<PAGE> 1
ENTERPRISE ACCUMULATION TRUST
GROWTH PORTFOLIO
MONTAG & CALDWELL, INC.
ATLANTA, GEORGIA
Investment Management
Montag & Caldwell manages approximately $31 billion for institutional
clients, and its normal investment minimum is $40 million.
Investment Objective
The objective of the Enterprise Growth Portfolio is to seek capital
appreciation.
Investment Strategies
The Growth Portfolio invests primarily in U.S. common stocks. The "Growth
at a Reasonable Price" strategy employed by the Portfolio combines growth and
value style investing. This means that the Portfolio 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 Portfolio's equity selection
process is generally lower risk than a typical growth stock approach. Valuation
is the key selection criterion which 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.
First Half 1999 Performance Review
After a strong gain in the first quarter of 1999, the Portfolio experienced
a moderate increase in value during the second quarter. During the first half of
the year, weakness in the shares of global consumer growth companies and
pharmaceutical holdings offset continued strength in technology positions.
Specifically, Coca-Cola, Gillette, and McDonald's struggled as improving
economic conditions in emerging markets have yet to translate into increased
demand for consumer goods. Montag took advantage of price weakness during this
time to add to the Portfolio's positions in Coca-Cola, Gillette, and Proctor &
Gamble. Investor enthusiasm for cyclical sectors, growing concerns over
potential legislative action to regulate drug prices, and a general rotation out
of the healthcare sector resulted in lower share prices for many attractive
companies. In response to this price movement, Montag added to their position in
Pfizer. With regard to technology holdings, improving sales and order trends
translated into significant price appreciation for the shares of
Hewlett-Packard, Solectron, and Tellabs.
Future Investment Strategy
The U.S. economy continues its march towards establishing a record for the
longest expansion in its history. Only the 106-month expansion of the 1960s is
longer in duration, and each day of growth after January 16, 2000, will mean new
records of achievement in U.S. economic history. While the U.S. economy's
fundamentals continue to be good, higher bond yields may offset the positive
effect on share prices of greater-than-forecasted corporate profits. Because the
major stock market indices are already at record valuation levels and investor
enthusiasm is quite high, the increase in bond yields, along with rising
short-term interest rates, temper our outlook for the second half of 1999. Also,
investors may become anxious as we head into the year 2000 ("Y2K"), creating
additional market volatility as the economy is moderately impacted by a build-up
and then draw-down of inventories around the turn of the century. Given these
developing trends, Montag believes it is appropriate to maintain some buying
reserves in the Portfolio. This will increase Montag's flexibility to navigate
better in more uncertain periods ahead and take advantage of attractive
opportunities.
Montag continues to favor the shares of consumer global growth companies,
well-positioned pharmaceutical and medical device companies and high-growth
technology enterprises that have staying power. While the Portfolio's consumer
global growth holdings were weak during the second quarter, Montag expects a
pick-up in earnings growth for these high-quality companies in the second half
of this year and solid earnings momentum thereafter. Research-driven
pharmaceutical companies may perform better in the period ahead as these stocks
offer an attractive combination of value and double-digit earnings growth
prospects. The outlook continues to be bright for the leading medical device
companies. Selected technology holdings remain attractive as global industry
conditions improve and the build-out of the Internet further stimulates product
demand.
The views expressed in this report reflect those of the Portfolio 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.
129
<PAGE> 2
ENTERPRISE ACCUMULATION TRUST
GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 86.69% PRINCIPAL AMOUNT VALUE
- ----------------------------------------------------------------------
<S> <C> <C>
BUSINESS SERVICES -- 1.63%
Interpublic Group of Companies
Inc. 21,800 $ 1,888,425
COMPUTER HARDWARE -- 9.41%
Cisco Systems Inc. (a) 25,200 1,625,400
EMC Corporation (a) 21,800 1,199,000
Hewlett-Packard Company 45,500 4,572,750
Intel Corporation 59,200 3,522,400
------------
10,919,550
COMPUTER SERVICES -- 4.87%
Electronic Data Systems
Corporation (New) 57,100 3,229,719
Solectron Corporation (a) 36,300 2,420,756
------------
5,650,475
COMPUTER SOFTWARE -- 5.82%
Electronic Arts Inc. (a) 35,400 1,920,450
Microsoft Corporation (a) 34,700 3,129,506
Oracle System Corporation (a) 45,800 1,700,325
------------
6,750,281
CONSUMER PRODUCTS -- 10.07%
Gillette Company 120,000 4,920,000
Newell Rubbermaid Inc. 34,200 1,590,300
Procter & Gamble Company 58,000 5,176,500
------------
11,686,800
ELECTRICAL EQUIPMENT -- 3.00%
General Electric Company 30,800 3,480,400
ENTERTAINMENT & LEISURE -- 3.51%
Carnival Corporation 35,200 1,707,200
Walt Disney Company 77,000 2,372,563
------------
4,079,763
FOOD & BEVERAGES &
TOBACCO -- 6.65%
Bestfoods 55,000 2,722,500
Coca-Cola Company 80,000 5,000,000
------------
7,722,500
HEALTH CARE -- 3.29%
Medtronic Inc. 49,000 3,815,875
HOTELS & RESTAURANTS -- 4.81%
Marriott International Inc.
(Class A) 60,000 2,242,500
McDonald's Corporation 81,000 3,346,313
------------
5,588,813
MEDICAL INSTRUMENTS -- 3.25%
Boston Scientific Corporation
(a) 85,800 3,769,838
MISC. FINANCIAL SERVICES -- 2.80%
American Express Company 25,000 3,253,125
MULTI-LINE INSURANCE -- 2.67%
American International Group
Inc. 26,500 3,102,156
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
PHARMACEUTICALS -- 15.54%
Bristol Myers Squibb Company 61,600 $ 4,338,950
Johnson & Johnson 50,700 4,968,600
Lilly (Eli) & Company 21,700 1,554,262
Merck & Company Inc. 22,800 1,687,200
Pfizer Inc. 50,000 5,487,500
------------
18,036,512
RETAIL -- 5.54%
Costco Companies Inc. (a) 13,500 1,080,844
Gap Inc. 55,050 2,773,143
Home Depot Inc. 40,000 2,577,500
------------
6,431,487
TELECOMMUNICATIONS -- 3.83%
MCI Worldcom Inc. (a) 26,300 2,263,444
Tellabs Inc. (a) 32,300 2,182,269
------------
4,445,713
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $96,160,075) 100,621,713
- ----------------------------------------------------------------------
COMMERCIAL PAPER -- 11.20%
- ----------------------------------------------------------------------
Ford Motor Credit Company
4.76% due 07/01/99 $6,000,000 6,000,000
Ford Motor Credit Company
5.26% due 07/06/99 7,000,000 6,994,886
------------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $12,994,886) 12,994,886
- ----------------------------------------------------------------------
REPURCHASE AGREEMENT -- 3.93%
- ----------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement, 4.25%
due 07/01/99
Collateral: U.S. Treasury Bond
$4,495,000, $7.125% due
02/29/00
Value $4,760,900 4,560,000 4,560,000
------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $4,560,000) 4,560,000
- ----------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $113,714,961) $118,176,599
OTHER ASSETS LESS LIABILITIES -- (1.82)% (2,112,024)
------------
NET ASSETS 100% $116,064,575
======================================================================
</TABLE>
(a) Non-income producing security.
See notes to financial statements.
130
<PAGE> 3
ENTERPRISE ACCUMULATION TRUST
GROWTH AND INCOME PORTFOLIO
RETIREMENT SYSTEM INVESTORS INC.
NEW YORK, NEW YORK
Investment Management
Retirement System Investors Inc. ("RSI") manages approximately $729 million
for all of its clients.
Investment Objective
The objective of the Enterprise Growth and Income Portfolio is a total
return through capital appreciation with income as a secondary consideration.
Investment Strategies
The Growth and Income Portfolio invests primarily in U.S. common stocks of
large capitalization companies. The Portfolio 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-terms developments. In selecting stocks for the Portfolio, the Portfolio
Manager employs a "value-oriented" strategy. This means that the Portfolio
Manager attempts to identify stocks of companies that have greater value than is
recognized by the market generally. The Portfolio 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 Portfolio Manager also considers current and projected
dividend yields. The Portfolio Manager compares this information to that of
other companies in determining relative value and dividend potential.
First Half 1999 Performance Review
For the six months ended June 30, 1999, the Portfolio's overweightings in
high performance groups such as technology, basic materials and capital goods
sectors and underweightings in sub-par groups such as consumer staples,
healthcare and utilities helped results. The standout performers were Safeguard
Scientifics (up 130 percent), Tiffany (up 86 percent), Nortel Networks (up 74
percent), Alcoa (up 67 percent). The biggest disappointments were Cadence Design
Systems, Philip Morris, Potash, Sterling Commerce, Lockheed Martin, Fannie Mae
and Washington Mutual.
Future Investment Strategy
RSI visualizes a pickup in earnings growth -- led by productivity gains,
improving profit margins and recovery in foreign economies -- in the latter half
of 1999 with the domestic economy continuing to grow at a satisfactory pace.
However, higher interest rates could constrain market valuations and upset the
economy, and Y2K liquidity concerns could raise volatility levels.
Regarding stock selection, RSI expects significant variances of individual
returns within sectors following the rotational shift out of a narrow group of
growth stocks into a broader group of economically sensitive and other value
stocks, which began in mid-April.
An important strategy for RSI is keeping to discipline, focusing on
relative value regardless of the sector. RSI will be opportunistic with respect
to seeking out bargains in both growth and value stocks consistent with the
current mix of existing holdings. This is within the context of expecting more
value stocks to surface as attractive assuming earnings growth accelerates.
Conversely, RSI will be more agnostic about growth issues, generally given the
risk that their valuations may become compressed by higher interest rates and
the emergence of more competitive earnings opportunities elsewhere.
The views expressed in this report reflect those of the Portfolio 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.
131
<PAGE> 4
ENTERPRISE ACCUMULATION TRUST
GROWTH AND INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 73.17% PRINCIPAL AMOUNT VALUE
- ----------------------------------------------------------------------
<S> <C> <C>
AEROSPACE -- 0.55%
AlliedSignal Inc. 2,600 $ 163,800
Lockheed Martin Corporation 250 9,313
-----------
173,113
BANKING -- 0.36%
Chase Manhattan Corporation 1,300 112,613
BROADCASTING -- 1.94%
Time Warner Inc. 8,270 607,845
BUILDING & CONSTRUCTION -- 4.58%
Armstrong World Industries Inc. 1,200 69,375
Martin Marietta Materials Inc. 6,825 402,675
Southdown Inc. 14,975 962,144
-----------
1,434,194
CHEMICALS -- 0.05%
Du Pont (E. I.) De Nemours &
Company 220 15,029
COMPUTER HARDWARE -- 9.54%
Cisco Systems Inc. (a) 360 23,220
Dallas Semiconductor Corporation 16,870 851,935
EMC Corporation (a) 4,500 247,500
IBM 8,760 1,132,230
Intel Corporation 100 5,950
Xerox Corporation 12,300 726,469
-----------
2,987,304
COMPUTER SERVICES -- 1.31%
Comverse Technology Inc. (a) 300 22,650
Safeguard Scientifics Inc. 6,000 372,000
Sun Microsystems Inc. (a) 220 15,152
-----------
409,802
COMPUTER SOFTWARE -- 4.12%
BMC Software Inc. (a) 12,750 688,500
Cadence Design Systems Inc. (a) 10,700 136,425
Sterling Commerce Inc. (a) 12,765 465,922
-----------
1,290,847
CONSUMER PRODUCTS -- 3.27%
Honeywell Inc. 4,500 521,438
Kimberly Clark Corporation 8,600 490,200
Mattel Inc. 492 13,007
-----------
1,024,645
CRUDE & PETROLEUM -- 3.66%
BP Amoco (ADR) 150 16,275
Mobil Corporation 2,850 282,150
Royal Dutch Petroleum (ADR) 1,045 62,961
Texaco Inc. 12,575 785,938
-----------
1,147,324
ELECTRICAL EQUIPMENT -- 3.30%
Emerson Electric Company 16,440 1,033,665
FINANCE -- 0.90%
Citigroup, Inc. 5,950 282,625
FOOD & BEVERAGES & TOBACCO -- 0.43%
Philip Morris Companies Inc. 3,340 134,226
LIFE INSURANCE -- 0.65%
American General Corporation 2,700 203,513
MACHINERY -- 3.70%
Ingersoll Rand Company 16,800 1,085,700
Snap-On Inc. 2,050 74,184
-----------
1,159,884
MANUFACTURING -- 0.47%
Milacron Inc. 8,000 148,000
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
METALS & MINING -- 2.68%
Alcoa Inc. 13,450 $ 832,218
Potash Corporation Saskatchewan
Inc. 125 6,469
-----------
838,687
MULTI-LINE INSURANCE -- 0.00%
American International Group Inc. 10 1,171
PROPERTY-CASUALTY
INSURANCE -- 0.65%
Allstate Corporation 5,700 204,487
PHARMACEUTICALS -- 5.03%
Bristol Myers Squibb Company 8,160 574,770
Elan Corporation (ADR) (a) 12,000 333,000
Johnson & Johnson 1,765 172,970
Merck & Company Inc. 6,370 471,380
Pfizer Inc. 220 24,145
-----------
1,576,265
RETAIL -- 8.60%
CVS Corporation 14,200 720,650
Federated Department Stores
Inc.(a) 8,300 439,381
Safeway Inc. (a) 30,500 1,509,750
Tiffany & Company 250 24,125
-----------
2,693,906
SAVINGS AND LOAN -- 7.37%
Federal National Mortgage
Association 19,800 1,353,825
Washington Mutual Inc. 26,950 953,356
-----------
2,307,181
TELECOMMUNICATIONS -- 7.00%
Lucent Technologies Inc. 430 28,998
Nortel Networks Corp 16,370 1,421,121
SBC Communications Inc. 12,795 742,110
-----------
2,192,229
TRANSPORTATION -- 3.01%
FDX Corporation (a) 17,350 941,237
-----------
TOTAL COMMON STOCKS
(IDENTIFIED COST $20,352,838) 22,919,792
- ----------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS -- 1.16%
MISC. FINANCIAL SERVICES -- 1.16%
Kmart Financing 6,200 362,700
-----------
TOTAL CONVERTIBLE PREFERRED STOCKS
(IDENTIFIED COST $359,672) 362,700
- ----------------------------------------------------------------------
COMMERCIAL PAPER -- 25.63%
- ----------------------------------------------------------------------
Alabama Power Company, 5.30% due
07/09/99 $1,500,000 1,498,233
General Electric Capital
Corporation, 5.08% due 07/07/99 1,000,000 999,153
Kansas City Power & Light
Company, 5.20% due 07/01/99 1,600,000 1,600,000
Lucent Technologies Inc., 5.00%
due 07/01/99 335,000 335,000
Mobil Corporation, 5.12% due
07/06/99 1,000,000 999,289
Orange & Rockland Utilities
Incorporated, 5.25% due
07/08/99 1,300,000 1,298,673
Potomac Electric Power Company,
5.30% due 07/07/99 1,300,000 1,298,852
-----------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $8,029,200) 8,029,200
- ----------------------------------------------------------------------
</TABLE>
132
<PAGE> 5
ENTERPRISE ACCUMULATION TRUST
GROWTH AND INCOME PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
REPURCHASE AGREEMENT -- 0.53%
- ----------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement, 4.25% due
07/01/99
Collateral: U.S. Treasury Bond,
$180,000, 3.625% due 04/15/28
Value $177,421 $ 165,000 $ 165,000
-----------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $165,000) 165,000
- ----------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $28,906,710) $31,476,692
OTHER ASSETS LESS LIABILITIES -- (0.49)% (153,241)
-----------
NET ASSETS 100% $31,323,451
======================================================================
</TABLE>
(a) Non-income producing security.
(ADR) American Depository Receipt.
See notes to financial statements.
133
<PAGE> 6
ENTERPRISE ACCUMULATION TRUST
EQUITY PORTFOLIO
OPCAP ADVISORS, INC.
NEW YORK, NEW YORK
Investment Management
OpCap Advisors, a wholly owned subsidiary of Oppenheimer Capital, has been
Portfolio Manager to the Equity Portfolio since inception. Oppenheimer Capital
manages approximately $60 billion for institutional clients, and its normal
investment minimum is $20 million.
Investment Objective
The objective of the Enterprise Equity Portfolio is long-term capital
appreciation.
Investment Strategies
The Equity Portfolio invests primarily in U.S. common stocks of companies
that meet the Portfolio Manager's criteria of high return on investment capital,
strong positions within their industries, sound financial fundamentals and
management committed to shareholder interests. The Portfolio Manager selects
companies with one or more of the following characteristics: substantial and
growing discretionary cash flow, strong shareholder value-oriented management,
valuable consumer or commercial franchises, high return on capital, favorable
price to intrinsic value, and undervalued assets. The Portfolio Manager also
imposes a strict sell discipline to sell the stock once it rises close to the
target price established by the Portfolio Manager.
First Half 1999 Performance Review
Value stocks came back to life in the first half of 1999. Value stocks
include those judged to be trading at market prices well below the inherent
value of the business, while growth stocks include those believed to have
excellent long-term earnings growth prospects. After an extended period in which
stock market gains were driven by a limited number of technology and large-cap
growth issues, market leadership broadened to include undervalued stocks with
strong business fundamentals of the type owned in the Portfolio.
Some of the holdings that contributed to the Portfolio's performance
included Computer Associates International, Inc., Rockwell International Corp,
AlliedSignal, Inc., Motorola, Inc. and Wells Fargo & Co.
OpCap continues to find quality stocks that meet strict value criteria.
Purchases of these included the common stocks of Cadence Design Systems, Inc.,
Chancellor Media Corp, Emerson Electric Company, Monsanto Company, News Corp.
Ltd., Raytheon Company, Walt Disney Company and Waste Management, Inc.
Portfolio sales included positions in AlliedSignal, Inc., Champion
International Corp., International Flavours & Fragrances, Inc. and Tenet
Healthcare Corp.
Future Investment Strategy
Despite their gains in the second quarter, the types of value stocks in
which OpCap invests continue to trade at a significant discount to large-cap
growth stocks and the market in general. OpCap believes this may bode well for
the Portfolio's value style in the months ahead.
OpCap continues to look for -- and find -- great companies with strong,
sustainable cash flows, high competitive barriers, and rational managements with
proven track records who are dedicated to shareholder value.
OpCap believes its long-term perspective and emphasis on buying superior
undervalued businesses provide a competitive advantage as the market moves away
from highly priced growth stocks toward a renewed recognition of the enduring
value of a company's earnings, cash flow and competitiveness.
The views expressed in this report reflect those of the Portfolio 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.
134
<PAGE> 7
ENTERPRISE ACCUMULATION TRUST
EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 93.36% PRINCIPAL AMOUNT VALUE
- ----------------------------------------------------------------------
<S> <C> <C>
ADVERTISING -- 2.29%
Omnicom Group Inc. 190,000 $ 15,200,000
AEROSPACE -- 4.48%
AlliedSignal Inc. 43,840 2,761,920
General Dynamics Corporation 220,000 15,070,000
Raytheon Company (Class A) 58,400 4,022,300
Raytheon Company (Class B) 111,600 7,853,850
------------
29,708,070
BANKING -- 5.48%
BankBoston Corporation 332,000 16,973,500
Wells Fargo & Company 453,620 19,392,255
------------
36,365,755
BROADCASTING -- 2.38%
Chancellor Media Corporation (a) 200,000 11,025,000
News Corporation Ltd. (ADR) 150,000 4,734,375
------------
15,759,375
CHEMICALS -- 3.34%
Du Pont (E. I.) De Nemours &
Company 220,000 15,028,750
Monsanto Company 180,000 7,098,750
------------
22,127,500
COMPUTER HARDWARE -- 1.46%
Compaq Computer Corporation 410,000 9,711,875
COMPUTER SOFTWARE -- 5.06%
Cadence Design Systems Inc. (a) 300,000 3,825,000
Computer Associates
International Inc. 540,000 29,700,000
------------
33,525,000
CONGLOMERATES -- 5.92%
Minnesota Mining & Manufacturing
Company 215,000 18,691,563
Textron Inc. 250,000 20,578,125
------------
39,269,688
CONSUMER PRODUCTS -- 0.62%
Mattel Inc. 156,000 4,124,250
DRUGS & MEDICAL PRODUCTS -- 1.14%
Becton, Dickinson & Company 252,316 7,569,480
ELECTRICAL EQUIPMENT -- 1.83%
Avnet Inc. 139,000 6,463,500
Emerson Electric Company 90,000 5,658,750
------------
12,122,250
ELECTRONICS -- 2.02%
Rockwell International
Corporation 220,000 13,365,000
ENTERTAINMENT & LEISURE -- 2.62%
Carnival Corporation 206,000 9,991,000
Walt Disney Company 240,000 7,395,000
------------
17,386,000
FINANCE -- 5.09%
Citigroup Inc. 411,540 19,548,150
Household International Inc. 300,000 14,212,500
------------
33,760,650
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
FOOD & BEVERAGES & TOBACCO -- 2.96%
Diageo (ADR) 176,384 $ 7,584,512
Heinz (H. J.) Company 240,000 12,030,000
------------
19,614,512
HOTELS & RESTAURANTS -- 2.63%
McDonald's Corporation 422,000 17,433,875
INSURANCE -- 8.54%
ACE Ltd. 730,700 20,642,275
AFLAC Inc. 270,256 12,938,506
Everest Reinsurance Holdings
Inc. 480,000 15,660,000
RenaissanceRe Holdings Ltd. 200,000 7,400,000
------------
56,640,781
MACHINERY -- 4.71%
Caterpillar Inc. 241,000 14,460,000
Dover Corporation 480,000 16,800,000
------------
31,260,000
MANUFACTURING -- 2.18%
Avery Dennison Corporation 240,000 14,490,000
MISC. FINANCIAL SERVICES -- 6.53%
Conseco Inc. 536,152 16,319,126
Countrywide Credit Industries
Inc. 286,088 12,230,262
Freddie Mac 254,180 14,742,440
------------
43,291,828
MULTI-LINE INSURANCE -- 1.02%
American International Group
Inc. 57,627 6,745,961
PROPERTY-CASUALTY
INSURANCE -- 5.96%
Chubb Corporation 150,000 10,425,000
XL Capital Ltd. (Class A) 514,573 29,073,374
------------
39,498,374
PRINTING & PUBLISHING -- 2.01%
Donnelley (R. R.) & Sons Company 360,000 13,342,500
RETAIL -- 2.17%
May Department Stores Company 352,068 14,390,780
TELECOMMUNICATIONS -- 4.52%
Motorola Inc. 170,000 16,107,500
Sprint Corporation 262,000 13,836,875
------------
29,944,375
TRANSPORTATION -- 3.97%
AMR Corporation (a) 281,000 19,178,250
Canadian Pacific Ltd. 300,000 7,143,750
------------
26,322,000
WASTE MANAGEMENT -- 2.43%
Waste Management Inc. 300,000 16,125,000
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $466,346,996) 619,094,879
- ----------------------------------------------------------------------
COMMERCIAL PAPER -- 2.82%
- ----------------------------------------------------------------------
Ford Motor Credit Company 5.10%
due 07/28/99 $18,767,000 18,695,216
------------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $18,695,216) 18,695,216
- ----------------------------------------------------------------------
</TABLE>
135
<PAGE> 8
ENTERPRISE ACCUMULATION TRUST
EQUITY PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
SHORT-TERM GOVERNMENT SECURITIES -- 3.01%
- ----------------------------------------------------------------------
Federal National Mortgage
Association Discount Note,
4.83% due 07/21/99 $20,000,000 $ 19,946,333
------------
TOTAL SHORT-TERM GOVERNMENT SECURITIES
(IDENTIFIED COST $19,946,333) 19,946,333
- ----------------------------------------------------------------------
REPURCHASE AGREEMENT -- 0.73%
- ----------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement, 4.25%
due 07/01/99
Collateral: U.S. Treasury Note
$4,820,000, 7.125% due
02/29/00
Value $5,105,125 4,890,000 4,890,000
------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $4,890,000) 4,890,000
- ----------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $509,878,545) $662,626,428
OTHER ASSETS LESS LIABILITIES -- 0.08% 512,748
------------
NET ASSETS 100% $663,139,176
======================================================================
</TABLE>
(a) Non-income producing security.
(ADR) American Depository Receipt.
See notes to financial statements.
136
<PAGE> 9
ENTERPRISE ACCUMULATION TRUST
EQUITY INCOME PORTFOLIO
1740 ADVISERS, INC.
NEW YORK, NEW YORK
Investment Management
1740 Advisers 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 Portfolio is to seek a
combination of growth and income to achieve an above-average and consistent
total return.
Investment Strategies
The Equity Income Portfolio 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 Portfolio. 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.
First Half 1999 Performance Review
When the financial crisis hit world markets last year, investors responded
by moving into the biggest and best companies. The expectation was that in a
hostile and uncertain world the safest place to be was in the most financially
secure, most broadly diversified and highest growth stocks. As money poured in,
those stocks rose at the expense of the rest of the market; and the popular
averages, which were dominated by the large-cap growth names, outperformed
everything else.
Now with the world on the mend and the outlook for corporate profits
improving, the market has begun to broaden. During the second quarter this has
resulted in increased investor interest in economy-sensitive stocks and in
mid-cap and some smaller-cap names. Many of these stocks went through their own
bear market last year, declining while the popular averages rose. This year may
see the reverse of the past several years' pattern -- the large-cap dominated
averages underperform the average stock.
Future Investment Strategy
The Equity Income Portfolio has a substantial emphasis on the
economy-sensitive sectors. Cyclicals such as basic materials, capital spending
related and energy stocks represent value. They are relatively underowned, went
through bear market size declines last year and may experience an improving
earnings outlook. They suffered the most from the crisis and may benefit the
most from the ending of the crisis and the beginning of economic and financial
recovery.
The views expressed in this report reflect those of the Portfolio 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.
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<PAGE> 10
ENTERPRISE ACCUMULATION TRUST
EQUITY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 92.63% PRINCIPAL AMOUNT VALUE
- ----------------------------------------------------------------------
<S> <C> <C>
AEROSPACE -- 2.44%
Northrop Grumman Corporation 2,000 $ 132,625
United Technologies Corporation 3,000 215,063
-----------
347,688
AUTOMOTIVE -- 2.52%
Delphi Automotive Systems Corp. 1,100 20,419
Ford Motor Company 3,300 186,244
General Motors Corporation 2,300 151,800
-----------
358,463
BANKING -- 8.88%
Bank of America Corporation 2,500 183,281
Bank of New York Company Inc. 3,900 143,081
BankBoston Corporation 3,000 153,375
Chase Manhattan Corporation 2,200 190,575
Fleet Financial Group Inc. 2,600 115,375
J.P. Morgan & Company Inc. 1,400 196,700
Mellon Bank Corporation 4,000 145,500
Wells Fargo & Company 3,200 136,800
-----------
1,264,687
CHEMICALS -- 3.31%
Dow Chemical Company 1,500 190,312
Du Pont (E. I.) De Nemours &
Company 2,600 177,613
Rohm & Haas Company 2,400 102,900
-----------
470,825
COMPUTER HARDWARE -- 1.74%
Xerox Corporation 4,200 248,063
CONGLOMERATES -- 2.13%
Minnesota Mining & Manufacturing
Company 1,600 139,100
Textron Inc. 2,000 164,625
-----------
303,725
CONSUMER DURABLES -- 0.87%
Dana Corporation 2,700 124,369
CONSUMER NON-DURABLES -- 1.99%
Avon Products Inc. 5,100 283,050
CONSUMER PRODUCTS -- 2.40%
Colgate Palmolive Company 1,700 167,875
Honeywell Inc. 1,500 173,813
-----------
341,688
CRUDE & PETROLEUM -- 6.35%
BP Amoco (ADR) 1,700 184,450
Chevron Corporation 1,700 161,819
Exxon Corporation 2,800 215,950
Mobil Corporation 2,000 198,000
Texaco Inc. 2,300 143,750
-----------
903,969
ELECTRICAL EQUIPMENT -- 4.16%
Emerson Electric Company 2,600 163,475
General Electric Company 3,800 429,400
-----------
592,875
ENERGY -- 7.66%
Atlantic Richfield Company 1,400 116,988
Consolidated Natural Gas Company 2,800 170,100
Duke Energy Company 3,000 163,125
El Paso Energy Corporation 4,200 147,787
Enron Corporation 2,700 220,725
Williams Companies Inc. 6,400 272,400
-----------
1,091,125
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
FOOD & BEVERAGES & TOBACCO -- 0.68%
Philip Morris Companies Inc. 2,400 $ 96,450
INSURANCE -- 1.50%
Cigna Corporation 2,400 213,600
MACHINERY -- 3.92%
Caterpillar Inc. 3,000 180,000
Deere & Company 3,700 146,612
Pitney Bowes Inc. 3,600 231,300
-----------
557,912
MANUFACTURING -- 1.03%
Eaton Corporation 1,600 147,200
METALS & MINING -- 1.04%
Alcoa Inc. 2,400 148,500
MISC. FINANCIAL SERVICES -- 1.50%
Citigroup Inc. 4,500 213,750
MULTI-LINE INSURANCE -- 1.40%
Lincoln National Corporation 3,800 198,788
OIL SERVICES -- 3.62%
Baker Hughes Inc. 3,400 113,900
Diamond Offshore Drilling Inc. 3,800 107,825
Halliburton Company 3,100 140,275
Schlumberger Ltd. 2,400 152,850
-----------
514,850
PROPERTY-CASUALTY
INSURANCE -- 0.98%
Chubb Corporation 2,000 139,000
PAPER & FOREST PRODUCTS -- 4.85%
Bowater Inc. 2,800 132,300
Georgia Pacific Corporation 4,500 213,187
International Paper Company 4,000 202,000
Temple-Inland Inc. 2,100 143,325
-----------
690,812
PHARMACEUTICALS -- 7.17%
American Home Products
Corporation 3,200 184,000
Baxter International Inc. 2,400 145,500
Bristol Myers Squibb Company 2,400 169,050
Merck & Company Inc. 2,600 192,400
Pharmacia & Upjohn Inc. 2,900 164,756
Smithkline Beecham (ADR) 2,500 165,156
-----------
1,020,862
PRINTING & PUBLISHING -- 1.02%
McGraw Hill Inc. 2,700 145,631
RAW MATERIALS -- 2.52%
Phelps Dodge Corporation 1,500 92,906
Reynolds Metals Company 1,700 100,300
Weyerhaeuser Company 2,400 165,000
-----------
358,206
REAL ESTATE -- 2.09%
Boston Properties Inc. 2,100 75,337
Crescent Real Estate Equities 3,300 78,375
Equity Office Properties Trust 3,000 76,875
Equity Residential Properties
Trust 1,500 67,594
-----------
298,181
SAVINGS AND LOAN -- 0.87%
Federal National Mortgage
Association 1,800 123,075
TECHNOLOGY -- 0.50%
Thomas & Betts Corporation 1,500 70,875
</TABLE>
138
<PAGE> 11
ENTERPRISE ACCUMULATION TRUST
EQUITY INCOME PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
TELECOMMUNICATIONS -- 10.21%
Ameritech Corporation 2,800 $ 205,800
AT & T Corporation 3,800 212,087
Bell Atlantic Corporation 2,900 189,587
BellSouth Corporation 3,900 182,813
GTE Corporation 2,200 166,650
SBC Communications Inc. 3,300 191,400
Sprint Corporation 3,100 163,719
U S West Inc. 2,400 141,000
-----------
1,453,056
UTILITIES -- 3.28%
Carolina Power & Light Company 2,900 124,156
CMS Energy Corporation 2,900 121,438
Edison International 4,200 112,350
FPL Group Inc. 2,000 109,250
-----------
467,194
-----------
TOTAL COMMON STOCKS
(IDENTIFIED COST $12,596,917) 13,188,469
- ----------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
REPURCHASE AGREEMENT -- 4.91%
- ----------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement, 4.25% due
07/01/99
Collateral: U.S. Treasury Note
$695,000; 6.125%, due 07/31/00
Value $734,848 $ 700,000 $ 700,000
-----------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $700,000) 700,000
- ----------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $13,296,917) $13,888,469
OTHER ASSETS LESS LIABILITIES -- 2.46% 349,595
-----------
NET ASSETS 100% $14,238,064
======================================================================
</TABLE>
(ADR) American Depository Receipt.
See notes to financial statements.
139
<PAGE> 12
ENTERPRISE ACCUMULATION TRUST
CAPITAL APPRECIATION PORTFOLIO
PROVIDENT INVESTMENT COUNSEL, INC.
PASADENA, CALIFORNIA
Investment Management
Provident Investment Counsel manages approximately $18 billion for
institutional clients, and its usual investment minimum is $5 million.
Investment Objective
The objective of the Enterprise Capital Appreciation Portfolio is to seek
maximum capital appreciation.
Investment Strategies
The Capital Appreciation Portfolio invests in U.S. common stocks of
companies that demonstrate accelerating earnings momentum and consistently
strong financial characteristics. The Portfolio Manager's criteria for stock
selection include: (a) steadily increasing earnings; and (b) a three-year
performance record of sales, earnings, dividend growth, pretax margins, return
on equity and reinvestment rate which, in the aggregate, average 1.5 times the
average performance of the S&P 500 for the same period. The Portfolio Manager
selects stocks of small, medium and large capitalization companies in an attempt
to achieve an average capitalization of portfolio companies that is less than
the average capitalization of the S&P 500. The potential for maximum capital
appreciation is the basis for investment decisions; any income is incidental.
First Half 1999 Performance Review
A backdrop of vigorous economic growth and a nervous bond market caused
tremendous volatility in stock market sectors year-to-date. Thirty-year bond
yields increased from 5.12 percent at the end of December, 1998 to 6.14 percent
near the close of June, 1999. This rise punished the prices of high-PE stocks of
companies offering consistent earnings growth. Overall, the year thus far has
been positive for the growth averages, but less so than the extraordinary gains
of 1998.
The year (as measured by the Russell 1000 Growth Index) began on a
relatively good note but turned flat in April, took a fairly significant dip
during May and rebounded strongly in June. The Portfolio participated in the
June recovery, which was a reflection of growth stocks regaining their momentum
after being badly disadvantaged during April and May with rising interest rates
and a market rotation into cyclical stocks. The rotation was caused by the
perception that stronger than expected economic growth would, in turn, generate
better earnings growth for the economically sensitive stocks.
Future Investment Strategy
The shift favoring cyclical/value stocks, which began in April and
continued through May and early June, has abated. The key question is what
trends in place today will most affect returns for the balance of the year?
First, one of the most positive signs has been the broadening out of the market.
For the first time in years, asset class returns in the quarter were in keeping
with traditional risk/reward models, (i.e., the more risk you are willing to
assume, the higher the returns would be). In the second quarter, small-cap
stocks (up 14.8 percent) outperformed mid-cap stocks (up 10.4 percent), which
outperformed large-cap stocks (up 3.9 percent), as measured by the Russell 2000
Growth, Russell Mid-Cap Growth, and the Russell 1000 Growth Indices. Also in the
second quarter, value stocks (up 10.8 percent) outperformed growth stocks (up
3.8 percent), as measured by the S&P 500 Barra Value and S&P 500 Barra Growth
Indices, as the better than expected economic growth and rising interests rates
corrected the valuation extremes at both ends of the market. Provident believes
the April/May stellar performance for cyclically oriented stocks represents a
broadening out of the market and not a major change in style leadership.
Provident remains committed to technology and consumer-oriented themes, but
the Portfolio has reduced its commitment to the health technology area,
particularly drug stocks. While Provident cut back on their drug holdings
earlier in the year, two short-term obstacles nonetheless have penalized
returns. The first is a drug pipeline that is less robust than at this time last
year; the second concerns pending Medicare and Medicaid reform. On the other
hand, the improved domestic and global economic backdrop does provide certain
companies new opportunities for earnings growth. For example, Provident
continues to look for new opportunities in telecommunications, where the
longer-term earnings growth outlook of many companies may be exceptional.
Finally, Provident believes the broadening of the market increases the
opportunity universe. Investors, less
140
<PAGE> 13
concerned about liquidity, are seeking out stocks with the best relative
attractiveness regardless of market capitalization. Provident will continue to
build the stock positions in the Portfolio where Provident thinks valuations are
particularly attractive.
The Portfolio's return for the balance of the year will depend on the level
of interest rates and the companies in the Portfolio maintaining their expected
growth rates. If inflation remains subdued, i.e., under 3 percent, and interest
rates remain in a reasonably narrow range around current levels, then the broad
market should do well and both growth and value strategies should benefit. The
challenge to growth stocks remains any sizeable increase in interest rates;
value stocks are going to need a meaningful acceleration in earnings to maintain
recent performance momentum. Provident believes the earnings power for cyclical
companies is less than robust. They recognize, also, that investors cannot
expect any further expansion in price/earnings ratios. Therefore, their
challenge and primary focus in the management of the Portfolio is to be
confident that the companies in the Portfolio continue to produce well above
average sales and earnings growth.
The views expressed in this report reflect those of the Portfolio 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.
141
<PAGE> 14
ENTERPRISE ACCUMULATION TRUST
CAPITAL APPRECIATION PORTFOLIO
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 87.59% PRINCIPAL AMOUNT VALUE
- ----------------------------------------------------------------------
<S> <C> <C>
ADVERTISING -- 1.16%
Outdoor Systems Inc. (a) 4,000 $ 146,000
BANKING -- 0.55%
FIRSTAR Corporation 2,500 70,000
BROADCASTING -- 1.45%
Clear Channel Communications (a) 1,800 124,088
Infinity Broadcasting Corporation
(Class A) (a) 2,000 59,500
-----------
183,588
BUSINESS SERVICES -- 2.41%
Concord EFS Inc. (a) 4,000 169,250
CSG Systems International Inc.
(a) 1,500 39,281
Paychex Inc. 3,000 95,625
-----------
304,156
COMPUTER HARDWARE -- 4.48%
Dell Computer Corporation (a) 1,400 51,800
Electronics for Imaging Inc. (a) 4,000 205,500
EMC Corporation (a) 2,000 110,000
Lexmark International Group Inc.
(Class A) (a) 3,000 198,187
-----------
565,487
COMPUTER SERVICES -- 11.55%
America Online Inc. (a) 1,000 110,500
Comverse Technology Inc. (a) 2,700 203,850
Fiserv Inc. (a) 4,000 125,250
Ixl Enterprises Incorporated 5,050 135,719
Solectron Corporation (a) 2,000 133,375
Sun Microsystems Inc. (a) 2,000 137,750
Sungard Data Systems Inc. (a) 1,500 51,750
Synopsys Inc. (a) 3,800 209,713
Unisys Corporation 9,000 350,437
-----------
1,458,344
COMPUTER SOFTWARE -- 3.51%
BMC Software Inc. (a) 2,000 108,000
Intuit Inc. (a) 2,000 180,250
Real Networks Inc. (a) 900 61,987
Siebel Systems Inc. (a) 1,400 92,925
-----------
443,162
CONSUMER DURABLES -- 1.08%
Harley Davidson Inc. 2,500 135,938
CONTAINERS/PACKAGING -- 2.39%
Ball Corporation 3,000 126,750
Sealed Air Corporation (New) 2,700 175,163
-----------
301,913
CRUDE & PETROLEUM -- 1.89%
Ensco International Inc. 12,000 239,250
ELECTRICAL EQUIPMENT -- 2.74%
Jabil Circuit Inc. (a) 4,500 203,062
Teradyne Incorporated (a) 2,000 143,500
-----------
346,562
ELECTRONICS -- 6.02%
Altera Corporation (a) 7,000 257,687
Gemstar International Group Ltd.
(a) 3,200 208,800
Tandy Corporation 6,000 293,250
-----------
759,737
ENERGY -- 2.96%
AES Corporation 3,400 197,625
Montana Power Company 2,500 176,250
-----------
373,875
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
ENTERTAINMENT & LEISURE -- 0.96%
Carnival Corporation 2,500 $ 121,250
FINANCE -- 6.37%
Associates First Capital
Corporation (Class A) 1,700 75,331
Capital One Financial Corporation 3,000 167,063
MBNA Corporation 6,000 183,750
Metris Companies Inc. 4,000 163,000
Providian Financial Corporation 2,300 215,050
-----------
804,194
HEALTH CARE -- 0.43%
Medtronic Inc. 700 54,513
HOTELS & RESTAURANTS -- 3.24%
Brinker International Inc. (a) 10,500 285,469
Ruby Tuesday Inc. 6,500 123,500
-----------
408,969
LIFE INSURANCE -- 0.34%
Reinsurance Group America Inc. 1,200 42,300
MANUFACTURING -- 1.50%
Tyco International Ltd. 2,000 189,500
MEDICAL INSTRUMENTS -- 2.99%
Guidant Corporation 1,500 77,156
VISX, Inc. (a) 3,800 300,913
-----------
378,069
MEDICAL SERVICES -- 1.40%
Ims Health Incorporated 1,600 50,000
Wellpoint Health Networks
Incorporated (a) 1,500 127,313
-----------
177,313
OIL SERVICES -- 2.81%
Baker Hughes Inc. 5,500 184,250
Nabors Industries Incorporated
(a) 7,000 171,062
-----------
355,312
PHARMACEUTICALS -- 0.42%
Schering Plough Corporation 1,000 53,000
RETAIL -- 10.76%
Abercrombie and Fitch Company
(Class A) (a) 1,400 67,200
Bed Bath & Beyond Inc. (a) 3,000 115,500
Costco Companies Inc. (a) 1,300 104,081
CVS Corporation 800 40,600
Dollar Tree Stores Inc. (a) 2,600 114,400
Family Dollar Stores Inc. 3,500 84,000
Kohl's Corporation (a) 1,500 115,782
Linens 'n Things Inc. (a) 2,000 87,500
Office Depot Inc. (a) 2,000 44,125
Safeway Inc. (a) 1,800 89,100
Staples Inc. (a) 2,300 71,156
Tiffany & Company 2,500 241,250
Tommy Hilfiger Corporation (a) 2,500 183,750
-----------
1,358,444
TECHNOLOGY -- 3.87%
Linear Technology Corporation 2,000 134,500
Network Appliance Inc. (a) 2,000 111,750
Uniphase Corporation (a) 500 83,000
Waters Corporation (a) 3,000 159,375
-----------
488,625
</TABLE>
142
<PAGE> 15
ENTERPRISE ACCUMULATION TRUST
CAPITAL APPRECIATION PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
TELECOMMUNICATIONS -- 8.64%
ADC Telecommunications Inc. (a) 3,500 $ 159,469
Alltel Corporation 1,500 107,250
Amdocs Ltd. (a) 6,500 147,875
Global TeleSystems Group Inc. (a) 3,000 243,000
Lucent Technologies Inc. 1,000 67,437
MCI Worldcom Inc. (a) 1,900 163,519
Tellabs Inc. (a) 3,000 202,687
-----------
1,091,237
WASTE MANAGEMENT -- 1.67%
Tetra Tech Inc. (a) 6,250 103,125
Waste Management Inc. 2,000 107,500
-----------
210,625
-----------
TOTAL COMMON STOCKS
(IDENTIFIED COST $10,288,504) 11,061,363
- ----------------------------------------------------------------------
COMMERCIAL PAPER -- 9.50%
- ----------------------------------------------------------------------
American Express Credit
Corporation, 5.50% due 07/01/99 $600,000 600,000
Household Finance Corporation
5.55% due 07/01/99 600,000 600,000
-----------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $1,200,000) 1,200,000
- ----------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
REPURCHASE AGREEMENT -- 1.11%
- ----------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement, 4.25% due
07/01/99
Collateral: U.S. Treasury Bond
$155,000, 3.625%, due 04/15/28
Value $152,779 $140,000 $ 140,000
-----------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $140,000) 140,000
- ----------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $11,628,504) $12,401,363
OTHER ASSETS LESS LIABILITIES -- 1.80% 226,882
-----------
NET ASSETS 100% $12,628,245
======================================================================
</TABLE>
(a) Non-income producing security.
See notes to financial statements.
143
<PAGE> 16
ENTERPRISE ACCUMULATION TRUST
SMALL COMPANY GROWTH PORTFOLIO
WILLIAM D. WITTER, INC.
NEW YORK, NEW YORK
Investment Management
William D. Witter, Inc. manages approximately $1 billion in assets under
management and has a normal investment minimum for a separate account of $1
million.
Investment Objective
The objective of the Enterprise Small Company Growth Portfolio is to seek
capital appreciation.
Investment Strategies
The Small Company Growth Portfolio invests primarily in common stocks of
small capitalization companies with above-average growth characteristics that
are reasonably valued. The Portfolio 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 Portfolio Manager will not
buy a stock if its price-earnings ratio exceeds its growth rate. By using this
valuation parameter the Portfolio Manager believes it moderates some of the
inherent volatility in the small capitalization sector of the market. Securities
will be sold when the Portfolio 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 Portfolio, or when the company no longer
meets expectations. The Portfolio 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.
First Half 1999 Performance Review
Concerns about the slowdown in global economic growth, which intensified in
the summer of 1998, were still present in the first quarter of 1999. Investors
responded, in part, by continuing to concentrate their equity investments into
large, well-known, highly liquid issues. In the second quarter, as confidence
developed that an economic recovery in Asia was beginning, the willingness to
participate in the broader market increased.
The dramatic rise in the prices of Internet stocks in the first part of the
year led to a substantial increase in initial public offerings of
internet-related companies. By the second quarter, the demand for this type of
investment appeared to be satiated by supply. The extremely high valuation
levels of the group were also a factor in encouraging investors to look
elsewhere for opportunities.
While a number of observers had pointed out the historically low relative
valuations of small companies, in the second quarter an awareness developed of
the increase in investment banking activity in this group. By early April, the
number of mergers, acquisitions, and leveraged buyouts totaled 207, which
compared with an annual average of 162 for this decade, according to Merrill
Lynch Small Cap Research. This development is reminiscent of the 1980's when it
was more economical for companies to expand by buying another company's stock
than by building new facilities and expanding their own organizations.
The Portfolio benefited from the announcement of two investment banking
transactions. Amsted Industries offered to buy Varlen Corp. at $35. Varlen's
stock had been selling in the low-to mid-twenties prior to the announcement and
its management stated that the offer was inadequate. Additional negotiations are
proceeding and Varlen was at $40 1/2 at June 30, 1999. Maxxim Medical's
management, frustrated by their equity's price being $16 in spite of good
fundamental progress, offered to buy the whole company themselves at $26. The
stock finished the six months ended June 30, 1999 at $23 5/16.
Future Investment Strategy
The rise in long-term interest rates during the first six months,
particularly those related to the housing industry, may slow down the economy's
growth rate. This factor together with the strong currency may keep the
inflation rate at around 2 percent
144
<PAGE> 17
or lower. While valuation levels of large capitalization issues, in general, are
high, the price/earnings ratios relative to earnings growth rates of the smaller
company equities are still low. Witter believes that the sector should do well
over the next one to three years.
Accordingly, the Portfolio will continue to be fully invested and maintain
significant emphasis on cyclical growth companies such as those in the
semi-conductor equipment industry. It is also likely that more secular growth
issues such as those in the computer systems/software, health care, and business
services will be added.
The views expressed in this report reflect those of the Portfolio 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.
145
<PAGE> 18
ENTERPRISE ACCUMULATION TRUST
SMALL COMPANY GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 91.47% PRINCIPAL AMOUNT VALUE
- ----------------------------------------------------------------------
<S> <C> <C>
AEROSPACE -- 2.69%
AAR Corporation 3,150 $ 71,466
Tristar Aerospace Company (a) 10,500 86,625
----------
158,091
BUSINESS SERVICES -- 16.22%
Analytical Surveys Inc. (a) 8,300 206,463
Charles River Associates Inc. (a) 8,900 223,056
Labor Ready Inc. (a) 6,500 211,250
Maximus Inc. (a) 4,500 129,375
On Assignment Inc. (a) 7,000 182,875
----------
953,019
COMPUTER HARDWARE -- 1.94%
Auspex Systems Inc. (a) 10,500 114,188
COMPUTER SERVICES -- 7.39%
Kronos Inc. (a) 4,125 187,687
National Computer Systems Inc. 7,300 246,375
----------
434,062
COMPUTER SOFTWARE -- 12.19%
Legato Systems Inc. (a) 4,030 232,733
Mapinfo Corporation (a) 9,000 171,000
Pervasive Software Inc. (a) 10,000 248,750
Verity Inc. (a) 1,175 63,670
----------
716,153
ELECTRONICS -- 11.38%
Applied Science & Technology Inc.
(a) 12,600 283,500
Cymer Inc. (a) 8,600 215,000
Veeco Instruments Inc. (a) 5,000 170,000
----------
668,500
FINANCE -- 1.17%
Doral Financial Corporation 4,000 69,000
INSURANCE -- 1.11%
Everest Reinsurance Holdings 2,000 65,250
MANUFACTURING -- 5.62%
Astropower Inc. (a) 6,640 116,200
Mueller Industries Inc. (a) 3,440 116,745
Varlen Corporation 2,400 97,200
----------
330,145
MEDICAL INSTRUMENTS -- 8.47%
Candela Corporation (a) 14,500 206,625
Cytyc Corporation (a) 9,900 193,050
Theragenics Corporation (a) 14,080 97,680
----------
497,355
MEDICAL SERVICES -- 3.25%
Maxxim Medical Inc. (a) 8,200 191,163
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
OIL SERVICES -- 0.36%
Atwood Oceanics Inc. (a) 685 $ 21,406
SECURITY & INVESTIGATION
SERVICES -- 0.61%
Barringer Technologies Inc. (a) 5,500 35,578
TECHNOLOGY -- 4.24%
Catalytica Inc. (a) 11,830 165,620
Flir Systems Inc. (a) 5,500 83,187
----------
248,807
TRANSPORTATION -- 13.20%
Alaska Air Group Inc. (a) 3,200 133,600
Amtran Inc. (a) 4,000 98,500
Atlas Air Inc. (a) 7,040 227,040
Ryanair Holdings (ADR) (a) 2,935 155,555
Sea Containers Ltd. (Class A) 4,800 161,100
----------
775,795
TRAVEL/ENTERTAINMENT/LEISURE -- 1.63%
Polaris Industries Inc. 2,200 95,700
----------
TOTAL COMMON STOCKS
(IDENTIFIED COST $4,624,992) 5,374,212
- ----------------------------------------------------------------------
U.S. TREASURY BILLS -- 3.39%
- ----------------------------------------------------------------------
U.S. Treasury Bill
4.405% due 07/22/99 $200,000 199,486
----------
TOTAL U.S. TREASURY BILLS
(IDENTIFIED COST $199,486) 199,486
- ----------------------------------------------------------------------
COMMERCIAL PAPER -- 3.83%
- ----------------------------------------------------------------------
Alcoa Inc.
5.75% due 07/01/99 225,000 225,000
----------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $225,000) 225,000
- ----------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $5,049,478) $5,798,698
OTHER ASSETS LESS LIABILITIES -- 1.31% 76,889
----------
NET ASSETS 100% $5,875,587
======================================================================
</TABLE>
(a) Non-income producing security.
(ADR) American Depository Receipt.
See notes to financial statements.
146
<PAGE> 19
ENTERPRISE ACCUMULATION TRUST
SMALL COMPANY VALUE PORTFOLIO
GABELLI ASSET MANAGEMENT COMPANY
RYE, NEW YORK
Investment Management
Gabelli Asset Management Company, which manages more than $9 billion for
institutional clients and whose normal investment minimum is $1 million became
manager of the Portfolio on June 1, 1996.
Investment Objective
The objective of the Enterprise Small Company Value Portfolio is to seek
maximum capital appreciation.
Investment Strategies
The Small Company Value Portfolio invests primarily in common stocks of
small capitalization companies that the Portfolio Manager believes are
undervalued -- that is, the stock's market price does not fully reflect the
company's value. The Portfolio 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 Portfolio 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.
First Half 1999 Performance Review
The first six months of 1999 were a study in the psychology of small-cap
investors. While the first quarter tested their patience, the second quarter
rewarded it.
The level of merger and acquisition activity that Gabelli saw during 1998
continued unabated into 1999. The Portfolio's returns were enhanced by the
takeover of several holdings: Aeroquip Vickers, Hudson General, Calmat and Grand
Casinos, to name just a few. Going forward, Gabelli expects the deal activity to
accelerate as companies of all sizes race to acquire the much cheaper and
undervalued smaller sized companies.
Cable stocks contributed very nicely to the performance for the first six
months of the year. The industry has been involved in round after round of
consolidation as companies race to acquire more households, eyeballs and
bandwidth. Due to this consolidation, the stocks of cable companies which have
not yet been taken over have performed well during 1999. Rogers Communications
(up 82 percent) and Cablevision (up 39 percent) have been rumored to be the next
to go.
The telecommunications industry and more specifically the cellular industry
have been extremely hot during 1999. Omnipoint has increased 143 percent in the
Portfolio for the first half of 1999 as it received a cash and stock offer from
VoiceStream Wireless. As a result of this, the stocks of several cellular
companies have exploded on the upside: Aerial Communications (up 130 percent),
Price Communications (up 81 percent) and Telephone & Data Systems (up 63
percent) to name just a few.
Future Investment Strategy
Inflation reared its head in the second quarter of 1999. A jump in the
Consumer Price Index (CPI) in April rattled the bond and equity markets.
Inflation all but disappeared again in the May CPI numbers. The bond market
stabilized and stocks regained momentum. Despite the dueling data on inflation,
the Federal Reserve decided to err on the side of caution by hiking the Federal
Funds rate by 0.25 percent on June 30, in what Chairman Alan Greenspan
characterized as a "preemptive action" against inflation. This sparked the
current debate as to whether this single modest rate hike would be an effective
move against inflation or just the first in a series of steps that will
eventually weaken the economy and financial markets. Judging from the bond and
stock markets' slide in late June, the consensus appears to expect more Fed rate
hikes and higher interest rates going forward.
Gabelli is cautiously optimistic on inflation in the near future. The
inflationary threat comes partially from rising commodities prices, which are
recovering from severely depressed levels following the Asian economic meltdown,
and from the prospect of wage inflation in a fully employed America. Thus far,
technology-driven productivity gains have offset rising wages.
147
<PAGE> 20
Along with Federal Reserve Chairman Alan Greenspan, Gabelli is not sure how much
longer this can continue in an America with help wanted signs in an increasing
number of corporate windows. The American consumer continues to be the key to
economic growth here and abroad. Full employment, rising wages and a generous
stock market have been the drivers for consumer spending. If rising interest
rates discourage consumer spending, or Gabelli sees a meaningful correction in
the stock market that would dent consumer confidence, the engine that has been
driving global economic growth could falter.
Corporate earnings and interest rates may determine the course of the
market for the balance of 1999. In general, first quarter earnings met consensus
estimates and second quarter earnings may be stronger than anticipated. Interest
rates are higher, and do not seem likely to trend much lower for the rest of the
year. With the S&P 500's gains already approximating 1999 earnings growth
forecasts, we see little fundamental justification for the market to move
appreciably higher. Mutual fund flows are still favoring stocks, but money is no
longer pouring into equity mutual funds at the rates seen in previous years.
The views expressed in this report reflect those of the Portfolio 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.
148
<PAGE> 21
ENTERPRISE ACCUMULATION TRUST
SMALL COMPANY VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 98.12% PRINCIPAL AMOUNT VALUE
- ----------------------------------------------------------------------
<S> <C> <C>
ADVERTISING -- 1.46%
BOWLIN Outdoor Advertising &
Travel Center Inc. (a) 60,000 $ 360,000
The Ackerley Group Inc. 340,000 6,183,750
------------
6,543,750
AEROSPACE -- 6.66%
AAR Corporation 18,000 408,375
Ametek Inc. 100,000 2,300,000
Coltec Industries Inc. (a) 90,000 1,951,875
Curtiss-Wright Corporation 88,000 3,421,000
GenCorp Inc. 210,000 5,302,500
Kaman Corporation (Class A) 110,000 1,725,625
Moog Inc. (Class A) (a) 40,000 1,375,000
Sequa Corporation (Class A) 70,000 4,900,000
Sequa Corporation (Class B) 40,500 2,895,750
SPS Technologies Inc. (a) 150,000 5,625,000
------------
29,905,125
APPAREL & TEXTILES -- 0.26%
Carlyle Industries Inc. (a) 200,259 256,582
Hartmarx Corporation (a) 220,000 921,250
------------
1,177,832
AUTOMOTIVE -- 8.42%
A. O. Smith Corporation 12,000 336,000
A. O. Smith Corporation (Class
A) 4,000 108,500
Arvin Industries Inc. 45,000 1,704,375
Borg-Warner Automotive Inc. 27,000 1,485,000
Clarcor Inc. 230,000 4,413,125
Earl Scheib Inc. (a) 225,000 1,068,750
Federal Mogul Corporation 24,500 1,274,000
Lund International Holdings Inc.
(a) 24,000 150,000
Midas Inc. 30,000 851,250
Modine Manufacturing Company 265,000 8,629,062
Navistar International
Corporation (a) 72,000 3,600,000
Standard Motor Products Inc. 255,000 6,247,500
Superior Industries
International Inc. 102,000 2,785,875
Wynns International Inc. 280,000 5,162,500
------------
37,815,937
BROADCASTING -- 8.44%
Chris-Craft Industries Inc. (a) 176,000 8,294,000
Echostar Communications
Corporation (Class A) (a) 10,000 1,534,375
Fisher Companies Inc. 27,000 1,701,000
Gray Communications Systems Inc. 86,000 1,720,000
Gray Communications Systems
Inc.(Class B) 165,000 2,330,625
Paxson Communications
Corporation (a) 215,000 2,687,500
United Television Inc. 67,000 7,026,625
USA Networks Inc. (a) 314,700 12,627,337
------------
37,921,462
BUILDING & CONSTRUCTION -- 0.00%
Core Materials Corporation 6,500 20,313
BUSINESS SERVICES -- 0.13%
MDC Corporation (Class A) (a) 30,000 363,750
Nashua Corporation (a) 22,000 217,250
------------
581,000
CABLE -- 7.31%
AFC Cable Systems Inc. (a) 20,000 706,250
Cablevision Systems Corporation
(Class A) (a) 242,000 16,940,000
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
Century Communications
Corporation (Class A) (a) 110,000 $ 5,060,000
Rogers Communications Inc.
(Class B) (a) 393,000 6,361,687
TCI Satellite Entertainment
Inc.(Class A) (a) 135,000 396,563
United International Holdings
Inc. (Class A) (a) 50,000 3,381,250
------------
32,845,750
CHEMICALS -- 1.75%
Church & Dwight Company Inc. 68,000 2,958,000
Ferro Corp. 55,000 1,512,500
Sybron Chemicals Inc. (a) 190,000 3,372,500
------------
7,843,000
COMPUTER HARDWARE -- 0.00%
Cerion Technologies Inc. (a) (d) 90,000 --
COMPUTER SERVICES -- 0.28%
Checkfree Holdings Corporation
(a) 2,000 55,125
Tyler Technologies Inc. 175,000 1,203,125
------------
1,258,250
CONSUMER DURABLES -- 0.67%
Hussmann International Inc. 100,000 1,656,250
Noel Group (a) 135,000 84,375
Noel Group Units (a) 135,000 77,625
Oneida Ltd. 42,000 1,181,250
------------
2,999,500
CONSUMER PRODUCTS -- 0.16%
ARC International Corporation
(a) 30,000 39,375
Mikasa Inc. 62,000 701,375
------------
740,750
CONSUMER SERVICES -- 0.71%
Berlitz International Inc. (a) 68,000 1,249,500
ITT Educational Services Inc.
(a) 75,000 1,954,688
------------
3,204,188
ELECTRICAL EQUIPMENT -- 1.96%
Ampco-Pittsburgh Corporation 130,000 1,665,625
Oak Technology Inc. (a) 250,000 906,250
SL Industries Inc. 45,000 573,750
Thomas Industries Inc. 220,000 4,510,000
UCAR International Inc. (a) 45,000 1,136,250
------------
8,791,875
ELECTRONICS -- 0.89%
CTS Corporation 42,000 2,940,000
Power-One Inc. (a) 7,000 172,375
Watkins Johnson Company 30,000 885,000
------------
3,997,375
ENERGY -- 0.63%
International Comfort Products
Corporation 180,000 2,047,500
Kaneb Services Inc. (a) 180,000 765,000
------------
2,812,500
ENTERTAINMENT & LEISURE -- 4.91%
Ascent Entertainment Group Inc.
(a) 150,000 2,118,750
Bull Run Corporation (a) 150,000 628,125
Churchill Downs Inc. 35,000 1,207,500
Florida Panthers Holdings Inc.
(a) 130,000 1,389,375
Gaylord Entertainment Company 266,701 8,001,030
GC Companies Inc. (a) 193,000 6,899,750
Jackpot Enterprises Inc. (a) 215,000 1,827,500
------------
22,072,030
</TABLE>
149
<PAGE> 22
ENTERPRISE ACCUMULATION TRUST
SMALL COMPANY VALUE PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
FINANCE -- 0.70%
Advest Group Inc. 20,000 $ 398,750
Pioneer Group Inc. 160,000 2,760,000
------------
3,158,750
FOOD & BEVERAGES & TOBACCO -- 5.21%
Brunos Inc. (a) 60,000 15,000
Buenos Aires Embotelladora
(ADR)(a) (d) 40,227 --
Celestial Seasonings Inc. (a) 250,000 5,375,000
Chock Full o' Nuts Corporation
(a) 315,000 3,287,812
General Cigar Holdings
Inc.(Class A) (a) 285,000 2,226,563
General Cigar Holdings
Inc.(Class B) (a) 190,000 1,413,220
Ingles Markets Inc. (Class A) 82,500 1,258,125
Pepsi Cola Puerto Rico Bottling
Company (a) 160,000 880,000
Ralcorp Holdings Inc. (a) 75,000 1,204,688
Robert Mondavi Corporation
(Class A) (a) 10,000 363,750
Tootsie Roll Industries Inc. 97,850 3,779,456
Whitman Corporation 200,000 3,600,000
------------
23,403,614
HOTELS & RESTAURANTS -- 1.89%
Advantica Restaurant Group Inc.
(a) 56,000 192,500
Aztar Corporation (a) 550,000 5,053,125
Extended Stay America Inc. (a) 55,000 660,000
Lakes Gaming Inc. (a) 35,000 382,813
Park Place Entertainment
Corporation (a) 85,000 823,437
Trump Hotels & Casino Resorts
Inc. (a) 300,000 1,368,750
------------
8,480,625
INSURANCE -- 3.09%
Argonaut Group Inc. 105,000 2,520,000
Danielson Holding Corporation
(a) 60,000 345,000
Liberty Corporation 131,000 7,139,500
Midland Company 152,500 3,869,688
------------
13,874,188
MACHINERY -- 5.06%
Baldwin Technology Company
Inc.(Class A) (a) 165,000 484,688
Commercial Intertech Corporation 60,000 956,250
Fairchild Corporation (Class A)
(a) 175,503 2,237,663
Flowserve Corporation 150,000 2,840,625
Franklin Electric Company Inc. 16,500 1,072,500
Idex Corporation 110,000 3,616,250
Katy Industries Inc. 160,000 2,080,000
Kollmorgen Corporation 140,000 2,100,000
Nortek Inc. (a) 120,000 3,757,500
Paxar Corporation (a) 185,000 1,665,000
Standex International
Corporation 18,000 492,750
Tennant Company 9,000 288,000
Watts Industries Inc. (Class A) 60,000 1,151,250
------------
22,742,476
MANUFACTURING -- 4.77%
Aviall Inc. 10,000 188,125
Barnes Group Inc. 50,000 1,087,500
Belden Inc. 45,000 1,077,187
Bway Corporation (a) 6,000 85,500
Crane Company 65,000 2,043,437
Cuno Inc. (a) 98,000 1,874,250
Dexter Corporation 4,000 163,250
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
Fedders Corporation (Class A) 385,000 $ 2,358,125
Fedders USA Inc. 100,000 668,750
Graco Inc. 40,000 1,175,000
Industrial Distribution Group
Inc. (a) 40,000 202,500
Mark IV Industries Inc. 100,000 2,112,500
Material Sciences Corporation
(a) 138,000 2,070,000
Myers Industries Inc. 30,000 600,000
Oil Dri Corporation of America 120,000 1,920,000
Park Ohio Holdings Corporation
(a) 130,000 2,201,875
Rawlings Sporting Goods Company
Inc. (a) 50,500 498,688
Strattec Security Corporation
(a) 33,000 1,113,750
------------
21,440,437
METALS & MINING -- 0.45%
Homestake Mining Company 29,600 242,350
TVX Gold Inc. (a) 650,000 650,000
WHX Corporation (a) 170,000 1,115,625
------------
2,007,975
MISC. FINANCIAL SERVICES -- 1.34%
Data Broadcasting Corporation
(a) 88,000 929,500
Paymentech Inc. (a) 200,000 5,075,000
------------
6,004,500
NEUTRACEUTICALS -- 0.16%
Irwin Naturals/4 Health Inc. (a) 18,000 33,750
Weider Nutrition International
Inc. 170,000 701,250
------------
735,000
PAPER PRODUCTS -- 0.39%
Greif Brothers Corporation
(Class A) 68,000 1,734,000
PHARMACEUTICALS -- 2.94%
Agribrands International Inc.
(a) 15,000 593,438
Carter Wallace Inc. 275,000 5,001,562
Ivax Corporation (a) 440,000 6,215,000
Twinlab Corporation (a) 160,000 1,375,000
------------
13,185,000
PRINTING & PUBLISHING -- 5.07%
A.H. Belo Corporation (Class A) 27,000 531,563
Lee Enterprises Inc. 64,000 1,952,000
McClatchy Company (Class A) 90,000 2,981,250
Media General Inc. (Class A) 160,000 8,160,000
Meredith Corporation 40,000 1,385,000
Penton Media Inc. 100,000 2,425,000
Pulitzer Inc. 55,000 2,670,937
Thomas Nelson Inc. 35,000 389,375
Topps Company Inc. (a) 310,000 2,257,187
------------
22,752,312
REAL ESTATE -- 1.12%
Catellus Development Corporation
(a) 245,000 3,797,500
Griffin Land & Nurseries Inc.
(a) 110,000 1,237,500
------------
5,035,000
RETAIL -- 3.03%
Burlington Coat Factory
Warehouse Corporation 125,000 2,414,063
CDnow Inc. (a) 8,000 141,000
Coldwater Creek Inc. (a) 45,000 877,500
Lillian Vernon Corporation 330,000 4,290,000
Neiman Marcus Group Inc. (a) 200,000 5,137,500
Phar Mor Inc. (a) 65,000 276,250
Sports Authority Inc. (a) 110,000 488,125
------------
13,624,438
</TABLE>
150
<PAGE> 23
ENTERPRISE ACCUMULATION TRUST
SMALL COMPANY VALUE PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
SECURITY & INVESTIGATION SERVICES -- 2.51%
Borg-Warner Security Corporation
(a) 80,000 $ 1,625,000
Pittway Corporation (Class A) 78,000 2,666,625
Rollins Inc. 364,000 5,801,250
Wackenhut Corporation (Class A) 40,000 1,190,000
------------
11,282,875
TELECOMMUNICATIONS -- 10.09%
Aerial Communications Inc. (a) 230,000 3,105,000
Aliant Communications Inc. 8,000 369,500
Associated Group Inc. (Class A)
(a) 76,000 4,949,500
Atlantic Tele-Network Inc. 15,000 157,500
Cellullar Communications of
Puerto Rico (a) 84,000 2,394,000
Commonwealth Telephone
Enterprises Inc. 26,077 1,054,489
Commonwealth Telephone
Enterprises Inc. (Class B) (a) 58,833 2,397,445
Communications Systems Inc. 60,000 742,500
COMSAT Corporation 175,000 5,687,500
CoreComm Ltd. (a) 102,000 4,921,500
GST Telecommunications Inc. (a) 212,000 2,795,750
Omnipoint Corporation (a) 55,000 1,591,562
RCN Corporation (a) 86,000 3,579,750
Rogers Cantel Mobile
Communications Inc. (Class B)
(a) 47,000 772,562
Telephone and Data Systems Inc. 138,000 10,082,625
Teligent Inc. (Class A) (a) 12,000 717,750
------------
45,318,933
TRANSPORTATION -- 1.82%
GATX Corporation 207,700 7,905,581
TransPro Inc. 50,000 262,500
------------
8,168,081
TRAVEL/ENTERTAINMENT/LEISURE -- 0.82%
Hearst Argyle Television Inc. 35,000 840,000
TV Guide Inc. (Class A) (a) 78,000 2,856,750
------------
3,696,750
UTILITIES -- 1.29%
AGL Resources Inc. 10,000 184,375
Citizens Utilities Company
(Class B) (a) 390,000 4,338,750
Eastern Enterprises 28,000 1,113,000
Southwest Gas Corporation 5,000 143,125
------------
5,779,250
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
WASTE MANAGEMENT -- 0.05%
EnviroSource Inc. (a) 105,000 $ 223,125
WIRELESS COMMUNICATIONS -- 1.68%
Allen Telecom Inc. (a) 50,000 537,500
Price Communications Corporation
(a) 468,750 7,031,250
------------
7,568,750
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $348,520,398) 440,746,716
- ----------------------------------------------------------------------
U.S. TREASURY BILLS -- 1.72%
- ----------------------------------------------------------------------
U.S. Treasury Bill 4.51%
due 09/16/99 $1,962,000 1,943,074
U.S. Treasury Bill 4.54%
due 08/12/99 4,177,000 4,146,518
U.S. Treasury Bill 4.545%
due 09/16/99 1,645,000 1,629,008
------------
TOTAL U.S. TREASURY BILLS
(IDENTIFIED COST $7,718,600) 7,718,600
- ----------------------------------------------------------------------
REPURCHASE AGREEMENT -- 0.64%
- ----------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement, 4.25%
due 07/01/99
Collateral: U.S. Treasury Note $2,840,000,
7.125%, due 02/29/00
Value $3,007,999 2,880,000 2,880,000
------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $2,880,000) 2,880,000
- ----------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $359,118,998) $451,345,316
OTHER ASSETS LESS LIABILITIES -- (0.48)% (2,168,380)
------------
NET ASSETS 100% $449,176,936
======================================================================
</TABLE>
(a) Non-income producing security.
(d) Security is fair valued at June 30, 1999.
(ADR) American Depository Receipt.
See notes to financial statements.
151
<PAGE> 24
ENTERPRISE ACCUMULATION TRUST
INTERNATIONAL GROWTH PORTFOLIO
VONTOBEL USA INC.
NEW YORK, NY
Investment Management
Vontobel USA became Portfolio Manager on April 1, 1999. The firm manages
approximately $2 billion and its normal investment minimum is $10 million.
Investment Objective
The objective of the Enterprise International Growth Portfolio is to seek
capital appreciation.
Investment Strategies
The International Growth Portfolio invests primarily in non-U.S. equity
securities that the Portfolio Manager believes are undervalued. The Portfolio
Manager uses an approach that involves bottom-up stock selection. The Portfolio
Manager looks for companies that are good predictable businesses selling at
attractive prices relative to an estimate of intrinsic value. The Portfolio
Manager diversifies investments among European, Australian and Far East ("EAFE")
markets.
First Half 1999 Performance Review
Vontobel assumed management of the International Growth Portfolio on April
1, 1999. As of June 30, 1999, the portfolio has been completely restructured to
reflect Vontobel's investment philosophy. Hedge positions against the Euro and
the Swiss Franc have been opened to protect European investment returns in U.S.
Dollar terms.
A large number of positions were closed, and the total number of holdings
was reduced from over 200 to well under 100. This reflects the Vontobel policy
of bottom-up security selection that focuses on companies with attractive
fundamentals, offering high return on equity, consistent historical earnings
growth, low debt and high free cash flow. Additionally, the country allocation
shifted. All Canadian positions were closed, holdings in the European sector
were increased, and Pacific Rim holdings were reduced. Currently, there is a
very slight overweight versus the EAFE in Europe, a market-neutral posture in
Japan, and a modest underweight in the Pacific Rim.
The massive sell-off of securities necessary to align the portfolio with
Vontobel's current investment strategy had a negative impact on performance
early in the second quarter. Losses were sustained while unloading many
securities that did not meet Vontobel's investment criterion, largely due to
company fundamentals. As the quarter progressed, and the portfolio management
team was able to reap the rewards of holding positions that conform to current
investment outlook and philosophy, performance picked up in the later weeks of
the quarter.
Future Investment Strategy
Given the real interest rate climate in Europe, it is reasonable to believe
that the equity markets are currently undervalued. Vontobel thinks that as the
earnings currently coming through are higher than projected expectations,
revaluations will occur.
Major market sectors in Europe, such as finance, health care and
telecommunications should benefit from the current economic environment, with
rising rates, and a Euro-Dollar exchange rate that is continuing to be favorable
for Euroland exports. Vontobel's belief is that the Euro will test parity in the
coming months. Many restructurings and significant merger and acquisition
activity adds to what Vontobel believes is a positive climate for businesses in
the new Europe, spurring a continued overweighting in the European sector.
Japanese and the other Asian markets have been driven by liquidity for the
first six months of 1999, and Vontobel questions the sustainability of the
current rebound. Some restructuring has begun in Japan, but for the near-term
Vontobel
152
<PAGE> 25
projects a neutral exposure, as Vontobel still believes they provide attractive
investment opportunities. The majority of the Portfolio's Japanese holdings have
average earnings expectations of about 35 percent, and most are businesses with
large overseas markets.
As with all international funds, the International Growth Portfolio 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 Portfolio 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.
153
<PAGE> 26
ENTERPRISE ACCUMULATION TRUST
INTERNATIONAL GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 94.66% PRINCIPAL AMOUNT VALUE
- ----------------------------------------------------------------------
<S> <C> <C>
BELGIUM -- 0.64%
Barco 3,900 $ 627,571
DENMARK -- 0.50%
Bang & Olufsen Holdings (Class B) 7,600 481,604
FINLAND -- 1.79%
Nokia Corporation (ADR) (Class A) 11,600 1,062,125
Sampo Insurance Company
Ltd.(Class A) 23,400 677,825
-----------
1,739,950
FRANCE -- 11.85%
Altran Technologies 3,100 818,083
Axa 11,700 1,426,810
CGIP 21,600 1,044,293
Dassault Systemes 24,600 812,753
L'Oreal 1,500 1,013,584
Louis Vuitton Moet Hennessy 4,100 1,199,899
Louis Vuitton Moet Hennessy (Rts) 4,100 119,821
Scor 26,300 1,304,056
Societe Generale (Class A) 6,400 1,127,503
Total Fina (Class B) 11,900 1,534,616
Vivendi 14,072 1,139,456
-----------
11,540,874
GERMANY -- 3.51%
Allianz 2,800 776,437
BMW 1,300 893,850
Mannesmann 11,700 1,745,219
-----------
3,415,506
HONG KONG -- 2.46%
Dah Sing Financial Group 159,000 605,580
SmarTone Telecommunications
Holdings Ltd. 195,000 693,682
Sun Hung Kai Properties Ltd. 120,000 1,094,269
-----------
2,393,531
IRELAND -- 2.38%
Allied Irish Banks 73,900 978,473
CRH 27,400 485,374
Elan Corporation (ADR) (a) 30,600 849,150
-----------
2,312,997
ITALY -- 0.78%
Telecom Italia 73,100 759,580
JAPAN -- 20.18%
Bridgestone Corporation 45,000 1,361,494
Fuji Photo Film 27,000 1,022,237
Honda Motor Company Ltd. 23,000 975,366
Hoya Corporation 20,000 1,129,206
Mikuni Coca-Cola Bottling Company
Ltd. 19,000 386,377
Murata Manufacturing Company Ltd. 17,000 1,118,624
Nintendo Company Ltd. 12,000 1,687,360
NTT Data Corporation 134 1,065,620
NTT Mobile Communication Network
Inc. 34 460,941
NTT Mobile Communication Network
Inc. (a) 136 1,821,278
Rohm Company Ltd. 15,000 2,349,756
Sony Corporation 13,000 1,402,414
Takeda Chemical Industries 47,000 2,179,631
Tokyo Broadcasting System Inc. 35,000 506,324
Tokyo Electron Ltd. 22,000 1,493,097
Yasuda Fire & Marine Insurance
Company Ltd. 129,000 683,550
-----------
19,643,275
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
MALAYSIA -- 0.05%
Malayan Banking Berhad 9,000 $ 27,000
Nestle (Malaysia) Berhad 5,000 19,737
-----------
46,737
NETHERLANDS -- 9.62%
Aegon 16,000 1,184,000
Aegon (ADR) 19,400 1,406,894
ASM Lithography Holdings (a) 24,000 1,387,937
Getronics 17,500 672,888
Heineken 20,100 1,028,753
Hunter Douglas 21,268 730,073
Kempen & Company 14,000 699,947
Philips Electronics 13,184 1,299,953
Vendex KBB 35,900 958,495
-----------
9,368,940
SINGAPORE -- 2.45%
Jardine Strategic Holdings Ltd. 362,500 942,500
Singapore Press Holdings Ltd. 84,788 1,444,684
-----------
2,387,184
SPAIN -- 0.86%
Banco Popular Espanol 11,700 841,251
SWEDEN -- 6.48%
ABB (Class B) 87,700 1,162,239
Assa Abloy (Class B) 160,400 1,738,344
Assa Abloy (Rts) (Class B) 160,400 34,011
AstraZeneca Group 35,087 1,368,099
Hennes & Mauritz (Series B) 63,400 1,568,383
OM Gruppen 38,600 436,518
-----------
6,307,594
SWITZERLAND -- 10.66%
Credit Suisse Group 12,300 2,127,645
Nestle 700 1,260,819
Pharma Vision 2000 (a) 600 378,111
Roche Holdings 136 2,238,827
Roche Holdings Genusschein 223 2,291,518
Schweizerische
Rueckversicherungs-
Gesellschaft 600 1,142,049
Swisscom (a) 2,500 940,454
-----------
10,379,423
UNITED KINGDOM -- 20.45%
BP Amoco (ADR) 9,300 1,009,050
Capita Group 64,300 665,382
CGU 51,000 734,351
Compass Group 172,000 1,706,669
Diageo 46,000 483,263
Dixons Group 76,000 1,425,561
Hays 87,700 924,807
HSBC Holdings 45,600 1,615,795
Invensys 157,000 742,414
Lloyds TSB Group 75,600 1,026,602
Misys 116,400 996,272
Next 56,000 679,679
Provident Financial 49,100 674,875
Rentokil Initial 364,800 1,414,540
Schroders 36,000 726,336
Securicor 104,700 921,712
Smithkline Beecham 58,000 754,236
Tomkins 185,000 801,917
Vodafone AirTouch 72,500 1,426,191
WPP Group 139,200 1,178,473
-----------
19,908,125
-----------
TOTAL COMMON STOCKS
(IDENTIFIED COST $88,971,547) 92,154,142
- ----------------------------------------------------------------------
</TABLE>
154
<PAGE> 27
ENTERPRISE ACCUMULATION TRUST
INTERNATIONAL GROWTH PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
PREFERRED STOCK -- 1.80%
- ----------------------------------------------------------------------
GERMANY -- 1.80%
Sap 4,400 $ 1,757,600
-----------
TOTAL PREFERRED STOCK
(IDENTIFIED COST $1,393,219) 1,757,600
- ----------------------------------------------------------------------
CONVERTIBLE CORPORATE BOND -- 0.51%
- ----------------------------------------------------------------------
UNITED STATES -- 0.51%
Salomon Smith Barney Holdings
Inc. (Series H), 5.12% due
01/21/00 (v) $ 500,000 497,500
-----------
TOTAL CONVERTIBLE CORPORATE BOND
(IDENTIFIED COST $500,000) 497,500
-----------
REPURCHASE AGREEMENT -- 3.10%
- ----------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement, 4.25% due
07/01/99
Collateral: U.S. Treasury Note
$2,975,000, 7.125% due 02/29/00
Value $3,150,985 3,015,000 3,015,000
-----------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $3,015,000) 3,015,000
- ----------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST $93,879,766) $97,424,242
OTHER ASSETS LESS LIABILITIES -- (0.07)% (68,270)
-----------
NET ASSETS 100% $97,355,972
======================================================================
</TABLE>
(a) Non-income producing security.
(v) Variable interest rate security; interest rate is as of June 30, 1999, and
is adjusted monthly.
(Rts) Rights
(ADR) American Depository Receipt.
See notes to financial statements.
155
<PAGE> 28
ENTERPRISE ACCUMULATION TRUST
HIGH-YIELD BOND PORTFOLIO
CAYWOOD-SCHOLL CAPITAL MANAGEMENT
SAN DIEGO, CALIFORNIA
Investment Management
Caywood-Scholl manages approximately $1 billion for institutional clients,
and its normal investment minimum is $1 million.
Investment Objective
The objective of the Enterprise High-Yield Bond Portfolio is to seek
maximum current income.
Investment Strategies
The High-Yield Bond Portfolio 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 Portfolio's investments are
selected by the Portfolio 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 Portfolio 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
Portfolio does not purchase bonds which are rated Ca or lower by Moody's or CC
or lower by S&P or which, if unrated, in the judgement of the Portfolio Manager
have characteristics of such lower-grade bonds. Should an investment be
subsequently downgraded to Ca or lower or CC or lower, the Portfolio Manager has
discretion to hold or liquidate the security. Subject to the restrictions
described above, under normal circumstances, up to 20 percent of the Portfolio's
assets may include: (1) bonds rated Caa by Moody's or CCC by S&P; (2) unrated
debt securities which, in the judgement of the Portfolio Manager, have
characteristics similar to those described above; (3) convertible debt
securities; (4) puts, calls and futures as hedging devices; (5) foreign issuer
debt securities; and (6) short-term money market instruments, including
certificates of deposit, commercial paper, U.S. Government securities and other
income producing cash equivalents.
First Half 1999 Performance Review
Despite a modest rise in intermediate U.S. Treasury interest rates,
high-yield bonds have substantially outperformed most higher-grade fixed-income
sectors. The market's fundamentals continue to be overshadowed by weak
technicals. Demand for high-yield bonds, like most fixed-income securities, has
slackened due to investors' concern over rising U.S. Treasury rates. The good
news is high-yield valuations are attractive and fundamentals are sound. More
specifically, strong economic conditions have led to mostly positive earnings
reports for high-yield issuers. The pace of mergers and acquisitions continues
to benefit certain sectors of the market, such as telecommunications, due to the
positive event risk. Lastly, the bank loan market and the equity markets have
added liquidity to the marketplace, giving high-yield issuers financial
flexibility. The single troubling aspect of the market's fundamentals is the
increasing default rate which is reducing market liquidity for "problem"
companies.
Future Investment Strategy
The high economic growth rate, coupled with very low inflation is making
the fundamental case for high-yield bonds very compelling for upper tier
credits.
The Portfolio will remain broadly diversified with emphasis placed on
non-cyclical and higher growth industries such as telecommunications, cable and
media. As always, Caywood-Scholl will search for the best "risk adjusted
relative value" available in the marketplace.
The views expressed in this report reflect those of the Portfolio 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.
156
<PAGE> 29
ENTERPRISE ACCUMULATION TRUST
HIGH-YIELD BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
<TABLE>
<CAPTION>
CORPORATE BONDS, CONVERTIBLE
SECURITIES, COMMON & NUMBER OF SHARES OR
PREFERRED STOCKS -- 89.00% PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------
<S> <C> <C>
AEROSPACE -- 0.69%
BE Aerospace Inc.
9.50% due 11/01/08 $ 250,000 $ 252,500
Coltec Industries Inc.
7.50% due 04/15/08 600,000 600,000
------------
852,500
APPAREL & TEXTILES -- 0.75%
Fruit of the Loom Inc.
8.875% due 04/15/06 1,000,000 917,500
AUTOMOTIVE -- 2.26%
Avis Rent a Car Inc.
11.00% due 05/01/09 1,000,000 1,001,250
Budget Group Inc.
9.125% due 04/01/06 750,000 701,250
Lear Corporation
7.96% due 05/15/05 500,000 483,750
Sonic Automotive Inc. (Series
B)
11.00% due 08/01/08 600,000 592,500
------------
2,778,750
BANKING -- 1.59%
Bay View Capital Corporation
9.125% due 08/15/07 550,000 518,375
DVI Inc.
9.875% due 02/01/04 200,000 194,500
Imperial Credit Industries
Inc. (Series B),
9.875% due 01/15/07 550,000 438,625
Western Financial Savings
BankOrange California,
8.50% due 07/01/03 900,000 803,250
------------
1,954,750
BROADCASTING -- 5.25%
Allbritton Communications
Company (Series B),
8.875% due 02/01/08 450,000 437,625
Chancellor Media Corporation
9.00% due 10/01/08 1,000,000 1,020,000
Chancellor Media Corporation
(Series B),
8.125% due 12/15/07 500,000 486,250
Fox Family Worldwide Inc.
0% due 11/01/07 (c) 750,000 473,437
Fox Family Worldwide Inc.
9.25% due 11/01/07 750,000 695,625
Fox/Liberty Networks LLC
0% due 08/15/07 (c) 2,700,000 2,143,125
Rogers Communications Inc.
8.875% due 07/15/07 500,000 503,750
Rogers Communications Inc.
9.125% due 01/15/06 200,000 203,500
Sinclair Broadcast Group Inc.
8.75% due 12/15/07 500,000 490,000
------------
6,453,312
BUILDING & CONSTRUCTION -- 3.77%
American Standard Inc.
7.375% due 02/01/08 2,100,000 1,974,000
Building Materials Corporation
America (Series B),
7.75% due 07/15/05 550,000 521,125
Building Materials Corporation
America (Series B),
8.00% due 10/15/07 400,000 382,500
Nortek Inc.
8.875% due 08/01/08 400,000 410,000
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
---------------- -----
<S> <C> <C>
Nortek Inc.
(Series B)
9.125% due 09/01/07 $ 900,000 $ 895,500
Republic Group Inc.
9.50% due 07/15/08 450,000 448,875
------------
4,632,000
BUSINESS SERVICES -- 3.08%
CEX Holdings Inc.
9.625% due 06/01/08 600,000 562,500
Group Maintenance America
Corporation,
9.75% due 01/15/09 850,000 839,375
Integrated Electric Services
Inc.,
9.375% due 02/01/09 1,400,000 1,375,500
United Rentals Inc.
8.80% due 08/15/08 750,000 735,937
United Rentals Inc. (Series B)
8.80% due 08/15/08 275,000 269,844
------------
3,783,156
CABLE -- 7.16%
Adelphia Communications
Corporation,
7.875% due 05/01/09 250,000 231,875
Adelphia Communications
Corporation (Series B),
9.25% due 10/01/02 100,000 101,250
Adelphia Communications
Corporation (Series B),
10.50% due 07/15/04 850,000 909,500
Bresnan Communications Group
0% due 02/01/09 (c) 400,000 260,500
Bresnan Communications Group
8.00% due 02/01/09 200,000 197,500
Century Communications
Corporation,
9.50% due 03/01/05 400,000 414,000
Century Communications
Corporation (Series B),
Zero Coupon due 01/15/08 850,000 381,438
Charter Communications
Holdings
8.25% due 04/01/07 1,975,000 1,891,062
Echostar Corporation
9.375% due 02/01/09 2,650,000 2,703,000
Mediacom LLC/Mediacom Capital
Corporation
(Series B),
8.50% due 04/15/08 550,000 543,125
Telewest Communications
0% due 04/15/09 (c) 1,750,000 1,165,937
------------
8,799,187
CHEMICALS -- 1.32%
Huntsman Polymers Corporation
11.75% due 12/01/04 250,000 271,250
Lyondell Chemical Company
9.625% due 05/01/07 650,000 666,250
PCI Chemicals Canada Inc.
9.25% due 10/15/07 350,000 296,625
Pioneer Americas Acquisition
Corporation (Series B),
9.25% due 06/15/07 450,000 385,875
------------
1,620,000
</TABLE>
157
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ENTERPRISE ACCUMULATION TRUST
HIGH-YIELD BOND PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
---------------- -----
<S> <C> <C>
COMMUNICATIONS -- 3.31%
Globalstar LP/Globalstar
Capital
10.75% due 11/01/04 $ 150,000 $ 100,125
Globalstar LP/Globalstar
Capital
11.375% due 02/15/04 1,000,000 687,500
Globalstar LP/Globalstar
Capital
11.50% due 06/01/05 $ 250,000 168,750
Globalstar Telecommunications
(Wts) (a) 450 21,066
Iridium World Communications
(Wts) (a) 250 125
Level 3 Communications Inc.
0% due 12/01/08 (c) $ 700,000 431,375
Level 3 Communications Inc.
9.125% due 05/01/08 1,325,000 1,305,125
Loral Space &
Communication Ltd.
0% due 01/15/07 (c) $1,100,000 584,375
Loral Space & Communication
Ltd. (Wts) (a) 600 5,136
Loral Space &
Communications Ltd.,
9.50% due 01/15/06 $ 450,000 392,625
Qwest Communications
International Inc. (Series
B),
0% due 02/01/08 (c) 500,000 373,125
------------
4,069,327
CONSUMER PRODUCTS -- 3.57%
Boyds Collection Ltd.
9.00% due 05/15/08 478,000 469,635
Chattem Inc. (Series B)
8.875% due 04/01/08 1,000,000 987,500
Corning Consumer Products
Company (Series B),
9.625% due 05/01/08 350,000 318,063
French Fragrances Inc. (Series
B),
10.375% due 05/15/07 350,000 354,812
French Fragrances Inc. (Series
D),
10.375% due 05/15/07 200,000 202,750
Revlon Consumer Products
Corporation,
8.625% due 02/01/08 350,000 326,375
Scotts Company
8.625% due 01/15/09 1,000,000 990,000
Sealy Mattress Company (Series
B),
0% due 12/15/07 (c) 1,150,000 743,187
------------
4,392,322
CONTAINERS/PACKAGING -- 3.19%
Huntsman Packaging Corporation
9.125% due 10/01/07 600,000 592,500
Owens Illinois Inc.
7.35% due 05/15/08 1,800,000 1,707,786
Owens Illinois Inc.
8.10% due 05/15/07 550,000 547,591
Printpack Inc. (Series B)
9.875% due 08/15/04 500,000 493,750
United States Can Corporation
(Series B),
10.125% due 10/15/06 550,000 580,937
------------
3,922,564
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
---------------- -----
<S> <C> <C>
CRUDE & PETROLEUM -- 0.73%
Clark Refining & Marketing
Inc.
8.875% due 11/15/07 $ 250,000 $ 213,438
Trizec Hahn Corporation
(Series B),
10.875% due 12/01/05 800,000 683,000
------------
896,438
ELECTRONICS -- 0.27%
Axiohm Transaction Solutions
9.75% due 10/01/07 500,000 328,750
ENERGY -- 2.26%
Calpine Corporation
7.75% due 04/15/09 1,850,000 1,766,750
CMS Energy Corporation
7.50% due 01/15/09 250,000 237,478
Nuevo Energy Company (Series
B)
8.875% due 06/01/08 250,000 240,000
Ocean Energy Inc. (Series B)
8.375% due 07/01/08 550,000 533,500
------------
2,777,728
ENTERTAINMENT & LEISURE -- 0.18%
AMF Bowling Inc.
Zero Coupon due 05/12/18 1,550,000 218,938
FINANCE -- 2.21%
PDVSA Finance Ltd. 9.375% due
11/15/07 650,000 629,129
RBF Finance Company
11.00% due 03/15/06 2,050,000 2,085,875
------------
2,715,004
FOOD & BEVERAGES & TOBACCO -- 1.51%
Canandaigua Brands Inc.
8.50% due 03/01/09 900,000 873,000
NBTY Inc. (Series B)
8.625% due 09/15/07 800,000 707,000
Twin Laboratories Inc.
10.25% due 05/15/06 260,000 276,250
------------
1,856,250
GAMING -- 3.01%
Boyd Gaming Corporation
9.50% due 07/15/07 750,000 748,125
Circus Circus Enterprises Inc.
9.25% due 12/01/05 1,000,000 1,015,000
Empress Entertainment Inc.
8.125% due 07/01/06 800,000 808,000
Mirage Resorts Inc.
6.75% due 08/01/07 200,000 187,536
Mohegan Tribal Gaming
Authority
8.75% due 01/01/09 450,000 444,375
Trump Atlantic City Associates
11.25% due 05/01/06 550,000 495,000
------------
3,698,036
HEALTH CARE -- 3.98%
Columbia/HCA Healthcare
Corporation,
6.91% due 06/15/05 700,000 634,676
Columbia/HCA Healthcare
Corporation,
7.00% due 07/01/07 500,000 435,425
Columbia/HCA Healthcare
Corporation,
7.15% due 03/30/04 300,000 282,234
</TABLE>
158
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ENTERPRISE ACCUMULATION TRUST
HIGH-YIELD BOND PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
---------------- -----
<S> <C> <C>
Columbia/HCA Healthcare
Corporation,
7.25% due 05/20/08 $ 250,000 $ 218,965
Dade International Inc.
(Series B),
11.125% due 05/01/06 350,000 378,437
Fisher Scientific
International Inc.,
9.00% due 02/01/08 $1,200,000 1,137,000
Fresenius Medical Care Capital
Trust (Preferred Stock) 150 148,500
Maxxim Medical Inc.
10.50% due 08/01/06 $ 650,000 697,125
PHP Healthcare Corporation
6.50% due 12/15/02 (b)(d) 550,000 5,500
Quest Diagnostics Inc.
10.75% due 12/15/06 600,000 660,750
Tenet Healthcare Corporation
8.125% due 12/01/08 300,000 288,657
------------
4,887,269
HOTELS & RESTAURANTS -- 2.45%
Foodmaker Corporation (Series
B)
9.75% due 11/01/03 250,000 258,168
Foodmaker Inc.
8.375% due 04/15/08 950,000 931,000
Hammon (John Q.) Hotels
8.875% due 02/15/04 250,000 232,500
Host Marriott LP
8.375% due 02/15/06 1,000,000 962,500
Perkins Family Restaurant
(Series B),
10.125% due 12/15/07 600,000 631,500
------------
3,015,668
MACHINERY -- 2.02%
Applied Power Inc.
8.75% due 04/01/09 1,000,000 967,500
Columbus McKinnon Corporation
8.50% due 04/01/08 500,000 486,250
Navistar International
Corporation (Series B),
8.00% due 02/01/08 1,000,000 1,035,000
------------
2,488,750
MEDICAL SERVICES -- 1.36%
Quest Diagnostic Inc.
9.875% due 07/01/09 750,000 753,750
Triad Hospitals Holdings Inc.
11.00% due 05/15/09 900,000 915,750
------------
1,669,500
METALS & MINING -- 2.68%
AK Steel Corporation
7.875% due 02/15/09 1,500,000 1,451,250
AK Steel Corporation
9.125% due 12/15/06 450,000 462,375
Kaiser Aluminum & Chemical
Corporation (Series D),
10.875% due 10/15/06 250,000 260,625
Oregon Steel Mills Inc.
11.00% due 06/15/03 250,000 265,625
WCI Steel Inc. (Series B)
10.00% due 12/01/04 700,000 712,250
WHX Corporation
10.50% due 04/15/05 150,000 142,125
------------
3,294,250
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
---------------- -----
<S> <C> <C>
OIL SERVICES -- 0.56%
Gulf Canada Resources Ltd.
8.375% due 11/15/05 $ 700,000 $ 694,750
PAPER & FOREST PRODUCTS -- 1.27%
Buckeye Cellulose Corporation
8.50% due 12/15/05 550,000 554,125
Buckeye Technologies Inc.
8.00% due 10/15/10 650,000 628,875
SD Warren Company (Series B)
12.00% due 12/15/04 350,000 377,125
------------
1,560,125
PHARMACEUTICALS -- 1.76%
Biovail Corporation
International New,
10.875% due 11/15/05 1,100,000 1,126,125
King Pharmaceutical Inc.
10.75% due 02/15/09 1,000,000 1,032,500
------------
2,158,625
PRINTING & PUBLISHING -- 1.84%
Nebraska Book Company Inc.
8.75% due 02/15/08 650,000 598,813
TV Guide Inc.
8.125% due 03/01/09 1,750,000 1,658,125
------------
2,256,938
REAL ESTATE -- 0.62%
Crown Castle International
Corporation,
0% due 11/15/07 (c) 1,100,000 763,125
RESTAURANTS -- 0.17%
CKE Restaurants Inc.
9.125% due 05/01/09 225,000 215,100
RETAIL -- 1.94%
Charming Shoppes Inc.
7.50% due 07/15/06 350,000 350,437
Cole National Group Inc.
8.625% due 08/15/07 850,000 788,375
Michaels Stores Inc.
6.75% due 01/15/03 (c) 75,000 76,969
Nine West Group Inc.
5.50% due 07/15/03 150,000 150,188
Randalls Food Markets Inc.
(Series B),
9.375% due 07/01/07 950,000 1,014,125
------------
2,380,094
TELECOMMUNICATIONS -- 14.23%
21st Century Telecom Group
Inc. 0% due 02/15/08 (c) 850,000 358,063
CCPR Services Inc.
10.00% due 02/01/07 650,000 718,250
Crown Castle International
Corporation,
9.00% due 05/15/11 $ 400,000 392,000
E. Spire Communications Inc.
(Wts) (a) 300 17,230
Firstworld Communications Inc.
0% due 04/15/08 (c) $ 300,000 162,375
Firstworld Communications Inc.
(Wts)(a)(d) 300 --
Flag Ltd.
8.25% due 01/30/08 $1,050,000 989,625
Global Crossings Holdings Ltd.
9.625% due 05/15/08 400,000 425,000
ICG Holdings Inc.
0% due 05/01/06 (c) 700,000 559,125
</TABLE>
159
<PAGE> 32
ENTERPRISE ACCUMULATION TRUST
HIGH-YIELD BOND PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
---------------- -----
<S> <C> <C>
ICG Services Inc.
0% due 02/15/08 (c) $ 250,000 $ 157,500
ICO Global Communication
15.00% due 08/01/05 200,000 82,000
Intermedia Communications Inc.
(Series B),
0% due 07/15/07 (c) 250,000 178,437
Intermedia Communications Inc.
(Series B),
8.50% due 01/15/08 575,000 526,125
McLeodUSA Inc.
0% due 03/01/07 (c) 1,000,000 761,250
McLeodUSA Inc.
8.125% due 02/15/09 1,000,000 937,500
Metromedia Fiber Network Inc.
10.00% due 11/15/08 350,000 359,625
Metronet Communications
Corporation,
0% due 11/01/07 (c) $ 500,000 401,250
Metronet Communications
Corporation (Wts) (a) 100 10,898
Nextel Communications Inc.
0% due 09/15/07 (c) $2,900,000 2,061,125
Nextlink Communications Inc.
0% due 04/15/08 (c) 1,200,000 697,500
Nextlink Communications Inc.
10.75% due 11/15/08 750,000 768,750
Omnipoint Corporation (Series
A)
11.625% due 08/15/06 200,000 206,500
Orange
8.00% due 08/01/08 $1,250,000 1,193,750
Pagemart Nationwide Inc. 875 6,617
Panamsat Corporation
6.375% due 01/15/08 $1,000,000 916,930
Pathnet Inc.
12.25% due 04/15/08 $ 250,000 144,375
Pathnet Inc. (Wts.)(a)(d) 250 --
RCN Corporation
0% due 10/15/07 (c) $ 800,000 537,000
RCN Corporation (Series B)
0% due 02/15/08 (c) 650,000 411,938
Rogers Cantel Inc.
8.80% due 10/01/07 850,000 858,500
Sprint Spectrum LP
0% due 08/15/06 (c) 450,000 407,250
Telecorp PCS Inc.
0% due 04/15/09 (c) 1,000,000 558,750
Teligent Inc.
11.50% due 12/01/07 250,000 256,250
Winstar Communications Inc.
10.00% due 03/15/08 850,000 750,125
Winstar Equipment Corporation
12.50% due 03/15/04 650,000 679,250
------------
17,490,863
TEXTILES -- 4.04%
Phillips Van Heusen
Corporation
9.50% due 05/01/08 900,000 901,125
Pillowtex Corporation (Series
B)
9.00% due 12/15/07 350,000 336,875
Polymer Group Inc. (Series B)
8.75% due 03/01/08 250,000 241,875
Polymer Group Inc. (Series B)
9.00% due 07/01/07 600,000 586,500
Westpoint Stevens Inc.
7.875% due 06/15/08 2,450,000 2,370,375
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
---------------- -----
<S> <C> <C>
William Carter Company (Series
A),
10.375% due 12/01/06 $ 500,000 $ 523,750
------------
4,960,500
TRANSPORTATION -- 1.22%
Eletson Holdings Inc.
9.25% due 11/15/03 350,000 333,375
Northwest Airlines Inc.
8.52% due 04/07/04 1,000,000 977,900
TBS Shipping International
Ltd.
10.00% due 05/01/05 (b) 550,000 191,125
------------
1,502,400
TRAVEL/ENTERTAINMENT/LEISURE -- 0.20%
International Game Technology
7.875% due 05/15/04 250,000 245,000
UTILITIES -- 1.08%
Aes Corporation
9.50% due 06/01/09 750,000 770,625
Cogentrix Energy Inc.
8.75% due 10/15/08 150,000 151,875
Ferrellgas Partners LP (Series
B),
9.375% due 06/15/06 300,000 299,250
Midland Funding Corporation
(Series C-94),
10.33% due 07/23/02 101,961 107,696
------------
1,329,446
WASTE MANAGEMENT -- 1.06%
Allied Waste North America
7.625% due 01/01/06 700,000 651,000
Allied Waste North America
7.875% due 01/01/09 700,000 648,375
------------
1,299,375
WIRELESS COMMUNICATIONS -- 0.41%
Clearnet Communications Inc.
0% due 05/01/09 (c) 900,000 507,375
------------
TOTAL CORPORATE BONDS, CONVERTIBLE
SECURITIES, COMMON & PREFERRED STOCKS
(IDENTIFIED COST $114,430,647) 109,385,665
- --------------------------------------------------------------------
FOREIGN BONDS -- 6.02%
- --------------------------------------------------------------------
APPAREL & TEXTILES -- 0.18%
Reliance Industries Ltd.
8.25% due 01/15/27 250,000 223,935
BASIC INDUSTRIES -- 1.13%
Cemex 12.75% due 07/15/06 900,000 1,019,250
Cemex International Capital
Inc. 9.66% due 12/29/49 400,000 371,000
------------
1,390,250
BROADCASTING -- 1.21%
Grupo Televisa (Series A)
11.375% due 05/15/03 450,000 459,414
Grupo Televisa
11.875% due 05/15/06 350,000 359,625
Satelites Mexicanos
10.125% due 11/01/04 650,000 518,375
TV Azteca
10.50% due 02/15/07 200,000 152,500
------------
1,489,914
</TABLE>
160
<PAGE> 33
ENTERPRISE ACCUMULATION TRUST
HIGH-YIELD BOND PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
---------------- -----
<S> <C> <C>
CONTAINERS/PACKAGING -- 0.75%
Viacap
11.375% due 05/15/07 $1,000,000 $ 920,250
ENERGY -- 0.61%
Petroleos Mexicanos
8.85% due 09/15/07 250,000 222,500
YPF Sociedad Anonima
9.125% due 02/24/09 500,000 527,010
------------
749,510
GOVERNMENT BOND -- 1.65%
Republic of Argentina
12.125% due 02/25/19 250,000 224,688
Republic of Argentina Global
(Series BGL4),
11.00% due 10/09/06 1,000,000 928,750
Republic of Turkey
10.00% due 09/19/07 200,000 184,068
United Mexican States
8.625% due 03/12/08 450,000 416,250
United Mexican States
10.375% due 02/17/09 250,000 265,937
------------
2,019,693
PAPER & FOREST PRODUCTS -- 0.38%
Indah Kiat Finance Mauritius
Ltd.,
10.00% due 07/01/07 250,000 174,375
Indah Kiat International
Finance Co. (Series B),
11.875% due 06/15/02 100,000 82,905
Pindo Deli Finance Mauritius
Ltd.,
10.75% due 10/01/07 300,000 210,750
------------
468,030
TRANSPORTATION -- 0.11%
TFM
10.25% due 06/15/07 150,000 130,125
------------
TOTAL FOREIGN BONDS
(IDENTIFIED COST $7,951,264) 7,391,707
- --------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
---------------- -----
<S> <C> <C>
U.S. TREASURY NOTES -- 1.20%
- --------------------------------------------------------------------
U.S. Treasury Note
4.50% due 01/31/01 $1,000,000 $ 985,580
U.S. Treasury Note
5.50% due 05/15/09 500,000 489,225
------------
TOTAL U.S. TREASURY NOTES
(IDENTIFIED COST $1,477,199) 1,474,805
- --------------------------------------------------------------------
REPURCHASE AGREEMENT -- 2.38%
- --------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement,
4.25% due 07/01/99
Collateral: U.S. Treasury
Note $2,890,000,
7.125% due 02/29/00
Value $3,060,957 2,930,000 2,930,000
------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $2,930,000 ) 2,930,000
- --------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $126,789,110) $121,182,177
OTHER ASSETS LESS LIABILITIES -- 1.40% 1,721,497
------------
NET ASSETS 100% $122,903,674
====================================================================
</TABLE>
(a) Non-income producing security.
(b) In bankruptcy; Portfolio has ceased accrual of interest.
(c) Step Bond - Coupon increases periodically based upon predetermined schedule.
(d) Security is fair valued at June 30, 1999.
See notes to financial statements.
161
<PAGE> 34
ENTERPRISE ACCUMULATION TRUST
MANAGED PORTFOLIO
OPCAP ADVISORS, INC.
NEW YORK, NEW YORK
Investment Management
OpCap Advisors, a wholly owned subsidiary of Oppenheimer Capital, became
Portfolio Manager to the Enterprise Managed Portfolio on October 1, 1994.
Oppenheimer Capital manages approximately $60 billion for institutional clients,
and its normal investment minimum is $20 million.
Investment Objective
The objective of the Enterprise Managed Portfolio is to seek growth of
capital over time.
Investment Strategies
The Managed Portfolio invests in a diversified portfolio of common stocks,
bonds and cash equivalents. The allocation of the Portfolio's assets among the
different types of permitted investments will vary from time to time based upon
the Portfolio Manager's evaluation of economic and market trends and its
perception of the relative values available from such types of securities at any
given time. There is neither a minimum nor a maximum percentage of the
Portfolio's assets that may, at any given time, be invested in any specific
types of investments. However, the Portfolio invests primarily in equity
securities at times when the Portfolio Manager believes that the best investment
values are available in the equity markets. The Portfolio may invest almost all
of its assets in high-quality short-term money market and cash equivalent
securities when the Portfolio Manager deems it advisable to preserve capital.
Consequently, while the Portfolio will earn income to the extent it is invested
in bonds or cash equivalents, the Portfolio does not have any specific income
objective. The bonds in which the Portfolio may invest will normally be
investment grade intermediate to long-term U.S. Government and corporate debt.
First Half 1999 Performance Review
Value stocks came back to life in the first half of 1999. Value stocks
include those judged to be trading at market prices well below the inherent
value of the business, while growth stocks include those believed to have
excellent long-term earnings growth prospects. After an extended period in which
stock market gains were driven by a limited number of technology and large-cap
growth issues, market leadership broadened to include undervalued stocks with
strong business fundamentals of the type owned by the Portfolio.
Despite their gains in the second quarter, the types of value stocks in
which the Portfolio invests continue to trade at a significant discount to
large-cap growth stocks and the market in general. OpCap believes this bodes
well for its value style in the months ahead.
Future Investment Strategy
OpCap continues to look for -- and find -- great companies with strong,
sustainable cash flows; high competitive barriers; and rational managements with
proven track records who are dedicated to shareholder value.
OpCap believes a long-term perspective and emphasis on buying superior
undervalued businesses provide a competitive advantage as the market moves away
from highly priced growth stocks toward a renewed recognition of the enduring
value of a company's earnings, cash flow and competitiveness.
The views expressed in this report reflect those of the Portfolio 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.
162
<PAGE> 35
ENTERPRISE ACCUMULATION TRUST
MANAGED PORTFOLIO
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 84.23% PRINCIPAL AMOUNT VALUE
- ----------------------------------------------------------------------
<S> <C> <C>
AEROSPACE -- 3.74%
Boeing Company 1,989,600 $ 87,915,450
United Technologies
Corporation 200,000 14,337,500
--------------
102,252,950
BANKING -- 9.61%
BankBoston Corporation 930,000 47,546,250
M & T Bank Corporation 117,000 64,350,000
Wells Fargo & Company 3,530,000 150,907,500
--------------
262,803,750
BROADCASTING -- 6.89%
Chancellor Media Corporation
(a) 575,600 31,729,950
News Corporation Ltd. (ADR) 2,678,800 84,549,625
Time Warner Inc. 980,300 72,052,050
--------------
188,331,625
CHEMICALS -- 6.11%
Du Pont (E. I.) De Nemours &
Company 1,650,000 112,715,625
Monsanto Company 1,380,000 54,423,750
--------------
167,139,375
COMPUTER HARDWARE -- 1.29%
Compaq Computer Corporation 1,485,000 35,175,938
COMPUTER SOFTWARE -- 4.89%
Cadence Design Systems Inc.
(a) 1,109,300 14,143,575
Computer Associates
International Inc. 2,175,000 119,625,000
--------------
133,768,575
CONGLOMERATES -- 4.69%
Minnesota Mining &
Manufacturing Company 1,050,000 91,284,375
Textron Inc. 450,000 37,040,625
--------------
128,325,000
CONSUMER PRODUCTS -- 0.58%
Mattel Inc. 600,000 15,862,500
ELECTRICAL EQUIPMENT -- 0.23%
Emerson Electric Company 100,000 6,287,500
FINANCE -- 8.58%
Citigroup Inc. 3,843,750 182,578,125
Household International Inc. 1,100,000 52,112,500
--------------
234,690,625
FOOD & BEVERAGES & TOBACCO -- 3.10%
Diageo (ADR) 1,968,800 84,658,400
HOTELS & RESTAURANTS -- 6.34%
McDonald's Corporation 4,200,000 173,512,500
INSURANCE -- 1.46%
ACE Ltd. 1,416,500 40,016,125
MACHINERY -- 2.57%
Caterpillar Inc. 1,173,000 70,380,000
MANUFACTURING -- 2.76%
Avery Dennison Corporation 50,000 3,018,750
ITT Industries Inc. 1,900,000 72,437,500
--------------
75,456,250
MISC. FINANCIAL
SERVICES -- 5.09%
Freddie Mac 2,400,000 139,200,000
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
PROPERTY-CASUALTY INSURANCE -- 2.83%
XL Capital Ltd. (Class A) 1,372,428 $ 77,542,182
PAPER & FOREST PRODUCTS -- 1.50%
Champion International
Corporation 854,500 40,909,188
PHARMACEUTICALS -- 2.10%
American Home Products
Corporation 997,000 57,327,500
PRINTING & PUBLISHING -- 1.72%
Donnelley (R. R.) & Sons
Company 1,271,200 47,113,850
REAL ESTATE -- 0.79%
Security Capital Group Inc.
(Class A) (a) 33,152 21,548,800
TELECOMMUNICATIONS -- 5.34%
Motorola Inc. 643,000 60,924,250
Sprint Corporation 1,610,200 85,038,687
--------------
145,962,937
TRANSPORTATION -- 2.02%
UAL Corporation (a) 850,000 55,250,000
--------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $1,670,447,010) 2,303,515,570
- ----------------------------------------------------------------------
U.S. TREASURY NOTES -- 5.79%
- ----------------------------------------------------------------------
U.S. Treasury Note 6.50% due
05/15/05 $150,000,000 154,230,000
U.S. Treasury Note 7.875% due
08/15/01 3,952,500 4,126,647
--------------
TOTAL U.S. TREASURY NOTES
(IDENTIFIED COST $163,612,150) 158,356,647
- ----------------------------------------------------------------------
COMMERCIAL PAPER -- 8.21%
- ----------------------------------------------------------------------
Ford Motor Credit Company
5.13% due 08/02/99 50,000,000 49,772,000
General Motors Acceptance
Corporation, 4.76% due
07/06/99 50,000,000 49,966,944
Morgan Stanley Dean Witter
4.79% due 07/06/99 25,000,000 24,983,368
Prudential Funding Corporation
4.85% due 07/14/99 50,000,000 49,912,431
IBM Credit Corporation 5.00%
due 07/23/99 50,000,000 49,847,222
--------------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $224,481,965) 224,481,965
- ----------------------------------------------------------------------
SHORT-TERM GOVERNMENT SECURITIES -- 1.09%
- ----------------------------------------------------------------------
Federal National Mortgage
Association Discount Note,
4.76% due 07/16/99 30,000,000 29,940,500
--------------
TOTAL SHORT-TERM GOVERNMENT SECURITIES
(IDENTIFIED COST $29,940,500) 29,940,500
- ----------------------------------------------------------------------
</TABLE>
163
<PAGE> 36
ENTERPRISE ACCUMULATION TRUST
MANAGED PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
REPURCHASE AGREEMENT -- 0.37%
- ----------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement, 4.25%
due 07/01/99
Collateral: U.S. Treasury
Note $9,745,000, 8.75% due
08/15/00
Value $10,719,840 $ 10,195,000 $ 10,195,000
--------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $10,195,000) 10,195,000
- ----------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $2,098,676,625) $2,726,489,682
OTHER ASSETS LESS LIABILITIES -- 0.31% 8,359,419
--------------
NET ASSETS 100% $2,734,849,101
======================================================================
</TABLE>
(a) Non-income producing security.
(ADR) American Depository Receipt.
See notes to financial statements.
164
<PAGE> 37
(This page intentionally left blank)
165
<PAGE> 38
ENTERPRISE ACCUMULATION TRUST
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 1999
<TABLE>
<CAPTION>
GROWTH AND
GROWTH INCOME EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO
------------ --------------- ------------
<S> <C> <C> <C>
ASSETS:
Investments, at value....................................... $118,176,599 $31,476,692 $662,626,428
Receivable for investments sold............................. -- -- 3,104,211
Receivable for fund shares sold............................. 2,139,922 434,710 632,876
Dividends and interest receivable........................... 61,423 8,911 583,506
Due from investment adviser................................. -- -- --
Forward currency contracts (net) receivable................. -- -- --
Cash and other assets....................................... 3,249 1,513 2,008,592
------------ ----------- ------------
Total assets...................................... 120,381,193 31,921,826 668,955,613
------------ ----------- ------------
LIABILITIES:
Payable for investments purchased........................... 4,067,482 559,362 4,696,296
Payable for fund shares redeemed............................ 158,533 4,717 484,935
Investment advisory fees payable............................ 60,622 15,926 423,847
Accrued expenses and other liabilities...................... 29,981 18,370 211,359
------------ ----------- ------------
Total liabilities................................. 4,316,618 598,375 5,816,437
------------ ----------- ------------
NET ASSETS................................... 116,064,575 31,323,451 663,139,176
============ =========== ============
NET ASSETS:
Paid-in capital............................................. 111,907,291 28,701,153 425,072,852
Undistributed (accumulated) net investment income (loss).... 117,920 62,151 11,217,435
Undistributed (accumulated) net realized gain (loss) on
investments and futures................................... (422,274) (9,835) 74,101,006
Unrealized appreciation (depreciation) on investments and
foreign currency denominated amounts...................... 4,461,638 2,569,982 152,747,883
------------ ----------- ------------
TOTAL NET ASSETS............................. $116,064,575 $31,323,451 $663,139,176
============ =========== ============
Fund shares outstanding..................................... 19,825,108 5,197,049 16,601,197
------------ ----------- ------------
Net asset value per share................................... $5.85 $6.03 $39.95
===== ===== ======
INVESTMENTS AT COST......................................... $113,714,961 $28,906,710 $509,878,545
</TABLE>
See notes to financial statements.
166
<PAGE> 39
<TABLE>
<CAPTION>
CAPITAL SMALL COMPANY SMALL COMPANY INTERNATIONAL HIGH-YIELD
EQUITY INCOME APPRECIATION GROWTH VALUE GROWTH BOND MANAGED
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------ ------------- ------------- ------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>
$13,888,469 $12,401,363 $5,798,698 $451,345,316 $97,424,242 $121,182,177 $2,726,489,682
-- 234,720 150,966 81,942 458,971 458,396 --
201,969 165,185 27,618 605,817 500,780 216,272 1,744,045
16,046 1,780 -- 178,638 166,049 2,711,331 2,428,035
994 -- 1,619 -- -- -- --
-- -- -- -- 378,055 -- --
1,115,221 2,261 828 5,827 8,305 2,839 8,476,247
----------- ----------- ---------- ------------ ----------- ------------ --------------
15,222,699 12,805,309 5,979,729 452,217,540 98,936,402 124,571,015 2,739,138,009
----------- ----------- ---------- ------------ ----------- ------------ --------------
960,088 121,755 63,572 1,882,957 1,323,775 1,348,151 --
2,360 34,326 24,014 717,237 81,452 197,681 1,746,966
6,702 6,145 3,631 288,410 66,581 60,249 1,614,257
15,485 14,838 12,925 152,000 108,622 61,260 927,685
----------- ----------- ---------- ------------ ----------- ------------ --------------
984,635 177,064 104,142 3,040,604 1,580,430 1,667,341 4,288,908
----------- ----------- ---------- ------------ ----------- ------------ --------------
14,238,064 12,628,245 5,875,587 449,176,936 97,355,972 122,903,674 2,734,849,101
=========== =========== ========== ============ =========== ============ ==============
13,664,352 11,884,315 5,107,508 296,526,713 84,124,314 128,596,276 1,551,869,307
1,251 (12,882) (10,614) 2,524,302 1,392,390 -- 63,514,213
(19,091) (16,047) 29,473 57,899,603 7,907,742 (85,669) 491,652,524
591,552 772,859 749,220 92,226,318 3,931,526 (5,606,933) 627,813,057
----------- ----------- ---------- ------------ ----------- ------------ --------------
$14,238,064 $12,628,245 $5,875,587 $449,176,936 $97,355,972 $122,903,674 $2,734,849,101
=========== =========== ========== ============ =========== ============ ==============
2,518,830 2,058,053 938,085 14,414,634 14,225,390 23,414,570 62,753,015
----------- ----------- ---------- ------------ ----------- ------------ --------------
$5.65 $6.14 $6.26 $31.16 $6.84 $5.25 $43.58
====== ====== ======= ======= ====== ===== ======
$13,296,917 $11,628,504 $5,049,478 $359,118,998 $93,879,766 $126,789,110 $2,098,676,625
</TABLE>
See notes to financial statements.
167
<PAGE> 40
ENTERPRISE ACCUMULATION TRUST
STATEMENTS OF OPERATIONS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 1999
<TABLE>
<CAPTION>
GROWTH
GROWTH AND INCOME EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO
---------- ---------- -----------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............................................. $ 145,933 $ 48,852(1) $ 4,175,068(1)
Interest............................................... 177,906 75,109 1,445,550
---------- ---------- -----------
Total income...................................... 323,839 123,961 5,620,618
---------- ---------- -----------
EXPENSES:
Investment advisory fees............................... 171,599 44,150 2,469,230
Custodian and fund accounting fees..................... 14,054 7,033 44,993
Reports and notices to shareholders.................... 6,508 1,446 58,222
Trustees' fees and expenses............................ 2,753 2,761 2,512
Audit and legal fees................................... 10,030 7,916 17,445
Miscellaneous.......................................... 975 462 6,378
---------- ---------- -----------
Total expenses.................................... 205,919 63,768 2,598,780
---------- ---------- -----------
Less: Expense reimbursement.......................... -- (1,958) --
---------- ---------- -----------
Total expenses, net of expense reimbursement......... 205,919 61,810 2,598,780
---------- ---------- -----------
NET INVESTMENT INCOME (LOSS).................... 117,920 62,151 3,021,838
---------- ---------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET:
Net realized gain (loss) on investments................ (422,176) (10,057) 30,495,087
Net realized gain (loss) on foreign currency
transactions......................................... -- -- --
---------- ---------- -----------
Net realized gain (loss) on investments................ (422,176) (10,057) 30,495,087
Net change in unrealized gain (loss) on investments and
foreign currency related transactions................ 4,413,464 2,558,613 19,372,841
---------- ---------- -----------
Net realized and unrealized gain (loss) on
investments..................................... 3,991,288 2,548,556 49,867,928
---------- ---------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS...................................... $4,109,208 $2,610,707 $52,889,766
========== ========== ===========
</TABLE>
See notes to financial statements.
- --------------------------------------------------------------------------------
(1) Net of foreign taxes withheld of $333 for Growth and Income, $9,807 for
Equity, $129 for Equity Income, $123,204 for International Growth and
$144,921 for Managed, respectively.
168
<PAGE> 41
<TABLE>
<CAPTION>
CAPITAL SMALL COMPANY SMALL COMPANY INTERNATIONAL HIGH-YIELD
EQUITY INCOME APPRECIATION GROWTH VALUE GROWTH BOND MANAGED
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------ ------------- ------------- ------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 49,617(1) $ 4,540 $ 2,275 $ 1,710,365 $ 941,852(1) $ 9,000 $ 16,500,830(1)
4,685 12,574 3,200 322,492 62,416 5,418,154 10,987,794
-------- -------- -------- ----------- ----------- ----------- ------------
54,302 17,114 5,475 2,032,857 1,004,268 5,427,154 27,488,624
-------- -------- -------- ----------- ----------- ----------- ------------
19,021 17,306 11,492 1,674,337 397,673 355,750 9,763,570
7,823 4,503 6,065 44,894 90,281 25,870 167,749
656 628 341 38,429 8,478 11,324 243,068
2,762 2,762 2,763 2,187 802 865 10,484
7,881 7,877 7,865 13,254 6,890 12,346 62,669
462 462 462 4,519 901 797 31,427
-------- -------- -------- ----------- ----------- ----------- ------------
38,605 33,538 28,988 1,777,620 505,025 406,952 10,278,967
-------- -------- -------- ----------- ----------- ----------- ------------
(11,975) (3,542) (12,899) -- -- -- --
-------- -------- -------- ----------- ----------- ----------- ------------
26,630 29,996 16,089 1,777,620 505,025 406,952 10,278,967
-------- -------- -------- ----------- ----------- ----------- ------------
27,672 (12,882) (10,614) 255,237 499,243 5,020,202 17,209,657
-------- -------- -------- ----------- ----------- ----------- ------------
(19,091) (15,819) 30,326 31,452,141 10,952,848 (1,156,979) 104,629,952
-- -- -- -- (3,356,491) -- --
-------- -------- -------- ----------- ----------- ----------- ------------
(19,091) (15,819) 30,326 31,452,141 7,596,357 (1,156,979) 104,629,952
585,180 734,691 715,969 23,811,524 (6,670,492) (2,026,793) 72,546,282
-------- -------- -------- ----------- ----------- ----------- ------------
566,089 718,872 746,295 55,263,665 925,865 (3,183,772) 177,176,234
-------- -------- -------- ----------- ----------- ----------- ------------
$593,761 $705,990 $735,681 $55,518,902 $ 1,425,108 $ 1,836,430 $194,385,891
======== ======== ======== =========== =========== =========== ============
</TABLE>
See notes to financial statements.
- --------------------------------------------------------------------------------
169
<PAGE> 42
ENTERPRISE ACCUMULATION TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
GROWTH PORTFOLIO GROWTH AND INCOME PORTFOLIO EQUITY PORTFOLIO
--------------------------- ---------------------------- ---------------------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31,
1999 1998 1999 1998 1999 1998
------------ ------------ ------------ ------------- ------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)... $ 117,920 $ (159) $ 62,151 $ (116) $ 3,021,838 $ 8,195,694
Net realized gain (loss) on
investments................. (422,176) (98) (10,057) 338 30,495,087 43,607,008
Net change in unrealized gain
(loss) on investments....... 4,413,464 48,174 2,558,613 11,369 19,372,841 (4,143,581)
------------ ---------- ----------- -------- ------------- -------------
Net increase in net assets
resulting from
operations................ 4,109,208 47,917 2,610,707 11,591 52,889,766 47,659,121
------------ ---------- ----------- -------- ------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS:
Net investment income.......... -- -- -- -- -- (5,906,264)
Net realized gains............. -- -- -- -- -- (21,596,997)
------------ ---------- ----------- -------- ------------- -------------
Total dividends and
distributions to
shareholders........... -- -- -- -- -- (27,503,261)
------------ ---------- ----------- -------- ------------- -------------
FUND SHARE TRANSACTIONS:
Net proceeds from sales........ 121,433,827 1,906,210 30,513,488 525,993 97,638,921 259,368,662
Reinvestment of dividends and
distributions............... -- -- -- -- -- 27,503,261
Cost of shares redeemed........ (11,421,915) (10,672) (2,338,232) (96) (108,727,167) (203,493,446)
------------ ---------- ----------- -------- ------------- -------------
Net increase in net assets
from fund share
transactions.............. 110,011,912 1,895,538 28,175,256 525,897 (11,088,246) 83,378,477
------------ ---------- ----------- -------- ------------- -------------
Total increase in net
assets................. 114,121,120 1,943,455 30,785,963 537,488 41,801,520 103,534,337
NET ASSETS:
Beginning of period............ 1,943,455 -- 537,488 -- 621,337,656 517,803,319
------------ ---------- ----------- -------- ------------- -------------
End of period.................. $116,064,575 $1,943,455 $31,323,451 $537,488 $ 663,139,176 $ 621,337,656
============ ========== =========== ======== ============= =============
SHARES ISSUED AND REDEEMED:
Issued......................... 21,479,709 371,167 5,505,552 105,232 2,598,088 7,038,795
Issued in reinvestment of
dividends and
distributions............... -- -- -- -- -- 749,816
Redeemed....................... (2,023,669) (2,099) (413,716) (19) (2,873,035) (5,670,766)
------------ ---------- ----------- -------- ------------- -------------
Net increase................ 19,456,040 369,068 5,091,836 105,213 (274,947) 2,117,845
============ ========== =========== ======== ============= =============
</TABLE>
See notes to financial statements.
170
<PAGE> 43
<TABLE>
<CAPTION>
SMALL COMPANY GROWTH
EQUITY INCOME PORTFOLIO CAPITAL APPRECIATION PORTFOLIO PORTFOLIO SMALL COMPANY VALUE PORTFOLIO
-------------------------- ------------------------------ -------------------------- ------------------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31,
1999 1998 1999 1998 1999 1998 1999 1998
----------- ------------ ------------- -------------- ----------- ------------ ------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 27,672 $ 127 $ (12,882) $ (234) $ (10,614) $ (327) $ 255,237 $ 2,269,126
(19,091) -- (15,819) (227) 30,326 (853) 31,452,141 25,594,861
585,180 6,372 734,691 38,168 715,969 33,251 23,811,524 1,607,587
----------- -------- ----------- -------- ---------- -------- ------------ -------------
593,761 6,499 705,990 37,707 735,681 32,071 55,518,902 29,471,574
----------- -------- ----------- -------- ---------- -------- ------------ -------------
(26,548) -- -- -- -- -- -- (1,050,835)
-- -- -- -- -- -- -- (24,299,778)
----------- -------- ----------- -------- ---------- -------- ------------ -------------
(26,548) -- -- -- -- -- -- (25,350,613)
----------- -------- ----------- -------- ---------- -------- ------------ -------------
13,884,717 458,517 12,597,101 473,649 5,316,372 436,953 68,274,155 176,919,909
26,548 -- -- -- -- -- -- 25,350,613
(705,368) (62) (1,186,102) (100) (645,350) (140) (81,417,240) (164,856,185)
----------- -------- ----------- -------- ---------- -------- ------------ -------------
13,205,897 458,455 11,410,999 473,549 4,671,022 436,813 (13,143,085) 37,414,337
----------- -------- ----------- -------- ---------- -------- ------------ -------------
13,773,110 464,954 12,116,989 511,256 5,406,703 468,884 42,375,817 41,535,298
464,954 -- 511,256 -- 468,884 -- 406,801,119 365,265,821
----------- -------- ----------- -------- ---------- -------- ------------ -------------
$14,238,064 $464,954 $12,628,245 $511,256 $5,875,587 $468,884 $449,176,936 $ 406,801,119
=========== ======== =========== ======== ========== ======== ============ =============
2,551,766 91,309 2,168,894 91,765 967,636 85,890 2,376,049 6,367,246
4,699 -- -- -- -- -- -- 967,950
(128,932) (12) (202,588) (18) (115,414) (27) (2,829,589) (6,146,963)
----------- -------- ----------- -------- ---------- -------- ------------ -------------
2,427,533 91,297 1,966,306 91,747 852,222 85,863 (453,540) 1,188,233
=========== ======== =========== ======== ========== ======== ============ =============
</TABLE>
See notes to financial statements.
171
<PAGE> 44
ENTERPRISE ACCUMULATION TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INTERNATIONAL GROWTH PORTFOLIO HIGH-YIELD BOND PORTFOLIO MANAGED PORTFOLIO
------------------------------- ------------------------------- ---------------------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31,
1999 1998 1999 1998 1999 1998
---------------- ------------ ---------------- ------------ ---------------- --------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 499,243 $ 895,906 $ 5,020,202 $ 7,113,860 $ 17,209,657 $ 46,304,587
Net realized gain (loss)
on investments....... 7,596,357 862,244 (1,156,979) 1,083,292 104,629,952 393,346,265
Net change in unrealized
gain (loss) on
investments.......... (6,670,492) 8,976,597 (2,026,793) (5,550,240) 72,546,282 (253,453,784)
------------ ------------ ------------ ------------ -------------- --------------
Net increase in net
assets resulting
from operations.... 1,425,108 10,734,747 1,836,430 2,646,912 194,385,891 186,197,068
------------ ------------ ------------ ------------ -------------- --------------
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS:
Net investment income... -- (956,997) (5,020,202) (7,113,860) -- (26,677,507)
Net realized gains...... -- (3,458,658) -- (1,380,937) -- (189,572,424)
------------ ------------ ------------ ------------ -------------- --------------
Total dividends and
distributions to
shareholders.... -- (4,415,655) (5,020,202) (8,494,797) -- (216,249,931)
------------ ------------ ------------ ------------ -------------- --------------
FUND SHARE TRANSACTIONS:
Net proceeds from
sales................ 24,688,788 33,682,098 39,578,334 53,781,245 271,548,125 828,656,136
Reinvestment of
dividends and
distributions........ -- 4,415,655 5,020,202 8,494,797 -- 216,249,931
Cost of shares
redeemed............. (20,552,140) (30,770,132) (20,376,044) (22,927,376) (470,389,823) (948,480,342)
------------ ------------ ------------ ------------ -------------- --------------
Net increase in net
assets from fund
share transactions... 4,136,648 7,327,621 24,222,492 39,348,666 (198,841,698) 96,425,725
------------ ------------ ------------ ------------ -------------- --------------
Total increase in
net assets...... 5,561,756 13,646,713 21,038,720 33,500,781 (4,455,807) 66,372,862
NET ASSETS:
Beginning of period..... 91,794,216 78,147,503 101,864,954 68,364,173 2,739,304,908 2,672,932,046
------------ ------------ ------------ ------------ -------------- --------------
End of period........... $ 97,355,972 $ 91,794,216 $122,903,674 $101,864,954 $2,734,849,101 $2,739,304,908
============ ============ ============ ============ ============== ==============
SHARES ISSUED AND
REDEEMED:
Issued.................. 3,662,306 5,053,178 7,311,852 9,618,868 6,499,337 19,612,770
Issued in reinvestment
of dividends and
distributions........ -- 680,379 938,420 1,543,662 -- 5,331,607
Redeemed................ (3,057,108) (4,760,079) (3,801,893) (4,163,250) (11,275,337) (22,958,015)
------------ ------------ ------------ ------------ -------------- --------------
Net increase......... 605,198 973,478 4,448,379 6,999,280 (4,776,000) 1,986,362
============ ============ ============ ============ ============== ==============
</TABLE>
See notes to financial statements.
172
<PAGE> 45
ENTERPRISE ACCUMULATION TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
A Annualized.
B Not annualized.
C Based on average monthly shares outstanding for the period.
<TABLE>
<CAPTION>
ENTERPRISE GROWTH PORTFOLIO ENTERPRISE GROWTH AND INCOME PORTFOLIO
------------------------------------- ---------------------------------------
(UNAUDITED) FOR THE PERIOD (UNAUDITED) FOR THE PERIOD
SIX MONTHS ENDED 12/01/98 THROUGH SIX MONTHS ENDED 12/01/98 THROUGH
JUNE 30, 1999 12/31/98 JUNE 30, 1999 12/31/98
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period.......................... $ 5.27 $ 5.00 $ 5.11 $ 5.00
-------- ------- ------- -------
Net investment income (loss)...... 0.01(C) -- 0.03(C) --
Net realized and unrealized gain
(loss) on investments........... 0.57 0.27 0.89 0.11
-------- ------- ------- -------
Total from investment
operations...................... 0.58 0.27 0.92 0.11
-------- ------- ------- -------
Dividends from net investment
income.......................... -- -- -- --
Distributions from net capital
gains........................... -- -- -- --
-------- ------- ------- -------
Total distributions............... -- -- -- --
-------- ------- ------- -------
Net asset value, end of period.... $ 5.85 $ 5.27 $ 6.03 $ 5.11
======== ======= ======= =======
Total return...................... 11.01%(B) 5.40%(B) 18.00%(B) 2.20%(B)
-------- ------- ------- -------
Net assets, end of period (000)... $116,065 $ 1,943 $31,323 $ 537
-------- ------- ------- -------
Ratio of expenses to average net
assets.......................... 0.90%(A) 1.15%(A) 1.05%(A) 1.05%(A)
-------- ------- ------- -------
Ratio of expenses (excluding
waivers) to average net
assets.......................... 0.90%(A) 25.33%(A) 1.08%(A) 60.68%(A)
-------- ------- ------- -------
Ratio of net investment income
(loss) to average net assets.... 0.52%(A) (0.25)%(A) 1.06%(A) (0.45)%(A)
-------- ------- ------- -------
Ratio of net investment income
(loss) (excluding waivers) to
average net assets.............. 0.52%(A) (24.43)%(A) 1.02%(A) (60.08)%(A)
-------- ------- ------- -------
Portfolio turnover................ 15% 1% 1% 9%
-------- ------- ------- -------
</TABLE>
<TABLE>
<CAPTION>
ENTERPRISE EQUITY PORTFOLIO
-----------------------------------------------------------------------------------
(UNAUDITED) YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED ---------------------------------------------------------------
JUNE 30, 1999 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period........ $ 36.82 $ 35.09 $ 28.86 $ 23.35 $ 18.14 $ 17.95
-------- -------- -------- -------- -------- -------
Net investment income (loss)................ 0.18(C) 0.46 0.30 0.37 0.33 0.28
Net realized and unrealized gain (loss) on
investments............................... 2.95 3.00 7.13 5.52 6.38 0.41
-------- -------- -------- -------- -------- -------
Total from investment operations............ 3.13 3.46 7.43 5.89 6.71 0.69
-------- -------- -------- -------- -------- -------
Dividends from net investment income........ -- (0.37) (0.32) (0.09) (0.49) (0.18)
Distributions from net capital gains........ -- (1.36) (0.88) (0.29) (1.01) (0.32)
-------- -------- -------- -------- -------- -------
Total distributions......................... -- (1.73) (1.20) (0.38) (1.50) (0.50)
-------- -------- -------- -------- -------- -------
Net asset value, end of period.............. $ 39.95 $ 36.82 $ 35.09 $ 28.86 $ 23.35 $ 18.14
======== ======== ======== ======== ======== =======
Total return................................ 8.50%(B) 9.90% 25.76% 25.22% 38.44% 3.87%
-------- -------- -------- -------- -------- -------
Net assets, end of period (000)............. $663,139 $621,338 $517,803 $314,907 $167,963 $88,583
-------- -------- -------- -------- -------- -------
Ratio of expenses to average net assets..... 0.83%(A) 0.83% 0.84% 0.81% 0.69% 0.67%
-------- -------- -------- -------- -------- -------
Ratio of expenses (excluding waivers) to
average net assets........................ 0.83%(A) 0.83% 0.84% 0.81% 0.72% 0.69%
-------- -------- -------- -------- -------- -------
Ratio of net investment income (loss) to
average net assets........................ 0.96%(A) 1.42% 1.42% 1.94% 1.94% 1.81%
-------- -------- -------- -------- -------- -------
Ratio of net investment income (loss)
(excluding waivers) to average net
assets.................................... 0.96%(A) 1.42% 1.42% 1.94% 1.91% 1.79%
-------- -------- -------- -------- -------- -------
Portfolio turnover.......................... 30% 30% 17% 30% 29% 38%
-------- -------- -------- -------- -------- -------
</TABLE>
See notes to financial statements.
173
<PAGE> 46
ENTERPRISE ACCUMULATION TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
A Annualized.
B Not annualized.
C Based on average monthly shares outstanding for the period.
<TABLE>
<CAPTION>
ENTERPRISE SMALL
ENTERPRISE CAPITAL COMPANY
ENTERPRISE EQUITY INCOME APPRECIATION GROWTH PORTFOLIO
------------------------ ---------------------- ----------------------
FOR THE (UNAUDITED) FOR THE (UNAUDITED) FOR THE
(UNAUDITED) PERIOD SIX MONTHS PERIOD SIX MONTHS PERIOD
SIX MONTHS 12/01/98 ENDED 12/01/98 ENDED 12/01/98
ENDED THROUGH JUNE 30, THROUGH JUNE 30, THROUGH
JUNE 30, 1999 12/31/98 1999 12/31/98 1999 12/31/98
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period..... $ 5.09 $ 5.00 $ 5.57 $ 5.00 $ 5.46 $ 5.00
-------- -------- -------- -------- -------- --------
Net investment income (loss)............. 0.03(C) -- (0.02)(C) -- (0.02)(C) --
Net realized and unrealized gain (loss)
on investments......................... 0.54 0.09 0.59 0.57 0.82 0.46
-------- -------- -------- -------- -------- --------
Total from investment operations......... 0.57 0.09 0.57 0.57 0.80 0.46
-------- -------- -------- -------- -------- --------
Dividends from net investment income..... (0.01) -- -- -- -- --
Distributions from net capital gains..... -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Total distributions...................... (0.01) -- -- -- -- --
-------- -------- -------- -------- -------- --------
Net asset value, end of period........... $ 5.65 $ 5.09 $ 6.14 $ 5.57 $ 6.26 $ 5.46
======== ======== ======== ======== ======== ========
Total return............................. 11.21%(B) 1.80%(B) 10.23%(B) 11.40%(B) 14.65%(B) 9.20%(B)
-------- -------- -------- -------- -------- --------
Net assets, end of period (000).......... $ 14,238 $ 465 $ 12,628 $ 511 $ 5,876 $ 469
-------- -------- -------- -------- -------- --------
Ratio of expenses to average net
assets................................. 1.05%(A) 1.05%(A) 1.30%(A) 1.30%(A) 1.40%(A) 1.40%(A)
-------- -------- -------- -------- -------- --------
Ratio of expenses (excluding waivers) to
average net assets..................... 1.52%(A) 66.67%(A) 1.45%(A) 63.71%(A) 2.52%(A) 60.67%(A)
-------- -------- -------- -------- -------- --------
Ratio of net investment income (loss) to
average net assets..................... 1.09%(A) 0.54%(A) (.56)%(A) (.95)%(A) (0.92)%(A) (1.26)%(A)
-------- -------- -------- -------- -------- --------
Ratio of net investment income (loss)
(excluding waivers) to average net
assets................................. 0.62%(A) (65.07)%(A) (.71)%(A) (63.36)%(A) (2.05)%(A) (60.54)%(A)
-------- -------- -------- -------- -------- --------
Portfolio turnover....................... 3% --% 31% 1% 22% 4%
-------- -------- -------- -------- -------- --------
</TABLE>
<TABLE>
<CAPTION>
ENTERPRISE SMALL COMPANY VALUE PORTFOLIO
------------------------------------------------------------------------
(UNAUDITED)
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED --------------------------------------------------------
JUNE 30, 1999 1998 1997 1996 1995 1994*
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period..... $ 27.36 $ 26.70 $ 20.22 $ 18.48 $ 17.56 $ 18.62
-------- -------- -------- -------- -------- --------
Net investment income (loss)............. 0.02(C) 0.16 0.05 0.25 0.32 0.19
Net realized and unrealized gain (loss)
on investments......................... 3.78 2.33 8.91 1.82 1.75 (0.16)
-------- -------- -------- -------- -------- --------
Total from investment operations......... 3.80 2.49 8.96 2.07 2.07 0.03
-------- -------- -------- -------- -------- --------
Dividends from net investment income..... -- (0.08) (0.15) (0.12) (0.40) (0.10)
Distributions from net capital gains..... -- (1.75) (2.33) (0.21) (0.75) (0.99)
-------- -------- -------- -------- -------- --------
Total distributions...................... -- (1.83) (2.48) (0.33) (1.15) (1.09)
-------- -------- -------- -------- -------- --------
Net asset value, end of period........... $ 31.16 $ 27.36 $ 26.70 $ 20.22 $ 18.48 $ 17.56
======== ======== ======== ======== ======== ========
Total return............................. 13.89%(B) 9.61% 44.32% 11.21% 12.28% 0.02%
-------- -------- -------- -------- -------- --------
Net assets, end of period (000).......... $449,177 $406,801 $365,266 $192,704 $166,061 $144,880
-------- -------- -------- -------- -------- --------
Ratio of expenses to average net
assets................................. 0.85%(A) 0.85% 0.86% 0.84% 0.69% 0.66%
-------- -------- -------- -------- -------- --------
Ratio of expenses (excluding waivers) to
average net assets..................... 0.85%(A) 0.85% 0.86% 0.84% 0.72% 0.67%
-------- -------- -------- -------- -------- --------
Ratio of net investment income (loss) to
average net assets..................... 0.12%(A) 0.56% 0.21% 1.35% 1.86% 1.30%
-------- -------- -------- -------- -------- --------
Ratio of net investment income (loss)
(excluding waivers) to average net
assets................................. 0.12%(A) 0.56% 0.21% 1.35% 1.83% 1.29%
-------- -------- -------- -------- -------- --------
Portfolio turnover....................... 15% 37% 58% 137% 70% 58%
-------- -------- -------- -------- -------- --------
</TABLE>
See notes to financial statements.
174
<PAGE> 47
ENTERPRISE ACCUMULATION TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
A Annualized.
B Not annualized.
C Based on average monthly shares outstanding for the period.
<TABLE>
<CAPTION>
ENTERPRISE INTERNATIONAL GROWTH PORTFOLIO
-----------------------------------------------------------------------
(UNAUDITED)
SIX FOR THE PERIOD
MONTHS NOVEMBER 18,
ENDED YEAR ENDED DECEMBER 31, 1994-
JUNE 30, ---------------------------------------- DECEMBER 31,
1999 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period...... $ 6.74 $ 6.18 $ 6.05 $ 5.39 $ 4.96 $ 5.00
------- ------- ------- ------- ------- ------
Net investment income (loss).............. 0.04(C) 0.06 0.06 0.05 0.04 --
Net realized and unrealized gain (loss) on
investments............................. 0.06 0.84 0.26 0.63 0.67 (0.04)
------- ------- ------- ------- ------- ------
Total from investment operations.......... 0.10 0.90 0.32 0.68 0.71 (0.04)
------- ------- ------- ------- ------- ------
Dividends from net investment income...... -- (0.07) (0.04) -- (0.04) --
Distributions from net capital gains...... -- (0.27) (0.15) (0.02) (0.24) --
------- ------- ------- ------- ------- ------
Total distributions....................... -- (0.34) (0.19) (0.02) (0.28) --
------- ------- ------- ------- ------- ------
Net asset value, end of period............ $ 6.84 $ 6.74 $ 6.18 $ 6.05 $ 5.39 $ 4.96
======= ======= ======= ======= ======= ======
Total return.............................. 1.48%(B) 14.83% 5.26% 12.65% 14.64% (0.80)%(B)
------- ------- ------- ------- ------- ------
Net assets, end of period (000)........... $97,356 $91,794 $78,148 $52,768 $18,598 $3,247
------- ------- ------- ------- ------- ------
Ratio of expenses to average net assets... 1.08%(A) 1.22% 1.19% 1.38% 1.55% 1.55%(A)
------- ------- ------- ------- ------- ------
Ratio of expenses (excluding waivers) to
average net assets...................... 1.08%(A) 1.22% 1.19% 1.38% 2.21% 8.85%(A)
------- ------- ------- ------- ------- ------
Ratio of net investment income (loss) to
average net assets...................... 1.07%(A) 1.04% 1.34% 1.32% 1.17% 0.80%(A)
------- ------- ------- ------- ------- ------
Ratio of net investment income (loss)
(excluding waivers) to average net
assets.................................. 1.07%(A) 1.04% 1.34% 1.32% 0.51% (6.34)%(A)
------- ------- ------- ------- ------- ------
Portfolio turnover........................ 103% 55% 28% 21% 27% --%
------- ------- ------- ------- ------- ------
</TABLE>
<TABLE>
<CAPTION>
ENTERPRISE HIGH-YIELD BOND PORTFOLIO
-----------------------------------------------------------------------
(UNAUDITED)
SIX FOR THE PERIOD
MONTHS NOVEMBER 18,
ENDED YEAR ENDED DECEMBER 31, 1994-
JUNE 30, ---------------------------------------- DECEMBER 31,
1999 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period...... $ 5.37 $ 5.71 $ 5.51 $ 5.31 $ 4.98 $ 5.00
-------- -------- ------- ------- ------- ------
Net investment income (loss).............. 0.23(C) 0.46 0.51 0.45 0.45 0.04
Net realized and unrealized gain (loss) on
investments............................. (0.12) (0.26) 0.20 0.21 0.35 (0.01)
-------- -------- ------- ------- ------- ------
Total from investment operations.......... 0.11 0.20 0.71 0.66 0.80 0.03
-------- -------- ------- ------- ------- ------
Dividends from net investment income...... (0.23) (0.46) (0.51) (0.45) (0.45) (0.05)
Distributions from net capital gains...... -- (0.08) -- (0.01) (0.02) --
-------- -------- ------- ------- ------- ------
Total distributions....................... (0.23) (0.54) (0.51) (0.46) (0.47) (0.05)
-------- -------- ------- ------- ------- ------
Net asset value, end of period............ $ 5.25 $ 5.37 $ 5.71 $ 5.51 $ 5.31 $ 4.98
======== ======== ======= ======= ======= ======
Total return.............................. 1.96%(B) 3.60% 13.38% 12.95% 16.59% 0.50%(B)
-------- -------- ------- ------- ------- ------
Net assets, end of period (000)........... $122,904 $101,865 $68,364 $34,411 $15,223 $1,421
-------- -------- ------- ------- ------- ------
Ratio of expenses to average net assets... 0.69%(A) 0.72% 0.77% 0.85% 0.85% 0.85%(A)
-------- -------- ------- ------- ------- ------
Ratio of expenses (excluding waivers) to
average net assets...................... 0.69%(A) 0.72% 0.77% 0.94% 1.59% 7.80%(A)
-------- -------- ------- ------- ------- ------
Ratio of net investment income (loss) to
average net assets...................... 8.47%(A) 8.19% 8.47% 8.57% 8.51% 7.84%(A)
-------- -------- ------- ------- ------- ------
Ratio of net investment income (loss)
(excluding waivers) to average net
assets.................................. 8.47%(A) 8.19% 8.47% 8.48% 7.77% 0.80%(A)
-------- -------- ------- ------- ------- ------
Portfolio turnover........................ 43% 109% 175% 175% 115% --%
-------- -------- ------- ------- ------- ------
</TABLE>
See notes to financial statements.
175
<PAGE> 48
ENTERPRISE ACCUMULATION TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ENTERPRISE MANAGED PORTFOLIO
---------------------------------------------------------------------------
(UNAUDITED) YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED --------------------------------------------------------------------
JUNE 30, 1999 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period... $ 40.56 $ 40.78 $ 34.31 $ 28.06 $ 20.82 $ 21.35
---------- ---------- ---------- ---------- ---------- --------
Net investment income (loss)........... 0.26(C) 0.71 0.35 0.59 0.40 0.40
Net realized and unrealized gain (loss)
on investments....................... 2.76 2.53 8.06 5.99 8.97 0.15
---------- ---------- ---------- ---------- ---------- --------
Total from investment operations....... 3.02 3.24 8.41 6.58 9.37 0.55
---------- ---------- ---------- ---------- ---------- --------
Dividends from net investment income... -- (0.43) (0.55) (0.06) (0.75) (0.46)
Distributions from net capital gains... -- (3.03) (1.39) (0.27) (1.38) (0.62)
---------- ---------- ---------- ---------- ---------- --------
Total distributions.................... -- (3.46) (1.94) (0.33) (2.13) (1.08)
---------- ---------- ---------- ---------- ---------- --------
Net asset value, end of period......... $ 43.58 $ 40.56 $ 40.78 $ 34.31 $ 28.06 $ 20.82
========== ========== ========== ========== ========== ========
Total return........................... 7.45%(B) 7.95% 24.50% 23.47% 46.89% 2.56%
---------- ---------- ---------- ---------- ---------- --------
Net assets, end of period (000)........ $2,734,849 $2,739,305 $2,672,932 $1,935,343 $1,264,718 $689,252
---------- ---------- ---------- ---------- ---------- --------
Ratio of expenses to average net
assets............................... 0.75%(A) 0.76% 0.76% 0.74% 0.67% 0.64%
---------- ---------- ---------- ---------- ---------- --------
Ratio of expenses (excluding waivers)
to average net assets................ 0.75%(A) 0.76% 0.76% 0.74% 0.67% 0.64%
---------- ---------- ---------- ---------- ---------- --------
Ratio of net investment income (loss)
to average net assets................ 1.27%(A) 1.66% 1.14% 2.16% 1.80% 2.23%
---------- ---------- ---------- ---------- ---------- --------
Ratio of net investment income (loss)
(excluding waivers) to average net
assets............................... 1.27%(A) 1.66% 1.14% 2.16% 1.80% 2.23%
---------- ---------- ---------- ---------- ---------- --------
Portfolio turnover..................... 26% 46% 32% 29% 31% 33%
---------- ---------- ---------- ---------- ---------- --------
</TABLE>
See notes to financial statements.
176
<PAGE> 49
ENTERPRISE ACCUMULATION TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999 (UNAUDITED)
1. ORGANIZATION
Enterprise Accumulation Trust (the "Trust") was organized as a
Massachusetts business trust and is registered under the Investment Company Act
of 1940 as a diversified, open-end management investment company. The Trust is
authorized to issue an unlimited number of shares of beneficial interest at $.01
par value for the following portfolios: Growth, Growth and Income, Equity,
Equity Income, Capital Appreciation, Small Company Growth, Small Company Value,
International Growth, High-Yield Bond and Managed.
The Trust is currently offered only to separate accounts of certain
insurance companies as an investment medium for both variable annuity contracts
and variable life insurance policies. The following is a summary of significant
accounting policies consistently followed by the Trust in the preparation of its
financial statements.
2. SIGNIFICANT ACCOUNTING POLICIES
Valuation of Investments -- Investment securities, other than debt
securities, listed on either a national or foreign securities exchange or traded
in the over-the-counter National Market System are valued each business day at
the last reported 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 Trustees.
Short-term debt securities having a remaining maturity of sixty days or less are
valued at amortized cost, which approximates market value. Any securities for
which market quotations are not readily available are valued at their fair value
as determined in good faith by the Board of Trustees.
Special Valuation Risk -- The high-yield securities in which the High-Yield
Bond Portfolio 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 Portfolio may invest
will be affected by the creditworthiness of individual issuers, general economic
and specific industry conditions, and will fluctuate inversely with changes in
interest rates. In addition, the secondary trading market for lower quality
bonds may be less active and less liquid than the trading market for higher
quality bonds.
Repurchase Agreements -- Each Portfolio may acquire securities subject to
repurchase agreements. Under a typical repurchase agreement, a Portfolio would
acquire a debt security for a relatively short period (usually for one day and
not for more than one week) subject to an obligation of the seller to repurchase
and of the Portfolio to resell the debt security at an agreed-upon higher price,
thereby establishing a fixed investment return during the Portfolio's holding
period. Under each repurchase agreement, the Portfolio receives, as collateral,
securities whose market value (including interest) is at least equal to the
repurchase price.
Futures Contracts -- Upon entering into such a contract, a Portfolio is
required to deposit with the broker an amount of cash or securities equal to the
minimum "initial margin" requirements of the exchange. Pursuant to the contract,
the Portfolio agrees to receive from or pay to the broker an amount of cash
equal to the daily fluctuation in the value of the contract. Such receipts or
payments, known as "variation margin," are recorded by the Portfolio as
unrealized appreciation or depreciation. When the contract is closed the
Portfolio records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and value at the time it was
closed. There were no open futures contracts held in any of the Portfolios at
June 30, 1999.
Foreign Currency Translation -- Securities, other assets and liabilities of
the International Growth Portfolio 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
177
<PAGE> 50
ENTERPRISE ACCUMULATION TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 1999 (UNAUDITED)
Portfolio does not isolate that portion of its realized and unrealized gains on
investments from changes in foreign exchange rates from fluctuations arising
from changes in the market prices of the investments.
Security Transactions and Other 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.
Discounts or premiums on debt securities purchased are accreted or amortized to
interest income over the lives of the respective securities.
Expenses -- Each portfolio bears expenses incurred specifically on its
behalf as well as a portion of the common expenses of the Trust.
Federal Income Taxes -- No provision for Federal income or excise taxes is
required because the Trust 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 -- Except with respect to the High-Yield Bond
Portfolio, dividends and distributions to shareholders from net investment
income and net realized capital gains, if any, are declared and paid at least
annually. For the High-Yield Bond Portfolio, dividends from net investment
income are declared daily and paid monthly. Distributions from net realized
capital gains, if any, are declared and paid at least annually.
3. TRANSACTIONS WITH AFFILIATES
The investment advisory fee is payable monthly to Enterprise Capital
Management, Inc. ("Enterprise Capital"), a wholly-owned subsidiary of MONY Life
Insurance Company, and is computed as a percentage of each Portfolio's average
daily net assets as of the close of business each day as follows: for each of
the Equity, Small Company Value, and Managed Portfolios, 0.80% for the first
$400 million, 0.75% for the next $400 million, and 0.70% for average daily net
assets over $800 million, 1.00% for the Small Company Growth Portfolio, 0.85%
for the International Growth Portfolio, 0.75% for each of the Growth, Capital
Appreciation, Growth and Income, and Equity Income Portfolios, and 0.60% for the
High-Yield Bond Portfolio.
Enterprise Capital has contractually agreed to limit the portfolios'
expenses through May 1, 2000, to the following expense ratios: Growth -- 1.15%,
Growth and Income -- 1.05%, Equity -- 1.15%, Equity Income -- 1.05%, Capital
Appreciation -- 1.30%, Small Company Growth -- 1.40%, Small Company
Value -- 1.30%, International Growth -- 1.55%, High-Yield Bond -- 0.85% and
Managed -- 1.30%.
Enterprise Capital is a wholly-owned subsidiary of MONY Life Insurance
Company, which is wholly-owned by MONY Group Inc. MONY Group Inc. and its
subsidiaries and affiliates had the following investments in the Trust as of
June 30, 1999: Growth -- $292,500, Growth and Income -- $301,500, Capital
Appreciation -- $307,000, Small Company Growth -- $313,000, and Equity
Income -- $282,500.
Enterprise Capital has entered into sub-advisory agreements with various
investment advisers as Portfolio Managers for the Trust. A portion of the
management fee received by Enterprise Capital is paid to the respective
Portfolio Manager. 1740 Advisers, Inc., a wholly-owned subsidiary of MONY Group
Inc., is the Portfolio Manager for the Equity Income Portfolio. For the six
months ended June 30, 1999, Enterprise Capital incurred subadvisory fees payable
to 1740 Advisers, Inc. related to the Equity Income Portfolio of $7,609, with a
related payable balance of $2,847 as of June 30, 1999.
178
<PAGE> 51
ENTERPRISE ACCUMULATION TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 1999 (UNAUDITED)
4. FINANCIAL INSTRUMENTS
As part of its investment program, the International Growth Portfolio
utilizes forward currency exchange contracts to manage exposure to currency
fluctuations and hedge against adverse changes in connection with purchases and
sales of securities. The Portfolio enters into forward contracts only for
hedging purposes. At June 30, 1999, the International Growth Portfolio had
entered into various forward currency exchange contracts under which it is
obligated to exchange currencies at specified future dates. Risks arise from the
possible inability of counterparties to meet the terms of their contracts and
from movements in currency values. Outstanding contracts at June 30, 1999 are as
follows:
<TABLE>
<CAPTION>
PURCHASES NET UNREALIZED
SETTLEMENT ---------------------------------- APPRECIATION/
DATE RECEIVE DELIVER (DEPRECIATION)
---------- --------------- --------------- --------------
<S> <C> <C> <C>
7/1/99 EUR 139,919 USD 145,026 $ (790)
7/1/99 CHF 1,222,154 USD 791,551 (5,650)
7/1/99 CHF 227,272 USD 147,197 (1,051)
8/24/99 JPY 700,000,000 USD 5,988,024 (155,710)
--------
(163,201)
--------
SALES
----------------------------------
RECEIVE DELIVER
--------------- ---------------
7/2/99 USD 457,113 CHF 711,268 (264)
8/24/99 USD 11,771,100 EUR 11,000,000 385,810
8/24/99 USD 5,988,024 JPY 700,000,000 155,710
--------
541,256
--------
$378,055
========
</TABLE>
As part of its investment program, the High-Yield Bond Portfolio may enter
into futures contracts to hedge against anticipated future price and interest
rate changes. Risks of entering into futures contracts include: (1) the risk
that the price of the futures contracts may not move in the same direction as
the price of the securities in the various markets; (2) the risk that there will
be no liquid secondary market when the Portfolio attempts to enter into a
closing position; (3) the risk that the Portfolio will lose an amount in excess
of the initial margin deposit; and (4) the fact that the success or failure of
these transactions for the Portfolio depends on the ability of the Portfolio
Manager to predict movements in stock, bond, and currency prices and interest
rates. There were no open futures contracts at June 30, 1999.
5. PURCHASES AND SALES OF SECURITIES
For the six months ended June 30, 1999, purchases and sales proceeds of
investment securities, other than short-term securities, were as follows:
<TABLE>
<CAPTION>
U.S. GOVERNMENT OBLIGATIONS STOCKS AND BONDS
--------------------------- ---------------------------
PORTFOLIO PURCHASES SALES PURCHASES SALES
- --------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Growth.............................................. -- -- $101,462,882 $ 6,261,168
Growth and Income................................... -- -- 20,493,369 109,986
Equity.............................................. -- -- 207,742,850 174,724,579
Equity Income....................................... -- -- 12,388,140 136,016
Capital Appreciation................................ -- -- 11,370,915 1,337,903
Small Company Growth................................ -- -- 4,771,305 514,571
Small Company Value................................. -- -- 62,028,127 72,362,266
International Growth................................ -- -- 97,659,380 92,458,153
High-Yield Bond..................................... 481,758 15,728,008 71,872,822 33,846,922
Managed............................................. $159,890,625 $109,525,156 455,125,666 607,783,564
</TABLE>
179
<PAGE> 52
ENTERPRISE ACCUMULATION TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 1999 (UNAUDITED)
6. TAX BASIS UNREALIZED GAIN (LOSS) OF INVESTMENTS AND DISTRIBUTIONS
At June 30, 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>
UNREALIZED UNREALIZED NET UNREALIZED
PORTFOLIO TAX COST GAIN LOSS GAIN (LOSS)
- --------- -------------- ------------ ------------ --------------
<S> <C> <C> <C> <C>
Growth........................................ $ 113,715,059 $ 6,606,249 $ (2,144,709) $ 118,176,599
Growth and Income............................. 28,906,754 2,843,279 (273,341) 31,476,692
Equity........................................ 509,879,135 167,050,529 (14,303,235) 662,626,429
Equity Income................................. 13,296,917 676,402 (84,850) 13,888,469
Capital Appreciation.......................... 11,628,504 983,372 (210,513) 12,401,363
Small Company Growth.......................... 5,049,478 821,047 (71,827) 5,798,698
Small Company Value........................... 361,998,743 115,618,137 (26,252,847) 451,364,033
International Growth.......................... 94,607,139 8,659,646 (5,954,890) 97,311,895
High-Yield Bond............................... 126,829,261 1,052,808 (6,699,892) 121,182,177
Managed....................................... 2,100,525,583 475,500,770 (23,012,365) 2,553,013,988
</TABLE>
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
futures and options transactions, losses deferred due to wash sales, foreign
currency transactions, 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.
7. SUBSEQUENT EVENTS
On July 15, 1999, the Trust added two new Portfolios -- Multi-Cap Growth
and Balanced.
In August 1999, the Trust and another mutual fund under common control
obtained a $50 million line of credit for short term liquidity purposes.
180
<PAGE> 53
TRUSTEES AND PRINCIPAL OFFICERS
<TABLE>
<S> <C>
Victor Ugolyn Trustee, Chairman, President and
Chief Executive Officer
Arthur T. Dietz Trustee
Samuel J. Foti Trustee
Arthur Howell Trustee
William A. Mitchell, Jr. Trustee
Lonnie H. Pope Trustee
Michael I. Roth Trustee
Phillip G. Goff Vice President
Catherine R. McClellan Secretary
Herbert M. Williamson Treasurer
</TABLE>
INVESTMENT ADVISER
Enterprise Capital Management, Inc.
Atlanta Financial Center
3343 Peachtree Road, Suite 450
Atlanta, Georgia 30326
CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company
P. O. Box 1713
Boston, Massachusetts 02105
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1100 Campanile Building
1155 Peachtree Street
Atlanta, Georgia 30309
This report is authorized for distribution only to shareholders and to
others who have received a copy of this Trust's prospectus.
181
