UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-4337
HERITAGE CASH TRUST
(Exact name of registrant as specified in charter)
880 Carillon Parkway St. Petersburg, FL | 33716 | |
(Address of principal executive office) | (Zip code) |
Registrant’s telephone number, including area code: (727) 573-3800
RICHARD K. RIESS, PRESIDENT
880 Carillon Parkway
St. Petersburg, FL 33716
(Name and address of agent for service)
Copy to:
CLIFFORD J. ALEXANDER, ESQ.
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, NW
Washington, D.C. 20036
Date of fiscal year end: August 31
Date of reporting period: February 29, 2004
Item 1. | Reports to Shareholders |
March 31, 2004
Dear Fellow Shareholders:
I am pleased to provide you with the semiannual report for the Heritage Cash Trust—Money Market Fund (the “Fund”) for the six-month period ended February 29, 2004. Money market yields have exhibited very little volatility as the Federal Reserve has left the federal funds rate (the rate banks charge one each other for overnight loans) at a 46-year low of 1.0%. At the end of the period, the seven day current yield of the Fund was 0.38%(a), nearly unchanged since the beginning of this reporting period. This performance data represents past performance and past performance does not guarantee future results. Current performance may be higher or lower than the performance data quoted. To obtain more current performance please visit our website at www.HeritageFunds.com.
As of February 29, 2004, 49.0%, of the Fund’s net assets were invested in short-term obligations issued by U.S. Government-Sponsored Enterprises, including Fannie Mae, Freddie Mac, Federal Home Loan Bank, Federal Farm Credit Bank, and Student Loan Marketing Association(b). Approximately 40.6% of the Fund’s net assets were invested in short-term obligations of banks and corporate issues rated A-1+, the highest short-term rating classification by Standard & Poor’s Rating Group (“S&P”) and 10.4% was invested in short-term obligations rated A-1, the next highest rating category. This, along with other factors, satisfies the standards necessary to retain the Fund’s AAAm rating from S&P(c). Ratings are subject to change and do not remove market risk from your investment.
On behalf of Heritage, I thank you for your continuing investment in the Heritage Cash Trust-Money Market Fund. As always, should you have any questions, please contact your financial advisor or Heritage at (800) 421-4184.
Sincerely,
Richard K. Riess
President
(a) An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. For more complete information, including investment objective, fees, risks and expenses, contact your financial advisor or call Heritage Family of Funds at (800) 421-4184 for a prospectus.
(b) Government-Sponsored Enterprises are generally private entities sponsored by Acts of Congress but they are not guaranteed by the full faith and credit of the U.S. Government.
(c) Standard & Poor’s, a widely recognized independent authority on credit quality, rates certain money market funds based on weekly analysis. When rating a money market fund, Standard & Poor’s assesses the safety of principal. According to Standard & Poor’s, a fund rated AAAm (‘‘m’’ denotes money market fund) offers excellent safety features and has superior capacity to maintain principal value and limit exposure to loss. In evaluating safety, Standard & Poor’s focuses on credit quality, liquidity, and management.
Heritage Cash Trust—Money Market Fund
Statement of Net Assets
February 29, 2004
(unaudited)
Principal Amount | Value | ||||
Commercial Paper—50.2% (a) | |||||
Domestic—27.3% | |||||
Banks—3.9% | |||||
$ 50,000,000 | Bank of America Corporation, 1.02%, 03/22/04 | $ | 49,970,250 | ||
50,000,000 | Bank of America Corporation, 1.03%, 04/19/04 | 49,929,903 | |||
50,000,000 | J.P. Morgan Chase & Company, Inc., 1.03%, 04/12/04 | 49,939,917 | |||
50,000,000 | J.P. Morgan Chase & Company, Inc., 1.02%, 04/13/04 | 49,939,083 | |||
199,779,153 | |||||
Beverages—2.0% | |||||
40,000,000 | Anheuser-Busch Companies, Inc., 1.02%, 03/01/04 | 40,000,000 | |||
40,000,000 | The Coca-Cola Company, 1.00%, 03/24/04 | 39,974,444 | |||
25,000,000 | The Coca-Cola Company, 1.00%, 03/26/04 | 24,982,639 | |||
104,957,083 | |||||
Chemicals—1.8% | |||||
44,944,000 | E.I. du Pont de Nemours & Company, 1.00%, 03/05/04 | 44,939,006 | |||
21,690,000 | E.I. du Pont de Nemours & Company, 1.01%, 04/02/04 | 21,670,527 | |||
25,000,000 | E.I. du Pont de Nemours & Company, 1.00%, 04/19/02 | 24,965,973 | |||
91,575,506 | |||||
Cosmetics/Personal Care—1.3% | |||||
37,250,000 | Kimberly-Clark Corporation, 1.00%, 03/30/04 | 37,219,993 | |||
32,700,000 | The Procter & Gamble Company, 0.99%, 03/18/04 | 32,684,713 | |||
69,904,706 | |||||
Principal Amount | Value | |||
Commercial Paper (continued) | ||||
Diversified Manufacturer—2.9% | ||||
45,600,000 | General Electric Capital Corporation, 1.03%, 04/12/04 | 45,545,204 | ||
50,000,000 | General Electric Capital Corporation, 1.09%, 04/12/04 | 49,936,417 | ||
54,400,000 | General Electric Company, 1.03%, 03/23/04 | 54,365,758 | ||
149,847,379 | ||||
Financial Institutions—3.5% | ||||
50,000,000 | Citigroup Global Markets, 1.02%, 03/01/04 | 50,000,000 | ||
50,000,000 | Citigroup Global Markets, 1.03%, 04/02/04 | 49,954,222 | ||
12,500,000 | Private Export Funding Corporation, 1.07%, 03/30/04 | 12,489,226 | ||
35,000,000 | Private Export Funding Corporation, 1.08%, 04/08/04 | 34,960,100 | ||
16,000,000 | Private Export Funding Corporation, 1.08%, 04/13/04 | 15,979,360 | ||
19,000,000 | Private Export Funding Corporation, 1.07%, 06/29/04 | 18,932,550 | ||
182,315,458 | ||||
Household Products—1.5% | ||||
48,000,000 | The Clorox Company, | 48,000,000 | ||
28,000,000 | The Clorox Company, | 27,973,050 | ||
75,973,050 | ||||
Oil & Gas—5.4% | ||||
100,000,000 | ChevronTexaco Corporation, | 99,972,778 | ||
50,000,000 | ChevronTexaco Corporation, | 49,976,625 | ||
42,202,000 | Shell Finance, 1.00%, 03/08/04 | 42,193,794 | ||
16,300,000 | Shell Finance, 1.02%, 03/09/04 | 16,296,305 | ||
29,094,000 | Shell Finance, 1.01%, 04/02/04 | 29,067,880 | ||
44,800,000 | Shell Finance, 1.07%, 05/12/04 | 44,704,128 | ||
282,211,510 | ||||
The accompanying notes are an integral part of the financial statements.
2
Heritage Cash Trust—Money Market Fund
Statement of Net Assets
February 29, 2004
(unaudited)
(continued)
Principal Amount | Value | ||||
Commercial Paper (continued) | |||||
Pharmaceuticals—5.0% | |||||
$ 40,000,000 | Bristol-Myers Squibb Company, 0.99%, 03/03/04 | $ | 39,997,800 | ||
22,950,000 | Bristol-Myers Squibb Company, 1.00%, 03/08/04 | 22,945,538 | |||
27,000,000 | Bristol-Myers Squibb Company, 1.01%, 03/08/04 | 26,994,697 | |||
29,300,000 | Bristol-Myers Squibb Company, 1.00%, 03/16/04 | 29,287,792 | |||
19,277,000 | Pfizer, Inc., 0.98%, 03/03/04 | 19,275,950 | |||
14,323,000 | Pfizer, Inc., 0.99%, 03/11/04 | 14,319,061 | |||
59,200,000 | Pfizer, Inc., 1.00%, 03/15/04 | 59,176,978 | |||
45,000,000 | Pfizer, Inc., 0.99%, 03/19/04 | 44,977,725 | |||
256,975,541 | |||||
Total Domestic (cost $1,413,539,386) | 1,413,539,386 | ||||
Foreign—22.9% (b) | |||||
Banks—9.6% | |||||
50,000,000 | Abbey National North America LLC, 1.00%, 03/02/04 | 49,998,611 | |||
50,000,000 | Barclays U. S. Funding Corporation, 1.00%, 03/04/04 | 49,995,833 | |||
50,000,000 | Barclays U. S. Funding Corporation, 1.02%, 04/02/04 | 49,954,667 | |||
39,300,000 | Danske Corporation, Series “A”, 1.01%, 03/08/04 | 39,292,282 | |||
24,350,000 | Danske Corporation, Series “A”, 1.02%, 03/08/04 | 24,341,690 | |||
36,350,000 | Danske Corporation, Series “B”, 1.02%, 03/08/04 | 36,335,581 | |||
100,000,000 | Deutsche Bank Financial Inc., 1.05%, 04/07/04 | 99,892,083 | |||
47,809,000 | KFW International Finance, 1.00%, 03/01/04 | 47,809,000 | |||
50,000,000 | Rabobank US Financial Corporation, 1.03%, 03/01/04 | 50,000,000 | |||
50,000,000 | Rabobank US Financial Corporation, 1.00%, 03/01/04 | 50,000,000 | |||
497,619,747 | |||||
Principal Amount | Value | |||
Commercial Paper (continued) | ||||
Financial Services—3.5% | ||||
50,000,000 | Siemens Capital Corporation, 1.01%, 04/05/04 | 49,950,903 | ||
25,000,000 | Siemens Capital Corporation, 1.02%, 04/05/04 | 24,975,208 | ||
25,000,000 | Siemens Capital Corporation, 1.02%, 05/21/04 | 24,942,625 | ||
23,412,000 | Toyota Motor Credit Corporation, 1.00%, 03/01/04 | 23,412,000 | ||
45,000,000 | Toyota Motor Credit Corporation, 1.00%, 03/02/04 | 44,998,750 | ||
11,773,000 | Toyota Motor Credit Corporation, 0.99%, 03/03/04 | 11,772,352 | ||
180,051,838 | ||||
Food—4.1% | ||||
34,200,000 | Nestle Capital Corporation, 0.99%, 03/10/04 | 34,191,535 | ||
55,600,000 | Nestle Capital Corporation, 0.99%, 03/25/04 | 55,563,304 | ||
23,000,000 | Nestle Capital Corporation, 1.00%, 03/25/04 | 22,984,667 | ||
19,630,000 | Nestle Capital Corporation, 1.02%, 04/05/04 | 19,610,534 | ||
17,570,000 | Nestle Capital Corporation, 1.00%, 04/28/04 | 17,541,693 | ||
25,600,000 | Unilever Capital Corporation, 1.00%, 03/03/04 | 25,598,578 | ||
15,000,000 | Unilever Capital Corporation, 1.00%, 03/19/04 | 14,992,500 | ||
20,000,000 | Unilever Capital Corporation, 1.00%, 03/22/04 | 19,988,333 | ||
210,471,144 | ||||
Oil & Gas—1.9% | ||||
25,000,000 | BP America, 1.05%, 03/09/04 | 24,994,167 | ||
75,000,000 | BP America, 1.03%, 03/17/04 | 74,965,666 | ||
99,959,833 | ||||
The accompanying notes are an integral part of the financial statements.
3
Heritage Cash Trust—Money Market Fund
Statement of Net Assets
February 29, 2004
(unaudited)
(continued)
Principal Amount | Value | ||||
Commercial Paper (continued) | |||||
Pharmaceuticals—2.5% | |||||
$100,000,000 | GlaxoSmithKline PLC, 1.01%, 04/14/04 | $ | 99,876,556 | ||
30,000,000 | Novartis AG, 1.00%, 03/02/04 | 29,999,166 | |||
129,875,722 | |||||
Regional Agencies—1.3% | |||||
39,525,000 | The Canadian Wheat Board, 1.03%, 03/10/04 | 39,514,822 | |||
10,000,000 | Export Development Canada, 1.00%, 03/23/04 | 9,993,889 | |||
19,000,000 | Province of British Columbia, 1.05%, 03/16/04 | 18,991,687 | |||
68,500,398 | |||||
Total Foreign (cost $1,186,478,682) | 1,186,478,682 | ||||
Total Commercial Paper (cost $2,600,018,068) | 2,600,018,068 | ||||
U.S. Government-Sponsored Enterprises—49.0% (a) | |||||
36,865,000 | Fannie Mae, 0.99%, 03/03/04 | 36,862,983 | |||
100,000,000 | Fannie Mae, 1.06%, 03/03/04 | 99,994,111 | |||
50,000,000 | Fannie Mae, 1.09%, 03/10/04 | 49,986,437 | |||
50,000,000 | Fannie Mae, 1.05%, 03/24/04 | 49,966,458 | |||
60,000,000 | Fannie Mae, 1.09%, 04/02/04 | 59,941,867 | |||
25,925,000 | Fannie Mae, 1.00%, 04/07/04 | 25,898,355 | |||
100,000,000 | Fannie Mae, 1.03%, 04/07/04 | 99,894,653 | |||
185,000,000 | Fannie Mae, 1.00%, 04/14/04 | 184,773,889 | |||
40,000,000 | Fannie Mae, 1.02%, 04/21/04 | 39,942,483 | |||
50,000,000 | Fannie Mae, 1.15%, 07/01/04 | 49,805,986 | |||
50,000,000 | Fannie Mae, 1.05%, 08/11/04 | 49,762,292 | |||
50,000,000 | Fannie Mae, 1.05%, 08/18/04 | 49,753,264 | |||
75,000,000 | Fannie Mae, 1.50%, 12/21/04 | 75,000,000 | |||
38,200,000 | Fannie Mae, 1.51%, 01/18/05 | 38,200,000 | |||
19,500,000 | Federal Farm Credit Banks, 1.20%, 07/15/04 | 19,411,600 | |||
50,000,000 | Federal Farm Credit Banks, 1.19%, 07/15/04 | 49,775,222 | |||
25,000,000 | Federal Farm Credit Banks, 1.16%, 08/31/04 | 24,852,583 | |||
74,000,000 | Federal Farm Credit Banks, 1.21%, 10/15/04 | 73,432,914 |
Principal Amount | Value | |||
U.S. Government-Sponsored Enterprises (continued) | ||||
26,000,000 | Federal Farm Credit Banks, 1.33%, 11/17/04 | 25,749,295 | ||
60,000,000 | Federal Home Loan Bank, 0.99%, 03/03/04 | 59,996,700 | ||
55,000,000 | Federal Home Loan Bank, 1.08%, 03/05/04 | 54,993,431 | ||
25,000,000 | Federal Home Loan Bank, 0.98%, 03/10/04 | 24,993,875 | ||
44,290,000 | Federal Home Loan Bank, 1.00%, 03/10/04 | 44,278,927 | ||
74,122,000 | Federal Home Loan Bank, 1.08%, 03/10/04 | 74,102,080 | ||
100,000,000 | Federal Home Loan Bank, 1.08%, 03/17/04 | 99,952,222 | ||
100,000,000 | Federal Home Loan Bank, 0.99%, 04/16/04 | 99,873,500 | ||
25,000,000 | Federal Home Loan Bank, 1.05%, 07/07/04 | 24,906,667 | ||
50,000,000 | Federal Home Loan Bank, 1.08%, 01/05/05 (c) | 50,000,000 | ||
100,000,000 | Freddie Mac, 0.99%, 03/02/04 | 99,997,250 | ||
40,688,000 | Freddie Mac, 0.98%, 03/02/04 | 40,686,892 | ||
90,000,000 | Freddie Mac, 0.99%, 03/09/04 | 89,980,200 | ||
28,291,000 | Freddie Mac, 1.00%, 04/06/04 | 28,262,709 | ||
27,600,000 | Freddie Mac, 1.02%, 04/06/04 | 27,571,848 | ||
88,681,000 | Freddie Mac, 1.00%, 04/13/04 | 88,575,075 | ||
58,300,000 | Freddie Mac, 1.01%, 04/13/04 | 58,229,668 | ||
50,000,000 | Freddie Mac, 1.00%, 04/13/04 | 49,940,278 | ||
65,000,000 | Freddie Mac, 1.00%, 05/11/04 | 64,871,806 | ||
75,000,000 | Freddie Mac, 1.00%, 05/18/04 | 74,837,500 | ||
30,000,000 | Freddie Mac, 1.07%, 07/06/04 | 29,887,288 | ||
50,000,000 | Freddie Mac, 1.05%, 08/17/04 | 49,753,542 | ||
100,000,000 | Student Loan Marketing Association, 1.01%, 06/17/04 (c) | 100,000,000 | ||
100,000,000 | Student Loan Marketing Association, 1.01%, 08/19/04 (c) | 100,000,000 | ||
Total U.S. Government-Sponsored Enterprises (cost $2,538,695,850) | 2,538,695,850 | |||
Total Investment Portfolio excluding repurchase agreement (cost $5,138,713,918) | 5,138,713,918 | |||
The accompanying notes are an integral part of the financial statements.
4
Heritage Cash Trust—Money Market Fund
Statement of Net Assets
February 29, 2004
(unaudited)
(continued)
Value | |||||
Repurchase Agreement—0.3% (a) | |||||
Repurchase Agreement with State Street Bank and Trust Company, dated February 27, 2004 @ 0.92% to be repurchased at $14,311,097 on March 1, 2004, collateralized by $9,925,000 United States Treasury Bonds, $14,619,794 including interest) (cost $14,310,000) | $ | 14,310,000 | |||
Total Investment Portfolio (cost $5,153,023,918) (d), 99.5% (a) | 5,153,023,918 | ||||
Other Assets and Liabilities, net, 0.5% (a) | 25,983,502 | ||||
Net Assets, (consisting of paid-in-capital), 100% | $ | 5,179,007,420 | |||
Class A Shares | |||||
Net asset value, offering and redemption price per share, ($5,172,036,164 divided by 5,172,039,573 shares outstanding) | $ | 1.00 | |||
�� | |||||
Class B Shares | |||||
Net asset value, offering and redemption price per share, ($3,562,935 divided by 3,562,762 shares outstanding) | $ | 1.00 | |||
Class C Shares | |||||
Net asset value, offering and redemption price per share, ($3,408,321 divided by 3,408,259 shares outstanding) | $ | 1.00 | |||
(a) | Percentages indicated are based on net assets. |
(b) | U.S. dollar denominated. |
(c) | Floating rate notes reset their interest rate on a periodic basis. |
(d) | The aggregate identified cost for federal income tax purposes is the same. |
The accompanying notes are an integral part of the financial statements.
5
Heritage Cash Trust—Money Market Fund
Statement of Operations
For the Six-Month Period Ended February 29, 2004
(unaudited)
Investment Income: | ||||||
Interest | $ | 28,242,094 | ||||
Expenses: | ||||||
Management Fee | $ | 10,839,429 | ||||
Distribution fee (Class A) | 3,966,317 | |||||
Distribution fee (Class B) | 2,977 | |||||
Distribution fee (Class C) | 3,249 | |||||
Shareholder servicing fees | 2,965,389 | |||||
Custodian fee | 196,162 | |||||
Registration fees and expenses | 142,730 | |||||
Reports to shareholders | 105,500 | |||||
Professional fees | 35,217 | |||||
Fund accounting fee | 25,742 | |||||
Insurance | 9,965 | |||||
Trustees’ fees and expenses | 7,814 | |||||
Other | 1,611 | |||||
Total expenses | 18,302,102 | |||||
Net investment income from operations | $ | 9,939,992 | ||||
Statements of Changes in Net Assets
For the Six-Month Period Ended February 29, 2004 (unaudited) | For the Fiscal Year Ended August 31, 2003 | |||||||
Increase (decrease) in net assets: | ||||||||
Operations: | ||||||||
Net investment income from operations | $ | 9,939,992 | $ | 34,857,637 | ||||
Distributions to shareholders from: | ||||||||
Net investment income Class A shares, ($0.002 and $0.007 per share, respectively) | (9,924,471 | ) | (34,795,589 | ) | ||||
Net investment income Class B shares, ($0.002 and $0.007 per share, respectively) | (7,439 | ) | (38,895 | ) | ||||
Net investment income Class C shares, ($0.002 and $0.007 per share, respectively) | (8,082 | ) | (42,046 | ) | ||||
Net distributions to shareholders | (9,939,992 | ) | (34,876,530 | ) | ||||
Increase (decrease) in net assets from Fund share transactions | (311,475,267 | ) | 372,014,162 | |||||
Increase (decrease) in net assets | (311,475,267 | ) | 371,995,269 | |||||
Net assets, beginning of period | 5,490,482,687 | 5,118,487,418 | ||||||
Net assets, end of period | $ | 5,179,007,420 | $ | 5,490,482,687 | ||||
The accompanying notes are an integral part of the financial statements.
6
Heritage Cash Trust—Money Market Fund
Financial Highlights
The following table includes selected data for a share outstanding throughout each period and other performance information derived from the financial statements.
Class A Shares | ||||||||||||||||||||||||
For the (unaudited) | For the Fiscal Years Ended August 31 | |||||||||||||||||||||||
2003 | 2002 | 2001 | 2000 | 1999 | ||||||||||||||||||||
Net asset value, beginning of period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | ||||||||||||
Income from Investment Operations: |
| |||||||||||||||||||||||
Net investment income (a) | 0.002 | 0.007 | 0.015 | 0.048 | 0.053 | 0.044 | ||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||
Dividends from net investment income and net realized gains (a) | (0.002 | ) | (0.007 | ) | (0.015 | ) | (0.048 | ) | (0.053 | ) | (0.044 | ) | ||||||||||||
Net asset value, end of period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | ||||||||||||
Total Return (%) | 0.19 | (b) | 0.66 | 1.53 | 4.87 | 5.43 | 4.46 | |||||||||||||||||
Ratios (%)/ Supplemental Data: | ||||||||||||||||||||||||
Operating expenses, net, to average daily net assets | 0.69 | (c) | 0.70 | 0.70 | 0.72 | 0.72 | 0.73 | |||||||||||||||||
Net investment income to average daily net assets | 0.38 | (c) | .65 | 1.51 | 4.69 | 5.31 | 4.37 | |||||||||||||||||
Net assets, end of period ($ millions) | 5,172 | 5,479 | 5,106 | 4,757 | 3,890 | 3,106 |
(a) | Includes net realized gains and losses which were less than $.001 per share for each of the periods. |
(b) | Not annualized. |
(c) | Annualized. |
The accompanying notes are an integral part of the financial statements.
7
Heritage Cash Trust—Money Market Fund
Financial Highlights
Class B Shares | Class C Shares | |||||||||||||||||||||||||||||||||||||||||||||||
For the (unaudited) | For the Fiscal Years Ended | For the (unaudited) | For the Fiscal Years Ended August 31 | |||||||||||||||||||||||||||||||||||||||||||||
2003 | 2002 | 2001 | 2000 | 1999 | 2003 | 2002 | 2001 | 2000 | 1999 | |||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | ||||||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income (a) | 0.002 | 0.007 | 0.015 | 0.048 | 0.053 | 0.044 | 0.002 | 0.007 | 0.015 | 0.048 | 0.053 | 0.044 | ||||||||||||||||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income and net realized gains (a) | (0.002 | ) | (0.007 | ) | (0.015 | ) | (0.048 | ) | (0.053 | ) | (0.044 | ) | (0.002 | ) | (0.007 | ) | (0.015 | ) | (0.048 | ) | (0.053 | ) | (0.044 | ) | ||||||||||||||||||||||||
Net asset value, end of period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | ||||||||||||||||||||||||
Total Return (%) | 0.19 | (b) | 0.66 | 1.53 | 4.87 | 5.43 | 4.46 | 0.19 | (b) | 0.66 | 1.53 | 4.87 | 5.43 | 4.46 | ||||||||||||||||||||||||||||||||||
Ratios (%)/ Supplemental Data: | ||||||||||||||||||||||||||||||||||||||||||||||||
Operating expenses, net, to average daily net assets | 0.69 | (c) | 0.70 | 0.70 | 0.72 | 0.72 | 0.73 | 0.69 | (c) | 0.70 | 0.70 | 0.72 | 0.72 | 0.73 | ||||||||||||||||||||||||||||||||||
Net investment income to average daily net assets | 0.37 | (c) | .67 | 1.52 | 4.40 | 5.25 | 4.37 | 0.37 | (c) | .67 | 1.47 | 4.63 | 5.19 | 4.37 | ||||||||||||||||||||||||||||||||||
Net assets, end of period ($ millions) | 4 | 5 | 6 | 4 | 1 | 1 | 3 | 6 | 6 | 2 | 1 | 3 |
(a) | Includes net realized gains and losses which were less than $.001 per share for each of the periods. |
(b) | Not annualized. |
(c) | Annualized. |
The accompanying notes are an integral part of the financial statements.
8
Heritage Cash Trust—Money Market Fund
Notes to Financial Statements
(unaudited)
Note 1: | Significant Accounting Policies. Heritage Cash 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 two separate investment portfolios, the Money Market Fund (the “Fund”) and the Municipal Money Market Fund. The Fund seeks to achieve maximum current income consistent with stability of principal. The Fund currently offers Class A and Class C shares. Effective February 1, 2004, Class B shares are no longer available for direct purchase. Class B shares will continue to be available through exchanges as described in the Fund’s prospectus. Class A, B and C shares have no front end sales charges, but when redeemed, may be subject to a contingent deferred sales charge (CDSC) if they were acquired through an exchange from another Heritage mutual fund. The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates. The following is a summary of significant accounting policies: |
Security Valuation: The Fund uses the amortized cost method of security valuation (as set forth in Rule 2a-7 under the Investment Company Act of 1940, as amended). The amortized cost of an instrument is determined by valuing it at cost at the time of purchase and thereafter accreting/amortizing any purchase discount/premium at a constant rate until maturity.
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 an amount equal to 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 the security 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 may be incurred.
Federal Income Taxes: The Fund is treated as a single corporate taxpayer as provided for in the Tax Reform Act of 1986, as amended. The Fund’s policy is to comply with the requirements of the Internal Revenue Code of 1986, as amended, which are applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Accordingly, no provision has been made for federal income and excise taxes.
Distribution of Income and Gains: Distributions from net investment income and net realized gains available for distribution are declared daily and paid monthly. The Fund uses the identified cost method for determining realized gain or loss on investment transactions for both financial and federal income tax reporting purposes.
Expenses: The Fund is charged for those expenses that are directly attributable to it, while other expenses are allocated proportionately among the Heritage mutual funds based upon methods approved by the Board of Trustees. Expenses that are directly attributable to a specific class of shares, such as
9
Heritage Cash Trust—Money Market Fund
Notes to Financial Statements
(unaudited)
(continued)
distribution fees, are charged directly to that class. Other expenses of the Fund are allocated to each class of shares based upon their relative percentage of net assets.
Other: Investment transactions are recorded on a trade date basis. Interest income is recorded on the accrual basis.
Note 2: | Fund Shares. At February 29, 2004, there was an unlimited number of shares of beneficial interest of no par value authorized. |
Transactions in Class A, B and C shares and dollars of the Fund during the six-month period ended February 29, 2004 at a net asset value of $1.00 per share, were as follows:
Class A | Class B | Class C | |||||||
Shares sold | 9,650,981,328 | 348,724 | 1,272,855 | ||||||
Shares issued on reinvestment of distributions | 10,327,457 | 5,670 | 8,393 | ||||||
Shares redeemed | (9,968,746,371 | ) | (1,450,770 | ) | (4,222,553 | ) | |||
Net decrease | (307,437,586 | ) | (1,096,376 | ) | (2,941,305 | ) | |||
Shares outstanding: | |||||||||
Beginning of period | 5,479,477,159 | 4,659,138 | 6,349,564 | ||||||
End of period | 5,172,039,573 | 3,562,762 | 3,408,259 | ||||||
Transactions in Class A, B and C shares and dollars of the Fund during the fiscal year ended August 31, 2003 at a net asset value of $1.00 per share, were as follows:
Class A | Class B | Class C | |||||||
Shares sold | 16,208,426,824 | 3,915,607 | 27,472,133 | ||||||
Shares issued on reinvestment of distributions | 38,265,187 | 31,618 | 43,576 | ||||||
Shares redeemed | (15,873,414,728 | ) | (5,115,416 | ) | (27,610,639 | ) | |||
Net increase (decrease) | 373,277,283 | (1,168,191 | ) | (94,930 | ) | ||||
Shares outstanding: | |||||||||
Beginning of fiscal year | 5,106,199,876 | 5,827,329 | 6,444,494 | ||||||
End of fiscal year | 5,479,477,159 | 4,659,138 | 6,349,564 | ||||||
Note 3: | Purchases and Maturities of Securities. For the six-month period ended February 29, 2004, purchases and sales/maturities of short-term investment securities, excluding repurchase agreements, aggregated $25,225,156,707 and $25,251,491,000, respectively. Purchases and sales/maturities of U.S. Government-Sponsored Enterprises, aggregated $7,375,896,484 and $7,680,482,000, respectively. |
10
Heritage Cash Trust—Money Market Fund
Notes to Financial Statements
(unaudited)
(continued)
Note 4: | Management, Distribution, Shareholder Servicing Agent, Fund Accounting and Trustees’ Fees. Under the Trust’s Investment Advisory and Administration Agreement with Heritage Asset Management, Inc. (the “Manager” or “Heritage”), the Fund agrees to pay to the Manager the following annual fee as a percentage of the Fund’s average daily net assets, computed daily and payable monthly. |
Fund’s Average | Management Fee Rate | ||
First $500 million | 0.500 | % | |
Next $500 million | 0.475 | % | |
Next $500 million | 0.450 | % | |
Next $500 million | 0.425 | % | |
Next $500 million | 0.400 | % | |
Next $2.5 billion | 0.375 | % | |
Next $5.0 billion | 0.360 | % | |
Greater than $10 billion | 0.350 | % |
The amount payable to the Manager as of February 29, 2004 was $1,692,793. Pursuant to a contractual agreement, the Manager has agreed to waive its fees and, if necessary, reimburse the Fund to the extent that annual operating expenses exceed 0.74% of the average daily net assets for the fiscal year ending August 31, 2004. No fees were waived and no expenses were reimbursed for the period ended February 29, 2004.
The Manager also is the Shareholder Servicing Agent and Fund Accountant for the Fund. The Manager charged $2,965,389 for Shareholder Servicing fees and $25,742 for Fund Accounting services, of which $949,667 and $10,000 were payable as of February 29, 2004, respectively.
Raymond James & Associates, Inc. (the “Distributor” or “RJA”) has advised the Fund that it generated $19,710 and $3,997 in contingent deferred sales charges for Class B and Class C shares, respectively during the period ended February 29, 2004. From these fees, the Distributor paid sales commissions to sales persons and incurred other distribution costs.
Pursuant to plans 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 of up to 0.15% of the average daily net assets. Such fee is accrued daily and payable monthly. The total amount payable to the Distributor as of February 29, 2004 was $614,098. The Manager, Distributor, Fund Accountant and Shareholder Servicing Agent are all wholly-owned subsidiaries of Raymond James Financial, Inc. (“RJF”).
Trustees of the Trust also serve as Trustees for Heritage Capital Appreciation Trust, Heritage Growth and Income Trust, Heritage Income Trust and Heritage Series Trust, investment companies that are also advised by the Manager (collectively referred to as the “Heritage Mutual Funds”). Each Trustee of the
11
Heritage Cash Trust—Money Market Fund
Notes to Financial Statements
(unaudited)
(continued)
Heritage Mutual Funds who is not an employee of the Manager or an employee of an affiliate of the Manager receives an annual fee of $18,000 and an additional fee of $3,000 for each combined quarterly meeting of the Heritage Mutual Funds attended. Trustees’ fees and expenses are paid equally by each portfolio in the Heritage Mutual Funds.
Note 5: | Federal Income Taxes. The timing and character of certain income and capital gain distributions are determined in accordance with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. As a result, net investment income (loss) and net realized gain (loss) from investment transactions for a reporting period may differ significantly from distributions during such period. These book/tax differences may be temporary or permanent in nature. To the extent these differences are permanent, they are charged or credited to paid in capital or accumulated net realized gain (loss), as appropriate, in the period that the differences arise. Results of operations and net assets are not affected by these reclassifications. For the fiscal year ended August 31, 2003, to reflect reclassifications arising from permanent tax differences attributable to a reclass of dividends, the Fund decreased (debited) undistributed net investment income $15,720 and increased (credited) accumulated net realized loss $15,720. In addition, from November 1, 2002 to August 31, 2003 the Fund incurred $3,173 of net realized capital losses (post October losses) which will be deferred and treated as arising on September 1, 2003 in accordance with regulations under the Internal Revenue Code. All dividends paid by the Fund from net investment income are deemed to be ordinary income for Federal income tax purposes. |
12
March 31, 2004
Dear Valued Shareholders:
It is my pleasure to provide you with the semiannual report for the Heritage Cash Trust—Municipal Money Market Fund (the “Fund”) for the six-month period ended February 29, 2004. As previously reported to you, the Federal Reserve policy makers lowered the overnight interest rates by a quarter of a percentage point in June 2003 to 1.0%. In the following eight months, the Federal Reserve has maintained a stable rate environment, with an overnight rate of a 1.0%. As a result, the Fund’s seven-day current yield has remained relatively stable and at the end of the reporting period was 0.37%(a). This performance data represents past performance and past performance does not guarantee future results. Current performance may be higher or lower than the performance data quoted. To obtain more current performance please visit our website at www.HeritageFunds.com.
Please remember that if you are subject to the alternative minimum tax (AMT), a portion of your Fund’s income may be considered a preference item for federal tax purposes. Also, if you are subject to state income tax, the income your Fund earns from securities issued in your state may be exempt from your state income tax.
If you have any questions, please contact your Financial Advisor or Heritage at (800) 421-4184. Once again, thank you for allowing us to serve you.
Sincerely,
Richard K. Riess
President
(a) | An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. For more complete information, including investment objective, fees, risks and expenses, contact your financial advisor or call Heritage Family of Funds at (800) 421-4184 for a prospectus. |
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 29, 2004
(unaudited)
Principal Amount | Value | ||||
Notes, Bonds & Variable Rate Demand Notes—99.9%(a)(b) | |||||
Alabama—2.9% | |||||
$ 10,550,000 | Alabama Housing Finance | $ | 10,550,000 | ||
6,000,000 | Decatur Industrial Development Board, 1.03% (c) | 6,000,000 | |||
6,400,000 | Stevenson, 1.13% (c) | 6,400,000 | |||
6,700,000 | Stevenson, 1.13% (c) | 6,700,000 | |||
29,650,000 | |||||
Arkansas—3.4% | |||||
6,000,000 | Arkansas Development Finance Authority, 1.06% (c) | 6,000,000 |
Principal Amount | Value | |||
Notes, Bonds & Variable Rate Demand Notes (continued) | ||||
14,500,000 | Union County, 0.98% (c) | 14,500,000 | ||
14,500,000 | Union County, 0.98% (c) | 14,500,000 | ||
35,000,000 | ||||
Arizona—1.4% | ||||
3,400,000 | Maricopa County Industrial Development Authority, | 3,400,000 | ||
6,850,000 | Maricopa County Industrial Development Authority, | 6,850,000 | ||
4,000,000 | Phoenix Civic Improvement, | 4,000,000 | ||
14,250,000 | ||||
The accompanying notes are an integral part of the financial statements.
2
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 29, 2004
(unaudited)
(continued)
Principal Amount | Value | ||||
Notes, Bonds & Variable Rate Demand Notes (continued) | |||||
Colorado—1.9% | |||||
$ 3,000,000 | Colorado Housing & Finance Authority, 1.00% (c) | $ | 3,000,000 | ||
14,160,000 | Colorado Housing & Finance Authority, 1.00% (c) | 14,160,000 | |||
2,500,000 | Colorado Housing & Finance Authority, 1.20% | 2,500,000 | |||
19,660,000 | |||||
District of Columbia—1.1% | |||||
11,300,000 | District of Columbia, 0.95% American National Red Cross, Series 00, 03/05/04 LOC: Bank One, N.A. | 11,300,000 | |||
Delaware—4.0% | |||||
41,000,000 | Delaware Economic Development Authority, 1.06% | 41,000,000 | |||
Florida—2.3% | |||||
2,500,000 | Florida Housing Finance Agency, 0.99% (c) Multi Family Housing | 2,500,000 |
Principal Amount | Value | |||
Notes, Bonds & Variable Rate Demand Notes (continued) | ||||
6,300,000 | Greater Orlando Aviation | 6,300,000 | ||
9,018,000 | Miami-Dade Aviation | 9,018,000 | ||
6,000,000 | Miami-Dade Aviation | 6,000,000 | ||
23,818,000 | ||||
Georgia—4.9% | ||||
2,700,000 | Clayton County Development | 2,700,000 | ||
8,850,000 | Cobb County Housing | 8,850,000 |
The accompanying notes are an integral part of the financial statements.
3
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 29, 2004
(unaudited)
(continued)
Principal Amount | Value | ||||
Notes, Bonds & Variable Rate Demand Notes (continued) | |||||
$ 8,000,000 | Cobb County Housing | $ | 8,000,000 | ||
4,000,000 | De Kalb County Housing | 4,000,000 | |||
6,525,000 | East Point Housing | 6,525,000 | |||
3,400,000 | Gainesville & Hall County Development Authority, 1.11% (c) | 3,400,000 | |||
3,100,000 | Rockmart Development | 3,100,000 |
Principal Amount | Value | |||
Notes, Bonds & Variable Rate Demand Notes (continued) | ||||
8,100,000 | Roswell Housing | 8,100,000 | ||
6,650,000 | Waleska Downtown Development Authority, 0.98% (c) | 6,650,000 | ||
51,325,000 | ||||
Iowa—0.8% | ||||
8,000,000 | Iowa, GO, 1.05% | 8,024,771 | ||
Illinois—7.1% | ||||
5,375,000 | Chicago Industrial Development Authority, 1.03% (c) | 5,375,000 | ||
3,255,000 | Chicago, 1.03% (c) | 3,255,000 |
The accompanying notes are an integral part of the financial statements.
4
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 29, 2004
(unaudited)
(continued)
Principal Amount | Value | ||||
Notes, Bonds & Variable Rate Demand Notes (continued) | |||||
$ 3,000,000 | Chicago, 1.10% (c) | $ | 3,000,000 | ||
12,804,000 | Chicago Midway International Airport, 1.00% | 12,804,000 | |||
2,960,000 | Huntley, 1.00% (c) | 2,960,000 | |||
2,435,000 | Illinois Development Finance Authority, 1.03% (c) | 2,435,000 | |||
1,400,000 | Illinois Development Finance Authority, 1.03% (c) | 1,400,000 | |||
3,400,000 | Illinois Development Finance Authority, 1.03% (c) | 3,400,000 |
Principal Amount | Value | |||
Notes, Bonds & Variable Rate Demand Notes (continued) | ||||
1,250,000 | Illinois Development Finance Authority, 1.03% (c) | 1,250,000 | ||
2,000,000 | Illinois Development Finance Authority, 1.05% (c) | 2,000,000 | ||
2,750,000 | Illinois Development Finance Authority, 1.03% (c) | 2,750,000 | ||
3,640,000 | Illinois Development Finance Authority, 1.10% (c) | 3,640,000 | ||
3,110,000 | Illinois Development Finance Authority, 1.03% (c) | 3,110,000 |
The accompanying notes are an integral part of the financial statements.
5
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 29, 2004
(unaudited)
(continued)
Principal Amount | Value | ||||
Notes, Bonds & Variable Rate Demand Notes (continued) | |||||
$10,000,000 | Illinois Development Finance Authority, 1.00% (c) | $ | 10,000,000 | ||
4,100,000 | Illinois Student Assistance Commission, 1.00% (c) | 4,100,000 | |||
4,000,000 | Lake County, 1.02% (c) | 4,000,000 | |||
4,320,000 | Lake County, 1.10% (c) | 4,320,000 | |||
3,330,000 | Wheeling, 1.00% (c) | 3,330,000 | |||
73,129,000 | |||||
Indiana—3.8% | |||||
3,155,000 | Crawfordsville, 1.06% (c) | 3,155,000 |
Principal Amount | Value | |||
Notes, Bonds & Variable Rate Demand Notes (continued) | ||||
2,670,000 | Elkhart County, 1.05% (c) | 2,670,000 | ||
2,500,000 | Gibson County, 0.98% (c) | 2,500,000 | ||
3,000,000 | Gibson County, 0.98% (c) | 3,000,000 | ||
1,000,000 | Gibson County, 0.98% (c) | 1,000,000 | ||
4,000,000 | Gibson County, 0.98% (c) | 4,000,000 | ||
3,000,000 | Gibson County, 0.98% (c) | 3,000,000 | ||
4,000,000 | Indianapolis, 0.99% (c) | 4,000,000 |
The accompanying notes are an integral part of the financial statements.
6
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 29, 2004
(unaudited)
(continued)
Principal Amount | Value | ||||
Notes, Bonds & Variable Rate Demand Notes (continued) | |||||
$ 10,000,000 | Indianapolis Airport | $ | 10,000,000 | ||
1,844,000 | La Porte County, 1.07% (c) | 1,844,000 | |||
4,452,000 | Portage, 1.04% (c) | 4,452,000 | |||
39,621,000 | |||||
Kansas—0.3% | |||||
3,300,000 | Shawnee Industrial Development Authority, 1.03% (c) | 3,300,000 | |||
Kentucky—1.0% | |||||
10,800,000 | Pendleton County, 1.01% | 10,800,000 | |||
Principal Amount | Value | |||
Notes, Bonds & Variable Rate Demand Notes (continued) | ||||
Louisiana—1.1% | ||||
1,500,000 | Calcasieu Parish, 1.00% (c) | 1,500,000 | ||
3,500,000 | Deridder Industrial Development Board, 1.10% (c) | 3,500,000 | ||
3,000,000 | Lake Charles, 0.95% (c) | 3,000,000 | ||
3,400,000 | Lake Charles, 0.98% (c) | 3,400,000 | ||
11,400,000 | ||||
Massachusetts—5.6% | ||||
22,450,000 | Massachusetts Health & Educational Facilities Authority, 0.85% (c) | 22,450,000 | ||
6,000,000 | Mass Port Authority, 1.05% | 6,000,000 | ||
24,885,000 | Massachusetts Water Resources Authority, FGIC, 0.91% (c) | 24,885,000 |
The accompanying notes are an integral part of the financial statements.
7
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 29, 2004
(unaudited)
(continued)
Principal Amount | Value | ||||
Notes, Bonds & Variable Rate Demand Notes (continued) | |||||
$ 5,000,000 | Massachusetts Water Resources Authority, 1.05% | $ | 5,000,000 | ||
58,335,000 | |||||
Maryland—0.4% | |||||
4,575,000 | Maryland Health & Higher Educational Facilities | 4,575,000 | |||
Maine—0.6% | |||||
5,910,000 | Finance Authority of | 5,910,000 | |||
Michigan—2.4% | |||||
11,725,000 | Michigan Health Facility | 11,725,000 | |||
10,000,000 | University of Michigan, 1.05% | 10,000,000 | |||
3,305,000 | University of Michigan, 1.02% | 3,305,000 | |||
25,030,000 | |||||
Principal Amount | Value | |||
Notes, Bonds & Variable Rate Demand Notes (continued) | ||||
Minnesota—1.2% | ||||
2,000,000 | Dakota County Community Development Agency, 1.08% (c) | 2,000,000 | ||
5,190,000 | Ramsey County Housing & Redevelopment Authority, 1.30% (c) | 5,190,000 | ||
5,000,000 | St Paul & Ramsey Housing & Redevelopment Authority, 1.30% (c) | 5,000,000 | ||
12,190,000 | ||||
Nebraska—0.4% | ||||
3,900,000 | Lancaster County NE, 1.06% (c) | 3,900,000 | ||
The accompanying notes are an integral part of the financial statements.
8
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 29, 2004
(unaudited)
(continued)
Principal Amount | Value | ||||
Notes, Bonds & Variable Rate Demand Notes (continued) | |||||
Nevada—3.7% | |||||
$ 12,500,000 | Clark County, 1.02% (c) | $ | 12,500,000 | ||
13,500,000 | Director State of | 13,500,000 | |||
4,600,000 | Henderson Public Improvement Trust, 1.06% (c) | 4,600,000 | |||
1,790,000 | Nevada Housing | 1,790,000 | |||
2,000,000 | Nevada Housing | 2,000,000 |
Principal Amount | Value | |||
Notes, Bonds & Variable Rate Demand Notes (continued) | ||||
3,755,000 | Nevada Housing | 3,755,000 | ||
38,145,000 | ||||
New York—8.8% | ||||
10,000,000 | Long Island Power | 10,000,000 | ||
7,300,000 | Long Island Power | 7,300,000 | ||
17,500,000 | Metropolitan Transportation Authority State of | 17,500,000 | ||
7,000,000 | Metropolitan Transportation Authority State of | 7,000,000 |
The accompanying notes are an integral part of the financial statements.
9
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 29, 2004
(unaudited)
(continued)
Principal Amount | Value | ||||
Notes, Bonds & Variable Rate Demand Notes (continued) | |||||
$ 5,000,000 | Metropolitan Transportation Authority State of New York, 0.95% | $ | 5,000,000 | ||
8,000,000 | Nassau County Interim Finance Authority, 0.91% (c) | 8,000,000 | |||
12,700,000 | New York City Housing Development | 12,700,000 | |||
14,500,000 | New York Municipal Water Authority, 0.98% | 14,500,000 | |||
9,000,000 | New York State Housing Finance Agency, 0.94% (c) | 9,000,000 | |||
91,000,000 | |||||
Ohio—2.9% | |||||
9,000,000 | Akron Bath Copley Joint Township Hospital District, 1.00% (c) | 9,000,000 |
Principal Amount | Value | |||
Notes, Bonds & Variable Rate Demand Notes (continued) | ||||
3,500,000 | Evendale OH, 0.98% (c) | 3,500,000 | ||
7,200,000 | Hamilton County, 1.00% (c) | 7,200,000 | ||
10,300,000 | Ohio Air Quality Development Authority, 1.03% (c) | 10,300,000 | ||
30,000,000 | ||||
Oklahoma—0.1% | ||||
1,600,000 | Oklahoma Development Finance Authority, 1.05% (c) | 1,600,000 | ||
Pennsylvania—1.4% | ||||
2,800,000 | Elk County Industrial Development Authority, 0.99% (c) | 2,800,000 | ||
4,000,000 | Pennsylvania Economic Development Financing Authority, 1.00% (c) | 4,000,000 |
The accompanying notes are an integral part of the financial statements.
10
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 29, 2004
(unaudited)
(continued)
Principal Amount | Value | ||||
Notes, Bonds & Variable Rate Demand Notes (continued) | |||||
$ 7,980,000 | Pennsylvania State Higher Educational Facilities | $ | 7,980,000 | ||
14,780,000 | |||||
Rhode Island—1.2% | |||||
4,400,000 | Rhode Island Student Loan Authority, 1.00% (c) | 4,400,000 | |||
5,000,000 | Rhode Island Student Loan Authority, 1.00% (c) | 5,000,000 | |||
2,600,000 | Rhode Island Student Loan Authority, 1.00% (c) | 2,600,000 | |||
12,000,000 | |||||
South Carolina—1.8% | |||||
6,000,000 | Berkeley County, 1.03% (c) | 6,000,000 |
Principal Amount | Value | |||
Notes, Bonds & Variable Rate Demand Notes (continued) | ||||
4,500,000 | South Carolina Jobs-Economic Development | 4,500,000 | ||
8,000,000 | South Carolina Jobs-Economic Development Authority, 1.03% (c) | 8,000,000 | ||
18,500,000 | ||||
South Dakota—1.1% | ||||
5,000,000 | South Dakota Housing Development | 5,000,000 | ||
6,495,000 | South Dakota Housing Development | 6,495,000 | ||
11,495,000 | ||||
The accompanying notes are an integral part of the financial statements.
11
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 29, 2004
(unaudited)
(continued)
Principal Amount | Value | ||||
Notes, Bonds & Variable Rate Demand Notes (continued) | |||||
Tennessee—5.4% | |||||
$ 7,000,000 | Lewisburg Industrial Development Board, 1.02% (c) | $ | 7,000,000 | ||
16,955,000 | Montgomery County Public Building Authority, 0.95% (c) | 16,955,000 | |||
1,896,000 | Nashville & Davidson County Health & Education Facility Board, 1.09 (c) Multi Family Housing | 1,896,000 | |||
10,000,000 | Shelby County Health Educational & Housing Facilities Board, 0.97% (c) | 10,000,000 | |||
10,000,000 | Stewart County Industrial Development Board, 0.98% (c) | 10,000,000 |
Principal Amount | Value | |||
Notes, Bonds & Variable Rate Demand Notes (continued) | ||||
10,000,000 | Stewart County Industrial Development Board, 0.98% (c) | 10,000,000 | ||
55,851,000 | ||||
Texas—12.9% | ||||
6,885,000 | Austin Combined Utility | 6,885,000 | ||
8,070,000 | Austin Combined Utility | 8,070,000 | ||
3,600,000 | Brazos River Authority, 1.06% (c) | 3,600,000 | ||
5,000,000 | Brazos River Authority, 1.06% (c) | 5,000,000 | ||
2,000,000 | Calhoun Port Authority, 1.10% (c) | 2,000,000 |
The accompanying notes are an integral part of the financial statements.
12
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 29, 2004
(unaudited)
(continued)
Principal Amount | Value | ||||
Notes, Bonds & Variable Rate Demand Notes (continued) | |||||
$ 15,400,000 | Greater East Texas Higher Education Authority, 1.00% (c) | $ | 15,400,000 | ||
13,000,000 | Gulf Coast Waste Disposal Authority, 1.03% (c) | 13,000,000 | |||
7,880,000 | Gulf Coast Waste Disposal Authority, 0.95% (c) | 7,880,000 | |||
6,000,000 | Houston Health Facilities Development Corporation, | 6,000,000 | |||
4,000,000 | Mansfield Industrial Development | 4,000,000 |
Principal Amount | Value | |||
Notes, Bonds & Variable Rate Demand Notes (continued) | ||||
6,300,000 | Midlothian Industrial Development | 6,300,000 | ||
9,400,000 | North Texas Higher Education Authority, 1.00% (c) | 9,400,000 | ||
6,400,000 | Tarrant County Housing Finance Corporation, 1.10% (c) | 6,400,000 | ||
6,000,000 | Texas, GO, 0.99% (c) | 6,000,000 | ||
20,000,000 | Texas, GO, 1.17% | 20,082,048 | ||
8,500,000 | Texas Public Finance Authority, | 8,500,000 | ||
5,600,000 | University of Texas Board of Regents, 1.00% | 5,600,000 | ||
134,117,048 | ||||
The accompanying notes are an integral part of the financial statements.
13
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 29, 2004
(unaudited)
(continued)
Principal Amount | Value | ||||
Notes, Bonds & Variable Rate Demand Notes (continued) | |||||
Virginia—4.4% | |||||
$ 15,000,000 | Metropolitan Washington Airports Authority, 1.00% (c) | $ | 15,000,000 | ||
5,000,000 | Harrisonburg Redevelopment & Housing Authority, 0.99% (c) | 5,000,000 | |||
2,500,000 | Henrico County Economic Development Authority, 0.98% (c) | 2,500,000 | |||
2,000,000 | Norfolk Industrial Development Authority, 1.11% (c) | 2,000,000 |
Principal Amount | Value | |||
Notes, Bonds & Variable Rate Demand Notes (continued) | ||||
2,000,000 | Richmond Redevelopment & Housing Authority, 1.02% (c) | 2,000,000 | ||
4,750,000 | Richmond Redevelopment & Housing Authority, 1.02% (c) | 4,750,000 | ||
10,660,000 | Richmond Redevelopment & Housing Authority, 1.02% (c) | 10,660,000 | ||
4,100,000 | Virginia Beach Development Authority, 1.11% (c) | 4,100,000 | ||
46,010,000 | ||||
Washington—7.0% | ||||
7,225,000 | Port of Seattle, 1.06% | 7,225,000 |
The accompanying notes are an integral part of the financial statements.
14
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 29, 2004
(unaudited)
(continued)
Principal Amount | Value | ||||
Notes, Bonds & Variable Rate Demand Notes (continued) | |||||
$ 15,995,000 | Port of Seattle, 1.01% | $ | 15,995,000 | ||
15,000,000 | Port of Tacoma, 1.05% | 15,000,000 | |||
6,000,000 | Port of Vancouver, 1.05% (c) | 6,000,000 | |||
5,000,000 | Port of Seattle, 1.04% (c) | 5,000,000 | |||
1,620,000 | Washington Housing Finance Commission, 1.08% (c) | 1,620,000 | |||
2,085,000 | Washington Housing Finance Commission, 1.08% (c) | 2,085,000 |
Principal Amount | Value | |||
Notes, Bonds & Variable Rate Demand Notes (continued) | ||||
4,805,000 | Washington Housing Finance Commission, 1.03% (c) | 4,805,000 | ||
6,240,000 | Washington Housing Finance Commission, 0.99% (c) | 6,240,000 | ||
2,990,000 | Washington Housing Finance Commission, 1.05% (c) | 2,990,000 | ||
3,700,000 | Washington Housing Finance Commission, 1.04% (c) | 3,700,000 | ||
1,510,000 | Washington Housing Finance Commission, 1.05% (c) | 1,510,000 | ||
72,170,000 | ||||
The accompanying notes are an integral part of the financial statements.
15
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 29, 2004
(unaudited)
(continued)
Principal Amount | Value | ||||
Notes, Bonds & Variable Rate Demand Notes (continued) | |||||
Wisconsin—1.4% | |||||
$ 9,920,000 | Wisconsin Housing & Economic Development Authority, 1.00% (c) | $ | 9,920,000 | ||
5,000,000 | Wisconsin Housing & Economic Development Authority, 0.99% (c) | 5,000,000 | |||
14,920,000 | |||||
West Virginia —1.2% | |||||
12,000,000 | West Virginia Public Energy Authority, 1.05% | 12,000,000 | |||
1,034,805,819 | |||||
Value | |||||
Total Investments (cost $1,034,805,819) (d), 99.9%(a) | $ | 1,034,805,819 | |||
Other Assets and Liabilities, net, 0.1%(a) | 1,064,690 | ||||
Net Assets, (net asset value, offering and redemption price of $1.00 per share; 1,035,925,092 shares outstanding), consisting of paid-in-capital net of accumulated net realized loss of $37,528, 100% | $ | 1,035,870,509 | |||
(a) | Percentages are based on net assets. |
(b) | Earlier of the maturity date or the put date. |
(c) | Floating rate notes are securities that generally are payable on demand within seven calendar days. Put bonds are securities that can be put back to the issuer or remarketer either at the option of the holder, at a specified date, or within a specified time period known at the time of purchase. For these securities, the demand period and the remaining period to put date, respectively, are used when calculating the weighted average maturity of the portfolio. |
(d) | The aggregate identified cost for federal income tax purposes is the same. |
AMT | — | Securities subject to Alternative Minimum Tax | ||
BPA | — | Bond Purchase Agreement | ||
FGIC | — | Finance Guaranty Insurance Company | ||
FSA | — | Financial Security Assurance | ||
GIC | — | Credit enhancement provided by guaranteed investment contract with noted institution | ||
GO | — | General Obligation | ||
LOC | — | Credit enhancement provided by letter of credit issued by noted institution |
The accompanying notes are an integral part of the financial statements.
16
Heritage Cash Trust—Municipal Money Market Fund
Statement of Operations
For the Six-Month Period Ended February 29, 2004
(unaudited)
Investment Income: | ||||||
Income: | ||||||
Interest | $ | 5,558,878 | ||||
Expenses: | ||||||
Management fee | $ | 2,415,889 | ||||
Distribution fee | 789,411 | |||||
Shareholder servicing fees | 107,374 | |||||
State qualification expenses | 77,180 | |||||
Custodian fee | 38,651 | |||||
Professional fees | 36,759 | |||||
Fund accounting fee | 28,852 | |||||
Reports to shareholders | 24,750 | |||||
Insurance | 3,986 | |||||
Trustees’ fees and expenses | 7,814 | |||||
Other | 994 | |||||
Total expenses | 3,531,660 | |||||
Net investment income from operations | $ | 2,027,218 | ||||
Statements of Changes in Net Assets
For the Six-Month Period Ended February 29, 2004 (unaudited) | For the Fiscal Year Ended August 31, 2003 | |||||||
Increase in net assets: | ||||||||
Operations: | ||||||||
Net investment income from operations | $ | 2,027,218 | $ | 6,158,716 | ||||
Distributions to shareholders from net investment income ($0.002 and $0.006 per share, respectively) | (2,027,218 | ) | (6,156,796 | ) | ||||
Increase (decrease) in net assets from Fund share transactions | (21,032,116 | ) | 108,413,461 | |||||
Increase (decrease) in net assets | (21,032,116 | ) | 108,415,381 | |||||
Net assets, beginning of period | 1,056,902,625 | 948,487,244 | ||||||
Net assets, end of period | $ | 1,035,870,509 | $ | 1,056,902,625 | ||||
The accompanying notes are an integral part of the financial statements.
17
Heritage Cash Trust—Municipal Money Market Fund
Financial Highlights
The following table includes selected data for a share outstanding throughout each period and other performance information derived from the financial statements.
For the Six-Month Period Ended February 29, 2004 (unaudited) | For the Fiscal Years Ended August 31 | |||||||||||||||||||||||
2003 | 2002 | 2001 | 2000 | 1999 | ||||||||||||||||||||
Net asset value, beginning of period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | ||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||
Net investment income (a) | 0.002 | 0.006 | 0.010 | 0.029 | 0.032 | 0.026 | ||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||
Dividends from net investment income (a) | (0.002 | ) | (0.006 | ) | (0.010 | ) | (0.029 | ) | (0.032 | ) | (0.026 | ) | ||||||||||||
Net asset value, end of period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | ||||||||||||
Total Return (%) | 0.19 | (b) | 0.61 | 0.98 | 2.97 | 3.29 | 2.62 | |||||||||||||||||
Ratios to average daily net assets (%)/ Supplemental Data | ||||||||||||||||||||||||
Operating expenses, net | 0.67 | (c) | 0.67 | 0.68 | 0.69 | 0.71 | 0.73 | |||||||||||||||||
Net investment income | 0.39 | (c) | 0.59 | 0.96 | 2.90 | 3.24 | 2.58 | |||||||||||||||||
Net assets, end of period ($ millions) | 1,036 | 1,057 | 948 | 913 | 772 | 625 |
(a) | Includes net realized gains and losses which were less than $0.001 per share for each of the periods. |
(b) | Not annualized |
(c) | Annualized |
The accompanying notes are an integral part of the financial statements.
18
Heritage Cash Trust—Municipal Money Market Fund
Notes to Financial Statements
(unaudited)
Note 1: | Significant Accounting Policies. Heritage Cash 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 two separate investment portfolios, the Municipal Money Market Fund (the “Fund”) and the Money Market Fund. The Fund seeks to achieve maximum current income exempt from federal income tax consistent with stability of principal. The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates. The following is a summary of significant accounting policies: |
Security Valuation: The Fund uses the amortized cost method of security valuation (as set forth in Rule 2a-7 under the Investment Company Act of 1940, as amended). The amortized cost of an instrument is determined by valuing it at cost at the time of purchase and thereafter accreting/amortizing any purchase discount/premium at a constant rate until maturity.
Federal Income Taxes: The Fund is treated as a single corporate taxpayer as provided for in the Tax Reform Act of 1986, as amended. 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 income to its shareholders. Accordingly, no provision has been made for federal income and excise taxes.
Distribution of Income and Gains: Distributions from net investment income and net realized gains available for distribution are declared daily and paid monthly. The Fund uses the identified cost method for determining realized gain or loss on investment transactions for both financial and federal income tax reporting purposes.
Expenses: The Fund is charged for those expenses which are directly attributable to it, while other expenses are allocated proportionately among the Heritage mutual funds based upon methods approved by the Board of Trustees.
Other: Investment transactions are recorded on a trade date basis. Interest income is recorded on the accrual basis.
19
Heritage Cash Trust—Municipal Money Market Fund
Notes to Financial Statements
(unaudited)
(continued)
Note 2: | Fund Shares. At February 29, 2004, there was an unlimited number of shares of beneficial interest of no par value authorized. Transactions in shares and dollars of the Fund during the six-month period ended February 29, 2004 and for the fiscal year ended August 31, 2003 at a net asset value of $1.00 per share, were as follows: |
For the Six-Month Period Ended February 29, 2004 (unaudited) | For the Fiscal Year Ended August 31, 2003 | |||||
Shares sold | 2,351,951,964 | 3,829,357,644 | ||||
Shares issued on reinvestment of distributions | 2,011,004 | 6,544,389 | ||||
Shares redeemed | (2,374,995,084 | ) | (3,727,488,572 | ) | ||
Net increase (decrease) | (21,032,116 | ) | 108,413,461 | |||
Shares outstanding: | ||||||
Beginning of period | 1,056,957,208 | 948,543,747 | ||||
End of period | 1,035,925,092 | 1,056,957,208 | ||||
Note 3: | Purchases, Sales and Maturities of Securities. For the six-month period ended February 29, 2004, purchases, sales and maturities of short-term investment securities aggregated $1,627,716,940, $1,230,561,000 and $432,697,000, respectively. |
Note 4: | Management, Distribution, Shareholder Servicing Agent, Fund Accounting and Trustees’ Fees. Under the Trust’s Investment Advisory and Administration Agreement with Heritage Asset Management, Inc. (the “Manager” or “Heritage”), the Fund agrees to pay to the Manager the following annual fee as a percentage of the Fund’s average daily net assets, computed daily and payable monthly. |
Fund’s Average Daily Net Assets | Management Fee Rate | ||
First $250 million | 0.500 | % | |
Next $250 million | 0.475 | % | |
Next $250 million | 0.450 | % | |
Next $250 million | 0.425 | % | |
Greater than $1 billion | 0.400 | % |
The amount payable to the Manager as of February 29, 2004 was $388,489. Pursuant to a contractual agreement, the Manager agreed to waive its fees and, if necessary, reimburse the Fund to the extent that total operating expenses exceed 0.74% of its average daily net assets for the fiscal year ending August 31, 2004. No fees were waived and no expenses were reimbursed for the period ended February 29, 2004.
20
Heritage Cash Trust—Municipal Money Market Fund
Notes to Financial Statements
(unaudited)
(continued)
The Manager entered into a subadvisory agreement with Alliance Capital Management L.P. (the “Subadviser”) to provide investment advice and portfolio management services (including placement of brokerage orders) and certain compliance and other services for a fee payable by the Manager, equal to 0.125% of the Fund’s average daily net assets on assets up to $100 million, 0.10% of average daily net assets on assets from $100 million to $250 million, and 0.05% on average daily net assets exceeding $250 million without regard to any reduction due to the imposition of expense limitations.
The Manager also is the Shareholder Servicing Agent and Fund Accountant for the Fund. The Manager charged $107,374 for Shareholder Servicing fees and $28,852 for Fund Accounting services, of which $34,038 and $11,200 were payable as of February 29, 2004, respectively.
Pursuant to a plan adopted in accordance with Rule 12b-1 of the Investment Company Act of 1940, as amended, the Fund is authorized to pay Raymond James & Associates, Inc. (the “Distributor” or “RJA”) a fee equal to 0.15% of the average daily net assets. Such fee is accrued daily and payable monthly. The total amount payable to the Distributor as of February 29, 2004 was $123,873. The Manager, Distributor, Fund Accountant and Shareholder Servicing Agent are all wholly owned subsidiaries of Raymond James Financial, Inc. (“RJF”).
Trustees of the Trust also serve as Trustees for Heritage Capital Appreciation Trust, Heritage Growth and Income Trust, Heritage Income Trust and Heritage Series Trust, investment companies that are also advised by the Manager (collectively referred to as the “Heritage Mutual Funds”). Each Trustee of the Heritage Mutual Funds who is not an employee of the Manager or an employee of an affiliate of the Manager received an annual fee of $18,000 and an additional fee of $3,000 for each combined quarterly meeting of the Heritage Mutual Funds attended. Trustees’ fees and expenses are paid equally by each portfolio in the Heritage Mutual Funds.
Note 5: | Federal Income Taxes. The timing and character of certain income and capital gain distributions are determined in accordance with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. As a result, net investment income (loss) and net realized gain (loss) from investment transactions for a reporting period may differ significantly from distributions during such period. These book/tax differences may be temporary or permanent in nature. To the extent these differences are permanent, they are charged or credited to paid in capital or accumulated net realized gain (loss), as appropriate, in the period that the differences arise. Results of operations and net assets are not affected by these reclassifications. As of August 31, 2003, the Fund has net-tax basis capital loss carryforwards in the aggregate of $37,528. Capital loss carryforwards in the amount of $37,528 may be applied to any net taxable gains until their expiration date of 2004. During the fiscal year ended August 31, 2003 the Fund utilized $1,348 of capital loss carryforwards from prior years. All dividends paid by the Fund for net investment income are exempt from Federal income tax. |
21
Tax Information
(unaudited)
Of the dividends paid from net investment income for the fiscal year ended August 31, 2003, 100% were exempt interest dividends which are tax exempt for purposes of regular federal income tax, and a portion were exempt interest dividends which may be subject to the federal alternative minimum tax. Please consult a tax adviser if you have questions about federal or state income tax laws, or on how to prepare your tax return.
22
Item 2. | Code of Ethics |
Not applicable to semi-annual reports.
Item 3. | Audit Committee Financial Expert |
Not applicable to semi-annual reports.
Item 4. | Principal Accountant Fees and Services |
Not applicable to semi-annual reports.
Item 5. | Audit Committee of Listed Registrants |
Not applicable to the registrant.
Item 6. | Schedule of Investments |
Not applicable at this time.
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-end Management Investment Companies |
Not applicable to the registrant.
Item 8. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers |
Not applicable to the registrant.
Item 9. | Submission of Matters to a Vote of Security Holders |
Not applicable.
Item 10. | Controls and Procedures |
(a) | Based on an evaluation of the disclosure controls and procedures (as defined in Rule 30a-2(c) under the Act), the Principal Executive Officer and Treasurer of Heritage Cash Trust have concluded that such disclosure controls and procedures are effective as of April 30, 2004. |
(b) | There was no change in the internal controls over financial reporting (as defined in Rule 30a-3(d) of Heritage Cash Trust that occurred during the first half of its fiscal year that has materially affected or is reasonably likely to materially affect, its internal control over financial reporting. |
Item 11. | Exhibits |
(a)(1) Not applicable to semi-annual reports.
(a)(2) The certifications required by Rule 30a-2(a) of the Investment Company Act of 1940, as amended, and Section 302 of the Sarbanes-Oxley Act of 2002 is filed and attached hereto as Exhibit 99.CERT.
(b) The certifications required by Rule 30a-2(b) of the Investment Company Act of 1940, as amended, and Section 906 of the Sarbanes-Oxley Act of 2002 is filed and attached hereto as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
HERITAGE CASH TRUST | ||||||||
Date: April 30, 2004 | ||||||||
/s/ K.C. Clark | ||||||||
K.C. Clark Executive Vice President and Principal Executive Officer |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Date: April 30, 2004
/s/ K.C. Clark |
K.C. Clark Executive Vice President and Principal Executive Officer |
Date: April 30, 2004
/s/ Andrea N. Mullins |
Andrea N. Mullins Treasurer |