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: 811-04337 |
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 Nicholson Graham LLP
1601 K Street, NW
Washington, D.C. 20006-1600
Date of fiscal year end: August 31
Date of reporting period: February 28, 2006
Item 1. | Reports to Shareholders |
Heritage
Cash
Trust
Money Market Fund
Semiannual Report
(Unaudited) and Investment Performance Review for the Six-Month Period Ended February 28, 2006
March 15, 2006
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 28, 2006. The Fund’s seven-day current yield(a) increased from 2.83% on August 31, 2005 to 3.78% on February 28, 2006. The increase in the yield can be attributed primarily to decisions by the Federal Reserve’s Federal Open Market Committee to raise the federal funds rate from 3.50% at the beginning of the period to 4.50%. The Committee increased the federal funds rate by 0.25% at each of the Federal Open Market Meetings that were held during the 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 the Fund’s website at www.HeritageFunds.com.
As of February 28, 2006, approximately 56% of the Fund’s net assets were invested in commercial paper or certificates of deposit rated A-1+, the highest short-term rating classification by Standard & Poor’s Rating Group (“S&P”) while 6% of net assets were invested in short-term obligations rated A-1, the next highest rating category. Approximately 38% of the Fund’s net assets were invested in short-term obligations issued by U.S. Government Sponsored Enterprises, including Fannie Mae, Freddie Mac and Federal Home Loan Bank(b). 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,
Stephen G. Hill
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. Please consider the investment objectives, risks, charges, and expenses of any fund carefully before investing. Contact Heritage at (800) 421-4184 or your financial advisor for a prospectus, which contains this and other important information about the Fund. Read the prospectus carefully before you invest.
(b) U.S. 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 of the Fund.
1
Heritage Cash Trust—Money Market Fund
Statement of Net Assets
February 28, 2006
(unaudited)
Principal Amount | Value | ||||
Commercial Paper—59.7%(a) | |||||
Domestic—29.7% | |||||
Banks—6.3% | |||||
$ 50,000,000 | Bank of America Corporation, | $ | 49,766,694 | ||
50,000,000 | Bank of America Corporation, | 49,701,681 | |||
50,000,000 | Bank of America Corporation, | 49,647,847 | |||
50,000,000 | J.P. Morgan Chase & Company, Inc., 4.47%, 03/16/06 | 49,906,875 | |||
50,000,000 | J.P. Morgan Chase & Company, Inc., 4.55%, 04/17/06 | 49,702,986 | |||
50,000,000 | State Street Corporation, | 49,969,722 | |||
50,000,000 | State Street Corporation, | 49,920,736 | |||
348,616,541 | |||||
Beverages—0.7% | |||||
10,550,000 | The Coca-Cola Company, | 10,506,675 | |||
30,000,000 | The Coca-Cola Company, | 29,838,392 | |||
40,345,067 | |||||
Chemicals—0.3% | |||||
13,585,000 | E.I. du Pont de Nemours and Company, 4.45%, 03/20/06 | 13,553,094 | |||
Cosmetics/Personal Care—6.1% | |||||
50,000,000 | Colgate-Palmolive Company, | 49,950,333 | |||
37,100,000 | Colgate-Palmolive Company, | 37,044,845 | |||
50,000,000 | Kimberly-Clark Worldwide, | 50,000,000 | |||
50,000,000 | Kimberly-Clark Worldwide, | 49,775,500 | |||
50,000,000 | The Procter & Gamble Company, 4.47%, 03/17/06 | 49,900,667 |
Principal Amount | Value | |||
Commercial Paper (continued) | ||||
82,420,000 | The Procter & Gamble Company, 4.47%, 03/22/06 | 82,205,090 | ||
17,580,000 | The Procter & Gamble Company, 4.47%, 03/24/06 | 17,529,794 | ||
336,406,229 | ||||
Diversified Manufacturer—2.9% | ||||
10,000,000 | 3M Company, 4.40%, 03/23/06 | 9,973,111 | ||
40,000,000 | General Electric Company, | 39,975,111 | ||
110,000,000 | General Electric Company, | 109,919,700 | ||
159,867,922 | ||||
Financial Services—2.7% | ||||
50,000,000 | Citigroup Funding Inc., | 49,993,889 | ||
50,000,000 | Citigroup Funding Inc., | 49,993,819 | ||
50,000,000 | Citigroup Funding Inc., | 49,877,222 | ||
149,864,930 | ||||
Office/Business Equipment—1.8% | ||||
30,370,000 | Pitney Bowes, Inc., | 30,351,230 | ||
50,000,000 | Pitney Bowes, Inc., | 49,882,306 | ||
19,630,000 | Pitney Bowes, Inc., | 19,566,628 | ||
99,800,164 | ||||
Oil & Gas—5.5% | ||||
50,000,000 | ChevronTexaco Funding Corporation, 4.47%, 04/03/06 | 49,795,125 | ||
50,000,000 | ChevronTexaco Funding Corporation, 4.49%, 04/11/06 | 49,744,319 | ||
50,000,000 | ChevronTexaco Funding Corporation, 4.50%, 04/13/06 | 49,731,250 | ||
65,000,000 | Shell International Finance BV, | 64,984,436 | ||
37,846,000 | Shell International Finance BV, | 37,679,688 |
The accompanying notes are an integral part of the financial statements.
2 |
Heritage Cash Trust—Money Market Fund
Statement of Net Assets
February 28, 2006
(unaudited)
(continued)
Principal Amount | Value | ||||
Commercial Paper (continued) | |||||
$ 47,154,000 | Shell International Finance BV, | $ | 46,917,182 | ||
298,852,000 | |||||
Pharmaceuticals—1.1% | |||||
21,065,000 | Pfizer Investment Capital Ltd., | 21,004,842 | |||
41,100,000 | Pfizer Investment Capital Ltd., | 40,835,950 | |||
61,840,792 | |||||
Retail—2.3% | |||||
50,000,000 | Wal-Mart Stores Inc., | 49,963,583 | |||
50,000,000 | Wal-Mart Stores Inc., | 49,922,000 | |||
25,000,000 | Wal-Mart Stores Inc., | 24,939,444 | |||
124,825,027 | |||||
Total Domestic (cost $1,633,971,766) | 1,633,971,766 | ||||
Foreign—30.0%(b) | |||||
Banks—16.3% | |||||
50,000,000 | ABN AMRO North America Finance Inc., 4.36%, 03/10/06 | 49,945,500 | |||
50,000,000 | ABN AMRO North America Finance Inc., 4.41%, 03/13/06 | 49,926,500 | |||
50,000,000 | Barclays U.S. Funding Corporation, 4.46%, 03/20/06 | 49,882,438 | |||
50,000,000 | Barclays U.S. Funding Corporation, 4.49%, 03/27/06 | 49,837,861 | |||
25,000,000 | Danske Corporation, | 24,978,149 | |||
25,000,000 | Danske Corporation, | 24,962,542 | |||
50,000,000 | Danske Corporation, | 49,655,750 | |||
60,000,000 | Deutsche Bank Financial Inc., | 59,985,467 | |||
40,000,000 | Deutsche Bank Financial Inc., | 39,921,333 |
Principal Amount | Value | |||
Commercial Paper (continued) | ||||
50,000,000 | HBOS Treasury Services PLC, | 49,767,208 | ||
50,000,000 | HBOS Treasury Services PLC, | 49,766,951 | ||
32,900,000 | KFW International Finance, | 32,891,866 | ||
17,100,000 | KFW International Finance, | 17,070,740 | ||
40,000,000 | KFW International Finance, | 39,784,044 | ||
10,000,000 | KFW International Finance, | 9,940,858 | ||
100,000,000 | Rabobank USA Financial Corporation, 4.55%, 03/01/06 | 100,000,000 | ||
50,000,000 | Royal Bank of Scotland, | 49,951,167 | ||
50,000,000 | Royal Bank of Scotland, | 49,748,056 | ||
50,000,000 | UBS Finance Delaware, LLC, | 49,862,500 | ||
50,000,000 | UBS Finance Delaware, LLC, | 49,694,667 | ||
897,573,597 | ||||
Financial Services—4.5% | ||||
50,000,000 | Siemens Capital Corporation, | 49,825,000 | ||
44,950,000 | Siemens Capital Corporation, | 44,781,438 | ||
50,000,000 | Toyota Motor Credit Corporation, | 49,858,167 | ||
40,000,000 | Toyota Motor Credit Corporation, | 39,850,000 | ||
60,000,000 | Toyota Motor Credit Corporation, | 59,736,917 | ||
244,051,522 | ||||
Food—4.2% | ||||
34,100,000 | Nestle Capital Corporation, | 34,078,924 | ||
50,000,000 | Nestle Capital Corporation, | 49,794,667 |
The accompanying notes are an integral part of the financial statements.
3 |
Heritage Cash Trust—Money Market Fund
Statement of Net Assets
February 28, 2006
(unaudited)
(continued)
Principal Amount | Value | ||||
Commercial Paper (continued) | |||||
$ 29,700,000 | Nestle Capital Corporation, | $ | 29,524,349 | ||
36,200,000 | Nestle Capital Corporation, | 35,981,111 | |||
20,000,000 | Unilever Capital Corporation, | 19,950,333 | |||
12,200,000 | Unilever Capital Corporation, | 12,166,748 | |||
10,000,000 | Unilever Capital Corporation, | 9,971,442 | |||
40,000,000 | Unilever Capital Corporation, | 39,870,867 | |||
231,338,441 | |||||
Pharmaceuticals—2.7% | |||||
45,000,000 | GlaxoSmithKline Finance PLC, | 44,837,600 | |||
15,000,000 | GlaxoSmithKline Finance PLC, | 14,945,746 | |||
90,000,000 | GlaxoSmithKline Finance PLC, | 89,445,075 | |||
149,228,421 | |||||
Regional Agencies—2.3% | |||||
10,000,000 | The Canadian Wheat Board, | 9,994,042 | |||
15,000,000 | The Canadian Wheat Board, | 14,989,275 | |||
30,000,000 | The Canadian Wheat Board, | 29,870,208 | |||
35,000,000 | The Canadian Wheat Board, | 34,781,007 | |||
35,000,000 | The Canadian Wheat Board, | 34,763,225 | |||
124,397,757 | |||||
Total Foreign (cost $1,646,589,738) | 1,646,589,738 | ||||
Total Commercial Paper (cost $3,280,561,504) | 3,280,561,504 | ||||
Principal Amount | Value | |||
U.S. Government-Sponsored Enterprises—38.5%(a) | ||||
45,000,000 | Fannie Mae, 4.26%, 03/01/06 | 45,000,000 | ||
50,000,000 | Fannie Mae, 4.33%, 03/09/06 | 49,951,889 | ||
49,875,000 | Fannie Mae, 4.26%, 03/22/06 | 49,751,119 | ||
19,944,000 | Fannie Mae, 4.28%, 03/22/06 | 19,894,206 | ||
40,000,000 | Fannie Mae, 4.42%, 03/29/06 | 39,862,489 | ||
98,000,000 | Fannie Mae, 4.33%, 04/05/06 | 97,587,447 | ||
100,000,000 | Fannie Mae, 4.34%, 04/05/06 | 99,578,056 | ||
49,500,000 | Fannie Mae, 4.35%, 04/05/06 | 49,290,897 | ||
85,000,000 | Fannie Mae, 4.48%, 04/12/06 | 84,555,693 | ||
50,000,000 | Fannie Mae, 4.49%, 05/03/06 | 49,607,125 | ||
27,085,000 | Fannie Mae, 4.50%, 05/03/06 | 26,871,706 | ||
50,000,000 | Federal Home Loan Bank, | 49,958,681 | ||
35,000,000 | Federal Home Loan Bank, | 34,971,008 | ||
50,000,000 | Federal Home Loan Bank, | 49,946,500 | ||
40,000,000 | Federal Home Loan Bank, | 39,932,644 | ||
20,000,000 | Federal Home Loan Bank, | 19,961,600 | ||
50,000,000 | Federal Home Loan Bank, | 49,861,042 | ||
40,000,000 | Federal Home Loan Bank, | 39,856,667 | ||
36,333,000 | Federal Home Loan Bank, | 36,144,371 | ||
135,000,000 | Federal Home Loan Bank, | 134,174,962 | ||
50,000,000 | Federal Home Loan Bank, | 49,648,444 | ||
20,000,000 | Federal Home Loan Bank, | 19,854,356 | ||
50,000,000 | Federal Home Loan Bank, | 49,607,125 | ||
50,000,000 | Federal Home Loan Bank, | 49,593,750 | ||
100,000,000 | Federal Home Loan Bank, | 99,097,000 | ||
68,000,000 | Freddie Mac, 4.25%, 03/07/06 | 67,951,890 | ||
44,000,000 | Freddie Mac, 4.34%, 03/10/06 | 43,952,260 |
The accompanying notes are an integral part of the financial statements.
4 |
Heritage Cash Trust—Money Market Fund
Statement of Net Assets
February 28, 2006
(unaudited)
(continued)
Principal Amount | Value | |||||
U.S. Government-Sponsored Enterprises (continued) | | |||||
$ 38,733,000 | Freddie Mac, 4.26%, 03/13/06 | $ | 38,677,960 | |||
37,982,000 | Freddie Mac, 4.27%, 03/14/06 | 37,923,434 | ||||
50,000,000 | Freddie Mac, 4.42%, 03/27/06 | 49,840,389 | ||||
84,000,000 | Freddie Mac, 4.31%, 03/28/06 | 83,728,470 | ||||
100,000,000 | Freddie Mac, 4.33%, 04/04/06 | 99,591,056 | ||||
28,900,000 | Freddie Mac, 4.45%, 04/18/06 | 28,728,527 | ||||
110,000,000 | Freddie Mac, 4.49%, 05/02/06 | 109,149,394 | ||||
50,000,000 | Freddie Mac, 4.51%, 05/08/06 | 49,574,055 | ||||
120,000,000 | Freddie Mac, 4.52%, 05/09/06 | 118,961,070 | ||||
25,000,000 | Freddie Mac Note, 4.76%, 02/09/07 (callable quarterly) | 25,000,000 | ||||
25,000,000 | Freddie Mac Note, 4.92%, 02/28/07 (callable 8/1/06) | 25,000,000 | ||||
Total U.S. Government-Sponsored Enterprises (cost $2,112,637,282) | 2,112,637,282 | |||||
Certificates of Deposit—1.8%(a) | ||||||
50,000,000 | Wells Fargo & Company, | 50,000,000 | ||||
50,000,000 | Wells Fargo & Company, | 50,000,000 | ||||
Total Certificates of Deposit (cost $100,000,000) | 100,000,000 | |||||
Total Investment Portfolio excluding repurchase agreement (cost $5,493,198,786) | 5,493,198,786 | |||||
Repurchase Agreement—0.2%(a) | ||||||
Repurchase Agreement with State Street Bank and Trust Company, dated February 28, 2006 @ 4.40% to be repurchased at $10,881,330 on March 1, 2006, collateralized by $10,935,000 United States Treasury Notes, 4.750% due November 15, 2008, (market value $11,106,161 including interest) (cost $10,880,000) | 10,880,000 | |||||
Total Investment Portfolio (cost $5,504,078,786)(c), 100.2%(a) | 5,504,078,786 | |||||
Other Assets and Liabilities, net, (0.2%)(a) | (9,646,528 | ) | ||||
Net Assets, (consisting of paid-in-capital net of accumulated net realized loss of $3,174), 100.0% | $5,494,432,258 | |||||
Class A Shares | ||||
Net asset value, offering and redemption price per share, ($5,490,103,677 divided by 5,490,107,086 shares outstanding) | $1.00 | |||
Class B Shares | ||||
Net asset value, offering and redemption price per share, ($2,068,119 divided by 2,067,946 shares outstanding) | $1.00 | |||
Class C Shares | ||||
Net asset value, offering and redemption price per share, ($2,260,462 divided by 2,260,400 shares outstanding) . | $1.00 | |||
(a) | Percentages indicated are based on net assets. |
(b) | U.S. dollar denominated. |
(c) | The aggregate identified cost for federal income tax purposes is the same. |
Maturity Schedule(*)
February 28, 2006 (% of total investments)
1-7 Days | 15.8 | % | |
8-14 Days | 12.5 | % | |
15-30 Days | 23.4 | % | |
31-60 Days | 37.3 | % | |
61-90 Days | 10.1 | % | |
91-397 Days | 0.9 | % | |
Total | 100.0 | % | |
(*) | The number of days to maturity of each holding is determined in accordance with the provisions of Rule 2a-7 under the Investment Company Act of 1940. |
The accompanying notes are an integral part of the financial statements.
5 |
Heritage Cash Trust—Money Market Fund
Understanding Your Fund’s Expenses
(unaudited)
Understanding Your Fund’s Expenses
As a mutual fund investor, you pay two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; and exchange fees; and (2) ongoing costs, such as management fees; distribution (12b-1) fees; and other expenses. Using the tables below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect one-time transaction expenses, such as sales charges (loads) and redemption fees. Therefore, if these transactional costs were included, your costs would have been higher. For more information, see your Fund’s prospectus or contact your financial advisor.
Review Your Fund’s Actual Expenses
The table below shows the actual expenses you would have paid on a $1,000 investment in Heritage Cash Trust—Money Market Fund on September 1, 2005 and held through February 28, 2006. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns after ongoing expenses. This table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Actual | Beginning September 1, 2005 | Ending February 28, 2006 | Expenses Paid During Period* | ||||||
Class A | $ | 1,000.00 | $ | 1,016.73 | $ | 3.65 | |||
Class B | $ | 1,000.00 | $ | 1,016.73 | $ | 3.65 | |||
Class C | $ | 1,000.00 | $ | 1,016.73 | $ | 3.65 |
Hypothetical Example for Comparison Purposes
All mutual funds now follow guidelines to assist shareholders in comparing expenses between different funds. Per these guidelines, the table below shows your Fund’s expenses based on a $1,000 investment and assuming for the period a hypothetical 5% rate of return before ongoing expenses, which is not the Fund’s actual return. Please note that you should not use this information to estimate your actual ending account balance and expenses paid during the period. You can use this information to compare the ongoing expenses (but not transaction expenses or total costs) of investing in the Fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison.
Hypothetical (5% return before expenses) | Beginning September 1, 2005 | Ending February 28, 2006 | Expenses Paid During Period* | ||||||
Class A | $ | 1,000.00 | $ | 1,021.17 | $ | 3.66 | |||
Class B | $ | 1,000.00 | $ | 1,021.17 | $ | 3.66 | |||
Class C | $ | 1,000.00 | $ | 1,021.17 | $ | 3.66 |
* | Expenses are calculated using the Fund’s annualized expense ratio of 0.73% for Class A, Class B and Class C shares, multiplied by the average account value for the period, then multiplying the result by the actual number of days in the period (181); and then dividing that result by the actual number of days in the fiscal year (365). |
The accompanying notes are an integral part of the financial statements.
6
Heritage Cash Trust—Money Market Fund
Statement of Operations
For the Six-Month Period Ended February 28, 2006
(unaudited)
Investment Income: | ||||||
Income: | ||||||
Interest | $ | 105,338,777 | ||||
Expenses: | ||||||
Management fee | $ | 10,574,843 | ||||
Distribution fee (Class A) | 3,859,996 | |||||
Distribution fee (Class B) | 1,929 | |||||
Distribution fee (Class C) | 1,880 | |||||
Shareholder servicing fees | 3,778,593 | |||||
Registration fees and expenses | 140,053 | |||||
Custodian fee | 133,380 | |||||
Reports to shareholders | 130,345 | |||||
Federal registration expense | 56,663 | |||||
Professional fees | 46,377 | |||||
Fund accounting fee | 42,414 | |||||
Insurance | 37,051 | |||||
Trustees’ fees and expenses | 11,701 | |||||
Other | 5,920 | |||||
Total expenses | 18,821,145 | |||||
Net investment income from operations | $ | 86,517,632 | ||||
Statements of Changes in Net Assets
For the Six-Month Period Ended February 28, 2006 (unaudited) | For the Fiscal Year Ended August 31, 2005 | |||||||
Increase (decrease) in net assets: | ||||||||
Operations: | ||||||||
Net investment income from operations | $ | 86,517,632 | $ | 92,701,142 | ||||
Distributions to shareholders from: | ||||||||
Net investment income Class A shares, ($0.017 and $0.018 per share, respectively) | (86,432,882 | ) | (92,594,036 | ) | ||||
Net investment income Class B shares, ($0.017 and $0.018 per share, respectively) | (42,861 | ) | (55,852 | ) | ||||
Net investment income Class C shares, ($0.017 and $0.018 per share, respectively) | (41,889 | ) | (51,254 | ) | ||||
Net distributions to shareholders | (86,517,632 | ) | (92,701,142 | ) | ||||
Increase (decrease) in net assets from Fund share transactions | 529,561,808 | (145,906,301 | ) | |||||
Increase (decrease) in net assets | 529,561,808 | (145,906,301 | ) | |||||
Net assets, beginning of period | 4,964,870,450 | 5,110,776,751 | ||||||
Net assets, end of period | $ | 5,494,432,258 | $ | 4,964,870,450 | ||||
The accompanying notes are an integral part of the financial statements.
7 |
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 Six- February 28, (unaudited) | For the Fiscal Years Ended August 31 | |||||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||||||
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) | 0.017 | 0.018 | 0.004 | 0.007 | 0.015 | 0.048 | ||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||
Dividends from net investment income and net realized gains (a) | (0.017 | ) | (0.018 | ) | (0.004 | ) | (0.007 | ) | (0.015 | ) | (0.048 | ) | ||||||||||||
Net asset value, end of period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | ||||||||||||
Total Return (%) | 1.67 | (b) | 1.84 | 0.42 | 0.66 | 1.53 | 4.87 | |||||||||||||||||
Ratios (%)/ Supplemental Data: | ||||||||||||||||||||||||
Operating expenses, net, to average daily net assets | 0.73 | (c) | 0.71 | 0.70 | 0.70 | 0.70 | 0.72 | |||||||||||||||||
Net investment income to average daily net assets | 3.36 | (c) | 1.82 | 0.42 | 0.65 | 1.51 | 4.69 | |||||||||||||||||
Net assets, end of period ($ millions) | 5,490 | 4,960 | 5,103 | 5,479 | 5,106 | 4,757 |
(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
Financial Highlights
(continued)
The following table includes selected data for a share outstanding throughout each period and other performance information derived from the financial statements.
Class B Shares | Class C Shares | |||||||||||||||||||||||||||||||||||||||||||||||
For the Six- February 28, (unaudited) | For the Fiscal Years Ended August 31 | For the Six- February 28, (unaudited) | For the Fiscal Years Ended August 31 | |||||||||||||||||||||||||||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||||||||||||||||||||
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) | 0.017 | 0.018 | 0.004 | 0.007 | 0.015 | 0.048 | 0.017 | 0.018 | 0.004 | 0.007 | 0.015 | 0.048 | ||||||||||||||||||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income and net realized gains (a) | (0.017 | ) | (0.018 | ) | (0.004 | ) | (0.007 | ) | (0.015 | ) | (0.048 | ) | (0.017 | ) | (0.018 | ) | (0.004 | ) | (0.007 | ) | (0.015 | ) | (0.048 | ) | ||||||||||||||||||||||||
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 (%) | 1.67 | (b) | 1.84 | 0.42 | 0.66 | 1.53 | 4.87 | 1.67 | (b) | 1.84 | 0.42 | 0.66 | 1.53 | 4.87 | ||||||||||||||||||||||||||||||||||
Ratios (%)/ Supplemental Data: | ||||||||||||||||||||||||||||||||||||||||||||||||
Operating expenses, net, to average daily net assets | 0.73 | (c) | 0.71 | 0.70 | 0.70 | 0.70 | 0.72 | 0.73 | (c) | 0.71 | 0.70 | 0.70 | 0.70 | 0.72 | ||||||||||||||||||||||||||||||||||
Net investment income to average daily net assets | 3.33 | (c) | 1.77 | 0.42 | 0.67 | 1.52 | 4.40 | 3.34 | (c) | 1.76 | 0.42 | 0.67 | 1.47 | 4.63 | ||||||||||||||||||||||||||||||||||
Net assets, end of period ($ millions) | 2 | 3 | 4 | 5 | 6 | 4 | 2 | 2 | 4 | 6 | 6 | 2 |
(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.
9 |
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 were not available for direct purchase. Class B shares will continue to be available through exchanges and dividend reinvestments 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 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 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 of 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 investments 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 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.
10 |
Heritage Cash Trust—Money Market Fund
Notes to Financial Statements
(unaudited)
(continued)
Other: Investment security transactions are accounted for on a trade date basis. Interest income is recorded on the accrual basis.
In the normal course of business the Fund enters into contracts that contain a variety of representations and warranties, which provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund and/or its affiliates that have not yet occurred. However, based on experience, the Fund expects the risk of loss to be remote.
Note 2: | Fund Shares. At February 28, 2006, 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 28, 2006 at a net asset value of $1.00 per share, were as follows:
Class A | Class B | Class C | |||||||
Shares sold/exchanged | 11,055,377,422 | 412,309 | 1,406,195 | ||||||
Shares issued on reinvestment of distributions | 85,827,614 | 32,571 | 40,418 | ||||||
Shares redeemed | (10,611,002,474 | ) | (1,009,574 | ) | (1,522,673 | ) | |||
Net increase (decrease) | 530,202,562 | (564,694 | ) | (76,060 | ) | ||||
Shares outstanding: | |||||||||
Beginning of period | 4,959,904,524 | 2,632,640 | 2,336,460 | ||||||
End of period | 5,490,107,086 | 2,067,946 | 2,260,400 | ||||||
Transactions in Class A, B and C shares and dollars of the Fund during the fiscal year ended August 31, 2005 at a net asset value of $1.00 per share, were as follows:
Class A | Class B | Class C | |||||||
Shares sold/exchanged | 20,203,620,611 | 666,616 | 3,000,006 | ||||||
Shares issued on reinvestment of distributions | 90,789,522 | 40,688 | 45,966 | ||||||
Shares redeemed | (20,437,276,545 | ) | (1,932,484 | ) | (4,860,681 | ) | |||
Net decrease | (142,866,412 | ) | (1,225,180 | ) | (1,814,709 | ) | |||
Shares outstanding: | |||||||||
Beginning of fiscal year | 5,102,770,936 | 3,857,820 | 4,151,169 | ||||||
End of fiscal year | 4,959,904,524 | 2,632,640 | 2,336,460 | ||||||
11 |
Heritage Cash Trust—Money Market Fund
Notes to Financial Statements
(unaudited)
(continued)
Note 3: | 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”), Heritage manages, supervises and conducts the business and administrative affairs of the Fund. For these services, the Fund agreed to pay to the Manager an annual fee as a percentage of the Fund’s average daily net assets, computed daily based on the schedule below and payable monthly. The amount payable to the Manager as of February 28, 2006, was $1,736,842. |
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 $2.5 billion | 0.360 | % | |
Next $2.5 billion | 0.350 | % | |
Greater than $10 billion | 0.340 | % |
Pursuant to a plan adopted in accordance with Rule 12b-1 under the Investment Company Act of 1940, as amended, the Fund is authorized to pay Raymond James & Associates, Inc. (the “Distributor” or “RJA”) a fee of 0.15% of the average daily net assets. Such fee is accrued daily and payable monthly. The amount payable to the Distributor as of February 28, 2006 was $629,837. The Manager, Distributor, Fund Accountant and Shareholder Servicing Agent are all wholly-owned subsidiaries of Raymond James Financial, Inc. (“RJF”).
The Distributor has advised the Fund that it generated $30,283 and $1,246 in contingent deferred sales charges for Class B and Class C shares, respectively during the six-month period ended February 28, 2006. From these fees, the Distributor paid sales commissions to sales persons and incurred other distribution costs.
The Manager is also the Shareholder Servicing Agent and Fund Accountant for the Fund. The Manager charged $3,778,593 for Shareholder Servicing fees and $42,414 for Fund Accounting services, of which $1,205,770 and $8,200 were payable as of February 28, 2006, respectively. For providing Shareholder Servicing, the Manager receives payment from the Fund at a fixed fee per account plus any out-of-pocket expenses. For providing Fund Accounting Services, the Manager receives payment from the Fund at a fixed fee per fund, a fixed fee per class and any out-of-pocket expenses.
12 |
Heritage Cash Trust—Money Market Fund
Notes to Financial Statements
(unaudited)
(continued)
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, all of which are investment companies that are also advised by the Manager of the Trust (collectively referred to as the “Heritage Mutual Funds”). Each Trustee of the Heritage Mutual Funds who is not an employee of the Manager or employee of an affiliate of the Manager receives an annual fee of $23,000 and an additional fee of $3,000 for each combined quarterly meeting of the Heritage Mutual Funds attended. In addition, each independent Trustee that serves on the Audit Committee or Compliance Committee will receive $1,000 for attendance at their respective meeting (in person or telephonic). In addition to meeting fees, the Lead Independent Trustee will receive an annual retainer of $2,500, the Compliance Committee Chair will receive an annual retainer of $3,000, and the Audit Committee Chair will receive an annual retainer of $3,500. Trustees’ fees and expenses are paid equally by each portfolio in the Heritage Mutual Funds.
Note 4: | 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 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, 2005, there were no reclassifications arising from permanent tax differences. As of August 31, 2005, the Fund had net tax basis capital loss carryforwards in the aggregate of $3,174. This capital loss carryforward may be applied to any net taxable capital gain until the expiration date of 2012. All dividends paid by the Fund from net investment income are deemed to be ordinary income for Federal income tax purposes. |
Heritage Cash Trust—Money Market Fund
Additional Information
(unaudited)
Beginning with the Fund’s fiscal quarter ended November 30, 2004, the Fund began filing its complete schedule of portfolio holdings with the Securities Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q; the Fund’s Form N-Q filings are available on the SEC’s website at www.sec.gov; and the Fund’s Form N-Q filings may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
13 |
Heritage
Cash
Trust
Municipal Money Market Fund
Semiannual Report
(Unaudited) and Investment Performance Review for the Six-Month Period Ended February 28, 2006
March 15, 2006
Dear Fellow Shareholders:
I am pleased 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 28, 2006. Since the prior reporting period, the economy has continued to grow at a healthy pace. In order to prevent the economy from overheating and developing inflationary pressures, the Federal Reserve Bank has continued to increase the target federal funds rate at a measured pace of 0.25% at each of their Federal Open Market Committee meetings held during the period resulting in a rate increase during the reporting period from 3.50% to 4.50%. The Federal Reserve Bank continued to reiterate their balanced view on growth and inflation. Short-term tax-exempt interest rates increased along with federal funds rate. As a result, the Fund’s seven-day current yield(a) increased from 1.85% on August 31, 2005 to 2.54% on February 28, 2006. 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 the Fund’s website at www.HeritageFunds.com.
As of February 28, 2006, the Fund’s investment portfolio was comprised of approximately 77% tax-exempt floating rate notes, 2% fixed rate notes, 1% short-term puts, and 20% commercial paper. The large composition of floating rate notes provide the Fund with ample liquidity. The investments in commercial paper provide more relative value than fixed rate notes and bonds. The entire portfolio is invested in highly rated tier-one securities. These high quality investments satisfied the requirements set forth by Standard and Poor’s Rating Group to maintain the Fund’s AAAm rating(b). Ratings are subject to change and do not remove market risk from your investment.
On behalf of Heritage, I thank you for your continued investment in the Heritage Cash Trust–Municipal Money Market Fund. If you have any questions or comments, please contact your financial advisor or Heritage at (800) 421-4184.
Sincerely,
Stephen G. Hill
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. Please consider the investment objectives, risks, charges, and expenses of any fund carefully before investing. Contact Heritage at (800) 421-4184 or your financial advisor for a prospectus, which contains this and other important information about the Fund. Read the prospectus carefully before you invest.
(b) 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 of the Fund.
1 |
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 28, 2006
(unaudited)
Principal Amount | Value | ||||
Notes, Bonds & Variable Rate Demand Notes—79.6%(a)(b) | |||||
Alabama—1.5% | |||||
$10,550,000 | Alabama Housing Finance Authority, 3.25%(c) | $ | 10,550,000 | ||
6,400,000 | Stevenson Industrial Development | 6,400,000 | |||
16,950,000 | |||||
Arizona—0.9% | |||||
3,400,000 | Maricopa County Industrial Development Authority, 3.22%(c) | 3,400,000 | |||
6,750,000 | Maricopa County Industrial Development | 6,750,000 | |||
10,150,000 | |||||
Arkansas—1.1% | |||||
6,000,000 | Arkansas Development Finance | 6,000,000 |
Principal Amount | Value | |||
Notes, Bonds & Variable Rate Demand Notes (continued) | ||||
Arkansas (continued) | ||||
6,400,000 | Pulaski County, 3.26%(c) | 6,400,000 | ||
12,400,000 | ||||
Colorado—2.2% | ||||
14,160,000 | Colorado Housing & Finance Authority, 3.24%(c) | 14,160,000 | ||
8,300,000 | Colorado Housing & Finance | 8,300,000 | ||
2,300,000 | Traer Creek Metropolitan | 2,300,000 | ||
24,760,000 | ||||
Connecticut—0.6% | ||||
5,300,000 | Connecticut Housing Finance | 5,300,000 |
The accompanying notes are an integral part of the financial statements.
2 |
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 28, 2006
(unaudited)
(continued)
Principal Amount | Value | ||||
Notes, Bonds & Variable Rate Demand Notes (continued) | |||||
Connecticut (continued) | |||||
$ 1,500,000 | Connecticut State Health & Education Facility Authority, 3.16%(c) | $ | 1,500,000 | ||
6,800,000 | |||||
District Of Columbia—0.7% | |||||
8,130,000 | Metropolitan Washington Airport | 8,130,000 | |||
Florida—2.1% | |||||
5,905,000 | Hillsborough County Housing Finance | 5,905,000 | |||
13,000,000 | Orlando & Orange County Expressway | 13,000,000 | |||
4,400,000 | Palm Beach County School | 4,400,000 | |||
23,305,000 | |||||
Principal Amount | Value | |||
Notes, Bonds & Variable Rate Demand Notes (continued) | ||||
Georgia—4.4% | ||||
3,200,000 | Bibb County Development | 3,200,000 | ||
1,400,000 | Clayton County Development | 1,400,000 | ||
3,900,000 | DeKalb County Housing | 3,900,000 | ||
12,525,000 | East Point Housing Authority, 3.29%(c) | 12,525,000 | ||
16,000,000 | Fulton County Development | 16,000,000 | ||
2,500,000 | Gainesville & Hall County Development Authority, 3.30%(c) | 2,500,000 |
The accompanying notes are an integral part of the financial statements.
3
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 28, 2006
(unaudited)
(continued)
Principal Amount | Value | ||||
Notes, Bonds & Variable Rate Demand Notes (continued) | |||||
Georgia (continued) | |||||
$ 1,700,000 | Rockmart Development | $ | 1,700,000 | ||
8,100,000 | Roswell Housing Authority, 3.25%(c) | 8,100,000 | |||
49,325,000 | |||||
Illinois—6.1% | |||||
4,405,000 | Chicago Industrial Development | 4,405,000 | |||
2,895,000 | Chicago, 3.28%(c) | 2,895,000 | |||
2,935,000 | Chicago, 3.33%(c) | 2,935,000 | |||
2,900,000 | Hennepin, 3.28%(c) | 2,900,000 |
Principal Amount | Value | |||
Notes, Bonds & Variable Rate Demand Notes (continued) | ||||
Illinois (continued) | ||||
2,000,000 | Illinois Development Finance | 2,000,000 | ||
2,200,000 | Illinois Development Finance | 2,200,000 | ||
2,690,000 | Illinois Development Finance | 2,690,000 | ||
860,000 | Illinois Development Finance | 860,000 | ||
3,025,000 | Illinois Development Finance | 3,025,000 |
The accompanying notes are an integral part of the financial statements.
4
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 28, 2006
(unaudited)
(continued)
Principal Amount | Value | ||||
Notes, Bonds & Variable Rate Demand Notes (continued) | |||||
Illinois (continued) | |||||
$ 1,050,000 | Illinois Development Finance | $ | 1,050,000 | ||
3,455,000 | Illinois Development Finance | 3,455,000 | |||
600,000 | Illinois Development Finance | 600,000 | |||
3,380,000 | Illinois Development Finance | 3,380,000 | |||
10,000,000 | Illinois Development Finance | 10,000,000 | |||
6,715,000 | Illinois Housing Development | 6,715,000 |
Principal Amount | Value | |||
Notes, Bonds & Variable Rate Demand Notes (continued) | ||||
Illinois (continued) | ||||
3,930,000 | Illinois Housing Development | 3,930,000 | ||
2,400,000 | Illinois Student Assistance | 2,400,000 | ||
4,310,000 | Lake County, 3.23%(c) | 4,310,000 | ||
4,320,000 | Lake County, 3.26%(c) | 4,320,000 | ||
2,065,000 | Rock Island County Metropolitan Airport Authority, 3.24%(c) | 2,065,000 | ||
1,820,000 | Wheeling, 3.37%(c) | 1,820,000 | ||
1,100,000 | Will County, 3.04%(c) | 1,100,000 | ||
69,055,000 | ||||
The accompanying notes are an integral part of the financial statements.
5
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 28, 2006
(unaudited)
(continued)
Principal Amount | Value | ||||
Notes, Bonds & Variable Rate Demand Notes (continued) | |||||
Indiana—1.7% | |||||
$ 2,550,000 | Elkhart County, 3.25%(c) | $ | 2,550,000 | ||
2,500,000 | Gibson County, 3.25%(c) | 2,500,000 | |||
3,000,000 | Gibson County, 3.25%(c) | 3,000,000 | |||
1,000,000 | Gibson County, 3.25%(c) | 1,000,000 | |||
4,000,000 | Gibson County, 3.25%(c) | 4,000,000 | |||
3,000,000 | Gibson County, 3.25%(c) | 3,000,000 | |||
2,855,000 | Valparaiso, 3.24%(c) | 2,855,000 | |||
18,905,000 | |||||
Iowa—1.0% | |||||
7,500,000 | Iowa Higher Education Loan | 7,500,000 |
Principal Amount | Value | |||
Notes, Bonds & Variable Rate Demand Notes (continued) | ||||
Iowa (continued) | ||||
3,400,000 | Orange City, 3.28%(c) | 3,400,000 | ||
10,900,000 | ||||
Kansas—1.3% | ||||
6,000,000 | Dodge City, 3.44%(c) | 6,000,000 | ||
5,850,000 | Liberal, 3.44%(c) | 5,850,000 | ||
2,700,000 | Shawnee Industrial Development | 2,700,000 | ||
14,550,000 | ||||
Kentucky—1.0% | ||||
11,240,000 | Middletown, 3.22%(c) | 11,240,000 | ||
The accompanying notes are an integral part of the financial statements.
6
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 28, 2006
(unaudited)
(continued)
Principal Amount | Value | ||||
Notes, Bonds & Variable Rate Demand Notes (continued) | |||||
Louisiana—2.3% | |||||
$ 3,470,000 | Caddo-Bossier Parishes Port | $ | 3,470,000 | ||
1,500,000 | Calcasieu Parish Industrial Development | 1,500,000 | |||
2,320,000 | DeRidder Industrial Development | 2,320,000 | |||
7,655,000 | St. Charles Parish, 3.04%(c) | 7,655,000 | |||
11,250,000 | St. Charles Parish, 3.04%(c) | 11,250,000 | |||
26,195,000 | |||||
Maine—0.5% | |||||
5,675,000 | Maine Finance Authority, 3.24%(c) Industrial Development Revenue Bond Jackson Laboratory Project, | 5,675,000 | |||
Principal Amount | Value | |||
Notes, Bonds & Variable Rate Demand Notes (continued) | ||||
Maryland—0.5% | ||||
6,000,000 | Montgomery County, 3.19%(c) | 6,000,000 | ||
Massachusetts—2.8% | ||||
15,100,000 | Massachusetts Bay Transportation | 15,100,000 | ||
10,400,000 | Massachusetts Development Finance | 10,400,000 | ||
6,260,000 | Massachusetts Industrial Finance | 6,260,000 | ||
31,760,000 | ||||
Michigan—0.4% | ||||
5,000,000 | Michigan Municipal Bond Authority, 2.92% Revenue Notes | 5,024,426 | ||
Minnesota—2.6% | ||||
5,000,000 | Dakota County Community Development Agency, 3.28%(c) | 5,000,000 |
The accompanying notes are an integral part of the financial statements.
7
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 28, 2006
(unaudited)
(continued)
Principal Amount | Value | ||||
Notes, Bonds & Variable Rate Demand Notes (continued) | |||||
Minnesota (continued) | |||||
$ 2,655,000 | Dakota County Community Development Agency, 3.10%(c) | $ | 2,655,000 | ||
3,800,000 | Plymouth Housing Authority, 3.23%(c) Multi Family Housing Revenue Bond | 3,800,000 | |||
6,000,000 | St. Anthony, 3.28%(c) | 6,000,000 | |||
5,000,000 | St. Paul & Ramsey County Housing & Redevelopment Authority, 3.28%(c) Multi Family Housing Revenue Bond | 5,000,000 | |||
3,000,000 | St. Paul Housing & Redevelopment | 3,000,000 | |||
4,000,000 | St. Paul Port Authority, 3.25%(c) | 4,000,000 | |||
29,455,000 | |||||
Principal Amount | Value | |||
Notes, Bonds & Variable Rate Demand Notes (continued) | ||||
Mississippi—1.1% | ||||
3,000,000 | Mississippi Business Finance | 3,000,000 | ||
9,800,000 | Mississippi Home Corporation, 3.32%(c) | 9,800,000 | ||
12,800,000 | ||||
Nevada—2.0% | ||||
5,350,000 | Clark County, 3.05%(c) | 5,350,000 | ||
13,500,000 | Director of the State of Nevada Department | 13,500,000 | ||
1,790,000 | Nevada Housing Finance Agency, 3.22%(c) | 1,790,000 | ||
2,000,000 | Nevada Housing Finance Agency, 3.22%(c) | 2,000,000 | ||
22,640,000 | ||||
The accompanying notes are an integral part of the financial statements.
8
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 28, 2006
(unaudited)
(continued)
Principal Amount | Value | ||||
Notes, Bonds & Variable Rate Demand Notes (continued) | |||||
New Hampshire—0.9% | |||||
$ 5,300,000 | New Hampshire Health & Education | $ | 5,300,000 | ||
5,000,000 | New Hampshire Health & Education | 5,000,000 | |||
10,300,000 | |||||
New Jersey—0.6% | |||||
6,200,000 | New Jersey Economic Development | 6,200,000 | |||
New Mexico—2.1% | |||||
11,600,000 | New Mexico Hospital Equipment Loan Council, 3.20%(c) | 11,600,000 | |||
12,600,000 | New Mexico Hospital Equipment Loan | 12,600,000 | |||
24,200,000 | |||||
Principal Amount | Value | |||
Notes, Bonds & Variable Rate Demand Notes (continued) | ||||
New York—11.0% | ||||
12,100,000 | City of New York, 3.20%(c) | 12,100,000 | ||
11,000,000 | City of New York, GO, 3.16%(c) | 11,000,000 | ||
18,000,000 | City of New York, GO, 3.14%(c) | 18,000,000 | ||
15,000,000 | New York Housing Finance | 15,000,000 | ||
18,000,000 | New York Local Government Assistance Corporation, 3.19%(c) | 18,000,000 | ||
25,200,000 | New York Local Government Assistance Corporation, 3.12%(c) | 25,200,000 | ||
25,000,000 | Triborough Bridge & Tunnel | 25,000,000 | ||
124,300,000 | ||||
North Carolina—1.1% | ||||
12,000,000 | North Carolina Educational Facilities Finance Agency, 3.17%(c) | 12,000,000 | ||
The accompanying notes are an integral part of the financial statements.
9
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 28, 2006
(unaudited)
(continued)
Principal Amount | Value | ||||
Notes, Bonds & Variable Rate Demand Notes (continued) | |||||
North Dakota—1.0% | |||||
$11,000,000 | Richland County, 3.39%(c) | $ | 11,000,000 | ||
Ohio—5.2% | |||||
8,525,000 | Akron Bath Copley Joint Township Hospital District, 3.23%(c) | 8,525,000 | |||
10,165,000 | Butler County Health Facility, 3.06%(c) Hospital Revenue Bond | 10,165,000 | |||
11,800,000 | Cleveland Airport System, 3.20%(c) | 11,800,000 | |||
3,000,000 | Hamilton County, 3.20%(c) | 3,000,000 | |||
4,440,000 | Ohio State Higher Education | 4,440,000 |
Principal Amount | Value | |||
Notes, Bonds & Variable Rate Demand Notes (continued) | ||||
Ohio (continued) | ||||
5,200,000 | Ohio Water Development | 5,200,000 | ||
3,750,000 | Ohio Water Development | 3,750,000 | ||
11,800,000 | Westlake Health Facility, 3.20%(c) | 11,800,000 | ||
58,680,000 | ||||
Oklahoma—0.1% | ||||
1,600,000 | Oklahoma Development Finance | 1,600,000 | ||
Oregon—0.4% | ||||
5,000,000 | Oregon, 3.07% | 5,051,421 | ||
The accompanying notes are an integral part of the financial statements.
10
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 28, 2006
(unaudited)
(continued)
Principal Amount | Value | ||||
Notes, Bonds & Variable Rate Demand Notes (continued) | |||||
Pennsylvania—1.8% | |||||
$ 3,600,000 | Berks County Industrial Development Authority, 3.28%(c) | $ | 3,600,000 | ||
12,300,000 | Montgomery County Higher Education & Health Authority, 3.19%(c) | 12,300,000 | |||
4,000,000 | Montgomery County Industrial Development Authority, 3.24%(c) Pollution Control Revenue Bond | 4,000,000 | |||
19,900,000 | |||||
South Carolina—2.3% | |||||
3,635,000 | Berkeley County, 3.04%(c) | 3,635,000 | |||
3,975,000 | Florence County, 3.05%(c) | 3,975,000 | |||
6,250,000 | Florence County, 3.05%(c) | 6,250,000 |
Principal Amount | Value | |||
Notes, Bonds & Variable Rate Demand Notes (continued) | ||||
South Carolina (continued) | ||||
3,700,000 | South Carolina Economic Development Authority, 3.25%(c) | 3,700,000 | ||
8,000,000 | South Carolina Economic Development Authority, 3.28%(c) | 8,000,000 | ||
25,560,000 | ||||
South Dakota—0.6% | ||||
6,495,000 | South Dakota Housing Development Authority, 3.23%(c) | 6,495,000 | ||
Tennessee—1.3% | ||||
7,000,000 | Lewisburg Industrial Development | 7,000,000 | ||
8,200,000 | Volunteer Student Funding | 8,200,000 | ||
15,200,000 | ||||
The accompanying notes are an integral part of the financial statements.
11
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 28, 2006
(unaudited)
(continued)
Principal Amount | Value | ||||
Notes, Bonds & Variable Rate Demand Notes (continued) | |||||
Texas—4.3% | |||||
$ 4,890,000 | Brazos River Authority, 3.24%(c) | $ | 4,890,000 | ||
3,560,000 | Brazos River Authority, 3.24%(c) | 3,560,000 | |||
3,000,000 | Capital Area Housing Finance | 3,000,000 | |||
6,170,000 | Harris County Housing Finance Corporation, 3.28%(c) | 6,170,000 | |||
2,400,000 | Houston Health Facilities Development Corporation, 3.19%(c) | 2,400,000 | |||
4,000,000 | Mansfield Industrial Development Corporation, 3.22%(c) | 4,000,000 |
Principal Amount | Value | |||
Notes, Bonds & Variable Rate Demand Notes (continued) | ||||
Texas (continued) | ||||
12,800,000 | Tarrant County Housing Finance | 12,800,000 | ||
11,125,000 | Texas, 3.13% | 11,198,198 | ||
48,018,198 | ||||
Virginia—1.4% | ||||
5,000,000 | Harrisonburg Redevelopment & Housing Authority, 3.28%(c) | 5,000,000 | ||
1,800,000 | Norfolk Industrial Development | 1,800,000 | ||
3,700,000 | Virginia Beach Development | 3,700,000 | ||
5,360,000 | Virginia Housing Development | 5,360,000 | ||
15,860,000 | ||||
The accompanying notes are an integral part of the financial statements.
12
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 28, 2006
(unaudited)
(continued)
Principal Amount | Value | ||||
Notes, Bonds & Variable Rate Demand Notes (continued) | |||||
Washington—5.1% | |||||
$2,200,000 | Port of Bellingham Industrial Development Corporation, 3.04%(c) | $ | 2,200,000 | ||
5,000,000 | Port of Seattle, 3.25%(c) | 5,000,000 | |||
6,970,000 | Port of Seattle, 3.28%(c) | 6,970,000 | |||
6,000,000 | Port of Vancouver, 3.25%(c) | 6,000,000 | |||
3,590,000 | Washington Economic Development Finance | 3,590,000 | |||
1,705,000 | Washington Housing Finance | 1,705,000 | |||
6,385,000 | Washington Housing Finance | 6,385,000 |
Principal Amount | Value | |||
Notes, Bonds & Variable Rate Demand Notes (continued) | ||||
Washington (continued) | ||||
6,240,000 | Washington Housing Finance | 6,240,000 | ||
4,050,000 | Washington Housing Finance | 4,050,000 | ||
3,670,000 | Washington Housing Finance | 3,670,000 | ||
4,220,000 | Washington Housing Finance | 4,220,000 | ||
2,940,000 | Washington Housing Finance | 2,940,000 | ||
4,500,000 | Washington Housing Finance | 4,500,000 | ||
57,470,000 | ||||
The accompanying notes are an integral part of the financial statements.
13
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 28, 2006
(unaudited)
(continued)
Principal Amount | Value | ||||
Notes, Bonds & Variable Rate Demand Notes (continued) | |||||
Wisconsin—3.6% | |||||
$25,600,000 | Wisconsin Health & Educational | $ | 25,600,000 | ||
9,920,000 | Wisconsin Housing & Economic Development Authority, 3.20%(c) Home Ownership Revenue Bond | 9,920,000 | |||
4,585,000 | Wisconsin Housing & Economic Development Authority, 3.24%(c) Home Ownership Revenue Bond | 4,585,000 | |||
40,105,000 | |||||
Total Notes, Bonds & Variable Rate Demand Notes (cost $897,959,046) | 897,959,045 | ||||
Commercial Paper—20.4%(a) | |||||
Florida—1.2% | |||||
13,800,000 | Indian River, 3.18% | 13,800,000 | |||
Kentucky—3.8% | |||||
20,000,000 | Pendleton County, 3.00% | 20,000,000 | |||
23,000,000 | Pendleton County, 3.16% | 23,000,000 | |||
43,000,000 | |||||
Principal Amount | Value | |||
Commercial Paper (continued) | ||||
Massachusetts—2.9% | ||||
3,000,000 | Massachusetts Development Finance | 3,000,000 | ||
6,630,000 | Massachusetts Health & Education | 6,630,000 | ||
13,600,000 | Massachusetts Health & Education | 13,600,000 | ||
4,193,000 | Massachusetts Health & Education | 4,193,000 | ||
5,000,000 | Massachusetts Health & Education | 5,000,000 | ||
32,423,000 | ||||
Michigan—0.4% | ||||
3,975,000 | University of Michigan Board of | 3,975,000 | ||
New York—1.3% | ||||
14,100,000 | City of New York, 3.12% | 14,100,000 | ||
South Carolina—0.9% | ||||
10,500,000 | South Carolina Public Service | 10,500,000 | ||
The accompanying notes are an integral part of the financial statements.
14
Heritage Cash Trust—Municipal Money Market Fund
Statement of Net Assets
February 28, 2006
(unaudited)
(continued)
Principal Amount | Value | ||||
Commercial Paper (continued) | |||||
Texas—2.5% | |||||
$ 7,200,000 | Texas Public Finance Authority, 3.15% Revenue Notes Series 03, 03/07/06 | $ | 7,200,000 | ||
8,500,000 | Texas Public Finance Authority, GO, 3.16% Series 02B, 04/03/06 | 8,500,000 | |||
11,893,000 | University of Texas Board of | 11,893,000 | |||
27,593,000 | |||||
Washington—1.3% | |||||
5,000,000 | Port of Seattle, 3.18% | 5,000,000 | |||
9,260,000 | Port of Seattle, 3.23% | 9,260,000 | |||
14,260,000 | |||||
West Virginia—3.8% | |||||
10,000,000 | West Virginia Public Energy | 10,000,000 | |||
20,500,000 | West Virginia Public Energy | 20,500,000 | |||
11,800,000 | West Virginia Public Energy | 11,800,000 | |||
42,300,000 | |||||
Principal Amount | Value | ||||
Commercial Paper (continued) | |||||
Wisconsin—2.3% | |||||
6,000,000 | Wisconsin, 3.11% Transportation Revenue Bond Series 97A, 3/8/2006 | 6,000,000 | |||
19,500,000 | Wisconsin, 3.14% Transportation Revenue Bond Series 97A, 4/6/2006 | 19,500,000 | |||
25,500,000 | |||||
Total Commercial Paper (cost $227,451,000) | 227,451,000 | ||||
Total Investments (cost $1,125,410,045) (d), 100.0%(a) . | 1,125,410,045 | ||||
Other Assets and Liabilities, net, 0.0%(a) | 507,810 | ||||
Net Assets, (net asset value, offering and redemption price of $1.00 per share; 1,125,972,438 shares outstanding), consisting of paid-in-capital, 100% | $ | 1,125,917,855 | |||
(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. |
AMBAC | — American Municipal Bond Assurance Corporation |
AMT | — Securities subject to Alternative Minimum Tax |
BPA | — Bond Purchase Agreement |
FSA | — Financial Security Assurance Holdings Ltd. |
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.
15
Heritage Cash Trust—Municipal Money Market Fund
Investment Portfolio Allocation
(unaudited)
Investment Portfolio Composition(a) as of February 28, 2006 (% of total investments)
(a) | See the Fund’s prospectus for a description of the principal types of securities in which the Fund invests. |
Beginning with the Fund’s fiscal quarter ended November 30, 2004, the Fund began filing its complete schedule of portfolio holdings with the Securities Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q; the Fund’s Form N-Q filings are available on the SEC’s website at www.sec.gov; and the Fund’s Form N-Q filings may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
The accompanying notes are an integral part of the financial statements.
16
Heritage Cash Trust—Municipal Money Market Fund
Understanding Your Fund’s Expenses
(unaudited)
Understanding Your Fund’s Expenses
As a mutual fund investor, you pay two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; and exchange fees; and (2) ongoing costs, such as management fees; distribution (12b-1) fees; and other expenses. Using the tables below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect one-time transaction expenses, such as sales charges (loads) and redemption fees. Therefore, if these transactional costs were included, your costs would have been higher. For more information, see your Fund’s prospectus or contact your financial advisor.
Review Your Fund’s Actual Expenses
The table below shows the actual expenses you would have paid on a $1,000 investment in Heritage Cash Trust—Municipal Money Market Fund on September 1, 2005 and held through February 28, 2006. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns after ongoing expenses. This table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Actual | Beginning Account Value September 1, 2005 | Ending Account Value February 28, 2006 | Expenses Paid During Period* | ||||||
Class A | $ | 1,000.00 | $ | 1,011.26 | $ | 3.38 |
Hypothetical Example for Comparison Purposes
All mutual funds now follow guidelines to assist shareholders in comparing expenses between different funds. Per these guidelines, the table below shows your Fund’s expenses based on a $1,000 investment and assuming for the period a hypothetical 5% rate of return before ongoing expenses, which is not the Fund’s actual return. Please note that you should not use this information to estimate your actual ending account balance and expenses paid during this period. You can use this information to compare the ongoing expenses (but not transaction expenses or total costs) of investing in the Fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison.
Hypothetical (5% return before expenses) | Beginning Account Value September 1, 2005 | Ending Account Value February 28, 2006 | Expenses Paid During Period* | ||||||
Class A | $ | 1,000.00 | $ | 1,021.43 | $ | 3.40 |
* | Expenses are calculated using the Fund’s annualized expense ratio of 0.68% multiplied by the average account value for the period, then multiplying the result by the actual number of days in the period (181); and then dividing that result by the actual number of days in the fiscal year (365). |
The accompanying notes are an integral part of the financial statements.
17 |
Heritage Cash Trust—Municipal Money Market Fund
Statement of Operations
For the Six-Month Period Ended February 28, 2006
(unaudited)
Investment Income: | ||||||
Income: | ||||||
Interest | $ | 15,852,554 | ||||
Expenses: | ||||||
Management fee | $ | 2,461,255 | ||||
Distribution fee | 806,746 | |||||
Shareholder servicing fees . | 136,948 | |||||
State qualification expenses | 65,515 | |||||
Fund accounting fee . | 46,501 | |||||
Professional fees | 46,377 | |||||
Reports to shareholders. | 27,150 | |||||
Custodian fee | 18,028 | |||||
Trustees’ fees and expenses . | 11,701 | |||||
Insurance | 13,261 | |||||
Federal registration expense | 7,705 | |||||
Other | 5,919 | |||||
Total expenses | 3,647,106 | |||||
Net investment income from operations | $ | 12,205,448 | ||||
Statements of Changes in Net Assets
For the Six-Month Period Ended February 28, 2006 (unaudited) | For the Fiscal Year Ended August 31, 2005 | |||||||
Increase in net assets: | ||||||||
Operations: | ||||||||
Net investment income from operations. | $ | 12,205,448 | $ | 14,499,088 | ||||
Distributions to shareholders from net investment income ($0.011 and $0.014 per share, respectively) | (12,205,448 | ) | (14,499,088 | ) | ||||
Increase in net assets from Fund share transactions . | 72,006,335 | 45,848,606 | ||||||
Increase in net assets | 72,006,335 | 45,848,606 | ||||||
Net assets, beginning of period | 1,053,911,520 | 1,008,062,914 | ||||||
Net assets, end of period . | $ | 1,125,917,855 | $ | 1,053,911,520 | ||||
The accompanying notes are an integral part of the financial statements.
18 |
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 | For the Fiscal Years Ended August 31 | |||||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||||||
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) . | 0.011 | 0.014 | 0.004 | 0.006 | 0.010 | 0.029 | ||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||
Dividends from net investment income (a) | (0.011 | ) | (0.014 | ) | (0.004 | ) | (0.006 | ) | (0.010 | ) | (0.029 | ) | ||||||||||||
Net asset value, end of period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | ||||||||||||
Total Return (%) | 1.13 | (b) | 1.40 | 0.39 | 0.61 | 0.98 | 2.97 | |||||||||||||||||
Ratios to average daily net assets (%)/ Supplemental Data | ||||||||||||||||||||||||
Operating expenses, net | 0.68 | (c) | 0.69 | 0.68 | 0.67 | 0.68 | 0.69 | |||||||||||||||||
Net investment income | 2.27 | (c) | 1.40 | 0.40 | 0.59 | 0.96 | 2.90 | |||||||||||||||||
Net assets, end of period ($ millions) | 1,126 | 1,054 | 1,008 | 1,057 | 948 | 913 |
(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.
19 |
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 of 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 investments 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 security transactions are accounted for on a trade date basis. Interest income is recorded on the accrual basis.
In the normal course of business the Fund enters into contracts that contain a variety of representations and warranties, which provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund and/or its affiliates that have not yet occurred. However, based on experience, the Fund expects the risk of loss to be remote.
20
Heritage Cash Trust—Municipal Money Market Fund
Notes to Financial Statements
(unaudited)
(continued)
Note 2: | Fund Shares. At February 28, 2006, 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 28, 2006 and for the fiscal year ended August 31, 2005 at a net asset value of $1.00 per share, were as follows: |
For the Six-Month Period Ended February 28, 2006 (unaudited) | For the Fiscal Year Ended August 31, 2005 | |||||
Shares sold/exchanged | 2,862,767,427 | 4,790,031,818 | ||||
Shares issued on reinvestment of distributions | 12,066,611 | 14,211,230 | ||||
Shares redeemed | (2,802,827,703 | ) | (4,758,394,442 | ) | ||
Net increase | 72,006,335 | 45,848,606 | ||||
Shares outstanding: | ||||||
Beginning of period | 1,053,966,103 | 1,008,117,497 | ||||
End of period | 1,125,972,438 | 1,053,966,103 | ||||
Note 3: | 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 agreed 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 $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 28, 2006 was $398,891. 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, 2006. No fees were waived and no expenses were reimbursed for the six-month period ended February 28, 2006.
21 |
Heritage Cash Trust—Municipal Money Market Fund
Notes to Financial Statements
(unaudited)
(continued)
The Manager entered into a subadvisory agreement with AllianceBernstein L.P. (formerly known as Alliance Capital Management L.P.) to provide investment advice, portfolio management services (including placement of brokerage orders) and certain compliance and other services for an annualized fee payable by the Manager.
Pursuant to a plan adopted in accordance with Rule 12b-1 under the Investment Company Act of 1940, as amended, the Fund is authorized to pay Raymond James & Associates, Inc. (the “Distributor” or “RJA”) a fee of 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 28, 2006 was $131,605. The Manager, Distributor, Fund Accountant and Shareholder Servicing Agent are all wholly owned subsidiaries of Raymond James Financial, Inc. (“RJF”).
The Manager is also the Shareholder Servicing Agent and Fund Accountant for the Fund. The Manager charged $136,948 for Shareholder Servicing fees and $46,501 for Fund Accounting services, of which $45,471 and $8,500 were payable as of February 28, 2006, respectively. For providing Shareholder Servicing, the Manager receives payment from the Fund at a fixed fee per account plus any out-of-pocket expenses. For providing Fund Accounting Services, the Manager receives payment from the Fund at a fixed fee per fund, a fixed fee per class and any out-of-pocket expenses.
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, all of which are investment companies that are also advised by the Manager of the Trust (collectively referred to as the “Heritage Mutual Funds”). Each Trustee of the Heritage Mutual Funds who is not an employee of the Manager or employee of an affiliate of the Manager received an annual fee of $23,000 and an additional fee of $3,000 for each combined quarterly meeting of the Heritage Mutual Funds attended. In addition, each independent Trustee that serves on the Audit Committee or Compliance Committee will receive $1,000 for attendance at their respective meeting (in person or telephonic). In addition to meeting fees, the Lead Independent Trustee will receive an annual retainer of $2,500, the Compliance Committee Chair will receive an annual retainer of $3,000, and the Audit Committee Chair will receive an annual retainer of $3,500. Trustees’ fees and expenses are paid equally by each portfolio in the Heritage Mutual Funds.
Note 4: | 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 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, 2005, there were no reclassifications arising from permanent tax differences. All dividends paid by the Fund for net investment income are exempt from Federal income tax. |
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 |
Included as part of report to shareholders under Item 1.
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-end Management Investment Companies |
Not applicable to the registrant.
Item 8. | Portfolio Managers of Closed-End Management Investment Companies |
Not applicable to the registrant.
Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers |
Not applicable to the registrant.
Item 10. | Submission of Matters to a Vote of Security Holders |
There have been no material changes to the Nominating Committee Charter, which sets forth procedures by which shareholders may recommend nominees to the Trust’s Board of Trustees, since the Trust last provided disclosure in response to this item.
Item 11. | 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 Principal Financial Officer of Heritage Cash Trust have concluded that such disclosure controls and procedures are effective as of April 27, 2006. |
(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 second fiscal quarter that has materially affected or is reasonably likely to materially affect, its internal control over financial reporting. |
Item 12. | 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. | |
(a)(3) | Not applicable to the registrant. | |
(b) | The certification 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 27, 2006
/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 27, 2006
/s/ K.C. Clark |
K.C. Clark |
Executive Vice President and Principal Executive Officer |
Date: April 27, 2006
/s/ Andrea N. Mullins |
Andrea N. Mullins |
Principal Financial Officer and Treasurer |