FORUM FUNDS INC, 497, 1996-09-17

FORUM FUNDS INC
497, 1996-09-17

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FORUM FUNDS
PROSPECTUS

AUGUST 1, 1996

DAILY ASSETS
TREASURY FUND

DAILY ASSETS
GOVERNMENT FUND

DAILY ASSETS CASH FUND

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TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page

<C> <S> <C>
1. Prospectus Summary................... 2

2. Financial Highlights................. 4

3. Investment Objective and Policies.... 4

4. Management........................... 8

5. Purchases and Redemptions of 10
Shares..............................

6. Dividends and Tax Matters............ 15

7. Other Information.................... 16

Account Application
</TABLE>

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FORUM FUNDS

DAILY ASSETS TREASURY FUND
DAILY ASSETS GOVERNMENT FUND
[LOGO]
DAILY ASSETS CASH FUND

ACCOUNT INFORMATION AND
SHAREHOLDER SERVICING:
Forum Financial Corp.
P.O. Box 446
Portland, Maine 04112
(207) 879-0001
(800) 94 Forum
PROSPECTUS

August 1, 1996
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This Prospectus offers shares of Daily Assets Treasury Fund, Daily Assets
Government Fund and Daily Assets Cash Fund (each a "Fund"), which are
diversified portfolios of Forum Funds (the "Trust"), an open-end, management
investment company. Each Fund's investment objective is to seek to provide its
shareholders with high current income to the extent consistent with the
preservation of capital and the maintenance of liquidity.

DAILY ASSETS TREASURY FUND invests primarily in obligations issued or
guaranteed by the United States Treasury or by certain agencies and
instrumentalities of the United States Government with a view toward
providing income that is generally considered exempt from state and local
income taxes.

DAILY ASSETS GOVERNMENT FUND invests primarily in obligations of the U.S.
Government, its agencies and instrumentalities, and in repurchase
agreements backed by these obligations.

DAILY ASSETS CASH FUND invests in a broad spectrum of high-quality money
market instruments.

EACH FUND CURRENTLY SEEKS TO ACHIEVE ITS OBJECTIVE BY INVESTING ALL OF ITS
INVESTABLE ASSETS IN A SEPARATE PORTFOLIO OF A REGISTERED, OPEN-END MANAGEMENT
INVESTMENT COMPANY WITH AN IDENTICAL INVESTMENT OBJECTIVE. SEE "PROSPECTUS
SUMMARY" AND "OTHER INFORMATION - FUND STRUCTURE."

Shares of the Funds are offered to investors at a price equal to the next
determined net asset value without any sales charge.

This Prospectus sets forth concisely the information concerning the Trust and
the Funds that a prospective investor should know before investing. The Trust
has filed with the Securities and Exchange Commission ("SEC") a Statement of
Additional Information dated August 1, 1996, as may be amended from time to time
(the "SAI"), which contains more detailed information about the Trust and the
Funds and which is incorporated into this Prospectus by reference. The SAI is
available without charge by contacting the Trust at the address listed above.

INVESTORS SHOULD READ THIS PROSPECTUS AND RETAIN IT FOR FUTURE REFERENCE.

FUND SHARES ARE NOT OBLIGATIONS, DEPOSITS OR ACCOUNTS OF, OR ENDORSED OR
GUARANTEED BY, ANY BANK OR ANY AFFILIATE OF A BANK AND ARE NOT INSURED OR
GUARANTEED BY THE U.S. GOVERNMENT, THE FDIC, THE FEDERAL RESERVE SYSTEM OR ANY
OTHER FEDERAL AGENCY.

THERE CAN BE NO ASSURANCE THAT ANY FUND WILL BE ABLE TO MAINTAIN A STABLE NET
ASSET VALUE OF $1.00 PER SHARE.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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1. PROSPECTUS SUMMARY

HIGHLIGHTS OF THE FUNDS

THE FUNDS. Each Fund seeks to achieve its investment objective by investing
all of its investable assets in a separate series of Core Trust (Delaware)
("Core Trust"), itself a registered open-end management investment company.
Daily Assets Treasury Fund, Daily Assets Government Fund and Daily Assets Cash
Fund invest in each of Treasury Portfolio, Government Cash Portfolio and Cash
Portfolio (each a "Portfolio" and collectively the "Portfolios"), respectively.
Accordingly, the investment experience of each Fund will correspond directly
with the investment experience of its corresponding Portfolio. See "Other
Information - Fund Structure."

MANAGEMENT. Forum Financial Services, Inc. ("Forum") supervises the overall
management of the Funds and is the distributor of the Funds' shares. Forum
Advisors, Inc. ("Forum Advisors") is the investment adviser of Treasury
Portfolio and provides professional management of that Portfolio's investments.
Linden Asset Management, Inc. ("Linden") is the investment adviser of Government
Cash Portfolio and Cash Portfolio and provides professional management of those
Portfolios' investments. Forum Advisors and Linden provide certain subadvisory
assistance for the Portfolio's they do not directly advise. The Trust's transfer
agent, dividend disbursing agent and shareholder servicing agent (the "Transfer
Agent") is Forum Financial Corp. See "Management."

SHAREHOLDER SERVICING. The Trust has adopted a Shareholder Service Plan
relating to Shares of each Fund under which Forum is compensated for various
shareholder servicing activities. See "Management - Shareholder Servicing."

PURCHASES AND REDEMPTIONS. Shares of the Funds may be purchased and
redeemed Monday through Friday except on customary national business holidays,
Good Friday and other days that the Federal Reserve Bank of San Francisco is
closed ("Fund Business Days"). Shares of the Funds are offered without a sales
charge and may be redeemed without charge at the next determined net asset
value. The minimum initial investment is $10,000 ($2,000 for IRAs, $2,500 for
exchanges) and the minimum subsequent investment is $500. Shareholders may elect
to have redemptions of over $5,000 transferred by bank wire to a designated bank
account. See "Purchases and Redemptions of Shares."

EXCHANGE PROGRAM. Shareholders of a Fund may exchange their shares without
charge for shares of the other Funds and for the shares of certain other funds
of the Trust not offered by this Prospectus. See "Purchases and Redemptions of
Shares - Exchanges."

DIVIDENDS. Dividends of net investment income are declared daily and paid
monthly by each Fund and are reinvested in Fund shares unless a shareholder
elects to have them paid in cash. See "Dividends and Tax Matters."

RISK FACTORS. There can be no assurance that either Fund will achieve its
investment objective, nor can there be any assurance that either Fund will
maintain a stable net asset value of $1.00 per share. Although the Funds invest
in money market instruments, an investment in any Fund involves certain risks,
depending on the types of investments made and the types of investment
techniques employed. All investments by the Funds entail some risk. Certain
investments and investment techniques, however, entail additional risks,
such as investments in variable and floating rate securities, zero-coupon
securities and forward commitment securities. The use of leverage by a
Fund through borrowings and other investment techniques involves additional
risks. For more details about each Fund and its investments and risks, see
"Investment Objective and Policies." By investing solely in Daily Assets
Government Portfolio and Daily Assets Cash Portfolio, Daily Assets Government
Fund and Daily Assets Cash Fund, respectively, may achieve certain efficiencies
and economies of scale. Nonetheless,

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these investments could also have potential adverse effects on the applicable
Fund. Investors in the Funds should consider these risks, as described under
"Other Information - Core Trust Structure."

EXPENSES OF INVESTING IN THE FUNDS

The purpose of the following table is to assist investors in understanding
the various expenses that an investor in a Fund will bear directly or
indirectly. The table reflects the combined expenses of each Fund and its
corresponding Portfolio. There are no transaction expenses associated with
purchases, redemptions or exchanges of Fund shares.

ANNUAL FUND OPERATING EXPENSES (1)(2)

(as a percentage of average net assets, after applicable expense reimbursements)

<TABLE>
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Daily Assets
Daily Assets Government Daily Assets
Treasury Fund Fund Cash Fund
------------- ------------- -------------
<S> <C> <C> <C>
Management Fees
(after waivers)
(3)................ 0.20% 0.09% 0.07%
Rule 12b-1 Fees..... None None None
Other Expenses
(after
reimbursements).... 0.30% 0.46% 0.48%
------ ------ ------
Total Fund Operating
Expenses........... 0.50% 0.55% 0.55%
</TABLE>

(1) For a further description of the various expenses incurred in the
operation of the Funds and the Portfolios, see "Management." Expenses for Daily
Assets Treasury Fund are based on actual expenses incurred during the Fund's
most recent fiscal year ended March 31, 1996. Expenses for Daily Assets
Government Fund and Daily Assets Cash Fund are estimated annualized expenses for
the Funds' first fiscal year of operations. Absent expense reimbursement
(estimated reimbursements in the case of Daily Assets Government Fund and Daily
Assets Cash Fund), "Management Fees" for each of Daily Assets Treasury Fund,
Daily Assets Government Fund and Daily Assets Cash Fund would be 0.59%, 0.78%
and 0.81%, respectively, and "Total Fund Operating Expenses" would be 1.06%,
1.02% and 1.06%, respectively. Expense reimbursements and fee waivers are
voluntary and may be reduced or eliminated at any time.

(2) Each Fund's expenses include the Fund's pro rata portion of all
operating expenses of the corresponding Portfolio, which will be borne
indirectly by Fund shareholders. The Trust's board of trustees believes that the
aggregate per share expenses of each Fund and its respective Portfolio will be
approximately equal to the expenses the Fund would incur if its assets were
invested directly in money market securities.

(3) Management Fees include all administration fees and investment advisory
fees incurred by the Funds and the Portfolios; as long as its assets are
invested in a Portfolio, a Fund pays no investment advisory fees directly.

EXAMPLE

Following is a hypothetical example that indicates the dollar amount of
expenses that an investor in a Fund would pay assuming (i) the investment of all
of the Fund's assets in the Portfolio, (ii) a $1,000 investment in the Fund,
(iii) a 5% annual return, (iv) the reinvestment of all dividends and
distributions and (v) redemption at the end of each period:

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Daily Assets Treasury
Fund.................... $5 $16 $28 $63
Daily Assets Government
Fund.................... $6 $18 N/A N/A
Daily Assets Cash Fund... $6 $18 N/A N/A
</TABLE>

The example is based on the expenses listed in the Annual Fund Operating
Expenses table, which assumes the continued waiver and reimbursement of certain
fees and expenses. The five percent annual return is not predictive of and does
not represent the Fund's projected returns; rather, it is required by government
regulation. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OR RETURN. ACTUAL EXPENSES AND RETURN MAY BE GREATER OR LESS
THAN INDICATED.

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2. FINANCIAL HIGHLIGHTS

The following information represents selected data for a single share
outstanding of Daily Assets Treasury Fund. This information was audited by
Deloitte & Touche LLP, independent auditors. The financial statements and
independent auditors' report thereon for the fiscal year ended March 31, 1996
are incorporated by reference into the SAI. Further information about the Fund's
performance is contained in the Fund's annual report to shareholders which may
be obtained from the Trust without charge. As of July 31, 1996, Daily Assets
Government Fund and Daily Assets Cash Fund had not commenced operations.

<TABLE>
<CAPTION>
DAILY ASSETS TREASURY FUND
Year Ended March 31,
----------------------------------------------------
1996 1995 1994 1993(1)
----------- ------- ------- -----------
<S> <C> <C> <C> <C>
Beginning Net Asset Value per Share $1.00 $1.00 $1.00 $1.00
----------- ------- ------- -----------
Net Investment Income 0.05 0.04 0.03 0.02
Dividends from Net Investment Income (0.05) (0.04) (0.03) (0.02)
----------- ------- ------- -----------
Ending Net Asset Value per Share $1.00 $1.00 $1.00 $1.00
----------- ------- ------- -----------
----------- ------- ------- -----------
Ratios to Average Net Assets:
Expenses (2) 0.50%(4) 0.37% 0.33% 0.22%(3)
Net Investment Income 5.01% 4.45% 2.82% 2.92%(3)
Gross Expenses (2) 1.06%(4) 1.10% 1.17% 2.43%(3)
Total Return 5.18% 4.45% 2.83% 3.13%(3)
Net Assets at the End of Period (000's
Omitted) $43,103 $36,329 $26,505 $4,687
</TABLE>

(1) The Fund commenced operations on July 1, 1992.

(2) During the periods, 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:

(3) Annualized.

(4) Includes expenses allocated from Treasury Portfolio of Core Trust (Delaware)
of 0.02%, net of waivers of 0.07%.

3. INVESTMENT OBJECTIVE AND POLICIES

Each Fund has a fundamental investment policy that allows it to invest all
of its investable assets in its corresponding Portfolio. All other investment
policies of each Fund and its corresponding Portfolio are substantially
identical. Therefore, although the following discusses the investment policies
of the Portfolios (and the responsibilities of Core Trust's board of trustees
(the "Core Trust Board")), it applies equally to the Funds (and the Trust's
board of trustees (the "Board")).

INVESTMENT OBJECTIVE

The investment objective of each Fund is to provide high current income to
the extent consistent with the preservation of capital and the maintenance of
liquidity. Each Fund currently seeks to achieve its investment objective by
investing all of its investable assets in its corresponding Portfolio, which has
the same investment objective. There

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can be no assurance that any Fund or Portfolio will achieve its investment
objective or maintain a stable net asset value.

INVESTMENT POLICIES

Each Portfolio invests only in high quality, short-term money market
instruments that are determined by its investment adviser, pursuant to
procedures adopted by the Core Trust Board, to be eligible for purchase and to
present minimal credit risks. High quality instruments include those that (i)
are rated (or, if unrated, are issued by an issuer with comparable outstanding
short-term debt that is rated) in the highest rating category by two nationally
recognized statistical rating organizations ("NRSROs") or, if only one NRSRO has
issued a rating, by that NRSRO or (ii) are otherwise unrated and determined by
the Adviser to be of comparable quality. A description of the rating categories
of certain NRSROs, such as Standard & Poor's and Moody's Investors Service,
Inc., is contained in the SAI.

Each Portfolio invests only in U.S. dollar-denominated instruments that have
a remaining maturity of 397 days or less (as calculated under Rule 2a-7 under
the Investment Company Act of 1940 (the "1940 Act")) and maintains a dollar-
weighted average portfolio maturity of 90 days or less. Except to the limited
extent permitted by Rule 2a-7 and except for U.S. Government Securities, each
Portfolio will not invest more than 5% of its total assets in the securities of
any one issuer. As used herein, "U.S. Government Securities" means obligations
issued or guaranteed as to principal and interest by the United States
Government, its agencies or instrumentalities.

A portfolio's yield will tend to fluctuate inversely with prevailing market
interest rates. For instance, in periods of falling market interest rates,
yields will tend to be somewhat higher than those rates. Although each Portfolio
only invests in high quality money market instruments, an investment in a
Portfolio is subject to risk even if all securities in the Portfolio's portfolio
are paid in full at maturity. All money market instruments, including U.S.
Government Securities, can change in value when there is a change in interest
rates, the issuer's actual or perceived creditworthiness or the issuer's ability
to meet its obligations.

TREASURY PORTFOLIO

Treasury Portfolio seeks to attain its investment objective by investing
primarily in obligations issued or guaranteed as to principal and interest by
the United States Treasury ("U.S. Treasury Securities"). Under normal market
conditions, the Portfolio will invest at least 65% of its total assets in U.S.
Treasury Securities, such as Treasury bills and notes. The Portfolio may also
invest up to 35% of its total assets in other U.S. Government Securities. The
Portfolio invests with a view toward providing income that is generally
considered exempt from state and local income taxes. The Portfolio will purchase
a U.S. Government Security that is not backed by the full faith and credit of
the U.S. Government only if that security has a remaining maturity of thirteen
months or less.

Among the U.S. Government Securities in which the Portfolio may invest are
obligations of the Farm Credit System, Farm Credit System Financial Assistance
Corporation, Federal Financing Bank, Federal Home Loan Banks, General Services
Administration, Student Loan Marketing Association, and Tennessee Valley
Authority. See "Investment Policies - Government Cash Portfolio." Income on
these obligations and the obligations of certain other agencies and
instrumentalities is generally not subject to state and local income taxes by
Federal law. In addition, the income received by Fund shareholders that is
attributable to these investments will also be exempt in most states from state
and local income taxes. Shareholders should determine through consultation with
their own tax advisers whether and to what extent dividends payable by the Fund
from interest received with respect to its investments will be considered to be
exempt from state and local

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income taxes in the shareholder's state. Shareholders similarly should determine
whether the capital gain and other income, if any, payable by the Fund will be
subject to state and local income taxes in the shareholder's state. See
"Dividend and Tax Matters."

U.S. GOVERNMENT ZERO COUPON SECURITIES. The Portfolio may invest in
separately traded principal and interest components of securities issued or
guaranteed by the U.S. Treasury under the Treasury's Separate Trading of
Registered Interest and Principal of Securities ("STRIPS") program. Zero coupon
securities are sold at original issue discount and pay no interest to holders
prior to maturity. Because of this, zero coupon securities may be subject to
greater fluctuation of market value than the other securities in which the
Portfolio may invest. See "Dividends and Tax Matters - Taxes."

GOVERNMENT CASH PORTFOLIO

Government Cash Portfolio seeks to attain its investment objective by
investing, under normal circumstances, at least 65% of its assets in U.S.
Government Securities and in repurchase agreements backed by U.S. Government
Securities. The U.S. Government Securities in which the Portfolio may invest
include securities issued by the U.S. Treasury and obligations issued or
guaranteed by U.S. Government agencies and instrumentalities that are backed by
the full faith and credit of the U.S. Government, such as those guaranteed by
the Small Business Administration. In addition, the U.S. Government Securities
in which the Portfolio may invest include securities supported primarily or
solely by the creditworthiness of the issuer, such as securities of the Federal
National Mortgage Association. There is no guarantee that the U.S. Government
will support securities not backed by its full faith and credit. Accordingly,
although these securities have historically involved little risk of loss of
principal if held to maturity, they may involve more risk than securities backed
by the U.S. Government's full faith and credit.

CASH PORTFOLIO

Cash Portfolio seeks to attain its investment objective by investing in a
broad spectrum of money market instruments. The Portfolio may invest in (i)
obligations of domestic financial institutions, (ii) U.S. Government Securities
(see "Investment Policies - Government Cash Portfolio") and (iii) corporate debt
obligations of domestic issuers.

Financial institution obligations include negotiable certificates of
deposit, bank notes, bankers' acceptances and time deposits of banks (including
savings banks and savings associations) and their foreign branches. The
Portfolio limits its investments in bank obligations to banks which at the time
of investment have total assets in excess of one billion dollars. Certificates
of deposit represent an institution's obligation to repay funds deposited with
it that earn a specified interest rate over a given period. Bank notes are debt
obligations of a bank. Bankers' acceptances are negotiable obligations of a bank
to pay a draft which has been drawn by a customer and are usually backed by
goods in international trade. Time deposits are non-negotiable deposits with a
banking institution that earn a specified interest rate over a given period.
Certificates of deposit and fixed time deposits, which are payable at the stated
maturity date and bear a fixed rate of interest, generally may be withdrawn on
demand by the Portfolio but may be subject to early withdrawal penalties which
could reduce the Portfolio's yield.

Corporate debt obligations include commercial paper (short-term promissory
notes) issued by companies to finance their, or their affiliates', current
obligations. The Portfolio may also invest in commercial paper or other
corporate securities issued in "private placements" that are restricted as to
disposition under the Federal securities laws ("restricted securities"). Any
sale of these securities may not be made absent registration under the

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Securities Act of 1933 or the availability of an appropriate exemption
therefrom. Some of these restricted securities, however, are eligible for resale
to institutional investors, and accordingly, a liquid market may exist for them.
Pursuant to guidelines adopted by the Core Trust Board, the investment adviser
will determine whether each such investment is liquid.

ADDITIONAL INVESTMENT POLICIES

Each Fund's and each Portfolio's investment objective and certain investment
limitations, as described in the SAI, are fundamental and therefore, may not be
changed without approval of the holders of a majority of the Fund's or
Portfolio's, as applicable, outstanding voting securities (as defined in the
1940 Act). Except as otherwise indicated herein or in the SAI, investment
policies of a Fund or a Portfolio may be changed by the applicable board of
trustees without shareholder approval. Each Portfolio may borrow money for
temporary or emergency purposes (including the meeting of redemption requests),
but, as a individual policy, not in excess of 33 1/3% of the value of the
Portfolio's total assets. Borrowing for purposes other than meeting redemption
requests will not exceed 5% of the value of the Portfolio's total assets. Each
Portfolio is permitted to hold cash in any amount pending investment in
securities and may invest in other investment companies that intend to comply
with Rule 2a-7 and have substantially similar investment objectives and
policies. A further description of the Funds' and the Portfolios' investment
policies is contained in the SAI.

REPURCHASE AGREEMENTS. Each of Government Cash Portfolio and Cash Portfolio
may seek additional income by entering into repurchase agreements. Repurchase
agreements are transactions in which a Portfolio purchases a security and
simultaneously commits to resell that security to the seller at an agreed-upon
price on an agreed-upon future date, normally one to seven days later. The
resale price reflects a market rate of interest that is not related to the
coupon rate or maturity of the purchased security. Core Trust holds the
underlying collateral, which is maintained at not less than 100% of the
repurchase price. Repurchase agreements involve certain credit risks not
associated with direct investment in securities. The Portfolios, however, intend
to enter into repurchase agreements only with sellers which Linden believes
present minimal credit risks in accordance with guidelines established by the
Core Trust Board. In the event that a seller defaulted on its repurchase
obligation, however, a Portfolio might suffer a loss.

LIQUIDITY. To ensure adequate liquidity, each Portfolio may not invest more
than 10% of its net assets in illiquid securities, including in the case of
Government Cash Portfolio and Cash Portfolio, repurchase agreements not
entitling the Portfolio to payment of principal within seven days. There may not
be an active secondary market for securities held by a Portfolio. Linden
monitors the liquidity of the Portfolios' investments.

WHEN-ISSUED AND FORWARD COMMITMENT SECURITIES. In order to assure itself of
being able to obtain securities at prices which Linden believes might not be
available at a future time, each Portfolio may purchase securities on a
when-issued or delayed delivery basis. When these transactions are negotiated,
the price or yield is fixed at the time the commitment is made, but delivery and
payment for the securities take place at a later date. Securities so purchased
are subject to market price fluctuation and no interest on the securities
accrues to a Portfolio until delivery and payment take place. Accordingly, the
value of the securities on the delivery date may be more or less than the
purchase price. Commitments for when-issued or delayed delivery transactions
will be entered into only when a Portfolio has the intention of actually
acquiring the securities, but the Portfolio may sell the securities before the
settlement date if deemed advisable. Failure by the other party to deliver a
security purchased by a Portfolio may result in a loss or missed opportunity to
make an alternative investment. The Trust's custodian will set aside and
maintain in a segregated account cash and certain liquid, high-

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grade debt securities with a market value at all times equal to the amount of
the Fund's forward commitment obligations. As a result of entering into forward
commitments, the Funds are exposed to greater potential flucuations in the value
of their assets and net asset values per share.

VARIABLE AND FLOATING RATE SECURITIES. The securities in which the
Portfolios invest may have variable or floating rates of interest. These
securities pay interest at rates that are adjusted periodically according to a
specified formula, usually with reference to some interest rate index or market
interest rate. The interest paid on these securities is a function primarily of
the index or market rate upon which the interest rate adjustments are based.
Those securities with ultimate maturities of greater than 397 days may be
purchased only pursuant to Rule 2a-7. Under that Rule, only those long-term
instruments that have demand features which comply with certain requirements and
certain U.S. Government Securities may be purchased. Similar to fixed rate debt
instruments, variable and floating rate instruments are subject to changes in
value based on changes in market interest rates or changes in the issuer's
creditworthiness.

No Portfolio may purchase a variable or floating rate security whose
interest rate is adjusted based on a long-term interest rate or index, on more
than one interest rate or index, or on an interest rate or index that materially
lags behind short-term market rates (these prohibited securities are often
referred to as "derivative" securities). All variable and floating rate
securities purchased by a Portfolio will have an interest rate that is adjusted
based on a single short-term rate or index, such as the Prime Rate.

FINANCIAL INSTITUTION GUIDELINES. Government Cash Portfolio invests only in
instruments which, if held directly by a bank or bank holding company organized
under the laws of the United States or any state thereof, would be assigned to a
risk-weight category of no more than 20% under the current risk based capital
guidelines adopted by the Federal bank regulators. In addition the Portfolio
does not intend to hold in its portfolio any securities or instruments that
would be subject to restriction as to amount held by a National bank under Title
12, Section 24 (Seventh) of the United States Code. See "Investments By
Financial Institutions" in the SAI. In addition, the Portfolio limits its
investments to those permissible for Federally chartered credit unions under
applicable provisions of the Federal Credit Union Act and the applicable rules
and regulations of the National Credit Union Administration. Government Cash
Portfolio limits its investments to investments that are legally permissible for
Federally chartered savings associations without limit as to percentage and to
investments that permit Fund shares to qualify as liquid assets and as
short-term liquid assets.

4. MANAGEMENT

The business of the Trust is managed under the direction of the Board and
the business of Core Trust is managed under the direction the Core Trust Board.
The board formulates the general policies of the Funds and meets periodically to
review the results of the Funds, monitor investment activities and practices and
discuss other matters affecting the Funds and the Trust. The Core Trust Board
performs similar functions for the Portfolios and Core Trust. The SAI contains
general background information about the trustees and officers of the Trust and
Core Trust.

MANAGER AND DISTRIBUTOR

Subject to the supervision of the Board, Forum supervises the overall
management of the Trust and acts as distributor of the Trust's shares. Forum,
Forum Advisors and the Transfer Agent are members of the Forum Financial Group
of companies ("Forum") and together provide a full range of services to the
investment company and financial services industry. As of the date hereof, Forum
acted as manager and distributor of registered investment companies and
collective trust

8
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funds with assets of approximately $16 billion. Forum is a registered
broker-dealer and investment adviser and is a member of the National Association
of Securities Dealers, Inc. As of the date of this Prospectus, Forum, Forum
Advisors and the Transfer Agent were controlled by John Y. Keffer, President and
Chairman of the Trust.

Forum supervises all aspects of the Funds' operations, including the receipt
of services for which the Trust is obligated to pay, provides the Trust with
general office facilities and certain persons to serve as officers and provides,
at the Trust's expense, the services of persons necessary to perform such
supervisory, administrative and clerical functions as are needed to operate the
Trust effectively. Those officers, as well as certain employees and Trustees of
the Trust, may be directors, officers or employees of (and persons providing
services to the Trust may include) Forum and its affiliates. For these services
and facilities, Forum receives a fee at an annual rate of 0.10% of the daily net
assets of Daily Assets Treasury Fund and a fee at an annual rate of 0.15% of the
daily net assets of each of the Daily Assets Government Fund and Daily Assets
Cash Fund. Forum also serves as administrator of Core Trust and provides
administrative services for each Portfolio that are similar to those provided to
the Funds. For its administrative services to the Portfolios Forum receives a
fee at an annual rate of 0.10% of the daily net assets of Treasury Portfolio and
0.05% of the daily net assets of each of Government Cash Portfolio and Cash
Portfolio. As distributor of each Fund, Forum acts as the agent of the Trust in
connection with the offering of shares of the Funds. Forum receives no fee for
distribution of Fund shares.

ADVISERS

Subject to the general supervision of the Core Trust Board, Forum Advisors
makes investment decisions for Treasury Portfolio and monitors that Portfolio's
investments and Linden makes investment decisions for Government Cash Portfolio
and Cash Portfolio and monitors those Portfolios' investments. Forum Advisors,
which is located at Two Portland Square, Portland, Maine 04101, provides
investment advisory services to five other mutual funds. Linden, which is
located at 812 N. Linden Drive, Beverly Hills, California 90210, is controlled
by Anthony R. Fischer, Jr., who is its sole stockholder, director, and officer,
and provides investment advisory services to one other portfolio of Core Trust.
Forum Advisors and Linden act also as investment sub-advisers to the Portfolios
that they do not manage on a daily basis and from time to time may provide each
other with assistance regarding the other's advisory responsibilities. These
services may include management of part of or all of the Portfolios' investment
portfolios.

For its services, Forum Advisors receives an advisory fee at an annual rate
of 0.05% of Treasury Portfolio's average daily net assets. For its services,
Linden receives from each of Government Cash Portfolio and Cash Portfolio an
advisory fee based upon the total average daily net assets of those Portfolios
and the other portfolio of Core Trust that Linden advises ("Total Portfolio
Assets"). Linden's fee is calculated at an annual rate on a cumulative basis as
follows: 0.05% of the first $200 million of Total Portfolio Assets, 0.03% of the
next $300 million of Total Portfolio Assets, and 0.02% of the remaining Total
Portfolio Assets. A Fund's expenses include the Fund's pro rata portion of the
advisory fee paid by the corresponding Portfolio. To the extent Forum Advisors
or Linden has delegated its responsibilities to the other, Forum Advisors or
Linden pays its advisory fee accrued for such period of time to the other.
Currently, it is anticipated that Linden will delegate responsibility for
portfolio management infrequently to Forum Advisors.

SHAREHOLDER SERVICING

Shareholder inquiries and communications concerning the Funds may
be directed to the Transfer Agent at the address and telephone numbers on the
first page of this Prospectus. The Transfer Agent maintains for each
shareholder of record, an account (unless such accounts are maintained by
sub-transfer agents) to which all shares purchased are credited,
together with any distributions that are reinvested in additional
shares. The Transfer

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<PAGE>

Agent also performs other transfer agency functions and acts as dividend
disbursing agent for the Trust. For its services, the Transfer Agent is
paid a transfer agent fee at an annual rate of 0.25% of the average daily
net assets of each Fund attributable to Institutional Shares plus $12,000
per year and certain account and additional class charges and is reimbursed
for certain expenses incurred on behalf of the Funds.

The Transfer Agent is authorized to subcontract any or all of its functions
to one or more qualified sub-transfer agents or processing agents, which may be
its affiliates, who agree to comply with the terms of the Transfer Agent's
agreement with the Trust. The Transfer Agent may pay those agents for their
services, but no such payment will increase the Transfer Agent's compensation
from the Trust. Forum Financial Corp. performs portfolio accounting services for
the Fund, including determination of the Fund's net asset value per share,
pursuant to a separate agreement with the Trust and is paid a fee for these
services.

EXPENSES OF THE TRUST

The Fund's expenses comprise Trust expenses attributable to the Fund, which
are charged to the Fund, and expenses not attributable to a particular fund of
the Trust, which are allocated among the Fund and all other funds of the Trust
in proportion to their average net assets. Subject to any obligations of Forum
or Forum Advisors to reimburse the Trust for excess expenses, the Trust pays for
all of its expenses. Each service provider in its sole discretion may elect to
waive (or continue to waive) all or any portion of its fees, which are accrued
daily and paid monthly, and may reimburse a Fund for certain expenses. Any such
waivers or reimbursements would have the effect of increasing a Fund's
performance for the period during which the waiver was in effect and would not
be recouped at a later date.

5. PURCHASES AND REDEMPTIONS OF SHARES

GENERAL INFORMATION

All transactions in Fund shares are effected through the Transfer Agent,
which accepts orders for purchases and redemptions from shareholders of record
and new investors. Shareholders of record will receive from the Trust periodic
statements listing all account activity during the statement period. The Trust
reserves the right in the future to modify, limit or terminate any shareholder
privilege, upon appropriate notice to shareholders, and may charge a fee for
certain shareholder services, although no such fees are currently contemplated.

PURCHASES. Fund shares are sold at a price equal to their net asset value
next-determined after acceptance of an order, on all weekdays except customary
national business holidays and Good Friday ("Fund Business Day"). Fund shares
are issued immediately after an order for the shares in proper form, accompanied
by funds on deposit at a Federal Reserve Bank ("Federal Funds"), is accepted by
the Transfer Agent. Daily Assets Treasury Fund's net asset value is calculated
at 12:00 p.m., Eastern time, and Daily Assets Government Fund's and Daily Assets
Cash Fund's net asset value is calculated at 2:00 p.m., Eastern time. Fund
shares become entitled to receive dividends on the next Fund Business Day after
the order is accepted.

Each Fund reserves the right to reject any subscription for the purchase of
Fund shares. Stock certificates are issued only to shareholders of record upon
their written request and no certificates are issued for fractional shares.

REDEMPTIONS. Fund shares may be redeemed without charge at their net asset
value on any Fund Business Day. There is no minimum period of investment and no
restriction on the frequency of redemptions. Fund shares are redeemed as of the
next determination of the Fund's net asset value following acceptance by the
Transfer Agent

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<PAGE>

of the redemption order in proper form (and any supporting documentation
which the Transfer Agent may require). Shares redeemed are not entitled
to receive dividends declared on or after the day on which the
redemption becomes effective.

Normally, redemption proceeds are paid immediately, but in no event later
than seven days, following acceptance of a redemption order. Proceeds of
redemption requests (and exchanges), however, will not be paid unless any check
used to purchase the shares has been cleared by the shareholder's bank, which
may take up to 15 calendar days. This delay may be avoided by investing through
wire transfers. Unless otherwise indicated, redemption proceeds normally are
paid by check mailed to the shareholder's record address. The right of
redemption may not be suspended nor the payment dates postponed for more than
seven days after the tender of the Shares to the Fund except when the New York
Stock Exchange is closed (or when trading thereon is restricted) for any reason
other than its customary weekend or holiday closings or under any emergency or
other circumstance as determined by the SEC.

Proceeds of redemptions normally are paid in cash. However, payments may be
made wholly or partially in portfolio securities if the Board determines that
payment in cash would be detrimental to the best interests of the Fund. The
Trust will only effect a redemption in portfolio securities if the particular
shareholder is redeeming more than $250,000 or 1% of the Fund's net assets,
whichever is less, during any 90-day period.

The Trust employs reasonable procedures to ensure that telephone orders are
genuine (which include recording certain transactions and the use of shareholder
security codes). If the Trust did not employ such procedures, it could be liable
for any losses due to unauthorized or fraudulent telephone instructions.
Shareholders should verify the accuracy of telephone instructions immediately
upon receipt of confirmation statements. During times of drastic economic or
market changes, telephone redemption and exchange privileges may be difficult to
implement. In the event that a shareholder is unable to reach the Transfer Agent
by telephone, requests may be mailed or hand-delivered to the Transfer Agent.

Due to the cost to the Trust of maintaining smaller accounts, the Trust
reserves the right to redeem, upon not less than 60 days' written notice, all
shares in any Fund account with an aggregate net asset value of less than
$1,000.

PURCHASE AND REDEMPTION PROCEDURES

Investors may open an account by completing the application at the back of
this Prospectus or by contacting the Transfer Agent at the address on the first
page of this prospectus. For those shareholder services not referenced on the
account application and to change information regarding a share-
holder's account (such as addresses), investors should request an Optional
Services Form from the Transfer Agent.

INITIAL PURCHASE OF SHARES

There is a $10,000 minimum for initial investments in the Fund ($2,000 for
individual retirement accounts, $2,500 for exchanges).

BY MAIL. Investors may send a check made payable to the Trust along with a
completed account application to the address on the cover page of this
Prospectus. Checks are accepted at full value subject to collection. Payment by
a check drawn on any member of the Federal Reserve System can normally be
converted into Federal Funds within two business days after receipt of the
check. Checks drawn on some non-member banks may take longer.

BY BANK WIRE. To make an initial investment in the Fund using the wire
system for transmittal of money among banks, an investor should first telephone
the Trust at 800-94FORUM (800-943-6786)

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<PAGE>

or (207) 879-0001 to obtain an account number. The investor should then
instruct a bank to wire the investor's money immediately to:

First National Bank of Boston
Boston, Massachusetts
ABA# 011000390
For Credit To: Forum Financial Corp.
Account #: 541-54171
Re: [Name of Fund]
Account #: ______________
Account Name: __________

The investor should then promptly complete and mail the account application.
Any investor planning to wire funds should instruct a bank early in the day so
the wire transfer can be accomplished the same day. There may be a charge
imposed by the bank for transmitting payment by wire, and there also may be a
charge for the use of Federal Funds.

THROUGH FINANCIAL INSTITUTIONS. Shares may be purchased and redeemed
through certain brokers, banks or other financial institutions ("Processing
Organizations"), including affiliates of the Transfer Agent. Processing
Organizations may charge their customers a fee for their services and are
responsible for promptly transmitting purchase, redemption and other requests to
the Fund. The Trust is not responsible for the failure of any institution to
promptly forward these requests.

Investors who purchase or redeem shares in this manner will be subject to
the procedures of their Processing Organization, which may include charges,
limitations, investment minimums, cutoff times and restrictions in addition to,
or different from, those applicable to shareholders who invest in the Fund
directly. These investors should acquaint themselves with their institution's
procedures and should read this Prospectus in conjunction with any materials and
information provided by their institution. Customers who purchase Fund shares
through a Processing Organization may or may not be the shareholder of record
and, subject to their institution's and the Fund's procedures, may have Fund
shares transferred into their name. Certain Processing Organizations may enter
purchase orders with payment to follow. Certain states permit shares to be
purchased and redeemed only through registered broker-dealers, including Forum.

The Trust may confirm purchases and redemptions of a Processing
Organization's customers directly to the Processing Organization, which in turn
will provide its customers with such confirmations and periodic statements as
may be required by law or agreed to between the Processing Organization and its
customers.

SUBSEQUENT PURCHASES OF SHARES

There is a $500 minimum for subsequent purchases. Subsequent purchases may
be made by mailing a check, by sending a bank wire or through a financial
institution as indicated above. Shareholders using the wire system for purchase
should first telephone the Trust at 800-94FORUM (800-943-6786) or (207) 879-0001
to notify it of the wire transfer. All payments should clearly indicate the
shareholder's name and account number.

Shareholders may purchase Fund shares at regular, preselected intervals by
authorizing the automatic transfer of funds from a designated bank account
maintained with a United States banking institution which is an Automated
Clearing House member. Under the program, existing shareholders may authorize
amounts of $250 or more to be debited from their bank account and invested in
the Fund monthly or quarterly. Shareholders may terminate their automatic
investments or change the amount to be invested at any time by written
notification to the Transfer Agent.

REDEMPTION OF SHARES

Shareholders that wish to redeem shares by telephone or by check or receive
redemption proceeds by bank wire must elect these options by properly completing
the appropriate sections of their account application. These privileges may not

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<PAGE>

be available until several weeks after a shareholder's application is received.
Shares for which certificates have been issued may not be redeemed by telephone
or check.

BY MAIL. Shareholders may make a redemption in any amount by sending a
written request to the Transfer Agent accompanied by any stock certificate that
may have been issued to the shareholder. All written requests for redemption
must be signed by the shareholder with signature guaranteed and all certificates
submitted for redemption must be endorsed by the shareholder with signature
guaranteed.

BY TELEPHONE. A shareholder that has elected telephone redemption
privileges may make a telephone redemption request by calling the Transfer Agent
at 800-94FORUM (800-943-6786) or (207) 879-0001 and providing the shareholder's
account number, the exact name in which the shareholder's shares are registered
and the shareholder's social security or taxpayer identification number. In
response to the telephone redemption instruction, the Fund will mail a check to
the shareholder's record address or, if the shareholder has elected wire
redemption privileges, wire the proceeds.

BY BANK WIRE. For redemptions of more than $5,000, a shareholder that has
elected wire redemption privileges may request the Fund to transmit the
redemption proceeds by Federal Funds wire to a bank account designated on the
shareholder's account application. To request bank wire redemptions by
telephone, the shareholder also must have elected the telephone redemption
privilege. Redemption proceeds are transmitted by wire on the day the redemption
request in proper form is received by the Transfer Agent.

AUTOMATIC REDEMPTIONS. Shareholders may redeem Fund shares at regular,
preselected intervals by authorizing the automatic redemption of shares from
their Fund account. Redemption proceeds will be sent either by check or by
automatic transfer to a designated bank account maintained with a United States
banking institution which is an Automated Clearing House member. Under this
program, shareholders may authorize the redemption of shares in amounts of $250
or more from their account monthly or quarterly. Shareholders may terminate
their automatic redemptions or change the amount to be redeemed at any time by
written notification to the Transfer Agent.

OTHER REDEMPTION MATTERS. A signature guarantee is required for any written
redemption request and for any endorsement on a stock certificate. In addition,
a signature guarantee is required for instructions to change a shareholder's
record name or address, designated bank account for wire redemptions or
automatic investment or redemption, dividend election, telephone redemption or
exchange option election or any other option election in connection with the
shareholder's account. Signature guarantees may be provided by any eligible
institution acceptable to the Transfer Agent, including a bank, a broker, a
dealer, a national securities exchange, a credit union, or a savings association
that is authorized to guarantee signatures. Whenever a signature guarantee is
required, the signature of each person required to sign for the account must be
guaranteed.

The Transfer Agent will deem a shareholder's account "lost" if
correspondence to the shareholder's address of record is returned for six
months, unless the Transfer Agent determines the shareholder's new address. When
an account is deemed lost all distributions on the account will be reinvested in
additional shares of the Fund. In addition, the amount of any outstanding
(unpaid for six months or more) checks for distributions that have been returned
to the Transfer Agent will be reinvested and the checks will be canceled.

EXCHANGES

Shareholders may exchange their shares for shares of any other fund of the
Trust or any other mutual fund managed by Forum that participates with the Funds
in the exchange program (currently, Sound Shore Fund, Inc.). Exchanges are
subject to

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<PAGE>

the fees charged by, and the restrictions listed in the prospectus
for, and the fund into which a shareholder is exchanging, including minimum
investment requirements. The minimum amount required to open an account in a
Fund through an exchange from another fund is $2,500. The Funds do not charge
for exchanges, and there is currently no limit on the number of exchanges a
shareholder may make, but each Fund reserves the right to limit excessive
exchanges by any shareholder. See "Additional Purchase and Redemption
Information" in the SAI.

Exchanges may only be made between accounts registered in the same name. A
completed account application must be submitted to open a new account in a Fund
through an exchange if the shareholder requests any shareholder privilege not
associated with the new account. Shareholders may only exchange into a fund if
that fund's shares may legally be sold in the shareholder's state of residence.

The Trust (and Federal tax law) treats an exchange as a redemption of the
shares owned and the purchase of the shares of the fund being acquired.
Accordingly, a shareholder may realize a capital gain or loss with respect to
the shares redeemed. Redemptions and purchases are effected at the respective
net asset values of the two funds as next determined following receipt of proper
instructions and all necessary supporting documents by the fund whose shares are
being exchanged.

If a shareholder exchanges into a fund that imposes a sales charge, that
shareholder is required to pay the difference between that fund's sales charge
and any sales charge the shareholder has previously paid in connection with the
shares being exchanged. For example, if a shareholder paid a 2% sales charge in
connection with the purchase of the shares of a fund and then exchanged those
shares into another fund with a 3% sales charge, that shareholder would pay an
additional 1% sales charge on the exchange. Shares acquired through the
reinvestment of dividends and distributions are deemed to have been acquired
with a sales charge rate equal to that paid on the shares on which the dividend
or distribution was paid. The exchange privilege may be modified materially or
terminated by the Trust at any time upon 60 days' notice to shareholders.

BY MAIL. Exchanges may be accomplished by written instruction to the
Transfer Agent accompanied by any stock certificate that may have been issued to
the shareholder. All written requests for exchanges must be signed by the
shareholder (a signature guaranteed is not required) and all certificates
submitted for exchange must be endorsed by the shareholder with signature
guaranteed.

BY TELEPHONE. Exchanges may be accomplished by telephone by any shareholder
that has elected telephone exchange privileges by calling the Transfer Agent at
800-94FORUM (800-943-6786) or (207) 879-0001 and providing the shareholder's
account number, the exact name in which the shareholder's shares are registered
and the shareholder's social security or taxpayer identification number.

INDIVIDUAL RETIREMENT ACCOUNTS

Each of Daily Assets Government Fund and Daily Assets Cash Fund may be
a suitable investment vehicle for part or all of the assets held in
individual retirement accounts ("IRAs"). The minimum initial investment for
IRAs is $2,000, and the minimum subsequent investment is $500.
Individuals may make tax-deductible IRA contributions of up to a maximum
of $2,000 annually. However, this deduction will be reduced if the
individual or, in the case of a married individual filing jointly either the
individual or the individual's spouse, is an active participant in an
employer-sponsored retirement plan and has adjusted gross income above
certain levels.

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<PAGE>

6. DIVIDENDS AND TAX MATTERS

DIVIDENDS

Dividends of each Fund's net investment income are declared daily and paid
monthly following the close of the last Fund Business Day of the month. Net
capital gain realized by a Fund, if any, will be distributed annually. Fund
shares become entitled to receive dividends on the day the shares are issued.
Shares redeemed are not entitled to receive dividends declared on or after the
day on which the redemption becomes effective.

Shareholders may choose to have all dividends reinvested in additional
shares of the Fund or received in cash. In addition, shareholders may have
dividends of net capital gain reinvested in additional shares of the Fund and
dividends of net investment income paid in cash. All dividends are treated in
the same manner for Federal income tax purposes whether received in cash or
reinvested in shares of the Fund.

All dividends will be reinvested at the Fund's net asset value as of the
payment date of the dividend. All dividends are reinvested unless another option
is selected. All dividends not reinvested will be paid to the shareholder in
cash and may be paid more than seven days following the date on which dividends
would otherwise be reinvested.

TAXES

TAX STATUS OF THE FUNDS. Each Fund intends to qualify or continue to
qualify to be taxed as a "regulated investment company" under the Internal
Revenue Code of 1986. Accordingly, each Fund will not be liable for Federal
income taxes on the net investment income and capital gain distributed to its
shareholders. Because the Funds intend to distribute all of their net investment
income and net capital gain each year, the Funds should also avoid Federal
excise taxes.

Dividends paid by each Fund out of its net investment income (including
realized net short-term capital gain) are taxable to the shareholders of the
Fund as ordinary income. Distributions of net long-term capital gain, if any,
realized by a Fund are taxable to shareholders as long-term capital gain,
regardless of the length of time the Fund shares were held by the shareholder at
the time of distribution.

THE PORTFOLIOS. The Portfolios are not required to pay Federal income taxes
on their net investment income and capital gain, as they are treated as
partnerships for Federal income tax purposes. All interest, dividends and gains
and losses of a Portfolio are deemed to have been "passed through" to the
respective Fund in proportion to the Fund's holdings of the Portfolio,
regardless of whether such interest, dividends or gains have been distributed by
the Portfolio or losses have been realized by the Portfolio.

STATE AND LOCAL. Daily Assets Treasury Fund's investment policies are
structured to provide shareholders, to the extent permissible by Federal and
state law, with income that is exempt or excluded from income taxation at the
state and local level. Many states (by statute, judicial decision or
administrative action) do not tax dividends from a regulated investment company
that are attributable to interest on obligations of the U.S. Treasury and
certain U.S. Government agencies and instrumentalities if the interest on those
obligations would not be taxable to a shareholder that held the obligation
directly. As a result, substantially all dividends paid by this Fund to
shareholders residing in certain states will be exempt or excluded from state
income taxes. A portion of the dividends paid by Daily Assets Government Fund
and Daily Assets Cash Fund to shareholders may be exempt or excluded from state
income taxes, but
these Funds are not managed to provide any specific amount of state tax-free
income to shareholders.

Shortly after the close of each year, a statement is sent to each
shareholder of the Funds advising the shareholder of the portions of total
dividends paid into the shareholder's account that

15
<PAGE>

is derived from each type of obligation in which the Funds have invested.
These portions are determined for the entire year and on a monthly basis
and, thus, are an annual or monthly average, rather than a day-by-day
determination for each shareholder.

GENERAL. Each Fund may be required by Federal law to withhold 31% of
reportable payments (which may include taxable dividends, capital gain
distributions and redemption proceeds) paid to individuals and certain other
non-corporate shareholders. Withholding is not required if a shareholder
certifies that the shareholder's social security or tax identification number
provided to a Fund is correct and that the shareholder is not subject to backup
withholding.

Zero coupon securities are sold at original issue discount and pay no
interest to holders prior to maturity, but the Fund must include a portion of
the original issue discount of the security as income. Because Daily Assets
Treasury Fund distributes all of its net investment income, the Fund may have to
sell portfolio securities to distribute imputed income, which may occur at a
time when Forum Advisors would not have chosen to sell such securities and which
may result in a taxable gain or loss.

Reports containing appropriate information with respect to the Federal
income tax status of dividends and distributions paid during the year by the
Funds will be mailed to shareholders shortly after the close of each year.

The foregoing is only a summary of some of the important Federal and state
tax considerations generally affecting the Fund and its shareholders. There may
be other Federal, state or local tax considerations applicable to a particular
investor. Prospective investors are urged to consult their tax advisors.

7. OTHER INFORMATION

PERFORMANCE INFORMATION

The performance of Institutional Shares of a Fund may be quoted in
advertising in terms of yield or total return. All performance information is
based on historical results, may vary, is not intended to indicate future
performance and, unless otherwise indicated, is net of all expenses. A Fund's
yield is a way of showing the rate of income earned by the Fund as a percentage
of the Fund's share price. Yield is calculated by dividing the net investment
income of a Fund for a seven day period by the average number of shares entitled
to receive dividends and expressing the result as an annualized percentage rate
based on the Fund's share price at the beginning of the seven day period.
Performance information may in part be based upon the performance of the
Portfolio in which a Fund invests.

The Funds' advertisements may also reference ratings and rankings among
similar funds by independent evaluators such as Morningstar, Lipper Analytical
Services, Inc. or IBC/Donoghue, Inc. In addition, the performance of the Funds
may be compared to recognized indices of market performance. The comparative
material found in a Fund's advertisements, sales literature, or reports to
shareholders may contain performance rankings. This material is not to be
considered representative or indicative of future performance.

BANKING LAW MATTERS

Banking laws and regulations generally permit a bank or bank affiliate to
purchase shares of an investment company as agent for and upon the order of a
customer and permit a bank or bank affiliate to serve as a Processing
Organization or perform sub-transfer agent or similar services for
the Trust and its shareholders. If a bank or bank affiliate were prohibited from
performing all or a

16
<PAGE>

part of the foregoing services, its shareholder customers would be
permitted to remain shareholders of the Trust and alternative means for
continuing to service them would be sought.

DETERMINATION OF NET ASSET VALUE

The Trust determines the net asset value per share of Daily Assets Treasury
Fund as of 12:00 p.m., eastern time, and of Daily Assets Government Fund and
Daily Assets Cash Fund as of 2:00 p.m., eastern time, on each Fund Business Day
by dividing the value of the Fund's net assets (I.E., the value of its portfolio
securities and other assets less its liabilities) by the number of the Fund's
shares outstanding at the time the determination is made.

In order to more easily maintain a stable net asset value per share, each
Portfolio's portfolio securities are valued at their amortized cost (acquisition
cost adjusted for amortization of premium or accretion of discount) in
accordance with Rule 2a-7. The Portfolios will only value their portfolio
securities using this method if the Board and the Core Trust Board believes that
it fairly reflects the market-based net asset value per share. If the market
value of a Fund's portfolio deviates more than 1/2 of 1% form the value
determined on the basis of amortized cost, the Board will consider whether any
action should be initiated to prevent any material dilutive effect on
shareholders.

THE TRUST AND ITS SHARES

The Trust is registered with the SEC as an open-end management investment
company and was organized as a business trust under the laws of the State of
Delaware on August 29, 1995. On January 5, 1996 the Trust succeeded to the
assets and liabilities of Forum Funds, Inc. The Board has the authority to issue
an unlimited number of shares of beneficial interest of separate series with no
par value per share and to create classes of shares within each series. There
are currently fifteen series of the Trust.

Each share of each fund of the Trust and each class of shares has equal
dividend, distribution, liquidation and voting rights, and fractional shares
have those rights proportionately, except that expenses related to the
distribution of the shares of each class (and certain other expenses such as
transfer agency and administration expenses) are borne solely by those shares
and each class votes separately with respect to the provisions of any Rule 12b-1
plan which pertain to the class and other matters for which separate class
voting is appropriate under applicable law. Generally, shares will be voted in
the aggregate without reference to a particular portfolio or class, except if
the matter affects only one portfolio or class or voting by portfolio or class
is required by law, in which case shares will be voted separately by portfolio
or class, as appropriate. Delaware law does not require the Trust to hold annual
meetings of shareholders, and it is anticipated that shareholder meetings will
be held only when specifically required by Federal or state law. Shareholders
have available certain procedures for the removal of Trustees. There are no
conversion or preemptive rights in connection with shares of the Trust. All
shares when issued in accordance with the terms of the offering will be fully
paid and nonassessable. Shares are redeemable at net asset value, at the option
of the shareholders, subject to any contingent deferred sales charge that may
apply. A shareholder in a portfolio is entitled to the shareholder's pro rata
share of all dividends and distributions arising from that portfolio's assets
and, upon redeeming shares, will receive the portion of the portfolio's net
assets represented by the redeemed shares.

From time to time certain shareholders may own a large percentage of shares
of a Fund. Accordingly, those shareholders may be able to greatly affect (if not
determine) the outcome of any shareholder vote.

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<PAGE>
FUND STRUCTURE

CORE TRUST STRUCTURE. Each Fund invests all of its assets in its
corresponding Portfolio of Core Trust, a business trust organized under the laws
of the State of Delaware in September 1994 and registered under the 1940 Act as
an open-end management investment company. Accordingly, a Portfolio directly
acquires its own securities and its corresponding Fund acquires an indirect
interest in those securities. The assets of each Portfolio belong only to, and
the liabilities of the Portfolio are borne solely by, the Portfolio and no other
portfolio of Core Trust. Upon liquidation of a Portfolio, investors in the
Portfolio would be entitled to share pro rata in the net assets of the Portfolio
available for distribution to investors.

THE PORTFOLIOS. The investment objective and fundamental investment
policies of the Funds and the Portfolios can be changed only with
shareholder approval. See "Prospectus Summary," "Investment Objective and
Policies," and "Management" for a description of the Portfolio's investment
objective, policies, restrictions, management, and expenses. A Fund's investment
in a Portfolio is in the form of a non-transferable beneficial interest. As of
the date of this Prospectus, Daily Assets Treasury Fund is the only investor
that has invested all of its assets in Treasury Portfolio. There are other
investors in Government Cash Portfolio and Cash Portfolio in addition to Daily
Assets Government Fund and Daily Assets Cash Fund. See "Additional Information"
below. All investors in a Portfolio invest on the same terms and conditions as
the Funds and will pay a proportionate share of the Portfolio's expenses.

The Portfolios normally will not hold meetings of investors except as
required by the 1940 Act. Each investor in a Portfolio will be entitled to vote
in proportion to the relative value of its interest in the Portfolio. On most
issues subject to a vote of investors, as required by the 1940 Act and other
applicable law, a Fund will solicit proxies from shareholders of the Fund and
will vote its interest in a Portfolio in proportion to the votes cast by its
shareholders. There can be no assurance that any issue that receives a majority
of the votes cast by a Fund's shareholders will receive a majority of votes cast
by all investors in the Portfolio.

CONSIDERATIONS OF INVESTING IN A PORTFOLIO. A Fund's investment in a
Portfolio may be affected by the actions of other large investors in the
Portfolio, if any. If a large investor other than a Fund redeemed its interest
in a Portfolio, the Portfolio's remaining investors (including the Fund) might,
as a result, experience higher pro rata operating expenses, thereby producing
lower returns. A Fund may withdraw its entire investment from a Portfolio at any
time, if the Board determines that it is in the best interests of the Fund and
its shareholders to do so. The Fund might withdraw, for example, if other
investors in the Portfolio, by a vote of shareholders, changed the investment
objective or policies of the Portfolio in a manner not acceptable to the Board
or not permissible by the Fund. A withdrawal could result in a distribution in
kind of portfolio securities (as opposed to a cash distribution) by the
Portfolio. If the Fund decided to convert those securities to cash, it usually
would incur transaction costs. If the Fund withdrew its investment from the
Portfolio, the Board would consider what action might be taken, including the
management of the Fund's assets in accordance with its investment objective and
policies by Forum Advisors or the investment of all of the Fund's investable
assets in another pooled investment entity having substantially the same
investment objective as the Fund. The inability of the Fund to find a suitable
replacement investment, in the event the Board decided not to permit the Adviser
to manage the Fund's assets, could have a significant impact on shareholders of
the Fund. Forum's experience in managing funds that utilize its "Core and
Gateway" structure began in 1994.

ADDITIONAL INFORMATION. Any other investment company that invests in a
Portfolio may have a different expense ratio and different sales

18
<PAGE>
charges, including distribution fees, and each investment company's performance
will be affected by its expenses and sales charges. Therefore, Fund shareholders
may have different yields than shareholders in another investment company that
invests exclusively in the Portfolio. For more information on any other
investment companies that invest in a Portfolio, investors may contact Forum at
207-879-1900. If an investor invests in a Fund through a financial institution,
the investor also may contact their financial institution to obtain information
about any other investment company investing in a Portfolio.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, THE SAI AND THE
FUNDS' OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFERING OF THE FUNDS'
SHARES, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRUST. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH OFFER
MAY NOT LAWFULLY BE MADE.

19
<PAGE>

FORUM FUNDS

[LOGO] ACCOUNT APPLICATION ACCOUNT NUMBER__________

1. INITIAL INVESTMENT ($10,000 minimum)

/ / Check enclosed for $______________________ / / Daily Assets Treasury

/ / I have telephoned the Transfer Agent / / Daily Asset Government
to make wire arrangements (see
instructions on reverse).

/ / My initial investment wire is $___________ / / Daily Assets Cash

2. REGISTRATION (please print)

/ / INDIVIDUALS

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Investor's Name

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Social Security Number

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Joint Investor's Name (right of survivorship
presumed unless tenancy in common is indicated)

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Social Security Number

/ / GIFTS TO MINORS

as custodian for
----------------------------- ----------------------------
Custodian's Name (only one Minor's Name (only one
permitted) permitted)

under the _______________ Uniform Gifts to Minors Act
State

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Minor's Social Security Number

/ / CORPORATIONS, PARTNERSHIPS & OTHERS (additional documentation required for
investors in any representative capacity)

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Name of Entity (indicate type of business, e.g., partnership)

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Taxpayer Identification Number

/ / TRUSTS (including corporate pension plans)

as trustee(s) for
----------------------------- ---------------------------
Trustee(s) Name(s) Name of Trust

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Full date of trust instrument

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Taxpayer Identification Number

3. ADDRESS

CITIZENSHIP: / / U.S. / / Resident Alien / / Non-Resident Alien___________
Country

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Number and Street

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City State Zip Code

-------------------------------- ------------------ --------------------
Contact Person Telephone (Day) Telephone (Evening)

4. TELEPHONE AND WIRE REDEMPTION PRIVILEGES (subject to the terms set forth in
the Prospectus)

/ / Telephone Redemption/Exchange Privilege

The Fund and Forum Financial Corp. ("Forum") are hereby authorized to honor
verbal instructions for the (i) redemption of any and all Fund shares held
in the undersigned's account provided that proceeds are mailed to the
shareholders address of record or to the bank account indicated below and
(ii) exchange of Fund shares into another account. The Fund and Forum are
authorized to honor any verbal instructions for purposes of redemption or
exchange purporting to be from the shareholder and believed by the Fund or
Forum to be genuine, and neither the Fund nor Forum shall be liable for any
loss, cost or expense for acting upon such instructions.

/ / Wire Redemption Privilege

The Fund and Forum are authorized to honor written instructions with
signature guaranteed or, if Telephone Redemption Privileges are elected,
verbal instructions, to redeem any and all Fund shares held in the
undersigned's account provided that the proceeds are transmitted to the
bank account indicated below. Complete the following if either privilege is
elected:

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Name of Bank (attach a voided check or deposit slip) Account Number

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Address and Branch of Bank ABA #

<PAGE>

ACCOUNT APPLICATION (CONTINUED)

5. DIVIDEND AND CAPITAL GAIN DISTRIBUTION PAYMENT OPTIONS (check one)

/ / Full Reinvestment: Reinvest all income dividends and capital gain
distributions when paid.

/ / Capital Gain Reinvestment: Reinvest capital gain distributions when paid;
pay income dividends in cash.

/ / Cash: Pay all income dividends and capital gain distributions in cash.

(Note: If none of the above boxes are checked, shareholders are assigned the
Full Reinvestment option.)

6. DUPLICATE STATEMENT ADDRESS (optional)

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Company Name Contact Person

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Number and Street

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City State Zip Code

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Telephone (Day) Telephone (Evening)

7. DEALER INFORMATION (for broker/dealer use only)

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Firm Name NSCC Code

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Representative's Name Representative's #

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Branch Address Branch Code

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Dealer's Authorized Signature Source of Business Code

8. SIGNATURE

I am (We are) of legal age in the state of my (our) residence and wish to
purchase shares of the Fund(s) indicated as described in the current Prospectus
(a copy of which I (we) have received). By the execution of this Account
Application, the undersigned represent(s) and warrant(s) that I (we) have full
right, power and authority to make this investment and the undersigned is (are)
duly authorized to sign this Account Application and to purchase or redeem
shares of the Fund on behalf of the Investor.

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Signature of Investor/Custodian Trustee Date

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Signature of Joint Investor/Co-Trustee Date

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Corporate Officer (Name) Title

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Signature of Corporate Officer Title

TAXPAYER IDENTIFICATION NUMBER CERTIFICATION
(check appropriate box, if applicable).
Under the penalties of perjury, I certify:

/ / That the number shown on this form is my correct taxpayer identification
number and that I am not subject to backup withholding because (a) I am
exempt from backup withholding, (b) I have not been notified by the
Internal Revenue Service ("IRS") that I am subject to backup withholding as
a result of a failure to report all interest or dividends, or (c) the IRS
has notified me that I am no longer subject to backup withholding.

/ / That I have not provided a taxpayer identification number because I have
not been issued a number, but I have applied for one or will do so in the
near future. I understand that if I do not provide my number to the Fund
within 60 days, the Fund will be required to begin backup withholding.

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Signature of Investor/Custodian/Trustee Date

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Signature of Joint Investor/Co-Trustee Date

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Corporate Officer (Name) Title

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Signature of Corporate Officer Title

9. INITIAL INVESTMENT AND MAILING INSTRUCTIONS

(1) If making your initial investment by check, complete the Account
Application and mail it with your check, payable to "Forum Funds" to:

FORUM FINANCIAL CORP.
ATTN: TRANSFER AGENT
P.O. BOX 446
PORTLAND, ME 04112

(2) If making your initial investment by bank wire, call the Transfer Agent
(Forum Financial Corp.) at 800-94FORUM (800-943-6786) to obtain an account
number. Then instruct your bank to wire Federal Funds to:

FIRST NATIONAL BANK OF BOSTON
BOSTON, MA
ABA # 011000390
CREDIT TO: FORUM FINANCIAL CORP.
ACCOUNT NUMBER: 541-54171
FOR FURTHER CREDIT TO: (FUND NAME)
ACCOUNT NAME / ACCOUNT NUMBER

Complete the Account Application and mail it to the address listed above.
Be sure to indicate the account number assigned to you on this Account
Application.

<PAGE>

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[LOGO]
SHAREHOLDER INFORMATION
Forum Financial Corp.
P.O. Box 446
Portland, ME 04112
207-879-0001 (IN PORTLAND, ME)
800-94FORUM (ELSEWHERE)