HERITAGE
SERIES
TRUST
[GRAPHIC OMITTED]
FROM OUR FAMILY TO YOURS: THE INTELLIGENT CREATION OF WEALTH
AGGRESSIVE GROWTH FUND
EAGLE INTERNATIONAL EQUITY PORTFOLIO
GROWTH EQUITY FUND
MID CAP STOCK FUND
SMALL CAP STOCK FUND
TECHNOLOGY FUND
VALUE EQUITY FUND
ANNUAL REPORT
and Investment Performance
Review for the Year Ended
October 31, 2000
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HERITAGE SERIES TRUST
ANNUAL REPORT
TABLE OF CONTENTS
PRESIDENT'S LETTER ....................................................... 1
PORTFOLIO COMMENTARY
AGGRESSIVE GROWTH FUND
Portfolio Management Letter ........................................ 3
Performance Graph .................................................. 4
EAGLE INTERNATIONAL EQUITY PORTFOLIO
Market Commentary .................................................. 5
Performance Graphs ................................................. 7
GROWTH EQUITY FUND
Portfolio Management Letter ........................................ 9
Performance Graphs ................................................. 12
MID CAP STOCK FUND
Portfolio Management Letter ........................................ 13
Performance Graphs ................................................. 15
SMALL CAP STOCK FUND
Portfolio Management Letters ....................................... 16
Performance Graphs ................................................. 18
TECHNOLOGY FUND
Portfolio Management Letter ........................................ 20
Performance Graph .................................................. 23
VALUE EQUITY FUND
Portfolio Management Letter ........................................ 24
Performance Graphs ................................................. 26
INVESTMENT PORTFOLIOS .................................................... 28
STATEMENTS OF ASSETS AND LIABILITIES ..................................... 45
STATEMENTS OF OPERATIONS ................................................. 47
STATEMENTS OF CHANGES IN NET ASSETS ...................................... 48
FINANCIAL HIGHLIGHTS ..................................................... 51
NOTES TO FINANCIAL STATEMENTS ............................................ 58
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ....................... 68
<PAGE>
November 27, 2000
Dear Valued Shareholder:
I am pleased to provide you with the annual report for the seven
portfolios (the "Funds") of the Heritage Series Trust for the 1-year period
ended October 31, 2000. The investment and financial information for each Fund
is provided in this report. Because many of you have investments in more than
one Fund in our Series Trust, this combined report allows us to provide you
with the relevant information for each of your Funds in one easy-reference
format.
For the 1-year period ended October 31, 2000, performance* for the Class A
Shares of each Fund was as follows: Aggressive Growth Fund +44.9%; Eagle
International Equity Portfolio -1.3%; Growth Equity Fund +31.0%; Mid Cap Stock
Fund +42.3%; Small Cap Stock Fund +25.7%; Technology Fund +22.0%(a); and Value
Equity Fund +15.1%.
The chart below shows the Fund's Class A Shares performance** which
reflect the current maximum front-end sales load for the 1-, 3-, 5-year and
life of the fund period as of October 31, 2000.
<TABLE>
<CAPTION>
HERITAGE SERIES TRUST
AVERAGE ANNUAL TOTAL RETURN (PERIODS ENDED 10/31/00)**
------------------------------------------------------------
CLASS A SHARES 1-YEAR 3-YEAR 5-YEAR LIFE OF FUND(b)
-------------- ------------ ----------- ------------ ----------------
<S> <C> <C> <C> <C>
Aggressive Growth Fund +37.99% -- -- +37.30%
Eagle International Equity Portfolio -6.00% +8.55% -- +8.59%
Growth Equity Fund +24.82% +32.21% -- +31.18%
Mid Cap Stock Fund +35.54% -- -- +16.32%
Small Cap Stock Fund +19.71% -0.98% +12.06% +12.91%
Technology Fund -- -- -- +16.18%
Value Equity Fund +9.66% +1.98% +9.74% +12.64%
</TABLE>
Although we are pleased with the absolute performance of the Funds, we
feel it is important to caution investors that double digit returns should not
be viewed as typical.
Portfolio manager commentaries for each of the seven Funds included in the
Heritage Series Trust follow. These detailed commentaries provide information
about the individual performance of these Funds, synopses of market events, and
mention of specific sectors or holdings that may have significantly impacted
fund performance during this annual reporting period. We hope that you will
find the portfolio managers' reviews and outlooks helpful in placing your
Fund(s) performance into context within the market place as a whole. Investment
portfolios and other important financial information for all of the Funds
follow the managers' commentaries.
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* These returns are calculated without the imposition of either front-end or
contingent deferred sales charges.
** These performance numbers reflect the current maximum front-end sales load
for Class A Shares of 4.75%. Returns are annualized after the effects of
sales charges and do include reinvestment of dividends. Past performance
is no guarantee of future results.
(a) Returns shown for the Technology Fund are from inception, November 18, 1999
to October 31, 2000.
(b) The inception dates for the Funds' Class A Shares are as follows:
Aggressive Growth Fund, 08/20/98; Eagle International Equity Portfolio,
12/27/95; Growth Equity Fund, 11/16/95; Mid Cap Stock Fund, 11/06/97;
Small Cap Stock Fund, 05/07/93; Technology Fund, 11/18/99; and Value
Equity Fund, 12/30/94.
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For your information, effective October 5, 2000, I assumed the position of
President of the Heritage Series Trust, replacing Brian Lee. I have served as a
member of the Heritage Board of Trustees since inception and look forward to
communicating with you in the future.
Thank you for your continued support of Heritage Family of Funds and for
your investment in Heritage Series Trust. Please call your financial advisor or
Heritage at (800) 421-4184 if you have any questions.
Sincerely,
/s/ RICHARD K. RIESS
Richard K. Riess
President
2
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November 21, 2000
Dear Fellow Shareholders:
I am pleased to report that for the 12-month period ended October 31, 2000, the
Heritage Series Trust - Aggressive Growth Fund (the "Fund") Class A Shares rose
44.9%*, topping the Russell 2000 Growth Index, which was up 16.2% for the
period. Overall economic conditions have been very favorable to the Fund's
performance during the reporting period above and may not be sustainable in the
future.
While technology stocks have been very volatile in recent months and have led
the market down, they still were among our best performers for the past year.
Healthcare stocks were also strong. Value stocks have performed much better
than growth stocks in 2000, and traditional growth sectors have not been
particularly strong late in the year. Year-to-date ("YTD") through October 31,
2000, the Russell 2000 Value Index was up 13.2%, while the Russell 2000 Growth
Index was down 10.7%. This trend was not limited to smaller stocks, as the
Russell 1000 Growth Index was down 6.0% YTD, but the Russell 1000 Value Index
was up 5.8%. Concern with slowing earnings growth for many technology companies
has somewhat weakened investor confidence in the sector.
Our best performer over the past year was Cerner, whose Millennium Suite of
software solutions has been gaining market share in the clinics as well as
hospitals. Metlife, a leading provider of insurance and other financial
services, went public in early April and has performed well since we purchased
it in its initial public offering. Another good performer was TMP Worldwide, an
advertising and executive search firm which gained attention for its
Monster.com website, the leading Internet job search service and one of the few
Internet-related companies with earnings. Semiconductor manufacturer Integrated
Device Technology has been experiencing strong demand and improving profit
margins. Anticipating weakness in the sector, we sold this position during the
year. Finally, Extreme Networks, which offers next generation switching
solutions for enterprise local area networks (LANs), has been growing revenues
rapidly and delivering solid earnings results. We also sold this stock after a
sharp run up.
Our worst performer was Spherion, a staffing company, which fell sharply after
announcing earnings that were below consensus estimates and lowering
expectations for the remainder of the year. At about 7 times earnings, we
believe this stock is grossly oversold and plan to continue holding it.
Commscope, which manufactures coaxial cables and fiber-optic cable products,
was weak, due to concerns with slowing spending in the telecom sector, and we
sold the stock. Royal Caribbean Cruises was weak due to concerns that the
industry is facing an increasingly competitive pricing environment. We chose to
sell this position.
We have seen slowing earnings growth, reduced earnings estimates, earnings
falling short of expectations and reduced future expectations, driven in part
by high energy prices that are starting to take a toll on U.S. and overseas
economies. We think earnings estimates will continue to come down, but we also
believe the market has already discounted much of the revisions. Interest rates
should moderate early next year and provide some stability going forward. We
lightened up on our technology weighting this summer, and we are now watching
for opportunities to take advantage of sector weakness and increase our
exposure. Currently our technology weighting is approximately 29%. As of
October 31, 2000, the holdings in our portfolio were trading at about 30 times
projected next 12 months earnings, with an estimated average earnings growth
rate of some 45%.
As always, we will continue to do our best for Heritage shareholders.
Sincerely,
/s/ BERT BOKSEN
Bert Boksen
Senior Vice President
Eagle Asset Management, Inc.
Portfolio Manager, Aggressive Growth Fund
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* Calculated without the imposition of either front-end or contingent deferred
sales charges.
3
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GROWTH OF A $10,000 INVESTMENT
SINCE INCEPTION OF HERITAGE SERIES TRUST - AGGRESSIVE GROWTH FUND
CLASS A, B & C SHARES ON AUGUST 20, 1998
[GRAPH OMITTED]
AVERAGE ANNUAL TOTAL RETURNS*
-----------------------------
A SHARES B SHARES C SHARES
-------- -------- --------
1 Year: 37.99% 39.80% 43.80%
Life of Class: 37.30% 38.39% 39.31%
* Average annual returns for Heritage Series Trust - Aggressive Growth Fund
Class A, B and C Shares are calculated in conformance with item 21 of Form
N-1A, which assumes the maximum sales load of 4.75% for Class A Shares, a
contingent deferred sales load for Class B Shares (4% for the one year
period and 3% for the life of Class B Shares) and reinvestment of dividends
for Class A, B and C Shares. If Class B Shares were still held at the end
of the period, the value would be $20,736. Performance presented represents
historical data. The investment return and principal value of an investment
will fluctuate so that an investor's shares, when redeemed, may be worth
more or less than their original cost. The Fund's past performance is not
indicative of future performance and should be considered in light of the
Fund's investment policy and objectives, the characteristics and quality of
its portfolio securities, and the periods selected.
4
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MARKET COMMENTARY from MARTIN CURRIE, INC.
Eagle International Equity Portfolio (the "Fund")
Since the stock markets reached all-time highs in mid-March this year, concern
over the direction of interest rates and prospects for economic growth resulted
in a sharp derating of technology, media and telecom ("TMT") stocks across all
markets. Investor nervousness was exacerbated by the U.S. reporting season,
where well-publicised company announcements over earnings
shortfalls--particularly in the technology and telecommunications sectors--have
had implications for international markets and valuations in general. Asia and
Japan have been particularly affected. After an initial rally at the start of
2000, the weakness of the Euro against the Dollar has been the other major
feature, in contrast to the stability of the Yen. Over the 12 months to October
31, 2000, the Morgan Stanley Capital International Europe, Australia, Far East
Index (the "Index") fell by 2.9% while the Fund's Class A Shares declined by
1.3%*.
After a strong finish to 1999, JAPAN (28.4% of the portfolio as of fiscal year
end) has been the weakest of the major regions over the year. We ran an
underweighted position against the Index for most of the period. The mixed
signs of economic recovery, and unwinding of cross-share holdings, left the
market very vulnerable to a sharp mark down - particularly after the good
returns from a number of large electronic and technology related stocks over
1999. As the market started to hit lows in the middle part of this year, we
started to build up our weighting again, adding stocks such as Nomura, NTT,
Takefuji and Mitsubishi Heavy Industries, all companies with domestic earnings.
Japan is looking relatively attractive. Corporate profit growth is the most
robust relative to other major markets--including the United States--and there
are now clear signs of improving consumer spending and an increase in domestic
capital expenditure.
We have run an underweight position against the Euro and CONTINENTAL EUROPE,
(36.4% of the portfolio as of fiscal year end), for much of 2000. Europe has
exposure to a number of global examples of `TMT' stocks and has suffered too
from some well-highlighted earnings disappointments, such as Nokia. Mixed signs
of economic recovery and corporate activity as European companies expanded into
U.S. assets, left the Euro very vulnerable and its weakness clouded an
otherwise relatively stable return in local currency. We were active in Europe,
adding more defensive stocks in: the financial sector, such as Allianz and UBS;
pharmaceuticals, such as Aventis and Elan; and selective industrial plays,
Vivendi Environnement, Autostrade Spa and Philips Electronics. Sales included:
`legacy' telecom groups, France Telecom and Deutsche Telecom; some less
attractive financials, such as Societe Generale and Holderbank; and a reduction
in `TMT' stocks through the sales of Alstom and SAP. At these levels, Europe is
again looking attractive, although much depends on the outlook for the
currency, which remains uncertain. In the UK (19.8% of the portfolio as of the
fiscal year end), we have been in line with the Index, partly as we own a
position in our favoured mobile group, Vodafone. It has also been a market that
has supplied some good defensive exposure to financials, pharmaceuticals and
energy.
The ASIAN allocation, (3.7% of the portfolio as of fiscal year end), has been
much reduced over the last six months as we sold holdings in Malaysia, Korea,
Taiwan and Thailand, leaving exposure to the region focused on the more mature
markets of Australia, Hong Kong and Singapore. The reduction to `smaller' Asia
matched our concern that these markets were most vulnerable to a fall of the
Nasdaq (which proved the case). Proceeds were invested in more defensive stocks
such as financials--Commonwealth Bank of Australia, Cheung Kong, Sun Hung Kai
properties (Hong Kong), or DBS Group and Overseas Union Bank in Singapore.
Sales included technology related stocks, I-cable (Hong Kong), Chartered
Semiconductor and Singapore Telecom (Singapore), Korea Telecom and Samsung
(Korea) and Compal in Taiwan. Asia has continued to suffer from the volatility
in the reporting season in the United States and the sharp devaluation of
technology related stocks, particularly in the semiconductor arena.
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* Calculated without the imposition of either front-end or contingent deferred
sales charges.
5
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As with the first half of the reporting season, we have remained very selective
in EMERGING MARKETS. Outside the reduction of smaller Asia, our positions have
concentrated on Greece, Poland, Brazil, Mexico, Israel and South Africa. New
holdings have included Petroleo Brasileiro and Embraer Aircraft in Brazil. In
Greece, we added National Bank, and in Israel, we reinvested into Orbotech,
selling Bank Hapoalim. In Poland, a resource stock was added, Polski Koncern
Naftowy. Our South Africa holdings currently include Anglo American Platinum
and Barloworld. In the current environment of global market volatility, smaller
markets have suffered as liquidity has tightened.
OUTLOOK
Markets are likely to remain volatile, as uncertainty surrounds the third
calendar quarter earnings reporting season, with higher oil prices, a weak Euro
and slower growth all having an impact. There is, however, clearer evidence of
slowing U.S. growth and it appears that interest rates have peaked in the U.S.,
which has implications for all markets. However, it is unlikely that we will
see cuts in rates until next year. The economic outlook for Japan continues to
improve as stronger economic growth, consumer spending and higher capital
expenditures support the recovery in earnings. A steady outlook for bonds,
together with greater equity value now apparent after recent stock market
falls, leave many international markets looking oversold and we expect to see
some rally towards the end of the fourth calendar quarter.
6
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GROWTH OF A $10,000 INVESTMENT
SINCE INCEPTION OF HERITAGE SERIES TRUST - EAGLE INTERNATIONAL
EQUITY PORTFOLIO - EAGLE SHARES ON MAY 1, 1995
[GRAPH OMITTED]
AVERAGE ANNUAL TOTAL RETURNS*
-----------------------------
1 Year: (1.91)% 5 Year: 9.54%
LIFE OF EAGLE CLASS SHARES: 9.39%
GROWTH OF A $10,000 INVESTMENT
SINCE INCEPTION OF HERITAGE SERIES TRUST - EAGLE INTERNATIONAL
EQUITY PORTFOLIO - CLASS A & CLASS C SHARES ON DECEMBER 27, 1995
[GRAPH OMITTED]
AVERAGE ANNUAL TOTAL RETURNS*
-----------------------------
CLASS A SHARES 1 YEAR: (6.00)%
LIFE OF CLASS A SHARES: 8.59%
CLASS C SHARES 1 YEAR: (2.04)%
LIFE OF CLASS C SHARES 8.85%
* Average annual returns for Heritage Series Trust - Eagle International Equity
Portfolio Eagle Class, Class A and C Shares are calculated in conformance
with item 21 of Form N-1A, which assumes the maximum sales load of 4.75%
for Class A Shares, and reinvestment of dividends for Eagle Class, Class A
and C Shares. Performance presented represents historical data. The
investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than
their original cost. The Fund's past performance is not indicative of
future performance and should be considered in light of the Fund's
investment policy and objectives, the characteristics and quality of its
portfolio securities, and the periods selected.
7
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GROWTH OF A $10,000 INVESTMENT
SINCE INCEPTION OF HERITAGE SERIES TRUST - EAGLE INTERNATIONAL
EQUITY PORTFOLIO - CLASS B SHARES ON JANUARY 2, 1998
[GRAPH OMITTED]
AVERAGE ANNUAL TOTAL RETURNS*
-----------------------------
1 YEAR: (5.92)%
LIFE OF CLASS B SHARES: 7.80%
* Average annual returns for Heritage Series Trust - Eagle International Equity
Portfolio Class B Shares are calculated in conformance with item 21 of Form
N-1A, which assumes a contingent deferred sales load for Class B Shares (4%
for the one year period and 3% for the life of Class B Shares), and
reinvestment of dividends. If Class B Shares were still held at the end of
the period, the value would be $12,670. Performance presented represents
historical data. The investment return and principal value of an investment
will fluctuate so that an investor's shares, when redeemed, may be worth
more or less than their original cost. The Fund's past performance is not
indicative of future performance and should be considered in light of the
Fund's investment policy and objectives, the characteristics and quality of
its portfolio securities, and the periods selected.
8
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November 17, 2000
Dear Fellow Shareholders:
The Heritage Series Trust - Growth Equity Fund (the "Fund") has performed
well year-to-date and for the trailing 12-months. The Fund's Class A Shares
year-to-date total return through the end of October 31, 2000 is up +1.39%
versus a year-to-date total return of -1.81% for the Standard & Poor's 500
Composite Stock Price Index ("S&P 500 Index"). For the 12-month period ended
October 31, 2000, the Class A Shares of the Fund handily outperformed the S&P
500 Index as well. Over that time period, the Fund's Class A Shares total
return was +31.04%* versus a total return of +6.08% for the S&P 500 Index.
Overall economic conditions have been very favorable to the Fund's performance
during the reporting periods above and may not be obtainable in the future.
These returns reflect substantial benefit from investments in initial public
offerings. Had all of the Fund's initial public offering shares been sold at
the end of their first day of trading, these gains would have equaled
approximately 30 percent of the total return for the Fund's fiscal year. The
Fund's Class A Shares were rated five stars (a) by Morningstar, based on 4,497
domestic equity funds for the one-year period ended October 31, 2000. On a
three-year basis, the Fund's Class A Shares rank (b) in the top seventh
percentile of Morningstar's large growth category peer group, consisting of 503
funds for the period ended October 31, 2000.
We are very focused on risk-adjusted returns by attempting to provide
higher upside returns with a minimum of downside risk. We seek to control the
risk in the Heritage Growth Equity portfolio through careful stock selection
and disciplined industry exposure. As part of this risk control strategy, the
Fund consists mainly of large-cap, blue chip, "sleep-well-at-night" types of
companies. In addition, we rarely make large sector purchases within the Fund's
portfolio. While our investment philosophy may not be as aggressive on the
upside (when compared to those who normally overweight certain sectors, e.g.,
technology), it is in difficult markets where we have seen its inherent value.
The Fund currently has 60 equity investments that we consider premier
growth stocks. Our investment strategy is to look for companies that have an
earnings growth rate greater than the average for companies included in the S&P
500 Index. The types of companies that we seek are dominant firms in high
growth industries. We favor those firms whose industries have significant
barriers to entry and high switching costs for their customers. Finally, we
consider those areas with the strongest potential for growth.
MARKET ENVIRONMENT
The volatile ride during the fourth quarter of 1999 pushed the market
advance to very high levels. In spite of Y2K concerns, investors continued to
pour money into the equity market, particularly in the technology sector. This
euphoria came to a screeching halt beginning in March 2000. Since then, the
market has experienced a steady decline from which it has yet to recover.
We believe the volatility in the financial markets this year is indicative
of investors resetting their exceedingly high expectations. The S&P 500 Index's
return of 20%+ in each of the past four years has done much to raise investors'
expectations to clearly unsustainable levels. In our view, these above-average
expectations were not feasible over the long term. At the same time, investors
are resetting their
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* Calculated without the imposition of either front-end or contingent
deferred sales charges.
(a) Morningstar, Inc. brings both performance and risk together into one
evaluation. These ratings are subject to change every month. The top 10%
of domestic equity funds receive five stars and the next 22.5% receive
four stars. The performance numbers used for the Fund did take into
account front-end sales charges. Past performance is no guarantee of
future results.
(b) Morningstar, Inc. performance rankings for the Growth Equity Fund Class A
Shares were based on a quantitative measure of risk-adjusted returns. This
measure calculated by Morningstar Inc. shows how well a fund has balanced
risk and return relative to other funds in the same category. For the
1-year period ended October 31, 2000, the Fund's Class A Shares was ranked
in the 12th percentile out of 723 large growth funds. The performance
numbers used for the Fund did not take into account front-end sales
charges. Past performance is no guarantee of future results.
9
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expectations on higher growth outside of the U.S. We believe expectations about
significantly higher European growth were somewhat misplaced as well. These
expectations of higher European growth are also in the process of being
readjusted.
The price of energy and a higher U.S. dollar are two issues that
contributed to the uncertainty in the markets. We believe the current energy
situation will eventually reverse itself in light of the U.S. decision to
release a portion of the Strategic Petroleum Reserve. This action should help
keep a lid on higher oil prices. Until then, today's higher oil prices and a
stronger U.S. dollar act as an indirect tax on U.S. companies and consumers,
and this should keep a lid on inflation.
Thanks in part to the work of the Federal Reserve and gains from improved
corporate use of technology, the U.S. economy continues to exhibit no
appreciable measure of inflation. While we have seen a deceleration in demand,
growth in our economy is by no means stalled. As the macroeconomic situation
abates and expectations are reset, we should have solid markets ahead. We will
continue to invest in those companies that we believe offer the best growth
prospects over the long term.
PORTFOLIO REVIEW
We focus our efforts on those areas that have the strongest growth
potential, regardless of the market environment. These primary areas include
technology, health care (both pharmaceuticals and medical devices), and
selected financial services firms. Despite any near-term hiccups that the
market might experience, we continue to stay the course and buy more of our
franchise names when they sell off and vice-versa.
The technology sector helped boost our returns over the one-year period
ended October 31, 2000. While technology remains the single largest sector
weighting in the Fund, we have trimmed this weighting over the past year to
reduce the portfolio's risk exposure. We remain firm believers in the long-term
growth prospects of technology. In the hardware industry, the Fund holds
positions in EMC, Dell, and Sun Microsystems. In the semiconductor industry, we
sold our positions in Intel, LSI Logic, and National Semiconductor due to what
we believe may be an oversupply of many various types of semiconductor chips.
While the optical/networking industry has been out-of-favor during the past
several months, the Fund maintains its holdings in JDS Uniphase, Cisco Systems,
and Nortel Networks. We have exposure to the optics industry as we believe that
the high-speed optical transport of data will continue to be an important
fundamental trend over the next three to five years. Microsoft and Veritas are
two software names in the Fund whose long-term fundamentals we find attractive.
Within the Internet area and business-to-business space, the Fund holds AOL and
Yahoo!, names we view as core franchise holdings.
Health care was also a positive contributor to the Fund over the past
year. We have slightly increased our large cap pharmaceutical weighting in the
Fund due to data that show the U.S. economy is slowing. This sector offers the
solid growth that we favor. In the health care area, we own blue chip names
such as Johnson & Johnson, Pharmacia, Merck, and Pfizer. In a slow-growth
environment, investors should pay a premium for consistent and predictable
earnings and revenue growth. In our view, whether the Republicans or Democrats
win the White House may not be as important as who controls the Congress. The
newly elected Congress is made up of a Republican majority that should favor
less regulation and government intervention. In this environment,
pharmaceutical companies are more likely to benefit from a lower probability of
government action on Medicare cost reimbursement issues.
The financial services sector has also been positive for the Fund. We
continue to own leading financial companies in dominant niches such as American
Express, AIG, and Citigroup. In recent news, Citigroup announced its decision
to acquire Associates Financial. We believe the deal will be positive to
Citigroup via an increase in revenues from Associates and through cost savings.
Also, this deal should expedite Citigroup's entry into the Japanese consumer
finance market, an area that Citigroup has been targeting. Citigroup remains
one of the premier global financial firms under Sandy Weill's leadership.
Elsewhere in
10
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the Fund, we own smaller positions in broker/dealers including Goldman Sachs,
Lehman Brothers, and Merrill Lynch. Retailing has been a challenging sector in
which to manage since our last annual report. Our two major holdings in this
sector, Home Depot and Wal-Mart, have not performed well over the short term.
Investors' fears of higher interest rates and slower potential growth have been
negative for these dominant franchises. In spite of this, we will keep Home
Depot and Wal-Mart in the Fund as they have the long-term growth
characteristics that we find attractive.
CONCLUSION
While the Federal Reserve Open Market Committee's stance on the fed funds
interest rate did not change at its November meeting, the language coming from
Washington has softened in tone. The Federal Reserve (the "Fed") noted the
economy is indeed slowing and that the supply/demand dynamic is moving closer
into balance. If the Fed takes a more neutral stance, this should be positive
on the margin for equities. If the economy continues to slow, however, we would
expect to see an eventual cut in interest rates in 2001. A reduction in
interest rates should eventually benefit growth stocks in general. We believe
the credit futures market indicates that there is a high probability that the
Fed will lower rates.
We believe the market should continue to readjust expectations and
valuations in the equity markets. Our investment philosophy and process remains
unchanged--to invest in those companies with stronger-than-average revenue and
earnings growth. Also we remain convinced that the real risk to investors is
attempting to "time" the best period to invest in the market. We thank you for
investing with us and look forward to working with you in the years to come.
Sincerely,
/s/ ASHI PARIKH
Ashi Parikh
Managing Director
Eagle Asset Management, Inc.
Portfolio Manager, Growth Equity Fund
11
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GROWTH OF A $10,000 INVESTMENT
SINCE INCEPTION OF HERITAGE SERIES TRUST - GROWTH EQUITY FUND
CLASS A & CLASS C SHARES ON NOVEMBER 16, 1995
[GRAPH OMITTED]
AVERAGE ANNUAL TOTAL RETURNS*
-----------------------------
CLASS A SHARES 1 YEAR: 24.82%
LIFE OF CLASS A SHARES: 31.18%
CLASS C SHARES 1 YEAR: 30.09%
LIFE OF CLASS C SHARES: 31.48%
GROWTH OF A $10,000 INVESTMENT
SINCE INCEPTION OF HERITAGE SERIES TRUST - GROWTH EQUITY FUND
CLASS B SHARES ON JANUARY 2, 1998
[GRAPH OMITTED]
AVERAGE ANNUAL TOTAL RETURNS*
-----------------------------
1 YEAR: 26.05%
LIFE OF CLASS B SHARES: 32.76%
* Average annual returns for Heritage Series Trust - Growth Equity Fund Class
A, B and C Shares are calculated in conformance with item 21 of Form N-1A,
which assumes the maximum sales load of 4.75% for Class A Shares, a
contingent deferred sales load for Class B Shares (4% for the one year
period and 3% for the life of Class B Shares), and reinvestment of
dividends for Class A, B and C Shares. If Class B Shares were still held at
the end of the period, the value would be $22,544. Performance presented
represents historical data. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. The Fund's past performance
is not indicative of future performance and should be considered in light
of the Fund's investment policy and objectives, the characteristics and
quality of its portfolio securities, and the periods selected.
12
<PAGE>
November 27, 2000
Dear Fellow Shareholders:
We are pleased to present the annual report for the Heritage Series Trust
- Mid Cap Stock Fund (the "Fund") for the period ended October 31, 2000. For
the 1-year period ended October 31, 2000, the Fund's Class A shares returned
42.30%*. Overall economic conditions have been very favorable to the Fund's
performance during the reporting period above and may not be sustainable in the
future. As shown below, the Fund's Class A Shares outperformed the Russell-Mid
Cap Index and the Standard & Poor's 400 Mid Cap Index ("S&P Mid Cap Index") by
over 17% and 10%, respectively.
1-YEAR ENDED 10/31/00
---------------------
Heritage Mid Cap Stock Fund 42.30%*
S&P 400 Mid Cap Index 31.65%
Russell Mid Cap Index 24.31%
We are extremely pleased with the Fund's performance, especially in the
rough market we've experienced year-to-date. Since we are growth at a
reasonable price investors with an emphasis on cash flow and above average
earnings, we tend to hold up well in turbulent markets. We mentioned in last
year's letter that the Fund would be in good stead if a correction in
technology and high multiple stocks occurred. This is exactly the trend we
witnessed in the past year. Despite the Nasdaq's 65% increase between November
1, 1999 and its high in mid-March, it is up only 13.59% for the 1-year period
ended October 31, 2000. While 13.59% is still a respectable move during a
1-year period, this volatility demonstrates the excesses that crept into the
valuations of most technology stocks earlier this year.
We feel that the Fund has a balanced approach to investing due to its
diversification of growth and value stocks. Unfortunately, the fund rating
agencies place us in either the pure growth (Morningstar) or the pure value
(Lipper) categories. Lipper Analytical Services, Inc. ranked the Fund's Class A
Shares in the 5th (a) percentile out of 176 mid cap value funds for the 1-year
period ended October 31, 2000. For the same period, Morningstar, Inc. ranked
the Fund's Class A Shares in the 47th(a) percentile out of 504 mid cap growth
funds. The recent decline in high multiple growth stocks has increased our rank
in the growth category. In either case, we remind investors that we seek to
outperform the mid cap indices and that our risk and return stance is
determined solely by the indices and not our competitors.
Although the Fund still has some exposure to small capitalization
companies, the average market cap has increased throughout the last year. Our
average market cap now stands at $3.8 billion, as compared with the S&P Mid Cap
Index at $4.3 billion. Our median market cap stands at $2.2 billion. We intend
to maintain a similar mix going forward.
Although the characteristics of the Fund match up with the indices, it is
clear that most funds in the mid cap category have much higher median market
capitalization than the Heritage Mid Cap Stock Fund. In what appears to be the
last stages of a price momentum market, many investors are still holding on to
their larger, better performing stocks.
With the Fund's turnover well north of 100%, we are surprised at the
amount of trading we did this year. The increased trading is a function of the
near two-fold increase in the volatility of the market (Source: SC Bernstein).
The monthly, weekly, and even daily moves in small to mid cap stocks create
opportunities for knowledgeable investors.
----------
* Calculated without the imposition of either front-end or contingent
deferred sales charges.
(a) Morningstar, Inc. performance rankings for the Heritage Mid Cap Stock Fund
Class A Shares were based on a quantitative measure of risk-adjusted
returns. This measure calculated by Morningstar, Inc. shows how well a
fund has balanced risk and return relative to other funds in the same
category. Lipper Analytical Services, Inc. rankings are assigned based on
the precision of performance shown. Lipper ranking methodology assigns
identical rankings to funds with the same performance. The performance
numbers used by Morningstar, Inc. and Lipper did not take into account
front-end sales charges. Past performance is no guarantee of future
results.
13
<PAGE>
We do not expect the volatility to disappear and, in fact, if the economy
continues to slow, we may even see an increase in volatility. Our first
response to the increased dispersion in returns would be to diversify. As the
Fund is already invested on a fairly sector neutral basis versus the indices
(the only major differences are that we are under-invested in utilities and
basic materials), we feel the Fund is well positioned for turbulent markets.
Our second response to increased dispersion would be to buy and sell stocks as
big moves in the stocks outweigh the fundamentals. Although trading strategies
do not produce as consistent returns as stock-picking strategies, our emphasis
on valuation in the face of greatly increased volatility forces us to trade.
Our winners this year came across the board; however, they were
concentrated in financial, capital goods, consumer cyclicals, and health care
stocks. Our biggest winners of the year included LSI Logic, Pegasus
Communications, Varian Medical, SEI Investments, TMP Worldwide, and Plexus. We
continue to hold Varian Medical; yet we sold the other five when we felt
valuations had become unreasonable. This proved to be a smart decision, given
that each of these stocks currently trades below the price at which we sold.
Our losers of the year were concentrated in consumer cyclicals, consumer
staples, and technology stocks. Negative contributors to performance included
Mobile Data Solutions, Varian Semiconductor, Protective Life, Valassis
Communications, Elcor, and Harrah's Entertainment. Most of these holdings were
sold because of deteriorating fundamentals that were tied to a weakening
economy.
In the first 10 months of 2000, the market has begun to discount a
slowdown in earnings growth. In fact, third quarter results indicate that this
is beginning to occur. As a result, there has been a movement toward stable,
reasonably valued growth stocks. Our view is that the movement towards
stability is not yet exhausted and that reasonably priced financials,
technology, health care, and service stocks are still the place to be. In
health care, we have concentrated on the less expensive services (hospitals,
home health care), and in finance we have avoided stocks with substantial
credit concerns (banks, consumer lending) in favor of insurance (mortgage,
bond, and property casualty insurers). Some technology stocks offer good
values. We are increasingly moving away from cyclical technology names
(semi-conductors, electronics) in favor of select software names. This is
consistent with a slowing economy.
As we enter 2001, we are confident the Fund is well positioned. Many small
and mid cap stocks are cheaper than large cap stocks. Our mix of stable growth
and value stocks should serve us well if equity markets continue their current
course. If monetary policy loosens later in 2001 and the market sees a strong
economic rebound, a rush to traditional value stocks might occur. Our emphasis
on valuation will help us participate in this movement to some degree.
As always, we thank you for your support and we will always strive to add
value for the benefit of all of us as shareholders.
Sincerely,
/s/ TODD L. MCCALLISTER
Todd L. McCallister
Portfolio Manager, Mid Cap Stock Fund
14
<PAGE>
GROWTH OF A $10,000 INVESTMENT
SINCE INCEPTION OF HERITAGE SERIES TRUST - MID CAP STOCK FUND
CLASS A & CLASS c SHARES ON NOVEMBER 6, 1997
[GRAPH OMITTED]
AVERAGE ANNUAL TOTAL RETURNS*
-----------------------------
CLASS A SHARES 1 YEAR: 35.54%
LIFE OF CLASS A SHARES: 16.32%
CLASS C SHARES 1 YEAR: 41.19%
LIFE OF CLASS C SHARES: 17.35%
GROWTH OF A $10,000 INVESTMENT
SINCE INCEPTION OF HERITAGE SERIES TRUST - MID CAP STOCK FUND
CLASS B SHARES ON JANUARY 2, 1998
[GRAPH OMITTED]
AVERAGE ANNUAL TOTAL RETURNS*
-----------------------------
1 YEAR: 37.13%
LIFE OF CLASS B SHARES: 17.19%
* Average annual returns for Heritage Series Trust - Mid Cap Stock Fund Class
A, B and C Shares are calculated in conformance with item 21 of Form N-1A,
which assumes the maximum sales load of 4.75% for Class A Shares, a
contingent deferred sales load for Class B Shares (4% for the one year
period and 3% for the life of Class B Shares), and reinvestment of
dividends for Class A, B and C Shares. If Class B Shares were still held at
the end of the period, the value would be $15,974. Performance presented
represents historical data. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. The Fund's past performance
is not indicative of future performance and should be considered in light
of the Fund's investment policy and objectives, the characteristics and
quality of its portfolio securities, and the periods selected.
15
<PAGE>
November 21, 2000
Dear Fellow Shareholders:
For the 12-month period ended October 31, 2000, Heritage Series Trust - Small
Cap Stock Fund (the "Fund") Class A Shares were up 25.7%*, outperforming the
Russell 2000 Index, which was up 17.4%, for the period. Overall economic
conditions have been very favorable to the Fund's performance during the
reporting period above and may not be sustainable in the future.
The market has been extremely volatile in the past few months, and technology
stocks have not performed particularly well. Value stocks have been much
stronger than growth stocks. Year-to-date through October 31, 2000, the Russell
2000 Value Index was up 13.2%, while the Russell 2000 Growth Index was down
10.7%. However, technology stocks were very strong during the first half of the
year and the sector is still a top contributor to our performance for the past
12 months. Health care stocks have also been strong. The consumer sector has
been a drag on performance.
In the portion of the portfolio allocated to Eagle our best performer was
Coherent, a manufacturer of lasers used largely for medical, optical and
semiconductor manufacturing applications. The strong performance reflected
strong earnings. Artesyn Technologies, a developer of power conversion products
for the computing and telecommunications markets, also performed well after
making several positive product announcements. Cerner, whose Millennium Suite
of software solutions has been gaining market share in the clinics as well as
hospitals, performed well, due to strong earnings results. Dain Rauscher, a
regional stock broker, rose sharply after the company announced an agreement to
be acquired by the Royal Bank of Canada for nearly $1.5 billion ($95 per share)
in cash. National Computer Systems also agreed to be acquired, for $73 (in
cash) per share, by Pearson PLC, a U.K.-based international media, publishing
and education company.
The worst performer in our portion of the portfolio was Commscope, a
manufacturer of coaxial cables as well as fiber-optic cable products. The
company announced slightly weaker than expected earnings results. However, the
decline reflected concerns over slowing telecom capital equipment spending. We
believe this stock is oversold and plan to continue holding it. Sykes
Enterprises fell after the company announced disappointing earnings and
subsequently announced a restatement of 1999 earnings as well as lowered future
earnings estimates. We sold the stock at about $18, and it currently trades
around $6. Metrocall declined due to concerns with price and margin erosion. We
sold the stock in the $3 to $4 range, and it currently trades at approximately
$1.
We are concerned with the current market environment of high oil prices,
coupled with high interest rates. Earnings results have been dampened, and many
companies have been pre-releasing poor results. We anticipate further earnings
estimate reductions and a slowing economic growth rate. However, while we are
concerned, we do believe the market has already discounted many of these
factors. In addition, we expect to see interest rates begin to come down. We
are currently looking at energy, financial and healthcare companies as these
sectors have been strong and should continue to perform well with value stocks
outperforming growth stocks. In addition, we are looking to increase our
technology weighting, which is currently just under 20%, by "bargain hunting"
when the sector is weak.
As always we will endeavor to do our best for shareholders.
Sincerely,
/s/ BERT BOKSEN
Bert Boksen
Senior Vice President
Eagle Asset Management, Inc.
Portfolio Manager, Small Cap Stock Fund
----------
* Calculated without the imposition of either front-end or contingent deferred
sales charges.
16
<PAGE>
November 13, 2000
Dear Fellow Shareholders:
The Heritage Small Cap Stock Fund (the "Fund") had a competitive year for the
twelve month period ended October 31, 2000, returning 25.7%* for the Class A
Shares versus 17.4% for the Russell 2000 Index.
The year can be divided into two parts. Speculative, momentum investing and a
boom in technology and communication stocks characterized the first part from
October 1, 1999 to March 31, 2000. The second part from April 1, 2000 to
October 31, 2000, was characterized by a partial correction of these excesses,
as momentum and technology stocks corrected.
As we look forward, the markets should continue to become more balanced--where
value is competitive with growth; small cap is competitive with large cap; and
growth at a reasonable price is competitive with growth at any price.
We have returned to a thinking person's market. This should be a good
environment for the Fund, as research and valuations count again and this is
the investing style employed by both managers of the Fund.
While the economy is facing challenges, the economic metrics remain favorable
enough to permit growing companies selling at reasonable valuations to
appreciate. Thus, we believe that we should be able to grow the Fund very
reasonably over the coming fiscal year.
During the past year, the Fund benefited from its technology exposure in the
early part of the year; it also benefited from the reduction of technology
exposure in the second half of the year.
The top contributors in our portion of the portfolio were American Tower,
Comdisco, Doral Financial, John Wiley and Sons, Penton Media, Gentex and
Investors Financial. We continue to own these stocks and have high confidence
in them. In each case, these stocks went up as investors realized that the
growth rates were good or better than expected and that the stocks were very
cheaply priced.
Our portion of the portfolio was hurt by investments in Alaska Communication,
Health Management Systems, Startek, Capital Crossing Bank, Audible and
Commscope. We have full confidence in Startek, Capital Crossing Bank and
Commscope. We are studying the other positions. Startek, Capital Crossing Bank
and Commscope had short-term earnings issues, but growth in the future seems
assured. Alaska Communication and Audible went down in sympathy with the
technology sector. Health Management Systems had lower than expected growth.
We look forward to picking stocks with good potential and providing good
risk-adjusted returns during the current fiscal year.
Sincerely,
/s/ JAMES D. AWAD
James D. Awad
Chairman
Awad Asset Management, Inc.
Portfolio Manager, Small Cap Stock Fund
----------
* Calculated without the imposition of either front-end or contingent deferred
sales charges.
17
<PAGE>
GROWTH OF A $10,000 INVESTMENT
SINCE INCEPTION OF HERITAGE SERIES TRUST - SMALL CAP STOCK FUND
CLASS A SHARES ON MAY 7, 1993
[GRAPH OMITTED]
AVERAGE ANNUAL TOTAL RETURNS*
-----------------------------
1 YEAR: 19.71% 5 YEAR: 12.06%
LIFE OF CLASS A SHARES: 12.91%
GROWTH OF A $10,000 INVESTMENT
SINCE INCEPTION OF HERITAGE SERIES TRUST - SMALL CAP STOCK FUND
CLASS B SHARES ON JANUARY 2, 1998
[GRAPH OMITTED]
AVERAGE ANNUAL TOTAL RETURNS*
-----------------------------
1 YEAR: 20.81%
LIFE OF CLASS B SHARES: (0.80)%
* Average annual returns for Heritage Series Trust - Small Cap Stock Fund Class
A and B Shares are calculated in conformance with item 21 of Form N-1A,
which assumes the maximum sales load of 4.75% for Class A Shares, a
contingent deferred sales load for Class B Shares (4% for the one year
period and 3% for the life of Class B Shares), and reinvestment of
dividends for Class A and B Shares. If Class B Shares were still held at
the end of the period, the value would be $9,997. Performance presented
represents historical data. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. The Fund's past performance
is not indicative of future performance and should be considered in light
of the Fund's investment policy and objectives, the characteristics and
quality of its portfolio securities, and the periods selected.
18
<PAGE>
GROWTH OF A $10,000 INVESTMENT
SINCE INCEPTION OF HERITAGE SERIES TRUST - SMALL CAP STOCK FUND
CLASS C SHARES ON APRIL 3, 1995
[GRAPH OMITTED]
AVERAGE ANNUAL TOTAL RETURNS*
-----------------------------
1 YEAR: 24.80% 5 YEAR: 12.33%
LIFE OF CLASS C SHARES: 14.64%
* Average annual returns for Heritage Series Trust- Small Cap Stock Fund Class
C Shares are calculated in conformance with item 21 of Form N-1A, which
assumes reinvestment of dividends for Class C Shares. Performance presented
represents historical data. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. The Fund's past performance
is not indicative of future performance and should be considered in light of
the Fund's investment policy and objectives, the characteristics and quality
of its portfolio securities, and the periods selected.
19
<PAGE>
November 16, 2000
Dear Fellow Shareholders:
The Heritage Series Trust--Technology Fund (the "Fund") has posted solid
performance numbers since it first opened just under one year ago. The Fund's
Class A Shares produced a total return of 21.97%* from inception on November
18, 1999 through October 31, 2000. Over this same time period, the Goldman
Sachs Technology Index (the "GSTI") advanced 3.87%, while the NASDAQ Composite
(NASDAQ) was up 0.64%, and the Standard & Poor's 500 Composite Price Index
returned 0.31%. On a year-to-date basis, the Fund's Class A Shares has returned
-0.91% while the GSTI has declined 11.89%. Our absolute performance was driven
by strong revenue and earnings growth in the technology sector, which continues
to outpace other sectors of the economy. Our relative outperformance is driven
by taking less risk with a broadly diversified portfolio of technology stocks
exposed to many different industries whose fundamentals are often not highly
correlated. Overall economic conditions have been very favorable to the Fund's
performance during the reporting period above and may not be sustainable in the
future. These returns reflect substantial benefit from investments in initial
public offerings. Had all of the Fund's initial public offering shares been
sold at the end of their first day of trading, these gains would have equaled
approximately one-half of the total return for the Fund's fiscal year. To the
extent that the Fund's assets remain the same or grow, the future impact of
investments in initial public offerings on the Fund's returns may be
substantially lower.
PORTFOLIO PERFORMANCE
As we noted in the Fund's semi-annual review six months ago, investors'
reassessment of risk levels and corresponding valuations for technology
companies as well as higher interest rates have been significant factors in the
recent downturn of the technology market. This combination, along with a
slowing economy, has had a decidedly negative impact on the valuation of many
technology stocks. We believe our diversified approach and intense focus on
risk management serves us well in these types of market conditions, and our
technology research team takes great pride in the ability to outperform in both
up and down markets.
Since our last update over six months ago, the performance of the Heritage
Technology Fund has been essentially flat while technology stocks overall have
experienced a substantial correction. While the Fund exhibited negative
absolute performance in the semiconductor, Internet, and communications areas,
we significantly outperformed our benchmark on a relative basis. The Fund
experienced substantial positive performance in the software and hardware
areas.
We chose to cut back our semiconductor weighting in the Fund several
months ago as we began to believe the semiconductor industry was entering the
mid-phase of its current business cycle. Our decision to underweight this group
against our benchmark contributed to our relative outperformance in this
sector. We believe the supply/demand environment for semiconductors is now
approaching equilibrium after several quarters of supply constraints and
corresponding margin expansion for many chip manufacturers. In our view, phase
two of the semiconductor business cycle will require much more selectivity in
the sector. Those firms that simply produce standard parts will likely see
their margins erode substantially. At this point in the cycle, we now want to
own semiconductor companies that manufacture proprietary (not standard or
undifferentiated) products exploiting specific product cycles and/or rapid
growth end markets such as Digital Subscriber Line ("DSL") broadband access.
DSL is designed to optimize the copper line used by telephone companies for
high-speed data transfer. One of our DSL holdings in the Fund is Globespan, a
leading design provider of chipsets for modems. Another semiconductor holding
is Intersil, a top chipset designer for wireless local area network (WLAN)
solutions. Both firms should benefit from strong growth in these immature
market segments over the next 18-24 months.
In the semiconductor sector, the Fund experienced declines in Fairchild
Semiconductor and Memc Electronics. Intel also proved a disappointing holding,
and we recently sold this position from the Fund. Given the current production
schedules of Intel and Advanced Micro Devices, we believe the first half of
2001 may bring a significant oversupply of microprocessors to the market. The
decline in the overall semiconductor sector did not affect our Applied Micro
Circuits position, which contributed significant positive performance to the
Fund.
----------
* These returns are calculated without the imposition of either front-end or
contingent deferred sales charges.
20
<PAGE>
Over the course of the past six months, our Internet exposure detracted
from overall Fund performance. We experienced declines in America Online,
Ariba, Amazon.com, and Verisign as investor enthusiasm waned for
Internet-related growth segments of the economy.
AOL is in the midst of closing its deal to merge with Time Warner. Once
the deal receives the blessing of the federal regulators, we believe that the
new AOL Time Warner entity will emerge as a global media powerhouse. The new
company will have advantages including proprietary content and a large, loyal
customer base through which to drive this content and generate substantial
revenue opportunities. This will be important for the next, more mature phase
of the company's business model.
Within the Internet retailing space, Amazon.com has received a great deal
of publicity in the media in recent months. While Amazon.com remains a holding
in the Fund, we believe the company needs to achieve a $5 billion revenue run
rate over the next 12-18 months to put questions about its long-term viability
to rest. At this scale, the capital efficiencies associated with a virtual
merchandising model should become more apparent and the company should create
substantial value for shareholders.
In spite of its recent decline, Verisign continues to establish a clear
leadership position in secure electronic transaction platform technologies. The
company has now supplemented this offering with a broader portfolio of Internet
infrastructure products and services. Verisign provides a comprehensive,
full-service Internet commerce suite including domain name registration, user
and customer authentication/validation services, and secure payment services.
More importantly, Verisign has entered into strategic partnerships with other
premier Internet infrastructure companies including America Online, Ariba,
Cisco Systems, IBM, Microsoft, Sun Microsystems, and Vignette. We expect that
many of these alliances will deepen and provide sizable revenue opportunities
for Verisign over the long term. Finally, we believe both Verisign and Ariba
will benefit tremendously from accelerating growth in web-based
business-to-business transaction volumes over the coming years.
In the communications/networking area, the Fund experienced a slightly
negative return. The Fund's underweight position versus its benchmark helped in
our outperformance on a relative basis. Cisco Systems, PMC-Sierra, JDS
Uniphase, and Nortel Networks experienced declines. However, Sycamore Networks
and Cabletron Systems contributed positive results towards our returns over the
six-month period. We maintain significant exposure to this sector, as we
believe that the high-speed optical transport of data will continue to be an
important fundamental trend over the next three-to-five years.
Software has been the single largest positive contributor for us over the
past six months. Even though we maintained a slightly underweight position
versus the benchmark, our stock selection led to significant outperformance
during the period. We saw a number of our positions, including Cadence Design
Systems, E.Piphany, Microsoft, and Veritas, rebound from lows experienced
earlier in the year. Veritas is one of our favorite names in the software
space. The firm is a clear leader in storage management software with a virtual
lock on critical OEM distribution channels, and we view it as a core technology
holding.
The hardware sector contributed positively to the Fund's performance since
April. We have maintained a fairly neutral position in this area when measured
against the GSTI. One particular holding, Jabil Circuit, experienced
substantial gains. The company's consistent execution along with its
manufacturing expertise in a variety of communications and computing end
markets has driven a recent decision to increase our exposure to this firm.
Several other names contributed to our positive hardware performance.
Increasing demand for data storage capacity resulted in outperformance by EMC.
We believe that Wall Street's forecasted demand for data storage has been
extremely conservative. In our view, the increase in the number of Internet
users, access points, and online transaction activity will generate massive
amounts of data that need to be stored, retrieved, and analyzed. Compaq also
proved to be a solid position for the Fund. While many consider Compaq to be an
unfinished turnaround story, the firm has expanded its operating margins
significantly and has a solid PC server business poised for a Windows 2000
upgrade cycle. Finally, Solectron had a positive impact on our hardware sector
performance over the past six months.
KEY FUNDAMENTAL THEMES IN THE HERITAGE TECHNOLOGY FUND
1) The continued buildout of business-to-business e-commerce infrastructure led
by large and midsize corporations in the U.S. and abroad.
21
<PAGE>
2) A strong forthcoming spending cycle related to communications hardware and
software to help manage more complex carrier networking infrastructures
that must soon accommodate ubiquitous broadband access, unified messaging,
and the proliferation of wireless data transmissions and transactions.
3) Continued growth in the demand for high availability data storage systems,
storage area networks (SANs), and the software tools to manage these
systems.
4) An acceleration in the adoption rate of Microsoft's Windows 2000 operating
system commencing in the first half of 2001.
5) An accelerated buildout of content distribution networks designed to
intelligently store and manage web-based content closer to relevant users.
6) The emergence of wireless local are networks (WLANs) as a standard solution
in corporate information technology infrastructures.
OUTLOOK
With all of the volatility that we have seen in the equity markets during
2000, I can only reemphasize what I expressed in the last shareholder letter.
The conclusions are perhaps even more relevant today. We urge investors to
continue to place recent technology stock corrections in proper perspective. We
believe fundamental outlook for the sector remains strong, especially over the
longer term. Currently, we do not face a macroeconomic shock akin to the Asian
contagion or other major disturbances that might significantly slow demand for
technology products and services for a sustained period of time. More
importantly, we believe we remain in the early stages of the evolution of the
most important technology in several generations: the Internet. Again, it is
possible that the Internet will create (and destroy) more shareholder value
than any technological advancement preceding it, and we are very early in the
adoption curve of this powerful technology.
Remember, less than five percent of the global population uses the
Internet regularly today, and less than one percent of worldwide commerce was
conducted via the Internet last year. Over the next several years, we expect
both of these numbers to increase substantially. Demand for technology products
is likely to grow accordingly and create many unique investment opportunities.
As always in the technology arena, many areas represent opportunities for
tremendous growth as old technologies are displaced and companies look for ways
to improve operating efficiencies and better manage their relationships with
customers, suppliers, and other business partners. The drive for productivity
growth through the use of technology is likely to continue unabated in the U.S.
This same drive is only beginning in many other parts of the world, and we
believe much of the growth in demand for technology products will come from
abroad over the next several years.
As a fellow shareholder, I encourage you to remain focused on the long
term. We believe that as long as there are opportunities for technology to
enable productivity improvements and enhance people's lives, there will be many
corresponding investment opportunities that hold great promise. I look forward
to exploiting many of these opportunities as I invest alongside you.
Sincerely,
/s/ DUANE A. EATHERLY
Duane A. Eatherly, CFA
Eagle Asset Management, Inc.
Portfolio Manager, Heritage Technology Fund
22
<PAGE>
GROWTH OF A $10,000 INVESTMENT
SINCE INCEPTION OF HERITAGE SERIES TRUST - TECHNOLOGY FUND
CLASS A, B & C SHARES ON NOVEMBER 18, 1999
[GRAPH OMITTED]
AVERAGE ANNUAL TOTAL RETURNS*
-----------------------------
A SHARES B SHARES C SHARES
-------- -------- --------
LIFE OF CLASS: 16.18% 16.13% 20.06%
* Average annual returns for Heritage Series Trust - Technology Fund Class A, B
and C Shares are calculated in conformance with item 21 of Form N-1A, which
assumes the maximum sales load of 4.75% for Class A Shares, a 5% contingent
deferred sales load for Class B Shares, a 1% contingent deferred sales load
for Class C Shares and reinvestment of dividends for Class A, B and C
Shares. If Class B and C Shares were still held at the end of the period,
the value would be $12,114 and $12,106, respectively. Performance presented
represents historical data. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. The Fund's past performance
is not indicative of future performance and should be considered in light
of the Fund's investment policy and objectives, the characteristics and
quality of its portfolio securities, and the periods selected.
23
<PAGE>
November 15, 2000
Dear Fellow Shareholders:
A return to "Value" investing picked up steam since the beginning of the year.
As we pointed out in our last letter, we thought that investors were beginning
to focus on the risk in the stock market and began questioning the validity of
stocks that were valued based on `new economy' metrics. As it turns out, there
has been a decided shift to more traditional methods of valuing equities, such
as earnings, a company's ability to grow both its bottom and top lines, and the
quality of its balance sheet. Since we maintained our discipline during the
rough period for value investors our performance is benefiting from the return
to reality.
We are very pleased that the Value Equity Fund's (the "Fund") Class A Shares
performance has improved dramatically over the past year. Indeed, the Fund
recorded a gain of +15.13%* for the 12-months ended October 31, 2000 versus a
gain of +5.84% for the Russell 1000 Value Index and declines of -1.81% and
-3.40% for the Standard and Poor's 500 Composite Stock Price Index and the Dow
Jones Industrial Average, respectively. We feel that the performance by Osprey,
since its retention as sub-adviser to the Fund, has met or exceeded the
expectations of the Trustees and fellow shareholders.
In line with the shift in sentiment discussed earlier, energy, financial
services and utilities were among the market leaders recently. Energy stocks
benefited from the spike up in both oil and natural gas prices. Our stocks in
this sector enjoyed excellent gains. They included Baker Hughes, Kerr McGee,
Phillips Petroleum, and El Paso Energy.
Financial stocks rose strongly when it became evident that the likelihood of
further Federal Reserve interest rate increases this year was greatly reduced.
CitiGroup, Fleet Boston Financial and Merrill Lynch Co. were beneficiaries of
this trend. In addition, property and casualty insurance companies outperformed
based upon premium increases and an almost industry-wide shift to more sensible
competitive practices. Chubb, Everest Re and Hartford were our star performers
in this sector.
During this last quarter, we shifted the portfolio to some more defensive
positions such as Edison International, a southern California electric utility,
and BellSouth, the last of the major independent regional telephone companies.
We also purchased Tosco, the largest independent refiner and marketer of
petroleum products in the U.S., and Lexmark, the second largest manufacturer of
printers and related printing-consumable products for the home and office. In
addition, we purchased Washington Mutual, the largest savings and loan company,
which we believe will be a beneficiary of the end of rapid increases in
interest rates by the Fed. Lastly, we purchased McDonald's after they reported
that they would have an earnings shortfall based on the weakness of the Euro.
We believe that the Euro will regain value and this impact will be reversed.
Further, we believe that McDonald's basic fundamentals and franchise value
remain intact.
Both FPL and Hartford Financial were sold recently as their stocks reached our
price targets. The government's shift from being negative to positive on
healthcare support initiatives assisted the health services sector. Tenet
Healthcare has been a beneficiary of this trend with the stock up over 100%
during the past 12 months. We trimmed our Tenet position during the past year
and recently sold the stock as its valuation reached our sell target. In
addition, we sold Albertson's when it became apparent that management would be
unable to complete the consolidation of American Stores and reduce its cost
structure on a timely basis so that it can aggressively compete in the market
place and grow earnings.
----------
* Calculated without the imposition of either front-end or contingent deferred
sales charges.
24
<PAGE>
We are extremely pleased and hope that our fellow shareholders are encouraged
with the results of our first full fiscal year of operations as the subadvisor
for the Heritage Value Equity Fund. In addition to the superior performance
that we recorded, we were able to keep capital gains distributions to a
relatively low level of about 4%. Going forward, we believe that the portfolio
is well positioned as we enter our second year of managing the Fund. However,
as always, we have a `bullpen' of new potential candidates for the portfolio
and are continually searching for additional investment opportunities.
Sincerely
/s/ RUSSELL S. TOMPKINS
Russell S. Tompkins
Managing Partner
Chief Operating Officer
Osprey Partners Investment Management, LLC
Portfolio Manager, Value Equity Fund
/s/ JEROME D. FISCHER
Jerome D. Fischer
Managing Partner
Director of Equity Research
Osprey Partners Investment Management, LLC
Portfolio Manager, Value Equity Fund
25
<PAGE>
GROWTH OF A $10,000 INVESTMENT
SINCE INCEPTION OF HERITAGE SERIES TRUST - VALUE EQUITY FUND
CLASS A SHARES ON DECEMBER 30, 1994
[GRAPH OMITTED]
AVERAGE ANNUAL TOTAL RETURNS*
-----------------------------
1 YEAR: 9.66% 5 YEAR: 9.74%
LIFE OF CLASS A SHARES: 12.64%
GROWTH OF A $10,000 INVESTMENT
SINCE INCEPTION OF HERITAGE SERIES TRUST - VALUE EQUITY FUND
CLASS B SHARES ON JANUARY 2, 1998
[GRAPH OMITTED]
AVERAGE ANNUAL TOTAL RETURNS*
-----------------------------
1 YEAR: 10.28%
LIFE OF CLASS B SHARES: 1.07%
* Average annual returns for Heritage Series Trust - Value Equity Fund Class A
and B Shares are calculated in conformance with item 21 of Form N-1A, which
assumes the maximum sales load of 4.75% for Class A Shares, a contingent
deferred sales load for Class B Shares (4% for the one year period and 3%
for the life of Class B Shares), and reinvestment of dividends for Class A
and B Shares. If Class B Shares were still held at the end of the period,
the value would be $10,604. Performance presented represents historical
data. The investment return and principal value of an investment will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost. The Fund's past performance is not
indicative of future performance and should be considered in light of the
Fund's investment policy and objectives, the characteristics and quality of
its portfolio securities, and the periods selected.
26
<PAGE>
GROWTH OF A $10,000 INVESTMENT
SINCE INCEPTION OF HERITAGE SERIES TRUST - VALUE EQUITY FUND
CLASS C SHARES ON APRIL 3, 1995
[GRAPH OMITTED]
AVERAGE ANNUAL TOTAL RETURNS*
-----------------------------
1 YEAR: 14.28% 5 YEAR: 9.98%
LIFE OF CLASS C SHARES: 12.06%
* Average annual returns for Heritage Series Trust - Value Equity Fund Class C
Shares are calculated in conformance with item 21 of Form N-1A, which
assumes reinvestment of dividends for Class C Shares. Performance presented
represents historical data. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. The Fund's past performance
is not indicative of future performance and should be considered in light
of the Fund's investment policy and objectives, the characteristics and
quality of its portfolio securities, and the periods selected.
27
<PAGE>
--------------------------------------------------------------------------------
HERITAGE SERIES TRUST - AGGRESSIVE GROWTH FUND
INVESTMENT PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
MARKET
SHARES VALUE
----------- -------------
COMMON STOCKS--92.7% (a)
------------------------
ANALOG SEMICONDUCTORS--2.1%
---------------------------
25,000 JNI Corporation* .................. $ 2,226,563
-----------
AUTOMOTIVE--1.9%
----------------
80,000 Gentex Corporation* ............... 1,980,000
-----------
BANKS--0.5%
-----------
25,000 North Fork Bancorporation ......... 504,688
-----------
COMMUNICATION SERVICES--2.7%
----------------------------
30,000 Crown Castle International
Corporation* .................... 909,375
100,000 McLeodUSA, Inc.* .................. 1,925,000
-----------
2,834,375
-----------
COMMUNICATIONS EQUIPMENT--17.3%
-------------------------------
90,000 Acterna Corporation* .............. 1,440,000
47,249 Alcatel Alsthom S.A.,
Sponsored ADR ................... 2,947,156
20,000 Comverse Technology, Inc.* ........ 2,235,000
25,000 Corning, Inc. ..................... 1,912,500
22,000 Corvis Corporation* ............... 1,443,750
91,400 EMS Technologies Inc* ............. 1,450,974
20,000 Gilat Satellite Networks Ltd* ..... 1,023,750
40,000 Inrange Technologies
Corporation, Class "B"* ........... 1,465,000
30,000 Powerwave Technologies, Inc.* ..... 1,443,750
60,000 Sawtek, Inc.* ..................... 3,052,500
-----------
18,414,380
-----------
COMPUTER PERIPHERAL EQUIPMENT--4.6%
-----------------------------------
60,000 Avocent Corporation* .............. 4,256,250
7,500 McData Corporation,
Class "B"* ...................... 625,195
-----------
4,881,445
-----------
ELECTRONIC EQUIPMENT--4.8%
--------------------------
140,000 Ampex Corporation, Class "A"* 105,000
80,000 Artesyn Technologies, Inc.* ....... 3,250,000
25,000 Plexus Corporation* ............... 1,576,563
40,000 Rockford Corporation* ............. 230,000
-----------
5,161,563
-----------
HEALTH CARE--1.1%
-----------------
60,000 Health Management Associates,
Inc., Class "A"* ................ 1,188,750
-----------
INSURANCE--4.8%
---------------
185,000 MetLife, Inc.* .................... 5,110,625
-----------
LOGIC SEMICONDUCTORS--0.9%
--------------------------
20,000 Intersil Holding Corporation* ..... 958,750
-----------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
-------------------------
MEDICAL EQUIPMENT--6.7%
-----------------------
40,000 Baxter International, Inc. .............. 3,287,500
110,000 Coherent, Inc.* ......................... 3,829,375
---------
7,116,875
---------
MEMORY & Commodity Semiconductors--0.1%
---------------------------------------
19,400 ChipPAC, Inc.* .......................... 167,325
---------
MISCELLANEOUS SERVICES--3.1%
----------------------------
25,000 Convergys Corporation* .................. 1,089,063
377,600 INSpire Insurance Solutions, Inc.* . 236,000
139,500 Spherion Corporation* ................... 1,656,563
1,000,000 Telespectrum Worldwide Inc.* ............ 381,000
---------
3,362,626
---------
OIL & Gas--5.0%
---------------
35,000 Noble Drilling Corporation* ............. 1,454,688
130,000 Veritas DGC Inc.* ....................... 3,900,000
---------
5,354,688
---------
PHARMACEUTICAL--6.8%
--------------------
12,000 Ciphergen Biosystems, Inc.* ............. 372,000
72,000 Collateral Therapeutics, Inc.* .......... 1,820,250
11,000 Deltagen Inc.* .......................... 174,624
90,000 Praecis Pharmaceuticals, Inc.* .......... 2,283,750
10,000 Sepracor, Inc.* ......................... 681,250
45,000 Variagenics, Inc.* ...................... 742,500
110,000 ViroLogic, Inc.* ........................ 1,223,750
---------
7,298,124
---------
PRINTING & Publishing--2.4%
---------------------------
70,000 Houghton Mifflin Company ................ 2,576,875
---------
PROFESSIONAL SERVICES--6.7%
---------------------------
25,000 Electronic Data Systems
Corporation ........................... 1,173,438
120,000 Moody's Corporation ..................... 3,157,500
40,000 TMP Worldwide Inc.* ..................... 2,784,375
---------
7,115,313
---------
REAL ESTATE--0.5%
-----------------
25,000 LNR Property Corporation ................ 540,625
---------
SOFTWARE--15.5%
---------------
99,000 Cerner Corporation* ..................... 6,131,813
130,000 Datastream Systems, Inc.* ............... 1,592,500
35,000 DST Systems Inc.* ....................... 2,156,874
45,000 E.piphany, Inc.* ........................ 4,055,625
34,400 Firstwave Technologies, Inc.* ........... 86,000
88,500 InforMax, Inc.* ......................... 2,461,406
---------
16,484,218
----------
The accompanying notes are an integral part of the financial statements.
28
<PAGE>
--------------------------------------------------------------------------------
HERITAGE SERIES TRUST - AGGRESSIVE GROWTH FUND
INVESTMENT PORTFOLIO
OCTOBER 31, 2000
(CONTINUED)
--------------------------------------------------------------------------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
-------------------------
TRANSPORTATION--3.5%
--------------------
45,000 Nordic American Tanker
Shipping Ltd. ............................ $ 961,874
75,000 Teekay Shipping Corporation ................ 2,803,125
-----------
3,764,999
-----------
UTILITIES--1.7%
---------------
20,000 Calpine Corporation* ....................... 1,578,750
12,500 TNPC, Inc.* ................................ 207,813
-----------
1,786,563
-----------
Total Common Stocks
(cost $80,419,766).................................... 98,829,370
-----------
REPURCHASE AGREEMENT -- .2%(a)
-----------------------------
Repurchase Agreement with State Street
Bank and Trust Company, dated October 31,
2000 @ 6.30% to be repurchased at
$11,927,087 on November 1, 2000,
collateralized by $9,325,000 United States
Treasury Bonds, 8.50% due February 15,
2020, (market value $12,104,762 including
interest) (cost $11,925,000)............................ 11,925,000
------------
TOTAL INVESTMENT PORTFOLIO
(cost $92,344,766) (b), 103.9%(a)..................... 110,754,370
OTHER ASSETS AND LIABILITIES, net (3.9%)(a) (4,202,188)
------------
NET ASSETS, 100.0% $106,552,182
============
----------
* Non-income producing security.
(a) Percentages indicated are based on net assets.
(b) The aggregate identified cost for federal income tax purposes is
$95,750,494. Market value includes net unrealized appreciation of
$15,003,876 which consists of aggregate gross unrealized appreciation for
all securities in which there is an excess of market value over tax cost of
$18,637,781 and aggregate gross unrealized depreciation for all securities
in which there is an excess of tax cost over market value of $3,633,905.
ADR -- American Depository Receipt.
The accompanying notes are an integral part of the financial statements.
29
<PAGE>
--------------------------------------------------------------------------------
HERITAGE SERIES TRUST - EAGLE INTERNATIONAL EQUITY PORTFOLIO
INVESTMENT PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
MARKET
SHARES VALUE
------ -----
COMMON STOCKS--92.3%(a)
-----------------------
AUSTRALIA--0.9%
---------------
13,000 AMP Ltd. ......................... $ 117,183
3,500 Brambles Industries Ltd. ......... 90,746
7,500 Commonwealth Bank of
Australia* ..................... 111,610
10,800 News Corporation Ltd. ............ 112,971
----------
432,510
----------
BRAZIL--1.3%
------------
10,000 Embraer Aircraft Corporation,
Sponsored ADR* ................. 289,373
8,500 Embratel Participacoes, SA,
Sponsored ADR .................. 137,594
5,500 Petrobras Petroleo,
Sponsored ADR* ................. 159,844
----------
586,811
----------
CHINA--0.6%
-----------
15,000 China Mobile (Hong Kong) Ltd. 96,166
8,621 China Unicom Ltd.,
Sponsored ADS .................. 176,730
----------
272,896
----------
FINLAND--2.0%
-------------
20,868 Nokia AB OY ...................... 858,690
3,862 Tietoenator ...................... 74,231
----------
932,921
----------
FRANCE--14.3%
-------------
11,086 Alcatel .......................... 676,405
11,125 Aventis SA ....................... 802,458
7,019 AXA-UAP Groupe ................... 929,187
1,466 Cap Gemini SA .................... 233,881
6,418 Carrefour ........................ 430,804
1,843 Sodexho Alliance ................. 288,552
5,796 Suez Lyonnaise des Eaux .......... 884,344
7,249 Total Fina SA, Class "B" ......... 1,037,143
13,007 Vivendi .......................... 934,897
8,705 Vivendi Environnement ............ 325,031
----------
6,542,702
----------
GERMANY--1.8%
-------------
2,434 Allianz AG ....................... 825,268
----------
GREECE--0.2%
------------
2,700 National Bank of Greece* ......... 102,626
----------
HONG KONG--1.5%
---------------
86,200 Bank of East Asia Ltd. ........... 194,527
17,500 Cheung Kong Ltd. ................. 193,534
14,350 Hutchison Whampoa, Ltd. .......... 178,478
15,000 Sun Hung Kai Properties* ......... 123,093
----------
689,632
----------
MARKET
SHARES VALUE
------ -----
COMMON STOCKS (CONTINUED)
-------------------------
IRELAND--1.0%
-------------
8,700 Elan Corporation PLC,
Sponsored ADR* ................... 451,856
---------
ISRAEL--0.4%
------------
1,400 Nice Systems Ltd,
Sponsored ADR* ................... 65,450
1,950 Orbotech Ltd.* ..................... 103,228
---------
168,678
---------
ITALY--3.4%
-----------
23,393 Alleanza Assicurazioni ............. 310,276
40,385 Autostrade Spa* .................... 234,754
24,826 San Paolo IMI SPA .................. 402,386
32,727 Telecom Italia Mobiliare SPA ....... 278,277
30,084 Telecom Italia SPA ................. 348,475
---------
1,574,168
---------
JAPAN--27.7%
------------
64,000 Asahi Chemical Industry
Company, Ltd. .................... 396,499
3,400 Benesse Corporation ................ 186,959
17,000 Bridgestone Corporation ............ 168,574
17,000 Canon, Inc. ........................ 674,609
30,000 Daiwa House Industry Company 188,333
6,000 FamilyMart Company, Ltd. ........... 158,915
7,000 Fuji Photo Film Company, Ltd. ...... 259,818
21,000 Fujitsu Ltd. ....................... 374,137
48,000 Hitachi, Ltd. ...................... 514,686
10,000 Honda Motor Company, Ltd. .......... 345,507
8,000 Ito-Yokado Company, Ltd. ........... 361,453
18,000 Kao Corporation .................... 539,431
900 Kyocera Corporation ................ 117,124
3,000 Mabuchi Motor Company, Ltd. ........ 320,579
18,000 Marui Company, Ltd. ................ 265,591
2,900 Matsushita Communication
Industries ....................... 380,058
65,000 Mitsubishi Heavy Industries
Company* ......................... 252,578
25,000 Mitsui Marine & Fire Insurance ..... 126,930
12,000 MKC-STAT Corporation* .............. 197,956
9,000 Namco Ltd. ......................... 232,599
18,000 Nomura Securities Company,
Ltd.* ............................ 381,891
48 NTT Corporation* ................... 436,824
34 NTT Docomo Inc. .................... 838,198
2,400 Rohm Company, Ltd. ................. 605,086
8,000 Secom Company, Ltd. ................ 570,407
12,000 Shin-Etsu Chemical Company,
Ltd. ............................. 492,691
5,900 Sony Corporation ................... 471,503
34,000 Sumitomo Bakelite Company,
Ltd. ............................. 380,461
33,000 Sumitomo Electric Industries ....... 609,403
11,000 Taisho Pharmaceutical Company 316,547
The accompanying notes are an integral part of the financial statements.
30
<PAGE>
--------------------------------------------------------------------------------
HERITAGE SERIES TRUST - EAGLE INTERNATIONAL EQUITY PORTFOLIO
INVESTMENT PORTFOLIO
OCTOBER 31, 2000
(CONTINUED)
--------------------------------------------------------------------------------
MARKET
SHARES VALUE
------ -----
COMMON STOCKS (CONTINUED)
-------------------------
JAPAN (CONTINUED)
-----------------
3,600 Takefuji Corporation .............. $ 356,321
45,000 Toppan Printing Company, Ltd. ..... 397,562
2,000 Trend Micro Inc.* ................. 188,792
14,000 Yamanouchi Pharmaceutical ......... 633,827
-----------
12,741,849
-----------
MEXICO--2.6%
------------
87,000 Grupo Financiero Banamex, SA,
Series "O"* ..................... 135,197
5,100 Grupo Televisa, SA,
Sponsored GDR* .................. 276,037
8,350 Telefonos de Mexico,
Sponsored ADR ................... 450,378
141,000 Wal-Mart de Mexico SA
Class "V"* ...................... 339,137
-----------
1,200,749
-----------
NETHERLANDS--4.4%
-----------------
30,511 Elsevier, NV ...................... 389,669
4,466 ING Groep NV ...................... 306,675
6,543 Kon Philips Electronics NV ........ 257,131
22,513 VNU, NV ........................... 1,060,302
-----------
2,013,777
-----------
POLAND--0.2%
------------
14,000 Polski Koncern Naftowy,
Sponsored GDR* .................. 107,800
-----------
SINGAPORE--0.7%
---------------
12,000 DBS Group Holdings* ............... 141,434
39,000 Overseas Union Bank* .............. 188,749
-----------
330,183
-----------
SOUTH AFRICA--0.4%
------------------
1,850 Anglo American Platinum
Corporation* .................... 72,173
12,000 Barloworld Ltd* ................... 62,684
96,000 Softline Ltd.* .................... 39,864
-----------
174,721
-----------
SPAIN--4.9%
-----------
30,630 Amadeus Global Travel,
Series "A"* ..................... 250,309
41,162 Banco Bilbao Vizcaya Argenta* 548,402
57,442 Banco Santander Central Hisp ...... 556,671
46,388 Telefonica SA* .................... 884,529
-----------
2,239,911
-----------
MARKET
SHARES VALUE
------ -----
COMMON STOCKS (CONTINUED)
-------------------------
SWEDEN--3.0%
------------
82,300 Ericson, Class "B" .............. 1,095,433
19,100 Foreningsparbanken, AB,
Class "A" ..................... 274,296
---------
1,369,729
---------
SWITZERLAND--1.2%
-----------------
3,900 UBS AG* ......................... 540,220
---------
UK--19.8%
---------
32,000 3I Group, PLC ................... 726,635
31,000 BP Amoco, PLC ................... 262,905
27,000 Cable & Wireless, PLC ........... 381,962
38,000 Energis, PLC* ................... 325,027
35,500 Glaxo Welcome, PLC .............. 1,021,933
47,000 HSBC Holdings, PLC* ............. 669,671
13,000 Kingfisher, PLC* ................ 77,713
34,000 Marconi, PLC .................... 424,751
40,000 Prudential Corporation, PLC ..... 538,012
72,000 Sage Group, PLC ................. 525,476
33,000 Sema Group, PLC ................. 416,567
57,000 Shell Transport & Trading
Company, PLC .................. 458,594
46,000 SmithKline Beecham, PLC ......... 594,019
20,991 Smiths Industries, PLC .......... 224,772
519,333 Vodafone Airtouch Group, PLC 2,160,735
21,000 WPP Group, PLC .................. 281,847
---------
9,090,619
---------
Total Common Stocks (cost $37,704,391)..... 42,389,626
----------
PREFERRED SHARES -- 0.3%(a)
---------------------------
BRAZIL--0.3%
------------
5,300 Petrobras, Sponsored ADR ........ 140,450
----------
Total Preferred Shares (cost $61,666) ....... 140,450
----------
PRINCIPAL MARKET
AMOUNT VALUE
------ -----
CONVERTIBLE PREFERRED SHARES--0.7% (a)
--------------------------------------
JAPAN--0.7%
-----------
30,000,000 Sanwa International Finance
(Bermuda), 1.25%, 01/08/05(b).... 324,085
-------
Total Convertible Preferred Shares
(cost $250,348)............................. 324,085
-------
The accompanying notes are an integral part of the financial statements.
31
<PAGE>
--------------------------------------------------------------------------------
HERITAGE SERIES TRUST - EAGLE INTERNATIONAL EQUITY PORTFOLIO
INVESTMENT PORTFOLIO
OCTOBER 31, 2000
(CONTINUED)
--------------------------------------------------------------------------------
MARKET
VALUE
-----
Total Investment Portfolio excluding
repurchase agreement (cost $38,016,405)................ 42,854,161
-----------
REPURCHASE AGREEMENT--1.5%(a)
-----------------------------
Repurchase Agreement with State Street
Bank and Trust Company, dated October 31,
2000 @ 6.30% to be repurchased at $705,123
on November 1, 2000 collateralized by
$585,000 United States Treasury Bonds,
7.50% due November 15, 2024 (market value
$716,482 including interest) (cost $705,000)........... $ 705,000
-----------
TOTAL INVESTMENT PORTFOLIO
(cost $38,721,405)(c), 94.8 (a)...................... 43,559,161
OTHER ASSETS AND LIABILITIES, net, 5.2% (a)............ 2,388,545
-----------
NET ASSETS, 100.0%..................................... $45,947,706
===========
* Non-income producing security.
(a) Percentages indicated are based on net assets.
(b) Principal amount is stated in Japanese Yen.
(c) The aggregate identified cost for federal income tax purposes is
substantially the same. Market value includes net unrealized appreciation
of $4,837,756 which consists of aggregate gross unrealized appreciation for
all securities in which there is an excess of market value over tax cost
of $7,267,174 and aggregate gross unrealized depreciation for all
securities in which there is an excess of tax cost over market value of
$2,429,418.
ADR -- American Depository Receipt.
ADS -- American Depository Shares.
GDR -- Global Depository Receipt.
The accompanying notes are an integral part of the financial statements.
32
<PAGE>
--------------------------------------------------------------------------------
HERITAGE SERIES TRUST - EAGLE INTERNATIONAL EQUITY PORTFOLIO
INVESTMENT PORTFOLIO
OCTOBER 31, 2000
(CONTINUED)
--------------------------------------------------------------------------------
MARKET % OF NET
INDUSTRY DIVERSIFICATION VALUE ASSETS
------------------------ ----- ------
COMMON STOCKS
Aerospace .................................... $ 514,144 1.1%
Automobiles .................................. 514,081 1.1%
Banks ........................................ 3,730,594 8.1%
Chemicals .................................... 1,269,651 2.8%
Construction & Building Materials ............ 188,333 0.4%
Diversified Industries ....................... 1,322,612 2.9%
Electronic & Electrical Equipment ............ 2,082,075 4.5%
Engineering & Machinery ...................... 252,578 0.5%
Food & Drug Retailers ........................ 589,718 1.3%
General Retailers ............................ 1,043,895 2.3%
Household Goods & Textiles ................... 471,503 1.0%
Insurance .................................... 952,197 2.1%
IT Hardware .................................. 4,666,767 10.3%
Leisure, Entertainment & Hotels .............. 232,599 0.5%
Life Assurance ............................... 1,894,658 4.1%
Media & Photography .......................... 2,665,235 5.8%
Mining ....................................... 72,173 0.2%
Oil & Gas .................................... 2,026,285 4.4%
Personal Care & Household Products ........... 539,431 1.2%
Pharmaceuticals .............................. 3,820,639 8.3%
Real Estate .................................. 316,627 0.7%
Software & Computer Services ................. 1,927,076 4.2%
Speciality & Other Finance ................... 2,085,196 4.5%
Services ..................................... 1,045,919 2.3%
Telecom Services ............................. 7,077,580 15.4%
Transportation ............................... 203,716 0.4%
Utilities, Water ............................. 884,344 1.9%
PREFERRED SHARES
Banks ........................................ 324,085 0.7%
Oil & Gas .................................... 140,450 0.3%
REPURCHASE AGREEMENT ........................... 705,000 1.5%
------------ ----
TOTAL INVESTMENTS .............................. $ 43,559,161 94.8%
============ ====
The accompanying notes are an integral part of the financial statements.
33
<PAGE>
--------------------------------------------------------------------------------
HERITAGE SERIES TRUST - GROWTH EQUITY FUND
INVESTMENT PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
MARKET
SHARES VALUE
------ -----
COMMON STOCKS--92.5% (a)
------------------------
ANALOG SEMICONDUCTORS--1.1%
---------------------------
55,100 Linear Technology Corporation ...... $ 3,557,394
-----------
BANKS--1.4%
-----------
88,133 Citigroup Inc. ..................... 4,637,999
-----------
BEVERAGES--3.4%
---------------
235,500 Anheuser-Busch Companies,
Inc. ............................. 10,774,125
-----------
COMMUNICATION SEMICONDUCTORS--0.9%
----------------------------------
7,100 Broadcom Corporation,
Class "A"* ....................... 1,578,863
17,150 JDS Uniphase Corporation* .......... 1,395,581
-----------
2,974,444
-----------
COMMUNICATIONS EQUIPMENT--9.6%
------------------------------
152,200 Acterna Corporation* ............... 2,435,200
269,600 Cisco Systems, Inc.* ............... 14,524,700
71,100 Corvis Corporation* ................ 4,665,938
187,300 Motorola, Inc. ..................... 4,670,794
94,100 Nortel Networks Corporation ........ 4,281,550
-----------
30,578,182
-----------
COMPUTER EQUIPMENT--3.6%
------------------------
169,000 Compaq Computer Corporation 5,139,290
46,800 Dell Computer Corporation* ......... 1,380,600
97,500 Gateway Inc.* ...................... 5,031,975
-----------
11,551,865
-----------
COMPUTER PERIPHERAL EQUIPMENT--9.6%
-----------------------------------
6,800 Brocade Communications
Systems Inc.* .................... 1,546,150
34,800 Celestica, Inc.* ................... 2,501,250
170,300 EMC Corporation* ................... 15,167,344
67,700 Jabil Circuit, Inc.* ............... 3,863,131
34,300 McData Corporation, Class B* ....... 2,859,227
111,600 Solectron Corporation* ............. 4,910,400
-----------
30,847,502
-----------
COMPUTER SYSTEMS DESIGN--4.7%
-----------------------------
42,200 Cabletron Systems, Inc.* ........... 1,144,675
31,600 Commerce One Inc.* ................. 2,028,325
105,850 Sun Microsystems, Inc.* ............ 11,736,119
-----------
14,909,119
-----------
ELECTRONIC EQUIPMENT--2.5%
--------------------------
148,500 General Electric Company ........... 8,139,655
-----------
ENTERTAINMENT--1.7%
-------------------
73,000 Time Warner, Inc. .................. 5,541,430
-----------
MARKET
SHARES VALUE
------ -----
COMMON STOCKS (CONTINUED)
-------------------------
FINANCIAL INSTITUTIONS--2.8%
----------------------------
55,550 Providian Financial Corporation 5,777,200
55,600 American Express Company ............ 3,336,000
---------
9,113,200
---------
INDUSTRIAL MEASURING DEVICES--0.9%
----------------------------------
39,700 Waters Corporation* ................. 2,880,731
---------
INFORMATION RETRIEVAL SERVICES--4.3%
------------------------------------
117,700 America Online, Inc.* ............... 5,935,611
126,400 YAHOO! Inc.* ........................ 7,410,200
---------
13,345,811
----------
INSURANCE--1.9%
---------------
63,387 American International Group,
Inc. .............................. 6,211,926
----------
MEDICAL EQUIPMENT--4.1%
-----------------------
41,400 Johnson & Johnson ................... 3,813,975
96,400 Medtronic, Inc. ..................... 5,235,725
35,200 PE Corporation-PE Biosystems
Group ............................. 4,118,400
----------
13,168,100
----------
MEMORY & COMMODITY SEMICONDUCTORS--2.3%
---------------------------------------
24,350 ChipPAC, Inc.* ...................... 210,019
203,900 Micron Technology, Inc.* ............ 7,085,525
----------
7,295,544
----------
OIL & Gas--2.3%
---------------
84,000 Enron Corporation ................... 6,893,250
26,500 W-H Energy Services, Inc.* .......... 367,688
----------
7,260,938
----------
OTHER INVESTMENT COMPANIES--2.6%
--------------------------------
60,700 NASDAQ - 100 Share UIT* ............. 4,975,503
52,650 Semiconductor HOLDRs
Trust* ............................ 3,464,370
----------
8,439,873
----------
PHARMACEUTICAL--11.4%
---------------------
53,500 ALZA Corporation* ................... 4,330,155
25,500 Forest Laboratories, Inc.,
Class "A"* ........................ 3,378,750
58,800 Genentech Inc.* ..................... 4,851,000
82,100 Merck & Company, Inc. ............... 7,383,869
216,200 Pfizer, Inc. ........................ 9,337,138
131,900 Pharmacia Corporation ............... 7,254,500
----------
36,535,412
----------
The accompanying notes are an integral part of the financial statements.
34
<PAGE>
--------------------------------------------------------------------------------
HERITAGE SERIES TRUST - GROWTH EQUITY FUND
INVESTMENT PORTFOLIO
OCTOBER 31, 2000
(CONTINUED)
--------------------------------------------------------------------------------
MARKET
SHARES VALUE
------ -----
COMMON STOCKS (CONTINUED)
-------------------------
POLLUTION CONTROL--1.7%
-----------------------
276,700 Waste Management Holdings,
Inc. ............................. $ 5,534,000
------------
RETAIL STORES--5.2%
-------------------
79,900 Costco Wholesale Corporation* 2,926,337
144,550 Home Depot, Inc. ................... 6,215,650
168,400 Wal-Mart Stores, Inc. .............. 7,641,150
------------
16,783,137
------------
SECURITY DEALERS--2.8%
----------------------
36,500 Goldman Sachs Group, Inc. .......... 3,643,156
51,400 Lehman Brothers Holdings,
Inc. ............................. 3,315,300
27,000 Merrill Lynch & Company, Inc. ...... 1,890,000
------------
8,848,456
------------
SOFTWARE--11.6%
---------------
7,800 i2 Technologies, Inc.* ............. 1,326,000
7,500 Ariba, Inc.* ....................... 947,813
9,000 Check Point Software
Technologies Ltd.* ............... 1,425,375
104,300 E.piphany, Inc.* ................... 9,400,038
204,650 Microsoft Corporation* ............. 14,095,269
11,100 Siebel Systems, Inc.* .............. 1,164,805
62,450 Veritas Software Corporation* ...... 8,806,426
------------
37,165,726
------------
UTILITIES--0.1%
---------------
26,800 TNPC, Inc.* ........................ 445,550
------------
Total Common Stocks (cost $252,157,290) ............ 296,540,119
------------
MARKET
VALUE
-----
REPURCHASE AGREEMENT--13.2%(a)
------------------------------
Repurchase Agreement with State Street
Bank and Trust Company, dated October 31,
2000 @ 6.30% to be repurchased at
$42,308,403 on November 1, 2000,
collateralized by $33,065,000 United States
Treasury Bonds, 8.50% due February 15,
2020, (market value $42,916,438 including
interest) (cost $42,301,000)........................ 42,301,000
------------
TOTAL INVESTMENT PORTFOLIO
(cost $294,458,290)(b), 105.7%(a)................. 338,841,119
OTHER ASSETS AND LIABILITIES, net (5.7%)(a)......... (18,381,906)
NET ASSETS, 100.0%.................................. $320,459,213
============
----------
* Non-income producing security.
(a) Percentages indicated are based on net assets.
(b) The aggregate identified cost for federal income tax purposes is
$304,558,766. Market value includes net unrealized appreciation of
$34,282,353 which consists of aggregate gross unrealized appreciation for
all securities in which there is an excess of market value over tax cost of
$39,951,758 and aggregate gross unrealized depreciation for all securities
in which there is an excess of tax cost over market value of $5,669,405.
UIT -- Unit Investment Trust.
The accompanying notes are an integral part of the financial statements.
35
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust - Mid Cap Stock Fund
Investment Portfolio
October 31, 2000
--------------------------------------------------------------------------------
MARKET
SHARES VALUE
---------- ------------
COMMON STOCKS--90.2% (a)
------------------------
BROADCASTING--5.2%
------------------
8,000 Cablevision Systems Corporation,
Class "A"* ........................... $ 596,000
27,800 Lodgenet Entertainment
Corporation* ......................... 488,238
15,625 Saga Communications Inc.,
Class "A"* ........................... 257,813
34,200 USA Networks, Inc.* ................... 692,550
----------
2,034,601
----------
COMMUNICATION SERVICES--8.7%
----------------------------
14,500 American Tower Corporation,
Class "A"* ........................... 593,594
20,000 CenturyTel Inc. ....................... 770,000
20,300 General Motors Corporation,
Class "H"* ........................... 657,720
9,150 Price Communications
Corporation* .......................... 197,869
3,300 Telephone & Data Systems, Inc. ........ 348,150
18,000 Western Wireless Corporation,
Class "A"* ........................... 855,000
----------
3,422,333
----------
COMMUNICATIONS EQUIPMENT--5.3%
------------------------------
9,000 L-3 Communications Holdings,
Inc.* ................................ 593,437
18,500 Commscope, Inc.* ...................... 468,281
11,300 Gilat Satellite Networks Ltd* ......... 578,419
10,500 Information Resource
Engineering, Inc.* ................... 441,000
----------
2,081,137
----------
COMPUTER PERIPHERAL EQUIPMENT--2.7%
-----------------------------------
8,600 Avocent Corporation* .................. 610,063
4,000 InFocus Systems, Inc.* ................ 176,750
2,500 Sanmina Corporation* .................. 285,781
----------
1,072,594
----------
COMPUTER SYSTEMS DESIGN--0.7%
-----------------------------
10,500 FileNET Corporation* .................. 278,250
----------
ELECTRONIC EQUIPMENT--5.3%
--------------------------
12,400 Amphenol Corporation
Class "A"* ........................... 796,700
28,000 Pemstar Inc.* ......................... 409,500
12,000 Tektronix, Inc. ....................... 855,000
----------
2,061,200
----------
ENTERTAINMENT--2.6%
-------------------
18,000 International Game Technology* . 659,250
22,000 Penn National Gaming, Inc.* ........... 385,000
----------
1,044,250
----------
MARKET
SHARES VALUE
---------- ------------
COMMON STOCKS (CONTINUED)
-------------------------
HEALTH CARE--5.1%
-----------------
35,500 Health Management Associates,
Inc., Class "A"* .................. 703,344
3,500 Laboratory Corporation of
America Holdings* ................. 472,063
20,000 Lincare Holdings, Inc.* ............ 841,250
---------
2,016,657
---------
INDUSTRIAL MEASURING DEVICES--1.3%
----------------------------------
14,400 Roper Industries Inc. .............. 504,000
---------
INFORMATION RETRIEVAL SERVICES--3.0%
------------------------------------
18,000 FactSet Research Systems Inc. ...... 681,660
9,500 SunGard Data Systems Inc.* ......... 485,688
---------
1,167,348
---------
INSURANCE--12.0%
----------------
15,500 AMBAC Financial Group, Inc. ........ 1,237,094
28,500 Brown & Brown, Inc. ................ 926,250
16,600 Everest Re Group, Ltd. ............. 973,175
8,000 PartnerRe Ltd. ..................... 436,000
9,000 Radian Group Inc. .................. 637,874
12,500 Stancorp Financial Group ........... 509,375
---------
4,719,768
---------
MANUFACTURING INDUSTRIES--2.1%
------------------------------
9,200 Alliant Techsystems, Inc.* ......... 827,425
---------
MEDICAL EQUIPMENT--5.7%
-----------------------
18,500 Patterson Dental Company* .......... 579,281
3,500 Quest Diagnostics Inc.* ............ 336,875
25,000 Sybron International
Corporation* ...................... 618,750
14,000 Varian Medical Systems Inc.* ....... 684,250
---------
2,219,156
---------
MISCELLANEOUS SERVICES--3.9%
----------------------------
22,000 Concord EFS, Inc.* ................. 908,875
17,750 Iron Mountain Inc.* ................ 600,172
---------
1,509,047
---------
OIL & GAS--2.9%
---------------
24,000 Core Laboratories N.V.,
Sponsored ADR* .................... 517,500
16,000 Newfield Exploration Company* ...... 604,000
---------
1,121,500
---------
The accompanying notes are an integral part of the financial statements.
36
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust - Mid Cap Stock Fund
Investment Portfolio
October 31, 2000
(continued)
--------------------------------------------------------------------------------
MARKET
SHARES VALUE
----------- -------------
COMMON STOCKS (CONTINUED)
-------------------------
OTHER INVESTMENT COMPANIES--0.9%
--------------------------------
7,500 John Nuveen Company ................... $ 358,125
-----------
PHARMACEUTICAL--5.2%
--------------------
10,000 Digene Corporation* ................... 324,531
8,000 Invitrogen Corporation* ............... 608,500
19,150 KV Pharmaceutical Company,
Class "A"* ........................... 745,653
6,500 Praecis Pharmaceuticals, Inc.* ........ 164,937
4,200 Titan Pharmaceuticals, Inc.* .......... 176,736
-----------
2,020,357
-----------
POLLUTION CONTROL--1.6%
-----------------------
19,000 Stericycle Inc.* ...................... 615,125
-----------
PRINTING & PUBLISHING--5.3%
---------------------------
10,800 Harcourt General, Inc. ................ 605,340
28,000 John Wiley & Sons, Inc.,
Class "A" ............................ 572,250
29,000 Penton Media Inc. ..................... 886,313
-----------
2,063,903
-----------
PROFESSIONAL SERVICES--5.6%
---------------------------
27,000 Catalina Marketing
Corporation* ......................... 1,059,750
34,000 Moody's Corporation ................... 894,625
7,200 ProBusiness Services, Inc.* ........... 235,350
-----------
2,189,725
-----------
RETAIL STORES--1.2%
-------------------
14,300 BJ's Wholesale Club, Inc.* ............ 471,006
-----------
SOFTWARE--3.9%
--------------
10,900 Advent Software, Inc.* ................ 651,955
8,500 DST Systems Inc.* ..................... 523,813
6,100 RSA Security, Inc.* ................... 353,800
-----------
1,529,568
-----------
Total Common Stocks (cost $28,589,623) .......... 35,327,075
-----------
MARKET
VALUE
----------
REPURCHASE AGREEMENT--6.8%(a)
-----------------------------
Repurchase Agreement with State Street Bank
and Trust Company, dated October 31, 2000 @
6.30% to be repurchased at $2,672,468 on
November 1, 2000, collateralize by $2,060,000
United States Treasury Bonds, 8.875% due
August 15, 2017, (market value $2,714,645
including interest) (cost $2,672,000).......... 2,672,000
------------
TOTAL INVESTMENT PORTFOLIO
(cost $31,261,623)(b), 97.0%(a) 37,999,075
OTHER ASSETS AND LIABILITIES, NET, 3.0%(A) 1,178,573
------------
NET ASSETS, 100.0% $ 39,177,648
============
----------
* Non-income producing security.
(a) Percentages indicated are based on net assets.
(b) The aggregate identified cost for federal income tax purposes is
substantially the same. Market value includes net unrealized appreciation
of $6,737,452 which consists of aggregate gross unrealized appreciation for
all securities in which there is an excess of market value over tax cost of
$7,216,598 and aggregate gross unrealized depreciation for all securities
in which there is an excess of tax cost over market value of $479,146.
ADR -- American Depository Receipt.
The accompanying notes are an integral part of the financial statements.
37
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust - Small Cap Stock Fund
Investment Portfolio
October 31, 2000
--------------------------------------------------------------------------------
MARKET
SHARES VALUE
----------- -------------
COMMON STOCKS--89.0% (a)
------------------------
AUTOMOTIVE--3.3%
----------------
227,000 Gentex Corporation* ................. $ 5,618,250
-----------
BANKS--2.7%
-----------
115,900 Capital Crossing Bank* .............. 1,046,722
30,000 Colonial BancGroup, Inc. ............ 264,375
70,000 ITLA Capital Corporation* ........... 1,019,375
85,000 North Fork Bancorporation ........... 1,715,938
50,000 Waypoint Financial
Corporation* ........................ 481,250
-----------
4,527,660
-----------
BEVERAGES--0.9%
---------------
32,500 Constellation Brands, Inc.* ......... 1,584,375
-----------
BROADCASTING--1.8%
------------------
111,000 Citadel Communications,
Corporation* ....................... 1,345,875
186,400 Spanish Broadcasting System,
Class "A"* ......................... 1,677,600
-----------
3,023,475
-----------
COMMUNICATION SERVICES--2.6%
----------------------------
117,500 Alaska Communications Systems
Group Inc.* ........................ 800,468
70,000 American Tower Corporation,
Class "A"* ......................... 2,865,625
50,000 RMH Teleservices, Inc.* ............. 718,750
2,500 West Teleservices Corporation* ...... 63,750
-----------
4,448,593
-----------
COMMUNICATIONS EQUIPMENT--6.1%
------------------------------
142,500 Commscope, Inc.* .................... 3,607,031
110,000 EMS Technologies Inc* ............... 1,746,250
35,500 International Fibercom Inc.* ........ 457,063
45,000 MasTec, Inc.* ....................... 1,302,188
30,000 REMEC, Inc.* ........................ 894,375
45,000 Sawtek, Inc.* ....................... 2,289,375
-----------
10,296,282
-----------
COMPUTER EQUIPMENT--1.0%
------------------------
70,000 Maxtor Corporation* ................. 546,875
29,000 Tech Data Corporation* .............. 1,207,125
-----------
1,754,000
-----------
COMPUTER PERIPHERAL EQUIPMENT--2.6%
-----------------------------------
70,000 Avid Technology, Inc.* .............. 971,250
50,000 InFocus Systems, Inc.* .............. 2,209,375
138,875 Printronix, Inc.* ................... 1,249,875
-----------
4,430,500
-----------
MARKET
SHARES VALUE
----------- ------------
COMMON STOCKS (CONTINUED)
-------------------------
COMPUTER SYSTEMS DESIGN--0.9%
-----------------------------
125,000 Comdisco, Inc. ...................... 1,539,063
---------
CONSTRUCTION & CONSTRUCTION PRODUCTS--1.3%
------------------------------------------
55,800 Martin Marietta Materials, Inc. ..... 2,142,720
---------
EDUCATION--2.1%
---------------
82,250 New Horizons Worldwide, Inc.* 1,192,624
100,000 Strayer Education, Inc. ............. 2,406,250
---------
3,598,874
---------
ELECTRONIC EQUIPMENT--4.6%
--------------------------
60,000 Applica Incorporated* ............... 303,750
150,000 Artesyn Technologies, Inc.* ......... 6,093,750
71,500 Universal Electronics, Inc.* ........ 1,313,813
---------
7,711,313
---------
ENTERTAINMENT--0.6%
-------------------
60,000 World Wrestling Federation
Entertainment Inc.* ................ 907,500
---------
FINANCIAL INSTITUTIONS--9.4%
----------------------------
186,000 Doral Financial Corporation ......... 3,324,750
173,000 Investors Financial Services
Corporation ........................ 12,401,938
----------
15,726,688
----------
FOOD--1.3%
----------
80,000 Corn Products International,
Inc................................. 2,010,000
28,900 Del Monte Foods Company* ............ 175,206
----------
2,185,206
----------
HEALTH CARE--1.4%
-----------------
192,500 Health Management Systems,
Inc.* .............................. 288,750
215,000 Hooper Holmes, Inc. ................. 2,040,350
44,444 SurVivaLink Corporation* (b) ........ 13,333
----------
2,342,433
----------
INDUSTRIAL MEASURING DEVICES--0.1%
----------------------------------
10,000 OYO Geospace Corporation* ........... 177,500
----------
INFORMATION RETRIEVAL SERVICES--2.3%
------------------------------------
24,000 Affiliated Computer Services
Inc.* .............................. 1,336,500
89,000 Audible Inc.* ....................... 86,218
65,000 FactSet Research Systems Inc. ....... 2,461,550
----------
3,884,268
----------
The accompanying notes are an integral part of the financial statements.
38
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust - Small Cap Stock Fund
Investment Portfolio
October 31, 2000
(continued)
--------------------------------------------------------------------------------
MARKET
SHARES VALUE
----------- -------------
COMMON STOCKS (CONTINUED)
-------------------------
INSURANCE--2.4%
---------------
89,375 Annuity And Life Re (Holdings),
Ltd. .............................. $ 2,463,398
105,000 Presidential Life Corporation ...... 1,529,063
-----------
3,992,461
-----------
MANUFACTURING INDUSTRIES--1.2%
------------------------------
90,000 Kaydon Corporation ................. 1,974,375
-----------
MEDICAL EQUIPMENT--4.3%
-----------------------
123,456 Angiosonics, Inc.* (b) ............. 39,506
81,200 Coherent, Inc.* .................... 2,826,775
51,000 Cytyc Corporation* ................. 3,028,125
100,000 Edwards Lifesciences
Corporation* ....................... 1,343,750
-----------
7,238,156
-----------
MEMORY & COMMODITY SEMICONDUCTORS--0.1%
---------------------------------------
6,150 ChipPAC, Inc.* ..................... 53,044
-----------
MISCELLANEOUS SERVICES--6.5%
----------------------------
55,000 Iron Mountain Inc.* ................ 1,859,688
150,000 Nova Corporation* .................. 2,353,125
80,000 Spherion Corporation* .............. 950,000
104,800 StarTek, Inc.* ..................... 2,665,850
46,000 Steiner Leisure, Ltd.* ............. 1,012,000
59,500 Teletech Holdings Inc.* ............ 1,651,124
50,000 Wackenhut Corporation,
Class "B"* ........................ 375,000
-----------
10,866,787
-----------
OIL & GAS--1.1%
---------------
40,000 Patterson Energy Inc.* ............. 1,125,000
25,000 Spinnaker Exploration
Company* .......................... 756,250
-----------
1,881,250
-----------
PHARMACEUTICAL--2.7%
--------------------
9,000 Ciphergen Biosystems, Inc.* ........ 279,000
105,000 Collateral Therapeutics, Inc.* ..... 2,654,531
10,000 Deltagen Inc.* ..................... 158,750
35,000 Praecis Pharmaceuticals, Inc.*..... 888,125
35,800 Variagenics, Inc.* ................. 590,700
-----------
4,571,106
-----------
POLLUTION CONTROL--0.2%
-----------------------
70,800 IMCO Recycling, Inc. ............... 393,825
-----------
PRINTING & PUBLISHING--7.2%
---------------------------
76,000 Houghton Mifflin Company ........... 2,797,750
205,200 John Wiley & Sons, Inc.,
Class "A" ......................... 4,193,775
MARKET
SHARES VALUE
----------- --------------
COMMON STOCKS (CONTINUED)
-------------------------
PRINTING & PUBLISHING (CONTINUED)
---------------------------------
110,500 Penton Media Inc. ..................... 3,377,156
60,000 Valassis Communications, Inc.* ........ 1,665,000
---------
12,033,681
----------
PROFESSIONAL SERVICES--0.6%
---------------------------
101,500 Ventiv Health Inc.* ................... 1,091,125
----------
REAL ESTATE INVESTMENT TRUSTS--0.8%
-----------------------------------
70,000 Meristar Hospitality Corporation ...... 1,338,750
----------
RESTAURANTS--0.4%
-----------------
25,000 Outback Steakhouse, Inc.* ............. 712,500
----------
RETAIL STORES--3.0%
-------------------
250,000 Cash America International, Inc. . 1,296,875
46,000 Claire's Stores Inc. .................. 925,750
90,000 Genesco Inc.* ......................... 1,597,500
60,000 Pacific Sunwear of California,
Inc.,* ............................... 1,230,000
----------
5,050,125
----------
SECURITY DEALERS--4.8%
----------------------
50,000 Dain Rauscher Corporation ............. 4,690,624
95,000 Investment Technology Group
Inc.* ................................ 3,420,000
----------
8,110,624
----------
SOFTWARE--6.5%
--------------
85,000 Cerner Corporation* ................... 5,264,688
135,000 Datastream Systems, Inc.* ............. 1,653,750
8,000 E.piphany, Inc.* ...................... 721,000
60,000 InforMax, Inc.* ....................... 1,668,750
45,000 Kronos Inc.* .......................... 1,639,688
----------
10,947,876
----------
TRANSPORTATION--1.1%
--------------------
215,000 Kansas City Southern Industries,
Inc. ................................. 1,867,813
----------
WHOLESALE PRODUCTS--1.1%
------------------------
75,000 Hughes Supply, Inc. ................... 1,406,250
30,000 MSC Industrial Direct Company,
Inc.* ............................... 446,250
----------
1,852,500
----------
Total Common Stocks (cost $121,877,137)........ 149,874,698
-----------
The accompanying notes are an integral part of the financial statements.
39
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust - Small Cap Stock Fund
Investment Portfolio
October 31, 2000
(continued)
--------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------------
CONVERTIBLE BONDS--0.3% (a)
---------------------------
MEDICAL EQUIPMENT--0.3%
-----------------------
$ 1,000,000 Angeion Corporation,
7.5%, 04/15/03 (b) ............ $ 550,000
------------
Total Convertible Bonds (cost $1,000,000)...... 550,000
------------
Total Investment Portfolio excluding
repurchase agreement (cost $122,877,137)..... 150,424,698
------------
REPURCHASE AGREEMENT--11.7% (A)
-------------------------------
Repurchase Agreement with State Street
Bank and Trust Company, dated October 31,
2000 @ 6.30% to be repurchased at
$19,752,456 on November 1, 2000,
collateralized by $16,250,000 United States
Treasury Bonds, 7.875% due February 15,
2021, (market value $20,021,667 including
interest) (cost $19,749,000) .................. 19,749,000
------------
TOTAL INVESTMENT PORTFOLIO
(cost $142,626,137)(c), 101.0%(a)............ 170,173,698
OTHER ASSETS AND LIABILITIES, net, (1.0%) (a).. (1,667,622)
------------
NET ASSETS, 100.0% ............................ $168,506,076
============
----------
* Non-income producing security.
(a) Percentages indicated are based on net assets.
(b) Private placement and illiquid securities are fair valued according to
procedures adopted by the Board of Trustees.
(c) The aggregate identified cost for federal income tax purposes is
substantially the same. Market value includes net unrealized appreciation
of $27,547,561 which consists of aggregate gross unrealized appreciation
for all securities in which there is an excess of market value over tax
cost of $40,709,917 and aggregate gross unrealized depreciation for all
securities in which there is an excess of tax cost over market value of
$13,162,356.
The accompanying notes are an integral part of the financial statements.
40
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust - Technology Fund
Investment Portfolio
October 31, 2000
--------------------------------------------------------------------------------
MARKET
SHARES VALUE
----------- -------------
COMMON STOCKS--95.5%(a)
-----------------------
ANALOG SEMICONDUCTORS--3.6%
---------------------------
20,000 Analog Devices, Inc.* ............. $ 1,300,000
3,000 Avanex Corporation* ............... 304,688
24,550 Linear Technology Corporation 1,585,009
75,000 Virata Corporation* ............... 1,453,125
-----------
4,642,822
-----------
COMMUNICATION SEMICONDUCTORS--6.3%
----------------------------------
20,600 Applied Micro Circuits
Corporation* ..................... 1,573,325
50,900 GlobeSpan, Inc.* .................. 3,916,119
10,800 JDS Uniphase Corporation* ......... 878,850
10,200 PMC-Sierra, Inc.* ................. 1,728,900
-----------
8,097,194
-----------
COMMUNICATION SERVICES--0.6%
----------------------------
51,000 OmniSky Corporation* .............. 714,000
-----------
COMMUNICATIONS EQUIPMENT--12.0%
-------------------------------
161,800 Acterna Corporation* .............. 2,588,800
15,000 Avici Systems* .................... 650,625
110,000 Cisco Systems, Inc.* .............. 5,926,250
15,000 Corning, Inc. ..................... 1,147,500
33,000 Corvis Corporation* ............... 2,165,625
45,000 Nortel Networks Corporation ....... 2,047,500
5,000 ONI Systems Corporation* .......... 405,313
2,000 SDL, Inc.* ........................ 518,500
-----------
15,450,113
-----------
COMPUTER EQUIPMENT--11.6%
-------------------------
15,700 CacheFlow Inc.* ................... 1,695,600
168,500 Compaq Computer Corporation ....... 5,124,085
63,500 Dell Computer Corporation* ........ 1,873,250
74,300 Gateway Inc* ...................... 3,834,623
45,000 Palm, Inc.* ....................... 2,410,313
-----------
14,937,871
-----------
COMPUTER PERIPHERAL EQUIPMENT--20.6%
------------------------------------
5,000 Brocade Communications
Systems Inc.* .................... 1,136,875
61,000 Celestica, Inc.* .................. 4,384,375
66,000 EMC Corporation* .................. 5,878,125
72,900 Jabil Circuit, Inc.* .............. 4,159,856
23,500 McData Corporation, Class B* ...... 1,958,945
26,800 Sanmina Corporation* .............. 3,063,575
135,000 Solectron Corporation* ............ 5,940,000
-----------
26,521,751
-----------
MARKET
SHARES VALUE
--------- --------------
COMMON STOCK (CONTINUED)
------------------------
COMPUTER SYSTEMS DESIGN--7.9%
-----------------------------
137,000 Cabletron Systems, Inc.* . . 3,716,125
65,000 Cadence Design Systems, Inc.* ...... 1,669,687
35,800 Commerce One Inc.* ................. 2,297,913
23,000 Sun Microsystems, Inc.* ............ 2,550,125
----------
10,233,850
----------
INFORMATION RETRIEVAL SERVICES--1.1%
------------------------------------
25,000 YAHOO! Inc.* ....................... 1,465,625
----------
LOGIC SEMICONDUCTORS--5.2%
--------------------------
15,150 Xilinx, Inc.* ...................... 1,097,428
20,000 Altera Corporation* ................ 818,750
100,000 Intersil Holding Corporation* ...... 4,793,750
----------
6,709,928
----------
MEMORY & COMMODITY SEMICONDUCTORS--1.3%
---------------------------------------
45,800 Cypress Semiconductor
Corporation* ...................... 1,714,638
----------
SOFTWARE--24.1%
---------------
14,000 i2 Technologies, Inc.* ............. 2,380,000
10,000 Ariba, Inc.* ....................... 1,263,750
5,000 Art Technology Group* .............. 313,750
6,500 AvantGo, Inc.* ..................... 63,984
19,000 BEA Systems Inc.* .................. 1,363,250
65,000 E.piphany, Inc.* ................... 5,858,125
5,000 Micromuse, Inc.* ................... 848,438
110,000 Microsoft Corporation* ............. 7,576,250
39,000 Oracle Corporation* ................ 1,287,000
30,000 Phone.com, Inc.* ................... 2,776,874
25,000 Proxicom, Inc.* .................... 337,500
13,500 VeriSign, Inc.* .................... 1,782,000
36,500 Veritas Software Corporation* ...... 5,147,070
----------
30,997,991
----------
TRANSPORTATION SERVICES--1.2%
-----------------------------
45,000 SABRE Group Holdings, Inc.* 1,504,688
----------
Total Common Stocks
(cost $111,266,982)....................... 122,990,471
-----------
The accompanying notes are an integral part of the financial statements.
41
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust - Technology Fund
Investment Portfolio
October 31, 2000
(continued)
--------------------------------------------------------------------------------
MARKET
VALUE
-------------
REPURCHASE AGREEMENT--10.3%(a)
------------------------------
Repurchase Agreement with State Street Bank
and Trust Company, dated October 31, 2000
@ 6.30% to be repurchased at $13,329,332 on
November 1, 2000, collateralize by $10,420,000
United States Treasury Bonds, 8.50% due
February 15, 2020, (market value $13,526,179
including interest) (cost $13,327,000) ........... $ 13,327,000
------------
TOTAL INVESTMENT PORTFOLIO
(cost $124,593,982)(b), 105.8%(a)............... 136,317,471
OTHER ASSETS AND LIABILITIES, net, (5.8%)(a)...... (7,501,452)
------------
NET ASSETS, 100.0% .............................. $128,816,019
============
----------
* Non-income producing security.
(a) Percentages indicated are based on net assets.
(b) The aggregate identified cost for federal income tax purposes is
$136,663,555. Market value includes net unrealized depreciation of $346,084
which consists of aggregate gross unrealized appreciation for all
securities in which there is an excess of market value over tax cost of
$6,204,588 and aggregate gross unrealized depreciation for all securities
in which there is an excess of tax cost over market value of $ 6,550,672.
The accompanying notes are an integral part of the financial statements.
42
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust - Value Equity Fund
Investment Portfolio
October 31, 2000
--------------------------------------------------------------------------------
MARKET
SHARES VALUE
---------- ------------
COMMON STOCKS--77.0%(A)
-----------------------
AUTOMOTIVE--1.8%
----------------
11,000 TRW Inc ................................ $ 462,000
----------
BANKS--13.4%
------------
15,100 Citigroup Inc. ......................... 794,637
14,600 FleetBoston Financial
Corporation ........................... 554,800
28,100 National City Corporation .............. 600,637
26,000 Regions Financial Corporation .......... 612,625
4,700 Union Planters Corporation ............. 158,919
15,900 Washington Mutual, Inc. ................ 699,600
----------
3,421,218
----------
CHEMICALS--6.1%
---------------
4,961 E.I. du Pont de Nemours &
Company ............................... 225,105
26,300 Millennium Chemicals Inc. .............. 424,088
19,400 Rohm & Haas Company .................... 583,213
15,000 Sherwin-Williams Company ............... 325,312
----------
1,557,718
----------
COMMUNICATION SERVICES--7.3%
----------------------------
14,200 BellSouth Corporation .................. 686,038
10,900 SBC Communications, Inc. ............... 628,794
9,148 Verizon Communications ................. 528,869
----------
1,843,701
----------
COMPUTER PERIPHERAL EQUIPMENT--1.2%
-----------------------------------
7,400 Lexmark International Group,
Inc., Class "A"* ...................... 303,400
----------
COMPUTER SYSTEMS DESIGN--2.2%
-----------------------------
13,200 NCR Corporation* ....................... 569,250
----------
ELECTRONIC EQUIPMENT--4.3%
--------------------------
17,000 Arrow Electronics Inc.* ................ 544,000
13,700 Koninklijke Philips Electronics
N.V. .................................. 547,144
----------
1,091,144
----------
FOOD--4.3%
----------
26,000 ConAgra Foods, Inc. .................... 555,750
27,000 Universal Foods Corporation ............ 533,250
----------
1,089,000
----------
FURNITURE & FIXTURES--1.4%
--------------------------
18,000 Newell Rubbermaid Inc. ................. 345,374
----------
INSURANCE--3.2%
---------------
14,000 Everest Re Group, Ltd. ................. 820,750
----------
MARKET
SHARES VALUE
------------- ------------
COMMON STOCKS (CONTINUED)
-------------------------
MACHINERY--4.1%
---------------
14,000 Deere & Company ....................... 515,375
12,900 Parker Hannifin Corporation ........... 533,738
---------
1,049,113
---------
METAL PRODUCTS--1.8%
--------------------
16,400 Alcoa Inc. ............................ 470,475
---------
MINING--2.1%
------------
8,100 Rio Tinto PLC,
Sponsored ADR ........................ 527,513
---------
OIL & GAS--8.5%
---------------
15,000 Baker Hughes Inc. ..................... 515,625
22,340 Conoco Inc., Class "B" ................ 607,368
8,200 Phillips Petroleum Company ............ 506,350
18,900 Tosco Corporation ..................... 541,013
---------
2,170,356
---------
PAPER PRODUCTS--2.8%
--------------------
11,000 Kimberly-Clark Corporation ............ 726,000
---------
RESTAURANTS--1.9%
-----------------
15,900 McDonald's Corporation ................ 492,900
---------
SECURITY DEALERS--2.3%
----------------------
8,300 Merrill Lynch & Company, Inc. ......... 581,000
---------
TRANSPORTATION--1.1%
--------------------
2,000 Burlington Northern Santa Fe
Corporation........................... 53,125
8,000 CNF Transportation Inc. ............... 213,500
---------
266,625
---------
UTILITIES--7.2%
---------------
24,500 Edison International .................. 584,938
17,300 TXU Corporation ....................... 641,180
14,700 Williams Companies, Inc. .............. 614,644
---------
1,840,762
---------
Total Common Stocks (cost $18,077,793). ........ 19,628,299
----------
The accompanying notes are an integral part of the financial statements.
43
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust - Value Equity Fund
Investment Portfolio
October 31, 2000
(continued)
--------------------------------------------------------------------------------
MARKET
VALUE
-------------
REPURCHASE AGREEMENT--3.0%(a)
-----------------------------
Repurchase Agreement with
State Street Bank and Trust Company,
dated October 31, 2000 @ 6.30% to be
repurchased at $777,136 on
November 1, 2000, collateralized by $640,000
United States Treasury Bonds, 7.79% due
February 15, 2021, (market value $788,546
including interest)
(cost $777,000) ...................................... $ 777,000
-----------
TOTAL INVESTMENT PORTFOLIO
(cost $18,854,793)(b), 80.0%(a).................... 20,405,299
OTHER ASSETS AND LIABILITIES, net, 20.0% (a) ......... 5,096,582
-----------
NET ASSETS, 100.0% ................................... $25,501,881
===========
----------
* Non-income producing security.
(a) Percentages indicated are based on net assets.
(b) The aggregate identified cost for federal income tax purposes is
substantially the same. Market value includes net unrealized appreciation
of $1,550,506 which consists of aggregate gross unrealized appreciation for
all securities in which there is an excess of market value over tax cost of
$2,335,349 and aggregate gross unrealized depreciation for all securities
in which there is an excess of tax cost over market value of $784,843. ADR
-- American Depository Receipt.
The accompanying notes are an integral part of the financial statements.
44
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust
Statements of Assets and Liabilities
October 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EAGLE
AGGRESSIVE INTERNATIONAL
GROWTH EQUITY
FUND PORTFOLIO
------------------ ---------------
<S> <C> <C>
ASSETS
------
Investments, at market value (identified cost $80,419,766,
$38,016,405, $252,157,290 and $28,589,623, respectively)
(Note 1) ........................................................ $ 98,829,370 $ 42,854,161
Repurchase agreement, at market value (identified cost is the
same as market value) (Note 1) .................................. 11,925,000 705,000
Cash ............................................................. 650 379
Foreign currency (cost $262,197) ................................. -- 262,197
Receivables:
Investments sold ................................................ 7,273,418 373,027
Fund shares sold ................................................ 598,036 2,682,205
Dividends and interest .......................................... 48,662 39,380
Foreign taxes recoverable ....................................... -- 43,673
Deferred organization expenses (Note 1) .......................... -- --
Deferred state qualification expenses (Note 1) ................... 12,417 8,953
Prepaid insurance ................................................ 4,461 2,509
-------------- ------------
Total assets ................................................ $ 118,692,014 $ 46,971,484
-------------- ------------
LIABILITIES
-----------
Payables (Note 4):
Investments purchased ........................................... $ 11,739,688 $ 809,277
Fund shares redeemed ............................................ 84,680 59,621
Accrued management fee .......................................... 158,706 42,737
Accrued distribution fee ........................................ 56,620 33,798
Accrued shareholder servicing fees (Note 4) ..................... 43,100 15,039
Accrued fund accounting fees (Note 4) ........................... 17,818 14,500
Other accrued expenses .......................................... 39,220 48,806
-------------- ------------
Total liabilities ........................................... 12,139,832 1,023,778
-------------- ------------
Net assets, at market value ...................................... $ 106,552,182 $ 45,947,706
============== ============
NET ASSETS
----------
Net assets consist of:
Paid-in capital (Note 5) ........................................ $ 77,550,060 $ 37,684,795
Accumulated undistributed net investment loss ................... -- (65,145)
Accumulated net realized gain (Notes 1 and 5) ................... 10,592,518 3,491,244
Net unrealized appreciation on investments and other assets
and liabilities denominated in foreign currencies .............. 18,409,604 4,836,812
-------------- ------------
Net assets, at market value ...................................... $ 106,552,182 $ 45,947,706
============== ============
Net assets, at market value
Class A Shares .................................................. $ 49,902,702 $ 9,808,121
Class B Shares .................................................. 18,559,454 767,249
Class C Shares .................................................. 38,090,026 7,981,155
Eagle Shares .................................................... -- 27,391,181
-------------- ------------
Total ....................................................... $ 106,552,182 $ 45,947,706
============== ============
Shares of beneficial interest outstanding
Class A Shares .................................................. 1,817,209 357,871
Class B Shares .................................................. 687,797 28,965
Class C Shares .................................................. 1,411,721 301,361
Eagle Shares .................................................... -- 1,024,936
-------------- ------------
Total ....................................................... 3,916,727 1,713,133
============== ============
Net Asset Value--offering and redemption price per share
(Notes 1 and 2) Class A Shares .................................. $ 27.46 $ 27.41
============== ============
Maximum offering price per Class A share (100/95.25 of $27.46,
$27.41, $50.91 and $23.19, respectively) ....................... $ 28.83 $ 28.78
============== ============
Class B Shares .................................................. $ 26.98 $ 26.49
============== ============
Class C Shares .................................................. $ 26.98 $ 26.48
============== ============
Eagle Shares .................................................... $ 26.72
============
<CAPTION>
GROWTH MID CAP
EQUITY STOCK
FUND FUND
------------------ -----------------
<S> <C> <C>
ASSETS
------
Investments, at market value (identified cost $80,419,766,
$38,016,405, $252,157,290 and $28,589,623, respectively)
(Note 1) ........................................................ $ 296,540,119 $ 35,327,075
Repurchase agreement, at market value (identified cost is the
same as market value) (Note 1) .................................. 42,301,000 2,672,000
Cash ............................................................. 876 725
Foreign currency (cost $262,197) ................................. -- --
Receivables:
Investments sold ................................................ 8,149,191 4,439,264
Fund shares sold ................................................ 2,159,598 288,410
Dividends and interest .......................................... 31,897 468
Foreign taxes recoverable ....................................... -- --
Deferred organization expenses (Note 1) .......................... -- 10,339
Deferred state qualification expenses (Note 1) ................... 12,284 12,063
Prepaid insurance ................................................ 6,691 3,346
-------------- -------------
Total assets ................................................ $ 349,201,656 $ 42,753,690
-------------- -------------
LIABILITIES
-----------
Payables (Note 4):
Investments purchased ........................................... $ 27,793,880 $ 3,462,848
Fund shares redeemed ............................................ 383,619 19,767
Accrued management fee .......................................... 204,991 22,810
Accrued distribution fee ........................................ 183,362 17,555
Accrued shareholder servicing fees (Note 4) ..................... 91,844 12,000
Accrued fund accounting fees (Note 4) ........................... 18,274 14,957
Other accrued expenses .......................................... 66,473 26,105
-------------- -------------
Total liabilities ........................................... 28,742,443 3,576,042
-------------- -------------
Net assets, at market value ...................................... $ 320,459,213 $ 39,177,648
============== =============
NET ASSETS
----------
Net assets consist of:
Paid-in capital (Note 5) ........................................ $ 230,332,609 $ 25,580,667
Accumulated undistributed net investment loss ................... -- --
Accumulated net realized gain (Notes 1 and 5) ................... 45,743,775 6,859,529
Net unrealized appreciation on investments and other assets
and liabilities denominated in foreign currencies .............. 44,382,829 6,737,452
-------------- -------------
Net assets, at market value ...................................... $ 320,459,213 $ 39,177,648
============== =============
Net assets, at market value
Class A Shares .................................................. $ 134,595,653 $ 22,868,987
Class B Shares .................................................. 45,276,271 4,165,504
Class C Shares .................................................. 140,587,289 12,143,157
Eagle Shares .................................................... -- --
-------------- -------------
Total ....................................................... $ 320,459,213 $ 39,177,648
============== =============
Shares of beneficial interest outstanding
Class A Shares .................................................. 2,643,785 986,308
Class B Shares .................................................. 926,375 183,787
Class C Shares .................................................. 2,877,425 535,747
Eagle Shares .................................................... -- --
-------------- -------------
Total ....................................................... 6,447,585 1,705,842
============== =============
Net Asset Value--offering and redemption price per share
(Notes 1 and 2) Class A Shares .................................. $ 50.91 $ 23.19
============== =============
Maximum offering price per Class A share (100/95.25 of $27.46,
$27.41, $50.91 and $23.19, respectively) ....................... $ 53.45 $ 24.35
============== =============
Class B Shares .................................................. $ 48.87 $ 22.66
============== =============
Class C Shares .................................................. $ 48.86 $ 22.67
============== =============
Eagle Shares ....................................................
</TABLE>
The accompanying notes are an integral part of the financial statements.
45
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust
Statements of Assets and Liabilities
October 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAP VALUE
STOCK TECHNOLOGY EQUITY
FUND FUND FUND
------------------ ---------------- -----------------
<S> <C> <C> <C>
ASSETS
------
Investments, at market value (identified cost $122,877,137, $111,266,982
and $18,077,793, respectively) (Note 1) ............................... $ 150,424,698 $ 122,990,471 $ 19,628,299
Repurchase agreement, at market value (identified cost is the same as
market value) (Note 1) ................................................ 19,749,000 13,327,000 777,000
Cash ................................................................... 480 59 200
Receivables:
Investments sold ...................................................... 4,020,805 3,730,024 5,302,367
Fund shares sold ...................................................... 108,348 637,312 42,857
Dividends and interest ................................................ 28,059 3,069 53,800
Deferred state qualification expenses (Note 1) ......................... 8,983 13,533 11,130
Prepaid insurance ...................................................... 6,691 4,461 3,346
-------------- ------------- -------------
Total assets ...................................................... $ 174,347,064 $ 140,705,929 $ 25,818,999
-------------- ------------- -------------
LIABILITIES
-----------
Payables (Note 4):
Investments purchased ................................................. $ 5,299,935 $ 11,513,199 $ --
Fund shares redeemed .................................................. 228,401 53,589 236,169
Accrued management fee ................................................ 115,571 105,423 9,493
Accrued distribution fee .............................................. 72,913 69,231 12,767
Accrued shareholder servicing fees (Note 4) ........................... 66,400 68,000 11,200
Accrued fund accounting fees (Note 4) ................................. 18,329 18,258 14,516
Other accrued expenses ................................................ 39,439 62,210 32,973
-------------- ------------- -------------
Total liabilities ................................................. 5,840,988 11,889,910 317,118
-------------- ------------- -------------
Net assets, at market value ............................................ $ 168,506,076 $ 128,816,019 $ 25,501,881
============== ============= =============
NET ASSETS
----------
Net assets consist of:
Paid-in capital (Note 5) .............................................. $ 124,532,992 $ 122,013,079 $ 22,682,698
Undistributed net investment income (Notes 1 and 5) ................... -- -- 174,300
Accumulated net realized gain (loss) (Notes 1 and 5) .................. 16,425,523 (4,920,549) 1,094,377
Net unrealized appreciation on investments ............................ 27,547,561 11,723,489 1,550,506
-------------- ------------- -------------
Net assets, at market value ............................................ $ 168,506,076 $ 128,816,019 $ 25,501,881
============== ============= =============
Net assets, at market value
Class A Shares ........................................................ $ 107,002,258 $ 64,770,377 $ 12,726,425
Class B Shares ........................................................ 10,412,863 24,138,911 967,880
Class C Shares ........................................................ 51,090,955 39,906,731 11,807,576
-------------- ------------- -------------
Total ............................................................. $ 168,506,076 $ 128,816,019 $ 25,501,881
============== ============= =============
Shares of beneficial interest outstanding
Class A Shares ........................................................ 3,667,691 3,716,339 621,042
Class B Shares ........................................................ 372,346 1,394,667 47,999
Class C Shares ........................................................ 1,826,060 2,306,342 585,653
-------------- ------------- -------------
Total ............................................................. 5,866,097 7,417,348 1,254,694
============== ============= =============
Net Asset Value--offering and redemption price per share
(Notes 1 and 2) Class A Shares ........................................ $ 29.17 $ 17.43 $ 20.49
============== ============= =============
Maximum offering price per Class A share (100/95.25 of $29.17, $17.43
and $20.49, respectively) ............................................ $ 30.62 $ 18.30 $ 21.51
============== ============= =============
Class B Shares ........................................................ $ 27.97 $ 17.31 $ 20.16
============== ============= =============
Class C Shares ........................................................ $ 27.98 $ 17.30 $ 20.16
============== ============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
46
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust
Statements of Operations
For the Year Ended October 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EAGLE
AGGRESSIVE INTERNATIONAL GROWTH
GROWTH EQUITY EQUITY
FUND PORTFOLIO FUND
--------------- ------------------ ---------------
<S> <C> <C> <C>
INVESTMENT INCOME
-----------------
Income:
Dividends ................................. $ 150,781 $ 537,317(b) $ 606,018
Interest .................................. 459,212 101,852 628,656
------------ ----------- ------------
Total income ........................... 609,993 639,169 1,234,674
Expenses (Notes 1 and 4):
Management fee ............................ 872,006 506,058 1,993,560
Distribution fee (Class A Shares) ......... 108,231 22,342 282,213
Distribution fee (Class B Shares) ......... 159,752 7,072 331,910
Distribution fee (Class C Shares) ......... 295,268 88,632 1,197,319
Distribution fee (Eagle Shares) ........... -- 320,985 --
Shareholder servicing fees ................ 95,385 -- 205,863
Shareholder servicing fees
(Class A Shares) ......................... -- 11,618 --
Shareholder servicing fees
(Class B Shares) ......................... -- 919 --
Shareholder servicing fees
(Class C Shares) ......................... -- 11,522 --
Shareholder servicing fees
(Eagle Shares) ........................... -- 3,210 --
Custodian fee ............................. 25,673 162,134(c) 64,534
Fund accounting fees (Note 4) ............. 52,270 --(c) 54,999
Professional fees ......................... 30,783 45,442 38,496
Amortization of state qualification
expenses ................................. 51,223 51,867 71,115
Federal registration expenses ............. 5,438 829 22,284
Organization expenses ..................... -- 5,200 5,666
Reports to shareholders ................... 22,574 19,124 38,860
Trustees' fees and expenses ............... 8,772 8,900 8,900
Other ..................................... 4,294 5,078 6,831
------------ ----------- ------------
Total expenses before waiver ........... 1,731,669 1,270,932 4,322,550
Fees waived by Manager (Note 4)......... -- -- --
------------ ----------- ------------
Total expenses after waiver ............ 1,731,669 1,270,932 4,322,550
------------ ----------- ------------
Net investment income (loss) ............... (1,121,676) (631,763) (3,087,876)
------------ ----------- ------------
REALIZED AND UNREALIZED GAIN (LOSS)
-----------------------------------
ON INVESTMENTS
--------------
Net realized gain (loss) from investment
transactions .............................. 11,714,422 4,449,780 49,464,565
Net realized loss from foreign currency
transactions .............................. -- (279,483) --
Net unrealized appreciation
(depreciation) of investments during
the year .................................. 13,699,690 (4,184,164) (4,678,344)
Net unrealized appreciation from other
assets and liabilities denominated in
foreign currency during the year .......... -- 176,989 --
------------ ----------- ------------
Net gain on investments .................... 25,414,112 163,122 44,786,221
------------ ----------- ------------
Net increase (decrease) in net assets
resulting from operations ................. $ 24,292,436 $ (468,641) $ 41,698,345
============ =========== ============
<CAPTION>
MID CAP SMALL CAP VALUE
STOCK STOCK TECHNOLOGY EQUITY
FUND FUND FUND(A) FUND
---------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
-----------------
Income:
Dividends ................................. $ 54,097 $ 924,051 $ 38,914 $ 606,824
Interest .................................. 81,676 659,521 225,108 62,634
------------ ------------ ------------ -----------
Total income ........................... 135,773 1,583,572 264,022 669,458
Expenses (Notes 1 and 4):
Management fee ............................ 240,166 1,503,024 1,026,011 193,447
Distribution fee (Class A Shares) ......... 47,505 293,578 137,043 33,504
Distribution fee (Class B Shares) ......... 29,937 105,971 199,667 9,420
Distribution fee (Class C Shares) ......... 100,263 557,083 327,021 114,492
Distribution fee (Eagle Shares) ........... -- -- -- --
Shareholder servicing fees ................ 33,474 197,424 146,507 33,962
Shareholder servicing fees
(Class A Shares) ......................... -- -- -- --
Shareholder servicing fees
(Class B Shares) ......................... -- -- -- --
Shareholder servicing fees
(Class C Shares) ......................... -- -- -- --
Shareholder servicing fees
(Eagle Shares) ........................... -- -- -- --
Custodian fee ............................. 22,408 36,830 46,898 15,301
Fund accounting fees (Note 4) ............. 45,091 55,370 48,712 43,894
Professional fees ......................... 28,218 32,824 35,749 28,187
Amortization of state qualification
expenses ................................. 41,652 39,038 102,313 37,376
Federal registration expenses ............. 530 -- 19,272 --
Organization expenses ..................... 5,170 -- -- 1,767
Reports to shareholders ................... 11,570 41,390 31,397 12,185
Trustees' fees and expenses ............... 8,900 8,900 8,772 8,777
Other ..................................... 4,008 9,589 3,867 4,527
------------ ------------ ------------ -----------
Total expenses before waiver ........... 618,892 2,881,021 2,133,229 536,839
Fees waived by Manager (Note 4)......... (24,899) -- -- (69,913)
------------ ------------ ------------ -----------
Total expenses after waiver ............ 593,993 2,881,021 2,133,229 466,926
------------ ------------ ------------ -----------
Net investment income (loss) ............... (458,220) (1,297,449) (1,869,207) 202,532
------------ ------------ ------------ -----------
REALIZED AND UNREALIZED GAIN (LOSS)
-----------------------------------
ON INVESTMENTS
--------------
Net realized gain (loss) from investment
transactions .............................. 7,368,412 22,917,935 (3,051,342) 1,099,301
Net realized loss from foreign currency
transactions .............................. -- -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year .................................. 3,331,490 21,875,342 11,723,489 2,162,807
Net unrealized appreciation from other
assets and liabilities denominated in
foreign currency during the year .......... -- -- -- --
------------ ------------ ------------ -----------
Net gain on investments .................... 10,699,902 44,793,277 8,672,147 3,262,108
------------ ------------ ------------ -----------
Net increase (decrease) in net assets
resulting from operations ................. $ 10,241,682 $ 43,495,828 $ 6,802,940 $ 3,464,640
============ ============ ============ ===========
</TABLE>
----------------
(a) For the period November 18, 1999 (commencement of operations) to October
31, 2000.
(b) Net of $85,026 foreign withholding taxes.
(c) State Street Bank is the custodian and fund accountant for the Eagle
International Equity Portfolio.
The accompanying notes are an integral part of the financial statements.
47
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust
Statements of Changes in Net Assets
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
------------------------------------
OCTOBER 31, 2000 OCTOBER 31, 1999
------------------ -----------------
<S> <C> <C>
AGGRESSIVE GROWTH FUND
----------------------
Increase in net assets:
Operations:
Net investment loss ................................................. $ (1,121,676) $ (430,858)
Net realized gain from investment transactions ...................... 11,714,422 6,487,570
Net unrealized appreciation of investments during the year .......... 13,699,690 3,177,004
------------- ------------
Net increase in net assets resulting from operations ................ 24,292,436 9,233,716
Distributions to shareholders from:
Net realized gains Class A Shares, ($2.20 per share) ................ (2,919,240) --
Net realized gains Class B Shares, ($2.20 per share) ................ (1,121,963) --
Net realized gains Class C Shares, ($2.20 per share) ................ (1,813,382) --
Increase in net assets from Fund share transactions (Note 2) ......... 34,361,964 26,033,474
------------- ------------
Increase in net assets ............................................... 52,799,815 35,267,190
Net assets, beginning of year ........................................ 53,752,367 18,485,177
------------- ------------
Net assets, end of year .............................................. $ 106,552,182 $ 53,752,367
============= ============
</TABLE>
<TABLE>
<CAPTION>
For the Years Ended
------------------------------------
October 31, 2000 October 31, 1999
------------------ -----------------
<S> <C> <C>
EAGLE INTERNATIONAL EQUITY PORTFOLIO
------------------------------------
Increase (decrease) in net assets:
Operations:
Net investment loss ..................................................................... $ (631,763) $ (420,664)
Net realized gain from investment transactions .......................................... 4,449,780 6,904,858
Net realized gain (loss) from foreign currency transactions ............................. (279,483) 216,150
Net unrealized appreciation (depreciation) of investments during the year ............... (4,184,164) 3,686,213
Net unrealized appreciation (depreciation) from other assets and liabilities
denominated in foreign currrency during the year ....................................... 176,989 (177,933)
------------ ------------
Net increase (decrease) in net assets resulting from operations ......................... (468,641) 10,208,624
Distributions to shareholders from:
Net realized gains Class A Shares, ($4.44 and $0.12 per share, respectively) ............ (1,110,521) (30,773)
Net realized gains Class B Shares, ($4.44 and $0.12 per share, respectively) ............ (67,144) (1,581)
Net realized gains Class C Shares, ($4.44 and $0.12 per share, respectively) ............ (1,095,583) (27,806)
Net realized gains Eagle Shares, ($4.44 and $0.12 per share, respectively). . ........... (4,404,983) (151,973)
Increase (decrease) in net assets from Fund share transactions (Note 2) .................. 5,220,312 (7,860,802)
------------ ------------
Increase (decrease) in net assets ........................................................ (1,926,560) 2,135,689
Net assets, beginning of year . .......................................................... 47,874,266 45,738,577
------------ ------------
Net assets, end of year (including undistributed net investment income of $78,478 for the
year ended October 31, 1999) ............................................................ $ 45,947,706 $ 47,874,266
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
48
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust
Statements of Changes in Net Assets
(continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
------------------------------------
OCTOBER 31, 2000 OCTOBER 31, 1999
------------------ -----------------
<S> <C> <C>
GROWTH EQUITY FUND
------------------
Increase in net assets:
Operations:
Net investment loss ....................................................... $ (3,087,876) $ (1,219,288)
Net realized gain from investment transactions ............................ 49,464,565 24,524,653
Net unrealized appreciation (depreciation) of investments during the year . (4,678,344) 25,441,900
------------- -------------
Net increase in net assets resulting from operations ...................... 41,698,345 48,747,265
Distributions to shareholders from:
Net realized gains Class A Shares, ($5.47 per share) ...................... (8,589,182) --
Net realized gains Class B Shares, ($5.47 per share) ...................... (2,275,911) --
Net realized gains Class C Shares, ($5.47 per share) ...................... (9,939,165) --
Increase in net assets from Fund share transactions (Note 2) ............... 141,146,719 25,151,363
------------- -------------
Increase in net assets ..................................................... 162,040,806 73,898,628
Net assets, beginning of year .............................................. 158,418,407 84,519,779
------------- -------------
Net assets, end of year .................................................... $ 320,459,213 $ 158,418,407
============= =============
</TABLE>
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
------------------------------------
OCTOBER 31, 2000 OCTOBER 31, 1999
------------------ -----------------
<S> <C> <C>
MID CAP STOCK FUND
------------------
Increase (decrease) in net assets:
Operations:
Net investment loss ................................................... $ (458,220) $ (427,785)
Net realized gain from investment transactions ........................ 7,368,412 1,928,034
Net unrealized appreciation of investments during the year ............ 3,331,490 2,467,882
----------- ------------
Net increase in net assets resulting from operations .................. 10,241,682 3,968,131
Distributions to shareholders from:
Net realized gains Class A Shares, ($0.30 per share) .................. (254,362) --
Net realized gains Class B Shares, ($0.30 per share) .................. (37,315) --
Net realized gains Class C Shares, ($0.30 per share) .................. (146,539) --
Increase (decrease) in net assets from Fund share transactions (Note 2) 3,505,422 (5,928,377)
----------- ------------
Increase (decrease) in net assets ...................................... 13,308,888 (1,960,246)
Net assets, beginning of year .......................................... 25,868,760 27,829,006
----------- ------------
Net assets, end of year ................................................ $39,177,648 $ 25,868,760
=========== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
49
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust
Statements of Changes in Net Assets
(continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
------------------------------------
OCTOBER 31, 2000 OCTOBER 31, 1999
------------------ -----------------
<S> <C> <C>
SMALL CAP STOCK FUND
--------------------
Decrease in net assets:
Operations:
Net investment loss .................................................................... $ (1,297,449) $ (1,115,476)
Net realized gain (loss) from investment transactions .................................. 22,917,935 (2,081,165)
Net unrealized appreciation of investments during the year ............................. 21,875,342 11,574,223
------------- -------------
Net increase in net assets resulting from operations ................................... 43,495,828 8,377,582
Decrease in net assets from Fund share transactions (Note 2) ............................ (69,954,120) (80,494,684)
------------- -------------
Decrease in net assets .................................................................. (26,458,292) (72,117,102)
Net assets, beginning of year ........................................................... 194,964,368 267,081,470
------------- -------------
Net assets, end of year (including undistributed net investment income of $31,078 for the
year ended October 31, 1999) ........................................................... $ 168,506,076 $ 194,964,368
============= =============
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
NOVEMBER 18, 1999
(COMMENCEMENT OF OPERATIONS)
TO OCTOBER 31, 2000
-----------------------------
<S> <C>
TECHNOLOGY FUND
---------------
Increase in net assets:
Operations:
Net investment loss .................................................. $ (1,869,207)
Net realized loss from investment transactions ....................... (3,051,342)
Net unrealized appreciation of investments during the period ......... 11,723,489
-------------
Net increase in net assets resulting from operations ................. 6,802,940
Increase in net assets from Fund share transactions (Note 2) .......... 122,013,079
-------------
Increase in net assets ................................................ 128,816,019
Net assets, beginning of period ....................................... --
-------------
Net assets, end of period ............................................. $ 128,816,019
=============
</TABLE>
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
------------------------------------
OCTOBER 31, 2000 OCTOBER 31, 1999
------------------ -----------------
<S> <C> <C>
VALUE EQUITY FUND
-----------------
Decrease in net assets:
Operations:
Net investment income ................................................................... $ 202,532 $ 88,453
Net realized gain from investment transactions .......................................... 1,099,301 931,457
Net realized gains from covered call options written .................................... -- 17,466
Net unrealized appreciation (depreciation) of investments during the year ............... 2,162,807 (1,115,216)
------------ ------------
Net increase (decrease) in net assets resulting from operations ......................... 3,464,640 (77,840)
Distributions to shareholders from:
Net investment income Class A Shares, ($0.11 and $0.16 per share, respectively) ......... (83,002) (152,941)
Net investment income Class B Shares, ($0.00 and $0.01 per share, respectively) ......... -- (752)
Net investment income Class C Shares, ($0.00 and $0.01 per share, respectively) ......... -- (9,859)
Net realized gains Class A Shares, ($0.42 and $0.12 per share, respectively) ............ (329,738) (110,747)
Net realized gains Class B Shares, ($0.42 and $0.12 per share, respectively) ............ (22,188) (6,528)
Net realized gains Class C Shares, ($0.42 and $0.12 per share, respectively) ............ (270,040) (85,565)
Decrease in net assets from Fund share transactions (Note 2) ............................. (4,819,930) (4,259,045)
------------ ------------
Decrease in net assets ................................................................... (2,060,258) (4,703,277)
Net assets, beginning of year ............................................................ 27,562,139 32,265,416
------------ ------------
Net assets, end of year (including undistributed net investment income of $174,300 and
$54,770, respectively) .................................................................. $ 25,501,881 $ 27,562,139
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
50
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust - Aggressive Growth 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
OCTOBER 31
---------------------------------------------
2000 1999 1998(+)
---------------- ----------- ----------------
<S> <C> <C> <C>
Net asset value, beginning of year ............... $ 20.80 $ 15.35 $ 14.29
--------- -------- ---------
Income from Investment Operations:
Net investment loss ............................. ( 0.24)(a) ( 0.15) --
Net realized and unrealized gain on
investments .................................... 9.10 5.60 1.06
--------- -------- ---------
Total from Investment Operations ................ 8.86 5.45 1.06
--------- -------- ---------
Less Distributions:
Distributions from net realized gains ........... ( 2.20) -- --
--------- -------- ---------
Net asset value, end of year ..................... $ 27.46 $ 20.80 $ 15.35
========= ======== =========
Total Return (%) (b) ............................. 44.87 35.50 7.42 (c)
Ratios and Supplemental Data
Expenses to average daily net assets
With expenses waived/recovered (%) ............. 1.57 (a) 1.65 1.65 (d)
Without expenses waived/recovered (%) .......... 1.48 1.79 3.64 (d)
Net investment income (loss) to average daily
net assets (%) ................................. ( .88) ( .78) .08 (d)
Portfolio turnover rate (%) (c) ................. 252 195 34
Net assets, end of year ($ millions)............. 50 27 11
<CAPTION>
CLASS B SHARES* CLASS C SHARES*
------------------------------------------------- ----------------------------
FOR THE YEARS ENDED FOR THE YEARS ENDED
OCTOBER 31 OCTOBER 31
------------------------------------------------- ----------------------------
2000 1999 1998(+) 2000 1999
-------------- ----------- ----------------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ............... $ 20.61 $ 15.33 $ 14.29 $ 20.61 $ 15.33
--------- -------- ---------- --------- --------
Income from Investment Operations:
Net investment loss ............................. ( 0.43)(a) ( 0.29) ( 0.03) ( 0.43)(a) ( 0.29)
Net realized and unrealized gain on
investments .................................... 9.00 5.57 1.07 9.00 5.57
--------- -------- ---------- --------- --------
Total from Investment Operations ................ 8.57 5.28 1.04 8.57 5.28
--------- -------- ---------- --------- --------
Less Distributions:
Distributions from net realized gains ........... ( 2.20) -- -- ( 2.20) --
--------- -------- ---------- --------- --------
Net asset value, end of year ..................... $ 26.98 $ 20.61 $ 15.33 $ 26.98 $ 20.61
========= ======== ========== ========= ========
Total Return (%) (b) ............................. 43.80 34.44 7.28 (c) 43.80 34.44
Ratios and Supplemental Data
Expenses to average daily net assets
With expenses waived/recovered (%) ............. 2.32 (a) 2.40 2.40 (d) 2.32 (a) 2.40
Without expenses waived/recovered (%) .......... 2.23 2.54 4.39 (d) 2.22 2.54
Net investment income (loss) to average daily
net assets (%) ................................. ( 1.64) ( 1.53) ( .77) (d) ( 1.62) ( 1.53)
Portfolio turnover rate (%) (c) ................. 252 195 34 252 195
Net assets, end of year ($ millions)............. 19 10 4 38 16
<CAPTION>
CLASS C SHARES*
-------------------
FOR THE YEARS ENDED
OCTOBER 31
------------------
1998(+)
------------------
<S> <C>
Net asset value, beginning of year ............... $ 14.29
----------
Income from Investment Operations:
Net investment loss ............................. ( 0.03)
Net realized and unrealized gain on
investments .................................... 1.07
----------
Total from Investment Operations ................ 1.04
----------
Less Distributions:
Distributions from net realized gains ........... --
----------
Net asset value, end of year ..................... $ 15.33
==========
Total Return (%) (b) ............................. 7.28 (c)
Ratios and Supplemental Data
Expenses to average daily net assets
With expenses waived/recovered (%) ............. 2.40 (d)
Without expenses waived/recovered (%) .......... 4.39 (d)
Net investment income (loss) to average daily
net assets (%) ................................. ( .71) (d)
Portfolio turnover rate (%) (c) ................. 34
Net assets, end of year ($ millions)............. 3
</TABLE>
-------
* Per share amounts have been calculated using the monthly average share
method.
(+) For the period August 20, 1998 (commencement of operations) to October 31,
1998.
(a) The year ended October 31, 2000 includes payment of previously waived
management fees to the Manager for Class A, B and C Shares.
(b) These returns are calculated without the imposition of either front-end or
contingent deferred sales charges.
(c) Not annualized.
(d) Annualized.
The accompanying notes are an integral part of the financial statements.
51
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust - Eagle International Equity Portfolio
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
OCTOBER 31
----------------------------------------------------------------------------
2000 1999 1998 1997 1996(+)
----------- ----------- ---------------- ---------------- ------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ......... $ 31.56 $ 25.43 $ 23.97 $ 22.25 $ 21.11
-------- -------- --------- --------- -----------
Income from Investment Operations:
Net investment income (loss) .............. ( 0.22) ( 0.09) ( 0.01) 0.05 0.10
Net realized and unrealized gain on
investments .............................. 0.51 6.34 2.14 2.28 1.04
-------- -------- --------- --------- -----------
Total from Investment Operations .......... 0.29 6.25 2.13 2.33 1.14
-------- -------- --------- --------- -----------
Less Distributions:
Dividends from net investment income ...... -- -- ( 0.05) ( 0.44) --
Distributions from net realized gains ..... ( 4.44) ( 0.12) ( 0.62) ( 0.17) --
-------- -------- --------- --------- -----------
Total Distributions ....................... ( 4.44) ( 0.12) ( 0.67) ( 0.61) --
-------- -------- --------- --------- -----------
Net asset value, end of year ............... $ 27.41 $ 31.56 $ 25.43 $ 23.97 $ 22.25
======== ======== ========= ========= ===========
Total Return (%) (a) ....................... ( 1.31) 24.68 9.04 (b) 10.71 (b) 5.40 (c)
Ratios and Supplemental Data
Expenses to average daily net assets
With expenses waived (%) ................. 1.97 1.97 1.97 1.97 1.97 (d)
Without expenses waived (%) .............. -- 2.02 2.08 2.23 2.69 (d)
Net investment income (loss) to average
daily net assets (%) ..................... ( .71) ( .32) ( .02) .22 .44 (d)
Portfolio turnover rate (%) (c) ........... 67 78 71 50 59
Net assets, end of year ($ millions)....... 10 8 7 6 3
<CAPTION>
CLASS B SHARES*
-------------------------------------------
FOR THE YEARS ENDED
OCTOBER 31
-------------------------------------------
2000 1999 1998(+)(+)
----------- ----------- -------------------
<S> <C> <C> <C>
Net asset value, beginning of year ......... $ 30.83 $ 25.03 $ 23.95
-------- -------- -----------
Income from Investment Operations:
Net investment income (loss) .............. ( 0.43) ( 0.30) ( 0.16)
Net realized and unrealized gain on
investments .............................. 0.53 6.22 1.24
-------- -------- -----------
Total from Investment Operations .......... 0.10 5.92 1.08
-------- -------- -----------
Less Distributions:
Dividends from net investment income ...... -- -- --
Distributions from net realized gains ..... ( 4.44) ( 0.12) --
-------- -------- -----------
Total Distributions ....................... ( 4.44) ( 0.12) --
-------- -------- -----------
Net asset value, end of year ............... $ 26.49 $ 30.83 $ 25.03
======== ======== ===========
Total Return (%) (a) ....................... ( 2.00) 23.70 4.51 (c)
Ratios and Supplemental Data
Expenses to average daily net assets
With expenses waived (%) ................. 2.72 2.72 2.72 (d)
Without expenses waived (%) .............. -- 2.77 2.83 (d)
Net investment income (loss) to average
daily net assets (%) ..................... ( 1.46) ( 1.04) ( .71) (d)
Portfolio turnover rate (%) (c) ........... 67 78 71
Net assets, end of year ($ millions)....... 1 0.5 0.2
<CAPTION>
CLASS C SHARES*
---------------------------------------------------------------------------
FOR THE YEARS ENDED
OCTOBER 31
---------------------------------------------------------------------------
2000 1999 1998 1997 1996(+)
----------- ----------- --------------- ---------------- ------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ......... $ 30.83 $ 25.03 $ 23.73 $ 22.12 $ 21.11
-------- -------- ------------- --------- ----------
Income from Investment Operations:
Net investment income (loss) .............. ( 0.44) ( 0.30) ( 0.20) ( 0.13) ( 0.07)
Net realized and unrealized gain on
investments .............................. 0.53 6.22 2.12 2.25 1.08
-------- -------- ------------- --------- ----------
Total from Investment Operations .......... 0.09 5.92 1.92 2.12 1.01
-------- -------- ------------- --------- ----------
Less Distributions:
Dividends from net investment income ...... -- -- -- ( 0.34) --
Distributions from net realized gains ..... ( 4.44) ( 0.12) ( 0.62) ( 0.17) --
-------- -------- ------------- --------- ----------
Total Distributions ....................... ( 4.44) ( 0.12) ( 0.62) ( 0.51) --
-------- -------- ------------- --------- ----------
Net asset value, end of year ............... $ 26.48 $ 30.83 $ 25.03 $ 23.73 $ 22.12
======== ======== ============= ========= ==========
Total Return (%) (a) ....................... ( 2.04) 23.70 8.24 (b) 9.79 (b) 4.78 (c)
Ratios and Supplemental Data
Expenses to average daily net assets
With expenses waived (%) ................. 2.72 2.72 2.72 2.72 2.72 (d)
Without expenses waived (%) .............. -- 2.77 2.83 2.98 3.44 (d)
Net investment income (loss) to average
daily net assets (%) ..................... ( 1.45) ( 1.06) ( .79) ( .52) ( .32) (d)
Portfolio turnover rate (%) (c) ........... 67 78 71 50 59
Net assets, end of year ($ millions)....... 8 7 6 4 1
</TABLE>
-------
* Per share amounts have been calculated using the monthly average share
method.
(+) For the period December 27, 1995 (commencement of Class A and Class C
Shares) to October 31, 1996.
(+)(+) For the period January 2, 1998 (commencement of Class B Shares) to
October 31, 1998.
(a) These returns are calculated without the imposition of either front-end or
contingent deferred sales charges.
(b) These returns are calculated based on the published net asset value at
October 31, 1997.
(c) Not annualized.
(d) Annualized.
The accompanying notes are an integral part of the financial statements.
52
<PAGE>
.
--------------------------------------------------------------------------------
Heritage Series Trust - Growth Equity 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
OCTOBER 31
-----------------------------------------------------------------------
2000 1999 1998 1997 1996(+)
=========== =========== =========== ================ ==================
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year .......... $ 43.44 $ 28.82 $ 23.77 $ 17.74 $ 14.29
-------- -------- -------- --------- ----------
Income from Investment Operations:
Net investment loss ........................ ( 0.39) ( 0.20) ( 0.11) ( 0.07)(a) ( 0.03)
Net realized and unrealized gain on
investments ............................... 13.33 14.82 5.48 6.10 3.48
-------- -------- -------- --------- ----------
Total from Investment Operations ........... 12.94 14.62 5.37 6.03 3.45
-------- -------- -------- --------- ----------
Less Distributions:
Distributions from net realized gains ...... ( 5.47) -- ( 0.32) -- --
-------- -------- -------- --------- ----------
Net asset value, end of year ................ $ 50.91 $ 43.44 $ 28.82 $ 23.77 $ 17.74
======== ======== ======== ========= ==========
Total Return (%) (b) ........................ 31.04 50.73 22.84 33.99 24.14 (c)
Ratios and Supplemental Data
Expenses to average daily net assets
With expenses waived/recovered (%) ........ 1.19 1.24 1.38 1.61 (a) 1.65 (d)
Without expenses waived/
recovered (%) ............................ -- -- -- 1.54 2.39 (d)
Net investment loss to average daily net
assets (%) ................................ ( .73) ( .56) ( .40) ( .35) ( .19) (d)
Portfolio turnover rate (%) (c) ............ 392 160 54 50 23
Net assets, end of year ($ millions)........ 135 67 40 24 12
<CAPTION>
CLASS B SHARES*
------------------------------------------
FOR THE YEARS ENDED
OCTOBER 31
------------------------------------------
2000 1999 1998(+)(+)
----------- ----------- ------------------
<S> <C> <C> <C>
Net asset value, beginning of year .......... $ 42.17 $ 28.18 $ 24.33
-------- -------- ----------
Income from Investment Operations:
Net investment loss ........................ ( 0.77) ( 0.47) ( 0.23)
Net realized and unrealized gain on
investments ............................... 12.94 14.46 4.08
-------- -------- ----------
Total from Investment Operations ........... 12.17 13.99 3.85
-------- -------- ----------
Less Distributions:
Distributions from net realized gains ...... ( 5.47) -- --
-------- -------- ----------
Net asset value, end of year ................ $ 48.87 $ 42.17 $ 28.18
======== ======== ==========
Total Return (%) (b) ........................ 30.05 49.65 15.82 (c)
Ratios and Supplemental Data
Expenses to average daily net assets
With expenses waived/recovered (%) ........ 1.94 1.98 2.11 (d)
Without expenses waived/
recovered (%) ............................ -- -- --
Net investment loss to average daily net
assets (%) ................................ ( 1.48) ( 1.30) ( 1.10) (d)
Portfolio turnover rate (%) (c) ............ 392 160 54
Net assets, end of year ($ millions)........ 45 16 5
<CAPTION>
CLASS C SHARES*
-----------------------------------------------------------------------
FOR THE YEARS ENDED
OCTOBER 31
-----------------------------------------------------------------------
2000 1999 1998 1997 1996(+)
----------- ----------- ----------- ---------------- ------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year .......... $ 42.15 $ 28.18 $ 23.42 $ 17.61 $ 14.29
-------- -------- -------- --------- ----------
Income from Investment Operations:
Net investment loss ........................ ( 0.76) ( 0.47) ( 0.31) ( 0.24)(a) ( 0.15)
Net realized and unrealized gain on
investments ............................... 12.94 14.44 5.39 6.05 3.47
-------- -------- -------- --------- ----------
Total from Investment Operations ........... 12.18 13.97 5.08 5.81 3.32
-------- -------- -------- --------- ----------
Less Distributions:
Distributions from net realized gains ...... ( 5.47) -- ( 0.32) -- --
-------- -------- -------- --------- ----------
Net asset value, end of year ................ $ 48.86 $ 42.15 $ 28.18 $ 23.42 $ 17.61
======== ======== ======== ========= ==========
Total Return (%) (b) ........................ 30.09 49.57 21.93 32.99 23.23 (c)
Ratios and Supplemental Data
Expenses to average daily net assets
With expenses waived/recovered (%) ........ 1.94 1.99 2.13 2.36 (a) 2.40 (d)
Without expenses waived/
recovered (%) ............................ -- -- -- 2.29 3.14 (d)
Net investment loss to average daily net
assets (%) ................................ ( 1.48) ( 1.31) ( 1.15) ( 1.14) ( .96) (d)
Portfolio turnover rate (%) (c) ............ 392 160 54 50 23
Net assets, end of year ($ millions)........ 141 75 39 18 5
</TABLE>
-------
* Per share amounts have been calculated using the monthly average share
method.
(+) For the period November 16, 1995 (commencement of operations) to October
31, 1996.
(+)(+) For the period January 2, 1998 (commencement of Class B Shares) to
October 31, 1998.
(a) The year ended October 31, 1997 includes payment of previously waived
management fees to the Manager for Class A and C Shares.
(b) These returns are calculated without the imposition of either front-end or
contingent deferred sales charges.
(c) Not annualized.
(d) Annualized.
The accompanying notes are an integral part of the financial statements.
53
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust - Mid 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
OCTOBER 31
------------------------------------------
2000 1999 1998(+)
----------- ----------- ------------------
<S> <C> <C> <C>
Net asset value, beginning of year ....................... $ 16.56 $ 14.28 $ 14.29
-------- -------- ----------
Income from Investment Operations:
Net investment loss ..................................... ( 0.24) ( 0.18) ( 0.15)
Net realized and unrealized gain on investments ......... 7.17 2.46 0.14
-------- -------- ----------
Total from Investment Operations ........................ 6.93 2.28 ( 0.01)
-------- -------- ----------
Less Distributions:
Distributions from net realized gains ................... ( 0.30) -- --
-------- -------- ----------
Net asset value, end of year ............................. $ 23.19 $ 16.56 $ 14.28
======== ======== ==========
Total Return (%) (a) ..................................... 42.30 15.97 ( 0.07) (b)
Ratios and Supplemental Data
Expenses to average daily net assets ....................
With expenses waived (%) ............................... 1.55 1.60 1.60 (c)
Without expenses waived (%) ............................ 1.63 1.70 1.86 (c)
Net investment loss to average daily net assets (%) ..... ( 1.13) ( 1.19) ( .99) (c)
Portfolio turnover rate (%) (b) ......................... 265 192 129
Net assets, end of year ($ millions) .................... 23 15 16
<CAPTION>
CLASS B SHARES* CLASS C SHARES*
------------------------------------------ -----------------------
FOR THE YEARS ENDED FOR THE YEARS ENDED
OCTOBER 31 OCTOBER 31
------------------------------------------ -----------------------
2000 1999 1998(+)(+) 2000 1999
----------- ----------- ------------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ....................... $ 16.32 $ 14.17 $ 14.42 $ 16.32 $ 14.18
-------- -------- ---------- -------- --------
Income from Investment Operations:
Net investment loss ..................................... ( 0.39) ( 0.30) ( 0.23) ( 0.39) ( 0.30)
Net realized and unrealized gain on investments ......... 7.03 2.45 ( 0.02) 7.04 2.44
-------- -------- ---------- -------- --------
Total from Investment Operations ........................ 6.64 2.15 ( 0.25) 6.65 2.14
-------- -------- ---------- -------- --------
Less Distributions:
Distributions from net realized gains ................... ( 0.30) -- -- ( 0.30) --
-------- -------- ---------- -------- --------
Net asset value, end of year ............................. $ 22.66 $ 16.32 $ 14.17 $ 22.67 $ 16.32
======== ======== ========== ======== ========
Total Return (%) (a) ..................................... 41.13 15.17 ( 1.73) (b) 41.19 15.09
Ratios and Supplemental Data
Expenses to average daily net assets ....................
With expenses waived (%) ............................... 2.30 2.35 2.35 (c) 2.30 2.35
Without expenses waived (%) ............................ 2.38 2.45 2.61 (c) 2.38 2.45
Net investment loss to average daily net assets (%) ..... ( 1.87) ( 1.94) ( 1.85) (c) ( 1.88) ( 1.95)
Portfolio turnover rate (%) (b) ......................... 265 192 129 265 192
Net assets, end of year ($ millions) .................... 4 2 2 12 9
<CAPTION>
CLASS C SHARES*
-------------------
FOR THE YEARS ENDED
OCTOBER 31
------------------
1998(+)
------------------
<S> <C>
Net asset value, beginning of year ....................... $ 14.29
----------
Income from Investment Operations:
Net investment loss ..................................... ( 0.25)
Net realized and unrealized gain on investments ......... 0.14
----------
Total from Investment Operations ........................ ( 0.11)
----------
Less Distributions:
Distributions from net realized gains ................... --
----------
Net asset value, end of year ............................. $ 14.18
==========
Total Return (%) (a) ..................................... ( 0.77) (b)
Ratios and Supplemental Data
Expenses to average daily net assets ....................
With expenses waived (%) ............................... 2.35 (c)
Without expenses waived (%) ............................ 2.61 (c)
Net investment loss to average daily net assets (%) ..... ( 1.75) (c)
Portfolio turnover rate (%) (b) ......................... 129
Net assets, end of year ($ millions) .................... 9
</TABLE>
-------
* Per share amounts have been calculated using the monthly average share
method.
(+) For the period November 6, 1997 (commencement of operations) to October
31, 1998.
(+)(+) For the period January 2, 1998 (commencement of Class B Shares) to
October 31, 1998.
(a) These returns are calculated without the imposition of either front-end or
contingent deferred sales charges.
(b) Not annualized.
(c) Annualized.
The accompanying notes are an integral part of the financial statements.
54
<PAGE>
--------------------------------------------------------------------------------
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
OCTOBER 31
-----------------------------------------------------------
2000 1999 1998 1997 1996
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year .......... $ 23.21 $ 22.62 $ 30.39 $ 24.08 $ 18.86
-------- -------- --------- -------- --------
Income from Investment Operations:
Net investment loss ........................ ( 0.12) ( 0.04) ( 0.06) ( 0.02) ( 0.05)
Net realized and unrealized gain (loss)
on investments ............................ 6.08 0.63 ( 5.98) 8.21 6.12
-------- -------- --------- -------- --------
Total from Investment Operations ........... 5.96 0.59 ( 6.04) 8.19 6.07
-------- -------- --------- -------- --------
Less Distributions:
Dividends from net investment income ....... -- -- -- -- ( 0.01)
Distributions from net realized gains ...... -- -- ( 1.73) ( 1.88) ( 0.84)
-------- -------- --------- -------- --------
Total Distributions ........................ -- -- ( 1.73) ( 1.88) ( 0.85)
-------- -------- --------- -------- --------
Net asset value, end of year ................ $ 29.17 $ 23.21 $ 22.62 $ 30.39 $ 24.08
======== ======== ========= ======== ========
Total Return (%) (a) ........................ 25.68 2.61 (20.96) 36.68 33.18
Ratios and Supplemental Data
Expenses to average daily net
assets (%) ................................ 1.30 1.26 1.22 1.25 1.41
Net investment loss to average daily net
assets (%) ................................ ( .44) ( .18) ( .22) ( .09) ( .21)
Portfolio turnover rate (%) (b) ............ 85 42 52 54 80
Net assets, end of year ($ million)......... 107 125 174 222 96
<CAPTION>
CLASS B SHARES*
-----------------------------------------
FOR THE YEARS ENDED
OCTOBER 31
-----------------------------------------
2000 1999 1998(+)
----------- ----------- -----------------
<S> <C> <C> <C>
Net asset value, beginning of year .......... $ 22.41 $ 22.00 $ 27.98
-------- -------- ----------
Income from Investment Operations:
Net investment loss ........................ ( 0.33) ( 0.22) ( 0.20)
Net realized and unrealized gain (loss)
on investments ............................ 5.89 0.63 ( 5.78)
-------- -------- ----------
Total from Investment Operations ........... 5.56 0.41 ( 5.98)
-------- -------- ----------
Less Distributions:
Dividends from net investment income ....... -- -- --
Distributions from net realized gains ...... -- -- --
-------- -------- ----------
Total Distributions ........................ -- -- --
-------- -------- ----------
Net asset value, end of year ................ $ 27.97 $ 22.41 $ 22.00
======== ======== ==========
Total Return (%) (a) ........................ 24.81 1.86 (21.37)(b)
Ratios and Supplemental Data
Expenses to average daily net
assets (%) ................................ 2.05 2.01 1.98 (c)
Net investment loss to average daily net
assets (%) ................................ ( 1.19) ( .95) ( .93)(c)
Portfolio turnover rate (%) (b) ............ 85 42 52
Net assets, end of year ($ million)......... 10 9 9
<CAPTION>
CLASS C SHARES*
-----------------------------------------------------------
FOR THE YEARS ENDED
OCTOBER 31
-----------------------------------------------------------
2000 1999 1998 1997 1996
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year .......... $ 22.42 $ 22.01 $ 29.83 $ 23.84 $ 18.79
-------- -------- --------- -------- --------
Income from Investment Operations:
Net investment loss ........................ ( 0.32) ( 0.22) ( 0.26) ( 0.23) ( 0.22)
Net realized and unrealized gain (loss)
on investments ............................ 5.88 0.63 ( 5.83) 8.10 6.11
-------- -------- --------- -------- --------
Total from Investment Operations ........... 5.56 0.41 ( 6.09) 7.87 5.89
-------- -------- --------- -------- --------
Less Distributions:
Dividends from net investment income ....... -- -- -- -- --
Distributions from net realized gains ...... -- -- ( 1.73) ( 1.88) ( 0.84)
-------- -------- --------- -------- --------
Total Distributions ........................ -- -- ( 1.73) ( 1.88) ( 0.84)
-------- -------- --------- -------- --------
Net asset value, end of year ................ $ 27.98 $ 22.42 $ 22.01 $ 29.83 $ 23.84
======== ======== ========= ======== ========
Total Return (%) (a) ........................ 24.80 1.86 (21.55) 35.63 32.22
Ratios and Supplemental Data
Expenses to average daily net
assets (%) ................................ 2.05 2.01 1.97 2.00 2.13
Net investment loss to average daily net
assets (%) ................................ ( 1.18) ( .94) ( .96) ( .85) ( .94)
Portfolio turnover rate (%) (b) ............ 85 42 52 54 80
Net assets, end of year ($ million)......... 51 61 84 90 25
</TABLE>
-------
* Per share amounts have been calculated using the monthly average share
method.
(+) For the period January 2, 1998 (commencement of Class B Shares) to October
31, 1998.
(a) These returns are calculated without the imposition of either front-end or
contingent deferred sales charges.
(b) Not annualized.
(c) Annualized.
The accompanying notes are an integral part of the financial statements.
55
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust - Technology 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 PERIOD ENDED
OCTOBER 31
----------------------
2000(+)
----------------------
<S> <C>
Net asset value, beginning of period ......................... $ 14.29
--------
Income from Investment Operations:
Net investment loss ......................................... ( 0.26)
Net realized and unrealized gain on investments ............. 3.40
--------
Total from Investment Operations ............................ 3.14
--------
Net asset value, end of period ............................... $ 17.43
========
Total Return (%) (a) (b) ..................................... 21.97
Ratios and Supplemental Data
Expenses to average daily net assets (%) (c) ................ 1.62
Net investment loss to average daily net assets (%) (c) ..... ( 1.37)
Portfolio turnover rate (%) (b) ............................. 441
Net assets, end of period ($ millions) ...................... 65
<CAPTION>
CLASS B SHARES* CLASS C SHARES*
---------------------- ---------------------
FOR THE PERIOD ENDED FOR THE PERIOD ENDED
OCTOBER 31 OCTOBER 31
---------------------- ---------------------
2000(+) 2000(+)
---------------------- ---------------------
<S> <C> <C>
Net asset value, beginning of period ......................... $ 14.29 $ 14.29
-------- --------
Income from Investment Operations:
Net investment loss ......................................... ( 0.40) ( 0.40)
Net realized and unrealized gain on investments ............. 3.42 3.41
-------- --------
Total from Investment Operations ............................ 3.02 3.01
-------- --------
Net asset value, end of period ............................... $ 17.31 $ 17.30
======== ========
Total Return (%) (a) (b) ..................................... 21.13 21.06
Ratios and Supplemental Data
Expenses to average daily net assets (%) (c) ................ 2.37 2.37
Net investment loss to average daily net assets (%) (c) ..... ( 2.12) ( 2.12)
Portfolio turnover rate (%) (b) ............................. 441 441
Net assets, end of period ($ millions) ...................... 24 40
</TABLE>
-------
* Per share amounts have been calculated using the monthly average share
method.
(+) For the period November 18, 1999 (commencement of operations) to October
31, 2000.
(a) These returns are calculated without the imposition of either front-end or
contingent deferred sales charges.
(b) Not annualized.
(c) Annualized.
The accompanying notes are an integral part of the financial statements.
56
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust - Value Equity 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
OCTOBER 31
----------------------------------------------------------------
2000 1999 1998 1997 1996
----------- ----------- ----------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ......... $ 18.33 $ 18.56 $ 24.27 $ 20.27 $ 18.00
-------- -------- -------- --------- --------
Income from Investment Operations:
Net investment income (loss) .............. 0.21 0.12 0.15 0.22 (a) 0.17
Net realized and unrealized gain (loss)
on investments ........................... 2.48 ( 0.07) ( 0.76) 5.23 2.76
-------- -------- -------- --------- --------
Total from Investment Operations .......... 2.69 0.05 ( 0.61) 5.45 2.93
-------- -------- -------- --------- --------
Less Distributions:
Dividends from net investment income ...... ( 0.11) ( 0.16) ( 0.20) ( 0.15) ( 0.11)
Distributions from net realized gains ..... ( 0.42) ( 0.12) ( 4.90) ( 1.30) ( 0.55)
-------- -------- -------- --------- --------
Total Distributions ....................... ( 0.53) ( 0.28) ( 5.10) ( 1.45) ( 0.66)
-------- -------- -------- --------- --------
Net asset value, end of year ............... $ 20.49 $ 18.33 $ 18.56 $ 24.27 $ 20.27
======== ======== ======== ========= ========
Total Return (%) (b) ....................... 15.13 0.24 ( 3.52) 28.69 16.59
Ratios and Supplemental Data
Expenses to average daily net assets
With expenses waived/recovered (%) ....... 1.45 1.45 1.45 1.61 (a) 1.65
Without expenses waived/
recovered (%) ........................... 1.72 1.70 1.58 1.53 1.99
Net investment income (loss) to average
daily net assets (%) ..................... 1.14 .63 .74 .96 .89
Portfolio turnover rate (c) ............... 95 137 132 155 129
Net assets, end of year ($ millions) ...... 13 15 18 19 15
<CAPTION>
CLASS B SHARES*
------------------------------------------
FOR THE YEARS ENDED
OCTOBER 31
------------------------------------------
2000 1999 1998(+)
----------- ----------- ------------------
<S> <C> <C> <C>
Net asset value, beginning of year ......... $ 18.06 $ 18.29 $ 19.60
-------- -------- ----------
Income from Investment Operations:
Net investment income (loss) .............. 0.07 ( 0.02) 0.02
Net realized and unrealized gain (loss)
on investments ........................... 2.45 ( 0.08) ( 1.33)
-------- -------- ----------
Total from Investment Operations .......... 2.52 ( 0.10) ( 1.31)
-------- -------- ----------
Less Distributions:
Dividends from net investment income ...... -- ( 0.01) --
Distributions from net realized gains ..... ( 0.42) ( 0.12) --
-------- -------- ----------
Total Distributions ....................... ( 0.42) ( 0.13) --
-------- -------- ----------
Net asset value, end of year ............... $ 20.16 $ 18.06 $ 18.29
======== ======== ==========
Total Return (%) (b) ....................... 14.28 ( 0.56) ( 6.68) (c)
Ratios and Supplemental Data
Expenses to average daily net assets
With expenses waived/recovered (%) ....... 2.20 2.20 2.20 (d)
Without expenses waived/
recovered (%) ........................... 2.47 2.45 2.33 (d)
Net investment income (loss) to average
daily net assets (%) ..................... .40 ( .13) .15 (d)
Portfolio turnover rate (c) ............... 95 137 132
Net assets, end of year ($ millions) ...... 1 1 1
<CAPTION>
CLASS C SHARES*
----------------------------------------------------------------
FOR THE YEARS ENDED
OCTOBER 31
----------------------------------------------------------------
2000 1999 1998 1997 1996
----------- ----------- ----------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ......... $ 18.06 $ 18.28 $ 23.98 $ 20.06 $ 17.92
-------- -------- -------- --------- --------
Income from Investment Operations:
Net investment income (loss) .............. 0.07 ( 0.02) -- 0.05 (a) 0.02
Net realized and unrealized gain (loss)
on investments ........................... 2.45 ( 0.07) ( 0.75) 5.20 2.74
-------- -------- -------- --------- --------
Total from Investment Operations .......... 2.52 ( 0.09) ( 0.75) 5.25 2.76
-------- -------- -------- --------- --------
Less Distributions:
Dividends from net investment income ...... -- ( 0.01) ( 0.05) ( 0.03) ( 0.07)
Distributions from net realized gains ..... ( 0.42) ( 0.12) ( 4.90) ( 1.30) ( 0.55)
-------- -------- -------- --------- --------
Total Distributions ....................... ( 0.42) ( 0.13) ( 4.95) ( 1.33) ( 0.62)
-------- -------- -------- --------- --------
Net asset value, end of year ............... $ 20.16 $ 18.06 $ 18.28 $ 23.98 $ 20.06
======== ======== ======== ========= ========
Total Return (%) (b) ....................... 14.28 ( 0.50) ( 4.27) 27.79 15.65
Ratios and Supplemental Data
Expenses to average daily net assets
With expenses waived/recovered (%) ....... 2.20 2.20 2.20 2.36 (a) 2.40
Without expenses waived/
recovered (%) ........................... 2.47 2.45 2.33 2.28 2.74
Net investment income (loss) to average
daily net assets (%) ..................... .40 ( .12) ( .01) .21 .13
Portfolio turnover rate (c) ............... 95 137 132 155 129
Net assets, end of year ($ millions) ...... 12 12 14 13 10
</TABLE>
-------
* Per share amounts have been calculated using the monthly average share
method.
(+) For the period January 2, 1998 (commencement of Class B Shares) to August
31, 1998.
(a) The year ended October 31, 1997 includes payment of previously waived
management fees to the Manager for Class A and C Shares.
(b) These returns are calculated without the imposition of either front-end or
contingent deferred sales charges.
(c) Not annualized.
(d) Annualized
The accompanying notes are an integral part of the financial statements.
57
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust
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
seven series, the Aggressive Growth Fund, the Eagle International
Equity Portfolio, the Growth Equity Fund, the Mid Cap Stock Fund
(formerly the "Mid Cap Growth Fund"), the Small Cap Stock Fund, the
Technology Fund and the Value Equity Fund (each, a "Fund" and
collectively, the "Funds"). The Aggressive Growth Fund primarily seeks
long-term capital appreciation by investing in equity securities of
companies that may have significant growth potential. The Eagle
International Equity Portfolio primarily seeks capital appreciation
through investments in a portfolio of international equity securities.
The Growth Equity Fund primarily seeks growth through long-term
capital appreciation. The Mid Cap Stock Fund primarily seeks long-term
appreciation by investing primarily in equity securities of companies
with medium market capitalization that are believed to have above
average growth potential. The Small Cap Stock Fund seeks long-term
capital appreciation by investing principally in the equity securities
of companies with small market capitalization. The Technology Fund
primarily seeks long-term capital appreciation through equity
investments in companies that rely extensively on technology in their
processes, products or services. The Value Equity Fund primarily seeks
long-term capital appreciation and, secondarily, seeks current income.
The Funds currently offer Class A, Class B 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. For Class A Share
investments greater than $1 million, where a maximum sales charge is
waived, those shares may be subject to a maximum contingent deferred
sales charge of 1% upon redemptions made in less than 18 months of
purchase. Class B Shares, which were offered to shareholders beginning
January 2, 1998, are sold subject to a 5% maximum contingent deferred
sales load (based on the lower of purchase price or redemption price),
declining over a six-year period. 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 made in less than one
year of purchase. The Eagle International Equity Portfolio also offers
Eagle Class Shares, which are subject to certain minimum investment
requirements and are sold without any sales charge. The preparation of
financial statements in accordance with accounting principles
generally accepted in the United States of America 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: Each 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 or the
Nasdaq Stock Market. 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 Eagle International Equity Portfolio
calculates its daily net asset value per share. Although the Eagle
International Equity Portfolio 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 amortized cost,
which approximates market.
FOREIGN CURRENCY TRANSACTIONS: The books and records of the Eagle
International Equity Portfolio 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 Eagle International Equity
Portfolio does not isolate that portion of gains and losses on
investments which is due to changes 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 foreign currency transactions include
gains and losses between trade and settlement date on securities
transactions, gains and losses arising from the purchase and sale 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 Eagle International Equity
Portfolio is authorized to enter into forward foreign currency
contracts for the purpose of hedging against exchange risk arising
from current or anticipated investments in securities denominated in
foreign currencies and to enhance total return. Forward foreign
currency contracts are valued at the contractual forward rate and are
marked-to-market daily, with the change in market value recorded as an
unrealized gain or loss. When the contracts are closed the gain or
loss is realized. Risks may arise from unanticipated movements in the
currency's value relative to the U.S. dollar and from the possible
inability of counter-parties to meet the terms of their contracts.
There were no open forward currency contracts at October 31, 2000.
REPURCHASE AGREEMENTS: Each Fund enters into repurchase agreements
whereby a 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 of at least 100% of the resale
price. Repurchase agreements involve the risk that the seller will
fail to repurchase the security,
58
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
as agreed. In that case, the Fund will bear the risk of market value
fluctuations until they can be sold and may encounter delays and incur
costs in liquidating the security. In the event of bankruptcy or
insolvency of the seller, delays and costs are incurred.
FEDERAL INCOME TAXES: Each Fund is treated as a single corporate
taxpayer as provided for in the Tax Reform Act of 1986, as amended.
Each 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
each Fund, will be distributed to shareholders in the following fiscal
year. Each Fund uses the identified cost method for determining
realized gain or loss on investments for both financial and federal
income tax reporting purposes.
STATE QUALIFICATION EXPENSES: State qualification expenses are
amortized based either on the time period covered by the qualification
or as related shares are sold, whichever is appropriate for each
state.
WRITTEN OPTIONS: When a Fund writes a covered call option, an amount
equal to the premium received by the Fund is included in the Fund's
Statement of Assets and Liabilities as an asset and as an equivalent
liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option
written. The current market value of a written option is based on the
last offering price on the principal exchange on which such option is
traded. The Fund receives a premium on the sale of an option, but
gives up the opportunity to profit from any increase in stock value
above the exercise price of the option. If an option that a Fund has
written either expires on its stipulated expiration date or the Fund
enters into a closing purchase transaction, the Fund realizes a gain
(or loss if the cost of a closing purchase transaction exceeds the
premium received when the option was sold) without regard to any
unrealized gain or loss on the underlying security, and the liability
related to such option is extinguished. If a call option that a Fund
has written is exercised, the Fund realizes a capital gain or loss
from the sale of the underlying security, and the proceeds from such
sale are increased by the premium originally received.
PURCHASED OPTIONS: Certain Funds of the Trust are authorized to enter
into options contracts to manage exposure to market, interest rate or
currency fluctuations. Contracts are valued at the settlement price
established each day by the board of trade or exchange on which they
are traded. The primary risks associated with the use of options is
imperfect correlation between the change in the value of the options
and the market value of the security held, possibility of an illiquid
market and the inability of the counter-party to meet the terms of
their contracts.
EXPENSES: Each Fund is charged for those expenses that are directly
attributable to it, such as management fees, custodian fees,
distribution fees, etc., while other expenses such as insurance
expense, are allocated proportionately among the Funds. Expenses of
each Fund are allocated to each class of shares based upon their
relative percentage of net assets. All expenses that are directly
attributable to a specific class of shares, such as distribution fees,
and shareholders service fees with respect to Eagle International
Equity Portfolio, are charged directly to that class.
ORGANIZATION EXPENSES: Expenses incurred in connection with the
formation of each Fund, except the Aggressive Growth Fund and
Technology Fund, were deferred and are being amortized on a
straight-line basis over 60 months from the date of commencement of
operations for the respective Funds. As of October 31, 2000, all such
expenses have been amortized except for $10,339 related to the Mid Cap
Stock Fund.
CAPITAL ACCOUNTS: Each 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, each Fund may periodically make
reclassifications among certain capital accounts without impacting the
net asset value of the Fund.
OTHER: For purposes of these financial statements, investment security
transactions are accounted for on a trade date basis. Dividend income
and distributions to shareholders are recorded on the ex-dividend
date. Interest income is recorded on the accrual basis.
59
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust
Notes to Financial Statements
(continued)
--------------------------------------------------------------------------------
Note 2: Fund Shares. At October 31, 2000, there were an unlimited number of
shares of beneficial interest of no par value authorized.
AGGRESSIVE GROWTH FUND
----------------------
Transactions in Class A, B and C Shares of the Fund during the year ended
October 31, 2000, were as follows:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES
---------------------------- ---------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------------- -------------- ------------ --------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold ........................ 639,136 $ 17,007,189 201,293 $ 5,354,605 702,692 $ 18,619,612
Shares issued on reinvestment of
distributions ..................... 124,031 2,804,345 49,585 1,108,729 80,252 1,794,442
Shares redeemed .................... (263,680) (6,806,236) (68,542) (1,749,056) (144,514) (3,771,666)
-------- ------------ ------- ------------ -------- ------------
Net increase ....................... 499,487 $ 13,005,298 182,336 $ 4,714,278 638,430 $ 16,642,388
============ ============ ============
Shares outstanding:
Beginning of year ................. 1,317,722 505,461 773,291
--------- ------- --------
End of year ....................... 1,817,209 687,797 1,411,721
========= ======= =========
</TABLE>
Transactions in Class A, B and C Shares of the Fund during the year ended
October 31, 1999, were as follows:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES
---------------------------- -------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------------- -------------- ------------ ------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold ................ 816,167 $ 15,241,364 302,485 $5,661,744 645,799 $ 12,067,581
Shares redeemed ............ (228,646) (4,233,253) (49,661) (930,205) (94,328) (1,773,757)
-------- ------------ ------- ---------- ------- ------------
Net increase ............... 587,521 $ 11,008,111 252,824 $4,731,539 551,471 $ 10,293,824
============ ========== ============
Shares outstanding:
Beginning of year ......... 730,201 252,637 221,820
-------- ------- -------
End of year ............... 1,317,722 505,461 773,291
========= ======= =======
</TABLE>
EAGLE INTERNATIONAL EQUITY PORTFOLIO
------------------------------------
Transactions in Class A, B and C Shares and Eagle Shares of the Fund
during the year ended October 31, 2000, were as follows:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
----------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
------------- --------------- ------------ -------------
<S> <C> <C> <C> <C>
Shares sold ..................... 206,405 $ 5,863,989 23,729 $ 694,286
Shares issued on reinvestment
of distributions .............. 31,859 1,034,768 2,120 66,936
Shares redeemed ................. (131,052) (3,772,192) (11,765) (356,139)
-------- ------------- ------- -----------
Net increase (decrease) ......... 107,212 $ 3,126,565 14,084 $ 405,083
============= ===========
Shares outstanding:
Beginning of year .............. 250,659 14,881
-------- -------
End of year .................... 357,871 28,965
======== =======
<CAPTION>
CLASS C SHARES EAGLE SHARES
---------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT
------------ --------------- ------------- ----------------
<S> <C> <C> <C> <C>
Shares sold ..................... 110,927 $ 3,436,460 328,037 $ 9,734,259
Shares issued on reinvestment
of distributions .............. 34,473 1,089,009 137,365 4,373,714
Shares redeemed ................. (80,798) (2,392,813) (477,947) (14,551,965)
------- ------------- -------- --------------
Net increase (decrease) ......... 64,602 $ 2,132,656 (12,545) $ (443,992)
============= ==============
Shares outstanding:
Beginning of year .............. 236,759 1,037,481
------- ---------
End of year .................... 301,361 1,024,936
======= =========
</TABLE>
60
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust
Notes to Financial Statements
(continued)
--------------------------------------------------------------------------------
EAGLE INTERNATIONAL EQUITY PORTFOLIO (CONTINUED)
------------------------------------------------
Transactions in Class A, B and C Shares and Eagle Shares of the Fund
during the year ended October 31, 1999, were as follows:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
---------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
------------ --------------- ----------- -------------
<S> <C> <C> <C> <C>
Shares sold ..................... 27,491 $ 780,723 9,353 $ 254,995
Shares issued on reinvestment
of distributions .............. 1,024 28,582 58 1,581
Shares redeemed ................. (45,994) (1,298,534) (3,878) (109,438)
------- ------------- ------ -----------
Net increase (decrease) ......... (17,479) $ (489,229) 5,533 $ 147,138
============= ===========
Shares outstanding:
Beginning of year .............. 268,138 9,348
------- ------
End of year .................... 250,659 14,881
======= ======
<CAPTION>
CLASS C SHARES EAGLE SHARES
---------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT
------------ --------------- ------------- ----------------
<S> <C> <C> <C> <C>
Shares sold ..................... 45,492 $ 1,262,451 137,206 $ 3,951,774
Shares issued on reinvestment
of distributions .............. 1,009 27,703 5,474 151,150
Shares redeemed ................. (43,865) (1,222,395) (409,377) (11,689,394)
------- ------------- -------- -------------
Net increase (decrease) ......... 2,636 $ 67,759 (266,697) $ (7,586,470)
============= =============
Shares outstanding:
Beginning of year .............. 234,123 1,304,178
------- ---------
End of year .................... 236,759 1,037,481
======= =========
</TABLE>
GROWTH EQUITY FUND
------------------
Transactions in Class A, B and C Shares of the Fund during the year ended
October 31, 2000, were as follows:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES
------------------------------ --------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------------- ---------------- ------------ -------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold ........................ 1,293,573 $ 69,416,965 544,321 $ 28,305,082 1,260,325 $ 64,867,647
Shares issued on reinvestment of
distributions ..................... 178,368 8,265,553 49,275 2,206,529 215,528 9,649,178
Shares redeemed .................... (374,630) (19,701,921) (51,768) (2,703,279) (378,389) (19,159,035)
--------- -------------- ------- ------------ --------- --------------
Net increase ....................... 1,097,311 $ 57,980,597 541,828 $ 27,808,332 1,097,464 $ 55,357,790
============== ============ ==============
Shares outstanding:
Beginning of year ................. 1,546,474 384,547 1,779,961
--------- ------- ---------
End of year ....................... 2,643,785 926,375 2,877,425
========= ======= =========
</TABLE>
Transactions in Class A, B and C Shares of the Fund during the year ended
October 31, 1999, were as follows:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES
------------------------------ ---------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------------- ---------------- ------------ --------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold ............. 493,710 $ 17,871,948 241,317 $ 8,402,380 775,238 $ 25,998,482
Shares redeemed ......... (331,288) (12,049,577) (40,337) (1,454,604) (395,353) (13,617,224)
-------- ------------- ------- ------------ -------- -------------
Net increase ............ 162,422 $ 5,822,371 200,980 $ 6,947,776 379,885 $ 12,381,258
============= ============ =============
Shares outstanding:
Beginning of year ...... 1,384,052 183,567 1,400,076
--------- ------- ---------
End of year ............ 1,546,474 384,547 1,779,961
========= ======= =========
</TABLE>
61
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust
Notes to Financial Statements
(continued)
--------------------------------------------------------------------------------
MID CAP STOCK FUND
------------------
Transactions in Class A, B and C Shares of the Fund during the year ended
October 31, 2000, were as follows:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES
----------------------------- -------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------------- --------------- ------------ ------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold ..................... 230,081 $ 5,097,074 69,580 $1,501,317 188,079 $ 4,086,557
Shares issued on reinvestment of
distributions .................. 13,219 243,221 2,056 37,227 7,859 142,331
Shares redeemed ................. (135,421) (2,822,617) (14,970) (295,802) (226,689) (4,483,886)
-------- ------------ ------- ---------- -------- ------------
Net increase (decrease) ......... 107,879 $ 2,517,678 56,666 $1,242,742 (30,751) $ (254,998)
============ ========== ============
Shares outstanding:
Beginning of year .............. 878,429 127,121 566,498
-------- ------- --------
End of year .................... 986,308 183,787 535,747
======== ======= ========
</TABLE>
Transactions in Class A, B and C Shares of the Fund during the year ended
October 31, 1999, were as follows:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES
----------------------------- ---------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------------- --------------- ------------ --------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold ................ 167,255 $ 2,515,905 42,991 $ 656,381 192,230 $ 2,895,086
Shares redeemed ............ (418,149) (6,408,277) (71,859) (1,083,381) (295,178) (4,504,091)
-------- ------------ ------- ------------ -------- ------------
Net decrease ............... (250,894) $ (3,892,372) (28,868) $ (427,000) (102,948) $ (1,609,005)
============ ============ ============
Shares outstanding:
Beginning of year ......... 1,129,323 155,989 669,446
--------- ------- --------
End of year ............... 878,429 127,121 566,498
========= ======= ========
</TABLE>
SMALL CAP STOCK FUND
--------------------
Transactions in Class A, B and C Shares of the Fund during the year ended
October 31, 2000, were as follows:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES
-------------------------------- ----------------------------- --------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
--------------- ---------------- ------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold ............... 367,323 $ 10,644,600 70,583 $ 1,948,329 238,220 $ 6,484,063
Shares redeemed ........... (2,079,709) (56,624,018) (121,772) (3,299,715) (1,114,878) (29,107,379)
---------- ------------- -------- ------------ ---------- -------------
Net decrease .............. (1,712,386) $ (45,979,418) (51,189) $ (1,351,386) (876,658) $ (22,623,316)
============= ============ =============
Shares outstanding:
Beginning of year ........ 5,380,077 423,535 2,702,718
---------- -------- ----------
End of year .............. 3,667,691 372,346 1,826,060
========== ======== ==========
</TABLE>
62
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust
Notes to Financial Statements
(continued)
--------------------------------------------------------------------------------
SMALL CAP STOCK FUND (CONTINUED)
--------------------------------
Transactions in Class A, B and C Shares of the Fund during the year ended
October 31, 1999, were as follows:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES
-------------------------------- ----------------------------- --------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
--------------- ---------------- ------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold ................. 842,703 $ 20,207,077 167,884 $ 3,950,709 621,819 $ 14,595,795
Shares redeemed ............. (3,151,721) (75,402,363) (148,184) (3,460,431) (1,747,954) (40,385,471)
---------- ------------- -------- ------------ ---------- -------------
Net increase (decrease) ..... (2,309,018) $ (55,195,286) 19,700 $ 490,278 (1,126,135) $ (25,789,676)
============= ============ =============
Shares outstanding:
Beginning of year .......... 7,689,095 403,835 3,828,853
---------- -------- ----------
End of year ................ 5,380,077 423,535 2,702,718
========== ======== ==========
</TABLE>
TECHNOLOGY FUND
---------------
Transactions in Class A, B and C Shares of the Fund during the period
November 18, 1999 (commencement of operations) to October 31, 2000, were
as follows:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES
------------------------------ ---------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------------- ---------------- ------------- -------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold .............. 4,324,750 $ 71,956,124 1,536,844 $ 25,836,044 2,569,147 $ 42,685,629
Shares redeemed .......... (608,411) (10,961,163) (142,177) (2,663,961) (262,805) (4,839,594)
--------- ------------- --------- ------------ --------- ------------
Net increase ............. 3,716,339 $ 60,994,961 1,394,667 $ 23,172,083 2,306,342 $ 37,846,035
============= ============ ============
Shares outstanding:
Beginning of period ..... -- -- --
--------- --------- ---------
End of period ........... 3,716,339 1,394,667 2,306,342
========= ========= =========
</TABLE>
VALUE EQUITY FUND
-----------------
Transactions in Class A, B and C Shares of the Fund during the year ended
October 31, 2000, were as follows:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES
----------------------------- -------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------------- --------------- ------------ ------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold .................... 119,887 $ 2,251,289 12,632 $ 237,000 152,307 $ 2,821,869
Shares issued on reinvestment of
distributions ................ 22,076 397,144 1,213 21,621 14,812 263,944
Shares redeemed ................ (323,868) (6,046,861) (22,103) (413,233) (236,407) (4,352,703)
-------- ------------ ------- ---------- -------- ------------
Net decrease ................... (181,905) $ (3,398,428) (8,258) $ (154,612) (69,288) $ (1,266,890)
============ ========== ============
Shares outstanding:
Beginning of year ............. 802,947 56,257 654,941
-------- ------- --------
End of year ................... 621,042 47,999 585,653
======== ======= ========
</TABLE>
63
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust
Notes to Financial Statements
(continued)
--------------------------------------------------------------------------------
VALUE EQUITY FUND (CONTINUED)
-----------------------------
Transactions in Class A, B and C Shares of the Fund during the year ended
October 31, 1999, were as follows:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES
----------------------------- -------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------------- --------------- ------------ ------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold ..................... 136,595 $ 2,740,843 28,808 $ 558,979 154,403 $ 3,058,861
Shares issued on reinvestment of
distributions ................. 13,519 254,838 389 7,278 5,023 93,852
Shares redeemed ................. (302,249) (5,780,061) (22,484) (428,531) (249,936) (4,765,104)
-------- ------------ ------- ---------- -------- ------------
Net increase (decrease) ......... (152,135) $ (2,784,380) 6,713 $ 137,726 (90,510) $ (1,612,391)
============ ========== ============
Shares outstanding:
Beginning of year .............. 955,082 49,544 745,451
-------- ------- --------
End of year .................... 802,947 56,257 654,941
======== ======= ========
</TABLE>
Note 3: Purchases and Sales of Securities. For the year ended October 31,
2000, purchases and sales of investment securities (excluding
repurchase agreements and short term obligations) were as follows:
<TABLE>
<CAPTION>
INVESTMENT SECURITIES
-----------------------------------
PURCHASES SALES
---------------- ----------------
<S> <C> <C>
Aggressive Growth Fund ....................... $ 228,521,967 $ 207,182,344
Eagle International Equity Portfolio ......... 33,704,636 32,928,806
Growth Equity Fund ........................... 1,113,491,328 1,005,729,623
Mid Cap Stock Fund ........................... 81,520,502 81,404,817
Small Cap Stock Fund ......................... 149,028,052 232,834,713
Technology Fund .............................. 562,276,009 447,927,944
Value Equity Fund ............................ 23,394,214 33,945,644
</TABLE>
Note 4: Management, Subadvisory, Distribution, Shareholder Servicing Agent,
Fund Accounting and Trustees' Fees: Under the Trust's Investment
Advisory and Administrative Agreements with Heritage Asset Management,
Inc. (the "Manager"), the Growth Equity, Mid Cap Stock and Value
Equity Funds agree to pay to the Manager a fee equal to an annual rate
of 0.75% of the Funds' average daily net assets, computed daily and
payable monthly. For the Aggressive Growth Fund and Small Cap Stock
Fund, the management fee for each Fund is 1.0% on the first $50
million and 0.75% of any excess over $50 million of average daily net
assets. For the Technology Fund, the management fee is 1.0% on the
first $100 million and 0.75% of any excess over $100 million of
average daily net assets. Under the Fund's Investment Advisory and
Administrative Agreement with Eagle Asset Management, Inc. ("Eagle"),
the Eagle International Equity Portfolio annual management
64
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust
Notes to Financial Statements
(continued)
--------------------------------------------------------------------------------
fee is 1.0% on the first $100 million of average daily net assets and
0.80% of any excess over $100 million of average daily net assets. The
Manager contractually waived its investment advisory fees and, if
necessary, reimbursed each Fund to the extent that Class A, Class B
and Class C annual operating expenses exceeded that Fund's average
daily net assets attributable to that class for the 2000 fiscal year
as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B AND CLASS C
--------- --------------------
<S> <C> <C>
Aggressive Growth Fund ....................... 1.60% 2.35%
Eagle International Equity Portfolio ......... 1.97% 2.72%
Growth Equity Fund ........................... 1.40% 2.15%
Mid Cap Stock Fund ........................... 1.55% 2.30%
Small Cap Stock Fund ......................... 1.30% 2.05%
Technology Fund .............................. 1.65% 2.40%
Value Equity Fund ............................ 1.45% 2.20%
</TABLE>
Management fees of $55,188 and $25,861 were waived for the Aggressive
Growth Fund for the periods ended October 31, 1999 and 1998,
respectively. During the year ended October 31, 2000, expenses fell
below the expense cap and Management fees waived in prior periods in
the amount of $81,049 were recovered for the Aggressive Growth Fund
and are included in the management fee. Management fees of $24,049
were waived for the Eagle International Equity Portfolio for the year
ended October 31, 1999. If total Fund expenses fall below the expense
limitation agreed to by Eagle before the end of the year ended October
31, 2001, Eagle International Equity Portfolio may be required to pay
Eagle a portion or all of the waived management fees. For the years
ended October 31, 2000 and 1999, respectively, the Mid Cap Stock Fund
waived management fees of $24,899 and $27,644. If total Fund expenses
fall below the expense limitation agreed to by the Manager before the
end of the years ending October 31, 2002 and 2001, respectively, the
Mid Cap Stock Fund may be required to pay the Manager a portion or all
of the waived management fees. For the years ended October 31, 2000
and 1999, respectively, the Value Equity Fund waived management fees
of $69,913 and $76,169. If total Fund expenses fall below the expense
limitation agreed to by the Manager before the end of the years ending
October 31, 2002 and 2001, respectively, the Value Equity Fund may be
required to pay the Manager a portion or all of the waived management
fees.
Eagle has entered into an agreement with Martin Currie, Inc., a New
York Corporation, to provide the Eagle International Equity Portfolio
investment advice, portfolio management services including the
placement of brokerage orders, and certain compliance and other
services for an annualized fee payable by Eagle equal to .50% of the
average daily net assets on the first $100 million of net assets and
.40% thereafter without regard to any reduction due to the imposition
of expense limitations. For the year ended October 31, 2000, the
Subadviser earned $253,029 for Subadviser fees, which were paid by
Eagle.
Heritage Asset Management, Inc., an affiliate of Eagle, provides
certain administrative services for the Eagle International Equity
Portfolio. Heritage receives a fee in the amount of 0.10% from Eagle
for performing these administrative services.
The Manager has entered into agreements with Eagle (with respect to
the Aggressive Growth Fund, Growth Equity Fund, Mid Cap Stock Fund and
the Technology Fund) and with Eagle and Awad Asset Management, Inc.
(with respect to the Small Cap Stock Fund) to provide 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. For the year ended October 31, 2000, the total
fees the Subadvisers earned were $395,479, $996,780, $120,083,
$751,512 and $513,006 for the Aggressive Growth Fund, Growth Equity
Fund, Mid Cap Stock Fund, Small Cap Stock Fund and Technology Fund,
respectively.
The Manager has entered into an agreement with Osprey Partners
Investment Management, LLC ("Osprey") to provide to the Value Equity
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 .32% of the Value
Equity Fund's average daily net assets. Effective May 18, 1999, all of
the assets of the Value Equity Fund were allocated to Osprey. Prior to
May 18, 1999, the assets of the Fund were managed by Eagle. Eagle will
continue to serve as subadviser to the Fund, although there are no
assets currently allocated to them. For the year ended October 31,
2000, Osprey earned $82,537 for Subadviser fees, which were paid by
the Manager.
65
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust
Notes to Financial Statements
(continued)
--------------------------------------------------------------------------------
Total front end and contingent deferred sales charges received by
Raymond James & Associates, Inc. (the "Distributor") for the year
ended October 31, 2000 were as follows.
<TABLE>
<CAPTION>
FRONT-END
SALES CHARGE CONTINGENT DEFERRED SALES CHARGE
---------------- -----------------------------------------------------
CLASS A SHARES CLASS A SHARES CLASS B SHARES CLASS C SHARES
---------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Aggressive Growth Fund ....................... $ 215,891 $ -- $30,044 $ 5,042
Eagle International Equity Portfolio ......... 29,043 13 1,416 1,471
Growth Equity Fund ........................... 979,559 6 51,408 18,323
Mid Cap Stock Fund ........................... 89,874 7 5,991 1,033
Small Cap Stock Fund ......................... 127,087 2,781 57,927 8,706
Technology Fund .............................. 1,538,976 136 80,532 21,594
Value Equity Fund ............................ 31,120 -- 3,296 3,035
</TABLE>
The Distributor paid sales commission to salespersons from these fees
and incurred other distribution costs.
Total agency brokerage commissions paid by the Funds and agency
brokers commissions paid directly to Raymond James & Associates, Inc.,
for the year ended October 31, 2000 were as follows.
<TABLE>
<CAPTION>
TOTAL AGENCY PAID TO
BROKERAGE RAYMOND JAMES
COMMISSIONS & ASSOCIATES, INC.
-------------- -------------------
<S> <C> <C>
Aggressive Growth Fund ....................... $ 329,767 $33,320
Eagle International Equity Portfolio ......... 137,739 --
Growth Equity Fund ........................... 1,284,162 1,440
Mid Cap Stock Fund ........................... 119,898 3,180
Small Cap Stock Fund ......................... 406,607 34,317
Technology Fund .............................. 506,342 1,290
Value Equity Fund ............................ 73,625 --
</TABLE>
Pursuant to a plan in accordance with Rule 12b-1 of the Investment
Company Act of 1940, as amended, the Trust is authorized to pay the
Distributor a fee pursuant to the Class A Distribution Plan of up to
.35% of the 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 B
and Class C Distribution Plans, the Trust may pay the Distributor a
fee equal to 1.00% of the average daily net assets. Such fees are
accrued daily and payable monthly. Class B Shares will convert to
Class A Shares eight years after the end of the calendar month in
which the shareholder's order to purchase the Class B Shares was
accepted. The Manager, Eagle, Awad Asset Management, Inc. and the
Distributor are all wholly owned subsidiaries of Raymond James
Financial, Inc.
The Manager also is the Fund Accountant, Dividend Paying and
Shareholder Servicing Agent for the Aggressive Growth Fund, the Growth
Equity Fund, the Mid Cap Stock Fund, the Small Cap Stock Fund, the
Technology Fund and the Value Equity Fund. In addition, the Manager is
the Dividend Paying and Shareholder Servicing Agent for the Eagle
International Equity Portfolio.
Trustees of the Trust also serve as Trustees for Heritage Cash Trust,
Heritage Capital Appreciation Trust, Heritage Income-Growth Trust and
Heritage Income Trust, investment companies that also are advised by
the Manager (collectively referred to as the "Heritage funds"). Each
Trustee of the Heritage funds that is not an employee of the Manager
or employee of an affiliate of the Manager received an annual fee of
$8,666, an additional fee of $3,250 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.
AGGRESSIVE GROWTH FUND:
-----------------------
For the year ended October 31, 2000, to reflect reclassifications arising
from permanent book/tax differences primarily attributable to a net
operating loss, the Fund credited undistributed net investment income and
debited accumulated net realized gain $1,121,676.
66
<PAGE>
--------------------------------------------------------------------------------
Heritage Series Trust
Notes to Financial Statements
(continued)
--------------------------------------------------------------------------------
EAGLE INTERNATIONAL EQUITY PORTFOLIO:
-------------------------------------
For the year ended October 31, 2000, to reflect reclassifications arising
from permanent book/tax differences primarily attributable to foreign
currency losses, a net operating loss and basis difference in passive
foreign investment companies (PFICs), the Fund credited undistributed net
investment loss and debited accumulated net realized gain $488,140.
GROWTH EQUITY FUND:
-------------------
For the year ended October 31, 2000, to reflect reclassifications arising
from permanent book/tax differences primarily attributable to a net
operating loss, the Fund credited undistributed net investment income and
debited accumulated net realized gain $3,087,876.
MID CAP STOCK FUND:
-------------------
For the year ended October 31, 2000, to reflect reclassifications arising
from permanent book/tax differences primarily attributable to a net
operating loss, the Fund credited undistributed net investment income and
debited accumulated net realized gain $458,220.
SMALL CAP STOCK FUND:
---------------------
For the year ended October 31, 2000, to reflect reclassifications arising
from permanent book/tax differences primarily attributable to a net
operating loss and REIT distributions, the Fund credited undistributed net
investment income and debited accumulated net realized gain $1,266,371.
The Fund utilized $5,057,448 of net tax basis capital losses during the
current year against net realized gains from investment transactions.
TECHNOLOGY:
-----------
For the period ended October 31, 2000, to reflect reclassifications
arising from permanent book/tax differences primarily attributable to a
net operating loss, the Fund credited undistributed net investment income
and debited accumulated net realized loss $1,869,207.
67
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Report of Independent Certified Public Accountants
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To the Board of Trustees and
Class A, Class B and Class C Shareholders
of Heritage Series Trust
In our opinion, the accompanying statements of assets and liabilities,
including the investment portfolios, 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 Heritage Series Trust -
Aggressive Growth Fund, Heritage Series Trust - Eagle International Equity
Portfolio, Heritage Series Trust - Growth Equity Fund, Heritage Series Trust -
Mid Cap Stock Fund, Heritage Series Trust - Small Cap Stock Fund, Heritage
Series Trust - Technology Fund and Heritage Series Trust - Value Equity Fund
(constituting the Heritage Series Trust, hereafter referred to as the "Trust")
at October 31, 2000, and the results of each of their operations, the changes
in each of their net assets and the financial highlights for each of the
periods presented, in conformity with accounting principles generally accepted
in the United States of America. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Trust's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States of America, 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 audits, which included confirmation
of securities at October 31, 2000 by correspondence with the custodian, provide
a reasonable basis for our opinion.
/s/ PRICEWATERHOUSECOOPERS LLP
------------------------------
PricewaterhouseCoopers LLP
Tampa, Florida
December 8, 2000
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2000 Federal Income Tax Notice
(unaudited)
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During the year ended October 31, 2000, the Aggressive Growth Fund, and Eagle
International Equity Portfolio, the Growth Equity Fund, the Mid Cap Stock Fund,
and the Value Equity Fund paid to shareholders $50,903, $535,764, $9,795,696,
$438,216 and $240,041 or $0.02, $3.57, $2.58, $0.30 and $0.17 per share, from
long-term capital gains, respectively. For such period 100% of the income
dividends for the Value Equity Fund qualified for the dividend received
deduction available for corporations.
68
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HERITAGE FAMILY OF FUNDS (TM)
FROM OUR FAMILY TO YOURS: THE INTELLIGENT CREATION OF WEALTH.
HERITAGE STOCK FUNDS
Aggressive Growth
Capital Appreciation
Eagle International
Growth Equity
Income-Growth
Mid Cap
Small Cap
Technology
Value Equity
HERITAGE BOND FUNDS
High Yield
Intermediate Government
HERITAGE MONEY MARKET FUNDS
Money Market
Municipal Money Market
We are pleased that many of you are also investors in these funds. For more
information and a prospectus for any of these mutual funds, please contact your
financial advisor. Please read the prospectus carefully before you invest in any
of the funds.
This report is for the information of shareholders of Heitage Series
Trust-Aggressive Growth Fund, Eagle International Equity Portfolio, Growth
Equity Fund, Mid Cap Stock Fund, Small Cap Stock Fund Technology Fund and Value
Equity Fund. It may also be used as sales literature when preceded or
accompanied by a prospectus.
(C) 200 Heritage Asset Management, Inc.
55M 10/00
AR53415-HST
[LOGO] Heritage Series Trust
P.O. Box 33022
St. Petersburg, FL 33733
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ADDRESS SERVICE REQUESTED
