FORUM FUNDS INC, 497, 1997-11-21

FORUM FUNDS INC
497, 1997-11-21

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<PAGE>

P R O S P E C T U S

I N V E S T O R
S H A R E S

Daily Assets
Treasury Fund

Daily Assets
Treasury
Obligations Fund

Daily Assets
Government Fund

Daily Assets
Cash Fund

Daily Assets
Tax-Exempt Fund

F O R U M
F U N D S
NOVEMBER 17, 1997

<PAGE>
FORUM FUNDS

DAILY ASSETS TREASURY FUND
DAILY ASSETS TREASURY OBLIGATIONS FUND
DAILY ASSETS GOVERNMENT FUND
DAILY ASSETS CASH FUND
DAILY ASSETS TAX-EXEMPT FUND

PROSPECTUS

November 17, 1997
- --------------------------------------------------------------------------------

THIS PROSPECTUS OFFERS INVESTOR SHARES OF DAILY ASSETS TREASURY FUND, DAILY
ASSETS TREASURY OBLIGATIONS FUND, DAILY ASSETS GOVERNMENT FUND, DAILY ASSETS
CASH FUND AND DAILY ASSETS TAX-EXEMPT FUND (EACH A "FUND"). EACH FUND IS A
DIVERSIFIED NO-LOAD, MONEY MARKET PORTFOLIO OF FORUM FUNDS (THE "TRUST"), A
REGISTERED OPEN-END, MANAGEMENT INVESTMENT COMPANY. EACH FUND SEEKS TO PROVIDE
ITS SHAREHOLDERS WITH HIGH CURRENT INCOME (WHICH, IN THE CASE OF DAILY ASSETS
TAX-EXEMPT FUND, IS EXEMPT FROM FEDERAL INCOME TAXES) TO THE EXTENT CONSISTENT
WITH THE PRESERVATION OF CAPITAL AND THE MAINTENANCE OF LIQUIDITY.

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

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

DAILY ASSETS TREASURY OBLIGATIONS FUND invests substantially all of its
assets in obligations of the U.S. Treasury and in repurchase agreements
backed by these obligations.

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

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

DAILY ASSETS TAX-EXEMPT FUND invests primarily in high-quality obligations
of the states, territories and possessions of the U.S. and of their
subdivisions, authorities and corporations ("municipal securities") with a
view toward providing income that is exempt from federal income taxes.

This Prospectus sets forth concisely the information concerning the Trust and
the Funds that a prospective investor should know before investing. The Trust
has filed with the Securities and Exchange Commission ("SEC") a Statement of
Additional Information dated November 17, 1997, as may be amended from time to
time (the "SAI"), which contains more detailed information about the Trust and
the Funds and is available together with other related materials for reference
on the SEC's Internet Web Site (http://www.sec.gov). The SAI, which is
incorporated into this Prospectus by reference, also is available without charge
by contacting the Funds' transfer agent, Forum Financial Corp., at P.O. Box 446,
Portland, Maine 04112, (207) 879-0001 or (800) 94FORUM.

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

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<C> <S> <C>
1. Prospectus Summary.......................... 2
2. Financial Highlights........................ 4
3. Investment Objective and Policies........... 5
4. Management.................................. 11

<CAPTION>
Page
<C> <S> <C>
5. Purchases and Redemptions of Shares......... 13
6. Distributions and Tax Matters............... 18
7. Other Information........................... 20
</TABLE>

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

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

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

HIGHLIGHTS OF THE FUNDS

This prospectus offers shares of the Investor class ("Investor Shares") of
each of the Funds. The Funds operate in accordance with the provisions of Rule
2a-7 under the Investment Company Act of 1940 (the "1940 Act"). Each Fund
invests all of its investable assets in a separate portfolio (each a
"Portfolio") of Core Trust (Delaware), an open-end, management investment
company ("Core Trust") as follows:

<TABLE>
<S> <C>
Daily Assets Treasury Fund Treasury Portfolio
Daily Assets Treasury Obligations Treasury Cash Portfolio
Fund
Daily Assets Government Fund Government Cash Portfolio
Daily Assets Cash Fund Cash Portfolio
Daily Assets Tax-Exempt Fund Municipal Cash Portfolio
</TABLE>

Accordingly, the investment experience of each Fund will correspond directly
with the investment experience of its corresponding Portfolio. See "Other
Information - Fund Structure." Each Fund currently offers three separate classes
of shares: Institutional Shares, Institutional Service Shares and Investor
Shares. Investor Shares are sold through this Prospectus. Institutional Shares
and Institutional Service Shares are each offered by a separate prospectus. See
"Other Information - Fund Structure - Other Classes of Shares."

MANAGEMENT. Forum Administrative Services, LLC ("FAS") supervises the
overall management of the Funds and the Portfolios and Forum Financial Services,
Inc. ("FFSI") is the distributor of the Funds' shares. Forum Advisors, Inc.
("Forum Advisors") is the investment adviser of Treasury Portfolio and Municipal
Cash Portfolio and provides professional management of those Portfolio's
investments. Linden Asset Management, Inc. ("Linden") is the investment adviser
of Treasury Cash Portfolio, Government Cash Portfolio and Cash Portfolio and
provides professional management of those Portfolios' investments. Forum
Advisors and Linden (each an "Adviser") provide certain subadvisory assistance
for the Portfolios they do not directly advise. The Funds' transfer agent,
dividend disbursing agent and shareholder servicing agent is Forum Financial
Corp. (the "Transfer Agent"). See "Management" for a description of the services
provided and fees charged to the Funds.

It is anticipated that, as of January 1, 1998, Forum Advisors will acquire
Linden and reorganize into a new company named Forum Advisors, LLC. The
acquisition is subject to a vote of the shareholders of Daily Assets Cash Fund
and of the other investors in the Portfolio which Linden currently advises. No
change in advisory staff, portfolio managers, or advisory fees, or any other
material change is expected as a result of these transactions.

SHAREHOLDER SERVICING AND DISTRIBUTION. The Trust has adopted a Shareholder
Service Plan and a Plan of Distribution relating to Investor Shares under which
FAS and Forum, respectively, are compensated for various shareholder servicing
and distribution related activities. See "Management - Shareholder Servicing"
and "- Administration and Distribution."

PURCHASES AND REDEMPTIONS. The minimum initial investment in Investor
Shares is $10,000 ($2,000 for IRAs, $2,500 for exchanges). The minimum
subsequent investment is $500. Investor Shares may be purchased and redeemed
Monday through Friday, between 9:00 a.m. and 6:00 p.m., Eastern Time, except on
Federal holidays and days that the Federal Reserve Bank of San Francisco (Boston
in the case of Daily Assets Treasury Fund and Daily Assets Tax-Exempt Fund) is
closed ("Fund Business Days"). To be eligible to receive that day's income,
purchase orders must be received by the Transfer Agent in good order no later
than 2:00 p.m., Eastern Time (noon in the case of Daily Assets Treasury Fund and
Daily Assets Tax-Exempt Fund). Shareholders may elect to have redemption
proceeds over $5,000 transferred by bank wire to a designated bank account. To
be able to receive redemption proceeds by wire on the day of the redemption,
redemption orders must be received by the Transfer Agent in good order no later
than 2:00 p.m., Eastern Time (noon in the case of Daily Assets Treasury Fund and
Daily Assets Tax-Exempt Fund). All times may be changed without notice by Fund
management due to market activities. See "Purchase and Redemption of Shares."

EXCHANGES. Shareholders of a Fund may exchange Investor Shares without
charge for Investor Shares of the other Funds and for the shares of

2
<PAGE>
other certain other mutual funds not offered by this Prospectus. See "Purchases
and Redemptions of Shares - Exchanges."

DISTRIBUTIONS. Distributions of net investment income are declared daily
and paid monthly by each Fund and are automatically reinvested in additional
Fund shares unless the shareholder has requested payment in cash. See
"Distributions and Tax Matters."

INVESTMENT CONSIDERATIONS. There can be no assurance that any Fund will be
able to maintain a stable net asset value of $1.00 per share. Although the
Portfolios invest only in money market instruments, an investment in any Fund
involves certain risks, depending on the types of investments made and the types
of investment techniques employed. Investment in any security, including U.S.
Government Securities, involves some level of investment risk. An investment in
a Fund is not insured by the FDIC, nor is it insured or guaranteed against loss
of principal. By investing in its corresponding Portfolio, each Fund may achieve
certain efficiencies and economies of scale. Nonetheless, these investments
could also have potential adverse effects on the applicable Fund. See "Other
Information - Fund Structure."

EXPENSES OF INVESTING IN THE FUNDS

The purpose of the following table is to assist investors in understanding
the various expenses that an investor in Investor Shares will bear directly or
indirectly. There are no transaction expenses associated with purchases,
redemptions or exchanges of Fund shares.

ANNUAL FUND OPERATING EXPENSES (1)
(as a percentage of average net assets)

<TABLE>
<CAPTION>
Daily Daily
Daily Assets Daily Assets
Assets Treasury Assets Daily Tax-
Treasury Obligations Government Assets Exempt
Fund Fund Fund Cash Fund Fund
----------- ----------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C>
Management
Fees(2).................. 0.15% 0.14% 0.14% 0.14% 0.15%
Rule 12b-1 Fees........... 0.15% 0.15% 0.15% 0.15% 0.15%
Other Expenses
(after expense
reimbursements)(3)....... 0.45% 0.46% 0.46% 0.46% 0.45%
----------- ----------- ----------- --------- ---------
Total Operating
Expenses................. 0.75% 0.75% 0.75% 0.75% 0.75%
</TABLE>

(1) For a further description of the various expenses incurred in the
operation of the Funds and the Portfolios, see "Management." The amount of fees
and expenses for each Fund is based on estimated annualized expenses for the
Funds' fiscal year ending August 31, 1998. Each Fund's expenses include the
Fund's pro rata portion of all expenses of its corresponding Portfolio, which
are borne indirectly by Fund shareholders.

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

(3) Absent estimated reimbursements by Forum Advisors and its affiliates,
Other Expenses and Total Fund Operating Expenses would be: 0.75% and 1.05%,
respectively, for Daily Assets Treasury Fund; 0.70% and 0.99%, respectively, for
Daily Assets Treasury Obligations Fund; 0.75% and 1.04%, respectively, for Daily
Assets Government Fund; 0.80% and 1.09%, respectively, for Daily Assets Cash
Fund; 0.80% and 1.10%, respectively, for Daily Assets Tax-Exempt Fund. Expense
reimbursements are voluntary and may be reduced or eliminated at any time.

EXAMPLE

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

<TABLE>
<CAPTION>
One Three Five Ten
Year Years Years Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Each Fund................ $8 $24 $42 $93
</TABLE>

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

3
<PAGE>
2. FINANCIAL HIGHLIGHTS

As of the date hereof, Investor Shares were not offered. The following
information represents selected data for a single outstanding Institutional
Service Share of Daily Assets Treasury Fund and of Daily Assets Cash Fund. Those
classes were the first offered by the respective Funds and, accordingly,
represent data since each Fund's inception. Information for the period ended
August 31, 1997, was audited by KPMG Peat Marwick LLP, independent auditors.
Information for prior periods was audited by other independent auditors. The
financial statements for Daily Assets Treasury Fund and Daily Assets Cash Fund
and independent auditors' report thereon for the fiscal year ended August 31,
1997, are incorporated by reference into the SAI and may be obtained from the
Trust without charge. As of the date hereof, Daily Assets Treasury Obligations
Fund, Daily Assets Government Fund, Daily Assets Tax-Exempt Fund, as well as
Municpal Cash Portfolio had not commenced operations.

<TABLE>
<CAPTION>
NET
RATIOS TO AVERAGE ASSETS RATIO
NET ASSETS AT END TO AVERAGE
BEGINNING DISTRIBUTIONS ENDING --------------------- OF NET ASSETS
NET ASSET NET FROM NET NET ASSET NET PERIOD -----------
VALUE PER INVESTMENT INVESTMENT VALUE PER NET INVESTMENT TOTAL (000'S GROSS
SHARE INCOME INCOME SHARE EXPENSES INCOME RETURN OMITTED) EXPENSES(1)
--------- ---------- ------------- --------- -------- ---------- ------ -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DAILY ASSETS TREASURY
FUND
INSTITUTIONAL SERVICE
SHARES
April 1, 1997 to
August 31, 1997.... $1.00 0.02 (0.02) $1.00 0.50%(2) 4.76%(2) 2.01%(3) $44,116 0.95%(2)
Year Ended March 31,
1997............... 1.00 0.05 (0.05) 1.00 0.50% 4.70% 4.80% 43,975 0.99%
Year Ended March 31,
1996............... 1.00 0.05 (0.05) 1.00 0.50% 5.01% 5.18% 43,103 1.06%
Year Ended March 31,
1995............... 1.00 0.04 (0.04) 1.00 0.37% 4.45% 4.45% 36,329 1.10%
Year Ended March 31,
1994............... 1.00 0.03 (0.03) 1.00 0.33% 2.82% 2.83% 26,505 1.17%
July 1, 1992 to
March 31, 1993..... 1.00 0.02 (0.02) 1.00 0.22%(2) 2.92%(2) 3.13%(2) 4,687 2.43%(2)
DAILY ASSETS CASH FUND
INSTITUTIONAL SERVICE
SHARES
October 1, 1996 to
August 31, 1997.... 1.00 0.05 (0.05) 1.00 0.52%(2) 5.06%(2) 4.70%(3) $12,076 1.22%(2)
</TABLE>

(1) During each period, various fees and expenses were waived and reimbursed,
respectively. The ratio of Gross Expenses to Average Net Assets reflects the
expense ratio in the absence of any waivers and reimbursements for the Fund
and its respective Portfolio.

(2) Annualized.

(3) Not Annualized.

4
<PAGE>
3. INVESTMENT OBJECTIVES AND POLICIES

INVESTMENT OBJECTIVE

The investment objective of each Fund except Daily Assets Tax-Exempt Fund is
to provide high current income to the extent consistent with the preservation of
capital and the maintenance of liquidity. The investment objective of Daily
Assets Tax-Exempt Fund is to provide high current income which is exempt from
federal income taxes to the extent consistent with the preservation of capital
and the maintenance of liquidity.

THERE CAN BE NO ASSURANCE THAT ANY FUND OR PORTFOLIO WILL ACHIEVE ITS
INVESTMENT OBJECTIVE OR MAINTAIN A STABLE NET ASSET VALUE.

Each Fund currently seeks to achieve its investment objective by investing
all of its investable assets in its corresponding Portfolio, which has the same
investment objective and substantially similar investment policies. Therefore,
although the following discusses investment policies of the Portfolios (and the
responsibilities of Core Trust's board of trustees (the "Core Trust Board")), it
applies equally to the Funds (and the Trust's board of trustees (the "Board")).

INVESTMENT POLICIES

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

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

In the case of municipal securities, when the assets and revenues of an
issuer are separate from those of the government creating the issuer and a
security is backed only by the assets and revenues of the issuer, the issuer and
not the creating government is deemed to be the sole issuer of the security.
Similarly, in the case of a security issued by or on behalf of public
authorities to finance various privately operated facilities that is backed only
by the assets and revenues of the non-governmental user, the non-governmental
user will be deemed to be the sole issuer of the security.

Yields on money market securities are dependent on a variety of factors,
including the general conditions of the money markets and the fixed income
markets, the size of a particular offering, the maturity of the obligation and
the rating of the issue. A Fund's yield will tend to fluctuate inversely with
prevailing market interest rates. For instance, in periods of falling market
interest rates, yields will tend to be somewhat higher. Although each Portfolio
only invests in high quality money market instruments, an investment in a Fund
is subject to risk even if all securities in the Portfolio's portfolio

5
<PAGE>
are paid in full at maturity. All money market instruments, including U.S.
Government Securities and municipal securities, can change in value when there
is a change in interest rates, the issuer's actual or perceived creditworthiness
or the issuer's ability to meet its obligations. The achievement of a Fund's
investment objective is dependent in part on the continuing ability of the
issuers of the securities in which the Portfolio invests to meet their
obligations for the payment of principal and interest when due.

DAILY ASSETS TREASURY FUND

Treasury Portfolio seeks to attain its investment objective by investing
primarily in Treasury Securities. Under normal market conditions, the Portfolio
will invest at least 65% of its total assets in Treasury Securities. The
Portfolio may also invest in other U.S. Government Securities. The Portfolio
invests with a view toward providing income that is generally considered exempt
from state and local income taxes. The Portfolio will purchase a U.S. Government
Security (other than a Treasury Security) only if that security has a remaining
maturity of thirteen months or less.

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

The U.S. Government Securities in which the Portfolio may invest include
securities supported primarily or solely by the creditworthiness of the issuer.
There is no guarantee that the U.S. government will support securities not
backed by its full faith and credit. Accordingly, although these securities have
historically involved little risk of loss of principal if held to maturity, they
may involve more risk than securities backed by the U.S. government's full faith
and credit.

DAILY ASSETS TREASURY OBLIGATIONS FUND

Treasury Cash Portfolio seeks to attain its investment objective by
investing substantially all of its assets in Treasury Securities and in
repurchase agreements backed by Treasury Securities.

DAILY ASSETS GOVERNMENT FUND

Government Cash Portfolio seeks to attain its investment objective by
investing substantially all of its assets in U.S. Government Securities and in
repurchase agreements backed by U.S. Government Securities. The U.S. Government
Securities in which the Portfolio may invest include Treasury Securities and
securities supported primarily or solely by the creditworthiness of the issuer,
such as securities of the Federal National Mortgage Association, Federal Home
Loan Banks and Student Loan Marketing Association. There is no guarantee that
the U.S. Government will support securities not backed by its full faith and
credit. Accordingly, although these securities have historically involved little
risk of loss of principal if held to maturity, they may involve more risk than
securities backed by the U.S. Government's full faith and credit.

6
<PAGE>
DAILY ASSETS CASH FUND

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

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

Corporate debt obligations include commercial paper (short-term promissory
notes) issued by companies to finance their, or their affiliates', current
obligations. The Portfolio may also invest in commercial paper or other
corporate securities issued in "private placements" that are restricted as to
disposition under the Federal securities laws ("restricted securities"). Any
sale of these securities may not be made absent registration under the
Securities Act of 1933 or the availability of an appropriate exemption
therefrom. Some of these restricted securities, however, are eligible for resale
to institutional investors, and accordingly, a liquid market may exist for them.
Pursuant to guidelines adopted by the Core Trust Board, the investment adviser
will determine whether each such investment is liquid.

DAILY ASSETS TAX-EXEMPT FUND

Municipal Cash Portfolio seeks to attain its investment objective by
investing primarily in municipal securities. The Portfolio attempts to maintain
100% of its assets invested in federally tax-exempt municipal securities; during
periods of normal market conditions the Portfolio will have at least 80% of its
net assets invested in federally tax-exempt instruments the income from which
may be subject to the federal alternative minimum tax ("AMT").

The Portfolio may from time to time invest more than 25% of its assets in
obligations of issuers located in one state but, under normal circumstances,
will not invest more than 35% of its assets in obligations of issuers located in
one state or territory. If the Portfolio concentrates its investments in this
manner, it will be more susceptible to factors adversely affecting issuers of
those municipal securities than would be a more geographically diverse municipal
securities portfolio. These risks arise from the financial condition of the
particular state or territory and its political subdivisions.

7
<PAGE>
banking industry, including the foreign banking industry. These risks include a
sustained increase in interest rates, which can adversely affect the
availability and cost of a bank's lending activities; exposure to credit losses
during times of economic decline; concentration of loan portfolios in certain
industries; regulatory developments; and competition among financial
institutions. Brokerage firms and insurance companies also provide certain
liquidity and credit support. The Portfolio's policy is to purchase municipal
securities with third party credit or liquidity support only after the Adviser
has considered the creditworthiness of the financial institution providing the
support and believes that the security presents minimal credit risk.

The Portfolio may purchase long term municipal securities with various
maturity shortening provisions. For instance, variable rate demand notes
("VRDN") are municipal bonds with maturities of up to 40 years that are sold
with a demand feature (an option for the holder of the security to sell the
security back to the issuer) which may be exercised by the security holder at
predetermined intervals, usually daily or weekly. The interest rate on the
security is typically reset by a remarketing or similar agent at prevailing
interest rates. VRDNs may be issued directly by the municipal issuer or created
by a bank, broker-dealer or other financial institution by selling a previously
issued long-term bond with a demand feature attached. Similarly, tender option
bonds (also referred to as certificates of participation) are municipal
securities with relatively long original maturities and fixed rates of interest
that are coupled with an agreement of a third party financial institution under
which the third party grants the security holders the option to tender the
securities to the institution and receive the face value thereof. The option may
be exercised at periodic intervals, usually six months to a year. As
consideration for providing the option, the financial institution receives a fee
equal to the difference between the underlying municipal security's fixed rate
and the rate, as determined by a remarketing or similar agent, that would cause
the securities, coupled with the tender option, to trade at par on the date of
the interest rate determination. These bonds effectively provide the holder with
a demand obligation that bears interest at the prevailing short-term municipal
securities interest rate.

The Portfolio also may acquire "puts" on municipal securities it purchases.
A put gives the Portfolio the right to sell the municipal security at a
specified price at any time before a specified date. The Portfolio will acquire
puts only to enhance liquidity, shorten the maturity of the related municipal
security or permit the Portfolio to invest its funds at more favorable rates.
Generally, the Portfolio will buy a municipal security that is accompanied by a
put only if the put is available at no extra cost. In some cases, however, the
Portfolio may pay an extra amount to acquire a put, either in connection with
the purchase of the related municipal security or separately from the purchase
of the security.

The Portfolio may purchase municipal securities together with the right to
resell them to the seller or a third party at an agreed-upon price or yield
within specified periods prior to their maturity dates. Such a right to resell
is commonly known as a "stand-by commitment," and the aggregate price which the
Portfolio pays for securities with a stand-by commitment may be higher than the
price which otherwise would be paid. The primary purpose of this practice is to
permit the Portfolio to be as fully invested as practicable in municipal
securities while preserving the necessary flexibility and liquidity to meet
unanticipated redemptions. In this regard, the Portfolio acquires stand-by
commitments solely to facilitate portfolio liquidity and does not exercise its
rights thereunder for trading purposes. Stand-by commitments involve certain
expenses and risks, including the inability of the issuer of the commitment to
pay for the securities at the time the commitment is exercised,
non-marketability of the commitment, and differences between the maturity of the
underlying security and the maturity of the commitment.

8
<PAGE>
MUNICIPAL BONDS. Municipal bonds are long term fixed-income securities.
"General obligation" bonds are secured by a municipality's pledge of its full
faith, credit and taxing power for the payment of principal and interest.
"Revenue" bonds are usually payable only from the revenues derived from a
particular facility or class of facilities or, in some cases, from the proceeds
of a special excise or other tax, but not from general tax revenues. Under a
"moral obligation" bond (which is normally issued by special purpose public
authorities), if the issuer is unable to meet its obligations under the bonds
from current revenues, it may draw on a reserve fund that is backed by the moral
commitment (but not the legal obligation) of the state or municipality that
created the issuer. The Portfolio may invest in industrial development bonds,
which in most cases are revenue bonds. The payment of the principal and interest
on these bonds is dependent solely on the ability of an initial or subsequent
user of the facilities financed by the bonds to meet its financial obligations
and the pledge, if any, of real and personal property so financed as security
for such payment.

MUNICIPAL NOTES AND LEASES. Municipal notes, which may be either "general
obligation" or "revenue" securities, are short-term fixed income securities
intended to fulfill short-term capital needs of a municipality. Municipal
leases, which may take various forms, are issued by municipalities to acquire a
wide variety of equipment and facilities. Municipal leases frequently have
special risks not normally associated with other municipal securities. Municipal
leases (which normally provide for title to the leased assets to pass eventually
to the government issuer) have evolved as a means for governmental issuers to
acquire property and equipment without meeting the constitutional and statutory
requirements for the issuance of debt. The debt-issuance limitations of many
state constitutions and statutes are deemed to be inapplicable because of the
inclusion in many leases or contracts of "non-appropriation" clauses that
provide that the governmental issuer has no obligation to make future payments
under the lease or contract unless money is appropriated for such purpose by the
appropriate legislative body on a yearly or other periodic basis.

PARTICIPATION INTERESTS. The Portfolio may purchase participation interests
in municipal securities that are owned by banks or other financial institutions.
Participation interests usually carry a demand feature backed by a letter of
credit or guarantee of the bank or institution permitting the holder to tender
them back to the bank or other institution.

TAXABLE INVESTMENTS. The Portfolio may invest up to 20% of the value of its
net assets in cash and money market instruments, the interest income on which is
subject to federal income taxation. In addition, when business or financial
conditions warrant or when an adequate supply of appropriate municipal
securities is not available, the Portfolio may assume a temporary defensive
position and invest without limit in such taxable money market instruments.

ADDITIONAL INVESTMENT POLICIES

Each Fund's and each Portfolio's investment objective and certain investment
limitations, as described in the SAI, are fundamental and therefore, may not be
changed without approval of the holders of a majority of the Fund's or
Portfolio's, as applicable, outstanding voting securities (as defined in the
1940 Act). Except as otherwise indicated herein or in the SAI, investment
policies of a Fund or a Portfolio may be changed by the applicable board of
trustees without shareholder approval. Each Portfolio is permitted to hold cash
in any amount pending investment in securities and may invest in other
investment companies that intend to comply with Rule 2a-7 and have substantially
similar investment objectives and policies. A further description of the Funds'
and the Portfolios' investment policies is contained in the SAI.

9
<PAGE>
BORROWING. Each Portfolio may borrow money for temporary or emergency
purposes (including the meeting of redemption requests), but not in excess of
33 1/3% of the value of the Portfolio's total assets. Borrowing for purposes
other than meeting redemption requests will not exceed 5% of the value of the
Portfolio's total assets.

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

LIQUIDITY. To ensure adequate liquidity, each Portfolio may not invest more
than 10% of its net assets in illiquid securities, including, repurchase
agreements not entitling the Portfolio to payment of principal within seven
days. There may not be an active secondary market for securities held by a
Portfolio. The value of securities that have a limited market tend to fluctuate
more than those that have an active market. Each Portfolio's Adviser monitors
the liquidity of the Portfolio's investments, but there can be no guarantee that
an active secondary market will exist.

WHEN-ISSUED AND FORWARD COMMITMENT SECURITIES. In order to assure itself of
being able to obtain securities at prices which the Adviser believes might not
be available at a future time, each Portfolio's Adviser may purchase securities
on a when-issued or delayed delivery basis. When these transactions are
negotiated, the price or yield is fixed at the time the commitment is made, but
delivery and payment for the securities take place at a later date. Securities
so purchased are subject to market price fluctuation and no interest on the
securities accrues to a Portfolio until delivery and payment take place.
Accordingly, the value of the securities on the delivery date may be more or
less than the purchase price. Commitments for when-issued or delayed delivery
transactions will be entered into only when a Portfolio has the intention of
actually acquiring the securities, but the Portfolio may sell the securities
before the settlement date if deemed advisable. Failure by the other party to
deliver a security purchased by a Portfolio may result in a loss or missed
opportunity to make an alternative investment. As a result of entering into
forward commitments, the Funds are exposed to greater potential fluctuations in
the value of their assets and net asset values per share.

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

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

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

4. MANAGEMENT

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

ADMINISTRATION AND DISTRIBUTION

Subject to the supervision of the Board, FAS supervises the overall
management of the Trust, including overseeing the Trust's receipt of services,
advising the Trust and the Trustees on matters concerning the Trust and its
affairs, and providing the Trust with general office facilities and certain
persons to serve as officers. For these services and facilities, FAS receives a
fee at an annual rate of 0.05% of the daily net assets of each Fund. FAS also
serves as administrator of the Portfolios and provides administrative services
for each Portfolio that are similar to those provided to the Funds. For its
administrative services to the Portfolios, FAS receives a fee at an annual rate
of 0.05% of the average daily net assets of each Portfolio. Forum Accounting
Services, LLC ("Forum Accounting") performs portfolio accounting services for
the Funds and Portfolios pursuant to agreements with the Trust and Core Trust
and is paid a separate fee for these services.

FFSI acts as the agent of the Trust in connection with the offering of
shares of the Funds. FFSI is a registered broker-dealer and is a member of the
National Association of Securities Dealers, Inc. In order to facilitate the
distribution of Investor Shares, the Trust has adopted a plan of distribution
(the "Plan") pursuant to Rule 12b-1 under the 1940 Act with respect to each
Fund's Investor Shares. Under the Plan, FFSI receives a fee at an annual rate of
0.15% of the average daily net assets of each Fund attributable to Investor
Shares as compensation for FFSI's services as distributor. From this amount,
FFSI may make payments to various financial institutions, including
broker-dealers, banks and trust companies as compensation for services or
reimbursement of expenses in connection with the distribution of shares or the
provision

11
<PAGE>
of various shareholder services. If the distribution related expenses of FFSI
exceed its Rule 12b-1 fees for any Fund, the Fund will not be obligated to pay
FFSI an additional amount and if FFSI's distribution related expenses are less
than its Rule 12b-1 fees, FFSI will realize a profit.

FAS, FFSI, Forum Advisors, Forum Accounting and the Transfer Agent are
members of the Forum Financial Group of companies and together provide a full
range of services to the investment company and financial services industry. As
of the date of this Prospectus, each of these companies was controlled by John
Y. Keffer, President and Chairman of the Trust, and FAS and FFSI provided
administration services to registered investment companies with assets of
approximately $30 billion.

INVESTMENT ADVISERS

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

For its services, Forum Advisors receives an advisory fee at an annual rate
of 0.05% of Treasury Portfolio's and Municipal Cash Portfolio's average daily
net assets. For its services, Linden receives from each of Treasury Cash
Portfolio, Government Cash Portfolio and Cash Portfolio an advisory fee based
upon the total average daily net assets of those Portfolios ("Total Portfolio
Assets"). Linden's fee is calculated at an annual rate on a cumulative basis as
follows: 0.06% of the first $200 million of Total Portfolio Assets, 0.04% of the
next $300 million of Total Portfolio Assets, and 0.03% of the remaining Total
Portfolio Assets. A Fund's expenses include the Fund's pro rata portion of the
advisory fee paid by the corresponding Portfolio. To the extent Forum Advisors
or Linden has delegated its responsibilities to the other, Forum Advisors or
Linden pays its advisory fee accrued for such period of time to the other.
Currently, it is anticipated that Forum Advisors and Linden will delegate
responsibility for portfolio management to the other investment adviser
infrequently.

SHAREHOLDER SERVICING

TRANSFER AND DIVIDEND DISBURSING AGENT. Shareholder inquiries and
communications concerning the Funds may be directed to the Transfer Agent at the
address and telephone numbers on the first page of this Prospectus. The Transfer
Agent maintains an account for each shareholder of the Funds (unless such
accounts are maintained by sub-transfer agents or processing agents) and
performs other transfer agency and related functions. The Transfer Agent is
authorized to subcontract any or all of its functions to one or more qualified
sub-transfer agents or processing agents, which may be its affiliates, who agree
to comply with the terms of the Transfer Agent's agreement with the Trust. The
Transfer Agent may pay those agents for their services, but no such payment will
increase the Transfer Agent's compensation from the Trust. For its services, the
Transfer Agent is paid a transfer agent fee at an annual rate of 0.25% of the
average daily net assets of each Fund attributable to Investor Shares plus
$12,000 per year for each Fund and certain account and additional class charges
and is reimbursed for certain expenses incurred on behalf of the Funds.

12
<PAGE>
SHAREHOLDER SERVICE AGENTS. The Trust has adopted a shareholder service
plan ("Shareholder Service Plan") which provides that, as compensation for FAS's
service activities with respect to the Investor Shares, the Trust shall pay FAS
a fee at an annual rate of 0.25% of the average daily net assets attributable to
Investor Shares. FAS is authorized to enter into shareholder servicing
agreements pursuant to which a shareholder servicing agent, on behalf of its
customers, performs certain shareholder services not otherwise provided by the
Transfer Agent. As compensation for its services, the shareholder servicing
agent is paid a fee by FAS of up to 0.25% of the average daily net assets of
Investor Shares owned by investors for which the shareholder service agent
maintains a servicing relationship. Certain shareholder servicing agents may be
subtransfer or processing agents.

Among the services provided by shareholder servicing agents are answering
customer inquiries regarding the manner in which purchases, exchanges and
redemptions of shares of the Trust may be effected and other matters pertaining
to the Trust's services; providing necessary personnel and facilities to
establish and maintain shareholder accounts and records; assisting shareholders
in arranging for processing purchase, exchange and redemption transactions;
arranging for the wiring of funds; guaranteeing shareholder signatures in
connection with redemption orders and transfers and changes in
shareholder-designated accounts; integrating periodic statements with other
customer transactions; and providing such other related services as the
shareholder may request.

EXPENSES OF THE FUNDS

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

Each Fund's expenses include the service fees described in this Prospectus,
the fees and expenses of the Board, applicable insurance and bonding expenses
and state and SEC registration fees. Each Fund bears its pro rata portion of the
expenses of the Portfolio in which it invests along with all other investors in
the Portfolio.

5. PURCHASES AND REDEMPTIONS OF SHARES

GENERAL INFORMATION

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

PURCHASES. Fund shares are sold at a price equal to their net asset value
next-determined after receipt of an order in proper form, on each Fund Business
Day. Fund shares are issued immediately after an order for the shares in proper
form, accompanied by funds on deposit at a Federal Reserve Bank ("Federal
Funds"), is accepted by the Transfer Agent. Each Fund's net asset value is
calculated at 4:00 p.m., Eastern Time.

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<PAGE>
Fund shares become entitled to receive distributions on the day the purchase
order is accepted if the order and payment are received by the Transfer Agent as
follows:

<TABLE>
<CAPTION>
Order Payment
Must be Must be
Received by Received by
------------ ------------
<S> <C> <C>
Daily Assets Treasury Fund
and Daily Assets
Tax-Exempt Fund.......... 12:00 p.m., 4:00 p.m.,
Eastern Time Eastern Time
All other Funds........... 2:00 p.m., 4:00 p.m.,
Eastern Time Eastern Time
</TABLE>

If a purchase order is transmitted to the Transfer Agent (or the wire is
received) after the times listed above, the investor will not receive a
distribution on that day. On days that the New York Stock Exchange or Federal
Reserve Bank of San Francisco (Boston in the case of Daily Assets Treasury Fund
and Daily Assets Tax-Exempt Fund) closes early or the Public Securities
Association recommends that the government securities markets close early, the
Trust may advance the time by which the Transfer Agent must receive completed
wire purchase orders and the cut-off times set forth above.

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

REDEMPTIONS. Fund shares may be redeemed without charge at their net asset
value on any Fund Business Day. There is no minimum period of investment and no
restriction on the frequency of redemptions. Fund shares are redeemed as of the
next determination of the Fund's net asset value following receipt by the
Transfer Agent of the redemption order in proper form (and any supporting
documentation which the Transfer Agent may require). Shares redeemed are not
entitled to receive distributions declared on or after the day on which the
redemption becomes effective.

For wire redemption orders received after 12:00 p.m., Eastern time, in the
case of Daily Assets Treasury Fund and Daily Assets Tax-Exempt Fund, and after
2:00 p.m., Eastern Time, in the case of each other Fund, the Transfer Agent will
wire proceeds the next Fund Business Day. On days that the New York Stock
Exchange or Federal Reserve Bank of San Francisco (Boston in the case of Daily
Assets Treasury Fund and Daily Assets Tax-Exempt Fund) closes early or the
Public Securities Association recommends that the government securities markets
close early, the Trust may advance the time by which the Transfer Agent must
receive completed wire redemption orders.

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

Proceeds of redemptions normally are paid in cash. However, payments may be
made wholly or partially in portfolio securities if the Board determines that
payment in cash would be detrimental to the best interests of the Fund.

14
<PAGE>
losses due to unauthorized or fraudulent telephone instructions. Shareholders
should verify the accuracy of telephone instructions immediately upon receipt of
confirmation statements. During times of drastic economic or market changes,
telephone redemption and exchange privileges may be difficult to implement. In
the event that a shareholder is unable to reach the Transfer Agent by telephone,
requests may be mailed or hand-delivered to the Transfer Agent.

Due to the cost to the Trust of maintaining smaller accounts, the Trust
reserves the right to redeem, upon not less than 60 days' written notice, all
shares in any Fund account with an aggregate net asset value of less than
$5,000.

PURCHASE AND REDEMPTION PROCEDURES

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

INITIAL PURCHASE OF SHARES

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

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

For individual or Uniform Gift to Minors Act accounts, the check or money
order used to purchase shares of a Fund must be made payable to "Forum Funds" or
to one or more owners of that account and endorsed to Forum Funds. For
corporation, partnership, trust, 401(k) plan or other non-individual type
accounts, the check used to purchase shares of a Fund must be made payable on
its face to "Forum Funds." No other method of payment by check will be accepted.
All purchases must be paid in U.S. dollars; checks must be drawn on U.S. banks.
Payment by Traveler's Checks is prohibited.

BY BANK WIRE. To make an initial investment in a Fund using the wire system
for transmittal of money among banks, an investor should first telephone the
Trust at 800-94FORUM (800-943-6786) or (207) 879-0001 to obtain an account
number. The investor should then instruct a bank to wire the investor's money
immediately to:

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

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

THROUGH FINANCIAL INSTITUTIONS. Shares may be purchased and redeemed
through certain broker-dealers, banks or other financial institutions
("Processing Organizations"), including affiliates of the Transfer Agent.
Processing Organizations may charge their customers a fee for their services and
are responsible for promptly transmitting purchase, redemption and other
requests to a Fund.

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<PAGE>
The Trust is not responsible for the failure of any Processing Organization to
promptly forward these requests.

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

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

SUBSEQUENT PURCHASES OF SHARES

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

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

REDEMPTION OF SHARES

Shareholders who wish to redeem shares by telephone or receive redemption
proceeds by bank wire must elect these options by properly completing the
appropriate sections of their account application. These privileges may not be
available until several days after a shareholder's application is received.
Shares for which certificates have been issued may not be redeemed by telephone.

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

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

BY BANK WIRE. For redemptions of more than $5,000, a shareholder who has
elected wire redemption privileges may request the Fund to transmit the
redemption proceeds by Federal

16
<PAGE>
Funds wire to a bank account designated on the shareholder's account
application. To request bank wire redemptions by telephone, the shareholder also
must have elected the telephone redemption privilege. Redemption proceeds are
transmitted by wire on the day the redemption request in proper form is received
by the Transfer Agent.

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

OTHER REDEMPTION MATTERS. To protect shareholders and the Funds against
fraud, signatures on certain requests must have a signature guarantee. Requests
must be made in writing and include a signature guarantee for any of the
following transactions: (1) any endorsement on a stock certificate; (2) written
instruction to redeem Shares whose value exceeds $50,000; (3) instructions to
change a shareholder's record name; (4) redemption in an account in which the
account address or account registration has changed within the last 30 days; (5)
the proceeds are not being sent to the address of record, preauthorized bank
account, or preauthorized brokerage firm account; (6) proceeds are to be paid to
someone other than the registered owners or to an account with a different
registration; (7) change of automatic investment or redemption, dividend
election, telephone redemption or exchange option election or any other option
election in connection with the shareholder's account.

Signature guarantees may be provided by any eligible institution acceptable
to the Transfer Agent, including a bank, a broker, a dealer, a national
securities exchange, a credit union, or a savings association that is authorized
to guarantee signatures. Whenever a signature guarantee is required, the
signature of each person required to sign for the account must be guaranteed. A
notarized signature is not sufficient.

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

EXCHANGES

Shareholders may exchange their shares for shares of any other fund of the
Trust or any other mutual fund administered by FAS that participates with the
Funds in the exchange program (currently, Sound Shore Fund, Inc. and CRM Small
Cap Value Fund). Exchanges are subject to the fees charged by, and the
restrictions listed in the prospectus for, the fund into which a shareholder is
exchanging, including minimum investment requirements. The minimum amount
required to open an account in a Fund through an exchange from another fund
(other than the Funds) is $2,500. The Funds do not charge for exchanges, and
there is currently no limit on the number of exchanges a shareholder may make,
but each Fund reserves the right to limit excessive exchanges by any
shareholder. See "Additional Purchase and Redemption Information" in the SAI.

Exchanges may only be made between accounts registered in the same name. A
completed account application must be submitted to open a new account in a Fund
through an exchange if the

17
<PAGE>
shareholder requests any shareholder privilege not associated with the new
account. Shareholders may only exchange into a fund if that fund's shares may
legally be sold in the shareholder's state of residence.

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

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

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

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

INDIVIDUAL RETIREMENT ACCOUNTS

Each Fund (other than Daily Assets Tax-Exempt Fund) may be a suitable
investment vehicle for part or all of the assets held in individual retirement
accounts ("IRAs"). The minimum initial investment for IRAs is $2,000, and the
minimum subsequent investment is $500. There are limits on the amount of
tax-deductible contributions individuals may make into the various types of
IRAs. Individuals should consult their tax advisers with respect to their
specific tax situations as well as with respect to state and local taxes and
read any materials supplied by the Funds concerning Fund sponsored IRAs.

6. DISTRIBUTIONS AND TAX MATTERS

DISTRIBUTIONS

Distributions of each Fund's net investment income are declared daily and
paid monthly following the close of the last Fund Business Day of the month.
Each type of net capital gain realized by a Fund, if any, will be distributed
annually. Shareholders may choose to have all distributions reinvested in
additional shares of the Fund or received in cash. In addition, shareholders may
have all distributions of net capital gain reinvested in additional shares of
the Fund and distributions of net investment income paid in cash. All
distributions are treated in the same manner for Federal income tax purposes
whether received in cash or reinvested in shares of the Fund.

All distributions will be reinvested at the Fund's net asset value as of the
payment date of the

18
<PAGE>
dividend. All distributions are reinvested unless another option is selected.
All distributions not reinvested will be paid to the shareholder in cash and may
be paid more than seven days following the date on which distribution would
otherwise be reinvested.

TAXES

Tax Status of the Funds. Each Fund intends to qualify or continue to qualify
to be taxed as a "regulated investment company" under the Internal Revenue Code
of 1986, as amended. Accordingly, no Fund will be liable for Federal income
taxes on the net investment income and capital gain distributed to its
shareholders. Because each Fund intends to distribute all of its net investment
income and net capital gain each year, the Funds should also avoid Federal
excise taxes.

Distributions paid by each Fund out of its net investment income (including
realized net short-term capital gain) are taxable to the shareholders of the
Fund as ordinary income. Two different tax rates apply to net capital gain -
that is, the excess of net gain from capital assets held for more than one year
over net losses from capital assets held for not more than one year. One rate
(generally 28%) applies to net gain on capital assets held for more than one
year but not more than 18 months and a second rate (generally 20%) applies to
the balance of such net capital gains. Distributions of net capital gain will be
taxable to shareholders as such, regardless of how long a shareholder has held
shares in the Fund.

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

DAILY ASSETS TAX-EXEMPT FUND. Distributions paid by Daily Assets Tax-Exempt
Fund out of federally tax-exempt interest income earned by the Fund
("exempt-interest dividends") generally will not be subject to federal income
tax in the hands of the Fund's shareholders. Substantially all of the
distributions paid by the Fund are anticipated to be exempt-interest dividends.
Persons who are "substantial users" or "related persons" thereof of facilities
financed by private activity securities held by the Fund, however, may be
subject to federal income tax on their pro rata share of the interest income
from those securities and should consult their tax advisers before purchasing
Shares. Exempt-interest dividends are included in the "adjusted current
earnings" of corporations for purposes of the AMT.

Interest on indebtedness incurred by shareholders to purchase or carry
shares of the Fund generally is not deductible for federal income tax purposes.
Under rules for determining when borrowed funds are used for purchasing or
carrying particular assets, shares of the Fund may be considered to have been
purchased or carried with borrowed funds even though those funds are not
directly linked to the shares.

The income from the Municipal Cash Portfolio's investments may be subject to
the AMT. Interest on certain municipal securities issued to finance "private
activities" ("private activity securities") is a "tax preference item" for
purposes of the AMT applicable to certain individuals and corporations even
though such interest will continue to be fully tax-exempt for regular federal
income tax purposes. The Portfolio may purchase private activity securities, the
interest on which may constitute a "tax preference item" for purposes of the
AMT.

19
<PAGE>
local level. Many states (by statute, judicial decision or administrative
action) do not tax dividends from a regulated investment company that are
attributable to interest on obligations of the U.S. Treasury and certain U.S.
Government agencies and instrumentalities if the interest on those obligations
would not be taxable to a shareholder that held the obligation directly. As a
result, substantially all distributions paid by the Fund to shareholders
residing in certain states will be exempt or excluded from state income taxes. A
portion of the distributions paid by the other Funds to shareholders may be
exempt or excluded from state income taxes, but these Funds are not managed to
provide any specific amount of state tax-free income to shareholders.

The exemption for federal income tax purposes of distributions derived from
interest on municipal securities does not necessarily result in an exemption
under the income or other tax laws of any state or local taxing authority.
Shareholders of Daily Assets Tax-Exempt Fund may be exempt from state and local
taxes on distributions of tax-exempt interest income derived from obligations of
the state and/or municipalities of the state in which they reside but may be
subject to tax on income derived from the municipal securities of other
jurisdictions.

Shareholders are advised to consult with their tax advisers concerning the
application of state and local taxes to investments in a Fund which may differ
from the federal income tax consequences described above.

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

Each Fund must include a portion of the original issue discount of
zero-coupon securities, if any, as income even though these securities do not
pay any interest until maturity. Because each Fund distributes all of its net
investment income, a Fund may have to sell portfolio securities to distribute
imputed income, which may occur at a time when the investment adviser would not
have chosen to sell such securities and which may result in a taxable gain or
loss.

Shortly after the close of each year, a statement is sent to each
shareholder of the Funds advising the shareholder of the portions of total
distributions paid to the shareholder that is (i) derived from each type of
obligation in which a Fund has invested, (ii) derived from the obligations of
issuers in the various states and (iii) exempt from federal income taxes. These
portions are determined for the entire year and on a monthly basis and, thus,
are an annual or monthly average, rather than a day-by-day determination for
each shareholder.

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

7. OTHER INFORMATION

PERFORMANCE INFORMATION

Investor Shares' performance may be advertised. All performance information
is based on historical results, is not intended to indicate future performance
and, unless otherwise indicated, is net of all expenses. The Funds may advertise
yield, which shows the rate of income a Fund has earned on its investments as a
percentage of the Fund's share price. To calculate yield, a Fund takes the
interest income it earned from its portfolio of investments for a specified
period (net of expenses), divides it by the average number of shares entitled

20
<PAGE>
to receive distributions, and expresses the result as an annualized percentage
rate based on the Fund's share price at the end of the period. A Fund's
compounded annualized yield assumes the reinvestment of distributions paid by
the Fund, and, therefore will be somewhat higher than the annualized yield for
the same period. A Fund may also quote tax-equivalent yields, which show the
taxable yields a shareholder would have to earn to equal the Fund's tax-free
yield, after taxes. A tax-equivalent yield is calculated by dividing the Fund's
tax-free yield by one minus a stated federal, state or combined federal and
state tax rate. Each class' performance will vary.

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

BANKING LAW MATTERS

Banking laws and regulations generally permit a bank or bank affiliate to
purchase shares of an investment company as agent for and upon the order of a
customer and permit a bank or bank affiliate to serve as a Processing
Organization or perform sub-transfer agent or similar services for the Trust and
its shareholders. If a bank or bank affiliate were prohibited from performing
all or a part of the foregoing services, its shareholder customers would be
permitted to remain shareholders of the Trust and alternative means for
continuing to service them would be sought.

DETERMINATION OF NET ASSET VALUE

The Trust determines the net asset value per share of each Fund as of 4:00
p.m., Eastern Time, on each Fund Business Day by dividing the value of the
Fund's net assets (the value of its interest in the Portfolio and other assets
less its liabilities) by the number of shares outstanding at the time the
determination is made. In order to more easily maintain a stable net asset value
per share, each Portfolio's portfolio securities are valued at their amortized
cost (acquisition cost adjusted for amortization of premium or accretion of
discount) in accordance with Rule 2a-7. The Portfolios will only value their
portfolio securities using this method if the Core Trust Board believes that it
fairly reflects the market-based net asset value per share. The Portfolios'
other assets, if any, are valued at fair value by or under the direction of the
Core Trust Board.

THE TRUST AND ITS SHARES

The Trust is registered with the SEC as an open-end, management investment
company and was organized as a business trust under the laws of the State of
Delaware on August 29, 1995. On January 5, 1996 the Trust succeeded to the
assets and liabilities of Forum Funds, Inc., which was incorporated in 1980. The
Board has the authority to issue an unlimited number of shares of beneficial
interest of separate series with no par value per share and to create classes of
shares within each series. There are currently sixteen series of the Trust.

21
<PAGE>
require the Trust to hold annual meetings of shareholders, and it is anticipated
that shareholder meetings will be held only when specifically required by
Federal or state law. Shareholders (and Trustees) have available certain
procedures for the removal of Trustees. There are no conversion or preemptive
rights in connection with shares of the Trust. All shares when issued in
accordance with the terms of the offering will be fully paid and nonassessable.
Shares are redeemable at net asset value, at the option of the shareholders. A
shareholder in a fund is entitled to the shareholder's pro rata share of all
distributions arising from that fund's assets and, upon redeeming shares, will
receive the portion of the fund's net assets represented by the redeemed shares.

From time to time certain shareholders may own a large percentage of shares
of a Fund. Accordingly, those shareholders may be able to greatly affect (if not
determine) the outcome of any shareholder vote. As of the date hereof, due to
initial investment in Daily Assets Treasury Obligations Fund, Daily Assets
Government Fund and Daily Assets Tax-Exempt Fund, prior to the public offering
of shares, FAS may be deemed to control those Funds.

FUND STRUCTURE

OTHER CLASSES OF SHARES. In addition to Investor Shares, each Fund may
create and issue shares of other classes of securities. Each Fund currently has
two other classes of shares authorized, Institutional Shares and Institutional
Service Shares. Institutional Shares have an investment minimum of $1,000,000.
Institutional Service Shares are offered solely through banks, trust companies
and certain other financial institutions, and their affiliates and
correspondents, for investment of their funds or funds for which they act in a
fiduciary, agency or custodial capacity. Institutional Shares and Institutional
Service Shares incur less expenses than Investor Shares. See, "Additional
Information" below. Except for certain differences, each share of each class
represents an undivided, proportionate interest in a Fund. Each share of each
Fund is entitled to participate equally in distributions and the proceeds of any
liquidation of that Fund except that, due to the differing expenses borne by the
various classes, the amount of distributions will differ among the classes.

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

THE PORTFOLIOS. A Fund's investment in a Portfolio is in the form of a
non-transferable beneficial interest. As of the date of this Prospectus, Daily
Assets Treasury Fund and Daily Assets Tax-Exempt Fund are the only investors
(other than FAS or its affiliates) that have invested in Treasury Portfolio and
Municipal Cash Portfolio, respectively. Each of the other Portfolios has another
investor besides the Funds (and FAS and its affiliates). All investors in a
Portfolio invest on the same terms and conditions as the Funds and will pay a
proportionate share of the Portfolio's expenses. The Portfolios normally will
not hold meetings of investors except as required by the 1940 Act. Each investor
in a Portfolio is entitled to vote in proportion to the relative value of its
interest in the Portfolio. On most issues subject to a vote of investors, as
required by the 1940 Act and other applicable law, a Fund will solicit proxies
from shareholders of the Fund and will vote its interest in a Portfolio in
proportion to the votes cast by its shareholders.

22
<PAGE>
There can be no assurance that any issue that receives a majority of the votes
cast by a Fund's shareholders will receive a majority of votes cast by all
investors in the Portfolio.

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

ADDITIONAL INFORMATION. Each class of a Fund (and any other investment
company that invests in a Portfolio) may have a different expense ratio and
different sales charges, including distribution fees, and each class' (and
investment company's) performance will be affected by its expenses and sales
charges. For more information on any other class of shares of the Funds or
concerning any other investment companies that invest in a Portfolio, investors
may contact FFSI at 207-879-1900. If an investor invests through a financial
institution, the investor may also contact their financial institution to obtain
information about the other classes or any other investment company investing in
a Portfolio.

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

23
<PAGE>

FORUM FUNDS
INVESTOR SHARES
<TABLE>
<CAPTION>

<S><C>
[LOGO] ACCOUNT APPLICATION ACCOUNT NUMBER ______________________
- ----------------------------------------------------------------------------------------------------------------------------------
1. INITIAL INVESTMENT ($10,000 minimum)
- ---------------------------------------------------------------------------------------------------------------------------------
/ / Check enclosed for $______________________________ / / Daily Assets Treasury Fund
/ / I have telephoned the transfer agent to make wire / / Daily Assets Treasury Obligation Fund
arrangements (see instructions on reverse). / / Daily Assets Government Fund
/ / My initial investment wire is $___________________ / / Daily Assets Cash Fund
/ / Daily Assets Tax-Exempt Fund
- ---------------------------------------------------------------------------------------------------------------------------------
2. REGISTRATION (please print)
- ---------------------------------------------------------------------------------------------------------------------------------
/ / INDIVIDUALS

------------------------------------------------------------- -----------------------------------------------------
Investor's Name Social Security Number

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

/ / GIFTS TO MINORS

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

under the ____________________ Uniform Gifts to Minors Act ______________________ ___________________________________
State Minor's Date of Birth Minor's Social Security Number

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

_____________________________________________________________ ______________________________________________________
Name of Entity (indicate type of business, e.g., partnership) Taxpayer Identification Number

/ / TRUSTS (including corporate pension plans)

__________________________________________________ as trustee(s) for _________________________________________________
Trustee(s) Name(s) Name of Trust

___________________________________________________ __________________________________________________________
Full date of trust instrument Taxpayer Identification Number

- ---------------------------------------------------------------------------------------------------------------------------------
3. ADDRESS
- ---------------------------------------------------------------------------------------------------------------------------------
CITIZENSHIP: / / U.S. / / RESIDENT ALIEN / / NON-RESIDENT ALIEN ________________________________________________
Country

_______________________________________________________________________________________________________________________
Number and Street

_______________________________________________________________________________________________________________________
City State Zip Code

_____________________________________________ __________________________________ _________________________________
Contact Person Telephone (Day) Telephone (Evening)

- ---------------------------------------------------------------------------------------------------------------------------------
4. TELEPHONE AND WIRE REDEMPTION PRIVILEGES (subject to the terms set forth in the Prospectus)
- ---------------------------------------------------------------------------------------------------------------------------------
/ / Telephone Redemption/Exchange Privilege
The Fund and Forum Financial Corp. ("Forum") are hereby authorized to honor verbal instructions for the (i)
redemption of any and all Fund shares held in the undersigned's account provided that proceeds are mailed to the
shareholders address of record or to the bank account indicated below and (ii) exchange of Fund shares into
another account. The Fund and Forum are authorized to honor any verbal instructions for purposes of redemption
or exchange purporting to be from the shareholder and believed by the Fund or Forum to be genuine, and neither
the Fund nor Forum shall be liable for any loss, cost or expense for acting upon such instructions.
/ / Wire Redemption Privilege
The Fund and Forum are authorized to honor written instructions with signature guaranteed or, if Telephone Redemption
Privileges are elected, verbal instructions, to redeem any and all Fund shares held in the undersigned's account provided
that the proceeds are transmitted to the bank account indicated below. Complete the following if either privilege is
elected:

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

____________________________________________________________ _________________________________________
Address and Branch of Bank ABA #
</TABLE>

<PAGE>

ACCOUNT APPLICATION (CONTINUED)
- -------------------------------------------------------------------------------
5. DIVIDEND AND CAPITAL GAIN DISTRIBUTION PAYMENT OPTIONS (check one)
- -------------------------------------------------------------------------------
/ / Full Reinvestment: Reinvest all income dividends and capital gain
distributions when paid.
/ / Capital Gain Reinvestment: Reinvest capital gain distributions when
paid; pay income dividends in cash.
/ / Cash: Pay all income dividends and capital gain distributions in cash.

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

- -------------------------------------------------------------------------------
6. DUPLICATE STATEMENT ADDRESS (optional)
- -------------------------------------------------------------------------------

___________________________________________________________________________
Company Name Contact Person

___________________________________________________________________________
Number and Street

___________________________________________________________________________
City State Zip Code

___________________________________ ______________________________________
Telephone (Day) Telephone (Evening)

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

___________________________________________________________________________
Firm Name NSCC Code

___________________________________________________________________________
Representative's Name Representative's #

___________________________________________________________________________
Branch Address Branch Code

___________________________________________________________________________
Dealer's Authorized Signature Source of Business Code

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

______________________________________________________________________
Signature of Investor/Custodian Trustee Date

______________________________________________________________________
Signature of Joint Investor/Co-Trustee Date

______________________________________________________________________
Corporate Officer (Name) Title

______________________________________________________________________
Signature of Corporate Officer Title

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

/ / That the number shown on this form is my correct taxpayer
identification number and that I am not subject to backup
withholding because (a) I am exempt from backup withholding,
(b) I have not been notified by the Internal Revenue Service
("IRS") that I am subject to backup withholding as a result of
a failure to report all interest or dividends, or (c) the IRS
has notified me that I am no longer subject to backup withholding.
/ / That I have not provided a taxpayer identification number because I
have not been issued a number, but I have applied for one or will do
so in the near future. I understand that if I do not provide my number
to the Fund within 60 days, the Fund will be required to begin backup
withholding.

______________________________________________________________________
Signature of Investor/Custodian/Trustee Date

______________________________________________________________________
Signature of Joint Investor/Co-Trustee Date

______________________________________________________________________
Corporate Officer (Name) Title

______________________________________________________________________
Signature of Corporate Officer Title

- -------------------------------------------------------------------------------
9. INITIAL INVESTMENT AND MAILING INSTRUCTIONS
- -------------------------------------------------------------------------------

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

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

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

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

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

[LOGO]

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

[GRAPHIC]

<PAGE>

[GRAPHIC]

PROSPECTUS

INSTITUTIONAL
SHARES

DAILY ASSETS
TREASURY FUND

DAILY ASSETS
TREASURY
OBLIGATIONS FUND

DAILY ASSETS
GOVERNMENT FUND

DAILY ASSETS
CASH FUND

DAILY ASSETS
TAX-EXEMPT FUND

FORUM
FUNDS

NOVEMBER 17, 1997

<PAGE>
FORUM FUNDS

DAILY ASSETS TREASURY FUND
DAILY ASSETS TREASURY OBLIGATIONS FUND
DAILY ASSETS GOVERNMENT FUND
DAILY ASSETS CASH FUND
DAILY ASSETS TAX-EXEMPT FUND

PROSPECTUS

November 17, 1997
- --------------------------------------------------------------------------------

THIS PROSPECTUS OFFERS INSTITUTIONAL SHARES OF DAILY ASSETS TREASURY FUND, DAILY
ASSETS TREASURY OBLIGATIONS FUND, DAILY ASSETS GOVERNMENT FUND, DAILY ASSETS
CASH FUND AND DAILY ASSETS TAX-EXEMPT FUND (EACH A "FUND"). EACH FUND IS A
DIVERSIFIED NO-LOAD, MONEY MARKET PORTFOLIO OF FORUM FUNDS (THE "TRUST"), A
REGISTERED OPEN-END, MANAGEMENT INVESTMENT COMPANY. EACH FUND SEEKS TO PROVIDE
ITS SHAREHOLDERS WITH HIGH CURRENT INCOME (WHICH, IN THE CASE OF DAILY ASSETS
TAX-EXEMPT FUND, IS EXEMPT FROM FEDERAL INCOME TAXES) TO THE EXTENT CONSISTENT
WITH THE PRESERVATION OF CAPITAL AND THE MAINTENANCE OF LIQUIDITY.

DAILY ASSETS TREASURY OBLIGATIONS FUND invests substantially all of its
assets in obligations of the U.S. Treasury and in repurchase agreements
backed by these obligations.

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

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

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<C> <S> <C>
1. Prospectus Summary.......................... 2
2. Financial Highlights........................ 4
3. Investment Objectives and Policies.......... 5
4. Management.................................. 11

<CAPTION>
Page
<C> <S> <C>
5. Purchases and Redemptions of Shares......... 12
6. Distributions and Tax Matters............... 17
7. Other Information........................... 19
</TABLE>

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

HIGHLIGHTS OF THE FUNDS

This prospectus offers shares of the Institutional class ("Institutional
Shares") of each of the Funds. The Funds operate in accordance with the
provisions of Rule 2a-7 under the Investment Company Act of 1940 (the "1940
Act"). Each Fund invests all of its investable assets in a separate portfolio
(each a "Portfolio") of Core Trust (Delaware), an open-end, management
investment company ("Core Trust") as follows:

<TABLE>
<S> <C>
Daily Assets Treasury Fund Treasury Portfolio
Daily Assets Treasury
Obligations Fund Treasury Cash Portfolio
Daily Assets Government
Fund Government Cash Portfolio
Daily Assets Cash Fund Cash Portfolio
Daily Assets Tax-Exempt
Fund Municipal Cash Portfolio
</TABLE>

Accordingly, the investment experience of each Fund will correspond directly
with the investment experience of its corresponding Portfolio. See "Other
Information - Fund Structure." Each Fund currently offers three separate classes
of shares: Institutional Shares, Institutional Service Shares and Investor
Shares. Institutional Shares are sold through this Prospectus. Institutional
Service Shares and Investor Shares are each offered by a separate prospectus.
See "Other Information - Fund Structure - Other Classes of Shares."

It is anticipated that, as of January 1, 1998, Forum Advisors will acquire
Linden and reorganize into a new company named Forum Investment Advisors, LLC.
The acquisition is subject to a vote of the shareholders of Daily Assets Cash
Fund and of the other investors in the Portfolio which Linden currently advises.
No change in advisory staff, portfolio managers, or advisory fees, or any other
material change is expected as a result of these transactions.

PURCHASES AND REDEMPTIONS. The minimum initial investment in Institutional
Shares is $1,000,000. Institutional Shares may be purchased and redeemed Monday
through Friday, between 9:00 a.m. and 6:00 p.m., Eastern Time, except on Federal
holidays and days that the Federal Reserve Bank of San Francisco (Boston in the
case of Daily Assets Treasury Fund and Daily Assets Tax-Exempt Fund) is closed
("Fund Business Days"). To be eligible to receive that day's income, purchase
orders must be received by the Transfer Agent in good order no later than 2:00
p.m., Eastern Time (noon in the case of Daily Assets Treasury Fund and Daily
Assets Tax-Exempt Fund). Shareholders may have redemption proceeds over $5,000
transferred by bank wire to a designated bank account. To be able to receive
redemption proceeds by wire on the day of the redemption, redemption orders must
be received by the Transfer Agent in good order no later than 2:00 p.m., Eastern
Time (noon in the case of Daily Assets Treasury Fund and Daily Assets Tax-Exempt
Fund). All times may be changed without notice by Fund management due to market
activities. See "Purchase and Redemption of Shares."

EXCHANGES. Shareholders of a Fund may exchange Institutional Shares without
charge for Institutional Shares of the other Funds. See "Purchases and
Redemptions of Shares - Exchanges."

DISTRIBUTIONS. Distributions of net investment income are declared daily
and paid monthly by each Fund and are automatically reinvested in

2
<PAGE>
additional Fund shares unless the shareholder has requested payment in cash. See
"Distributions and Tax Matters."

EXPENSES OF INVESTING IN THE FUNDS

The purpose of the following table is to assist investors in understanding
the various expenses that an investor in Institutional Shares will bear directly
or indirectly. There are no transaction expenses associated with purchases,
redemptions or exchanges of Fund shares.

ANNUAL FUND OPERATING EXPENSES (1)

(as a percentage of average net assets)

<TABLE>
<CAPTION>
Daily
Daily Assets Daily
Assets Treasury Assets Daily Daily
Treasury Obligations Government Assets Assets Tax-
Fund Fund Cash Fund Cash Fund Exempt Fund
----------- ----------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C>
Management Fees(2)...... 0.15% 0.14% 0.14% 0.14% 0.15%
Other Expenses(3)
(after expense
reimbursements)........ 0.05% 0.06% 0.06% 0.06% 0.05%
----------- ----------- ----------- --------- -----------
Total Operating
Expenses............... 0.20% 0.20% 0.20% 0.20% 0.20%
</TABLE>

(1) For a further description of the various
expenses incurred in the operation of the Funds and the Portfolios, see
"Management." The amount of fees and expenses for each Fund is based on
estimated annualized expenses for the Funds' fiscal year ending August 31, 1998.
Each Fund's expenses include the Fund's pro rata portion of all expenses of its
corresponding Portfolio, which are borne indirectly by Fund shareholders.

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

(3) Absent estimated reimbursements by
Linden, Forum Advisors and its affiliates, Other Expenses and Total Fund
Operating Expenses would be: 0.17 % and 0.32%, respectively, for Daily Assets
Treasury Fund; 0.15% and 0.29%, respectively, for Daily Assets Treasury
Obligations Fund; 0.17% and 0.31%, respectively, for Daily Assets Government
Fund; 0.19% and 0.33%, respectively, for Daily Assets Cash Fund; 0.19% and
0.34%, respectively, for Daily Assets Tax-Exempt Fund. Expense reimbursements
are voluntary and may be reduced or eliminated at any time.

EXAMPLE

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

<TABLE>
<CAPTION>
One Three Five Ten
Year Years Years Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Each Fund................ $2 $ 6 $11 $26
</TABLE>

3
<PAGE>
2. FINANCIAL HIGHLIGHTS

As of the date hereof, Institutional Shares were not offered. The
following information represents selected data for a single outstanding
Institutional Service Share of Daily Assets Treasury Fund and of Daily
Assets Cash Fund. Those classes were the first offered by the respective
Funds and, accordingly, represent data since each Fund's inception.
Information for the period ended August 31, 1997, was audited by KPMG
Peat Marwick LLP, independent auditors. Information for prior periods
was audited by other independent auditors. The financial statements for
Daily Assets Treasury Fund and Daily Assets Cash Fund and independent
auditors' report thereon for the fiscal year ended August 31, 1997, are
incorporated by reference into the SAI and may be obtained from the
Trust without charge. As of the date hereof, Daily Assets Treasury
Obligations Fund, Daily Assets Government Fund, Daily Assets Tax-Exempt
Fund, as well as Municpal Cash Portfolio had not commenced operations.

As of August 31, 1997, Treasury Portfolio, Treasury Cash Portfolio,
Government Cash Portfolio and Cash Portfolio had net assets of
$44,321,412; $71,102,520; $476,768,745 and $259,491,011, respectively.
<TABLE>
<CAPTION>
RATIOS TO AVERAGE
NET ASSETS
DISTRIBUTIONS --------------------------
BEGINNING NET FROM NET ENDING NET NET
ASSET VALUE NET INVESTMENT INVESTMENT ASSET VALUE NET INVESTMENT
PER SHARE INCOME INCOME PER SHARE EXPENSES INCOME
------------- --------------- --------------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
DAILY ASSETS TREASURY FUND
INSTITUTIONAL SERVICE SHARES
April 1, 1997 to August 31,
1997........................ $ 1.00 0.02 (0.02) $ 1.00 0.50%(2) 4.76%(2)
Year Ended March 31, 1997.... 1.00 0.05 (0.05) 1.00 0.50% 4.70%
Year Ended March 31, 1996.... 1.00 0.05 (0.05) 1.00 0.50% 5.01%
Year Ended March 31, 1995.... 1.00 0.04 (0.04) 1.00 0.37% 4.45%
Year Ended March 31, 1994.... 1.00 0.03 (0.03) 1.00 0.33% 2.82%
July 1, 1992 to March 31,
1993........................ 1.00 0.02 (0.02) 1.00 0.22%(2) 2.92%(2)
DAILY ASSETS CASH FUND
INSTITUTIONAL SERVICE SHARES
October 1, 1996 to
August 31, 1997............. 1.00 0.05 (0.05) 1.00 0.52%(2) 5.06%(2)

<CAPTION>
RATIO
NET ASSETS TO AVERAGE
AT END OF NET ASSETS
PERIOD -------------
TOTAL (000'S GROSS
RETURN OMITTED) EXPENSES(1)
----------- ----------- -------------
<S> <C> <C> <C>
DAILY ASSETS TREASURY FUND
INSTITUTIONAL SERVICE SHARES
April 1, 1997 to August 31,
1997........................ 2.01%(3) $ 44,116 0.95%(2)
Year Ended March 31, 1997.... 4.80% 43,975 0.99%
Year Ended March 31, 1996.... 5.18% 43,103 1.06%
Year Ended March 31, 1995.... 4.45% 36,329 1.10%
Year Ended March 31, 1994.... 2.83% 26,505 1.17%
July 1, 1992 to March 31,
1993........................ 3.13%(2) 4,687 2.43%(2)
DAILY ASSETS CASH FUND
INSTITUTIONAL SERVICE SHARES
October 1, 1996 to
August 31, 1997............. 4.70%(3) $ 12,076 1.22%(2)
</TABLE>

(2) Annualized.

(3) Not Annualized.

4
<PAGE>
3. INVESTMENT OBJECTIVES AND POLICIES

INVESTMENT OBJECTIVE

THERE CAN BE NO ASSURANCE THAT ANY FUND OR PORTFOLIO WILL ACHIEVE ITS
INVESTMENT OBJECTIVE OR MAINTAIN A STABLE NET ASSET VALUE.

Each Fund currently seeks to achieve its investment objective by investing
all of its investable assets in its corresponding Portfolio, which has the same
investment objective and substantially similar investment policies. Therefore,
although the following discusses the investment policies of the Portfolios (and
the responsibilities of Core Trust's board of trustees (the "Core Trust
Board")), it applies equally to the Funds (and the Trust's board of trustees
(the "Board")).

INVESTMENT POLICIES

Yields on money market securities are dependent on a variety of factors,
including the general conditions of the money markets and the fixed income
markets in general, the size of a particular offering, the maturity of the
obligation and the rating of the issue. A Fund's yield will tend to fluctuate
inversely with prevailing market interest rates. For instance, in periods of
falling market interest rates, yields will tend to be somewhat higher. Although
each Portfolio only invests in high quality money market instruments, an
investment in a Fund is subject to risk even if all securities in the
Portfolio's portfolio are paid in full at maturity. All money market
instruments, including U.S. Government Securities and municipal securities, can
change in value when there is a change in interest rates, the issuer's actual or
perceived

5
<PAGE>
creditworthiness or the issuer's ability to meet its obligations. The
achievement of a Fund's investment objective is dependent in part on the
continuing ability of the issuers of the securities in which the Portfolio
invests to meet their obligations for the payment of principal and interest when
due.

DAILY ASSETS TREASURY FUND

DAILY ASSETS TREASURY OBLIGATIONS FUND

Treasury Cash Portfolio seeks to attain its investment objective by
investing substantially all of its assets in Treasury Securities and in
repurchase agreements backed by Treasury Securities.

DAILY ASSETS GOVERNMENT FUND

DAILY ASSETS CASH FUND

6
<PAGE>
"Investment Objectives and Policies - Daily Assets Government Fund") and (iii)
corporate debt obligations of domestic issuers.

DAILY ASSETS TAX-EXEMPT FUND

THE SHORT-TERM MUNICIPAL SECURITIES MARKET. It is anticipated that a
substantial amount of the municipal securities held by the Portfolio will be
supported by credit and liquidity enhancements, such as letters of credit (which
are not covered by federal deposit insurance) or put or demand features of third
party financial institutions, generally domestic and foreign banks. Accordingly,
the credit quality and liquidity of the Portfolio will be dependent in part upon
the credit quality of the banks supporting the Portfolio's investments. This
will result in exposure to risks pertaining to the banking industry, including
the foreign banking industry. These risks include a sustained increase in
interest rates, which can adversely affect the availability and cost of a bank's
lending activities; exposure to credit losses during times of economic decline;
concentration of loan portfolios in certain industries; regulatory developments;
and competition among financial institutions. Brokerage firms

7
<PAGE>
and insurance companies also provide certain liquidity and credit support. The
Portfolio's policy is to purchase municipal securities with third party credit
or liquidity support only after the Adviser has considered the creditworthiness
of the financial institution providing the support and believes that the
security presents minimal credit risk.

MUNICIPAL BONDS. Municipal bonds are long term fixed-income securities.
"General obligation" bonds are secured by a municipality's pledge of its full
faith, credit and taxing power for the payment of principal and interest.
"Revenue" bonds are usually payable only from the revenues derived from a
particular facility or class of facilities or, in some cases, from the proceeds
of a special excise or other tax, but not from general tax revenues. Under

8
<PAGE>
a "moral obligation" bond (which is normally issued by special purpose public
authorities), if the issuer is unable to meet its obligations under the bonds
from current revenues, it may draw on a reserve fund that is backed by the moral
commitment (but not the legal obligation) of the state or municipality that
created the issuer. The Portfolio may invest in industrial development bonds,
which in most cases are revenue bonds. The payment of the principal and interest
on these bonds is dependent solely on the ability of an initial or subsequent
user of the facilities financed by the bonds to meet its financial obligations
and the pledge, if any, of real and personal property so financed as security
for such payment.

ADDITIONAL INVESTMENT POLICIES

Each Fund's and each Portfolio's investment objective and certain investment
limitations, as described in the SAI, are fundamental and therefore may not be
changed without approval of the holders of a majority of the Fund's or
Portfolio's, as applicable, outstanding voting securities (as defined in the
1940 Act). Except as otherwise indicated herein or in the SAI, investment
policies of a Fund or a Portfolio may be changed by the applicable board of
trustees without shareholder approval. Each Portfolio is permitted to hold cash
in any amount pending investment in securities and may invest in other
investment companies that intend to comply with Rule 2a-7 and have substantially
similar investment objectives and policies. A further description of the Funds'
and the Portfolios' investment policies is contained in the SAI.

BORROWING. Each Portfolio may borrow money for temporary or emergency
purposes (including the meeting of redemption requests), but not in excess of
33 1/3% of the value of the Portfolio's total assets. Borrowing for purposes
other than meeting redemption requests will not exceed 5% of the value of the
Portfolio's total assets.

9
<PAGE>
to resell that security to the seller at an agreed-upon price on an agreed-upon
future date, normally one to seven days later. The resale price reflects a
market rate of interest that is not related to the coupon rate or maturity of
the purchased security. The Portfolios' custodian holds the underlying
collateral, which is maintained at not less than 100% of the repurchase price.
Repurchase agreements involve certain credit risks not associated with direct
investment in securities. Each Portfolio, however, intends to enter into
repurchase agreements only with sellers which the Adviser believes present
minimal credit risks in accordance with guidelines established by the Core Trust
Board. In the event that a seller defaulted on its repurchase obligation,
however, a Portfolio might suffer a loss.

LIQUIDITY. To ensure adequate liquidity, each Portfolio may not invest more
than 10% of its net assets in illiquid securities, including repurchase
agreements not entitling the Portfolio to payment of principal within seven
days. There may not be an active secondary market for securities held by a
Portfolio. The value of securities that have a limited market tend to fluctuate
more than those that have an active market. Each Portfolio's Adviser monitors
the liquidity of the Portfolio's investments, but there can be no guarantee that
an active secondary market will exist.

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

FINANCIAL INSTITUTION GUIDELINES. Treasury Cash Portfolio and Government
Cash Portfolio invests only in instruments which, if held directly by a bank or
bank holding company organized under

10
<PAGE>
the laws of the United States or any state thereof, would be assigned to a
risk-weight category of no more than 20% under the current risk based capital
guidelines adopted by the Federal bank regulators. These Portfolios do not
intend to hold in their portfolio any securities or instruments that would be
subject to restriction as to amount held by a national bank under Title 12,
Section 24 (Seventh) of the United States Code. In addition, these Portfolios
limit their investments to those permissible for Federally chartered credit
unions under applicable provisions of the Federal Credit Union Act and the
applicable rules and regulations of the National Credit Union Administration.
Government Cash Portfolio limits its investments to investments that are legally
permissible for Federally chartered savings associations without limit as to
percentage and to investments that permit Fund shares to qualify as liquid
assets and as short-term liquid assets.

4. MANAGEMENT

ADMINISTRATION AND DISTRIBUTION

FFSI acts as the agent of the Trust in connection with the offering of
shares of the Funds but receives no compensation for these services. FFSI is a
registered broker-dealer and is a member of the National Association of
Securities Dealers, Inc.

INVESTMENT ADVISERS

Subject to the general supervision of the Core Trust Board, Forum Advisors
makes investment decisions for Treasury Portfolio and Municipal Cash Portfolio
and monitors those Portfolios' investments, and Linden makes investment
decisions for Treasury Cash Portfolio, Government Cash Portfolio and Cash
Portfolio and monitors those Portfolios' investments. Forum Advisors, which is
located at Two Portland Square, Portland, Maine 04101, provides investment
advisory services to four other mutual funds. Linden, which is located at 812 N.
Linden Drive, Beverly Hills, California 90210, is controlled by Anthony R.
Fischer, Jr., who is its sole stockholder, director, and officer. Forum Advisors
and Linden also act as investment subadvisers to the Portfolios that they do not
manage on a daily basis and from time to time may

11
<PAGE>
provide each other with assistance regarding the other's advisory
responsibilities. These services may include management of part of or all of the
Portfolios' investment portfolios.

SHAREHOLDER SERVICING

Shareholder inquiries and communications concerning the Funds may be
directed to the Transfer Agent at the address and telephone numbers on the first
page of this Prospectus. The Transfer Agent maintains an account for each
shareholder of the Funds (unless such accounts are maintained by sub-transfer
agents or processing agents) and performs other transfer agency and related
functions. The Transfer Agent is authorized to subcontract any or all of its
functions to one or more qualified sub-transfer agents or processing agents,
which may be its affiliates, who agree to comply with the terms of the Transfer
Agent's agreement with the Trust. The Transfer Agent may pay those agents for
their services, but no such payment will increase the Transfer Agent's
compensation from the Trust. For its services, the Transfer Agent is paid a
transfer agent fee at an annual rate of 0.05% of the average daily net assets of
each Fund attributable to Institutional Shares plus $12,000 per year for each
Fund and certain account and additional class charges and is reimbursed for
certain expenses incurred on behalf of the Funds.

EXPENSES OF THE FUNDS

5. PURCHASES AND REDEMPTIONS OF SHARES

GENERAL INFORMATION

12
<PAGE>
PURCHASES. Fund shares are sold at a price equal to their net asset value
next-determined after receipt of an order in proper form, on each Fund Business
Day. Fund shares are issued immediately after an order for the shares in proper
form, accompanied by funds on deposit at a Federal Reserve Bank ("Federal
Funds"), is accepted by the Transfer Agent. Each Fund's net asset value is
calculated at 4:00 p.m., Eastern Time.

Fund shares become entitled to receive distributions on the day the purchase
order is accepted if the order and payment are received by the Transfer Agent as
follows:

<TABLE>
<CAPTION>
Order Payment
Must be Must be
Received by Received by
------------ ------------
<S> <C> <C>
Daily Assets Treasury
Fund and Daily Assets
Tax-Exempt Fund......... 12:00 p.m., 4:00 p.m.,
Eastern time Eastern time
All other Funds.......... 2:00 p.m., 4:00 p.m.,
Eastern time Eastern time
</TABLE>

13
<PAGE>
Proceeds of redemptions normally are paid in cash. However, payments may be
made wholly or partially in portfolio securities if the Board determines that
payment in cash would be detrimental to the best interests of the Fund.

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

PURCHASE AND REDEMPTION PROCEDURES

INITIAL PURCHASE OF SHARES

There is a $1,000,000 minimum for initial investments in each Fund.

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

14
<PAGE>
THROUGH FINANCIAL INSTITUTIONS. Shares may be purchased and redeemed
through certain broker-dealers, banks or other financial institutions
("Processing Organizations"), including affiliates of the Transfer Agent.
Processing Organizations may charge their customers a fee for their services and
are responsible for promptly transmitting purchase, redemption and other
requests to a Fund. The Trust is not responsible for the failure of any
Processing Organization to promptly forward these requests.

SUBSEQUENT PURCHASES OF SHARES

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

REDEMPTION OF SHARES

15
<PAGE>
BY BANK WIRE. For redemptions of more than $5,000, a shareholder who has
elected wire redemption privileges may request the Fund to transmit the
redemption proceeds by Federal Funds wire to a bank account designated on the
shareholder's account application. To request bank wire redemptions by
telephone, the shareholder also must have elected the telephone redemption
privilege. Redemption proceeds are transmitted by wire on the day the redemption
request in proper form is received by the Transfer Agent.

EXCHANGES

Shareholders may exchange their shares for Institutional Shares of any other
Fund. Exchanges are subject to the fees charged by, and the restrictions listed
in the prospectus for, the fund into which a shareholder is exchanging,
including minimum investment requirements. The Funds do not charge for
exchanges, and there is currently no limit on the number of exchanges a
shareholder may make, but each Fund reserves the right to limit excessive
exchanges by any shareholder. See "Additional Purchase and Redemption
Information" in the SAI.

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

16
<PAGE>
exchange privilege may be modified materially or terminated by the Trust at any
time upon 60 days' notice to shareholders.

6. DISTRIBUTIONS AND TAX MATTERS

DISTRIBUTIONS

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

TAXES

TAX STATUS OF THE FUNDS. Each Fund intends to qualify or continue to
qualify to be taxed as a "regulated investment company" under the Internal
Revenue Code of 1986, as amended. Accordingly, no Fund will be liable for
Federal income taxes on the net investment income and capital gain distributed
to its shareholders. Because each Fund intends to distribute all of its net
investment income and net capital gain each year, the Funds should also avoid
Federal excise taxes.

Distributions paid by each Fund out of its net investment income (including
realized net short-term capital gain) are taxable to the shareholders of the
Fund as ordinary income. Two different tax rates apply to net capital gain --
that is, the excess of net gain from capital assets held for more than one year
over net losses from capital assets held for not more than one year. One rate
(generally 28%) applies to net gain on capital assets held for more than one
year but not more than 18 months and a second rate (generally 20%) applies to
the balance of such net capital gains. Distributions of net capital gain will be
taxable to shareholders as such, regardless of how long a shareholder has held
shares in the Fund.

DAILY ASSETS TAX-EXEMPT FUND. Distributions paid by Daily Assets Tax-Exempt
Fund out of federally tax-exempt interest income earned by the Fund
("exempt-interest dividends") generally will

17
<PAGE>
not be subject to federal income tax in the hands of the Fund's shareholders.
Substantially all of the distributions paid by the Fund are anticipated to be
exempt-interest dividends. Persons who are "substantial users" or "related
persons" thereof of facilities financed by private activity securities held by
the Fund, however, may be subject to federal income tax on their pro rata share
of the interest income from those securities and should consult their tax
advisers before purchasing Shares. Exempt-interest dividends are included in the
"adjusted current earnings" of corporations for purposes of the federal
alternative minimum tax ("AMT").

The income from the Portfolio's investments may be subject to the AMT.
Interest on certain municipal securities issued to finance "private activities"
("private activity securities") is a "tax preference item" for purposes of the
AMT applicable to certain individuals and corporations even though such interest
will continue to be fully tax-exempt for regular federal income tax purposes.
The Portfolio may purchase private activity securities, the interest on which
may constitute a "tax preference item" for purposes of the AMT.

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

18
<PAGE>
the investment adviser would not have chosen to sell such securities and which
may result in a taxable gain or loss.

Shortly after the close of each year, a statement is sent to each
shareholder of the Funds advising the shareholder of the portion of total
distributions paid to the shareholder that is (i) derived from each type of
obligation in which a Fund has invested, (ii) derived from the obligations of
issuers in the various states and (iii) exempt from federal income taxes. These
portions are determined for the entire year and on a monthly basis and, thus,
are an annual or monthly average, rather than a day-by-day determination for
each shareholder.

7. OTHER INFORMATION

PERFORMANCE INFORMATION

Institutional Shares' performance may be advertised. All performance
information is based on historical results, is not intended to indicate future
performance and, unless otherwise indicated, is net of all expenses. The Funds
may advertise yield, which shows the rate of income a Fund has earned on its
investments as a percentage of the Fund's share price. To calculate yield, a
Fund takes the interest income it earned from its portfolio of investments for a
specified period (net of expenses), divides it by the average number of shares
entitled to receive distributions, and expresses the result as an annualized
percentage rate based on the Fund's share price at the end of the period. A
Fund's compounded annualized yield assumes the reinvestment of distributions
paid by the Fund, and, therefore will be somewhat higher than the annualized
yield for the same period. A Fund may also quote tax-equivalent yields, which
show the taxable yields a shareholder would have to earn to equal the Fund's
tax-free yield, after taxes. A tax-equivalent yield is calculated by dividing
the Fund's tax-free yield by one minus a stated federal, state or combined
federal and state tax rate. Each class' performance will vary.

BANKING LAW MATTERS

DETERMINATION OF NET ASSET VALUE

19
<PAGE>
with Rule 2a-7. The Portfolios will only value their portfolio securities using
this method if the Core Trust Board believes that it fairly reflects the
market-based net asset value per share. The Portfolios' other assets, if any,
are valued at fair value by or under the direction of the Core Trust Board.

THE TRUST AND ITS SHARES

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

FUND STRUCTURE

OTHER CLASSES OF SHARES. In addition to Institutional Shares, each Fund may
create and issue shares of other classes of securities. Each Fund currently has
two other classes of shares authorized, Institutional Service Shares and
Investor Shares. Institutional Services Shares are offered solely through banks,
trust companies and certain other financial institutions, and their affiliates
and correspondents, for investment of their funds or funds for which they act in
a fiduciary, agency or custodial capacity. Investor Shares are offered to the
general public, have a $10,000 minimum investment and bear shareholder service
and distribution fees. Institutional Service Shares and Investor Shares incur
more expenses than Institutional Shares. See, "Additional Information" below.
Except for certain differences, each share of each class represents an
undivided, proportionate interest in a Fund. Each share of each Fund is entitled
to participate equally in distributions and the proceeds of any liquidation of
that Fund except that, due to the differing expenses borne by the various
classes, the amount of distributions will differ among the classes.

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

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

22
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FORUM FUNDS
INSTITUTIONAL SHARES
<TABLE>
<CAPTION>