<PAGE> 1
June 19, 1996
Dear Fellow Shareholders:
It is our pleasure to provide you with the semiannual report for the Eagle
International Equity Portfolio (the "Fund") of Heritage Series Trust for the six
month period ended April 30, 1996. During this period, the Eagle class of shares
appreciated by 11.4%* while the Morgan Stanley Capital International Europe,
Asia, Far East ("EAFE") index gained 13.2%. For the year ended April 30 (the
first year of operations for your Fund), your Fund's shares gained 15.8%**
versus a gain of 11.4% for the EAFE index.
During the recent semiannual reporting period, your Fund introduced two new
classes of shares. These "A" and "C" shares were initially offered on December
27, 1995 and share ownership in the same portfolio of securities as the "Eagle"
class. The investment and financial information for all classes of shares is
presented in this semiannual report.
In the Market Commentary that follows, Martin Currie, Inc. shares their thoughts
on the recent performance of your Fund as well as their outlook for the
international equity markets. Martin Currie, the investment subadviser for your
Fund, is a century-old investment firm based in Edinburgh, Scotland. Through
your investment in the Fund, you gain access to Martin Currie's expertise in
established and emerging markets throughout the world. We hope you find their
comments helpful in understanding how your Fund's investments are managed.
Thank you for your continuing investment in the Eagle International Equity
Portfolio. We look forward to helping serve your investment needs for years to
come.
Sincerely, Sincerely,
/s/ Stephen G. Hill /s/ Richard K. Riess
Stephen G. Hill Richard K. Riess
President President
Heritage Series Trust Eagle Asset Management, Inc.
Eagle International Equity Portfolio
* Calculated without the imposition of front-end or contingent deferred sales
charges.
** The aggregate total return of the Fund's Eagle Class of shares for the period
May 1, 1995 (commencement of operations) to March 31, 1996 was 12.77% (not
annualized). The EAFE Index for the same period of time had a return of
8.25%. This return represents historical data. The investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost. The Fund's
results assume the reinvestment of all capital gain distributions and income
dividends.
S E M I A N N U A L R E P O R T
<PAGE> 2
MARKET COMMENTARY from MARTIN CURRIE, INC. June 19, 1996
Eagle International Equity Portfolio
The six months from October 31, 1995 to April 30, 1996 were notably stronger for
international markets than were the prior six months. For this period, The
Morgan Stanley Capital International Europe, Asia, Far East ("EAFE") Index rose
by 13.2% compared to a gain of 11.4% for the Eagle class shares of the Eagle
International Equity Portfolio (the "Fund").
With calendar 1995 characterized by strong bond markets leading equities ahead,
it is not surprising that bonds, particularly in the U.S. market, have coloured
the major international market moves this year. We believe conflicting domestic
U.S. economic news has signaled at least a bottoming of interest rates, with
long bond yields falling back to 7%. In contrast, the U.S. stock market has
continued to rally, leaving, in our opinion, the relationship with bonds
historically stretched.
The UK equity market (16.2% of the index and 13.6% of the Fund) has followed a
weaker bond market more closely, with political uncertainty offsetting continued
speculative activity (we held TSB Group which was acquired by Lloyd's Bank) and
strong corporate profit growth. Themes within the market have been a resurgence
of interest in smaller companies and a recovery of consumer confidence, both
reflected through holdings in the portfolio. However, conscious of the likely
cap on market returns over the rest of 1996 due to a dull bond market, we
reduced the U.K. weighting in the earlier part of this year in order to increase
our investment in Japan. The rest of Europe (32.8% of the index and 21.9% of the
Fund) has been surprisingly strong, with financial, pharmaceutical and chemical
groups performing well. Growth stocks (Telecom Italia Mobile, Schneider, and
Elsevier) have maintained their premium and the stirrings of shareholder
awareness (Hoechst) have led to good individual share price moves. European
Monetary Union discussions, supply of privatization issues, and a sluggish
growth environment remains in the background.
We moved more money into Japan (41.1% of the index and 36.2% of the Fund) over
the period with beneficial effect. The portfolio is biased toward manufacturing
and electronic stocks (Sony, Mitsubishi Heavy) and smaller cap plays, at the
expense of positions in the banking sector. The return of the domestic investor
to the market has been key to the index rise. The Japanese sector of the
portfolio has been 50% hedged over the period, with a weakening Yen helping both
the economy and the hard hit export stocks.
A significant overweight position for the Fund has been Asia (10.0% of the index
and 20.3% of the Fund). After dull markets over much of 1995, a return of
capital flows at the turn of the year has seen interest in the area diversifying
away from the strongly performing Hong Kong and Singaporean markets, towards the
smaller markets, such as Malaysia, Indonesia, and the Philippines. Taiwan's
recovery post the elections also contributed strongly toward the Fund's return.
We remain underweight in Malaysia, but have been adding to Australia,
particularly to resource and leisure stocks.
Improved capital flows have also been evident in Emerging Markets (5.3% of the
Fund). We have exposure to Latin America, India, and South Africa. Brazil and
Mexico have recovered sharply, helped by a stronger economic outlook and
evidence of sustained financial reform. India too has rallied, with easier
monetary conditions supporting robust corporate profit growth, in sharp contrast
to 1995. Political uncertainty has resulted in the South African market and
currency weakening, although this should be put into the context of very
positive returns over 1995.
S E M I A N N U A L R E P O R T
2
<PAGE> 3
Looking ahead, the direction of the U.S. bond yield will impact upon
international markets, although the relative strength of earnings growth outside
the maturer markets -- the Pacific and smaller market regions (where we remain
heavily weighted) -- will continue to attract strong capital flows. Japan may
have run its course in the short-term, with much of the weakness of the Yen,
restoration of economic and profits growth now reflected in current market
levels. Of the maturer market areas, Continental Europe is likely to offer more
immediate opportunities.
We look forward to again reporting to you in six months following the close of
the Fund's fiscal year.
S E M I A N N U A L R E P O R T
3
<PAGE> 4
EAGLE INTERNATIONAL EQUITY PORTFOLIO
INVESTMENT PORTFOLIO
APRIL 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES MARKET
------ VALUE
-----------
<C> <S> <C>
COMMON STOCKS--93.9%(A)
- ------------------------
ARGENTINA--0.6%
--------------
8,700 Capex, SA............................................................................ $ 121,800
-----------
AUSTRALIA--3.0%
--------------
20,600 Broken Hill Proprietary Company, Ltd................................................. 317,010
50,000 MIM Holdings, Ltd.................................................................... 73,841
10,000 MIM Holdings Ltd, Warrants........................................................... 786
55,000 Qantas Airways, Ltd.................................................................. 97,643
16,000 WMC, Ltd............................................................................. 116,638
-----------
605,918
-----------
BRAZIL--1.2%
-----------
3,500 Telebras, ADR........................................................................ 189,438
5,600 Usiminas, ADR........................................................................ 64,344
-----------
253,782
-----------
CHILE--0.5%
----------
3,300 Enersis, SA.......................................................................... 98,175
-----------
FRANCE--3.8%
------------
2,200 Peugeot, SA.......................................................................... 307,383
10,040 Schneider, SA........................................................................ 467,853
-----------
775,236
-----------
GERMANY--5.9%
--------------
5,600 Deutsche Bank, AG.................................................................... 268,386
1,300 Hoechst, AG.......................................................................... 437,834
10,100 VEBA, AG............................................................................. 502,064
-----------
1,208,284
-----------
HONG KONG--7.3%
----------------
165,000 Amoy Properties, Ltd................................................................. 185,573
41,000 China Light & Power Company, Ltd..................................................... 193,459
94,600 Hong Kong Telecom Company, Ltd....................................................... 180,383
22,696 HSBC Holdings........................................................................ 338,877
50,000 Hutchison Whampoa, Ltd............................................................... 310,258
33,500 Swire Pacific, Ltd, Class "A"........................................................ 285,825
-----------
1,494,375
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
S E M I A N N U A L R E P O R T
4
<PAGE> 5
EAGLE INTERNATIONAL EQUITY PORTFOLIO
INVESTMENT PORTFOLIO
APRIL 30, 1996
(UNAUDITED)
(CONTINUED)
<TABLE>
<CAPTION>
SHARES MARKET
------ VALUE
-----------
<C> <S> <C>
INDIA--0.5%
----------
8,032 Indian Opportunities Fund, Ltd....................................................... $ 93,735
-----------
ITALY--1.8%
----------
53,450 La Rinascente........................................................................ 369,907
-----------
JAPAN--34.9%
------------
38,000 Asahi Chemical Ind. Company, Ltd..................................................... 288,801
13,000 Canon, Inc........................................................................... 258,496
9,000 Daiwa Securities Company, Ltd........................................................ 138,521
37 DDI Corporation...................................................................... 317,987
19,000 Hitachi, Ltd......................................................................... 205,248
22,000 Hitachi Metals, Ltd.................................................................. 288,132
5,000 Ito-Yokado Company, Ltd.............................................................. 294,919
39,000 Itochu Corporation................................................................... 297,146
34,000 Kamigumi Company, Ltd................................................................ 351,035
4,000 Komori Corporation................................................................... 106,305
5,000 Kyocera Corporation.................................................................. 376,655
2,000 Mabuchi Motor Company, Ltd........................................................... 123,130
7,000 Marui Company, Ltd................................................................... 154,582
44,000 Mitsubishi Heavy Industries, Ltd..................................................... 392,868
20,000 Mitsui Fudosan Company, Ltd.......................................................... 263,850
29,000 Nippon Express Company, Ltd.......................................................... 302,184
11,000 Nomura Securities Company, Ltd....................................................... 239,759
7,000 Rohm Company, Ltd.................................................................... 445,677
2,000 Shimachu Company, Ltd................................................................ 67,874
14,700 Shin-Etsu Chemical Company, Ltd...................................................... 321,811
4,000 Sony Corporation..................................................................... 260,026
15,000 Sumitomo Electric Industries......................................................... 215,095
18,000 Sumitomo Forestry Company, Ltd....................................................... 277,042
25,000 Sumitomo Trust & Banking............................................................. 365,661
6,000 Taisho Pharmaceutical Company........................................................ 131,351
30,000 Tokio Marine & Fire Insurance........................................................ 412,982
12,000 Toyota Motor Corporation............................................................. 274,174
-----------
7,171,311
-----------
MALAYSIA--3.0%
-------------
16,000 AMMB Holdings BHD.................................................................... 242,249
14,000 Edaran Otomobil National, BHD........................................................ 119,601
15,000 Resorts World, BHD................................................................... 90,843
25,000 United Engineers, BHD................................................................ 171,460
-----------
624,153
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
S E M I A N N U A L R E P O R T
5
<PAGE> 6
EAGLE INTERNATIONAL EQUITY PORTFOLIO
INVESTMENT PORTFOLIO
APRIL 30, 1996
(UNAUDITED)
(CONTINUED)
<TABLE>
<CAPTION>
SHARES MARKET
------ VALUE
-----------
<C> <S> <C>
MEXICO--1.6%
------------
39,000 Apasco, SA........................................................................... $ 209,960
18,000 Corporate Industrial San Luis, SA.................................................... 105,625
500 Corporacion Industrial San Luis, SA.................................................. 17,625
-----------
333,210
-----------
NETHERLANDS--2.4%
-----------------
4,500 Wolters Kluwer, CVA.................................................................. 491,888
-----------
NEW ZEALAND--0.6%
------------------
52,000 Carter Holt Harvey Holdings, Ltd..................................................... 123,240
-----------
SINGAPORE--2.7%
--------------
20,000 Development Bank of Singapore, Ltd................................................... 253,236
26,000 First Capital Corporation............................................................ 82,487
28,357 Jardine Matheson & Company, Ltd...................................................... 226,856
-----------
562,579
-----------
SOUTH AFRICA--0.9%
-----------------
16,000 Malbak............................................................................... 77,778
3,600 South African Breweries, Ltd......................................................... 104,375
-----------
182,153
-----------
SOUTH KOREA--0.2%
-----------------
5,000 Korea Preferred Fund................................................................. 50,165
-----------
SPAIN--1.9%
-----------
8,345 Banco de Santander, SA............................................................... 387,727
-----------
SWEDEN--1.9%
-------------
28,700 Stora Kopparbergs, AB................................................................ 387,232
-----------
SWITZERLAND--2.5%
----------------
470 Nestle, SA........................................................................... 522,769
-----------
TAIWAN--1.2%
------------
20,000 Taipel Fund.......................................................................... 160,620
10,800 Taiwan Opportunities Fund............................................................ 93,312
-----------
253,932
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
S E M I A N N U A L R E P O R T
6
<PAGE> 7
EAGLE INTERNATIONAL EQUITY PORTFOLIO
INVESTMENT PORTFOLIO
APRIL 30, 1996
(UNAUDITED)
(CONTINUED)
<TABLE>
<CAPTION>
SHARES MARKET
------ VALUE
-----------
<C> <S> <C>
THAILAND--1.9%
-------------
60,000 Thai Military Bank, PLC.............................................................. $ 289,964
20,000 TPI Polene, PLC...................................................................... 110,123
-----------
400,087
-----------
UNITED KINGDOM--13.6%
---------------------
59,500 Argyll Group, PLC.................................................................... 297,366
19,000 British Telecommunications, PLC...................................................... 104,253
82,000 BTR, PLC, Warrants................................................................... 75,914
24,000 Cable & Wireless, PLC................................................................ 188,409
12,000 East Midlands Electricity, PLC....................................................... 113,172
19,500 Glaxo Wellcome, PLC.................................................................. 236,448
24,200 Granada Group, PLC................................................................... 299,995
91,000 Ladbroke Group Ltd, PLC.............................................................. 267,808
65,000 NFC, PLC............................................................................. 168,296
16,000 Reckitt & Colman..................................................................... 175,583
8,000 Shell Transport & Trading Company.................................................... 105,555
32,000 TSB Group, PLC....................................................................... 153,425
15,000 Unilever, PLC........................................................................ 274,575
17,000 Wassall, PLC......................................................................... 76,517
37,000 Wolseley, PLC........................................................................ 260,943
-----------
2,798,259
-----------
<CAPTION>
PRINCIPAL
---------
<C> <S> <C>
BONDS--1.3%(A)
- -------------
JAPAN--1.3%
- -----------
$ 226,000 MBL International Finance (Bermuda) 3.0%............................................. 263,290
-----------
REPURCHASE AGREEMENT--4.1%(A)
- -----------------------------
Repurchase Agreement with State Street Bank and Trust Company, dated April 30, 1996, @ 5.22%, to be
repurchased at $847,123 on May 1, 1996, collateralized by $848,672 United States Treasury Notes,
5.625%, due June 30, 1997 (market value $864,566 including interest) (cost $847,000)............... 847,000
-----------
TOTAL INVESTMENT PORTFOLIO (cost $18,954,665)(b), 99.3%(a)............................................. 20,420,207
OTHER ASSETS AND LIABILITIES, NET, 0.7%(a)............................................................. 146,260
-----------
NET ASSETS, 100.0%..................................................................................... $20,566,467
===========
</TABLE>
(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 $1,465,543, which
consists of aggregate gross unrealized appreciation for all securities in
which there is an excess of market value over tax cost of $1,725,048 and
aggregate gross unrealized depreciation for all securities in which there is
an excess of tax cost over market value of $259,505.
The accompanying notes are an integral part of the financial statements.
S E M I A N N U A L R E P O R T
7
<PAGE> 8
EAGLE INTERNATIONAL EQUITY PORTFOLIO
INVESTMENT PORTFOLIO
APRIL 30, 1996
(UNAUDITED)
(CONTINUED)
<TABLE>
<CAPTION>
MARKET % OF NET
INDUSTRY DIVERSIFICATION VALUE ASSETS
- ---------------------------------------------------------------------------------------- ----------- --------
<S> <C> <C>
Common Stocks
Auto Components....................................................................... $ 274,174 1.33%
Banking............................................................................... 1,126,350 5.48%
Basic Industries...................................................................... 2,292,003 11.14%
Building Materials & Merchandise...................................................... 260,944 1.27%
Capital Goods......................................................................... 844,886 4.11%
Chemicals............................................................................. 610,611 2.97%
Computers/Office Equipment............................................................ 317,986 1.55%
Construction & Building Materials..................................................... 277,042 1.35%
Consumer Goods & Services............................................................. 2,311,399 11.24%
Diversified Holding Companies......................................................... 596,083 2.90%
Diversified Industrials............................................................... 152,431 0.74%
Electronics/Control Equipment......................................................... 1,884,327 9.16%
Fabricated Metal Products............................................................. 288,132 1.40%
Finance/Insurance..................................................................... 1,653,496 8.04%
Financial Institutions & Services..................................................... 791,262 3.85%
Food Manufacturers.................................................................... 274,575 1.34%
Heavy Engineering/Shipbuilding........................................................ 392,868 1.91%
Leisure & Hotels...................................................................... 567,804 2.76%
Machinery/Engineering Services........................................................ 106,305 0.52%
Oil, Integrated....................................................................... 105,555 0.51%
Pharmaceuticals....................................................................... 367,799 1.79%
Real Estate........................................................................... 449,423 2.19%
Retail Trade.......................................................................... 814,740 3.96%
Telecommunications.................................................................... 292,661 1.42%
Transportation & Storage.............................................................. 750,863 3.65%
Utilities............................................................................. 1,209,052 5.88%
Wholesale Trade....................................................................... 297,146 1.44%
Bonds................................................................................... 263,290 1.28%
Repurchase Agreement.................................................................... 847,000 4.11%
----------- --------
Total Investments....................................................................... 20,420,207 99.29%
Other Assets and Liabilities, net....................................................... 146,260 0.71%
----------- --------
Net Assets.............................................................................. $20,566,467 100.00%
=========== ========
</TABLE>
OPEN FORWARD FOREIGN CURRENCY CONTRACTS
APRIL 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
CONTRACT IN DELIVERY GROSS UNREALIZED
TO DELIVER EXCHANGE FOR DATE APPRECIATION (DEPRECIATION)
- -------------------- ------------------ -------- ---------------------------
<S> <C> <C> <C> <C> <C>
JPY 189,646,500 USD 1,792,500 5/14/96 (24,073)
JPY 97,244,920 USD 920,000 5/14/96 (11,483)
JPY 25,558,400 USD 245,000 5/14/96 183
JPY 37,547,718 USD 354,000 5/14/96 (5,660)
-------
Net Unrealized Depreciation (41,033)
=========================
</TABLE>
- ---------------
JPY -- Japanese Yen
USD -- United States Dollar
The accompanying notes are an integral part of the financial statements.
S E M I A N N U A L R E P O R T
8
<PAGE> 9
EAGLE INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996
(UNAUDITED)
<TABLE>
<S> <C> <C>
Assets
- ------
Investments, at market value (identified cost $18,954,665) (Note 1)....................... $20,420,208
Foreign currency (cost $42,230)........................................................... 42,205
Cash...................................................................................... 607
Receivables:
Fund shares sold........................................................................ 282,813
Dividends and interest.................................................................. 75,669
Foreign taxes recoverable............................................................... 6,642
Deferred organizational expenses (Note 1)................................................. 41,600
Deferred state registration expenses (Note 1)............................................. 25,710
-----------
Total assets...................................................................... 20,895,454
Liabilities
- -----------
Payables (Note 4):
Investments purchased................................................................... $128,501
Other accrued expenses.................................................................. 111,928
Unrealized depreciation of forward foreign currency contracts........................... 41,033
Due to manager.......................................................................... 21,670
Accrued distribution fee................................................................ 15,071
Fund shares redeemed.................................................................... 10,784
--------
Total liabilities................................................................. 328,987
-----------
Net assets, at market value............................................................... $20,566,467
===========
Net Assets
- ----------
Net assets consist of:
Paid-in capital......................................................................... 18,991,623
Net unrealized appreciation on investments and other assets and liabilities denominated
in foreign currencies................................................................. 1,424,907
Accumulated net realized gain (Note 1).................................................. 130,058
Undistributed net investment income (Note 1)............................................ 19,879
-----------
Net assets, at market value............................................................... $20,566,467
===========
Eagle Class Shares
- ------------------
Net asset value, redemption and offering price per share ($18,365,266 divided by 811,200
shares of beneficial interest outstanding, no par value) (Note 2)....................... $22.64
======
Class A Shares
- --------------
Net asset value and redemption price per share ($1,695,443 divided by 74,735 shares of
beneficial interest outstanding, no par value) (Note 2)................................. $22.69
======
Maximum offering price per share (100/95.25 of $22.69).................................... $23.82
======
Class C Shares
- --------------
Net asset value, offering price and redemption price per share ($505,758 divided by 22,345
shares of beneficial interest outstanding, no par value) (Notes 1 and 2)................ $22.63
======
</TABLE>
The accompanying notes are an integral part of the financial statements.
S E M I A N N U A L R E P O R T
9
<PAGE> 10
EAGLE INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED APRIL 30, 1996
(UNAUDITED)
<TABLE>
<S> <C> <C>
Investment Income
- -----------------
Income:
Dividends............................................................................................ $ 174,828
Interest (net of recovery of $26 foreign withholding taxes).......................................... 40,792
----------
Total income................................................................................... 215,620
Expenses (Notes 1 and 4):
Management fee....................................................................................... $ 73,010
Distribution fee (Eagle Shares)...................................................................... 68,673
Distribution fee (Class A Shares).................................................................... 841
Distribution fee (Class C Shares).................................................................... 972
Custodian/Fund accounting fees....................................................................... 45,423
Amortization of state registration expenses.......................................................... 25,481
Professional fees.................................................................................... 22,560
Reports to shareholders.............................................................................. 12,500
Amortization of organization expenses................................................................ 5,200
Trustees' fees and expenses.......................................................................... 4,200
Federal registration fees............................................................................ 3,182
Shareholder servicing fees........................................................................... 2,711
Insurance............................................................................................ 1,553
Other................................................................................................ 18
--------
Total expenses before waiver and reimbursement................................................. 266,324
Fees waived by Manager......................................................................... (73,010)
Expenses reimbursed by Manager................................................................. (5,488) 187,826
-------- ----------
Net investment income................................................................................. 27,794
----------
Realized and Unrealized Gain (Loss) on Investments
- --------------------------------------------------
Net realized gain from investment transactions........................................................ 11,089
Net realized gains from foreign currency transactions................................................. 128,769
Net increase in unrealized appreciation of investments during the period.............................. 1,465,543
Net decrease in unrealized appreciation from foreign currency during the period....................... (2,917)
----------
Net gain on investments........................................................................ 1,602,484
----------
Net increase in net assets resulting from operations.................................................. $1,630,278
============
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE PERIOD
MONTH PERIOD MAY 1, 1995
ENDED APRIL 30, (COMMENCEMENT OF
1996 OPERATIONS) TO
(UNAUDITED) OCTOBER 31, 1995
---------------- ----------------
<S> <C> <C>
Increase in net assets:
Operations:
Net investment income (loss)......................................................... $ 27,794 $ (10,686)
Net realized gains from foreign currency transactions................................ 128,769 1,440
Net realized gains from investment transactions...................................... 11,089 253,531
Net increase (decrease) in unrealized appreciation from foreign currency............. (2,917) 194
Net increase (decrease) in unrealized appreciation of investments during the
period............................................................................. 1,465,543 (37,913)
---------------- ----------------
Net increase in net assets resulting from operations................................. 1,630,278 206,566
Distribution to shareholders from:
Net investment income Eagle Class Shares, ($.01 per share)........................... (7,915) --
Net realized gains Eagle Class Shares, ($.47 per share).............................. (254,085) --
Increase in net assets from Fund share transactions (Note 2).......................... 9,227,630 9,762,993
---------------- ----------------
Increase in net assets................................................................ 10,595,908 9,969,559
Net assets, beginning of period....................................................... 9,970,559 1,000
---------------- ----------------
Net assets, end of period (including undistributed net investment income of $19,879 as
of April 30, 1996)................................................................... $ 20,566,467 $9,970,559
===================== =====================
</TABLE>
The accompanying notes are an integral part of the financial statements.
S E M I A N N U A L R E P O R T
10
<PAGE> 11
EAGLE INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
The following table includes selected data for a share outstanding throughout
the period and other performance information derived from the financial
statements.
<TABLE>
<CAPTION>
FOR THE SIX MONTH PERIOD ENDED
APRIL 30, 1996
(UNAUDITED)
----------------------------------------------
CLASS A CLASS C EAGLE SHARES
EAGLE SHARES SHARES++ SHARES++ 1995+*
------------ -------------- -------------- ------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF THE PERIOD........................ $20.79 $21.11 $21.11 $ 20.00
------ ------ ------ ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(a)............................... 0.04 0.08 0.03 (.03)
Net realized and unrealized gain on investments............... 2.29 1.50 1.49 0.82
------ ------ ------ ------------
Total from investment operations................................ 2.33 1.58 1.52 0.79
------ ------ ------ ------------
LESS DISTRIBUTIONS:
Dividends from net investment income.......................... (0.01) -- -- --
Distributions from net realized gain on investments........... (0.47) -- -- --
------ ------ ------ ------------
Total Distributions............................................. (0.48) -- -- --
------ ------ ------ ------------
NET ASSET VALUE, END OF THE PERIOD.............................. $22.64 $22.69 $22.63 $ 20.79
========== ============ ============ ==========
TOTAL RETURN (%)(C)(D).......................................... 11.39 7.49 7.20 3.95
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses, net, to average daily net
assets(a)................................................... 2.60% 1.97% 2.72% 2.60% (b)
Ratio of net investment income (loss) to average daily net
assets...................................................... 0.35% 0.97% 0.37% (0.33%)(b)
Portfolio turnover rate(c).................................... 9% 9% 9% 61%
Average commission rate on portfolio transactions............. $.0457 $.0457 $.0457 --
Net assets, end of period ($ millions)........................ $ 18 $ 2 $ 1 $ 10
</TABLE>
- ---------------
* Per share amounts have been calculated using the monthly average share
method.
+ For the period May 1, 1995 (commencement of operations) to October 31, 1995.
++ For the period December 27, 1995 (Commencement of Class A and Class C
Shares) to April 30, 1996.
(a) Excludes management fees waived and expenses reimbursed by the Manager in
fiscal 1995 of $.17 per share. The operating expense ratio including such
items would be 5.09% (annualized).
(b) Annualized.
(c) Not annualized.
(d) Calculated without the imposition of front-end or contingent deferred sales
charges.
S E M I A N N U A L R E P O R T
11
<PAGE> 12
EAGLE INTERNATIONAL EQUITY PORTFOLIO
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 consisting of four separate investment
Portfolios, the Eagle International Equity Portfolio (the "Fund"), the
Small Cap Stock Fund, the Value Equity Fund and the Growth Equity Fund.
The Fund currently issues Eagle Class, Class A and Class C Shares. The
Eagle Class of shares are subject to certain minimum investment
requirements and are sold without any sales charge. 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 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 financial statements for the Small Cap Fund, Growth Equity
Fund and Value Equity Fund are presented separately. 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, 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. Securities that are quoted in
a foreign currency will be valued daily in U.S. dollars at the foreign
currency exchange rates prevailing at the time the Fund calculates its
daily net asset value per share. Although the Fund values its assets in
U.S. dollars on a daily basis, it does not intend to convert holdings of
foreign currencies into U.S. dollars on a daily basis. 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.
Foreign Currency Transactions: The books and records of the Fund are
maintained in U.S. dollars. Foreign currency transactions are translated
into U.S. dollars on the following basis: (i) market value of investment
securities, other assets and other liabilities at the daily rates of
exchange, and (ii) purchases and sales of investment securities,
dividend and interest income and certain expenses at the rates of
exchange prevailing on the respective dates of such transactions. The
Fund does not isolate that portion of gains and losses on investments
which is due to change in foreign exchange rates from that which is due
to changes in market prices of the investments. Such fluctuations are
included with the net realized and unrealized gains and losses from
investments. Net realized gain (loss) and unrealized appreciation
(depreciation) from currency transactions include gains and losses
between trade and settlement date on securities transactions, gains and
losses arising from the sales of foreign currency and gains and losses
between the ex and payment dates on dividends, interest, and foreign
withholding taxes.
Financial Investments with Off-Balance Sheet Risk: At April 30, 1996,
the Fund had outstanding forward foreign currency exchange contracts
("forward contracts") in order to hedge against changes in future
foreign exchange rates and enhance return. Forward contracts involve
elements of market risk in excess of the amount reflected in the
Statement of Assets and Liabilities. The Fund bears the risk of an
unfavorable change in the foreign exchange rate underlying the forward
contract.
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.
S E M I A N N U A L R E P O R T
12
<PAGE> 13
EAGLE INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
(CONTINUED)
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.
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 reclassifications among certain capital accounts
without impacting the net asset value of the Fund.
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.
Note 2: FUND SHARES. At April 30, 1996, there was an unlimited number of shares
of beneficial interest of no par value authorized. Transactions in Eagle
Shares of the Fund during the six month period ended April 30, 1996 and
from May 1, 1995 to October 31, 1995 were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD MAY 1,
FOR THE SIX MONTH 1995 (COMMENCEMENT OF
PERIOD ENDED APRIL 30, OPERATIONS) TO OCTOBER
1996 (UNAUDITED) 31, 1995
---------------------- -----------------------
EAGLE SHARES SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------ ------- ---------- ------- -----------
<S> <C> <C> <C> <C>
Shares sold................................................. 325,101 $6,981,055 493,157 $10,046,244
Shares issued on reinvestment of distributions.............. 11,917 251,562 -- --
Shares redeemed............................................. (5,381) (116,223) (13,644) (283,251)
------- ---------- ------- -----------
Net increase................................................ 331,637 $7,116,394 479,513 $ 9,762,993
========== ===========
Shares outstanding:
Beginning of period....................................... 479,563 50
------- -------
End of period............................................. 811,200 479,563
======= =======
</TABLE>
Transactions in Class A Shares of the Fund and from December 27, 1995
(commencement of Class A Shares) to April 30, 1996 were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD DECEMBER
27, 1995 (COMMENCEMENT OF
CLASS A SHARES) TO APRIL
30, 1996
(UNAUDITED)
--------------------------
CLASS A SHARES SHARES AMOUNT
--------------------------------------------------------------------------------- ------- ----------
<S> <C> <C>
Shares sold...................................................................... 75,775 $1,648,334
Shares issued on reinvestment of distributions................................... -- --
Shares redeemed.................................................................. (1,040) (23,194)
------- ----------
Net increase..................................................................... 74,735 $1,625,140
==========
Shares outstanding:
Beginning of period............................................................ --
-------
End of period.................................................................. 74,735
=======
</TABLE>
S E M I A N N U A L R E P O R T
13
<PAGE> 14
EAGLE INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
(CONTINUED)
Transactions in Class C Shares of the Fund from December 27, 1995
(commencement of Class C Shares) to April 30, 1996 were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD DECEMBER
27, 1995 (COMMENCEMENT
OF CLASS C SHARES) TO
APRIL 30, 1996
(UNAUDITED)
------------------------
CLASS C SHARES SHARES AMOUNT
-------------------------------------------------------------------------------------- ------- --------
<S> <C> <C>
Shares sold........................................................................... 22,345 $486,096
Shares issued on reinvestment of distributions........................................ -- --
Shares redeemed....................................................................... -- --
------- --------
Net increase.......................................................................... 22,345 $486,096
========
Shares outstanding:
Beginning of period.................................................................. --
-------
End of period........................................................................ 22,345
=======
</TABLE>
Note 3: PURCHASES AND SALES OF SECURITIES. For the six month period ended April
30, 1996, purchases and sales of investment securities (excluding
repurchase agreements and short term obligations) aggregated $9,954,339
and $1,179,908, respectively.
Note 4: MANAGEMENT, SUBADVISORY, DISTRIBUTION, SHAREHOLDER SERVICING AGENT AND
TRUSTEES' FEES. Under the Fund's Investment Advisory and Administration
Agreement with Eagle Asset Management, Inc. ( the "Manager"), the Fund
agrees to pay to the Manager a fee equal to an annualized rate of 1.00%
of the Fund's average daily 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. Currently, the Manager has voluntarily agreed
to waive its fee to the extent that Fund operating expenses exceed 2.60%
on an annual basis of the Fund's average daily net assets. This
agreement is more restrictive than any state expense limitation. Under
this agreement, management fees and expenses reimbursed totalled $78,498
for the period ended April 30, 1996. If total Fund expenses fall below
the expense limitation agreed to by the Manager before the end of the
year ending October 31, 1998, the Fund may be required to pay the
Manager a portion or all of the waived management fee. In addition, the
Fund may be required to pay the Manager a portion or all of the
management fees waived of $32,303 for the year ended October 31, 1995,
if total Fund expenses fall below the annual expense limitations before
the end of the year ending October 31, 1997.
The Manager has entered into an agreement with Martin Currie, Inc., a
New York Corporation, (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 average
daily net assets on the first $100 million of assets and .40%
thereafter without regard to any reduction due to the imposition of
expense limitations.
Heritage Asset Management, Inc. ("Heritage"), an affiliate of Eagle, is
the Dividend Paying and Shareholder Servicing Agent for the Fund.
Heritage also may provide certain administrative services for the Fund
and may receive a fee from Eagle for performing these administrative
services.
Pursuant to the Class A Distribution Plan adopted in accordance with
Rule 12b-1 of the Investment Company Act of 1940, at 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 Eagle Class and Class C Distribution Plans
the Fund may pay the Distributor a fee equal to 1.00% of the average
daily net assets for each Class. 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. The Manager, Heritage and
Distributor, 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 that are advised by Heritage (collectively referred
to as the Heritage funds). Each Trustee of the Heritage mutual funds
that is not an interested person of the Manager receives an annual fee
of $8,000, an additional fee of $2,000 for each combined quarterly
meeting of the Heritage mutual funds attended and $1,000 for each
special Trustees meeting attended. Trustees' fees and expenses are paid
equally by each of the Heritage funds.
S E M I A N N U A L R E P O R T
14
<PAGE> 15
HERITAGE SERIES TRUST-EAGLE INTERNATIONAL EQUITY PORTFOLIO 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
HIGH YIELD BOND FUND
INTERMEDIATE GOVERNMENT FUND
- HERITAGE SERIES TRUST
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. Read the Prospectus carefully before you invest in any of the
funds.
<PAGE> 16
[LOGO]
HERITAGE
- --------------------------
SERIES TRUST(TM)
- --------------------------
EAGLE INTERNATIONAL EQUITY
PORTFOLIO
- --------------------------
A mutual fund
- --------------------------
seeking long-term
- --------------------------
capital appreciation
- --------------------------
- --------------------------
- --------------------------
- --------------------------
SEMIANNUAL REPORT
(Unaudited) and Investment
Performance Review for the
Period From November 16, 1995
(Commencement of Operations) to
APRIL 30, 1996
A member of the
Heritage Family of Mutual Funds(TM)
Heritage Series Trust-Eagle International Equity Portfolio
P.O. Box 33022
St. Petersburg, FL 33733
- -----------------------------------------
Address Change Requested
Semiannual Report
INVESTMENT ADVISER
Eagle Asset Management, Inc.
P.O. Box 10520
St. Petersburg, FL 33733
(800) 237-3101
SHAREHOLDER SERVICING AGENT/ADMINISTRATOR
Heritage Asset Management, Inc.
P.O. Box 33022
St. Petersburg, FL 33733
(800) 421-4184
DIRECTORS
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-Eagle International Equity Portfolio. It may also be used as sales
literature when preceded or accompanied by a prospectus.
