<PAGE> 1
October 4, 1996
Dear Fellow Shareholders:
On behalf of all of us at Heritage Asset Management, thank you for your
continuing investment in Heritage Cash Trust Money Market Fund (the "Fund").
Over your Fund's most recent fiscal year ended August 31, total net assets
increased from $1.29 billion to $1.64 billion. During the same period, the
seven-day effective yield for your Fund was relatively stable. After falling
from 5.12% on August 31, 1995 to 4.71% on February 29, 1996, rates have
increased slightly, reaching 4.82% on August 31 of this year.
For much of the past year, we have all seen headlines speculating about the
growth rate of our domestic economy. Are we growing too fast, or too
slowly -- and what will the Federal Reserve Board do to slow the growth or speed
it up? The Fed lowered their Federal funds rate target twice in the first half
of your Fund's fiscal year but have made no further changes since February. As
long as the economy maintains a slow steady growth rate, we believe that the Fed
should not take any action in the next several months to cause short-term rates
to change significantly.
Your Fund continues to maintain a AAAm rating from Standard & Poor's
Ratings Group. This rating reflects the fact that we follow even more
restrictive investment criteria in managing your Fund than required by the
Securities and Exchange Commission. We also continue to provide a wide range of
services that, we hope, make your Fund extremely convenient for you to use.
These services include free checking, daily sweeps to and from your brokerage
accounts and automatic payment programs. If there are ever any ways in which you
believe we could better serve you, please call us at 800-709-3863.
Thank you again for your confidence in entrusting us with a portion of your
investment portfolio.
Sincerely,
/s/ Stephen G. Hill
-------------------
Stephen G. Hill
President
<PAGE> 2
- --------------------------------------------------------------------------------
HERITAGE CASH TRUST -- MONEY MARKET FUND
STATEMENT OF NET ASSETS
AUGUST 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL FINAL
AMOUNT MATURITY DATE VALUE
--------- ---------------- --------------
<C> <S> <C> <C>
COMMERCIAL PAPER--83.8%(A)
DOMESTIC--77.8%
BEVERAGES--2.0%
$ 8,700,000 The Coca-Cola Company, 5.27%....................................... 11/04/96 $ 8,618,491
25,000,000 The Coca-Cola Company, 5.40%....................................... 10/09/96 24,857,500
--------------
33,475,991
--------------
BREWING--1.2%
19,128,000 Anheuser-Busch Companies, Inc., 5.32%.............................. 09/23/96 19,065,813
--------------
CHEMICALS--3.7%
20,000,000 E.I. du Pont de Nemours & Company, 5.35%........................... 09/06/96 19,985,139
10,000,000 E.I. du Pont de Nemours & Company, 5.37%........................... 09/25/96 9,964,200
20,000,000 E.I. du Pont de Nemours & Company, 5.39%........................... 10/18/96 19,859,261
10,000,000 Monsanto Company, 5.32%............................................ 11/05/96 9,903,944
--------------
59,712,544
--------------
COMMERCIAL PRINTING--1.3%
22,050,000 R.R. Donnelley & Sons Company, 5.30%............................... 10/15/96 21,907,165
--------------
COMPUTER/OFFICE EQUIPMENT--3.6%
37,500,000 Hewlett-Packard Company, 5.30%..................................... 10/30/96 37,174,271
12,500,000 Hewlett-Packard Company, 5.38%..................................... 09/27/96 12,451,431
10,000,000 Xerox Corporation, 5.33%........................................... 09/24/96 9,965,947
--------------
59,591,649
--------------
CORPORATE FINANCE--10.2%
16,568,000 Ciesco, L.P., 5.25%................................................ 09/03/96 16,563,168
10,000,000 Ciesco, L.P., 5.28%................................................ 11/06/96 9,903,200
2,442,000 Ciesco, L.P., 5.35%................................................ 10/18/96 2,424,943
17,400,000 Ciesco, L.P., 5.45%................................................ 10/09/96 17,299,902
29,000,000 Corporate Asset Funding Company, Inc., 5.28%....................... 10/02/96 28,868,147
21,000,000 Corporate Asset Funding Company, Inc., 5.38%....................... 09/09/96 20,974,893
25,000,000 General Electric Capital Corporation, 5.36%........................ 01/21/97 24,471,444
25,000,000 General Electric Capital Corporation, 5.47%........................ 11/14/96 24,718,903
22,000,000 Private Export Funding Corporation, 5.25%.......................... 11/12/96 21,769,000
--------------
166,993,600
--------------
DRUGS--10.3%
10,000,000 Abbott Laboratories, 5.25%......................................... 09/17/96 9,976,667
10,000,000 Abbott Laboratories, 5.32%......................................... 09/23/96 9,967,488
14,000,000 Abbott Laboratories, 5.32%......................................... 09/24/96 13,952,416
16,000,000 Abbott Laboratories, 5.32%......................................... 09/25/96 15,943,253
10,000,000 Eli Lilly & Company, 5.35%......................................... 02/06/97 9,765,195
25,000,000 Eli Lilly & Company, 5.36%......................................... 09/03/96 24,992,556
10,000,000 Eli Lilly & Company, 5.38%......................................... 10/21/96 9,925,278
5,000,000 Eli Lilly & Company, 5.40%......................................... 10/10/96 4,970,750
10,000,000 Pfizer, Inc., 5.24%................................................ 10/07/96 9,947,600
10,000,000 Pfizer, Inc., 5.27%................................................ 09/27/96 9,961,938
31,430,000 Schering Corporation, 5.27%........................................ 10/22/96 31,195,349
14,510,000 Schering Corporation, 5.27%........................................ 11/21/96 14,337,948
3,825,000 Schering Corporation, 5.38%........................................ 09/24/96 3,811,853
--------------
168,748,291
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE> 3
- --------------------------------------------------------------------------------
HERITAGE CASH TRUST -- MONEY MARKET FUND
STATEMENT OF NET ASSETS
AUGUST 31, 1996
(CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL FINAL
AMOUNT MATURITY DATE VALUE
--------- ---------------- --------------
<C> <S> <C> <C>
ELECTRONICS--4.6%
$ 26,000,000 Emerson Electric Company, 5.22%.................................... 09/18/96 $ 25,935,910
30,000,000 Motorola, Inc., 5.35%.............................................. 09/19/96 29,919,750
20,000,000 Motorola, Inc., 5.36%.............................................. 09/26/96 19,925,556
--------------
75,781,216
--------------
FOOD--11.0%
30,000,000 Campbell Soup Company, 5.25%....................................... 09/17/96 29,930,000
25,000,000 Cargill, Inc., 5.43%............................................... 09/06/96 24,981,146
25,000,000 Cargill, Inc., 5.47%............................................... 10/10/96 24,851,854
25,000,000 H.J. Heinz Company, 5.27%.......................................... 09/19/96 24,934,125
25,000,000 H.J. Heinz Company, 5.27%.......................................... 09/20/96 24,930,465
14,500,000 Kellogg Company, 5.32%............................................. 09/25/96 14,448,573
15,475,000 Kellogg Company, 5.35%............................................. 09/10/96 15,454,302
20,000,000 Kellogg Company, 5.35%............................................. 09/12/96 19,967,306
--------------
179,497,771
--------------
HOUSEHOLD PRODUCTS--2.7%
10,000,000 The Procter & Gamble Company, 5.25%................................ 10/07/96 9,947,500
6,000,000 The Procter & Gamble Company, 5.25%................................ 11/19/96 5,930,875
3,439,000 The Procter & Gamble Company, 5.26%................................ 10/15/96 3,416,891
20,000,000 The Procter & Gamble Company, 5.35%................................ 09/20/96 19,943,528
5,000,000 The Procter & Gamble Company, 5.37%................................ 09/25/96 4,982,100
--------------
44,220,894
--------------
OIL & GAS--11.2%
40,000,000 Amoco Corporation, 5.30%........................................... 09/16/96 39,911,666
10,000,000 Amoco Corporation, 5.33%........................................... 09/16/96 9,977,792
15,000,000 Chevron UK Investment PLC, 5.30%................................... 11/22/96 14,818,917
8,000,000 Chevron UK Investment PLC, 5.35%................................... 12/05/96 7,887,055
12,000,000 Chevron UK Investment PLC, 5.40%................................... 10/07/96 11,935,200
15,000,000 Chevron UK Investment PLC, 5.45%................................... 10/07/96 14,918,250
35,000,000 Exxon Corporation, 5.25%........................................... 09/19/96 34,908,125
50,000,000 Shell Oil Company, 5.33%........................................... 09/04/96 49,977,792
--------------
184,334,797
--------------
PAPER--2.8%
35,000,000 Kimberly-Clark Corporation, 5.27%.................................. 10/18/96 34,759,190
12,000,000 Kimberly-Clark Corporation, 5.32%.................................. 09/13/96 11,978,720
--------------
46,737,910
--------------
PUBLISHING--2.3%
33,400,000 Knight-Ridder, Inc., 5.28%......................................... 11/04/96 33,086,485
4,500,000 Knight-Ridder, Inc., 5.29%......................................... 10/29/96 4,461,648
--------------
37,548,133
--------------
RECREATION--0.5%
7,750,000 Walt Disney Company, 5.32%......................................... 10/07/96 7,708,770
--------------
RETAIL--1.2%
10,000,000 J.C. Penney Funding Corporation, 5.31%............................. 10/18/96 9,930,675
10,000,000 J.C. Penney Funding Corporation, 5.37%............................. 09/17/96 9,976,133
--------------
19,906,808
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE> 4
- --------------------------------------------------------------------------------
HERITAGE CASH TRUST -- MONEY MARKET FUND
STATEMENT OF NET ASSETS
AUGUST 31, 1996
(CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL FINAL
AMOUNT MATURITY DATE VALUE
--------- ---------------- --------------
<C> <S> <C> <C>
TELECOMMUNICATIONS--9.2%
$ 10,500,000 Ameritech Capital Funding Corporation, 5.28%....................... 10/29/96 $ 10,410,680
10,000,000 Ameritech Corporation, 5.35%....................................... 09/18/96 9,974,736
29,300,000 Ameritech Corporation, 5.40%....................................... 09/30/96 29,172,545
2,700,000 AT&T Corporation, 5.31%............................................ 09/13/96 2,695,221
50,000,000 BellSouth Capital Funding Corporation, 5.30%....................... 11/08/96 49,499,444
11,000,000 Southwestern Bell Telephone Company, 5.33%......................... 09/17/96 10,973,942
39,000,000 Southwestern Bell Telephone Company, 5.37%......................... 10/15/96 38,744,030
--------------
151,470,598
--------------
Total Domestic Commercial Paper.................................... 1,276,701,950
--------------
FOREIGN--6.0%(A)(B)
DRUGS--2.4%
15,000,000 Smithkline Beecham Corporation, 5.27%.............................. 09/20/96 14,958,279
25,000,000 Smithkline Beecham Corporation, 5.30%.............................. 11/04/96 24,764,444
--------------
39,722,723
--------------
ELECTRONICS--1.5%
19,000,000 Siemens Corporation, 5.26%......................................... 09/30/96 18,919,493
5,000,000 Siemens Corporation, 5.37%......................................... 09/13/96 4,991,050
--------------
23,910,543
--------------
FOOD--0.6%
10,000,000 Unilever Capital Corporation, 5.33%................................ 10/15/96 9,934,856
--------------
PUBLIC FINANCE--1.5%
10,000,000 The Canadian Wheat Board, 5.31%.................................... 09/17/96 9,976,400
5,697,000 The Canadian Wheat Board, 5.32%.................................... 09/23/96 5,678,478
10,000,000 The Canadian Wheat Board, 5.32%.................................... 01/17/97 9,796,067
--------------
25,450,945
--------------
Total Foreign Commercial Paper..................................... 99,019,067
--------------
Total Commercial Paper (Cost $1,375,721,017)....................... 1,375,721,017
--------------
CORPORATE NOTES--1.0%(A)
CORPORATE FINANCE--1.0%
16,737,992 Nationsbank Auto Owner Trust 1996-A, Class A1, 5.78%............... 01/15/97 16,737,992
--------------
Total Corporate Notes (Cost $16,737,992)........................... 16,737,992
--------------
U.S. GOVERNMENT AND AGENCY SECURITIES--12.2%(A)
11,120,000 Agency For International Development--Sri Lanka, 5.95%(d).......... 06/15/12 11,148,485
4,500,000 Federal Home Loan Bank, 5.25%...................................... 02/10/97 4,393,688
13,000,000 Federal Home Loan Bank, 5.31%...................................... 09/04/96 12,994,248
11,000,000 Federal Home Loan Bank, 5.35%...................................... 10/16/96 10,926,506
15,000,000 Federal Home Loan Bank, 5.43%...................................... 01/17/97 14,687,775
6,400,000 Federal Home Loan Bank, 5.46%...................................... 01/14/97 6,268,960
12,705,000 Federal Home Loan Mortgage Corporation, 5.23%...................... 11/22/96 12,553,648
30,000,000 Federal Home Loan Mortgage Corporation, 5.31%...................... 09/09/96 29,964,600
7,295,000 Federal Home Loan Mortgage Corporation, 5.35%...................... 10/07/96 7,256,008
30,000,000 Federal National Mortgage Association, 5.25%....................... 02/04/97 29,317,500
10,000,000 Federal National Mortgage Association, 5.31%....................... 09/09/96 9,988,200
10,000,000 Federal National Mortgage Association, 5.34%....................... 09/13/96 9,982,200
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE> 5
- --------------------------------------------------------------------------------
HERITAGE CASH TRUST -- MONEY MARKET FUND
STATEMENT OF NET ASSETS
AUGUST 31, 1996
(CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL FINAL
AMOUNT MATURITY DATE VALUE
--------- ---------------- --------------
<C> <S> <C> <C>
$ 20,000,000 Student Loan Marketing Association, 5.32%.......................... 09/30/96 $ 19,914,369
10,000,000 U.S. Treasury Note, 7.50%.......................................... 01/31/97 10,090,912
10,000,000 U.S. Treasury Note, 8.00%.......................................... 01/15/97 10,102,363
--------------
Total U.S. Government and Agency Securities (cost $199,589,462).... 199,589,462
--------------
REPURCHASE AGREEMENT--3.9%(A)
Repurchase Agreement with State Street Bank and Trust Company, dated August 30, 1996, @
5.15%, to be repurchased at $64,561,923 on September 3, 1996, collateralized by
$65,631,225 United States Treasury Notes, 8.125% due August 15, 2019 (market value
$65,883,091 including interest) (cost $64,525,000)........................................ 64,525,000
--------------
TOTAL INVESTMENTS (cost $1,656,573,471)(c), 100.9% (a).................................... 1,656,573,471
OTHER ASSETS AND LIABILITIES, net (0.9%)(a)............................................... (15,631,334)
--------------
NET ASSETS (consisting of paid-in-capital net of accumulated net realized loss of
$240,778), 100.00%........................................................................ $1,640,942,137
================
CLASS A SHARES
- ------------
Net asset value, offering and redemption price per share, ($1,640,756,027 divided by
1,640,996,808 shares outstanding)......................................................... $1.00
================
CLASS C SHARES
- ------------
Net asset value, offering and redemption price per share, ($186,110 divided by 186,107
shares outstanding)....................................................................... $1.00
================
</TABLE>
- ---------------
(a) Percentages are based on net assets.
(b) U.S. dollar denominated.
(c) The aggregate identified cost for federal income tax purposes is the same.
(d) Floating rate notes that reset on a weekly basis. Rates indicated are rates
as of August 31, 1996.
The accompanying notes are an integral part of the financial statements.
5
<PAGE> 6
- --------------------------------------------------------------------------------
HERITAGE CASH TRUST -- MONEY MARKET FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment Income:
Interest................................................................................. $85,202,533
Expenses (Notes 1 and 4):
Management fee......................................................................... $7,253,924
Distribution fee....................................................................... 2,297,999
Shareholder servicing.................................................................. 1,665,430
Amortization of state registration expenses............................................ 185,291
Custodian/Fund Accounting fees......................................................... 178,432
Federal registration fees.............................................................. 119,714
Reports to shareholders................................................................ 96,007
Professional fees...................................................................... 45,429
Insurance.............................................................................. 29,730
Trustees' fees and expenses............................................................ 8,194
Other.................................................................................. 29,309
----------
Total expenses................................................................... 11,909,459
-----------
Net investment income.................................................................... 73,293,074
Realized Gain on Investments
Net realized gain from investment transactions....................................................... 28,538
-----------
Net increase in net assets resulting from operations................................................. $73,321,612
==========
</TABLE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
-----------------------------------
AUGUST 31, 1996 AUGUST 31, 1995
--------------- ---------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income.......................................................... $ 73,293,074 $ 56,296,383
Net realized gain (loss) from investment transactions.......................... 28,538 (269,316)
-------------- --------------
Net increase in net assets resulting from operations............................. 73,321,612 56,027,067
Distributions to shareholders from:
Net investment income Class A Shares, ($0.048 and $.05 per share,
respectively)................................................................ (73,291,621) (56,296,383)
Net investment income Class C Shares, ($0.023 per share)....................... (1,453) --
Increase in net assets from Fund share transactions (Note 2)..................... 347,173,878 312,390,427
-------------- --------------
Increase in net assets........................................................... 347,202,416 312,121,111
Net assets, beginning of year.................................................... 1,293,739,721 981,618,610
-------------- --------------
Net assets, end of year.......................................................... $1,640,942,137 $1,293,739,721
============== ==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE> 7
- --------------------------------------------------------------------------------
HERITAGE CASH TRUST -- MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.
<TABLE>
<CAPTION>
CLASS A SHARES CLASS C
FOR THE YEARS ENDED AUGUST 31, SHARES
------------------------------------------------- -------
1996 1995 1994 1993 1992 1996+
------ ------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD..................... $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
------ ------ ------ ------ ------ -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a)(b)........................... .048 .050 .029 .025 .038 .023
LESS DISTRIBUTIONS:
Dividends from net investment income and net realized
gains (a)............................................ (.048) (.050) (.029) (.025) (.038) (.023 )
------ ------ ------ ------ ------ -------
NET ASSET VALUE, END OF PERIOD........................... $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
====== ====== ====== ====== ====== =======
TOTAL RETURN %........................................... 4.89 5.00 2.87 2.48 3.77 2.34 (d)
RATIOS TO AVERAGE DAILY NET ASSETS (%)/SUPPLEMENTAL DATA:
Operating expenses, net (b)............................ .78 .79 .79 .78 .78 .75 (c)
Net investment income (b).............................. 4.78 5.00 2.87 2.47 3.75 4.62 (c)
Net assets, end of period ($ millions)................. 1,641 1,294 982 925 953 --
</TABLE>
- ---------------
+ For the period February 29, 1996 (commencement of Class C Shares) to August
31, 1996.
(a) Includes net realized gains and losses which were less than $.001 per share
for each of the five years ended August 31, 1996, respectively.
(b) Excludes management fees waived by the Manager in the amount of less than
$.001, $.001, $.001 and $.001, per share, for the four years ended August
31, 1995, respectively. The operating expense ratios including such items
would have been .81%, .81%, .81% and .78%, respectively. No management fees
were waived or recovered for the year ended August 31, 1996.
(c) Annualized.
(d) Not annualized.
The accompanying notes are an integral part of the financial statements.
7
<PAGE> 8
- --------------------------------------------------------------------------------
HERITAGE CASH TRUST -- MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Note 1: SIGNIFICANT ACCOUNTING POLICIES. Heritage Cash Trust (the "Trust") is
organized as a Massachusetts business trust and is registered under the
Investment Company Act of 1940, as amended, as a no-load, diversified,
open-end management investment company consisting of two separate
investment portfolios, the Money Market Fund (the "Fund") and the
Municipal Money Market Fund. The Fund is designed for investors who wish
to participate in a portfolio of debt securities with remaining
maturities of not more than 397 days. The Fund offers two classes of
shares, Class A and Class C Shares. Class C Shares may be acquired only
through exchanges of Class C Shares of other Heritage Mutual Funds. The
preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies:
Security Valuation: The Fund uses the amortized cost method of security
valuation (as set forth in Rule 2a-7 under the Investment Company Act of
1940, as amended). The amortized cost of an instrument is determined by
valuing it at cost at the time of purchase and thereafter
accreting/amortizing any purchase discount/premium at a constant rate
until maturity, regardless of the effect of fluctuating interest rates
on the market value of the instrument.
Repurchase Agreements: The Fund enters into repurchase agreements
whereby the Fund, through its custodian, receives delivery of the
underlying securities, the market value of which at the time of purchase
is required to be an amount equal to at least 100% of the resale price.
Federal Income Taxes: The Fund is treated as a single corporate taxpayer
as provided for in The Tax Reform Act of 1986, as amended. The Fund's
policy is to comply with the requirements of the Internal Revenue Code
of 1986, as amended, which are applicable to regulated investment
companies and to distribute substantially all of its taxable income to
its shareholders. Accordingly, no provision has been made for federal
income and excise taxes.
Distribution of Income and Gains: Distributions from net investment
income and net realized gains available for distribution are declared
daily and paid monthly. The Fund uses the identified cost method for
determining realized gain or loss on investment transactions for both
financial and federal income tax reporting purposes.
Expenses: The Fund is charged for those expenses which are directly
attributable to it, such as management fee, custodian/fund accounting
fees, distribution fee, etc., while other expenses such as professional
fees, insurance expense, etc., are allocated proportionately among the
funds. Expenses of the Fund are allocated to each class of shares based
upon their relative percentage of current net assets. All expenses that
are directly attributable to a specific class of shares, such as
distribution fees, are allocated to that class.
State Registration Expenses: State registration fees are amortized based
either on the time period covered by the registration or as related
shares are sold, whichever is appropriate for each state.
Other: Investment transactions are recorded on a trade date basis which
is generally the same as settlement date. Interest income is recorded on
the accrual basis.
Note 2: FUND SHARES. At August 31, 1996, there was an unlimited number of
shares of beneficial interest of no par value authorized. Transactions
in Class A Shares and dollars of the Fund during the years ended August
31, 1996 and 1995, at a constant net asset value of $1.00 per share,
were as follows:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
-------------------------------------
AUGUST 31, 1996 AUGUST 31, 1995
--------------- ---------------
<S> <C> <C>
Shares sold............................................................ 6,431,599,812 4,788,622,703
Shares issued on reinvestment of distributions......................... 66,519,647 55,467,958
Shares redeemed........................................................ (6,151,131,688 ) (4,531,700,234 )
-------------- --------------
Net increase......................................................... 346,987,771 312,390,427
Shares outstanding:
Beginning of year.................................................... 1,294,009,037 981,618,610
-------------- --------------
End of year.......................................................... 1,640,996,808 1,294,009,037
============== ==============
</TABLE>
8
<PAGE> 9
- --------------------------------------------------------------------------------
HERITAGE CASH TRUST -- MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
- --------------------------------------------------------------------------------
Transactions in Class C Shares and dollars of the Fund which commenced
operations on February 29, 1996, at a constant net asset value of $1.00
per share, were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
ENDED AUGUST
31, 1996
---------------
<S> <C>
Shares sold........................................................ 458,920
Shares issued on reinvestment of distributions..................... 660
Shares redeemed.................................................... (273,473)
---------------
Net increase..................................................... 186,107
Shares outstanding:
Beginning of period.............................................. --
---------------
End of period.................................................... 186,107
==============
</TABLE>
Note 3: PURCHASES, SALES AND MATURITIES OF SECURITIES. For the year ended
August 31, 1996, purchases and maturities of short-term investment
securities, excluding repurchase agreements, aggregated $12,859,689,348
and $12,654,994,000, respectively. Purchases, sales and maturities of
U.S. Government obligations aggregated $566,537,260, $95,652,099 and
$381,500,000, respectively.
Note 4: MANAGEMENT, DISTRIBUTION, SHAREHOLDER SERVICING AGENT AND TRUSTEES'
FEES. Under the Fund's Investment Advisory and Administration Agreement
with Heritage Asset Management, Inc. (the "Manager"), the Fund agrees to
pay to the Manager for investment advice, portfolio management services
(including the placement of brokerage orders), and certain compliance
and administrative services a fee equal to an annual rate of 0.50% of
the first $500,000,000 of the Fund's average daily net assets, 0.475% of
the next $500,000,000, 0.45% of the next $500,000,000, 0.425% of the
next $500,000,000, and 0.40% of any excess over $2,000,000,000 of such
net assets, computed daily and payable monthly. The amount payable to
the Manager as of August 31, 1996 was $658,535. The agreement also
provides for a reduction in such fees in any year to the extent that
operating expenses of the Fund exceed applicable state expense
limitations. For the period January 2, 1992 to December 31, 1992, the
Manager voluntarily agreed to waive its fees and, if necessary,
reimburse the Fund to the extent that the Fund's annual operating
expenses exceeded .77%, on an annual basis, of the Fund's average daily
net assets. Effective January 1, 1993, this voluntary expense limitation
was changed to .79%, on an annual basis, of the Fund's average daily net
assets. Under these arrangements, management fees of $244,972 were
waived during the year ended August 31, 1995. If total Fund expenses
fall below the expense limitation agreed to by the Manager before the
end of the year ending August 31, 1997, the Fund may be required to pay
the Manager a portion or all of the waived management fee.
The Manager is also the Dividend Paying and Shareholder Servicing Agent
for the Fund. The amount payable to the Manager for such expenses as of
August 31, 1996 was $302,000. In addition, the Manager performs Fund
Accounting services for the Fund and charged $40,168 during the year of
which $6,600 was payable as of August 31, 1996.
Pursuant to a plan adopted in accordance with Rule 12b-1 of the
Investment Company Act of 1940, as amended, the Fund pays Raymond James
& Associates, Inc. (the "Distributor") a fee equal to 0.15% of average
daily net assets for the services it provides in connection with the
promotion and distribution of Class A and Class C Fund shares. Such fee
is accrued daily and payable monthly. The amount payable to the
Distributor as of August 31, 1996 was $210,004. The Manager,
Distributor, Fund Accountant and Shareholder Servicing Agent are all
wholly-owned subsidiaries of Raymond James Financial, Inc.
Trustees of the Trust also serve as Trustees for Heritage Capital
Appreciation Trust, Heritage Income-Growth Trust, Heritage Income Trust,
Heritage Series Trust and Heritage U.S. Government Income Fund,
investment companies that are also advised by the Manager or its
affiliates (collectively referred to as the Heritage Mutual Funds). Each
Trustee of the Heritage Mutual Funds who is not an interested person of
the Manager receives an annual fee of $8,000 and an additional fee of
$2,000 for each combined quarterly meeting of the Heritage Mutual Funds
attended. Trustees' fees and expenses are shared equally by each of the
Heritage Mutual Funds.
Note 5: FEDERAL INCOME TAXES. As of August 31, 1996, the Fund has net tax basis
capital loss carryforwards of $9,682, $6,037 and $235,118 which may be
applied to any net taxable gains until their expiration dates in 2002,
2003 and 2004, respectively.
9
<PAGE> 10
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
Heritage Cash Trust-Money Market Fund
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Heritage Cash Trust-Money Market Fund (the "Fund") at August 31, 1996, and the
results of its operations, the changes in its net assets and the financial
highlights for the year then ended, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audit. We conducted our audit of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit, which included
confirmation of securities at August 31, 1996 by correspondence with the
custodian, provides a reasonable basis for the opinion expressed above. The
financial statements of the Fund for the year ended August 31, 1995, including
the financial highlights for each of the periods indicated, were audited by
other independent accountants whose report dated October 12, 1995 expressed an
unqualified opinion on those statements.
Price Waterhouse LLP
- --------------------
PRICE WATERHOUSE LLP
Tampa, Florida
October 11, 1996
10
<PAGE> 11
HERITAGE CASH TRUST-MONEY MARKET FUND is a member of the Heritage family of
mutual funds. Other investment alternatives available to you from Heritage
include:
---HERITAGE CASH TRUST
MUNICIPAL MONEY MARKET FUND
---HERITAGE CAPITAL APPRECIATION TRUST
---HERITAGE INCOME-GROWTH TRUST
---HERITAGE INCOME TRUST
HIGH YIELD BOND FUND
INTERMEDIATE GOVERNMENT FUND
---HERITAGE SERIES TRUST
EAGLE INTERNATIONAL EQUITY PORTFOLIO
GROWTH EQUITY FUND
SMALL CAP STOCK FUND
VALUE EQUITY FUND
---HERITAGE U.S. GOVERNMENT INCOME FUND
(A CLOSED-END FUND THAT TRADES ON THE
NEW YORK STOCK EXCHANGE)
We are pleased that many of you are also investors in these funds. For
information and a prospectus for any of these mutual funds, please contact your
account executive. Please read the Prospectus carefully before you invest in any
of the funds.
<PAGE> 12
Heritage Cash Trust-Money Market Fund
P.O. Box 33022
St. Petersburg, FL 33733
--------------------------------------------
Address Change Requested
This report is for the information of shareholders of
Heritage Cash Trust-Money Market Fund, It may also be used as
sales literature when preceded or accompanied by a prospectus.
130M 10/96 (RECYCLE LOGO) Printed on recycled paper
(LOGO) HERITAGE CASH TRUST (TM)
MONEY MARKET FUND
A money market fund
seeking high current income
consistent with liquidity
and preservation of capital
ANNUAL REPORT
and Investment Performance
Review for the Year Ended
AUGUST 31, 1996
A member of the
Heritage Family of Mutual Funds(TM)
