<PAGE>
[GRAPHIC]
[LOGO]
FORUM
FUNDS
SEMI-ANNUAL REPORT
SEPTEMBER 30, 1997
Investors Bond Fund
TaxSaver Bond Fund
Maine Municipal
Bond Fund
New Hampshire
Bond Fund
Payson Balanced Fund
Payson Value Fund
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
Page
A Message to Our Shareholders.... 1
FINANCIAL STATEMENTS OF THE FORUM
FUNDS
Schedules of Investments:
Investors Bond Fund............ 4
TaxSaver Bond Fund............. 5
Maine Municipal Bond Fund...... 7
New Hampshire Bond Fund........ 12
Payson Balanced Fund........... 15
Payson Value Fund.............. 17
Notes to Schedule of
Investments.................... 19
Statements of Assets and
Liabilities.................... 20
Statements of Operations......... 21
Statements of Changes in Net
Assets......................... 22
Financial Highlights............. 24
Notes to Financial Statements.... 27
</TABLE>
i
<PAGE>
FORUM FUNDS-REGISTERED TRADEMARK-
<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
PAYSON BALANCED FUND 207-879-0001
PAYSON VALUE FUND
</TABLE>
[LOGO]
SEMI-ANNUAL REPORT
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Dear Investor,
Forum Funds is pleased to present this semi-annual report for the period
ended September 30, 1997. We take this opportunity to provide our investors with
financial highlights of the period and to share our perspective on the economy.
Since our annual report in March, assets in the balanced and equity funds
have increased from slightly over $31 million net to over $40 million. The total
net assets for the six Forum Funds in this semi-annual report now stand at over
$125 million.
During our reporting period both the stock and bond markets have continued
to perform extraordinarily well. The S&P 500 total return, which surpassed 25%,
is above the norm from a historical perspective. Market valuations have led us
to assume a cautious attitude in previous reports to you. During the period
covered by this semi-annual report, however, we have been gratified by the
market's reaction to the positive tone of the economy.
Investors have benefited from solid performance by all the Forum Funds. It
is worth noting that the Payson Balanced Fund performed exceptionally well
versus its benchmark during the period, providing investors a total return of
21.43%, excluding the impact of sales charges. In contrast, its benchmark, the
Morningstar Balanced Fund Average, had a total return of 17.55% during the same
period.
It should be understood that all the returns in this semi-annual report
reflect the relatively short period of six months. The Forum Funds, however,
take a long term view of investing. Given the volatile nature of the stock and
bond markets, we once again urge you to remain focused on your longer term
investment objectives rather than short term market shifts. We will continue to
use our best judgment to seek those opportunities that will reward shareholders
over time.
Thank you for continuing to use our Forum Fund family to meet your
investment needs. As always, we shall strive to earn your confidence by
providing superior investment services. If you have any questions, you may bring
them to the attention of your local investment professional or call us at
207-879-0001.
Sincerely,
[SIGNATURE]
John Y. Keffer
President
<PAGE>
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ECONOMIC OVERVIEW
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ECONOMIC AND FINANCIAL DEVELOPMENTS
According to the so-called "new era" economists, the new era is one in which
faster sustainable growth will be prolonged without whipping up inflation.
Federal Reserve Board Chairman Alan Greenspan isn't entirely convinced that the
new era economists are right, although recently he said something that might be
taken as support for that position: "The last 15 years have been a period of
consolidating the gains of the early 1980s and extending them to their logical
end--the achievement of price stability. We are not quite there, yet, but we
trust it is on the horizon."
Economic growth during the first calendar quarter of 1997 slightly exceeded
4% and is likely to be about 3% for the third quarter. A slowing has occurred,
but it has not dropped to the 2.5% figure the Federal Reserve believes is right
to keep inflation at bay. Inflation has in fact been quite low--2.2% through the
month of September--in spite of a tight labor market and high capacity
utilization.
The reason for this seemingly paradoxical situation is probably greater
gains in productivity--major technological advances have allowed companies to
boost productivity and profits without raising prices. Again quoting chairman
Greenspan: "...if data on profits and prices are even approximately
accurate....it is difficult to avoid the conclusion that output per hour has to
be rising at a pace significantly in excess of the...1% estimated annual rise."
Greater productivity can result in substantial increases in corporate profits,
which in turn directly affects the valuation of stocks and the interest rates
companies pay.
Our aim has been to consider all the factors that drive the
economy--productivity, corporate earnings, and interest rates--over the long
term, without being caught up in quick, unreflective reactions to every gyration
of the market. We believe that this more studied approach will help us meet our
investors' long term objectives.
FORUM FUND PERFORMANCE
In a market that rocketed to record highs only to fall back again, Forum
Funds achieved competitive total returns. As already noted, the Payson Balanced
Fund significantly exceeded its benchmark index. The Payson Value Fund had a
total return in excess of 25%, also bettering its benchmark. Our Fixed Income
Funds found the going more challenging: Although they each provided total
returns near or exceeding 5%, they did not surpass their respective benchmarks.
2 FORUM FUNDS-Registered Trademark-
<PAGE>
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ECONOMIC OVERVIEW (CONTINUED)
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SUMMARY PERFORMANCE INDICATORS
SIX MONTH TOTAL RETURN-PERIOD ENDING SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
FORUM VS.
FORUM INDEX INDEX
----------- -------------- ------------
<S> <C> <C> <C>
Investors Bond Fund............................................................... 5.39% 6.68%1 -1.29%
TaxSaver Bond Fund................................................................ 4.94% 5.74%2 -0.80%
Maine Municipal Bond Fund......................................................... 4.67% 5.74%2 -1.07%
New Hampshire Bond Fund........................................................... 5.38% 5.74%2 -0.36%
Payson Balanced Fund.............................................................. 21.43% 17.55%3 3.88%
Payson Value Fund................................................................. 25.49% 24.68%4 0.81%
1 MORNINGSTAR Corporate-General Average:
456 Funds Rated
2 MORNINGSTAR Municipal-National Average:
524 Funds Rated
3 MORNINGSTAR Balanced Average:
367 Funds Rated
4 MORNINGSTAR Growth & Income Average:
598 Funds Rated
</TABLE>
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. FORUM AND MORNINGSTAR 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.
3 FORUM FUNDS-Registered Trademark-
<PAGE>
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INVESTORS BOND FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 1997 (unaudited)
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<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS (13.2%)
FHLMC (3.0%)
$ 730,813 Series 90 135-A, 8.75%, 5/15/00......... $ 752,642
64,245 Series 93 1581-A, 4.50%, 9/15/98........ 64,041
-----------
Total FHLMC 816,683
-----------
FNMA (5.5%)
77,385 Series 91 G 36, Class E, 7.00%,
11/25/98.............................. 77,272
1,397,366 Series 92 214-F, 6.45% 10/25/22(a)...... 1,406,142
-----------
Total FNMA 1,483,414
-----------
OTHER (4.7%)
245,732 Merrill Lynch Mortgage Investors, Inc.,
Series 89 E, 9.40%, 9/15/09........... 263,128
1,025,210 RTC, Series 92 C8 D, 8.84%,
12/25/23(b)........................... 1,014,958
-----------
Total Other 1,278,086
-----------
Total Collateralized Mortgage Obligations
(cost $3,482,242) 3,578,183
-----------
CORPORATE BONDS & NOTES (40.0%)
1,000,000 Boise Cascade Corp., 9.875%, 2/15/01.... 1,045,813
500,000 Chase Manhattan Bank, N.A., 9.75%,
11/1/01............................... 560,492
3,500,000 Citfed Bancorp, Inc., 8.25%, 9/1/03..... 3,556,571
750,000 Continental Bank, N.A. (a BankAmerica
subsidiary), 11.25%, 7/1/01........... 779,160
450,000 Lehman Brothers Holdings, Inc., 6.08%,
1/12/99(a)............................ 449,501
1,000,000 Leucadia Capital Trust I, 8.65%,
1/15/27............................... 1,043,726
750,000 Merchants National Corp. (a National
City Corp. subsidiary), 9.875%,
10/1/99............................... 798,131
1,000,000 Nacolah Holding Corp., (a Sammons
Enterprises, Inc. subsidiary), 9.50%,
12/1/03............................... 1,070,979
500,000 Paine Webber, Inc., 9.25%, 12/15/01..... 545,725
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
CORPORATE BONDS & NOTES, CONTINUED
$ 1,000,000 Salomon Inc., 7.75%, 9/22/05............ $ 1,016,965
-----------
Total Corporate Bonds & Notes
(cost $10,472,075) 10,867,063
-----------
GOVERNMENT MORTGAGE BACKED SECURITIES (7.8%)
FHLMC (0.7%)
179,091 Pool 502128, 9.00%, 10/1/04............. 187,027
-----------
GNMA (7.1%)
497,692 Pool 337775, 7.00%, 7/15/26............. 498,434
493,659 Pool 442136, 7.00%, 11/15/26............ 494,395
928,948 Pool 450876, 7.00%, 6/15/27............. 930,342
-----------
Total GNMA 1,923,171
-----------
Total Government Mortgage Backed Securities
(cost $2,067,359) 2,110,198
-----------
MUNICIPAL BONDS (5.0%)
1,350,000 Coffee County, GA, Hospital Authority,
9.00%, 12/1/12
(cost $1,370,250)..................... 1,370,250
-----------
<CAPTION>
<C> <S> <C>
SHARES
-----------
PREFERRED STOCK (6.8%)
3,000,000 Irwin Financial Corp. Capital Trust I... 795,000
4,000,000 Simmons First National Corp............. 1,057,500
-----------
Total Preferred Stock
(cost $1,750,000) 1,852,500
-----------
<CAPTION>
<C> <S> <C>
FACE AMOUNT
-----------
U.S. TREASURY BONDS (25.0%)
$ 7,000,000 6.25%, 8/15/23
(cost $6,808,281)..................... 6,800,941
-----------
<CAPTION>
<C> <S> <C>
SHARES
-----------
SHORT-TERM HOLDINGS (2.2%)
601,384 Boston 1784 Institutional US Treasury
Money Market Fund
(cost $601,384)....................... 601,384
-----------
Total Investments (100.0%)
(cost $26,551,591) $27,180,519
-----------
-----------
</TABLE>
See Notes to Schedule of Investments. 4 FORUM FUNDS-Registered Trademark-
<PAGE>
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TAXSAVER BOND FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 1997 (unaudited)
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<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
MUNICIPAL BONDS (96.4%)
COLORADO (6.6%)
$ 1,000,000 Douglas County, CO, SD #RE 1, GO Bonds,
Series A, 8.00%, 12/15/09............. $ 1,300,540
-----------
GUAM (2.8%)
500,000 Guam Government LO Highway RV, Series A,
FSA insured, 6.25%, 5/1/07............ 545,330
-----------
ILLINOIS (4.6%)
400,000 Aurora, IL, MFHR Bonds, Fox Valley
Village Unit 18D Project, Banque
Paribas LOC, 7.75%, 9/1/98............ 409,088
465,000 Illinois Development Finance Authority
RV, Community Rehabilitation Providers
Facilities Acquisition Program, Series
92, 8.25%, 8/1/12..................... 494,393
-----------
903,481
-----------
LOUISIANA (7.1%)
1,000,000 Louisana Public Facilities Authority RV,
Extended Care Facilities Authority -
Comm-Care Corp., 11.00%, 2/1/14....... 1,397,690
-----------
NEW JERSEY (2.7%)
500,000 New Jersey State EFA RV, Union County
College, Series B, 7.25%, 7/1/09...... 536,840
-----------
NEW YORK (1.9%)
350,000 New York State Thruway Authority,
Service Contract RV, Local Highway and
Bridge Project, 5.75%, 4/1/06......... 371,487
-----------
NORTH CAROLINA (1.3%)
255,000 North Carolina Municipal Power Agency
#1, Catawba Electric RV, 5.00%,
1/1/20................................ 248,893
-----------
OHIO (31.4%)
700,000 Lakota, OH, UTGO Bonds, SD, AMBAC
insured, 6.25%,
12/1/14............................... 764,414
750,000 Montgomery County, OH, LTGO Bonds,
5.30%, 12/1/10........................ 774,863
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
OHIO, CONTINUED
$ 1,000,000 North Olmstead, OH, LTGO
Bonds, AMBAC insured,
6.20%, 12/1/11........................ $ 1,134,910
500,000 Ohio State Air Quality Development
Authority, PCR Bonds, Cleveland
Electric Co. Project, FGIC insured,
8.00%, 12/1/13........................ 580,505
1,000,000 Ohio State Special Obligation RV,
Elementary & Secondary Educational Cap
Facilities, Series A, 5.625%,
12/1/06............................... 1,078,240
740,000 Shelby County, OH, Hospital Facilities
RV, Wilson Memorial Hospital, ETM USG,
6.40%, 12/1/03........................ 782,735
500,000 University Cincinnati, OH, General
Receipts, Educational Facilities RV,
Series G, 7.00%, 6/1/11............... 550,835
500,000 Washington County, OH, Hospital
Refunding RV, Shelby General Hospital,
6.875%, 7/1/03........................ 536,740
-----------
6,203,242
-----------
PENNSYLVANIA (23.1%)
1,000,000 Allegheny County, Hospital Development
Authority, Health Center RV, West Penn
Hospital Foundation, Series 90, 8.00%,
1/1/05................................ 1,068,310
775,000 Allegheny County, Hospital Development
Authority, Health Facilities RV,
Allegheny Valley School Project,
7.25%, 2/1/03......................... 811,510
500,000 Bucks County, PA, IDA RV, Personal Care,
ETM USG, Series A, 10.00%, 5/15/19.... 798,920
515,000 Erie-Western Pennsylvania Port
Authority, Pennsylvania Refunding RV,
8.25%, 6/15/00........................ 567,777
1,000,000 Hampden, PA, IDA RV, Ralston Purina Co.
Project, 8.125%, 1/1/07............... 1,069,870
110,000 Pennsylvania HEFA RV, Medical College of
Pennsylvania, Series 91 B, 7.25%,
3/1/05, P/R USG 3/1/01 @ 102.......... 122,516
</TABLE>
See Notes to Schedule of Investments. 5 FORUM FUNDS-Registered Trademark-
<PAGE>
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TAXSAVER BOND FUND
SCHEDULE OF INVESTMENTS (continued)
SEPTEMBER 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
PENNSYLVANIA, CONTINUED:
$ 125,000 Washington County, PA, IDA Refunding RV,
Presbyterian Medical Center, FHA
insured, 6.50%, 1/15/02............... $ 135,714
-----------
4,574,617
-----------
PUERTO RICO (4.1%)
150,000 Commonwealth of Puerto Rico, GO Bonds,
MBIA insured, 6.50%, 7/1/04........... 168,870
575,000 University of Puerto Rico RV, Series N,
MBIA insured, 6.25%, 6/1/04........... 638,319
-----------
807,189
-----------
TEXAS (4.1%)
750,000 Red River Authority, TX, PCR, Remarketed
8/1/90, Hoechst Celanese Corp., 7.50%,
8/1/12................................ 825,825
-----------
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
VIRGIN ISLANDS (4.1%)
$ 750,000 Virgin Islands PFA RV, Government
Development Program, Series A, 7.00%,
10/1/04............................... $ 820,342
-----------
VIRGINIA (2.6%)
500,000 Fairfax County, VA, EDA RV--
C-SPAN Project, Series B,
7.50%, 6/1/01......................... 519,940
-----------
Total Municipal Bonds
(cost $18,149,817) 19,055,416
-----------
<CAPTION>
<C> <S> <C>
SHARES
-----------
SHORT TERM-HOLDINGS (3.6%)
706,360 Boston 1784 Tax Free Money Market Fund
(cost $706,360)....................... 706,360
-----------
Total Investments (100.0%)
(cost $18,856,177) $19,761,776
-----------
-----------
</TABLE>
See Notes to Schedule of Investments. 6 FORUM FUNDS-Registered Trademark-
<PAGE>
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MAINE MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
MUNICIPAL BONDS (98.1%)
GENERAL OBLIGATION--BOND BANK (8.2%)
$ 50,000 Maine Muni Bond Bank, Series 88 A,
6.70%, 11/1/98........................ $ 51,475
50,000 Maine Muni Bond Bank, Series 88 A,
7.50%, 11/1/05, P/R USG 11/1/98 @
102................................... 52,879
40,000 Maine Muni Bond Bank, Series 88 B,
7.65%, 11/1/06, P/R USG 11/1/98 @
102.25................................ 42,462
50,000 Maine Muni Bond Bank, Series 88 B,
7.85%, 11/1/18, P/R USG 11/1/98 @
103................................... 53,543
60,000 Maine Muni Bond Bank, Series 88 C,
7.10%, 11/1/02, P/R USG 11/1/98 @
101.25................................ 62,770
300,000 Maine Muni Bond Bank, Series 89 B,
7.30%, 11/1/00........................ 324,726
50,000 Maine Muni Bond Bank, Series 89 B,
7.40%, 11/1/14, P/R USG 11/1/99 @
102................................... 54,297
210,000 Maine Muni Bond Bank, Series 90 B,
7.20%, 11/1/07, P/R USG 11/1/00 @
102................................... 232,289
50,000 Maine Muni Bond Bank, Series 90 B,
7.20%, 11/1/11, P/R USG 11/1/00 @
102................................... 55,307
150,000 Maine Muni Bond Bank, Series 90 B,
7.20%, 11/1/15, P/R USG 11/1/00 @
102................................... 165,921
25,000 Maine Muni Bond Bank, Series 90 D,
7.375%, 11/1/10, P/R USG 11/1/00 @
102................................... 27,779
10,000 Maine Muni Bond Bank, Series 91 C,
6.45%, 11/1/01........................ 10,829
25,000 Maine Muni Bond Bank, Series 91 D,
5.90%, 11/1/00........................ 26,284
100,000 Maine Muni Bond Bank, Series 92 B,
6.65%, 11/1/07........................ 111,606
85,000 Maine Muni Bond Bank, Series 92 B,
6.75%, 11/1/12........................ 93,814
100,000 Maine Muni Bond Bank, Series 92 C,
5.80%, 11/1/99........................ 103,605
205,000 Maine Muni Bond Bank, Series 92 C,
5.55%, 11/1/08........................ 215,076
150,000 Maine Muni Bond Bank, Series 92 E,
5.80%, 11/1/04........................ 161,306
200,000 Maine Muni Bond Bank, Series 92 E,
5.875%, 11/1/05....................... 215,084
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
GENERAL OBLIGATION--BOND BANK, CONTINUED
$ 80,000 Maine Muni Bond Bank, Sewer & Water
Bonds, SRF Program, Series 91 A,
7.20%, 11/1/13, P/R USG 11/1/01 @
102................................... $ 90,158
-----------
2,151,210
-----------
GENERAL OBLIGATION--POLITICAL SUBDIVISION (16.3%)
100,000 Bangor, ME, UTGO Bonds, 5.20%,
11/1/00............................... 103,272
60,000 Bangor, ME, UTGO Bonds, 5.25%,
11/15/09.............................. 63,898
175,000 Bar Harbor, ME, UTGO Bonds, 6.20%,
6/1/05................................ 192,673
75,000 Bar Harbor, ME, UTGO Bonds, 6.45%,
6/1/09................................ 85,664
30,000 Bath, ME, UTGO Bonds, 7.45%, 12/1/07.... 36,644
20,000 Bath, ME, UTGO Bonds, 7.50%, 12/1/08.... 24,782
50,000 Brewer, ME, UTGO Bonds, Series A, 6.10%,
1/1/03................................ 53,944
50,000 Brewer, ME, UTGO Bonds, Series A, 6.10%,
1/1/04................................ 54,343
50,000 Brewer, ME, UTGO Bonds, Series A, 6.10%,
1/1/05................................ 54,346
50,000 Brewer, ME, UTGO Bonds, Series A, 6.20%,
1/1/06................................ 54,454
250,000 Cumberland County, ME, UTGO Bonds,
5.25%, 2/1/07......................... 262,978
100,000 Cumberland County, ME, UTGO Bonds,
6.50%, 2/1/03, P/R USG 2/1/01 @ 102... 108,942
25,000 Ellsworth, ME, UTGO Bonds, 7.20%,
7/1/08................................ 29,792
250,000 Freeport, ME, UTGO Bonds, 7.25%,
9/1/04................................ 290,605
20,000 Freeport, ME, UTGO Bonds, 7.25%,
9/1/10................................ 24,567
40,000 Old Orchard Beach, ME, UTGO Bonds, MBIA
insured, 6.40%, 9/1/04................ 44,471
215,000 Old Orchard Beach, ME, UTGO Bonds, MBIA
insured, 6.60%, 9/1/06................ 240,508
50,000 Old Orchard Beach, ME, UTGO Bonds, MBIA
insured, 6.65%, 9/1/07................ 56,042
</TABLE>
See Notes to Schedule of Investments. 7 FORUM FUNDS-Registered Trademark-
<PAGE>
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MAINE MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS (continued)
SEPTEMBER 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
GENERAL OBLIGATION--POLITICAL SUBDIVISION, CONTINUED
$ 70,000 Old Orchard Beach, ME, UTGO Bonds, MBIA
insured, 6.65%, 9/1/08................ $ 78,458
35,000 Old Orchard Beach, ME, UTGO Bonds, MBIA
insured, 6.65%, 9/1/10................ 39,064
50,000 Portland, ME, GO Bonds, 12.10%,
7/1/99................................ 56,778
50,000 Portland, ME, GO Bonds, 10.50%,
11/1/99............................... 56,499
500,000 Portland, ME, GO Bonds, 6.20%, 4/1/05... 557,660
50,000 Portland, ME, GO Bonds, 12.60%,
11/1/05............................... 76,929
790,000 Portland, ME, GO Bonds, 5.30%,
6/13/13............................... 806,116
150,000 South Portland, ME, GO Bonds, 5.80%,
9/1/08................................ 165,446
40,000 South Portland, ME, GO Bonds, 5.80%,
9/1/11................................ 43,940
25,000 Westbrook, ME, UTGO Bonds, 6.75%,
11/15/04.............................. 28,526
75,000 Windham, ME, UTGO Bonds, 0.05%,
6/15/08............................... 45,112
130,000 Winslow, ME, GO Bonds, Crowe Rope
Industries Project, Series A, MBIA
insured, 5.50%, 3/1/07................ 135,574
20,000 Winslow, ME, UTGO Bonds, AMBAC insured,
6.90%, 10/1/08........................ 22,122
25,000 Winthrop, ME, UTGO Bonds, 5.10%,
8/1/04................................ 25,888
25,000 Winthrop, ME, UTGO Bonds, 5.20%,
8/1/05................................ 26,043
25,000 Winthrop, ME, UTGO Bonds, 5.30%,
8/1/06................................ 26,239
25,000 Winthrop, ME, UTGO Bonds, 5.40%,
8/1/07................................ 26,384
250,000 Yarmouth, ME, UTGO Bonds, AMBAC insured,
5.25%, 11/15/09....................... 260,938
-----------
4,259,641
-----------
GENERAL OBLIGATION--SCHOOL DISTRICTS (1.3%)
250,000 Cape Elizabeth, ME, UTGO Bonds, 5.75%,
10/15/09.............................. 266,305
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
GENERAL OBLIGATION--SCHOOL DISTRICTS, CONTINUED
$ 50,000 Winslow, ME, SD, UTGO Bonds, AMBAC
insured, 7.00%, 10/1/10............... $ 55,486
-----------
321,791
-----------
GENERAL OBLIGATION--STATES, TERRITORIES (9.5%)
500,000 Guam Government LO Bonds, Series 89 A,
Fuji Bank LOC, 7.00%, 11/15/04........ 538,310
60,000 Maine, UTGO Bonds, 10.00%, 5/15/98...... 62,275
10,000 Maine, UTGO Bonds, 9.25%, 3/15/99....... 10,743
100,000 Maine, UTGO Bonds, 6.75%, 5/15/99....... 104,407
100,000 Maine, UTGO Bonds, 8.50%, 3/1/00........ 110,007
100,000 Maine, UTGO Bonds, 7.50%, 12/15/00...... 110,179
50,000 Maine, UTGO Bonds, 8.00%, 5/1/01........ 56,262
90,000 Maine, UTGO Bonds, 6.40%, 7/1/02........ 98,241
100,000 Maine, UTGO Bonds, 6.50%, 7/1/03........ 111,045
1,000,000 Puerto Rico, UTGO Bonds, MBIA insured,
6.50%, 7/1/04......................... 1,125,800
145,000 Puerto Rico, UTGO Bonds, Series 93, MBIA
insured, 5.50%, 7/1/08................ 156,345
-----------
2,483,614
-----------
AIRPORT REVENUE (2.6%)
100,000 Bangor, ME, LTGO Bonds, Bangor
International Airport Project, 5.75%,
10/1/01............................... 104,700
25,000 Bangor, ME, LTGO Bonds, Bangor
International Airport Project, 5.85%,
10/1/02............................... 26,434
150,000 Bangor, ME, LTGO Bonds, Bangor
International Airport Project, 6.00%,
10/1/03............................... 160,704
100,000 Bangor, ME, LTGO Bonds, Bangor
International Airport Project, 6.10%,
10/1/04............................... 107,646
250,000 Bangor, ME, LTGO Bonds, Bangor
International Airport Project, 6.35%,
10/1/07............................... 267,418
-----------
666,902
-----------
</TABLE>
See Notes to Schedule of Investments. 8 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
MAINE MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS (continued)
SEPTEMBER 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
EDUCATION FACILITIES REVENUE (7.4%)
$ 30,000 Maine Educational Loan Authority,
Educational Loan RV, Supplemental
Education Loan Program, Series 92 A-1,
6.80%, 12/1/07........................ $ 32,283
70,000 Maine Educational Loan Authority,
Educational Loan RV, Supplemental
Education Loan Program, Series 92 A-1,
7.00%, 12/1/16........................ 75,489
45,000 Maine Educational Loan Marketing Corp.,
Student Loan Refunding RV, 6.90%,
11/1/03............................... 47,188
25,000 Maine Educational Loan Marketing Corp.,
Student Loan Refunding RV, Series A,
6.35%, 5/1/05......................... 26,325
100,000 Maine HEHFA RV, Colby College Issue,
FGIC insured, 6.20%, 7/1/99........... 103,732
650,000 Puerto Rico Public Buildings Authority,
Guaranteed Public Education and Health
Facilities Refunding RV, Series 93 M,
FSA insured, 5.70%, 7/1/09............ 710,593
60,000 University of Maine System RV, 7.20%,
9/1/09, P/R USG 9/1/99 @ 102.......... 64,668
105,000 University of Maine System RV, 7.25%,
9/1/19, P/R USG 9/1/99 @ 102.......... 113,264
645,000 University of Puerto Rico RV, Series N,
MBIA insured, 6.25%, 6/1/04........... 716,027
35,000 York, ME, SD, UTGO Bonds, AMBAC insured,
6.40%, 3/1/03......................... 37,813
-----------
1,927,382
-----------
HEALTH CARE REVENUE (16.6%)
10,000 Maine HEHFA Refunding RV, Kennebec
Valley Medical Center, FGIC insured,
7.00%, 7/1/05......................... 10,857
185,000 Maine HEHFA Refunding RV, Maine Medical
Center, ETM USG, 6.00%, 10/1/13....... 197,142
140,000 Maine HEHFA RV, Cedar Nursing Home, FHA
insured, 7.90%, 8/1/32, P/R USG 2/1/00
@ 102................................. 153,020
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
HEALTH CARE REVENUE, CONTINUED
$ 50,000 Maine HEHFA RV, Central Maine Medical
Center, FGIC insured, 8.00%, 7/1/18,
P/R 7/1/98 @ 102...................... $ 52,529
250,000 Maine HEHFA RV, Coves Edge Nursing Home,
10.00%, 8/1/20, P/R 8/1/00 @ 103...... 295,213
100,000 Maine HEHFA RV, FSA insured, 6.10%,
7/1/01................................ 106,312
55,000 Maine HEHFA RV, Kennebec Valley Medical
Center, FGIC insured, 7.00%, 7/1/15... 59,640
150,000 Maine HEHFA RV, Portland Alliance for
Mentally Ill, Maine Coast Regional
Health Center and Thomas College, FSA
insured, 6.10%, 7/1/03................ 162,350
435,000 Maine HEHFA RV, Saint Mary's General
Hospital, 8.50%, 7/1/09, P/R USG
7/1/99 @ 102.......................... 469,095
100,000 Maine HEHFA RV, Series 92 B, FSA
insured, 5.875%, 7/1/06............... 106,769
500,000 Maine HEHFA RV, Series 93 A, FSA
insured, 5.60%, 7/1/07................ 529,250
450,000 Maine HEHFA RV, Series 93 B, FSA
insured, 5.55%, 7/1/08................ 471,717
155,000 Maine HEHFA RV, Series 93 D, FSA
insured, 5.20%, 7/1/06................ 161,062
500,000 Maine HEHFA RV, Series 93 D, FSA
insured, 5.30%, 7/1/07................ 520,925
25,000 Maine HEHFA RV, Southern Maine Medical
Center, AMBAC insured, 7.20%,
5/1/06................................ 27,173
15,000 Maine HEHFA RV, Southern Maine Medical
Center, AMBAC insured, 7.30%,
5/1/14................................ 16,321
950,000 Maine Veterans' Homes RV, 6.80%,
10/1/05............................... 1,008,454
-----------
4,347,829
-----------
HOUSING REVENUE (5.5%)
30,000 Maine HSG AUTH Refunding RV, Series 91
A, FSA insured, 7.40%, 11/15/22....... 31,741
5,000 Maine HSG AUTH RV, Mortgage Purchase,
Series 87 A-2, FHA/ VA Mortgage Pools,
8.10%, 11/15/08....................... 5,103
</TABLE>
See Notes to Schedule of Investments. 9 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
MAINE MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS (continued)
SEPTEMBER 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
HOUSING REVENUE, CONTINUED
$ 25,000 Maine HSG AUTH RV, Mortgage Purchase,
Series 87 B, FHA/VA/ Private Mortgage
Pools, 7.60%, 11/15/99................ $ 25,556
5,000 Maine HSG AUTH RV, Mortgage Purchase,
Series 88 B, FHA/VA/ Private Mortgage
Pools, 8.00%, 11/15/15................ 5,128
100,000 Maine HSG AUTH RV, Mortgage Purchase,
Series 88 C, 8.20%, 11/15/08.......... 103,575
40,000 Maine HSG AUTH RV, Mortgage Purchase,
Series 88 D-5, 7.45%, 11/15/11........ 42,145
200,000 Maine HSG AUTH RV, Mortgage Purchase,
Series 88 D-6, 7.25%, 11/15/19........ 210,444
20,000 Maine HSG AUTH RV, Mortgage Purchase,
Series 89 A-1, 7.625%, 11/15/24....... 20,773
30,000 Maine HSG AUTH RV, Mortgage Purchase,
Series 89 A-2, 7.30%, 11/15/16........ 31,330
110,000 Maine HSG AUTH RV, Mortgage Purchase,
Series 90 A-5, Remarketed 5/13/93,
6.20%, 11/15/16....................... 113,835
185,000 Maine HSG AUTH RV, Mortgage Purchase,
Series 92 C, 6.55%, 11/15/12.......... 193,146
300,000 Maine HSG AUTH RV, Mortgage Purchase,
Series 94 A-2, 5.20%, 11/15/08........ 301,570
250,000 Maine HSG AUTH RV, Mortgage Purchase,
Series 94 C-1, 6.20%, 11/15/07........ 260,320
50,000 Maine HSG AUTH RV, SFM Refunding RV,
Series 91-1, 6.90%, 11/1/07........... 52,601
45,000 Maine HSG AUTH RV, SFM Refunding RV,
Series 91-1, 7.15%, 11/1/21........... 47,504
-----------
1,444,771
-----------
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
INDUSTRIAL DEVELOPMENT REVENUE (3.2%)
$ 100,000 Puerto Rico Industrial, Medical &
Environmental RV, Abbott Laboratories,
Inc. Project, 6.50%, 7/1/09........... $ 100,768
670,000 Puerto Rico Industrial, Medical &
Environmental RV, Motorola, Inc.
Project, Series 83 A, 6.75%, 1/1/14
(b)................................... 739,231
-----------
839,999
-----------
POLLUTION CONTROL REVENUE (4.2%)
530,000 East Millinocket, ME, PCR, Great
Northern Nekoosa Corp. Project, ETM
USG, 6.70%, 6/1/04.................... 563,597
500,000 Maine Finance Authority RV, Boise
Cascade Corp. Project, 7.90%,
6/1/15................................ 541,360
-----------
1,104,957
-----------
RESOURCE RECOVERY REVENUE (3.9%)
45,000 Guam Government Water System RV, CGIC
insured, 6.85%, 7/1/99................ 47,128
500,000 Regional Waste Systems, Inc., ME, RV,
Series A-C, 7.30%, 7/1/98............. 512,500
415,000 Regional Waste Systems, Inc., ME, RV,
Series A-C, 7.95%, 7/1/10............. 444,830
25,000 Regional Waste Systems, Inc., ME, RV,
Series D-F, 7.60%, 7/1/00............. 26,490
-----------
1,030,948
-----------
REVENUE--HEALTH & EDUCATION (0.1%)
25,000 Maine HEHFA RV, Series A, 5.25%,
7/1/11................................ 25,500
-----------
REVENUE--INDUSTRIAL (0.1%)
25,000 Bucksport, ME, Solid Waste Disposal RV,
Champion International Corp. Project,
6.25%, 5/1/10, remarketed 5/1/93...... 26,265
-----------
REVENUE--TERRITORIAL (1.3%)
300,000 Guam Government LO Highway RV, Series 92
A, FSA insured, 6.25%, 5/1/07......... 327,195
-----------
TRANSPORTATION REVENUE (5.0%)
30,000 Maine State Turnpike Authority RV, MBIA
insured, 6.00%, 7/1/11................ 32,272
</TABLE>
See Notes to Schedule of Investments. 10 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
MAINE MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS (continued)
SEPTEMBER 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
TRANSPORTATION REVENUE, CONTINUED
$ 700,000 Maine State Turnpike Authority RV, MBIA
insured, 6.00%, 7/1/14................ $ 744,989
100,000 Maine, Highway Improvements, UTGO Bonds,
8.00%, 5/1/02......................... 115,246
410,000 Puerto Rico Highway & Transportation
Authority RV, Series X, 5.00%,
7/1/02................................ 420,685
-----------
1,313,192
-----------
UTILITIES REVENUE (1.1%)
15,000 Bath, ME, LTGO Bonds, Sewer
Improvements, 7.40%, 12/1/06.......... 18,102
165,000 Kennebec, ME, Water District RV, 7.00%,
12/1/14, P/R USG 12/1/01 @ 101.50..... 185,481
40,000 Kennebec, ME, Water District RV, 7.00%,
12/1/20, P/R USG 12/1/01 @ 101.50..... 44,965
25,000 Wells Sanitation District, ME, Sewer RV,
6.75%, 3/1/00......................... 26,437
-----------
274,985
-----------
OTHER REVENUE (11.8%)
10,000 Maine Court Facilities Authority Lease
Rental RV, 7.15%, 8/1/07, P/R USG
8/1/00 @ 102.......................... 11,013
1,000,000 Puerto Rico, Public Buildings Authority
Guaranteed RV, Series B, 5.00%,
7/1/14................................ 995,430
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
OTHER REVENUE, CONTINUED
$ 350,000 Virgin Islands PFA RV, Government
Development Program, Series A, 7.00%,
10/1/04............................... $ 382,827
550,000 Virgin Islands PFA RV, Matching Fund
Loan Notes, Series A, 6.90%,
10/1/01............................... 594,100
875,000 Virgin Islands PFA RV, Series 89 A,
7.30%, 10/1/18, P/R USG 10/1/00 @
101................................... 1,100,435
-----------
3,083,805
-----------
Total Municipal Bonds
(cost $24,637,720) 25,629,986
-----------
<CAPTION>
<C> <S> <C>
SHARES
-----------
SHORT-TERM HOLDINGS (1.9%)
471,478 Boston 1784 Tax Free Money Market
Fund.................................. 471,478
18,121 Fidelity Tax Exempt Money Market Fund... 18,121
-----------
Total Short-Term Holdings
(cost $489,599) 489,599
-----------
Total Investments (100.0%)
(cost $25,127,319) $26,119,585
-----------
-----------
</TABLE>
See Notes to Schedule of Investments. 11 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
NEW HAMPSHIRE BOND FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ---------- --------------------------------------------------------- -----------
<C> <S> <C>
MUNICIPAL BONDS (98.1%)
GENERAL OBLIGATION--BOND BANK (5.9%)
$ 50,000 New Hampshire Muni Bond Bank Refunding Bonds, Series 92
H, 6.35%, 7/15/06...................................... $ 53,852
175,000 New Hampshire Muni Bond Bank Refunding Bonds, Series 92
H, 6.50%, 7/15/08...................................... 189,588
25,000 New Hampshire Muni Bond Bank, Series 89 B, 6.70%,
7/15/04,
P/R USG 7/15/99 @ 102.................................. 26,639
25,000 New Hampshire Muni Bond Bank, Series 90 A, 6.90%,
1/15/05................................................ 26,984
20,000 New Hampshire Muni Bond Bank, Ser 90 D, 6.90%, 7/15/03... 21,755
25,000 New Hampshire Muni Bond Bank, Series 91 E, 6.90%,
8/15/06................................................ 27,810
85,000 New Hampshire Muni Bond Bank, Series 94 C, State
Guaranteed, 5.80%, 8/15/08............................. 91,586
150,000 New Hampshire Muni Bond Bank, Series 94 E, State
Guaranteed 5.25%, 8/15/01.............................. 155,735
25,000 New Hampshire Muni Bond Bank, Series K, 6.75%, 1/15/08,
P/R USG 1/15/01 @ 102.................................. 27,392
-----------
621,341
-----------
GENERAL OBLIGATION--POLITICAL SUBDIVISION (16.0%)
155,000 Bedford, NH, UTGO Bonds, 6.70%, 8/1/12................... 167,493
25,000 Concord, NH, GO Bonds, Series 88, 7.00%, 5/15/04, P/R USG
5/15/98 @ 102.......................................... 25,990
100,000 Concord, NH, GO Bonds, MBIA insured, 5.00%, 1/15/09...... 101,211
50,000 Exeter, NH, UTGO Bonds, Series 93, 5.10%, 6/15/05........ 52,231
25,000 Exeter, NH, UTGO Bonds, 5.30%, 6/15/08................... 26,487
50,000 Franklin, NH, GO Bonds, MBIA insured, 5.20%, 10/1/07..... 52,365
45,000 Keene, NH, UTGO Bonds, 5.15%, 10/15/11................... 46,095
250,000 Manchester, NH, Public Improvement Bonds, 5.50%,
11/1/12................................................ 259,398
250,000 Manchester, NH, UTGO Bonds, Series 93 A, 5.30%, 7/1/07... 262,450
15,000 Nashua, NH, UTGO Bonds, 6.80%, 7/1/09.................... 16,616
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ---------- --------------------------------------------------------- -----------
<C> <S> <C>
GENERAL OBLIGATION--POLITICAL SUBDIVISION, CONTINUED
$ 100,000 Nashua, NH, UTGO Bonds, AMBAC insured, 5.35%, 7/15/06.... $ 105,440
35,000 Nashua, NH, UTGO Bonds, FGIC insured, 5.25%, 11/2/09..... 36,067
10,000 Nashua, NH, UTGO Bonds, Public Improvement Bonds, 6.70%,
11/1/07................................................ 10,744
100,000 Nashua, NH, UTGO Bonds, Public Improvement Bonds, 6.80%,
7/1/07................................................. 110,772
350,000 New Hampshire State Capital Improvement GO Bonds, 5.50%,
12/1/06................................................ 376,264
10,000 New Hampshire State, GO Bonds, 6.00%, 9/1/05............. 10,963
30,000 Salem, NH, UTGO Bonds, MBIA insured, 6.45%, 3/1/04....... 32,508
-----------
1,693,094
-----------
GENERAL OBLIGATION--SCHOOL DISTRICTS (5.8%)
100,000 Concord, NH, SD, GO Bonds, 4.70%, 10/15/07............... 101,859
100,000 Concord, NH, SD, GO Bonds, 5.00%, 10/15/10............... 101,577
90,000 Farmington, NH, SD, GO Bonds, AMBAC insured, 5.55%,
2/15/02................................................ 94,768
100,000 Goffstown, NH, SD, GO Bonds, AMBAC insured, 5.25%,
8/15/11................................................ 101,540
25,000 Hudson, NH, GO Bonds, School Lot B, 7.30%, 12/15/06...... 29,995
20,000 Hudson, NH, GO Bonds, School Lot B, 7.30%, 12/15/08...... 24,449
50,000 Oyster River, NH, Cooperative SD State Guaranteed, GO
Bonds, Lot A, 5.75%, 6/15/07........................... 54,050
100,000 Oyster River, NH, Cooperative SD State Guaranteed, GO
Bonds, Lot A, 5.85%, 6/15/08........................... 108,357
-----------
616,595
-----------
GENERAL OBLIGATION--STATES, TERRITORIES (3.9%)
380,000 Puerto Rico, UTGO Bonds, Series 93, MBIA insured, 5.50%,
7/1/08................................................. 409,731
-----------
</TABLE>
See Notes to Schedule of Investments. 12 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
NEW HAMPSHIRE BOND FUND
SCHEDULE OF INVESTMENTS (continued)
SEPTEMBER 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ---------- --------------------------------------------------------- -----------
<C> <S> <C>
EDUCATION FACILITIES REVENUE (19.6%)
$ 15,000 Mascenic, NH, Regional SD #1, Lot C, AMBAC insured,
7.20%, 12/15/07........................................ $ 18,213
255,000 New Hampshire HEHFA (Franklin Pierce College) RV, Series
94, 5.50%, 10/1/04..................................... 255,439
250,000 New Hampshire HEHFA (Franklin Pierce College) RV, Series
94, 6.00%, 10/1/13..................................... 241,288
1,000,000 New Hampshire HEHFA, (Kendal at Hanover Issue) RV, 5.80%,
10/1/12................................................ 1,014,120
125,000 New Hampshire HEHFA (Rivier College) RV, 6.90%, 1/1/13... 132,275
30,000 New Hampshire HEHFA (University System of NH) RV, MBIA
insured, Series 92, 6.00%, 7/1/07...................... 32,123
345,000 University of Puerto Rico RV, Series N, MBIA insured,
6.25%, 6/1/04.......................................... 382,991
-----------
2,076,449
-----------
HEALTH CARE REVENUE (10.1%)
20,000 New Hampshire HEHFA (Elliot Hospital of Manchester) RV,
6.50%, 10/1/11......................................... 21,694
100,000 New Hampshire HEHFA (Exeter Hospital) RV, 5.25%,
10/1/00................................................ 102,042
45,000 New Hampshire HEHFA (Lakes Region Hospital Association)
RV, 5.75%, 1/1/11...................................... 46,945
15,000 New Hampshire HEHFA (Mary Hitchcock Memorial Hospital)
RV, FGIC insured, 4.90%, 8/15/01....................... 15,317
50,000 New Hampshire HEHFA (Nashua Memorial Hospital) RV, 5.50%,
10/1/02................................................ 51,395
150,000 New Hampshire HEHFA (Wentworth-Douglass Hospital) RV,
5.40%, 1/1/07.......................................... 156,686
625,000 Puerto Rico, Public Buildings Authority, Guaranteed
Public Education and Health Facilities Refunding RV,
Series 93 M, FSA insured, 5.70%, 7/1/09................ 683,261
-----------
1,077,340
-----------
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ---------- --------------------------------------------------------- -----------
<C> <S> <C>
HOUSING REVENUE (5.7%)
$ 15,000 New Hampshire State HFA, SFM RV, 6.75%, 7/1/04........... $ 15,631
100,000 New Hampshire State HFA, SFM RV, Series 92 A, 5.25%,
1/1/07................................................. 100,944
100,000 New Hampshire State HFA, SFM RV, Series 96 B, 5.90%,
1/1/07................................................. 102,474
100,000 New Hampshire State HFA, SFM RV, Series 96 B, 6.00%,
1/1/08................................................. 101,636
100,000 New Hampshire State HFA, SFM RV, Series 96 B, 6.00%,
7/1/08................................................. 101,693
180,000 Virgin Islands HFA, SFM RV, GNMA Mortgage-Backed, 6.00%,
3/1/07................................................. 183,818
-----------
606,196
-----------
INDUSTRIAL DEVELOPMENT REVENUE (1.4%)
130,000 Puerto Rico, Industrial, Medical & Environmental RV,
Motorola, Inc. Project, Series 83 A, 6.75%,
1/1/14(b).............................................. 143,433
-----------
RESOURCE RECOVERY REVENUE (0.3%)
30,000 Guam Government Water System RV, CGIC insured, 6.85%,
7/1/99................................................. 31,418
-----------
REVENUE--TERRITORIAL (2.1%)
200,000 Guam Government LO Highway RV, Series 92 A, FSA insured,
6.25%, 5/1/07.......................................... 218,132
-----------
SALES TAX REVENUE (3.4%)
335,000 Puerto Rico Infrastructure Financing Authority, Special
Tax RV, Series 88 A, 7.60%, 7/1/00..................... 350,285
-----------
TRANSPORTATION REVENUE (9.2%)
25,000 Guam Government LO Highway RV, Series 92 A, FSA insured,
5.60%, 5/1/00.......................................... 25,898
125,000 New Hampshire State Turnpike System RV, Series 91 A, FGIC
insured, 6.75%, 11/1/11................................ 143,399
550,000 New Hampshire State Turnpike System Refunding RV, Series
91 A, FGIC insured, 7.00%, 11/1/06..................... 648,890
65,000 Puerto Rico Highway & Transportation Authority RV, Series
92 U, 5.875%, 7/1/99................................... 67,044
</TABLE>
See Notes to Schedule of Investments. 13 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
NEW HAMPSHIRE BOND FUND
SCHEDULE OF INVESTMENTS (continued)
SEPTEMBER 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ---------- --------------------------------------------------------- -----------
<C> <S> <C>
TRANSPORTATION REVENUE, CONTINUED
$ 90,000 Puerto Rico Highway & Transportation Authority RV, Series
93 X, 5.00%, 7/1/02.................................... $ 92,345
-----------
977,576
-----------
UTILITIES REVENUE (1.4%)
140,000 Exeter, NH, UTGO Bonds, Sewer Improvements, 6.25%,
1/15/07................................................ 150,455
-----------
OTHER REVENUE (13.3%)
225,000 Belknap County, NH, GO Bonds, MBIA insured, 5.20%,
6/15/13................................................ 226,593
100,000 Puerto Rico Infrastructure Financing Authority, Special
Tax RV, Series 88 A, 7.75%, 7/1/08..................... 104,924
240,000 Virgin Islands PFA RV, Government Development Program,
Series A, 7.00%, 10/1/04............................... 262,510
450,000 Virgin Islands PFA RV, Series A, 6.90%, 10/1/01.......... 486,081
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ---------- --------------------------------------------------------- -----------
<C> <S> <C>
OTHER REVENUE, CONTINUED
$ 235,000 Virgin Islands PFA RV, Series 89 A, 7.30%, 10/1/18,
P/R USG 10/1/00 @ 101.................................. $ 295,546
30,000 Virgin Islands PFA RV, Series 89 B, 7.25%, 10/1/07,
P/R USG 10/1/00 @ 101.................................. 32,915
-----------
1,408,569
-----------
Total Municipal Bonds (cost $10,102,898) 10,380,614
-----------
<CAPTION>
<C> <S> <C>
SHARES
- ----------
SHORT-TERM HOLDINGS (1.9%)
200,000 New Hampshire HEHFA Revenue Muni Demand Notes, FGIC
insured, 4.00%, 7/1/21(a)
(cost $200,000)...................................... 200,000
-----------
Total Investments (100.0%) (cost $10,302,898) $10,580,614
-----------
-----------
</TABLE>
See Notes to Schedule of Investments. 14 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
PAYSON BALANCED FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
COMMON STOCK (69.6%)
CHEMICALS & ALLIED PRODUCTS (5.0%)
6,100 Dow Chemical Co......................... $ 553,195
11,500 Schering-Plough Corp.................... 592,250
-----------
1,145,445
-----------
COMMUNICATIONS (4.3%)
13,500 AT&T Corp............................... 598,219
6,000 British Telecommunications, ADR......... 399,750
-----------
997,969
-----------
DEPOSITORY INSTITUTIONS (3.9%)
8,900 Banc One Corp........................... 496,731
8,000 First Union Corp........................ 400,500
-----------
897,231
-----------
ELECTRIC, GAS & SANITARY SERVICES (3.3%)
10,000 Boston Edison Co........................ 306,875
12,500 GPU Corp................................ 448,439
-----------
755,314
-----------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS,
EXCEPT COMPUTER EQUIPMENT (3.3%)
12,000 HMT Technology Corp.(c)................. 188,250
12,790 Harris Corp............................. 585,143
-----------
773,393
-----------
ENERGY (1.4%)
7,600 New Century Energies, Inc.(c)........... 315,875
-----------
FOOD & KINDRED PRODUCTS (1.3%)
7,200 Universal Foods Corp.................... 289,800
-----------
HEALTH SERVICES (4.0%)
26,500 Beverly Enterprises, Inc.(c)............ 460,438
16,000 Tenet Healthcare Corp.(c)............... 466,000
-----------
926,438
-----------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER
EQUIPMENT (8.9%)
5,455 Compaq Computer Corp.(c)................ 407,761
6,500 IBM Corp................................ 688,594
13,900 Timken Co............................... 556,869
10,000 Western Digital Corp.(c)................ 400,625
-----------
2,053,849
-----------
INSURANCE CARRIERS (6.1%)
12,200 American Financial Group, Inc........... 542,900
8,000 Conseco Inc............................. 390,500
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
INSURANCE CARRIERS, CONTINUED
7,066 Travelers Group, Inc.................... $ 482,255
-----------
1,415,655
-----------
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS;
PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS (2.5%)
8,500 Tektronix, Inc.......................... 573,219
-----------
METAL MINING (2.4%)
7,000 Phelps Dodge Corp....................... 543,375
-----------
MISCELLANEOUS MANUFACTURING INDUSTRIES (2.0%)
14,200 ITT Industries, Inc..................... 471,262
-----------
PETROLEUM REFINING & RELATED INDUSTRIES (5.6%)
5,950 Atlantic Richfield Co................... 508,353
4,460 Mobil Corp.............................. 330,040
9,000 Phillips Petroleum Co................... 464,625
-----------
1,303,018
-----------
RAILROAD TRANSPORTATION (2.0%)
7,800 CSX Corp................................ 456,300
-----------
STEEL (1.8%)
12,000 USX-US Steel Group, Inc................. 417,000
-----------
TOBACCO PRODUCTS (2.2%)
12,000 Philip Morris Cos. Inc.................. 498,750
-----------
TRANSPORTATION EQUIPMENT (7.5%)
15,000 Fleetwood Enterprises, Inc.............. 503,438
12,000 Ford Motor Co........................... 543,000
14,000 Trinity Industries, Inc................. 675,500
-----------
1,721,938
-----------
WHOLESALE TRADE-NONDURABLE GOODS (2.1%)
12,100 Supervalu, Inc.......................... 474,925
-----------
Total Common Stock
(cost $12,444,479) 16,030,756
-----------
<CAPTION>
FACE AMOUNT
----------
<C> <S> <C>
CORPORATE BONDS & NOTES (8.0%)
$ 50,000 Allstate Corp., 5.875%, 6/15/98......... 50,031
100,000 Avco Financial Services, 5.875%,
10/15/97.............................. 100,011
45,000 Avco Financial Services, 5.50%,
5/1/98................................ 44,935
150,000 Bear Stearns Cos., Inc., 6.625%,
1/15/04............................... 149,559
200,000 Chase Manhattan Corp., 6.25%, 1/15/06... 193,770
</TABLE>
See Notes to Schedule of Investments. 15 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
PAYSON BALANCED FUND
SCHEDULE OF INVESTMENTS (continued)
SEPTEMBER 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
CORPORATE BONDS & NOTES, CONTINUED
$ 50,000 Ford Motor Credit Corp., 7.125%,
12/1/97............................... $ 50,123
100,000 GTE South, Inc., 6.25%, 11/15/97........ 100,085
100,000 Household Finance Corp., 7.625%,
6/15/99............................... 102,395
200,000 Household Finance Corp., 8.00%,
8/15/04............................... 206,633
20,000 IBM Credit Corp., 5.55%, 11/5/98........ 19,925
200,000 Lockheed Martin Corp., 6.85%, 5/15/01... 203,088
65,000 PepsiCo, Inc., 6.25%, 9/1/99............ 65,345
200,000 Sears Roebuck Acceptance Corp., 6.75%,
9/15/05............................... 200,858
100,000 Southwestern Bell Capital Corp., 6.05%,
2/9/98................................ 100,159
100,000 Wachovia Corp., 7.00%, 12/15/99......... 101,889
50,000 Wal-Mart Stores, Inc., 5.50%, 3/1/98.... 49,960
100,000 WMX Technologies, Inc., 8.25%,
11/15/99.............................. 104,238
-----------
Total Corporate Bonds & Notes
(cost $1,846,995) 1,843,004
-----------
GOVERNMENT AGENCY NOTES (7.0%)
FHLB (1.3%)
300,000 6.41%, 12/29/03......................... 297,192
-----------
FHLMC (2.7%)
400,000 6.89%, 10/3/05.......................... 406,394
200,000 6.65%, 2/9/06........................... 199,377
-----------
Total FHLMC 605,771
-----------
FNMA (3.0%)
100,000 9.55%, 11/10/97......................... 100,432
500,000 6.54%, 9/8/00........................... 502,276
100,000 6.38%, 4/29/03.......................... 99,128
-----------
Total FNMA 701,836
-----------
Total Government Agency Notes
(cost $1,574,712) 1,604,799
-----------
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS (3.4%)
FHLMC (1.7%)
$ 200,000 Series 1491 GB, 6.90%, 11/15/21......... $ 200,694
200,000 Series 1678 C, 6.00%, 8/15/08........... 196,592
-----------
Total FHLMC 397,286
-----------
FNMA (1.7%)
400,000 Series 1992-184 C, 7.00%, 10/25/21...... 383,060
-----------
Total Collateralized Mortgage Obligations
(cost $798,125) 780,346
-----------
MORTGAGE BACKED SECURITIES (0.7%)
GNMA (0.7%)
Pool 394795, 7.50%, 10/15/10 (cost
$171,789)............................. 172,270
-----------
U.S. TREASURY NOTES (8.5%)
500,000 6.38%, 1/15/99.......................... 504,063
125,000 9.13%, 5/15/99.......................... 131,367
275,000 6.75%, 6/30/99.......................... 279,380
400,000 6.13%, 7/31/00.......................... 402,625
350,000 6.25%, 8/31/02.......................... 353,390
275,000 7.25%, 5/15/04.......................... 292,275
-----------
Total U.S. Treasury Notes
(cost $1,939,803) 1,963,100
-----------
U.S. TREASURY BONDS (1.8%)
400,000 6.88%, 8/15/25 (cost $393,942).......... 420,625
-----------
<CAPTION>
SHARES
----------
<C> <S> <C>
SHORT-TERM HOLDINGS(1.0%)
233,406 Boston 1784 Institutional US Treasury
Money Market Fund (cost $233,406)..... 233,406
-----------
Total Investments (100.0%)
(cost $19,403,251) $23,048,306
-----------
-----------
</TABLE>
See Notes to Schedule of Investments. 16 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
PAYSON VALUE FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
COMMON STOCK (95.8%)
BUILDING CONSTRUCTION--GENERAL CONTRACTORS & OPERATIVE BUILDERS (3.1%)
10,000 Southdown, Inc.......................... $ 546,250
-----------
CHEMICALS & ALLIED PRODUCTS (10.9%)
5,000 Abbott Laboratories..................... 319,688
6,000 Bristol-Myers Squibb Co................. 496,500
3,000 Dow Chemical Co......................... 272,060
5,000 Eastman Chemical Co..................... 310,000
10,000 Schering-Plough Corp.................... 515,000
-----------
1,913,248
-----------
COMMUNICATIONS (7.8%)
8,000 AT&T Corp............................... 354,500
4,000 Ameritech Corp.......................... 266,000
8,000 GTE Corp................................ 363,000
17,000 US West Media Group(c).................. 379,314
-----------
1,362,814
-----------
DEPOSITORY INSTITUTIONS (7.4%)
5,000 BankBoston Corp......................... 442,189
5,250 First Virginia Banks, Inc............... 249,375
5,000 JSB Financial, Inc...................... 244,689
1,333 Wells Fargo & Co........................ 366,575
-----------
1,302,828
-----------
ELECTRIC POWER (1.0%)
5,000 CINergy Corp............................ 167,185
-----------
ELECTRIC, GAS & SANITARY SERVICES (2.2%)
6,000 Boston Edison Co........................ 184,125
5,000 New Century Energies, Inc.(c)........... 207,813
-----------
391,938
-----------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER
EQUIPMENT (6.8%)
9,000 Harris Corp............................. 411,750
7,000 Teleflex Inc............................ 242,375
4,000 Texas Instruments, Inc.................. 540,500
-----------
1,194,625
-----------
FOOD STORES (4.2%)
20,000 American Stores Co...................... 487,500
16,000 Ruddick Corp............................ 258,000
-----------
745,500
-----------
FOOD & KINDRED PRODUCTS (1.4%)
6,000 Universal Foods Corp.................... 241,500
-----------
HEALTH SERVICES (3.3%)
15,000 Beverly Enterprises, Inc.(c)............ 260,625
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
HEALTH SERVICES, CONTINUED
11,000 Tenet Healthcare Corp.(c)............... $ 320,375
-----------
581,000
-----------
HOLDING & OTHER INVESTMENT OFFICES (1.3%)
10,000 Security Capital Pacific Trust.......... 235,000
-----------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT (6.1%)
2,000 IBM Corp................................ 211,875
8,000 Timken Co............................... 320,500
6,200 Varian Associates, Inc.................. 385,175
4,000 Western Digital Corp.(c)................ 160,251
-----------
1,077,801
-----------
INSURANCE CARRIERS (4.9%)
10,000 American Bankers Insurance.............. 365,000
7,333 Travelers Group, Inc.................... 500,477
-----------
865,477
-----------
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS; PHOTOGRAPHIC, MEDICAL &
OPTICAL GOODS (0.8%)
2,000 Tektronix, Inc.......................... 134,875
-----------
MISCELLANEOUS MANUFACTURING INDUSTRIES (2.5%)
13,000 ITT Industries, Inc..................... 431,435
-----------
MISCELLANEOUS RETAIL (1.9%)
10,000 Toys "R" Us, Inc.(c).................... 355,000
-----------
OIL & GAS EXTRACTION (2.0%)
4,000 Atlantic Richfield Co................... 341,750
-----------
PAPER & ALLIED PRODUCTS (2.6%)
4,500 Boise Cascade Corp...................... 189,282
7,000 Willamette Industries................... 267,750
-----------
457,032
-----------
PETROLEUM REFINING & RELATED INDUSTRIES (6.4%)
5,000 Mobil Corp.............................. 370,000
8,000 Phillips Petroleum Co................... 413,000
8,000 Repsol, S.A. ADR........................ 347,000
-----------
1,130,000
-----------
PRIMARY METAL INDUSTRIES (1.6%)
8,000 USX-US Steel Group, Inc................. 278,000
-----------
PRINTING & PUBLISHING (1.0%)
6,000 Banta Corp.............................. 168,600
-----------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES (1.8%)
6,000 Edwards (A.G.) Inc...................... 308,250
-----------
</TABLE>
See Notes to Schedule of Investments. 17 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
PAYSON VALUE FUND
SCHEDULE OF INVESTMENTS (continued)
SEPTEMBER 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
TOBACCO PRODUCTS (1.4%)
6,000 Philip Morris Cos. Inc.................. $ 249,375
-----------
TRANSPORTATION (10.0%)
10,000 Fleetwood Enterprises, Inc.............. 335,626
6,000 Ford Motor Co........................... 271,500
3,000 Northrop Grumman Corp................... 364,125
4,000 Textron, Inc............................ 260,000
11,000 Trinity Industries, Inc................. 530,750
-----------
1,762,001
-----------
WHOLESALE TRADE-NONDURABLE GOODS (3.4%)
6,000 Supervalu, Inc.......................... 235,500
10,000 Sysco Corp.............................. 369,376
-----------
604,876
-----------
Total Common Stock
(cost $11,414,112) 16,846,360
-----------
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
WARRANTS (0.0%)
526 Security Capital Group Class B (cost
$0)................................... $ 4,208
-----------
SHORT-TERM HOLDINGS (4.2%)
$731,691 Boston 1784 Institutional US Treasury
Money Market Fund (cost $731,691)..... 731,691
-----------
Total Investments (100.0%)
(cost $12,145,803) $17,582,259
-----------
-----------
</TABLE>
See Notes to Schedule of Investments. 18 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
(a) Certain rate securities are deemed to have a maturity remaining until the
next readjustment of the interest rate or the longer of the demand period or
readjustment. The interest rates shown reflect the rate in effect on
September 30, 1997.
(b) Securities that may be resold to "qualified institutional buyers" under rule
144A or securities offered pursuant to 4(2) of the Securities Act of 1933,
as amended.
(c) Non-income producing securities.
<TABLE>
<S> <C>
ADR American Depositary Receipts
AMBAC American Municipal Bond Assurance Corporation
CGIC Capital Guaranty Insurance Company
EDA Economic Development Authority
EFA Education Finance Authority
ETM Escrowed to Maturity
FGIC Financial Guaranty Insurance Company
FHA Federal Housing Authority
FHLB Federal Home Loan Bank
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
FSA Financial Security Assurance, Inc.
GNMA Government National Mortgage Association
GO General Obligation
HEHFA Higher Education & Health Facilities Authority
HFA Housing Finance Authority
HSG AUTH State Housing Authority
IDA Industrial Development Authority
LO Limited Obligation
LOC Letter of Credit
LTGO Limited Tax General Obligation
MBIA Municipal Bond Insurance Association
Muni Municipal
P/R Prerefunded
PCR Pollution Control Revenue
PFA Public Finance Authority
RV Revenue Bonds
RTC Resolution Trust Company
SD School District
SFM Single Family Mortgage
VA Veterans' Administration
USG U.S. Governments
UTGO Unlimited Tax General Obligation
</TABLE>
See Notes to Financial Statements. 19 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS & LIABILITIES
SEPTEMBER 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINE NEW
INVESTORS TAXSAVER MUNICIPAL HAMPSHIRE PAYSON PAYSON
BOND BOND BOND BOND BALANCED VALUE
FUND FUND FUND FUND FUND FUND
----------- ----------- ----------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments (Notes 1 and 2):
Investments at cost.......... $26,551,591 $18,856,177 $25,127,319 $ 10,302,898 $19,403,251 $12,145,803
Net unrealized appreciation
(depreciation).............. 628,928 905,599 992,266 277,716 3,645,055 5,436,456
----------- ----------- ----------- ------------- ----------- -----------
Total investments at
value..................... 27,180,519 19,761,776 26,119,585 10,580,614 23,048,306 17,582,259
Cash........................... -- -- -- 25,857 -- --
Interest, dividends and other
receivables................... 330,889 360,172 504,981 203,034 114,941 31,031
Receivable for securities
sold.......................... 1,175,000 244,017 -- -- 319,389 --
Receivable for Fund shares
sold.......................... 130,302 -- 1,488 502,339 691 7,844
----------- ----------- ----------- ------------- ----------- -----------
Total Assets....................... 28,816,710 20,365,965 26,626,054 11,311,844 23,483,327 17,621,134
----------- ----------- ----------- ------------- ----------- -----------
LIABILITIES:
Dividends payable.............. 176,079 56,299 44,304 9,397 76,583 13,654
Payable for securitites
purchased..................... 1,380,713 243,705 -- -- -- 168,600
Payable to Adviser (Note 3).... 9,016 6,492 8,680 3,471 11,388 11,206
Payable for Fund shares
redeemed...................... 66,406 -- 9,196 -- 3,932 1,000
Accrued expenses and other
liabilities................... 6,231 2,922 3,903 1,517 21,588 18,633
----------- ----------- ----------- ------------- ----------- -----------
Total Liabilities.................. 1,638,445 309,418 66,083 14,385 113,491 213,093
----------- ----------- ----------- ------------- ----------- -----------
NET ASSETS......................... $27,178,265 $20,056,547 $26,559,971 $ 11,297,459 $23,369,836 $17,408,041
----------- ----------- ----------- ------------- ----------- -----------
----------- ----------- ----------- ------------- ----------- -----------
COMPONENTS OF NET ASSETS:
Paid in capital................ $26,622,682 $19,126,945 $25,544,329 $ 11,025,215 $17,510,861 $11,144,048
Undistributed (distribution in
excess of) net investment
income........................ (2,108) -- -- 489 1,998 (24,646)
Unrealized appreciation
(depreciation) on
investments................... 628,928 905,599 992,266 277,716 3,645,055 5,436,456
Accumulated net realized gain
(loss)........................ (71,237) 24,003 23,376 (5,961) 2,211,922 852,183
----------- ----------- ----------- ------------- ----------- -----------
NET ASSETS......................... $27,178,265 $20,056,547 $26,559,971 $ 11,297,459 $23,369,836 $17,408,041
----------- ----------- ----------- ------------- ----------- -----------
----------- ----------- ----------- ------------- ----------- -----------
SHARES OF BENEFICIAL INTEREST...... 2,622,957 1,868,562 2,420,263 1,063,801 1,478,217 864,810
----------- ----------- ----------- ------------- ----------- -----------
----------- ----------- ----------- ------------- ----------- -----------
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE................... $ 10.36 $ 10.73 $ 10.97 $ 10.62 $ 15.81 $ 20.13
----------- ----------- ----------- ------------- ----------- -----------
----------- ----------- ----------- ------------- ----------- -----------
OFFERING PRICE PER SHARE
(NAV DIVIDED BY (1-MAXIMUM SALES
LOAD))............................ $ 10.77 $ 11.15 $ 11.25 $ 10.89 $ 16.47 $ 20.97
----------- ----------- ----------- ------------- ----------- -----------
----------- ----------- ----------- ------------- ----------- -----------
MAXIMUM SALES LOAD................. 3.75% 3.75% 2.50% 2.50% 4.00% 4.00%
----------- ----------- ----------- ------------- ----------- -----------
----------- ----------- ----------- ------------- ----------- -----------
</TABLE>
See Notes to Financial Statements. 20 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINE NEW
INVESTORS TAXSAVER MUNICIPAL HAMPSHIRE PAYSON PAYSON
BOND BOND BOND BOND BALANCED VALUE
FUND FUND FUND FUND FUND FUND
----------- ----------- ----------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income........... $ 924,994 $ 557,170 $ 697,772 $248,501 $ 224,173 $ 17,396
Dividend income........... 73,072 -- -- -- 206,313 153,472
----------- ----------- ----------- --------- ----------- -----------
Total Investment Income....... 998,066 557,170 697,772 248,501 430,486 170,868
----------- ----------- ----------- --------- ----------- -----------
EXPENSES:
Investment advisory (Note
3)....................... 50,692 38,950 52,578 19,336 63,184 61,503
Management (Note 3)....... 38,019 29,212 39,433 14,502 21,061 15,376
Transfer agency (Note
3)....................... 38,355 30,783 42,355 18,798 35,732 27,953
Custody................... 5,343 2,763 3,501 811 3,060 2,730
Accounting (Note 3)....... 21,000 18,000 24,000 18,000 18,000 18,000
Audit..................... 7,600 7,600 8,100 7,100 6,700 5,812
Legal..................... 6,268 4,593 11,111 2,411 5,007 3,663
Trustees.................. 1,293 1,068 1,338 679 1,131 901
Reporting................. 5,504 3,969 7,671 5,788 4,942 3,707
Miscellaneous............. 4,763 4,490 13,475 7,832 8,652 5,602
----------- ----------- ----------- --------- ----------- -----------
Total Expenses................ 178,837 141,428 203,562 95,257 167,469 145,247
Expenses reimbursed and fees
waived (Note 4).............. (90,136) (83,010) (124,705) (66,258) (46,501) (33,927)
----------- ----------- ----------- --------- ----------- -----------
Net Expenses.................. 88,701 58,418 78,857 28,999 120,968 111,320
----------- ----------- ----------- --------- ----------- -----------
NET INVESTMENT INCOME
(LOSS)....................... 909,365 498,752 618,915 219,502 309,518 59,548
----------- ----------- ----------- --------- ----------- -----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss)
on investments sold...... 67,392 28,605 64,109 7,784 1,357,832 587,418
Net change in unrealized
appreciation
(depreciation) on
investments.............. 358,483 429,709 521,255 270,287 2,348,433 2,773,696
----------- ----------- ----------- --------- ----------- -----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS... 425,875 458,314 585,364 278,071 3,706,265 3,361,114
----------- ----------- ----------- --------- ----------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS................... $1,335,240 $ 957,066 $1,204,279 $497,573 $4,015,783 $ 3,420,662
----------- ----------- ----------- --------- ----------- -----------
----------- ----------- ----------- --------- ----------- -----------
</TABLE>
See Notes to Financial Statements. 21 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED MARCH 31, 1997 AND
THE SIX MONTHS ENDED SEPTEMBER 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINE
INVESTORS TAXSAVER MUNICIPAL
BOND BOND BOND
FUND FUND FUND
----------------------- ------------------------ ------------------------
AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
------------ --------- ------------ ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
NET ASSETS--MARCH 31,
1996.................... $25,675,978 $17,914,805 $26,043,867
- -------------------------- ------------ ------------ ------------
OPERATIONS:
Net investment income
(loss)................ 1,738,605 932,979 1,211,407
Net realized gain (loss)
on investments sold... (141,125) (1,358) 27,570
Net change in unrealized
appreciation
(depreciation) on
investments........... 159,124 (57,061) (14,199)
------------ ------------ ------------
Net Increase
(Decrease) in Net
Assets Resulting
from Operations..... 1,756,604 874,560 1,224,778
------------ ------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income... (1,748,440) (932,979) (1,211,407)
Net realized gain on
investments........... (42,129) (89,232) --
------------ ------------ ------------
Total Distribution to
Shareholders........ (1,790,569) (1,022,211) (1,211,407)
------------ ------------ ------------
CAPITAL SHARE
TRANSACTIONS:
Sale of shares.......... 4,548,773 445,780 1,975,008 186,690 4,353,571 386,296
Reinvestment of
distributions......... 372,783 36,554 381,020 36,054 679,876 84,023
Redemption of shares.... (8,373,325) (819,354) (2,366,175) (224,222) (5,263,190) (492,962)
------------ --------- ------------ ---------- ------------ ----------
Net Increase
(Decrease) from
Capital
Transactions........ (3,451,769) (337,020) (10,147) (1,478) (229,743) (22,643)
------------ --------- ------------ ---------- ------------ ----------
--------- ---------- ----------
Net Increase
(Decrease)............ (3,485,734) (157,798) (216,372)
------------ ------------ ------------
NET ASSETS--MARCH 31, 1997
(Including line A)...... 22,190,244 17,757,007 25,827,495
------------ ------------ ------------
OPERATIONS:
Net investment income
(loss)................. 909,365 498,752 618,915
Net realized gain (loss)
on investments sold... 67,392 28,605 64,109
Net change in unrealized
appreciation
(depreciation) on
investments........... 358,483 429,709 521,255
------------ ------------ ------------
Net Increase in Net
Assets Resulting
from Operations..... 1,335,240 957,066 1,204,279
------------ ------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income... (909,365) (498,752) (618,915)
------------ ------------ ------------
CAPITAL SHARE
TRANSACTIONS:
Sale of shares.......... 8,226,575 800,070 3,285,095 310,922 1,933,107 177,830
Reinvestment of
distributions......... 155,783 15,094 198,241 18,607 455,997 41,927
Redemption of shares.... (3,820,212) (370,846) (1,642,110) (154,164) (2,241,992) (206,221)
------------ --------- ------------ ---------- ------------ ----------
Net Increase
(Decrease) from
Capital
Transactions........ 4,562,146 444,318 1,841,226 175,365 147,112 13,536
------------ --------- ------------ ---------- ------------ ----------
--------- ---------- ----------
Net Increase
(Decrease)............ 4,988,021 2,299,540 732,476
------------ ------------ ------------
NET ASSETS--SEPTEMBER 30,
1997
(Including line
B)(unaudited)........... $27,178,265 $20,056,547 $26,559,971
------------ ------------ ------------
------------ ------------ ------------
(A) Accumulated
undistributed
(distribution in
excess of) net
investment income,
March 31, 1997........ $ (2,108) $ -- $ --
------------ ------------ ------------
------------ ------------ ------------
(B) Accumulated
undistributed
(distribution in
excess of) net
investment income,
September 30, 1997.... $ (2,108) $ -- $ --
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
See Notes to Financial Statements. 22 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEAR ENDED MARCH 31, 1997 AND
THE SIX MONTHS ENDED SEPTEMBER 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NEW
HAMPSHIRE PAYSON PAYSON
BOND BALANCED VALUE
FUND FUND FUND
------------------------ --------------------------- --------------------------
AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
------------ ---------- ------------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
NET ASSETS--MARCH 31, 1996.............. $ 6,903,448 $ 17,455,477 $ 10,319,479
- ---------------------------------------- ------------ ------------- -------------
OPERATIONS:
Net investment income (loss).......... 369,767 549,597 150,333
Net realized gain (loss) on
investments sold.................... 7,800 1,527,258 564,564
Net change in unrealized appreciation
(depreciation) on investments....... (31,627) (456,564) 695,895
------------ ------------- -------------
Net Increase (Decrease) in Net
Assets Resulting from
Operations...................... 345,940 1,620,291 1,410,792
------------ ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income................. (369,767) (543,918) (147,191)
Net realized gain on investments...... -- (1,714,763) (1,171,228)
------------ ------------- -------------
Total Distribution to
Shareholders.................... (369,767) (2,258,681) (1,318,419)
------------ ------------- -------------
CAPITAL SHARE TRANSACTIONS:
Sale of shares........................ 3,290,772 317,277 1,843,928 148,919 2,557,138 158,335
Reinvestment of distributions......... 260,377 31,104 1,361,863 102,532 829,392 52,847
Redemption of shares.................. (1,740,090) (173,693) (1,859,735) (149,706) (689,414) (42,359)
------------ ---------- ------------- ------------ ------------- -----------
Net Increase (Decrease) from
Capital Transactions............ 1,811,059 174,688 1,346,056 101,745 2,697,116 168,823
------------ ---------- ------------- ------------ ------------- -----------
---------- ------------ -----------
Net Increase (Decrease)............... 1,787,232 707,666 2,789,489
------------ ------------- -------------
NET ASSETS--MARCH 31, 1997
(Including line A).................... 8,690,680 18,163,143 13,108,968
------------ ------------- -------------
OPERATIONS:
Net investment income (loss).......... 219,502 309,518 59,548
Net realized gain (loss) on
investments sold.................... 7,784 1,357,832 587,418
Net change in unrealized appreciation
(depreciation) on investments....... 270,287 2,348,432 2,773,696
------------ ------------- -------------
Net Increase in Net Assets
Resulting from Operations....... 497,573 4,015,782 3,420,662
------------ ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income................. (219,502) (306,154) (59,804)
------------ ------------- -------------
CAPITAL SHARE TRANSACTIONS:
Sale of shares........................ 2,659,950 252,365 2,162,947 149,004 1,634,205 89,180
Reinvestment of distributions......... 200,108 19,046 175,082 11,477 36,548 1,891
Redemption of shares.................. (531,350) (50,652) (840,964) (58,070) (732,538) (40,302)
------------ ---------- ------------- ------------ ------------- -----------
Net Increase (Decrease) from
Capital Transactions............ 2,328,708 220,759 1,497,065 102,411 938,215 50,769
------------ ---------- ------------- ------------ ------------- -----------
---------- ------------ -----------
Net Increase (Decrease)............... 2,606,779 5,206,693 4,299,073
------------ ------------- -------------
NET ASSETS--SEPTEMBER 30, 1997
(Including line B)(unaudited)......... $11,297,459 $ 23,369,836 $ 17,408,041
------------ ------------- -------------
------------ ------------- -------------
(A) Accumulated undistributed
(distribution in excess of) net
investment income, March 31, 1997..... $ 489 $ (1,366) $ (24,390)
------------ ------------- -------------
------------ ------------- -------------
(B) Accumulated undistributed
(distribution in excess of) net
investment income, September 30,
1997.................................. $ 489 $ 1,998 $ (24,646)
------------ ------------- -------------
------------ ------------- -------------
</TABLE>
See Notes to Financial Statements. 23 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTORS TAXSAVER
BOND BOND
FUND FUND
---------------------------------------------------------- ----------------------------------------
SELECTED PER SHARE SIX MONTHS SIX MONTHS
DATA AND RATIOS FOR A ENDED ENDED
SHARE OUTSTANDING SEPTEMBER 30, YEAR ENDED MARCH 31, SEPTEMBER 30, YEAR ENDED MARCH 31,
THROUGHOUT EACH ------------- ------------------------------------------- ------------- -------------------------
PERIOD 1997(a) 1997 1996 1995 1994 1993 1997(a) 1997 1996 1995
------------- ------- ------- ------- ------- ------- ------------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 10.19 $ 10.21 $ 10.00 $ 10.38 $ 10.71 $ 10.43 $ 10.49 $ 10.57 $ 10.39 $ 10.35
------------- ------- ------- ------- ------- ------- ------------- ------- ------- -------
Investment Operations
Net Investment Income
(Loss)................. 0.37 0.71 0.74 0.82 0.81 0.82 0.27 0.56 0.57 0.57
Net Realized and
Unrealized Gain (Loss)
on Investments......... 0.17 -- 0.21 (0.38) (0.30) 0.53 0.24 (0.03) 0.18 0.04
------------- ------- ------- ------- ------- ------- ------------- ------- ------- -------
Total from Investment
Operations............. 0.54 0.71 0.95 0.44 0.51 1.35 0.51 0.53 0.75 0.61
------------- ------- ------- ------- ------- ------- ------------- ------- ------- -------
Distributions From
Net Investment Income... (0.37) (0.71) (0.74) (0.82) (0.81) (0.82) (0.27) (0.56) (0.57) (0.57)
Net Realized Gain on
Investments............ -- (0.02) -- -- (0.03) (0.25) -- (0.05) -- --
------------- ------- ------- ------- ------- ------- ------------- ------- ------- -------
Total Distributions....... (0.37) (0.73) (0.74) (0.82) (0.84) (1.07) (0.27) (0.61) (0.57) (0.57)
------------- ------- ------- ------- ------- ------- ------------- ------- ------- -------
Net Asset Value, End of
Period................. $ 10.36 $ 10.19 $ 10.21 $ 10.00 $ 10.38 $ 10.71 $ 10.73 $ 10.49 $ 10.57 $ 10.39
------------- ------- ------- ------- ------- ------- ------------- ------- ------- -------
------------- ------- ------- ------- ------- ------- ------------- ------- ------- -------
Total Return(b)........... 5.39%(c) 7.18% 9.84% 4.55% 4.70% 13.53% 4.94%(c) 5.15% 7.36% 6.18%
Ratio/Supplementary Data
Net Assets at End of
Period (000's
omitted)............... $27,178 $22,190 $25,676 $25,890 $26,083 $26,832 $20,057 $17,757 $17,915 $16,018
Ratios to Average Net
Assets:
Expenses including
reimbursement/waiver... 0.70%(d) 0.70% 0.43% 0.75% 0.75% 0.75% 0.60%(d) 0.60% 0.60% 0.60%
Expenses excluding
reimbursement/waiver... 1.41%(d) 1.45% 1.36% 1.33% 1.31% 1.40% 1.45%(d) 1.53% 1.48% 1.45%
Net investment income
(loss) including
reimbursement/waiver... 7.18%(d) 6.94% 7.29% 8.19% 7.49% 7.71% 5.12%(d) 5.28% 5.35% 5.62%
Portfolio turnover rate... 44.38% 79.42% 42.89% 48.17% 41.41% 193.21% 15.42% 34.19% 61.61% 63.85%
<CAPTION>
SELECTED PER SHARE
DATA AND RATIOS FOR A
SHARE OUTSTANDING
THROUGHOUT EACH
PERIOD 1994 1993
------- -------
<S> <C> <C>
Net Asset Value,
Beginning of Period.... $ 10.63 $ 10.26
------- -------
Investment Operations
Net Investment Income
(Loss)................. 0.57 0.63
Net Realized and
Unrealized Gain (Loss)
on Investments......... (0.01) 0.49
------- -------
Total from Investment
Operations............. 0.56 1.12
------- -------
Distributions From
Net Investment Income... (0.57) (0.63)
Net Realized Gain on
Investments............ (0.27) (0.12)
------- -------
Total Distributions....... (0.84) (0.75)
------- -------
Net Asset Value, End of
Period................. $ 10.35 $ 10.63
------- -------
------- -------
Total Return(b)........... 5.24% 11.28%
Ratio/Supplementary Data
Net Assets at End of
Period (000's
omitted)............... $16,518 $16,580
Ratios to Average Net
Assets:
Expenses including
reimbursement/waiver... 0.60% 0.60%
Expenses excluding
reimbursement/waiver... 1.50% 1.56%
Net investment income
(loss) including
reimbursement/waiver... 5.27% 5.98%
Portfolio turnover rate... 141.80% 240.36%
</TABLE>
- ----------------------------------------
(a)Unaudited.
(b)Total return calculations does not include sales charge.
(c)Not annualized.
(d)Annualized.
24 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINE
MUNICIPAL NEW HAMPSHIRE
BOND BOND
FUND FUND
---------------------------------------------------------- -------------------------------
SELECTED PER SHARE SIX MONTHS SIX MONTHS
DATA AND RATIOS FOR A ENDED ENDED YEAR ENDED MARCH
SHARE OUTSTANDING SEPTEMBER 30, YEAR ENDED MARCH 31, SEPTEMBER 30, 31,
THROUGHOUT EACH ------------- ------------------------------------------- ------------- ----------------
PERIOD 1997(a) 1997 1996 1995 1994 1993 1997(a) 1997 1996
------------- ------- ------- ------- ------- ------- ------------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period........ $ 10.73 $ 10.72 $ 10.47 $ 10.37 $ 10.55 $ 9.98 $ 10.31 $ 10.33 $ 10.08
------------- ------- ------- ------- ------- ------- ------------- ------- -------
Investment Operations
Net Investment Income
(Loss)..................... 0.26 0.51 0.51 0.52 0.52 0.58 0.24 0.48 0.48
Net Realized and Unrealized
Gain (Loss) on
Investments................ 0.24 0.01 0.25 0.11 (0.16) 0.57 0.31 (0.02) 0.25
------------- ------- ------- ------- ------- ------- ------------- ------- -------
Total from Investment
Operations................. 0.50 0.52 0.76 0.63 0.36 1.15 0.55 0.46 0.73
------------- ------- ------- ------- ------- ------- ------------- ------- -------
Distributions From
Net Investment Income....... (0.26) (0.51) (0.51) (0.52) (0.52) (0.58) (0.24) (0.48) (0.48)
Net Realized Gain on
Investments................ -- -- -- (0.01) (0.02) -- -- -- --
------------- ------- ------- ------- ------- ------- ------------- ------- -------
Total Distributions........... (0.26) (0.51) (0.51) (0.53) (0.54) (0.58) (0.24) (0.48) (0.48)
------------- ------- ------- ------- ------- ------- ------------- ------- -------
Net Asset Value, End of
Period..................... $ 10.97 $ 10.73 $ 10.72 $ 10.47 $ 10.37 $ 10.55 $ 10.62 $ 10.31 $ 10.33
------------- ------- ------- ------- ------- ------- ------------- ------- -------
------------- ------- ------- ------- ------- ------- ------------- ------- -------
Total Return(c)............... 4.67%(d) 4.98% 7.34% 6.31% 3.42% 11.80% 5.38%(d) 4.56% 7.36%
Ratio/Supplementary Data
Net Assets at End of Period
(000's omitted)............ $26,560 $25,827 $26,044 $25,525 $26,310 $16,518 $11,297 $ 8,691 $ 6,903
Ratios to Average Net Assets:
Expenses including
reimbursement/waiver....... 0.60%(e) 0.60% 0.60% 0.50% 0.50% 0.40% 0.60%(e) 0.60% 0.60%
Expenses excluding
reimbursement/waiver....... 1.55%(e) 1.56% 1.48% 1.40% 1.44% 1.98% 1.97%(e) 2.22% 2.26%
Net investment income (loss)
including
reimbursement/waiver....... 4.71%(e) 4.77% 4.73% 5.08% 4.81% 5.25% 4.54%(e) 4.65% 4.65%
Portfolio turnover rate....... 7.88% 21.18% 34.07% 31.55% 13.47% 7.82% 5.58% 53.46% 34.31%
<CAPTION>
SELECTED PER SHARE
DATA AND RATIOS FOR A
SHARE OUTSTANDING
THROUGHOUT EACH
PERIOD 1995 1994 1993(b)
------- ------- -------
<S> <C> <C> <C>
Net Asset Value,
Beginning of Period........ $ 9.96 $ 10.01 $10.00
------- ------- -------
Investment Operations
Net Investment Income
(Loss)..................... 0.49 0.51 0.12
Net Realized and Unrealized
Gain (Loss) on
Investments................ 0.12 (0.03) 0.01
------- ------- -------
Total from Investment
Operations................. 0.61 0.48 0.13
------- ------- -------
Distributions From
Net Investment Income....... (0.49) (0.51) (0.12)
Net Realized Gain on
Investments................ -- (0.02) --
------- ------- -------
Total Distributions........... (0.49) (0.53) (0.12)
------- ------- -------
Net Asset Value, End of
Period..................... $ 10.08 $ 9.96 $10.01
------- ------- -------
------- ------- -------
Total Return(c)............... 6.32% 4.75% 5.55%(e)
Ratio/Supplementary Data
Net Assets at End of Period
(000's omitted)............ $ 5,276 $ 3,555 $ 442
Ratios to Average Net Assets:
Expenses including
reimbursement/waiver....... 0.46% 0.34% 0.50%(e)
Expenses excluding
reimbursement/waiver....... 2.19% 4.33% 30.85%(e)
Net investment income (loss)
including
reimbursement/waiver....... 4.95% 4.68% 4.96%(e)
Portfolio turnover rate....... 37.59% 9.60% --
</TABLE>
- ----------------------------------------
(a)Unaudited.
(b)See Note 1 of Notes to Financial Statements for date of commencement of
operations.
(c)Total return calculations does not include sales charge.
(d)Not Annualized.
(e)Annualized.
25 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAYSON PAYSON
BALANCED VALUE
FUND FUND
---------------------------------------------------------- ----------------------------------------
SELECTED PER SHARE SIX MONTHS SIX MONTHS
DATA AND RATIOS FOR A ENDED ENDED
SHARE OUTSTANDING SEPTEMBER 30, YEAR ENDED MARCH 31, SEPTEMBER 30, YEAR ENDED MARCH 31,
THROUGHOUT EACH ------------- ------------------------------------------- ------------- -------------------------
PERIOD 1997(a) 1997 1996 1995 1994 1993 1997(a) 1997 1996 1995
------------- ------- ------- ------- ------- ------- ------------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 13.20 $ 13.70 $ 11.90 $ 11.71 $ 11.40 $ 10.21 $ 16.10 $ 15.99 $ 12.71 $ 12.11
------------- ------- ------- ------- ------- ------- ------------- ------- ------- -------
Investment Operations
Net Investment Income
(Loss)................. 0.30 0.42 0.43 0.44 0.34 0.31 0.07 0.20 0.21 0.18
Net Realized and
Unrealized Gain (Loss)
on Investments......... 2.61 0.84 2.12 0.24 0.46 1.20 4.03 1.81 3.29 0.60
------------- ------- ------- ------- ------- ------- ------------- ------- ------- -------
Total from Investment
Operations............. 2.91 1.26 2.55 0.68 0.80 1.51 4.10 2.01 3.50 0.78
------------- ------- ------- ------- ------- ------- ------------- ------- ------- -------
Distributions From
Net Investment Income... (0.30) (0.42) (0.43) (0.44) (0.35) (0.31) (0.07) (0.20) (0.21) (0.18)
Net Realized Gain on
Investments............ -- (1.34) (0.32) (0.05) (0.14) (0.01) -- (1.70) (0.01) --
------------- ------- ------- ------- ------- ------- ------------- ------- ------- -------
Total Distributions....... (0.30) (1.76) (0.75) (0.49) (0.49) (0.32) (0.07) (1.90) (0.22) (0.18)
------------- ------- ------- ------- ------- ------- ------------- ------- ------- -------
Net Asset Value, End of
Period................. $ 15.81 $ 13.20 $ 13.70 $ 11.90 $ 11.71 $ 11.40 $ 20.13 $ 16.10 $ 15.99 $ 12.71
------------- ------- ------- ------- ------- ------- ------------- ------- ------- -------
------------- ------- ------- ------- ------- ------- ------------- ------- ------- -------
Total Return(c)........... 21.43%(d) 9.42% 21.70% 6.00% 6.99% 15.12% 25.49%(d) 13.01% 27.77% 6.52%
Ratio/Supplementary Data
Net Assets at End of
Period (000's
omitted)............... $23,370 $18,163 $17,455 $13,872 $11,355 $ 5,396 $17,408 $13,109 $10,319 $ 7,960
Ratios to Average Net
Assets:
Expenses including
reimbursement/waiver... 1.15%(e) 1.15% 1.15% 1.15% 1.15% 1.15% 1.45%(e) 1.45% 1.45% 1.46%
Expenses excluding
reimbursement/waiver... 1.59%(e) 1.67% 1.70% 1.72% 1.95% 2.60% 1.89%(e) 2.07% 2.16% 2.25%
Net investment income
(loss) including
reimbursement/waiver... 2.94%(e) 3.07% 3.25% 3.91% 4.37% 3.27% 0.77%(e) 1.30% 1.47% 1.59%
Average Commission
rate(f)................ $0.0690 $0.0806 $0.0973 N/A N/A N/A $0.0948 $0.0979 $0.0993 N/A
Portfolio turnover rate... 22.46% 52.93% 61.77% 50.06% 80.13% 30.77% 15.00% 24.13% 53.06% 27.20%
<CAPTION>
SELECTED PER SHARE
DATA AND RATIOS FOR A
SHARE OUTSTANDING
THROUGHOUT EACH
PERIOD 1994 1993(b)
------- -------
<S> <C> <C>
Net Asset Value,
Beginning of Period.... $ 11.01 $10.00
------- -------
Investment Operations
Net Investment Income
(Loss)................. 0.13 0.08
Net Realized and
Unrealized Gain (Loss)
on Investments......... 1.12 1.02
------- -------
Total from Investment
Operations............. 1.25 1.10
------- -------
Distributions From
Net Investment Income... (0.15) (0.09)
Net Realized Gain on
Investments............ -- --
------- -------
Total Distributions....... (0.15) (0.09)
------- -------
Net Asset Value, End of
Period................. $ 12.11 $11.01
------- -------
------- -------
Total Return(c)........... 11.38% 17.05%(e)
Ratio/Supplementary Data
Net Assets at End of
Period (000's
omitted)............... $ 5,060 $2,145
Ratios to Average Net
Assets:
Expenses including
reimbursement/waiver... 1.45% 1.44%(e)
Expenses excluding
reimbursement/waiver... 3.04% 5.53%(e)
Net investment income
(loss) including
reimbursement/waiver... 1.38% 1.63%(e)
Average Commission
rate(f)................ N/A N/A
Portfolio turnover rate... 32.15% 23.95%
</TABLE>
- ----------------------------------------
(a)Unaudited.
(b)See Note 1 of Notes to Financial Statements for date of commencement of
operations.
(c)Total return calculations does not include sales charge.
(d)Not Annualized.
(e)Annualized.
(f)For the fiscal years beginning on or after September 1, 1995, the Fund is
required to disclose average commission per share paid to brokers on the
purchase and sale of equity securities.
26 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
September 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
NOTE 1. ORGANIZATION
Forum Funds-Registered Trademark- (the "Trust") is an open-end management
investment company organized as a Delaware business trust. The Trust currently
has fourteen 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 and Payson Value Fund are diversified portfolios. All other Funds
are non-diversified. Included in this report are the six Funds listed below.
Each Fund commenced operations on the following dates:
<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
Payson Balanced Fund November 25, 1991
Payson Value Fund July 31, 1992
</TABLE>
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These financial statements are prepared in accordance with generally accepted
accounting principles which require management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of increase and decrease in net assets from operations
during the fiscal period. Actual results could differ from those estimates.
The following represent significant accounting policies of the Funds:
SECURITY VALUATION-Securities, other than short-term securities, held by the
Funds for which market quotations are readily available are valued using the
last reported sales price provided by independent pricing services. If no sales
are reported, the mean of the last bid and asked price is used. In the absence
of readily available market quotations, securities are valued at fair value as
determined by the Board of Trustees. Securities with a maturity of 60 days or
less held by the Funds are valued at amortized cost.
REPURCHASE AGREEMENTS-Each Fund may invest in repurchase agreements. The Funds,
through their custodian, receive delivery of the underlying securities, whose
market value must always equal or exceed the repurchase price. The investment
adviser is responsible for determining the value of the underlying securities at
all times. In the event of default, a Fund may have difficulties with the
disposition of such securities.
INTEREST AND DIVIDEND INCOME-Interest income is accrued as earned. Dividends on
securities held by the Funds are recorded on the ex-dividend date.
DISTRIBUTIONS TO SHAREHOLDERS-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. Capital gain distributions, if any, are distributed to shareholders
at least annually. Distributions are based on amounts calculated in accordance
with applicable income tax regulations.
27 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
September 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
FEDERAL TAXES-Each Fund intends to qualify and continue to qualify each year as
a regulated investment company and distribute all of its taxable income. In
addition, by distributing in each calendar year substantially all of its net
investment income, capital gains and certain other amounts, if any, each Fund
will not be subject to a federal excise tax. Therefore, no federal income or
excise tax provision is required.
EXPENSE ALLOCATION-The Trust accounts separately for the assets and liabilities
and operations of each Fund. Expenses that are directly attributable to more
than one Fund are allocated among the respective Funds.
REALIZED GAIN AND LOSS-Security transactions are recorded on trade date.
Realized gain and loss on investments sold are recorded on the basis of
identified cost.
NOTE 3. ADVISORY FEES, SERVICING FEES AND OTHER TRANSACTIONS WITH AFFILIATES
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.-Registered Trademark- ("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.
MANAGEMENT AND OTHER SERVICES-Forum Financial Corp.-Registered Trademark-
("FFC"), an affiliate of Forum Advisors, serves as the Funds transfer agent and
dividend disbursing agent, and for those services receives an annual fee of
$12,000 plus 0.25% of the average daily net assets of each Fund.
Effective June 19, 1997, Forum Accounting Services, Limited Liability Company
("FAcS") serves as the Trust's fund accountant. FAcS is compensated for such
services at an amount of $36,000 per year per Fund, plus certain amounts based
upon the number and types of portfolio transactions within each Fund. Prior to
June 19, 1997, FFC also served as the fund accountant of the Trust pursuant to
the same terms and compensation as FAcS.
Effective June 19, 1997, the manager of the Trust is Forum Administrative
Services, Limited Liability Company ("FAdS"), receives a management fee for its
services to Investors Bond Fund, TaxSaver Bond Fund, Maine Municipal Bond Fund
and New Hampshire Bond Fund at an annual rate of 0.30% of the average daily net
assets of each Fund. FAdS receives a management fee for its services to Payson
Balanced Fund and Payson Value Fund at an annual rate of 0.20% and 0.20% of the
average daily net assets of each Fund, respectively. In addition, FAdS charged
certain legal expenses to the Funds aggregating $827. Forum Financial Services,
Inc.-Registered Trademark- ("FFSI"), a registered broker-dealer and a member of
the National Association of Securities Dealers, Inc., acts as the distributor of
the Funds' shares. Prior to June 19, 1997, FFSI also served as the manager of
the Trust pursuant to the same terms and compensation as FAdS.
FFSI also received sales commissions during the period ended September 30, 1997
amounting to $56,439 after deducting $56,439 allowed to authorized dealers and
agents. FAdS, Forum Advisors, FFC and FFSI are affiliated companies.
28 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
September 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
NOTE 4. WAIVER OF FEES AND REIMBURSEMENT OF EXPENSES
FFC and FAdS have voluntarily undertaken to waive a portion of their fees and
assume certain expenses of the Funds so that total expenses of the Funds would
not exceed certain limitations. FFC and FAdS, at their discretion, may revise or
discontinue the voluntary waivers. For the six months ended September 30, 1997,
expenses reimbursed and fees waived were as follows:
<TABLE>
<CAPTION>
TOTAL
EXPENSES FEES WAIVED EXPENSES
REIMBURSED -------------------- REIMBURSED
FADS AND FADS AND AND FEES
FFSI FFC FFSI WAIVED
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Investors Bond Fund..................... $ 22,485 $ 29,632 $38,019 $90,136
TaxSaver Bond Fund...................... 31,302 22,496 29,212 83,010
Maine Municipal Bond Fund............... 61,929 23,343 39,433 124,705
New Hampshire Bond Fund................. 45,350 6,406 14,502 66,258
Payson Balanced Fund.................... -- 25,440 21,061 46,501
Payson Value Fund....................... -- 18,551 15,376 33,927
</TABLE>
NOTE 5. SECURITY TRANSACTIONS
Cost of purchases and proceeds from sales of securities (including maturities)
of portfolio securities (excluding short-term investments) during the six months
ended September 30, 1997 were as follows:
<TABLE>
<CAPTION>
COST OF PROCEEDS
PURCHASES FROM SALES
----------- ------------
<S> <C> <C>
Investors Bond Fund..................... $19,274,303 $11,418,453
TaxSaver Bond Fund...................... 5,545,874 3,245,633
Maine Municipal Bond Fund............... 3,610,356 2,285,417
New Hampshire Bond Fund................. 2,442,718 614,339
Payson Balanced Fund.................... 6,613,253 5,348,503
Payson Value Fund....................... 3,470,040 2,559,114
</TABLE>
For federal income tax purposes, the tax basis of investment securities owned as
of September 30, 1997 were the same as for financial reporting purposes. The
aggregate gross unrealized appreciation for all securities in which there was an
excess of market value over tax cost and the aggregate gross unrealized
depreciation for all securities in which there was an excess of tax cost over
market value were as follows:
<TABLE>
<CAPTION>
NET
UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
APPRECIATION DEPRECIATION (DEPRECIATION)
------------ ---------- ----------
<S> <C> <C> <C>
Investors Bond Fund......... $ 676,799 $ 47,871 $ 628,928
TaxSaver Bond Fund.......... 905,951 352 905,599
Maine Municipal Bond Fund... 1,012,187 19,921 992,266
New Hampshire Bond Fund..... 279,230 1,514 277,716
Payson Balanced Fund........ 3,721,355 76,300 3,645,055
Payson Value Fund........... 5,482,646 46,190 5,436,456
</TABLE>
29 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
September 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
As of September 30, 1997, certain of the Funds have capital loss carryovers
available to offset future capital gains as follows:
<TABLE>
<CAPTION>
MAINE NEW HAMPSHIRE
INVESTORS TAXSAVER MUNICIPAL BOND
BOND FUND BOND FUND BOND FUND FUND
----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C>
Carryovers expiring in 2003........................... $ -- $ -- $ -- $ 10,104
Carryovers expiring in 2004........................... -- -- 37,393 --
Carryovers expiring in 2005........................... 100,670 2,743 -- --
</TABLE>
NOTE 6. CONCENTRATION OF RISK
The Maine Municipal Bond Fund and New Hampshire Bond Fund invest substantially
all of their assets in debt obligations of issuers located in the states of
Maine and New Hampshire, respectively. The issuers' abilities to meet their
obligations may be affected by Maine and Hew Hampshire economic or political
developments.
30 FORUM FUNDS-Registered Trademark-
<PAGE>
[LOGO]
Manager
Forum Administrative Services, LLC
Transfer Agent
Forum Financial Corp.
Forum Funds
P.O. Box 446
Portland, ME 04112
207-879-0001 (IN PORTLAND, ME)
800-94FORUM (ELSEWHERE)
THIS REPORT IS AUTHORIZED FOR DISTRIBUTION TO SHAREHOLDERS AND
OTHERS WHO HAVE RECEIVED A COPY OF THE FORUM FUNDS' PROSPECTUS.
