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HERITAGE INCOME TRUST
HIGH YIELD BOND FUND
Supplement dated July 8, 1996 to the
Prospectus dated February 1, 1996
The sixth sentence of the first full paragraph on page 5 of the
prospectus is replaced with the following:
Up to 10% of the Fund's net assets may be invested in
illiquid securities.
In addition, the following disclosure is included after the
section titled "Repurchase Agreements" on page 9:
RESTRICTED AND ILLIQUID SECURITIES. The Fund
will not purchase or otherwise acquire any security if,
as a result, more than 10% of its net assets would be
invested in securities that are illiquid by virtue of the
absence of a readily available market or due to legal or
contractual restrictions on resale, except as noted
below. As more fully described in the Statement of
Additional Information, the Fund may purchase certain
restricted securities ("Rule 144A securities") for which
there is a secondary market of qualified institutional
buyers as contemplated by Rule 144A under the Securities
Act of 1933, as amended ("1933 Act"). The Board of
Trustees of the Trust ("Board") or the Manager or the
Subadviser, as applicable, may determine these securities
to be liquid pursuant to Board-approved guidelines. The
Fund's investment in Rule 144A securities deemed to be
liquid, when combined with illiquid securities, will not
exceed 25% of the Fund's net assets at the time of
investment. The continued liquidity of Rule 144A
securities depends upon various factors, including the
maintenance of an efficient institutional market in which
such unregistered securities can be readily resold and
the willingness of the issuer to register the securities
under the 1933 Act.
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HERITAGE INCOME TRUST
HIGH YIELD BOND FUND
INTERMEDIATE GOVERNMENT FUND
Supplement dated July 8, 1996 to the
Statement of Additional Information dated February 1, 1996
as supplemented on March 22, 1996
The following disclosure is included at the end of the first
paragraph under "Restricted and Illiquid Securities" on page 15:
This policy does not include certain restricted
securities purchased by High Yield Bond Fund ("High
Yield") for which there is a secondary market of
qualified institutional buyers as contemplated by Rule
144A under the Securities Act of 1933, as amended ("1933
Act"), which the Trust's Board of Trustees ("Board"), or
Heritage Asset Management, Inc. or High Yield's
investment subadviser, Salomon Brothers Asset Management
Inc., as applicable, has deemed liquid pursuant to Board-
approved guidelines.
Restricted securities that are illiquid may be
sold only in privately negotiated transactions or in
public offerings with respect to which a registration
statement is in effect under the 1933 Act. Where
registration is required, a Fund may be obligated to pay
all or part of the registration expenses and a
considerable period may elapse between the time of the
decision to sell and the time a Fund may be permitted to
sell a security under an effective registration
statement. If, during such a period, adverse market
conditions were to develop, the Fund might obtain a less
favorable price than prevailed when it decided to sell.
Rule 144A under the 1933 Act establishes a "safe
harbor" from the registration requirements of the 1933
Act for resales of certain securities to qualified
institutional buyers. Institutional markets for
restricted securities that might develop as a result of
Rule 144A could provide both readily ascertainable values
for restricted securities and the ability to liquidate an
investment to satisfy share redemption orders. An
insufficient number of qualified institutional buyers
interested in purchasing Rule 144A-eligible securities
held by High Yield, however, could affect adversely the
marketability of such portfolio securities and High Yield
might be unable to dispose of such securities promptly or
at reasonable prices.
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