THE EAGLE
INTERNATIONAL [GRAPHIC OMITTED]
EQUITY PORTFOLIO
Semiannual
(unaudited)
APRIL 30, 2000
EAGLE
ASSET MANAGEMENT INC.
880 CARILLON PARKWAY
P.O. BOX 10520
ST. PETERSBURG, FL
33733-0520
(727) 573-2453
(800) 237-3101
<PAGE>
June 20, 2000
Dear Shareholders:
We are pleased to provide you with the semiannual report for the Eagle
International Equity Portfolio (the "Fund") for the six-month period ended
April 30, 2000. The Eagle Class of shares of your Fund appreciated by +11.08%,
after expenses. In comparison, the Morgan Stanley Capital International Europe,
Australia, Far East Index (the "MSCI EAFE Index" or "Index") rose by +6.72%
over the same time period. The Fund's performance for the 1-, 3-year and life
of the Fund* periods as of the calendar quarter ended March 31, 2000 (Eagle
Class shares, average annual return) were as follows: +32.9%, +18.6% and
+15.0%, respectively.
As we have mentioned in earlier reports, Martin Currie, Inc. of Scotland, the
Fund's subadviser, invests the Fund's assets in both developed and emerging
markets around the world. Consequently, we believe your Funds should be
considered a core international holding in your overall investment portfolio.
We hope the attached investment commentary from Martin Currie will be helpful
in understanding the dynamic environment of the major world markets--Japan,
Continental Europe, and Asia--as well as the smaller markets and their role on
Fund performance during the time period discussed. The subadviser also includes
a near-term outlook on both the world and U.S. markets, to aid investors in
better-understanding the broad spectrum of the world marketplace.
On behalf of all of us at both Eagle and Heritage, thank you for your
continuing investment in the Eagle International Equity Portfolio.
Sincerely, Sincerely,
/s/ BRIAN C. LEE /s/ STEPHEN G. HILL
---------------- -------------------
Brian C. Lee Stephen G. Hill
President President
Heritage Series Trust Eagle Asset Management
Eagle International Equity Portfolio
----------------
* Inception date for the Eagle Class of shares is December 27, 1995.
S E M I A N N U A L R E P O R T
<PAGE>
June 2, 2000
INVESTMENT COMMENTARY from MARTIN CURRIE, INC.
Eagle International Equity Portfolio (the "Fund")
For much of the period under review, international markets have continued to
move ahead, supported by rallies in the technology, media and telecom ("TMT
stocks") sectors. Japan, Europe and Asia benefited in particular with their
indices dominated by key global TMT stocks. However, further interest rate
rises in both the United States and Europe created increased volatility, with
markets hitting a peak in mid-March this year. Since then, much of the earlier
gains have been lost. The UK market missed much of the earlier rally, impacted
by a weak bond market and a strong currency. The Euro continued to weaken
against the Dollar while the Yen was in a more stable range over the
six-months. The Morgan Stanley Capital International Europe, Australia, Far
East Index, (the "MSCI EAFE Index" or "Index") rose by 6.72% over the period to
April 30, 2000, whereas the Fund's Eagle Shares rose by 11.08% * after
expenses. Over the rolling 12 months, the MSCI EAFE Index rose by 13.92% and
the Eagle Shares rose by 20.24%*.
JAPAN (28.7% of net assets at April 30, 2000) continued to rally for the early
part of the period. But as the economy stalled in the first quarter and TMT
stocks fell out of favour, the market fell sharply. Having built up our
weighting in early 1999, well ahead of the Index, we took profits in early
January, reducing our exposure to a more neutral position. New holdings
included stocks with a domestic flavour such as Daiwa House and Sumitomo
Electric Industries. We took substantial profits from the highly rated (and
strongly performing) TMT stocks such as Canon, Hitachi, Sony, Rohm and the
spectacular performer NTT DoCoMo. Total sales included Kubota Corporation and
Promise Co. In the short term, we will continue to run with a more neutral
stance in Japan, but the enormous change in equity ownership structure, the
unwinding of cross share ownership and the increasing corporate activity
provide support for recovery later this year.
Having run an underweight position in CONTINENTAL EUROPE (38.8% of net assets
at April 30, 2000) for much of 1999, we began to add towards the turn of the
year with profits raised in Japan. Part of this move was driven by increasing
signs of economic recovery in France and Italy and, in part, an expectation
that the Euro would stabilize, if not rally. New holdings reflected a wish to
increase our TMT stock exposure and Europe contains some of the most
interesting opportunities. Tietoenator (Finland), Alstom (France), Alcatel
(France), Deutsch Telecom (Germany), Mediaset (Italy), Elsevier (Netherlands)
and Amadeus Global Travel (Spain) are all examples of this trend. Sales
reflected a reduction in exposure to companies where earnings remained under
pressure: Peugeot, Accor, Compagnie de Saint Gobain and Lafarge (France). We
continue to add to the region on weakness as earnings momentum improves for the
region as a whole. We have remained underweight the UK Index (16.4% of net
assets at April 30, 2000) concerned that rising interest rates, a dependency on
'old economy' stocks and the impact of a strong Sterling would see the Index
lagging the rest of Europe. New holdings reflected the TMT theme such as
Orange, Sage and WPP Group. Sales reduced exposure to the financial sector;
Halifax, Legal & General, National Westminster Bank and Lloyds where profit
margins remain under pressure.
----------------
* Calculated without the imposition of either front-end or contingent deferred
sales charges. See the first letter by Brian C. Lee and Steve G. Hill for a
full statement of returns. Past performance is no guarantee of future
results.
2 S E M I A N N U A L R E P O R T
<PAGE>
ASIA (9.1% of net assets at April 30, 2000) continued to represent an
overweight position against the Index, but in part, this reflected exposure to
non-Index markets such as India, Korea, Malaysia, Taiwan and Thailand. The
region rallied as currencies and economies continued to improve and company
results reflected the dramatically changed trading conditions. It is also a
prime area for equipment supplies and electronic manufacturing. As a technology
play, the region also suffered profit taking in late March and April. New
holdings included AMP Ltd (Australia) China Telecom (Hong Kong), Li & Fung,
Television Broadcasts, I Cable Communications (Hong Kong), Malayan Banking,
Natsteel Electronics (Singapore) Singapore Telecom, Samsung Electronics (South
Korea) and Compal Electronics (Taiwan). We sold Telstra and Tabcorp (Australia)
and a number of less focussed groups in Hong Kong, China Everbright, Dao Heng
Bank and Henderson Land. In Singapore, we sold Overseas Chinese Banking Corp,
Singapore Airlines and Neptune Oriental Lines to fund the purchase of more
technology sensitive groups. While reducing our overall exposure to Asia, we
remain overweight against the Index.
We have had selective exposure to SMALLER MARKETS over the period, which have
rallied on the back of stronger world growth, rising commodity prices and the
interest in telecom and technology related sectors. While we find all of this
in Asia, as described above, we also continued to favour Brazil, where we
bought Embratel Participacoes and Unibanco. In Mexico, we added Grupo
Financiero Banamex. In both countries, stronger economies have resulted in
improving financial health for the banks. Nice Systems in Israel and Softline
in South Africa are good examples of quality technology related stocks in
smaller markets. Sales included Companie Val Do Rio Doce (Brazil), Cemex
(Mexico), Commercial International Bank (Egypt) Orbotech and Anglo American
(South Africa)
OUTLOOK
Until investors are convinced that the pressures on the world economy are under
control, we anticipate that the current volatility in world markets will
continue. The direction of US monetary policy and the need for an easing in the
pace of economic expansion provide the main focus. But the situation is finely
poised. Too severe a move in interest rates, or too negative a reaction in the
equity market, could precipitate a much harder economic landing than desired -
and a more dramatic reaction from world stockmarkets.
We continue to believe that the US economy will gradually ease from its peak in
late 1999, and that the inflation increases, which have become evident, will
dissipate gradually, as the year unfolds. We remain enthusiastic about the
outlook for markets for the rest of the year and retain a low overall cash
position. In currency markets, we are unhedged. We see the Euro as a cheap
currency and believe that the Yen will remain within a fairly narrow trading
range.
On behalf of all of us at Martin Currie, Inc., thank you for your continuing
confidence in us. We look forward to reporting to you again after the end of
the Fund's fiscal year.
3 S E M I A N N U A L R E P O R T
<PAGE>
HERITAGE SERIES TRUST - EAGLE INTERNATIONAL EQUITY PORTFOLIO
INVESTMENT PORTFOLIO
APRIL 30, 2000
(UNAUDITED)
MARKET
SHARES VALUE
------ -------
COMMON STOCKS--95.5%(a)
-----------------------
AUSTRALIA -- 1.6%
-----------------
28,000 AMP Ltd.* ......................... $ 245,280
10,000 Brambles Industries Ltd. .......... 281,488
10,700 News Corporation Ltd. ............. 135,886
93,000 North Ltd. ........................ 159,949
---------
822,603
---------
BRAZIL -- 0.9%
--------------
8,500 Embratel Participacoes, SA,
Sponsored ADR .................... 191,250
5,300 Petrobras, Sponsored ADR .......... 126,538
4,800 UBB Unibanco Uniao
De Barncos, Sponsored GDR* ....... 119,700
---------
437,488
---------
FINLAND -- 3.7%
---------------
29,704 Nokia AB OY ....................... 1,703,946
3,862 Tietoenator ....................... 186,080
---------
1,890,026
---------
FRANCE -- 14.5%
---------------
2,914 Alcatel ........................... 675,525
9,118 Alstom* ........................... 227,206
9,141 Aventis SA ........................ 504,422
7,973 AXA-UAP Groupe .................... 1,182,190
3,073 Cap Gemini SA ..................... 603,431
7,626 Carrefour ......................... 496,388
2,025 France Telecom* ................... 313,326
1,711 Societe Generale .................. 354,336
1,915 Sodexho Alliance .................. 286,905
3,092 Suez Lyonnaise des Eaux ........... 484,887
7,482 Total Fina SA, Class "B" .......... 1,135,235
11,687 Vivendi ........................... 1,155,961
---------
7,419,812
---------
GERMANY -- 2.4%
---------------
5,968 Bayerische Hypo-Vereinsbank AG 363,509
8,200 Deutsche Telekom* ................. 532,185
559 Sap AG ............................ 329,559
---------
1,225,253
---------
GREECE -- 0.1%
--------------
1,900 Hellenic Telecom OTE* ............. 42,772
---------
MARKET
SHARES VALUE
------ -------
COMMON STOCKS (CONTINUED)
-------------------------
HONG KONG -- 3.1%
-----------------
124,000 Bank of East Asia Ltd. ........... 268,243
60,000 China Telecom (Hong Kong) Ltd.* 429,441
28,500 Hutchison Whampoa, Ltd. .......... 413,457
125,000 i-CABLE Communications, Ltd.* .... 54,563
49,000 Li & Fung Ltd. ................... 191,239
35,000 Television Broadcasts ............ 239,274
---------
1,596,217
---------
INDIA -- 0.6%
-------------
8,033 Indian Opportunities Fund,
Ltd. (b)* ....................... 123,226
10,900 Videsh Sanchar Nigam, Ltd. ....... 203,285
---------
326,511
---------
IRELAND -- 0.3%
---------------
19,932 Bank of Ireland .................. 134,452
---------
ISRAEL -- 0.2%
--------------
1,400 Nice Systems Ltd,
Sponsored ADR * ................. 91,613
---------
ITALY -- 4.6%
-------------
27,953 Alleanza Assicuraz ............... 289,189
16,538 Mediaset* ........................ 268,369
38,688 San Paolo IMI SPA ................ 541,637
88,505 Telecom Italia Mobiliare SPA ..... 844,829
30,084 Telecom Italia SPA * ............. 420,633
---------
2,364,657
---------
JAPAN -- 28.2%
--------------
49,000 Asahi Chemical Industry
Company, Ltd. ................... 282,165
3,400 Benesse Corporation .............. 303,912
16,000 Brigestone Corporation ........... 347,359
18,000 Canon, Inc. ...................... 823,219
27,000 Daiwa House Industry Company ..... 179,975
5,000 FamilyMart Company, Ltd. ......... 183,308
7,000 Fuji Photo Film Company, Ltd. .... 280,609
17,000 Fujitsu Ltd. ..................... 481,600
40,000 Hitachi, Ltd. .................... 477,711
9,000 Honda Motor Company, Ltd. ........ 402,444
6,000 Ito--Yokado Company, Ltd. ........ 438,272
The accompanying notes are an integral part of the financial statements.
4 S E M I A N N U A L R E P O R T
<PAGE>
HERITAGE SERIES TRUST - EAGLE INTERNATIONAL EQUITY PORTFOLIO
INVESTMENT PORTFOLIO
APRIL 30, 2000
(UNAUDITED)
(CONTINUED)
MARKET
SHARES VALUE
------ --------
COMMON STOCKS (CONTINUED)
-------------------------
JAPAN -- (CONTINUED)
--------------------
23,000 Kao Corporation ................... $ 700,551
3,000 Mabuchi Motor Company, Ltd. ....... 330,510
22,000 Marui Company, Ltd. ............... 413,461
40,000 Mitsui Marine & Fire Insurance..... 175,902
12,000 MKC-STAT Corporation * ............ 246,632
6,000 Namco Ltd. ........................ 244,966
44 NTT Mobile Communication .......... 1,470,537
3,000 Riso Kagaku Corporation ........... 83,322
3,300 Rohm Company, Ltd. ................ 1,105,957
8,000 Secom Company, Ltd. ............... 671,018
19,000 Shin-Etsu Chemical
Company, Ltd. .................... 1,004,398
8,500 Sony Corporation .................. 980,410
45,000 Sumitomo Bakelite Company, Ltd. 495,348
25,000 Sumitomo Electric Industries* ..... 333,056
11,000 Taisho Pharmaceutical
Company .......................... 368,653
45,000 Toppan Printing Company, Ltd. ..... 470,768
1,500 Trend Micro Inc.* ................. 224,969
17,000 Yamanouchi Pharmaceutical ......... 898,671
----------
14,419,703
----------
MALAYSIA -- 0.5%
----------------
65,000 Malayan Banking Berhad ............ 270,263
----------
MEXICO -- 1.6%
--------------
81,000 Wal Mart de Mexico* ............... 187,221
3,300 Grupo Televisa, SA,
Sponsored GDR * .................. 209,344
29,000 Grupo Financiero Banamex, SA,
Series "O"* ...................... 104,782
5,100 Telefonos de Mexico,
Sponsored ADR .................... 299,944
----------
801,291
----------
NETHERLANDS -- 4.1%
-------------------
50,681 Elsevier, NV ...................... 492,993
22,258 VNU, NV ........................... 1,190,815
7,419 ING Groep NV ...................... 404,812
----------
2,088,620
----------
POLAND -- 0.2%
--------------
15,000 Telekomunikacja Polska,
Sponsored GDR* ................... 114,000
----------
MARKET
SHARES VALUE
------ --------
COMMON STOCKS (CONTINUED)
-------------------------
SINGAPORE -- 1.7%
-----------------
3,900 Chartered Semiconductor
Manufacturing, Sponsored
ADR * ............................ 340,763
47,000 Natsteel Electronics Ltd.* ........ 269,909
180,000 Singapore Telecom * ............... 259,478
----------
870,150
----------
SOUTH AFRICA -- 0.2%
--------------------
3,400 Nedcor Investment
Bank Holdings .................... 1,454
96,000 Softline Ltd.* .................... 98,683
----------
100,137
----------
SOUTH KOREA -- 0.8%
-------------------
2,700 Samsung Electronics,
Sponsored GDR .................... 432,675
----------
SPAIN -- 3.8%
-------------
19,952 Amadeus Global Travel,
Series "A"* ...................... 246,682
35,220 Banco Bilbao Vizcaya
Argenta .......................... 480,278
43,438 Banco Santander Central Hisp ...... 452,944
35,183 Telefonica S.A.* .................. 782,990
----------
1,962,894
----------
SWEDEN -- 4.0%
--------------
17,400 Ericsson, Class "B" ............... 1,546,710
23,100 Foreningsparbanken, AB,
Class "A" ........................ 340,085
5,800 Securitas AB, Series "B" .......... 150,078
----------
2,036,873
----------
SWITZERLAND -- 1.3%
-------------------
360 Holderbank Financiere Glarus ...... 407,063
197 Novartis AG ....................... 275,187
----------
682,250
----------
TAIWAN -- 0.5%
--------------
17,468 Compal Electronics ................ 241,059
----------
THAILAND -- 0.2%
----------------
320,000 Thai Petrochemical Industry (c)* 78,182
----------
The accompanying notes are an integral part of the financial statements.
5 S E M I A N N U A L R E P O R T
<PAGE>
HERITAGE SERIES TRUST - EAGLE INTERNATIONAL EQUITY PORTFOLIO
INVESTMENT PORTFOLIO
APRIL 30, 2000
(UNAUDITED)
(CONTINUED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
-------------------------
UK -- 16.4%
-----------
21,000 3I Group, PLC* ................... $ 420,470
17,500 Allied Zurich, PLC ............... 174,106
8,000 AstraZeneca PLC .................. 335,430
45,000 BP Amoco, PLC .................... 388,497
13,000 British Sky Broadcasting, PLC*.... 318,786
22,000 British Telecomunications, PLC.... 393,909
26,000 Cable & Wireless, PLC ............ 431,525
22,000 GKN, PLC* ........................ 304,851
18,500 Glaxo Welcome, PLC ............... 571,751
65,000 Hilton Group, PLC ................ 273,245
18,000 HSBC Holdings, PLC ............... 198,978
36,000 Marconi .......................... 452,280
4,000 Rio Tinto, PLC ................... 62,278
22,893 Royal Bank of Scotland
Group, PLC ...................... 357,140
38,000 Sage Group, PLC .................. 423,319
11,000 Scot & Newcastle, PLC ............ 80,494
38,000 Shell Transport &
Trading Company, PLC ............ 311,351
28,000 SmithKline
Beecham, PLC .................... 383,633
23,991 Smiths Industries, PLC ........... 281,140
65,000 Stagecoach Holdings, PLC ......... 64,010
439,333 Vodafone Airtouch, PLC ........... 2,011,019
11,000 WPP Group PLC* ................... 177,259
----------
8,415,471
----------
Total Common Stocks
(cost $37,556,302).............................. 48,864,972
----------
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
CONVERTIBLE PREFERRED SHARES -- 0.5%(a)
---------------------------------------
JAPAN -- 0.5%
-------------
30,000,000 Sanwa International Finance
(Bermuda) 1.25% 01/08/05 (d)...... $ 283,294
----------
Total Convertible Preferred Shares
(cost $250,348)................................. 283,294
----------
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
CONVERTIBLE BONDS--0.1%(a)
--------------------------
FRANCE--0.1%
------------
42,174 Lafarge, 0.0%, 03/01/20............. 32,474
----------
Total Convertible Bonds
(cost $30,095).................................. 32,474
----------
Total Investment Portfolio
excluding repurchase agreement
(cost $37,836,745).............................. 49,180,740
REPURCHASE AGREEMENT--1.9%(a)
-----------------------------
Repurchase Agreement with State Street Bank
and Trust Company, dated April 28, 2000 @
5.60% to be repurchased at $961,448 on May
01, 2000, collateralized by $980,000 United
States Treasury Notes, 4.63% due December
31, 2000, (market value $994,818 including
interest) (cost $961,000)........................ 961,000
-----------
TOTAL INVESTMENT PORTFOLIO,
(cost $38,797,745)(e), 98.0%(a) ................ 50,141,740
OTHER ASSETS AND LIABILITIES, net, (2.0%)(a)..... 1,037,831
-----------
NET ASSETS, 100.0% .............................. $51,179,571
===========
----------------------
* Not an income-producing security.
(a) Percentages indicated are based on net assets.
(b) Martin Currie Investment Management Limited is the manager of the Indian
Opportunities Fund, Ltd.
(c) Security is deemed illiquid and is fair valued by the Board of Trustees.
(d) Principal amount is stated in Japanese Yen.
(e) The aggregate identified cost for federal income tax purposes is
substantially the same. Market value includes net unrealized appreciation
of $11,343,995 which consists of aggregate gross unrealized appreciation
for all securities in which there is an excess of market value over tax
cost of $13,952,748 and aggregate gross unrealized depreciation for all
securities in which there is an excess of tax cost over market value of
$2,608,753
ADR -- American Depository Receipt
GDR -- Global Depository Receipt
The accompanying notes are an integral part of the financial statements.
6 S E M I A N N U A L R E P O R T
<PAGE>
HERITAGE SERIES TRUST - EAGLE INTERNATIONAL EQUITY PORTFOLIO
INVESTMENT PORTFOLIO
APRIL 30, 2000
(UNAUDITED)
(CONTINUED)
MARKET % OF NET
INDUSTRY DIVERSIFICATION VALUE ASSETS
------------------------ ------- ------
COMMON STOCKS
Aerospace & Defense .............. $ 281,140 0.6%
Automobiles ...................... 1,054,654 2.1%
Banks ............................ 3,881,565 7.6%
Chemicals ........................ 1,860,092 3.6%
Construction & Building Materials 587,038 1.1%
Diversified Industries ........... 1,155,962 2.3%
Electronic & Electrical Equipment 2,854,513 5.6%
Engineering & Machinery .......... 227,206 0.4%
Food & Drug Retailers ............ 679,696 1.3%
General Retailers ................ 1,038,954 2.0%
Household Goods & Textiles ....... 980,410 1.9%
Insurance ........................ 175,902 0.3%
Information Technology Hardware .. 6,280,451 12.2%
Leisure, Entertainment & Hotels .. 518,211 1.0%
Life Assurance ................... 1,716,658 3.4%
Media & Photography .............. 3,702,780 7.3%
Mining ........................... 222,227 0.4%
Oil & Gas ........................ 1,961,622 3.8%
Personal Care & Household Products 700,551 1.4%
Pharmaceuticals .................. 3,337,747 6.6%
Real Estate ...................... 174,106 0.3%
Restaurants, Pubs & Breweries .... 80,494 0.2%
Software & Computer Services ..... 2,359,355 4.7%
Speciality & Other Finance ....... 1,468,201 2.9%
Support Services ................. 1,603,152 3.1%
Telecommunication Services ....... 8,996,015 17.5%
Transportation & Storage ......... 481,384 0.9%
Utilities, Water ................. 484,886 0.9%
CONVERTIBLE PREFERRED SHARES
Banks ............................ 283,294 0.6%
CONVERTIBLE BONDS
Construction & Building Materials 32,474 0.1%
REPURCHASE AGREEMENT .............. 961,000 1.9%
----------- ----
TOTAL INVESTMENTS ................. $50,141,740 98.0%
=========== ====
7 S E M I A N N U A L R E P O R T
<PAGE>
EAGLE INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2000
(UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS
------
Investments, at market value (identified cost $37,836,745) (Note 1)...................... $49,180,740
Repurchase agreement (cost $961,000) (Note 1)............................................ 961,000
Cash .................................................................................... 792
Receivables:
Investments sold ....................................................................... 866,463
Fund shares sold ....................................................................... 464,010
Dividends and interest ................................................................. 102,276
Foreign taxes recoverable .............................................................. 38,521
Deferred state qualification expenses (Note 1) .......................................... 30,915
Prepaid insurance ....................................................................... 6,746
-----------
Total assets ........................................................................ 52,357,938
LIABILITIES
-----------
Payables (Note 4):
Investments purchased .................................................................. $928,057
Fund shares redeemed ................................................................... 89,087
Accrued management fee ................................................................. 50,046
Accrued distribution fee ............................................................... 37,130
Other accrued expenses ................................................................. 74,047
--------
Total liabilities ................................................................... 1,178,367
-----------
Net assets, at market value ............................................................. $51,179,571
===========
NET ASSETS
----------
Net assets consist of:
Paid-in capital (Note 5) ............................................................... $37,208,466
Accumulated net investment loss (Notes 1 and 5) ........................................ (250,205)
Accumulated net realized gain (Notes 1 and 5) .......................................... 2,882,493
Net unrealized appreciation on investments and other assets and liabilities denominated
in foreign currencies ................................................................. 11,338,817
-----------
Net assets, at market value ............................................................. $51,179,571
===========
EAGLE CLASS SHARES
------------------
Net asset value, redemption and offering price per share ($31,668,305 divided by
1,047,842 shares of beneficial interest outstanding, no par value) (Notes 1 and 2) ..... $ 30.22
===========
CLASS A SHARES
--------------
Net asset value and redemption price per share ($9,196,660 divided by 297,670 shares
of beneficial interest outstanding, no par value) (Notes 1 and 2) ...................... $ 30.90
===========
Maximum offering price per share (100/95.25 of $30.90)................................... $ 32.44
===========
CLASS B SHARES
--------------
Net asset value and redemption price per share ($709,527 divided by 23,671 shares
of beneficial interest outstanding, no par value) (Notes 1 and 2) ...................... $ 29.97
===========
CLASS C SHARES
--------------
Net asset value and offering price per share ($9,605,079 divided by 320,495 shares
of beneficial interest outstanding, no par value) (Notes 1 and 2) ...................... $ 29.97
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
8 S E M I A N N U A L R E P O R T
<PAGE>
EAGLE INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE SIX-MONTH PERIOD ENDED APRIL 30, 2000
(UNAUDITED)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
-----------------
Income:
Dividends (net of $39,514 foreign withholding taxes)............................. $ 287,997
Interest ........................................................................ 43,457
----------
Total income ................................................................. 331,454
Expenses (Notes 1 and 4):
Management fee .................................................................. $262,609
Distribution fee (Eagle Shares) ................................................. 170,376
Distribution fee (Class A Shares) ............................................... 11,239
Distribution fee (Class B Shares) ............................................... 3,021
Distribution fee (Class C Shares) ............................................... 44,258
Shareholder servicing fees (Eagle Shares) ....................................... 1,704
Shareholder servicing fees (Class A Shares) ..................................... 5,844
Shareholder servicing fees (Class B Shares) ..................................... 393
Shareholder servicing fees (Class C Shares) ..................................... 5,754
Custodian/Fund accounting fees .................................................. 81,668
Professional fees ............................................................... 25,937
Amortization of state qualification expenses .................................... 20,888
Reports to shareholders ......................................................... 14,433
Organization expenses ........................................................... 5,200
Trustees' fees and expenses ..................................................... 4,799
Other ........................................................................... 2,014
--------
Total expenses ............................................................... 660,137
----------
Net investment loss .............................................................. 328,683
----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
--------------------------------------------------
Net realized gain from investment transactions ................................... 3,308,800
Net realized loss from foreign currency transactions ............................. (235,371)
Net unrealized appreciation of investments during the period ..................... 2,322,075
Net unrealized appreciation from foreign currency liabilities during the period .. 172,755
----------
Net gain on investments ...................................................... 5,568,259
----------
Net increase in net assets resulting from operations ............................. $5,239,576
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
9 S E M I A N N U A L R E P O R T
<PAGE>
EAGLE INTERNATIONAL EQUITY PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE SIX-MONTH
PERIOD ENDED FOR THE
APRIL 30, 2000 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999
------------------ -----------------
<S> <C> <C>
Increase in net assets:
Operations:
Net investment loss ............................................................. $ (328,683) $ (420,664)
Net realized gain from investment transactions .................................. 3,308,800 6,904,858
Net realized gain (loss) from foreign currency transactions ..................... (235,371) 216,150
Net unrealized appreciation from foreign currrency during the period ............ 2,322,075 3,686,213
Net unrealized appreciation (depreciation) of investments during the period ..... 172,755 (177,933)
------------ ------------
Net increase in net assets resulting from operations ............................ 5,239,576 10,208,624
Distributions to shareholders from:
Net realized gains Eagle Shares, ($4.44 and $0.12 per share, respectively)....... (4,405,006) (151,973)
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)
Increase (decrease) in net assets from Fund share transactions (Note 2) .......... 4,743,983 (7,860,802)
------------ ------------
Increase in net assets ........................................................... 3,305,305 2,135,689
Net assets, beginning of period .................................................. 47,874,266 45,738,577
------------ ------------
Net assets, end of period (including accumulated net investment loss
of $250,205 and undistributed net investment income of $78,478) ................. $ 51,179,571 $ 47,874,266
============ ============
</TABLE>
10 S E M I A N N U A L R E P O R T
<PAGE>
HERITAGE SERIES TRUST -- EAGLE INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
The following table includes selected data for share outstanding throughout
each period and other performance information derived from the financial
statement.
<TABLE>
<CAPTION>
EAGLE SHARES*
------------------------------------------
FOR THE
SIX-MONTH
PERIOD
ENDED FOR THE YEARS ENDED
APRIL 30, OCTOBER 31,
2000 -----------------------
(UNAUDITED) 1999 1998
------------------ ----------- -----------
<S> <C> <C> <C>
Net asset value, beginning of period ......................... $ 31.04 $ 25.17 $ 23.83
---------- -------- --------
Income from Investment Operations:
Net investment loss (a) ..................................... (0.21) (0.27) (0.17)
Net realized and unrealized gain on investments ............. 3.83 6.26 2.13
---------- -------- --------
Total from Investment Operations ............................ 3.62 5.99 1.96
---------- -------- --------
Less Distributions:
Dividends from net investment income ........................ -- -- --
Distributions from net realized gains ....................... (4.44) (0.12) (0.62)
---------- -------- --------
Total Distributions ......................................... (4.44) (0.12) (0.62)
---------- -------- --------
Net asset value, end of period ............................... $ 30.22 $ 31.04 $ 25.17
========== ======== ========
Total Return (%) (b) ......................................... 23.85 (c) 23.85 8.38
Ratios (%)/ Supplemental Data:
Operating expenses, net, to average daily net assets ........ 2.60 (e) 2.60 2.60
Net investment loss to average daily net assets ............. (1.35) (e) (.95) (.67)
Portfolio turnover rate ..................................... 71 (c) 78 71
Net assets, end of period ($ millions)....................... 32 32 33
<CAPTION>
EAGLE SHARES*
---------------------------------------------
FOR THE YEARS ENDED
OCTOBER 31,
---------------------------------------------
1997 1996 1995/dagger/
-------------- ----------- ------------------
<S> <C> <C> <C>
Net asset value, beginning of period ......................... $ 22.14 $ 20.79 $ 20.00
--------- -------- ----------
Income from Investment Operations:
Net investment loss (a) ..................................... (0.11) (0.01) (0.03)
Net realized and unrealized gain on investments ............. 2.28 1.84 0.82
--------- -------- ----------
Total from Investment Operations ............................ 2.17 1.83 0.79
--------- -------- ----------
Less Distributions:
Dividends from net investment income ........................ (0.31) (0.01) --
Distributions from net realized gains ....................... (0.17) (0.47) --
--------- -------- ----------
Total Distributions ......................................... (0.48) (0.48) --
--------- -------- ----------
Net asset value, end of period ............................... $ 23.83 $ 22.14 $ 20.79
========= ======== ==========
Total Return (%) (b) ......................................... 9.98 (d) 8.93 3.95 (c)
Ratios (%)/ Supplemental Data:
Operating expenses, net, to average daily net assets ........ 2.60 2.60 2.60 (e)
Net investment loss to average daily net assets ............. (.47) (.02) (.33) (e)
Portfolio turnover rate ..................................... 50 59 61
Net assets, end of period ($ millions)....................... 32 22 10
</TABLE>
--------
* Per share amounts have been calculated using the monthly average share
method.
/dagger/ For the period May 1, 1995 (commencement of operations) to October 31,
1995.
(a) Excludes management fees waived by Manager in the amount of $0.01, $0.03,
$0.06, $0.16 and $0.17 per Eagle Shares for the five years ended October
31, 1995, respectively. The operating expense ratios including such items
would have been 2.65%, 2.71%, 2.86%, 3.31% and 5.09% (annualized) for
Eagle Shares, respectively.
(b) Does not reflect the imposition of a sales charge.
(c) Not annualized.
(d) These returns are calculated based on the published net asset value at
October 31, 1997.
(e) Annualized.
The accompanying notes are an integral part of the financial statements.
11 S E M I A N N U A L R E P O R T
<PAGE>
HERITAGE SERIES TRUST - EAGLE INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
(CONTINUED)
The following table includes selected data for a share outstanding
throughout each period and other performance information derived from the
financial statement.
<TABLE>
<CAPTION>
CLASS A SHARES*
-----------------------------------------------------------------------------
FOR THE
SIX-MONTH
PERIOD
ENDED FOR THE YEARS ENDED
APRIL 30, OCTOBER 31,
2000 ----------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996/dagger/
---------- -------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .............. $ 31.56 $ 25.43 $ 23.97 $ 22.25 $ 21.11
---------- -------- ---------- --------- ----------
Income from Investment Operations:
Net investment income (loss)(a) .................. (0.11) (0.09) (0.01) 0.05 0.10
Net realized and unrealized gain on investments .. 3.89 6.34 2.14 2.28 1.04
---------- -------- ---------- --------- ----------
Total from Investment Operations ................. 3.78 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 period .................... $ 30.90 $ 31.56 $ 25.43 $ 23.97 $ 22.25
========== ======== ========== ========= ==========
Total Return (%) (b) .............................. 24.68 (c) 24.68 9.04 (d) 10.71 (d) 5.40 (c)
Ratios (%)/ Supplemental Data
Operating expenses, net, to average daily net
assets .......................................... 1.97 (e) 1.97 1.97 1.97 1.97 (e)
Net investment income (loss) to average daily net
assets .......................................... (.70) (e) (.32) (.02) .22 .44 (e)
Portfolio turnover rate .......................... 34 (c) 78 71 50 59
Net assets, end of period ($ millions)............ 9 8 7 6 3
<CAPTION>
CLASS B SHARES*
------------------------------------------
FOR THE
SIX-MONTH
PERIOD
ENDED FOR THE YEARS ENDED
APRIL 30, OCTOBER 31,
2000 -------------------------
(UNAUDITED) 1999 1998/dagger//dagger/
----------- -------- -----------
<S> <C> <C> <C>
Net asset value, beginning of period .............. $ 30.83 $ 25.03 $ 23.95
----------- -------- -----------
Income from Investment Operations:
Net investment income (loss)(a) .................. (0.22) (0.30) (0.16)
Net realized and unrealized gain on investments .. 3.80 6.22 1.24
----------- -------- -----------
Total from Investment Operations ................. 3.58 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 period .................... $ 29.97 $ 30.83 $ 25.03
=========== ======== ===========
Total Return (%) (b) .............................. 23.70 (c) 23.70 4.51 (c)
Ratios (%)/ Supplemental Data
Operating expenses, net, to average daily net
assets .......................................... 0.18 (e) 2.72 2.72 (e)
Net investment income (loss) to average daily net
assets .......................................... (.09) (e) (1.04) (.71) (e)
Portfolio turnover rate .......................... 34 (c) 78 71
Net assets, end of period ($ millions)............ 1 .5 .2
</TABLE>
--------
* Per share amounts have been calculated using the monthly average share
method.
/dagger/ For the period December 27, 1995 (commencement of Class A and Class C
Shares) to October 31, 1996.
/dagger//dagger/ For the period January 2, 1998 (commencement of Class B
Shares) to October 31, 1998.
(a) Excludes management fees waived by Eagle in the amount of $0.01, $0.03,
$0.06 and $0.16 per Class A Shares for the four years ended October 31,
1996, respectively. The operating expense ratios including such items
would have been 2.02%, 2.08%, 2.23% and 2.69% (annualized) for Class A
Shares, respectively. Excludes management fees waived by the Manager in
the amount of $0.01 and $0.03 per Class B Shares for the two years ended
October 31, 1998, respectively. The operating expense ratio including such
items would have been 2.77% and 2.83% (annualized) for Class B Shares,
respectively.
(b) Does not reflect the imposition of a sales charge.
(c) Not annualized.
(d) These returns are calculated based on the published net asset value at
October 31, 1997.
(e) Annualized.
The accompanying notes are an integral part of the financial statements.
12 S E M I A N N U A L R E P O R T
<PAGE>
HERITAGE SERIES TRUST - EAGLE INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
(CONTINUED)
The following table includes selected data for a share outstanding
throughout each period and other performance information derived from the
financial statement.
<TABLE>
<CAPTION>
CLASS C SHARES*
-------------------------------------------------------------------
FOR THE
SIX-MONTH
PERIOD
ENDED FOR THE YEARS ENDED
APRIL 30, OCTOBER 31,
2000 --------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996/dagger/
---------- -------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................. $ 30.83 $ 25.03 $ 23.73 $ 22.12 $ 21.11
---------- -------- --------- --------- ---------
Income from Investment Operations:
Net investment loss (a) .............................. (0.23) (0.30) (0.20) (0.13) (0.07)
Net realized and unrealized gain on investments ...... 3.81 6.22 2.12 2.25 1.08
---------- -------- --------- --------- ---------
Total from Investment Operations ..................... 3.58 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 period ........................ $ 29.97 $ 30.83 $ 25.03 $ 23.73 $ 22.12
========== ======== ========= ========= =========
Total Return (%) (b) .................................. 23.70 (c) 23.70 8.24 (d) 9.79 (d) 4.78 (c)
Ratios (%)/ Supplemental Data
Operating expenses, net, to average daily net assets . 2.72 (e) 2.72 2.72 2.72 2.72 (e)
Net investment loss to average daily net assets ...... (1.44)(e) (1.06) (1.06) (.79) (.32)(e)
Portfolio turnover rate .............................. 34 (c) 78 78 71 59
Net assets, end of period ($ millions)................ 10 7 6 4 1
</TABLE>
--------
* Per share amounts have been calculated using the monthly average share
method.
/dagger/ For the period December 27, 1995 (commencement of Class A and Class C
Shares) to October 31, 1996.
(a) Excludes management fees waived by Eagle in the amount of less than $0.01,
$0.03, $0.06 and $0.16 per Class C Shares for the four years ended October
31, 1996, respectively. The operating expense ratio including such items
would have been 2.77%, 2.83%, 2.98% and 3.44% (annualized) for Class C
Shares, respectively.
(b) Does not reflect the imposition of a sales charge.
(c) Not annualized.
(d) These returns are calculated based on the published net asset value at
October 31, 1997.
(e) Annualized.
The accompanying notes are an integral part of the financial statements.
13 S E M I A N N U A L R E P O R T
<PAGE>
EAGLE INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
Note 1: SIGNIFICANT ACCOUNTING POLICIES. Heritage Series Trust (the "Trust") is
organized as a Massachusetts business trust and is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company consisting of seven separate investment
Portfolios, the Eagle International Equity Portfolio (the "Fund"), the
Aggressive Growth Fund, Small Cap Stock Fund, the Value Equity Fund, the
Growth Equity Fund, the Technology Fund and the Mid Cap Stock Fund. The
Fund primarily seeks capital appreciation principally through
investments in a portfolio of international equity securities.
The Fund currently offers Eagle Class, Class A, Class B and Class C
Shares. The Eagle Class of shares are subject to certain minimum
investment requirements and are sold without any sales charge. Class A
Shares are sold subject to a maximum sales charge of 4.75% of the amount
invested payable at the time of purchase. Class 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 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 less than one year after purchase. The financial statements
for the Aggressive Growth Fund, Small Cap Stock Fund, Growth Equity
Fund, Mid Cap Stock Fund, the Technology Fund and Value Equity Fund are
presented separately. The preparation of financial statements in
accordance with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts and disclosures. Actual results could differ from those
estimates. The following is a summary of significant accounting
policies:
SECURITY VALUATION: The Fund values investment securities at market
value based on the last quoted sales price as reported by the principal
securities exchange on which the security is traded. If no sale is
reported, the last bid price is used and in the absence of a market
quote, securities are valued using such methods as the Board of Trustees
believes would reflect fair market value. Securities that are quoted in
a foreign currency will be valued daily in U.S. dollars at the foreign
currency exchange rates prevailing at the time the Fund calculates its
daily net asset value per share. Although the Fund values its assets in
U.S. dollars on a daily basis, it does not intend to convert holdings of
foreign currencies into U.S. dollars on a daily basis. Short term
investments having a maturity of 60 days or less are valued at amortized
cost, which approximates market.
FOREIGN CURRENCY TRANSACTIONS: The books and records of the Fund are
maintained in U.S. dollars. Foreign currency transactions are translated
into U.S. dollars on the following basis: (i) market value of investment
securities, other assets and other liabilities at the daily rates of
exchange, and (ii) purchases and sales of investment securities,
dividend and interest income and certain expenses at the rates of
exchange prevailing on the respective dates of such transactions. The
Fund does not isolate that portion of gains and losses on investments
which is due to 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 sales of foreign currency and gains
and losses between the ex and payment dates on dividends, interest, and
foreign withholding taxes.
FORWARD FOREIGN CURRENCY CONTRACTS: The Fund may enter into forward
foreign currency contracts which are valued daily at the appropriate
exchange rates. The resultant unrealized exchange gains and losses are
included in the Statement of Operations as unrealized foreign currencies
gain or loss. The Fund records realized gains or losses on delivery of
the currency or at the time the forward contract is extinguished
(compensated) by entering into a closing transaction prior to delivery.
REPURCHASE AGREEMENTS: The Fund enters into repurchase agreements
whereby the Fund, through its custodian, receives delivery of the
underlying securities, the market value of which at the time of purchase
is required to be in an amount of at least 100% of the resale price.
FEDERAL INCOME TAXES: The Fund's policy is to comply with the
requirements of the Internal Revenue Code of 1986, as amended, which are
applicable to regulated investment companies and to distribute
substantially all of its taxable income to its shareholders.
Accordingly, no provision has been made for federal income and excise
taxes.
14 S E M I A N N U A L R E P O R T
<PAGE>
EAGLE INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
(CONTINUED)
DISTRIBUTION OF NET REALIZED GAINS: Net realized gains from investment
transactions during any particular year in excess of available capital
loss carryforwards, which, if not distributed, would be taxable to the
Fund, will be distributed to shareholders in the following fiscal year.
The Fund uses the identified cost method for determining realized gain
or loss on investments for both financial and federal income tax
reporting purposes.
EXPENSES: The Fund is charged for those expenses that are directly
attributable to it, such as management fees, custodian/fund accounting
fees, distribution fees, etc., while other expenses such as insurance
expense, are all allocated proportionately among the Trust. Expenses of
the Fund are allocated to each class of shares based upon their relative
percentage of current net assets. All expenses that are directly
attributable to a specific class of shares, such as distribution and
shareholder servicing fees, are charged directly to that class.
STATE QUALIFICATION EXPENSES: State qualification fees are amortized
based either on the time period covered by the qualification or as
related shares are sold, whichever is appropriate for each state.
ORGANIZATION EXPENSES: Expenses incurred in connection with the
formation of the Fund were deferred and are being amortized on a
straight-line basis over 60 months from the date of commencement of
operations.
CAPITAL ACCOUNTS: The Fund reports the undistributed net investment
income (accumulated net investment loss) and accumulated net realized
gain (loss) accounts on a basis approximating amounts available for
future tax distributions (or to offset future taxable realized gains
when a capital loss carryforward is available). Accordingly, the Fund
may periodically make reclassifications among certain capital accounts
without impacting the net asset value of the Fund.
OTHER: 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.
Note 2: FUND SHARES. At April 30, 2000, there was an unlimited number of shares
of beneficial interest of no par value authorized.
Transactions in the Class A, B and C Shares of the Fund during six-month
period ended April 30, 2000 were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD ENDED EAGLE SHARES A SHARES
APRIL 30, 2000 ----------------------- --------------------
(UNAUDITED) SHARES AMOUNT SHARES AMOUNT
------- ------------ ------- ----------
<S> <C> <C> <C> <C>
Shares sold ........... 114,947 $ 3,604,744 36,495 $1,189,801
Shares issued on
reinvestment of
distributions ........ 137,365 4,373,714 31,859 1,034,768
Shares redeemed ....... (241,951) (7,711,175) (21,343) (699,613)
-------- ------------ ------- ----------
Net increase .......... 10,361 $ 267,283 47,011 $1,524,956
============ ==========
Shares outstanding:
Beginning of
period ............. 1,037,481 250,659
--------- -------
End of period ........ 1,047,842 297,670
========= =======
<CAPTION>
FOR THE PERIOD ENDED B SHARES C SHARES
APRIL 30, 2000 ------------------ --------------------
(UNAUDITED) SHARES AMOUNT SHARES AMOUNT
------ --------- ------ ----------
<S> <C> <C> <C> <C>
Shares sold ........... 7,673 $ 244,110 72,990 $2,334,355
Shares issued on
reinvestment of
distributions ....... 2,120 66,936 34,473 1,089,009
Shares redeemed ....... (1,003) (31,898) (23,727) (750,768)
------ --------- ------- ----------
Net increase .......... 8,790 $ 279,148 83,736 $2,672,596
========= ==========
Shares outstanding:
Beginning of
period ............. 14,881 236,759
------ -------
End of period ........ 23,671 320,495
====== =======
</TABLE>
15 S E M I A N N U A L R E P O R T
<PAGE>
EAGLE INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
(CONTINUED)
Transactions in the Class A, B and C Shares of the Fund during the year
ended October 31, 1999 were as follows:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED EAGLE SHARES A SHARES
OCTOBER 31, 1999 ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
-------- ------------- ------- -------------
<S> <C> <C> <C> <C>
Shares sold ................. 137,206 $ 3,951,774 27,491 $ 780,723
Shares issued on
reinvestment
of distributions .......... 5,474 151,150 1,024 28,582
Shares redeemed ............. (409,377) (11,689,394) (45,994) (1,298,534)
-------- ------------- ------- -------------
Net increase (decrease) ..... (266,697) $ (7,586,470) (17,479) $ (489,229)
============= =============
Shares outstanding:
Beginning of year ........ 1,304,178 268,138
--------- -------
End of year ............... 1,037,481 250,659
========= =======
<CAPTION>
FOR THE YEAR ENDED B SHARES C SHARES
OCTOBER 31, 1999 --------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
------ ----------- ------- -------------
<S> <C> <C> <C> <C>
Shares sold ................. 9,353 $ 254,995 45,492 $ 1,262,451
Shares issued on
reinvestment
of distributions .......... 58 1,581 1,009 27,703
Shares redeemed ............. (3,878) (109,438) (43,865) (1,222,395)
------ ----------- ------- -------------
Net increase (decrease) ..... 5,533 $ 147,138 2,636 $ 67,759
=========== =============
Shares outstanding:
Beginning of year ......... 9,348 234,123
------ -------
End of year ............... 14,881 236,759
====== =======
</TABLE>
Note 3: PURCHASES AND SALES OF SECURITIES. For the six-month period ended April
30, 2000, purchases and sales on investment securities (excluding
repurchase agreements and short term obligations) aggregated $17,623,318
and $20,217,367, respectively.
Note 4: MANAGEMENT, SUBADVISORY, DISTRIBUTION, SHAREHOLDER SERVICING AGENT AND
TRUSTEES' FEES. Under the Fund's Investment Advisory and Administrative
Agreement with Eagle Asset Management, Inc. (the "Manager"), the Fund
agrees to pay to the Manager a fee equal to a rate of 1.00% on the first
$100 million of average daily net assets and 0.80% of any excess over
$100 million of the Fund's average daily net assets, computed daily and
payable monthly. The Manager contractually waived its investment
advisory fee to the extent that Fund operating expenses exceed 2.60%,
1.97%, 2.72% and 2.72% on an annual basis of the Fund's average daily
net assets for Eagle Class Shares, Class A, Class B and Class C Shares,
respectively. Management fees of $24,049 were waived for the Fund 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 ending
October 31, 2001, the Fund may be required to pay the Manager a portion
or all of the waived management fees. In addition, the Fund may be
required to pay the Manager, a portion or all of the management fees
waived of $52,276 in fiscal 1998 if total Fund expenses fall below the
annual expense limitations before the end of the year ending October 31,
2000.
The Manager has entered into an agreement with Martin Currie, Inc., a
New York Corporation, (the "Subadviser") to provide to the Fund
investment advice, portfolio management services including the placement
of brokerage orders, and certain compliance and other services for a fee
payable by the Manager equal to .50% of 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
six-month period ended April 30, 2000 the Subadviser earned $131,305 for
Subadviser fees, which was paid by the Manager.
Heritage Asset Management, Inc. ("Heritage"), an affiliate of the
Manager, is the Dividend Paying and Shareholder Servicing Agent for the
Fund. Heritage also may provide certain administrative services for the
Fund and receives a fee in the amount of .10% from the Manager for
performing these administrative services.
Raymond James & Associates, Inc. (the "Distributor") has advised the
Fund that it received $24,229 in front-end sales charges for Class A
Shares, $13 in contingent deferred sales charges for Class A Shares, and
$415 and $457 in contingent deferred sales charges for Class B and C
Shares for the six-month period ended April 30, 2000, respectively. The
Distributor paid sales commissions to salespersons from these fees and
incurred other distribution costs.
Pursuant to the Class A Distribution Plan adopted in accordance with
Rule 12b-1 of the Investment Company Act of 1940, as amended, the Fund
is authorized to pay the Distributor a fee, equal to .25% of the average
daily net assets for Class A Shares. Under the Eagle
16 S E M I A N N U A L R E P O R T
<PAGE>
EAGLE INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
(CONTINUED)
Class, Class B and Class C Distribution Plans, the Fund 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 Class B Shares was accepted.
The Manager, Heritage and Distributor are all wholly owned subsidiaries
of Raymond James Financial, Inc.
Trustees of the Trust also serve as Trustees for Heritage Cash Trust,
Heritage Capital Appreciation Trust, Heritage Income-Growth Trust and
Heritage Income Trust, investment companies that are advised by Heritage
(collectively referred to as the Heritage funds). Each Trustee of the
Heritage funds that is not an interested person of Heritage 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: For the year ended October 31, 1999, to reflect
reclassifications arising from permanent book/tax differences primarily
attributable to foreign currency gains, a net operating loss and basis
difference in passive foreign investment companies (PFICs), the Fund
credited undistributed net investment income $613,007 and paid in
capital $5,242 and debited accumulated net realized gain $618,249.
Note 6: FINANCIAL INVESTMENT WITH OFF-BALANCE SHEET RISK. The Fund may enter
into forward foreign currency contracts ("forward contracts") to
facilitate settlement of foreign currency denominated portfolio
transactions, to manage its foreign currency exposure or to sell for a
fixed amount of U.S. dollars or other currency, the amount of foreign
currency approximating the value of some or all of its holdings
denominated in such foreign currency or an amount of foreign currency
other than the currency in which the securities to be hedged are
denominated approximating the value of some or all of its holdings to be
hedged. Additionally, when the Subadviser anticipates purchasing
securities at some time in the future, the Fund may enter into a forward
contract to purchase an amount of currency equal to some or all of the
value of the anticipated purchase for a fixed amount of U.S. dollars or
other currency.
The Fund may enter into forward contracts to hedge against changes in
future foreign exchange rates and enhance return. Forward contracts
involve elements of market risk in excess of the amount reflected in the
Statement of Assets and Liabilities. The Fund bears the risk of an
unfavorable change in the foreign exchange rate underlying the forward
contract. Risks may also arise upon entering into these contracts from
the potential inability of these parties to meet the terms of their
contracts.
17 S E M I A N N U A L R E P O R T
<PAGE>
EAGLE INTERNATIONAL EQUITY PORTFOLIO
P.O. Box 10520
St. Petersburg, FL 33733
EAGLE INTERNATIONAL EQUITY
INVESTMENT ADVISER PORTFOLIO
Eagle Asset Management, Inc.
P.O. Box 10520
St. Petersburg, FL 33733
(800) 237-3101
INVESTMENT SUBADVISER
Martin Currie Inc.
Saltire Court
20 Castle Terrace
Edinburgh, Scotland EH1 2ES
DISTRIBUTOR
Raymond James & Associates, Inc.
P.O. Box 12749 Semiannual Report
St. Petersburg, FL 33733 (unaudited)
(727) 573-3800
TRANSFER AGENT/
DIVIDEND DISBURSING AGENT
Heritage Asset Management, Inc.
P.O. Box 33022
St. Petersburg, FL 33733
CUSTODIAN
State Street Bank and Trust Company
P.O. Box 1912
Boston, MA 02105
April 30, 2000
LEGAL COUNSEL
Kirkpatrick & Lockhart LLP
