<PAGE> 1
December 9, 1996
Dear Fellow Shareholders:
We are pleased to provide you with the annual report for the Eagle International
Equity Portfolio (the "Fund") of Heritage Series Trust for the fiscal year ended
October 31, 1996. For this period, the Eagle class of shares of your Fund
appreciated by 8.93% as compared to a return of 10.47% for the Morgan Stanley
Capital International Europe, Asia, Far East ("EAFE") Index. As you will see
from the chart on page 4, your Fund has outperformed the EAFE Index for the
period from the Fund's inception on May 1, 1995 through October 31, 1996. On
December 27, 1995, your Fund introduced two new classes of shares. These A and C
class shares returned 5.40% and 4.78%, respectively from their inception through
October 31, 1996.* For the same period, the Eagle Class of Shares returned
4.88%* and the EAFE Index returned 3.22%. The financial and investment
performance information for all classes of shares of your Fund are presented in
this annual report.
The investment subadviser for your Fund is Martin Currie, Inc. of Edinburgh,
Scotland. In the market commentary that follows, Martin Currie discusses the
Fund's allocations among the various markets of the world and how the portfolio
has changed over the past year. With your investment in the Fund, you gain
exposure not only to the developed markets comprising the EAFE index, but also
to many of the emerging markets around the world. Because the Fund's assets are
allocated in this manner, we believe your Fund should be considered a core
international holding in your overall investment portfolio. We hope you find the
comments of Martin Currie, Inc. instructive as to how your investment portfolio
is managed.
On behalf of all of us at Eagle and Heritage, thank you for your continuing
investment in the Eagle International Equity Portfolio. We look forward to
serving your investment needs for years to come.
Sincerely, Sincerely,
/s/ Stephen G. Hill /s/ Richard K. Riess
- ------------------- --------------------
Stephen G. Hill Richard K. Riess
President President
Heritage Series Trust Eagle Asset Management, Inc.
Eagle International Equity Portfolio
* Calculated without the imposition of front-end or contingent deferred sales
charges.
A N N U A L R E P O R T
<PAGE> 2
MARKET COMMENTARY from MARTIN CURRIE, INC. December 9, 1996
Eagle International Equity Portfolio
The International Equity Portfolio (the "Fund") is constructed with the
objective of outperforming the Morgan Stanley Capital International Europe,
Australia, Far East Index ("EAFE Index"). The countries in which the Fund
invests are selected for their ability to generate high real rates of economic
growth, consistent with reasonable political and currency stability. Individual
securities are selected following an intensive research process, designed to
screen out companies with either weak financial structures, market positions or
poor management. The ability to produce premium growth in earnings is paramount.
In the twelve months through October 31, 1996 international markets moved
strongly ahead, although returns still lagged the U.S. equity market. Notable
exceptions were poor returns from a number of non-index markets, while any
strength from Japan was offset by a weakening Japanese currency.
European stockmarkets (41.6% of the portfolio against 36.1% last year) have been
robust, helped by stronger bond markets. Stock selection, rather than asset
allocation, was the key to success in this region. With economic conditions
generally difficult, companies capable of generating sustainable top-line and
earnings growth did well. For example, Telecom Italia, L'Oreal (French
cosmetics) and Wolters Kluwer (Dutch publisher) all performed favorably. We
added money to the European region over the period. Germany is at the forefront
of the current move in Europe to provide better returns for shareholders. Stocks
which we hold, such as Hoechst (chemicals) and SGL Carbon (capital goods
manufacturer) and Roche (pharmaceuticals) are good examples of this. New
European holdings include growth orientated groups such as Ericsson (Swedish
telecoms infrastructure supplier). The UK market recovered over the summer
months, helped by corporate activity in the banking sector and good company
results. The portfolio exposure to the energy sector was increased with
purchases of Shell and Lasmo, and growth stocks such as GKN and Smiths
Industries were added. Looking ahead the outlook for European markets appears
healthy. Economic activity has stabilised. Against a background of low interest
rates and subdued inflation, we expect moderate economic growth of 2 - 2.5% in
1997. We will continue to concentrate on companies capable of generating
substantial growth over the longer term. We will also seek to identify new
opportunities where corporate management is acting to improve value for
shareholders.
The Japanese stockmarket (26.7% of the portfolio against 31.4% last year) has
seen both the market fall from its high and currency weaken over the period. We
have retained our currency hedge over the year, although we cut this back from
50% to 25% of Yen assets in May 1996. We also reduced our exposure to Japanese
equities over the period. We have remained underweight in the financial sector
and overweight in manufacturing stocks, beneficiaries of corporate profit
recovery and Yen weakness. Recovery in economic and corporate profit growth were
reflected in the index at the end of the second quarter. Since then the market
has retraced much of its gains, not helped by substantial increase in new equity
issues. Foreign investors (now 10% of the market) were net sellers in July and
August. We believe the Japanese market will only move forward once we have a
clearer picture of 1997 earnings forecasts and domestic investors are attracted
back into buying equities. In the meantime, we have increased our exposure to
convertibles as a defensive measure.
Returns from Asian markets (18.4% of the portfolio against 20.8% last year) have
been very polarised, with the China related economies of Hong Kong and Taiwan
performing strongly. Smaller markets, particularly Thailand,
2 A N N U A L R E P O R T
<PAGE> 3
Korea and the Philippines were weak. With the slump in electronics related
exports mid year, a substantial derating took place, affecting much of the
region. Domestically, tight monetary policies stood at odds with growth
prospects and hampered liquidity. Our positions in these markets substantially
offset any gains from the strength of Hong Kong and the recovery in Taiwan.
Looking ahead, the China theme will continue to dominate, and we remain
committed to the related markets of Hong Kong and Taiwan. Some recovery is
expected from depressed levels from the rest of the region, with exports
improving and interest rates likely to fall. We have sold out of Thailand
completely as the technical position remains unfavourable. Positions in
Singapore have been reduced in favour of building up exposure to Malaysia.
We added to our smaller markets position (6.5% against 4.8% last year) by
increasing exposure to Latin America. We have been attracted to the recovery in
earnings momentum in the region. Mexico in particular has benefited from falling
interest rates, a stronger currency and improving consumer environment, in sharp
contrast to 1995. We have broadened the stock and country list and added Peru,
Colombia and Chile. We expect further positive market moves into 1997 as a
combination of stronger economic growth and commitment to reform are in
evidence. Positions in India and South Africa have not helped returns as both
markets weakened. The Indian market has suffered from a lack of liquidity and
political uncertainty. Valuations again look attractive here. South Africa has
suffered a currency devaluation although corporate profit growth has been
resilient. Political risk and currency volatility have led us to reduce our
weighting.
All of us at Martin Currie, Inc. appreciate the confidence you have shown in us.
We look forward to speaking to you again after the semiannual period ends in
March of 1997.
3 A N N U A L R E P O R T
<PAGE> 4
(CHART)
<TABLE>
<CAPTION>
MSCI
INTERNATIONAL EAFE
------------- ----
<S> <C> <C>
5/1/95 $10,000 $10,000
7/31/95 $10,575 $10,312
10/31/95 $10,395 $ 9,841
1/31/96 $11,088 $10,565
4/30/96 $11,579 $11,141
7/31/96 $11,134 $10,676
10/31/96 $11,323 $10,872
</TABLE>
(CHART)
<TABLE>
<CAPTION>
"Heritage Class A" "Heritage Class C" "US $"
<S> <C> <C> <C> <C>
"12/27/95" 9525 10000 10000
"12/31/95" 9489 9962 9990
"1/31/96" 9787 10270 10030
"2/29/96" 9764 10237 10065
"3/31/96" 9963 10445 10278
"4/30/96" 10238 10720 10577
"5/31/96" 10139 10611 10382
"6/30/96" 10260 10739 10441
"7/31/96" 9859 10308 10136
"8/31/96" 9958 10407 10158
"9/30/96" 10202 10658 10428
"10/31/96" 10039 10478 10322
</TABLE>
*AVERAGE ANNUAL TOTAL RETURNS FOR EAGLE INTERNATIONAL EQUITY PORTFOLIO -- EAGLE
SHARES ARE CALCULATED IN CONFORMANCE WITH ITEM 22 OF FORM N-1A, WHICH ASSUMES
THE REINVESTMENT OF DIVIDENDS.
**TOTAL RETURNS FOR EAGLE INTERNATIONAL EQUITY PORTFOLIO CLASS A SHARES AND
CLASS C SHARES ARE CALCULATED IN CONFORMANCE WITH ITEM 22 OF FORM N-1A, WHICH
ASSUMES THE REINVESTMENT OF DIVIDENDS, A SALES LOAD OF 4.75% FOR CLASS A
SHARES AND A CONTINGENT DEFERRED SALES LOAD (CDSL) OF 1% FOR CLASS "C" SHARES
ON REDEMPTIONS MADE WITHIN ONE YEAR OF PURCHASE. SINCE THE PERIOD SHOWN IS
LESS THAN ONE YEAR THE AGGREGATE TOTAL RETURN IN LIEU OF THE ANNUALIZED TOTAL
RETURN IS USED FOR CLASS A AND C SHARES.
***CALCULATED WITHOUT THE IMPOSITION OF CONTINGENT DEFERRED SALES CHARGES.
4 A N N U A L R E P O R T
<PAGE> 5
EAGLE INTERNATIONAL EQUITY PORTFOLIO
INVESTMENT PORTFOLIO
OCTOBER 31, 1996
<TABLE>
<CAPTION>
SHARES MARKET
------ VALUE
-----------
<S> <C> <C>
COMMON STOCKS--92.6%(A)
- ------------------------
ARGENTINA--0.8%
--------------
2,000 Banco de Galicia y Buenos Aires, ADR................................................. $ 36,250
16,000 Compania Perez Company SA............................................................ 101,610
3,000 YPF Sociedad Anonima, ADR............................................................ 68,250
-----------
206,110
-----------
AUSTRALIA--2.8%
--------------
24,300 Broken Hill Proprietary Company Ltd.................................................. 322,626
6,000 Lend Lease Corporation............................................................... 101,727
51,000 News Corporation..................................................................... 224,358
55,000 Qantas Airways....................................................................... 80,216
-----------
728,927
-----------
AUSTRIA--0.8%
------------
611 Flughafen Wien AG.................................................................... 30,119
1,300 V.A. Technologies AG................................................................. 181,801
-----------
211,920
-----------
BRAZIL--2.9%
-----------
8,000 Centrais Electricas Brasileiras, ADR................................................. 122,000
4,000 Companhia Energetica de Brazil, ADR.................................................. 128,500
5,000 Companhia Vale do Rio Doce, ADR...................................................... 105,625
3,500 Telebras ADR......................................................................... 260,750
12,200 Usinas Siderurgicas de Minas, ADR.................................................... 125,904
-----------
742,779
-----------
CHILE--0.4%
----------
1,300 Enersis, S.A., ADR................................................................... 38,188
1,600 Madeco S.A., ADR..................................................................... 38,400
500 Sociedad Quimica Y Minera, ADR....................................................... 28,750
-----------
105,338
-----------
COLUMBIA--0.2%
--------------
4,200 Cementos Diamante SA, GDS............................................................ 61,950
-----------
FRANCE--6.7%
------------
6,200 AXA Groupe........................................................................... 387,220
1,700 Elf Aquitaine........................................................................ 135,933
700 Imetal SA............................................................................ 109,125
650 L'Oreal.............................................................................. 220,078
1,650 L'Air Liquide........................................................................ 254,641
4,400 Michelin............................................................................. 212,146
4,640 Schneider SA......................................................................... 226,895
4,600 Seita................................................................................ 185,260
-----------
1,731,298
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5 A N N U A L R E P O R T
<PAGE> 6
EAGLE INTERNATIONAL EQUITY PORTFOLIO
INVESTMENT PORTFOLIO
OCTOBER 31, 1996
(CONTINUED)
<TABLE>
<CAPTION>
SHARES MARKET
------ VALUE
-----------
<S> <C> <C>
GERMANY--6.6%
--------------
7,300 Deutsche Bank AG..................................................................... $ 338,103
10,900 Hoechst AG........................................................................... 409,902
900 Mannesmann AG........................................................................ 349,445
2,300 SGL Carbon AG........................................................................ 258,947
6,601 VEBA AG.............................................................................. 352,062
-----------
1,708,459
-----------
HONG KONG--7.2%
----------------
229,000 Amoy Properties Limited.............................................................. 282,837
30,000 Cheung Kong Holdings Ltd............................................................. 240,553
23,000 Citic Pacific Ltd.................................................................... 111,844
159,800 Hong Kong Telecom Company Ltd........................................................ 282,102
13,496 HSBC Holdings........................................................................ 274,905
40,000 Hutchison Whampoa Limited............................................................ 279,351
42,000 New World Development Limited........................................................ 244,432
17,000 Swire Pacific Limited, Class "A"..................................................... 150,054
-----------
1,866,078
-----------
INDIA--0.3%
----------
8,032 Indian Opportunities Fund Ltd........................................................ 70,843
-----------
INDONESIA--0.9%
--------------
160,000 Telekomunikasi....................................................................... 238,698
-----------
ITALY--2.5%
----------
45,272 Eni Spa.............................................................................. 216,810
11,650 La Rinascente........................................................................ 68,887
165,000 Telecom Italia....................................................................... 367,633
-----------
653,330
-----------
JAPAN--25.7%
------------
6,000 Asahi Diamond Industries Company Ltd................................................. 62,184
21,000 Canon, Incorporated.................................................................. 402,090
8,000 Daifuku Company Limited.............................................................. 98,371
37 DDI Corporation...................................................................... 277,853
33,000 Hitachi Seisakusho Ltd............................................................... 292,741
16,000 Hitachi Metals....................................................................... 131,676
6,000 Ito-Yokado Company, Ltd.............................................................. 299,328
40,000 Itochu Corporation................................................................... 241,360
34,000 Kamigumi Company Limited............................................................. 262,790
4,000 Komori Corporation................................................................... 89,939
5,000 Kyocera Corporation.................................................................. 329,805
2,000 Mabuchi Motor Company Ltd............................................................ 101,884
10,000 Marui Company Limited................................................................ 185,323
47,000 Mitsubishi Heavy Industries.......................................................... 361,205
17,000 Mitsui Fudosan Company Ltd........................................................... 210,531
29,000 Nippon Express Company Ltd........................................................... 235,607
12,000 Nitto Denko Corporation.............................................................. 178,121
19,000 Nomura Securities Company Ltd........................................................ 313,732
</TABLE>
The accompanying notes are an integral part of the financial statements.
6 A N N U A L R E P O R T
<PAGE> 7
EAGLE INTERNATIONAL EQUITY PORTFOLIO
INVESTMENT PORTFOLIO
OCTOBER 31, 1996
(CONTINUED)
<TABLE>
<CAPTION>
SHARES MARKET
------ VALUE
-----------
<S> <C> <C>
JAPAN--(CONTINUED)
----------------
1,000 Riso Kagaku Corporation.............................................................. $ 71,231
6,000 Rohm Company Ltd..................................................................... 355,716
4,000 Shimachu Company Limited............................................................. 109,964
18,000 Shin-Etsu Chemical Company Ltd....................................................... 309,224
5,000 Sony Corporation..................................................................... 299,943
18,000 Sumitomo Electric Industries Ltd..................................................... 237,144
11,000 Sumitomo Forestry Company Ltd........................................................ 155,549
27,000 Sumitomo Trust & Banking............................................................. 298,801
6,000 Taisho Pharmaceutical Company........................................................ 119,099
25,000 Tokio Marine & Fire Insurance........................................................ 274,473
15,000 Toyota Motor Corporation............................................................. 354,398
-----------
6,660,082
-----------
MALAYSIA--3.2%
-------------
42,000 AMMB Holdings Limited................................................................ 284,266
14,000 Edaran Otomobile Nasional............................................................ 130,774
25,000 Resorts World Berhad................................................................. 143,479
34,000 United Engineers (Malaysia).......................................................... 269,148
-----------
827,667
-----------
MEXICO--2.0%
------------
14,300 Cemex................................................................................ 51,418
39,000 Cifra SA DE CV....................................................................... 49,881
13,000 Corporate Industrial ALFA............................................................ 54,184
500 Corporate Industrial San Luis SA, ADR................................................ 15,875
4,000 Empresas ICA Sociedad Control, ADR................................................... 52,000
35,000 Grupo Financiero Banamex, "B" Shares................................................. 74,028
1,000 Kimberly Clark de Mexico, ADR........................................................ 37,750
18,000 San Luis Corporation SA.............................................................. 90,252
7,500 Tubos de Acero de Mexico, ADR........................................................ 83,437
-----------
508,825
-----------
NETHERLANDS--2.8%
-----------------
21,800 Elsevier NV.......................................................................... 362,327
11,200 Internationale Nederlanden Group (ING)............................................... 349,195
-----------
711,522
-----------
PERU--0.2%
----------
2,400 Telefonica Del Peru, ADR............................................................. 49,500
-----------
PHILIPPINES--0.7%
----------------
3,200 Philippine Long Distance Telephone Co., ADR.......................................... 191,600
-----------
SINGAPORE--2.0%
--------------
23,000 Development Bank of Singapore........................................................ 275,967
41,357 Jardine Matheson & Company Ltd....................................................... 233,667
-----------
509,634
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
7 A N N U A L R E P O R T
<PAGE> 8
EAGLE INTERNATIONAL EQUITY PORTFOLIO
INVESTMENT PORTFOLIO
OCTOBER 31, 1996
(CONTINUED)
<TABLE>
<CAPTION>
SHARES MARKET
------ VALUE
-----------
<S> <C> <C>
SOUTH AFRICA--0.2%
-----------------
22,000 Safmarine & Rennie Holdings Ltd...................................................... $ 55,791
-----------
SOUTH KOREA--0.1%
-----------------
5,000 Korea Preferred Fund................................................................. 32,000
-----------
SPAIN--1.7%
-----------
5,445 Banco de Santander S.A............................................................... 279,515
8,500 Cent. Commerciales Continente........................................................ 172,538
-----------
452,053
-----------
SWEDEN--1.6%
-------------
9,400 LM Ericsson Telephone................................................................ 254,452
12,500 Stora Kopparbergs Bergslags.......................................................... 163,481
-----------
417,933
-----------
SWITZERLAND--5.8%
----------------
330 Ciba-Geigy AG........................................................................ 406,495
310 Nestle SA............................................................................ 336,733
60 Roche Holdings AG.................................................................... 453,797
1,150 Zurich Versicherun................................................................... 314,795
-----------
1,511,820
-----------
TAIWAN--1.5%
------------
31 Taipei Fund US....................................................................... 263,314
10,800 Taiwan Opportunities Fund Ltd........................................................ 113,616
-----------
376,930
-----------
UK--13.0%
----------
22,000 British Telecommunications PLC....................................................... 127,474
24,000 Cable & Wireless PLC................................................................. 190,625
14,000 East Midlands Electricity PLC........................................................ 124,186
11,000 GKN PLC.............................................................................. 206,787
14,500 Glaxo Wellcome PLC................................................................... 227,743
13,200 Granada Group PLC.................................................................... 190,137
65,000 Ladbroke Group PLC................................................................... 211,060
50,000 LASMO, PLC........................................................................... 173,340
37,000 Lloyds TSB Group..................................................................... 234,561
15,000 McKechnie PLC........................................................................ 140,381
61,000 NFC PLC.............................................................................. 190,625
21,000 Reckitt & Colman..................................................................... 243,359
24,558 Safeway PLC.......................................................................... 145,693
13,000 Shell Transport & Trading Company.................................................... 213,070
</TABLE>
The accompanying notes are an integral part of the financial statements.
8 A N N U A L R E P O R T
<PAGE> 9
EAGLE INTERNATIONAL EQUITY PORTFOLIO
INVESTMENT PORTFOLIO
OCTOBER 31, 1996
(CONTINUED)
<TABLE>
<CAPTION>
SHARES MARKET
------ VALUE
-----------
<S> <C> <C>
9,731 Smiths Industries PLC................................................................ $ 129,873
11,000 Unilever PLC......................................................................... 231,136
28,000 Wassall PLC.......................................................................... 136,263
32,000 Wolseley PLC......................................................................... 248,437
-----------
3,364,750
-----------
Total Common Stocks (cost $23,440,638)................................................................. 23,995,837
-----------
BONDS--1.0%(A)
- -------------
JAPAN--1.0%
-------------
$236,000 MBL International Finance (Bermuda), 3.0%............................................ 261,370
-----------
Total Bonds (cost $264,860)............................................................................ 261,370
-----------
REPURCHASE AGREEMENT--8.0%(A)
- -----------------------------
Repurchase agreement with State Street Bank and Trust Company, dated October 31, 1996, @ 5.45%, to be
repurchased at $2,078,315 on November 1, 1996, (collateralized by $2,098,090 United States Treasury
Notes, 8.5%, due February 15, 2020 with a market value of $2,129,528 including interest) (cost
$2,078,000)............................................................................................ $ 2,078,000
-----------
TOTAL INVESTMENT PORTFOLIO (cost $25,783,498)(b) 101.6%(a)............................................. 26,335,207
OTHER ASSETS AND LIABILITIES, (1.6%)(a)................................................................ (420,921)
-----------
NET ASSETS, 100%....................................................................................... $25,914,286
===========
</TABLE>
(a) Percentages indicated are based on net assets.
(b) The aggregate identified cost for federal income tax purposes is
$25,847,137. Market value includes net unrealized appreciation of $488,070
which consists of aggregate gross unrealized appreciation for all securities
in which there is an excess of market value over tax cost of $1,376,957 and
aggregate gross unrealized depreciation for all securities in which there is
an excess of tax cost over market value of $888,887.
ADR -- American Depository Receipt
GDS -- Global Depository Shares
The accompanying notes are an integral part of the financial statements.
9 A N N U A L R E P O R T
<PAGE> 10
EAGLE INTERNATIONAL EQUITY PORTFOLIO
INVESTMENT PORTFOLIO
OCTOBER 31, 1996
(CONTINUED)
<TABLE>
<CAPTION>
MARKET % OF NET
INDUSTRY DIVERSIFICATION VALUE ASSETS
- ---------------------------------------------------------------------------------------- ----------- --------
<S> <C> <C>
Common Stocks
Automobiles........................................................................... $ 354,398 1.4%
Banking............................................................................... 844,528 3.3%
Basic Industries...................................................................... 2,212,971 8.5%
Building Materials and Merchandise.................................................... 248,437 1.0%
Capital Goods......................................................................... 2,776,325 10.7%
Chemicals............................................................................. 309,217 1.2%
Computers and Office Equipment........................................................ 277,854 1.1%
Construction and Building Materials................................................... 155,549 0.6%
Consumer Goods and Services........................................................... 2,165,731 8.4%
Diversified Holding Companies......................................................... 541,250 2.1%
Diversified Industrials............................................................... 136,263 0.5%
Electricity........................................................................... 124,186 0.5%
Electronics and Control Equipment..................................................... 2,268,675 8.8%
Energy................................................................................ 773,104 3.0%
Engineering........................................................................... 477,041 1.8%
Fabricated Metal Products............................................................. 131,676 0.5%
Finance, Insurance and Real Estate.................................................... 3,479,550 13.4%
Financial Institutions and Services................................................... 588,204 2.3%
Food Manufacturers.................................................................... 231,136 0.9%
Health and Personal Care.............................................................. 119,099 0.5%
Heavy Engineering and Shipbuilding.................................................... 361,205 1.4%
Household Goods....................................................................... 243,359 0.9%
Leisure and Hotels.................................................................... 401,196 1.6%
Machinery and Engineering Services.................................................... 250,494 0.9%
Oil -- Exploration and Production..................................................... 173,340 0.7%
Oil -- Integrated..................................................................... 213,070 0.8%
Pharmaceuticals....................................................................... 681,540 2.6%
Real Estate........................................................................... 493,367 1.9%
Retail Trade.......................................................................... 740,309 2.9%
Telecommunications.................................................................... 318,099 1.2%
Transportation and Storage............................................................ 799,356 3.0%
Utilities............................................................................. 863,952 3.3%
Wholesale Trade....................................................................... 241,356 0.9%
Bonds................................................................................... 261,370 1.0%
Repurchase Agreement.................................................................... 2,078,000 8.0%
----------- --------
Total Investments....................................................................... $26,335,207 101.6%
=========== ========
</TABLE>
OPEN FORWARD FOREIGN CURRENCY CONTRACTS
<TABLE>
<CAPTION>
CONTRACT IN DELIVERY GROSS UNREALIZED
TO DELIVER EXCHANGE FOR DATE APPRECIATION
- -------------------- ------------------ -------- ---------------------------
<S> <C> <C> <C> <C> <C>
JPY 115,050,146 USD 1,081,400 11/14/96 $ 68,988
JPY 124,049,200 USD 1,165,000 11/14/96 73,398
--------
Net Unrealized Appreciation $ 142,386
=========================
</TABLE>
- ---------------
JPY -- Japanese Yen
USD -- United States Dollar
The accompanying notes are an integral part of the financial statements.
10 A N N U A L R E P O R T
<PAGE> 11
EAGLE INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1996
<TABLE>
<S> <C> <C>
Assets
Investments, at market value (identified cost $25,783,498) (Note 1)....................... $26,335,207
Foreign currency (cost $21,900)........................................................... 21,884
Cash...................................................................................... 108
Receivables:
Fund shares sold........................................................................ 62,631
Dividends and interest.................................................................. 56,423
Foreign taxes recoverable............................................................... 16,653
Unrealized appreciation on forward foreign currency contracts........................... 142,386
Deferred organizational expenses (Note 1)................................................. 36,400
Deferred state registration expenses (Note 1)............................................. 9,303
Prepaid insurance......................................................................... 1,214
-----------
Total assets...................................................................... 26,682,209
Liabilities
Payables (Note 4):
Investments purchased................................................................... $626,669
Due to manager.......................................................................... 55,043
Other accrued expenses.................................................................. 52,357
Accrued distribution fee................................................................ 19,712
Fund shares redeemed.................................................................... 7,392
Tax withholding payable................................................................. 6,750
--------
Total liabilities................................................................. 767,923
-----------
Net assets, at market value............................................................... $25,914,286
===========
Net Assets
Net assets consist of:
Paid-in capital......................................................................... 24,823,156
Undistributed net investment income (Note 1)............................................ 230,207
Accumulated net realized gain (Note 1).................................................. 166,663
Net unrealized appreciation on investments and other assets and liabilities denominated
in foreign currencies................................................................. 694,260
-----------
Net assets, at market value............................................................... $25,914,286
===========
Eagle Class Shares
Net asset value, redemption and offering price per share ($21,607,683 divided by 976,144
shares of beneficial interest outstanding, no par value) (Notes 1 and 2)................ $22.14
Class A Shares
Net asset value and redemption price per share ($3,111,600 divided by 139,843 shares of
beneficial interest outstanding, no par value) (Notes 1 and 2).......................... $22.25
Maximum offering price per share (100/95.25 of $22.25).................................... $23.36
Class C Shares
Net asset value and offering price per share ($1,195,003 divided by 54,024 shares of
beneficial interest outstanding, no par value) (Notes 1 and 2).......................... $22.12
</TABLE>
The accompanying notes are an integral part of the financial statements.
11 A N N U A L R E P O R T
<PAGE> 12
EAGLE INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 1996
<TABLE>
<S> <C> <C>
Investment Income
Income:
Dividends (net of $60,361 foreign withholding taxes)................................................. $ 404,020
Interest (net of recovery of $26 foreign withholding taxes).......................................... 81,403
----------
Total income................................................................................... 485,423
Expenses (Notes 1 and 4):
Management fee....................................................................................... $189,777
Distribution fee (Eagle Shares)...................................................................... 168,639
Distribution fee (Class A Shares).................................................................... 3,934
Distribution fee (Class C Shares).................................................................... 5,404
Custodian/Fund accounting fees....................................................................... 112,709
Amortization of state registration expenses.......................................................... 42,326
Professional fees.................................................................................... 38,203
Reports to shareholders.............................................................................. 25,876
Amortization of organization expenses................................................................ 10,400
Shareholder servicing fees........................................................................... 7,745
Federal registration fees............................................................................ 5,977
Trustees' fees and expenses.......................................................................... 3,748
Insurance............................................................................................ 1,384
Other................................................................................................ 2,636
--------
Total expenses before fee waiver............................................................... 618,758
Fees waived by Manager......................................................................... (134,735) 484,023
-------- ----------
Net investment income................................................................................. 1,400
----------
Realized and Unrealized Gain (Loss) on Investments
Net realized gain from investment transactions........................................................ 176,463
Net realized gains from foreign currency transactions................................................. 236,722
Net increase in unrealized appreciation of investments during the year................................ 589,606
Net increase in unrealized appreciation from foreign currency during the year......................... 142,373
----------
Net gain on investments........................................................................ 1,145,164
----------
Net increase in net assets resulting from operations.................................................. $1,146,564
============
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 1, 1995
FOR THE YEAR (COMMENCEMENT OF
ENDED OCTOBER OPERATIONS) TO
31, 1996 OCTOBER 31, 1995
---------------- ----------------
<S> <C> <C>
Increase in net assets:
Operations:
Net investment income (loss)......................................................... $ 1,400 $ (10,686)
Net realized gains from investment transactions...................................... 176,463 253,531
Net realized gain from foreign currency transactions................................. 236,722 1,440
Net increase (decrease) in unrealized appreciation of investments during the
period............................................................................. 589,606 (37,913)
Net increase in unrealized appreciation from foreign currency during the period...... 142,373 194
---------------- ----------------
Net increase in net assets resulting from operations................................. 1,146,564 206,566
Distribution to shareholders from:
Net investment income Eagle Class Shares, ($.01 per share)........................... (7,915) --
Net realized gains Eagle Class Shares, ($.47 per share).............................. (254,085) --
Increase in net assets from Fund share transactions (Note 2).......................... 15,059,163 9,762,993
---------------- ----------------
Increase in net assets................................................................ 15,943,727 9,969,559
Net assets, beginning of period....................................................... 9,970,559 1,000
---------------- ----------------
Net assets, end of period (Including undistributed net investment income of $230,207
as of October 31, 1996).............................................................. $ 25,914,286 $9,970,559
===================== =====================
</TABLE>
The accompanying notes are an integral part of the financial statements.
12 A N N U A L R E P O R T
<PAGE> 13
EAGLE INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
The following table includes selected data for a share outstanding throughout
the period and other performance information derived from the financial
statements.
<TABLE>
<CAPTION>
FOR THE PERIOD ENDED
OCTOBER 31, 1996*
----------------------------------------------
CLASS A CLASS C EAGLE SHARES
SHARES++ SHARES++ EAGLE SHARES 1995+*
-------------- -------------- ------------ ------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF THE PERIOD........................ $21.11 $21.11 $20.79 $ 20.00
------ ------ ------ ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(a)............................... 0.10 (0.07) (0.01) (.03)
Net realized and unrealized gain on investments............... 1.04 1.08 1.84 0.82
------ ------ ------ ------------
Total from investment operations................................ 1.14 1.01 1.83 0.79
------ ------ ------ ------------
LESS DISTRIBUTIONS:
Dividends from net investment income.......................... -- -- (0.01) --
Distributions from net realized gain on investments........... -- -- (0.47) --
------ ------ ------ ------------
Total Distributions............................................. -- -- (0.48) --
------ ------ ------ ------------
NET ASSET VALUE, END OF THE PERIOD.............................. $22.25 $22.12 $22.14 $ 20.79
============ ============ ========== ==========
TOTAL RETURN (%)(C)............................................. 5.40(d) 4.78(d) 8.93 3.95
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses, net, to average daily net
assets(a)................................................... 1.97%(b) 2.72% (b) 2.60% 2.60% (b)
Ratio of net investment income (loss) to average daily net
assets...................................................... 0.44%(b) (0.32%)(b) (0.02%) (0.33%)(b)
Portfolio turnover rate(c).................................... 59% 59% 59% 61% (b)
Average commission rate on portfolio transactions............. $.0289 $.0289 $.0289 --
Net assets, end of period ($ millions)........................ $ 3 $ 1 $ 22 $ 10
</TABLE>
- ---------------
* Per share amounts have been calculated using the monthly average share
method.
+ For the period May 1, 1995 (commencement of operations) to October 31, 1995.
++ For the period December 27, 1995 (Commencement of Class A and Class C
Shares) to October 31, 1996.
(a) Excludes management fees waived and expenses reimbursed by the Manager in
the amount of $.16 and $.17 per Eagle Share for each of the two periods
ended October 31, 1996. The operating expense ratios including such items
would have been 3.31% and 5.09% (annualized) for Eagle Shares for the
periods ended October 31, 1996 and 1995, respectively. Excludes management
fees waived by the Manager in the amount of $.16 per Class A Share for the
period ended October 31, 1996. The operating expense ratio including such
items would have been 2.69% (annualized) for Class A Shares for the period
ended October 31, 1996. Excludes management fees waived by the Manager in
the amount of $.16 per Class C Share for the period ended October 31, 1996.
The operating expense ratio including such items would have been 3.44%
(annualized) for Class C Shares for the period ended October 31, 1996.
(b) Annualized.
(c) Not annualized.
(d) Calculated without the imposition of front-end or contingent deferred sales
charges.
The accompanying notes are an integral part of the financial statements.
13 A N N U A L R E P O R T
<PAGE> 14
EAGLE INTERNATIONAL EQUITY PORTFOLIO
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 consisting of four separate investment
Portfolios, the Eagle International Equity Portfolio (the "Fund"), the
Small Cap Stock Fund, the Value Equity Fund and the Growth Equity Fund.
The Fund primarily seeks capital appreciation principally through
investment in an international portfolio of equity securities.
The Fund currently issues Eagle Class, Class A and Class C Shares. The
Eagle Class of shares are subject to certain minimum investment
requirements and are sold without any sales charge. Class A Shares are
sold subject to a maximum sales charge of 4.75% of the amount invested
payable at the time of purchase. Class C Shares are sold subject to a
contingent deferred sales charge of 1% of the lower of net asset value
or purchase price payable upon any redemptions within one year after
purchase. The financial statements for the Small Cap Fund, Growth Equity
Fund and Value Equity Fund are presented separately. The preparation of
financial statements in accordance with generally accepted accounting
principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ
from those estimates. The following is a summary of significant
accounting policies:
Security Valuation: The Fund values investment securities at market value
based on the last quoted sales price as reported by the principal
securities exchange on which the security is traded. If no sale is
reported, the last bid price is used and in the absence of a market
quote, securities are valued using such methods as the Board of Trustees
believes would reflect fair market value. Securities that are quoted in
a foreign currency will be valued daily in U.S. dollars at the foreign
currency exchange rates prevailing at the time the Fund calculates its
daily net asset value per share. Although the Fund values its assets in
U.S. dollars on a daily basis, it does not intend to convert holdings of
foreign currencies into U.S. dollars on a daily basis. Short term
investments having a maturity of 60 days or less are valued at cost
which, when combined with accrued interest included in interest
receivable or discount earned, approximates market.
Foreign Currency Transactions: The books and records of the Fund are
maintained in U.S. dollars. Foreign currency transactions are translated
into U.S. dollars on the following basis: (i) market value of investment
securities, other assets and other liabilities at the daily rates of
exchange, and (ii) purchases and sales of investment securities,
dividend and interest income and certain expenses at the rates of
exchange prevailing on the respective dates of such transactions. The
Fund does not isolate that portion of gains and losses on investments
which is due to change in foreign exchange rates from that which is due
to changes in market prices of the investments. Such fluctuations are
included with the net realized and unrealized gains and losses from
investments. Net realized gain (loss) and unrealized appreciation
(depreciation) from currency transactions include gains and losses
between trade and settlement date on securities transactions, gains and
losses arising from the sales of foreign currency and gains and losses
between the ex and payment dates on dividends, interest, and foreign
withholding taxes.
Forward Foreign Currency Contracts: The Fund may enter into forward foreign
currency contracts which are valued daily at the appropriate exchange
rates. The resultant unrealized exchange gains and losses are included
in the Statement of Operations as unrealized foreign currencies gain or
loss. The Fund records realized gains or losses on delivery of the
currency or at the time the forward contract is extinguished
(compensated) by entering into a closing transaction prior to delivery.
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.
14 A N N U A L R E P O R T
<PAGE> 15
EAGLE INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
Organization Expenses: Expenses incurred in connection with the formation
of the Fund were deferred and are being amortized on a straight-line
basis over 60 months from the date of commencement of operations.
Capital Accounts: The Fund reports the undistributed net investment income
(accumulated net investment loss) and accumulated net realized gain
(loss) accounts on a basis approximating amounts available for future
tax distributions (or to offset future taxable realized gains when a
capital loss carryforward is available). Accordingly, the Fund may
periodically make reclassifications among certain capital accounts
without impacting the net asset value of the Fund.
Other: Investment security transactions are accounted for on a trade date
plus one basis. Dividend income and distributions to shareholders are
recorded on the ex-dividend date. Interest income is recorded on the
accrual basis. Expenses of the Fund are allocated to each class of
shares based upon their relative percentage of current net assets of
dividend eligible shares. All expenses that are directly attributable to
a specific class of shares, such as distribution and shareholder
servicing fees, are allocated to that class.
Note 2: FUND SHARES. At October 31, 1996, there was an unlimited number of
shares of beneficial interest of no par value authorized.
Transactions in Eagle Shares of the Fund during the year ended October 31,
1996 and from May 1, 1995 (commencement of operations) to October 31,
1995 were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD MAY 1,
1995 (COMMENCEMENT OF
FOR THE YEAR ENDED OPERATIONS) TO OCTOBER
OCTOBER 31, 1996 31, 1995
----------------------- -----------------------
EAGLE SHARES SHARES AMOUNT SHARES AMOUNT
----------------------------------------------------------- ------- ----------- ------- -----------
<S> <C> <C> <C> <C>
Shares sold................................................ 534,815 $11,648,653 493,157 $10,046,244
Shares issued on reinvestment of distributions............. 11,917 251,561 0 0
Shares redeemed............................................ (50,151) (1,114,981) (13,644) (283,251)
------- ----------- ------- -----------
Net increase............................................... 496,581 $10,785,233 479,513 $ 9,762,993
=========== ===========
Shares outstanding:
Beginning of period...................................... 479,563 50
------- -------
End of period............................................ 976,144 479,563
======= =======
</TABLE>
Transactions in Class A Shares of the Fund from December 27, 1995
(commencement of Class A Shares) to October 31, 1996 were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD DECEMBER
27, 1995 (COMMENCEMENT OF
CLASS A SHARES) TO OCTOBER
31, 1996
--------------------------
CLASS A SHARES SHARES AMOUNT
--------------------------------------------------------------------------------- ------- ----------
<S> <C> <C>
Shares sold...................................................................... 159,739 $3,524,406
Shares issued on reinvestment of distributions................................... 0 0
Shares redeemed.................................................................. (19,896) (444,547)
------- ----------
Net increase..................................................................... 139,843 $3,079,859
==========
Shares outstanding:
Beginning of period............................................................ 0
-------
End of period.................................................................. 139,843
=======
</TABLE>
15 A N N U A L R E P O R T
<PAGE> 16
EAGLE INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
Transactions in Class C Shares of the Fund from December 27, 1995
(commencement of Class C Shares) to October 31, 1996 were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD DECEMBER
27, 1995 (COMMENCEMENT OF
CLASS C SHARES) TO
OCTOBER 31, 1996
-------------------------
CLASS C SHARES SHARES AMOUNT
------------------------------------------------------------------------------------- ------ ----------
<S> <C> <C>
Shares sold.......................................................................... 56,036 $1,238,468
Shares issued on reinvestment of distributions....................................... 0 0
Shares redeemed...................................................................... (2,012) (44,397)
------ ----------
Net increase......................................................................... 54,024 $1,194,071
=========
Shares outstanding:
Beginning of period................................................................. 0
------
End of period....................................................................... 54,024
======
</TABLE>
Note 3: PURCHASES AND SALES OF SECURITIES. For the year ended October 31, 1996,
purchases and sales of investment securities (excluding repurchase
agreements and short term obligations) aggregated $24,151,131 and
$10,225,979, respectively.
Note 4: MANAGEMENT, SUBADVISORY, DISTRIBUTION, SHAREHOLDER SERVICING AGENT AND
TRUSTEES' FEES. Under the Fund's Investment Advisory and Administration
Agreement with Eagle Asset Management, Inc. ( the "Manager"), the Fund
agrees to pay to the Manager a fee equal to an annualized rate of 1.00%
of the Fund's average daily net assets, computed daily and payable
monthly. The agreement also provides for a reduction in such fees in any
year to the extent that operating expenses of the Fund exceed applicable
state expense limitations. Currently, the Manager has voluntarily agreed
to waive its fee to the extent that Fund operating expenses exceed
2.60%, 1.97% and 2.72% on an annual basis of the Fund's average daily
net assets for Eagle Class Shares, Class A and Class C Shares,
respectively. Management fees waived totalled $134,735 for the year
ended October 31, 1996. If total Fund expenses fall below the expense
limitation agreed to by the Manager before the end of the year ending
October 31, 1998, the Fund may be required to pay the Manager a portion
or all of the waived management fee. In addition, the Fund may be
required to pay the Manager a portion or all of the management fees
waived of $32,303 for the year ended October 31, 1995, if total Fund
expenses fall below the annual expense limitations before the end of the
year ending October 31, 1997.
The Manager has entered into an agreement with Martin Currie, Inc., a New
York Corporation, (the "Subadviser") to provide to the Fund investment
advice, portfolio management services including the placement of
brokerage orders, and certain compliance and other services for a fee
payable by the Manager equal to .50% of average daily net assets on the
first $100 million of assets and .40% thereafter without regard to any
reduction due to the imposition of expense limitations.
Heritage Asset Management, Inc. ("Heritage"), an affiliate of Eagle, is the
Dividend Paying and Shareholder Servicing Agent for the Fund. Heritage
also may provide certain administrative services for the Fund and may
receive a fee from Eagle for performing these administrative services.
Raymond James & Associates, Inc. (the "Distributor") has advised the Fund
that it received $47,206 in front end sales charges and $262 in
contingent deferred sales charges for the twelve months ended October
31, 1996. From these fees, the Distributor paid commissions to
salespersons and incurred other distribution costs.
Pursuant to the Class A Distribution Plan adopted in accordance with Rule
12b-1 of the Investment Company Act of 1940, at amended, the Fund is
authorized to pay Raymond James & Associates, Inc. (the "Distributor") a
fee, equal to .25% of the average daily net assets for Class A Shares.
Under the Eagle Class and Class C Distribution Plans the Fund may pay
the Distributor a fee equal to 1.00% of the average daily net assets for
each Class. The Distributor, on Class C Shares, may retain the first 12
months distribution fee for reimbursement of amounts paid to the
broker/dealer at the time of purchase. Such fees are accrued daily and
payable monthly. The Manager, Heritage and Distributor, are all
wholly-owned subsidiaries of Raymond James Financial, Inc.
Trustees of the Trust also serve as Trustees for Heritage Cash Trust,
Heritage Capital Appreciation Trust, Heritage Income-Growth Trust,
Heritage Income Trust and Heritage U.S. Government Income Fund,
investment companies that are advised by Heritage (collectively referred
to as the Heritage funds). Each Trustee of the Heritage funds that is
not an interested person of Heritage receives an annual fee of
16 A N N U A L R E P O R T
<PAGE> 17
EAGLE INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
$8,000, an additional fee of $2,000 for each combined quarterly meeting of
the Heritage funds attended and $1,000 for each special Trustees meeting
attended. Trustees' fees and expenses are paid equally by each of the
Heritage funds.
Note 5: FEDERAL INCOME TAXES. For the year ended October 31, 1996, to reflect
reclassifications arising from permanent book/tax differences primarily
attributable to foreign currency gains, the Fund credited undistributed
net investment income and debited accumulated net realized gain
$236,722.
Note 6: FINANCIAL INVESTMENTS WITH OFF-BALANCE SHEET RISK: The Fund may enter
into forward foreign currency contracts ("forward contracts") to
facilitate settlement of foreign currency denominated portfolio
transactions or to manage its foreign currency exposure or to sell for a
fixed amount of U.S. dollars or other currency, the amount of foreign
currency approximating the value of some or all of its holdings
denominated in such foreign currency or an amount of foreign currency
other than the currency in which the securities to be hedged are
denominated approximating the value of some or all of its holdings to be
hedged. Additionally, when the Subadviser anticipates purchasing
securities at some time in the future, the Fund may enter into a forward
contract to purchase an amount of currency equal to some or all of the
value of the anticipated purchase for a fixed amount of U.S. dollars or
other currency.
At October 31, 1996, the Fund had outstanding forward foreign currency
exchange contracts ("forward contracts") in order to hedge against
changes in future foreign exchange rates and enhance return. Forward
contracts involve elements of market risk in excess of the amount
reflected in the Statement of Assets and Liabilities. The Fund bears the
risk of an unfavorable change in the foreign exchange rate underlying
the forward contract. Risks may also arise upon entering into these
contracts from the potential inability of these parties to meet the
terms of their contracts.
17 A N N U A L R E P O R T
<PAGE> 18
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
Eagle International Equity Portfolio
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Eagle International Equity
Portfolio (the "Fund") at October 31, 1996, and the results of its operations,
the changes in its net assets and the financial highlights of the Eagle Shares
for the year then ended and the financial highlights for Class A and Class C
Shares for the period December 27, 1995 (commencement of operations) to October
31, 1996, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit, which included confirmation of securities at October
31, 1996 by correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provides a reasonable basis for the opinion expressed above. The
financial statements of the Fund for the year ended October 31, 1995, including
the financial highlights for each of the periods indicated, were audited by
other independent accountants whose report dated November 29, 1995 expressed an
unqualified opinion on those statements.
/s/ Price Waterhouse LLP
- ------------------------
PRICE WATERHOUSE LLP
Tampa, Florida
December 16, 1996
18 A N N U A L R E P O R T
<PAGE> 19
HERITAGE SERIES TRUST-EAGLE INTERNATIONAL EQUITY PORTFOLIO is a member of the
Heritage family of mutual funds. Other investment alternatives available to you
from Heritage include:
[ ] HERITAGE CASH TRUST
MONEY MARKET FUND
MUNICIPAL MONEY MARKET FUND
[ ] HERITAGE CAPITAL APPRECIATION TRUST
[ ] HERITAGE INCOME-GROWTH TRUST
[ ] HERITAGE INCOME TRUST
HIGH YIELD BOND FUND
INTERMEDIATE GOVERNMENT FUND
[ ] HERITAGE SERIES TRUST
GROWTH EQUITY FUND
SMALL CAP STOCK FUND
VALUE EQUITY FUND
[ ] HERITAGE U.S. GOVERNMENT INCOME FUND
(A CLOSED-END FUND THAT TRADES ON THE
NEW YORK STOCK EXCHANGE)
We are pleased that many of you are also investors in these funds. For
information and a prospectus for any of these mutual funds, please contact your
account executive. Please read the Prospectus carefully before you invest in any
of the funds.
<PAGE> 20
LOGO
EAGLE INTERNATIONAL EQUITY
PORTFOLIO
- -----------------------------------------------------
A MUTUAL FUND
- -----------------------------------------------------
SEEKING LONG-TERM
- -----------------------------------------------------
CAPITAL APPRECIATION
- -----------------------------------------------------
- -----------------------------------------------------
- -----------------------------------------------------
- -----------------------------------------------------
ANNUAL REPORT
and Investment Performance
Review for the Year Ended
OCTOBER 31, 1996
A member of the
Heritage Family of Mutual Funds(])
Heritage Series Trust-Eagle International Equity Portfolio
P.O. Box 33022
St. Petersburg, FL 33733
- -------------------------------------------
Address Change Requested
This report is for the information of shareholders of
Heritage Series Trust-Eagle International Equity Portfolio. It may also be used
as sales
literature when preceded or accompanied by a prospectus.
3M 12/96 (LOGO)Printed on recycled paper.
