Heritage Asset Management | Reducing Your Sales Charge on Class A Share Purchases

Reducing Your Sales Charge on Class A Share Purchases

Class A shares are sold with a front-end sales charge. As described in each fund’s prospectus, there are a number of ways in which these sales charges may be reduced or waived.

How Sales Charges are Calculated

You may purchase Class A at the “offering price,” which is equal to the fund’s net asset value plus a front-end sales charge. The amount of that sales charge depends upon the fund you are buying, the amount of the purchase and whether the purchase qualifies for any sales charge reduction or waiver. You can qualify for a lower sales charge rate when the amount of your purchase reaches a certain level, known as a “breakpoint.”

To receive a reduction or waiver in your Class A sales charge, you must advise your financial advisor or Heritage at the time of purchase.

The following table summarizes the sales charge rates:

Your investment	Equity Funds	Income Funds
Less than $25,000	4.75%	3.75%
$25,000-$49,999	4.25%	3.25%
$50,000-$99,999	3.75%	2.75%
$100,000-$249,999	3.25%	2.25%
$250,000-$499,999	2.50%	1.75%
$500,000-$999,999	1.50%	1.25%
$1,000,000 and over	0.00%	0.00%

The sales charge shown above is a percentage of the fund’s public offering price (“POP”), or the price you pay for each share you buy. This price is rounded to the nearest penny. The actual sales charge rate will be shown on your trade confirmation or statement, which—because of rounding—could be more or less than what is shown in the table above. Rounding differences could be greater for small purchases or when a fund’s NAV is higher.

Combining Accounts and Purchases

For purposes of calculating your sales charge, you can combine purchases of Class A, B and C shares for all Heritage mutual funds (except money market funds) in the following account owner relationships:

Accounts owned by you, your spouse or minor children (under the age of 21), including:

Trust or fiduciary accounts in which you, your spouse or minor children are the beneficiary.
Sole proprietor business accounts.

Accounts opened under a single trust agreement, including those with multiple beneficiaries.
Purchases made by a qualified retirement or employee benefit plan of a single employer.
Purchases made by a company, provided the company is not in existence solely for purchasing mutual fund shares.

The value of any concurrent purchases will be combined for determining the sales charge.

Previous Purchases (Right of Accumulation)

You may add the value of previous Class A, B and C purchases (except the money market funds) in your accounts, including those eligible for combining, to calculate the sales charge for subsequent purchases of Class A shares. For this purpose, we will determine the value of your previous purchases based upon the greater of the current account value or the total of all purchases less all redemptions.

Example 1
You previously purchased $20,000 of Class A shares and are making another investment of $10,000. The entire $10,000 purchase will receive the $25,000 breakpoint.

Example 2
You previously purchased $14,000 of Class A shares which are now worth $16,000 and are making another investment of $10,000. The entire $10,000 purchase will receive the $25,000 breakpoint.

These examples are for illustrative purposes only and do not represent any real investment results.

Letter of Intent (LOI)

You may purchase Class A shares of any Heritage mutual fund (except the money market funds) over a 13-month period and receive the same sales charge as if all shares had been purchased at once by signing an LOI. You must request an LOI in writing.

Example
When opening your account, you select the LOI option on your account application, stating your intention to purchase $25,000 of Class A shares over the next 13 months. Along with your application, you include an initial purchase of $15,000. You will pay the sales charge at the $25,000 breakpoint. Your subsequent purchases will also receive this breakpoint.

All prior investments in Class A, B and C shares can be counted toward meeting this investment requirement. Investments made up to 90 calendar days before you adopt your LOI are also eligible for this discount.

We will reserve 5% of your intended purchase amount until you purchase the amount specified in your LOI. If you don’t purchase the intended amount within the 13-month period, we will sell enough shares in your account to cover the applicable sales charge.

Street Name or Omnibus Accounts

Certain broker-dealers or other financial institutions register accounts at the fund as "street name," "omnibus" or "nominee" accounts. In such situations, Heritage receives limited shareholder information which often does not include the shareholder?s identity. As a result, Heritage does not have the information to combine these accounts. For more information on whether a particular institution registers accounts in this manner, please consult your financial advisor.

Waiving Class A Sales Charges

The Class A sales charge may be waived in certain situations, allowing qualified buyers to purchase fund shares with no initial sales charge. Class A shares may be sold at net asset value without any sales charge to:

Heritage, its affiliates, directors, officers and employees.
Current and retired officers and trustees of a Heritage fund.
The subadviser of any Heritage fund and its current directors, officers and employees.
Employees and registered financial advisors of broker-dealers that have selling agreements with the funds’ distributor.
Directors, officers and employees of banks and trust companies that are party to an agency agreement with the funds’ distributor or Heritage.
The immediate family members (spouse, parents, siblings, children—including in-law relationships) of all such persons.
Investors who participate in certain “wrap fee” investment programs or certain retirement programs sponsored by broker-dealers or other service organizations that have entered into service agreements with Heritage. Such programs generally have other fees and expenses, so you should read any materials provided by that organization.
Individual or combined Class A share investments of $1 million or more. With such investments, Heritage may pay the distributor up to 1% of the purchase amount on the first $3 million invested and 0.80% on assets thereafter. If these shares are redeemed within 18 months of purchase, they are subject to a contingent deferred sales charge (CDSC) of 1% and Heritage may retain the Rule 12b-1 fees for 18 months. Any period of time you held shares of a Heritage money market fund are not counted toward the 18-month period. The CDSC may be waived in the following situations:

To make a required minimum distribution from a qualified retirement plan under section 72(t) of the Internal Revenue Code upon reaching age 70 ½ .
To make a redemption resulting from a tax-free return of excess contribution to a qualified employer retirement plan or IRA.
To make a partial or complete redemption following the death or disability of a shareholder, provided the request is made within one year of the death or initial determination of disability.
To make redemptions under a Systematic Withdrawal Plan of up to 12% annually of the balance at the beginning of the plan.
To close out accounts that do not meet the minimum balance requirements.

Reinstatement Privilege

If you sell Class A shares of a Heritage mutual fund (except the money market funds), you may reinvest some or all of those proceeds in Class A shares of a Heritage mutual fund within 90 calendar days without a paying an additional sales charge. You must indicate that you are exercising this privilege when reinvesting your proceeds.