The Eagle
International
Equity Portfolio [LOGO OMMITTED]
Annual Report
for Eagle
Shareholders
OCTOBER 31,2000
EAGLE
ASSET MANAGEMENT INC.
880 CARILLON PARKWAY
P.O. BOX 10520
ST. PETERSBURG, FL
33733-0520
(727) 573-2453
(800) 237-3101
<PAGE>
November 25, 2000
Dear Fellow Shareholders:
We are pleased to provide you with the annual report for the Eagle
International Equity Portfolio (the "Fund") for the 12-month period ended
October 31, 2000. The average annual total return for the Eagle Shares of your
Fund for the 1-year, 5-year and life of the fund periods ended October 31,
2000, were as follows: -1.9%, +9.5% and +9.4%, respectively. This performance
compares favorably against the Morgan Stanley Capital International Europe,
Australia, Far East Index (the "MSCI EAFE Index") whose average annual total
return for the 1-year, 5-year and life of the fund periods ended October 31,
2000, were as follows: -2.9%, +8.7% and +7.5%, respectively.
The Fund's subadviser, Martin Currie Inc., has an international reputation for
prudent, objective global investing. Founded in the late 1880s and presently
headquartered in Edinburgh, Scotland, Martin Currie, Inc. allocates portfolio
assets by both market category and region. Although the Fund is diversified,
the Trustees of your Fund, along with Martin Currie Inc. have decided that,
going forward, the Fund normally will hold a core portfolio of stocks of fewer
companies than many other diversified funds. As a result, the increase or
decrease of the value of a single stock may have a greater impact on the Fund's
net asset value and total return. We believe that in the international markets,
that this strategy will improve the Fund's performance.
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.
We hope that you will find the following investment commentary from the Fund's
subadviser useful in understanding the key factors affecting the Fund's
performance over the 12-month period ended October 31, 2000 and the near-term
outlook for the global marketplace. On behalf of all of us at Eagle and
Heritage, we appreciate your investment and continued confidence in the Eagle
International Equity Portfolio.
Sincerely, Sincerely,
/s/ RICHARD K. RIESS /s/ STEPHEN G. HILL
--------------------- ----------------------------
Richard K. Riess Stephen G. Hill
President President
Heritage Series Trust Eagle Asset Management, Inc.
Eagle International Equity Portfolio
A N N U A L R E P O R T
<PAGE>
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 Eagle Shares declined by
-1.9%*.
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.
2 A N N U A L R E P O R T
<PAGE>
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.
3 A N N U A L R E P O R T
<PAGE>
GROWTH OF A $10,000 INVESTMENT
SINCE INCEPTION OF HERITAGE SERIES TRUST - EAGLE INTERNATIONAL
EQUITY PORTFOLIO-EAGLE SHARES ON MAY 1, 1995
AVERAGE ANNUAL TOAL RETURNS*
----------------------------
1 YEAR (1.91)% 5 YEARS 9.54%
LIFE OF EAGLE CLASS SHARES: 9.39%
[GRAPHIC OMITTED]
___ HERITAGE SERIES TRUST - EAGLE INTERNATIONAL EQUITY PORTFOLIO $16,396
--- MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX $14,905
* Average annual returns for the Heritage Series Trust -- Eagle International
Portfolio Eagle Shares are calculated in conformance with Item 21 of Form
N-1A, which assumes reinvestment of dividends. 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 A N N U A L R E P O R T
<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
----------
MARKET
SHARES VALUE
------ -----
COMMON STOCKS (CONTINUED)
-------------------------
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
-------
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
The accompanying notes are an integral part of the financial statements.
5 A N N U A L R E P O R T
<PAGE>
Heritage Series Trust - Eagle International Equity Portfolio
Investment Portfolio
October 31, 2000
(continued)
MARKET
SHARES VALUE
------ -----
COMMON STOCKS (CONTINUED)
-------------------------
JAPAN (CONTINUED)
-----------------
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
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
-----------
MARKET
SHARES VALUE
------ -----
COMMON STOCKS (CONTINUED)
-------------------------
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
---------
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
The accompanying notes are an integral part of the financial statements.
6 A N N U A L R E P O R T
<PAGE>
Heritage Series Trust - Eagle International Equity Portfolio
Investment Portfolio
October 31, 2000
(continued)
MARKET
SHARES VALUE
------ -----
COMMON STOCKS (CONTINUED)
-------------------------
UK (CONTINUED)
--------------
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
-----------
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.
7 A N N U A L R E P O R T
<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.
8 A N N U A L R E P O R T
<PAGE>
Eagle International Equity Portfolio
Statement of Assets and Liabilities
October 31, 2000
<TABLE>
<S> <C> <C>
ASSETS
------
Investments, at market value (identified cost $38,016,405 ) (Note 1)..................... $42,854,161
Repurchase agreement (cost $705,000) (Note 1)............................................ 705,000
Cash .................................................................................... 379
Foreign currency (cost $262,197)......................................................... 262,197
Receivables:
Investments sold ....................................................................... 373,027
Fund shares sold ....................................................................... 2,682,205
Dividends and interest ................................................................. 39,380
Foreign taxes recoverable .............................................................. 43,673
Deferred state qualification expenses (Note 1) .......................................... 8,953
Prepaid insurance ....................................................................... 2,509
-----------
Total assets ........................................................................ 46,971,484
LIABILITIES
-----------
Payables (Note 4):
Investments purchased .................................................................. $809,277
Fund shares redeemed ................................................................... 59,621
Accrued management fee ................................................................. 42,737
Accrued distribution fee ............................................................... 33,798
Other accrued expenses ................................................................. 78,345
--------
Total liabilities ................................................................... 1,023,778
-----------
Net assets, at market value ............................................................. $45,947,706
===========
NET ASSETS
----------
Net assets consist of:
Paid-in capital (Note 5) ............................................................... $37,684,795
Accumulated undistributed net investment loss .......................................... (65,145)
Accumulated net realized gain (Notes 1 and 5) .......................................... 3,491,244
Net unrealized appreciation on investments and other assets and liabilities denominated
in foreign currencies .................................................................. 4,836,812
-----------
Net assets, at market value ............................................................. $45,947,706
===========
EAGLE SHARES
------------
Net asset value, redemption and offering price per share ($27,391,181 divided by
1,024,936 shares of beneficial interest outstanding, no par value) (Notes 1 and 2) ..... $ 26.72
===========
CLASS A SHARES
--------------
Net asset value and redemption price per share ($9,808,121 divided by 357,871 shares
of beneficial interest outstanding, no par value) (Notes 1 and 2) ...................... $ 27.41
===========
Maximum offering price per share (100/95.25 of $27.41)................................... $ 28.78
===========
CLASS B SHARES
--------------
Net asset value and redemption price per share ($767,249 divided by 28,965 shares
of beneficial interest outstanding, no par value) (Notes 1 and 2) ...................... $ 26.49
===========
CLASS C SHARES
--------------
Net asset value and offering price per share ($7,981,155 divided by 301,361 shares
of beneficial interest outstanding, no par value) (Notes 1 and 2) ...................... $ 26.48
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
9 A N N U A L R E P O R T
<PAGE>
Eagle International Equity Portfolio
Statement of Operations
For the Year Ended October 31, 2000
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
-----------------
Income:
Dividends (net of $85,026 foreign withholding taxes).................................... $ 537,317
Interest ............................................................................... 101,852
------------
Total income ....................................................................... 639,169
Expenses (Notes 1 and 4):
Management fee ......................................................................... $506,058
Distribution fee (Eagle Shares) ........................................................ 320,985
Distribution fee (Class A Shares) ...................................................... 22,342
Distribution fee (Class B Shares) ...................................................... 7,072
Distribution fee (Class C Shares) ...................................................... 88,632
Shareholder servicing fees (Eagle Shares) .............................................. 3,210
Shareholder servicing fees (Class A Shares) ............................................ 11,618
Shareholder servicing fees (Class B Shares) ............................................ 919
Shareholder servicing fees (Class C Shares) ............................................ 11,522
Custodian/Fund accounting fees ......................................................... 162,134
Amortization of state qualification expenses ........................................... 51,867
Professional fees ...................................................................... 45,442
Reports to shareholders ................................................................ 19,124
Trustees' fees and expenses ............................................................ 8,900
Organization expenses .................................................................. 5,200
Federal registration expense ........................................................... 829
Other .................................................................................. 5,078
--------
Total expenses before waiver ....................................................... 1,270,932
------------
Net investment loss ..................................................................... (631,763)
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
--------------------------------------------------
Net realized gain from investment transactions .......................................... 4,449,780
Net realized loss from foreign currency transactions .................................... (279,483)
Net unrealized depreciation of investments during the year .............................. (4,184,164)
Net unrealized appreciation from other assets and liabilities denominated in foreign
currency
liabilities during the year ............................................................ 176,989
------------
Net gain on investments ............................................................ 163,122
------------
Net decrease in net assets resulting from operations .................................... $ (468,641)
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
10 A N N U A L R E P O R T
<PAGE>
Eagle International Equity Portfolio
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
------------------------------------
OCTOBER 31, 2000 OCTOBER 31, 1999
------------------ -----------------
<S> <C> <C>
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 Eagle Shares, ($4.44 and $0.12 per share, respectively). . ...... (4,404,983) (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) ............. 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.
11 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 statements.
<TABLE>
<CAPTION>
EAGLE SHARES*
---------------------------------------------------------------------
FOR THE YEARS ENDED
OCTOBER 31,
---------------------------------------------------------------------
2000 1999 1998 1997 1996
----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ....................... $ 31.04 $ 25.17 $ 23.83 $ 22.14 $ 20.79
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment loss (a) ................................. ( 0.41) ( 0.27) ( 0.17) ( 0.11) ( 0.01)
Net realized and unrealized gain on investments ......... 0.53 6.26 2.13 2.28 1.84
-------- -------- -------- -------- --------
Total from Investment Operations ........................ 0.12 5.99 1.96 2.17 1.83
-------- -------- -------- -------- --------
Less Distributions:
Dividends from net investment income .................... -- -- -- ( 0.31) ( 0.01)
Distributions from net realized gains ................... ( 4.44) ( 0.12) ( 0.62) ( 0.17) ( 0.47)
-------- -------- -------- -------- --------
Total Distributions ..................................... ( 4.44) ( 0.12) ( 0.62) ( 0.48) ( 0.48)
-------- -------- -------- -------- --------
Net asset value, end of year ............................. $ 26.72 $ 31.04 $ 25.17 $ 23.83 $ 22.14
======== ======== ======== ======== ========
Total Return (%) ......................................... ( 1.91) 23.85 8.38 (b) 9.98 (b) 8.93
Ratios (%)/ Supplemental Data:
Expenses to average daily net assets .................... 2.60 2.60 2.60 2.60 2.60
Net investment loss to average daily net assets ......... ( 1.35) ( .95) ( .67) ( .47) ( .02)
Portfolio turnover rate ................................. 67 78 71 50 59
Net assets, end of year ($ millions)..................... 27 32 33 32 22
</TABLE>
--------
* Per share amounts have been calculated using the monthly average share
method.
(a) Excludes management fees waived by Manager in the amount of $0.01, $0.03,
$0.06, and $0.16 per Eagle Share for the four years ended October 31,
1999, respectively. The operating expense ratios including such items
would have been 2.65%, 2.71%, 2.86%, and 3.31% for Eagle Shares for the
four years ended October 31, 1999, respectively.
(b) These returns are calculated based on the published net asset value at
October 31, 1997.
The accompanying notes are an integral part of the financial statements.
12 A N N U A L R E P O R T
<PAGE>
Eagle International Equity Portfolio
Notes to Financial Statements
Note 1: SIGNIFICANT ACCOUNTING POLICIES. Heritage Series Trust (the "Trust") is
organized as a Massachusetts business trust and is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company consisting of seven separate investment
portfolios, the Eagle International Equity Portfolio (the "Fund"), the
Aggressive Growth Fund, the Small Cap Stock Fund, the Growth Equity
Fund, the Mid Cap Stock Fund, the Technology Fund and the Value Equity
Fund. The Fund primarily seeks capital appreciation through investments
in a portfolio of international equity securities.
The Fund currently offers Eagle 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 Aggressive Growth Fund, Small Cap Stock Fund, Growth Equity Fund,
Mid Cap Stock Fund, Technology Fund and Value Equity Fund are presented
separately. The preparation of financial statements in accordance with
generally accepted accounting principles 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: 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 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 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 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: 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. Repurchase agreements involve the risk that the seller will fail
to repurchase the security, 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: 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.
13 A N N U A L R E P O R T
<PAGE>
Eagle International Equity Portfolio
Notes to Financial Statements
(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 portfolios of 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 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.
ORGANIZATION EXPENSES: Expenses incurred in connection with the
formation of the Fund were deferred and have been amortized as of April
30, 2000.
CAPITAL ACCOUNTS: The Fund reports the undistributed net investment
income and accumulated net realized gain (loss) accounts on a basis
approximating amounts available for future tax distributions (or to
offset future taxable realized gains when a capital loss carryforward
is available). Accordingly, the Fund may periodically make
reclassifications among certain capital accounts without impacting the
net asset value of the Fund.
OTHER: 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 October 31, 2000, there was an unlimited number of
shares of beneficial interest of no par value authorized.
Transactions in Eagle Shares and Class A, B and C Shares of the Fund
during the year ended October 31, 2000 were as follows:
<TABLE>
<CAPTION>
EAGLE SHARES A SHARES
------------------------------ -----------------------------
SHARES AMOUNT SHARES AMOUNT
------------- ---------------- ------------- ---------------
<S> <C> <C> <C> <C>
Shares sold . ................... 328,037 $ 9,734,259 206,405 $ 5,863,989
Shares issued on reinvestment
of distributions ............... 137,365 4,373,714 31,859 1,034,768
Shares redeemed ................. (477,947) (14,551,965) (131,052) (3,772,192)
-------- -------------- -------- -------------
Net increase (decrease) ......... (12,545) $ (443,992) 107,212 $ 3,126,565
============== =============
Shares outstanding:
Beginning of year .............. 1,037,481 250,659
--------- --------
End of year .................... 1,024,936 357,871
========= ========
<CAPTION>
B SHARES C SHARES
-------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------- ------------ ---------------
<S> <C> <C> <C> <C>
Shares sold . ................... 23,729 $ 694,286 110,927 $ 3,436,460
Shares issued on reinvestment
of distributions ............... 2,120 66,936 34,473 1,089,009
Shares redeemed ................. (11,765) (356,139) (80,798) (2,392,813)
------- ----------- ------- -------------
Net increase (decrease) ......... 14,084 $ 405,083 64,602 $ 2,132,656
=========== =============
Shares outstanding:
Beginning of year .............. 14,881 236,759
------- -------
End of year .................... 28,965 301,361
======= =======
</TABLE>
14 A N N U A L R E P O R T
<PAGE>
Eagle International Equity Portfolio
Notes to Financial Statements
(continued)
Transactions in Eagle Shares and Class A, B and C Shares of the Fund during
the year ended October 31, 1999, were as follows:
<TABLE>
<CAPTION>
EAGLE SHARES A SHARES
------------------------------ ----------------------------
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>
B SHARES C SHARES
------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNTS
----------- ------------- ------------ ---------------
<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 year ended October 31, 2000,
purchases and sales on investment securities (excluding repurchase
agreements and short term obligations) aggregated $33,704,636 and
$32,928,806, 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 agreed to waive 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, for the fiscal year ended October 31,
2000. 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 the Manager 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.
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 an
annualized 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 year ended October 31, 2000, the Subadviser earned
$253,029 for Subadviser fees, which were 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 provides 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 $29,043 in front-end sales charges for Class A
Shares, and $1,416 and $1,471 in contingent deferred sales charges for
Class B and C Shares for the year ended October 31, 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 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
Eagle
15 A N N U A L R E P O R T
<PAGE>
Eagle International Equity Portfolio
Notes to Financial Statements
(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, 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.
16 A N N U A L R E P O R T
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Trustees and Eagle Class Shareholders of
Heritage Series Trust - Eagle International Equity Portfolio
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Heritage Series Trust - Eagle
International Equity Portfolio (the "Fund") at October 31, 2000, and the
results of its operations, the changes in its 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 Fund'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.
PRICEWATERHOUSECOOPERS LLP
-------------------------
PricewaterhouseCoopers LLP
Tampa, Florida
December 8, 2000
17 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
PORTFOLIO
Investment Adviser
Eagle Asset Management, Inc.
P.O. Box 10520
St. Petersburg, FL 33733
(800) 237-3101
Investment Adviser
Martin Currie Inc.
Saltire Court
20 Castle Terrace
Edinburgh, Scotland EH1 2ES
Distributor
Raymond James & Associates, Inc. Annual Report
P.O. Box 12749
St. Petersburg, FL 33733
(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
Legal Counsel
Kirkpatrick & Lockhart LLP October 31, 2000
