaks of the last cycle, so there is still room for further improvement.
Over the last few years, department stores have been designated the dinosaurs of
retailing, with specialty stores such as The Gap and discounters such as
Wal-Mart purportedly drawing the crowds of shoppers and Internet retailers
supposedly changing the rules of the game. In Bernstein's view, this has created
many attractive opportunities. For example, Federated Department Stores, one of
the Fund's holdings, is flourishing. Its sales-per-store rose at a healthy clip
in 1999, with more shoppers spending more money at Bloomingdale's and Macy's
than ever. Federated is also tackling the Internet. About a year ago, it
purchased Fingerhut, a catalog retailer with a highly regarded Internet whiz at
its helm. When Wal-Mart and e-Toys hired a firm to distribute their goods to
Internet customers, they chose Fingerhut. May Department Stores, meanwhile, is
the class act of its industry. Operator of Lord & Taylor's, Robinsons-May,
Hecht's, Foley's and Kaufmann's, May has one of the most consistent track
records in this cyclical industry. Bernstein finds May, like Federated, a very
compelling value.
The electric utility industry has lagged the market since late 1993, except for
a brief period of outperformance during the market downturn in 1998. Recently,
these stocks have fallen even further behind as their unexciting growth
prospects failed to capture the imagination of investors preoccupied with the
Internet. Concerns about deregulation and rising interest rates have also
contributed to electric utilities' underperformance and set up a compelling
opportunity. Valuations are now at record lows relative to the market. The
particular utilities the Fund is buying may remain competitive even through
deregulation because they enjoy low-cost positions or a favorable regulatory
environment or both. American Electric Power (AEP), for example, has the
lowest-cost fossil-fuel generating assets in the country because most of its
generating plants sit on top of coalmines and do not have to pay for
transportation. Central and South West, with which AEP is about to merge, is
also a low-cost provider. AEP and Central and South West are not the only
attractive utilities Bernstein sees. The Fund is also buying Ameren, FirstEnergy
and New Century Energies. If electric utilities continue to underperform, they
could become a larger theme in the Fund.
Bernstein continues to see potentially large opportunities in the value realm.
The Fund has continued to be attractively priced relative to the S&P 500, with
price-to-earnings and price-to-book ratios lower than the index's, and a higher
dividend yield. It maintains a weighted-average capitalization comparable to the
S&P 500.
The views expressed in this report reflect those of the Fund Managers only
through the end of the period of the report as stated on the cover. The
managers' views are subject to change at any time based on market and other
conditions.
THE ENTERPRISE Group of Funds, Inc.
58
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<PAGE>
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PORTFOLIO OF INVESTMENTS
ENTERPRISE MANAGED FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Common Stocks -- 83.84%
- ------------------------------------------------------------------------
Aerospace -- 2.60%
- ------------------------------------------------------------------------
Boeing Company ............................ 217,700 $ 9,048,156
Honeywell International Inc. .............. 12,900 744,169
Northrop Grumman Corporation .............. 3,800 205,437
-----------
9,997,762
Automotive -- 1.24%
- ------------------------------------------------------------------------
Cummins Engine Company Inc. ............... 14,300 690,868
Delphi Automotive Systems
Corporation ............................. 72,100 1,135,575
Ford Motor Company ........................ 17,800 951,187
General Motors Corporation ................ 2,500 181,719
Genuine Parts Company ..................... 42,000 1,042,125
Goodyear Tire & Rubber Company ............ 22,500 634,219
TRW Inc. .................................. 2,900 150,619
-----------
4,786,312
Banking -- 6.09%
- ------------------------------------------------------------------------
Bank of America Corporation ............... 46,800 2,348,775
Bank One Corporation ...................... 27,200 872,100
Chase Manhattan Corporation ............... 20,400 1,584,825
First Union Corporation ................... 17,200 564,375
FleetBoston Financial Corporation ......... 29,200 1,016,525
J. P. Morgan & Company Inc. ............... 9,400 1,190,275
M & T Bank Corporation .................... 9,250 3,831,813
National City Corporation ................. 11,900 281,881
PNC Bank Corporation ...................... 15,100 671,950
Republic New York Corporation ............. 15,200 1,094,400
Summit Bancorp ............................ 5,800 177,625
Wells Fargo & Company ..................... 241,900 9,781,831
-----------
23,416,375
Broadcasting -- 2.00%
- ------------------------------------------------------------------------
AMFM Inc. (a) ............................. 12,000 939,000
News Corporation Ltd. (ADR) ............... 164,300 5,493,781
Time Warner Inc. .......................... 6,600 478,088
Viacom Inc. (a) ........................... 12,800 773,600
-----------
7,684,469
Brokers -- 0.47%
- ------------------------------------------------------------------------
Bear Stearns Companies Inc. ............... 15,700 671,175
Lehman Brothers Holdings Inc. ............. 13,600 1,151,750
-----------
1,822,925
Cable -- 0.06%
- ------------------------------------------------------------------------
Mediaone Group Inc. (a) ................... 2,800 215,075
Capital Goods & Services -- 0.10%
- ------------------------------------------------------------------------
Cooper Industries Inc. .................... 9,700 392,244
Chemicals -- 3.03%
- ------------------------------------------------------------------------
Ashland Inc. .............................. 15,400 507,238
Du Pont (E. I.) de Nemours &
Company ................................. 123,400 8,128,975
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Monsanto Company .......................... 51,850 $ 1,847,156
Union Carbide Corporation ................. 17,700 1,181,475
-----------
11,664,844
Computer Hardware -- 6.61%
- ------------------------------------------------------------------------
Apple Computer Inc. ....................... 4,800 493,500
Cisco Systems Inc. (a) .................... 58,700 6,288,237
Compaq Computer Corporation ............... 106,700 2,887,569
Dell Computer Corporation (a) ............. 33,800 1,723,800
EMC Corporation (a) ....................... 22,100 2,414,425
Hewlett-Packard Company ................... 26,600 3,030,738
Intel Corporation ......................... 59,700 4,914,056
International Business Machines
Corporation ............................. 29,400 3,175,200
Seagate Technology Inc. (a) ............... 10,300 479,594
-----------
25,407,119
Computer Services -- 1.93%
- ------------------------------------------------------------------------
America Online Inc. (a) ................... 37,800 2,851,537
Electronic Data Systems Corporation ....... 15,100 1,010,756
LSI Logic Corporation (a) ................. 6,000 405,000
Solectron Corporation (a) ................. 2,100 199,763
Sun Microsystems Inc. (a) ................. 30,600 2,369,587
Yahoo! Inc. (a) ........................... 1,400 605,763
-----------
7,442,406
Computer Software -- 5.19%
- ------------------------------------------------------------------------
Computer Associates International Inc. 116,900 8,175,694
Microsoft Corporation (a) ................. 78,500 9,164,875
Oracle Corporation (a) .................... 23,300 2,611,056
-----------
19,951,625
Conglomerates -- 2.13%
- ------------------------------------------------------------------------
Minnesota Mining & Manufacturing
Company ................................. 51,500 5,040,562
Textron Inc. .............................. 41,000 3,144,188
-----------
8,184,750
Consumer Products -- 0.92%
- ------------------------------------------------------------------------
Black & Decker Corporation ................ 3,500 182,875
Briggs & Stratton Corporation ............. 600 32,175
Procter & Gamble Company .................. 20,700 2,267,944
Whirlpool Corporation ..................... 16,500 1,073,531
-----------
3,556,525
Consumer Services -- 0.25%
- ------------------------------------------------------------------------
First Data Corporation .................... 19,600 966,525
Crude & Petroleum -- 2.90%
- ------------------------------------------------------------------------
Anadarko Petroleum Corporation ............ 12,600 429,975
Chevron Corporation ....................... 22,700 1,966,388
Exxon Mobil Corporation ................... 63,231 5,094,047
Royal Dutch Petroleum Company
(ADR) ................................... 54,600 3,299,887
Texaco Inc. ............................... 6,800 369,325
-----------
11,159,622
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
59
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<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
ENTERPRISE MANAGED FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Electrical Equipment -- 2.39%
- ---------------------------------------------------------------------
Emerson Electric Company ............... 15,000 $ 860,625
General Electric Company ............... 52,300 8,093,425
Tektronix Inc. ......................... 6,100 237,137
-----------
9,191,187
Electronics -- 0.12%
- ---------------------------------------------------------------------
Rockwell International Corporation ..... 9,700 464,388
Energy -- 1.20%
- ---------------------------------------------------------------------
AES Corporation (a) .................... 4,000 299,000
Atlantic Richfield Company ............. 16,500 1,427,250
Cinergy Corporation .................... 36,100 870,913
Enron Corporation ...................... 350 15,531
FirstEnergy Corporation ................ 45,600 1,034,550
New Century Energies Inc. .............. 32,500 987,187
-----------
4,634,431
Entertainment & Leisure -- 0.31%
- ---------------------------------------------------------------------
Walt Disney Company .................... 23,100 675,675
Harrahs Entertainment Inc. (a) ......... 20,000 528,750
-----------
1,204,425
Finance -- 1.87%
- ---------------------------------------------------------------------
Dun & Bradstreet Corporation ........... 20,200 595,900
Household International Inc. ........... 99,050 3,689,612
MBNA Corporation ....................... 11,100 302,475
Merrill Lynch & Company Inc. ........... 4,100 342,350
MGIC Investment Corporation ............ 11,700 704,194
Morgan Stanley Dean Witter &
Company .............................. 10,800 1,541,700
-----------
7,176,231
Food & Beverages & Tobacco -- 2.58%
- ---------------------------------------------------------------------
Anheuser Busch Companies Inc. .......... 17,000 1,204,875
Coca-Cola Company ...................... 23,600 1,374,700
Conagra Inc. ........................... 18,100 408,381
Diageo (ADR) ........................... 108,650 3,476,800
Fortune Brands Inc. .................... 18,900 624,881
General Mills Inc. ..................... 12,100 432,575
Great Atlantic & Pacific Tea Company ... 16,000 446,000
PepsiCo Inc. ........................... 200 7,050
Philip Morris Companies Inc. ........... 81,600 1,892,100
Unilever N V ........................... 1,000 54,438
-----------
9,921,800
Health Care -- 0.32%
- ---------------------------------------------------------------------
Bausch & Lomb Inc. ..................... 11,700 800,719
United Healthcare Corporation .......... 7,900 419,687
-----------
1,220,406
Hotels & Restaurants -- 2.46%
- ---------------------------------------------------------------------
McDonald's Corporation ................. 234,400 9,449,250
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Insurance -- 1.71%
- ---------------------------------------------------------------------
ACE Ltd. ............................... 38,000 $ 634,125
Aon Corporation ........................ 5,100 204,000
XL Capital Ltd. (Class A) .............. 110,405 5,727,259
-----------
6,565,384
Machinery -- 1.20%
- ---------------------------------------------------------------------
Applied Materials Inc. (a) ............. 10,100 1,279,544
Caterpillar Inc. ....................... 71,100 3,346,144
-----------
4,625,688
Manufacturing -- 1.70%
- ---------------------------------------------------------------------
FMC Corporation (a) .................... 21,000 1,203,562
ITT Industries Inc. .................... 130,000 4,346,875
Tyco International Ltd. ................ 25,600 995,200
-----------
6,545,637
Medical Instruments -- 0.16%
- ---------------------------------------------------------------------
PE Corporation ......................... 5,200 625,625
Metals & Mining -- 0.28%
- ---------------------------------------------------------------------
Alcoa Inc. ............................. 1,400 116,200
INCO Ltd. (a) .......................... 7,700 180,950
Nucor Corporation ...................... 7,300 400,131
Worthington Industries Inc. ............ 22,200 367,688
-----------
1,064,969
Misc. Financial Services -- 6.24%
- ---------------------------------------------------------------------
American Express Company ............... 11,800 1,961,750
Citigroup Inc. ......................... 204,300 11,351,418
Federal National Mortgage
Association .......................... 19,700 1,230,019
Freddie Mac ............................ 201,100 9,464,269
-----------
24,007,456
Multi-Line Insurance -- 0.76%
- ---------------------------------------------------------------------
American General Corporation ........... 11,900 902,913
American International Group Inc. ...... 15,700 1,697,562
Lincoln National Corporation ........... 7,700 308,000
-----------
2,908,475
Oil Services -- 0.78%
- ---------------------------------------------------------------------
Kerr-McGee Corporation ................. 2,400 148,800
Occidental Petroleum Corporation ....... 52,000 1,124,500
Phillips Petroleum Company ............. 26,700 1,254,900
Rowan Companies Inc. ................... 21,800 472,788
-----------
3,000,988
Paper & Forest Products -- 1.72%
- ---------------------------------------------------------------------
Champion International Corporation ..... 57,100 3,536,631
Fort James Corporation ................. 1,000 27,375
Georgia-Pacific Group .................. 29,000 1,471,750
International Paper Company ............ 25,900 1,461,731
Temple-Inland Inc. ..................... 1,800 118,688
-----------
6,616,175
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
60
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<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
ENTERPRISE MANAGED FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Paper Products -- 0.28%
- ------------------------------------------------------------------------
Boise Cascade Corporation ................ 5,500 $ 222,750
Westvaco Corporation ..................... 17,400 567,675
Willamette Industries Inc. ............... 6,100 283,269
------------
1,073,694
Pharmaceuticals -- 5.00%
- ------------------------------------------------------------------------
Abbott Laboratories ...................... 10,900 395,806
American Home Products Corporation ....... 120,300 4,744,331
Amgen Inc. (a) ........................... 23,100 1,387,444
Baxter International Inc. ................ 17,400 1,092,938
Bristol-Myers Squibb Company ............. 45,800 2,939,787
Eli Lilly & Company ...................... 6,800 452,200
Johnson & Johnson ........................ 34,500 3,212,812
Merck & Company Inc. ..................... 40,300 2,702,619
Pfizer Inc. .............................. 44,000 1,427,250
Pharmacia & Upjohn Inc. .................. 4,600 207,000
Schering-Plough Corporation .............. 11,600 489,375
Warner-Lambert Company ................... 2,400 196,650
------------
19,248,212
Property-Casualty Insurance -- 0.07%
- ------------------------------------------------------------------------
St. Paul Companies Inc. .................. 7,400 249,288
Publishing -- 0.02%
- ------------------------------------------------------------------------
New York Times Company ................... 1,600 78,600
Raw Materials -- 0.17%
- ------------------------------------------------------------------------
Weyerhaeuser Company ..................... 9,300 667,856
Real Estate -- 0.41%
- ------------------------------------------------------------------------
Security Capital Group Inc.
(Class B) (a) .......................... 125,000 1,562,500
Retail -- 3.72%
- ------------------------------------------------------------------------
Dayton Hudson Corporation ................ 13,500 991,406
Federated Department Stores Inc. (a) ..... 27,100 1,370,244
Gap Inc. ................................. 17,600 809,600
Home Depot Inc. .......................... 40,050 2,745,928
K-Mart Corporation (a) ................... 50,600 509,163
Limited Inc. ............................. 20,100 870,581
May Department Stores Company ............ 36,100 1,164,225
TJX Companies Inc. ....................... 21,500 439,406
Wal-Mart Stores Inc. ..................... 78,300 5,412,488
------------
14,313,041
Savings and Loan -- 0.22%
- ------------------------------------------------------------------------
Golden West Financial Corporation ........ 13,200 442,200
Washington Mutual Inc. ................... 16,200 421,200
------------
863,400
Technology -- 0.68%
- ------------------------------------------------------------------------
Micron Technology Inc. (a) ............... 9,000 699,750
Texas Instruments Inc. ................... 19,800 1,918,125
------------
2,617,875
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Telecommunications -- 8.42%
- ------------------------------------------------------------------------
Alltel Corporation ....................... 15,900 $ 1,314,731
AT&T Corporation ......................... 76,100 3,862,075
Bell Atlantic Corporation ................ 75,450 4,644,891
BellSouth Corporation .................... 7,400 346,413
GTE Corporation .......................... 21,700 1,531,206
Lucent Technologies Inc. ................. 54,400 4,069,800
MCI WorldCom Inc. (a) .................... 60,150 3,191,709
Nortel Networks Corporation .............. 29,300 2,959,300
QUALCOMM Inc. (a) ........................ 8,600 1,514,675
SBC Communications Inc. .................. 38,000 1,852,500
Sprint Corporation ....................... 102,200 6,879,338
Tellabs Inc. (a) ......................... 3,100 198,981
U S West Inc. ............................ 200 14,400
------------
32,380,019
Transportation -- 1.44%
- ------------------------------------------------------------------------
Burlington Northern Santa Fe
Corporation ............................ 5,200 126,100
CSX Corporation .......................... 15,800 495,725
UAL Corporation (a) ...................... 52,500 4,072,031
Union Pacific Corporation ................ 19,700 859,413
------------
5,553,269
Utilities -- 0.97%
- ------------------------------------------------------------------------
Ameren Corporation ....................... 28,400 930,100
American Electric Power Inc. ............. 33,300 1,069,762
GPU Inc. ................................. 33,000 987,938
KLA Tencor Corporation (a) ............... 1,300 144,788
Texas Utilities Company .................. 16,800 597,450
------------
3,730,038
Waste Management -- 0.34%
- ------------------------------------------------------------------------
Waste Management Inc. .................... 75,000 1,289,063
Wireless Communications -- 0.78%
- ------------------------------------------------------------------------
Motorola Inc. ............................ 20,500 3,018,624
------------
Total Common Stocks
(Identified cost $290,467,009).......................... 322,516,572
- ------------------------------------------------------------------------
Federal National Mortgage Association -- 7.05%
- ------------------------------------------------------------------------
Federal National Mortgage
Association, 6.50% due 08/15/04 ........ $18,000,000 17,780,337
Federal National Mortgage Association
Discount Notes, 5.66%
due 01/31/00 ........................... 9,400,000 9,355,663
------------
Total Federal National Mortgage
Association
(Identified cost $27,166,580)......................... 27,136,000
- ------------------------------------------------------------------------
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
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PORTFOLIO OF INVESTMENTS -- (CONTINUED)
ENTERPRISE MANAGED FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Commercial Paper -- 5.06%
- --------------------------------------------------------------------
American Express Credit Corporation,
6.25% due 01/14/00 .................. $ 6,000,000 $ 5,986,458
Ford Motor Credit Company,
6.06% due 01/12/00 .................. 8,500,000 8,484,261
Prudential Funding Corporation,
6.00% due 01/26/00 .................. 5,000,000 4,979,167
-----------
Total Commercial Paper
(Identified cost $19,449,886)...................... 19,449,886
- ----------------------------------------------------- -----------
Repurchase Agreement -- 3.32%
- --------------------------------------------------------------------
State Street Bank & Trust Repurchase
Agreement, 2.50% due 01/03/00
Collateral: U.S. Treasury Note
$2,995,000, 5.75% due 08/15/03,
Value $3,063,791 and U.S. Treasury
Note $9,850,000, 6.375% due
09/30/01, Value $10,181,933 ......... 12,761,000 12,761,000
-----------
Total Repurchase Agreement
(Identified cost $12,761,000)...................... 12,761,000
- ----------------------------------------------------- -----------
</TABLE>
<TABLE>
<CAPTION>
Value
<S> <C>
Total Investments
(Identified cost $349,844,474).................. $381,863,458
Other Assets Less Liabilities -- 0.73% ......... 2,800,808
------------
Net Assets -- 100% ............................. $384,664,266
- ------------------------------------------------- ------------
</TABLE>
(a) Non-income producing security.
(ADR) American Depository Receipt.
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
62
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<PAGE>
- ------- -------------
ENTERPRISE BALANCED FUND
- ------- -------------
Montag & Caldwell
Atlanta, Georgia
Investment Management
Montag & Caldwell, which has approximately $35 billion in assets under
management, became manager of the Fund on July 1, 1999, the Fund's inception
date. Montag's normal investment minimum for a separate account is $40 million.
Investment Objective
The Fund seeks long-term total return.
Investment Strategies
Generally, between 55 percent and 75 percent of the Balanced Fund's total assets
will be invested in equity securities, and at least 25 percent of the Balanced
Fund's total assets will be invested in fixed income securities. The portfolio
allocation will vary based upon the Fund Manager's assessment of the return
potential of each asset class. For equity investments, the Fund Manager uses a
bottom-up approach to stock selection, focusing on high quality,
well-established companies that have a strong history of earnings growth;
attractive prices relative to the company's potential for above average;
long-term earnings and revenue growth; strong balance sheets; a sustainable
competitive advantage; the potential to become (or currently are) industry
leaders; and the potential to outperform the market during downturns. When
selecting fixed income securities, the Fund Manager will seek to maintain the
Fund's weighted average duration within 20 percent of the duration of the Lehman
Brothers Government Corporate Index. Emphasis is also placed on diversification
and credit analysis. The Fund will only invest in fixed income securities with
an "A" or better rating. Fixed income investments will include: U.S. Government
securities; corporate bonds; mortgage/asset-backed securities; and money market
securities and repurchase agreements.
1999 Performance Review
Due to the strength in the Fund's equities, the Fund is off to a good start
since its inception date of July 1, 1999. While the S&P 500 and other
market-weighted indices made considerable progress in 1999, many stocks showed
little change or actually declined in price. The year's stock market advance was
extremely narrow, dominated almost exclusively by the technology sector.
Montag thinks the weakness in the broader market is related to the increase in
both short and long-term interest rates. Higher interest rates increase the
costs of borrowing for consumers and businesses and reduce the attractiveness of
stocks versus higher yielding bonds.
THE ENTERPRISE Group of Funds, Inc.
63
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<PAGE>
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GROWTH OF A $10,000 INVESTMENT
[CHART APPEARS HERE]
Enterprise S&P Lipper
Balanced 500 Balanced
Fund - A Index Index
----------------- ----- ------------------
7/1/99 9523 10000 10000
12/31/99 10241 10770 10264
CUMULATIVE TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE BALANCED FUND - A 7/1/99-12/31/99
With Sales Charge 2.41%
Without Sales Charge 7.53%
S&P 500 Index* 7.70%
Lipper Balanced Index* 2.64%
CUMULATIVE TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE BALANCED FUND - B 7/1/99-12/31/99
With Sales Charge 2.36%
Without Sales Charge 7.36%
S&P 500 Index* 7.70%
Lipper Balanced Index* 2.64%
CUMULATIVE TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE BALANCED FUND - C 7/1/99-12/31/99
With Sales Charge 6.32%
Without Sales Charge 7.32%
S&P 500 Index* 7.70%
Lipper Balanced Index* 2.64%
CUMULATIVE TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE BALANCED FUND - Y 7/1/99-12/31/99
Cumulative Return 7.91%
S&P 500 Index* 7.70%
Lipper Balanced Index* 2.64%
The performance of Classes B, C and Y will vary from the performance of Class A
shown in the above line graph based on differences in sales charges and expenses
paid by shareholders investing in the different classes.
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
*The S&P 500 is an unmanaged index that includes the common stocks of 500
companies that tend to be leaders in important industries within the U.S.
economy. It assumes the reinvestment of dividends and distributions and does not
include any management fees or expenses. The Lipper Balanced Index is an
unmanaged index of the 30 largest funds, based on total year-end net asset
value, in the Lipper Balanced Fund category. It assumes the reinvestment of
dividends and capital gains and does not include any management fees or
expenses. One cannot invest in an index.
Future Investment Strategy
While many technology stocks are now richly valued, Montag believes there are
still selective opportunities in technology. Global industry conditions remain
robust, and the build-out of the Internet is increasing the demand for
technology goods and services.
As it becomes more evident to investors that the Federal Reserve will be
successful at engineering a soft landing for the U.S. economy, the broader
market may begin to improve. Bond yields may then stabilize and drift somewhat
lower as the economy slows; and investors may become increasingly confident that
corporate profits can keep growing since a recession-induced decline in profits
may not be needed to keep inflation in check. Because the Federal Reserve is
operating in a preemptive fashion, Montag believes the Fed will be successful in
achieving sustained economic growth with low inflation and, as a result, the
stock market will begin to broaden out while it continues toward higher levels.
THE ENTERPRISE Group of Funds, Inc.
64
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<PAGE>
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- --------------------------------------------------------------------------------
In addition to selective technology issues, Montag continues to view the shares
of global, consumer growth companies as quite attractive. With the triumph of
capitalism, the longer-term opportunities for these high quality companies may
be enormous. Now that consumers overseas are benefiting from the pickup in world
trade, the intermediate term outlook is also quite good. Montag expects
research-driven pharmaceutical and medical device companies to perform better in
2000 because their shares represent excellent value and offer strong
double-digit earnings growth prospects. Well-positioned consumer-oriented
companies with a global opportunity, but more dependent on the U.S. economy, may
also do well as it becomes more evident that a soft economic landing has been
achieved.
Although Montag's long-term outlook for bonds is positive, Montag anticipates
that short-term anxiety over further Federal Reserve action and concern about
the strength of holiday retail spending may cause interest rates to increase
temporarily. With real GDP continuing to increase at a strong rate, many market
participants expect the Fed to increase short-term interest rates at their
February meeting. Inflation continues to be contained despite tight labor
markets and strength in global economies. Montag expects that the combination of
preemptive actions by the Fed and continued tame inflation will lead to a soft
landing that may allow interest rates to drift lower over the long term.
The views expressed in this report reflect those of the Fund Manager only
through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
[GRAPHIC]
www.enterprisefunds.com
THE ENTERPRISE Group of Funds, Inc.
65
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<PAGE>
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PORTFOLIO OF INVESTMENTS
ENTERPRISE BALANCED FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Common Stocks -- 62.79%
- -----------------------------------------------------------------------
Banking -- 1.31%
- -----------------------------------------------------------------------
Wells Fargo & Company ..................... 3,300 $ 133,444
Business Services -- 1.42%
- -----------------------------------------------------------------------
Interpublic Group of Companies Inc. ....... 2,500 144,219
Computer Hardware -- 6.36%
- -----------------------------------------------------------------------
Dell Computer Corporation (a) ............. 2,000 102,000
EMC Corporation (a) ....................... 1,200 131,100
Hewlett-Packard Company ................... 2,400 273,450
Intel Corporation ......................... 1,700 139,931
----------
646,481
Computer Services -- 3.20%
- -----------------------------------------------------------------------
Electronic Data Systems Corporation ....... 3,300 220,894
Solectron Corporation (a) ................. 1,100 104,637
----------
325,531
Computer Software -- 6.99%
- -----------------------------------------------------------------------
Electronic Arts Inc. (a) .................. 2,200 184,800
Microsoft Corporation (a) ................. 2,200 256,850
Oracle Corporation (a) .................... 2,400 268,950
----------
710,600
Consumer Products -- 6.42%
- -----------------------------------------------------------------------
Gillette Company .......................... 7,000 288,312
Newell Rubbermaid Inc. .................... 5,000 145,000
Procter & Gamble Company .................. 2,000 219,125
----------
652,437
Electrical Equipment -- 1.37%
- -----------------------------------------------------------------------
General Electric Company .................. 900 139,275
Entertainment & Leisure -- 0.99%
- -----------------------------------------------------------------------
Carnival Corporation ...................... 2,100 100,406
Food & Beverages & Tobacco -- 5.65%
- -----------------------------------------------------------------------
Bestfoods ................................. 3,500 183,969
Coca-Cola Company ......................... 5,000 291,250
PepsiCo Inc. .............................. 2,800 98,700
----------
573,919
Health Care -- 1.29%
- -----------------------------------------------------------------------
Medtronic Inc. ............................ 3,600 131,175
Hotels & Restaurants -- 4.21%
- -----------------------------------------------------------------------
Marriott International Inc. (Class A) ..... 5,500 173,594
McDonald's Corporation .................... 6,300 253,969
----------
427,563
Medical Instruments -- 1.51%
- -----------------------------------------------------------------------
Boston Scientific Corporation (a) ......... 7,000 153,125
Misc. Financial Services -- 1.47%
- -----------------------------------------------------------------------
American Express Company .................. 900 149,625
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Multi-Line Insurance -- 1.91%
- -----------------------------------------------------------------------
American International Group Inc. ......... 1,800 $ 194,625
Pharmaceuticals -- 7.19%
- -----------------------------------------------------------------------
Bristol-Myers Squibb Company .............. 2,400 154,050
Johnson & Johnson ......................... 2,000 186,250
Pfizer Inc. ............................... 7,500 243,281
Schering-Plough Corporation ............... 3,500 147,656
----------
731,237
Retail -- 7.12%
- -----------------------------------------------------------------------
Circuit City Stores Inc. .................. 2,600 117,163
Costco Wholesale Corporation (a) .......... 1,500 136,875
Gap Inc. .................................. 3,500 161,000
Home Depot Inc. ........................... 4,500 308,531
----------
723,569
Telecommunications -- 4.38%
- -----------------------------------------------------------------------
MCI WorldCom Inc. (a) ..................... 5,000 265,313
Tellabs Inc. (a) .......................... 2,800 179,725
----------
445,038
----------
Total Common Stocks
(Identified cost $5,759,792)............................ 6,382,269
- -----------------------------------------------------------------------
Corporate Bonds and Notes -- 7.29%
- -----------------------------------------------------------------------
Banking -- 0.73%
- -----------------------------------------------------------------------
Nationsbank Corporation
7.00% due 05/15/03 ...................... $75,000 74,660
Energy -- 0.91%
- -----------------------------------------------------------------------
Peco Energy Transport Trust
6.05% due 03/01/09 ...................... 100,000 92,423
Finance -- 2.33%
- -----------------------------------------------------------------------
Ford Motor Credit Company
7.00% due 09/25/01 ...................... 125,000 125,082
National Rural Utilities Cooperative
Finance, 5.75% due 11/01/08 ............. 125,000 111,407
----------
236,489
Oil Services -- 1.17%
- -----------------------------------------------------------------------
Conoco Inc. 5.90% due 04/15/04 ............ 125,000 119,043
Pharmaceuticals -- 0.95%
- -----------------------------------------------------------------------
Warner Lambert Company
5.75% due 01/15/03 ...................... 100,000 96,718
Retail -- 1.20%
- -----------------------------------------------------------------------
Wal-Mart Stores Inc.,
6.875% due 08/10/09 ..................... 125,000 121,702
----------
Total Corporate Bonds and Notes
(Identified cost $753,282)............................... 741,035
- --------------------------------------------------------- -------------
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
66
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<PAGE>
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PORTFOLIO OF INVESTMENTS -- (CONTINUED)
ENTERPRISE BALANCED FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
U.S. Government & Agency Obligations -- 22.92%
- -----------------------------------------------------------------------
Federal Agencies -- 3.68%
- -----------------------------------------------------------------------
Federal Home Loan Bank
5.125% due 04/17/01 ................ $ 150,000 $ 147,583
Federal National Mortgage Association,
5.75% due 04/15/03 ................. 75,000 72,879
Freddie Mac
5.125% due 10/15/08 ................ 175,000 153,511
-----------
373,973
U.S. Treasury Notes -- 11.98%
- -----------------------------------------------------------------------
U.S. Treasury Note
6.625% due 04/30/02 ................ 255,000 256,846
U.S. Treasury Note
5.75% due 08/15/03 ................. 275,000 269,287
U.S. Treasury Note
7.875% due 11/15/04 ................ 375,000 396,412
U.S. Treasury Note
6.25% due 02/15/07 ................. 300,000 295,230
-----------
1,217,775
U.S. Treasury Bonds -- 7.26%
- -----------------------------------------------------------------------
U.S. Treasury Bond
7.25% due 05/15/16 ................. 125,000 130,662
U.S. Treasury Bond
8.125% due 08/15/19 ................ 150,000 170,888
U.S. Treasury Bond
8.00% due 11/15/21 ................. 125,000 141,852
U.S. Treasury Bond
6.25% due 08/15/23 ................. 150,000 141,434
U.S. Treasury Bond
6.875% due 08/15/25 ................ 150,000 152,713
-----------
737,549
-----------
Total U.S. Government & Agency
Obligations
(Identified cost $2,380,115)........................ 2,329,297
- ------------------------------------------------------ -----------
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Repurchase Agreement -- 10.04%
- -----------------------------------------------------------------------
State Street Bank & Trust Repurchase
Agreement, 2.50% due 01/03/00
Collateral: U.S. Treasury Note
$1,020,000, 6.25% due 01/31/02,
Value $1,072,178 ................... $1,021,000 $ 1,021,000
-----------
Total Repurchase Agreement
(Identified cost $1,021,000)..................... 1,021,000
- -----------------------------------------------------------------------
Total Investments
(Identified cost $9,914,189)........................ $10,473,601
Other Assets Less Liabilities -- (3.04)% ........... (308,974)
-----------
Net Assets -- 100% ................................. $10,164,627
- -----------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
67
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<PAGE>
- ------------- -------
ENTERPRISE HIGH-YIELD BOND FUND
- ------------- -------
Caywood-Scholl Capital Management
San Diego, California
Investment Management
Caywood-Scholl has been Fund Manager to the Enterprise High-Yield Bond Fund
since its inception in 1987. Caywood-Scholl manages approximately $1.4 billion
for institutional clients, and its normal investment minimum is $1 million.
Investment Objective
The objective of the Enterprise High-Yield Bond Fund is to seek maximum current
income.
Investment Strategies
The High-Yield Bond Fund invests primarily in high-yield, income-producing U.S.
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
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 percent
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.
1999 Performance Review
After nine months of lackluster performance, the high yield market turned in a
pretty good fourth quarter. There were several trends that contributed to the
market's rally, including the strong performance of equities, the recovery of
the emerging market debt prices and a balancing of the market technicals largely
due to a strong demand from structured buyers. As was the case for much of the
year demand was concentrated on larger, more liquid issuers, especially those of
higher credit quality.
The fundamentals of the high yield market at year-end 1999 are good. Strong
growth and healthy levels of profitability have allowed many companies to report
record or near record levels of cash flow and profitability. Clearly, the macro
economic foundation to the market is solid. With three interest rate hikes in,
the Fed is out to change current market conditions. Uncertainty is rarely a
investor's friend; therefore, this fundamental is negative for the market.
Equity capital is readily available to companies within favored sectors, namely
telecommunications and media, a notable credit positive for many issuers within
these industries. However, for the remainder of the market's issuers, which tend
to fall into the small capitalization category, access to equity capital was
inconsistent and was generally viewed as unsupportive to credit conditions.
Meanwhile, access to bank financing appears to be quite healthy. Capital access
is moderately favorable for high yield. The threat of deflation is largely
behind us, leaving the old nemesis inflation. However, for the high yield market
inflation is a relatively neutral fundamental. Most high yield issuers have
learned to manage their businesses without the benefit of pricing power. The
default rate of the market has accelerated all year, ending at a 7.78 percent
domestic default rate (per Moody's trailing-twelve-months). Most market
participants believe that the default rate may have peaked or is very close to
making a plateau. Caywood-Scholl believes the current level of defaults is a
negative for the market, but may be largely priced in. From a historical
perspective the
THE ENTERPRISE Group of Funds, Inc.
68
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<PAGE>
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- --------------------------------------------------------------------------------
high yield market is cheap. Although it may stay this way for sometime, the
compounding of this yield may be attractive to most fixed income investors.
From a technical perspective, the most widely watched barometer of demand is
mutual fund flow. In 1999, high yield mutual fund inflow was $6 billion compared
to $19 billion in 1998. The slackening in demand by mutual fund investors is
believed to have mirrored the general appetite for high yield bonds. The one
notable exception was the structured debt buy or CBO buyer. CBO's purchased $53
billion in high yield loans and securities in 1999. For much of the year they
were the driving forces behind demand. In 1999, the total supply of high yield
bonds was $100 billion versus $151 billion in 1998. This was the lowest level of
issuance since 1996.
GROWTH OF A $10,000 INVESTMENT
[CHART APPEARS HERE]
Enterprise Lehman Lipper
High-Yield High Yield High Yield
Bond BB Bond Fund
Fund - A Index Index
---------- --------------- ------------------
12/31/89 9522 10000 10000
1990 8427 10007 8888
1991 11209 12511 12462
1992 13080 14022 14750
1993 15383 16246 17677
1994 15390 16183 17027
1995 17852 19717 19986
1996 20134 21476 22580
1997 22788 24191 25554
1998 23309 25618 25533
1999 24158 26098 26754
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE HIGH-YIELD BOND FUND - A ONE YEAR FIVE YEAR TEN YEAR
With Sales Charge -1.24% 8.39% 9.22%
Without Sales Charge 3.64% 9.44% 9.75%
Lehman High Yield BB Index* 1.87% 10.03% 10.07%
Lipper High Yield Bond Fund Index* 4.78% 9.46% 10.34%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE HIGH-YIELD BOND FUND - B ONE YEAR 5/1/95-12/31/99
With Sales Charge -1.82% 7.66%
Without Sales Charge 3.18% 7.99%
Lehman High Yield BB Index* 1.87% 8.82%
Lipper High Yield Bond Fund Index* 4.78% 8.46%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE HIGH-YIELD BOND FUND - C ONE YEAR 5/1/97-12/31/99
With Sales Charge 2.09% 5.81%
Without Sales Charge 3.09% 5.81%
Lehman High Yield BB Index* 1.87% 6.69%
Lipper High Yield Bond Fund Index* 4.78% 5.98%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ONE YEAR 7/31/97-12/31/99
ENTERPRISE HIGH-YIELD BOND FUND - Y 4.30% 4.67%
Lehman High Yield BB Index* 1.87% 4.50%
Lipper High Yield Bond Fund Index* 4.78% 3.63%
The performance of Classes B, C and Y will vary from the performance of Class A
shown in the above line graph based on differences in sales charges and expenses
paid by shareholders investing in the different classes.
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
*The Lehman Brothers High Yield BB Index is an unmanaged index of fixed rate,
public non-convertible securities that are rated Ba1 or lower by Moody's
Investor Services, or BB+ or lower by Standard & Poors if a Moody's rating is
not available. It assumes the reinvestment of dividends and capital gains and
excludes management fees and expenses. The Lipper High Current Yield Bond Fund
Index is an unmanaged index of the 30 largest funds based on total year-end net
asset value, in the Lipper High Current Yield Bond Fund category. It assumes the
reinvestment of dividends and capital gains and does not include any management
fees or expenses. One cannot invest in an index.
THE ENTERPRISE Group of Funds, Inc.
69
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<PAGE>
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Future Investment Strategy
The technical picture in the high yield market has been somewhat weak for nearly
the past one and a half years. Caywood-Scholl does not expect this to
dramatically change with the Federal Reserve in the process of slowing economic
growth by raising interest rates. Still, for the long-term investor who is
willing to wait for the fundamentals to rise over the current technical
environment, the market is historically attractive and at worst, no more than
fairly valued. Another defensive characteristic that the high yield market has
historically demonstrated is its low correlation of monthly returns with other
asset classes such as common stock and U.S. treasuries. For those investors
desiring less volatility and high current cash flow, the high yield sector may
be of interest.
The views expressed in this report reflect those of the Fund Manager only
through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
[GRAPHIC]
www.enterprisefunds.com
THE ENTERPRISE Group of Funds, Inc.
70
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
ENTERPRISE HIGH-YIELD BOND FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Corporate Bonds, Convertible
Securities, Common &
Preferred Stocks -- 89.00%
- -------------------------------------------------------------------------
Aerospace -- 0.92%
- -------------------------------------------------------------------------
BE Aerospace Inc. 9.50%, due
11/01/08 ............................... $ 250,000 $ 234,375
Coltec Industries Inc. 7.50%,
due 04/15/08 ........................... 800,000 766,000
----------
1,000,375
Apparel & Textiles -- 0.42%
- -------------------------------------------------------------------------
Fruit of the Loom Inc. 8.875%,
due 04/15/06 (b) ....................... 700,000 31,500
Levi Strauss & Company 6.80%, due
11/01/03 ............................... 250,000 205,098
Levi Strauss & Company 7.00%, due
11/01/06 ............................... 300,000 219,567
----------
456,165
Automotive -- 2.20%
- -------------------------------------------------------------------------
Avis Rent a Car Inc. 11.00%,
due 05/01/09 ........................... 750,000 791,250
Budget Group Inc. 9.125%,
due 04/01/06 ........................... 850,000 788,375
Lear Corporation 7.96%,
due 05/15/05 ........................... 400,000 383,500
Sonic Automotive Inc. (Series B)
11.00%, due 08/01/08 ................... 450,000 430,875
----------
2,394,000
Banking -- 0.90%
- -------------------------------------------------------------------------
Bay View Capital Corporation
9.125%, due 08/15/07 ................... 400,000 341,000
Western Financial Savings Bank
Orange California 8.50%,
due 07/01/03 ........................... 200,000 176,500
Western Financial Savings Bank
Orange California 8.875%,
due 08/01/07 ........................... 500,000 458,750
----------
976,250
Broadcasting -- 7.55%
- -------------------------------------------------------------------------
Allbritton Communications Company
(Series B) 8.875%, due 02/01/08 ........ 400,000 387,000
Chancellor Media Corporation
9.00%, due 10/01/08 .................... 750,000 780,000
Chancellor Media Corporation
(Series B) 8.125%, due 12/15/07 ........ 500,000 500,000
Echostar DBS Corporation 9.375%,
due 02/01/09 ........................... 1,950,000 1,954,875
Fox Family Worldwide Inc. 0/10.25%,
due 11/01/07 (c) ....................... 750,000 488,438
Fox Family Worldwide Inc.
9.25%, due 11/01/07 .................... 1,250,000 1,156,250
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Fox/Liberty Networks LLC
0/9.75%, due 08/15/07 (c) .............. $2,350,000 $1,882,937
Rogers Communications Inc.
9.125%, due 01/15/06 ................... 150,000 150,375
Rogers Communications Inc. 8.875%,
due 07/15/07 ........................... 300,000 304,125
Sinclair Broadcast Group Inc.
8.75%, due 12/15/07 .................... 650,000 609,375
----------
8,213,375
Building & Construction -- 4.70%
- -------------------------------------------------------------------------
American Standard Inc.
7.375%, due 02/01/08 ................... 1,150,000 1,063,750
Building Materials Corporation
America (Series B) 7.75%, due
07/15/05 ............................... 600,000 552,000
Building Materials Corporation
America (Series B) 8.00%, due
10/15/07 ............................... 450,000 417,375
Group Maintenance America
Corporation 9.75%, due 01/15/09 ........ 900,000 893,250
Integrated Electrical Services 9.375%,
due 02/01/09 ........................... 600,000 594,000
Nortek Inc. 8.875%,
due 08/01/08 ........................... 400,000 380,000
Nortek Inc. (Series B) 9.125%,
due 09/01/07 ........................... 1,000,000 967,500
Republic Group Inc. 9.50%,
due 07/15/08 ........................... 250,000 236,562
----------
5,104,437
Business Services -- 0.74%
- -------------------------------------------------------------------------
United Rentals Inc. (Series B) 8.80%,
due 08/15/08 ........................... 850,000 805,375
Cable -- 5.69%
- -------------------------------------------------------------------------
Adelphia Communications Corporation
8.375%, due 02/01/08 ................... 250,000 232,500
Adelphia Communications Corporation
7.875%, due 05/01/09 ................... 250,000 225,000
Adelphia Communications Corporation
9.375%, due 11/15/09 ................... 250,000 246,250
Adelphia Communications Corporation
(Series B) 10.50%, due 07/15/04 ........ 650,000 678,437
Century Communications Corporation
9.50%, due 03/01/05 .................... 200,000 201,500
Century Communications Corporation
(Series B) Zero Coupon/8.80%, due
01/15/08 (c) ........................... 600,000 266,250
Charter Communication Holdings
8.25%, due 04/01/07 .................... 1,750,000 1,618,750
Mediacom LLC/Mediacom Capital
Corporation (Series B) 8.50%,
due 04/15/08 ........................... 650,000 609,375
Telewest Communications 0/9.25%,
due 04/15/09 (c) ....................... 1,750,000 1,111,250
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
71
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
ENTERPRISE HIGH-YIELD BOND FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Williams Communications
Corporation 10.70%, due 10/01/07....... $ 750,000 $ 789,375
Williams Communications Group
10.875%, due 10/01/09 ................. 200,000 209,500
---------
6,188,187
Chemicals -- 1.44%
- -----------------------------------------------------------------------
Huntsman Polymers Corporation
11.75%, due 12/01/04 .................. 250,000 262,500
Lyondell Chemical Company 9.625%,
due 05/01/07 .......................... 550,000 565,125
PCI Chemicals Canada Inc. 9.25%,
due 10/15/07 .......................... 400,000 308,000
Pioneer Americas Acquisition
Corporation (Series B) 9.25%,
due 06/15/07 .......................... 550,000 434,500
---------
1,570,125
Communications -- 4.67%
- -----------------------------------------------------------------------
Globalstar LP/Globalstar Capital
11.375%, due 02/15/04 ................. 900,000 609,750
Globalstar LP/Globalstar Capital
10.75%, due 11/01/04 .................. 250,000 163,125
Globalstar LP/Globalstar Capital
11.50%, due 06/01/05 .................. $ 250,000 165,625
Globalstar Telecommunications
(Wts) (a) ............................. 700 153,800
Level 3 Communications Inc. 9.125%,
due 05/01/08 .......................... $1,000,000 942,500
Level 3 Communications Inc.
0/10.50%, due 12/01/08 (c) ............ 750,000 452,812
Loral Space & Communication Ltd.
0/12.50%, due 01/15/07 (c) ............ $1,450,000 668,813
Loral Space & Communication Ltd.
(Wts) (a) ............................. 850 9,796
Loral Space & Communications Ltd.
9.50%, due 01/15/06 ................... $ 350,000 315,000
Metromedia Fiber Network Inc.
10.00%, due 11/15/08 .................. 500,000 512,500
Metromedia Fiber Network Inc.
10.00%, due 12/15/09 .................. 500,000 513,750
Qwest Communications International
Inc. (Series B) 0/8.29%, due 02/01/08
(c) ................................... 750,000 572,813
---------
5,080,284
Computer Software -- 0.51%
- -----------------------------------------------------------------------
PSINet Inc. 10.50%, due 12/01/06 ........ 550,000 556,875
Consumer Products -- 3.48%
- -----------------------------------------------------------------------
Chattem Inc. (Series B) 8.875%,
due 04/01/08 .......................... 1,100,000 1,034,000
Corning Consumer Products Company
(Series B) 9.625%, due 05/01/08 ....... 400,000 315,500
French Fragrances Inc. (Series B)
10.375%, due 05/15/07 ................. 550,000 532,125
French Fragrances Inc. (Series D)
10.375%, due 05/15/07 ................. 150,000 145,125
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Scotts Company 8.625%, due
01/15/09 .............................. $ 900,000 $ 879,750
Sealy Mattress Company (Series B)
0/10.875%, due 12/15/07 (c) ........... 1,250,000 879,688
---------
3,786,188
Containers/Packaging -- 1.89%
- -----------------------------------------------------------------------
Huntsman Packaging Corporation
9.125%, due 10/01/07 .................. 675,000 653,063
Owens Illinois Inc. 8.10%,
due 05/15/07 .......................... 100,000 95,582
Owens Illinois Inc. 7.35%,
due 05/15/08 .......................... 750,000 679,225
United States Can Corporation
(Series B) 10.125%, due 10/15/06 ...... 600,000 622,500
---------
2,050,370
Crude & Petroleum -- 0.55%
- -----------------------------------------------------------------------
Clark Refining & Marketing Inc.
8.875%, due 11/15/07 .................. 250,000 150,625
Trizec Hahn Corporation (Series B)
10.875%, due 12/01/05 ................. 1,000,000 447,500
---------
598,125
Drugs & Medical Products -- 2.23%
- -----------------------------------------------------------------------
Biovail Corporation International
10.875%, due 11/15/05 ................. 1,300,000 1,361,750
King Pharmaceuticals Inc. 10.75%,
due 02/15/09 .......................... 1,000,000 1,065,000
---------
2,426,750
Electronics -- 0.11%
- -----------------------------------------------------------------------
Axiohm Transaction Solutions 9.75%,
due 10/01/07 (b) ...................... 500,000 113,750
Energy -- 2.33%
- -----------------------------------------------------------------------
Calpine Corporation 7.75%,
due 04/15/09 .......................... 1,500,000 1,421,250
CMS Energy Corporation 7.50%,
due 01/15/09 .......................... 250,000 225,376
Ocean Energy Inc. (Series B) 8.375%,
due 07/01/08 .......................... 900,000 882,000
---------
2,528,626
Finance -- 1.42%
- -----------------------------------------------------------------------
PDVSA Finance Ltd. 9.375%,
due 11/15/07 .......................... 500,000 473,605
RBF Finance Company 11.00%,
due 03/15/06 .......................... 1,000,000 1,070,000
---------
1,543,605
Food & Beverages & Tobacco -- 2.89%
- -----------------------------------------------------------------------
Canandaigua Brands Inc. 8.625%,
due 08/01/06 .......................... 800,000 796,000
Canandaigua Brands Inc. 8.50%,
due 03/01/09 .......................... 100,000 95,250
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
72
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
ENTERPRISE HIGH-YIELD BOND FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
NBTY Inc. (Series B) 8.625%,
due 09/15/07 ........................... $1,000,000 $ 920,000
Stater Brothers Holdings Inc. 10.75%,
due 08/15/06 ........................... 1,050,000 1,052,625
Twin Laboratories Inc. 10.25%,
due 05/15/06 ........................... 260,000 273,325
---------
3,137,200
Gaming -- 2.48%
- ------------------------------------------------------------------------
Boyd Gaming Corporation 9.50%,
due 07/15/07 ........................... 500,000 496,250
Circus Circus Enterprises Inc. 9.25%,
due 12/01/05 ........................... 750,000 761,250
Empress Entertainment Inc. 8.125%,
due 07/01/06 ........................... 650,000 644,312
Mirage Resorts Inc. 6.75%,
due 08/01/07 ........................... 200,000 176,054
Trump Atlantic City Associates
11.25%, due 05/01/06 ................... 750,000 615,938
---------
2,693,804
Health Care -- 2.85%
- ------------------------------------------------------------------------
Columbia/HCA Healthcare
Corporation 7.15%, due 03/30/04 ........ 250,000 232,170
Columbia/HCA Healthcare
Corporation 7.00%, due 07/01/07 ........ 550,000 486,599
Columbia/HCA Healthcare
Corporation 7.25%, due 05/20/08 ........ 250,000 221,696
Dade International Inc. (Series B)
11.125%, due 05/01/06 .................. 450,000 439,875
Fisher Scientific International Inc.
9.00%, due 02/01/08 .................... 525,000 504,000
Quest Diagnostics Inc. 10.75%,
due 12/15/06 ........................... 750,000 789,375
Tenet Healthcare Corporation 8.125%,
due 12/01/08 ........................... 450,000 420,184
---------
3,093,899
Hotels & Restaurants -- 1.76%
- ------------------------------------------------------------------------
Foodmaker Corporation (Series B)
9.75%, due 11/01/03 .................... 350,000 357,493
Foodmaker Inc. 8.375%,
due 04/15/08 ........................... 850,000 792,625
Hammon (John Q.) Hotels 8.875%,
due 02/15/04 ........................... 300,000 271,125
Host Marriot LP 8.375%,
due 02/15/06 ........................... 250,000 235,938
Sbarro Inc. 11.00%,
due 09/15/09 ........................... 250,000 256,875
---------
1,914,056
Machinery -- 1.47%
- ------------------------------------------------------------------------
Applied Power Inc. 8.75%,
due 04/01/09 ........................... 850,000 830,875
Columbus McKinnon Corporation
8.50%, due 04/01/08 .................... 500,000 431,250
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Navistar International Corporation
(Series B) 8.00%, due 02/01/08 ......... $ 350,000 $ 336,000
---------
1,598,125
Medical Instruments -- 0.84%
- ------------------------------------------------------------------------
Charles River Labs 13.50%,
due 10/01/09 ........................... 350,000 364,000
Fisher Scientific International Inc.
9.00%, due 02/01/08 .................... 575,000 552,000
---------
916,000
Medical Services -- 0.72%
- ------------------------------------------------------------------------
Triad Hospitals Holdings Inc. 11.00%,
due 05/15/09 ........................... 750,000 780,000
Metals & Mining -- 2.27%
- ------------------------------------------------------------------------
AK Steel Corporation 7.875%,
due 02/15/09 ........................... 1,200,000 1,140,000
LTV Corporation 11.75%,
due 11/15/09 ........................... 200,000 208,500
Oregon Steel Mills Inc. 11.00%,
due 06/15/03 ........................... 200,000 206,500
WCI Steel Inc. (Series B) 10.00%,
due 12/01/04 ........................... 900,000 915,750
---------
2,470,750
Oil Services -- 1.14%
- ------------------------------------------------------------------------
Gulf Canada Resources Ltd. 8.375%,
due 11/15/05 ........................... 600,000 598,500
Gulf Canada Resources Ltd. 8.35%,
due 08/01/06 ........................... 400,000 387,606
Nuevo Energy Company 9.50%,
due 06/01/08 ........................... 250,000 249,687
---------
1,235,793
Paper & Forest Products -- 0.49%
- ------------------------------------------------------------------------
Buckeye Cellulose Corporation 8.50%,
due 12/15/05 ........................... 550,000 537,625
Printing & Publishing -- 1.93%
- ------------------------------------------------------------------------
Nebraska Book Company Inc. 8.75%,
due 02/15/08 ........................... 750,000 645,000
TV Guide Inc. 8.125%,
due 03/01/09 ........................... 1,450,000 1,450,000
---------
2,095,000
Retail -- 2.31%
- ------------------------------------------------------------------------
Boyds Collection Ltd. 9.00%,
due 05/15/08 ........................... 478,000 452,905
Buhrmann U.S. Inc. 12.25%,
due 11/01/09 ........................... 700,000 726,250
Cole National Group Inc. 8.625%,
due 08/15/07 ........................... 1,100,000 833,250
K Mart Corporation 8.375%,
due 12/01/04 ........................... 500,000 494,452
---------
2,506,857
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
73
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Portfolio of Investments -- (Continued)
ENTERPRISE HIGH-YIELD BOND FUND
December 31, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Telecommunications -- 17.99%
- -------------------------------------------------------------------------
21st Century Telecom Group Inc.
0/12.25%, due 02/15/08 (c) ............. $950,000 $ 635,313
AT & T Canada Inc Deposit Receipt
Class B ................................ 514 20,689
Bresnan Communications Group
8.00%, due 02/01/09 .................... $250,000 251,250
Bresnan Communications Group
9.25%, due 02/01/09 .................... 450,000 311,625
CCPR Services Inc. 10.00%,
due 02/01/07 ........................... 800,000 853,000
CINC Bell Inc. 9.00%,
due 04/15/08 ........................... 400,000 404,000
Crown Castle International
Corporation 0/10.625%, due
11/15/07 (c) ........................... 1,100,000 826,375
Crown Castle International
Corporation 9.00%, due 05/15/11 ........ $ 500,000 490,000
E. Spire Communications Inc. (Wts)
Expiration 11/01/05 (a) ................ 800 4,250
Firstworld Communications Inc.
0/13.00%, due 04/15/08 (c) ............. $ 500,000 271,875
Firstworld Communications Inc. (Wts)
Expiration 04/15/08 (a) (d) ............ 500 --
Flag Ltd. 8.25%,
due 01/30/08 ........................... $ 700,000 642,250
Global Crossings Holdings Ltd.
9.625%, due 05/15/08 ................... 350,000 348,250
ICG Holdings Inc. 0/12.50%,
due 05/01/06 (c) ....................... 1,000,000 758,750
ICG Services Inc. 0/10.00%, due
02/15/08 (c) ........................... 200,000 99,750
Intermedia Communications Inc.
(Series B) 0/11.25%, due 07/15/07
(c) .................................... 350,000 262,062
Intermedia Communications Inc.
(Series B) 8.50%, due 01/15/08 ......... 600,000 552,000
McLeodUSA Inc. 0/10.50%,
due 03/01/07 (c) ....................... 1,000,000 811,250
McLeodUSA Inc. 8.125%,
due 02/15/09 ........................... 500,000 466,250
Metronet Communications
Corporation 0/10.75%, due
11/01/07 (c) ........................... 500,000 412,500
Nextel Communications 9.75%,
due 08/15/04 ........................... 450,000 464,625
Nextel Communications 0/10.65%,
due 09/15/07 (c) ....................... 1,200,000 901,500
Nextel Communications 0/9.75%,
due 10/31/07 (c) ....................... 900,000 644,625
Nextel Communications 0/9.95%,
due 02/15/08 (c) ....................... 650,000 459,062
Nextel Communications 9.375%,
due 11/15/09 ........................... 750,000 736,875
Nextlink Communications 0/9.45%,
due 04/15/08 (c) ....................... 1,100,000 683,375
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Nextlink Communications 10.75%,
due 11/15/08 ........................... $ 900,000 $ 933,750
Omnipoint Corporation 11.50%,
due 09/15/09 ........................... 500,000 545,000
Omnipoint Corporation (Series A)
11.625%, due 08/15/06 .................. 250,000 266,250
Orange 8.00%, due 08/01/08 ............... $ 500,000 507,500
Pagemart (Wts) Expiration
12/31/03 (a) ........................... 3,450 42,228
Pagemart Nationwide Inc. ................. 1,750 27,125
Panamsat Corporation 6.375%,
due 01/15/08 ........................... 300,000 256,741
Pathnet Inc. 12.25%,
due 04/15/08 ........................... $ 250,000 160,000
Pathnet Inc. (Wts) Expiration
04/15/08 (a) (d) ....................... 250 --
RCN Corporation 0/11.125%,
due 10/15/07 (c) ....................... $ 350,000 250,688
RCN Corporation 10.00%,
due 10/15/07 ........................... 250,000 248,750
RCN Corporation 10.125%,
due 01/15/10 ........................... 200,000 199,500
RCN Corporation (Series B) 0/9.80%,
due 02/15/08 (c) ....................... 550,000 362,313
Rogers Cantel Inc. 8.80%,
due 10/01/07 ........................... 800,000 814,000
Teligent Inc. 11.50%, due 12/01/07 ....... 250,000 243,125
Voicestream Wire Company 10.375%,
due 11/15/09 ........................... 700,000 719,250
Winstar Communications Inc. 10.00%,
due 03/15/08 ........................... 950,000 909,625
Winstar Equipment Corporation
12.50%, due 03/15/04 ................... 700,000 761,250
-----------
19,558,596
Textiles -- 3.27%
- -------------------------------------------------------------------------
Phillips Van Heusen Corporation
9.50%, due 05/01/08 .................... 1,000,000 932,500
Polymer Group Inc. (Series B) 9.00%,
due 07/01/07 ........................... 550,000 537,625
Westpoint Stevens Inc. 7.875%,
due 06/15/08 ........................... 1,500,000 1,346,250
William Carter Company (Series A)
10.375%, due 12/01/06 .................. 850,000 742,688
-----------
3,559,063
Transportation -- 0.92%
- -------------------------------------------------------------------------
Northwest Airlines Inc. 8.52%,
due 04/07/04 ........................... 750,000 707,990
TBS Shipping International Ltd.
10.00%, due 05/01/05 (b) ............... 750,000 296,250
-----------
1,004,240
Travel/Entertainment/Leisure -- 0.22%
- -------------------------------------------------------------------------
International Game Technology
7.875%, due 05/15/04 ................... 250,000 243,125
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
74
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Portfolio of Investments -- (Continued)
ENTERPRISE HIGH-YIELD BOND FUND
December 31, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Utilities -- 0.98%
- -----------------------------------------------------------------------
AES Corporation 9.50%, due
06/01/09 ............................. $325,000 $ 327,437
Ferrellgas Partners LP (Series B)
9.375%, due 06/15/06 ................. 450,000 446,625
Midland Cogeneration Venture L P
(Series C-91) 10.33%, due 07/23/02.... 134,458 141,685
Midland Funding Corporation
(Series C-94) 10.33%,
due 07/23/02 ......................... 144,782 151,659
-----------
1,067,406
Waste Management -- 1.59%
- -----------------------------------------------------------------------
Allied Waste North America Inc.
7.625%, due 01/01/06 ................. 650,000 589,875
Allied Waste North America Inc.
7.875%, due 01/01/09 ................. 350,000 309,750
Waste Management Inc. 6.875%,
due 05/15/09 ......................... 1,000,000 832,570
-----------
1,732,195
Wireless Communications -- 1.13%
- -----------------------------------------------------------------------
Clearnet Communications Inc.
0/10.125%, due 05/01/09 (c) .......... 1,000,000 598,750
Telecorp PCS Inc. 0/11.625%,
due 04/15/09 (c) ..................... 1,000,000 631,250
-----------
1,230,000
-----------
Total Corporate Bonds, Convertible
Securities, Common & Preferred Stocks
(Identified cost $103,013,793)........................ 96,766,596
- -------------------------------------------------------- -----------
Foreign Bonds -- 7.55%
- -----------------------------------------------------------------------
Apparel & Textiles -- 0.22%
- -----------------------------------------------------------------------
Reliance Industries Ltd. 8.25%,
due 01/15/27 ......................... 250,000 237,267
Basic Industries -- 1.65%
- -----------------------------------------------------------------------
Cemex 12.75%, due 07/15/06 ............. 1,150,000 1,296,625
Cemex International Capital Inc.
9.66%, due 12/29/49 .................. 500,000 496,250
-----------
1,792,875
Broadcasting -- 1.64%
- -----------------------------------------------------------------------
Grupo Televisa 11.875%, due
05/15/06 ............................. 300,000 320,250
Grupo Televisa (Series A) 11.375%,
due 05/15/03 ......................... 700,000 746,210
Satelites Mexicanos 10.125%,
due 11/01/04 ......................... 800,000 544,000
TV Azteca 10.50%, due 02/15/07 ......... 200,000 177,000
-----------
1,787,460
Containers/Packaging -- 0.77%
- -----------------------------------------------------------------------
Vicap 11.375%, due 05/15/07 ............ 900,000 834,750
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares
or Principal
Amount Value
<S> <C> <C>
Energy -- 0.46%
- -----------------------------------------------------------------------
Petroleos Mexicanos 8.85%,
due 09/15/07 ......................... $ 250,000 $ 240,000
YPF Sociedad Anonima 9.125%,
due 02/24/09 ......................... 250,000 257,996
-----------
497,996
Government Bond -- 1.86%
- -----------------------------------------------------------------------
Republic of Argentina 12.125%,
due 02/25/19 ......................... $ 250,000 271,250
Republic of Argentina (Wts) Expiration
02/25/00 (a) ......................... 250 3,375
Republic of Argentina Global (Series
BGL4) 11.00%, due 10/09/06 ........... $ 900,000 925,000
Republic of Turkey 10.00%,
due 09/19/07 ......................... 250,000 241,875
United Mexican States 8.625%,
due 03/12/08 ......................... 300,000 293,250
United Mexican States 10.375%,
due 02/17/09 ......................... $ 250,000 266,250
United Mexican States (Wts)
Expiration 02/17/09 (a) .............. 250 23,125
-----------
2,024,125
Paper & Forest Products -- 0.50%
- -----------------------------------------------------------------------
Indah Kiat Finance Mauritius Ltd.
10.00%, due 07/01/07 ................. $ 350,000 259,000
Pindo Deli Finance Mauritius Ltd.
10.75%, due 10/01/07 ................. 400,000 291,000
-----------
550,000
Telecommunications -- 0.24%
- -----------------------------------------------------------------------
Nuevo Grupo Isuacell 14.25%,
due 12/01/06 ......................... 250,000 258,750
Transportation -- 0.21%
- -----------------------------------------------------------------------
TFM 10.25%, due 06/15/07 ............... 250,000 230,625
-----------
Total Foreign Bonds
(Identified cost $8,564,571).......................... 8,213,848
- -----------------------------------------------------------------------
Repurchase Agreement -- 1.61%
- -----------------------------------------------------------------------
State Street Bank & Trust Repurchase
Agreement 2.50%, due 01/03/00
Collateral: U.S. Treasury Note
$1,780,000, 6.25% due 2/15/07
Value $1,835,371...................... 1,755,000 1,755,000
-----------
Total Repurchase Agreement
(Identified cost $1,755,000).......................... 1,755,000
- -----------------------------------------------------------------------
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
75
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<PAGE>
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PORTFOLIO OF INVESTMENTS -- (CONTINUED)
ENTERPRISE HIGH-YIELD BOND FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
<S> <C>
Total Investments
(Identified cost $113,333,364).................. $106,735,444
Other Assets Less Liabilities -- 1.84% ......... 1,995,766
------------
Net Assets -- 100% ............................. $108,731,210
- ------------------------------------------------ ------------
</TABLE>
(a) Non-income producing security.
(b) In bankruptcy. Fund has ceased accrual of interest.
(c) Zero Coupon or Step Bond -- The interest rate on a step bond represents the
rate of interest that will commence its accrual on a predetermined date.
The rate shown for zero coupon bonds is the current effective yield.
(d) Security is fair valued at December 31, 1999.
(Wts) Warrants. Warrants entitle the Fund to purchase a predetermined number
of shares of stock and are non-income producing. The purchase price and
number of shares are subject to adjustment under certain conditions
until the expiration date.
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
76
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<PAGE>
Enterprise Government Securities Fund
TCW Investment Management Company
Los Angeles, California
Investment Management
TCW Investment Management Company (formerly TCW Funds Management, Inc.), a
wholly owned subsidiary of TCW Management Company, became manager of the
Enterprise Government Securities Fund on May 1, 1992. TCW manages approximately
$57 billion for institutional clients, and its normal investment minimum is $50
million.
Investment Objective
The objective of the Enterprise Government Securities Fund is to seek current
income and safety of principal.
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
and 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.
1999 Performance Review
The sharp rise in interest rates in 1999 represented clear evidence of the
market's recovery from the global financial crisis of the previous year. Yields
on 5 and 10-year benchmark U.S. treasury bonds rose approximately 1.80 percent
during the year and closed at yields of 6.35 percent and 6.44 percent,
respectively on December 31. The yield on the benchmark 30-year U.S. treasury
bond rose 1.39 percent to 6.48 percent, close to a two-year high at year-end.
The change in investor preference, from the safe haven of U.S. treasuries to
higher yielding asset classes such as corporate bonds and mortgage-backed
securities, was largely responsible for the rise in interest rates that occurred
early in 1999. But as the year progressed, several other factors put upward
pressure on interest rates. In particular, the robust growth rate of the U.S.
economy and sharply higher stock prices caused investors to grow increasingly
uneasy even though inflation remained well within tolerable limits. Tight labor
markets, Y2K concerns, a heavy new issue calendar and a weakening dollar also
drove interest rates higher. In spite of three rate hikes by the Federal Reserve
between June and November, investors remained concerned about the economy's
inflationary prospects and the likelihood of additional rate hikes.
Mortgage-backed securities were one of the top performing investment grade fixed
income asset classes in the fourth quarter and for the entire year. The annual
total rate of return of the Lehman Mortgage Index exceeded the annual returns of
the Lehman Government/Corporate Index and the Lehman Aggregate Index by 4.01
percent and 2.68 percent, respectively. In addition, mortgages surpassed
treasuries in 1999 to become the largest component in the Lehman Aggregate
Index. Strong technical trends, improving levels of market volatility, and
decreasing prepayment rates caused spreads between mortgages and treasuries to
tighten and boosted mortgage performance.
The spread between current coupon mortgages and Treasuries began the year at
approximately 1.70 percent, tightened to 1.21 percent in early May, and then
widened out to almost 1.80 percent in early August. In the last five months of
the year, spreads widened and contracted several times, but the basic trend was
one of contraction. Several factors and offsetting trends were responsible for
maintaining these historically very high levels of spread volatility throughout
THE ENTERPRISE Group of Funds, Inc.
77
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<PAGE>
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the year. One of these factors was extension risk. The Lehman Mortgage Index
began the year with a duration of 1.95 years and an average maturity of 5.09
years. By year-end, the duration of the Index had extended to 4.27 years and the
average maturity stood at 7.60 years. The cause of this maturity extension was
rising interest rates, which led to declining prepayment rates and extended the
maturities of mortgage-backed securities. Higher yields were required to
compensate investors for taking on the increased risks associated with these
uncertain and longer maturities and caused spreads between mortgages and
Treasuries to widen.
The heavy new issue calendar in corporates also put pressure on all fixed-income
sectors for most of the year. The budget surplus also played a role by reducing
the outstanding amount of Treasuries and making Treasuries expensive relative to
spread product. Spread volatility was also impacted when securities dealers
maintained smaller bond inventories at mid year to reduce their risk exposure.
Smaller inventories made price levels more difficult to gauge and led to wider
bid-ask spreads. Furthermore, trading volume in mortgage-backed securities was
lighter than usual for most of the year, primarily because banks were less
active as they accumulated cash reserves to cover their unknown year-end
liquidity demands. Fewer buyers of mortgage product increased dealers'
positioning risk and led to even lower inventory levels. Investor apathy also
drove mortgage spreads wider, as higher and higher yields were required to
entice uninterested investors into trades.
In spite of these pressures, a number of dominant factors caused spreads between
mortgages and Treasuries to narrow and kept performance relatively strong. Early
in the year, spreads tightened as the market recovered from the financial crisis
of the previous summer, when high volatility and historically low interest rates
had combined to make mortgages exceptionally undervalued. Technical factors
played an increasingly important role in the performance of mortgage sector as
the year progressed. The supply of new issue mortgages diminished steadily and
by year-end the monthly volume of new fixed rate issuance had declined by over
50 percent. Lower prepayment volatility also narrowed the spread between
mortgages and Treasuries. Over 60 percent of the agency mortgage universe is now
concentrated in coupons of 6.50 percent and 7.00 percent (which represent a good
proxy for the sector as a whole.) A rally of at least 1.00 percent from current
levels will be needed to trigger a refinancing of the 7.00 percent coupons.
[GRAPHIC APPEARS HERE]
www.enterprisefunds.com
THE ENTERPRISE Group of Funds, Inc.
78
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GROWTH OF A $10,000 INVESTMENT
[CHART APPEARS HERE]
Enterprise Lehman Brothers Lipper General US
Government Intermediate Government
Securities Government Fund
Fund - A Bond Index Index
---------- --------------- ------------------
12/31/89 9528 10000 10000
1990 10424 10956 10802
1991 11737 12501 12382
1992 12899 13368 13137
1993 14099 14460 14230
1994 12998 14207 13556
1995 15468 16254 15852
1996 16441 16914 16194
1997 17821 18220 17670
1998 19036 19767 19056
1999 19147 19864 18551
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE GOVERNMENT SECURITIES FUND - A ONE YEAR FIVE YEAR TEN YEAR
With Sales Charge -4.23% 7.01% 6.71%
Without Sales Charge 0.58% 8.05% 7.23%
Lehman Brothers Int. Gov't Bond Index* 0.49% 6.93% 7.10%
Lipper General US Gov't Fund Index* -2.66% 6.47% 6.37%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE GOVERNMENT SECURITIES FUND - B ONE YEAR 5/1/95-12/31/99
With Sales Charge -4.88% 6.09%
Without Sales Charge 0.12% 6.43%
Lehman Brothers Int. Gov't Bond Index* 0.49% 6.25%
Lipper General US Gov't Fund Index* -2.66% 5.66%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE GOVERNMENT SECURITIES FUND - C ONE YEAR 5/1/97-12/31/99
With Sales Charge -0.88% 5.11%
Without Sales Charge 0.12% 5.11%
Lehman Brothers Int. Gov't Bond Index* 0.49% 5.78%
Lipper General US Gov't Fund Index* -2.66% 4.87%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ONE YEAR 7/31/97-12/31/99
ENTERPRISE GOVERNMENT SECURITIES FUND - Y 1.04% 4.76%
Lehman Brothers Int. Gov't Bond Index* 0.49% 4.88%
Lipper General US Gov't Fund Index* -2.66% 3.38%
The performance of Classes B, C and Y will vary from the performance of Class A
shown in the above line graph based on differences in sales charges and expenses
paid by shareholders investing in the different classes.
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
*The Lehman Brothers Intermediate Government Bond Index is an unmanaged index of
all publicly held US Treasury, government agency, quasi-federal corporate, and
corporate debt guaranteed by the US government with maturities of one to 9.99
years. It assumes the reinvestment of dividends and capital gains and excludes
management fees or expenses. The Lipper General US Government Fund Index is an
unmanaged index of the 30 largest funds, based on total year-end net asset
value, in the Lipper General US Government Fund category. It assumes the
reinvestment of dividends and capital gains and does not include any management
fees or expenses. One cannot invest in an index.
Future Investment Strategy
The mortgage market now appears to be fairly valued. With a current weighted
average price of approximately 96, changes in volatility matter much less now
than they did at the beginning of the year when the mortgage market's average
price was approximately 102. Mortgage spreads have tightened 0.40 percent in the
last 5 months, but could tighten further due to positive technicals. Analysts
expect the banks to reenter the market once their Y2K concerns have abated, and
increased demand in the absence of an increase in supply may cause spreads to
further contract. Although the possibility of another rate hike by the Federal
Reserve in early 2000 seems likely, today's higher yield levels combined with
TCW's focus on security structure allow TCW to maintain a positive outlook on
the mortgage sector.
Although government securities may be guaranteed as to the timely payment of
principal and interest, fund shares are not insured and their value will
fluctuate based on market conditions.
The views expressed in this report reflect those of the Fund Manager only
through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
THE ENTERPRISE Group of Funds, Inc.
79
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<PAGE>
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PORTFOLIO OF INVESTMENTS
ENTERPRISE GOVERNMENT SECURITIES FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
U.S. Government & Agency Obligations -- 78.75%
- ---------------------------------------------------------------------
Freddie Mac Participation Certificates -- 5.15%
- ---------------------------------------------------------------------
FHLPC 7.00%, due 09/01/17 ............ $ 1,219,467 $ 1,190,428
FHLPC 7.00%, due 10/01/17 ............ 1,554,326 1,518,154
FHLPC 10.00%, due 10/01/18 ........... 684,313 733,932
FHLPC 10.00%, due 07/01/20 ........... 1,116,844 1,198,607
FHLPC 10.00%, due 10/01/20 ........... 488,397 522,626
FHLPC 9.00%, due 10/01/22 ............ 1,095,020 1,137,440
------------
6,301,187
Federal Housing Administration -- 18.11%
- ---------------------------------------------------------------------
FHA 7.75%, due 05/01/18 .............. 6,078,606 5,949,436
FHA 7.80%, due 09/01/23 .............. 2,704,268 2,646,803
FHA 8.70%, due 12/01/27 .............. 2,543,129 2,552,666
FHA 7.625%, due 06/01/28 ............. 3,650,610 3,554,781
FHA 7.00%, due 10/01/28 .............. 2,283,325 2,177,721
FHA 6.75%, due 11/01/28 .............. 2,184,198 2,053,146
FHA 7.18%, due 02/20/29 .............. 3,355,746 3,217,322
------------
22,151,875
Federal National Mortgage Association -- 21.53%
- ---------------------------------------------------------------------
FNMA 5.50%, due 01/01/09 ............. 1,418,178 1,351,423
FNMA 5.50%, due 02/01/09 ............. 4,409,430 4,193,626
FNMA 5.50%, due 02/01/09 ............. 2,881,288 2,734,261
FNMA 6.50%, due 02/01/09 ............. 106,930 104,967
FNMA 5.50%, due 06/01/09 ............. 2,880,389 2,731,436
FNMA 7.00%, due 03/01/14 ............. 1,226,521 1,199,437
FNMA 8.00%, due 11/01/16 ............. 1,884,784 1,903,632
FNMA 10.00%, due 07/01/20 ............ 128,041 137,037
FNMA 10.00%, due 07/01/20 ............ 217,778 233,010
FNMA 9.50%, due 08/01/20 ............. 517,591 544,917
FNMA 9.50%, due 10/01/20 ............. 740,127 779,232
FNMA 6.00%, due 11/01/28 ............. 3,808,350 3,497,015
FNMA 6.00%, due 11/01/28 ............. 7,532,204 6,920,905
------------
26,330,898
Government National Mortgage Association -- 30.78%
- ---------------------------------------------------------------------
GNMA 9.00%, due 08/15/16 ............. 3,925 4,091
GNMA 7.00%, due 12/15/27 ............. 3,606,740 3,506,745
GNMA 6.50%, due 08/15/28 ............. 1,443,275 1,358,309
GNMA 6.50%, due 02/20/29 ............. 9,719,127 9,097,343
GNMA 6.50%, due 05/15/29 ............. 4,933,857 4,634,489
GNMA 7.00%, due 10/15/29 ............. 4,995,193 4,823,678
GNMA 7.00%, due 10/15/33 ............. 14,708,168 14,227,186
------------
37,651,841
U.S. Treasury Notes -- 3.18%
- ---------------------------------------------------------------------
U.S. Treasury Note 8.875%, due
05/15/00 ........................... 380,000 384,783
U.S. Treasury Note 6.50%, due
08/15/05 ........................... 3,500,000 3,499,094
------------
3,883,877
------------
Total U.S. Government & Agency Obligations
(Identified cost $100,486,239)...........................96,319,678
- ---------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
Collateralized Mortgage Obligations -- 4.64%
- ---------------------------------------------------------------------
Chase Mortgage Finance Corporation
5.13%, due 05/25/28 (v) ............ $ 3,386,325 $ 2,167,248
FNMA Remic 6.50%, due 06/25/23 ....... 348,042 339,972
Freddie Mac Series 1552 Class YA
6.37%, due 08/15/23 (v) ............ 1,291,553 1,086,519
Freddie Mac Series 1634 Class SB
8.80%, due 12/15/23 (v) ............ 2,222,727 2,081,028
------------
Total Collateralized Mortgage Obligations
(Identified cost $5,987,694)....................... 5,674,767
- ---------------------------------------------------------------------
Corporate Bonds -- 8.32%
- ---------------------------------------------------------------------
PNC Mortgage Securities Corporation
6.25%, due 02/25/14 ................ 3,732,013 3,558,213
PNC Mortgage Securities Corporation
Series 1998-5 6.625%, due
07/25/28 ........................... 1,879,134 1,822,741
Structured Asset Securities
Corporation 6.75%, due 03/25/29..... 4,656,940 4,393,532
Superior Wholesale Inventory
Financing Trust Series 1997-A
6.346%, due 11/15/04 ............... 403,521 400,574
------------
10,175,060
------------
Total Corporate Bonds
(Identified cost $10,689,835)....................... 10,175,060
- ---------------------------------------------------------------------
Commercial Paper -- 3.26%
- ---------------------------------------------------------------------
General Electric Capital Corporation
6.55%, due 01/12/00 ................ 3,000,000 2,993,996
General Electric Capital Corporation
6.28%, due 01/13/00 ................ 1,000,000 997,906
------------
Total Commercial Paper
(Identified cost $3,991,903)....................... 3,991,902
- ---------------------------------------------------------------------
Repurchase Agreement -- 4.53%
- ---------------------------------------------------------------------
State Street Bank & Trust Repurchase
Agreement 2.50%, due 01/03/00
Collateral: U.S. Treasury Note,
$5,615,000, 6.25% due 02/15/07
Value $5,789,668.................... 5,542,000 5,542,000
------------
Total Repurchase Agreement
(Identified cost $5,542,000)....................... 5,542,000
- ---------------------------------------------------------------------
Total Investments
(Identified cost $126,697,671)..................... $121,703,407
Other Assets Less Liabilities -- 0.50% ............ 606,657
------------
Net Assets -- 100% ................................ $122,310,064
- ---------------------------------------------------------------------
</TABLE>
(v) Variable interest rate security; interest rate is as of December 31, 1999.
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
80
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- ------- -------------
ENTERPRISE TAX-EXEMPT INCOME FUND
- ------- -------------
MBIA Capital Management Corp.
Armonk, New York
Investment Management
MBIA Capital Management Corp. became manager of the Enterprise Tax-Exempt
Income Fund on January 1, 1998. MBIA Capital Management Corp. manages
approximately $30 billion for institutional clients, and its normal investment
minimum is $10 million.
Investment Objective
The investment objective of the Enterprise Tax-Exempt Income Fund is to seek a
high level of current income exempt from federal income tax, with consideration
given to preservation of principal.
Investment Strategies
The Tax-Exempt Income Fund invests primarily in investment grade, tax-exempt
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. The Fund may also
invest up to 20 percent 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 percent of its net assets in municipal securities, the interest on which
is subject to the federal alternative minimum tax.
1999 Performance Review
The strong economy, combined with the Federal Reserve's efforts to raise
interest rates, resulted in a very difficult year for municipal bonds. In 1999,
municipal interest rates increased 0.93 percent to 0.99 percent across the yield
curve. The Bond Buyer 40 Index yield rose from a low of 5.09 percent on January
29 to a high of 6.16 percent on Dec 16, 1999. The impact of rising rates was
exacerbated by duration extension, as municipal bonds tended to be more
price-sensitive as interest rates rose. In addition, one of the most significant
factors in the municipal market this year was the market discount penalty. Under
the Federal tax rules for market discount bonds, a bond's discount is taxable at
the individual's tax rate when the bond is purchased at a significant discount
to its issued price. A market discount penalty is applied to bonds subject to
this rule in order to equate their after-tax yield to other bonds not subject to
the penalty. This penalty can be substantial and it can further compound a
bond's negative performance as interest rates rise.
On a bright note, municipal bonds did outperform Treasuries over the year. Long
insured municipal bonds ended 1999 at a ratio of 93.77 percent to comparable
Treasuries versus an average of 94.04 percent for 1999, and 88.92 percent over
the past five years. During the year, the long municipal to Treasury ratio hit a
low of 89.3 percent in June, with the highest level, 102.43 percent, coming in
early January. Long municipals remain historically cheap to Treasuries. It will
probably need a lower or at least a stable rate environment to bring the long
municipal to Treasury ratio back to more historic levels.
The U.S. economic expansion continued to strengthen most municipal credits in
1999. Credit upgrades by Standard & Poor's outnumbered downgrades by more than 7
times in 1999.
THE ENTERPRISE Group of Funds, Inc.
81
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New issue volume for 1999 came in at $226 billion, a 21 percent decline from
1998's big volume year. New money issuance was flat, with refundings down 54
percent from 1998. Refunding volume in 2000 may continue to decline from 1999
levels, given higher interest rates and the lack of outstanding high coupon
bonds. Total new issue volume expectations for 2000 are $200 billion to $230
billion.
The Fund benefited during the year from MBIA's active sector, curve and
structure management. As interest rates rose during the year, MBIA shortened the
Fund's duration from a 5 percent overweight versus the Lehman Index to a neutral
stance (invested assets only) by year-end. Fund structure was improved by the
addition of defensively structured higher coupon bonds (by year-end the Fund's
average coupon was 0.25 percent higher than the index, up from 6 basis points at
year-end 1998), with good call protection or non-call structures. MBIA's
underexposure versus the index to the long end of the curve also helped
performance as bonds maturing in 22 years or longer underperformed the general
market by 4.61 percent. The Fund's reduced allocation to the insured sector,
from an 11 percent overweight at year-end 1998 to a 10 percent underweight at
year-end, also helped boost performance as the insured sector was the
worst-performing sector for the year.
GROWTH OF A $10,000 INVESTMENT
[CHART APPEARS HERE]
Enterprise Lehman Brothers Lipper
Tax-Exempt Municipal General
Income Bond Municipal
Fund - A Index Debt Index
------------------ --------------- ----------
12/31/89 9526 10000 10000
1990 10070 10729 10599
1991 11191 12032 11876
1992 12072 13093 12933
1993 13371 14701 14540
1994 12610 13946 13662
1995 14483 16381 16027
1996 14995 17108 16601
1997 16039 18682 18159
1998 16988 19893 19184
1999 16520 19481 18403
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE TAX-EXEMPT INCOME FUND - A ONE YEAR FIVE YEAR TEN YEAR
With Sales Charge -7.39% 4.52% 5.15%
Without Sales Charge -2.76% 5.55% 5.66%
Lehman Brothers Municipal Bond Index* -2.07% 6.91% 6.90%
Lipper General Municipal Debt Index* -4.07% 6.14% 6.29%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE TAX-EXEMPT INCOME FUND - B ONE YEAR 5/1/95-12/31/99
With Sales Charge -8.13% 3.53%
Without Sales Charge -3.29% 3.90%
Lehman Brothers Municipal Bond Index* -2.07% 5.84%
Lipper General Municipal Debt Index* -4.07% 5.03%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ENTERPRISE TAX-EXEMPT INCOME FUND - C ONE YEAR 5/1/97-12/31/99
With Sales Charge -4.20% 2.96%
Without Sales Charge -3.23% 2.96%
Lehman Brothers Municipal Bond Index* -2.07% 4.76%
Lipper General Municipal Debt Index* -4.07% 3.66%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDING DECEMBER 31, 1999
ONE YEAR 11/30/98-12/31/99
ENTERPRISE TAX-EXEMPT INCOME FUND - Y -2.32% -1.98%
Lehman Brothers Municipal Bond Index* -2.07% -1.68%
Lipper General Municipal Debt Index* -4.07% -3.60%
The performance of Classes B, C and Y will vary from the performance of Class A
shown in the above line graph based on differences in sales charges and expenses
paid by shareholders investing in the different classes.
Enterprise performance numbers include the applicable maximum sales charge and
all fees. Past performance is no guarantee of future results. The investment
returns and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
*The Lehman Brothers Municipal Bond Index is an unmanaged index of approximately
1,100 investment grade tax-exempt bonds classified into four sectors - general
obligation, revenue, insured, and prerefunded. It assumes the reinvestment of
dividends and capital gains and excludes management fees and expenses. The
Lipper General Municipal Debt Fund Index is an unmanaged index of the 10 largest
funds, based on total year-end net asset value, in the Lipper General Municipal
Debt Fund category. It assumes the reinvestment of dividends and capital gains
and does not include any management fees or expenses. One cannot invest in an
index.
THE ENTERPRISE Group of Funds, Inc.
82
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Future Investment Strategy
This attractive historical municipal relationship to Treasuries and widely
expected tighter credit spreads in the taxable bond market this coming year may
encourage increased participation in the municipal market in 2000. As such, MBIA
remains positive on the asset class. With the Federal Reserve in a tightening
mode, MBIA will continue to emphasize cautious credit, structure and curve
allocations for the Fund.
Depending on an investor's specific situation, distributions from this fund may,
at times, be subject to ordinary, alternative minimum and capital gains taxes.
The views expressed in this report reflect those of the Fund Manager only
through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
[GRAPHIC OMITTED]
www.enterprisefunds.com
THE ENTERPRISE Group of Funds, Inc.
83
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- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
ENTERPRISE TAX-EXEMPT INCOME FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
Municipal Bonds -- 95.90%
- -------------------------------------------------------------------------
Alabama -- 0.85%
- -------------------------------------------------------------------------
Alabama Housing Finance Authority
Single Family Mortgage Revenue Home
Mortgage GNMA Collateral Series A-1
6.55% due 10/01/14 ........................ $ 240,000 $ 246,408
Colorado -- 3.28%
- -------------------------------------------------------------------------
Colorado Springs Company Sales 5.00%
due 12/01/12 .............................. 1,000,000 955,600
Florida -- 0.99%
- -------------------------------------------------------------------------
Broward County, Broward Recovery
Revenue 7.95% due 12/01/08 ................ 280,000 288,904
Georgia -- 6.98%
- -------------------------------------------------------------------------
Atlanta Downtown Development
Authority Underground Atlanta Project
6.25% due 10/01/12 ........................ 500,000 522,665
Georgia Municipal Electric Authority
Power Revenue Series V 6.30% due
01/01/05 .................................. 400,000 423,792
Georgia State Series C 6.25% due
08/01/12 .................................. 1,000,000 1,084,130
----------
2,030,587
Iowa -- 2.90%
- -------------------------------------------------------------------------
Iowa Finance Authority Hospital Facility
Revenue Iowa Health Systems Series A
(MBIA Insured) 5.125% due 01/01/28 ........ 1,000,000 842,800
Louisiana -- 0.50%
- -------------------------------------------------------------------------
Louisiana State Offshore Term Authority
Deepwater Port Revenue Series E
7.60% due 09/01/10 ........................ 140,000 144,840
Massachusetts -- 2.71%
- -------------------------------------------------------------------------
Massachusetts State Housing Finance
Agency Revenue Residential FNMA
Collateral-Series A 6.90% due
11/15/24 .................................. 750,000 789,840
Michigan -- 9.89%
- -------------------------------------------------------------------------
Michigan Municipal Bond Authority
Revenue Clean Water Revolving Fund
5.75% due 10/01/16 ........................ 1,000,000 997,580
Michigan State Building Authority
Revenue Series I 6.40% due 10/01/04 ....... 1,000,000 1,046,600
Wayne Charter County Michigan Airport
Revenue Detroit Metropolitan Wayne
Charter County Airport Series B (MBIA
Insured) 5.00% due 12/01/28 ............... 1,000,000 835,940
----------
2,880,120
Minnesota -- 3.52%
- -------------------------------------------------------------------------
Minnesota State 5.60% due 10/01/02 .......... 1,000,000 1,024,860
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
Missouri -- 6.83%
- -------------------------------------------------------------------------
Kansas City Missouri Municipal
Assistance Corporation Refunding
Leasehold Roe Bartle Series A (MBIA
Insured) 5.00% due 04/15/04 ............... $1,000,000 $1,007,100
Missouri State Health & Educational
Facilities Authority St. Louis University
5.50% due 10/01/15 ........................ 1,000,000 980,090
----------
1,987,190
Nebraska -- 3.42%
- -------------------------------------------------------------------------
Omaha Public Power District Nebraska
Electric Revenue Series D 5.10% due
02/01/08 .................................. 1,000,000 996,750
Nevada -- 2.89%
- -------------------------------------------------------------------------
Clark County School District Series A
(MBIA Insured) 7.00% due 06/01/11 ......... 750,000 842,032
New Jersey -- 2.68%
- -------------------------------------------------------------------------
New Jersey State Refunding Series F
5.25% due 08/01/13 ........................ 800,000 780,760
New York -- 9.81%
- -------------------------------------------------------------------------
Municipal Assistance Corporation New
York Series J 5.75% due 07/01/03 .......... 300,000 310,026
New York State Local Government
Assistance 7.00% due 04/01/21
(Prerefunded 04/01/01 at 102) ............. 200,000 209,924
New York, New York Series J (MBIA
Insured) 5.50% due 05/15/16 ............... 1,000,000 960,100
Triborough Bridge & Tunnel Authority,
New York General Purpose Series A
6.00% due 01/01/10 ........................ 1,300,000 1,375,478
----------
2,855,528
Ohio -- 3.42%
- -------------------------------------------------------------------------
Ohio State Building Authority Refunding
James A Rhodes Office A 5.25% due
06/01/10 .................................. 1,000,000 994,740
Oklahoma -- 5.23%
- -------------------------------------------------------------------------
Tulsa, Oklahoma General Obligation
Bonds 6.30% due 06/01/17 .................. 1,500,000 1,521,690
South Carolina -- 4.08%
- -------------------------------------------------------------------------
South Carolina State Public Service
Authority Series A (MBIA Insured)
5.75% due 01/01/15 ........................ 1,200,000 1,186,620
Texas -- 18.17%
- -------------------------------------------------------------------------
Harris County Texas Health Facilities
Development Christus Health Series A
5.75% due 07/01/14 ........................ 1,000,000 976,660
Houston Texas Prerefunded Series C
6.00% due 03/01/05 (Prerefunded
3/01/02 at 100) ........................... 140,000 143,910
Houston Texas Unrefunded Series C
6.00% due 03/01/05 ........................ 360,000 368,129
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
84
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- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
ENTERPRISE TAX-EXEMPT INCOME FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
San Antonio Texas Electric & Gas
Revenue Refunding Series A 5.25%
due 02/01/13 ........................ $ 500,000 $ 479,255
San Antonio Texas Independent School
District (Public School
Fund-Guaranteed Insured) 5.125%
due 08/15/22 ........................ 1,000,000 879,930
Texas State Refunding Public Finance
Authority 5.50% due 10/01/06 ........ 1,000,000 1,032,170
Texas State Department Housing
Community Affairs Home Mortgage
Revenue GNMA Collateral Series A
6.95% due 07/01/23 .................. 375,000 389,250
Texas Tech University Revenues
Refunding & Improvement Financing
Systems 3rd Series (AMBAC Insured)
5.375% due 02/15/17 ................. 1,000,000 1,021,060
-----------
5,290,364
Utah -- 3.06%
- -------------------------------------------------------------------
Utah County Utah Hospital Revenue IHC
Health Services Incorporated (MBIA
Insured) 5.25% due 08/15/21 ......... 1,000,000 890,770
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
Washington -- 1.81%
- -------------------------------------------------------------------
Washington State Series B + At 7 6.40%
due 06/01/17 ........................ $ 500,000 $ 525,540
Wisconsin -- 2.88%
- -------------------------------------------------------------------
Milwaukee Wisconsin Series F 6.00%
due 11/15/04 ........................ 800,000 839,424
-----------
Total Municipal Bonds
(Identified Cost $28,554,172)....................... 27,915,367
- ---------------------------------------------------- --------------
Total Investments
(Identified cost $28,554,172)....................... $27,915,367
Other Assets Less Liabilities -- 4.10% ............. 1,194,943
-----------
Net Assets -- 100% ................................. $29,110,310
- -------------------------------------------------------------------
</TABLE>
(AMBAC) American Bond Assurance Corp.
(MBIA) Municipal Bond Insurance Association.
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
85
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- --------------------------------------------------------------------------------
<PAGE>
- ------------- -------
ENTERPRISE MONEY MARKET FUND
- ------------- -------
Enterprise Capital Management, Inc.
Atlanta, Georgia
Investment Management
Enterprise Capital Management, Inc., which provides mutual fund investment
advisory services for The Enterprise Group of Funds, is a member of The MONY
Group, Inc. (NYSE: MNY) and has managed the Enterprise Money Market Fund since
May 1, 1992.
Investment Objective
The objective of the Enterprise Money Market Fund is the highest possible level
of current income consistent with the preservation of capital and liquidity.
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.
1999 Performance Review
The U.S.'s economic performance maintained a strong pace throughout 1999.
Consumer spending, with retail sales growth for 1999 of 8.9 percent (a 15-year
high), demonstrated particular strength in the second half of 1999 as evidenced
by record vehicle sales in 1999. Healthy real wage growth and the
well-publicized torrid performance of the U.S. equity markets (led by the
NASDAQ's 51.4 percent gain from its October 19 quarterly low through year-end)
leant support to buoyant consumer spending. The labor markets remained very
tight with unemployment remaining at 4.1 percent at the end of the year.
On the fiscal front, the federal government is generating substantial surpluses
beyond expectations. Thus, the economy carried significant momentum into the New
Year. All this is taking place in an environment with little in the way of
inflationary signs. In fact, despite the above-trend 4 percent real GDP growth
likely turned in by the U.S. economy in 1999, core inflation in 1999 probably
fell modestly below that of 1998 (1.9 percent vs. 1998's 2.5 percent). Clearly,
commodity prices have picked up measurably in 1999 as oil prices doubled for
instance. Nevertheless, there has been minimal translation of higher raw
materials and input price increases into consumer-level prices. While the
producer-level PPI grew 3.0 percent in 1999, healthy labor productivity of 3
percent reduced the need for producers to increase prices.
The Fed reacted to the persistent strength in the U.S. economy by raising the
federal funds target rate several times during 1999. The Fed seems poised to
again raise interest rates at the February 1-2 meeting based on continued
above-trend economic growth. Such action was not taken by the Fed at its
December meeting due to the Fed's unwillingness to create any instability in the
financial markets in front of the changeover to the Year 2000, which has proven
to be a non-event relative to some of the dire predictions made. In its December
post-meeting commentary, the Fed was very clear in describing its adoption of a
neutral bias on prospective interest rate changes as applicable only to the
period before the upcoming February meeting to ensure a smooth transition to
2000. The Fed also expressed clear concern over the economy's strength and
potential for supply/demand imbalances developing leading to inflationary
pressure. Thus, the Fed telegraphed a rate hike at the February meeting, which
is priced into the market. In addition, the market is also anticipating another
tightening by the Fed in the next three months.
To capitalize on the upward move in money market interest rates and significant
premium paid by issuers to extend maturities beyond year-end, the Money Market
Fund locked in attractive yields in issues extending into 2000. While money
market rates in the first half of January have dropped precipitously relative to
those seen in December, attractive opportunities to extend into longer
maturing/higher yielding investments may soon become available. This may come to
pass as the ability of the economy to stave off inflationary pressures may
surprise even the Fed.
THE ENTERPRISE Group of Funds, Inc.
86
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- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Future Investment Strategy
Going forward, the average maturity of the Fund may be adjusted selectively to
capitalize on opportunities where the Fund will be rewarded for duration
extension. The Fund is being managed to react quickly to the change of investor
expectations. Short maturity investments allow flexibility, while some longer
maturity investments lock in yields
An investment in the Enterprise Money Market Fund is not insured or guaranteed
by the Federal Deposit Insurance Corporation or any other government agency.
Although the 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.
The views expressed in this report reflect those of the Fund Manager only
through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
[GRAPHIC OMITTED]
www.enterprisefunds.com
THE ENTERPRISE Group of Funds, Inc.
87
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- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
ENTERPRISE MONEY MARKET FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
Commercial Paper -- 94.57%
- ---------------------------------------------------------------------
American Express Credit Corporation
5.90% due 02/18/00 .................. $ 7,364,000 $ 7,306,070
American General Finance
Corporation, 6.04% due 01/27/00 ..... 10,000,000 9,956,378
American Home Products
Corporation 5.68% due 02/25/00 ...... 3,500,000 3,469,628
American Telephone & Telegraph
Company, 5.70% due 02/29/00 ......... 1,500,000 1,485,988
Aristar Inc.
6.05% due 01/28/00 .................. 2,500,000 2,488,656
Aristar Inc.
6.15% due 01/31/00 .................. 3,800,000 3,780,525
Aristar Inc.
6.10% due 02/04/00 .................. 4,700,000 4,672,923
Associates Corporation of North
America, 6.00% due 01/20/00 ......... 400,000 398,733
Associates Corporation of North
America, 6.00% due 02/01/00 ......... 10,000,000 9,948,333
Bank of New York
5.76% due 02/24/00 .................. 5,000,000 4,956,800
British Columbia Province
5.69% due 05/08/00 .................. 8,500,000 8,328,036
Coca Cola Enterprises Inc.
5.45% due 02/22/00 .................. 6,200,000 6,151,192
Colonial Pipeline Company
5.95% due 03/20/00 .................. 3,895,000 3,844,143
Conagra Inc.
6.37% due 01/05/00 .................. 1,875,000 1,873,673
Countrywide Home Loans Inc.
6.00% due 02/02/00 .................. 1,440,000 1,432,320
Dominion Resources Inc.
6.43% due 01/11/00 .................. 2,250,000 2,245,981
Edison Asset Securitization
6.28% due 01/13/00 .................. 2,850,000 2,844,034
Edison Asset Securitization
5.85% due 01/14/00 .................. 1,000,000 997,888
Enterprise Funding Corporation
5.93% due 01/24/00 .................. 5,000,000 4,981,057
Enterprise Funding Corporation
6.10% due 01/25/00 .................. 4,700,000 4,680,887
Finova Capital Corporation
6.00% due 01/28/00 .................. 3,470,000 3,454,385
Finova Capital Corporation
6.07% due 02/03/00 .................. 5,475,000 5,444,536
Ford Motor Credit Company
5.96% due 01/11/00 .................. 3,400,000 3,394,371
Ford Motor Credit Company
6.343% due 02/18/00 ................. 5,000,000 4,957,717
General Electric Capital Corporation
Discount Note, 6.25% due
01/12/00 ............................ 11,000,000 10,978,993
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
General Motors Acceptance
Corporation, 5.77% due 02/18/00 ..... $ 6,000,000 $ 5,953,840
Golden Funding Corporation
7.00% due 01/27/00 .................. 1,990,000 1,979,939
Golden Funding Corporation
5.82% due 03/03/00 .................. 7,000,000 6,929,837
GTE Corporation
6.05% due 01/19/00 .................. 1,400,000 1,395,765
GTE Corporation
5.97% due 01/25/00 .................. 3,275,000 3,261,966
Heller Financial Inc.
5.90% due 03/02/00 .................. 4,350,000 4,306,512
Heller Financial Inc.
5.85% due 03/22/00 .................. 6,650,000 6,562,469
Household Finance Corporation
5.73% due 02/03/00 .................. 8,000,000 7,957,980
Household International Inc.
6.05% due 02/08/00 .................. 1,800,000 1,788,505
JP Morgan & Company Inc.
5.70% due 03/27/00 .................. 700,000 690,468
John Deere Capital Corporation
5.90% due 02/08/00 .................. 3,200,000 3,180,071
Johnson Controls Inc.
5.93% due 01/27/00 .................. 7,500,000 7,467,879
Lehman Brothers Holdings Inc.
6.15% due 03/15/00 .................. 3,000,000 3,001,922
Merrill Lynch & Company Inc.
5.94% due 02/28/00 .................. 11,000,000 10,894,730
Montauk Funding Corporation
5.92% due 02/08/00 .................. 11,000,000 10,931,262
Nabisco Inc.
6.40% due 01/11/00 .................. 2,250,000 2,246,000
Province of Quebec
5.85% due 06/01/00 .................. 5,500,000 5,364,150
Sears Roebuck Acceptance
Corporation, 6.15% due 02/29/00 ..... 8,700,000 8,612,311
Sony Capital Corporation
5.75% due 01/14/00 .................. 2,720,000 2,714,352
Sony Capital Corporation
6.38% due 01/14/00 .................. 7,975,000 7,956,626
Toronto Dominion Holdings
6.11% due 01/10/00 .................. 100,000 99,847
Trident Capital Finance Inc.
6.39% due 01/25/00 .................. 3,700,000 3,684,238
Trident Capital Finance Inc.
6.00% due 01/28/00 .................. 5,500,000 5,475,250
Walt Disney Company
5.53% due 06/16/00 .................. 7,996,000 7,790,879
Windmill Funding Corporation
5.70% due 01/04/00 .................. 250,000 249,882
------------
Total Commercial Paper
(Identified cost $234,569,927)....................... 234,569,927
- ----------------------------------------------------- ---------------
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
88
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<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
ENTERPRISE MONEY MARKET FUND
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
Federal Home Loan Banks -- 1.61%
- -------------------------------------------------------------------------
Federal Home Loan Banks
5.00% due 02/10/00 ..................... $4,000,000 $ 4,000,000
------------
Total Federal Home Loan Banks
(Identified cost $4,000,000).......................... 4,000,000
- -------------------------------------------------------- ------------
Certificates of Deposit -- 2.42%
- -------------------------------------------------------------------------
Union Bank Treasury Division
5.99% due 09/15/00 ..................... 6,000,000 6,000,000
------------
Total Certificates of Deposit
(Identified cost $6,000,000).......................... 6,000,000
- -------------------------------------------------------- ------------
Variable Rate Securities -- 4.23%
- -------------------------------------------------------------------------
Capital One Funding Corporation
5.71% due 03/01/17 (v) ................. 1,500,000 1,500,000
Goldman Sachs Group
6.258% due 01/15/00 (v) ................ 4,000,000 4,000,000
Goldman Sachs Group
5.40% due 02/25/00 (v) ................. 2,000,000 2,000,000
Syndicated Loan Funding Trust
6.613% due 03/15/00 (v) ................ 3,000,000 3,000,000
------------
Total Variable Rate Securities
(Identified cost $10,500,000)......................... 10,500,000
- -------------------------------------------------------- ------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
Repurchase Agreement -- 0.05%
- -------------------------------------------------------------------------
State Street Bank & Trust Repurchase
Agreement, 2.50% due 01/03/00
Collateral: U.S. Treasury Note
$125,000, 6.25% due 02/15/03,
Value $130,451 ......................... $ 125,000 $ 125,000
------------
Total Repurchase Agreement
(Identified cost $125,000)............................ 125,000
- -------------------------------------------------------- ------------
Total Investments
(Identified cost $255,194,927).......................... $255,194,927
Other Assets Less Liabilities -- (2.88)% ............... (7,155,750)
------------
Net Assets -- 100% ................................... $248,039,177
- -------------------------------------------------------- ------------
</TABLE>
(v) Variable rate security; Interest rate shown is rate as of December 31,
1999.
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
89
- --------------------------------------------------------------------------------
<PAGE>
- ------------- -------
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
- ------------- -------
<TABLE>
<CAPTION>
Aggressive Growth
Small Small
Company Company
Multi-Cap Growth Value
Growth Fund Fund Fund
--------------- ---------------- -----------------
<S> <C> <C> <C>
Assets:
Investments at value $104,451,669 $ 51,611,263 $ 269,743,330
Foreign currency at value
(cost - $818,530 and $37,739) -- -- --
Receivable for fund shares sold 2,324,199 401,579 2,565,492
Receivable for investments sold -- 963,828 863,883
Dividends and interest receivable 2,260 1,250 168,245
Due from investment adviser 8,842 32,597 --
Forward currency contracts (net) receivable -- -- --
Cash and other assets 1,018,114 14,688 17,876
Total assets $107,805,084 $ 53,025,205 $ 273,358,826
- ------------------------------------------------ ------------ ------------ -------------
Liabilities:
Payable for fund shares redeemed 126,091 125,606 516,097
Call options written, at market value
(premiums received $20,224) -- -- --
Payable for investments purchased 3,926,674 -- 2,754,403
Dividends and distributions payable -- -- --
Investment advisory fees payable 70,515 40,388 165,360
Distribution fees payable 51,141 25,067 158,844
Forward currency contracts (net) payable -- -- --
Accrued expenses and other liabilities 65,029 61,765 186,171
Total liabilities $ 4,239,450 $ 252,826 $ 3,780,875
- ------------------------------------------------ ------------ ------------ -------------
Net assets $103,565,634 $ 52,772,379 $ 269,577,951
Analysis of net assets
Paid-in capital 77,445,377 35,440,279 249,026,439
Undistributed (accumulated) net investment
income (loss) -- -- --
Undistributed (accumulated) net realized gain
(loss) on investments (120,940) 541,914 4,622,009
Unrealized appreciation (depreciation) on
investments and foreign currency
denominated amounts 26,241,197 16,790,186 15,929,503
Net assets $103,565,634 $ 52,772,379 $ 269,577,951
- ------------------------------------------------ ------------ ------------ -------------
Class A: Net assets $ 49,206,315 $ 19,024,696 $ 135,221,672
Shares outstanding 3,581,495 571,955 15,855,174
Net asset value and redemption price per share $ 13.74 $ 33.26 $ 8.53
Sales charge per share $ 0.69 $ 1.66 $ 0.43
Maximum offering price per share, including
sales charge of 4.75% $ 14.43 $ 34.92 $ 8.96
- ------------------------------------------------ ------------ ------------ -------------
Class B: Net assets $ 39,854,296 $ 19,797,924 $ 98,471,789
Shares outstanding 2,908,779 606,930 11,904,479
Net asset value and offering price per share $ 13.70 $ 32.62 $ 8.27
- ------------------------------------------------ ------------ ------------ -------------
Class C: Net assets $ 13,863,694 $ 4,653,925 $ 35,265,495
Shares outstanding 1,012,151 142,172 4,173,984
Net asset value and offering price per share $ 13.70 $ 32.73 $ 8.45
- ------------------------------------------------ ------------ ------------ -------------
Class Y: Net assets $ 641,329 $ 9,295,834 $ 618,995
Shares outstanding 46,601 276,977 70,895
Net asset value, offering and redemption price
per share $ 13.76 $ 33.56 $ 8.73
- ------------------------------------------------ ------------ ------------ -------------
Investments at cost $ 78,210,472 $ 34,821,077 $ 253,813,827
- ------------------------------------------------ ------------ ------------ -------------
<CAPTION>
Growth
Capital Growth
Appreciation and Income
Growth Fund Fund Equity Fund Fund
-------------------- ------------------ ----------------- ----------------
<S> <C> <C> <C> <C>
Assets:
Investments at value $ 2,457,514,387 $ 226,613,737 $ 21,871,359 $ 170,684,815
Foreign currency at value
(cost - $818,530 and $37,739) -- -- -- --
Receivable for fund shares sold 15,622,405 2,670,839 48,598 981,021
Receivable for investments sold -- -- -- 20,224
Dividends and interest receivable 738,489 40,043 2,024 44,449
Due from investment adviser -- -- 34,042 60,991
Forward currency contracts (net) receivable -- -- -- --
Cash and other assets 57,110 82,257 33,334 25,349
Total assets $ 2,473,932,391 $ 229,406,876 $ 21,989,357 $ 171,816,849
- ------------------------------------------------ ---------------- -------------- ------------- -------------
Liabilities:
Payable for fund shares redeemed 3,678,548 209,642 17,598 137,612
Call options written, at market value
(premiums received $20,224) -- -- -- 34,250
Payable for investments purchased 5,210,263 -- -- 160,850
Dividends and distributions payable 201 -- -- --
Investment advisory fees payable 1,522,444 133,004 13,140 101,695
Distribution fees payable 1,382,725 98,564 13,829 92,613
Forward currency contracts (net) payable -- -- -- --
Accrued expenses and other liabilities 900,923 111,427 69,659 108,334
Total liabilities $ 12,695,104 $ 552,637 $ 114,226 $ 635,354
- ------------------------------------------------ ---------------- -------------- ------------- -------------
Net assets $ 2,461,237,287 $ 228,854,239 $ 21,875,131 $ 171,181,495
Analysis of net assets
Paid-in capital 1,774,194,527 135,724,506 18,817,041 126,868,063
Undistributed (accumulated) net investment
income (loss) -- -- -- --
Undistributed (accumulated) net realized gain
(loss) on investments 80,672,632 37,697,045 350,655 (896,983)
Unrealized appreciation (depreciation) on
investments and foreign currency
denominated amounts 606,370,128 55,432,688 2,707,435 45,210,415
Net assets $ 2,461,237,287 $ 228,854,239 $ 21,875,131 $ 171,181,495
- ------------------------------------------------ ---------------- -------------- ------------- -------------
Class A: Net assets $ 1,268,022,312 $ 181,232,347 $ 8,138,955 $ 65,759,315
Shares outstanding 51,648,867 3,888,367 1,121,612 1,704,781
Net asset value and redemption price per share $ 24.55 $ 46.61 $ 7.26 $ 38.57
Sales charge per share $ 1.22 $ 2.32 $ 0.36 $ 1.92
Maximum offering price per share, including
sales charge of 4.75% $ 25.77 $ 48.93 $ 7.62 $ 40.49
- ------------------------------------------------ ---------------- -------------- ------------- -------------
Class B: Net assets $ 811,705,605 $ 40,276,107 $ 11,430,590 $ 74,596,885
Shares outstanding 34,049,236 899,015 1,594,890 1,952,618
Net asset value and offering price per share $ 23.84 $ 44.80 $ 7.17 $ 38.20
- ------------------------------------------------ ---------------- -------------- ------------- -------------
Class C: Net assets $ 294,682,987 $ 6,917,358 $ 2,144,335 $ 13,709,571
Shares outstanding 12,206,487 150,876 298,960 358,525
Net asset value and offering price per share $ 24.14 $ 45.85 $ 7.17 $ 38.24
- ------------------------------------------------ ---------------- -------------- ------------- -------------
Class Y: Net assets $ 86,826,383 $ 428,427 $ 161,251 $ 17,115,724
Shares outstanding 3,464,995 9,089 22,225 439,862
Net asset value, offering and redemption price
per share $ 25.06 $ 47.14 $ 7.26 $ 38.91
- ------------------------------------------------ ---------------- -------------- ------------- -------------
Investments at cost $ 1,851,144,259 $ 171,181,049 $ 19,163,924 $ 125,460,375
- ------------------------------------------------ ---------------- -------------- ------------- -------------
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
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- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Growth cont. Sector Hybrid
Global
Equity Financial
Income International Internet Services Managed Balanced
Fund Growth Fund Fund Fund Fund Fund
- ------------------ ------------------ ----------------- -------------- ------------------ -----------------
<S> <C> <C> <C> <C> <C>
$ 165,646,458 $ 104,055,282 $ 261,270,671 $16,393,522 $ 381,863,458 $ 10,473,601
-- 815,660 -- 37,516 -- --
67,259 666,033 8,411,011 115,358 294,719 84,629
-- 80,073 -- -- 4,811,080 --
229,951 106,878 2,471 32,101 774,577 54,678
17,402 -- -- 26,532 -- 3,477
-- 98 -- -- -- --
19,987 15,360 50,677 66,275 21,028 27,765
$ 165,981,057 $ 105,739,384 $ 269,734,830 $16,671,304 $ 387,764,862 $ 10,644,150
-------------- -------------- ------------- ----------- -------------- -------------
231,692 136,690 1,307,361 151,159 829,721 --
-- -- -- -- -- --
-- -- 4,719,121 426,527 1,615,396 430,125
-- -- -- -- 37 3,319
104,656 69,120 173,085 11,253 245,558 6,136
87,705 42,184 128,412 6,256 190,860 5,883
-- -- -- 4,459 -- --
97,034 80,401 119,325 36,462 219,024 34,060
$ 521,087 $ 328,395 $ 6,447,304 $ 636,116 $ 3,100,596 $ 479,523
-------------- -------------- ------------- ----------- -------------- -------------
$ 165,459,970 $ 105,410,989 $ 263,287,526 $16,035,188 $ 384,664,266 $ 10,164,627
126,489,370 75,080,929 176,634,856 16,295,273 323,084,661 9,543,795
74,297 -- -- -- -- --
4,633,391 970,134 1,165,314 22,270 29,560,621 61,420
34,262,912 29,359,926 85,487,356 (282,355) 32,018,984 559,412
$ 165,459,970 $ 105,410,989 $ 263,287,526 $16,035,188 $ 384,664,266 $ 10,164,627
-------------- -------------- ------------- ----------- -------------- -------------
$ 111,395,065 $ 55,426,432 $ 119,283,259 $ 5,178,650 $ 144,519,183 $ 4,946,422
4,053,893 2,327,820 3,760,614 928,591 15,954,062 924,657
$ 27.48 $ 23.81 $ 31.72 $ 5.58 $ 9.06 $ 5.35
$ 1.37 $ 1.19 $ 1.58 $ 0.28 $ 0.45 $ 0.27
$ 28.85 $ 25.00 $ 33.30 $ 5.86 $ 9.51 $ 5.62
-------------- -------------- ------------- ----------- -------------- -------------
$ 44,573,949 $ 23,475,421 $ 107,175,511 $ 4,660,847 $ 149,098,160 $ 4,408,874
1,644,839 1,003,426 3,385,857 839,668 16,633,916 824,735
$ 27.10 $ 23.40 $ 31.65 $ 5.55 $ 8.96 $ 5.35
-------------- -------------- ------------- ----------- -------------- -------------
$ 9,337,575 $ 5,770,974 $ 35,447,799 $ 718,073 $ 9,956,434 $ 700,722
342,498 244,634 1,120,101 129,204 1,111,618 131,028
$ 27.26 $ 23.59 $ 31.65 $ 5.56 $ 8.96 $ 5.35
-------------- -------------- ------------- ----------- -------------- -------------
$ 153,381 $ 20,738,162 $ 1,380,957 $ 5,477,618 $ 81,090,489 $ 108,609
5,586 870,521 43,401 980,741 8,964,032 20,281
$ 27.46 $ 23.82 $ 31.82 $ 5.59 $ 9.05 $ 5.36
-------------- -------------- ------------- ----------- -------------- -------------
$ 131,383,546 $ 74,689,361 $ 175,783,315 $16,670,784 $ 349,844,474 $ 9,914,189
-------------- -------------- ------------- ----------- -------------- -------------
<CAPTION>
Fixed Income
Government Money
High-Yield Securities Tax-Exempt Market
Bond Fund Fund Income Fund Fund
- --------------- --------------- --------------- -----------------
<S> <C> <C> <C>
$106,735,444 $121,703,407 $27,915,367 $ 255,194,927
-- -- -- --
155,004 255,652 314,466 799,031
-- -- -- --
2,341,321 790,687 448,889 361,576
24,054 41,993 4,802 --
-- -- -- --
16,685 19,454 501,650 57,788
$109,272,508 $122,811,193 $29,185,174 $ 256,413,322
------------ ------------ ----------- -------------
190,131 208,106 -- 8,158,674
-- -- -- --
-- -- -- --
162,281 85,399 22,668 45,964
55,452 62,831 12,511 73,252
61,414 64,527 14,772 --
-- -- -- --
72,020 80,266 24,913 96,255
$ 541,298 $ 501,129 $ 74,864 $ 8,374,145
------------ ------------ ----------- -------------
$108,731,210 $122,310,064 $29,110,310 $ 248,039,177
119,150,171 131,233,974 29,815,659 248,039,177
(218) (85,399) -- --
(3,820,823) (3,844,247) (66,544) --
(6,597,920) (4,994,264) (638,805) --
$108,731,210 $122,310,064 $29,110,310 $ 248,039,177
------------ ------------ ----------- -------------
$ 64,038,367 $ 73,705,701 $21,702,628 $ 204,403,508
5,828,860 6,370,136 1,692,398 204,403,508
$ 10.99 $ 11.57 $ 12.82 $ 1.00
$ 0.55 $ 0.58 $ 0.64 --
$ 11.54 $ 12.15 $ 13.46 $ 1.00
------------ ------------ ----------- -------------
$ 36,672,614 $ 36,876,088 $ 5,639,682 $ 32,862,506
3,338,236 3,188,584 439,827 32,862,506
$ 10.99 $ 11.57 $ 12.82 $ 1.00
------------ ------------ ----------- -------------
$ 6,841,130 $ 5,516,423 $ 1,706,501 $ 7,296,341
622,644 476,863 133,062 7,296,341
$ 10.99 $ 11.57 $ 12.82 $ 1.00
------------ ------------ ----------- -------------
$ 1,179,099 $ 6,211,852 $ 61,499 $ 3,476,822
107,307 537,146 4,797 3,476,822
$ 10.99 $ 11.56 $ 12.82 $ 1.00
------------ ------------ ----------- -------------
$113,333,364 $126,697,671 $28,554,172 $ 255,194,927
------------ ------------ ----------- -------------
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
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<PAGE>
- ------------- -------
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
- ------------- -------
<TABLE>
<CAPTION>
Aggressive Growth
Multi-Cap Small Small
Growth Company Company
Fund Growth Fund Value Fund
--------------- ---------------- ---------------
<S> <C> <C> <C>
7/1/99 (2)
through
Investment income: 12/31/99
Dividends $ 17,544 $ 84,954(1) $ 1,866,176
Interest 123,000 73,923 1,030,361
Total investment income 140,544 158,877 2,896,537
Expenses:
Investment advisory fees 180,152 338,323 1,540,976
Distribution fees, Class A 41,986 50,125 457,731
Distribution fees, Class B 61,335 115,411 786,264
Distribution fees, Class C 23,490 30,288 246,695
Transfer agent fees 94,113 179,542 675,610
Custodian and accounting fees 27,444 41,438 66,109
Audit and legal fees 11,414 15,754 25,690
Reports to shareholders 3,753 8,815 32,652
Registration fees 20,563 31,218 44,569
Directors' fees 1,880 3,429 3,429
Other expenses 12,254 4,461 40,288
Total expenses 478,384 818,804 3,920,013
Less: Expense reimbursement (99,362) (149,327) --
Total expenses, net of
reimbursement 379,022 669,477 3,920,013
Net investment income (loss) (238,478) (510,600) (1,023,476)
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) on security
transactions 1,563,644 5,587,415 24,208,807
Net realized gain (loss) on foreign
currency transactions -- -- --
Net change in unrealized gain (loss)
on investments and foreign
currency related transactions 26,241,197 10,393,675 7,926,455
Net realized and unrealized gain (loss)
on investments 27,804,841 15,981,090 32,135,262
Increase (decrease) in net assets
resulting from operations $27,566,363 $15,470,490 $ 31,111,786
<CAPTION>
Growth
Capital Growth
Growth Appreciation Equity and Income
Fund Fund Fund Fund
----------------- ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Investment income:
Dividends $ 12,187,386 $ 282,195(1) $ 201,173(1) $ 930,485(1)
Interest 5,150,067 336,771 89,040 619,381
Total investment income 17,337,453 618,966 290,213 1,549,866
Expenses:
Investment advisory fees 14,654,678 1,236,280 145,439 781,841
Distribution fees, Class A 4,694,116 626,990 32,458 167,723
Distribution fees, Class B 6,302,427 229,899 101,696 415,297
Distribution fees, Class C 2,110,369 22,519 19,171 73,307
Transfer agent fees 2,879,484 365,026 146,187 302,248
Custodian and accounting fees 257,745 53,104 42,797 59,178
Audit and legal fees 157,891 22,810 15,356 19,203
Reports to shareholders 279,280 36,412 5,095 18,787
Registration fees 102,379 33,856 32,309 36,363
Directors' fees 3,429 3,428 3,429 3,429
Other expenses 240,220 12,502 17,751 19,143
Total expenses 31,682,018 2,642,826 561,688 1,896,519
Less: Expense reimbursement -- -- (184,205) (145,631)
Total expenses, net of
reimbursement 31,682,018 2,642,826 377,483 1,750,888
Net investment income (loss) (14,344,565) (2,023,860) (87,270) (201,022)
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) on security
transactions 218,276,589 68,737,389 1,246,351 (875,867)
Net realized gain (loss) on foreign
currency transactions -- -- -- --
Net change in unrealized gain (loss)
on investments and foreign
currency related transactions 197,228,906 (5,095,836) 1,854,965 33,685,568
Net realized and unrealized gain (loss)
on investments 415,505,495 63,641,553 3,101,316 32,809,701
Increase (decrease) in net assets
resulting from operations $ 401,160,930 $ 61,617,693 $ 3,014,046 $ 32,608,679
</TABLE>
(1) Net of foreign taxes withheld of $518 for Small Company Growth, $475 for
Capital Appreciation, $1,149 for Equity, $6,404 for Growth and Income,
$8,270 for Equity Income, $135,622 for International Growth, $50,157 for
Managed and $14,926 for Global Financial Services.
(2) Commencement of Operations.
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
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<PAGE>
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<TABLE>
<CAPTION>
Growth cont. Sector Hybrid
Global
Equity Financial
Income International Internet Services Managed Balanced
Fund Growth Fund Fund Fund Fund Fund
- -------------------- ------------------ -------------- ----------------- -------------------- --------------
<S> <C> <C> <C> <C> <C>
7/1/99 (2) 7/1/99 (2)
through through
12/31/99 12/31/99
$ 3,485,892(1) $ 998,524(1) $ 5,553 $ 355,351(1) $ 4,923,684(1) $ 12,317
261,824 82,353 244,836 11,461 3,720,161 69,797
3,747,716 1,080,877 250,389 366,812 8,643,845 82,114
1,246,413 661,972 409,227 110,326 3,122,484 22,459
522,644 191,322 88,189 16,616 723,614 7,009
416,767 171,105 161,877 30,644 1,584,622 11,691
82,450 40,628 47,522 4,352 112,838 2,163
361,866 266,310 132,999 91,620 805,093 47,720
62,845 151,527 27,751 53,835 101,654 20,124
23,436 17,458 11,852 14,942 40,741 11,101
23,431 18,904 9,441 1,968 147,788 374
36,000 30,627 23,238 47,305 46,282 18,956
3,429 3,429 1,880 4,139 3,429 1,880
12,676 6,795 28,404 2,987 26,520 2,711
2,791,957 1,560,077 942,380 378,734 6,715,065 146,188
(25,121) -- (51,412) (158,388) -- (96,713)
2,766,836 1,560,077 890,968 220,346 6,715,065 49,475
980,880 (479,200) (640,579) 146,466 1,928,780 32,639
10,222,864 12,323,164 4,379,643 354,890 56,228,530 63,412
-- (2,586,456) -- (37,327) -- --
(846,980) 20,166,528 85,487,356 (1,446,556) (30,266,874) 559,412
9,375,884 29,903,236 89,866,999 (1,128,993) 25,961,656 622,824
$ 10,356,764 $ 29,424,036 $89,226,420 $ (982,527) $ 27,890,436 $ 655,463
<CAPTION>
Fixed Income
Government Tax-Exempt Money
High-Yield Securities Income Market
Bond Fund Fund Fund Fund
- --------------- --------------- --------------- -------------
<S> <C> <C> <C>
$ 5,625 $ -- $ -- $ --
11,040,317 7,949,126 1,510,281 10,506,224
11,045,942 7,949,126 1,510,281 10,506,224
690,557 704,991 146,578 689,144
314,018 332,269 103,595 --
371,766 323,258 49,720 --
61,958 43,763 12,587 --
254,632 253,459 64,802 284,508
74,732 57,186 17,423 58,759
19,306 19,487 14,130 19,386
20,727 20,041 5,071 26,666
35,423 35,026 31,065 46,799
3,429 3,429 3,429 3,430
7,643 14,878 3,125 36,151
1,854,191 1,807,787 451,525 1,164,843
(128,160) (109,760) (95,072) --
1,726,031 1,698,027 356,453 1,164,843
9,319,911 6,251,099 1,153,828 9,341,381
(3,788,354) (72,479) 54,481 --
-- -- -- --
(1,696,811) (5,619,653) (2,078,351) --
(5,485,165) (5,692,132) (2,023,870) --
$ 3,834,746 $ 558,967 $ (870,042) $ 9,341,381
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
93
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<PAGE>
- ------------- -------
STATEMENTS OF CHANGES IN NET ASSETS
- ------------- -------
<TABLE>
<CAPTION>
Aggressive Growth
Multi-Cap
Growth
Fund Small Company Growth Fund Small Company Value Fund
--------------- ----------------------------- ----------------------------------
For the Period
July 1, 1999
through Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31, December 31,
1999 1999 1998 1999 1998
--------------- -------------- -------------- ----------------- ----------------
<S> <C> <C> <C> <C> <C>
From operations:
Net investment income (loss) $ (238,478) $ (510,600) $ (348,252) $ (1,023,476) $ (732,234)
Net realized gain (loss) on investments 1,563,644 5,587,415 (4,822,173) 24,208,807 4,934,895
Net change in unrealized gain (loss) on
investments 26,241,197 10,393,675 4,125,149 7,926,455 (888,315)
Increase (decrease) in net assets resulting
from operations 27,566,363 15,470,490 (1,045,276) 31,111,786 3,314,346
Distributions to shareholders from:
Net investment income, Class A -- -- -- -- (3,491)
Net investment income, Class B -- -- -- -- (2,710)
Net investment income, Class C -- -- -- -- (883)
Net investment income, Class Y -- -- -- -- --
Net realized gains on investments Class A (699,145) -- -- (9,464,582) (2,153,716)
Net realized gains on investments Class B (557,997) -- -- (7,113,842) (1,656,937)
Net realized gains on investments Class C (188,485) -- -- (2,450,476) (365,249)
Net realized gains on investments Class Y (9,633) -- -- (42,596) (7,161)
Total distributions to shareholders (1,455,260) -- -- (19,071,496) (4,190,147)
From capital share transactions:
Class A
Shares sold 37,543,719 10,575,048 6,801,056 140,609,824 81,669,430
Reinvestment of distributions 603,977 -- -- 9,105,949 2,070,187
Shares redeemed (2,270,669) (5,073,157) (2,975,141) (100,723,659) (49,169,722)
Net increase (decrease) - Class A 35,877,027 5,501,891 3,825,915 48,992,114 34,569,895
Class B
Shares sold 31,400,207 9,474,946 8,068,502 42,381,416 50,674,685
Reinvestment of distributions 530,504 -- -- 6,767,985 1,591,999
Shares redeemed (1,263,492) (4,006,165) (2,063,663) (16,937,979) (11,540,525)
Net increase (decrease) - Class B 30,667,219 5,468,781 6,004,839 32,211,422 40,726,159
Class C
Shares sold 10,925,404 2,588,187 2,206,846 24,607,618 12,908,849
Reinvestment of distributions 169,980 -- -- 2,374,082 352,181
Shares redeemed (509,769) (1,753,962) (506,686) (7,268,286) (1,644,958)
Net increase (decrease) - Class C 10,585,615 834,225 1,700,160 19,713,414 11,616,072
Class Y
Shares sold 414,084 701,385 1,178,645 478,540 221,282
Reinvestment of distributions 5,347 -- -- 41,869 7,161
Shares redeemed (94,761) (3,723,715) (5,183,044) (211,665) (78,860)
Net increase (decrease) - Class Y 324,670 (3,022,330) (4,004,399) 308,744 149,583
Total increase (decrease) in net assets
resulting from capital share transactions 77,454,531 8,782,567 7,526,515 101,225,694 87,061,709
Total increase (decrease) in net assets 103,565,634 24,253,057 6,481,239 113,265,984 86,185,908
Net assets:
Beginning of period $ -- $ 28,519,322 $ 22,038,083 $ 156,311,967 $ 70,126,059
End of period $103,565,634 $ 52,772,379 $ 28,519,322 $ 269,577,951 $ 156,311,967
<CAPTION>
Growth
Growth Fund
--------------------------------------
Year Ended Year Ended
December 31, December 31,
1999 1998
------------------ -------------------
<S> <C> <C>
From operations:
Net investment income (loss) $ (14,344,565) $ (7,737,334)
Net realized gain (loss) on investments 218,276,589 48,382,838
Net change in unrealized gain (loss) on
investments 197,228,906 242,454,975
Increase (decrease) in net assets resulting
from operations 401,160,930 283,100,479
Distributions to shareholders from:
Net investment income, Class A -- (11,564)
Net investment income, Class B -- (417)
Net investment income, Class C -- (4,198)
Net investment income, Class Y -- (42)
Net realized gains on investments Class A (54,862,641) (38,585,631)
Net realized gains on investments Class B (36,606,283) (20,943,603)
Net realized gains on investments Class C (12,982,941) (6,012,830)
Net realized gains on investments Class Y (3,698,398) (2,811,699)
Total distributions to shareholders (108,150,263) (68,369,984)
From capital share transactions:
Class A
Shares sold 870,657,150 475,086,024
Reinvestment of distributions 52,320,573 37,006,136
Shares redeemed (643,434,674) (240,646,180)
Net increase (decrease) - Class A 279,543,049 271,445,980
Class B
Shares sold 320,748,513 229,554,640
Reinvestment of distributions 35,161,599 20,187,422
Shares redeemed (81,631,587) (28,733,003)
Net increase (decrease) - Class B 274,278,525 221,009,059
Class C
Shares sold 157,557,656 99,187,822
Reinvestment of distributions 12,660,965 5,852,001
Shares redeemed (39,026,801) (12,495,435)
Net increase (decrease) - Class C 131,191,820 92,544,388
Class Y
Shares sold 33,004,993 31,656,834
Reinvestment of distributions 3,068,248 2,181,730
Shares redeemed (20,733,783) (28,103,666)
Net increase (decrease) - Class Y 15,339,458 5,734,898
Total increase (decrease) in net assets
resulting from capital share transactions 700,352,852 590,734,325
Total increase (decrease) in net assets 993,363,519 805,464,820
Net assets:
Beginning of period $ 1,467,873,768 $ 662,408,948
End of period $ 2,461,237,287 $ 1,467,873,768
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
94
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<PAGE>
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<TABLE>
<CAPTION>
Growth cont.
Capital Appreciation Fund Equity Fund
- ------------------------------------ ---------------------------------
Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31,
1999 1998 1999 1998
- ------------------ ----------------- ---------------- ----------------
<S> <C> <C> <C>
$ (2,023,860) $ (1,336,298) $ (87,270) $ 32,525
68,737,389 19,025,360 1,246,351 174,726
(5,095,836) 16,876,956 1,854,965 477,834
61,617,693 34,566,018 3,014,046 685,085
-- (3,981) -- (23,216)
-- (2,159) -- (10,634)
-- -- -- (1,711)
-- -- -- (386)
(22,921,058) (20,305,457) (325,149) (25,454)
(5,141,697) (2,296,049) (471,485) (32,207)
(771,876) (156,338) (86,154) (5,525)
(53,726) (34,063) (6,609) (218)
(28,888,357) (22,798,047) (889,397) (99,351)
121,861,660 35,319,635 3,566,626 4,275,470
22,393,745 19,629,603 259,916 39,040
(122,471,641) (47,296,498) (3,271,554) (1,091,690)
21,783,764 7,652,740 554,988 3,222,820
22,942,186 7,868,911 4,957,727 9,402,016
4,906,047 2,237,821 447,263 41,050
(6,678,559) (3,856,735) (3,804,878) (2,754,989)
21,169,674 6,249,997 1,600,112 6,688,077
7,217,072 917,554 1,438,046 1,411,627
749,684 153,448 85,175 7,109
(2,478,407) (161,592) (1,052,823) (237,070)
5,488,349 909,410 470,398 1,181,666
222,670 208,176 95,362 55,800
36,047 15,972 4,187 68
(87,326) (18,086) (7,231) --
171,391 206,062 92,318 55,868
48,613,178 15,018,209 2,717,816 11,148,431
81,342,514 26,786,180 4,842,465 11,734,165
$ 147,511,725 $ 120,725,545 $ 17,032,666 $ 5,298,501
$ 228,854,239 $ 147,511,725 $ 21,875,131 $ 17,032,666
<CAPTION>
Growth cont.
Growth and Income Fund Equity Income Fund
- ---------------------------------- ----------------------------------
Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31,
1999 1998 1999 1998
- ----------------- ---------------- ----------------- ----------------
<S> <C> <C> <C>
$ (201,022) $ 170,856 $ 980,880 $ 1,650,992
(875,867) 474,045 10,222,864 9,777,817
33,685,568 5,535,514 (846,980) 2,185,780
32,608,679 6,180,415 10,356,764 13,614,589
-- (49,655) (798,248) (1,347,963)
-- (13,413) (99,547) (250,476)
-- (1,356) (19,429) (41,379)
-- (107,244) (1,557) (1,942)
(9,140) (128,692) (4,357,923) (7,896,363)
(10,365) (168,132) (1,790,025) (2,412,973)
(1,898) (36,761) (365,286) (397,433)
(2,363) (144,116) (6,092) (8,549)
(23,766) (649,369) (7,438,107) (12,357,078)
62,504,188 13,648,983 17,161,630 19,311,952
9,140 174,612 4,959,001 8,929,816
(25,578,392) (2,458,043) (24,690,561) (16,538,197)
36,934,936 11,365,552 (2,569,930) 11,703,571
47,072,553 18,581,974 18,021,752 16,906,603
9,977 173,334 1,755,106 2,494,182
(7,451,136) (1,648,252) (9,228,263) (4,409,445)
39,631,394 17,107,056 10,548,595 14,991,340
11,349,994 4,168,315 8,577,389 4,251,624
1,876 36,716 369,171 420,408
(4,665,166) (444,827) (5,257,640) (746,044)
6,686,704 3,760,204 3,688,920 3,925,988
2,261,781 2,595,184 54,298 110,250
2,337 250,373 2,119 930
(8,439,410) (2,482,459) (15,999) --
(6,175,292) 363,098 40,418 111,180
77,077,742 32,595,910 11,708,003 30,732,079
109,662,655 38,126,956 14,626,660 31,989,590
$ 61,518,840 $ 23,391,884 $ 150,833,310 $ 118,843,720
$ 171,181,495 $ 61,518,840 $ 165,459,970 $ 150,833,310
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
95
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- --------------------------------------------------------------------------------
<PAGE>
- ------------- -------
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
- ------------- -------
<TABLE>
<CAPTION>
Growth cont. Sector
Internet Global Financial
International Growth Fund Fund Services Fund
----------------------------------- ---------------- --------------------------------
For the Period For the Period
July 1, 1999 October 1, 1998
Year Ended Year Ended through Year Ended through
December 31, December 31, December 31, December 31, December 31,
1999 1998 1999 1999 1998
----------------- ----------------- ---------------- -------------- -----------------
<S> <C> <C> <C> <C> <C>
From operations:
Net investment income (loss) $ (479,200) $ 169,565 $ (640,579) $ 146,466 $ 7,863
Net realized gain (loss) on
investments 9,736,708 1,530,125 4,379,643 317,563 316
Net change in unrealized gain (loss)
on investments 20,166,528 6,756,237 85,487,356 (1,446,556) 1,164,201
Increase (decrease) in net assets
resulting from operations 29,424,036 8,455,927 89,226,420 (982,527) 1,172,380
Distributions to shareholders from:
Net investment income, Class A (330,820) (108,820) -- (36,198) --
Net investment income, Class B (54,139) (1,058) -- (20,125) --
Net investment income, Class C (14,802) (2,049) -- (3,091) --
Net investment income, Class Y (182,877) (92,335) -- (59,622) --
Net realized gains on investments
Class A (4,599,399) (329,025) (1,170,121) (102,450) --
Net realized gains on investments
Class B (1,967,175) (121,910) (1,070,807) (98,365) --
Net realized gains on investments
Class C (482,156) (25,397) (319,611) (14,426) --
Net realized gains on investments
Class Y (1,608,601) (102,033) (13,211) (115,633) --
Total distributions to shareholders (9,239,969) (782,627) (2,573,750) (449,910) --
From capital share transactions:
Class A
Shares sold 34,758,963 9,516,243 84,619,224 6,297,902 1,452,204
Reinvestment of distributions 4,677,291 422,857 1,118,878 131,716 --
Shares redeemed (36,524,890) (11,162,315) (7,333,555) (2,179,526) (129,788)
Net increase (decrease) - Class A 2,911,364 (1,223,215) 78,404,547 4,250,092 1,322,416
Class B
Shares sold 7,602,117 12,740,631 79,695,487 5,142,648 1,150,088
Reinvestment of distributions 1,922,609 120,205 1,002,296 103,563 --
Shares redeemed (6,437,793) (8,121,910) (8,393,721) (1,186,144) (190,737)
Net increase (decrease) - Class B 3,086,933 4,738,926 72,304,062 4,060,067 959,351
Class C
Shares sold 2,607,371 3,010,422 27,379,730 943,985 222,535
Reinvestment of distributions 434,253 24,651 294,821 17,471 --
Shares redeemed (1,842,601) (917,430) (2,329,149) (382,030) (26,021)
Net increase (decrease) - Class C 1,199,023 2,117,643 25,345,402 579,426 196,514
Class Y
Shares sold 13,693,028 8,304,283 1,193,075 99,235 4,713,342
Reinvestment of distributions 1,790,639 194,336 9,723 175,255 --
Shares redeemed (11,796,717) (7,458,814) (621,953) (60,453) --
Net increase (decrease) - Class Y 3,686,950 1,039,805 580,845 214,037 4,713,342
Total increase (decrease) in net assets
resulting from capital share
transactions 10,884,270 6,673,159 176,634,856 9,103,622 7,191,623
Total increase (decrease) in net assets 31,068,337 14,346,459 263,287,526 7,671,185 8,364,003
Net assets:
Beginning of period $ 74,342,652 $ 59,996,193 $ -- $ 8,364,003 $ --
End of period $ 105,410,989 $ 74,342,652 $263,287,526 $16,035,188 $8,364,003
<CAPTION>
Hybrid
Balanced
Managed Fund Fund
----------------------------------- ----------------
For the Period
July 1, 1999
Year Ended Year Ended through
December 31, December 31, December 31,
1999 1998 1999
----------------- ----------------- ----------------
<S> <C> <C> <C>
From operations:
Net investment income (loss) $ 1,928,780 $ 1,920,876 $ 32,639
Net realized gain (loss) on
investments 56,228,530 30,494,153 63,412
Net change in unrealized gain (loss)
on investments (30,266,874) (10,504,129) 559,412
Increase (decrease) in net assets
resulting from operations 27,890,436 21,910,900 655,463
Distributions to shareholders from:
Net investment income, Class A (920,201) (885,601) (19,528)
Net investment income, Class B (124,552) (147,987) (10,840)
Net investment income, Class C (2,681) (43,801) (1,614)
Net investment income, Class Y (910,017) (849,714) (663)
Net realized gains on investments
Class A (11,936,738) (10,259,117) (968)
Net realized gains on investments
Class B (12,420,495) (9,542,938) (857)
Net realized gains on investments
Class C (839,073) (692,449) (139)
Net realized gains on investments
Class Y (6,606,669) (5,205,913) (21)
Total distributions to shareholders (33,760,426) (27,627,520) (34,630)
From capital share transactions:
Class A
Shares sold 31,329,927 44,993,325 4,806,346
Reinvestment of distributions 12,248,226 10,727,403 16,329
Shares redeemed (72,079,601) (36,345,519) (173,877)
Net increase (decrease) - Class A (28,501,448) 19,375,209 4,648,798
Class B
Shares sold 27,934,071 66,722,575 4,338,788
Reinvestment of distributions 12,099,227 9,333,309 10,978
Shares redeemed (49,962,474) (21,471,933) (213,564)
Net increase (decrease) - Class B (9,929,176) 54,583,951 4,136,202
Class C
Shares sold 4,393,156 10,395,540 704,099
Reinvestment of distributions 823,892 707,800 1,443
Shares redeemed (6,780,527) (2,469,630) (48,168)
Net increase (decrease) - Class C (1,563,479) 8,633,710 657,374
Class Y
Shares sold 15,925,555 30,057,893 101,411
Reinvestment of distributions 7,514,175 6,055,002 9
Shares redeemed (30,284,989) (26,931,170) --
Net increase (decrease) - Class Y (6,845,259) 9,181,725 101,420
Total increase (decrease) in net assets
resulting from capital share
transactions (46,839,362) 91,774,595 9,543,794
Total increase (decrease) in net assets (52,709,352) 86,057,975 10,164,627
Net assets:
Beginning of period $ 437,373,618 $ 351,315,643 $ --
End of period $ 384,664,266 $ 437,373,618 $ 10,164,627
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
96
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<PAGE>
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- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Fixed Income
High-Yield Bond Fund Government Securities Fund
- --------------------------------- ---------------------------------
Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31,
1999 1998 1999 1998
- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C>
$ 9,319,911 $ 7,868,188 $ 6,251,099 $ 5,388,020
(3,788,354) 1,471,176 (72,479) 73,735
(1,696,811) (7,542,908) (5,619,653) 754,081
3,834,746 1,796,456 558,967 6,215,836
(5,789,214) (5,459,924) (4,033,851) (3,896,434)
(2,882,536) (2,042,690) (1,589,916) (936,305)
(479,123) (273,307) (215,301) (83,616)
(169,173) (92,256) (412,031) (471,665)
(50,636) (997,754) -- --
(28,156) (480,676) -- --
(4,400) (74,900) -- --
(1,601) (26,418) -- --
(9,404,839) (9,447,925) (6,251,099) (5,388,020)
17,106,617 26,180,156 51,982,344 22,163,314
4,491,056 5,184,552 3,208,919 2,999,537
(26,854,100) (20,189,403) (49,540,286) (22,837,964)
(5,256,427) 11,175,305 5,650,977 2,324,887
13,267,871 26,716,825 20,568,623 25,436,261
2,208,721 1,974,137 1,325,665 756,772
(12,493,171) (10,886,369) (10,575,982) (11,444,391)
2,983,421 17,804,593 11,318,306 14,748,642
6,127,657 5,863,205 5,123,360 3,877,365
387,580 291,593 207,670 79,085
(4,749,656) (1,836,334) (2,678,458) (1,372,631)
1,765,581 4,318,464 2,652,572 2,583,819
288,069 1,250,831 660,953 982,969
169,221 119,053 411,343 467,956
(1,204,430) (52,838) (1,804,513) (1,813,505)
(747,140) 1,317,046 (732,217) (362,580)
(1,254,565) 34,615,408 18,889,638 19,294,768
(6,824,658) 26,963,939 13,197,506 20,122,584
$ 115,555,868 $ 88,591,929 $ 109,112,558 $ 88,989,974
$ 108,731,210 $ 115,555,868 $ 122,310,064 $ 109,112,558
<CAPTION>
Fixed Income
Tax-Exempt Income Fund Money Market Fund
- ------------------------------- -----------------------------------
Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31,
1999 1998 1999 1998
- ---------------- -------------- ----------------- -----------------
<S> <C> <C> <C>
$ 1,153,828 $ 1,170,489 $ 9,341,381 $ 5,409,072
54,481 746,552 -- --
(2,078,351) (320,248) -- --
(870,042) 1,596,793 9,341,381 5,409,072
(932,079) (1,024,552) (7,901,573) (4,735,359)
(174,348) (128,996) (951,295) (392,136)
(44,523) (16,647) (334,855) (138,096)
(2,878) (293) (153,658) (143,481)
(172,892) (524,341) -- --
(40,812) (97,566) -- --
(13,271) (16,735) -- --
(491) (1,473) -- --
(1,381,294) (1,810,603) (9,341,381) (5,409,072)
12,601,987 4,758,439 902,291,310 413,364,732
848,109 1,239,726 7,522,610 4,556,487
(13,709,386) (5,829,298) (845,900,561) (345,896,926)
(259,290) 168,867 63,913,359 72,024,293
3,334,569 2,501,000 63,366,742 32,792,113
172,318 188,983 893,135 351,316
(1,927,223) (1,073,717) (41,544,633) (28,976,415)
1,579,664 1,616,266 22,715,244 4,167,014
1,572,256 731,438 27,978,256 15,657,662
52,682 28,617 284,855 112,867
(587,424) (157,608) (25,647,018) (12,111,247)
1,037,514 602,447 2,616,093 3,659,282
70 66,447 1,314,799 2,877,556
861 402 148,465 131,097
-- -- (1,398,749) (2,296,440)
931 66,849 64,515 712,213
2,358,819 2,454,429 89,309,211 80,562,802
107,483 2,240,619 89,309,211 80,562,802
$ 29,002,827 $ 26,762,208 $ 158,729,966 $ 78,167,164
$ 29,110,310 $ 29,002,827 $ 248,039,177 $ 158,729,966
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
97
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<PAGE>
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FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Period
7/1/99
Enterprise Multi-Cap Growth Fund (Class A) through 12/31/99
- --------------------------------------------------------------------------------------- -----------------
<S> <C>
Net Asset Value Beginning of Period $ 5.00
---------
Net Investment Income (Loss) ( 0.05)(F)
Net Realized and Unrealized Gain (Loss) on Investments 9.00
---------
Total from Investment Operations 8.95
---------
Dividends from Net Investment Income --
Distributions from Capital Gains ( 0.21)
---------
Total Distributions ( 0.21)
---------
Net Asset Value End of Period $ 13.74
=========
Total Return(C) 179.26%(B)
Net Assets End of Period (in thousands) $ 49,206
Ratio of Expenses to Average Net Assets 1.85%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 2.43%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets ( 1.06)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) ( 1.64)%(A)
Portfolio Turnover Rate 32%
</TABLE>
<TABLE>
<CAPTION>
For the Period
7/1/99
Enterprise Multi-Cap Growth Fund (Class B) through 12/31/99
- --------------------------------------------------------------------------------------- -----------------
<S> <C>
Net Asset Value Beginning of Period $ 5.00
---------
Net Investment Income (Loss) ( 0.07)(F)
Net Realized and Unrealized Gain (Loss) on Investments 8.98
---------
Total from Investment Operations 8.91
---------
Dividends from Net Investment Income --
Distributions from Capital Gains ( 0.21)
---------
Total Distributions ( 0.21)
---------
Net Asset Value End of Period $ 13.70
=========
Total Return(D) 178.45%(B)
Net Assets End of Period (in thousands) $ 39,854
Ratio of Expenses to Average Net Assets 2.40%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 2.90%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets ( 1.64)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) ( 2.14)%(A)
Portfolio Turnover Rate 32%
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
98
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<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights -- (Continued)
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Period
7/1/99
Enterprise Multi-Cap Growth Fund (Class C) through 12/31/99
- --------------------------------------------------------------------------------------- -----------------
<S> <C>
Net Asset Value Beginning of Period $ 5.00
---------
Net Investment Income (Loss) ( 0.07)(F)
Net Realized and Unrealized Gain (Loss) on Investments 8.98
---------
Total from Investment Operations 8.91
---------
Dividends from Net Investment Income --
Distributions from Capital Gains ( 0.21)
---------
Total Distributions ( 0.21)
---------
Net Asset Value End of Period $ 13.70
=========
Total Return(D) 178.46%(B)
Net Assets End of Period (in thousands) $ 13,864
Ratio of Expenses to Average Net Assets 2.40%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 2.92%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets ( 1.62)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) ( 2.14)%(A)
Portfolio Turnover Rate 32%
<CAPTION>
For the Period
7/1/99
Enterprise Multi-Cap Growth Fund (Class Y) through 12/31/99
- --------------------------------------------------------------------------------------- -----------------
<S> <C>
Net Asset Value Beginning of Period $ 5.00
---------
Net Investment Income (Loss) ( 0.02)(F)
Net Realized and Unrealized Gain (Loss) on Investments 8.99
---------
Total from Investment Operations 8.97
---------
Dividends from Net Investment Income --
Distributions from Capital Gains ( 0.21)
---------
Total Distributions ( 0.21)
---------
Net Asset Value End of Period $ 13.76
=========
Total Return 179.66%(B)
Net Assets End of Period (in thousands) $ 641
Ratio of Expenses to Average Net Assets 1.40%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 2.42%(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 Reimbursement) ( 1.54)%(A)
Portfolio Turnover Rate 32%
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
99
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<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
ENTERPRISE SMALL COMPANY GROWTH FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31, For the Period From For the Period
------------------------ 10/1/97 7/17/97
Enterprise Small Company Growth Fund (Class A) 1999 1998 through 12/31/97 through 9/30/97
- ------------------------------------------------------------- ------------ ----------- --------------------- ----------------
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 22.44 $ 23.39 $ 26.61 $ 24.54
------- ------- --------- --------
Net Investment Income (Loss) ( 0.35)(F) ( 0.32)(F) ( 0.40) ( 0.05)
Net Realized and Unrealized Gain (Loss) on Investments 11.17 ( 0.63) ( 2.27) 2.12
------- ------- --------- --------
Total from Investment Operations 10.82 ( 0.95) ( 2.67) 2.07
------- ------- --------- --------
Dividends from Net Investment Income -- -- -- --
Distributions from Capital Gains -- -- ( 0.55) --
------- ------- --------- --------
Total Distributions -- -- ( 0.55) --
------- ------- --------- --------
Net Asset Value End of Period $ 33.26 $ 22.44 $ 23.39 $ 26.61
======= ======= ========= ========
Total Return(C) 48.22% ( 4.06)% (10.04)%(B) 8.44%(B)
Net Assets End of Period (in thousands) $19,024 $ 8,194 $ 4,861 $ 2,102
Ratio of Expenses to Average Net Assets 1.85% 1.85% 1.85%(A) 1.85%(A)
Ratio of Expenses to Average Net Assets (Excluding
Reimbursement) 2.29% 2.66% 2.38%(A) 4.48%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets ( 1.38)% ( 1.43)% ( 1.56)%(A) ( 1.61)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Reimbursement) ( 1.82)% ( 2.24)% ( 2.09)%(A) ( 4.25)%(A)
Portfolio Turnover Rate 62% 151% 24%(A) 158%(A)
<CAPTION>
Year Ended December 31, For the Period From For the Period
------------------------ 10/1/97 7/17/97
Enterprise Small Company Growth Fund (Class B) 1999 1998 through 12/31/97 through 9/30/97
- ------------------------------------------------------------- ------------ ----------- --------------------- ----------------
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 22.13 $ 23.33 $ 26.58 $ 24.54
------- ------- --------- --------
Net Investment Income (Loss) ( 0.48)(F) ( 0.41)(F) ( 0.47) ( 0.05)
Net Realized and Unrealized Gain (Loss) on Investments 10.97 ( 0.79) ( 2.23) 2.09
------- ------- --------- --------
Total from Investment Operations 10.49 ( 1.20) ( 2.70) 2.04
------- ------- --------- --------
Dividends from Net Investment Income -- -- -- --
Distributions from Capital Gains -- -- ( 0.55) --
------- ------- --------- --------
Total Distributions -- -- ( 0.55) --
------- ------- --------- --------
Net Asset Value End of Period $ 32.62 $ 22.13 $ 23.33 $ 26.58
======= ======= ========= ========
Total Return(D) 47.40% ( 5.14)% (10.16)%(B) 8.31%(B)
Net Assets End of Period (in thousands) $19,798 $ 8,760 $ 2,842 $ 1,099
Ratio of Expenses to Average Net Assets 2.40% 2.40% 2.40%(A) 2.40%(A)
Ratio of Expenses to Average Net Assets (Excluding
Reimbursement) 2.84% 3.24% 2.93%(A) 5.52%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets ( 1.93)% ( 1.94)% ( 2.11)%(A) ( 2.18)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Reimbursement) ( 2.37)% ( 2.78)% ( 2.64)%(A) ( 5.29)%(A)
Portfolio Turnover Rate 62% 151% 24%(A) 158%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
100
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<PAGE>
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Financial Highlights -- (Continued)
ENTERPRISE SMALL COMPANY GROWTH FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31, For the Period For the Period
----------------------- 10/1/97 7/17/97
Enterprise Small Company Growth Fund (Class C) 1999 1998 through 12/31/97 through 9/30/97
- ------------------------------------------------------------------- ----------- ----------- ----------------- ----------------
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 22.21 $ 23.32 $ 26.57 $ 24.54
------- ------- --------- --------
Net Investment Income (Loss) ( 0.47)(F) ( 0.41)(F) ( 0.62) ( 0.07)
Net Realized and Unrealized Gain (Loss) on Investments 10.99 ( 0.70) ( 2.08) 2.10
------- ------- --------- --------
Total from Investment Operations 10.52 ( 1.11) ( 2.70) 2.03
------- ------- --------- --------
Dividends from Net Investment Income -- -- -- --
Distributions from Capital Gains -- -- ( 0.55) --
------- ------- --------- --------
Total Distributions -- -- ( 0.55) --
------- ------- --------- --------
Net Asset Value End of Period $ 32.73 $ 22.21 $ 23.32 $ 26.57
======= ======= ========= ========
Total Return(D) 47.37% ( 4.76)% (10.16)%(B) 8.27%(B)
Net Assets End of Period (in thousands) $ 4,654 $ 2,481 $ 795 $ 201
Ratio of Expenses to Average Net Assets 2.40% 2.40% 2.40%(A) 2.40%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 2.84% 3.24% 2.93%(A) 5.91%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets ( 1.93)% ( 1.93)% ( 2.11)%(A) ( 2.15)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Reimbursement) ( 2.37)% ( 2.77)% ( 2.64)%(A) ( 5.65)%(A)
Portfolio Turnover Rate 62% 151% 24%(A) 158%(A)
<CAPTION>
For the Period
Year Ended December 31, 10/1/97 Year Year Year
Enterprise Small Company ----------------------- through Ended Ended Ended
Growth Fund (Class Y) 1999 1998 12/31/97 9/30/97 9/30/96 9/30/95
- -------------------------------------------------------- ----------- ----------- -------------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 22.55 $ 23.43 $ 26.62 $ 25.08 $ 19.05 $ 14.01
-------- -------- --------- ------- -------- --------
Net Investment Income (Loss) ( 0.23)(F) ( 0.23)(F) ( 0.07) ( 0.13) ( 0.17) ( 0.12)
Net Realized and Unrealized Gain (Loss) on Investments 11.24 ( 0.65) ( 2.57) 3.73 7.62 5.49
-------- -------- --------- ------- -------- --------
Total from Investment Operations 11.01 ( 0.88) ( 2.64) 3.60 7.45 5.37
-------- -------- --------- ------- -------- --------
Dividends from Net Investment Income -- -- -- -- -- --
Distributions from Capital Gains -- -- ( 0.55) ( 2.06) ( 1.42) ( 0.33)
-------- -------- --------- ------- -------- --------
Total Distributions -- -- ( 0.55) ( 2.06) ( 1.42) ( 0.33)
-------- -------- --------- ------- -------- --------
Net Asset Value End of Period $ 33.56 $ 22.55 $ 23.43 $ 26.62 $ 25.08 $ 19.05
======== ======== ========= ======= ======== ========
Total Return 48.82% ( 3.76)% ( 9.92)%(B) 16.24% 42.07% 39.20%
Net Assets End of Period (in thousands) $ 9,296 $ 9,084 $ 13,540 $15,355 $ 6,609 $ 2,950
Ratio of Expenses to Average Net Assets 1.40% 1.40% 1.40%(A) 1.84% 1.96% 1.85%
Ratio of Expenses to Average Net Assets (Excluding
Reimbursement) 1.84% 2.15% 1.96%(A) 3.08% 3.46% 5.15%
Ratio of Net Investment Income (Loss) to Average Net
Assets ( 0.93)% ( 1.03)% ( 1.12)%(A) ( 1.30)% ( 1.43)% ( 1.33)%
Ratio of Net Investment Income (Loss) to Average Net
Assets (Excluding Reimbursement) ( 1.37)% ( 1.78)% ( 1.68)%(A) ( 2.54)% ( 2.93)% ( 4.63)%
Portfolio Turnover Rate 62% 151% 24%(A) 158% 78% 84%
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
101
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<PAGE>
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Financial Highlights
ENTERPRISE SMALL COMPANY VALUE FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------------------------
Enterprise Small Company Value Fund (Class A) 1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 7.92 $ 7.75 $ 5.74 $ 5.43 $ 5.17
------- ------- ------- ------- -------
Net Investment Income (Loss) (0.02)F (0.03) 0.01 (0.01) 0.02
Net Realized and Unrealized Gain (Loss) on Investments 1.28 0.42 2.53 0.62 0.46
------- ------- ------- ------- -------
Total from Investment Operations 1.26 0.39 2.54 0.61 0.48
------- ------- ------- ------- -------
Dividends from Net Investment Income -- -- -- -- (0.02)
Distributions from Capital Gains (0.65) (0.22) (0.53) (0.30) (0.20)
------- ------- ------- ------- -------
Total Distributions (0.65) (0.22) (0.53) (0.30) (0.22)
------- ------- ------- ------- -------
Net Asset Value End of Period $ 8.53 $ 7.92 $ 7.75 $ 5.74 $ 5.43
======= ======= ======= ======= =======
Total Return(C) 16.13% 5.15% 44.24% 11.28% 9.29%
Net Assets End of Period (in thousands) $135,222 $79,867 $45,310 $17,308 $19,720
Ratio of Expenses to Average Net Assets 1.63% 1.75% 1.75% 1.75% 1.75%
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 1.63% 1.85% 1.95% 2.38% 2.21%
Ratio of Net Investment Income (Loss) to Average Net Assets (0.22)% (0.37)% 0.05% (0.13)% 0.32%
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding
Reimbursement) (0.22)% (0.48)% (0.15)% (0.76)% (0.14)%
Portfolio Turnover Rate 46% 33% 63% 144% 37%
<CAPTION>
Year Ended December 31, For the Period
--------------------------------------------------- 5/1/95
Enterprise Small Company Value Fund (Class B) 1999 1998 1997 1996 through 12/31/95
- ------------------------------------------------------------- ------------ ------------ ------------ ------------ -----------------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 7.74 $ 7.63 $ 5.69 $ 5.41 $ 5.28
------- ------- ------- -------- ---------
Net Investment Income (Loss) (0.06)(F) (0.07)(F) -- (0.03) (0.01)
Net Realized and Unrealized Gain (Loss) on Investments 1.24 0.40 2.47 0.61 0.36
------- ------- ------- -------- ---------
Total from Investment Operations 1.18 0.33 2.47 0.58 0.35
------- ------- ------- -------- ---------
Dividends from Net Investment Income -- -- -- -- (0.02)
Distributions from Capital Gains (0.65) (0.22) (0.53) (0.30) (0.20)
------- ------- ------- -------- ---------
Total Distributions (0.65) (0.22) (0.53) (0.30) (0.22)
------- ------- ------- -------- ---------
Net Asset Value End of Period $ 8.27 $ 7.74 $ 7.63 $ 5.69 $ 5.41
======= ======= ======= ======== =========
Total Return(D) 15.47% 4.44% 43.40% 10.77% 6.87%(B)
Net Assets End of Period (in thousands) $98,472 $61,929 $22,013 $ 2,606 $ 862
Ratio of Expenses to Average Net Assets 2.18% 2.30% 2.30% 2.30% 2.30%(A)
Ratio of Expenses to Average Net Assets (Excluding
Reimbursement) 2.18% 2.41% 2.44% 2.92% 2.78%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (0.78)% (0.93)% (0.67)% (0.77)% (0.40)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Reimbursement) (0.78)% (1.04)% (0.81)% (1.39)% (0.90)%(A)
Portfolio Turnover Rate 46% 33% 63% 144% 37%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
102
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights -- (Continued)
ENTERPRISE SMALL COMPANY VALUE FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31, For the Period
------------------------- 5/1/97
Enterprise Small Company Value Fund (Class C) 1999 1998 through 12/31/97
- ------------------------------------------------------------------------------------- ------------ ------------ -----------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 7.90 $ 7.74 $ 6.14
------- ------- ---------
Net Investment Income (Loss) (0.06)(F) (0.07)(F) (0.02)
Net Realized and Unrealized Gain (Loss) on Investments 1.26 0.45 2.15
------- ------- ---------
Total from Investment Operations 1.20 0.38 2.13
------- ------- ---------
Dividends from Net Investment Income -- -- --
Distributions from Capital Gains (0.65) (0.22) (0.53)
------- ------- ---------
Total Distributions (0.65) (0.22) (0.53)
------- ------- ---------
Net Asset Value End of Period $ 8.45 $ 7.90 $ 7.74
======= ======= =========
Total Return(D) 15.42% 5.03% 34.68%(B)
Net Assets End of Period (in thousands) $35,265 $14,239 $ 2,684
Ratio of Expenses to Average Net Assets 2.19% 2.30% 2.30%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 2.19% 2.40% 2.38%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (0.76)% (0.94)% (0.88)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) (0.76)% (1.04)% (0.95)%(A)
Portfolio Turnover Rate 46% 33% 63%(A)
<CAPTION>
Year Ended December 31, For the Period
----------------------------------------------- 5/25/95
Enterprise Small Company Value Fund (Class Y) 1999 1998 1997 1996 through 12/31/95
- ----------------------------------------------------------------- ---------- ------------ ---------- ------------ -----------------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 8.06 $ 7.81 $ 5.77 $ 5.43 $ 5.37
------ -------- ------ -------- ---------
Net Investment Income (Loss) 0.02(F) 0.01(F) 1.45 0.01 0.04
Net Realized and Unrealized Gain (Loss) on Investments 1.30 0.46 1.12 0.63 0.26
------ -------- ------ -------- ---------
Total from Investment Operations 1.32 0.47 2.57 0.64 0.30
------ -------- ------ -------- ---------
Dividends from Net Investment Income -- -- -- -- (0.04)
Distributions from Capital Gains (0.65) (0.22) (0.53) (0.30) (0.20)
------- -------- ------- -------- ---------
Total Distributions (0.65) (0.22) (0.53) (0.30) (0.24)
------- -------- ------- -------- ---------
Net Asset Value End of Period $ 8.73 $ 8.06 $ 7.81 $ 5.77 $ 5.43
======= ======== ======= ======== =========
Total Return 16.60% 6.13% 44.53% 11.83% 5.55%(B)
Net Assets End of Period (in thousands) $ 619 $ 277 $ 119 $ 1,926 $ 2,832
Ratio of Expenses to Average Net Assets 1.18% 1.30% 1.30% 1.30% 1.30%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 1.18% 1.39% 1.85% 1.92% 1.81%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 0.23% 0.06% 2.74% 0.35% 0.18%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Reimbursement) 0.23% (0.02)% 2.19% (0.27)% (0.33)%(A)
Portfolio Turnover Rate 46% 33% 63% 144% 37%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
103
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
ENTERPRISE GROWTH FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------------------------
Enterprise Growth Fund (Class A) 1999 1998 1997 1996 1995
- ----------------------------------------------------------- --------------- ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 21.07 $ 16.91 $ 13.10 $ 10.44 $ 7.76
--------- ------- ------- ------- -------
Net Investment Income (Loss) ( 0.12)(F) ( 0.11)(F) ( 0.07) ( 0.04) ( 0.03)
Net Realized and Unrealized Gain (Loss) on Investments 4.73 5.31 4.23 3.44 3.13
--------- ------- ------- ------- -------
Total from Investment Operations 4.61 5.20 4.16 3.40 3.10
--------- ------- ------- ------- -------
Dividends from Net Investment Income -- -- -- -- --
Distributions from Capital Gains ( 1.13) ( 1.04) ( 0.35) ( 0.74) ( 0.42)
--------- ------- ------- ------- -------
Total Distributions ( 1.13) ( 1.04) ( 0.35) ( 0.74) ( 0.42)
--------- ------- ------- ------- -------
Net Asset Value End of Period $ 24.55 $ 21.07 $ 16.91 $ 13.10 $ 10.44
========= ======= ======= ======= =======
Total Return(C) 22.08% 30.94% 31.76% 32.60% 39.98%
Net Assets End of Period (in thousands) $1,268,022 $827,567 $424,280 $196,752 $122,559
Ratio of Expenses to Average Net Assets 1.40% 1.48% 1.43%(E) 1.53%(E) 1.60%
Ratio of Expenses to Average Net Assets (Excluding
Reimbursement) 1.40% 1.48% 1.43%(E) 1.53%(E) 1.60%
Ratio of Net Investment Income (Loss) to Average Net Assets ( 0.51)% ( 0.58)% ( 0.55)% ( 0.39)% ( 0.35)%
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Reimbursement) ( 0.51)% ( 0.58)% ( 0.55)% ( 0.39)% ( 0.35)%
Portfolio Turnover Rate 38% 28% 22% 30% 45%
<CAPTION>
Year Ended December 31, For the Period
------------------------------------------------------ 5/1/95
Enterprise Growth Fund (Class B) 1999 1998 1997 1996 through 12/31/95
- ----------------------------------------------------------- ------------- ------------- ------------- ------------ -----------------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 20.62 $ 16.66 $ 12.97 $ 10.41 $ 8.69
------- ------- -------- ------- ---------
Net Investment Income (Loss) ( 0.24)(F) ( 0.21)(F) ( 0.11) ( 0.06) ( 0.02)
Net Realized and Unrealized Gain (Loss) on Investments 4.59 5.21 4.15 3.36 2.16
------- ------- -------- ------- ---------
Total from Investment Operations 4.35 5.00 4.04 3.30 2.14
------- ------- -------- ------- ---------
Dividends from Net Investment Income -- -- -- -- --
Distributions from Capital Gains ( 1.13) ( 1.04) ( 0.35) ( 0.74) ( 0.42)
------- ------- -------- ------- ---------
Total Distributions ( 1.13) ( 1.04) ( 0.35) ( 0.74) ( 0.42)
------- ------- -------- ------- ---------
Net Asset Value End of Period $ 23.84 $ 20.62 $ 16.66 $ 12.97 $ 10.41
======= ======= ======== ======= =========
Total Return(D) 21.30% 30.20% 31.15% 31.73% 24.66%(B)
Net Assets End of Period (in thousands) $811,706 $446,473 $166,932 $36,483 $ 4,572
Ratio of Expenses to Average Net Assets 1.95% 2.03% 1.98%(E) 2.10%(E) 2.15%(A)
Ratio of Expenses to Average Net Assets (Excluding
Reimbursement) 1.95% 2.03% 1.98%(E) 2.10%(E) 2.15%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets ( 1.06)% ( 1.13)% ( 1.10)% ( 0.96)% ( 0.82)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Reimbursement) ( 1.06)% ( 1.13)% ( 1.10)% ( 0.96)% ( 0.82)%(A)
Portfolio Turnover Rate 38% 28% 22% 30% 45%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
104
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights -- (Continued)
ENTERPRISE GROWTH FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31, For the Period
--------------------------- 5/1/97
Enterprise Growth Fund (Class C) 1999 1998 through 12/31/97
- ------------------------------------------------------------------------------------ ------------- ------------- -----------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 20.87 $ 16.85 $ 14.11
------- ------- ---------
Net Investment Income (Loss) ( 0.24)(F) ( 0.21)(F) ( 0.06)
Net Realized and Unrealized Gain (Loss) on Investments 4.64 5.27 3.15
------- ------- ---------
Total from Investment Operations 4.40 5.06 3.09
------- ------- ---------
Dividends from Net Investment Income -- -- --
Distributions from Capital Gains ( 1.13) ( 1.04) ( 0.35)
------- ------- ---------
Total Distributions ( 1.13) ( 1.04) ( 0.35)
------- ------- ---------
Net Asset Value End of Period $ 24.14 $ 20.87 $ 16.85
======= ======= =========
Total Return(D) 21.28% 30.22% 21.91%(B)
Net Assets End of Period (in thousands) $294,683 $133,194 $ 26,601
Ratio of Expenses to Average Net Assets 1.95% 2.04% 1.97%(A)(E)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 1.95% 2.04% 1.97%(A)(E)
Ratio of Net Investment Income (Loss) to Average Net Assets ( 1.07)% ( 1.13)% ( 1.10)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) ( 1.07)% ( 1.13)% ( 1.10)%(A)
Portfolio Turnover Rate 38% 28% 22%(A)
<CAPTION>
Year Ended December 31, For the Period
-------------------------------------- 8/8/96
Enterprise Growth Fund (Class Y) 1999 1998 1997 through 12/31/96
- ----------------------------------------------------------------------- ------------ ------------ ------------ -----------------
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 21.41 $ 17.02 $ 13.12 $ 11.96
------- ------- ------- --------
Net Investment Income (Loss) ( 0.02)(F) ( 0.02)(F) ( 0.02) --
Net Realized and Unrealized Gain (Loss) on Investments 4.80 5.45 4.27 1.90
------- ------- ------- --------
Total from Investment Operations 4.78 5.43 4.25 1.90
------- ------- ------- --------
Dividends from Net Investment Income -- -- -- --
Distributions from Capital Gains ( 1.13) ( 1.04) ( 0.35) ( 0.74)
------- ------- ------- --------
Total Distributions ( 1.13) ( 1.04) ( 0.35) ( 0.74)
------- ------- ------- --------
Net Asset Value End of Period $ 25.06 $ 21.41 $ 17.02 $ 13.12
======= ======= ======= ========
Total Return 22.52% 32.09% 32.40% 15.91%(B)
Net Assets End of Period (in thousands) $86,826 $60,640 $44,596 $ 2,339
Ratio of Expenses to Average Net Assets 0.95% 1.03% 0.97%(E) 1.10%(A)(E)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 0.95% 1.03% 0.97%(E) 1.10%(A)(E)
Ratio of Net Investment Income (Loss) to Average Net Assets ( 0.07)% ( 0.13)% ( 0.10)% 0.04%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding
Reimbursement) ( 0.07)% ( 0.13)% ( 0.10)% 0.04%(A)
Portfolio Turnover Rate 38% 28% 22% 30%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
105
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
ENTERPRISE CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------------------------------
Enterprise Capital Appreciation Fund (Class A) 1999 1998 1997 1996 1995
- ----------------------------------------------------------------- ------------- ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 38.59 $ 35.54 $ 34.21 $ 32.54 $ 28.54
------- ------- ------- ------- -------
Net Investment Income (Loss) ( 0.47)(F) ( 0.39)(F) ( 0.37) ( 0.31) ( 0.25)
Net Realized and Unrealized Gain (Loss) on Investments 15.43 10.55 7.31 5.69 7.59
------- ------- ------- ------- -------
Total from Investment Operations 14.96 10.16 6.94 5.38 7.34
------- ------- ------- ------- -------
Dividends from Net Investment Income -- -- -- -- --
Distributions from Capital Gains ( 6.94) ( 7.11) ( 5.61) ( 3.71) ( 3.34)
------- ------- ------- ------- -------
Total Distributions ( 6.94) ( 7.11) ( 5.61) ( 3.71) ( 3.34)
------- ------- ------- ------- -------
Net Asset Value End of Period $ 46.61 $ 38.59 $ 35.54 $ 34.21 $ 32.54
======= ======= ======= ======= =======
Total Return(C) 39.39% 30.15% 20.27% 16.52% 25.70%
Net Assets End of Period (in thousands) $181,232 $131,605 $112,738 $115,253 $121,207
Ratio of Expenses to Average Net Assets 1.52% 1.52% 1.65% 1.60%(E) 1.65%
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 1.52% 1.52% 1.65% 1.60%(E) 1.65%
Ratio of Net Investment Income (Loss) to Average Net Assets ( 1.15)% ( 1.01)% ( 1.06)% ( 0.87)% ( 0.82)%
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Reimbursement) ( 1.15)% ( 1.01)% ( 1.06)% ( 0.87)% ( 0.82)%
Portfolio Turnover Rate 170% 76% 61% 66% 65%
<CAPTION>
Year Ended December 31, For the Period
------------------------------------------------- 5/1/95
Enterprise Capital Appreciation Fund (Class B) 1999 1998 1997 1996 through 12/31/95
- ------------------------------------------------------------- ------------ ------------ ----------- ----------- -----------------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 37.50 $ 34.89 $ 33.86 $ 32.42 $ 30.04
------- ------- ------- ------- --------
Net Investment Income (Loss) ( 0.68)(F) ( 0.58)(F) ( 0.45) ( 0.35) ( 0.12)
Net Realized and Unrealized Gain (Loss)
on Investments 14.92 10.30 7.09 5.50 5.84
------- ------- ------- ------- --------
Total from Investment Operations 14.24 9.72 6.64 5.15 5.72
------- ------- ------- ------- --------
Dividends from Net Investment Income -- -- -- -- --
Distributions from Capital Gains ( 6.94) ( 7.11) ( 5.61) ( 3.71) ( 3.34)
------- ------- ------- ------- --------
Total Distributions ( 6.94) ( 7.11) ( 5.61) ( 3.71) ( 3.34)
------- ------- ------- ------- --------
Net Asset Value End of Period $ 44.80 $ 37.50 $ 34.89 $ 33.86 $ 32.42
======= ======= ======= ======= ========
Total Return(D) 38.62% 29.44% 19.60% 15.87% 18.99%(B)
Net Assets End of Period (in thousands) $40,276 $14,663 $ 7,862 $ 5,047 $ 1,953
Ratio of Expenses to Average Net Assets 2.08% 2.08% 2.21% 2.14%(E) 2.08%(A)
Ratio of Expenses to Average Net Assets (Excluding
Reimbursement) 2.08% 2.08% 2.21% 2.14%(E) 2.08%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets ( 1.69)% ( 1.56)% ( 1.61)% ( 1.43)% ( 1.41)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Reimbursement) ( 1.69)% ( 1.56)% ( 1.61)% ( 1.43)% ( 1.41)%(A)
Portfolio Turnover Rate 170% 76% 61% 66% 65%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
106
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights -- (Continued)
ENTERPRISE CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31, For the Period From
----------------------- 5/1/97
Enterprise Capital Appreciation Fund (Class C) 1999 1998 through 12/31/97
- ----------------------------------------------------------------------- ----------- ----------- --------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 38.25 $ 35.43 $ 33.54
------- ------- --------
Net Investment Income (Loss) ( 0.68)(F) ( 0.57)(F) ( 0.19)
Net Realized and Unrealized Gain (Loss) on Investments 15.22 10.50 7.69
------- ------- --------
Total from Investment Operations 14.54 9.93 7.50
------- ------- --------
Dividends from Net Investment Income -- -- --
Distributions from Capital Gains ( 6.94) ( 7.11) ( 5.61)
------- ------- --------
Total Distributions ( 6.94) ( 7.11) ( 5.61)
------- ------- --------
Net Asset Value End of Period $ 45.85 $ 38.25 $ 35.43
======= ======= ========
Total Return(D) 38.64% 29.60% 22.35%(B)
Net Assets End of Period (in thousands) $ 6,918 $ 1,040 $ 126
Ratio of Expenses to Average Net Assets 2.11% 2.11% 2.21%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 2.11% 2.11% 2.21%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets ( 1.69)% ( 1.53)% ( 1.88)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding
Reimbursement) ( 1.69)% ( 1.53)% ( 1.88)%(A)
Portfolio Turnover Rate 170% 76% 61%(A)
<CAPTION>
Year Ended For the Period 5/14/98
Enterprise Capital Appreciation Fund (Class Y) December 31, 1999 through 12/31/98
- ------------------------------------------------------------------------------------- ------------------- -----------------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 38.79 $ 40.71
-------- ---------
Net Investment Income (Loss) ( 0.28)(F) ( 0.15)(F)
Net Realized and Unrealized Gain (Loss) on Investments 15.57 5.34
-------- ---------
Total from Investment Operations 15.29 5.19
-------- ---------
Dividends from Net Investment Income -- --
Distributions from Capital Gains ( 6.94) ( 7.11)
-------- ---------
Total Distributions ( 6.94) ( 7.11)
-------- ---------
Net Asset Value End of Period $ 47.14 $ 38.79
======== =========
Total Return 40.04% 14.08%(B)
Net Assets End of Period (in thousands) $ 428 $ 204
Ratio of Expenses to Average Net Assets 1.07% 1.05%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 1.07% 1.05%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets ( 0.69)% ( 0.51)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) ( 0.69)% ( 0.51)%(A)
Portfolio Turnover Rate 170% 76%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
107
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
ENTERPRISE EQUITY FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31, For the Period
------------------------- 5/1/97
Enterprise Equity Fund (Class A) 1999 1998 through 12/31/97
- ------------------------------------------------------------------------------------- ------------ ------------ -----------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 6.47 $ 5.96 $ 5.00
-------- -------- ---------
Net Investment Income (Loss) (0.01)(F) 0.03 0.01
Net Realized and Unrealized Gain (Loss) on Investments 1.11 0.53 1.05
-------- -------- ---------
Total from Investment Operations 1.10 0.56 1.06
-------- -------- ---------
Dividends from Net Investment Income -- (0.02) --
Distributions from Capital Gains (0.31) (0.03) (0.10)
-------- -------- ---------
Total Distributions (0.31) (0.05) (0.10)
-------- -------- ---------
Net Asset Value End of Period $ 7.26 $ 6.47 $ 5.96
======== ======== =========
Total Return(C) 17.15% 9.38% 21.30%(B)
Net Assets End of Period (in thousands) $ 8,139 $ 6,741 $ 3,196
Ratio of Expenses to Average Net Assets 1.60% 1.60% 1.60%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 2.55% 2.73% 6.52%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (0.11)% 0.59% 0.26%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) (1.06)% (0.54)% (4.66)%(A)
Portfolio Turnover Rate 176% 35% 69%(A)
<CAPTION>
Year Ended December 31, For the Period
------------------------- 5/1/97
Enterprise Equity Fund (Class B) 1999 1998 through 12/31/97
- --------------------------------------------------------------------------------------- ------------ ------------ -----------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 6.43 $ 5.94 $ 5.00
------- -------- ---------
Net Investment Income (Loss) (0.04)(F) -- --
Net Realized and Unrealized Gain (Loss) on Investments 1.09 0.53 1.04
------- -------- ---------
Total from Investment Operations 1.05 0.53 1.04
------- -------- ---------
Dividends from Net Investment Income -- (0.01) --
Distributions from Capital Gains (0.31) (0.03) (0.10)
------- -------- ---------
Total Distributions (0.31) (0.04) (0.10)
------- -------- ---------
Net Asset Value End of Period $ 7.17 $ 6.43 $ 5.94
======= ======== =========
Total Return(D) 16.49% 8.82% 20.80%(B)
Net Assets End of Period (in thousands) $11,431 $ 8,731 $ 1,820
Ratio of Expenses to Average Net Assets 2.15% 2.15% 2.15%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 3.10% 3.29% 6.21%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (0.66)% 0.07% (0.23)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) (1.61)% (1.07)% (4.29)%(A)
Portfolio Turnover Rate 176% 35% 69%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
108
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights -- (Continued)
ENTERPRISE EQUITY FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31, For the Period
------------------------- 5/1/97
Enterprise Equity Fund (Class C) 1999 1998 through 12/31/97
- --------------------------------------------------------------------------------------- ------------ ------------ -----------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 6.44 $ 5.94 $ 5.00
-------- -------- ---------
Net Investment Income (Loss) (0.04)(F) 0.01 --
Net Realized and Unrealized Gain (Loss) on Investments 1.08 0.53 1.04
-------- -------- ---------
Total from Investment Operations 1.04 0.54 1.04
-------- -------- ---------
Dividends from Net Investment Income -- (0.01) --
Distributions from Capital Gains (0.31) (0.03) (0.10)
-------- -------- ---------
Total Distributions (0.31) (0.04) (0.10)
-------- -------- ---------
Net Asset Value End of Period $ 7.17 $ 6.44 $ 5.94
======== ======== =========
Total Return(D) 16.30% 8.98% 20.89%(B)
Net Assets End of Period (in thousands) $ 2,144 $ 1,504 $ 283
Ratio of Expenses to Average Net Assets 2.15% 2.15% 2.15%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 3.09% 3.28% 6.01%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (0.64)% 0.09% (0.21)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) (1.58)% (1.03)% (4.07)%(A)
Portfolio Turnover Rate 176% 35% 69%(A)
<CAPTION>
For the Period
Year Ended 10/14/98
Enterprise Equity Fund (Class Y) December 31, 1999 through 12/31/98
- --------------------------------------------------------------------------------------- ------------------- -----------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 6.43 $ 5.86
------- --------
Net Investment Income (Loss) 0.01(F) 0.01
Net Realized and Unrealized Gain (Loss) on Investments 1.13 0.63
------- --------
Total from Investment Operations 1.14 0.64
------- --------
Dividends from Net Investment Income -- (0.04)
Distributions from Capital Gains (0.31) (0.03)
------- --------
Total Distributions (0.31) (0.07)
------- --------
Net Asset Value End of Period $ 7.26 $ 6.43
======= ========
Total Return 17.89% 10.93%(B)
Net Assets End of Period (in thousands) $ 161 $ 57
Ratio of Expenses to Average Net Assets 1.15% 1.13%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 2.15% 2.26%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 0.21% 1.04%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) (0.79)% (0.11)%(A)
Portfolio Turnover Rate 176% 35%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
109
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
ENTERPRISE GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31, For the Period For the Period
----------------------- 10/1/97 7/17/97
Enterprise Growth and Income Fund (Class A) 1999 1998 through 12/31/97 through 9/30/97
- ------------------------------------------------------------------- ----------- ----------- ----------------- ----------------
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 29.01 $ 25.19 $ 25.71 $ 25.05
------- ------- -------- --------
Net Investment Income (Loss) --(F) 0.14 0.01 --
Net Realized and Unrealized Gain (Loss) on Investments 9.57 4.00 0.04 0.66
------- ------- -------- --------
Total from Investment Operations 9.57 4.14 0.05 0.66
------- ------- -------- --------
Dividends from Net Investment Income -- ( 0.09) ( 0.11) --
Distributions from Capital Gains ( 0.01) ( 0.23) ( 0.46) --
------- ------- -------- --------
Total Distributions ( 0.01) ( 0.32) ( 0.57) --
------- ------- -------- --------
Net Asset Value End of Period $ 38.57 $ 29.01 $ 25.19 $ 25.71
======= ======= ======== ========
Total Return(C) 32.97% 16.50% 0.20%(B) 2.63%(B)
Net Assets End of Period (in thousands) $65,759 $16,664 $ 4,032 $ 1,109
Ratio of Expenses to Average Net Assets 1.50% 1.50% 1.50%(A) 1.50%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 1.64% 1.93% 2.11%(A) 4.47%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 0.00% 0.41% 0.56%(A) 0.07%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Reimbursement) ( 0.15)% ( 0.03)% ( 0.04)%(A) ( 2.90)%(A)
Portfolio Turnover Rate 3% 5% 1%(A) 16%(A)
<CAPTION>
Year Ended December 31, For the Period For the Period
------------------------- 10/1/97 7/17/97
Enterprise Growth and Income Fund (Class B) 1999 1998 through 12/31/97 through 9/30/97
- ------------------------------------------------------------------- ------------ ------------ ----------------- ----------------
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 28.90 $ 25.15 $ 25.68 $ 25.05
------- ------- -------- --------
Net Investment Income (Loss) ( 0.18)(F) 0.05 ( 0.01) ( 0.01)
Net Realized and Unrealized Gain (Loss) on Investments 9.49 3.95 0.03 0.64
------- ------- -------- --------
Total from Investment Operations 9.31 4.00 0.02 0.63
------- ------- -------- --------
Dividends from Net Investment Income -- ( 0.02) ( 0.09) --
Distributions from Capital Gains ( 0.01) ( 0.23) ( 0.46) --
------- ------- -------- --------
Total Distributions ( 0.01) ( 0.25) ( 0.55) --
------- ------- -------- --------
Net Asset Value End of Period $ 38.20 $ 28.90 $ 25.15 $ 25.68
======= ======= ======== ========
Total Return(D) 32.20% 15.95% 0.07%(B) 2.51%(B)
Net Assets End of Period (in thousands) $74,597 $21,891 $ 3,257 $ 992
Ratio of Expenses to Average Net Assets 2.05% 2.05% 2.05%(A) 2.05%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 2.19% 2.48% 2.66%(A) 4.59%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets ( 0.56)% ( 0.17)% ( 0.02)%(A) ( 0.34)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Reimbursement) ( 0.70)% ( 0.60)% ( 0.63)%(A) ( 2.87)%(A)
Portfolio Turnover Rate 3% 5% 1%(A) 16%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
110
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights -- (Continued)
ENTERPRISE GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31, For the Period For the Period
------------------------ 10/1/97 7/17/97
Enterprise Growth and Income Fund (Class C) 1999 1998 through 12/31/97 through 9/30/97
- ------------------------------------------------------------------- ------------ ----------- ----------------- ----------------
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 28.91 $ 25.15 $ 25.68 $ 25.05
------- ------- -------- --------
Net Investment Income (Loss) ( 0.19)(F) 0.06 ( 0.02) ( 0.01)
Net Realized and Unrealized Gain (Loss) on Investments 9.53 3.94 0.05 0.64
------- ------- -------- --------
Total from Investment Operations 9.34 4.00 0.03 0.63
------- ------- -------- --------
Dividends from Net Investment Income -- ( 0.01) ( 0.10) --
Distributions from Capital Gains ( 0.01) ( 0.23) ( 0.46) --
------- ------- -------- --------
Total Distributions ( 0.01) ( 0.24) ( 0.56) --
------- ------- -------- --------
Net Asset Value End of Period $ 38.24 $ 28.91 $ 25.15 $ 25.68
======= ======= ======== ========
Total Return(D) 32.29% 15.95% 0.10%(B) 2.51%(B)
Net Assets End of Period (in thousands) $13,710 $ 4,654 $ 561 $ 99
Ratio of Expenses to Average Net Assets 2.05% 2.05% 2.05%(A) 2.05%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 2.20% 2.49% 2.64%(A) 4.60%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets ( 0.58)% ( 0.16)% 0.03%(A) ( 0.39)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Reimbursement) ( 0.72)% ( 0.60)% ( 0.56)%(A) ( 2.94)%(A)
Portfolio Turnover Rate 3% 5% 1%(A) 16%(A)
<CAPTION>
Year Ended December 31, For the Period Year Year Year
----------------------- 10/1/97 Ended Ended Ended
Enterprise Growth and Income Fund (Class Y) 1999 1998 through 12/31/97 9/30/97 9/30/96 9/30/95
- ----------------------------------------------------- ----------- ----------- ----------------- ----------- ----------- -----------
<S> <C> <C> C> <C> <C> <C>
Net Asset Value Beginning of Period $ 29.13 $ 25.24 $ 25.73 $ 20.11 $ 16.69 $ 12.72
------- ------- ------- ------- ------- -------
Net Investment Income (Loss) 0.14(F) 0.29 0.06 0.35 0.21 0.13
Net Realized and Unrealized Gain (Loss) on
Investments 9.65 4.00 0.02 6.18 3.45 4.22
------- ------- ------- ------- ------- -------
Total from Investment Operations 9.79 4.29 0.08 6.53 3.66 4.35
------- ------- ------- ------- ------- -------
Dividends from Net Investment Income -- ( 0.17) ( 0.11) ( 0.20) ( 0.24) ( 0.16)
Distributions from Capital Gains ( 0.01) ( 0.23) ( 0.46) ( 0.71) -- ( 0.22)
------- ------- ------- ------- -------- --------
Total Distributions ( 0.01) ( 0.40) ( 0.57) ( 0.91) ( 0.24) ( 0.38)
------- ------- ------- ------- -------- --------
Net Asset Value End of Period $ 38.91 $ 29.13 $ 25.24 $ 25.73 $ 20.11 $ 16.69
======= ======= ======= ======= ======== ========
Total Return 33.59% 17.08% 0.31%(B) 33.55% 22.21% 35.24%
Net Assets End of Period (in thousands) $17,116 $18,310 $15,542 $15,428 $ 8,865 $ 5,657
Ratio of Expenses to Average Net Assets 1.05% 1.05% 1.05%(A) 0.99% 0.97% 0.90%
Ratio of Expenses to Average Net Assets (Excluding
Reimbursement) 1.18% 1.48% 1.68%(A) 2.20% 2.05% 2.20%
Ratio of Net Investment Income (Loss) to Average Net
Assets 0.41% 0.89% 0.96%(A) 0.88% 1.23% 1.52%
Ratio of Net Investment Income (Loss) to Average Net
Assets (Excluding Reimbursement) 0.29% 0.45% 0.33%(A) ( 0.33)% 0.15% 0.22%
Portfolio Turnover Rate 3% 5% 1%(A) 16% 18% 25%
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
111
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
ENTERPRISE EQUITY INCOME FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------------------
Enterprise Equity Income Fund (Class A) 1999 1998 1997 1996 1995
- ------------------------------------------------------------- ------------ ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 26.89 $ 26.42 $ 22.44 $ 20.73 $ 16.43
------- ------- ------- ------- -------
Net Investment Income (Loss) 0.22(F) 0.36 0.17 0.41 0.45
Net Realized and Unrealized Gain (Loss) on Investments 1.69 2.52 5.95 3.27 5.00
------- ------- ------- ------- -------
Total from Investment Operations 1.91 2.88 6.12 3.68 5.45
------- ------- ------- ------- -------
Dividends from Net Investment Income ( 0.20) ( 0.35) ( 0.15) ( 0.40) ( 0.45)
Distributions from Capital Gains ( 1.12) ( 2.06) ( 1.99) ( 1.57) ( 0.70)
-------- -------- ------- ------- -------
Total Distributions ( 1.32) ( 2.41) ( 2.14) ( 1.97) ( 1.15)
-------- -------- ------- ------- -------
Net Asset Value End of Period $ 27.48 $ 26.89 $ 26.42 $ 22.44 $ 20.73
======== ======== ======= ======= =======
Total Return(C) 7.20% 11.13% 28.08% 17.86% 33.40%
Net Assets End of Period (in thousands) $111,395 $111,275 $97,932 $72,647 $61,906
Ratio of Expenses to Average Net Assets 1.50% 1.50% 1.50% 1.50% 1.50%
Ratio of Expenses to Average Net Assets (Excluding
Reimbursement) 1.51% 1.58% 1.62% 1.68% 1.78%
Ratio of Net Investment Income (Loss) to Average Net Assets 0.76% 1.32% 1.35% 1.87% 2.33%
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Reimbursement) 0.74% 1.25% 1.23% 1.69% 2.06%
Portfolio Turnover Rate 32% 31% 33% 33% 26%
<CAPTION>
Year Ended December 31, For the Period
----------------------------------------------- 5/1/95
Enterprise Equity Income Fund (Class B) 1999 1998 1997 1996 through 12/31/95
- ------------------------------------------------------------- ----------- ----------- ----------- ----------- -----------------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 26.57 $ 26.17 $ 22.30 $ 20.67 $ 18.12
------- ------- ------- ------- -------
Net Investment Income (Loss) 0.06(F) 0.20 0.12 0.24 0.29
Net Realized and Unrealized Gain (Loss) on Investments 1.65 2.49 5.83 3.30 3.40
------- ------- ------- ------- -------
Total from Investment Operations 1.71 2.69 5.95 3.54 3.69
------- ------- ------- ------- -------
Dividends from Net Investment Income ( 0.06) ( 0.23) ( 0.09) ( 0.34) ( 0.44)
Distributions from Capital Gains ( 1.12) ( 2.06) ( 1.99) ( 1.57) ( 0.70)
------- ------- ------- -------- -------
Total Distributions ( 1.18) ( 2.29) ( 2.08) ( 1.91) ( 1.14)
------- ------- ------- -------- -------
Net Asset Value End of Period $ 27.10 $ 26.57 $ 26.17 $ 22.30 $ 20.67
======= ======= ======= ======== =======
Total Return(D) 6.55% 10.49% 27.35% 17.22% 20.57%(B)
Net Assets End of Period (in thousands) $44,574 $33,807 $19,055 $ 5,615 $ 1,086
Ratio of Expenses to Average Net Assets 2.05% 2.05% 2.05% 2.05% 2.05%(A)
Ratio of Expenses to Average Net Assets (Excluding
Reimbursement) 2.07% 2.13% 2.17% 2.23% 2.23%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 0.20% 0.78% 0.77% 1.32% 1.56%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Reimbursement) 0.18% 0.71% 0.65% 1.14% 1.33%(A)
Portfolio Turnover Rate 32% 31% 33% 33% 26%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
112
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights -- (Continued)
ENTERPRISE EQUITY INCOME FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31, For the Period From
----------------------- 5/1/97
Enterprise Equity Income Fund (Class C) 1999 1998 through 12/31/97
- ----------------------------------------------------------------------- ----------- ----------- --------------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 26.70 $ 26.31 $ 24.26
------- ------- -------
Net Investment Income (Loss) 0.06(F) 0.21 0.04
Net Realized and Unrealized Gain (Loss) on Investments 1.69 2.49 4.14
------- ------- -------
Total from Investment Operations 1.75 2.70 4.18
------- ------- -------
Dividends from Net Investment Income ( 0.07) ( 0.25) ( 0.14)
Distributions from Capital Gains ( 1.12) ( 2.06) ( 1.99)
-------- -------- -------
Total Distributions ( 1.19) ( 2.31) ( 2.13)
-------- -------- -------
Net Asset Value End of Period $ 27.26 $ 26.70 $ 26.31
======== ======== =======
Total Return(D) 6.64% 10.47% 18.21%(B)
Net Assets End of Period (in thousands) $ 9,338 $ 5,639 $ 1,857
Ratio of Expenses to Average Net Assets 2.05% 2.05% 2.05%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 2.07% 2.13% 2.20%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 0.20% 0.81% 0.69%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding
Reimbursement) 0.18% 0.73% 0.54%(A)
Portfolio Turnover Rate 32% 31% 33%(A)
<CAPTION>
For the Period
Year Ended 1/22/98
Enterprise Equity Income Fund (Class Y) December 31, 1999 through 12/31/98
- --------------------------------------------------------------------------------------- ------------------- -----------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 26.87 $ 26.25
------- -------
Net Investment Income (Loss) 0.34(F) 0.47
Net Realized and Unrealized Gain (Loss) on Investments 1.70 2.69
------- -------
Total from Investment Operations 2.04 3.16
------- -------
Dividends from Net Investment Income ( 0.33) ( 0.48)
Distributions from Capital Gains ( 1.12) ( 2.06)
-------- -------
Total Distributions ( 1.45) ( 2.54)
-------- -------
Net Asset Value End of Period $ 27.46 $ 26.87
======== =======
Total Return 7.69% 12.26%(B)
Net Assets End of Period (in thousands) $ 153 $ 112
Ratio of Expenses to Average Net Assets 1.05% 1.05%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 1.07% 1.13%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 1.20% 1.79%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) 1.18% 1.72%(A)
Portfolio Turnover Rate 32% 31%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
113
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
ENTERPRISE INTERNATIONAL GROWTH FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------------------------
Enterprise International Growth Fund (Class A) 1999 1998 1997 1996 1995
- ----------------------------------------------------------------------- ------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 18.89 $ 16.71 $ 17.10 $ 16.08 $ 14.70
------- ------- ------- ------- -------
Net Investment Income (Loss) ( 0.11)(F) 0.06 0.08 0.10 0.11
Net Realized and Unrealized Gain (Loss) on Investments 7.37 2.32 0.73 1.88 2.12
------- ------- ------- ------- -------
Total from Investment Operations 7.26 2.38 0.81 1.98 2.23
------- ------- ------- ------- -------
Dividends from Net Investment Income ( 0.16) ( 0.05) ( 0.07) ( 0.09) ( 0.09)
Distributions from Capital Gains ( 2.18) ( 0.15) ( 1.13) ( 0.87) ( 0.76)
------- ------- ------- ------- -------
Total Distributions ( 2.34) ( 0.20) ( 1.20) ( 0.96) ( 0.85)
------- ------- ------- ------- -------
Net Asset Value End of Period $ 23.81 $ 18.89 $ 16.71 $ 17.10 $ 16.08
======= ======= ======= ======= =======
Total Return(C) 39.76% 14.28% 4.75% 12.32% 15.17%
Net Assets End of Period (in thousands) $55,426 $41,458 $38,020 $34,837 $28,628
Ratio of Expenses to Average Net Assets 1.94% 2.00% 2.00% 2.00% 2.00%
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 1.94% 2.11% 2.11% 2.19% 2.40%
Ratio of Net Investment Income (Loss) to Average Net Assets ( 0.53)% 0.30% 0.50% 0.61% 0.70%
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding
Reimbursement) ( 0.53)% 0.19% 0.39% 0.42% 0.30%
Portfolio Turnover Rate 131% 52% 27% 24% 31%
<CAPTION>
Year Ended December 31, For the Period
------------------------------------------------- 5/1/95
Enterprise International Growth Fund (Class B) 1999 1998 1997 1996 through 12/31/95
- ---------------------------------------------------------------- ------------ ------------ ----------- ----------- -----------------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 18.62 $ 16.53 $ 16.97 $ 16.02 $ 14.82
------- ------- -------- -------- ---------
Net Investment Income (Loss) ( 0.21)(F) ( 0.04) 0.01 0.01 ( 0.02)
Net Realized and Unrealized Gain (Loss) on Investments 7.23 2.28 0.69 1.87 2.08
------- ------- -------- -------- ---------
Total from Investment Operations 7.02 2.24 0.70 1.88 2.06
------- ------- -------- -------- ---------
Dividends from Net Investment Income ( 0.06) -- ( 0.01) ( 0.06) ( 0.10)
Distributions from Capital Gains ( 2.18) ( 0.15) ( 1.13) ( 0.87) ( 0.76)
------- ------- -------- -------- ---------
Total Distributions ( 2.24) ( 0.15) ( 1.14) ( 0.93) ( 0.86)
------- ------- -------- -------- ---------
Net Asset Value End of Period $ 23.40 $ 18.62 $ 16.53 $ 16.97 $ 16.02
======= ======= ======== ======== =========
Total Return(D) 39.02% 13.57% 4.17% 11.72% 13.88%(B)
Net Assets End of Period (in thousands) $23,475 $16,008 $ 9,878 $ 4,276 $ 1,094
Ratio of Expenses to Average Net Assets 2.48% 2.55% 2.55% 2.55% 2.55%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 2.48% 2.66% 2.67% 2.75% 2.75%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets ( 1.10)% ( 0.28)% ( 0.06)% 0.09% ( 0.65)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Reimbursement) ( 1.10)% ( 0.39)% ( 0.18)% ( 0.11)% ( 0.85)%(A)
Portfolio Turnover Rate 131% 52% 27% 24% 31%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
114
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights -- (Continued)
ENTERPRISE INTERNATIONAL GROWTH FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31, For the Period
----------------------- 5/1/97
Enterprise International Growth Fund (Class C) 1999 1998 through 12/31/97
- --------------------------------------------------------------------------------------- ----------- ----------- -----------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 18.77 $ 16.66 $ 17.51
------- ------- --------
Net Investment Income (Loss) ( 0.22)(F) ( 0.04) ( 0.03)
Net Realized and Unrealized Gain (Loss) on Investments 7.29 2.31 0.39
------- ------- --------
Total from Investment Operations 7.07 2.27 0.36
------- ------- --------
Dividends from Net Investment Income ( 0.07) ( 0.01) ( 0.08)
Distributions from Capital Gains ( 2.18) ( 0.15) ( 1.13)
------- ------- --------
Total Distributions ( 2.25) ( 0.16) ( 1.21)
------- ------- --------
Net Asset Value End of Period $ 23.59 $ 18.77 $ 16.66
======= ======= ========
Total Return(D) 38.95% 13.64% 2.07%(B)
Net Assets End of Period (in thousands) $ 5,771 $ 3,498 $ 1,113
Ratio of Expenses to Average Net Assets 2.48% 2.55% 2.55%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 2.48% 2.67% 2.75%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets ( 1.12)% ( 0.35)% ( 0.51)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) ( 1.12)% ( 0.47)% ( 0.71)%(A)
Portfolio Turnover Rate 131% 52% 27%(A)
<CAPTION>
Year Ended December 31, For the Period
------------------------------------------------ 7/5/95
Enterprise International Growth Fund (Class Y) 1999 1998 1997 1996 through 12/31/95
- ----------------------------------------------------------------- ------------ ----------- ----------- ----------- -----------------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 18.88 $ 16.71 $ 17.10 $ 16.07 $ 14.93
------- ------- ------- ------- --------
Net Investment Income (Loss) ( 0.03)(F) 0.14 0.17 0.14 0.02
Net Realized and Unrealized Gain (Loss) on Investments 7.40 2.32 0.72 1.92 2.02
------- ------- ------- ------- --------
Total from Investment Operations 7.37 2.46 0.89 2.06 2.04
------- ------- ------- ------- --------
Dividends from Net Investment Income ( 0.25) ( 0.14) ( 0.15) ( 0.16) ( 0.14)
Distributions from Capital Gains ( 2.18) ( 0.15) ( 1.13) ( 0.87) ( 0.76)
------- ------- ------- -------- --------
Total Distributions ( 2.43) ( 0.29) ( 1.28) ( 1.03) ( 0.90)
------- ------- ------- -------- --------
Net Asset Value End of Period $ 23.82 $ 18.88 $ 16.71 $ 17.10 $ 16.07
======= ======= ======= ======== ========
Total Return 40.39% 14.73% 5.21% 12.86% 13.65%(B)
Net Assets End of Period (in thousands) $20,738 $13,379 $10,986 $ 8,828 $ 3,109
Ratio of Expenses to Average Net Assets 1.48% 1.55% 1.55% 1.55% 1.55%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 1.48% 1.66% 1.66% 1.75% 1.75%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets ( 0.14)% 0.75% 0.95% 1.03% 0.26%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Reimbursement) ( 0.14)% 0.64% 0.84% 0.84% 0.05%(A)
Portfolio Turnover Rate 131% 52% 27% 24% 31%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
115
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
ENTERPRISE INTERNET FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Period
7/1/99
Enterprise Internet Fund (Class A) through 12/31/99
- --------------------------------------------------------------------------------------- -----------------
<S> <C>
Net Asset Value Beginning of Period $ 10.00
---------
Net Investment Income (Loss) ( 0.12)(F)
Net Realized and Unrealized Gain (Loss) on Investments 22.19
---------
Total from Investment Operations 22.07
---------
Dividends from Net Investment Income --
Distributions from Capital Gains ( 0.35)
---------
Total Distributions ( 0.35)
---------
Net Asset Value End of Period $ 31.72
=========
Total Return(C) 220.79%(B)
Net Assets End of Period (in thousands) $ 119,283
Ratio of Expenses to Average Net Assets 1.90%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 2.04%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets ( 1.28)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) ( 1.42)%(A)
Portfolio Turnover Rate 31%
<CAPTION>
For the Period
7/1/99
Enterprise Internet Fund (Class B) through 12/31/99
- --------------------------------------------------------------------------------------- -----------------
<S> <C>
Net Asset Value Beginning of Period $ 10.00
---------
Net Investment Income (Loss) ( 0.18)(F)
Net Realized and Unrealized Gain (Loss) on Investments 22.18
---------
Total from Investment Operations 22.00
---------
Dividends from Net Investment Income --
Distributions from Capital Gains ( 0.35)
---------
Total Distributions ( 0.35)
---------
Net Asset Value End of Period $ 31.65
=========
Total Return(D) 220.09%(B)
Net Assets End of Period (in thousands) $ 107,176
Ratio of Expenses to Average Net Assets 2.45%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 2.56%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets ( 1.85)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) ( 1.96)%(A)
Portfolio Turnover Rate 31%
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
116
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights -- (Continued)
ENTERPRISE INTERNET FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Period
7/1/99
Enterprise Internet Fund (Class C) through 12/31/99
- --------------------------------------------------------------------------------------- -----------------
<S> <C>
Net Asset Value Beginning of Period $ 10.00
---------
Net Investment Income (Loss) ( 0.17)(F)
Net Realized and Unrealized Gain (Loss) on Investments 22.17
---------
Total from Investment Operations 22.00
---------
Dividends from Net Investment Income --
Distributions from Capital Gains ( 0.35)
---------
Total Distributions ( 0.35)
---------
Net Asset Value End of Period $ 31.65
=========
Total Return(D) 220.09%(B)
Net Assets End of Period (in thousands) $ 35,448
Ratio of Expenses to Average Net Assets 2.45%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 2.57%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets ( 1.84)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) ( 1.96)%(A)
Portfolio Turnover Rate 31%
<CAPTION>
For the Period
7/1/99
Enterprise Internet Fund (Class Y) through 12/31/99
- --------------------------------------------------------------------------------------- -----------------
<S> <C>
Net Asset Value Beginning of Period $ 10.00
---------
Net Investment Income (Loss) ( 0.06)(F)
Net Realized and Unrealized Gain (Loss) on Investments 22.23
---------
Total from Investment Operations 22.17
---------
Dividends from Net Investment Income --
Distributions from Capital Gains ( 0.35)
---------
Total Distributions ( 0.35)
---------
Net Asset Value End of Period $ 31.82
=========
Total Return 221.79%(B)
Net Assets End of Period (in thousands) $ 1,381
Ratio of Expenses to Average Net Assets 1.45%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 1.79%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets ( 0.68)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) ( 1.02)%(A)
Portfolio Turnover Rate 31%
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
117
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
ENTERPRISE GLOBAL FINANCIAL SERVICES FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Period
Year Ended 10/1/98
Enterprise Global Financial Services Fund (Class A) December 31, 1999 through 12/31/98
- --------------------------------------------------------------------------------------- ------------------- -----------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 6.05 $ 5.00
------- --------
Net Investment Income (Loss) 0.06(F) 0.01
Net Realized and Unrealized Gain (Loss) on Investments (0.37) 1.04
------- --------
Total from Investment Operations (0.31) 1.05
------- --------
Dividends from Net Investment Income (0.04) --
Distributions from Capital Gains (0.12) --
------- --------
Total Distributions (0.16) --
------- --------
Net Asset Value End of Period $ 5.58 $ 6.05
======= ========
Total Return(C) (5.01)% 21.00%(B)
Net Assets End of Period (in thousands) $ 5,179 $ 1,426
Ratio of Expenses to Average Net Assets 1.75% 1.75%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 2.92% 6.58%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 1.00% 0.16%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) (0.17)% (4.68)%(A)
Portfolio Turnover Rate 16% 2%
<CAPTION>
For the Period
Year Ended 10/1/98
Enterprise Global Financial Services Fund (Class B) December 31, 1999 through 12/31/98
- --------------------------------------------------------------------------------------- ------------------- -----------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 6.03 $ 5.00
------- --------
Net Investment Income (Loss) 0.03(F) 0.01
Net Realized and Unrealized Gain (Loss) on Investments (0.37) 1.02
------- --------
Total from Investment Operations (0.34) 1.03
------- --------
Dividends from Net Investment Income (0.02) --
Distributions from Capital Gains (0.12) --
------- --------
Total Distributions (0.14) --
------- --------
Net Asset Value End of Period $ 5.55 $ 6.03
======= ========
Total Return(D) (5.50)% 20.60%(B)
Net Assets End of Period (in thousands) $ 4,661 $ 1,023
Ratio of Expenses to Average Net Assets 2.30% 2.30%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 3.49% 7.50%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 0.44% (0.49)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) (0.75)% (5.69)%(A)
Portfolio Turnover Rate 16% 2%
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
118
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights -- (Continued)
ENTERPRISE GLOBAL FINANCIAL SERVICES FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Period
Year Ended 10/1/98
Enterprise Global Financial Services Fund (Class C) December 31, 1999 through 12/31/98
- --------------------------------------------------------------------------------------- ------------------- -----------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 6.03 $ 5.00
------- --------
Net Investment Income (Loss) 0.02(F) 0.01
Net Realized and Unrealized Gain (Loss) on Investments (0.34) 1.02
------- --------
Total from Investment Operations (0.32) 1.03
------- --------
Dividends from Net Investment Income (0.03) --
Distributions from Capital Gains (0.12) --
------- --------
Total Distributions (0.15) --
------- --------
Net Asset Value End of Period $ 5.56 $ 6.03
======= ========
Total Return(D) (5.31)% 20.60%(B)
Net Assets End of Period (in thousands) $ 718 $ 218
Ratio of Expenses to Average Net Assets 2.30% 2.30%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 3.50% 6.42%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 0.39% (0.33)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) (0.81)% (4.45)%(A)
Portfolio Turnover Rate 16% 2%
<CAPTION>
For the Period
Year Ended 10/1/98
Enterprise Global Financial Services Fund (Class Y) December 31, 1999 through 12/31/98
- --------------------------------------------------------------------------------------- ------------------- -----------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 6.05 $ 5.00
------- --------
Net Investment Income (Loss) 0.10(F) 0.01
Net Realized and Unrealized Gain (Loss) on Investments (0.38) 1.04
------- --------
Total from Investment Operations (0.28) 1.05
------- --------
Dividends from Net Investment Income (0.06) --
Distributions from Capital Gains (0.12) --
------- --------
Total Distributions (0.18) --
------- --------
Net Asset Value End of Period $ 5.59 $ 6.05
======= ========
Total Return (4.51)% 21.00%(B)
Net Assets End of Period (in thousands) $ 5,477 $ 5,697
Ratio of Expenses to Average Net Assets 1.30% 1.30%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 2.57% 5.09%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 1.63% 0.61%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) 0.36% (3.18)%(A)
Portfolio Turnover Rate 16% 2%
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
119
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
ENTERPRISE MANAGED FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------- ------------------------------------
Enterprise Managed Fund (Class A) 1999 1998 1997 1996 1995
- ----------------------------------------------------------------- ------------ ------------ ------------ ------------ ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 9.26 $ 9.25 $ 7.97 $ 6.70 $ 4.91
------- ------- ------- ------- -------
Net Investment Income (Loss) 0.06(F) 0.06 0.04 0.06 0.04
Net Realized and Unrealized Gain (Loss) on Investments 0.61 0.58 1.64 1.41 1.81
------- ------- ------- ------- -------
Total from Investment Operations 0.67 0.64 1.68 1.47 1.85
------- ------- ------- ------- -------
Dividends from Net Investment Income (0.06) (0.05) (0.04) (0.06) (0.03)
Distributions from Capital Gains (0.81) (0.58) (0.36) (0.14) (0.03)
-------- -------- -------- -------- -------
Total Distributions (0.87) (0.63) (0.40) (0.20) (0.06)
-------- -------- -------- -------- -------
Net Asset Value End of Period $ 9.06 $ 9.26 $ 9.25 $ 7.97 $ 6.70
======== ======== ======== ======== =======
Total Return(C) 7.40% 7.05% 21.05% 22.08% 37.69%
Net Assets End of Period (in thousands) $144,519 $175,084 $156,608 $101,022 $47,839
Ratio of Expenses to Average Net Assets 1.48% 1.50% 1.49% 1.57% 1.75%
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 1.48% 1.50% 1.49% 1.57% 1.90%
Ratio of Net Investment Income (Loss) to Average Net Assets 0.60% 0.57% 0.47% 1.12% 1.09%
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Reimbursement) 0.60% 0.57% 0.47% 1.12% 0.94%
Portfolio Turnover Rate 95% 43% 28% 33% 26%
<CAPTION>
Year Ended December 31, For the Period
--------------------------------------------------- 5/1/95
Enterprise Managed Fund (Class B) 1999 1998 1997 1996 through 12/31/95
- ------------------------------------------------------------ ------------ ------------ ------------- ----------- -----------------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 9.17 $ 9.19 $ 7.93 $ 6.68 $ 5.68
------- ------- ------- ------ -------
Net Investment Income (Loss) 0.00(F),(G) -- (0.01) 0.02 0.01
Net Realized and Unrealized Gain (Loss) on Investments 0.61 0.57 1.63 1.41 1.05
--------- -------- ------- ------ -------
Total from Investment Operations 0.61 0.57 1.62 1.43 1.06
--------- -------- ------- ------ -------
Dividends from Net Investment Income (0.01) (0.01) -- (0.04) (0.03)
Distributions from Capital Gains (0.81) (0.58) (0.36) (0.14) (0.03)
--------- -------- ------- ------- -------
Total Distributions (0.82) (0.59) (0.36) (0.18) (0.06)
--------- -------- ------- ------- -------
Net Asset Value End of Period $ 8.96 $ 9.17 $ 9.19 $ 7.93 $ 6.68
========= ======== ======= ======= =======
Total Return(D) 6.75% 6.31% 20.45% 21.50% 18.38%(B)
Net Assets End of Period (in thousands) $149,098 $161,552 $110,213 $57,037 $16,792
Ratio of Expenses to Average Net Assets 2.03% 2.05% 2.04% 2.13% 2.30%(A)
Ratio of Expenses to Average Net Assets (Excluding
Reimbursement) 2.03% 2.05% 2.04% 2.13% 2.45%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 0.04% 0.02% (0.09)% 0.52% 0.31%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Reimbursement) 0.04% 0.02% (0.09)% 0.52% 0.14%(A)
Portfolio Turnover Rate 95% 43% 28% 33% 26%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
120
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights -- (Continued)
ENTERPRISE MANAGED FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31, For the Period
------------------------ 5/1/97
Enterprise Managed Fund (Class C) 1999 1998 through 12/31/97
- --------------------------------------------------------------------------------------- ------------ ----------- -----------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 9.09 $ 9.21 $ 8.24
------ ------ ---------
Net Investment Income (Loss) 0.00(F),(G) (0.01) --
Net Realized and Unrealized Gain (Loss) on Investments 0.68 0.49 1.38
------ ------- ---------
Total from Investment Operations 0.68 0.48 1.38
------ ------- ---------
Dividends from Net Investment Income -- (0.02) (0.05)
Distributions from Capital Gains (0.81) (0.58) (0.36)
------ ------- ---------
Total Distributions (0.81) (0.60) (0.41)
------ ------- ---------
Net Asset Value End of Period $ 8.96 $ 9.09 $ 9.21
====== ======= =========
Total Return(D) 7.64% 5.36% 16.74%(B)
Net Assets End of Period (in thousands) $9,957 $11,654 $ 3,614
Ratio of Expenses to Average Net Assets 2.03% 2.05% 2.06%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 2.03% 2.05% 2.06%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 0.05% 0.02% (0.18)%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) 0.05% 0.02% (0.18)%(A)
Portfolio Turnover Rate 95% 43% 28%(A)
<CAPTION>
Year Ended December 31,
-----------------------------------------------
Enterprise Managed Fund (Class Y) 1999 1998 1997 1996
- ----------------------------------------------------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 9.25 $ 9.27 $ 7.98 $ 6.70
------ ------ ------ ------
Net Investment Income (Loss) 0.10F 0.10 0.08 0.09
Net Realized and Unrealized Gain (Loss) on Investments 0.62 0.55 1.64 1.42
------ ------ ------ ------
Total from Investment Operations 0.72 0.65 1.72 1.51
------ ------ ------ ------
Dividends from Net Investment Income (0.11) (0.09) (0.07) (0.09)
Distributions from Capital Gains (0.81) (0.58) (0.36) (0.14)
------- ------- ------- -------
Total Distributions (0.92) (0.67) (0.43) (0.23)
------- ------- ------- -------
Net Asset Value End of Period $ 9.05 $ 9.25 $ 9.27 $ 7.98
======= ======= ======= =======
Total Return 7.94% 7.20% 21.60% 22.63%
Net Assets End of Period (in thousands) $81,090 $89,084 $80,879 $57,794
Ratio of Expenses to Average Net Assets 1.03% 1.05% 1.04% 1.12%
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 1.03% 1.05% 1.04% 1.12%
Ratio of Net Investment Income (Loss) to Average Net Assets 1.04% 1.01% 0.92% 1.57%
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding
Reimbursement) 1.04% 1.01% 0.92% 1.57%
Portfolio Turnover Rate 95% 43% 28% 33%
<CAPTION>
For the Period
7/5/95
Enterprise Managed Fund (Class Y) through 12/31/95
- ----------------------------------------------------------------------- -----------------
<S> <C>
Net Asset Value Beginning of Period $ 6.17
-------
Net Investment Income (Loss) 0.03
Net Realized and Unrealized Gain (Loss) on Investments 0.57
-------
Total from Investment Operations 0.60
-------
Dividends from Net Investment Income (0.04)
Distributions from Capital Gains (0.03)
-------
Total Distributions (0.07)
-------
Net Asset Value End of Period $ 6.70
=======
Total Return 9.80%(B)
Net Assets End of Period (in thousands) $26,664
Ratio of Expenses to Average Net Assets 1.30%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 1.41%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 1.39%(A)
Ratio of Net Investment Income (Loss) to Average NetAssets (Excluding
Reimbursement) 1.28%(A)
Portfolio Turnover Rate 26%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
121
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
ENTERPRISE BALANCED FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Period
7/1/99 through
Enterprise Balanced Fund (Class A) 12/31/99
- --------------------------------------------------------------------------------------- ---------------
<S> <C>
Net Asset Value Beginning of Period $ 5.00
--------
Net Investment Income (Loss) 0.03(F)
Net Realized and Unrealized Gain (Loss) on Investments 0.34
--------
Total from Investment Operations 0.37
--------
Dividends from Net Investment Income (0.02)
Distributions from Capital Gains --
--------
Total Distributions (0.02)
--------
Net Asset Value End of Period $ 5.35
========
Total Return(C) 7.53%(B)
Net Assets End of Period (in thousands) $ 4,946
Ratio of Expenses to Average Net Assets 1.40%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 4.79%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 1.33%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) (2.05)%(A)
Portfolio Turnover Rate 20%
<CAPTION>
For the Period
7/1/99 through
Enterprise Balanced Fund (Class B) 12/31/99
- --------------------------------------------------------------------------------------- ---------------
<S> <C>
Net Asset Value Beginning of Period $ 5.00
--------
Net Investment Income (Loss) 0.02(F)
Net Realized and Unrealized Gain (Loss) on Investments 0.35
--------
Total from Investment Operations 0.37
--------
Dividends from Net Investment Income (0.02)
Distributions from Capital Gains --
--------
Total Distributions (0.02)
--------
Net Asset Value End of Period $ 5.35
========
Total Return(D) 7.36%(B)
Net Assets End of Period (in thousands) $ 4,409
Ratio of Expenses to Average Net Assets 1.95%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 4.87%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 0.79%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) (2.12)%(A)
Portfolio Turnover Rate 20%
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
122
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights -- (Continued)
ENTERPRISE BALANCED FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Period
7/1/99 through
Enterprise Balanced Fund (Class C) 12/31/99
- --------------------------------------------------------------------------------------- ---------------
<S> <C>
Net Asset Value Beginning of Period $ 5.00
--------
Net Investment Income (Loss) 0.02(F)
Net Realized and Unrealized Gain (Loss) on Investments 0.34
--------
Total from Investment Operations 0.36
--------
Dividends from Net Investment Income (0.01)
Distributions from Capital Gains --
--------
Total Distributions (0.01)
--------
Net Asset Value End of Period $ 5.35
========
Total Return(D) 7.32%(B)
Net Assets End of Period (in thousands) $ 701
Ratio of Expenses to Average Net Assets 1.95%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 5.33%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 0.78%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) (2.60)%(A)
Portfolio Turnover Rate 20%
<CAPTION>
For the Period
7/1/99 through
Enterprise Balanced Fund (Class Y) 12/31/99
- --------------------------------------------------------------------------------------- ---------------
<S> <C>
Net Asset Value Beginning of Period $ 5.00
--------
Net Investment Income (Loss) 0.05(F)
Net Realized and Unrealized Gain (Loss) on Investments 0.34
--------
Total from Investment Operations 0.39
--------
Dividends from Net Investment Income (0.03)
Distributions from Capital Gains --
--------
Total Distributions (0.03)
--------
Net Asset Value End of Period $ 5.36
========
Total Return 7.91%(B)
Net Assets End of Period (in thousands) $ 109
Ratio of Expenses to Average Net Assets 0.95%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 6.06%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 1.74%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) (3.36)%(A)
Portfolio Turnover Rate 20%
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
123
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
ENTERPRISE HIGH-YIELD BOND FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------
Enterprise High-Yield Bond Fund (Class A) 1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 11.53 $ 12.35 $ 11.84 $ 11.39 $ 10.72
------- ------- ------- ------- -------
Net Investment Income (Loss) 0.94(F) 0.94 0.99 0.94 0.99
Net Realized and Unrealized Gain (Loss) on Investments ( 0.53) ( 0.66) 0.51 0.45 0.67
------- ------- ------- ------- -------
Total from Investment Operations 0.41 0.28 1.50 1.39 1.66
------- ------- ------- ------- -------
Dividends from Net Investment Income ( 0.94) ( 0.94) ( 0.99) ( 0.94) ( 0.99)
Distributions from Capital Gains ( 0.01) ( 0.16) -- -- --
------- ------- ------- ------- -------
Total Distributions ( 0.95) ( 1.10) ( 0.99) ( 0.94) ( 0.99)
------- ------- ------- ------- -------
Net Asset Value End of Period $ 10.99 $ 11.53 $ 12.35 $ 11.84 $ 11.39
======= ======= ======= ======= =======
Total Return(C) 3.64% 2.29% 13.18% 12.78% 16.00%
Net Assets End of Period (in thousands) $64,038 $72,637 $66,422 $54,129 $52,182
Ratio of Expenses to Average Net Assets 1.30% 1.30% 1.30% 1.30% 1.30%
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 1.41% 1.44% 1.47% 1.50% 1.52%
Ratio of Net Investment Income (Loss) to Average Net Assets 8.30% 7.72% 8.20% 8.21% 8.80%
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding
Reimbursement) 8.18% 7.58% 8.03% 8.01% 8.58%
Portfolio Turnover Rate 84% 114% 175% 180% 89%
<CAPTION>
Year Ended December 31, For the Period
----------------------------------------------- 5/1/95
Enterprise High-Yield Bond Fund (Class B) 1999 1998 1997 1996 through 12/31/95
- ------------------------------------------------------------------ ----------- ----------- ----------- ----------- -----------------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 11.52 $ 12.35 $ 11.84 $ 11.39 $ 11.11
------- ------- ------- ------- --------
Net Investment Income (Loss) 0.88(F) 0.87 0.77 0.88 0.61
Net Realized and Unrealized Gain (Loss) on Investments ( 0.52) ( 0.67) 0.51 0.45 0.28
------- ------- ------- ------- --------
Total from Investment Operations 0.36 0.20 1.28 1.33 0.89
------- ------- ------- ------- --------
Dividends from Net Investment Income ( 0.88) ( 0.87) ( 0.77) ( 0.88) ( 0.61)
Distributions from Capital Gains ( 0.01) ( 0.16) -- -- --
------- ------- ------- -------- --------
Total Distributions ( 0.89) ( 1.03) ( 0.77) ( 0.88) ( 0.61)
------- ------- ------- -------- --------
Net Asset Value End of Period $ 10.99 $ 11.52 $ 12.35 $ 11.84 $ 11.39
======= ======= ======= ======== ========
Total Return(D) 3.18% 1.64% 12.59% 12.16% 8.12%(B)
Net Assets End of Period (in thousands) $36,673 $35,495 $19,898 $ 7,892 $ 2,951
Ratio of Expenses to Average Net Assets 1.85% 1.85% 1.85% 1.85% 1.85%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 1.96% 1.99% 2.02% 2.05% 2.09%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 7.75% 7.20% 7.51% 7.74% 7.84%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Reimbursement) 7.64% 7.06% 7.35% 7.55% 7.68%(A)
Portfolio Turnover Rate 84% 114% 175% 180% 89%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
124
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- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights -- (Continued)
ENTERPRISE HIGH-YIELD BOND FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31, For the Period
----------------------- 5/1/97
Enterprise High-Yield Bond Fund (Class C) 1999 1998 through 12/31/97
- --------------------------------------------------------------------------------------- ----------- ----------- -----------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 11.53 $ 12.35 $ 11.71
------- ------- -------
Net Investment Income (Loss) 0.88(F) 0.87 0.61
Net Realized and Unrealized Gain (Loss) on Investments ( 0.53) ( 0.66) 0.64
-------- -------- -------
Total from Investment Operations 0.35 0.21 1.25
-------- -------- -------
Dividends from Net Investment Income ( 0.88) ( 0.87) ( 0.61)
Distributions from Capital Gains ( 0.01) ( 0.16) --
-------- -------- -------
Total Distributions ( 0.89) ( 1.03) ( 0.61)
-------- -------- -------
Net Asset Value End of Period $ 10.99 $ 11.53 $ 12.35
======== ======== =======
Total Return(D) 3.09% 1.72% 10.87%(B)
Net Assets End of Period (in thousands) $ 6,841 $ 5,392 $ 1,463
Ratio of Expenses to Average Net Assets 1.85% 1.85% 1.85%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 1.96% 1.99% 2.01%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 7.73% 7.27% 6.84%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) 7.62% 7.13% 6.68%(A)
Portfolio Turnover Rate 84% 114% 175%(A)
<CAPTION>
Year Ended December 31, For the Period
----------------------- 7/25/97
Enterprise High-Yield Bond Fund (Class Y) 1999 1998 through 12/31/97
- --------------------------------------------------------------------------------------- ----------- ----------- -----------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 11.51 $ 12.35 $ 12.17
------- ------- -------
Net Investment Income (Loss) 0.99(F) 0.99 0.67
Net Realized and Unrealized Gain (Loss) on Investments ( 0.51) ( 0.68) 0.18
-------- -------- -------
Total from Investment Operations 0.48 0.31 0.85
-------- -------- -------
Dividends from Net Investment Income ( 0.99) ( 0.99) ( 0.67)
Distributions from Capital Gains ( 0.01) ( 0.16) --
-------- -------- -------
Total Distributions ( 1.00) ( 1.15) ( 0.67)
-------- -------- -------
Net Asset Value End of Period $ 10.99 $ 11.51 $ 12.35
======== ======== =======
Total Return 4.30% 2.49% 5.24%(B)
Net Assets End of Period (in thousands) $ 1,179 $ 2,032 $ 809
Ratio of Expenses to Average Net Assets 0.85% 0.85% 0.85%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 0.96% 1.00% 1.02%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 8.73% 8.30% 8.26%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) 8.62% 8.16% 8.09%(A)
Portfolio Turnover Rate 84% 114% 175%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
125
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- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
ENTERPRISE GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------------------------
Enterprise Government Securities Fund (Class A) 1999 1998 1997 1996 1995
- --------------------------------------------------------------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 12.15 $ 12.03 $ 11.80 $ 11.83 $ 10.62
------- ------- ------- ------- -------
Net Investment Income (Loss) 0.65(F) 0.68 0.73 0.74 0.76
Net Realized and Unrealized Gain (Loss) on Investments ( 0.58) 0.12 0.23 ( 0.03) 1.21
------- ------- ------- ------- -------
Total from Investment Operations 0.07 0.80 0.96 0.71 1.97
------- ------- ------- ------- -------
Dividends from Net Investment Income ( 0.65) ( 0.68) ( 0.73) ( 0.74) ( 0.76)
Distributions from Capital Gains -- -- -- -- --
------- ------- ------- ------- -------
Total Distributions ( 0.65) ( 0.68) ( 0.73) ( 0.74) ( 0.76)
------- ------- ------- ------- -------
Net Asset Value End of Period $ 11.57 $ 12.15 $ 12.03 $ 11.80 $ 11.83
======= ======= ======= ======= =======
Total Return(C) 0.58% 6.82% 8.39% 6.29% 19.00%
Net Assets End of Period (in thousands) $73,706 $71,609 $68,639 $73,693 $86,224
Ratio of Expenses to Average Net Assets 1.30% 1.30% 1.30% 1.30% 1.30%
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 1.39% 1.38% 1.46% 1.42% 1.44%
Ratio of Net Investment Income (Loss) to Average Net Assets 5.46% 5.61% 6.16% 6.35% 6.66%
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding
Reimbursement) 5.37% 5.53% 6.00% 6.23% 6.52%
Portfolio Turnover Rate 11% 8% 10% 0% 0%
<CAPTION>
Year Ended December 31,
-----------------------------------------------
Enterprise Government Securities Fund (Class B) 1999 1998 1997 1996
- ----------------------------------------------------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 12.14 $ 12.02 $ 11.79 $ 11.83
------- ------- ------- -------
Net Investment Income (Loss) 0.58F 0.61 0.66 0.68
Net Realized and Unrealized Gain (Loss) on Investments ( 0.57) 0.12 0.23 ( 0.04)
------- ------- ------- --------
Total from Investment Operations 0.01 0.73 0.89 0.64
------- ------- ------- --------
Dividends from Net Investment Income ( 0.58) ( 0.61) ( 0.66) ( 0.68)
Distributions from Capital Gains -- -- -- --
------- ------- ------- --------
Total Distributions ( 0.58) ( 0.61) ( 0.66) ( 0.68)
------- ------- ------- --------
Net Asset Value End of Period $ 11.57 $ 12.14 $ 12.02 $ 11.79
======= ======= ======= ========
Total Return(D) 0.12% 6.24% 7.81% 5.61%
Net Assets End of Period (in thousands) $36,876 $27,134 $12,285 $ 5,683
Ratio of Expenses to Average Net Assets 1.85% 1.85% 1.85% 1.85%
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 1.95% 1.93% 2.01% 1.96%
Ratio of Net Investment Income (Loss) to Average Net Assets 4.92% 5.00% 5.55% 5.79%
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding
Reimbursement) 4.82% 4.91% 5.39% 5.68%
Portfolio Turnover Rate 11% 8% 10% 0%
<CAPTION>
For the Period
5/1/95
Enterprise Government Securities Fund (Class B) through 12/31/95
- ----------------------------------------------------------------------- -----------------
<S> <C>
Net Asset Value Beginning of Period $ 11.12
--------
Net Investment Income (Loss) 0.44
Net Realized and Unrealized Gain (Loss) on Investments 0.71
--------
Total from Investment Operations 1.15
--------
Dividends from Net Investment Income ( 0.44)
Distributions from Capital Gains --
--------
Total Distributions ( 0.44)
--------
Net Asset Value End of Period $ 11.83
========
Total Return(D) 10.47%(B)
Net Assets End of Period (in thousands) $ 2,124
Ratio of Expenses to Average Net Assets 1.85%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 1.91%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 5.64%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding
Reimbursement) 5.58%(A)
Portfolio Turnover Rate 0%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
126
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- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights -- (Continued)
ENTERPRISE GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31, For the Period
----------------------- 5/1/97
Enterprise Government Securities Fund (Class C) 1999 1998 through 12/31/97
- --------------------------------------------------------------------------------------- ----------- ----------- -----------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 12.14 $ 12.03 $ 11.63
------- ------- -------
Net Investment Income (Loss) 0.58(F) 0.62 0.46
Net Realized and Unrealized Gain (Loss) on Investments ( 0.57) 0.11 0.40
-------- ------- -------
Total from Investment Operations 0.01 0.73 0.86
-------- ------- -------
Dividends from Net Investment Income ( 0.58) ( 0.62) ( 0.46)
Distributions from Capital Gains -- -- --
-------- -------- -------
Total Distributions ( 0.58) ( 0.62) ( 0.46)
-------- -------- -------
Net Asset Value End of Period $ 11.57 $ 12.14 $ 12.03
======== ======== =======
Total Return(D) 0.12% 6.15% 7.49%(B)
Net Assets End of Period (in thousands) $ 5,516 $ 3,089 $ 498
Ratio of Expenses to Average Net Assets 1.85% 1.85% 1.85%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 1.95% 1.94% 2.03%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 4.92% 4.97% 5.39%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) 4.82% 4.88% 5.21%(A)
Portfolio Turnover Rate 11% 8% 10%(A)
<CAPTION>
Year Ended December 31, For the Period
----------------------- 7/17/97
Enterprise Government Securities Fund (Class Y) 1999 1998 through 12/31/97
- --------------------------------------------------------------------------------------- ----------- ----------- -----------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 12.14 $ 12.02 $ 11.87
------- ------- -------
Net Investment Income (Loss) 0.70(F) 0.74 0.35
Net Realized and Unrealized Gain (Loss) on Investments ( 0.58) 0.12 0.15
-------- ------- -------
Total from Investment Operations 0.12 0.86 0.50
-------- ------- -------
Dividends from Net Investment Income ( 0.70) ( 0.74) ( 0.35)
Distributions from Capital Gains -- -- --
-------- -------- -------
Total Distributions ( 0.70) ( 0.74) ( 0.35)
-------- -------- -------
Net Asset Value End of Period $ 11.56 $ 12.14 $ 12.02
======== ======== =======
Total Return 1.04% 7.30% 4.02%(B)
Net Assets End of Period (in thousands) $ 6,212 $ 7,281 $ 7,569
Ratio of Expenses to Average Net Assets 0.85% 0.85% 0.85%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 0.94% 0.93% 1.02%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 5.92% 6.06% 6.40%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) 5.83% 5.98% 6.23%(A)
Portfolio Turnover Rate 11% 8% 10%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
127
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
ENTERPRISE TAX-EXEMPT INCOME FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------
Enterprise Tax-Exempt Income Fund (Class A) 1999 1998 1997 1996 1995
- ---------------------------------------------------------------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 13.84 $ 13.95 $ 13.83 $ 13.99 $ 12.80
------- ------- ------- ------- -------
Net Investment Income (Loss) 0.54(F) 0.60 0.63 0.64 0.65
Net Realized and Unrealized Gain (Loss) on Investments ( 0.92) 0.20 0.31 ( 0.16) 1.21
------- ------- ------- ------- -------
Total from Investment Operations ( 0.38) 0.80 0.94 0.48 1.86
------- ------- ------- ------- -------
Dividends from Net Investment Income ( 0.54) ( 0.60) ( 0.63) ( 0.64) ( 0.65)
Distributions from Capital Gains ( 0.10) ( 0.31) ( 0.19) -- ( 0.02)
------- ------- ------- ------- -------
Total Distributions ( 0.64) ( 0.91) ( 0.82) ( 0.64) ( 0.67)
------- ------- ------- ------- -------
Net Asset Value End of Period $ 12.82 $ 13.84 $ 13.95 $ 13.83 $ 13.99
======= ======= ======= ======= =======
Total Return(C) ( 2.76)% 5.92% 6.96% 3.53% 14.85%
Net Assets End of Period (in thousands) $21,703 $23,710 $23,695 $28,478 $33,626
Ratio of Expenses to Average Net Assets 1.10% 1.10% 1.22% 1.25% 1.25%
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 1.44% 1.40% 1.60% 1.41% 1.42%
Ratio of Net Investment Income (Loss) to Average Net Assets 4.05% 4.30% 4.50% 4.64% 4.82%
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding
Reimbursement) 3.71% 4.00% 4.12% 4.48% 4.65%
Portfolio Turnover Rate 110% 100% 1% 1% 1%
<CAPTION>
Year Ended December 31,
-----------------------------------------------
Enterprise Tax-Exempt Income Fund (Class B) 1999 1998 1997 1996
- ----------------------------------------------------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 13.84 $ 13.95 $ 13.83 $ 13.99
-------- ------- ------- -------
Net Investment Income (Loss) 0.47(F) 0.53 0.55 0.56
Net Realized and Unrealized Gain (Loss) on Investments ( 0.92) 0.20 0.31 ( 0.16)
-------- ------- ------- --------
Total from Investment Operations ( 0.45) 0.73 0.86 0.40
-------- ------- ------- --------
Dividends from Net Investment Income ( 0.47) ( 0.53) ( 0.55) ( 0.56)
Distributions from Capital Gains ( 0.10) ( 0.31) ( 0.19) --
-------- -------- -------- --------
Total Distributions ( 0.57) ( 0.84) ( 0.74) ( 0.56)
-------- -------- -------- --------
Net Asset Value End of Period $ 12.82 $ 13.84 $ 13.95 $ 13.83
======== ======== ======== ========
Total Return(D) ( 3.29)% 5.33% 6.36% 2.96%
Net Assets End of Period (in thousands) $ 5,640 $ 4,451 $ 2,883 $ 2,037
Ratio of Expenses to Average Net Assets 1.65% 1.65% 1.76% 1.80%
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 1.99% 1.96% 2.16% 1.96%
Ratio of Net Investment Income (Loss) to Average Net Assets 3.51% 3.71% 3.94% 4.07%
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding
Reimbursement) 3.16% 3.41% 3.54% 3.92%
Portfolio Turnover Rate 110% 100% 1% 1%
<CAPTION>
For the Period
5/1/95
Enterprise Tax-Exempt Income Fund (Class B) through 12/31/95
- ----------------------------------------------------------------------- -----------------
<S> <C>
Net Asset Value Beginning of Period $ 13.44
--------
Net Investment Income (Loss) 0.38
Net Realized and Unrealized Gain (Loss) on Investments 0.57
--------
Total from Investment Operations 0.95
--------
Dividends from Net Investment Income ( 0.38)
Distributions from Capital Gains ( 0.02)
--------
Total Distributions ( 0.40)
--------
Net Asset Value End of Period $ 13.99
========
Total Return(D) 7.18%(B)
Net Assets End of Period (in thousands) $ 912
Ratio of Expenses to Average Net Assets 1.80%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 1.98%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 4.08%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding
Reimbursement) 3.94%(A)
Portfolio Turnover Rate 1%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
128
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights -- (Continued)
ENTERPRISE TAX-EXEMPT INCOME FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31, For the Period
----------------------- 5/1/97
Enterprise Tax-Exempt Income Fund (Class C) 1999 1998 through 12/31/97
- --------------------------------------------------------------------------------------- ----------- ----------- -----------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 13.84 $ 13.95 $ 13.68
------- ------- -------
Net Investment Income (Loss) 0.47(F) 0.53 0.36
Net Realized and Unrealized Gain (Loss) on Investments ( 0.92) 0.20 0.46
------- ------- -------
Total from Investment Operations ( 0.45) 0.73 0.82
------- ------- -------
Dividends from Net Investment Income ( 0.47) ( 0.53) ( 0.36)
Distributions from Capital Gains ( 0.10) ( 0.31) ( 0.19)
------- -------- -------
Total Distributions ( 0.57) ( 0.84) ( 0.55)
------- -------- -------
Net Asset Value End of Period $ 12.82 $ 13.84 $ 13.95
======= ======== =======
Total Return(D) ( 3.23)% 5.34% 6.14%(B)
Net Assets End of Period (in thousands) $ 1,706 $ 777 $ 184
Ratio of Expenses to Average Net Assets 1.65% 1.65% 1.67%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 1.97% 1.93% 2.34%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 3.54% 3.71% 3.99%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) 3.22% 3.43% 3.32%(A)
Portfolio Turnover Rate 110% 100% 1%(A)
<CAPTION>
For the Period
Year Ended 11/17/98
Enterprise Tax-Exempt Income Fund (Class Y) December 31, 1999 through 12/31/98
- --------------------------------------------------------------------------------------- ------------------- -----------------
<S> <C> <C>
Net Asset Value Beginning of Period $ 13.84 $ 14.12
------- -------
Net Investment Income (Loss) 0.61(F) 0.07
Net Realized and Unrealized Gain (Loss) on Investments ( 0.92) 0.03
------- -------
Total from Investment Operations ( 0.31) 0.10
------- -------
Dividends from Net Investment Income ( 0.61) ( 0.07)
Distributions from Capital Gains ( 0.10) ( 0.31)
------- -------
Total Distributions ( 0.71) ( 0.38)
------- -------
Net Asset Value End of Period $ 12.82 $ 13.84
======= =======
Total Return ( 2.32)% 0.75%(B)
Net Assets End of Period (in thousands) $ 61 $ 65
Ratio of Expenses to Average Net Assets 0.65% 0.65%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 0.99% 0.95%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 4.51% 4.75%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) 4.18% 4.45%(A)
Portfolio Turnover Rate 110% 100%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
129
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
ENTERPRISE MONEY MARKET FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended December 31,
-----------------------------------------------------------
Enterprise Money Market Fund (Class A) 1999 1998 1997 1996 1995
- ----------------------------------------------------------------------- ------------ ------------ ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------ ------ -------
Net Investment Income (Loss) 0.05(F) 0.05 0.05 0.04 0.05
------- ------- ------ ------ -------
Total from Investment Operations 0.05 0.05 0.05 0.04 0.05
------- ------- ------ ------ -------
Dividends from Net Investment Income (0.05) (0.05) (0.05) (0.04) (0.05)
-------- -------- ------- ------- -------
Total Distributions (0.05) (0.05) (0.05) (0.04) (0.05)
-------- -------- ------- ------- -------
Net Asset Value End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======= ======= =======
Total Return 4.80% 5.04% 4.69% 4.51% 5.05%
Net Assets End of Period (in thousands) $204,403 $140,490 $68,466 $59,074 $40,325
Ratio of Expenses to Average Net Assets 0.59% 0.64% 1.00% 1.00% 1.00%
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 0.59% 0.64% 1.24% 1.18% 1.35%
Ratio of Net Investment Income (Loss) to Average Net Assets 4.74% 4.91% 4.59% 4.42% 4.92%
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding
Reimbursement) 4.74% 4.91% 4.35% 4.24% 4.57%
<CAPTION>
Year Ended December 31, For the Period
------------------------------------------------ 5/1/95
Enterprise Money Market Fund (Class B) 1999 1998 1997 1996 through 12/31/95
- ------------------------------------------------------------- ----------- ----------- ---------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ -------
Net Investment Income (Loss) 0.05(F) 0.05 0.04 0.04 0.03
------ ------ ------ ------ -------
Total from Investment Operations 0.05 0.05 0.04 0.04 0.03
------ ------ ------ ------ -------
Dividends from Net Investment Income (0.05) (0.05) (0.04) (0.04) (0.03)
------- ------- ------- ------- -------
Total Distributions (0.05) (0.05) (0.04) (0.04) (0.03)
------- ------- ------- ------- -------
Net Asset Value End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= =======
Total Return(D) 4.80% 5.04% 4.11% 3.94% 2.95%(B)
Net Assets End of Period (in thousands) $32,863 $10,147 $ 5,980 $ 1,344 $ 394
Ratio of Expenses to Average Net Assets 0.60% 0.64% 1.55% 1.55% 1.55%(A)
Ratio of Expenses to Average Net Assets (Excluding
Reimbursement) 0.60% 0.64% 1.79% 1.73% 1.88%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 4.86% 4.91% 4.09% 3.85% 4.23%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Reimbursement) 4.86% 4.91% 3.85% 3.68% 3.90%(A)
</TABLE>
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
130
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights -- (Continued)
ENTERPRISE MONEY MARKET FUND
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December
31, For the Period
--------------------- 5/1/97
Enterprise Money Market Fund (Class C) 1999 1998 through 12/31/97
- --------------------------------------------------------------------------------------- ---------- ---------- -----------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 1.00 $ 1.00 $ 1.00
------ ------ -------
Net Investment Income (Loss) 0.05(F) 0.05 0.02
------ ------ -------
Total from Investment Operations 0.05 0.05 0.02
------ ------ -------
Dividends from Net Investment Income (0.05) (0.05) (0.02)
------- ------- -------
Total Distributions (0.05) (0.05) (0.02)
------- ------- -------
Net Asset Value End of Period $ 1.00 $ 1.00 $ 1.00
======= ======= =======
Total Return(D) 4.80% 5.04% 2.86%(B)
Net Assets End of Period (in thousands) $ 7,296 $ 4,680 $ 1,021
Ratio of Expenses to Average Net Assets 0.59% 0.63% 1.55%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 0.59% 0.63% 1.85%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 4.76% 4.90% 4.15%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) 4.76% 4.90% 3.85%(A)
<CAPTION>
Year Ended December
31, For the Period
--------------------- 7/17/97
Enterprise Money Market Fund (Class Y) 1999 1998 through 12/31/97
- --------------------------------------------------------------------------------------- ---------- ---------- -----------------
<S> <C> <C> <C>
Net Asset Value Beginning of Period $ 1.00 $ 1.00 $ 1.00
------ ------ -------
Net Investment Income (Loss) 0.05(F) 0.05 0.02
------ ------ -------
Total from Investment Operations 0.05 0.05 0.02
------ ------ -------
Dividends from Net Investment Income (0.05) (0.05) (0.02)
------- ------- -------
Total Distributions (0.05) (0.05) (0.02)
------- ------- -------
Net Asset Value End of Period $ 1.00 $ 1.00 $ 1.00
======= ======= =======
Total Return 4.80% 5.04% 2.31%(B)
Net Assets End of Period (in thousands) $ 3,477 $ 3,413 $ 2,700
Ratio of Expenses to Average Net Assets 0.59% 0.65% 0.70%(A)
Ratio of Expenses to Average Net Assets (Excluding Reimbursement) 0.59% 0.65% 0.95%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets 4.72% 4.92% 4.96%(A)
Ratio of Net Investment Income (Loss) to Average Net Assets (Excluding Reimbursement) 4.72% 4.92% 4.71%(A)
</TABLE>
(A) Annualized.
(B) Not annualized.
(C) Total return does not include one time sales charge.
(D) Total return does not include contingent deferred sales charge.
(E) Effective September 1, 1995, ratio includes expenses paid indirectly.
(F) Based on average monthly shares outstanding for the period.
(G) Less than $0.01 per share.
See notes to financial statements.
THE ENTERPRISE Group of Funds, Inc.
131
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<PAGE>
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Notes to Financial Statements
December 31, 1999
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1. ORGANIZATION
The Enterprise Group of Funds, Inc. ("EGF") is registered under The Investment
Company Act of 1940 as an open-end management investment company and consists of
the Multi-Cap Growth, Small Company Growth, Small Company Value, Growth, Capital
Appreciation, Equity, Growth and Income, Equity Income, International Growth,
Internet, Global Financial Services, Managed, Balanced, High-Yield Bond,
Government Securities, Tax-Exempt Income and Money Market Funds.
EGF offers Class A, B, C and Y shares. Shares of each class represent an
identical interest in the investments of their respective funds and generally
have the same rights, but are offered with different sales charge and
distribution fee arrangements. Class A shares (except for the Money Market Fund)
are subject to a maximum sales charge of 4.75 percent. Class B shares are
subject to a maximum contingent sales charge of 5 percent, which declines to
zero after six years and which is based on the lesser of net asset value at the
time of purchase or redemption. Class B shares automatically convert to Class A
shares of the same fund eight years after purchase. Class C shares are subject
to a maximum contingent sales charge of 1 percent, which declines to zero after
one year and which is based on the lesser of net asset value at the time of
purchase or redemption. Class Y shares are not subject to any sales charges.
2. SIGNIFICANT ACCOUNTING POLICIES
Valuation of Investments -- Except with respect to the Money Market Fund,
investment securities, other than debt securities, listed on either a national
or foreign securities exchange or traded in the over-the-counter National Market
System are valued each business day at the last reported 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 their 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. 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.
Short-term debt securities with 61 days or more to maturity at time of purchase
are valued at market value through the 61st day prior to maturity, based on
quotations received from market makers or other appropriate sources; thereafter,
any unrealized appreciation or depreciation existing on the 61st day is
amortized on a straight-line basis over the remaining number of days to
maturity. Short-term securities with 60 days or less to maturity at time of
purchase are valued at amortized cost, which approximates market value.
Securities held by the Money Market Fund are valued on an amortized cost basis.
Under the amortized cost method, a security is valued at its cost and any
discount or premium is amortized over the period until maturity without taking
into account the impact of fluctuating interest rates on the market value of the
security unless the aggregate deviation from net asset value as calculated by
using available market quotations exceeds 1/2 of 1 percent.
SPECIAL VALUATION RISKS -- Foreign denominated assets held by the International
Growth and Global Financial Services Funds may involve risks not typically
associated with domestic transactions including, but not limited to,
unanticipated movements in exchange rates, the degree of government supervision
and regulation of security markets and the possibility of political or economic
instability.
As part of its investment program, the Government Securities Fund invests in
collateralized mortgage obligations ("CMOs"). Payments of principal and interest
on the mortgages are passed through to the holders of the CMOs on the same
schedule as they are received, although certain classes of CMOs have priority
over others with respect to the receipt of prepayments on the mortgages.
Therefore, depending on the type of CMOs in which the Government Securities Fund
invests, the investment may be subject to a greater valuation risk due to
prepayment than other types of mortgage-related securities.
The high-yield securities in which the High-Yield Bond Fund may invest may be
considered speculative in regard to the issuer's continuing ability to meet
principal and interest payments. The value of the lower rated securities in
which the High-Yield Bond Fund may invest will be affected by the
creditworthiness of individual issuers, general
THE ENTERPRISE Group of Funds, Inc.
132
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<PAGE>
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Notes to Financial Statements -- (Continued)
December 31, 1999
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economic and specific industry conditions, and will fluctuate inversely with
changes in interest rates. In addition, the secondary trading market for lower
quality bonds may be less active and less liquid than the trading market for
higher quality bonds.
REPURCHASE AGREEMENTS -- Each fund may acquire securities subject to repurchase
agreements. Under a typical repurchase agreement, a fund would acquire a debt
security for a relatively short period (usually for one day and not more than
one week) subject to an obligation of the seller to repurchase and of the fund
to resell the debt security at an agreed-upon higher price, thereby establishing
a fixed investment return during the fund's holding period. Under each
repurchase agreement, the fund receives, as collateral, securities whose market
value is at least equal to the repurchase price.
WRITTEN OPTIONS -- When a fund writes an option, an amount equal to the premium
received by the fund is recorded as a liability and is subsequently adjusted to
the current market value of the option written. Premiums received from writing
options that expire unexercised are treated as realized gains from investments.
The difference between the premium and the amount paid on effecting a closing
purchase transaction is also treated as a realized gain. If the premium is less
than the amount paid for the closing purchase transaction, a realized loss is
recorded. If a call option is exercised, the premium is added to the proceeds
from the sale of the underlying security in determining whether the fund has
realized a gain or loss. The risk associated with writing call options is that
the Fund may forego the opportunity for a profit if the market value of the
underlying security increases and the option is exercised.
FUTURES CONTRACTS -- A futures contract is an agreement between two parties to
buy and sell a financial instrument at a set price on a future date. Upon
entering into such a contract, a fund is required to pledge to the broker an
amount of cash or securities equal to the minimum "initial margin" requirements
of the exchange. Pursuant to the contract, the fund agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in value of
the contract. Such receipts or payments are known as "variation margin" and are
recorded by the fund as unrealized appreciation or depreciation. When the
contract is closed the fund records a realized gain or loss equal to the
difference between the value of the contract at the time it was opened and the
value at the time it was closed.
As part of their investment program, the Funds may enter into futures contracts
(up to their prospectus defined limitations) to hedge against anticipated future
price and interest rate changes. Risks of entering into futures contracts
include: (1) the risk that the price of the futures contracts may not move in
the same direction as the price of the securities in the various markets; (2)
the risk that there will be no liquid secondary market when the fund attempts to
enter into a closing position, (3) the risk that the fund will lose an amount in
excess of the initial margin deposit; and (4) the fact that the success or
failure of these transactions for the Fund depends on the ability of the Fund
Manager to predict movements in stock, bond, and currency prices as well as
interest rates.
FOREIGN CURRENCY TRANSLATION -- Securities, other assets and liabilities of the
International Growth Fund and the Global Financial Services Fund whose values
are initially expressed in foreign currencies are translated to U.S. dollars at
the bid price of such currency against U.S. dollars last quoted by a major bank
on the valuation date. Dividend and interest income and certain expenses
denominated in foreign currencies are translated to U.S. dollars based on the
exchange rates in effect on the date the income is earned and the expense is
incurred; and exchange gains and losses are realized upon ultimate receipt or
disbursement. The International Growth Fund and the Global Financial Services
Fund do not isolate that portion of their realized and unrealized gains on
investments from changes in foreign exchange rates from fluctuations arising
from changes in the market prices of the investments.
FORWARD FOREIGN CURRENCY CONTRACTS -- As part of each funds investment program,
the International Growth Fund and the Global Financial Services Fund utilize
forward currency exchange contracts to manage exposure to currency fluctuations
and hedge against adverse changes in connection with purchases and sales of
securities. The Funds will enter into forward contracts only for hedging
purposes. Risks arise from the possible inability of counterparties to meet the
terms of their contracts and from movements in currency values.
SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are
accounted for on the trade date. Realized gains and losses from security
transactions are determined on the basis of identified cost and realized gains
and losses from currency transactions are determined on the basis of average
cost. Dividend income received and distributions to shareholders are recognized
on the ex-dividend date, and interest income is recognized on the accrual basis.
Premiums and discounts on securities are amortized daily for both financial and
tax purposes.
THE ENTERPRISE Group of Funds, Inc.
133
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Notes to Financial Statements -- (Continued)
December 31, 1999
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EXPENSES -- Each fund and class bears expenses incurred specifically on its
behalf as well as a portion of the common expenses of EGF. No class has
preferential dividend rights; differences in per share dividend rates are
generally due to differences in separate class expenses.
FEDERAL INCOME TAXES -- No provision for Federal income or excise taxes is
required, because EGF intends to continue to qualify as a regulated investment
company and distribute all of its taxable income to shareholders.
USE OF ESTIMATES IN PREPARATION OF FINANCIAL STATEMENTS -- Preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that may affect the
reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
DIVIDENDS AND DISTRIBUTIONS -- Distributions of capital gains from each of the
Funds, other than the Money Market Fund, are made at least annually. Dividends
from investment income of the Equity Funds (except the Equity Income Fund) and
Managed Fund are declared and paid annually. Dividends from investment income on
the Equity Income Fund are paid semiannually. Dividends from investment income
for the Balanced Fund are paid quarterly. Dividends from investment income for
the Income Funds are declared daily and paid monthly. Dividends from investment
income and any net realized capital gains for the Money Market Fund are declared
daily and reinvested monthly in additional shares of the Money Market Fund at
net asset value.
3. TRANSACTIONS WITH AFFILIATES
The funds are charged management fees by Enterprise Capital Management, Inc.
("ECM") for furnishing management and administrative services. ECM has
contractually agreed to limit the funds' expenses through May 1, 2000, to the
expense ratios noted below. Enterprise Fund Distributors, Inc. ("EFD"), a
wholly-owned subsidiary of ECM, serves as principal underwriter for shares of
EGF. The Directors of EGF have adopted a Distributor's Agreement and Plan of
Distribution (the "Plan") pursuant to rule 12b-1 under the Investment Company
Act of 1940. The Plan provides that each fund will pay EFD a distribution fee,
accrued daily and payable monthly. The management fee, distribution fee, and
maximum expense amounts are equal to the following annual percentage of average
daily net assets for each class of shares:
<TABLE>
<CAPTION>
Management Fee Distribution Fee Maximum Expense Amount
---------------- --------------------------------------- -------------------------------------------
Fund A B C Y A B C Y
- --------------------------- ---------- ---------- ---------- ------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Multi-Cap Growth 1.00% 0.45% 1.00% 1.00% none 1.85% 2.40% 2.40% 1.40%
Small Company Growth 1.00% 0.45% 1.00% 1.00% none 1.85% 2.40% 2.40% 1.40%
Small Company Value 0.75% 0.45% 1.00% 1.00% none 1.75% 2.30% 2.30% 1.30%
Growth 0.75% 0.45% 1.00% 1.00% none 1.60% 2.15% 2.15% 1.15%
Capital Appreciation 0.75% 0.45% 1.00% 1.00% none 1.75% 2.30% 2.30% 1.30%
Equity 0.75% 0.45% 1.00% 1.00% none 1.60% 2.15% 2.15% 1.15%
Growth and Income 0.75% 0.45% 1.00% 1.00% none 1.50% 2.05% 2.05% 1.05%
Equity Income 0.75% 0.45% 1.00% 1.00% none 1.50% 2.05% 2.05% 1.05%
International Growth 0.85% 0.45% 1.00% 1.00% none 2.00% 2.55% 2.55% 1.55%
Internet 1.00% 0.45% 1.00% 1.00% none 1.90% 2.45% 2.45% 1.45%
Global Financial Services 0.85% 0.45% 1.00% 1.00% none 1.75% 2.30% 2.30% 1.30%
Managed 0.75% 0.45% 1.00% 1.00% none 1.75% 2.30% 2.30% 1.30%
Balanced 0.75% 0.45% 1.00% 1.00% none 1.40% 1.95% 1.95% 0.95%
High-Yield Bond 0.60% 0.45% 1.00% 1.00% none 1.30% 1.85% 1.85% 0.85%
Government Securities 0.60% 0.45% 1.00% 1.00% none 1.30% 1.85% 1.85% 0.85%
Tax-Exempt Income 0.50% 0.45% 1.00% 1.00% none 1.10% 1.65% 1.65% 0.65%
Money Market 0.35% none none none none 0.70% 0.70% 0.70% 0.70%
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
134
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<PAGE>
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Notes to Financial Statements -- (Continued)
December 31, 1999
- --------------------------------------------------------------------------------
ECM is a wholly-owned subsidiary of The MONY Life Insurance Company, which is
wholly-owned by The MONY Group Inc. The MONY Group Inc. and its subsidiaries and
affiliates had the following investments in EGF as of December 31, 1999:
<TABLE>
<CAPTION>
Fund A B C Y
- --------------------------- ------------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Multi-Cap Growth $1,923,600 $274,000 $274,000 $ 604,704
Small Company Growth -- -- -- 46,928
Small Company Value 239,245 -- -- 218,697
Growth 350,458 -- -- 13,873,494
Capital Appreciation 272,603 -- -- 264,627
Equity 1,474,579 -- -- 94,963
Growth and Income -- -- -- 71,622
Equity Income 873,626 -- -- 143,918
International Growth 3,687,180 -- -- 20,627,426
Internet 187,693 -- -- 1,237,922
Global Financial Services 22,988 -- -- 5,477,671
Managed 3,193,382 -- -- 68,823,767
Balanced 749,000 107,000 107,000 108,706
High-Yield Bond 95,291 -- -- 8,123
Government Securities 902,109 -- -- 1,887
Tax-Exempt Income -- -- 977 45,397
Money Market 732,656 -- -- 325,276
ECM has subadvisory agreements with various investment advisors as Fund Managers
for the funds of EGF. The management fee, as a percentage of average daily net
assets of a fund, is paid to ECM, which pays a portion of the fee to the Fund
Manager. 1740 Advisers, Inc., a wholly-owned subsidiary of The MONY Group Inc.,
is the Fund Manager for the Equity Income Fund. For the year ended December 31,
1999, ECM incurred subadvisory fees payable to 1740 Advisers, Inc. related to
the Equity Income Fund of $464,193, with a related payable balance of $39,132 as
of December 31, 1999.
The portion of sales charges paid to MONY Securities Corporation, a wholly-owned
subsidiary of The MONY Group Inc., was $18,591,559 for the year ended December
31, 1999. The portion of sales charges paid to EFD was $2,384,283 for the period
ended December 31, 1999.
EFD uses its distribution fee from EGF to pay expenses on behalf of EGF related
to the distribution and servicing of its shares. These expenses include a
service fee to securities dealers that enter into a sales agreement with EFD.
For the year ended December 31, 1999, EFD incurred service fees of $2,170,302
payable to MONY Securities Corporation.
For the year ended December 31, 1999, the Fund paid brokerage commissions to
affiliates as follows:
<CAPTION>
Fund Commissions
- ----------------------------- ------------
<S> <C>
Multi-Cap Growth $ 35,414
Small Company Value 326,540
Growth 9,840
Capital Appreciation 2,531
Equity Income 7,783
Internet 23,687
Global Financial Services 2,928
Managed 152,448
Balanced 95
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
135
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<PAGE>
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Notes to Financial Statements -- (Continued)
December 31, 1999
- --------------------------------------------------------------------------------
4. INVESTMENT TRANSACTIONS
For the year ended December 31, 1999, purchases and sales proceeds of
investments, other than short-term investments, were as follows:
<TABLE>
<CAPTION>
U.S. Government Other Investment
Obligations Securities
----------------------------- -------------------------------
Fund Purchases Sales Purchases Sales
- --------------------------- -------------- -------------- ---------------- --------------
<S> <C> <C> <C> <C>
Multi-Cap Growth -- -- $ 78,568,312 $ 12,496,171
Small Company Growth -- -- 26,068,485 20,593,056
Small Company Value -- -- 155,335,602 87,877,206
Growth -- -- 1,262,007,831 696,561,020
Capital Appreciation -- -- 274,365,351 271,476,492
Equity -- -- 33,078,964 30,005,309
Growth and Income -- -- 69,109,237 2,672,568
Equity Income -- -- 62,677,435 51,701,373
International Growth -- -- 99,297,326 101,269,058
Internet -- -- 170,453,956 28,426,234
Global Financial Services -- -- 10,672,812 2,013,814
Managed $60,448,320 $60,286,875 294,344,061 368,339,888
Balanced 2,799,925 413,372 7,222,516 777,483
High-Yield Bond 481,758 2,705,859 93,193,492 95,488,659
Government Securities 32,561,418 8,176,523 11,292,910 12,464,390
Tax-Exempt Income -- -- 33,477,092 31,168,410
Outstanding forward foreign currency contracts at December 31, 1999 are as
follows:
INTERNATIONAL GROWTH FUND
<CAPTION>
Sales Net Unrealized
Settlement -------------------------------------- Appreciation/
Date Receive Deliver (Depreciation)
- ------------ ------------------ ----------------- ---------------
<S> <C> <C> <C> <C> <C>
1/03/00 USD 80,220 EUR 79,521 $98
---
$98
===
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
136
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<PAGE>
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Notes to Financial Statements -- (Continued)
December 31, 1999
- --------------------------------------------------------------------------------
GLOBAL FINANCIAL SERVICES FUND
<TABLE>
<CAPTION>
Purchases Net Unrealized
Settlement --------------------------------------- Appreciation/
Date Receive Deliver (Depreciation)
- ------------ ------------------- ----------------- ---------------
<S> <C> <C> <C> <C> <C>
1/04/00 JPY 8,000,000 USD 78,201 $ 152
--------
Sales
---------------------------------------
Receive Deliver
------------------- ----------------
3/23/00 USD 143,528 AUD 225,000 (4,337)
3/23/00 USD 32,944 SGD 55,000 (274)
--------
(4,611)
--------
$ (4,459)
========
Transactions in call options written for the year ended December 31, 1999, were
as follows:
<CAPTION>
Number of Premiums
Contracts Received
----------- ------------
<S> <C> <C>
GROWTH AND INCOME FUND
Outstanding call options written at December 31, 1998 -- $ --
Options written 65 41,923
Options exercised (35) (21,699)
--- ---------
Outstanding call options written at December 31, 1999 30 $ 20,224
=== =========
6. BORROWINGS
In August 1999, EGF, and another affiliated mutual fund, entered into a $50
million redemption line of credit with State Street Bank and Trust Co. whereby
each Fund may borrow up to its prospectus defined limitation. At December 31,
1999, there were no loans outstanding. Listed below are the Funds which had
outstanding balances at any time during the year ended December 31, 1999:
<CAPTION>
Maximum Average Daily Weighted Average
Fund Amount Borrowed Outstanding Balance Interest Rate
- ---------------------- ----------------- --------------------- -----------------
<S> <C> <C> <C>
International Growth $1,880,000 $25,753 5.79%
Balanced 280,000 2,764 5.89%
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
137
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<PAGE>
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Notes to Financial Statements -- (Continued)
December 31, 1999
- --------------------------------------------------------------------------------
7. CAPITAL SHARE TRANSACTIONS
At December 31, 1999, each Fund has 8,000,000,000 authorized shares at $.10 par
value. The following tables summarize the capital share activity:
<TABLE>
<CAPTION>
Multi-Cap Growth Fund Small Company Growth Fund Small Company Value Fund
----------------------- ------------------------- ----------------------------------
For the Period Year Ended Year Ended Year Ended Year Ended
of 7/1/99 to Dec. 31, Dec. 31, Dec. 31, Dec. 31,
12/31/99 1999 1998 1999 1998
----------------------- ------------ ------------ ---------------- ---------------
<S> <C> <C> <C> <C> <C>
CLASS A
Shares sold 3,743,529 414,720 302,759 16,485,323 10,236,575
Reinvestment of distributions 45,721 -- -- 1,098,458 276,418
Shares redeemed (207,755) (207,992) (145,393) (11,810,385) (6,275,721)
Net increase (decrease) 3,581,495 206,728 157,366 5,773,396 4,237,272
CLASS B
Shares sold 2,994,506 380,608 379,909 5,140,797 6,411,836
Reinvestment of distributions 40,251 -- -- 841,748 217,426
Shares redeemed (125,978) (169,449) (105,961) (2,075,975) (1,516,761)
Net increase (decrease) 2,908,779 211,159 273,948 3,906,570 5,112,501
CLASS C
Shares sold 1,048,063 103,499 102,780 2,945,424 1,622,753
Reinvestment of distributions 12,907 -- -- 289,171 47,138
Shares redeemed (48,819) (73,035) (25,158) (863,222) (214,262)
Net increase (decrease) 1,012,151 30,464 77,622 2,371,373 1,455,629
CLASS Y
Shares sold 55,663 28,157 48,468 55,844 27,545
Reinvestment of distributions 404 -- -- 4,937 941
Shares redeemed (9,466) (153,968) (223,611) (24,194) (9,455)
Net increase (decrease) 46,601 (125,811) (175,143) 36,587 19,031
Total net increase (decrease) 7,549,026 322,540 333,793 12,087,926 10,824,433
<CAPTION>
Growth Fund Capital Appreciation Fund Equity Fund
--------------------------------- ------------------------------- --------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1999 1998 1999 1998 1999 1998
---------------- ---------------- --------------- --------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
Shares sold 37,894,541 25,016,660 2,925,321 913,983 533,352 672,134
Reinvestment of distributions 2,202,180 1,817,182 496,834 548,612 37,148 6,246
Shares redeemed (27,727,480) (12,643,429) (2,943,920) (1,224,998) (490,608) (173,058)
Net increase (decrease) 12,369,241 14,190,413 478,235 237,597 79,892 505,322
CLASS B
Shares sold 14,507,898 12,165,306 557,649 204,018 741,920 1,484,070
Reinvestment of distributions 1,523,703 1,012,396 113,247 64,334 64,727 6,611
Shares redeemed (3,633,294) (1,548,771) (162,851) (102,705) (569,548) (439,218)
Net increase (decrease) 12,398,307 11,628,931 508,045 165,647 237,099 1,051,463
CLASS C
Shares sold 7,025,356 5,180,277 167,180 23,429 216,111 223,366
Reinvestment of distributions 541,793 290,019 16,893 4,329 12,309 1,143
Shares redeemed (1,742,477) (666,966) (60,387) (4,125) (163,166) (38,398)
Net increase (decrease) 5,824,672 4,803,330 123,686 23,633 65,254 186,111
CLASS Y
Shares sold 1,393,412 1,619,933 5,107 5,239 13,859 8,786
Reinvestment of distributions 126,526 105,396 791 443 599 11
Shares redeemed (887,052) (1,513,470) (2,057) (434) (1,030) --
Net increase (decrease) 632,886 211,859 3,841 5,248 13,428 8,797
Total net increase (decrease) 31,225,106 30,834,533 1,113,807 432,125 395,673 1,751,693
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
138
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<PAGE>
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Notes to Financial Statements -- (Continued)
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Growth and Income Fund Equity Income Fund International Growth Fund
-------------------------- ------------------------- -----------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1999 1998 1999 1998 1999 1998
------------- ------------ ------------ ------------ --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
Shares sold 1,867,895 502,593 603,220 693,308 1,747,130 524,854
Reinvestment of distributions 281 6,225 183,831 338,394 215,231 22,822
Shares redeemed (737,784) (94,462) (871,866) (599,916) (1,829,143) (627,956)
Net increase (decrease) 1,130,392 414,356 (84,815) 431,786 133,218 (80,280)
CLASS B
Shares sold 1,419,461 682,522 635,419 609,848 390,802 714,287
Reinvestment of distributions 271 6,205 66,284 95,849 89,994 6,578
Shares redeemed (224,593) (60,729) (329,347) (161,207) (337,049) (458,613)
Net increase (decrease) 1,195,139 627,998 372,356 544,490 143,747 262,252
CLASS C
Shares sold 342,069 154,095 303,799 151,702 135,340 170,129
Reinvestment of distributions 51 1,314 13,871 16,076 20,162 1,342
Shares redeemed (144,613) (16,707) (186,365) (27,165) (97,232) (51,927)
Net increase (decrease) 197,507 138,702 131,305 140,613 58,270 119,544
CLASS Y
Shares sold 74,057 95,598 1,888 4,152 675,943 454,733
Reinvestment of distributions 62 8,894 79 35 82,195 10,505
Shares redeemed (262,781) (91,693) (568) -- (596,108) (414,104)
Net increase (decrease) (188,662) 12,799 1,399 4,187 162,030 51,134
Total net increase (decrease) 2,334,376 1,193,855 420,245 1,121,076 497,265 352,650
<CAPTION>
Internet Fund Global Financial Services Fund Managed Fund
---------------- ------------------------------ -------------------------------
For the Period
For the Period Year Ended of 10/1/98 Year Ended Year Ended
of 7/1/99 to Dec. 31, through Dec. 31, Dec. 31,
12/31/99 1999 12/31/98 1999 1998
---------------- ------------ --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
CLASS A
Shares sold 4,095,377 1,033,478 258,209 3,256,841 4,571,675
Reinvestment of distributions 36,343 23,992 -- 1,376,144 1,185,379
Shares redeemed (371,106) (364,764) (22,324) (7,593,627) (3,768,206)
Net increase (decrease) 3,760,614 692,706 235,885 (2,960,642) 1,988,848
CLASS B
Shares sold 3,725,767 847,428 201,950 2,969,971 6,850,169
Reinvestment of distributions 32,606 18,933 -- 1,373,221 1,041,656
Shares redeemed (372,516) (196,340) (32,303) (5,336,108) (2,264,094)
Net increase (decrease) 3,385,857 670,021 169,647 (992,916) 5,627,731
CLASS C
Shares sold 1,221,366 152,563 40,518 461,536 1,068,902
Reinvestment of distributions 9,595 3,194 -- 93,624 79,473
Shares redeemed (110,860) (62,720) (4,351) (724,909) (259,472)
Net increase (decrease) 1,120,101 93,037 36,167 (169,749) 888,903
CLASS Y
Shares sold 73,967 16,494 942,373 1,675,893 3,071,921
Reinvestment of distributions 314 31,864 -- 845,239 669,801
Shares redeemed (30,880) (9,990) -- (3,190,654) (2,830,113)
Net increase (decrease) 43,401 38,368 942,373 (669,522) 911,609
Total net increase (decrease) 8,309,973 1,494,132 1,384,072 (4,792,829) 9,417,091
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
139
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<PAGE>
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Notes to Financial Statements -- (Continued)
December 31, 1999
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<TABLE>
<CAPTION>
Balanced Fund High-Yield Bond Fund Government Securities Fund
---------------- ------------------------------- --------------------------------
For the Period Year Ended Year Ended Year Ended Year Ended
of 7/1/99 to Dec. 31, Dec. 31, Dec. 31, Dec. 31,
12/31/99 1999 1998 1999 1998
---------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
CLASS A
Shares sold 956,176 1,504,768 2,158,147 4,404,258 1,824,936
Reinvestment of distributions 3,153 399,065 434,025 271,155 247,336
Shares redeemed (34,672) (2,377,293) (1,669,074) (4,201,338) (1,883,753)
Net increase (decrease) 924,657 (473,460) 923,098 474,075 188,519
CLASS B
Shares sold 864,523 1,169,333 2,209,676 1,733,066 2,093,943
Reinvestment of distributions 2,120 196,528 166,249 112,198 62,371
Shares redeemed (41,908) (1,107,938) (907,108) (892,116) (942,532)
Net increase (decrease) 824,735 257,923 1,468,817 953,148 1,213,782
CLASS C
Shares sold 140,623 539,367 480,109 431,058 319,445
Reinvestment of distributions 278 34,450 24,727 17,583 6,516
Shares redeemed (9,873) (418,971) (155,499) (226,168) (112,968)
Net increase (decrease) 131,028 154,846 349,337 222,473 212,993
CLASS Y
Shares sold 20,279 24,934 105,449 55,429 81,282
Reinvestment of distributions 2 15,035 10,054 34,729 38,601
Shares redeemed -- (109,158) (4,531) (152,729) (149,732)
Net increase (decrease) 20,281 (69,189) 110,972 (62,571) (29,849)
Total net increase (decrease) 1,900,701 (129,880) 2,852,224 1,587,125 1,585,445
<CAPTION>
Tax-Exempt Income Fund Money Market Fund
---------------------------- -----------------------------------
Year Ended Year Ended Year Ended Year Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1999 1998 1999 1998
--------------- ------------ ----------------- -----------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold 937,406 339,169 902,291,310 413,364,732
Reinvestment of distributions 63,753 88,848 7,522,610 4,556,487
Shares redeemed (1,021,567) (414,098) (845,900,561) (345,896,926)
Net increase (decrease) (20,408) 13,919 63,913,359 72,024,293
CLASS B
Shares sold 249,210 178,013 63,366,742 32,792,113
Reinvestment of distributions 12,995 13,547 893,135 351,316
Shares redeemed (144,009) (76,656) (41,544,633) (28,976,415)
Net increase (decrease) 118,196 114,904 22,715,244 4,167,014
CLASS C
Shares sold 117,527 52,051 27,978,256 15,657,662
Reinvestment of distributions 3,992 2,052 284,855 112,867
Shares redeemed (44,618) (11,150) (25,647,018) (12,111,247)
Net increase (decrease) 76,901 42,953 2,616,093 3,659,282
CLASS Y
Shares sold 5 4,698 1,314,799 2,877,556
Reinvestment of distributions 65 29 148,465 131,097
Shares redeemed -- -- (1,398,749) (2,296,440)
Net increase (decrease) 70 4,727 64,515 712,213
Total net increase (decrease) 174,759 176,503 89,309,211 80,562,802
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
140
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<PAGE>
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Notes to Financial Statements -- (Continued)
December 31, 1999
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8. TAX BASIS UNREALIZED GAIN (LOSS) OF INVESTMENTS AND DISTRIBUTIONS
At December 31, 1999, the cost of securities for federal income tax purposes,
the aggregate gross unrealized gain for all securities for which there was an
excess of value over tax cost and the aggregate gross unrealized loss for all
securities for which there was an excess of tax cost over value were as follows:
<TABLE>
<CAPTION>
Tax Net
Unrealized Unrealized Unrealized
Fund Tax Cost Gain Loss Gain (Loss)
- --------------------------- ---------------- -------------- ---------------- --------------
<S> <C> <C> <C> <C>
Multi-Cap Growth $ 78,239,617 $ 27,011,214 $ (799,162) $ 26,212,052
Small Company Growth 34,821,078 17,812,118 (1,021,933) 16,790,185
Small Company Value 254,264,353 42,978,309 (27,499,332) 15,478,977
Growth 1,851,144,259 658,611,257 (52,241,129) 606,370,128
Capital Appreciation 171,181,049 57,192,479 (1,759,791) 55,432,688
Equity 19,163,924 3,203,452 (496,017) 2,707,435
Growth and Income 125,473,453 53,044,011 (7,846,674) 45,197,337
Equity Income 131,386,673 38,823,682 (4,563,897) 34,259,785
International Growth 74,818,072 31,639,457 (2,402,247) 29,237,210
Internet 175,919,131 88,259,439 (2,907,899) 85,351,540
Global Financial Services 16,706,370 1,325,658 (1,638,506) (312,848)
Managed 349,898,577 47,772,298 (15,807,417) 31,964,881
Balanced 10,008,746 710,116 (245,261) 464,855
High-Yield Bond 113,382,481 1,343,270 (7,990,307) (6,647,037)
Government Securities 126,697,672 11,876 (5,006,141) (4,994,265)
Tax-Exempt Income 28,557,437 301,530 (943,600) (642,070)
Income and capital gain distributions are determined in accordance with federal
income tax regulations, which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
futures and options transactions, foreign currency transactions, paydowns,
market discounts, losses deferred due to wash sales, investments in passive
foreign investment companies, and excise tax regulations.
Permanent book and tax basis differences relating to shareholder distributions
will result in reclassifications to paid in capital. These reclassifications
have no effect on net assets or net asset values per share. Any taxable gain
remaining at fiscal year end is distributed in the following year.
At December 31, 1999, the following Funds had net capital loss carryforwards for
federal tax purposes of:
<CAPTION>
Expiring
Fund Balance Through
- ------------------------- ------------ ---------
<S> <C> <C>
Growth and Income $ 821,073 2007
High-Yield Bond 3,117,222 2007
Government Securities 3,844,247 2004
Money Market 14,661 2007
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
141
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<PAGE>
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Notes to Financial Statements -- (Continued)
December 31, 1999
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9. POST OCTOBER LOSS DEFERRAL
Under the current tax law, capital and currency losses realized after October
31, 1999 may be deferred and treated as occurring on the first day of the
following fiscal year. For fiscal year ended December 31, 1999, the following
Funds elected to defer capital losses occurring between November 1, 1999 and
December 31, 1999 in the following amounts:
<TABLE>
<CAPTION>
Fund Balance
- --------------------- ----------
<S> <C>
Multi-Cap Growth $ 91,795
Growth and Income 62,831
High-Yield Bond 654,484
Tax-Exempt Income 63,279
10. RESTRICTED SECURITIES
Certain of the Small Company Value Fund's investments are restricted as to
resale. The table below shows the number of units held, the acquisition dates,
aggregate cost, per unit value and the percentage of net assets which these
securities comprise.
<CAPTION>
Number of Acquisition Value Percent of
Security Units Dates Cost Per Unit Net Assets
- ------------------------- ----------- ------------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Noel Group Units 15,000 04/13/99 $ 7,320 $ 0.40 0.00%
Noel Group Liquidating
Trust Units 15,000 10/08/99 $12,187 $ 0.70 0.01%
</TABLE>
The Fund may incur certain costs in connection with disposition of the above
securities.
THE ENTERPRISE Group of Funds, Inc.
142
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<PAGE>
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FEDERAL TAX INFORMATION (UNAUDITED)
The Tax-Exempt Income Fund has designated 100 percent of the net investment
income distributions paid monthly by each class of the Fund during its taxable
year ended December 31, 1999 as tax-exempt interest dividends for Federal income
tax purposes. Additionally, the following summarizes the per share taxable
short-term (considered ordinary income for federal income tax purposes) and
long-term capital gain distributions paid by each class of the Tax-Exempt Income
Fund during 1999:
<TABLE>
<CAPTION>
Record Payable Ordinary Long-Term
Date Date Income Capital Gains
- ------------ ---------- ------------ --------------
<S> <C> <C> <C>
09/29/99 09/30/99 $ 0.0197 $ 0.0295
12/20/99 12/21/99 $ -- $ 0.0535
The capital gains distributions paid to shareholders for 1999, whether taken in
additional shares or cash, is as follows:
<CAPTION>
Fund Capital Gains
- ----------------------------------- --------------
<S> <C>
Multi-Cap Growth $ --
Small Company Growth --
Small Company Value 13,023,810
Growth 108,150,263
Capital Appreciation 28,888,356
Equity 274,927
Growth and Income --
Equity Income 6,519,327
International Growth 8,575,052
Internet --
Global Financial Services 27,807
Managed 31,831,645
Balanced --
High-Yield Bond 57,177
Government Securities --
Tax-Exempt Income 184,939
Money Market --
The information below summarizes those funds which had the following portions of
their 1999 ordinary income distributions (located in Box #1 of Form 1099-DIV)
qualify as being eligible for the corporate dividends received deduction:
<CAPTION>
<S> <C>
Equity Income 85%
Managed 52%
Balanced 15%
Global Financial Services 15%
</TABLE>
THE ENTERPRISE Group of Funds, Inc.
143
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<PAGE>
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Report of Independent Accountants
To the Shareholders and Board of Directors of
The Enterprise Group of Funds, Inc.:
In our opinion, the accompanying statements of assets and liabilities,
including the portfolios of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of the Multi-Cap
Growth, Small Company Growth, Small Company Value, Growth, Capital
Appreciation, Equity, Growth and Income, Equity Income, International Growth,
Internet, Global Financial Services, Managed, Balanced, High-Yield Bond,
Government Securities, Tax-Exempt Income and Money Market Funds (constituting
The Enterprise Group of Funds, Inc., hereafter referred to as the "Fund") at
December 31, 1999, the results of their operations, the changes in their net
assets and the financial highlights for each of the periods indicated (except
for the financial highlights, as indicated below, which were audited by other
auditors) in conformity with accounting principles generally accepted in the
United States. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted in the
United States, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at December 31, 1999 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above. The financial highlights for each of the two years
in the period ended September 30, 1996 for the Small Company Growth and Growth
and Income Funds of The Enterprise Group of Funds, Inc. were audited by other
auditors whose report dated November 15, 1996, expressed an unqualified opinion
thereon.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
February 18, 2000
THE ENTERPRISE Group of Funds, Inc.
144
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<PAGE>
DIRECTORS AND OFFICERS
DIRECTORS
Victor Ugolyn
Chairman and Director
Arthur T. Dietz Arthur Howell
Director Director
William A. Mitchell, Jr. Lonnie H. Pope
Director Director
Samuel J. Foti Michael I. Roth
Director Director
OFFICERS
Victor Ugolyn
President and Chief Executive Officer
Phillip G. Goff
Vice President
Herbert M. Williamson Catherine R. McClellan
Treasurer and Secretary
Assistant Secretary
<PAGE>
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Investment Advisor
Enterprise Capital Management, Inc.
Atlanta Financial Center
3343 Peachtree Road, N.E.
Suite 450
Atlanta, GA 30326-1022
Distributor
Enterprise Fund Distributors, Inc.
Atlanta Financial Center
3343 Peachtree Road, N.E.
Suite 450
Atlanta, GA 30326-1022
Telephone: 1-800-432-4320
Custodian
State Street Bank and Trust Company
Boston, MA
Transfer Agent
National Financial Data Services, Inc.
330 W. 9th Street
Kansas City, MO 64105
Telephone: 1-800-368-3527
Independent Accountants
PricewaterhouseCoopers LLP
Philadelphia, PA
Member-Investment Company Institute
[GRAPHIC] ENTERPRISE
GROUP OF FUNDS
INVEST WITH THE PROS THE PROFESSIONALS USE(R)
1-800-432-4320
www.enterprisefunds.com
This report is not to be used in connection with
the offering of shares of the funds unless accompanied or
preceded by an effective prospectus.
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