<PAGE> 1
November 11, 1996
Dear Fellow Shareholders:
I am pleased to provide you with the annual report for Heritage
Income-Growth Trust (the "Fund") for the fiscal year ended September 30, 1996.
For this period, the "A" shares and "C" shares of your Fund delivered total
returns of 22.26% and 21.37%, respectively.* These returns compare favorably to
the 20.34% return of the Standard & Poor's 500 Composite Stock Price Index ("S&P
500") over the same period.
In our most recent semiannual report, we pointed out that it should be
considered unusual for your Fund to outperform a broad stock market index such
as the S&P 500 during a period of extremely positive market returns. Your Fund
is designed to participate in the upside of long-term investments in equities
while reducing short-term volatility through the use of various income-oriented
strategies for investing in the stock market. In other words, we try to offer a
smoother ride for our investors. Over our most recent fiscal year, we were able
to outperform the S&P 500 by generally realizing a higher percentage of stock
market gains on up days than our share of the market losses on down days. In the
performance charts that follow we compare our performance to the S&P 500 as well
as the Value Line Index and the Lipper Analytical Services, Inc., averages for
equity income mutual funds. From its inception in December 1986 through February
1990, your Fund invested primarily in convertible securities. Since February
1990, your Fund has been managed as an equity income fund.
In the letter that follows, Lou Kirschbaum, the portfolio manager for your
Fund since February 1990, discusses some of the significant strategies that
materially affected your Fund's performance over the past year. Mr. Kirschbaum
is a senior vice president of Eagle Asset Management, Inc. ("Eagle"), your
Fund's investment subadviser. In September, Michael Chren, who had been
assisting Mr. Kirschbaum in managing your Fund, assumed other duties at Eagle.
Mr. Chren was replaced on the portfolio management team for your Fund by David
Blount, who is a vice president of Eagle and has worked closely with Mr.
Kirschbaum for several years in servicing other accounts.
If there are ever any ways in which you believe we could serve you better,
please call us at 800-709-3863. On behalf of all of us at Heritage, thank you
for your continuing investment in Heritage Income-Growth Trust.
Sincerely,
/s/ STEPHEN G. HILL
Stephen G. Hill
President
- ---------------
* Calculated without the imposition of front-end or contingent deferred sales
charges.
<PAGE> 2
November 11, 1996
Dear Fellow Shareholders:
The financial markets have been turbulent for many of the past 12 months,
but the course has generally been up. Corrections have been frequent in number
but shallow and short-lived, despite the backup in long-term interest rates that
began early in 1996. There has been relatively little consistency in the groups
of stocks that have led the market higher, which has created a good backdrop for
effective stock selection.
Your Fund has performed well in this environment, compared both to its peer
group and the market in general. The important contributors to performance over
the past year were a diverse lot, ranging from large capitalization growth
stocks (Abbot Labs, Pfizer, and Associates First) to smaller capitalization
issues, through which we participate via income-producing convertible securities
(US Diagnostic Labs, Callon Petroleum, Prime Hospitality, for example).
Financial services stocks, most notably regional banks, were among the more
consistent performers in the Fund's portfolio last year.
Real estate investment trusts -- REITs, for short -- were a good source of
both income and capital appreciation in the latest fiscal year. This group
represents the largest single industry exposure in the Fund's portfolio. REITs
have not only produced good returns, they have also provided an important buffer
on the market's down days, since they tend to hold up better than the average
stock in declining markets.
In last year's letter, I supported my sanguine view of the market with the
expectation that economic growth would be moderate (it was), inflation would be
mild (ditto), interest rates would remain low, and corporate profits in general
would continue to rise. I was half-right on interest rates: short-term rates
remained low, while long-term rates gyrated higher than I expected. It was the
latter that was mostly responsible for the market's volatility, especially in
the first six months of calendar 1996.
Looking into 1997, the economic picture appears quite similar to a year
ago. On this basis alone, I would conclude that next year ought to be a good one
for stocks. I'll qualify my opinion, though, with the observation that
developments on the political front might outweigh fundamental economic issues
for a while. This is often the case the first year following a Presidential
election. Political developments aside, I believe the stock market should
produce further gains in the year to come, and I will attempt to take maximum
advantage of the opportunities available, within the context of your Fund's
stated policies.
As always, I appreciate your continued confidence and support.
Sincerely,
/s/ LOU KIRSCHBAUM
Lou Kirschbaum
Senior Vice President
Eagle Asset Management, Inc.
2
<PAGE> 3
CHART
<TABLE>
<CAPTION>
_____ - - . . . .
HIGT S&P 500 Value Line
<S> <C> <C> <C>
9525 10000 10000
9525 9845 9877
10177 11948 11727
"1987" 9941 12548 11758
10171 13376 12232
8322 10362 8748
9001 10953 9987
"1988" 9566 11680 10508
9828 11718 10274
10018 12080 10186
10544 12935 10759
"1989" 11257 14076 11376
11675 15584 12050
11377 15906 11329
10715 15428 10676
"1990" 10994 16397 10768
9758 14143 8306
10123 15412 8580
11498 17651 10398
"1991" 11717 17610 10260
12560 18553 10602
13555 20108 10915
13503 19600 11262
"1992" 13588 19973 10784
14246 20602 10807
15142 21638 11674
15741 22584 12258
"1993" 15771 22693 12182
16588 23279 12598
16826 23819 12927
16399 22916 12470
"1994" 16390 23012 12034
16887 24135 12604
16677 24130 12150
17754 26481 12784
"1995" 18707 29007 13619
20192 31313 14491
21327 33198 14492
22822 34981 15101
"1991" 24019 36551 15508
24687 37684 15597
</TABLE>
CHART
<TABLE>
<CAPTION>
____ - - - - - . . . . . .
HIGT S&P 500 Lipper Value Line
<S> <C> <C> <C> <C>
"Feb 90" 10000 10000 10000 10000
10145 10397 10184 10274
10409 11050 10461 10362
"1990" 9239 9531 9259 7994
9585 10386 9893 8257
10886 11895 11023 10007
11094 11868 11095 9873
"1991" 11893 12503 11814 10202
12835 13551 12488 10504
12785 13209 12466 10838
12866 13460 12745 10378
"1992" 13489 13884 13102 10400
14337 14582 13688 11235
14904 15219 14524 11797
14933 15293 14713 11723
"1993" 15706 15688 15362 12124
15931 16052 15567 12441
15528 15443 14984 12000
15518 15508 14988 11581
"1994" 15989 16265 15573 12129
15791 16262 15174 11693
16811 17846 16295 12303
17712 19548 17373 13106
"1995" 19118 21102 18630 13945
20193 22373 19690 13946
21608 23574 20582 14532
22742 24632 21165 14925
"1996" 23375 25396 21728 15010
</TABLE>
THE VALUE INDEX DOES NOT INCLUDE REINVESTMENT OF DIVIDENDS.
*ANNUAL RETURNS FOR HIGT ARE CALCULATED IN CONFORMANCE WITH ITEM 22 OF FORM
N-1A, WHICH ASSUMES THE MAXIMUM SALES LOAD OF 4.75% AND REINVESTMENT OF
DIVIDENDS.
**RETURN FOR HIGT CLASS "A" SHARES DOES NOT REFLECT THE IMPOSITION OF FRONT-END
SALES LOAD.
3
<PAGE> 4
CHART
<TABLE>
<CAPTION>
____ - - - - - . . . . . .
HIGT S&P 500 Lipper Value Line
<S> <C> <C> <C> <C>
4/30/95 10000 10000 10000 10000
6/30/95 10500 10954 10661 10653
9/30/95 11318 11825 11433 11335
12/31/95 11944 12537 12083 11336
3/31/96 12746 13210 12631 11812
6/30/96 13399 13803 12988 12131
9/30/96 13736 14231 13334 12200
</TABLE>
THE VALUE LINE INDEX DOES NOT INCLUDE REINVESTMENT OF DIVIDENDS.
*ANNUAL TOTAL RETURNS FOR HIGT CLASS "C" SHARES ARE CALCULATED IN CONFORMANCE
WITH ITEM 22 OF FORM N-1A, WHICH ASSUMES THE REINVESTMENT OF DIVIDENDS AND A
CONTINGENT DEFERRED SALES LOAD (CDSL) OF 1% ON REDEMPTIONS MADE WITHIN 12
MONTHS OF PURCHASE.
4
<PAGE> 5
- --------------------------------------------------------------------------------
HERITAGE INCOME-GROWTH TRUST
INVESTMENT PORTFOLIO
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
-----------
<C> <S> <C>
COMMON STOCKS--55.3%(A)
- ------------------------
ADVERTISING/COMMUNICATIONS--1.9%
------------------------------
20,000 Omnicom Group, Inc................................................................. $ 935,000
-----------
AUTO/TRUCK MANUFACTURERS--0.6%
-----------------------------
9,796 Ford Motor Company................................................................. 306,125
-----------
BANKING--5.8%
-------------
2,000 BankAmerica Corporation............................................................ 164,250
4,000 Bankers Trust New York Corporation(c).............................................. 314,500
4,000 Chase Manhattan Corporation(c)..................................................... 320,500
12,000 GreenPoint Financial Corporation................................................... 457,500
6,000 Jefferson-Pilot Corporation, ACES, 7.25%........................................... 505,500
6,000 Mellon Bank Corporation............................................................ 355,500
6,000 National City Corporation(c)....................................................... 252,750
2,000 NationsBank Corporation(c)......................................................... 173,750
6,000 Norwest Corporation(c)............................................................. 245,250
-----------
2,789,500
-----------
CONGLOMERATES/DIVERSIFIED--2.1%
----------------------------
15,000 Chemed Corporation................................................................. 570,000
7,000 Harsco Corporation................................................................. 441,000
-----------
1,011,000
-----------
DATA PROCESSING--2.5%
--------------------
8,000 Automatic Data Processing, Inc..................................................... 349,000
14,078 Electronic Data Systems Corporation(c)............................................. 864,037
-----------
1,213,037
-----------
ELECTRONICS/ELECTRIC--1.9%
-----------------------
10,000 General Electric Company........................................................... 910,000
-----------
FINANCE--4.2%
------------
10,000 American Express Company(c)........................................................ 462,500
18,000 Associates First Capital Corporation............................................... 738,000
10,000 Federal National Mortgage Association.............................................. 348,750
10,204 Travelers Group, Inc.(c)........................................................... 501,272
-----------
2,050,522
-----------
HEALTH CARE CENTERS--0.3%
-----------------------
10,000 U.S. Diagnostic, Inc.*............................................................. 127,500
-----------
HOTELS/MOTELS/INNS--0.8%
-----------------------
7,500 Marriott International, Inc........................................................ 413,437
-----------
HOUSEHOLD PRODUCTS--0.8%
-----------------------
4,000 Procter & Gamble Company(c)........................................................ 390,000
-----------
INSURANCE--1.0%
--------------
5,000 Marsh & McLennan Companies, Inc.................................................... 485,625
-----------
LAND DEVELOPMENT/REAL ESTATE--0.5%
---------------------------------
9,411 The Rouse Company.................................................................. 244,685
-----------
LEISURE/AMUSEMENT--0.4%
-----------------------
2,500 Eastman Kodak Company(c)........................................................... 196,250
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE> 6
- --------------------------------------------------------------------------------
HERITAGE INCOME-GROWTH TRUST
INVESTMENT PORTFOLIO
SEPTEMBER 30, 1996
(CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
-----------
<C> <S> <C>
MACHINERY--0.6%
---------------
10,000 Lincoln Electric Company, Class "A"................................................ $ 282,500
-----------
OFFICE EQUIPMENT--1.4%
--------------------
24,000 Wallace Computer Services, Inc.(c)................................................. 678,000
-----------
OIL & GAS--3.7%
--------------
6,000 Amoco Corporation.................................................................. 423,000
5,000 Exxon Corporation.................................................................. 416,250
3,000 Mobil Corporation.................................................................. 347,250
5,000 Petroleum Geo-Services, ADR*(c).................................................... 136,250
6,000 Schlumberger, Ltd.................................................................. 507,000
-----------
1,829,750
-----------
PHARMACEUTICAL--5.1%
-------------------
7,500 Abbott Laboratories................................................................ 369,375
6,000 Merck & Company, Inc.(c)........................................................... 422,250
6,500 Pfizer, Inc........................................................................ 514,313
5,000 Schering-Plough Corporation........................................................ 307,500
6,000 SmithKline Beecham, PLC, ADR(c).................................................... 365,250
8,000 Warner-Lambert Company(c).......................................................... 528,000
-----------
2,506,688
-----------
POLLUTION CONTROL--1.2%
---------------------
13,950 Thermo Electron Corporation*(c).................................................... 564,975
-----------
PUBLISHING--2.1%
---------------
8,000 McGraw-Hill Companies, Inc......................................................... 341,000
10,000 Reuters Holdings, PLC, ADR(c)...................................................... 692,500
-----------
1,033,500
-----------
REAL ESTATE INVESTMENT TRUST--8.0%
-------------------------------
16,000 Alexander Haagen Properties, Inc................................................... 224,000
12,000 Allied Capital Commercial Corporation.............................................. 262,500
10,000 Bay Apartment Communities, Inc..................................................... 285,000
12,000 Cali Realty Corporation............................................................ 325,500
10,000 Duke Realty Investments, Inc....................................................... 326,250
12,000 Health Care Property Investors, Inc................................................ 391,500
10,000 Manufactured Home Communities, Inc................................................. 192,500
23,958 Security Capital Industrial Trust.................................................. 437,234
10,000 Sovran Self Storage, Inc........................................................... 262,500
10,000 Starwood Lodging Trust............................................................. 418,750
12,500 Storage Trust Realty............................................................... 271,875
18,200 Sun Communities, Inc............................................................... 518,700
-----------
3,916,309
-----------
RETAIL STORES--0.9%
-----------------
25,000 Intimate Brands, Inc.(c)........................................................... 456,250
-----------
STEEL/IRON--0.7%
---------------
10,000 Carpenter Technology Corporation................................................... 350,000
-----------
TELECOMMUNICATIONS--2.5%
-----------------------
16,000 ALLTEL Corporation................................................................. 446,000
15,000 Frontier Corporation............................................................... 399,375
10,000 GTE Corporation.................................................................... 385,000
-----------
1,230,375
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE> 7
- --------------------------------------------------------------------------------
HERITAGE INCOME-GROWTH TRUST
INVESTMENT PORTFOLIO
SEPTEMBER 30, 1996
(CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
-----------
<C> <S> <C>
TOBACCO--0.9%
-------------
5,000 Philip Morris Companies, Inc.(c)................................................... $ 448,750
-----------
UTILITIES-ELECTRIC--2.8%
--------------------
10,000 FPL Group, Inc..................................................................... 432,500
25,000 MidAmerican Energy Company......................................................... 396,875
15,000 NIPSCO Industries, Inc............................................................. 536,250
-----------
1,365,625
-----------
UTILITIES-GAS--1.9%
-----------------
25,000 UGI Corporation.................................................................... 587,500
10,000 Wicor, Inc......................................................................... 363,750
-----------
951,250
-----------
UTILITIES-WATER--0.7%
-------------------
16,000 American Water Works Company, Inc.................................................. 346,000
-----------
Total common stocks (cost $20,594,390)................................................................. 27,032,653
-----------
CONVERTIBLE PREFERRED STOCKS--13.2%(A)
- ----------------------------------
BROADCASTING--0.8%
-----------------
40,000 Triathlon Broadcasting Company, Series "A", 9.0%................................... 410,000
-----------
FILMED ENTERTAINMENT--0.9%
------------------------
15,000 AMC Entertainment, Inc., Series "B", $1.75......................................... 450,000
-----------
FOOD SERVING--1.1%
-----------------
10,000 Wendy's Financing, Series "A", 5.0%................................................ 515,000
-----------
GLASS/PRODUCTS--1.8%
-------------------
10,000 Corning, Inc. Series "M", 6.0%, MIPS............................................... 565,000
6,000 Owens Corning, 6.5%, MIPS.......................................................... 312,000
-----------
877,000
-----------
MANUFACTURING/DISTRIBUTIONS--0.6%
-------------------------------
13,000 Cooper Industries, Inc., 6.0%, DECS................................................ 266,500
-----------
MINING/DIVERSIFIED--1.1%
----------------------
20,000 Freeport-McMoran Copper & Gold Mine, Inc., Series "A", 7.0%........................ 555,000
-----------
OIL & GAS--1.3%
--------------
10,000 Callon Petroleum Company, $2.125................................................... 340,000
8,000 Noble Drilling Corporation, $1.50.................................................. 293,000
-----------
633,000
-----------
PUBLISHING--0.6%
---------------
5,000 Golden Books Financial Trust, 8.75%................................................ 281,250
-----------
REAL ESTATE INVESTMENT TRUST--0.5%
-------------------------------
10,000 Felcor Suite Hotels, Inc., Series "A", $1.95....................................... 260,000
-----------
RETAIL STORES--0.8%
-----------------
8,000 Kmart Financing Corporation, 7.75%................................................. 391,000
-----------
SERVICES--2.3%
------------
11,100 Service Corporation International, Series "A", $3.125.............................. 1,137,750
-----------
UTILITIES-GAS--1.4%
-----------------
8,200 Williams Companies, Inc., $3.50.................................................... 672,400
-----------
Total convertible preferred stock (cost $5,844,283).................................................... 6,448,900
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE> 8
- --------------------------------------------------------------------------------
HERITAGE INCOME-GROWTH TRUST
INVESTMENT PORTFOLIO
SEPTEMBER 30, 1996
(CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MATURITY MARKET
AMOUNT DATE VALUE
-------- -----------
<C> <S> <C> <C>
CONVERTIBLE BONDS--18.0%(A)
- -------------------------
AIR TRANSPORT--1.0%
-----------------
$500,000 Air Wisconsin Services, 7.75%.............................................. 06/15/10 $ 473,225
-----------
AUTO PARTS/EQUIPMENT--1.1%
-------------------------
500,000 Magna International, Inc., 5.0%............................................ 10/15/02 533,995
-----------
BANKING--1.1%
-------------
500,000 BankAtlantic Bancorp, Inc., 6.75%.......................................... 07/01/06 531,250
-----------
CONGLOMERATES/DIVERSIFIED--1.2%
----------------------------
500,000 Thermo Electron Corporation, 4.25%......................................... 01/01/03 606,585
-----------
DATA PROCESSING--1.6%
--------------------
400,000 First Financial Management Corporation, 5.0%............................... 12/15/99 769,280
-----------
ELECTRONICS/ELECTRIC--0.7%
-----------------------
350,000 Richey Electronics, Inc., 7.0%............................................. 03/01/06 325,500
-----------
FOOD SERVING--0.3%
-----------------
200,000 TPI Enterprises, Inc., 8.25%............................................... 07/15/02 170,000
-----------
HEALTH CARE CENTERS--2.6%
-----------------------
350,000 Complete Management, Inc., 8.0%............................................ 08/15/03 423,500
300,000 Healthsource, Inc., 5.0%................................................... 03/01/03 236,103
300,000 Tenet Healthcare Corporation, 6.0%......................................... 12/01/05 318,006
200,000 U.S. Diagnostic, Inc., 9.0%................................................ 03/31/03 317,250
-----------
1,294,859
-----------
LAND DEVELOPMENT/REAL ESTATE--0.4%
---------------------------------
200,000 The Rouse Company, 5.75%................................................... 07/23/02 202,000
-----------
MANUFACTURING/DISTRIBUTIONS--1.3%
-------------------------------
300,000 Cooper Industries, Inc. 7.05%.............................................. 01/01/15 329,196
300,000 Thermo Terratech, Inc., 4.625%............................................. 05/01/03 288,000
-----------
617,196
-----------
METAL--0.4%
-----------
250,000 Phoenix Shannon, PLC, 9.5%................................................. 11/01/00 192,813
-----------
OFFICE EQUIPMENT--0.6%
--------------------
300,000 U.S. Office Products Company, 5.5%......................................... 05/15/03 282,000
-----------
OIL & GAS--0.7%
---------------
250,000 Pride Petro Services, 6.25%................................................ 02/15/06 330,000
-----------
PHARMACEUTICAL--1.1%
---------------------
200,000 ICN Pharmaceuticals, Inc., 8.5%............................................ 11/15/99 223,372
300,000 NABI, Inc., 6.50%.......................................................... 02/01/03 323,055
-----------
546,427
-----------
REAL ESTATE INVESTMENT TRUST--1.5%
---------------------------------
250,000 Alexander Haagen Properties, Inc., 7.5%.................................... 01/15/01 227,812
300,000 Developers Diversified Realty Corporation, 7.0%............................ 08/15/99 301,500
200,000 LTC Properties, Inc., 7.75%................................................ 01/01/02 198,000
-----------
727,313
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE> 9
- --------------------------------------------------------------------------------
HERITAGE INCOME-GROWTH TRUST
INVESTMENT PORTFOLIO
SEPTEMBER 30, 1996
(CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MATURITY MARKET
AMOUNT DATE VALUE
RETAIL STORES--1.8% -------- -----------
------------------
<C> <S> <C> <C>
$100,000 Home Depot, Inc., 3.25%.................................................... 10/01/01 $ 101,624
750,000 Pier 1 Imports, Inc., 5.75%................................................ 10/01/03 806,250
-----------
907,874
-----------
TELECOMMUNICATIONS--0.6%
-------------------------
250,000 MIDCOM Communications, Inc., 8.25%......................................... 08/15/03 285,860
-----------
Total convertible bonds (cost $8,146,437)..................................................... 8,796,177
-----------
Total investment portfolio excluding repurchase agreement and covered call options written
(cost $34,585,110)............................................................................ 42,277,730
-----------
REPURCHASE AGREEMENT--14.8%(A)
- -----------------------------
Repurchase Agreement with State Street Bank and Trust Company, dated September 30, 1996, @
5.35%, to be repurchased at $7,221,073 on October 1, 1996, collateralized by $7,236,775 United
States Treasury Notes, 5.375%, due November 30, 1997, (market value $7,368,277 including
interest) (cost $7,220,000)................................................................... 7,220,000
-----------
TOTAL INVESTMENT PORTFOLIO (COST $41,805,110)(B), 101.3%(A)................................... $49,497,730
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
<C> <S> <C> <C>
COVERED CALL OPTIONS WRITTEN--(0.6%)(A)
- ------------------------------------
American Express Company
5,000 January 1997 @ 45*........................................................... (17,500)
Bankers Trust New York Corporation
2,000 January 1997 @ 75*........................................................... (12,750)
Chase Manhattan Corporation
2,000 December 1996 @ 75*.......................................................... (14,500)
Eastman Kodak Company
1,500 October 1996 @ 80*........................................................... (1,875)
Electronic Data Systems Corporation
6,000 December 1996 @ 55*.......................................................... (45,000)
Intimate Brands, Inc.
4,000 January 1997 @ 22.5*......................................................... (1,750)
4,000 October 1996 @ 20*........................................................... (750)
4,000 October 1996 @ 22.5*......................................................... (500)
Merck & Company, Inc.
3,000 October 1996 @ 70*........................................................... (4,500)
National City Corporation
3,000 January 1997 @ 35*........................................................... (22,500)
NationsBank Corporation
2,000 November 1996 @ 90*.......................................................... (3,125)
Norwest Corporation
3,000 January 1997 @ 35*........................................................... (20,250)
Petroleum Geo-Services, ADR
3,000 November 1996 @ 35*.......................................................... (938)
Philip Morris Cos., Inc.
2,500 December 1996 @ 95*.......................................................... (5,625)
Procter & Gamble Company
3,000 October 1996 @ 90*........................................................... (22,875)
Reuters Holdings, PLC, ADR
3,000 November 1996 @ 70*.......................................................... (6,375)
3,000 October 1996 @ 70*........................................................... (3,375)
2,000 October 1996 @ 75*........................................................... (500)
SmithKline Beecham, PLC, ADR
4,000 November 1996 @ 55*.......................................................... (28,000)
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE> 10
- --------------------------------------------------------------------------------
HERITAGE INCOME-GROWTH TRUST
INVESTMENT PORTFOLIO
SEPTEMBER 30, 1996
(CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
-----------
<C> <S> <C> <C>
Thermo Electron Corporation
7,000 December 1996 @ 40*.......................................................... $ (17,062)
Travelers Group Inc.
2,500 December 1996 @ 45*.......................................................... (13,438)
2,500 December 1996 @ 47.5*........................................................ (9,375)
Wallace Computer Services, Inc.
8,000 December 1996 @ 30*.......................................................... (8,500)
Warner-Lambert Company
4,000 October 1996 @ 55*........................................................... (45,500)
-----------
TOTAL COVERED OPTIONS WRITTEN (PREMIUMS RECEIVED $227,669).................................... (306,563)
-----------
OTHER ASSETS AND LIABILITIES (0.7%)(A)........................................................ (289,432)
-----------
NET ASSETS 100.0%............................................................................. $48,901,735
==========
</TABLE>
- ---------------
* Non-income producing security.
(a) Percentages indicated are based on net assets.
(b) The aggregate identified cost for federal income tax purposes is the same.
Market value includes net unrealized appreciation of $7,692,620, which
consists of aggregate gross unrealized appreciation for all securities in
which there is an excess of market value over tax cost of $8,015,877 and
aggregate gross unrealized depreciation for all securities in which there
is an excess of tax cost over market value of $323,257.
(c) A portion of these shares were held by the custodian in connection with
covered call options written.
ACES -- Adjustable Convertible Extendable Securities
ADR -- American Depository Receipt
DECS -- Debt Exchangeable for Common Stock
MIPS -- Monthly Income Preferred Stock
The accompanying notes are an integral part of the financial statements.
10
<PAGE> 11
- --------------------------------------------------------------------------------
HERITAGE INCOME-GROWTH TRUST
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets
- -----
Investments, at market value (identified cost $34,585,110) (Note 1)...................... $42,277,730
Repurchase agreement (identified cost $7,220,000) (Note 1)............................... 7,220,000
Cash..................................................................................... 2,352
Receivables:
Investments sold....................................................................... 607,542
Fund shares sold....................................................................... 761,241
Dividends and interest................................................................. 199,511
Deferred state registration expenses (Note 1)............................................ 8,262
Prepaid insurance........................................................................ 2,329
-----------
Total assets..................................................................... 51,078,967
Liabilities
- --------
Payables (Note 4):
Investments purchased.................................................................. $1,593,740
Fund shares redeemed................................................................... 165,397
Accrued management fee................................................................. 28,683
Accrued distribution fee............................................................... 12,463
Other accrued expenses................................................................. 70,386
Covered call options written, at market value (premiums received $227,669) (Notes 1 and
3)..................................................................................... 306,563
----------
Total liabilities................................................................ 2,177,232
-----------
Net assets, at market value.............................................................. $48,901,735
==========
Net Assets
- ---------
Net assets consist of:
Paid-in capital (Note 1)............................................................... $36,311,197
Undistributed net investment income (Note 1)........................................... 253,608
Accumulated net realized gain (Note 1)................................................. 4,049,335
Accumulated net realized gain on covered call options written.......................... 673,869
Net unrealized appreciation on investments............................................. 7,692,620
Net unrealized depreciation on covered call options written............................ (78,894)
-----------
Net assets, at market value.............................................................. $48,901,735
==========
Class A Shares
- -------------
Net asset value and redemption price per share ($43,060,237 divided by 2,935,332 shares
of beneficial interest outstanding, no par value) (Notes 1 and 2)...................... $14.67
=====
Maximum offering price per share (100/95.25 of $14.67)................................... $15.40
=====
Class C Shares
- ------------
Net asset value, offering price and redemption price per share ($5,841,498 divided by
400,895 shares of beneficial interest outstanding, no par value) (Notes 1 and 2)....... $14.57
=====
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE> 12
- --------------------------------------------------------------------------------
HERITAGE INCOME-GROWTH TRUST
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment Income
Income:
Dividends................................................................................. $1,008,562
Interest.................................................................................. 628,893
----------
Total income........................................................................ 1,637,455
Expenses (Notes 1 and 4):
Management fee............................................................................ $293,974
Distribution fee (Class A Shares)......................................................... 94,590
Distribution fee (Class C Shares)......................................................... 13,604
Professional fees......................................................................... 54,902
Custodian/Fund accounting fees............................................................ 48,617
Amortization of state registration expenses............................................... 27,207
Shareholder servicing fees................................................................ 25,867
Reports to shareholders................................................................... 24,238
Trustees' fees and expenses............................................................... 6,647
Insurance................................................................................. 5,522
Other..................................................................................... 6,022
--------
Total expenses...................................................................... 601,190
----------
Net investment income....................................................................... 1,036,265
----------
Realized and Unrealized Gain on Investments
Net realized gain from investment transactions.............................................. 4,940,798
Net realized gain from covered call options written (Note 1)................................ 130,417
Net increase in unrealized appreciation of investments during the year...................... 1,783,184
Net decrease in unrealized appreciation of covered call options written during the year..... (83,183)
----------
Net gain on investments............................................................. 6,771,216
----------
Net increase in net assets resulting from operations................................ $7,807,481
=========
</TABLE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
-----------------------------------------
SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
------------------ ------------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income.................................................... $ 1,036,265 $ 964,709
Net realized gain from investment transactions........................... 4,940,798 411,468
Net realized gain from covered call options written...................... 130,417 38,733
Net increase in unrealized appreciation of investments and covered call
options written during the year........................................ 1,700,001 4,404,647
------------------ ------------------
Net increase in net assets resulting from operations..................... 7,807,481 5,819,557
Dividends and distributions to shareholders from:
Net investment income, Class A Shares ($.35 and $.34 per share,
respectively).......................................................... (966,884) (1,157,068)
Net investment income, Class C Shares ($.29 and $.16 per share,
respectively).......................................................... (20,249) (1,164)
Net realized gains, Class A Shares ($.25 and $.49 per share,
respectively).......................................................... (676,674) (1,189,190)
Net realized gains, Class C Shares ($.25 per share)...................... (8,701) --
Increase (decrease) in net assets from Fund share transactions (Note 2).... 8,144,784 (1,459,209)
------------------ ------------------
Increase in net assets..................................................... 14,279,757 2,012,926
Net assets, beginning of year.............................................. 34,621,978 32,609,052
------------------ ------------------
Net assets, end of year (including undistributed net investment income of
$253,608 and $193,122, respectively)..................................... $ 48,901,735 $ 34,621,978
================= =================
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE> 13
- --------------------------------------------------------------------------------
HERITAGE INCOME-GROWTH TRUST
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 C SHARES
FOR THE PERIODS
CLASS A SHARES ENDED SEPTEMBER
FOR THE YEARS ENDED SEPTEMBER 30, 30,
---------------------------------------------- ----------------
1996 1995 1994 1993 1992 1996 1995+
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF THE PERIOD................ $12.56 $11.33 $12.28 $10.81 $ 9.87 $12.51 $11.21
------ ------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income(a).............................. 0.36 0.27 0.30 0.39 0.28 0.26 0.18
Net realized and unrealized gain
(loss) on investments............................... 2.35 1.79 (0.09) 1.44 1.02 2.34 1.28
------ ------ ------ ------ ------ ------ ------
Total from Investment
Operations.......................................... 2.71 2.06 0.21 1.83 1.30 2.60 1.46
------ ------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income.................. (0.35) (0.34) (0.24) (0.36) (0.36) (0.29) (0.16)
Distributions from net realized gain on investments... (0.25) (0.49) (0.92) -- -- (0.25) --
------ ------ ------ ------ ------ ------ ------
Total Distributions................................... (0.60) (0.83) (1.16) (0.36) (0.36) (0.54) (0.16)
------ ------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE PERIOD...................... $14.67 $12.56 $11.33 $12.28 $10.81 $14.57 $12.51
====== ====== ====== ====== ====== ====== ======
TOTAL RETURN (%)(D)..................................... 22.26 19.57 1.80 16.44 13.42 21.37 13.18(c)
RATIOS (%)/SUPPLEMENTAL DATA:
Operating expenses, net, to average daily net
assets(a)........................................... 1.51 1.64 1.64 1.72 1.75 2.13 2.40(b)
Net investment income to average daily net assets..... 2.66 4.63 2.62 2.67 2.77 2.05 4.61(b)
Portfolio turnover rate............................... 75 42 99 130 71 75 42
Average commission rate on portfolio transactions..... $.0595 -- -- -- -- $.0595 --
Net assets, end of the period ($ millions)............ 43 34 33 34 27 6 0.2
</TABLE>
- ---------------
+ For the period April 3, 1995 (commencement of Class C Shares) to August 31,
1995.
(a) Excludes management fees waived by the Manager in the amount of less than
$.01 per Class A Share, for the year ended September 30, 1992. The operating
expense ratio including such items would be 1.75% per Class A Share, for the
year ended September 30, 1992. The year 1993 includes previously waived
management fees paid to the Manager of less than $.01 per share.
(b) Annualized.
(c) Not annualized.
(d) Does not reflect the imposition of a sales charge.
The accompanying notes are an integral part of the financial statements.
13
<PAGE> 14
- --------------------------------------------------------------------------------
HERITAGE INCOME-GROWTH TRUST
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1: SIGNIFICANT ACCOUNTING POLICIES. Heritage Income-Growth Trust (the
"Fund") is organized as a Massachusetts business trust and is registered
under the Investment Company Act of 1940, as amended, as a diversified,
open-end management investment company. The Fund's investment objective
is long-term total return by seeking, with approximately equal emphasis,
current income and capital appreciation. The Fund currently issues Class
A and Class C Shares. Class A Shares are sold subject to a maximum sales
charge of 4.75% of the amount invested payable at the time of purchase.
Class C Shares, which were offered to shareholders beginning April 3,
1995, are sold subject to a contingent deferred sales charge of 1% of
the lower of net asset value or purchase price payable upon any
redemptions within one year after purchase. 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 values investment securities at market
value based on the last quoted sales price as reported by the principal
securities exchange on which the security is traded. If no sale is
reported, market value is based on the last bid and in the absence of a
market quote, securities are valued using such methods as the Board of
Trustees believe would reflect fair market value. Short term investments
having a maturity of 60 days or less are valued at cost, which when
combined with accrued interest included in interest receivable or
discount earned, approximates market.
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'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 of net investment income
are made quarterly. Net realized gains from investment transactions
during any particular year in excess of available capital loss
carryforwards, which, if not distributed, would be taxable to the Fund,
will be distributed to shareholders in the following fiscal year. The
Fund uses the identified cost method for determining realized gain or
loss on investments for both financial and federal income tax reporting
purposes.
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.
Option Accounting Principles: When the Fund writes a covered call
option, an amount equal to the premium received by the Fund is included
in the Fund's Statement of Assets and Liabilities as an asset and as an
equivalent liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option
written. The current market value of a written option is the last
offering price on the principal exchange on which such option is traded.
The Fund receives a premium on the sale of an option, but gives up the
opportunity to profit from any increase in stock value above the
exercise price of the option. If an option which the Fund has written
either expires on its stipulated expiration date, or the Fund enters
into a closing purchase transaction, the Fund realizes a gain (or loss
if the cost of a closing purchase transaction exceeds the premium
received when the option was sold) without regard to any unrealized gain
or loss on the underlying security, and the liability related to such
option is extinguished. If a call option which the Fund has written is
exercised, the Fund realizes a capital gain or loss from the sale of the
underlying security, and the proceeds from such sale are increased by
the premium originally received.
Capital Accounts: Distributions from net investment income and net
realized gains are determined in accordance with federal income tax
regulations, which may differ from generally accepted accounting
principles. To the extent these "book/tax" differences are permanent in
nature (i.e., that they result from other than timing of
recognition -- "temporary"), such accounts are reclassified within the
capital accounts based on their federal tax-basis treatment; temporary
differences do not require reclassification.
Other: Investment security transactions are accounted for on a trade
date plus one basis. Dividend income and distributions to shareholders
are recorded on the ex-dividend date. Interest income is recorded on the
accrual basis. All original issue discounts are accreted for both tax
and financial reporting purposes. Expenses of the Fund are allocated to
each class of shares based upon their relative percentage of current net
assets. Expenses that are directly attributable to a specific class of
shares, such as distribution fees, are allocated to that class.
14
<PAGE> 15
- --------------------------------------------------------------------------------
HERITAGE INCOME-GROWTH TRUST
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
- --------------------------------------------------------------------------------
Note 2: FUND SHARES. At September 30, 1996, there was an unlimited number of
shares of beneficial interest of no par value authorized.
Transactions in Class A Shares of the Fund during the years ended
September 30, 1996 and 1995, were as follows:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
-----------------------------------------------------
SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
------------------------ -------------------------
CLASS A SHARES SHARES AMOUNT SHARES AMOUNT
-------------------------------------------------------- --------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Shares sold............................................. 560,355 $ 7,805,081 164,214 $ 1,854,451
Shares issued on reinvestment of distributions.......... 120,132 1,556,515 208,793 2,247,195
Shares redeemed......................................... (484,726) (6,620,313) (511,309) (5,762,051)
--------- ----------- ---------- -----------
Net increase (decrease)................................. 195,761 $ 2,741,283 (138,302) $(1,660,405)
========== ==========
Shares outstanding:
Beginning of year..................................... 2,739,571 2,877,873
--------- ----------
End of year........................................... 2,935,332 2,739,571
======== =========
</TABLE>
Transactions in Class C Shares of the Fund during the year ended
September 30, 1996 and from April 3, 1995 (commencement of Class C
Shares) to September 30, 1995 were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
APRIL 3, 1995
FOR THE YEAR (COMMENCEMENT OF
ENDED CLASS C SHARES) TO
SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
----------------------- ------------------------
CLASS C SHARES SHARES AMOUNT SHARES AMOUNT
---------------------------------------------------------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Shares sold 397,688 $5,605,737 17,555 $ 202,648
Shares issued on reinvestment of distributions 2,008 26,420 100 1,164
Shares redeemed........................................... (16,234) (228,656) (222) (2,616)
--------- ---------- ---------- ----------
Net increase.............................................. 383,462 $5,403,501 17,433 $ 201,196
========= =========
Shares outstanding:
Beginning of period..................................... 17,433 --
--------- ----------
End of period........................................... 400,895 17,433
======== =========
</TABLE>
Note 3: PURCHASES AND SALES OF SECURITIES. For the year ended September 30,
1996, purchases and sales of investment securities (excluding repurchase
agreements) aggregated $29,876,929 and $26,273,244, respectively. Agency
brokerage commissions for the same period aggregated $61,278, of which
$12,370 was paid to Raymond James & Associates, Inc.
Transactions in covered call options written on equity securities were
as follows:
<TABLE>
<CAPTION>
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- ---------
<S> <C> <C>
Outstanding September 30, 1995.................................................. 115 $ 34,477
Written....................................................................... 1,765 535,641
Closed........................................................................ (720) (215,785)
Exercised..................................................................... (185) (41,589)
Expired....................................................................... (215) (85,075)
Corporate Actions............................................................. 80 --
--- ---------
Outstanding September 30, 1996.................................................. 840 $227,669
=== =========
</TABLE>
Note 4: MANAGEMENT, SUBADVISORY, 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 a fee equal to an annualized rate of 0.75%
of the first $100,000,000 of the Fund's average daily net assets, and
0.60% of any excess over $100,000,000 of such net assets, computed daily
and payable monthly. 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. From October 1, 1995 to
January 31, 1996, the Manager voluntarily agreed to waive its fee to the
extent that Fund operating expenses exceed 1.65% and 2.40% on Class A
Shares and Class C Shares respectively, on an annual basis, of the
Fund's average
15
<PAGE> 16
- --------------------------------------------------------------------------------
HERITAGE INCOME-GROWTH TRUST
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
- --------------------------------------------------------------------------------
daily net assets attributable to each class of shares. Effective
February 1, 1996, the Manager has voluntarily agreed to waive its fee to
the extent that Fund operating expenses exceed 1.60% and 2.35% on Class
A Shares and Class C Shares respectively, on an annual basis, of the
Fund's average daily net assets attributable to each class of shares.
This agreement is more restrictive than any state expense limitation.
Under this agreement, no fees were waived and no expenses were
reimbursed for the year ended September 30, 1996.
The Manager has entered into an agreement with Eagle Asset Management,
Inc. (the "Subadviser") for the Subadviser to provide to the Fund
investment advice, portfolio management services (including the
placement of brokerage orders) and certain compliance and other services
for a fee payable by the Manager equal to 50% of the fees payable by the
Fund to the Manager without regard to any reduction due to the
imposition of expense limitations.
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
September 30, 1996 was $7,800. In addition, the Manager performs Fund
accounting services and charged $31,011 during the current period of
which $7,500 was payable as of September 30, 1996.
Raymond James & Associates, Inc. (the "Distributor") has advised the
Fund that it received $173,493 in front and sales charges and $1,367 in
contingent deferred sales charges for the twelve months ended September
30, 1996. From these fees, the Distributor paid commissions to
salespersons and incurred other distribution costs.
Pursuant to the Class A Distribution Plan adopted in accordance with
Rule 12b-1 of the Investment Company Act of 1940, as amended, the Fund
is authorized to pay Raymond James & Associates, Inc. (the
"Distributor") a fee, equal to .25% of the average daily net assets for
Class A Shares. Under the Class C Distribution Plan the Fund may pay the
Distributor a fee equal to 1.00% of the average daily net assets for
Class C Shares. The Distributor, on Class C Shares, may retain the first
12 months distribution fee for reimbursement of amounts paid to the
broker/dealer at the time of purchase. Such fees are accrued daily and
payable monthly. During the year $94,590 and $13,604 were paid as
distribution fees for Class A Shares and Class C Shares, respectively.
The Manager, Distributor, Fund Accountant and Shareholder Servicing
Agent are all wholly-owned subsidiaries of Raymond James Financial, Inc.
Trustees of the Fund also serve as Trustees for Heritage Cash Trust,
Heritage Capital Appreciation Trust, Heritage Income Trust, Heritage
Series Trust and Heritage U.S. Government Income Fund, investment
companies which are also advised by the Manager of the Fund
(collectively called 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. For the year ended September 30, 1996, to reflect
reclassifications arising from permanent book/tax differences primarily
attributable to market discount, the Fund credited undistributed net
investment income $11,354, and debited paid in capital $8,541 and
accumulated net realized gain $2,813.
16
<PAGE> 17
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
Heritage Income-Growth Trust
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, 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 Income-Growth Trust (the
"Fund") at September 30, 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 September 30, 1996 by
correspondence with the custodian and brokers and the application of alternative
auditing procedures where confirmations from brokers were not received, provide
a reasonable basis for the opinion expressed above. The financial statements of
the Fund for the year ended September 30, 1995, including the financial
highlights for each of the periods indicated, were audited by other independent
accountants whose report dated November 27, 1995 expressed an unqualified
opinion on those statements.
/s/ Price Waterhouse
PRICE WATERHOUSE LLP
Tampa, Florida
November 12, 1996
- --------------------------------------------------------------------------------
1996 FEDERAL INCOME TAX NOTICE
(UNAUDITED)
- --------------------------------------------------------------------------------
During the year ended September 30, 1996, the Fund paid to shareholders
$685,375 or $.25 per share from long-term capital gains. For such period 39% of
the income dividends qualified for the dividend received deduction available to
corporations.
17
<PAGE> 18
(This page intentionally left blank)
<PAGE> 19
HERITAGE INCOME-GROWTH TRUST is a member of the Heritage family of mutual funds.
Other investment alternatives available from Heritage include:
[] HERITAGE CASH TRUST
MONEY MARKET FUND
MUNICIPAL MONEY MARKET FUND
[] HERITAGE CAPITAL APPRECIATION 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> 20
Heritage Income-Growth Trust
P.O. Box 33022
St. Petersburg, FL 33733
--------------------------------------
Address Change Requested
This report is for the information of shareholders of
Heritage Income-Growth Trust. It may also be used as
sales literature when preceded or accompanied by a prospectus.
5M 11/96 (LOGO) Printed on recycled paper
[HERITAGE LOGO]
A MUTUAL FUND SEEKING
LONG-TERM TOTAL RETURN
WITH APPROXIMATELY EQUAL
EMPHASIS ON CURRENT INCOME
AND CAPITAL APPRECIATION
ANNUAL REPORT
and Investment Performance
Review for the Year Ended
SEPTEMBER 30, 1996
A member of the
Heritage Family of Mutual Funds(TM)
