<PAGE> 1
ENTERPRISE ACCUMULATION TRUST
MULTI-CAP GROWTH PORTFOLIO
SUBADVISER'S COMMENTS
FRED ALGER MANAGEMENT, INC.
NEW YORK, NEW YORK
Investment Management
Fred Alger Management, Inc., which has approximately $21 billion in assets
under management, became the subadviser to the Portfolio on July 15, 1999.
Alger's normal investment minimum is $5 million.
Investment Objective
The objective of the Enterprise Multi-Cap Growth Portfolio is to seek
long-term capital appreciation.
Investment Strategies
The Multi-Cap Growth Portfolio invests primarily in growth stocks. The
subadviser believes that these companies tend to fall into one of two
categories: High Unit Volume Growth and Positive Life Cycle Change. High Unit
Volume Growth companies are those vital, creative companies that offer goods or
services to a rapidly expanding marketplace. They include both established and
emerging firms, offering new or improved products, or firms simply fulfilling an
increased demand for an existing line. Positive Life Cycle Change companies are
those companies experiencing a major change that is expected to produce
advantageous results. These changes may be as varied as new management; new
products or technologies; restructuring or reorganization; or merger and
acquisition.
First Half 2000 Performance Review
The stock market experienced an extremely volatile start in 2000. Following
an enormously strong fourth quarter of 1999 and an uneventful Y2K, the market
seemed poised to continue its rally during the traditionally bullish month of
January. However, stocks struggled during January, as profit-taking and interest
rate fears weighed on most equity indices. Soaring fuel prices contributed
heavily to inflation fears as oil neared $30 per barrel. Also, third and fourth
quarter GDP numbers represented the strongest two-quarter GDP growth in more
than a decade. Against this background of higher commodity prices and
unrelenting economic expansion, the Federal Reserve raised both the Fed Funds
rate and the discount rate 0.25 percent on February 2nd. Two days before the
Federal Reserve meeting, the S&P 500 Index ended January with a negative 5.00
percent return.
February was a slightly better month for equity markets. While the S&P 500
and the Dow Jones Industrial Average continued to flounder, technology and
growth stocks regained the momentum they had previously lost. The Nasdaq
Composite and Russell 2000 pushed strongly higher, led by many of the same
companies that had driven the market towards the end of 1999. Biotechnology
stocks posted especially strong gains. The re-emergence of growth stocks,
combined with the continued struggles of most value stocks, brought increased
public attention to the ongoing bifurcated nature of the market.
While the media was shining a spotlight on "new economy" stocks, March
rolled around and the market quickly changed its pace. Many technology-oriented,
new economy growth stocks corrected severely during March, driven down by
valuation concerns and sector rotations. Money flowed out of technology stocks
and into so-called "old economy" stocks, including financials, pharmaceuticals
and retailers. Many of the trading days during March saw the Dow moving strongly
in one direction and the Nasdaq moving decisively in the other, with each index
taking turns in the lead. However, a reversal of fortunes was clearly the
general trend, with the Dow advancing while the Nasdaq was retreating. As March
neared its close, the market continued to struggle with the conflict between the
new economy and the old economy. The Federal Reserve also bumped interest rates
by another 0.25 percent on March 21st, adding to interest rate fears.
Alarmingly, on April 4th, the Nasdaq fell in excess of 500 points to an
intra-day low of 3,649. Despite staging a strong intra-day recovery, the Nasdaq
continued to plummet throughout the first part of April, bottoming on April 17th
to a low of 3227. This represented a drop of more than 37 percent from high to
low, which certainly qualifies as a full-fledged bear market. Equity markets
continued to be extraordinarily volatile throughout the remainder of April, with
most indices fluctuating wildly amidst an overall minor recovery. However, the
market's recovery was extremely short-lived. The Nasdaq's plummet began anew
during May, before
1
<PAGE> 2
finally bottoming at 3043 on May 24th. This brought the total drop in the
technology heavy index to 41 percent. While the Dow and other value-oriented
indices did fare somewhat better than the Nasdaq over this time span, losses
were widespread across the board.
Most equity market indices succeeded in rallying during late May and June.
From its May 24th low to its June 22nd high, the Nasdaq returned in excess of 33
percent, before retreating somewhat by June 30. This recovery was brought on
primarily by a series of economic reports that indicated a slowing of the
economy. Perhaps the most significant report was the May employment report,
which showed an increase in the unemployment rate to 4.1 percent. After the
Federal Reserve had hiked interest rates by 0.50 percent during their May
meeting, the employment report effectively soothed concerns about potential
rampant interest rate increases. By the time the Federal Reserve met again in
late June, widespread interest rate and inflation concerns had been greatly
alleviated. On June 28th, the Federal Reserve announced that it would not raise
rates, thereby giving further credibility to the notion that the economy has
indeed been slowing.
The top ten holdings represented slightly more than one-quarter of the
Portfolio's net assets. In descending order, the largest positions were JDS
Uniphase Corporation (3.55 percent), Microsoft Corporation (3.30 percent), Cisco
Systems Inc. (3.04 percent), Amgen Inc. (2.90 percent), Sprint PCS (2.47
percent), Citigroup Inc. (2.28 percent), Intel Corporation (2.22 percent),
Micron Technology Inc. (2.19 percent), eBay Inc. (2.03 percent) and Safeway Inc.
(1.99 percent). The Multi-Cap Growth Portfolio is primarily weighted towards
large-cap stocks. However, a few smaller companies are also represented in the
Portfolio, most of which are mid-cap stocks. The Multi-Cap Growth Portfolio's
heavy overweighting in the technology sector negatively impacted the performance
of the Portfolio during the first half of the year.
Future Investment Strategy
The last time serious tightening occurred was 1994 when the Federal Reserve
doubled the Fed Funds rate from 3 percent to 6 percent, between April 1994 and
December 1994. A strong sell-off ensued and the highs were not revisited until
early 1995 when the tightening ended. It is Alger's sense that by August, the
Federal Reserve will no longer be inclined to raise rates. Of course this will
depend on whether economic news continues to show a moderating economy. If it
does, there may be a sharp rally in both the bond and stock markets in the
second half of the year, similar to early 1995.
Regardless of market conditions, Alger will persist in emphasizing
individual security selection through thorough, internal research conducted by
talented analysts. Looking ahead, Alger plans to continue to seek out and invest
in companies that it believes will grow their earnings rapidly and consistently.
The views expressed in this report reflect those of the subadviser only
through the end of the period of the report as stated on the cover. The
subadviser's views are subject to change at any time based on market and other
conditions.
2
<PAGE> 3
ENTERPRISE ACCUMULATION TRUST
MULTI-CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 89.02% PRINCIPAL AMOUNT VALUE
---------------------------------------------------------------------
<S> <C> <C>
ADVERTISING -- 0.41%
Omnicom Group Inc. 6,900 $ 614,531
BIOTECHNOLOGY -- 4.57%
Affymetrix Inc. (a) 6,300 1,040,287
Amgen Inc. (a) 61,800 4,341,450
Genentech Inc. (a) 8,500 1,462,000
------------
6,843,737
BROADCASTING -- 2.76%
AT&T Corporation-Liberty Media
Group (Class A) (a) 58,200 1,411,350
Clear Channel Communications
Inc. (a) 36,200 2,715,000
------------
4,126,350
BUSINESS SERVICES -- 1.13%
Ariba Inc. (a) 17,200 1,686,406
CABLE -- 0.87%
Comcast Corporation (a) 15,450 625,725
Cox Communications Inc.
(Class A) (a) 15,000 683,438
------------
1,309,163
COMMUNICATIONS -- 6.73%
Brocade Communications Systems
Inc. (a) 3,900 715,589
JDS Uniphase Corporation (a) 44,400 5,322,844
PMC-Sierra Inc. (a) 14,700 2,612,006
SDL Inc. (a) 5,000 1,425,938
------------
10,076,377
COMPUTER HARDWARE -- 6.43%
Cisco Systems Inc. (a) 71,600 4,551,075
Dell Computer Corporation (a) 55,500 2,736,844
Hewlett-Packard Company 18,700 2,335,162
------------
9,623,081
COMPUTER SERVICES -- 5.98%
America Online Inc. (a) 50,000 2,637,500
CNET Networks Inc. (a) 5,800 142,463
Sun Microsystems Inc. (a) 30,700 2,791,781
VeriSign Inc. (a) 7,000 1,235,500
Yahoo! Inc. (a) 17,400 2,155,425
------------
8,962,669
COMPUTER SOFTWARE -- 12.18%
Commerce One Inc. (a) 22,800 1,034,906
Exodus Communications Inc. (a) 39,800 1,833,288
i2 Technologies Inc. (a) 14,130 1,473,273
Microsoft Corporation (a) 61,800 4,944,000
Oracle Corporation (a) 34,900 2,933,781
Phone.com Inc. (a) 18,200 1,185,275
RealNetworks Inc. (a) 7,600 384,275
Veritas Software Corporation (a) 20,900 2,362,027
Vignette Corporation (a) 40,300 2,096,230
------------
18,247,055
ELECTRONICS -- 1.45%
Broadcom Corporation (Class A) (a) 9,900 2,167,481
FINANCE -- 0.49%
Morgan Stanley Dean Witter &
Company 8,900 740,925
HEALTH CARE -- 0.81%
Medtronic Inc. 24,200 1,205,463
MANUFACTURING -- 1.64%
Corning Inc. 9,100 2,455,863
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
MISC. FINANCIAL SERVICES -- 2.60%
American Express Company 9,300 $ 484,762
Citigroup Inc. 56,600 3,410,150
------------
3,894,912
OIL SERVICES -- 2.04%
BJ Services Company (a) 13,700 856,250
Halliburton Company 33,150 1,564,266
Nabors Industries Inc. (a) 15,400 640,062
------------
3,060,578
PHARMACEUTICALS -- 0.95%
Celgene Corporation (a) 12,000 706,500
Eli Lilly & Company 7,200 719,100
------------
1,425,600
RETAIL -- 7.56%
eBay Inc. (a) 56,100 3,046,931
Home Depot Inc. 46,600 2,327,088
Safeway Inc. (a) 66,100 2,982,762
Wal-Mart Stores Inc. 51,400 2,961,925
------------
11,318,706
SEMICONDUCTORS -- 15.89%
Altera Corporation (a) 26,100 2,660,569
Applied Materials Inc. (a) 31,100 2,818,437
Applied Micro Circuits
Corporation (a) 20,600 2,034,250
ASM Lithography Holding (a) 29,600 1,306,100
Conexant Systems Inc. (a) 11,800 573,775
Intel Corporation 24,900 3,328,819
Linear Technology Corporation 23,500 1,502,531
LSI Logic Corporation (a) 46,800 2,533,050
Teradyne Inc. (a) 18,100 1,330,350
Texas Instruments Inc. 39,800 2,733,762
Vitesse Semiconductor
Corporation (a) 31,800 2,339,288
Xilinx Inc. (a) 7,700 635,731
------------
23,796,662
TECHNOLOGY -- 3.99%
Agilent Technologies Inc. (a) 7,132 525,985
Foundry Networks Inc. (a) 4,000 442,000
Micron Technology Inc. (a) 37,300 3,284,731
Walters Corporation (a) 13,800 1,722,413
------------
5,975,129
TELECOMMUNICATIONS -- 4.36%
Allegiance Telecom Inc. (a) 18,700 1,196,800
Amdocs Ltd. (a) 16,800 1,289,400
Efficient Networks Inc. (a) 9,200 676,775
LM Ericsson Telephone
Company (ADR) 70,800 1,416,000
McLeodUSA Inc. (a) 26,400 546,150
Nortel Networks Corporation 20,600 1,405,950
------------
6,531,075
WIRELESS COMMUNICATIONS -- 6.18%
Motorola Inc. 78,600 2,284,312
Nextel Communications Inc.
(Class A) (a) 17,800 1,089,138
Nokia Corporation (Class A)
(ADR) 43,850 2,189,759
Sprint PCS (a) 62,100 3,694,950
------------
9,258,159
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $126,994,634) 133,319,922
---------------------------------------------------------------------
</TABLE>
3
<PAGE> 4
ENTERPRISE ACCUMULATION TRUST
MULTI-CAP GROWTH PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
COMMERCIAL PAPER -- 8.00%
---------------------------------------------------------------------
Bank Austria Inc.
6.58% due 07/14/00 $4,000,000 $ 3,990,496
Baus Funding
6.72% due 07/14/00 4,000,000 3,990,293
Nestle Capital Corporation
6.66% due 07/07/00 4,000,000 3,995,560
------------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $11,976,349) 11,976,349
---------------------------------------------------------------------
REPURCHASE AGREEMENT -- 3.78%
---------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement,
5.50% due 07/03/00,
Maturity Value $5,667,596
Collateral: U.S. Treasury
Note
$5,675,000, 6.00% due
02/15/26,
Value $5,909,600 5,665,000 5,665,000
---------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $5,665,000) 5,665,000
---------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $144,635,983) $150,961,271
OTHER ASSETS LESS LIABILITIES -- (0.80)% (1,197,449)
------------
NET ASSETS -- 100% $149,763,822
=====================================================================
</TABLE>
(a) Non-income producing security.
(ADR) American Depository Receipt.
See notes to financial statements.
4
<PAGE> 5
ENTERPRISE ACCUMULATION TRUST
SMALL COMPANY GROWTH PORTFOLIO
SUBADVISER'S COMMENTS
WILLIAM D. WITTER, INC.
NEW YORK, NEW YORK
Investment Management
William D. Witter, Inc., which has approximately $1.6 billion in assets
under management, became subadviser to the Portfolio on December 1, 1998.
Witter's normal investment minimum for a separate account is $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 subadviser 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 subadviser will not buy a
stock if its price-earnings ratio exceeds its growth rate. By using this
valuation parameter, the subadviser believes it moderates some of the inherent
volatility in the small capitalization sector of the market. Securities will be
sold when the subadviser 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 subadviser'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 2000 Performance Review
The year began with a burst of appreciation. The intense investor demand
for technology issues of 1999 carried over into the New Year, boosted by the
successes of overcoming potential Y2K problems. Reports of historically strong,
real GDP growth in the 4th quarter, now measured to have been 7.3 percent, were
also part of the background. By early March, what appeared to be isolated
problems in some of the software companies held in the Portfolio became a trend.
The Portfolio's holdings in this sector included securities such as Kronos,
Inc., Legato Systems, and Pervasive Software, amounting to 17 percent of the
Portfolio. The central issue was a post-Y2K lack of interest for non-Internet
related, information technology purchases. In addition, the latter two companies
had to restate earnings.
By late March, investors became concerned that the Federal Reserve's
attempt to moderate the economic growth rate to a sustainable level was not
working. In addition, the price of oil, which started the year at $25.60 per
barrel, was in the $28 to $30 range. Low inflation, which was a cornerstone of
investor confidence, now appeared to be ending. As institutions and individuals
fled the market, the sector on which they concentrated was technology, which had
done so well for fifteen months. The reasoning was that an eventual slow growth
or recessionary economy would lead to a reduction in capital spending, including
technology.
By mid-second quarter, many large-capitalization issues were off from their
March highs. Small technology companies fared much worse. For instance, the
common stock of Nanometrics, which designs and manufactures metrology systems,
started the year at a price of $20 per share reached $52 in late February and
was back to $20 in early May. The fundamentals of this company and of several
other similar ones in the Portfolio did not change materially during the period.
During January and February, the Portfolio reduced several holdings
including Nanometrics, Exchange Applications, Aurora Biosciences, and AstroPower
as they reached levels not substantiated by their near-term prospects. In most
instances the positions were rebuilt at lower prices during the second quarter.
In addition to technology, other cyclical growth sectors such as transportation
were also negatively impacted.
5
<PAGE> 6
Future Investment Strategy
Witter plans to maintain the Portfolio in a fully invested position, as
Witter believes that small company growth stocks, in general, are reasonably
valued.
In the technology sector, Witter expects to reduce the commitment in the
semi-conductor equipment group before year-end. While these companies may
experience 50 percent and higher earnings growth at particular points in their
cycle, it will be important to reduce or even eliminate this exposure before the
next significant decrease in demand for their products occurs. As of now, many
semi-conductor manufacturers are moving to 12" from 8" wafers and have unusually
large needs for new equipment.
One segment of technology that Witter plans to increase is "B2B" Internet
software. While the Portfolio holds two issues in this category now, Excelon and
IntraNet Solutions, Witter believes the prospects could be very favorable.
Witter also plans to add telecommunications as a second sub-sector of
technology. Healthcare, the second largest sector, is also a fertile ground for
new investments. Drug discovery and cancer diagnosis and therapy are two key
areas in which Witter looks for new opportunities.
Outsourcing is a third secular growth category to which additions may be
made. Air transportation, 8.3 percent of the Portfolio, may do better in the
moderate growth environment that Witter anticipates, along with at least stable
if not declining energy costs.
For the current fiscal year through June 30th, the turnover rate was 24
percent. While part of Witter's philosophy incorporates a goal of achieving
long-term capital appreciation, if the January/February "buy at any price"
psychology returns, additional sales will be made.
There are specific risks associated with investments in small company
stocks. Limited volume and frequency of trading may result in greater price
deviations, and smaller capitalization companies may experience higher growth
rates and higher failure rates than large companies.
The views expressed in this report reflect those of the subadviser only
through the end of the period of the report as stated on the cover. The
subadviser's views are subject to change at any time based on market and other
conditions.
6
<PAGE> 7
ENTERPRISE ACCUMULATION TRUST
SMALL COMPANY GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 92.76% PRINCIPAL AMOUNT VALUE
---------------------------------------------------------------------
<S> <C> <C>
AEROSPACE -- 1.20%
AAR Corporation 64,900 $ 778,800
BUSINESS SERVICES -- 7.61%
Charles River Associates
Inc. (a) 75,900 1,337,737
Labor Ready Inc. (a) 30,750 203,719
Maximus Inc. (a) 47,000 1,039,875
On Assignment Inc. (a) 77,100 2,351,550
-----------
4,932,881
COMPUTER HARDWARE -- 1.95%
Overland Data Inc. (a) 91,200 1,265,400
COMPUTER SERVICES -- 9.07%
Integral Systems Inc. (a) 55,100 922,925
Mapinfo Corporation (a) 55,800 2,388,750
National Computer Systems Inc. 52,100 2,565,925
-----------
5,877,600
COMPUTER SOFTWARE -- 7.95%
Excclon Corporation (a) 122,800 974,725
Exchange Applications
Software (a) 87,800 2,337,675
IntraNet Solutions Inc. (a) 21,600 828,900
Saga Systems Inc. (a) 81,300 1,011,169
-----------
5,152,469
ELECTRICAL EQUIPMENT -- 4.20%
Electro Scientific Industries
Inc. (a) 36,700 1,615,947
Woodhead Industries 60,500 1,104,125
-----------
2,720,072
ELECTRONICS -- 14.34%
Applied Science & Technology
Inc. (a) 34,800 900,450
Comptek Research Inc. (a) 115,000 2,041,250
Cymer Inc. (a) 38,900 1,857,475
Nanometrics Inc. (a) 53,200 2,191,175
Veeco Instruments Inc. (a) 31,500 2,307,375
-----------
9,297,725
MANUFACTURING -- 9.62%
AstroPower Inc. (a) 77,440 2,100,560
Flow International Corporation
(a) 74,700 747,000
Genus Inc. (a) 84,600 692,663
Meade Instruments Corporation
(a) 30,600 768,825
Mueller Industries Inc. (a) 29,840 835,520
PRI Automation Inc. (a) 16,700 1,092,023
-----------
6,236,591
MEDICAL INSTRUMENTS -- 11.33%
Advanced Neuromodulation
Systems (a) 26,100 437,175
Candela Corporation (a) 109,250 996,906
Cytyc Corporation (a) 48,700 2,599,363
Staar Surgical Company (a) 62,800 702,575
Theragenics Corporation (a) 128,580 1,100,966
Varian Medical Systems Inc. (a) 38,600 1,510,225
-----------
7,347,210
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
MEDICAL SERVICES -- 4.61%
Impath Inc. (a) 55,100 $ 2,989,175
SECURITY & INVESTIGATION SERVICES
-- 0.64% Barringer Technologies
Inc. (a) 60,500 415,938
TECHNOLOGY -- 7.24%
Aurora Bioscience
Corporation (a) 24,400 1,663,775
Catalytica Inc. (a) 134,230 1,476,530
Trikon Technologies Inc. (a) 81,700 1,552,300
-----------
4,692,605
TELECOMMUNICATIONS -- 2.68%
AVT Corporation (a) 30,000 221,250
Globecomm Systems Inc. (a) 73,800 1,014,750
Hello Direct Inc. (a) 42,300 502,312
-----------
1,738,312
TRANSPORTATION -- 8.67%
Amtran Inc. (a) 61,600 766,150
Atlas Air Inc. (a) 66,540 2,387,122
Ryanair Holdings (ADR) (a) 26,470 966,155
Skywest Inc. 40,600 1,504,738
-----------
5,624,165
TRAVEL/ENTERTAINMENT/LEISURE --
1.65% Polaris Industries Inc. 33,400 1,068,800
-----------
TOTAL COMMON STOCKS
(IDENTIFIED COST $54,492,410) 60,137,743
---------------------------------------------------------------------
COMMERCIAL PAPER -- 7.54%
---------------------------------------------------------------------
Exxon Asset Management Company,
6.53% due 07/03/00 $2,376,000 2,375,138
Morgan Stanley Dean Witter,
6.85% due 07/05/00 2,516,000 2,514,085
-----------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $4,889,223) 4,889,223
---------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $59,381,633) $65,026,966
OTHER ASSETS LESS LIABILITIES --
(0.30)% (196,496)
-----------
NET ASSETS -- 100% $64,830,470
=====================================================================
</TABLE>
(a) Non-income producing security.
(ADR) American Depository Receipt.
See notes to financial statements.
7
<PAGE> 8
ENTERPRISE ACCUMULATION TRUST
SMALL COMPANY VALUE PORTFOLIO
SUBADVISER'S COMMENTS
GABELLI ASSET MANAGEMENT COMPANY
RYE, NEW YORK
Investment Management
Gabelli Asset Management Company, which manages approximately $9.6 billion
for institutional clients and whose normal investment minimum is $1 million,
became subadviser to 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 subadviser believes are
undervalued -- that is, the stock's market price does not fully reflect the
company's value. The subadviser uses a proprietary research technique to
determine which stocks have a market price that is less that the "private market
value" or what an investor would pay for the company. The subadviser 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 2000 Performance Review
The first half of the year began with a rally in "new economy" stocks. In
the first quarter, momentum investing was considerably more rewarding than
owning stocks representing fundamental values. In the last week of the first
quarter, the Portfolio saw a rotation out of the technology sector and into
value sectors. In the second quarter, small-cap stocks demonstrated surprising
resilience. The high-octane technology stocks languished before getting back on
pace at the end of the first half. The Portfolio continues to be underweighted
in this sector.
Performance in the first half of the year was driven by merger and
acquisition activity in some of the Portfolio's holdings. Many exceptional
opportunities existed for value investors, where high quality companies were
often shunned. Typically, whenever such a disparity exists between a company's
intrinsic value and its price in the public market, something happens to close
that gap. Recently, that catalyst has been a deal. The best performers in the
first half were involved in takeovers or financial restructurings. These
included Jackpot Enterprises, Celestial Seasonings, General Cigar, Pioneer
Group, Wynn's International, Mark IV Industries and Bush Boake Allen.
Future Investment Strategy
The Federal Reserve's preemptive strike against inflation seems to be
working. There is finally evidence of economic deceleration. Housing starts and
home sales are down substantially, and with the exception of oil, commodity
prices have flattened. The most recently released employment numbers were
relatively benign. The U.S. may be returning to a "Goldilocks" economy -- not
too hot, not too cold, but just right -- that may propel stocks higher. Ideally,
there may be a much broader market advance in which quality companies in a wider
range of industries participate.
What can go wrong? Gabelli sees several potential negative threats. The
labor market remains tight and the threat of wage driven inflation is quite
real. Despite six Federal Reserve rate hikes over the last twelve months, the
economy is still growing at a pace that troubles the monetary authorities and
may lead to even higher short- and long-term interest rates. Also, it is an
election year. While the campaign has been a relatively quiet one, the rhetoric
is sure to heat up as we approach November. Political posturing on economic
issues, principally how to squander the growing budget surplus, may rattle the
financial markets. Finally, while there are large pockets of very attractive
fundamental values in the equities market, many stocks are still richly priced
relative to historic norms.
8
<PAGE> 9
Of less widespread concern is the soaring balance of trade deficit. Thus
far, the world has been happy to finance this deficit by buying U.S. stocks and
bonds. However, if inflation continues to trend higher and the U.S financial
markets continue to sputter, international investors may seek opportunities
elsewhere. If the international demand dries up, the very favorable
supply/demand dynamics the U.S. financial markets have enjoyed over the last
decade may be disrupted.
There are specific risks associated with investments in small company
stocks. Limited volume and frequency of trading may result in greater price
deviations, and smaller capitalization companies may experience higher growth
rates and higher failure rates than large companies.
The views expressed in this report reflect those of the subadviser only
through the end of the period of the report as stated on the cover. The
subadviser's views are subject to change at any time based on market and other
conditions.
9
<PAGE> 10
ENTERPRISE ACCUMULATION TRUST
SMALL COMPANY VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 99.09% PRINCIPAL AMOUNT VALUE
---------------------------------------------------------------------
<S> <C> <C>
ADVERTISING -- 1.13%
Ackerley Group Inc. 330,000 $ 3,877,500
BOWLIN Outdoor Advertising &
Travel Center Inc. (a) 66,000 420,750
------------
4,298,250
AEROSPACE -- 5.60%
AAR Corporation 35,000 420,000
Ametek Inc. 120,000 2,100,000
Curtiss-Wright Corporation 90,000 3,346,875
GenCorp Inc. 260,000 2,080,000
Kaman Corporation (Class A) 112,000 1,197,000
Moog Inc. (Class A) (a) 40,000 1,055,000
Sequa Corporation (Class A) (a) 70,000 2,673,125
Sequa Corporation (Class B) (a) 41,000 2,367,750
SPS Technologies Inc. (a) 148,000 6,077,250
------------
21,317,000
APPAREL & TEXTILES -- 0.18%
Carlyle Industries Inc. (a) 241,739 120,870
Hartmarx Corporation (a) 220,000 563,750
------------
684,620
AUTOMOTIVE -- 8.69%
A. O. Smith Corporation 12,000 251,250
A. O. Smith Corporation (Class
A) 4,000 80,500
Arvin Industries Inc. 50,000 868,750
Borg-Warner Automotive Inc. 66,000 2,318,250
Clarcor Inc. 230,000 4,571,250
Earl Scheib Inc. (a)(g) 225,000 703,125
Federal-Mogul Corporation 110,000 1,051,875
Lund International Holdings
Inc. (a) 26,000 123,500
Midas Inc. 44,000 880,000
Modine Manufacturing Company 265,000 7,155,000
Navistar International
Corporation (a) 95,000 2,950,937
Standard Motor Products Inc. 260,000 2,210,000
Superior Industries
International Inc. 108,000 2,781,000
Tenneco Automotive Inc. 200,000 1,050,000
Wynns International Inc. 270,000 6,125,625
------------
33,121,062
BROADCASTING -- 9.87%
AT&T Corporation -- Liberty
Media Group (Class A) (a) 164,000 3,977,000
Chris-Craft Industries Inc. (a) 169,830 11,219,394
EchoStar Communications
Corporation (Class A) (a) 50,000 1,655,469
Fisher Companies Inc. 31,000 2,371,500
Granite Broadcasting
Corporation (a) 170,000 1,253,750
Gray Communications Systems
Inc. 86,000 843,875
Gray Communications Systems
Inc. (Class B) 165,000 1,608,750
Paxson Communications
Corporation (a) 230,000 1,840,000
United Television Inc. 69,500 8,948,125
UnitedGlobalCom Inc. (a) 80,000 3,740,000
Young Broadcasting Inc. (a) 5,000 128,438
------------
37,586,301
BUILDING & CONSTRUCTION -- 0.26%
Core Materials Corporation (a) 60,000 120,000
Huttig Building Products Inc.
(a) 30,444 125,582
Salem Communications
Corporation (a) 80,000 742,500
------------
988,082
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
BUSINESS SERVICES -- 0.33%
MDC Corporation (Class A) (a) 30,000 $ 264,375
Nashua Corporation (a) 30,000 247,500
National Processing Inc. (a) 60,000 750,000
------------
1,261,875
CABLE -- 5.50%
Cablevision Systems Corporation
(Class A) (a) 191,000 12,964,125
Rogers Communications Inc.
(Class B) (a) 240,000 6,840,000
TCI Satellite Entertainment
Inc. (Class A) (a) 132,000 1,146,750
------------
20,950,875
CHEMICALS -- 3.10%
Bush Boake Allen Inc. (a) 62,000 2,712,500
Church & Dwight Company Inc. 88,000 1,584,000
Ferro Corporation 95,000 1,995,000
OMNOVA Solutions Inc. 220,000 1,375,000
Sybron Chemicals Inc. (a) 190,000 4,156,250
------------
11,822,750
COMPUTER HARDWARE -- 0.00%
Cerion Technologies Inc. (a)(d) 90,000 0
COMPUTER SERVICES -- 0.09%
Tyler Technologies Inc. (a) 140,000 358,750
COMPUTER SOFTWARE -- 0.70%
Global Sources Ltd. 10,075 255,653
Primark Corporation 65,000 2,421,250
------------
2,676,903
CONSUMER DURABLES -- 0.23%
Noel Group Units (a)(d)(f) 135,000 0
Noel Liquidating Trust Units
(a)(d)(f) 135,000 89,100
Oneida Ltd. 44,000 781,000
------------
870,100
CONSUMER PRODUCTS -- 0.18%
Mikasa Inc. 62,000 682,000
CONSUMER SERVICES -- 0.30%
Berlitz International Inc. (a) 69,000 621,000
ITT Educational Services Inc.
(a) 30,000 526,875
------------
1,147,875
ELECTRICAL EQUIPMENT -- 4.52%
Ampco-Pittsburgh Corporation 130,000 1,446,250
Donaldson Company Inc. 10,000 197,500
Oak Technology Inc. (a) 430,000 9,271,875
SL Industries Inc. 68,000 663,000
Thomas Industries Inc. 220,000 3,891,250
UCAR International Inc. (a) 135,000 1,763,437
------------
17,233,312
ELECTRONICS -- 0.62%
CTS Corporation 30,000 1,350,000
Power-One Inc. (a) 9,000 1,025,438
------------
2,375,438
ENERGY -- 0.48%
El Paso Electric Company 100,000 1,118,750
Kaneb Services Inc. (a) 180,000 720,000
------------
1,838,750
ENTERTAINMENT & LEISURE -- 5.14%
Bull Run Corporation (a) 150,000 309,375
Churchill Downs Inc. 35,000 818,125
Gaylord Entertainment Company 272,701 5,863,071
GC Companies Inc. (a) 195,000 4,363,125
Hearst-Argyle Television Inc.
(a) 30,000 585,000
</TABLE>
10
<PAGE> 11
ENTERPRISE ACCUMULATION TRUST
SMALL COMPANY VALUE PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
Jackpot Enterprises Inc. (a) 242,000 $ 3,055,250
Sinclair Broadcast Group Inc.
(a) 60,000 660,000
TV Guide Inc. (Class A) (a) 115,000 3,938,750
------------
19,592,696
FINANCE -- 1.83%
Advest Group Inc. 40,000 837,500
Pioneer Group Inc. (a) 145,000 6,144,375
------------
6,981,875
FOOD & BEVERAGES & TOBACCO -- 2.61%
Buenos Aires Embotelladora
(ADR) (a)(d) 40,227 0
Eskimo Pie Corporation (a) 20,000 197,500
Ingles Markets Inc. (Class A) 90,000 939,375
PepsiAmericas Inc. (a) 315,000 945,000
Ralcorp Holdings Inc. (a) 80,000 980,000
Robert Mondavi Corporation
(Class A) (a) 20,000 613,750
Tootsie Roll Industries Inc. 100,786 3,527,492
Whitman Corporation 220,000 2,722,500
------------
9,925,617
HOTELS & RESTAURANTS -- 2.86%
Advantica Restaurant Group Inc.
(a) 60,000 58,125
Aztar Corporation (a) 500,000 7,750,000
Boca Resorts Inc. (a) 120,000 1,185,000
Extended Stay America Inc. (a) 40,000 370,000
Lakes Gaming Inc. (a) 45,000 399,375
Park Place Entertainment
Corporation (a) 30,000 365,625
Trump Hotels & Casino Resorts
Inc. (a) 270,000 759,375
------------
10,887,500
INSURANCE -- 3.04%
Argonaut Group Inc. 107,000 1,832,375
Danielson Holding Corporation
(a) 60,000 292,500
Liberty Corporation 140,000 5,880,000
Midland Company 145,400 3,562,300
------------
11,567,175
MACHINERY -- 4.49%
Baldwin Technology Company Inc.
(Class A) (a) 165,000 350,625
Fairchild Corporation (Class A)
(a) 170,000 828,750
Flowserve Corporation 170,000 2,560,625
Franklin Electric Company Inc. 16,500 1,117,875
Idex Corporation 110,000 3,471,875
Katy Industries Inc. 155,000 1,821,250
Nortek Inc. (a) 122,000 2,409,500
Paxar Corporation (a) 180,000 2,148,750
Standex International
Corporation 25,000 396,875
Tennant Company 10,000 375,000
Watts Industries Inc. (Class A) 130,000 1,641,250
------------
17,122,375
MANUFACTURING -- 6.33%
Aviall Inc. (a) 120,000 592,500
Barnes Group Inc. 63,000 1,027,687
Belden Inc. 60,000 1,537,500
Bway Corporation (a) 22,000 145,750
Crane Company 60,000 1,458,750
Cuno Inc. (a) 75,000 1,734,375
Dexter Corporation 60,000 2,880,000
Fedders Corporation (Class A) 380,000 1,757,500
Fedders USA Inc. 100,000 581,250
Graco Inc. 40,000 1,300,000
Industrial Distribution Group
Inc. (a) 35,000 87,500
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
Mark IV Industries Inc. 220,000 $ 4,592,500
Material Sciences Corporation
(a) 145,000 1,450,000
Myers Industries Inc. 75,000 806,250
Oil Dri Corporation of America 123,000 1,107,000
Park Ohio Holdings Corporation
(a) 160,000 1,380,012
Rawlings Sporting Goods Company
Inc. (a) 90,000 585,000
Strattec Security Corporation
(a) 33,000 1,072,500
------------
24,096,074
MEDICAL SERVICES -- 0.56%
CIRCOR International Inc. 65,000 532,188
Shared Medical System 22,000 1,604,625
------------
2,136,813
METALS & MINING -- 0.52%
Homestake Mining Company 40,000 275,000
TVX Gold Inc. (a) 970,000 606,250
WHX Corporation (a) 200,000 1,100,000
------------
1,981,250
MISC. FINANCIAL SERVICES -- 0.15%
Data Broadcasting Corporation
(a) 90,000 568,125
NEUTRACEUTICALS -- 0.24%
Omni Nutraceuticals Inc. 15,000 57,188
Weider Nutrition International
Inc. 280,000 840,000
------------
897,188
OIL SERVICES -- 0.65%
Vastar Resources Inc. 30,000 2,463,750
PAPER PRODUCTS -- 0.74%
Greif Brothers Corporation
(Class A) 92,000 2,829,000
PHARMACEUTICALS -- 2.45%
Agribrands International Inc.
(a) 15,000 629,062
Block Drug Company Inc. 20,000 846,250
Carter-Wallace Inc. 300,000 6,037,500
Ivax Corporation (a) 15,000 622,500
Twinlab Corporation (a) 185,000 1,179,375
------------
9,314,687
PRINTING & PUBLISHING -- 5.96%
A.H. Belo Corporation (Class A) 52,000 900,250
Lee Enterprises Inc. 70,000 1,631,875
McClatchy Company (Class A) 90,000 2,981,250
Media General Inc. (Class A) 155,000 7,527,187
Meredith Corporation 40,000 1,350,000
Penton Media Inc. 97,000 3,395,000
Pulitzer Inc. 58,000 2,446,875
Thomas Nelson Inc. 45,000 385,313
Topps Company Inc. (a) 180,000 2,070,000
------------
22,687,750
REAL ESTATE -- 1.12%
Catellus Development
Corporation (a) 200,000 3,000,000
Griffin Land & Nurseries Inc.
(a) 110,000 1,278,750
------------
4,278,750
RETAIL -- 3.15%
Burlington Coat Factory
Warehouse Corporation 125,000 1,351,562
Coldwater Creek Inc. (a) 38,000 1,144,750
Lillian Vernon Corporation 330,000 3,465,000
Neiman Marcus Group (Class B) 210,000 5,827,500
Phar Mor Inc. (a) 75,000 112,500
Sports Authority Inc. (a) 100,000 112,500
------------
12,013,812
</TABLE>
11
<PAGE> 12
ENTERPRISE ACCUMULATION TRUST
SMALL COMPANY VALUE PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
SECURITY & INVESTIGATION SERVICES -- 1.97%
Burns International Services
Corporation (a) 125,000 $ 1,562,500
Rollins Inc. 364,000 5,414,500
Wackenhut Corporation (Class A)
(a) 40,000 517,500
------------
7,494,500
TELECOMMUNICATIONS -- 8.12%
Atlantic Tele-Network Inc. 15,000 141,563
Citizens Communications Company 400,000 6,900,000
Commonwealth Telephone
Enterprises Inc. (a) 28,077 1,321,374
Commonwealth Telephone
Enterprises Inc. (Class B)
(a) 59,633 2,832,567
Communications Systems Inc. 60,000 915,000
COMSAT Corporation 80,000 1,975,000
CoreComm Ltd. (a) 216,000 4,212,000
GST Telecommunications Inc. (a) 120,000 114,375
RCN Corporation (a) 60,000 1,522,500
Rogers Cantel Mobile
Communications Inc. (Class B)
(a) 44,000 1,479,500
Telephone and Data Systems Inc. 92,000 9,223,000
Teligent Inc. (Class A) (a) 12,000 283,500
------------
30,920,379
TRANSPORTATION -- 1.88%
GATX Corporation 200,000 6,800,000
TransPro Inc. 70,000 354,375
------------
7,154,375
UTILITIES -- 1.24%
AGL Resources Inc. 40,000 637,500
Eastern Enterprises 65,000 4,095,000
------------
4,732,500
WASTE MANAGEMENT -- 0.10%
EnviroSource Inc. (a) 150,000 70,313
Republic Services Incorporated 20,000 320,000
------------
390,313
WIRELESS COMMUNICATIONS -- 2.16%
Allen Telecom Inc. (a) 92,000 1,627,250
Price Communications
Corporation (a) 280,000 6,597,500
------------
8,224,750
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $338,857,355) 377,475,197
---------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
U.S. TREASURY BILL -- 0.80%
---------------------------------------------------------------------
U.S. Treasury Bill 5.94% due
08/24/00 $3,055,000 $ 3,027,780
------------
TOTAL U.S. TREASURY BILL
(IDENTIFIED COST $3,027,780) 3,027,780
---------------------------------------------------------------------
REPURCHASE AGREEMENT -- 0.18%
---------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement, 5.50%
due 07/03/00,
Maturity Value $692,317
Collateral: U.S. Treasury Note $720,000, 5.50%
due 05/31/03,
Value $710,754 692,000 692,000
------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $692,000) 692,000
---------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $342,577,135) $381,194,977
OTHER ASSETS LESS LIABILITIES -- (0.07)% (271,488)
------------
NET ASSETS -- 100% $380,923,489
=====================================================================
</TABLE>
(a) Non-income producing security
(d) Security is fair valued at June 30, 2000.
(f) Restricted securities as of June 30, 2000. At June 30, 2000 investments in
restricted securities were as follows:
<TABLE>
<CAPTION>
DATE NUMBER % OF
OF OF UNIT UNIT AGGREGATE NET
DESCRIPTION ACQUISITION UNITS COST VALUE COST VALUE ASSETS
----------- ----------- ------- ----- ----- -------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Noel Group Units..... 4/13/99 135,000 $0.49 $ -- $ 65,880 -- 0.00%
Noel Group
Liquidating Trust
Units............... 10/8/98 135,000 $0.81 $0.66 109,688 $89,100 0.02%
</TABLE>
(g) Considered an affiliated company as the portfolio owns more than 5% of the
outstanding voting securities of such company. The total market value of
investment in this affiliated company as of June 30, 2000 was $703,125.
(ADR) American Depository Receipt.
See notes to financial statements.
12
<PAGE> 13
ENTERPRISE ACCUMULATION TRUST
GROWTH PORTFOLIO
SUBADVISER'S COMMENTS
MONTAG & CALDWELL, INC.
ATLANTA, GEORGIA
Investment Management
Montag & Caldwell has served as subadviser to the Enterprise Growth
Portfolio since the Portfolio was organized on December 1, 1998. Montag &
Caldwell manages approximately $33 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 that makes the investment style risk averse. Also
emphasized are growth characteristics to identify companies whose shares are
attractively priced and may experience strong earnings growth relative to other
companies.
First Half 2000 Performance Review
The stock market as measured by the S&P 500 Index was negative for most of
the first quarter of 2000 until the brisk rally in March pushed the index into
modestly positive territory. The divergence in performance between technology
stocks and all other stocks continued to widen until the end of the quarter. The
100 largest companies on the Nasdaq gained nearly 19 percent during the quarter,
while the 439 non-tech stocks in the S&P 500 were on average down for the
quarter. During the first quarter of 2000, the strength of the Portfolio's
technology issues did not offset the weakness of other holdings. Because Montag
believes that many technology stocks have become too highly priced, the
Portfolio has maintained a more conservative position in technology relative to
the market.
Stocks finished the second quarter lower as investors reacted negatively to
the prospects of higher interest rates and their impact on a fully valued
market. Concerns also surfaced about whether many developing technology and
Internet companies would ever post a profit, leading to a sell off in this
overvalued sector of the market. From its peak on March 10 to its low on May 24,
the Nasdaq declined over 35 percent and finished the quarter down 13 percent.
The S&P 500 finished the quarter down 2.7 percent.
In this difficult environment, companies with good earnings and more
conservative valuations tended to do well. As evidence of this, two of the best
performing sectors of the S&P 500 were healthcare, up 22 percent, and consumer
staples, up 6 percent. Healthcare was the best performing sector of the S&P 500
for the second quarter. Among the Portfolio's holdings, Johnson & Johnson was
the standout, gaining 45 percent for the quarter, while Schering Plough and
Pfizer rose over 30 percent. In the consumer staple area, Bestfoods increased
over 48 percent as it agreed to be acquired by Unilever, while Coca-Cola and
PepsiCo gained over 20 percent.
Future Investment Strategy
Because Montag & Caldwell expects continued economic growth with low
inflation, it believes the outlook for the stock market remains positive. The
market, as measured by the S&P 500, may continue to be volatile and move in a
sideways pattern until it becomes more evident that the Federal Reserve has
succeeded at engineering a soft landing. However, as this develops, interest
rates may peak and eventually drift lower, with corporate profit growth being
sustained, but at a more moderate rate. Such an outcome may allow the market to
broaden out with more stocks moving higher as the stock market indices advance.
In a more moderately growing economy, Montag & Caldwell believes higher
quality issues that can produce solid double-digit earnings growth may excel.
With global economies recovering and the enormous longer-term opportunities
deriving from the triumph of capitalism, Montag & Caldwell believes
multinational growth companies may do particularly well. These include well-
positioned consumer, pharmaceutical, technology and financial service companies
with global reach. As it becomes more evident that the Federal Reserve is
succeeding in bringing about a soft landing, higher-quality consumer growth
companies that conduct most of their business in the United States may also be
rewarding investments for the Portfolio.
The views expressed in this report reflect those of the subadviser only
through the end of the period of the report as stated on the cover. The
subadviser's views are subject to change at any time based on market and other
conditions.
13
<PAGE> 14
ENTERPRISE ACCUMULATION TRUST
GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 92.31% PRINCIPAL AMOUNT VALUE
---------------------------------------------------------------------
<S> <C> <C>
BANKING -- 2.03%
Wells Fargo & Company 162,400 $ 6,293,000
BUSINESS SERVICES -- 1.45%
Interpublic Group of Companies
Inc. 105,000 4,515,000
COMPUTER HARDWARE -- 7.06%
Dell Computer Corporation (a) 191,400 9,438,412
Hewlett-Packard Company 100,000 12,487,500
------------
21,925,912
COMPUTER SERVICES -- 6.62%
Electronic Data Systems
Corporation 260,000 10,725,000
Solectron Corporation (a) 234,800 9,832,250
------------
20,557,250
COMPUTER SOFTWARE -- 3.71%
Electronic Arts Inc. (a) 70,000 5,105,625
Microsoft Corporation (a) 80,000 6,400,000
------------
11,505,625
CONSUMER PRODUCTS -- 5.94%
Gillette Company 395,000 13,800,313
Newell Rubbermaid Inc. 180,000 4,635,000
------------
18,435,313
ELECTRICAL EQUIPMENT -- 0.97%
General Electric Company 56,600 2,999,800
FOOD, BEVERAGES &
TOBACCO -- 9.96%
Bestfoods 121,000 8,379,250
Coca-Cola Company 265,000 15,220,937
PepsiCo Inc. 165,000 7,332,188
------------
30,932,375
HEALTH CARE -- 2.49%
Medtronic Inc. 155,500 7,745,844
HOTELS & RESTAURANTS -- 6.44%
Marriott International Inc.
(Class A) 198,000 7,140,375
McDonald's Corporation 390,000 12,845,625
------------
19,986,000
MEDICAL INSTRUMENTS -- 2.12%
Boston Scientific Corporation
(a) 300,000 6,581,250
MISC. FINANCIAL SERVICES -- 3.54%
American Express Company 98,400 5,129,100
Citigroup Inc. 97,100 5,850,275
------------
10,979,375
MULTI-LINE INSURANCE -- 2.29%
American International Group
Inc. 60,500 7,108,750
PHARMACEUTICALS -- 15.32%
Bristol-Myers Squibb Company 166,700 9,710,275
Johnson & Johnson 120,000 12,225,000
Pfizer Inc. 328,400 15,763,200
Schering-Plough Corporation 195,000 9,847,500
------------
47,545,975
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
RETAIL -- 7.90%
Circuit City Stores Inc. 200,000 $ 6,637,500
Costco Wholesale Corporation
(a) 189,500 6,253,500
Gap Inc. 88,300 2,759,375
Home Depot Inc. 178,000 8,888,875
------------
24,539,250
SEMICONDUCTORS -- 2.29%
Intel Corporation 53,200 7,112,175
TELECOMMUNICATIONS -- 10.84%
Lucent Technologies Inc. 240,000 14,220,000
Tellabs Inc. (a) 118,400 8,103,000
Worldcom Inc. (a) 247,200 11,340,300
------------
33,663,300
WIRELESS COMMUNICATIONS -- 1.34%
Motorola Inc. 143,100 4,158,844
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $274,818,890) 286,585,038
---------------------------------------------------------------------
COMMERCIAL PAPER -- 3.54%
---------------------------------------------------------------------
Ford Motor Credit Company
6.77% due 07/07/00 $ 8,000,000 7,990,973
Ford Motor Credit Company
6.60% due 07/10/00 3,000,000 2,995,050
------------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $10,986,024) 10,986,023
---------------------------------------------------------------------
REPURCHASE AGREEMENT -- 4.98%
---------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement,
5.50% due 07/03/00,
Maturity Value $15,454,080
Collateral: U.S. Treasury
Bond $15,260,000, 6.25% due
08/15/23, Value $16,114,916 15,447,000 15,447,000
------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $15,447,000) 15,447,000
---------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $301,251,914) $313,018,061
OTHER ASSETS LESS LIABILITIES -- (0.83)% (2,570,351)
------------
NET ASSETS -- 100% $310,447,710
=====================================================================
</TABLE>
(a) Non-income producing security.
See notes to financial statements.
14
<PAGE> 15
ENTERPRISE ACCUMULATION TRUST
CAPITAL APPRECIATION PORTFOLIO
SUBADVISER'S COMMENTS
MARSICO CAPITAL MANAGEMENT, LLC
DENVER, COLORADO
Investment Management
Marsico Capital Management, LLC became subadviser to the Enterprise Capital
Appreciation Portfolio on November 1, 1999. Marsico manages approximately $16
billion for institutional clients and its usual investment minimum is $100
million.
Investment Objective
The objective of the Enterprise Capital Appreciation Portfolio is to seek
maximum capital appreciation.
Investment Strategies
The Capital Appreciation Portfolio's investment strategy blends top-down
economic and industry analysis with bottom-up stock selection. The subadviser's
investment approach emphasizes large capitalization U.S. companies that, in the
subadviser's opinion, have the ability to produce above-average earnings growth.
The investment process begins by establishing an overall macroeconomic outlook,
which in turn forms the strategic backdrop for actual portfolio construction.
Various economic, social, and political factors are considered, including global
trends (e.g., productivity enhancements), interest rates, inflation, central
bank policies, the regulatory environment, and the overall competitive
landscape. This analysis also seeks to uncover specific industries and companies
that are expected to benefit from the macroeconomic environment. The potential
for maximum capital appreciation is the basis for investment decisions; any
income is incidental.
Stock selection stresses rigorous hands-on fundamental internal research.
The primary focus is to identify companies with market expertise/dominance,
durable franchises, improving fundamentals (e.g., margins, Return on Equity,
Return on Assets), strong balance sheets, global distribution capabilities and
management teams. Valuation is also an important consideration in selecting
stocks. Stocks are sold for three primary reasons: overvaluation relative to
expected earnings growth potential, forced displacement (i.e., a better
investment idea surfaces), or a permanent change in industry/company
fundamentals that alters the original investment thesis.
First Half 2000 Performance Review
Because the equity markets have been so volatile this year, a variety of
the Portfolio's sector, industry, and individual company positions have moved in
and out-of-favor at various times this year. However, in reflecting on the past
six months, Marsico would point to the following areas that primarily impacted
the Portfolio's investment results:
- TECHNOLOGY-RELATED POSITIONS: On balance, the Portfolio's technology
allocation this year has adversely affected performance, although there
have been several performance standouts in this sector. Early in 2000,
the Portfolio was negatively impacted by its positions in QUALCOMM,
Lucent Technologies, and Dell Computer, all of which have been sold.
Cisco Systems, after producing strong gains in the first quarter 2000,
struggled in the second quarter. A similar pattern took place with 3Com,
which produced strong gains in the first quarter, but sold off sharply in
the second quarter. The aforementioned companies represented substantial
positions in the Portfolio. The Portfolio's positions in
technology-related companies such as EMC Corporation, Corning, and Oracle
have helped investment results year-to-date.
- FINANCIAL SERVICES: Recently, the Portfolio's financial service
positions have performed quite well. Earlier in the year, holdings in
Fannie Mae and Citigroup detracted somewhat from investment results.
Recently, Marsico increased the Portfolio's position in financials, based
largely on the premise that going forward the interest rate environment
may be more favorable.
- HEALTH CARE: Throughout the year, the Portfolio has been substantially
underweighted in the health care sector, including HMOs and
pharmaceuticals. This strategy, overall, has detracted from investment
results. Health care was among the best-performing sectors during the
second quarter, outperforming the broad U.S. equity market, as measured
by the S&P 500 Index, by a wide margin. In addition, the Portfolio's sole
major health care position, Genentech, has been under pressure for a good
portion of 2000, particularly since March.
15
<PAGE> 16
- RETAIL: Retail stocks such as Home Depot and Wal-Mart Stores did not
perform particularly well during the first six months of 2000.
- MEDIA/ENTERTAINMENT: Companies such as Sony, Time Warner, and America
Online have fluctuated quite substantially in 2000, but overall have not
contributed positively to the Portfolio's performance so far this year.
Future Investment Strategy
Marsico continues to believe that the long-term prospects for U.S. equity
markets remain quite strong. Marsico's positive macroeconomic outlook is the
basis for this opinion. This outlook is anchored by a number of premises. In
Marsico's view, the U.S. is in a longer-term lower interest rate and
inflationary environment. While interest rates have no doubt been volatile and
generally biased higher, there is evidence that the Federal Reserve's tightening
policy has been successful at slowing U.S. economic growth. Inflation, despite
an increase in oil prices, has not increased dramatically; prices for raw
materials such as lumber and gypsum have either remained relatively stable or
declined somewhat. Neither automobile sales nor housing starts have shown
year-over-year growth in the past year.
At this time, based on this evidence, Marsico believes that future interest
rate increases by the Federal Reserve are unlikely. Therefore, Marsico's view is
that the interest rate environment may improve going forward. That in turn,
augurs well for company valuations and earnings. Marsico believes the continued
high Federal budget surpluses, which thus far have primarily been earmarked for
reducing government debt, are a positive factor. Finally, Marsico continues to
feel that productivity gains and enhanced communications have created a more
efficient economy and may help keep inflation relatively low.
The views expressed in this report reflect those of the subadviser only
through the end of the period of the report as stated on the cover. The
subadviser's views are subject to change at any time based on market and other
conditions.
16
<PAGE> 17
ENTERPRISE ACCUMULATION TRUST
CAPITAL APPRECIATION PORTFOLIO
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 83.54% PRINCIPAL AMOUNT VALUE
---------------------------------------------------------------------
<S> <C> <C>
ADVERTISING -- 0.50%
Omnicom Group Inc. 3,782 $ 336,834
AEROSPACE -- 1.26%
General Dynamics Corporation 14,678 766,926
Titan Corporation (a) 1,747 78,178
-----------
845,104
AUTOMOTIVE -- 1.15%
Delphi Automotive Systems
Corporation 11,235 163,610
Ford Motor Company 13,523 581,489
Visteon Corporation 1,771 21,468
-----------
766,567
BIOTECHNOLOGY -- 4.25%
Genentech Inc. (a) 16,527 2,842,644
BROADCASTING -- 3.01%
Clear Channel Communications
Inc. (a) 9,811 735,825
Time Warner Inc. 16,856 1,281,056
-----------
2,016,881
CABLE -- 1.74%
Comcast Corporation (a) 28,759 1,164,739
COMPUTER HARDWARE -- 5.92%
Cisco Systems Inc. (a) 18,351 1,166,435
EMC Corporation (a) 36,386 2,799,448
-----------
3,965,883
COMPUTER SERVICES -- 4.47%
America Online Inc. (a) 23,712 1,250,808
Sun Microsystems Inc. (a) 19,126 1,739,271
-----------
2,990,079
COMPUTER SOFTWARE -- 6.27%
Adobe Systems Inc. 7,945 1,032,850
Microsoft Corporation (a) 8,198 655,840
Oracle Corporation (a) 28,460 2,392,419
Veritas Software Corporation (a) 1,009 114,033
-----------
4,195,142
CONSUMER PRODUCTS -- 0.95%
Kimberly-Clark Corporation 11,095 636,576
CONSUMER SERVICES -- 0.31%
United Parcel Service Inc. 3,469 204,671
CRUDE & PETROLEUM -- 1.65%
BP Amoco (ADR) 19,543 1,105,401
ELECTRICAL EQUIPMENT -- 3.15%
Chartered Semiconductor
Manufacturing (ADR) (a) 544 48,960
General Electric Company 38,852 2,059,156
-----------
2,108,116
ELECTRONICS -- 5.21%
Applied Materials Inc. (a) 21,426 1,941,731
Sony Corporation (ADR) 10,034 946,332
Flextronics International Ltd.
(a) (ADR) 8,795 604,107
-----------
3,492,170
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
FINANCE -- 3.04%
Morgan Stanley Dean Witter &
Company 24,411 $ 2,032,216
FOOD, BEVERAGES & TOBACCO -- 2.82%
Anheuser-Busch Companies, Inc. 11,317 845,238
Coca-Cola Company 9,375 538,477
Coca-Cola Enterprises, Inc. 14,279 232,926
Pepsi Bottling Group, Inc. 9,372 273,545
-----------
1,890,186
HOTELS & RESTAURANTS -- 1.76%
Four Seasons Hotels Inc. (ADR) 18,982 1,180,443
MANUFACTURING -- 4.87%
Corning Inc. 12,086 3,261,709
MISC. FINANCIAL SERVICES -- 7.80%
American Express Company 5,304 276,471
Citigroup Inc. 49,464 2,980,206
Fannie Mae 37,659 1,965,329
-----------
5,222,006
OIL SERVICES -- 2.25%
Halliburton Company 8,151 384,625
Schlumberger Ltd. 15,047 1,122,883
-----------
1,507,508
PHARMACEUTICALS -- 0.91%
Priority Healthcare Corporation 8,180 607,876
RETAIL -- 8.25%
Costco Wholesale Corporation (a) 20,248 668,184
Home Depot Inc. 35,173 1,756,452
Tiffany & Company 15,052 1,016,010
Wal-Mart Stores Inc. 36,088 2,079,571
-----------
5,520,217
SEMICONDUCTORS -- 2.42%
Texas Instruments Inc. 23,569 1,618,896
TECHNOLOGY -- 1.17%
Agilent Technologies Inc. (a) 10,662 786,322
TELECOMMUNICATIONS -- 5.01%
General Motors Corporation
(Class H)-Hughes Electronics
Corporation (a) 12,594 1,105,123
LM Ericsson Telephone Company
(ADR) 28,489 569,780
McLeodUSA Inc. (a) 15,000 310,313
Nortel Networks Corporation 15,965 1,089,611
SBC Communications Inc. 6,495 280,909
-----------
3,355,736
WIRELESS COMMUNICATIONS -- 3.40%
Sprint PCS (a) 24,208 1,440,376
Vodafone Airtouch (ADR) 20,112 833,391
-----------
2,273,767
-----------
TOTAL COMMON STOCKS
(IDENTIFIED COST $52,032,358) 55,927,689
---------------------------------------------------------------------
</TABLE>
17
<PAGE> 18
ENTERPRISE ACCUMULATION TRUST
CAPITAL APPRECIATION PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
U.S. GOVERNMENT & AGENCY OBLIGATIONS -- 11.65%
---------------------------------------------------------------------
Federal Home Loan Bank
Consolidated Discount Note,
6.48% due 07/03/00 $7,800,000 $ 7,797,192
-----------
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(IDENTIFIED COST $7,797,192) 7,797,192
---------------------------------------------------------------------
REPURCHASE AGREEMENT -- 3.63%
---------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement,
5.50% due 07/03/00,
Maturity Value $2,429,113
Collateral: U.S. Treasury Bond
$2,375,000, 7.625% due
02/15/07,
Value $2,547,065 2,428,000 2,428,000
-----------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $2,428,000) 2,428,000
---------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $62,257,550) $66,152,881
OTHER ASSETS LESS LIABILITIES -- 1.18% 790,137
-----------
NET ASSETS -- 100% $66,943,018
=====================================================================
</TABLE>
(a) Non-income producing security.
(ADR) American Depository Receipt.
See notes to financial statements.
18
<PAGE> 19
ENTERPRISE ACCUMULATION TRUST
EQUITY PORTFOLIO
SUBADVISER'S COMMENTS
TCW INVESTMENT MANAGEMENT COMPANY
LOS ANGELES, CALIFORNIA
Investment Management
TCW Investment Management Company, a wholly owned subsidiary of TCW Group,
Inc., became subadviser to the Enterprise Equity Portfolio on November 1, 1999.
TCW Group, Inc. manages approximately $79 billion for institutional clients, and
its normal investment minimum is $100 million.
Investment Objective
The objective of the Enterprise Equity Portfolio is long-term capital
appreciation.
Investment Strategies
Using a bottom-up investment approach, TCW invests in large- and
medium-capitalization companies that have a long record of successful operations
in their core business. Looking for companies with a dominant position in a
niche business (e.g. technology, production and distribution), TCW also
considers the financial quality of the company. Prime candidates have sound
financial fundamentals and management that is committed to shareholder
interests.
First Half 2000 Performance Review
The first half of 2000 was dominated by concerns about the pace of growth
of the U.S. economy and the Federal Reserve's actions to control it. Concerns
and perceptions about the health and growth of the economy dominated the "roller
coaster" market of the first half of 2000. Initial concerns about the Y2K bug
turned out to be "much ado about nothing." As the economy grew more rapidly than
the Federal Reserve's "maximum speed target," there were concerns that the
economy would overheat and that inflation would accelerate. With this, the
Federal Reserve raised the discount rate three more times; the first two were
increases of 0.25 percent and the third was 0.50 percent. On the heels of the
0.50 percent increase in May, economic data began to show that the economy was
indeed slowing. All of these perception shifts gave rise to the simplistic
notion that there is a "new" and an "old economy," with companies that are
driven by opposing factors. Meanwhile, the "real" game is being played out in
the "real world" by "real companies" with "real business model advantage."
Companies that can capitalize on the major secular changes and scale product or
process advantage are at the heart of the Portfolio. These types of companies
tend to be able to weather slow-downs and expansions real or perceived.
The year began with a great deal of volatility. Cash held in anticipation
of Y2K problems fueled this volatility. January results were negative. February,
which included a Federal Reserve discount rate hike, saw strong appreciation on
both an absolute and relative basis. March was a strong return month for the
Portfolio. In April, concerns about an overheated economy resulted in a brief
shift in leadership to commodity-oriented inflation beneficiary companies. In
May, as economic data demonstrated that the economy was indeed slowing down, the
leading dependable companies the Portfolio owns performed well. In June, as
investors focused on companies that possess the ability to generate strong
earnings growth in the face of an expected economic slow-down, the Portfolio
benefited.
The Portfolio's best performance for the first half came from technology
holdings. The Portfolio has slightly overweighted technology names because TCW
believes the secular forces in place for technology continue to be very
compelling. Additionally, given the pace of change in technology-based
businesses, companies with true advantage can seize and control opportunities
more rapidly than in other areas of the economy. Technology names such as
Applied Materials, Cisco Systems, Intel, Maxim Integrated Products and Siebel
Systems were among the Portfolio's biggest contributors. Amgen, Medtronic and
Pfizer advanced strongly in the first half and the Portfolio continues to have a
substantial interest in Health Care franchise businesses.
Disappointments came from company-specific issues. Biogen declined on
weaker than expected revenue growth from its Avonex product. However, TCW
believes their future opportunities look bright. Lucent Technologies traded
lower on company guidance that revenue growth was slowing. However, the company
is in a strong position in the high-growth communications
19
<PAGE> 20
business where their broad offerings give them a key advantage in a multiple
protocol world. Microsoft, a long-term holding, declined significantly on the
announcement of the proposed, forced break-up of the company. Presently
Microsoft is pursuing an appeal and it may be another year or so before the
matter is resolved. Meanwhile, Microsoft is introducing new products. Finally,
Proctor and Gamble reported disruptions in their restructuring efforts, which
resulted in lower earnings guidance and the resignation of the new CEO. TCW is
monitoring their progress closely and at this time TCW believes the stock
represents a good value.
Future Investment Strategy
TCW believes that the Federal Reserve's rate increases are close to their
conclusion. TCW has begun to see signs of a slowing in consumer spending,
unemployment levels have risen slightly and inflation generally is absent from
the economy. The effect of six interest rate increases over a twelve-month
period is apparently taking its toll. If the Federal Reserve's goal is to keep
the economy from overheating without slowing the economy to the point of
recession, it would appear that the Federal Reserve need not tighten any
further. If consumer spending does slow and overall economic growth slows down
but does not decline, TCW believes there is an excellent backdrop for equity
investment.
The last time the Federal Reserve engendered numerous coordinated rate
increases was in 1994. In the environment that succeeded these rate increases in
1995, the economy did indeed slow down. As is typical when the Federal Reserve
is finished raising rates, growth companies outperform value companies. TCW
believes this is due to long-term growth companies' sensitivity to interest
rates. Rising rates erode their value faster than value companies whose returns
are not predicated on sustained growth. As the economy slowed in 1995, the
sectors that performed the best were healthcare, technology, consumer staples
and financials. The Portfolio presently has significant positions in each. The
poorest performing sectors were more economically sensitive and less
differentiable. These were consumer cyclicals, basic materials, energy and
capital equipment. The Portfolio is underweighted in these areas.
Dominant companies with defendable and scalable business model advantages
typically have pricing power and produce or distribute the products that are in
demand even through an economic slow-down. In any case, stock prices
historically are more sensitive to the level and trend of interest rates than
the earnings growth rates. As inflation remains benign and the economy slows,
interest rates should trend lower.
The views expressed in this report reflect those of the subadviser only
through the end of the period of the report as stated on the cover. The
subadviser's views are subject to change at any time based on market and other
conditions.
20
<PAGE> 21
ENTERPRISE ACCUMULATION TRUST
EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 96.31% PRINCIPAL AMOUNT VALUE
---------------------------------------------------------------------
<S> <C> <C>
BIOTECHNOLOGY -- 6.38%
Amgen Inc. (a) 356,200 $ 25,023,050
Genentech Inc. (a) 76,900 13,226,800
------------
38,249,850
BUSINESS SERVICES -- 3.58%
Paychex Inc. 511,300 21,474,600
CABLE -- 1.70%
Cox Communications Inc. (Class
A) (a) 223,900 10,201,444
COMMUNICATIONS -- 1.94%
JDS Uniphase Corporation (a) 97,200 11,651,850
COMPUTER HARDWARE -- 10.84%
Cisco Systems Inc. (a) 425,700 27,058,556
Dell Computer Corporation (a) 770,600 38,000,213
------------
65,058,769
COMPUTER SERVICES -- 1.64%
Pixar Inc. (a) 278,900 9,831,225
COMPUTER SOFTWARE -- 9.32%
Microsoft Corporation (a) 189,500 15,160,000
Siebel Systems Inc. (a) 249,000 40,727,062
------------
55,887,062
CONSUMER PRODUCTS -- 2.89%
Gillette Company 290,100 10,135,369
Procter & Gamble Company 125,300 7,173,425
------------
17,308,794
ELECTRONICS -- 3.58%
Applied Materials Inc. (a) 237,300 21,505,312
FINANCE -- 3.06%
Providian Financial Corporation 204,000 18,360,000
INSURANCE -- 5.66%
Progressive Corporation (Ohio) 459,000 33,966,000
MEDICAL INSTRUMENTS -- 2.56%
Medtronic Inc. 308,700 15,377,119
MEDICAL SERVICES -- 3.60%
Biogen Inc. (a) 335,100 21,613,950
MISC. FINANCIAL SERVICES -- 4.01%
The Charles Schwab Corporation 715,550 24,060,369
MULTI-LINE INSURANCE -- 2.69%
American International Group
Inc. 137,300 16,132,750
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
PHARMACEUTICALS -- 4.20%
Pfizer Inc. 524,350 $ 25,168,800
RETAIL -- 9.11%
Costco Wholesale Corporation
(a) 234,600 7,741,800
Home Depot Inc. 531,600 26,546,775
Wal-Mart Stores Inc. 353,900 20,393,487
------------
54,682,062
SEMICONDUCTORS -- 9.41%
Intel Corporation 193,600 25,881,900
Maxim Integrated Products Inc.
(a) 450,000 30,571,875
------------
56,453,775
TELECOMMUNICATIONS -- 2.06%
Lucent Technologies Inc. 208,800 12,371,400
TRANSPORTATION -- 8.08%
Kansas City Southern Industries
Inc. 356,700 31,634,831
Southwest Airlines Company 889,300 16,841,119
------------
48,475,950
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $460,939,213) 577,831,081
---------------------------------------------------------------------
REPURCHASE AGREEMENT -- 4.60%
---------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement,
5.50% due 07/03/00
Maturity Value $27,604,646
Collateral: U.S. Treasury
Note $27,260,000, 6.25% due
08/15/23, Value $28,787,197 $27,592,000 27,592,000
------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $27,592,000) 27,592,000
---------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $488,531,213) $605,423,081
OTHER ASSETS LESS LIABILITIES -- (0.91)% (5,461,096)
------------
NET ASSETS -- 100% $599,961,985
=====================================================================
</TABLE>
(a) Non-income producing security.
See notes to financial statements.
21
<PAGE> 22
ENTERPRISE ACCUMULATION TRUST
GROWTH AND INCOME PORTFOLIO
SUBADVISER'S COMMENTS
RETIREMENT SYSTEM INVESTORS INC.
NEW YORK, NEW YORK
Investment Management
Retirement System Investors Inc. ("RSI") has served as subadviser to the
Enterprise Growth and Income Portfolio since December 1, 1998. RSI manages
approximately $1.1 billion 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-term developments. In selecting stocks for the Portfolio, the subadviser
employs a "value-oriented" strategy. This means that the subadviser attempts to
identify stocks of companies that have greater value than is recognized by the
market. The subadviser 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 subadviser also considers
current and projected dividend yields. The subadviser compares this information
to that of other companies in determining relative value and dividend potential.
First Half 2000 Performance Review
The economy and corporate earnings continued their strong growth patterns,
while inflation inched up a bit during the first half. However, some signs of a
loss in momentum in both the economy and earnings surfaced as the period ended.
The stock market showed little gain for the first six months. Volatility
increased and sharp declines in April and May, particularly in smaller
technology and Internet issues, affected earlier gains. Growth stocks
outperformed value stocks among the larger companies. Looking at market sectors,
healthcare, utilities, energy and technology provided the best performance
overall.
The Portfolio's biggest lift to performance came from large technology
holdings such as Nortel Networks, Corning, EMC and Dallas Semiconductor. Another
factor positively influencing the Portfolio's results was light exposure in the
underperforming sectors of consumer cyclicals, communication services, and
consumer staples. Lucent Technologies and Motorola were out-of-favor,
non-contributors, in which the Portfolio recently increased holdings. The
Portfolio's overall technology sector position is close to the market
weightings. Helping performance among larger holdings was Tyco International and
long-lagging Emerson Electric in the diversified industrial sector, and Safeway
and Johnson & Johnson in the stable growth area. Laggards included Alcoa and
Ingersoll Rand in the basic materials and capital goods sector, which the
Portfolio may find attractive, in the event of a soft landing and extended
economic cycle. Honeywell International also disappointed based on an indicated
earnings growth shortfall.
Future Investment Strategy
Entering the second half of 2000, it appears the economy is slowing down,
profit growth is easing and inflation is inching up. The key issue is whether
the Federal Reserves' tightening moves will control inflation and provide a soft
or hard landing for the economy. A soft landing may be positive for equities, as
it may increase the odds of a further extended period of reasonably good
economic growth aided by high productivity. Under both scenarios, earnings
growth momentum may slow, more so under a hard landing. RSI's assumption is that
overall market price-to-earnings ("P/E") ratios may have a downward tendency as
long as inflationary pressures build. So, while prospective gains appear more
modest relative to the recent past, the market may rally later in the year as
monetary policy stabilizes.
RSI's investment strategy going forward may emphasize soft cyclicals,
capital goods/multi-industry, companies that benefit from higher productivity,
expansion in foreign markets and a soft landing in the U.S. RSI may also
maintain large holdings in defensive issues, which may be less affected by a
slowing economy and may offer attractive value. The Portfolio may remain
relatively underweighted in consumer industries and may continue to have close
to a market position in the larger technology companies. Overall, the
Portfolio's investments may have better than average future earnings growth, and
could be priced at about a 10 percent discount to the market's valuation.
The views expressed in this report reflect those of the subadviser only
through the end of the period of the report as stated on the cover. The
subadviser's views are subject to change at any time based on market and other
conditions.
22
<PAGE> 23
ENTERPRISE ACCUMULATION TRUST
GROWTH AND INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 85.22% PRINCIPAL AMOUNT VALUE
---------------------------------------------------------------------
<S> <C> <C>
AEROSPACE -- 4.18%
Honeywell International Inc. 84,700 $ 2,853,331
United Technologies Corporation 53,500 3,149,813
------------
6,003,144
BANKING -- 1.61%
Chase Manhattan Corporation 43,875 2,020,992
Wells Fargo & Company 7,500 290,625
------------
2,311,617
BROADCASTING -- 0.88%
Time Warner Inc. 16,570 1,259,320
BUILDING & CONSTRUCTION -- 1.93%
Armstrong Holdings, Inc. 1,200 18,375
Martin Marietta Materials Inc. 27,675 1,119,108
Southdown Inc. 28,375 1,638,656
------------
2,776,139
CHEMICALS -- 0.92%
Praxair Inc. 35,250 1,319,672
COMPUTER HARDWARE -- 5.84%
Cisco Systems Inc. (a) 720 45,765
Dallas Semiconductor
Corporation 97,590 3,976,792
EMC Corporation (a) 22,800 1,754,175
International Business Machines
Corporation 20,060 2,197,824
Xerox Corporation 20,300 421,225
------------
8,395,781
COMPUTER SERVICES -- 0.72%
Comverse Technology Inc. (a) 600 55,800
Safeguard Scientifics Inc. (a) 18,000 577,125
Sun Microsystems Inc. (a) 4,440 403,763
------------
1,036,688
COMPUTER SOFTWARE -- 1.48%
BMC Software Inc. (a) 37,850 1,380,934
Cadence Design Systems Inc. (a) 10,700 218,012
Computer Associates
International Inc. 10,400 532,350
Opus360 Corporation (a) 300 1,106
------------
2,132,402
CONSUMER PRODUCTS -- 2.56%
Kimberly-Clark Corporation 64,150 3,680,606
CONSUMER SERVICES -- 0.06%
United Parcel Service Inc. 1,500 88,500
CONTAINERS/PACKAGING -- 0.60%
Smurfit -- Stone Container
Corporation (a) 67,000 862,625
CRUDE & PETROLEUM -- 8.22%
BP Amoco (ADR) 25,400 1,436,687
Exxon Mobil Corporation 65,982 5,179,587
Royal Dutch Petroleum Company
(ADR) 47,145 2,902,364
Texaco Inc. 43,075 2,293,744
------------
11,812,382
ELECTRICAL EQUIPMENT -- 5.11%
Cypress Semiconductor
Corporation 3,000 126,750
Emerson Electric Company 119,590 7,220,246
------------
7,346,996
ELECTRONICS -- 0.41%
Gemstar International Group
Ltd. (a) 1,200 73,744
Integrated Device Technology 8,700 520,912
------------
594,656
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
FOOD, BEVERAGES &
TOBACCO -- 3.16%
Anheuser-Busch Companies, Inc. 59,000 $ 4,406,563
PepsiCo Inc. 1,650 73,322
Philip Morris Companies Inc. 2,340 62,156
------------
4,542,041
MACHINERY -- 1.65%
Ingersoll Rand Company 57,500 2,314,375
Snap-On Inc. 2,050 54,581
------------
2,368,956
MANUFACTURING -- 9.34%
Corning Inc. 34,800 9,391,650
Milacron Inc. 9,000 130,500
Tyco International Ltd. 82,400 3,903,700
------------
13,425,850
METALS & MINING -- 2.31%
Alcoa Inc. 114,240 3,312,960
MISC. FINANCIAL SERVICES -- 1.74%
Citigroup Inc. 22,000 1,325,500
Fannie Mae 22,350 1,166,391
------------
2,491,891
MULTI-LINE INSURANCE -- 1.32%
American General Corporation 3,300 201,300
American International Group
Inc. 14,412 1,693,410
------------
1,894,710
PAPER & FOREST PRODUCTS -- 0.18%
International Paper Company 8,400 250,425
PHARMACEUTICALS -- 6.81%
Bristol-Myers Squibb Company 21,610 1,258,783
Elan Corporation (ADR) (a) 44,950 2,177,266
Johnson & Johnson 38,765 3,949,184
Merck & Company Inc. 26,770 2,051,251
Pfizer Inc. 7,322 351,456
------------
9,787,940
PRINTING & PUBLISHING -- 2.22%
Lexmark International Group
Inc. (Class A) (a) 17,800 1,197,050
McGraw-Hill Companies Inc. 36,850 1,989,900
------------
3,186,950
RETAIL -- 4.42%
CVS Corporation 43,550 1,742,000
Federated Department Stores
Inc. (a) 10,100 340,875
Safeway Inc. (a) 80,500 3,632,563
Tiffany & Company 500 33,750
Wal-Mart Stores Inc. 10,450 602,181
------------
6,351,369
SAVINGS AND LOAN -- 0.51%
Washington Mutual Inc. 25,450 734,869
SEMICONDUCTORS -- 1.83%
Conexant Systems Inc. (a) 1,700 82,662
Intel Corporation 100 13,369
LSI Logic Corporation (a) 600 32,475
Texas Instruments Inc. 36,300 2,493,356
------------
2,621,862
TELECOMMUNICATIONS -- 12.45%
Bell Atlantic Corporation 55,800 2,835,338
Lucent Technologies Inc. 69,730 4,131,502
Nortel Networks Corporation 75,880 5,178,810
QUALCOMM Inc. (a) 350 21,000
SBC Communications Inc. 70,895 3,066,209
</TABLE>
23
<PAGE> 24
ENTERPRISE ACCUMULATION TRUST
GROWTH AND INCOME PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
Tellabs Inc. (a) 21,600 $ 1,478,250
Worldcom Inc. (a) 25,600 1,174,400
------------
17,885,509
TRANSPORTATION -- 1.28%
FedEx Corp. (a) 48,450 1,841,100
WIRELESS COMMUNICATIONS -- 1.48%
Motorola Inc. 72,800 2,115,750
Nokia Corporation (Class A)
(ADR) 250 12,484
------------
2,128,234
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $113,029,034) 122,445,194
---------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS -- 0.16%
---------------------------------------------------------------------
MISC. FINANCIAL SERVICES -- 0.16%
Kmart Financing (a) 6,200 225,913
------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(IDENTIFIED COST $359,672) 225,913
---------------------------------------------------------------------
COMMERCIAL PAPER -- 14.82%
---------------------------------------------------------------------
Consolidated Edison Company
Yrs. 1&2, 6.95% due 07/03/00 $ 500,000 499,807
Ford Motor Credit Company
6.78% due 07/06/00 6,000,000 5,994,350
General Electric Capital
Corporation, Discount Note,
6.72% due 07/06/00 6,000,000 5,994,400
General Motors Corporation
6.79% due 07/05/00 7,000,000 6,994,719
Pharmacia Corporation
6.95% due 07/05/00 1,820,000 1,818,594
------------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $21,301,870) 21,301,870
---------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
REPURCHASE AGREEMENT -- 0.62%
---------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement,
5.50% due 07/03/00,
Maturity Value $892,409
Collateral: U.S. Treasury
Note $875,000, 7.625% due
02/15/07, Value $938,392 $ 892,000 $ 892,000
------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $892,000) 892,000
---------------------------------------------------------------------
CALL OPTIONS WRITTEN -- (0.05)%
---------------------------------------------------------------------
Corning Inc., expires 07/22/00,
$250 (a) 10 (24,250)
Corning Inc., expires 08/19/00,
$270 (a) 20 (47,250)
------------
(71,500)
------------
TOTAL CALL OPTIONS WRITTEN
(PREMIUMS RECEIVED $(61,098)) (71,500)
---------------------------------------------------------------------
TOTAL INVESTMENTS, NET
(IDENTIFIED COST $135,521,478) $144,793,477
OTHER ASSETS LESS LIABILITIES -- (0.77)% (1,107,761)
------------
NET ASSETS -- 100% $143,685,716
=====================================================================
</TABLE>
(a) Non-income producing security.
(ADR) American Depository Receipt.
See notes to financial statements.
24
<PAGE> 25
ENTERPRISE ACCUMULATION TRUST
EQUITY INCOME PORTFOLIO
SUBADVISER'S COMMENTS
1740 ADVISERS, INC.
NEW YORK, NEW YORK
Investment Management
1740 Advisers has been subadviser to the Enterprise Equity Income Portfolio
since December 1, 1998. 1740 Advisers is a member of The MONY Group, Inc. (NYSE:
MNY) and manages approximately $1.3 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 2000 Performance Review
During the first half of the year, investors experienced two different
markets, both heavily influenced by the performance of "new economy"
stocks -- technology, media, and telecommunications. Up until the middle of
March these big-cap growth names, which dominate the S&P 500 and Nasdaq indices,
were market favorites and went almost straight up, while everything else
stagnated or declined. Then in a matter of weeks everything reversed;
technology-related stocks suffered a severe decline while many other groups went
up. Healthcare, energy, financial and some cyclicals experienced strong rallies.
The performance of the Equity Income Portfolio mirrored this reversal. The
Portfolio cannot own most technology, media, and telecommunications stocks
because these stocks have little or no dividend yield, and it does not have
substantial holdings in healthcare and the other groups that rallied as tech
declined. This pattern will very likely continue as long as the technology,
media, and telecommunications stocks constitute such a substantial portion of
the popular averages. They are great companies with exciting products and very
attractive future prospects. The valuation usually affects these attributes, and
from time to time they become excessively valued and almost everything else is
neglected. The market then generally corrects the disparity.
Future Investment Strategy
The outlook therefore is not great, but neither is it all negative. Stocks
may be supported by still growing earnings and improved valuations for most
companies, but may be constrained by concern about the Federal Reserve and still
rich valuations for the biggest growth names. The economic slowdown, worldwide
central bank concern about inflation and the growing Federal budget surplus, may
provide strong support for the bond market and some help for stocks.
All in all the best outcome, and the one that the Federal Reserve would
like, would be for most stocks to mark time for awhile, and for some of the most
overvalued names to sell off a bit. If the market surges upward and investors
move right back into the same large-cap technology names, the Federal Reserve
may lean toward a tighter policy.
The major risk continues to lie in these high quality, well-known growth
stocks and in the big averages. The new economy is for real, and these stocks
may have very attractive futures, but this is more than reflected in their
prices. This valuation disparity has created opportunity in the rest of the
market where many good companies are selling at more reasonable prices. If there
is another sell off in the growth sector, the rest of the market may not be
immune, but the values and the fact that many of these stocks have already
suffered major declines may provide some cushion.
The slower economy and the uncertainties regarding the Federal Reserve
indicate a more defensive strategy. This means less in economy-sensitive sectors
such as basic materials and more in healthcare and consumer staples. If the
Federal Reserve is nearing the end of its tightening, then financial stocks,
both banks and insurance, may do well. Finally, the energy sector remains as a
major overweight, including integrated oils, oil service and drilling and
natural gas. Demand remains strong, earnings estimates are increasing and
dividend yields remain attractive.
The views expressed in this report reflect those of the subadviser only
through the end of the period of the report as stated on the cover. The
subadviser's views are subject to change at any time based on market and other
conditions.
25
<PAGE> 26
ENTERPRISE ACCUMULATION TRUST
EQUITY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 93.71% PRINCIPAL AMOUNT VALUE
---------------------------------------------------------------------
<S> <C> <C>
AEROSPACE -- 3.60%
Honeywell International Inc. 6,000 $ 202,125
Northrop Grumman Corporation 5,500 364,375
United Technologies Corporation 7,000 412,125
-----------
978,625
AUTOMOTIVE -- 1.79%
Ford Motor Company 7,000 301,000
General Motors Corporation 3,000 174,187
Visteon Corporation 917 11,113
-----------
486,300
BANKING -- 5.22%
Bank of America Corporation 5,000 215,000
Bank of New York Company Inc. 6,500 302,250
Chase Manhattan Corporation 6,750 310,922
FleetBoston Financial
Corporation 4,500 153,000
Mellon Financial Corporation 4,000 145,750
Wells Fargo & Company 7,500 290,625
-----------
1,417,547
CHEMICALS -- 1.58%
Dow Chemical Company 7,000 211,313
Du Pont (E. I.) de Nemours &
Company 5,000 218,750
-----------
430,063
COMPUTER HARDWARE -- 0.99%
Xerox Corporation 13,000 269,750
CONGLOMERATES -- 2.11%
Minnesota Mining & Manufacturing
Company 4,000 330,000
Textron Inc. 4,500 244,406
-----------
574,406
CONSUMER NON-DURABLES -- 1.31%
Avon Products Inc. 8,000 356,000
CONSUMER PRODUCTS -- 2.30%
Colgate-Palmolive Company 4,000 239,500
Kimberly-Clark Corporation 4,500 258,188
Procter & Gamble Company 2,200 125,950
-----------
623,638
CRUDE & PETROLEUM -- 9.02%
BP Amoco (ADR) 10,000 565,625
Burlington Resources Inc. 6,500 248,625
Chevron Corporation 4,000 339,250
Exxon Mobil Corporation 8,500 667,250
Royal Dutch Petroleum Company
(ADR) 5,500 338,594
Texaco Inc. 5,500 292,875
-----------
2,452,219
ELECTRICAL EQUIPMENT -- 5.23%
Emerson Electric Company 6,000 362,250
General Electric Company 20,000 1,060,000
-----------
1,422,250
ENERGY -- 6.76%
Duke Energy Corporation 7,000 394,625
El Paso Energy Corporation 9,000 458,437
Enron Corporation 7,500 483,750
Williams Companies Inc. 12,000 500,250
-----------
1,837,062
FOOD & BEVERAGES & TOBACCO -- 0.91%
Coca-Cola Company 2,000 114,875
PepsiCo Inc. 3,000 133,313
-----------
248,188
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
INSURANCE -- 1.03%
Cigna Corporation 3,000 $ 280,500
MACHINERY -- 2.70%
Caterpillar Inc. 7,000 237,125
Deere & Company 8,000 296,000
Pitney Bowes Inc. 5,000 200,000
-----------
733,125
MANUFACTURING -- 0.99%
Eaton Corporation 4,000 268,000
METALS & MINING -- 1.28%
Alcoa Inc. 12,000 348,000
MISC. FINANCIAL SERVICES -- 2.00%
Citigroup Inc. 9,000 542,250
MULTI-LINE INSURANCE -- 0.40%
Lincoln National Corporation 3,000 108,375
OIL SERVICES -- 8.59%
Baker Hughes Inc. 9,000 288,000
Diamond Offshore Drilling Inc. 8,500 298,562
Halliburton Company 6,500 306,719
Kerr-McGee Corporation 5,000 294,688
KeySpan Corporation 8,000 246,000
Phillips Petroleum Company 5,500 278,781
Schlumberger Ltd. 4,000 298,500
Tidewater Inc. 9,000 324,000
-----------
2,335,250
PAPER & FOREST PRODUCTS -- 2.84%
Bowater Inc. 5,500 242,688
Georgia-Pacific Group 7,500 196,875
International Paper Company 9,000 268,312
Temple-Inland Inc. 1,500 63,000
-----------
770,875
PHARMACEUTICALS -- 18.23%
Abbott Laboratories 8,000 356,500
American Home Products
Corporation 8,500 499,375
Baxter International Inc. 5,500 386,719
Bristol-Myers Squibb Company 7,500 436,875
Eli Lilly & Company 5,500 549,313
Johnson & Johnson 5,500 560,312
Merck & Company Inc. 7,000 536,375
Pfizer Inc. 11,000 528,000
Pharmacia Corporation 8,000 413,500
Schering-Plough Corporation 6,500 328,250
Smithkline Beecham (ADR) 5,500 358,531
-----------
4,953,750
PRINTING & PUBLISHING -- 0.80%
McGraw-Hill Companies Inc. 4,000 216,000
PROPERTY -- CASUALTY INSURANCE -- 0.57%
Chubb Corporation 2,500 153,750
RAW MATERIALS -- 0.79%
Weyerhaeuser Company 5,000 215,000
REAL ESTATE -- 2.91%
Boston Properties Inc. 5,000 193,125
Crescent Real Estate Equities
Company 8,500 174,250
Equity Office Properties Trust 7,000 192,937
Equity Residential Properties
Trust 5,000 230,000
-----------
790,312
</TABLE>
26
<PAGE> 27
ENTERPRISE ACCUMULATION TRUST
EQUITY INCOME PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
TELECOMMUNICATIONS -- 9.76%
AT&T Corporation 7,000 $ 221,375
Bell Atlantic Corporation 8,500 431,906
BellSouth Corporation 9,000 383,625
GTE Corporation 6,500 404,625
SBC Communications Inc. 10,000 432,500
Sprint Corporation 6,000 306,000
U.S. West Inc. 5,500 471,625
-----------
2,651,656
-----------
TOTAL COMMON STOCKS
(IDENTIFIED COST $26,117,322) 25,462,891
---------------------------------------------------------------------
REPURCHASE AGREEMENT -- 5.01%
---------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement,
5.50% due 07/03/00,
Maturity Value $1,361,624
Collateral: U.S. Treasury Note
$1,390,350, 6.25% due
10/31/01,
Value $1,404,881 $1,361,000 1,361,000
-----------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $1,361,000) 1,361,000
---------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $27,478,322) $26,823,891
OTHER ASSETS LESS LIABILITIES -- 1.28% 348,139
-----------
NET ASSETS -- 100% $27,172,030
=====================================================================
</TABLE>
(ADR) American Depository Receipt.
See notes to financial statements.
27
<PAGE> 28
ENTERPRISE ACCUMULATION TRUST
INTERNATIONAL GROWTH PORTFOLIO
SUBADVISER'S COMMENTS
VONTOBEL USA INC.
NEW YORK, NEW YORK
Investment Management
Vontobel USA became the subadviser on April 1, 1999. Vontobel manages
approximately $2 billion and its normal investment minimum is $10 million.
Investment Objective
The objective of the Enterprise International Growth Portfolio is to seek
capital appreciation.
Investment Strategies
The International Growth Portfolio invests primarily in non-U.S. equity
securities that the subadviser believes are undervalued. The subadviser uses an
approach that involves bottom-up stock selection. The subadviser looks for
companies that are good, predictable businesses selling at attractive prices
relative to an estimate of intrinsic value. The subadviser diversifies
investments among European, Australian and Far East ("EAFE") markets.
First Half 2000 Performance Review
After outperforming EAFE in 1999, the Portfolio has given back some of the
excess returns during the first half of 2000. U.S. interest rate fears and
continued selling pressure on technology, media and telecommunications companies
contributed to the Portfolio's underperformance. Market events are mostly driven
by large capital flows, and it was no different during the first half as world
markets redefined value by selling off last year's high-priced technology, media
and telecommunications issues. Not surprisingly, Japan, which was last year's
best-performing market, was the worst-performer year-to-date, down 14 percent.
As bottom-up investors, Vontobel generally avoids making frequent changes
from a country or sector standpoint. This year, though, the Portfolio faced a
high valuation risk that exceeded Vontobel's margin of safety. At year-end 1999,
due to strong returns, the Portfolio was valued at a P/E ratio of 40 and an
earnings-per-share ("EPS") growth rate of 26 percent. Vontobel reduced the
Portfolio's technology, media and telecommunications weighting by approximately
14 percent in the first quarter and another 10 percent in the second quarter.
The Portfolio maintains more than 24 percent in technology, media and
telecommunications firms whose growth prospects and market leadership, Vontobel
believes, justify their lofty valuations. The sector rebalancing did not reduce
the growth profile of the Portfolio. At June 30, the Portfolio had a P/E ratio
of 24 and an EPS growth rate of 22 percent.
Future Investment Strategy
Day-to-day sentiment changes but Vontobel's investment process stays the
same. Vontobel invests the Portfolio in firms with defensible franchises that
show potential growth at much more reliable rates than their competitors, and
Vontobel invests with a five-year time horizon. The environment for bottom-up
investors is very challenging but highly attractive candidates have not been
lacking in the Portfolio's investable universe. This year the Portfolio added
close to 25 new stocks that Vontobel has been following over the last three to
five years. These companies have strong franchises and have continued to
generate better than 15 percent growth in cash flow and earnings. While
repositioning the Portfolio's holdings has not yet benefited returns, Vontobel
believes the fundamentals in international markets remain very attractive.
Returns on capital ("ROC") and returns on equity ("ROE") of companies in Europe,
and even more so in Japan, seem to be reversing their negative trends. Taking
into account their ongoing restructuring and the enhanced use of corporate
balance sheets, which for the most part are much stronger than those of their
U.S. counterparts, Vontobel believes the Portfolio's holdings may have great
potential for improved profitability, as expressed in higher ROE's and ROC's.
The Portfolio remains defensively positioned against the MSCI EAFE benchmark in
terms of sector allocation and individual stock picks.
As with all international funds, the Enterprise 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 subadviser only
through the end of the period of the report as stated on the cover. The
subadviser's views are subject to change at any time based on market and other
conditions.
28
<PAGE> 29
ENTERPRISE ACCUMULATION TRUST
INTERNATIONAL GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 98.30% PRINCIPAL AMOUNT VALUE
---------------------------------------------------------------------
<S> <C> <C>
AUSTRALIA -- 3.19%
Computershare Ltd. 95,700 $ 491,635
Macquarie Bank Ltd. 38,000 592,691
Powerlan Ltd. 585,500 611,376
Westfield Holdings 177,058 1,215,930
Woodside Petroleum 121,700 946,175
------------
3,857,807
DENMARK -- 1.03%
Novo Nordisk (Class B) 7,300 1,242,243
FINLAND -- 2.90%
Nokia Corporation (Class A)
(ADR) 53,600 2,676,650
Perlos Corp 26,400 834,255
------------
3,510,905
FRANCE -- 10.18%
Altran Technologies 8,000 1,566,472
Atos 10,000 935,606
Axa 10,000 1,575,256
Cap Gemini 3,108 547,450
Carrefour 16,000 1,093,705
CGIP 23,200 987,848
Dassault Systemes 10,000 932,742
L'Oreal 600 519,548
Publicis 1,900 745,526
Sidel 6,800 551,492
Societe Generale 9,000 541,315
STMicroelectronics 12,500 787,628
Total Fina (Class B) 10,000 1,533,249
------------
12,317,837
GERMANY -- 3.00%
Allianz 4,000 1,437,015
Bayerische Motoren Werke 25,800 779,580
Muenchener Rueckvers 4,500 1,413,434
------------
3,630,029
HONG KONG -- 1.95%
Dah Sing Financial Group 159,000 640,446
Hutchison Whampoa 65,000 817,138
SmarTone Telecommunications
Holdings Ltd. 135,000 298,730
Sun Hung Kai Properties Ltd. 85,000 610,609
------------
2,366,923
IRELAND -- 2.11%
Allied Irish Banks 63,900 572,230
CRH 27,400 495,709
Elan Corporation (ADR) (a) 30,600 1,482,188
------------
2,550,127
ITALY -- 4.24%
ENI 164,800 951,875
Parmalat Finanz 470,000 663,192
Pininfarina 40,000 674,400
Pirelli 450,000 1,183,590
Telecom Italia 46,000 632,394
TIM 100,000 1,021,529
------------
5,126,980
JAPAN -- 20.63%
Asatsu-DK Inc. 15,000 614,957
Benesse Corp 9,500 658,075
Fuji Photo Film Company 11,000 449,932
Fujitsu Ltd. 53,000 1,833,184
Fujitsu Support & Service Inc. 3,800 376,043
Hikari Tsushin Inc. 1,400 57,396
Hoya Corporation 9,000 805,806
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
Mikuni Coca-Cola Bottling
Company Ltd. 24,000 $ 348,108
Murata Manufacturing Company
Ltd. 11,000 1,577,871
Nichiei Company Ltd. 17,500 286,980
Nintendo Company Ltd. 10,000 1,745,441
Nippon Telegraph & Telephone
Corporation 8 106,310
Nippon TV Network 1,650 1,072,994
NTT Mobile Communication
Network Inc. 60 1,622,921
Rohm Company Ltd. 7,000 2,045,144
Ryohin Keikaku Company Ltd. 9,000 1,145,092
Secom Company Ltd. 12,000 876,490
Seven Eleven Japan 10,000 835,964
Shin-Etsu Chemical Company Ltd. 21,000 1,064,794
Shohkoh Fund 5,100 1,148,768
Sony Corporation 12,000 1,119,646
Takeda Chemical Industries 31,000 2,033,457
Tokyo Broadcasting System Inc. 31,000 1,338,108
Tokyo Electron Ltd. 9,000 1,231,610
Yasuda Fire & Marine Insurance
Company Ltd. 109,000 574,252
------------
24,969,343
MALAYSIA -- 0.03%
Malayan Banking Berhad 9,000 36,474
NETHERLANDS -- 6.88%
Aegon 41,032 1,459,988
Aegon (ADR) 12,192 434,340
ASM Lithography Holdings 39,000 1,676,244
Getronics 38,000 585,899
Heineken 23,800 1,448,519
Philips Electronics 35,936 1,694,821
Unilever 22,400 1,027,563
------------
8,327,374
NORWAY -- 1.65%
Nycomed Amersham 85,300 825,115
Tomra Systems 44,200 1,171,901
------------
1,997,016
SINGAPORE -- 2.23%
Datacraft Asia Ltd. 82,680 727,584
DBS Group Holdings 67,000 861,262
Singapore Press Holdings Ltd. 70,788 1,106,703
------------
2,695,549
SPAIN -- 1.15%
Banco Santander Central Hispano 63,000 664,615
Telefonica 34,000 730,346
------------
1,394,961
SWEDEN -- 7.49%
Assa Abloy (Class B) 100,117 2,009,151
Investor (Class B) 37,100 506,865
LM Ericsson Telephone Company
(Class B) 89,500 1,770,720
Modern Time Group (Class B) (a) 17,200 819,048
Nordbanken Holdings 202,300 1,525,278
Securitas (Class B) 41,500 879,875
Skandia Forsakrings 58,800 1,553,333
------------
9,064,270
SWITZERLAND -- 9.40%
Credit Suisse Group 12,000 2,387,053
Givaudan 372 113,221
Nestle 625 1,250,920
Pharma Vision 2000 (a) 600 400,907
PSP Swiss Property 7,500 689,634
</TABLE>
29
<PAGE> 30
ENTERPRISE ACCUMULATION TRUST
INTERNATIONAL GROWTH PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
Rieter Holdings 3,400 $ 1,146,325
Roche Holdings 72 761,577
Roche Holdings Genusschein 250 2,433,642
Schweizerische
Rueckversicherungs-
Gesellschaft 649 1,322,825
Zurich Allied 1,750 864,648
------------
11,370,752
UNITED KINGDOM -- 20.24%
3I Group 58,500 1,202,937
Abbey National 20,000 239,070
Amvescap 105,000 1,684,080
Astrazeneca 30,000 1,400,374
BP Amoco (ADR) 18,600 1,052,062
Capita Group 86,300 2,111,487
Compass Group 160,100 2,108,762
Dixons Group 226,476 921,812
Glaxo Wellcome 46,700 1,361,652
Hays 115,400 643,444
HSBC Holdings 101,800 1,163,723
Invensys 275,000 1,031,934
Lasmo 360,000 765,326
Logica 40,000 946,595
Misys 69,400 585,951
Provident Financial 49,100 516,338
Prudential Corporation 90,000 1,318,212
Royal Bank Scot Group 55,000 920,419
Vodafone AirTouch 540,947 2,185,412
WPP Group 160,200 2,339,146
------------
24,498,736
TOTAL COMMON STOCKS
(IDENTIFIED COST $104,909,084) 118,957,326
---------------------------------------------------------------------
PREFERRED STOCKS -- 1.38%
---------------------------------------------------------------------
GERMANY -- 1.38%
Prosieben Media 7,500 932,623
SAP 4,000 737,697
------------
TOTAL PREFERRED STOCKS
(IDENTIFIED COST $1,644,355) 1,670,320
---------------------------------------------------------------------
WARRANTS -- 0.30%
---------------------------------------------------------------------
SWITZERLAND -- 0.30%
Zuercher Kantonalbank Call
Warrant (a)(e) 550,000 357,384
------------
TOTAL WARRANTS
(IDENTIFIED COST $352,888) 357,384
---------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- ------------
<S> <C> <C>
REPURCHASE AGREEMENTS -- 0.18%
---------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement,
5.50% due 07/03/00,
Maturity Value $232,100
Collateral: U.S. Treasury
Note $225,000 6.375% due
08/15/02, Value $235,461 $222,000 $ 222,000
------------
TOTAL REPURCHASE AGREEMENTS
(IDENTIFIED COST $222,000) 222,000
---------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $107,128,327) $121,207,030
OTHER ASSETS LESS LIABILITIES -- (0.16)% (195,250)
------------
NET ASSETS -- 100% $121,011,780
=====================================================================
</TABLE>
(a) Non-income producing security.
(e) The warrants entitle the portfolio to purchase 1 share of Credit Suisse
Group for every 40 warrants held and 290 CHF until September 15, 2000.
(ADR) American Depository Receipt.
Industry classifications for the portfolio as a percentage of total market value
at June 30, 2000 are as follows: (unaudited)
<TABLE>
<CAPTION>
Industry
--------
<S> <C>
Aerospace & Military Technology 1.28%
Appliances & Household Durables 2.31%
Automobiles 1.19%
Banking 7.63%
Beverages & Tobacco 1.47%
Broadcasting & Publishing 4.93%
Building Materials & Components 2.05%
Business & Public Service 10.37%
Chemicals 0.87%
Data Processing & Reproduction 4.49%
Electrical & Electronics 2.95%
Electronic Components, Instruments 8.19%
Energy Sources 4.30%
Financial Services 7.44%
Food & Household Products 3.20%
Health & Personal Care 9.87%
Industrial Components 0.97%
Insurance 8.04%
Machinery & Engineering 1.41%
Miscellaneous 1.65%
Merchandising 0.94%
Multi-Industry 1.48%
Real Estate 2.06%
Recreation, Other Consumer Goods 1.80%
Telecommunications 7.64%
Textiles & Apparel 0.94%
Cash/Other 0.53%
------
Total 100.00%
======
</TABLE>
See notes to financial statements.
30
<PAGE> 31
ENTERPRISE ACCUMULATION TRUST
MANAGED PORTFOLIO
SUBADVISERS' COMMENTS
OPCAP ADVISORS, INC.
NEW YORK, NEW YORK
SANFORD C. BERNSTEIN & CO., INC.
NEW YORK, NEW YORK
Investment Management
OpCap Advisors, a wholly owned subsidiary of Oppenheimer Capital manages
approximately $40 billion for institutional clients, and its normal investment
minimum is $20 million.
Sanford C. Bernstein & Co., Inc., which has approximately $81 billion in
assets under management, became co-subadviser of the Portfolio on November 1,
1999. Bernstein's normal investment minimum is $5 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
economic and market trends and the relative values available from such types of
securities at any given time. There is neither a minimum nor a maximum
percentage of the 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 subadvisers believe 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 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 2000 Performance Review -- OpCap Advisors
The Portfolio's technology holdings were the largest detractor from
performance for the first half of the year. Although the Portfolio has
significant investments in this sector, the tech stocks owned by the Portfolio,
such as Computer Associates International and Sabre Holdings, trailed by a wide
margin the returns of the highly-valued, more speculative tech stocks that led
the market, especially in the first quarter. The Portfolio's holdings of
consumer non-durable and financial stocks contributed most to performance in the
first half.
Because the market has been so volatile and the outlook for interest rates
is uncertain, the Portfolio maintained a defensive investment posture and this
helped preserve capital. At June 30, 2000, of the portion of the Portfolio
managed by OpCap Advisors, 76 percent of net assets were allocated to common
stocks, 15 percent to fixed-income securities and 9 percent to cash equivalents.
The Portfolio's holdings of fixed-income securities and cash equivalents provide
a buffer against stock market volatility, generate income and represent a
resource to buy quality stocks when they become available at attractive prices.
First Half 2000 Performance Review -- Sanford C. Bernstein
Security selection added to relative returns in the first half of 2000.
Security selection within the energy sector detracted most, largely because the
Portfolio avoided independents and oil service companies because they are
extremely volatile and highly leveraged. These stocks outperformed, particularly
in the first quarter, because their earnings are extremely sensitive to the
price of oil. Many of the Portfolio's paper and chemical holdings in the
industrial resources sector also underperformed, due to concerns about a U.S.
economic slowdown and rising inventories in certain grades of paper. Offsetting
this, however, was strong stock
31
<PAGE> 32
selection in technology. The Portfolio avoided, or underweighted, most of the
technology stocks that fell furthest this spring, while the semi-conductor and
semi-conductor equipment companies that the Portfolio overweighted, rallied
strongly.
The largest contributors to performance were the Portfolio's overweighted
positions in Advanced Micro Devices, Hewlett Packard, Intel and Champion
International, and the Portfolio's underweight position in Yahoo!. The largest
detractors from performance were the Portfolio's overweighted positions in
Motorola and Bristol Myers Squibb, and the Portfolio's underweighted positions
in Micron Technology and Pharmacia.
The Portfolio's sector weights hurt performance. The Portfolio's
underweight of the strong consumer growth sector was the biggest detractor,
despite positive security selection within the sector. The Portfolio's modest
overweight of consumer cyclicals was also a negative. Offsetting this was the
positive impact of the Portfolio's overweighted position in energy.
Future Investment Strategy -- OpCap Advisors
Looking ahead, OpCap remains focused on long-term investment in companies
that create shareholder value by earning high returns on capital, generating
significant free cash flow and effectively using that cash flow to increase the
value of their business. The companies the Portfolio is invested in continue to
deliver strong financial results, and OpCap expects those results may translate
into higher share prices over time.
Future Investment Strategy -- Sanford C. Bernstein
Bernstein continues to see unusually large opportunities in the value
realm. The Portfolio remains attractively priced, relative to the S&P 500, with
price-to-earnings and price-to-book ratios lower than that of the Index, and
with a higher dividend yield. The Portfolio's weighted-average capitalization is
somewhat higher than that of the S&P 500, as well.
The views expressed in this report reflect those of the subadvisers only
through the end of the period of the report as stated on the cover. The
subadvisers' views are subject to change at any time based on market and other
conditions.
32
<PAGE> 33
ENTERPRISE ACCUMULATION TRUST
MANAGED PORTFOLIO
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 84.97% PRINCIPAL AMOUNT VALUE
----------------------------------------------------------------------
<S> <C> <C>
AEROSPACE -- 2.47%
Boeing Company 902,020 $ 37,715,711
Honeywell International Inc. 56,100 1,889,869
Northrop Grumman Corporation 21,400 1,417,750
--------------
41,023,330
AUTOMOTIVE -- 0.90%
Delphi Automotive Systems
Corporation 225,100 3,278,019
Ford Motor Company 116,900 5,026,700
General Motors Corporation 17,599 1,021,842
Genuine Parts Company 234,900 4,698,000
TRW Inc. 15,700 680,987
Visteon Corporation 15,306 185,586
--------------
14,891,134
BANKING -- 6.37%
Bank of America Corporation 271,500 11,674,500
Bank One Corporation 222,000 5,896,875
Chase Manhattan Corporation 62,800 2,892,725
First Union Corporation 72,300 1,793,944
FleetBoston Financial
Corporation 478,200 16,258,800
J. P. Morgan & Company Inc. 15,200 1,673,900
M & T Bank Corporation 50,500 22,725,000
National City Corporation 37,300 636,431
PNC Bank Corporation 78,100 3,660,937
Summit Bancorp 33,000 812,625
Wells Fargo & Company 978,000 37,897,500
--------------
105,923,237
BIOTECHNOLOGY -- 0.38%
Amgen Inc. (a) 91,200 6,406,800
BROADCASTING -- 0.48%
News Corporation Ltd. (ADR) 35,000 1,662,500
Time Warner Inc. 27,900 2,120,400
Viacom Inc. (a) 62,500 4,261,719
--------------
8,044,619
BROKERS -- 0.41%
Lehman Brothers Holdings Inc. 72,200 6,827,413
CAPITAL GOODS &
SERVICES -- 0.11%
Cooper Industries Inc. 58,600 1,908,163
CHEMICALS -- 2.74%
Ashland Inc. 93,100 3,264,319
Du Pont (E. I.) de Nemours &
Company 841,700 36,824,375
Union Carbide Corporation 110,700 5,479,650
--------------
45,568,344
COMPUTER HARDWARE -- 5.69%
Apple Computer Inc. 62,200 3,257,725
Cisco Systems Inc. (a) 596,600 37,921,387
Compaq Computer Corporation 66,800 1,707,575
Dell Computer Corporation (a) 134,200 6,617,738
EMC Corporation (a) 216,400 16,649,275
Hewlett-Packard Company 126,300 15,771,713
International Business
Machines Corporation 116,100 12,720,206
--------------
94,645,619
COMPUTER SERVICES -- 2.19%
Advanced Micro Devices Inc.
(a) 37,100 2,865,975
America Online Inc. (a) 95,500 5,037,625
Electronic Data Systems
Corporation 76,900 3,172,125
Sabre Holdings Corporation
(Class A) (a) 192,491 5,485,993
Solectron Corporation (a) 53,000 2,219,375
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
Sun Microsystems Inc. (a) 172,100 $ 15,650,344
Yahoo! Inc. (a) 16,000 1,982,000
--------------
36,413,437
COMPUTER SOFTWARE -- 4.74%
Computer Associates
International Inc. 606,800 31,060,575
Compuware Corporation (a) 320,300 3,323,113
Microsoft Corporation (a) 319,100 25,528,000
Oracle Corporation (a) 225,400 18,947,687
--------------
78,859,375
CONGLOMERATES -- 1.87%
Minnesota Mining &
Manufacturing Company 179,400 14,800,500
Textron Inc. 300,000 16,293,750
--------------
31,094,250
CONSUMER PRODUCTS -- 0.69%
Black & Decker Corporation 33,600 1,320,900
Briggs & Stratton Corporation 8,000 274,000
Procter & Gamble Company 99,800 5,713,550
Whirlpool Corporation 90,600 4,224,225
--------------
11,532,675
CRUDE & PETROLEUM -- 5.05%
Anadarko Petroleum Corporation 57,800 2,850,263
Chevron Corporation 389,700 33,051,431
Exxon Mobil Corporation 299,277 23,493,244
Royal Dutch Petroleum Company
(ADR) 210,800 12,977,375
Texaco Inc. 43,300 2,305,725
Unocal Corporation 240,000 7,950,000
USX Marathon Group 52,000 1,303,250
--------------
83,931,288
ELECTRICAL EQUIPMENT -- 2.76%
Emerson Electric Company 94,500 5,705,437
General Electric Company 757,300 40,136,900
--------------
45,842,337
ELECTRONICS -- 0.87%
Applied Materials Inc. (a) 111,800 10,131,875
KLA-Tencor Corporation (a) 46,000 2,693,875
Rockwell International
Corporation 50,800 1,600,200
--------------
14,425,950
ENERGY -- 1.44%
AES Corporation (a) 61,600 2,810,500
Cinergy Corporation 154,300 3,925,006
El Paso Energy Corporation 28,800 1,467,000
FirstEnergy Corporation 273,200 6,386,050
New Century Energies Inc. 190,000 5,700,000
TXU Corporation 124,600 3,675,700
--------------
23,964,256
ENTERTAINMENT & LEISURE -- 0.28%
Walt Disney Company 85,000 3,299,063
Carnival Corporation 70,000 1,365,000
--------------
4,664,063
FINANCE -- 2.51%
Dun & Bradstreet Corporation 114,800 3,286,150
Household International Inc. 576,900 23,977,406
Merrill Lynch & Company Inc. 31,600 3,634,000
MGIC Investment Corporation 77,000 3,503,500
Morgan Stanley Dean Witter &
Company 88,600 7,375,950
--------------
41,777,006
</TABLE>
33
<PAGE> 34
ENTERPRISE ACCUMULATION TRUST
MANAGED PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
Food, Beverages & Tobacco -- 1.80%
Anheuser-Busch Companies, Inc. 77,400 $ 5,780,813
Coca-Cola Company 151,800 8,719,012
Conagra Inc. 108,800 2,074,000
Fortune Brands Inc. 74,000 1,706,625
General Mills Inc. 65,400 2,501,550
Philip Morris Companies Inc. 331,700 8,810,781
Unilever NV 7,000 301,000
--------------
29,893,781
HOTELS & RESTAURANTS -- 2.89%
McDonald's Corporation 1,457,400 48,003,112
INSURANCE -- 0.49%
XL Capital Ltd. (Class A) 151,961 8,224,889
MANUFACTURING -- 1.95%
ITT Industries Inc. 870,000 26,426,250
Tyco International Ltd. 126,400 5,988,200
--------------
32,414,450
MEDICAL INSTRUMENTS -- 0.07%
PE Biosystems Group 18,400 1,212,100
MEDICAL SERVICES -- 0.11%
UnitedHealth Group Inc. 22,100 1,895,075
METALS & MINING -- 0.46%
Alcoa Inc. 265,200 7,690,800
Arch Coal Inc. 1 5
--------------
7,690,805
MISC. FINANCIAL
SERVICES -- 5.70%
American Express Company 117,900 6,145,538
Citigroup Inc. 583,500 35,155,875
Fannie Mae 116,800 6,095,500
Freddie Mac 1,082,600 43,845,300
John Hancock Financial
Services Inc. (a) 149,500 3,541,281
--------------
94,783,494
MULTI-LINE INSURANCE -- 0.91%
American General Corporation 73,000 4,453,000
American International Group
Inc. 76,400 8,977,000
Lincoln National Corporation 48,900 1,766,512
--------------
15,196,512
OIL SERVICES -- 1.68%
Amerada Hess Corp 98,800 6,100,900
Conoco Inc., Class B 50,600 1,242,863
Occidental Petroleum
Corporation 341,300 7,188,631
Phillips Petroleum Company 147,000 7,451,062
Rowan Companies Inc. 113,300 3,441,488
Tosco Corporation 90,000 2,548,125
--------------
27,973,069
PAPER & FOREST PRODUCTS -- 0.39%
Fort James Corporation 4,400 101,750
Georgia-Pacific Group 28,200 740,250
International Paper Company 189,525 5,650,214
--------------
6,492,214
PAPER PRODUCTS -- 0.26%
Westvaco Corporation 171,500 4,255,344
PHARMACEUTICALS -- 8.78%
Abbott Laboratories 62,100 2,767,331
American Home Products
Corporation 579,200 34,028,000
Baxter International Inc. 102,700 7,221,094
Bristol-Myers Squibb Company 323,000 18,814,750
Eli Lilly & Company 61,200 6,112,350
Johnson & Johnson 163,500 16,656,563
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
Merck & Company Inc. 229,400 $ 17,577,775
Pfizer Inc. 318,700 15,297,600
Pharmacia Corporation 478,261 24,720,115
Schering-Plough Corporation 56,400 2,848,200
--------------
146,043,778
PROPERTY-CASUALTY INSURANCE -- 0.14%
St. Paul Companies Inc. 68,500 2,337,563
PUBLISHING -- 0.04%
New York Times Company 16,800 663,600
RAW MATERIALS -- 0.10%
Weyerhaeuser Company 38,900 1,672,700
RETAIL -- 4.21%
CVS Corporation 28,000 1,120,000
Federated Department Stores
Inc. (a) 153,100 5,167,125
Gap Inc. 42,900 1,340,625
Home Depot Inc. 177,500 8,863,906
K-Mart Corporation (a) 144,000 981,000
Kroger Company (a) 1,090,000 24,048,125
Limited Inc. 27,400 592,525
May Department Stores Company 198,800 4,771,200
Target Corporation 44,200 2,563,600
TJX Companies Inc. 48,500 909,375
Wal-Mart Stores Inc. 340,800 19,638,600
--------------
69,996,081
SAVINGS AND LOAN -- 0.39%
Golden West Financial
Corporation 96,300 3,930,244
Washington Mutual Inc. 86,700 2,503,462
--------------
6,433,706
SEMICONDUCTORS -- 3.75%
Intel Corporation 317,400 42,432,412
LSI Logic Corporation (a) 59,600 3,225,850
Teradyne Inc. (a) 39,800 2,925,300
Texas Instruments Inc. 200,000 13,737,500
--------------
62,321,062
TECHNOLOGY -- 0.12%
Agilent Technologies Inc. (a) 2 148
Micron Technology Inc. (a) 22,900 2,016,631
--------------
2,016,779
TELECOMMUNICATIONS -- 6.51%
AT&T Corporation 197,100 6,233,287
Bell Atlantic Corporation 607,700 30,878,756
BellSouth Corporation 36,700 1,564,338
General Motors Corporation
(Class H)-Hughes Electronics
Corporation (a) 1 88
GTE Corporation 128,400 7,992,900
Lucent Technologies Inc. 196,900 11,666,325
Nortel Networks Corporation 272,000 18,564,000
QUALCOMM Inc. (a) 47,600 2,856,000
SBC Communications Inc. 189,200 8,182,900
Sprint Corporation 123,000 6,273,000
U.S. West Inc. 7,600 651,700
Worldcom Inc. (a) 293,000 13,441,375
--------------
108,304,669
TRANSPORTATION -- 0.44%
AMR Corporation (a) 110,000 2,908,125
Burlington Northern Santa Fe
Corporation 8,800 201,850
Union Pacific Corporation 112,800 4,194,750
--------------
7,304,725
</TABLE>
34
<PAGE> 35
ENTERPRISE ACCUMULATION TRUST
MANAGED PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
UTILITIES -- 0.97%
Ameren Corporation 167,200 $ 5,643,000
American Electric Power Inc. 185,700 5,501,362
GPU Inc. 183,500 4,965,969
--------------
16,110,331
WASTE MANAGEMENT -- 0.35%
Waste Management Inc. 307,100 5,834,900
WIRELESS COMMUNICATIONS -- 0.51%
Motorola Inc. 291,000 8,457,188
--------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $1,290,716,708) 1,413,275,223
----------------------------------------------------------------------
COMMERCIAL PAPER -- 6.30%
----------------------------------------------------------------------
American Express Credit
Corporation, 6.46% due
07/05/00 $ 35,000,000 34,974,878
Ford Motor Credit Company
6.53% due 07/19/00 35,000,000 34,885,725
Morgan Stanley Dean Witter
6.50% due 07/10/00 35,000,000 34,943,125
--------------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $104,803,728) 104,803,728
----------------------------------------------------------------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS -- 6.31%
----------------------------------------------------------------------
Fannie Mae
6.50% due 08/15/04 105,000,000 102,963,630
U.S. Treasury Note
7.875% due 08/15/01 1,976,500 2,005,531
--------------
104,969,161
--------------
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(IDENTIFIED COST $105,983,948) 104,969,161
----------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----
<S> <C> <C>
REPURCHASE AGREEMENT -- 1.19%
----------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement, 5.50%
due 07/03/00,
Maturity Value $19,847,704
Collateral: U.S. Treasury
Bond $10,000,000, 6.25% due
08/15/23, Value $10,558,516
U.S. Treasury Note
$9,505,000, 7.625% due
02/15/07, Value $10,193,623 19,843,000 $ 19,843,000
--------------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $19,843,000) 19,843,000
----------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $1,521,347,384) $1,642,891,112
OTHER ASSETS LESS LIABILITIES -- 1.23% 20,475,908
--------------
NET ASSETS -- 100% $1,663,367,020
======================================================================
</TABLE>
(a) Non-income producing security.
See notes to financial statements.
35
<PAGE> 36
ENTERPRISE ACCUMULATION TRUST
BALANCED PORTFOLIO
SUBADVISER'S COMMENTS
MONTAG & CALDWELL
ATLANTA, GEORGIA
Investment Management
Montag & Caldwell, which has approximately $33 billion in assets under
management, became subadviser to the Portfolio on July 15, 1999. Montag's normal
investment minimum for a separate account is $40 million.
Investment Objective
The Portfolio seeks long-term total return.
Investment Strategies
Generally, between 55 percent and 75 percent of the Balanced Portfolio's
total assets will be invested in equity securities, and at least 25 percent of
the Balanced Portfolio's total assets will be invested in fixed income
securities. The portfolio allocation will vary based upon the subadviser's
assessment of the return potential of each asset class. For equity investments,
the subadviser uses a bottom-up approach to stock selection, focusing on high
quality, well-established companies that have a strong history of earnings
growth; attractive prices relative to the company's potential for above average;
long-term earnings and revenue growth; strong balance sheets; a sustainable
competitive advantage; the potential to become (or currently are) industry
leaders; and the potential to outperform the market during downturns. When
selecting fixed income securities, the subadviser will seek to maintain the
Portfolio's weighted average duration within 20 percent of the duration of the
Lehman Brothers Government Corporate Index. Emphasis is also placed on
diversification and credit analysis. The Portfolio will only invest in fixed
income securities with an "A" or better rating. Fixed income investments will
include: U.S. Government securities; corporate bonds; mortgage/asset-backed
securities; and money market securities and repurchase agreements.
First Half 2000 Performance Review
The stock market as measured by the S&P 500 Index was negative for most of
the first quarter of 2000 until the brisk rally in March pushed the index into
modestly positive territory. The divergence in performance between technology
stocks and all other stocks continued to widen until the end of the quarter. The
100 largest companies on the Nasdaq gained nearly 19 percent during the quarter,
while the 439 non-tech stocks in the S&P 500 were on average down for the
quarter. During the first quarter of 2000, the strength of the Portfolio's
technology issues did not offset the weakness of other holdings. Because Montag
believes that many technology stocks have become too highly priced, the
Portfolio has maintained a more conservative position in technology relative to
the market. In the Balanced Portfolio, bonds provided a positive return for the
quarter.
Stocks finished the second quarter lower as investors reacted negatively to
the prospects of higher interest rates and their impact on a fully valued
market. Concerns also surfaced about whether many developing technology and
Internet companies would ever post a profit, leading to a sell off in this
overvalued sector of the market. From its peak on March 10 to its low on May 24,
the Nasdaq declined over 35 percent and finished the quarter down 13 percent.
The S&P 500 finished the quarter down 2.7 percent.
In this difficult environment, companies with good earnings and more
conservative valuations tended to do well. As evidence of this, two of the best
performing sectors of the S&P 500 were healthcare, up 22 percent, and consumer
staples, up 6 percent.
Healthcare was the best performing sector of the S&P 500 for the second
quarter. Among the Portfolio's holdings, Johnson & Johnson was the standout,
gaining 45 percent for the quarter, while Schering Plough and Pfizer rose over
30 percent. In the consumer staple area, Bestfoods increased over 48 percent as
it agreed to be acquired by Unilever, while Coca-Cola and PepsiCo gained over 20
percent.
The bond portion of the Portfolio provided some pleasant surprises.
Although the Federal Reserve raised short-term interest rates three times during
the period, yields on long-term Treasury bonds actually fell. The federal budget
surplus has caused the government to buy back bonds to retire debt, particularly
long-term debt that offers the greatest potential interest savings. The
government has conducted "reverse auctions," where it is willing to pay a
premium to retire these bonds prior to maturity. This
36
<PAGE> 37
caused Treasury bond prices to rise and yields to fall. The Portfolio benefited
from this unusual event because of its heavy weighting in long-term Treasury
bonds. In addition, the Portfolio also benefited from the unusually large, extra
yield offered by long-term corporate bonds compared to comparably maturing
Treasury securities. Meanwhile, mortgage-backed securities produced strong
returns, as the rising interest rate environment made it unlikely that
homeowners would refinance their debt.
Future Investment Strategy
Because Montag & Caldwell expects continued economic growth with low
inflation, it believes the outlook for the stock market remains positive. The
market, as measured by the S&P 500, may continue to be volatile and move in a
sideways pattern until it becomes more evident that the Federal Reserve has
succeeded at engineering a soft landing. However, as this develops, interest
rates may peak and eventually drift lower, with corporate profit growth being
sustained, but at a more moderate rate. Such an outcome may allow the market to
broaden out with more stocks moving higher as the stock market indices advance.
In a more moderately growing economy, Montag & Caldwell believes higher
quality issues that can produce solid double-digit earnings growth may excel.
With global economies recovering and the enormous longer-term opportunities
deriving from the triumph of capitalism, Montag & Caldwell believes
multinational growth companies may do particularly well. These include well-
positioned consumer, pharmaceutical, technology and financial service companies
with global reach. As it becomes more evident that the Federal Reserve is
succeeding in bringing about a soft landing, higher-quality consumer growth
companies that conduct most of their business in the United States may also be
rewarding investments for the Portfolio.
The Federal Reserve acted for the sixth time since June of 1999, raising
the Federal Funds rate 0.50 percentage points to 6.50 percent in May to slow the
U.S. economy. During the second quarter, Montag & Caldwell capitalized on the
strong rally in longer maturities and shortened duration exposure in the
Portfolio. The Portfolio sold longer dated U.S. Treasuries, which have
appreciated nicely since January, and purchased intermediate corporate notes,
which were trading at attractive yield spreads versus similar maturity U.S.
Treasury securities. Montag & Caldwell anticipates lengthening the Portfolio's
fixed-income holdings early in the second half, as the U.S. economy slows in
order to stay in line with the appropriate fixed-income benchmark.
The views expressed in this report reflect those of the subadviser only
through the end of the period of the report as stated on the cover. The
subadviser's views are subject to change at any time based on market and other
conditions.
37
<PAGE> 38
ENTERPRISE ACCUMULATION TRUST
BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 57.84% PRINCIPAL AMOUNT VALUE
---------------------------------------------------------------------
<S> <C> <C>
BANKING -- 1.18%
Wells Fargo & Company 4,400 $ 170,500
BUSINESS SERVICES -- 0.89%
Interpublic Group of Companies
Inc. 3,000 129,000
COMPUTER HARDWARE -- 4.18%
Dell Computer Corporation (a) 5,200 256,425
Hewlett-Packard Company 2,800 349,650
-----------
606,075
COMPUTER SERVICES -- 4.01%
Electronic Data Systems
Corporation 7,600 313,500
Solectron Corporation (a) 6,400 268,000
-----------
581,500
COMPUTER SOFTWARE -- 2.28%
Electronic Arts Inc. (a) 2,000 145,875
Microsoft Corporation (a) 2,300 184,000
-----------
329,875
CONSUMER PRODUCTS -- 4.08%
Gillette Company 12,500 436,719
Newell Rubbermaid Inc. 6,000 154,500
-----------
591,219
ELECTRICAL EQUIPMENT -- 0.59%
General Electric Company 1,600 84,800
FOOD, BEVERAGES & TOBACCO -- 7.65%
Bestfoods 6,000 415,500
Coca-Cola Company 8,200 470,987
PepsiCo Inc. 5,000 222,188
-----------
1,108,675
HEALTH CARE -- 1.48%
Medtronic Inc. 4,300 214,194
HOTELS & RESTAURANTS -- 4.37%
Marriott International Inc.
(Class A) 7,500 270,469
McDonald's Corporation 11,000 362,312
-----------
632,781
MEDICAL INSTRUMENTS -- 1.39%
Boston Scientific Corporation (a) 9,200 201,825
MISC. FINANCIAL SERVICES -- 2.05%
American Express Company 2,700 140,738
Citigroup Inc. 2,600 156,650
-----------
297,388
MULTI-LINE INSURANCE -- 1.38%
American International Group
Inc. 1,700 199,750
PHARMACEUTICALS -- 9.09%
Bristol-Myers Squibb Company 4,500 262,125
Johnson & Johnson 3,100 315,812
Pfizer Inc. 9,100 436,800
Schering-Plough Corporation 6,000 303,000
-----------
1,317,737
RETAIL -- 4.61%
Circuit City Stores Inc. 5,500 182,531
Costco Wholesale Corporation (a) 5,200 171,600
Gap Inc. 2,400 75,000
Home Depot Inc. 4,800 239,700
-----------
668,831
SEMICONDUCTORS -- 1.29%
Intel Corporation 1,400 187,163
TELECOMMUNICATIONS -- 6.54%
Lucent Technologies Inc. 6,800 402,900
Tellabs Inc. (a) 3,400 232,687
Worldcom Inc. (a) 6,800 311,950
-----------
947,537
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
WIRELESS COMMUNICATIONS -- 0.78%
Motorola Inc. 3,900 $ 113,344
-----------
TOTAL COMMON STOCKS
(IDENTIFIED COST $8,105,426) 8,382,194
---------------------------------------------------------------------
CORPORATE BONDS AND NOTES -- 10.70%
---------------------------------------------------------------------
AUTOMOTIVE -- 0.86%
Daimler Chrysler North America
7.40% due 01/20/05 $ 125,000 124,696
BANKING -- 1.69%
Discover Card Master Trust I
5.85% due 01/17/06 100,000 96,290
Nationsbank Corporation
7.00% due 05/15/03 150,000 148,174
-----------
244,464
ENERGY -- 1.13%
Peco Energy Transport Trust
6.05% due 03/01/09 175,000 163,413
FINANCE -- 2.12%
Ford Motor Credit Company
7.00% due 09/25/01 100,000 99,594
Ford Motor Credit Company
7.75% due 03/15/05 75,000 75,463
National Rural Utilities
Cooperative Finance,
5.75% due 11/01/08 150,000 132,058
-----------
307,115
MISC. FINANCIAL SERVICES -- 1.03%
Goldman Sachs Group Inc.
7.50% due 01/28/05 150,000 149,303
OIL SERVICES -- 0.82%
Conoco Inc.
5.90% due 04/15/04 125,000 119,074
PHARMACEUTICALS -- 0.83%
Warner Lambert Company
5.75% due 01/15/03 125,000 121,265
RETAIL -- 1.01%
Wal-Mart Stores Inc.
6.875% due 08/10/09 150,000 146,912
TELECOMMUNICATIONS -- 1.21%
Bellsouth Capital Funding
Corporation, 7.75% due
02/15/10 175,000 174,915
-----------
TOTAL CORPORATE BONDS AND NOTES
(IDENTIFIED COST $1,563,109) 1,551,157
---------------------------------------------------------------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS -- 13.86%
---------------------------------------------------------------------
FEDERAL HOME LOAN BANKS -- 0.70%
5.125% due 04/17/01 100,000 98,662
FREDDIE MAC -- 1.30%
6.25% due 10/15/02 150,000 147,849
5.125% due 10/15/08 50,000 43,537
-----------
191,386
FANNIE MAE -- 1.17%
5.75% due 04/15/03 175,000 169,574
</TABLE>
38
<PAGE> 39
ENTERPRISE ACCUMULATION TRUST
BALANCED PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
U.S. TREASURY NOTES -- 5.01%
6.625% due 04/30/02 $ 225,000 $ 225,563
5.75% due 08/15/03 325,000 319,414
7.875% due 11/15/04 100,000 105,818
6.25% due 02/15/07 75,000 75,070
-----------
725,865
U.S. TREASURY BONDS -- 5.68%
7.25% due 05/15/16 175,000 192,555
8.125% due 08/15/19 200,000 241,250
8.00% due 11/15/21 130,000 156,894
6.25% due 08/15/23 150,000 150,937
6.875% due 08/15/25 75,000 81,539
-----------
823,175
-----------
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(IDENTIFIED COST $1,990,209) 2,008,662
---------------------------------------------------------------------
REPURCHASE AGREEMENT -- 17.31%
---------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement,
5.50% due 07/03/00,
Maturity Value $2,509,150
Collateral: U.S. Treasury Note
$2,605,000, 5.50% due
05/31/03,
Value $2,571,548 2,508,000 2,508,000
-----------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $2,508,000) 2,508,000
---------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $14,166,744) $14,450,013
OTHER ASSETS LESS LIABILITIES -- 0.29% 42,285
-----------
NET ASSETS -- 100% $14,492,298
=====================================================================
</TABLE>
(a) Non-income producing security.
See notes to financial statements.
39
<PAGE> 40
ENTERPRISE ACCUMULATION TRUST
HIGH-YIELD BOND PORTFOLIO
SUBADVISER'S COMMENTS
CAYWOOD-SCHOLL CAPITAL MANAGEMENT
SAN DIEGO, CALIFORNIA
Investment Management
Caywood-Scholl has been subadviser to the Enterprise High-Yield Bond
Portfolio since November 19, 1994. Caywood-Scholl manages approximately $1.3
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 subadviser 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 subadviser 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 judgment of the subadviser have
characteristics of such lower-grade bonds. Should an investment be subsequently
downgraded to Ca or lower or CC or lower, the subadviser 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 judgment of the subadviser, 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 2000 Performance Review
During the first quarter of the year, most high-yield investors found
themselves caught off guard by the severity of spread widening which had
occurred in the preceding three months. In hindsight, the actions of the Federal
Reserve and the resulting impact on investor psychology were underestimated.
Despite relatively good market fundamentals, the asset class was out of favor
due to investor concerns about the Federal Reserve's action. Caywood-Scholl's
conclusion was that the relatively good fundamentals of the market compared to
the attractive valuations meant the market was cheap on a risk-adjusted basis.
What changed during the second quarter? Not a whole lot, accordingly the
high-yield market experienced a volatile yet unremarkable quarter. The double B
sector of the market, as measured by the Lehman BB index, returned 2.26 percent
while the single B sector of the market, as represented by the Merrill Lynch
Cash Pay index, returned 0.63 percent. The variance in returns between the two
sectors of the market is explained by investors' preference for better quality,
more liquid securities.
There are a couple of themes worth mentioning: First, some of the economic
data released in the latter part of May and through June suggest that the U.S.
economy is slowing. This is giving hope that the Federal Reserve may be nearly
finished raising rates. As evidence of a soft landing emerges Caywood-Scholl
would expect high-yield bonds to react favorably. In support of this thesis, the
market had its first month of net inflows this year in June, approximately
$1.038 billion. It is Caywood-Scholl's belief that it is premature to pronounce
a soft landing, but Caywood-Scholl feels more optimistic. The inflow of cash
from mutual fund investors is important because it has helped to balance the
market's technical picture. Equally important, the amount of new issuance slowed
dramatically with only $8.5 billion issued during the second quarter. The
market's technical balance had a favorable effect upon returns.
40
<PAGE> 41
Another development has been the evidence of tighter lending standards and
recent announcements by several financial institutions of large write-downs of
bad loans. As lending standards become more stringent, highly leveraged entities
may find their access to capital reduced. The high-yield market's discounting of
this risk is evident in the variance in returns between the quality sectors of
the market. In anticipation of tighter liquidity, investors are generally
seeking investment in better-capitalized, larger companies, which is more
indicative of the double B portion of the Portfolio's market.
The trend and method of calculation of defaults has been a focus of several
articles in the Wall Street Journal. Consensus on this topic lies between a
leveling of default rates to a modest up-tick. More importantly, Caywood-Scholl
believes that much of the information pertaining to defaults is priced into the
market. This explains why valuations are near historic lows, a near record
portion of the market is classified as "distressed," and why liquidity for
out-of-favor sectors is so poor.
Finally, there continues to be a great deal of dislocation in the BBB
sector of the corporate bond market, both in terms of credit quality and supply,
mostly in telecommunications companies. The difficulties of this market are in
some ways creating opportunities in the BB market, as many typical crossover
buyers are sidelined.
Future Investment Strategy
So where does all this leave us? Cautiously optimistic. Caywood-Scholl
believes the market offers very good value on risk-adjusted basis for patient
investors. Caywood-Scholl feels this is especially true of the BB sector with an
average ratio, yield/treasury, greater than 150 percent. Caywood-Scholl likens
the high-yield market to a value stock. Caywood-Scholl is uncertain as to the
near term catalyst that may cause the market to rally, but suspects money may
return to the market when it is clear the Federal Reserve is finished raising
rates. In anticipation of this event, the U.S. may see market conditions improve
in short order. Caywood-Scholl believes that it is best to invest in higher
quality issues until there is a clear signal that the taking of risk may be
rewarded.
There are specific risks associated with the types of bonds held in the
High-Yield Bond Portfolio, which include defaults by the issuer, market
valuation, and interest rate sensitivity.
The views expressed in this report reflect those of the subadviser only
through the end of the period of the report as stated on the cover. The
subadviser's views are subject to change at any time based on market and other
conditions.
41
<PAGE> 42
ENTERPRISE ACCUMULATION TRUST
HIGH-YIELD BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
CORPORATE BONDS, CONVERTIBLE
SECURITIES, COMMON & NUMBER OF SHARES OR
PREFERRED STOCKS -- 82.55% PRINCIPAL AMOUNT VALUE
-------------------------------------------------------------------
<S> <C> <C>
AEROSPACE -- 0.24%
BE Aerospace Inc.
9.50%, due 11/01/08 $ 250,000 $ 230,000
APPAREL & TEXTILES -- 0.86%
Fruit of the Loom Inc.
8.875%, due 04/15/06 (b) 500,000 40,000
Levi Strauss & Company
6.80%, due 11/01/03 250,000 203,750
Levi Strauss & Company
7.00%, due 11/01/06 750,000 570,000
-----------
813,750
AUTOMOTIVE -- 2.07%
Avis Rent a Car Inc.
11.00%, due 05/01/09 650,000 677,625
Budget Group Inc.
9.125%, due 04/01/06 850,000 544,000
Lear Corporation
7.96%, due 05/15/05 350,000 328,991
Sonic Automotive Inc. (Series
B)
11.00%, due 08/01/08 450,000 399,375
-----------
1,949,991
BANKING -- 0.98%
Bay View Capital Corporation
9.125%, due 08/15/07 550,000 418,000
Western Financial Savings Bank
Orange California
8.50%, due 07/01/03 550,000 511,500
-----------
929,500
BROADCASTING -- 7.35%
Allbritton Communications
Company (Series B)
8.875%, due 02/01/08 450,000 414,563
Chancellor Media Corporation
9.00%, due 10/01/08 550,000 566,500
Chancellor Media Corporation
(Series B)
8.125%, due 12/15/07 750,000 754,687
Echostar DBS Corporation
9.375%, due 02/01/09 1,150,000 1,104,000
Fox Family Worldwide Inc.
0/10.25%, due 11/01/07 (c) 350,000 217,875
Fox Family Worldwide Inc.
9.25%, due 11/01/07 1,300,000 1,170,000
Fox Sports Networks LLC
0/9.75%, due 08/15/07 (c) 2,000,000 1,620,000
Liberty Media Group
7.875%, due 07/15/09 400,000 385,112
Sinclair Broadcast Group Inc.
8.75%, due 12/15/07 800,000 704,000
-----------
6,936,737
BUILDING & CONSTRUCTION -- 2.83%
American Standard Inc.
7.375%, due 02/01/08 350,000 316,750
Building Materials Corporation
America (Series B)
7.75%, due 07/15/05 550,000 452,375
Building Materials Corporation
America (Series B)
8.00%, due 10/15/07 400,000 319,000
Integrated Electrical Services
9.375%, due 02/01/09 800,000 648,000
Nortek Inc.
8.875%, due 08/01/08 400,000 362,000
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
Nortek Inc. (Series B)
9.125%, due 09/01/07 $ 400,000 $ 370,000
Republic Group Inc.
9.50%, due 07/15/08 250,000 207,500
-----------
2,675,625
BUSINESS SERVICES -- 0.82%
United Rentals Inc. (Series B)
8.80%, due 08/15/08 875,000 770,000
CABLE -- 5.75%
Adelphia Communications
Corporation
8.125%, due 07/15/03 100,000 94,250
Adelphia Communications
Corporation
9.50%, due 03/01/05 400,000 386,000
Adelphia Communications
Corporation
7.875%, due 05/01/09 250,000 210,625
Adelphia Communications
Corporation (Series B)
10.50%, due 07/15/04 850,000 850,000
Adelphia Communications
Corporation (Series B)
0/9.05%, due 01/15/08 (c) 850,000 348,500
Charter Communication Holdings
8.25%, due 04/01/07 1,875,000 1,654,687
Charter Communications
Holdings
10.00%, due 04/01/09 500,000 482,500
Mediacom LLC/Mediacom Capital
Corporation (Series B)
8.50%, due 04/15/08 550,000 506,000
Williams Communications
Corporation
10.70%, due 10/01/07 900,000 893,250
-----------
5,425,812
CHEMICALS -- 1.24%
Georgia Gulf Corporation
10.375%, due 11/01/07 600,000 624,000
Huntsman Polymers Corporation
11.75%, due 12/01/04 250,000 253,750
Pioneer Americas Acquisition
Corporation (Series B)
9.25%, due 06/15/07 450,000 297,000
-----------
1,174,750
COMMUNICATIONS -- 4.01%
Globalstar LP/Globalstar
Capital
11.375%, due 02/15/04 1,100,000 324,500
Globalstar LP/Globalstar
Capital
11.25%, due 06/15/04 100,000 29,000
Globalstar LP/Globalstar
Capital
10.75%, due 11/01/04 150,000 42,000
Globalstar LP/Globalstar
Capital
11.50%, due 06/01/05 $ 250,000 71,250
Globalstar Telecommunications
(Wts) (a) 450 0
Level 3 Communications Inc.
9.125%, due 05/01/08 $1,025,000 919,937
Level 3 Communications Inc.
0/10.5%, due 12/01/08 (c) 500,000 303,750
Loral Space & Communication
Ltd.
9.50%, due 01/15/06 200,000 145,000
Loral Space & Communication
Ltd.
0/12.5%, due 01/15/07 (c) $1,150,000 471,500
Loral Space & Communication
Ltd. (Wts) (a) 600 1,988
</TABLE>
42
<PAGE> 43
ENTERPRISE ACCUMULATION TRUST
HIGH-YIELD BOND PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
Metromedia Fiber Network Inc.
10.00%, due 11/15/08 $ 500,000 $ 492,500
Metromedia Fiber Network Inc.
10.00%, due 12/15/09 1,000,000 985,000
-----------
3,786,425
COMPUTER SOFTWARE -- 2.27%
Exodus Communications Inc.
10.75%, due 12/15/09 100,000 96,500
Exodus Communications Inc.
11.625%, due 07/15/10 250,000 250,625
Northpoint Commerce Group Inc.
12.875%, due 02/15/10 900,000 648,000
PSINet Inc.
10.50%, due 12/01/06 1,250,000 1,150,000
-----------
2,145,125
CONSUMER PRODUCTS -- 3.33%
Chattem Inc. (Series B)
8.875%, due 04/01/08 750,000 600,000
Corning Consumer Products
Company (Series B)
9.625%, due 05/01/08 350,000 227,500
French Fragrances Inc. (Series
B)
10.375%, due 05/15/07 350,000 336,000
French Fragrances Inc. (Series
D)
10.375%, due 05/15/07 200,000 188,000
Scotts Company
8.625%, due 01/15/09 1,000,000 960,000
Sealy Mattress Company (Series
B)
0/10.875%, due 12/15/07 (c) 1,150,000 828,000
-----------
3,139,500
CONTAINERS/PACKAGING -- 1.74%
Owens Illinois Inc.
8.10%, due 05/15/07 550,000 508,106
Owens Illinois Inc.
7.35%, due 05/15/08 650,000 566,127
United States Can Corporation
(Series B)
10.125%, due 10/15/06 550,000 563,750
-----------
1,637,983
CRUDE & PETROLEUM -- 0.70%
Clark Refining & Marketing
Inc.
8.875%, due 11/15/07 350,000 224,000
Trizec Hahn Corporation
(Series B)
10.875%, due 12/01/05 800,000 440,000
-----------
664,000
DRUGS & MEDICAL PRODUCTS -- 1.36%
King Pharmaceuticals Inc.
10.75%, due 02/15/09 1,250,000 1,287,500
ELECTRONICS -- 0.11%
Axiohm Transaction Solutions
9.75%, due 10/01/07 (b) 500,000 101,250
ENERGY -- 1.05%
Calpine Corporation
7.75%, due 04/15/09 250,000 235,625
CMS Energy Corporation
7.50%, due 01/15/09 250,000 218,344
Ocean Energy Inc. (Series B)
8.375%, due 07/01/08 550,000 533,500
-----------
987,469
FINANCE -- 1.19%
RBF Finance Company
11.00%, due 03/15/06 1,050,000 1,124,813
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
FOOD, BEVERAGES & TOBACCO -- 3.65%
Canandaigua Brands Inc.
8.625%, due 08/01/06 $ 750,000 $ 740,625
Canandaigua Brands Inc.
8.50%, due 03/01/09 400,000 364,000
Keebler Corporation
10.75%, due 07/01/06 175,000 186,156
Kroger Company
6.375%, due 03/01/08 150,000 134,819
NBTY Inc. (Series B)
8.625%, due 09/15/07 800,000 682,000
Stater Brothers Holdings Inc.
10.75%, due 08/15/06 1,225,000 1,078,000
Twin Laboratories Inc.
10.25%, due 05/15/06 260,000 258,700
-----------
3,444,300
GAMING -- 2.19%
Boyd Gaming Corporation
9.50%, due 07/15/07 750,000 720,000
Circus Circus Enterprises Inc.
9.25%, due 12/01/05 400,000 386,000
Mirage Resorts Inc.
6.75%, due 08/01/07 450,000 400,783
Trump Atlantic City Associates
11.25%, due 05/01/06 800,000 564,000
-----------
2,070,783
HEALTH CARE -- 4.05%
Columbia/HCA Healthcare
Corporation
7.15%, due 03/30/04 300,000 281,364
Columbia/HCA Healthcare
Corporation
6.91%, due 06/15/05 550,000 502,428
Columbia/HCA Healthcare
Corporation
7.25%, due 05/20/08 250,000 222,639
Dade International Inc.
(Series B)
11.125%, due 05/01/06 450,000 211,500
Fisher Scientific
International Inc.
9.00%, due 02/01/08 $ 850,000 777,750
Fresenius Medical Care Capital
Trust (Preferred Stock) 150 142,500
Quest Diagnostics Inc.
10.75%, due 12/15/06 $ 600,000 621,000
Tenet Healthcare Corporation
8.125%, due 12/01/08 450,000 411,750
Tenet Healthcare Corporation
9.25%, due 09/01/10 650,000 654,875
-----------
3,825,806
HOTELS & RESTAURANTS -- 3.25%
Foodmaker Corporation (Series
B)
9.75%, due 11/01/03 250,000 251,333
Foodmaker Inc.
8.375%, due 04/15/08 1,050,000 976,500
Hammon (John Q.) Hotels
8.875%, due 02/15/04 250,000 220,000
Host Marriot LP
8.375%, due 02/15/06 500,000 465,000
MGM Grand Inc.
9.75%, due 06/01/07 600,000 610,500
Sbarro Inc.
11.00%, due 09/15/09 50,000 51,125
</TABLE>
43
<PAGE> 44
ENTERPRISE ACCUMULATION TRUST
HIGH-YIELD BOND PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
Station Casinos
9.875%, due 07/01/10 $ 250,000 $ 238,125
Station Casinos Inc.
8.875%, due 12/01/08 250,000 250,625
-----------
3,063,208
MACHINERY -- 1.65%
Applied Power Inc.
8.75%, due 04/01/09 1,000,000 1,035,000
Columbus McKinnon Corporation
8.50%, due 04/01/08 500,000 430,000
Navistar International
Corporation (Series B)
8.00%, due 02/01/08 100,000 91,750
-----------
1,556,750
MEDICAL INSTRUMENTS -- 0.62%
Charles River Labs Inc.
13.50%, due 10/01/09 $ 250,000 258,125
Charles River Labs Inc. (Wts)
(a) 250 10,476
Fisher Scientific
International Inc.
9.00%, due 02/01/08 $ 350,000 320,250
-----------
588,851
MEDICAL SERVICES -- 1.79%
Triad Hospitals Holdings Inc.
11.00%, due 05/15/09 900,000 920,250
Warner Chilcott Inc.
12.625%, due 02/15/08 750,000 769,688
-----------
1,689,938
METALS & MINING -- 0.24%
AK Steel Corporation
7.875%, due 02/15/09 250,000 221,875
OIL SERVICES -- 1.30%
Eott Energy Partners LP
11.00%, due 10/01/09 250,000 253,750
Nuevo Energy Company
9.50%, due 06/01/08 250,000 246,875
Pioneer Natural Resources
Company
9.625%, due 04/01/10 700,000 722,840
-----------
1,223,465
PAPER & FOREST PRODUCTS -- 0.41%
Buckeye Cellulose Corporation
8.50%, due 12/15/05 400,000 385,000
PRINTING & PUBLISHING -- 0.61%
Nebraska Book Company Inc.
8.75%, due 02/15/08 750,000 577,500
RETAIL -- 1.87%
Boyds Collection Ltd.
9.00%, due 05/15/08 478,000 420,640
Buhrmann U.S. Inc.
12.25%, due 11/01/09 325,000 341,250
Cole National Group Inc.
8.625%, due 08/15/07 850,000 561,000
Saks Inc.
8.25%, due 11/15/08 500,000 443,144
-----------
1,766,034
TELECOMMUNICATIONS -- 13.44%
Crown Castle International
Corporation
0/10.625%, due 11/15/07 (c) 1,250,000 925,000
Crown Castle International
Corporation
9.00%, due 05/15/11 $ 400,000 369,000
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
E. Spire Communications Inc.
(Wts) (a) 300 $ 0
Firstworld Communications Inc.
(Wts) (a) (d) 300 21,133
Flag Ltd.
8.25%, due 01/30/08 $ 850,000 756,500
ICG Holdings Inc.
0/12.5%, due 05/01/06 (c) 700,000 579,250
ICG Services Inc.
0/10.0%, due 02/15/08 (c) 250,000 130,000
Intermedia Communications Inc.
(Series B)
0/11.25%, due 07/15/07 (c) 250,000 196,250
Intermedia Communications Inc.
(Series B)
8.50%, due 01/15/08 525,000 483,000
Leap Wireless International
Inc.
12.50%, due 04/15/10 450,000 396,000
McLeodUSA Inc.
0/10.5%, due 03/01/07 (c) 600,000 492,000
McLeodUSA Inc.
8.125%, due 02/15/09 1,100,000 992,750
Nextel Communications
0/10.65%, due 09/15/07 (c) 900,000 706,500
Nextel Communications
0/9.75%, due 10/31/07 (c) 1,050,000 779,625
Nextel Communications
0/9.95%, due 02/15/08 (c) 700,000 512,750
Nextlink Communications
0/9.45%, due 04/15/08 (c) 1,300,000 793,000
Nextlink Communications
10.75%, due 11/15/08 750,000 738,750
Omnipoint Corporation (Series
A)
11.625%, due 08/15/06 $ 200,000 216,000
Pagemart Nationwide Inc. (Wts)
(a) 875 11,594
Panamsat Corporation
6.375%, due 01/15/08 $1,000,000 890,797
Pathnet Inc.
12.25%, due 04/15/08 $ 250,000 140,000
Pathnet Inc. (Wts) (a) (d) 250 0
RCN Corporation
0/11.125%, due 10/15/07 (c) $ 600,000 375,000
RCN Corporation
10.00%, due 10/15/07 250,000 211,875
RCN Corporation (Series B)
0/9.8%, due 02/15/08 (c) 650,000 370,500
Sprint Spectrum LP
0/11.0%, due 08/15/06 (c) 450,000 432,562
Teligent Inc.
11.50%, due 12/01/07 250,000 193,750
Triton Pcs Inc.
0%, due 05/01/08 250,000 181,250
Winstar Communications Inc.
12.75%, due 04/15/10 850,000 792,625
-----------
12,687,461
TEXTILES -- 2.91%
Phillips Van Heusen
Corporation
9.50%, due 05/01/08 900,000 819,000
Polymer Group Inc. (Series B)
9.00%, due 07/01/07 525,000 446,250
Polymer Group Inc. (Series B)
8.75%, due 03/01/08 250,000 207,500
Westpoint Stevens Inc.
7.875%, due 06/15/08 1,600,000 1,272,000
-----------
2,744,750
</TABLE>
44
<PAGE> 45
ENTERPRISE ACCUMULATION TRUST
HIGH-YIELD BOND PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
TRANSPORTATION -- 1.01%
Northwest Airlines Inc.
8.52%, due 04/07/04 $1,000,000 $ 950,388
TRAVEL/ENTERTAINMENT/LEISURE -- 0.25%
International Game Technology
7.875%, due 05/15/04 250,000 240,000
UTILITIES -- 1.68%
AES Corporation
9.50%, due 06/01/09 600,000 588,000
Azurix Corporation
10.375%, due 02/15/07 650,000 627,250
Ferrellgas Partners LP (Series
B)
9.375%, due 06/15/06 300,000 288,000
Midland Funding Corporation
(Series C-94)
10.33%, due 07/23/02 77,743 79,589
-----------
1,582,839
WASTE MANAGEMENT -- 1.20%
Allied Waste North America
Inc.
7.625%, due 01/01/06 600,000 525,000
Allied Waste North America
Inc.
7.875%, due 01/01/09 450,000 383,625
Waste Management Inc.
6.875%, due 05/15/09 250,000 220,330
-----------
1,128,955
WIRELESS COMMUNICATIONS -- 2.53%
Nextel Communications
9.375%, due 11/15/09 750,000 716,250
Telecorp PCS Inc.
0/11.625%, due 04/15/09 (c) 700,000 456,750
Voicestream Wireless
Corporation
11.50%, due 09/15/09 500,000 540,000
Voicestream Wireless
Corporation
10.375%, due 11/15/09 650,000 672,750
-----------
$ 2,385,750
TOTAL CORPORATE BONDS, CONVERTIBLE SECURITIES, COMMON
& PREFERRED STOCKS
(IDENTIFIED COST $87,437,519) 77,913,883
-------------------------------------------------------------------
FOREIGN BONDS -- 14.57%
-------------------------------------------------------------------
APPAREL & TEXTILES -- 0.25%
Reliance Industries Ltd.
8.25%, due 01/15/27 250,000 232,306
BASIC INDUSTRIES -- 1.68%
Cemex
12.75%, due 07/15/06 1,075,000 1,193,250
Cemex International Capital
Inc.
9.66%, due 12/29/49 400,000 391,000
-----------
1,584,250
BROADCASTING -- 1.28%
Rogers Communications Inc.
9.125%, due 01/15/06 200,000 196,000
Rogers Communications Inc.
8.875%, due 07/15/07 500,000 490,000
Satelites Mexicanos
10.125%, due 11/01/04 650,000 435,500
TV Azteca
10.50%, due 02/15/07 100,000 89,347
-----------
1,210,847
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
CABLE -- 2.07%
Flag Telecom Holdings Ltd.
11.625%, due 03/30/10 $ 700,000 $ 679,000
Telewest Commerce New
9.875%, due 02/01/10 350,000 325,500
Telewest Communications New
0/9.25%, due 04/15/09 (c) 1,750,000 945,000
-----------
1,949,500
CHEMICALS -- 0.20%
PCI Chemicals Canada Inc.
9.25%, due 10/15/07 300,000 186,000
ELECTRONICS -- 0.16%
Flextronics International Ltd.
9.875%, due 07/01/10 150,000 151,125
ENERGY -- 0.54%
YPF Sociedad Anonima
9.125%, due 02/24/09 500,000 506,875
FINANCE -- 0.41%
PDVSA Finance Ltd.
9.375%, due 11/15/07 400,000 383,310
GOVERNMENT BOND -- 3.22%
Republic of Argentina
11.75%, due 04/07/09 500,000 467,128
Republic of Argentina Global
(Series BGL4)
11.00%, due 10/09/06 750,000 703,625
United Mexican States
9.875%, due 01/15/07 250,000 260,000
United Mexican States
8.625%, due 03/12/08 800,000 768,000
United Mexican States
9.875%, due 02/01/10 800,000 840,800
-----------
3,039,553
OIL SERVICES -- 1.27%
Gulf Canada Resources Ltd.
8.375%, due 11/15/05 700,000 693,000
Petroleos Mexicanos
9.375%, due 12/02/08 500,000 508,125
-----------
1,201,125
PAPER & FOREST PRODUCTS -- 0.35%
Indah Kiat Finance Mauritius
Ltd.
10.00%, due 07/01/07 250,000 152,500
Pindo Deli Finance Mauritius
Ltd.
10.75%, due 10/01/07 $ 300,000 180,000
-----------
332,500
TELECOMMUNICATIONS -- 1.31%
AT & T Canada Inc Deposit
Receipt (Class B) 342 11,350
Global Crossing Holdings Ltd.
9.125%, due 11/15/06 $ 400,000 383,000
Rogers Cantel Inc.
8.80%, due 10/01/07 850,000 845,750
-----------
1,240,100
</TABLE>
45
<PAGE> 46
ENTERPRISE ACCUMULATION TRUST
HIGH-YIELD BOND PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
TRANSPORTATION -- 0.64%
Eletson Holdings Inc.
9.25%, due 11/15/03 $ 350,000 $ 325,500
TBS Shipping International
Ltd.
10.00%, due 05/01/05 (a) (b) 550,000 149,188
TFM
10.25%, due 06/15/07 150,000 132,750
-----------
607,438
WIRELESS COMMUNICATIONS -- 1.19%
Clearnet Communications Inc.
0/10.125%, due 05/01/09 (c) 1,000,000 600,000
Grupo Iusacell New
14.25%, due 12/01/06 500,000 522,500
-----------
1,122,500
TOTAL FOREIGN BONDS
(IDENTIFIED COST $15,420,159) 13,747,429
-------------------------------------------------------------------
REPURCHASE AGREEMENT -- 0.38%
-------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement
5.50%, due 07/03/00,
Maturity Value $357,161
Collateral: U.S. Treasury
Note
$320,000, 10.75% due
02/15/03,
Value $378,147 357,000 357,000
-----------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $357,000) 357,000
-------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $103,214,678) $92,018,312
OTHER ASSETS LESS LIABILITIES -- 2.50% 2,359,791
-----------
NET ASSETS -- 100% $94,378,103
===================================================================
</TABLE>
(a) Non-income producing security.
(b) In bankruptcy. Portfolio has ceased accrual of interest.
(c) Zero-coupon or Step Bond. The interest rate on a step bond represents the
rate of interest that will commence its accrual on a predetermined date. The
rate shown for zero coupon bonds is the current effective yield.
(d) Security is fair valued at June 30, 2000.
(Wts) Warrants. Warrants entitle the Portfolio to purchase a predetermined
number of shares of stock and are non-income producing. The purchase price and
number of shares are subject to adjustment under certain conditions until the
expiration date.
See notes to financial statements.
46
<PAGE> 47
(This page intentionally left blank)
47
<PAGE> 48
ENTERPRISE ACCUMULATION TRUST
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 2000 (ALL NUMBERS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
MULTI-CAP SMALL COMPANY SMALL COMPANY
GROWTH GROWTH VALUE GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- ------------- ------------- ---------
<S> <C> <C> <C> <C>
ASSETS:
Investments at value................................ $150,961 $65,027 $381,195 $313,018
Foreign currency at value (cost -- $484)............ -- -- -- --
Receivable for fund shares sold..................... 608 253 369 777
Receivable for investments sold..................... 1,624 -- 963 1,185
Dividends and interest receivable................... 11 1 233 114
Cash and other assets............................... -- 1 1 238
-------- ------- -------- --------
Total assets.............................. 153,204 65,282 382,761 315,332
-------- ------- -------- --------
LIABILITIES:
Payable for fund shares redeemed.................... 12 23 1,422 232
Call Options written, at market value (premiums
received $61)..................................... -- -- -- --
Payable for investments purchased................... 3,273 362 60 4,395
Investment advisory fees payable.................... 117 49 254 183
Forward currency contracts (net) payable............ -- -- -- --
Accrued expenses and other liabilities.............. 38 18 102 74
-------- ------- -------- --------
Total liabilities......................... 3,440 452 1,838 4,884
-------- ------- -------- --------
NET ASSETS........................... $149,764 $64,830 $380,923 $310,448
======== ======= ======== ========
NET ASSETS:
Paid-in capital..................................... 156,903 59,890 222,674 289,104
Undistributed (accumulated) net investment income
(loss)............................................ (92) (80) 993 711
Undistributed (accumulated) net realized gain (loss)
on investments and foreign currency
transactions...................................... (13,372) (625) 118,638 8,867
Unrealized appreciation (depreciation) on
investments and foreign currency denominated
amounts........................................... 6,325 5,645 38,618 11,766
-------- ------- -------- --------
NET ASSETS........................... $149,764 $64,830 $380,923 $310,448
======== ======= ======== ========
Fund shares outstanding............................. 11,128 7,397 12,096 48,793
-------- ------- -------- --------
Net asset value per share........................... $13.46 $8.76 $31.49 $6.36
------- -------- --------- ------
------- -------- --------- ------
INVESTMENTS AT COST................................. $144,636 $59,382 $342,577 $301,252
======== ======= ======== ========
</TABLE>
See notes to financial statements.
48
<PAGE> 49
<TABLE>
<CAPTION>
CAPITAL GROWTH AND INTERNATIONAL HIGH-YIELD
APPRECIATION EQUITY INCOME EQUITY INCOME GROWTH MANAGED BALANCED BOND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ --------- ---------- ------------- ------------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$66,153 $605,423 $144,865 $26,824 $121,207 $1,642,891 $14,450 $ 92,018
-- -- -- -- 486 -- -- --
237 2,123 516 110 155 237 107 73
819 -- -- 124 982 26,167 -- 810
19 22 35 36 42 4,127 72 2,191
-- 1 1 180 128 7 1 1
------- -------- -------- ------- -------- ---------- ------- --------
67,228 607,569 145,417 27,274 123,000 1,673,429 14,630 95,093
------- -------- -------- ------- -------- ---------- ------- --------
16 2,758 25 2 296 5,410 2 136
-- -- 72 -- -- -- -- --
211 4,320 1,509 73 584 3,154 121 499
39 382 86 17 86 1,050 8 47
-- -- -- -- 958 -- -- --
19 147 39 10 64 448 7 33
------- -------- -------- ------- -------- ---------- ------- --------
285 7,607 1,731 102 1,988 10,062 138 715
------- -------- -------- ------- -------- ---------- ------- --------
$66,943 $599,962 $143,686 $27,172 $121,012 $1,663,367 $14,492 $ 94,378
======= ======== ======== ======= ======== ========== ======= ========
60,411 288,340 133,176 28,541 88,858 954,857 13,917 109,542
156 2,283 1,050 327 391 45,608 159 --
2,480 192,447 188 (1,042) 18,635 541,358 133 (3,967)
3,896 116,892 9,272 (654) 13,128 121,544 283 (11,197)
------- -------- -------- ------- -------- ---------- ------- --------
$66,943 $599,962 $143,686 $27,172 $121,012 $1,663,367 $14,492 $ 94,378
======= ======== ======== ======= ======== ========== ======= ========
8,309 13,210 22,713 5,244 14,717 47,106 2,796 19,615
------- -------- -------- ------- -------- ---------- ------- --------
$8.06 $45.42 $6.33 $5.18 $8.22 $35.31 $5.18 $4.81
-------- ------- ------ -------- -------- ------ ------ ------
-------- ------- ------ -------- -------- ------ ------ ------
$62,257 $488,531 $135,582 $27,478 $107,128 $1,521,347 $14,167 $103,215
======= ======== ======== ======= ======== ========== ======= ========
</TABLE>
See notes to financial statements.
49
<PAGE> 50
ENTERPRISE ACCUMULATION TRUST
STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2000 (ALL NUMBERS IN THOUSANDS)
<TABLE>
<CAPTION>
MULTI-CAP SMALL COMPANY SMALL COMPANY
GROWTH GROWTH VALUE GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- ------------- ------------- ---------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends................................... $ 49 $ 34 $ 1,971 $ 861
Interest.................................... 445 130 326 625
-------- ------- -------- --------
Total investment income................ 494 164 2,297 1,486
-------- ------- -------- --------
EXPENSES:
Investment advisory fees.................... 532 219 1,664 988
Custodian and fund accounting fees.......... 20 10 43 25
Reports and notices to shareholders......... 25 11 103 55
Trustees' fees and expenses................. 4 2 5 4
Audit and legal fees........................ 4 2 18 14
Miscellaneous............................... 1 -- 6 --
-------- ------- -------- --------
Total expenses......................... 586 244 1,839 1,086
-------- ------- -------- --------
NET INVESTMENT INCOME (LOSS)......... (92) (80) 458 400
-------- ------- -------- --------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS -- NET:
Net realized gain (loss) on security and
foreign currency transactions............. (13,445) (1,192) 52,629 6,203
Net change in unrealized gain (loss) on
investments and foreign currency
transactions.............................. (3,730) 572 (53,463) (12,113)
-------- ------- -------- --------
Net realized and unrealized gain (loss)
on investments....................... (17,175) (620) (834) (5,910)
-------- ------- -------- --------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............ $(17,267) $ (700) $ (376) $ (5,510)
======== ======= ======== ========
</TABLE>
See notes to financial statements.
--------------------------------------------------------------------------------
(1) Net of foreign taxes withheld of $1 for Capital Appreciation, $1 for Equity,
$6 for Growth and Income, $2 for Equity Income, $136 for International
Growth and $64 for Managed.
(2) Net of losses on foreign currency transactions of $1,949.
50
<PAGE> 51
<TABLE>
<CAPTION>
CAPITAL GROWTH INTERNATIONAL HIGH-YIELD
APPRECIATION EQUITY AND INCOME EQUITY INCOME GROWTH MANAGED BALANCED BOND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ --------- ---------- ------------- ------------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 63(1) $ 740(1) $ 612(1) $ 283(1) $ 787(1) $ 12,630(1) $ 26 $ 7
303 219 509 23 69 8,832 151 5,170
------- ------- ------ ------- -------- --------- ----- -------
366 959 1,121 306 856 21,462 177 5,177
------- ------- ------ ------- -------- --------- ----- -------
184 2,304 430 99 557 7,071 45 301
11 41 23 7 87 139 5 24
11 163 24 5 27 531 2 29
2 6 3 2 3 17 3 2
2 25 4 1 6 76 2 4
-- 8 -- -- 4 36 -- 16
------- ------- ------ ------- -------- --------- ----- -------
210 2,547 484 114 684 7,870 57 376
------- ------- ------ ------- -------- --------- ----- -------
156 (1,588) 637 192 172 13,592 120 4,801
------- ------- ------ ------- -------- --------- ----- -------
(1,276) 53,138 194 (853) 8,419(2) 58,962 69 (539)
(1,690) 44,024 3,361 (404) (24,888) (136,304) (120) (4,573)
------- ------- ------ ------- -------- --------- ----- -------
(2,966) 97,162 3,555 (1,257) (16,469) (77,342) (51) (5,112)
------- ------- ------ ------- -------- --------- ----- -------
$(2,810) $95,574 $4,192 $(1,065) $(16,297) $ (63,750) $ 69 $ (311)
======= ======= ====== ======= ======== ========= ===== =======
</TABLE>
See notes to financial statements.
--------------------------------------------------------------------------------
51
<PAGE> 52
ENTERPRISE ACCUMULATION TRUST
STATEMENTS OF CHANGES IN NET ASSETS (ALL NUMBERS IN THOUSANDS)
<TABLE>
<CAPTION>
MULTI-CAP GROWTH PORTFOLIO SMALL COMPANY GROWTH PORTFOLIO
--------------------------------- ---------------------------------
(UNAUDITED) FOR THE PERIOD (UNAUDITED)
SIX MONTHS JULY 15, 1999 SIX MONTHS
ENDED THROUGH ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31, 1999 JUNE 30, 2000 DECEMBER 31, 1999
------------- ----------------- ------------- -----------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss)............................ $ (92) $ (13) $ (80) $ (58)
Net realized gain (loss) on investments and foreign
currency transactions................................ (13,445) 85 (1,192) 625
Net change in unrealized gain (loss) on investments..... (3,730) 10,056 572 5,040
-------- ------- ------- -------
Increase (decrease) in net assets resulting from
operations........................................... (17,267) 10,128 (700) 5,607
-------- ------- ------- -------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income................................... -- -- -- --
Net realized gains on investments....................... -- -- -- --
-------- ------- ------- -------
Total distributions to shareholders............. -- -- -- --
-------- ------- ------- -------
FROM CAPITAL SHARE TRANSACTIONS:
Shares sold............................................. 132,159 39,685 49,388 19,676
Reinvestment of distributions........................... -- -- -- --
Shares redeemed......................................... (13,088) (1,853) (7,287) (2,323)
-------- ------- ------- -------
Total increase (decrease) in net assets
resulting from capital share transactions..... 119,071 37,832 42,101 17,353
-------- ------- ------- -------
Total increase (decrease) in net assets......... 101,804 47,960 41,401 22,960
NET ASSETS:
Beginning of period..................................... 47,960 -- 23,429 469
-------- ------- ------- -------
End of period........................................... $149,764 $47,960 $64,830 $23,429
======== ======= ======= =======
SHARES ISSUED AND REDEEMED:
Issued.................................................. 8,758 3,432 5,461 3,027
Issued in reinvestment of distributions................. -- -- -- --
Redeemed................................................ (907) (154) (819) (357)
-------- ------- ------- -------
Net increase (decrease)......................... 7,851 3,278 4,642 2,670
======== ======= ======= =======
</TABLE>
See notes to financial statements.
52
<PAGE> 53
<TABLE>
<CAPTION>
SMALL COMPANY VALUE PORTFOLIO GROWTH PORTFOLIO CAPITAL APPRECIATION PORTFOLIO
------------------------------ --------------------------------- ---------------------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED DECEMBER 31, ENDED DECEMBER 31, ENDED DECEMBER 31,
JUNE 30, 2000 1999 JUNE 30, 2000 1999 JUNE 30, 2000 1999
-------------- ------------- ------------- ----------------- ------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
$ 458 $ 534 $ 400 $ 310 $ 156 $ (51)
52,629 68,889 6,203 2,664 (1,276) 3,808
(53,463) 23,666 (12,113) 23,831 (1,690) 5,547
--------- --------- -------- -------- ------- -------
(376) 93,089 (5,510) 26,805 (2,810) 9,304
--------- --------- -------- -------- ------- -------
-- (2,269) -- -- -- --
-- (29,327) -- -- -- --
--------- --------- -------- -------- ------- -------
-- (31,596) -- -- -- --
--------- --------- -------- -------- ------- -------
71,262 155,833 122,959 242,129 42,839 28,770
-- 31,596 -- -- -- --
(145,526) (200,160) (37,721) (40,158) (6,215) (5,456)
--------- --------- -------- -------- ------- -------
(74,264) (12,731) 85,238 201,971 36,624 23,314
--------- --------- -------- -------- ------- -------
(74,640) 48,762 79,728 228,776 33,814 32,618
455,563 406,801 230,720 1,943 33,129 511
--------- --------- -------- -------- ------- -------
$ 380,923 $ 455,563 $310,448 $230,719 $66,943 $33,129
========= ========= ======== ======== ======= =======
2,291 5,271 19,671 41,663 5,243 4,596
-- 1,122 -- -- -- --
(4,681) (6,775) (6,074) (6,836) (765) (857)
--------- --------- -------- -------- ------- -------
(2,390) (382) 13,597 34,827 4,478 3,739
========= ========= ======== ======== ======= =======
<CAPTION>
EQUITY PORTFOLIO
----------------------------
(UNAUDITED)
SIX MONTHS YEAR ENDED
ENDED DECEMBER 31,
JUNE 30, 2000 1999
------------- ------------
<S> <C> <C>
$ (1,588) $ 3,871
53,138 139,309
44,024 (60,507)
--------- ---------
95,574 82,673
--------- ---------
-- (8,196)
-- (43,606)
--------- ---------
-- (51,802)
--------- ---------
120,338 158,668
-- 51,802
(203,274) (275,355)
--------- ---------
(82,936) (64,885)
--------- ---------
12,638 (34,014)
587,324 621,338
--------- ---------
$ 599,962 $ 587,324
========= =========
2,849 4,289
-- 1,607
(4,845) (7,566)
--------- ---------
(1,996) (1,670)
========= =========
</TABLE>
See notes to financial statements.
53
<PAGE> 54
ENTERPRISE ACCUMULATION TRUST
STATEMENTS OF CHANGES IN NET ASSETS (ALL NUMBERS IN THOUSANDS)
<TABLE>
<CAPTION>
GROWTH AND INCOME PORTFOLIO EQUITY INCOME PORTFOLIO
----------------------------- -----------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED DECEMBER 31, ENDED DECEMBER 31,
JUNE 30, 2000 1999 JUNE 30, 2000 1999
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss)............................. $ 637 $ 413 $ 192 $ 162
Net realized gain (loss) on investments and foreign
currency transactions................................. 194 (6) (853) (189)
Net change in unrealized gain (loss) on investments...... 3,361 5,899 (404) (256)
-------- -------- ------- -------
Increase (decrease) in net assets resulting from
operations............................................ 4,192 6,306 (1,065) (283)
-------- -------- ------- -------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income.................................... -- -- -- (27)
Net realized gains on investments........................ -- -- -- --
-------- -------- ------- -------
Total distributions to shareholders.............. -- -- -- (27)
-------- -------- ------- -------
FROM CAPITAL SHARE TRANSACTIONS:
Shares sold.............................................. 63,674 94,533 8,256 32,535
Reinvestment of distributions............................ -- -- -- 27
Shares redeemed.......................................... (14,068) (11,489) (8,016) (4,720)
-------- -------- ------- -------
Total increase (decrease) in net assets resulting
from capital share transactions................ 49,606 83,044 240 27,842
-------- -------- ------- -------
Total increase (decrease) in net assets.......... 53,798 89,350 (825) 27,532
NET ASSETS:
Beginning of period...................................... 89,888 537 27,997 465
-------- -------- ------- -------
End of period............................................ $143,686 $ 89,887 $27,172 $27,997
======== ======== ======= =======
SHARES ISSUED AND REDEEMED:
Issued................................................... 10,433 16,462 1,599 5,995
Issued in reinvestment of distributions.................. -- -- -- 5
Redeemed................................................. (2,306) (1,981) (1,570) (876)
-------- -------- ------- -------
Net increase (decrease).......................... 8,127 14,481 29 5,124
======== ======== ======= =======
</TABLE>
See notes to financial statements.
54
<PAGE> 55
<TABLE>
<CAPTION>
INTERNATIONAL GROWTH PORTFOLIO MANAGED PORTFOLIO BALANCED PORTFOLIO HIGH-YIELD BOND PORTFOLIO
------------------------------ ---------------------------- --------------------------------- ----------------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED) FOR THE PERIOD (UNAUDITED)
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED SIX MONTHS JULY 15, 1999 SIX MONTHS YEAR ENDED
ENDED DECEMBER 31, ENDED DECEMBER 31, ENDED THROUGH ENDED DECEMBER 31,
JUNE 30, 2000 1999 JUNE 30, 2000 1999 JUNE 30, 2000 DECEMBER 31, 1999 JUNE 30, 2000 1999
-------------- ------------- ------------- ------------ ------------- ----------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 172 $ 414 $ 13,592 $ 32,016 $ 120 $ 39 $ 4,801 $ 10,315
8,419 11,104 58,962 484,245 69 64 (539) (3,388)
(24,888) 28,159 (136,304) (297,419) (120) 403 (4,573) (3,044)
-------- -------- ---------- ----------- ------- ------- -------- --------
(16,297) 39,677 (63,750) 218,842 69 506 (311) 3,883
-------- -------- ---------- ----------- ------- ------- -------- --------
-- (1,638) -- (46,305) -- -- (4,801) (10,315)
-- (1,398) -- (388,872) -- -- -- (1,112)
-------- -------- ---------- ----------- ------- ------- -------- --------
-- (3,036) -- (435,177) -- -- (4,801) (11,427)
-------- -------- ---------- ----------- ------- ------- -------- --------
58,075 62,031 121,112 431,709 6,782 10,047 13,998 58,016
-- 3,036 -- 435,177 -- -- 4,801 11,427
(55,021) (59,247) (686,462) (1,097,389) (2,245) (667) (29,125) (53,948)
-------- -------- ---------- ----------- ------- ------- -------- --------
3,054 5,820 (565,350) (230,503) 4,537 9,380 (10,326) 15,495
-------- -------- ---------- ----------- ------- ------- -------- --------
(13,243) 42,461 (629,100) (446,838) 4,606 9,886 (15,438) 7,951
134,255 91,794 2,292,467 2,739,305 9,886 -- 109,816 101,865
-------- -------- ---------- ----------- ------- ------- -------- --------
$121,012 $134,255 $1,663,367 $ 2,292,467 $14,492 $ 9,886 $ 94,378 $109,816
======== ======== ========== =========== ======= ======= ======== ========
6,616 8,546 3,430 10,626 1,336 2,038 2,857 10,943
-- 432 -- 12,952 -- -- 986 2,201
(6,343) (8,154) (19,480) (27,951) (443) (135) (5,946) (10,392)
-------- -------- ---------- ----------- ------- ------- -------- --------
273 824 (16,050) (4,373) 893 1,903 (2,103) 2,752
======== ======== ========== =========== ======= ======= ======== ========
</TABLE>
See notes to financial statements.
55
<PAGE> 56
ENTERPRISE ACCUMULATION TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MULTI-CAP GROWTH PORTFOLIO
-----------------------------------
(UNAUDITED) FOR THE PERIOD
SIX MONTHS ENDED 7/15/99 THROUGH
JUNE 30, 2000 12/31/99
-------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period........................ $ 14.63 $ 5.00
-------- -------
Income from investment operations:
Net investment income (loss)................................ (0.01)(C) (0.01)(C)
Net realized and unrealized gain (loss) on investments...... (1.16) 9.64
-------- -------
Total from investment operations............................ (1.17) 9.63
-------- -------
Less dividends and distributions:
Dividends from net investment income........................ -- --
Distributions from capital gains............................ -- --
-------- -------
Total distributions......................................... -- --
-------- -------
Net asset value, end of period.............................. $ 13.46 $ 14.63
======== =======
Total return................................................ (8.00)%(B) 192.60%(B)
Net assets end of period (000).............................. $149,764 $47,960
Ratio of expenses to average net assets..................... 1.10%(A) 1.40%(A)
Ratio of expenses to average net assets (excluding
reimbursement)............................................ 1.10%(A) 1.52%(A)
Ratio of net investment income (loss) to average net
assets.................................................... (0.17)%(A) (0.21)(A)
Ratio of net investment income (loss) to average net assets
(excluding reimbursement)................................. (0.17)%(A) (0.32)(A)
Portfolio turnover.......................................... 45% 21%
</TABLE>
<TABLE>
<CAPTION>
SMALL COMPANY GROWTH PORTFOLIO
----------------------------------------------------
(UNAUDITED) YEAR ENDED FOR THE PERIOD
SIX MONTHS ENDED DECEMBER 31, 12/01/98 THROUGH
JUNE 30, 2000 1999 12/31/1998
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period........................ $ 8.50 $ 5.46 $ 5.00
------- ------- -------
Income from investment operations:
Net investment income (loss)................................ (0.02)(C) (0.05)(C) --
Net realized and unrealized gain (loss) on investments...... 0.28 3.09 0.46
------- ------- -------
Total from investment operations............................ 0.26 3.04 0.46
------- ------- -------
Less dividends and distributions:
Dividends from net investment income........................ -- -- --
Distributions from capital gains............................ -- -- --
------- ------- -------
Total distributions......................................... -- -- --
------- ------- -------
Net asset value, end of period.............................. $ 8.76 $ 8.50 $ 5.46
======= ======= =======
Total return................................................ 3.06%(B) 55.68% 9.20%(B)
Net assets end of period (000).............................. $64,830 $23,429 $ 469
Ratio of expenses to average net assets..................... 1.11%(A) 1.40% 1.40%(A)
Ratio of expenses to average net assets (excluding
reimbursement)............................................ 1.11%(A) 1.55% 60.67%(A)
Ratio of net investment income (loss) to average net
assets.................................................... (0.36)%(A) (0.81)% (1.26)%(A)
Ratio of net investment income (loss) to average net assets
(excluding reimbursement)................................. (0.36)%(A) (0.96)% (60.54)%(A)
Portfolio turnover.......................................... 24% 37% 4%
</TABLE>
See notes to financial statements.
56
<PAGE> 57
ENTERPRISE ACCUMULATION TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL COMPANY VALUE PORTFOLIO
---------------------------------------------------------------------------
(UNAUDITED) YEARS ENDED DECEMBER 31,
SIX MONTHS ENDED --------------------------------------------------------
JUNE 30, 2000 1999 1998 1997 1996 1995
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period................ $ 31.45 $ 27.36 $ 26.70 $ 20.22 $ 18.48 $ 17.56
-------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income (loss)........................ 0.03(C) 0.04(C) 0.16 0.05 0.25 0.32
Net realized and unrealized gain (loss) on
investments....................................... 0.01 6.27 2.33 8.91 1.82 1.75
-------- -------- -------- -------- -------- --------
Total from investment operations.................... 0.04 6.31 2.49 8.96 2.07 2.07
-------- -------- -------- -------- -------- --------
Less dividends and distributions:
Dividends from net investment income................ -- (0.16) (0.08) (0.15) (0.12) (0.40)
Distributions from capital gains.................... -- (2.06) (1.75) (2.33) (0.21) (0.75)
-------- -------- -------- -------- -------- --------
Total distributions................................. -- (2.22) (1.83) (2.48) (0.33) (1.15)
-------- -------- -------- -------- -------- --------
Net asset value, end of period...................... $ 31.49 $ 31.45 $ 27.36 $ 26.70 $ 20.22 $ 18.48
======== ======== ======== ======== ======== ========
Total return........................................ 0.13%(B) 24.02% 9.61% 44.32% 11.21% 12.28%
Net assets end of period (000)...................... $380,923 $455,563 $406,801 $365,266 $192,704 $166,061
Ratio of expenses to average net assets............. 0.88%(A) 0.84% 0.85% 0.86% 0.84% 0.69%
Ratio of expenses to average net assets (excluding
reimbursement).................................... 0.88%(A) 0.84% 0.85% 0.86% 0.84% 0.72%
Ratio of net investment income (loss) to average net
assets............................................ 0.22%(A) 0.12% 0.56% 0.21% 1.35% 1.86%
Ratio of net investment income (loss) to average net
assets (excluding reimbursement).................. 0.22%(A) 0.12% 0.56% 0.21% 1.35% 1.83%
Portfolio turnover.................................. 13% 23% 37% 58% 137% 70%
</TABLE>
<TABLE>
<CAPTION>
GROWTH PORTFOLIO
----------------------------------------------------
(UNAUDITED) YEAR ENDED FOR THE PERIOD
SIX MONTHS ENDED DECEMBER 31, 12/01/98 THROUGH
JUNE 30, 2000 1999 12/31/98
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period........................ $ 6.56 $ 5.27 $ 5.00
-------- -------- -------
Income from investment operations:
Net investment income (loss)................................ 0.01(C) 0.02(C) 0.00
Net realized and unrealized gain (loss) on investments...... (0.21) 1.27 0.27
-------- -------- -------
Total from investment operations............................ (0.20) 1.29 0.27
-------- -------- -------
Less dividends and distributions:
Dividends from net investment income........................ -- -- --
Distributions from capital gains............................ -- -- --
-------- -------- -------
Total distributions......................................... -- -- --
-------- -------- -------
Net asset value, end of period.............................. $ 6.36 $ 6.56 $ 5.27
======== ======== =======
Total return................................................ (3.05)%(B) 24.48% 5.40%(B)
Net assets end of period (000).............................. $310,448 $230,720 $ 1,943
Ratio of expenses to average net assets..................... 0.82%(A) 0.84% 1.15%(A)
Ratio of expenses to average net assets (excluding
reimbursement)............................................ 0.82%(A) 0.84% 25.33%(A)
Ratio of net investment income (loss) to average net
assets.................................................... 0.30%(A) 0.29% (0.25)%(A)
Ratio of net investment income (loss) to average net assets
(excluding reimbursement)................................. 0.30%(A) 0.29% (24.43)%(A)
Portfolio turnover.......................................... 21% 30% 1%
</TABLE>
See notes to financial statements.
57
<PAGE> 58
ENTERPRISE ACCUMULATION TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CAPITAL APPRECIATION PORTFOLIO
----------------------------------------------------
(UNAUDITED) YEAR ENDED FOR THE PERIOD
SIX MONTHS ENDED DECEMBER 31, 12/01/98 THROUGH
JUNE 30, 2000 1999 12/31/1998
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period........................ $ 8.65 $ 5.57 $ 5.00
------- ------- -------
Income from investment operations:
Net investment income (loss)................................ 0.03(C) (0.03)(C) --
Net realized and unrealized gain (loss) on investments...... (0.62) 3.11 0.57
------- ------- -------
Total from investment operations............................ (0.59) 3.08 0.57
------- ------- -------
Less dividends and distributions:
Dividends from net investment income........................ -- -- --
Distributions from capital gains............................ -- -- --
------- ------- -------
Total distributions......................................... -- -- --
------- ------- -------
Net asset value, end of period.............................. $ 8.06 $ 8.65 $ 5.57
======= ======= =======
Total return................................................ (6.82)%(B) 55.30% 11.40%(B)
Net assets end of period (000).............................. $66,943 $33,129 $ 511
Ratio of expenses to average net assets..................... 0.86%(A) 1.16% 1.30%(A)
Ratio of expenses to average net assets (excluding
reimbursement)............................................ 0.86%(A) 1.16% 63.71%(A)
Ratio of net investment income (loss) to average net
assets.................................................... 0.64%(A) (0.41)% (0.95)%(A)
Ratio of net investment income (loss) to average net assets
(excluding reimbursement)................................. 0.64%(A) (0.41)% (63.36)%(A)
Portfolio turnover.......................................... 64% 247% 1%
</TABLE>
<TABLE>
<CAPTION>
EQUITY PORTFOLIO
---------------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
(UNAUDITED) --------------------------------------------------------
SIX MONTHS ENDED
JUNE 30, 2000 1999 1998 1997 1996 1995
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period................ $ 38.62 $ 36.82 $ 35.09 $ 28.86 $ 23.35 $ 18.14
-------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income (loss)........................ (0.11)(C) 0.23(C) 0.46 0.30 0.37 0.33
Net realized and unrealized gain (loss) on
investments....................................... 6.91 4.86 3.00 7.13 5.52 6.38
-------- -------- -------- -------- -------- --------
Total from investment operations.................... 6.80 5.09 3.46 7.43 5.89 6.71
-------- -------- -------- -------- -------- --------
Less dividends and distributions:
Dividends from net investment income................ -- (0.52) (0.37) (0.32) (0.09) (0.49)
Distributions from capital gains.................... -- (2.77) (1.36) (0.88) (0.29) (1.01)
-------- -------- -------- -------- -------- --------
Total distributions................................. 0.00 (3.29) (1.73) (1.20) (0.38) (1.50)
-------- -------- -------- -------- -------- --------
Net asset value, end of period...................... $ 45.42 $ 38.62 $ 36.82 $ 35.09 $ 28.86 $ 23.35
======== ======== ======== ======== ======== ========
Total return........................................ 17.61%(B) 15.61% 9.90% 25.76% 25.22% 38.44%
Net assets end of period (000)...................... $599,962 $587,324 $621,338 $517,803 $314,907 $167,963
Ratio of expenses to average net assets............. 0.87%(A) 0.82% 0.83% 0.84% 0.81% 0.69%
Ratio of expenses to average net assets (excluding
reimbursement).................................... 0.87%(A) 0.82% 0.83% 0.84% 0.81% 0.72%
Ratio of net investment income (loss) to average net
assets............................................ (0.54)%(A) 0.63% 1.42% 1.42% 1.94% 1.94%
Ratio of net investment income (loss) to average net
assets (excluding reimbursement).................. (0.54)%(A) 0.63% 1.42% 1.42% 1.94% 1.91%
Portfolio turnover.................................. 21% 155% 30% 17% 30% 29%
</TABLE>
See notes to financial statements.
58
<PAGE> 59
ENTERPRISE ACCUMULATION TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH AND INCOME PORTFOLIO
----------------------------------------------------
(UNAUDITED) YEAR ENDED FOR THE PERIOD
SIX MONTHS ENDED DECEMBER 31, 12/01/98 THROUGH
JUNE 30, 2000 1999 12/31/98
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period........................ $ 6.16 $ 5.11 $ 5.00
-------- ------- ------
Income from investment operations:
Net investment income (loss)................................ 0.03(C) 0.07(C) 0.00
Net realized and unrealized gain (loss) on investments...... 0.14 0.98 0.11
-------- ------- ------
Total from investment operations............................ 0.17 1.05 0.11
-------- ------- ------
Less dividends and distributions:
Dividends from net investment income........................ -- -- --
Distributions from capital gains............................ -- (0.00)(D) --
-------- ------- ------
Total distributions......................................... -- -- --
-------- ------- ------
Net asset value, end of period.............................. $ 6.33 $ 6.16 $ 5.11
======== ======= ======
Total return................................................ 2.76%(B) 20.55% 2.20%(B)
Net assets end of period (000).............................. $143,686 $89,887 $ 537
Ratio of expenses to average net assets..................... 0.84%(A) 0.94% 1.05%(A)
Ratio of expenses to average net assets (excluding
reimbursement)............................................ 0.84%(A) 0.94% 60.68%(A)
Ratio of net investment income (loss) to average net
assets.................................................... 1.11%(A) 1.22% (0.45)%(A)
Ratio of net investment income (loss) to average net assets
(excluding reimbursement)................................. 1.11%(A) 1.22% 60.08%(A)
Portfolio turnover.......................................... 2% 1% 9%
</TABLE>
<TABLE>
<CAPTION>
EQUITY INCOME PORTFOLIO
-----------------------------------------------------
(UNAUDITED) YEAR ENDED FOR THE PERIOD
SIX MONTHS ENDED DECEMBER 31, 12/01/98 THROUGH
JUNE 30, 2000 1999 12/31/98
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period........................ $ 5.37 $ 5.09 $ 5.00
------- ------- -------
Income from investment operations:
Net investment income (loss)................................ 0.04(C) 0.06(C) --
Net realized and unrealized gain (loss) on investments...... (0.23) 0.23 0.09
------- ------- -------
Total from investment operations............................ (0.19) 0.29 0.09
------- ------- -------
Less dividends and distributions:
Dividends from net investment income........................ -- (0.01) --
Distributions from capital gains............................ -- -- --
------- ------- -------
Total distributions......................................... -- (0.01) --
------- ------- -------
Net asset value, end of period.............................. $ 5.18 $ 5.37 $ 5.09
======= ======= =======
Total return................................................ (3.54)%(B) 5.70% 1.80%(B)
Net assets end of period (000).............................. $27,172 $27,997 $ 465
Ratio of expenses to average net assets..................... 0.86%(A) 1.05% 1.05%(A)
Ratio of expenses to average net assets (excluding
reimbursement)............................................ 0.86%(A) 1.20% 66.67%(A)
Ratio of net investment income (loss) to average net
assets.................................................... 1.45%(A) 1.21% 0.54%(A)
Ratio of net investment income (loss) to average net assets
(excluding reimbursement)................................. 1.45%(A) 1.06% (65.07)%(A)
Portfolio turnover.......................................... 16% 18% 0%
</TABLE>
See notes to financial statements.
59
<PAGE> 60
ENTERPRISE ACCUMULATION TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL GROWTH PORTFOLIO
-----------------------------------------------------------------------
(UNAUDITED) YEARS ENDED DECEMBER 31,
SIX MONTHS ENDED ----------------------------------------------------
JUNE 30, 2000 1999 1998 1997 1996 1995
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.................... $ 9.29 $ 6.74 $ 6.18 $ 6.05 $ 5.39 $ 4.96
-------- -------- ------- ------- ------- -------
Income from investment operations:
Net investment income (loss)............................ 0.01(C) 0.03(C) 0.06 0.06 0.05 0.04
Net realized and unrealized gain (loss) on
investments........................................... (1.08) 2.74 0.84 0.26 0.63 0.67
-------- -------- ------- ------- ------- -------
Total from investment operations........................ (1.07) 2.77 0.90 0.32 0.68 0.71
-------- -------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income.................... -- (0.12) (0.07) (0.04) -- (0.04)
Distributions from capital gains........................ -- (0.10) (0.27) (0.15) (0.02) (0.24)
-------- -------- ------- ------- ------- -------
Total distributions..................................... -- (0.22) (0.34) (0.19) (0.02) (0.28)
-------- -------- ------- ------- ------- -------
Net asset value, end of period.......................... $ 8.22 $ 9.29 $ 6.74 $ 6.18 $ 6.05 $ 5.39
======== ======== ======= ======= ======= =======
Total return............................................ (11.52)%(B) 42.12% 14.83% 5.26% 12.65% 14.64%
Net assets end of period (000).......................... $121,012 $134,255 $91,794 $78,148 $52,768 $18,598
Ratio of expenses to average net assets................. 1.04%(A) 1.01% 1.22% 1.19% 1.38% 1.55%
Ratio of expenses to average net assets (excluding
reimbursement)........................................ 1.04%(A) 1.01% 1.22% 1.19% 1.38% 2.21%
Ratio of net investment income (loss) to average net
assets................................................ 0.26%(A) 0.41% 1.04% 1.34% 1.32% 1.17%
Ratio of net investment income (loss) to average net
assets (excluding reimbursement)...................... 0.26%(A) 0.41% 1.04% 1.34% 1.32% 0.51%
Portfolio turnover...................................... 41% 129% 55% 28% 21% 27%
</TABLE>
<TABLE>
<CAPTION>
MANAGED PORTFOLIO
-------------------------------------------------------------------------------------
(UNAUDITED) YEARS ENDED DECEMBER 31,
SIX MONTHS ENDED ------------------------------------------------------------------
JUNE 30, 2000 1999 1998 1997 1996 1995
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period...... $ 36.30 $ 40.56 $ 40.78 $ 34.31 $ 28.06 $ 20.82
---------- ---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income (loss).............. 0.25(C) 0.50(C) 0.71 0.35 0.59 0.40
Net realized and unrealized gain (loss) on
investments............................. (1.24) 2.65 2.53 8.06 5.99 8.97
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations.......... (0.99) 3.15 3.24 8.41 6.58 9.37
---------- ---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Dividends from net investment income...... -- (0.79) (0.43) (0.55) (0.06) (0.75)
Distributions from capital gains.......... -- (6.62) (3.03) (1.39) (0.27) (1.38)
---------- ---------- ---------- ---------- ---------- ----------
Total distributions....................... -- (7.41) (3.46) (1.94) (0.33) (2.13)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period............ $ 35.31 $ 36.30 $ 40.56 $ 40.78 $ 34.31 $ 28.06
========== ========== ========== ========== ========== ==========
Total return.............................. (2.73)%(B) 9.22% 7.95% 24.50% 23.47% 46.89%
Net assets end of period (000)............ $1,663,367 $2,292,467 $2,739,305 $2,672,932 $1,935,343 $1,264,718
Ratio of expenses to average net assets... 0.81%(A) 0.76% 0.76% 0.76% 0.74% 0.67%
Ratio of expenses to average net assets
(excluding reimbursement)............... 0.81%(A) 0.76% 0.76% 0.76% 0.74% 0.67%
Ratio of net investment income (loss) to
average net assets...................... 1.40%(A) 1.23% 1.66% 1.14% 2.16% 1.80%
Ratio of net investment income (loss) to
average net assets (excluding
reimbursement).......................... 1.40%(A) 1.23% 1.66% 1.14% 2.16% 1.80%
Portfolio turnover........................ 11% 90% 46% 32% 29% 31%
</TABLE>
See notes to financial statements.
60
<PAGE> 61
ENTERPRISE ACCUMULATION TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BALANCED PORTFOLIO
-----------------------------------
(UNAUDITED) FOR THE PERIOD
SIX MONTHS ENDED 7/15/99 THROUGH
JUNE 30, 2000 12/31/99
-------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period........................ $ 5.20 $ 5.00
------- ------
Income from investment operations:
Net investment income (loss)................................ 0.05(C) 0.04(C)
Net realized and unrealized gain (loss) on investments...... (0.07) 0.16
------- ------
Total from investment operations............................ (0.02) 0.20
------- ------
Less dividends and distributions:
Dividends from net investment income........................ -- --
Distributions from capital gains............................ -- --
------- ------
Total distributions......................................... -- --
------- ------
Net asset value, end of period.............................. $ 5.18 $ 5.20
======= ======
Total return................................................ (0.38)%(B) 4.00%(B)
Net assets end of period (000).............................. $14,492 $9,886
Ratio of expenses to average net assets..................... 0.95%(A) 0.95%(A)
Ratio of expenses to average net assets (excluding
reimbursement)............................................ 0.95%(A) 1.89%(A)
Ratio of net investment income (loss) to average net
assets.................................................... 2.01%(A) 1.93%(A)
Ratio of net investment income (loss) to average net assets
(excluding reimbursement)................................. 2.01%(A) 0.99%(A)
Portfolio turnover.......................................... 26% 13%
</TABLE>
<TABLE>
<CAPTION>
HIGH-YIELD BOND PORTFOLIO
------------------------------------------------------------------------
(UNAUDITED) FOR THE YEARS ENDED DECEMBER 31,
SIX MONTHS ENDED -----------------------------------------------------
JUNE 30, 2000 1999 1998 1997 1996 1995
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period................... $ 5.06 $ 5.37 $ 5.71 $ 5.51 $ 5.31 $ 4.98
------- -------- -------- ------- ------- -------
Income from investment operations:
Net investment income (loss)........................... 0.23 0.46(C) 0.46 0.51 0.45 0.45
Net realized and unrealized gain (loss) on
investments.......................................... (0.25) (0.26) (0.26) 0.20 0.21 0.35
------- -------- -------- ------- ------- -------
Total from investment operations....................... (0.02) 0.20 0.20 0.71 0.66 0.80
------- -------- -------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income................... (0.23) (0.46) (0.46) (0.51) (0.45) (0.45)
Distributions from capital gains....................... -- (0.05) (0.08) -- (0.01) (0.02)
------- -------- -------- ------- ------- -------
Total distributions.................................... (0.23) (0.51) (0.54) (0.51) (0.46) (0.47)
------- -------- -------- ------- ------- -------
Net asset value, end of period......................... $ 4.81 $ 5.06 $ 5.37 $ 5.71 $ 5.51 $ 5.31
======= ======== ======== ======= ======= =======
Total return........................................... (0.28)%(B) 3.86% 3.60% 13.38% 12.95% 16.59%
Net assets end of period (000)......................... $94,378 $109,816 $101,865 $68,364 $34,411 $15,223
Ratio of expenses to average net assets................ 0.75%(A) 0.69% 0.72% 0.77% 0.85% 0.85%
Ratio of expenses to average net assets (excluding
reimbursement)....................................... 0.75%(A) 0.69% 0.72% 0.77% 0.94% 1.59%
Ratio of net investment income (loss) to average net
assets............................................... 9.59%(A) 8.76% 8.19% 8.47% 8.57% 8.51%
Ratio of net investment income (loss) to average net
assets (excluding reimbursement)..................... 9.59%(A) 8.76% 8.19% 8.47% 8.48% 7.77%
Portfolio turnover..................................... 32% 97% 109% 175% 175% 115%
</TABLE>
---------------
(A) Annualized.
(B) Not annualized.
(C) Based on average shares outstanding.
(D) Less than $0.01 per share.
See notes to financial statements.
61
<PAGE> 62
ENTERPRISE ACCUMULATION TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 (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: Multi-Cap Growth, Small Company Growth,
Small Company Value, Growth, Capital Appreciation, Equity, Growth and Income,
Equity Income, International Growth, Managed, Balanced and High-Yield Bond.
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 with 61 days or more to maturity at time of purchase
are valued at market value through the 61st day prior to maturity, based on
quotations received from market makers or other appropriate sources; thereafter,
any unrealized appreciation or depreciation existing on the 61st day is
amortized to par on a straight-line basis over the remaining number of days to
maturity. Short-term securities with 60 days or less to maturity at time of
purchase are valued at amortized cost, which approximates market value. 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 credit worthiness 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. Foreign denominated assets held by the International
Growth Portfolio may involve risks not typically associated with domestic
transactions including but not limited to, unanticipated movements in exchange
rates, the degree of government supervision and regulation of security markets
and the possibility of political or economic instability.
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, 2000.
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 Portfolio does not isolate
62
<PAGE> 63
ENTERPRISE ACCUMULATION TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
that portion of its realized and unrealized gains on investments from changes in
foreign exchange rates from the fluctuations arising due to changes in the
market prices of the investments.
Security Transactions and Investment Income -- Security transactions are
accounted for on the trade date. Realized gains and losses from 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, such as advisory and custodian fees, as well as a portion of the common
expenses of the Trust, which are generally allocated based on average net
assets.
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 accounting principles generally accepted
in the United States 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.
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. Risks arise from the possible
inability of counterparties to meet the terms of their contracts and from
movements in currency values.
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 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.
3. TRANSACTIONS WITH AFFILIATES
An investment advisory fee is payable monthly to Enterprise Capital
Management, Inc. ("ECM"), 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 at the following annual rates: for
Equity, Small Company Value, and Managed, 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 both Small Company Growth and Multi-Cap Growth, 0.85%
for International Growth, 0.75% for Growth, Capital Appreciation, Growth and
Income, Equity Income and Balanced, and 0.60% for High-Yield Bond.
ECM has contractually agreed to limit the portfolios' expenses through May
1, 2001, to the following expense ratios: Multi-Cap Growth -- 1.40%, Small
Company Growth -- 1.40%, Small Company Value -- 1.30%, Growth -- 1.15%, Capital
Appreciation -- 1.30%, Equity -- 1.15%, Growth and Income -- 1.05%, Equity
Income -- 1.05%, International Growth -- 1.55%, Managed -- 1.05%,
Balanced -- 0.95% and High-Yield Bond -- 0.85%.
ECM 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, 2000:
Multi-Cap Growth -- $673,000, Small Company Growth -- $438,000,
Growth -- $318,000, Capital Appreciation -- $403,000, Growth and
Income -- $316,500, Equity Income -- $259,000 and Balanced -- $259,000.
63
<PAGE> 64
ENTERPRISE ACCUMULATION TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
ECM has entered into subadvisory agreements with various investment
advisers as subadvisers for the Trust. A portion of the management fee received
by ECM is paid to the respective subadviser. 1740 Advisers, Inc., a wholly-owned
subsidiary of MONY Group Inc., is the subadviser for the Equity Income
Portfolio. For the six months ended June 30, 2000, ECM incurred subadvisory fees
payable to 1740 Advisers, Inc. related to the Equity Income Portfolio of $39,647
with a related payable balance of $6,791 as of June 30, 2000.
For the six months ended June 30, 2000, the following portfolios paid
brokerage commissions to affiliates as follows:
<TABLE>
<S> <C>
Multi-Cap Growth............................................ $ 56,465
Small Company Value......................................... 167,271
Growth...................................................... 4,272
Capital Appreciation........................................ 1,567
Equity...................................................... 1,980
Equity Income............................................... 390
Managed..................................................... 321,464
Balanced.................................................... 210
</TABLE>
4. INVESTMENT TRANSACTIONS
Purchases and Sales of Investment Securities -- For the six months ended
June 30, 2000, 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>
Multi-Cap Growth....................................... -- -- $150,647,987 $ 41,764,604
Small Company Growth................................... -- -- 49,150,253 9,777,948
Small Company Value.................................... -- -- 52,197,834 118,835,289
Growth................................................. -- -- 118,959,360 50,382,048
Capital Appreciation................................... -- -- 56,481,340 25,914,238
Equity................................................. -- -- 124,235,457 223,342,490
Growth and Income...................................... -- -- 46,782,847 1,657,851
Equity Income.......................................... -- -- 4,240,934 4,538,866
International Growth................................... -- -- 60,323,663 52,373,725
Managed................................................ -- -- 200,962,586 673,763,203
Balanced............................................... $246,606 $620,484 5,118,743 2,100,086
High-Yield Bond........................................ 996,016 998,438 30,037,917 38,616,754
</TABLE>
64
<PAGE> 65
ENTERPRISE ACCUMULATION TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
Outstanding forward foreign exchange contracts in the International Growth
Portfolio at June 30, 2000 are as follows:
<TABLE>
<CAPTION>
PURCHASES NET UNREALIZED
SETTLEMENT ---------------------------------- APPRECIATION/
DATE RECEIVE DELIVER (DEPRECIATION)
---------- --------------- --------------- --------------
<S> <C> <C> <C>
7/27/00 EUR 17,000,000 USD 15,813,400 $ 445,372
8/2/00 CHF 7,500,000 USD 4,481,625 131,012
8/22/00 JPY 770,000,000 USD 7,684,631 (357,862)
-----------
$ 218,522
===========
<CAPTION>
SALES
----------------------------------
RECEIVE DELIVER
--------------- ---------------
<S> <C> <C> <C>
7/27/00 USD 15,702,475 EUR 17,000,000 $ (556,297)
8/2/00 USD 4,374,964 CHF 7,500,000 (237,674)
8/22/00 USD 10,239,117 GBP 6,900,000 (211,521)
8/22/00 USD 7,156,134 JPY 770,000,000 (170,635)
-----------
(1,176,127)
-----------
$ (957,605)
===========
</TABLE>
5. WRITTEN OPTIONS
When a portfolio writes an option, an amount equal to the premium received
by the portfolio is recorded as a liability and is subsequently adjusted to the
current market value of the option written. Premiums received from writing
options that expire unexercised are treated realized gains from investments. The
difference between the premium and the amount paid on effecting a closing
purchase transaction, is also treated as a realized gain, or if the premium is
less than the amount paid for the closing purchase transaction, as a realized
loss. If a call option is exercised, the premium is added to the proceeds from
the sale of the underlying security in determining whether the portfolio has
realized a gain or loss. The risk associated with writing call options is that
the portfolio may forego the opportunity for a profit if the market value of the
underlying security increases and the option is exercised.
Transactions in call options written for the six months ended June 30,
2000, were as follows:
<TABLE>
<CAPTION>
NUMBER
OF PREMIUMS
GROWTH AND INCOME PORTFOLIO CONTRACTS RECEIVED
--------------------------- --------- --------
<S> <C> <C>
Outstanding call options written at December 31, 1999....... -- --
Options written............................................. 30 $61,098
Options exercised........................................... -- --
------- -------
Outstanding call options written at June 30, 2000........... 30 $61,098
------- -------
</TABLE>
65
<PAGE> 66
ENTERPRISE ACCUMULATION TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
6. TAX BASIS UNREALIZED GAIN (LOSS) OF INVESTMENTS AND DISTRIBUTIONS
At June 30, 2000, 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>
Multi-Cap Growth............................... $ 144,635,983 $ 16,153,312 $ (9,828,024) $ 6,325,288
Small Company Growth........................... 59,381,633 12,555,783 (6,905,450) 5,645,333
Small Company Value............................ 342,577,135 98,224,096 (59,606,254) 38,617,842
Growth......................................... 301,251,914 29,848,535 (18,082,388) 11,766,147
Capital Appreciation........................... 62,257,550 6,865,153 (2,969,822) 3,895,331
Equity......................................... 488,531,213 133,594,260 (16,702,391) 116,891,869
Growth and Income.............................. 135,582,576 18,506,996 (9,234,997) 9,271,999
Equity Income.................................. 27,478,322 2,053,191 (2,707,622) (654,431)
International Growth........................... 107,128,327 22,443,950 (8,365,256) 14,078,694
Managed........................................ 1,521,347,384 236,846,657 (115,302,929) 121,543,728
Balanced....................................... 14,166,744 810,153 (526,884) 283,269
High-Yield Bond................................ 103,214,678 574,207 (11,770,573) (11,196,366)
</TABLE>
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from accounting principles generally
accepted in the United States. These differences are primarily due to differing
treatments for futures and options transactions, paydowns, market discounts,
losses deferred due to wash sales, foreign currency transactions, investments in
passive foreign investment companies.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital. These
reclassifications have no effect on net assets or net asset values per share.
Any taxable gain remaining at fiscal year end is distributed in the following
year.
At December 31, 1999 the following portfolios had net capital loss
carryforwards for federal tax purposes of:
<TABLE>
<CAPTION>
BALANCE EXPIRES
---------- -----------------
<S> <C> <C>
Equity Income............................................... $ 189,023 December 31, 2007
High-Yield Bond............................................. 3,401,504 December 31, 2007
</TABLE>
7. BORROWINGS
The Trust, and another affiliated mutual fund are parties to a $50 million
redemption line of credit with State Street Bank and Trust Co. whereby each
portfolio may borrow up to its prospectus defined limitation. At June 30, 2000,
there were no loans outstanding. Listed below are the portfolios which had
outstanding balances at any time during the six months ended June 30, 2000:
<TABLE>
<CAPTION>
MAXIMUM AVERAGE DAILY WEIGHTED
AMOUNT BALANCE AVERAGE
PORTFOLIO BORROWED OUTSTANDING INTEREST RATE
--------- ---------- ------------- -------------
<S> <C> <C> <C>
International Growth........................................ $2,177,000 $70,973 7.04%
</TABLE>
66
<PAGE> 67
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 Assistant Secretary and 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
Two Commerce Square, Suite 1700
2001 Market Street
Philadelphia, Pennsylvania 19103
This report is authorized for distribution only to shareholders and to
others who have received a copy of this Trust's prospectus.
67
