<PAGE>
FORUM FUNDS
SEPTEMBER 30, 1996
SEMI-ANNUAL REPORT
[LOGO]
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
Page
Economic Overview................ 2
FINANCIAL STATEMENTS OF THE FORUM
FUNDS
Schedules of Investments:
Investors Bond Fund............ 4
TaxSaver Bond Fund............. 5
Maine Municipal Bond Fund...... 7
New Hampshire Bond Fund........ 14
Payson Balanced Fund........... 17
Payson Value Fund.............. 19
Statements of Assets and
Liabilities.................... 20
Statements of Operations......... 21
Statements of Changes in Net
Assets......................... 22
Financial Highlights............. 24
Notes to Financial Statements.... 28
FINANCIAL STATEMENTS OF CORE
TRUST (DELAWARE)
Schedule of Investments:
Treasury Portfolio............. 33
Statement of Assets and
Liabilities.................... 34
Statement of Operations.......... 34
Statement of Changes in Net
Assets......................... 35
Notes to Financial Statements.... 36
</TABLE>
i
<PAGE>
FORUM FUNDS
<TABLE>
<S> <C>
INVESTORS BOND FUND SHAREHOLDER INQUIRIES
TAXSAVER BOND FUND Forum Financial Corp.
MAINE MUNICIPAL BOND FUND P.O. Box 446
NEW HAMPSHIRE BOND FUND Portland, Maine 04112
DAILY ASSETS TREASURY FUND 207-879-0001
PAYSON BALANCED FUND
PAYSON VALUE FUND
</TABLE>
[LOGO]
September 30, 1996 SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
Dear Investor:
Forum Funds is pleased to present to our loyal investors this semi-annual
report for the period ended September 30, 1996. We include our reflections and
outlook on the economy, as well as the financial highlights of the period.
Total net assets of the seven Forum Funds in this report now stand at $145
million. During the first six months of our fiscal year, Investors Bond Fund was
our best performing fund relative to its peers, posting a total return of 3.16%
excluding the effect of sales charges. This performance surpassed that of the
Morningstar Corporate General Index at 2.36% for the same period. Our other
fixed income funds, managed with cautious optimism, provided very competitive
returns. Perceiving extremely high valuations in some sectors of the equity
markets, the conservatively managed Payson Funds found their benchmarks more
difficult to meet.
As inflation slowly rises, the economy is stronger than perceived. Interest
rates are gradually moving upward. Bond markets are poised for potential tax
reforms and the impact of our recent national elections. Our bond portfolios are
postured to mitigate these types of political risks, with higher coupons and
average maturities between five and six years.
It has been a year of record highs for all the major stock market indices,
though the advance was interrupted by an early summer selloff that briefly took
the wind out of the market's sails. Initial public offerings have also reached
record numbers, with some companies even choosing not to go public during this
period of unprecedented hype. Corporate earnings remain strong as CEOs work to
manage their companies more efficiently. Seasoned industries continue to
consolidate, while others expand. For the mutual fund industry, despite the
inflows of new money or perhaps because of them, it is a challenging
environment. As you will observe later in this report, all Forum Funds have
produced solid returns for their investors.
Forum Funds are managed with sound, time-tested, long-term investment
philosophies. They are conservatively structured to provide downside protection
when markets decline along with effective potential as the markets move higher.
All of us at Forum Funds take pride in consistently providing you with
superior investment service. Thank you for choosing our family of funds. Please
be sure to discuss your questions and personal thoughts with your local
investment professional or call our Portland, Maine office directly at
207-879-0001.
Very truly yours,
[SIGNATURE]
John Y. Keffer
President
<PAGE>
- --------------------------------------------------------------------------------
ECONOMIC OVERVIEW
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS AND ECONOMIC OVERVIEW
This summer, the Bureau of Labor Statistics released "good news"--239,000
Americans found jobs and average pay increased by nine cents an hour. However,
to many in the investment community, higher wages raised the specter of pricing
pressures and declining earnings. The Dow plunged 114.88 points and trading
halted. Thirty-year U.S. Treasury Bonds plunged, with the yield jumping from
6.93% to 7.18%. In plain English, the price of a bond with a $1000 face value
FELL $27.81 to $851.50, or more than 3%.
Those investors feared declining stock values and potential inflation. Yet,
the possibility of inflation from wage increases is only moderate. Some studies
show that it takes a year of strong and consistent wage increases to budge
inflation even 1/2 point. The economy accelerated with strong home sales and
increasing production by auto makers. Companies found ways to cut costs in order
to keep prices down. Unit labor costs actually decreased due to efficiencies
from better technology, while wages were able to moderately improve.
Even the Federal Reserve Board admitted that fluctuations in economic
indicators have been varied and inconclusive. With the presidential election
just weeks away and only a threat of inflation, the Fed decided in October to
let the economy continue taking care of itself. The slow down in growth has been
offset by an increase in wages. Housing starts remain strong, while home resales
are declining. Unemployment is at its seven year low and the Clinton
administration has just increased the minimum wage. Commodities (certain raw
materials and key agricultural goods) prices peaked at an eight year high in
April, but have since fallen back to about flat for the year. Production is up,
and inventories are strengthening. Consumer confidence remains at the six year
high re-established in July. Even consumers in the hard hit Northeast are
beginning to feel good about the economy with their confidence levels rising
25%.
If the Board increased the 5.25% Fed Funds rate in September, even by 1/4
point, some smaller companies would have been unable to carry out expansion
plans. Despite this, the International Monetary Fund warns of looming inflation
in the new year and offers the suggestion of raising interest rates. Others fear
the same labor shortage that has allowed workers better salaries and enhanced
benefits, will cause prices to rise. And yet, corporate America continues to
consolidate and cut costs, to refine efficiencies, and run their companies even
better. Some workers have been rehired, others retrained. Shareholders continue
to be rewarded with earnings growth and improving values. Stock markets have
reached new highs in a sea of conflicting opinions and opposing points of view.
With more money in the pockets of the employed, retailers and their
suppliers are getting excited about the upcoming holiday shopping season despite
recent sluggish sales all over the country. Some blame it on the weather, others
on credit card debt. The two weeks of Olympic competition also share the blame,
as families stayed at home with their attention focused on the media events
rather than on buying "officially" sponsored products. THEN, the kids went back
to school still wearing last year's clothes. Notwithstanding, shopping centers
and department stores are raising garland and trimming trees because NOW it is
time for these consumers to buy.
Overall, we proceed with cautious optimism. While the economy is strong and
inflation gradually paces upward, this year of political promises and polarized
philosophies provided great distractions for the markets. As the shape of the
economy influences decisions made on the corporate level, these decisions in
return
2 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
ECONOMIC OVERVIEW (CONTINUED)
- --------------------------------------------------------------------------------
contribute to the shape of the economy. Partially fueled by the potential for
lower taxes and less government spending along with the possibility of a
balanced budget, businesses strive to run more profitably and to improve
shareholder values. The increase in capital spending, primarily on computers and
high-tech equipment, has not only lead to greater operating efficiencies but
also to improvements in product quality. Both of which enhance the quality of
our economy and our financial markets.
FORUM FUNDS PERFORMANCE
In an environment of economic and market uncertainties, Forum Funds achieved
competitive total returns. As noted earlier, Investors Bond Fund significantly
exceeded its benchmark index. Taxsaver Bond Fund and Daily Assets Treasury also
rose to the occasion during the last six months with total returns surpassing
their respective benchmarks. Our state specific municipal bond funds found their
index challenging, as they operate within different state tax environments,
regulations, economies and legislative decisions. The equity based Payson Funds
performance is the result of the investment advisor's cautious approach in light
of the significantly higher than normal valuation of the markets.
SUMMARY PERFORMANCE INDICATORS
SIX MONTHS, MARCH 31-SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
FORUM VS.
FUND FORUM BENCHMARK BENCHMARK
- --------------------------------------------------------------------------------- ----------- -------------- ------------
<S> <C> <C> <C>
Investors Bond Fund.............................................................. 3.16% 2.36%(1) 0.80%
TaxSaver Bond Fund............................................................... 2.88% 2.54%(2) 0.34%
Daily Assets Treasury Fund....................................................... 2.39% 2.32%(3) 0.07%
Maine Municipal Bond Fund........................................................ 2.52% 2.54%(2) -0.02%
New Hampshire Bond Fund.......................................................... 2.49% 2.54%(2) -0.05%
Payson Balanced Fund............................................................. 1.99% 4.92%(4) -2.93%
Payson Value Fund................................................................ 3.76% 6.54%(5) -2.78%
(1) Morningstar Corporate General Index
(2) Morningstar Municipal National Index
(3) IBC U.S. Treasury Money Market Fund
Index of 30 funds
(4) Morningstar Balanced Fund Index
(5) Morningstar Growth & Income Index
</TABLE>
RESULTS REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS.
INVESTMENT RETURNS AND PRINCIPAL MAY FLUCTUATE AND SHARES WHEN REDEEMED MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. INFORMATION IN THE ABOVE TABLE DOES NOT
INCLUDE THE EFFECT OF SALES CHARGES. DURING THE PERIOD, CERTAIN FEES AND
EXPENSES WERE WAIVED AND REIMBURSED BY THE MANAGER. WITHOUT THESE WAIVERS, TOTAL
RETURN AND RANKINGS WOULD HAVE BEEN LOWER.
3 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
INVESTORS BOND FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS (14.8%):
$ 891,200 Federal Home Loan Mortgage Corporation,
Series 90 135-A, 8.75%, due 5/15/00... $ 925,146
1,397,366 Federal National Mortgage Association,
Series 1992 214-F, 6.369%, due
10/25/22.............................. 1,396,695
312,009 Merrill Lynch Mortgage Investors, Series
89 E, 9.40%, due 9/15/09.............. 335,126
1,087,351 Resolution Trust Corporation, Series 92
C8 D, 8.835%, due 12/25/23............ 1,079,196
-----------
Total Collateralized Mortgage Obligations
(cost $3,620,810) 3,736,163
-----------
CORPORATE BONDS & NOTES (51.3%):
1,175,000 Beverly Enterprises, Inc., 8.75%, due
12/31/03.............................. 1,098,625
1,000,000 Boise Cascade Corporation, 9.875%, due
2/15/01............................... 1,063,040
500,000 Chase Manhattan Bank, N.A., 9.75%, due
11/1/01............................... 559,876
4,500,000 Citfed Bancorp, Inc., 8.25%, due
9/1/03................................ 4,279,887
750,000 Continental Bank, N.A. (a BankAmerica
subsidiary), 11.25%, due 7/1/01....... 805,312
1,000,000 Dean Witter Discover & Company, 5.79%
variable rate, due 3/2/99............. 1,001,299
450,000 Lehman Brothers Holdings, 6.59% variable
rate, due 1/12/99..................... 449,507
250,000 Leucadia National Corporation, 10.375%,
due 6/15/02........................... 267,639
750,000 Merchants National Corporation (a
National City Corporation subsidiary),
9.875%, due 10/1/99................... 809,854
1,000,000 Nacolah Holding Corporation (a Sammons
Enterprises, Inc. subsidiary), 9.50%,
due 12/1/03........................... 1,056,250
500,000 Paine Webber, Inc., 9.25%, due
12/15/01.............................. 539,375
1,000,000 Salomon Inc., 7.75%,
due 9/22/05........................... 1,002,526
-----------
Total Corporate Bonds & Notes
(cost $12,884,440) 12,933,190
-----------
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
GOVERNMENT AGENCY NOTES (4.0%):
$ 1,000,000 Student Loan Marketing Association,
5.82% variable rate, due 11/1/99...... $ 1,008,639
-----------
Total Government Agency Notes
(cost $998,750) 1,008,639
-----------
GOVERNMENT MORTGAGE BACKED SECURITIES (8.5%):
259,196 Federal Home Loan Mortgage Corporation,
Pool 502128, 9.00%, due 10/1/04....... 270,033
106,005 Government National Mortgage
Association, Pool 345993, 7.00%, due
11/15/23.............................. 102,697
156,683 Government National Mortgage
Association, Pool 346797, 7.00%, due
10/15/23.............................. 151,793
448,067 Government National Mortgage
Association, Pool 371734, 7.00%, due
4/15/24............................... 433,720
803,720 Government National Mortgage
Association, Pool 395851, 7.00%, due
8/15/25............................... 774,938
359,945 Government National Mortgage
Association, Pool 409198, 7.00%, due
8/15/25............................... 347,055
53,351 Government National Mortgage
Association, Pool 417479, 7.00%, due
9/15/25............................... 51,442
-----------
Total Government Mortgage Backed Securities
(cost $2,173,698) 2,131,678
-----------
OTHER HOLDINGS (21.4%):
141,222 1784 U.S. Treasury Money Market Fund.... 141,222
1,268,287 Dreyfus Government Cash Management
Fund.................................. 1,268,287
2,000,000 GTE North, Inc., Discount Commercial
Paper, 5.42% yield, due 10/2/96....... 1,999,703
2,000,000 Massachusetts Electric Company, Discount
Commercial Paper, 5.44% yield, due
10/2/96............................... 1,999,702
-----------
Total Other Holdings
(cost $5,408,914) 5,408,914
-----------
Total Investments (100.0%)
(cost $25,086,612) $25,218,584
-----------
-----------
</TABLE>
See notes to financial statements. 4 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
TAXSAVER BOND FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
MUNICIPAL BONDS (94.9%):
COLORADO (7.3%):
$ 1,000,000 Douglas County, CO, School District #RE
1, General Obligation Bonds, Series A,
8.00%, due 12/15/09................... $ 1,253,480
-----------
FLORIDA (7.3%):
1,285,000 Brevard County, FL, Health Facilities
Revenue Bonds, The Devereux
Foundation, 4.00%, due 11/1/04........ 1,246,475
-----------
ILLINOIS (5.2%):
400,000 Aurora, IL, Multi-Family Housing
Refunding Revenue Bonds, Fox Valley
Village Unit 18D Project, Banque
Paribas LOC, 7.75%, due 9/1/98........ 417,932
465,000 Illinois Development Finance Authority
Revenue Bonds, Community
Rehabilitation Providers Facilities
Acquisition Program, Series 92, 8.25%,
8/1/12................................ 485,600
-----------
903,532
-----------
LOUISIANA (7.8%):
1,000,000 Louisana Public Facilities Authority
Revenue Bonds, Health, Hospital &
Nursing Home Improvements, 11.00%, due
2/1/14................................ 1,337,780
-----------
MARYLAND (.6%):
100,000 Maryland State Community Development
Administration, Multi-Family Housing
Insured Mortgage Loan Revenue Bonds,
Series 85 C, 9.00%, due 5/15/05....... 101,301
-----------
NEW JERSEY (3.2%):
500,000 New Jersey State Educational Facilities
Authority Revenue Bonds, Union County
College, Series B, 7.25%, due
7/1/09................................ 544,775
-----------
NEW YORK (2.1%):
350,000 New York State Thruway Authority,
Service Contract Revenue Bonds, Local
Highway and Bridge Project, 5.75%, due
4/1/06................................ 355,373
-----------
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
OHIO (11.6%):
$ 500,000 Ohio State Air Quality Development
Authority, Pollution Control Refunding
Revenue Bonds, Cleveland Electric Co.
Project, FGIC insured, 8.00%, due
12/1/13............................... $ 591,520
845,000 Shelby County, OH, Hospital Facilities
Revenue Bonds, Wilson Memorial
Hospital, Escrowed to Maturity in U.S.
Governments, 6.40%, due 12/1/03....... 877,820
500,000 Washington County, OH, Hospital
Refunding Revenue Bonds, Shelby
General Hospital, Series 93, 6.875%,
due 7/1/03............................ 526,855
-----------
1,996,195
-----------
PENNSYLVANIA (27.9%):
1,000,000 Allegheny County Hospital Development
Authority, Health Center Revenue
Bonds, Series 90, West Penn Hospital
Foundation, 8.00%, due 1/1/05......... 1,067,650
875,000 Allegheny County Hospital Development
Authority, Health Facilities Revenue
Bonds, Allegheny Valley School
Project, 7.25%, due 2/1/03............ 887,836
500,000 Bucks County, PA, Industrial Development
Authority Revenue Bonds, Personal
Care, Escrowed to Maturity in U.S.
Governments, Series A, 10.00%, due
5/15/19............................... 768,315
665,000 Erie-Western Pennsylvania Port
Authority, Pennsylvania Refunding
Revenue Bonds, 8.25%, due 6/15/00..... 730,696
1,000,000 Hampden, PA, Industrial Development
Authority, Ralston Purina Co. Project,
8.125%, due 1/1/07.................... 1,087,460
110,000 Pennsylvania Higher Education Facilities
Authority Revenue Bonds, Medical
College of Pennsylvania, Series 91 B,
7.25%, due 3/1/05..................... 122,885
</TABLE>
See notes to financial statements. 5 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
TAXSAVER BOND FUND
SCHEDULE OF INVESTMENTS (continued)
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
PENNSYLVANIA, CONTINUED:
$ 125,000 Washington County, PA, Industrial
Development Authority Refunding
Revenue Bonds, Presbyterian Medical
Center, FHA insured, 6.50%,
due 1/15/02........................... $ 135,210
-----------
4,800,052
-----------
PUERTO RICO (6.5%):
500,000 Commonwealth of Puerto Rico Highway &
Transportation Authority Refunding
Revenue Bonds, Series 93 X, 5.00%, due
7/1/02................................ 501,200
565,000 University of Puerto Rico Revenue Bonds,
Series N, MBIA insured, 6.25%, due
6/1/04................................ 619,471
-----------
1,120,671
-----------
TEXAS (4.8%):
750,000 Red River Authority, TX, Pollution
Control Revenue Bonds, Remarketed
8/1/90, Hoechst Celanese Corporation
LOC, 7.50%, due 8/1/12................ 826,448
-----------
VIRGIN ISLANDS (7.6%):
500,000 Virgin Islands Public Finance Authority
Revenue Bonds, Series A, 6.90%, due
10/1/01............................... 533,400
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
VIRGIN ISLANDS, CONTINUED:
$ 705,000 Virgin Islands Public Finance Authority
Revenue Bonds, Government Development
Program, Series A, 7.00%,
due 10/1/04........................... $ 767,491
-----------
1,300,891
-----------
VIRGINIA (3.0%):
500,000 Fairfax County, VA, Economic Development
Authority Revenue Bonds (C-SPAN
Project), Series 91 B, 7.50%, due
6/1/01................................ 519,085
-----------
Total Municipal Bonds
(cost $15,750,865) 16,306,058
-----------
SHORT-TERM HOLDINGS (5.1%):
2,461 1784 Tax Free Money Market Fund......... 2,461
865,259 Fidelity Institutional Tax Exempt Money
Market Fund........................... 865,259
-----------
Total Short-Term Holdings
(cost $867,720) 867,720
-----------
Total Investments (100.0%)
(cost $16,618,585) $17,173,778
-----------
-----------
</TABLE>
See notes to financial statements. 6 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
MAINE MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
MUNICIPAL BONDS (96.3%):
GENERAL OBLIGATION--BOND BANK (7.3%):
$ 100,000 Maine Municipal Bond Bank Refunding
Bonds, Series 92 C, 5.80%, due
11/1/99............................... $ 103,951
80,000 Maine Municipal Bond Bank Sewer & Water
Bonds, SRF Program, Series 91 A,
7.20%, due 11/1/13, Prerefunded (U.S.
Governments) 11/1/01 at 102........... 90,078
50,000 Maine Municipal Bond Bank, Series 88 A,
6.70%, due 11/1/98.................... 52,505
50,000 Maine Municipal Bond Bank, Series 88 A,
7.50%, due 11/1/05, Prerefunded (U.S.
Governments) 11/1/98 at 102........... 54,140
40,000 Maine Municipal Bond Bank, Series 88 B,
7.65%, due 11/1/06, Prerefunded (U.S.
Governments) 11/1/98 at 102.25........ 43,522
50,000 Maine Municipal Bond Bank, Series 88 B,
7.85%, due 11/1/18, Prerefunded (U.S.
Governments) 11/1/98 at 103........... 54,988
60,000 Maine Municipal Bond Bank, Series 88 C,
7.10%, due 11/1/02, Prerefunded (U.S.
Governments) 11/1/98 at 101.25........ 64,081
50,000 Maine Municipal Bond Bank, Series 89 B,
7.40%, due 11/1/14, Prerefunded (U.S.
Governments) 11/1/99 at 102........... 54,723
210,000 Maine Municipal Bond Bank, Series 90 B,
7.20%, due 11/1/07, Prerefunded (U.S.
Governments) 11/1/00 at 102........... 233,480
50,000 Maine Municipal Bond Bank, Series 90 B,
7.20%, due 11/1/11, Prerefunded (U.S.
Governments) 11/1/00 at 102........... 55,591
150,000 Maine Municipal Bond Bank, Series 90 B,
7.20%, due 11/1/15, Prerefunded (U.S.
Governments) 11/1/00 at 102........... 166,771
25,000 Maine Municipal Bond Bank, Series 90 D,
7.375%, due 11/1/10, Prerefunded (U.S.
Governments) 11/1/00 at 102........... 27,897
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
GENERAL OBLIGATION--BOND BANK, CONTINUED:
$ 100,000 Maine Municipal Bond Bank, Series 92 B,
6.65%, due 11/1/07.................... $ 109,959
85,000 Maine Municipal Bond Bank, Series 92 B,
6.75%, due 11/1/12.................... 91,764
150,000 Maine Municipal Bond Bank, Series 92 E,
5.80%, due 11/1/04.................... 158,373
200,000 Maine Municipal Bond Bank, Series 92 E,
5.875%, due 11/1/05................... 210,832
205,000 Maine Municipal Bond Bank, Series 93 C,
5.55%, due 11/1/08.................... 207,189
-----------
1,779,844
-----------
GENERAL OBLIGATION--POLITICAL SUBDIVISIONS (15.0%):
175,000 Bar Harbor, ME, Unlimited Tax General
Obligation Bonds, 6.20%, due 6/1/05... 187,451
75,000 Bar Harbor, ME, Unlimited Tax General
Obligation Bonds, 6.45%, due 6/1/09... 81,005
30,000 Bath, ME, Unlimited Tax General
Obligation Bonds, 7.45%, due
12/1/07............................... 35,594
20,000 Bath, ME, Unlimited Tax General
Obligation Bonds, 7.50%, due
12/1/08............................... 23,858
50,000 Brewer, ME, Unlimited Tax General
Obligation Bonds, Series A, 6.10%, due
1/1/03................................ 53,262
50,000 Brewer, ME, Unlimited Tax General
Obligation Bonds, Series A, 6.10%, due
1/1/04................................ 53,385
50,000 Brewer, ME, Unlimited Tax General
Obligation Bonds, Series A, 6.10%, due
1/1/05................................ 53,416
50,000 Brewer, ME, Unlimited Tax General
Obligation Bonds, Series A, 6.20%, due
1/1/06................................ 53,430
100,000 City of Bangor, ME, Unlimited Tax
General Obligation Bonds, 5.20%, due
11/1/00............................... 102,676
60,000 City of Bangor, ME, Unlimited Tax
General Obligation Bonds, 5.50%, due
9/1/04................................ 62,437
250,000 Cumberland County, ME, Unlimited Tax
General Obligation Bonds, 5.25%, due
2/1/07................................ 252,865
</TABLE>
See notes to financial statements. 7 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
MAINE MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS (continued)
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
GENERAL OBLIGATION--POLITICAL SUBDIVISIONS, CONTINUED:
$ 100,000 Cumberland County, ME, Unlimited Tax
General Obligation Bonds, 6.50%, due
2/1/03, Prerefunded (U.S. Governments)
2/1/01 at 102......................... $ 108,964
25,000 Ellsworth, ME, Unlimited Tax General
Obligation Bonds, 7.20%, due 7/1/08... 28,654
25,000 Old Orchard Beach, ME, Unlimited Tax
General Obligation Bonds, MBIA
insured, 6.50%, due 10/1/96........... 25,002
40,000 Old Orchard Beach, ME, Unlimited Tax
General Obligation Bonds, MBIA
insured, 6.40%, due 9/1/04............ 43,994
215,000 Old Orchard Beach, ME, Unlimited Tax
General Obligation Bonds, MBIA
insured, 6.60%, due 9/1/06............ 238,710
50,000 Old Orchard Beach, ME, Unlimited Tax
General Obligation Bonds, MBIA
insured, 6.65%, due 9/1/07............ 55,505
50,000 Portland, ME, Unlimited Tax General
Obligation Bonds, 12.10%, due
7/1/99................................ 59,919
50,000 Portland, ME, Unlimited Tax General
Obligation Bonds, 10.50%, due
11/1/99............................... 58,811
500,000 Portland, ME, Unlimited Tax General
Obligation Bonds, 6.20%, due 4/1/05... 544,940
50,000 Portland, ME, Unlimited Tax General
Obligation Bonds, 12.60%, due
11/1/05............................... 77,738
790,000 Portland, ME, Unlimited Tax General
Obligation Bonds, 5.30%, due 6/1/13... 776,641
150,000 South Portland, ME, Unlimited Tax
General Obligation Bonds, 5.80%, due
9/1/08................................ 157,981
40,000 South Portland, ME, Unlimited Tax
General Obligation Bonds, 5.80%, due
9/1/11................................ 41,644
250,000 Town of Freeport, ME, Unlimited Tax
General Obligation Bonds, 7.25%, due
9/1/04................................ 286,665
20,000 Town of Freeport, ME, Unlimited Tax
General Obligation Bonds, 7.25%, due
9/1/10................................ 23,458
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
GENERAL OBLIGATION--POLITICAL SUBDIVISIONS, CONTINUED:
$ 25,000 Westbrook, ME, Unlimited Tax General
Obligation Bonds, 6.75%, due
11/15/04.............................. $ 28,041
75,000 Windham, ME, Unlimited Tax General
Obligation Bonds, 0.05%, due
6/15/08............................... 39,987
20,000 Winslow, ME, Unlimited Tax General
Obligation Bonds, AMBAC insured,
6.90%, due 10/1/08.................... 22,150
25,000 Winthrop, ME, Unlimited Tax General
Obligation Bonds, 5.10%, due 8/1/04... 25,183
25,000 Winthrop, ME, Unlimited Tax General
Obligation Bonds, 5.20%, due 8/1/05... 25,201
25,000 Winthrop, ME, Unlimited Tax General
Obligation Bonds, 5.30%, due 8/1/06... 25,218
25,000 Winthrop, ME, Unlimited Tax General
Obligation Bonds, 5.40%, due 8/1/07... 25,196
-----------
3,678,981
-----------
GENERAL OBLIGATION--SCHOOL DISTRICTS (0.2%):
35,000 York, ME, School District, Unlimited Tax
General Obligation Bonds, AMBAC
insured, 6.40%, due 3/1/03............ 38,308
-----------
38,308
-----------
GENERAL OBLIGATION--STATES, TERRITORIES (11.9%):
100,000 Commonwealth of Puerto Rico, Unlimited
Tax General Obligation Public
Improvements Bonds, Series 92, MBIA
insured, 6.50%, due 7/1/09,
Prerefunded (U.S. Governments) 7/1/02
at 101.50............................. 110,841
300,000 Commonwealth of Puerto Rico, Unlimited
Tax General Obligation Refunding
Revenue Bonds, 6.80%, due 7/1/21,
Prerefunded (U.S. Governments) 7/1/02
at 101.50............................. 336,870
1,150,000 Commonwealth of Puerto Rico, Unlimited
Tax General Obligation Bonds, MBIA
insured, 6.50%, due 7/1/04............ 1,277,960
</TABLE>
See notes to financial statements. 8 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
MAINE MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS (continued)
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
GENERAL OBLIGATION--STATES, TERRITORIES, CONTINUED:
$ 250,000 Puerto Rico Municipal Finance Agency,
Unlimited Tax General Obligation
Bonds, Series 92 A, 5.80%, due
7/1/04................................ $ 259,383
250,000 Puerto Rico Municipal Finance Agency,
Unlimited Tax General Obligation
Bonds, Series 92 A, 5.875%, due
7/1/05................................ 258,698
25,000 State of Maine, Unlimited Tax General
Obligation Bonds, 10.00%, due
5/15/97............................... 25,957
60,000 State of Maine, Unlimited Tax General
Obligation Bonds, 10.00%, due
5/15/98............................... 65,520
100,000 State of Maine, Unlimited Tax General
Obligation Bonds, 6.75%, due
5/15/99............................... 105,925
100,000 State of Maine, Unlimited Tax General
Obligation Bonds, 8.50%, due 3/1/00... 112,490
100,000 State of Maine, Unlimited Tax General
Obligation Bonds, 7.50%, due
12/15/00.............................. 111,335
50,000 State of Maine, Unlimited Tax General
Obligation Bonds, 8.00%, due 5/1/01... 56,921
90,000 State of Maine, Unlimited Tax General
Obligation Bonds, 6.40%, due 7/1/02... 97,743
100,000 State of Maine, Unlimited Tax General
Obligation Bonds, 6.50%, due 7/1/03... 109,909
-----------
2,929,552
-----------
AIRPORT REVENUE (2.6%):
100,000 City of Bangor, ME, Limited Obligation
Revenue Bonds, Bangor International
Airport Project, 5.75%, due 10/1/01... 103,731
150,000 City of Bangor, ME, Limited Obligation
Revenue Bonds, Bangor International
Airport Project, 6.00%, due 10/1/03... 157,506
100,000 City of Bangor, ME, Limited Obligation
Revenue Bonds, Bangor International
Airport Project, 6.10%, due 10/1/04... 105,563
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
AIRPORT REVENUE, CONTINUED:
$ 250,000 City of Bangor, ME, Limited Obligation
Revenue Bonds, Bangor International
Airport Project, 6.35%, due 10/1/07... $ 263,037
-----------
629,837
-----------
EDUCATION FACILITIES REVENUE (10.3%):
35,000 Maine Educational Loan Authority,
Educational Loan Revenue Bonds,
Supplemental Education Loan Program,
Series 92 A-1, 6.80%, due 12/1/07..... 37,404
75,000 Maine Educational Loan Authority,
Educational Loan Revenue Bonds,
Supplemental Education Loan Program,
Series 92 A-1, 7.00%, due 12/1/16..... 80,114
50,000 Maine Educational Marketing Corporation,
Student Loan Refunding Revenue Bonds,
6.90%, due 11/1/03.................... 54,303
25,000 Maine Educational Loan Marketing
Corporation, Student Loan Refunding
Revenue Bonds, Series 92 A-1, 6.35%,
due 5/1/05............................ 26,028
100,000 Maine Health & Higher Educational
Facilities Authority Revenue Bonds,
Colby College Issue, FGIC insured,
6.20%, due 7/1/99..................... 104,624
210,000 Puerto Rico Public Buildings Authority,
Guaranteed Public Education and Health
Facilities Refunding Revenue Bonds,
Series 93 M, 5.10%, due 7/1/01........ 212,366
1,235,000 Puerto Rico Public Buildings Authority,
Guaranteed Public Education and Health
Facilities Refunding Revenue Bonds,
Series 93 M, FSA insured, 5.70%, due
7/1/09................................ 1,277,361
60,000 University of Maine System Revenue
Bonds, 7.20%, due 9/1/09, Prerefunded
(U.S. Governments) 9/1/99 at 102...... 65,618
105,000 University of Maine System Revenue
Bonds, 7.25%, due 9/1/19, Prerefunded
(U.S. Governments) 9/1/99 at 102...... 114,973
</TABLE>
See notes to financial statements. 9 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
MAINE MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS (continued)
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
EDUCATION FACILITIES REVENUE, CONTINUED:
$ 515,000 University of Puerto Rico Revenue Bonds,
Series N, MBIA insured, 6.25%, due
6/1/04................................ $ 564,651
-----------
2,537,442
-----------
HEALTH CARE REVENUE (17.4%):
10,000 Maine Health & Higher Educational
Facilities Authority Refunding Revenue
Bonds, Kennebec Valley Medical Center,
FGIC insured, 7.00%, due 7/1/05....... 10,926
185,000 Maine Health & Higher Educational
Facilities Authority Refunding Revenue
Bonds, Maine Medical Center, Escrowed
to Maturity in U.S. Governments,
6.00%, due 10/1/13.................... 191,482
250,000 Maine Health & Higher Educational
Facilities Authority Revenue Bonds,
Coves Edge Nursing Home, 10.00%, due
8/1/20, Prerefunded (U.S. Governments)
8/1/00 at 103......................... 303,002
100,000 Maine Health & Higher Educational
Facilities Authority Revenue Bonds,
FSA insured, 6.10%, due 7/1/01........ 105,675
140,000 Maine Health & Higher Educational
Facilities Authority Revenue Bonds,
Cedar Nursing Home, FHA insured,
7.90%, due 8/1/32, Prerefunded (U.S.
Governments) 2/1/00 at 102............ 154,721
50,000 Maine Health & Higher Educational
Facilities Authority Revenue Bonds,
Central Maine Medical Center, FGIC
insured, 8.00%, due 7/1/18,
Prerefunded (U.S. Governments) 7/1/98
at 102................................ 54,125
55,000 Maine Health & Higher Educational
Facilities Authority Revenue Bonds,
Kennebec Valley Medical Center, FGIC
insured, 7.00%, due 7/1/15............ 59,580
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
HEALTH CARE REVENUE, CONTINUED:
$ 150,000 Maine Health & Higher Educational
Facilities Authority Revenue Bonds,
Portland Alliance for Mentally Ill,
Maine Coast Regional Health Center and
Thomas College, FSA insured, 6.10%,
due 7/1/03............................ $ 159,432
455,000 Maine Health & Higher Educational
Facilities Authority Revenue Bonds,
Saint Mary's General Hospital, 8.50%,
due 7/1/09, Prerefunded (U.S.
Governments) 7/1/99 at 102............ 496,960
100,000 Maine Health & Higher Educational
Facilities Authority Revenue Bonds,
Series 92 B, FSA insured, 5.875%, due
7/1/06................................ 104,059
500,000 Maine Health & Higher Educational
Facilities Authority Revenue Bonds,
Series 93 A, FSA insured, 5.60%, due
7/1/07................................ 509,965
450,000 Maine Health & Higher Educational
Facilities Authority Revenue Bonds,
Series 93 B, FSA insured, 5.55%, due
7/1/08................................ 453,897
155,000 Maine Health & Higher Educational
Facilities Authority Revenue Bonds,
Series 93 D, FSA insured, 5.20%, due
7/1/06................................ 154,612
500,000 Maine Health & Higher Educational
Facilities Authority Revenue Bonds,
Series 93 D, FSA insured, 5.30%, due
7/1/07................................ 498,500
25,000 Maine Health & Higher Educational
Facilities Authority Revenue Bonds,
Southern Maine Medical Center, AMBAC
insured, 7.20%, due 5/1/06............ 27,415
15,000 Maine Health & Higher Educational
Facilities Authority Revenue Bonds,
Southern Maine Medical Center, AMBAC
insured, 7.30%, due 5/1/14............ 16,425
950,000 Maine Veterans' Homes Revenue Bonds,
6.80%, due 10/1/05.................... 955,263
-----------
4,256,039
-----------
</TABLE>
See notes to financial statements. 10 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
MAINE MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS (continued)
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
HOUSING REVENUE (6.2%):
$ 30,000 Maine State Housing Authority Refunding
Revenue Bonds, Series 91 A, FSA
insured, 7.40%, due 11/15/22.......... $ 31,712
25,000 Maine State Housing Authority Revenue
Bonds, Mortgage Purchase, Series 86 B,
MGIC Private Mortgage Pools, 7.50%,
due 11/15/16.......................... 25,548
20,000 Maine State Housing Authority Revenue
Bonds, Mortgage Purchase, Series 87
A-2, FHA/ VA Mortgage Pools, 8.10%,
due 11/15/08.......................... 20,913
25,000 Maine State Housing Authority Revenue
Bonds, Mortgage Purchase, Series 87 B,
FHA/VA/ Private Mortgage Pools, 7.60%,
due 11/15/99.......................... 25,969
10,000 Maine State Housing Authority Revenue
Bonds, Mortgage Purchase, Series 88 B,
FHA/VA/ Private Mortgage Pools, 8.00%,
due 11/15/15.......................... 10,486
100,000 Maine State Housing Authority Revenue
Bonds, Mortgage Purchase, Series 88 C,
8.20%, due 11/15/08................... 104,508
40,000 Maine State Housing Authority Revenue
Bonds, Mortgage Purchase, Series 88
D-5, 7.45%, due 11/15/11.............. 41,777
200,000 Maine State Housing Authority Revenue
Bonds, Mortgage Purchase, Series 88
D-6, 7.25%, due 11/15/19.............. 208,310
20,000 Maine State Housing Authority Revenue
Bonds, Mortgage Purchase, Series 89
A-1, 7.625%, due 11/15/24............. 20,895
30,000 Maine State Housing Authority Revenue
Bonds, Mortgage Purchase, Series 89
A-2, 7.30%, due 11/15/16.............. 31,452
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
HOUSING REVENUE, CONTINUED:
$ 110,000 Maine State Housing Authority Revenue
Bonds, Mortgage Purchase, Series 90
A-5, Remarketed 5/13/93, 6.20%, due
11/15/16.............................. $ 112,197
185,000 Maine State Housing Authority Revenue
Bonds, Mortgage Purchase, Series 92 C,
6.55%, due 11/15/12................... 190,454
300,000 Maine State Housing Authority Revenue
Bonds, Mortgage Purchase, Series 94
A-2, 5.20%, due 11/15/08.............. 296,319
250,000 Maine State Housing Authority Revenue
Bonds, Mortgage Purchase, Series 94
C-1, 6.20%, due 11/15/07.............. 258,855
50,000 Maine State Housing Authority Revenue
Bonds, Single Family Mortgage
Refunding Revenue Bonds, Series 91-1,
6.90%, due 11/1/07.................... 52,023
55,000 Maine State Housing Authority Revenue
Bonds, Single Family Mortgage
Refunding Revenue Bonds, Series 91-1,
7.15%, due 11/1/21.................... 57,072
40,000 Virgin Islands Housing Finance
Authority, Single Family Revenue
Refunding Bonds, GNMA Mortgage-Backed,
6.00%, due 3/1/07..................... 40,493
-----------
1,528,983
-----------
INDUSTRIAL DEVELOPMENT REVENUE (3.8%):
100,000 Puerto Rico Industrial, Medical &
Environmental Revenue Bonds, Abbott
Chemicals, Inc. Project, 6.50%, due
7/1/09................................ 100,200
760,000 Puerto Rico Industrial, Medical &
Environmental Revenue Bonds, Motorola,
Inc. Project, Series 83 A, 6.75%, due
1/1/14................................ 836,615
-----------
936,815
-----------
</TABLE>
See notes to financial statements. 11 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
MAINE MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS (continued)
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
POLLUTION CONTROL REVENUE (4.3%):
$ 530,000 East Millinocket, ME, Pollution Control
Revenue Bonds, Great Northern Nekoosa
Corporation Project, Escrowed to
Maturity in U.S. Governments, 6.70%,
due 6/1/04............................ $ 567,667
500,000 Jay, ME, Solid Waste Disposal Revenue
Bonds, International Paper Company
Project, Series B, 6.00%, due
12/1/17............................... 496,575
-----------
1,064,242
-----------
RESOURCE RECOVERY REVENUE (3.8%):
500,000 Regional Waste Systems, Inc., ME,
Revenue Bonds, Series A-C, 7.30%, due
7/1/98................................ 524,275
345,000 Regional Waste Systems, Inc., ME,
Revenue Bonds, Series A-C, 7.95%, due
7/1/10................................ 376,854
25,000 Regional Waste Systems, Inc., ME,
Revenue Bonds, Series D-F, 7.60%, due
7/1/00................................ 26,787
-----------
927,916
-----------
TRANSPORTATION REVENUE (0.9%):
65,000 Commonwealth of Puerto Rico Highway &
Transportation Authority Refunding
Revenue Bonds, Series 92 U, 5.875%,
due 7/1/99............................ 67,097
30,000 Maine State Turnpike Authority Revenue
Bonds, MBIA insured, 6.00%, due
7/1/11................................ 31,037
100,000 State of Maine, Unlimited Tax General
Obligation Bonds, Highway
Improvements, 8.00%, due 5/1/02....... 115,962
-----------
214,096
-----------
UTILITIES REVENUE (2.1%):
40,000 Kennebec, ME, Water District Revenue
Bonds, 7.00%, due 12/1/20, Prerefunded
(U.S. Governments) 12/1/01 at 101.50.. 44,755
165,000 Kennebec, ME, Water District Revenue
Bonds, 7.00%, due 12/1/14, Prerefunded
(U.S. Governments) 12/1/01 at 101.50.. 184,613
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
UTILITIES REVENUE, CONTINUED:
$ 250,000 Puerto Rico Telephone Authority
Refunding Revenue Bonds, Series 93 M,
5.40%, due 1/1/08..................... $ 250,092
25,000 Wells Sanitation District, ME, Sewer
Revenue Bonds, 6.75%, due 3/1/00...... 26,600
-----------
506,060
-----------
OTHER REVENUE (10.5%):
100,000 Commonwealth of Puerto Rico
Infrastructure Financing Authority,
Special Tax Refunding Revenue Bonds,
Series 88 A, 7.75%, due 7/1/08........ 107,603
500,000 Guam Government Limited Obligation
Revenue Bonds, Series 89 A, Fuji Bank
LOC, 7.00%, due 11/15/04.............. 542,285
10,000 Maine Court Facilities Authority Lease
Rental Revenue Bonds, 7.15%, due
8/1/07, Prerefunded (U.S. Governments)
8/1/00 at 102......................... 11,116
150,000 Virgin Islands Public Finance Authority
Revenue Bonds, Government Development
Program, Series A, 7.00%, due
10/1/04............................... 163,296
495,000 Virgin Islands Public Finance Authority
Revenue Bonds, Matching Federal Loan
Notes, Series A, 6.90%, due 10/1/01... 528,066
15,000 Virgin Islands Public Finance Authority
Revenue Bonds, Series 89 B, 7.25%, due
10/1/07, Prerefunded (U.S.
Governments) 10/1/00 at 101........... 16,647
1,025,000 Virgin Islands Public Finance Authority
Refunding Revenue Bonds, Escrowed to
Maturity in U.S. Governments, Series
89 A, 7.30%, due 10/1/18.............. 1,206,763
-----------
2,575,776
-----------
Total Municipal Bonds
(cost $23,103,617) 23,603,891
-----------
</TABLE>
See notes to financial statements. 12 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
MAINE MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS (continued)
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
BOND ANTICIPATION NOTES (0.0%):
$ 10,000 Bangor, ME, Unlimited Tax General
Obligation Bonds, 10.00%, due
6/1/97................................ $ 10,409
-----------
Total Bond Anticipation Notes
(cost $10,359) 10,409
-----------
SHORT-TERM HOLDINGS (3.7%)
6,113 1784 Tax Free Money Market Fund......... 6,113
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
SHORT-TERM HOLDINGS, CONTINUED:
$ 898,617 Fidelity Institutional Tax Exempt Money
Market Fund........................... $ 898,617
-----------
Total Short-Term Holdings
(cost $904,730) 904,730
-----------
Total Investments (100.0%)
(cost $24,018,706) $24,519,030
-----------
-----------
</TABLE>
See notes to financial statements. 13 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
NEW HAMPSHIRE BOND FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
<C> <S> <C>
MUNICIPAL BONDS (97.4%):
GENERAL OBLIGATION--BOND BANK (9.4%):
$ 25,000 New Hampshire Municipal Bond Bank,
Series 89 B, 6.70%, due 7/15/04,
Prerefunded (U.S. Governments) 7/15/99
at 102................................ $ 26,939
25,000 New Hampshire Municipal Bond Bank,
Series 90 A, 6.90%, due 1/15/05....... 27,226
20,000 New Hampshire Municipal Bond Bank,
Series 90 D, 6.90%, due 7/15/03....... 21,889
25,000 New Hampshire Municipal Bond Bank,
Series 91 E, 6.90%, due 8/15/06....... 27,786
50,000 New Hampshire Municipal Bond Bank
Refunding Bonds, Series 92 H, 6.35%,
due 7/15/06........................... 53,856
175,000 New Hampshire Municipal Bond Bank
Refunding Bonds, Series 92 H, 6.50%,
due 7/15/08........................... 188,061
100,000 New Hampshire Municipal Bond Bank
Refunding Bonds, Series 93 E, 5.20%,
due 8/15/08........................... 97,965
85,000 New Hampshire Municipal Bond Bank,
Series 94 C, State Guaranteed, 5.80%,
due 8/15/08........................... 87,893
150,000 New Hampshire Municipal Bond Bank,
Series 94 E, State Guaranteed 5.25%,
due 8/15/01........................... 154,371
25,000 New Hampshire Municipal Bond Bank,
Series K, 6.75%, due 1/15/08,
Prerefunded (U.S. Governments) 1/15/01
at 102................................ 27,414
----------
713,400
----------
GENERAL OBLIGATION--POLITICAL SUBDIVISIONS (18.6%):
135,000 Bedford, NH, Unlimited Tax General
Obligation Bonds, 6.70%, due 8/1/12... 144,893
100,000 Concord, NH, General Obligation
Refunding Bonds, MBIA insured, 5.00%,
due 1/15/09........................... 96,563
25,000 Concord, NH, General Obligation Bonds,
Series 88, 7.00%, due 5/15/04
Prerefunded (U.S. Governments) 5/15/98
at 102................................ 26,595
25,000 Exeter, NH, Unlimited Tax General
Obligation Bonds, 5.30%, due
6/15/08............................... 25,178
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
<C> <S> <C>
GENERAL OBLIGATION--POLITICAL SUBDIVISIONS, CONTINUED:
$ 50,000 Exeter, NH, Unlimited Tax General
Obligation Bonds, Series 93, 5.10%,
due 6/15/05........................... $ 50,716
50,000 Franklin, NH, General Obligation Bonds,
MBIA insured, 5.20%, due 10/1/07...... 50,390
45,000 Manchester, NH, Public Improvement
Bonds, 7.10%, due 9/1/00, Prerefunded
(U.S. Governments) 9/1/97 at 102...... 47,171
40,000 Manchester, NH, Public Improvement
Bonds, 7.50%, due 9/1/04, Prerefunded
(U.S. Governments) 9/1/97 at 102...... 42,073
250,000 Manchester, NH, Public Improvement
Bonds, 5.50%, due 11/1/12............. 249,855
250,000 Manchester, NH, Unlimited Tax General
Obligation Bonds, Series 93 A, 5.30%,
due 7/1/07............................ 252,648
15,000 Nashua, NH, Unlimited Tax General
Obligation Bonds, 6.80%, due 7/1/09... 16,229
100,000 Nashua, NH, Unlimited Tax General
Obligation Bonds, AMBAC insured,
5.35%, due 7/15/06.................... 101,632
250,000 New Hampshire State Capital Improvement
General Obligation Bonds, Series 91 B,
6.50%, due 11/1/11, Prerefunded (U.S.
Governments) 11/1/01 at 102........... 274,383
30,000 Salem, NH, Unlimited Tax General
Obligation Bonds, MBIA insured, 6.45%,
due 3/1/04............................ 32,467
----------
1,410,793
----------
GENERAL OBLIGATION--SCHOOL DISTRICTS (7.8%):
100,000 Concord, NH, School District, General
Obligation Bonds, 4.70%, due
10/15/07.............................. 95,975
100,000 Concord, NH, School District, General
Obligation Bonds, 5.00%, due
10/15/10.............................. 96,908
90,000 Farmington, NH, School District, General
Obligation Bonds, AMBAC insured,
5.55%, due 2/15/02.................... 94,004
100,000 Goffstown, NH, General Obligation Bonds,
AMBAC insured, 5.25%, due 8/15/11..... 97,724
</TABLE>
See notes to financial statements. 14 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
NEW HAMPSHIRE BOND FUND
SCHEDULE OF INVESTMENTS (continued)
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
<C> <S> <C>
GENERAL OBLIGATION--SCHOOL DISTRICTS, CONTINUED:
$ 25,000 Hudson, NH, General Obligation Bonds,
School Lot B, 7.30%, due 12/15/06..... $ 29,213
20,000 Hudson, NH, General Obligation Bonds,
School Lot B, 7.30%, due 12/15/08..... 23,518
50,000 Oyster River, NH, Cooperative School
District State Guaranteed General
Obligation Bonds, Lot A, 5.75%, due
6/15/07............................... 52,168
100,000 Oyster River, NH, Cooperative School
District State Guaranteed General
Obligation Bonds, Lot A, 5.85%, due
6/15/08............................... 104,378
----------
593,888
----------
GENERAL OBLIGATION--STATES, TERRITORIES (7.9%):
275,000 Commonwealth of Puerto Rico, Unlimited
Tax General Obligation Bonds, Series
92, AMBAC insured, 5.85%, due
7/1/15................................ 276,246
115,000 Londonderry, NH, Unlimited Tax General
Obligation Bonds, 5.40%, due
1/15/15............................... 111,930
100,000 Nashua, NH, Unlimited Tax General
Obligation Public Improvement Bonds,
6.80%, due 7/1/07..................... 109,080
100,000 New Hampshire State Unlimited Tax
General Obligation Refunding Bonds,
5.25%, due 7/15/11.................... 97,731
----------
594,987
----------
EDUCATION FACILITIES REVENUE (16.1%):
15,000 Mascenic, NH, Regional School District
#1, Lot C, AMBAC insured, 7.20%, due
12/15/07.............................. 17,627
255,000 New Hampshire Higher Education & Health
Facilities Authority (Franklin Pierce
College Revenue Bonds), Series 94,
5.50%, due 10/1/04.................... 240,496
250,000 New Hampshire Higher Education & Health
Facilities Authority, (Franklin Pierce
College), Series 94, 6.00%, due
10/1/13............................... 231,800
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
<C> <S> <C>
EDUCATION FACILITIES REVENUE, CONTINUED:
$ 125,000 New Hampshire Higher Education & Health
Facilities Authority (Rivier College
Revenue Bonds), 6.90%, due 1/1/13..... $ 127,220
30,000 New Hampshire Higher Education &
Univeristy System of New Hampshire
Revenue Bonds, MBIA Insured, Series
92, 6%, due 7/1/07.................... 31,367
40,000 Puerto Rico Public Buildings Authority,
Guaranteed Public Education and Health
Facilities Refunding Revenue Bonds,
FSA insured Series 93 M, 5.70%, due
7/1/09................................ 41,372
485,000 University of Puerto Rico Revenue Bonds,
Series N, MBIA insured, 6.25%, due
6/1/04................................ 531,758
----------
1,221,640
----------
HEALTH CARE REVENUE (2.6%):
20,000 New Hampshire Higher Education & Health
Facilities Authority Revenue (Elliot
Hospital of Manchester), 6.50%, due
10/1/11............................... 21,492
100,000 New Hampshire Higher Education & Health
Facilities Authority Revenue (Exeter
Hospital), 5.25%, due 10/1/00......... 100,933
25,000 New Hampshire Higher Education & Health
Facilities Authority (Lakes Region
Hospital Association), 5.75%, due
1/1/11................................ 25,144
50,000 New Hampshire Higher Education & Health
Facilities Authority, (Nashua Memorial
Hospital Revenue Bonds), 5.50%, due
10/1/02............................... 51,023
----------
198,592
----------
HOUSING REVENUE (8.8%):
15,000 New Hampshire State Housing Finance
Authority, Single Family Residential
Revenue Bonds, 6.75%, due 7/1/04...... 15,582
</TABLE>
See notes to financial statements. 15 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
NEW HAMPSHIRE BOND FUND
SCHEDULE OF INVESTMENTS (continued)
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
<C> <S> <C>
HOUSING REVENUE, CONTINUED:
$ 100,000 New Hampshire State Housing Finance
Authority, Single Family Residential
Revenue Bonds, Series 92 A, 5.25%, due
1/1/07................................ $ 99,288
100,000 New Hampshire State Housing Finance
Authority, Single Family Revenue
Bonds, Series 96 B, 5.90%, due
1/1/07................................ 101,109
100,000 New Hampshire State Housing Finance
Authority, Single Family Revenue
Bonds, Series 96 B, 6.00%, due
1/1/08................................ 100,803
100,000 New Hampshire State Housing Finance
Authority, Single Family Revenue
Bonds, Series B, 6.00%, due 7/1/08.... 100,828
100,000 Puerto Rico Housing Bank & Finance
Agency Special Obligation Revenue
Bonds, Series 92 H, FSA insured,
5.95%, due 10/1/01.................... 105,858
140,000 Virgin Islands Housing Finance
Authority, Single Family Revenue
Refunding Bonds, GNMA Mortgage-Backed,
6.00%, due 3/1/07..................... 141,724
----------
665,192
----------
INDUSTRIAL DEVELOPMENT REVENUE (3.6%):
40,000 Puerto Rico Industrial, Medical &
Environmental Revenue Bonds, Motorola,
Inc. Project, Series 83 A, 6.75%, due
1/1/14................................ 44,032
250,000 Puerto Rico Industrial, Medical &
Environmental Revenue Bonds,
Remarketed 12/1/93, (American Home
Products Project), 5.10%, due
12/1/18............................... 227,578
----------
271,610
----------
RESOURCE RECOVERY REVENUE (1.0%):
75,000 Guam Government Water System Revenue
Bonds, CGIC insured, 6.85%, due
7/1/99................................ 79,572
TRANSPORTATION REVENUE (10.2%):
25,000 Guam Government Limited Obligation
Highway Revenue Bonds, Series 92 A,
CGIC insured, 5.60%, due 5/1/00....... 25,871
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
<C> <S> <C>
TRANSPORTATION REVENUE, CONTINUED:
$ 550,000 New Hampshire State Turnpike System
Refunding Revenue Bonds, Series 91 A,
FGIC insured, 7.00%, due 11/1/06...... $ 631,808
100,000 New Hampshire State Turnpike System
Refunding Revenue Bonds, Series 91 A,
FGIC insured, 6.75%, due 11/1/11...... 113,191
----------
770,870
----------
OTHER REVENUE (11.4%):
40,000 Puerto Rico Public Buildings Authority,
Guaranteed Public Education and Health
Facilities Refunding Revenue Bonds,
Series 93 M, 5.10%, due 7/1/01........ 40,451
485,000 Virgin Islands Public Finance Authority
Revenue Bonds, Government Development
Program, Series A, 7.00%, due
10/1/04............................... 527,991
5,000 Virgin Islands Public Finance Authority
Revenue Bonds, Series A, 6.90%, due
10/1/01............................... 5,334
245,000 Virgin Islands Public Finance Authority
Revenue Bonds, Series 89 A, 7.30%, due
10/1/18, Prerefunded (U.S.
Governments) 10/1/00 at 101........... 277,935
15,000 Virgin Islands Public Finance Authority
Revenue Bonds, Series 89 B, 7.25%, due
10/1/07, Prerefunded (U.S.
Governments) 10/1/00 at 101........... 16,646
----------
868,357
----------
Total Municipal Bonds
(cost $7,326,805)................... 7,388,901
----------
SHORT-TERM HOLDINGS (2.6%):
200,000 New Hampshire Health & Higher Education
Facilities Authority Revenue Municipal
Demand Notes, FGIC insured, 3.90%
variable rate, due 7/1/21............. 200,000
----------
Total Short-Term Holdings
(cost $200,000) 200,000
----------
Total Investments (100.0%)
(cost $7,526,805) $7,588,901
----------
----------
</TABLE>
See notes to financial statements. 16 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
PAYSON BALANCED FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
COMMON STOCKS (66.8%):
CHEMICALS & ALLIED PRODUCTS (9.1%):
4,590 Bristol-Myers Squibb Company............ $ 442,361
3,700 Dow Chemical Company.................... 296,925
7,700 Eastman Chemical Company................ 449,487
6,750 Schering-Plough Corporation............. 415,125
-----------
1,603,898
-----------
COMMUNICATIONS (2.5%):
25,800 U.S. West Media Group, Inc.*............ 435,376
-----------
DEPOSITORY INSTITUTIONS (2.5%):
7,780 Bank of Boston Corporation.............. 450,267
-----------
ELECTRIC, GAS, & SANITARY SERVICES (3.5%):
12,300 Energen Corporation..................... 295,200
10,500 GPU, Inc................................ 322,875
-----------
618,075
-----------
ELECTRONIC & ELECTRICAL EQUIPMENT, EXCEPT
COMPUTER EQUIPMENT (4.4%):
5,795 Harris Corporation...................... 377,400
7,400 Texas Instruments, Inc.................. 407,925
-----------
785,325
-----------
ENERGY (1.5%):
7,600 Public Service Company of Colorado...... 269,800
-----------
FOOD & KINDRED PRODUCTS (7.5%):
24,622 Archer Daniels Midland Company.......... 473,973
12,750 IBP, Inc................................ 296,437
7,200 Universal Foods Corporation............. 234,000
13,775 Whitman Corporation..................... 318,547
-----------
1,322,957
-----------
HOLDING & OTHER INVESTMENT OFFICES (4.4%):
19,600 Merry Land & Investment Company, Inc.... 418,950
17,100 Security Capital Pacific Trust.......... 361,238
-----------
780,188
-----------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER
EQUIPMENT (4.5%):
8,495 Briggs & Stratton Corporation........... 376,965
8,900 Varian Associates, Inc.................. 427,200
-----------
804,165
-----------
INSURANCE CARRIERS (3.6%):
12,200 American Financial Group, Inc........... 384,300
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
INSURANCE CARRIERS, CONTINUED:
5,300 Travelers Group, Inc.................... $ 260,362
-----------
644,662
-----------
MISCELLANEOUS RETAIL (1.5%):
9,000 Toys "R" Us, Inc.*...................... 262,125
-----------
OFFICE EQUIPMENT (2.3%):
17,900 American Business Products, Inc......... 398,275
-----------
OIL & GAS EXTRACTION (1.9%):
2,600 Atlantic Richfield Company.............. 331,500
-----------
PAPER & ALLIED PRODUCTS (1.7%):
4,700 Willamette Industries, Inc.............. 307,850
-----------
PETROLEUM REFINING & RELATED INDUSTRIES (4.8%):
6,600 Ashland, Inc............................ 262,350
2,230 Mobil Corporation....................... 258,122
9,800 Repsol, S.A. ADR........................ 324,625
-----------
845,097
-----------
PRIMARY METAL INDUSTRIES (1.6%):
10,000 USX-US Steel Group, Inc................. 285,000
-----------
TOBACCO PRODUCTS (2.0%):
4,000 Philip Morris Companies, Inc............ 359,000
-----------
TRANSPORTATION EQUIPMENT (5.6%):
3,690 Lockheed Martin Corporation............. 332,562
4,500 Northrop Grumman Corporation............ 361,125
9,000 Trinity Industries, Inc................. 300,375
-----------
994,062
-----------
WHOLESALE TRADE--NONDURABLE GOODS (1.9%):
12,100 Supervalu, Inc.......................... 332,750
-----------
Total Common Stocks
(cost $10,522,841) 11,830,372
-----------
<CAPTION>
FACE
AMOUNT
- --------------------
<C> <S> <C>
CORPORATE BONDS & NOTES (10.5%):
$ 50,000 Allstate Corporation, 5.875%,
due 6/15/98........................... 49,699
100,000 Avco Financial Services, Inc. 5.875%,
due 10/15/97.......................... 99,830
45,000 Avco Financial Services, Inc., 5.50%,
due 5/1/98............................ 44,488
150,000 Bear Stearns Companies, Inc., 6.625%,
due 1/15/04........................... 144,179
200,000 Chase Manhattan Corporation, 6.25%, due
01/15/06.............................. 185,015
</TABLE>
*Non-income producing security.
See notes to financial statements. 17 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
PAYSON BALANCED FUND
SCHEDULE OF INVESTMENTS (continued)
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
CORPORATE BONDS & NOTES, CONTINUED:
$ 50,000 Comerica Bank, Detroit, 5.95%, due
9/15/97............................... $ 49,943
50,000 Ford Motor Credit Corporation, 7.125%,
due 12/1/97........................... 50,533
100,000 GTE South, Inc., 6.25%,
due 11/15/97.......................... 100,158
100,000 Household Finance Corporation, 7.625%,
due 6/15/99........................... 102,509
200,000 Household Finance Corporation, 8.00%,
due 8/15/04........................... 206,437
200,000 Lockheed Martin Corporation, 6.85%, due
5/15/01............................... 199,688
65,000 PepsiCo, Inc., 6.25%, due 9/1/99........ 64,585
200,000 Sears Roebuck Acceptance Corporation,
6.75%, due 9/15/05.................... 193,075
100,000 Southwestern Bell Capital Corporation,
6.05%, due 2/9/98..................... 99,864
100,000 WMX Technologies, Inc., 8.25%, due
11/15/99.............................. 104,526
100,000 Wachovia Corporation, 7.00%, due
12/15/99.............................. 101,209
50,000 Wal-Mart Stores, Inc., 5.50%, due
3/1/98................................ 49,606
-----------
Total Corporate Bonds & Notes
(cost $1,877,951) 1,845,344
-----------
GOVERNMENT AGENCY NOTES (8.8%):
300,000 Federal Home Loan Bank, 6.41%, due
12/29/03.............................. 288,330
400,000 Federal Home Loan Mortgage Corporation,
6.89%, due 10/3/05.................... 392,082
200,000 Federal Home Loan Mortgage Corporation,
6.645%, due 2/9/06.................... 189,955
100,000 Federal National Mortgage Association,
9.55%, due 11/10/97................... 103,955
500,000 Federal National Mortgage Association,
6.54%, due 9/8/00..................... 495,882
100,000 Federal National Mortgage Association,
6.38%, due 4/29/03.................... 96,614
-----------
Total Government Agency Notes
(cost $1,574,713) 1,566,818
-----------
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS (4.2%):
$ 200,000 Federal Home Loan Mortgage Corporation,
Series 1678 C, 6.00%, due 8/15/08..... $ 186,000
200,000 Federal Home Loan Mortgage Corporation,
Series 1491 GB, 6.90%, due 11/15/21... 192,392
400,000 Federal National Mortgage Association,
Series 1992-184 C, 7.00%, due
10/25/21.............................. 366,180
-----------
Total Collateralized Mortgage Obligations
(cost $798,125) 744,572
-----------
MORTGAGE BACKED SECURITIES (1.0%):
180,300 Government National Mortgage
Association, Pool 394795, 7.50%, due
10/15/10.............................. 182,363
-----------
Total Mortgage Backed Securities
(cost $185,259) 182,363
-----------
U.S. TREASURY NOTES (6.7%):
125,000 U.S. Treasury Notes, 9.125%, due
5/15/99............................... 133,633
275,000 U.S. Treasury Notes, 6.75%, due
6/30/99............................... 278,438
275,000 U.S. Treasury Notes, 7.25%, due
5/15/04............................... 284,625
500,000 U.S. Treasury Notes, 6.50%, due
8/15/05............................... 493,125
-----------
Total U.S. Treasury Notes
(cost $1,203,203) 1,189,821
-----------
SHORT-TERM HOLDINGS (2.0%):
5,772 1784 U.S. Treasury Money Market Fund.... 5,772
346,355 Dreyfus Government Cash Management
Fund.................................. 346,355
-----------
Total Short-Term Holdings
(cost $352,127) 352,127
-----------
Total Investments (100.0%)
(cost $16,514,219) $17,711,417
-----------
-----------
</TABLE>
See notes to financial statements. 18 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
PAYSON VALUE FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
COMMON STOCK (95.6%)
BUILDING CONSTRUCTION--GENERAL CONTRACTORS (2.2%):
10,000 Southdown, Inc.......................... $ 246,250
-----------
CHEMICALS & ALLIED PRODUCTS (11.0%):
5,000 Abbott Laboratories..................... 246,250
3,000 Bristol-Myers Squibb Company............ 289,125
2,000 Dow Chemical Company.................... 160,500
4,000 Eastman Chemical Company................ 233,501
5,000 Schering-Plough Corporation............. 307,500
-----------
1,236,876
-----------
COMMUNICATIONS (4.9%):
3,500 Telecom Corporation of New Zealand,
Ltd................................... 265,126
17,000 US West Media Group*.................... 286,875
-----------
552,001
-----------
DOMESTIC DEPOSITORY INSTITUTIONS (8.6%):
5,000 Bank of Boston Corporation.............. 289,375
3,500 First Virginia Banks, Inc............... 152,250
5,000 JSB Financial, Inc...................... 180,625
1,333 Wells Fargo & Company................... 346,580
-----------
968,830
-----------
ELECTRIC, GAS, & SANITARY SERVICES (4.2%):
5,000 CINergy Corporation..................... 154,375
5,000 General Public Utilities Corporation.... 153,750
5,000 Public Service Company of Colorado...... 177,500
-----------
485,625
-----------
ELECTRONIC AND OTHER ELECTRICAL EQUIPMENT, EXCEPT COMPUTER EQUIPMENT
(8.3%):
4,000 General Electric Company................ 364,000
4,500 Harris Corporation...................... 293,064
5,000 Texas Instruments, Inc.................. 275,625
-----------
932,689
-----------
FOOD & KINDRED PRODUCTS (8.3%):
14,700 Archer Daniels Midland Company.......... 282,975
11,000 IBP, Inc................................ 255,750
5,000 Universal Foods Corporation............. 162,500
10,000 Whitman Corporation..................... 231,250
-----------
932,475
-----------
FOOD STORES (3.2%):
10,000 American Stores Company................. 400,000
-----------
HEALTH SERVICES (1.9%):
9,256 MedPartners, Inc........................ 210,575
-----------
HOLDING & OTHER INVESTMENT OFFICES (3.4%):
8,000 Merry Land & Investment Company, Inc.... 171,000
10,000 Security Capital Pacific Trust.......... 211,250
-----------
382,250
-----------
INDUSTRIAL & COMMERCIAL MACHINERY &
COMPUTER EQUIPMENT (5.7%):
6,000 Briggs & Stratton Corporation........... 266,250
4,200 Varian Associates, Inc.................. 201,600
3,500 York International Corporation.......... 169,313
-----------
637,163
-----------
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
INSURANCE CARRIERS (2.4%):
5,500 Travelers Group, Inc.................... $ 270,189
-----------
MISCELLANEOUS RETAIL (2.6%):
10,000 Toys "R" Us, Inc.*...................... 291,250
-----------
OIL AND GAS EXTRACTION (2.3%):
2,000 Atlantic Richfield Company.............. 255,000
-----------
PAPER & ALLIED PRODUCTS (3.4%):
4,500 Boise Cascade Corporation............... 153,000
3,500 Willamette Industries................... 229,250
-----------
382,250
-----------
PETROLEUM REFINING & RELATED INDUSTRIES (6.3%):
4,000 Ashland, Inc............................ 159,000
2,500 Mobil Corporation....................... 289,376
8,000 Repsol S.A., ADR........................ 265,000
-----------
713,376
-----------
PRIMARY METAL INDUSTRIES (1.0%):
4,000 USX-US Steel Group, Incorporated........ 114,000
-----------
PRINTING, PUBLISHING, & ALLIED INDUSTRIES (0.9%):
4,525 American Business Products, Inc......... 100,681
-----------
TELECOMMUNICATIONS (1.6%):
3,500 AT&T Corporation........................ 182,875
-----------
TOBACCO PRODUCTS (1.6%):
2,000 Philip Morris Companies, Inc............ 179,500
-----------
TRANSPORTATION EQUIPMENT (8.1%):
3,000 Lockheed Martin Corporation............. 270,378
3,000 Northrop Grumman Corporation............ 240,750
2,400 Textron, Inc............................ 204,000
6,000 Trinity Industries, Inc................. 200,250
-----------
915,378
-----------
TRANSPORTATION SERVICES (1.8%):
6,300 Pittston Brink's Group.................. 197,652
-----------
WHOLESALE TRADE--NONDURABLE GOODS (1.5%):
6,000 Supervalu, Inc.......................... 165,000
-----------
Total Common Stock
(cost $8,546,696) 10,751,885
-----------
<CAPTION>
FACE
AMOUNT
- --------------------
<C> <S> <C>
SHORT TERM HOLDINGS (4.4%):
$ 57,454 1784 U.S. Treasury Money Market Fund.... 57,454
434,799 Dreyfus Government Cash Management
Fund.................................. 434,799
-----------
Total Short Term Holdings
(cost $492,253) 492,253
-----------
Total Investments (100.0%)
(cost $9,038,949) $11,244,138
-----------
-----------
</TABLE>
*Non-income producing security.
See notes to financial statements.
19 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS & LIABILITIES
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINE NEW DAILY
INVESTORS TAXSAVER MUNICIPAL HAMPSHIRE ASSETS PAYSON PAYSON
BOND BOND BOND BOND TREASURY BALANCED VALUE
BOND FUND FUND FUND FUND FUND FUND
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value (a)...... $25,218,584 $17,173,778 $24,519,030 $7,588,901 $40,450,300 $17,711,417 $11,244,138
Interest, dividends and other
receivables.................. 377,755 311,714 623,702 159,318 -- 102,263 19,447
Receivable for shares issued... 222 -- 16,360 68,654 -- 21,433 1,013
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total assets....................... 25,596,561 17,485,492 25,159,092 7,816,873 40,450,300 17,835,113 11,264,598
----------- ----------- ----------- ----------- ----------- ----------- -----------
LIABILITIES:
Dividends payable.............. 114,490 49,445 43,078 9,344 149,314 55,561 15,532
Accrued fees and other
expenses...................... 13,582 7,967 11,464 3,597 42,621 28,993 18,768
Payable for shares redeemed.... 2,000 -- 11 3,856 -- 4,001 5,000
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total liabilities.................. 130,072 57,412 54,553 16,797 191,935 88,555 39,300
----------- ----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS......................... $25,466,489 $17,428,080 $25,104,539 $7,800,076 $40,258,365 $17,746,558 $11,225,298
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
COMPONENTS OF NET ASSETS:
Capital paid in................ $25,395,168 $16,780,254 $24,673,992 $7,774,264 $40,246,655 $14,865,675 $ 8,068,766
Undistributed net investment
income....................... 6,707 -- -- 489 19,454 6,105 2,177
Unrealized appreciation........ 131,972 555,193 500,324 62,096 -- 1,197,198 2,205,189
Accumulated net realized gains
(losses)..................... (67,358) 92,633 (69,777) (36,773 ) (7,744) 1,677,580 949,166
----------- ----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS......................... $25,466,489 $17,428,080 $25,104,539 $7,800,076 $40,258,365 $17,746,558 $11,225,298
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
SHARES OUTSTANDING................. 2,504,239 1,645,317 2,339,876 754,599 40,246,655 1,288,743 680,680
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
NET ASSET VALUE PER SHARE.......... $ 10.17 $ 10.59 $ 10.73 $ 10.34 $ 1.00 $ 13.77 $ 16.49
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
(a) Cost of Investments............ $25,086,612 $16,618,585 $24,018,706 $7,526,805 $40,450,300 $16,514,219 $ 9,038,949
</TABLE>
See notes to financial statements. 20 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE PERIOD ENDED SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINE NEW DAILY
INVESTORS TAXSAVER MUNICIPAL HAMPSHIRE ASSETS PAYSON PAYSON
BOND BOND BOND BOND TREASURY BALANCED VALUE
FUND FUND FUND FUND FUND FUND FUND
---------- --------- ---------- --------- ----------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income................ $ 966,798 $519,448 $ 686,338 $203,506 $ -- $ 199,364 $ 11,777
Dividend income................ -- -- -- -- -- 162,006 133,245
Net investment income from
Treasury Portfolio of Core
Trust (Delaware) (Note 2)..... -- -- -- -- 1,013,648* -- --
---------- --------- ---------- --------- ----------- ---------- --------
Total investment income........ 966,798 519,448 686,338 203,506 1,013,648 361,370 145,022
---------- --------- ---------- --------- ----------- ---------- --------
EXPENSES:
Investment advisory............ 50,756 35,243 50,872 15,301 -- 52,184 42,625
Management..................... 38,067 26,433 38,154 11,476 20,013 17,395 10,656
Transfer agency................ 38,410 28,463 41,308 16,324 56,480 31,306 21,749
Custodian...................... 3,425 1,707 3,135 1,123 -- 2,295 1,513
Accounting..................... 20,000 18,000 24,000 18,000 6,000 19,000 18,000
Professional services.......... 10,890 7,539 10,914 3,239 6,347 7,441 4,540
Compliance..................... 4,980 4,906 9,334 6,384 8,127 5,897 4,336
Other.......................... 8,360 6,665 15,015 5,721 17,386 7,328 4,513
---------- --------- ---------- --------- ----------- ---------- --------
Total expenses..................... 174,888 128,956 192,732 77,568 114,353 142,846 107,932
Expenses reimbursed and fees
waived............................ (87,015) (76,097) (116,434) (54,620) (44,309) (42,867) (30,733)
---------- --------- ---------- --------- ----------- ---------- --------
Net expenses....................... 87,873 52,859 76,298 22,948 70,044 99,979 77,199
---------- --------- ---------- --------- ----------- ---------- --------
NET INVESTMENT INCOME.............. 878,925 466,589 610,040 180,558 943,604 261,391 67,823
---------- --------- ---------- --------- ----------- ---------- --------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Realized gain (loss) on
investments....................... (103,167) 6,645 (1,458) (15,228) 4,497 641,692 106,192
Net change in unrealized
appreciation (depreciation)....... 20,651 22,242 15,114 23,040 -- (555,989) 238,324
---------- --------- ---------- --------- ----------- ---------- --------
NET GAIN ON INVESTMENTS............ (82,516) 28,887 13,656 7,812 4,497 85,703 344,516
---------- --------- ---------- --------- ----------- ---------- --------
INCREASE IN NET ASSETS FROM
OPERATIONS........................ $ 796,409 $495,476 $ 623,696 $188,370 $ 948,101 $ 347,094 $412,339
---------- --------- ---------- --------- ----------- ---------- --------
---------- --------- ---------- --------- ----------- ---------- --------
</TABLE>
*Net of portfolio expenses of $30,052.
See notes to financial statements. 21 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED MARCH 31, 1996 AND THE PERIOD ENDED SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINE NEW
INVESTORS TAXSAVER MUNICIPAL HAMPSHIRE
BOND BOND BOND BOND
FUND FUND FUND FUND
------------------------ ----------------------- ------------------------ ---------------------
AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
------------- --------- ------------- -------- ------------- --------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSETS--3/31/95...... $ 25,890,384 $ 16,017,900 $ 25,524,644 $5,275,776
------------- ------------- ------------- -----------
OPERATIONS:
Net investment
income............... 1,959,801 930,996 1,242,238 277,350
Net realized gain
(loss) on
investments.......... 42,127 179,731 71,276 36,867
Net change in
unrealized
appreciation......... 497,162 112,851 539,077 76,453
------------- ------------- ------------- -----------
2,499,090 1,223,578 1,852,591 390,670
------------- ------------- ------------- -----------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net Investment
income............... (1,951,033) (931,523) (1,242,937) (277,495)
Net realized capital
gain................. (11,430) (7,448) -- --
------------- ------------- ------------- -----------
(1,962,463) (938,971) (1,242,937) (277,495)
------------- ------------- ------------- -----------
CAPITAL SHARE
TRANSACTIONS:
Sale of shares......... 5,032,553 494,170 2,393,277 227,066 3,875,719 357,221 1,976,778 189,452
Reinvested dividends... 383,315 37,691 249,343 23,464 773,165 90,459 197,211 22,384
------------- --------- ------------- -------- ------------- --------- ----------- --------
5,415,868 531,861 2,642,620 250,530 4,648,884 447,680 2,173,989 211,836
Shares repurchased..... (6,166,901) (605,493) (1,030,322) (97,139) (4,739,315) (456,068) (659,492) (66,614)
------------- --------- ------------- -------- ------------- --------- ----------- --------
(751,033) (73,632) 1,612,298 153,391 (90,431) (8,388) 1,514,497 145,222
------------- --------- ------------- -------- ------------- --------- ----------- --------
--------- -------- --------- --------
NET ASSETS--3/31/96...... $ 25,675,978 $ 17,914,805 $ 26,043,867 $6,903,448
------------- ------------- ------------- -----------
OPERATIONS:
Net investment
income............... 878,925 466,589 610,040 180,558
Net realized gain
(loss) on
investments.......... (103,167) 6,645 (1,458) (15,228)
Net change in
unrealized
appreciation
(depreciation)....... 20,651 22,242 15,114 23,040
------------- ------------- ------------- -----------
796,409 495,476 623,696 188,370
------------- ------------- ------------- -----------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment
income............... (888,762) (466,589) (610,040) (180,558)
------------- ------------- ------------- -----------
CAPITAL SHARE
TRANSACTIONS:
Sale of shares......... 1,577,527 170,436 495,172 47,004 1,957,205 365,458 1,713,456 216,113
Reinvested dividends... 191,984 18,946 163,528 15,526 344,786 42,339 125,304 14,532
------------- --------- ------------- -------- ------------- --------- ----------- --------
1,769,511 189,382 658,700 62,531 2,301,991 407,797 1,838,760 230,645
Shares repurchased..... (1,886,647) (200,802) (1,174,312) (111,888) (3,254,975) (497,291) (949,944) (144,400)
------------- --------- ------------- -------- ------------- --------- ----------- --------
(117,136) (11,420) (515,612) (49,358) (952,984) (89,494) 888,816 86,245
------------- --------- ------------- -------- ------------- --------- ----------- --------
--------- -------- --------- --------
NET ASSETS--9/30/96...... $ 25,466,489 $ 17,428,080 $ 25,104,539 $7,800,076
------------- ------------- ------------- -----------
------------- ------------- ------------- -----------
</TABLE>
See notes to financial statements. 22 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED MARCH 31, 1996 AND THE PERIOD ENDED SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DAILY
ASSETS PAYSON PAYSON
TREASURY BALANCED VALUE
FUND* FUND FUND
------------ ----------------------- ----------------------
AMOUNT AMOUNT SHARES AMOUNT SHARES
------------ ------------ --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
NET ASSETS--3/31/95..................................... $ 36,328,855 $13,872,041 $ 7,959,654
------------ ------------ -----------
OPERATIONS:
Net investment income................................. 1,966,077 517,774 131,403
Net realized gain (loss) on investments............... (12,241) 1,250,859 903,175
Net change in unrealized appreciation................. -- 1,319,794 1,186,194
------------ ------------ -----------
1,953,836 3,088,427 2,220,772
------------ ------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment income................................. (1,967,071) (528,066) (135,212)
Net realized capital gain............................. -- (384,324) (7,338)
------------ ------------ -----------
(1,967,071) (912,390) (142,550)
------------ ------------ -----------
CAPITAL SHARE TRANSACTIONS:
Sale of shares........................................ 83,226,136 2,431,994 186,377 2,441,076 174,272
Reinvested dividends.................................. 56,702 600,277 45,666 100,673 7,046
------------ ------------ --------- ----------- ---------
83,282,838 3,032,271 232,043 2,541,749 181,318
Shares repurchased.................................... (76,495,529) (1,624,872) (123,730) (2,260,146) (162,425)
------------ ------------ --------- ----------- ---------
6,787,309 1,407,399 108,313 281,603 18,893
------------ ------------ --------- ----------- ---------
--------- ----------- ---------
NET ASSETS--3/31/96..................................... $ 43,102,929 $17,455,477 $10,319,479
------------ ------------ -----------
OPERATIONS:
Net investment income................................. 943,604 261,391 67,823
Net realized gain (loss) on investments............... 4,497 641,692 106,192
Net change in unrealized appreciation
(depreciation)...................................... -- (555,989) 238,324
------------ ------------ -----------
948,101 347,094 412,339
------------ ------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income................................. (943,604) (255,475) (67,461)
------------ ------------ -----------
CAPITAL SHARE TRANSACTIONS:
Sale of shares........................................ 39,787,465 882,072 71,366 960,049 62,840
Reinvested dividends.................................. 26,084 144,276 10,542 41,195 2,517
------------ ------------ --------- ----------- ---------
39,813,549 1,026,348 81,908 1,001,244 65,357
Shares repurchased.................................... (42,662,610) (826,886) (67,226) (440,303) (29,895)
------------ ------------ --------- ----------- ---------
(2,849,061) 199,462 14,682 560,941 35,462
------------ ------------ --------- ----------- ---------
--------- ----------- ---------
NET ASSETS--9/30/96..................................... $ 40,258,365 $17,746,558 $11,225,298
------------ ------------ -----------
------------ ------------ -----------
</TABLE>
*Share transactions at net asset value of $1.00 per share.
See notes to financial statements. 23 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTORS TAXSAVER
SELECTED PER BOND BOND
SHARE DATA AND FUND FUND
RATIOS FOR A ------------------------------------------------------ -------------------------------------------------------
SHARE YEAR ENDED YEAR ENDED
OUTSTANDING PERIOD ENDED MARCH 31, PERIOD ENDED MARCH 31,
THROUGHOUT THE SEPTEMBER 30, ------------------------------------ SEPTEMBER 30, -------------------------------------
PERIODS. 1996 1996 1995 1994 1993 1996 1996 1995 1994 1993
------------- ------- ------- -------- -------- ------------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning net
asset value
per share..... $10.21 $10.00 $10.38 $10.71 $10.43 $10.57 $10.39 $10.35 $10.63 $10.26
------------- ------- ------- -------- -------- ------------- ------- -------- -------- --------
Net investment
income........ 0.36 0.74 0.82 0.81 0.82 0.28 0.57 0.57 0.57 0.63
Net realized and
unrealized
gain (loss) on
securities.... (0.04) 0.21 (0.38) (0.30) 0.53 0.02 0.18 0.04 (0.01) 0.49
Dividends from
net investment
income........ (0.36) (0.74) (0.82) (0.81) (0.82) (0.28) (0.57) (0.57) (0.57) (0.63)
Distributions
from net
realized
gains......... -- -- -- (0.03) (0.25) -- -- -- (0.27) (0.12)
------------- ------- ------- -------- -------- ------------- ------- -------- -------- --------
Ending net asset
value per
share......... $10.17 $10.21 $10.00 $10.38 $10.71 $10.59 $10.57 $10.39 $10.35 $10.63
------------- ------- ------- -------- -------- ------------- ------- -------- -------- --------
------------- ------- ------- -------- -------- ------------- ------- -------- -------- --------
Ratios to
average net
assets:
Expenses(a)... 0.69%(b) 0.43% 0.75% 0.75% 0.75% 0.60%(b) 0.60% 0.60% 0.60% 0.60%
Net investment
income....... 6.93%(b) 7.29% 8.19% 7.49% 7.71% 5.30%(b) 5.35% 5.62% 5.27% 5.98%
Total return.... 3.16% 9.84% 4.55% 4.70% 13.53% 2.88% 7.36% 6.18% 5.24% 11.28%
Portfolio
turnover
rate.......... 32.11% 42.89% 48.17% 41.41% 193.21% 10.04% 61.61% 63.85% 141.80% 240.36%
Net assets at
the end of
period (000's
omitted)...... $25,466 $25,676 $25,890 $26,083 $26,832 $17,428 $17,915 $16,018 $16,518 $16,580
(a)During the period, various fees and expenses were waived and reimbursed, respectively. Had such waiver and reimbursements not
occurred, the ratio of expenses to average net assets would have been:
1.38%(b) 1.36% 1.33% 1.31% 1.40% 1.47%(b) 1.48% 1.45% 1.50% 1.56%
(b)Annualized.
</TABLE>
See notes to financial statements. 24 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINE
MUNICIPAL NEW HAMPSHIRE
SELECTED PER BOND BOND
SHARE DATA AND FUND FUND
RATIOS FOR A -------------------------------------------------------- ----------------------------------------------------
SHARE YEAR ENDED YEAR ENDED
OUTSTANDING PERIOD ENDED MARCH 31, PERIOD ENDED MARCH 31,
THROUGHOUT THE SEPTEMBER 30, -------------------------------------- SEPTEMBER 30, ----------------------------------
PERIODS. 1996 1996 1995 1994 1993 1996 1996 1995 1994 1993(B)
------------- -------- -------- -------- -------- ------------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning net
asset value
per share..... $10.72 $10.47 $10.37 $10.55 $9.98 $10.33 $10.08 $9.96 $10.01 $10.00
------------- -------- -------- -------- -------- ------------- ------- ------- ------- -------
Net investment
income........ 0.26 0.51 0.52 0.52 0.58 0.24 0.48 0.49 0.51 0.12
Net realized and
unrealized
gain
(loss) on
securities.... 0.01 0.25 0.11 (0.16) 0.57 0.01 0.25 0.12 (0.03) 0.01
Dividends from
net investment
income........ (0.26) (0.51) (0.52) (0.52) (0.58) (0.24) (0.48) (0.49) (0.51) (0.12)
Distributions
from net
realized
gains......... -- -- (0.01) (0.02) -- -- -- -- (0.02) --
------------- -------- -------- -------- -------- ------------- ------- ------- ------- -------
Ending net asset
value per
share......... $10.73 $10.72 $10.47 $10.37 $10.55 $10.34 $10.33 $10.08 $9.96 $10.01
------------- -------- -------- -------- -------- ------------- ------- ------- ------- -------
------------- -------- -------- -------- -------- ------------- ------- ------- ------- -------
Ratios to
average net
assets:
Expenses(a)... 0.60%(c) 0.60% 0.50% 0.50% 0.40% 0.60%(c) 0.60% 0.46% 0.34% 0.50%(c)
Net investment
income....... 4.80%(c) 4.73% 5.08% 4.81% 5.25% 4.72%(c) 4.65% 4.95% 4.68% 4.96%(c)
Total return.... 2.52% 7.34% 6.31% 3.42% 11.80% 2.49% 7.36% 6.32% 4.75% 5.55%(c)
Portfolio
turnover
rate.......... 10.12% 34.07% 31.55% 13.47% 7.82% 21.04% 34.31% 37.59% 9.60% --
Net assets at
the end of
period (000's
omitted)...... $25,105 $26,044 $25,525 $26,310 $16,518 $7,800 $6,903 $5,276 $3,555 $442
(a)During the period, various fees and expenses were waived and reimbursed, respectively. Had such waiver and reimbursements
not occurred, the ratio of expenses to average net assets would have been:
1.52%(c) 1.48% 1.40% 1.44% 1.98% 2.03%(c) 2.26% 2.19% 4.33% 30.85%(c)
(b)See Note 1 for applicable date of inception.
(c)Annualized.
</TABLE>
See notes to financial statements. 25 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DAILY
ASSETS PAYSON
SELECTED PER TREASURY BALANCED
SHARE DATA AND FUND FUND
RATIOS FOR A ------------------------------------------------------- -------------------------------------------------------
SHARE YEAR ENDED YEAR ENDED
OUTSTANDING PERIOD ENDED MARCH 31, PERIOD ENDED MARCH 31,
THROUGHOUT THE SEPTEMBER 30, ------------------------------------- SEPTEMBER 30, -------------------------------------
PERIODS. 1996 1996 1995 1994 1993(B) 1996 1996 1995 1994 1993
------------- -------- -------- -------- ------- ------------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning net
asset value
per share..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 13.70 $ 11.90 $ 11.71 $ 11.40 $10.21
------------- -------- -------- -------- ------- ------------- -------- -------- -------- -------
Net investment
income........ 0.02 0.05 0.04 0.03 0.02 0.20 0.43 0.44 0.34 0.31
Net realized and
unrealized
gain
(loss) on
securities.... -- -- -- -- -- 0.07 2.12 0.24 0.46 1.20
Dividends from
net investment
income........ (0.02) (0.05) (0.04) (0.03) (0.02) (0.20) (0.43) (0.44) (0.35) (0.31)
Distributions
from net
realized
gains......... -- -- -- -- -- -- (0.32) (0.05) (0.14) (0.01)
------------- -------- -------- -------- ------- ------------- -------- -------- -------- -------
Ending net asset
value per
share......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 13.77 $ 13.70 $ 11.90 $ 11.71 $11.40
------------- -------- -------- -------- ------- ------------- -------- -------- -------- -------
------------- -------- -------- -------- ------- ------------- -------- -------- -------- -------
Ratios to
average net
assets:
Expenses(a)... 0.50%(e)(c) 0.50%(e) 0.37% 0.33% 0.22%(c) 1.15%(c) 1.15% 1.15% 1.15% 1.15%
Net investment
income....... 4.72%(c) 5.01% 4.45% 2.82% 2.92%(c) 3.01%(c) 3.25% 3.91% 4.37% 3.27%
Total return.... 2.39% 5.18% 4.45% 2.83% 3.13%(c) 1.99% 21.70% 6.00% 6.99% 15.12%
Portfolio
turnover
rate.......... N/A N/A N/A N/A N/A 18.98% 61.77% 50.06% 80.13% 30.77%
Average
brokerage
commission
rate(d)....... N/A N/A -- -- -- $0.0911 $0.0973 -- -- --
Net assets at
the end of
period (000's
omitted)...... $40,258 $43,103 $36,329 $26,505 $4,687 $17,747 $17,455 $13,872 $11,355 $5,396
(a)During the period, various fees and expenses were waived and reimbursed, respectively. Had such waiver and reimbursements
not occurred, the ratio of expenses to average net assets would have been:
0.89%(e)(c) 1.06%(e) 1.10% 1.17% 2.43%(c) 1.64%(c) 1.70% 1.72% 1.95% 2.60%
(b)See Note 1 for applicable date of inception.
(c)Annualized.
(d)Amount represents the average commission per share, paid to brokers, on the purchase and sale of portfolio securities.
(e)Includes expenses allocated from Treasury Portfolio of Core Trust (Delaware) of 0.02% net of waivers of 0.07%.
</TABLE>
See notes to financial statements. 26 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAYSON
VALUE
FUND
----------------------------------------
SELECTED PER SHARE DATA YEAR ENDED
AND RATIOS FOR A SHARE MARCH 31,
OUTSTANDING THROUGHOUT PERIOD ENDED ----------------------------------------
THE PERIODS. SEPTEMBER 30, 1996 1996 1995 1994 1993(B)
------------------ -------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
Beginning net asset value per
share....................... $ 15.99 $ 12.71 $12.11 $ 11.01 $ 10.00
-------- -------- ------- -------- --------
Net investment income......... 0.10 0.21 0.18 0.13 0.08
Net realized and unrealized
gain
(loss) on securities........ 0.50 3.29 0.60 1.12 1.02
Dividends from net investment
income...................... (0.10) (0.21) (0.18) (0.15) (0.09)
Distributions from net
realized
gains....................... -- (0.01) -- -- --
-------- -------- ------- -------- --------
Ending net asset value per
share....................... $ 16.49 $ 15.99 $12.71 $ 12.11 $ 11.01
-------- -------- ------- -------- --------
-------- -------- ------- -------- --------
Ratios to average net assets:
Expenses(a)................. 1.45%(c) 1.45% 1.46% 1.45% 1.44%(c)
Net investment income....... 1.27%(c) 1.47% 1.59% 1.38% 1.63%(c)
Total return.................. 3.76% 27.77% 6.52% 11.38% 17.05%(c)
Portfolio turnover rate....... 11.47% 53.06% 27.20% 32.15% 23.95%
Average brokerage commission
rate(d)..................... $0.0981 $0.0993 -- -- --
Net assets at the end of
period
(000's omitted)............. $11,225 $10,319 $7,960 $ 5,060 $ 2,145
(a)During the period, various fees and expenses were waived and reimbursed, respectively. Had
such waiver and reimbursements
not occurred, the ratio of expenses to average net assets would have been:
2.03%(c) 2.16% 2.25% 3.04% 5.53%(c)
(b)See Note 1 for applicable date of inception.
(c)Annualized.
(d)Amount represents the average commission per share, paid to brokers, on the purchase and sale
of portfolio securities.
</TABLE>
See notes to financial statements. 27 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
NOTE 1. ORGANIZATION
Forum Funds (the "Trust") is an open-end management investment company organized
as a Delaware business trust. The Trust currently has eight active investment
portfolios (each a "Fund" and collectively the "Funds"). The Trust Instrument of
the Trust authorizes each Fund to issue an unlimited number of shares of
beneficial interest without par value. Payson Balanced Fund, Payson Value Fund
and Daily Assets Treasury Fund are diversified portfolios. All other Funds are
non-diversified. Included in this report are the seven Funds listed below.
Commencement of operations for each Fund was as follows:
<TABLE>
<S> <C>
Investors Bond Fund October 2, 1989
TaxSaver Bond Fund October 2, 1989
Maine Municipal Bond Fund December 5, 1991
New Hampshire Bond Fund December 31, 1992
Daily Assets Treasury Fund July 1, 1992
Payson Balanced Fund November 25, 1991
Payson Value Fund July 31, 1992
</TABLE>
Daily Assets Treasury Fund invests all of its investable assets in interests of
the Treasury Portfolio, a series of Core Trust (Delaware)("Core Trust"), which
has substantially the same investment objective, policies and limitations as the
Fund. The value of the Fund's investment in the Treasury Portfolio reflects the
Fund's proportionate interest in the net assets of the Treasury Portfolio. The
performance of the Fund is directly affected by the performance of the Treasury
Portfolio. The financial statements of the Treasury Portfolio, including the
portfolio of investments, are included elsewhere in this report and should be
read in conjunction with the Fund's financial statements.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Trust's financial statements are prepared in accordance with generally
accepted accounting principles which permit management to make certain estimates
and assumptions at the date of the financial statements and are based, in part,
on the following accounting policies.
SECURITY VALUATION-Securities, other than short-term, held by each of the Funds
other than Daily Assets Treasury Fund (the "Bond and Equity Funds") for which
market quotations are readily available are valued using the last reported sales
price provided by independent pricing services. If no sale is reported, the mean
of the last bid and ask price is used. If no mean price is available, the last
bid price is used. In the absence of readily available market quotations,
securities are valued at fair value using procedures approved by the Trust's
Board of Trustees. Short-term securities held by the Bond and Equity Funds are
valued at amortized cost. Securities held by Daily Assets Treasury Fund are
valued as discussed in Note 2 of the Treasury Portfolio's Notes to Financial
Statements, which are included elsewhere in this report.
REPURCHASE AGREEMENTS-Except for New Hampshire Bond Fund and Daily Assets
Treasury Fund, each Fund may purchase portfolio securities from financial
institutions deemed to be creditworthy by the investment adviser subject to the
seller's agreement to repurchase and the Fund's agreement to resell such
securities at par. Securities subject to repurchase agreements are held with the
Fund's custodian and must have, at all times, an aggregate market value greater
than or equal to the repurchase price plus accrued interest. If the value of the
underlying security falls below the value of the repurchase price plus accrued
28 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
interest, the Funds will require the seller to deposit additional collateral by
the next business day. In the event that the seller under the agreement defaults
on its repurchase obligation or fails to deposit sufficient collateral, the
Funds have the contractual right, subject to the requirements of applicable
bankruptcy and insolvency laws, to sell the underlying securities at market
value and may claim any resulting loss from the seller.
INTEREST AND DIVIDEND INCOME AND DISTRIBUTIONS TO SHAREHOLDERS-Interest income
is accrued as earned. Dividend income is recorded on the ex-dividend date. Daily
Assets Treasury Fund earns daily its pro rata share of income, net of expenses,
on its investment in the Treasury Portfolio. Distributions of net investment
income to shareholders are declared daily and paid monthly by all Funds except
Payson Balanced Fund and Payson Value Fund, for which dividends are declared and
paid quarterly. Net capital gains are distributed to shareholders at least
annually.
Distributions from net investment income and realized capital gain are based on
their tax basis. The difference between financial statement amounts available
for distribution and distributions made in accordance with income tax
regulations are primarily attributable to the deferral of post-October losses,
wash sales and utilization of capital loss carryovers.
FEDERAL INCOME TAX-Each Fund has qualified (and intends to continue to qualify)
as a regulated investment company. Each Fund distributes all of its income and,
therefore, no Federal income tax provision is required.
OTHER-Investment security transactions are recorded on trade date. Realized
gains and losses on investments sold are recorded on the basis of identified
cost.
NOTE 3. INVESTMENT ADVISORY AND RELATED SERVICES
INVESTMENT ADVISERS-The investment adviser for Investors Bond Fund, TaxSaver
Bond Fund, Maine Municipal Bond Fund and New Hampshire Bond Fund is Forum
Advisors, Inc. ("Forum Advisors"). Forum Advisors receives an advisory fee from
each of these Funds at an annual rate of 0.40%, of the average daily net assets
of each Fund. The investment adviser for Payson Balanced Fund and Payson Value
Fund is H.M. Payson & Co. ("Payson"). Payson receives an advisory fee of 0.60%
and 0.80% of the average daily net assets of Payson Balanced Fund and Payson
Value Fund, respectively.
Forum Advisors serves as the investment advisor to Treasury Portfolio Forum
Advisors received an advisory fee of 0.05% of the Treasury Portfolio's average
daily net assets. See Note 3 of Treasury Portfolio's Notes to Financial
Statements, which are included elsewhere in the report.
MANAGEMENT AND OTHER SERVICES-Forum Financial Corp. ("FFC") serves as the
Trust's transfer agent and dividend disbursing agent and is compensated for
those services by each Fund at an annual rate of up to 0.25% of the average
daily net assets of each Fund and $12,000 per year. FFC also serves as the
Trust's fund accountant and is compensated for those services at an amount of
$36,000 per year for each Fund except fee for Daily Assets Treasury Fund is
$12,000 per year. See Note 3 of the Treasury Portfolio's Notes to Financial
Statements, which are included elsewhere in this report.
The manager of the Trust is Forum Financial Services, Inc. (the "Manager"), a
registered broker-dealer and a member of the National Association of Securities
Dealers, Inc. The Manager receives a management fee for its services to
Investors Bond Fund, TaxSaver Bond Fund, Maine Municipal Bond Fund and New
Hampshire Bond Fund at an annual rate of 0.30% of the average daily net assets
of each Fund. The Manager receives a
29 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
management fee for its services to Daily Asset Treasury Fund, Payson Balanced
Fund and Payson Value Fund at an annual rate of 0.10%, 0.20% and 0.20% of the
average daily net assets of each Fund, respectively. In addition, the Manager
charged certain legal expenses to the Funds aggregating $8,984.
The Manager also received sales commissions during the six months ended
September 30, 1996 amounting to $8,115 after deducting $75,633 allowed to
authorized dealers and agents. The Manager, Forum Advisors and FFC are
affiliated companies.
For the six months ended September 30, 1996, expenses waived and reimbursed by
the Manager, FFC and the Adviser were as follows:
<TABLE>
<CAPTION>
FEES WAIVED
EXPENSES --------------------
REIMBURSED TRANSFER
MANAGER AGENT MANAGER
--------- --------- ---------
<S> <C> <C> <C>
Investors Bond Fund..................... $ 18,647 $ 30,601 $ 38,067
TaxSaver Bond Fund...................... 28,982 20,682 26,433
Maine Municipal Bond Fund............... 58,747 19,533 38,154
New Hampshire Bond Fund................. 39,389 3,755 11,476
Payson Balanced Fund.................... 4,475 20,997 17,395
Payson Value Fund....................... 7,221 12,856 10,656
</TABLE>
NOTE 4. SECURITY TRANSACTIONS
Cost of purchases and proceeds from sales of securities (including maturities)
of portfolio securities (excluding short-term investments) during the six months
ended September 30, 1996 were as follows:
<TABLE>
<CAPTION>
COST OF PROCEEDS
PURCHASES FROM SALES
----------- ------------
<S> <C> <C>
Investors Bond Fund..................... $ 7,195,781 $11,517,078
TaxSaver Bond Fund...................... 1,642,106 1,870,900
Maine Municipal Bond Fund............... 2,428,115 3,863,951
New Hampshire Bond Fund................. 2,362,126 1,571,448
Payson Balanced Fund.................... 3,509,816 3,227,590
Payson Value Fund....................... 1,749,995 1,170,860
</TABLE>
At September 30, 1996, the percentage of Treasury Portfolio owned by Daily Asset
Treasury Fund was 99.99%.
30 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
The cost of investments for Federal income tax purposes as of September 30, 1996
is the same as for financial reporting purposes for all Funds. Unrealized
appreciation and depreciation as of September 30, 1996 were as follows:
<TABLE>
<CAPTION>
UNREALIZED UNREALIZED
APPRECIATION DEPRECIATION
------------ ----------
<S> <C> <C>
Investors Bond Fund..................... $ 506,380 $ 374,408
TaxSaver Bond Fund...................... 576,673 21,480
Maine Municipal Bond Fund............... 555,393 55,069
New Hampshire Bond Fund................. 110,750 48,654
Payson Balanced Fund.................... 1,653,889 456,691
Payson Value Fund....................... 2,382,319 177,130
</TABLE>
As of March 31, 1996, certain of the Funds have capital loss carryovers
available to offset future capital gains as follows:
<TABLE>
<CAPTION>
MAINE MUNICIPAL NEW HAMPSHIRE DAILY ASSETS
BOND FUND BOND FUND TREASURY FUND
---------------- ---------------- --------------
<S> <C> <C> <C>
Carryovers expiring in 2002.............................. $ 26,536 -- --
Carryovers expiring in 2003.............................. $ 41,785 $ 21,216 --
Carryovers expiring in 2004.............................. -- -- $ 12,144
</TABLE>
NOTE 5. CONCENTRATION OF RISK
The Maine Municipal Bond Fund and New Hampshire Bond Fund invest substantially
all of their assets in debt obligations of issuers located in the states of
Maine and New Hampshire, respectively. The issuers' abilities to meet their
obligations may be affected by Maine and Hew Hampshire economic or political
developments.
31 FORUM FUNDS
<PAGE>
CORE TRUST (DELAWARE)
SEMI-ANNUAL REPORT
SEPTEMBER 30, 1996
<PAGE>
- --------------------------------------------------------------------------------
TREASURY PORTFOLIO
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
U.S. TREASURY BILLS (63.8%)
$ 2,000,000 5.177% yield, due 11/14/96.............. $ 1,987,705
11,000,000 5.220% yield, due 12/5/96............... 10,898,708
12,000,000 5.086% yield, due 12/12/96.............. 11,881,200
1,000,000 5.094% yield, due 12/12/96.............. 990,080
-----------
Total U.S. Treasury Bills 25,757,693
-----------
GOVERNMENT AGENCY NOTES (28.0%)
1,000,000 Student Loan Marketing Association,
5.43% variable
rate, due 11/14/96.................... 1,000,000
7,315,000 Student Loan Marketing Association,
5.53% variable
rate, due 12/20/96.................... 7,313,997
2,000,000 Student Loan Marketing Association,
5.38% variable
rate, due 1/9/97...................... 2,000,000
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
GOVERNMENT AGENCY NOTES, CONTINUED:
$ 1,000,000 Student Loan Marketing Association,
5.46% variable
rate, due 2/13/97..................... $ 1,000,000
-----------
Total Government Agency Notes 11,313,997
-----------
OTHER (8.2%)
1,849,541 Dreyfus Treasury Prime Cash Management
Fund Class-A Shares................... 1,849,541
1,458,924 Merrill Lynch Treasury Fund............. 1,458,924
-----------
Total Other 3,308,465
-----------
Total Investments (100.0%) $40,380,155
-----------
-----------
</TABLE>
See notes to financial statements. 33 CORE TRUST (DELAWARE)
<PAGE>
- --------------------------------------------------------------------------------
TREASURY PORTFOLIO
STATEMENT OF ASSETS & LIABILITIES
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments, at value.................................................................................. $40,380,155
Interest, dividends and other receivables.............................................................. 74,713
-----------
Total assets............................................................................................... 40,454,868
-----------
LIABILITIES:
Accrued fees and other expenses........................................................................ 4,568
-----------
NET ASSETS................................................................................................. $40,450,300
-----------
-----------
(a) Cost of Investments.................................................................................... $40,380,155
</TABLE>
TREASURY PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME FROM INTEREST............................................................................. $1,043,700
----------
EXPENSES:
Advisory................................................................................................ 10,016
Administration.......................................................................................... 20,033
Custodian............................................................................................... 4,251
Accounting.............................................................................................. 24,000
Trustees................................................................................................ 403
Legal................................................................................................... 115
Auditing................................................................................................ 4,667
Other................................................................................................... 163
----------
Total expenses.............................................................................................. 63,648
Expenses reimbursed and fees waived..................................................................... (33,596)
----------
Net Expenses................................................................................................ 30,052
----------
NET INVESTMENT INCOME....................................................................................... 1,013,648
----------
NET REALIZED GAIN ON INVESTMENTS............................................................................ 4,497
----------
INCREASE IN NET ASSETS FROM OPERATIONS...................................................................... $1,018,145
----------
----------
</TABLE>
See notes to financial statements. 34 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
TREASURY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED MARCH 31, 1996 AND SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
NET ASSETS--February 21, 1996(a)........................................................................... $ --
-----------
OPERATIONS:
Net investment income.................................................................................... 223,902
Net realized gain on investments......................................................................... 422
-----------
224,324
-----------
NET CONTRIBUTIONS OF INVESTOR'S INTEREST................................................................... 43,072,499
-----------
NET ASSETS--March 31, 1996................................................................................. 43,296,823
-----------
OPERATIONS:
Net investment income.................................................................................... 1,013,648
Net realized gain on investments......................................................................... 4,497
-----------
1,018,145
-----------
NET WITHDRAWALS OF INVESTOR'S INTEREST..................................................................... (3,864,668)
-----------
NET ASSETS--SEPTEMBER 30, 1996............................................................................. $40,450,300
-----------
-----------
</TABLE>
See notes to financial statements. 35 CORE TRUST (DELAWARE)
<PAGE>
- --------------------------------------------------------------------------------
TREASURY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
NOTE 1. ORGANIZATION
Core Trust (Delaware) ("Core Trust"), organized as a Delaware business trust,
was formed on September 1, 1994 and is registered as an open-end management
investment company. Core Trust currently has eight separate investment
portfolios. These financial statements relate to Treasury Portfolio (the
"Treasury Portfolio"), which is a series of Core Trust. The Treasury Portfolio
is a diversified portfolio that commenced operations on February 21, 1996.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Treasury Portfolio's financial statements are prepared in accordance with
generally accepted accounting principles which permits management to make
certain estimates and assumptions at the date of the financial statements and
are based, in part, on the following accounting policies.
SECURITY VALUATION-Securities are valued at amortized cost under the Investment
Company Act of 1940. Under the amortized cost method, a portfolio instrument is
valued at cost and any premium or discount is amortized on a constant basis to
maturity. Amortization of premium and accretion of market discount is charged to
income.
FEDERAL INCOME TAX-The Treasury Portfolio is treated as a partnership for
Federal income tax purposes. Any interest, gains or losses of the Treasury
Portfolio are deemed to be passed through to the Treasury Portfolio's
interestholders. As a partnership, no Federal income tax provision is required.
OTHER-Investment security transactions are recorded on trade date. Realized
gains and losses on investments sold are recorded on the basis of identified
cost.
NOTE 3. INVESTMENT ADVISORY AND RELATED SERVICES
The investment adviser for the Treasury Portfolio is Forum Advisors, Inc.
("Forum Advisors"). Forum Advisors receives an advisory fee at an annual rate of
0.05% of the average daily net assets of the Treasury Portfolio. Linden Asset
Management, Inc. ("Linden") also provides investment advisory services to the
Portfolio. Linden's advisory fee is paid by Forum Advisors. Payments to Linden
do not increase the amount paid by Core Trust to Forum Advisors.
Forum Financial Corp. ("FFC") serves as the Treasury Portfolio's fund accountant
and is compensated for those services at an amount of $36,000 per year plus
$6,000 for each investor in the portfolio, subject to adjustments for the number
and type of portfolio transactions.
The administrator of Core Trust is Forum Financial Services, Inc. ("Manager"), a
registered broker-dealer and a member of the National Association of Securities
Dealers, Inc. The Manager receives an administrative fee for its services with
respect to the Treasury Portfolio at an annual rate of 0.10% of its average
daily net assets.
The Manager also acts as Core Trust's placement agent pursuant to a separate
agreement with Core Trust.
FFC, Forum Advisors and the Manager are affiliated companies. For the six months
year ended September 30, 1996 expenses reimbursed and fees waived by the Manager
were $13,564 and $20,032, respectively.
36 CORE TRUST (DELAWARE)
<PAGE>
[LOGO] MANAGER AND DISTRIBUTOR
Forum Financial Services, Inc.
TRANSFER AGENT
Forum Financial Corp.
FORUM FUNDS
P.O. Box 446
Portland, ME 04112
207-879-0001 (IN PORTLAND, ME)
800-94FORUM (ELSEWHERE)
