<PAGE> 1
June 19, 1995
Dear Fellow Shareholder:
It is my pleasure to provide you with the semi-annual report for Heritage
Series Trust -- Small Cap Stock Fund for the six-month period ended April 30,
1995. For this period, the "A" shares of your Fund had a total return
(calculated without the imposition of a front-end sales charge) of +5.83% as
compared to the Russell 2000 Index which increased by 5.36%. Your Fund began
offering "C" shares at the beginning of April 1995. For the month of April, the
"C" shares had a total return of +2.68% while the Russell 2000 Index gained
2.22%.
In the letter that follows, Jim Awad of Awad & Associates and Dave Henwood
of the Research department of Raymond James & Associates ("Research") share
their thoughts about the recent investment performance of your Fund, as well as
their outlook for your Fund and stock market going forward. You also should be
aware that the Trustees of your Fund have approved the addition of Eagle Asset
Management, Inc. ("Eagle") as a third subadviser for your Fund. If Eagle is
approved by shareholders, it is our intention to allocate to Eagle the portion
of your Fund currently subadvised by Research. Eagle would, however, continue to
invest the majority of their portion of the Fund in securities rated "Buy 1" by
Research at the time of purchase. The portfolio manager Eagle would assign to
the Fund is Bert L. Boksen who spent 16 years with Raymond James where he served
in various positions including co-director of Research and Chairman of the Focus
List Committee.
Thank you for your continuing investment in the Heritage Small Cap Stock
Fund. On behalf of all of us at Heritage, we look forward to helping to serve
your investment needs for years to come.
Sincerely,
/s/ Stephen G. Hill
Stephen G. Hill
President
<PAGE> 2
June 19, 1995
Dear Shareholders:
Through the first 5 1/2 months of 1995, the markets have benefited from
stable short-term rates, favorable corporate earnings, continuing but slowing
economic growth and a rally in both the bond and equity markets.
The equity results year-to-date showed a 17.5% gain in the S&P 500
Composite Stock Price Index and a 12.2% gain in the Russell 2000 Index through
the close of June 16. Equity markets were paced by strength in larger growth
stocks, a surge in the technology sector, and strength in corporations with
large foreign business components.
Through this period the Heritage Small Cap Stock Fund registered a gain
slightly below that registered by the Russell 2000 Index, a small cap index. The
short fall in performance is largely due to a smaller mix of potentially
volatile high technology holdings in both portions of the Fund relative to other
small cap funds.
With the economy slowing but still indicating some growth into 1996,
inflation low and short-term rates stable, we believe that the major risks to
the market are slowing corporate earnings and unforeseen world events that might
increase profit-taking pressures. In such a setting, we are generally more risk
adverse to cyclicals, stocks with high price/earnings ratios and thinly-traded
investments.
With the market at record levels, we have remained around 85% invested with
the emphasis on quality companies, higher earnings visibility situations and
stocks with daily trading liquidity of 30,000 shares or more. Our current cash
position of 15% may be used to take advantage of any corrections that may be
sudden and short-lived.
Historically, small capitalization stocks have provided annual returns 2-3%
in excess of the returns provided by large cap stocks over long periods of time.
Intuitively, this makes sense, as the return to shareholders in entrepreneurial
companies must be greater than the return to shareholders of mature companies or
we believe there would be no future for a capitalistic society. We believe
that's the long-term reason to own shares in your Fund.
In the intermediate term, we believe small capitalization issues are
attractive because the sector was ignored in the 1980s as investors focused on
large cap takeovers and on computerized trading. Thus, an argument may be made
that in order for small cap stocks to return to their position of historic
higher returns relative to large stocks, they may be poised to outperform large
cap stocks in the intermediate term.
<PAGE> 3
In the short term, this universe of small cap stocks is particularly
attractive because they have lagged the averages in general over recent months.
Investors, feeling that the U.S. may slip into recession due to increasing
interest rates, concentrated on the large multi-country companies that would
benefit from overseas exposure and that would benefit from the weaker dollar. We
believe it has become apparent that, not only is the dollar stronger, but also
that the U.S. economy is better positioned than many foreign economies, so
investors have been returning to small capitalization companies over recent
weeks.
Therefore, we believe the short, intermediate, and long term looks
attractive for your Fund.
<TABLE>
<S> <C>
Sincerely, Sincerely,
/s/ James D. Awad /s/ David A. Henwood
James D. Awad David A. Henwood
President Senior Vice President, Director of Research
Awad & Associates Raymond James & Associates
</TABLE>
<PAGE> 4
- --------------------------------------------------------------------------------
HERITAGE SERIES TRUST-SMALL CAP STOCK FUND
INVESTMENT PORTFOLIO
APRIL 30, 1995
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
VALUE
-----------
<S> <C>
REPURCHASE AGREEMENT--8.4%(A)
Repurchase Agreement with State Street Bank & Trust Company, dated April 28, 1995, @ 5.87%, to be
repurchased at $3,716,817 on May 1, 1995, collateralized by $3,750,000 United States Treasury Notes,
6.875%, due March 31, 1997 (market value $3,825,387) (cost $3,715,000).............................. $ 3,715,000
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
- ------------------
<C> <S> <C>
COMMON STOCKS--87.6%(A)
AEROSPACE--0.9%
10,000 Teleflex, Inc...................................................................... 413,750
-----------
ALUMINUM--0.4%
10,000 IMCO Recycling, Inc.*.............................................................. 157,500
-----------
BANKING--3.3%
3,000 Centerbank......................................................................... 39,000
3,000 Commonwealth Savings Bank.......................................................... 42,750
22,500 First Financial Caribbean Corporation.............................................. 281,250
20,000 FNB Rochester Corporation*......................................................... 122,500
7,000 Home Financial Corporation......................................................... 88,375
7,500 Long Island Bancorp, Inc........................................................... 138,750
20,250 Rochester Community Savings Bank................................................... 377,156
20,298 Summit Bancorporation.............................................................. 390,737
-----------
1,480,518
-----------
CONGLOMERATES--0.2%
1,754 Belding Heminway Company, Inc.*.................................................... 12,278
10,000 Noel Group, Inc.*.................................................................. 71,250
-----------
83,528
-----------
DATA PROCESSING--13.6%
15,000 Byron Preiss Multimedia Company, Inc.*............................................. 97,500
45,000 Comdisco, Inc...................................................................... 1,265,625
141,705 Greentree Software, Inc.*.......................................................... 177,131
52,000 Inter-Tel, Inc.*................................................................... 780,000
5,000 MDL Information Systems, Inc.*..................................................... 64,375
79,500 National Data Corporation.......................................................... 1,480,688
35,750 Printronix, Inc.*.................................................................. 826,719
31,000 Shared Medical Systems Corporation................................................. 1,170,250
15,000 Tech Data Corporation*............................................................. 178,125
-----------
6,040,413
-----------
DRUGS--0.1%
10,000 KV Pharmaceutical Company, Class "A"*.............................................. 65,000
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE> 5
- --------------------------------------------------------------------------------
HERITAGE SERIES TRUST-SMALL CAP STOCK FUND
INVESTMENT PORTFOLIO
APRIL 30, 1995
(UNAUDITED)
(CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ------------------ -----------
<C> <S> <C>
ELECTRICAL & ELECTRONICS--0.7%
10,000 GaSonics International Corporation*................................................ $ 230,000
12,500 Universal Electronics, Inc.*....................................................... 59,375
95,000 Vertex Electronics Corporation*.................................................... 29,688
-----------
319,063
-----------
FINANCE SERVICES--2.3%
32,000 AmeriCredit Corporation*........................................................... 288,000
15,000 AMRESCO, Inc....................................................................... 106,875
30,000 Ideon Group, Inc................................................................... 525,000
10,000 Transmedia Network, Inc............................................................ 121,250
-----------
1,041,125
-----------
FOODS--3.7%
15,000 Apple South, Inc................................................................... 217,500
25,000 D F & R Restaurants, Inc.*......................................................... 356,250
25,000 Morningstar Group, Inc.*........................................................... 200,000
30,000 Outback Steakhouse, Inc.*.......................................................... 757,500
5,694 Sylvan, Inc.*...................................................................... 65,481
10,000 TPI Enterprises, Inc.*............................................................. 62,500
-----------
1,659,231
-----------
HEALTH CARE SERVICES--8.6%
66,000 Advocat, Inc.*..................................................................... 783,750
27,500 Assisted Living Concepts, Inc.*.................................................... 309,375
24,300 Bergen Brunswig Corporation, Class "A"............................................. 577,125
5,000 Genzyme Corporation*............................................................... 213,750
25,000 Horizon Mental Health Management, Inc.............................................. 287,500
30,000 Living Centers of America, Inc.*................................................... 851,250
20,000 Sun Healthcare Group, Inc.*........................................................ 482,500
12,960 Thermolase Corporation*............................................................ 294,840
-----------
3,800,090
-----------
HOME FURNISHINGS--1.3%
10,000 Ethan Allen Interiors, Inc.*....................................................... 187,500
33,500 Falcon Products, Inc............................................................... 385,250
-----------
572,750
-----------
INSURANCE--1.0%
25,000 John Alden Financial Corporation................................................... 453,125
-----------
INVESTMENT ADVISORS--0.3%
15,000 Southwest Securities Group, Inc.................................................... 123,750
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE> 6
- --------------------------------------------------------------------------------
HERITAGE SERIES TRUST-SMALL CAP STOCK FUND
INVESTMENT PORTFOLIO
APRIL 30, 1995
(UNAUDITED)
(CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ------------------ -----------
<C> <S> <C>
LEISURE/AMUSEMENT--7.0%
13,000 Bally Gaming International, Inc.*.................................................. $ 126,750
20,000 Callaway Golf Company.............................................................. 247,500
25,000 Matthews Studio Equipment Group*................................................... 56,250
30,000 Players International, Inc.*....................................................... 888,750
20,000 Royal Caribbean Cruises LTD........................................................ 477,500
30,000 Scientific Games Holdings Corporation*............................................. 727,500
20,000 Showboat, Inc...................................................................... 305,000
52,500 Sports Club Company, Inc.*......................................................... 288,750
-----------
3,118,000
-----------
MACHINERY--1.8%
20,000 Astec Industries, Inc.*............................................................ 222,500
20,000 Insituform Mid-America, Inc. Class "A"............................................. 215,000
20,000 Thermedics, Inc.*.................................................................. 377,500
-----------
815,000
-----------
MANUFACTURING/DISTRIBUTION--10.8%
23,000 Astro-Med, Inc..................................................................... 201,250
20,000 Fisher Scientific International.................................................... 622,500
23,000 Harsco Corporation................................................................. 1,095,375
20,000 JLG Industries, Inc................................................................ 400,000
22,000 Luxottica Group S.P.A. ADR......................................................... 764,500
38,000 Peak Technologies Group, Inc.*..................................................... 750,500
10,000 Sweetwater, Inc.*.................................................................. 57,500
17,850 Thermo Instrument Systems, Inc.*................................................... 417,244
15,000 Thermo Power Corporation*.......................................................... 208,125
25,000 ThermoSpectra Corporation*(c)...................................................... 250,000
-----------
4,766,994
-----------
MEDICAL EQUIPMENT & SUPPLIES--6.3%
100,000 Angeion Corporation*............................................................... 412,500
66,850 Cabot Medical Corporation*......................................................... 476,306
10,000 Cordis Corporation*................................................................ 717,500
15,000 PLC Systems, Inc.*................................................................. 120,938
20,000 Thermo Cardiosystems, Inc.......................................................... 670,000
20,000 Thermotrex Corporation*............................................................ 397,500
-----------
2,794,744
-----------
OFFICE EQUIPMENT--3.8%
8,000 American Business Products, Inc.................................................... 212,000
30,000 Danka Business Systems, Sponsored ADR.............................................. 821,250
20,000 Wallace Computer Services, Inc..................................................... 667,500
-----------
1,700,750
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE> 7
- --------------------------------------------------------------------------------
HERITAGE SERIES TRUST-SMALL CAP STOCK FUND
INVESTMENT PORTFOLIO
APRIL 30, 1995
(UNAUDITED)
(CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ------------------ -----------
<C> <S> <C>
POLLUTION CONTROL--3.7%
40,000 Insituform Technologies, Class "A"*................................................ $ 515,000
25,000 TRC Companies, Inc.*............................................................... 190,625
35,000 U.S. Filter Corporation*........................................................... 555,625
22,500 Thermo Remediation, Inc............................................................ 362,813
-----------
1,624,063
-----------
PUBLISHING--2.8%
15,000 Houghton Mifflin Company........................................................... 721,875
3,000 John Wiley & Sons, Inc. Class "A".................................................. 168,000
9,000 Waverly, Inc....................................................................... 333,000
-----------
1,222,875
-----------
REAL ESTATE--6.9%
30,000 Alexander Haagen Properties, Inc. REIT............................................. 341,250
25,000 Apartment Investors & Management Company, REIT..................................... 465,624
27,000 LTC Properties, Inc. REIT.......................................................... 351,000
45,000 Malan Realty Investors, Inc. REIT.................................................. 618,750
5,000 Mid-America Apartment Communities, Inc., REIT...................................... 125,000
15,000 Mid-America Realty Investments REIT................................................ 118,124
31,000 Mid-Atlantic Realty Trust REIT..................................................... 263,500
13,500 Sizeler Property Investors, Inc. REIT.............................................. 135,000
15,000 Storage Equities, Inc., REIT....................................................... 241,875
20,000 Walden Residential Properties, Inc., REIT.......................................... 385,000
-----------
3,045,123
-----------
RETAIL--4.7%
40,000 Cash America International, Inc.................................................... 305,000
10,000 Damark International, Inc.*........................................................ 71,250
27,200 Eckerd Corporation*................................................................ 792,200
50,500 Forschner Group, Inc.*............................................................. 555,500
15,750 Pier 1 Imports, Inc................................................................ 141,750
25,000 The Sirena Apparel Group, Inc.*.................................................... 200,000
-----------
2,065,700
-----------
SERVICES--1.3%
15,000 Equity Corporation International*.................................................. 241,875
11,500 Stewart Enterprises, Inc........................................................... 316,250
-----------
558,125
-----------
TELECOMMUNICATIONS--1.7%
15,000 CellStar Corporation*.............................................................. 290,624
15,000 Metrocall, Inc.*................................................................... 266,250
10,000 Pittencrieff Communications, Inc.*................................................. 60,000
10,000 TCSI Corporation*.................................................................. 136,250
-----------
753,124
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE> 8
- --------------------------------------------------------------------------------
HERITAGE SERIES TRUST-SMALL CAP STOCK FUND
INVESTMENT PORTFOLIO
APRIL 30, 1995
(UNAUDITED)
(CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ------------------ -----------
<C> <S> <C>
UTILITIES--0.3%
35,000 Peoples Telephone Company, Inc.*................................................... $ 153,125
-----------
Total common stocks (cost $33,870,504)................................................................. 38,827,466
-----------
</TABLE>
<TABLE>
<CAPTION>
MATURITY
PRINCIPAL DATE
- ------------------ --------
<C> <S> <C> <C>
CONVERTIBLE BONDS--5.8%(A)
ENTERTAINMENT--0.4%
$200,000 All American Communications, Inc., 6.50%.................................. 10/1/03 172,750
-----------
HEALTH CARE SERVICES--2.7%
1,000,000 Sun Healthcare Group, Inc., 6%............................................ 03/1/04 1,210,000
-----------
MEDICAL PRODUCTS & SUPPLIES--1.0%
500,000 Cabot Medical Corporation, 7.50%.......................................... 03/1/99 457,605
-----------
REAL ESTATE--1.7%
750,000 LTC Properties, Inc., REIT, 8.50%......................................... 01/1/00 750,938
-----------
Total convertible bonds (cost $2,415,000)............................................................... 2,591,293
-----------
TOTAL INVESTMENT PORTFOLIO (cost $40,000,504)(b), 101.8%(a)............................................. 45,133,759
OTHER ASSETS AND LIABILITIES, NET (1.8%)(a)............................................................. (801,491)
-----------
NET ASSETS, 100.0%...................................................................................... $44,332,268
==========
</TABLE>
- ------------------
* Not an 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 $5,133,255 which
consists of aggregate gross unrealized appreciation for all securities in
which there is an excess of market value over tax cost of $7,493,735 and
aggregate gross unrealized depreciation for all securities in which there is
an excess of tax cost over market value of $2,360,480.
(c) Restricted security -- security that has not been registered with the
Securities and Exchange Commission under the Securities Act of
1933 -- purchased on October 11, 1994 at $10.00 per share. This security
represented 0.6% of the net assets of the Fund.
ADR -- American Depository Receipts
REIT -- Real Estate Investment Trust
The accompanying notes are an integral part of the financial statements.
8
<PAGE> 9
- --------------------------------------------------------------------------------
HERITAGE SERIES TRUST-SMALL CAP STOCK FUND
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1995
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets
Investments, at market value (identified cost $36,285,504) (Note 1)...................... $41,418,759
Repurchase agreement (identified cost $3,715,000) (Note 1)............................... 3,715,000
Cash..................................................................................... 4,697
Receivables:
Investments sold....................................................................... 195,690
Fund shares sold....................................................................... 167,838
Dividends and interest................................................................. 53,436
Deferred organizational expenses (Note 1)................................................ 30,000
Prepaid insurance (Note 1)............................................................... 3,186
-----------
Total assets..................................................................... 45,588,606
Liabilities
Payables (Note 4):
Investments purchased.................................................................. $1,066,015
Fund shares redeemed................................................................... 14,210
Accrued management fee................................................................. 35,772
Accrued distribution fee............................................................... 8,943
Other accrued expenses................................................................. 131,398
----------
Total liabilities................................................................ 1,256,338
-----------
Net assets, at market value.............................................................. $44,332,268
==========
Net Assets
Net assets consist of:
Undistributed net investment income.................................................... $ 1,108
Net unrealized appreciation on investments............................................. 5,133,255
Accumulated net realized loss.......................................................... (666,489)
Paid-in capital........................................................................ 39,864,394
-----------
Net assets, at market value.............................................................. $44,332,268
==========
Class A Shares
Net asset value and redemption price per share ($43,999,317 divided by 2,732,247 shares
of beneficial interest outstanding, no par value) (Note 2)............................. $16.10
======
Maximum offering price per share (100/95.25 of $16.10)................................... $16.90
======
Class C Shares
Net asset value and offering price per share ($332,951 divided by 20,697 shares of
beneficial interest outstanding, no par value) (Note 2)................................ $16.09
======
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE> 10
- --------------------------------------------------------------------------------
HERITAGE SERIES TRUST-SMALL CAP STOCK FUND
STATEMENT OF OPERATIONS
FOR THE SIX MONTH PERIOD ENDED APRIL 30, 1995
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment Income
Income:
Dividends................................................................................. $ 249,999
Interest.................................................................................. 201,801
----------
Total income........................................................................ 451,800
Expenses (Notes 1 and 4):
Management fee............................................................................ $208,475
Distribution fee.......................................................................... 52,238
Shareholder servicing..................................................................... 34,160
Custodian/Fund Accounting fees............................................................ 25,744
Legal fees................................................................................ 25,723
Amortization of state registration expenses............................................... 25,500
Reports to shareholders................................................................... 20,949
Auditing fees............................................................................. 10,940
Trustees' fees and expenses............................................................... 5,145
Amortization of organization expenses..................................................... 5,000
Insurance................................................................................. 2,522
Other..................................................................................... 679
--------
Total expenses...................................................................... 417,075
----------
Net investment income....................................................................... 34,725
----------
Realized and Unrealized Gain (Loss) on Investments
Net realized loss from investment transactions.............................................. (574,791)
Net increase in unrealized appreciation of investments during the period.................... 2,999,607
----------
Net gain on investments............................................................. 2,424,816
----------
Net increase in net assets resulting from operations........................................ $2,459,541
=========
</TABLE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX MONTH
PERIOD ENDED
APRIL 30, 1995 FOR THE YEAR ENDED
(UNAUDITED) OCTOBER 31, 1994
------------------ ------------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income (loss)............................................... $ 34,725 $ (27,981)
Net realized gain (loss) from investment transactions...................... (574,791) 2,526,517
Net increase (decrease) in unrealized appreciation of investments during
the period............................................................... 2,999,607 (1,054,728)
------------------ ------------------
Net increase in net assets resulting from operations....................... 2,459,541 1,443,808
Distributions to shareholders from:
Net investment income Class A ($.01 per share)............................. (33,618) --
Net realized gains Class A ($.97 per share)................................ (2,501,284) --
Increase (decrease) in net assets from Fund share transactions (Note 2)...... 2,883,275 (307,114)
------------------ ------------------
Increase in net assets....................................................... 2,807,914 1,136,694
Net assets, beginning of period.............................................. 41,524,354 40,387,660
------------------ ------------------
Net assets, end of period (including undistributed net investment income of
$1,108 for the current period)............................................. $ 44,332,268 $ 41,524,354
================= =================
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE> 11
- --------------------------------------------------------------------------------
HERITAGE SERIES TRUST-SMALL CAP STOCK 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 C SHARES
CLASS A SHARES CLASS A SHARES FOR THE PERIOD
FOR THE SIX MONTH FOR THE YEARS ENDED
PERIOD ENDED ENDED OCTOBER 31 APRIL 30,
APRIL 30, 1995 ------------------ 1995++
(UNAUDITED) 1994 1993+ (UNAUDITED)
----------------- ------- ------- --------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF THE PERIOD................... $ 16.20 $ 15.57 $ 14.29 $15.67
------- ------- ------- ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)(a).......................... .01 (.01) (.01) --
Net realized and unrealized gain on investments.......... .87 .64 1.29 .42
------- ------- ------- ------
Total from investment operations........................... .88 .63 1.28 .42
------- ------- ------- ------
Less Distributions from:
Net investment income.................................... (.01) -- -- --
Net realized gain on investments......................... (.97) -- -- --
------- ------- ------- ------
Total Distributions........................................ (.98) -- -- --
------- ------- ------- ------
NET ASSET VALUE, END OF THE PERIOD......................... $ 16.10 $ 16.20 $ 15.57 $16.09
================= ======= ======= ===============
TOTAL RETURN (%)(C)........................................ 5.83 4.05 8.96 2.68
RATIOS (%)/SUPPLEMENTAL DATA:
Ratio of operating expenses, net to average daily net 1.91
assets(a).............................................. 2.00 (b) 2.00 (b) 2.75 (b)
Ratio of net investment gain (loss) to average daily net (0.07)
assets................................................. 0.17 (b) (0.15)(b) (1.39)(b)
Portfolio turnover rate.................................. 71.55 (b) 95.18 97.28 (b) 71.55 (b)
Net assets, end of period (thousands).................... $43,999 $41,547 $40,388 $ 333
</TABLE>
- ---------------
+ For the period May 7, 1993 (commencement of operations) to October 31, 1993.
++ For the period April 3, 1995 (commencement of C Shares) to April 30, 1995.
(a) Excludes management fees waived by the Manager in fiscal 1993 of less than
$.01 per share. The operating expense ratio including such items would be
2.09% (annualized). The year 1994 includes previously waived management fees
paid to the Manager of less than $.01 per share.
(b) Annualized.
(c) Does not include sales load. Not annualized for fiscal 1993 and fiscal 1995
periods.
11
<PAGE> 12
- --------------------------------------------------------------------------------
HERITAGE SERIES TRUST-SMALL CAP STOCK FUND
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
- --------------------------------------------------------------------------------
Note 1: SIGNIFICANT ACCOUNTING POLICIES. Heritage Series Trust (the "Trust") 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 and presently offers shares in three
series, the Small Cap Stock Fund (the "Fund"), Value Equity Fund and
Eagle International Equity Portfolio. The policies described below are
followed consistently by the Fund in the preparation of its financial
statements in conformity with generally accepted accounting principles.
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.
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, the last bid price is used and in the absence of a market
quote, securities are valued using such methods as the Board of Trustees
believes 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 in 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 Net Realized Gains. 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.
Organization Expenses: Expenses incurred in connection with the
formation of the Fund were deferred and are being amortized on a
straight-line basis over 60 months from the date of commencement of
operations.
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.
Capital Accounts: The Fund reports the undistributed net investment
income (accumulated net investment loss) and accumulated net realized
gain (loss) accounts on a basis approximating amounts available for
future tax distributions (or to offset future taxable realized gains
when a capital loss carryforward is available). Accordingly, the Fund
may periodically make reclasses among certain capital accounts without
impacting the net asset value of the Fund.
12
<PAGE> 13
- --------------------------------------------------------------------------------
HERITAGE SERIES TRUST-SMALL CAP STOCK FUND
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
- --------------------------------------------------------------------------------
Note 2: FUND SHARES. At April 30, 1995, 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 six month period ended April 30, 1995
and for the year ended October 31, 1994 were as follows:
<TABLE>
<CAPTION>
FOR THE SIX MONTH
PERIOD ENDED
APRIL 30, 1995 FOR THE YEAR ENDED OCTOBER
(UNAUDITED) 31, 1994
-------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Shares sold......................................... 280,653 $ 4,374,334 2,257,306 $ 36,019,552
Shares issued in Reinvestment of Distributions...... 160,682 2,431,113 -- --
Shares redeemed..................................... (272,962) (4,248,751) (2,287,410) (36,326,666)
---------- ----------- ---------- ------------
Net increase (decrease)............................. 168,373 $ 2,556,696 (30,104) $ (307,114)
========== ===========
Shares outstanding:
Beginning of period............................... 2,563,874 2,593,978
---------- ----------
End of period..................................... 2,732,247 2,563,874
========= =========
</TABLE>
Transactions for Class C shares of the Fund from April 3, 1995
(commencement of Class C shares) to April 30, 1995 were as follows:
<TABLE>
<CAPTION>
SHARES AMOUNT
---------- -----------
<S> <C> <C>
Shares sold......................................... 20,697 $ 326,579
==========
Shares outstanding:
Beginning of period............................. 0
----------
End of period................................... 20,697
=========
</TABLE>
Note 3: PURCHASES AND SALES OF SECURITIES. For the six month period ended April
30, 1995, purchases and sales of investment securities (excluding
repurchase agreements and short term obligations) aggregated $16,427,596
and $13,464,798, respectively.
13
<PAGE> 14
- --------------------------------------------------------------------------------
HERITAGE SERIES TRUST-SMALL CAP STOCK FUND
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
- --------------------------------------------------------------------------------
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
1.00% on the Fund's average daily net assets, computed daily and payable
monthly. Heritage has voluntarily agreed to waive 25% of this fee on
average daily net assets in excess of $50 million. 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. Currently, the Manager has voluntarily agreed to waive its
fee to the extent that Fund Class A operating expenses exceed 2.00% on
an annual basis of the Fund's average daily net assets or Class C
operating expenses exceed 2.75% of the Fund's average daily net assets.
This agreement is more restrictive than any state expense limitation at
the current level of net assets. Fees voluntarily waived are recoverable
by the Manager for a period of up to two years.
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
April 30, 1995 was $19,603. In addition, the Manager performs Fund
Accounting services for the Fund and charged $14,256 during the current
period of which $9,455 was payable as of April 30, 1995.
The Manager has entered into an agreement with the research department
of Raymond James & Associates, Inc. and Awad & Associates, Inc., a
division of Raymond James & Associates, Inc., (the "Subadvisers") for
the Subadvisers 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.
Once the assets of the Fund exceed $50 million, Research and Awad
voluntarily agree to waive a proportionate share of the fee waived by
Heritage based on the respective assets of the Funds allocated to
Research and Awad.
Pursuant to a 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 pursuant
to the Class A Distribution Plan of up to 0.35% of average daily net
assets for the services it provides in connection with the promotion and
distribution of Fund shares. However, at the present time the Board of
Trustees has authorized payments of only .25% of average daily net
assets. The Class C Distribution Plan provides for payments at an annual
rate of up to 1.00% of the average daily net assets. The Distributor 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 period $52,080 and $158 were paid
for distribution fees for Class A shares and Class C shares,
respectively. The Manager, the Subadvisers, the Distributor and the
Shareholder Servicing Agent are all wholly-owned subsidiaries of Raymond
James Financial, Inc.
Trustees of the Trust also serve as Trustees for Heritage Cash Trust,
Heritage Capital Appreciation Trust, Heritage Income-Growth Trust,
Heritage Income Trust and Heritage U.S. Government Income Fund,
investment companies which are also advised by the Manager (collectively
referred to as the Heritage funds). Each Trustee of the Heritage funds
who is not an interested person of the Manager received an annual fee of
$8,000 and an additional fee of $2,000 for each combined quarterly
meeting of the Heritage funds attended. Trustees' fees and expenses are
paid equally by each of the Heritage funds.
14
<PAGE> 15
HERITAGE SERIES TRUST-SMALL CAP STOCK FUND, is a member of the Heritage family
of mutual funds. Other investment alternatives available to you from Heritage
include:
- HERITAGE CASH TRUST
MONEY MARKET FUND
MUNICIPAL MONEY MARKET FUND
- HERITAGE CAPITAL APPRECIATION TRUST
- HERITAGE INCOME-GROWTH TRUST
- HERITAGE INCOME TRUST
DIVERSIFIED PORTFOLIO
LIMITED MATURITY GOVERNMENT PORTFOLIO
INSTITUTIONAL GOVERNMENT PORTFOLIO
- HERITAGE SERIES TRUST
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 funds, please contact your account
executive. Read the Prospectus carefully before you invest in any of the funds.
15
<PAGE> 16
(LOGO)
HERITAGE
SERIES TRUST(TM)
SMALL CAP STOCK FUND
A MUTUAL FUND
SEEKING LONG-TERM
CAPITAL APPRECIATION
SEMIANNUAL REPORT
(Unaudited) and Investment
Performance Review for the
Six Month Period Ended
APRIL 30, 1995
A member of the
Heritage Family of Mutual Funds(TM)
<TABLE>
<S> <C>
Heritage Series Trust ----------------
P.O. Box 33022
St. Petersburg, FL 33733
- --------------------------------- BULK RATE
U.S. POSTAGE
Address Change Requested PAID
PERMIT NO. 39
Semiannual Report ATLANTA, GA
INVESTMENT ADVISOR/ ----------------
SHAREHOLDER SERVICING AGENT
Heritage Asset Management, Inc.
P.O. Box 33022
St. Petersburg, FL 33733
(800) 421-4184
DISTRIBUTOR
Raymond James & Associates, Inc.
P.O. Box 12749
St. Petersburg, FL 33733
(813) 573-3800
LEGAL COUNSEL
Kirkpatrick & Lockhart LLP
This report is for the information of shareholders of
Heritage Series Trust. It may also be used as sales
literature when preceded or accompanied by a prospectus.
5M 6/95
</TABLE>
