<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]
March 31, 1996 ANNUAL REPORT
- --------------------------------------------------------------------------------
May 3, 1996
Dear Investor:
We are again pleased to present you with Forum Funds' annual report for the
past fiscal year and to review our overall results for the period. Total net
assets of the funds continued to grow, rising from $131 million at 1995's fiscal
year end to $147 million this year. There were modest increases in the net
assets of our fixed income funds and sizeable increases to the balanced and
equity Funds.
1995 was a banner year for both fixed income and equity investors, a welcome
turnaround from the difficult year of 1994. Our funds performed well in this
environment, with returns to the top performing Payson Value Fund of close to 28
percent and returns to tax free municipal bond funds in excess of 7 percent.
What's more, the funds generally outperformed the benchmarks for their
categories during the 12 months ended March 31.
Of course, we believe investors should maintain a long term outlook in
making equity and fixed income fund investments. Given a long term view, since
inception every one of our funds has produced rewarding results for those who
have stayed with us over the years.
The record of the past three years shows that Forum Funds' investment
strategy has held up well in both boom and bust periods of the market cycle.
Although the strength of the market surge in 1995 admittedly caught us (and the
majority of investment advisers) by surprise, it is gratifying that we
participated fully in the advance. Yet as we look ahead a cautious view of
market prospects again appears justified. Interest rates have recently begun an
upward move, and equity prices are certainly not undervalued in most economic
sectors. The economic fundamentals are, however, quite promising and should
continue to support satisfactory investment returns over the longer term,
notwithstanding the short term fluctuations that will inevitably occur.
We thank you for your continued confidence in Forum Funds and look forward
to providing you with consistent, superior investment service in the future.
Should you have any questions, please get in touch with your local investment
institution or call us directly at 207-879-0001.
Sincerely,
[SIGNATURE]
John Y. Keffer
President
<PAGE>
- --------------------------------------------------------------------------------
ECONOMIC OVERVIEW
- --------------------------------------------------------------------------------
ECONOMIC AND FINANCIAL DEVELOPMENTS DURING THE FISCAL YEAR
1995 was the year of the "soft landing", as real (inflation adjusted)
economic growth slowed to about 2 percent1, half the rate of the preceding year.
The Board of Governors of the Federal Reserve expressed satisfaction with the
economy's performance, noting that inflation ran in the range of 3 percent or
less for the year, while unemployment, at 5.6 percent or so, was the lowest in
the industrialized world. However, 1995 also saw a fall in the value of the
dollar to a post WWII low, financial and political turmoil in Mexico, the
continuation of the fiercest war in half a century on the European continent,
and the unprecedented failure of our representatives in Washington to agree on
an annual budget to run the federal government.
The financial markets looked at this unsettling panorama, yawned, and roared
ahead. The Federal Reserve, mindful that its restrictive policies in 1994 and
early 1995 had gone far enough, nudged short term interest rates lower. Market
friendly politicians managed to prune government spending, while holding out the
promise of cuts in the capital gains tax and further deregulation of business
activity. Improved productivity and corporate restructuring bolstered American
competitiveness and profitability. The allure of the internet and powerful new
software propelled technology stocks to unsustainable highs, yet when they
collapsed, fresh mutual fund money and liquid holdings rotated into other
sectors. In a word, investors had a very good year.
The market boom continued through mid-February, 1996. Then signs of a
strengthening economy and indications that the Fed might not make further cuts
in interest rates dampened enthusiasm for bonds, and bond prices began to fall.
In March, an unexpectedly robust employment report threw both the fixed income
and equities markets for a loop. The stock market has since recovered from that
loss, but for the past few weeks has been fluctuating around the 650 level of
the S&P 500. Interest rates have remained higher than at the end of 1995, with
an upward tendency since mid-February.
FORUM FUNDS PERFORMANCE
Total returns to Forum Funds' fixed income and equity portfolios fully
reflect the favorable market developments of the twelve month period ending
March 31, 1996, and for the most part they performed better than their
benchmarks. Total returns to the Investors Bond Fund came in at close to 10
percent and to the three municipal bond funds at about 7.35 percent. The Payson
Balanced fund returned a healthy 21.7 percent and the Value Fund 27.8
percent--truly outstanding results for the level of risk associated with these
portfolios.
1The historical series of GDP was revised in 1995 to introduce a "chained
index". On the old basis GDP grew by 2 percent in 1995 and on the new basis by
substantially less, 1.4 percent.
2 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
ECONOMIC OVERVIEW (CONTINUED)
- --------------------------------------------------------------------------------
SUMMARY PERFORMANCE INDICATORS
12 MONTH TOTAL RETURN--PERIOD ENDING MARCH 31, 1996
<TABLE>
<CAPTION>
FORUM VS.
FORUM INDEX INDEX
----------- -------------- ------------
<S> <C> <C> <C>
Investors Bond Fund............................................................... 9.84% 10.17%(1) -0.33%
Tax Saver Bond Fund............................................................... 7.36% 6.86%(2) 0.50%
Maine Municipal Bond Fund......................................................... 7.34% 6.86%(2) 0.48%
New Hampshire Bond Fund........................................................... 7.36% 6.86%(2) 0.50%
Payson Balanced Fund.............................................................. 21.70% 20.94%(3) 0.76%
Payson Value Fund................................................................. 27.77% 28.23%(4) -0.46%
Daily Assets Treasury Fund........................................................ 5.18% 5.10%(5) 0.08%
(1) Morningstar Corporate General Index of 372 funds
(2) Morningstar Municipal National Index of 490 funds
(3) Morningstar Balanced Fund Index of 278 funds
(4) Morningstar Growth & Income Index of 460 funds
(5) IBC/Donoghue U.S. Treasury Money Market Fund
Index of 35 funds
</TABLE>
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. FORUM, MORNINGSTAR AND
IBC/DONOGHUE RETURN FIGURES DO NOT INCLUDE THE EFFECT OF SALES CHARGES. DURING
THE PERIOD CERTAIN FEES AND EXPENSES WERE WAIVED BY THE SERVICE PROVIDERS.
WITHOUT THESE WAIVERS TOTAL RETURN AND RANKINGS WOULD HAVE BEEN LOWER.
ECONOMIC OUTLOOK
For the remainder of 1996, the Federal Reserve sees moderate but somewhat
faster real growth than last year--on the order of 2-2 1/2 percent, with
inflation running at 3 percent or less. This should be a positive economic
environment for prudent investing. However, as last year's record demonstrates,
the links between economic and market performance are at best tenuous. The
current picture shows equity valuations at high levels in most industrial
sectors and a significant increase in market volatility. Interest rates, as
noted above, have been trending up. Moreover, there are a number of important
non-economic uncertainties that will bear on the market in the next three
quarters. Rather than attempting to predict market trends, we are inclined to
illustrate these uncertainties by posing a few rhetorical questions:
Congress and the President have at last agreed on a budget for the
remainder of the fiscal year. Do the financial markets fare better
with or without a federal budget? How long will deficit reduction
be a key priority on the policy agenda?
Political candidates typically charm the markets before a
presidential election but subsequently turn their attention
elsewhere. Should the time horizon of individual investors and
market analysts extend beyond November, 1996?
The media are beginning to draw public attention to issues of
corporate restructuring, income distribution and employee layoffs,
usually with inadequate analytical support. Is this area of policy
favorable or unfavorable to the prospects for corporate profits
and/or tax relief for savers and investors?
What is the impact of greater market volatility on long term rates
of return to investors?
There are probably no definitive answers to these kinds of questions, and in
any event this is not the place to try. What they suggest, however, is that
Forum's emphasis on high quality, fixed income securities, value oriented
equities and long term returns is well adapted to the uncertain times ahead.
3 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
FIXED INCOME & MONEY MARKET REVIEW
- --------------------------------------------------------------------------------
In contrast to the extremely difficult fixed income markets during the last
three calendar quarters of 1994, in the final three quarters of 1995 we had the
wind at our back. The positive trend began early in 1995 providing the
opportunity for a meaningful recovery in returns to bond portfolios. While the
first calendar quarter of 1996 has not been without its difficulties, we are
quite pleased with the performance we have been able to capture in all our
funds.
Our approach to the fixed income markets remains stable, even in the face of
markets that continue to demonstrate increasing volatility. Unlike other fixed
income advisers who are shaken by every move of the markets in response to the
latest government statistic of the moment, we maintain a longer term viewpoint
and approach. We recognize the importance of looking ahead at economic activity
and inflation, but without becoming intently focused on economists' numeric
forecasts for each statistic. All too often the economists are wrong,
expectations are not met, and the bond markets react with a vengeance in the
short term. As a result, we don't believe it pays to try to guess the next short
term market move. We remain committed to providing you with quality income, and
taking a cautious approach to portfolio credit risk and duration.
In last year's annual report we discussed the impact of the relatively flat
yield curve, concerns about the visible signs of increasing inflation, and the
potential impact of concepts such as the "flat tax" on our funds. A year has now
passed with the economy having continued its now familar pattern of slow growth,
the yield curve has remained somewhat flat, and while the cross currents of
"flat tax" news were felt in our municipal funds during the year their place on
the front page has been replaced by the specter of inflation. As we look ahead
our attention continues to be drawn to the same issues.
Our funds remain postioned for a rising interest rate environment. We are
focusing our investments in the bond portfolios on floating rate investments,
high coupon 3-10 year maturity U.S. Treasury, Agency and corporate bonds, and
money market investments. Daily Asset Treasury continues to target a short
maturity using floating rate U.S. Federal Agency instruments. We shall closely
monitor those factors causing higher levels of inflation and the potential for
the specter of the "flat tax" to once again be front page news.
We are pleased with the growth of our funds, and the support and confidence
you have placed in us. For this we thank you. We will continue to work to meet
the objectives of the funds, and therefore our shareholders.
Forum Advisors, Inc.
Investment Adviser
4 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
FIXED INCOME REVIEW
- --------------------------------------------------------------------------------
These charts reflect a comparison in the change in value of a $10,000
investment, including applicable sales charges, in Investors Bond Fund, TaxSaver
Bond Fund, Maine Municipal Bond Fund and New Hampshire Bond Fund, to each Fund's
related securities index. The Lehman Intermediate Corporate/Government Index is
a market index of fixed-rate government and investment grade securities with
maturities of up to 10 years. The Lehman 10 Year Municipal Index is a market
index of investment grade municipal fixed-rate debt securities with an average
maturity of 10 years. The Merrill Lynch 91 Day Treasury Index is representative
of returns available on a short term, risk free investment. Returns of the funds
reflect the reinvestment of all dividends and distributions. Investment return
and principal value of an investment in the Funds will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost. PAST PERFORMANCE IS NOT PREDICTIVE NOR A GUARANTEE OF FUTURE RESULTS.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT INCLUDING SALES CHARGE
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INVESTORS MERRILL LYNCH
DATE: BOND FUND LEHMAN INDEX 91 DAY TREASURY INDEX
<S> <C> <C> <C>
10/2/89 $ 9,625 $ 10,000 $ 10,000
3/31/90 $ 9,896 $ 10,322 $ 10,407
3/31/91 $ 11,056 $ 11,568 $ 11,253
3/31/92 $ 12,488 $ 12,817 $ 11,891
3/31/93 $ 14,177 $ 14,411 $ 12,332
3/31/94 $ 14,842 $ 14,774 $ 12,723
3/31/95 $ 15,518 $ 15,437 $ 13,353
3/31/96 $ 17,044 $ 16,914 $ 14,121
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
TAXSAVER MERRILL LYNCH
DATE: BOND FUND LEHMAN INDEX 91 DAY TREASURY INDEX
<S> <C> <C> <C>
10/2/89 $ 9,625 $ 10,000 $ 10,000
3/31/90 $ 9,913 $ 10,418 $ 10,407
3/31/91 $ 10,735 $ 11,427 $ 11,253
3/31/92 $ 11,696 $ 12,491 $ 11,891
3/31/93 $ 13,016 $ 14,144 $ 12,332
3/31/94 $ 13,698 $ 14,542 $ 12,723
3/31/95 $ 14,544 $ 15,636 $ 13,353
3/31/96 $ 15,615 $ 17,023 $ 14,121
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
MAINE MERRILL LYNCH
DATE: BOND FUND LEHMAN INDEX 91 DAY TREASURY INDEX
<S> <C> <C> <C>
12/5/91 $ 9,625 $ 10,000 $ 10,000
3/31/92 $ 9,784 $ 10,204 $ 10,147
3/31/93 $ 10,940 $ 11,554 $ 10,523
3/31/94 $ 11,314 $ 11,880 $ 10,857
3/31/95 $ 12,030 $ 12,773 $ 11,394
3/31/96 $ 12,910 $ 13,906 $ 12,050
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
NEW HAMPSHIRE MERRILL LYNCH
DATE: BOND FUND LEHMAN INDEX 91 DAY TREASURY INDEX
<S> <C> <C> <C>
12/31/92 $ 9,625 $ 10,000 $ 10,000
3/31/93 $ 9,754 $ 10,387 $ 10,078
3/31/94 $ 10,218 $ 10,679 $ 10,398
3/31/95 $ 10,864 $ 11,482 $ 10,913
3/31/96 $ 11,663 $ 12,500 $ 11,540
</TABLE>
5 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
EQUITY MARKET REVIEW
- --------------------------------------------------------------------------------
Certainly it has been an exhilarating twelve months for owners of financial
assets. Until very recently, stocks had barely paused on their way to levels
that by many yardsticks classify as record high valuations. At calendar year
end, the consensus in the bond market was for the long treasury to attain yields
approaching 5 percent in 1996, given the low-growth, low-inflation environment.
Only during the sharp, surprising reversal in interest rates witnessed in the
first quarter of 1996 have the markets paused to consider what kind of future
earnings growth the stock market must demonstrate to justify its current
valuation in the face of a nearly 7 percent long bond.
Throughout the breathtaking stock market advance of the last five quarters,
however, there was a sense of foreboding among the more skeptical,
value-oriented investors like H.M. Payson & Co., that the market was "borrowing"
from future returns which might have to be paid back in the form of an overdue
correction. Thus far, the fallout from the recent rise in interest rates has
been limited to heightened stock market volatility caused in part by the rapid
sector rotation of traders reacting to the latest piece of economic news. As
long-term investors, it appears to us that the markets have developed an
increasingly myopic and unhealthy focus on short-term results, lending an air of
speculation to the current market environment.
As you may know from previous letters, we have been defensively postured in
our equity selection and our asset allocation for some time. One might expect
our conservatism to dampen returns in a vigorous bull market, yet our relative
returns have been respectable. For the year ended March 31, 1996, the Payson
Value Fund had a total return of 27.77 percent while the Payson Balanced Fund
had a total return of 21.70 percent. For comparison purposes, the Morningstar
Growth and Income Index had a one year total return of 28.23 percent and the
Morningstar Balanced Fund Index had a one year total return of 20.94 percent,
indicating that both Payson Funds performed approximately in line with their
respective Morningstar categories.1 More important, perhaps, are the Funds'
annualized results for the past three years versus their Morningstar indices;
Payson Value returned 14.86 percent annually versus 13.32 percent for the index,
and Payson Balanced returned 11.33 percent versus 9.96 percent for its index.
Exposure to interest rate sensitive securities added to the performance of
the Funds in the second half of 1995 as rates continued to fall. With the
reversal in rates during the first quarter of 1996, despite reduced exposure to
interest rate sensitive companies, the Funds performance has modestly lagged the
benchmark's performance. Looking forward, it is our expectation that the current
income from stocks and bonds will be a larger component of total return. Should
this hold true, we believe our value oriented style should produce strong
relative returns.
The Balanced Fund and Value Fund now have assets of approximately $17
million and $10 million, respectively. We thank each and every shareholder for
your continued support.
H.M. Payson & Co.
Investment Adviser
1The Morningstar Growth and Income Index reflects the average performance of 460
growth and income mutual funds for the one year period and 278 funds for the
three year period as reported by Morningstar Incorporated. The Morningstar
Balanced Fund Index reflects the average performance of 278 balanced mutual
funds for the one year period and 139 funds for the three year period as
reported by Morningstar Incorporated.
6 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
EQUITY MARKET REVIEW
- --------------------------------------------------------------------------------
These charts reflect a comparison in the change in value of a $10,000 investment
in Payson Balanced Fund and Payson Value Fund, including reinvestment of
dividends and distributions, to the performance of the Standard and Poor's 500
Composite Index ("S&P 500") and the Merrill Lynch 91 Day Treasury Index. The S&P
500 is a market weighted index composed of 500 large capitalization companies
and reflects the reinvestment of dividends. The Merrill Lynch 91 Day Treasury
Index is representative of returns available on a short term, risk free
Investment. Investment return and principal value of an investment in the Funds
will fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost. PAST PERFORMANCE IS NOT PREDICTIVE NOR A
GUARANTEE OF FUTURE RESULTS.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PAYSON S&P 500 MERRILL LYNCH
DATE: BALANCED FUND INDEX 91 DAY TREASURY INDEX
<S> <C> <C> <C>
11/25/91 $ 10,000 $ 10,000 $ 10,000
3/31/92 $ 10,309 $ 10,861 $ 10,147
3/31/93 $ 11,868 $ 12,513 $ 10,523
3/31/94 $ 12,698 $ 12,696 $ 10,857
3/31/95 $ 13,460 $ 14,669 $ 11,394
3/31/96 $ 16,380 $ 19,373 $ 12,050
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PAYSON MERRILL LYNCH
DATE: VALUE FUND S&P 500 INDEX 91 DAY TREASURY INDEX
<S> <C> <C> <C>
7/31/92 $ 10,000 $ 10,000 $ 10,000
3/31/93 $ 11,105 $ 10,863 $ 10,219
3/31/94 $ 12,370 $ 11,022 $ 10,543
3/31/95 $ 13,175 $ 12,735 $ 11,065
3/31/96 $ 16,834 $ 16,819 $ 11,701
</TABLE>
7 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
INVESTORS BOND FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
<C> <S> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS (12.2%):
$1,450,426 Federal Home Loan Mortgage Corporation,
Series 90 135-A, 8.75%, due 5/15/00... $1,513,520
347,384 Merrill Lynch Mortgage Investors, Series
89 E, 9.40%, due 9/15/09.............. 377,033
1,122,676 Resolution Trust Corporation, Series 92
C8 D, 8.835%, due 12/25/23 (a)........ 1,120,431
----------
Total Collateralized Mortgage Obligations
(cost $2,831,156) 3,010,984
----------
CORPORATE BONDS & NOTES (66.6%):
1,175,000 Beverly Enterprises, Inc., 8.75%, due
12/31/03.............................. 1,122,125
1,000,000 Boise Cascade Corporation, 9.875%, due
2/15/01............................... 1,082,367
500,000 Chase Manhattan Bank, N.A., 9.75%, due
11/1/01............................... 568,392
4,500,000 Citfed Bancorp, Inc., 8.25%, due
9/1/03................................ 4,340,782
750,000 Continental Bank, N.A.
(a BankAmerica subsidiary), 11.25%,
due 7/1/01............................ 821,250
1,000,000 Dean Witter Discover & Company, 5.59%
variable rate, due 3/2/99............. 999,072
1,000,000 Ford Motor Credit Company, 5.58%
variable rate, due 3/23/99............ 992,210
1,350,000 I.C.H. Corporation, 11.25%, due 12/1/03
*..................................... 1,100,250
450,000 Lehman Brothers Holdings, 5.35% variable
rate, due 1/12/99..................... 444,818
250,000 Leucadia National Corporation, 10.375%,
due 6/15/02........................... 270,625
750,000 Merchants National Corporation
(a National City Corporation
subsidiary), 9.875%, due 10/1/99...... 823,623
1,000,000 Nacolah Holding Corporation
(a Sammons Enterprises, Inc.
subsidiary), 9.50%, due 12/1/03....... 1,095,000
500,000 Paine Webber, Inc., 9.25%, due
12/15/01.............................. 550,000
1,000,000 Salomon Inc., 7.75%, due 9/22/05........ 992,053
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
<C> <S> <C>
CORPORATE BONDS & NOTES, CONTINUED:
$1,200,000 Valley National Corporation (a Banc One
subsidiary), 9.875%, due 3/1/16....... $1,286,509
----------
Total Corporate Bonds & Notes
(cost $16,543,418) 16,489,076
----------
GOVERNMENT AGENCY NOTES (4.0%):
1,000,000 Student Loan Marketing Association,
5.62% variable rate, due 11/1/99...... 1,006,901
----------
Total Government Agency Notes
(cost $998,750) 1,006,901
----------
GOVERNMENT MORTGAGE BACKED SECURITIES (9.1%):
316,308 Federal Home Loan Mortgage Corporation,
Pool 502128, 9.00%, due 10/1/04....... 330,028
106,759 Government National Mortgage
Association, Pool 345993, 7.00%, due
11/15/23.............................. 104,287
164,339 Government National Mortgage
Association, Pool 346797, 7.00%, due
10/15/23.............................. 160,533
476,553 Government National Mortgage
Association, Pool 371734, 7.00%, due
4/15/24............................... 464,348
808,836 Government National Mortgage
Association, Pool 395851, 7.00%, due
8/15/25............................... 787,951
361,665 Government National Mortgage
Association, Pool 409198, 7.00%, due
8/15/25............................... 352,327
53,651 Government National Mortgage
Association, Pool 417479, 7.00%, due
9/15/25............................... 52,267
----------
Total Government Mortgage Backed Securities
(cost $2,274,057) 2,251,741
----------
OTHER HOLDINGS (8.1%):
16,434 1784 U.S. Treasury Money Market Fund.... 16,434
489,419 Dreyfus Government Cash Management
Fund.................................. 489,419
1,500,000 Cargill Corporation, Discount Commercial
Paper, 5.43% yield, due 4/8/96........ 1,498,440
----------
Total Other Holdings
(cost $2,004,293) 2,004,293
----------
Total Investments (100.0%)
(cost $24,651,674) $24,762,995
----------
----------
</TABLE>
* Non-income producing security
(a) Securities that may be resold to "qualified institutional
buyers" pursuant to Rule 144A under, or securities offered
pursuant to Section 4(2) of, the Securities Act of 1933, as
amended. These securities have been determined to be liquid
under guidelines established by the Board of Trustees.
See notes to financial statements. 8 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
TAXSAVER BOND FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
<C> <S> <C>
MUNICIPAL BONDS (93.7%):
COLORADO (7.2%):
$1,000,000 Douglas County, CO, School District #RE
1, General Obligation Bonds, Series A,
8.00%, due 12/15/09................... $1,272,550
----------
FLORIDA (7.0%):
1,285,000 Brevard County, FL, Health Facilities
Revenue Bonds, The Devereux
Foundation, 4.00%, due 11/1/04........ 1,228,125
----------
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........ 424,404
465,000 Illinois Development Finance Authority
Revenue Bonds, Community
Rehabilitation Providers Facilities
Acquisition Program, Series 92, 8.25%,
8/1/12................................ 485,418
----------
909,822
----------
LOUISIANA (7.5%):
1,000,000 Louisana Public Facilities Authority
Revenue Bonds, Health, Hospital &
Nursing Home Improvements, 11.00%,
due 2/1/14............................ 1,330,100
----------
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....... 102,290
----------
MISSISSIPPI (4.4%):
750,000 Claiborne County, MS, Pollution Control
Revenue Systems Energy Resources, Inc.
Bonds, Middle South Energy, Inc.
Project E, 9.50%, due 4/1/16.......... 772,732
----------
NEW HAMPSHIRE (1.4%):
250,000 Manchester, NH, Unlimited Tax General
Obligation Bonds,
Series 93 A, 5.30%, due 7/1/07........ 252,070
----------
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
<C> <S> <C>
NEW JERSEY (3.1%):
$ 500,000 New Jersey State Educational Facilities
Authority Revenue Bonds, Union County
College, Series B, 7.25%, due
7/1/09................................ $ 544,160
----------
NEW YORK (2.0%):
350,000 New York State Thruway Authority,
Service Contract Revenue Bonds, Local
Highway and Bridge Project, 5.75%, due
4/1/06................................ 357,203
----------
OHIO (11.3%):
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............................... 586,750
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........................... 879,662
500,000 Washington County, OH, Hospital
Refunding Revenue Bonds, Shelby
General Hospital, Series 93, 6.875%,
due 7/1/03............................ 526,870
----------
1,993,282
----------
PENNSYLVANIA (29.1%):
1,000,000 Allegheny County Hospital Development
Authority, Health Center Revenue
Bonds, Series 90, West Penn Hospital
Foundation, 8.00%, due 1/1/05......... 1,070,980
875,000 Allegheny County Hospital Development
Authority, Health Facilities Revenue
Bonds, Allegheny Valley School
Project, 7.25%, due 2/1/03............ 888,029
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............................... 776,095
</TABLE>
See notes to financial statements. 9 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
TAXSAVER BOND FUND
SCHEDULE OF INVESTMENTS (continued)
MARCH 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
PENNSYLVANIA, CONTINUED:
<C> <S> <C>
$ 170,000 Butler County, PA, Hospital Authority
Refunding Revenue Bonds, Butler
Memorial Hospital, 7.875%, due 7/1/02,
Prerefunded (U.S. Government) 7/1/96
at 102................................ $ 175,030
800,000 Erie-Western Pennsylvania Port
Authority, Pennsylvania Refunding
Revenue Bonds, 8.25%, due 6/15/00..... 887,040
1,000,000 Hampden, PA, Industrial Development
Authority Refunding Revenue Bonds,
Ralston Purina Co. Project, 8.125%,
due 1/1/07............................ 1,093,730
110,000 Pennsylvania Higher Education Facilities
Authority Revenue Bonds, Medical
College of Pennsylvania, Series 91 B,
7.25%, due 3/1/05..................... 118,227
125,000 Washington County, PA, Industrial
Development Authority Refunding
Revenue Bonds, Presbyterian Medical
Center, FHA insured, 6.50%,
due 1/15/02........................... 136,188
----------
5,145,319
----------
PUERTO RICO (3.0%):
490,000 University of Puerto Rico Revenue Bonds,
Series N, MBIA insured, 6.25%, due
6/1/04................................ 538,392
----------
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
<C> <S> <C>
TEXAS (4.7%):
$ 750,000 Red River Authority, TX, Pollution
Control Revenue Bonds, Remarketed
8/1/90, Hoechst Celanese Corporation
LOC, 7.50%, due 8/1/12................ $ 826,283
----------
VIRGIN ISLANDS (4.3%):
705,000 Virgin Islands Public Finance Authority
Revenue Bonds, Government Development
Program, Series A, 7.00%, due
10/1/04............................... 758,228
----------
VIRGINIA (2.9%):
500,000 Fairfax County, VA, Economic Development
Authority Revenue Bonds (C-SPAN
Project), Series 91 B, 7.50%, due
6/1/01................................ 517,505
----------
Total Municipal Bonds
(cost $16,015,110) 16,548,061
----------
SHORT-TERM HOLDINGS (6.3%):
597,607 1784 Tax Free Money Market
Fund.................................. 597,607
510,914 Fidelity Institutional Tax Exempt Money
Market Fund........................... 510,914
----------
Total Short-Term Holdings
(cost $1,108,521) 1,108,521
----------
Total Investments (100.0%)
(cost $17,123,631) $17,656,582
----------
----------
</TABLE>
See notes to financial statements. 10 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
MAINE MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
MUNICIPAL BONDS (97.9%):
GENERAL OBLIGATION--BOND BANK (7.0%):
$100,000 Maine Municipal Bond Bank Refunding
Bonds, Series 92 C, 5.80%, due
11/1/99............................... $ 104,668
80,000 Maine Municipal Bond Bank Sewer & Water
Bonds, SRF Program, Series 91 A,
7.20%, due 11/1/13, Prerefunded (U.S.
Government) 11/1/01 at 102............ 91,384
50,000 Maine Municipal Bond Bank, Series 88 A,
6.70%, due 11/1/98.................... 53,027
50,000 Maine Municipal Bond Bank, Series 88 A,
7.50%, due 11/1/05, Prerefunded (U.S.
Government) 11/1/98 at 102............ 54,955
40,000 Maine Municipal Bond Bank, Series 88 B,
7.65%, due 11/1/06, Prerefunded (U.S.
Government) 11/1/98 at 102.25......... 44,199
50,000 Maine Municipal Bond Bank, Series 88 B,
7.85%, due 11/1/18, Prerefunded (U.S.
Government) 11/1/98 at 103............ 55,895
60,000 Maine Municipal Bond Bank, Series 88 C,
7.10%, due 11/1/02, Prerefunded (U.S.
Government) 11/1/98 at 101.25......... 64,958
50,000 Maine Municipal Bond Bank, Series 89 B,
7.40%, due 11/1/14, Prerefunded (U.S.
Government) 11/1/99 at 102............ 55,447
210,000 Maine Municipal Bond Bank, Series 90 B,
7.20%, due 11/1/07, Prerefunded (U.S.
Government) 11/1/00 at 102............ 236,779
50,000 Maine Municipal Bond Bank, Series 90 B,
7.20%, due 11/1/11, Prerefunded (U.S.
Government) 11/1/00 at 102............ 56,376
150,000 Maine Municipal Bond Bank, Series 90 B,
7.20%, due 11/1/15, Prerefunded (U.S.
Government) 11/1/00 at 102............ 169,128
25,000 Maine Municipal Bond Bank, Series 90 D,
7.375%, due 11/1/10, Prerefunded (U.S.
Government) 11/1/00 at 102............ 28,278
100,000 Maine Municipal Bond Bank, Series 92 B,
6.65%, due 11/1/07.................... 110,813
85,000 Maine Municipal Bond Bank, Series 92 B,
6.75%, due 11/1/12.................... 91,720
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
GENERAL OBLIGATION--BOND BANK, CONTINUED:
$150,000 Maine Municipal Bond Bank, Series 92 E,
5.80%, due 11/1/04.................... $ 159,289
200,000 Maine Municipal Bond Bank, Series 92 E,
5.875%, due 11/1/05................... 211,946
205,000 Maine Municipal Bond Bank, Series 93 C,
5.55%, due 11/1/08.................... 207,406
-----------
1,796,268
-----------
GENERAL OBLIGATION--POLITICAL SUBDIVISIONS (14.4%):
175,000 Bar Harbor, ME, Unlimited Tax General
Obligation Bonds, 6.20%, due 6/1/05... 188,681
75,000 Bar Harbor, ME, Unlimited Tax General
Obligation Bonds, 6.45%, due 6/1/09... 81,828
30,000 Bath, ME, Unlimited Tax General
Obligation Bonds, 7.45%, due
12/1/07............................... 35,862
20,000 Bath, ME, Unlimited Tax General
Obligation Bonds, 7.50%, due
12/1/08............................... 24,155
50,000 Brewer, ME, Unlimited Tax General
Obligation Bonds, Series A, 6.10%, due
1/1/03................................ 53,515
50,000 Brewer, ME, Unlimited Tax General
Obligation Bonds, Series A, 6.10%, due
1/1/04................................ 53,645
50,000 Brewer, ME, Unlimited Tax General
Obligation Bonds, Series A, 6.10%, due
1/1/05................................ 53,655
50,000 Brewer, ME, Unlimited Tax General
Obligation Bonds, Series A, 6.20%, due
1/1/06................................ 53,653
100,000 City of Bangor, ME, Unlimited Tax
General Obligation Bonds, 5.20%, due
11/1/00............................... 103,183
250,000 Cumberland County, ME, Unlimited Tax
General Obligation Bonds, 5.25%, due
2/1/07................................ 253,595
100,000 Cumberland County, ME, Unlimited Tax
General Obligation Bonds, 6.50%, due
2/1/03, Prerefunded (U.S. Government)
2/1/01 at 102......................... 110,078
25,000 Ellsworth, ME, Unlimited Tax General
Obligation Bonds, 7.20%, due 7/1/08... 28,993
100,000 Kittery, ME, Unlimited Tax General
Obligation Bonds, AMBAC insured,
5.25%, due 11/1/05.................... 100,820
</TABLE>
See notes to financial statements. 11 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
MAINE MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS (continued)
MARCH 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
GENERAL OBLIGATION--POLITICAL SUBDIVISIONS, CONTINUED:
<C> <S> <C>
$25,000 Lewiston, ME, Unlimited Tax General
Obligation Bonds, 7.10%, due 7/1/06,
Prerefunded (U.S. Government) 7/1/96
at 103................................ $ 25,973
25,000 Old Orchard Beach, ME, Unlimited Tax
General Obligation Bonds, MBIA
insured, 6.50%, due 10/1/96........... 25,383
40,000 Old Orchard Beach, ME, Unlimited Tax
General Obligation Bonds,
MBIA insured, 6.40%, due 9/1/04....... 44,240
215,000 Old Orchard Beach, ME, Unlimited Tax
General Obligation Bonds,
MBIA insured, 6.60%, due 9/1/06....... 238,321
50,000 Old Orchard Beach, ME, Unlimited Tax
General Obligation Bonds,
MBIA insured, 6.65%, due 9/1/07....... 55,560
50,000 Portland, ME, Unlimited Tax General
Obligation Bonds, 12.10%, due
7/1/99................................ 61,694
500,000 Portland, ME, Unlimited Tax General
Obligation Bonds, 6.20%, due 4/1/05... 548,205
50,000 Portland, ME, Unlimited Tax General
Obligation Bonds, 12.60%, due
11/1/05............................... 79,045
790,000 Portland, ME, Unlimited Tax General
Obligation Bonds, 5.30%, due 6/1/13... 767,825
150,000 South Portland, ME, Unlimited Tax
General Obligation Bonds, 5.80%, due
9/1/08................................ 159,468
40,000 South Portland, ME, Unlimited Tax
General Obligation Bonds, 5.80%, due
9/1/11................................ 41,714
250,000 Town of Freeport, ME, Unlimited Tax
General Obligation Bonds, 7.25%, due
9/1/04................................ 289,290
20,000 Town of Freeport, ME, Unlimited Tax
General Obligation Bonds, 7.25%, due
9/1/10................................ 23,651
25,000 Westbrook, ME, Unlimited Tax General
Obligation Bonds, 6.75%, due
11/15/04.............................. 28,071
75,000 Windham, ME, Unlimited Tax General
Obligation Bonds, 0.05%, due
6/15/08............................... 38,243
20,000 Winslow, ME, Unlimited Tax General
Obligation Bonds, AMBAC insured,
6.90%, due 10/1/08.................... 22,211
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
GENERAL OBLIGATION--POLITICAL SUBDIVISIONS, CONTINUED:
$25,000 Winthrop, ME, Unlimited Tax General
Obligation Bonds, 5.10%, due 8/1/04... $ 25,261
25,000 Winthrop, ME, Unlimited Tax General
Obligation Bonds, 5.20%, due 8/1/05... 25,284
25,000 Winthrop, ME, Unlimited Tax General
Obligation Bonds, 5.30%, due 8/1/06... 25,266
25,000 Winthrop, ME, Unlimited Tax General
Obligation Bonds, 5.40%, due 8/1/07... 25,139
-----------
3,691,507
-----------
GENERAL OBLIGATION--SCHOOL DISTRICTS (0.1%):
35,000 York, ME, School District, Unlimited Tax
General Obligation Bonds, AMBAC
insured, 6.40%, due 3/1/03............ 38,443
-----------
38,443
-----------
GENERAL OBLIGATION--STATES, TERRITORIES (11.8%)
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. Government) 7/1/02
at 101.50............................. 111,578
300,000 Commonwealth of Puerto Rico, Unlimited
Tax General Obligation Refunding
Revenue Bonds, 6.80%, due 7/1/21,
Prerefunded (U.S. Government) 7/1/02
at 101.50............................. 339,582
1,150,000 Commonwealth of Puerto Rico, Unlimited
Tax General Obligation Bonds, MBIA
insured, 6.50%, due 7/1/04............ 1,283,101
250,000 Puerto Rico Municipal Finance Agency,
Unlimited Tax General General
Obligation Bonds, Series 92 A, 5.80%,
due 7/1/04............................ 260,283
250,000 Puerto Rico Municipal Finance Agency,
Unlimited Tax General Obligation
Bonds, Series 92 A, 5.875%, due
7/1/05................................ 259,828
60,000 State of Maine, Unlimited Tax General
Obligation Bonds, 10.00%, due
5/15/96............................... 60,493
25,000 State of Maine, Unlimited Tax General
Obligation Bonds, 10.00%, due
5/15/97............................... 26,740
</TABLE>
See notes to financial statements. 12 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
MAINE MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS (continued)
MARCH 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
GENERAL OBLIGATION--STATES, TERRITORIES, CONTINUED:
<C> <S> <C>
$60,000 State of Maine, Unlimited Tax General
Obligation Bonds, 10.00%, due
5/15/98............................... $ 67,105
100,000 State of Maine, Unlimited Tax General
Obligation Bonds, 6.75%, due
5/15/99............................... 107,077
100,000 State of Maine, Unlimited Tax General
Obligation Bonds, 8.50%, due 3/1/00... 114,327
100,000 State of Maine, Unlimited Tax General
Obligation Bonds, 7.50%, due
12/15/00.............................. 112,712
50,000 State of Maine, Unlimited Tax General
Obligation Bonds, 8.00%, due 5/1/01... 57,694
90,000 State of Maine, Unlimited Tax General
Obligation Bonds, 6.40%, due 7/1/02... 98,451
100,000 State of Maine, Unlimited Tax General
Obligation Bonds, 6.50%, due 7/1/03... 110,593
-----------
3,009,564
-----------
AIRPORT REVENUE (2.5%):
100,000 City of Bangor, ME, Limited Obligation
Revenue Bonds, Bangor International
Airport Project, 5.75%, due 10/1/01... 104,009
150,000 City of Bangor, ME, Limited Obligation
Revenue Bonds, Bangor International
Airport Project, 6.00%, due 10/1/03... 158,235
100,000 City of Bangor, ME, Limited Obligation
Revenue Bonds, Bangor International
Airport Project, 6.10%, due 10/1/04... 106,052
250,000 City of Bangor, ME, Limited Obligation
Revenue Bonds, Bangor International
Airport Project, 6.35%, due 10/1/07... 263,595
-----------
631,891
-----------
EDUCATION FACILITIES REVENUE (11.9%):
35,000 Maine Educational Loan Authority,
Educational Loan Revenue Bonds,
Supplemental Education Loan Program,
Series 92 A-1, 6.80%, due 12/1/07..... 37,098
75,000 Maine Educational Loan Authority,
Educational Loan Revenue Bonds,
Supplemental Education Loan Program,
Series 92 A-1, 7.00%, due 12/1/16..... 79,459
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
EDUCATION FACILITIES REVENUE, CONTINUED:
$50,000 Maine Educational Marketing Corporation,
Student Loan Refunding Revenue Bonds,
6.90%, due 11/1/03.................... $ 53,492
100,000 Maine Health & Higher Educational
Facilities Authority Revenue Bonds,
Colby College Issue,
FGIC insured, 6.20%, due 7/1/99....... 105,536
190,000 Puerto Rico Public Buildings Authority,
Guaranteed Public Education and Health
Facilities Refunding Revenue Bonds,
Series 93 M, 5.10%, due 7/1/01........ 192,430
1,255,000 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................................ 1,311,150
60,000 University of Maine System Revenue
Bonds, 7.20%, due 9/1/09, Prerefunded
(U.S. Government) 9/1/99 at 102....... 66,537
105,000 University of Maine System Revenue
Bonds, 7.25%, due 9/1/19, Prerefunded
(U.S. Government) 9/1/99 at 102....... 116,605
1,000,000 University of Puerto Rico Revenue Bonds,
Series N, MBIA insured, 6.25%, due
6/1/04................................ 1,098,760
-----------
3,061,067
-----------
HEALTH CARE REVENUE (17.3%):
10,000 Maine Health & Higher Educational
Facilities Authority Refunding Revenue
Bonds, Kennebec Valley Medical Center,
FGIC insured, 7.00%, due 7/1/05....... 10,881
145,000 Maine Health & Higher Educational
Facilities Authority Refunding Revenue
Bonds, Maine Medical Center, 7.375%,
due 10/1/13, Prerefunded (U.S.
Government) 10/1/96 at 102............ 150,661
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.................... 190,411
</TABLE>
See notes to financial statements. 13 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
MAINE MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS (continued)
MARCH 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
HEALTH CARE REVENUE, CONTINUED:
<C> <S> <C>
$250,000 Maine Health & Higher Educational
Facilities Authority Revenue Bonds,
Coves Edge Nursing Home, 10.00%, due
8/1/20, Prerefunded (U.S. Government)
8/1/00 at 103......................... $ 310,143
100,000 Maine Health & Higher Educational
Facilities Authority Revenue Bonds,
FSA insured, 6.10%, due 7/1/01........ 106,540
140,000 Maine Health & Higher Educational
Facilities Authority Revenue Bonds,
Cedar Nursing Home, FHA insured,
7.90%, due 8/1/32, Prerefunded (U.S.
Government) 2/1/00 at 102............. 156,288
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. Government) 7/1/98
at 102................................ 55,080
55,000 Maine Health & Higher Educational
Facilities Authority Revenue Bonds,
Kennebec Valley Medical Center, FGIC
insured, 7.00%, due 7/1/15............ 59,297
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............................ 160,488
475,000 Maine Health & Higher Educational
Facilities Authority Revenue Bonds,
Saint Mary's General Hospital, 8.50%,
due 7/1/09, Prerefunded (U.S.
Government) 7/1/99 at 102............. 524,367
100,000 Maine Health & Higher Educational
Facilities Authority Revenue Bonds,
Series 92 B, FSA insured, 5.875%, due
7/1/06................................ 104,475
500,000 Maine Health & Higher Educational
Facilities Authority Revenue Bonds,
Series 93 A, FSA insured, 5.60%, due
7/1/07................................ 510,635
450,000 Maine Health & Higher Educational
Facilities Authority Revenue Bonds,
Series 93 B, FSA insured, 5.55%, due
7/1/08................................ 454,010
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
HEALTH CARE REVENUE, CONTINUED:
$155,000 Maine Health & Higher Educational
Facilities Authority Revenue Bonds,
Series 93 D, FSA insured, 5.20%, due
7/1/06................................ $ 154,549
500,000 Maine Health & Higher Educational
Facilities Authority Revenue Bonds,
Series 93 D, FSA insured, 5.30%, due
7/1/07................................ 498,280
25,000 Maine Health & Higher Educational
Facilities Authority Revenue Bonds,
Southern Maine Medical Center, AMBAC
insured, 7.20%, due 5/1/06............ 27,326
15,000 Maine Health & Higher Educational
Facilities Authority Revenue Bonds,
Southern Maine Medical Center, AMBAC
insured, 7.30%, due 5/1/14............ 16,346
950,000 Maine Veterans' Homes Revenue Bonds,
6.80%, due 10/1/05.................... 950,656
-----------
4,440,433
-----------
HOUSING REVENUE (6.1%):
240,000 Maine Finance Authority Multi-Family
Revenue Bonds, Back Bay Tower Project,
Sakura Bank LOC, 4.50% due 9/1/18,
Optional Put 9/1/96 at 100............ 239,988
30,000 Maine State Housing Authority Refunding
Revenue Bonds, Series 91 A, FSA
insured, 7.40%, due 11/15/22.......... 31,710
25,000 Maine State Housing Authority Revenue
Bonds, Mortgage Purchase, Series 86 B,
MGIC Private Mortgage Pools, 7.50%,
due 11/15/16.......................... 25,748
10,000 Maine State Housing Authority Revenue
Bonds, Mortgage Purchase, Series 87
A-1, FHA/VA/Private Mortgage Pools,
8.10%, due 11/15/07................... 10,097
25,000 Maine State Housing Authority Revenue
Bonds, Mortgage Purchase, Series 87
A-2, FHA/VA Mortgage Pools, 8.10%, due
11/15/08.............................. 26,393
25,000 Maine State Housing Authority Revenue
Bonds, Mortgage Purchase, Series 87 B,
FHA/VA/Private Mortgage Pools, 7.60%,
due 11/15/99.......................... 26,147
</TABLE>
See notes to financial statements. 14 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
MAINE MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS (continued)
MARCH 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
HOUSING REVENUE, CONTINUED:
<C> <S> <C>
$15,000 Maine State Housing Authority Revenue
Bonds, Mortgage Purchase, Series 88 B,
FHA/VA/Private Mortgage Pools, 8.00%,
due 11/15/15.......................... $ 15,911
100,000 Maine State Housing Authority Revenue
Bonds, Mortgage Purchase, Series 88 C,
8.20%, due 11/15/08................... 104,906
40,000 Maine State Housing Authority Revenue
Bonds, Mortgage Purchase, Series 88
D-5, 7.45%, due 11/15/11.............. 41,745
200,000 Maine State Housing Authority Revenue
Bonds, Mortgage Purchase, Series 88
D-6, 7.25%, due 11/15/19.............. 207,792
20,000 Maine State Housing Authority Revenue
Bonds, Mortgage Purchase, Series 89
A-1, 7.625%, due 11/15/24............. 20,910
30,000 Maine State Housing Authority Revenue
Bonds, Mortgage Purchase, Series 89
A-2, 7.30%, due 11/15/16.............. 31,515
110,000 Maine State Housing Authority Revenue
Bonds, Mortgage Purchase, Series 90
A-5, Remarketed 5/13/93, 6.20%, due
11/15/16.............................. 111,135
300,000 Maine State Housing Authority Revenue
Bonds, Mortgage Purchase, Series 94
A-2, 5.20%, due 11/15/08.............. 289,482
250,000 Maine State Housing Authority Revenue
Bonds, Mortgage Purchase, Series 94
C-1, 6.20%, due 11/15/07.............. 256,798
50,000 Maine State Housing Authority Revenue
Bonds, Single Family Mortgage
Refunding Revenue Bonds, Series 91-1,
6.90%, due 11/1/07.................... 51,830
55,000 Maine State Housing Authority Revenue
Bonds, Single Family Mortgage
Refunding Revenue Bonds, Series 91-1,
7.15%, due 11/1/21.................... 56,716
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
HOUSING REVENUE, CONTINUED:
$15,000 Virgin Islands Housing Finance
Authority, Single Family Refunding
Revenue Bonds, GNMA Mortgage-Backed,
6.00%, due 3/1/07..................... $ 15,155
-----------
1,563,978
-----------
INDUSTRIAL DEVELOPMENT REVENUE (3.8%):
100,000 Puerto Rico Industrial, Medical &
Environmental Revenue Bonds, Abbott
Chemicals, Inc. Project, 6.50%, due
7/1/09................................ 100,180
800,000 Puerto Rico Industrial, Medical &
Environmental Revenue Bonds, Motorola,
Inc. Project, Series 83 A, 6.75%, due
1/1/14................................ 871,016
-----------
971,196
-----------
POLLUTION CONTROL REVENUE (4.1%):
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............................ 573,392
500,000 Jay, ME, Solid Waste Disposal Revenue
Bonds, International Paper Company
Project, Series B, 6.00%, due
12/1/17............................... 484,240
-----------
1,057,632
-----------
RESOURCE RECOVERY REVENUE (3.2%):
500,000 Regional Waste Systems, Inc., ME,
Revenue Bonds, Series A-C, 7.30%, due
7/1/98................................ 531,405
240,000 Regional Waste Systems, Inc., ME,
Revenue Bonds, Series A-C, 7.95%, due
7/1/10................................ 258,158
25,000 Regional Waste Systems, Inc., ME,
Revenue Bonds, Series D-F, 7.60%, due
7/1/00................................ 26,760
-----------
816,323
-----------
TRANSPORTATION REVENUE (2.8%):
65,000 Commonwealth of Puerto Rico Highway &
Transportation Authority Refunding
Revenue Bonds, Series 92 U, 5.875%,
due 7/1/99............................ 67,673
</TABLE>
See notes to financial statements. 15 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
MAINE MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS (continued)
MARCH 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
TRANSPORTATION REVENUE, CONTINUED:
<C> <S> <C>
$500,000 Commonwealth of Puerto Rico Highway &
Transportation Authority Refunding
Revenue Bonds, Series 93 X, 5.00%, due
7/1/02................................ $ 502,095
30,000 Maine State Turnpike Authority Revenue
Bonds, MBIA insured, 6.00%, due
7/1/11................................ 31,232
100,000 State of Maine, Unlimited Tax General
Obligation Bonds, Highway
Improvements, 8.00%, due 5/1/02....... 117,437
-----------
718,437
-----------
UTILITIES REVENUE (2.0%):
40,000 Kennebec, ME, Water District Revenue
Bonds, 7.00%, due 12/1/20, Prerefunded
(U.S. Government) 12/1/01 at 101.50... 45,355
165,000 Kennebec, ME, Water District Revenue
Bonds, 7.00%, due 12/1/14, Prerefunded
(U.S. Government) 12/1/01 at 101.50... 187,091
250,000 Puerto Rico Telephone Authority
Refunding Revenue Bonds, Series 93 M,
5.40%, due 1/1/08..................... 250,065
25,000 Wells Sanitation District, ME, Sewer
Revenue Bonds, 6.75%, due 3/1/00...... 26,880
-----------
509,391
-----------
OTHER REVENUE (10.9%):
100,000 Commonwealth of Puerto Rico
Infrastructure Financing Authority,
Special Tax Refunding Revenue Bonds,
Series 88 A, 7.75%, due 7/1/08........ 108,707
500,000 Guam Government Limited Obligation
Revenue Bonds, Series 89 A, Fuji Bank
LOC, 7.00%, due 11/15/04.............. 528,130
10,000 Maine Court Facilities Authority Lease
Rental Revenue Bonds, 7.15%, due
8/1/07, Prerefunded (U.S. Government)
8/1/00 at 102......................... 11,223
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
OTHER REVENUE, CONTINUED:
$100,000 Topsham, ME, Revenue Bonds, Frank
Goodwin Project, Series 89 A, CIC
insured, 7.20%, due 9/1/05, Mandatory
Put 9/1/96 at 100..................... $ 101,536
790,000 Virgin Islands Public Finance Authority
Revenue Bonds, Matching Federal Loan
Notes, Series A, 6.90%, due 10/1/01... 833,418
15,000 Virgin Islands Public Finance Authority
Revenue Bonds, Series 89 B, 7.25%, due
10/1/07, Prerefunded (U.S. Government)
10/1/00 at 101........................ 16,873
1,000,000 Virgin Islands Public Finance Authority
Refunding Revenue Bonds, Escrowed to
Maturity in U.S. Governments, Series
89 A, 7.30%, due 10/1/18.............. 1,188,331
-----------
2,788,218
-----------
Total Municipals
(cost $24,609,236) 25,094,348
-----------
BOND ANTICIPATION NOTES (0.0%):
10,000 Bangor, ME, Unlimited Tax General
Obligation Bonds, 10.00%, due
6/1/97................................ 10,720
-----------
Total Bond Anticipation Notes
(cost $10,622) 10,720
-----------
SHORT-TERM HOLDINGS (2.1%):
417,346 1784 Tax Free Money Market Fund......... 417,346
114,651 Fidelity Institutional Tax Exempt Money
Market Fund........................... 114,651
-----------
Total Short-Term Holdings
(cost $531,997) 531,997
-----------
Total Investments (100.0%)
(cost $25,151,855) $25,637,065
-----------
-----------
</TABLE>
See notes to financial statements. 16 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
NEW HAMPSHIRE BOND FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
<C> <S> <C>
MUNICIPAL BONDS (97.0%):
GENERAL OBLIGATION--BOND BANK (10.1%):
$ 25,000 New Hampshire Municipal Bond Bank,
Series 89 B, 6.70%, due 7/15/04,
Prerefunded (U.S. Government) 7/15/99
at 102................................ $ 27,265
25,000 New Hampshire Municipal Bond Bank,
Series 90 A, 6.90%, due 1/15/05....... 27,547
20,000 New Hampshire Municipal Bond Bank, Ser
90 D, 6.90%, due 7/15/03.............. 21,963
25,000 New Hampshire Municipal Bond Bank
Revenue Bonds, Series 91 E, 6.90%, due
8/15/06............................... 28,165
50,000 New Hampshire Municipal Bond Bank
Refunding Bonds,
Series 92 H, 6.35%, due 7/15/06....... 53,954
175,000 New Hampshire Municipal Bond Bank
Refunding Bonds,
Series 92 H, 6.50%, due 7/15/08....... 187,787
100,000 New Hampshire Municipal Bond Bank
Refunding Bonds,
Series 93 E, 5.20%, due 8/15/08....... 98,028
85,000 New Hampshire Municipal Bond Bank,
Series 94 C, State
Guaranteed, 5.80%, due 8/15/08........ 88,525
150,000 New Hampshire Municipal Bond Bank,
Series 94 E, State Guaranteed 5.25%,
due 8/15/01........................... 155,132
----------
688,366
----------
GENERAL OBLIGATION--POLITICAL SUBDIVISIONS (17.1%):
135,000 Bedford, NH, Unlimited Tax General
Obligation Bonds, 6.70%, due 8/1/12... 144,415
100,000 Concord, NH, General Obligation
Refunding Bonds, MBIA insured, 5.00%,
due 1/15/09........................... 97,004
25,000 Concord, NH, General Obligation Bonds,
Series 88, 7.00%, due 5/15/04
Prerefunded (U.S. Government) 5/15/98
at 102................................ 26,931
25,000 Exeter, NH, Unlimited Tax General
Obligation Bonds, 5.30%, due
6/15/08............................... 25,251
50,000 Exeter, NH, Unlimited Tax General
Obligation Bonds, Series 93, 5.10%,
due 6/15/05........................... 50,935
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
<C> <S> <C>
GENERAL OBLIGATION--POLITICAL SUBDIVISIONS, CONTINUED:
$ 50,000 Franklin, NH, General Obligation Bonds,
MBIA insured, 5.20%, due 10/1/07...... $ 50,123
45,000 Manchester, NH, Public Improvement
Bonds, 7.10%, due 9/1/00, Prerefunded
(U.S. Government) 9/1/97 at 102....... 47,999
40,000 Manchester, NH, Public Improvement
Bonds, 7.50%, due 9/1/04, Prerefunded
(U.S. Government) 9/1/97 at 102....... 42,885
250,000 Manchester, NH, Public Improvement
Bonds, 5.50%, due 11/01/12............ 247,175
15,000 Nashua, NH, Unlimited Tax General
Obligation Bonds, 6.80%, due 7/1/09... 16,286
100,000 Nashua, NH, Unlimited Tax General
Obligation Bonds, AMBAC insured,
5.35%, due 7/15/06.................... 101,775
250,000 New Hampshire State Capital Improvement
General Obligation Bonds, Series 91 B,
6.50%, due 11/1/11, Prerefunded
(U.S.Government) 11/1/01 at 102....... 277,696
30,000 Salem, NH, Unlimited Tax General
Obligation Bonds, MBIA insured, 6.45%,
due 3/1/04............................ 32,397
----------
1,160,872
----------
GENERAL OBLIGATION--SCHOOL DISTRICTS (8.7%):
100,000 Concord, NH, School District, General
Obligation Bonds, 4.70%, due
10/15/07.............................. 96,413
100,000 Concord, NH, School District, General
Obligation Bonds, 5.00%, due
10/15/10.............................. 97,031
90,000 Farmington, NH, School District, General
Obligation Bonds, AMBAC insured,
5.55%, due 2/15/02.................... 94,568
100,000 Goffstown, NH, General Obligation Bonds,
AMBAC insured, 5.25%, due 8/15/11..... 95,899
25,000 Hudson, NH, General Obligation Bonds,
School Lot B, 7.30%, due 12/15/06..... 29,437
</TABLE>
See notes to financial statements. 17 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
NEW HAMPSHIRE BOND FUND
SCHEDULE OF INVESTMENTS (continued)
MARCH 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
GENERAL OBLIGATION--SCHOOL DISTRICTS, CONTINUED:
<C> <S> <C>
$ 20,000 Hudson, NH, General Obligation Bonds,
School Lot B, 7.30%, due 12/15/08..... $ 23,797
50,000 Oyster River, NH, Cooperative School
District State Guaranteed General
Obligation Bonds, Lot A, 5.75%, due
6/15/07............................... 52,456
100,000 Oyster River, NH, Cooperative School
District State Guaranteed General
Obligation Bonds, Lot A, 5.85%, due
6/15/08............................... 105,018
----------
594,619
----------
GENERAL OBLIGATION--STATES, TERRITORIES (8.7%):
275,000 Commonwealth of Puerto Rico, Unlimited
Tax General Obligation Bonds, Series
92, AMBAC insured, 5.85%, due
7/1/15................................ 274,183
115,000 Londonderry, NH, Unlimited Tax General
Obligation Bonds, 5.40%, due
1/15/15............................... 110,338
100,000 Nashua, NH, Unlimited Tax General
Obligation Public Improvement Bonds,
6.80%, due 7/1/07..................... 109,155
100,000 New Hampshire State Unlimited Tax
General Obligation Refunding Bonds,
5.25%, due 7/15/11.................... 97,076
----------
590,752
----------
EDUCATION FACILITIES REVENUE (9.1%):
15,000 Mascenic, NH, Regional School District
#1, Lot C, AMBAC insured, 7.20%, due
12/15/07.............................. 17,713
255,000 New Hampshire Higher Education & Health
Facilities Authority (Franklin Pierce
College Revenue Bonds), Series 94,
5.50%, due 10/1/04.................... 240,763
125,000 New Hampshire Higher Education & Health
Facilities Authority (Rivier College
Revenue Bonds), 6.90%, due 1/1/13..... 129,673
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
<C> <S> <C>
EDUCATION FACILITIES REVENUE, CONTINUED:
$ 30,000 New Hampshire Higher Education &
University System of New Hampshire
Revenue Bonds, MBIA Insured, Series
92, 6.00%, due 7/1/07................. $ 31,519
20,000 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................................ 20,894
100,000 University of Puerto Rico Revenue Bonds,
Series L, 7.75%, due 6/1/07,
Prerefunded (U.S. Government) 6/1/96
at 102................................ 102,722
75,000 University of Puerto Rico Revenue Bonds,
Series N, MBIA insured, 6.25%, due
6/1/04................................ 82,407
----------
625,691
----------
HEALTH CARE REVENUE (2.9%):
20,000 New Hampshire Higher Education & Health
Facilities Authority Revenue (Elliot
Hospital of Manchester), 6.50%, due
10/1/11............................... 21,248
100,000 New Hampshire Higher Education & Health
Facilities Authority Revenue (Exeter
Hospital), 5.25%, due 10/1/00......... 100,837
25,000 New Hampshire Higher Education & Health
Facilities Authority (Lakes Region
Hospital Association), 5.75%, due
1/1/11................................ 25,048
50,000 New Hampshire Higher Education & Health
Facilities Authority, (Nashua Memorial
Hospital Revenue Bonds), 5.50%, due
10/1/02............................... 50,985
----------
198,118
----------
HOUSING REVENUE (5.5%):
100,000 New Hampshire State Housing Finance
Authority, Single Family Residential
Revenue Bonds, Series 92 A, 5.25%, due
1/1/07................................ 98,300
</TABLE>
See notes to financial statements. 18 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
NEW HAMPSHIRE BOND FUND
SCHEDULE OF INVESTMENTS (continued)
MARCH 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
HOUSING REVENUE, CONTINUED:
<C> <S> <C>
$ 100,000 Puerto Rico Housing Bank & Finance
Agency Special Obligation Revenue
Bonds, Series 92 H, FSA insured,
5.95%, due 10/1/01.................... $ 106,545
165,000 Virgin Islands Housing Finance
Authority, Single Family Revenue
Refunding Bonds, GNMA Mortgage-Backed,
6.00%, due 3/1/07..................... 166,703
----------
371,548
----------
INDUSTRIAL DEVELOPMENT REVENUE (3.3%):
250,000 Puerto Rico Industrial, Medical &
Environmental Revenue Bonds,
Remarketed 12/1/93, (American Home
Products Project), 5.10%, due
12/1/18............................... 228,503
----------
RESOURCE RECOVERY REVENUE (1.2%):
75,000 Guam Government Water System Revenue
Bonds, CGIC insured, 6.85%, due
7/1/99................................ 80,456
----------
TRANSPORTATION REVENUE (11.4%):
25,000 Guam Government Limited Obligation
Highway Revenue Bonds, Series 92 A,
CGIC insured, 5.60%, due 5/1/00....... 26,030
550,000 New Hampshire State Turnpike System
Refunding Revenue Bonds, Series 91 A,
FGIC insured, 7.00%, due 11/1/06...... 636,851
100,000 New Hampshire State Turnpike System
Refunding Revenue Bonds, Series 91 A,
FGIC insured, 6.75%, due 11/1/11...... 110,753
----------
773,634
----------
OTHER REVENUE (19.0%):
60,000 Puerto Rico Public Buildings Authority,
Commonwealth Guaranteed Public
Education and Health Facilities
Refunding Revenue Bonds, Series 93 M,
5.10%, due 7/1/01..................... 60,767
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
<C> <S> <C>
$ 635,000 Virgin Islands Public Finance Authority
Revenue Bonds, Government Development
Program, Series A, 7.00%, due
10/1/04............................... $ 682,944
210,000 Virgin Islands Public Finance Authority
Revenue Bonds, Series A, 6.90%, due
10/1/01............................... 221,541
160,000 Virgin Islands Public Finance Authority
Revenue Bonds, Series 89 A, 7.30%, due
10/1/18, Prerefunded (U.S. Government)
10/1/00 at 101........................ 180,302
110,000 Virgin Islands Public Finance Authority
Revenue Bonds, Series 89 A, 7.30%, due
10/1/18, Prerefunded (U.S. Government)
10/1/00 at 101........................ 130,717
15,000 Virgin Islands Public Finance Authority
Revenue Bonds, Series 89 B, 7.25%, due
10/1/07, Prerefunded (U.S. Government)
10/1/00 at 101........................ 16,873
----------
1,293,144
----------
Total Municipal Bonds
(cost $6,566,647)..................... 6,605,703
----------
SHORT-TERM HOLDINGS (3.0%):
200,000 New Hampshire Health & Higher Education
Facilities Authority Revenue Municipal
Demand Notes, FGIC insured, 3.35%
variable rate, due 7/1/21............. 200,000
----------
Total Short-Term Holdings
(cost $200,000) 200,000
----------
Total Investments (100.0%)
(cost $6,766,647) 6,805,703
----------
----------
</TABLE>
See notes to financial statements. 19 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
PAYSON BALANCED FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
<C> <S> <C>
COMMON STOCKS (65.0%):
CHEMICALS & ALLIED PRODUCTS (7.9%):
5,090 Bristol-Myers Squibb Company............ $ 435,831
8,700 Eastman Chemical Company................ 601,388
5,750 Schering-Plough Corporation............. 334,219
----------
1,371,438
----------
DOMESTIC DEPOSITORY INSTITUTIONS (4.1%):
7,780 Bank of Boston Corporation.............. 386,083
7,450 Comerica, Inc........................... 311,038
----------
697,121
----------
ELECTRIC, GAS, & SANITARY SERVICES (3.3%):
12,300 Energen Corporation..................... 269,066
9,500 General Public Utilities Corporation.... 313,500
----------
582,566
----------
ELECTRONIC & ELECTRICAL EQUIPMENT EXCEPT COMPUTER
EQUIPMENT (4.3%):
5,795 Harris Corporation...................... 358,568
7,400 Texas Instruments, Inc.................. 376,476
----------
735,044
----------
ENERGY (1.5%):
7,600 Public Service Company of Colorado...... 267,900
----------
FOOD & KINDRED PRODUCTS (8.4%):
25,250 Archer Daniels Midland Company.......... 463,969
12,750 IBP, Inc................................ 326,719
7,200 Universal Foods Corporation............. 274,501
16,775 Whitman Corporation..................... 406,794
----------
1,471,983
----------
HEALTH SERVICES (3.3%):
9,700 Caremark International, Inc............. 243,713
13,000 Humana, Inc.*........................... 326,625
----------
570,338
----------
HOLDING & OTHER INVESTMENT OFFICES (6.1%):
19,600 Merry Land & Investment Company, Inc.... 426,300
12,500 New Plan Realty Trust................... 257,814
17,100 Security Capital Pacific Trust.......... 376,200
----------
1,060,314
----------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER
EQUIPMENT (2.7%):
10,995 Briggs & Stratton Corporation........... 474,160
----------
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
<C> <S> <C>
INSURANCE CARRIERS (0.8%):
2,965 ITT Hartford Group, Inc................. $ 145,285
----------
MISCELLANEOUS MANUFACTURING INDUSTRIES (0.4%):
2,965 ITT Industries, Inc..................... 75,607
----------
MISCELLANEOUS RETAIL (1.4%):
9,000 Toys "R" Us, Inc.*...................... 243,000
----------
OFFICE EQUIPMENT (2.2%):
17,100 American Business Products, Inc......... 386,887
----------
OIL & GAS EXTRACTION (1.8%):
2,600 Atlantic Richfield Company.............. 309,400
----------
PAPER & ALLIED PRODUCTS (1.6%):
4,700 Willamette Industries................... 283,175
----------
PETROLEUM REFINING & RELATED INDUSTRIES (1.9%):
8,900 Repsol S.A., ADR........................ 332,638
----------
TOBACCO (2.3%):
9,600 American Brands, Inc.................... 406,800
----------
TRANSPORTATION EQUIPMENT (8.5%):
5,900 Lockheed Martin Corporation............. 447,662
4,500 Northrop Grumman Corporation............ 286,312
5,520 Textron, Inc............................ 441,600
9,000 Trinity Industries, Inc................. 313,875
----------
1,489,449
----------
TRANSPORTATION SERVICES (1.2%):
7,830 Pittston Brink's Group.................. 209,452
----------
WHOLESALE TRADE--NONDURABLE GOODS (1.3%):
7,600 Supervalu, Inc.......................... 234,650
----------
Total Common Stocks
(cost $9,545,993) 11,347,207
----------
<CAPTION>
FACE
AMOUNT
- --------------------
<C> <S> <C>
CORPORATE BONDS & NOTES (9.9%):
$ 50,000 Allstate Corporation, 5.875%, due
6/15/98............................... 49,745
100,000 Avco Financial Services, 5.875%, due
10/15/97.............................. 99,896
45,000 Avco Financial Services, 5.50%, due
5/1/98................................ 44,462
150,000 Bear Stearns Companies, Inc., 6.625%,
due 1/15/04........................... 146,045
200,000 Chase Manhattan Corporation, 6.25%, due
1/15/06............................... 189,598
50,000 Comerica Bank, Detroit, 5.95%, due
9/15/97............................... 50,019
</TABLE>
*Non-income producing security.
See notes to financial statements. 20 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
PAYSON BALANCED FUND
SCHEDULE OF INVESTMENTS (continued)
MARCH 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
CORPORATE BONDS & NOTES, CONTINUED:
<C> <S> <C>
$ 50,000 Ford Motor Credit Corporation, 7.125%,
due 12/1/97........................... $ 50,858
100,000 GTE South, Inc., 6.25%, due 11/15/97.... 100,319
100,000 Household Finance Corporation, 7.625%,
due 6/15/99........................... 103,644
200,000 Household Finance Corporation, 8.00%,
due 8/15/04........................... 209,881
65,000 PepsiCo, Inc., 6.25%, due 9/1/99........ 64,864
200,000 Sears Roebuck Acceptance Corporation,
6.75%, due 9/15/05.................... 196,557
100,000 Southwestern Bell Capital Corporation,
6.05%, due 2/9/98..................... 100,061
100,000 Wachovia Corporation, 7.00%, due
12/15/99.............................. 101,986
50,000 Wal-Mart Stores, Inc., 5.50%, due
3/1/98................................ 49,569
50,000 Wisconsin Natural Gas Company, 6.625%,
due 1/15/97........................... 50,341
100,000 WMX Technologies, Inc., 8.25%, due
11/15/99.............................. 106,024
----------
Total Corporate Bonds & Notes
(cost $1,727,080) 1,713,869
----------
GOVERNMENT AGENCY NOTES (10.2%):
300,000 Federal Home Loan Bank, 6.41%, due
12/29/03.............................. 288,855
400,000 Federal Home Loan Mortgage Corporation,
6.89%, due 10/3/05.................... 397,030
200,000 Federal Home Loan Mortgage Corporation,
6.645%, due 2/9/06.................... 191,833
100,000 Federal National Mortgage Association,
7.70%, due 9/10/96.................... 100,991
100,000 Federal National Mortgage Association,
9.55%, due 11/10/97................... 105,766
600,000 Federal National Mortgage Association,
6.54%, due 9/8/00..................... 599,739
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
<C> <S> <C>
GOVERNMENT AGENCY NOTES, CONTINUED:
$ 100,000 Federal National Mortgage Association,
6.38%, due 4/29/03.................... $ 94,761
----------
Total Government Agency Notes
(cost $1,778,056) 1,778,975
----------
COLLATERALIZED MORTGAGE OBLIGATIONS (4.3%):
200,000 Federal Home Loan Mortgage Corporation,
Series 1678 C, 6.00%, due 8/15/08..... 187,268
200,000 Federal Home Loan Mortgage Corporation,
Series 1491 GB, 6.90%, due 11/15/21... 193,262
400,000 Federal National Mortgage Association,
Series 1992-184 C, 7.00%, due
10/25/21.............................. 375,664
----------
Total Collateralized Mortgage Obligations
(cost $798,125) 756,194
----------
MORTGAGE BACKED SECURITIES (1.1%):
184,094 Government National Mortgage
Association, Pool 394795, 7.50%, due
10/15/10.............................. 188,341
----------
Total Mortgage Backed Securities
(cost $189,157) 188,341
----------
U.S. TREASURY NOTES (6.9%):
125,000 9.125%, due 5/15/99..................... 136,054
275,000 6.75%, due 6/30/99...................... 281,187
275,000 7.25%, due 5/15/04...................... 289,694
500,000 6.50%, due 8/15/05...................... 503,280
----------
Total U.S. Treasury Notes
(cost $1,203,203) 1,210,215
----------
SHORT-TERM HOLDINGS (2.6%):
409,109 1784 U.S. Treasury Money Market Fund.... 409,109
40,939 Dreyfus Government Cash Management
Fund.................................. 40,939
----------
Total Short-Term Holdings
(cost $450,048) 450,048
----------
Total Investments (100.0%)
(cost $15,691,662) $17,444,849
----------
----------
</TABLE>
See notes to financial statements. 21 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
PAYSON VALUE FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
<C> <S> <C>
COMMON STOCK (95.6%):
BUILDING CONSTRUCTION--GENERAL CONTRACTORS (2.3%):
10,000 Southdown, Inc.......................... $ 236,250
----------
CHEMICALS & ALLIED PRODUCTS (10.0%):
5,000 Abbott Laboratories..................... 203,750
3,000 Bristol-Myers Squibb Company............ 256,875
4,000 Eastman Chemical Company................ 276,500
5,000 Schering-Plough Corporation............. 290,625
----------
1,027,750
----------
COMMUNICATIONS (2.4%):
3,500 Telecom Corporation of New Zealand,
Ltd................................... 250,686
----------
DOMESTIC DEPOSITORY INSTITUTIONS (11.2%):
5,000 Bank of Boston Corporation.............. 248,125
6,000 Comerica, Inc........................... 250,500
2,000 First Interstate Bancorp................ 347,000
3,500 First Virginia Banks, Inc............... 141,310
5,000 JSB Financial, Inc...................... 168,125
----------
1,155,060
----------
ELECTRIC, GAS, & SANITARY SERVICES (5.3%):
7,000 CINergy Corporation..................... 210,000
5,000 General Public Utilities Corporation.... 165,000
5,000 Public Service Company of Colorado...... 176,250
----------
551,250
----------
ELECTRONIC & ELECTRICAL EQUIPMENT, EXCEPT
COMPUTER EQUIPMENT (9.6%):
4,000 Avnet, Inc.............................. 193,000
4,000 General Electric Company................ 311,500
4,500 Harris Corporation...................... 278,435
4,000 Texas Instruments, Inc.................. 203,500
----------
986,435
----------
FOOD & KINDRED PRODUCTS (9.5%):
14,000 Archer Daniels Midland Company.......... 257,250
11,000 IBP, Inc................................ 281,875
5,000 Universal Foods Corporation............. 190,625
10,000 Whitman Corporation..................... 242,500
----------
972,250
----------
FOOD STORES (3.2%):
10,000 American Stores Company................. 330,000
----------
HEALTH SERVICES (4.1%):
7,650 Caremark International, Inc............. 192,208
9,000 Humana, Inc.*........................... 226,125
----------
418,333
----------
HOLDING & OTHER INVESTMENT OFFICES (4.8%):
8,000 Merry Land & Investment Company, Inc.... 174,000
5,000 New Plan Realty Trust................... 103,125
10,000 Security Capital Pacific Trust.......... 220,000
----------
497,125
----------
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
<C> <S> <C>
INDUSTRIAL & COMMERCIAL MACHINERY &
COMPUTER EQUIPMENT (4.2%):
6,000 Briggs & Stratton Corporation........... $ 258,750
3,500 York International Corporation.......... 171,500
----------
430,250
----------
MISCELLANEOUS MANUFACTURING INDUSTRIES (1.0%):
4,000 ITT Industries, Inc..................... 102,000
----------
MISCELLANEOUS RETAIL (2.6%):
10,000 Toys "R" Us, Inc.*...................... 270,000
----------
OIL & GAS EXTRACTION (1.2%):
1,000 Atlantic Richfield Company.............. 119,000
----------
PAPER & ALLIED PRODUCTS (3.5%):
3,500 Boise Cascade Corporation............... 147,000
3,500 Willamette Industries................... 210,875
----------
357,875
----------
PETROLEUM REFINING & RELATED INDUSTRIES (5.7%):
2,500 Mobil Corporation....................... 289,689
8,000 Repsol S.A., ADR........................ 299,000
----------
588,689
----------
PRINTING, PUBLISHING, & ALLIED INDUSTRIES (1.0%):
4,525 American Business Products, Inc......... 102,378
----------
TELECOMMUNICATIONS (2.1%):
3,500 AT&T Corporation........................ 214,375
----------
TOBACCO PRODUCTS (2.5%):
6,000 American Brands, Inc.................... 254,250
----------
TRANSPORTATION EQUIPMENT (6.0%):
3,000 Lockheed Martin Corporation............. 227,628
3,000 Northrop Grumman Corporation............ 190,875
2,400 Textron, Inc............................ 192,000
----------
610,503
----------
TRANSPORTATION SERVICES (1.6%):
6,300 Pittston Brink's Group.................. 168,526
----------
WHOLESALE TRADE--NONDURABLE GOODS (1.8%):
6,000 Supervalu, Inc.......................... 185,250
----------
Total Common Stock
(cost $7,861,370) 9,828,235
----------
<CAPTION>
FACE
AMOUNT
- --------------------
<C> <S> <C>
SHORT TERM HOLDINGS (4.4%):
$197,761 1784 U.S. Treasury Money Market Fund.... $ 197,761
256,052 Dreyfus Government Cash Management
Fund.................................. 256,052
----------
Total Short Term Holdings
(cost $453,813) 453,813
----------
Total Investments (100.0%)
(cost $8,315,183) $10,282,048
----------
----------
</TABLE>
*Non-income producing security.
See notes to financial statements.
22 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 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>
ASSETS:
Investments, at value.......... $24,762,995 $17,656,582 $25,637,065 $6,805,703 $43,296,823 $17,444,849 $10,282,048
Interest, dividends and other
receivables.................. 283,508 330,463 496,776 136,222 -- 101,627 18,585
Receivable for securities
sold......................... 765,000 -- -- -- -- -- --
Receivable for shares issued... -- -- -- -- -- 9,630 47,000
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total assets....................... 25,811,503 17,987,045 26,133,841 6,941,925 43,296,823 17,556,106 10,347,633
----------- ----------- ----------- ----------- ----------- ----------- -----------
LIABILITIES:
Dividends payable.............. 124,628 51,144 45,056 7,942 158,856 62,208 15,436
Accrued fees and other
expenses...................... 1,579 9,096 13,426 3,486 35,038 34,970 12,718
Payable for securities
purchased..................... -- -- 31,492 -- -- -- --
Payable for shares redeemed.... 9,318 12,000 -- 27,049 -- 3,451 --
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total liabilities.................. 135,525 72,240 89,974 38,477 193,894 100,629 28,154
----------- ----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS......................... $25,675,978 $17,914,805 $26,043,867 $6,903,448 $43,102,929 $17,455,477 $10,319,479
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
COMPONENTS OF NET ASSETS:
Capital paid in................ $25,512,304 $17,295,866 $25,626,976 $6,885,448 $43,095,716 $14,666,213 $ 7,507,825
Undistributed net investment
income....................... 16,544 -- -- 489 19,454 189 1,815
Unrealized appreciation........ 111,321 532,951 485,210 39,056 -- 1,753,187 1,966,865
Accumulated net realized gains
(losses)..................... 35,809 85,988 (68,319) (21,545 ) (12,241) 1,035,888 842,974
----------- ----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS......................... $25,675,978 $17,914,805 $26,043,867 $6,903,448 $43,102,929 $17,455,477 $10,319,479
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
SHARES OUTSTANDING................. 2,515,659 1,694,675 2,429,370 668,354 43,095,716 1,274,061 645,218
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
NET ASSET VALUE PER SHARE.......... $ 10.21 $ 10.57 $ 10.72 $ 10.33 $ 1.00 $ 13.70 $ 15.99
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
a) Cost of Investments............. $24,651,674 $17,123,631 $25,151,855 $6,766,647 $43,296,823 $15,691,662 $ 8,315,183
</TABLE>
See notes to financial statements. 23 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINE NEW DAILY
INVESTORS TAXSAVER MUNICIPAL HAMPSHIRE ASSETS PAYSON
BOND BOND BOND BOND TREASURY BALANCED PAYSON
FUND FUND FUND FUND FUND FUND VALUE FUND
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income................ $2,074,764 $ 1,035,594 $1,399,481 $ 313,078 $1,932,064 $ 416,675 $ 39,951
Dividend income................ -- -- -- -- -- 284,779 221,616
Net investment income from
Treasury Portfolio of Core
Trust (Delaware) (Note 2)..... -- -- -- -- 223,902 * -- --
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total investment income........ 2,074,764 1,035,594 1,399,481 313,078 2,155,966 701,454 261,567
----------- ----------- ----------- ----------- ----------- ----------- -----------
EXPENSES:
Investment advisory............ 107,061 69,544 105,104 23,870 69,466 95,588 71,662
Management..................... 80,296 52,158 78,828 17,902 108,685 31,863 17,916
Transfer agency................ 80,320 56,344 84,962 28,488 110,792 58,767 38,519
Accounting..................... 38,000 39,000 48,000 37,000 33,379 38,000 37,000
Professional services.......... 32,913 22,298 33,090 12,647 30,796 22,644 13,705
Trustees....................... 2,416 1,570 2,374 538 3,509 1,442 810
Custody........................ 9,126 3,614 7,035 1,293 9,927 6,055 2,439
Other.......................... 15,085 12,709 28,371 12,848 21,764 16,586 11,134
----------- ----------- ----------- ----------- ----------- ----------- -----------
365,217 257,237 387,764 134,586 388,318 270,945 193,185
Fees waived and expenses
reimbursed........................ (250,254 ) (152,639) (230,521 ) (98,858 ) (198,429 ) (87,265 ) (63,021)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total expenses..................... 114,963 104,598 157,243 35,728 189,889 183,680 130,164
----------- ----------- ----------- ----------- ----------- ----------- -----------
NET INVESTMENT INCOME.............. 1,959,801 930,996 1,242,238 277,350 1,966,077 517,774 131,403
----------- ----------- ----------- ----------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain (loss) on
investments....................... 42,127 179,731 71,276 36,867 (12,241 ) 1,250,859 903,175
Change in unrealized
appreciation...................... 497,162 112,851 539,077 76,453 -- 1,319,794 1,186,194
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net gain (loss) on investments..... 539,289 292,582 610,353 113,320 (12,241 ) 2,570,653 2,089,369
----------- ----------- ----------- ----------- ----------- ----------- -----------
INCREASE IN NET ASSETS FROM
OPERATIONS........................ $2,499,090 $ 1,223,578 $1,852,591 $ 390,670 $1,953,836 $3,088,427 $ 2,220,772
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
*Net of portfolio expenses of $6,756.
See notes to financial statements. 24 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED MARCH 31, 1996 AND MARCH 31, 1995
- --------------------------------------------------------------------------------
<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--3/31/94........... $ 26,083,140 $ 16,517,889 $26,309,893 $3,554,585
------------- ------------- ----------- ----------
OPERATIONS:
Net investment income....... 2,050,655 916,723 1,334,004 220,607
Realized gain on
investments............... 45,903 (78,499) (139,597 ) (58,412 )
Change in unrealized
appreciation
(depreciation)............ (985,430) 157,985 281,218 113,598
------------- ------------- ----------- ----------
1,111,128 996,209 1,475,625 275,793
------------- ------------- ----------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income....... (2,051,195) (917,012) (1,334,390 ) (220,579 )
Realized capital gain....... -- -- (19,362 ) --
------------- ------------- ----------- ----------
(2,051,195) (917,012) (1,353,752 ) (220,579 )
------------- ------------- ----------- ----------
CAPITAL SHARE TRANSACTIONS:
Sale of shares.............. 5,936,878 595,834 2,426,440 237,508 4,136,139 401,955 2,273,862 227,167
Reinvested dividends........ 154,160 16,652 148,901 14,562 790,219 83,767 127,918 15,282
------------- --------- ------------- -------- ----------- --------- ---------- -------
6,091,038 612,486 2,575,341 252,070 4,926,358 485,722 2,401,780 242,449
Shares repurchased.......... (5,343,727) (535,922) (3,154,527) (306,901) (5,833,480 ) (584,253) (735,803 ) (76,096)
------------- --------- ------------- -------- ----------- --------- ---------- -------
747,311 76,564 (579,186) (54,831) (907,122 ) (98,531) 1,665,977 166,353
------------- --------- ------------- -------- ----------- --------- ---------- -------
--------- -------- --------- -------
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
Realized gain on
investments............... 42,127 179,731 71,276 36,867
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:
Net investment income....... (1,951,033) (931,523) (1,242,937 ) (277,495 )
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
------------- ------------- ----------- ----------
------------- ------------- ----------- ----------
</TABLE>
See notes to financial statements. 25 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED MARCH 31, 1996 AND MARCH 31, 1995
- --------------------------------------------------------------------------------
<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--3/31/94..................................... $ 26,505,169 $11,354,873 $ 5,059,939
------------ ------------ -----------
OPERATIONS:
Net investment income................................. 1,320,747 489,040 102,117
Realized gain on investments.......................... 21,288 169,116 96,089
Change in unrealized appreciation..................... -- 124,550 265,744
------------ ------------ -----------
1,342,035 782,706 463,950
------------ ------------ -----------
DISTRIBUTIONS TO
SHAREHOLDERS:
Net investment income................................. (1,320,515) (485,995) (99,451)
Realized capital gain................................. -- (52,191) --
------------ ------------ -----------
(1,320,515) (538,186) (99,451)
------------ ------------ -----------
CAPITAL SHARE TRANSACTIONS:
Sale of shares........................................ 70,525,862 2,983,899 267,891 3,208,329 271,459
Reinvested dividends.................................. 664,035 281,434 24,437 52,142 4,337
------------ ------------ --------- ----------- ---------
71,189,897 3,265,333 292,328 3,260,471 275,796
Shares repurchased.................................... (61,387,731) (992,685) (96,387) (725,255) (67,142)
------------ ------------ --------- ----------- ---------
9,802,166 2,272,648 195,941 2,535,216 208,654
------------ ------------ --------- ----------- ---------
--------- ---------
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
Realized gain (loss) on investments................... (12,241) 1,250,859 903,175
Change in unrealized appreciation..................... -- 1,319,794 1,186,194
------------ ------------ -----------
1,953,836 3,088,427 2,220,772
------------ ------------ -----------
DISTRIBUTIONS TO
SHAREHOLDERS:
Net investment income................................. (1,967,071) (528,066) (135,212)
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
------------ ------------ -----------
------------ ------------ -----------
</TABLE>
*Share transactions at net asset value of $1.00 per share.
See notes to financial statements.
26 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTORS TAXSAVER
BOND BOND
FUND FUND
------------------------------------------------- --------------------------------------------------
SELECTED PER SHARE DATA YEAR ENDED YEAR ENDED
AND RATIOS FOR A SHARE MARCH 31, MARCH 31,
OUTSTANDING THROUGHOUT ------------------------------------------------- --------------------------------------------------
THE PERIODS. 1996 1995 1994 1993 1992 1996 1995 1994 1993 1992
------- ------- ------- -------- -------- ------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning net asset value
per share.............. $10.00 $10.38 $10.71 $10.43 $10.09 $10.39 $10.35 $10.63 $10.26 $10.10
------- ------- ------- -------- -------- ------- ------- -------- -------- --------
Net investment income.... 0.74 0.82 0.81 0.82 0.83 0.57 0.57 0.57 0.63 0.68
Net realized and
unrealized gain (loss)
on securities.......... 0.21 (0.38) (0.30) 0.53 0.44 0.18 0.04 (0.01) 0.49 0.20
Dividends from net
investment income...... (0.74) (0.82) (0.81) (0.82) (0.83) (0.57) (0.57) (0.57) (0.63) (0.68)
Distributions from net
realized gains......... -- -- (0.03) (0.25) (0.10) -- -- (0.27) (0.12) (0.04)
------- ------- ------- -------- -------- ------- ------- -------- -------- --------
Ending 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
------- ------- ------- -------- -------- ------- ------- -------- -------- --------
------- ------- ------- -------- -------- ------- ------- -------- -------- --------
Ratios to average net
assets:
Expenses(a)............ 0.43% 0.75% 0.75% 0.75% 0.70% 0.60% 0.60% 0.60% 0.60% 0.55%
Net investment
income................ 7.29% 8.19% 7.49% 7.71% 7.93% 5.35% 5.62% 5.27% 5.98% 6.64%
Total return............. 9.84% 4.55% 4.70% 13.53% 12.91% 7.36% 6.18% 5.24% 11.28% 8.95%
Portfolio turnover
rate................... 42.89% 48.17% 41.41% 193.21% 221.39% 61.61% 63.85% 141.80% 240.36% 104.29%
Net assets at the end of
year (000's omitted)... $25,676 $25,890 $26,083 $26,832 $24,336 $17,915 $16,018 $16,518 $16,580 $11,207
(a)During the period, various fees and expenses were waived and reimbursed, respectively. Had such waiver and reimbursements not
occured, the ratio of expenses to average net assets would have been:
1.36% 1.33% 1.31% 1.40% 1.51% 1.48% 1.45% 1.50% 1.56% 1.66%
</TABLE>
See notes to financial statements. 27 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINE
MUNICIPAL NEW HAMPSHIRE
BOND BOND
FUND FUND
------------------------------------------------ ---------------------------------------
SELECTED PER SHARE DATA YEAR ENDED YEAR ENDED
AND RATIOS FOR A SHARE MARCH 31, MARCH 31,
OUTSTANDING THROUGHOUT ------------------------------------------------ ---------------------------------------
THE PERIODS. 1996 1995 1994 1993 1992(B) 1996 1995 1994 1993(B)
------- ------- ------- -------- ------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning net asset value
per
share.................. $10.47 $10.37 $10.55 $9.98 $10.00 $10.08 $9.96 $10.01 $10.00
------- ------- ------- -------- ------- ------- ------- -------- --------
Net investment income.... 0.51 0.52 0.52 0.58 0.19 0.48 0.49 0.51 0.12
Net realized and
unrealized gain
(loss) on securities... 0.25 0.11 (0.16) 0.57 (0.02) 0.25 0.12 (0.03) 0.01
Dividends from net
investment
income................. (0.51) (0.52) (0.52) (0.58) (0.19) (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.................. $10.72 $10.47 $10.37 $10.55 $ 9.98 $10.33 $10.08 $ 9.96 $10.01
------- ------- ------- -------- ------- ------- ------- -------- --------
------- ------- ------- -------- ------- ------- ------- -------- --------
Ratios to average net
assets:
Expenses(a)............ 0.60% 0.50% 0.50% 0.40% 0.46%(c) 0.60% 0.46% 0.34% 0.50%(c)
Net investment
income................ 4.73% 5.08% 4.81% 5.25% 5.65%(c) 4.65% 4.95% 4.68% 4.96%(c)
Total return............. 7.34% 6.31% 3.42% 11.80% 5.27%(c) 7.36% 6.32% 4.75% 5.55%(c)
Portfolio turnover
rate................... 34.07% 31.55% 13.47% 7.82% 15.24% 34.31% 37.59% 9.60% --
Net assets at the end of
year
(000's omitted)........ $26,044 $25,525 $26,310 $16,518 $1,968 $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 occured, the ratio of expenses to average net assets would have been:
1.48% 1.40% 1.44% 1.98% 6.83%(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. 28 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DAILY
ASSETS PAYSON
TREASURY BALANCED
FUND FUND
----------------------------------------- ----------------------------------------------------
SELECTED PER SHARE DATA YEAR ENDED YEAR ENDED
AND RATIOS FOR A SHARE MARCH 31, MARCH 31,
OUTSTANDING THROUGHOUT ----------------------------------------- ----------------------------------------------------
THE PERIODS. 1996 1995 1994 1993(B) 1996 1995 1994 1993 1992(B)
-------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning net asset value
per
share.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 11.90 $ 11.71 $ 11.40 $ 10.21 $ 10.00
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net investment income.... 0.05 0.04 0.03 0.02 0.43 0.44 0.34 0.31 0.10
Net realized and
unrealized gain
(loss) on securities... -- -- -- -- 2.12 0.24 0.46 1.20 0.21
Dividends from net
investment
income................. (0.05) (0.04) (0.03) (0.02) (0.43) (0.44) (0.35) (0.31) (0.10)
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 $ 13.70 $ 11.90 $ 11.71 $ 11.40 $ 10.21
-------- -------- -------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- -------- -------- --------
Ratios to average net
assets:
Expenses(a)............ 0.50%(e) 0.37% 0.33% 0.22%(c) 1.15% 1.15% 1.15% 1.15% 1.13%(c)
Net investment
income................ 5.01% 4.45% 2.82% 2.92%(c) 3.25% 3.91% 4.37% 3.27% 3.46%(c)
Total return............. 5.18% 4.45% 2.83% 3.13%(c) 21.70% 6.00% 6.99% 15.12% 9.15%(c)
Portfolio turnover
rate................... N/A N/A N/A N/A 61.77% 50.06% 80.13% 30.77% 1.53%
Average brokerage
commission rate(d)..... N/A -- -- -- $0.0973 -- -- -- --
Net assets at the end of
year
(000's omitted)........ $43,103 $36,329 $26,505 $ 4,687 $17,455 $13,872 $11,355 $ 5,396 $ 2,667
(a)During the period, various fees and expenses were waived and reimbursed, respectively. Had such waiver and
reimbursements
not occured, the ratio of expenses to average net assets would have been:
1.06%(e) 1.10% 1.17% 2.43%(c) 1.70% 1.72% 1.95% 2.60% 4.88%(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.
(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. 29 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 -----------------------------------------
THE PERIODS. 1996 1995 1994 1993(B)
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Beginning net asset value per
share............................ $ 12.71 $ 12.11 $ 11.01 $ 10.00
-------- -------- -------- --------
Net investment income.............. 0.21 0.18 0.13 0.08
Net realized and unrealized gain
(loss) on securities............. 3.29 0.60 1.12 1.02
Dividends from net investment
income........................... (0.21) (0.18) (0.15) (0.09)
Distributions from net realized
gains............................ (0.01) -- -- --
-------- -------- -------- --------
Ending net asset value per
share............................ $ 15.99 $ 12.71 $ 12.11 $ 11.01
-------- -------- -------- --------
-------- -------- -------- --------
Ratios to average net assets:
Expenses(a)...................... 1.45% 1.46% 1.45% 1.44%(c)
Net investment income............ 1.47% 1.59% 1.38% 1.63%(c)
Total return....................... 27.77% 6.52% 11.38% 17.05%(c)
Portfolio turnover rate............ 53.06% 27.20% 32.15% 23.95%
Average brokerage commission
rate(d).......................... $0.0993 -- -- --
Net assets at the end of year
(000's omitted).................. $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 occured, the ratio of expenses to average net assets would have been:
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. 30 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996
- --------------------------------------------------------------------------------
NOTE 1. ORGANIZATION
Forum Funds (the "Trust") is an open-end management investment company organized
as a Delaware business trust. Prior to January 5, 1996, the Trust's operation
was conducted as Forum Funds, Inc., a Maryland corporation. The Trust currently
has seven 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. 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>
Since February 21, 1996, 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. Prior to that date, the Fund invested
directly in securities. 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 (99.99% at March 31, 1996). 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 ("GAAP") 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
(the "Bond and Equity Funds") other than Daily Assets Treasury Fund 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
31 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996
- --------------------------------------------------------------------------------
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 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.
As of March 31, 1996, certain of the Funds have capital loss carryovers
available to offset future capital gains as follows:
<TABLE>
<CAPTION>
DAILY
MAINE NEW ASSETS
MUNICIPAL HAMPSHIRE TREASURY
BOND FUND BOND FUND FUND
---------- ---------- ----------
<S> <C> <C> <C>
Carryovers expiring in 2003............. $ 26,535 $ 21,216 $ --
Carryovers expiring in 2004............. 41,784 -- 12,144
</TABLE>
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 and prior
to February 21, 1996, was the investment advisor for Daily Assets Treasury Fund.
Forum Advisors received an advisory fee of 0.20% of the Fund's average daily net
assets prior to February 21, 1996 and .05% subsequent to that date. See Note 3
of Treasury Portfolio's Notes to Financial Statements, which are included
elsewhere in the report.
32 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996
- --------------------------------------------------------------------------------
MANAGEMENT AND OTHER SERVICES-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, New Hampshire Bond Fund and Daily Assets Treasury
Fund at an annual rate of 0.30% of the average daily net assets of each Fund.
Effective February 21, 1996, the management fee for Daily Assets Treasury Fund
was reduced to 0.10%. The Manager receives a management fee for its services to
Payson Balanced Fund and Payson Value Fund at an annual rate of 0.20% of the
average daily net assets of each Fund. In addition, certain legal expenses were
charged to the Trust by the Manager. The amount of legal expenses for Investors
Bond Fund, TaxSaver Bond Fund, Maine Municipal Bond Fund, New Hampshire Bond
Fund and Daily Assets Treasury Fund were $4,877 , $3,178, $4,771, $1,111 and
$7,282, respectively.
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. Effective
February 21, 1996, FFC's fee for Daily Assets Treasury Fund was reduced to
$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 also received sales commissions during the year ended March 31, 1996
amounting to $36,552 after deducting $247,564 allowed to authorized dealers and
agents. The Manager, Forum Advisors and FFC are affiliated companies.
For the year ended March 31, 1996, expenses reimbursed by the Manager in the
Investors Bond Fund, TaxSaver Bond Fund, Maine Municipal Bond Fund, New
Hampshire Bond Fund, Payson Balanced Fund and Payson Value Fund were $60,826,
$61,593, $109,939, $80,310, $17,604 and $23,832, respectively.
For the year ended March 31, 1996, fees waived by the transfer agent, respective
investment advisers and the Manager were as follows:
<TABLE>
<CAPTION>
TRANSFER INVESTMENT
AGENT ADVISER MANAGER
---------- ---------- ----------
<S> <C> <C> <C>
Investors Bond Fund..................... $ 60,882 $ 48,250 $ 80,296
TaxSaver Bond Fund...................... 38,888 -- 52,158
Maine Municipal Bond Fund............... 41,754 -- 78,828
New Hampshire Bond Fund................. 645 -- 17,903
Daily Assets Treasury Fund.............. 96,881 -- 101,548
Payson Balanced Fund.................... 37,798 -- 31,863
Payson Value Fund....................... 21,273 -- 17,916
</TABLE>
33 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996
- --------------------------------------------------------------------------------
NOTE 4. PURCHASES AND SALES OF SECURITIES
Cost of purchases and proceeds from sales of securities (including maturities)
of portfolio securities (excluding short-term investments) during the year ended
March 31, 1996 were as follows:
<TABLE>
<CAPTION>
COST OF PROCEEDS
PURCHASES FROM SALES
------------ ------------
<S> <C> <C>
Investors Bond Fund..................... $ 10,355,134 $ 9,555,993
TaxSaver Bond Fund...................... 11,102,130 10,083,308
Maine Municipal Bond Fund............... 9,622,242 8,444,174
New Hampshire Bond Fund................. 3,556,558 2,009,142
Payson Balanced Fund.................... 11,099,599 9,628,369
Payson Value Fund....................... 5,411,486 4,367,734
</TABLE>
The cost of investments for Federal income tax purposes as of March 31, 1996 is
the same as for financial reporting purposes for all Funds except for New
Hampshire Bond Fund. The cost basis for Federal income tax purposes for New
Hampshire Bond Fund is $6,766,977. Unrealized appreciation and depreciation as
of March 31, 1996 were as follows:
<TABLE>
<CAPTION>
UNREALIZED UNREALIZED
APPRECIATION DEPRECIATION
------------ ------------
<S> <C> <C>
Investors Bond Fund..................... $ 657,100 $ 545,779
TaxSaver Bond Fund...................... 573,643 40,692
Maine Municipal Bond Fund............... 593,815 108,605
New Hampshire Bond Fund................. 103,171 64,115
Payson Balanced Fund.................... 1,950,565 197,378
Payson Value Fund....................... 2,014,834 47,969
</TABLE>
NOTE 5. FEDERAL TAX STATUS OF DIVIDENDS DECLARED DURING THE FISCAL YEAR
(UNAUDITED)
<TABLE>
<CAPTION>
SHORT TERM LONG TERM QUALIFYING ORDINARY EXEMPT
CAPITAL GAIN CAPITAL GAIN DIVIDENDS INCOME INTEREST
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Investors Bond Fund..................... $ .004300 $ -- -- 100.00% --
TaxSaver Bond Fund...................... -- .004460 -- -- 100.00 %
Maine Municipal Bond Fund............... -- -- -- -- 100.00 %
New Hampshire Bond Fund................. -- -- -- -- 100.00 %
Daily Assets Treasury Fund.............. -- -- -- 100.00% --
Payson Balanced Fund.................... .009344 .306621 40.18 % 59.82% --
Payson Value Fund....................... -- .011599 77.98 % 22.02% --
</TABLE>
For Federal income purposes, dividends from short term capital gain are
classified as ordinary income.
34 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996
- --------------------------------------------------------------------------------
NOTE 6. SPECIAL MEETINGS OF SHAREHOLDERS (UNAUDITED)
There were special meetings of the shareholders of Forum Funds, Inc. (the
"Company") on December 6, 1995 and December 13, 1995. At the December 6, 1995
meeting, there was a quorum for the Company and each of the Funds, except New
Hampshire Bond Fund. At this meeting, (i) shareholders of the Company approved
the reorganization of the Company as a Delaware business trust under the name
Forum Funds (the "Reorganization"), (ii) shareholders of each of the Funds,
except New Hampshire Bond Fund and Daily Assets Treasury Fund, approved the
adoption of a new investment policy that authorizes each such Fund to invest all
or a portion of its assets in a corresponding portfolio of an open-end
investment company having substantially the same investment objective and
policies as each such Fund upon further action by the Board of Trustees, (iii)
shareholders of Daily Assets Treasury Fund adopted an investment policy
authorizing the Fund to invest all of its investable assets in Treasury
Portfolio, and (iv) shareholders of Daily Assets Treasury Fund approved the
appointment of Linden Asset Management as sub-adviser to Treasury Portfolio. At
the December 13, 1995 meeting, shareholders of New Hampshire Bond Fund approved
the adoption by the Fund of a new investment policy that authorizes, upon
further action by the Board of Trustees, the Fund to invest all or part of its
investment assets in a corresponding portfolio of an open-end investment company
having substantially the same investment objective and policies as the Fund. See
Proposal (v) below.
THE FOLLOWING IS A SUMMARY OF THE VOTES FOR EACH OF THE PROPOSALS:
<TABLE>
<CAPTION>
PROPOSAL (I) TRUST
- ---------------------------------------- ---------------
<S> <C>
Shares Present.......................... 40,391,657
For..................................... 99.82 %
Against................................. 0.07 %
Abstain................................. 0.11 %
</TABLE>
<TABLE>
<CAPTION>
MAINE PAYSON
INVESTORS TAXSAVER MUNICIPAL BALANCED PAYSON VALUE
PROPOSAL (II) BOND FUND BOND FUND BOND FUND FUND FUND
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Shares Present.......................... 2,265,950 1,301,778 819,884 787,369 402,299
For..................................... 99.90 % 99.63 % 94.91 % 95.14 % 98.92 %
Against................................. 0.00 % 0.37 % 1.90 % 1.12 % 0.43 %
Abstain................................. 0.10 % 0.00 % 3.19 % 3.74 % 0.65 %
</TABLE>
<TABLE>
<CAPTION>
PROPOSAL (III) DAILY ASSETS TREASURY FUND
- ---------------------------------------- ------------------------------
<S> <C>
Shares Present.......................... 34,710,270
For..................................... 100.00 %
Against................................. 0.00 %
Abstain................................. 0.00 %
</TABLE>
35 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSAL (IV) DAILY ASSETS TREASURY FUND
- ---------------------------------------- ------------------------------
<S> <C>
Shares Present.......................... 34,710,270
For..................................... 100.00 %
Against................................. 0.00 %
Abstain................................. 0.00 %
</TABLE>
<TABLE>
<CAPTION>
NEW HAMPSHIRE BOND
PROPOSAL (V) FUND
- ---------------------------------------- --------------------
<S> <C>
Shares Present.......................... 244,297
For..................................... 94.64 %
Against................................. 1.64 %
Abstain................................. 3.72 %
</TABLE>
36 FORUM FUNDS
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT AUDITORS
MARCH 31, 1996
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders,
Forum Funds:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of the Investors Bond, TaxSaver Bond, Maine
Municipal Bond, New Hampshire Bond, Daily Asset Treasury, Payson Balanced and
Payson Value Funds of Forum Funds as of March 31, 1996, the related statements
of operations for the year then ended and of changes in net assets and the
financial highlights for each of the periods presented. These financial
statements and financial highlights are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1996, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of the Investors Bond,
TaxSaver Bond, Maine Municipal Bond, New Hampshire Bond, Daily Asset Treasury,
Payson Balanced and Payson Value Funds of Forum Funds at March 31, 1996, the
results of their operations, the changes in their net assets and the financial
highlights for the periods presented, in conformity with generally accepted
accounting principles.
Deloitte & Touche LLP
New York, New York
May 10, 1996
37 FORUM FUNDS
<PAGE>
CORE TRUST (DELAWARE)
ANNUAL REPORT
MARCH 31, 1996
<PAGE>
- --------------------------------------------------------------------------------
TREASURY PORTFOLIO
SCHEDULE OF INVESTMENTS
MARCH 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
<C> <S> <C>
U.S. TREASURY BILLS (62.4%):
$11,500,000 5.060% yield, due 4/4/96................ $11,495,296
8,000,000 5.133% yield, due 4/18/96............... 7,981,073
7,500,000 5.226% yield, due 4/25/96............... 7,474,450
----------
Total U.S. Treasury Bills 26,950,819
----------
GOVERNMENT AGENCY NOTES (28.5%):
2,000,000 Student Loan Marketing Association,
5.37% variable
rate, due 5/9/96...................... 2,000,000
2,000,000 Student Loan Marketing Association,
5.42% variable
rate, due 7/11/96..................... 2,000,178
1,000,000 Student Loan Marketing Association,
5.32% variable
rate, due 8/8/96...................... 1,000,000
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
<C> <S> <C>
GOVERNMENT AGENCY NOTES, CONTINUED:
$7,315,000 Student Loan Marketing Association,
5.33% variable
rate, due 12/20/96.................... $7,311,703
----------
Total Government Agency Notes 12,311,881
----------
OTHER (9.1%):
2,144,704 Dreyfus Treasury Prime Cash Management
Fund Class-A Shares................... 2,144,704
1,800,001 Merrill Lynch Institutional
Treasury Fund......................... 1,800,001
----------
Total Other 3,944,705
----------
Total Investments (100.0%) $43,207,405
----------
----------
</TABLE>
See notes to financial statements. 39 CORE TRUST (DELAWARE)
<PAGE>
- --------------------------------------------------------------------------------
TREASURY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments, at value (Note 1)......................................................................... $43,207,405
Interest and other receivables......................................................................... 94,644
-----------
Total assets............................................................................................... 43,302,049
-----------
LIABILITIES:
Accrued fees and other expenses........................................................................ 5,226
-----------
Total liabilities.......................................................................................... 5,226
-----------
NET ASSETS................................................................................................. $43,296,823
-----------
-----------
</TABLE>
TREASURY PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE PERIOD FEBRUARY 21, 1996 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income.......................................................................................... $ 230,658
---------
Total income................................................................................................. 230,658
---------
EXPENSES:
Advisory................................................................................................. 2,246
Management............................................................................................... 4,491
Accounting............................................................................................... 5,241
Professional services.................................................................................... 13,500
Trustees................................................................................................. 369
Custody.................................................................................................. 1,177
Other.................................................................................................... 158
---------
Total expenses............................................................................................... 27,182
Fees waived and expenses reimbursed...................................................................... (20,426)
---------
Net expenses................................................................................................. 6,756
---------
NET INVESTMENT INCOME........................................................................................ 223,902
---------
REALIZED GAIN ON INVESTMENTS................................................................................. 422
---------
INCREASE IN NET ASSETS FROM OPERATIONS....................................................................... $ 224,324
---------
---------
</TABLE>
See notes to financial statements. 40 CORE TRUST (DELAWARE)
<PAGE>
- --------------------------------------------------------------------------------
TREASURY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD FEBRUARY 21, 1996 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
NET ASSETS--February 21, 1996(a)........................................................................... $ --
-----------
OPERATIONS:
Net investment income.................................................................................... 223,902
Net realized gain on investments......................................................................... 422
-----------
224,324
-----------
CAPITAL SHARE TRANSACTIONS:
Contributions............................................................................................ 48,218,336
Withdrawals.............................................................................................. (5,145,837)
-----------
43,072,499
-----------
NET ASSETS--MARCH 31, 1996................................................................................. $43,296,823
-----------
-----------
(a) See Note 1 of notes to financial statements for commencement of operations.
</TABLE>
TREASURY PORTFOLIO
SUPPLEMENTARY DATA
- --------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING DURING THE PERIOD.
<TABLE>
<CAPTION>
PERIOD ENDED
MARCH 31, 1996(C)
-------------------
<S> <C>
Ratios to average net assets
Expenses(a)....................................................................................... 0.15%(b)
Net investment income............................................................................. 4.99%(b)
Net assets at end of period (000's omitted)......................................................... $ 43,297
(a) During the period, the Adviser waived certain of its fees. Had this waiver not occurred, the
ratio of expenses to average net assets would have been: 0.60%(b)
(b) Annualized.
(c) See Note 1 of notes to financial statements for commencement of operations.
</TABLE>
See notes to financial statements. 41 CORE TRUST (DELAWARE)
<PAGE>
- --------------------------------------------------------------------------------
TREASURY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 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 ("GAAP") 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 are valued at amortized cost under the Investment
Company Act of 1940 (the "1940 Act"). 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 $48,000 per year, 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 year ended
March 31, 1996 expenses reimbursed and fees waived by the Manager were $15,935
and $4,491, respectively.
42 CORE TRUST (DELAWARE)
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT AUDITORS
MARCH 31, 1996
- --------------------------------------------------------------------------------
The Trustees and Investors of
Core Trust (Delaware):
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Core Trust (Delaware) - Treasury Portfolio as of
March 31, 1996, the related statements of operations, changes in net assets and
the supplementary data for the period February 21, 1996 (commencement of
operations) to March 31, 1996. These financial statements and supplementary data
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements and supplementary data based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and supplementary data are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of March 31, 1996, by
correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, such financial statements and supplementary data present fairly,
in all material respects, the financial position of Core Trust (Delaware) -
Treasury Portfolio at March 31, 1996, the results of its operations, the changes
in its net assets and the supplementary data for the period February 21, 1996 to
March 31, 1996, in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
New York, New York
May 10, 1996
See notes to financial statements. 43 CORE TRUST (DELAWARE)
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Table of Contents
<CAPTION>
Page
<S> <C>
Economic Overview....................... 2
Market Review........................... 4
FINANCIAL STATEMENTS OF THE FORUM FUNDS
Schedules of Investments:
Investors Bond Fund................... 8
TaxSaver Bond Fund.................... 9
Maine Municipal Bond Fund............. 11
New Hampshire Bond Fund............... 17
Payson Balanced Fund.................. 20
Payson Value Fund..................... 22
Statements of Assets and Liabilities.... 23
Statements of Operations................ 24
Statements of Changes in Net Assets..... 25
Financial Highlights.................... 27
Notes to Financial Statements........... 31
Report of Independent Auditors.......... 37
FINANCIAL STATEMENTS OF CORE TRUST
(DELAWARE)
Schedule of Investments:
Treasury Portfolio.................... 39
Statement of Assets and Liabilities..... 40
Statement of Operations................. 40
Statement of Changes in Net Assets...... 41
Supplementary Data...................... 41
Notes to Financial Statements........... 42
Report of Independent Auditors.......... 43
</TABLE>
Manager and Distributor
Forum Financial Services, Inc.
Transfer Agent
Forum Financial Corp.
[LOGO]
FORUM FUNDS
P.O. BOX 446, PORTLAND, ME 04112
TEL (207) 879-0001 FAX (207) 879-6050
ANNUAL
REPORT
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March 31, 1996
[LOGO]
This report has been printed on
recycled paper.
