HERITAGE SERIES TRUST
485BPOS, 1996-02-28
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<PAGE>
       As filed with the Securities and Exchange Commission on February 27, 1996
                                                       Registration No. 33-57986
     --------------------------------------------------------------------------
      
                          SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C.  20549
                               -----------------------
                                      FORM N-1A

               REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933     [   ]

                               Pre-Effective Amendment No.  ______         [   ]

                               Post-Effective Amendment No. __11__         [ X ]

                                       and/or

           REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [   ]

                               Amendment No. __12__                        [ X ]
                          (Check appropriate box or boxes.)

                                HERITAGE SERIES TRUST
                  (Exact name of Registrant as specified in charter)

                                880 Carillon Parkway
                               St. Petersburg, FL 33716
                 (Address of Principal Executive Office) (Zip Code)

          Registrant's Telephone Number, including Area Code: (813) 573-3800

                             STEPHEN G. HILL, PRESIDENT
                                880 Carillon Parkway
                               St. Petersburg, FL 33716
                       (Name and Address of Agent for Service)

                                       Copy to:
                             CLIFFORD J. ALEXANDER, ESQ.
                             Kirkpatrick & Lockhart LLP
                           1800 Massachusetts Avenue, N.W.
                               Washington, D.C.  20036

     It is proposed that this filing will become effective on March 1, 1996
     pursuant to paragraph (b)(1) of Rule 485.

     Registrant has filed a notice pursuant to Rule 24f-2 under the Investment
     Company Act of 1940, as amended, on or about November 14, 1995.


                                 Page 1 of ____ Pages
                          Exhibit Index Appears on Page____
<PAGE>








                                HERITAGE SERIES TRUST

                          CONTENTS OF REGISTRATION STATEMENT


     This registration document is comprised of the following:

                      Cover Sheet

                      Contents of Registration Statement

                      Cross Reference Sheet

                      Prospectus - Small Cap Stock Fund

                      Prospectus - Value Equity Fund

                      Statement  of  Additional Information  -  Small  Cap Stock
                      Fund and Value Equity Fund

                      Part C of Form N-1A

                      Signature Page

                      Exhibits
<PAGE>






                               HERITAGE SERIES TRUST -

                                SMALL CAP STOCK FUND
                                  VALUE EQUITY FUND

                           FORM N-1A CROSS-REFERENCE SHEET

       PART A ITEM NO.                     PROSPECTUS CAPTION
       ---------------                     ------------------

         1.   Cover Page                   Cover Page

         2.   Synopsis                     Total Fund Expenses

         3.   Condensed Financial          Financial  Highlights;  Performance
              Information                  Information

         4.   General Description of       Cover Page; About the Trust and the
              Registrant                   Fund;     Investment    Objectives,
                                           Policies and Risk Factors

         5.   Management of the fund       Cover Page; Management of the Fund

        5A.   Management's Discussion      Inapplicable
              of Fund Performance

         6.   Capital Stock and Other      Cover Page; About the Trust and the
              Securities                   Fund; Differences Between A  Shares
                                           and  C  Shares;  Management  of the
                                           Fund; Dividends and Other Distribu-
                                           tions;      Taxes;      Shareholder
                                           Information

         7.   Purchase of Securities       Net Asset Value; How to Buy
              Being Offered                Shares;      Minimum     Investment
                                           Required/Accounts      With     Low
                                           Balances;    Investment   Programs;
                                           Alternative  Purchase  Plans;  What
                                           Class  A  Shares  Will  Cost;  What
                                           Class    C   Shares    Will   Cost;
                                           Distribution Plans 

         8.   Redemption or Repurchase     Minimum     Investment    Required/
                                           Accounts With Low Balances; How  to
                                           Redeem  Shares;  Receiving Payment;
                                           Exchange Privilege

         9.   Pending Legal Proceedings    Inapplicable
<PAGE>






                                           STATEMENT OF ADDITIONAL
       PART B ITEM NO.                       INFORMATION CAPTION
       ---------------                     ------------------------

        10.   Cover Page                   Cover Page

        11.   Table of Contents            Table of Contents

        12.   General Information and      General Information
              History

        13.   Investment Objectives and    Investment  Information; Investment
              Policies                     Limitations

        14.   Management of the Fund       Management of the Funds

        15.   Control Persons and          Inapplicable
              Principal Holders of
              Securities

        16.   Investment Advisory and      Management of the Funds; Investment
              Other Services               Adviser  and  Administrator,   Sub-
                                           advisers;  Distribution  of Shares;
                                           Administration of the Funds

        17.   Brokerage Allocation         Brokerage Practices

        18.   Capital Stock and Other      General    Information;   Potential
              Securities                   Liability

        19.   Purchase, Redemption and     Net  Asset Value; Investing  in the
              Pricing of Securities        Funds;  Redeeming  Shares; Exchange
              Being Offered                Privilege

        20.   Tax Status                   Taxes

        21.   Underwriters                 Distribution of Shares

        22.   Performance Data             Performance Information

        23.   Financial Statements         Financial Statements



     PART C
     ------

              Information required to  be included in Part C  is set forth under
     the   appropriate  item,  so  numbered  in  Part  C  of  this  Registration
     Statement.
<PAGE>






     
<PAGE>   1
 
                         HERITAGE SERIES TRUST LOGO
 
                             SMALL CAP STOCK FUND
 
     Heritage Series Trust is a mutual fund offering its shares in separate
investment portfolios. This Prospectus relates to the Small Cap Stock Fund (the
"Fund"), which seeks long-term capital appreciation by investing principally in
the equity securities of companies with small market capitalization that the
Fund's investment subadvisers believe are undervalued and therefore offer
above-average potential for long-term capital appreciation. For risks inherent
in investing in the Fund, see "Investment Objective, Policies and Risk Factors."
The Fund offers two classes of shares, Class A shares (sold subject to a
front-end sales load) and Class C shares (sold subject to a contingent deferred
sales load).
 
     This Prospectus contains information that should be read before investing
in the Fund and should be kept for future reference. A Statement of Additional
Information dated March 1, 1996 relating to the Fund has been filed with the
Securities and Exchange Commission and is incorporated by reference in this
Prospectus. A copy of the Statement of Additional Information is available free
of charge and shareholder inquiries can be made by writing to Heritage Asset
Management, Inc. or by calling (800)421-4184.
 
FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY,
THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY
OTHER AGENCY.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
   EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION NOR HAS THE
     SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
           COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
              PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
                              A CRIMINAL OFFENSE.
 
                     HERITAGE ASSET MANAGEMENT, INC. LOGO
                       Registered Investment Advisor--SEC
 
                              880 Carillon Parkway
                         St. Petersburg, Florida 33716
                                 (800) 421-4184
 
                         Prospectus Dated March 1, 1996
<PAGE>   2
 
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                   <C>
GENERAL INFORMATION.................................................    1
  About the Trust and the Fund......................................    1
  Total Fund Expenses...............................................    1
  Financial Highlights..............................................    3
  Differences Between A Shares and C Shares.........................    3
  Investment Objective, Policies and Risk Factors...................    4
  Net Asset Value...................................................    6
  Performance Information...........................................    6
INVESTING IN THE FUND...............................................    7
  How to Buy Shares.................................................    7
  Minimum Investment Required/Accounts With Low Balances............    8
  Investment Programs...............................................    8
  Alternative Purchase Plans........................................    9
  What Class A Shares Will Cost.....................................   10
  What Class C Shares Will Cost.....................................   12
  How to Redeem Shares..............................................   13
  Receiving Payment.................................................   14
  Exchange Privilege................................................   15
MANAGEMENT OF THE FUND..............................................   16
SHAREHOLDER AND ACCOUNT POLICIES....................................   19
  Dividends and Other Distributions.................................   19
  Distribution Plans................................................   19
  Taxes.............................................................   20
  Shareholder Information...........................................   20
</TABLE>
<PAGE>   3
 
                              GENERAL INFORMATION
 
ABOUT THE TRUST AND THE FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     Heritage Series Trust (the "Trust") was established as a Massachusetts
business trust under a Declaration of Trust dated October 28, 1992. The Trust is
an open-end diversified management investment company that currently offers its
shares in four separate investment portfolios, the Small Cap Stock Fund (the
"Fund"), the Value Equity Fund, the Growth Equity Fund and the Eagle
International Equity Portfolio. The Fund is designed for individuals,
institutions and fiduciaries. The Fund offers two classes of shares, Class A
shares ("A shares") and Class C shares ("C shares"). The Fund requires a minimum
initial investment of $1,000, except for certain retirement accounts and
investment plans for which lower limits may apply. See "Investing in the Trust."
This Prospectus relates exclusively to the Fund. To obtain a Prospectus for the
Trust's other portfolios, please call (800) 421-4184.
 
TOTAL FUND EXPENSES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     Shown below are all Class A expenses incurred by the Fund during its 1995
fiscal year, adjusted to reflect current voluntary expense limitations. Class A
annual operating expenses are shown as an annualized percentage of fiscal 1995
average daily net assets. Because C shares were not offered for sale prior to
April 3, 1995, Class C annual operating expenses are based on estimated 1996
expenses. Shareholder transaction expenses for both classes are expressed as a
percentage of maximum public offering price, cost per transaction or as
otherwise noted.
 
<TABLE>
<CAPTION>
                                                      CLASS A   CLASS C
                                                      -------   -------
    <S>                                               <C>       <C>        <C>
    SHAREHOLDER TRANSACTION EXPENSES
    Sales load "charge" on purchases................     4.75%     None
    Contingent deferred sales load (as a percentage                        (declining to 0%
      of original purchase price or redemption                             after the first
      proceeds, as applicable)......................     None      1.00%   year)
    Wire redemption fee.............................   $ 5.00    $ 5.00

    ANNUAL FUND OPERATING EXPENSES
    Management Fee (after fee waiver)...............     0.92%     0.92%
    12b-1 Distribution Fee..........................     0.25%     1.00%
    Other Expenses..................................     0.63%     0.63%
                                                      -------   -------
    Total Fund Operating Expenses (after fee
      waiver).......................................     1.80%     2.55%
                                                       ======    ======
</TABLE>
 
     The Fund's manager, Heritage Asset Management, Inc. ("the "Manager"),
voluntarily will waive its fees and, if necessary, reimburse the Fund to the
extent that Class A annual operating expenses exceed 1.80% and to the extent
that Class C annual operating expenses exceed 2.55% of the Fund's average daily
net assets attributable to that class beginning March 1, 1996. Absent such fee
waiver, the management fee would be 1.00% and total Fund operating expenses
would be 1.88% for Class A and 2.63% for Class C. Although the Fund is
authorized to pay annual Rule 12b-1 distribution fees on behalf of A shares of
up to .35% of the average daily net assets attributable to that class, the
Trust's Board of Trustees (the "Board of Trustees" or the "Board") has
authorized annual payments of only .25% of Class A average daily net assets. Due
to the
 
                                        1
<PAGE>   4
 
imposition of Rule 12b-1 distribution fees, it is possible that long-term
shareholders of the Fund may pay more in total sales charges than the economic
equivalent of the maximum front-end sales load permitted by the rules of the
National Association of Securities Dealers, Inc.
 
     The impact of Fund operating expenses on earnings is illustrated in the
example below assuming a hypothetical $1,000 investment, a 5% annual rate of
return, and a redemption at the end of each period shown.
 
<TABLE>
<CAPTION>
                                                 1 YEAR     3 YEARS     5 YEARS     10 YEARS
                                                 ------     -------     -------     --------
    <S>                                          <C>        <C>         <C>         <C>
    Total Operating Expenses -- Class A........   $ 66       $ 105       $ 146        $260
    Total Operating Expenses -- Class C........   $ 36       $  80       $ 137        $296
</TABLE>
 
     The impact of Fund operating expenses on earnings is illustrated in the
example below assuming a hypothetical $1,000 investment, a 5% annual rate of
return, and no redemption at the end of each period shown.
 
<TABLE>
<CAPTION>
                                                 1 YEAR     3 YEARS     5 YEARS     10 YEARS
                                                 ------     -------     -------     --------
    <S>                                          <C>        <C>         <C>         <C>
    Total Operating Expenses -- Class A........   $ 66       $ 105       $ 146        $260
    Total Operating Expenses -- Class C........   $ 26       $  80       $ 137        $296
</TABLE>
 
     This is an illustration only and should not be considered a representation
of future expenses. Actual expenses and performance may be greater or less than
that shown above. The purpose of the above tables is to assist investors in
understanding the various costs and expenses that will be borne directly or
indirectly by Fund shareholders. For a further discussion of these costs and
expenses, see "Management of the Fund" and "Distribution Plans."
 
                                        2
<PAGE>   5
 
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     The following table shows important financial information for an A share
and a C share of the Fund outstanding for the periods indicated, including net
investment income, net realized and unrealized gain on investments, and certain
other information. It has been derived from financial statements that have been
audited by Coopers & Lybrand L.L.P., independent accountants, whose report
thereon is included in the Statement of Additional Information("SAI"), which may
be obtained by calling the Fund at the telephone number on the front page of
this Prospectus.
 
<TABLE>
<CAPTION>
                                                                   CLASS A
                                                                FOR THE YEARS
                                                              ENDED OCTOBER 31,            CLASS C
                                                           ------------------------        -------
                                                           1995*     1994    1993+         1995++
                                                           ------   ------   ------        -------
<S>                                                        <C>      <C>      <C>           <C>
NET ASSET VALUE, BEGINNING OF THE PERIOD.................  $16.20   $15.57   $14.29        $ 15.67
                                                           ------   ------   ------        -------
INCOME FROM INVESTMENT OPERATIONS:
  Net investment income (loss)(a)........................     .02     (.01)    (.01)          (.02)
  Net realized and unrealized gain on investments........    3.62      .64     1.29           3.14
                                                           ------   ------   ------        -------
Total from investment operations.........................    3.64      .63     1.28           3.12
                                                           ------   ------   ------        -------
LESS DISTRIBUTIONS:
  Dividends from net investment income...................    (.01)      --       --             --
  Distributions from net realized gains..................    (.97)      --       --             --
                                                           ------   ------   ------        -------
  Total Distributions....................................    (.98)      --       --             --
                                                           ------   ------   ------        -------
NET ASSET VALUE, END OF THE PERIOD.......................  $18.86   $16.20   $15.57        $ 18.79
                                                           ======   ======   ======        =======
TOTAL RETURN (%)(C)......................................   23.97     4.05     8.96          19.91

RATIOS (%)/SUPPLEMENTAL DATA:
  Ratio of operating expenses, net, to average daily net
     assets(a)...........................................    1.88     1.91     2.00(b)        2.36(b)
  Ratio of net investment income (loss) to average daily
     net assets..........................................     .15     (.07)    (.15)(b)       (.46)(b)
  Portfolio turnover rate................................      89       95       97(b)          89
  Net assets, end of period ($millions)..................      57       42       40              4
</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 October 31, 1995.
* Eagle Asset Management, Inc. became an additional subadviser of the Fund on
August 7, 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 reflect the imposition of a sales load. Not annualized for fiscal
1993 for A shares and fiscal 1995 for C shares.
 
DIFFERENCES BETWEEN A SHARES AND C SHARES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     The primary difference between the A shares and the C shares lies in their
initial sales load and contingent deferred sales load ("CDSL") structures and in
their ongoing expenses, including asset-based sales charges in the form of
distribution fees. These differences are summarized below. In addition, each
class may
 
                                        3
<PAGE>   6
 
bear differing amounts of certain class-specific expenses, such as transfer
agent fees, Securities and Exchange Commission ("SEC") registration fees, state
registration fees and expenses of administrative personnel and services. Each
class has distinct advantages and disadvantages for different investors, and
investors may choose the class that best suits their circumstances and
objectives. See "How to Buy Shares," "Alternative Purchase Plans," "With Class A
Shares Will Cost" and "What Class C Shares Will Cost."
 
<TABLE>
<CAPTION>
                                                 ANNUAL 12B-1 FEES
                                                 AS A % OF AVERAGE
                             SALES LOAD           DAILY NET ASSETS       OTHER INFORMATION
                       ----------------------  ----------------------  ----------------------
<S>                    <C>                     <C>                     <C>
A Shares               Maximum initial sales   Service fee of 0.25%;   Initial sales load
                       load of 4.75%           distribution fee of up  waived or reduced for
                                               to 0.10%*               certain purchases

C Shares               Maximum CDSL of 1% of   Service fee of 0.25%;   CDSL waived for
                       redemption proceeds;    distribution fee of up  certain types of
                       declining to zero       to 0.75%                redemptions
                       after 1 year
</TABLE>
 
- ---------------
 
* Class A 12b-1 fees currently are limited by the Board of Trustees to the 0.25%
service fee.
 
INVESTMENT OBJECTIVE, POLICIES AND RISK FACTORS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     The Fund's investment objective is long-term capital appreciation. The Fund
seeks to achieve this objective primarily through the purchase of equity
securities of companies, each of which has a total market capitalization of less
than $1 billion ("small capitalization companies"). Market capitalization is the
total value of a company's outstanding common stock. The Fund will invest in
securities of companies that appear to be undervalued in relation to their
long-term earning power or the asset value of their issuers and that have, in
the opinion of Eagle Asset Management, Inc. ("Eagle") or Awad & Associates
("Awad"), the Fund's investment subadvisers (collectively, the "Subadvisers"),
significant future growth potential. Securities may be undervalued because of
many factors, including market decline, poor economic conditions, tax-loss
selling or actual or anticipated unfavorable developments affecting the issuer
of the security. Any or all of these factors may provide buying opportunities at
attractive prices relative to the long-term prospects for the companies in
question. However, there can be no assurance that the Fund's investment
objective will be achieved. Fund shares will fluctuate in value as a result of
changes in the value of portfolio investments.
 
     The Fund invests primarily in common stocks, but also may invest in
preferred stocks, investment grade securities convertible into common stock and
warrants ("equity securities"). The Fund may purchase securities traded on
recognized securities exchanges and in the over-the-counter market. The Fund
normally invests at least 80% of its total assets in the equity securities of
companies each of which, at the time of purchase, has a total market
capitalization of less than $1 billion. By comparison, the mean market
capitalization for the companies in the Standard & Poor's 500 Composite Stock
Price Index, an unmanaged index of 500 widely held common stocks, is
approximately $9.5 billion as of January 31, 1996.
 
     The Fund may invest its remaining assets in American Depository Receipts,
U.S. Government securities, repurchase agreements or other short-term money
market instruments. The Fund also may invest up to 15% of its net assets in
illiquid securities. The Fund may purchase and sell a security without regard to
the length of time the security will be or has been held. Although the Fund will
not trade primarily for short-term profits, it
 
                                        4
<PAGE>   7
 
may make investments with potential for short-term appreciation when such action
is deemed desirable and in the best interest of shareholders. See "Brokerage
Practices" in the SAI.
 
     Convertible securities in which the Fund invests primarily are rated at
least investment grade by Standard & Poor's Ratings Services ("S&P") or Moody's
Investors Service, Inc. ("Moody's") or, if unrated, are deemed to be of
comparable quality by the applicable Subadviser. Debt securities rated in the
lowest category of investment grade securities are considered to have
speculative characteristics. The Fund may retain a security that subsequently
has been downgraded below investment grade if, in the applicable Subadviser's
opinion, it is in the Fund's best interest. Any such downgraded security shall
not be considered to be below investment grade for the purposes of the 5%
limitation discussed subsequently. The Fund also may invest up to 5% of its
total assets in convertible securities rated below investment grade by S&P or
Moody's (commonly referred to as junk bonds or lower-rated securities) or
unrated securities deemed to be below investment grade by the applicable
Subadviser. The price of lower-rated securities tends to be less sensitive to
interest rate changes than the price of higher-rated securities, but more
sensitive to adverse economic changes or individual corporate developments.
Securities rated below investment grade are deemed to be predominantly
speculative with respect to the issuer's capacity to pay interest and repay
principal and may involve major risk exposure to adverse conditions. See the SAI
for a discussion of the risks associated with these lower-rated securities and
the Appendix to the SAI for a description of corporate bond ratings by S&P and
Moody's.
 
     The Subadvisers currently believe that investments in small capitalization
companies may offer greater opportunities for growth of capital than investments
in larger, more established companies. Investing in smaller, newer issuers
generally involves greater risks than investing in larger, more established
issuers. Companies in which the Fund is likely to invest may have limited
product lines, markets or financial resources and may lack management depth. The
securities issued by such companies may have limited marketability and may be
subject to more abrupt or erratic market movements than securities of larger,
more established companies or the market averages in general. In addition, many
small capitalization companies may be in the early stages of development.
Accordingly, an investment in the Fund may not be appropriate for all investors.
 
     The Manager believes that short-term volatility may be reduced by
allocating the Fund's assets among multiple Subadvisers. While each Subadviser
will focus on investments in small capitalization companies, the different
investment disciplines employed by the Subadvisers may cause the portion of the
Fund's assets allocated to one Subadviser to have better or worse relative
performance than the other portion during certain market conditions. By
employing multiple disciplines, short-term volatility may be reduced while the
Fund participates in returns available from small capitalization companies. The
potential benefits of this multiple Subadviser approach may be partially
reduced, however, because there currently are only two Subadvisers and because
there may be significant overlap among the securities portfolios of each
Subadviser. See "Management of the Fund."
 
     For temporary defensive purposes during anticipated periods of general
market decline, the Fund may invest up to 100% of its net assets in money market
instruments, including securities issued or guaranteed by the U.S. Government,
its agencies or instrumentalities and repurchase agreements secured thereby, as
well as bank certificates of deposit and banker's acceptances issued by banks
having net assets of at least $1 billion as of the end of their most recent
fiscal year, high-grade commercial paper, and other long- and short-term debt
instruments that are rated A or higher by S&P or Moody's. For a description of
S&P and Moody's commercial paper and corporate debt ratings, see the Appendix to
the SAI.
 
                                        5
<PAGE>   8
 
     The Fund may enter into repurchase agreements with security dealers or
member banks of the Federal Reserve System. A repurchase agreement arises when a
buyer such as the Fund purchases a security and simultaneously agrees to resell
it to the vendor at an agreed-upon future date, normally one day or a few days
later. The resale price is greater than the purchase price, reflecting an
agreed-upon interest rate that is effective for the period the buyer's money is
invested in the security and that is related to the current market rate rather
than the coupon rate on the purchased security. Repurchase agreements permit the
Fund to keep all of its assets invested while retaining overnight flexibility in
pursuit of longer-term investments. The Board of Trustees has established
procedures, which periodically are reviewed by the Board, pursuant to which the
Fund's investment subadvisers will monitor the creditworthiness of the dealers
and banks with which the Fund enters into repurchase agreements.
 
     The Fund's investment objective is fundamental and may not be changed
without the vote of a majority of the outstanding voting securities of the Fund,
as defined in the Investment Company Act of 1940, as amended (the "1940 Act").
All policies of the Fund described in this Prospectus may be changed by the
Board of Trustees without shareholder approval. The SAI contains more detailed
information on the Fund's investment policies and risks.
 
NET ASSET VALUE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     The net asset values of A shares and C shares are calculated by dividing
the value of the total assets of the Fund attributable to that class, less
liabilities attributable to that class, by the number of shares of that class
outstanding. Shares are valued as of the close of regular trading on the New
York Stock Exchange ("Exchange") each day it is open. Fund securities are stated
at market value based on the last sales price as reported by the principal
securities exchange on which the securities are traded. If no sale is reported,
market value is based on the most recent quoted bid price. In the absence of a
readily available market quote, or if the Manager, or one of the Subadvisers
have reason to question the validity of market quotations they receive,
securities and other assets are valued using such methods as the Board of
Trustees believes would reflect fair value. Short-term investments that will
mature in 60 days or less are valued at amortized cost, which approximates
market value. The per share net asset value of A shares and C shares may differ
as a result of the different daily expense accruals applicable to each class.
For more information on the calculation of net asset value, see "Net Asset
Value" in the SAI.
 
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     Total return data of the A shares and C shares from time to time may be
included in advertisements about the Fund. Performance information is computed
separately for A shares and C shares in accordance with the methods described
below. Because C shares bear the expense of a higher distribution fee
attributable to the deferred sales load alternative, the performance of C shares
likely will be lower than that of A shares.
 
     Total return with respect to a class for the one-, five- and ten-year
periods or, if such periods have not yet elapsed, the period since the
establishment of that class through the most recent calendar quarter represents
the average annual compounded rate of return on an investment of $1,000 in that
class at the public offering price (in the case of A shares, giving effect to
the maximum initial sales load of 4.75% and, in the case of C shares, giving
effect to the deduction of any CDSL that would be payable). In addition, the
Fund also may advertise its total return in the same manner, but without taking
into account the initial sales load or CDSL. The Fund also may advertise total
return calculated without annualizing the return, and total return may be
 
                                        6
<PAGE>   9
 
presented for other periods. By not annualizing the returns, the total return
calculated in this manner simply will reflect the increase in net asset value
per A share and C share over a period of time, adjusted for dividends and other
distributions. A share and C share performance may be compared with various
indices.
 
     All data is based on the Fund's past investment results and does not
predict future performance. Investment performance, which will vary, is based on
many factors, including market conditions, the composition of the Fund's
investment portfolio and the Fund's operating expenses. Investment performance
also often reflects the risks associated with the Fund's investment objective
and policies. These factors should be considered when comparing the Fund's
investment results to those of other mutual funds and other investment vehicles.
Additional performance information is contained in the Fund's annual report,
which may be obtained, without charge, by contacting the Fund at (800) 421-4184.
For more information on investment performance, see the SAI.
 
                             INVESTING IN THE FUND
 
HOW TO BUY SHARES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     Shares of the Fund are offered continuously through the Fund's principal
underwriter, Raymond James & Associates, Inc. (the "Distributor"), and through
other participating dealers or banks that have dealer agreements with the
Distributor. The Distributor receives commissions consisting of that portion of
the sales load remaining after the dealer concession is paid to participating
dealers or banks. Such dealers may be deemed to be underwriters pursuant to the
Securities Act of 1933, as amended.
 
     Shares of the Fund may be purchased through a registered representative of
the Distributor, a participating dealer or a participating bank
("Representative") by placing an order for Fund shares with your Representative,
completing and signing the Account Application found in this Prospectus, and
mailing it along with your payment, within three business days.
 
     The Fund offers and sells two classes of shares, A shares and C shares. A
shares may be purchased at a price equal to their net asset value per share next
determined after receipt of an order, plus a sales load imposed at the time of
purchase. C shares may be purchased at a price equal to their net asset value
per share next determined after receipt of an order. A CDSL of 1% is imposed on
C shares if you redeem those shares within one year of purchase. When you place
an order for Fund shares, you must specify which class of shares you wish to
purchase. See "Alternative Purchase Plans."
 
     All purchase orders received by the Distributor prior to the close of
regular trading on the Exchange -- generally 4:00 p.m., Eastern time -- will be
executed at that day's offering price. Purchase orders received by your
Representative prior to the close of regular trading on the Exchange and
transmitted to the Distributor before 5:00 p.m. Eastern time on that day also
will receive that day's offering price. Otherwise, all purchase orders accepted
after the offering price is determined will be executed at the offering price
determined as of the close of regular trading on the Exchange on the next
trading day. See "What Class A Shares Will Cost" and "What Class C Shares Will
Cost."
 
     You may purchase shares of the Fund directly by completing and signing the
Account Application found in the back of this Prospectus and mailing it, along
with your payment, to Heritage Series Trust -- Small Cap Stock Fund, c/o
Shareholder Services, Heritage Asset Management, Inc., P.O. Box 33022, St.
Petersburg, FL 33733.
 
                                        7
<PAGE>   10
 
     Shares may be purchased with Federal funds (a commercial bank's deposit
with the Federal Reserve Bank that can be transferred to another member bank on
the same day) sent by Federal Reserve or bank wire to State Street Bank and
Trust Company, Boston, Massachusetts, ABA #011-000-028, Account #3196-769-8.
Wire instructions should include (1) the name of the Fund, (2) the class of
shares to be purchased, (3) your account number as assigned by the Fund, and (4)
your name. To open a new account with Federal funds or by wire, you must contact
the Manager or your Representative to obtain a Heritage mutual fund account
number. Commercial banks may elect to charge a fee for wiring funds to State
Street Bank and Trust Company. For more information on "How to Buy Shares," see
"Investing in the Fund" in the SAI.
 
MINIMUM INVESTMENT REQUIRED/ACCOUNTS WITH LOW BALANCES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     Except as provided under "Investment Programs," the minimum initial
investment in the Fund is $1,000, and a minimum account balance of $500 must be
maintained. These minimum requirements may be waived at the discretion of the
Manager. In addition, initial investments in Individual Retirement Accounts
("IRAs") may be reduced or waived under certain circumstances. Contact the
Manager or your Representative for further information.
 
     Due to the high cost of maintaining accounts with low balances, it is
currently the Fund's policy to redeem Fund shares in any account if the account
balance falls below the required minimum value of $500, except for retirement
accounts. The shareholder will be given 30 days' notice to bring the account
balance to the minimum required or the Fund may redeem shares in the account and
pay the proceeds to the shareholder. The Fund does not apply this minimum
account balance requirement to accounts that fall below the minimum due to
market fluctuation.
 
INVESTMENT PROGRAMS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     A variety of automated investment options are available for the purchase of
Fund shares. These plans provide for automatic monthly investments of $50 or
more through various methods described below. You may change the amount to be
invested automatically or may discontinue this service at any time without
penalty. If you discontinue this service before reaching the required account
minimum, the account must be brought up to the minimum in order to remain open.
Shareholders desiring this service should complete the appropriate application
available from the Manager. You will receive a periodic confirmation of all
activity for your account.
 
AUTOMATIC INVESTMENT OPTIONS:
 
1. Bank Draft Investing -- You may authorize the Manager to process a monthly
   draft from your personal checking account for investment into the Fund. The
   draft is returned by your bank the same way a canceled check is returned.
 
2. Payroll Direct Deposit -- If your employer participates in a direct deposit
   program (also known as ACH Deposits) you may have all or a portion of your
   payroll directed to the Fund. This will generate a purchase transaction each
   time you are paid by your employer. Your employer will report to you the
   amount sent from each paycheck.
 
                                        8
<PAGE>   11
 
3. Government Direct Deposit -- If you receive a qualifying periodic payment
   from the U.S. Government or other agency that participates in Direct Deposit,
   you may have all or part of each check directed to purchase shares of the
   Fund. The U.S. Government or agency will report to you all payments made.
 
4. Automatic Exchange -- If you own shares in another Heritage mutual fund
   advised or administered by the Manager ("Heritage Mutual Fund"), you may
   elect to have a preset amount redeemed from that fund and exchanged into the
   corresponding class of shares of this Fund. You will receive a statement from
   the other Heritage Mutual Fund confirming the redemption.
 
     You may change or terminate any of the above options at any time.
 
RETIREMENT PLANS:
 
     Shares of the Fund may be purchased as an investment for Heritage IRA
plans. In addition, shares may be purchased as an investment for self-directed
IRAs, defined contribution plans, Simplified Employee Pension Plans ("SEPs") and
other retirement plans.
 
     HERITAGE IRA.  Individuals who earn compensation and who have not reached
age 70 1/2 before the close of the year generally may establish a Heritage IRA.
You may make limited contributions to a Heritage IRA through the purchase of
shares of the Fund and/or other Heritage Mutual Funds. The Internal Revenue Code
of 1986, as amended (the "Code"), limits the deductibility of IRA contributions
to taxpayers who are not active participants (and whose spouses are not active
participants) in employer-provided retirement plans or who have adjusted gross
income below certain levels. Nevertheless, the Code permits other individuals to
make nondeductible IRA contributions up to $2,000 per year (or $2,250, if such
contributions also are made for a nonworking spouse and a joint return is
filed). A Heritage IRA also may be used for certain "rollovers" from qualified
benefit plans and from Section 403(b) annuity plans. For more detailed
information on the Heritage IRA, please contact the Manager.
 
     Fund shares also may be used as the investment medium for qualified plans
(defined benefit or defined contribution plans established by corporations,
partnerships or sole proprietorships). Contributions to qualified plans may be
made (within certain limits) on behalf of the employees, including
owner-employees, of the sponsoring entity.
 
     OTHER RETIREMENT PLANS.  Multiple participant payroll deduction retirement
plans also may purchase A shares of any Heritage Mutual Fund at a reduced sales
load on a monthly basis during the 13-month period following such a plan's
initial purchase. The sales load applicable to an initial purchase of A shares
will be that normally applicable under the schedule of sales loads set forth in
this Prospectus to an investment 13 times larger than such initial purchase. The
sales load applicable to each succeeding monthly purchase of A shares will be
that normally applicable, under such schedule, to an investment equal to the sum
of (1) the total purchase previously made during the 13-month period and (2) the
current month's purchase multiplied by the number of months (including the
current month) remaining in the 13-month period. Sales loads previously paid
during such period will not be adjusted retroactively on the basis of later
purchases. Multiple participant payroll deduction retirement plans may purchase
C shares at any time.
 
ALTERNATIVE PURCHASE PLANS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     The alternative purchase plans offered by the Fund enable you to choose the
class of shares that you believe will be most beneficial given the amount of
your intended purchase, the length of time you expect to
 
                                        9
<PAGE>   12
 
hold the shares and other circumstances. You should consider whether, during the
anticipated length of your intended investment in the Fund, the accumulated
continuing distribution and service fees plus the CDSL on C shares would exceed
the initial sales load plus accumulated service fees on A shares purchased at
the same time. Another factor to consider is whether the potentially higher
yield of A shares due to lower ongoing charges will offset the initial sales
load paid on such shares. Representatives may receive different compensation for
sales of A shares than sales of C shares.
 
     If you purchase sufficient shares to qualify for a reduced sales load, you
may prefer to purchase A shares because similar reductions are not available on
the C shares. For example, if you intend to invest more than $1,000,000 in
shares of the Fund, you should purchase A shares. Moreover, all A shares are
subject to a lower 12b-1 fee and, accordingly, are expected to pay
correspondingly higher dividends on a per share basis. If your purchase will not
qualify for a reduced sales load, you still may wish to purchase A shares if you
expect to hold your shares for an extended period of time because, depending on
the number of years you hold the investment, the continuing distribution and
service fees on C shares would eventually exceed the initial sales load plus the
continuing service fee on A shares during the life of your investment. However,
because initial sales loads are deducted at the time of purchase, not all of the
purchase payment for A shares is invested initially.
 
     You might determine that it would be more advantageous to purchase C shares
in order to have all of your purchase payment invested initially. However, your
investment would remain subject to continuing distribution and service fees and,
for a one year period, be subject to a CDSL. For example, based on current fees
and expenses for the Fund and the maximum A sales load, you would have to hold A
shares approximately seven years before the accumulated distribution and service
fees on the C shares would exceed the initial sales load plus the accumulated
service fees on the A shares.
 
WHAT CLASS A SHARES WILL COST
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     Class A shares are sold on each day on which the Exchange is open. A shares
are sold at their next determined net asset value plus a sales load as described
below.
 
<TABLE>
<CAPTION>
                                              SALES LOAD AS A PERCENTAGE OF
                                            ----------------------------------
                                                                NET AMOUNT       DEALER CONCESSION
                                                                 INVESTED        AS PERCENTAGE OF
            AMOUNT OF PURCHASE              OFFERING PRICE   (NET ASSET VALUE)   OFFERING PRICE(1)
- ------------------------------------------  --------------   -----------------   -----------------
<S>                                         <C>              <C>                 <C>
Less than $25,000.........................       4.75%              4.99%               4.25%
$25,000-$49,999...........................       4.25%              4.44%               3.75%
$50,000-$99,999...........................       3.75%              3.90%               3.25%
$100,000-$249,999.........................       3.25%              3.36%               2.75%
$250,000-$499,999.........................       2.50%              2.56%               2.00%
$500,000-$999,999.........................       1.75%              1.78%               1.25%
$1,000,000 and over.......................       1.00%              1.01%               0.75%
</TABLE>
 
(1) During certain periods, the Distributor may pay 100% of the sales load to
    participating dealers. Otherwise, it will pay the Dealer Concession shown
    above.
 
     Class A shares may be sold at net asset value without any sales load to the
Manager and the Subadvisers; current and retired officers and Trustees of the
Trust; directors, officers and full-time employees of the Manager, subadviser of
any Heritage Mutual Fund, Distributor and their affiliates; registered
representatives of broker-dealers that are parties to dealer agreements with the
Distributor (or financial institutions that have
 
                                       10
<PAGE>   13
 
arrangements with such broker-dealers); directors, officers and full-time
employees of banks that are parties to agency agreements with the Distributor,
and all such persons' immediate relatives and their beneficial accounts. In
addition, the American Psychiatric Association (the "APA Group") has entered
into an agreement with the Distributor that allows its members to purchase A
shares at a sales load equal to two-thirds of the percentages in the above
table. The Dealer Concession also will be adjusted in a like manner. Members of
the APA Group also are eligible to purchase A shares at net asset value in
amounts equal to the value of shares redeemed from other mutual funds that were
purchased under reduced sales load programs available to their organization. A
shares also may be purchased without sales loads by investors who participate in
certain broker-dealer wrap fee investment programs.
 
     Class A shares may be purchased at net asset value by trust companies and
bank trust departments for funds over which they exercise exclusive
discretionary authority and that are held in a fiduciary, agency, advisory,
custodial or similar capacity. Such purchases are subject to minimum
requirements with respect to amount of purchase. Currently, the minimum purchase
required is $1,000,000, which may be invested over a period of 13 months. The
minimum may be changed from time to time by the Distributor. The minimum may be
aggregated between A shares of the Fund and A shares of any other Heritage
Mutual Fund that would be subject to a sales load. Cities, counties, states or
instrumentalities, and their departments, authorities or agencies are able to
purchase A shares of the Fund at net asset value as long as certain conditions
are met.
 
HERITAGE NET ASSET VALUE ("NAV") TRANSFER PROGRAM
- -----------------------------------------------------------
 
     Class A shares of the Fund may be sold at net asset value without any sales
load under the Manager's NAV Transfer Program. To qualify for the NAV Transfer
Program, you must provide adequate proof that you recently redeemed shares from
a load or no-load mutual fund other than a Heritage Mutual Fund or any money
market fund. To provide adequate proof you must complete a qualification form
and provide a statement showing the value liquidated from the other mutual fund
within time parameters set by the Manager. In addition, shares of the other fund
must have been liquidated no more than 90 days prior to the purchase of shares
of a Heritage Mutual Fund.
 
COMBINED PURCHASE PRIVILEGE (RIGHT OF ACCUMULATION)
- -----------------------------------------------------------
 
     You may qualify for the sales load reductions indicated in the above sales
load schedule by combining purchases of A shares into a single "purchase," if
the resulting "purchase" totals at least $25,000. The term "purchase" refers to
a single purchase by an individual, or to concurrent purchases that, in the
aggregate, are at least equal to the prescribed amounts, by an individual, his
spouse and their children under the age of 21 years purchasing A shares for his
or their own account; a single purchase by a trustee or other fiduciary
purchasing A shares for a single trust, estate or single fiduciary account
although more than one beneficiary is involved; or a single purchase for the
employee benefit plans of a single employer. A "purchase" also may include A
shares purchased at the same time through a single selected dealer of any other
Heritage Mutual Fund subject to a sales load. To qualify for the Combined
Purchase Privilege on a purchase through a selected dealer, you or the selected
dealer must provide the Distributor with sufficient information to verify that
each purchase qualifies for the privilege or discount.
 
STATEMENT OF INTENTION
- ------------------------
 
     You also may obtain the reduced sales loads shown under "What Class A
Shares Will Cost" by means of a written Statement of Intention, which expresses
your intention to invest not less than $25,000 within a period
 
                                       11
<PAGE>   14
 
of 13 months in A shares of the Fund or A shares of any other Heritage Mutual
Fund subject to a sales load ("Statement of Intention").
 
     Investors qualifying for the Combined Purchase Privilege described above
may purchase A shares of the Heritage Mutual Funds under a single Statement of
Intention. For example, if, at the time an investor signs a Statement of
Intention to invest at least $25,000 in A shares of the Fund, the investor and
the investor's spouse each purchase A shares worth $5,000 (for a total of
$10,000), then it will be necessary only to invest a total of $15,000 during the
following 13 months in A shares of the Fund or any other Heritage Mutual Fund
subject to a sales load to qualify for the reduced sales load on the total
amount being invested.
 
     The Statement of Intention is not a binding obligation upon the investor to
purchase the full amount indicated. The minimum initial investment under a
Statement of Intention is 5% of such amount. If you would like to enter into a
Statement of Intention in conjunction with your initial investment in A shares
of the Fund, please complete the appropriate portion of the Account Application
at the back of this Prospectus. Current Fund shareholders desiring to do so can
obtain a form of Statement of Intention by contacting the Manager or the
Distributor at the address or telephone number listed on the cover of this
Prospectus, or from their Representative.
 
REINSTATEMENT PRIVILEGE
- -------------------------
 
     A shareholder who has redeemed any or all of his A shares of the Fund may
reinvest all or any portion of the redemption proceeds in A shares at net asset
value without any sales load, provided that such reinvestment is made within 90
calendar days after the redemption date. A shareholder who has redeemed any or
all of his C shares of the Fund and has paid a CDSL on those shares or has held
those shares long enough so that the CDSL no longer applies, may reinvest all or
any portion of the redemption proceeds in C shares of the Fund at net asset
value without paying a CDSL on future redemptions of those shares, provided that
such reinvestment is made within 90 calendar days after the redemption date. A
reinstatement pursuant to this privilege will not cancel the redemption
transaction; therefore, (1) any gain realized on the transaction will be
recognized for Federal income tax purposes, while (2) any loss realized will not
be recognized for those purposes to the extent that the redemption proceeds are
reinvested in shares of the Fund. See "Taxes." The reinstatement privilege may
be utilized by a shareholder only once, irrespective of the number of shares
redeemed, except that the privilege may be utilized without limitation in
connection with transactions whose sole purchase is to transfer a shareholder's
interest in the Fund to his defined contribution plan, SEP or IRA. Investors
must notify the Fund if they intend to exercise the reinstatement privilege.
 
     For more information on "What Class A Shares Will Cost" and a further
explanation of the instances in which the sales load will be waived or reduced,
see "Investing in the Fund" in the SAI.
 
WHAT CLASS C SHARES WILL COST
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     A CDSL of 1% is imposed on C shares if, within one year of purchase, you
redeem an amount that causes the current value of your account to fall below the
total dollar amount of C shares purchased subject to the CDSL. The CDSL will not
be imposed on the redemption of C shares acquired as dividends or other
distributions, or on any increase in the net asset value of the redeemed C
shares above the original purchase price. Thus, the CDSL will be imposed on the
lower of net asset value or purchase price.
 
                                       12
<PAGE>   15
 
     Redemptions will be processed in a manner intended to minimize the amount
of redemption that will be subject to the CDSL. When calculating the CDSL, it
will be assumed that the redemption is made first of C shares acquired as
dividends, second of C shares that have been held for over one year, and finally
of C shares held for less than one year on a first-in first-out basis.
 
     For example, assume you purchase 100 C shares at $10 per share (for a total
cost of $1,000) and, during the year you purchase such shares, the net asset
value increases to $12 per share and you acquire 10 additional shares as
dividends. If you redeem 50 shares (or $600) within the first year of purchase,
10 shares would not be subject to the CDSL because redemptions are made first of
shares acquired as dividends. With respect to the remaining shares, the CDSL is
applied only to the original cost of $10 per share and not to the higher net
asset value of $12 per share. Therefore, only 40 of the 50 shares (or $400)
being redeemed would be subject to a CDSL at a rate of 1%.
 
     WAIVER OF THE CONTINGENT DEFERRED SALES LOAD.  The CDSL is currently waived
for (1) any partial or complete redemption in connection with a distribution
without penalty under Section 72(t) of the Code from a qualified retirement
plan, including a Keogh Plan or IRA upon attaining age 70 1/2; (2) any
redemption resulting from a tax-free return of an excess contribution to a
qualified employer retirement plan or an IRA; (3) any partial or complete
redemption following death or disability (as defined in Section 72(m)(7) of the
Code) of a shareholder (including one who owns the shares as joint tenant with
his spouse) from an account in which the deceased or disabled is named, provided
the redemption is requested within one year of the death or initial
determination of disability; (4) certain periodic redemptions under the
Systematic Withdrawal Plan from an account meeting certain minimum balance
requirements, in amounts representing certain maximums established from time to
time by the Distributor (currently a maximum of 12% annually of the account
balance at the beginning of the Systematic Withdrawal Plan); or (5) involuntary
redemptions by the Fund of C shares in shareholder accounts that do not comply
with the minimum balance requirements. The Distributor may require proof of
documentation prior to waiver of the CDSL described in sections (1) through (4)
above, including distribution letters, certification by plan administrators,
applicable tax forms or death certificates or physicians certificates.
 
     For more information about C shares, see "Reinstatement Privilege" and
"Exchange Privilege."
 
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     Redemption of Fund shares can be made by:
 
     CONTACTING YOUR REPRESENTATIVE.  Your Representative will transmit an order
to the Fund for redemption and may charge you a fee for this service.
 
     TELEPHONE REQUEST.  You may redeem shares by placing a telephone request to
the Fund (800-421-4184) prior to the close of regular trading on the Exchange.
If you do not wish to have telephone exchange/redemption privileges, you should
so elect by completing the appropriate section of the Account Application. The
Fund, Manager, Distributor and their Trustees, directors, officers and employees
are not liable for any loss arising out of telephone instructions they
reasonably believe are authentic. These parties will employ reasonable
procedures to confirm that telephone instructions are authentic. To the extent
that the Fund, Manager, Distributor and their Trustees, directors, officers and
employees do not follow reasonable procedures, some or all of them may be liable
for losses due to unauthorized or fraudulent transactions. For more information
on these procedures, see "Redeeming Shares -- Telephone Transactions" in the
SAI. You may elect to have the funds wired to the bank account specified on the
Account Application. Funds normally
 
                                       13
<PAGE>   16
 
will be sent the next business day, and you will be charged a wire fee by the
Manager (currently $5.00). For redemptions of less than $25,000, you may request
that the check be mailed to your address of record, providing that such address
has not been changed in the past 60 days. For your protection, all other
redemption checks will be transferred to the bank account specified on the
Account Application.
 
     WRITTEN REQUEST.  You may redeem shares by sending a written request for
redemption to "Heritage Series Trust-Small Cap Stock Fund, c/o Shareholder
Services, Heritage Asset Management, Inc., P.O. Box 33022, St. Petersburg, FL
33733." Signature guarantees will be required on the following types of
requests: redemptions from any account that has had an address change in the
past 60 days, redemptions greater than $25,000, redemptions that are sent to an
address other than the address of record and exchanges or transfers into other
Heritage accounts that have different titles. The Manager will transmit the
order to the Fund for redemption.
 
     SYSTEMATIC WITHDRAWAL PLAN.  Withdrawal plans are available that provide
for regular periodic withdrawals of $50 or more on a monthly, quarterly,
semiannual or annual basis. Under these plans, sufficient shares of the Fund are
redeemed to provide the amount of the periodic withdrawal payment. The purchase
of A shares while participating in the Systematic Withdrawal Plan ordinarily
will be disadvantageous to you because you will be paying a sales load on the
purchase of those shares at the same time that you are redeeming A shares upon
which you may already have paid a sales load. Therefore, the Fund will not
knowingly permit the purchase of A shares through the Automatic Investment Plan
if you are at the same time making systematic withdrawals of A shares. The
Manager reserves the right to cancel systematic withdrawals if insufficient
shares are available for two or more consecutive months.
 
     Please contact the Manager or your Representative for further information
or see "Redeeming Shares" in the SAI.
 
RECEIVING PAYMENT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     If a request for redemption is received by the Fund in good order (as
described below) before the close of regular trading on the Exchange, the shares
will be redeemed at the net asset value per share determined at the close of
regular trading on the Exchange on that day, less any applicable CDSL for C
shares. Requests for redemption received by the Fund after the close of regular
trading on the Exchange will be executed at the net asset value determined at
the close of regular trading on the Exchange on the next trading day, less any
applicable CDSL for C shares.
 
     Payment for shares redeemed by the Fund normally will be made on the
business day after redemption was made. If the shares to be redeemed recently
have been purchased by personal check, the Fund may delay mailing a redemption
check until the purchase check has cleared, which may take up to seven days.
This delay can be avoided by wiring funds for purchases. The proceeds of a
redemption may be more or less than the original cost of Fund shares.
 
     A redemption request will be considered to be received in "good order" if:
 
     - the number or amount of shares and the class of shares to be redeemed and
       the shareholder account number are indicated;
 
     - any written request is signed by a shareholder and by all co-owners of
       the account with exactly the same name or names used in establishing the
       account;
 
                                       14
<PAGE>   17
 
     - any written request is accompanied by certificates representing the
      shares that have been issued, if any, and the certificates have been
      endorsed for transfer exactly as the name or names appear on the
      certificates or an accompanying stock power has been attached; and
 
     - the signatures on any written redemption request of $25,000 or more and
      on any certificates for shares (or an accompanying stock power) have been
      guaranteed by a national bank, a state bank that is insured by the Federal
      Deposit Insurance Corporation, or a trust company, or by any member firm
      of the New York, American, Boston, Chicago, Pacific or Philadelphia Stock
      Exchanges. Signature guarantees also will be accepted from savings banks
      and certain other financial institutions that are deemed acceptable by the
      Manager, as transfer agent, under its current signature guarantee program.
 
     The Fund has the right to suspend redemption or postpone payment at times
when the Exchange is closed (other than customary weekend or holiday closings)
or during periods of emergency or other periods as permitted by the SEC. In the
case of any such suspension you may either withdraw your request for redemption
or receive payment based upon the net asset value next determined after the
suspension is lifted. If a redemption check remains outstanding after six
months, the Manager reserves the right to redeposit those funds into your
account. For more information on receiving payment, see "Redeeming
Shares -- Receiving Payment" in the SAI.
 
EXCHANGE PRIVILEGE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     If you have held A shares or C shares for at least 30 days, you may
exchange some or all of your shares for shares of the same class of any other
Heritage Mutual Fund. All exchanges will be based on the respective net asset
values of the Heritage Mutual Funds involved. All exchanges are subject to the
minimum investment requirements and any other applicable terms set forth in the
prospectus for the Heritage Mutual Fund whose shares are being acquired.
Exchanges involving the redemption of shares recently purchased by check will be
permitted only after the Heritage Mutual Fund whose shares have been tendered
for exchange is reasonably assured that the check has cleared, normally seven
calendar days following the purchase date. Exchanges of shares of Heritage
Mutual Funds generally will result in the realization of a taxable gain or loss
for Federal income tax purposes.
 
     For purposes of calculating the commencement of the one-year CDSL holding
period for shares exchanged from the Fund to the C shares of any other Heritage
Mutual Fund, except Heritage Cash Trust -- Money Market Fund ("Money Market
Fund"), the original purchase date of those shares exchanged will be used. Any
time period that the exchanged shares were held in the Money Market Fund will
not be included in this calculation.
 
     If you exchange A shares or C shares for corresponding shares of the Money
Market Fund, you may, at any time thereafter, exchange such shares for the
corresponding class of shares of any other Heritage Mutual Fund. Because the
Money Market Fund is a no-load mutual fund, if you exchange shares of that fund
acquired by purchase (rather than exchange) for shares of another Heritage
Mutual Fund, you will be subject to the sales load, if any, that would be
applicable to a purchase of that Heritage Mutual Fund. In addition, if you
exchange C shares of the Fund for corresponding shares of the Money Market Fund,
the period during which an investment is held in shares of the Money Market Fund
will not count for purposes of calculating the one-year CDSL holding period for
such shares. As a result, if you redeem C shares of the Money Market Fund before
the expiration of the one-year CDSL holding period, you will be subject to the
applicable CDSL. A shares of the Fund may be exchanged for A shares of the
Heritage Cash Trust -- Municipal Money Fund,
 
                                       15
<PAGE>   18
 
which is the only class of shares offered by that fund. Because the Heritage
Cash Trust -- Municipal Money Market Fund is a no-load mutual fund, if you
exchange shares of that fund acquired by purchase (rather than exchange) for
shares of another Heritage Mutual Fund, you also will be subject to the sales
load, if any, that would be applicable to a purchase of that Heritage Mutual
Fund. C shares are not eligible for exchange into the Heritage Cash
Trust -- Municipal Money Market Fund.
 
     Shares acquired pursuant to a telephone request for exchange will be held
under the same account registration as the shares redeemed through such an
exchange. For a discussion of limitation of liability of certain entities, see
"How to Redeem Shares -- Telephone Request."
 
     Telephone exchanges can be effected by calling the Manager at 800-421-4184
or by calling your Representative. In the event that you or your Representative
are unable to reach the Manager by telephone, an exchange can be effected by
sending a telegram to Heritage Asset Management, Inc., attention: Shareholder
Services. Due to the volume of calls or other unusual circumstances, telephone
exchanges may be difficult to implement during certain time periods.
 
     The exchange privilege is available only in states where shares of the
Heritage Mutual Fund being acquired may be legally sold. Each Heritage Mutual
Fund reserves the right to reject any order to acquire its shares through
exchange or otherwise to restrict or terminate the exchange privilege at any
time. In addition, each Heritage Mutual Fund may terminate the exchange
privilege upon 60 days' notice. For further information on this exchange
privilege, contact the Manager or your Representative and see "Exchange
Privilege" in the SAI.
 
                             MANAGEMENT OF THE FUND
 
BOARD OF TRUSTEES
 
     The business and affairs of the Fund are managed by or under the direction
of the Board of Trustees. The Trustees are responsible for managing the Fund's
business affairs and for exercising all the Fund's powers except those reserved
to the shareholders. A Trustee may be removed by the other Trustees or by a
two-thirds vote of the outstanding Fund shares.
 
INVESTMENT ADVISER, FUND ACCOUNTANT, ADMINISTRATOR AND TRANSFER AGENT
 
     Heritage Asset Management, Inc. is the Fund's investment adviser, fund
accountant, administrator and transfer agent. The Manager is responsible for
reviewing and establishing investment policies for the Fund as well as
administering the Fund's noninvestment affairs. The Manager is a wholly-owned
subsidiary of Raymond James Financial, Inc., which, together with its
subsidiaries, provides a wide range of financial services to retail and
institutional clients. The Manager manages, supervises and conducts the business
and administrative affairs of the Fund and the other Heritage Mutual Funds with
net assets totaling approximately $2 billion as of January 31, 1996. The Fund
pays the Manager directly for fund accounting and transfer agent services.
 
     Advisory and Administration Fee.  The Manager's annual investment advisory
and administration fee is 1% of the Fund's average daily net assets on the first
$50 million and 0.75% on average daily net assets over $50 million. This fee is
computed daily and paid monthly and is higher than that charged for most other
mutual funds with similar investment objectives. The Manager voluntarily will
waive its fees and also may be required to reduce its fees pursuant to various
state regulations which impose limitations on the annual
 
                                       16
<PAGE>   19
 
expense ratio of the Fund. The Manager may recover fees waived in the previous
two years if the recovery does not cause the Fund to exceed applicable expense
limitations.
 
     Brokerage Practices.  The Fund may use the Distributor as broker for agency
transactions in listed and over-the-counter securities at commission rates and
under circumstances consistent with the policy of best price and execution,
although it is not currently the Fund's practice to do so. See "Brokerage
Practices" in the SAI.
 
SUBADVISERS
 
     The assets of the Fund are allocated among one or more investment
subadvisers, subject to review by the Manager and the Board of Trustees. The
Manager periodically will review the allocation of such assets and, subject to
the oversight of the Board of Trustees, may, at its own discretion, reallocate
the assets between investment subadvisers when it deems such reallocation in the
best interest of the Fund's shareholders. The assets of the Fund currently are
allocated among two investment subadvisers, Eagle Asset Management, Inc.
("Eagle"), a wholly-owned subsidiary of Raymond James Financial, Inc., and Awad
& Associates ("Awad"), a division of Raymond James & Associates, Inc. The
Manager has entered into a separate agreement with each of the Subadvisers to
provide investment advice and portfolio management services, including placement
of brokerage orders, to the Fund for a fee payable by the Manager. The Manager
may, in the future, propose the addition of one or more additional subadvisers,
subject to approval by the Board of Trustees and Fund shareholders.
 
     Eagle Asset Management, Inc., 880 Carillon Parkway, St. Petersburg, Florida
33716, makes investment decisions on behalf of its allocated portion of the
Fund's assets. In making investment decisions, Eagle relies, in part, on the
Research Register, which is a listing of investments prepared by The Research
Department ("Research") of Raymond James & Associates, Inc. The Research
Register is used as the basis for specific investment recommendations to Raymond
James & Associates, Inc.'s clients. The Research Register displays current
research ratings that range from Strong Buy ("Buy 1") to Sell ("5"). Research
also prepares a Focus List (the "Focus List"), which is a subset of the "Buy 1"
recommendations. The portion of the Fund's assets managed by Eagle will not
entirely correspond to the "Buy 1" recommendations or the Focus List because
some of the "Buy 1" recommendations or the Focus List securities may not be
appropriate investments for the Fund due to special diversification, liquidity
and other requirements that apply to registered investment companies. In
addition, some of the Focus List and "Buy 1" securities are not small
capitalization companies and may not be appropriate for the Fund. Moreover,
other Raymond James & Associates, Inc. clients who receive the Research Register
or Focus List recommendations may place purchase or sale orders that make it
more difficult for the Fund to implement its own orders to buy or sell the same
securities. This is especially true for over-the-counter securities for which
Raymond James & Associates, Inc. is the primary market maker because the Fund is
not permitted to enter into principal transactions with Raymond James &
Associates, Inc. Thus, the performance of the portion of the Fund invested by
Eagle will differ from the Focus List's performance.
 
     A majority of the securities in which Eagle invests are limited to the "Buy
1" recommendations of Research, which generally are growth companies selected
based on unusually attractive valuations relative to twelve to eighteen month
potential values. The remainder of the securities in which Eagle invests
generally will be other small capitalization companies. "Buy 1" companies may be
undervalued because they are part of an industry that is out of favor with
investors even though the individual companies may be financially sound and have
high rates of earning growth. For its services to the Fund, Eagle is paid by the
Manager an annual fee equal to .50% on the first $50 million of the Fund's
average daily net assets under Eagle's investment discretion and .375% on the
Fund's average daily net assets over $50 million under its investment
discretion.
 
                                       17
<PAGE>   20
 
Eagle acts as adviser to Heritage Series Trust-Eagle International Equity
Portfolio. Eagle also serves as subadviser to the Trust's Value Equity Fund and
Growth Equity Fund, Heritage Income-Growth Trust and Heritage Capital
Appreciation Trust (although no assets currently are allocated to it), and
advises private investment accounts with net assets totalling approximately $2
billion as of January 31, 1996.
 
     Awad & Associates, 477 Madison Ave., New York, New York 10022, is a
division of Raymond James & Associates, Inc. and makes investment decisions on
its allocated portion of the Fund's assets. Awad employs an investment
management approach that seeks to provide investment returns in excess of
inflation while attempting to minimize volatility relative to the overall small
cap market. Awad seeks to achieve these goals through fundamental research
consisting of proprietary research, the use of Raymond James & Associates,
Inc.'s research and the research of high quality regional and Wall Street firms.
Due to Awad's use of Raymond James & Associates, Inc.'s research
recommendations, there may be some overlap among the portions of the Fund
managed by Awad and Eagle. Awad may buy stocks on the Research Register that
have ratings below "Buy 1" if the stocks meet Awad's investment criteria. The
companies in which Awad invests generally will have steady earnings and cash
flow growth, good and/or improving balance sheets, strong positions in their
market niches and the ability to perform well in a stagnant economy. The
companies purchased generally will have low price/earnings ratios relative to
the stock market in general. Awad had $400 million of assets under its
discretionary management at January 31, 1996. For its services to the Fund, Awad
is paid by the Manager an annual fee equal to .50% on the first $50 million of
the Fund's average daily net assets under Awad's investment discretion and .375%
on the Fund's average daily net assets over $50 million under its investment
discretion.
 
PORTFOLIO MANAGEMENT
 
     Bert L. Boksen serves as portfolio manager of the portion of the Fund's
assets allocated to Eagle and James D. Awad serves as portfolio manager of the
portion of the Fund's assets allocated to Awad. Messrs. Boksen and Awad have
been the portfolio managers since August 7, 1995 and the Fund's inception,
respectively, and are responsible for the day-to-day management of their
respective portions of the Fund's assets subject to the general oversight of the
Manager and the Board of Trustees. Mr. Boksen is a Senior Vice President of
Eagle. Mr. Boksen was employed for 16 years by Raymond James & Associates, Inc.
in its institutional research and sales department. While employed by Raymond
James & Associates, Inc., Mr. Boksen served as co-head of Research, Chief
Investment Officer and Chairman of the Raymond James & Associates, Inc. Focus
List Committee. Mr. Awad has been Chairman of Awad since 1992. Prior to 1992, he
was President of BMI Capital Corporation from 1980 through 1992.
 
                                       18
<PAGE>   21
 
                        SHAREHOLDER AND ACCOUNT POLICIES
 
DIVIDENDS AND OTHER DISTRIBUTIONS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     Dividends from net investment income are declared and paid annually. The
Fund also distributes to shareholders substantially all net realized capital
gains on portfolio securities at the end of the year in which the gains are
realized. Dividends and other distributions on shares held in retirement plans
and by shareholders maintaining a Systematic Withdrawal Plan are declared and
paid in additional Fund shares. Other shareholders may elect to:
 
     - receive both dividends and other distributions in additional Fund shares;
 
     - receive dividends in cash and other distributions in additional Fund
       shares;
 
     - receive both dividends and other distributions in cash; or
 
     - receive both dividends and other distributions in cash for investment
       into another Heritage Mutual Fund.
 
     If you select none of these options, the first option will apply. In any
case when you receive a dividend or other distribution in additional Fund
shares, your account will be credited with shares valued at their net asset
value determined at the close of regular trading on the Exchange on the day
following the record date for the dividend or other distribution. Distribution
options can be changed at any time by notifying the Manager in writing.
 
     Dividends paid by the Fund with respect to its A shares and C shares are
calculated in the same manner and at the same time and will be in the same
amount relative to the aggregate net asset value of the shares in each class,
except that dividends on C shares may be lower than dividends on A shares
primarily as a result of the higher distribution fee and class-specific expenses
applicable to C shares.
 
DISTRIBUTION PLANS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     As compensation for services rendered and expenses borne by the Distributor
in connection with the distribution of A shares and in connection with personal
services rendered to Class A shareholders and the maintenance of Class A
shareholder accounts, the Fund may pay the Distributor a service fee of up to
0.55% and a distribution fee of up to 0.10% of the Fund's average daily net
assets attributable to A shares. The Fund currently pays the Distributor a
service fee of up to .25% of Class A average daily net assets. This fee is
computed daily and paid monthly.
 
     As compensation for services rendered and expenses borne by the Distributor
in connection with the distribution of C shares and in connection with personal
services rendered to Class C shareholders and the maintenance of Class C
shareholder accounts, the Fund pays the Distributor a service fee of 0.25% and a
distribution fee of 0.75% of the Fund's average daily net assets attributable to
C shares. This fee is computed daily and paid monthly.
 
     The above-referenced fees paid to the Distributor are made under
Distribution Plans adopted pursuant to Rule 12b-1 under the 1940 Act. These
Plans authorize the Distributor to spend such fees on any activities or expenses
intended to result in the sale of A shares and C shares, including compensation
(in addition to the sales load) paid to Representatives; advertising; salaries
and other expenses of the Distributor relating to
 
                                       19
<PAGE>   22
 
selling or servicing efforts; expenses of organizing and conducting sales
seminars; printing of prospectuses, statements of additional information and
reports for other than existing shareholders; and preparation and distribution
of advertising material and sales literature and other sales promotion expenses.
The Distributor has entered into dealer agreements with participating dealers
who also will distribute shares of the Fund.
 
     If either Plan is terminated, the obligation of the Fund to make payments
to the Distributor pursuant to the Plan will cease and the Fund will not be
required to make any payment past the date the Plan terminates.
 
TAXES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     The Fund intends to continue to qualify for treatment as a regulated
investment company under Subchapter M of the Code. In each taxable year that the
Fund does so, it (but not its shareholders) will be relieved of Federal income
tax on that part of its investment company taxable income (generally consisting
of net investment income and net short-term capital gains) and net capital gain
(the excess of net long-term capital gain over net short-term capital loss) that
is distributed to its shareholders. Dividends from the Fund's investment company
taxable income are taxable to its shareholders as ordinary income, to the extent
of the Fund's earnings and profits, whether received in cash or in additional
Fund shares. Distributions of the Fund's realized net capital gain, when
designated as such, are taxable to its shareholders as long-term capital gains,
whether received in cash or in additional Fund shares and regardless of the
length of time the shares have been held. No substantial portion of the
dividends paid by the Fund is expected to be eligible for the dividends-received
deduction allowed to corporations.
 
     Dividends and other distributions declared by the Fund in November or
December of any year and payable to shareholders of record on a date in one of
those months will be deemed to have been paid by the Fund and received by the
shareholders on December 31 of that year if they are paid by the Fund during the
following January. Shareholders receive Federal income tax information regarding
dividends and other distributions after the end of each year. The Fund is
required to withhold 31% of all dividends, capital gain distributions and
redemption proceeds payable to individuals and certain other noncorporate
shareholders who do not provide the Fund with a correct taxpayer identification
number. Withholding at that rate also is required from dividends and capital
gain distributions payable to such shareholders who otherwise are subject to
backup withholding.
 
     The foregoing is only a summary of some of the important Federal income tax
considerations generally affecting the Fund and its shareholders. See the SAI
for a further discussion. There may be other Federal, state or local tax
considerations applicable to a particular investor. You are therefore urged to
consult your tax adviser.
 
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     Each share of the Fund gives the shareholder one vote in matters submitted
to shareholders for a vote. All A shares and C shares of the Fund have equal
voting rights, except that in matters affecting only a particular class, only
shares of that class are entitled to vote. As a portfolio of a Massachusetts
business trust, the Fund is not required to hold annual shareholder meetings.
Shareholder approval will be sought only for certain changes in the Fund's
operation and for the election of Trustees under certain circumstances. Trustees
may be removed by the other Trustees or shareholders at a special meeting. A
special meeting of shareholders shall be called by the Trustees upon the written
request of shareholders owning at least 10% of the Fund's outstanding shares.
 
                                       20
<PAGE>   23
 
     No dealer, salesman or other person has been authorized to give any
information or to make any representation other than that contained in this
Prospectus in connection with the offer contained in this Prospectus, and, if
given or made, such other information or representations must not be relied upon
as having been authorized by the Trust or the Distributor. This Prospectus does
not constitute an offering in any state in which such offering may not lawfully
be made.
<PAGE>   24
 
                          HERITAGE SERIES TRUST LOGO
                              SMALL CAP STOCK FUND
 
                                   PROSPECTUS
 
                                 March 1, 1996
 
     Heritage Series Trust Fund
     Small Cap Stock Fund
     P.O. Box 33022
     St. Petersburg, FL 33733
 
     --------------------------------------------
 
     Address Change Requested
 
     Prospectus
 
     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
 
     7M HAM026

<PAGE>
     
<PAGE>   1
 
                         [HERITAGE SERIES TRUST LOGO]
 
                              VALUE EQUITY FUND
 
     Heritage Series Trust is a mutual fund offering its shares in separate
investment portfolios. This Prospectus relates to the Value Equity Fund (the
"Fund"). The Fund primarily seeks long-term capital appreciation and,
secondarily, seeks current income. The Fund seeks to accomplish these objectives
primarily by investing in a diversified portfolio of common stocks that meet
certain quantitative standards that, in the judgment of the Fund's investment
subadviser, Eagle Asset Management, Inc., indicate above average financial
soundness and high intrinsic value relative to price. The Fund offers two
classes of shares, Class A shares (sold subject to a front-end sales load) and
Class C shares (sold subject to a contingent deferred sales load).
 
     This Prospectus contains information that should be read before investing
in the Fund and should be kept for future reference. A Statement of Additional
Information dated March 1, 1996 relating to the Fund has been filed with the
Securities and Exchange Commission and is incorporated by reference in this
Prospectus. A copy of the Statement of Additional Information is available free
of charge and shareholder inquiries can be made by writing to Heritage Asset
Management, Inc. or by calling (800) 421-4184.
 
FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY,
THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY
OTHER AGENCY.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
   EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION NOR HAS THE
     SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
           COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
              PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
                              A CRIMINAL OFFENSE.
 
                    [HERITAGE ASSET MANAGEMENT, INC. LOGO]
                      Registered Investment Advisor--SEC
 
                              880 Carillon Parkway
                         St. Petersburg, Florida 33716
                                 (800) 421-4184
 
                         Prospectus Dated March 1, 1996
<PAGE>   2
 
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                   <C>
GENERAL INFORMATION.................................................    1
  About the Trust and the Fund......................................    1
  Total Fund Expenses...............................................    1
  Financial Highlights..............................................    3
  Differences Between A Shares and C Shares.........................    3
  Investment Objectives, Policies and Risk Factors..................    4
  Net Asset Value...................................................    6
  Performance Information...........................................    6
INVESTING IN THE FUND...............................................    7
  How to Buy Shares.................................................    7
  Minimum Investment Required/Accounts With Low Balances............    8
  Investment Programs...............................................    8
  Alternative Purchase Plans........................................    9
  What Class A Shares Will Cost.....................................   10
  What Class C Shares Will Cost.....................................   12
  How to Redeem Shares..............................................   13
  Receiving Payment.................................................   14
  Exchange Privilege................................................   15
MANAGEMENT OF THE FUND..............................................   16
SHAREHOLDER AND ACCOUNT POLICIES....................................   17
  Dividends and Other Distributions.................................   17
  Distribution Plans................................................   18
  Taxes.............................................................   18
  Shareholder Information...........................................   19
</TABLE>
<PAGE>   3
 
                              GENERAL INFORMATION
 
ABOUT THE TRUST AND THE FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     Heritage Series Trust (the "Trust") was established as a Massachusetts
business trust under a Declaration of Trust dated October 28, 1992. The Trust is
an open-end diversified management investment company that currently offers its
shares in four separate investment portfolios, the Value Equity Fund (the
"Fund"), the Small Cap Stock Fund, the Growth Equity Fund and the Eagle
International Equity Portfolio. The Fund is designed for individuals,
institutions and fiduciaries. The Fund offers two classes of shares, Class A
shares ("A shares") and Class C shares ("C shares"). The Fund requires a minimum
initial investment of $1,000, except for certain retirement accounts and
investment plans for which lower limits may apply. See "Investing in the Trust."
This Prospectus relates exclusively to the Fund. To obtain a Prospectus for the
Trust's other portfolios, please call (800) 421-4184.
 
TOTAL FUND EXPENSES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     Shown below are all Class A expenses incurred by the Fund during its 1995
fiscal year, adjusted to reflect current voluntary expense limitations. Class A
annual operating expenses are shown as an annualized percentage of fiscal 1995
average daily net assets. Because C shares were not offered for sale prior to
April 3, 1995, Class C annual operating expenses are based on estimated 1996
expenses. Shareholder transaction expenses for both classes are expressed as a
percentage of maximum public offering price, cost per transaction or as
otherwise noted.
 
<TABLE>
<CAPTION>
                                                    CLASS A     CLASS C
                                                    -------     -------
    <S>                                             <C>         <C>        <C>
    SHAREHOLDER TRANSACTION EXPENSES
    Sales load "charge" on purchases..............     4.75%       None
    Contingent deferred sales load (as a                                   (declining to 0%
      percentage of original purchase price or                             after the first
      redemption proceeds, as applicable).........     None        1.00%   year)
    Wire redemption fee...........................   $ 5.00      $ 5.00

    ANNUAL FUND OPERATING EXPENSES
    Management fee (after fee waiver).............     0.00%       0.00%
    12b-1 Distribution Fees.......................     0.25%       1.00%
    Other Expenses (after reimbursement)..........     1.40%       1.40%
                                                    -------     -------
    Total Fund Operating Expenses (after fee
      waiver and reimbursement)...................     1.65%       2.40%
                                                     ======      ======
</TABLE>
 
     The Fund's manager, Heritage Asset Management, Inc. (the "Manager"),
voluntarily will waive its fees and, if necessary, reimburse the Fund to the
extent that Class A annual operating expenses exceed 1.65% and to the extent
that Class C annual operating expenses exceed 2.40% of the Fund's average daily
net assets attributable to that class. Absent such fee waiver, the management
fee would be 0.75% and other expenses would be 2.49% for each class and the
annualized total Fund operating expenses would be 3.49% for Class A and 4.24%
for Class C. To the extent that the Manager waives or reimburses its fees with
respect to one class, it will do so with respect to the other class on a
proportionate basis. Although the Fund is authorized to pay annual Rule 12b-1
distribution fees on behalf of A shares of up to .35% of the average daily net
assets
 
                                        1
<PAGE>   4
 
attributable to that class, the Trust's Board of Trustees (the "Board of
Trustees" or the "Board") has authorized annual payments of only .25% of Class A
average daily net assets. Due to the imposition of Rule 12b-1 the distribution
fees, it is possible that long-term shareholders of the Fund may pay more in
total sales charges than the economic equivalent of the maximum front-end sales
load permitted by the rules of the National Association of Securities Dealers,
Inc.
 
     The impact of Fund operating expenses on earnings is illustrated in the
example below assuming a hypothetical $1,000 investment, a 5% annual rate of
return, and a redemption at the end of each period shown.
 
<TABLE>
<CAPTION>
                                                         1 YEAR   3 YEARS   5 YEARS   10 YEARS
                                                         ------   -------   -------   --------
        <S>                                              <C>      <C>       <C>       <C>
        Total Operating Expenses -- Class A............   $ 63      $97      $ 133      $234
        Total Operating Expenses -- Class C............   $ 34      $75      $ 128      $274
</TABLE>
 
     The impact of Fund operating expenses on earnings is illustrated in the
example below assuming a hypothetical $1,000 investment, a 5% annual rate of
return, and no redemption at the end of each period shown.
 
<TABLE>
<CAPTION>
                                                         1 YEAR   3 YEARS   5 YEARS   10 YEARS
                                                         ------   -------   -------   --------
        <S>                                              <C>      <C>       <C>       <C>
        Total Operating Expenses -- Class A............   $ 63      $97      $ 133      $234
        Total Operating Expenses -- Class C............   $ 24      $75      $ 128      $274
</TABLE>
 
     This is an illustration only and should not be considered a representation
of future expenses. Actual expenses and performance may be greater or less than
that shown above. The purpose of the above tables is to assist investors in
understanding the various costs and expenses that will be borne directly or
indirectly by Fund shareholders. For a further discussion of these costs and
expenses, see "Management of the Fund" and "Distribution Plans."
 
                                        2
<PAGE>   5
 
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     The following table shows important financial information for an A share
and a C share of the Fund outstanding for the period indicated, including net
investment income, net realized and unrealized gain on investments, and certain
other information. It has been derived from financial statements that have been
audited by Coopers & Lybrand L.L.P., independent accountants, whose report
thereon is included in the Statement of Additional Information ("SAI"), which
may be obtained by calling the Fund at the telephone number on the front page of
this Prospectus.
 
<TABLE>
<CAPTION>
                                                                    CLASS A+   CLASS C++
                                                                    --------   ---------
        <S>                                                         <C>        <C>
        NET ASSET VALUE, BEGINNING OF THE PERIOD..................   $14.29     $ 15.27
                                                                    --------   ---------
        INCOME FROM INVESTMENT OPERATIONS:
          Net investment income...................................      .08         .01
          Net realized and unrealized gain on investments.........     3.63        2.64
                                                                    --------   ---------
        Total from investment operations..........................     3.71        2.65
                                                                    --------   ---------
        NET ASSET VALUE, END OF THE PERIOD........................   $18.00     $ 17.92
                                                                    =======    ========
        TOTAL RETURN(%)(C)(D).....................................    25.96       17.35

        RATIOS(%)/AND SUPPLEMENTAL DATA:
          Ratio of operating expenses, net to average daily net
             assets(a)(b).........................................     1.65        2.40
          Ratio of net investment income to average daily net
             assets(b)............................................     1.05         .28
          Portfolio turnover rate(b)..............................       82          82
          Net assets, end of period ($ millions)..................       12           4
</TABLE>
 
- ---------------
 
+  For the period December 30, 1994 (commencement of operations) to October 31,
   1995.
++ For the period April 3, 1995 (commencement of C shares) to October 31, 1995.
(a)Excludes management fees waived and expenses reimbursed by the Manager of
   $.13 per share for A shares and C shares, respectively. The operating expense
   ratios including such items would be 3.49% and 4.24% (annualized),
   respectively.
(b)Annualized.
(c)Not annualized.
(d)Does not reflect the imposition of a sales load.
 
DIFFERENCES BETWEEN A SHARES AND C SHARES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     The primary difference between the A shares and the C shares lies in their
initial sales load and contingent deferred sales load ("CDSL") structures and in
their ongoing expenses, including asset-based sales charges in the form of
distribution fees. These differences are summarized below. In addition, each
class may bear differing amounts of certain class-specific expenses, such as
transfer agent fees, Securities and Exchange Commission ("SEC") registration
fees, state registration fees and expenses of administrative personnel and
services. Each class has distinct advantages and disadvantages for different
investors, and investors may choose
 
                                        3
<PAGE>   6
 
the class that best suits their circumstances and objectives. See "How to Buy
Shares," "Alternative Purchase Plans," "What Class A Shares Will Cost" and "What
Class C Shares Will Cost."
 
<TABLE>
<CAPTION>
                                            ANNUAL 12B-1 FEES
                                            AS A % OF AVERAGE
                    SALES LOAD               DAILY NET ASSETS           OTHER INFORMATION
            --------------------------  --------------------------  --------------------------
<S>         <C>                         <C>                         <C>
A Shares    Maximum initial sales load  Service fee of up to        Initial sales load waived
            of 4.75%                    0.25%; distribution fee of  or reduced for certain
                                        up to 0.10%*                purchases

C Shares    Maximum CDSL of 1% of       Service fee of 0.25%;       CDSL waived for certain
            redemption proceeds;        distribution fee of up to   types of redemptions
            declining to zero after 1   0.75%
            year
</TABLE>
 
- ---------------
 
* Class A 12b-1 fees currently are limited by the Board of Trustees to the 0.25%
  service fee.
 
INVESTMENT OBJECTIVES, POLICIES AND RISK FACTORS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     The Fund's primary investment objective is long-term capital appreciation.
Current income is a secondary objective. There is no assurance that these
investment objectives will be met. In seeking these objectives, the Fund may
invest without limit in common stocks that, when purchased, meet certain
quantitative standards that in the judgment of Eagle Asset Management, Inc., the
Fund's investment subadviser (the "Subadviser"), indicate above average
financial soundness and high intrinsic value relative to price. In particular,
each common stock must have at least one of the following attributes in order to
meet the Subadviser's investment criteria when purchased by the Fund:
 
     - LOW PRICE IN RELATION TO THE ISSUER'S EARNINGS OR BOOK VALUE: The stock
       must have a price-to-earnings ratio or price-to-book value ratio of less
       than or approximately equal to 75% of that of the broader equity market
       (as measured by the Standard & Poor's 500 Composite Stock Price Index);
 
     - HIGH DIVIDEND YIELD: The stock's yield must approximate at least 50% of
       the prevailing average yield to maturity of the long-term U.S. Government
       bond, as measured by the Lehman Brothers Long Treasury Bond Index (or
       other similar index if this index is not available);
 
     - HIGH VALUE OF ISSUER AS A GOING CONCERN: The stock's per share going
       concern value (as estimated by the Subadviser) must exceed book value and
       market value; or
 
     - LOW DEBT: The long-term debt of the issuer must be below, or
       approximately equivalent to, the issuer's tangible net worth.
 
     Under normal market conditions, at least 65% of the Fund's total assets
will be invested in U.S. common stocks. With respect to the other 35% of its
total assets, the Fund may invest in common stocks of foreign issuers, American
Depository Receipts ("ADRs"), foreign currency transactions with respect to
underlying common stock, preferred stock, investment grade securities
convertible into common stocks, futures contracts, options on equity securities
or equity security indices, rights or warrants to subscribe for or purchase
common stocks, obligations of the U.S. Government, its agencies and
instrumentalities (including repurchase agreements thereon) and in securities
that track the performance of a broad-based securities index, such as Standard &
Poor's Depository Receipts. The Fund may loan its portfolio securities.
Investment grade securities include securities rated Baa or above by Moody's
Investors Service, Inc. ("Moody's") or BBB or
 
                                        4
<PAGE>   7
 
above by Standard & Poor's Ratings Services ("S&P") or unrated securities deemed
to be of comparable quality by the Subadviser. Securities rated in the lowest
category of investment grade are considered to have speculative characteristics
and changes in economic conditions are more likely to lead to a weakened
capacity to pay interest and repay principal than is the case with higher grade
bonds. The Fund may retain a security that has been downgraded below investment
grade if, in the Subadviser's opinion, it is in the Fund's best interest. See
the Appendix to the SAI for a description of corporate bond ratings by S&P and
Moody's.
 
     The portion of total assets invested in common stocks and debt securities
will vary based on the availability of common stocks meeting the foregoing
criteria and the Subadviser's evaluation of the investment merit of common
stocks relative to debt securities. No more than 10% of the Fund's net assets
may be invested in securities that, at the time of investment, are illiquid. See
"Investment Information -- Investment Policies" in the SAI for a more detailed
discussion of these securities, including related risks.
 
     For temporary defensive purposes during anticipated periods of general
market decline, the Fund may invest up to 100% of its net assets in money market
instruments, including securities issued or guaranteed by the U.S. Government,
its agencies or instrumentalities and repurchase agreements secured thereby, as
well as bank certificates of deposit and banker's acceptances issued by banks
having net assets of at least $1 billion as of the end of their most recent
fiscal year, high grade commercial paper, and other long- and short-term debt
instruments that are rated A or higher by S&P or Moody's. See the SAI and its
Appendix for a description of the commercial paper ratings by S&P and Moody's.
 
     STOCK SELECTION PROCESS.  In selecting securities, the Subadviser screens a
universe of over 2500 companies. From this universe, the Subadviser anticipates
that only a few hundred companies will meet one or more of its investment
criteria. Each of these companies is analyzed individually in terms of its past
and present competitive position within its respective industry. Selections will
be made based on the Subadviser's projections of the companies' growth in
earnings and dividends, earnings momentum, and undervaluation based on a
dividend discount model. Target prices and value ranges are developed from this
analysis and portfolio selection will be made from among the top-rated
securities.
 
     The Subadviser periodically monitors the Fund's equity securities to assure
that they continue to meet the selection criteria. A security normally will be
sold once it reaches its target price, when negative changes occur with respect
to the company or its industry, or when there is a significant change in the
security with respect to one or more of the four selection criteria listed
above. The Fund may at times continue to hold equity securities that no longer
meet the criteria but the Subadviser deems suitable investments in view of the
Fund's investment objectives.
 
     SPECIAL RISKS OF FOREIGN SECURITIES TRANSACTIONS.  The Fund may invest up
to 15% of its total assets in common stocks of foreign issuers and ADRs. ADRs
are receipts typically issued by a U.S. bank or trust company evidencing
ownership of the underlying securities of foreign issuers. There are special
risks involved in investing in foreign securities and ADRs. There may be less
public information available about foreign issuers than U.S. issuers, and
foreign issuers generally are not subject to uniform audit and financial
reporting standards, practices and requirements comparable to those in the
United States. The securities of some foreign issuers are less liquid and at
times more volatile than securities of comparable U.S. issuers. Foreign
settlement procedures and trade regulations may involve certain risks (such as
delay in payment or delivery of securities or in the recovery of the Fund's
assets held abroad) and expenses not present in the settlement of domestic
investments. There may be a possibility of nationalization or expropriation of
assets, impositions of currency exchange controls, confiscatory taxation,
political or financial instability and diplomatic developments that could affect
the value of the Fund's investment in certain foreign countries. In addition,
income received by
 
                                        5
<PAGE>   8
 
the Fund from sources within foreign countries may be reduced by withholding and
other taxes imposed by such countries. Before investing in foreign securities,
the Fund considers possible political and financial instability abroad, as well
as the liquidity and volatility of foreign investments.
 
     Fluctuations in monetary exchange rates affect the dollar value of foreign
investments. Solely to protect against such uncertainty, the Fund can enter into
forward contracts to purchase or sell foreign currencies at a future date. See
the SAI for further discussion of these policies. The SAI also describes other
investment techniques that the Fund may use but that are not anticipated to be a
part of the Fund's investment strategy for the foreseeable future.
 
     The Fund's investment objective is fundamental and may not be changed
without the vote of a majority of the outstanding voting securities of the Fund,
as defined in the Investment Company Act of 1940, as amended (the "1940 Act").
All policies of the Fund described in this Prospectus may be changed by the
Board of Trustees without shareholder approval. The SAI contains more detailed
information on the Fund's investment policies and risks.
 
NET ASSET VALUE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     The net asset values of A shares and C shares are calculated by dividing
the value of the total assets of the Fund attributable to that class, less
liabilities attributable to that class, by the number of shares of that class
outstanding. Shares are valued as of the close of regular trading on the New
York Stock Exchange ("Exchange") each day it is open. Fund securities are stated
at market value based on the last sales price as reported by the principal
securities exchange on which the securities are traded. If no sale is reported,
market value is based on the most recent quoted bid price. In the absence of a
readily available market quote, or if the Manager or the Subadviser has reason
to question the validity of market quotations they receive, securities and other
assets are valued using such methods as the Board of Trustees believes would
reflect fair value. Short-term investments that will mature in 60 days or less
are valued at amortized cost, which approximates market value. Securities that
are quoted in a foreign currency are 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. The per share net asset value of A shares and C shares
may differ as a result of the different daily expense accruals applicable to
each class. For more information on the calculation of net asset value, see "Net
Asset Value" in the SAI.
 
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     Total return data of the A shares and C shares from time to time may be
included in advertisements about the Fund. Performance information is computed
separately for A shares and C shares in accordance with the methods described
below. Because C shares bear the expense of a higher distribution fee
attributable to the deferred sales load alternative, the performance of C shares
likely will be lower than that of A shares.
 
     Total return with respect to a class for the one-, five- and ten-year
periods or, if such periods have not yet elapsed, the period since the
establishment of that class through the most recent calendar quarter represents
the average annual compounded rate of return on an investment of $1,000 in that
class at the public offering price (in the case of A Shares, giving effect to
the maximum initial sales load of 4.75% and, in the case of C shares, giving
effect to the deduction of any CDSL that would be payable). In addition, the
Fund also may advertise its total return in the same manner, but without taking
into account the initial sales load or CDSL. The Fund also may advertise total
return calculated without annualizing the return, and total return may be
 
                                        6
<PAGE>   9
 
presented for other periods. By not annualizing the returns, the total return
calculated in this manner simply will reflect the increase in net asset value
per A share and C share over a period of time, adjusted for dividends and other
distributions. A share and C share performance may be compared with various
indices.
 
     All data is based on the Fund's past investment results and does not
predict future performance. Investment performance, which will vary, is based on
many factors, including market conditions, the composition of the Fund's
investment portfolio and the Fund's operating expenses. Investment performance
also often reflects the risks associated with the Fund's investment objective
and policies. These factors should be considered when comparing the Fund's
investment results to those of other mutual funds and other investment vehicles.
Additional performance information is contained in the Fund's annual report,
which may be obtained, without charge, by contacting the Fund at (800) 421-4184.
For more information on investment performance, see the SAI.
 
                             INVESTING IN THE FUND
 
HOW TO BUY SHARES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     Shares of the Fund are offered continuously through the Fund's principal
underwriter, Raymond James & Associates, Inc. (the "Distributor"), and through
other participating dealers or banks that have dealer agreements with the
Distributor. The Distributor receives commissions consisting of that portion of
the sales load remaining after the dealer concession is paid to participating
dealers or banks. Such dealers may be deemed to be underwriters pursuant to the
Securities Act of 1933, as amended.
 
     Shares of the Fund may be purchased through a registered representative of
the Distributor, a participating dealer or participating bank ("Representative")
by placing an order for Fund shares with your Representative, completing and
signing the Account Application found in this Prospectus, and mailing it along
with your payment, within three business days.
 
     The Fund offers and sells two classes of shares, A shares and C shares. A
shares may be purchased at a price equal to their net asset value per share next
determined after receipt of an order, plus a sales load imposed at the time of
purchase. C shares may be purchased at a price equal to their net asset value
per share next determined after receipt of an order. A CDSL of 1% is imposed on
C shares if you redeem those shares within one year of purchase. When you place
an order for Fund shares, you must specify which class of shares you wish to
purchase. See "Alternative Purchase Plans."
 
     All purchase orders received by the Distributor prior to the close of
regular trading on the Exchange -- generally 4:00 p.m., Eastern time -- will be
executed at that day's offering price. Purchase orders received by your
Representative prior to the close of regular trading on the Exchange and
transmitted to the Distributor before 5:00 p.m. Eastern time on that day also
will receive that day's offering price. Otherwise, all purchase orders accepted
after the offering price is determined will be executed at the offering price
determined as of the close of regular trading on the Exchange on the next
trading day. See "What Class A Shares Will Cost" and "What Class C Shares Will
Cost."
 
     You also may purchase shares of the Fund directly by completing and signing
the Account Application in the back of this Prospectus and mailing it, along
with your payment to Heritage Series Trust -- Value Equity Fund, c/o Shareholder
Services, Heritage Asset Management, Inc., P. O. Box 33022, St. Petersburg, FL
33733.
 
                                        7
<PAGE>   10
 
     Shares may be purchased with Federal funds (a commercial bank's deposit
with the Federal Reserve Bank that can be transferred to another member bank on
the same day) sent by Federal Reserve or bank wire to State Street Bank and
Trust Company, Boston, Massachusetts, ABA # 011-000-028, Account # 3196-769-8.
Wire instructions should include (1) the name of the Fund, (2) the class of
shares to be purchased, (3) your account number as assigned by the Fund, and (4)
your name. To open a new account with Federal funds or by wire, you must contact
the Manager or your Representative to obtain a Heritage mutual fund account
number. Commercial banks may elect to charge a fee for wiring funds to State
Street Bank and Trust Company. For more information on "How to Buy Shares," see
"Investing in the Fund" in the SAI.
 
MINIMUM INVESTMENT REQUIRED/ACCOUNTS WITH LOW BALANCES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     Except as provided under "Investment Programs," the minimum initial
investment in the Fund is $1,000, and a minimum account balance of $500 must be
maintained. These minimum requirements may be waived at the discretion of the
Manager. In addition, initial investments in Individual Retirement Accounts
("IRAs") may be reduced or waived under certain circumstances. Contact the
Manager or your Representative for further information.
 
     Due to the high cost of maintaining accounts with low balances, it is
currently the Fund's policy to redeem Fund shares in any account if the account
balance falls below the required minimum value of $500, except for retirement
accounts. The shareholder will be given 30 days' notice to bring the account
balance to the minimum required or the Fund may redeem shares in the account and
pay the proceeds to the shareholder. The Fund does not apply this minimum
account balance requirement to accounts that fall below the minimum due to
market fluctuation.
 
INVESTMENT PROGRAMS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     A variety of automated investment options are available for the purchase of
Fund shares. These plans provide for automatic monthly investments of $50 or
more through various methods described below. You may change the amount to be
invested automatically or may discontinue this service at any time without
penalty. If you discontinue this service before reaching the required account
minimum, the account must be brought up to the minimum in order to remain open.
Shareholders desiring this service should complete the appropriate application
available from the Manager. You will receive a periodic confirmation of all
activity for your account.
 
AUTOMATIC INVESTMENT OPTIONS:
 
1. Bank Draft Investing -- You may authorize the Manager to process a monthly
   draft from your personal checking account for investment into the Fund. The
   draft is returned by your bank the same way a canceled check is returned.
 
2. Payroll Direct Deposit -- If your employer participates in a direct deposit
   program (also known as ACH Deposits) you may have all or a portion of your
   payroll directed to the Fund. This will generate a purchase transaction each
   time you are paid by your employer. Your employer will report to you the
   amount sent from each paycheck.
 
                                        8
<PAGE>   11
 
3. Government Direct Deposit -- If you receive a qualifying periodic payment
   from the U.S. Government or other agency that participates in Direct Deposit,
   you may have all or part of each check directed to purchase shares of the
   Fund. The U.S. Government or agency will report to you all payments made.
 
4. Automatic Exchange -- If you own shares of another Heritage mutual fund
   advised or administered by the Manager ("Heritage Mutual Fund"), you may
   elect to have a preset amount redeemed from that fund and exchanged into the
   corresponding class of shares of the Fund. You will receive a statement from
   the other Heritage Mutual Fund confirming the redemption.
 
     You may change or terminate any of the above options at any time.
 
RETIREMENT PLANS:
 
     Shares of the Fund may be purchased as an investment for Heritage IRA
plans. In addition, shares may be purchased as an investment for self-directed
IRAs, defined contribution plans, Simplified Employee Pension Plans ("SEPs"),
and other retirement plan plans.
 
     HERITAGE IRA.  Individuals who earn compensation and who have not reached
age 70 1/2 before the close of the year generally may establish a Heritage IRA.
You may make limited contributions to the Heritage IRA through the purchase of
shares of the Fund and/or other Heritage Mutual Funds. The Internal Revenue Code
of 1986, as amended (the "Code"), limits the deductibility of IRA contributions
to taxpayers who are not active participants (and whose spouses are not active
participants) in employer-provided retirement plans or who have adjusted gross
income below certain levels. Nevertheless, the Code permits other individuals to
make nondeductible IRA contributions up to $2,000 per year (or $2,250, if such
contributions also are made for a nonworking spouse and a joint return is
filed). A Heritage IRA also may be used for certain "rollovers" from qualified
benefit plans and from Section 403(b) annuity plans. For more detailed
information on the Heritage IRA, please contact the Manager.
 
     Fund shares also may be used as the investment medium for qualified plans
(defined benefit or defined contribution plans established by corporations,
partnerships or sole proprietorships). Contributions to qualified plans may be
made (within certain limits) on behalf of the employees, including
owner-employees, of the sponsoring entity.
 
     OTHER RETIREMENT PLANS.  Multiple participant payroll deduction retirement
plans also may purchase A shares of any Heritage Mutual Fund at a reduced sales
load on a monthly basis during the 13-month period following such a plan's
initial purchase. The sales load applicable to an initial purchase of A shares
will be that normally applicable under the schedule of sales load set forth in
this Prospectus to an investment 13 times larger than such initial purchase. The
sales load applicable to each succeeding monthly purchase of A shares will be
that normally applicable, under such schedule, to an investment equal to the sum
of (1) the total purchase previously made during the 13-month period and (2) the
current month's purchase multiplied by the number of months (including the
current month) remaining in the 13-month period. Sales loads previously paid
during such period will not be adjusted retroactively on the basis of later
purchases. Multiple participant payroll deduction retirement plans may purchase
C shares at any time.
 
ALTERNATIVE PURCHASE PLANS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     The alternative purchase plans offered by the Fund enable you to choose the
class of shares that you believe will be most beneficial given the amount of
your intended purchase, the length of time you expect to
 
                                        9
<PAGE>   12
 
hold the shares and other circumstances. You should consider whether, during the
anticipated length of your intended investment in the Fund, the accumulated
continuing distribution and service fees plus the CDSL on C shares would exceed
the initial sales load plus accumulated service fees on A shares purchased at
the same time. Another factor to consider is whether the potentially higher
yield of A shares due to lower ongoing charges will offset the initial sales
load paid on such shares. Representatives may receive different compensation for
sales of A shares than sales of C shares.
 
     If you purchase sufficient shares to qualify for a reduced sales load, you
may prefer to purchase A shares because similar reductions are not available on
the C shares. For example, if you intend to invest more than $1,000,000 in
shares of the Fund, you should purchase A shares. Moreover, all A shares are
subject to a lower 12b-1 fee and, accordingly, are expected to pay
correspondingly higher dividends on a per share basis. If your purchase will not
qualify for a reduced sales load, you still may wish to purchase A shares if you
expect to hold your shares for an extended period of time because, depending on
the number of years you hold the investment, the continuing distribution and
service fees on C shares eventually would exceed the initial sales load plus the
continuing service fee on A shares during the life of your investment. However,
because initial sales loads are deducted at the time of purchase, not all of the
purchase payment for A shares is invested initially.
 
     You might determine that it would be more advantageous to purchase C shares
in order to have all of your purchase payment invested initially. However, your
investment would remain subject to continuing distribution and service fees and,
for a one year period, be subject to a CDSL. For example, based on current fees
and expenses for the Fund and the maximum A sales load, you would have to hold A
shares approximately seven years before the accumulated distribution and
servicing fees on the C shares would exceed the initial sales load plus the
accumulated servicing fees on the A shares.
 
WHAT CLASS A SHARES WILL COST
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     Class A shares are sold on each day on which the Exchange is open. A shares
are sold at their next determined net asset value plus a sales load as described
below.
 
<TABLE>
<CAPTION>
                                              SALES LOAD AS A PERCENTAGE OF
                                            ----------------------------------
                                                                NET AMOUNT       DEALER CONCESSION
                                                                 INVESTED        AS PERCENTAGE OF
            AMOUNT OF PURCHASE              OFFERING PRICE   (NET ASSET VALUE)   OFFERING PRICE(1)
- ------------------------------------------  --------------   -----------------   -----------------
<S>                                         <C>              <C>                 <C>
Less than $25,000.........................       4.75%              4.99%               4.25%
$25,000-$49,999...........................       4.25%              4.44%               3.75%
$50,000-$99,999...........................       3.75%              3.90%               3.25%
$100,000-$249,999.........................       3.25%              3.36%               2.75%
$250,000-$499,999.........................       2.50%              2.56%               2.00%
$500,000-$999,999.........................       1.75%              1.78%               1.25%
$1,000,000 and over.......................       1.00%              1.01%               0.75%
</TABLE>
 
(1) During certain periods, the Distributor may pay 100% of the sales load to
    participating dealers. Otherwise, it will pay the Dealer Concession shown
    above.
 
     Class A shares may be sold at net asset value without any sales load to the
Manager and the Subadviser; current and retired officers and Trustees of the
Trust; directors, officers and full-time employees of the Manager, the
Subadviser of any Heritage Mutual Fund, the Distributor and their affiliates;
registered representatives of broker-dealers that are parties to dealer
agreements with the Distributor (or financial
 
                                       10
<PAGE>   13
 
institutions that have arrangements with such broker-dealers); directors,
officers and full-time employees of banks that are parties to agency agreements
with the Distributor, and all such persons' immediate relatives and their
beneficial accounts. Shares also may be sold at net asset value without any
sales load to shareholders referred to the Fund by the Subadviser. In addition,
the American Psychiatric Association (the "APA Group") has entered into an
agreement with the Distributor that allows its members to purchase A shares at a
sales load equal to two-thirds of the percentages in the above table. The Dealer
concession also will be adjusted in a like manner. Members of the APA Group also
are eligible to purchase A shares at net asset value in amounts equal to the
value of shares redeemed from other mutual funds that were purchased under
reduced sales load programs available to their organization. A shares also may
be purchased without sales loads by investors who participate in certain
broker-dealer wrap fee investment programs.
 
     Class A shares also may be purchased at net asset value by trust companies
and bank trust departments for funds over which they exercise exclusive
discretionary authority and that are held in a fiduciary, agency, advisory,
custodial or similar capacity. Such purchases are subject to minimum
requirements with respect to amount of purchase. Currently, the minimum purchase
required is $1,000,000, which may be invested over a period of 13 months. The
minimum may be changed from time to time by the Distributor. The minimum may be
aggregated between A shares of the Fund and A shares of any other Heritage
Mutual Fund that would be subject to a sales load. Cities, counties, states or
instrumentalities, and their departments, authorities or agencies are able to
purchase A shares of the Fund at net asset value as long as certain conditions
are met.
 
HERITAGE NET ASSET VALUE ("NAV") TRANSFER PROGRAM
 
     Class A shares of the Fund may be sold at net asset value without any sales
load under the Manager's NAV Transfer Program. To qualify for the NAV Transfer
Program, you must provide adequate proof that you recently redeemed shares from
a load or no-load mutual fund other than a Heritage Mutual Fund or any money
market fund. To provide adequate proof you must complete a qualification form
and provide a statement showing the value liquidated from the other mutual fund
within time parameters set by the Manager. In addition, shares of the other fund
must have been liquidated no more than 90 days prior to the purchase of shares
of a Heritage Mutual Fund.
 
COMBINED PURCHASE PRIVILEGE (RIGHT OF ACCUMULATION)
 
     You may qualify for the sales load reductions indicated in the above sales
load schedule by combining purchases of A shares into a single "purchase," if
the resulting "purchase" totals at least $25,000. The term "purchase" refers to
a single purchase by an individual, or to concurrent purchases that, in the
aggregate, are at least equal to the prescribed amounts, by an individual, his
spouse and their children under the age of 21 years purchasing A shares for his
or their own account; a single purchase by a trustee or other fiduciary
purchasing A shares for a single trust, estate or single fiduciary account
although more than one beneficiary is involved; or a single purchase for the
employee benefit plans of a single employer. A "purchase" also may include A
shares purchased at the same time through a single selected dealer of any other
Heritage Mutual Fund subject to a sales load. To qualify for the Combined
Purchase Privilege on a purchase through a selected dealer, you or the selected
dealer must provide the Distributor with sufficient information to verify that
each purchase qualifies for the privilege or discount.
 
STATEMENT OF INTENTION
 
     You also may obtain the reduced sales loads shown under "What Class A
Shares Will Cost" by means of a written Statement of Intention, which expresses
your intention to invest not less than $25,000 within a period
 
                                       11
<PAGE>   14
 
of 13 months in A shares of the Fund or A shares of any other Heritage Mutual
Fund subject to a sales load ("Statement of Intention").
 
     Investors qualifying for the Combined Purchase Privilege described above
may purchase A shares of the Heritage Mutual Funds under a single Statement of
Intention. For example, if, at the time an investor signs a Statement of
Intention to invest at least $25,000 in A shares of the Fund, the investor and
the investor's spouse each purchase A shares worth $5,000 (for a total of
$10,000), then it will be necessary only to invest a total of $15,000 during the
following 13 months in A shares or any other Heritage Mutual Fund subject to a
sales load to qualify for the reduced sales load on the total amount being
invested.
 
     The Statement of Intention is not a binding obligation upon the investor to
purchase the full amount indicated. The minimum initial investment under a
Statement of Intention is 5% of such amount. If you would like to enter into a
Statement of Intention in conjunction with your initial investment in A shares
of the Fund, please complete the appropriate portion of the Account Application
at the back of this Prospectus. Current Fund shareholders desiring to do so can
obtain a form of Statement of Intention by contacting the Manager or the
Distributor at the address or telephone number listed on the cover of this
Prospectus or from their Representative.
 
REINSTATEMENT PRIVILEGE
 
     A shareholder who has redeemed any or all of his A shares of the Fund may
reinvest all or any portion of the redemption proceeds in A shares at net asset
value without any sales load, provided that such reinvestment is made within 90
calendar days after the redemption date. A shareholder who has redeemed any or
all of his C shares of the Fund and has paid a CDSL on those shares or has held
those shares long enough so that the CDSL no longer applies, may reinvest all or
any portion of the redemption proceeds in C shares of the Fund at net asset
value without paying a CDSL on future redemptions of those shares, provided that
such reinvestment is made within 90 calendar days after the redemption date. A
reinstatement pursuant to this privilege will not cancel the redemption
transaction; therefore, (1) any gain realized on the transaction will be
recognized for Federal income tax purposes, while (2) any loss realized will not
be recognized to the extent the proceeds are reinvested in shares of the Fund.
See "Taxes." The reinstatement privilege may be utilized by a shareholder only
once, irrespective of the number of shares redeemed, except that the privilege
may be utilized without limitation in connection with transactions whose sole
purpose is to transfer a shareholder's interest in the Fund to his defined
contribution plan, IRA or SEP. Investors must notify the Fund if they intend to
exercise the reinstatement privilege.
 
     For more information on "What Class A Shares Will Cost" and a further
explanation of instances in which the sales load will be waived or reduced, see
"Investing in the Fund" in the SAI.
 
WHAT CLASS C SHARES WILL COST
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     A CDSL of 1% is imposed on C shares if, within one year of purchase, you
redeem an amount that causes the current value of your account to fall below the
total dollar amount of C shares purchased subject to the CDSL. The CDSL will not
be imposed on the redemption of C shares acquired as dividends or other
distributions, or on any increase in the net asset value of the redeemed C
shares above the original purchase price. Thus, the CDSL will be imposed on the
lower of net asset value or purchase price.
 
     Redemptions will be processed in a manner intended to minimize the amount
of redemption that will be subject to the CDSL. When calculating the CDSL, it
will be assumed that the redemption is made first of C
 
                                       12
<PAGE>   15
 
shares acquired as dividends, second of C shares that have been held for over
one year, and finally of C shares held for less than one year on a first-in
first-out basis.
 
     For example, assume you purchase 100 C shares at $10 per share (for a total
cost of $1,000) and, during the year you purchase such shares, the net asset
value increases to $12 per share and you acquire 10 additional shares as
dividends. If you redeem 50 shares (or $600) within the first year of purchase,
10 shares would not be subject to the CDSL because redemptions are made first of
shares acquired as dividends. With respect to the remaining shares, the CDSL is
applied only to the original cost of $10 per share and not to the higher net
asset value of $12 per share. Therefore, only 40 of the 50 shares (or $400)
being redeemed would be subject to a CDSL at a rate of 1%.
 
     WAIVER OF THE CONTINGENT DEFERRED SALES LOAD.  The CDSL is currently waived
for (1) any partial or complete redemption in connection with a distribution
without penalty under Section 72(t) of the Code from a qualified retirement
plan, including a Keogh Plan or IRA upon attaining age 70 1/2; (2) any
redemption resulting from a tax-free return of an excess contribution to a
qualified employer retirement plan or an IRA; (3) any partial or complete
redemption following death or disability (as defined in Section 72(m)(7) of the
Code) of a shareholder (including one who owns the shares as joint tenant with
his spouse) from an account in which the deceased or disabled is named, provided
the redemption is requested within one year of the death or initial
determination of disability; (4) certain periodic redemptions under the
Systematic Withdrawal Plan from an account meeting certain minimum balance
requirements, in amounts representing certain maximums established from time to
time by the Distributor (currently a maximum of 12% annually of the account
balance at the beginning of the Systematic Withdrawal Plan); or (5) involuntary
redemptions by the Fund of C shares in shareholder accounts that do not comply
with the minimum balance requirements. The Distributor may require proof of
documentation prior to waiver of the CDSL described in sections (1) through (4)
above, including distribution letters, certification by plan administrators,
applicable tax forms or death certificates or physicians certificates.
 
     For more information about C shares, see "Reinstatement Privilege"
and"Exchange Privilege."
 
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     Redemptions of Fund shares can be made by:
 
     CONTACTING YOUR REPRESENTATIVE.  Your Representative will transmit an order
to the Fund for redemption and may charge you a fee for this service.
 
     TELEPHONE REQUEST.  You may redeem shares by placing a telephone request to
the Fund (800-421-4184) prior to the close of regular trading on the Exchange.
If you do not wish to have telephone exchange/redemption privileges, you should
so elect by completing the appropriate section of the Account Application. The
Fund, Manager, Distributor and their Trustees, directors, officers and employees
are not liable for any loss arising out of telephone instructions they
reasonably believe are authentic. These parties will employ reasonable
procedures to confirm that telephone instructions are authentic. To the extent
that the Fund, Manager, Distributor and their Trustees, directors, officers and
employees do not follow reasonable procedures, some or all of them may be liable
for losses due to unauthorized or fraudulent transactions. For more information
on these procedures, see "Redeeming Shares -- Telephone Transactions" in the
SAI. You may elect to have the funds wired to the bank account specified on the
Account Application. Funds normally will be sent the next business day, and you
will be charged a wire fee by the Manager (currently $5.00). For redemptions of
less than $25,000, you may request that the check be mailed to your address of
record,
 
                                       13
<PAGE>   16
 
providing that such address has not been changed in the past 60 days. For your
protection, all other redemption checks will be transferred to the bank account
specified on the Account Application.
 
     WRITTEN REQUEST.  You may redeem shares by sending a written request for
redemption to "Heritage Series Trust-Value Equity Fund, c/o Shareholder
Services, Heritage Asset Management, Inc., P.O. Box 33022, St. Petersburg, FL
33733." Signature guarantees will be required on the following types of
requests: redemptions from any account that has had an address change in the
past 60 days, redemptions greater than $25,000, redemptions that are sent to an
address other than the address of record and exchanges or transfers into other
Heritage accounts that have different titles. The Manager will transmit the
order to the Fund for redemption.
 
     SYSTEMATIC WITHDRAWAL PLAN.  Withdrawal plans are available that provide
for regular periodic withdrawals of $50 or more on a monthly, quarterly,
semiannual or annual basis. Under these plans, sufficient shares of the Fund are
redeemed to provide the amount of the periodic withdrawal payment. The purchase
of A shares while participating in the Systematic Withdrawal Plan ordinarily
will be disadvantageous to you because you will be paying a sales load on the
purchase of those shares at the same time that you are redeeming A shares upon
which you may already have paid a sales load. Therefore, the Fund will not
knowingly permit the purchase of A shares through the Automatic Investment Plan
if you are at the same time making systematic withdrawals of A shares. The
Manager reserves the right to cancel systematic withdrawals if insufficient
shares are available for two or more consecutive months.
 
     Please contact the Manager or your Representative for further information
or see "Redeeming Shares" in the SAI.
 
RECEIVING PAYMENT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     If a request for redemption is received by the Fund in good order (as
described below) before the close of regular trading on the Exchange, the shares
will be redeemed at the net asset value per share determined at the close of
regular trading on the Exchange on that day, less any applicable CDSL for C
shares. Requests for redemption received by the Fund after the close of regular
trading on the Exchange will be executed at the net asset value determined as of
the close of regular trading on the Exchange on the next trading day, less any
applicable CDSL for C shares.
 
     Payment for shares redeemed by the Fund normally will be made on the
business day after redemption was made. If the shares to be redeemed recently
have been purchased by personal check, the Fund may delay mailing a redemption
check until the purchase check has cleared, which may take up to seven days.
This delay can be avoided by wiring funds for purchases. The proceeds of a
redemption may be more or less than the original cost of Fund shares.
 
     A redemption request will be considered to be received in "good order" if:
 
     - the number or amount of shares and the class of shares to be redeemed and
       the shareholder account number are indicated;
 
     - any written request is signed by a shareholder and by all co-owners of
       the account with exactly the same name or names used in establishing the
       account;
 
     - any written request is accompanied by certificates representing the
       shares that have been issued, if any, and the certificates have been
       endorsed for transfer exactly as the name or names appear on the
       certificates or an accompanying stock power has been attached; and
 
                                       14
<PAGE>   17
 
     - the signatures on any written redemption request of $25,000 or more and
       on any certificates for shares (or an accompanying stock power) have been
       guaranteed by a national bank, a state bank that is insured by the
       Federal Deposit Insurance Corporation, a trust company, or by any member
       firm of the New York, American, Boston, Chicago, Pacific or Philadelphia
       Stock Exchanges. Signature guarantees also will be accepted from savings
       banks and certain other financial institutions that are deemed acceptable
       by the Manager, as transfer agent, under its current signature guarantee
       program.
 
     The Fund has the right to suspend redemption or postpone payment at times
when the Exchange is closed (other than customary weekend or holiday closings)
or during periods of emergency or other periods as permitted by the SEC. In the
case of any such suspension, you may either withdraw your request for redemption
or receive payment based upon the net asset value next determined after the
suspension is lifted. If a redemption check remains outstanding after six
months, the Manager reserves the right to redeposit those funds into your
account. For more information on receiving payment, see "Redeeming
Shares -- Receiving Payment" in the SAI.
 
EXCHANGE PRIVILEGE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     If you have held A shares or C shares for at least 30 days, you may
exchange some or all of your shares for shares of the same class of any other
Heritage Mutual Fund. All exchanges will be based on the respective net asset
values of the Heritage Mutual Funds involved. All exchanges are subject to the
minimum investment requirements and any other applicable terms set forth in the
prospectus for the Heritage Mutual Fund whose shares are being acquired.
Exchanges involving the redemption of shares recently purchased by check will be
permitted only after the Heritage Mutual Fund whose shares have been tendered
for exchange is reasonably assured that the check has cleared, normally seven
calendar days following the purchase date. Exchanges of shares of Heritage
Mutual Funds generally will result in the realization of a taxable gain or loss
for Federal income tax purposes.
 
     For purposes of calculating the commencement of the one-year CDSL holding
period for shares exchanged from the Fund to the C shares of any other Heritage
Mutual Fund, except Heritage Cash Trust -- Money Market Fund ("Money Market
Fund"), the original purchase date of those shares exchanged will be used. Any
time period that the exchanged shares were held in the Money Market Fund will
not be included in this calculation.
 
     If you exchange A shares or C shares for corresponding shares of the Money
Market Fund, you may, at any time thereafter, exchange such shares for the
corresponding class of shares of any other Heritage Mutual Fund. Because the
Money Market Fund is a no-load mutual fund, if you exchange shares of that fund
acquired by purchase (rather than exchange) for shares of another Heritage
Mutual Fund, you will be subject to the sales load, if any, that would be
applicable to a purchase of that Heritage Mutual Fund. In addition, if you
exchange C shares of the Fund for corresponding shares of the Money Market Fund,
the period during which an investment is held in shares of the Money Market Fund
will not count for purposes of calculating the one-year CDSL holding period for
such shares. As a result, if you redeem C shares of the Money Market Fund before
the expiration of the one-year CDSL holding period, you will be subject to the
applicable CDSL. A shares of the Fund may be exchanged for A shares of the
Heritage Cash Trust -- Municipal Money Market Fund, which is the only class of
shares offered by that fund. Because the Heritage Cash Trust -- Municipal Money
Market Fund in a no-load mutual fund, if you exchange shares of that fund
acquired by purchase (rather than exchange) for shares of another Heritage
Mutual Fund, you also will be subject to the sales load,
 
                                       15
<PAGE>   18
 
if any, that would be applicable to a purchase of that Heritage Mutual Fund. C
shares are not eligible for exchange into the Heritage Cash Trust -- Municipal
Money Market Fund.
 
     Shares acquired pursuant to a telephone request for exchange will be held
under the same account registration as the shares redeemed through such
exchange. For a discussion of limitation of liability of certain entities, see
"How to Redeem Shares -- Telephone Request."
 
     Telephone exchanges can be effected by calling the Manager at 800-421-4184
or by calling your Representative. In the event that you or your Representative
are unable to reach the Manager by telephone, an exchange can be effected by
sending a telegram to Heritage Asset Management, Inc., attention: Shareholder
Services. Due to the volume of calls or other unusual circumstances, telephone
exchanges may be difficult to implement during certain time periods.
 
     The exchange privilege is available only in states where shares of the
Heritage Mutual Fund being acquired may be legally sold. Each Heritage Mutual
Fund reserves the right to reject any order to acquire its shares through
exchange or otherwise to restrict or terminate the exchange privilege at any
time. In addition, each Heritage Mutual Fund may terminate the exchange
privilege upon 60 days' notice. For further information on this exchange
privilege, contact the Manager or your Representative and see "Exchange
Privilege" in the SAI.
 
                             MANAGEMENT OF THE FUND
 
BOARD OF TRUSTEES
 
     The business and affairs of the Fund are managed by or under the direction
of the Board of Trustees. The Trustees are responsible for managing the Fund's
business affairs and for exercising all of the Fund's powers except those
reserved to the shareholders. A Trustee may be removed by the other Trustees or
by a two-thirds vote of the outstanding Fund shares.
 
INVESTMENT ADVISER, FUND ACCOUNTANT, ADMINISTRATOR AND TRANSFER AGENT
 
     Heritage Asset Management, Inc. is the Fund's investment adviser, fund
accountant, administrator and transfer agent. The Manager is responsible for
reviewing and establishing investment policies for the Fund as well as
administering the Fund's noninvestment affairs. The Manager is a wholly-owned
subsidiary of Raymond James Financial, Inc., which, together with its
subsidiaries, provides a wide range of financial services to retail and
institutional clients. The Manager manages, supervises and conducts the business
and administrative affairs of the Fund and the other Heritage Mutual Funds with
net assets totaling approximately $2 billion as of January 31, 1996. The Fund
pays the Manager directly for fund accounting and transfer agent services.
 
     The Manager's annual investment advisory and administration fee is 0.75% of
the Fund's average daily net assets. This fee is computed daily and paid monthly
and is higher than that charged for most other mutual funds with a similar
investment objective. The Manager reserves the right to discontinue any
voluntary waivers of its fees or reimbursements to the Fund in the future. The
advisory fee also may be reduced pursuant to regulations in various states where
Fund shares are qualified for sale which impose limitations on the annual
expense ratio of the Fund. The Manager may recover fees waived in the previous
two years if the recovery does not cause the Fund to exceed applicable expense
limitations.
 
                                       16
<PAGE>   19
 
SUBADVISER
 
     The Manager has entered into an agreement with Eagle Asset Management, Inc.
to provide investment advice and portfolio management services, including
placement of brokerage orders, to the Fund for a fee payable by the Manager
equal to 50% of the fees payable to the Manager by the Fund without regard to
any reduction in fees actually paid to the Manager as a result of state expense
limitations. The Subadviser is a wholly-owned subsidiary of Raymond James
Financial, Inc. The Subadviser acts as adviser to Heritage Series Trust -- Eagle
International Equity Portfolio. The Subadviser also acts as subadviser to the
Trust's Small Cap Stock Fund and Growth Equity Fund, Heritage Capital
Appreciation Trust (although no assets currently are allocated to the
Subadviser) and Heritage Income-Growth Trust, and advises private investment
accounts with net assets totalling approximately $2 billion as of January 31,
1996. The Subadviser may use the Distributor as broker for agency transactions
in listed and over-the-counter securities at commission rates and under
circumstances consistent with the policy of best price and execution. See
"Brokerage Practices" in the SAI.
 
PORTFOLIO MANAGEMENT
 
     Christian C. Bertelsen has served as portfolio manager for the Fund since
its inception on December 30, 1994. He is responsible for the day-to-day
management of the Fund's investment portfolio, subject to the general oversight
of the Manager and the Board of Trustees. Mr. Bertelsen is a Senior Vice
President of the Subadviser. Mr. Bertelsen joined the Subadviser in 1993. Mr.
Bertelsen became Chief Investment Officer of Dreman Value Advisors, Inc. on
March 1, 1996. Mr. Bertelsen also remains an employee of the Subadvisor under an
agreement which is scheduled to expire on May 31, 1996. From 1986 to 1993, Mr.
Bertelsen held portfolio management positions with Colonial Management
Associates, Inc.
 
                        SHAREHOLDER AND ACCOUNT POLICIES
 
DIVIDENDS AND OTHER DISTRIBUTIONS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     Dividends from net investment income are declared and paid annually. The
Fund also distributes to shareholders substantially all net realized capital
gains on portfolio securities and net realized gains from foreign currency
transactions after the end of the year in which the gains are realized.
Dividends and other distributions on shares held in retirement plans and by
shareholders maintaining a Systematic Withdrawal Plan are declared and paid in
additional Fund shares. Other shareholders may elect to:
 
     - receive both dividends and other distributions in additional Fund shares;
 
     - receive dividends in cash and other distributions in additional Fund
       shares;
 
     - receive both dividends and other distributions in cash; or
 
     - receive both dividends and other distributions in cash for investment
       into another Heritage Mutual Fund.
 
     If you select none of these options, the first option will apply. In any
case when you receive a dividend or other distribution in additional Fund
shares, your account will be credited with shares valued at their net asset
value determined at the close of regular trading on the Exchange on the day
following the record date for the dividend or other distribution. Distribution
options can be changed at any time by notifying the Manager in writing.
 
                                       17
<PAGE>   20
 
     Dividends paid by the Fund with respect to its A shares and C shares are
calculated in the same manner and at the same time and will be in the same
amount relative to the aggregate net asset value of the shares in each class,
except that dividends on C shares may be lower than dividends on A shares
primarily as a result of the higher distribution fee and class-specific expenses
applicable to C shares.
 
DISTRIBUTION PLANS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     As compensation for services rendered and expenses borne by the Distributor
in connection with the distribution of A shares and in connection with personal
services rendered to Class A shareholders and the maintenance of Class A
shareholder accounts, the Fund may pay the Distributor a service fee of up to
0.25% and a distribution fee of up to 0.10% of the Fund's average daily net
assets attributable to A shares. The Fund currently pays the Distributor a
service fee of up to 0.25% of Class A average daily net assets. This fee is
computed daily and paid monthly.
 
     As compensation for services rendered and expenses borne by the Distributor
in connection with the distribution of C shares and in connection with personal
services rendered to Class C shareholders and the maintenance of Class C
shareholder accounts, the Fund pays the Distributor a service fee of 0.25% and a
distribution fee of 0.75% of the Fund's average daily net assets attributable to
C shares. This fee is computed daily and paid monthly.
 
     The above-referenced fees paid to the Distributor are made under
Distribution Plans adopted pursuant to Rule 12b-1 under the 1940 Act. These
Plans authorize the Distributor to spend such fees on any activities or expenses
intended to result in the sale of A shares and C shares, including compensation
(in addition to the sales load) paid to Representatives; advertising; salaries
and other expenses of the Distributor relating to selling or servicing efforts;
expenses of organizing and conducting sales seminars; printing of prospectuses,
statements of additional information and reports for other than existing
shareholders; and preparation and distribution of advertising material and sales
literature and other sales promotion expenses. The Distributor has entered into
dealer agreements with participating dealers who also will distribute shares of
the Fund.
 
     If either Plan is terminated, the obligation of the Fund to make payments
to the Distributor pursuant to the Plan will cease and the Fund will not be
required to make any payment past the date the Plan terminates.
 
TAXES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     The Fund intends to continue to qualify for treatment as a regulated
investment company under Subchapter M of the Code. In each taxable year that the
Fund does so, it (but not its shareholders) will be relieved of Federal income
tax on that part of its investment company taxable income (generally consisting
of net investment income, net short-term capital gains and net gains from
certain foreign currency transactions) and net capital gain (the excess of net
long-term capital gain over net short-term capital loss) that is distributed to
its shareholders. Dividends from the Fund's investment company taxable income
are taxable to its shareholders as ordinary income, to the extent of the Fund's
earnings and profits, whether received in cash or in additional Fund shares.
Distributions of the Fund's net capital gain, when designated as such, are
taxable to its shareholders as long-term capital gains, whether received in cash
or in additional Fund shares and regardless of the length of time the shares
have been held. No substantial portion of the dividends paid by the Fund is
expected to be eligible for the dividends-received deduction allowed to
corporations.
 
                                       18
<PAGE>   21
 
     Dividends and other distributions declared by the Fund in November or
December of any year and payable to shareholders of record on a date in one of
those months will be deemed to have been paid by the Fund and received by the
shareholders on December 31 of that year if they are paid by the Fund during the
following January. Shareholders receive Federal income tax information regarding
dividends and other distributions after the end of each year. The Fund is
required to withhold 31% of all dividends, capital gain distributions and
redemption proceeds payable to individuals and certain other noncorporate
shareholders who do not provide the Fund with a correct taxpayer identification
number. Withholding at that rate also is required from dividends and capital
gain distributions payable to such shareholders who otherwise are subject to
backup withholding.
 
     The foregoing is only a summary of some of the important Federal income tax
considerations generally affecting the Fund and its shareholders. See the SAI
for a further discussion. There may be other Federal, state or local tax
considerations applicable to a particular investor. You are therefore urged to
consult your tax adviser.
 
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
     Each share of the Fund gives the shareholder one vote in matters submitted
to shareholders for a vote. All A shares and C shares of the Fund have equal
voting rights, except that in matters affecting only a particular class, only
shares of that class are entitled to vote. As a portfolio of a Massachusetts
business trust, the Fund is not required to hold annual shareholder meetings.
Shareholder approval will be sought only for certain changes in the Fund's
operation and for the election of Trustees under certain circumstances. Trustees
may be removed by the other Trustees or shareholders at a special meeting. A
special meeting of shareholders shall be called by the Trustees upon the written
request of shareholders owning at least 10% of the Fund's outstanding shares.
 
                                       19
<PAGE>   22
 
     No dealer, salesman or other person has been authorized to give any
information or to make any representation other than that contained in this
Prospectus in connection with the offer contained in this Prospectus, and, if
given or made, such other information or representations must not be relied upon
as having been authorized by the Trust or the Distributor. This Prospectus does
not constitute an offering in any state in which such offering may not lawfully
be made.
<PAGE>   23
 
                         [HERITAGE SERIES TRUST LOGO]
                              VALUE EQUITY FUND
                                  PROSPECTUS
 
                                March 1, 1996
 
     Heritage Series Trust
     Value Equity Fund
     P.O. Box 33022
     St. Petersburg, FL 33733
 
     --------------------------------------------
 
     Address Change Requested
 
     Prospectus
 
     INVESTMENT ADVISER/
     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
 
     CUSTODIAN
     State Street Bank and Trust Company
     P.O. Box 1912
     Boston, MA 02105
 
     LEGAL COUNSEL
     Kirkpatrick & Lockhart LLP
<PAGE>






                         STATEMENT OF ADDITIONAL INFORMATION 
                                HERITAGE SERIES TRUST
                       SMALL CAP STOCK FUND & VALUE EQUITY FUND


              This Statement  of Additional  Information ("SAI") dated  March 1,
     1996, should be read with the Prospectuses of the Small  Cap Stock Fund and
     Value Equity  Fund  (each  a  "Fund"  and  collectively,  the  "Funds")  of
     Heritage Series Trust  dated March 1, 1996.   This SAI is not  a prospectus
     itself.  To  receive a copy of either  Fund's Prospectus, write to Heritage
     Asset Management, Inc. at the address below or call (800) 421-4184.

                           HERITAGE ASSET MANAGEMENT, INC.
                                880 Carillon Parkway
                            St. Petersburg, Florida 33716

                                  TABLE OF CONTENTS
                                                                            Page
                                                                            ----

     GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . .   1
     INVESTMENT INFORMATION  . . . . . . . . . . . . . . . . . . . . . . . .   1
              Investment Objectives  . . . . . . . . . . . . . . . . . . . .   1
              Investment Policies  . . . . . . . . . . . . . . . . . . . . .   1
              Industry Classifications . . . . . . . . . . . . . . . . . . .   8
              Hedging Strategies . . . . . . . . . . . . . . . . . . . . . .   9
     INVESTMENT LIMITATIONS  . . . . . . . . . . . . . . . . . . . . . . . .  18
     NET ASSET VALUE . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21
     PERFORMANCE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . .  22
     INVESTING IN THE FUNDS  . . . . . . . . . . . . . . . . . . . . . . . .  24
              Alternative Purchase Plans . . . . . . . . . . . . . . . . . .  24
              Class A Purchases at Net Asset Value . . . . . . . . . . . . .  25
              Class A Combined Purchase Privilege 
                      (Right of Accumulation)  . . . . . . . . . . . . . . .  25
              Class A Statement of Intention . . . . . . . . . . . . . . . .  26
     REDEEMING SHARES  . . . . . . . . . . . . . . . . . . . . . . . . . . .  27
              Systematic Withdrawal Plan . . . . . . . . . . . . . . . . . .  27
              Telephone Transactions . . . . . . . . . . . . . . . . . . . .  28
              Redemptions in Kind  . . . . . . . . . . . . . . . . . . . . .  28
              Receiving Payment  . . . . . . . . . . . . . . . . . . . . . .  29
     EXCHANGE PRIVILEGE  . . . . . . . . . . . . . . . . . . . . . . . . . .  29
     TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30
     FUND INFORMATION  . . . . . . . . . . . . . . . . . . . . . . . . . . .  35
              Management of the Funds  . . . . . . . . . . . . . . . . . . .  35
              Investment Adviser and Administrator; Subadvisers  . . . . . .  37
              Brokerage Practices  . . . . . . . . . . . . . . . . . . . . .  40
              Distribution of Shares . . . . . . . . . . . . . . . . . . . .  42
              Administration of the Funds  . . . . . . . . . . . . . . . . .  44
              Potential Liability  . . . . . . . . . . . . . . . . . . . . .  45
     APPENDIX  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   A-1
     REPORT OF THE INDEPENDENT ACCOUNTANTS
              Small Cap Stock Fund . . . . . . . . . . . . . . . . . . . .   A-5
              Value Equity Fund  . . . . . . . . . . . . . . . . . . . . .   A-6
     FINANCIAL STATEMENTS
              Small Cap Stock Fund . . . . . . . . . . . . . . . . . . . .   A-7
              Value Equity Fund  . . . . . . . . . . . . . . . . . . . . .  A-18
<PAGE>






     GENERAL INFORMATION
     -------------------

              Heritage  Series   Trust  (the  "Trust")  was   established  as  a
     Massachusetts  business   trust  under   a  Declaration   of  Trust   dated
     October 28, 1992.  It is  registered as an open-end  diversified management
     investment company under  the Investment Company  Act of  1940, as  amended
     (the "1940 Act").  The  Trust consists of four  portfolios:  the Small  Cap
     Stock  Fund ("Small  Cap"),  the Value  Equity  Fund ("Value  Equity"), the
     Growth Equity  Fund and  the Eagle  International Equity  Portfolio.   This
     Statement  of Additional  Information ("SAI") relates  solely to  Small Cap
     and Value Equity.   Each Fund offers two classes of shares,  Class A shares
     sold  subject to a  front-end sales  load ("A  shares") and Class  C shares
     sold subject to a contingent deferred sales load ("CDSL") ("C shares").

     INVESTMENT INFORMATION
     ----------------------

              Investment Objectives
              ---------------------

              The  investment  objective   of  each  Fund   is  stated   in  its
     Prospectus.

              Investment Policies
              -------------------

              The  following information is in addition  to and supplements each
     Fund's investment policies set forth in its Prospectus.

              AMERICAN DEPOSITORY RECEIPTS.   Each Fund may  invest in sponsored
     and unsponsored  American Depository Receipts ("ADRs").   ADRs are receipts
     typically issued  by a U.S.  bank or trust company  evidencing ownership of
     the  underlying  securities  of  foreign  issuers.    Generally,  ADRs,  in
     registered form, are  denominated in the  same currency  as the  securities
     into which they may be  converted.  ADRs are  subject to many of the  risks
     inherent   in  investing  in  foreign  securities,  including  confiscatory
     taxation   or   nationalization,   and    less   comprehensive   disclosure
     requirements for the underlying security.  In addition, the issuers of  the
     securities  underlying  unsponsored  ADRs are  not  obligated  to  disclose
     material information  in the  United States  and, therefore,  there may  be
     less information  available regarding such issuers  and there may not  be a
     correlation between such information and the market value of the ADRs.

              BANKERS'   ACCEPTANCES.   Each  Fund   may   invest   in  bankers'
     acceptances,  which  are  short-term credit  instruments  used  to  finance
     commercial transactions.   Generally, an  acceptance is a  time draft drawn
     on a bank by an exporter  or an importer to obtain a stated amount of funds
     to pay  for specific merchandise.   The draft is then  "accepted" by a bank
     that, in effect,  unconditionally guarantees to  pay the face value  of the
     instrument on its  maturity date.  The  acceptance may then be held  by the
     accepting bank as  an asset, or it may  be sold in the secondary  market at
     the going rate of  interest for a specified maturity.   Although maturities
<PAGE>






     for  acceptances  can  be  as  long  as  270  days,  most acceptances  have
     maturities of six months or less.

              CERTIFICATES  OF  DEPOSIT.     Each  Fund   may  invest   in  bank
     certificates  of   deposit  ("CDs").     The   Federal  Deposit   Insurance
     Corporation is an  agency of the U.S. Government  that insures the deposits
     of certain  banks and  savings and  loan  associations up  to $100,000  per
     deposit.  The interest on  such deposits may not  be insured if this  limit
     is exceeded.   Current federal regulations also permit such institutions to
     issue insured  negotiable  CDs in  amounts  of  $100,000 or  more,  without
     regard to the  interest rate ceilings on  other deposits.  To  remain fully
     insured,  these  investments currently  must  be  limited to  $100,000  per
     insured bank or savings and loan association.  Investments in CDs are  made
     only with domestic institutions with assets in excess of $1 billion.
       
              COMMERCIAL PAPER.   Each Fund may invest in commercial  paper that
     is limited to  obligations rated Prime-1  or Prime-2  by Moody's  Investors
     Service,  Inc. ("Moody's")  or  A-1 or  A-2  by Standard  & Poor's  Ratings
     Services  ("S&P").   Commercial  paper  includes notes,  drafts  or similar
     instruments payable on demand or having a maturity  at the time of issuance
     not  exceeding  nine months,  exclusive of  days  of grace  or  any renewal
     thereof.  See the Appendix for a description of commercial paper ratings.

              CONVERTIBLE  SECURITIES.   Each  Fund  may  invest  in convertible
     securities that are rated as investment grade (rated "BBB" or above by  S&P
     or  "Baa"  or above  by  Moody's)  or,  if unrated,  are  deemed  to be  of
     comparable  quality by the Fund's  investment subadviser.  Investment grade
     securities rated "BBB"  or "Baa" are  considered to  have some  speculative
     characteristics.   While no  securities investment  is  without some  risk,
     investments in convertible  securities generally entail less risk  than the
     issuer's common  stock, although the extent  to which such risk  is reduced
     depends in large measure upon the degree to  which the convertible security
     sells above its  value as  a fixed-income security.   The subadvisers  will
     decide  to invest  in  convertible  securities  based  upon  a  fundamental
     analysis of the long-term attractiveness  of the issuer and  the underlying
     common stock, the  evaluation of the relative attractiveness of the current
     price of the underlying  common stock, and the judgment of the value of the
     convertible  security  relative  to the  common  stock  at  current prices.
     Convertible  securities in  which each  Fund may  invest include  corporate
     bonds, notes  and preferred  stock that  can be  converted into  (exchanged
     for)  common  stock.    Convertible  securities  combine  the  fixed-income
     characteristics  of  bonds  and  preferred  stock  with  the  potential for
     capital  appreciation.   As with all  debt securities, the  market value of
     convertible securities  tends to  decline as  interest rates increase  and,
     conversely, to  increase  as interest  rates  decline.   While  convertible
     securities  generally  offer   lower  interest  or  dividend   yields  than
     nonconvertible  debt securities  of  similar quality,  they  do enable  the
     investor to  benefit from increases in  the market price of  the underlying
     common stock.  

              DEBT SECURITIES.  Each  Fund may invest in  debt securities.   The
     market  value of debt securities is influenced  primarily by changes in the

                                       -  2  -
<PAGE>






     level of  interest rates.   Generally, as  interest rates rise,  the market
     value of  debt securities decreases.   Conversely, as  interest rates fall,
     the market  value of debt securities increases.   Factors that could result
     in a rise  in interest rates,  and a decrease in  the market value of  debt
     securities, include an increase in inflation or inflation expectations,  an
     increase in the  rate of U.S. economic  growth, an increase in  the federal
     budget deficit or an increase in the price of commodities such as oil.

              FOREIGN  SECURITIES.  Value Equity may invest up to 15% of its net
     assets in foreign securities.   It  is anticipated that  in most cases  the
     best available market  for foreign  securities will be  on exchanges or  in
     over-the-counter markets located outside the United  States.  Foreign stock
     markets, while growing in volume  and sophistication, generally are  not as
     developed as those  in the United  States, and securities  of some  foreign
     issuers  (particularly those located in  developing countries)  may be less
     liquid and more volatile that securities of comparable U.S.  companies.  In
     addition,  foreign   brokerage  commissions   generally  are  higher   than
     commissions on securities traded in  the United States.  In  general, there
     is  less overall  governmental  supervision  and regulation  of  securities
     exchanges, brokers and listed companies than in the United States.

              It  is Value Equity's  policy not to invest  in foreign securities
     when there are  currency or trading restrictions  in force or when,  in the
     judgment  of its subadviser, Eagle  Asset Management,  Inc. ("Eagle"), such
     restrictions are likely  to be imposed.   However,  certain currencies  may
     become blocked  (i.e., not  freely available  for transfer  from a  foreign
     country), resulting  in the possible  inability of Value  Equity to convert
     proceeds  realized  upon  sale  of  portfolio  securities  of the  affected
     foreign companies into U.S. currency.

              Because  investments  in foreign  companies  usually  will involve
     currencies of  foreign countries, and because  Value Equity may temporarily
     hold funds in bank deposits in foreign currencies during the  completion of
     investment programs,  the value  of Value  Equity's assets  as measured  in
     U.S.  dollars  may be  affected  favorably  or  unfavorably  by changes  in
     foreign  currency exchange  rates  and  exchange control  regulations,  and
     Value  Equity  may  incur  costs  in  connection  with conversions  between
     various currencies.    Value  Equity  will  conduct  its  foreign  currency
     exchange  transactions on  a  spot  (i.e., cash)  basis  at  the spot  rate
     prevailing in  the foreign currency exchange market.  In addition, in order
     to  protect against  uncertainty  in the  level  of future  exchange rates,
     Value  Equity  may  enter  into  contracts  to  purchase  or  sell  foreign
     currencies  at  a future  date  (i.e.,  a  "forward  currency contract"  or
     "forward  contract").    See the  "Foreign  Currency  Hedging  Strategies--
     Special Considerations" section below under "Hedging Strategies." 

              ILLIQUID SECURITIES.   As  stated in its Prospectus,  Value Equity
     will  not purchase  or otherwise  acquire any  illiquid security  if, as  a
     result,  more than 10% of its net  assets (taken at current value) would be
     invested in  securities that  are illiquid by  virtue of  the absence of  a
     readily  available market or legal  or contractual  restrictions on resale.
     Similarly, Small  Cap will not  purchase or otherwise  acquire any illiquid

                                       -  3  -
<PAGE>






     security  if, as a result more than 15% of its net assets (taken at current
     value) would be invested  in securities that are illiquid by virtue  of the
     absence of a  readily available market or legal or contractual restrictions
     on resale.  Small Cap presently has no intention  of investing more than 5%
     of its  assets in  illiquid securities.   This  policy includes  repurchase
     agreements maturing in more than seven days.  

              Over-the-counter ("OTC")  options and  their underlying collateral
     are currently considered to be illiquid investments.   The Value Equity may
     sell OTC  options and, in  connection therewith, segregate  assets or cover
     its obligations with respect  to OTC options written by Value Equity.   The
     assets  used as  cover  for OTC  options written  by  Value Equity  will be
     considered illiquid  unless OTC options  are sold to  qualified dealers who
     agree  that Value  Equity may  repurchase any  OTC  option it  writes at  a
     maximum price  to  be calculated  by  a formula  set  forth in  the  option
     agreement.  The  cover for an OTC option  written subject to this procedure
     would  be  considered   illiquid  only  to  the  extent  that  the  maximum
     repurchase  price under  the  formula exceeds  the  intrinsic value  of the
     option.

              LOANS OF  PORTFOLIO SECURITIES.   Value Equity  may loan portfolio
     securities to  qualified broker-dealers.   Such loans may  be terminated by
     Value Equity  at any time  and the market  risk applicable to any  security
     loaned  remains its risk.   Although voting  rights, or  rights to consent,
     with respect to the  loaned securities pass to  the borrower, Value  Equity
     retains the right  to call the loans at any  time on reasonable notice, and
     it will  do so  in order  that the securities  may be  voted by  it if  the
     holders of such securities  are asked  to vote upon  or consent to  matters
     materially  affecting the  investment.   Value  Equity  also may  call such
     loans in order to  sell the securities involved.  The borrower  must add to
     the collateral whenever the market value of  the securities rises above the
     level of such collateral.   Value Equity could incur a loss if the borrower
     should fail financially at a time when  the value of the loaned  securities
     is greater  than  the collateral.    The  primary objective  of  securities
     lending is  to supplement Value  Equity's income through  investment of the
     cash collateral in short-term interest bearing obligations.

              PREFERRED  STOCK.  Each  Fund may  invest in  preferred stock.   A
     preferred stock is  a blend  of the characteristics  of a  bond and  common
     stock.   It  can offer  the higher yield  of a  bond and  has priority over
     common stock  in equity  ownership, but does  not have  the seniority of  a
     bond and  its participation in the  issuer's growth is limited.   Preferred
     stock has preference  over common stock in the  receipt of dividends and in
     any  residual  assets after  payment  to  creditors  should  the issuer  be
     dissolved.  Although the dividend is set at a  fixed annual rate, it can be
     changed or omitted by the issuer at any time.

              REPURCHASE  AGREEMENTS.    Each  Fund  may  invest  in  repurchase
     agreements.   A  repurchase  agreement  is  transaction  in  which  a  Fund
     purchases securities  and simultaneously commits  to resell the  securities
     to the original  seller (a member bank  of the Federal Reserve System  or a
     securities dealer who  is a member of a  national securities exchange or is

                                       -  4  -
<PAGE>






     a market maker  in U.S. Government securities)  at an agreed upon  date and
     price reflecting a market rate of interest unrelated  to the coupon rate or
     maturity  of the  purchased  securities.   Although  repurchase  agreements
     carry certain risks not  associated with direct investments in  securities,
     including  possible   decline  in  the  market   value  of  the  underlying
     securities  and  delays and  costs to  a  Fund if  the  other party  to the
     repurchase  agreement  becomes bankrupt,  the  Funds intend  to  enter into
     repurchase agreements only with banks and  dealers in transactions believed
     by Heritage  Asset Management,  Inc. ("Manager") to  present minimal credit
     risks in accordance  with guidelines established  by the  Trust's Board  of
     Trustees (the "Board of Trustees" or the "Board").

              REVERSE REPURCHASE AGREEMENTS.   Each Fund may  borrow by entering
     into reverse  repurchase agreements with the same parties  with whom it may
     enter into repurchase  agreements.  Under a reverse repurchase agreement, a
     Fund  sells securities and  agrees to repurchase them  at a mutually agreed
     to price.  At  the time a Fund enters into a  reverse repurchase agreement,
     it will  establish  and maintain  a  segregated  account with  an  approved
     custodian containing  liquid high-grade securities, marked-to-market daily,
     having a  value  not less  than  the  repurchase price  (including  accrued
     interest).  Reverse  repurchase agreements involve the risk that the market
     value  of securities retained in  lieu of sale by a  Fund may decline below
     the  price  of  the  securities  the  Fund  has  sold  but  is  obliged  to
     repurchase.   In  the  event  the  buyer  of  securities  under  a  reverse
     repurchase agreement files for  bankruptcy or becomes insolvent, such buyer
     or its trustee  or receiver may receive  an extension of time  to determine
     whether  to enforce a Fund's obligation  to repurchase the securities and a
     Fund's use of  the proceeds of the reverse repurchase agreement effectively
     may be  restricted pending such decisions.   Reverse  repurchase agreements
     create leverage,  a speculative factor,  and are considered borrowings  for
     the purpose of a Fund's limitation on borrowing.

              RISK  FACTORS OF HIGH YIELD  SECURITIES.  Small  Cap may invest up
     to 5%  of its assets, measured at the time of purchase, in securities rated
     below investment grade,  i.e., rated below BBB  or Baa by S&P  and Moody's,
     respectively or unrated securities determined to be below  investment grade
     by the subadviser, commonly referred to as  "junk bonds."  These high-yield
     securities are  subject  to certain  risks that  may  not be  present  with
     investments  of higher-grade  securities.   The  following supplements  the
     disclosure in Small Cap's Prospectus.

                      EFFECT OF  INTEREST RATE AND ECONOMIC CHANGES.  The prices
     of  high-yield  securities tend  to  be  less  sensitive  to interest  rate
     changes  than  higher-rated  investments, but  may  be  more  sensitive  to
     adverse economic changes or individual corporate developments.   Periods of
     economic uncertainty and  changes generally result in  increased volatility
     in market prices and yields of high-yield securities  and thus, in a Fund's
     net  asset value.   A strong economic downturn  or a  substantial period of
     rising  interest  rates could  affect  severely the  market  for high-yield
     securities.  In these circumstances, highly leveraged companies might  have
     difficulty in  making principal  and interest  payments, meeting  projected
     business goals, and obtaining additional  financing.  Thus, there  could be

                                       -  5  -
<PAGE>






     a  higher  incidence of  default.   This  would  affect the  value  of such
     securities and thus, Small  Cap's net asset value.  Further, if  the issuer
     of  a security  owned  by Small  Cap  defaults, it  might  incur additional
     expenses to seek recovery.

              Generally, when interest rates rise, the value of fixed-rate  debt
     obligations,  including  high-yield  securities,  tends to  decrease;  when
     interest rates  fall, the  value of  fixed-rate debt  obligations tends  to
     increase.   If an issuer of  a high-yield security containing  a redemption
     or call provision exercises either  provision in a declining  interest rate
     market, Small  Cap would have  to replace the security,  which could result
     in  a  decreased  return  for  shareholders.    Conversely,  if  Small  Cap
     experiences  unexpected net  redemptions in a  rising interest rate market,
     it might be  forced to sell  certain securities,  regardless of  investment
     merit.   This could  result in decreasing the  assets to  which Small Cap's
     expenses could be allocated and  in a reduced rate of return for it.  While
     it is impossible  to protect entirely against this risk, diversification of
     that  Small  Cap's  investment  portfolio  and   its  subadviser's  careful
     analysis  of  prospective investment  portfolio securities  should minimize
     the  impact of  a decrease in  value of  a particular security  or group of
     securities in Small Cap's investment portfolio.

                      THE HIGH YIELD  SECURITIES MARKET.   The market  for below
     investment grade  bonds  expanded rapidly  in  the  1980s, and  its  growth
     paralleled a long economic  expansion.  During that  period, the yields  on
     below investment grade  bonds rose dramatically.   Such  higher yields  did
     not reflect  the value  of the  income stream  that holders  of such  bonds
     expected, but  rather the  risk that  holders of  such bonds  could lose  a
     substantial  portion of their value  as a result  of the issuers' financial
     restructuring or default.   In fact, from  1989 to 1991 during a  period of
     economic  recession, the  percentage of lower  quality bonds that defaulted
     rose  significantly, although  the  default  rate decreased  in  subsequent
     years.    There  can  be no  assurance  that  such  declines  in the  below
     investment  grade market will not reoccur.  The market for below investment
     grade  bonds generally  is thinner  and less  active  than that  for higher
     quality bonds, which may limit  Small Cap's ability to sell such securities
     at fair value  in response to changes in  the economy or financial markets.
     Adverse publicity  and  investor  perceptions,  whether  or  not  based  on
     fundamental analysis, also  may decrease the values and liquidity of lower-
     rated securities, especially in a thinly traded market.

                      CREDIT  RATINGS.   The  credit  ratings issued  by  credit
     rating  services may  not reflect  fully the  true risks of  an investment.
     For example, credit  ratings typically evaluate the safety of principal and
     interest  payments, not market value risk, of high yield securities.  Also,
     credit  rating agencies  may  fail to  change  timely  a credit  rating  to
     reflect changes in  economic or company conditions that affect a security's
     market  value.    Although Small  Cap's  subadviser  considers  ratings  of
     recognized  rating  services  such  as  Moody's  and  S&P,  the  subadviser
     primarily relies  on its  own  credit analyses,  which include  a study  of
     existing debt,  capital  structure, ability  to  service  debt and  to  pay
     dividends, the issuer's  sensitivity to economic conditions,  its operating

                                       -  6  -
<PAGE>






     history and  the  current  trend  of  earnings.    Small  Cap's  subadviser
     continually   monitors  the  investments  in  their  respective  investment
     portfolios and carefully  evaluate whether to  dispose of  or retain  high-
     yield securities whose credit  ratings have changed.  See the  Appendix for
     a description of Moody's and S&P's corporate debt ratings.

                      LIQUIDITY AND VALUATION.  Lower-rated bonds typically  are
     traded  among a smaller number of broker-dealers  than in a broad secondary
     market.   Purchasers  of high-yield  securities  tend to  be  institutions,
     rather than  individuals,  which  is  a  factor  that  further  limits  the
     secondary  market.   To  the extent  that  no established  retail secondary
     market exists, many high-yield  securities may not be as  liquid as higher-
     grade bonds.   A less active  and thinner market  for high-yield securities
     than that available  for higher quality  securities may  limit Small  Cap's
     ability to sell  such securities at that  fair market value in  response to
     changes in the  economy or the financial markets.  The ability of Small Cap
     to value or  sell high-yield securities also will  be affected adversely to
     the  extent that such  securities are  thinly traded  or illiquid.   During
     such periods, there may  be less  reliable objective information  available
     and thus the  responsibility of the  Board to  value high-yield  securities
     becomes more difficult,  with judgment playing  a greater  role.   Further,
     adverse  publicity about  the  economy or  a  particular issuer  may affect
     adversely the  public's perception of  the value,  and thus liquidity  of a
     high-yield  security,  whether or  not  such  perceptions  are  based on  a
     fundamental analysis.  See "Net Asset Value."

              STANDARD AND  POOR'S DEPOSITORY RECEIPTS ("SPDRS").   Value Equity
     may invest in SPDRs.  SPDRs  represent an interest in a fixed portfolio  of
     common stocks  designed to track  the price and  dividend yield performance
     of the Standard  & Poor's 500 Composite  Stock Price Index.   The interests
     are  sponsored by  PDR Services  Corporation, a  wholly-owned subsidiary of
     the American Stock Exchange, and are issued as  shares of a unit investment
     trust  registered   under  the  1940  Act.    Accordingly,  Value  Equity's
     investment in SPDRs  is limited by its  fundamental investment  restriction
     regarding investing in  other investment companies and by  Section 12(d)(1)
     of  the 1940 Act.  Under these  limitations, Value Equity may not invest in
     SPDRs if  such investment would cause  it: (1) to  own more than  3% of the
     outstanding voting stock  of other investment  company SPDRs;  (2) to  have
     more  than 5% of the value of its total assets invested in other investment
     companies SPDRs; or (3) to have  more than 10% of its total assets invested
     in other investment companies, including SPDRs. 

              U.S.  GOVERNMENT  SECURITIES.    Each  Fund  may  invest  in  U.S.
     Government securities,  including a variety  of securities that are  issued
     or guaranteed  by the  U.S. Government,  its agencies  or instrumentalities
     and  repurchase  agreements  secured thereby.    These  securities  include
     securities issued and guaranteed by  the U.S. Government, such  as Treasury
     bills, Treasury  notes, and  Treasury bonds;  obligations supported by  the
     right of the issuer to borrow from the U.S. Treasury, such  as those of the
     Federal Home Loan  Banks; and obligations  supported only by the  credit of
     the issuer, such as those of the Federal Intermediate Credit Banks.


                                       -  7  -
<PAGE>






              WARRANTS.  Each Fund may purchase warrants, which  are instruments
     that permit  a Fund  to acquire, by  subscription, the  capital stock of  a
     corporation at a set  price, regardless of the market price for such stock.
     Warrants may  be either  perpetual  or of  limited duration.   There  is  a
     greater risk that  warrants might drop in  value at a faster  rate than the
     underlying stock.   Each Fund's investment  in warrants will be  limited to
     5% of  its net  assets.  Included  within that amount,  no more than  2% of
     either Fund's  net assets may be invested in warrants not traded on the New
     York or American Stock Exchange.

              Industry Classifications
              ------------------------

              For  purposes of determining  industry classifications,  each Fund
     relies upon classifications  established by the Manager that are based upon
     classifications  contained in  the  Directory  of Companies  Filing  Annual
     Reports with  the Securities  and Exchange  Commission ("SEC")  and in  the
     Standard & Poor's Corporation Industry Classifications.

              Hedging Strategies 
              ------------------

              GENERAL DESCRIPTION.    Eagle  may  use  a  variety  of  financial
     instruments   ("Hedging   Instruments"),   including   futures    contracts
     (sometimes  referred  to as  "futures"),  options, options  on  futures and
     forward currency contracts,  to attempt to hedge Value  Equity's investment
     portfolio.   Forward currency  contracts also  may be  used to shift  Value
     Equity's exposure from one foreign currency to another.

              Hedging strategies  can be  broadly categorized as  "short hedges"
     and "long  hedges."  A  short hedge is  the purchase or  sale of a  Hedging
     Instrument intended partially  or fully to offset potential declines in the
     value of  one  or  more  investments  held  in  Value  Equity's  investment
     portfolio.   Thus, in  a short  hedge Value  Equity takes  a position  in a
     Hedging Instrument  whose  price  is  expected  to  move  in  the  opposite
     direction of  the price of  the investment being hedged.   A long  hedge is
     the purchase  or sale of a  Hedging Instrument intended partially  or fully
     to offset  potential  increases in  the acquisition  cost  of one  or  more
     investments  that the Fund intends to acquire.  Thus, in a long hedge Value
     Equity takes a position in a Hedging Instrument whose price is expected  to
     move in  the same  direction as  the price  of  the prospective  investment
     being hedged.  

              Hedging  Instruments on  securities  generally are  used  to hedge
     against price  movements  in one  or more  particular securities  positions
     that  Value Equity  owns or  intends to  acquire.   Hedging  Instruments on
     indices may be used to hedge broad market sectors.  

              The  use   of  Hedging   Instruments  is  subject   to  applicable
     regulations of  the SEC,  the  exchanges upon  which they  are traded,  the
     Commodity Futures Trading Commission ("CFTC") and  various state regulatory


                                       -  8  -
<PAGE>






     authorities.    In   addition,  Value  Equity's  ability   to  use  Hedging
     Instruments will be limited by tax considerations.  See "Taxes."

              In addition to the products  and strategies described below, Eagle
     expects to  discover additional opportunities  in connection with  options,
     futures   contracts,   forward  currency   contracts   and   other  hedging
     techniques.    These  new  opportunities  may  become  available  as  Eagle
     develops new  techniques, as  regulatory authorities  broaden the range  of
     permitted  transactions and  as  new  options, futures  contracts,  forward
     currency contracts  or other techniques  are developed.   Eagle may utilize
     these opportunities  to  the  extent  that  it  is  consistent  with  Value
     Equity's investment objectives  and permitted by Value  Equity's investment
     limitations and applicable regulatory authorities.

              SPECIAL  RISKS  OF  HEDGING  STRATEGIES.    The  use  of   Hedging
     Instruments involves special considerations and risks,  as described below.
     Risks pertaining  to particular  Hedging Instruments  are described in  the
     sections that follow.

                      (1)      Successful  use  of   most  Hedging   Instruments
              depends upon  Eagle's ability to predict  movements of the overall
              securities,  currency and  interest rate  markets,  which requires
              different  skills  than  predicting   changes  in  the  prices  of
              individual securities.   While Eagle is experienced in the  use of
              Hedging  Instruments,   there  can   be  no  assurance   that  any
              particular hedging strategy adopted will succeed.

                      (2)      There might be imperfect correlation,  or even no
              correlation, between  price movements of a  Hedging Instrument and
              price movements of the investments being hedged.  For example,  if
              the value of a Hedging  Instrument used in a short hedge increased
              by less than  the decline in  value of the hedged  investment, the
              hedge would not be fully successful.   Such a lack of  correlation
              might  occur  due  to  factors  unrelated  to  the  value  of  the
              investments being  hedged, such as speculative  or other pressures
              on the  markets in  which  Hedging Instruments  are traded.    The
              effectiveness of hedges using  Hedging Instruments on indices will
              depend  on the  degree of  correlation between price  movements in
              the index and price movements in the securities being hedged.

                      (3)      Hedging  strategies,  if  successful,  can reduce
              risk  of  loss  by wholly  or  partially  offsetting the  negative
              effect  of unfavorable  price movements  in the  investments being
              hedged.   However, hedging strategies also  can reduce opportunity
              for  gain by  offsetting the  positive effect  of  favorable price
              movements  in  the hedged  investments.    For example,  if  Value
              Equity  entered  into  a  short hedge  because  Eagle  projected a
              decline  in the price  of a security in  Value Equity's investment
              portfolio, and the  price of that security  increased instead, the
              gain  from that increase might be wholly  or partially offset by a
              decline in the price of the Hedging Instrument.  Moreover, if  the
              price  of  the  Hedging  Instrument  declined  by  more  than  the

                                       -  9  -
<PAGE>






              increase in the  price of the security, Value Equity  could suffer
              a loss.  In  either such case, Value  Equity would have been  in a
              better position had it not hedged at all.

                      (4)      As  described   below,  Value   Equity  might  be
              required  to  maintain  assets  as  "cover,"  maintain  segregated
              accounts or  make  margin  payments  when it  takes  positions  in
              Hedging Instruments  involving obligations  to third parties.   If
              Value  Equity were  unable  to  close out  its positions  in  such
              Hedging Instruments, it might be required to continue  to maintain
              such assets or  accounts or make such payments until  the position
              expired  or  matured.    These  requirements  might  impair  Value
              Equity's  ability  to  sell  a   portfolio  security  or  make  an
              investment at a  time when it would  otherwise be favorable to  do
              so, or  require that Value  Equity sell a portfolio  security at a
              disadvantageous  time.    Value Equity's  ability  to close  out a
              position in  a Hedging Instrument prior  to expiration or maturity
              depends on the  existence of a liquid secondary market  or, in the
              absence of  such a  market,  the ability  and willingness  of  the
              other party  to the  transaction ("counterparty") to enter  into a
              transaction  closing out  the position.    Therefore, there  is no
              assurance  that any hedging position  can be closed  out at a time
              and price that is favorable to Value Equity.

              COVER  FOR HEDGING  STRATEGIES.   Some Hedging  Instruments expose
     Value Equity  to an  obligation to another  party.   Value Equity will  not
     enter  into any such  transactions unless it owns  either (1) an offsetting
     ("covered")  position   in   securities,   currencies,   forward   currency
     contracts,  options or  futures contracts or  (2) cash and  short-term debt
     securities, with  a value sufficient  at all times  to cover  its potential
     obligations to  the extent  not covered  as provided in  (1) above.   Value
     Equity will comply  with SEC guidelines regarding cover for instruments and
     will,  if  the guidelines  so  require,  set  aside  cash, U.S.  Government
     securities  or other  liquid, high-grade  debt securities  in  a segregated
     account with  State Street  Bank and  Trust Company,  the Funds'  custodian
     ("Custodian"), in the prescribed amount.

              Assets used as cover or  otherwise set aside cannot be  sold while
     the position in the corresponding  Hedging Instrument is open,  unless they
     are  replaced with other appropriate  assets.  As  a result, the commitment
     of  a  large  portion  of Value  Equity's  assets  to  cover  or segregated
     accounts could  impede portfolio management  or Value  Equity's ability  to
     meet redemption requests or other current obligations.

              OPTIONS,  FUTURES AND OPTIONS  ON FUTURES  TRADING.   Value Equity
     may  engage in certain  options (including  options on  securities, indices
     and  currencies, futures  and  options on  futures  strategies in  order to
     hedge its investments.  Certain  special characteristics of and  risks with
     these strategies are discussed below.

                      CHARACTERISTICS  AND  RISKS  OF  OPTIONS  TRADING.   Value
     Equity effectively  may terminate its  right or obligation  under an option

                                       -  10  -
<PAGE>






     by  entering into  a  closing  transaction.    If Value  Equity  wished  to
     terminate its  obligation to purchase  or sell  securities under  a put  or
     call option  it has written, it  may purchase a put  or call option  of the
     same  series  (i.e.,  an  option identical  in  its  terms  to  the  option
     previously  written); this  is  known as  a  closing purchase  transaction.
     Conversely,  in order to  terminate its right to  purchase or  sell under a
     call or put option  it has purchased, Value  Equity may write an option  of
     the same  series as  the option  held.   This is  known as  a closing  sale
     transaction.   Closing  transactions  essentially  permit Value  Equity  to
     realize  profits  or limit  losses on  its options  positions prior  to the
     exercise  or expiration  of  the  option.   Whether  a  profit or  loss  is
     realized from a closing  transaction depends on  the price movement of  the
     underlying  security, index,  currency or  futures contract  and the market
     value of the option.

              In considering  the  use  of  options to  hedge,  particular  note
     should be taken of the following:

              (1)  The value  of an  option position  will reflect,  among other
     things, the  current  market  price  of  the  underlying  security,  index,
     currency  or futures  contract, the  time remaining  until expiration,  the
     relationship of  the exercise  price to  the market  price, the  historical
     price  volatility   of  the  underlying   instrument  and  general   market
     conditions.  For  this reason, the successful  use of options as  a hedging
     strategy depends  upon Eagle's ability  to forecast the  direction of price
     fluctuations in the underlying instrument.

              (2)  At any  given time, the  exercise price of  an option may  be
     below, equal  to  or above  the  current  market value  of  the  underlying
     instrument.   Purchased  options  that expire  unexercised  have no  value.
     Unless  an option  purchased  by  Value Equity  is  exercised or  unless  a
     closing transaction is effected with respect to that  position, a loss will
     be realized in the amount of the premium paid.

              (3)  A  position in  an exchange-listed option may  be closed  out
     only on  an  exchange  that  provides  a  secondary  market  for  identical
     options.   Most exchange-listed options relate to futures contracts, stocks
     and currencies.   The ability to establish  and close out positions  on the
     exchanges  is subject  to  the maintenance  of  a liquid  secondary market.
     Closing transactions  may be effected with respect to options traded in the
     OTC markets (currently the primary  markets of options on  debt securities)
     only by negotiating directly  with the other party to the  option contract,
     or in a  secondary market for the  option if such market exists.   Although
     Value  Equity intends  to purchase  or write  only those  options for which
     there appears to be  an active secondary market, there is no assurance that
     a  liquid secondary  market will  exist for  any  particular option  at any
     specific time.   In such  event, it may  not be possible to  effect closing
     transactions with  respect to certain  options, with the  result that Value
     Equity would have to exercise those options that it has purchased in  order
     to realize any  profit.  With respect  to options written by  Value Equity,
     the  inability to enter into  a closing transaction  may result in material
     losses to it.   For example, because  Value Equity will maintain  a covered

                                       -  11  -
<PAGE>






     position with respect to  any call option it writes  on a security, it  may
     not sell  the underlying security during  the period it  is obligated under
     such option.  This  requirement may impair Value Equity's ability to sell a
     portfolio security  or make an  investment at  a time when  such a sale  or
     investment might be advantageous.

              (4)   Activities  in the  options market  may result  in a  higher
     portfolio  turnover rate  and additional  brokerage  costs; however,  Value
     Equity also may  save on  commissions by using  options as  a hedge  rather
     than buying  or selling  individual  securities in  anticipation of  market
     movements.

              (5)  The risks of investment in options on  indices may be greater
     than options  on  securities or  currencies.    Because index  options  are
     settled in  cash, when  Value Equity writes  a call  on an index  it cannot
     provide in advance  for its potential settlement  obligations by  acquiring
     and  holding the underlying  securities.   Value Equity can  offset some of
     the risk of writing  a call index option by holding a diversified portfolio
     of  securities similar  to those on  which the  underlying index  is based.
     However, Value  Equity cannot, as a  practical matter, acquire and  hold an
     investment portfolio  containing exactly  the same  securities as  underlie
     the index and, as  a result, bears a risk that  the value of the securities
     held will vary from the value of the index.

              Even if Value Equity  could assemble an investment portfolio  that
     exactly reproduced the  composition of the underlying index, it still would
     not be fully  covered from a risk  standpoint because of the  "timing risk"
     inherent in writing index options.  When an index option is exercised,  the
     amount of cash  that the holder is entitled to receive is determined by the
     difference between the  exercise price and the  closing index level  on the
     date when  the option is exercised.  As  with other kinds of options, Value
     Equity as the  call writer will not learn  that it has been  assigned until
     the next business day at  the earliest.  The time lag between  exercise and
     notice  of assignment poses no risk  for the writer of a  covered call on a
     specific  underlying security,  such  as common  stock,  because there  the
     writer's obligation  is to deliver the underlying security,  not to pay its
     value as of a fixed time  in the past.  So long as  the writer already owns
     the  underlying security,  it  can satisfy  its  settlement obligations  by
     simply delivering it, and the risk that  its value may have declined  since
     the exercise date is borne by  the exercising holder.  In contrast, even if
     the  writer  of an  index  call holds  securities  that  exactly match  the
     composition  of the underlying  index, it will not  be able  to satisfy its
     assignment obligations  by delivering those  securities against payment  of
     the exercise price.  Instead,  it will be required to pay cash in an amount
     based on  the closing index  value on the  exercise date.   By the time  it
     learns that  it has  been assigned,  the index  may have  declined, with  a
     corresponding  decline in  the  value of  its  investment portfolio.   This
     "timing  risk" is  an inherent  limitation  on the  ability  of index  call
     writers to cover their risk exposure by holding securities positions.

              If Value  Equity has purchased  an index option  and exercises  it
     before  the closing index value for that day is available, it runs the risk

                                       -  12  -
<PAGE>






     that the level of the underlying  index subsequently may change.  If such a
     change causes the exercised option  to fall out-of-the-money, Value  Equity
     will be required to  pay the difference between the closing index value and
     the exercise price of  the option (times the applicable multiplier)  to the
     assigned writer.

                      GUIDELINES,  CHARACTERISTICS  AND  RISKS  OF  FUTURES  AND
     OPTIONS ON FUTURES  TRADING.  Value Equity  is required to  maintain margin
     deposits  with brokerage  firms  through which  it  buys and  sells futures
     contracts or writes options on  future contracts.  Initial  margin deposits
     vary from contract to contract and are subject  to change.  Margin balances
     will  be adjusted  daily to  reflect  unrealized gains  and losses  on open
     contracts.   If the  price of  an open  futures or written  option position
     declines so that  Value Equity has  market exposure on  such contract,  the
     broker  will require  Value Equity  to deposit  variation margin.   If  the
     value of  an  open futures  or written  option position  increases so  that
     Value  Equity no longer  has market  exposure on such  contract, the broker
     will pay any excess variation margin to Value Equity.

              Most  of the exchanges  on which futures contracts  and options on
     futures are traded  limit the amount  of fluctuation  permitted in  futures
     and  options prices during  a single  trading day.   The daily  price limit
     establishes the maximum  amount that  the price  of a  futures contract  or
     option may vary either  up or down from the previous day's settlement price
     at  the end of  a trading  session.   Once the daily  price limit  has been
     reached  in a particular  type of contract,  no trades may be  made on that
     day  at a  price beyond  that limit.   The daily  price limit  governs only
     price  movement during  a  particular trading  day  and therefore  does not
     limit potential losses  because the limit  may prevent  the liquidation  of
     unfavorable positions.   Futures contract  and options prices  occasionally
     have moved  to the daily  limit for several  consecutive trading days  with
     little or no trading, thereby  preventing prompt liquidation of  futures or
     options positions and subjecting some traders to substantial losses.

              Another  risk in  employing  futures  contracts and  options  as a
     hedge  is the  prospect  that prices  will  correlate imperfectly  with the
     behavior of  cash prices  for the  following reasons.   First, rather  than
     meeting  additional  margin  deposit  requirements,   investors  may  close
     contracts through  offsetting transactions.   Second, the liquidity of  the
     futures  and  options   markets  depends  on  participants   entering  into
     offsetting transactions  rather than  making or  taking delivery.   To  the
     extent that participants decide to make or  take delivery, liquidity in the
     futures and options  markets could be reduced,  thus producing  distortion.
     Third, from  the point of view of  speculators, the deposit requirements in
     the futures and options markets  are less onerous than  margin requirements
     in  the   securities  market.     Therefore,  increased  participation   by
     speculators in  the futures and  options markets may  cause temporary price
     distortions.  Due to  the possibility of distortion, a correct  forecast of
     general interest rate, currency exchange  rate or security price  trends by
     Eagle may still not result in a successful transaction.



                                       -  13  -
<PAGE>






              In addition to  the risks that apply to all  options transactions,
     there are several special risks  relating to options on  futures contracts.
     The ability to  establish and close out  positions in such options  will be
     subject to the existence  of a  liquid secondary market.   Compared to  the
     purchase or  sale of  futures contracts,  the purchase  of call options  on
     futures contracts involves  less potential risk to Value Equity because the
     maximum  amount  at  risk  is  the  premium  paid  for  the  options  (plus
     transaction costs).   However, there may be circumstances when the purchase
     of a  call or put option  on a futures contract  would result in  a loss to
     Value Equity when the  purchase or  sale of a  futures contract would  not,
     such  as  when  there  is no  movement  in  the  price  of  the  underlying
     investment.

          To the  extent that  Value Equity  enters into  futures contracts  and
     commodity  options (including options on  futures contracts  and options on
     foreign  currencies traded  on a  CFTC-regulated exchange)  other  than for
     bona fide hedging purposes (as defined by the CFTC), the aggregate  initial
     margin and  premiums required  to establish those  positions (excluding the
     amount by  which options  are "in-the-money")  will not  exceed  5% of  the
     liquidation  value of  Value Equity's  investment  portfolio, after  taking
     into  account unrealized  profits and  unrealized losses  on any  contracts
     Value Equity has entered into.

              FOREIGN  CURRENCY  HEDGING  STRATEGIES  --  RISK FACTORS.    Value
     Equity may  use options  and futures  on foreign  currencies, as  described
     above,  and foreign  currency  forward contracts,  as  described below,  to
     hedge  against movements in  the values of the  foreign currencies in which
     Value  Equity's securities  are  denominated.    Such currency  hedges  can
     protect against price  movements in a  security that  Value Equity owns  or
     intends  to acquire that  are attributable to changes  in the  value of the
     currency in which it is denominated.  Such hedges do not, however,  protect
     against price  movements in the  securities that are  attributable to other
     causes.

              Value Equity might seek  to hedge against changes in the  value of
     a particular  currency when  no Hedging  Instruments on  that currency  are
     available  or  such Hedging  Instruments  are more  expensive  than certain
     other  Hedging Instruments.  In such  cases, Value Equity may hedge against
     price  movements  in that  currency  by  entering into  transactions  using
     Hedging  Instruments  on  another currency  or  basket  of currencies,  the
     values  of  which  Eagle  believes will  have  a  high  degree  of positive
     correlation to  the value  of the  currency being  hedged.   The risk  that
     movements  in  the price  of  the  Hedging  Instrument  will not  correlate
     perfectly  with movements  in  the price  of the  currency being  hedged is
     magnified when this strategy is used.

              The  value of Hedging Instruments on foreign currencies depends on
     the value of the  underlying currency relative to the U.S. dollar.  Because
     foreign  currency transactions  occurring  in  the interbank  market  might
     involve substantially  larger amounts  than those  involved in  the use  of
     such Hedging Instruments,  Value Equity could be disadvantaged by having to
     deal in the  odd lot market (generally  consisting of transactions  of less

                                       -  14  -
<PAGE>






     than $1 million) for  the underlying foreign currencies at  prices that are
     less favorable than for round lots.

              There is  no systematic  reporting of  last  sale information  for
     foreign currencies or any regulatory requirement  that quotations available
     through dealers or  other market  sources be firm  or revised  on a  timely
     basis.   Quotation information  generally is representative  of very  large
     transactions in the  interbank market and  thus might  not reflect  odd-lot
     transactions where rates might be less favorable.   The interbank market in
     foreign currencies is a global, round-the-clock market.   To the extent the
     U.S. futures  markets  are closed  while  the  markets for  the  underlying
     currencies remain  open, significant  price and  rate movements might  take
     place  in the underlying  markets that cannot  be reflected  in the markets
     for the Hedging Instruments until they reopen.

              Settlement  of hedging  transactions involving  foreign currencies
     might be required  to take place within the  country issuing the underlying
     currency.  Thus, Value  Equity might be required to accept or make delivery
     of  the underlying foreign currency in accordance  with any U.S. or foreign
     regulations regarding  the maintenance of  foreign banking arrangements  by
     U.S.  residents and might  be required to pay  any fees,  taxes and charges
     associated with such delivery assessed in the issuing country.

              COMBINED  TRANSACTIONS.   Value  Equity  may  enter  into multiple
     futures transactions, instead of a  single transaction, as part of a single
     or combined strategy  when, in  the opinion  of Eagle,  it is  in the  best
     interests of Value  Equity to do so.   A combined transaction  usually will
     contain elements  of  risk  that  are  present in  each  of  its  component
     transactions.   Although combined  transactions normally  are entered  into
     based on Eagle's judgment  that the combined strategies will reduce risk or
     otherwise more effectively  achieve the desired portfolio  management goal,
     it  is possible  that the combination  instead will increase  such risks or
     hinder achievement of the portfolio management objective.

              FORWARD CURRENCY  CONTRACTS.  Value Equity  may enter into forward
     currency  contracts to  purchase  or sell  foreign  currencies for  a fixed
     amount of U.S. dollars  or another  foreign currency, in  an amount not  to
     exceed 5% of  Value Equity's assets.   Such transactions may serve  as long
     hedges  --  for example,  Value  Equity  may  purchase  a forward  currency
     contract to lock in  the U.S. dollar price of  a security denominated in  a
     foreign currency that  it intends to  acquire.   Forward currency  contract
     transactions also  may serve as short  hedges -- for example,  Value Equity
     may sell a forward currency contract to lock in the U.S. dollar  equivalent
     of the proceeds from the anticipated sale of a security or from a  dividend
     or interest payment  on a security denominated  in a foreign currency.   In
     addition, Value Equity  may purchase forward currency  contracts to enhance
     income when Eagle  anticipates that the foreign currency will appreciate in
     value,  but  securities  denominated  in  that   currency  do  not  present
     attractive investment opportunities.

              As noted above, Value Equity may seek to hedge against changes  in
     the value of  a particular currency by  using forward contracts  on another

                                       -  15  -
<PAGE>






     foreign currency  or  a basket  of  currencies, the  value of  which  Eagle
     believes  will have a  positive correlation to  the values  of the currency
     being hedged.  Use  of a different foreign currency magnifies the risk that
     movements in the price of forward currency  contracts will not correlate or
     will correlate unfavorably with the foreign currency being hedged. 

              In addition, Value  Equity may  use forward currency contracts  to
     shift  exposure  to  foreign currency  fluctuations  from  one  country  to
     another.   For example, if Value  Equity owned securities denominated  in a
     foreign currency and Eagle  believed that  currency would decline  relative
     to another  currency, it  might enter into  a forward  contract to sell  an
     appropriate amount of the  first foreign currency, with payment  to be made
     in the second foreign currency.  

              The  cost  to  Value  Equity  of  engaging  in  forward   currency
     contracts varies with factors such as the currency involved,  the length of
     the contract period  and the market  conditions then  prevailing.   Because
     forward currency contracts usually are  entered into on a  principal basis,
     no fees  or commissions  are involved.   When  Value Equity  enters into  a
     forward currency  contract, it relies on  the counterparty to make  or take
     delivery of  the  underlying currency  at  the  maturity of  the  contract.
     Failure  by the  counterparty to  do so  would result  in the  loss  of any
     expected benefit of the transaction.

              As  is the case  with futures contracts, sellers  or purchasers of
     forward currency contracts can enter into  offsetting closing transactions,
     similar to  closing  transactions on  futures,  by purchasing  or  selling,
     respectively,  an instrument identical  to the  instrument sold  or bought.
     Secondary markets  generally do not exist  for forward  currency contracts,
     with  the  result that  closing  transactions  generally  can  be made  for
     forward  currency   contracts  only  by   negotiating  directly  with   the
     counterparty.  Thus,  there can be no  assurance that Value Equity  will in
     fact be able to close out a forward currency contract  at a favorable price
     prior  to maturity.    In  addition, in  the  event  of insolvency  of  the
     counterparty, Value Equity  might be unable to close out a forward currency
     contract at any  time prior  to maturity.   In either  event, Value  Equity
     would continue to  be subject to market risk  with respect to the position,
     and would continue to be required to maintain  a position in the securities
     or currencies  that are the  subject of  the hedge or  to maintain  cash or
     securities.

              The precise matching of forward currency contract amounts and  the
     value of the  securities involved generally  will not  be possible  because
     the value  of  such securities,  measured  in  the foreign  currency,  will
     change after the  foreign currency contract  has been  established.   Thus,
     Value Equity might need to purchase or sell foreign currencies in the  spot
     (cash) market  to the  extent such foreign  currencies are  not covered  by
     forward contracts.  The projection of  short-term currency market movements
     is  extremely  difficult,  and the  successful  execution  of a  short-term
     hedging strategy is highly uncertain.

              Value Equity may use the following instruments:

                                       -  16  -
<PAGE>






              EQUITY  AND  DEBT SECURITY  INDEX  FUTURES  CONTRACTS.   An  index
     futures  contract is  a  bilateral agreement  pursuant  to which  one party
     agrees  to accept,  and  the other  party agrees  to  make, delivery  of an
     amount of  cash equal  to a  specified dollar amount  times the  difference
     between the index  value at the  close of trading of  the contract and  the
     price at  which the  futures contract  is originally  struck.   No physical
     delivery  of  the  securities  comprising  the  index  is  made;  generally
     contracts  are closed  out prior to  the expiration  date of  the contract.
     Value Equity may also purchase and sell options on such futures contracts.

              SECURITY AND CURRENCY  FUTURES CONTRACTS.  A security  or currency
     futures  contract is  a  bilateral agreement  pursuant  to which  one party
     agrees to  accept, and  the other  party agrees  to make,  delivery of  the
     specific type  of security  or currency  called for  in the  contract at  a
     specified future  time and  at a  specified price.   Although such  futures
     contracts by  their  terms  call  for  actual  delivery  or  acceptance  of
     securities or currency  in most cases  the contracts are closed  out before
     the  settlement date  without  the making  or  taking of  delivery.   Value
     Equity may also purchase and sell options on such futures contracts.

              FORWARD CURRENCY CONTRACTS.   A forward currency contract involves
     an  obligation to  purchase  or sell  a specific  currency  at a  specified
     future  date, which may be any fixed  number of days from the contract date
     agreed upon  by the parties,  at a price  set at the  time the contract  is
     entered into.

     INVESTMENT LIMITATIONS
     ----------------------

              In addition to the  limits disclosed in "Investment Policies," the
     Funds  are  subject  to the  following  investment  limitations, which  are
     fundamental policies and may not be changed without  the vote of a majority
     of the outstanding  voting securities  of the applicable  Fund.  Under  the
     1940 Act,  a "vote of a majority of the outstanding voting securities" of a
     Fund means the affirmative vote of  the lesser of (1) more than 50% of  the
     outstanding  shares of the Fund or (2) 67% or more of the shares present at
     a  shareholders meeting  if more  than 50%  of the  outstanding shares  are
     represented at the meeting in person or by proxy.

              DIVERSIFICATION.   The Funds  may not invest, with  respect to 75%
     of each Fund's total assets, more than 5% of that Fund's  assets (valued at
     market  value)  in  securities  of any  one  issuer  other  than  the  U.S.
     Government or  its agencies  and instrumentalities, or  purchase more  than
     10% of the voting securities of any one issuer.

              INDUSTRY  CONCENTRATION.   The Funds  may not  purchase securities
     if, as  a result  of such  purchase, more  than 25%  of the  value of  each
     Fund's total assets would be invested in any one industry.

              BORROWING  MONEY.   The Funds  may not  borrow money  except as  a
     temporary measure for extraordinary or  emergency purposes.  The  Funds may
     enter into reverse repurchase  agreements in  an amount up  to 33 % of  the

                                       -  17  -
<PAGE>






     value of its  total assets  in order  to meet  redemption requests  without
     immediately selling portfolio  securities.  This latter practice is not for
     investment leverage but  solely to facilitate management of  the investment
     portfolio by  enabling  the Funds  to  meet  redemption requests  when  the
     liquidation   of   portfolio   instruments   would   be   inconvenient   or
     disadvantageous.   However, a Fund  may not  purchase additional  portfolio
     investments once  borrowed funds exceed 5% of total assets.  When effecting
     reverse repurchase agreements,  Fund assets in an amount sufficient to make
     payment  for the  obligations to  be purchased  will be  segregated by  the
     Custodian  and  on the  Funds'  records  upon execution  of  the trade  and
     maintained until  the transaction has been settled.   During the period any
     reverse repurchase agreements  are outstanding, to the extent  necessary to
     assure  completion  of  the  reverse repurchase  agreements,  a  Fund  will
     restrict the purchase of portfolio instruments to money market  instruments
     maturing  on  or before  the  expiration  date  of  the reverse  repurchase
     agreements.   Interest paid  on borrowed  funds will  not be available  for
     investment.    The Funds  will  liquidate any  such borrowings  as  soon as
     possible  and  may  not  purchase  any  portfolio  instruments   while  any
     borrowings are outstanding (except as described above).

              ISSUING  SENIOR  SECURITIES.    The  Funds  may not  issue  senior
     securities,  except as  permitted by the  investment objective and policies
     and investment limitations of  that Fund or  for Value Equity with  respect
     to transactions involving  options, futures, forward currency  contracts or
     other financial instruments.

              UNDERWRITING.   The  Funds may  not underwrite  the  securities of
     other issuers, except  that Value Equity may underwrite  to the extent that
     in connection  with the disposition of  portfolio securities,  Value Equity
     may be deemed to  be an underwriter under federal securities laws, and that
     Small Cap may invest in securities that  are not readily marketable without
     registration  under  the Securities  Act of  1933, as  amended (  the "1933
     Act"), if immediately  after the  making of such  investment not more  than
     15% of the  value of Small  Cap's net assets  (taken at cost)  would be  so
     invested.

              INVESTING IN COMMODITIES, MINERALS OR REAL ESTATE.  The Funds  may
     not invest in commodities, commodity  contracts, oil, gas or  other mineral
     programs,  or real  estate (including  real  estate limited  partnerships),
     except that  they may purchase  securities issued by  companies that invest
     in or sponsor such interests and except that  Value Equity may purchase and
     sell  options, futures  contracts,  forward  currency contracts  and  other
     financial instruments.

              LOANS.  The Funds may  not make loans, except:  (1) to  the extent
     that the purchase  of a portion of an  issue of publicly distributed notes,
     bonds or  other evidences of indebtedness or deposits  with banks and other
     financial institutions may be  considered loans; (2) that a Fund  may enter
     into  repurchase  agreements  as permitted  under  that  Fund's  investment
     policies; and (3) that Value Equity may make loans of portfolio  securities
     as described in this SAI. 


                                       -  18  -
<PAGE>






              Each  Fund  has  adopted  the  following  additional  restrictions
     which, together  with certain limits described  in its Prospectus,   may be
     changed  by  the   Board  of  Trustees  without  shareholder   approval  in
     compliance with applicable law, regulation or regulatory policy.

              INVESTING IN ILLIQUID  SECURITIES.  Small Cap may not  invest more
     than  15% and  Value Equity  may not  invest more  than 10% of  their total
     assets  in repurchase  agreements maturing in  more than  seven days  or in
     other  illiquid  securities,  including securities  that  are  illiquid  by
     virtue  of  the  absence  of  a  readily  available   market  or  legal  or
     contractual restrictions as to resale.

              SELLING SHORT  AND BUYING ON MARGIN.   The Funds may  not sell any
     securities short  or purchase any securities on margin  but may obtain such
     short-term  credits as  may  be necessary  for  clearance of  purchases and
     sales of  securities, and  in addition, Value  Equity may make  short sales
     "against the box"  and make margin deposits  in connection with its  use of
     options, futures contracts, forward currency contracts  and other financial
     instruments.

              INVESTING  IN INVESTMENT COMPANIES.   The Funds may  not invest in
     securities issued by other investment companies, except  as permitted under
     the 1940  Act and except  in connection  with the merger,  consolidation or
     acquisition of all the securities or assets of such an issuer.

              INVESTING IN  ISSUERS WHOSE  SECURITIES ARE  OWNED BY  OFFICERS OF
     THE  FUND.   The Funds  may not purchase  or retain  the securities  of any
     issuer if the officers and Trustees  of the Trust or the Manager or  either
     subadviser,   Eagle  and   Awad   &  Associates   ("Awad")   (collectively,
     "Subadvisers"), who own  individually more than 1/2  of 1% of  the issuer's
     securities together own more than 5% of the issuer's securities.

              OPTION WRITING.  Small Cap may not write put or call options.

              PLEDGING.  The Funds  may not pledge any securities except  that a
     Fund may  pledge assets having  a value of  not more than 10%  of its total
     assets  to secure  permitted  borrowing from  banks  and except  that Value
     Equity may pledge its assets  in connection with options,  futures, forward
     currency  contracts, forward commitments,  when-issued or  delayed delivery
     securities or other financial instruments.

              UNSEASONED  ISSUERS.  The Funds may not invest more than 5% of the
     value  of  their   total  assets  in  securities  of  issuers  (other  than
     securities   issued   by    the   U.S.   Government,   its    agencies   or
     instrumentalities) that, with  their predecessors, have been  in continuous
     operation for less than three years.

              Except  with   respect  to   borrowing  money,  if   a  percentage
     limitation is adhered  to at the time  of the investment, a  later increase
     or decrease  in the percentage  resulting from any  change in value or  net
     assets will not result in  a violation of such restriction.  If at any time
     a Fund's borrowings exceed its limitations due to a decline in net  assets,

                                       -  19  -
<PAGE>






     such  borrowings will be promptly reduced to the extent necessary to comply
     with the limitation.

     NET ASSET VALUE
     ---------------

              The net asset values of the A  shares and C shares are  determined
     daily, Monday through Friday, except  for New Year's Day,  Presidents' Day,
     Good Friday,  Memorial Day,  Independence Day, Labor  Day, Thanksgiving Day
     and  Christmas Day,  as of  the close  of regular  trading on  the New York
     Stock Exchange  (the  "Exchange").   Net  asset  value  for each  class  is
     calculated  by  dividing  the  value  of  the  total  assets  of each  Fund
     attributable  to  that  class,  less  all  liabilities  (including  accrued
     expenses)  attributable  to that  class,  by  the  number  of class  shares
     outstanding,  the result  being adjusted  to  the nearest  whole  cent.   A
     security listed  or traded  on the Exchange,  or other domestic  or foreign
     stock  exchanges, is  valued  at  its last  sales  price  on the  principal
     exchange on which  it is traded prior  to the time when  assets are valued.
     If no sale is  reported at that time or the  security is traded in the  OTC
     market the  most recent  bid price  is used.   When  market quotations  for
     options and futures positions held  by Value Equity are  readily available,
     those positions  will  be  valued  based  upon  such  quotations.    Market
     quotations generally will not  be available for  options traded in the  OTC
     market.   Securities and other assets  for which market  quotations are not
     readily available,  or  for  which  market quotes  are  not  deemed  to  be
     reliable, are  valued at  fair value  as determined  in good  faith by  the
     Board of  Trustees.   Securities and other  assets in foreign  currency and
     foreign currency  contracts will  be valued  daily in  U.S. dollars  at the
     foreign currency  exchange rates prevailing  at the time  a Fund calculates
     the daily net asset value of each  class.  Short-term investments having  a
     maturity of 60  days or less  are valued at cost  with accrued interest  or
     discount earned included in interest receivables.

              The Funds are open for business on  days on which the Exchange  is
     open (each a  "Business Day").  Trading  in securities on European  and Far
     Eastern securities  exchanges and  OTC markets  normally is  completed well
     before the Funds' close  of business  on each Business  Day.  In  addition,
     European or  Far  Eastern securities  trading may  not  take place  on  all
     Business  Days.    Furthermore, trading  takes  place  in  various  foreign
     capital markets on days that are  not Business Days and on which the Funds'
     net  asset value is  not calculated.  Calculation  of net asset  value of A
     shares and  C  shares  does  not  take  place  contemporaneously  with  the
     determination of the  prices of the  majority of  the portfolio  securities
     used in such  calculation.  The Funds  calculate net asset value  per share
     and therefore, effect sales  and redemptions, as of the close of trading on
     the Exchange each Business Day.   If events materially affecting the  value
     of  such securities  or  other assets  occur  between the  time  when their
     prices are determined (including their  value in U.S. dollars  by reference
     to foreign currency exchange rates) and the time when the Funds' net  asset
     value  is calculated, such  securities and  other assets will  be valued at
     fair  value  by  methods  as determined  in  good  faith  by  or under  the
     direction of the Board of Trustees.

                                       -  20  -
<PAGE>






              The Board  of Trustees  may  suspend the  right of  redemption  or
     postpone payment  for more than  seven days at  times (1) during which  the
     Exchange  is  closed other  than  for  the  customary  weekend and  holiday
     closings,  (2)  during which  trading  on  the  Exchange  is restricted  as
     determined by the SEC, (3) during which an emergency exists as a result  of
     which disposal by the Funds of securities  owned by them is not  reasonably
     practicable or  it is  not reasonably  practical  for the  Funds fairly  to
     determine the value of  their net assets, or (4) for  such other periods as
     the SEC may by order permit for the  protection of the holders of A  shares
     and C shares.

     PERFORMANCE INFORMATION
     -----------------------

              The performance data for each  class of shares of each Fund quoted
     in advertising and other promotional materials  represents past performance
     and is not intended to indicate future performance.  The investment  return
     and  principal value  will  fluctuate so  that  an investor's  shares, when
     redeemed,  may be worth  more or  less than  their original cost.   Average
     annual total return quotes  for each class used in each  Fund's advertising
     and  promotional  materials  are  calculated  according  to  the  following
     formula:
                                                      n
                                                P(1+T)  = ERV

                      where:     P     =        a  hypothetical  initial payment
                                                of $1,000
                                 T     =        average annual total return
                                 n     =        number of years
                               ERV     =        ending   redeemable value  of  a
                                                hypothetical $1,000 payment made
                                                at the beginning  of the  period
                                                at the end of that period.

              In  calculating the  ending redeemable  value  for A  shares, each
     Fund's maximum  sales load is deducted from the  initial $1,000 payment and
     all dividends and  other distributions by a  Fund are assumed to  have been
     reinvested at net asset value on the reinvestment dates  during the period.
     Based  on this  formula,  total return,  or "T"  in  the formula  above, is
     computed by  finding the average annual compounded rates of return over the
     period that  would  equate  the  initial  amount  invested  to  the  ending
     redeemable value.   The  average annualized  total return for  A shares  of
     Small Cap using  this formula for the  period May 7, 1993  (commencement of
     operations) to October 31, 1995, and for the  fiscal year ended October 31,
     1995, were 12.45% and 18.08%,  respectively.  The average  annualized total
     return for C shares  of Small Cap using  this formula for the period  April
     3, 1995  (commencement of C  shares) to October  31, 1995 was 19.91%.   The
     average annualized total return  for A shares and C shares for Value Equity
     for  the  respective  periods   of  December  30,  1994  (commencement   of
     operations)  to  October 31,  1995  and April  3, 1995  (commencement  of C
     shares) to October 31, 1995, were 24.36% and 17.35%, respectively.


                                       -  21  -
<PAGE>






              In connection  with communicating its total  return to current  or
     prospective shareholders, each Fund also  may compare these figures  to the
     performance of  other mutual funds  tracked by mutual  fund rating services
     or to other  unmanaged indexes that  may assume  reinvestment of  dividends
     but generally  do not reflect deductions  for administrative and management
     costs.    In  addition,  each  Fund  may  from  time  to  time  include  in
     advertising and  promotional materials  total return figures  that are  not
     calculated according  to the  formula set  forth above  for  each class  of
     shares.   For example, in  comparing a Fund's  aggregate total return  with
     data  published  by  Lipper  Analytical  Services,   Inc.,  CDA  Investment
     Technologies,  Inc.,  or   with  such  market  indices  as  the  Dow  Jones
     Industrial Average, and  the Standard &  Poor's 500  Composite Stock  Price
     Index, each Fund  calculates its cumulative total return for each class for
     the specified periods of time by assuming an  investment of $10,000 in that
     class of  shares and assuming  the reinvestment of  each dividend or  other
     distribution  at net  asset  value on  the  reinvestment date.   Percentage
     increases  are  determined   by  subtracting  the  initial  value   of  the
     investment from  the ending  value and  by  dividing the  remainder by  the
     beginning value.   The  Funds do  not, for  this purpose,  deduct from  the
     initial  value  invested  any amount  representing  front-end  sales  loads
     charged on A shares or CDSLs charged on C shares.

              Small Cap A  shares cumulative returns using this formula  for the
     period May  7, 1993 (commencement of  operations) to October  31, 1994, and
     for  the  fiscal year  ended  October  31,  1995  was  14.67%  and  23.97%,
     respectively.  The cumulative return for Small Cap  C shares for the period
     April 3, 1995  (commencement of C shares)  to October 31, 1995  was 24.36%.
     The cumulative returns  for Value Equity  A shares for the  period December
     30, 1994 (commencement of operations) to October 31,  1995 was 25.96%.  The
     cumulative return for  Value Equity C shares  for the period April  3, 1995
     (commencement  of C  shares)  to  October 31,  1995  was  17.35%.   By  not
     annualizing  the performance  and  excluding the  effect  of the  front-end
     sales  load  on  A shares  and  the  CDSL on  C  shares,  the total  return
     calculated in  this manner simply  will reflect  the increase in  net asset
     value per  share over a  period of time,  adjusted for dividends and  other
     distributions.   Calculating total  return without taking  into account the
     sales  load or CDSL  results in  a higher  rate of return  than calculating
     total return net of the front-end sales load.

     INVESTING IN THE FUNDS
     ----------------------

              A shares and C shares are sold at their  next determined net asset
     value on Business Days.  The procedures for purchasing shares of a Fund  is
     explained in each Fund's Prospectus under "How to Buy Shares."

              Alternative Purchase Plans
              --------------------------

              A shares are sold at  their next determined net asset value plus a
     front-end sales load on  days the Exchange is open for business.   C shares
     are sold at  their next determined net asset value  on days the Exchange is

                                       -  22  -
<PAGE>






     open for  business, subject  to  a 1%  CDSL if  the investor  redeems  such
     shares within one  year.  The Manager,  as the Funds' transfer  agent, will
     establish an  account  with  each  Fund and  will  transfer  funds  to  the
     Custodian.   Normally, orders will  be accepted upon  receipt of funds  and
     will be  executed at  the net  asset value  determined as  of the  close of
     regular trading  on the  Exchange  on that  day plus  any applicable  sales
     load.   See "Alternative  Purchase Plans"  in  the Prospectus.   The  Funds
     reserve  the right  to  reject  any order  for  Fund  shares.   The  Funds'
     distributor, Raymond James & Associates, Inc. ("RJA" or  the "Distributor")
     has  agreed that  it will hold  a Fund harmless  in the event  of loss as a
     result of cancellation  of trades  in Fund shares  by the Distributor,  its
     affiliates or its customers.

              Class A Purchases at Net Asset Value       
              ------------------------------------

              Cities,   counties,   states   or   instrumentalities  and   their
     departments, authorities or agencies are  able to purchase A shares  at net
     asset value  as  long as  certain  conditions are  met:   the  governmental
     entity is  prohibited by applicable investment  laws, codes  or regulations
     from paying  a sales load  in connection with  the purchase of shares  of a
     registered investment company; the governmental entity  has determined that
     such A  shares  are a  legally  permissible  investment; and  any  relevant
     minimum purchase amounts are met.

              In the  instance of discretionary  fiduciary assets  or trusts, or
     Class A purchases  by a governmental  entity through  a registered  broker-
     dealer with which  the Distributor has a dealer  agreement, the Manager may
     make  a payment  out  of its  own  resources to  the  Distributor, who  may
     reallow  the   payment  to  the   selling  broker-dealer.    However,   the
     Distributor and the  selling broker-dealer may be required to reimburse the
     Manager for  these payments if  investors redeem A  shares within specified
     periods.

              Class A Combined Purchase Privilege (Right of Accumulation)
              -----------------------------------------------------------

              Certain   investors  may  qualify  for  the  Class  A  sales  load
     reductions indicated in the sales  load schedule in each  Fund's Prospectus
     by combining  purchases  of A  shares  into  a single  "purchase,"  if  the
     resulting purchase totals at  least $25,000.  The term "purchase" refers to
     a single  purchase by an  individual, or to  concurrent purchases that,  in
     the  aggregate,  are  at least  equal  to  the  prescribed amounts,  by  an
     individual, his  spouse  and  their children  under  the  age of  21  years
     purchasing A shares  for his or their own  account; a single purchase  by a
     trustee or other fiduciary purchasing A  shares for a single trust,  estate
     or  single  fiduciary   account  although  more  than  one  beneficiary  is
     involved; or a single purchase for the  employee benefit plans of a  single
     employer.   The term "purchase" also  includes purchases by a "company," as
     the  term is defined in the 1940 Act, but does not include purchases by any
     such company  that has not  been in  existence for at  least six months  or
     that has no purpose other than the purchase of  A shares or shares of other

                                       -  23  -
<PAGE>






     registered investment companies  at a discount; provided,  however, that it
     shall not  include  purchases  by  any  group  of  individuals  whose  sole
     organizational  nexus is  that  the participants  therein  are credit  card
     holders of a company, policy holders of  an insurance company, customers of
     either a bank or broker-dealer, or clients of an investment adviser.

              The applicable A shares  initial sales load will  be based on  the
     total of:

                      (i)       the investor's current purchase;

                      (ii)      the net asset value (at the close of business on
              the  previous  day) of  (a) all  A shares  of a  Fund held  by the
              investor and (b) all A  shares of any other mutual fund advised or
              administered by  the Manager ("Heritage Mutual Fund")  held by the
              investor and purchased at a time when A shares  of such other fund
              were distributed subject to  a sales load (including Heritage Cash
              Trust shares acquired by exchange); and 

                      (iii) the net  asset value of  all A  shares described  in
              paragraph (ii)  owned by  another shareholder eligible  to combine
              his purchase with that of the investor into a single "purchase."

              A  shares of  Heritage Income  Trust-Intermediate  Government Fund
     ("Intermediate   Government")   (formerly  Heritage   Income  Trust-Limited
     Maturity Portfolio) purchased  from February 1, 1992 through July 31, 1992,
     without payment  of  a  sales  load  will  be  deemed  to  fall  under  the
     provisions of paragraph (ii) as if they had been distributed without  being
     subject to  a sales  load, unless  those  shares were  acquired through  an
     exchange of other shares that were subject to a sales load.

              Class A Statement of Intention
              ------------------------------

              Investors  also may obtain  the reduced sales loads  shown in each
     Fund's  Prospectus by  means  of a  written  Statement of  Intention, which
     expresses the investor's intention to  invest not less than  $25,000 within
     a period of 13 months  in A shares of  a Fund or any other Heritage  Mutual
     Fund.   Each purchase  of A shares  under a Statement of  Intention will be
     made at the public offering price  or prices applicable at the time of such
     purchase  to a  single transaction of  the dollar  amount indicated  in the
     Statement.  At the investor's option, a  Statement of Intention may include
     purchases  of A shares of a Fund or any other Heritage Mutual Fund made not
     more than 90 days prior  to the date that the investor signs a Statement of
     Intention.  However, the  13-month period during which the  Statement is in
     effect will begin on the date of the earliest purchase to be included.

              The  Statement of Intention  is not a binding  obligation upon the
     investor to  purchase  the full  amount  indicated.   The  minimum  initial
     investment under a Statement of Intention  is 5% of such amount.   A shares
     purchased with the  first 5% of such  amount will be held in  escrow (while
     remaining registered in the name of the investor) to secure payment of  the

                                       -  24  -
<PAGE>






     higher sales load applicable  to the shares actually purchased  if the full
     amount  indicated is  not purchased,  and such  escrowed  A shares  will be
     redeemed  involuntarily to  pay the  additional sales  load, if  necessary.
     When  the full  amount indicated  has been  purchased, the  escrow will  be
     released.  To the extent an investor purchases  more than the dollar amount
     indicated  on  the Statement  of  Intention  and  qualifies  for a  further
     reduced sales load,  the sales load will be  adjusted for the entire amount
     purchased at  the end of the 13-month period.  The difference in sales load
     will be  used to purchase additional A shares subject  to the rate of sales
     load  applicable  to the  actual amount  of  the aggregate  purchases.   An
     investor  may  amend   his/her  Statement  of  Intention  to  increase  the
     indicated  dollar amount and  begin a new 13-month  period.   In that case,
     all investments subsequent to the amendment will be made at the sales  load
     in effect for  the higher amount.   The escrow  procedures discussed  above
     will apply.

     REDEEMING SHARES
     ----------------

              The methods  of redemption are  described in the  section of  each
     Fund's Prospectus entitled "How to Redeem Shares."

              Systematic Withdrawal Plan
              --------------------------

              Shareholders may elect to  make systematic withdrawals from a Fund
     account of  a minimum  of $50  on a  periodic basis  as set  forth in  each
     Fund's  Prospectus  under  "How  to  Redeem  Shares--Systematic  Withdrawal
     Plan."  The amounts paid  each period are obtained by  redeeming sufficient
     shares from  an account to  provide the withdrawal  amount specified.   The
     Systematic Withdrawal  Plan currently is  not available for  shares held in
     an  individual retirement  account, Section  403(b)  annuity plan,  defined
     contribution plan,  simplified employee pension  plan, or other  retirement
     plans, unless  the shareholder  establishes to  the Manager's  satisfaction
     that withdrawals from such  an account may be made without imposition  of a
     penalty.  Shareholders may  change the amount to be paid without charge not
     more than once a  year by written notice to the Distributor or the Manager.


              Redemptions will be  made at net asset value determined  as of the
     close of  regular trading on the Exchange on the 10th  day of each month or
     the  10th day of  the last month of  each period,  whichever is applicable.
     Systematic withdrawals of C shares, if made within one  year of the date of
     purchase, will be charged a  CDSL of 1%.   If the Exchange is not open  for
     business  on that  day,  the shares  will be  redeemed  at net  asset value
     determined as  of the  close  of regular  trading on  the Exchange  on  the
     preceding Business Day, minus any applicable CDSL for  C shares.  The check
     for the withdrawal payment  usually will be mailed on the next Business Day
     following redemption.    If a  shareholder  elects  to participate  in  the
     Systematic  Withdrawal  Plan,  dividends and  other  distributions  on  all
     shares in the account must be reinvested  automatically in Fund shares.   A
     shareholder may  terminate  the  Systematic Withdrawal  Plan  at  any  time

                                       -  25  -
<PAGE>






     without charge or  penalty by giving written  notice to the Manager  or the
     Distributor.   The  Funds, and  the  transfer  agent and  Distributor  also
     reserve the right to modify  or terminate the Systematic Withdrawal Plan at
     any time.

              Withdrawal  payments are treated  as a sale of  shares rather than
     as a dividend  or a capital gain distribution.   These payments are taxable
     to  the extent that the  total amount of the payments exceeds the tax basis
     of the  shares  sold.    If  the  periodic  withdrawals  exceed  reinvested
     dividends and other distributions,  the amount  of the original  investment
     may be correspondingly reduced.

              Ordinarily, a shareholder should  not purchase additional A shares
     of a Fund if  maintaining a Systematic Withdrawal Plan of A  shares because
     the  shareholder   may  incur  tax  liabilities  in  connection  with  such
     purchases  and withdrawals.    A Fund  will  not knowingly  accept purchase
     orders  from  shareholders for  additional  A  shares  if  they maintain  a
     Systematic Withdrawal Plan  unless the purchase  is equal  to at least  one
     year's  scheduled withdrawals.   In addition,  a shareholder  who maintains
     such a Plan may  not make periodic investments under each  Fund's Automatic
     Investment Plan.

              Telephone Transactions
              ----------------------

              Shareholders may  redeem shares by placing  a telephone request to
     a  Fund.    A  Fund,  its  Manager, the  Distributor  and  their  Trustees,
     directors, officers and  employees are not liable for  any loss arising out
     of  telephone  instructions  they reasonably  believe  are  authentic.   In
     acting upon telephone  instructions, these parties use procedures  that are
     reasonably designed to ensure that  such instructions are genuine,  such as
     (1) obtaining some  or all of  the following  information: account  number,
     name(s) and social  security number registered to the account, and personal
     identification; (2) recording all telephone  transactions; and  (3) sending
     written confirmation of  each transaction to  the registered  owner.   This
     policy  places  the  entire  risk  of  loss  for  unauthorized,  fraudulent
     transactions on the shareholders,  except that if a Fund, its  Manager, the
     Distributor and  their Trustees, directors, officers  and employees  do not
     follow  reasonable procedures, some  or all of them  may be  liable for any
     such losses.

              Redemptions in Kind 
              -------------------

              A Fund is obligated to redeem shares for any shareholder  for cash
     during  any 90-day  period up to  $250,000 or  1% of that  Fund's net asset
     value, whichever is less.   Any redemption beyond this amount also  will be
     in cash unless the  Board of Trustees determine that further  cash payments
     will have a  material adverse effect on remaining  shareholders.  In such a
     case, a Fund will  pay all or a portion of  the remainder of the redemption
     in  portfolio instruments, valued in  the same way  as each Fund determines
     net asset value.   The portfolio instruments  will be selected in  a manner

                                       -  26  -
<PAGE>






     that  the Board of Trustees deem fair and  equitable.  A redemption in kind
     is not as liquid as a cash redemption.  If  a redemption is made in kind, a
     shareholder receiving  portfolio instruments  could receive  less than  the
     redemption value thereof and could incur certain transaction costs.

              Receiving Payment
              -----------------

              If a  request for redemption is  received by a Fund  in good order
     (as described in  each Prospectus) before the  close of regular trading  on
     the Exchange, the shares  will be redeemed at the net asset value per share
     determined  at  such  close,  minus  any  applicable  CDSL  for  C  shares.
     Requests  for redemption  received by  a Fund  after  the close  of regular
     trading on the Exchange will be executed at  the net asset value determined
     as  of  the  close of  such  trading on  the  next trading  day,  minus any
     applicable CDSL for C shares.

              If  shares of  a Fund  are redeemed by  a shareholder  through the
     Distributor or a participating dealer,  the redemption is settled  with the
     shareholder as  an ordinary transaction.   If a  request for redemption  is
     received before the close of  regular trading on the Exchange, shares  will
     be redeemed at the net asset value  per share determined on that day, minus
     any applicable CDSL for  C shares.  Requests for  redemption received after
     the close of regular trading on  the Exchange will be executed on  the next
     trading day.  Payment  for shares redeemed normally will be made  by a Fund
     to the  Distributor or  a participating  dealer by the  third business  day
     after the day the redemption  request was made, provided  that certificates
     for shares have been delivered in proper form for transfer to  the Fund, or
     if  no certificates  have  been issued,  a  written request  signed by  the
     shareholder has been  provided to the Distributor or a participating dealer
     prior to settlement date.

              Other   supporting   legal   documents   may   be   required  from
     corporations or other organizations,  fiduciaries or persons other than the
     shareholder  of  record  making the  request  for  redemption.    Questions
     concerning the  redemption of  Fund shares  can be  directed to  registered
     representatives of the  Distributor or a  participating dealer,  or to  the
     Manager.

     EXCHANGE PRIVILEGE
     ------------------

              Shareholders who have  held Fund shares  for at least 30  days may
     exchange  some or  all of  their A  shares  or C  shares for  corresponding
     classes of shares  of any other Heritage  Mutual Fund.  All  exchanges will
     be based on  the respective net asset  values of the Heritage  Mutual Funds
     involved.  An  exchange is effected  through the redemption  of the  shares
     tendered for  exchange and the purchase  of shares being acquired  at their
     respective net asset  values as next  determined following  receipt by  the
     Heritage  Mutual  Fund whose  shares  are  being  exchanged  of (1)  proper
     instructions  and all necessary supporting  documents as  described in such
     fund's Prospectus,  or  (2)  a  telephone  request  for  such  exchange  in

                                       -  27  -
<PAGE>






     accordance with  the procedures  set forth  in each  Fund's Prospectus  and
     below.

              A  shares  of  Intermediate Government  (formerly  Heritage Income
     Trust-Limited Maturity Portfolio)  purchased from February 1, 1992  through
     July 31, 1992,  without payment of an  initial sales load may  be exchanged
     into A shares  of a Fund without  payment of any sales  load.  A shares  of
     Intermediate Government  purchased after July  31, 1992 without an  initial
     sales load will be subject  to a sales load when exchanged into A shares of
     a Fund, unless  those shares were acquired  through an exchange of  other A
     shares that were subject to an initial sales load.

              Shares acquired pursuant to a  telephone request for exchange will
     be held under the same  account registration as the shares redeemed through
     such exchange.   For  a discussion  of limitation of  liability of  certain
     entities, see "Telephone Transactions" above.

              Telephone  exchanges can  be effected  by calling  the  Manager at
     (800)  421-4184  or  by   calling  a   registered  representative  of   the
     Distributor,    a    participating    dealer    or    participating    bank
     ("Representative").  In  the event that a shareholder or his Representative
     is unable to  reach the Manager by  telephone, a telephone exchange  can be
     effected  by  sending  a  telegram  to  Heritage  Asset  Management,  Inc.,
     attention:   Shareholder Services.   Telephone or telegram  requests for an
     exchange  received by a  Fund before  the close  of regular trading  on the
     Exchange will  be effected  at the close  of regular  trading on that  day.
     Requests  for an exchange received after  the close of regular trading will
     be effected  on the  Exchange's next  trading day.   Due  to the volume  of
     calls or other  unusual circumstances, telephone exchanges may be difficult
     to implement during certain time periods.

     TAXES
     -----

              GENERAL.   Each Fund  is  treated as  a separate  corporation  for
     Federal income tax  purposes.  In order  to qualify or continue  to qualify
     for the favorable  tax treatment afforded to a regulated investment company
     ("RIC") under the Internal Revenue Code of 1986, as  amended ("Code"), each
     Fund must  distribute annually  to  its shareholders  at least  90% of  its
     investment company taxable  income (generally consisting of  net investment
     income, net  short-term capital  gain and  net gains  from certain  foreign
     currency  transactions) ("Distribution Requirement")  and must meet several
     additional requirements.   With  respect to each  Fund, these  requirements
     include the  following: (1) the Fund must derive  at least 90% of its gross
     income each  taxable year  from dividends, interest,  payments with respect
     to  securities loans  and  gains from  the  sale  or other  disposition  of
     securities  or foreign  currencies, or other  income (including  gains from
     options, futures  or forward  currency contracts)  derived with respect  to
     its  business  of  investing in  securities  or  those currencies  ("Income
     Requirement"); (2) the Fund  must derive less than 30% of its  gross income
     each taxable year from  the sale or other disposition of securities, or any
     of the following,  that were held for less than  three months -- options or

                                       -  28  -
<PAGE>






     futures  (other than those  on foreign  currencies), or  foreign currencies
     (or options,  futures or forward  contracts thereon) that  are not directly
     related to the  Fund's principal business  of investing  in securities  (or
     options and futures  with respect thereto) ("Short-Short  Limitation"); (3)
     at the  close of each quarter of  the Fund's taxable year,  at least 50% of
     the value of its total assets must  be represented by cash and cash  items,
     U.S. Government securities, securities  of other RICs and other securities,
     with those other  securities limited, in respect  of any one issuer,  to an
     amount that does not exceed  5% of the value of the Fund's total assets and
     that does not  represent more than 10%  of the issuer's outstanding  voting
     securities; and  (4) at  the close of  each quarter  of the Fund's  taxable
     year, not  more than 25% of the  value of its total  assets may be invested
     in securities (other than U.S.  Government securities or the  securities of
     other RICs) of any one issuer.

              Each  Fund  will  be  subject to  a  nondeductible  4% excise  tax
     ("Excise Tax")  to the  extent it  fails to  distribute by the  end of  any
     calendar  year substantially all of  its ordinary income  for that year and
     capital gain net income  for the  one-year period ending  on October 31  of
     that year, plus certain other amounts. 

              A redemption of Fund shares will result in a  taxable gain or loss
     to the redeeming shareholder, depending on whether the redemption  proceeds
     are  more or less  than the shareholder's  adjusted basis  for the redeemed
     shares (which  normally includes  any sales  load paid  on A  shares).   An
     exchange of shares of  either Fund for shares of any other  Heritage Mutual
     Fund  (including   the  other   Fund)  generally  will   have  similar  tax
     consequences.  However,  special rules apply when a shareholder disposes of
     shares of  a Fund  through a redemption  or exchange  within 90 days  after
     purchase  thereof  and  subsequently reacquires  shares  of  that  Fund  or
     acquires shares  of another  Heritage Mutual  Fund without  paying a  sales
     load  due  to the  30-day reinstatement  or exchange  privilege.   In these
     cases, any gain on  the disposition of the  original Fund A shares will  be
     increased, or loss decreased,  by the  amount of the  sales load paid  when
     those shares  were acquired,  and that  amount will  increase the  adjusted
     basis of the  shares subsequently acquired.   In addition,  if Fund  shares
     are  purchased  (whether   pursuant  to  the  reinstatement   privilege  or
     otherwise)  within 30 days  before or after redeeming  other shares of that
     Fund (regardless of  class) at a loss,  all or a portion of  that loss will
     not  be deductible  and  will increase  the  basis of  the newly  purchased
     shares.

              If shares of  a Fund are sold at a  loss after being held  for six
     months or less,  the loss will be  treated as long-term, instead  of short-
     term, capital  loss  to  the  extent  of  any  capital  gain  distributions
     received on those  shares.  Investors also  should be aware that  if shares
     are  purchased shortly  before  the record  date  for a  dividend  or other
     distribution, the  shareholder  will pay  full  price  for the  shares  and
     receive some portion of the price back as a taxable distribution.

              INCOME FROM  FOREIGN SECURITIES.  Dividends  and interest received
     by each Fund  may be subject to income,  withholding or other taxes imposed

                                       -  29  -
<PAGE>






     by foreign countries and  U.S. possessions that  would reduce the yield  on
     its securities.  Tax conventions  between certain countries and  the United
     States  may reduce  or  eliminate these  foreign  taxes, however,  and many
     foreign countries do  not impose taxes on  capital gains in respect  of in-
     vestments  by foreign investors.   If  more than 50%  of the  value of each
     Fund's  total  assets  at  the  close  of  any  taxable  year  consists  of
     securities of foreign corporations, it  will be eligible to, and  may, file
     an election  with  the  Internal  Revenue  Service  that  will  enable  its
     shareholders, in effect, to  receive the benefit of the foreign  tax credit
     with respect to  any foreign and U.S. possessions  income taxes paid by it.
     Pursuant to  any  such  election, each  Fund  would  treat those  taxes  as
     dividends paid to its shareholders  and each shareholder would  be required
     to (1) include in  gross income, and treat as  paid by the shareholder, the
     shareholder's  proportionate   share  of   those  taxes,   (2)  treat   the
     shareholder's share of  those taxes and of  any dividend paid by  each Fund
     that represents  income from  foreign or  U.S. possessions  sources as  the
     shareholder's  own income  from those  sources, and  (3) either deduct  the
     taxes  deemed  paid  by  the  shareholder in  computing  the  shareholder's
     taxable income or,  alternatively, use the foregoing  information in calcu-
     lating the  foreign tax  credit against  the  shareholder's Federal  income
     tax.  Each Fund  will report to its shareholders shortly after each taxable
     year their respective  shares of each  Fund's income  from sources  within,
     and taxes paid to, foreign countries and U.S.  possessions if it makes this
     election.

              Value Equity may  invest in the stock of "passive  foreign invest-
     ment companies"  ("PFICs").   A  PFIC is  a  foreign corporation  that,  in
     general, meets  either of  the  following tests:  (1) at least  75% of  its
     gross income is  passive or (2) an  average of at  least 50% of its  assets
     produce, or are held  for the production of, passive income.  Under certain
     circumstances, Value  Equity will  be subject  to Federal income  tax on  a
     portion of any "excess distribution"  received on the stock of a PFIC or of
     any gain on  disposition of the  stock (collectively  "PFIC income"),  plus
     interest thereon,  even if Value  Equity distributes  the PFIC income  as a
     taxable dividend to its shareholders.  The balance  of the PFIC income will
     be  included  in  Value  Equity's investment  company  taxable  income and,
     accordingly,  will  not be  taxable  to it  to  the extent  that  income is
     distributed to its shareholders.  

              If Value Equity  invests in a PFIC and elects to treat the PFIC as
     a  "qualified  electing  fund,"  then in  lieu  of  the  foregoing  tax and
     interest obligation, Value  Equity will be  required to  include in  income
     each  year  its pro  rata share  of  the qualified  electing  fund's annual
     ordinary  earnings  and net  capital  gain  (the  excess  of net  long-term
     capital gain  over net  short-term capital  loss) --  which probably  would
     have to  be distributed to  satisfy the Distribution  Requirement and avoid
     imposition of the Excise Tax  -- even if those  earnings and gain were  not
     received by Value Equity.  In most  instances it will be very difficult, if
     not  impossible,  to make  this  election because  of  certain requirements
     thereof.



                                       -  30  -
<PAGE>






              Pursuant  to proposed  regulations, open-end  RICs, such  as Value
     Equity,   would be entitled  to elect  to "mark-to-market"  their stock  in
     certain PFICs.  "Marking-to-market," in this  context, means recognizing as
     gain for each taxable year the  excess, as of the end of that year,  of the
     fair market  value of  each such PFIC's  stock over  the adjusted basis  in
     that stock (including mark-to-market gain for each prior year for which  an
     election was in effect).

              Gains or  losses (1) from  the disposition of  foreign currencies,
     (2) from  the  disposition  of  debt  securities   denominated  in  foreign
     currency that are attributable to fluctuations in the value of  the foreign
     currency between the date of acquisition of  each security and the date  of
     disposition,  and (3) that  are attributable  to  fluctuations in  exchange
     rates that occur  between the time Value Equity accrues dividends, interest
     or other receivables or  accrues expenses or other  liabilities denominated
     in a  foreign  currency and  the time  Value Equity  actually collects  the
     receivables or pays  the liabilities, generally will be treated as ordinary
     income or  loss.   These gains  or losses,  referred to  under the  Code as
     "section 988"  gains or  losses, may  increase or  decrease  the amount  of
     Value Equity's investment company taxable  income to be distributed  to its
     shareholders.

              HEDGING  STRATEGIES.   The  use  of hedging  strategies,  such  as
     selling  (writing)  and  purchasing  options  and   futures  contracts  and
     entering into forward currency  contracts, involves complex rules that will
     determine for income tax purposes  the character and timing  of recognition
     of the  gains and  losses Value  Equity realizes  in connection  therewith.
     Gains from  the disposition  of  foreign currencies  (except certain  gains
     therefrom  that may  be  excluded by  future  regulations), and  gains from
     options, futures  and forward  currency contracts  derived by Value  Equity
     with respect  to  its  business  of  investing  in  securities  or  foreign
     currencies,  will   qualify  as   permissible  income   under  the   Income
     Requirement.  However, income from  the disposition of options  and futures
     contracts (other than those  on foreign currencies) will be  subject to the
     Short-Short  Limitation  if they  are  held  for  less  than three  months.
     Income from the  disposition of foreign currencies, and futures and forward
     contracts  thereon,  that  are  not  directly  related  to  Value  Equity's
     principal business of  investing in securities (or options and futures with
     respect to securities) also will  be subject to the  Short-Short Limitation
     if they are held for less than three months.

              If Value  Equity satisfies  certain requirements, any  increase in
     value  of a position that is part of a "designated hedge" will be offset by
     any decrease  in value (whether realized or  not) of the offsetting hedging
     position  during  the period  of  the  hedge  for  purposes of  determining
     whether Value Equity  satisfies the Short-Short Limitation.  Thus, only the
     net gain  (if any)  from the  designated hedge  will be  included in  gross
     income  for  purposes of  that  limitation.    Value  Equity will  consider
     whether it  should  seek to  qualify for  this  treatment for  its  hedging
     transactions.   To the extent Value Equity  does not so qualify,  it may be
     forced to defer  the closing out  of certain  options, futures and  forward


                                       -  31  -
<PAGE>






     currency contracts beyond  the time when it otherwise would be advantageous
     to do so, in order for Value Equity to continue to qualify as a RIC.

              Certain options and futures in which Value Equity may invest  will
     be  "section 1256 contracts."  Section  1256 contracts held by Value Equity
     at  the end of  each taxable year, other  than section  1256 contracts that
     are  part  of a  "mixed straddle"  with  respect to  which it  has  made an
     election not to  have the following rules apply, must be "marked-to-market"
     (that is, treated as sold for their  fair market value) for Federal  income
     tax  purposes,  with the  result that  unrealized gains  or losses  will be
     treated  as though they  were realized.   Sixty percent of  any net gain or
     loss recognized on these deemed sales, and 60% of  any net realized gain or
     loss from any  actual sales of section  1256 contracts, will be  treated as
     long-term capital gain or  loss, and the balance will be treated  as short-
     term capital gain or loss.  Section  1256 contracts also may be  marked-to-
     market for purposes of the Excise Tax.

              Code  section 1092 (dealing  with straddles)  also may  affect the
     taxation  of  options and  futures  contracts  in  which  Value Equity  may
     invest.  Section  1092 defines a  "straddle" as  offsetting positions  with
     respect  to personal  property;  for these  purposes,  options and  futures
     contracts are personal  property.  Section 1092 generally provides that any
     loss from the disposition of a position in a straddle may be  deducted only
     to  the  extent the  loss  exceeds the  unrealized  gain on  the offsetting
     position(s) of  the straddle.   Section  1092 also  provides certain  "wash
     sale" rules,  which apply  to transactions where  a position  is sold at  a
     loss and a new offsetting position is acquired within  a prescribed period,
     and "short  sale" rules  applicable to  straddles.   If Value  Equity makes
     certain elections, the amount, character  and timing of the  recognition of
     gains and losses from the  affected straddle positions would  be determined
     under rules that vary according to the elections made.  Because only a  few
     of the  regulations implementing the straddle  rules have been promulgated,
     the  tax consequences  to  Value Equity  of  straddle transactions  are not
     entirely clear.

     FUND INFORMATION
     ----------------

              Management of the Funds
              -----------------------

              TRUSTEES AND  OFFICERS.   Trustees and officers  are listed  below
     with  their   addresses,  principal  occupations  and   present  positions,
     including any affiliation with Raymond James  Financial, Inc. ("RJF"), RJA,
     the Manager, Eagle and Awad.








                                       -  32  -
<PAGE>






     <TABLE>
     <CAPTION>
                                       Position with                   Principal Occupation
                 Name                    the Trust                    During Past Five Years
                 ----                  -------------                  ----------------------

       <S>                        <C>                       <C>

       Thomas A. James*                   Trustee           Chairman of the Board  since 1986 and Chief
       880 Carillon Parkway                                 Executive  Officer  since   1969  of   RJF;
       St. Petersburg, FL 33716                             Chairman of  the Board  of RJA  since 1986;
                                                            Chairman of the  Board of Eagle  since 1984
                                                            and Chief Executive  Officer of Eagle since
                                                            July 1994.

       Richard K. Riess*                  Trustee           President   of  Eagle,   January   1995  to
       880 Carillon Parkway                                 present,  Chief   Operating  Officer,  July
       St. Petersburg, FL 33716                             1988  to present, Executive Vice President,
                                                            July   1988-December  1993;   President  of
                                                            Heritage  Mutual Funds,  June 1985-November
                                                            1991. 

       Donald W. Burton                   Trustee           President   of   South   Atlantic   Capital
       614 W. Bay Street                                    Corporation    (venture   capital)    since
       Suite 200                                            October 1981.
       Tampa, FL  33606

       C. Andrew Graham                   Trustee           Vice President  of  Financial Designs  Ltd.
       Financial Designs, Ltd.                              since  1992;  Executive  Vice  President of
       1775 Sherman Street                                  the  Madison  Group,  Inc.,  October  1991-
       Suite 1900                                           1992;  Principal of First  Denver Financial
       Denver, CO  80203                                    Corporation   (investment  banking)   since
                                                            1987.

       David M. Phillips                  Trustee           Chairman  and  Chief Executive  Officer  of
       World Trade Center                                   CCC Information  Services, Inc.  since 1994
         Chicago                                            and  of  InfoVest Corporation  (information
       444 Merchandise Mart                                 services   to   the  insurance   and   auto
       Chicago, IL  60654                                   industries  and consumer  households) since
                                                            October 1982.

       Eric Stattin                       Trustee           Litigation  Consultant/Expert  Witness  and
       2587 Fairway Village                                 private investor since February 1988.
         Drive
       Park City, UT   84060








                                       -  33  -
<PAGE>






                                       Position with                   Principal Occupation
                 Name                    the Trust                    During Past Five Years
                 ----                  -------------                  ----------------------

       James L. Pappas                    Trustee           Dean of College  of Business Administration
       University of South                                  since  August 1987  and Lykes  Professor of
         Florida                                            Banking  and Finance  since August  1986 at
       College of Business                                  University of South Florida.
         Administration
       Tampa, FL  33620

       Stephen G. Hill                   President          Chief  Executive  Officer and  President of
       880 Carillon Parkway                                 the Manager  since April 1989  and Director
       St. Petersburg, FL                                   since December 31, 1994.
       33716

       Donald H. Glassman                Treasurer          Treasurer  of the  Manager since  May 1989;
       880 Carillon Parkway                                 Treasurer  of Heritage  Mutual  Funds since
       St. Petersburg, FL 33716                             May 1989.

       Clifford J. Alexander             Secretary          Partner, Kirkpatrick & Lockhart LLP.
       1800 Massachusetts
          Ave., N.W.
       Washington, DC  20036

       Patricia Schneider                Assistant          Compliance Administrator of the Manager.
       880 Carillon Parkway              Secretary
       St. Petersburg, FL 33716

       Robert J. Zutz                    Assistant          Partner, Kirkpatrick & Lockhart LLP.
       1800 Massachusetts                Secretary
         Ave., N.W.
       Washington, DC  20036

     </TABLE>

     *        These   Trustees   are   "interested   persons"   as  defined   in
              section 2(a)(19) of the 1940 Act.

              The Trustees and officers of the Trust  as a group, own less  than
     1% of each  Fund's shares outstanding.   The Trust's  Declaration of  Trust
     provides  that the Trustees  will not be liable  for errors  of judgment or
     mistakes of  fact or  law.   However, they  are not  protected against  any
     liability  to which they  would otherwise  be subject by  reason of willful
     misfeasance, bad  faith,  gross negligence  or  reckless disregard  of  the
     duties involved in the conduct of their office.

              The  Trust  currently  pays   Trustees  who  are  not  "interested
     persons" of the  Trust $1,333.33  annually and $333.33  per meeting of  the
     Board  of Trustees.  Trustees also are reimbursed for any expenses incurred
     in attending meetings.   Because the Manager performs substantially  all of


                                       -  34  -
<PAGE>






     the services necessary for  the operation of each Fund,  each Fund requires
     no  employees.  No  officer, director or  employee of  the Manager receives
     any compensation  from either  Fund for acting  as a  director or  officer.
     The following table shows  the compensation earned by each Trustee  for the
     fiscal year ended October 31, 1995.

     <TABLE>
     <CAPTION>
                                                              Compensation Table
                                                              ------------------
                                                                                                Total Compensation From
                                                 Pension or Retirement                             the Trust and the
                                  Aggregate       Benefits Accrued as         Estimated           Heritage Family of
          Name of Person,       Compensation      Part of the Trust's      Annual Benefits            Funds Paid
             Position          From the Trust           Expenses            Upon Retirement           to Trustees
          --------------       --------------     --------------------     -----------------    -----------------------

       <S>                     <C>               <C>                      <C>                   <C>
       Donald W. Burton,          $2,333                   $0                     $0                 $14,000     
       Trustee

       C. Andrew Graham,          $2,667                   $0                     $0                 $16,000     
       Trustee

       David M. Phillips,         $2,333                   $0                     $0                 $14,000     
       Trustee
       Eric Stattin,              $2,667                   $0                     $0                 $16,000     
       Trustee

       James L. Pappas,           $2,667                   $0                     $0                 $16,000     
       Trustee
       Richard K. Riess,             $0                    $0                     $0                      $0
       Trustee

       Thomas A. James,              $0                    $0                     $0                      $0
       Trustee

     </TABLE>

              Investment Adviser and Administrator; Subadvisers  
              -------------------------------------------------

              The  Funds' investment adviser  and administrator,  Heritage Asset
     Management, Inc., was organized  as a Florida corporation in 1985.  All the
     capital stock  of the Manager is  owned by RJF.   RJF is  a holding company
     that,  through its  subsidiaries,  is engaged  primarily in  providing cus-
     tomers  with  a wide  variety  of  financial  services  in connection  with
     securities, limited partnerships,  options, investment banking and  related
     fields.




                                       -  35  -
<PAGE>






              Under   an  Investment   Advisory  and   Administration  Agreement
     ("Advisory Agreement") dated March 29,  1993 and supplemented in  March 31,
     1993 to include  Value Equity, between the Trust on behalf of Small Cap and
     Value Equity, respectively,  and the Manager,  and subject  to the  control
     and direction  of the  Board of  Trustees, the  Manager is responsible  for
     reviewing  and   establishing  investment  policies   for  each  Fund   and
     administering   the   Funds'   noninvestment  affairs.      Under  separate
     Subadvisory Agreements, Eagle  and Awad each provide investment  advice and
     portfolio management services,  subject to direction by the Manager and the
     Board of Trustees, to Small Cap for a fee payable by  the Manager.  Under a
     Subadvisory  Agreement,  Eagle  provides  investment  advice  and portfolio
     management  services, subject to the direction of the Manager and the Board
     of Trustees to Value Equity for a fee payable by the Manager  (collectively
     the "Subadvisory Agreements").

              The Manager  also is obligated  to furnish each  Fund with  office
     space, administrative, and  certain other services as well as executive and
     other  personnel necessary for  the operation of a  Fund.   The Manager and
     its affiliates also  pay all the compensation of  Trustees of the Trust who
     are employees of the  Manager and its affiliates.   Each Fund pays all  its
     other expenses that  are not assumed  by the  Manager.  Each  Fund also  is
     liable  for such  nonrecurring expenses as  may arise, including litigation
     to which a Fund may be  a party.  Each Fund also may  have an obligation to
     indemnify its Trustees and officers with respect to any such litigation.

              The Advisory  Agreement and  the Subadvisory Agreements  each were
     approved by the  Board of Trustees (including  all of the Trustees  who are
     not "interested  persons" of the  Manager or Subadvisers,  as defined under
     the 1940 Act) and by  the shareholders of the Trust in  compliance with the
     1940 Act.  Each Agreement  will continue in force for a period of two years
     unless its  continuance is approved at  least annually thereafter by  (1) a
     vote, cast in  person at a meeting called  for that purpose, of  a majority
     of  those Trustees  who are  not "interested  persons" of  the Manager, the
     Subadvisers or the Trust,  and by (2) the majority vote  of either the full
     Board of Trustees or the vote of a majority of the  outstanding shares of a
     Fund.    The   Advisory  and  Subadvisory  Agreements   each  automatically
     terminates on assignment, and each is terminable on not more than 60  days'
     written notice  by the Trust  to either party.   In addition, the  Advisory
     Agreement  may be terminated  on not less than  60 days'  written notice by
     the Manager to  a Fund and the Subadvisory  Agreements may be terminated on
     not  less than 60 days'  written notice by the  Manager or 90 days' written
     notice by the Subadvisers.   Under the terms of the Advisory Agreement, the
     Manager  automatically  becomes  responsible for  the  obligations  of  the
     Subadvisers upon termination of the  Subadvisory Agreements.  In  the event
     the Manager ceases  to be the Manager of  a Fund or the  Distributor ceases
     to be principal  distributor of shares  of a Fund, the  right of a Fund  to
     use the identifying name of "Heritage" may be withdrawn.

              The  Manager and  the Subadvisers  shall not  be liable  to either
     Fund or any shareholder  for anything done or omitted by them,  except acts
     or omissions  involving willful misfeasance, bad faith, gross negligence or
     reckless disregard  of the  duties imposed  upon them  by their  agreements

                                       -  36  -
<PAGE>






     with a  Fund or  for any  losses that  may be  sustained  in the  purchase,
     holding or sale of any security.

              All of the officers of  each Fund except for Messrs. Alexander and
     Zutz are  officers or  directors of the  Manager.  These  relationships are
     described under "Management of the Funds."  

              ADVISORY AND  ADMINISTRATION FEE.  The  annual investment advisory
     fee paid monthly by  each Fund to  the Manager is  based on the  applicable
     Fund's average daily net assets as listed in each Fund's Prospectus.

              For Small  Cap, the Manager  has voluntarily agreed  to waive  its
     management fees to the  extent that annual operating expenses  attributable
     to A shares exceed 1.80% of  the average daily net assets or to the  extent
     that annual operating  expenses attributable to  C shares  exceed 2.55%  of
     average daily  net assets  attributable to  that class  during this  fiscal
     year.   To the extent that  the Manager waives its  fees for one  class, it
     will  waive its fees  for the  other class on  a proportionate  basis.  The
     Manager  has entered  into  an agreement  with  the Subadvisers  to provide
     investment advice and portfolio  management services to the Fund for  a fee
     paid by the Manager to each Subadviser equal to 50% of  the fees payable to
     the Manager by  the Fund, without regard to  any reduction in fees actually
     paid to  the Manager as  a result of expense  limitations.  For  the period
     from May 7, 1993 (commencement of operations)  to October 31, 1993 and  the
     two years ended  October 31, 1995,  management fees  amounted to  $156,975,
     $416,788  and $465,132,  respectively.   For the  period from  May 7,  1993
     (commencement of  operations) to October  31, 1993, the  Manager waived its
     fees  in the amount  of $14,764.  This  amount was recovered  in the fiscal
     year ended October  31, 1994.  The  Research Department of Raymond  James &
     Associates,  Inc.  ("Research"),  a former  subadviser  of  Small  Cap  who
     resigned as its subadviser on November 20,  1995, received from the Manager
     for  the period  from May 7,  1993 (commencement of  operations) to October
     31, 1993, the fiscal year  ended October 31, 1994, and November 1,  1995 to
     November 20, 1995 (when  Research resigned as subadviser), subadvisory fees
     of $38,815, $99,764 and $74,583,  respectively.  Eagle began  as subadviser
     to Small  Cap on  August 7,  1995 and  received subadvisory  fees from  the
     Manager for the period August  7, 1995 to October 31, 1995 in the amount of
     $30,725.   For  the period  May 7,  1993  (commencement of  operations)  to
     October  31, 1993 and the two fiscal years ended October 31, 1994 and 1995,
     the Manager paid Awad subadvisory  fees of $38,972, $101,249,  and $127,866
     respectively.

              For Value  Equity, the annual investment advisory fee paid monthly
     by  Value  Equity to  the  Manager is  set forth  in  its Prospectus.   The
     Manager  voluntarily has agreed to waive management fees to the extent that
     annual operating expenses  attributable to A shares exceed 1.65% of average
     daily  net  assets   or  to  the  extent  that  annual  operating  expenses
     attributable  to  C  shares  exceed  2.40%  of  average  daily  net  assets
     attributable to that class  during this  fiscal year.   To the extent  that
     the Manager waives its  fees for one class, it will  waive its fees for the
     other class on  a proportionate  basis.  The  Manager has  entered into  an
     agreement with Eagle to  provide investment advice and portfolio management

                                       -  37  -
<PAGE>






     services to Value Equity for  a fee paid by  the Manager to Eagle equal  to
     50%  of the fees  paid to the Manager,  without regard to  any reduction in
     fees actually paid  to the Manager as a result of expense limitations.  For
     the period  December 30, 1994  (commencement of operations)  to October 31,
     1995, management  fees  amounted to  $47,250.   For  the same  period,  the
     Manager waived its  fees in the  amount of $47,250 and  reimbursed expenses
     in the amount  of $68,724.  For the  period December 30, 1994 (commencement
     of operations) to  October 31, 1995, the  Manager paid subadvisory  fees of
     $23,625.

              CLASS-SPECIFIC  EXPENSES.   Each  Fund may  determine  to allocate
     certain  of its expenses (in addition to distribution fees) to the specific
     classes of a Fund's shares to which those expenses are attributable.

              STATE  EXPENSE  LIMITATIONS.    Certain  states  have  established
     expense limitations  for investment companies  whose shares are  registered
     for sale  in that  state.  If  a Fund's  operating expenses (including  the
     investment advisory  fee, but  not including  distribution fees,  brokerage
     commissions,  interest,  taxes  and extraordinary  expenses)  exceed  state
     expense limits,  the Manager will  reimburse a Fund  for its expenses  over
     the limitation.   If a  Fund's monthly projected  operating expenses exceed
     applicable  state expense  limitations, the  investment  advisory fee  paid
     will be reduced  on a  monthly basis by  the amount  of the excess,  unless
     waivers of  the  expense  limitations  are  obtained  by  such  Fund.    If
     applicable  state expense  limitations  are  exceeded,  the  amount  to  be
     reimbursed by the Manager  will be limited to the amount of  the investment
     advisory fee and that Fund may  have to cease offering Fund shares for sale
     in certain states until  the expense  ratio declines.   Any fees waived  by
     the Manager can  be recovered by  it from a  Fund when such recovery  would
     not  cause that Fund  to exceed its expense  limits.   The most restrictive
     current state  expense limit  is  2.5% of  a Fund's  first $30  million  in
     assets, 2.0%  of the  next $70 million  in assets  and 1.5%  of all  excess
     assets.  

              BROKERAGE PRACTICES
              -------------------

              While  each  Fund  generally  purchases  securities for  long-term
     capital  gains,  each Fund  may  engage  in short-term  transactions  under
     various market conditions  to a greater  extent than  certain other  mutual
     funds with  similar investment  objectives.   Thus, the  turnover rate  may
     vary greatly from year to year  or during periods within a year.  A  Fund's
     portfolio turnover rate is computed by dividing the  lesser of purchases or
     sales  of securities  for  the period  by the  average  value of  portfolio
     securities for that period.   Small Cap's portfolio turnover  rates for the
     two years ended  October 31, 1995, were  95% and 89%, respectively.   Value
     Equity's  annualized portfolio  turnover rate for  the period  December 30,
     1994  (commencement   of  operations)   to  October   31,  1995,  was   82%
     (annualized).    It  is  not  anticipated  that  Value  Equity's  portfolio
     turnover rate will  deviate greatly from this rate  during it's next fiscal
     year.


                                       -  38  -
<PAGE>






              The  Subadvisers are responsible for the  execution of each Fund's
     portfolio  transactions  and   must  seek  the  most  favorable  price  and
     execution for  such transactions.   Best execution, however,  does not mean
     that a  Fund necessarily  will be  paying the lowest  commission or  spread
     available.  Rather, each  Fund also will take into account such  factors as
     size of the  order, difficulty of  execution, efficiency  of the  executing
     broker's facilities, and any risk assumed by the executing broker.

              It  is a common  practice in the investment  advisory business for
     advisers  of investment  companies  and  other institutional  investors  to
     receive  research, statistical and  quotation services  from broker-dealers
     who  execute  portfolio transactions  for  the  clients of  such  advisers.
     Consistent  with the  policy  of most  favorable  price and  execution, the
     Subadvisers  may give  consideration  to  research, statistical  and  other
     services furnished by  brokers or dealers.   In  addition, the  Subadvisers
     may  place  orders with  brokers  who provide  supplemental  investment and
     market research and  securities and economic analysis and  may pay to these
     brokers  a higher brokerage  commission or  spread than  may be  charged by
     other brokers, provided that the  Subadvisers determine in good  faith that
     such commission  is reasonable in  relation to the  value of brokerage  and
     research services provided.   Such research and  analysis may be useful  to
     the  Subadvisers in  connection  with services  to  clients other  than the
     Funds.

              Value  Equity generally  uses the  Distributor, its  affiliates or
     certain affiliates of Eagle  as a broker for agency transactions  in listed
     and  OTC securities at commission  rates and under circumstances consistent
     with the policy  of best execution.   Commissions paid to  the Distributor,
     its  affiliates or certain affiliates  of Eagle will  not exceed "usual and
     customary brokerage  commissions."  Rule  l7e-1 under the  1940 Act defines
     "usual and customary" commissions  to include amounts that are  "reasonable
     and  fair  compared to the commission,  fee or other remuneration  received
     or  to  be   received  by  other  brokers  in  connection  with  comparable
     transactions  involving similar  securities being  purchased or  sold  on a
     securities exchange during a comparable period of time."

              Although it currently does not intend to do so,  Small Cap may use
     the  Distributor  as broker  for  agency  transactions  in  listed and  OTC
     securities at commission rates and under  circumstances consistent with the
     policy of best  execution.  Provided, however,  that if Small Cap  does use
     the  Distributor as a broker, commissions paid  to the Distributor will not
     exceed "usual and customary brokerage commissions" as defined above.

              The  Subadvisers   also  may  select  other   brokers  to  execute
     portfolio  transactions.  In the OTC market, each Fund generally deals with
     primary market-makers unless a  more favorable  execution can otherwise  be
     obtained.

              Aggregate brokerage commissions  paid by Small Cap  for the period
     May 7, 1993 (commencement  of operations) to October 31, 1993, and  the two
     years ended October 31, 1995  amounted to $128,813, $145,750  and $196,353,
     respectively.   Aggregate brokerage  commissions paid by  Value Equity  for

                                       -  39  -
<PAGE>






     the period  December 30, 1994  (commencement of operations)  to October 31,
     1995 amounted to $43,552.

              Each Fund may not buy  securities from, or sell securities to, the
     Distributor  as principal.    However, the  Board  of Trustees  has adopted
     procedures in conformity  with Rule 10f-3  under the 1940 Act  whereby each
     Fund may purchase  securities that are  offered in  underwritings in  which
     the Distributor is a participant.  The Board  of Trustees will consider the
     possibilities of seeking to  recapture for the benefit of expenses  to each
     Fund of  certain portfolio transactions,  such as underwriting  commissions
     and  tender   offer  solicitation  fees,   by  conducting  such   portfolio
     transactions  through affiliated  entities, including  the Distributor, but
     only to the  extent such recapture  would be  permissible under  applicable
     regulations, including the rules of the National Association of  Securities
     Dealers, Inc. and other self-regulatory organizations.

              Pursuant to Section 11(a) of the Securities Exchange Act of  1934,
     as amended,  each  Fund expressly  consented to  the Distributor  executing
     transactions on an exchange on its behalf.

              DISTRIBUTION OF SHARES
              ----------------------

              The Distributor and Representatives  with whom the Distributor has
     entered into dealer agreements  offer shares  of each Fund  as agents on  a
     best efforts  basis and are  not obligated to  sell any specific amount  of
     shares.    In  this  connection,  the Distributor  makes  distribution  and
     servicing payments to  participating dealers in connection with the sale of
     shares of a Fund.   Pursuant to the Distribution Agreements with  the Trust
     on  behalf  of each  Fund  with  respect to  A  shares  and C  shares,  the
     Distributor bears the  cost of making information about each Fund available
     through  advertising,  sales  literature  and  other  means,  the  cost  of
     printing and mailing prospectuses  to persons other than  shareholders, and
     salaries and other expenses relating  to selling efforts.   The Distributor
     also pays service  fees to dealers for providing personal services to Class
     A and  C shareholders and for maintaining shareholder  accounts.  Each Fund
     pays the  cost of  registering and  qualifying its shares  under state  and
     federal securities  laws and typesetting of  its prospectuses  and printing
     and distributing prospectuses to existing shareholders.

              Each Fund  has adopted a Class  A Distribution Plan (the  "Class A
     Plan") which,  among other things,  permits it to  pay the Distributor  the
     monthly  distribution  and service  fee out  of its  net assets  to finance
     activity that is intended to result in the sale and retention of A  shares.
     The Class A  Plan was approved by the  Manager, as the sole  shareholder of
     each Fund, and the Board of Trustees, including a majority of the  Trustees
     who are not interested persons of  a Fund (as defined in the  1940 Act) and
     who have no direct or indirect financial  interest in the operation of  the
     Plan  or the  Distribution  Agreement  (the "Independent  Trustees")  after
     determining that there  is a reasonable  likelihood that each Fund  and its
     Class A shareholders will benefit from the Class A Plan.  


                                       -  40  -
<PAGE>






              Each  Fund also  has  adopted  a Class  C Distribution  Plan  (the
     "Class  C  Plan")  which,  among  other  things,  permits  it  to  pay  the
     Distributor the monthly distribution and  service fee out of its net assets
     to finance activity  that is intended to  result in the sale  and retention
     of C shares.   The Distributor, on C shares, may retain the first 12 months
     distribution fee for  reimbursement of amounts paid to the broker-dealer at
     the time  of purchase.   The  Class C  Plan was  approved by  the Board  of
     Trustees,  including   a  majority  of   the  Independent  Trustees   after
     determining that  there is a  reasonable likelihood that  the Fund and  its
     Class C shareholders will benefit from the Class C Plan.

              The Class  A Plan and the  Class C Plan each  may be terminated by
     vote of a majority  of the Independent Trustees,  or by vote of  a majority
     of  the outstanding voting securities  of a class of a  Fund.  The Board of
     Trustees reviews quarterly a written report of  Plan costs and the purposes
     for which such costs have been incurred.  A Plan may  be amended by vote of
     the Board,  including  a majority  of  the  Independent Trustees,  cast  in
     person at a  meeting called for  such purpose.  Any  change in a Plan  that
     would  increase  materially  the  distribution  cost  to  a class  requires
     shareholder approval of that class.

              As compensation for  the services provided  and expenses  borne by
     the Distributor  pursuant to the  Distribution Agreement with  respect to A
     shares, each  Fund pays the  Distributor the  sales load  described in  its
     Prospectus and may pay a 12b-1  fee in an amount up to .35% of  each Fund's
     average daily  net assets  in accordance  with the Class  A Plan  described
     below.    The  distribution fee  is  accrued  daily and  paid  monthly, and
     currently is equal on an annual  basis to .25% of average daily net  assets
     for each  Fund.   The Distributor  may use  this fee  as a  service fee  to
     compensate participating dealers  for services performed incidental  to the
     maintenance  of  shareholder  accounts.     For  the  period  May 7,   1993
     (commencement of operations) to October  31, 1993, and the two years  ended
     October 31, 1994 and 1995, the Distributor received Class A 12b-1  fees for
     Small Cap  in the amount  of $39,249, $100,506  and $115,551, respectively.
     For the  period December 30,  1994 (commencement of  operations) to October
     31, 1995, the Distributor received Class A  12b-1 fees for Value Equity  in
     the amount of $13,040.

              As compensation  for the services  provided and  expenses borne by
     the Distributor  pursuant to the  Distribution Agreement with  respect to C
     shares, each Fund  pays the Distributor  a distribution  fee in  accordance
     with  the Class C  Plan described below.   The distribution  fee is accrued
     daily and paid monthly,  and currently is equal on an annual  basis to .75%
     of average daily  net assets.   The service fee is  accrued daily and  paid
     monthly, and  currently is  equal on  an annual  basis to  .25% of  average
     daily net assets.  For the period April 3, 1995  (commencement of C shares)
     to October 31, 1995, the Distributor received these  fees for Small Cap and
     Value Equity in the amount of $9,098 and $10,848, respectively.

              The  Distribution Agreements may  be terminated at any  time on 60
     days' written notice without  payment of any penalty by either party.  Each
     Fund may effect  such termination by vote of  a majority of the outstanding

                                       -  41  -
<PAGE>






     voting securities of  a Fund or  by vote of  a majority of  the Independent
     Trustees.  For  so long as either the Class  A Plan or the Class C  Plan is
     in effect,  selection and nomination  of the Independent  Trustees shall be
     committed to the discretion of such disinterested persons.

              The  Distribution  Agreements  and each  of  the  above-referenced
     Plans will  continue in  effect for successive  one-year periods,  provided
     that each such  continuance is specifically approved  (1) by the vote  of a
     majority of  the Independent Trustees and (2) by the  vote of a majority of
     the entire  Board of Trustees cast  in person at a  meeting called for that
     purpose.

              For  the period  of May  7, 1993  (commencement of  operations) to
     October  31, 1993,  and  for the  two  years ended  October  31, 1995,  the
     Distributor received  $1,302,004, $474,274  and $259,774, respectively,  as
     compensation  for the sale of A  shares of Small Cap,  of which it retained
     $155,196, $55,451 and $17,176, respectively.   For the period  December 30,
     1994 (commencement  of  operation) to  October  31, 1995,  the  Distributor
     received  $155,444  as compensation  for  the sale  of  A  shares of  Value
     Equity, of which it retained $9,256.

     ADMINISTRATION OF THE FUNDS 
     ---------------------------

              ADMINISTRATIVE, FUND ACCOUNTING AND  TRANSFER AGENT SERVICES.  The
     Manager, subject  to the  control of  the Board of  Trustees, will  manage,
     supervise and  conduct  the administrative  and  business affairs  of  each
     Fund; furnish office  space and equipment;  oversee the  activities of  the
     Subadvisers and the Custodian; and  pay all salaries, fees and  expenses of
     officers and  Trustees of each  Fund who are  affiliated with  the Manager.
     The Manager also will provide certain shareholder  servicing activities for
     customers  of each  Fund.   The Manager  also  is the  fund accountant  and
     transfer and dividend disbursing agent for each  Fund.  Each Fund pays  the
     Manager its cost plus 10% for its services as fund accountant and  transfer
     and  dividend   disbursing  agent.    For   the  period  of   May  7,  1993
     (commencement of  operations) to October 31, 1993, and  the two years ended
     October  31, 1994  and  1995,  the  Manager earned  approximately  $15,763,
     $44,240  and $62,042,  respectively,  from Small  Cap  for its  services as
     transfer agent.   For  the  period of  December 30,  1994 (commencement  of
     operations) to October 31,  1995, the Manager earned approximately  $10,346
     from Value  Equity for  its services  as transfer  agent.   For the  period
     November  1,  1994  (commencement  of  engagement  as  fund  accountant) to
     October 31, 1995, the Manager  earned approximately $29,311 from  Small Cap
     for its  services as  fund accountant.   For the  period December 30,  1994
     (commencement  of  operations)  to  October 31,  1995,  the  Manager earned
     approximately  $20,509  from   Value  Equity  for  its   services  as  fund
     accountant.

              CUSTODIAN.   State Street  Bank and Trust Company,  P.0. Box 1912,
     Boston, Massachusetts 02105,  serves as  custodian of  each Fund's  assets.
     The  Custodian  also  provides  portfolio  accounting   and  certain  other
     services for the Funds.

                                       -  42  -
<PAGE>






              LEGAL  COUNSEL.   Kirkpatrick &  Lockhart LLP,  1800 Massachusetts
     Avenue, N.W., 2nd  Floor, Washington, D.C., 20036, serves as counsel to the
     Funds.   Schifino  &  Fleischer, P.A.,  1  Tampa City  Center,  Suite 2700,
     Tampa,  Florida,  33602, serves  as  counsel  to  the  Distributor and  the
     Manager.

              INDEPENDENT  ACCOUNTANTS.   Coopers  &  Lybrand  L.L.P.,  One Post
     Office   Square,  Boston,   Massachusetts,  02109,   are  the   independent
     accountants  for  the  Funds.    The  Financial  Statements  and  Financial
     Highlights of  the Funds  that  appear in  this SAI  have been  audited  by
     Coopers &  Lybrand L.L.P. and  included herein in reliance  upon the report
     of  said  firm of  accountants,  which  is given  upon  their  authority as
     experts in accounting and auditing.

     POTENTIAL LIABILITY
     -------------------

              Under certain  circumstances, shareholders may be  held personally
     liable as partners  under Massachusetts law for obligations  of a Fund.  To
     protect  its  shareholders,  each  Fund  has  filed  legal  documents  with
     Massachusetts that  expressly disclaim  the liability  of its  shareholders
     for acts or obligations of a Fund.   These documents require notice of this
     disclaimer to be  given in each  agreement, obligation  or instrument  each
     Fund  or its  Trustees  enter  into or  sign.    In  the unlikely  event  a
     shareholder is held personally liable  for a Fund's obligations,  that Fund
     is required to use  its property to protect or compensate  the shareholder.
     On request, a Fund will defend  any claim made and pay any judgment against
     a shareholder for  any act or obligation  of a Fund.   Therefore, financial
     loss resulting from  liability as a shareholder  will occur only if  a Fund
     itself  cannot  meet its  obligations  to  indemnify shareholders  and  pay
     judgments against them.






















                                       -  43  -
<PAGE>






                                       APPENDIX
                                       --------

     COMMERCIAL PAPER RATINGS
     ------------------------

     The rating services'  descriptions of commercial paper ratings in which the
     Fund may invest are:

     DESCRIPTION OF MOODY'S SHORT-TERM DEBT RATINGS

     Prime-1.  Issuers (or supporting  institutions) rated Prime-1 (P-1)  have a
     superior ability for  repayment of senior short-term debt obligations.  P-1
     repayment ability  will  often  be  evidenced  by  many  of  the  following
     characteristics: leading  market positions  in well-established industries;
     high  rates  of  return  on  funds  employed;  conservative  capitalization
     structure with moderate  reliance on debt and ample asset protection; broad
     margins in earnings coverage of  fixed financial charges and  high internal
     cash generation;  well established access  to a range  of financial markets
     and assured sources of alternate liquidity.

     Prime-2.  Issuers (or supporting  institutions) rated Prime-2 (P-2)  have a
     strong ability for repayment of  senior short-term debt obligations.   This
     will normally be  evidenced by many of the characteristics cited above, but
     to a lesser degree.  Earnings trends and coverage ratios, while sound,  may
     be more subject to variation.   Capitalization characteristics, while still
     appropriate, may be  more affected by external conditions.  Ample alternate
     liquidity is maintained.

     DESCRIPTION OF S&P'S COMMERCIAL PAPER RATINGS

     A-1.   This  designation indicates  that  the  degree of  safety  regarding
     timely payment  is  very  strong.    Those  issues  determined  to  possess
     extremely  strong  characteristics  are   denoted  with  a  plus  sign  (+)
     designation.

     A-2.   Capacity  for timely  payment  of issues  with  this designation  is
     satisfactory.  However,  the relative degree of  safety is not as   high as
     for issues designated "A-1".


     CORPORATE DEBT RATINGS
     ----------------------

     The rating  services' descriptions of  corporate debt ratings  in which the
     Fund may invest are:

     DESCRIPTION OF MOODY'S CORPORATE DEBT RATINGS:

     Aaa - Bonds that  are rated Aaa are judged to be  of the best quality. They
     carry the  smallest degree of investment risk and are generally referred to
     as "gilt edged."   Interest  payments are  protected by  a large  or by  an

                                         A-1
<PAGE>






     exceptionally stable margin  and principal is  secure.   While the  various
     protective  elements  are   likely  to  change,  such  changes  as  can  be
     visualized are  most unlikely to  impair the fundamentally strong  position
     of such issues.

     Aa - Bonds that are rated Aa are judged to  be of high quality by all stan-
     dards.  Together with the Aaa group they comprise what are generally  known
     as high grade  bonds.  They  are rated  lower than the  best bonds  because
     margins  of  protection  may  not be  as  large  as  in  Aaa securities  or
     fluctuation of protective  elements may be  of greater  amplitude or  there
     may  be  other  elements  present  that make  the  long  term  risks appear
     somewhat larger than the Aaa securities.

     A - Bonds  that are rated  A possess many  favorable investment  attributes
     and  are to  be considered  as  upper medium  grade  obligations.   Factors
     giving  security to  principal and  interest are  considered  adequate, but
     elements  may  be  present that  suggest  a  susceptibility  to  impairment
     sometime in the future.

     Baa -  Bonds that are  rated Baa are  considered medium grade  obligations,
     i.e.,  they are  neither  highly protected  nor  poorly secured.   Interest
     payments  and  principal  security  appear adequate  for  the  present  but
     certain protective elements  may be  lacking or  may be  characteristically
     unreliable over  any great length  of time.   Such  bonds lack  outstanding
     investment characteristics and in fact have  speculative characteristics as
     well.

     Ba -  Bonds that  are rated  Ba are  judged to  have speculative  elements;
     their future  cannot be considered  as well-assured.   Often the protection
     of  interest and principal payments may be  very ;moderate, and thereby not
     well  safeguarded  during   both  good  and  bad  times  over  the  future.
     Uncertainty of position characterizes bonds in this class.

     B - Bonds that are rated B generally lack characteristics of the  desirable
     investment.     Assurance  of  interest   and  principal  payments  or   of
     maintenance  of other terms  of the contract over  any long  period of time
     may be small.

     Caa - Bonds that are  rated Caa are of poor  standing.  Such issues  may be
     in default  or there  may be  present elements  of danger  with respect  to
     principal or interest.

     Ca - Bonds that are rated Ca represent obligations that are speculative  in
     a high  degree.   Such issues  are often  in default  or have  other marked
     shortcomings.

     C -Bonds that are rated C  are the lowest rated class of  bonds, and issues
     so  rated can  be  regarded  as having  extremely  poor prospects  of  ever
     attaining any real investment standing.




                                         A-2
<PAGE>






     DESCRIPTION OF S&P'S CORPORATE DEBT RATINGS:
     -------------------------------------------

     AAA - Debt rated AAA has the highest rating  assigned by Standard & Poor's.
     Capacity to pay interest and repay principal is extremely strong.

     AA  - Debt rated  AA has a very  strong capacity to pay  interest and repay
     principal and differs from the higher rated issues only in small degree.

     A - Debt rated A has a strong capacity  to pay interest and repay principal
     although it is somewhat more susceptible to the adverse effects  of changes
     in  circumstances  and  economic  conditions  than  debt  in  higher  rated
     categories.

     BBB -  Debt rated  BBB is regarded  as having  an adequate capacity  to pay
     interest and  repay  principal.   Whereas  it  normally  exhibits  adequate
     protection   parameters,   adverse   economic    conditions   or   changing
     circumstances are  more  likely to  lead  to  a weakened  capacity  to  pay
     interest and repay principal  for debt  in this category  than for debt  in
     higher rated categories.

     BB, B,  CCC,  CC, C  -  Debt  rated "BB,"  "B,"  "CCC,"  "CC," and  "C"  is
     regarded,  on  balance,  as  predominantly  speculative   with  respect  to
     capacity to pay interest and repay  principal in accordance with the  terms
     of the obligation.   "BB" indicates  the lowest degree  of speculation  and
     "C" the highest  degree of speculation.   While such debt will  likely have
     some quality and protective characteristics, these are outweighed  by large
     uncertainties or major risk exposures to adverse conditions.

     BB -  Debt rated  "BB" has  less near-term  vulnerability  to default  than
     other  speculative issues.   However, it  faces major ongoing uncertainties
     or exposure to  adverse business,  financial, or  economic conditions  that
     could lead to  inadequate capacity to  meet timely  interest and  principal
     payments.  The  "BB" rating category is also  used for debt subordinated to
     senior debt that is assigned an actual or implied "BBB-" rating.

     B - Debt rated  "B" has  a greater vulnerability  to default but  currently
     has  the  capacity  to meet  interest  payments  and  principal repayments.
     Adverse  business, financial,  or economic  conditions  will likely  impair
     capacity or  willingness to  pay interest  and  repay principal.   The  "B"
     rating category is also  used for debt subordinated to senior debt  that is
     assigned an actual or implied "BB" or "BB-" rating.

     CCC -  Debt  rated "CCC"  has  a  currently identifiable  vulnerability  to
     default, and is dependent upon favorable business, financial,  and economic
     conditions to meet timely payment  of interest and repayment  of principal.
     In the event of adverse  business, financial, or economic conditions, it is
     not likely  to have the capacity to pay interest  and repay principal.  The
     "CCC" rating  category is  also used for  debt subordinated to  senior debt
     that is assigned an actual or implied "B" or "B-" rating.



                                         A-3
<PAGE>






     CC - The  rating "CC" is typically  applied to debt subordinated  to senior
     debt that is assigned an actual or implied "CCC" rating.

     C  - The rating  "C" is  typically applied  to debt subordinated  to senior
     debt that is  assigned an actual  or implied "CCC-" debt  rating.  The  "C"
     rating  may be used  to cover a situation  where a  bankruptcy petition has
     been filed, but debt service payments are continued.

     CI - The rating "CI" is reserved for  income bonds on which no interest  is
     being paid.

     D - Debt rated "D" is  in payment default.  The "D" rating category is used
     when interest payments  or principal payments are not  made on the date due
     even if the applicable  grace period has not  expired, unless S&P  believes
     that such payments will be made  during such grace period.  The "D"  rating
     also will be  used upon the filing of a bankruptcy petition if debt service
     payments are jeopardized.

     Plus (+) or Minus (-) -  The ratings from "AA" to "CCC" may be  modified by
     the addition of a plus  or minus sign to show relative standing  within the
     major categories.

     NR -  indicates that  no public rating  has been  requested, that there  is
     insufficient information on  which to base a  rating, or that S&P  does not
     rate a particular type of obligation as a matter of policy.




























                                         A-4
<PAGE>
     
<PAGE>   1
 
- --------------------------------------------------------------------------------
 
                       REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
 
To the Shareholders and Board of Trustees of
  Heritage Series Trust-Small Cap Stock Fund:
 
     We have audited the accompanying statement of assets and liabilities of
Heritage Series Trust-Small Cap Stock Fund, including the investment portfolio,
as of October 31, 1995, and the related statement of operations for the year
then ended, the statements of changes in net assets for each of the two years in
the period then ended, and the financial highlights for each of the periods
indicated therein. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
 
     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1995 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
 
     In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Heritage Series Trust-Small Cap Stock Fund, as of October 31, 1995, the results
of its operations for the year then ended, the changes in its net assets for
each of the two years in the period then ended, and the financial highlights for
each of the periods indicated therein, in conformity with generally accepted
accounting principles.
 
Boston, Massachusetts                                      Coopers & Lybrand LLP
December 22, 1995
<PAGE>   2
 
- --------------------------------------------------------------------------------
                   HERITAGE SERIES TRUST-SMALL CAP STOCK FUND
                              INVESTMENT PORTFOLIO
                                OCTOBER 31, 1995
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                                          MARKET
                                                                                                           VALUE
                                                                                                        -----------
<S>                                                                                                     <C>
 
REPURCHASE AGREEMENT--8.6%(A)
- ----------------------------
 
    Repurchase Agreement with State Street Bank and Trust Company, dated October 31, 1995 @ 5.82%, to
    be repurchased at $5,310,858 on November 1, 1995, (collateralized by $4,945,000 United States
    Treasury Notes, 7.25%, due August 15, 2004 with a market value $5,449,041, including
    interest)(cost $5,310,000)........................................................................  $ 5,310,000
                                                                                                        -----------
COMMON STOCKS--89.9%(A)
- ---------------------
</TABLE>
 
<TABLE>
<CAPTION>
        SHARES
   ----------------
   <C>                <S>                                                                                 <C>
   AIR TRANSPORT--0.9%
   -------------------
             50,000   Amtran, Inc.*.....................................................................      550,000
                                                                                                          -----------
   BANKING--5.2%
   -------------
              2,500   Commerce Bancorp, Inc.............................................................       57,813
             32,500   First Financial Caribbean Corporation.............................................      578,906
             20,000   FNB Rochester Corporation*........................................................      157,500
             17,000   Home Financial Corporation........................................................      259,250
             25,000   Imperial Thrift & Loan Association*...............................................      287,500
             10,000   ISB Financial Corporation.........................................................      160,000
              5,000   Pennfed Financial Services, Inc.*.................................................       72,500
              2,500   Progressive Bank, Inc.............................................................       68,125
              5,000   Queens County Bancorp, Inc........................................................      200,000
             17,250   RCSB Financial, Inc...............................................................      383,812
             20,298   Summit Bancorporation.............................................................      575,956
             12,500   UJB Financial Corporation.........................................................      398,437
                                                                                                          -----------
                                                                                                            3,199,799
                                                                                                          -----------
   BROADCASTING--0.7%
   ------------------
             32,500   Spelling Entertainment Group, Inc.*...............................................      422,500
                                                                                                          -----------
   BUILDING--0.7%
   --------------
             20,000   Lennar Corporation................................................................      457,500
                                                                                                          -----------
   CHEMICALS--0.1%
   ---------------
             10,000   Planet Polymer Technology, Inc.*..................................................       31,250
                                                                                                          -----------
   CONGLOMERATES/DIVERSIFIED--0.1%
   -------------------------------
              1,754   Belding Heminway Company, Inc.*...................................................        6,577
             10,000   Noel Group, Inc...................................................................       55,000
                                                                                                          -----------
                                                                                                               61,577
                                                                                                          -----------
   DATA PROCESSING--13.2%
   ----------------------
             27,376   BancTec, Inc.*....................................................................      513,300
             15,000   Byron Preiss Multimedia Company, Inc.*............................................      112,500
             45,000   Comdisco, Inc.....................................................................    1,372,500
             10,000   Cornerstone Imaging, Inc.*........................................................      225,000
            141,705   Greentree Software, Inc.*.........................................................      137,284
             52,000   Inter-Tel, Inc.*..................................................................      773,500
             79,500   National Data Corporation.........................................................    2,106,750
             40,000   Norand Corporation*...............................................................      680,000
             35,750   Printronix, Inc.*.................................................................      679,250
             35,000   Shared Medical Systems Corporation................................................    1,351,875
             15,000   Tech Data Corporation*............................................................      181,875
                                                                                                          -----------
                                                                                                            8,133,834
                                                                                                          -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
<PAGE>   3
 
- --------------------------------------------------------------------------------
                   HERITAGE SERIES TRUST-SMALL CAP STOCK FUND
                              INVESTMENT PORTFOLIO
                                OCTOBER 31, 1995
                                  (CONTINUED)
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                                            MARKET
        SHARES                                                                                               VALUE
   ----------------                                                                                       -----------
   <C>                <S>                                                                                 <C>
   ELECTRONICS/ELECTRICAL--1.1%
   ----------------------------
            200,000   Ampex Corporation*................................................................  $   625,000
             10,000   Cincinnati Microwave, Inc.*.......................................................       57,500
                                                                                                          -----------
                                                                                                              682,500
                                                                                                          -----------
   FILMED ENTERTAINMENT--3.2%
   --------------------------
             35,000   Applied Bioscience International Inc.*............................................      223,125
             25,000   IMCO Recycling, Inc...............................................................      537,500
             40,000   Republic Waste Industries*........................................................      860,000
             25,000   TETRA Technologies, Inc.*.........................................................      331,250
                                                                                                          -----------
                                                                                                            1,951,875
                                                                                                          -----------
   FINANCE--1.2%
   -------------
             61,000   AmeriCredit Corporation*..........................................................      747,250
                                                                                                          -----------
   FOOD--2.1%
   ----------
             25,000   D F & R Restaurants, Inc.*........................................................      762,500
             25,000   Morningstar Group, Inc.*..........................................................      193,750
             10,000   Smithfield Foods, Inc.*...........................................................      252,500
              5,694   Sylvan, Inc.*.....................................................................       60,499
                                                                                                          -----------
                                                                                                            1,269,249
                                                                                                          -----------
   HEALTH CARE CENTERS--6.1%
   -------------------------
             66,000   Advocat, Inc.*....................................................................      709,500
             27,500   Assisted Living Concepts, Inc.*...................................................      395,312
             44,300   Bergen Brunswig Corporation, Class "A"............................................      919,225
             30,000   Community Psychiatric Centers.....................................................      326,250
             45,000   Horizon Mental Health Management, Inc.*...........................................      697,500
              7,500   Multicare Companies, Inc.*........................................................      140,625
             35,000   Sterling Healthcare Group.........................................................      481,250
             10,000   Sterling House Corporation*.......................................................      123,750
                                                                                                          -----------
                                                                                                            3,793,412
                                                                                                          -----------
   HOME FURNISHINGS--0.5%
   ----------------------
             20,000   Falcon Products, Inc..............................................................      280,000
                                                                                                          -----------
   INSURANCE--0.7%
   ---------------
             10,000   Delphi Financial Group, Inc.*.....................................................      201,250
             11,000   John Alden Financial Corporation..................................................      228,250
                                                                                                          -----------
                                                                                                              429,500
                                                                                                          -----------
   INVESTMENT--0.5%
   ----------------
             30,000   Southwest Securities Group, Inc...................................................      292,500
                                                                                                          -----------
   LEATHER/SHOES--1.1%
   -------------------
            170,000   Genesco, Inc.*....................................................................      680,000
                                                                                                          -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
<PAGE>   4
 
- --------------------------------------------------------------------------------
                   HERITAGE SERIES TRUST-SMALL CAP STOCK FUND
                              INVESTMENT PORTFOLIO
                                OCTOBER 31, 1995
                                  (CONTINUED)
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                                            MARKET
        SHARES                                                                                               VALUE
   ----------------                                                                                       -----------
   <C>                <S>                                                                                 <C>
   LEISURE/AMUSEMENT--4.8%
   -----------------------
             43,000   Anthony Industries, Inc...........................................................  $   800,875
             27,000   Bally Gaming International, Inc.*.................................................      283,500
             40,000   Callaway Golf Company.............................................................      655,000
             25,000   Matthews Studio Equipment Group*..................................................       43,750
             30,000   Scientific Games Holdings Corporation*............................................      982,500
             52,500   Sports Club Company, Inc.*........................................................      223,125
                                                                                                          -----------
                                                                                                            2,988,750
                                                                                                          -----------
   MACHINERY--0.7%
   ---------------
             30,000   Computational Systems, Inc.*......................................................      446,250
                                                                                                          -----------
   MANUFACTURING/DISTRIBUTIONS--7.5%
   ---------------------------------
             25,000   Harsco Corporation................................................................    1,318,750
             22,000   Luxottica Group S.P.A., ADR.......................................................    1,072,500
             34,800   Peak Technologies Group, Inc.*....................................................      878,700
             10,000   Sweetwater, Inc.*.................................................................       37,500
             25,000   Thermo Instrument Systems, Inc.*..................................................      759,375
             16,800   Thermo Process Systems, Inc.*.....................................................      182,700
             25,000   ThermoSpectra Corporation(c)*.....................................................      406,250
                                                                                                          -----------
                                                                                                            4,655,775
                                                                                                          -----------
   MEDICAL EQUIPMENT/SUPPLY--9.6%
   ------------------------------
            125,000   Angeion Corporation*..............................................................      953,125
             37,742   Circon Corporated*................................................................      858,631
             63,333   Cooper Companies, Inc.*...........................................................      372,083
             10,000   Cordis Corporation*...............................................................    1,105,000
             15,000   Empi, Inc.*.......................................................................      333,750
             20,000   Jones Medical, Inc................................................................      390,000
             40,000   Thermedics, Inc.*.................................................................      735,000
             20,000   Thermo Cardiosystems, Inc.*.......................................................      970,000
             68,000   Unilab Corporation*...............................................................      212,500
                                                                                                          -----------
                                                                                                            5,930,089
                                                                                                          -----------
   METAL--0.9%
   -----------
             32,500   Material Sciences Corporation*....................................................      540,313
                                                                                                          -----------
   MINING/DIVERSIFIED--1.0%
   ------------------------
             15,000   Minerals Technologies, Inc........................................................      598,125
                                                                                                          -----------
   OFFICE EQUIPMENT--0.4%
   ----------------------
             12,000   American Business Products, Inc...................................................      262,500
                                                                                                          -----------
   OIL & GAS--2.1%
   ---------------
             45,000   Camco International, Inc..........................................................    1,029,375
             10,000   Global Industries Ltd.*...........................................................      262,500
                                                                                                          -----------
                                                                                                            1,291,875
                                                                                                          -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
<PAGE>   5
 
- --------------------------------------------------------------------------------
                   HERITAGE SERIES TRUST-SMALL CAP STOCK FUND
                              INVESTMENT PORTFOLIO
                                OCTOBER 31, 1995
                                  (CONTINUED)
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                                            MARKET
        SHARES                                                                                               VALUE
   ----------------                                                                                       -----------
   <C>                <S>                                                                                 <C>
   POLLUTION CONTROL--3.7%
   -----------------------
             38,475   Handex Corporation*...............................................................      240,469
             63,000   Insituform Technologies, Class "A"................................................      787,500
             22,500   Thermo Remediation, Inc...........................................................      320,625
             40,000   U.S. Filter Corporation*..........................................................      930,000
                                                                                                          -----------
                                                                                                            2,278,594
                                                                                                          -----------
   PUBLISHING--3.9%
   ----------------
             40,000   CCH Inc., Class "A"...............................................................  $   930,000
             10,000   CCH Inc., Class "B"...............................................................      230,000
             20,000   Claire's Stores, Inc..............................................................      392,500
             12,000   International Imaging Materials, Inc.*............................................      303,000
              6,000   John Wiley & Sons, Inc. Class "A".................................................      178,500
              9,000   Waverly, Inc......................................................................      357,750
                                                                                                          -----------
                                                                                                            2,391,750
                                                                                                          -----------
   REAL ESTATE INVESTMENT TRUSTS (REIT)--5.4%
   ------------------------------------------
             19,000   Alexander Haagen Properties, Inc..................................................      209,000
             25,000   Apartment Investors & Management Company..........................................      503,125
             77,000   LTC Properties, Inc...............................................................    1,116,500
             22,000   Malan Realty Investors, Inc.......................................................      308,000
             10,000   Mid-America Apartment Communities, Inc............................................      230,000
              6,000   Mid-America Realty Investments....................................................       47,250
             13,000   Mid-Atlantic Realty Trust.........................................................      107,250
             25,000   Storage Equities, Inc.............................................................      459,375
             20,000   Walden Residential Properties, Inc................................................      367,500
                                                                                                          -----------
                                                                                                            3,348,000
                                                                                                          -----------
   RETAIL--4.9%
   ------------
             40,000   Cole National Corporation, Class "A"*.............................................      490,000
             15,000   Damark International, Inc.*.......................................................       90,000
             40,000   Eckerd Corporation*...............................................................    1,585,000
             13,000   Fingerhut Companies, Inc..........................................................      177,125
             42,500   Forschner Group, Inc.*............................................................      494,063
             25,000   The Sirena Apparel Group, Inc.*...................................................      181,250
                                                                                                          -----------
                                                                                                            3,017,438
                                                                                                          -----------
   SERVICES--5.4%
   --------------
             40,000   Interim Services, Inc.*...........................................................    1,190,000
            200,000   National Education Corporation*...................................................    1,625,000
             19,000   Protection One, Inc.*.............................................................      149,625
             11,500   Stewart Enterprises, Inc..........................................................      388,125
                                                                                                          -----------
                                                                                                            3,352,750
                                                                                                          -----------
   TELECOMMUNICATIONS--2.4%
   ------------------------
             60,000   A+ Network, Inc.*.................................................................      840,000
             25,000   Metrocall, Inc.*..................................................................      625,000
                                                                                                          -----------
                                                                                                            1,465,000
                                                                                                          -----------
   Total common stocks (cost $46,649,408)...............................................................   55,549,955
                                                                                                          -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
<PAGE>   6
 
- --------------------------------------------------------------------------------
                   HERITAGE SERIES TRUST-SMALL CAP STOCK FUND
                              INVESTMENT PORTFOLIO
                                OCTOBER 31, 1995
                                  (CONTINUED)
- --------------------------------------------------------------------------------
 
CONVERTIBLE BONDS--2.4%(A)
- ---------------------
 
<TABLE>
<CAPTION>
   PRINCIPAL                                                                                    MATURITY      MARKET
     AMOUNT                                                                                       DATE         VALUE
- ----------------                                                                               ----------   -----------
<C>                <S>                                                                         <C>          <C>
HEALTH CARE CENTERS--1.3%
- -------------------------
        $750,000   Assisted Living Concepts, Inc., 7.00%.....................................    08/15/05   $   822,503
                                                                                                            -----------
LEISURE/AMUSEMENT--0.3%
- -----------------------
         200,000   All American Communications Inc., 6.50%...................................    10/01/03       193,182
                                                                                                            -----------
MEDICAL EQUIPMENT/SUPPLY--0.8%
- ------------------------------
         500,000   Cabot Medical Corporation, 7.50%..........................................    03/01/99       490,000
                                                                                                            -----------
Total convertible bonds (cost $1,415,000)................................................................     1,505,685
                                                                                                            -----------
TOTAL INVESTMENT PORTFOLIO (cost $53,374,408)(b), 100.9%(a)..............................................    62,365,639
OTHER ASSETS AND LIABILITIES, (0.9%)(a)..................................................................      (539,586)
                                                                                                            -----------
NET ASSETS, 100.0%.......................................................................................   $61,826,053
                                                                                                             ==========
</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
    $53,447,719. Market value includes net unrealized appreciation of
    $8,917,920, which consists of aggregate gross unrealized appreciation for
    all securities in which there is an excess of market value over tax cost of
    $10,845,037 and aggregate gross unrealized depreciation for all securities
    in which there is an excess of tax cost over market value of $1,927,117.
(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 0.7% of the net assets of the Fund.
 
ADR--American Depository Receipt
 
    The accompanying notes are an integral part of the financial statements.
<PAGE>   7
 
- --------------------------------------------------------------------------------
                   HERITAGE SERIES TRUST-SMALL CAP STOCK FUND
                      STATEMENT OF ASSETS AND LIABILITIES
                                OCTOBER 31, 1995
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                                        <C>            <C>
Assets
Investments, at market value (identified cost $48,064,408) (Note 1)......................                 $57,055,639
Repurchase agreement (identified cost $5,310,000) (Note 1)...............................                   5,310,000
Cash.....................................................................................                         170
Receivables:
  Investments sold.......................................................................                   1,699,527
  Fund shares sold.......................................................................                     376,339
  Dividends and interest.................................................................                      44,790
Deferred organization expenses (Note 1)..................................................                      25,000
Deferred state registration expenses (Note 1)............................................                      13,281
Prepaid insurance........................................................................                       1,866
                                                                                                          -----------
        Total assets.....................................................................                  64,526,612
Liabilities
Payables (Note 4):
  Investments purchased..................................................................  $2,506,063
  Fund shares redeemed...................................................................      41,541
  Accrued management fee.................................................................      48,899
  Accrued distribution fee...............................................................      15,835
  Other accrued expenses.................................................................      88,221
                                                                                           ----------
        Total liabilities................................................................                   2,700,559
                                                                                                          -----------
Net assets, at market value..............................................................                 $61,826,053
                                                                                                           ==========
Net Assets
Net assets consist of:
  Undistributed net investment income....................................................                 $    30,996
  Net unrealized appreciation on investments.............................................                   8,991,231
  Accumulated net realized gain..........................................................                   2,768,507
  Paid-in capital........................................................................                  50,035,319
                                                                                                          -----------
Net assets, at market value..............................................................                 $61,826,053
                                                                                                           ==========
Class A Shares
Net asset value and redemption price per share ($57,430,000 divided by 3,044,503 shares
  of beneficial interest outstanding, no par value) (Notes 1 and 2)......................                      $18.86
                                                                                                           ==========
Maximum offering price per share (100/95.25 of $18.86)...................................                      $19.80
                                                                                                           ==========
Class C Shares
Net asset value and offering price per share ($4,396,053 divided by 233,921 shares of
  beneficial interest outstanding, no par value) (Notes 1 and 2).........................                      $18.79
                                                                                                           ==========
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
<PAGE>   8
 
- --------------------------------------------------------------------------------
                   HERITAGE SERIES TRUST-SMALL CAP STOCK FUND
                            STATEMENT OF OPERATIONS
                      FOR THE YEAR ENDED OCTOBER 31, 1995
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                                       <C>            <C>
Investment Income
Income:
  Dividends.............................................................................                 $    547,047
  Interest..............................................................................                      406,626
                                                                                                         ------------
        Total income....................................................................                      953,673
Expenses (Notes 1 and 4):
  Management fee........................................................................  $  465,132
  Distribution fee......................................................................     124,649
  Shareholder servicing fees............................................................      62,042
  Professional fees.....................................................................      60,346
  Custodian/Fund accounting fees........................................................      53,835
  Amortization of state registration expenses...........................................      50,309
  Reports to shareholders...............................................................      39,799
  Trustees' fees and expenses...........................................................      12,405
  Amortization of organization expenses.................................................      10,000
  Insurance.............................................................................       4,720
  Federal registration fees.............................................................       4,488
  Other.................................................................................       1,334
                                                                                          ----------
        Total expenses..................................................................                      889,059
                                                                                                         ------------
Net investment income...................................................................                       64,614
                                                                                                         ------------
Realized and Unrealized Gain on Investments
Net realized gain from investment transactions..........................................                    2,899,946
Net increase in unrealized appreciation of investments during the year..................                    6,857,583
                                                                                                         ------------
        Net gain on investments.........................................................                    9,757,529
                                                                                                         ------------
Net increase in net assets resulting from operations....................................                 $  9,822,143
                                                                                                          ===========
</TABLE>
 
- --------------------------------------------------------------------------------
                      STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                          FOR THE YEARS ENDED
                                                                                 -------------------------------------
                                                                                 OCTOBER 31, 1995     OCTOBER 31, 1994
                                                                                 ----------------     ----------------
<S>                                                                              <C>                  <C>
Increase in net assets:
Operations:
  Net investment income (loss)...............................................      $     64,614         $    (27,981)
  Net realized gain from investment transactions.............................         2,899,946            2,526,517
  Net increase (decrease) in unrealized appreciation of investments during
    the year.................................................................         6,857,583           (1,054,728)
                                                                                 ----------------     ----------------
  Net increase in net assets resulting from operations.......................         9,822,143            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)......        13,014,458             (307,114)
                                                                                 ----------------     ----------------
Increase in net assets.......................................................        20,301,699            1,136,694
Net assets, beginning of year................................................        41,524,354           40,387,660
                                                                                 ----------------     ----------------
Net assets, end of year (including undistributed net investment income of
  $30,996 as of October 31, 1995)............................................      $ 61,826,053         $ 41,524,354
                                                                                 ===============      ===============
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
<PAGE>   9
 
- --------------------------------------------------------------------------------
                   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 A SHARES
                                                                                FOR THE YEARS ENDED          CLASS C
                                                                                     OCTOBER 31              SHARES
                                                                            ----------------------------     -------
                                                                             1995       1994      1993+      1995++
                                                                            ------     ------     ------     -------
<S>                                                                         <C>        <C>        <C>        <C>
NET ASSET VALUE, BEGINNING OF THE PERIOD..................................  $16.20     $15.57     $14.29     $15.67
                                                                            ------     ------     ------     -------
INCOME FROM INVESTMENT OPERATIONS:
  Net investment income (loss)(a).........................................     .02       (.01)      (.01)      (.02 )
  Net realized and unrealized gain on investments.........................    3.62        .64       1.29       3.14
                                                                            ------     ------     ------     -------
Total from investment operations..........................................    3.64        .63       1.28       3.12
                                                                            ------     ------     ------     -------
LESS DISTRIBUTIONS:
  Dividends from net investment income....................................    (.01)        --         --         --
  Distributions from net realized gains...................................    (.97)        --         --         --
                                                                            ------     ------     ------     -------
  Total Distributions.....................................................    (.98)        --         --         --
                                                                            ------     ------     ------     -------
NET ASSET VALUE, END OF THE PERIOD........................................  $18.86     $16.20     $15.57     $18.79
                                                                            ======     ======     ======     =======
TOTAL RETURN (%)(C).......................................................   23.97       4.05       8.96      19.91
RATIOS (%)/SUPPLEMENTAL DATA:
  Ratio of operating expenses, net, to average daily net assets(a)........    1.88       1.91       2.00(b)    2.36 (b)
  Ratio of net investment income (loss) to average daily net assets.......     .15      (0.07)     (0.15)(b)   (.46 )(b)
  Portfolio turnover rate.................................................      89         95         97(b)      89
  Net assets, end of period ($ millions)..................................      57         42         40          4
</TABLE>
 
- ---------------
 
 +  For the period May 7, 1993 (commencement of operations) to October 31, 1993.
 ++ For the period April 3, 1995 (commencement of Class C Shares) to October 31,
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 for Class A
Shares and fiscal 1995 for Class C Shares.
<PAGE>   10
 
- --------------------------------------------------------------------------------
                   HERITAGE SERIES TRUST-SMALL CAP STOCK FUND
                         NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
 
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 four
        series, the Small Cap Stock Fund (the "Fund"), the Value Equity Fund,
        the Growth Equity Fund and the Eagle International Equity Portfolio. 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
        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 Value Equity Fund and Eagle International
        Equity Portfolio are presented separately. The policies described below
        are followed consistently by the Fund in the preparation of its
        financial statements in conformity with generally accepted accounting
        principles.
 
        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. Of the $2,526,517 net realized gains for the year
        ended October 31, 1994, the Fund has designated $403,325 as net
        long-term capital gains on a tax basis paid in 1995.
 
        Expenses: The Fund is charged for those expenses which are directly
        attributable to it, such as management fee, custodian/fund accounting
        fees, distribution fee, etc., while other expenses such as professional
        fees, insurance expense, etc., are allocated proportionately among the
        Portfolios. Expenses of the Fund are allocated to each class of shares
        based upon their relative percentage of current net assets. All expenses
        that are directly attributable to a specific class of shares, such as
        distribution fees, are allocated to that class.
 
        State Registration Expenses: State registration fees are amortized based
        either on the time period covered by the registration or as related
        shares are sold, whichever is appropriate for each state.
 
        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 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.
 
        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.
<PAGE>   11
 
- --------------------------------------------------------------------------------
                   HERITAGE SERIES TRUST-SMALL CAP STOCK FUND
                         NOTES TO FINANCIAL STATEMENTS
                                  (CONTINUED)
- --------------------------------------------------------------------------------
 
Note 2: FUND SHARES. At October 31, 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 years ended
        October 31, 1995 and 1994, were as follows:
 
<TABLE>
<CAPTION>
                                                                                  FOR THE YEARS ENDED
                                                              ------------------------------------------------------------
                                                                   OCTOBER 31, 1995                 OCTOBER 31, 1994
                                                              --------------------------       ---------------------------
                           CLASS A SHARES                      SHARES          AMOUNT            SHARES          AMOUNT
        ----------------------------------------------------  ---------     ------------       ----------     ------------
        <S>                                                   <C>           <C>                <C>            <C>
        Shares sold.........................................    984,286     $ 17,529,467        2,257,306     $ 36,019,552
        Shares issued on reinvestment of distributions......    160,682        2,431,113               --               --
        Shares redeemed.....................................   (664,339)     (11,260,584)      (2,287,410)     (36,326,666)
                                                              ---------     ------------       ----------     ------------
        Net increase (decrease).............................    480,629     $  8,699,996          (30,104)    $   (307,114)
                                                                             ===========                       ===========
        Shares outstanding:
          Beginning of year.................................  2,563,874                         2,593,978
                                                              ---------                        ----------
          End of year.......................................  3,044,503                         2,563,874
                                                               ========                         =========
</TABLE>
 
       Transactions in Class C Shares of the Fund from April 3, 1995
       (commencement of Class C Shares) to October 31, 1995 were as follows:
 
<TABLE>
<CAPTION>
                           CLASS C SHARES                      SHARES          AMOUNT
        ----------------------------------------------------  ---------     ------------
        <S>                                                   <C>           <C>                <C>            <C>
        Shares sold.........................................    234,197     $  4,319,728
        Shares redeemed.....................................       (276)          (5,266)
                                                              ---------     ------------
        Net increase........................................    233,921     $  4,314,462
                                                                             ===========
        Shares outstanding:
          Beginning of period...............................         --
                                                              ---------
          End of period.....................................    233,921
                                                               ========
</TABLE>
 
Note 3: PURCHASES AND SALES OF SECURITIES. For year ended October 31, 1995,
        purchases and sales of investment securities (excluding repurchase
        agreements and short term obligations) aggregated $49,450,409 and
        $38,183,445, respectively.
 
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% 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 2.00%
        for Class A Shares (2.75% for Class C Shares effective April 3, 1995) on
        an annual basis 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 attributable to each class of Shares. Fees
        voluntarily waived are recoverable by the Manager for a period of up to
        two years. In the prior year, the Fund's operating expenses fell below
        2% of average daily net assets. Accordingly, during fiscal 1994 the Fund
        paid the Manager all of the fees waived in 1993 amounting to $14,764
        ($.01 per share).
 
        The Manager has entered into agreements with Awad & Associates, Inc., a
        division of Raymond James & Associates, Inc., and Eagle Asset
        Management, 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.
 
        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
        October 31, 1995 was $19,600. In addition, the Manager performs Fund
        Accounting services and charged $29,311 during the current year of which
        $10,400 was payable as of October 31, 1995.
<PAGE>   12
 
- --------------------------------------------------------------------------------
                   HERITAGE SERIES TRUST-SMALL CAP STOCK FUND
                         NOTES TO FINANCIAL STATEMENTS
                                  (CONTINUED)
- --------------------------------------------------------------------------------
 
        Pursuant to the Class A Distribution plan adopted in accordance with
        Rule 12b-1 of the Investment Company Act of 1940, as amended, the Fund
        is authorized to pay Raymond James & Associates, Inc. (the
        "Distributor") a fee of up to 0.35% of average daily net assets for
        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 for Class A
        Shares. Such fee is accrued daily and payable monthly. Under the Class C
        Distribution Plan the Fund paid the Distributer a fee equal to 1.00% of
        the average daily net assets. The Distributor, on Class C Shares, may
        retain the first 12 months distribution fee for reimbursement of amounts
        paid to the broker/dealer at the time of purchase. Such fees are accrued
        daily and payable monthly. During the period $115,551 and $9,098 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 that are also advised by the Manager (collectively
        referred to as the Heritage mutual funds). Each Trustee of the Heritage
        mutual 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 mutual funds attended. Trustees' fees
        and expenses are paid equally by each of the Heritage mutual funds.
<PAGE>
     
<PAGE>   1
 
- --------------------------------------------------------------------------------
 
                       REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
 
To the Shareholders and Board of Trustees of
  Heritage Series Trust-Value Equity Fund:
 
     We have audited the accompanying statement of assets and liabilities of
Heritage Series Trust-Value Equity Fund, including the investment portfolio, as
of October 31, 1995, and the related statements of operations and changes in net
assets for the period December 30, 1994 (commencement of operations) to October
31, 1995, and the financial highlights for the periods indicated therein. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit.
 
     We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1995 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
 
     In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Heritage Series Trust-Value Equity Fund as of October 31, 1995, the results of
its operations, and the changes in its net assets for the period December 30,
1994 (commencement of operations) to October 31, 1995, and the financial
highlights for the periods indicated therein, in conformity with generally
accepted accounting principles.
 
Boston, Massachusetts
December 22, 1995
                                                              COOPERS & LYBRAND
<PAGE>   2
 
- --------------------------------------------------------------------------------
                    HERITAGE SERIES TRUST-VALUE EQUITY FUND
                              INVESTMENT PORTFOLIO
                                OCTOBER 31, 1995
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                                                MARKET
                                                                                                                 VALUE
                                                                                                              -----------
<S>                                                                                                            <C>
REPURCHASE AGREEMENT--13.8%(A)
Repurchase Agreement with State Street Bank and Trust Company, dated October 31, 1995 @ 5.82%, to be
repurchased at $2,225,364 on November 1, 1995, (collateralized by $2,075,000 United States Treasury Notes,
7.25% due August 15, 2004 with a market value of $2,286,503, including interest) (cost $2,225,000)..........   $ 2,225,000
                                                                                                               -----------
COMMON STOCKS--93.2%(A)
</TABLE>
 
<TABLE>
<CAPTION>
      SHARES
- ------------------
<C>                 <S>                                                                                        <C>
AEROSPACE--1.6%
- ---------------
             3,000  Boeing Company...........................................................................      196,875
             1,500  General Motors Corporation, Class "H"....................................................       63,000
                                                                                                               -----------
                                                                                                                   259,875
                                                                                                               -----------
AUTO PARTS/EQUIPMENT--2.6%
- --------------------------
            12,000  Breed Technologies, Inc. ................................................................      223,500
             1,000  Dana Corporation.........................................................................       25,625
             2,300  Eaton Corporation........................................................................      117,875
             3,000  Federal-Mogul Corporation................................................................       53,625
                                                                                                               -----------
                                                                                                                   420,625
                                                                                                               -----------
AUTO/TRUCK MANUFACTURERS--2.5%
- ------------------------------
             2,800  Chrysler Corporation.....................................................................      144,550
             7,000  Ford Motor Company.......................................................................      201,250
             1,400  General Motors Corporation...............................................................       61,250
                                                                                                               -----------
                                                                                                                   407,050
                                                                                                               -----------
BANKING--7.9%
- -------------
             1,500  Banc One Corporation.....................................................................       50,625
             3,200  Bank Of New York Company, Inc. ..........................................................      134,400
             3,000  BankAmerica Corporation..................................................................      172,500
             3,000  Bankers Trust New York Corporation.......................................................      191,250
             4,500  Dime Bancorp, Inc.*......................................................................       47,813
               400  First Interstate Bancorp.................................................................       51,600
             2,800  Fleet Financial Group, Inc. .............................................................      108,500
             2,800  Great Western Financial Corporation......................................................       63,350
             1,000  Home Financial Corporation...............................................................       15,250
             2,500  Klamath First Bancorp, Inc.*.............................................................       31,875
             3,300  Mellon Bank Corporation..................................................................      165,412
             1,000  J.P. Morgan & Company, Inc. .............................................................       77,125
             2,700  PNC Bank Corporation.....................................................................       70,875
             2,300  Wachovia Corporation.....................................................................      101,488
                                                                                                               -----------
                                                                                                                 1,282,063
                                                                                                               -----------
BEVERAGES--0.6%
- ---------------
             1,900  PepsiCo, Inc. ...........................................................................      100,225
                                                                                                               -----------
BUILDING--1.0%
- --------------
             2,000  Black & Decker Corporation...............................................................       67,750
             2,400  Foster Wheeler Corporation...............................................................       90,000
                                                                                                               -----------
                                                                                                                   157,750
                                                                                                               -----------
CHEMICALS--0.6%
- ---------------
             1,000  ARCO Chemical Company....................................................................       49,000
             1,500  Lubrizol Corporation.....................................................................       43,125
                                                                                                               -----------
                                                                                                                    92,125
                                                                                                               -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
<PAGE>   3
 
- --------------------------------------------------------------------------------
                    HERITAGE SERIES TRUST-VALUE EQUITY FUND
                              INVESTMENT PORTFOLIO
                                OCTOBER 31, 1995
                                  (CONTINUED)
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                                                 MARKET
      SHARES                                                                                                      VALUE
- ------------------                                                                                             -----------
<C>                 <S>                                                                                        <C>
CONGLOMERATE/DIVERSIFIED--0.3%
- ------------------------------
             2,400  Hanson PLC, ADR..........................................................................  $    37,200
               800  U.S. Industries, Inc.*...................................................................       12,000
                                                                                                               -----------
                                                                                                                    49,200
                                                                                                               -----------
COSMETICS/TOILETRIES--1.0%
- --------------------------
             1,000  Jean Philippe Fragrances, Inc.*..........................................................        9,250
             3,500  Tambrands, Inc. .........................................................................      156,625
                                                                                                               -----------
                                                                                                                   165,875
                                                                                                               -----------
DATA PROCESSING--2.9%
- ---------------------
             2,500  Apple Computer, Inc. ....................................................................       90,781
             2,000  Autodesk, Inc. ..........................................................................       68,000
             2,000  Automatic Data Processing, Inc. .........................................................      143,000
             1,200  Diamond Multimedia Systems, Inc.*........................................................       35,400
             2,500  MacNeal-Schwendler Corporation...........................................................       38,125
             2,000  Seagate Technology, Inc.*................................................................       89,250
                                                                                                               -----------
                                                                                                                   464,556
                                                                                                               -----------
ELECTRONICS/ELECTRICAL--2.4%
- ----------------------------
             1,000  First Alert, Inc.*.......................................................................       15,500
               700  General Electric Company.................................................................       44,275
             1,700  Honeywell, Inc. .........................................................................       71,400
               600  Intel Corporation........................................................................       41,925
               300  Sony Corporation, ADR....................................................................       13,725
             1,100  Tech-Sym Corporation*....................................................................       32,588
            11,500  Westinghouse Electric Corporation........................................................      162,438
               300  Philips Electronics N.V., NY Shares, ADR.................................................       11,587
                                                                                                               -----------
                                                                                                                   393,438
                                                                                                               -----------
FINANCE--4.1%
- -------------
             6,300  American Express Company.................................................................      255,937
             1,300  Federal National Mortgage Association....................................................      136,337
             4,500  Student Loan Marketing Association.......................................................      264,937
                                                                                                               -----------
                                                                                                                   657,211
                                                                                                               -----------
FOOD--2.7%
- ----------
             2,000  Campbell Soup Company....................................................................      104,750
             7,100  Chiquita Brands International............................................................      115,375
             1,600  Dole Food Company........................................................................       60,200
             1,500  Grand Metropolitan, PLC, ADR.............................................................       41,250
             1,900  Heinz (H.J.) Company.....................................................................       88,350
               950  Quaker Oats Company......................................................................       32,419
                                                                                                               -----------
                                                                                                                   442,344
                                                                                                               -----------
FOOD SERVING--1.1%
- ------------------
             2,200  McDonald's Corporation...................................................................       90,200
             4,500  Wendy's International, Inc. .............................................................       89,437
                                                                                                               -----------
                                                                                                                   179,637
                                                                                                               -----------
GRAPHIC ARTS--0.5%
- ------------------
             2,800  Deluxe Corporation.......................................................................       75,250
                                                                                                               -----------
HEALTH CARE CENTERS--7.2%
- -------------------------
             3,300  Columbia Healthcare Corporation..........................................................      162,112
             4,500  Foundation Health Corporation*...........................................................      190,688
             1,000  Healthsource, Inc.*......................................................................       53,000
             2,000  Horizon/CMS Healthcare Corporation*......................................................       40,500
               300  Physician Corporation Of America*........................................................        4,612
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
<PAGE>   4
 
- --------------------------------------------------------------------------------
                    HERITAGE SERIES TRUST-VALUE EQUITY FUND
                              INVESTMENT PORTFOLIO
                                OCTOBER 31, 1995
                                  (CONTINUED)
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                                                 MARKET
      SHARES                                                                                                      VALUE
- ------------------                                                                                             -----------
<C>                 <S>                                                                                        <C>
             9,500  Tenet Healthcare Corporation*............................................................  $   169,812
             7,500  U.S. Healthcare, Inc. ...................................................................      288,750
             4,700  United Healthcare Corporation............................................................      249,688
                                                                                                               -----------
                                                                                                                 1,159,162
                                                                                                               -----------
HOTELS/MOTELS/INNS--0.5%
- ------------------------
             1,000  HFS, Inc.*...............................................................................       61,250
             2,500  Prime Hospitality Corporation*...........................................................       24,687
                                                                                                               -----------
                                                                                                                    85,937
                                                                                                               -----------
HOUSEWARES--0.2%
- ----------------
             1,000  Rubbermaid, Inc. ........................................................................       26,125
                                                                                                               -----------
INSURANCE--3.2%
- ---------------
             3,022  Allstate Corporation.....................................................................      111,059
             1,600  Hartford Steam Boiler Inspection & Insurance Company.....................................       74,600
             7,000  Humana, Inc.*............................................................................      147,875
             1,200  Jefferson-Pilot Corporation..............................................................       79,200
             2,700  Torchmark Corporation....................................................................      112,050
                                                                                                               -----------
                                                                                                                   524,784
                                                                                                               -----------
LEISURE/AMUSEMENT--1.4%
- -----------------------
             1,600  Polaroid Corporation.....................................................................       68,400
             4,000  Royal Caribbean Cruises, Ltd. ...........................................................       92,000
             1,100  The Walt Disney Company..................................................................       63,387
                                                                                                               -----------
                                                                                                                   223,787
                                                                                                               -----------
MACHINERY--1.4%
- ---------------
             2,000  Caterpillar, Inc. .......................................................................      112,250
             1,000  Harnischfeger Industries, Inc. ..........................................................       31,500
             1,200  Johnson Controls, Inc. ..................................................................       69,900
             2,000  Western Power & Equipment Corporation*...................................................        8,000
                                                                                                               -----------
                                                                                                                   221,650
                                                                                                               -----------
MANUFACTURING/DISTRIBUTIONS--0.4%
- ---------------------------------
             1,100  Minnesota Mining & Manufacturing Company.................................................       62,563
                                                                                                               -----------
MEDICAL EQUIPMENT/SUPPLY--2.6%
- ------------------------------
             1,700  Bausch & Lomb, Inc. .....................................................................       58,863
             3,000  Baxter International, Inc. ..............................................................      115,875
               700  C.R. Bard, Inc. .........................................................................       19,775
             2,300  Johnson & Johnson........................................................................      187,450
             2,200  Sterile Concepts Holdings, Inc. .........................................................       31,075
                                                                                                               -----------
                                                                                                                   413,038
                                                                                                               -----------
OFFICE EQUIPMENT--1.4%
- ----------------------
             1,800  Danka Business Systems, Sponsored ADR....................................................       60,300
             4,000  Pitney-Bowes, Inc. ......................................................................      174,500
                                                                                                               -----------
                                                                                                                   234,800
                                                                                                               -----------
OIL & GAS--9.6%
- ---------------
             1,900  Amoco Corporation........................................................................      121,363
             1,200  Anadarko Petroleum Corporation...........................................................       52,050
             6,000  Apache Corporation.......................................................................      153,000
             1,500  Atlantic Richfield Company...............................................................      160,125
             1,100  Burlington Resources, Inc. ..............................................................       39,600
             1,400  Chevron Corporation......................................................................       65,450
               800  Dresser Industries, Inc. ................................................................       16,600
             1,800  Exxon Corporation........................................................................      137,475
             1,000  Halliburton Company......................................................................       41,500
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
<PAGE>   5
 
- --------------------------------------------------------------------------------
                    HERITAGE SERIES TRUST-VALUE EQUITY FUND
                              INVESTMENT PORTFOLIO
                                OCTOBER 31, 1995
                                  (CONTINUED)
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                                                 MARKET
      SHARES                                                                                                      VALUE
- ------------------                                                                                             -----------
<C>                 <S>                                                                                        <C>
             1,500  Mobil Corporation........................................................................  $   151,125
             5,500  Occidental Petroleum Corporation.........................................................      118,250
             1,700  Pennzoil Company.........................................................................       64,175
               900  Phillips Petroleum Company...............................................................       29,025
             1,000  Royal Dutch Petroleum, NY Shares, ADR....................................................      122,875
             1,300  Schlumberger, Ltd. ......................................................................       80,925
             1,500  Texaco, Inc. ............................................................................      102,187
             1,400  Ultramar Corporation.....................................................................       34,125
             2,200  Valero Energy Corporation................................................................       51,975
             1,000  YPF Sociedad Anonima, Sponsored ADR......................................................       17,125
                                                                                                               -----------
                                                                                                                 1,558,950
                                                                                                               -----------
PHARMACEUTICAL--10.3%
- ---------------------
             3,000  Abbott Laboratories......................................................................      119,250
             2,600  American Home Products Corporation.......................................................      230,425
             4,000  Amgen, Inc.*.............................................................................      192,000
             2,000  Beckman Instruments, Inc. ...............................................................       66,250
             3,200  Bristol-Myers Squibb Company.............................................................      244,000
             3,600  Lilly (Eli) & Company....................................................................      347,850
             1,200  Merck & Company, Inc. ...................................................................       69,000
             1,600  Pfizer, Inc. ............................................................................       91,800
             2,000  R.P. Scherer Corporation*................................................................       89,000
             1,700  Schering-Plough Corporation..............................................................       91,163
             2,500  Upjohn Company...........................................................................      126,875
                                                                                                               -----------
                                                                                                                 1,667,613
                                                                                                               -----------
POLLUTION CONTROL--0.9%
- -----------------------
             3,000  Browning-Ferris Industries...............................................................       87,375
             2,100  WMX Technologies, Inc. ..................................................................       59,063
                                                                                                               -----------
                                                                                                                   146,438
                                                                                                               -----------
PUBLISHING--3.0%
- ----------------
             3,500  Dun & Bradstreet Corporation.............................................................      209,125
             1,700  Gannett Company..........................................................................       92,437
             2,800  Tribune Company..........................................................................      176,750
                                                                                                               -----------
                                                                                                                   478,312
                                                                                                               -----------
REAL ESTATE INVESTMENT TRUST (REIT)--0.3%
- -----------------------------------------
             1,500  Meditrust, SBI...........................................................................       50,625
                                                                                                               -----------
RETAIL--3.8%
- ------------
             1,000  Ann Taylor Stores, Inc.*.................................................................       11,000
             2,500  Barnes & Noble, Inc.*....................................................................       91,250
             3,000  Gap, Inc. ...............................................................................      118,125
             1,900  J.C. Penney Company, Inc. ...............................................................       80,037
             2,000  May Department Stores Company............................................................       78,500
             2,400  Nordstrom, Inc. .........................................................................       88,950
             1,000  O'Reilly Automotive, Inc.*...............................................................       32,750
             1,000  Sears Roebuck And Company................................................................       34,000
             1,700  Toys "R" Us, Inc.*.......................................................................       37,187
             2,000  Wal-Mart Stores, Inc. ...................................................................       43,250
                                                                                                               -----------
                                                                                                                   615,049
                                                                                                               -----------
SECURITIES--1.5%
- ----------------
             1,000  Edwards (A.G.), Inc. ....................................................................       25,500
             1,100  Lehman Brothers Holding, Inc. ...........................................................       23,925
               300  Morgan Stanley Group, Inc. ..............................................................       26,100
             4,700  Salomon, Inc. ...........................................................................      169,787
                                                                                                               -----------
                                                                                                                   245,312
                                                                                                               -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
<PAGE>   6
 
- --------------------------------------------------------------------------------
                    HERITAGE SERIES TRUST-VALUE EQUITY FUND
                              INVESTMENT PORTFOLIO
                                OCTOBER 31, 1995
                                  (CONTINUED)
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                                                 MARKET
      SHARES                                                                                                      VALUE
- ------------------                                                                                             -----------
<C>                 <S>                                                                                        <C>
SERVICES--0.5%
- --------------
             2,500  Medaphis Corporation*....................................................................  $    79,375
                                                                                                               -----------
STEEL--0.3%
- -----------
             1,500  Carpenter Technology Corporation.........................................................       56,813
                                                                                                               -----------
TELECOMMUNICATIONS--5.4%
- ------------------------
               800  Alcatel Alsthom CGE, Sponsored ADR.......................................................       13,500
             1,000  Ameritech Corporation....................................................................       54,000
             2,700  BellSouth Corporation....................................................................      206,550
             8,000  Comsat Corporation.......................................................................      159,000
             1,000  GTE Corporation..........................................................................       41,250
             1,600  Hong Kong Telecommunications, Ltd., Sponsored ADR........................................       27,800
               600  MCI Communications.......................................................................       14,963
             2,600  NYNEX Corporation........................................................................      122,200
               800  Pacific Telesis Group....................................................................       24,300
             2,700  SBC Communications, Inc. ................................................................      150,863
             1,300  Telephone & Data Systems, Inc. ..........................................................       52,000
                                                                                                               -----------
                                                                                                                   866,426
                                                                                                               -----------
TEXTILES--0.3%
- --------------
             1,500  Liz Claiborne, Inc. .....................................................................       42,563
               400  Shaw Industries, Inc. ...................................................................        5,100
                                                                                                               -----------
                                                                                                                    47,663
                                                                                                               -----------
TOBACCO--2.2%
- -------------
             3,000  American Brands, Inc. ...................................................................      128,625
             4,500  RJR Nabisco Holdings Corporation.........................................................      138,375
             3,000  UST, Inc. ...............................................................................       90,000
                                                                                                               -----------
                                                                                                                   357,000
                                                                                                               -----------
TRANSPORTATION--5.0%
- --------------------
             6,000  Airborne Freight Corporation.............................................................      157,500
             2,700  CSX Corporation..........................................................................      226,125
             4,000  Federal Express Corporation*.............................................................      328,500
             2,400  Illinois Central Corporation.............................................................       91,800
                                                                                                               -----------
                                                                                                                   803,925
                                                                                                               -----------
Total common stocks (cost $14,277,378).......................................................................   15,072,571
                                                                                                               -----------
TOTAL INVESTMENT PORTFOLIO (cost $16,502,378)(b), 107.0%(a)..................................................   17,297,571
OTHER ASSETS AND LIABILITIES, NET, (7.0%)(a).................................................................   (1,126,765)
                                                                                                               -----------
NET ASSETS, 100.0%...........................................................................................  $16,170,806
                                                                                                                ==========
</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
      $16,511,338. Market value includes net unrealized appreciation of
      $786,233, which consists of aggregate gross unrealized appreciation for
      all securities in which there is an excess of market value over tax cost
      of $1,076,898 and aggregate gross unrealized depreciation for all
      securities in which there is an excess of tax cost over market value of
      $290,665.
 ADR -- American Depository Receipt.
 
    The accompanying notes are an integral part of the financial statements.
<PAGE>   7
 
- --------------------------------------------------------------------------------
                    HERITAGE SERIES TRUST-VALUE EQUITY FUND
                      STATEMENT OF ASSETS AND LIABILITIES
                                OCTOBER 31, 1995
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                                              <C>            <C>
Assets
- -----
Investments, at market value (identified cost $14,277,378) (Note 1)............................                 $15,072,571
Repurchase agreement (identified cost $2,225,000) (Note 1).....................................                   2,225,000
Cash...........................................................................................                         166
Receivables:
  Investments sold.............................................................................                     652,797
  Fund shares sold.............................................................................                     174,658
  Dividends and interest.......................................................................                      20,601
Deferred organization expenses (Note 1)........................................................                      44,175
Deferred state registration expenses (Note 1)..................................................                      15,931
Prepaid insurance..............................................................................                       1,283
                                                                                                                -----------
        Total assets...........................................................................                  18,207,182

Liabilities
- -----------
Payables (Note 4):
  Investments purchased........................................................................  $1,919,273
  Fund shares redeemed.........................................................................      15,388
  Due to Manager...............................................................................      27,128
  Accrued distribution fee.....................................................................       5,562
  Other accrued expenses.......................................................................      69,025
                                                                                                 ----------
        Total liabilities......................................................................                   2,036,376
                                                                                                                -----------
Net assets, at market value....................................................................                 $16,170,806
                                                                                                                 ==========
Net Assets
- ---------
Net assets consist of:
  Undistributed net investment income..........................................................                 $    56,475
  Net unrealized appreciation on investments...................................................                     795,193
  Accumulated net realized gain................................................................                     536,111
  Paid-in capital..............................................................................                  14,783,027
                                                                                                                -----------
Net assets, at market value....................................................................                 $16,170,806
                                                                                                                 ==========
Class A Shares
- -------------
Net asset value and redemption price per share ($11,918,015 divided by 661,961 shares of
  beneficial interest outstanding, no par value) (Notes 1 and 2)...............................                      $18.00
                                                                                                                 ==========
Maximum offering price per share (100/95.25 of $18.00).........................................                      $18.90
                                                                                                                 ==========
Class C Shares
- ------------
Net asset value and offering price per share ($4,252,791 divided by 237,324 shares of
  beneficial interest outstanding, no par value) (Notes 1 and 2)...............................                      $17.92
                                                                                                                 ==========
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
<PAGE>   8
 
- --------------------------------------------------------------------------------
                    HERITAGE SERIES TRUST-VALUE EQUITY FUND
                            STATEMENT OF OPERATIONS
                        FOR THE PERIOD DECEMBER 30, 1994
                          (COMMENCEMENT OF OPERATIONS)
                              TO OCTOBER 31, 1995
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                                                                 <C>          <C>
Investment Income
- ----------------
Income:
  Dividends.......................................................................................               $  133,861
  Interest........................................................................................                   34,714
                                                                                                                 ----------
        Total income..............................................................................                  168,575
Expenses (Notes 1 and 4):
  Management fee..................................................................................  $ 47,250
  Custodian/Fund accounting fees..................................................................    54,127
  Amortization of state registration expenses.....................................................    30,714
  Professional fees...............................................................................    26,809
  Distribution fee................................................................................    23,888
  Reports to shareholders.........................................................................    12,512
  Shareholder servicing fee.......................................................................    10,346
  Amortization of organization expenses...........................................................     8,835
  Trustees' fees and expenses.....................................................................     6,413
  Federal registration fee........................................................................     4,994
  Insurance.......................................................................................     2,186
                                                                                                    --------
        Total expenses before waiver and reimbursement............................................   228,074
        Fees waived by the Manager (Note 4).......................................................   (47,250)
        Reimbursement from Manager (Note 4).......................................................   (68,724)       112,100
                                                                                                    --------     ----------
Net investment income.............................................................................                   56,475
                                                                                                                 ----------
Realized and Unrealized Gain on Investments
- ---------------------------------------
Net realized gain from investment transactions....................................................                  536,111
Net increase in unrealized appreciation of investments during the period..........................                  795,193
                                                                                                                 ----------
        Net gain on investments...................................................................                1,331,304
                                                                                                                 ----------
Net increase in net assets resulting from operations..............................................               $1,387,779
                                                                                                                  =========
</TABLE>
 
- --------------------------------------------------------------------------------
                       STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                                        FOR THE PERIOD
                                                                                                       DECEMBER 30, 1994
                                                                                                 (COMMENCEMENT OF OPERATIONS)
                                                                                                      TO OCTOBER 31, 1995
                                                                                                 -----------------------------
<S>                                                                                              <C>
Increase in net assets:
Operations:
  Net investment income.........................................................................     $        56,475
  Net realized gain from investment transactions................................................             536,111
  Net increase in unrealized appreciation of investments during the period......................             795,193
                                                                                                        ------------
  Net increase in net assets resulting from operations..........................................           1,387,779
Increase in net assets from Fund share transactions (Note 2)....................................          14,482,027
                                                                                                        ------------
Increase in net assets..........................................................................          15,869,806
Net assets, beginning of period (original capital as of December 30, 1994)......................             301,000
                                                                                                        ------------
Net assets, end of period (including undistributed net investment income of $56,475)............     $    16,170,806
                                                                                                     ===============
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
<PAGE>   9
 
- --------------------------------------------------------------------------------
                    HERITAGE SERIES TRUST-VALUE EQUITY FUND
                              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>
                                                                                            CLASS A+      CLASS C++
                                                                                           ----------     ----------
<S>                                                                                        <C>            <C>
NET ASSET VALUE, BEGINNING OF THE PERIOD.................................................  $   14.29       $  15.27
                                                                                           ----------     ----------
INCOME FROM INVESTMENT OPERATIONS:
  Net investment income..................................................................        .08            .01
  Net realized and unrealized gain on investments........................................       3.63           2.64
                                                                                           ----------     ----------
Total from investment operations.........................................................       3.71           2.65
                                                                                           ----------     ----------
NET ASSET VALUE, END OF THE PERIOD.......................................................  $   18.00       $  17.92
                                                                                           ===========    ===========
TOTAL RETURN (%)(C)(D)...................................................................      25.96          17.35

RATIOS (%)/AND SUPPLEMENTAL DATA:
  Ratio of operating expenses, net to average daily net assets(a)(b).....................       1.65           2.40
  Ratio of net investment income to average daily net assets(b)..........................       1.05            .28
  Portfolio turnover rate(b).............................................................         82             82
  Net assets, end of period ($ millions).................................................         12              4
</TABLE>
 
- ---------------
 
 +  For the period December 30, 1994 (commencement of operations) to October 31,
1995.
++  For the period April 3, 1995 (commencement of Class C Shares) to October 31,
1995.
(a) Excludes management fees waived and expenses reimbursed by the Manager of
    $.13 per share for Class A and Class C Shares, respectively. The operating
    expense ratios including such items would be 3.49% and 4.24%, (annualized),
    respectively.
(b) Annualized.
(c) Not annualized.
(d) Does not reflect the imposition of a sales charge.
<PAGE>   10
 
- --------------------------------------------------------------------------------
                    HERITAGE SERIES TRUST-VALUE EQUITY FUND
                         NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
 
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 four
        series, the Value Equity Fund (the "Fund"), the Small Cap Stock Fund,
        the Growth Equity Fund and the Eagle International Equity Portfolio. The
        Fund currently issues Class A and Class C Shares. Class A Shares are
        sold subject to a maximum sales charge of 4.75% of the amount invested
        payable at the time of purchase. Class C Shares, which were offered to
        shareholders beginning April 3, 1995, are sold subject to a contingent
        deferred sales charge of 1% of the lower of net asset value or purchase
        price payable upon any redemptions within one year after purchase. The
        financial statements for the Small Cap Fund and Eagle International
        Equity Portfolio are presented separately. The policies described below
        are followed by the Fund in the preparation of its financial statements
        in conformity with generally accepted accounting principles.
 
        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.
 
        Expenses: The Fund is charged for those expenses which are directly
        attributable to it, such as management fee, custodian/fund accounting
        fees, distribution fee, etc., while other expenses such as professional
        fees, insurance expense, etc., are all allocated proportionately among
        the Funds. Expenses of the Fund are allocated to each class of shares
        based upon their relative percentage of current net assets. All expenses
        that are directly attributable to a specific class of shares, such as
        distribution fees, are allocated to that class.
 
        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 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.
<PAGE>   11
 
- --------------------------------------------------------------------------------
                    HERITAGE SERIES TRUST-VALUE EQUITY FUND
                         NOTES TO FINANCIAL STATEMENTS
                                  (CONTINUED)
- --------------------------------------------------------------------------------
 
Note 2: FUND SHARES. At October 31, 1995, there was an unlimited number of
        shares of beneficial interest of no par value authorized.
 
        Transactions in Class A and Class C Shares of the Fund during the period
        December 30, 1994 to October 31, 1995 were as follows:
 
<TABLE>
<CAPTION>
                                                                       CLASS A SHARES                  CLASS C SHARES
                                                                       FOR THE PERIOD                  FOR THE PERIOD
                                                                     DECEMBER 30, 1994                 APRIL 3, 1995
                                                                      (COMMENCEMENT OF                (COMMENCEMENT OF
                                                                       OPERATIONS) TO                CLASS C SHARES) TO
                                                                      OCTOBER 31, 1995                OCTOBER 31, 1995
                                                                 --------------------------       ------------------------
                                                                   SHARES         AMOUNT           SHARES         AMOUNT
                                                                 ----------     -----------       ---------     ----------
        <S>                                                      <C>            <C>               <C>           <C>
        Shares sold............................................     692,734     $11,278,811         238,487     $4,109,350
        Shares redeemed........................................     (51,837)       (885,977)         (1,163)       (20,157)
                                                                 ----------     -----------       ---------     ----------
        Net increase...........................................     640,897     $10,392,834         237,324     $4,089,193
                                                                                 ==========                      =========
        Shares outstanding:
          Beginning of period (seed shares)....................      21,064                              --
                                                                 ----------                       ---------
          End of period........................................     661,961                         237,324
                                                                  =========                        ========
</TABLE>
 
Note 3: PURCHASES AND SALES OF SECURITIES. For the period ended October 31,
        1995, purchases and sales of investment securities (excluding repurchase
        agreements and short term obligations) aggregated $18,855,843 and
        $5,114,517, respectively.
 
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
        .75% 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 and, if necessary reimburse the Fund to the extent that
        Fund operating expenses exceed 1.65% for Class A Shares (2.40% for Class
        C Shares effective April 3, 1995) on an annual basis of the Fund's
        average daily net assets attributable to each class of shares. This
        agreement is more restrictive than any state expense limitation at the
        current level of net assets. Under the Agreement, management fees waived
        and expenses reimbursed totaled $115,974 ($.13 per share for each class)
        during the period ended October 31, 1995. If total Fund expenses fall
        below the expense limitation agreed to by the Manager before the end of
        the year ending October 31, 1997, the Fund may be required to pay the
        Manager a portion or all of the waived management fee.
 
        The Manager is also the Dividend Paying and Shareholder Servicing Agent
        for the Portfolio. The amount payable to the Manager for such expenses
        as of October 31, 1995 was $4,800. In addition, the Manager performs
        Fund Accounting services and charged $20,509 during the current period
        of which $8,200 was payable as of October 31, 1995.
 
        The Manager has entered into an agreement with Eagle Asset Management,
        Inc. (the "Subadviser") for the Subadviser to provide to the Fund
        investment advice, portfolio management services including the placement
        of brokerage orders, and certain compliance and other services for a fee
        payable by the Manager equal to 50% of the fees payable by the Fund to
        the Manager without regard to any reduction due to the imposition of
        expense limitations.
 
        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. Under the Class C Distribution Plan the Fund paid the
        Distributor a fee equal 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 $13,040 and $10,848 were paid for distribution fees for Class A
        Shares and Class C Shares, respectively. The Manager, the Subadviser,
        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
<PAGE>   12
 
- --------------------------------------------------------------------------------
                    HERITAGE SERIES TRUST-VALUE EQUITY FUND
                         NOTES TO FINANCIAL STATEMENTS
                                  (CONTINUED)
- --------------------------------------------------------------------------------
 
        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.
<PAGE>
                               HERITAGE SERIES TRUST - 
                                SMALL CAP STOCK FUND
                                  VALUE EQUITY FUND

                              PART C. OTHER INFORMATION
                              -------------------------


     Item 24.         Financial Statements and Exhibits
                      ---------------------------------

                      (a)      Financial  Statements included  as a part
                               of this Registration Statement:

                               Included in Part A of the Registration Statement:

                                       Financial Highlights - A  shares of Small
                                       Cap  Stock Fund  for  the  period May  7,
                                       1993  (commencement  of   operations)  to
                                       October 31,  1993 and  the periods  ended
                                       October 31,  1994 and  1995; C  shares of
                                       Small  Cap  Stock  Fund  for  the  period
                                       April 3, 1995 (commencement  of C shares)
                                       to October 31, 1995.

                                       Financial Highlights - A  shares of Value
                                       Equity Fund  for the  period December 30,
                                       1994  (commencement  of   operations)  to
                                       October  31,  1995;  C  shares  of  Value
                                       Equity  Fund for the period April 3, 1995
                                       (commencement  of  C  shares) to  October
                                       31, 1995.

                               Included  in Part B of the Registration Statement
                               on  behalf  of Small  Cap  Stock  Fund  and Value
                               Equity Fund:

                                       Investment Portfolio - October 31, 1995;
                                       Statement  of  Assets  and Liabilities  -
                                                October 31, 1995;
                                       Statement  of  Operations  for  the  year
                                                ended October 31, 1995 for Small
                                                Cap  Stock  Fund   and  for  the
                                                period  December   30,  1994  to
                                                October   31,  1995   For  Value
                                                Equity Fund;
                                       Statement of  Changes in  Net Assets  for
                                                the years ended October 31, 1994
                                                and  1995  for  Small  Cap Stock
                                                Fund   and    for   the   period
                                                December 30,  1994 (commencement
                                                of  operations)  to October  31,
                                                1995 for Value Equity Fund;
                                       Financial Highlights


                                         C-1                      <PAGE>






                                       Notes to Financial Statements;
                                       Reports of Coopers & Lybrand L.L.P.,
                                                Independent Accountants, dated
                                                December 22, 1995

                      (b)      Exhibits:

                               (1)     Declaration of Trust*

                               (2)     Bylaws*

                               (3)     Voting trust agreement -- none

                               (4)  (a)(i)      Specimen   security   Small  Cap
                                                Stock Fund Class A**

                                    (a)(ii)     Specimen   security   Small  Cap
                                                Stock Fund Class C**

                                    (b)(i)      Specimen  security  Value Equity
                                                Fund Class A**

                                    (b)(ii)     Specimen  security  Value Equity
                                                Fund Class C**

                                    (c)(i)      Specimen      security     Eagle
                                                International  Equity  Portfolio
                                                Eagle Class**

                                    (c)(ii)     Specimen      security     Eagle
                                                International  Equity  Portfolio
                                                Class A**

                                    (c)(iii)    Specimen      security     Eagle
                                                International  Equity  Portfolio
                                                Class C**

                                    (d)(i)      Specimen security  Growth Equity
                                                Fund Class A**

                                    (d)(ii)     Specimen security  Growth Equity
                                                Fund Class C**

                               (5)  (a)(i)      Investment      Advisory     and
                                                Administration Agreement*

                                    (a)(ii)     Amended  Schedule A  relating to
                                                the addition of the Value Equity
                                                Fund*




                                         C- 2
<PAGE>






                                    (a)(iii)    Amended  Schedule A  relating to
                                                the   addition  of   the  Growth
                                                Equity Fund*

                                   (b)          Investment      Advisory     and
                                                Administration Agreement between
                                                Eagle Asset Management, Inc. and
                                                Eagle    International    Equity
                                                Portfolio*

                                    (c)(i)      Subadvisory   Agreement  between
                                                Heritage Asset  Management, Inc.
                                                and Raymond  James & Associates,
                                                Inc. relating to Small Cap Stock
                                                Fund*

                                    (c)(ii)     Subadvisory   Agreement  between
                                                Heritage Asset  Management, Inc.
                                                and   Awad   &   Associates,   a
                                                division  of  Raymond James  and
                                                Associates,  Inc.   relating  to
                                                Small Cap Stock Fund*

                                    (d)(i)      Form  of  Subadvisory  Agreement
                                                between      Heritage      Asset
                                                Management, Inc. and Eagle Asset
                                                Management,  Inc.   relating  to
                                                Value Equity Fund*

                                    (d)(ii)     Amended  Schedule A  relating to
                                                the addition  of the  Small  Cap
                                                Stock Fund*

                                    (d)(iii)    Amended  Schedule A  relating to
                                                the   addition  of   the  Growth
                                                Equity Fund*

                                    (e)         Form  of  Subadvisory  Agreement
                                                between Eagle  Asset Management,
                                                Inc.  and   Martin  Currie  Inc.
                                                relating to  Eagle International
                                                Equity Portfolio*

                               (6)     Distribution Agreement*

                               (7)     Bonus,  profit  sharing or  pension plans
                                       -- none

                               (8)     Form of Custodian Agreement*

                               (9)     (a)      Form  of   Transfer  Agency  and
                                                Service Agreement*

                                         C- 3
<PAGE>






                                       (b)      Form  of   Fund  Accounting  and
                                                Pricing Service Agreement*

                               (10)    Opinion and consent of counsel*** 

                               (11)    Accountants' consent (filed herewith)

                               (12)    Financial    statements   omitted    from
                                       prospectus -- none

                               (13)    Letter of investment intent*

                               (14)    Prototype retirement plan**

                               (15)  (a)(i)     Class A  Plan pursuant  to  Rule
                                                12b-1*

                                     (a)(ii)    Amended  Schedule A  relating to
                                                the addition of the Value Equity
                                                Fund*

                                     (a)(iii)   Amended  Schedule A  relating to
                                                the   addition  of   the  Growth
                                                Equity Fund*

                                     (a)(iv)    Amended  Schedule A  relating to
                                                the   addition   of  the   Eagle
                                                International Equity Portfolio*

                                     (b)(i)     Class C  Plan pursuant  to  Rule
                                                12b-1*

                                     (b)(ii)    Amended  Schedule A  relating to
                                                the   addition  of   the  Growth
                                                Equity Fund*

                                     (b)(iii)   Amended  Schedule A  relating to
                                                the   addition   of  the   Eagle
                                                International Equity Portfolio*

                                     (c)        Eagle  Class  Plan  pursuant  to
                                                Rule 12b-1*

                               (16)    Performance Computation Schedule:

                                       (a)      Small Cap Stock Fund*

                                       (b)      Value    Equity    Fund   (filed
                                                herewith)

                                       (c)      Eagle    International    Equity
                                                Portfolio*

                                         C- 4
<PAGE>






                                       (d)      Growth    Equity     Fund     --
                                                inapplicable

                               (17)    Financial  Data Schedule  for  Electronic
                                       Filers:

                                       (a)(i)   Small Cap  Stock  Fund - Class A
                                                (filed herewith)

                                       (a)(ii)  Small Cap  Stock Fund - Class  C
                                                (filed herewith)

                                       (b)(i)   Value  Equity   Fund  -  Class A
                                                (filed herewith)

                                       (b)(ii)  Value  Equity  Fund  -  Class  C
                                                (filed herewith)

                                       (c)      Eagle    International    Equity
                                                Portfolio*

                                       (d)      Growth    Equity     Fund     --
                                                inapplicable 

                               (18)    Form of Plan pursuant to Rule 18f-3*

     *        Incorporated by  reference to  Post-Effective Amendment No.  10 to
              the   Trust's   Registration  Statement,   filed   previously   on
              December 1, 1995.

     **       To be filed by subsequent amendment.

     ***      Incorporated by reference to the Trust's Rule 24f-2 Notice,  filed
              previously on November 14, 1995


     Item 25.         Persons   Controlled  by  or  under  Common  Control  with
                      Registrant
                      ---------------------------------------------------

                      None.












                                        C- 5
<PAGE>






     Item 26.         Number of Holders of Securities
                      -------------------------------

                                             Number of Record Holders
                 Title of Class                  January 31, 1996
                 --------------              -------------------------

       Shares of beneficial interest

             Small Cap Stock Fund
                   Class A Shares                       5,503
                   Class C Share                          616

             Value Equity Fund
                   Class A Shares                       1,441
                   Class C Shares                         710

             Growth Equity Fund
                   Class A Shares                         576
                   Class C Shares                         194

             Eagle International 
               Equity Portfolio
                   Class A Shares                          81
                   Class C Shares                          16
                   Eagle Class Shares                     206


     Item 27.     Indemnification
                  ---------------

           Article  XI,  Section  2 of  Heritage Series  Trust's  Declaration of
           Trust provides that:

           (a)    Subject  to  the   exceptions  and  limitations  contained  in
                  paragraph (b) below:

                  (i)   every  person who is, or has  been, a Trustee or officer
     of the  Trust  (hereinafter  referred to  as  "Covered  Person")  shall  be
     indemnified by the  appropriate portfolios to the fullest  extent permitted
     by law against liability  and against all  expenses reasonably incurred  or
     paid by him in  connection with  any claim, action,  suit or proceeding  in
     which he  becomes involved as a party  or otherwise by virtue  of his being
     or having been  a Trustee or officer  and against amounts paid  or incurred
     by him in the settlement thereof;

                  (ii)  the words  "claim,"  "action," "suit,"  or  "proceeding"
     shall  apply to all claims, actions, suits  or proceedings (civil, criminal
     or  other, including  appeals), actual  or  threatened while  in  office or
     thereafter,  and  the  words  "liability"  and  "expenses"  shall  include,



                                        C- 6
<PAGE>






     without  limitation, attorneys'  fees, costs,  judgments,  amounts paid  in
     settlement, fines, penalties and other liabilities.

           (b)    No indemnification  shall be  provided hereunder to  a Covered
     Person:

                  (i)   who  shall  have been  adjudicated  by a  court  or body
     before which the proceeding was  brought (A) to be  liable to the Trust  or
     its  Shareholders  by  reason  of  willful misfeasance,  bad  faith,  gross
     negligence or reckless disregard of  the duties involved in the conduct  of
     his office or (B) not to have acted in good faith in the  reasonable belief
     that his action was in the best interest of the Trust; or

                  (ii)  in the  event of a  settlement, unless there  has been a
     determination that  such  Trustee or  officer  did  not engage  in  willful
     misfeasance,  bad  faith, gross  negligence  or reckless  disregard  of the
     duties involved  in the conduct  of his  office (A) by  the court or  other
     body  approving  the settlement;  (B)  by  at  least  a majority  of  those
     Trustees who are  neither interested persons of  the Trust nor  are parties
     to the matter  based upon a review  of readily available facts  (as opposed
     to  a full  trial-type inquiry); or  (C) by written  opinion of independent
     legal counsel  based upon a  review of readily available  facts (as opposed
     to  a full  trial-type  inquiry); provided,  however, that  any Shareholder
     may, by  appropriate legal proceedings, challenge any such determination by
     the Trustees, or by independent counsel.

           (c)    The rights  of indemnification herein provided  may be insured
     against by policies maintained by the Trust, shall be severable, shall  not
     be exclusive of  or affect any other rights to which any Covered Person may
     now or hereafter be entitled, shall continue as to  a person who has ceased
     to be such Trustee or officer and shall inure  to the benefit of the heirs,
     executors and administrators  of such  a person.  Nothing contained  herein
     shall affect any  rights to indemnification to which Trust personnel, other
     than Trustees and officers,  and other persons may be  entitled by contract
     or otherwise under law.

           (d)    Expenses  in connection with the  preparation and presentation
     of a  defense to any  claim, action, suit,  or proceeding of the  character
     described  in paragraph (a) of this Section 2 may be paid by the applicable
     Portfolio  from  time to  time  prior  to  final  disposition thereof  upon
     receipt of an undertaking by or on behalf of such Covered  Person that such
     amount  will  be paid  over  by  him  to  the  Trust if  it  is  ultimately
     determined that  he is not  entitled to indemnification  under this Section
     2; provided, however, that:

                  (i)   such Covered  Person  shall  have  provided  appropriate
     security for such undertaking;

                  (ii)  the Trust is insured  against losses arising out  of any
     such advance payments; or



                                        C- 7
<PAGE>






                  (iii)  either  a majority  of  the  Trustees who  are  neither
     interested persons of the Trust nor  parties to the matter, or  independent
     legal counsel in  a written opinion,  shall have determined,  based upon  a
     review of  readily available facts (as  opposed to a trial-type  inquiry or
     full investigation),  that there  is reason  to believe  that such  Covered
     Person will be found entitled to indemnification under this Section 2.

           According to Article XII, Section 1 of the  Declaration of Trust, the
     Trust is a  trust, not a partnership.   Trustees are not  liable personally
     to  any person  extending credit to,  contracting with or  having any claim
     against  the Trust,  a particular  Portfolio or  the Trustees.   A Trustee,
     however, is  not protected from  liability due to  willful misfeasance, bad
     faith, gross negligence  or reckless disregard  of the  duties involved  in
     the conduct of his office.

           Article XII,  Section 2 provides that,  subject to  the provisions of
     Section 1  of Article XII and  to Article XI,  the Trustees are  not liable
     for errors  of judgment  or mistakes  of fact  or law,  or for  any act  or
     omission in  accordance with  advice of  counsel or  other  experts or  for
     failing to follow such advice.

           Paragraph 8 of  the Investment Advisory and Administration  Agreement
     ("Advisory Agreement") between the Trust, on behalf of Eagle  International
     Equity  Portfolio, and  Eagle Asset  Management,  Inc. ("Eagle"),  provides
     that Eagle shall not be liable for any error of judgment or mistake  of law
     for  any loss suffered by the Trust or any Portfolio in connection with the
     matters to  which the  Advisory Agreement  relate except  a loss  resulting
     from willful misfeasance, bad faith or gross negligence on its part in  the
     performance  of  its  duties  or  from  reckless  disregard  by  it  of its
     obligations and  duties under  the Advisory  Agreement.   Any person,  even
     though also an  officer, partner, employee, or  agent of Eagle, who  may be
     or become  an officer,  trustee, employee or  agent of  the Trust shall  be
     deemed, when rendering services to the Trust  or acting in any business  of
     the Trust,  to be rendering such services to or acting solely for the Trust
     and  not as  an  officer, partner,  employee,  or agent  or  one under  the
     control or direction of Eagle even though paid by it.

           Paragraph 9  of the Subadvisory  Agreement ("Subadvisory  Agreement")
     between Eagle  and Martin Currie  Inc. ("Martin Currie")  provides that, in
     the  absence of willful misfeasance,  bad faith or  gross negligence on the
     part of Martin Currie,  or reckless disregard of its obligations and duties
     under the Subadvisory Agreement, Martin Currie shall  not be subject to any
     liability to  Eagle, the Trust,  or their directors,  trustees, officers or
     shareholders, for any act or omission in the  course of, or connected with,
     rendering services under the Subadvisory Agreement.

           Paragraph 7  of  the Distribution  Agreement  between  the Trust,  on
     behalf of  the Eagle  International Equity  Portfolio and  Raymond James  &
     Associates,  Inc.  ("Raymond James")  provides  that, the  Trust  agrees to
     indemnify, defend and  hold harmless  Raymond James,  its several  officers
     and  directors,  and any  person  who  controls  Raymond  James within  the
     meaning  of Section 15 of the Securities Act of 1933, as amended (the "1933

                                        C- 8
<PAGE>






     Act")  from  and against  any  and  all  claims,  demands, liabilities  and
     expenses  (including the  cost of investigating  or defending  such claims,
     demands  or  liabilities  and  any  counsel  fees  incurred  in  connection
     therewith)  which Raymond  James,  its officers  or  Trustees, or  any such
     controlling person  may incur  under the 1933  Act or  under common law  or
     otherwise arising out  of or based upon  any alleged untrue statement  of a
     material  fact  contained  in the  Registration  Statement,  Prospectus  or
     Statement of  Additional Information or  arising out of  or based  upon any
     alleged omission to state a material fact  required to be stated in  either
     thereof  or  necessary  to  make  the  statements  in  either  thereof  not
     misleading,  provided that  in  no event  shall  anything contained  in the
     Distribution Agreement be  construed so as to protect Raymond James against
     any  liability to  the Trust  or its  shareholders  to which  Raymond James
     would otherwise be subject by  reason of willful misfeasance, bad faith, or
     gross negligence in  the performance  of its duties,  or by  reason of  its
     reckless disregard  of its  obligations and duties  under the  Distribution
     Agreement.

           Paragraph  13 of the  Heritage Funds  Accounting and Pricing Services
     Agreement ("Accounting  Agreement") between  the Trust  and Heritage  Asset
     Management, Inc. ("Heritage")  provides that the Trust agrees  to indemnify
     and  hold harmless  Heritage  and its  nominees  from all  losses, damages,
     costs,  charges, payments,  expenses  (including reasonable  counsel fees),
     and  liabilities  arising  directly  or  indirectly  from  any  action that
     Heritage takes  or does or omits to take to do (i) at the request or on the
     direction  of or in reasonable reliance  on the written advice of the Trust
     or (ii) upon  Proper Instructions (as defined in the Accounting Agreement),
     provided,  that  neither   Heritage  nor  any  of  its  nominees  shall  be
     indemnified against any liability to  the Trust or to its  shareholders (or
     any expenses  incident to  such liability)  arising out  of Heritage's  own
     willful  misfeasance,  willful misconduct,  gross  negligence  or  reckless
     disregard  of its  duties  and obligations  specifically  described in  the
     Accounting Agreement or its  failure to meet the standard of care set forth
     in the Accounting Agreement.  

     Item 28.   I.      Business and Other Connections
                        of Investment Adviser         
                        ------------------------------

           Eagle, a  Florida corporation,  is a  registered investment  adviser.
     All of  its  stock is  owned by  Raymond James  Financial, Inc.   Eagle  is
     primarily  engaged in  the investment  advisory  business.   Eagle provides
     investment advisory services  to the Eagle International  Equity Portfolio.
     Information as to  the officers and directors  of Eagle is included  in its
     current Form  ADV  filed with  the  SEC and  is incorporated  by  reference
     herein.

           Heritage is a  Florida corporation that offers investment  management
     services.  Heritage  provides investment advisory services to the Small Cap
     Stock, Value Equity, and Growth Equity Funds of  the Trust.  Information as
     to the directors and officers of Heritage  is included in its current  Form


                                        C- 9
<PAGE>






     ADV filed with  the SEC (registration number 801-25067) and is incorporated
     by reference herein.

                  II.   Business and Other Connections of Subadviser
                        --------------------------------------------

           Martin  Currie, a New York corporation, is  a wholly-owned subsidiary
     of Martin  Currie  Limited.   Martin  Currie is  primarily  engaged in  the
     investment advisory business.  Martin Currie  provides subadvisory services
     to the Eagle International Equity  Portfolio of the Trust.  Information  as
     to the officers and  directors of Martin Currie is included in  its current
     Form  ADV  filed  with  the  Securities  and  Exchange  Commission  and  is
     incorporated by reference herein.  

           Raymond James is a  registered investment adviser.  All of its  stock
     is owned  by  Raymond  James  Financial,  Inc.   It  is  primarily  in  the
     financial services  business.   Awad  & Associates  is a  division of  RJA.
     Information as to  the officers and directors  of RJA and Awad  is included
     in  RJA's current  Form ADV filed  with the  SEC (registration  number 801-
     10418) and is incorporated by reference herein.

           Eagle, a  Florida corporation,  is a  registered investment  adviser.
     All  of  its stock  is  owned  by  Raymond  James Financial,  Inc.    Eagle
     primarily is engaged in the  investment advisory business.   Information as
     to the officers and directors of Eagle is included  in the current Form ADV
     filed with the SEC and is incorporated by reference herein.

     Item 29.     Principal Underwriter
                  ---------------------

                  (a)   Raymond James is  the principal underwriter for  each of
     the following investment  companies: Heritage Cash Trust,  Heritage Capital
     Appreciation  Trust,  Heritage Income-Growth  Trust, Heritage  Income Trust
     and Heritage Series Trust.

                  (b) The  directors and officers of  the Registrant's principal
     underwriter are:

                                  Positions & Offices             Position 
       Name                         with Underwriter           with Registrant
       ----                       -------------------          ---------------

       Thomas A. James      Chief Executive Officer,             Trustee
                            Director
       Robert F. Shuck      Executive V.P., Director             None

       Thomas S. Franke     President, Chief Operating           None
                            Officer, Director

       Lynn Pippenger       Secretary/Treasurer, Chief           None
                            Financial Officer, Director


                                        C- 10
<PAGE>






       Dennis Zank          Executive VP of Operations and       None
                            Administration, Director


     Item 30.     Location of Accounts and Records
                  --------------------------------

           The books  and  other documents  required  by  Rule 31a-1  under  the
     Investment Company Act of 1940,  as amended, are maintained in the physical
     possession  of  the Trust's  custodian  through February  28,  1994, except
     that: Eagle  will maintain  some or  all of  the records  required by  Rule
     31a-1(b)(l), (2) and (8); and the Subadviser  will maintain some or all  of
     the records required by Rule 31a-1(b) (2), (5), (6), (9), (10) and (11). 

     Item 31.     Management Services
                  -------------------

                  Not applicable.

     Item 32.     Undertakings
                  ------------

           Registrant hereby  undertakes  to  furnish  each  person  to  whom  a
     prospectus  is  delivered with  a  copy  of  its  latest annual  report  to
     shareholders, upon request and without charge.  




























                                        C- 11
<PAGE>






                                     SIGNATURES


           Pursuant to  the  requirements of  the  Securities  Act of  1933,  as
     amended,  and  the   Investment  Company  Act  of  1940,  as  amended,  the
     Registrant  certifies that it meets  the requirements  for effectiveness of
     this amendment  to its Registration  Statement under Rule  485(b) under the
     Securities Act  of 1933 and  has duly caused  this Post-Effective Amendment
     No. 11  to its  Registration Statement  on Form N-1A  to be  signed on  its
     behalf by the  undersigned, thereunto duly authorized,  in the City of  St.
     Petersburg  and the  State of  Florida, on  February  27, 1996.   No  other
     material  event requiring  prospectus  disclosure  has occurred  since  the
     latest of the three dates specified in Rule 485(b)(2).

                                     HERITAGE SERIES TRUST


                                     By: /s/ Stephen G. Hill
                                         -------------------------
                                         Stephen G. Hill
                                         President

     Attest:                                      

     /s/ Donald H. Glassman
     -----------------------------
     Donald H. Glassman, Treasurer

           Pursuant to  the  requirements of  the  Securities  Act of  1933,  as
     amended,  this  Post-Effective   Amendment  No.  11  to   the  Registration
     Statement has been signed below by the  following persons in the capacities
     and on the dates indicated.
       Signature                         Title                    Date

       /s/ Stephen G. Hill             President          February 27, 1995
       -----------------------
       Stephen G. Hill


       Thomas A. James*                Trustee            February 27, 1995
       -----------------------
       Thomas A. James


       Richard K. Riess*               Trustee            February 27, 1995
       -----------------------
       Richard K. Riess


       C. Andrew Graham*               Trustee            February 27, 1995
       -----------------------
       C. Andrew Graham
<PAGE>






       David M. Phillips*              Trustee            February 27, 1995
       -----------------------
       David M. Phillips


       James L. Pappas*                Trustee            February 27, 1995
       -----------------------
       James L. Pappas


       Donald W. Burton*               Trustee            February 27, 1995
       -----------------------
       Donald W. Burton


       Eric Stattin*                   Trustee            February 27, 1995
       -----------------------
       Eric Stattin*


       /s/ Donald H. Glassman          Treasurer          February 27, 1995
       -----------------------      
       Donald H. Glassman



       *By /s/ Donald H. Glassman
           ------------------------------------
           Donald H. Glassman, Attorney-In-Fact
<PAGE>






                                  INDEX TO EXHIBITS


       Exhibit
       Number        Description                                       Page
       -------       -----------                                       ----

       1             Declaration of Trust*

       2             Bylaws*

       3             Voting trust agreement -- none

       4(a)(i)       Specimen security Small Cap Stock Fund Class
                     A**

        (a)(ii)      Specimen security Small Cap Stock Fund Class
                     C**

        (b)(i)       Specimen security Value Equity Fund Class A**

        (c)(i)       Specimen security Eagle International Equity
                     Portfolio Eagle Class**

        (c)(ii)      Specimen security Eagle International Equity
                     Portfolio Class A**

        (c)(iii)     Specimen security Eagle International Equity
                     Portfolio Class C**

        (d)(i)       Specimen security Growth Equity Fund Class
                     A**

        (d)(ii)      Specimen security Growth Equity Fund Class
                     C**

       5(a)(i)       Investment Advisory and Administration
                     Agreement*

        (a)(ii)      Amended Schedule A relating to the addition
                     of the Value Equity Fund* 

        (a)(iii)     Amended Schedule A relating to the addition
                     of the Growth Equity Fund*

        (b)          Investment Advisory and Administration
                     Agreement between Eagle Asset Management,
                     Inc. and Eagle International Equity
                     Portfolio*
<PAGE>






        (c)(i)       Subadvisory Agreement between Heritage Asset
                     Management, Inc. and Raymond James &
                     Associates, Inc. relating to Small Cap Stock
                     Fund* 

        (c)(ii)      Subadvisory Agreement between Heritage Asset
                     Management, Inc. and Awad & Associates, a
                     division of Raymond James and Associates,
                     Inc. relating to Small Cap Stock Fund* 

        (d)(i)       Form of Subadvisory Agreement between
                     Heritage Asset Management, Inc. and Eagle
                     Asset Management, Inc. relating to Value
                     Equity Fund*

        (d)(ii)      Amended Schedule A relating to the addition
                     of the Small Cap Stock Fund*

        (d)(iii)     Amended Schedule A relating to the addition
                     of the Growth Equity Fund*

        (e)          Form of Subadvisory Agreement between Eagle
                     Asset Management, Inc. and Martin Currie Inc.
                     relating to Eagle International Equity
                     Portfolio*

       6             Distribution Agreement*

       7             Bonus, profit sharing or pension plans --
                     none

       8             Form of Custodian Agreement*

       9(a)          Form of Transfer Agency and Service
                     Agreement*

        (b)          Form of Fund Accounting and Pricing Service
                     Agreement*

       10            Opinion and consent of counsel***

       11            Accountants' consent (filed herewith)

       12            Financial statements omitted from
                     prospectus -- none

       13            Letter of investment intent*

       14            Prototype retirement plan**

       15(a)(i)      Class A Plan pursuant to Rule 12b-1*


                                        - 2 -
<PAGE>






         (a)(ii)     Amended Schedule A relating to the addition
                     of the Value Equity Fund*

         (a)(iii)    Amended Schedule A relating to the addition
                     of the Growth Equity Fund*

         (a)(iv)     Amended Schedule A relating to the addition
                     of the Eagle International Equity Portfolio*

         (b)(i)      Class C Plan pursuant to Rule 12b-1*

         (b)(ii)     Amended Schedule A relating to the addition
                     of the Growth Equity Fund*

         (b)(iii)    Amended Schedule A relating to the addition
                     of the Eagle International Equity Portfolio*

         (c)         Eagle Class Plan pursuant to Rule 12b-1*

       16            Performance Computation Schedule:

         (a)         Small Cap Stock Fund*

         (b)         Value Equity Fund (filed herewith)

         (c)         Eagle International Equity Portfolio*

         (d)         Growth Equity Fund -- inapplicable

       17            Financial Data Schedule for Electronic
                     Filers:

         (a)(i)      Small Cap Stock Fund - Class A (filed
                     herewith)

         (a)(ii)     Small Cap Stock Fund - Class C (filed
                     herewith)

         (b)(i)      Value Equity Fund - Class A (filed herewith)

         (b)(ii)     Value Equity Fund - Class C (filed herewith)

         (c)         Eagle International Equity Portfolio*

         (d)         Growth Equity Fund -- inapplicable

       18            Form of Plan pursuant to Rule 18f-3*






                                        - 3 -
<PAGE>






     *     Incorporated by reference to  Post-Effective Amendment No.  10 to the
           Trust's  Registration  Statement,  filed  previously  on December  1,
           1995.

     **    To be filed by subsequent amendment.

     ***   Incorporated by  reference to the  Trust's Rule  24f-2 Notice,  filed
           previously on November 14, 1995.













































                                        - 4 -
<PAGE>

<PAGE>
                          CONSENT OF INDEPENDENT ACCOUNTANTS


     To the Trustees of Heritage
              Series Trust:

                      We consent  to the  inclusion in  Post-Effective Amendment
     No. 11 to the Registration  Statement of Heritage Series Trust on Form N-1A
     of our  reports dated  December 22, 1995,  on our audits  of the  financial
     statements  and financial  highlights of  Heritage  Series Trust-Small  Cap
     Stock Fund  and Value Equity  Fund, which are included  in the Registration
     Statements.   We  also consent  to  the reference  to  our Firm  under  the
     captions  "Financial  Highlights"  in  the  Prospectuses  and  "Independent
     Accountants" in the Registration Statement.



                                                /s/ Coopers & Lybrand L.L.P.
                                                    ---------------------------
     Boston, Massachusetts                           COOPERS & LYBRAND L.L.P.   
     February 26, 1996
<PAGE>

<PAGE>
                          HERITAGE SERIES TRUST-VALUE EQUITY
                                CALCULATION OF RETURN

                                              Return Since
                                               Inception

       Ending Date                                  10/31/95
       Inception Date                               12/30/94
                                                  ----------
                                                         305
       Days Since Inception                        =========

       Years Since Inception                           0.84


       Beginning Offering Price                       15.00

       Ending Net Asset Value                         18.00
       Dividend Factor                              1.000000
                                                   ---------
          Adjusted for Dividend                      18.0000
          Reinvestments                             --------

       Annualized return                              24.38%

       Formula for since inception           (((18.00)/15.00))^(1/0.84))-1


       Beginning NAV                                  14.29


       Ending Net Asset Value                         18.00
       Dividend Factor                              1.000000
                                                   ---------
       Ending Net Asset Value                        18.0000
                                                    --------

       Cumulative Total Return                        25.96%

       Formula for since inception                (18.00-14.29)/14.29
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<TABLE> <S> <C>

<PAGE>
<ARTICLE> 6
<CIK>	0000897111
<NAME> HERITAGE SERIES TRUST
<SERIES>
   <NUMBER> 1
   <NAME> SMALL CAP STOCK FUND CLASS A
       
<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          OCT-31-1995
<PERIOD-START>                              NOV-1-1994
<PERIOD-END>                               OCT-31-1995
<INVESTMENTS-AT-COST>                      $53,374,408
<INVESTMENTS-AT-VALUE>                     $62,365,639
<RECEIVABLES>                               $2,120,656
<ASSETS-OTHER>                                 $40,317
<OTHER-ITEMS-ASSETS>                                $0
<TOTAL-ASSETS>                             $64,526,612
<PAYABLE-FOR-SECURITIES>                    $2,506,063
<SENIOR-LONG-TERM-DEBT>                             $0
<OTHER-ITEMS-LIABILITIES>                     $194,496
<TOTAL-LIABILITIES>                         $2,700,559
<SENIOR-EQUITY>                                     $0
<PAID-IN-CAPITAL-COMMON>                   $49,995,576
<SHARES-COMMON-STOCK>                        3,278,424
<SHARES-COMMON-PRIOR>                        2,563,874
<ACCUMULATED-NII-CURRENT>                      $64,614
<OVERDISTRIBUTION-NII>                              $0
<ACCUMULATED-NET-GAINS>                     $2,774,632
<OVERDISTRIBUTION-GAINS>                            $0
<ACCUM-APPREC-OR-DEPREC>                    $8,991,231
<NET-ASSETS>                               $61,826,053
<DIVIDEND-INCOME>                             $547,047
<INTEREST-INCOME>                             $406,626
<OTHER-INCOME>                                      $0
<EXPENSES-NET>                                $889,059
<NET-INVESTMENT-INCOME>                        $64,614
<REALIZED-GAINS-CURRENT>                    $2,899,946
<APPREC-INCREASE-CURRENT>                   $6,857,583
<NET-CHANGE-FROM-OPS>                       $9,822,143
<EQUALIZATION>                                      $0
<DISTRIBUTIONS-OF-INCOME>                      $33,618
<DISTRIBUTIONS-OF-GAINS>                    $2,501,284
<DISTRIBUTIONS-OTHER>                               $0
<NUMBER-OF-SHARES-SOLD>                      1,218,483
<NUMBER-OF-SHARES-REDEEMED>                    664,615
<SHARES-REINVESTED>                            160,682
<NET-CHANGE-IN-ASSETS>                     $20,301,699
<ACCUMULATED-NII-PRIOR>                      ($27,981)
<ACCUMULATED-GAINS-PRIOR>                   $2,526,517
<OVERDISTRIB-NII-PRIOR>                             $0
<OVERDIST-NET-GAINS-PRIOR>                          $0
<GROSS-ADVISORY-FEES>                         $465,132
<INTEREST-EXPENSE>                                  $0
<GROSS-EXPENSE>                               $889,059
<AVERAGE-NET-ASSETS>                       $47,130,310
<PER-SHARE-NAV-BEGIN>                           $16.20
<PER-SHARE-NII>                                  $0.01
<PER-SHARE-GAIN-APPREC>                          $3.63
<PER-SHARE-DIVIDEND>                             $0.01
<PER-SHARE-DISTRIBUTIONS>                        $0.97
<RETURNS-OF-CAPITAL>                             $0.00
<PER-SHARE-NAV-END>                             $18.86
<EXPENSE-RATIO>                                   1.88
<AVG-DEBT-OUTSTANDING>                              $0
<AVG-DEBT-PER-SHARE>                                $0
        
<PAGE>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<TABLE> <S> <C>

<PAGE>
<ARTICLE> 6
<CIK> 	0000897111
<NAME> HERITAGE SERIES TRUST
<SERIES>
   <NUMBER> 1
   <NAME> SMALL CAP STOCK FUND CLASS C
       
<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          OCT-31-1995
<PERIOD-START>                              NOV-1-1994
<PERIOD-END>                               OCT-31-1995
<INVESTMENTS-AT-COST>                      $53,374,408
<INVESTMENTS-AT-VALUE>                     $62,365,639
<RECEIVABLES>                               $2,120,656
<ASSETS-OTHER>                                 $40,317
<OTHER-ITEMS-ASSETS>                                $0
<TOTAL-ASSETS>                             $64,526,612
<PAYABLE-FOR-SECURITIES>                    $2,506,063
<SENIOR-LONG-TERM-DEBT>                             $0
<OTHER-ITEMS-LIABILITIES>                     $194,496
<TOTAL-LIABILITIES>                         $2,700,559
<SENIOR-EQUITY>                                     $0
<PAID-IN-CAPITAL-COMMON>                   $49,995,576
<SHARES-COMMON-STOCK>                        3,278,424
<SHARES-COMMON-PRIOR>                        2,563,874
<ACCUMULATED-NII-CURRENT>                      $64,614
<OVERDISTRIBUTION-NII>                              $0
<ACCUMULATED-NET-GAINS>                     $2,774,632
<OVERDISTRIBUTION-GAINS>                            $0
<ACCUM-APPREC-OR-DEPREC>                    $8,991,231
<NET-ASSETS>                               $61,826,053
<DIVIDEND-INCOME>                             $547,047
<INTEREST-INCOME>                             $406,626
<OTHER-INCOME>                                      $0
<EXPENSES-NET>                                $889,059
<NET-INVESTMENT-INCOME>                        $64,614
<REALIZED-GAINS-CURRENT>                    $2,899,946
<APPREC-INCREASE-CURRENT>                   $6,857,583
<NET-CHANGE-FROM-OPS>                       $9,822,143
<EQUALIZATION>                                      $0
<DISTRIBUTIONS-OF-INCOME>                      $33,618
<DISTRIBUTIONS-OF-GAINS>                    $2,501,284
<DISTRIBUTIONS-OTHER>                               $0
<NUMBER-OF-SHARES-SOLD>                      1,218,483
<NUMBER-OF-SHARES-REDEEMED>                    664,615
<SHARES-REINVESTED>                            160,682
<NET-CHANGE-IN-ASSETS>                     $20,301,699
<ACCUMULATED-NII-PRIOR>                      ($27,981)
<ACCUMULATED-GAINS-PRIOR>                   $2,526,517
<OVERDISTRIB-NII-PRIOR>                             $0
<OVERDIST-NET-GAINS-PRIOR>                          $0
<GROSS-ADVISORY-FEES>                         $465,132
<INTEREST-EXPENSE>                                  $0
<GROSS-EXPENSE>                               $889,059
<AVERAGE-NET-ASSETS>                       $47,130,310
<PER-SHARE-NAV-BEGIN>                           $15.67
<PER-SHARE-NII>                                  $0.00
<PER-SHARE-GAIN-APPREC>                          $3.12
<PER-SHARE-DIVIDEND>                             $0.00
<PER-SHARE-DISTRIBUTIONS>                        $0.00
<RETURNS-OF-CAPITAL>                             $0.00
<PER-SHARE-NAV-END>                             $18.79
<EXPENSE-RATIO>                                   2.36
<AVG-DEBT-OUTSTANDING>                              $0
<AVG-DEBT-PER-SHARE>                                $0
        
<PAGE>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<TABLE> <S> <C>

<PAGE>
<ARTICLE> 6
<CIK>	  0000897111 
<NAME> HERITAGE SERIES TRUST
<SERIES>
   <NUMBER> 1
   <NAME> VALUE EQUITY FUND CLASS A
       
<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          OCT-31-1995
<PERIOD-START>                              NOV-1-1994
<PERIOD-END>                               OCT-31-1995
<INVESTMENTS-AT-COST>                      $16,502,378
<INVESTMENTS-AT-VALUE>                     $17,297,571
<RECEIVABLES>                                 $848,056
<ASSETS-OTHER>                                 $61,555
<OTHER-ITEMS-ASSETS>                                $0
<TOTAL-ASSETS>                             $18,207,182
<PAYABLE-FOR-SECURITIES>                    $1,919,273
<SENIOR-LONG-TERM-DEBT>                             $0
<OTHER-ITEMS-LIABILITIES>                     $117,103
<TOTAL-LIABILITIES>                         $2,036,376
<SENIOR-EQUITY>                                     $0
<PAID-IN-CAPITAL-COMMON>                   $14,783,027
<SHARES-COMMON-STOCK>                          899,285
<SHARES-COMMON-PRIOR>                               70
<ACCUMULATED-NII-CURRENT>                      $56,475
<OVERDISTRIBUTION-NII>                              $0
<ACCUMULATED-NET-GAINS>                       $536,111
<OVERDISTRIBUTION-GAINS>                            $0
<ACCUM-APPREC-OR-DEPREC>                      $795,193
<NET-ASSETS>                               $16,170,806
<DIVIDEND-INCOME>                             $133,861
<INTEREST-INCOME>                              $34,714
<OTHER-INCOME>                                      $0
<EXPENSES-NET>                                $112,100
<NET-INVESTMENT-INCOME>                        $56,475
<REALIZED-GAINS-CURRENT>                      $536,111
<APPREC-INCREASE-CURRENT>                     $795,193
<NET-CHANGE-FROM-OPS>                       $1,387,779
<EQUALIZATION>                                      $0
<DISTRIBUTIONS-OF-INCOME>                           $0
<DISTRIBUTIONS-OF-GAINS>                            $0
<DISTRIBUTIONS-OTHER>                               $0
<NUMBER-OF-SHARES-SOLD>                        952,215
<NUMBER-OF-SHARES-REDEEMED>                     53,000
<SHARES-REINVESTED>                                  0
<NET-CHANGE-IN-ASSETS>                     $15,869,806
<ACCUMULATED-NII-PRIOR>                             $0
<ACCUMULATED-GAINS-PRIOR>                           $0
<OVERDISTRIB-NII-PRIOR>                             $0
<OVERDIST-NET-GAINS-PRIOR>                          $0
<GROSS-ADVISORY-FEES>                               $0
<INTEREST-EXPENSE>                                  $0
<GROSS-EXPENSE>                               $112,100
<AVERAGE-NET-ASSETS>                        $7,564,191
<PER-SHARE-NAV-BEGIN>                           $14.29
<PER-SHARE-NII>                                  $0.08
<PER-SHARE-GAIN-APPREC>                          $3.63
<PER-SHARE-DIVIDEND>                             $0.00
<PER-SHARE-DISTRIBUTIONS>                        $0.00
<RETURNS-OF-CAPITAL>                             $0.00
<PER-SHARE-NAV-END>                             $18.00
<EXPENSE-RATIO>                                   1.65
<AVG-DEBT-OUTSTANDING>                              $0
<AVG-DEBT-PER-SHARE>                                $0
        
<PAGE>
</TABLE>

<TABLE> <S> <C>

<PAGE>
<ARTICLE> 6
<CIK> 	0000897111
<NAME> HERITAGE SERIES TRUST
<SERIES>
   <NUMBER> 1
   <NAME> VALUE EQUITY FUND CLASS C
       
<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          OCT-31-1995
<PERIOD-START>                              NOV-1-1994
<PERIOD-END>                               OCT-31-1995
<INVESTMENTS-AT-COST>                      $16,502,378
<INVESTMENTS-AT-VALUE>                     $17,297,571
<RECEIVABLES>                                 $848,056
<ASSETS-OTHER>                                 $61,555
<OTHER-ITEMS-ASSETS>                                $0
<TOTAL-ASSETS>                             $18,207,182
<PAYABLE-FOR-SECURITIES>                    $1,919,273
<SENIOR-LONG-TERM-DEBT>                             $0
<OTHER-ITEMS-LIABILITIES>                     $117,103
<TOTAL-LIABILITIES>                         $2,036,376
<SENIOR-EQUITY>                                     $0
<PAID-IN-CAPITAL-COMMON>                   $14,783,027
<SHARES-COMMON-STOCK>                          899,285
<SHARES-COMMON-PRIOR>                               70
<ACCUMULATED-NII-CURRENT>                      $56,475
<OVERDISTRIBUTION-NII>                              $0
<ACCUMULATED-NET-GAINS>                       $536,111
<OVERDISTRIBUTION-GAINS>                            $0
<ACCUM-APPREC-OR-DEPREC>                      $795,193
<NET-ASSETS>                               $16,170,806
<DIVIDEND-INCOME>                             $133,861
<INTEREST-INCOME>                              $34,714
<OTHER-INCOME>                                      $0
<EXPENSES-NET>                                $112,100
<NET-INVESTMENT-INCOME>                        $56,475
<REALIZED-GAINS-CURRENT>                      $536,111
<APPREC-INCREASE-CURRENT>                     $795,193
<NET-CHANGE-FROM-OPS>                       $1,387,779
<EQUALIZATION>                                      $0
<DISTRIBUTIONS-OF-INCOME>                           $0
<DISTRIBUTIONS-OF-GAINS>                            $0
<DISTRIBUTIONS-OTHER>                               $0
<NUMBER-OF-SHARES-SOLD>                        952,215
<NUMBER-OF-SHARES-REDEEMED>                     53,000
<SHARES-REINVESTED>                                  0
<NET-CHANGE-IN-ASSETS>                     $15,869,806
<ACCUMULATED-NII-PRIOR>                             $0
<ACCUMULATED-GAINS-PRIOR>                           $0
<OVERDISTRIB-NII-PRIOR>                             $0
<OVERDIST-NET-GAINS-PRIOR>                          $0
<GROSS-ADVISORY-FEES>                               $0
<INTEREST-EXPENSE>                                  $0
<GROSS-EXPENSE>                               $112,100
<AVERAGE-NET-ASSETS>                        $7,564,191
<PER-SHARE-NAV-BEGIN>                           $15.27
<PER-SHARE-NII>                                  $0.01
<PER-SHARE-GAIN-APPREC>                          $2.64
<PER-SHARE-DIVIDEND>                             $0.00
<PER-SHARE-DISTRIBUTIONS>                        $0.00
<RETURNS-OF-CAPITAL>                             $0.00
<PER-SHARE-NAV-END>                             $17.92
<EXPENSE-RATIO>                                   2.40
<AVG-DEBT-OUTSTANDING>                              $0
<AVG-DEBT-PER-SHARE>                                $0
        
<PAGE>
</TABLE>


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