<PAGE>
FORUM FUNDS Registered Trademark
MARCH 31, 1997
ANNUAL REPORT
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TABLE OF CONTENTS
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Page
Economic Overview................ 2
Market Review.................... 4
FINANCIAL STATEMENTS OF THE FORUM
FUNDS
Schedules of Investments:
Investors Bond Fund............ 8
TaxSaver Bond Fund............. 9
Maine Municipal Bond Fund...... 11
New Hampshire Bond Fund........ 16
Payson Balanced Fund........... 19
Payson Value Fund.............. 21
Statements of Assets and
Liabilities.................... 23
Statements of Operations......... 24
Statements of Changes in Net
Assets......................... 25
Financial Highlights............. 27
Notes to Financial Statements.... 31
Report of Independent Auditors... 35
FINANCIAL STATEMENTS OF CORE
TRUST (DELAWARE)
Schedule of Investments:
Treasury Portfolio............. 37
Statement of Assets and
Liabilities.................... 38
Statement of Operations.......... 38
Statement of Changes in Net
Assets......................... 39
Supplementary Data............... 40
Notes to Financial Statements.... 41
Report of Independent Auditors... 43
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i
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FORUM FUNDS-REGISTERED TRADEMARK-
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<S> <C>
INVESTORS BOND FUND SHAREHOLDER INQUIRIES
TAXSAVER BOND FUND Forum Financial Corp.
MAINE MUNICIPAL BOND FUND P.O. Box 446
NEW HAMPSHIRE BOND FUND Portland, Maine 04112
DAILY ASSETS TREASURY FUND 207-879-0001
PAYSON BALANCED FUND
PAYSON VALUE FUND
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March 3, 1997 ANNUAL REPORT
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Dear Investor:
We are pleased to present Forum Funds' annual report for fiscal year 1996
and to review our results for the period. Total net assets of the funds at
fiscal year end 1996 approached $150 million. Although net assets in our fixed
income funds fell below 1995 levels, we experienced significant increases in
assets in the balanced and equity funds. These funds now represent over $31
million in net assets.
The long bull market in stocks continued during 1996 with the S&P 500
providing investors with total returns approaching 20%. At the same time, the
bond market reacted to the strength of economic growth and its potential for
inflation. The result was a general increase in interest rates, lower bond
prices, and lagging bond market performance.
Forum Funds provided solid returns to investors in all categories. We think
it worth noting that Investors Bond Fund significantly outperformed its
benchmark during the period, providing investors a total return of nearly 7.2%,
not including the impact of sales charges. By contrast, its benchmark, the
Lehman Intermediate Government Corporate Index, had a total return of 4.8%
during the same period.
As you know, we encourage a long term, patient approach to making
investments. The investment strategy of Forum Funds is based upon this simple
but important concept. Forum Funds strives for consistency of management that
will successfully reward our shareholders over time. This conservative approach
is particularly appropriate now, during a period that has seen the longest, most
sustained bull market in history. We will continue to seek out investment
opportunities that reflect our fiscal philosophy, while also providing equitable
return on investment.
Thank you for continuing to place your confidence in Forum Funds. We remain
dedicated to providing the consistent, superior level of investment service you
have come to expect. Should you have questions, please bring them to your local
investment institution or call us directly at 207-879-0001.
Sincerely,
[SIGNATURE]
John Y. Keffer
President
<PAGE>
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ECONOMIC OVERVIEW
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ECONOMIC AND FINANCIAL DEVELOPMENTS DURING THE FISCAL YEAR
The final three calendar quarters of 1996 saw an economy that produced well:
there was steady growth, low inflation, solid corporate profit expansion, and
stable employment. This was more than just "more of the same." Performance
surpassed the expectations of the many prognosticators who believed for some
time that a change was overdue. Instead, despite volatility within the markets,
the economic data indicated that the delicate act of balancing economic growth
and inflation was achieved with relative ease.
As usual, market participants gazing into crystal balls often saw more than
was there, reading a long term change into each data blip. The result was that
financial markets shifted far more than economic activity warranted. Volatility
in equities and bonds increased. Stock market indices fell sharply in the
summer, only to rebound and far surpass prior levels within a few months. Bond
prices fell mid-year, leading the yield on the thirty-year Treasury bond to rise
to 7.2% before it declined once again to bottom out in late November.
As 1996 ended and 1997 began, the stock market continued strong. Then, the
bond market, reacting to more certain indicators of a robust economy, put the
brakes on. Comments by Alan Greenspan, Chairman of the Federal Reserve Board,
about the markets' "irrational exuberance" raised speculation of a Federal
Reserve rate hike. Speculation became reality as the Fed raised rates at the end
of March 1997.
Last year's report to you described widespread economic and political
uncertainties. It came as no surprise when that volatility persisted. As
investors, we know that such an environment presents opportunity and that in
such situations investment strategies grounded in prudence and quality are
beneficial to controlling risk. As always, we will work to take advantage of the
opportunities the markets will no doubt continue to present.
FORUM FUNDS PERFORMANCE
We are particularly proud of our performance in the fixed income category
this year where the Investors Bond Fund had a total return of nearly 7.2% which,
excluding the impact of sales charges, bettered its benchmark by a wide margin
of 2.3%. In the equity category, although it fell shy of its benchmark, the
Payson Value Fund provided the strongest absolute total return of all Forum
Funds, producing a return of just over 13%. Our other funds also performed well
relative to their benchmarks, particularly given the difficult fixed income
market and a stock market that exhibited very narrow breadth. On both an
absolute and risk adjusted basis we continue to be very pleased with the results
generated.
2 FORUM FUNDS-Registered Trademark-
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ECONOMIC OVERVIEW (CONTINUED)
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SUMMARY PERFORMANCE INDICATORS
12 MONTH TOTAL RETURN-PERIOD ENDING MARCH 31, 1997
<TABLE>
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FORUM VS.
FORUM INDEX INDEX
----------- -------------- ------------
<S> <C> <C> <C>
Investors Bond Fund............................................................... 7.18% 4.88%1 2.30%
TaxSaver Bond Fund................................................................ 5.15% 4.58%2 0.57%
Maine Municipal Bond Fund......................................................... 4.98% 4.58%2 0.40%
New Hampshire Bond Fund........................................................... 4.56% 4.58%2 -0.02%
Payson Balanced Fund.............................................................. 9.42% 10.39%3 -0.97%
Payson Value Fund................................................................. 13.01% 16.00%4 -2.99%
Daily Assets Treasury Fund........................................................ 4.80% 4.68%5 0.12%
1 MORNINGSTAR Corporate-General Average:
428 Funds
2 MORNINGSTAR Municipal-National Average:
525 Funds
3 MORNINGSTAR Balanced Average:
348 Funds
4 MORNINGSTAR Growth & Income Average:
549 Funds
5 IBC's MONEY FUND REPORT AVERAGES-TM-
100% U.S. Treasury: 35 Funds
</TABLE>
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. FORUM, MORNINGSTAR AND IBC
RETURN FIGURES DO NOT INCLUDE THE EFFECT OF SALES CHARGES. DURING THE PERIOD
CERTAIN FEES AND EXPENSES WERE WAIVED BY THE SERVICE PROVIDERS. WITHOUT THESE
WAIVERS TOTAL RETURNS WOULD HAVE BEEN LOWER.
ECONOMIC & MARKET OUTLOOK
It seems likely the economy is experiencing faster real growth than
generally believed and certainly faster than the Federal Reserve would like.
With a real growth rate benchmark of 2.5%, we think it probable the Federal
Reserve's rate hike of March 25th will be repeated at least once more. A hot
economy and tight labor market are precursors to a rising rate of price and wage
inflation. The current environment indicates that the balancing act will end,
the fixed income markets and the Federal Reserve will act and interest rates
will rise.
3 FORUM FUNDS-Registered Trademark-
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FIXED INCOME & MARKET REVIEW
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The final three calendar quarters of 1996 and first quarter of 1997 saw
increasing volatility in the fixed income markets as many bond market investors
reacted to each new piece of economic data. Unlike other managers, we do not
attempt to capture short term basis point moves as economic data are released.
We believe the risks associated with such efforts are high, and the results as
likely to have a negative impact on performance as a positive one. Our view is
that our investors are better served by positioning the funds for the longer
term trends we see developing in the fixed income markets. The success of this
stable, longer term approach has been borne out in the past and in this fiscal
year as demonstrated by solid returns relative to similar funds.
Although we saw far more volatility in the bond markets than we expected at
this time last year, we were not surprised by the final results. The economy
continued to grow at a rapid pace so that by the end of our fiscal year the
specter of inflation was raised. In fact, the strength of the economy led the
Federal Reserve Board to put a governor on the economic engine by moving
interest rates up a notch. We continue to share the Federal Reserve's concern
about increasing inflationary pressures. As a result, we are taking a cautionary
approach in managing the funds. All of our portfolios are defensively postured
for a strong economic environment in which both short and long term rates will
rise. At year end, our portfolios have relatively short average maturities and
durations and are oriented toward higher coupon bonds. The higher coupon bonds
provide more income to investors and should also depreciate less against the
expected rise in interest rates. Also, since yield spreads between bonds of
different quality are narrow, we have looked to invest in high quality
instruments. As we indicated in our report of last year, we closely monitor both
the economic and political news for changes that may impact our funds and
perhaps cause us to shift their position.
We thank you for your support and the confidence you place in us. We will
continue to work diligently to fulfill the funds' objectives and those of our
shareholders.
Forum Advisors, Inc.
Investment Adviser
4 FORUM FUNDS-Registered Trademark-
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FIXED INCOME REVIEW
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These charts reflect a comparison in the change in value of a $10,000
investment, including applicable sales charges, in Investors Bond Fund, TaxSaver
Bond Fund, Maine Municipal Bond Fund and New Hampshire Bond Fund, to each Fund's
related securities index. The Lehman Intermediate Corporate/Government Index is
a market index of fixed-rate government and investment grade securities with
maturities of up to 10 years. The Lehman 10 Year Municipal Index is a market
index of investment grade municipal fixed-rate debt securities with an average
maturity of 10 years. Returns of the funds reflect the reinvestment of all
dividends and distributions. Investnment return and principal value of an
investment in the Funds will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. PAST PERFORMANCE
IS NOT PREDICTIVE NOR A GUARANTEE OF FUTURE RESULTS.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT INCLUDING SALES CHARGE
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
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<CAPTION>
INVESTORS BOND FUND VS. LEHMAN INTERMEDIATE
CORPORATE/GOVERNMENT INDEX
<S> <C> <C>
Lehman Intermediate
Government/Corporate Index Investors Bond Fund
10/89 $10,212 $9,775
3/90 $10,322 $9,896
3/91 $11,568 $11,060
3/92 $12,815 $12,488
3/93 $14,411 $14,177
3/94 $14,774 $14,843
3/95 $15,438 $15,518
3/96 $16,911 $17,045
3/97 $17,724 $18,268
Average Annual Total Return
1 Year: 7.18%
5 Year: 7.91%
Since Inception on 10/2/89: 8.92%
Value on 3/31/97
Investors Bond Fund: $18,268
Lehman Index: $17,724
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
TAXSAVER BOND FUND VS. LEHMAN 10 YEAR
MUNICIPAL INDEX
<S> <C> <C>
Lehman 10-Year
Municipal Index Taxsaver Bond Fund
10/89 $10,114 $9,656
3/90 $10,413 $9,913
3/91 $11,575 $10,735
3/92 $12,652 $11,696
3/93 $14,326 $13,016
3/94 $14,724 $13,698
3/95 $15,831 $14,544
3/96 $17,245 $15,615
3/97 $18,380 $16,418
Average Annual Total Return
1 Year: 5.15%
5 Year: 7.02%
Since Inception on 10/2/89: 7.38%
Value on 3/31/97
TaxSaver Bond Fund: $16,418
Lehman Index: $18,380
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
MAINE MUNICIPAL BOND FUND VS. LEHMAN 10 YEAR
MUNICIPAL INDEX
<S> <C> <C>
Lehman 10-Year Maine Municipal
Municipal Index Bond Fund
12/91 $10,213 $9,630
3/92 $10,204 $9,785
3/93 $11,553 $10,939
3/94 $11,874 $11,314
3/95 $12,767 $12,027
3/96 $13,907 $12,910
3/97 $14,823 $13,552
Average Annual Total Return
1 Year: 4.98%
Since Inception on 12/5/91: 6.64%
Value on 3/31/97
Maine Municipal Bond Fund: $13,552
Lehman Index: $14,823
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
NEW HAMPSHIRE BOND FUND VS. LEHMAN 10 YEAR
MUNICIPAL INDEX
<S> <C> <C>
Lehman 10-Year
Municipal Index New Hampshire Bond Fund
1/93 $10,168 $9,621
3/93 $10,386 $9,754
3/94 $10,675 $10,218
3/95 $11,477 $10,864
3/96 $12,503 $11,663
3/97 $13,326 $12,195
Average Annual Total Return
1 Year: 4.56%
Since Inception on 12/31/92: 5.73%
Value on 3/31/97
New Hampshire Bond Fund: $12,195
Lehman Index: $13,326
</TABLE>
5 FORUM FUNDS-Registered Trademark-
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EQUITY MARKET REVIEW
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For the past year, the historic bull market of the 1980's and 1990's has
continued at a pace exceeding almost all observers' predictions, with only a few
brief interruptions. While stock market valuations seemed to embody optimistic
expectations for corporate earnings and inflation entering 1996, the economy
(global and domestic) managed to cooperate on both fronts. On average, corporate
earnings reports have continued to meet or exceed analysts' expectations, and
the economy has continued to grow at a pace consistent with low inflation,
allowing for further advances in stock prices.
The generous investment results indicated by the popular equity market
indices (the Dow Jones Industrial Average and the S&P 500 Index) were not easily
achieved by most investors due to the unusually narrow breadth of the advance.
For the past two years now, the greatest returns have, for the most part, been
experienced by a relatively small group of large company stocks. Behind this
pricing dichotomy have been a strong preference by institutional investors for
large, liquid issues, and a willingness by investors to purchase stocks of
rapidly growing companies at valuations that appear excessive by historical
standards.
In this environment, H.M. Payson & Co. has continued to employ an investment
discipline based on value characteristics. Specifically, we seek to identify
issues with lower than average prices relative to earnings, cash flow, and book
value, yet higher than average profitability and dividend yields. Historically,
this discipline has been shown to generate above-average investment returns.
Recently, however, the market's focus on growth issues has left most value
managers trailing the indices.
Despite trailing the indices somewhat, the Payson Funds have provided solid
absolute returns. For the one year period ending March 31, 1997, the Payson
Value Fund and the Payson Balanced Fund produced total returns of 13.01% and
9.42%, respectively. Since inception, the Payson Value Fund has had an
annualized total return of 14.77%; the Balanced Fund 11.52%. Adjusted for the 4%
maximum sales charge, the total returns for the one-year and since inception
periods would have been 8.47% and 13.77%, respectively, for the Value Fund, and
5.05% and 10.67% for the Balanced Fund.(1)
Despite the difficulty in keeping pace with the indices, we have maintained
a strict adherence to our value discipline. Although the recent market trends
have not favored this discipline, we are confident that the tide will eventually
turn, as it always does. When that time comes, we believe that the patience of
shareholders will be rewarded with a period of superior relative performance. We
appreciate your continuing loyalty and support.
H.M. Payson & Co.
Investment Advisor
- ------------------------
(1) Through 3/31/97. Value Fund inception 7/31/92; Balanced Fund 11/25/91.
Performance data quoted represents past performance and is no guarantee of
future results. You should realize that investment return and principal will
fluctuate, so that shares, when redeemed, may be worth more or less than
their original cost. Forum Financial Services, Inc., Distributor. Total
returns restated to reflect the current maximum initial 4% sales charge.
Prior to 8/01/96, Fund shares were offered without a sales charge. Thus,
actual total returns for purchases of shares during that period would have
been higher than noted.
During the periods discussed, various fees and expenses were waived and
reimbursed. Had these waivers and reimbursements not occurred, the
performance of each fund would have been lower.
6 FORUM FUNDS-Registered Trademark-
<PAGE>
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EQUITY MARKET REVIEW
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These charts reflect a comparison in the change in value of a $10,000 investment
in Payson Balanced Fund and Payson Value Fund, including reinvestment of
dividends and distributions, to the performance of the Standard and Poor's 500
Composite Index ("S&P 500"). The S&P 500 is a market weighted index composed of
500 large capitalization companies and reflects the reinvestment of dividends.
Investment return and principal value of an investment in the Funds will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than their original cost. PAST PERFORMANCE IS NOT PREDICTIVE NOR A GUARANTEE OF
FUTURE RESULTS.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PAYSON BALANCED FUND VS. S&P 500 INDEX
S&P 500 Index Payson Balanced Fund
<S> <C> <C>
11/91 $11,142 $9,600
3/92 $10,861 $9,897
3/93 $12,513 $11,393
3/94 $12,693 $12,190
3/95 $14,666 $12,921
3/96 $19,370 $15,725
3/97 $23,209 $17,206
Average Annual Total Return
1 Year: 9.42%
Since Inception on 11/25/91: 11.52%
Value on 3/31/97
Payson Balanced Fund: $17,206
S&P 500 Index: $23,209
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PAYSON VALUE FUND VS. S&P 500 INDEX
S&P 500 Index Payson Value Fund
<S> <C> <C>
8/92 $9,796 $9,389
3/93 $10,863 $10,661
3/94 $11,020 $11,874
3/95 $12,732 $12,648
3/96 $16,816 $16,161
3/97 $20,148 $18,263
Average Annual Total Return
1 Year: 13.01%
Since Inception on 7/31/92: 14.77%
Value on 3/31/97
Payson Value Fund: $18,263
S&P 500 Index: $20,148
</TABLE>
7 FORUM FUNDS-Registered Trademark-
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INVESTORS BOND FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1997
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<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS (16.3%)
FHLMC (3.9%)
$ 846,695 Series 90 135-A, 8.75%, 5/15/00......... $ 865,974
-----------
FNMA (6.4%)
1,397,366 Series 92 214-F, 6.37%, 10/25/22........ 1,391,260
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OTHER (6.0%)
276,477 Merrill Lynch Mortgage Investors, Inc.,
Series 89 E, 9.40%, 9/15/09........... 292,755
1,054,812 RTC, Series 92 C8 D, 8.84%,
12/25/23(b)........................... 1,042,945
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Total Other 1,335,700
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Total Collateralized Mortgage Obligations
(cost $3,511,113) 3,592,934
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CORPORATE BONDS & NOTES (50.2%)
1,175,000 Beverly Enterprises, Inc., 8.75%,
12/31/03.............................. 1,148,563
1,000,000 Boise Cascade Corp., 9.875%, 2/15/01.... 1,051,632
500,000 Chase Manhattan Bank, N.A., 9.75%,
11/1/01............................... 551,051
3,500,000 Citfed Bancorp, Inc., 8.25%, 9/1/03..... 3,436,776
750,000 Continental Bank, N.A. (a BankAmerica
subsidiary), 11.25%, 7/1/01........... 789,743
450,000 Lehman Brothers Holdings, Inc., 6.10%,
1/12/99(a)............................ 448,888
250,000 Leucadia National Corp., 10.375%,
6/15/02............................... 263,036
750,000 Merchants National Corp. (a National
City Corp. subsidiary), 9.875%,
10/1/99............................... 796,403
1,000,000 Nacolah Holding Corp. (a Sammons
Enterprises, Inc. subsidiary), 9.50%,
12/1/03............................... 1,074,012
500,000 Paine Webber, Inc., 9.25%, 12/15/01..... 533,820
1,000,000 Salomon Inc., 7.75%, 9/22/05............ 1,000,500
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Total Corporate Bonds & Notes
(cost $10,885,690) 11,094,424
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<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
GOVERNMENT MORTGAGE BACKED SECURITIES (14.6%)
FHLMC (1.1%)
$ 231,189 Pool 502128, 9.00%, 10/1/04............. $ 239,482
-----------
GNMA (13.5%)
53,619 Pool 379293, 8.00%, 8/15/25............. 54,048
557,115 Pool 383319, 8.00%, 5/15/25............. 561,571
70,229 Pool 386674, 8.00%, 2/15/25............. 70,791
45,704 Pool 397911, 8.00%, 9/15/25............. 46,069
264,975 Pool 398255, 8.00%, 9/15/25............. 267,095
366,319 Pool 413009, 8.00%, 8/15/25............. 369,249
441,945 Pool 420164, 8.00%, 10/15/25............ 445,480
587,742 Pool 429205, 8.00%, 10/15/26............ 591,903
566,304 Pool 437102, 8.00%, 11/15/26............ 570,312
-----------
Total GNMA 2,976,518
-----------
Total Government Mortgage Backed Securities
(cost $3,262,360) 3,216,000
-----------
<CAPTION>
<C> <S> <C>
SHARES
-----------
PREFERRED STOCK (3.5%)
30,000 Irwin Financial Corp. Capital Trust I
(cost $750,000) 776,250
-----------
<CAPTION>
<C> <S> <C>
SHARES/ FACE AMOUNT
-----------
SHORT-TERM HOLDINGS (15.4%)
1,104,118 1784 U.S. Treasury Money Market Fund.... 1,104,118
296,809 Dreyfus Government Cash Management
Fund.................................. 296,809
2,000,000 Fingerhut Owner Trust CP, 4/1/97........ 2,000,000
-----------
Total Short-Term Holdings
(cost $3,400,927) 3,400,927
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Total Investments (100.0%)
(cost $21,810,090) $22,080,535
-----------
-----------
</TABLE>
See Notes to Schedule of Investments. 8 FORUM FUNDS-Registered Trademark-
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TAXSAVER BOND FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1997
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<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
MUNICIPAL BONDS (93.4%)
COLORADO (7.1%)
$ 1,000,000 Douglas County, CO, School District #RE
1, GO Bonds, Series A, 8.00%,
12/15/09.............................. $ 1,243,520
-----------
ILLINOIS (5.1%)
400,000 Aurora, IL, MFHR Bonds, Fox Valley
Village Unit 18D Project, Banque
Paribas LOC, 7.75%, 9/1/98............ 412,628
465,000 Illinois Development Finance Authority
R/V, Community Rehabilitation
Providers Facilities Acquisition
Program, Series 92, 8.25%, 8/1/12..... 488,585
-----------
901,213
-----------
LOUISIANA (7.7%)
1,000,000 Louisiana Public Facilities Authority
R/V, Extended Care Facilities
Authority-Comm-Care Corp., 11.00%,
2/1/14................................ 1,339,900
-----------
NEW HAMPSHIRE (2.1%)
390,000 New Hampshire Higher EFA R/V, Kendal at
Hanover Issue, LOC Bank of Ireland,
5.80%, 10/1/12........................ 383,358
-----------
NEW JERSEY (3.1%)
500,000 New Jersey State EFA R/V, Union County
College, Series B, 7.25%, 7/1/09...... 538,725
-----------
NEW YORK (2.0%)
350,000 New York State Thruway Authority,
Service Contract R/V, Local Highway
and Bridge Project, 5.75%, 4/1/06..... 353,920
-----------
OHIO (21.1%)
750,000 Montgomery County, OH, LTGO Bonds,
5.30%, 12/1/10........................ 742,403
1,000,000 North Olmstead, OH, LTGO Bonds, AMBAC
insured, 6.20%, 12/1/11............... 1,079,720
500,000 Ohio State Air Quality Development
Authority, PCR Bonds, Cleveland
Electric Co. Project, FGIC insured,
8.00%, 12/1/13........................ 574,790
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
OHIO, CONTINUED
$ 740,000 Shelby County, OH, Hospital Facilities
R/V, Wilson Memorial Hospital, ETM
USG, 6.40%, 12/1/03................... $ 769,237
500,000 Washington County, OH, Hospital
Refunding R/V, Shelby General
Hospital, Series 93, 6.875%, 7/1/03... 526,795
-----------
3,692,945
-----------
PENNSYLVANIA (26.6%)
1,000,000 Allegheny County Hospital Development
Authority, Health Center R/V, West
Penn Hospital Foundation, Series 90,
8.00%, 1/1/05......................... 1,063,870
775,000 Allegheny County Hospital Development
Authority, Health Facilities R/V,
Allegheny Valley School Project,
7.25%, 2/1/03......................... 785,997
500,000 Bucks County, PA, IDA R/V, Personal
Care, ETM USG, Series A, 10.00%,
5/15/19............................... 757,680
665,000 Erie-Western Pennsylvania Port
Authority, Pennsylvania Refunding R/V,
8.25%, 6/15/00........................ 720,893
1,000,000 Hampden, PA, IDA, Ralston Purina Co.
Project, 8.125%, 1/1/07............... 1,075,620
110,000 Pennsylvania HEFA R/V, Medical College
of Pennsylvania, Series 91 B, 7.25%,
3/1/05 P/R USG 3/1/01 @ 102........... 121,652
125,000 Washington County, PA, IDA Refunding
R/V, Presbyterian Medical Center, FHA
insured, 6.50%, 1/15/02............... 133,846
-----------
4,659,558
-----------
PUERTO RICO (5.9%)
410,000 Commonwealth of Puerto Rico Highway &
Transportation Authority Refunding
R/V, Series 93 X, 5.00%, 7/1/02....... 409,783
575,000 University of Puerto Rico R/V, Series N,
MBIA insured, 6.25%, 6/1/04........... 623,018
-----------
1,032,801
-----------
</TABLE>
See Notes to Schedule of Investments. 9 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
TAXSAVER BOND FUND
SCHEDULE OF INVESTMENTS (continued)
MARCH 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
TEXAS (4.7%)
$ 750,000 Red River Authority, TX, PCR Bonds,
Remarketed 8/1/90, Hoechst Celanese
Corp., 7.50%, 8/1/12.................. $ 820,568
-----------
VIRGIN ISLANDS (5.0%)
805,000 Virgin Islands PFA R/V, Government
Development Program, Series A, 7.00%,
10/1/04............................... 868,660
-----------
VIRGINIA (3.0%)
500,000 Fairfax County, VA, Economic Development
Authority R/V-- C-SPAN Project, Series
91 B, 7.50%, 6/1/01................... 517,566
-----------
Total Municipals
(cost $15,876,844) 16,352,734
-----------
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
SHORT-TERM HOLDINGS (6.6%)
760,736 1784 Tax Free Money Market Fund......... $ 760,736
394,174 Fidelity Institutional Tax Exempt Money
Market Fund........................... 394,174
-----------
Total Short-Term Holdings
(cost $1,154,910) 1,154,910
-----------
Total Investments (100.0%)
(cost $17,031,754) $17,507,644
-----------
-----------
</TABLE>
See Notes to Schedule of Investments. 10 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
MAINE MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
MUNICIPAL BONDS (94.1%)
GENERAL OBLIGATION--BOND BANK (7.0%)
$ 100,000 Maine Muni Bond Bank Refunding Bonds,
Series 92 C, 5.80%, 11/1/99........... $ 103,293
80,000 Maine Muni Bond Bank Sewer & Water
Bonds, Series 91 A, 7.20%, 11/1/13,
P/R USG 11/1/01 @ 102................. 89,018
50,000 Maine Muni Bond Bank, Series 88 A,
6.70%, 11/1/98........................ 51,925
50,000 Maine Muni Bond Bank, Series 88 A,
7.50%, 11/1/05, P/R USG 11/1/98 @
102................................... 53,501
40,000 Maine Muni Bond Bank, Series 88 B,
7.65%, 11/1/06, P/R USG 11/1/98 @
102.25................................ 42,985
50,000 Maine Muni Bond Bank, Series 88 B,
7.85%, 11/1/18, P/R USG 11/1/98 @
103................................... 54,232
60,000 Maine Muni Bond Bank, Series 88 C,
7.10%, 11/1/02, P/R USG 11/1/98 @
101.25................................ 63,415
50,000 Maine Muni Bond Bank, Series 89 B,
7.40%, 11/1/14, P/R USG 1/1/99 @
102................................... 54,471
210,000 Maine Muni Bond Bank, Series 90 B,
7.20%, 11/1/07, P/R USG 11/1/00 @
102................................... 231,091
50,000 Maine Muni Bond Bank, Series 90 B,
7.20%, 11/1/11, P/R USG 11/1/00 @
102................................... 55,022
150,000 Maine Muni Bond Bank, Series 90 B,
7.20%, 11/1/15, P/R USG 11/1/00 @
102................................... 165,065
25,000 Maine Muni Bond Bank, Series 90 D,
7.375%, 11/1/10, P/R USG 11/1/00 @
102................................... 27,652
100,000 Maine Muni Bond Bank, Series 92 B,
6.65%, 11/1/07........................ 109,388
85,000 Maine Muni Bond Bank, Series 92 B,
6.75%, 11/1/12........................ 91,918
150,000 Maine Muni Bond Bank, Series 92 E,
5.80%, 11/1/04........................ 157,634
200,000 Maine Muni Bond Bank, Series 92 E,
5.875%, 11/1/05....................... 209,958
205,000 Maine Muni Bond Bank, Series 93 C,
5.55%, 11/1/08........................ 208,278
-----------
1,768,846
-----------
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
GENERAL OBLIGATION--POLITICAL SUBDIVISION (15.0%)
$ 175,000 Bar Harbor, ME, UTGO Bonds, 6.20%,
6/1/05................................ $ 186,750
75,000 Bar Harbor, ME, UTGO Bonds, 6.45%,
6/1/09................................ 81,517
15,000 Bath, ME, UTGO R/V, 7.40%, 12/1/06...... 17,521
30,000 Bath, ME, UTGO Bonds, 7.45%, 12/1/07.... 35,397
20,000 Bath, ME, UTGO Bonds, 7.50%, 12/1/08.... 23,780
50,000 Brewer, ME, UTGO Bonds, Series A, 6.10%,
1/1/03................................ 52,845
50,000 Brewer, ME, UTGO Bonds, Series A, 6.10%,
1/1/04................................ 53,058
50,000 Brewer, ME, UTGO Bonds, Series A, 6.10%,
1/1/05................................ 53,134
50,000 Brewer, ME, UTGO Bonds, Series A, 6.20%,
1/1/06................................ 53,215
60,000 City of Bangor, ME, UTGO Bonds, 5.50%,
9/1/04................................ 62,233
100,000 City of Bangor, ME, UTGO Bonds, 5.20%,
11/1/00............................... 102,140
250,000 Cumberland County, ME, UTGO Bonds,
5.25%, 2/1/07......................... 253,335
100,000 Cumberland County, ME, UTGO Bonds,
6.50%, 2/1/03, P/R USG 2/1/01 @ 102... 108,041
25,000 Ellsworth, ME, UTGO Bonds, 7.20%,
7/1/08................................ 28,682
250,000 Freeport, ME, UTGO Bonds, 7.25%,
9/1/04................................ 284,288
20,000 Freeport, ME, UTGO Bonds, 7.25%,
9/1/10................................ 23,331
40,000 Old Orchard Beach, ME, UTGO Bonds, MBIA
insured, 6.40%, 9/1/04................ 43,663
215,000 Old Orchard Beach, ME, UTGO Bonds, MBIA
insured, 6.60%, 9/1/06................ 234,298
50,000 Old Orchard Beach, ME, UTGO Bonds, MBIA
insured, 6.65%, 9/1/07................ 54,555
50,000 Portland, ME, UTGO Bonds, 12.10%,
7/1/99................................ 58,183
50,000 Portland, ME, UTGO Bonds, 10.50%,
11/1/99............................... 57,421
500,000 Portland, ME, UTGO Bonds, 6.20%,
4/1/05................................ 540,430
</TABLE>
See Notes to Schedule of Investments. 11 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
MAINE MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS (continued)
MARCH 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
GENERAL OBLIGATION--POLITICAL SUBDIVISION, CONTINUED
$ 50,000 Portland, ME, UTGO Bonds, 12.60%,
11/1/05............................... $ 76,004
790,000 Portland, ME, UTGO Bonds, 5.30%,
6/1/13................................ 773,078
150,000 South Portland, ME, UTGO Bonds, 5.80%,
9/1/08................................ 158,795
40,000 South Portland, ME, UTGO Bonds, 5.80%,
9/1/11................................ 41,787
25,000 Westbrook, ME, UTGO Bonds, 6.75%,
11/15/04.............................. 27,802
75,000 Windham, ME, UTGO Bonds, 0.05%,
6/15/08............................... 41,436
130,000 Winslow, ME, GO Bonds, Crowe Rope
Industries Project, Series A, MBIA
insured, 5.50%, 3/1/07................ 129,895
20,000 Winslow, ME, UTGO Bonds, AMBAC insured,
6.90%, 10/1/08........................ 21,847
25,000 Winthrop, ME, UTGO Bonds, 5.10%,
8/1/04................................ 25,127
25,000 Winthrop, ME, UTGO Bonds, 5.20%,
8/1/05................................ 25,158
25,000 Winthrop, ME, UTGO Bonds, 5.30%,
8/1/06................................ 25,209
25,000 Winthrop, ME, UTGO Bonds, 5.40%,
8/1/07................................ 25,324
-----------
3,779,279
-----------
GENERAL OBLIGATION--SCHOOL DISTRICTS (0.4%)
50,000 Winslow, ME, SD, UTGO Bonds, AMBAC
insured, 7.00%, 10/1/10............... 54,818
35,000 York, ME, SD, UTGO Bonds, AMBAC insured,
6.40%, 3/1/03......................... 37,551
-----------
92,369
-----------
GENERAL OBLIGATION--STATES, TERRITORIES (12.0%)
100,000 Maine, Highway Improvements, UTGO Bonds,
8.00%, 5/1/02......................... 114,301
25,000 Maine, UTGO Bonds, 10.00%, 5/15/97...... 25,187
60,000 Maine, UTGO Bonds, 10.00%, 5/15/98...... 63,967
10,000 Maine, UTGO Bonds, 9.25%, 3/15/99....... 10,904
100,000 Maine, UTGO Bonds, 6.75%, 5/15/99....... 104,798
100,000 Maine, UTGO Bonds, 8.50%, 3/1/00........ 110,497
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
GENERAL OBLIGATION--STATES, TERRITORIES, CONTINUED
$ 100,000 Maine, UTGO Bonds, 7.50%, 12/15/00...... $ 109,838
50,000 Maine, UTGO Bonds, 8.00%, 5/1/01........ 56,072
90,000 Maine, UTGO Bonds, 6.40%, 7/1/02........ 96,841
100,000 Maine, UTGO Bonds, 6.50%, 7/1/03........ 108,823
100,000 Puerto Rico Infrastructure Financing
Authority, Special Tax Refunding R/V,
Series 88 A, 7.75%, 7/1/08............ 106,010
1,150,000 Puerto Rico, UTGO Bonds, MBIA insured,
6.50%, 7/1/04......................... 1,260,665
345,000 Puerto Rico, UTGO Bonds, MBIA insured,
5.50%, 7/1/08......................... 355,926
250,000 Puerto Rico Municipal Finance Agency,
UTGO Bonds, Series 92 A, 5.80%,
7/1/04................................ 258,635
250,000 Puerto Rico Municipal Finance Agency,
UTGO Bonds, Series 92 A, 5.875%,
7/1/05................................ 258,233
-----------
3,040,697
-----------
AIRPORT REVENUE (2.5%)
100,000 Bangor, ME, LTGO Bonds, Bangor
International Airport Project, 5.75%,
10/1/01............................... 103,070
150,000 Bangor, ME, LTGO Bonds, Bangor
International Airport Project, 6.00%,
10/1/03............................... 156,716
100,000 Bangor, ME, LTGO Bonds, Bangor
International Airport Project, 6.10%,
10/1/04............................... 105,227
250,000 Bangor, ME, LTGO Bonds, Bangor
International Airport Project, 6.35%,
10/1/07............................... 263,118
-----------
628,131
-----------
EDUCATION FACILITIES REVENUE (8.5%)
30,000 Maine Educational Loan Authority,
Educational Loan R/V, Supplemental
Education Loan Program, Series 92 A-1,
6.80%, 12/1/07........................ 31,557
</TABLE>
See Notes to Schedule of Investments. 12 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
MAINE MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS (continued)
MARCH 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
EDUCATION FACILITIES REVENUE, CONTINUED
$ 70,000 Maine Educational Loan Authority,
Educational Loan R/V, Supplemental
Education Loan Program, Series 92 A-1,
7.00%, 12/1/16........................ $ 73,744
45,000 Maine Educational Loan Marketing Corp.,
Student Loan Refunding R/V, 6.90%,
11/1/03............................... 45,972
25,000 Maine Educational Loan Marketing Corp.,
Student Loan Refunding R/V, Series 92
A-1, 6.35%, 5/1/05.................... 25,751
100,000 Maine Health & Higher EFA R/V, Colby
College Issue, FGIC insured, 6.20%,
7/1/99................................ 103,775
180,000 Puerto Rico Public Buildings Authority,
Guaranteed Public Education and Health
Facilities Refunding R/V, Series 93 M,
5.10%, 7/1/01......................... 181,283
790,000 Puerto Rico Public Buildings Authority,
Guaranteed Public Education and Health
Facilities Refunding R/V, Series 93 M,
FSA insured, 5.70%, 7/1/09............ 822,983
60,000 University of Maine System R/V, 7.20%,
9/1/09, P/R USG 9/1/99 @ 102.......... 64,896
105,000 University of Maine System R/V, 7.25%,
9/1/19, P/R USG 9/1/99 @ 102.......... 113,688
645,000 University of Puerto Rico R/V, Series N,
MBIA insured, 6.25%, 6/1/04........... 698,864
-----------
2,162,513
-----------
HEALTH CARE REVENUE (16.8%)
10,000 Maine HEHFA Refunding R/V, Kennebec
Valley Medical Center, FGIC insured,
7.00%, 7/1/05......................... 10,792
185,000 Maine HEHFA Refunding R/V, Maine Medical
Center, ETM USG, 6.00%, 10/1/13....... 192,111
250,000 Maine HEHFA R/V, Coves Edge Nursing
Home, 10.00%, 8/1/20, P/R USG 8/1/00 @
103................................... 296,793
100,000 Maine HEHFA R/V, FSA insured, 6.10%,
7/1/01................................ 105,053
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
HEALTH CARE REVENUE, CONTINUED
$ 140,000 Maine HEHFA R/V, Cedar Nursing Home, FHA
insured, 7.90%, 8/1/32, P/R USG 2/1/00
@ 102................................. $ 153,150
50,000 Maine HEHFA R/V, Central Maine Medical
Center, FGIC insured, 8.00%, 7/1/18,
P/R USG 7/1/98 @ 102.................. 53,346
55,000 Maine HEHFA R/V, Kennebec Valley Medical
Center, FGIC insured, 7.00%, 7/1/15... 59,271
150,000 Maine HEHFA R/V, Portland Alliance for
Mentally Ill, Maine Coast Regional
Health Center and Thomas College, FSA
insured, 6.10%, 7/1/03................ 158,420
455,000 Maine HEHFA R/V, Saint Mary's General
Hospital, 8.50%, 7/1/09, P/R USG
7/1/99 @ 102.......................... 491,533
100,000 Maine HEHFA R/V, Series 92 B, FSA
insured, 5.875%, 7/1/06............... 103,872
500,000 Maine HEHFA R/V, Series 93 A, FSA
insured, 5.60%, 7/1/07................ 512,055
450,000 Maine HEHFA R/V, Series 93 B, FSA
insured, 5.55%, 7/1/08................ 456,350
155,000 Maine HEHFA R/V, Series 93 D, FSA
insured, 5.20%, 7/1/06................ 154,874
500,000 Maine HEHFA R/V, Series 93 D, FSA
insured, 5.30%, 7/1/07................ 501,770
25,000 Maine HEHFA R/V, Southern Maine Medical
Center, AMBAC insured, 7.20%, 1/06.... 27,052
15,000 Maine HEHFA R/V, Southern Maine Medical
Center, AMBAC insured, 7.30%,
5/1/14................................ 16,273
950,000 Maine Veterans' Homes R/V, 6.80%,
10/1/05............................... 963,936
-----------
4,256,651
-----------
HOUSING REVENUE (5.9%)
30,000 Maine HSG AUTH Refunding R/V, Series 91
A, FSA insured, 7.40%, 11/15/22....... 31,605
15,000 Maine HSG AUTH R/V, Mortgage Purchase,
Series 87 A-2, FHA/ VA Mortgage Pools,
8.10%, 11/15/08....................... 15,512
</TABLE>
See Notes to Schedule of Investments. 13 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
MAINE MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS (continued)
MARCH 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
HOUSING REVENUE, CONTINUED
$ 25,000 Maine HSG AUTH R/V, Mortgage Purchase,
Series 87 B, FHA/VA/ Private Mortgage
Pools, 7.60%, 11/15/99................ $ 25,758
10,000 Maine HSG AUTH R/V, Mortgage Purchase,
Series 88 B, FHA/VA/ Private Mortgage
Pools, 8.00%, 11/15/15................ 10,257
100,000 Maine HSG AUTH R/V, Mortgage Purchase,
Series 88 C, 8.20%, 11/15/08.......... 103,897
40,000 Maine HSG AUTH R/V, Mortgage Purchase,
Series 88 D-5, 7.45%, 11/15/11........ 41,728
200,000 Maine HSG AUTH R/V, Mortgage Purchase,
Series 88 D-6, 7.25%, 11/15/19........ 208,166
20,000 Maine HSG AUTH R/V, Mortgage Purchase,
Series 89 A-1, 7.625%, 11/15/24....... 20,819
30,000 Maine HSG AUTH R/V, Mortgage Purchase,
Series 89 A-2, 7.30%, 11/15/16........ 31,303
110,000 Maine HSG AUTH R/V, Mortgage Purchase,
Series 90 A-5, Remarketed 5/13/93,
6.20%, 11/15/16....................... 111,741
185,000 Maine HSG AUTH R/V, Mortgage Purchase,
Series 92 C, 6.55%, 11/15/12.......... 190,165
300,000 Maine HSG AUTH R/V, Mortgage Purchase,
Series 94 A-2, 5.20%, 11/15/08........ 293,736
250,000 Maine HSG AUTH R/V, Mortgage Purchase,
Series 94 C-1, 6.20%, 11/15/07........ 256,495
50,000 Maine HSG AUTH R/V, SFM R/V Bonds,
Series 91-1, 6.90%, 11/1/07........... 52,139
55,000 Maine HSG AUTH R/V, SFM R/V Bonds,
Series 91-1, 7.15%, 11/1/21........... 57,511
35,000 Virgin Islands HFA, SFM R/V Bonds, GNMA
Mortgage-Backed, 6.00%, 3/1/07........ 35,127
-----------
1,485,959
-----------
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
INDUSTRIAL DEVELOPMENT REVENUE (3.7%)
$ 100,000 Puerto Rico Industrial, Medical &
Environmental R/V, Abbott
Laboratories, Inc. Project, 6.50%,
7/1/09................................ $ 100,623
760,000 Puerto Rico Industrial, Medical &
Environmental R/V, Motorola, Inc.
Project, Series 83 A, 6.75%,
1/1/14(b)............................. 828,118
-----------
928,741
-----------
POLLUTION CONTROL REVENUE (4.4%)
530,000 East Millinocket, ME, PCR Bonds, Great
Northern Nekoosa Corp. Project, ETM
USG, 6.70%, 6/1/04.................... 561,921
500,000 Maine Finance Authority R/V, Boise
Cascade Corp. Project, 7.90%,
6/1/15................................ 540,075
-----------
1,101,996
-----------
RESOURCE RECOVERY REVENUE (3.8%)
45,000 Guam Government Water System R/V, CGIC
insured, 6.85%, 7/1/99................ 47,225
500,000 Regional Waste Systems, Inc., ME, R/V,
Series A-C, 7.30%, 7/1/98............. 518,330
345,000 Regional Waste Systems, Inc., ME, R/V,
Series A-C, 7.95%, 7/1/10............. 372,123
25,000 Regional Waste Systems, Inc., ME, R/V,
Series D-F, 7.60%, 7/1/00............. 26,565
-----------
964,243
-----------
TRANSPORTATION REVENUE (0.4%)
30,000 Maine State Turnpike Authority R/V, MBIA
insured, 6.00%, 7/1/11................ 31,106
65,000 Puerto Rico Highway & Transportation
Authority Refunding R/V, Series 92 U,
5.875%, 7/1/99........................ 66,732
-----------
97,838
-----------
UTILITIES REVENUE (2.0%)
165,000 Kennebec, ME, Water District R/V, 7.00%,
12/1/14, P/R USG 12/1/01 @ 101.50..... 183,412
40,000 Kennebec, ME, Water District R/V, 7.00%,
12/1/20, P/R USG 12/1/01 @ 101.50..... 44,463
</TABLE>
See Notes to Schedule of Investments. 14 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
MAINE MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS (continued)
MARCH 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
UTILITIES REVENUE, CONTINUED
$ 250,000 Puerto Rico Telephone Authority
Refunding R/V, Series 93 M, 5.40%,
1/1/08................................ $ 250,997
25,000 Wells Sanitation District, ME, Sewer
R/V, 6.75%, 3/1/00.................... 26,359
-----------
505,231
-----------
OTHER REVENUE (11.7%)
500,000 Guam Government R/V Bonds, Series 89 A,
Fuji Bank LOC, 7.00%, 11/15/04........ 537,395
10,000 Maine Court Facilities Authority Lease
Rental R/V, 7.15%, 8/1/07, P/R USG
8/1/00 @ 102.......................... 10,980
350,000 Virgin Islands PFA R/V, Government
Development Program, Series A, 7.00%,
10/1/04............................... 377,677
900,000 Virgin Islands PFA R/V, Matching Federal
Loan Notes, Series A, 6.90%,
10/1/01............................... 950,364
15,000 Virgin Islands PFA R/V, Series 89 B,
7.25%, 10/1/07, P/R USG 10/1/00 @
101................................... 16,396
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
OTHER REVENUE, CONTINUED
$ 875,000 Virgin Islands PFA R/V, ETM USG, Series
89 A, 7.30%, 10/1/18, $ 1,080,975
-----------
2,973,787
-----------
Total Municipal Bonds
(cost $23,315,282) 23,786,281
-----------
BOND ANTICIPATION NOTES (0.0%)
10,000 Bangor, ME, UTGO Bond Anticipation Note,
10.00%, 6/1/97 (cost $10,089)......... 10,101
-----------
<CAPTION>
<C> <S> <C>
SHARES
-----------
SHORT-TERM HOLDINGS (5.9%)
1,039,484 1784 Tax Free Money Market Fund......... 1,039,484
453,570 Fidelity Institutional Tax Exempt Money
Market Fund........................... 453,570
-----------
Total Short-Term Holdings
(cost $1,493,054) 1,493,054
-----------
Total Investments (100.0%)
(cost $24,818,425) $25,289,436
-----------
-----------
</TABLE>
See Notes to Schedule of Investments. 15 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
NEW HAMPSHIRE BOND FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
<C> <S> <C>
MUNICIPAL BONDS (97.6%)
GENERAL OBLIGATION--BOND BANK (7.2%)
$ 25,000 New Hampshire Muni Bond Bank, Series 89
B, 6.70%, 7/15/04,
P/R USG 7/15/99 @ 102................. $ 26,698
25,000 New Hampshire Muni Bond Bank, Series 90
A, 6.90%, 1/15/05..................... 26,937
20,000 New Hampshire Muni Bond Bank, Series 90
D, 6.90%, 7/15/03..................... 21,687
25,000 New Hampshire Muni Bond Bank R/V, Series
91 E, 6.90%, 8/15/06.................. 27,490
50,000 New Hampshire Muni Bond Bank Refunding
Bonds, Series 92 H, 6.35%, 7/15/06.... 53,231
175,000 New Hampshire Muni Bond Bank Refunding
Bonds, Series 92 H, 6.50%, 7/15/08.... 185,918
85,000 New Hampshire Muni Bond Bank, Series 94
C, State Guaranteed, 5.80%, 8/15/08... 88,095
150,000 New Hampshire Muni Bond Bank, Series 94
E, State Guaranteed 5.25%, 8/15/01.... 153,366
25,000 New Hampshire Muni Bond Bank, Series K,
6.75%, 1/15/08, P-K (USG) 1/15/01 @
102................................... 27,163
----------
610,585
----------
GENERAL OBLIGATION--POLITICAL SUBDIVISION (20.3%)
155,000 Bedford, NH, UTGO Bonds, 6.70%,
8/1/12................................ 164,399
100,000 Concord, NH, GO Bonds, MBIA insured,
5.00%, 1/15/09........................ 96,748
25,000 Concord, NH, GO Bonds, 7.00%, Series 88,
5/15/04, P-K (USG) 5/15/98 @ 102...... 26,311
25,000 Exeter, NH, UTGO Bonds, 5.30%,
6/15/08............................... 25,270
50,000 Exeter, NH, UTGO Bonds, Series 93,
5.10%, 6/15/05........................ 50,447
140,000 Exeter, NH, UTGO Bonds, Sewer
Improvements, 6.25%, 1/15/07.......... 147,568
50,000 Franklin, NH, GO Bonds, MBIA insured,
5.20%, 10/1/07........................ 50,462
45,000 Keene, NH, UTGO Bonds, 5.15%,
10/15/11.............................. 43,938
45,000 Manchester, NH, Public Improvement
Bonds, 7.10%, 9/1/00, P/R USG 9/1/97 @
102................................... 46,494
40,000 Manchester, NH, Public Improvement
Bonds, 7.50%, 9/1/04, P/R USG 9/1/97 @
102................................... 41,393
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
<C> <S> <C>
GENERAL OBLIGATION--POLITICAL SUBDIVISION, CONTINUED
$ 250,000 Manchester, NH, Public Improvement
Bonds, 5.50%, 11/1/12................. $ 249,080
250,000 Manchester, NH, UTGO Bonds, Series 93 A,
5.30%, 7/1/07......................... 252,893
15,000 Nashua, NH, UTGO Bonds, 6.80%, 7/1/09... 16,443
100,000 Nashua, NH, UTGO Bonds, AMBAC insured,
5.35%, 7/15/06........................ 101,343
10,000 Nashua, NH, UTGO Bonds, Public
Improvement Bonds, 6.70%, 11/1/07..... 10,761
350,000 New Hampshire State Capital Improvement
GO Bonds, 5.50%, 12/1/06.............. 361,011
10,000 New Hampshire State, GO Bonds, 6.00%,
9/1/05................................ 10,662
30,000 Salem, NH, UTGO Bonds, MBIA insured,
6.45%, 3/1/04......................... 32,175
----------
1,727,398
----------
GENERAL OBLIGATION--SCHOOL DISTRICTS (7.0%)
100,000 Concord, NH, SD, GO Bonds, 4.70%,
10/15/07.............................. 96,871
100,000 Concord, NH, SD, GO Bonds, 5.00%,
10/15/10.............................. 96,703
90,000 Farmington, NH, SD, GO Bonds, AMBAC
insured, 5.55%, 2/15/02............... 93,272
100,000 Goffstown, NH, SD, GO Bonds, AMBAC
insured, 5.25%, 8/15/11............... 97,775
25,000 Hudson, NH, SD, GO Bonds, Lot B, 7.30%,
12/15/06.............................. 28,971
20,000 Hudson, NH, SD, GO Bonds, Lot B, 7.30%,
12/15/08.............................. 23,410
50,000 Oyster River, NH, Cooperative SD State
Guaranteed GO Bonds, Lot A, 5.75%,
6/15/07............................... 52,155
100,000 Oyster River, NH, Cooperative SD State
Guaranteed GO Bonds, Lot A, 5.85%,
6/15/08............................... 104,423
----------
593,580
----------
GENERAL OBLIGATION--STATES, TERRITORIES (4.8%)
115,000 Londonderry, NH, UTGO Bonds, 5.40%,
1/15/15............................... 110,679
100,000 Nashua, NH, UTGO Public Improvement
Bonds, 6.80%, 7/1/07.................. 109,617
</TABLE>
See Notes to Schedule of Investments. 16 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
NEW HAMPSHIRE BOND FUND
SCHEDULE OF INVESTMENTS (continued)
MARCH 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
<C> <S> <C>
GENERAL OBLIGATION--STATES, TERRITORIES, CONTINUED
$ 180,000 Puerto Rico, UTGO Bonds, Series 93, MBIA
insured, 5.50%, 7/1/08................ $ 185,701
----------
405,997
----------
EDUCATION FACILITIES REVENUE (25.0%)
15,000 Mascenic, NH, Regional SD #1, Lot C,
AMBAC insured, 7.20%, 12/15/07........ 17,498
255,000 New Hampshire HEHFA (Franklin Pierce
College) R/V, Series 94, 5.50%,
10/1/04............................... 243,248
250,000 New Hampshire HEHFA (Franklin Pierce
College) R/V, 6.00%, 10/1/13.......... 227,695
125,000 New Hampshire HEHFA (Rivier College)
R/V, 6.90%, 1/1/13.................... 126,815
30,000 New Hampshire HEHFA (University System
of NH) R/V, MBIA insured, Series 92,
6.00%, 7/1/07......................... 31,311
610,000 New Hampshire HEHFA (Kendal at Hanover)
R/V, 5.80%, 10/1/12................... 599,611
485,000 Puerto Rico Public Buildings Authority,
Guaranteed Public Education and Health
Facilities Refunding R/V, Series 93 M,
FSA insured, 5.70%, 7/1/09............ 505,250
345,000 University of Puerto Rico R/V, Series N,
MBIA insured, 6.25%, 6/1/04........... 373,810
----------
2,125,238
----------
HEALTH CARE REVENUE (4.5%)
15,000 New Hampshire HEHFA (Mary Hitchcock
Memorial Hospital), FGIC insured,
4.90%, 8/15/01........................ 15,052
20,000 New Hampshire HEHFA (Elliot Hospital of
Manchester), 6.50%, 10/1/11........... 21,220
100,000 New Hampshire HEHFA (Exeter Hospital),
5.25%, 10/1/00........................ 100,317
45,000 New Hampshire HEHFA (Lakes Region
Hospital Association), 5.75%,
1/1/11................................ 45,247
50,000 New Hampshire HEHFA (Nashua Memorial
Hospital R/V), 5.50%, 10/1/02......... 50,118
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
<C> <S> <C>
HEALTH CARE REVENUE, CONTINUED
$ 150,000 New Hampshire HEHFA (Wentworth-Douglass
Hospital), 5.40%, 1/1/07.............. $ 151,131
----------
383,085
----------
HOUSING REVENUE (7.8%)
15,000 New Hampshire State HFA, SFM R/V, 6.75%,
7/1/04................................ 15,522
100,000 New Hampshire State HFA, SFM R/V, Series
92 A, 5.25%, 1/1/07................... 99,314
100,000 New Hampshire State HFA, SFM R/V, Series
96 B, 5.90%, 1/1/07................... 100,298
100,000 New Hampshire State HFA, SFM R/V, Series
96 B, 6.00%, 1/1/08................... 99,754
100,000 New Hampshire State HFA, SFM R/V, Series
96 B, 6.00%, 7/1/08................... 99,746
100,000 Puerto Rico Housing Bank & Finance
Agency Special Obligation R/V, Series
92 H, FSA insured, 5.95%, 10/1/01..... 104,955
145,000 Virgin Islands HFA, SFM R/V, GNMA
Mortgage-Backed, 6.00%, 3/1/07........ 145,527
----------
665,116
----------
INDUSTRIAL DEVELOPMENT REVENUE (0.5%)
40,000 Puerto Rico Industrial, Medical &
Environmental R/V, Motorola, Inc.
Project, Series 83 A, 6.75%,
1/1/14(b)............................. 43,585
----------
RESOURCE RECOVERY REVENUE (0.4%)
30,000 Guam Government Water System R/V, CGIC
insured, 6.85%, 7/1/99................ 31,483
----------
TRANSPORTATION REVENUE (10.0%)
25,000 Guam Government Limited Obligation
Highway R/V, Series 92 A, FSA insured,
5.60%, 5/1/00......................... 25,684
550,000 New Hampshire State Turnpike System
Refunding R/V, Series 91 A, FGIC
insured, 7.00%, 11/1/06............... 625,949
100,000 New Hampshire State Turnpike System
Refunding R/V, Series 91 A, FGIC
insured, 6.75%, 11/1/11............... 110,437
</TABLE>
See Notes to Schedule of Investments. 17 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
NEW HAMPSHIRE BOND FUND
SCHEDULE OF INVESTMENTS (continued)
MARCH 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
<C> <S> <C>
TRANSPORTATION REVENUE, CONTINUED
$ 90,000 Puerto Rico Highway & Transportation
Authority Refunding R/V, Series 93 X,
5.00%, 7/1/02......................... $ 89,952
----------
852,022
----------
OTHER REVENUE (10.1%)
70,000 Puerto Rico Public Buildings Authority,
Commonwealth Guaranteed Public
Education and Health Facilities
Refunding R/V, Series 93 M, 5.10%,
7/1/01................................ 70,499
185,000 Virgin Islands PFA R/V, Government
Development Program, Series A, 7.00%,
10/1/04............................... 199,630
100,000 Virgin Islands PFA R/V, Series A, 6.90%,
10/1/01............................... 105,596
160,000 Virgin Islands PFA R/V, Series 89 A,
7.30%, 10/1/18, P/R USG 10/1/00 @
101................................... 175,156
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ----------
<C> <S> <C>
OTHER REVENUE, CONTINUED
$ 235,000 Virgin Islands PFA R/V, Series 89 A,
7.30%, 10/1/18, P/R USG 10/1/00 @
101................................... $ 290,319
15,000 Virgin Islands PFA R/V, Series 89 B,
7.25%, 10/1/07, P/R USG 10/1/00 @
101................................... 16,396
----------
857,596
----------
Total Municipals (cost $8,288,256) 8,295,685
----------
<CAPTION>
<C> <S> <C>
SHARES
-----------
SHORT-TERM HOLDINGS (2.4%)
200,000 New Hampshire HEHFA Revenue Municipal
Demand Notes, FGIC insured, 3.20%,
7/1/21
(cost $200,000)(a).................. 200,000
----------
Total Investments (100.0%) (cost $8,488,256) $8,495,685
----------
----------
</TABLE>
See Notes to Schedule of Investments. 18 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
PAYSON BALANCED FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
COMMON STOCKS (68.1%)
CHEMICALS & ALLIED PRODUCTS (3.9%)
3,700 Dow Chemical Co......................... $ 296,000
5,750 Schering-Plough Corp.................... 418,312
-----------
714,312
-----------
COMMUNICATIONS (6.9%)
6,500 Ameritech Corp.......................... 399,750
6,000 British Telecommunications, ADR......... 420,000
22,800 US West Media Group(c).................. 424,652
-----------
1,244,402
-----------
DEPOSITORY INSTITUTIONS (2.2%)
5,960 Bank of Boston Corp..................... 399,320
-----------
ELECTRIC GAS & SANITARY SERVICES (3.3%)
10,000 Boston Edison Co........................ 262,500
10,500 GPU Corp................................ 337,312
-----------
599,812
-----------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS,
EXCEPT COMPUTER EQUIPMENT (3.3%)
12,000 HMT Technology Corp.(c)................. 147,000
5,795 Harris Corp............................. 445,490
-----------
592,490
-----------
ENERGY (1.6%)
7,600 Public Service Co. of Colorado.......... 294,500
-----------
FOOD & KINDRED PRODUCTS (1.3%)
7,200 Universal Foods Corp.................... 239,400
-----------
HEALTH SERVICES (2.2%)
16,000 Tenet Healthcare Corp.(c)............... 394,000
-----------
HOLDING & OTHER INVESTMENT OFFICES (2.3%)
17,100 Security Capital Pacific Trust.......... 416,812
-----------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER
EQUIPMENT (9.9%)
10,000 Applied Materials, Inc.(c).............. 463,750
3,270 Compaq Computer Corp.................... 250,564
2,600 IBM Corp................................ 357,175
6,950 Timken Co............................... 371,825
6,700 Varian Associates, Inc.................. 358,450
-----------
1,801,764
-----------
INSURANCE CARRIERS (4.3%)
12,200 American Financial Group, Inc........... 445,300
7,066 Travelers Group, Inc.................... $ 338,285
-----------
783,585
-----------
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
MISCELLANEOUS MANUFACTURING INDUSTRIES (1.9%)
15,500 ITT Industries, Inc..................... 346,813
-----------
OFFICE EQUIPMENT (2.4%)
17,900 American Business Products, Inc......... 429,600
-----------
OIL & GAS EXTRACTION (1.9%)
2,600 Atlantic Richfield Co................... 351,000
-----------
PAPER & ALLIED PRODUCTS (1.6%)
4,700 Willamette Industries, Inc.............. 293,750
-----------
PETROLEUM REFINING & RELATED INDUSTRIES (5.3%)
10,000 MAPCO, Inc.............................. 310,000
2,230 Mobil Corp.............................. 291,294
9,000 Phillips Petroleum Co................... 367,875
-----------
969,169
-----------
PRIMARY METAL INDUSTRIES (1.8%)
12,000 USX-US Steel Group, Inc................. 319,500
-----------
TEXTILE MILL PRODUCTS (2.3%)
11,500 Russell Corp............................ 411,125
-----------
TOBACCO PRODUCTS (2.5%)
4,000 Philip Morris Cos., Inc................. 456,500
-----------
TRANSPORT EQUIPMENT (5.2%)
15,000 Fleetwood Enterprises, Inc.............. 375,000
3,850 Northrop Grumman Corp................... 291,156
9,000 Trinity Industries, Inc................. 273,375
-----------
939,531
-----------
WHOLESALE TRADE-NONDURABLE GOODS (2.0%)
12,100 Supervalu, Inc.......................... 359,975
-----------
Total Common Stocks
(cost $10,935,975) 12,357,360
-----------
<CAPTION>
FACE AMOUNT
----------
<C> <S> <C>
CORPORATE BONDS & NOTES (10.1%)
$ 50,000 Allstate Corp., 5.875%, 6/15/98......... 49,670
100,000 Avco Financial Services, 5.875%,
10/15/97.............................. 99,972
45,000 Avco Financial Services, 5.50%,
5/1/98................................ 44,558
150,000 Bear Stearns Cos., Inc., 6.625%,
1/15/04............................... 143,731
</TABLE>
See Notes to Schedule of Investments. 19 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
PAYSON BALANCED FUND
SCHEDULE OF INVESTMENTS (continued)
MARCH 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
CORPORATE BONDS & NOTES, CONTINUED
$ 200,000 Chase Manhattan Corp., 6.25%, 1/15/06... $ 183,761
50,000 Comerica Bank, Detroit, 5.95%,
9/15/97............................... 50,029
50,000 Ford Motor Credit Corp., 7.125%,
12/1/97............................... 50,346
100,000 GTE South, Inc., 6.25%, 11/15/97........ 100,181
100,000 Household Finance Corp., 7.625%,
6/15/99............................... 101,748
200,000 Household Finance Corp., 8.00%,
8/15/04............................... 202,491
200,000 Lockheed Martin Corp., 6.85%, 5/15/01... 198,424
65,000 PepsiCo, Inc., 6.25%, 9/1/99............ 64,330
200,000 Sears Roebuck Acceptance Corp., 6.75%,
9/15/05............................... 190,597
100,000 Southwestern Bell Capital Corp., 6.05%,
2/9/98................................ 99,908
100,000 Wachovia Corp., 7.00%, 12/15/99......... 100,444
50,000 Wal-Mart Stores, Inc., 5.50%, 3/1/98.... 49,801
100,000 WMX Technologies, Inc., 8.25%,
11/15/99.............................. 103,390
-----------
Total Corporate Bonds & Notes
(cost $1,878,165) 1,833,381
-----------
GOVERNMENT AGENCY NOTES (8.6%)
FHLB (1.6%)
300,000 6.41%, 12/29/03......................... 287,650
-----------
FHLMC (3.2%)
400,000 6.89%, 10/3/05.......................... 389,418
200,000 6.65%, 2/9/06........................... 190,832
-----------
Total FHLMC 580,250
-----------
FNMA (3.8%)
100,000 9.55%, 11/10/97......................... 102,167
500,000 6.54%, 9/8/00........................... 496,433
100,000 6.38%, 4/29/03.......................... 96,662
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
FNMA, CONTINUED
-----------
Total FNMA 695,262
-----------
Total Government Agency Notes
(cost $1,574,712) 1,563,162
-----------
COLLATERALIZED MORTGAGE OBLIGATIONS (4.1%)
FHLMC (2.1%)
$ 200,000 Series 1678 C, 6.00%, 8/15/08........... $ 186,330
200,000 Series 1491 GB, 6.90%, 11/15/21......... 190,350
-----------
Total FHLMC 376,680
-----------
FNMA (2.0%)
400,000 Series 1992 184 C, 7.00%, 10/25/21...... 361,896
-----------
Total Collateralized Mortgage Obligations
(cost $798,124) 738,576
-----------
MORTGAGE BACKED SECURITIES (1.0%)
GNMA
176,445 Pool 394795, 7.50%, 10/15/10 (cost
$181,297)............................. 177,998
-----------
TREASURY NOTES (6.5%)
100,000 6.375%, 1/15/99......................... 100,031
125,000 9.125%, 5/15/99......................... 131,484
275,000 6.75%, 6/30/99.......................... 276,547
400,000 6.13%, 7/31/00.......................... 393,875
275,000 7.25%, 5/15/04.......................... 280,500
-----------
Total Treasury Notes
(cost $1,188,018) 1,182,437
-----------
<CAPTION>
SHARES
----------
<C> <S> <C>
SHORT-TERM HOLDINGS (1.6%)
286,907 1784 U.S. Treasury Money Market Fund
(cost $286,907)....................... 286,907
-----------
Total Investments (100.0%)
(cost $16,843,198) $18,139,821
-----------
-----------
</TABLE>
See Notes to Schedule of Investments. 20 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
PAYSON VALUE FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
COMMON STOCKS (96.0%)
BUILDING CONSTRUCTION--GENERAL CONTRACTORS (2.6%)
10,000 Southdown, Inc.......................... $ 342,500
-----------
CHEMICALS & ALLIED PRODUCTS (11.1%)
5,000 Abbott Laboratories..................... 280,625
6,000 Bristol-Myers Squibb Co................. 354,000
3,000 Dow Chemical Co......................... 240,000
4,000 Eastman Chemical Co..................... 215,000
5,000 Schering-Plough Corp.................... 363,750
-----------
1,453,375
-----------
COMMUNICATIONS (6.4%)
4,000 Ameritech Corp.......................... 246,000
6,000 GTE Corp................................ 279,750
17,000 US West Media Group(c).................. 316,625
-----------
842,375
-----------
DOMESTIC DEPOSITORY INSTITUTIONS (8.4%)
5,000 Bank of Boston Corp..................... 335,000
3,500 First Virginia Banks, Inc............... 179,375
5,000 JSB Financial, Inc...................... 212,501
1,333 Wells Fargo & Co........................ 378,739
-----------
1,105,615
-----------
ELECTRIC, GAS & SANITARY SERVICES (4.0%)
5,000 CINergy Corp............................ 170,625
5,000 General Public Utilities Corp........... 160,625
5,000 Public Service Co. of Colorado.......... 193,750
-----------
525,000
-----------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER
EQUIPMENT (5.5%)
4,500 Harris Corp............................. 345,937
5,000 Texas Instruments, Inc.................. 374,375
-----------
720,312
-----------
FOOD & KINDRED PRODUCTS (7.2%)
14,700 Archer Daniels Midland Co............... 262,762
11,000 IBP, Inc................................ 270,875
5,000 Universal Foods Corp.................... 166,250
10,000 Whitman Corp............................ 245,000
-----------
944,887
-----------
FOOD STORES (4.0%)
10,000 American Stores Co...................... 445,000
5,000 Ruddick Corp............................ 77,500
-----------
522,500
-----------
HEALTH SERVICES (3.4%)
9,256 MedPartners, Inc.(c).................... 196,690
10,000 Tenet Healthcare Corp.(c)............... 246,250
-----------
442,940
-----------
HOLDING & OTHER INVESTMENT OFFICES (1.9%)
10,000 Security Capital Pacific Trust.......... 243,750
-----------
INDUSTRIAL & COMMERCIAL MACHINERY &
COMPUTER EQUIPMENT (8.0%)
6,000 Briggs & Stratton Corp.................. 269,250
1,000 IBM Corp................................ 137,375
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
INDUSTRIAL & COMMERCIAL MACHINERY &
COMPUTER EQUIPMENT, CONTINUED
4,000 Timken Co............................... $ 214,000
5,200 Varian Associates, Inc.................. 278,200
3,500 York International Corp................. 146,562
-----------
1,045,387
-----------
INSURANCE CARRIERS (2.7%)
7,333 Travelers Group, Inc.................... 351,067
-----------
MISCELLANEOUS MANUFACTURING INDUSTRIES (1.2%)
7,000 ITT Industries, Inc..................... 156,625
-----------
MISCELLANEOUS RETAIL (2.1%)
10,000 Toys "R" Us, Inc.(c).................... 280,000
-----------
OIL & GAS EXTRACTION (2.1%)
2,000 Atlantic Richfield Co................... 270,000
-----------
PAPER & ALLIED PRODUCTS (2.7%)
4,500 Boise Cascade Corp...................... 137,250
3,500 Willamette Industries................... 218,750
-----------
356,000
-----------
PETROLEUM REFINING & RELATED INDUSTRIES (6.5%)
2,500 Mobil Corp.............................. 326,563
5,000 Phillips Petroleum Co................... 204,375
8,000 Repsol, S.A. ADR........................ 326,000
-----------
856,938
-----------
PRIMARY METAL INDUSTRIES (1.6%)
8,000 USX-US Steel Group, Inc................. 213,000
-----------
PRINTING, PUBLISHING & ALLIED INDUSTRIES (0.8%)
4,525 American Business Products, Inc......... 108,600
-----------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICE (1.4%)
6,000 Edwards (A.G.) Inc...................... 184,500
-----------
TOBACCO PRODUCTS (1.8%)
2,000 Philip Morris Cos., Inc................. 228,250
-----------
TRANSPORTATION (9.2%)
8,000 Fleetwood Enterprises, Inc.............. 200,000
2,298 Lockheed Martin Corp.................... 193,032
3,000 Northrop Grumman Corp................... 226,875
2,000 Paccar, Inc............................. 133,500
2,000 Textron, Inc............................ 210,000
8,000 Trinity Industries, Inc................. 243,000
-----------
1,206,407
-----------
WHOLESALE TRADE--NONDURABLE GOODS (1.4%)
6,000 Supervalu, Inc.......................... 178,500
-----------
Total Common Stocks
(cost $9,915,768) 12,578,528
-----------
SHORT TERM HOLDINGS (4.0%)
$ 528,219 1784 U.S. Treasury Money Market Fund
(cost $528,219)....................... 528,219
-----------
Total Investments (100.0%)
(cost $10,443,987) $13,106,747
-----------
-----------
</TABLE>
See Notes to Schedule of Investments. 21 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
(a) Certain securities are deemed to have a maturity remaining until the next
readjustment of the interest rate or the longer of the demand period or
readjustment. The interest rates shown reflect the rate in effect on March
31, 1997.
(b) Securities that may be resold to "qualified institutional buyers" under Rule
144A or securities offered pursuant to Section 4(2) of the Securities Act of
1933, as amended.
(c) Non-income producing securities.
<TABLE>
<S> <C>
ADR American Depositary Receipts
AMBAC American Municipal Bond Assurance Corporation
CGIC Capital Guaranty Insurance Company
CP Commercial Paper
EFA Education Finance Authority
ETM Escrowed to Maturity
FGIC Financial Guaranty Insurance Company
FHA Federal Housing Authority
FHLB Federal Home Loan Bank
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
FSA Financial Security Assurance, Inc.
GNMA Government National Mortgage Association
GO General Obligation
HEFA Higher Education Facilities Authority
HEHFA Higher Education & Health Facilities Authority
HFA Housing Finance Authority
HSG AUTH State Housing Authority
IDA Industrial Development Authority
LOC Letter of Credit
LTGO Limited Tax General Obligation
MBIA Municipal Bond Insurance Association
MFHR Multi-Family Housing Revenue
Muni Municipal
P/R Prerefunded
PCR Pollution Control Revenue
PFA Public Finance Authority
R/V Revenue Bonds
RTC Resolution Trust Company
SD School District
SFM Single Family Mortgage
VA Veterans Administration
USG U.S. Governments
UTGO Unlimited Tax General Obligation
</TABLE>
See Notes to Financial Statements. 22 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS & LIABILITIES
MARCH 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINE NEW DAILY
INVESTORS TAXSAVER MUNICIPAL HAMPSHIRE ASSETS PAYSON PAYSON
BOND BOND BOND BOND TREASURY BALANCED VALUE
FUND FUND FUND FUND FUND FUND FUND
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments (Notes 1 and 2):
Investments at cost.......... $21,810,090 $17,031,754 $24,818,425 $8,488,256 $ -- $16,843,198 $10,443,987
Net unrealized appreciation
(depreciation).............. 270,445 475,890 471,011 7,429 -- 1,296,623 2,662,760
Investment in Treasury
Portfolio at value.......... -- -- -- -- 44,184,285 -- --
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total investments at
value..................... 22,080,535 17,507,644 25,289,436 8,495,685 44,184,285 18,139,821 13,106,747
Cash........................... -- -- -- 27,070 -- -- --
Interest, dividends and other
receivables................... 264,174 311,690 485,545 147,405 -- 99,977 24,438
Receivable for securities
sold.......................... -- -- 5,153 -- -- -- --
Receivable for Fund shares
sold.......................... 302 -- 120,495 43,580 -- 6,632 2,000
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total Assets....................... 22,345,011 17,819,334 25,900,629 8,713,740 44,184,285 18,246,430 13,133,185
----------- ----------- ----------- ----------- ----------- ----------- -----------
LIABILITIES:
Dividends payable.............. 122,983 53,804 43,666 8,772 161,396 53,544 9,093
Payable to Adviser (Note 3).... 7,586 6,074 8,765 2,940 -- 9,523 9,175
Payable to other related
parties (Note 3).............. -- -- -- -- 13,333 -- --
Payable for Fund shares
redeemed...................... 19,357 -- 17,163 10,155 -- 11,334 524
Accrued expenses............... 4,841 2,449 3,540 1,193 34,404 8,886 5,425
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total Liabilities 154,767 62,327 73,134 23,060 209,133 83,287 24,217
----------- ----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS......................... $22,190,244 $17,757,007 $25,827,495 $8,690,680 $43,975,152 $18,163,143 $13,108,968
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
COMPONENTS OF NET ASSETS:
Paid in capital................ $22,060,536 $17,285,719 $25,397,217 $8,696,507 $43,969,021 $16,013,796 $10,205,833
Undistributed net investment
income (loss)................. (2,108) -- -- 489 19,454 (1,366) (24,390)
Unrealized appreciation
(depreciation) on
investments................... 270,445 475,890 471,011 7,429 -- 1,296,623 2,662,760
Accumulated net realized gain
(loss)........................ (138,629) (4,602) (40,733) (13,745 ) (13,323) 854,090 264,765
----------- ----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS......................... $22,190,244 $17,757,007 $25,827,495 $8,690,680 $43,975,152 $18,163,143 $13,108,968
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
SHARES OF BENEFICIAL INTEREST...... 2,178,639 1,693,197 2,406,727 843,042 43,969,021 1,375,806 814,041
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE................... $ 10.19 $ 10.49 $ 10.73 $ 10.31 $ 1.00 $ 13.20 $ 16.10
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
OFFERING PRICE PER SHARE, EXCEPT
MONEY MARKET FUNDS (NAV
DIVIDED BY (1-MAXIMUM SALES
LOAD))............................ $ 10.59 $ 10.90 $ 11.01 $ 10.57 $ 1.00 $ 13.75 $ 16.77
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
MAXIMUM SALES LOAD................. 3.75% 3.75% 2.50% 2.50% N/A 4.00% 4.00%
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
See Notes to Financial Statements. 23 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINE NEW DAILY
INVESTORS TAXSAVER MUNICIPAL HAMPSHIRE ASSETS PAYSON PAYSON
BOND BOND BOND BOND TREASURY BALANCED VALUE
FUND FUND FUND FUND FUND FUND FUND
----------- ----------- ----------- --------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income........... $1,912,926 $ 1,038,923 $1,363,712 $417,422 $ -- $ 401,842 $ 28,096
Dividend income........... -- -- -- -- -- 353,363 289,657
Net investment income from
Treasury Portfolio (Notes
1 and 2)................. -- -- -- -- 2,081,727* -- --
----------- ----------- ----------- --------- ----------- ----------- -----------
Total Investment Income....... 1,912,926 1,038,923 1,363,712 417,422 2,081,727 755,205 317,753
----------- ----------- ----------- --------- ----------- ----------- -----------
EXPENSES:
Investment advisory (Note
3)....................... 100,163 70,634 101,549 31,774 -- 107,243 92,360
Management (Note 3)....... 75,122 52,975 76,162 23,831 41,232 35,748 23,090
Transfer agency (Note
3)....................... 76,562 57,010 82,456 33,317 116,051 63,723 45,916
Custody................... 9,101 4,361 7,392 2,800 -- 5,521 3,890
Accounting (Note 3)....... 41,000 36,000 48,000 37,000 12,000 37,000 36,000
Audit..................... 15,131 12,500 13,307 12,500 9,500 10,717 10,500
Legal..................... 15,872 11,381 16,336 7,067 26,406 9,414 6,316
Trustees.................. 2,014 1,387 2,000 621 3,270 1,411 904
Registration.............. 7,536 7,026 10,772 8,353 20,852 9,453 7,358
Reporting................. 13,723 9,086 14,398 8,003 33,887 10,602 6,885
Miscellaneous............. 7,937 7,994 24,741 11,071 7,091 8,055 5,204
----------- ----------- ----------- --------- ----------- ----------- -----------
Total Expenses................ 364,161 270,354 397,113 176,337 270,289 298,887 238,423
Expenses reimbursed and fees
waived (Note 4).............. (189,840) (164,410) (244,808) (128,682) (125,976) (93,279) (71,003)
----------- ----------- ----------- --------- ----------- ----------- -----------
Net Expenses.................. 174,321 105,944 152,305 47,655 144,313 205,608 167,420
----------- ----------- ----------- --------- ----------- ----------- -----------
NET INVESTMENT INCOME
(LOSS)....................... 1,738,605 932,979 1,211,407 369,767 1,937,414 549,597 150,333
----------- ----------- ----------- --------- ----------- ----------- -----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss)
on investments sold...... (141,125) (1,358) 27,570 7,800 (1,082) 1,527,258 564,564
Net change in unrealized
appreciation
(depreciation) on
investments.............. 159,124 (57,061) (14,199) (31,627) -- (456,564) 695,895
----------- ----------- ----------- --------- ----------- ----------- -----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS... 17,999 (58,419) 13,371 (23,827) (1,082) 1,070,694 1,260,459
----------- ----------- ----------- --------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS................... $1,756,604 $ 874,560 $1,224,778 $345,940 $1,936,332 $1,620,291 $ 1,410,792
----------- ----------- ----------- --------- ----------- ----------- -----------
----------- ----------- ----------- --------- ----------- ----------- -----------
</TABLE>
*Net of portfolio expenses of $61,917.
See Notes to Financial Statements. 24 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED MARCH 31, 1996 AND 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINE NEW
INVESTORS TAXSAVER MUNICIPAL HAMPSHIRE
BOND BOND BOND BOND
FUND FUND FUND FUND
----------------------- ------------------------ ------------------------ ------------------------
AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
------------ --------- ------------ ---------- ------------ ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSETS--MARCH 31,
1995.................... $25,890,384 $16,017,900 $25,524,644 $ 5,275,776
- -------------------------- ------------ ------------ ------------ ------------
OPERATIONS:
Net investment income
(loss)................ 1,959,801 930,996 1,242,238 277,350
Net realized gain (loss)
on investments sold... 42,127 179,731 71,276 36,867
Net change in unrealized
appreciation
(depreciation) on
investments........... 497,162 112,851 539,077 76,453
------------ ------------ ------------ ------------
Net Increase
(Decrease) in Net
Assets Resulting
from Operations..... 2,499,090 1,223,578 1,852,591 390,670
------------ ------------ ------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income... (1,951,033) (931,523) (1,242,937) (277,495)
Net realized gain on
investments........... (11,430) (7,448) -- --
------------ ------------ ------------ ------------
Total Distribution to
Shareholders........ (1,962,463) (938,971) (1,242,937) (277,495)
------------ ------------ ------------ ------------
CAPITAL SHARE
TRANSACTIONS:
Sale of shares.......... 5,032,553 494,170 2,393,277 227,066 3,875,719 357,221 1,976,778 189,452
Reinvestment of
distributions......... 383,315 37,691 249,343 23,464 773,165 90,459 197,211 22,384
Redemption of shares.... (6,166,901) (605,493) (1,030,322) (97,139) (4,739,315) (456,068) (659,492) (66,614)
------------ --------- ------------ ---------- ------------ ---------- ------------ ----------
Net Increase
(Decrease) in
Capital
Transactions........ (751,033) (73,632) 1,612,298 153,391 (90,431) (8,388) 1,514,497 145,222
------------ --------- ------------ ---------- ------------ ---------- ------------ ----------
--------- ---------- ---------- ----------
Net Increase
(Decrease)............ (214,406) 1,896,905 519,223 1,627,672
------------ ------------ ------------ ------------
NET ASSETS--MARCH 31, 1996
- --------------------------
(Including line A)...... 25,675,978 17,914,805 26,043,867 6,903,448
------------ ------------ ------------ ------------
OPERATIONS:
Net investment income
(loss)................ 1,738,605 932,979 1,211,407 369,767
Net realized gain (loss)
on investments sold... (141,125) (1,358) 27,570 7,800
Net change in unrealized
appreciation
(depreciation) on
investments........... 159,124 (57,061) (14,199) (31,627)
------------ ------------ ------------ ------------
Net Increase in Net
Assets Resulting
from Operations..... 1,756,604 874,560 1,224,778 345,940
------------ ------------ ------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income... (1,748,440) (932,979) (1,211,407) (369,767)
Net realized gain on
investments........... (42,129) (89,232) -- --
------------ ------------ ------------ ------------
Total Distribution to
Shareholders........ (1,790,569) (1,022,211) (1,211,407) (369,767)
------------ ------------ ------------ ------------
CAPITAL SHARE
TRANSACTIONS:
Sale of shares.......... 4,548,773 445,780 1,975,008 186,690 4,353,571 386,296 3,290,772 317,277
Reinvestment of
distributions......... 372,783 36,554 381,020 36,054 679,876 84,023 260,377 31,104
Redemption of shares.... (8,373,325) (819,354) (2,366,175) (224,222) (5,263,190) (492,962) (1,740,090) (173,693)
------------ --------- ------------ ---------- ------------ ---------- ------------ ----------
Net Increase
(Decrease) in
Capital
Transactions........ (3,451,769) (337,020) (10,147) (1,478) (229,743) (22,643) 1,811,059 174,688
------------ --------- ------------ ---------- ------------ ---------- ------------ ----------
--------- ---------- ---------- ----------
Net Increase
(Decrease)............ (3,485,734) (157,798) (216,372) 1,787,232
------------ ------------ ------------ ------------
NET ASSETS--MARCH 31, 1997
- --------------------------
(Including line B)...... $22,190,244 $17,757,007 $25,827,495 $ 8,690,680
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
(A) Accumulated
undistributed net
investment income,
March 31, 1996........ $ 16,544 $ -- $ -- $ 489
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
(B) Accumulated
undistributed net
investment income,
March 31, 1997........ $ (2,108) $ -- $ -- $ 489
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
See Notes to Financial Statements. 25 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS ENDED MARCH 31, 1996 AND 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DAILY
ASSETS PAYSON PAYSON
TREASURY BALANCED VALUE
FUND FUND FUND
--------------------------- -------------------------- ------------------------
AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
------------- ------------ ------------- ----------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
NET ASSETS--MARCH 31, 1995.............. $ 36,328,855 $ 13,872,041 $ 7,959,654
- ---------------------------------------- ------------- ------------- -------------
OPERATIONS:
Net investment income (loss).......... 1,966,077 517,774 131,403
Net realized gain (loss) on
investments sold.................... (12,241) 1,250,859 903,175
Net change in unrealized appreciation
(depreciation) on investments....... -- 1,319,794 1,186,194
------------- ------------- -------------
Net Increase (Decrease) in Net
Assets Resulting from
Operations...................... 1,953,836 3,088,427 2,220,772
------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income................. (1,967,071) (528,066) (135,212)
Net realized gain on investments...... -- (384,324) (7,338)
------------- ------------- -------------
Total Distribution to
Shareholders.................... (1,967,071) (912,390) (142,550)
------------- ------------- -------------
CAPITAL SHARE TRANSACTIONS:
Sale of shares........................ 83,226,136 83,226,136 2,431,994 186,377 2,441,076 174,272
Reinvestment of distributions......... 56,702 56,702 600,277 45,666 100,673 7,046
Redemption of shares.................. (76,495,529) (76,495,529) (1,624,872) (123,730) (2,260,146) (162,425)
------------- ------------ ------------- ----------- ------------- ---------
Net Increase (Decrease) in Capital
Transactions.................... 6,787,309 6,787,309 1,407,399 108,313 281,603 18,893
------------- ------------ ------------- ----------- ------------- ---------
------------ ----------- ---------
Net Increase (Decrease)............... 6,774,074 3,583,436 2,359,825
------------- ------------- -------------
NET ASSETS--MARCH 31, 1996 (Including
line A)............................... 43,102,929 17,455,477 10,319,479
- ---------------------------------------- ------------- ------------- -------------
OPERATIONS:
Net investment income (loss).......... 1,937,414 549,597 150,333
Net realized gain (loss) on
investments sold.................... (1,082) 1,527,258 564,564
Net change in unrealized appreciation
(depreciation) on investments....... -- (456,564) 695,895
------------- ------------- -------------
Net Increase in Net Assets
Resulting from Operations....... 1,936,332 1,620,291 1,410,792
------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income................. (1,937,414) (543,918) (147,191)
Net realized gain on investments...... -- (1,714,763) (1,171,228)
------------- ------------- -------------
Total Distribution to
Shareholders.................... (1,937,414) (2,258,681) (1,318,419)
------------- ------------- -------------
CAPITAL SHARE TRANSACTIONS:
Sale of shares........................ 93,585,220 93,585,220 1,843,928 148,919 2,557,138 158,335
Reinvestment of distributions......... 94,618 94,618 1,361,863 102,532 829,392 52,847
Redemption of shares.................. (92,806,533) (92,806,533) (1,859,735) (149,706) (689,414) (42,359)
------------- ------------ ------------- ----------- ------------- ---------
Net Increase (Decrease) in Capital
Transactions.................... 873,305 873,305 1,346,056 101,745 2,697,116 168,823
------------- ------------ ------------- ----------- ------------- ---------
------------ ----------- ---------
Net Increase (Decrease)............... 872,223 707,666 2,789,489
------------- ------------- -------------
NET ASSETS--MARCH 31, 1997 (Including
line B)............................... $ 43,975,152 $ 18,163,143 $ 13,108,968
- ---------------------------------------- ------------- ------------- -------------
------------- ------------- -------------
(A) Accumulated undistributed net
investment income, March 31, 1996..... $ 19,454 $ 189 $ 1,815
------------- ------------- -------------
------------- ------------- -------------
(B) Accumulated undistributed net
investment income, March 31, 1997..... $ 19,454 $ (1,366) $ (24,390)
------------- ------------- -------------
------------- ------------- -------------
</TABLE>
See Notes to Financial Statements. 26 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTORS TAXSAVER
BOND BOND
FUND FUND
SELECTED PER SHARE ------------------------------------------- -------------------------------------------
DATA AND RATIOS FOR A
SHARE OUTSTANDING YEAR ENDED MARCH 31, YEAR ENDED MARCH 31,
THROUGHOUT EACH ------------------------------------------- -------------------------------------------
PERIOD 1997 1996 1995 1994 1993 1997 1996 1995 1994 1993
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period............... $ 10.21 $ 10.00 $ 10.38 $ 10.71 $ 10.43 $ 10.57 $ 10.39 $ 10.35 $ 10.63 $ 10.26
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Investment Operations
Net Investment Income
(Loss)................. 0.71 0.74 0.82 0.81 0.82 0.56 0.57 0.57 0.57 0.63
Net Realized and
Unrealized Gain (Loss)
on Investments......... -- 0.21 (0.38) (0.30) 0.53 (0.03) 0.18 0.04 (0.01) 0.49
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total from Investment
Operations.............. 0.71 0.95 0.44 0.51 1.35 0.53 0.75 0.61 0.56 1.12
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Distributions from
Net Investment Income... (0.71) (0.74) (0.82) (0.81) (0.82) (0.56) (0.57) (0.57) (0.57) (0.63)
Net Realized Gain on
Investments............ (0.02) -- -- (0.03) (0.25) (0.05) -- -- (0.27) (0.12)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total Distributions....... (0.73) (0.74) (0.82) (0.84) (1.07) (0.61) (0.57) (0.57) (0.84) (0.75)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net Asset Value, End of
Period.................. $ 10.19 $ 10.21 $ 10.00 $ 10.38 $ 10.71 $ 10.49 $ 10.57 $ 10.39 $ 10.35 $ 10.63
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total Return(a)........... 7.18% 9.84% 4.55% 4.70% 13.53% 5.15% 7.36% 6.18% 5.24% 11.28%
Ratio/Supplementary Data:
Net Assets at End of
Period (000's
omitted)................ $22,190 $25,676 $25,890 $26,083 $26,832 $17,757 $17,915 $16,018 $16,518 $16,580
Ratios to Average Net
Assets:
Expenses including
reimbursement/
waiver................. 0.70% 0.43% 0.75% 0.75% 0.75% 0.60% 0.60% 0.60% 0.60% 0.60%
Expenses excluding
reimbursement/
waiver................. 1.45% 1.36% 1.33% 1.31% 1.40% 1.53% 1.48% 1.45% 1.50% 1.56%
Net investment income
(loss) including
reimbursement/waiver... 6.94% 7.29% 8.19% 7.49% 7.71% 5.28% 5.35% 5.62% 5.27% 5.98%
Portfolio Turnover Rate... 79.42% 42.89% 48.17% 41.41% 193.21% 34.19% 61.61% 63.85% 141.80% 240.36%
</TABLE>
- ------------------------------
(a)Total return calculations do not include sales charge.
27 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINE
MUNICIPAL NEW HAMPSHIRE
BOND BOND
FUND FUND
SELECTED PER SHARE ------------------------------------------- -------------------------------------------
DATA AND RATIOS FOR A
SHARE OUTSTANDING YEAR ENDED MARCH 31, YEAR ENDED MARCH 31,
THROUGHOUT EACH ------------------------------------------- -------------------------------------------
PERIOD 1997 1996 1995 1994 1993 1997 1996 1995 1994 1993(a)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period...................... $ 10.72 $ 10.47 $ 10.37 $ 10.55 $ 9.98 $ 10.33 $ 10.08 $ 9.96 $ 10.01 $10.00
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Investment Operations
Net Investment Income
(Loss)..................... 0.51 0.51 0.52 0.52 0.58 0.48 0.48 0.49 0.51 0.12
Net Realized and Unrealized
Gain (Loss) on
Investments................ 0.01 0.25 0.11 (0.16) 0.57 (0.02) 0.25 0.12 (0.03) 0.01
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total from Investment
Operations.................. 0.52 0.76 0.63 0.36 1.15 0.46 0.73 0.61 0.48 0.13
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Distributions from
Net Investment Income....... (0.51) (0.51) (0.52) (0.52) (0.58) (0.48) (0.48) (0.49) (0.51) (0.12)
Net Realized Gain on
Investments................ -- -- (0.01) (0.02) -- -- -- -- (0.02) --
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total Distributions........... (0.51) (0.51) (0.53) (0.54) (0.58) (0.48) (0.48) (0.49) (0.53) (0.12)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net Asset Value, End of
Period...................... $ 10.73 $ 10.72 $ 10.47 $ 10.37 $ 10.55 $ 10.31 $ 10.33 $ 10.08 $ 9.96 $10.01
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total Return(b)............... 4.98% 7.34% 6.31% 3.42% 11.80% 4.56% 7.36% 6.32% 4.75% 5.55%(c)
Ratio/Supplementary Data:
Net Assets at End of Period
(000's omitted)............. $25,827 $26,044 $25,525 $26,310 $16,518 $ 8,691 $ 6,903 $ 5,276 $ 3,555 $ 442
Ratios to Average Net Assets:
Expenses including
reimbursement/ waiver...... 0.60% 0.60% 0.50% 0.50% 0.40% 0.60% 0.60% 0.46% 0.34% 0.50%(c)
Expenses excluding
reimbursement/ waiver...... 1.56% 1.48% 1.40% 1.44% 1.98% 2.22% 2.26% 2.19% 4.33% 30.85%(c)
Net investment income (loss)
including
reimbursement/waiver....... 4.77% 4.73% 5.08% 4.81% 5.25% 4.65% 4.65% 4.95% 4.68% 4.96%(c)
Portfolio Turnover Rate....... 21.18% 34.07% 31.55% 13.47% 7.82% 53.46% 34.31% 37.59% 9.60% --
</TABLE>
- ------------------------------
(a)See Note 1 of Notes to Financial Statements for date of commencement of
operations.
(b)Total return calculations do not include sales charge.
(c)Annualized.
28 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DAILY ASSETS PAYSON
TREASURY BALANCED
FUND FUND
SELECTED PER SHARE ------------------------------------------- -------------------------------------------
DATA AND RATIOS FOR A
SHARE OUTSTANDING YEAR ENDED MARCH 31, YEAR ENDED MARCH 31,
THROUGHOUT EACH ------------------------------------------- -------------------------------------------
PERIOD 1997 1996 1995 1994 1993(a) 1997 1996 1995 1994 1993
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 13.70 $ 11.90 $ 11.71 $ 11.40 $ 10.21
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Investment Operations
Net Investment Income
(Loss)................. 0.05 0.05 0.04 0.03 0.02 0.42 0.43 0.44 0.34 0.31
Net Realized and
Unrealized Gain (Loss)
on Investments......... -- -- -- -- -- 0.84 2.12 0.24 0.46 1.20
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total from Investment
Operations.............. 0.05 0.05 0.04 0.03 0.02 1.26 2.55 0.68 0.80 1.51
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Distributions from
Net Investment Income... (0.05) (0.05) (0.04) (0.03) (0.02) (0.42) (0.43) (0.44) (0.35) (0.31)
Net Realized Gain on
Investments............ -- -- -- -- -- (1.34) (0.32) (0.05) (0.14) (0.01)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total Distributions....... (0.05) (0.05) (0.04) (0.03) (0.02) (1.76) (0.75) (0.49) (0.49) (0.32)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net Asset Value, End of
Period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 13.20 $ 13.70 $ 11.90 $ 11.71 $ 11.40
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total Return(b)........... 4.80% 5.18% 4.45% 2.83% 3.13%(d) 9.42% 21.70% 6.00% 6.99% 15.12%
Ratio/Supplementary Data:
Net Assets at End of
Period (000's
omitted)................ $43,975 $43,103 $36,329 $26,505 $4,687 $18,163 $17,455 $13,872 $11,355 $ 5,396
Ratios to Average Net
Assets:
Expenses including
reimbursement/waiver(e)... 0.50% 0.50% 0.37% 0.33% 0.22%(d) 1.15% 1.15% 1.15% 1.15% 1.15%
Expenses excluding
reimbursement/waiver(e)... 0.99% 1.06% 1.10% 1.17% 2.43%(d) 1.67% 1.70% 1.72% 1.95% 2.60%
Net investment income
(loss) including
reimbursement/
waiver................. 4.70% 5.01% 4.45% 2.82% 2.92%(d) 3.07% 3.25% 3.91% 4.37% 3.27%
Average Commission
Rate(c)................. N/A N/A N/A N/A N/A $0.0806 $0.0973 -- -- --
Portfolio Turnover Rate... N/A N/A N/A N/A N/A 52.93% 61.77% 50.06% 80.13% 30.77%
</TABLE>
- ------------------------------
(a)See Note 1 of Notes to Financial Statements for date of commencement of
operations.
(b)Total return calculations do not include sales charge.
(c)Amount represents the average commission per share paid to brokers on the
purchase and sale of equity securities.
(d)Annualized.
(e)Includes allocated portfolio expense for Daily Assets Treasury Fund.
29 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAYSON
VALUE
FUND
SELECTED PER SHARE -------------------------------------------------------
DATA AND RATIOS FOR A
SHARE OUTSTANDING YEAR ENDED MARCH 31,
THROUGHOUT EACH -------------------------------------------------------
PERIOD 1997 1996 1995 1994 1993(A)
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period............................ $ 15.99 $ 12.71 $ 12.11 $ 11.01 $10.00
------- ------- ------- ------- -------
Investment Operations
Net Investment Income (Loss)...... 0.20 0.21 0.18 0.13 0.08
Net Realized and Unrealized Gain
(Loss) on Investments............ 1.81 3.29 0.60 1.12 1.02
------- ------- ------- ------- -------
Total from Investment Operations.... 2.01 3.50 0.78 1.25 1.10
------- ------- ------- ------- -------
Distributions from
Net Investment Income............. (0.20) (0.21) (0.18) (0.15) (0.09)
Net Realized Gain on
Investments...................... (1.70) (0.01) -- -- --
------- ------- ------- ------- -------
Total Distributions................. (1.90) (0.22) (0.18) (0.15) (0.09)
------- ------- ------- ------- -------
Net Asset Value, End of Period...... $ 16.10 $ 15.99 $ 12.71 $ 12.11 $11.01
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Total Return(b)..................... 13.01% 27.77% 6.52% 11.38% 17.05%(d)
Ratio/Supplementary Data:
Net Assets at End of Period (000's
omitted).......................... $13,109 $10,319 $7,960 $5,060 $2,145
Ratios to Average Net Assets:
Expenses including
reimbursement/waiver............. 1.45% 1.45% 1.46% 1.45% 1.44%(d)
Expenses excluding
reimbursement/waiver............. 2.07% 2.16% 2.25% 3.04% 5.53%(d)
Net investment income (loss)
including reimbursement/waiver... 1.30% 1.47% 1.59% 1.38% 1.63%(d)
Average Commission Rate (c)......... $0.0979 $0.0993 -- -- --
Portfolio Turnover Rate............. 24.13% 53.06% 27.20% 32.15% 23.95%
</TABLE>
- ------------------------------
(a)See Note 1 of Notes to Financial Statements for date of commencement of
operations.
(b)Total return calculations do not include sales charge.
(c)Amount represents the average commission per share paid to brokers on the
purchase and sale of equity securities.
(d)Annualized.
30 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
- --------------------------------------------------------------------------------
NOTE 1. ORGANIZATION
Forum Funds-Registered Trademark- (the "Trust") is an open-end management
investment company organized as a Delaware business trust. The Trust currently
has eleven active investment portfolios (each a "Fund" and collectively the
"Funds"). The Trust Instrument of the Trust authorizes each Fund to issue an
unlimited number of shares of beneficial interest without par value. Payson
Balanced Fund, Payson Value Fund, and Daily Assets Treasury Fund are diversified
portfolios. All other Funds are non-diversified. Included in this report are the
seven Funds listed below. Commencement of operations for each Fund was as
follows:
<TABLE>
<S> <C>
Investors Bond Fund October 2, 1989
TaxSaver Bond Fund October 2, 1989
Maine Municipal Bond Fund December 5, 1991
New Hampshire Bond Fund December 31, 1992
Daily Assets Treasury Fund July 1, 1992
Payson Balanced Fund November 25, 1991
Payson Value Fund July 31, 1992
</TABLE>
Daily Assets Treasury Fund seeks to achieve its investment objective by
investing all of its assets in the Treasury Portfolio, a separate diversified
portfolio of Core Trust (Delaware)("Core Trust"), which is registered as an
open-end management investment company. This is commonly referred to as a
master-feeder arrangement. Daily Assets Treasury Fund accounts for its
investment in the Treasury Portfolio as a partnership investment and records its
share of the portfolio's income, expense and realized and unrealized gain and
loss daily. The financial statements of the Treasury Portfolio, including the
portfolio of investments, are included elsewhere in this report and should be
read in conjunction with the Fund's financial statements. At March 31, 1997,
Daily Assets Treasury Fund's investment in Treasury Portfolio represented
substantially all of Treasury Portfolio's outstanding interest.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These financial statements are prepared in accordance with generally accepted
accounting principles which require management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of increase and decrease in net assets from operations
during the fiscal period. Actual results could differ from those estimates.
The following represent significant accounting policies of the Funds:
SECURITY VALUATION-Securities held by Treasury Portfolio, in which the Daily
Assets Treasury Fund invests, are valued as discussed in Note 2 of the Treasury
Portfolio's Notes to Financial Statements, which are included elsewhere in this
report. Securities, other than short-term securities, held by the other Funds
(the "Bond and Equity Funds") for which market quotations are readily available
are valued using the last reported sales price provided by independent pricing
services. If no sales are reported, the mean of the last bid and asked price is
used. In the absence of readily available market quotations, securities are
valued at fair value as determined by the Board of Trustees. Securities with a
maturity of 60 days or less held by the Bond and Equity Funds are valued at
amortized cost.
31 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1997
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS-Each Fund may invest in repurchase agreements. The Funds,
through their custodian, receive delivery of the underlying securities, whose
market value must always equal or exceed the repurchase price. The investment
adviser is responsible for determining the value of the underlying securities at
all times. In the event of default, a Fund may have difficulties with the
disposition of such securities.
INTEREST AND DIVIDEND INCOME-Interest income is accrued as earned. Dividends on
securities held by the Funds are recorded on the ex-dividend date. Daily Assets
Treasury Fund earns daily its pro rata share of income, net of expenses, on its
investment in the Treasury Portfolio.
DISTRIBUTIONS TO SHAREHOLDERS-Distributions of net investment income to
shareholders are declared daily and paid monthly by all Funds except Payson
Balanced Fund and Payson Value Fund, for which dividends are declared and paid
quarterly. Net capital gains, if any, are distributed to shareholders at least
annually. Distributions are based on amounts calculated in accordance with
applicable income tax regulations.
FEDERAL TAXES-Each Fund intends to qualify and continue to qualify each year as
a regulated investment company and distribute all of its taxable income. In
addition, by distributing in each calendar year substantially all of its net
investment income, capital gains and certain other amounts, if any, each Fund
will not be subject to a federal excise tax. Therefore, no federal income or
excise tax provision is required.
EXPENSE ALLOCATION-The Trust accounts separately for the assets and liabilities
and operations of each Fund. Expenses that are directly attributable to more
than one Fund are allocated among the respective Funds.
REALIZED GAIN AND LOSS-Security transactions are recorded on trade date.
Realized gain and loss on investments sold are recorded on the basis of
identified cost.
NOTE 3. ADVISORY FEES, SERVICING FEES AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISERS-The investment adviser for Investors Bond Fund, TaxSaver
Bond Fund, Maine Municipal Bond Fund and New Hampshire Bond Fund is Forum
Advisors, Inc.-Registered Trademark- ("Forum Advisors"). Forum Advisors receives
an advisory fee from each of these Funds at an annual rate of 0.40%, of the
average daily net assets of each Fund. The investment adviser for Payson
Balanced Fund and Payson Value Fund is H.M. Payson & Co. ("Payson"). Payson
receives an advisory fee of 0.60% and 0.80% of the average daily net assets of
Payson Balanced Fund and Payson Value Fund, respectively.
Forum Advisors serves as the investment adviser to Treasury Portfolio. Forum
Advisors receives an advisory fee of 0.05% of the Treasury Portfolio's average
daily net assets. See Note 3 of the Treasury Portfolio Notes to Financial
Statements, which are included elsewhere in this report.
MANAGEMENT AND OTHER SERVICES-Forum Financial Corp.-Registered Trademark-
("FFC"), an affiliate of Forum Advisors, serves as the Funds transfer agent and
dividend disbursing agent, and for those services receives an annual fee of
$12,000 plus 0.25% of the average daily net assets of each Fund. FFC also serves
as the Trust's fund accountant, and with the exception of Daily Assets Treasury
Fund, is compensated for such services at an amount of $36,000 per year per
Fund, plus certain amounts based upon the number and types of portfolio
transactions within each Fund. For providing fund accounting service to Daily
Assets Treasury Fund FFC receives $12,000 per year, plus a fee based upon the
number and types of portfolio transactions within the Fund.
32 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1997
- --------------------------------------------------------------------------------
The manager of the Trust is Forum Financial Services, Inc.-Registered Trademark-
(the "Manager"), a registered broker-dealer and a member of the National
Association of Securities Dealers, Inc. The Manager receives a management fee
for its services to Investors Bond Fund, TaxSaver Bond Fund, Maine Municipal
Bond Fund and New Hampshire Bond Fund at an annual rate of 0.30% of the average
daily net assets of each Fund. The Manager receives a management fee for its
services to Daily Assets Treasury Fund, Payson Balanced Fund and Payson Value
Fund at an annual rate of 0.10%, 0.20% and 0.20% of the average daily net assets
of each Fund, respectively. In addition, the Manager charged certain legal
expenses to the Funds aggregating $15,115.
The Manager also received sales commissions during the year ended March 31, 1997
amounting to $15,096 after deducting $157,998 allowed to authorized dealers and
agents. The Manager, Forum Advisors and FFC are affiliated companies.
NOTE 4. WAIVER OF FEES AND REIMBURSEMENT OF EXPENSES
FFC and the Manager have voluntarily undertaken to waive a portion of their fees
and assume certain expenses of the Funds so that total expenses of the Funds
would not exceed a certain limitation. FFC and the Manager, at their discretion,
may revise or discontinue the voluntary waivers. For the year ended March 31,
1997, expenses reimbursed and fees waived were as follows:
<TABLE>
<CAPTION>
EXPENSES FEES WAIVED
REIMBURSED --------------------
MANAGER FFC MANAGER
--------- --------- ---------
<S> <C> <C> <C>
Investors Bond Fund..................... $ 56,447 $ 58,271 $ 75,122
TaxSaver Bond Fund...................... 71,187 40,248 52,975
Maine Municipal Bond Fund............... 129,066 39,580 76,162
New Hampshire Bond Fund................. 98,312 6,539 23,831
Daily Assets Treasury Fund.............. -- 101,485 24,491
Payson Balanced Fund.................... 15,520 42,011 35,748
Payson Value Fund....................... 20,782 27,131 23,090
</TABLE>
NOTE 5. SECURITY TRANSACTIONS
Cost of purchases and proceeds from sales of securities (including maturities)
of portfolio securities (excluding short-term investments) during the year ended
March 31, 1997 were as follows:
<TABLE>
<CAPTION>
COST OF PROCEEDS
PURCHASES FROM SALES
----------- ------------
<S> <C> <C>
Investors Bond Fund..................... $17,337,374 $20,591,905
TaxSaver Bond Fund...................... 5,582,738 5,630,777
Maine Municipal Bond Fund............... 5,068,300 6,250,088
New Hampshire Bond Fund................. 5,914,321 4,168,857
Payson Balanced Fund.................... 9,253,818 9,459,319
Payson Value Fund....................... 4,147,185 2,657,351
</TABLE>
33 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1997
- --------------------------------------------------------------------------------
For federal income tax purposes, the tax basis of investment securities owned as
of March 31, 1997 were the same as for financial reporting purposes. The
aggregate gross unrealized appreciation for all securities in which there was an
excess of market value over tax cost and the aggregate gross unrealized
depreciation for all securities in which there was an excess of tax cost over
market value were as follows:
<TABLE>
<CAPTION>
NET
UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
APPRECIATION DEPRECIATION (DEPRECIATION)
------------ ---------- ----------
<S> <C> <C> <C>
Investors Bond Fund......... $ 455,572 $ 185,127 $ 270,445
TaxSaver Bond Fund.......... 519,460 43,570 475,890
Maine Municipal Bond Fund... 542,315 71,304 471,011
New Hampshire Bond Fund..... 76,210 68,781 7,429
Payson Balanced Fund........ 1,799,493 502,870 1,296,623
Payson Value Fund........... 2,873,868 211,108 2,662,760
</TABLE>
As of March 31, 1997, certain of the Funds have capital loss carryovers
available to offset future capital gains as follows:
<TABLE>
<CAPTION>
MAINE NEW HAMPSHIRE
INVESTORS TAXSAVER MUNICIPAL BOND DAILY ASSETS
BOND FUND BOND FUND BOND FUND FUND TREASURY FUND
----------- ----------- ----------- ---------------- -------------
<S> <C> <C> <C> <C> <C>
Carryovers expiring in 2003............ $ -- $ -- $ -- $ 10,104 $ --
Carryovers expiring in 2004............ -- -- 37,393 -- 6,431
Carryovers expiring in 2005............ 100,670 2,743 -- -- --
</TABLE>
NOTE 6. CONCENTRATION OF RISK
The Maine Municipal Bond Fund and New Hampshire Bond Fund invest substantially
all of their assets in debt obligations of issuers located in the states of
Maine and New Hampshire, respectively. The issuers' abilities to meet their
obligations may be affected by Maine and Hew Hampshire economic or political
developments.
NOTE 7. FEDERAL TAX STATUS OF DIVIDENDS DECLARED DURING THE FISCAL YEAR
(UNAUDITED)
<TABLE>
<CAPTION>
LONG TERM
SHORT TERM CAPITAL QUALIFYING ORDINARY EXEMPT
CAPITAL GAIN GAIN DIVIDENDS INCOME INTEREST
------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Investors Bond Fund......... $ 0.000707 $0.015991 -- 100.00 % --
TaxSaver Bond Fund.......... 0.044543 0.009259 -- -- 100.00 %
Maine Municipal Bond Fund... -- -- -- -- 100.00 %
New Hampshire Bond Fund..... -- -- -- 0.07 % 99.93 %
Daily Assets Treasury
Fund....................... -- -- -- 100.00 % --
Payson Balanced Fund........ 0.429166 0.914409 43.33 % 56.67 % --
Payson Value Fund........... 0.351236 1.343969 84.36 % 15.64 % --
</TABLE>
For federal income purposes, dividends from short term capital gains are
classified as ordinary income.
34 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders,
Forum Funds:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of the Investors Bond, TaxSaver Bond, Maine
Municipal Bond, New Hampshire Bond, Daily Asset Treasury, Payson Balanced and
Payson Value Funds [certain of the series constituting Forum Funds], as of March
31, 1997 the related statements of operations for the year then ended, the
statements of changes in net assets for the years ended March 31, 1997 and 1996
and the financial highlights for each of the years in the five-year period ended
March 31, 1997. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1997 by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Investors Bond,
TaxSaver Bond, Maine Municipal Bond, New Hampshire Bond, Daily Asset Treasury,
Payson Balanced and Payson Value Funds at March 31, 1997, the results of their
operations, the changes in their net assets and their financial highlights for
its respective stated periods, in conformity with generally accepted accounting
principles.
Deloitte & Touche LLP
Boston, MA
May 9, 1997
35
<PAGE>
CORE TRUST (DELAWARE)
ANNUAL REPORT
MARCH 31, 1997
<PAGE>
- --------------------------------------------------------------------------------
TREASURY PORTFOLIO
SCHEDULE OF INVESTMENTS
MARCH 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
TREASURY BILLS (68.1%)
$ 30,000,000 5.35% yield, 4/3/97..................... $29,991,217
STUDENT LOAN MARKETING ASSOCIATION (26.1%)
FLOATING RATE NOTES
7,500,000 5.61%, 6/12/97(a)....................... 7,500,000
1,000,000 5.59%, 8/21/97(a)....................... 1,000,000
3,000,000 5.62%, 2/5/98(a)........................ 2,998,886
-----------
Total Student Loan Marketing Association 11,498,886
-----------
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
SHORT-TERM HOLDINGS (5.8%)
2,030,312 Dreyfus Treasury Prime Cash Management
Fund Class-A Shares................... $ 2,030,312
508,072 Merrill Lynch Treasury Fund............. 508,072
-----------
Total Short-Term Holdings 2,538,384
-----------
Total Investments (100.0%) $44,028,487
-----------
-----------
</TABLE>
(a)Certain securities are deemed to have a maturity remaining until the next
readjustment of the interest rate or the longer of the demand period or
readjustment. The interest rates shown reflect the rate in effect on March
31, 1997.
See Notes to Financial Statements. 37 CORE TRUST (DELAWARE)
<PAGE>
- --------------------------------------------------------------------------------
TREASURY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments at value (amortized cost $44,028,487)...................................................... $44,028,487
Interest and other receivables......................................................................... 161,022
-----------
Total Assets............................................................................................... 44,189,509
-----------
LIABILITIES:
Payable to Adviser (Note 3)............................................................................ 1,858
Accrued expenses....................................................................................... 3,366
-----------
Total Liabilities.......................................................................................... 5,224
-----------
NET ASSETS................................................................................................. $44,184,285
-----------
-----------
COMPONENTS OF NET ASSETS:
Investors' capital..................................................................................... $44,184,945
Accumulated net realized gain (loss)................................................................... (660)
-----------
NET ASSETS................................................................................................. $44,184,285
-----------
-----------
</TABLE>
TREASURY PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income......................................................................................... $2,143,644
----------
EXPENSES:
Investment advisory (Note 3)............................................................................ 20,637
Administration (Note 3)................................................................................. 41,274
Custody................................................................................................. 10,194
Accounting (Note 3)..................................................................................... 48,000
Audit................................................................................................... 11,300
Legal (Note 3).......................................................................................... 803
Directors............................................................................................... 1,501
Miscellaneous........................................................................................... 3,485
----------
Total Expenses.............................................................................................. 137,194
Expenses reimbursed and fees waived (Note 4)............................................................ (75,277)
----------
Net Expenses................................................................................................ 61,917
----------
NET INVESTMENT INCOME....................................................................................... 2,081,727
----------
NET REALIZED GAIN (LOSS) ON INVESTMENTS SOLD................................................................ (1,082)
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................................................ $2,080,645
----------
----------
</TABLE>
See Notes to Financial Statements. 38 CORE TRUST (DELAWARE)
<PAGE>
- --------------------------------------------------------------------------------
TREASURY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED MARCH 31, 1996 AND THE YEAR ENDED MARCH 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
NET ASSETS--February 21, 1996(a).......................................................................... $ --
- ---------------------------------------------------------------------------------------------------------- ------------
OPERATIONS:
Net investment income................................................................................... 223,902
Net realized gain (loss) on investments sold............................................................ 422
------------
Net Increase (Decrease) in Net Assets Resulting From Operations....................................... 224,324
------------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST:
Contributions........................................................................................... 48,218,336
Withdrawals............................................................................................. (5,145,837)
------------
Net Transactions in Investors' Beneficial Interest.................................................... 43,072,499
------------
Net Increase (Decrease)............................................................................... 43,296,823
------------
NET ASSETS--March 31, 1996................................................................................ 43,296,823
- ---------------------------------------------------------------------------------------------------------- ------------
OPERATIONS:
Net investment income (loss)............................................................................ 2,081,727
Net realized gain (loss) on investments sold............................................................ (1,082)
------------
Net Increase (Decrease) in Net Assets Resulting From Operations....................................... 2,080,645
------------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST:
Contributions........................................................................................... 54,385,867
Withdrawals............................................................................................. (55,579,050)
------------
Net Transactions in Investors' Beneficial Interests................................................... (1,193,183)
------------
Net Increase (Decrease)............................................................................... 887,462
------------
NET ASSETS--March 31, 1997................................................................................ $ 44,184,285
- ---------------------------------------------------------------------------------------------------------- ------------
------------
</TABLE>
(a) See Note 1 of Notes to Financial Statements for date of commencement of
operations.
See Notes to Financial Statements. 39 CORE TRUST (DELAWARE)
<PAGE>
- --------------------------------------------------------------------------------
TREASURY PORTFOLIO
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Portfolio performance for each of the two years ended March 31,
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
3/31/97 3/31/96(a)
-------- -----------
<S> <C> <C>
Net Assets at End of Period (000's
omitted).............................. $44,184 $43,297
Ratios to Average Net Assets:
Expenses including
reimbursement/waiver................. 0.15% 0.15%(b)
Expenses excluding
reimbursement/waiver................. 0.33% 0.60%(b)
Net investment income (loss) including
reimbursement/waiver................. 5.04% 4.99%(b)
</TABLE>
- ------------------------------
(a)See Note 1 of Notes to Financial Statements for date of commencement of
operations.
(b)Annualized.
40 CORE TRUST (DELAWARE)
<PAGE>
- --------------------------------------------------------------------------------
TREASURY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
- --------------------------------------------------------------------------------
NOTE 1. ORGANIZATION
Core Trust (Delaware) ("Core Trust"), organized as a Delaware business trust,
was formed on September 1, 1994. Core Trust, which is registered as an open-end
management investment company under the Investment Company Act of 1940 (the
"Act"), currently has eight separate investment portfolios. These financial
statements relate to Treasury Portfolio (the "Portfolio"), a diversified
portfolio of Core Trust which commenced operations on February 21, 1996.
Interests in Treasury Portfolio are sold in private placement transactions
without any sales charge to institutional clients, including open-end management
investment companies.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These financial statements are prepared in accordance with generally accepted
accounting principles which require management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities at the date of the financial statement and the
reported amounts of increase and decrease in net assets from operations during
the fiscal period. Actual results could differ from those estimates.
PORTFOLIO VALUATION-Core Trust determines the net asset value per share as of
12:00 p.m., eastern time, on each Portfolio business day utilizing the amortized
cost method pursuant to Rule 2a-7 under the Act. Under this method, all
investments purchased at a discount or premium are valued by accreting or
amortizing, respectively, the difference between the original purchase price and
the maturity value of the investment over the period to the investment's
maturity.
FEDERAL TAXES-The Portfolio is not required to pay federal income taxes on its
net investment income and net capital gain as it is treated as a partnership for
federal income tax purposes. All interest, dividends, gain and loss of the
Portfolio is deemed to have been "passed through" to the partners in proportion
to their holdings of the Portfolio regardless of whether such interest,
dividends or gain have been distributed by the Portfolio.
REALIZED GAIN AND LOSS-Investment security transactions are recorded on trade
date. Realized gain and loss on investments sold are recorded on the basis of
identified cost.
NOTE 3. ADVISORY FEES, SERVICING FEES AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISERS-The investment adviser for the Portfolio is Forum Advisors,
Inc.-Registered Trademark- ("Forum Advisors"). Forum Advisors receives an
advisory fee at an annual rate of 0.05% of the average daily net assets of the
Portfolio. Linden Asset Management, Inc. ("Linden") also provides investment
advisory services to the Portfolio. Linden's advisory fee is paid by Forum
Advisors. Payments to Linden do not increase the amount paid by Core Trust to
Forum Advisors.
ADMINISTRATION AND OTHER SERVICES-Forum Financial Corp.-Registered Trademark-
("FFC") serves as the Portfolio's fund accountant and is compensated for those
services at an amount of $48,000 per year, subject to adjustments for the number
and type of portfolio transactions.
The administrator of Core Trust is Forum Financial Services,
Inc.-Registered Trademark- ("the Administrator"), a registered broker-dealer and
a member of the National Association of Securities Dealers, Inc. The
Administrator receives an administrative fee for its services with respect to
the Portfolio at an annual rate of 0.10% of its average daily net assets. In
addition, the Administrator charged certain legal expenses to the Portfolio
aggregating $491.
41 CORE TRUST (DELAWARE)
<PAGE>
- --------------------------------------------------------------------------------
TREASURY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1997
- --------------------------------------------------------------------------------
The Administrator also acts as Core Trust's placement agent pursuant to a
separate agreement with Core Trust. FFC, Forum Advisors and the Administrator
are affiliated companies.
NOTE 4. WAIVER OF FEES AND REIMBURSEMENT OF EXPENSES
The Manager has voluntarily undertaken to waive a portion of their fees and
assume certain expenses of the Portfolio so that the total expenses of the
Portfolio would not exceed certain limitations. For the year ended March 31,
1997 expenses reimbursed and fees waived by the Administrator were $34,003 and
$41,274, respectively.
42 CORE TRUST (DELAWARE)
<PAGE>
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
The Trustees and Investors of
Core Trust (Delaware):
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Treasury Portfolio [a series of Core Trust
(Delaware)] as of March 31, 1997, the related statement of operations for the
year then ended, and the statement of changes in net assets and the financial
highlights for each of the years in the two year period ended March 31, 1997.
These financial statements and financial highlights are the responsibility of
the Portfolio's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1997 by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Treasury Portfolio
at March 31, 1997, the results of its operations, the changes in its net assets
and its financial highlights for the respective stated periods, in conformity
with generally accepted accounting principles.
Deloitte & Touche LLP
Boston, MA
May 9, 1997
43
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[LOGO]MANAGER AND DISTRIBUTOR
Forum Financial Services, Inc.
TRANSFER AGENT
Forum Financial Corp.
FORUM FUNDS
P.O. Box 446
Portland, ME 04112
207-879-0001 (IN PORTLAND, ME)
800-94FORUM (ELSEWHERE)
